INADEQUATE WITNESS STATEMENTS LEAD TO CASE BEING STRUCK OUT AT TRIAL

We have looked at the case of  Devon & Cornwall Autistic Community Trust -v- Cornwall Council before.  In the first report Mr Justice Green refused an application to adjourn a trial date but gave permission to serve witness evidence late.  The witness evidence that was served led to the action being struck out by Mr Justice William Davis at the start of the trial.

THE CASE

The claimant was seeking a claim for alleged underfunding by the defendant in making inadequate payments for the provision of services for disabled people. The matter was listed for a five-day trial starting on the 18th February 2015. On the 29th January 2015 Mr Justice Green refused the claimant’s application for an adjournment but gave relief from sanctions so that the witness statements would be served by the close of business on the 2nd February 2015. An order was also made that the claimant file and service schedules with particulars of the losses claimed.

KEY POINTS

  • The claimant was in breach of court orders in relation to the serving of proper schedules setting out their claim.
  • The evidence adduced by the claimant did not support its case, indeed to a large part it contradicted it.
  • In the circumstances of this case it was appropriate for an application for summary judgment to be made at the beginning of a trial.
  • The action had no prospect of success and was struck out.

THE WITNESS STATEMENTS AND SCHEDULES SERVED.

  1. Witness statements and schedules were served on the 2 February 2015. The witness statements did not descend to any particularity in the body of the statements as to the cost of additional services or existing services or as to how the need for any such services arose. The schedules as produced by Neil Harris, by now the Claimant’s finance manager, were not in the same form as the schedule produced previously in relation to PB1. They did not set out the particulars as specified in the schedule to the order of Senior Master Leslie. They referred to sums far in excess of the pleaded case. Indeed, the sums set out in the schedules were close to those pleaded in the original Particulars of Claim. The Defendant considered the served materials. On the 6 February 2015 the Defendant wrote to the Claimant’s solicitors. The Defendant argued as follows: the schedules did not comply with the order made by Mr Justice Green and/or the earlier orders of Senior Master Leslie; the schedules in any event were not validated by any witness evidence, Mr Harris’s evidence being simply a rehearsal of the retrieval of the documents supposedly supporting the schedules; the evidence and the schedules asserted a claim some two-and-half times the value of the claim pleaded and no proposed re-amended pleading had been served. Other matters were put forward which are of no relevance to my consideration of this application.

THE DEFENDANT’S APPLICATION

The defendant invited the claimant to discontinue. No response was received. The claimant’s skeleton argument was served (late) on the 16th February 2014 expressing an intention to amend the Particulars of Claim. Proposed amended Particulars were served on the 17th February 2014.  The proposed amendment increased the value of the claim substantially – for one period from £549,850.10 to £1,697,517.86.  The defendant made an application to strike out the statement of case pursuant to CPR 3.4 and/or to give summary judgment for the defendant.

THE MORNING OF THE TRIAL

The claimant’s application for permission to amend the Particulars of Claim were refused.

THE DEFENDANT’S ARGUMENTS

  • All three sub-paragraphs of Part 3.4(2) of the CPR apply.
  • The statement of case discloses no reasonable grounds for bringing the claim because the particulars provided (which form part of the statement of case) do not constitute a coherent set of facts.
  • The evidence served does not support the pleaded case since it was served with a view to supporting the proposed re-amended pleading.
  • The failure to comply with the order to provide particulars is both an abuse of the process and amounts to a failure to comply with a court order.
  • Given the state of the evidence the Claimant has no real prospect of succeeding in its claim in which event there should be summary judgment entered for the Defendant.

