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Mr Justice Hickinbottom:
Introduction
The background to the costs applications now before me is set out in my judgment dated 12 February 2015, and I need not repeat it at length here.
However, briefly, on 18 February 2014 in the Crown Court at Cardiff, prior to arraignment, I dismissed the single charge of conspiracy to defraud on which the Serious Fraud Office ("the SFO") sought to try the six Applicants (now reported as R v Evans and Others [2014] EW Misc 5 (Crown C); [2014] 1 WLR 2817) ("the Dismissal Application"). I adjourned issues of costs generally. On 14 November 2014, Fulford LJ sitting as a Judge of the Queen's Bench Division, refused the SFO's application for a voluntary bill of indictment containing two counts, one in identical terms to that which I dismissed and a second count, also of conspiracy to defraud but with different particulars (now reported as Evans & Others v Serious Fraud Office [2014] EWHC 3803 (QB); [2015] Lloyd's Rep FC 59) ("the VB Application"). Fulford LJ remitted consequential matters, including costs, to me.
The Applicants each applied for one or more of the following costs orders against the SFO, namely:
i) in respect of the Dismissal Application, an order under section 16 of the Prosecution of Offences Act 1985 ("the 1985 Act");
ii) also in respect of the Dismissal Application, an order under section 19 of the 1985 Act; and
iii) in respect of the VB Application, an order that the SFO pays his costs on the indemnity basis.
Unless otherwise indicated, in this judgment "section 16" and "section 19" are references to section 16 and section 19 of the 1985 Act respectively.
The costs claimed under (i) are small and largely uncontroversial. In relation to (ii) and (iii), on 12 February 2015, following a three-day hearing, I handed down judgment on two preliminary issues (now reported as [2015] EWHC 263 (QB)) ("the Costs Preliminary Issues Ruling"), finding as follows:
i) the statutory precondition for the exercise of the court's jurisdiction under section 19 of the 1985 Act (i.e. that the SFO as prosecutor was responsible for an "unnecessary or improper act or omission" that caused the Applicant to incur costs) was satisfied, and the costs so caused were the relevant Applicant's costs of the criminal proceedings from 23 September 2013; and
ii) the Applicant's costs of the VB Application should be assessed on an indemnity basis.
It had been agreed that submissions on quantum should await the judgment on the preliminary issues, as it was expected that I could deal with any further issues (notably the assessment of any costs found to be due, and any interim payments to be made in respect of the costs of the VB Application) on the basis of written submissions only.
Thus, since handing down that judgment, I have received written submissions on the three matters that remain to be dealt with by me, namely:
i) the assessment of the costs to be paid under section 19 of the 1985 Act;
ii) the assessment of the costs of the costs hearing; and
iii) the amount of any interim payment on account of the costs of the VB Application.
Very weighty submissions have been lodged, which set out the respective parties' positions more than clearly. I am quite satisfied that, with one exception, following determination of the preliminary issues, as expected I can deal with the issues between the parties and make the required determinations properly and justly on the basis of the oral and written submissions to date, without a further hearing; and that, given the historic levels of costs at every stage of this case to date, a further hearing would be disproportionate and is unnecessary. The one exception is the section 19 claim made on behalf of Mr Whiteley. For the reasons I briefly set out below (paragraphs 53-58), that claim gives rise to a point of law which has been the subject of very recent further submissions – including submissions made today – and, in my view, it requires further consideration. I have therefore adjourned that issue to be considered at an oral hearing.
Assessment of the Section 19 Costs: Relevant Provisions
As I explained in the Costs Preliminary Issues Ruling (at [85]-[87]), section 16 provides that, where a defendant is charged and he successfully defends that charge, he is generally entitled to his defence costs from central funds. However, in respect of criminal proceedings commenced between 1 October 2012 and 27 January 2014 – including, as is common ground, these proceedings – paragraph 2(2) of Schedule 10 to the Legal Aid, Sentencing and Punishment of Offenders Act 2012 inserted a section 16A(1) into the 1985 Act, which provides that, subject to exceptions not presently relevant:
"A defendant's costs order may not require the payment out of central funds of an amount that includes an amount in respect of the accused's legal costs…".
Therefore, in respect of criminal proceedings commenced in that period, under section 16, a successful defendant was able to recover only out-of-pocket expenses, such as fares to court. Section 16 costs are thus limited in these proceedings. (For completeness, I should say that the Costs in Criminal Cases (Legal Costs) (Exceptions) Regulations inserted a new section 16A(5A) into the 1985 Act under which, for proceedings commenced after 27 January 2014, legal costs are again recoverable but effectively only at legal aid rates.)
However, the 1985 Act provides for a number of special costs orders. Section 19 – the relevant statutory provision in this case – provides for costs orders against a party where costs have been incurred as a result of unnecessary acts or omissions on his part, in the following terms:
"The Lord Chancellor may by regulations make provision empowering magistrates' courts, the Crown Court and the Court of Appeal, in any case where the court is satisfied that one party to criminal proceedings has incurred costs as a result of an unnecessary or improper act or omission by, or on behalf of, another party to the proceedings, to make an order as to the payment of those costs."
The relevant regulations are the Costs in Criminal Cases (General) Regulations 1986 (SI 1996 No 1335) ("the 1986 Regulations"). Regulation 3 provides (so far as relevant):
"(1) … [W]here at any time during criminal proceedings [the court] is satisfied that costs have been incurred in respect of the proceedings by one of the parties as a result of an unnecessary or improper act or omission by, or on behalf of, another party to the proceedings, the court may, after hearing the parties, order that all or part of the costs so incurred by that party shall be paid to him by the other party.
(2) Before making an order under paragraph (1), the court shall take into account any other order as to costs (including a legal aid order) which has been made in respect of the proceedings.
(3) An order made under paragraph (1) shall specify the amount of costs to be paid in pursuance of the order…"
That regulation is complemented by CrimPR rule 76, which sets out the relevant procedure (see CrimPR rule 76.1(1)(a)). Rule 76.8 concerns the procedure in respect of "Costs resulting from unnecessary or improper act etc", i.e. an order under section 19. Rule 76.8(7), reflecting regulation 3(3) of the 1986 Regulations, specifies that "if the court makes an order, it must assess the amount itself…". Rule 76.8(5) provides:
"Where the court considers making an order on its own initiative, it must—
(a) identify the party against whom it proposes making that order; and
(b) specify –
(i) the relevant act or omission,
(ii) the reasons why that act or omission meets the criteria for making an order, and
(iii) with the assistance of the party who incurred the costs, the amount involved."
However, particularly relevant to the matters before me is CrimPR rule 76.2, "Costs orders: general rules", which applies to all costs orders including those made under section 19. That rule provides, so far as relevant to these applications:
"(3) In deciding what order, if any, to make about costs, the court must have regard to all the circumstances, including –
(a) the conduct of all the parties; and
(b) any costs order already made.
(4) If the court makes an order about costs, it must –
(a) specify who must, or must not, pay what, to whom; and
(b) identify the legislation under which the order is made, where there is a choice of powers.
(5) The court must give reasons if it –
(a) refuses an application for a costs order; or
(b) rejects representations opposing a costs order.
(6) If the court makes an order for the payment of costs –
(a) the general rule is that it must be for an amount that is sufficient reasonably to compensate the recipient for costs—
(i) actually, reasonably and properly incurred, and
(ii) reasonable in amount; but
(b) the court may order the payment of—
(i) a proportion of that amount,
(ii) a stated amount less than that amount,
(iii) costs from or until a certain date only,
(iv) costs relating only to particular steps taken, or
(v) costs relating only to a distinct part of the case.
(7) On an assessment of the amount of costs, relevant factors include –
(a) the conduct of all the parties;
(b) the particular complexity of the matter or the difficulty or novelty of the questions raised;
(c) the skill, effort, specialised knowledge and responsibility involved;
(d) the time spent on the case;
(e) the place where and the circumstances in which work or any part of it was done; and
(f) any direction or observations by the court that made the costs order."
Rule 76 is reinforced by the Lord Chief Justice's Practice Direction (Costs in Criminal Proceedings) [2013] EWCA Crim 1632 ("the Costs PD"). Reflecting the analysis of Lord Woolf CJ in R (HM Commissioners of Customs and Excise) v Leicester Crown Court [2001] EWHC 33 (Admin) at [12]), paragraph 4.1 states:
"The court may find it helpful to adopt a three-stage approach (a) Has there been an unnecessary or improper act omission? (b) As a result have any costs been incurred by another party? (c) If the answers to (a) and (b) are 'yes', should the court exercise its discretion to order the party responsible to meet the whole or any part of the relevant costs, and if so what specific sum is involved?".
In relation to the section 19 applications before me, the preliminary issues left stage (c), i.e. the assessment of the specific sum.
Given the difference between the amounts of costs claimed and those conceded by the SFO in this case, Mr Richard Christie QC and Miss Lisa Arbon-Donovan for the SFO urged me to employ the services of the National Taxing Team ("the NTT") or the Senior Court Costs Office ("the SCCO") to make enquiries and prepare a report on the likely amount of the costs incurred by each of the relevant Applicants (paragraphs 3-8 of their Written Submissions dated 23 March 2015). In support of that submission, they relied upon paragraph 4.2.6 of the Costs PD, which provides, in the context of wasted costs orders under section 19A of the 1985 Act:
"Though the court cannot delegate its decision to the appropriate authority, it may require the appropriate officer of the court to make enquiries and inform the court as to the likely amount of costs incurred. By [CrimPR rule 76.9(5)], the court is entitled to the assistance in this respect of the party who incurred the costs incurred."
CrimPR rule 76.9(5) is in the same terms as CrimPR rule 76.8(5) quoted above, save that, in (a), it refers to "the representative [rather than 'party'] against whom it proposes making that order".
Mr Christie and Miss Arbon-Donovan submit that:
i) Although both paragraph 4.2.6 of the Costs PD and CrimPR rule 79 concern wasted costs orders against legal representatives under section 19A, they have been treated as applying to section 19, e.g. in R v Thuraisamy Pathmanabhan in which, in a section 19 application at Southwark Crown Court in 2013, they say that His Honour Judge McCreath asked for some assistance from the NTT – although I have not been provided with any details of the assistance requested or given.
ii) In any event, paragraph 1.2.4 of the Costs PD (which applies generally) states:
"… Where the court is required to specify the amount of costs to be paid it cannot delegate the decision, but may require the appropriate officer of the court to make enquiries to inform the court as to the costs incurred, and may adjourn the proceedings for enquiries to be made if necessary. The rules provide that a party who has incurred wasted costs should provide assistance to the court as to the amount involved: [CrimPR] rule 76.8(5), 76.9(5)"
iii) They submit that in this regard, as a matter of principle, no proper distinction can be drawn between section 19A and section 19.
However, in their Written Submissions dated 30 April 2015, Mr John Charles Rees QC and Mr Jonathan Elystan Rees for Mr Humphreys – supported to an extent by other Applicants – submitted that the jurisdiction to refer a matter to the NTT or SCCO is anything but clear, in terms of scope or even existence. The Crown Court, although a senior court, is a creature of statute and the status of any inherent jurisdiction is therefore, at best, dubious. In respect of its statutory powers, CrimPR rules 76.8(5) and 76.9(5) apply only to cases in which the court is considering making an order on its own motion, not (as in this case) on an application by one or more defendants. Further, the jurisdiction appears to be restricted to one in which the relevant officer is asked to inform the court of the amount of costs in fact incurred by the defendants – clear in this case – rather than (e.g.) to assist with the assessment of the amount that it would be reasonable for them to have incurred, which is the non-delegable function of the Crown Court judge.
In the event, I do not have to determine this issue of jurisdiction: I am confident that, on the basis of the material the parties have lodged, I am able properly and justly to assess the section 19 costs of the relevant defendants. Therefore, I have not sought the assistance of the NTT or the SCCO. However, given that further section 19 applications in which significant sums are claimed are likely to arise in the future – particularly with the continuing restriction in respect of section 16 costs – the jurisdiction of Crown Court judges to seek assistance from the NTT and/or the SCCO when required to assess section 19 costs may well be worthy of further consideration by the Criminal Procedure Rules Committee (or, possibly, by the Lord Chief Justice in the context of the Costs PD), so that the scope of any such jurisdiction is clarified.
Section 19 Assessment: The Correct Approach
There was much common ground with regard to the correct approach of the court in assessing costs under section 19.
On the basis of the relevant provisions of the statutory scheme, the following propositions can be made.
i) If making a section 19 order, the court has to order that a specified amount is paid by one party to another party (regulation 3(3) of the 1986 Regulations and CrimPR rule 76.9(5)(a)). This requires the judge to assess the costs to be paid (CrimPR rule 76.8(7)).
ii) Unless the judge considers it appropriate to depart from the general rule (and gives reasons for doing so), the assessment must be of an amount that reasonably compensates the receiving party for costs "actually, reasonably and properly incurred" as a result of the unnecessary or improper act or omission identified, and "reasonable in amount", in this context "reasonableness" incorporating a degree of proportionality. Where, as in this case, there is no evidence that any costs claimed have not been incurred or that any costs have been improperly incurred, the assessment is thus of an amount that reasonably compensates the receiving party for costs reasonably incurred as a result of the identified unnecessary or improper act(s) or omission(s).
iii) The statutory scheme envisages a summary assessment, adopting a broad-brush approach. Unlike a summary assessment of costs in civil proceedings, there is no fixed procedure; and the judge may adopt any procedure that gives all relevant parties a fair opportunity to make representations.
iv) The judge must satisfy himself that the amounts claimed do not offend the indemnity principle. This is most easily done by the relevant receiving party lodging a certificate in the usual form, confirming that the sums claimed do not exceed the sums charged to the client.
v) In making the assessment, the judge must take into account all relevant factors, including those set out in CrimPR rule 76.2(7).
vi) I cannot accept the contention made on behalf of the SFO that, as the conduct of the prosecutor triggers the section 19 jurisdiction, conduct should not be taken into account when making an assessment of the specific sum to be paid: the conduct of the paying party is expressly included as a relevant factor in "an assessment of the amount of costs" (CrimPR 76.2(7)(a): emphasis added) as well as being the trigger for a section 19 order. Conduct is a potent factor in assessing the relevant amount of costs where it has directly or indirectly led to the expenditure of additional costs.
vii) In making the assessment, the judge has a very wide discretion. There is no appeal: his determination will only be subject to challenge on public law grounds.
viii) The judge is required to give reasons for his decision; but in the context of the fact that he is making a broad-brush summary assessment. His reasons need therefore cover only the main issues between the parties. The judge does not explain why he has come to the precise figure to which he has come – yet alone descend to the consideration of individual items that would be appropriate in an assessment by a taxing authority – so long as the parties can understand broadly why he considers that figure reasonably to compensate the receiving party for costs reasonably incurred as a result of the identified unnecessary or improper act(s) or omission(s). There is simply no requirement that a receiving party should give the detail required on a detailed assessment, and the judge should not be drawn into performing anything akin to a detailed assessment: indeed, I echo the comments of His Honour Judge Eccles in R v Binning (Unreported, Oxford Crown Court 29 May 2014) in which he deprecated "any practice in criminal cases that increases costs yet further by the drafting of bills and the carrying in of detailed objections".
ix) The costs of making an application under section 19 (or the costs of responding to an indication by the court of its own motion that it is considering a section 19 order) are costs which may be treated as incurred as a result of the identified unnecessary or improper act or omission, and so may themselves be claimed under section 19.
Section 19 Assessment: The Relevant Factors in this Case
The relevant factors in the assessment before me include:
i) The conduct of the parties in respect of the relevant criminal proceedings. As Fulford LJ and I both found, the SFO failed to identify the legal underpinnings of the charges against the Applicants, "and it instead varied its case in law against [them] as the arguments unfolded and in response to [my] restrained and penetrating enquiries" (VB Ruling at [93]). The result was that the SFO was forced to concede at the Dismissal Hearing that the case it had brought to the Crown Court had no realistic prospect of success. Thereafter:
"167. … Having accepted that the case as it had been sent to the Crown Court was unarguable, the SFO continued to fail to analyse the legal case against the Applicants with appropriate rigour, casting round for some means of saving the case and grasping at a succession of straws in the form of cases with, if anything, decreasing rather than increasing legal coherence and merit.
168. In my judgment, this is a quite exceptional case. This was not simply an error of judgment: once the dismissal application had been formally notified and its essential basis set out, no reasonable prosecutor in the shoes of the SFO would have contested that application in the manner that the SFO in fact did." (Costs Preliminary Issues Ruling, at [167]-[168]).
In particular, the first, late-abandoned iteration of the case involved novel and complex issues of planning and property law which required the retention of specialist counsel over and above the criminal counsel retained. The SFO retained specialist Chancery counsel: each of the Applicants clearly acted reasonably in retaining such counsel themselves. Given the novelty of the issues raised, the importance of the issues to the SFO's case and the different ways in which those legal issues bore upon the various Applicants, I am unimpressed by the contention that the Applicants acted unreasonably in not retaining the same counsel (or, at least, acted unreasonably in each retaining separate counsel) to deal with these issues. As I observed in the Costs Preliminary Issues Ruling at [154(vi)], as a result of the SFO abandoning the first iteration of its case, which had raised the planning and property issues upon which specialist counsel had been instructed, "all of the expenditure of costs by the Applicants upon this issue were entirely wasted, in the sense that the issues to which the costs went did not arise in the case after the first iteration had been abandoned."
ii) Complexity and novelty of the case. The dismissal hearing did not only involve novel and complex issues of planning and property law, it involved similarly challenging issues of criminal law, notably the scope of conspiracy to defraud. Within that, the SFO contended, entirely novelly, that a conspiracy to defraud could be constituted by lawful means to a lawful end. Because of the significance of the Dismissal Ruling on this point, it has been widely reported (including at [2014] 1 WLR 2817).
iii) Skill etc of those involved. As I have indicated, the Dismissal Hearing involved particularly challenging issues of both criminal law, and planning/property law, which required legal representatives (but notably counsel) of particular experience and expertise.
iv) Time. I shall deal with the time spent when I consider the individual claims.
v) Place and circumstances. The SFO urged that it be dealt with in London. There was a direction from the court that the case be heard in Cardiff. In the circumstances, although appropriate solicitors and even counsel may well have been available in Wales, it was clearly reasonable for those Applicants who instructed legal representatives in London to do so.
vi) Any direction or observations of the court. See (i) above.
vii) The seriousness of the charge. The Applicants included two well-established South Wales businessmen, three solicitors (two of whom were partners in a well-established South Wales firm) and a Queen's Counsel. The charge was in respect of a fraud involving approximately £150m. Each of the Applicants was alleged to have made significant personal benefit from the fraud. Had the Applicants been found guilty, each would have faced a considerable prison sentence. Furthermore, the charge involved open cast mining in West Wales, in which the Welsh Government, local government and the local community had a deep interest. In context, the allegation was gravely serious, such that "proportionality" adds little to "reasonableness".
Section 19 Assessment: Rates etc
In relation to the sums claimed, a substantial part is of course attributable to counsel's fees and solicitors' costs. Whilst of course, in the open market, it is open to a solicitor and his client to agree the scope of work that will be done, and any package of charges for solicitors and counsel in respect of that work, such charges are only recoverable from an opponent if they are reasonably incurred and reasonable in amount.
With regard to counsel's fees, the assessment of criminal costs is still usually based upon a basic brief fee and refreshers (see Part II of the Taxing Officers' Notes for Guidance (2002)), with hours of preparation being only one factor to be taken into account rather than forming the basis of a mathematical calculation. On an assessment, a determining officer "must, in the exercise of his discretion, determine a sum which, with the refreshers and any subsidiary fees he considers proper, would provide reasonable remuneration" (paragraph 2.7 of the Taxing Officers' Notes for Guidance). In whatever form counsel's fees have been agreed, on any assessment it is the court's primary task to assess reasonable remuneration for the job.
Guidance as to the correct approach to counsel's fees was given by Pennycuick J in Simpsons Motor Sales (London) Limited v Hendon Corporation [1965] 1 WLR 112, a review of a taxation of the defendant corporation's bill of costs. He said (at page 118E-F):
"… [O]ne must envisage an hypothetical counsel capable of conducting the particular case effectively but unable to or unwilling to insist on the particularly high fee sometimes demanded by counsel of pre-eminent reputation. One must then estimate what fee this hypothetical character would be content to take on the brief…. There is, in the nature of things, no precise standard of measurement…".
The judge went on to say that the assessment of the fee would be fact-specific ("… the same measure may not always be applicable in the infinite variety of cases which can arise…", at page 118G); and that the appropriate figure must be assessed by the master or judge "using his knowledge and experience" (also at page 118G).
I was referred to a number of other authorities. Because they are necessarily fact specific, they are of limited assistance, although the following points can be drawn from them.
i) In the assessment of publicly funded work, it is not appropriate to use privately funded comparators: because privately funded work is essentially market driven, whilst publicly funded work is closely regulated (The Lord Chancellor v John Charles Rees QC [2008] EWHC 3168 (QB)). Similarly, it is not appropriate to use publicly funded comparators when assessing privately funded costs (see R v Orrow [2011] 3 Costs LR 519 ("Orrow")).
ii) Nor do I consider that the time generally allowed for reading documents in Very High Cost Crime Legal Aid cases provides a reliable comparator for reading and digesting the documents in this case, which comprised to a large extent highly technical commercial, planning and property documents.
iii) The courts have recognised that those practising in (e.g.) the Commercial Court can command higher fees than those practising in the criminal courts (Higgs v Camden [2003] EWHC 15 (QB) at [49] per Fulford J as he then was); and, indeed, generally those practising in criminal work can reasonably expect to receive less payment for their work than their civil counterparts (R v Martin [2007] 1 Costs LR 128).
iv) The fact that insurers have monitored and approved counsel and solicitors' charges as a case progressed is a factor that the court may take into account in determining whether those charges are reasonable, and indeed may be an important factor (Orrow).
v) In the case before me, some of the leading criminal counsel involved were paid at rates of £600-750. Looking at the cases as a whole, they do not support the proposition that rates at that level equate with "the going rate" for even the most complex of criminal cases. Whilst the facts were very different, in R v Zinga [2014] EWCA Crim 1823, a highly complex and lengthy prosecution, an hourly rate of £220 was determined reasonable for the senior junior for the private prosecutor – particularly experienced in the field – being the equivalent of not more than £440 for a leading counsel. In Orrow, an hourly rate of £400 was approved for a privately instructed defence leading counsel in a corporate manslaughter case. Mr Rees QC says, from his own experience, that an hourly rate of £850 has been charged in criminal cases, including by the leading counsel who acted for the respondent in The Lord Chancellor v John Charles Rees QC; but in none of the reported cases to which I was referred does a figure of £500 or more appear to have been approved on an assessment.
Whilst complexity of course may warrant a higher fee, where a case involves particularly heavy hours over a lengthy period of time, that may warrant a reduction in the hourly rate to reflect the likely if not guaranteed hours involved. On the other hand, the rate must also reflect the inability of counsel to take on other work during the relevant period, if that indeed be the case.
In the case before me, the leading and junior counsel who appeared for Stephen Davies QC did so on the basis of an hourly rate of £250 and £125 respectively. The SFO, rightly, does not suggest that those rates are unreasonable: they are rates which were agreed by the Bar Mutual Indemnity Fund who supported Mr Davies' defence of the charge, which are recognised as being less than commercial rates to which counsel agree because they are acting for a fellow barrister. As such, nor are they benchmark rates.
The leading counsel for the other Applicants worked on a rate of between £600 (Mr Patrick Harrington QC for Mr Evans) and £750 (Mr Phillip Hackett QC for Mr Whiteley, Mr John Kelsey-Fry QC for Mr Walters, and Mr Rees QC for Mr Humphreys). Junior counsel worked on the following rates: £375 (Mr David Hassall for Mr Whiteley), £350 (Mr Ben Douglas-Jones for Mr Evans), £300 (Mr Jonathan Barnard for Mr Walters), and £250 (Mr Rees for Mr Humphreys). Some counsel have charged a lower rate for travel time etc.
I accept that this case warranted counsel of particular calibre, experience and expertise. However, on the basis of my knowledge of the case – and my knowledge and experience of counsel's fees generally – I do not consider that the rates charged are reasonable in the context of a section 19 assessment. I consider that the hypothetical counsel referred to by Pennycuick J in Simpsons Motors would have reasonably been charged out at approximately £480 per hour, and his hypothetical junior at a rate of approximately £240. I stress that I consider those rates are "top end" rates for criminal work: and, whilst I do not say that in another case they might not be exceeded – although, I suspect, not by very much – they take into account the especial experience and expertise of particularly eminent leading counsel, from which flows more efficient working than would be the case with less experienced and expert counsel.
With regard to solicitors' charges, although designed for summary assessment in civil claims, the starting point is the guideline hourly rates for summary assessment. For the reasons I have given, I consider those Applicants who instructed solicitors in London were reasonable to do so; and, given the complexity of the issues involved, where a solicitor has done particularly challenging work, higher rates might be warranted. However, the solicitors' hours claimed in this case have to be considered in the light of the heavy input from counsel – particularly in respect of the dismissal application, which involved essentially legal issues, albeit against a complex factual background.
Interim Payments: The Law
Costs in respect of the VB Application are subject to the Civil Procedure Rules and, following the Costs Preliminary Issues Ruling, the SFO has been ordered to pay the costs of the relevant Applicants, those costs to be the subject of a detailed assessment on the indemnity basis in due course.
CPR rule 44(2)(8) provides:
"Where the court orders a party to pay costs subject to detailed assessment, it will order that party to pay a reasonable sum on account of costs unless there is good reason not to do so."
In this case, the SFO do not contend that there is any good reason not to make such an order; indeed, in its response to the application it "readily [accepted] that an interim payment is appropriate in respect of the VB [Application] costs" (paragraph 50 of Written Submissions dated 23 March 2015).
In assessing a "reasonable sum" for these purposes, although in the past the courts have calculated the figure in a mathematical way (e.g. in Mars UK Limited v Teknowledge Limited [1999] 2 Costs LR 44, where Jacob J made an interim order in an amount comprising 60% of the sum he considered likely to be awarded on a detailed assessment), it is now clear that the court is not bound to apply such an approach. The current view is that, whilst adopting a generally cautious and conservative approach, the court does not have to determine the irreducible minimum that is likely to be ordered but rather a reasonable estimate of what is likely – some cases say, "very likely" or even "reasonably certain" – to be awarded (see Dyson Appliances Limited v Hoover Limited [2003] EWHC 624 (Ch), United Airlines Inc v United Airlines Limited [2011] EWHC 2411 (Ch) and Blakemore v Cummings [2009] EWCA Civ 1276). In making that assessment, the court has a wide discretion, a number of the cases referring to the necessarily "rough and ready" basis upon which the assessment needs to be made. The taxing officer who performs the detailed assessment is, of course, not bound or guided in any way by the interim order made – which is one reason why an interim order should be conservative, as it may be that the taxing officer will in due course take a different, more stringent line with regard to assessment of the costs as a whole than does the judge making the interim order.
The Individual Claims: Introduction
I now turn to the individual claims.
In respect of the section 19 claims, as I have indicated (see paragraph 20(ix) above), it is open to defendants to claim the costs of the section 19 applications themselves as section 19 costs. In respect of the applications in respect of the costs preliminary issues, it would be all but impossible to tease out the costs spent on the section 19 application (the large majority) from the costs of the application that the VB Hearing costs be paid on an indemnity basis (the small minority), I propose summarily to assess the costs of both, initially together. Whilst the assessments have different foundations – the former in section 19 and the CrimPR, and the latter in the CPR – that appears to me to be the most efficient course, to which no party objected. I then propose to apportion the aggregate sum 80% as to the section 19 application and 20% as to the VB application for indemnity costs, to reflect the time and effort spent on each.
Therefore, in respect of each Applicant, I shall deal with in turn:
i) any section 16 claim made;
ii) any section 19 claim made in respect of the Dismissal Application;
iii) any claim made for the costs of the costs applications (including any application under section 19, and any application that the costs of the VB Application be on an indemnity basis); and
iv) any claim for an interim payment of costs of the VB Application.
In respect of VAT, for Mr Davies and Mr Walters, VAT is recoverable and so is not claimed against the SFO. For Mr Evans, Mr Whiteley and Mr Humphreys, VAT is not otherwise recoverable and so is claimed from the SFO.
Most of the Applicants have lodged certificates confirming that the charges and disbursements claimed are no higher than those charged to their clients. On all the evidence before me, I am satisfied that none of the claims breaches the indemnity principle.
Eric Evans
Section 16
Mr Evans makes a section 16 claim for £1,141.65. The only issue taken by the SFO is in respect of the claimed train fare on 14 November 2014 to a hearing in London, in the sum of £650. Assuming that to be a first class return fare from South Wales, it is unclear how the fare could have been that much. I will reduce it to £395; and make an order under section 16 in the sum of £886.65.
Section 19: Dismissal Proceedings
Mr Evans was granted legal aid on 31 October 2013, and a section 19 claim is made only in respect of costs to that date, i.e. for the period 23 September to 31 October 2013.
The claim as set out in the most recent schedule is for £125,112.62, comprising £71,850 solicitors' charges, £48,952.78 counsel's fees and £4,309.84 disbursements (£4,122.84 copying and £187.00 travel). These figures are all VAT inclusive, as VAT is not otherwise recoverable by Mr Evans. The SFO accepts that £75,661.28 is recoverable, but no more.
In assessing the costs, I take into account the fact that Mr Evans played a central role in the criminal proceedings, having been the architect of the plan that the prosecution alleged was fraudulent, and consequently being the first name on the indictment.
The main issues raised by the SFO are as follows:
i) The rates used in this paragraph are VAT exclusive.
ii) As I have indicated, Mr Harrington QC was charged at £600 and Mr Douglas Jones at £300. I consider rates of £480 and £240 reasonable. The time spent by counsel is somewhat high, given that the period for which a claim is made is short: but, as the SFO accept, it is anything but grossly excessive.
iii) With regard to counsel, a specific point is made that junior counsel spent 16 hours researching planning and land issues. Whilst some effort was required to ascertain that specialist counsel would be required, I accept that, in this case, that should have been clear from an early stage and perhaps without the equivalent of two days' work. However, the amount involved is relatively small.
iv) Solicitors' charges are on the basis of a Grade B rate of £250 (travel time being reduced to £100 per hour), all three fee-earners being Grade B. The Grade B guideline rate for Cardiff Inner is £192. However, (a) no Grade A fee earner was employed on this case, warranting an uplift in the Grade B rate, at least for the most senior Grade B solicitor employed; but (b) some of the work was relatively low grade and could have been done by a lower grade fee earner such as a paralegal (although possibly at the expense of further time being spent). Overall, on rates, the solicitors' charges are high; but not by very much.
v) The SFO questions the time spent by solicitors on scheduling witness statements, exhibits and NAEs (all served in a schedule) but, whilst the time spent might be high, the need for (and reasonableness of) such an exercise is explained in the response. However, I accept that the time spent by solicitors overall appears somewhat high.
vi) The SFO say that the relevant documents were provided to the defence team in digital format, and the outside copying of the documents was unnecessary – and, in any event, ought to have been included in the fee earner rates as overheads. Given the high number of hours claimed, there is a strong argument that the copying was not such as to fall outside usual overheads.
In all the circumstances, I consider that a reasonable sum for the section 19 order to be £97,500 inclusive of VAT.
Costs of the Costs Proceedings
The claim is for £137,591.00 including VAT, comprising £32,160.00 solicitors' charges, £105,431.00 counsel's fees (including £311.00 disbursements). Mr Evans did not have the benefit of a representation order for this part of the proceedings.
The main issues raised by the SFO are as follows:
i) Counsel's rates: see above.
ii) I accept that the costs issues were complex, novel and challenging. Whilst I do not accept that it was unreasonable for counsel (e.g.) to attend the judgment hand down with his client in the circumstances of this particular case, the SFO contend, with some force, that the amount of time spent by counsel on costs issues was nevertheless unreasonably high. Indeed, in my view, even on the basis that counsel (as opposed to solicitors) bore the brunt of this work, 92 hours of work for leading counsel and 88 hours for junior counsel seems much too high.
iii) Solicitors' rates: Both fee earners were Grade B and were charged out at £200 per hour excluding VAT. The rate for each is reasonable.
iv) However, again the time spent by the solicitors on costs issues – a total of over 130 hours – is excessive, given the essentially legal nature of the issues and the obvious reliance of the solicitors on counsel which is reflected in the hours I consider reasonably spent by counsel on the matter.
In all the circumstances, I consider that a reasonable sum for the costs of the costs applications to be £72,500 inclusive of VAT, divided £58,000 as to the section 19 claim and £14,500 as to the VB indemnity costs application.
VB Costs Interim Payment
On behalf of Mr Evans, £516,408.38 including VAT is claimed for the VB Application, comprising £114,645 solicitors' charges, £393,306.70 counsel's fees, £7,315.03 disbursements and £1,141.65 out-of-pocket expenses of Mr Evans himself. Again, Mr Evans did not have the benefit of legal aid for the VB Application.
In addition to the same submission with regard to counsel's rates, the SFO submits that the amount of time spent by counsel was, again, unreasonably high: e.g. 90 hours of time spent by counsel with Mr Evans was unreasonable for an issue that was argued on the basis of legal principles not the facts; it was unreasonable for both fee earners to attend the same conferences and otherwise duplicate work with each other and with counsel; and various scheduling work was unnecessary or (if required) could have been done by a more junior member of staff. There is some force in some of those submissions; although, given the changes in the SFO case, I do not accept that it was unreasonable for a solicitor to attend the dismissal hearing.
I appreciate that costs will in due course be assessed on an indemnity basis. However, in my view, there is some considerable force in the contention that the hours of both counsel and solicitors seem very high.
Taking the cautious view that I must – and not in any way giving any indication to the taxing officer who will in due course be required to assess these costs on a detailed basis and will take his own view, on fuller information than I have – I shall order an interim payment of £200,000. I accept that that figure may, during the detailed assessment procedure, appear parsimonious; but, on the basis of the limited materials I have seen, I do not consider that I could have the requisite confidence in a higher figure at this stage.
David Alan Whiteley
Section 16
Mr Whiteley makes no section 16 claim.
Section 19: Dismissal Proceedings
Mr Whiteley was granted legal aid on 18 October 2013. Prior to that date, Mr Whiteley had been represented by Declan McSorley & Jon Lewis Solicitors. Their retainer came to an end on the grant of a representation order, under which Morgans Criminal Law were the appointed firm.
Mr Whiteley's section 19 claim as set out in the most recent schedule is for £234,163.12, comprising £38,715.88 solicitors' charges, £195,264 counsel's fees and £183.24 disbursements (all figures including VAT which is not otherwise recoverable by Mr Whiteley, and therefore recoverable from the SFO). The SFO appear to accept that £107,274.58 is recoverable, but no more.
The main issue raised by the SFO concerns a brief fee of £200,000 (excluding VAT) which was agreed by Declan McSorley & Jon Lewis for Mr Hackett QC in June 2013 for all work leading up to the dismissal application and the basic fee for the hearing of that application. Two payments totalling £50,000 were made to Mr Hackett prior to 23 September 2013. A further sum of £50,000 was paid on 11 October 2013. When legal aid was granted, Mr Hackett did not to make a claim under the legal aid scheme; but he continued to represent Mr Whiteley, with junior counsel, Mr Hassall who was appointed under the terms of the representation order.
The SFO contend that they are only liable for – at most – the single instalment of Mr Hackett's fees paid between 23 September and 18 October 2013, i.e. £50,000. Mr Whiteley seeks 80% of the brief fee for Mr Hackett as representing his fees for the relevant period, together with small amounts of the two juniors' fees which, he says, fall within the scope of the section 19 order.
The correct approach to Mr Hackett's brief fee has been the subject of further recent submissions, made at my request. Both parties appear to agree that a point of law is raised; and, after careful consideration and with some considerable regret, I consider that I cannot deal with that issue without the benefit of further submissions.
I shall therefore direct that Mr Whiteley's substantive section 19 costs claim shall be set down for a short oral hearing before me, as soon as possible. Only junior counsel need attend.
Costs of the Costs Proceedings
The claim is for £89,970, comprising £14,160 solicitors' charges and £75,810 counsel's fees (including £660.00 disbursements), all figures being VAT inclusive.
The main issue raised by the SFO was in relation to counsel's hourly rates, which reduces their fees to approximately £50,000; but the SFO also raises, albeit more gently, issues concerning the number of solicitors' hours.
In all the circumstances, I consider that a reasonable sum for the costs of the costs applications to be £62,000 (inclusive of VAT), divided £49,600 as to the section 19 claim and £12,400 as to the VB indemnity costs application. I shall make a formal order in relation to the £49,600 after hearing submissions on the legal point referred to above and assessing the costs of the substantive section 19 costs claim.
VB Costs Interim Payment
On behalf of Mr Whiteley, £432,983.88 is claimed for the VB Application, comprising £114,975.71 solicitors' charges, £314,775 counsel's fees and £3,233.17 disbursements.
In addition to the same submissions with regard to counsel's rates – Mr Hackett's VAT-inclusive charges were £215,100 and Mr Hassall's £99,675 – the SFO submits that the rise in hourly rate for the Grade A solicitor from £200 to £295 is unwarranted and unreasonable, a substantial amount of the work done by the Grade A solicitor should have been done by a lower grade fee earner, and there was duplication within the solicitors' team.
Again, I have to approach the assessment of an appropriate interim payment on a cautious basis. With the same caveats as expressed in respect of Mr Evans, I shall order an interim payment of £200,000.
Frances Bodman
The only costs application made by Ms Bodman is a claim for £890.80 under section 16, in respect of which the SFO has made no objection. I shall make an order in that sum.
Stephen Davies
Section 16
Mr Davies makes no section 16 claim.
Section 19: Dismissal Proceedings
With regard to his section 19 claim, the claim as set out in the most recent schedule is for £209,210.10, comprising £82,435 solicitors' charges, £120.882.65 counsel's fees (including £2,018.07 expenses) and £5,892.45 disbursements (including £5,348 for copying). All figures exclude VAT which is recoverable by Mr Davies. In addition, Mr Davies claims £27,500 for his own time on a professional basis (under the principle illustrated by Khan v The Lord Chancellor [2003] EWHC 12 (QB)), and makes a small claim as a litigant in person. The SFO appears to accept that £172,264.62 is recoverable.
Because of the indemnity principle, the SFO will get the benefit of the much reduced rates for counsel, the leaders charging only £250 per hour and the juniors £125 per hour, i.e. the standard rates paid by the Bar Mutual Indemnity Fund, it being one of the traditions of the Bar that barristers appear on behalf of other barristers on a pro bono basis or for significantly reduced rates. The rates charged by the solicitors (e.g. £250 for a Grade A partner, and £85 for a Grade D trainee are also unexceptional – indeed low by comparison with London Central guideline rates – and are not seriously challenged. They are patently reasonable.
In relation to counsel's fees, it is difficult to challenge any substantial part of these, the hours appearing to be reasonable. I am unimpressed by the argument that it was unnecessary for different leading counsel to deal with different parts of the case – so that aggregate hours are unreasonably high as a result of duplication – because it seems that that was a necessary consequence of the package agreed by the Indemnity Insurers which included the low agreed rate.
The solicitors' hours claimed comprise nearly 250 hours of one Grade A fee earner; and about the same number of hours of Grade D time, the vast majority of that time being spent by just one trainee. Particular issues raised by the SFO in respect of solicitors' hours are as follows:
i) The SFO criticise the general nature of the solicitors' entries, e.g. "All day spent on the phone and emails… Preparing documents for counsel and for skeleton hearing…"; and the high hours billed for administrative tasks such as putting together indexes and bundles, and dealing with IT problems.
ii) The SFO also challenges the need for both a solicitor and a trainee to attend (e.g.) conferences with counsel; but such duplication may be warranted, at least to an extent, where, as here, a trainee is expected to perform some of the tasks on the case (including a note of the conference) which may lead to costs savings.
iii) It also criticises the inclusion of research time; but, as those representing Mr Davies correctly say, time on research is recoverable where it involves new or challenging areas of law, as did this case in profusion.
iv) The SFO also says that hand delivery of items to counsel and researching legal points should not reasonably be recoverable; but these are modest sums.
In my view, given the split of time between effectively one Grade A and one Grade D fee earner, looked at as a whole the solicitors' hours are high, but not grossly so. There is, again, an argument that the solicitors' hours are such that the copying charges should reasonably be included as ordinary overheads.
A claim is also made for 50 hours of Mr Davies' own time, "from outset to initiation" (in fact, as I understand it, for the period 14 October 2013 to 9 February 2014), at a rate of £550 per hour (as I understand it, a rate based on his usual rate as a leading counsel in commercial matters). It is claimed on the basis that this was work in which he employed his own training, skills and professional experience, that could and would have been done by an engaged barrister if he had not done it. However, leaving aside the fact that the rate claimed is high, having considered the schedule of these costs and the descriptions given, I am afraid I am unpersuaded that he added any real value to the efforts of his team of counsel and solicitors. Insofar as he did, then I would be minded to reduce the payments to them. On what I have before me, I am unpersuaded that any of these costs should be recoverable.
In all the circumstances, I consider that a reasonable sum for the section 19 order to be £187,500.
Costs of the Costs Proceedings
The claim is for £107,717.40, comprising £54,195.50 solicitors' charges, £50,682.80 counsel's fees (including £1,170.30 disbursements) and £2,839.10 (including £1,867.20 copying).
The SFO raise only the same issues as it raised in relation to the section 19 order on the Dismissal Application. Mr Beloff QC spent 65 hours on the matter, supported by admittedly high hours (173 hours) from the main junior (Mr Potts). Given that profile, Counsel's fees cannot be significantly challenged, particularly as Mr Beloff's analysis of the relevant law was the most comprehensive and he led the Applicants' arguments at the hearing before me.
However, I accept that the solicitors' hours are very high, e.g. (as the SFO point out) in regard to such matters as (e.g.) working on Mr Beloff QC's oral submissions (about 20 hours), getting the papers ready for the costs hearing (about 33 hours) and the trainee reading the judgment (5 hours). There are other items which appear on their face to be irrecoverable (e.g. preparing a press release).
In all the circumstances, I consider that a reasonable sum for the costs of the costs applications to be £82,000, divided £65,600 as to the section 19 claim and £16,400 as to the VB indemnity costs application.
VB Costs Interim Payment
On behalf of Mr Davies, £215,169.88 is claimed for the VB Application, comprising £90,466.50 solicitors' charges, £114,826.65 counsel's fees and £9,876.73 disbursements. Furthermore, Mr Davies makes a small claim as a litigant in person (in relation to similar tasks for which he claims at £550 per hour in relation to the section 19 claim); but he has throughout been represented, and therefore such a claim cannot be made.
The SFO make similar submissions in relation to these costs. Again, it seems to me that figures for counsel's fees are quite hard, whilst those claimed for the solicitor's charges may be considerably softer.
Adopting the same cautious approach and with the same caveats as expressed in respect of Mr Evans, I shall order an interim payment of £150,000.
Richard Walters
Section 16
Mr Walters makes a section 16 claim but restricted to his fares etc for the 23 September 2013 hearing, i.e. £185.50. The SFO has taken no issue with that claim, and I shall make an award in that sum.
Section 19: Dismissal Proceedings
With regard to his section 19 claim, Mr Walters did not take an active part in the Dismissal Application, being represented by a junior (Mr Barnard) at a rate of £300 per hour on effectively a watching brief. A leader was instructed to advise at £750 per hour; but only five hours are claimed.
The claim as set out in the most recent schedule is for £69,049.85, comprising £49,595 solicitors' charges, £18,900 counsel's fees and £554.85 travel expenses. The SFO accept that about 75% of that is recoverable.
The SFO do not appear to contend that it was unreasonable for Mr Walters to retain a watching brief in relation to the dismissal application; and, given the proneness of the SFO to change its case, I consider it was clearly reasonable for him to be represented as he was.
The main issue raised by the SFO is as to rates, with which I have dealt – the rates for both counsel and solicitors are higher than I have indicated appropriate – and objection is taken to certain items as being in respect of Celtic Energy matters not the dismissal claim. It is said that the costs of Mr Walters' team were overall high, given that they did not actively engage in the dismissal process; but there is not great force in that submission.
In all the circumstances, I consider that a reasonable sum for the section 19 order to be £57,500.
Costs of the Costs Proceedings
The claim is for £105,007.87, comprising £28,299 solicitors' charges, £76,352.81 counsel's fees (including £1,352.81 travel and hotel expenses) and £356.05 disbursements.
The main issue raised by the SFO is again in relation to counsel's fees, which were a brief fee of £50,000 for leading counsel and £25,000 for the junior. As with the other Applicants, these seem high to me by about a third.
In all the circumstances, I consider that a reasonable sum for the costs of the costs applications to be £70,000, divided £56,000 as to the section 19 claim and £14,000 as to the VB indemnity costs application.
VB Costs Interim Payment
On behalf of Mr Walters, £427,500.24 is claimed for the VB Application, comprising £57,875.50 solicitors' charges, £367,500 counsel's fees and £2,124.74 disbursements.
The SFO's primary submission is that Mr Purnell's brief fee of £300,000 was grossly excessive, particularly given the time he recorded in preparation appears to have been only just over 60 hours. Mr Barnard's brief fee of £67,500 was also excessive, it is said, representing nearly £400 per hour. On what I have seen, those submissions appear to have considerable force. The brief fees may be justifiable on the detailed examination that will be given to them on assessment; but the leader's brief fee in particular appears very much too high on the basis of the limited information I have seen.
Again, I have to approach the assessment of an appropriate interim payment on a cautious basis. With the same caveats as expressed in respect of other Applicants, I shall order an interim payment of £180,000.
Leighton Humphreys
Section 16
Mr Humphreys makes a section 16 claim for £432.10. The SFO has taken no issue with that claim, and I shall make an award in that sum.
Section 19: Dismissal Proceedings
With regard to his section 19 claim, the claim as set out in the most recent schedule is for £646,164.76, comprising £153,640 solicitors' charges and £492,524.76 counsel's fees (inclusive of some disbursements such as travelling expenses). All figures are inclusive of VAT which Mr Humphreys cannot recover. The SFO accept that about £200,000 is recoverable, but no more.
The main issues raised by the SFO are as follows:
i) Counsel's rates: Mr Rees QC was charged at £750 per hour. I consider a rate of £480 reasonable. There is no significant issue with Mr Rees' rate of £250 per hour.
ii) The SFO also challenge the reasonableness of the hours each counsel spent in the matter: Mr Rees QC over 380 hours, and Mr Rees 290 hours preparation before the hearing. They take, by way of example, the 59 hours preparation (Mr Rees QC 38 hours and Mr Rees 21 hours) between the close of the December 2014 hearing and my asking for further assistance on a discrete point in January 2015, when the parties were simply awaiting judgment. There is no compelling breakdown of that, or other time spent by counsel on the case. I do not consider it was reasonable for Counsel to have been working on other aspects of the case, certainly to that extent, when judgment in relation to dismissal was awaited. It is unclear why counsel for Mr Humphreys spent so very much more time on the dismissal application than did counsel for the other parties. There is no reason apparent why that should have been so.
iii) Furthermore, the qualified solicitor's time (over 500 hours, all Grade A at £250 per hour) is, the SFO say with force, also grossly excessive – particularly given the experience, expertise and obvious effort of counsel in the case – and a considerable amount of the work could have been, and should have been, performed by a lower grade fee earner.
iv) There is force in these arguments. The rate for leading counsel I have indicated reduces Mr Rees QC's charges by one-third in any event. Furthermore, the hours spent by the three members of Mr Humphreys' legal team – well over a thousand hours for this limited period – were in my view very substantially above the reasonable mark. Mr Rees QC and Mr Rees of course practice at the criminal bar: Mr Humphreys did not employ specialist planning or property counsel. Although the Messrs Rees made some submissions in relation to the planning and property issues, (a) these were limited, and (b) there was no element of duplication inevitable in the teams with specialist counsel from the relevant fields. I accept that Mr Rees QC did lead for the defendants on some of the criminal issues before the court – e.g. those in relation to the Fraud Act – but, overall, there is in my view no good reason why the efforts of the legal team on Mr Humphreys behalf should reasonably have been so much more extensive or expensive that those of the other Applicants.
In all the circumstances, I consider that a reasonable sum for the section 19 order to be £275,000 plus VAT, i.e. £330,000.
Costs of the Costs Proceedings
The claim is for £238,326 (including VAT), comprising £8,760 solicitors' charges and £229,566 counsel's fees (including some disbursements).
The solicitors' hours claimed (under 30 hours) are not significantly high, although three Grade A fee earners were involved with some duplication inevitable. The main issue raised by the SFO is again with regard to leading counsel's fees. The fees charged for Mr Rees QC (just over £160,000 excluding VAT) are reduced to just over £100,000 by virtue of the rate being reduced from £750 to £480 – but that is based upon nearly 200 hours of preparation being done prior to the costs hearing. Mr Rees' charges were £30,000, based on just over 100 hours of preparation. It is unclear why Mr Rees QC did nearly twice as many hours on preparation as his junior: I remain unconvinced by the explanation given in the Written Submissions dated 23 March 2015 that the split of work was reasonable.
In all the circumstances, I consider that a reasonable sum for the costs of the costs applications to be £85,000, divided £68,000 as to the section 19 claim and £17,000 as to the VB indemnity costs application.
VB Costs Interim Payment
Mr Humphreys does not seek an interim payment in respect of the costs of the VB Application.
Conclusion and Order
I have considered, looking at the matter as a whole, whether the sums I have assessed and specified under section 19 will reasonably compensate the Applicants as receiving parties for the costs they each reasonably incurred as a result of the identified unnecessary or improper acts and omissions of the SFO; and I am satisfied that they will. I make that clear, because there are some, relatively minor discrepancies between various schedules of costs that have been lodged by the Applicants. I do not consider any of those differences to be material.
Therefore, for the above reasons, I shall make the following order:
1. In respect of the applications to dismiss, the Respondent shall pay the Applicants the following costs under section 16:
Eric Evans £886.65
Frances Bodman £890.80
Richard Walters £185.50
Leighton Humphreys £432.10
2. In respect of the applications to dismiss, the Respondent shall pay the Applicants the following costs under section 19:
Eric Evans £155,500 (£97,500 plus £58,000)
Stephen Davies £253,100 (£187,500 plus £65,600)
Richard Walters £113,500 (£57,500 plus £56,000)
Leighton Humphreys £398,000 (£330,000 plus £68,000)
3. In addition to the sums in paragraphs 1 and 2, in respect of costs of the costs application with regard to voluntary bill, the Respondent shall pay the Applicants' costs, summarily assessed as follows:
Eric Evans £14,500
David Alan Whiteley £12,400
Stephen Davies £16,400
Richard Walters £14,000
Leighton Humphreys £17,000
4. Other than the costs ordered to be paid in paragraph 3, the Respondent shall pay the Applicants' costs of the application for a voluntary bill to be the subject of a detailed assessment on an indemnity basis if not agreed.
5. The Respondent shall pay to the Applicants the following sums on account of the costs ordered to be paid under paragraph 4:
Eric Evans £200,000
David Alan Whiteley £200,000
Stephen Davies £150,000
Richard Walters £180,000
6. All payments to be made by 4pm on 17 June 2015.
7. In relation to Mr Whiteley's section 19 costs claim, the following directions shall apply:
(i) The claim shall be adjourned to be heard orally in court, reserved to Hickinbottom J, time estimate one and a half hours, only junior counsel for Mr Whiteley and the SFO need attend. Submissions to be restricted to the effects of the grant of a representation order, especially upon the brief fee of Mr Hackett QC; and how that should be reflected in a section 19 costs order.
(ii) Skeleton arguments shall be lodged and served at least 10 days before the hearing; and solicitors for Mr Whiteley shall lodge a bundle of documents, to include the skeleton arguments, any authorities (including statutory provisions etc) and relevant contemporaneous documents at least 7 days before the hearing. The parties will be notified as to where to lodge that bundle.
(iii) Parties to lodge with Hickinbottom J's clerk dates of unavailability by 4pm on Friday 5 June 2015, for the period to 31 July 2015. The hearing shall be fixed taking into account dates of unavailability lodged; but, if necessary, it may be listed on a date when one or more counsel of choice are not available.
(iv) If the parties compromise the claim, then they must notify Hickinbottom J's clerk, and thereafter lodge with her a draft order, as soon as possible.
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The Hon Mr Justice Turner :
INTRODUCTION
The claimant in this case is Ben Harman. He was born on 7 April 2002. Those responsible for his care at the defendant's hospital negligently failed to diagnose his condition and it was nearly three days before blood sugar measurements were taken. They were found to be catastrophically low. Dextrose was administered but not before Ben had suffered grave injury. However, when he was discharged his parents were told nothing about the risk that his low blood sugar levels may have caused lasting damage.
As Ben grew up, his lack of developmental progress became a source of increasing concern to his parents. He was persistently and significantly failing to reach his expected milestones. However, it was not until 2006 that Mr and Mrs Harman discovered the cause of Ben's difficulties. They applied for a "blue badge" parking ticket and Ben's diagnosis was only revealed incidentally when they asked for medical evidence in support of the application.
A letter of claim was served in August 2011 and proceedings commenced thereafter. Liability was disputed on the issue of causation. Eventually, however, the defendant admitted liability in July 2013.
It has not been possible for the parties to agree all aspects of quantum and those that remain in dispute now fall to be adjudicated upon by this court.
BEN'S CONDITION
Ben suffers from severe autism and significant cognitive impairment. His intellectual ability is very seriously impaired. He is doubly incontinent. He has the vocal communication skills of a six month old baby and his levels of social awareness are only a little higher. Thus he cannot talk and he struggles meaningfully to relate to others. His mobility skills are, however, equivalent to those of a four year old. This means that he is able to run about and engage physically with his environment but he has no awareness of danger to himself or the impact of his behaviour on others. He is prone to having unpredictable tantrums and can lash out physically while shrieking at the top of his voice. There is a real and continuing risk of injury to himself and to others. As he grows older and physically stronger he presents an increasing challenge to those responsible for his care.
I have seen a DVD recording a day in Ben's life. What it portrays is entirely consistent with the descriptions of Ben's behavioural presentation which are to be found in the various witness statements and expert reports.
CARING FOR BEN
Little imagination is required to appreciate that Ben requires a very high level of care indeed. There remain, however, very serious issues between the parties as to the form in which that care ought to be provided to him in the future. I propose to deal with each of these issues in turn.
PRIOR'S COURT
For many years, Ben attended Maplewood School and lived at home. There is now no dispute that Maplewood was unable satisfactorily to provide for Ben's needs. An obviously more suitable regime was available at Prior's Court which provides specialist services for those suffering from severe autism. Ben's parents, however, faced a long and uphill struggle to persuade the Local Education Authority ("LEA") to fund the placement.
It was not until September 2014 that the LEA finally relented and agreed to pay but, by this time, liability in this claim had been admitted and Ben had already started at Prior's Court in the preceding December under private funding. This was not a day too soon. Ben's parents were at the end of their tether, exhausted by the physical and emotional challenges of looking after him. Ben has two brothers, one older and one younger. Time which would otherwise have been spent with them was being heavily diverted into attending to Ben's needs.
Despite the availability of a 52 week placement at Prior's Court, Ben's parents elected for a 44 week package which enabled him to continue to spend time at home. As well as the holidays which he spent at home Ben was only at home for 8 weeks a year. In July 2014, the family moved to a large rented house in Marlow which is sufficiently capacious adequately to accommodate Ben and his carers. The lease on this property expires in a little over a year's time. During this period, the family hope to be able to buy and adapt a suitable property for the long term.
At Prior's Court Ben has made gratifying progress in, for example, feeding and toileting. He has only now started to hug his mother. Last October, the family went on their first foreign holiday for ten years. At present, Ben comes home every other weekend but his parents have expressed the hope that he will be able to see more of them in future.
The present plan is for Ben to stay at Prior's Court until he is 25 years old. From the age of 19 it is expected that he will benefit from young adult provision there.
The LEA are presently funding Ben's placement at Prior's Court and, subject to the outcome of this claim, would probably continue to do so until he leaves at the age of 25. Against this background, the defendant contends that it should not be required to pay because Ben will suffer no loss.
Each side relied upon the reports and oral evidence of an educational psychologist. They were Mr Reid for Ben and Mr Baldwin for the defendant. They agree in their joint statement that 'in view of the appropriateness of Prior's Court, his continued placement there should be guaranteed, subject to review.'
After Ben has reached the age of nineteen the experts were agreed that he will have the benefit of an Education, Health and Care Plan ("EHC plan") in the same, or similar, terms to the existing statement. It is not suggested that his needs would vary significantly in the meantime or that the responsibilities or duties of the local authority would materially alter. Although provision is not guaranteed, the evidence suggests that there is only a low probability that an appeal would have to be launched to challenge a detrimentally unsuitable EHC plan. In the circumstances of this case, the experts were confident that even if such an appeal were to become necessary it would be successful. The defendant has therefore included in the agreed lump sum settlement a figure to cover the cost of launching any such appeal.
The defendant contends on this basis that to all intents and purposes the court can be confident that the LEA will pay the Prior's Court fees until Ben reaches the age of 25 and that this is a case in which there is not a mere future potential entitlement but a fait accompli.
In Sowden v Lodge [2004] EWCA Civ 1370, Lord Justice Pill observed, at paragraph 41:
"In general terms, the approach is to compare what a claimant can reasonably require with what a local authority, having regard to uncertainties which almost inevitably are present, are likely to provide in the discharge of their duty under Section 21. If the second falls significantly short of the first, as Owen J found in Crookdake it did, the tortfeasor must pay, subject to the argument raised in both cases that Section 21 provision augmented by contribution from the tortfeasor meets the reasonable requirements. If it is the statutory provision which meets the claimant's reasonable requirements, as assessed by the judge, the tortfeasor does not have to pay for a different regime. I accept that in making the comparison a court may have regard to the power to compel a local authority to perform its duties."
In Crofton v NHSLA [2007] EWCA Civ 71, the Court found, in so far as is relevant to this issue:
"87. To summarise, the judge was right to hold that the Council could and would make direct payments to meet the claimant's care needs despite the award of damages, and that these payments should be taken into account in the assessment of damages.
88. Once the judge decided that the Council would make such direct payments, it seems to us that he was bound to hold that they should be taken into account in the assessment of damages…
91. It is trite law that a claimant is entitled to recover the full extent of his loss. That involves asking what the claimant would have received but for the event which gave rise to the claim and which he can no longer get; and what he has received and will receive as a result of the event which he would not have received but for the event. The question then arises whether the latter sums must be deducted from the former in assessing the damages: Parry v Cleaver [1970] AC 1, 13. In Hodgson v Trapp [1989] 1 AC 807, 891 Lord Bridge said that it was "elementary" that if in consequence of the injuries he has sustained a claimant enjoys receipts to which he would not otherwise have been entitled, then prima facie those receipts are to be set against the aggregate of his loss and expenses in arriving at the measure of damages. To this basic rule there are certain well established exceptions, none of which is of application in the present case.
92. In principle, payments by third parties which a claimant would not have received but for his injuries have to be taken into account in carrying out the assessment of damages unless they come within one of the established exceptions. It is not suggested that direct payments made by a local authority in the exercise of its statutory functions to make care arrangements under section 29 NAA and section 2 CSDPA may not in principle be taken into account. If the court is satisfied that a claimant will seek and obtain payments which will enable him to pay for some or all of the services for which he needs care, there can be no doubt that those payments must be taken into account in the assessment of his loss. Otherwise, the claimant will enjoy a double recovery.
93. In Freeman v Lockett, Tomlinson J decided that there should be no reduction in the claimant's damages to reflect the possibility of direct payments by the local authority. A sufficient basis for his decision was his finding that, provided that no deduction on account of the possible receipt of state or local authority funding was made from her award of damages, the claimant would withdraw her application for funding; she wanted to rely exclusively on private funding for her care.
94. But he would in any event have refused to make any reduction in the claimant's damages on account of direct payments for other reasons. He said that there was no principled basis on which the court could estimate what funding the claimant could reliably expect to receive from the local authority for the rest of her life. The court "does not speculate unnecessarily or in an unprincipled manner….I cannot understand how it can be appropriate to impose upon the Claimant the unnecessary risk that funding from an alternative source may cease or be reduced rather than simply to order the provision of the fund in its entirety" (paragraph 35).
95. In making these observations, Tomlinson J was influenced by the fragility of the policy from which the right to receive direct payments derived. He said that "in the ordinary way, the regime pursuant to which direct payments are made for domiciliary care is very much more vulnerable to adjustment in order to save costs than is the direct provision of residential care" (paragraph 38).
96. We would accept that there may be cases where the possibility of a claimant receiving direct payments is so uncertain that they should be disregarded altogether in the assessment of damages. It will depend on the facts of the particular case. But if the court finds that a claimant will receive direct payments for at least a certain period of time and possibly for much longer, it seems to us that this finding must be taken into account in the assessment. In such a case, the correct way to reflect the uncertainties to which Tomlinson J referred is to discount the multiplier. We did not understand Mr Taylor to contend otherwise."
However, it is evident from the way in which the Court of Appeal approached the issue in these cases that it was not there disputed that the claimants would, in fact, be receiving payments from the local authority. In this case, in contrast, Ben's parents have given evidence that they do not want local authority funding but seek to fund Ben's time at Prior's Court privately from an award of damages against the defendant.
In Peters v East Midlands Strategic Health Authority [2010] QB 48 the issue arose as to the extent to which the claimant was entitled as of right to choose to pursue a claim against the tortfeasor rather than to rely upon the statutory obligations upon a public authority to provide her with care and accommodation. Dyson LJ dealt with the matter thus:
"The second issue: is the claimant entitled as of right to choose damages rather than provision by the council?
33. It is trite law that, if a claimant has distinct rights of action against more than one wrongdoer in respect of the same loss, he can recover against them all, provided that he does not recover in total more than the amount of the loss. So far as we are aware, this principle has never been expressed as having anything to do with the rule that a claimant must take all reasonable steps to mitigate the loss caused to him by the defendant's wrong and that he cannot recover damages for any such loss which he could have avoided but has failed, through unreasonable inaction, to avoid: for the rule, see McGregor on Damages, 17th ed (2003), para 7–004. "
34. This principle has also been applied to cases where the claimant has a right of action against the wrongdoer and a statutory right to recover the same loss against an innocent public authority. An example of such a case is The Liverpool (No 2) [1963] P 64 . We discuss this case below.
35. The question raised by this appeal is whether the principle also applies where the claimant has both a right of action against the wrongdoer to recover damages in respect of a head of loss and a statutory right to have the loss made good in kind by the provision of services by a public authority. In such a case, is the claimant entitled to recover damages from the wrongdoer as a matter of right, or can he do so only if, in all the circumstances of the case, it is reasonable for him not to enforce his statutory right against the public authority?
36. No authority has been cited to us which decides this question in the context of a claim for damages for the cost of accommodation and care where the claimant has a statutory right to receive an equivalent provision from the local authority. There are many cases where the courts have awarded a claimant care costs as a head of loss, not on the grounds that the claimant is entitled to the costs as of right, but because local authority care has been ruled out as inadequate, uncertain or unavailable: see McGregor , Fourth Supplement, 17th ed (2007), para 35–159E. That is what the judge did in the present case and whether he was right to do so is the third issue raised on this appeal…
53. Having reviewed these authorities, we can now express our conclusion on this issue. We can see no reason in policy or principle which requires us to hold that a claimant who wishes to opt for self-funding and damages in preference to reliance on the statutory obligations of a public authority should not be entitled to do so as a matter of right. The claimant has suffered loss which has been caused by the wrongdoing of the defendants. She is entitled to have that loss made good, so far as this is possible, by the provision of accommodation and care. There is no dispute as to what that should be and the council currently arranges for its provision at The Spinnies. The only issue is whether the defendant wrongdoers or the council and the PCT should pay for it in the future.
54. It is difficult to see on what basis the present case can in principle be distinguished from the case where a claimant has a right of action against more than one wrongdoer or a case such as The Liverpool (No 2) [1963] P 64 where a claimant has a right of action against a wrongdoer and an innocent party. In The Liverpool (No 2), those two cases were treated alike. In our judgment, the present case should be treated in the same way. It is true that in the present case, the claimant's right against the council is the statutory right to receive accommodation and care. But the fact that there is a statutory right in the claimant to have his or her loss made good in kind, rather than by payment of compensation, is not a sufficient reason for treating the cases differently.
55. Mr Faulks also submits that there is support for his submission in Crofton v National Health Service Litigation Authority [2007] 1 WLR 923 , paras 88 and 89. We do not propose to set out these paragraphs. Suffice it to say that the whole of paras 87–95 of Crofton's case is predicated on the judge's finding that the council would in fact make direct payments to the claimant to enable him to pay for his care. Crofton's case provides no support for Mr Faulks.
56. In our judgment, therefore, provided that there was no real risk of double recovery, the judge was right to hold that there was no reason in principle why the claimant should give up her right to damages to meet her wish to pay for her care needs herself rather than to become dependent on the state. The judge was right to be concerned about the possibility of double recovery to which we now turn."
The defendant in this case concedes that if the payment of the Prior's Court fees by the local authority were simply a potential entitlement which might or might not eventuate, then it could not ask the Court to take the same into account in its award of damages. However, it is contended that where, as here, the firm and agreed evidence is that such payments are being made and will continue to be made into the future then the effect of Sowden and Crofton is clear and is entirely unaffected by Peters. The Court should take that evidence into account and should not require the defendant to assume responsibility for those fees.
I disagree.
Ben's parents have unequivocally expressed a preference that the Prior's Court fees should be paid from an award of damages against the defendant. That is how they would fund Ben's placement in the event that the Court made provision for the same in adjudicating on this issue. The effect of Peters is to confirm that Ben is entitled to pursue the defendant for these sums rather than have to rely on the statutory obligations of the LEA.
By presenting the situation on the basis that the local authority will continue to pay for Prior's Court the defendant is misstating the position. The local authority will not continue funding if Ben, through those acting on his behalf, does not claim funding. Peters gives claimants the option to elect to pursue the tortfeasor for such funding. Simply because such funding is already being paid and would continue to be available if a claimant were to choose to take advantage of it does not avail a defendant. Indeed, in Peters the claimant was at the time of the hearing living in a private care home which was being jointly funded by the local authority and the Primary Care Trust.
In this case, Ben's parents fought a long and difficult battle to obtain public funding for Prior's Court. This struggle took a predictable toll and the issue was resolved only by taking the matter to a tribunal. I am satisfied that Ben's parents' expressed wish to elect to take private funding is entirely genuine and evidences a settled intention in this regard. There is no need for me to adjudicate on whether or not their preference is reasonable. To do so would effectively reintroduce the question of mitigation of loss which was so firmly rejected in Peters.
The defendant suggests that if, contrary to its primary case, I were to find that there is a real chance that statutory funding might falter after Ben reaches the age of 19 then they would offer a capped educational indemnity. Again, this misses the point. The right of recovery against the tortfeasor in this category of case cannot be diluted by the offer of an indemnity. Of course, it would be entirely wrong for Ben to receive double recovery and his advisers have indicated that they will preclude this by the deployment of an appropriately worded indemnity from his Deputy. I will make no comment at this stage as to the appropriate form or content of any such safeguard against double recovery. That may be agreed between the parties subject to my approval or, if necessary, resolved following further argument.
In the light of my findings on this issue it would not be appropriate for Ben to be paid any sum towards the cost of potential appeals to the tribunal and this contingency figure should be deducted from the lump sum which has otherwise been agreed.
