CIVIL EVIDENCE: MISSING WITNESSES, HAMLET: “THE REST IS SILENCE…”: OH, AND IT IS THE JUDGE THAT IS ON TRIAL

The judgment of HHJ Hodge (sitting as a High Court judge) in Ahuja Investments Ltd v Victorygame Ltd & Anor (CONTRACT – Purchase of commercial investment property) [2021] EWHC 2382 (Ch) is one of interest to anyone involved in litigation where witnesses are called.  It involved an assessment of the witnesses, who were there and a detailed consideration of the implications of witnesses not being called.

In his farewell speech from the Delhi High Court, Justice J.R. Midha is reputed to have said that: “In the Court of Justice, both the parties know the truth; it is the judge who is on trial.” Never has that perceptive observation resonated more fully with me than in the present case, where both parties have signally failed to assist the court by calling evidence from three highly relevant potential witnesses, in breach of their duty under CPR 1.3 to help the court to further the overriding objective to deal with the case justly and at proportionate cost. As a result, this is not so much a case of “Hamlet without the Prince” as one of Hamlet without any of Polonius, Gertrude or Laertes (or Rosencrantz and Guildenstern without Hamlet, Claudius or the Player).

 

THE CASE

The claimant claimed over £8.7 million pounds of damages following its purchase of a shopping centre from the defendant.  It was alleged that false statements were made about the length of the leases for the shops in the centre. The defendant counterclaimed for rectification.

 

  1. This is my judgement on the trial of a claim, issued on 23 May 2019, for damages for two sets of fraudulent, or alternatively negligent, misrepresentations allegedly made to the claimant by the defendants during the course of the sale by the first defendant to the claimant of a commercial investment property in West London. There is also a parallel claim for damages for breach of contract. The value of the primary claim is said to be in excess of £8.776 million (less the sum of £800,000 advanced under a loan agreement which the claimant entered into with the first defendant on completion of the sale together with £24,000 for interest which had fallen due under the loan agreement before its purported rescission and which remains outstanding). The defendants deny any and all liability to the claimant. The first defendant counterclaims for: (1) a declaration as to the true interpretation, alternatively rectification, of the sale contract; (2) the recovery of monies due under both the sale contract and the loan agreement and/or two dishonoured cheques; and (3) an injunction requiring the claimant to provide, or to procure the provision of, certain security for moneys due under the loan agreement.

WHEN KEY WITNESSES ARE NOT CALLED

The judge considered the legal principles relating to the absence of witnesses in some detail.

