UNSUCCESSFUL RESPONDENT CANNOT INTRODUCE NEW EVIDENCE AFTER DRAFT JUDGMENT HANDED DOWN

In Manolete Partners Plc v White [2023] EWHC 1644 (Ch) HHJ Hodge KC (sitting as a High Court judge) considered an application to adduce further evidence after a draft judgment had been circulated.  The application was refused. The respondent was not allowed a second bite of the cherry.

THE CASE

The judge heard an application in insolvency proceedings against a former director.   After the three day hearing the judge reserved judgment. A draft judgment was circulated which found in the applicant’s favour.  After the circulation the respondent attempted to adduce new evidence.   That attempt to introduce new evidence was rejected.

THE JUDGMENT

1. 1. The hearing on Monday concluded at about 3.00 pm and I adjourned to consider my judgment. Working over the last two days, I released a draft judgment, on the usual confidential terms, at 8.36 am this morning with a view to it being formally handed down at 2.00 pm this afternoon. The neutral citation reference for the judgment is [2023] EWHC 567 (Ch). I indicated that any typographical corrections should, if possible, be communicated to me by 1.00 pm this afternoon so that the judgment could be handed down in approved form at 2.00 pm. I appreciated that in the case of Mr Colclough (of counsel), who appears for the applicant with Mr Joseph Curl KC, who represented the applicant at the hearing before me on Monday, that might create certain difficulties because Mr Colclough was engaged in another matter before me remotely this morning at 10.30 am which, in the event, only concluded at about 12.05 pm.

1. 1. At 1.16 pm this afternoon, I received an email from Mr Asquith thanking me for the draft judgment and indicating that he had located only one extremely minor typographical correction. About a minute later, I received an email from Mr Colclough indicating that he had no corrections to make to the judgment. I thereupon converted the draft into an approved form of judgment and uploaded it in approved form to CE-File as Case Event 138. As I was doing that, Mr Asquith sent a further email to me, timed at 1.20 pm. That email reads as follows:

“Whilst the respondent recognises that this is not the time for further submissions, it is appropriate to draw your attention to the fact that Mr White does not consider paragraph 77 of the judgment to reflect the full picture. Whilst the company did indeed purchase the property initially, it was later purchased by Mr White and other directors with their funds. The documentary evidence attached shows the later sale and purchase. We would note that this issue had not been raised by the applicant in Ms O’Callaghan’s first witness statement. We respectfully submit that this explains the absence of evidence before the court on this point as it was not ventilated between the parties in evidence. Whilst paragraphs 24 and 25 of Mr White’s first witness statement are correct to state that the property was purchased using company funds, it was then purchased by the pension scheme. Accordingly, Mr White’s position is that the company did not fund Mr White’s benefit under the scheme and so the court should not take into account the matters set out at paragraph 77 of the draft judgment when it comes to exercising its discretion.”

1. 1. There were three pdf forms attached to Mr Asquith’s email. The first is a letter from Dundas & Wilson LLP, solicitors, dated 5 December 2005 to Lloyds British SSAS. The second is the draft of an agreement, dated on the front sheet 2006, and on the first page 2005, with no other date inserted, and purporting to be made between the company, Lloyds British Testing Limited, and Mr Hayden Davis, Mr Ian White, and Mr Trevor Dale (as trustees of Lloyds British SSAS) relating to the sale of the Swansea property. The third attachment is a property feasibility report prepared for the trustees of the pension fund on 24 October 2005.

1. 1. I responded to Mr Asquith’s email at 1.43 pm this afternoon. I stated that I had already finalised my draft judgment before receiving his email under reply. I stated that I had determined the matter on the basis of the evidence that was before me. I cited from paragraph 24 of Mr White’s witness statement as follows:

“The Lloyds British SSAS purchased the leasehold property known as Lloyds British Engineering, Crymlyn Burrows, Swansea SA1 8PX, which is registered at HM Land Registry with Title Number CWM432674 (‘the Property’) in 2004. The purchase was made using the company’s funds.”

I pointed out that had I delivered an extemporary judgment, there would have been no opportunity to put in supplementary evidence; and I did not consider that I should permit this now, just before the judgment was being formally handed down in writing.

1. 1. At the commencement of this hand down hearing, Mr Asquith has invited the court, in so far as this further evidence might be relevant to the exercise of the court’s discretion, to take it into account. Mr Colclough, who appears without the leading counsel, Mr Curl KC, who had appeared before me on Monday (because Mr Curl had previously made it clear that he had another commitment this afternoon), objects to Mr Asquith’s attempt to re-open my judgment at this late stage. Mr Colclough makes the following points:

1. 1. First, that the evidence given by Mr White in his witness statement is entirely clear. That evidence was that the pension fund purchased the leasehold property using company funds. Mr Colclough points out that Mr White was sitting behind counsel throughout the hearing, which was in open court in Manchester on Monday, and that he had given instructions to Mr Asquith on other matters during the course of the hearing. Second, Mr Colclough makes the point that Mr Asquith is now seeking to put three pdf forms, sent as an attachment to an email some 38 minutes before the hand down, into evidence. Third, Mr Colclough points out that, at its highest, the pdf forms show that the pension scheme appears to have purchased the leasehold interest from the company. But Mr Colclough makes the point that the company was the principal employer under the pension scheme and therefore it was the employer that had funded the pension scheme in any event. Mr Asquith accepts that further evidence, in particular in the form of bank statements showing the movement of funds, might be required for the court to adjudicate finally upon this aspect of the matter.

1. 1. I do not consider that it is appropriate to allow this further evidence in at this late stage. I have already spent a considerable time in preparing a draft judgment, setting out my considered views on the evidence that was before me. The application notice is dated 22 September 2022, and the supporting evidence of Ms O’Callaghan, a solicitor and legal director with Addleshaw Goddard, the applicant’s solicitors, was submitted on the same date. There have been no less than three case management orders, made by DJ Woodward, on 14 December 2022, 1 February 2023 (which granted an extension of time for Mr White’s witness evidence), and a later order, made by consent, which is undated, extending time – I think – for the applicant’s evidence in reply. Mr White’s witness statement is dated 8 February 2023, and Ms O’Callaghan had submitted evidence in reply on 28 February 2023.

1. 1. It would not be fair to the applicant to allow further evidence to be submitted now. Moreover, I have already considered the matter on the basis of the evidence that was placed before me, and I have reached my conclusion. It would not be right to re-open that by reference to further evidence that could have been placed before the court but was not.

1. 1. For those reasons therefore, I propose to hand the judgment down in the form in which I sent it out at about the same time as Mr Asquith was sending his most recent email to me.

1. So, I formally hand down judgment in the form of the written, approved judgment. I fully understand that Mr Asquith has acted perfectly properly in trying to follow his client’s instructions. That concludes this extemporary ruling.