COMING HOME
Ben's parents now see him for eight weeks of the year and every other weekend. Mrs Harman has expressed a wish that he should come home more frequently and, with a full care package and appropriate accommodation would propose that he should be able to return home every weekend for the duration of his stay at Prior's Court. In contrast, the defendant suggests that as he grows older Ben will come home less rather than more frequently. Ms Douglas on behalf of the defendant has made enquiries at Prior's Court as to the usual frequency with which residents return home. On balance, I am satisfied on the evidence I have heard that Ben will continue to come home with the same frequency neither significantly more nor less than at present. In the light of my conclusion on the issue of Ben's future after the age of 25 it is entirely reasonable that there should continue to be a significant level of contact. I reject the argument that the level of contact would be likely to fall to just 21 days per year. The example of what other families choose to do overlooks the facts that very many of them will not have the facilities available to Ben when he is at home. I do, however, consider that the evidence as to his nocturnal habits does not justify a continuing element of waking night care. He wakes with relative infrequency and I am satisfied that the level of disruption is such that sleeping care would be appropriate.
AFTER BEN IS 25: THE ISSUE
There is a very significant dispute between the parties as to Ben's future after he has reached the age of 25 at which point the Prior's Court regime will cease to be available to him.
Ben's parents would like him to return home. The defendant, however, contends that he is likely then to be looked after in specialist residential care and, indeed, it would be in his best interests for him to be so.
EXPERT EVIDENCE
The proper resolution of this issue is of central importance to both parties. It is important for Ben's future and the sums of money at stake are very considerable. It was therefore disappointing that the expert evidence in some respects fell short, particularly on paper, of providing the Court with a level of assistance commensurate with the seriousness of the issue.
I would make the following points, some general and some specific to this case:
i) There is a regrettable tendency for experts to produce reports which are simply far too long. The comments made by Sir James Munby in his article on this topic in [2013] Family Law 816 are as apposite to personal injury litigation as they are to care cases:
"…too many expert reports…, are simply too long, largely because they contain too much history and too much factual narrative… I want to send out a clear message: expert reports can in many cases be much shorter than hitherto, and they should be more focused on analysis and opinion than on history and narrative. In short, expert reports must be succinct, focused and analytical. But they must also of course be evidence based."
In the experience of this Court it is not unusual for care reports, for example, in catastrophic injury cases to exceed 100 pages in length. Very often the same narrative detail can be found repeated in report after report from different disciplines. The consequences are deleterious. All this involves the parties and the Court in spending a disproportionate time reading the reports which results in an increase in costs. Furthermore, the likelihood that important points are lost in the vastness of the context in which they appear is unhelpfully increased.
ii) Against the background of longer and longer reports there is, however, little sign, in some cases at any rate, that the care and attention spent on analysis and opinion, as opposed to history and narrative, is being given commensurate attention and priority.
iii) Experts should deal with the issues raised by the other side promptly. In this case, the defendant makes a legitimate point in emphasising that neither the claimant's care expert nor educational psychologist dealt with the option of continued residential care in their reports until the joint statements and even then the matter was dealt with in an over concise way. One inevitable consequence of this was that the reasoning of the experts was only finally fleshed out in oral evidence during the hearing. This should not happen.
RESIDENTIAL OR INDIVIDUAL CARE?
The defendant points to the following particular factors in support of its stance on this issue:
i) Since Ben has been at Prior's Court he has thrived. He has made good progress. The stresses upon his parents caused by looking after him at home have been significantly relieved;
ii) By the time he reaches the age of 25, Ben will have been in a community residential care setting for many years and it would be logical and appropriate for him to continue to be looked after in a similar environment thereafter. Much of the good work achieved at Prior's Court could be undone if he were to return home;
iii) Inquiries at Prior's Court revealed a choice of organisations which would be in a position to provide high quality residential support for Ben as they had done for others before him;
iv) There is a risk that if Ben were to be looked after at home he would become isolated and lose the benefits of interacting with others of his own age and facing similar challenges;
v) As recently as September 2014, Ben's mother had told the defendant's expert educational psychologist that she did not know what the family's plans were after Ben's time at Prior's Court had come to an end. She now asserts that she will want him to come home but the reality is that parents do change their minds as children grow into adults.
The response on behalf of Ben can be summarised thus:
i) Before Ben went to Prior's Court, his parents had been struggling without the benefit of a structured environment with specially trained carers. It was thus unsurprising that he would make good progress when he transferred to Prior's Court. The proposal is that when he leaves Prior's Court he will not be returning to the same home environment in which he had lived before his admission;
ii) When Ben first went to Prior's Court his parents had the opportunity to opt for a 52 week placement. They chose, instead, to proceed with a 44 week package. This demonstrates their commitment to playing a continuing and significant part in Ben's life even at a time when the burden of caring for him without adequate support was taking its toll on their lives;
iii) The prospect of having Ben at home in twelve years time is a very different one from that which applied when he first went to Prior's Court. Ben has made progress and the regime which it is proposed would be in place would be tailor made for his needs. This would involve a team of 10-12 carers to supervise him and take him to activities. Furthermore, the accommodation available would be far more appropriate than the family home ever was.
I had the benefit of hearing from Ben's parents both of whom gave evidence at the hearing. Ben's mother said unequivocally that they now wanted Ben to be back with them after he leaves Prior's Court.
Care must be taken in cases such as this not to equiparate the preferences of relatives with the regime of care and support the cost of which should be the basis of reasonable compensation. Each case must be looked at on its own facts. There may well be circumstances in which, however strong and genuine the desire of the parents or a spouse or partner may be to have the claimant home, there are good reasons for taking a contrary course. The purpose of damages in a personal injury claim is to compensate the victim and not to accommodate the wishes of his family whatever the extent of the inevitable personal sympathy one might have for those who are left to pick up the pieces and suffer the inevitable and sustained emotional impact of serious injury to someone dear to them.
On the other hand, the wishes of loved ones are by no means necessarily irrelevant in any given case. It is to be noted, in particular, that in this case the joint report of the educational psychologists reached the following unequivocal conclusion:
"We are agreed in the final analysis the question of post 25 provision for Ben is a matter of parental choice."
It was not clear to me on the face of the document whether this view was one which was intended to apply generically or was directed towards the particular circumstances of Ben's case. Had it been the former I would almost certainly have rejected the proposition. However, when I asked Mr Baldwin, the defendant's expert, what he had intended to convey he replied that it was, on the particular circumstance of this case, his opinion that the choice of the parents coincided with the regime which he would endorse for Ben. He went on to explain that a regime which met the aspirations of the parents would be more likely to succeed than one which did not.
I can see force in Mr Baldwin's approach. Whereas Mr Reid on behalf of the claimant makes a positive case for an individualised care programme, Mr Baldwin is less convinced and, with respect to a residential regime, concluded that "…consideration should therefore be given to adult provision within this field." Mr Baldwin was less dogmatic than Mr Reid and his approach to the future was more nuanced. I consider, as I have stated earlier in this judgment, that there is force in the defendant's contention that neither Mr Reid nor Ben's care expert, Ms Harrison, gave sufficient thought in the early stages of their involvement in this case to the alternative regime proposed by the defendant.
On the other hand, the resolution of the disputes in a case like this does not depend on the results of a forensic beauty competition between experts.
Ultimately, I have reached the conclusion that, notwithstanding the deficiencies in the presentation of the expert evidence, reasonable compensation for Ben must involve funding a private regime at home. In the particular circumstances of this case I do not think that a residential solution would be reasonable.
Having heard from Ben's parents I am satisfied that their determination and enthusiasm to welcome Ben back to the family home when he leaves Prior's Court is entirely genuine. Notwithstanding the fact that the time is many years hence I have concluded that their confidence will be sustained. I bear in mind the particular fortitude with which they have coped with the stresses and strains of looking after Ben over the years as a strong measure of their dedication. I do not regard it to be illogical that Ben should move from an institutional regime to a private regime at the age of 25. His time at Prior's Court can reasonably be expected to maximise his potential and prepare him for the rest of his life to the fullest extent. This does not automatically mean that he should spend the rest of his life in institutional care as a matter of consistency.
I must also take into account the particular features of Ben's condition. His autism prevents him from forging the sorts of relationships with people of his own age which developmental problems alone would not otherwise have precluded. The advantages of a community setting are therefore in this respect far less marked in his case than those in which autism is not a feature. Furthermore, although he struggles with social interaction he has only recently started to show affection for his mother in the form of giving her hugs. This marks a major step forward and emphasises the importance of his particular relationship with her. There is nothing unusual about the fact that he will be entering his later twenties when he returns home. His physical maturity will unhappily not be matched by mental and emotional development and, in these respects, he will always be a very young child.
Perfectly properly, Ms Douglas, the defendant's care expert, entered into discussions with Prior's Court to find out what opportunities were available for those leaving at the age of 25 by way of further residential options. It is clear that these options have provided valuable resources for many of those who have left Prior's Court in the past. The criticism of the claimant's experts that they appear to have defaulted into an early assumption that an individual regime was appropriate without considering the alternatives is not without force. However, I have formed the view that the defendant's analysis takes its case only so far. A very considerable proportion of those leaving Prior's Court will not have relatives as dedicated as Mr and Mrs Harman and will not have the option of a bespoke individualised care package. But in the particular circumstances of this case I am satisfied, as was Mr Baldwin, that if I were to find, as I do, that Mr and Mrs Harman would sustain their dedication to the prospect of having Ben back home then this would be determinative of the issue.
It must be appreciated, however, that with the best will in the world the extent to which Mr and Mrs Harman would and could be expected to contribute to the care of Ben cannot continue indefinitely and I would expect such contribution effectively to terminate when both have reached the age of seventy. I accept that this is a somewhat arbitrary point but the alternative of costing for gradually reducing care over a period would simply serve to introduce complexity with no greater likelihood of predictive accuracy.
Accordingly, on the issue of individual care versus institutional care I find in favour of the arguments ventilated on behalf of Ben.
CONCLUSION
The parties have indicated that they will seek to agree the financial consequences of my ruling. In the event that such agreement cannot be reached or that any further clarification of my findings is required the matter should come back before me for further argument.
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The Honourable Mr Justice Picken :
Introduction
This is an application by Mrs Elaine Hmicho ("Mrs Hmicho") for interim injunctive relief in mandatory form. Specifically, Mrs Hmicho asks the Court to order the Defendant, Barclays Bank Plc ("Barclays"), to "restore access to and/or other services" Mrs Hmicho "is entitled to" in respect of three identified personal bank accounts which she holds at Barclays. I need not set out details of those three bank accounts as they are identified in the draft order. They consist of two current accounts, one of which is described as a Premier Account, and a deposit account described as an Everyday Saver Account. The latter has £40,068.77 in it whilst the Premier Account has a £68,800.27 balance.
The context in which this application comes to be made needs, relatively briefly, to be explained.
Background
Mrs Hmicho is a Brazilian businesswoman who is a UK resident, living in Poole, Dorset. She is married to Mr Samir Hmicho ("Mr Hmicho"). Together, they hold a number of bank accounts with Barclays. The present application, however, relates only to the three bank accounts held by Mrs Hmicho in her sole name with Barclays, and not also Mr Hmicho's Barclays bank accounts.
Mr Hmicho, a Syrian national, has been identified by the Council of the European Union as a person who has been benefitting from, or supporting, the regime in Syria. As a result, since 7 March 2015, he has been the subject of financial sanctions, and on 7 May 2015 Barclays took the step of freezing the bank accounts held by him. Also on 7 May 2015, Barclays took the decision to freeze the three bank accounts held by Mrs Hmicho, a decision which has given rise to the present application.
Financial sanctions
When I refer to Mr Hmicho being subject to financial sanctions, I need to explain in more detail what is meant by this. This I can do by drawing on the summary of the position contained in the skeleton argument of Barclays' counsel, Mr Nicholas Medcroft, at paragraph 5 onwards. Mr Andrew Legg, on behalf of Mrs Hmicho, did not, as I understand it, take issue with Mr Medcroft's summary.
The 2012 Council Regulation and the 2015 Council Regulation
In 2011 the Council of the European Union imposed asset freezing measures against certain persons identified as being responsible for the violent repression of the civilian population in Syria. The scope of the measures was subsequently widened to cover natural or legal persons and entities associated with them.
The relevant EU Regulations are Council Regulation (EU) No. 36/2012 (the "2012 Council Regulation") and Council Implementing Regulation 2015/375 (the "2015 Council Regulation"). The 2012 Council Regulation explains as follows in recital (3):
"In view of the continued brutal repression and violation of human rights by the Government of Syria, Council Decision 2011/782/CFSP provides for additional measures, namely a prohibition on the export of telecommunications monitoring equipment for use by the Syrian regime, a prohibition on the participation in certain infrastructure projects and investment in such projects, and additional restrictions on the transfers of funds and the provision of financial services."
Importantly, the restrictive measures contained in the 2012 Council Regulation include those set out in Article 14, under Chapter V ("Freezing of Funds and Economic Resources"), which states as follows:
"1. All funds and economic resources belonging to, owned, held or controlled by the natural or legal persons, entities and bodies listed in Annex II and IIa shall be frozen.
2. No funds or economic resources shall be made available, directly or indirectly, to or for the benefit of the natural or legal persons, entities or bodies listed in Annex II and IIa.
3. The participation, knowingly and intentionally, in activities the object or effect of which is, directly or indirectly, to circumvent the measures referred to in paragraphs 1 and 2 shall be prohibited."
Article 35 stipulates that the 2012 Council Regulation applies to "any legal person, entity or body which is incorporated or constituted under the law of a Member State". The 2012 Council Regulation, therefore, applies to Barclays, which is required to comply with the restrictive measures set out in it, including those contained in Article 14. It follows that Barclays is obliged to freeze "funds and economic resources belonging to, owned, held or controlled by" any individuals and entities listed (or designated) in Annexes II and IIa to the 2012 Council Regulation (Article 14(1)). It follows also that Barclays is not permitted to make "funds or economic resources… available, directly or indirectly, to or for the benefit of" any such (designated) individuals and entities (Article 14(2)).
The other matter to note at this stage is that Article 22 of the 2012 Council Regulation provides as follows:
"The freezing of funds and economic resources or the refusal to make funds or economic resources available, carried out in good faith on the basis that such action is in accordance with this Regulation, shall not give rise to liability of any kind on the part of the natural or legal person or entity or body implementing it, or its directors or employees, unless it is proved that the funds and economic resources were frozen or withheld as a result of negligence".
In addition to the individuals and entities listed (or designated) in Annexes II and IIa to the 2012 Council Regulation, other individuals and entities have subsequently been designated, including, this year, in the 2015 Council Regulation published on 7 March 2015 and dated the previous day. Recital (2) to this Regulation explains as follows:
"In view of the gravity of the situation, seven persons and six entities should be added to the list of natural and legal persons, entities or bodies subject to restrictive measures in Annex II to Regulation (EU) No 36/2012."
Accordingly, as a result of the 2015 Council Regulation, Barclays came under an obligation to freeze "funds and economic resources belonging to, owned, held or controlled by" any individuals and entities listed (or designated) in the Annex to the 2015 Council Regulation, as well as those designated in the 2012 Council Regulation. In addition, Barclays was not permitted to make "funds or economic resources… available, directly or indirectly, to or for the benefit of" any such (designated) individuals and entities in addition to those listed in the 2012 Council Regulation.
These obligations relate to all the individuals and entities listed in the annex to the 2015 Council Regulation, including the individuals identified at number 205, where the following appears:
"Samir Hamsho (a.k.a. Samer; Sameer; Hmisho; Hamchu; Hamcho; Hamisho; Hmeisho; Hemasho)".
Alongside this entry is an address at 31 Baghdad Street, Damascus, Syria and then the following under a column headed "Reasons":
"Samir Hamsho is a prominent Syrian businessman benefiting from and supporting the regime. He is the owner and chairman of Al Buroj and Syria Steel/Hmisho Steel, subsidiaries of Hamsho Trading, a subsidiary of Hamsho International, which has been designated by the Council. Appointed to the Homs Chamber of Commerce in March 2014 by the Minister of Industry. Therefore, he provides support to the Syrian regime and benefits from his connections with the regime. He is also associated with the designated entities Hamsho International, Syria Steel SA and Al Buroj Trading."
The last column states that the "Date of Listing" for this individual is 7 March 2015. This was also what was stated in a Financial Sanctions Notice issued by HM Treasury on 9 March 2015 (paragraph 6), in which reference was made (in summary form) to the individual listed at number 205 to the 2015 Council Regulation and the description set out above.
Subsequently, on 20 May 2015, Council Implementing Regulation 2015/780 (the "Updated 2015 Council Regulation") made on 19 May 2015 was published. This updated the information stated in the 2015 Council Regulation in respect of certain individuals and entities, including the individual referred to at number 205. The revised entry reads as follows – with the addition of another name ("Hmicho") at the end of the list set out previously:
"Samir Hamsho (a.k.a. Samer; Sameer; Hmisho; Hamchu; Hamcho; Hamisho; Hmeisho; Hemasho, Hmicho)."
Further information is then provided over and above the 31 Baghdad Street address, in that a date of birth is stated, alongside passport numbers for both a Syrian and a Brazilian passport, as well as two other addresses (in Poole and another address in Damascus). The "Reasons" are the same as stated in the 2015 Council Regulation.
The UK Regulations
EU regulations imposing freezing measures are directly applicable in EU Member States. As such, they are not required to be transposed into national law. However, sanctions regulations require Member States to adopt legislation providing for penalties for breaching restrictive practices. It is for this reason that the UK introduced the Syria (European Union Financial Sanctions) Regulations 2012 (the "UK Regulations"). These provide, in Regulation 2 ("Interpretation"), that "designated person" means "a person, entity or body listed in Annex II or IIa to the Council Regulation" (a reference to the 2012 Council Regulation).
The UK Regulations go on, importantly for present purposes, to provide as follows in Regulations 3, 4 and 5 (in Part 2: "Funds and Economic Resources") as follows:
"Freezing of funds and economic resources
3 (1) A person ("P") must not deal with funds or economic resources belonging to, or owned, held or controlled by, a designated person if P knows, or has reasonable cause to suspect, that P is dealing with such funds or economic resources.
(2) In paragraph (1) "deal with" means –
(a) in relation to funds –
(i) use, alter, move, allow access to or transfer;
…
…
Making funds available to a designated person
4 (1) A person ("P") must not make funds available, directly or indirectly, to a designated person if P knows, or has reasonable cause to suspect, that P is making the funds so available.
…
Making funds available for the benefit of a designated person
5 (1) A person ("P") must not make funds available to any person for the benefit of a designated person if P knows, or has reasonable cause to suspect, that P is making the funds so available.
(2) For the purposes of this regulation –
(a) funds are made available for the benefit of a designated person only if that person thereby obtains, or is able to obtain, a significant financial benefit, and
(b) 'financial benefit' includes the discharge of a financial obligation for which the designated person is wholly or partly responsible."
…".
In addition, Regulation 9 (4) is in the following terms:
"In this Regulation "frozen account" means an account with a relevant institution which is held or controlled (directly or indirectly) by a designated person."
Regulation 16 (in Part 4: "Offences") then states:
"Contraventions and Circumvention of Prohibitions
16 (1) A person who contravenes any of the prohibitions in regulation 3 to 7 and 11 to 15 commits an offence.
(2) A person commits an offence who intentionally participates in activities knowing that the object or effect of them is (whether directly or indirectly):
(a) to circumvent any of the prohibitions in regulations 3 to 7 and 11 to 15, or
(b) to enable or facilitate the contravention of any such prohibition."
Best Practices
Besides the 2012 Council Regulation, the 2015 Council Regulation and the Updated 2015 Council Regulation, as well as the UK Regulations, the Council of the European Union has also published, on 24 March 2015, a document entitled "Restrictive Measures (Sanctions) – Update of the EU Best Practices for the effective implementation of restrictive measures". That document states as follows in paragraph 3:
"The Best Practices are to be considered non exhaustive recommendations of a general nature for effective implementation of restrictive measures in accordance with applicable Union law and national legislation. They are not legally binding and should not be read as recommending any action which would be incompatible with applicable Union or national laws, including those concerning data protection."
The document then went on, in a section entitled "Designation and identification of persons and identities subject to targeted restrictive measures", to state this in paragraph 5 ("Identification of Designated Persons or Entities"):
"In order to improve the effectiveness of financial restrictive measures and restrictions on admission, and to avoid unnecessary problems caused by homonyms or near-identical names (possibility of 'mistaken identity'), as many specific identifiers as possible should be available at the moment of identification and published at the moment of adoption of the restrictive measure. With regard to natural persons, the information should aim to include, in particular, surname and first name (where available also in the original language), with appropriate transliteration as provided for in travel documents or transliterated according to the International Civil Aviation Organisation (ICAO) Standards, aliases, sex, date and place of birth, nationality, address, identification or passport number. … ".
Paragraph 8 ("Claims concerning mistaken identity") follows, stating, amongst other things, that:
"… It cannot be excluded that in some cases the funds of a person/entity who is not the intended target of the restrictive measures will be frozen, or a person excluded from the territory of the Member State of the EU, due to identifiers that match with those of the designated person/entity. … ".
Later, in a section entitled "Scope of Financial Measures", there is then this at paragraph 34:
"… Holding or controlling should be construed as comprising all situations where, without having a title of ownership, a designated person or entity is able lawfully to dispose of or transfer funds or economic resources he, she or it does not own, without any need for prior approval by the legal owner. …".
Paragraph 35 continues:
"In principle, the freezing should not affect the funds or economic resources which are neither owned by or belonging to, nor held or controlled by designated persons and entities.… However, … funds and economic resources jointly owned by a designated person or entity and a non-designated one are in practice covered in their entirety".
This is followed by paragraph 36:
"The non-designated person or entity may subsequently request an authorisation to use such funds and economic resources, which may include severing the joint ownership so that person's share can be unfrozen."
Section VI ("Funds") goes on to include (under a sub-heading, "Freezing of funds, belonging to, owned, held or controlled by a designated person or entity") the following at paragraph 45:
"All uses of, and dealing with, funds, moving and alterations such as portfolio management, and whether by the designated person or another person holding or controlling such funds, require prior authorisation. Joint ownership of the funds does not negate this requirement, even though third party property as such is not frozen by the Regulations."
Paragraph 49 (under a sub-heading, "Making funds available to a designated person or entity") then states:
"Making funds available to a designated person or entity, be it by way of payment for goods and services, as a donation, in order to return funds previously held under a contractual arrangement, or otherwise, is generally prohibited unless it is authorised by the competent authority pursuant to the relevant exemption provided for in the Regulation … ".
Barclays' Terms and Conditions
I shall come back in a moment to explain in which ways Barclays relied upon Regulations 3 to 5 of the UK Regulations in the present case. First, however, I should refer also at this juncture to Barclays' Terms and Conditions in the form of a document dated June 2014.
Section 6 of this document ("Following your instructions") states:
"As far as we can, we'll carry out your instructions accurately and promptly".
This is followed, a couple of pages later, by the following:
"Contacting you if we refuse an instruction
Unless the law prevents us, we will try to contact you as quickly as possible to tell you we haven't followed an instruction (for example, by calling you or through a message on online banking), and to explain why. You can also ask us directly why we have not followed your instruction. We'll tell you what you can do to correct any errors in the instruction or to satisfy us that the instruction came from you."
A few pages later, there is then the following:
"When we do not have to follow your instructions
The terms of this agreement mean we will generally carry out instructions if they are legal. However, we don't have to follow any instruction if:
…
- by carrying out the instruction we might break a law, regulation, code or other duty that applies to us, or it might expose us to claims from third parties
…
In addition we can refuse to follow any instruction if:
we reasonably believe that following the instruction might expose us (or another Barclays company) to legal action or censure from any government, regulator or law enforcement agency,
…".
There then follows a section (section 9) ("If something goes wrong"), in which the following is stated:
"If you have a loss you want to claim back from us
If you have any loss or damage because of something we have done or not done, then you will generally be able to claim back the loss from us. However, there are exceptions. You cannot claim back if:
you are claiming for a loss of business, loss of goodwill, loss of opportunity or loss of profit – we will not be liable for these in any circumstances
…
- we haven't followed an instruction from you for a reason we give in this agreement
…
- there was no way we could have reasonably predicted your loss when you gave us the instruction
… ".
Barclays' position on this application
I said that I would come back to the specific Regulations relied upon by Barclays to explain the position adopted by Barclays in response to Mrs Hmicho's application. Although it is probably right to say that there has been something of a shift in Barclays' position, indeed Mr Medcroft fairly acknowledged as much during his oral submissions, the position as at the time of the hearing was that reliance was placed by Barclays not only on Regulation 5 (the provision initially identified by Barclays in correspondence with Edwin Coe LLP, Mrs Hmicho's solicitors), but also on Regulation 4 and, perhaps most importantly, on Regulation 3.
In summary, Barclays considers that Regulation 3 applies because the funds in Mrs Hmicho's three personal accounts with Barclays belong to, or are owned or are held or controlled by, Mr Hmicho, a designated person, and as such Barclays is prohibited from dealing with the funds in Mrs Hmicho's personal accounts within the meaning of Regulation 3 of the UK Regulations. Barclays must, accordingly, it considers, freeze the accounts as contemplated by Regulation 3 (if not the words used in the provision itself, then in the heading to it). Barclays also considers that, were it to unfreeze Mrs Hmicho's personal accounts and release the funds in those accounts, it would be making the funds available, directly or indirectly to Mr Hmicho, or for his benefit since Mr Hmicho would thereby obtain a significant financial benefit, and that, therefore, Regulations 4 and 5 are applicable.
Barclays maintains that it has the requisite "reasonable cause to suspect" for the purposes of each of Regulations 3, 4 and 5 because of the matters set out in the witness statement dated 4 June 2015 of Rebecca Cantillon, Barclays' Head of Sanctions, Personal Banking and Mortgages, in particular in paragraphs 22 to 30: in the case of Regulation 3, that Barclays would be dealing with funds belonging to, or owned, held or controlled by, Mr Hmicho if Mrs Hmicho's accounts were to be unfrozen; in the case of Regulation 4, that Barclays would be making funds available, directly or indirectly, to Mr Hmicho if Mrs Hmicho's accounts were to be unfrozen; and in the case of Regulation 5, that Barclays would be making funds available to a person (Mrs Hmicho) for the benefit of Mr Hmicho if Mrs Hmicho's accounts were to be unfrozen.
In summary, as explained and to some degree amplified by Mr Medcroft in paragraphs 22.1 to 22.4 of his skeleton argument, Barclays relied on the fact that, with the exception of a handful of relatively modest deposits, since they were opened in 2014 all of the credits to Mrs Hmicho's personal accounts at Barclays, specifically the Everyday Savers Account (containing £40,068.77) and the Premier Account (containing £68,800.27), appear to have come directly from Mr Hmicho's own bank accounts at Barclays (bank accounts which Barclays have frozen and in relation to which no application of the sort made before me has been made).
Barclays also placed heavy reliance on the fact that, on 9 March 2015, Mrs Hmicho received into her Everyday Savers Account a payment of £90,000 and three payments of £10,000, totalling £120,000. This was followed the next day by receipt of a further payment of £4,000 into that account. In each case the payments came from Mr Hmicho's own accounts at Barclays. Moreover, as Mr Medcroft pointed out, it was at this very time that Mr Hmicho had been named as a designated person in the 2015 Council Regulation (albeit his name and details were not entirely clear), which was published on 7 March 2015 and which was followed by the Financial Sanction Notice issued by HM Treasury on 9 March 2015 to which I have previously referred.
Mr Medcroft submitted that the reasonable inference is that these payments were made to circumvent the financial sanctions which Mr Hmicho had by this time appreciated he had come under. Indeed, as Mr Medcroft pointed out, in her witness statement in support of the application, specifically in paragraph 37, Mrs Hmicho herself explained that the payments were made "given the uncertainty over whether or not Samir [Mr Hmicho] would be able to provide for his family if he was indeed sanctioned". Mr Legg submitted that there was nothing suspicious about this since all that Mr Hmicho was doing was making provision for his family. Mr Medcroft's response to this was to observe that, whether that was Mr Hmicho's motivation or not, it does not follow that Regulation 3 or for that matter Regulations 4 and 5 do not apply.
Mr Medcroft went on to refer to the fact that there have recently been substantial cash deposits paid into Mrs Hmicho's personal accounts at Barclays, referring specifically to a payment of £48,000 in cash which was made into Mrs Hmicho's Premier Account over the counter on 5 May 2015, as well as to a payment into the same account the following day in the sum of £52,000, again paid in cash and over the counter. Mr Medcroft submitted that these deposits were out of the ordinary, a point he demonstrated by reference to the bank statements which were in evidence before me and which revealed that such sizeable deposits were generally not made (albeit that the Premier Account was set up in 2014 with a £50,000 deposit made by Mr Hmicho).
Mr Medcroft also relied on the fact that there have been some recent and substantial withdrawals from Mrs Hmicho's accounts. He refers, in particular, to the fact that, on 21 April 2015, a payment out of Mrs Hmicho's Everyday Saver Account was made in the sum of £50,000 to an account in her name at National Westminster Bank Plc ("NatWest"), as well as to the fact that, on 7 May 2015, Mrs Hmicho transferred a further sum of £50,000 from her Premier Account to the same NatWest account. Mr Medcroft pointed out that these transfers are again inconsistent with past activity in relation to Mrs Hmicho's accounts at Barclays, in that there is no indication from the bank statements that Mrs Hmicho has made similar transfers previously. Mr Medcroft additionally highlighted the fact that the £50,000 transfer on 21 April 2015 came just three days after Edwin Coe LLP had received a letter from Harrods Ltd, explaining that access had been denied to a safe deposit box because of Mr Hmicho's appearance "on HM Treasury Sanctions List dated 9 March 2015". Furthermore, the 7 May 2015 transfer came the day after Edwin Coe LLP had written to the Council of the European Union, asking for confirmation that their client, Mr Hmicho, was not "the intended target" of the 2015 Council regulation. Mr Medroft submitted that the two £50,000 transfers are likely to have been attempts by Mr Hmicho to evade the effect of the sanctions, so demonstrating that the funds in Mrs Hmicho's Barclays accounts are at least controlled by Mr Hmicho, if not actually owned by him. (I note in this context that the £100,000 paid into Mrs Hmicho's NatWest account is money which remains in that account, an account which I was informed at the outset of the hearing NatWest had very recently decided should be unfrozen. Accordingly, these funds are now available to Mrs Hmicho.)
Mr Medcroft suggested that the reasonable inference to be drawn from these transactions is that the monies were intended by both Mr and Mrs Hmicho to be monies which are available to, or for the benefit of, Mr Hmicho. Mr Medcroft submitted that, in these circumstances, there is clear evidence that the funds in the accounts which are the subject of Mrs Hmicho's application belong to, or are owned or controlled by, Mr Hmicho. At the very least, he submitted, Barclays has reasonable cause to suspect that this is the case and so that, if Mrs Hmicho's accounts were to be unfrozen, Barclays would be dealing with such funds.
Barclays' concern, therefore, is that it would be committing a criminal offence were the funds to be released and the accounts unfrozen, whether under Regulation 3, Regulation 4 or Regulation 5. In this context, Mr Medcroft highlighted the fact that the offence or offences which Barclays risks committing would be an offence or offences under Regulation 16.1 of the UK Regulations. Even if that were not the case, Mr Medcroft submitted that there is a legitimate concern on the part of Barclays that it would be committing an offence contrary to Regulation 16.2, in intentionally participating in activities "knowing that the object or effect of them is (whether directly or indirectly)" to "circumvent" the prohibitions contained in Regulations 3, 4 or 5, or "to enable or facilitate the contravention of any such prohibitions".
In these circumstances, Barclays' position is that it would be wholly inappropriate for the Court to require it to do something which would render Barclays at risk of committing a criminal offence. In this context, Mr Medcroft relied on certain observations made by Longmore LJ in K Ltd v National Westminster Bank Plc [2007] 1 WLR 311 at [12]:
"… It would be entirely inappropriate for the court, interlocutorily or otherwise, to require the performance of an act which would render the performer of the act criminally liable. As a matter of discretion any injunction should be refused. "
These observations by Longmore LJ followed an earlier passage at [10] in which he said this:
"If the law of the land makes it a criminal offence to honour the customer's mandate in these circumstances there can, in my judgment, be no breach of contract for the bank to refuse to honour its mandate and there can, equally, be no invasion (or threat of an invasion) of a legal right on the part of the bank such as is required before a claimant can apply for an injunction. If that is right, there would be no issue to be tried in any later legal proceedings and any application for an interlocutory mandatory injunction has to be dismissed."
Mr Medcroft further submitted that, in any event, in the light of the recent activities on these accounts and given Mrs Hmicho's relationship with Mr Hmicho, there is an obvious risk that both of them might work together to circumvent the freezing measures which Barclays have taken. Accordingly, Mr Medcroft submitted, Barclays is entitled under its Terms and Conditions to refuse to follow Mrs Hmicho's instructions, including her instruction to unfreeze her accounts, since Barclays is entitled to refuse to follow Mrs Hmicho's instructions if it considers that it "might" by following those instructions be committing a criminal offence or if Barclays reasonably believes that releasing the funds "might" (again the word used in Barclays' Terms and Conditions) expose Barclays to legal action or censure from any government, regulator or law enforcement agency. In this respect, in addition to K Ltd v National Westminster Bank Plc, Mr Medcroft places reliance on the following passage in the judgment of David Richards J in Becker and Fellowes v Lloyds TSB Plc [2013] EWHC 3000 (Ch) at [24], albeit dealing with different trading terms and conditions:
"… It seems to me that the bank must be entitled to rely on its contractual rights if the circumstances for the exercise of those rights has arisen. It has no need to apply to the court for a freezing order. It is not in any event seeking to recover money in the account. On the evidence before the Court at the moment, it has no standing to apply for a freezing order of the conventional sort. What it does have is a contractual right to refuse to carry out a transaction if it reasonably thinks that one or more of the conditions in Condition 12.1 is or are satisfied. … ".
Mr Medcroft went on to submit that, approaching the matter by reference to the applicable principles relevant to the grant of interim mandatory relief, the Court ought not to grant Mrs Hmicho's application. Mr Medcroft's first, and primary, submission is that the Court cannot have the 'high degree of assurance' required by the authorities that at trial the injunction sought would be granted. Barclays' position, which was not disputed by Mr Legg for Mrs Hmicho, is that the Court should not be making an order which has the practical effect of finally disposing of the claim unless the court has that 'high degree of assurance'.
In this respect, I was referred to the following passage in the judgment of Lord Diplock in NWL Ltd v Woods [1979] 1WLR 1294 at 1307A-B:
"… Where … the grant or refusal of the interlocutory injunction will have the practical effect of putting an end to the action because the harm that will have been already caused to the losing party by its grant or its refusal is complete and of a kind for which money cannot constitute any worthwhile recompense, the degree of likelihood that the plaintiff would have succeeded in establishing his right to an injunction if the action had gone to trial, is a factor to be brought into the balance by the judge in weighing the risks that injustice may result from his deciding of the application one way rather the other."
I was also referred to Shepherd Holmes Ltd v Sandham [1971] 1 (Ch) 340, where Megarry J (as he then was) said this at 351H-352 A:
"Third, on motion, as contrasted with the trial, the court is far more reluctant to grant a mandatory injunction than it would be to grant a comparable prohibitory injunction. In a normal case the court must, inter alia, feel a high degree of assurance that at the trial it will appear that the injunction was rightly granted; and this is a higher standard than is required for a prohibitory injunction. … it follows that the statement in Halsbury founded on Morris v Grant 24 WR 55, namely: 'If the defendant, after express notice, has committed a clear violation of an express contract … a mandatory injunction will be granted on an interlocutory application,' is too wide. Both the case itself and the statement founded on it have to be qualified in the light of the other authorities to which I have referred … No doubt a mandatory injunction may be granted where the case for one is unusually sharp and clear; but it is certainly not a matter of course."
I was also taken to Locabail International Finance Ltd v Agroexport [1986] 1WLR 657 at 663G-664D, and asked to note the observation by Mustill LJ (as he then was) that an application for mandatory injunctive relief at an interlocutory stage "should be approached with caution and the relief granted only in a clear case".
As Mr Medcroft explained, and as agreed by Mr Legg, the position was usefully summarised by Chadwick J (as he then was) in Nottingham Building Society v Eurodynamics Systems [1993] FSR 468 at 474, as follows:
"In my view the principles to be applied are these. First, this being an interlocutory matter, the overriding consideration is which course is likely to involve the least risk of injustice if it turns out to be 'wrong' …
Secondly, in considering whether to grant a mandatory injunction, the court must keep in mind that an order which requires a party to take some positive step at an interlocutory stage, may well carry a greater risk of injustice if it turns out to have been wrongly made than an order which merely prohibits action, thereby preserving the status quo.
Thirdly, it is legitimate, where a mandatory injunction is sought, to consider whether the court does feel a high degree of assurance that the plaintiff will be able to establish this right at a trial. That is because the greater the degree of assurance the plaintiff will ultimately establish his right, the less will be the risk of injustice if the injunction is granted.
But, finally, even where the court is unable to feel any high degree of assurance that the plaintiff will establish his right, there may still be circumstances in which it is appropriate to grant a mandatory injunction at an interlocutory stage. Those circumstances will exist where the risk of injustice if this injunction is refused sufficiently outweigh the risk of injustice if it is granted. "
This summary has been approved and followed in a number of subsequent cases, including in Zockoll Group Ltd v Mercury Communications Ltd [1998] 1 FSR 354 at 366, where Phillips LJ (as he then was) expressly commended it.
Having regard to these principles, Mr Medcroft submitted that Mrs Hmicho is in no position to show a sufficiently strong case that at trial she would succeed in obtaining the injunctive (and other) relief sought. On the contrary, he submitted, the greater likelihood is that Mrs Hmicho's claim would meet with failure at trial. In this regard, Mr Medcroft highlighted the fact that Barclays' Terms and Conditions permit Barclays not to follow Mrs Hmicho's instructions merely if this "might" entail the breaking of the law or the attracting of censure from a government, regulator or law enforcement agency. In such circumstances, and bearing in mind also that under Article 22 of the 2012 Council Regulation Barclays would have immunity from liability unless it could be proved by Mrs Hmicho that Barclays had been negligent in taking the action which it has taken, Mr Medcroft submitted that Mrs Hmicho's claim has low prospects of success. Mr Medcroft further submitted that, in considering the balance of convenience, the position favours Barclays, rather than Mrs Hmicho, in that any potential inconvenience suffered by Mrs Hmicho is outweighed by the potential prejudice to Barclays in finding itself committing, or risking committing, criminal offences. Lastly, Mr Medcroft made the submission that, in any event, damages would be an appropriate remedy in the present case, and so there is no need for the grant of the interim mandatory injunctive relief which Mrs Hmicho seeks.
Mrs Hmicho's position
Mr Legg disagreed with Mr Medcroft's submissions. He described those submissions and the stance adopted by Barclays as "disappointing", "confusing" and lacking in "precision and analytical rigour" having regard to the need, certainly for the purposes of Regulation 3, to know whether it is being said by Barclays it reasonably suspects that the funds in Mrs Hmicho's Barclays accounts belong to, or are owned, held or controlled by, Mr Hmicho. Mr Legg submitted that Barclays impermissibly, and in any event unrealistically, has as its focus where the funds in Mrs Hmicho's Barclays accounts have come from (namely Mr Hmicho), and therefore what has happened in the past, rather than concentrating on the present and, in particular, Mrs Hmicho's explanations that the monies are to be used exclusively to maintain her family. In these circumstances, Mr Legg submitted that this is a case in which the injunctive relief sought is appropriate.
As to Barclays' reliance on Regulation 3, Mr Legg made a number of points. First, he pointed out that, until the Friday before the hearing, the position adopted by Barclays was, or at least appeared to be, that Regulation 5 applied, and not also Regulations 3 and 4. However, Mr Legg sensibly acknowledged at the hearing that it is open to Barclays to advance a case based on Regulation 3, notwithstanding that Regulation 3 was not mentioned until the immediate lead-up to the hearing. The reason for this is that what matters for the purposes of the present application is whether Mrs Hmicho's personal accounts should be unfrozen, and her instructions followed by Barclays, not what the position might have been at an earlier stage when the decision was taken by Barclays to freeze.
In such circumstances, Mr Legg's first point inevitably goes nowhere and I say no more about it. Mr Legg's second point is, however, both more substantive and more substantial. He submitted, as I have already mentioned, that Barclays has been very imprecise and unfocused in its reliance on the Regulations, in particular in its reliance on Regulation 3. Mr Legg submitted that there are important differences as between the concepts of "belonging to" "owned", "held" and "controlled by". He pointed out that there can be no question of the funds in the three bank accounts "belonging to" Mr Hmicho, as opposed to Mrs Hmicho, since not only are the bank accounts solely in Mrs Hmicho's name, but additionally, and importantly, the monies totalling £124,000 paid on 9 and 10 March 2015 constituted gifts by Mr Hmicho to his wife, Mrs Hmicho. In such circumstances, Mr Legg submitted, Mr Hmicho's intention being to give Mrs Hmicho funds in order to allow her to meet various family-related expenses, including the needs of the couple's children and specifically school fees, the money in the bank accounts cannot properly be said to belong to Mr Hmicho.
Mr Legg went on to submit that there is no evidence to support the proposition that the funds in Mrs Hmicho's bank accounts are "held" by Mr Hmicho, and nor is there evidence to demonstrate that the accounts are "controlled by" Mr Hmicho. Mr Legg highlighted the facts, in particular, that, although Mr Hmicho had from the time that the three accounts were opened been afforded certain abilities to do things such as on-line banking in respect of those accounts, Mr Hmicho had never actually availed himself of those opportunities, and that Mrs Hmicho has recently given instructions for Mr Hmicho's rights on her accounts to be removed and Barclays has removed them. For these reasons, Mr Legg submitted, this is not a case in which Regulation 3 can be applicable.
Nor, Mr Legg submitted, can Regulations 4 and 5 apply because these are provisions which (unlike Regulation 3) are concerned not with the freezing of bank accounts but, instead, with specific transactions and instructions given by the customer to his or her bank in the context of those transactions. Mr Legg highlighted in this regard that the order which Mrs Hmicho seeks specifically contemplates, in paragraph 2, that Barclays should be free to refuse to "execute any particular instruction in accordance with Regulation 5", and, as I understand it, Mr Legg would be content if this paragraph also included a reference to Regulation 4. Mr Legg added the observation that it is because Regulation 3 is, alone, concerned with the freezing of bank accounts that, as he put it, the "Regulation 3 hurdles are much higher than the Regulations 4 and 5 hurdles".
In these circumstances, Mr Legg went on to submit, unless Regulation 3 can be shown by Barclays to operate, the injunction sought, which requires Barclays to "restore access to and/or other services [Mrs Hmicho] is entitled to" (in essence to unfreeze her accounts), ought to be granted. Mr Legg adds that Barclays is not currently in a position to show that any instructions have been given by Mrs Hmicho which might breach Regulations 4 and 5.
Mr Legg submitted, specifically, that in relation to Regulation 4, given that the accounts with which the present application is concerned are accounts held by Mrs Hmicho alone, there can be no question of Barclays making the funds contained in those accounts "available, directly or indirectly, to a designated person" (Mr Hmicho). Mr Legg highlighted, in particular, that the bank statements exhibited to Mrs Hmicho's witness statement demonstrate that it is Mrs Hmicho (rather than her husband, Mr Hmicho) who controls the relevant bank accounts, and that she uses them for personal expenditure on herself, her children and friends, and family in Brazil. He also highlighted the fact that Mr Hmicho no longer has any powers to do anything with Mrs Hmicho's accounts, powers which, in any event, he never exercised before voluntarily giving them up after becoming a designated person. Mr Legg additionally relied on the fact that Mrs Hmicho states in paragraph 39 of her witness statement that she intends "to continue expenditure on my children, family, friends and myself" and states also that she "will not use any of funds for the benefit of my husband either directly or indirectly which may breach the restrictions imposed on my husband under EU law".
In relation to Regulation 5, Mr Legg similarly submitted that there is no foundation in the objection taken by Barclays. He submitted that there is, as he puts it, "no justification whatsoever" for Barclays to take the view that Mrs Hmicho would, by accessing the funds in those bank accounts, breach the UK Regulations by providing a "significant financial benefit" to Mr Hmicho. In this regard, Mr Legg placed reliance on R (on the application of M) v HM Treasury [2008] UKHL 26, in which the House of Lords said this at [16]:
"In a case in which a person who provides funds to someone living with a listed person knows or has reason to suspect that she will use those funds to make money or convertible assets available for his use, he may commit the offence of indirectly making those funds available to or for the benefit of the listed person. But that is no reason for assuming that anyone living with a listed person is likely to make any funds she receives available for his use, so that he can use them for the purpose of terrorism. In the case of a family living on state benefits which are carefully calibrated to provided them with no more than they need to live on, this is a wholly unrealistic assumption. She would be in a better position to provide her husband with funds if she had substantial resources of her own, but the Regulation does nothing to freeze these. … ".
Mr Legg relied on this authority in relation to both Regulation 5 and Regulation 4. He submitted that the case is instructive not only in relation to the situation where state benefits are being paid to a family, but also where the person living with the suspected terrorist (or in the present case, a designated person under the 2012 and 2015 Council Regulations) has funds (perhaps even substantial funds) of his or her own. Mr Legg pointed out that the last sentence of the passage set out above demonstrates that the proper approach, endorsed by the House of Lords, is not to assume that funds will be provided and a criminal offence thereby committed. Mr Legg submitted that this approach applies in the present case just as it did in R (on the application of M) v HM Treasury, and that Mr Medcroft's denial that this is the position is misconceived.
Mr Legg's submission was that, aside from the fact that Mr and Mrs Hmicho are husband and wife, there is insufficient evidence on which Barclays can reasonably (and so legitimately) suspect, still less conclude, that the funds in Mrs Hmicho's three Barclays accounts are funds to which Regulations 3, 4 or 5 apply. Mr Legg submitted in particular, that the bank statements which have been produced demonstrate that payments made by Mrs Hmicho from the relevant bank accounts were payments which were made for ordinary family existence, and that the only payment made by Mrs Hmicho to Mr Hmicho was a payment made on 10 April 2015 when, as Mrs Hmicho explains in her witness statement, Mr Hmicho telephoned her to ask that she make a transfer of money to a music shop in order that Mr Hmicho could purchase an electric guitar for their son.
In the circumstances, Mr Legg submitted, Barclays is obliged under its Terms and Conditions to do as instructed by Mrs Hmicho. Put differently, he submitted that Barclays has no justification, and continues to have no justification, for freezing Mrs Hmicho's personal accounts. Accordingly, Mr Legg submitted that not only is there a serious issue to be tried, applying well-known American Cyanamid principles, but that this is also, crucially given that this is an application for an interim mandatory injunction, a case in which, having regard to the relative strength of the apparent merits of the parties' respective positions, the Court can have the necessary 'high degree of assurance' that, if it were to require Barclays to restore Mrs Hmicho's banking facilities and to unfreeze her bank accounts, Mrs Hmicho would later be able to establish at trial that Barclays should, indeed, be required to do these things.
Addressing the balance of convenience and discretion issues, Mr Legg went on to emphasise that what is sought entails, as he puts it, "very little risk to Barclays", whereas Mrs Hmicho faces, again as he puts it, "a most dire state of affairs, with the most profound impact on her personal liberty and her family life". In this regard, Mr Legg placed reliance on the following passage in the speech of Lord Hope in Ahmed and others v HM Treasury [2010] UKSC 5 [2010] 2 AC 534 at [6]:
"The case brings us face to face with the kind of issue that led to Lord Atkin's famously powerful protest in Liversidge v Anderson [1942] AC 206, 244 against a construction of a Defence Regulation which had the effect of giving an absolute and uncontrolled power of imprisonment to the minister. In the case of 'Liversidge v Anderson: The Rule of Law Amid the Clash of Arms' [2009] 43 The International Law 33, 38 Lord Bingham of Cornhill, having traced the history to that judgment, said that:
'we are entitled to be proud that even in that extreme national emergency there was one voice - eloquent and courageous - which asserted older, nobler, more enduring values: the right of the individual against the state; the duty to govern in accordance with law; the role of the courts as guarantor of legality and individual right; the priceless gift, subject only to constraints by law established, of individual freedom.'
The consequences of the Orders that were made in this case are so drastic and so oppressive that we must be just as alert to see that the coercive action that the Treasury have taken really is within the powers that the 1946 Act has given them. Even in the face of the threat of international terrorism, the safety of the people is not the supreme law. We must be just as careful to guard against unrestrained encroachments on personal liberty."
Later on, in another passage relied on by Mr Legg, Lord Hope referred at [38] to the "impact on normal family life" being "remorseless and it can be devastating", before at [60] stating this:
"… There remains however the objection that the restrictions strike at the very heart of the individual's basic right to live his own life as he chooses, Collins J, in his impressive judgment, described the range of powers that it conferred on the Treasury as draconian, and the AQO as even more so [2008] 3 All ER 361, para 11. It is no exaggeration to say, as Sedley LJ did in para 125, that designated persons are effectively prisoners of the state. I repeat: their freedom of movement is severely restricted without access to funds or other economic resources, and the effect on both them and their families can be devastating. "
Lastly, at [137] Lord Hope said this:
"… The consequences of a freezing Order, not merely on the enjoyment of property, but upon the enjoyment of private and family life are dire."
Mr Legg also relied on R (on the Application of M) v HM Treasury at [15], where the following was stated by the House of Lords:
"…the Treasury construction produces a disproportionate and oppressive result. It means that anyone paying money to Mrs M (an employer, for example, if she had been in work, or even her bank) would have required a licence under Art. 2a simply because she lived with a listed person and some part of the expenditure of her own money might be for his benefit. Furthermore, the terms of the licence are such that she would be unable to spend any of her own money, however large her income, without accounting to the Treasury for every item of her expenditure. This would seem an extraordinary invasion of the privacy of someone who is not a listed person."
Mr Legg went on to submit that damages would not be an adequate remedy because having to wait for the outcome of a trial would have serious deleterious effects on Mrs Hmicho and her children, which compensation in damages would not be able to remedy. In this respect, Mr Legg referred, in particular, to the emotional and reputational damage that might result from Mrs Hmicho being unable to sustain school fee payments, or from being unable to pay for her children to undertake music lessons and other activities. Mr Legg also referred to the disruption caused to Mrs Hmicho's private and family life. Mr Legg added, by reference to certain of Barclays' Terms and Conditions as set out above, that there is a risk that Mrs Hmicho may not be able to recover fully in respect of the losses sustained by her as a result of Barclays' (alleged) breaches of contract. In this last regard, Mr Legg explains on instructions, although without being able to point to anywhere in Mrs Hmicho's witness statement where this is stated, that the freezing of her personal bank accounts with Barclays is likely to cause the loss of a business opportunity which Mrs Hmicho would otherwise have. He pointed out that, in view of the first of the exclusions of liability in the Terms and Conditions, any loss relating to this matter would, or may, not be recoverable.
Finally, Mr Legg submitted that it is no answer for Barclays to say that it is open to Mrs Hmicho to apply to HM Treasury for a licence in order to meet her basic needs, and so the present application ought to be rejected on that basis. Mr Legg makes the point that any application for a licence under Regulation 10 of the UK Regulations, assuming that an application could be made by Mrs Hmicho (as opposed to Mr Hmicho) which it appears is possible, would nonetheless take time and time is short (albeit not as short as it would have been had NatWest not taken the decision to unfreeze Mrs Hmicho's NatWest account). That said, Mr Legg was constrained to acknowledge that it would have been open to Mrs Hmicho to have made such an application, on a without prejudice basis, namely on the basis that she did not accept that the personal accounts of hers at Barclays should have been frozen at all. Accordingly, it seems to me that the time objection taken by Mr Legg is not a particularly compelling one.
More significant perhaps, in this context, is another point made by Mr Legg in relation to the ability to apply for a licence. This is that there would appear to be a degree of doubt as to whether a licence could be obtained which will permit Mrs Hmicho to spend money on private school fees, as opposed to other types of expense more obviously falling within the category of "basic needs" expenditure. This is because the 2012 Council Regulation refers in Article 16 to member states authorising release of certain funds which are "necessary to satisfy the basic needs of persons listed … and their dependent family members, including payments for foodstuffs, rent or mortgage, medicines and medical treatment, taxes, insurance premiums, and public utility charges", but no mention is made of educational fees.
Discussion and conclusions
Having considered the parties' respective submissions, I have reached the clear conclusion that this is not a case for the grant of the interim mandatory injunctive relief which Mrs Hmicho seeks. I say this for a number of reasons.
First, I am quite satisfied that the position in relation to Regulation 3 is nothing like as clear and straightforward as Mr Legg would have it. Although I stress that I should not be regarded as deciding the point at this juncture, it seems to me that it is quite impossible to have the necessary 'high degree of assurance' at this interlocutory stage that Mrs Hmicho's case concerning Regulation 3 is right and that Barclays case in relation to Regulation 3 is wrong, so as to mean that I can be assured to a high degree that Mrs Hmicho will succeed at trial with her claim for final injunctive relief. In short, this is not one of those "unusually sharp and clear" cases to which Megarry J referred in Shepherd Holmes, where it would be right to grant interim mandatory injunctive relief, the effect of which would effectively be to dispose finally of Mrs Hmicho's claim.
I bear in mind in this connection that what Regulation 3 is concerned with is Barclays either knowing or having "reasonable cause to suspect" that it is (or would be) dealing with funds belonging to, or owned or held or controlled by, a designated person. I do not see how it can realistically be suggested in the present case that the Court can have a 'high degree of assurance' that at trial Barclays will be unable to show that it has "reasonable cause to suspect" based on the material which has been put before me, as set out, in particular, in Ms Cantillon's witness statement dated 4 June 2015 and as further explained by Mr Medcroft in his written and oral submissions. Without wishing in any way to prejudge what ultimately will be a matter for trial, it seems to me that Barclays may very well be able to demonstrate at trial that it has every reason to be suspicious of what has happened in relation to Mrs Hmicho's Barclays bank accounts. I reject, in particular, Mr Legg's invitation to me to focus not on the past but exclusively the present. It seems to me that this is an unrealistic stance, which would involve Barclays (and the Court) essentially having to ignore a number of matters which, putting things fairly neutrally, call into question whether the funds in Mrs Hmicho's Barclays accounts are really quite as free from Mr Hmicho's sphere of influence as Mrs Hmicho would suggest.
The fact that money has come into Mrs Hmicho's deposit accounts from Mr Hmicho's accounts at Barclays, in sizeable amounts and at times when Mr Hmicho has found himself identified as a designated person, and then substantial sums have been paid out into an account held by Mrs Hmicho at another bank (NatWest), without this apparently having happened previously, at least at comparable levels, inevitably gives rise to some suspicion as to what role Mr Hmicho may be playing in relation to Mrs Hmicho's accounts with Barclays. I repeat that this will be a matter for trial. However, on the face of things, it seems to me to be a reasonable suspicion and, moreover, a suspicion that arises not merely by virtue of Mrs Hmicho's spousal relationship with Mr Hmicho. That said, I consider that the fact of that relationship is hardly something which it would, in any event, be right to disregard for present purposes.
I do not, in the circumstances, repeat everything that I have set out previously when describing the matters relied on by Mr Medcroft in support of Barclays' case that a reasonable suspicion arises for the purposes of Regulation 3 (and Regulations 4 and 5). In outline, however, I am satisfied that the fact that, on 9 March 2015, Mrs Hmicho received into her Everyday Savers Account a payment of £90,000 and three payments of £10,000, totalling £120,000, allied with the fact that the next day there was a further payment of £4,000 into the same account, more than amply justifies a conclusion on my part that I cannot have a 'high degree of assurance' that Barclays' suspicion is unreasonable, and so that Mrs Hmicho will obtain a mandatory injunction at trial. The more so, once it is appreciated that each of these payments was made by Mr Hmicho at a time when he had just been named as a designated person in the 2015 Council Regulation. It does not seem to me to matter that Mr Hmicho subsequently made efforts to get the Council of the European Union to say that he was not the person listed, nor that his name and details were not at this stage entirely clear. What matters is that Mr Hmicho knew that, at an absolute minimum, he was being treated as a designated person, or that that appeared to be the case, as demonstrated by the efforts to which I have referred. It was this appreciation on the part of Mr Hmicho that, quite obviously and as accepted by Mrs Hmicho, provoked the transfers.
I agree with Mr Medcroft that it is unrealistic for Mr Legg to suggest that Barclays' case that there is a reasonable inference that these payments were made to circumvent the financial sanctions which Mr Hmicho had by this time appreciated he had come under is a case which the Court can have a 'high degree of assurance' will fail at trial. In my judgment, although I stress again that I should not be taken as deciding the point once and for all since again this will be an issue for trial, it does not matter that, as Mrs Hmicho explained in her witness statement, the payments were made "given the uncertainty over whether or not Samir [Mr Hmicho] would be able to provide for his family if he was indeed sanctioned". That may very well be the reason, but, if so, I do not see how it necessarily follows that Barclays' reliance on Regulation 3 is misplaced as a result. The very fact that Mr Hmicho's immediate response to learning that he had been named as a designated person was to transfer money out of an account which he must have known would very shortly be frozen seems to me, at the very least, to call into question whether he is somebody who is willing, if he can, to get round the financial sanctions contained in the 2012 and 2015 Council Regulations, including, if necessary, by giving instructions to his wife as to what to do with her accounts at Barclays. It does not seem to me to matter that, in making the payments, Mr Hmicho was trying to make provision for his family, however understandable that motivation would (but for the financial sanctions) be.
I also take account of the subsequent substantial cash deposits paid into Mrs Hmicho's Barclays accounts at Barclays, in each case over the counter: £48,000 on 5 May 2015, and £52,000 the next day. These are substantial payments and are unusual. I appreciate that in respect of the second of these payments, Mrs Hmicho explained in her witness statement that this was a loan from Mr Hmicho's mother. As Mr Legg was at pains to point out, based on his instructions (not anything stated in Mrs Hmicho's witness statement), the same explanation applies to the first payment. However, it would not appear that any similar loan has ever previously been given to Mrs Hmicho. In these circumstances, I agree with Mr Medcroft that legitimate questions must arise as to Mr Hmicho's involvement in relation to Mrs Hmicho's Barclays accounts.
I consider that similar questions arise out of the recent and substantial withdrawals from Mrs Hmicho's accounts: the payment on 21 April 2015 in the sum of £50,000 to an account in her name at NatWest followed by a second £50,000 payment to the same account on 7 May 2015. I acknowledge that these were both payments which did not see the money leave Mrs Hmicho's coffers. However, they are out of the ordinary and their timing, in the case of the first shortly after the letter from Harrods Ltd explaining why access had been denied to a safe deposit box, and in the case of the second the day after Edwin Coe LLP had written to the Council of the European Union seeking confirmation that Mr Hmicho was not "the intended target" of the 2015 Council Regulation, calls into question what involvement Mr Hmicho had in the monetary transfers. I do not see how I can conclude, at this interlocutory stage, that Barclays' suspicion that these payments may have entailed attempts by Mr Hmicho to evade the effect of the sanctions, and entailed Mr Hmicho having control over the funds in Mrs Hmicho's Barclays accounts, is a suspicion which at trial will be determined to be unreasonable. I make it clear that, in reaching this conclusion, I have not merely made the kind of assumption which the House of Lords in R (on the application of M) v HM Treasury stated ought not to be made, namely that simply because Mr and Mrs Hmicho live together as husband and wife, Mrs Hmicho is to be regarded as making funds available for Mr Hmicho's use. I am satisfied that the evidence in this case, viewed overall, goes further than simply the fact that Mr and Mrs Hmicho are a married couple.
It follows, in my judgment, that, in view of Barclays' reliance on Regulation 3, I cannot have a 'high degree of assurance' that at trial the injunction sought would be granted. The same applies to Barclays' reliance on Regulations 4 and 5. As I see it, Mr Medcroft is right when he submitted that the Court cannot have a 'high degree of assurance' that, were Barclays to unfreeze Mrs Hmicho's personal accounts and release the funds in those accounts, Barclays would not thereby be making the funds available, directly or indirectly to Mr Hmicho, or for his benefit since Mr Hmicho would thereby obtain a significant financial benefit, for the purposes of Regulations 4 and 5. I am not persuaded, certainly at this interlocutory stage, that Mr Legg is right when he submitted that Regulations 4 and 5 do not permit Barclays to freeze Mrs Hmicho's accounts. The fact that it is only Regulation 3 (strictly its title rather than the language used in Regulation 3 itself) which refers to accounts being frozen seems to me to be unlikely to matter. I agree with Mr Medcroft that, in the present case, for practical purposes, Regulations 4 and 5, with their prohibitions on making funds available, involve freezing of Mrs Hmicho's accounts. I acknowledge that Regulations 4 and 5 can, no doubt, be concerned with specific transactions and instructions given by the customer to his or her bank in the context of those transactions. However, it seems to me that in a case such as the present Regulations 4 and 5 can also operate in a more blanket-type way. Accordingly, I am not persuaded that the carve-out contained in paragraph 2 of the order sought, by which Barclays would be free to refuse to "execute any particular instruction in accordance with Regulation 5", is very apposite. In any event, even if I am wrong in my approach towards Regulations 4 and 5, in view of the conclusions which I have reached in relation to Regulation 3, nothing turns on this point.
For these reasons, I repeat that I am satisfied that I cannot have the necessary 'high degree of assurance' that Barclays is not entitled to hold the reasonable suspicion that the funds in the accounts which are the subject of Mrs Hmicho's application belong to, or are owned or controlled by, Mr Hmicho. This is the main reason why I am not prepared to grant Mrs Hmicho the interim mandatory injunction sought by her. I can state my additional reasons more shortly:
(1) First, it seems to me that there is force in Mr Medcroft's submission that, even were it to be determined at trial that unfreezing Mrs Hmicho's Barclays bank accounts would not entail any contravention of Regulations 3, 4 or 5, given Barclays' Terms and Conditions (specifically the provisions which entitle Barclays not to follow Mrs Hmicho's instructions in circumstances where they merely 'might' involve Barclays committing a criminal offence: Articles 16.1 and 16.2 of the UK Regulations), Mrs Hmicho's case might ultimately, in any event, fail. It is at least arguable that this will prove to be the case, and as such means, as I see it, that, again, I cannot have a 'high degree of assurance' that Mrs Hmicho will prevail at trial.
(2) Secondly, having regard to the views expressed by Longmore LJ in K Ltd, I am clear that it would not be appropriate, in the circumstances, to make an order requiring Barclays to take action which would, or might, render it criminally liable under the Regulations, whether that be Regulation 3 or, for that matter, Regulations 4 or 5.
(3) Thirdly, I am clear also that the balance of convenience in this case rests very firmly on Barclays' side rather than that of Mrs Hmicho. Even if I had, therefore, not reached the conclusions which I have set out above, it seems to me inevitable that I would nevertheless not have granted the mandatory relief sought. I acknowledge completely, and sympathise with, the difficulties in which Mrs Hmicho finds herself as a result of the action taken by Barclays. However, these are difficulties which it seems to me are outweighed by the risk that, were the injunction sought to be granted, Barclays would find itself committing a criminal offence.
(4) Fourthly, I am not persuaded that damages would be an inadequate remedy. I recognise that certain of the difficulties described by Mrs Hmicho in her witness statement, and highlighted by Mr Legg in his submissions, relate to implications for Mrs Hmicho and her family which will not be compensatable by damages. I do not consider, however, that this should lead me to the conclusion that the injunctive relief sought must, therefore, be granted, in view of the conclusions which I have set out previously. In addition, I am bound to note that no reference was made by Mrs Hmicho in her witness statement to the potential lost business opportunity claim which Mr Legg, therefore, told me about on the basis of instructions, not evidence. Although I recognise that, if there were such a claim, it might be excluded by virtue of Barclays' Terms and Conditions, I am sceptical that Mrs Hmicho actually has such a claim. If she really considered that she did, I would have expected her to have made at least some reference to it in the evidence in which she has put before the Court.
(5) Lastly, as to the licence point made by Mr Medcroft, although it is quite clear to me that Mrs Hmicho could have made an application for a licence prior to making the present application to the Court, I am not persuaded that her failure to do so means, without more, that this application ought to be dismissed. In short, had I otherwise been minded to grant the interim mandatory injunctive relief sought, I would not have declined to do so on the basis that Mrs Hmicho should already have applied for a licence and her failure to do so has the consequence that, in the exercise of my discretion, an injunction not to be granted on that basis. However, nor do I consider that the uncertainty as to whether, if a licence were obtained, Mrs Hmicho would be permitted to spend money paying private school fees is a reason why the interim mandatory injunction ought to be granted. In view of my previous conclusions, it cannot amount to such a reason. That must be the case notwithstanding authorities such as Ahmed and others v HM Treasury and R (on the Application of M) v HM Treasury since in the present case I have concluded that I cannot have the requisite 'high degree of assurance' that the monies in Mrs Hmicho's Barclays accounts do not belong to, or are not owned, held or controlled by, Mr Hmicho.
In all the circumstances, Mrs Hmicho's application is refused.
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Mr Justice Nicol :
The Claimant has brought two libel claims against Independent Print Ltd ('IPL') the publisher of the Independent and i newspapers; two against AOL (UK) Ltd ('AOL') the publisher of Huffington Post UK website; and one against Evening Standard Ltd ('ESL') the publisher of The Evening Standard. Seven application notices were listed before me on 11th June 2015. In two of them, the Claimant sought to strike out or be given summary judgment in relation to certain parts of the defences filed by IPL and ESL. I adjourned those matters over to be determined at the same time as the trial of a preliminary issue presently listed for 20th and 21st July 2015. I heard the other matters and reserved my decision. After the hearing Mr Busuttil, on the Claimant's behalf, drew my attention to Hallam Estates Ltd v Baker [2014] 4 Cost LR 660. I gave directions for him to provide a short note with the submissions he wished to make on the basis of this authority and for the Defendants to respond. I received these from Mr Price and Mr Barca. Mr Busuttil submitted a note in response. I have taken all of these into account.
The Claimant is an engineer. He lives in Dubai. Between 2010 and 2012 he was married to a British Citizen, Afsana Begum ('Afsana'). In January and February 2014 the Defendants published a number of articles concerning the treatment of Afsana by her ex-husband. In some cases it is alleged that the articles continued to be available for a significant period after their first appearance. More specifically, the articles in question were as follows:
i) On 20th January 2014 AOL published an article in the Huffington Post UK by Rori Donaghy with the headline 'British Victim of Domestic Abuse Faces Prison in the UAE' ('the 1st AOL article').
ii) On 25th January 2014 IPL published an article in the Independent with the headline 'British mother Afsana Lachaux faces jail in Dubai after husband claims she kidnapped their son.' The article also appeared on the newspaper's website. It was written by Alastair Sloan ('the 1st IPL article').
iii) Another article, also written by Mr Sloan was published by IPL on the same day in the i newspaper with the headline "Kidnap" mother abandoned by UK, family say' ('the 2nd IPL article').
iv) On 6th February 2014 AOL published another article in the Huffington Post UK. This was also written by Alistair Sloan. It had the headline 'Distracted by a Big, Shiny Arms Deal – David Cameron has abandoned a British Citizen, Please Help' ('the 2nd AOL article').
v) On 10th February 2014 ESL published an article by Susannah Butter in the Evening Standard with the headline 'Dubai's a small place – he took Louis in an instant'. It was also available on the Evening Standard website ('the ESL article').
It is not necessary to say more at this stage about the content of the articles except that the Claimant alleges that they all say that he has seriously ill treated his former wife in various ways.
On 28th August 2014 Taylor Hampton on behalf of the Claimant wrote to AOL to complain about the 1st AOL article. This was some 7 months after the article had been first published. It did not mention the 2nd AOL article (published on 6th February), although Mr Taylor of Taylor Hampton has said in his two witness statements in the AOL proceedings that his firm was aware of the 2nd AOL article from mid-February 2014. AOL took down the 1st AOL article from its website about three weeks after it received Taylor Hampton's letter.
On 22nd September 2014 Taylor Hampton wrote to IPL about the 1st IPL article. It did not refer to the 2nd IPL article (the one published in the i newspaper). Mr Taylor said in his witness statement that the Claimant was not aware of the 2nd IPL article until November 2014. On 23rd September 2014 Taylor Hampton wrote a letter of complaint to ESL about its article. In late November 2014 ESL added an addendum to the online version of its article and IPL added an addendum to the online version of the 1st IPL article.