    1. The court has not heard from any of three witnesses who played a central role in the dealings that have given rise to this litigation: Mr Jandu (of Stradbrooks), who acted as Ahuja’s solicitor on the purchase of the property; Mr Sohal (of Monarch Commercial Property Consultants), who acted as the selling agents for the property; and Mr Fagbemi (of Chhokar & Co), who acted as the first defendant’s solicitor on the sale of the property. As I observed in my introduction, this is not so much a case of “Hamlet without the Prince” as one of Hamlet without any of Polonius, Gertrude or Laertes (or Rosencrantz and Guildenstern without Hamlet, Claudius or the Player).
    1. It is well-known that, in certain circumstances, the court may be justified in drawing adverse inferences from the absence of a witness who might have been called, and who might be expected to have material evidence to give; but the burden is on the party who invites the court to draw an adverse inference from the failure to call such a witness clearly to identify the nature of the evidence which the court is invited to infer, and to explain why the absence of evidence on the point from that witness is material to that issue. Mr Clarke referred me to the case of Magdeev v Tsvetkov [2020] EWHC 887 (Comm) where, founding themselves upon observations of Brooke LJ (with the agreement of Roch and Aldous LJJ) in what Cockerill J describes as “the increasingly relied upon authority” of Wisniewski v Central Manchester Health Authority [1998] PIQR 324, each party had suggested that the court should draw adverse inferences against the other because certain witnesses had not been called. Having reviewed the authorities, Brooke LJ derived the following principles from them in the context of the case that was before his court:
(1) In certain circumstances, a court may be entitled to draw adverse inferences from the absence, or the silence, of a witness who might be expected to have material evidence to give on an issue in that action.
(2) If a court is willing to draw such inferences, they may go to strengthen the evidence adduced on that issue by the other party, or to weaken the evidence, if any, adduced by the party who might reasonably have been expected to call the witness.
(3) There must, however, have been some evidence, however weak, adduced by the former on the matter in question before the court is entitled to draw the desired inference: in other words, there must be a case to answer on that issue.
(4) If the reason for the witness’s absence or silence satisfies the court, then no such adverse inference may be drawn. If, on the other hand, there is some credible explanation given, even if it is not wholly satisfactory, the potentially detrimental effect of his or her absence or silence may be reduced or nullified.
    1. At [150] of Magdeev, Cockerill J observed that “the tendency to rely on this principle in increasing numbers of cases is to be deprecated. It is one which is likely to genuinely arise in relatively small numbers of cases; and even within those cases the number of times when it will be appropriate to exercise the discretion is likely to be still smaller.” Cockerill J proceeded to deal with the point relatively briefly at [154] thus:
(1) This evidential ‘rule’ is a fairly narrow one. The drawing of such inferences is not something to be lightly undertaken.
(2) Where a party relies on it, it is necessary for it to set out clearly (a) the point on which the inference is sought, (b) the reason why it is said that the ‘missing’ witness would have material evidence to give on that issue, and (c) why it is said that the party seeking to have the inference drawn has itself adduced relevant evidence on that issue.
(3) The court then has a discretion, and will exercise it not just in the light of those principles, but also in the light of: (i) the overriding objective, and (ii) an understanding that it arises against the background of an evidential world which shifts – both as to burden and as to the development of the case – during the trial.
    1. In my judgment, before the discretion to draw an adverse inference or inferences can arise at all, the party inviting the court to exercise that discretion must first:
(1) establish (a) that the counter-party might have called a particular person as a witness and (b) that that person had material evidence to give on that issue;
(2) identify the particular inference which the court is invited to draw; and
(3) explain why such inference is justified on the basis of other evidence that is before the court.
Where those pre-conditions are satisfied, a party who has failed to call a witness whom it might reasonably have called, and who clearly has material evidence to give, may have no good reason to complain if the court decides to exercise its discretion to draw appropriate adverse inferences from such failure. A good illustration of this, in the context of the present case, may be afforded by what passed between Mr Singh and Mr Jandu over the phone in the few minutes before exchange of contracts for the sale of the property at 15.11 (GMT) on 1 March 2016.

