HFW recently acted for the successful defendant in American Overseas Marine Corp v Golar Commodities Ltd (7 May 2014). The case will shortly be the subject of an article in the upcoming HFW Commodities Bulletin, with regard to the meaning of the term “injurious cargoes” when used in vessel charters. However, a number of evidential issues arose during the case, and how they were handled by the Court underlines the importance of adherence to the Civil Procedure Rules (CPR) when conducting High Court litigation.
The claimant, the owner of the vessel LNG GEMINI, claimed reimbursement from the defendant charterers for the costs of work on the vessel’s cargo systems following alleged contamination by a cargo of LNG loaded by charterers. In the litigation that followed, the claimant failed to prove its case on liability. The Court also held that even if the claimant’s case on liability had succeeded, it would have substantially failed to prove its case on quantum. That failure was partly due to the claimant’s failure to comply with procedural rules on the adducing of evidence.
The Court has power to control evidential matters as part of its general case management powers. CPR 1.4 provides that the Court must actively manage cases to further the overriding objective of enabling the courts to deal with cases justly and at proportionate cost. CPR 32 gives the court specific powers to control evidence, including by making directions as to the scope and form of evidence that will be admitted evidence. These powers are most commonly exercised at the Case Management Conference (CMC) stage, when the Court decides what issues, if any, will be the subject of factual and expert evidence, and the scope of the parties’ disclosure obligations. Expert evidence is only admissible with the Court’s permission under CPR 35.4.
Additional expert evidence/hearsay
The claimant served a supplemental expert report that relied on opinions from a colleague of the report’s author. The Court accepted the defendant’s submissions that that evidence should be given no weight, because it was factual hearsay evidence as to a subjective expert opinion and that the evidence should in any event be excluded as additional expert evidence which the claimant had not sought permission to adduce. The opinions of the expert’s colleague were found to be inadmissible.
Shortly before the trial, and after the trial bundles had been agreed, the claimant disclosed new documents and sought to introduce them in additional trial bundles.
The defendant sent notices to the claimant pursuant to CPR 32.19 requiring the claimant to prove the authenticity of the newly disclosed material. The claimant made no attempt to prove the authenticity of the new documents or to explain the late disclosure. The defendant declined to agree to amend the trial bundles to include the new material. The Court excluded the new material on the grounds that it had been disclosed late and its authenticity had not been proved pursuant to CPR 32.19.
Late factual evidence
The claimant did not serve factual evidence in support of its case on quantum until the last working day before the trial, and the witness statement that was served then exhibited some of the belatedly disclosed documents referred to above and contained hearsay, without a hearsay notice under the Civil Evidence Act 1995. No reasons were given for the lateness of the evidence until the first morning of the trial, when the claimant’s counsel indicated that the need for evidence on quantum had simply been overlooked.
The Court allowed the quantum evidence to the extent that it spoke to documents disclosed at an earlier stage of the case, but excluded evidence that relied on material that had been disclosed shortly before the trial on the basis that the defendant had not had time to consider the material. The Court also found that parts of the witness statements contained matters of opinion which were properly the subject of expert evidence, which the claimant had not sought permission to adduce. The Court also referred to the absence of any proper explanation of the lateness of the evidence.
The claimant responded to this ruling by asking the Court to postpone until a later date consideration of quantum issues, so that the claimant would have time fully to prepare its evidence on quantum. That application was rejected by the Court.
The procedural decisions of the Court in the LNG GEMINI case underline the determination of the Court to ensure strict compliance with the CPR, including Practice Directions. Until recent years there may have been a tendency to assume that procedural defaults could usually be cured, and that, whilst such defaults could lead to adverse costs orders, they would rarely affect the substantive outcome of cases. Such assumptions can no longer be made.