THE JUDGMENT

 

  1. As a general proposition it is very unusual for an application for summary disposal to be made at the commencement of a trial. As Mr Justice Turner drily put it in a case where just such a course had been ordered as part of pre-trial case management: “I pause merely to remark upon the novelty of the timing of a summary judgment application listed to be heard on the morning of the first day of trial”: Bijlani v Unum [2014] EWHC 27(QB). However, I am quite satisfied that the very unusual circumstances of this case mean that the Defendant’s application should not be rejected simply because of its timing.
  2. I am not satisfied that it would be appropriate to strike out the claim on the basis that the statement of case discloses no reasonable grounds for bringing the claim. The Defendant’s argument is that the particulars required by the various orders of Senior Master Leslie and Mr Justice Green form part of the statement of case. Since the schedules provided in relation to all but one of the service users are inadequate, it is proper to conclude that there is no coherent statement of facts. That argument has force. It is not sufficient to say as Mr Pepperall Q.C. does that the pleaded case must disclose reasonable grounds for bringing the claim since no suggestion to the contrary has been made since the service of the Amended Particulars of Claim. However, I am just persuaded that the pleaded case is sufficient to satisfy the requirement of bare coherence.
  3. The same does not apply to the Defendant’s submissions in relation to Part 3.4(2)(b) and (c). There is no doubt that the particulars provided by the Claimant on the 2nd February 2015 by way of schedules do not comply with the requirements of the order of Senior Master Leslie as made initially on the 1st August 2014 i.e. the matters set out in the schedule to that order. Mr Pepperall Q.C. argues that the order in relation to all service users other than PB1 did not refer to the schedule to the order. Therefore, there was no need to provide particulars of the same kind in respect of the seven other service users. He submits that the schedules now served are sufficient to meet any order of Senior Master Leslie. I reject that argument without hesitation. First, the order made by Senior Master Leslie on the 17th December 2013 as to what had to be particularised in the proposed amended claim is not met by the schedules now served. Those schedules do not provide details of the nature of the service provided by the Claimant to the service user and they do not set out the alleged need of the service user. Second, the greater particularity required by the order of the 1stAugust 2014 (and the schedule to that order) was not restricted to PB1. It is inconceivable that it should have been so restricted. The purpose of the order was to enable the Defendant and the court properly to understand the Claimant’s case in relation to underfunding. That could be achieved only by provision of the particulars within the schedule to the order. For the Claimant to be required to provide sufficient particulars in relation to only one out of eight service users would be a nonsense. Implicit in paragraph 6 of the order of the 1st August 2014 was a requirement that the schedules would set out the particulars as specified in the schedule to the order. Third, the scheme of the order is clear. The Claimant was required to provide particulars in relation to one service user with the Defendant to respond thereto. That process would enable the Claimant to adjust the particulars provided in relation to the other service users to take account of any legitimate general objection raised by the Defendant.
  4. Mr Pepperall Q.C. argues in the alternative that the order of Senior Master Leslie was substituted by the order of Mr Justice Green. That order is free standing and should not be read in conjunction with the orders of Senior Master Leslie. I disagree. The orders of Senior Master Leslie formed the backdrop to the proceedings before Mr Justice Green. Mr Justice Green plainly had them clearly in mind since the relevant part of his order is in almost identical terms to the order made on the 1st August 2014 by Senior Master Leslie. No sensible or reasonable litigant would have concluded that Mr Justice Green did not intend that the Claimant’s case should not be properly particularised – which is the logical consequence of the submission made by Mr Pepperall Q.C.
  5. It follows that the Claimant has failed to comply with a court order – or to be precise three successive court orders. In addition I consider that the statement of the Claimant’s case – the particulars as provided by way of schedules – is an abuse of the court’s process or is otherwise likely to obstruct the just disposal of the proceedings. Clearly the circumstances of this case are not comparable to the extreme cases of abuse such as Raja vHoogstraten [2006] EWHC 1315 (Ch). However, the categories of abuse are many and are not closed. In this case the schedules served simply set out a bald statement of four alleged heads of cost for each week and each service user: accommodation; activity log; hours delivered; contingency and reinvestment. A column headed “justification for work undertaken” has only occasional entries. Where they do appear the entry is simply a reference to a document without any explanation as to which part of the document is relied on or is relevant. The essence of the Claimant’s case is quantum meruit i.e. the contract by which the Defendant contracted out its duty to provide care and accommodation to service users did not specify a price and the Claimant is entitled to a reasonable price for the services provided. To expect the Defendant to meet this case – still less to expect the court to try the case fairly – on the basis of the particulars provided is an abuse of the court’s process. It renders just disposal of the proceedings highly problematic.
  6. Mr Pepperall Q.C. submits that striking out a claim under Part 3.4(2)(b) and/or (c) should be an order of last resort. He argues that I must consider what the just course in all of the circumstances is and that I should try to identify a sanction short of the draconian step of striking out the claim. I accept both of those arguments. The problem with identifying some step short of striking out is that this case has had a sorry litigation history as outlined in his judgment by Mr Justice Green. He considered the possibility of adjourning the trial. He rejected that possibility in unequivocal terms. Insofar as he gave the Claimant one last chance to get its house in order, the Claimant has had that last chance. I also have in mind the state of the evidence generally (to which I shall come in a moment in my consideration of the application for summary judgment). I am driven to the conclusion that the only proper step I can take is to strike out the Claimant’s statement of case for the reasons set out above.
  7. I turn to the application for summary judgment. As Mr Pepperall Q.C. notes in his written submission this requires a focus on the evidence rather than the pleadings. In that written submission he noted that the Defendant did not give the requisite notice of the application and he submitted that time should not be abridged. He did not raise that issue in the course of his oral submissions. He was right not to do so. The basis for the application really only became apparent when on the 2nd February 2015 the Claimant served its witness evidence and the schedules. The application was lodged on the 11th February 2015. I am quite satisfied that it is appropriate to abridge time to permit the application to be heard.
  8. I have to consider whether the Claimant has no real prospect of success on its claim. I also must consider whether there is any other compelling reason why the case should not be disposed of at a trial. The burden is on the Defendant to persuade me of both matters. The issue here is whether the Claimant has no real prospect of success. It is not for me to conduct a mini-trial (as it was described in Swain v Hillman [2001] 1 All E.R. 91). The proper approach is as set out in the speech of Lord Hope in Three Rivers DC v Bank of England (No 3) [2001] 2 All E.R. 513:

“89. CPR rule 24.2 provides:

“The court may give summary judgment against a claimant or defendant on the whole of a claim or on a particular issue if –

(a) it considers that –

(i) that claimant has no real prospect of succeeding on the claim or issue; or

(ii) that defendant has no real prospect of successfully defending the claim or issue; and

(b) there is no other reason why the case or issue should be disposed of at a trial.”

90. The test which Clarke J applied, when he was considering whether the claim should be struck out under RSC Ord 18, r 19, was whether it was bound to fail: see p 171 of the third judgment. Mr Stadlen submitted that the court had a wider power to dispose summarily of issues under CPR Part 24 than it did under RSC Ord 18, r 19, and that critical issue was now whether, in terms of CPR rule 24.2(a)(i), the claimants had a real prospect of succeeding on the claim. As to what these words mean, in Swain v Hillman [2001] 1 All ER 91, 92, Lord Woolf MR said:

“Under r 24.2, the court now has a very salutary power, both to be exercised in a claimant’s favour or, where appropriate, in a defendant’s favour. It enables the court to dispose summarily of both claims or defences which have no real prospect of being successful. The words ‘no real prospect of being successful or succeeding’ do not need any amplification, they speak for themselves. The word ‘real’ distinguishes fanciful prospects of success or, as Mr Bidder QC submits, they direct the court to the need to see whether there is a ‘realistic’ as opposed to a ‘fanciful’ prospect of success.”

91. The difference between a test which asks the question “is the claim bound to fail?” and one which asks “does the claim have a real prospect of success?” is not easy to determine. In Swain v Hillman at p 4 Lord Woolf explained that the reason for the contrast in language between rule 3.4 and rule 24.2 is that under rule 3.4, unlike rule 24.2, the court generally is only concerned with the statement of case which it is alleged discloses no reasonable grounds for bringing or defending the claim. In Monsanto plc v Tilly, The Times, 30 November 1999; Court of Appeal (Civil Division) Transcript No 1924 of 1999; Stuart Smith LJ said that rule 24.2 gives somewhat wider scope for dismissing an action or defence. In Taylor v Midland Bank Trust Co Ltd he said that, particularly in the light of the CPR, the court should look to see what will happen at the trial and that, if the case is so weak that it had no reasonable prospect of success, it should be stopped before great expense is incurred.