THE SUPREME COURT DECISION

The judge considered the relevance of the Supreme Court decision earlier this year.
    1. Since first preparing this part of my reserved judgment, the Supreme Court has handed down its judgment in Efobi v Royal Mail Group Ltd [2021] UKSC 33[2021] 1 WLR 3863 concerning the burden of proof in an employment case where discrimination is alleged. Speaking with the agreement of Lord Hodge, Lord Briggs, Lady Arden and Lord Hamblen, Lord Leggatt said this (at [41]):
“The question whether an adverse inference may be drawn from the absence of a witness is sometimes treated as a matter governed by legal criteria, for which the decision of the Court of Appeal in Wisniewski v Central Manchester Health Authority [1998] PIQR P324 is often cited as authority. Without intending to disparage the sensible statements made in that case, I think there is a risk of making overly legal and technical what really is or ought to be just a matter of ordinary rationality. So far as possible, tribunals should be free to draw, or to decline to draw, inferences from the facts of the case before them using their common sense without the need to consult law books when doing so. Whether any positive significance should be attached to the fact that a person has not given evidence depends entirely on the context and particular circumstances. Relevant considerations will naturally include such matters as whether the witness was available to give evidence, what relevant evidence it is reasonable to expect that the witness would have been able to give, what other relevant evidence there was bearing on the point(s) on which the witness could potentially have given relevant evidence, and the significance of those points in the context of the case as a whole. All these matters are inter-related and how these and any other relevant considerations should be assessed cannot be encapsulated in a set of legal rules.”
Since these observations merely serve to reinforce the conclusions at which I have arrived independently of them, it was not necessary for me to call for further submissions in relation to this authority.
    1. The omission to call a material witness or witnesses without reasonable explanation may have a significance that goes beyond the drawing of appropriate adverse inferences. Three particular aspects are of particular relevance to the present case. First, in a case where there are contemporary documents which appear on their face to provide cogent evidence on an issue which is contrary to the evidence of one of the parties to the litigation, the court may decide to take the documents at their face value, and decline to accept that party’s evidence to the contrary, where this is unsupported by the evidence of a non-party witness who clearly could have given evidence material to that issue and who might have, but has not, been called by that party as a witness. The same may apply where the evidence of one of the parties to the litigation is contrary to the known or probable facts.
    1. Second, the failure to call a witness who might have been able to give evidence on a material issue may mean that the court is left with no direct evidence at all on that issue. In that situation, the party who might be expected to have called that witness cannot complain if the court rejects that party’s case on that issue and either makes a finding based on the inherent probabilities presented by the limited evidence that is before the court, or simply concludes that it is unable to make any finding of fact at all on that issue. This is an alternative way of analysing my conclusion as to what was said during the telephone conversation between Mr Jandu and Mr Singh between 15.02 and 15.06 GMT on 1 March 2016 (if Ahuja can be taken to have been advancing a positive case on that issue notwithstanding the paucity of Mr Singh’s evidence on the point).
  1. The third aspect comes into play in a case, such as the present, where there is a claim (or, as here, a counterclaim) for rectification, whether the correction of an alleged mistake in the relevant document is sought to be achieved through a process of construction or by way of recourse to the court’s equitable jurisdiction. In the former case, it must be clear, from the rest of the document, construed in the light of its admissible background and context, both that something has gone wrong with the language of the document and precisely what correction needs to be made in order to cure that mistake. In a case where the equitable jurisdiction is invoked, the court requires the relevant mistake to be proved to a high degree of conviction because rectification is a discretionary remedy which must be cautiously watched and jealously exercised. Although the standard of proof is the ordinary civil standard of the balance of probabilities, a party seeking rectification may find itself unable to discharge the evidential burden of proof in a case where its evidence lacks the support of a non-party witness who clearly could have given evidence material to that issue and who might have, but has not, been called by that party.