On 2nd December 2014 a claim form was issued against IPL in relation to the 1st IPL article (this is claim HQ14D05024 – 'the 1st IPL claim'). The Claim Form and Particulars of Claim were served the same day. That day as well, a Claim Form was issued in relation to the ESL article (this is claim HQ14D05025 - 'the ESL claim'). ESL was likewise served with the Claim Form and Particulars of Claim. Also on 2nd December 2014 Taylor Hampton applied for the meaning of the 1st IPL article and the meaning of the ESL article to be determined as a preliminary issue in those actions.
As I have said, it is Mr Taylor's evidence that his firm was aware of the 2nd IPL article in November 2014. Nonetheless it did not feature in the 1st IPL claim issued on 2nd December. Mr Taylor's first witness statement in the IPL proceedings says,
'At this stage[referring to 2nd December 2014], counsel and this firm took the view that we should issue proceedings in respect of the 'i' newspaper in order to protect our client's position regarding the expiry of the 1 year limitation period but that we should wait serving the claim pending the determination of meaning in the Independent action.'
On 19th January 2015 a Claim Form was issued against AOL in relation to the 1st AOL article (this is claim number HQ15D00253 – 'the 1st AOL claim'). The Claim Form and Particulars of Claim were served on AOL. It is not entirely clear from Mr Taylor's two witness statements in the AOL proceedings why the 2nd AOL article was not also included in this claim. Its existence had been discovered some 11 months earlier in February 2014. In his first witness statement in the AOL claim, Mr Taylor says '…at this stage [which seems to be after discovery of the 2nd AOL article in February 2014] we notified the Claimant which articles we were prepared to act on his behalf in relation to a conditional fee agreement. This did not include the second 'Huffington Post' article. It was agreed that we may review the position at a later date.' Mr Taylor does say that a database search on 19th January 2015 (so the same day as the first Claim Form was issued against AOL) was carried out to identify any further articles that were potentially actionable before the expiry of the 1 year limitation period and the 2nd AOL article was 're-discovered'. Elsewhere in this witness statement Mr Taylor says that the Claimant is of limited means and had to be selective in whom he sued. It is not clear whether this is intended to explain why the 2nd AOL article was not included in the 1st AOL claim or whether this is given as a reason why the Claimant did not bring proceedings against publishers other than the three whom he has sued.
On 23rd January 2015 the Claimant issued a second claim against IPL in connection with the 2nd IPL article (this is Claim Form number HQ15D0344 – 'the 2nd IPL claim'). Since that article had been published on 25th January 2014, the Claim Form was issued one day before the expiry of the ordinary limitation period in the Limitation Act 1980 s.4A. It was not then served on IPL.
On 23rd January 2015 IPL served a defence in the first IPL claim in relation to the 1st IPL article and ESL served a defence in relation to the ESL claim.
On 4th February 2015 a hearing took place before Sir David Eady to determine the issue of meanings in connection with the 1st IPL article and the ESL article. Mr Price QC for IPL and ESL said that the meanings advanced by the Claimant in those claims were not substantially disputed. However, IPL and ESL in their defences had said that if the words complained of had certain meanings they would defend them as true. There was some dispute about those meanings. Sir David Eady did therefore have to decide whether the words bore them. Sir David was not told about the 2nd IPL claim in relation to the 2nd IPL article.
On 5th February 2014 a second claim was issued against AOL in respect of the 2nd AOL article (this was claim number HQ15D00553 – 'the 2nd AOL claim'). Since that article had first been published on 6th February 2014 this was also just 1 day before the expiry of the ordinary limitation period in relation to that publication. This Claim Form was not then served.
On 17th February AOL issued an application in the 1st AOL claim seeking an order that the issue of 'serious harm' under Defamation Act 2013 s.1 should be tried as a preliminary issue. On 4th March 2015 IPL in the 1st IPL claim and ESL made a like application.
Sir David Eady gave his judgment on meanings on 11th March 2015.
Nicola Davies J. heard the applications by AOL, IPL and ESL for the trial of a preliminary issue on 18th March 2015. She was not told about the 2nd AOL claim or the 2nd IPL claim. In a decision dated 1st April 2015 she agreed that there should be the trial of a preliminary issue of the claims of which she was aware. This would include the question of serious harm and whether the claims should be stayed as an abuse of process. She gave directions for the trial of these issues which would take place on 20th-21st July.
On 11th May 2015 Taylor Hampton wrote to David Price Solicitors and Advocates ('DPSA') and said
'In January this year we discovered that your client [IPL] had published another article concerning our client in the i newspaper in similarly defamatory terms to the one complained of in the current action in respect of publication in The Independent.'
It said a protective Claim Form had been issued on 23rd January 2015 and the Claimant now intended to serve it. They asked DPSA to agree to Amended Particulars of Claim (a copy of which they enclosed) which would effectively serve for both actions against IPL. In his second witness statement, Mr Taylor has accepted that he made a mistake in this letter. The 2nd IPL article had been discovered in November 2014, not January 2015.
Taylor Hampton wrote in almost identical terms to Lewis Silkin for AOL on 11th May 2015 as well. This, too, said that the 2nd AOL article had been discovered in January 2015. That, too, was a mistake. Mr Taylor accepts that Taylor Hampton in fact learned of the 2nd AOL article in mid-February 2014.
Neither DPSA nor Lewis Silkin agreed to the course which Taylor Hampton had proposed.
The Claimant served the 2nd IPL Claim Form on 19th May 2015. By CPR r.7.5 the Claim Form must be served before midnight on the calendar day 4 months after the date of issue. Since the 2nd IPL Claim Form had been issued on 23rd January 2015, this was 4 days before the expiry of that time limit.
The Claimant served the 2nd AOL Claim Form also on 19th May 2015. That Claim Form had been issued on 5th February 2015 and so service was a little over 2 weeks before the expiry of the time in r.7.5.
On 22nd May 2015 the Claimant issued three application notices:
i) Against IPL (a) He sought to strike out parts of IPL's defence in the 1st IPL claim and a postponement of the exchange of witness statements which Nicola Davies J had directed for the trial of the preliminary issue until the strike out had been considered. (b) He sought an order allowing it to serve Amended Particulars of Claim in the 1st IPL claim. The amendments would incorporate the Claimant's claim in the 2nd IPL claim. In effect he therefore sought a consolidation of the two actions or an order that they be tried together and that there be a single, combined Particulars of Claim for the two of them, rather than separate (or parallel) Particulars of Claim in each. (c) He also sought an extension of time for serving any Particulars of Claim in the 2nd IPL claim until after the application in (b) had been decided.
ii) Against ESL He similarly sought to strike out parts of ESL's defence and postponement of the exchange of witness statements in very similar terms to the relief sought in (a) against IPL. There was no second action against ESL and therefore the relief sought in (b) and (c) against IPL was not relevant.
iii) Against AOL AOL had not served a defence and so the relief sought in (a) against IPL was not relevant. There was a second claim against AOL and so the Claimant sought the comparable relief as in (b) and (c) against AOL.
I have explained above that I ordered the strike out aspects of the application notices against IPL and ESL to be heard at the same time as the preliminary issue. I will make directions for the exchange of witness statements to take place reasonably soon. So far as I am concerned, that disposes of the relief sought in (a) against IPL and ESL.
That left the relief sought in (b) and (c) against IPL and AOL which those Defendants opposed. Before considering the arguments in relation to them, it is convenient first to complete the chronology.
On 22nd May 2015 Taylor Hampton went before the Practice Master, Master Yoxall. They sought without notice to IPL or AOL an order that the time for service of the Particulars of Claim in the 2nd IPL claim and the 2nd AOL claim should be extended until 7 days after the determination of the Claimant's applications on notice against those two defendants.
In his witness statement of 10th June 2015, Mr Taylor says,
"I informed the Master that we had just issued the Application Notices at court. I explained that these two Applications had been placed in the warned list for 2nd June 2015. I further explained that in relation to the 'i' newspaper the deadline for service of the Particulars of Claim under CPR 4.5/7.5 was the next day (Saturday 23rd May 2015), and in the case of second AOL article the deadline for service of the Particulars of Claim would almost certainly be before the hearing of the Application Notices before the court at this hearing. I therefore requested that he make the orders subsequently made. I cannot recall whether I discussed with the Master specifically whether I had put both Defendants on notice of my appearance before him, nor to the best of my recollection did he ask me. However, that must have been obvious to him given that I informed him that we had only just issued the relevant Application Notices; see the first sentence of this paragraph.'
On 2nd June 2015 IPL issued an application notice to set aside Master Yoxall's order extending time for the service of Particulars of Claim in the 2nd IPL claim. AOL issued a like application notice on 3rd June 2015 to set aside Master Yoxall's order extending time for service of the Particulars of Claim in the 2nd AOL claim.
On 4th June 2015 the Claimant issued application notices in the 2nd IPL claim and the 2nd AOL claim. He seeks orders that at the preliminary issue hearing on 20th July, the Judge should also determine any disputed issues as to meaning in the 2nd IPL and 2nd AOL claims and determine for the purposes of those claims as well whether the Claimant has suffered serious harm and/or whether the claims are an abuse of process.
The applications of IPL and AOL to set aside the orders of Master Yoxall
The parties' submissions
Mr Barca for AOL and Mr Price for IPL argue first that the Claimant was not entitled to apply without notice to Master Yoxall. They note that CPR r.7.6(4)(b) expressly allows an application for an extension of time to serve the Claim Form to be made without notice. There is no equivalent provision allowing an application for an extension of time for service of the Particulars of Claim to be made without notice. Stuart-Smith J. drew attention to the distinction in Lincolnshire County Council v Mouchel Business Services Ltd [2014] EWHC 352 (TCC) at [21]. Mr Busuttil accepted that there was this difference and that there was no specific provision for applying without notice for an extension of time to serve the Particulars of Claim. However, he submitted that the Claimant could rely on the general provision in CPR r.23.4(2)(b) which allows an application to be made without notice if this is permitted by a Practice Direction. CPR PD 23A paragraph 3 provides that an application can be made without notice 'where there is exceptional urgency'. That was the case here, they said, since the time allowed for serving the Particulars of Claim in the 2nd IPL claim would have expired on 23rd May 2015. The time for serving the Particulars of Claim in the 2nd AOL claim would have expired on 5th June 2015. There was extreme urgency in both cases.
Mr Barca and Mr Price respond by saying that there was no such urgency since, in the absence of agreement to the Claimant's proposed combined Particulars of Claim, the Claimant could simply and swiftly have issued Particulars of Claim limited in the one case to the 2nd IPL claim and, in the other, to the 2nd AOL claim. Furthermore, any shortage of time was because of the Claimant's own delay in deciding to proceed with these second claims.
Mr Barca and Mr Price also submit that the Claimant did not comply with CPR r.23.9(2) since the application notice was not served with Master Yoxall's order, nor was the evidence relied upon in front of the Master served with his order. Further information as to what took place before the Master was given in Mr Taylor's second witness statement, but that was only made on 10th June 2015, one day before the hearing of the present applications. In addition, the Claimant did not comply with CPR r.23.9(3) which requires an order made without notice to contain a statement of the respondent's right to apply to set aside or vary the order under CPR r.23.10.
More generally, Mr Barca submitted that the Claimant had stolen a march on AOL. But for the Master's order, time for serving the Particulars of Claim would have expired, the Claimant would have had to justify being granted relief from sanctions under CPR r.3.9 as interpreted in Mitchell v News Group Newspapers Ltd [2014] 1 WLR 795 (CA) and Denton v T.H. White Ltd [2014] 1 WLR 3926 (CA). The Defendants have been prejudiced therefore by his unjustified use of the without notice procedure. Mr Barca and Mr Price made wider criticisms of the pace (or rather lack of it) with which the Claimant has pursued his remedies for these publications, but it is more convenient for me to consider those later in this judgment.
In the note lodged with the Court after the hearing concluded (and to which I have referred above) Mr Busuttil submitted that Mr Barca's argument was misconceived. If an application for an extension of time is filed with the Court before the existing time expires then it remains an application for an extension, even if it is heard after the deadline has passed. The lapse of time between filing and hearing of the application did not mean the applicant now had to ask for relief from sanctions – Robert v Momentum Services Ltd [2003] 1 WLR 1577 (CA) and Hallam Estates v Baker [2014] 4 Costs LR 660 (CA). It remained the case that the applicant was invoking the power in CPR r.3.1(2)(a) to have a time limit extended. In consequence, Mr Busuttil submitted, the order of Master Yoxall was strictly unnecessary. The Claimant was in no better position because it had been made and the Defendants were in no worse a position.
Setting Aside Master Yoxall's orders: Discussion
This is largely an academic issue. Mr Taylor says that he went before the Practice Master 'out of an abundance of caution (and with the benefit of hindsight, I recognise that it might not have been necessary to do so).' His hindsight is correct. As Hallam Estates v Baker (above) shows, if an application for an extension of time is made in time, then, even if it is heard after the time limit expires, the Court will still approach the matter as an application under CPR r.3.1(2)(a). The applicant will not then have to satisfy the more stringent standards applied when relief is sought against sanctions.
Nonetheless, so far as it has any relevance, I consider that AOL and IPL were entitled to have Master Yoxall's order set aside.
It is not significant that Taylor Hampton omitted the statement of the right of the Defendants to apply to have the order set aside. It is quite correct that this should have been included - see CPR r.23.9(3), but Lewis Silkin and David DPSA are extremely experienced solicitors. They did not need to be told that they had this right. They did indeed apply to have the order set aside even though the Claimant had omitted to give them notice of this right.
There are, though, other matters of more importance.
i) As I have observed, Mr Busuttil argued that the Master had jurisdiction to deal with the matter without notice to AOL or IPL because this was a case of extreme urgency. In the case of AOL, that was far from obvious since there was about 2 weeks before the time limit for serving Particulars of Claim expired. It is true that the deadline for service of the IPL Particulars of Claim was more imminent. But in both cases, there was a dearth of evidence as to why the Claimant had got so close to the wire. In his witness statements, Mr Taylor does say that the Claimant was of limited means and needed to find out if his lawyers would act on a Conditional Fee Agreement, but he says nothing about when the decision to proceed with the 2nd AOL claim or 2nd IPL claim was taken. The Master clearly did not have the witness statement of 10th June 2015. I assume that he had available Mr Taylor's witness statements in support of his Application Notices, but they did not provide this information.
ii) Mr Busuttil relies on the extreme urgency of the situation which did not allow the application to the Master to be made on notice. There is, in addition, though, some force in the arguments of Mr Price and Mr Barca that the Claimant had a draft consolidated Particulars of Claim prepared. The Claimant knew that AOL and IPL did not consent to Particulars of Claim in that form. It would have been a relatively simple matter to cut and paste that existing draft to provide a separate set of Particulars of Claim for the 2nd AOL claim and a separate set of Particulars of Claim for the 2nd IPL claim. This could have been done swiftly.
iii) Even if Mr Taylor was justified in applying without formal notice to AOL or IPL, it is not clear why informal notification was not given to their solicitors that this was what he intended to do. The Practice Direction to Part 23A paragraph 4.2 urges litigants to do this unless the application required secrecy (which Mr Taylor's did not).
iv) Mr Taylor's witness statements of 22nd May had another difficulty. There was a conflict between what the statements said about when the Claimant had first learned of the second articles and what had been said in Taylor Hampton's letters of 11th May 2015 which were exhibited to the witness statements. Mr Taylor says in his 10th June 2015 witness statement that his letters were in error. He explains that he was ill for parts of 2014. Mistakes, of course, do happen, but the Defendants were entitled to find out what was the true position, and that only became clear with Mr Taylor's witness statement of 10th June.
v) CPR r.23.9(2) requires the party who has applied without notice to serve the application notice and any evidence in support. I am not sure if Mr Taylor went through the stage of preparing an application notice to get before Master Yoxall. Certainly none was served on the Defendants. It does not seem as though any additional evidence was filed when Mr Taylor went before the Master. It is only with Mr Taylor's witness statement of 10th June that AOL and IPL were provided with an account of what had taken place.
For all of these reasons I would set aside Master Yoxall's order. It is a separate question as to whether the Claimant should be given an extension of time for serving his Particulars of Claim. I turn to that next.
Whether time for service of the Particulars of Claim in the 2nd AOL claim and the 2nd IPL claim should be extended
The parties' submissions
Mr Busuttil reminds me that these claims were issued within the ordinary limitation period. The Claimant's position is therefore different to that in Steedman v BBC [2001] EWCA Civ 1534, [2002] EMLR 17 where the Claimant was dependent on the Court exercising its power under the Limitation Act 1980 s.32A to disapply the ordinary period of limitation. In addition, the Claimant in the present case had served the Claim Forms in both the 2nd AOL claim and the 2nd IPL claim within the 4 month period allowed by the CPR. AOL and IPL had been sent a draft of the proposed combined Particulars of Claim on 11th May 2015. What the Claimant now proposed to serve was precisely the same. In the informal sense, therefore, those Defendants had received notice of the Claimant's case within the ordinary period for service. They were in a combined form, but with causes of action which were so closely related that made good sense and was consistent with an economical and efficient way of conducting the various claims. AOL and IPL would suffer no prejudice in having the Particulars of Claim in this form. The Claimant accepted that he would still have to satisfy the test of 'serious harm' in s.1 of the Defamation Act 2013 in respect of each publication. There would be no difference and therefore no prejudice to AOL if the 1st and 2nd AOL claims were dealt with in a single Particulars of Claim and there would be no prejudice to IPL if the 1st and 2nd IPL claims were dealt with in a single Particulars of Claim.
Mr Barca and Mr Price emphasised the importance in defamation actions of swift action. Thus the Pre-Action Protocol for Defamation says at paragraph 1.4
'There are important features which distinguish defamation claims from other areas of civil litigation, and these must always be borne in mind when both applying, and reviewing the application of, the pre-Action Protocol. In particular, time is always "of the essence" in defamation claims.'
The purpose (from the Claimant's point of view) of an action in defamation was supposed to be vindication of his reputation. Yet this Claimant had not sent any letter before claim until several months after the publications complained of. If, as the Claimant now maintained, the 2nd AOL article was very similar to the 1st AOL article, no sensible reason had been advanced as to why complaint should not have been made about both at the same time and why both articles were not included in the same action. The Claimant had known about both in mid-February 2014.
According to Mr Taylor, the Claimant was unaware of the 2nd IPL article when a letter of complaint was written about the 1st article. However, he did learn of the 2nd IPL article in November 2014 and there is no good reason why that should not have been included in the 1st IPL action which was issued in December 2014.
Nor has the Claimant explained why nothing was said to Sir David Eady or Nicola Davies J about the existence of the 2nd actions when the hearings took place in front of them. The Claimant's delay in serving the 2nd Claim Forms was again inconsistent with the usual expectation that a defamation Claimant would act expeditiously. He had waited without good explanation to serve his Particulars of Claim and, in the memorable phrase of Stuart-Smith J in Lincolnshire County Council at [1], he thereby 'diced with procedural death'. His equivocation about pursuing his claimed remedies in libel was further illustrated by the Claim Form which he issued against Afsana's son (Rabbhi Yahiya) but then never served.
As to the proceedings against Rabbhi Yahiya, Mr Taylor's witness statement of 10th June 2015 says,
'[5] There is a further set of proceedings against Rabbhi Yahiya issued on 30th January 2015. However, the Claim Form in these proceedings to my knowledge has not been served…
[12]…protective proceedings in relation to Rabbhi Yahiya were issued on 30 January 2015, again to ensure that the Claimant was not statute barred. These proceedings were never served by this firm. Manleys solicitors of Chester subsequently took over from this firm in acting for the Claimant in these proceedings.'
The importance of expedition in defamation cases is emphasised by the Defendants, but, they submit, that adds force to the general proposition that the overriding objective includes ensuring that a case is dealt with expeditiously – CPR r.1.1(2)(d). The Claimant has not complied with the requirement in CPR r.7.4(2) which is designed to achieve expedition and that is a matter to be taken into account – see Totty v Snowden [2002] 1 WLR 1384 (CA) at [36]. Furthermore, the Defendants submit, before granting an extension of time for service of Particulars of Claim, the Claimant will need to provide an explanation for why they could not have been served within the existing time limit. Absent such an explanation, an extension may be refused – see e.g. Frontier Estates v Berwin Leighton Paisner [2014] EWHC 4203 (Ch) especially [4] and [8].
Mr Busuttil observes that IPL's solicitors were aware that a second Claim Form had been issued against their clients by the Claimant, as was apparent from their letter of 6th February 2015. They could have drawn this to the attention of Sir David Eady and Nicola Davies J, but they did not. Furthermore, IPL could have called for service of the Claim Form – see CPR r.7.7 and, had the Claimant not done so, IPL could have asked for the claim to be dismissed – see r.7.7(3)(a). The knowledge of Lewis Silkin (AOL's solicitors) was not quite so clear. In their letter of 8th May 2015, they had said
'Our client is aware that your client has issued proceedings regarding other publications/other parties concerning the same factual issues that form the subject matter of these proceedings; which claim forms have not been served.'
Neither in this letter nor in the witness statement of Jonathan Coad of Lewis Silkin is it explained what proceedings were being referred to, or when they acquired such knowledge. Mr Busuttil asks me to infer from Mr Coad's witness statement that it was before the hearing before Nicola Davies J. It is not necessary for me to resolve this. In principle, AOL, if it had known of the 2nd action against it, could likewise have called for service of the Claim Form.
Mr Price makes a discrete argument that the application was to serve amended Particulars of Claim (in the 1st IPL claim). The Court has power to allow amendment under CPR Part 17, but the Claimant was seeking to add a further cause of action based on a discrete publication. The limitation period had expired and the publication in the 2nd IPL article did not arise out of the same facts or substantially the same facts as gave rise to the cause of action based on the 1st IPL article. I do not accept this argument. The Claim Form relying on the 2nd IPL article was issued within the ordinary limitation period. There is not therefore a limitation defence available to IPL. The amendments to the Particulars of Claim in the 1st IPL action are simply to bring about a combined pleading which sets out the Claimant's case in one document in relation to the two articles. If the claims are consolidated (see below) there is no reason why that should not be done, and every reason why it should.
Extension of time for service of Particulars of Claim: discussion
In my judgment, there should be an extension of time for service of the Particulars of Claim.
i) As Hallam Estates v Baker (above) shows, the Claimant does not have to satisfy the criteria for relief from sanctions as set out in Mitchell and refined in Denton. The issue is whether the Court should exercise its discretion in CPR r.3.1(2) bearing in mind the overriding objective in r.1.
ii) The Claimant has not served his Particulars of Claim within the time prescribed by CPR r.7.4(2) and, to that extent he has not acted expeditiously. But it was in anticipation that that would be the case that the Claimant made the present application.
iii) I agree with Mr Busuttil that the starting point is that the Claimant has issued his second claims against AOL and IPL within the ordinary limitation period and served the Claim Forms in time.
iv) Furthermore, I consider that it is significant that the Claimant did set out his case in relation to these second claims in draft Particulars of Claim which were sent to IPL and AOL on 11th May 2015 and so before the time for formal service expired. This was not, and could not, be formal service, but it did mean that they have known since then the case he wants to advance.
v) The Defendants are entitled to say that the Claimant has not moved in relation to these second claims with the expedition which is expected of a defamation claimant (even before his failure to serve the Particulars of Claim in time). On occasions the submissions of Mr Barca and Mr Price seemed to be inviting me to conclude that these were not serious libels and/or the proceedings were an abuse. However, those are arguments which they will be able to deploy when the preliminary issue comes to be tried.
vi) In considering Master Yoxall's order, I have already observed that the Claimant's evidence is still unclear as to when he decided to proceed with these second claims. It is also unclear as to why, when AOL and IPL refused to agree to service of combined Particulars of Claim, separate pleadings were not immediately served in each of the actions. To that extent there is still no satisfactory explanation as to why an extension of time was needed. I understand that the Claimant believed that consolidation was the more economical way to proceed, but, as Mr Busuttil accepted, consolidation required an order of the Court. Serving separate Particulars of Claim did not. While the inadequacy of the explanation of the need for an extension is a factor which counts in the Defendants' favour, it is not determinative.
vii) The Claimant's method of proceeding against AOL and IPL has been unfortunate. While I pay heed to the evidence of Mr Taylor as to the Claimant's means, it is still something of a mystery as to why, if the 2nd AOL article was of so similar effect to the 1st AOL article and the 2nd IPL article was so similar to the 1st IPL article, the two articles by IPL were not both dealt with at the same time and the two articles by AOL were not dealt with at the same time. Of course, that assumes that the Claimant knew of the second articles. But Mr Taylor's 10th June 2015 witness statement makes clear that the Claimant did know of both AOL articles when the first AOL claim was issued and did know of both IPL articles when the 1st IPL claim was issued. Each article was a separate publication. As Mr Busuttil accepted in the course of the hearing, in connection with each the Claimant will have to establish that it caused him serious harm. Each can in principle be the subject of a separate claim. But the overriding objective requires the Court to deal with cases 'justly and at proportionate cost' – CPR r.1.1(1). The Claimant's chosen way of proceeding means that Sir David Eady could not deal with the meanings (if different) of the 2nd as well as the 1st IPL articles. It has meant that Nicola Davies J could not deal with the best way of proceeding with the 2nd as well as the 1st AOL and IPL articles. Although IPL knew of the existence of a second claim against it and AOL may have known of the second claim which had been made against it, primary responsibility for keeping the Court informed rested with the Claimant (whose claims, after all, these were).
viii) Nonetheless, I have concluded, weighing all of these matters together, that it would not be just to refuse the Claimant an extension of time for service of his Particulars of Claim. Subject to any further submissions which the parties may wish to make, my provisional view is that the fair way of proceeding is to allow the Claimant this relief but to require him to pay the costs of the application.
Whether an order should be made consolidating the 2nd AOL action with the 1st AOL action and consolidating the 2nd IPL action with the 1st IPL action
As the notes to paragraph 3.1.10 of the White Book make clear, consolidation cannot be done simply through the agreement of the parties: an order of the Court is required.
Mr Busuttil submits that consolidation would be consistent with the overriding objective to dealing with the cases against AOL on the one hand and IPL on the other economically. It will mean that only one set of pleadings is necessary in each of that pair of actions.
Mr Barca argued that consolidation was neither necessary nor desirable. As a result of the Claimant's efforts in relation to the second actions against AOL and IPL the time table for the exchange of witness statements for the preliminary issue trial had already been put back. The resolution of the preliminary issue in relation to the 1st AOL article is likely to point the way for how the same issue will be determined in the 2nd AOL claim. Consolidation could be considered after that.
It is sufficient for me to say that, now that I have agreed to extend time for service of the Particulars of Claim, I agree with Mr Busuttil on this matter. Combined Particulars of Claim and consolidation seems the sensible way to proceed.
Whether orders should be made for the preliminary issues due to be tried to extend to the like issues in the 2nd AOL claim and the 2nd IPL claim
Mr Busuttil argues that if the 2nd AOL and the 2nd IPL claims are to continue, it would obviously be convenient and economical for the Judge hearing the preliminary issue in July 2015 to decide whether the publications relied on in those claims had (as the Claimant contends) no different meanings from those in the 1st AOL and 1st IPL claims respectively. Likewise, it be sensible for the Judge who will anyway be determining whether the 1st AOL and the 1st IPL claims satisfy the 'serious harm' test and whether they are an abuse of process should conduct the same exercise in relation to the 2nd AOL and 2nd IPL claims. These extra tasks would only marginally extend the time estimate for the hearing. That trial date would not therefore be jeopardised.
Taylor Hampton had proposed this course in their letters to the Defendants' solicitors of 11th May 2015 and it was only through inadvertence that this relief had not been sought in the application notices filed on 22nd May.
No separate objection to this relief was advanced by Mr Barca or Mr Price (separate, that is, from their opposition to an extension of time for service of the Particulars of Claim and consolidation). I agree that this makes obvious sense.
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Introduction
This is a claim by a mobile network and telecommunications distribution company for Orange and T-Mobile (now 'Everything Everywhere' ['EE']) against one of its former dealers for specific and/or cumulative repudiatory breaches of contracts and a counterclaim by him for wrongful termination of them.
The Claimant alleges that the customer service provided by the Defendant ultimately led to a 'Do Not Deal Notice' ['DND Notice'] against him being issued by EE whereon they were obliged to terminate his dealership.
The Defendant contends that, apart from two isolated incidents, he was otherwise not in any breach of his contracts.
a. As to the first incident, involving a customer called White on 10th March 2011, when a DND Notice was threatened, he contends that the breach was waived and the Claimants are estopped from relying upon it;
b. As to the second incident, when the DND Notice was invoked on 30th November 2012, involving a customer called Parkhurst on 13th & 14th November 2012, he contends that the breach was not serious, either on its own or as part of a cumulative series of any other breaches, including the incident involving White, so as to be of a repudiatory nature thereby entitling the Claimant to terminate their agreements with him.
Parties
The telecommunications industry is highly lucrative & competitive and heavily regulated by Ofcom. As with financial services, customer service is the subject of much regulatory scrutiny by the Regulator; poor service can lead to referrals to the Regulator and large fines being imposed and damage to the brand of the service provider. Orange is one of the leading reputable telecom service providers in UK.
Mainline initially worked exclusively for Orange, but from late 2010 also worked for T-Mobile, following the acquisition of Orange and T-Mobile by Everything Everywhere ("EE").
Mr Chaddah (trading as 2-Way Communications) was a remote (i.e. 'cold call') dealer for Mainline, promoting the mobile phone networks of Orange and (from late 2010) T-Mobile to business customers from around May 2009 until Mainline's purported termination on 5th December 2012.
Contracts
The relationship between Mainline and Mr Chaddah was governed by series of interlocking agreements concerning his activity as a dealer and his rights to receive payment for his work:
a. The Dealer Terms and Conditions – Orange Products and Services (the "Orange Terms") setting out Mr Chaddah's main obligation to provide marketing services to Mainline, and containing various detailed provisions governing the parties' relationship more generally;
b. The Dealer Terms and Conditions, T-Mobile Products and Services ("the T-Mobile Terms"), were similar in effect to the Orange Terms but relating to Mr Chaddah's conduct as a dealer promoting T-Mobile, rather than Orange;
c. The Dealer Terms & Conditions for the Supply of Marketing Goods and/or Services (the "Marketing Terms") providing for Mainline to support Mr Chaddah's marketing activities by providing him with goods, services and financial support;
d. The Data Share Agreement ("DSA") containing obligations governing the detail of Mr Chaddah's marketing campaigns, and numerous provisions relating to confidential data;
e. The Revenue Share Agreement ("RSA") dealing with Mr Chaddah's right to receive payment from Mainline in exchange for his marketing services ; and
f. The Advance Payments Agreement ("APA") providing for Mr Chaddah to receive advance payments upon signing up a customer to the relevant network.
The parties agree that only (a) 'Orange Terms', (e) 'RSA' and (f) 'APA' above, are relevant to the Claim and Counterclaim and the following in particular.
Under the Orange Terms:
a. 'General' under Clause 14.12, Mr Chaddah owed obligations to Mainline to 'operate a complaints procedure (incorporating any recommendations or requirements notified from time to time by Mainline and/or Orange) and [to] fully investigate and take all reasonable steps to resolve complaints, whether raised directly by customers or indirectly through Mainline and/or Orange…";
b. 'Mandatory Orange' , under Clause 15:
i. Mr Chaddah owed obligations 'to use reasonable … endeavours to promote the products and services of Orange and procure customers for the services' Clause 15.1.1 and to 'co-operate with Mainline and comply with its reasonable directions, particularly with regard to standards and quality of promotion and service' Clause 15.1.2
ii. Mainline were 'entitled to terminate this appointment immediately if required to do so by Orange for any reason or the Buyer is in breach of this agreement' Clause 15.5.
Under the APA and RSA, it was common background that Mr Chaddah was 'appointed by Mainline as an Orange stockist to market, promote and sell the produces and provide subscribers for the services'. ..
The RSA contains a 'Termination' section that includes:
a. Clause 6.2: 'Mainline may terminate this Agreement immediately on written notice to the Dealer if (6.2.1) the dealer has breached any of its obligations under the Agreement or Mainline's Terms and conditions of business from time to time'.
b. Clause 6.5 '… Value Share Payments shall immediately cease on termination of this Agreement'.
The 'supplemental' APA contains an 'Advances' section that includes:
a. Clause 3.3 'All Advances shall be repayable by the Dealer to Mainline …'
b. Clause 3.4 'Mainline shall be entitled to offset the Total Value Share Payments and commissions payable by Mainline to the Dealer in respect of subscribers in any month against all and any repayments of Advance due to Mainline from the Dealer in that month and Mainline shall in addition at all times have the right to set-off any monies due to the Dealer against any sums or balance owed by the Dealer to Mainline.'
c. Clause 3.5 'Mainline may reclaim in full or in part any Advance that has been paid to the Dealer which relates to revenue which is subsequently not paid by the Subscriber to Orange for any reason'.
Breach
On 30th November 2012, Mainline received a DND notice from EE concerning Mr Chaddah. This meant that Mr Chaddah could no longer legally deal with EE customers and products or realistically continue as a dealer for Mainline. Accordingly, Mainline notified Mr Chaddah in writing on 6th December 2012 of this and of their termination of their agreements with him.
The reason for the DND Notice can be gleaned from an email chain sent on 15th November 2012 by Dave Timmis, National Account Manager of EE for indirect sales, to Mainline (Victoria Tomlinson, Ruth Talbert and Kevin Oakley): alleged threatening behaviour towards two customers following a probationary period for improvement of his customer relations performance. One of the customers, Paul Parkhurst, was recorded at 'retailer feedback' at EE as having complained to EE that he had been receiving 'abusive texts & phone calls from Dee at Two way on a daily basis threatening to get bailiffs to his door' so that he 'feels very threatened'. The other, Lee Coulton, alleged Mr Chaddah was 'being abusive and threatening with charges'. '
Angela Howey, Head of Business Operations in the customer team of EE, is recorded in her e-mail of 14th November 2012 at 15.39 hrs as being 'very concerned' to read of this behaviour. Understandably, she stated 'this is totally unacceptable and needs to be picked up as a matter of urgency as we would not expect any of our customers to be treated in this way. I believe we need to also question why we would have this type of dealer supporting our customers'.
A review of the available transcripts of landline phone calls (NB Mr Chaddah's mobile calls were not recordable) with both Messrs Parkhurst and Coulton do not reveal any abuse or improper threat by Mr Chaddah but, in my judgment, the texts sent to Mr Parkhurst manifestly do so.
In the afternoon of Tuesday 13th November 2012, Mr Chaddah sent a barrage of 26 texts to Mr Parkhurst over a period of two and quarter hours i.e. one every five minutes. This was followed the next afternoon (after Mr Parkhurst had already complained to Orange as he had indicated to Mr Chaddah he would) by a further 11 over a period of two and a third hours i.e. one every 12 minutes.
Individually, the Claimants submit that 10 of these are rude, threatening and abusive in particular:
a. 'I will personally make you receive the maximum amount of charges possible, have a nice day won't you'
b. 'WHAT DON'T YOU UNDERSTAND … '
c. '… you are trying to avoid paying with these immature tactics … you either pay this or we send it to the recovery team where the charges will be higher and you will have adverse credit against your name for up to 5 years'
d. 'You don't get it do you, this isn't going to court and keep your recordings they are no use to anyone.'
e. GO AWAY PAUL'
f. Why do you keep texting me, we have concluded our business and will be paid within 24 hours from the debt team, you won't be laughing when you see what they bill you for, now please let's be mature and stop this immature texting ..'
g. 'you're an abusive and aggressive man …'
h. Hahahaha your small fish and we both know you don't have any recordings wake up and smell the coffee'
i. Blah blah blah, ciao'
j. 'What part of DO NOT TXT ME DON'T YOU UNDERSTAND, go and boar someone else'.
In his witness statement of 27th January 2015, Mr Chaddah contends that Mr Parkhurst was abusive towards him both in texts and phone calls concerning a bill for £300 Mr Chaddah was seeking to raise against him, whereas he was 'professional' and 'polite' in his responses. Despite having access to the text messages, his sworn testimony in paragraph 78 states in contradiction to them that:
'I initially sent polite text messages in response, then did not respond at all.'
In paragraph 79, he continues:
'It was clear to me that I had behaved professionally throughout, and that this was simply an attempt by Mr Parkhurst to avoid paying his bill'.
After he had been told of his termination by Mr Chandler on 6th December 2012 that EE considered that 2 Way Communications did not meet the standards required of an EE dealer in a number of respects, particularly in reference to customer service, he still considered:
'I did not think that I had done anything wrong in relation to the incident involving Mr Parkhurst and I certainly did not think that the incident justified terminating 2 Way Communications as a dealer'.
At trial, he accepted that 'looking back now I think I did something wrong' by persisting in responding to Mr Parkhurst's undoubted abusive arguments about his bill.
The approach of the fact finding judge to evidential discrepancies between recent and sworn witness statements prepared with the help of lawyers and contemporaneous electronic stored information ['ESI'] evidence now prolifically and readily available through the electronic disclosure process has recently been analysed by Leggatt J. in Gestmin SGPS S.A. v. Credit Suisse (UK) Limited [2013] EWHC 3560 (Comm).
'An obvious difficulty which affects allegations and oral evidence based on recollection of events which occurred several years ago is the unreliability of human memory.
While everyone knows that memory is fallible, I do not believe that the legal system has sufficiently absorbed the lessons of a century of psychological research into the nature of memory and the unreliability of eyewitness testimony. One of the most important lessons of such research is that in everyday life we are not aware of the extent to which our own and other people's memories are unreliable and believe our memories to be more faithful than they are. Two common (and related) errors are to suppose: (1) that the stronger and more vivid is our feeling or experience of recollection, the more likely the recollection is to be accurate; and (2) that the more confident another person is in their recollection, the more likely their recollection is to be accurate.
Underlying both these errors is a faulty model of memory as a mental record which is fixed at the time of experience of an event and then fades (more or less slowly) over time. In fact, psychological research has demonstrated that memories are fluid and malleable, being constantly rewritten whenever they are retrieved. This is true even of so-called 'flashbulb' memories, that is memories of experiencing or learning of a particularly shocking or traumatic event. (The very description 'flashbulb' memory is in fact misleading, reflecting as it does the misconception that memory operates like a camera or other device that makes a fixed record of an experience.) External information can intrude into a witness's memory, as can his or her own thoughts and beliefs, and both can cause dramatic changes in recollection. Events can come to be recalled as memories which did not happen at all or which happened to someone else (referred to in the literature as a failure of source memory).
Memory is especially unreliable when it comes to recalling past beliefs. Our memories of past beliefs are revised to make them more consistent with our present beliefs. Studies have also shown that memory is particularly vulnerable to interference and alteration when a person is presented with new information or suggestions about an event in circumstances where his or her memory of it is already weak due to the passage of time.
The process of civil litigation itself subjects the memories of witnesses to powerful biases. The nature of litigation is such that witnesses often have a stake in a particular version of events. This is obvious where the witness is a party or has a tie of loyalty (such as an employment relationship) to a party to the proceedings. Other, more subtle influences include allegiances created by the process of preparing a witness statement and of coming to court to give evidence for one side in the dispute. A desire to assist, or at least not to prejudice, the party who has called the witness or that party's lawyers, as well as a natural desire to give a good impression in a public forum, can be significant motivating forces.
Considerable interference with memory is also introduced in civil litigation by the procedure of preparing for trial. A witness is asked to make a statement, often (as in the present case) when a long time has already elapsed since the relevant events. The statement is usually drafted for the witness by a lawyer who is inevitably conscious of the significance for the issues in the case of what the witness does nor does not say. The statement is made after the witness's memory has been "refreshed" by reading documents. The documents considered often include statements of case and other argumentative material as well as documents which the witness did not see at the time or which came into existence after the events which he or she is being asked to recall. The statement may go through several iterations before it is finalised. Then, usually months later, the witness will be asked to re-read his or her statement and review documents again before giving evidence in court. The effect of this process is to establish in the mind of the witness the matters recorded in his or her own statement and other written material, whether they be true or false, and to cause the witness's memory of events to be based increasingly on this material and later interpretations of it rather than on the original experience of the events.
It is not uncommon (and the present case was no exception) for witnesses to be asked in cross-examination if they understand the difference between recollection and reconstruction or whether their evidence is a genuine recollection or a reconstruction of events. Such questions are misguided in at least two ways. First, they erroneously presuppose that there is a clear distinction between recollection and reconstruction, when all remembering of distant events involves reconstructive processes. Second, such questions disregard the fact that such processes are largely unconscious and that the strength, vividness and apparent authenticity of memories is not a reliable measure of their truth.
In the light of these considerations, the best approach for a judge to adopt in the trial of a commercial case is, in my view, to place little if any reliance at all on witnesses' recollections of what was said in meetings and conversations, and to base factual findings on inferences drawn from the documentary evidence and known or probable facts. This does not mean that oral testimony serves no useful purpose – though its utility is often disproportionate to its length. But its value lies largely, as I see it, in the opportunity which cross-examination affords to subject the documentary record to critical scrutiny and to gauge the personality, motivations and working practices of a witness, rather than in testimony of what the witness recalls of particular conversations and events. Above all, it is important to avoid the fallacy of supposing that, because a witness has confidence in his or her recollection and is honest, evidence based on that recollection provides any reliable guide to the truth.'
Further back in time in the pre-digital era (but still as extant today), the court looking for credible and reliable evidence upon which to make findings of fact follows the approach enunciated by Lord Pearce in the House of Lords in Onassis v Vergottis [1968] 2 Lloyds Rep 403 at p 431:
''Credibility' involves wider problems than mere 'demeanor' which is mostly concerned with whether the witness appears to be telling the truth as he now believes it to be. Credibility covers the following problems. First, is the witness a truthful or untruthful person? Secondly, is he, though a truthful person telling something less than the truth on this issue, or though an untruthful person, telling the truth on this issue? Thirdly, though he is a truthful person telling the truth as he sees it, did he register the intentions of the conversation correctly and, if so has his memory correctly retained them? Also, has his recollection been subsequently altered by unconscious bias or wishful thinking or by over much discussion of it with others? Witnesses, especially those who are emotional, who think that they are morally in the right, tend very easily and unconsciously to conjure up a legal right that did not exist. It is a truism, often used in accident cases, that with every day that passes the memory becomes fainter and the imagination becomes more active. For that reason a witness, however honest, rarely persuades a Judge that his present recollection is preferable to that which was taken down in writing immediately after the accident occurred. Therefore, contemporary documents are always of the utmost importance. And lastly, although the honest witness believes he heard or saw this or that, is it so improbable that it is on balance more likely that he was mistaken? On this point it is essential that the balance of probability is put correctly into the scales in weighing the credibility of a witness. And motive is one aspect of probability. All these problems compendiously are entailed when a Judge assesses the credibility of a witness; they are all part of one judicial process. And in the process contemporary documents and admitted or incontrovertible facts and probabilities must play their proper part."
The absence of evidence can be as significant as the presence of it. Arden LJ in Wetton (as Liquidator of Mumtaz Properties) v. Ahmed and others [2011] EWCA Civ 61 stated:
'11. By the end of the judgment, it is clear that what has impressed the judge most in his task of fact-finding was the absence, rather than the presence, of contemporary documentation or other independent oral evidence to confirm the oral evidence of the respondents to the proceedings.
There are many situations in which the court is asked to assess the credibility of witnesses from their oral evidence, that is to say, to weigh up their evidence to see whether it is reliable. Witness choice is an essential part of the function of a trial judge and he or she has to decide whose evidence, and how much evidence, to accept. This task is not to be carried out merely by reference to the impression that a witness made giving evidence in the witness box. It is not solely a matter of body language or the tone of voice or other factors that might generally be called the 'demeanour' of a witness. The judge should consider what other independent evidence would be available to support the witness. Such evidence would generally be documentary but it could be other oral evidence, for example, if the issue was whether a defendant was an employee, the judge would naturally consider whether there were any PAYE records or evidence, such as evidence in texts or e-mails, in which the defendant seeks or is given instructions as to how he should carry out work. This may be particularly important in cases where the witness is from a culture or way of life with which the judge may not be familiar. These situations can present particular dangers and difficulties to a judge.
In my judgment, contemporaneous written documentation is of the very greatest importance in assessing credibility. Moreover, it can be significant not only where it is present and the oral evidence can then be checked against it. It can also be significant if written documentation is absent. For instance, if the judge is satisfied that certain contemporaneous documentation is likely to have existed were the oral evidence correct, and that the party adducing oral evidence is responsible for its non-production, then the documentation may be conspicuous by its absence and the judge may be able to draw inferences from its absence'.
I follow this guidance in my assessment of the evidence in this case.
Both the internal inconsistencies in Mr Chaddah's evidence and the external with contemporaneous e-mail coupled with the lack of coverage of key issues in the case mean that little reliance can be placed upon his lengthy written evidence (2 statements; the first is 95 paragraphs long and the second is 23) which is mainly a self congratulatory exposition of his talents and value as a salesman who is always in the right when dealing with customers: the customers are almost always wrong. It does not deal properly with the issues of the inadequacy of his customer service system or the Parkhurst incident. His evidence is effectively an attempt to rewrite history or, at best a gloss on the truth. He gave his evidence confidently bordering on arrogance yet pleasingly, as one might expect from a successful salesman, but at times became choked with emotion as he did when confronted with the cold reality of the transcript of his rantings with customers, White and Parkhurst and that his superiors had to give him special support in his dealings with their customers in order to protect them all from potential dismissal by Orange that would have been a disaster for the businesses of both the Claimants and the Defendant. In my judgment, he displayed a lack of self awareness and objectivity when giving his evidence or in his preparation of his case. I place no reliance on his written or oral testimony save where it is supported by contemporaneous electronic or paper evidence.
In closing on his behalf, Mr Hoskins conceded that Mr Chaddah 'had fallen short of an acceptable standard of conduct' and now 'accepted' he had thereby been in breach of his contracts. However, in summary, Mr Hoskins argues that:
a. Whilst Mainline's termination of the Orange terms and the DSA was lawful, the purported termination of the RSA was not; the breach of Clause 6.2.1 was not of a repudiatory kind.
b. The breach should be seen as a single episode whilst under extreme provocation in isolation from previous conduct.
I reject these arguments:
a. The breach was serious and sustained in nature and duration with radical consequences leading, justifiably in my judgment, to a DND notice being issued by Orange upon Mainline after the customer complained to Orange. Deliberately bombarding one of Orange's aggrieved customers with offensive texts (as I find them to be) over two sustained periods of time is an appalling standard of customer service – quite the opposite of what Orange and Mainline contractually, and quite rightly, expected.
b. The six agreements have to be seen as having a common purpose of a dealership agreement to promote only EE products by Mainline and by Mr Chaddah. Mr Chaddah accepts the lawful termination of the Orange terms and DSA arising from the breach; it would be perverse to treat the (now admitted breach) of the RSA differently.
c. The breach has to be seen in the context of the customer service that Mr Chaddah was obliged to provide. Whilst Mr Chaddah was, by all accounts, a very successful seller of Orange products, his customer service was poor in quality. This began with a simply dreadful episode on 10th March 2011 when he left a voicemail on a customers phone when he is recorded as saying:
'James you dick, give me a call back when you get this you f******g prick you f******g come back me or I'll come down to your […] close ill come to your f*****g address mate I'll [….] close and I'll f*****g rip your head apart. F*****g ring me up you c**t or I'll come and f*****g smash your f*****g face in you f*****g pussy'.
Not surprisingly, a DND Notice was threatened on this occasion but, having been caught out, Mr Chaddah begged for a second chance in e-mails dated 15th March 2011:
'If Orange would like to put me on a trial period to keep an eye on me for 6 months to make sure this sort of behaviour is never repeated, then I would be more than happy to agree to that. I can guarantee this has never happened before and will never happen again'.
and 16th March 2011:
'I cannot thank you enough for fighting my corner and sticking by my company and I. I have learned a real big lesson, not just in business but about me as a person. I have no intention of ever putting my business or mainline through such an ordeal like this EVER again. Rest assured we will continue to put large volumes of Quality business through Mainline for years to come.'
d. The breach was almost immediately after the conclusion of an Action Plan period between 26th April and 1st November 2012 aimed at ensuring Ofcom compliance with Regulation GC23 that included 'not be aggressive… or contest the customer'. Mr Chaddah from the compliance knew that 'failure to comply with Ofcom GC23 will lead to termination of your Everything Everywhere stockist status'. This was reinforced by Kevin Oakley, the Business Development Manager of Mainline, writing to him on 1st May 2012 warning him 'if Everything Everywhere and/or Mainline become aware of any further serious issues, your connector code will be revoked'. It was further reiterated on 9th August 2012 when Ruth Talbert, the sales manager in charge of the Action Plan emailed following a conversation with Mr Chaddah '1. All calls both to customers and Orange must be done from landlines which are recorded. 2. Instance of 'silent' calls to 345 or Orange must stop. 3. Inappropriate unprofessional conduct will not be tolerated including inappropriate language. 4. All calls made to customers must ensure that it is clear that they are dealing with 2Way Communications'
e. The Action Plan and the breach was after a series of 8 warnings by Kevin Oakley (who gave evidence in support of Mr Chaddah, his continuing business colleague now elsewhere) about customer complaints and his dealings with them during 2011 following the White incident on 10th March 2011 that demonstrate that, whilst the White incident was of itself 'water under the bridge' if nothing else happened and waived to that limited extent, it was not an unequivocal waiver of that breach beyond that. Mr Oakley, whilst loyal and sympathetic to Mr Chaddah, not surprisingly could not demur from this. Mr Chaddah's future as a dealer was very much under probation pending improvement of his customer relationship performance and complaints procedures. The evidence produced about specific customer complaints (identified as Green, Borek, Steel, Hill, Corder, DJ Plumbing and Hadjithemistou) show that whilst Mr Chaddah may be correct that the complaints (or referrals as they were known) were unjustified, they could not be objectively assessed by Orange or Mainline because he did not deal with them properly or because there was no, or insufficient recording of them. Mr Chaddah's approach was to argue with the customer as he had with Mr White and Mr Parkhurst.
f. I accept the evidence given by the Claimants' witnesses, Gail Hollinshead and Victoria Tomlinson, upon these breaches – they provide a narrative consistent with and behind the e-mails and letters exchanged during this period. They give the picture of Mr Chaddah as very driven, ambitious and gung ho taking things personally and the pattern of behaviour of being argumentative and rude to customers not dealing with complaints efficiently in accordance with prescribed procedures. Whilst the volume of complaints was not great in terms of ratio to sales, their handling was poor. Victoria Tomlinson, said 'The Defendant is the only dealer that I am aware of that required this level of continued support and assistance. A significant amount of man power was dedicated to his account and to him in order to help him iron out the problems that were being experienced'.
g. In my judgment, all these instances are part of a common theme with the hallmark of a lack of emotional intelligence on the part of Mr Chaddah who always believes he is right and others are wrong. In marketing the most important thing is to retain existing customers by servicing them well and not aggravating them when they are rightly or wrongly aggrieved, rather than have to go out cold calling to find new ones already serviced by others. Hence the mantra 'the customer is always right'. Apart from the breaches concerning Messrs White and Parkhurst, there is no suggestion that the others alone or cumulatively would be breaches of a repudiatory nature but coming before the breach concerning Mr Parkhurst they and the one involving Mr White add to the seriousness of the breach concerning Mr Parkhurst that Orange and Mainline, rightly in my judgment, regarded as being of a repudiatory nature. It struck to the root of the relationship between all the parties governed by each of the interlocking contracts not to have an adequate complaints procedure; arguing and being rude to customers is fundamentally flawed.
In my judgment, the DND Notice issued by EE was a rational and inevitable decision based upon good solid evidence of the very poor customer relations performance of the Defendant over a long time culminating with a repeat of appalling rudeness to one of their customers immediately after a period of probation. The reason for the DND Notice was a serious breach of a repudiatory nature. Accordingly, I find that all the contracts were lawfully terminated on 5th December 2012.
The Claim succeeds on liability in respect of breach of contract as pleaded and the Counterclaim against it of £473,608.19 fails.
Damages
The Claimants allege that they suffered 'loss and damage equating to £281,232.99 plus interest'. This was calculated as the amount owed of £316,518 in outstanding advance payments made to Mr Chaddah less the amount outstanding for Value Share Payments of £44,446.73 at the time of termination.
The RSA states unequivocally under Clause 6.5 '… Value Share Payments shall immediately cease on termination of this Agreement'. 'Value Share payments' means the bonus payable by Mainline to the Dealer which represents a proportion of revenue received by Orange in respect of each Subscriber'. The Claimants are not due to credit the Defendant with any more 'bonus' payments for work he may have carried out during the currency of the agreements.
The APA is a 'Supplemental Agreement' to the RSA and the 'Advance' means 'the recoupable lump sum payment payable by Mainline to the Dealer in respect of Connections' and Upgrade Connections made during the term'. The 'Term' means 'the period from 1 July 2010 unless and until terminated in accordance with Clause 6 of the RSA'.
Clause 3 'Advances' states that 'all Advances shall be repayable' (3.3) and prescribed how that may be occur and be achieved. One situation identified under 3.5 is that 'Mainline may reclaim in full or in part any Advance that has been paid to the Dealer which relates to revenue which is subsequently not paid by the Subscriber to Orange for any reason.'
The Claimant concedes in its Counter Schedule that it has received £473,608.19 from EE paid by its customers in respect of Connections and Upgrade connections due to Mr Chaddah made during the Term- £192,235.20 greater that the net loss and damage of £281,232.99.
In my judgment, an objective reading of Clause 3 gives the Claimant the right to recoup advances where insufficient Connections have been made or paid for by the customer or EE during the Term leaving Mainline facing a loss on its advance; it does not entitle the Claimant to make a profit out of the Defendant's breach nor the right to penalise him for his breach.
The Claimant has therefore proved no contractual loss or damage as had been claimed.
His Honour Judge Simon Brown QC
Specialist Mercantile Judge
Birmingham Civil Justice Centre
Clerk: Helen Foster
[email protected]
Tel: (0121) 681 3033
Website: http://www.justice.gov.uk/courts/rcj-rolls-building/mercantile-court
1.st June 2015
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JUDGE STEPHEN DAVIES INTRODUCTION
There are two applications before the court today. The first in time is an application by the defendant, Barclays Bank Plc, to strike out or to obtain summary judgment on the claim, in short on the ground that the claims advanced are barred by a general release contained in a Settlement Agreement made between the claimant, Mr. Gary Ronald Marshall, and the defendant. The second in time is an application by Mr. Marshall to amend the particulars of claim, in order to provide further details of the existing claims and to advance a number of substantial new claims.
I have had the benefit of detailed written submissions supplemented by oral submissions from counsel for the claimant, Mr. Hurst, and counsel for the defendant, Mr. Pope.
Although there may be some scope for argument as to the precise nature of the test, it is common ground that the court, when considering both the defendant's application for strike out and summary judgment and the claimant's application to amend, has to consider the merits of the claims as already advanced and as sought to be advanced, and to consider whether or not they are reasonably arguable. The court cannot conduct a mini-trial in relation to disputed issues of fact, or complex questions of law and fact, nor should it strike out properly arguable claims in relation to new or developing areas of jurisprudence. Equally, however, if the court is satisfied that the claim sought to be raised simply has no real prospect of being successfully advanced, then the court should grasp the nettle and either strike out the claim or refuse permission to amend, as the case may be.
In so far as the application to amend is concerned, the court must also exercise its discretion. Helpful guidance as to the proper approach to take to amendment applications was given recently by Coulson J in CIP Properties v .Galliford Try [2015] EWHC 1345 (TCC) at para. 19. In particular, at sub-para.(d), he drew attention to the need to consider whether or not the proposed amendments are sufficiently particularised and sufficiently clear.
Mr. Pope has raised four matters for my consideration. First he has submitted that the draft amended particulars of claim is not properly pleaded and the application to amend should be refused on that ground alone. Second, and perhaps most significantly, he has submitted that not just the existing claim but also the further proposed claims are all barred by the general release contained in the Settlement Agreement, which simply cannot be overridden, so that none of the claims can go further. Third, even if that is not the case, he submits that none of the proposed further claims have any real prospect of success and permission to amend should be refused on that basis. Finally, he raises arguments in relation to delay and prejudice in relation to the exercise of the discretion to amend.
All of those arguments are strenuously contested by Mr. Hurst for the claimant. I will deal with the general release argument first; the question as to whether or not the proposed new claims have real prospects of success second; the adequacy of the proposed amended particulars of claim as a statement of case third; and the other matters relating to discretion fourth.
SUMMARY OF THE EXISTING AND DRAFT AMENDED PARTICULARS OF CLAIM
I should begin by saying something, briefly I hope, about the existing particulars of claim. In short, Mr. Marshall complains about the alleged mis-selling of an interest rate hedge product, also referred to as a swap, which was entered into in March 2008. The existing particulars of claim is pleaded, not by Mr. Hurst, on what may fairly be described as conventional grounds, with which the Mercantile Court has become very familiar. Thus it is said that the Bank made material misrepresentations, was guilty of breach of contractual duty and negligence, was guilty of breaching various regulatory requirements, in particular those commonly referred to as the COBS rules (the Conduct of Business Sourcebook rules), and that as a result Mr. Marshall has suffered loss and damage.
The proposed draft amended particulars of claim, in addition to maintaining and re-pleading those existing claims in substantially more detailed form, seeks to add a number of further allegations.
First there is an overriding allegation that the swap contract is vitiated by being contrary to public policy because, it is said, of the alleged widespread, deliberate and, as Mr Hurst did not shy away from characterising it in oral submissions, dishonest conduct of the Bank in contravening all of the regulatory procedures to which it was subject, and in failing to comply with what are said to be regulatory conditions precedent to the validity of the swap contract, with the consequence that the swap contract is rendered void. It is said that in those circumstances the claimant is entitled to recover everything paid by him in relation to the swap as a claim in unjust enrichment or restitution.
Second, it is said that the Bank was guilty of deceit as regards the sale of the swap, so that Mr Marshall is making a clear allegation of dishonesty against the Bank.
Third, there is an allegation in relation to the conduct of a review undertaken by the Bank in relation to the potential mis-selling of this product. It is said that the Bank failed to undertake any proper review in accordance with its regulatory obligations. By way of further very recent amendment it is said that the Bank failed in undertaking this review to comply with further regulatory rules in relation to dispute resolution, known for short as DISP.
SUMMARY OF FACTUAL MATTERS
Before dealing with the arguments it is necessary to refer, I hope briefly, to some of the relevant key events and documents.
In August 2007, Mr. Marshall borrowed £1 million from the Bank on a variable interest rate loan agreement in order to buy a commercial property in Hertford as an investment, which he intended to lease to his company. The agreement made provision for the Bank to have security over that property.
It is his case that from December 2007 through to March 2008, there were various dealings between him and the Bank in which the Bank sought to persuade him to enter into an interest rate hedge product to cover the risk of interest rates rising over the 22 year period of the loan agreement. It is said that, in reliance upon the matters about which complaint is now made, he entered into the swap agreement on 28th March 2008.
It is also said that the Bank included contractual provisions in relation to the swap agreement which had the effect of preventing Mr. Marshall from complaining that the relevant regulations had not been adhered to in terms of the sale of the product, which are challenged by way of a specific allegation of breach of COBS 2 in the draft amended particulars of claim.
It is common ground that Mr. Marshall ran into financial difficulties with the result that towards the end of 2011 there were discussions between the Bank and Mr. Marshall involving a proposal for a parting of the ways, with Mr. Marshall, effectively, refinancing the loan through other means and redeeming the security over the property.
I have been taken to some of the relevant correspondence by both parties. There is no need for me to refer to it all. What is relevant for present purposes is that it is clear that before the settlement was entered into Mr. Marshall was fully aware that he had a potential claim against the Bank for mis-selling of the hedge. That appears for the first time in an email sent by him on 19th December 2011, where he said, in terms, that he was currently awaiting solicitor's instructions to mounting a challenge for a mis-sale of the hedge.
Again, when negotiations resumed in March 2012, it is clear that the Bank was saying that any deal should be on the basis that the hedge should be terminated, and that any settlement should include settlement of any claims in relation to the selling of the hedge. It is clear that all discussions proceeded on both sides on the basis that there should be a full and final settlement and a complete break, which would include the Bank giving up its security over the property.
By way of final illustration, I refer to an email from the Bank to Mr. Marshall and his representative on 26th March 2012 where it was said, in clear terms, that the Bank would need to formally break the interest rate derivative product as part of this process and that Mr. Marshall would be asked to sign paperwork giving authority to cancel the swap and waiving the right to challenge the swap at a future date. At that stage Mr. Marshall was also telling the Bank that he would be involving solicitors in relation to the proposed settlement agreement.
The Settlement Agreement itself was produced on 20th April 2012. There are two agreements, one with Mr. Marshall personally and one with his limited company, both in virtually identical terms. The former provided that the Bank was prepared to accept payment of £950,000 in full and final settlement of the debt that Mr. Marshall and his company owed to the Bank and any issues, complaints and/or claims they may have against the Bank, subject to the terms and conditions set out below. It was provided that once Mr. Marshall had obtained the refinance monies he would pay that £950,000 as the settlement amount, whereupon the Bank would accept it in full and final settlement of the indebtedness and the Bank would release its security.
Sub-paragraph (C)(2) is the key clause in this case, and it provides as follows:
"You [Mr. Marshall] agree to release and waive irrevocably any claims, complaints or rights of action against the Bank in relation to this matter and your banking relationship and arrangements with the Bank, and you covenant not to bring any such claim, complaint or action against the Bank. You agree that acceptance of these terms will constitute full and final settlement of your claims against Barclays, whether direct or indirect, foreseen or unforeseen, contingent or actual, present or future, and which arise, or may arise, out of or are in any way connected with this matter."
As Mr. Pope for the defendant submitted, that is a clause drafted in extremely wide terms and it is one which Mr. Marshall was apparently willing to accept. He signed and returned the agreement some time on 26th April 2012.
Mr. Hurst has drawn my attention to a further email sent a couple of months later, on 26th June 2012, by which the Bank was chasing Mr. Marshall for payment and making some suggestion that, if he did not do so, they would withdraw the agreement. However that did not happen, and the agreement was subsequently completed, as I shall explain later.
But in the meantime, on 29th June 2012, the Financial Services Authority (FSA) issued a statement, which was publicised, under which they announced that they had found on investigation over the last few months what they described as serious failings, including a range of poor sales practices, in the sale of interest rate hedging products to some small and medium sized businesses. They also announced that they had reached agreements with four banks, including Barclays, to provide appropriate redress, which was to be in the form of a review exercise which was to be undertaken by each of the banks and was to be scrutinised by an independent reviewer at each bank.
I have been shown an agreement entered into between the FSA and Barclays at that time, under which Barclays agreed to implement this review exercise. As is common ground, it was said to be a confidential document, and was not published at the time. It also specifically excluded any right for third parties to seek to enforce any term of the agreement. It included, in Annexes A and B, detailed provisions as to how the review was to be undertaken by Barclays.
There is an issue between the parties which, if this case went to trial, would have to be resolved, as to whether or not, and if so to what extent, the Bank was aware of the FCA investigation, its results, and that as a result it was likely to have to enter into some commitment to undertake a mis- selling review exercise at the time that it entered into the Settlement Agreement with the claimant. For present purposes, I proceed on the basis that the claimant has at least an arguable prospect of showing that the Bank was aware of these matters at that time, towards the end of April 2012.
It is clear that Mr. Marshall experienced some difficulty in finding the money payable under the Settlement Agreement, which led to some further discussions, and in January 2013 he entered into a supplemental agreement with the Bank under which they agreed to accept the reduced sum of £900,000 in full and final settlement, but with no other material amendment to the terms of the Settlement Agreement.
On 18th February 2013 the Bank wrote to Mr. Marshall a letter headed, "Review of the sale of interest rate hedging products to Gary Ronald Marshall on 28th March 2008", saying that they had determined that he was within the scope of the review exercise agreed with the FCA. They provided some explanation as to the review process, saying that they had asked Eversheds, the well-known solicitors, to carry out what was described as an impartial fact find regarding the sales of these products. They said that Eversheds would welcome the opportunity to hear from Mr. Marshall and, under the heading "Next Steps", said: "Should you wish to take this opportunity to have your sales reviewed, please complete and return the attached form". They also asked him to indicate whether or not he was willing to talk to Eversheds about the matter. Mr. Marshall signed that form on 19th February 2013, indicating that he would like Barclays to review the sale of the product and was willing to talk to Eversheds about it. On that basis the review then began.
It is also clear from the agreement between the Bank and the FSA that one of the undertakings that the Bank gave to the FSA was that they would not seek to foreclose on or adversely vary existing lending facilities to any customer during the course of the review process save in exceptional circumstances. The Bank therefore wrote a further letter to Mr. Marshall, which he signed and returned on 15th March 2013, referring to the fact that the Settlement Agreement would involve the refinancing of the lending facilities including the security over the property and the swap, explaining the undertaking given by the Bank to the FSA, and saying,
"We confirm that your agreement to the refinance of the property detailed above and the breakage of the swap is without prejudice to your right should you be eligible under the FSA criteria to be included in the ongoing interest rate swap review and to receive any redress which may be determined as appropriate arising out of that review."
Mr. Marshall signed and returned the letter to say that he accepted it on that basis.
On 21st November 2013, the Bank wrote to Mr. Marshall to provide him with the outcome of the review, saying that they had considered all available documentation and materials, and compared what took place against the relevant regulatory standards, and had concluded from this that Barclays met the necessary standards at point of sale and, therefore, that no redress was due. They also said that the well-known firm of accountants, KPMG, acting as an independent reviewer, had provided oversight of the review and having considered it had confirmed that the decision was appropriate.
It does not appear that Mr. Marshall took any steps to challenge that decision at the time although it is now his case, as I have already intimated, that the review process suffered from wholesale flaws making the process wholly unsatisfactory.
Finally, these proceedings were commenced in March 2014, on the cusp of the expiry of the limitation period. Following service of the Claim Form and Particulars of Claim the application to strike out was made in September 2014. After some delay the amended particulars of claim were provided in February 2015, and after the Bank's solicitors had indicated that they were not willing to consent the action was transferred to the Mercantile Court in May 2015 and duly listed for a 1 day hearing today.
THE GENERAL RELEASE
The first question is, as I say, the impact of the general release in the Settlement Agreement. I have been referred by both counsel to the authoritative authority in this regard, which is the decision of the House of Lords in Bank of Credit and Commerce International SA v. Ali and Others [2002] 1 AC 251. Lord Bingham of Cornhill gave the first speech, with which Lord Browne-Wilkinson agreed. Lord Nicholls and Lord Clyde gave concurring speeches, Lord Hoffmann dissenting in the result.
In short, in that case certain ex-employees of the insolvent bank, BCCI, sought to bring counter- claims for what were referred to as stigma damages, and were met with a defence that in the course of prior employment claims they had signed a standard form of agreement which contained a general release of "all claims of whatsoever nature that exist or may exist", and thus in wide terms, although not quite so wide terms as the current covenant. The House of Lords was satisfied that, since at the time when the general release was given neither the bank nor the ex-employees could realistically have supposed that a claim for stigma damages was a possibility, the parties could not have intended that the release should apply to those claims.
In para.9, Lord Bingham said:
"A party may, at any rate in a compromise agreement supported by valuable consideration, agree to release claims or rights of which he is unaware and of which he could not be aware, even claims which could not on the facts known to the parties have been imagined, if appropriate language is used to make plain that that is his intention."
But in para.10, he went on to say:
"But a long and in my view salutary line of authority shows that, in the absence of clear language, the court will be very slow to infer that a party intended to surrender rights and claims of which he was unaware and could not have been aware."
He then referred to those authorities in support of that proposition.
In para.19, he held that on a fair construction of the document it could not be concluded that the parties intended to provide for the release of rights and the surrender of claims which they could never have had in contemplation at all, and that if they had sought to do so, they should have used language which left no room for doubt.