92. The overriding objective of the CPR is to enable the court to deal with cases justly: rule 1.1. To adopt the language of article 6.1 of the European Convention for the Protection of Human Rights and Fundamental Freedoms with which this aim is consistent, the court must ensure that there is a fair trial. It must seek to give effect to the overriding objective when it exercises any power given to it by the Rules or interprets any rule: rule 1.2. While the difference between the two tests is elusive, in many cases the practical effect will be the same. In more difficult and complex cases such as this one, attention to the overriding objective of dealing with the case justly is likely to be more important than a search for the precise meaning of the rule. As May LJ said in Purdy v Cambran (unreported) 17 December 1999: Court of Appeal (Civil Division) Transcript No 2290 of 1999:

“The court has to seek to give effect to the overriding objective when it exercises any powers given to it by the rules. This applies to applications to strike out a claim. When the court is considering, in a case to be decided under the Civil Procedure Rules, whether or not it is just in accordance with the overriding objective to strike out a claim, it is not necessary to analyse that question by reference to the rigid and overloaded structure which a large body of decisions under the former rules had constructed.”

     93. In Swain v. Hillman Lord Woolf gave this further guidance at pp 94 and 95:

“It is important that a judge in appropriate cases should make use of the powers contained in Part 24. In doing so he or she gives effect to the overriding objectives contained in Part 1. It saves expense; it achieves expedition; it avoids the court’s resources being used up on cases where this serves no purpose, and, I would add, generally, that it is in the interests of justice. If a claimant has a case which is bound to fail, then it is in the claimant’s interests to know as soon as possible that that is the position. Likewise, if a claim is bound to succeed, a claimant should know this as soon as possible….

“Useful though the power is under Part 24, it is important that it is kept to its proper role. It is not meant to dispense with the need for a trial where there are issues which should be investigated at the trial. As Mr Bidder put it in his submissions, the proper disposal of an issue under Part 24 does not involve the judge conducting a mini trial, that is not the object of the provisions; it is to enable cases, where there is no real prospect of success either way, to be disposed of summarily.”

