NON-COMPLIANT WITNESS STATEMENTS (AGAIN): THE SOLICITOR’S STATEMENT OF COMPLIANCE WAS “FALSE”:

For the third time this week I find myself writing about judicial criticisms of the way in which witness statements have been prepared.  This case has by far the most excoriating comments. In Fulstow & Anor v Francis [2024] EWHC 2122 (Ch) David Stone (sitting as a Deputy High Court Judge) found that the claimants’ statements were non-compliant. He did not think that the claimants’ solicitor could properly have signed the statement of compliance.

“I consider Mr Rooney’s declaration that the witness statements are PD57AC compliant to be false. He was not cross-examined before me, and so has not had an opportunity to explain himself. However, I cannot see on the basis of what is before me that Mr Rooney can have been satisfied that the purpose and proper content of trial witness statements and the proper practice in relation to their preparation had been explained to the three witnesses. I cannot see how he can have believed that the two (or three) witness statements complied with PD57AC – because they clearly and obviously do not, and any solicitor properly practising in this court ought to have known that.”

THE CASE

The claimants brought an action in relation to their beneficial interest in shares in a company developing land.  The major factual issue related to the purpose of payments that the claimants had made.

THE JUDGE’S OBSERVATIONS ON THE CLAIMANTS’ WITNESS STATEMENTS

The judge was, shall we say, less than happy about the way in which the witness statements had been prepared.  The case is unusual because waiver of privilege allowed the court to look into the way in which the statements had been prepared.  The preparation, and the statements, were found wanting.  The judge held that no reliance at all could be placed upon the statements.

The Claimants’ Witness Statements

1. 1. On the first day of the trial an issue arose as to the weight I should place on three witness statements relied on by the Claimants. Counsel for the Defendant submitted that I should, of the court’s own motion, strike them out (the Defendant had not filed an application to that effect). In the alternative, she submitted that I should accord them no weight, given the obvious failure to follow PD57AC (which deals with the preparation of trial witness statements). I declined to strike out the witness statements on the basis that that would leave the Claimants without any evidence, or would require the testimony to be given orally, thus further prolonging the trial. Neither course would have furthered the Overriding Objective. I did say that I would take the Defendant’s submissions into account in assessing the weight of the evidence given.

1. 1. PD57AC has applied to trial witness statements for use in the Business and Property Courts since 6 April 2021. Its provisions have been discussed at length elsewhere, but, importantly, it provides (relevantly):

“A trial witness statement must set out only matters of fact of which the witness has personal knowledge that are relevant to the case, and must identify by list what documents, if any, the witness has referred to or been referred to for the purpose of providing the evidence set out in the trial witness statement.”

1. 1. Further guidance is given in the Statement of Best Practice, which includes (relevantly):

i) Factual evidence should be “testimony as to matters of which [the witness has] personal knowledge, including their recollection of matters they witnessed personally”;

ii) “Any trial witness statement should be prepared in such a way as to avoid so far as possible any practice that might alter or influence the recollection of the witness”;

iii) “It will generally not be necessary for a trial witness statement to refer to documents beyond providing a list to comply with paragraph 3.2”;

iv) “The document list to comply with paragraph 3.2 of Practice Direction 57AC should identify or describe the documents in such a way that they may be located easily at trial”;

v) “Trial witness statements should not … seek to argue the case … set out a narrative derived from the documents … or include commentary on other evidence in the case”; and

vi) “The preparation of a trial witness statement should involve as few drafts as practicable”.

1. 1. Still further, various judgments of this court have provided more detailed guidance on PD57AC: Blue Manchester Ltd v BUG-Alu Technic GmbH [2021] EWHC 3095 (TCC); Mansion Place Ltd v Fox Industrial Services Ltd [2021] EWHC 2747 (TCC); Greencastle MM LLP v Alexander Payne and ors [2022] EWHC 438 (IPEC); Prime London Holdings 11 Ltd v Thurloe Lodge Ltd [2022] EWHC 79 (Ch); Curtiss v Zurich Insurance Plc, East West Insurance Company Limited [2022] EWHC 1749 (TCC); Cumbria Zoo Company Ltd v The Zoo Investment Company Ltd [2022] EWHC 3379 (Ch); Bastholm and others v Peveril Securities (Dalton Park Retail) Ltd and others [2023] EWHC 438 (Ch); and McKinney Plant & Safety Ltd v The Construction Industry Training Board [2022] EWHC 2361 (Ch).

1. 1. It was plain to me from an initial review of the papers prior to the trial that the three trial witness statements had not followed PD57AC. This was for two primary reasons.