Lord Nicholls of Birkenhead in para.32 also considered a further argument, under the heading "Sharp Practice", where he said this:
"Materially different is the case where the party to whom the release was given knew that the other party had or might have a claim and knew also that the other party was ignorant of this. In some circumstances seeking and taking a general release in such a case, without disclosing the existence of the claim or possible claim, could be unacceptable sharp practice. When this is so, the law would be defective if it did not provide a remedy."
That not being the case there, as he said in para.33, he did not need to consider it further.
Lord Hoffmann also considered that further argument and in para.69 of the judgment made some suggestions as to the legal basis by which such an argument could be raised. There is no need for me to refer to those observations in the course of this judgment, since I am satisfied that for present purposes it may be said to be at least arguable that the claimant can seek to take advantage of that principle, whatever its precise legal basis.
It follows that there are two issues to be considered in this case. The first is the proper construction of the general release; the second is the possible application of the "sharp practice" argument.
As Mr. Pope says in relation to the former, the general release in the Settlement Agreement is extremely wide. It is wider than the clause in BCCI v. Ali and it expressly includes not just existing claims but also foreseen and unforeseen claims, present and future claims, and claims which arise or may arise out of or are in any way connected with "this matter". He submitted that in circumstances where the factual matrix demonstrated quite clearly that Mr. Marshall was aware that he did have a potential claim against the Bank for mis-selling of the hedge, it could not conceivably be said that such a claim, which comprises all of the existing and proposed claims sought to be raised by him in these proceedings, is not covered on an objective construction of that clause.
Mr. Hurst submitted that the court might reach a different conclusion with better knowledge of the factual matrix. He also submitted that it was at least arguable that the words "this matter" did not include claims of the sort which have now been advanced, including claims in relation to the review. However it seems to me that I am in a perfectly good position today to reach a final conclusion as to the proper construction of that clause, because no-one has suggested nor is there any evidence that might indicate that there are any other matters relevant to the factual matrix which could cast any further light on the proper construction of the general release. It also seems to me to be clear, and I have no doubt whatsoever, that the clause does, upon its proper construction, include all of the claims which the claimant seeks to advance, both the existing and the proposed claims.
Mr. Hurst seeks to rely upon the "sharp practice" argument identified by Lord Nicholls. In short, his argument is that the Bank was aware at the time of the Settlement Agreement of the FSA investigation, that it had reached conclusions adverse to the Bank as regards its sales practices, and that some form of review procedure would be set up. His argument is that since the Bank knew this, and also knew that Mr. Marshall did not, it was under an obligation to disclose these matters to Mr. Marshall, so that Mr. Marshall could decide what to do and, in particular, could decide whether or not to await the results of that review exercise before deciding whether or not to enter into the Settlement Agreement, in circumstances where it included the swap being broken and his accepting a settlement based upon his being liable to the Bank under the swap.
However in my judgment this argument seeks to ascribe an importance to the review which it simply cannot have on any objective analysis of matters. The reality, in my judgment, is that the review was no more than that. It was an obligation, agreed on as between the FSA and the Bank, under which the Bank agreed to carry out a review of mis-selling of swap products and, where that was found to have taken place, to make proposals for compensation. That, in my judgment, is not materially different in substance to the right that Mr. Marshall already knew that he had, which was a right to make a claim, whether by complaint or by litigation or by both, against the Bank in relation to the mis-selling of the hedge product to him. He knew that he had that right. He had talked about involving solicitors to bring such a claim on his behalf. It was never suggested that any settlement involved his accepting liability in relation to the swap. The settlement involved a substantial writing off by the Bank of monies which it claimed that it was owed, including therefore any liability, actual or contingent, in relation to the swap. He knew this, and in those circumstances to seek to argue that the Bank could or should have been obliged to inform him about the potential of the review before entering into this agreement is really, on any view, a hopeless argument in my judgment.
Moreover, even if I was wrong about that, the only consequence of such an argument succeeding would be that Mr. Marshall would have been entitled to insist on his right to participate in the review, if the Bank had said "You are not entitled to do so because of this settlement". In fact, of course, the Bank never sought to prevent him from participating in the review, and he did so. In my judgment, it cannot possibly be argued that the consequence of any non-disclosure could be such as to discharge the Settlement Agreement in its totality, or in some way operate as a general abrogation of the general release. So I reject the argument for that reason as well.
The further argument raised by Mr. Hurst rests upon the document of 15th March 2015, which he submitted was a waiver of the right given by the Bank, not just in relation to the review itself but in relation to any claim or cause of action or complaint arising out of or in connection with the review. In my judgment, that is simply untenable as an argument. It clearly is not an argument that can come from the wording of the document itself, which makes it clear that all that the Bank was doing was making it clear to Mr. Marshall that notwithstanding the implementation of the Settlement Agreement it would not seek to prevent him from participating in the review at some later date should he want to do so.
It does not seem to me that it could conceivably be argued that on an objective construction of that document the Bank was also saying that this limited waiver could have any further or wider impact and could cover any further or wider rights, such as the claim which is sought to be made in this case, to seek to make complaints about the conduct of the review process.
The final argument advanced by Mr. Hurst was to contend, by reference to his public policy argument, that if the original swap agreement itself was void because it was illegal or otherwise contrary to public policy[1], then both parties were operating under a mistake when they entered into the Settlement Agreement, the mistake being that they both thought that the swap was not void, and that on that basis the Settlement Agreement could and should be set aside. Although I applaud the ingenious nature of the argument, it seems to me to be a distinction without a difference, and to elevate the public policy argument to a significance which it does not have. That is because again, in my judgment, the fundamental point is that Mr. Marshall knew at the time that he had the right to make a claim which would involve, one way or another, a challenge to the current position whereby the swap was apparently enforceable and binding on him, and the precise mechanism of how he might choose to make that challenge good in legal terms really did not matter. Fundamentally, what he cannot credibly contend in my judgment is that he is entitled to avoid the general release by saying in effect, "I may have known in general terms that I was entitled to challenge the swap, but, because I did not know the specifics as to how I could do so, nor did I know just how bad the Bank's conduct was in relation to the mis-selling of the swap, both to me and to others, I can escape from the wide terms of this release".
The end result, in my judgment, is that all of the claims currently made in this case and also those sought to be made are barred by the Settlement Agreement and cannot be pursued, and there is no realistic prospect of arguing to the contrary. I am satisfied that in such circumstances the existing claim must be struck out, and summary judgment entered against the claimant in relation to the claim, and also that permission to amend should be refused, because the proposed new claims have no real prospect of success for the same reason.
ARE THE PROPOSED NEW CLAIMS ARGUABLE?
I should however also deal, albeit more briefly, with the alternative arguments in relation to the new claims.
I refer to the public policy and condition precedent arguments. In my view there is really no proper basis for advancing these arguments in this case on the basis of the proposed pleading. In my judgment it cannot credibly be said by the claimant that, even if there was - which I am prepared to assume for the purposes of the argument but without deciding that is at least arguable - a wholesale systematic, deliberate, even dishonest, non-compliance with the regulatory regime in relation to the entry into this and other swap agreements, the consequence is that the swap agreement itself is made void for illegality or otherwise being contrary to public policy. Whilst I appreciate that such a conclusion might at first blush be said to produce an unfair or unreasonable result against Mr. Marshall if the facts are as Mr. Hurst contends, the answer in my judgment is that the law holds that illegality or other cases of conduct contrary to public policy results in agreements being held void only in very limited circumstances. In a case such as the present, where one party is saying that his entry into an agreement was accompanied by and would not have occurred without widespread breaches of the applicable regulations by the other, that is not one of those circumstances which could result in the agreement being invalidated on grounds of public policy. Instead it would afford the claimant, if he was right, the ability to have that agreement unravelled on one or more of the bases which Mr. Marshall would have been entitled to advance in this case, but for the settlement.
It seems to me that illegality or other breach of public policy simply does not avail the claimant in this case. The reality is that either a claimant in the position of Mr. Marshall can rely on breaches of regulations which he can establish afford him a civil remedy, which here he could do so but for the effect of the general release, or he cannot, because the statutory framework does not, on its true construction, allow him to do so, and no amount of repeated reference to wholesale, systematic, deliberate or even dishonest breach of the regulations will alter that fundamental position.
Furthermore, even if I was wrong about that, it appears to me, despite what Mr. Hurst submitted, that the effect of what is now s.138E(2) of the Financial Services Act 2012, which specifically provides that no such contravention - that is a contravention of a rule made by a regulator - makes any transaction void or unenforceable, quite clearly means that it is simply not possible to advance an argument that, even in the case of alleged wholesale, widespread, systematic, deliberate and even dishonest breaches of the regulations, the underlying transaction is rendered void. I was, I am afraid, not remotely convinced by Mr. Hurst's appeal to what he characterised as the golden rule approach to statutory construction, whereby one can adopt a non-literal meaning to a statutory provision in such cases.
CLARITY / PARTICULARITY
The further reason why I would not have granted permission to amend is that it seems to me that the proposed new claim in relation to public policy, despite the detail with which it is sought to be pleaded, is not in fact pleaded with sufficient clarity or particularity in its key ingredients. What it ought to do is to set out in clear terms what the claimant's case is by reference to what he contends are the actual breaches and their individual and cumulative impact on the circumstances in which the swap agreement was entered into, so that the Bank and the Court can see the wood for the trees. Instead, what the claimant has done is to plead in general non-specific terms a compendious list of every regulation which he can think of was or might have been breached, without properly stating what the individual and cumulative impact of all that was. That is not, in my view, a proper basis for making such a serious allegation and, therefore, I would have refused permission on that basis as well. It would follow that the claim of unjust enrichment would fall away on the same basis.
So fact as deceit is concerned, the difficulty with the current pleading, in my judgment, is that it simply does not provide the necessary particulars as to what it is said was not true, or the basis upon which it is said that the Bank knew that it was not true or was reckless as to its truth. In those circumstances, it does not seem to me that it could possibly be right to grant permission to make such a serious allegation of deceit in the absence of proper particularisation.
So far as the challenge to the review is concerned, I heard considerable argument about whether or not it could arguably be said that the review process amounted to a contract as between Mr. Marshall and the Bank, as opposed to a non-contractual review process undertaken by the Bank pursuant to an agreement with the FSA and with the consent of Mr. Marshall. If the latter, then the case based on contractual obligation simply could not run. It seems to me to be plain from the documents to which I have referred that it could not possibly be regarded as contractual as between Mr. Marshall and the Bank. It also seems to me that, despite Mr. Hurst's attempt to argue that Mr. Marshall gave consideration for the Bank agreeing to undertake the review by forbearing to sue, in fact on any true analysis there was no consideration which could give rise to contractual relations in this case. The reality is that Mr. Marshall was simply the beneficiary of the review. He did not give anything away nor did he suffer any detriment nor agree to do anything different as a result of being afforded that review. Therefore, the contractual argument simply cannot run, in my judgment.
Seeking perhaps to anticipate this difficulty, during the course of yesterday Mr. Hurst as I have said produced an alternative further pleading seeking to rely upon DISP as a basis for contending that there was a right to challenge the results of the review. It seems to me at first blush to be implausible that breaches of what appears to be a procedural dispute resolution regulatory structure could allow the claimant to bring what is tantamount to an appeal against the review decision, but since Mr. Pope had not had the opportunity to deal with the argument and it is not necessary for me to express a concluded view on the point it does not seem to me that it would be right to do so. That will have to be a decision for another case or another court.
EXERCISE OF DISCRETION
So far as the other arguments are concerned, it seems to me that the length of the particulars of claim would not in itself be a reason for refusing permission, because such a concern could be addressed by a more appropriate and less draconian sanction. It also seems to me that if a properly particularised case had been made for claims which I had otherwise found to have a real prospect of success, then it is unlikely that I would have shut out the claimant completely from bringing them. However, given the conclusions that I have reached, these issues do not arise and, as I have said, on the conclusions that I have reached, the claim must be struck out and summary judgment entered, and the application to amend must be dismissed.
Finally, before concluding this judgment, I should note that I have not been addressed on the question as to whether the proposed new claims involve the addition of a new cause of action which does not arise out of the same or substantially the same facts as the existing causes of action and which are, as at the date of this application, statute-barred.
MR POPE: I am very grateful. The only issue I think is costs. Of course, the normal rule is that at the conclusion of a hearing that has lasted no more than one day, although I suppose that, technically, we are slightly longer than one day, the court will assess costs summarily unless there is a good reason not to do so.
JUDGE DAVIES: I think that the slight difficulty in this case, as I understand it, is that as a result of the order that I have made you will be seeking an order for payment of the entire costs of the case.
MR. POPE: Correct.
JUDGE DAVIES: I have not seen the schedule of costs, but it may be - I will hear argument about it, if necessary - that if as I assume they are relatively substantial, the more appropriate course would be to send them off for detailed assessment but to make an interim payment on account of those
costs.
MR. POPE: May I just turn my back?
JUDGE DAVIES: Yes.
MR. POPE: My Lord, yes, we would be content to take that approach. We do, as I mentioned, have a schedule of costs for the entire action. Hopefully, your Lordship has a copy.
JUDGE DAVIES: Mr. Hurst, I assume that you acknowledge that, as a result of my judgment, your client will have to pay the costs of the claim.
MR. HURST: Yes, and the provisional view that you formed, that it should go off for detailed assessment rather than the halfway house of summary assessment today and the remainder in another fashion, I would submit is right. I cannot realistically resist an order for interim payment. JDUGE DAVIES: The total is £37,000, so about £21,000 solicitors' fees and about £16,000 counsel, together with other disbursements. I would have thought that an interim payment of £20,000 would be about right in this case.
Mr. HURST : I did not know what the overall figure was going to be. The Bank does not need the money. Mr. Marshall, whatever may be the outcome of the case, has suffered significant hardship as a consequence of the swap.
JUDGE DAVIES: To cut you short, I think that what the court should do in a case like this is to make the order which it would otherwise make, assuming there was no question about the financial circumstances of the paying party, but I would be prepared to make an order that, if Mr. Marshall wants to make an application for an extension of time or for payment by instalments, then he can do that by making an application to his local County Court so that, if appropriate, he could put before a District Judge evidence as to his means which would justify a different order being made. I think that it is difficult for this court to say anything other than that, as a losing litigant, he must pay what he otherwise would have to pay.
MR. HURST: My Lord, he goes with the outcome. My Lord, I do not seek to dissuade you from the course that you have just outlined. I would invite you, in fact, to take that course and then he can apply to the court.
I wish to address you on two matters when we have dealt with costs, if I may.
JUDGE DAVIES: Let me just sketch through the order and I will invite Mr. Pope to have carriage of this order, so that he can produce a fair copy. Paragraph 1 will be the claim is struck out and there is summary judgment on the claim on the basis that there is no reasonable prospect of success. Paragraph 2, the claimant's application to amend the particulars of claim is dismissed. Paragraph 3, the claimant shall pay the defendant's costs of the applications and the claim, to be the subject of a detailed assessment if not agreed on the standard basis. The claimant shall make an interim payment on account of such costs in the sum of £20,000 - if I say within 28 days that would take us to 28th July 2015, unless by such date he applies to the County Court - what would be the local County Court for Mr. Marshall?
MR. HURST: Hertford.
JUDGE DAVIES: He applies to the County Court at Hertford for an extension of time or for an instalments order, in each case supported by evidence as to his means. I think that that then deals with the substantive order and the costs, does it not? Then that leaves your two points, Mr. Hurst.
MR. HURST: Yes. The first is the issue of deceit. That was not a matter that I addressed in detail. In fact, I did not address you at all on it. I did ask if there were any matters that needed to be addressed and my Lord indicated that there were none. Therefore, I did not address you on the matters of deceit.
JUDGE DAVIES: I do not think that it matters for these reasons: one, because I held, as I clearly was satisfied, that the Settlement Agreement covered all claims which would include deceit.
MR. HURST: If that is the case, my Lord, then I have no difficulty, because, if it is overruled by the Settlement Agreement, then it has not been overlooked. You can understand my concern that, if it was a separate head that has somehow been missed, then, of course, I will address you.
JUDGE DAVIES: No. MR. HURST: I would have submitted that the claim was adequately pleaded.
JUDE DAVIES: To clarify, I think that what I said was that it was covered by the Settlement Agreement. I did not hold that it had no reasonable prospect of success in itself, but I did say that, because it was not in my view, properly particularised, it would not have been appropriate to grant permission to include it for that reason, even if I had not decided that it was covered by the Settlement Agreement.
MR. HURST: I did not address you on sufficiency, I might do, but it is after the event. It is pointless so I am sure that my Lord will understand if I do not seek to pursue it further.
JDUGE DAVIES: Absolutely.
MR. HURST: My Lord, the second is a question of appeal. I would ask for permission to appeal. JUDGE DAVIES: Yes.
MR. HURST: I would ask for permission to appeal on all points. The critical point, of course, is the question as to whether or not, if the underlying contract is void under public policy, then that would vitiate the Settlement Agreement, and that is a key point. My Lord, focused on illegality. I would submit that, by focusing simply on illegality, my Lord failed to consider the wider doctrines which are well established. It is not illegality that matters, the question is whether or not it would be repugnant, generally, to the public policy and not illegality. The question here is whether or not the overall conduct of the Bank would be repugnant to public policy. At the heart of the application, that is the core point, but may I apply, formally, for permission to appeal in relation to all of the points?
JUDGE DAVIES: Yes, of course, you may. I am going to refuse permission to appeal on the basis that I do not consider there is a real prospect of success and I will fill in and the court will send the appropriate form to your instructing solicitors with the order so then you can take the matter further.
Paragraph 4 of my order then will be as follows: The claimant's application for permission to appeal is refused. The claimant may appeal to the Court of Appeal against this decision, which is an interlocutory decision, with the permission of the Court of Appeal, to which any further application should be made. Then that records that you made the application.
MR. HURST: That is why I made it, my Lord.
JUDGE DAVIES: Indeed so. Thank you both very much for your very helpful submissions.
Note 1 In this paragraph 46 and also in paragraphs 49 and 50 I have added the reference to “or otherwise contrary to public policy” whilst approving the transcript, because whilst I accept, as Mr Hurst submitted when asking for permission to appeal, that I referred expressly in my oral judgment to illegality without adding those words, I had intended when giving judgment to refer to the wider basis of public policy and not to limit my judgment to the narrower ground of illegality. [Back]
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Sir David Eady :
Introduction
It is unfortunate that this case has escalated as far as it has, giving rise to a considerable expenditure of public time and money, to say nothing of the stress and anxiety for those directly involved. The relevant events began on the evening of 12 August 2012, when the Claimant's four year old daughter fell and cut her forehead. She was escorted in a neighbour's car by the Claimant and her partner (who was also the child's father) to the Accident and Emergency ("A&E") department at St George's Hospital in Tooting (which falls within the responsibility of the Defendant). It was what happened while they were there that underlies the present dispute. Some members of staff recorded their recollections of what later took place and these were communicated to others, to whom I shall shortly refer, but on a very limited basis. Those publications form the subject matter of these libel proceedings, which were commenced on 8 August 2013 and tried before me between 8 and 10 June 2015. (I record that the applicable law is that prevailing prior to the coming into effect of the Defamation Act of 2013, although I do not suggest that it makes any significant difference.)
There was available some CCTV footage of what took place in the A&E waiting area, but it is of only limited value and certainly cannot be determinative of what happened. It is not complete and rather "jumps" from one image to another. Moreover, there is no sound track and the most controversial incident in the course of the Claimant's encounters with staff took place off screen.
I heard evidence, called on behalf of the Defendant, from no less than six members of the medical and nursing staff as to what took place. Each was cross-examined and challenged in certain respects by the Claimant, who had also given evidence herself. Her partner, who had been present throughout the critical period of time, was not called.
The allegations sued upon
It is necessary to identify, at least in general terms, the allegations sued upon and which are said to be false and defamatory of the Claimant. By the conclusion of the case, it emerged that the complaint was confined to two publications only. These were identified as being contained in paragraphs 18(a) and (b) of the Claimant's skeleton argument and Ms Wilson announced, at the commencement of her closing remarks, that she was proceeding on that basis: the Claimant did not demur. The first communication was that of a Children's Specialist Services Referral Form sent to Ms Katy Sharpe, a social worker based at the Hospital premises, together with the daughter's medical records. These included notes made by members of staff who had been present in A&E at the relevant times. The second publication was to Mr Tony Bowen, the on site health visitor liaison officer whose responsibilities included "child safeguarding". He received a "Paediatric Liaison Health Visitor Referral Form" together with medical records (including the notes referred to above). In respect of the latter cause of action, the Defendant relies on qualified privilege and justification (or "truth"). The Claimant has responded by alleging malice so as to defeat, if necessary, any defence of privilege. So far as the first publication is concerned, there is a defence of justification but not of privilege. (Although the Claimant had originally been put to proof in respect of the issue of publication, I concluded that it is reasonable to proceed on the basis that the two communications would have reached, and been read by, the individuals to whom they were respectively addressed – and only those persons. I am not prepared to make any assumptions as to further publication.)
I do not believe it necessary to set out the contents of these sensitive documents in the body of this judgment, but only to focus on the largely uncontroversial meanings to be attached to them.
It was suggested by Ms Wilson for the Defendant that the real "sting" of the allegations, in so far as they are defamatory of the Claimant, was as follows; namely that on the evening in question she:
(1) was confrontational towards staff;
(2) persistently and unreasonably demanded immediate attention for her daughter, refusing to listen to staff's explanations or to calm down, instead shouting at and being angry and aggressive towards staff;
(3) argued heatedly and loudly with the child's father;
(4) attempted to remove her daughter from the hospital before she had been examined, despite contending her daughter needed immediate treatment and contrary to the father's wishes; and
(5) unjustifiably hit a member of staff twice.
I have concluded that the words complained of did indeed bear those meanings. Accordingly, for the purposes of the defence of justification, it is for the Defendant to establish that they were substantially true (relying, in so far as it may be necessary to do so, upon section 5 of the Defamation Act 1952).
The Claimant has pleaded the meanings rather differently, but not in my judgment so as to give rise to any substantial dispute. She has suggested, for example, that the words meant inter alia that "… [her] behaviour had been reprehensible in such a manner as to raise rational child safeguarding concerns for her daughter". A reasonable person receiving either the communications in question would probably draw that inference from the very fact that they had been forwarded to persons having specific responsibility for "safeguarding" problems, as well as from the words themselves. It does not, however, in my view make any difference to the case which the Defendant has to establish for the defence of justification.
This matter would have to be judged according to the circumstances prevailing at the relevant time (i.e. during the evening of 12 August 2012). Any subsequent conclusions would not be directly relevant or capable of undermining such a defence. In this case, it was in due course, after a home visit, decided that no further action was required with regard to safeguarding. The Wandsworth social services file was closed on 6 September 2012. That does not mean, of course, that there were no rational grounds for concern at the material time.
In circumstances of this kind, there is inevitably involved an element of subjective impression. Each of the witnesses who gave evidence would, if truthful, be giving his or her impression of what happened. For example, one cannot measure precisely what is "heated" or "loud" in the course of discussions or what is "confrontational". Some allowance has to be made for that, by asking whether a reasonable onlooker could or would have described the relevant conduct in those terms. I am not suggesting that the defence of justification is inappropriate for the reason that these words were comment rather than fact, but simply that some descriptive terms are flexible and imprecise. On the other hand, a court should be able to determine, yea or nay, whether if a witness was struck in the chest it took place in circumstances giving rise to a defence, as is alleged here, by way of self-defence.
The standard of proof
The standard of proof in a civil claim of this kind is on the balance of probabilities. Which of competing or alternative scenarios is more likely to have happened? It is, however, recognised that the more serious, or the less likely, an allegation of fact appears to be, so the evidence in support of it will require to be correspondingly more cogent and persuasive. In this context, I was invited to consider the House of Lords speeches in Re D [2008] UKHL 33, [2008] 1 WLR 1499. This case provides an illustration. In so far as it is suggested that several professional witnesses have conspired to mislead the court about what happened, whether out of a desire to protect themselves from criticism or for any other reason, the evidence would need to be such as to overcome the prima facie implausibility inherent in such a scenario. Of course, it is possible that such wrongdoing may occur, and sometimes it does, as certain notorious cases in the past have demonstrated, but the judge (or jury as the case may be) needs to examine every aspect of the evidence with particular care before coming to such a conclusion.
I would add that in determining the cogency of evidence, in the face of conflicting accounts, the court will always guard against treating the exercise as a "numbers game"; that is to say, it cannot be right simply to hand the palm to whichever side has managed to muster the greater cohort of witnesses. In cases where a conspiracy really has taken place, it may well be that several people will be prepared to lie in order to advance their purpose. Close scrutiny is therefore required. I shall accordingly address the testimony of each of the witnesses who went into the witness box, individually, and I shall begin with those called on behalf of the defendant because it has the burden of establishing where the truth lies. It is also the case, as I have noted above, that they (or at least some of them) are alleged to have been prompted by malice in publishing what they did. Although in this respect the burden lies on the Claimant, it is intimately bound up with their primary evidence of what happened that evening and will be assessed at the same time.
The events of 12 and 13 August 2012
It is clear from the Claimant's own evidence that from the outset she would have preferred her daughter to go to St Thomas' Hospital that evening but she was, as it were, outvoted by her partner and by the neighbour who drove them in his car because St George's was closer. She said "… I believe from the past experience and also from the reputation of the medical team, St Thomas' offer much better quality. Another important factor was that I believe the plastic surgeons at St Thomas' would be much better because I was deeply worried about scarring". As soon as she was seen by a member of the St George's staff (a senior sister called Helen Solomon), she mentioned her concerns and that she would prefer her daughter to be treated at St Thomas'.
Christopher Jones has been qualified as a nurse since 2006, and for two years between January 2012 and January 2014 he worked in the A&E department at St George's Hospital. He began work on 12 August 2012 at 7.30 a.m. and was the senior nurse on duty in the paediatric section at the time when the Claimant arrived with her partner and daughter shortly after 6.40 p.m. Although his witness statement was dated 17 September 2014, it was to a large extent founded upon his contemporaneous hand-written note made before he went off duty on 12 August 2012. His first involvement with the Claimant was when he was told by Ms Solomon that a four year old child had been admitted to the department and forewarned that her mother was proving "very difficult" and "erratic". She was demanding that someone should see her daughter immediately.
Shortly after that, he noticed that the Claimant approached the nurses' station in the paediatric waiting area (visible on the CCTV). She was carrying her daughter and was accompanied by her partner. He recalls (and noted at the time) that she stated that her daughter required a plastic surgeon to treat her. She denies saying this, despite the fact that it was a consideration already weighing in her mind as to where she should be treated, and her statement contains the following claim:
"It is very obviously fabricated to conveniently portray me as someone totally insane. It is absurd for any parent to request [a] plastic surgeon when we have not eliminated the risk of brain injury."
It is not only Christopher Jones, however, who recalls the references to a plastic surgeon. Dr Shalini Panchal also said that the Claimant repeatedly demanded that her daughter be seen by a plastic surgeon. She was at the time the emergency medicine registrar. That evening she was the senior doctor on duty in the paediatric A&E department and it was her role to lead the health care professionals on that shift and to provide support and guidance to the medical staff. Dr Catherine Hornby was another doctor on duty in the department (undergoing training at that time) and she too stated that the Claimant, who "appeared distressed and agitated", requested that her daughter "be seen urgently by a plastic surgeon". (She had also made a contemporaneous note recording this.)
I do not find that the references in the evidence to her requesting a plastic surgeon are "fabricated" or "convenient". I cannot see why they should have introduced such a detail unless it had actually occurred. I do not understand why any of them, let alone all, had anything to gain by it. Also, as I have said, it was clearly something in the forefront of the Claimant's mind, as her own statement bears out. The fact that she was prepared, in this context, so casually to introduce this accusation of "fabrication" against these witnesses is concerning: it rings warning bells as to her credibility more generally.
I was also rather surprised to hear her make the claim, in the course of her opening remarks, that the medical and health care staff at St George's had a general prejudice against those who had been born outside the United Kingdom and believed that they were liable to be deficient in parenting skills. That is an allegation that seems to me not only to be without foundation, but also to betray a readiness to make "wild" and unsubstantiated generalisations if she thinks it will advance her cause. She even went so far as to say that "… I could not put my daughter's life into the hands of people who have no compassion, who genuinely do not care about the life or death of their patients, who would not be accountable for their actions or inactions" (my emphasis).
Dr Hornby explained that she took the step of making notes that evening because the Claimant's behaviour in the department had caused her concern. The same clearly applies also to Christopher Jones, who headed his note with the words "critical incident statement". Although it was put in cross-examination to Dr Hornby, she firmly denied collaborating with Mr Jones in the writing of her statement. She said they were produced independently during the evening. I can see no reason to disbelieve her. It is quite clear to me that there must have been something unusual and noteworthy about the Claimant's behaviour that evening for these busy people to feel the need to devote time to the making of a written record. Whereas the Claimant is unwilling to accept that she was other than a naturally anxious parent, I need to remember that the staff would be used every day to dealing with anxious parents in A&E. In itself, that would be unremarkable. This was plainly something out of the ordinary.
Christopher Jones heard Dr Panchal try to explain the procedure to the Claimant and he informed her that there were only two other children in front of her and that she would be expected to take her turn. He and other colleagues attempted also to explain the situation to her, but she continued to demand immediate or urgent attention.
In this context, it is important to explain, as Dr Panchal did while in the witness box, that a doctor or nurse can judge from a superficial (but still professional) examination that there is only a low risk of brain damage and that therefore a more formal examination can be carried out without a need to treat it as an emergency. There are obvious warning signs that can be detected, such as floppiness, pallor, difficulty in breathing or talking, listlessness or a glazed expression, which if present might alert a doctor or nurse to accelerate a more thorough medical examination. No such signs were present in the case of the Claimant's daughter, as Dr Panchal confirmed from having given her such a "once over" herself. Specifically, she did not observe any drowsiness, despite the Claimant's assertion to that effect in her "proof of malice". On the contrary, she referred in evidence to the child as being alert and responsive. In her note of 23 August 2012, she recorded that, "I thought that as she was not immediately compromised … it was safe for her to wait to have her secondary assessment".
The child would also have been observed in a similar way on arrival by Helen Solomon. She, as the Claimant later discovered, had allocated her a "green" categorisation (meaning that she was not in immediate danger and should be seen within two hours of arrival). Thus both she and Dr Panchal seem to have concluded without difficulty that there was no urgency and, importantly, there is nothing that has subsequently emerged to suggest that these initial assessments were wrong. Accordingly, it is all the more puzzling as to why the witnesses should have entered into a dishonest collaboration over their evidence. They simply had no reason to do so.
The Claimant denies that her daughter received any assessment at all until about 7.45 p.m. when notes were made by Dr Panchal following a more formal examination. She seemed to believe that the absence of earlier notes entails that no prior assessment of any kind had taken place. Dr Panchal explained, however, that it is quite usual for an informal early check to be made without there being any need, in a busy A&E department, to sit down and make a written record. Otherwise, as she said, they would spend a good deal of time making notes, inappropriately, rather than seeing patients and prioritising their needs. That is exactly what one would expect. In any event, Dr Panchal had asked the Claimant to take her daughter to a cubicle where a nurse could apply gauze and tape to the cuts on her forehead. This she refused to do at first and demanded to see a doctor at once. Eventually, she did agree to go into the cubicle (at approximately 7.08 p.m.). I believe that she is exaggerating, therefore, when she claims, "… my daughter kept bleeding and her face was still covered in blood … We waited for about 45 minutes holding a child who was very weak and bleeding".
I also noted the evidence of Geraldine Fraher, who was the "named nurse" for safeguarding children. She is clearly very experienced and was a measured, thoughtful and patient witness. She met the Claimant on the following morning, 13 August, when she came to visit her daughter on the ward. She was there to support the ward sister and to help explain to the Claimant what was expected of parents and other visitors. They naturally wanted to ensure that there was not going to be any disruption on the ward. Ms Fraher described the meeting as lasting about ten minutes and as being cordial and professional. (Characteristically, the Claimant went "over the top" and stated that it was "a humiliating interrogation".) Ms Fraher told me in the course of her cross-examination that the Claimant had actually then told her that she felt that her behaviour on the night in question had succeeded in getting her daughter attended to. (She had also included this in her statement of 28 August 2012.) In other words, the Claimant appeared to be admitting that she had been willing to draw attention to herself, and to make a fuss, in order to achieve her objective. That was a striking piece of evidence, and a rather surprising admission, but I find it consistent with the accounts of her behaviour at the time. Naturally, one can well understand (as did the doctors and nurses present) that a parent attending A&E with an injured child is likely to be in a state of some anxiety or even distress. That does not, however, necessarily excuse bad behaviour or justify a loss of self-control.
The staff were placed in a difficult position during the course of that evening and had to make judgments on the spot as to the most appropriate course of action. It is no doubt easy to criticise with the benefit of hindsight. Some may conclude that one or other of them should have taken a different course at some point. I am certainly not going to criticise their professional judgments myself, but even if one or more of them might now prefer in some way to have acted differently on mature reflection, I do not see that it makes any difference to the task I have to perform. I need to decide primarily whether the conduct of the Claimant herself was accurately described in the words complained of. I am not deciding a claim against the Defendant or members of its staff for negligence, false imprisonment or some other breach of duty. The questions I have to address are primarily whether they published any materially false allegations about the Claimant and also, if they did, whether in communicating specifically with Mr Bowen they, or any of them, were malicious. I approach the evidence on that basis.
Christopher Jones explained that he saw the Claimant becoming increasingly agitated and angry. She was demanding immediate treatment for her daughter and was shouting loudly so as to draw attention to herself. He said that he was at a loss to understand her behaviour and that she was simply not listening to what she was being told by him or his colleagues. This was entirely consistent with the testimony of the other staff who were present in and around the waiting area at various stages; in particular, Dr Hornby, Dr Panchal and Ms Jane Wilson (a senior nurse in the paediatric department). The CCTV footage is of limited value, but would seem to show that most of the heads in the waiting room were turned towards her. One can certainly see her partner appearing to try to calm her down and to reason with her. He was throughout, it seems, quite content that their child should remain where she was and be treated at St George's. That is one of the particular difficulties confronting the staff. Those with parental responsibility were strongly and vocally disagreeing about what should happen and, in particular, as to whether she should stay or move on to St Thomas'. Because of their concerns over her "erratic" behaviour, Jane Wilson asked the Claimant's partner whether she had any mental health problems, to which he replied rather disconcertingly that he did not know. He added that "there is no calming her down when she is like this". That clearly did nothing to allay their concerns. Specifically, they were anxious to avoid the mother's conduct damaging the best interests of her daughter.
In these rather unusual circumstances, the attitude of the staff, and Mr Jones in particular, was that a duty was owed to protect the child's best interests in the meanwhile and, for so long as the parents disagreed, that it was better for her that she should remain until she had undergone a more thorough examination to eliminate brain injury. Thereafter, although she would need to have her wounds dressed and some plastic surgery on her forehead, it would be safe for her to leave and go elsewhere (if that is what the parents wanted).
Dr Hornby told me that at some point "… the claimant's partner asked for our help in ensuring she did not leave". Unfortunately, there came a point when the Claimant made to leave the premises with her daughter in her arms and despite the wishes of her partner. The explanation she gave was that "… having sensed the tension and the unfriendliness my daughter had repeatedly said that she did not want to stay at St George's and that she wanted to be treated at St Thomas'". I am afraid I do not believe that a four year old child would express herself in this way. Furthermore, it is inconsistent with the note made by Jane Wilson:
"I explained [to the father] that we want the best for [his daughter]. I thanked him for his support. Dad then spent time reading to [her]. They appeared to have an excellent relationship. During the process [the child] appeared unfazed by mother's outbursts."
By this time, a member of the security staff had been alerted and, on arrival, was advised to wait outside in the corridor with a view to preventing the child being taken away. The father asked Christopher Jones, "What do I do?" His response was to advise him to "take control" of his daughter in case it became necessary to escort the Claimant from the premises. Mr Jones stood at the doorway in front of her and told her not to leave. (This is what led her later to refer several times to having been "falsely imprisoned".) She nevertheless, according to Mr Jones, pushed into him as if to go past. His evidence was as follows:
"I went to take hold of the Claimant's daughter. My responsibility was the safety and care of that child who was injured. I was ensuring the child remained in a safe and secure environment as at that time the team and myself had no information nor evidence to explain her injuries."
In case this sounds unduly alarmist or high handed, I should explain by way of context that child "safeguarding" concerns are not uncommon in the paediatric A&E department. The channel of communication with the available social workers, such as Ms Sharpe and Mr Bowen, seems to be well trodden. Indeed, it was explained by Jane Wilson in cross-examination that the frequency of contact is such that they have a multi-disciplinary "safeguarding meeting" most weeks. The medical staff, whenever they have such concerns, do not attempt to investigate or resolve them in the department, but have a responsibility to pass them to the social workers on site. According to my note, Geraldine Fraher told the Claimant, while she was in the witness box, "It was your behaviour on the night that led to the referral. It is not our job to work out what is going on. We hand it over to social services".
At all events, Christopher Jones told me that the Claimant complained that when he had reached for the child he had touched and hurt one of her nipples. He denied doing so. She now says, in her recent "proof of malice", that he "… grabbed part of my nipple and he pulled hard". She said that she then "… screamed in pain and cried, 'You pulled my nipple, it is really painful!!" It was at this point that he alleges that she struck him twice in the chest. This incident took place in the presence of Dr Hornby, who confirmed that she heard the accusation that Mr Jones had touched her nipple, but that it was not true. She added, "The Claimant then physically hit Nurse Jones twice in the chest with her right arm. I had a clear view of this and was shocked by the Claimant's behaviour". She added that another doctor, Sharon Jueeta, remonstrated with the Claimant and tried to "placate" her, saying that she should stop shouting at Mr Jones and that "the staff did not deserve that abuse". The Claimant denies that Dr Jueeta was present at this time, but what Dr Hornby wrote later that evening was that, after she had struck Mr Jones in the chest, Dr Jueeta "… then came outside to try and placate situation (sic) and asked the mother to stop shouting at Christopher, and that staff do not deserve abuse". I see no reason to disbelieve this account, although it is true to say that in her more formal statement Dr Hornby later described Dr Jueeta as having been "also present", and "… standing in something a bit like a circle", at or before the time when Mr Jones was struck. I am not sure that there is any inconsistency in these two accounts – albeit differently worded. In any event, it makes little difference to the substance of the matter, but I accept Dr Hornby's evidence that Dr Jueeta was present at the time of the incident.
What I thought might have happened here is that one of Mr Jones' hands momentarily came into contact with the Claimant's nipple (obviously outside her clothing) accidentally. She herself did not suggest that he did it deliberately. She might then have instinctively reacted by pushing him in the chest. If so, that would to an extent mitigate the alleged "assault" upon him, while not necessarily excusing it altogether. I thought at first that this would be the most likely explanation for what took place. Yet such an interpretation would be difficult to reconcile with the Claimant's most recent accounts, in her "proof of malice", where she referred to her having "… no choice but to use minimum self defence which bought me time to call the police". She gave this explanation twice, the second time stating, "… I then had to use the minimum self defence which gained me time to call the police". This seems to exclude the "instinctive" explanation and to support the (initially surprising) evidence that she chose to strike him deliberately.
Mr Jones said that the Claimant did indeed call the police on her mobile and he heard her tell them that the hospital staff "did not care" about her daughter.
Meanwhile, Dr Panchal had called Dr James Cameron, the A&E consultant on duty, to come and give support. At that time, he had overall responsibility for the running of the A&E department. He arrived at about 7.30 p.m., although I believe by coincidence rather than by way of responding to the call, in time to hear the Claimant telling the police that her daughter had not been seen quickly enough and/or that they had refused to treat her. He did not suggest that this was her only complaint to the police: he did not deny, for example, that she may also have mentioned the alleged assault by Mr Jones. He was merely recording what he heard her say when he arrived on the scene. He too chose, at about 10.45 p.m., to make written notes of what had occurred earlier that evening.
On one version of the Claimant's account, as I understood it, she denied hitting Mr Jones at all, claiming that she did not have an arm free to do this. She was holding her daughter in her right arm and two bags in her left. It is true to say that the CCTV shows her being handed two bags by her partner before she left the waiting area. On the other hand, Dr Cameron told me that when he saw her in the corridor the Claimant had the bags and her daughter on her left arm, while she was holding her phone in the other hand. When this transfer had taken place I cannot say for certain. It may not matter much, however, in the light of the Claimant's recent admissions that she chose to strike Mr Jones in order to gain time. (The Claimant later sought to clarify the position by saying that she only hit Mr Jones, and could only have done so, after the child had been taken from her – thus freeing her right arm.)
When he saw the Claimant, Dr Cameron approached her as she was obviously unhappy and shouting at members of staff, including Mr Jones:
"She was clearly agitated and was shouting at me and my colleagues. The Claimant's behaviour was highly unusual. She seemed out of control. In my view her behaviour was erratic."
No one suggested that the Claimant was swearing at the staff, but they took the view that she was "abusive" in the sense of shouting and being aggressive towards them. I accept the evidence that she was "shouting", but I do not find her explanation convincing; namely, that "… I had to speak with a louder than usual voice in such an environment to get the staff's attention". If one thing is clear, it is that the Claimant had no difficulty whatever that evening in engaging the staff's attention. Indeed, Dr Panchal recorded in her statement of 23 August 2012 that she had had to apologise to other patients for the noise and disruption she had caused.
Eventually, Dr Cameron managed to calm her down and she agreed to return to the paediatric unit to allow her daughter to be given a more detailed examination. Later, in a separate conversation, he told her that her daughter would need to stay in overnight and that a plastic surgeon would arrange a general anaesthetic in the morning. She then shook his hand "effusively". But later when a bed became available she began again to press for her daughter to be taken to St Thomas', whereupon Dr Cameron told her that this was not in the child's best interests and he insisted on behalf of the hospital that the father should stay with her on the ward, while the Claimant should leave the hospital and return in the morning. She mentioned to him that she might be making a court application to overrule her partner's wishes – or she might not. She now states that "Dr Cameron forced us to undergo treatment at St George's against our wishes". While I accept that he advised her in the terms I have described above, it is quite untrue to say that he "forced" anyone – certainly not the Claimant's partner, who had been willing that his daughter remain at St George's. Jane Wilson recorded his attitude at the time:
"Whilst the consultant was speaking to Mum, I spoke to Dad. I apologised if this had caused him distress. He was very supportive and keen to stay with [his daughter]. He stated that whatever happens this will be his fault + she will blame him."
(In the event, the operation went ahead and all was well.)
It seems to me that "erratic" is a fair description of her conduct generally that evening. More significantly, however, as Dr Cameron observed, "… her verbal abuse and the physical shove to a member of staff was entirely unacceptable".
A police officer arrived in the course of the evening and spoke to Mr Jones and the Claimant about the incident in the corridor. Nothing further came of it.
It may well be that at the time the "shove" occurred the Claimant was holding her daughter and the bags in her left arm, as Dr Cameron had noticed, but I am in any event satisfied that Mr Jones and Dr Hornby are telling the truth when they recount that the Claimant struck him in the chest. It may not have been particularly hard, but it was certainly inappropriate and unjustified. Again, the Claimant asserts that the witness statements of Dr Cameron and Dr Hornby are "obviously fabricated", but this seems to me wholly implausible. I find it impossible to believe that Mr Jones or Dr Hornby lied about it. Not only did they impress me as reliable and careful witnesses, but they had no reason to make it up. Moreover, as I have already noted, the Claimant accepts that she struck him deliberately – although she puts it in the context of "minimum self defence". I see no legitimate basis for that. I cannot believe that Mr Jones had struck her or was intending to do so. The way she put it at one point in her "proof of malice" (at p.74 of the bundle) was that "… they are closing in on me". That appears not to be directed at Mr Jones specifically. I am satisfied that he was concerned only to protect the child's best interests. Thus, whichever of the Claimant's accounts one examines, it provides no support for the argument based on self-defence. It was a most unfortunate incident, but not in itself especially serious.
I would add that I believe the Claimant is mistaken in her recollection when she says in her reply (at para. 48), "These staffs who claim to have witnessed the assault could not possibly have seen it as the incident happened in the corridor outside the closed double doors of the Children's A&E". Dr Hornby gave a very clear account of where she was standing in the doorway in relation to all of the other protagonists. She seemed to me to be recounting a vivid recollection of what was, for her, an unusual and memorable occurrence.
The credibility of the Claimant
As to the Claimant's credibility, I formed the view that she is given to exaggeration and overstatement. I have already cited some parts of her evidence which seem to bear this out (see e.g. paras 15, 17, 18, 23, 24, 31, 33, 38 and 41 above). She describes herself as a university lecturer and "role model" to her students. Yet, despite this, I formed the view that she lacks objectivity and is too ready to perceive herself as under attack from others "ganging up" on her. It is part of the same pattern that anyone who sees things differently from her must be lying and/or motivated by malice. There is no room for light or shade in her account; nor any inkling of acceptance that she could even be partially responsible for what occurred. It is always the fault of someone else.
She claimed originally in her "proof of malice" that the first time any observations were done was at 20.45 "4 hours after we arrived at the A&E". She did point out that this was a misprint for 19.45, but where "4 hours" came from I fail to understand. She also said, without any foundation, that "it was going to be at best another few hours wait to see the paediatrician". Yet, despite all the alarms and excursions, she was seen by Dr Panchal at 7.45 p.m. She had already been told, as I accept, that there were only two children in front of her and that there should not be a long delay.
I have earlier mentioned that the Claimant is also, as she apparently admitted to Ms Fraher, prepared to manipulate situations to what she perceives to be her advantage. Judging from what she told her, for example, she appears to believe that she managed to "jump the queue", by making an exhibition of herself, even though the truth is that she would have undergone Dr Panchal's formal assessment by 7.45 p.m. in the ordinary course of events. She told Ms Fraher that, had she not adopted her approach that evening, "her child could have been waiting for hours". That is nonsense.
I need to approach her evidence with great caution. In so far as her account was inconsistent with those of the witnesses I have identified, I preferred their testimony. She undoubtedly was behaving unusually, even allowing for all the natural anxiety which she and her partner were experiencing, and drawing attention to herself in a noisy and disruptive manner. That is what led the experienced A&E staff to make notes of what had occurred.
My conclusions on the defence of justification
The defamatory allegations I find to be substantially true. So far as "safeguarding" is concerned, I have little doubt that the staff who referred the incidents to the social workers were genuine in their concerns at her apparently irrational and erratic behaviour and its possible implications for her daughter's welfare. Fortunately, nothing came of it and it was recognised upon closer investigation that she had a good relationship with her. That does not mean that the concerns were not genuine at the time they were expressed.
I was impressed in this context by the evidence of Ms Wilson and Ms Fraher, the two witnesses with particular knowledge of such matters, which seemed to me entirely convincing. There is nothing remarkable about that in view of the responsible positions they hold and the experience they have gained in child safeguarding. (I shall have to return to this in addressing the pleas of privilege and malice.)
The Claimant objects to various comments made by Ms Wilson in the paediatric liaison referral form, including "Please see notes – Mum's behaviour. Mum assaulted staff member". She made a similar entry on the specialist services referral form. Although she was not present at the "struggle" herself, I have no reason to believe that she was purporting to do anything other than recount accurately what she had been told by trusted colleagues. I reject the suggestion that "she was deliberately distorting the facts in order to justify the referral" or that she "was very ill motivated".
She concluded her "proof of malice" by challenging the content of a record made by an unnamed member of staff whose writing she could not identify. It contained the comment "Mum … apparently has physically and verbally abused members of staff (I witnessed verbal abuse – shouting and abusive words)". The use of the word "apparently" would indicate that the person was simply recording what he or she had been told, so far as "physical abuse" was concerned, and only directly bearing witness to "verbal" abuse. The Claimant added that "all the staff's statements deliberately omit … the background information that we were falsely prevented from leaving". That is not true, since the incidents which she characterises as false imprisonment (involving Mr Jones and Dr Cameron) are described in the relevant statements, as I have summarised above (albeit not, of course, conceding "false imprisonment"). She added that "this unnamed staff had an ill intention to paint [me] as someone violent and even narcissistic in order to justify the later forced removal and the subsequent social services referral". I need say no more than that I have seen no evidence to support this charge either. Her real complaint is simply that the statements do not agree with any of her own versions of what occurred – and because of this she concludes that there must be a conspiracy against her. (This is why the issues of justification and malice constantly overlap.)
It is true that the Claimant referred several times that evening to the fact that she wished to make a formal complaint about her experiences and kept calling for a complaint form (which someone had gone to collect). She also threatened to go to a newspaper. For the avoidance of doubt, I make clear that the Defendant accepts that this was her entitlement and neither of these matters is put forward as supporting the plea of justification.
Qualified privilege
Ms Wilson took me to the basic principles of qualified privilege and invited specific attention to the decision of the Court of Appeal in Clift v Slough Borough Council [2010] EWCA Civ 1171, [2011] 1 WLR 1774, which is concerned with how the common law of privilege should now be applied in the light of the Human Rights Act 1998 and the need to balance competing rights in the context of defamatory publications when they are promulgated, as here, by a public authority.
Where genuine concerns arise as to child safety or safeguarding, in the course of examining or treating a young patient, there would plainly be a duty on the part of a nurse or clinician to communicate those concerns to the appropriate quarter. It would not be acceptable merely to ignore them. Again, it is important to recognise that the matter has to be assessed in the light of the circumstances as they presented themselves during the evening in question. Subsequent events, including the outcome of any investigation by the relevant people, cannot alter the position as at the time of publication. (Whether the concerns were genuine is, of course, an issue closely linked to that of malice.)
As Geraldine Fraher observed on 28 August 2012:
"Whenever parents are noted to be aggressive and especially when physical aggression is demonstrated, concerns will be raised for the emotional and physical well-being of the child. …The desire by mother to take her child elsewhere did not seem to be in the child's best interests and was a contradiction of mother's demand for her child to be treated immediately. It was also against the wishes of the other parent. Consequently in this situation a referral to children's specialist services and checking with other agencies was entirely appropriate."
In this hospital, there is a recognised channel; namely, by way of the Paediatric Liaison Health Visitor Referral Form addressed to the Defendant's own health visitor liaison department. So too, there would be a corresponding interest or duty on the part of the relevant person (e.g. Mr Tony Bowen) to receive and act upon that information. This would involve, in the first instance, making such enquiries as were deemed appropriate in the particular circumstances. In so far as any such communication refers to an adult in a way which may be damaging to his or her reputation, it is likely to pass the tests of being necessary and proportionate. Wider publication among persons not having any direct responsibilities for such matters may well fall outside the protection of privilege: see e.g. Clift, at [33]-[36]. But I have no doubt that the communication to the liaison department was protected, subject to the issue of malice to which I shall now turn.
Malice
Particulars of malice were served rather late in the day, on 14 May 2015, as a result of an order by Judge Moloney QC on 8 May. They are rather prolix and consist largely of assertion and speculation. Allegations of malice are taken very seriously and should not be introduced lightly or as a matter of routine. In most cases, they will involve an allegation of dishonesty. Not surprisingly, therefore, findings of malice in defamation trials are very rare. Here, the Claimant sets out to prove that some of the hospital staff made allegations about her which they knew to be untrue at the time they were made. She says that they simply did not see or hear her behaving as they describe and must, therefore, have made it up. Thus it is clear that the issues of malice and justification are closely linked. I have found that the allegations made about the Claimant were substantially true and thus there is no reason to suppose that, when recording their impressions, the various members of the team were other than honest in doing so.
Her allegations of malice were made without any of the careful circumspection that is usually to be applied by professional pleaders in such circumstances. She cannot be criticised for being a litigant in person, of course, but I need to approach her allegations with particular caution. They were expressly made against several of the staff, including Dr Cameron, Dr Panchal, Dr Hornby, Ms Jane Wilson and Mr Christopher Jones. For reasons already explained, I cannot accept that malice has been established against any of them.
As I mentioned earlier, she made further unsupported allegations against the unnamed member of staff whose signature she could not read and also against Ms Sarah Huf. Neither of these people was called and I have been given no reason to believe that either of them was motivated to make up lies about the Claimant or to join in a conspiracy to portray her in a false light. It is no more than bare assertion.
What the Claimant seems to be suggesting is that staff used the referral procedure spitefully as a weapon to punish the Claimant for her behaviour or for her willingness to make a complaint. If that were so, it would be quite outrageous, but I have seen no reason to think that any of those involved would have behaved in such a manner. All the witnesses appeared to me to be responsible and dedicated professionals. I cannot accept that any of them, whether acting singly or by way of a conspiracy, would have done any such thing. They were simply confronted in the course of their duties with an injured child accompanied by a parent who was behaving irrationally and erratically, and who wanted to take her away before her head injury had been fully assessed – despite the wishes of the child's father. They naturally thought that the matter should not be "brushed over" or ignored and, therefore, they made a reference, as they regularly have to do, to the appropriate on site social workers with "safeguarding" responsibilities.
The Claimant's other complaints
The Claimant will have observed that I have said nothing, so far, about the earlier means of redress she pursued. That is because they seem to me to have nothing directly to do with the very specific issues I have to resolve. Nevertheless, as she attaches significance to them in her pleadings and in her evidence, I will mention them purely for the sake of completeness.
Her initial complaint to the hospital on 19 August 2012 was rejected. Then, she complained also to the Parliamentary and Health Service Ombudsman. That eventually resulted in a letter from a caseworker dated 19 June 2013 in which he concluded (on the papers before him) that the appropriate action had been taken to resolve matters. That refers to steps taken by the Defendant whereby it implemented proposals from the Ombudsman's office. These were to the effect that the Claimant's own account of matters should be added to the hospital records. Thus anyone who read the offending allegations about her would at least have her side of the story available alongside.
The case worker also asked the Trust to apologise for what he characterised as "the error in judgment leading to the referral to social services" by 10 July 2013. This was done, but without any reference to those who had actually made the decision at the time. They still take the view that they made the correct decision on the evidence before them and profoundly disagree with the caseworker's assessment which, remarkably, they had not seen before the trial. In any event, an "error of judgment" would not equate to malice.
Since August 2013, the Defendant's medical records have included (i) the Claimant's rebuttal of the allegations against her, (ii) the Ombudsman's decision of 19 June 2013, and (iii) the Defendant's letter of 10 July 2013. This is generally recognised as being the appropriate way of dealing with challenges to the content of medical records. It is not good practice simply to delete information in response to a request, whether on behalf of the relevant patient or otherwise: see the guidance for the relevant period (dated January 2010) from the National Information Governance Board for Health and Social Care. This was explained at page 8:
"Completely removing one or more pieces of information from a record so that no one knows it was ever there can be like taking a chapter out of a book – the following chapters often do not make sense. … [I]t can make it difficult for professionals to understand the record, and it may not be reliable."
The steps taken have thus achieved as much as the Claimant can reasonably expect, if not more, in respect of her complaints about her experiences at the Defendant's hospital.
Conclusion
In the circumstances, I will dismiss the claim.
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See Costs at bottom of this judgment
Mr. Justice Edis :
This is an appeal by the Motor Insurers' Bureau ("MIB") against an order made by Deputy District Judge Harris, Regional Costs Judge, ("the Judge") on 6th May 2014. The Judge conducted a detailed assessment of costs on that day and decided (among other things) two issues as preliminary issues which are the subject of this appeal. The rest of the detailed assessment has been stayed pending the outcome. The MIB seeks an order (1) assessing the success fee under a Conditional Fee Agreement (CFA) at no more than 5%, (the Judge assessed it at 75%), alternatively that the Judge should have assessed at 67%; and (2) a declaration that the "date" referred to in CPD paragraph 19.4(2) means the date on which the CFA was in fact made and that in default of relief from sanctions no success fee should have been allowed at all. This was because the CFA in this case was "back-dated" and had a different start date from the date on which it was made. The Judge refused to disallow the success fee on this basis. He granted permission to appeal on the second issue "the date issue" but not on the first issue "the success fee issue". Subsequently, Lewis J granted permission on the success fee issue and both appeals are therefore before me.
The CFA
The claimant's litigation friend entered into a CFA with his solicitors, Potter Rees, on 21st October 2009 which included a 100% success fee. That CFA bears that date on the page where it was signed by the parties to it, but on the first page says
"Agreement Date 6th November 2008 (NB: As agreed, this Agreement takes effect from when you first instructed Potter Rees)"
No particulars of the prior agreement to back-date the CFA, the existence of which is to be inferred from the words "as agreed", are contained in the document. The signature part of the CFA contains this notice which is signed separately by the litigation friend who then signs again below, as does a representative of the claimant's solicitors:-
"Notice of Authority to Work
I, Arthur O'Brien, confirm that
a) I signed a CFA with Potter Rees on 21. 10.09
b) at the same time they informed me of my right to cancel this CFA
c) I authorise Potter Rees to work on my behalf under this CFA throughout the period of 7 days from its date.
You may be required to pay for services supplied if Potter Rees has begun to work for you, with your written agreement, before the end of the cancellation period."
Under the heading "what is covered by this agreement" the CFA provided "Your claim against Michael Shorrock and the MIB for damages for personal injury for John O'Brien suffered on 10th July 2002". A "win" was defined as "your claim for damages is finally decided in your favour, whether by a court decision or an agreement to pay you damages or in any way that you derive benefit from pursuing the claim."
The Claim
The claimant's claim arose from an accident. Solicitors originally instructed had corresponded with the MIB and on 2nd November 2005 the MIB told them that it would make a "full award to your client under the terms of the Untraced Drivers Agreement". In late 2008 Potter Rees took over the conduct of the case and by letter of 12th January 2009 said that they reserved their "position as to whether a claim exists under the terms of the Uninsured Drivers Scheme." The present claim was eventually brought under the Uninsured Drivers Agreement by proceedings issued on 1st April 2010. To succeed under this agreement, the claimant needed to prove the identity of the driver who caused the accident. Proceedings were issued against the Defendants on 1st April 2010, and a Case Management Conference was held on 1st November 2010 when a direction was made that the issue of the identity of the driver was to be tried as a preliminary issue. The claimant succeeded at the trial of this issue in establishing the identity of the driver before King J on the 14th June 2011. King J accordingly entered judgment against the First Defendant (which would be satisfied by the MIB) for damages to be assessed "together with an order for the costs of the Claimant." By paragraph 2 of the Order, he also ordered that the MIB should pay the claimant's costs "of the preliminary issue". On the 27th June 2012 Hickinbottom J approved the compromise of the action by an order for payment of a lump sum of £1.8m and periodical payments starting at £140,000 per year and increasing in the usual way for inflation. Hickinbottom J made another order for costs by consent in the following terms:-
"The Second Defendant shall pay the Claimant's costs of the action against the First and Second Defendants on the standard basis to be the subject of a detailed assessment in default of agreement."
Prior to either the 6th November 2008 or the 21st October 2009 (which are the rival contenders for "the date" for the purposes of Paragraph 19.4(2) of the Practice Direction) the first firm of solicitors had arrived at a stage where they were in negotiation with the MIB on a full liability basis with the assistance of experts on a number of issues. The MIB was said to have delayed particularly over the accommodation claim. They appear to have been acting on a conventional basis and their Bill including VAT and disbursements was in the sum of £33,048.77.
The Potter Rees bill begins with a statement that it was prepared pursuant to the Order for costs dated the 27th June 2012. The Bill records that the Initial Attendance meeting took place on the 19th November 2008 after a telephone discussion on 6th November 2008 which is the first work for which any charge is made. It is plain from the Bill that work on investigating and pursuing the claim under the Uninsured Drivers Agreement and work on continuing the quantification of the claim was being done at the same time from the start of the retainer. An attendance note of the 4th September 2009 describes a meeting when two solicitors attended upon the claimant and the litigation friend and says this
"HP then went through with them the CFA and the numerous next steps we would take. Time – Attendance – 16 units – travel – 8 units. Claimable by both NM and HP. It was necessary for us both to be there as we are dealing with distinct parts of the claim, i.e. NM investigating liability and the possibility of getting the claim under the uninsured scheme and HP advising with regard to the advantages and disadvantages of the uninsured and untraced driver's scheme respectively and advising with regard to funding issues."
From June 2011 to June 2012 all work concerned the quantification of the claim on a full liability basis, there being no further risk on that issue. The profit costs of the solicitors were £233,402.64 plus VAT. The success fee of 100% throughout is included in this sum. Counsel were also acting under a CFA, but no issue arises about that on this appeal.
The success fee issue: part 1, should it have been assessed at 5%?
The MIB submits that the claim was always bound to succeed under either the Untraced Drivers Agreement or the Uninsured Drivers Agreement and that only a small proportion of the costs related to the issue which determined which agreement applied, namely the issue as to the identity of the driver. Therefore, the success fee should have reflected the certainty of the "win" and should not have been more than 5%.
The Ruling
The first question which the Judge decided was whether the claimant's solicitors were entitled to a success fee at all. The Judge held that the CFA was intended to cover only the claim under the Uninsured Drivers Agreement. He reached this conclusion on the basis of evidence extrinsic to the CFA itself and does not address the arguments about the construction of the CFA's terms which had been advanced by the parties, apart from summarising what they had been. In fairness to him, the Judge gave an extempore judgment on a complex issue, perhaps realising that it was unlikely that the argument would stop with him, however elegantly he expressed himself. The nature of detailed assessment proceedings requires a number of decisions to be taken during the hearing and it is easy to pick apart the reasoning at leisure on appeal. If costs judges reserved every decision they had to take detailed assessments would never end. I therefore propose to try and identify the thrust of the reasoning at each stage and to consider its sufficiency without demanding an unrealistically high standard of drafting.
Having said that, I conclude that the basis of his conclusion on this issue is not entirely clear. He said
"Much is made by the defendant, quite properly, of the leading authority of C v W and it seems to me that is a proposition for stating that in assessing what a reasonable success fee is the court can only look at the risk to which the receiving party's solicitors were contractually exposed. I am satisfied that they were contractually exposed as if this matter were a no win/no fee agreement and that this is a case where, had they been unsuccessful, there was no intention to go pursuing any other means and that the whole tenor of the CFA agreement was addressing the uninsured claim not the untraced scheme and consequently the claimant's solicitors entered into this matter on the basis of the definition of "win" was not met. In such circumstances, they are entitled to a success fee."
Earlier in his judgment, the Judge had summarised the submission made to him by Mr. Marven which was that a win was guaranteed because even if the claim in court failed on the ground that it was not possible to identify Mr. Shorrock as the negligent driver, the claimant would recover under the Untraced Drivers Scheme which calculates the sum payable in the same way as does the court in a damages action. There had been an offer to pay full compensation under that scheme in 2005 and it was therefore inevitable that the claimant would recover. On its true construction, the CFA covered both types of proceeding and therefore the success fee calculated on the basis that there was any substantial risk of non-recovery was wrong in principle.
In his Skeleton Argument which was before the Judge, Mr. Marven submitted that the claimant's solicitors were not contractually exposed to any risk of non-payment at all. This was because they would be paid if the claim against Mr. Shorrock succeeded under the Uninsured Drivers Agreement under the CFA by the MIB. The Untraced Driver's Scheme is not a cost-bearing scheme except to a very limited extent, but if success were achieved under that agreement it would still count as a "win" under the CFA. This would mean that these costs, including the success fee, could not be recovered from the MIB because on this hypothesis his civil action for damages would have failed at the preliminary issue stage and been dismissed. However, the claimant would be liable to pay them out of his Untraced Drivers Agreement award under the CFA. Contrary to what the Judge was to find, there was always an intention to pursue such a claim if the action for damages against Mr. Shorrock failed. The solicitors were therefore not at risk, although the claimant was. Mr. Marven suggested that the offer of a success fee of 5% was therefore generous: he did not withdraw it.
It is clear from his reasons quoted above that the Judge decided that the CFA concerned the claim against Mr. Shorrock which, if successful, engaged the Uninsured Drivers Agreement. He said that was its "whole tenor". However. the issue which the Judge decided was not actually an issue. The MIB was not submitting that there should be no success fee, but that it should be 5% for the reasons which appear above. He decided to award a success fee but did not consider whether it should be 5% because of the low level of risk, or alternatively the unreasonable way in which the funding of this action had been approached. He decided instead that a success fee was payable because "consequently the claimant's solicitors entered into this matter on the basis of the definition of "win" was not met". I think that this probably means that a recovery under the Untraced Drivers Agreement would not be a "win" as defined. I am afraid that I am not absolutely clear that the Judge dealt with the submission which was made to him and, in these circumstances, it is necessary for me to do so.
The fee issue: stage 1: decision
My conclusion is that this CFA was entered into to cover the damages action against Mr. Shorrock and the MIB and not a claim for a payment from the MIB under the Untraced Drivers Agreement. This conclusion is based on a construction of the CFA, and partly on extrinsic matters. I think that the Judge came to the same conclusion, and I think he was right.
The CFA defines what it covers as a "claim against Michael Shorrock and the Motor Insurers Bureau for damages for personal injury for John O'Brien suffered on 10th July 2002" and other matters related to that claim. It includes provision for the making of Part 36 offers, which can only be made in claims to which the Civil Procedure Rules apply. In those provisions the CFA refers on several occasions to the level of the "damages" which may be awarded in the claim. There are references to interim damages and provisional damages which are familiar aspects of the powers of the civil courts in personal injury claims. The CFA when supplied to the claimant was accompanied by an explanatory document which has a definition section. The claim is defined as a "Your demand for damages for personal injury whether or not court proceedings are issued." Damages are defined as "Money that you win whether by a court decision or settlement."
A payment under the Untraced Drivers Agreement is not the payment of a claim for damages. It is the payment a sum of money which is awarded under the scheme. It is not "won" from the MIB, but determined and awarded by that body. It requires proof that the death or injury which is the subject of the claim was caused in such circumstances that on the balance of probabilities the untraced person would be liable to pay damages to the applicant in respect of the death or injury. That sum is to be calculated in the same way as a court applying the relevant law would assess the damages if a successful claim for damages had been made against the untraced person. The claim is to the MIB, which will decide the outcome. There is a right of appeal to an arbitrator and the ability to recover costs is very limited. It is, therefore, a conceptually different kind of "claim" from a damages action against Mr. Shorrock in which the MIB is entitled to participate because it has a contingent liability under the Uninsured Drivers Agreement to pay the sum awarded in damages against Mr. Shorrock if he cannot do so. The CFA only refers to covering one claim, in the singular, and it is that against Mr. Shorrock and the MIB for damages. For this simple reason in my judgment it relates to those proceedings only.
To find otherwise would mean that the claimant might have been liable to pay all his costs of the claim against Mr. Shorrock, should it have failed, including a success fee. Further, he would then also be liable to pay all the irrecoverable costs incurred on his behalf in quantifying his claim after the date of the CFA, including a success fee. There would have been other ways of funding such a claim, such as a contingency fee which would require him to pay a share of the sum of money recovered from the MIB under the Untraced Drivers Agreement or even an old fashioned agreement whereby he agreed to pay the costs in any event knowing that he would be receiving substantial damages from which he could do so. Were he to enter into arrangements of that kind, it would be expected that his litigation friend and, one would expect, his solicitors, would be astute throughout to ensure that costs were strictly controlled because they were going to be paid from the sum which had been judged necessary to be sufficient for his compensation. It would be highly unlikely that he would agree to pay success fees to the lawyers of 100% on that assumption. Any lawyer who permitted a person in the position of this claimant to enter into such a potentially disastrous agreement would be exposed at least to the risk of a professional complaint. There would certainly be a duty to the claimant to explain to his litigation friend exactly what this agreement meant if it were to have any prospect of being enforceable against him in that sense. I have examined the letters which the solicitors wrote and the attendance notes which have been shown to me and there is no such warning. This can only be because it never entered the contemplation of the solicitors that circumstances might arise whereby they would seek to recover their costs of the failed action and of the application under the Untraced Drivers Agreement from the claimant's damages by applying the CFA to both claims. It appears to me that this context is relevant in deciding what the true construction of the agreement was. This does not breach the rule against admitting the previous negotiations of the parties and their declarations of subjective intent, see Lord Hoffmann's third proposition in ICS v West Bromwich Building Society [1998] 1 WLR, 896, 913B. It is rather artificial to regard the declarations by the solicitors to their client as either negotiations or declarations of subjective intent. This was not in any real sense an arms length negotiation. The solicitors owed a duty of care to their client to give proper advice to their client in relation to the benefits and drawbacks of the CFA which they were offering to his litigation friend. What they said about it is something which would affect the way its language would have been understood by a reasonable man receiving that legal advice, see Lord Hoffmann's second proposition. It appears to me that the admissible context includes the fact that a solicitor was advising the victim of a very serious road traffic accident through his litigation friend about an issue which was central to his whole future. In this situation there is no obstacle to giving the words in the agreement their natural and ordinary meaning which is that they applied to a single proposed claim to be brought in a court for damages against Mr. Shorrock, which, if successful, would result in an award against him for damages for personal injury which would be satisfied by the MIB under the Uninsured Drivers Agreement. Those words are not, in my judgment, apt to include an application to the MIB for an award of money under a scheme which is not adversarial and lacks many of the features of a court action which are referred to in the CFA. I should not be understood to be expressing any reservations about the utility of the Untraced Drivers Agreement. Whether it is, or is not fit for purpose is beside the point which I have to address. It is enough for me to say that it is not the same as a damages action and could not be covered by a CFA of the kind I am dealing with without specific words to bring that result about.