THE ABSENCE OF EVIDENCE FROM THE CLAIMANT’S SOLICITOR

The judge found that the absence of evidence from the claimant’s solicitor was telling.
    1. On the defendants’ application for the disclosure of the letters that had passed between Ahuja’s present solicitors and the solicitors acting for Stradbrooks’ professional indemnity insurers, the defendants contended that any advice which Mr Jandu had given to Ahuja regarding the length of the terms of the leases was of critical importance to the fair resolution of these proceedings. In his evidence in opposition to that application, Ahuja’s solicitor stated that: (1) “the dominant purpose of sending the letter before action was to obtain information relevant to these proceedings, which was not apparent from the conveyancing file”; and (2) the letter in response that was received from the solicitors instructed by Stradbrooks’ professional indemnity insurers had “contained the information sought”. Having received this unspecified information, Ahuja elected not to call Mr Jandu as a witness.
    1. The day before the Court of Appeal hearing of the defendants’ appeal from Mr Vos’s decision upholding Ahuja’s claim to litigation privilege in respect of the exchange of letters, the defendants issued, and then purported to serve, a summons requiring Mr Jandu to attend trial to give evidence. This was then withdrawn in the face of objections from both the claimant and the solicitors acting for Mr Jandu’s professional indemnity insurers. According to the defendants, their witness summons was withdrawn in order to avoid the disruption to the trial timetable that would have resulted from a contested application regarding Mr Jandu’s status as a witness. Mr Holland pointed out that Ahuja had waived the privilege in Stradbrooks’ file. However, on the evidence of Ahuja’s own solicitor, it is in possession of information that is not apparent from that conveyancing file. Mr Holland criticised the lateness of the defendants’ attempt to secure the attendance of Mr Jandu as a witness, having known since March 2021 that he was not to be called as a witness by Ahuja. He also criticised the defendants’ failure to serve any witness statement or summary from Mr Jandu. However, I can understand why the defendants should have elected to defer issuing any witness summons until after 8 June 2021, when Mr Vos allowed the appeal from Master Pester’s decision (of 29 April) which had ordered disclosure of the letters. Even if the defendants’ attempt to secure Mr Jandu’s attendance was somewhat half-hearted, I can understand their reluctance to call him, and their difficulties in serving any witness statement or summary for him, when: (1) he had been acting as Ahuja’s solicitor in the relevant transaction; (2) the defendants could have had no idea what he was going to say, and so would have experienced difficulties in drafting any witness statement or summary for him; and (3) they might well have experienced difficulties in challenging any evidence he might have given to the court.
    1. The inescapable inference that I find it proper to draw from the evidence from Ahuja’s present solicitor (cited above) is that Mr Jandu has provided Ahuja with information material to these proceedings which: (1) is not apparent from the conveyancing file, and (2) Ahuja does not wish to disclose to the defendants or make available to the court. I have no evidence from Ahuja as to why the court has not heard from Mr Jandu. I am satisfied that the defendants have established both: (a) that Ahuja could have called Mr Jandu as a witness, and (b) that he has material evidence to give to this court. I am also satisfied that the defendants: (c) have identified the particular inferences which they would invite the court to draw from Mr Jandu’s absence, and (d) have explained why such inferences are justified on the basis of other evidence that is properly before the court. Mr Clarke submits that the manifest desire on the part of Ahuja to keep Mr Jandu from giving evidence permits the court to infer that his evidence would be unhelpful from Ahuja’s perspective. In particular, he invites the court to infer that Mr Jandu would have given evidence to the effect that: (1) Prior to exchange of contracts he had either read the ground floor leases and told Mr Singh about them or he had told Mr Singh that he did not know about the ground floor lease terms and that Mr Singh had told him to proceed to exchange in any event. (2) At some point over the course of 29 June to 1 July 2018, Mr Jandu informed Mr Singh about the contents of Chhokar & Co’s letter dated 29 June 2018 confirming that “the inscription on the Tenancy Schedule was an error”. (3) During the conference call on 20 August 2018, Mr Pandher had told Mr Jandu and Mr Singh that the tenants were not paying the 10% rental increase that had been due in February 2018. In his oral closing, Mr Clarke emphasised: (a) that he was not inviting the court to draw any adverse inference from Ahuja’s assertion of litigation privilege but rather from its failure to call its former solicitor as a witness when it is implicit in Ahuja’s case that that solicitor was equally misled by the lease term representation, and (b) that Mr Jandu’s evidence would have gone to the heart of an issue advanced by Ahuja yet, having received undisclosed information not apparent from the conveyancing file, Ahuja has elected not to call him as a witness.