1. 1. First, on their face, the witness statements were clearly inadequate. To list some examples of the clear failures to comply with PD57AC:

i) None of the witness statements includes the witness’s confirmation of compliance;

ii) Ms Rodrigues’ witness statement does not include a solicitor’s Certificate of Compliance;

iii) None of the witness statements includes a list of documents to which the witness was referred;

iv) Ms Rodrigues’ witness statement is a recitation of events based on the documents, seeks to argue the case, and comments on other evidence in the proceedings (for example, she writes “I do not believe that the company [PH Gold] is relevant in this instance as the First Claimant acted in his personal capacity with regards to the 30th of November 2015 investment”);

v) Mr Fulstow’s witness statement is a recitation of events based on the documents, seeks to argue the case, and comments on other evidence in the proceedings (for example, he writes “Defence is relying on the fact that it was an offshore company, [Carina], that invested the aforesaid £35,000 in [Capital Land], and that I was only acting as an agent: this is not the case”). Further, it includes legal submissions, and matters of which Mr Fulstow can have had no direct knowledge (for example, he purports to give evidence of an email sent from Mr Francis to Mr Woods, which was not copied to Mr Fulstow); and

vi) Mr Woods’ witness statement repeats the errors in Mr Fulstow’s witness statement. It is very similar in its wording to Mr Fulstow’s witness statement, and appears to have been copied from it. For example, both witness statements include the following odd statement:

“During the course of this litigation, I have been transparent, and I have disclosed all relevant information as part of initial disclosure and extended disclosure”.

Not only is that statement irrelevant, but its appearance in both witness statements strongly suggests the absence of independent creation as the result of an interview formed of open questions.

1. 1. Some of these errors were pointed out to the Claimants in an email on 16 February 2024 from the Defendant’s solicitors, who provided an opportunity for the Claimants to file fresh, compliant witness statements. The Claimants did not avail themselves of that opportunity.

1. 1. Second, an unusual aspect of this case meant that I was able to see at least in part the process by which the witness statements had been written. For reasons that were not discussed at trial, the Claimants had waived privilege in significant quantities of correspondence between the Claimants and their legal advisors, and as between their legal advisors. I was therefore able to see from those documents the process adopted by the Claimants’ solicitors. This included:

i) The Claimants first instructed their solicitor, Mr Richard Rooney of Murray Hay Solicitors on 1 November 2021.

ii) In evidence before the court was a draft statement apparently dated 16 November 2021 which was said to be the basis of Mr Fulstow’s fourth witness statement. This was said to have been drafted by Mr Fulstow following the meeting with Mr Rooney, and was said to set out in his own language the relevant facts. Counsel for the Claimants submitted that the existence of this document, which was said to be in similar terms to Mr Fulstow’s fourth witness statement, should give the court confidence that the fourth witness statement was accurate, and not corrupted by processes which PD57AC is aimed at preventing. I do not accept that submission, primarily because there was no evidence as to the background to the creation of the 16 November 2021 document. It was submitted that this was, in effect, Mr Fulstow’s unvarnished narrative account of the relevant events. However, that is difficult to square with the fact that that document, on its face, refers to various emails and other documents, which are attached as “TF Exhibits”. It is clearly not an independent recollection – but rather a recitation of the (then) written record with Mr Fulstow’s added commentary, made after consultation with Mr Rooney. It is not signed, let alone signed under a statement of truth. Indeed, it is not even clear that Mr Fulstow wrote it. It is also materially different to Mr Fulstow’s fourth witness statement. I do not consider that this document helps the Claimants.

iii) In any event, Mr Fulstow’s oral evidence about the preparation of his witness statement was internally inconsistent – under cross-examination he mentioned preparing his fourth witness statement in his apartment, but also that it was prepared in his solicitors’ conference room, but that he was not asked any questions by his solicitor.

iv) On 26 May 2022, Mr Rooney emailed Mr Fulstow and Mr Woods as follows:

“Just as an aide memoire when doing your requested chronological statement (you too Robert [Woods]).

Our Case

[Mr Fulstow] and [Mr Woods] are the beneficial owner as of 29/11/2015 – and both are entitled to a declaration and a transfer of 25 ordinary shares to [Mr Fulstow] and 7 ordinary shares to [Mr Woods].

1st Question

Whether FF [sic] and [Mr Woods] contracted with [Mr Francis] personally. [Mr Fulstow] only – whether you were acting as an agent for [Carina]?

Question 2 Tim [Fulstow] only

If Carina, had Tim [Fulstow] informed [Mr Francis] of this before the 19/11/2015.

Question 3

If [Mr Fulstow] was acting personally, how was the money from Carina accounted for?

Possibilities include:

• payment of monies owed to [Mr Fulstow] such as a dividend, directors loan account.

• loan to [Mr Fulstow]. Would there need to be accounting under Marshall Island Laws to account for this loan?

• payment on purchase/ assignment of the shares by Carina from [Mr Fulstow].

Note

If and only if, the shares were assigned /sold to Carina does [Mr Fulstow] need to show how they were transferred to P H Gold.”