In the alternative, Mr. Marven argues for a 5% success fee on the basis that it was not reasonable to proceed in the way which the construction of the CFA which I have upheld involves. This is because the costs relating to quantum were equally valuable to the claimant whichever agreement the claim was pursued under, and he was bound to recover damages in full one way or the other. The choice of the Uninsured Drivers Agreement therefore imposed substantially increased costs on the MIB without any benefit to the claimant.
The only way in which the claimant could recover the very large costs necessary to prove his claim as to quantum was to succeed in his court proceedings. Otherwise, the money would be usefully spent but not recoverable from the MIB because of the cost regime in Untraced Drivers claims. It seems to me that it was entirely reasonable to choose a means of proceeding which left his damages free for the purposes for which they were intended, rather than being used in part to fund the cost of obtaining them. I therefore reject Mr. Marven's alternative submission on this point.
If the claim had failed at the preliminary issue, it seems to me that the solicitors would not have been able to recover the costs covered by the CFA from anyone. Effectively they would have funded that part of the preparation of the Untraced Drivers application which occurred during the currency of the CFA. Having taken that risk, it was not unreasonable to conduct this case as a normal trial in which liability was disputed and dealt with by a preliminary issue. A consequence of the way in which this case was dealt with was that quantum costs were incurred between November 2008 and June 2011 where there was a risk of non-recovery. It is true that there was little or no risk of non-recovery of the quantum costs between June 2011 and June 2012 because, if the claimant had failed at the preliminary issue, such costs would not have been incurred under the CFA which would have come to an end. If work had continued at all it would have been funded in some different way, less advantageous to the claimant. If, as happened, the claimant succeeded on the preliminary issue the costs would be recovered under the CFA and the main risk to recovery would arise only if a Part 36 offer were made and not beaten. I accept that this is a factor which is relevant to the assessment of the success fee, but not that it is capable of reducing it to 5%. I shall therefore have regard to it when dealing with Part 2 of the fee issue.
The fee issue Part 2: if not 5% then 67%?
The Judge accepted a submission on behalf of the MIB that the success fee of 100% which appears in the CFA was too high, even though the case had gone to trial. He allowed 75% instead. However, he did not accept (or specifically rule on) a submission which had been made orally and in writing that the success fee should not exceed 67%. The submission was made on the basis of the risk assessment completed by the claimant's solicitors in September 2009. The solicitors operate by means of a "Board" which assesses cases internally and decides which ones to undertake on a CFA and at what level of success fee. The risk assessment identified 5 particular risk factors which had been identified by the Board as follows:-
"A. Lot of contemporaneous evidence lost due to passage of time."
B. Recollection of witnesses faded due to passage of time.
C. Therefore difficulties in establishing identity of driver who is also uninsured so complexities of MIB uninsured scheme will apply.
D. What evidence there is re ID of driver described as "circumstantial" by police therefore there may be difficulties establishing ID even on balance of probabilities
E. Usual quantum risks – very high value case. MIB likely to resist transfer to uninsured scheme."
The Board assessed the prospects of success at 60% and proposed a success fee of 100%. Under the ready reckoner which was used by the profession quite commonly for assessing a success fee on the basis of a percentage estimate of chances of success this figure should have been 67%. That is because a 100% success fee is justified by a riskier case where the prospects are only 50%. The concept is simple: if the prospects are 50%, half the cases will fail and it will be necessary to recover twice the base costs on those that win to fund those that do not. As the prospects rise, so the uplift needed to fund the failures falls because there are fewer of them.
A complicating feature of this assessment may be the practice which developed by negotiation between the profession and insurers whereby a sliding scale of staged success fees was adopted which would apply to all cases within a particular category. This did not apply to this case because the accident was too long ago. Under the protocol agreed for road traffic claims, the success fee would have been 12.5% if the case concluded before trial, and 100% if it concluded at trial. The quid pro quo for the very high fee for all cases which went to trial was the much reduced fee for the much large number of cases which did not. This approach no doubt accustomed the profession to seeking 100% uplift in any case which went to trial. If that is so, it led to error, see Atack v. Lee [2005] 1 WLR 2643 at paragraph 12. That error appears to have featured in some of the submissions made on behalf of the claimant before the Judge and, perhaps, in his decision.
In this case the CFA said this about the success fee:-
"The success fee is set at 100% of basic charges where the claim concludes at trial; or 100% where the claim concludes before a trial has commenced."
This was a single stage CFA with a success fee fixed at 100% whenever the case concluded, that is whether it went to trial or not. Any other construction of the language would be, as Mr. Marven submitted, "sophistry". It was also a CFA which was to cover an action in which a large quantity of quantum costs would not be incurred under the CFA if the case failed on liability at a preliminary hearing. They would be incurred after the end of the CFA and on some other funding basis. This procedure was firmly in the mind of the solicitors before the CFA was executed because in their letter of advice about it to the litigation friend, dated 14th September 2009, they said "In general I would hope to complete a claim the preliminary stage [sic], which is determining whether we can obtain judgment against Michael Shorrock in 12-18 months." This language is not entirely clear but can only sensibly mean that they expected a trial of the preliminary issue which would determine liability within that time scale. Therefore the exposure of the solicitors under this contract was never to the full costs of a failed action including liability and quantum. This is true of many split trials and is not a reason for refusing a success fee on the costs incurred after the risk has been eliminated by the success on liability. Nor is it any justification for reducing the success fee in respect of the costs after the event so as to create a staged success fee with the benefit of hindsight. However, it is capable of being relevant to assessing the reasonableness of the overall, single stage success fee which the solicitors chose to insert into the CFA. That is because it was predictable at the date of the CFA that this risk could be managed, and it would be reasonable to reflect that in a success fee. The obligations imposed on the solicitors by the CFA are a critical factor in assessing the reasonableness of a success fee, see C v. W [2008] EWCA Civ 1459. In this case, in respect of a significant proportion of the costs which would be incurred after the liability trial had resulted in a judgment the risk was much lower than it was in respect of the costs before that date. It was not absent entirely but principally involved the risks created by a potential Part 36 offer (the CFA was more generous to the solicitors in the present case than it was in C v W because it provided that they could recover base costs without success fee if he rejected a Part 36 offer on their advice, but failed to beat it).
When the Judge came to deal with this issue, the proper level of the success fee having rejected the MIB's principal case, he said this:-
"This is not a staged success fee and indeed the wording is clear, the success fee is set at 100% of basic charges where the claim concludes at trial.
"This claim did not conclude at trial but it is not sufficient to stop there because that does not per se mean that a 100% success fee is the correct level of success fee. It would be completely contrary to public policy that if every time that that was inserted that were to be the proper interpretation. I have glanced, and I put it no more than that, at the witness statements which clearly were available, but what I have given more consideration to are the prospects of success set out in the risk assessment. I think that Potter Rees were to a certain extent brave in taking the uninsured route but it says unequivocally therein that the prospects of success were set out at that time at 60% and even though this matter goes to trial, I am not satisfied that they have increased to such a level, despite the wording of the CFA, that the recoverable item should be at 100%.
"It is a matter of discretion rather than technical analysis that the court is entitled to use and in this particular matter I am going to set the success fee, bearing in mind that the matter went to trial, but not at 100%. I intend to allow a success fee of 75%."
It is common ground that when assessing a success fee the court considers the position as it appeared to the solicitor at the time when the CFA was executed, see, if necessary, U v. Liverpool City Council [2005] 1 WLR 2657, at paragraph 20. Hindsight is impermissible. A staged success fee agreed at the date of the CFA does not offend against this principle, but it appears to me that the approach taken by the Judge does. He decided that he could not allow a success fee of 100% even though the case went to trial because the risks had not increased after the CFA to such a level. He therefore refused to allow 100%. Presumably, therefore, if he had found that the risk of failure had increased since the risk assessment to 50% he would have allowed the 100% fee claimed. This becomes clear in the final paragraph quoted above. He sets the success fee at 75% "bearing in mind that the matter went to trial". What he should have done was to assess the fee as at October 2009 before the proceedings had been issued. The risk assessment clearly worked on the basis that the MIB were likely to contest the identification issue, and still assessed the risk of failure as 60%. To allow a higher fee than would be justified by the arithmetical method I have explained above because the matter went to trial (which is the only reason given for choosing 75%) is in my judgment to commit the error of hindsight.
The arithmetical method of conversion of risk assessment to success fee was applied by the Court of Appeal in C v. W cited above at paragraph 24. Moore-Bick LJ assessed risk himself, applied the ready reckoner and produced a success fee. All the "discretionary" features of the exercise are taken into account in the assessment of the percentage prospects of success. In undertaking this exercise the profession had to balance competing considerations. The ATE insurers wanted the prospects to be good and loaded the premium or refused cover if they were not. The solicitors wanted the prospects to be bad because that would justify a higher success fee if the case succeeded. With these considerations pulling in opposite directions there was some incentive to assess the prospects as accurately as possible. Having done that, there is little room for further adjustment at the conversion stage which is, and rationally should be, a matter of arithmetic. I will mention one other case on this issue. In U v. Liverpool City Council, cited above, at paragraph 25 the Court of Appeal justified a success fee at 50% on the basis that arithmetically it amounted to odds of 2:1 which accorded broadly with some empirical evidence. In that case the court also said this at paragraph 22:-
"Alternatively, he could have selected, as he did in fact, a single-stage success fee, being a fee which he would seek to recover at the same level however quickly or slowly the claim was resolved. In those circumstances it would not be possible to justify so high a success fee."
This seems to me to show that two factors are in play to which the Judge gave no weight. First, if the risk assessment is adequate it is a matter or arithmetic to convert it into a success fee. The Judge did not doubt the accuracy of the risk assessment at 60%. Indeed, he could not do so having only glanced at the witness statements and based himself largely upon the risk assessment. There is nothing wrong with his decision not to conduct a thorough re-assessment of the risks by reference to the original evidence. This would be practically impossible in many cases. Where, however the court has not done this it is difficult to discern a proper basis for departing from the assessment conducted by the solicitors at the time. Secondly, where a single stage success fee is used it will be difficult to justify a high level.
For these reasons I consider that there was no proper basis for the Judge to refuse to apply arithmetically the consequence of the risk assessment of the solicitors, and that he should therefore have allowed a success fee of 67%. The fact that this was a single stage success fee, and that a proportion of the costs were not going to be incurred but unrecovered because of the early stage at which liability was to be decided were factors militating in favour of reducing the success fee below the arithmetical result of the risk assessment, and there was no countervailing factor which required an increase. In the result I have decided to exercise my own discretion and to fix the success fee at 67%. This is a relatively minor adjustment to the result, but it does not result from a different impression being formed from the same factors. It results from giving effect to the factors I have identified which the Judge did not take into account.
The date issue
The Practice Direction to CPR Part 44 as it was at the material time contained paragraph 19.4(2) which reads
"19.4
…………
(2) Where the funding arrangement is a conditional fee agreement, the party must state the date of the agreement and identify the claim or claims to which it relates (including Part 20 claims if any)."
CPR 44 r 15 as then in force provided
"44.15— Providing information about funding arrangements
(1) A party who seeks to recover an additional liability must provide information about the funding arrangement to the court and to other parties as required by a rule, practice direction or court order."
In October 2009 when the CFA was dated, CPR 44 r 44.3B(1)(c) provided as follows:-
"44.3B— Limits on recovery under funding arrangements
(1) Unless the court orders otherwise, a party may not recover as an additional liability–
…………
(c) any additional liability for any period during which that party failed to provide information about a funding arrangement in accordance with a rule, practice direction or court order; "
The CFA was made on the 21st October 2009. The Notice of Funding was given on 24th March 2010 but was sealed by the court on 1st April 2010 which was the date when proceedings were issued. The boxes which were ticked said that in respect of "all claims herein" the case is now being funded by a conditional fee agreement dated 6th November 2008 which provides for a success fee and an insurance policy issued on 12th November 2009 with a level of cover of £150,000 and premium.
When the CFA was eventually disclosed to the MIB after the Judge effectively compelled disclosure during the detailed assessment proceedings a more complex picture emerged, as described above and repeated here for clarity. At the top of the first page this appears:-
"Agreement date 6th November 2008. (NB As agreed, this Agreement takes effect from when you first instructed Potter Rees)"
The second page of the CFA substantially concerns the right to cancel under the "doorstep selling" regulations, the Contracts Made in a Consumers Home or Place of Work etc Regulations 2008. The litigation friend was told in the required notice that he had the right to cancel this contact if he wished to do so within 7 days of receipt of the notice. As their name suggests these Regulations apply to a contract between a consumer and a trader which is for the supply of goods or services to the consumer by a trader and which is made during a visit by the trader to the consumer's home. The evidence shows that it was signed during a visit to the home of the next friend by the solicitors on 21st October 2009. By giving this Notice, the solicitors were declaring to their client that this was the date when the contract was "made". It could be cancelled at any time up to 28th October 2009 for this reason. In order to protect them in the event of cancellation the solicitors inserted a term which gave them authority to work under the CFA "throughout the period of 7 days from its date". The preamble to this term required the litigation friend to confirm that he had signed a CFA with Potter Rees on 21st October 2009 and he did so. Therefore, at the top of page 1 the CFA states that its date was 6th November 2008, but on page 2 "its date" is said to be the 21st October 2009 because the solicitors were given authority to work for 7 days from "its date", being that date.
The claimant submits that the Judge held that the obligation under paragraph 19.4 of the Practice Direction was to inform the other party, by the Notice of Funding, of the date which the CFA came into effect, rather than the date when it was actually made. The MIB submits that this is simply wrong and that on its ordinary construction paragraph 19.4 requires the date when the agreement was made to be communicated to the other party. Since the claimant's solicitors did not therefore provide the date of the agreement, but a different date, they were in breach of the obligation. The MIB accepts that the court has power to make an order that the success fee should be recoverable even if it is right about its submission on the construction, but said that this would require a relief from sanction for which no application had been made and which should not be granted. In the absence of such an application no success fee at all should be recoverable because the claimant did not comply with the Practice Direction at any stage. The MIB further submits that the truth of the position only became clear to the MIB when the Judge, at an earlier hearing, had compelled the claimant's solicitors to disclose the CFA and risk assessment. This had caused an adjournment because the MIB only then realised that the CFA had been executed long after the date in the Notice of Funding and wished to consider the position. At the resumed hearing they submitted that whatever the proper success fee on and after the date when the CFA was executed, it should be lower in respect of the retrospective part which covered 6th November 2008-21st October 2009. The Judge agreed and allowed a success fee of only 40% in respect of that time. The MIB's complaint, in essence, is that there was a serious failure to comply with the Practice Direction because the use of the 6th November 2008 as the date in the Notice of Funding allowed the claimant's solicitors to claim the maximum possible success fee over the longest possible time without alerting the MIB to the possibility that they might make submissions that there should be a lower success fee (or none at all) for the first period when the CFA had retrospective effect. The fact that this was significant is shown by the fact that when they were able to advance those submissions they were successful to an extent and the claimant has not sought to challenge that outcome.
In response to this the claimant eventually made an application for relief from sanction on 28th May 2015 and the MIB responded with a witness statement which I received on the morning of the hearing.
The ruling
The Judge gave a ruling on this issue. Again it was ex tempore, and was given during a hearing as is necessary in detailed assessment proceedings. The transcript reads as follows:-
"I think the reality here is that in this particular instance I have an issue as to what exactly the date of the agreement is and I understand fully Mr. Marven's argument that it would stand to reason that the date of the agreement is the date that that agreement is signed but if that is the case, then the wording of the fact that you can retrospectively date these things becomes a complete nonsense. It is the date that is actually there. I take Mr. Robbins' point, not that Mr. Marven and his team would necessarily have done so at all, but there are people who would jump up and down and say "they are being misled". For the purpose of –you all know where you stand in this particular matter. You also, those of you --- you have all been in front of me on quite regular occasions and you know the way in which I run my court; I am old fashioned, pragmatic and I hope I have two overriding objectives; fairness and the interests of justice. In this instance I am going to treat for the purpose of this particular part that there is not a relief from sanction that the correct date is imposed upon it and that it runs from 6th November."
I should record that the Judge gave other rulings on quite technical points taken by the MIB at this hearing, and that no complaint is made about some of them. This was a demanding hearing which concerned a large sum of money and involved a lot of technical argument. It is unsurprising that the sharp focus of an appeal reveals aspects which were capable of improvement. I doubt if any judge could conduct a hearing of this kind without falling victim to infelicities of expression. What the Judge decided here, I think, was that the Notice of Funding did not comply with the Rules, but that no-one was misled and that therefore, in the interests of fairness and the interests of justice no question of relief from sanction arose. If he had held that the Notice of Funding had contained the correct date of the document it would have been unnecessary to refer to broader principles of justice, fairness and pragmatism. This is why he said he was "going to treat for the purpose of this particular part" the document as having the correct date on it.
In my judgment the Judge was right if he held that the Notice of Funding did not comply with the Practice Direction because it did not contain the date of the document. I shall first explain why I have come to that conclusion and then address his approach to relief from sanction.
I have set out the relevant parts of the CFA above. In my judgment the position is quite clear. The CFA was "made on" and "dated" on 21st October 2009 as the solicitors accepted when allowing their client a 7 day cancellation period. The agreement made on that date provided that as between the parties it would have retrospective effect so that the solicitors' entitlement to a success fee in the event of a win would extend to costs incurred throughout their retainer prior to the date of the CFA. That term, like the rest of it, was agreed on the date the CFA was made. The Practice Direction required the solicitors to give notice of the date of the agreement. Where that is not the same as the date when the agreement was to come into force (which might be before or after the date of the agreement) it is the date of the agreement which must be given. Therefore the solicitors failed to comply with the Practice Direction at any time until they disclosed the CFA, after refusing to do so for some time, when they came under direct pressure from the Judge at a hearing of the detailed assessment of costs. It follows that unless the court otherwise orders they cannot recover any success fee at all.
The problem in this case is now historic because all the relevant provisions and rules have been repealed. It is necessary to give a brief account of it because it is relevant to the issue of relief from sanction. The practice of "back-dating" CFAs is not improper as a matter of contract between solicitor and client. However, there is a clear potential for abuse when recovery from a paying party under an order for costs arises. CFAs with success fees were very valuable instruments when they were entered into at a very early stage when prospects of success may have been very uncertain, and where at a later stage they improved considerably, for example because the defendant admitted liability. A much higher success fee might be justified if the date of the CFA was long before that admission. Less starkly, a solicitor may choose to investigate a case without committing to conducting it to a conclusion and later decide that the prospects justify that commitment. Backdating the agreement involves claiming a success fee on the basis of exposure to risk which was not, in fact, present. That is what happened here. As between the parties to the contract that is not objectionable (subject to the client's rights as a consumer and as the client of a regulated professional owing him legal duties). Indeed given that it excuses the claimant from paying the pre October 2009 costs himself if the claim fails, the backdating is beneficial to him. As between the parties to the litigation the position is quite different. The aim of the Rules was that the defendant in CFA funded litigation should know the level of risk as to costs to which he was exposed, as far as that was compatible with preserving the claimant's privilege in the advice as to the merits which he had received. This was to enable the defendant to make sensible decisions about whether to contest the litigation, including whether to settle the amount of costs after a judgment.
This principle was articulated by Rix LJ in Hawksford Trustees Jersey Ltd. V. Stella Global UK Ltd (No 2) [2012] 1 WLR 3597. After explaining the provisions which apply in the present case, he said:-
"The clear intention is that it is to be regarded as unfair for a defendant to be put in a position where he proceeds with litigation in ignorance of his potential liability for the increased costs of a claimant's funding arrangements."
This observation was relied upon by Mr.Bacon QC, on behalf of the claimant, to show that what matters is that the defendant must know the date when the "meter starts to run" (my phrase not his). He says that in a back-dating case that means that it is the start date of the agreement which matters, not the date of the agreement. Since the claimant's solicitors gave the start date, then they either complied with the Practice Direction or at least did no harm by failing to do so. I do not agree. Rix LJ did not have the present situation in mind, but his words are apt to cover it. What matters is that the paying party must know, to the limited extent possible, not only the existence of his additional liability but also its extent. That includes knowing any matters which might be relevant to any arguments available to limit that liability and in particular whether any part of the costs now claimed to attract a success fee were incurred before the date of the CFA. If the date of the CFA is accurately given in the Notice of Funding and, when the bill is delivered, a success fee on costs incurred before that date is claimed then the position becomes clear. Otherwise there is a danger that the court may award, or the defendant may agree, a success fee on pre-CFA costs where that is not justified at all, or at least not at the level claimed. For this reason, anything less than strict compliance with the Practice Direction should be regarded as significant.
It appears that during their life, the Rules never really caught up with the development of retrospective CFA agreements. They were regarded as contrary to public policy in some quarters. That issue was not settled until January 2009 in Forde v. Birmingham City Council [2009] 1 WLR 2732, to which I shall return at the end of this judgment. Often the difference between the start date and the date of the agreement will be quite small, and the amount of costs affected likewise. Where, as here, the relevant period was nearly a year, the significance of the issue is greater. If solicitors want the benefit of risk taking, then they should actually take the risk by committing to the conduct of the action. I make it clear that I make no finding of sharp practice in this case. This has perhaps been a grey area. To conduct litigation without committing to a risk but to claim a fee as if one had is having the cake and eating it. To do that while supplying only the start date (which is the most advantageous date to the claimant's solicitor) to the other side is not appropriate. There is nothing in the rules to prevent a solicitor giving Notice of Funding to say, in this case, that the date of the agreement was 21st October 2009 but it was to have effect from 6th November 2008.
I do not think that it is an answer to my criticism of this Notice of Funding to say, as Mr. Bacon does, that the Judge had the CFA and that nobody could therefore be misled. A Judge has plenty to do without scouring documents to see what points might be available to a party which does not have them. A party's duty to the court is not fulfilled by placing a document in a very large file, refusing to give it to the other side, and giving the file to the court. That is why the normal practice requires disclosure of the CFA at the assessment stage.
This position is compounded by the way in which an important meeting of 4th September 2009 was dealt with. I have set out part of the attendance note at paragraph 7 above. A note was made justifying the presence of two fee earners at the meeting for various reasons. HP was there, among other things, to advise on funding issues because at this stage the CFA had not been signed. The attendance note specifically refers to advice being given about the CFA. A claim for costs in relation to that meeting was made in the Bill. The narrative part of the Bill contains two claims totalling £792 in basic charges for this meeting. The partner's (HP) contribution is summarised as follows:-
"Discuss care arrangements and impact it has in advantages or disadvantages for uninsured or untraced route, in detail explain Newcombe's current view on care, go through other aspects of care and interaction of claimant, discuss results of investigations with police, funding issues…"
The entry for the Grade B fee earner for the same meeting is as follows:-
"Investigating liability and possibility of getting claim under uninsured scheme, to see claimant in light of most recent MIB report which suggested lower level of awareness than was apparent."
The CFA was first signed on a date after this meeting and returned to the solicitors by post, but it was not signed properly. This required a letter of 13th October and occupied part of a further meeting at the home of the litigation friend on 21st October 2009. That meeting is described in the Bill as "Take witness statement and discuss in detail numerous problems with carers – 2 hours 12 minutes." The attendance note confirms that this work was done, but the significant feature is that there is no mention in the Bill of the work done in order to secure the execution of the CFA. There is a reference to "funding issues" in the entry for 4th September 2009 but that is all. The Bill provides no information at all about how and when the CFA was executed.
The result of the Notice of Funding, the refusal to disclose the CFA until compelled to do so by the Judge, and the omission of any reference to it in the Bill was to leave the MIB in ignorance of the fact that a year's worth of costs had been incurred before the solicitors had been contractually obliged to take the risk of conducting the case to a conclusion potentially without payment. It seems to me that this is a more serious state of affairs than the Judge appreciated and that had he been able to spend the time on the question which has been available to me in appellate proceedings, he would have appreciated that the interests of justice were not all stacked on one side of the scales. This was a factor that he could, and should, have weighed in the balance. If I am right that he found that the Notice of Funding did not comply with the Practice Direction because it did not give the date of the CFA, he should have turned his mind to the question of relief from sanction and carried out a rather more structured assessment of that than he did.
I therefore set aside his decision (as I have interpreted it to be) that the court should simply "otherwise order" for the purposes of CPR rule 44.3B(1) without considering any further sanction for non-compliance with the Practice Direction. If relief from sanction is granted to allow success fees in respect of some or all of the costs of the action, consideration on the merits is required to decide what success fee should be allowed in respect of the costs incurred before the date of the CFA, as opposed to the 67% which I have allowed for the costs generally. The Judge was belatedly able to carry out that function and allowed a reduced success fee for that period of 40%.
I approach the relief from sanction in accordance with the guidance given by the Court of Appeal in Denton and others v. TH White [2014] 1 WLR 3926. For the reasons given above, I consider that there was a breach of the Practice Direction and that it was significant. I consider that it occurred because the solicitor who gave Notice of Funding thought that the start date of the CFA was all that the MIB was entitled to know and I also consider that the solicitors did not want to reveal the fact that the date of the agreement and its start date were nearly a year apart. I infer this from the Notice of Funding, the refusal to disclose the CFA, and the way in which the bill was drafted in that regard. I have made no finding of sharp practice and I am sure that the solicitors acted as they did because they thought it was appropriate to do so. I do not agree. It seems to me to be quite obvious that a rule which requires a party to disclose the date of an agreement requires disclosure of the date when the agreement was made. If the party wishes to derive a benefit from the fact that it was to be effective before it was made then by one means or another that fact must be made plain to the paying party and not withheld. The best means would be disclosure of the facts in the Notice of Funding, but the very least the Rules require is accurate disclosure of the date of the agreement and a bill of costs which makes it clear that a success fee is being claimed on costs incurred before that date. Neither of these things happened in this case and that was an error by the solicitors the effect of which would have been to increase their financial return from the case had not the Judge intervened as he did.
The third stage of the Denton v. White approach requires me to evaluate all the circumstances of the case so as to enable me to deal justly with the case, including the need for litigation to be conducted efficiently and at proportionate cost and to enforce compliance with rules practice directions and orders. I have sought to set out the material factors above, and my conclusions about them. In my judgment, the rules as to disclosure of funding arrangements were of particular importance in promoting the efficient conduct of litigation at proportionate cost. CFAs were designed in such a way that individual successful cases were conducted at disproportionate cost in order to facilitate access to justice by funding other cases which failed. An unsuccessful defendant was required in part to fund the cost of pursuing other, successful, defendants in other cases. That situation came with certain strings attached, imposed by the rules. A breach which had the effect potentially of increasing recovery is a significant matter. On the other hand, the MIB in this case did know from the start of proceedings that there was a CFA with a success fee and that it went back to November 2008. I do not think that they would have conducted the litigation in any different way until right at the end if they had thought that the date of the CFA was October 2009. The overall efficiency of the litigation was not affected but the efficiency and potentially the accuracy of the assessment of costs was. I should therefore grant relief from sanction in that I allow the success fee at 67% from 21st October 2009 which is the full level which I have determined it should be. In relation to the period 6th November 2008 to 21st October 2009 I grant relief from sanctions and allow a success fee at 50% of the level which would otherwise have been appropriate. The Judge determined that this was 40% and the success fee allowed therefore in respect of the early costs will be 20%. I have been tempted to disallow it in its entirety, but I consider that this would be disproportionate if the 40% level is right. I also would not wish to inhibit the access to justice of gravely injured and vulnerable people by imposing a sanction at too great a level. Retrospective CFAs should attract a degree of scepticism for the reasons I have given above. They produce reward for a risk which was only being run to an extent which could be fully controlled by the solicitor. I accept, however, that they are not contrary to public policy per se. In this regard, I have taken into account the decision of Christopher Clarke J, as he then was, in Forde v. Birmingham City Council [2009] 1 WLR 2732, paragraph 150.
"In some, perhaps many, circumstances a retrospective success fee, or its amount, may be unreasonable, either as between the parties or as between solicitor and client. But this will not always be so. The court has, in my opinion, enough weapons in its armoury, in the form of the criteria applicable on a detailed assessment and the provisions of the Costs Practice Direction and the Practice Direction on Protocols, to disallow or reduce retrospective fees that are unreasonable, as in this case."
There is no appeal against the assessment of the success fee pre-CFA at 40% in this case by either side. I myself may have made a different and lower assessment had I been conducting it. It appears to me that my sanction in relation to the breach of the Practice Direction (whose significance is reinforced by the passage just cited) should be proportionate to that assessment rather than to the lower assessment which I may have made myself. This is why I have allowed what still seems to me to be a generous success fee for costs incurred during a time when the solicitors did not feel able to commit themselves to conduct the matter to trial.
Result
The appeal is therefore allowed to the extent that the success fee in respect of cost from 6th November 2008 to 21st October 2009 will be 20% and not 40%. The success fee for costs after 21st October 2009 will be 67% and not 75%.
Consequential Matters
When this judgment is handed down I hope to make the order disposing of this appeal and costs and any other necessary matters. If an order can be agreed there is no need for the parties to attend. If not, I direct written submissions from both parties by 12 noon on the day before handing down. If the parties wish to attend a hearing they may do so, if not I will deal with any disputed issues on paper. They should state how they wish to proceed when filing written submissions. I will conduct any hearing by telephone if arrangements can be made.
Costs
Mr. Justice Edis:
This is a judgment on the costs of an appeal by the MIB, and an application by the claimant for relief from sanction. The judgment on the substantive appeal and application has been handed down today, after being circulated in draft and I have received written submissions about the costs order I should make from both parties. Both parties have indicated that they are content for me to decide the costs issues without a hearing taking into account those submissions. This is my decision.
The first question is to identify the successful party. The appeal was brought by the MIB who sought to an order that the success fee should be fixed at 5% on the issue as to the construction of the CFA, or disallowed altogether on the date issue. I held that the success fee of the claimant's solicitors should be 20% for the first year of their retainer and 67% after that. This represented success for the MIB on its fall back position on the overall success fee level and success on the date issue, followed by a grant to the solicitors of relief from sanctions.
The MIB therefore lost on one major legal argument concerning the construction of the CFA which I held was limited to the claim under the Uninsured Drivers Agreement. They won on the date issue, but did not succeed in defeating the whole claim to a success fee because I allowed a reduced fee for the period during which the CFA was retrospective. They won in their short, free standing submission that a success fee in excess of that warranted by the solicitors risk assessment could not be justified, at least on the grounds given by the Judge. Overall, they are better off as a result of having brought the appeal, but not nearly as much better off as they would have been had all their arguments succeeded. I consider that the MIB is the successful party and start from the proposition that the general rule is that they should have their costs of the appeal.
I do propose to make a discount from that order for costs to reflect the failure on the construction issue in relation to the CFA. If the appeal had been limited to the risk assessment issue and the date issue it would have been shorter and, I expect, cheaper. I do not see why the claimant (or his solicitors) should bear the costs of lirigating that issue on which they won, without some adjustment in their favour.
The next question is the relevance of an offer in the form of a Part 36 offer which was made on 3rd February 2015. The claimant's solicitors offered to accept a success fee of 40% for the period before the date of the execution of the CFA, and 67% thereafter. In the result, they failed to hold the success fee of 40% for the early part but the MIB failed to beat the 67% in the second part. The offer letter demanded the costs if the offer were successful, although it would result in a reduction of the sum recoverable under the first instance judgment. The offer therefore has no formal effect. The MIB beat it both as to the sum recoverable and, in my judgment, as to the costs incurred to the date of the offer, However, I understand that the MIB failed to engage in negotiation after that letter and this is only explicable by their commitment to litigating the issue on which they lost. This is a relevant matter which should also be reflected in the costs order which I make. I propose to treat it as evidence of the importance to the MIB of the issue on which they lost, which I consider supports the discount from the costs which I propose to order.
I therefore rule that the claimant will pay the costs of the appeal, to be the subject of a detailed assessment if not agreed, and subject to a 30% discount. In this context, I have taken into account my belief that the date issue is of importance beyond its arithmetical result in this case, and that although I made no finding of sharp practice I did find that the use of the wrong date on the agreement was a clear error which, had it gone unnoticed, would have financially benefited the solicitors who made it.
The costs of the application for relief from sanctions are small, because it was served so late. Nevertheless, I consider that in principle they must be paid by the claimant (or his solicitors) because it was their default in giving an erroneous date on the Notice of Funding which required the application. This was a significant error for the reasons which I have explained. I therefore order the claimant (or his solicitors) to pay the costs of the application for relief from sanctions and I assess that 20% of the costs of the hearing were attributable to that application, in addition to the other pre-hearing aspects of it.
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Sir David Eady :
On 24 November 2014, Master Leslie refused to grant the Defendants summary judgment in this slander claim. Permission was given to appeal by William Davis J on 20 February 2015. It is an unusual case and, like the Master, I have found it troubling. This is mainly because the Defendants are seeking to rid themselves of the claim on a summary basis at a stage when the statements of case are inchoate: they leave it unclear as to how much of a factual dispute there would be if the case is allowed to proceed to trial.
Mr Otuo was a member of the Jehovah's Witnesses for some 40 years until in 2012 he found himself "disfellowshipped". He claims that one of the significant consequences of this was that he was shunned by friends and family and, in particular, that he has had no contact with his elderly mother for several years. He believes that this was wholly unmerited and has never been able to understand why he was treated in this way. There are prescribed procedures for the taking of such disciplinary steps although Mr Daniel, who appeared for the Defendants, emphasised that they are to be found in a confidential rule book to which reference should not be made in court save in so far as it is absolutely necessary.
What appears to have happened is that allegations of "fraud" had been made against the Claimant in a letter from an unnamed third party (which he says he has never seen) and these were examined by those given responsibility under those rules for doing so. Mr Daniel was at pains, however, to emphasise that the notion of "fraud" in this context was not such as to entail criminality, but rather bore a specific religious connotation, which he sought to define in his written submissions as follows:
"Fraud is defined as the intentional use of deception, trickery, or perversion of truth for the purpose of inducing another to part with some valuable thing belonging to him or to give up a legal right."
I confess to some puzzlement, as it seems to be a distinction without a significant difference. Surely anyone accused by reference to that definition would be seriously defamed in the eyes of any reasonable listener: it would clearly be an allegation of dishonesty. Yet Mr Daniel argued that "… if not de minimis, the actual damage sustained was very limited".
At all events, the relevant committee, on its findings of fact, determined that the Claimant should be "disfellowshipped" with all the profound consequences which, according to the Claimant, flowed from that. He told me that he was aware of the identity of the unnamed third party and doubted whether he ever wrote such a letter or accused him of "fraud" (in any sense). He says that he pressed for a sight of the letter from the outset but that it was never vouchsafed to him. He doubted whether it ever existed. At the resumed hearing before me, on 18 June 2015, those doubts were reinforced when Mr Daniel told me that it had been destroyed on data protection grounds; that is to say, because the Defendants took the view that they had no legitimate reason for keeping it.
In due course, the Claimant took such steps as were open to him under the prescribed procedures to challenge the finding of the original committee and his consequent "disfellowship": he wished to be reinstated. He assumed that this would be dealt with on paper, but the Defendants decided to hold a meeting to consider his application, which he was invited to attend in July 2013. It was at an early stage of this meeting that the defamatory words were spoken by the First Defendant which led to the present slander claim.
The words complained of are as follows:
"So just going back to July of last year when you were disfellowshipped, I think it was July 19 that it was announced to the congregation, is that correct? I think it was … do you… how do [you] view then what you were disfellowshipped for? Do you understand what you were disfellowshipped for? … Just to summarise what I thought you have said, is that even today you would not accept it was fraud … That is what you seem to be saying?"
The Claimant suggests that these words meant inter alia that he "… has been disfellowshipped from his congregation for committing the criminal act of fraud". There is also pleaded an innuendo to the effect that he had been disfellowshipped "… for unrepentantly committing the criminal act of fraud". He would no doubt argue that the words are thus actionable without proof of special damage.
Although he does not plead a meaning as such, Mr Daniel has argued that one of the reasons why the action should be struck out is that the words are not defamatory in any sense. He says that, in context, they meant no more than that the ground on which he had been disfellowshipped in 2013 was, rightly or wrongly, that of "fraud". As I have already noted above, however, he drew a distinction between "criminal" fraud and the type of fraud he sought to define, although I find it a difficult boundary to draw. He has to take on the burden of establishing that any reasonable listener would have understood the First Defendant's question to the Claimant in a non-defamatory sense; for example, to the effect that it was no more than a purely fact finding or administrative enquiry as to the ground on which the earlier decision had purportedly been reached.
Context is always important when assessing whether words are defamatory. Here, the actual meaning to be attributed may well depend on the evidence as to who was present, what exactly was their function and how much background knowledge they had. I am not asked on the present appeal to determine the meaning(s) of the words, but I do not believe that I can at this preliminary stage rule that the words spoken were so obviously not defamatory that the Claimant is left without a cause of action.
Mr Daniel also submitted, in the light of Jameel (Yousef) v Dow Jones & Co Inc [2005] QB 946, that the limited publication of the words could have caused no significant damage to the Claimant's reputation (let alone special damage), since the only people to have heard the remarks were the three other members of the committee who had been convened to address the Claimant's application for reinstatement. When the First Defendant spoke to them, they were not being told anything which they did not already know. There would thus be an abuse of process if the claim were allowed to proceed.
Indeed, one of Mr Daniel's grounds for summary disposal was that there had been no publication at all. I do not follow that. Albeit on a very limited basis, the words spoken by the First Defendant were plainly published to anyone within earshot. Whether any such communication was the subject of qualified privilege is a separate matter, which I shall shortly need to address, but I reject the notion that there was no publication at all.
As to the undoubted fact that publication was very limited, I was reminded by the Claimant of the words of Sharp J (as she then was) in Haji-Ioannou v Dixon [2009] EWHC 178 (QB), at [31]:
"Publication of a libel, or indeed a slander, to one person may be trivial in one context, but more serious than publication to many more in another. Much depends on the nature of the allegation, and the identity of the person about whom and the person or persons to whom it is made. To that extent, the decision in each case is 'fact sensitive'. However, the court should not be drawn into making its decision on the basis of contested facts material to the issue of abuse which properly ought to be left to the tribunal of fact to decide."
That is an important principle to bear in mind when the court is called upon to address early applications for summary disposal in defamation cases, which have become increasingly frequent in recent years.
If the words meant that the Claimant had been guilty of fraud (by whatever definition), and was thus dishonest, that is a defamatory allegation which is at least capable of causing serious reputational damage. The court should thus be reluctant to shut out such a claim in a case where the facts have yet to be fully explored. I naturally recognise that this claim is not concerned with damage flowing from the original "disfellowship" or from its announcement before the congregation, but only with the consequences of the limited publication sued upon, but even so it would be unduly "robust" in my view to hold that an allegation of fraud can have done no harm at all.
It is not entirely clear to me whether the Defendants are intending to raise a plea of justification (e.g. to the effect that the Claimant was guilty of fraud). The current defence does not say so in terms and certainly does not put forward a Lucas-Box meaning or any particulars of justification. On the other hand, there is included, unusually for a defamation defence, a general traverse. They are generally avoided for the very reason that they could be taken as denying the falsity of the words, and thus stealthily importing a plea of justification. I asked Mr Daniel about this, and he replied that his clients wished to await the outcome of the current application for summary disposal before putting their cards on the table. They did not wish to plead justification unless it became necessary to do so. Plainly, however, I need in the meantime to bear in mind that the Claimant is entitled to a presumption that he is innocent of fraud (or indeed of having been found guilty of fraud) unless and until the contrary is proved by the Defendants.
The Defendants intend to rely on qualified privilege and, although the evidence would need to be carefully considered in the context of the prescribed rules for the relevant internal procedures, there is quite a strong prima facie case to that effect. Nonetheless, the Claimant wishes to put forward a plea of malice against the First Defendant in particular. I understand that he wishes to assert, although no particulars of malice are yet pleaded, that the defendants must have known that there was no evidence of fraud on his part. The Claimant told me that he had been waiting to provide such particulars until at least he had seen the third party letter and the specific accusations it had supposedly made against him. Only in those circumstances, would he be in a position to pinpoint what the Defendants knew or believed about him and the genuineness of the First Defendant's state of mind at the time of the words complained of. It emerged at the resumed hearing before me on 18 June that the third party's letter has been destroyed, according to Mr Daniel on instructions, on data protection grounds and that, accordingly, the Claimant will never now be able to make an assessment of it or rely upon it in formulating his particulars of malice. It is fair to say, however, that this latest piece of news has done nothing to allay his suspicions as to their good faith.
I was initially troubled by the Master's conclusion that there was evidence of malice which would need to be considered at a trial, as this appeared to be one of his principal grounds for refusing the Defendants summary relief. I had in mind the basic principles about pleading malice and the need to go beyond bare assertion. That was one of the reasons for having to adjourn on 15 April 2015, since none of the relevant principles or authorities was before the court; nor had they been considered by the parties: see e.g. Gatley on Libel & Slander (12th edn), at 28.6 and 30.35, Alexander v Arts Council of Wales [2001] 1 WLR 1840, Seray-Wurie v Charity Commission for England & Wales [2008] EWHC 870 (QB), and Henderson v London Borough of Hackney [2010] EWHC 1651 (QB). This was another consequence of the inchoate state of the pleadings and just one illustration of the disadvantages confronting a litigant in person.
Nevertheless, an indication had been given in the Claimant's first witness statement as to the case on malice he would wish to put forward. This is probably what the Master had in mind when he said, at paragraph 7 of the transcript, that in his judgment "… there is material from which a court might find that Mr Morley was actuated by some malice". What the Master did not have, although it was before me, was the Claimant's second witness statement dated 8 April 2015. This put more flesh on the bones of the anticipated plea of malice. I need cite only one passage, from paragraph 30(h), to illustrate the scope and gravity of the dispute between the parties:
"In spite of the First Appellant maintaining that the accusation of fraud was communicated to him by a letter from the accuser, the Appellants have failed despite several requests to produce a copy of the letter. It is the R's case that the accusation was fabricated by the First Appellant to cause harm to the R and there was no such accusation from the accuser. The Appellants' failure to produce this letter clearly supports the R's assertion."
I have indicated already that the Claimant's suspicions have been enhanced by the recent claim that the third party letter has purportedly been destroyed. I am not in a position to say that the First Defendant has trumped up a case in fraud to bring about the Claimant's "disfellowship", for reasons of his own, or that he uttered the words at the reinstatement meeting in 2013 in order to manipulate its outcome. Of course not. Nevertheless, I have come to the conclusion that the Master was correct in his conclusion that there is more to this than currently meets the eye. It is not the sort of case which can be terminated by the convenient means of summary disposal nowadays available to the court in the light of the CPR and their application in such cases as Jameel (Yousef) v Dow Jones & Co Inc, cited above. It seems to me that a significant number of the real issues between the parties fall within the description of "fact sensitive" and do not lend themselves to a short cut.
I bear in mind Mr Daniel's warning that I may be allowing myself to be diverted by a "smokescreen", but it simply illustrates why the facts need to be properly investigated after full pleadings have become available, disclosure of documents has taken place and witness statements have been exchanged. Only then will the smoke have cleared.
In these circumstances, I must dismiss the appeal.
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Mrs Justice Andrews:
On 28 April 2015 Master Eastman made orders against each of the three Respondents under CPR Part 34 ("the Orders") in response to a Letter of Request dated 31 March 2015 issued by the Honourable Judge Andrew J Peck in the US District Court for the Southern District of New York at the request of one of the Defendants to civil proceedings before that Court, Vale SA ("Vale"). Each Order requires the relevant Respondent to produce documents falling into individual requests set out in Schedule A, and requires a named employee to be examined as a witness on the matters set out in Schedule B.
The substantive US Proceedings are for alleged fraudulent conspiracy and corruption under the Racketeer Influenced and Corrupt Organizations Act ("RICO"). They relate to the withdrawal from the Claimant, Rio Tinto Plc ("Rio Tinto") in December 2008 of certain iron ore concessions in the Simandou region of Guinea, which the Government of Guinea then granted to one of the other Defendants to those proceedings, a company to which I shall refer as "BSGR". It is alleged that BSGR obtained the concessions in consequence of bribery and other dishonest behaviour.
Vale, like Rio Tinto, is one of the world's leading mining companies. Vale entered into a joint venture with BSGR in April 2010. Rio Tinto alleges that the loss of its concessions was brought about by a fraudulent conspiracy between Vale and BSGR, which Vale vigorously denies. Vale says that it came upon the scene well after BSGR obtained the revoked concessions.
Vale also alleges that Rio Tinto's lawsuit, which was commenced on 30 April 2014, is time-barred. The relevant limitation period is four years from the date on which the injury was suffered. Rio Tinto contends that its claim is not time-barred. It has accused Vale of taking steps to improperly conceal matters that would have led it to discover that it had a claim, and relies upon the defence of "equitable tolling". This appears to be broadly similar in effect to s.32 of the Limitation Act 1980, in that the limitation period is postponed until the injured party, by investigating the matter with reasonable diligence, could have discovered that he had a claim, or until he was put on notice that he had a claim. The merits of the equitable tolling defence therefore turn upon whether Rio Tinto's investigations were or were not sufficiently diligent, whether Rio Tinto was aware of so-called "red flags" putting it on notice of its potential claim, and whether or not there was any deliberate (and effective) cover-up by Vale.
The Respondents, to whom I shall refer respectively as Livingstone, ARC and BTG, are firms or corporations based in this jurisdiction specialising in corporate investigations. Each firm was commissioned by Rio Tinto in either 2009 or 2010 (i.e. after the loss of the mining concessions) to produce business intelligence reports concerning the contemporary political and commercial situation in Guinea, focusing in particular on the activities of BSGR. 18 of the 19 reports were produced after 30 April 2010. On the evidence before this court, Livingstone and BTG are to be taken to have contracted with Rio Tinto on the latter's standard terms of business, which are expressly governed by English law. By contrast, ARC contracted with Rio Tinto on its own standard terms of business, which are also governed by English law.
Vale, not without difficulty, managed to obtain copies of the business intelligence reports from Rio Tinto, which were eventually disclosed pursuant to an order of the New York Court and are currently the subject of a Protective Order in that jurisdiction which precludes anyone from seeing them other than the parties' attorneys. I have therefore not seen the reports.
Rio Tinto has refused to produce any information other than that which was in its physical possession, and has taken the position that if Vale wanted other information from Livingstone, ARC and BTG themselves, it would have to make an application under the Hague Convention of 18 March 1970 on the Taking of Evidence Abroad in Civil and Commercial matters. That is what led to the application for, and issue of, the Letters of Request, and in due course to the Orders of Master Eastman.
The application for the Orders was supported by a short witness statement of Mr Kelly of Cleary Gottlieb, Vale's solicitors. In paragraph 9 of that statement he refers to section 7 of the Letter of Request and states that the evidence sought "bears on Vale's statute of limitations defence, including on the timing of Rio Tinto's claim … whether it was on notice of red flags… and whether its purported investigation of its claim was sufficient to toll the statute of limitations during a period of fraudulent concealment and due diligence." Mr Kelly then goes on to say that the evidence also has a bearing on the merits of the conspiracy claim because the reports contain evidence of BSGR's discussions with mining companies other than Vale after BSGR obtained the mining rights in question, and before the joint venture agreement was signed with Vale.
As each of the orders was obtained without notice on the papers, the Master made express provision for an application to be made within 14 days of service for the order to be varied or set aside. Each Respondent has made such an application, raising essentially the same or same types of objections. Some of these (including well-founded objections as to the width of the descriptions of some of the classes of documents and information sought) have been resolved by agreement, but one matter in particular has remained contentious and falls to me to determine, namely, whether the Respondents should be required to identify the individuals from whom they obtained the information they used to compile the reports ("the sources").
Each Respondent has asked the Court to vary the requirement for it to produce documents or for any witness to give evidence so as to protect the identities of its confidential sources. The Respondents do not object to the disclosure of the documents or information in itself on the basis that it is confidential (though it plainly is), but merely seek an order permitting such redactions to be made to the documents and limits placed on the information to be provided by the witnesses under examination, as will protect the identities of those sources.
The powers of the English court to make orders to enable evidence to be taken for foreign proceedings are limited by the terms of the Evidence (Proceedings in Other Jurisdictions) Act 1975 ("The Act"). The principle of comity ensures that the court starts from the basis that it is obliged to give effect to the request unless there is a good reason not to. It will generally rely on the judgment of the foreign court as to what evidence is relevant: see Rio Tinto Zinc v Westinghouse Electric [1978] AC 547 at 654. As a general principle the English court will give effect to a request from a foreign court for assistance in obtaining evidence for the purpose of proceedings in that court so far as is proper and practicable and to the extent that is permissible under English law.
As a matter of English public policy, applications under the Act may not be used for the purpose of obtaining pre-trial discovery in accordance with US civil procedure: Section 2(3) of the Act, and see Westinghouse Electric (above) per Lord Diplock at 634G-H. Evidence may be taken only for the purpose of proving (or disproving) a case at trial. Moreover the documents must be "particular documents specified in the order"; the documents can be compendiously described, but only so long as the description clearly identifies the exact documents to be produced. If it is too widely couched, the English court will try to give effect to the Letter of Request to the extent that it can. It is entitled to apply the metaphorical "blue pencil" to edit a Letter of Request by deleting aspects of it that are objectionable, but it cannot substitute a different request: Refco Capital Markets v Credit Suisse (First Boston) Ltd [2001] EWCA Civ 1733 at [30]-[32].
A relevant consideration for the court is whether a respondent to the request will be required to breach a confidence in giving evidence or providing documents. However, confidentiality in and of itself is unlikely to be a sufficient reason for refusing to accede to a request. The court must undertake a balancing exercise, weighing on the one hand the public interest in preserving the confidentiality, and on the other hand the public interest in the English court assisting the foreign court in obtaining evidence in this jurisdiction and enabling the fair resolution of court proceedings: see e.g. In re Norway's Application (Nos 1 & 2) [1990] AC 723 per Lord Goff at 810G.
In Science Research Council v Nasse?? [1980] AC 1028 (a case in which, in a domestic context, the question arose whether the court should order discovery of documents in breach of a duty of confidentiality owed to non-parties). Lord Wilberforce described how the court should set about the balancing exercise:
"…here, the process is to consider fairly the strength and value of the interest in preserving confidentiality and the damage which may be caused by breaking it; then to consider whether the objective – to dispose fairly of the case – can be achieved without doing so, and only in a last resort to order discovery, subject if need be to protective measures. This is a more complex process than merely using the scales; it is an exercise in judicial judgment."
The evidence from the Respondents is to the effect that each source provided the information on the strict condition that their identity as the source of that information would remain confidential and not be disclosed. The most specific evidence in this regard is from Mr Huband of Livingstone. Mr Huband explains that Livingstone researches business intelligence information by engaging in-country research associates ("Associates") who are not on Livingstone's payroll and who will have their own human sources of information, depending on the area of interest involved. Associates are remunerated by Livingstone, but are strictly forbidden from paying sources for information. Some, but not all, of the Associates are journalists.
Mr Huband goes on to describe how the requirement that the sources will not be identified lies at the heart of their relationship with Livingstone's Associates, and that requirement is essential to the disclosure of information. He points out that there may be considerable risks in passing information which may well involve or imply the exposure of official corruption. The sources are forthcoming in their provision of information because there is no risk of exposure, and all information is passed on by Livingstone to the client. Livingstone does not insist that an Associate identify the sources to them beyond a description of their position, although the confidentiality setting for the work may mean that the Associate is willing to share that information with Livingstone. Mr Huband says that "at the very least a description of their position will act as an endorsement for the reliability of the information they provide."
Mr Huband goes on to say that the Associates are only willing to carry out the research for Livingstone on the basis that their identities will not be revealed, and that this is a common, universally understood position in the business intelligence sector. However, unlike the sources, he does not explain why there is any specific reason for the identities of Associates to remain confidential.
Mr Huband has made specific enquiries regarding the sources identified in the documents falling in paragraphs a to nn of Schedule A. He gives a description of the position of each of those sources (Sources A to I) and explains what kinds of risks (for example, risks of recrimination) they might face if their identity is made known. The nature and seriousness of the perceived risks varies, as one might expect, from source to source. Mr George told the court, on instructions, that two of the "sources" were also Associates.
Ms Tara O'Connor, of ARC, explains how her firm operates in several countries or regions where its work threatens established corrupt networks in politics and business. Some of those are geographical areas with a high risk of political volatility, regime change and state-sponsored violence. She gives a graphic description of what has happened in the past to her colleagues when ARC's involvement in anti-corruption projects and investigations has become known, and she describes the specific risks for journalistic and business intelligence sources – as well as journalists themselves - in Guinea.
Ms O'Connor confirms that each source that ARC used for the business intelligence reports received an assurance that their identity would not be disclosed in any circumstances when they began working for ARC and that if they were to be identified, they were highly likely to be put in a position whereby they would fear for their safety or wellbeing, or at the least adversely affected in their employment or career. She states that it is realistic to believe that disclosure could have potentially threatening repercussions, including deadly repercussions, not only for them but for their families. She says in respect of two sources in particular, sources B and J, disclosure is likely to place their immediate families at risk.
BTG is in a slightly different position to the other two Respondents, because Mr Humphrey, their company secretary, has explained in his first statement that the two individuals who were involved in the compilation of the report for Rio Tinto, Mr Brown and Mr Leighton, have now left the company. It would appear that they destroyed documents that would otherwise have fallen within the ambit of the Letter of Request at the behest of Rio Tinto, contrary to company policy and without his knowledge. Whilst this information, if true, is to the discredit of Rio Tinto, it appears that there is little that Vale can do about the situation save to pursue Mr Brown and Mr Leighton. Mr Humphrey is therefore in no position to give any evidence that would shed any light on any of the matters included in the Letters of Request, and it is only in the (somewhat unlikely) event that further documents come to light in consequence of further searches by BTG that the risk of identification of sources would even arise. There is no reason to believe that Mr Humphrey is aware of their identities.
Mr Brown has confirmed to Mr Humphrey that to the extent sources were not identified in the report, specific undertakings were given to them not to disclose their identities under any circumstances. Mr Humphrey either assumes from his conversations with Mr Brown or speculates that similar assurances would have been given to sources who engaged directly with Mr Leighton, given that he was under the ultimate direction of Mr Brown.
Mr Brown appears to have given no information to Mr Humphrey about any specific or generic risks that his or Mr Leighton's sources might face if their identities became known. However in the light of the fact that all three Respondents were working on similar projects for Rio Tinto in respect of Guinea, I believe that I can safely draw the inference that the risks to BTG's sources are likely to be of the same type as those described by Mr Huband and Ms O'Connor in respect of their firms' sources.
Finally, all three Respondents contend that their reputations and businesses could be damaged if it came out that they had been forced by the court to disgorge the identities of their sources of information, even into a confidentiality ring. They say that there is a real risk that they would no longer be able to recruit or engage individuals to give them the information upon which they depend. Whilst I do not regard that risk as fanciful, I would not be minded to refuse disclosure if that were the sole ground of objection. The risks that the breaches of confidence pose to the individuals concerned are of far more importance and carry far more weight with the court in this context.
It is well settled that an obligation of confidentiality may arise even in the absence of a contractual relationship, provided that the circumstances in which information is imparted make it plain that the information concerned is to be kept confidential. In the case of ARC, Ms O'Connor's evidence is that it contracted with Rio Tinto on the express basis of ARC's terms and conditions, which are governed by English law. Those conditions imposed an obligation of confidentiality upon the information supplied to Rio Tinto. Rio Tinto was not entitled to be told the identities of ARC's sources. Therefore, even if Rio Tinto had tried to obtain that information it is unlikely to have succeeded.
Livingstone and BTG contracted on Rio Tinto's standard terms which contain express obligations of confidentiality, which survive the termination of the contract, but only in favour of information supplied by Rio Tinto to the business intelligence firm, and not vice versa. Those terms and conditions include a choice of law clause in favour of English law (Clause 49).
Mr George QC, on behalf of the Respondents, submitted that Clause 3, which contains certain representations made by the business intelligence firm (described in the contract as "the Consultant") to Rio Tinto as at the date of the contract, is a contractual restriction upon the provision to Rio Tinto of information imparted to the Consultant in confidence, including the names of its sources. The representation is that "the execution of the Contract and the performance of the Consultancy Services do not and will not result in the breach of … any agreement or undertaking (whether verbal or written) to which the Consultant may be affected or bound." Mr George submitted that provision of the information would result in the breach of express or implied undertakings of confidentiality.
On the other hand, Clause 16.1 obliges the Consultant to provide Rio Tinto with "any information requested by them in relation to the provision of the Consultancy Services". The nature of the information concerned is not restricted, and although the rest of Clause 16 relates to the keeping of records and accounts, in context it is plain that the remaining clauses are not to be read as restricting the obligation in 16.1, and that Clause 16.1 is not confined to matters of record-keeping as Mr George submitted. Clause 16.1, on the face of it, appears to entitle Rio Tinto to require the Consultant to identify a source if, for example, Rio Tinto felt they needed to know that information in order to evaluate the reliability of the evidence that is said to have emanated from that source. The sense of that, as a matter of business efficacy, seems to me to be self-evident.
Clause 3, on the other hand, is a clause for the benefit of Rio Tinto, in that the person whose services it is engaging is warranting to it that the services that it is providing will not involve it in breaching any contractual or other legal obligation to third parties. The object of Clause 3 seems to me to be to protect Rio Tinto from a possible suit at the hands of such third parties, and the representation provides an assurance that the Consultant will go about its duties lawfully.
It is a little difficult to see how a warranty, or representation of that nature, given at the date of the contract, can be interpreted as giving rise to a contractual entitlement on the part of the Consultant to refuse to provide information in accordance with a request made under Clause 16. If the provision of the information involves a breach of an undertaking, the consequence may be to put the Consultant in breach of the warranty in Clause 3 but it does not follow that the Consultant is entitled to use Clause 3 as an excuse for non-compliance. Plainly Clause 3 is not intended to cover the provision by the Consultant to Rio Tinto of information imparted to it in confidence, because the very nature of the services it is providing will involve the provision of such information to them.
Thus I am not persuaded that Clause 3 would entitle the Consultant to refuse to impart confidential information to Rio Tinto. The Consultant would probably have to argue that in the light of Clause 3, Clause 16 should be given a more narrow construction than the literal reading, on the basis that it cannot have been the parties' objective intentions that the Consultant should be forced to do something which would put it in breach of an obligation of confidentiality to a third party, and possibly in breach of Clause 3 too. Fortunately I do not need to resolve that issue for the purposes of disposing of this application. Suffice it to say that if Rio Tinto sought to obtain the names of the Consultant's sources, it is far from certain that an English court would make an order in its favour, even if I am right about the construction of Clause 16. There are public policy reasons why mandatory injunctive relief might well be refused.
One thing is clear. If Rio Tinto did call upon the Consultant to name a source, and even if the Consultant was compelled to reveal that information to it, Rio Tinto would be bound by the same obligation of confidentiality as the Consultant, in the same way as it is in respect of the contents of the business intelligence reports.
The question whether Rio Tinto would be entitled to call upon Livingstone and BTG to identify the sources is academic in the present case for two reasons. First, on the evidence that I have seen (including the transcripts of the applications to the New York Court) it is plain that Rio Tinto takes the view that it cannot compel the Respondents to reveal the identities of their sources to it. Secondly, it is clear that the identities of the sources have not in fact been revealed to Rio Tinto, as Mr George confirmed in the course of argument. So Vale is seeking to obtain information from the Respondents that Rio Tinto does not have and has never sought, and in some cases the Respondents themselves may not know, because on Mr Huband's evidence that information may only be known to an Associate of Livingstone who has the connection with the source.
Whatever may be the contractual position as between Rio Tinto and the individual Respondents, I am satisfied on the evidence before me that the sources in question have all been given assurances or undertakings that their identities will be kept confidential and that their co-operation with the Respondents and their representatives and imparting of the information was premised upon that understanding. Their identities are subject to a duty of confidentiality, and would continue to be subject to such a duty if they had been imparted to Rio Tinto whether voluntarily or compulsorily. That duty is an important and serious one; those individuals are entitled to assume that their identities are not going to be made known to anyone without their permission. The public policy in maintaining confidentiality in those circumstances is strong.
Miss Cockerill QC, on behalf of Vale, accepted that in an appropriate case, an established obligation of confidentiality may be a ground for ordering the redaction of information or even for a refusal to order the provision of documents or information. However she submitted that in the present case, if the information was provided it would be subject to the Protective Order, and that was more than sufficient to outweigh the concerns expressed in the witness statements. Miss Cockerill criticized the evidence of risk as being far too general and vague for the Court to reach the conclusion that people's lives or livelihoods or even their employment relationships were truly likely to be under threat. She pointed out that much of Ms O'Connor's evidence related to historic risks, and that the court is concerned with the current situation in Guinea.
Miss Cockerill submitted that the court should avoid falling into the trap of relying upon any stereotypical assumptions about the state of affairs in other countries or the respect (or lack of it) that is paid to the rule of law. There is force in Miss Cockerill's admonition in this regard. If this court is faced with arguments by an individual that enforced return to a certain country would expose him to the risk of inhuman or degrading treatment, or risk to life and limb so as to engage Articles 2 and 3 of the European Convention of Human Rights, the evidence required to make out such a claim has to be specific and cogent. In many cases, specific country guidance has been expressly developed to address such situations. The court is often supplied with reports compiled by reputable international organizations which address the risks on the ground, which may change from year to year or even from month to month.
Nevertheless, it seems to me that in this rather different context, the court may take judicial cognizance of the truism that even in a democratic society such as this jurisdiction or the United States, whistleblowers may be castigated for speaking out and suffer prejudice to themselves or their families, whether or not they act within the four corners of the law and whether or not they are exposing wrongdoing. Human nature is such that those who engage in corruption, particularly if they are in positions of power, do not take kindly to their wrongdoing being exposed. There are many corners of the globe where journalists are targeted and even imprisoned for fair and impartial reporting, or accused of being spies. This jurisdiction expressly recognizes the importance of keeping confidential the identity of journalists' sources (indeed there is legislation to protect them) and I accept Mr George's submissions that there is a degree of public policy overlap between that situation and this, especially in the light of the evidence that some of the sources concerned are sources of information provided to journalists, who may themselves be Associates of Livingstone.
There is no reason to suppose that any of the sources in this case have acted unlawfully, but that does not mean that they have nothing to fear if their identities come to light. I am persuaded that much of what is said by Mr Huband and Ms O'Connor rings true, although some of the sources may face more serious risks than others. It is in the public interest that they should not be discouraged from speaking out or from providing intelligence of this nature.
In my judgment, one of the most critical factors in the complex balancing exercise which I have to carry out is the importance and degree of relevance of the confidential information that is being sought. Banks have regularly been required to disgorge confidential information about their clients when that information is of central importance to the issues in the underlying case, for example, where it is necessary to have that information in order to trace the proceeds of a fraud.
If the information sought to be withheld or redacted was of crucial importance to the case in the United States, then bearing in mind the fact that the burden of proof is on the Respondents to justify the variation that is sought, the Court might have required far more particularity about the alleged risks and dangers to which each individual source would be exposed, in order to be able to gauge whether those risks were so serious as to justify withholding the information.
However, in the present case, whilst I entirely understand why Vale is so eager to find them out, the identities of the sources appear to me to be of peripheral relevance to the matters in issue in the US proceedings, and the court in that jurisdiction will not be materially impeded or disadvantaged in determining the issues between the parties if that information is not provided. In my judgment it is not necessary for the fair resolution of those issues for Vale or its legal representatives to know who the sources are, and the serious nature of the proposed breaches of confidence coupled with the potential risks to the informants outweigh any justification for disclosure.
The principal justification given by Mr Kelly for the Letter of Request, set out in paragraph 8 above, and paragraph 9 of his original witness statement, is that the information sought is relevant to the limitation and equitable tolling issues - which largely depend on Rio Tinto's state of knowledge and the nature of its investigations. Miss Cockerill informed me on instructions that for the purposes of these legal arguments, the knowledge of the Respondents would be imputed to Rio Tinto as a matter of New York law.
The limitation defence (and the answers to it) will therefore depend on what Rio Tinto knew (or is imputed to have known) and how it behaved at the material time. As proceedings were commenced on 30 April 2014, it is my understanding that the key issue for the New York Court to determine will be whether the starting point for the commencement of the limitation period was "tolled" from December 2008 until 30 April 2010. As Mr George pointed out, the majority of the business information reports were commissioned after that date. Miss Cockerill said that the post-2010 reports were relevant to whether Rio Tinto had exercised due diligence and whether its investigations were frustrated by fraudulent concealment. It might be argued, for example, that information revealed in a later business information report could have been discovered sooner if Rio Tinto had asked for it or commissioned the report earlier. The nature of the supporting information might have some bearing on that issue.
There was agreement between Rio Tinto and Vale that the underlying information and documentation sought in the Letter of Request was relevant for trial; and the Respondents do not resist its production in principle. I understand why it might be said that the information in the business reports (or in the materials used to compile those reports) might be used to support an argument that there was one or more "red flag (s)" or that Rio Tinto, in failing to respond or follow up that information, failed to use due diligence, or that Rio Tinto could have found out the same information if they had asked the same questions two years earlier.
However, I cannot see how the identities of those providing the information would materially advance either party's arguments, particularly since the evidence suggests that the Respondents themselves (save possibly Livingstone, in some cases) may not have known who the sources were. Miss Cockerill submitted that knowledge of the identities of the sources would enable an evaluation to be made of the reliability of the information and the credibility of the sources. That is a criticism that could be made of Rio Tinto for not asking for their identities to be revealed to them, though no doubt Rio Tinto would respond that they reasonably believed they were not entitled to that information or that they would not have got it if they had asked for it. It is not a reason for finding that the identification of the sources is material or necessary to the determination of the limitation argument, or of Vale's defence to the claim of fraudulent concealment or to the equitable tolling point.
I do not accept any of the arguments put forward by Mr Kelly in paragraphs 52-54 of his second witness statement as ex post facto justification for seeking that information. I note that that justification appears nowhere on the face of the Letter of Request itself, and indeed that the various requests adumbrated in the Letter of Request appear to be aimed squarely at the information contained in the documents (such as memoranda evidencing particular discussions with a source), rather than the identity of the source, which is precisely what I would expect given the nature of the legal issues. There is nothing in the transcript to lead me to believe that Judge Peck considered that the identification of the sources was of vital significance to the issues in the New York proceedings.
The identity of the sources is, at best, of marginal relevance. In my judgment the fair and just resolution of the underlying litigation in New York can be achieved without requiring the very serious breaches of undertakings of confidentiality that revealing those identities would entail. It would be disproportionate and unfair to make the Respondents reveal those identities in the circumstances of this case, bearing in mind the very real risks that could arise for the sources themselves and (although this is of far less weight) the impact that such enforced disclosure might have on the Respondents' businesses and business reputations. I do not consider that it is a sufficient answer that the information would be subject to the Protective Order. It is only if the breach of confidence can be justified and disclosure should be ordered in principle, that the Court goes on to consider whether the information or documents should be disclosed to a limited class of people.
