SEEKING TO ADDUCE NEW EVIDENCE AFTER THE TRIAL HAS ENDED: DENTON PRINCIPLES APPLY, A FORMAL APPLICATION IS REQUIRED: OVERIDING OBJECTIVE LEADS TO REFUSAL

In  JD Group Ltd, Re [2022] EWHC 202 (Ch) Deputy Insolvency and Companies Court Judge Agnello QC refused an application to adduce new evidence after a trial had ended, and judgment was pending.   A formal application was required, Denton principles applied and there was nothing on the facts of this case which meant that the “new” evidence should be admitted.

“There is no explanation provided as to why the evidence which the Respondent is now seeking permission to adduce could not have been obtained with reasonable diligence.”

THE CASE

The Applicant liquidator was claiming relief against the respondent a former director of the company, alleging breach of duty. A trial took place. After the trial the respondent’s solicitor wrote to the judge seeking to place additional information before the court.

Addendum

101.   After the trial had finished on 28 October 2021 and I had reserved judgment, I received a letter dated 15 November 2021 from Messrs Treon Law, solicitors acting on behalf of the Respondent. The letter sought permission to adduce additional evidence on the basis that the Liquidator had challenged the authenticity of the Certificate of Insurance dated 11 April 2006 and that this challenge was raised for the first time in cross examination and that the issue of authenticity of the certificate could be potentially determinative in the context of the Liquidator’s claim. The letter continues in submitting that the proposed further evidence which the Respondent is seeking to adduce including  exhibiting further documentation obtained from Interken following from the conclusion of the trial. The letter then states that the evidence is capable of being confirmed by the Respondent if necessary. The letter submits that allowing the Respondent to rely on this additional evidence would be in accordance with the overriding objective, namely permitting the Respondent to adduce evidence to rebut the challenge to the authenticity of the certificate. The evidence is the witness statement of Rajan Ghai plus exhibits.

102.   I also have a note from Mr Shaw opposing the application to adduce further evidence. I do not have any formal application seeking relief or any other explanation relating to the basis of this application. The trial before me lasted three days with an additional judicial pre reading day. In my judgment, it was clear from the Particulars of Claim and the Defence, the evidence as well as skeleton filed by Mr Shaw, that the issue of insurance was an issue between the parties. Accordingly, I do not accept what is set out in the letter dated 15 November 2021, that the issue as to the authenticity of the certificate was the first time the issue of whether or not the Company had valid insurance arose. The issue of lack of valid insurance was one of the factors relied upon by the Liquidator as to why the deals were not commercial transactions. It is important to note that it was not the only factor relied upon. As will be noted above, I considered and determined many other factors relied upon by the Liquidator. In my judgment, as I have noted above, the existence or otherwise of valid insurance was not and is not determinative of the findings I have made above. There is, as I have set out, overwhelming evidence in support of the Liquidator’s case.

103.   There is no explanation provided as to why the evidence which the Respondent is now seeking permission to adduce could not have been obtained with reasonable diligence. I have read the statement of Mr Ghai and I can see nothing in its contents which provides any indication that the evidence could not have been obtained from him prior to the trial.

104.   As Mr Shaw has pointed out in his note, there is no provision for the Respondent to seek to adduce further evidence in this case. The time limits set out in the orders made by this court for the filing and serving of evidence have long passed. Despite that being the case, there is no actual application for relief in accordance with the principles in Denton v White. In my judgment based on what is in this new evidence as  well as what is set out in the letter, the evidence could have been obtained with reasonable diligence. The letter does not provide any evidence to the contrary. Additionally, the timing of this application is not satisfactorily explained or dealt with in the letter. There is no explanation as to why the issue of further evidence was not raised before me  during the trial. That would of course also have been extremely unusual, but then I could have considered it before the trial was completed and judgment reserved. The trial lasted three days in Court. The cross examination of the Respondent finished on day two. Day three was closing submissions. There was no application made or even referred to on day three about seeking to adduce further evidence. No such issue was raised. Mr Pettican made his closing submissions and dealt specifically with the issue of insurance being in place. Mr Pettican’s submissions provide no explanation as to why no attempt was made to raise this issue on day three beyond asserting that the witness needed to be contacted. That in my judgment is not satisfactory.

105.   Having considered the findings I have made which are set out above, the issues as to (1) whether the certificate of insurance is  valid and (2) that Interken  is not complicit in the MTIC fraud, makes no real difference to my findings about the evidence given by the Respondent. The second point is really not relevant to my assessment of the Respondent. I have  set out above in some detail the evidence given by the Respondent and the findings I have made. I have considered whether taking the new evidence as a whole, it would have made any difference to my findings and assessment of the Respondent and the reply is no.  I have deal with this above at paragraph 84 in relation to the existence or otherwise of insurance.

106.  I am not prepared in all those circumstances  to allow this further evidence to be adduced. The issue was in my judgment clearly before me at the trial. It was also a matter raised in the evidence filed by both parties in the Tribunal proceedings. There could have been, in my judgement, no doubt that the issue would be raised and relied  upon by the Liquidator. The overriding objective in this case is not served by allowing this evidence to be adduced. Parties need to ensure that they comply with orders of the court relating to filing and serving evidence. Whilst there may be cases of some exceptional nature where a court may well decide to re-open a case, I cannot see on the facts I have set out above any exceptional grounds to re-open the case. It would have to be re-opened, if I accede to the application, because the Liquidator would need to have an opportunity to reply to the evidence and then consideration would need to be given to cross examination. The overriding objective points in my judgment clearly to refusing the application being made before me on the grounds which I have set out above.