This email demonstrates the very behaviour that PD57AC is aimed at preventing. This was shortly before the Claimants’ Re-Amended Particulars of Claim were filed, and some time before their fourth witness statements were signed. Mr Rooney’s aide memoir is contrary to the PD57AC regime of not asking leading questions. It clearly would have the effect of “alter[ing] or influence[ing] the recollection of the witness”. It was, in my judgment, a clear breach of PD57AC.

v) It is also plain to me that (for example) paragraph 6(a) of the Particulars of Claim dated 1 June 2022 (which concerned the meeting at Home House on 27 November 2015, to which I return below), is identical to the equivalent paragraph of Mr Fulstow’s witness statement, which on its face was not signed until some two years later. It is clear to me that this paragraph of Mr Fulstow’s fourth witness statement was copied from the pleadings, rather than being his independent recollection.

vi) Ms Rodrigues gave evidence that she discussed the contents of her witness statement one-to-one with Mr Fulstow, and then put it together.

1. 1. For these reasons, I am unable to give the three witness statements any weight in these proceedings. In my judgment, Mr Fulstow’s fourth witness statement was based heavily on advice received from his solicitors as to what he should and should not say. It is not his independent recollection of events. It is a carefully constructed analysis of the documents then available to the Claimants. I can place no reliance on it. Mr Woods’ fourth witness statement was copied from Mr Fulstow’s, and, again, does not represent his independent recollection of events. Ms Rodrigues’ second witness statement is the result of what she was told by Mr Fulstow to say, and, again is not her independent recollection of events. Where the contents of these witness statements are not corroborated by other sources (such as contemporaneous documents), I can have no confidence that the statements are truthful.

1. 1. As set out above, on the first day of the trial, permission was sought to adduce two further witness statements, one made by each of the Claimants. I refused permission for the reasons I gave at the time. The fifth witness statement of each Claimant was said to correct the procedural errors with the fourth witness statements of each Claimant. However, they did not. First, each fifth witness statement on its face did not provide the clarity needed. For example, Mr Fulstow’s fifth witness statement said “This and my fourth witness statement were based on a combination of evidence obtained by means of an interview or interviews with my solicitors and, following the production of a draft statement by my legal representatives, further instructions provided to my solicitor by me”. Mr Woods’ fifth witness statement says the same thing. Neither statement is true, as it turned out, in relation either to each Claimant’s fourth or fifth witness statement.

1. 1. Second, email correspondence from the Claimants’ solicitors stated that the Claimants’ counsel (who appeared before me) had prepared the fifth witness statements “and the wording in these statements are [sic] his”. This would render the fifth witness statements also not compliant with PD57AC if what purported to be the words of Mr Fulstow and Mr Woods were actually the words of their counsel. Following circulation of a draft of this judgment in the usual way, I received written submissions from the Claimants’ counsel to the effect that the “e-mail [referred to immediately above] is mistaken insofar as it states that counsel for the claimant produced the substantive parts of the 5th witness statements of the claimants or that the wording in those parts were drawn by counsel.” The Claimants’ counsel then set out what he had produced (a template of a standard witness statement) and what he had not (the substantive words of the firth witness statements). It is unnecessary for me to reach a concluded view, including because counsel for the Claimants submitted that it would not make a difference to the outcome of the application to admit the fifth witness statements or the outcome of the trial. Again, Mr Rooney has not had an opportunity to explain himself so I will not reach any further conclusions.

1. 1. The fifth witness statements did include a list of documents to which the witness had been referred, but in each case the list read:

“1. 1st and 2nd Claimants’ initial disclosure.

2. 1st and 2nd Claimants’ extended disclosure.

3. All filed witness statement [sic] in these proceedings.

4. Pleadings in these proceedings.

5. The Defendants [sic] initial and extended disclosure documents.”

1. 1. The typographical errors appear in both fifth witness statements.

1. 1. Counsel for the Claimants conceded that the list “ought to have been more detailed”. That could best be described as an understatement: this list is clearly and blatantly non-compliant with PD57AC. The witnesses are in effect saying “we’ve looked at everything”. That does not assist the court in weighing the witnesses’ evidence. More specifically, the list does not comply with paragraph 3.5 of the Statement of Best Practice – “The document list … should identify or describe the documents in such a way that they may be located easily at trial”.

THE SOLICITOR’S CERTIFICATE OF COMPLIANCE

Solicitor’s Certificate of Compliance

1. 1. As noted above, Ms Rodrigues’ witness statement does not include a Certificate of Compliance signed by the Claimants’ legal representative. There is a Certificate of Compliance at the conclusion of Mr Fulstow’s and Mr Woods’ fourth witness statements. That certificate, in identical terms in each case, is largely in the usual form, but mentions expressly that the purpose and proper content of trial witness statements “have been discussed with and explained to Timothy Fulstow, Robert Woods and Connie Rodrigues”. Normally, only the relevant witness making the statement would be named. The Certificate is signed by Mr Rooney.

1. 1. As will be apparent from what I have set out above, I consider Mr Rooney’s declaration that the witness statements are PD57AC compliant to be false. He was not cross-examined before me, and so has not had an opportunity to explain himself. However, I cannot see on the basis of what is before me that Mr Rooney can have been satisfied that the purpose and proper content of trial witness statements and the proper practice in relation to their preparation had been explained to the three witnesses. I cannot see how he can have believed that the two (or three) witness statements complied with PD57AC – because they clearly and obviously do not, and any solicitor properly practising in this court ought to have known that.