For those reasons, the balancing exercise clearly comes down in favour of acceding to the Respondents' applications. The Orders are to be varied so as to make it clear that the Respondents are under no obligation to reveal any information that would identify the individual sources. For the avoidance of doubt, my ruling does not include those of Livingstone's Associates who are not also sources, as the evidence does not demonstrate that they are subject to the same risks; but the particular sources identified in Mr Huband's witness statement, (whether or not they are also Associates) and any sources that have provided information to the Associates are not to be identified. The documents that are to be disclosed may be redacted in order to remove any references within them that would lead to such identification. When they are examined, Mr Huband and Ms O'Connor may refuse to identify the sources or to provide information that would lead to their identities being revealed. I need not make such an order in respect of Mr Humphrey, because he is not going to be examined about the contents of the documents, even if he finds any. The scope of any examination of Mr Humphrey is to be confined to the searches that he has made and the explanation for the inability to produce the documents and information requested (i.e. the alleged destruction of the documents by Mr Brown).
Livingstone claims it was able to make an assessment of reliability of information provided to it, based upon more general information about the sources of the type deposed to by Mr Huband in paragraph 24 of his witness statement. Miss Cockerill submitted that the descriptions of the sources in that paragraph are too vague to serve any useful purpose. I disagree. If the relevant Respondents were to attribute the information they provided pursuant to the Orders to a suitably anonymised source (e.g. "Source A") and if that source were to be described in terms such as the descriptions in paragraph 24 of Mr Huband's statement, I consider that would be sufficient information to enable a fair view to be taken as to the reliability of the information provided for the purposes of the limitation and allied arguments.
Given that the task of this Court is to give effect to the Letter of Request to the extent that it is possible to do so, bearing in mind the competing public policy considerations, I consider that it would be appropriate for me to direct that Livingstone and ARC shall carry out an exercise of the nature I have described above. Although Vale's lawyers will not know the identities of the individual sources, they will have descriptions of them and they will know which aspects of the information in the business intelligence reports were provided by which source. That is enough to create a fair balance between the competing public interests in this case and possibly gives Vale more than what they would be strictly entitled to. I do not consider that this would go beyond what is legitimate use of the blue pencil because it is directing where the boundaries of the directed disclosure lie. Mr George did not argue against my taking that course. Subject to that condition, the application for a variation of the Orders is allowed.
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Mrs Justice Cox:
Introduction
On Sunday 3 July 2011 the Claimant, then aged 58, sustained severe injuries when, as the Defendant now concedes, a collision occurred between the Claimant's bicycle and the Defendant's Volvo XC 90, causing the Claimant to fall sideways on to the road. The accident happened just after 6 p.m. in a rural location, the Claimant cycling along Broadwater Forest Lane towards Tunbridge Wells and the Defendant driving along the road in the opposite direction towards Groombridge.
The Claimant's case is that the Defendant failed to keep a proper look out, in that she failed properly to assess the hazard presented by this Claimant, who was cycling in the middle of the road and standing up on her pedals. She failed to appreciate that, in driving on past her, she would not allow the Claimant sufficient room; and she failed to stop her car, when she had time to do so, to enable the Claimant to pass safely by. As the Defendant drove past the Claimant there was a collision between the offside of the bicycle's front tyre and the rear offside tyre of the Volvo, a glancing blow which deprived the Claimant of the opportunity to regain control of her bicycle and caused her to fall to the right and on to the road, striking her head and suffering serious injuries.
The Defendant's case, as at the end of the trial, is that, as she approached and drove past the Claimant, she was driving slowly, safely and appropriately, as far over to her nearside as was possible. She reasonably considered the Claimant to present a hazard which required her to do no more than slow down to drive past her. The Claimant then lost control of her bike and deviated unexpectedly into the Defendant's side of the road as the Volvo went past, so that contact between the vehicles occurred and she then fell on to the road. No fault can properly be attributed to the Defendant for this accident.
There is no dispute that the Claimant fell to the right. The consultant orthopaedic surgeons, Professor Fairbank and Mr Crawshaw, are agreed that the Claimant, who was not wearing a helmet, sustained injuries which are consistent with a fall sideways off her bicycle on to a hard road surface. Tragically, she suffered multiple injuries, including traumatic frontal and temporal sub-arachnoid haemorrhages, haemorrhagic cerebral contusions with diffuse axonal injury, multiple skull fractures and rib and spinal fractures. She has a permanently impaired conscious level and is fully dependent for all her care needs.
This hearing was to determine liability only. The Claimant could not give evidence, due to the severity of her brain injuries, and I heard oral evidence from the following witnesses: the Claimant's husband, Eric Sinclair; Simon Lane, (PC Lane at the time, a forensic collision investigator with Sussex Police), who attended the scene and prepared the police report; the Defendant; her husband, Stuart Joyner, who was a front seat passenger in the Volvo; Ross Ashdown, a cyclist at the scene who first saw the Claimant as she was falling from her bicycle; and Barbara Plumb, who was in her car and came upon the scene shortly after the accident.
The parties also obtained reports from accident reconstruction experts, Damian Mutch for the Claimant and Rob Newton for the Defendant, who both gave evidence at the hearing. At the start of the trial the Defendant's case, relying on the reports of Mr Newton, was that there had been no contact at all between the vehicles. It was said that the Claimant lost her balance and began to fall from her bike without any contact with the Volvo, so that the Defendant's actions had no causal relevance. Much of the cross-examination of the factual witnesses sought to establish that there had been no contact at all between the vehicles and to explore other possible causes for the Claimant's fall.
The evidence given by Mr Newton at trial was, however, unsatisfactory in a number of respects, which I shall describe later on. In his closing submissions on behalf of the Defendant Mr Freeman no longer relied upon Mr Newton's evidence. He conceded, in my view rightly, that on the balance of probabilities the evidence showed contact to have occurred. The case advanced by the Defendant at the end of the trial was therefore as set out above.
The Relevant Legal Principles
As is well known, in determining liability I have to apply to the Defendant's actions the standard of the reasonable, prudent driver in the circumstances which existed at the time. Mr Freeman draws attention to the need to avoid a 'counsel of perfection' when evaluating the evidence relating to an accident which, as is agreed, occurred within a very short space of time. As Laws LJ pointed out in Ahanonu v South East London & Kent Bus Company Ltd [2008] EWCA Civ 274, the duty to take reasonable care can sometimes look more like a "guarantee of the Claimant's safety" when evaluated by reference to "…..fine considerations elicited in the leisure of the court room, perhaps with the liberal use of hindsight." Mr Freeman submits that fault for this accident cannot properly be attributed to the Defendant, who was driving reasonably and safely along the road at the time, was keeping a proper look out and was presented with a sudden hazard, which was due entirely to the Claimant's own actions.
On the other hand Mr Martin QC, for the Claimant, draws attention to the fact that a car is "…potentially a dangerous weapon," as Latham LJ observed in Lunt v Khelifa [2002] EWCA Civ 801, and submits that those who drive cars owe clear duties of care to those around them. In addition to complying with speed limits, a proper assessment of hazards with which they are presented on the road can often be critical. The negligence in this case, he contends, arises from the Defendant's failure properly to assess the hazard which the evidence shows was presented by this Claimant on the road ahead when she first came into view, and to stop her car in time to allow the Claimant to pass safely by, when there was time for her to do so. The collision deprived the Claimant of the opportunity to regain control of her bike, causing her to fall to the road. Primary liability is therefore established.
The Facts
On all the evidence I find the following facts. At the time of the accident the Claimant was a fit, healthy and active woman, who worked full time and who went running and attended the gym regularly. She was also an experienced cyclist, who would sometimes cycle long distances and who regularly cycled for pleasure, often in the area where she was on the day of the accident, near her home in Tunbridge Wells. She knew Broadwater Forest Lane well.
Sunday 3 July 2011 was a hot, sunny day and the Claimant left home at about 2 p.m. to go for a bike ride along the disused railway line near Groombridge, which was now a cycle track. She rang her husband at about 3.30 p.m., telling him that she was at Hartfield and was thinking of riding to Forest Row, where the track ends. She also referred to wanting a drink and, since Mr Sinclair said that she always took a bottle of water with her, she may have drunk it all by then, as the Defendant suggests. Nevertheless, I accept Mr Sinclair's evidence that she sounded well on the phone and sounded as if she were enjoying herself. She made no reference to being tired or to feeling unwell.
The Claimant was out all afternoon. At about 6.08 p.m. she was cycling along Broadwater Forest Lane back towards Tunbridge Wells. It is agreed that it was still bright daylight and that visibility was good.
The Defendant and her family had driven to a family BBQ at Dunloran Park that day, arriving at about 2.30 p.m. They left at about 5.45 p.m. and at about 6.08 p.m. the Defendant was driving the Volvo home to Groombridge, travelling along Broadwater Forest Lane in the opposite direction to that of the Claimant, with her husband in the front passenger seat and their three young children in the rear seats. The Defendant had been driving regularly for many years. She had owned the Volvo since 2010 and was familiar with the car and its controls. Since it is a large '4 x 4' car she states that she had a good view ahead of her from her raised seating position. She was wearing her contact lenses and sunglasses. She too knew this road well and had driven along it many times before.
Broadwater Forest Lane is an unclassified road with a speed limit of 60 mph at the location where the accident occurred, near Little Quarry Farm. The photographs of the scene show the road to be typical of a single carriageway, country road of this kind, as PC Lane stated. The road surface was worn in places, but the police accident report noted no deep ruts or other defects in the surface such as to cause concern, and there were no other carriageway hazards at the site of the accident, where the road was level and on a curve with good visibility.
A number of agreed measurements are helpful in determining the issues. The reconstruction experts agree in their joint statement that, in the area of the accident, the road is 5 metres wide. The width of each carriageway (there are no lane markings) is therefore 2.5 metres. The Defendant's Volvo is 2.1 metres wide. The Claimant was heading from the straight of the road towards the left hand bend at this point and the Volvo, travelling in the opposite direction, was coming around the same bend from the right. Based on the measurements taken by Mr Mutch at the scene, the experts are agreed that the Claimant and the Defendant would have had a mutual line of sight of at least 60 metres and PC Lane agreed with this estimate, based on his own inspection of the scene. This agreed evidence is, in my view, of some significance in this case.
There is little physical evidence that assists with the reconstruction of this accident and none from which the speed of the Volvo can be assessed, as it approached and then passed the Claimant. There is, however, no evidence of excessive speed and the Claimant does not allege that the car was being driven too fast. Nor is there any physical evidence that assists with determining the Claimant's speed, or her lateral position as she approached the car. The court therefore has to rely on the primary factual evidence in relation to these matters. No criminal proceedings were brought against the Defendant in respect of this accident.
The Defendant's evidence is that she was driving along the road at about 35 mph before she came round the bend and saw the Claimant. Mr Joyner estimated a similar speed and I accept that evidence. I also accept that, when the Defendant first saw the Claimant, she slowed down to 20 mph, and that she was travelling at that speed when she passed her. The Claimant does not challenge the evidence as to speed. It is alleged, rather, that there was a failure by the Defendant properly to assess the hazard presented by this Claimant in the road ahead and to stop to allow the Claimant to pass safely by.
The Defendant states that the account she gave to the police in her witness statement, dated 2 September 2011, was an accurate account upon which she now relies, save for what is said to be some clarification provided in her statement prepared for this litigation in February 2014. Mr Joyner's statement to the police was made on 18 July 2011 and he too relies upon it as his evidence to the court, also with some clarification in his litigation statement.
The Defendant's evidence is that she first saw the Claimant when she had just come round the right hand bend. She saw that the Claimant was in the middle of the road and said that she was about "two or three car lengths away," an estimate which she said was the best she could give at the time. She noticed that the Claimant was in the position "…where you would expect an oncoming driver to be if they were in an approaching car, and not over to the edge of the road as you'd expect a cyclist to be." She accepted in cross-examination that it was an odd position for the Claimant to be in, to be as far over to the middle of the road as she was. The Claimant also looked as if she was standing up whilst cycling. She struck the Defendant as a "casual" cyclist, rather than someone who was serious about cycling and wore the proper clothing.
The Defendant said that she immediately slowed down, as she would do when faced with "any hazard in the road." Mr Joyner said that this was by taking her foot off the accelerator rather than braking, and I find that is what she did. Cross-examined about the extent of the hazard the Claimant presented, the Defendant said that although the Claimant was in the middle of the road and standing up on the pedals, this did not raise any alarm bells or cause her concern. She saw no signs of discomfort in the Claimant's face and the Claimant did not strike her as presenting any more of a hazard than a normal cyclist would. Although the Claimant was in the middle of the road, she did not consider her to be a hazard requiring her to do more than slow down. It did not cross her mind that the fact the Claimant was standing up on her pedals meant there was a greater risk of imbalance, or of her deviating from her central position in the road.
Just as the Volvo was about parallel with her, the Defendant states that the Claimant appeared to lose control of her bike, and that she looked as if she was fighting to keep it under control. Then she started to fall to her right and she literally "toppled down like a rag doll towards the car." The Volvo was already as far over as possible towards the nearside verge when the Claimant fell, and she didn't actually fall before the car passed her. The Defendant could not see where she had gone. She neither heard nor felt any contact between the bicycle and the car. She felt there was room for the car safely to pass the Claimant. She was positive that the Claimant just fell from her bicycle on to the road, and believed that "she was going to fall off her bike whether I was there or not."
Mr Joyner's account to the police was that he too caught sight of the Claimant as the car came around the right hand bend, at which point he estimated her to be about 20 – 30 yards away. Cross-examined as to this estimate, given the agreement between the experts as to the mutual line of sight, he described himself as a pretty good judge of distance and stuck to it. He saw that the Claimant was in an upright standing position on her bicycle as she approached, which he immediately regarded as strange, and he also saw that she was cycling in the centre of the road.
Cross-examined as to what he meant by "strange" he said that when he first saw the Claimant he just had a "sixth sense" that something was not quite right. He also noticed her face and saw that there was something wrong because she looked as if she were in discomfort or pain. As soon as he saw that said that his senses were alerted and that he was "one hundred per cent focussed on it."
His description of the accident was somewhat different from that of the Defendant. He said in his police statement that, as they were about "one second way" from passing her, the Claimant had "toppled over to her right hand side." There was no prior warning of this "in as much as she didn't wobble," and she "literally fell like a pancake" to her right, without putting out her arms or legs to save herself from falling.
He accepted in cross-examination that it was misleading to say in his police statement that the Claimant fell to the right when they were still "one second away," and that his account could suggest that she had fallen in front of the car and that he saw her fall. He makes it clear, in his litigation statement, that the Claimant did not actually fall from her bike until they had passed her. He felt it was clear that she was going to fall, however, because she began to topple to her right when she was about 1 – 2 metres from the front offside of their car. He did not at any stage see, hear or feel any contact between the car and the bicycle. He accepted in cross-examination that he did not himself see the Claimant fall. In describing the fall in the terms he did in his police statement, he said that he was reacting to suggestions being made to him by the police at the time as to the nature of her fall.
I note that in his litigation statement Mr Joyner now states that the Claimant was not "in the geometric centre of the road" when he first saw her, but was "around 10% away" from it, on her side. It is not possible to say precisely where the Claimant was but I find on all the evidence, including the account given by Mr Joyner nearer the time, the Defendant's own evidence and the evidence of Ross Ashdown referred to below that, although the Claimant was not actually on the wrong side of the road she was cycling very close to the centre, as the Volvo approached her and then started to drive past her.
There is no dispute that, after the car had passed her, the Claimant fell to her right on to the road, as described by both Mr and Mrs Joyner and as indicated by the injuries the Claimant sustained, and by the damage it is admitted was caused to the bicycle at the time, including twisting damage to the basket, the handlebars and the saddle.
After the accident the Defendant stopped the car straightaway and she and her husband went over to the Claimant, who was now lying in the road. It soon became apparent that her injuries were very serious and both of them were, understandably, deeply shocked and distressed by what had happened.
Various statements were made by the Defendant and her husband to others who arrived at the scene within a short time of the accident. The witnesses who give this evidence provided their accounts in statements given to the police in July 2011 and therefore very soon after these events occurred. The Defendant and her husband accept, save where indicated otherwise, that they may have said what is attributed to them at the time and I find on the balance of probabilities that they did. Some of what they said then is relevant in assessing the reliability of the accounts they give now, and in determining liability in this case.
The witness Ross Ashdown was also cycling along that road, in the same direction as the Claimant. He first became aware of the incident as the Volvo was slowing down to stop, having passed the Claimant, and he first saw the Claimant as she was leaning at about 45 degrees to the right and was therefore in the process of falling from her bike on to the road. He too noted that the Claimant was positioned very close to the centre of the road, "much further over than I would have expected her to be," and he saw that she did not put out her hands or do anything to break her fall. After the Defendant got out of her car, he heard her say "I didn't hit her" several times.
Barbara Plumb is a nurse, who was driving along this road and arrived on the scene shortly after the accident had occurred. The Claimant was lying on her right side on the road and was "tangled up" with her bicycle. Ms Plumb was able to provide some assistance to the Claimant, together with another passer-by, Dr Alasdair Clark, while waiting for the emergency services to arrive. For that reason she asked the Defendant and her husband some questions about what had happened, in order to understand what injuries the Claimant might have sustained.
Ms Plumb wanted to know if the Claimant had been run over and they said no, though Mr Joyner said that he had heard a scraping or grating noise. The Defendant said "…there was nothing I could do, I couldn't have avoided her." The Defendant accepts that she may also have referred to the Claimant appearing to wobble before she fell, as Ms Plumb recalls, but this wobble, says the Defendant, would have happened just a split second before the Claimant fell and as she was parallel with the car. She cannot now recall anything else about this wobble or say what caused it.
There is a dispute as to whether the Defendant and her husband both told Ms Plumb, as she recalls, that the Claimant "…fell right in front of the car." Both of them deny that this was said, on the basis that this is not what happened. What exactly was said to Ms Plumb as to the timing of the Claimant's fall is therefore unclear. As I have already stated, Mr Joyner's initial account to the police tended to suggest that the Claimant had toppled and fallen in front of the car and he has accepted that this was misleading. If he or the Defendant said something similar to Ms Plumb she may well have formed that view herself. However, no-one suggests that this is what happened and in my view it does not take matters any further.
Dr Clark also spoke to both Mr and Mrs Joyner at the scene and he recalls them both being very concerned that they may have accidentally injured the Claimant with their vehicle. He also recalls being told that the Claimant was seen to "grimace", as she was standing up on her pedals, which Mr Joyner accepted in cross-examination was a good description of what he saw on the Claimant's face at the time.
By the time PC Lane arrived on the scene the Claimant had been taken to hospital, and her bicycle had been moved. The only evidence on the road surface as to her original position was an area of blood-staining near the centre of the road, which he marked on the plan and which, as is agreed, indicates the position of the Claimant's head on the road when she came to rest. The distance from the rear of the stationary Volvo to this area of blood was about 13.3 metres, and the front of the car was therefore about 18.1 metres beyond the blood. This in itself was insufficient to indicate the location of the point of impact that PC Lane concluded had occurred, and which it is now accepted had occurred.
During his examination of the scene, PC Lane found scuffing on the side wall of the Volvo's rear offside tyre, close to the shoulder of the tyre, which consisted of striations. This series of linear marks can clearly be seen on a number of photographs, in particular the original photograph produced at trial, labelled C2. He found a similar and corresponding area of contact, consisting of a marked area of matching sideways striations, on the offside of the front tyre of the Claimant's bicycle, seen most clearly on the original photograph C1. He concluded that there had been contact between the two tyres, in that the front offside tyre of the bicycle had struck the rear offside tyre on the Volvo, and that this was the only point of contact between the vehicles, as is now accepted. It is agreed that there was no contact between the Claimant herself and the car, or between any other part of her bicycle and the car.
PC Lane originally considered that the Claimant would have fallen to the left when this contact occurred. Since there was no evidence of any other contact between the car and any other part of the bicycle, he thought that the bike would have been angled away from the car in order for just the tyres to make contact. He accepted, however, that he had not conducted any forensic analysis of the evidence from the scene, and nor was he asked to interpret his findings in order to prepare a report on this accident. He was called as a factual witness in this case, but he accepted that Mr Mutch's opinion as to how the tyre to tyre contact and the Claimant's subsequent fall to the right had occurred was certainly feasible, and there is now no dispute about it.
Expert Evidence
Damian Mutch has a BSc degree in applied physics and an MSc in Forensic Science. He also holds the Cert Maths qualification from the Open University and has many practical, RTA related qualifications. He worked in the traffic department of Kent Police for many years and was Forensic Collision Investigator in their Crash Division for 5 years until 2007. Since 2007 he has worked at Hawkins & Associates in the field of RTA investigation and reconstruction. He has written numerous reports and has appeared in many cases as an expert witness in the criminal, civil and Coroner's courts.
He therefore has considerable and relevant expertise and experience, and he is well qualified to express an opinion on the mechanism of this accident and the nature of the contact that occurred. His reports reflect the scientific analysis and assistance which the court is entitled to expect from an expert in this field. They are clearly written and they properly acknowledge the boundaries between matters appropriate for expert analysis and opinion and matters of evidence which are for the court to decide. These observations apply with equal force to the oral evidence he gave at this trial, which stayed within the proper parameters and was helpful in relation to interpreting the factual evidence.
Mr Mutch concluded in his report that the scuff mark on the Volvo's tyre matched the tread pattern of the bicycle's front tyre. The patterns of these scuff marks on both tyres are the 'classic' marks of contact, due primarily to the friction between rubber on rubber, and he has seen such marks on a number of occasions. There is therefore little doubt, in his view, that the offside tyre wall of the bike's front tyre had contacted the outer side wall of the Volvo's rear offside tyre.
Further, the nature of the marks indicated that the scuffs would probably have been made when the scuffed area of the Volvo's tyre was in the 9 o'clock position and the scuffed area of the bicycle tyre was between the 3 – 4 o'clock position, viewed from the bicycle's offside. In his opinion, given the lack of any other coincident damage to the Volvo in the collision and the fact that the bike was seen to fall to its offside, the bicycle would have to have been predominantly upright when it collided with the Volvo, with the front of its front wheel angled in towards the car at an angle of not less than about 25 degrees.
He therefore concluded that the front wheel of the bicycle moved laterally into the Volvo's path after the front of the car had passed the bicycle. Whether the bicycle fell on to its offside as a result of the impact between the tyres or following a period of the Claimant's response to the tyres colliding whilst she tried to maintain her balance was a matter of evidence for the court.
He demonstrated in his supplementary report and in the witness box, at a time when contact between the two tyres was still in dispute in this case, the precise mechanism of this contact and of the Claimant's consequent fall to the right, rather than to the left. Since this is no longer in dispute I will summarise the mechanism he described.
As the vehicles passed each other, the tyres would have "slid" past each other, resulting in minimal loss of speed for either vehicle. If the Volvo were travelling at 20 mph when this collision occurred, and assuming the Claimant was travelling at about 5 mph, the period of contact would probably be less than 1/100th of a second. As a result of this glancing impact, the bicycle's front wheel would have been caused to be steered to the left of its position at the point of impact, while the movement of the "central mass" (the rider and bicycle) would still be at the initial approach angle relative to the car. In such circumstances the combined centre of gravity of this central mass will move from being directly above the line passing through the central points of the tyres and the road, towards the offside of that line. The bicycle will in consequence start to lean to the right, which Mr Mutch considers is what happened in this case.
It is understandable, in his view, that the Defendant would have passed the Claimant before she did fall to her right. He explained, in this respect, that a bicycle will not fall over immediately in such circumstances. After a glancing collision of this kind there is often a period during which a cyclist tries to regain control of the bicycle before it capsizes, and during that period the bicycle can be seen to weave, even if only momentarily.
By the end of this trial the fact of contact and the mechanism of contact advanced by Mr Mutch were no longer in dispute. Mr Freeman made it clear in closing that he was no longer submitting that no contact had occurred, and he did not rely upon the evidence given by Mr Newton. I accept on all the evidence that there was a collision and I accept Mr Mutch's evidence as providing the most likely explanation, indeed a compelling explanation for the way in which that collision occurred. After the impact, the Claimant was unable to regain control of her bicycle and she fell to her right and on to the road after the Volvo had passed.
While a possible mechanical fault with the bicycle, or a possible health related problem for the Claimant as a result of the heat, were both explored in evidence as providing an explanation for the Claimant's fall, they amounted to no more than speculation. There is no evidence that either of them caused this accident and Mr Freeman now accepts that.
It is therefore unnecessary to consider the different theories advanced in this case by Mr Newton. However, his reports and his evidence at this hearing raise matters of concern which I consider it necessary to refer to, having regard to criticisms made by the Court of Appeal in Liddell v Middleton [1996] PIQR P 36 and by Coulson J in Stewart v Glaze [2009] EWHC 704 (QB), as to expert accident reconstruction evidence exceeding its proper parameters.
As Stuart Smith LJ emphasised in Liddell, the reconstruction expert's role is to provide the judge with the necessary scientific criteria and assistance based upon his or her specific skills and experience, which the lay judge will not usually possess, to enable the judge to interpret the factual evidence. It is not, as Mr Newton described it in the witness box, "…to discover the facts and to use my expertise and experience to give an opinion as to what happened."
Unfortunately, this wholly erroneous view of the reconstruction expert's role led Mr Newton to express comments and opinions throughout his reports, adopted as his evidence in chief, as to the facts and as to his view of "the most likely scenario" on the evidence. There are references, for example, to the Claimant having "struggled up the long, slow hill in a low gear", and to her having "stood up on the pedals too fast" and "fainted", which amount in any event to no more than assumptions or speculation on his part, unsupported by evidence.
In addition to expressing inadmissible views on the factual evidence in his report, he was further disadvantaged in the witness box in not having attended the trial on the first day, as did Mr Mutch, to hear the factual evidence being given and tested in cross examination. His evidence that he was told not to attend, as a costs-saving exercise, raises further concerns given the issues in this case.
In relation to providing scientific assistance, while robustly concluding that there "cannot have been any contact" between the Volvo and the bicycle, Mr Newton made no reference at all in his report to the scuff marks found on the tyres, upon which Mr Mutch based his views as to contact. In the joint statement, in disagreeing with Mr Mutch's reasoned conclusions as to contact, he expressed the view, unsupported by any analysis or reasoning, that there was "no likelihood that the scuff marks to the cycle and car tyres were caused by contact with each other." He described such marks as more often caused by contact with kerb or road surfaces, without providing any evidence or analysis in support of these opinions. Yet in cross-examination he said that he agreed with Mr Mutch's explanation in the witness box as to why the marks seen on these tyres could not have been made by a kerb stone or road surface.
I accept that Mr Newton has had "many years of experience looking at thousands of crashes", as he said when questioned as to his qualifications and expertise. It emerged, however, that most of that experience was gained when he was working as part of a multi disciplinary team of academic experts and professionals at Loughborough University's Vehicle Safety Research Centre, to whom he could and did defer on matters beyond his own expertise, Mr Newton's academic qualifications being limited, on his own admission, to the military equivalent of the core O'level subjects.
He identified in his report three individuals with academic qualifications in the fields of medicine and engineering, who were consulted by him for the purposes of preparing his report. Their involvement was, however, not documented and there is no information as to the questions they were asked or the answers they gave. The "two wheeler" consultant identified was consulted, Mr Newton said, as "someone who knows a great deal about two wheeler accidents", who had "checked my report to check its scientific validity" and who was consulted "mostly to confirm that what I thought about the case was true."
This is clearly unsatisfactory. Most of the criticisms made by the Court of Appeal in Liddell seem to me to apply to the accident reconstruction evidence called on behalf of the Defendant in this case. Wisely Mr Freeman placed no reliance upon it in his closing submissions.
Discussion and Conclusions
Mr Freeman is right in submitting that the courts must not fall into the trap identified in Ahanonu and impose a counsel of perfection upon car drivers, thereby distorting the duty upon them to take reasonable care in the circumstances. I bear well in mind that the Defendant was driving at a reasonable speed along a road she knew well, with her family in the car, on a warm summer's evening in a quiet rural location; and that, after she came around the bend, the tragic events that occurred did so within a very short time frame.
On all the evidence, however, I find that in the particular circumstances of this case the Claimant has established to the requisite standard that the Defendant failed properly to assess the hazard that I am satisfied this Claimant presented as she drove around the bend and saw her; and that she failed to stop when it was necessary to do so, and when I find she had time to do so, to allow the Claimant to pass safely by.
In the section dealing with "Road users requiring extra care" the Highway Code (Revised 2007 edition) draws attention, at paragraph 204, to cyclists as among those who are to be regarded as "the most vulnerable road users." Mr Martin places particular reliance upon the advice given to motorists at paragraph 212, namely "When passing motorcyclists and cyclists, give them plenty of room." While there then follows a bracketed reference to earlier rules dealing with overtaking, as Mr Freeman observes, the advice in this paragraph is, in my judgment, not confined to cases of overtaking, set as it is in the section of the Code addressing in general terms the vulnerability of these categories of road users, and the need for extra care.
This advice is particularly pertinent in this case. The Defendant's carriageway was just 2.5 metres wide and the width of the Volvo was 2.1 metres. Even if she were right over to her nearside, and I accept that she was very close to it, that leaves at best 0.4 of a metre between the car and the Claimant who was, on the evidence, riding her bicycle still on her own side of the road but only just. She was very close to the centre as the Volvo approached and then passed her. The Claimant cyclist's close proximity to the centre of the road was noted by the Defendant as soon as she saw her, and in my view, for the reasonable prudent driver in those circumstances, alarm bells would have sounded instantly.
The evidence also shows that the Claimant's proximity to the centre of the road was not the only hazard she presented to the oncoming driver. She was, according to both the Defendant and her husband, standing up on the pedals of her bicycle when they first saw her and not sitting firm on the saddle cycling normally. The Defendant saw enough of her to form the view that she was not a "serious cyclist." Mr Joyner also saw from her face that she was in some discomfort and he noted this as soon as they came around the bend.
The obvious question is why the Defendant did not see this discomfort herself if, as she states, she did see the Claimant as soon as she came round the bend. Clearly, this additional pointer to the hazard the Claimant presented was there to be seen. Her appearance was such as to lead Mr Joyner to focus upon it from the moment he saw her standing up on her pedals in the centre of the road, and to form the view that there was something wrong.
I consider that the Defendant's failure to see this, together with her estimate that the Claimant was only two to three car lengths away when she first saw her, indicates that she was not in fact keeping a proper lookout as she came around the bend. At this point Mr Mutch's evidence, agreed by Mr Newton and not disputed by Mr Freeman, is that the Defendant's line of sight was at least 60 metres. Two to three car lengths, as the Defendant accepted, is no more than 8 to 15 metres.
Given the agreed line of sight, Mr Joyner's estimate that the Claimant was only 20 – 30 yards away when he first saw her is also incorrect, in my view. Further, the descriptions they both give of seeing the Claimant fighting to keep control of the bike and of her starting to fall, toppling down towards the car and falling like a rag doll, or like a pancake, would not be capable of being seen and processed if those distances were accurate. I find their evidence as to time and distance to be unreliable in the circumstances and I cannot accept it.
On the evidence, the hazard presented was an oncoming cyclist who was standing up on her pedals, grimacing or looking uncomfortable and cycling very close to the centre of the road. In circumstances where the Volvo was already as far over to the nearside as it could go, and where the margin to pass the Claimant safely should have been recognised as extremely tight, the Defendant's evidence that she saw nothing to raise any alarm bells, that she saw no risk of the Claimant deviating off line and that she considered her to present no more of a risk than any normal cyclist indicates, in my judgment, a negligent assessment of the risk that was present on the road ahead.
Motorists have to anticipate hazards in the road, particularly from vulnerable road users, and to be ready to react to them. In my judgment the Defendant cannot be relieved of that duty of care by seeking to blame the Claimant, who was obviously in difficulty, for deviating into her side of the road and colliding with the rear offside tyre, after the front of the car had gone past her. The fact that a collision occurred demonstrates that there was not sufficient room for her to pass the Claimant safely, and that the Defendant's assumption to the contrary was in error. She ought to have appreciated that her car was too close to the centre of the road for her to have passed this cyclist safely.
In my judgment, the reasonable prudent driver in these circumstances would have applied the brakes immediately and stopped, in order to allow the Claimant sufficient room to ride past her. Based on the available fields of view the experts agreed in their joint statement that, if the Defendant had assessed the Claimant as a hazard requiring her to stop before reaching her, there was sufficient time and distance for her to do so before she drew level with the bicycle. Mr Freeman did not seek to challenge this evidence. Mr Martin drew attention to the tables showing the ability to use emergency braking and the relevant stopping distances, produced by Mr Mutch in his report, and which provide helpful evidence in this respect.
The Defendant's evidence is that she slowed down to 20 mph as soon as she saw the Claimant. As Table 1 (at paragraph 7.2.2) demonstrates, allowing the Defendant the reaction time of 1.5 seconds, the stopping distance at 20 mph is 19.3 metres. The stopping distance at 25 mph is 25.9 metres. There was therefore ample time for the Defendant to stop if she had properly assessed the risk that this Claimant presented. Her failure to do so in these circumstances was, in my judgment, negligent.
I accept Mr Martin's submission that the causal effect of the collision was to deprive the Claimant of the opportunity to regain control of her bicycle. There is no evidence that the Claimant, as the Defendant suggested, would have fallen over anyway without there having been any contact. As I have already stated, various possible theories for her loss of control and for the fall were advanced in this respect, but Mr Freeman now accepts that there was contact and accepts that there is no evidence to support the alternative theories. It is clear on the evidence that she fell after the collision occurred and, in my view, the fall was the result of the collision, in the way that Mr Mutch described. Primary liability is therefore established.
Contributory Negligence
In relation to contributory negligence, Mr Martin accepts that a finding that the Claimant bears some responsibility for what happened is appropriate in the circumstances of this case. That is plainly right. She should not have been riding her bicycle in a central position in the road. Her conduct in doing so materially contributed to the damage caused and is properly to be regarded as negligent.
There is no other respect in which I find her to have been negligent. There is no evidence to support the pleaded allegation that the Claimant failed to maintain her bicycle and was riding in a public road on a defective bicycle.
The Defendant also pleads, at paragraph 11 (d) of the Defence, that the Claimant was negligent in failing to wear a cycle helmet. This was not explored in the evidence and Mr Freeman made no submissions upon it in his closing arguments. As Mr Martin observed, no court has yet decided that failing to wear a helmet actually amounts to contributory negligence, although they have come close (see Smith v Finch [2009] EWHC 53 (QB)). In the present case the Claimant was an adult enjoying a bicycle ride in the countryside on a sunny day. There was no medical evidence adduced to show that failing to wear a helmet made the Claimant's injuries worse, and the subject was not addressed in submissions. I therefore reject that allegation of contributory negligence in this case.
In relation to the admitted contributory negligence, for the purposes of assessing apportionment the emphasis is on fault, requiring an overall appreciation of the Claimant's blameworthiness, taken with the causative potency of what she did.
In this case, I accept Mr Martin's submission that the causative potency of the motor vehicle is highly significant in assessing apportionment. There was a risk of very serious injury to the Claimant in this case if the Volvo were to collide with her, as in fact it did. In all the circumstances, having regard to the respective positions and conduct of the parties, I accept Mr Martin's submission that the appropriate apportionment of fault for the Claimant in this case is 25 per cent. Her damages will therefore fall to be reduced accordingly.
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Mr Justice Warby :
In this unfortunate libel action the Claimant, Terry Stocker, sues his ex-wife Nicky for statements made by her about him
i) in the course of a Facebook exchange with the Claimant's then partner, Debbie Bligh, on 23 December 2012 and
ii) in an email sent to Ms Bligh's former partner, Eric Roche, on 2 January 2013.
It is the Claimant's case that the Defendant's statements ("the Posts") in the course of the Facebook exchange ("the Exchange") meant that he had tried to kill the Defendant by strangling her, for which he was arrested by police; that he had threatened her and breached a non-molestation order, for which he was also arrested; and that he had been arrested countless times and was accordingly, it was to be inferred, a dangerous and thoroughly disreputable man.
The Claimant alleges that these imputations were published to 21 named individuals who had authorised access to Debbie Bligh's Facebook page, and that they were in addition visible to all 110 of her Friends, and to many Facebook Friends of her Friends. He contends that the Posts frightened and distressed Ms Bligh and, for a time, caused serious damage to his relationship with her. That relationship has since come to an end. It is not alleged that this was a consequence of the words complained of. It is the Defendant's case, denied by the Claimant, that the relationship broke down as a result of Debbie Bligh's conviction for offences of benefit fraud.
The email sent to Eric Roche ("the Email") is said to have borne six defamatory meanings including (1) that he had tried to kill the Defendant by strangling her, (2) that he had threatened to kill her and harm her friends and their property, (3) that he was a vile, angry misogynist who was psychologically unwell and unfit to look after children, and (4) that he subjected the Defendant to sustained mental, sexual and physical abuse throughout their marriage. It is alleged that the Email was, foreseeably, deployed by Mr Roche against Debbie Bligh in the course of proceedings in France over the custody of their children causing her, and consequently the Claimant, distress.
The Claimant threatened litigation on the evening of 23 December 2012, but it was not until 4 months later that solicitors on his behalf wrote a letter before action. When they did, it complained of the Email and not the Posts. Despite the allegedly significant impacts of the statements complained of, this action was not started until 18 December 2013, nearly a year after the first of the publications complained of, and hence just within the limitation period. The case has not progressed swiftly since then. The Defence was served in September 2014, a Reply in November, and it was not until 7 May 2015 that the case came before me for a Case and Costs Management Conference, having been referred by Master Eastman.
The Defence raises issues as to the extent of publication of the words complained of, meaning, and defamatory impact. It pleads that the claim is an abuse of process because (a) it does not disclose a real and substantial tort and/or (b) the Claimant has the dominant collateral and/or improper purpose of causing the Defendant "distress, anxiety, embarrassment, hassle and/or expense". It is alleged that the Claimant consented to the publication of the Exchange. It is said that the publication of the Email is protected by absolute or alternatively qualified privilege, by reason of its connection with the French custody proceedings. Defences of justification and fair comment are advanced in respect of both the Posts and the Email. The majority of the facts relied on to support these various defences are also relied on in mitigation of any damages that may be recoverable. The Reply pleads that the Defendant published the Posts and the Email maliciously. As I shall explain in more detail later, the costs that will have to be incurred if this action goes to trial are said to amount to hundreds of thousands of pounds.
The features of the case that I have outlined above might appear to suggest that the action would be a suitable candidate for the trial of preliminary issues. However, no such application has been made by either party and, after discussion in the course of the hearing, I concluded that I should not force such a trial on the parties, at least at this stage. There is clearly a risk that such a trial might not conclude the claims. There may be, as Mr Price QC suggested on behalf of the Defendant, a risk that this would merely serve to increase the already very substantial costs of the action. It is clearly important, however, for both parties and the court to keep under review the question of whether a full trial of all the issues is avoidable.
The issues
At the hearing on 7 May I decided most of the issues raised, but time did not permit the delivery of a reasoned judgment. Hence this reserved judgment, which gives reasons for the principal decisions. These relate to applications by the Claimant
i) to strike out the defence of consent;
ii) to strike out part of the plea of justification in respect of the Email; and
iii) for disclosure and inspection of the Defendant's medical records.
This judgment also deals with the Defendant's costs budget, on which argument was concluded at the hearing but my decision was reserved.
The strike-out applications
The Claimant's application notice invokes CPR 3.4(2)(a) and (c), alleging that the plea of consent in paragraph 11 of the Defence and paragraph 15.3 of the plea of justification in respect of the Email disclose no reasonable grounds of defence and/or are in breach of a rule.
Consent
Consent was pleaded in paragraph 11 of the Defence served on 23 September 2014, with detailed supporting particulars. Paragraph 11 adopts and relies on the case of abuse of process pleaded in paragraphs 9 and 10. This is lengthy and complex, but its key features may be summarised as follows. The matters complained of are trivial and do not amount to a real and substantial tort; no real or substantial damage has been caused; the Claimant has only brought the action for vindictive motives, in the aftermath of acrimonious divorce proceedings; in October 2012 he texted the Defendant calling on her to say something that would enable him to sue for slander, as he "need[ed] the money"; on the evening of the Exchange he indicated by text to the Defendant that he would sue over it; but he kept the threat of proceedings hanging over the Defendant for as long as the limitation period would allow.
The further facts pleaded in paragraph 11 in support of the consent defence focus on the sequence of events up to and on 23 December 2012. The pre-Christmas period is alleged to have been particularly acrimonious and difficult. The couple's son Joshua was to spend Christmas with his father, who knew that the Defendant was upset that she would not be with her son for Christmas morning for the first time. In around late November/early December the Defendant sent a Facebook friend request to Debbie Bligh, which was accepted. The inference is invited that Ms Bligh told the Claimant about this, and that this would "inevitably have given rise to discussion between Ms Bligh and the Claimant as to the Defendant's motive and possible communications between the Defendant and Ms Bligh".
At 10.50 and 11.33 on the morning of 23 December the Defendant sent two texts to the Claimant which were highly insulting of Ms Bligh, whom she described as a "slag with 6 children with 5 different fathers" and "hag", who she did not want anywhere near her son that Christmas. The inference is invited that the Claimant made these texts known to Ms Bligh who, at some time before 12.16, posted a status update: "cant wait to wake up Christmas day with my man and his son xxx missing my children xxx". The Defendant's case is that it should be inferred that this was done by her after discussion with the Claimant, both of them knowing that it was likely to be read by the Defendant and would provoke a response, which it did.
The Exchange began at 12.16 with the Defendant posting "Which one of his sons would that be? May be u should be with your own kids." Ms Bligh queried what this meant, invited the Defendant to phone her and, when this was twice refused, carried on the conversation, asking "why ask me as a friend on fb?" When the Defendant replied that it was "very enlightening and confirmed a lot of my worse fears", Ms Bligh asked for details. That was at 12.28. It is over the following 70 minutes that the words complained of were communicated, although the transcript of the entire Exchange which is in the papers before me shows that it continued up to 14.39.
At paragraph 11.10 the Defence pleads that:-
"In all the circumstances it is to be inferred that the Claimant procured or authorised Ms Bligh to initiate or continue communication with the Defendant in order to induce the Defendant to publish the allegations complained of (which were a foreseeable and foreseen consequence of the questions asked by Ms Bligh). He thereby consented to their publication."
Particulars of the facts relied on in support of this inference are given. They include the following: that the Claimant had the motive and desire to obtain material that could be used to threaten or bring a defamation claim; that Ms Bligh continued the conversation even when rebuffed; the close relationship between the Claimant and Ms Bligh; that she was in the Claimant's home throughout the Exchange, and he was either present or easily contactable by telephone; and that the periods between the Posts gave Ms Blight the opportunity to discuss the Exchange with him which, it is to be inferred, she did.
The Defendant has an alternative case, that "in the absence of an express authorisation or procural" it is enough to prove that the Claimant was aware of the Exchange, and deliberately omitted to ask Ms Bligh to end it or make it inaccessible to Friends, because he wanted material to bring or threaten a defamation claim against the Defendant.
Paragraph 19 of the Defence relies on paragraphs 9 and 11 of the Defence in response to the Claimant's claim for aggravated damages. Paragraph 20 of the Defence pleads that if necessary the Defendant will rely in mitigation of damages on, among others, the facts pleaded in paragraphs 9, 10 and 11 of the Defence.
The Reply, served on 10 November 2014, contains four pages of detailed response to the pleaded case of consent. Nowhere is it suggested that the pleaded case fails to disclose a reasonable basis for a defence. Paragraph 20 of the Reply relies on the matters pleaded in paragraphs 9, 10 and 11 of the Defence in aggravation of damages. On 28 January 2015 the Claimant served a Part 18 Request for further information about the Defence. This did not seek any further details about the consent defence. The parties gave disclosure of documents on 28 January 2015. There was still no complaint about the consent defence.
On 5 March 2015, the Claimant gave supplemental disclosure of documents consisting of telephone records for his landline. These showed three short calls on 23 December 2015 from his landline to his mobile. On 24 April 2015 the Claimant obtained and gave further supplemental disclosure of his mobile records. These showed a call from his mobile to his landline at 12.35 on 23 December 2012, lasting 2 minutes 35 seconds. It was in the light of this documentation, for which the Defendant had been pressing for some time, that the Claimant's advisors decided to, and on 30 April 2015 did, issue the application to strike out the consent defence. The principal basis for that application is that the newly disclosed phone records demonstrate that the defence cannot succeed. The application is supported by a witness statement of Nathanael Young of the Claimant's solicitors, which identifies what are said to be the key points in the telephone records and states that "the available evidence fully undermines the Defendant's pleaded case, and accordingly the case should be struck out." In the alternative, or in any event, Mr Young suggests that the pleaded facts do not amount to consent in law.
It might legitimately have been objected that evidence is not admissible in support of an application under CPR 3.4(2)(a) or (c), and that the principal basis on which this application is advanced amounts in substance to an attempt to seek summary judgment, on a limited basis, without adhering to the requirements of Part 24. However, Mr Price was content to address the application on the basis put forward on the Claimant's behalf. I must nonetheless guard against the risk of procedural error and consequent unfairness to the Defendant. In my judgment I should not strike out the pleaded case unless satisfied either (a) that (i) it fails to state facts that, if proved, would or might be held to establish a defence of consent or (ii) fails to comply with a rule or Practice Direction and (iii) it is just and convenient in all the circumstances to strike it out, or (b) that the requirements for the grant of summary judgment against a defendant on a particular issue are satisfied.
I deal first with the pleading point, starting with the submission that the pleading fails to comply with a rule. The rule relied on is in fact a Practice Direction: CPR PD16 8.2. This provides: "The claimant must specifically set out the following matters in his particulars of claim where he wishes to rely on them in support of his claim: (1) any allegation of fraud, (2) the fact of any illegality, (3) details of any misrepresentation, (4) details of all breaches of trust, (5) notice or knowledge of a fact…" Whilst I accept of course that any serious allegation must be pleaded clearly and distinctly, these requirements are tied to particular kinds of allegation. I cannot accept that the plea of consent in this action engages any of paragraphs (1) to (4) of this paragraph. Paragraph 8.2(5) is engaged, as the Defendant is alleging notice and knowledge. But it cannot be said that she has failed to plead notice and knowledge.
Turning to the contention that the plea of consent discloses no reasonable basis for a defence, the ordinary rule is that the court will not strike out a pleaded claim or defence if the facts alleged, if proved at trial, might be found by a reasonable tribunal to support that claim or defence. Ms Addy submits, however, that I should adopt a higher threshold. She argues that in order for the consent defence to pass muster, the pleaded facts must be more consistent with the presence than with the absence of consent. This approach, which Mr Price has dubbed "the probability test", is well established in the context of allegations of fraud. As Thesiger LJ famously said in Day v Garrett (1878) 7 ChD 473 at 489, "Fraudulent conduct must be distinctly alleged and distinctly proved, and it [is] not allowable to leave fraud to be inferred from the facts". If the facts pleaded are consistent with innocence it is not open to the court to find fraud: Paragon Finance plc v D B Thakerar & Co [1998] EWCA Civ 1249, [1999] 1 All ER 400 (Millett LJ). The rule extends to the tort of misfeasance in public office, an ingredient of which is deliberate or reckless abuse of power: Three Rivers DC v Bank of England (No.3) [2001] UKHL 16, [2003] 2 AC 1. In defamation, a similar rule is a long-established requirement of a plea of malice: Yeo v Times Newspapers Ltd [2015] EWHC 209 (QB), [2015] 2 Costs LO 243.
Ms Addy advocates a similar approach to the defence of consent in this case. She does not suggest that consent is to be equated with fraud, abuse of power, or malice but she argues that in this case "the consent defence as pleaded is effectively an allegation of a conspiracy to entrap or inveigle the Defendant into making actionable publications so that the Claimant could oppress and impoverish her by bringing defamation proceedings." This is described as a very serious allegation of misuse of the court process, analogous to a defence of justification alleging fraud or dishonesty, so that the same level of rigour in the pleaded case should be required.
This submission begs the question of whether the "probability test" does apply to a plea of justification which makes an allegation of fraud, or some similar allegation. Both sides refer in this connection to the decision of the Court of Appeal in Ashcroft v Foley [2012] EWCA Civ 423, [2012] EMLR 25. It is true that the issue was raised before the court in that case by way of a respondent's notice. However, whilst Elias LJ indicated at [93] that his "strong preliminary view" was that "a pleading of fraud in the context of justification should be subject to the same stringent requirements as it is in other contexts", the majority concluded and Elias LJ agreed that it was not necessary to resolve that issue: see [79]-[80], [93]. When the case returned to Eady J following the Court of Appeal decision he ruled that the introduction of the probability test would unduly inhibit the pleading of justification, and that the test to be applied is "whether a juror would be perverse to find the plea of justification established, on the balance of probabilities, if all the pleaded facts were proved at trial": Ashcroft v Foley (No.2) [2012] EWHC 2214 (QB), [2012] EMLR 32 [14].
This decision of Eady J was not cited at the hearing, but I refer to it only as reinforcing the view that I would have taken in any event on the basis of the Court of Appeal decision: it is not established law that the pleading of fraud or similarly grave allegations by way of justification is subject to the probability test. I do not, therefore, accept the starting point for Ms Addy's argument by analogy.
I doubt in any event that it would be right to treat the consent defence in the present case as tantamount to a plea justifying fraud or dishonesty. The nub of the plea of consent is that the Claimant procured or authorised Ms Bligh to induce the Defendant to make particular defamatory allegations about the Claimant, or connived at her doing so. It is this aspect of the defence that Ms Addy seeks to attack, arguing that "it rests on a number of arguable (but not probable) sequential inferences." An allegation that one party procured publication by the other is not in and of itself an allegation of dishonesty. And the case advanced here is not one that involves deception. It is one of provocation. It is true that the particulars relied on in support of the consent defence incorporate by reference allegations of abuse of process which are made in paragraphs 9 and 10, but these paragraphs are not themselves attacked as failing to disclose a reasonable basis for a defence, and they are only a subsidiary part of the case of consent. To treat those paragraphs as amounting to allegations of dishonesty, and on that basis to apply a probability test to the core allegation of procuring publication, would be to let the tail wag the dog.
Assessed by reference to the standard threshold test of perversity, referred to by Eady J in Ashcroft v Foley (No 2) at [14], the plea of consent must in my judgment survive the application to strike out. Ms Addy's skeleton argument concedes in terms that the inferences of fact that are invited in paragraph 11 are "arguable", and I agree. As to the requirements of the defence of consent in defamation, there is relatively little authority. In her skeleton argument Ms Addy submitted, referring to Gatley on Libel and Slander 12th edn at para 19.10, that the claimant must be shown to have authorised, expressly or impliedly, "the publication of the words substantially as they were used". I think this may be too stringent a statement of the law. In oral argument Ms Addy accepted that it was at least arguable that it would be enough to prove the allegation in paragraph 11.10 of the Defence, that the Claimant procured the publication "of the allegations complained of". In my judgment she was right to make that concession: see Dar Al Arkan Real Estate Development Company v Al Refai [2013] EWHC 1630 (Comm) at [32]-[34] where Andrew Smith J, dismissing a defendant's application for summary judgment, held that it was not fatal to the claim that the claimant could not plead or prove that the defendant caused or authorised publication of "the specific defamatory words of which complaint is made", as opposed to the imputation(s) arising from them.
I turn now to what seems to me to be the core of this application to strike out: the application for, in substance, summary judgment. CPR 24.2 provides that an applicant for summary judgment on an issue raised by way of defence must satisfy the court that the defendant has no real prospect of success on the issue, and that there is no other compelling reason why the issue should be disposed of at a trial. A "real" prospect is one that is not fanciful. Where the issue is one of fraud, or malice, or some other allegation to which the probability test applies, these requirements are modified. However, for the reasons given above, I do not consider this to be such a case. Applying again the standard test, my conclusion is that it has not been shown that the defendant has no real prospect of success on the issue. Adopting the language of Three Rivers, this is not a case where the Defendant's pleaded allegations smack of "unreality".
The case put forward on the Claimant's behalf is that the telephone records of December 2012 which he obtained in March and April 2015 deal a fatal blow to the inferences relied on in support of the defence of consent. The records demonstrate, it is said, that the Claimant was not at home with Ms Bligh during a crucial period of the Exchange, and therefore cannot have spoken to her when she embarked on the sequence of postings that led to the statements complained of. In addition, there is hearsay evidence from the Claimant's solicitor that the Claimant "informs me that he has no recollection of speaking to Ms Bligh that day and is confident that she did not tell him of the exchange until that evening, as he is confident he would have remembered such a dramatic event if she had mentioned it."
A hearsay statement which seeks to prove a negative by establishing that the Claimant does not remember anything is not a promising basis for striking out or summary judgment. Nor, in my opinion, are the telephone records as devastating as the Claimant's legal team suggest. The 3 calls from his landline were made at 12.21, 12.23 and 12.30. They were of 4, 1 and 15 seconds duration. They are said to undermine the Defendant's case that her texts of the morning of 23 December 2012 prompted discussion between the Claimant and Debbie Bligh, and Ms Bligh's "provocative" Status Update about spending Christmas with her man and his son. But the most that the landline calls show in this regard is that the Claimant had left the house by 12.21, when the first of those calls was made. Since the Defendant's second text was sent to the Claimant at 11.33, the landline calls are not plainly inconsistent with this aspect of the Defendant's pleaded case. They do not demonstrate that the Claimant and Ms Bligh had not spoken about the Defendant's text messages and what might be done about them, before his departure. It is by no means fanciful to suggest that texts of that kind would have been the subject of such discussion. A text sent by the Claimant that evening demonstrates that the Defendant's insulting texts were shown to Ms Bligh.
There is something to be said, indeed, for the argument of Mr Price that the fact that between 12.21 and 12.30 Ms Bligh tried three times in short succession to contact the Claimant by phone is capable of lending some support to the Defendant's inferential case. The first call was made whilst the Exchange was in progress, immediately after (it would appear) the Defendant had indicated that she had no interest in speaking to Ms Bligh by phone. The third call to the Claimant, at 12.30, was made immediately after the Defendant had told Ms Bligh to "ask Terry". It appears that Ms Bligh then left a voicemail for the Claimant. He called her five minutes later for over 2 minutes. Mr Price submits that the probability is that the purpose of the calls and the voicemail was to speak to the Claimant about the Exchange. That is not in my judgment at all a fanciful proposition. The Claimant cannot directly gainsay it, and there is no evidence on the point from Ms Bligh.
Next it is said that the call from the Claimant to Ms Bligh that connected at 12.35 came after the first defamatory Post by the Defendant, and that this accordingly cannot be covered by the defence of consent even if it were otherwise made out. It is true that before that call was made the Defendant had already posted a statement alleging that the Claimant had been arrested. However, for the reasons given above, the phone records do not exclude the possibility that there was a plan agreed on between the Claimant and Ms Bligh before Ms Bligh posted the initial Status Update.
The 12.35 conversation can also properly be viewed from a different perspective. Mr Price submits that the existence of a 2 ½ minute conversation between the Claimant and Ms Bligh at this point in the Exchange is strongly supportive of his client's case. He argues that it is a highly likely, if not inevitable, inference that the conversation was about the Exchange; and that the existence of such a conversation is capable of sustaining the pleaded case of authorisation at the outset and/or authorisation of the continuation of the Exchange. He adds that even if authorisation came part-way through that does not matter, because the defamatory sting was conveyed by the subsequent conversation. In my judgment these are reasonable points, which merit exploration at a trial with oral evidence.
I would in any event have declined to strike out or grant summary judgment on this issue, for reasons of case management and overall fairness. First, even if contrary to my view there were no sustainable case of consent to the initial reference to an arrest, that would not justify striking out the rest of the plea of consent. Secondly, there is force in Mr Price's submission that the real sting of the allegation that the Claimant was arrested is derived from what was said after the 12.35 conversation. Thirdly, the factual issues raised under the heading of consent are closely interwoven with the factual issues raised by the two-stranded defence of abuse of process, which is not attacked and will go to trial in any event. Further, the facts pleaded in support of the defence of consent are relied on elsewhere in the Defence: in rebuttal of aggravated damages and in mitigation of damages. It would in my judgment serve no really useful purpose to eliminate the plea of consent, when some and perhaps all of the allegations relied on would re-enter the case by other routes. Indeed, to do so would also tend to add confusion to what is already a complex picture. The fact that the boundaries of the defence of consent in defamation are relatively uncharted is an additional reason for declining to strike out or grant summary judgment. As Eady J noted in Howe & Co v Burden [2004] EWHC 196 (QB), the precise ambit of this defence is best established at trial on the basis of the tribunal's findings of fact.
The Defendant's alternative consent defence, to which I have referred above, does appear to stretch the boundaries of what is meant by consent, but it has not been the subject of any sustained argument from either side and I see no useful purpose to be gained by striking it out rather than leaving it for consideration, if necessary, after the relevant facts have been determined.
Justification of "sexual abuse"
I can take this more shortly, and in view of the particular sensitivity of the issues raised I shall make no more detailed reference to the allegations in this respect than is necessary to explain my conclusions.
Paragraph 15 of the Defence pleads that the Email is true or substantially true. One of the imputations which the Defendant seeks to justify is that "The Claimant subjected the Defendant to ongoing mental abuse for the majority of their marriage and to a lesser extent sexual and physical abuse." It is not suggested by the Claimant that this is a meaning which the Email cannot bear. It is said, however, that the particulars relied on in support of the allegation of sexual abuse are incapable of establishing the truth of that allegation.
The particulars initially pleaded are to be found in paragraph 15.13, where it is alleged that the Claimant "insisted that the Defendant engage in sexual activities with him that she found abhorrent, humiliating and/or painful." Understandably, further information was sought. The Defendant was asked to identify the sexual activities, which she did. She was asked to make clear whether it is her case that the Claimant knew that she found the activities "abhorrent, humiliating and/or painful." She answered yes. She was asked if it was her case that she did not in fact consent to the sexual activity. She answered: "No. 'Insisted' is a word in ordinary usage which has a different meaning to 'consented'. The Claimant regarded it to be his right."
Ms Addy submits that the relevant principles are those identified at paragraph [27] of my judgment in Simpson v MGN Limited [2015] EWHC 77 (QB):
"i) A defendant does not have to prove the truth of every aspect of the words complained of. It is sufficient for the defence to prove the substantial truth of the defamatory sting of the words.
ii) The defence must however meet the whole defamatory sting. If the words contain a defamatory imputation of substance which is not covered by the plea of justification the defence cannot succeed.
iii) At the present stage, the question for the court is whether a trial judge could conclude that the pleaded case of justification, if established, proves the substantial truth of the words complained of."
The argument advanced is simple. It is this: as the Defendant has conceded that the sexual activity of which she now complains was activity to which she consented, there is no 'abuse' case to be tried; that the Defendant agreed to sexual activities she did not enjoy to please the Claimant is not probative of any allegation that she was abused; there are therefore components of the defamatory meaning of the Email which would inevitably be held to contribute very significantly to their defamatory sting, the truth of which could not be established by proof of the Defendant's particular 15.13, which should accordingly be struck out.
It appears that the case for the Claimant relies on the broad proposition that a sexual act which is engaged in by consent cannot by definition involve any form of sexual abuse. I would not accept that proposition. This seems to me to be far too glib and simplistic an approach to an issue which requires a much more subtle assessment. Mr Price has referred me to a "non-statutory definition" of "domestic violence and abuse", adopted across government, which encompasses "Any incident or pattern of incidents of controlling, coercive or threatening behaviour, violence or abuse between those aged 16 or over who are or have been intimate partners or family members regardless of gender or sexuality" and "psychological, physical, sexual, financial [and] emotional" coercion. This is of course relied on for illustrative purposes, and not because it in any way binds the court's conclusions on what does or does not amount to sexual abuse for the purposes of justification in this libel action. For illustrative purposes, the definition is helpful. In its absence however I would in any event have concluded that as a matter of ordinary English usage it is possible for one person to abuse another sexually, even if the second person consents to the act.
Beyond this, it seems to me that the argument for the Claimant interprets the Defendant's pleaded factual case in a way that is unjustifiably narrow. To say that a man has "insisted" on a woman engaging in sexual acts which he knows she finds "abhorrent, humiliating and/or painful", and that he has done so on the basis that it is his "right" is significantly different from saying that she agreed to activities she did not enjoy to please him. The answer to the question of whether the truth of this part of the Email is established is likely in my view to depend on the precise detail of the evidence. However unappealing it may be to contemplate these issues being resolved via a defamation trial, it cannot possibly be said in my judgment that paragraph 15.13 discloses no reasonable ground of defence.
The disclosure application
The application notice seeks "further standard disclosure pursuant to CPR 31.10 and/or specific disclosure of [the Defendant's] medical records from 2001 to 2011 inclusive pursuant to CPR 31.12." This is an application for blanket disclosure of all such records. The reasoning behind this is that the records are "important evidence in the case" which have not been disclosed. A further witness statement of Mr Young explains the Claimant's approach. It identifies three issues raised by the Defendant's case to which medical records are of great importance. The first is an allegation that the Claimant blamed the Defendant for suffering from post-natal depression. Secondly, reliance is placed on the allegations of sexual abuse and acts of violence. Thirdly, Mr Young points to the allegations of mental abuse, which is said to have resulted in psychological symptoms such as the Defendant becoming isolated and losing confidence.
The argument for the Claimant, as presented in the witness statement of Mr Young and in Ms Addy's submissions, is that all these are matters that one would expect the Defendant to raise with her GP if they occurred. Thus, either the records will contain nothing recording any contemporaneous complaint by the Defendant, in which case they will adversely affect the Defendant's case; or they will contain some record of contemporaneous complaint and hence adversely affect the case for the Claimant. On either view, the records fall within the scope of standard disclosure in CPR 31.6. Alternatively, there should be specific disclosure of the records and disclosure and inspection of the entire record is necessary and proportionate.
Again, I find the Claimant's argument unduly simplistic. It is necessary to focus more precisely on what the records are or are not likely to reveal, if anything, that could assist the Claimant, or undermine either party's case. To take one example, the first allegation is one of attempted strangling. A complaint was made to police. The Claimant was interviewed by the police, and there is a record of the interview. The highest the case is put against him in this regard is that he admitted that he had put his hands around the Defendant's neck. He denies that. The Defendant alleges that a friend of hers saw red marks on her neck. The defence case is therefore not one of grave injury, and does not involve an allegation that she visited her GP or any other doctor. It is not at all obvious that on either party's case the episode would have led to a GP visit and I do not see any real basis for an inference that the records will contain anything of relevance.
But there is a prior point. The first step in the disclosure process is of course for each party to search for relevant documents. Any documents located as the result of such a search must then be assessed for relevance (to use this term for the test of standard disclosure under CPR 31.6). Those identified as relevant must then be disclosed. In this case, the Defendant's medical records had not been obtained at the time that disclosure by list was given. They had not been examined for relevance. Mr Price was prepared to defend that stance, on the grounds that it would be disproportionate to carry out such a search. However, in the light of the Claimant's application the defence team had in fact sought the records and at the time of the hearing they were expected shortly. In those circumstances it was hard to see much force in the proportionality argument. I would not have found it persuasive in any event. The nature of the allegations in this case suggests to me that there is at least a real possibility that the records, once examined, would contain something falling within the scope of standard disclosure. There are some documents which have been disclosed which support that view.
A letter from a Consultant Gynaecologist and Obstetrician, Mr Reid, to the Defendant's GP, Dr Durban, dated 20 August 2001 refers to a consultation on that date, attended by the Defendant and the Claimant. The letter refers to a symptom mentioned in the Defendant's particulars of alleged sexual abuse, and its effects on the couple's sex life. It also refers to the Claimant's "attitude" towards the situation. These aspects of the letter seem to me to mean that it was right to disclose it. The passages first mentioned adversely affect the Defendant's case, and the passages mentioned second adversely affect that of the Claimant. A referral letter from Dr Durban to a Consultant Psychiatrist dated 4 February 2003 refers to the same symptom as the earlier letter, giving details of its duration, and records the Defendant denying any problems between her and the Claimant as at the date of the letter.
I do not consider that a search would involve disproportionate effort or cost. In that context, I have had regard to the costs incurred by the Defendant generally, to which I return below. In those circumstances my conclusion was that the appropriate order was one for specific disclosure and inspection pursuant to CPR 31.12, requiring the Defendant to carry out a search of her medical records to identify any records falling within the scope of standard disclosure, disclose any documents so identified and, subject to one reservation, give inspection of such documents.
The reservation arose from a submission made by Mr Price, who points out that the court may, in an appropriate case, permit a party to withhold disclosure of documents adverse to another party's case, on which the first party does not wish to rely. CPR 31.5(2) empowers the court to limit standard disclosure and that power may be exercised at or after the time that disclosure is ordered, having regard to the overriding objective, including the saving of expense and the need to not involve unnecessary court resources: Serious Organised Crime Agency v Namli [2011] EWCA Civ 1411. Mr Price tells me that his client is concerned at opening up her medical records to her ex-husband and that he foresaw the possibility that his client might, like SOCA in that case, wish to deny herself the opportunity to rely on documents adverse to her opponent, in order to preserve confidentiality. Thus, I have concluded that the order should incorporate a liberty to apply for such an order, if so advised.
It should go without saying, but I add in case of any doubt, that the only part(s) of any medical record(s) that would fall for disclosure and inspection as a result of my order are those which satisfy CPR 31.6. If one disclosed document contains other records, which do not fall within that rule, the irrelevant records may be redacted and inspection given of a redacted copy only.
Costs budgets
The Claimant's budget, including all contingencies, is agreed in the total sum of £260,624.30. Of that sum, £92,134 represents incurred costs. Provision is made in the Contingencies for two categories of expert: a foreign law expert and a Facebook expert. The former (estimated cost £13,050) will not be required. At one point it was thought that the claim in respect of the Email, which was published in France, might require evidence of French law. The Defendant no longer pursues that objection to the claim. A Facebook expert probably will be required, however, if the parties cannot agree the relevant facts. Thankfully, the anticipated costs are modest at some £4,420. If such an expert is needed my current view is that a single expert would suffice.
The Defendant's budget amounts in total to £575,441.39, of which £225,536 is incurred and £333,145 estimated. This budget, which is well over double that of the Claimant, is the subject of a number of attacks on his behalf. I have set out at the end of this judgment the Defendant's budget together with my approved totals.
Submissions
Ms Addy relies on a letter dated 3 March 2015 from her instructing solicitors. Although the budgets now before me are dated 29 April 2015, that does not of itself undermine the points then made. Those points fall under three broad headings. First, it is suggested that there are three errors of principle in the approach to completing the Precedent H form: (a) the form includes the maximum of 3% of the budget for the costs of budgeting, but must also include budgeting costs in the figures for the CMC and PTR; (b) figures for expert evidence have been included, as well as, separately, a contingent cost for an application to adduce such evidence; (c) some contingencies have been included which are unlikely to occur and hence, according to my decision in Yeo (above) should not be included. Secondly, the Claimant challenges a number of the assumptions used to arrive at the costs estimates. I shall refer to the relevant points to the extent necessary in explaining my conclusions. Thirdly, whilst accepting the hourly rates used, the Claimant questions the number of hours estimated as required to complete the various stages. In this regard the Claimant has provided counter-offers.
In response, the Defendant relies first of all on a number of general points set out in a witness statement of Ms Varley of Mr Price's firm ("DPSA"). Ms Varley says:-
i) DPSA has been involved in a large number of cases such as this where the defendant is sued over a small scale publication in the context of an existing dispute. Experience suggests there is no correlation between the scale of publication and the cost of a proper defence. Rather the contrary, such cases are often more expensive than those involving large-scale media publications.
ii) Such cases involve greater reputational risk and stress for defendants, and the financial consequences of losing are more keenly felt.
iii) There are difficulties in resolving such claims by means of striking out applications, which may simply result in greater cost.
iv) Until the Defamation Act 2013 came into force Parliament permitted claims to be brought even where there is no harm, thereby sanctioning inherently disproportionate litigation against defendants.
v) The law and procedure remain technical and complex, requiring specialist representation. There has never been any attempt to create a defamation small claims court.
