FAILURES IN DISCLOSURE AND WITNESS EVIDENCE YET SUCCESSFUL ON APPEAL

The decision of the Court of Appeal in Sobrany -v- UAB Transtira [2016] EWCA Civ 28 gives rise to a few interesting procedural points. It is worth remarking, however, that many of the difficulties arose because of failures by the claimant in relation to witness evidence and disclosure.  The case also highlights the need to consider amendment of the pleadings when a different/new factual scenario emerges.

As ye sow, so shall ye reap.”

“All of which goes to show… that pleadings are still important.”

KEY POINTS

  • A judge could not allow one party to run a case on one factual basis, confined to its pleadings, and another party on a different factual base (which was not pleaded).
  • In a case where a party gave evidence that was inconsistent with their previous case and their opponents wanted to take advantage of that it is probably prudent to make a formal application to amend the pleadings.

THE CASE

  • The claimant was seeking £141,751.46 for hire charges as a subrogated claimant.
  • The claimant served a witness statement stating that he had entered into “a policy of insurance”.
  • At trial the judge refused the defendant permission to argue that there had never been a policy of insurance, that point not being pleaded.
  • The claimant gave evidence on cross examination that he had entered into two hire agreements.
  • This evidence was contrary to what the claimant had been pleaded and what was said in the claimant’s witness statement.
  • The defendant thereafter took the point that there were “two policies” and the judge held that the judgment should be given on the “first policy” for a limited period of time and to recover £8,959.38.
  • The claimant appealed.
  • The appeal was successful and the judgment increased to £101,382.22.

THE APPEAL

The strange element of this appeal is that the problems that arose were, essentially of the claimant’s own making in that:

i. full disclosure was not given;

ii.  a witness statement failed to refer to the documents signed when a second car was hired.

Yet the defendant appears to get all the blame for the problems that arose.

The fact that the claimant had not given disclosure recognised in the judgment on appeal. The claimant had failed to disclose documents prior to trial. In giving evidence the claimant had (presumably) mistaken signature of the right to cancel documents with signing a new policy.   The claimant sought permission to adduce the “right to cancel” notices on appeal. That application was refused.

THE COURT OF APPEAL JUDGMENT ON THE APPLICATION TO ADDUCE “NEW” EVIDENCE
As to the notices of the right to cancel, they could have been provided long before the trial and should have been produced on disclosure. Why that did not happen is a mystery, particularly since (i) they refer to a vehicle rental agreement and bear the same number as the hire agreements (which is the same in the case of all three); and (ii) according to Mr Evans their production and signature is a matter of routine. If they had been produced the whole issue of the unenforceability of the hire agreements would never have arisen.”
  1. The defendant’s reliance on there being two policies will thus have meant that it will have become liable for slightly more than the £ 100,000 which was its alternative case. I reach this conclusion with equanimity. The defendant seized the opportunity provided by Mr Sobrany’s unexpected evidence to take a point which no doubt seemed a good idea at the time but which was a bad one. Had there been more time for reflection its defects might have become apparent. It then sought, successfully, to exclude evidence which, if accepted, would have shown that there was in truth only ever one policy. The judgment which I propose should be entered is the result of the stance it chose to take. As ye sow, so shall ye reap.

 

THE IMPORTANCE OF PLEADINGS

The Court of Appeal differed slightly on whether an application to amend new pleadings should have been made.

Further there is a difference between allowing a defendant to advance a positive case that is inconsistent with its pleading and allowing it to rely upon the evidence which the claimant had in effect volunteered. I also bear in mind, although I do not regard it as dispositive, that the judge was not asked to rule on whether the point about two policies was open to the defendant, or required an amendment of the pleading, as soon as it surfaced: for the importance of which see Hawksworth v Chief Constable of Staffordshire and Anr [2012] EWCA Civ 293 [40] – [41].”

 Lord Justice Lewison thought that a formal application to amend the defence  was necessary (or at least desirable).

  1. I agree that the appeal should be allowed for the reasons given by Christopher Clarke LJ; and wish to comment on only two points. The first is the judge’s decision to allow the “two policies” point to be taken at all. I have had more difficulty than Christopher Clarke LJ in regarding the judge’s decision as fair, especially in the light of his earlier ruling based on the pleadings. I think that had I myself been the trial judge I would not have allowed the point to be taken without an amendment of the pleadings, the formality of which would have alerted counsel for the claimant of the possible need for an adjournment. However, it is necessary to say firmly that whether to allow the point to be taken was a discretionary decision for the trial judge; and my disagreement with him on the facts is not enough for an appeal against his ruling to succeed.
  2. The second point relates to the consequences of the judge’s ruling. In seeking to uphold the judge’s judgment Mr Turner submitted that Mr Sobrany ought to be confined to his pleaded case that there was only one policy. That had the consequence that while the Defendant was free to advance its legal arguments on the basis that there were two policies, Mr Sobrany had to accept that there was only one. That was, in my judgment, an impossible position. Either the judge’s finding of fact bound both parties or it bound neither of them. A case cannot be decided on the basis of one set of facts applying to one party and a different set of facts applying to the other. Reliance on the pleaded case is no answer because the effect of the judge’s ruling was to allow an unpleaded point to form the basis of his decision. All of which goes to show, as Christopher Clarke LJ points out at [33], that pleadings are still important.

 

THE IMPORTANCE OF PLEADINGS

LATE AMENDMENT

 

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