    1. Whilst I have borne the observations of Cockerill J in Magdeev v Tsvetkov firmly in mind, I am satisfied that this is one of those perhaps rare cases where it is appropriate to draw inferences adverse to Ahuja from its failure to call Mr Jandu as a witness. Indeed, I can conceive of few cases where it would be more appropriate to do so. However, I do not consider that it is appropriate for the court to go so far in the drawing of adverse inferences as Mr Clarke would invite me to go. I do not consider that it would be appropriate for me to infer that Mr Jandu had actually read any of the ground floor leases or that he had told Mr Singh about them. That would be difficult to reconcile with Mr Jandu’s acceptance of the lease term representation in the schedule to the contract when (on this hypothesis) he would have known that it was incorrect. But I do consider that it is appropriate to draw the inference that Mr Singh had instructed Mr Jandu not to trouble to consider the terms of the leases (or to charge Ahuja for doing so) because Mr Singh was concerned only with the rental income from the leases and not with their length. That attitude on the part of Mr Singh is consistent with: (1) other documents in the case, such as Mr Sohal’s emails to Mr Singh of 2 and 25 February 2016 (which do not mention the length of the ground floor leases) and Mr Sohal’s omission to copy Mr Singh in to his email to Mr Jandu, timed at 15.12 on 12 February, (which attached the rental schedule containing the lease term representation), all of which suggest that Mr Sohal appreciated that the length of the ground floor leases was no interest to Mr Singh; (2) the commercial realities of the case, notably the common perception (shared by Mr and Mrs Pandher, Mr Sohal and Mr Singh, and spoken to by Miss Morris) that, irrespective of the length of their tenancies, the individuals who were the tenants of the retail units at the property would remain in occupation for as long as they were continuing to trade profitably whilst, if they ceased to do so, it would not be worthwhile seeking to pursue them, or difficult to find alternative tenants; and (3) the fact that Stradbrooks did not see fit to scan the leases until they returned them to Chhokar & Co on 13 April 2016. Mr Holland submits that this inference would be inconsistent with Stradbrooks’ report on title, but I do not discern any necessary inconsistency. Whilst I might have expected to have seen some written record of any instruction from Mr Singh to his solicitors not to consider the terms of the leases (and, if he had been called as a witness, Mr Jandu would have been asked about this, by the court if not by counsel) in my judgment the omission of any such written record is insufficient to outweigh the fact that there is demonstrably evidence that, had he been called, Mr Jandu would have given that it is clear that Ahuja does not want this court to know about. In my judgment, the most likely, and the minimal, inference as to the nature, and the content, of that evidence is that which I have indicated that it is appropriate for me to draw.
    1. Consistently with this inference, and as I have already made clear, I also consider that I should accede to Mr Clarke’s invitation to find that the only matter discussed between Mr Singh and Mr Jandu during the short telephone conversation that took place between the emails timed at 15.02 and 15.06 on 1 March 2016, immediately prior to exchange of contracts at 15.11, was the rent for the property, and not the terms of the leases to which it was subject.
    1. I do not consider that it would be appropriate to infer that Mr Jandu informed Mr Singh of the contents of Chhokar & Co’s letter of 19 June 2018 because the natural way of doing so would have been to forward the email to Mr Singh and there is no evidence of this. Nor do I consider that it would be appropriate to draw any inference as to what may have been said about the February 2018 rental increase during any conference call on 20 August 2018 because: (1) there is only Mr Pandher’s evidence that this was discussed, and I find him to be an unreliable witness, and (2) had Ahuja been alerted to the fact that this rent increase was not being paid, I would have expected there to have been some reference to it in the contemporary documents.
    1. The second of the triad of missing witness is Mr Sohal. At the end of Mr Singh’s evidence I asked him why the claimant had not sought to adduce any evidence from Mr Sohal. Mr Singh indicated that he had asked Mr Sohal to come to court and give evidence but that he had indicated that he would not do so because both parties to the litigation had been his clients (although Mr Singh said that he had never paid Mr Sohal any money). Mr Singh also said that he would have been content for Mr Sohal to give evidence in this case. Both in cross-examination, and in answer to questions from the bench at the end of his oral evidence, Mr Pandher said that he had attempted many times to persuade Mr Sohal to attend court to give evidence but that he had declined to do so. Mr Clarke invited me to find that whilst it was understandable, in the light of Mr Sohal’s email to Mr Singh of 25 February 2016 (at D7/1829), why the defendants had not considered it appropriate to call Mr Sohal to give evidence on their behalf, there was no credible explanation for Ahuja’s failure to summon Mr Sohal to testify on its behalf and to corroborate Mr Singh’s version of events of the meeting on 9 February 2016. Mr Clarke therefore invited me to infer that Mr Sohal’s evidence regarding the events of that meeting would be contrary to Ahuja’s pleaded case, and to Mr Singh’s description of what had occurred. I am satisfied that both parties to this litigation have good grounds to view Mr Sohal as a “loose cannon”, whose evidence could not safely be relied upon; and that I should draw no adverse inference from either party’s failure to call him as a witness, no matter how interesting, and of how much potential assistance to the court, his evidence might have been after it had been robustly tested in cross-examination.