For all these reasons, it is suggested on the Defendant's behalf that the court should be wary of depriving the defendant of the opportunity to defend the claim by the means properly available to her by too strict an approach to costs budgeting. Ms Varley adds that when the court is considering a defendant's costs budget it must – she submits – do so on the basis that the defendant will succeed at trial on the basis of the matters alleged in her defence, and an order for all her costs will be made. It is said that the Defendant's costs budget is set at a conventional level for a 10 day High Court defamation trial involving the factual and legal issues arising on the statements of case.
Assessment
The starting point is to consider the global costs, and in that context I should address the Defendant's general points. I accept that it is not possible to approach the costs budgeting exercise in a case of this kind by assessing a case as relatively modest in scale, and the costs as high, and then simply reducing the costs to match the perceived importance of the case. As I observed in Yeo, many would suggest that the costs of litigation in this category become disproportionate at an early stage. There is no avoiding that, in many cases. So I agree that an approach based purely on financial proportionality would run the risk of disabling litigants from fairly presenting their cases. I accept also that the "small" cases such as this, involving relatively few publishees, are not inherently cheaper and can tend to be more expensive than cases over mass media publication. I readily acknowledge the importance of ensuring that the costs budgeting process does not result in a party being unable to recover the costs necessary to assert their rights.
Nevertheless it is vital, in most cases at least, for the court to control the recoverable costs of such litigation. Excessive costs tend to stifle justice, becoming the main issue between the parties. The overall total of the parties' incurred and estimated costs in this case is unquestionably far beyond anything that could reasonably be thought proportionate to the importance of the issues at stake. If this case reaches a trial then, in the absence of a reasonable Part 36 offer or other settlement offer, one or the other party is going to have to pay the whole of those costs. I know little of the means of these individuals. I am told the Claimant is "wealthy", but the description is one the aptness of which depends, often, on the perspective of the person applying it. At any rate, few can afford to lose over £830,000 with anything approaching equanimity. In addition, if costs on this scale are allowed in litigation of this kind, many will be deterred from even attempting to vindicate their rights.
The defence of such cases can indeed be very time-consuming and hence very costly. But in my judgment it is not necessary for such cases to consume as much time, or to cost as much, as the Defendant's budget assumes. An indication of this is the scale of the costs budget of the Claimant. I recognise that it is not possible to cut radically, at a stroke, the costs of this class of litigation. The process, if it is to be successful, must be gradual. But there does need to be, in my view, a progressive acceptance of the need for greater cost control in this area of litigation. The fact, on which the Defendant relies, that there is as yet no small claims court for defamation is a spur to controlling the costs and procedural complexity of defamation litigation, rather than a justification for allowing higher costs.
In my opinion the Defendant's global costs figure is clearly considerably out of proportion to what is at stake and the nature of the issues, and should be substantially reduced for that reason, as well as in order to ensure a reasonably level playing field as between the parties. In aiming to reduce it appropriately I shall address some points of detail, but not at undue length.
Dealing first with the Claimant's points about Precedent H it must, in my judgment, be right to say that a party cannot claim the maximum percentage allowed for the costs of budgeting, and also include budgeting costs in the estimated or incurred figures as well. But I am not persuaded that this is what the Defendant's team have done here. If it is, then it will be a ground for departing downward from the approved figures. I do consider that the Defendant's figures for expert evidence are inappropriate. In the light of the argument at the hearing and this judgment it is unlikely there will be any need for a contested application as to expert evidence, so I disallow that element of the budget. In my judgment the provision for expert reports is excessive, having regard to the single topic on which this might be required and my provisional conclusion that if any expert on the workings of Facebook is needed, a single expert would suffice. In the course of the hearing I suggested that a member of the company's staff could probably provide the necessary information. As to the contingencies, the first has occurred. The others seem to me improbable, and I make no allowance for them. If an unanticipated interim application is made that can be accommodated outside the budget: see Yeo at [71].
Turning to the Defendant's assumptions, the first and most important issue is whether, as the Defendant's estimates assume, this case requires a 10 day trial. I do not consider that it does. The case ought to be comfortably capable of trial within a 7 day period, which is what both parties estimated in their Directions Questionnaires in November 2014. Thus, whilst I would accept that the principal or sole advocate at trial is likely to spend 12 hours a day on the case during trial, I consider it necessary to reduce the provision for his trial costs by 30% to £42,000. I do not consider it at all reasonable to devote the time of two additional fee-earners for 12 hours a day throughout the trial. I reduce the claim in that respect to a total of £24,000 yielding trial costs of £68,000 as against the budget figure of £118,700.
I can see little justification for spending further time and money on what are already extensive and very expensive pleadings. In my judgment more than enough time and expense has already been incurred on that. The estimated figure for disclosure is in my judgment excessive for a case which does not involve a large amount of documentation. For the reasons given by the Claimant's team I have reduced it by approximately half. That reduction reflects a reduction in hours spent rather than the rates which, as I have said, are agreed. A provision of £57,900 on witness statements, when added to substantial trial preparation costs, is in my judgment way beyond what this case could justify. The assumption is that 14 witnesses will be called for the Defendant. It is hard to see who these would be but in any event the number of estimated hours (175) devoted to the exercise is disproportionate, and the proportion spent by the senior fee earner too high. Witness statements are meant to be in the witness's own words, and an assistant solicitor should be able to do the majority of the work. Bearing in mind the time spent on the issue/statements of case phase I consider that allowing some 40% of the estimate for future work on statements tends to err on the side of generosity. I reduce the claim for expert evidence for the reasons already given.
Trial preparation is an intensive exercise but essentially a task for the principal advocate with, in a case like this, some support from a junior colleague. Again, I note how much work has been and will be done at other stages of the case. In the light of that, my view is that a reasonable allowance is 10 hours a day for 8 days for the principal (£40,000), and a further £23,000 for support from an assistant and trainee. This reduces the trial preparation claim to £63,000, equivalent to £9,000 per trial day.
The overall result of these conclusions is to reduce the estimated future costs from £330,000 to some £197,000. This exceeds the Claimant's agreed future costs estimate by very nearly £30,000 and thus appropriately reflects the somewhat greater burden on a defendant in a case such as this. It would in my judgment be absurd to suggest that such a sum is insufficient to allow a proper defence of this claim. I note also that the sum I have approved for the future is set against a background of far greater incurred costs on the Defendant's side, which means that the total approved budget is still in excess of £420,000.
Work Incurred Estimated Total Approved
Pre-action costs 0.00 N/A
Issue/statements of case 148,799.46 4,100 152,899.46 148,799.46
CMC 10,315 6,310 16,625.00 16,625.00
Disclosure 40,216.00 13,100 53,316.00 47,000.00
Witness statements 9,709 57,900 67,609.00 35,000
Expert reports 3,435 9,250 12,685.00 7,000
PTR 0 9,100 9,100 9,100
Trial preparation 0 93,250 93,250 63,000
Trial 0 118,700 118,700 68,000
ADR/Settlement discussions 13,061.50 3,020 16,081.50 16,081.50
Contingent cost A: Claimant's application for disclosure of medical records 0 4,800 4,800 0
Contingent cost B: Application to rely on expert evidence 0 4,480 4,480 0
Contingent cost C: Applications for third party disclosure: D Bligh 0 6,836 6,836 0
Contingent Cost D: Claimant's application for redaction of statements of case 2,300 2,300 0
Completing Precedent H at 1% of Budget 5,586.81 4,106
Other costs of budgeting and costs management at 2% of Budget 11,173.62 8,212
Totals 225,535.96 333,145.00 575,441.39 422,924
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MR. JUSTICE GREEN:
A. Introduction
There is before the court today an application for relief against sanctions made by Mrs. Olga Yampolskaya ("the applicant") pursuant to CPR rule 3.9.
The sanction imposed was the striking out of her appeal against the registration of two judgments (of 20th March 2014 and 19th June 2014) obtained in the courts of Lithuania against her. These judgments are for sums of approximately £10 million plus interest and costs, and were made in favour of AB Bankas Snoras ("the respondent").
B. The judgments Regulation: Council Regulation 44/2001
The respondent has attempted to register these judgments under the terms of Council Regulation 44/2001 ("the Judgments Regulation"). This Regulation applies to judgments given before 10th January 2015.
There are three provisions of the Judgments Regulation of particular relevance to the facts of the present case. Article 33(1) of the Judgments Regulation states:
"A judgment given in a Member State shall be recognised in the other Member States without any special procedure being required."
Article 36 addresses the power and jurisdiction of the foreign court to review the merits of the court delivering the judgment in issue. It provides as follows:
"Under no circumstances may a foreign judgment be reviewed as to its substance."
Article 34 defines circumstances where a judgment shall not be recognised, and in particular Article 34(1) states:
" A judgment shall not be recognised:
1. if such recognition is manifestly contrary to public policy in the Member State in which recognition is sought;
Subparagraph 2 provides that a judgment shall not be recognised where it was given in default of appearance. That provision then goes on to elaborate upon what is meant by "in default of appearance".
Recitals 16 and 17 of the Judgments Regulation explain the policy and purpose underlying the recognition provisions. Recital 16 emphasises that:
" Mutual trust in the administration of justice in the [European] Community justifies judgments given in a Member State being recognised automatically without the need for any procedure except in cases of dispute."
Recital 17 makes an important point about the efficiency of the recognition procedure that should apply. It states as follows:
"By virtue of the same principle of mutual trust, the procedure for making enforceable in one Member State a judgment given in another must be efficient and rapid. To that end, the declaration that a judgment is enforceable should be issued virtually automatically after purely formal checks of the documents supplied, without there being any possibility for the court to raise of its own motion any of the grounds for non-enforcement provided for by this Regulation."
It is an important principle relevant to the facts of the present case that this court is required under EU law to trust the courts of Lithuania. The practical effect of this is that, prima facie, I have no power to go behind the findings of the Lithuanian courts.
C. The judgments sought to be registered
In the present case there are two judgments of Lithuanian Courts which are sought to be registered. I need to say a little about the first set of proceedings in particular. On 20th March 2014, the Lithuanian Court entered judgment against the applicant. However, the applicant now says that the hearing leading to this judgment occurred without her knowledge and presence, and without her involvement. She says that she was not represented. She appealed that judgment and on 6th May 2015 the Vilnius Regional Court rejected the appeal relying upon two mandates said to establish that the applicant gave authority to lawyers to act on her behalf in the court below. I have seen a full translation of the judgment, which treats those mandates as valid and effective. The applicant's application, therefore, to set aside the first judgment failed. I now understand that the applicant has appealed yet again the judgment of the Vilnius Regional Court of May 2015, alleging the mandates in question to be forgeries. She refers to a ruling of a court in Russia, which has found that mandates ostensibly signed by her were, in fact, forgeries. No one before me has been able to provide details of the latest appeal in Lithuania, or when it will be heard or decided.
I should add, for the sake of completeness, that the applicant makes a similar complaint about the second Lithuanian judgment of 19th June 2014. However, she has not appealed that judgment.
D. A summary of the background facts
The applicant is married to Mr. Vladimir Antonov. He was a former director and shareholder of the respondent bank. It is said by the respondent that he was one of a small number of individuals who exercised effective control over the bank. In November 2011 Mr. Antonov was arrested in London by the Metropolitan Police. I am informed that this was at the request of the authorities in Lithuania. They alleged serious financial irregularities at the bank. In December 2011 the bank was put into the bankruptcy process by the Lithuanian Court.
The English High Court in May 2012 granted to the administrator of the bank a worldwide freezing injunction against Mr. Antonov, the relevant sum was in the order of €482 million.
In January 2014 Magistrates at Westminster Magistrates' Court ordered the extradition of Mr. Antonov to Lithuania. He now stands accused in the Lithuanian courts of various counts of fraud. Proceedings have been commenced in the High Court (Commercial Court) by the respondent's bank, through its administrator, against Mr. Antonov and his business partners. These are now stayed pending determination of extradition proceedings. It is apparent from the evidence before me that the applicant still seeks the advice and assistance of her husband, Mr. Antonov, in relation to matters concerning litigation.
I turn now to the specific judgments in issue in these proceedings. I have already observed that in March and June 2014 the Lithuanian Court delivered two judgments against Mr. Antonov, the applicant and various others for sums approximating to €10 million plus interest and costs, and that the court has subsequently rejected arguments on behalf of the applicant as to the effectiveness of the authority she gave to the relevant lawyers acting for her in these proceedings. Both of these judgments were the subject of a registration order on the part of the High Court on 12th December 2014. An interim charging order was made over property belonging to the applicant on 19th December 2014. The registration order was served on the applicant on 23rd December 2014 which gave the applicant until 23rd January 2015 to lodge an appeal. However, on 19th January 2015, Mishcon de Reya (acting for the applicant) contacted Linklaters (acting for the bank) contending that service had not been properly effected. The bank agreed to make an appointment on the evening on 22nd January 2015 to re-serve the registration order. Subsequently, the applicant filed her appeal on 6th February 2015. Evidence before the court in the form of a letter from HMCTS required the applicant to file her appeal bundle by 16th March 2015. As I understand matters at this stage the applicant was acting as a litigant in person.
On 13th February 2015, the bank's solicitors, Linklaters, wrote to the applicant. In that letter Linklaters set out reasons why, in their view, her appeal was misconceived. However, they suggested to the applicant that she consult a Citizens Advice Bureau; they also gave a website reference for the organisation. She was directed to her email box where she would find official guide books for litigants in person. There is no dispute between the parties but that contained within such documentation are the usual exhortations to litigants in person to be aware of and comply with court timetables. Nonetheless, the applicant failed to file a bundle by 16th March 2015 as required. An 'unless' order was made on 26th March 2015 requiring the filing of a bundle by 1st April 2015. She failed to comply.
The applicant, in a second witness statement, has explained what occurred at that point. In paras. 11 and 12 of her statement the applicant says as follows:
"11. My first witness statement, in particular paragraphs 14 to 16 thereof, explains the confusion which led to my failing to lodge an Appeal Bundle in time and, therefore, my appeal being struck out. By way of further explanation and clarification, I recall that I received a voicemail message that day on my mobile telephone from the Court about lodging a bundle by 4.00 pm that day. Having re-listened to the message for the purpose of producing this statement, it is now clear to me what is being said. However, at the time, I knew nothing about an obligation to lodge a bundle as I had not read the letter from the Court of 6 February 2015 but had just passed it to my husband. I understand from him that he too had overlooked the need to lodge a bundle. In any case, I knew that the hearing relating to the Interim Charging Order had, at one stage, been fixed for 16 March 2015 and I was worried that I might be due in Court that day. So I immediately telephoned my husband and told him that I had had a message from the Court and I was worried that there might be a hearing that day after all.
12. My husband told me that it was not possible that there could be a hearing that day because the hearing on 16 March 2015 had been adjourned with the agreement of James Hennah. However, he said he would telephone Linklaters to confirm the position. I was not privy to the conversation my husband had with Mr. Hennah of Linklaters, but I can confirm that he subsequently rang me back to say that he had spoken to Linklaters and that there was no problem. I have already mentioned that I was acting in person at the time and, in view of my poor understanding of the English legal process and my limited English, I was very much dependent on my husband's help and assistance in understanding what was required of me. I should add that, having re-read my first statement, the impression I gave in paragraph 14 that I was aware of the need to lodge a bundle at that time is wrong. As stated above, I did not read the Court's letter of 6 February 2015 at the time. The first I knew of the need to lodge a bundle was some little time after I instructed Withers LLP."
As is recorded in that witness statement, no appeal bundle was filed, and the appeal was struck out. As of the date of this hearing an appeal bundle remains unserved, though this will be because the High Court will not accept an appeal bundle in relation to an action which has been struck out.
E. The application for relief
The principles governing relief from sanctions are encapsulated in CPR rule 3.9 and have been elaborated upon by the Court of Appeal in Denton v TH White Limited [2014] EWCA (Civ) 906, which explains and modifies somewhat the earlier judgment of the Court of Appeal in Mitchell v Mirror Group Newspapers [2013] EWCA (Civ) 1537. The test is now familiar to judges and practitioners. It sets out a three stage test which was described in para. 24 of Denton in the following terms:
"The first stage is to identify and assess the seriousness and significance of the 'failure to comply with any rule, practice direction or court order' which engages rule 3.9(1). If the breach is neither serious nor significant, the court is unlikely to need to spend much time on the second and third stages. The second stage is to consider why the default occurred. The third stage is to evaluate 'all the circumstances of the case, so as to enable [the court] to deal justly with the application including [factors (a) and (b)]'."
The Supreme Court in Global Torch Limited v Apex Global Management Limited (No.2) [2014] UKSC 64 has made clear that in ordinary cases a court will not be required to undertake an assessment of the underlying merits, nor would it be appropriate to do so (see paras. 29 and 30 per Lord Neuberger). However, this is not an absolute rule. Lord Neuberger, in para. 31 stated thus:
"In principle, where a person has a strong enough case to obtain summary judgment, he is not normally susceptible to the argument that he must face a trial. And, in practical terms, the risk involved in considering the ultimate merits would be much reduced: the merits would be relevant in relatively few cases, and, in those cases, unless the court could be quickly persuaded that the outcome was clear, it would refuse to consider the merits. Accordingly, there is force in the argument that a party who has a strong enough case to obtain summary judgment should, as an exception to the general rule, be entitled to rely on that fact in relation to case management decisions."
F. The application to the facts of the three stage test set out in Denton
The first part of the test requires me to identify and assess the seriousness and significance of the failure to comply with the rule or direction or court order which engages CPR rule 3.1. In this regard Mr. Wardell QC, who appears today for the applicant, submits that, viewed in the round, the tardy lodging of an appeal bundle is a purely administrative default. This is not least because the appeal bundle will only be read by the judge some weeks or, more likely, months later. Hearing dates are not fixed upon the basis of the lodging of such bundles. It is submitted that the failure has not caused prejudice to the respondent or to the court system.
Mr. Amey, for the respondent bank, submits that the delay is significant, now three months. Further, that the courts have treated failures to serve appeal bundles as serious and significant. He relies in particular upon the judgment of Supperstone J in Davis Solicitors LLP v Rajah [2015] EWHC 519. In that case the judge held as follows in paras. 25 and 26:
"25. Ms. Ballard submits that the failure to file an appeal bundle was not a significant breach of CPR PD 52B because all relevant documents had been served on the Defendants and the Claimant had complied with all court orders in every other respect. There was, she submits, no prejudice to the Defendants because permission to appeal had not yet been granted and therefore there was no need for them to incur any costs.
26. I reject this submission. Paragraph 6.3 of PD 52B requires an appeal bundle, paginated and indexed, to be filed as soon as practicable, but in any event within 35 days of the filing of the Appellant's Notice, which in this case was by 4 February 2014. Paragraph 6.4 identifies the documents that must be included in the appeal bundle and the documents that should also be considered for inclusion. Not only did the Claimant fail to comply with the Practice Direction, but Ms. Ballard ignored the 'unless' order of Judge Wulwik of 3 March 2014 relating to the lodging of an appeal bundle. She made no application to set aside the 'unless' order. It was only after the order of 31 March 2014 striking out the appeal that she wrote to the court. In fact, as Mr. Dean, for the Defendants, observes it was not strictly necessary for the judge to make the order of 31 March 2014 as the Claimant's failure to lodge an appeal bundle by 4pm on 17 March 2014 would have resulted in the appeal being struck out without further order, pursuant to the terms of the order of 3 March 2014."
At para. 33 Supperstone J added this:
" Ms. Ballard has explained why the default occurred. I do not consider any explanation she has given constitutes a good reason. She has put forward reasons for not complying with PD 52B 6.3 and 6.4 which indicate a continuing lack of understanding of the importance of the rules. The purpose of PD 52B 6.3 and 6.4 is clear. It is to assist the orderly conduct of appeals throughout the appeal process."
I would add that in para. 35, in the last sentence thereof, the judge apparently took into account as an additional consideration what he described as a fact that:
"…Ms. Ballard had deliberately decided not to comply with the Practice Direction and the 'unless' order because she considered that what she had done in terms of filing and serving documents for the appeal was sufficient."
In Denton the Court of Appeal emphasised that the test was not whether the breach was trivial but whether it was serious and significant. In the overall scheme of the administration of justice a failure to serve an appeal bundle out of time is, in my view, a significant breach essentially for the good administration reasons described by Supperstone J in Davis. Litigants frequently underestimate the impact on the timetabling of the end trial if non-adherence to the rules occur at earlier stages. The routine non-observance of procedural rules was one of the reasons why the Court of Appeal in Denton has urged the adoption of a more robust approach to case management. It is for this reason that the categorisation of non-service as significant and serious is dealt with in largely abstract terms by Supperstone J in Davis, although, as I have recorded, he did take into account that the applicant's conduct was considered to be deliberate. I do accept that there are degrees of seriousness and a court is entitled to have regard to the context in which the default occurs. However, in short, adherence to procedural steps does, in practice, matter.
The present case concerns registration of a judgment obtained elsewhere within the EU. The process of registration is intended to be easy, swift and seamless. In this case, according to the agreed chronology, which has been prepared for the court, the progress of the registration has not been smooth, swift or seamless; it has been awkward and delayed. In my judgment, in this context, I am bound to treat the default as significant and serious. It is relevant that what the High Court is here concerned with is a registration action where the foreign court has already considered the merits. The scope for a person seeking to defend against registration is very substantially less than in other litigation where the merits remain live throughout. The essential premise underlying registration proceedings is that the receiving court acts more or less automatically.
I turn now to the second stage of the Denton test – why the default occurred? In her witness statement the applicant has provided an account of why she failed to serve the appeal bundle in time. There has been some argument before me in which the respondent submits that I should view the applicant as having engaged in deliberate delaying tactics. I propose to address this issue upon the basis only of the matters admitted to by the applicant herself. I am not in a position to form a fair view about a number of the allegations which have been made.
Boiled down to its bare essentials, the applicant describes a picture of a person who neglectfully failed to look at court documents, sought advice from her husband who, on her own account, also overlooked the contents and significance of documents, or misread them, and in circumstances where the applicant's husband in turn sought advice from the respondent bank's legal advisers. It is said that they proffered advice which was less than helpful, for instance, failing to remind the applicant's husband about the need to lodge an appeal bundle. In his skeleton argument Mr. Wardell QC, for the applicant, puts the position in the following way in paras. 18 and 19:
"18. The failure to lodge the bundle was principally due to the fact that Mrs. Yampolskaya and her husband had overlooked the need to do so. This was compounded by the fact that Mrs. Yampolskaya believed that the telephone message received on 16 March 2015 had something to do with the hearing that had been due to be held that day. This resulted in her husband seeking reassurance about the wrong point.
19. It is important that English is not her first language and that she did not have the benefit of legal advice. Whilst no criticism is levelled at Mr. Hennah, it is unfortunate that he did not remind Mr. Antonov of the need to lodge the bundle during either of his conversations on 16 March 2015."
The respondent takes a different view of events. It is accepted that in principle a court might well take the fact that a litigant in person is indigent or impecunious, or unable to speak the language into account. In principle I agree either under stage 2 and/or 3 that this is or may be a relevant consideration. However, not every litigant in person is in the same position and there are major differences in terms of access to advice or representation, or resources. Not every litigant in person is to be treated as the same.
In the present case the applicant is plainly a sophisticated person with sufficient access to resources to protect her interests. This is not to undermine the position that she and her husband find themselves in, but her position is not comparable to that of many litigants in person who find themselves before these courts. The respondent bank also submits that the default was not due to some obscure technicality, it was due to carelessness and to the failure to read a court document that, on its face, is relatively clear and unambiguous. It is also submitted that Linklaters (the bank's solicitors) had already indicated to the applicant that she obtain legal advice, for example from a Citizens Advice Bureau, but this suggestion was not followed up. It is pointed out that the applicant now has the services of highly reputable solicitors and counsel, and has given no explanation which would explain why there was a failure earlier to take advice. It is also pointed out that the applicant's husband had access to lawyers and that he was in a position to advise her.
There are a number of puzzling inconsistencies in the applicant's evidence but it is not necessary for me to decide or resolve these particular discrepancies. The nub of the position is that the applicant failed to read court documents, referred them to her husband who also misread or misunderstood them. But in circumstances where the advice was sought of lawyers acting for the other side, where those lawyers politely declined to proffer advice. In my view no criticism can be levelled at Linklaters for gently and politely brushing off the applicant. It was her responsibility to obtain advice and not theirs to give it.
The question here is whether it was careless on her part in failing to read documents, and incompetent on the part of her husband in misreading or misconstruing them and, if so, whether this is acceptable as an explanation. In my view it cannot be. I do not accept that these are satisfactory explanations, in particular in the context of a system of registration, when merits are irrelevant, which is intended to be expeditious and informal and, in large measure, automatic. In principle, an applicant in the position of this applicant, who fails to read court documents, or who fails to take the chance to obtain advice, cannot readily be heard to refer to these as adequate explanations. I might have taken a different view in relation to a genuinely indigent or impoverished litigant in person, but this is not the case here.
I turn now to Denton stage 3. This requires me to stand back and evaluate all the circumstances from the perspective of fairness and proportionality. I return to the essential nature of these proceedings, namely, registration of a foreign judgment of a court of an EU Member State. The judgments in Lithuania have addressed the question of the authority of lawyers appearing on the applicant's behalf. The Vilnius Regional Court has ruled against the applicant. There is no appeal against the judgment of June 2014. It is in any event clear that judgments subject to appeal may be registered abroad and, under Article 36 of the Judgments Regulation, this court is simply not allowed to review the substance of the Lithuanian decisions.
This is a case where, on the basis of those judgments I am entitled, applying the test in Global Torch Limited, to take account of the merits and conclude that the applicant has no right to delay registration further. Mr. Wardell submitted that if the applicant is correct and authority was procured in the Lithuanian proceedings by fraud and forgery, palpable injustice will result. But this is a skilful attempt on the part of Mr. Wardell to seek to suck this court into the forbidden territory of the merits. If the applicant prevails on her appeal in Lithuania she is entitled to raise this post-registration, in order to prevent enforcement. Indeed, I make clear that nothing I say in this judgment is intended to express any view about the merits or otherwise of any application that might in the future be made to stay enforcement in the light of developments before the Lithuanian courts on appeal.
However, I can see nothing in the facts which would, in the context of the stage 3 test, preclude registration.
G. Conclusion
In conclusion and for these reasons the application for relief against sanction does not succeed.
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Mr Justice Jeremy Baker:
This judgment concerns the issue of costs arising from my earlier judgment in relation to liability and quantum dated 23rd April 2015. Although the order which followed that judgment, dated 12th May 2015, made certain provisions as to costs, I invited further written submissions, following which a final order as to costs would be determined upon the basis of those submissions.
I now have before me written submissions; on behalf of the 1st and 2nd defendants dated 27th May and 12th June 2015; on behalf of the claimants dated 29th May 2015, and; on behalf of the 4th defendant dated 30th May 2015. I have also belatedly received written submissions both from and on behalf of the 3rd Defendant on 29th July 2015.
The competing submissions include: a claim by the 1st and 2nd defendants for their costs to be paid by the claimants on an indemnity basis; a claim by the claimants that the 4th defendant should contribute to the payment of the costs of the 1st, 2nd and 3rd defendants, and; that as from the 22nd July 2014 the 4th defendant should be responsible for their costs on an indemnity basis. These various claims are resisted by the respective parties against whom they are sought. Until very recently, I had not received any written submissions from the 3rd defendant. In their absence, and as it seemed to me that his interests in this matter were aligned to those of the 1st and 2nd defendants, I proposed to deal with them on that basis. As this appears to be in accordance with the written submissions which I have now received on 29th July 2015, I will proceed to deal with the position of the 3rd Defendant on that basis.
The court has a general discretion as to costs which is set out in CPR 44.2
"(1) The court has discretion as to –
(a) whether costs are payable by one party to another;
(b) the amount of those costs; and
(c) when they are to be paid.
(2) If the court decides to make an order about costs –
(a) the general rule is that the unsuccessful party will be ordered to pay the costs of the successful party; but
(b) the court may make a different order.
…..
(4) In deciding what order (if any) to make about costs, the court will have regard to all the circumstances, including –
(a) the conduct of all the parties;
(b) whether a party has succeeded on part of its case, even if that party has not been wholly successful; and
(c) any admissible offer to settle made by a party which is drawn to the court's attention, and which is not an offer to which costs consequences under Part 36 apply.
(5) The conduct of the parties includes –
(a) conduct before, as well as during, the proceedings and in particular the extent to which the parties followed the Practice Direction – Pre-Action Conduct or any relevant pre-action protocol;
(b) whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue;
(c) the manner in which a party has pursued or defended its case or a particular allegation or issue; and
(d) whether a claimant who has succeeded in the claim, in whole or in part, exaggerated its claim.
(6) The orders which the court may make under this rule include an order that a party must pay –
(a) a proportion of another party's costs;
(b) a stated amount in respect of another party's costs;
(c) costs from or until a certain date only;
(d) costs incurred before proceedings have begun;
(e) costs relating to particular steps taken in the proceedings;
(f) costs relating only to a distinct part of the proceedings; and
(g) interest on costs from or until a certain date, including a date before judgment.
(7) Before the court considers making an order under paragraph (6)(f), it will consider whether it is practicable to make an order under paragraph (6)(a) or (c) instead.
(8) Where the court orders a party to pay costs subject to detailed assessment, it will order that party to pay a reasonable sum on account of costs, unless there is good reason not to do so."
Moreover, the basis for the assessment of those costs in set out in CPR 44.3(1)
"Where the court is to assess the amount of costs (whether by summary or detailed assessment) it will assess those costs –
on the standard basis; or
on the indemnity basis,
but the court will not in either case allow costs which have been unreasonably incurred or are unreasonable in amount."
It is clear that the court has a wide discretion as to what costs orders may be made following a trial, and as to the basis upon which they are to be made. In relation to the issue as to whether the standard or indemnity basis should form the basis of any assessment, it is clear from Excelsior Commercial and Industrial Holdings Ltd v Salisbury Ham Johnson [2002] EWCA Civ 879, that the indemnity basis may be justified where either the facts of the case and/or the conduct of the parties is such as to take the situation away from the norm. In this regard, it is not always necessary to show deliberate misconduct, in some cases unreasonable conduct to a high degree will suffice. Moreover, in relation to the issue as to whether some contribution should be made by an unsuccessful defendant to a successful defendant's costs, either under a Sanderson or Bullock type order, the Court of Appeal has explained in Irvine v Commissioner of Police for the Metropolis [2005] EWCA Civ 129 that this may be of particular benefit where the proceedings arose out of a situation in which the claimant was unaware as to which of two or more defendants was responsible for a wrong done to him, and he is at risk of his award of damages from the unsuccessful defendant, being eroded or eliminated by an order for costs in favour of the successful defendant. Some of the matters which may be of relevance to the making of such an order include: whether the original decision to join the successful defendant was unreasonable; whether the claims against the respective defendants were made in the alternative, and; whether one defendant is blaming the other.
In the present case the claim in libel arose out of 3 publications which the claimants alleged had been jointly published by the defendants as part of a campaign to defame them, namely; the update; the dossier, and; the website. However, in reality, as became clear during the course of the trial, although the claimants always had sound evidence against the 4th defendant for the publication of the dossier and the website, their evidence against the 1st, 2nd and 3rd defendants was at best thinly inferential, and in reality was without any proper foundation. As the 2nd claimant acknowledged in evidence, the real reason why proceedings had been brought against the 1st, 2nd and 3rd defendants, as opposed to others against whom a similarly weak claim could have been made, was due to their support for the injunction proceedings which had been taken against the claimants in December 2011. Indeed, during the claimants' cross-examination of the 1st defendant, it was expressly suggested to him that it was the 4th defendant who had been spreading lies about them, albeit the 1st defendant was content for him to do so.
In my judgment the claim by the claimants against the 1st, 2nd and 3rd defendants, was not one that ought reasonably to have been pursued. Indeed, as I observed in my earlier judgment, I consider that it may well be that the real motive behind the present proceedings was to effect a delay in the resolution of the concerns of a significant section of the mosques' congregations in relation to the governance of the mosques; a matter which I consider may well have been to the benefit of the claimants, because of the distinct impression with which I was left at the conclusion of the 2nd defendant's evidence, namely that there was a lack of transparency and accountability in the management of the mosques, and a concomitant reluctance for there to be any alteration in the status quo.
It seems to me that this motivation may explain what I consider to be the wholly unreasonable reluctance by the claimants to enter into settlement negotiations and/or to accept the reasonable offers made by the 1st and 2nd defendants for the claimants to withdraw their claim against them; the history of which is set out between paragraphs 25 – 50 of the 1st and 2nd defendants' written submissions dated 27th May 2015. It may also explain both what I consider to be a lack of proper engagement in the preparations for trial, set out between paragraphs 51 – 63 of those written submissions, and the repeated unfounded applications made by the claimants to adjourn the trial.
In these circumstances I consider that the conduct of the claimants in this case, in relation to the claim against the 1st, 2nd and 3rd defendants, was of such a nature and degree that it does justify the assessment of their costs against the claimants on an indemnity basis.
Equally, I do not consider that it would be appropriate to make an order that the 4th defendant should pay some contribution to the 1st, 2nd and 3rd defendants' costs, either by way of a Bullock or Sanderson type order. The reality, as I have already observed, is that in relation to the dossier and the website, although the claimants had strong evidence against the 4th defendant, they had no such evidence against the 1st, 2nd and 3rd defendants. This was not a claim in which the claimants were unaware as to which of a number of potential defendants to sue, the claim was not made in the alternative, and the defendants did not seek to blame each other. I appreciate that this may mean that the claimants' award of damages against the 4th defendant may well be eroded or eliminated by having to pay the costs of the 1st, 2nd and 3rd defendants. However, this is directly attributable to the unreasonable conduct of the claimants in pursuing their claim against the 1st, 2nd and 3rd defendants, and is therefore not a matter which should be compensated for by such an award of costs against the 4th defendant.
At paragraph 36 of their written submissions dated 29th May 2015, the claimants submit that as from 22nd July 2014 the 4th defendant should be responsible for their costs on an indemnity basis. In furtherance of this submission they rely upon paragraphs 28 and 32 of those submissions, which, in the intervening paragraphs, set out the history of the trial after 29th July 2014, which was adjourned due to the apparent ill health of the 4th defendant. Thereafter when the trial was resumed on 15th December the 4th defendant failed to attend, and instead provided medical evidence as to his present state of health. Thereafter once it had been decided to continue the trial in his absence, the 4th defendant submitted voluminous written submissions upon the subject matter of the trial.
In these circumstances it is submitted that the 4th defendant's actions, "…are unreasonable and have lead to an increase in costs for which he should be liable." Much as I accept that there was no sufficient medical evidence to justify the absence of the 4th defendant at the adjourned hearing, and that his absence was likely at least in part to have been motivated by a desire to avoid cross-examination, I do not consider that there was any increase in costs due to this aspect of his conduct of the trial. Not only was the adjournment of the original trial at some point after the 29th July 2014 inevitable, due to the commitments of those in attendance at the trial, but in reality the absence of the 4th defendant from the adjourned trial saved rather than expended further costs. In these circumstances I do not consider that this affords the claimants any grounds for claiming costs against the 4th defendant on an indemnity basis.
There are two further aspects of costs which require to be considered. Firstly the extent of the order for costs to be paid by the 4th defendant to the claimants, and secondly whether the 4th defendant should be ordered to make an interim payment on account of those costs.
In relation to the first issue, two matters are of significance. Firstly, although the 4th defendant was found to be liable in relation to the publication of the dossier and the website, he was not found to be liable in relation to the publication of the update; such that he should only be liable to pay to the claimants those costs which can be properly attributable to litigating the dossier and website to trial. Secondly, although it is appropriate for him to be responsible for the costs occasioned by the claimants in pursuing him to trial, it is inappropriate that he should be responsible for the additional costs occasioned by the claimants in pursing the remaining defendants to trial. It seems to me that, rather than leaving these issues to be considered in the course of any detailed assessment, as I presided over the trial, and having regard to the overriding objective, it would be more proportionate if I determined at this stage the percentage of the claimants' costs for which the 4th defendant is liable.
In this regard, I am of the view that firstly, it would be reasonable to consider that whereas 30% of the claimants' costs were expended on litigating the update alone, the remaining 70% were expended on litigating the dossier and the website, being 45% and 25% respectively. Secondly, I am of the view that although the majority of these costs would have been expended in any event if the claimants had pursued only the 4th defendant to trial, there have been additional costs expended by the claimants in pursuing the remaining defendants to trial, which should not be borne by the 4th defendant. I consider that these costs amount to 20% of the total, such that the amount of the claimants' costs for which the 4th defendant is liable to pay to them is 56% of their reasonable costs to be assessed on a standard basis.
In relation to the second issue, namely the liability of the 4th defendant to make an interim payment to the claimants on account of costs, CPR 44.2(8) provides for the making of such an order, unless there is good reason not to do so. In the present case there is no such good reason, but, bearing in mind that the claimants will only be entitled to an order for a percentage of their total costs from the 4th defendant, the order will be in the sum of £25,000.00.
In these circumstances, save for paragraphs 3 and 4 of the previous order in relation to costs dated 12th May 2015 which will remain, I will substitute the following orders:
i. The claimants shall pay the 1st, 2nd and 3rd defendants' reasonable costs on the indemnity basis, such costs to be subject to detailed assessment if not agreed;
ii. The 4th defendant shall pay 56% of the claimants' reasonable costs on the standard basis, such costs to be subject to detailed assessment if not agreed;
iii. The 4th defendant shall pay the claimants the sum of £25,000.00 by way of an interim payment on account of costs by 4.00 pm on 10th August 2015.
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Mr Justice Wyn Williams:
Introduction
In these proceedings the Claimant seeks damages for the tort of false imprisonment. He alleges that the Defendant's servants or agents falsely imprisoned him from 30 June 2011 until 6 September 2012. The Claimant argues that he is entitled to compensatory damages, aggravated damages and exemplary damages.
The Defendant asserts that the Claimant was not falsely imprisoned at all; rather he was detained lawfully throughout the period in question in exercise of the power to detain conferred upon the Defendant by section 36 of the UK Borders Act 2007 (hereinafter referred to as "the 2007 Act"). Alternatively she argues that even if false imprisonment is established the Claimant is entitled to nominal damages only.
I heard oral evidence from the Claimant himself. The Defendant relied upon a witness statement from Mr Andrew Middleton, an employee of the Home Office. He played no part in the decision making process in this case but he reviewed the paper work and provided views upon it. He was not required to give oral evidence before me and, accordingly his evidence is not contradicted. The Trial Bundle contains a significant number of documents which were put before me without the need for their authors to prove each document. Following Counsel's opening of the case on behalf of the Claimant, I considered an application to amend the Particulars of Claim. I granted the application and gave my reasons for so doing in an oral judgment.
In the remainder of this judgment the word Defendant is used not just to identify the Defendant herself and /or the Home Office but also to encompass all the employees or agents of UKBA or the Home Office who have been involved in decisions relating to the Claimant's detention between 30 June 2011 and 6 September 2012.
The Claimant's factual case as pleaded
The following is a summary of the factual basis upon which the Claimant pursues his claim. As will become apparent there are a number of important factual disputes between the parties. However, in this short section of my judgment I set out what the Claimant now alleges.
The Claimant was born and brought up in Sierra Leone. His father was a British citizen, originally from Lebanon; his mother was African whose country of origin is unknown to the Claimant. The Claimant was originally one of four children. One of those children, a sister called Patricia, died in 2010.
The Claimant arrived in the UK in 1997. Shortly before his arrival in this country the Claimant's parents were killed in front of him, his family home was burnt down and he, himself, was held hostage and tortured by rebel soldiers. All this occurred in the context of a civil war then raging in Sierra Leone.
Following his arrival in the UK the Claimant claimed asylum. At or about that time he was granted leave to enter for a period of 6 months. However, the application for asylum was refused "for non compliance" on 30 May 2003.
The Claimant has struggled to adjust to life in the UK. He has three children by two different partners. He is addicted to heroin having started to use the drug in or around 2001.
On 30 April 2010 the Claimant was sentenced at the Crown Court to a total term of imprisonment of three years and nine months. This sentence was for the offences of robbery and failing to surrender. The Claimant was due to be released from that sentence on 30 June 2011. However, on that day the Defendant exercised her power to detain the Claimant. There is no dispute about the fact that the Defendant was purporting to exercise a power to detain conferred upon her by section 36(1) of the 2007 Act.
An important aspect of the Claimant's factual case is his assertion that he was the victim of torture at the hands of a rebel group prior to his departure from Sierra Leone. His pleaded case is that he gave a truthful account of the history relating to his torture when he was interviewed on 7 February 2011 in respect of an asylum claim which he had made upon being informed that he was liable to be deported following the completion his sentence. In the light of that assertion and the fact the Defendant now disputes the credibility of this account I set out below the salient questions and answers as recorded contemporaneously by the Defendant.
"Q1. Why do you fear returning to Sierra Leone?
A. I fear for my life is going to be at risk. The people that burnt my house down and killed my parents I'm scared they are still going to be there the rebels they call RUS, Revoluntary United Front.
Q2. When did they burn your house down what was the date?
A. This was June, me parents shot, me house get burnt down, I was captured taken to the bush with them. I was with them about 3-4 days being mistreated humiliated, abused and everything and then fortunately we escaped me and one of the other guys and made it to the city. This happened in Mayamba. I was in Freetown living rough no fixed abode when I heard it on the radio all British Citizens should make their way down to Lumbly Beach so that's where the evacuation was taking place to a ship. I was taken by helicopter to the ship in the middle of the sea. This was by the American marines. From the ship I spent one night then I was taken to Guinea that is the neighbouring country to Sierra Leone. So I slept in Guinea that night in a hotel. Then the next day we boarded a plane from Guinea straight to Stansted Airport.
Q3. What date did the rebels burn your house down?
A. I can't remember the actual day it was 97.
Q4. What month in 1997?
A. Around between April and May.
Q5. What date were your parents killed?
A. The same time when the rebels attacked the town there was gunshot rapid firing everyone was running in the bush hiding there were dead bodies on the floor. They were burning houses down.
Q6. Were your parents killed the same day as your house was burnt down?
A. Yes all happened on the same day when they attacked the town when they take over the town approx 9-10 hours there was rapid firing everywhere.
Q7. Were your family targeted specifically?
A. Yeah they were because my father was a prominent business man. He was a well known man he was a foreigner he was white.
Q23. What happened when your parents were killed and your house was burnt down?
A. The rebels entered the town they were firing gunshots everywhere. People were running for their lives going into bushes everything. The rebels take over the town. I escaped after that I realised my parents had been killed and my house has been burnt down. After I make my way to the city. When you are in the bush people would sneak back to the town and then come back with the news about what happened in the town. So you got to know what was going on.
Q24. How long were you in the bush for?
A. About three days.
Q26. When the rebels entered the town did you go straight to the bush to hide?
A. Yes, everybody was running a few of the guys got caught by the rebels, if you got caught they forced you to join, they give you a gun and everything.
Q27. Did you get caught by the rebels?
A. Yeah when I was in the bush.
Q28. When did you get caught?
A. When we escaped we went into the bush.
Q29. Who were you in the bush with?
A. With some other civilians that escaped the town.
Q30. Where were the rebels?
A. They were in the town.
Q31. When did you get caught by the rebels?
A. We were in the bush when the rebels attacked the town.
Q32. Where did the rebels catch you?
A. No I escaped
Q33. Were you caught by the rebels?
A. No I was not caught by the rebels I escaped.
Q34. In question 2 you stated "I was captured taken to the bush with them. I was with them about 3-4 days being mistreated, humiliated abused and everything". You have just stated in Q33 that you were not caught by the rebels.
A. This was not June that they burnt me house down this between May I can't remember it was way back I cannot remember the whole thing. I was in the bush with the rebels. Then me and my friend escaped. It was way back I can't remember. When I said I wasn't caught I should have said I was.
Q35. If you should have said you was captured why did you say you wasn't?
A. Well yes I was caught. Can you change it please?
Q36. No I can't you said no and I have to record what you say.
A. I don't know if I want to carry on with interview. Please change it, it will affect my claim.
Q37. No I cannot change it it is what you said. I have to record what you say are you happy to continue with the interview?
A. No you are complicating things.
Q38. Do you want to continue with interview?
A. No because you make it look like I am lying.
Q39. I am not making it look like you are lying. I record what I ask and what you say. Do you wish to terminate the interview?
A. No let's carry on.
Q41. Were you or were you not caught by the rebels?
A. We were caught by the rebels when they attack in the bushes everywhere.
Q42. Where did they catch you?
A. When we were running to the bush leaving the town.
Q43. How were you caught?
A. They were in the bush. They jumped out with guns then we were caught. I've seen a lot of things a lot of horrible things all I can remember is when I got back to the city.
Q44. Where did they take you?
A. They took us to the bush, small villages in the bush.
Q45. What did they do to you?
A. They get some other people there they forced you to join them. I was beaten up forcing me to join them. Then fortunately me and my friend escaped.
Q47. How many times were you beaten?
A. I can't remember.
Q48. How did you escape?
A. I can't remember. How I escaped it's what I'm thinking now (long pause) when they were not around sometimes they go out to attack other places. It was when they were out my friend I was with knew the area I can't be bothered to think of this I can't remember all the horrible things that I have seen. I get flashbacks I can't remember everything. I want to stop now"
These questions and answers are to be found in the Trial Bundle at pages 981L to 981T.
The Claimant also relies upon accuracy of "notes" which were available to the Defendant at the time he was transferred from prison to "immigration detention" which occurred on 14 August 2011 (see paragraph 17 of the Amended Particulars of Claim). These "notes" were not identified specifically during the course of the hearing. However, I do not understand it to be the Claimant's case that he was interviewed by anyone about his alleged history of torture during July/August 2011 when the transfer was being arranged. Accordingly, any notes which were created in that period would have been based upon statements made by the Claimant on earlier occasions.
The Claimant was not released from prison on 30 June 2011. He remained in prison, at HMP Bullingdon, until 14 August 2011 albeit that he was detained pursuant to the 2007 Act. He was transferred from HMP Bullingdon to Harmondsworth Immigration Removal Centre (IRC) on 14 August 2011. The Claimant alleges that "the fact that [he] was a victim of torture was known or should have been known to staff upon arrival at Harmondsworth" (see paragraph 18 of the amended Particulars of Claim). The Claimant was not examined by a doctor either within a short time of his arrival at Harmonsworth or at all.
The Legal Basis for the Claim
The Claimant advances two bases upon which it is alleged that the whole period of the Claimant's detention was unlawful i.e. it constituted false imprisonment. First, the Claimant asserts that he was detained in breach of the Defendant's published policy. In summary the Defendant's policy is that persons within certain identified categories are normally considered suitable for detention only when very exceptional circumstances can be demonstrated. One of the categories specified by the Defendant in her policy is "those where there is independent evidence that they have been tortured". The Claimant maintains that his detention was in clear breach of this policy. In her closing written submissions Ms Sjovoll puts this allegation forward as her primary case.
Second, she asserts that the Claimant's detention was unlawful since it infringed the principles formulated in R –v- Governor of Durham Prison ex parte Singh [1984] 1WLR 704 known, colloquially, as the "Hardial Singh principles". Those principles were conveniently summarised in the judgment of Dyson LJ (as he then was) in R (I) –v- Secretary of State for the Home Department [2003] INLR 196 at page 208 as follows:-
"(i) The Secretary of State must intend to deport the person and can only use the power to detain for that purpose.
(ii) The deportee may only be detained for a period that is reasonable in all the circumstances.
(iii) If, before the expiry of the reasonable period, it becomes apparent that the Secretary of State would not be able to effect deportation within that reasonable period, he should not seek to exercise the power of detention.
(iv) The Secretary of State should act with reasonable diligence and expedition to effect removal."
The Claimant asserts that his detention was unlawful in relation to those principles because (a) there was never any realistic prospect that he could be removed to Sierra Leone and (b) in any event the period of detention was not reasonable in all the circumstances.
The Defendant's Decision-Making Process
The Defendant adduced no oral evidence from any person directly engaged in the process by which the decision was made to detain the Claimant on 30 June 2011 or to maintain detention until 6 September 2012. Further there was no oral evidence adduced about the reasoning which led to the Claimant's detention on 30 June and his continued detention between 30 June 2011 and 6 September. However there is a good deal of documentation in the Trial Bundle which throws considerable light upon what occurred and why it occurred. As I have said already the parties agree that this evidence is admissible without the need to call the makers of the documents contained within the Bundle. What follows in this section of the judgment is my summary of what the documents reveal interspersed with some factual conclusions.
In June 2010 the Claimant was served with an appropriate notice specifying that he was liable to automatic deportation. At this stage the Defendant considered the Claimant to be a foreign national and in light of the fact that he had been sentenced to a term of imprisonment of three years and nine months he was thought to be subject to the automatic deportation provisions contained within the 2007 Act.
A person served with such a notice may complete a questionnaire in response. The Claimant availed himself of this opportunity and within the completed questionnaire he made a claim for asylum. (That was the second time the Claimant had made a claim for asylum; the first application had been made in 1997). Either at the point in time when the Claimant made his second application or very soon thereafter the Claimant appointed solicitors to help him attempt to resist deportation and obtain asylum. The solicitors were Turpin & Miller LLP (hereinafter referred to as "Turpin").
The process of assessing the claim for asylum began, in earnest, with interviews which took place between the Defendant and the Claimant on 24 September 2010. On that date the Claimant underwent a screening interview and an asylum interview and a verbatim record of what was said was made. On 7 February 2011 a further asylum interview took place – I have already referred, extensively, to the record of interview of that date.
In March and April 2011 there was correspondence between Turpin and the Defendant. By letter dated 9 March 2011, the Claimant was informed that no decision had been made upon his asylum application and that no decision about deportation would be made before 23 March 2011. The letter also requested that the Claimant provide an additional witness statement to support the asylum claim. In a 1etter dated 12 April 2011 the Defendant extended the period for the Claimant to provide a witness statement to 26 April 2011. No witness statement was sent by the Claimant's solicitors within that period. Accordingly on 16 May 2011 the caseworker responsible for reaching a decision upon the Claimant's liability to deportation sent a file to a colleague authorised to make a decision upon the claim for asylum. However, as of 30 June 2011 no decision on the asylum claim had been made.
As the date for the Claimant's release from his sentence approached the Defendant began consideration of whether she should exercise the power to detain the Claimant under the 2007 Act. On 9 June 2011 a caseworker made a recommendation that the Claimant should be detained under Section 36(1) of the 2007 Act as from 30 June 2011. The rationale for that recommendation is contained in a "Minute of Decision" (Trial Bundle pages 150 -152):-
"Mr Assad was served with a refusal to vary leave or enter or remain in 2003, his claim for asylum was also refused. He failed to leave the United Kingdom as required. He has a history of drugs and alcohol abuse.
Mr Assad is aware that if his current claim for asylum was to fail he would be considered for deportation. His children have all been adopted and he would not be permitted contact with them if he were to be released. Mr Assad is considered to be a risk of absconding as he does not appear to have any strong ties with the United Kingdom. Also, part of his conviction was failing to surrender to custody.
Due to Mr Assad's past history of substance abuse it is considered that he could re-offend if released. Particularly as he does not seem to have any close ties to the UK to encourage him to abide by UK laws. It is noted that he has not been visited whilst in prison.
Mr Assad has been convicted of a serious crime and therefore he is considered to be a risk to the public. Although there appears to be no current threat of violent behaviour, I propose that we detain Mr Assad."
The recommendation to detain was considered on 22 June 2011. Authority for detention was given and the reasoning for that decision was as follows.
"Detention authorised beyond his custodial sentence:
Mr Assad has not submitted any evidence of lawful basis to remain neither has be provided any evidence (although he has children) of established ties with or in the UK. Although there is no evidence of previous absconding, the fact that his crime suggests a demonstration of disregard for immigration control and with the knowledge that the UKBA intends to deport him he is viewed as a potential absconder. It is believed asylum decision will be made within a reasonable timescale.
Although we have his details as an SL nationality, he claims that he has right of abode in UK. But UKBA is unable to identify his/parent details to match. Despite this it is felt that continued detention is still reasonable because Mr Assad has not provided any evidence of his nationality. I refer to your Minutes and noted that he is risk to the public. He poses a risk of harm to the public if released due to the nature of his conviction, risk of further offending and as well as his likelihood of absconding. These factors outweigh the presumption to release."
On 23 June 2011 the Claimants' solicitors wrote to the Defendant enclosing the Claimant's signed witness statement. In it the Claimant wrote:-
"1. I was born on 4 April 1970 in Sierra Leone. My father was originally from Lebanon, but I think he came to Sierra Leone as a child with his parents. He was born in 1935.
2. We lived in a small town in Sierra Leone called Moyamba.
3. Problems began locally with the civil war and the actions of the Revolutionary United Front. In 1993 my family house was burnt down. My parents were in it at the time and they were killed.
4. So many people died at this time, there were none of my friends and family left.
5. I do not know if the burning of my parents' house was targeted. It may well have been. My mother's family were involved in politics, with the All Peoples Party. My father was a business man in Moyamba……..
6. I had three brothers and two sisters. One of my brothers and my two sisters are in the UK. I have lost contact with my other two brothers since before all the problems. I presume them to be dead.
7. When the rebels came to my village they took all the young men of an age to be useful to them. They took more than twenty of us, including me.
8. They took us into the bush land. They told us we had to join them or they would kill us. I did not want to join them. I was not politically active and did not understand the politics behind any of what was going on, but I knew that it was not right to kill innocent people and I did not want to be a part of that.
9. I was scared I would be killed. They would beat us with sticks and canes and burn our skin with the ends of their cigarettes. I had scares from this, but mostly they are gone now.
10. After a few days in the bush, I managed to escape. I knew that if I was caught I would be killed but I thought I just had to try. I could not stay and be trained in their army and kill innocent people.
11. I managed to get away and got to the city, Freetown. I wanted to get out of the county. I tried to get a passport but was told that I could not have a Sierra Leone passport because I was not a national of that country.
12. I had my birth certificate and my dad's passport. I went to the British High Commission with these documents and I was given a British passport. This was in July 1995.
13. All the British people were being evacuated because of the war. ………We went on the ship to Guinea, and from Guinea I flew to Stansted for safety.
14. I arrived in the UK on 6 June 1997. In July 1997 I claimed asylum. I have not left the UK since that time. My passport was taken from me when I claimed asylum and I have still not had it back."
There is no documentation within the Trial Bundle which shows what happened to this witness statement once it was received by the Defendant. Further, Mr Middleton, in his witness statement, does not deal with what might have happened to it. That said, there is no dispute that the Defendant received it; it was disclosed to the Claimant's current solicitors either by virtue of a freedom of information request or during the course of and because of these proceedings.
On 23 June 2011 the Defendant wrote to the Claimant to inform him that it had been decided that he should be detained pending deportation. The letter contained the reasons which were said to justify the detention. They were as follows:-
"You have previously failed or refused to leave the United Kingdom when required to do so. Your original claim for asylum was refused in 2003. You refused to leave the United Kingdom as required.
You have previously failed to comply with conditions placed upon you by the police or the courts. It is noted that part of your conviction was failing to surrender to custody.
You have not produced satisfactory evidence of your identity, nationality or lawful basis to remain in the United Kingdom. You have failed to provide any evidence that your stay in the United Kingdom is lawful.
You do not have enough close ties (e.g. family or friends) to make it likely that you will stay in one place. You have failed to provide any evidence that you have any close ties to the United Kingdom.
You have shown a lack of respect for United Kingdom law as evidence by your convictions for serious crimes, namely robbery and failing to surrender to custody.
You have been assessed as posing a risk of harm to the public because you have committed the above offence and there is a significant risk of your re-offend.
Your unacceptable character, conduct or associations leaves us to believe that if you were to be released you would go on to re-offend or abscond.
The Secretary of State is not satisfied that your relationships with the United Kingdom are of sufficient proximity to give rise to family life for the purposes of Article 8.
In reaching this decision the Secretary of State has balanced your right against the wider rights and freedom of others and the general public interest. The Secretary of State has weighed up the extent of your possible private and family life against your criminal convictions. She considers that her actions are proportional to a social need being fulfilled and does not accept the decision to maintain your detention would breach Article 8. It is considered that your detention is justified for the reasons stated in this letter. Your detention will be reviewed on a regular basis meanwhile your application will be considered without any unavoidable delay."
On 27 June 2011 Turpin wrote to the Defendant to ask that there should be forwarded to them any information that it held relating to the Claimant being a citizen of Sierra Leone. The letter went on to assert that at least one of the Claimant's siblings, Eric Assad, had been granted indefinite leave to remain in the United Kingdom. Information about his case was included with the letter. The letter ended by asserting that any "continued immigration detention" would be unlawful. That assertion was predicated upon the suggestion that the Claimant's case was indistinguishable from that of his brother. Notwithstanding this representation the Claimant was detained on 30 June 2011.
In the light of the above the following conclusions seem inescapable. First, no representations were made to the Defendant, prior to the Claimant's detention, to the effect that the detention of the Claimant would be unlawful by reason of the fact he had been the victim of torture sometime in the past. That said the Defendant was in possession of the records of the asylum interviews and a signed witness statement dated 14 April 2011 but received, probably, in the last days of June which asserted that the Claimant had been the victim of significant ill-treatment, at the very least, for a period of a few days when he was resident in Sierra Leone. It may be, of course, that these documents were not all held together. It is readily understandable that they may not have been held in the same file.
On 6 July 2011 Turpin wrote to the Defendant requesting that the Claimant be given temporary admission, or alternatively, that he should be transferred to an immigration detention centre. The Defendant responded by letter dated 7 July in which confirmation was given that a referral had been sent to the detention management estate with a view to obtaining a place for the Claimant.
On 8 July 2011 the Defendant submitted an application to the Sierra Leone High Commission for an emergency travel document so as to permit the Claimant to be returned to Sierra Leone. According to the witness statement of Mr Middleton on the same date UKBA received information to the effect that a British citizen's overseas passport had been issued to the Claimant on/or about 14 July 1995 and that the issuing officer must have been satisfied that the Claimant was entitled to such a passport. It was also on 8 July 2011 that the Defendant notified Turpin that the request for temporary admission was refused and that steps were being taken to investigate the Claimant's nationality.
On 18 July 2011 Turpin wrote again seeking temporary admission for the Claimant or, in the alternative, transfer to immigration detention. The Defendant replied by letter dated 20 July 2011 informing Turpin that the Claimant's request for transfer to immigration detention would be granted subject to the carrying out of an appropriate risk assessment and available space.
On 21 July 2011 the Defendant conducted a review of the Claimant's detention. The review recognised that there were barriers to removal. They were the fact that the asylum claim could not be considered until the Claimant's nationality had been established and second that a deportation order could not be made until the asylum claim had been determined. Nonetheless the officer conducting the review recommended that detention be maintained and that recommendation was accepted. The officer who actually authorised detention wrote:-
"Detention authorised at the one month stage. Subject poses a risk of harm due to nature of conviction for robbery and poses a risk of absconding due to the offence of failing to surrender to custody, little reliance can be placed on him complying with reporting restrictions if released. Caseworker is liaising with CSIT to attempt to establish subject nationality so that asylum claim can be decided and deportation case progressed. Release referral was sent to the Strategic Director and he stated subject should remain detained and to get back to him in three months if nationality has not been established. These factors currently outweigh the presumption to release. "
On 27 July 2011 Turpin submitted a bail application on behalf of the Claimant. The next day the Defendant wrote to the authorities at HMP Bullingdon asking that they encourage the Claimant to complete and return an application for an emergency travel certificate which could be submitted to the Sierra Leone High Commission.
On 2 August 2011 the First Tier Tribunal refused the Claimant's application for bail. The next day Turpin wrote to the Defendant asserting that the Claimant's asylum claim ought to be determined without awaiting confirmation of his citizenship rights. On 5 August 2011 the Defendant responded by disagreeing with that suggestion; Turpin was asked to encourage the Claimant to complete an application for an emergency travel document.
The transfer to Harmondsworth IRC took place on 14 August 2014. I received no oral evidence about what occurred immediately upon transfer but there is a relevant document within the Trial Bundle. Pages 604 to 613 appear to be one document which is intended to be completed by a nurse and a doctor. If completed it would constitute a record of an assessment by those health care professionals. In the Bundle the pages are out of sequence but it is clear when the document is properly arranged that the first seven pages are intended to be completed by a nurse following a medical assessment by the nurse and the following three pages are intended to be completed by a general practitioner.
The first seven pages of the document within the Bundle have been completed; those pages were completed by a nurse named Nancy Nyamande; page 7 has her signature and printed name. The last three pages have not been filled in; they are completely blank and there is no signature on the last page.
Page 4 of the document (Trial Bundle page 610) has a number of boxes which need to be completed. One of the boxes has within it:-
"Torture claim made: y/n (please circle)"
The next box is headed "Details of Torture Claims (if applicable)" and finally there is a box divided into two which asks the nurse to specify whether consent has been given to notify the immigration authorities of a torture claim and, further, asks the nurse to specify whether or not "Rule 35" has been submitted – as to which see below. The form completed by Nurse Nyamande specifies that no torture claim has been made; the letter n is circled. Unsurprisingly, therefore, the box which permits details of a torture claim to be made is blank. Similarly there is no indication of any consent for the immigration authorities to be notified of a torture claim.
Page 5 of the document (Trial Bundle page 606) is also instructive. That contains a box in which details can be provided as to the Claimant's mental health and or mood. The nurse wrote in this box:-
"Mood was observed to be stable and he communicated well. He kept eye contact. Complained of pain from the ulcer area and hernia which he said he is awaiting repair. Denied having suicidal thoughts. He reported he was on methadone …….every morning."
Almost immediately below this box the nurse has indicated that in her opinion the Claimant was suffering from depression. She has also noted that there was no history of self harm or suicide attempt and no current thoughts of self harm or suicide attempts.
It was also incumbent upon Nurse Nyamande to complete a risk assessment and a disability questionnaire. She did both those things on 14 August 2011. The disability questionnaire is signed not just by the nurse but also by the Claimant. In answer to the question "does the detainee have any form of disability" the answer no is circled. That is despite the fact that it is clear from the document that a person with mental health issues may be considered to be under a disability (see Bundle page 615).
Pages 616 to 618 of the Trial Bundle consist of notes made during medical examinations undertaken while the Claimant was at Harmondsworth. It is clear, for example, that the Claimant was seen by a doctor on 16 August 2011 and although the doctor's writing is difficult to read the consultation clearly related to a perforated ulcer from which the Claimant was then suffering. In the notes that follow it is clear that a number of consultations took place, all, apparently, relating to physical issues.
The Defendant carried out a second detention review on 15 August 2011. It was decided that detention should continue. The decision was motivated by much the same considerations as had influenced the initial decision to detain.
On 1 September 2011 Turpin wrote to the Defendant pointing out that the asylum claim was still outstanding and asserting that the Claimant had signed an authority, twice, for the Defendant to approach the Sierra Leone High Commission in relation to the provision of an emergency travel document. Additionally, the solicitors asserted that the Claimant was not removable to Sierra Leone.
On 2 September 2011 the Claimant himself wrote a long and detailed letter to the Defendant. The letter raised a number of points including the Claimant's assertion that he had been issued, quite legally, with a British passport as a British overseas citizen. The Claimant also made many points about his history, health, family and desire to remain in the UK. He enclosed a number of documents to demonstrate the efforts which he had been making in prison to reform. It is noteworthy, however, that nowhere in his long and detailed letter did he raise the impact which detention was having upon him by reference to any history of torture.
In the three months or so which followed the Defendant was engaged in investigating the Claimant's nationality and taking such steps as were necessary to reach a decision upon his asylum claim. Further there were monthly detention reviews. This all culminated in a decision dated 13 December 2011. That decision was to the effect that the Defendant was obliged to make a deportation order because the Claimant was a foreign national who had been convicted of an offence and sentenced to a period of imprisonment of at least twelve months and none of the relevant exceptions applied. The suggestion which has been advanced by the Claimant that he was a British citizen was rejected and the Defendant's view was that the Claimant could be deported to Sierra Leone.
The decision notice dealt with the Claimant's asylum claim in detail. It made detailed references to questions which the Claimant had answered in his screening interview on 24 September 2010 and his asylum interviews which took place on 24 September 2010 and 7 February 2011. In particular the decision recorded, in summary, the answers which I have set out in detail in paragraph 11 above. Having set out the substance of those answers and general information related to conditions in Sierra Leone during the decade beginning 1991 the Defendant concluded:-
"You are considered to be a credible witness and therefore based on the above country evidence pertaining to Sierra Leone it is accepted that your parents may have died in the manner you have described and for the reason you have given. It is also accepted you may have been held for a short period by rebels in Sierra Leone and subjected to ill-treatment before escaping."
The decision letter made no reference to the witness statement which had been sent to the UKBA on 23 June 2011.
The Claimant was entitled to appeal against the Defendant's decision and he exercised that right. In a determination promulgated on 31 January 2012 the Claimant's appeal was dismissed. The Claimant appeared in person at the First Tier Tribunal. The Tribunal concluded that the Appellant was not a British citizen. It also concluded that his asylum and human rights appeals should be dismissed. On 14 February 2012 the Claimant's application for permission to appeal to the Upper Tribunal was dismissed and his appeal rights have long since been exhausted.
By the summer of 2012 the Claimant had instructed his current solicitors, Wilson Solicitors LLP (Wilson). On 13 July 2012 Wilson instructed Dr Jane Anderson, a higher speciality registrar in forensic psychiatry, to prepare a report upon the Claimant. Her instructions were to prepare a psychiatric report and "to assist with background issues and specifically to address his risk of future offending".
The doctor interviewed the Claimant at Harmondsworth IRC on 25 July 2012. She recorded in her report that the documents available to her were the Claimant's prison records dating from 1 August 2009 to 15 August 2011, a bail summary, an appeal determination from the First Tier Tribunal dated 31 January 2012, an OASys assessment report dated 18 May 2010, various certificates, references and UKBA progress reports belonging to the Claimant and her instruction letter from Wilson.
The report prepared by Dr Anderson contained information provided to her by the Claimant as to his family and personal history. Under the heading "Family History" the doctor wrote:-
"Mr Assad's parents are both deceased. He stated they died during the war in Sierra Leone in the early 1990s; he was unclear as to the cause of their death…….."
However under the heading Personal History the doctor recorded the following:-
"Mr Assad stated that half his family were killed in the war that followed, their houses burnt, and he himself was tied up and beaten when he refused to join the rebels. He attempted to leave in 1995 and eventually left for the UK in 1997 aged 27."
Under the heading Mental State Examination the doctor wrote:-
"I examined Mr Assad in the Health Care Department at IRC Harmondsworth on 25 July 2012. Mr Assad is a 42 year old man of African origin. He was casually dressed well kempt. He had mistakenly attended legal visits and arrived almost one hour late for his appointment, and was a bit flustered by this, but recovered quickly. He made good eye contact and rapport was easy to establish. He was able to concentrate throughout the whole assessment. His personal narrative varied between vague and precise depending on the topic, such that I wondered if there were topics he did not wish to discuss with me. There were several temporal and factual inconsistencies when compared with his First Tier Tribunal evidence and interviews with other assessors.
His speech was normal in tone, rate and volume. Mr Assad's mood was subjectively and objectively euthymic (normal) with normal emotional reactions to the topics we covered. He denied any problems with his sleep, appetite or energy levels. He denied any thoughts of harming himself or others. There were no abnormalities with regard to unusual thinking, beliefs, experiences or perceptions elicited during the assessment. Mr Assad was orientated to time, place and person and I did not identify any concerns with his cognitive ability during the assessment, although his cognitive function was not formally tested."