  1. The relevant evidence served by the Claimant comes from two witnesses; Mary Simpson and Neil Harris. I can dispose of the other evidence briefly. The witnesses Sharon Groves and Darren Moyle set out the general condition of the service users who are the subject of the proceedings. Their evidence gives no basis on which to found a particular level of care needed, still less the cost of such care. The witness Thomas Tripp sets out the way in which the Claimant accounts for each service user in its care. He does not descend to any detail relating to the service users in issue. The witness Michael Faulds gives no substantive evidence of any consequence; his witness statement consists largely of comment upon the witness evidence served by the Defendant.
  2. Mary Simpson’s evidence seeks to establish that there was a contract by which the Claimant supplied services to the Defendant for which the Claimant was entitled to reasonable recompense and that the Defendant was in breach of that contract. In relation to the period up to 2008 she produces correspondence exhibited as MS6 dating from 2004. That correspondence plainly shows that the Claimant had service users in its care for which the Defendant was responsible. However, the correspondence equally plainly shows on its face that the fees for particular service users were the subject of concluded negotiation. That correspondence provides no evidence to show that the Claimant was not being provided with reasonable recompense, rather the reverse. Mary Simpson goes on to say this in relation to the pre-2008 period: “The Council well knew that from Spectrum’s long standing provision of residential care services to such individuals as Spectrum reasonably assessed their needs, subject to any guidance or direction given by the Council and that in return the Spectrum would expect the Council to pay Spectrum an amount that covered its reasonable cost of the provision of those residential care services.” Whatever this assertion might be taken to mean, it does not provide any evidence that the Defendant was not meeting its contractual liability. The evidence of Mary Simpson read as a whole (and in conjunction with the documents she produces) provides no real prospect of showing that the Defendant failed in its obligations in the period up to 2008. For the period from 2008 onwards Mary Simpson produces an exhibit (MS1) which consists of a lever arch file containing nearly 350 pages of documents. Most of these documents are irrelevant to the issue of the contractual liability of the Defendant. However, there are a number of documents – correspondence, e-mails, notes of meetings – which are relevant to the issue of fees. These documents are to be found at the following tabs of MS1: 13 to 18; 20; 36; 43; 46; 53; 62; 63. It is quite clear from that material that the issue of fees was considered on a regular basis over the period from the middle of 2008. From time to time the Claimant put forward proposals in relation to particular items of expenditure and the Defendant would consider those proposals. At no point was there any agreement that the Defendant was failing to fund services or care which reasonably were being provided or that the Claimant should provide services additional to those previously agreed. By the middle of 2009 the discussion between the parties was in relation to promptness of payment rather than the amount of the payments. In 2011 there was a meeting between the parties in which it was noted that “the total amount paid to Spectrum would not increase”. Despite the evidence exhibited by Mary Simpson she then repeats word for word the passage set out above asserting that the Defendant knew what assessment the Claimant had made of the needs of service users and that the Defendant could be expected to meet the costs incurred. As with the period up to 2008 there is no realistic prospect of this evidence demonstrating that the Defendant failed in any obligation it owed to the Claimant.
  3. The high water mark of the evidence of Mary Simpson could be said to be the content of paragraph 6 of her witness statement which is headedBasis of Claim. This asserts that the eight named service users were treated differently to other service users because they were long term residents. It states that the fees payable in respect of the majority of the service users in 2012 were increased “to what is required”. Mary Simpson asks “why wasn’t this done years ago?” These bald assertions provide no evidential basis for the claim notwithstanding the heading to the relevant paragraph.
  4. Neil Harris is the finance manager of the Claimant. He only has been in that position since March 2013 so he has no personal knowledge of the subject matter of these proceedings. After an introductory passage setting out his responsibilities with the Claimant (which have no bearing on this case) he sets out what he did in order to prepare the schedules served on the 2nd February 2015. His task was clearly very substantial and involved tracking down a huge amount of documentary material. However, he does not explain the needs of the service users and how they are reflected in the schedule – which is hardly surprising given the nature of his occupation. His role was and is simply to produce the schedules without any detailed explanation or validation. The schedules are not made satisfactory by his evidence.
  5. One matter on which Neil Harris is qualified to speak is the invoicing practice of the Claimant. One of the issues he was required to address by reference to a disclosure order made by Mr Justice Green was invoicing for alleged additional provision of services to service users. Mr Harris’s evidence on that topic is as follows:

“We never raised invoices for additional provision of services because all the funding was being supplied by Spectrum. There was no point in invoicing the defendant Council because all they were paying for was the basic expenses. It made no sense to keep invoicing a Council who were refusing to pay…..there was no point in raising invoices when we knew that we were never or likely to get paid for them.”

How this passage is to be reconciled with the passage already quoted from the statement of Mary Simpson is not explained. The mere fact that two witnesses give evidence that is apparently inconsistent is not sufficient to render the prospects of success of the party calling those witnesses so slight as to justify summary judgment against that party. That would be to undertake the exercise deprecated in Swain v Hillman (supra). But the evidence of Mr Harris of itself appears fatally to undermine the basis of the Claimant’s case. It certainly renders the proposition put forward by Mary Simpson entirely fanciful.

  1. Given the witness evidence and the accompanying documents served by the Claimant I am quite satisfied that the prospects of success for this claim are illusory. Although it is very late in the day for the court to reach that conclusion, I am sure that it is a proper use of the court’s power to exercise its summary jurisdiction even at this late stage. It follows that, irrespective of the striking out of the statement of case, I would give summary judgment against the Claimant.

 

RELATED POSTS

RELATED POSTS: PROVING LOSSES

RELATED POSTS: WITNESS CREDIBILITY

This issue is also discussed in a number of other posts.

1. Litigators must know about credibility.

2. Witness Statements and Witness Evidence: More about Credibility.

3. Which Witness will be believed?Is it all a lottery?

4. The witnesses say the other side is lying: What does the judge do?

5. Assessing the reliability of witnesses: How does the judge decide?

6. Which witness is going to be believed? A High Court decision on credibility

7 Evidence, Experts & Arson: Analysing the evidence when serious allegations are made

8. “Witness training” does it do any good? The role of the solicitor in drafting witness statements.

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