Dispute Resolution analysis: Permission given to a party to rely on a witness statement served well after the deadline imposed by the Court directions in circumstances where it became clear to that party only after the deadline that the witness concerned had relevant evidence to give. Denton principles still applied.

Libyan Investment Authority and ors v King and ors [2022] EWHC 2633 (Ch)

What are the practical implications of this case?

This decision confirms that where permission is sought to rely on evidence contained in a witness statement which has been served later than the time directed by the Court, recourse must in all cases be had to the principles in CPR r. 3.8 and 3.9 as analysed by the Court of Appeal in Denton v TH White [2014] EWCA Civ 906. That is so both in cases in which a deadline has been missed and in cases where the need or desire to serve the relevant evidence arose only after the relevant deadline had already expired. That test is already able to accommodate a wide range of factual circumstances. When hearing such an application, however, the guidance should be applied with appropriate sensitivity to the context and facts. It is appropriate in such cases to consider whether the defaulting party can be blamed for the belated realisation that such evidence was required.

What was the background?

This is a judgment following a PTR in a claim which awaits trial over seventeen days starting on 7 November 2022. The claim concerns a joint venture for the development of a hotel and retail park in Hertfordshire. The parties entered into discussions about the joint venture in 2009 and 2010 and the investment was made into the joint venture in July 2010. The sites were not developed as intended and the parties fell out. The joint venture company was placed in MVL which yielded over £8 million. The Claimants argue that the business was worthless or worth substantially less than the £21 million anticipated. Proceedings were issued on 18 July 2016 based on the tort of deceit. Witness evidence was directed to be exchanged in April 2022. On 17 August 2022, the parties received disclosure of further documents from Savills, a non-party to the claim but who were involved in the underlying factual matrix. That disclosure included an email of 16 June 2010 between individuals at Savills. That prompted the Claimants and their solicitors to make further enquiries which identified a potential further witness, namely a Mr Elliott of Knight Frank. Mr Elliott was on holiday until the end of August. Contact was made with Mr Elliott in the first week of September 2022 and a witness statement was finalised by 14 September 2022. On the same date, an application was made for permission to rely on that statement under CPR r. 32.10. That application was heard at the PTR on 21 September 2022.

What did the court decide?

The Defendants argued that in assessing whether to grant permission under CPR r. 32.10, the assessment is not to be made in a free standing way, leaving the exercise of judicial discretion at large and that regard should be had to CPR r. 3.9 and 3.10. Whilst that is uncontroversial in circumstances where a party misses an anticipated deadline for serving a witness statement, this was not such a case, or at least not a typical such case. The Court concluded at [35]:

The discretion in CPR 32.10 is not freestanding; the court must in considering it give effect to CPR 3.9 and the Denton guidance. But the court must approach the application of that guidance with sensitivity to the context and facts. It may indeed be the case where there has been no blameworthy default or breach of an order, but nonetheless the application is to serve a witness statement after the deadline and therefore in default of an order of the court. In such circumstances, the court will apply the Denton criteria, which includes ultimately deciding whether in all the circumstances it is just to allow the witness statement to be relied upon, taking into account the specific factors set out in r.3.9.

The Court concluded that there was a serious and substantial breach of the deadline imposed for serving witness statements, given, in particular, the late stage of the proceedings at which permission was sought. There was, however, a good explanation for the failure to serve Mr Elliott’s statement in time and the Court was satisfied by the explanation given as to why Knight Frank had not been approached at an earlier date. Giving permission did not jeopardise the trial or cause prejudice to either party or to other court users. For all these reasons, permission was given to the Claimants to rely on Mr Elliott’s witness statement.

Case details

  • Court: High Court of Justice, Business and Property Courts, Business List
  • Judge: Mr Justice Miles
  • Date of judgment: 21 September 2022

Article by Phillip Patterson – first published by LexisNexis