PLEADINGS PROOF AND EVIDENCE: CONFUSION IN ONE OFTEN LEADS TO PROBLEMS WITH THE OTHER

In Mann -v- Shelfside Holdings Limited [2015] EWHC 2583 (QB) the pleadings required rectifying at the start of the trial. The case is an interesting example of problems with pleading and proof.

“This is not just a minor pleading point which can be ignored. Such a case would be a wholly different one requiring evidence in support. The absence of a pleaded case is fatal to this argument.”

THE CASE

The claimants were bringing an action relating to the loss of goods following the defendants taking re-entry of premises. The claimants had a tenancy of the premises of which the defendant was the owner. There were issues as to whether the re-entry was lawful.

THE PLEADINGS

His Honour Judge Simpkiss
  1. At the start of the trial (having heard 2 peripheral witnesses who were not available later in the trial period) I had a discussion with both counsel about the case. Mr. Brown set out his case and, as a result, Mr. Dutton made it clear that he considered that there were some serious pleading and evidential points. I indicated that if any application was going to be made to amend the pleadings or to admit additional evidence I would need to see the amendments and the new evidence in writing.
  2. Mr. Brown made these applications on the second morning of the trial. I rejected the application to adduce new evidence on grounds I gave in a separate ruling. The amendments to the particulars of claim, to a significant extent, either brought into the particulars of claim material that had previously been pleaded in the amended reply and defence to counterclaim or amounted to assertions of the legal consequences of previously pleaded facts. Although Mr. Dutton opposed the application, he did not make a great deal of fuss about this and did not suggest that he was prejudiced.
  3. I am therefore satisfied that the issues which I need to deal with are clarified sufficiently to enable the trial to proceed. One further development greatly assisted in narrowing or, rather, focussing the issues. Having considered the position in the light of the application hearing that morning, Mr. Dutton made a statement that he did not intend to call any evidence and intended only to cross examine the Claimants’ witnesses on issues which he regarded as relevant, on the basis that this did not mean that his side accepted all the other evidence, some of which made significant but un-pleaded allegations against the Second Defendant. Mr. Dutton made it clear that he appreciated that it was his judgment whether the evidence was relevant to the issues which arise in this case. In consequence, some of the issues which had appeared to arise no longer do and Mr. Dutton made various concessions which I will set out once I set out in more detail the issues which arise.
A further point arose as to pleading when the claimant wanted to allege a tenancy was a sham.
  1. In his closing submissions Mr. Brown said that the Second Defendant could not sign the FBT one week and then turn round and claim possession by title paramount the next. He said that the transaction was a sham put in place by the true freeholder. There are a number of problems with this submission. Firstly, there is no pleading that the transaction was a sham or a device to enable the Second Defendant obtain possession at will. This is not just a minor pleading point which can be ignored. Such a case would be a wholly different one requiring evidence in support. The absence of a pleaded case is fatal to this argument.
  2. In any case a sham transaction is one which is dressed up to look like one thing but is in fact something else. The alternative situation is where one party presents a transaction which is in fact a sham and the other knows nothing about it. This is a fraud. Not only is this not pleaded, there is no evidence that the wool was deliberately pulled over the First Claimant’s eyes.

WITNESS EVIDENCE AND CREDIBILITY

The judge made a number of findings in relation credibility. The defendants called no evidence and the claim for damages rested heavily on the credibility of the claimant.  The judge rejected the claimant’s case in relation to the majority of the claim. The damages claim was confined to the items that were admitted to have remained on the premises.

THE BASIS OF THE AWARD OF DAMAGES
  1. Finally, I turn to the issue of compensation to be paid by the Defendants as a result of the goods remaining in their possession since 7th June 2013. The Claimants have not been able to recover them and I have not been told of any effort on the part of the Defendants to let the Claimants do so. In these circumstances it is my judgment that compensation should be paid to the Claimants for those items which the Defendants are likely to have made use of. I have received no evidence in relation to this point, nor on how to value it. Both counsel invited me to do my best and with that in mind, the only logical way to do this is to award interest on the compensation values (whether or not the goods are in fact returned) from 7th June 2013 to date and until they are either returned or the compensation paid.
  2. It is clear that the Defendants have benefitted from the retention of the stables and the evidence shows that the livery business continued and that the Defendants received rent or other payment as a result. I therefore find that all the items which could be used in that business should bear compensation for use: Items 14, 15, 16, 17, 19, 20, 24, 26, 28 and 29. Items 10, 30 and 37 were also capable of use on Park Farm and there is no evidence that they were not used. They should also bear this compensation. The green tape has not been used and the portacabin does not appear to have been used. The hay has been used and should also bear the compensation interest.
  3. I find that the appropriate interest rate is the court rate of 8%. My calculation of the total of compensation for the items is £33,076.63 interest to 31stJuly 2015 is £5,676.13 but this, and any other figures, may be the subject of correction once the parties have seen this judgment. If any corrections are needed to the figures, then this can be done at the final hearing to deal with outstanding issues such as costs or by agreement.

(This is one of those cases where it would be interesting to see if a Part 36 offer had been made and the judgment on the eventual award on costs).

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