    1. The third of the triad of missing witnesses is Mr Fagbemi (or, indeed, any other solicitor from Chhokar & Co, such as its principal, Mr Santokh Chhokar). Mr Clarke points out that neither party sought to call Mr Fagbemi as a witness, although (in contradistinction to the position with Mr Jandu) the defendants did not seek to prevent Ahuja from so doing. Mr Clarke submits that it was open to Ahuja to summon Mr Fagbemi as a witness, but since it chose not to do so, the court cannot fairly draw any adverse inference from his absence as a witness. At the end of his evidence, I asked Mr Pandher why the defendants had not chosen to call the defendants’ former solicitor, Mr Fagbemi. Following the same course as Mr Holland had taken with Mr Singh, Mr Clarke advised Mr Pandher not to answer that question; and, in the light of that advice, Mr Pandher indicated that he did not wish to answer the court’s question. I am therefore left in the position of having no evidence from the defendants as to why the court has not heard from the solicitor who had acted for them on this transaction.
    1. Mr Holland points out that Mr Fagbemi could have been called to give evidence on several matters, including: (1) The renewal of the existing tenants’ leases, including his understanding of the instruction to grant terms of 15 years from 20 February 2015 (divided into 6 years 9 months then automatically extended for another 6 years 9 months, with the tenant liable for the whole of the 15 years’ term) and why (contrary to the defendants’ letters of instruction) the automatic renewal was not included. (2) Whether Chhokar & Co ever received the corrective fax and, if so, why it was not acted upon. (3) The reasons for the incorporation into the sale contract of the rental schedule (with the incorrect lease term representation). (4) Mr Fagbemi’s alleged advice to Mr Pandher to adopt and provide the Option A apportionment calculation for the purposes of completion. The court is left in the position that it has no direct evidence from the defendants’ solicitor on any of these matters when Mr Fagbemi could have been called to address them.
    1. I reject Mr Clarke’s implicit suggestion that Ahuja might have called Mr Fagbemi (or any other solicitor from Chhokar & Co) as a witness at this trial. I do so for essentially the same reasons that I gave when I indicated that I appreciated any reluctance on the part of the defendants to call Mr Jandu as a witness: (1) Mr Fagbemi had been acting as the defendants’ solicitor in the relevant transaction. (2) Ahuja would have had no idea what he was going to say and so might have experienced difficulties in drafting any witness statement or summary for him. (3) Ahuja might well have experienced difficulties in challenging any evidence Mr Fagbemi might have given to the court. The natural party to this litigation to have called Mr Fagbemi was the defendants. For reasons to which the court is not privy, the defendants have elected not to place his evidence before the court. The defendants must bear the appropriate consequences of this when the court comes to evaluate such evidence as is before the court, and to weigh the conclusions to be drawn from such contemporary documents as the court finds to be reliable and from the other known or probable facts.
    1. I agree with Mr Holland that it is simply not credible to conclude that Chhokar & Co either: (1) missed, or failed to query, the fact that two periods of 6 years 9 months do not add up to 15 years; or (2) simply overlooked, or disobeyed, their express instruction to make the new leases for the ground floor units at No 65 renewable for further terms of 6 years 9 months. The inherent probability (as I find) is that Chhokar & Co queried this with Mr Pandher prior to the grant of the renewed leases and, as a result of some further, corrective instruction from Mr Pandher, the new leases were each granted for terms of only 6 years and 9 months (without any right of renewal). This finding, in turn, makes it inherently less probable that Mr Pandher could have had any real or honest belief in the truth of the lease term representation.
  1. When I come to evaluate the evidence of the three key witnesses who have given factual evidence in this case – Mr Singh, Mr Pandher, and Mrs Valveer Kaur Pandher – my short conclusion (in response to the usual submissions from each side’s counsel that it was the other side’s witnesses who were lacking in credibility) is that I find that the court can place no reliance upon the written or oral evidence of any of them, save to the extent that it is supported either by contemporary documentary evidence which it is common ground, or the court finds, is reliable, or by the known or probable facts, and by any inferences which are properly to be drawn therefrom. Sadly, I am satisfied that none of those three witnesses has come to this court to tell the truth, or to assist the court to find the true facts;