On the basis of her examination and assessment of documentation Dr Anderson formed the view that the Claimant was not suffering from a mental disorder.
As I have said the primary purpose of the report prepared by Dr Anderson was to assess the likelihood of the Claimant re-offending. Much of her report is concerned with this issue. It suffices that I record that she considered there to be a medium risk of the Claimant re-offending and a medium risk of his causing serious harm.
From my scrutiny of the papers, I am unable to discern when it was that this report was disclosed to the Defendant. There is no reference to it in the detention reviews which were undertaken immediately after the report was obtained. The probability is that it played no part in the Defendant's decision-making process.
It is also necessary to mention other aspects of the history as it unfolded in 2012. I can do this by reference to Mr Middleton's witness statement. Either on or shortly before 22 February 2012 the Claimant had a telephone interview with the Sierra Leone High Commission. The responsible official at the Commission reached the provisional conclusion that the Claimant was not likely to be a citizen of Sierra Leone and accordingly it was thought appropriate that there should be a face to face interview between an official of the Commission and the Claimant. On 8 March 2012 the Claimant attended the Commission for such an interview. This was due to take place in the presence of a UKBA officer. However the Claimant was late arriving by which time the officer had left. The probability is that no face to face interview took place on that day. An arrangement was made for an interview on 16 May. Mr Middleton's unchallenged evidence is that the Claimant refused to attend on that date. On 30 May 2012 the Defendant arranged for a further face to face interview at the Sierra Leone High Commission. The meeting was scheduled for 13 June and the Claimant was taken to the Commission on that date. Precisely what transpired on this occasion is not known from the available evidence. However Mr Middleton's witness statement records that at the hearing of the bail application which resulted in the Claimant's release on bail on 6 September 2012 he placed reliance upon a letter dated 5 September 2012 purporting to come from the Sierra Leone High Commission which certified that the Claimant was a British overseas citizen and was not a citizen of Sierra Leone. However Mr Middleton says that this letter was not copied to the Defendant and subsequent enquiries revealed that the application for an emergency travel document on behalf of the Claimant remained undetermined and there had been a request by the Sierra Leone authorities for a further face to face interview with the Claimant which had been scheduled for 4 December 2012.
The Claimant served a witness statement in these proceedings (dated 20 March 2015) and which stood as his evidence in chief. Paragraphs 24 to 28, in particular, contain a description of the alleged effect upon the Claimant of his detention between 30 June 2011 and 6 September 2012. At paragraph 26 the Claimant explains that his "past torture was affecting [him] a lot in detention". He claims that he was in constant pain and his past torture was always on his mind. Given that evidence, it is surprising, to say the least, that there is not a shred of evidence that the Claimant or Turpin made any representations to the Defendant to the effect that the Claimant should not be kept in detention by reason of his treatment in Sierra Leone. The Claimant's witness statement does not suggest that any such representations were made and there is no correspondence from Turpin or the Claimant personally to that effect.
What conclusions can be drawn from this history? First, the Defendant did not, at any stage, consider whether the Claimant had been the victim of torture in the context of whether or not he should be detained. However, second, the solicitors acting for the Claimant (Turpin) had been in correspondence about the possibility of the Claimant's deportation to Sierra Leone from early 2011. Turpin acted for the Claimant at the time when the decision was taken to detain him under the 2007 Act. They continued to act for him until late 2011. Not once did the solicitors suggest that detention was inappropriate on the grounds that the Claimant had been a victim of torture within Sierra Leone. Perhaps more importantly not once was it suggested by the solicitors that there was independent evidence that the Claimant had been tortured when residing in that country. Third, there is no evidence that the Claimant himself complained about detention on the grounds that he had been the victim of torture. Obviously, it may very well be that the Claimant did not know the details of the Defendant's policy on detention as it related to persons who had been victim of torture. However if detention was causing him to suffer as he now alleges in his witness statement and for the reason he now alleges it is very hard to explain why there is no mention of it in the copious medical notes and other records which were generated while the Claimant was in custody first serving his sentence of imprisonment and then pursuant to the 2007 Act. Fourth, as a matter of fact, there was no independent evidence in existence specific to the Claimant, either before or during the period when the Claimant was detained, to the effect that the Claimant had been tortured in Sierra Leone before coming to the UK. Fifth, on the only occasion (in the context of his detention) when the Claimant was asked a direct question about whether he had made a claim to have been a victim of torture, i.e. when he was asked by Nurse Nyamande on 14 August 2011, his answer was no.
There is a factual issue between the parties about whether the Claimant was examined by a general practitioner on the day of his transfer to Harmondsworth. Mr. Fortt, for the Defendant, submits, correctly, that the Claimant's witness statement does not assert that he was not examined by a general practitioner on or shortly after his transfer to the Centre. Further, he points out that the Claimant gave no oral evidence of any kind on this topic. He submits that the Claimant has not proved that such an examination did not take place. Ms Sjovoll takes a different approach. She submits that it is clear that no medical examination was undertaken by a general practitioner on 14 August because there is no record of such an examination. If such an examination had taken place, she submits, it is very likely that the doctor would have completed the appropriate record and, as I have identified, the record has not been completed (Trial Bundle pages 611 to 613). She relies upon the fact that the nurse who carried out a medical assessment did complete the relevant part of the record in support of her submission.
In some circumstances, I accept, it would be proper for a court to draw an inference that no medical examination has taken place when no written record of such an examination exists. However I have decided that it is not appropriate to draw that inference in this case. The plain fact is that this point first surfaced as an issue on the first morning of the trial. If the point was to have any credibility I would have expected a sworn statement from the Claimant detailing, as best he could remember, what had happened when he was transferred from prison to Harmondsworth on 14 August 2011. Yet his witness statement for trial is completely silent about what happened. Further, no permission was sought to submit a supplementary statement and no permission was sought to ask supplementary questions about this issue when the Claimant was examined in chief. In short, the Claimant has adduced no direct evidence that he was not examined by a general practitioner. I am not persuaded that in these circumstances it would be appropriate to draw an inference that no such examination took place simply from the absence of a written record of examination.
I am fortified in that conclusion because a very full written record was made of the nursing assessment which took place on the day of transfer. In large measure the written record expected of the general practitioner would have been a duplication of what had been written by the nurse. It is often in circumstances such as these that record keeping lapses. I have reached the conclusion that the Claimant has failed to establish that no medical assessment was undertaken by a general practitioner on the day he was transferred to Harmondsworth. If I am wrong about that, however, I am firmly of the view that it is most unlikely that the examination would have elicited from the Claimant any information which was different from that which was provided to and recorded by Nurse Nayamande.
In the light of my conclusions upon the decision making-making process and related matters I turn to consider the substance of the Claimant's case.
Breach of the Defendant's Policy
In her closing written submissions Ms Sjovoll makes it clear that her primary case is that the Defendant was in breach of her policy as it related to the detention of persons who had been tortured. She reminds me, too, that the authorities show that it is necessary for the Defendant to consider whether her policies apply to a proposed detainee and/or a detainee in the sense that the Defendant must take reasonable steps before and during detention to inform herself about the relevant history so as to be able to make an informed decision about whether a policy is applicable – see R(Das) v SSHD [2014] EWCA Civ 45 and, in particular, the judgement of Beatson LJ at paragraph 66. If the Defendant is in breach of her duty to apply her published policy or she fails to take reasonable steps to ascertain whether her policy is applicable and detention is authorised and/or maintained the tort of false imprisonment is proved. These principles are not in issue.
The Defendant's policy in relation to detention is to be found in Chapter 55 of the current "Enforcement Instructions and Guidance" issued by the Defendant. Chapter 55.10 is headed "Persons Considered Unsuitable for Detention" and the relevant parts read as follows:-
"Certain persons are normally considered suitable for detention in only very exceptional circumstances, whether in dedicated immigration accommodation or prisons. …
In criminal casework cases, the risk of further offending or harm to the public must be carefully weighed against the reason why the individual may be unsuitable for detention. There may be cases where the risk of harm to the public is such that it outweighs factors that would otherwise indicate that a person was unsuitable for detention.
The following are normally considered suitable for detention in only very exceptional circumstances, whether in dedicated immigration detention accommodation or prisons:
..............
Those where there is independent evidence that they have been tortured."
The Detention Centre Rules 2001 contain provisions relating to the healthcare of detained persons. They apply to detention centres but not to prisons. Under Rule 33 it is mandatory for a detention centre to have a medical practitioner who is a general practitioner. Rule 34.1 provides that every detained person shall be given a physical and mental examination "by the medical practitioner" within 24 hours of his admission to the centre. Rule 35 provides as follows:-
"(1) The medical practitioner shall report to the manager on the case of any detained person whose health is likely to be injuriously effected by continued detention or any conditions of detention.
(2) The medical practitioner shall report to the manager on the case of any detained person he suspects of having suicidal intentions and the detained person shall be placed under special observation for as long as those suspicions remain, and a record of his treatment and condition shall be kept throughout that time in a manner to be determined by the Secretary of State.
(3) The medical practitioner shall report to the manager on the case of any detained person who he is concerned may have been the victim of torture.
(4) The manager shall send a copy of any report under paragraphs 1,2 or 3 to the Secretary of State without delay.
(5) The medical practitioner shall pay special attention to any detained person whose mental condition appears to require it, and make any special arrangements (including counselling arrangements) which appear necessary for his supervisional care."
In R(EO and Others) –v- Secretary of State for the Home Department [2013] EWHC 1236 (Admin) Burnett J, as he then was, considered in detail the legal effect of a failure on the part of the Defendant to comply with Rule 34 of the Detention Centre Rules (see paragraph 49 to 53 of his judgment). He held that if a detainee is not medically examined within 24 hours of his arrival at a detention centre his detention thereafter will be unlawful unless there is some good reason for the failure to examine – see paragraph 53. However, in view of my conclusion that the Claimant has not proved that he was not examined by a general practitioner on 14 August 2011 this authority needs no further analysis.
Miss Sjovoll submits that as of June 2011 there was sufficient evidence available to the Defendant to the effect that the Claimant had been a victim of torture to make it necessary for the Defendant to take reasonable steps to ascertain whether the Claimant fell within the published policy and that had the Defendant taken those reasonable steps she would have reached the conclusion that there was independent evidence that the Claimant had been the victim of torture. If she had then gone on to consider whether any very exceptional circumstances existed to justify detention she would have concluded that no such circumstances existed. I turn to examine those submissions.
On 22 June when authority was given for the Claimant's detention under section 36 of the 2007 Act two documents existed in which reference was made to the Claimant being ill-treated in Sierra Leone before be came to the UK. They were the document known as a SEF Form which had been completed by the Claimant on 2 December 2000 during the course of an application he made for an asylum after arriving in the UK in 1997 and the record of interview which took place on 7 February 2011 (as to which see paragraph 11 above). Very shortly after the decision had been taken to detain the Claimant his solicitors (Turpin) submitted the Claimant's witness statement of 14 April 2011.
I should also record that by June 2011 the Defendant held a number of documents submitted by the Claimant or his solicitors in which no mention had been made of the allegation that the Claimant was subject to ill-treatment in Sierra Leone. On 11 September 2009 the Claimant submitted an account, personally, in which he stated that he had fled Sierra Leone due to heavy fighting and that his parents had been killed after his arrival in the UK (see Trial Bundle pages 878 to 879). On 30 June 2010 the Claimant submitted a questionnaire in which he made no mention of ill-treatment in Sierra Leone. During interviews in September 2010 the Claimant made no mention of ill-treatment at the hands of rebels.
There is no direct evidence, one way or the other, which shows whether some or all of these documents were considered by the person who took the decision to detain the Claimant. That said, I have reached the conclusion that none of the documents were considered by the decision maker. There is no reference at all to the Claimant's history in Sierra Leone in the documents which were generated by the decision maker (see paragraphs 21 and 22 above) and notwithstanding that the decision maker clearly knew that the Claimant had made an applications for asylum there is no reason to suppose he had read the documents generated by the applications or assessed their significance in relation to the Defendant's policy in relation to torture victims.
Despite this finding, I have reached the conclusion that there was no failure on the part of the Defendant, in advance of the decision to detain, to take reasonable steps to ascertain whether there was independent evidence that he had been tortured in Sierra Leone. These are my reasons for reaching that conclusion. As I have set out already, there came a point in time in 2011 when the Claimant and his solicitors knew that the Defendant was contemplating detaining the Claimant pursuant to the 2007 Act pending deportation to Sierra Leone. Neither the Claimant himself nor his solicitors made any representation of any kind which would have alerted the Defendant to the possibility that the Claimant had been a victim of torture and should not be detained. In my judgment, the taking of reasonable steps to ascertain whether a policy is applicable to a particular detainee does not extend to requiring a decision-maker to undertake a search to ensure that all files held upon a particular detainee are before him and all parts of those files scrutinised with a view to ascertaining whether any of the Defendant's policies are relevant to the case. The decision-maker is entitled to proceed on the basis that a detained person (especially one who is represented) will make sufficient representations when he is told of his imminent detention to draw attention to those features of his case which are relevant to the decision and which might need particular scrutiny. That is so, particularly, in my judgment when the decision-maker knows that the person to be detained has been serving a substantial term of imprisonment apparently without any serious effect. I have reached the conclusion that there was no failure on the part of the Defendant prior to making the decision to detain to take reasonable steps to ascertain whether her published policy in relation to the victims of torture was applicable in the case of the Claimant.
On 23 June 2011 Turpin wrote to the Defendant enclosing the witness statement made by the Claimant on 14 April 2014. The statement was provided as part of the evidence submitted by the Claimant in respect of his claim to asylum. Nonetheless, as I have set out in paragraph 23 above, the witness statement provided information about alleged ill-treatment of the Claimant when he was in Sierra Leone. Looked at in isolation, it may very well be that the receipt of this witness statement should have triggered an investigation by the Defendant about whether the detention of the Claimant would be in breach of her policy.
However, on the same date that Turin sent the witness statement, the Defendant faxed a letter to Turpin. Turpin was informed that the Defendant intended to detain the Claimant "beyond his custodial release date". On the same day the Defendant wrote to the Claimant, personally, explaining that the Defendant intended to detain him under the 2007 Act and providing him with detailed reasons why that decision had been made – see paragraph 24 above. There followed the letter date 27 June 2011 from Turpin which I have summarised at paragraph 25 above. It seems to me that the letters sent by the Defendant to the Claimant and his solicitor on 23 June 2011 provided a golden opportunity to protest about detention on the grounds that the same would infringe the Defendant's published policy about victims of torture yet no protest was made. Yet, as I have described, not one word was raised about the alleged previous history of torture. In these circumstances I am not prepared to find that the Defendant failed to take reasonable steps to ascertain whether her published policy on torture was applicable to the Claimant notwithstanding the receipt of a witness statement in which the Claimant was alleging that he had been ill treated when in Sierra Leone. I have reached the conclusion that the Defendant did not fail to take reasonable steps to ascertain whether her published policy relating to the detention of victims of torture was applicable either before the decision to detain was made or during any period of time between 30 June 2011 and 14 August 2011.
I turn to the period between 14 August 2011 and 14 December 2011 - the date when the deportation order made by the Defendant was served upon the Claimant. In my judgment there was no failure by the Defendant to comply with her published policy during this period. Upon transfer to Harmondsworth IRC the Detention Centre Rules 2001 became applicable. However, as I have found, the Claimant cannot establish that he was not examined by a general practitioner within 24 hours of his admission and accordingly he has failed to prove that the Defendant did not comply with Rule 34 of the Rules. Further, nothing occurred on 14 August or between 14 August 2011 and 14 December 2011 which could conceivably have triggered the need for a report under Rule 35. Rather, and very importantly, there is clear and unchallenged evidence that on 14 August 2011 the Claimant told Nurse Nyamande that he had not made a torture claim. Self-evidently in those circumstances the nurse took the view that there was no need for a report under Rule 35. On the basis of the information provided by the Claimant himself to the nurse, in my view, there was no obligation upon the Defendant to investigate or consider further whether her policy relating to the victims of torture was applicable. In addition during the whole of the period within which I am now dealing no representations were made of any kind to suggest that the policy was applicable. In these circumstances there was no failure to take reasonable steps to ascertain whether the policy relating to the victims of torture was applicable and, in my judgment, no breach of that policy.
On 13 December 2011 the Defendant issued a decision notice which made the Claimant the subject of a deportation order – the notice was served on the Claimant on 14 December. In that decision the Defendant concludes that the Claimant's account of his ill-treatment in Sierra Leone as given in his asylum interview of 7 February "may have been true". As from that date or a date shortly thereafter, at the latest, submits Miss Sjovoll, the Defendant was in breach of her policy. She had accepted in terms that the Claimant "may have been held for a short period by rebels in Sierra Leone and subjected to ill-treatment before escape". So far as I can see from the documentation before me there appears to have been no attempt by the Defendant to consider how the conclusion about the credibility of the Claimant's account of ill-treatment in Sierra Leone impacted upon the lawfulness of his detention. There is no document produced by the Defendant which demonstrates that the conclusion contained in the decision notice was considered in relation to whether detention should be maintained. In my judgment that was a failure to take a reasonable step to assess whether the Defendant's policy relating to the detention of victims of torture was applicable. That would justify a finding that the Defendant had falsely imprisoned the Claimant as from 14 December 2011 or a date shortly thereafter but for the argument raised by Mr Fortt relating to the decision in R(Francis) v SSHD [2015] 1WLR 567. As it seems to me, I am precluded from finding that the breach of policy constituted false imprisonment in this case by reason of this decision.
In Francis the claimant, a foreign national, was convicted of a criminal offence, sentenced to a term of imprisonment and recommended for deportation by the Crown Court.. When he became entitled to release on licence he was detained under paragraph 2(1) of Schedule 3 to the Immigration Act 1971 pending the making of a deportation order in pursuance of the Court's recommendation. When a deportation order was served his detention continued pursuant to paragraph 2(3) of schedule 3 to the 1971 Act. In judicial review proceedings he alleged that he had been detained unlawfully.
The Court of Appeal concluded that paragraph 2(1) of Schedule 3 to the 1971 Act imposed a statutory obligation to detain a person recommended by a court for deportation pending the making of a deportation order against him, subject to a discretion in the Secretary of State to order his release pending further consideration of his case. The court further concluded that paragraph 2(3) of Schedule 3 had the effect that, following the making of a deportation order in respect of a person already detained under paragraph 2(1), that person's detention was to continue on the same basis and, therefore, the detention of a person such as Mr Francis who had been detained under paragraph 2(1) continued under paragraph 2(3) to be pursuant to statutory authority. Accordingly, the court held that for so long as such authority lasted, an action for false imprisonment would not lie.
The decision in Francis is concerned with the phraseology of Schedule 3 of the 1971 Act. Paragraph 2(1) of Schedule 3 is in the following terms:-
"(1) Where a recommendation for deportation made by a court is in force in respect of any person, and that person is not detained in pursuance of the sentence or order of any court, he shall ….be detained pending the making of a deportation order in pursuance of the recommendation, unless the Secretary of State directs him to be released pending further consideration of his case …. "
Paragraph 3 provides:-
"(3) Where a deportation order is in force against any person he may be detained under the authority of the Secretary of State pending his removal or departure from the United Kingdom (and if already detained by virtue of sub-paragraph 1….above when the order is made, shall continue to be detained unless ….the Secretary of State directs otherwise)."
In this case I have to interpret and apply the relevant provisions of the 2007 Act. Section 32 provides:-
"(1) In this section "foreign criminal" means a person –
(a) who is not a British citizen,
(b). who is convicted in the United Kingdom of an offence, and
(c). to whom condition (1) or (2) applies.
(2) Condition (1) is that the person is sentenced to a period of imprisonment of at least 12 months.
(3) …….
(4) .......
(5) The Secretary of State must make a deportation order in respect of a foreign criminal (subject to section 33).
(6) ……
(7) ……."
Section 33 provides exceptions which, if applicable, prevent section 32(5) from applying. Section 36 provides:-
"(1) A person who has served a period of imprisonment may be detained under the authority of the Secretary of State
(a) while the Secretary of State considers whether section 32(5) applies and
(b) where the Secretary of State thinks that section 32(5) applies, pending the making of the deportation order.
(2) Where a deportation order is made in accordance with section 32(5) the Secretary of State shall exercise the power of detention under paragraph 2(3) of schedule 3 to the Immigration Act (detention pending removal) unless in the circumstances the Secretary of State thinks it inappropriate.
(3) ……..
(4)…….
(5)……."
Self evidently the statutory language in paragraph 2 of schedule 3 to the 1971 Act is somewhat different to the statutory language in section 36 of the 2007 Act. Paragraph 2(1) of Schedule 3 obliges the Secretary of State to detain a person while she considers whether to make a deportation order whereas section 36(1) of the 2007 Act confers a discretion upon her as to whether a person should be detained pending her determination of the applicability of Section 32(5). However section 36(2) compels the Secretary of State to exercise the power of detention "unless in the circumstances the Secretary of State thinks it inappropriate". In my judgment there is no material distinction of substance between that wording and the wording of paragraph 2(3) of Schedule 3 to the 1971 Act to the effect that Secretary of State shall continue to detain the person unless "the Secretary of State directs otherwise".
That being so, in my judgment, the reasoning which compelled the decision in Francis is equally applicable to the statutory language deployed in the 2007 Act – see paragraphs 11 to 18 of the judgment of Moore-Bick LJ and the short judgment of Christopher Clarke LJ. It would be very surprising, indeed, if Parliament had used the word "shall" in both paragraph 3 of Schedule 3 to the 1971 Act and section 36(2) of the 2007 Act yet intended that the word should have a different effect in each provision.
Accordingly, I have reached the conclusion that the Secretary of State was obliged to detain the Claimant once the deportation order was made by virtue of the language of section 36(2) of the 2007 Act and that this statutory warrant prevents the Claimant making a claim for false imprisonment for the reasons articulated in Francis since it subsisted until the Claimant was granted bail on 6 September 2012.
I should stress that this claim has never been pursued on the basis that there came a point in time when the Defendant should have taken a decision to release the Claimant from detention because she thought it "inappropriate" to continue his detention following the making of the deportation order and that his detention thereafter became unlawful. That is not the Claimant's pleaded case.
Accordingly, I have reached the conclusion that Claimant has failed to prove that the Defendant committed the tort of false imprisonment against him by failing to apply and/or consider the application of her published policy relating to persons who have been tortured.
Further, I have also reached the very firm conclusion that even if the Defendant did fail to take reasonable steps to ascertain whether her policy relating to the detention of persons who had been tortured applied to the Claimant both before the decision was made to detain him and throughout his period of detention and even if there was a breach of Rule 34 of the Detention Centre Rules, had the Defendant taken such steps as were reasonable to ascertain the applicability of her policy and had there been a medical examination by a general practitioner under Rule 34 the conclusion would have been, unequivocally, that the policy did not apply and the Claimant would have been detained for the reasons articulated in all the documents generated by the Defendant over the period of detention.
I say that first because the policy applies only when there is "independent evidence" that the person in question detainee has been tortured. I readily accept that this phrase does not require proof of torture on balance of probability. However, it does entail there being in existence some evidence independent of the Claimant himself which supports the assertion that he has been tortured. On any view, there was no independent evidence available at any material time which supported the particular account put forward by the Claimant in his asylum interview on 7 February 2011. There was, of course, information available to the Defendant about conditions in Sierra Leone during the relevant period. It does not seem to me, however, that such non-specific information as is referred to in the decision of 13 December 2011 can readily be described as independent evidence supporting the Claimant's contention that he was tortured when one considers the context in which the Defendant's policy is intended to operate. In my judgment the phrase "independent evidence" will usually consist of material which supports, at least in general terms, the account of torture put forward by the Claimant.
That said, the crucial issue in this case, as it seems to me, is whether the Defendant could have concluded, reasonably, that the Claimant had been tortured at all once reasonable steps (including a medical examination under Rule 34) had been undertaken to assess that issue. In his written closing submissions Mr Fortt argues, very convincingly, that such are the discrepancies in the Claimant's account of his ill-treatment contained within the documents which were available to the Defendant that no reasonable decision-maker would have concluded that the Claimant had been a victim of torture. Over a period of many years the Claimant's account of what occurred in Sierra Leone has changed on a number of occasions and to a material degree. In December 2000 in the context of his claim for asylum his account was that he had been badly beaten and left for dead in 1993. In 2009, the Claimant's account was that his parents had been killed after his arrival in the UK. In this account he made no mention of being ill-treated. In an account in June 2010 the Claimant asserted that his parents had been killed while he was in Sierra Leone but he made no mention of being ill-treated himself. On 24 September 2010 the Claimant was interviewed for the purpose of his claim for asylum. He made no mention of being ill-treated himself but asserted his parents had been killed in his presence. This was alleged to have occurred in 1997. In that interview he expressly denied ever having been detained in Sierra Leone. The account on 7 February 2011 is set out at paragraph 11 above. The exchange between the Claimant and the person asking the questions towards the end of the questioning process becomes much more significant set against the earlier inconsistencies and omissions. In his witness statement made no more than about two months later the Claimant was again asserting that his ill-treatment had occurred in 1993. (The words in italics are emphasised by me to highlight inconsistencies). In my judgment any reasonable decision-maker faced with these inconsistencies would not have accepted that the Claimant had been the victim of torture. Such a view would have been reinforced by the nursing record made on 14 August 2011 and by the total lack of any representations to the effect that the Claimant's detention could not be justified because of his history of torture. To repeat I am very firmly of the view that had reasonable steps been taken to ascertain whether the Defendant's published policy on torture applied to the Claimant the conclusion would have been that it did not because the probability was that he had not been tortured. Such a conclusion would mean that even if false imprisonment was established for any period on the basis of breach of policy the Claimant would be entitled to nominal damages only. Given the length of this judgment already it is unnecessary to consider in any detail the additional issue whether the Defendant would have concluded that the Claimant had been tortured yet "very exceptional circumstances" existed to justify detention. I doubt whether that finding was reasonably open to the Defendant but I express no concluded view upon it given my conclusions thus far.
In her written submissions in closing Miss Sjovoll candidly accepted that her claim based upon an alleged breach of policy was the principal claim advanced in this case. However she did not formally abandon her claim based upon a breach of the Hardial Singh principles and so I consider this part of the claim in summary form.
Did the Defendant Breach the Hardial Singh Principles?
There is no evidence to suggest that the Defendant did not intend to deport the Claimant. The Defendant never accepted that the Claimant was a British national as he alleged from time to time. The Defendant always treated him as a foreign criminal within the 2007 Act and reasonably concluded on the available evidence that he was most likely a citizen of Sierra Leone.
I am satisfied, too, that the Defendant acted with reasonable diligence and expedition in her attempts to remove the Claimant. Inevitably there was a need for proper investigation of the Claimant's nationality. Miss Sjovoll made no real attempt to persuade me that the Defendant's dealings with the Sierra Leone embassy could have been expedited or conducted in a manner which was significantly different.
Was the period of detention reasonable in all the circumstances? Undoubtedly it was a long period of detention – 434 days. Nonetheless I am not satisfied that the period of detention was other than reasonable in all the circumstances. A proper and fair reading of the detention reviews shows that proper consideration was given to the circumstances prevailing at the time of each review and a reasoned justification was put forward for continuing detention. The main point made by Miss Sjovoll in her written closing submissions as to why the period was unreasonable relates to her assertion that there was independent evidence that the Claimant had been tortured. Finding, as I do, that there was no such evidence in this case, a major plank in her argument is removed.
Other Issues
In her closing submissions Miss Sjovoll advanced no arguments to the effect that the Claimant can succeed under Article 5 of the European Convention on Human Rights independently of the points with which I have dealt in detail. It is not necessary, in the circumstances, to deal with Article 5 at all.
As I have said had I found that the Claimant had proved the tort of false imprisonment I would, unhesitatingly, have concluded that he was entitled to nominal damages only. In my judgment there can be no doubt that a reasonable decision-maker assessing all the relevant information available up to and including 6 September 2012 would have concluded that there was no credible evidence that the Claimant had been the victim of torture. That is my assessment even if the medical report of Dr Anderson was never produced to the Defendant prior to 6 September 2012. If her report was produced at any time before detention ceased it would have cast further doubt upon the credibility of the Claimant's account.
I should not leave this case without expressing my own view as to the Claimant's credibility as a witness. I have made proper allowance for (a) any language difficulties which arise in this case (b) the strain necessarily imposed upon a Claimant being subjected to searching cross-examination and (c) the psychiatric assessments of the Claimant which have been undertaken in this case. However when due allowance is given to all those factors I have reached the clear conclusion that the Claimant's account of his experiences in Sierra Leone is shot through with so many significant inconsistencies over such a long period of time that no reliance can be placed upon his evidence about these matters. In summary I do not believe that the Claimant told me the truth about what occurred in Sierra Leone particularly as it relates to his own alleged ill-treatment. In a sense, my own assessment of his credibility may be irrelevant. My primary task in relation to factual matters has been to assess the Defendant's decision making processes and to assess what conclusions would have been reached had the Defendant taken account of all the information which was in her possession. However, it would not be right to leave this case without recording that the Claimant's attempts to explain the inconsistencies to which I have referred in this judgement led me to believe that his evidence was wholly unreliable. He offered no credible explanation for the many twists and turns highlighted above and I am afraid I simply do not accept that the inconsistencies themselves add support to the notion that the Claimant has been adversely affected by his ill-treatment in Sierra Leone and support, too, the suggestion that detention had a major impact on the Claimant's psychiatric well-being.
I am invited to strike out the claim on the basis that it is fraudulent. I decline to take that step because (a) it is unnecessary and (b) it would be inappropriate to do so without hearing detailed submissions from Ms Sjovoll on the issue. That would be a waste of costs in view of my findings.
My conclusion is that the claim must be dismissed. Had the Claimant proved false imprisonment I would have awarded him nominal damages. No useful purpose would be served by assessing quantum on a hypothetical basis.
|
Mr Justice William Davis:
On the 10th October 2011 Mr Cavell was riding his bicycle on a cycle path running alongside the A4 in Hounslow. At a point where the cycle path joined a bus lane he came off his bicycle and suffered a back injury. His case is that he came off his bicycle because of a defect in the roadway. He contacted Transport for London which is the body responsible for the maintenance of that highway. After various exchanges of e-mails with a firm of claims handlers named Gallagher Bassett, that firm on the 13th March 2014 admitted liability subject to causation. Because Mr Cavell's injury was not straightforward, it became necessary to issue protective proceedings. The admission of liability was pleaded as part of his case. When eventually the Defence was served in February 2015 notice was given that the admission would be withdrawn with the Court's permission. Application for such permission was made on the 14th April 2015 supported by a witness statement from a solicitor acting on behalf of the Defendant. Mr Cavell responded via a witness statement from his solicitor. I heard oral submissions on the 24th July 2015 which supplemented full written submissions.
The Defence pleads that the admission made was not an admission of liability. The precise terms of the admission were as follows: "Please note liability will not be an issue, subject to causation." The only sensible meaning of those words is that primary liability for the accident is admitted but no admission is made as to whether the injury suffered (or some part of it) was caused by the accident. It clearly was an admission of liability. In her statement Angela Hanmore, the solicitor acting on behalf of the Defendant, proceeds on the basis that it was. She was quite right to do so.
Provision is made for withdrawal of a pre-action admission under CPR 14.1A(4)(b). The relevant Practice Direction is as follows:
7.1 An admission made under Part 14 may be withdrawn with the court's permission.
7.2 In deciding whether to give permission for an admission to be withdrawn, the court will have regard to all the circumstances of the case, including –
(a) the grounds upon which the applicant seeks to withdraw the admission including whether or not new evidence has come to light which was not available at the time the admission was made;
(b) the conduct of the parties, including any conduct which led the party making the admission to do so;
(c) the prejudice that may be caused to any person if the admission is withdrawn;
(d) the prejudice that may be caused to any person if the application is refused;
(e) the stage in the proceedings at which the application to withdraw is made, in particular in relation to the date or period fixed for trial;
(f) the prospects of success (if the admission is withdrawn) of the claim or part of the claim in relation to which the offer was made; and
(g) the interests of the administration of justice.
Useful guidance on the application of the court's power under CPR 14 and the Practice Direction is to be found in Woodland v Stopford [2011] EWCA Civ 266. At paragraph 26 of his judgment Lord Justice Ward said this:
It is quite clear to me that CPR 14.1A(3) confers a wide discretion on the court to allow the withdrawal of a pre-action admission and paragraph 7.2 of Part 14 of the Practice Direction lists the specific factors the court must take into account in addition to the need to have regard to all the circumstances of the case. These factors are not listed in any hierarchical sense nor is it to be implied in the Practice Direction that any one factor has greater weight than another. A judge dealing with a case like this must have regard to each and every one of them, give each and every one of them due weight, take account of all the circumstances of the case and, balancing the weight given to those matters, strike the balance with a view to achieving the overriding objective. Cases will vary infinitely and the weight to be given to the relevant factors will inevitably vary from case to case. Sometimes the lack of new evidence and the lack of explanation may be the important considerations; in others prejudice to one side or the other will provide a clear answer and in all the interests of justice will sway the balance. It would be wrong for this court to circumscribe the manner of the exercise of this discretion or to give any more guidance than is trite, namely, carry out the task set by the Practice Direction, weigh each of the identified factors as well as all the other circumstances of the case and strike a balance with due regard to the overriding objective.
There is no doubt that Mr Cavell sustained some kind of injury when he came off his bicycle at the relevant point on the cycle path. An ambulance went to the scene. The paramedic who completed the relevant report form recorded Mr Cavell as saying that he fell from his bicycle "due to uneven ground." In subsequent hospital notes it was simply recorded that Mr Cavell fell from his bicycle. There was one letter sent by a junior doctor at the hospital to Mr Cavell's GP in which it was said that "he ran over a bumpy object in the park."
In September 2012 Mr Cavell e-mailed what he believed was the relevant highway authority. He wrote: "The design of the cycle route and specifically the condition of the road at that point caused the accident." He must have been informed that the Defendant in fact was responsible for the roadway in question because the next day he e-mailed the Defendant in similar terms. As well as repeating the sentence contained in the previous day's e-mail he also said: "There is/was also a very nasty pothole at the entry of the bus lane…." Two weeks later he sent a further e-mail to the Defendant. He explained that he had checked the site and that there had been no repair to the pothole. He attached a clear digital image of the scene with the pothole (as he described it) marked. Within a few days the Defendant notified Mr Cavell that Gallagher Bassett had been appointed to handle his claim. Gallagher Bassett ("the firm") was and is a very substantial firm dealing with accident claims. It is apparent from the notification of their appointment received by Mr Cavell that the firm is regularly instructed by TfL. The firm must be well used to dealing with claims arising out of accidents on the highway.
Following its appointment the firm e-mailed Mr Cavell with detailed questions about the accident and where it happened. Mr Cavell after some delay (because he was undergoing medical treatment) responded. He sent a further copy of the digital image previously sent to the Defendant. After various exchanges of e-mails, the firm in August 2013 issued a denial of liability. The firm had sent Mr Cavell inspection records for the relevant site which appeared to show that it had been inspected regularly without any defect being identified. These inspection records formed the basis for the denial of liability.
Mr Cavell did not accept the firm's denial of liability. He pointed out that the defect was still present and enclosed further images taken in about July 2013. He argued that this undermined the inspection argument i.e. either there had been no inspection or such inspection as there had been was inadequate. The response of the firm was to appoint a different claims handler to deal with the claim. E-mail traffic continued. In December 2013 the new claims handler said that he had reviewed the case in the light of which he had sought further information from the Defendant. He said that this was done in order to decide whether the decision in August 2013 had been correct.
Unbeknownst to Mr Cavell the relevant part of the roadway was repaired in November 2013. This fact was not known until evidence was served by the Defendant two days before the hearing. Why it was repaired is not clear from the evidence as served. Given what was said by the claims handler in his e-mail it must be a reasonable inference that it was as a result of his further enquiries. The employee of the Defendant who dealt with the repair described the fault under repair as "pothole in bus lane."
In January 2014 after some chivvying by Mr Cavell the claims handler wrote to say that the lack of contemporaneous evidence of the condition of the highway made it more difficult to assess whether the Defendant's inspection systems were carried out reasonably. In response Mr Cavell for the third time sent his September 2012 digital image. In March 2014 Mr Cavell instructed his current solicitors. They wrote to the firm setting out Mr Cavell's case. Whether it was because solicitors had been instructed or whether the firm had had some response from the Defendant is not clear but the admission of liability came in an e-mail 24 hours after the solicitors had written to the firm.
Discussions continued between the firm and the solicitors acting from Mr Cavell during the rest of 2014. Some interim payments were made to cover medical expenses and costs. When the Defence was served seeking to resile from the admission this came out of the blue. Mr Cavell's solicitors made it clear without delay that consent would not be given to a withdrawal of the admission and that an application would be required. No reason has been given for the two month delay before the application was made.
The grounds for the application as argued before me essentially were twofold. First, the Defendant has a strong case on liability and it would be unjust to deprive it of its defence because of an error by the firm. Second, if the highway was defective, the responsibility for the defect must lie with the contractor responsible for inspection and repair. If the admission cannot be withdrawn, the Defendant will not be able to claim any contribution or indemnity from that contractor.
I do not accept that either ground has merit. In relation to the Defendant's potential case on liability, it is not for me to conduct a mini trial. However, I am entitled to examine the matters put forward by the Defendant to justify its assertion. They are: there is no contemporaneous record of any defect; since the inspection records disclose no defect, there was none; the defect shown on the image first sent by Mr Cavell in September 2012 cannot be said to be an actionable defect; Mr Cavell's accounts at the time to medical professionals were inconsistent.
Clearly there is one contemporaneous record of a defect, namely Mr Cavell's evidence. The fact that no defect appears on inspection records would have rather more weight if the defect apparent in September 2012 had not still been present in November 2013 – a defect then described by the Defendant's employee as a pothole. The precise nature of the defect shown in the September 2012 may be open to question. However, it is clearly visible on a digital image taken from a number of yards away and the same defect was seen by the Defendant in November 2013 and assessed as a pothole. The inconsistency relied on essentially is a failure to tell the medical professionals that there was a pothole. Even if this proposition had any weight to it (which I doubt), it is largely met by the fact that Mr Cavell mentioned uneven ground to the very first person to treat him at the scene.
The second ground ignores the effect of the Civil Liability (Contribution) Act 1978. The Defendant will not be able to use its admission to prove that there was a defect in the roadway and thereby to obtain an indemnity. Rather, the Defendant will have to prove the defect. Mr Cavell through his counsel indicated that he would assist the Defendant in that exercise. It follows that the Defendant is not prevented from obtaining a contribution or indemnity. It may be more difficult and it is conceivable that in the proceedings between the Defendant and the contractor a judge could find that the presence of a defect had not been proved. To that extent there is some potential prejudice to the Defendant but not the exclusionary prejudice as suggested by counsel in the course of his submissions.
Since the grounds relied on by the Defendant have no substance the application must fail. In fact it goes further than that. This is a case in which it is said that the admission was made in error. No explanation at all is offered as to how this error was made. The firm which made the error is hugely experienced in the type of claim involved here. An initial denial of liability was followed by a lengthy review of the decision by the firm with at least one senior member of staff being involved. The firm consulted the Defendant in the course of that review. Whilst the review was in train the repair of November 2013 was carried out. All of the external evidence suggests a careful consideration of the available material and a reasoned decision based on that material. I have been provided with no evidence whatsoever to undermine that proposition. In those circumstances the total lack of any explanation coupled with the lack of any new evidence – or at least no new evidence which might support the pleaded Defence – is of very considerable significance. They are the "important considerations" in this instance (to use the language of Woodland).
The final consideration within the list set out in the Practice Direction is the "interests of the administration of justice." It cannot be in those interests to permit the withdrawal of an admission made after mature reflection of a claim by highly competent professional advisors when there is not a scintilla of evidence to suggest that the admission was not properly made. Were it to be otherwise civil litigation on any sensible basis would be impossible.
I dismiss the application. I have been provided with a statement of costs by Mr Cavell's solicitors. If it is thought appropriate for me summarily to assess the costs of this application I shall do so. I should say that I consider the sums claimed to be hugely disproportionate. It may be that the better course would be for the costs of the application to be payable by the Defendant in any event but for the assessment to form part of the final assessment of costs whether after a trial on quantum or after an agreed disposal of the case.
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Mr. Justice Edis :
This is an application for an interim injunction in proceedings in which the claimants seek an injunction under sections 3 and 3A of the Protection from Harassment Act 1997 ("the 1997 Act"). The application is made on notice and the defendant attended the public hearing and made submissions to me. No derogation from the principle of open justice is involved. The nature of the harassment relied upon is the publication of allegations and abusive remarks about employees, officers and Councillors of the first claimant Council. The Article 10 right of the defendant to freedom of speech is engaged. The right under Article 10 does not just exist for the benefit of the defendant but of the public at large and since the claimants are public officials and elected politicians there is a public interest in allowing free comment about them. There is a limit to the scope of that public interest and that is the context in which this applications falls for consideration.
The proceedings are brought under CPR Part 8. The claim form says
"2. Pursuant to CPR 8.2(d) all the Claimants are acting in a representative capacity. The Second to Fifth Claimants are also acting in a personal capacity. They are acting on behalf of all employees, officers and Councillors of the First Claimant. They share the same interest: to ensure that the Defendant's campaign of harassment directed at Council employees and Councillors is stopped.
"3. Pursuant to CPR 8.2(b)(i) and (ii) the questions the Claimants are seeking the court to decide are as follows:
a. Does the Defendant's course of conduct, which is not disputed and is set out in the witness statements attached, constitute harassment under s.3 and/or s.3A of the Protection from Harassment Act?
b. Does the Defendant have a defence to his actions?
c. Should an injunction be granted and if so in what terms? The Claimants attach a draft Order to this claim form."
The proceedings were issued on 20th May 2015. On 22nd May 2015 His Honour Judge Davies gave directions on reading the claim form and evidence. He directed the defendant, who is representing himself, to file and serve with 14 days a "defence, limited to 2 pages of A4 font size 12, which summarizes his response to the claim and, in particular, which explains whether he admits or denies the claim and (as appropriate) summarises his reasons for denying the claim and his witness evidence in response." He directed that the claimants should serve similar documents in reply within 21 days of service of the defence and gave some further consequential directions.
Service was effected on 3rd June 2015, and on 6th June 2015 the defendant filed an acknowledgement of service indicating an intention to defend all of the claim and, when completing the form, the defendant indicated that his written evidence was filed with it. This took the form of a letter dated 6th June 2015 which exceeded the two pages permitted by Judge Davies, but not by very much. I am treating this letter as both the defence and as a statement of the evidence relied upon which means that no issue of relief from sanctions arises. However, it is not supported by a Statement of Truth. This must be rectified within 7 days of the handing down of this judgment failing which it will be struck out. For present purposes I will deal with it as if it did contain the necessary Statement of Truth.
In reply, the claimants served a notice of application for an interim injunction, draft directions and a formal Reply on 26th June 2015.
Therefore, although the claim was issued quite recently, it has reached a stage where the issues are clear and accordingly I have a sound basis on which to consider whether or not to grant an injunction.
The Claim
The First Witness Statement of Karen Elizabeth McIlwaine dated 12th May 2015 sets out the evidence relied upon in support of the claim and the application for interim relief. She confirms that the Council seeks injunctive relief in a representative capacity to protect the officers, employees and Councillors of the Council. Mr. Robinson and Mr. Finlay are employees and officers of the Council and seek injunctive relief on their own behalf and on behalf of other officers and employees. Mr. Jones and Ms. Weltman are Councillors who seek relief on their own behalf and on behalf of the other councillors. It is unnecessary to refer to the claimants separately except where they individually complain of being victims of harassment. They all make the same claim on the same evidence. The defendant is a member of the public who lives within the Council's area of responsibility.
The claimants allege that the defendant is a vexatious complainant who is engaged upon a long and persistent campaign against the Council and its officers, employees and Councillors. This campaign is said to have started around 2010 and to have continued to date. The defendant agrees with this, except that he denies that his campaign is vexatious. He says that the allegations which he publishes are supported by evidence, are true and that he is acting in his own defence and in the public interest by making them. He relies on the statutory defences in section 1(3) of the 1997 Act.
In these circumstances I can summarise the nature of the defendant's activities quite briefly. According to Mr. Finlay, the defendant's dispute with the Council began in December 2010 when he was living in private rented accommodation and became involved in a dispute with the landlord. He told the Council that he was living without electricity, heating, hot water or gas. He said that he was admitted to hospital on Christmas Eve 2010, and sought the assistance of the Council. The defendant disputes this history saying that he only ever complained that the landlord failed to keep the electrical supply in a safe working order and as a result knowingly endangered the lives of his visitors, neighbours and himself. Nothing turns on this dispute about the exact nature of the defendant's historic complaint about his landlord. It is the means by which he pursued that complaint as far as the claimants are concerned which is important, but only because it puts his more recent activities into context. During this first phase of the campaign, the defendant sent over 1200 emails to the Council's Solutions Team and threatened to sue the Council for £1m in a Human Rights claim. He set up a website to promote his cause. He then moved home to his present address, withdrew his claim for damages and closed his website. Some of the emails from this phase are contained in KEM 3 and show that at this stage the defendant accused an employee of the Council of regularly taking financial considerations from Landlords and being corrupt. He was publishing a blog and emails were sent from addresses other than his own which appeared to come from members of the public who had read it and been motivated to support him. Some of these alleged that the defendant's Landlord had received preferential treatment because he was a Mason. Some of these themes emerged again in the second phase of his campaign.
A second dispute arose after the defendant moved home. His present address is close to a piece of land at Davenham called Butchers Stile Playing Field. The defendant became concerned about the location of a road through this land and started to make enquiries about the conveyancing history of the land. On 30th July 2012 he made a request for documents under the Freedom of Information Act relating to a covenant affecting the land. This resulted in a meeting between him and two council employees in August 2012 at which he was allowed to inspect some original title deeds and other documents. Afterwards he complained that documents had been hidden from him and that the council employees had committed criminal offences. It transpired that a conveyancing error had occurred at some time in the distant past (perhaps about 1955), and there were also some errors in the compliance with the Freedom of Information Act requests. The defendant did not and does not accept that these were errors and alleges that he can prove fraud and corruption. He says that he welcomes these proceedings because all he seeks is the opportunity to produce his evidence in a court. He says that the Council has victimised and bullied him in order to cover up his discoveries.
The defendant sent a very large number of emails which were distributed widely by the defendant. The Council decided to adopt a "Single Point of Contact" system whereby all emails were diverted to David Finlay, who is the 3rd claimant. This began in September 2012. The email correspondence continued and the defendant continued to express his concerns about what he described as the theft of the land on which his house stood. Mr. Finlay wrote a letter on 7th December 2012 which listed 11 allegations which had been made by that date by the defendant which included several allegations of fraud and an allegation of corruption. He enclosed a copy of a summary of a report of an investigation into the conveyancing history of the land and answered each of the 11 allegations. He said that the Council now regarded the issue as closed.
The defendant had complained about the way in which his requests under the Freedom of Information Act had been dealt with and a review was undertaken by the Council in February 2013 which found that in certain respects he was right.
In January and February 2013 the defendant was in contact with the Local Government Ombudsman who published a decision on 5th February 2013. He rejected the defendant's complaint about the use of a single point of contact in his case and held that it did not amount to "intercepting" the defendant's communications. The Ombudsman decided not to pursue the complaint.
In October 2012 the defendant contacted the police. An entry on his website says that he gave them
"a raft of evidence proving a number of senior Cheshire West officers, Davenham Parish Council officers and Directors of Weaver Vale Housing Trust Limited committing criminal offences. That raft of evidence comprised a large number of internal emails some written by those officers themselves – those official documents proved officers guilty of committing malfeasance in public office a crime so serious that it carries a sentence of life imprisonment. Cheshire Police not only refused to investigate my complaint its Chief Constable David Whatton also refused to tell me why he won't investigate, and as a result I began publishing and distributing leaflets containing transcripts of those emails and other evidence proving those officers guilty of corruption."
The Cheshire Police did not take any action as a result of this "raft of evidence".
In March 2013 the Council sent an email to the defendant which listed 14 email addresses from which communications had been received and alleged that he was responsible for them, using these other addresses as "proxies" to hide the true origin of the complaints and to suggest that other people, besides him, were outraged by the matters complained of. The defendant did not deny that this was so.
The quantity of emails sent to the Council over these years was very substantial. Allegations of criminal and dishonest behaviour were very frequently made against identified individual employees, officers and Councillors. After the police declined to investigate, the defendant started to publish his allegations widely. At paragraph 14 above I have set out his statement from October 2012 that he had started publishing leaflets. On 8th May 2013 he sent an email to an employee of the Council saying
"following my earlier correspondence making you aware that your caseworker Helen Weltman is involved in unlawfully intercepting, redirecting and receiving private confidential correspondence sent by members of the public and intended for others are you able to confirm if you will or will not be seeking her resignation. Sir if I might push you for an early response only that my publication "The Bloodhound" a leaflet which is delivered regularly to 10,000 homes throughout Mid-Cheshire shortly to be increased to 20,000 homes, will go to print within the next 24 hrs and it is my intention to raise serious questions asking if all that private and confidential information that you hold and belonging to your Constituents is indeed safe in the hands of Helen Weltman."
Whether these leaflets are actually distributed physically to that extent or at all is not known, but it is irrelevant because the defendant also operates a website called www.thebloodhound.org.uk on which they are posted. 5 editions of the newsletter are described in the statement of Ms. McIlwaine. It appears that they were uploaded on 2nd September 2013 and she says that they are still accessible. They contain strident allegations of fraud and also repeat the allegation of unlawful interception of private and confidential correspondence. This is a repeat of the old allegation based on the use of the single point of contact within the Council. The defendant apparently believes that it is a criminal offence for a Council to divert communications which he addresses to its employees, officers and councillors to a single point of contact whose job I is to deal with anything emanating from him. He was told that there is nothing in it by the Local Government Ombudsman in the ruling referred to above, but chose to ignore that and to continue to advance this legally inarticulate complaint over and over again. One of the 5 newsletters repeats allegations of criminal behaviour against Maria O'Neill, a Council employee who conducted the meeting at which documents relating to the land were shown to the defendant in August 2012. She is accused of forgery and lying. Mr. Robinson, the second claimant, and Mr. Goacher, the Council's Monitoring Officer, are accused of dishonestly covering up the behaviour of Ms. O'Neill. In another newsletter a series of allegations of bad faith are made against Helen Weltman, the fifth claimant. She is accused of burying the evidence provided by the defendant for her own selfish motives. The language used is deliberately offensive and provocative.
The website also contains a number of pages with what purport to be new articles. An example is the following dated January 2015 concerning Mr. Finlay, the third claimant and the single point of contact:-
"FIRST HE IS PROVED A CORRUPT CHESHIRE COP – NOW HE IS PROVED A CORRUPT CHESHIRE COUNCIL OFFICER
OFFICIAL INDEPENDENT POLICE COMPLAINTS COMMISSION [IPCC] DOCUMENTS PROVE FORMER CHESHIRE CONSTABULARY DETECTIVE CHIEF INSPECTOR DAVID FINLAY WAS PERMITTED TO RESIGN FROM THE FORCE SOONER THAT FACE A POLICE CRIMINAL INVESTIGATION FOR HAVING INFLICTED MENTAL HARM – PERVERTING THE COURSE OF JUSTICE – MISCONDUCT IN PUBLIC OFFICE – BLACKMAIL. HAVING LEFT THE CHESHIRE CONSTABULARY MR. FINLAY SOON FOUND EMPLOYMENT WITH CHESHIRE WEST AND CHESTER COUNCIL AS A SOLUTIONS TEAM OFFICER – ONCE AGAIN MR. FINLAY BECAME A TRUSTED PUBLIC SERVANT – ONCE AGAIN MR. FINLAY SET ABOUT ABUSING HIS OFFICE OF TRUST!"
……
"Since October 2012 I have repeatedly provided the chief constable of Cheshire and the Cheshire crime and police commissioner more and more high quality irrefutable evidence proving David P Finlay and other Cheshire West and Chester Council officers guilty of criminal conspiracy, perverting the course of justice, and misconduct in public office – astonishingly they both refuse to carry out formal investigations into my complaints."
The defendant also has a "Wall of Shame" with names of Council employees on it. He offers to remove the names of people who "agree to support our rights". There is also a Twitter account "@bloodhound24" with which he makes similar allegations.
The Council investigated the defendant's conduct towards it, and its responses to him, in 2014. On 27th June 2014 the Internal Audit Team found that between July 2012 and May 2014 over 2,400 emails including over 1,000 items of correspondence were sent directly from the defendant.
In July 2014 the defendant made 5 more requests under the Freedom of Information Act. They were refused by the Council as vexatious in August 2014 and in September 2014 a Review by the Council upheld that decision on the ground that they were vexatious and repeated. The defendant complained to the Information Commissioner's Office who determined that the Council had properly applied section 14(1) of the Act in declaring the requests vexatious and refusing to deal with them.
In November 2013 the Cheshire Constabulary after consulting the CPS decided that it would not initiate a prosecution of the defendant for the statutory offence of harassment for the reasons explained in an email dated 4th November 2013 to the Council. A key factor in that decision was the availability of civil remedies and the view that an injunction would have a "greater binding effect" than a criminal prosecution. The defendant decided to say, in a letter accusing two councillors of misconduct in public office dated the 6th January 2015, that this meant that the Crown Prosecution Service "confirmed that it did not find any of my writings untrue."
On 2nd April 2015 the defendant used his website to publish an article which took the form of a letter to the Police and Crime Commissioner of Cheshire which said "I believe the days are fast approaching when corrupt public servants such as yourself and the disgraced former Cheshire Constabulary Chief Inspector David Finlay will no longer be able to escape justice simply by being a member of a Masonic Lodge." This article referred to the "raft of evidence" again. This is a common theme of these publications. For example, on 26th February 2015 the defendant had sent an email referring to "irrefutable evidence proving David P Finlay of the Cheshire West and Chester Council Solutions team to be a former senior Cheshire Police officer who resigned from the Force in 1999 having been suspected of carrying out a number of serious criminal offences". He said that emails from the IPCC showed that in 2003 the IPCC "satisfied itself in 2003 Finlay was guilty of subjecting his innocent victims to blackmail, mental harm, assault, conspired to pervert the course of justice and committed serious misconduct in public office." He went on to identify the various public servants who had shown themselves to be unworthy of trust by failing to act on this evidence. He repeated this to a different audience in an email of 4th April 2015, and again on 8th April 2015 and 9th April 2015. In this last email the defendant accused Mr. Finlay of torture.
There are witness statements from Mr. Robinson, Mr. Finlay, Mr. Jones and Ms. Weltman. They all say that the allegations are completely untrue and distressing to them and to the other people against whom they have been levelled.
The second witness statement of Ms. McIlwaine dated 26th June 2015 says that the defendant has continued to tweet, email, text, place articles on the website and deliver hard copy leaflets. He, by this stage, knew of these proceedings and had set up another website which proclaims that it will document the progress of the proceedings. She produces a number of exhibits to show that this is true. She points out that the Council now has a different political makeup and control has changed so that it is now a Labour controlled authority. She fears that the new political leaders of the Council will now be targeted for abuse in the same way as their predecessors were. On 24th May 2015 the defendant sent an email to Samantha Dixon, now leader of the Council, which accuses her of knowing that the Council regularly turns a blind eye to his complaints and evidence proving Council officers and their contractors are participating in serious wrong-doing including corruption. He demands that the police be called to investigate the use by a Councillor called Reggie Jones of a private email address for official business. He alleges that Councillor Jones has passed constituents private and confidential information to third parties. He does not pretend to have any evidence to support this allegation. He had earlier emailed Mr. Jones on 21st May 2015 accusing him of failing to act on his evidence and concluding
"Reggie you do realise that by continuing to turn a blind eye to all that evidence I provided your Labour colleagues and yourself proving those offences, you, like they, will be seen by the public to have condoned dishonest practice – not only that Reggie but you, like they, will be seen by the public to encourage dishonest practice – and you do realise don't you Reggie by doing nothing you, like they, licence me to go out and tell not only your own community but also their communities, you, like they, are proven dishonest and untrustworthy public servants who have absolutely no right whatsoever to hold a public office of trust – and the very best of it Reggie is that you, like they, will not be able to honestly dispute a single word I say.
"Come sir, search hard, and I assure in time you shall once locate your backbone."
By letter of 22nd January 2015 the Council had told the defendant that they were contemplating proceedings and asked him to give undertakings to stop his campaign of personal abuse and threats against its employees, officers and councillors. He replied on 26th January (on the day he received the letter)
"Ms. McIlwaine I write to inform you that I have no intent what so ever of complying with any of your Council's demands. Further I wish to make it absolutely clear I do not require your Council's 14 day offer to further contemplate my actions and responses – in fact I reject that offer. Madam I assure you I have never been in a better position to prove your Council and numbers of its employees corrupt and therefore I am eager to go forward and prove my case in any Court of Law, be it Civil or Criminal."
The defendant has therefore refused to give undertakings and has not stopped his campaign after being served with proceedings. On 1st July 2015 he posted about these proceedings on his website. He said
"We anticipate should the High Court rule in favour of the suppressors of free speech, Cheshire West and Chester Council, and temporarily suspend TheBloodhound pending a full trial then our websites [address given] and our yet to be titled second site which we have temporarily named "Son of Hound" will take over. For legal reasons we will not be able to repeat anything said on TheBloodhound but not to worry we have lots and lots of new material to publish.
Ladies and gentlemen there will be a third site titled Peoples Alliance – almost live – which will also take on Cheshire West and Chester Council……."
The irrefutable evidence
It is against this background that the directions of His Honour Judge Davies recited above assume such importance. The defendant has been claiming to possess a raft of irrefutable evidence for months and to have supplied it to the police, to the first claimant and others. He suggests that his evidence has been suppressed. His Honour Judge Davies directed him to produce a short defence and his witness evidence. He said that he had done so when he acknowledged service and this, as I have said, is a reference to his letter to the court dated 6th June 2015 which I have dealt with above. It is reasonable to assume that this is his "raft of evidence" because deploying it in these proceedings is his remedy to suppression. His allegations of corruption and so on are largely based on the failure of public officials and others to act on his evidence, and one would expect him to be very keen to produce it now.
The letter sets out the history of the defendant's two substantive disputes with the Council: the housing dispute from 2010/2011 and the land dispute about Butcher's Stile. It accepts that he has sent multiple emails to try and resolve those issues and asserts that he was entitled to do so. He does not, however, produce any evidence that Mr. Finlay was guilty of serious criminal offences while he was a serving police officer. He does not mention Mr. Finlay, or Ms. Weltman, or Mr. Reggie Jones. He refers, so far as evidence is concerned, only to the events of 2010/11 and to internal emails which were disclosed to him by the Council in 2012 (he believes by mistake) which justified his conclusion that its officers, employees and councillors had colluded to obstruct his researches into Butchers Stile playing fields. He relies on the single point of contact policy as depriving him of his right to meet officials and employees and thus of his right to political representation. I have seen the emails to which he refers.
The internal emails referred to in the letter of the 6th June 2015 (which I treat as setting out his case for the reason I have given) do not come close to providing support for the allegations the defendant has been publishing in the way described in my summary of the evidence set out above. They are, I think, the emails in September 2012 surrounding the setting up of the single point of contact system and discussing tactics for dealing with the defendant. In my judgment they show nothing more than a local authority seeking to deal with the offensive tirade directed against its employees and officers by the defendant. Of course, because they are a response to that tirade, they cannot logically be the cause of it. The meeting of August 2012 and the serious criminal allegations which followed from it occurred before these internal emails and were the reason they were written. The defendant has said nothing at all about the land issue in his letter of 6th June 2015 which could justify his allegations made prior to October 2012 when he discovered these emails.
His case substantially depends upon what he says about the events in 2010/11 at his previous address. This fact also appeared from his oral submissions to me where he placed considerable stress on the acute physical danger in which he had been placed as a disabled person while living in that accommodation. Having set out his version of the facts of that episode, he says
"Based on all the above, it would be unreasonable for anyone to believe I had not legitimately suspected deliberate wrong doing/deliberate unlawful practices for it is clear my Landlord did all he was able not to comply with Health and Safety Laws. There can be no doubt he knew all along there was no safety certificate and I am certain at some point earlier than 2011 the Plaintiff should have known that the certificate did not exist, either way I prove I did suspect criminal offences had been committed and I prove that I did all I could to expose and prevent them. I refer the Plaintiff to its own policies on protecting vulnerable adults also to the Government's National agreement on protecting vulnerable adults titled "No secrets" a policy which the Plaintiff has a lawful duty to comply with at all times."
The muddled thinking which leaps from the paragraph I have just quoted underlies the defendant's whole approach to the claimants in my judgment. He asserts that he reasonably suspected crime by his Landlord nearly 5 years ago. He leaps from that to the assertion that the claimant Council was in some way implicated in the crime which he reasonably suspected. He does not explain why this is so, nor does he say that there actually was any crime. He appears to limit his claim to a claim that he reasonably suspected it.
Nothing that he says about the Landlord and Tenant dispute which he had with his previous landlord is remotely capable of justifying his current claims about present employees and officers of the Council. None of those whom he has been abusing recently are even named in the part of his letter which deals with that long finished dispute.
His case as set out in his letter in relation to the land at Davenham is as follows:-
i) He lives in one of several houses there owned by the Weaver Vale Housing Trust Limited which are accommodation for the disabled, but there are no external adaptations for the disabled.
ii) There is a road which leads through the group of houses which drunks and drug addicts use to get to the Butchers Stile playing fields at all hours of the day and night causing noise and other anti-social behaviour. He says that he and his elderly and disabled former neighbours (he says he has been evicted although the letter of 6th June gives the same address and the proceedings were served there) continue to be attacked by the village bullies.
iii) It was in response to this problem that the defendant began to investigate ownership of the land. He claims to have discovered that the road and the entire residential site and the Davenham Cricket Club had been unlawfully built, in breach of planning control and a restrictive covenant.
iv) Two public authorities, the claimant and the Davenham Parish Council colluded to obstruct his researches and intercepted and re-directed his emails. He was denied access to Council officers and employees who were ordered not to meet him which deprived him of political representation. He does not say what further researches are required. The Freedom of Information Act requests he has made more recently have all been held to be repeat requests, which have already been dealt with. He does not identify anything which has been refused which has not already been dealt with.
v) He claims that the Police have refused to investigate any of those trusted public servants who he believes are guilty of committing serious criminal offences. Neither the offenders nor the offences are specified.
vi) He concludes:-
"By way of the above it is clear that I have always acted rationally and logically in these serious matters and that I did so not only in order to protect my own life but also the lives of others many of whom are considerably more disabled and vulnerable than myself. I am confident a Jury will agree all of my aims and ambitions were designed not only to expose and prevent crime but also to protect people who were either incapable of, or had been too intimidated to protect themselves, and therefore I believe my defence meets all of the demands as set out in the Protection from Harassment Act 1997, section 3 subsections (1)(a)(b)(c)."
The reference to section 3 of the 1997 Act does not clarify the nature of the defence, but I will set it out because it (together with section 3A) is the origin of the jurisdiction which I am invited to exercise. It provides:-
3. Civil remedy.E+W
(1) An actual or apprehended breach of section 1(1) may be the subject of a claim in civil proceedings by the person who is or may be the victim of the course of conduct in question.
(2) On such a claim, damages may be awarded for (among other things) any anxiety caused by the harassment and any financial loss resulting from the harassment.
(3) Where—
(a) in such proceedings the High Court or a county court grants an injunction for the purpose of restraining the defendant from pursuing any conduct which amounts to harassment, and
(b) the plaintiff considers that the defendant has done anything which he is prohibited from doing by the injunction,
the plaintiff may apply for the issue of a warrant for the arrest of the defendant.
(4) An application under subsection (3) may be made—
(a) where the injunction was granted by the High Court, to a judge of that court, and
(b) where the injunction was granted by a county court, to a judge or district judge of that or any other county court.
(5) The judge or district judge to whom an application under subsection (3) is made may only issue a warrant if—
(a) the application is substantiated on oath, and
(b) the judge or district judge has reasonable grounds for believing that the defendant has done anything which he is prohibited from doing by the injunction.
(6) Where—
(a) the High Court or a county court grants an injunction for the purpose mentioned in subsection (3)(a), and
(b) without reasonable excuse the defendant does anything which he is prohibited from doing by the injunction,
he is guilty of an offence.
(7) Where a person is convicted of an offence under subsection (6) in respect of any conduct, that conduct is not punishable as a contempt of court.
(8) A person cannot be convicted of an offence under subsection (6) in respect of any conduct which has been punished as a contempt of court.
(9) A person guilty of an offence under subsection (6) is liable—
(a) on conviction on indictment, to imprisonment for a term not exceeding five years, or a fine, or both, or
(b) on summary conviction, to imprisonment for a term not exceeding six months, or a fine not exceeding the statutory maximum, or both.
The reference in the letter is plainly an error and the defendant intended to refer to section 1 of the Act. This provides
1. Prohibition of harassment.E+W
(1) A person must not pursue a course of conduct—
(a) which amounts to harassment of another, and
(b) which he knows or ought to know amounts to harassment of the other.
(1A) A person must not pursue a course of conduct:-
(a) which involves harassment of two or more persons; and
(b) which he knows or ought to know involves harassment of those persons; and
(c) by which he intends to persuade any person (whether or not one of those mentioned above) –
(i) not to do something that he entitled or required to do, or
(ii) to do something that he is not under any obligation to do.
(2) For the purposes of this section or section 2A(2)(c), the person whose course of conduct is in question ought to know that it amounts to harassment of another if a reasonable person in possession of the same information would think the course of conduct amounted to harassment of the other.
(3) Subsection (1) or 1A does not apply to a course of conduct if the person who pursued it shows—
(a) that it was pursued for the purpose of preventing or detecting crime,
(b) that it was pursued under any enactment or rule of law or to comply with any condition or requirement imposed by any person under any enactment, or
(c) that in the particular circumstances the pursuit of the course of conduct was reasonable.
Section 7 of the 1997 Act contains some definitions:-
"7.— Interpretation of this group of sections.
(1) This section applies for the interpretation of sections 1 to 5A
(2) References to harassing a person include alarming the person or causing the person distress.
(3) A "course of conduct" must involve—
(a) in the case of conduct in relation to a single person (see section 1(1)), conduct on at least two occasions in relation to that person, or
(b) in the case of conduct in relation to two or more persons (see section 1(1A)), conduct on at least one occasion in relation to each of those persons.
(3A) A person's conduct on any occasion shall be taken, if aided, abetted, counselled or procured by another–
(a) to be conduct on that occasion of the other (as well as conduct of the person whose conduct it is); and
(b) to be conduct in relation to which the other's knowledge and purpose, and what he ought to have known, are the same as they were in relation to what was contemplated or reasonably foreseeable at the time of the aiding, abetting, counselling or procuring.
(4) "Conduct"includes speech.
(5) References to a person, in the context of the harassment of a person, are references to a person who is an individual.
The letter which I treat as the defence to these proceedings starts with a reference to Hayes v. Willoughby [2013] 1 WLR 935. In that case the Supreme Court considered the defence provided by section 1(3)(a) of the 1997 Act. Is it enough that the harasser believes his behaviour to be necessary for the prevention or detection of crime? As Lord Sumption JSC pointed out at paragraph 12
"A large proportion of those engaging in the kind of persistent and deliberate course of targeted oppression with which the Act is concerned will in the nature of things be obsessives and cranks who will commonly believe themselves to be entitled to act as they do."
The passage cited by the defendant is a summary of Lord Sumption JSC's paragraphs 14 and 15:-
"The test of rationality under the Protection from Harassment Act requires good faith – a logical link between the evidence and the perceived reasons for the harassment, and absence of arbitrariness. The alleged harasser must have thought rationally about evidence suggesting criminality and formed a view the conduct was appropriate for the purpose of preventing or detecting crime."
The test of rationality is not the same as a test of reasonableness. It is a less demanding test than that. It simply requires the defendant to have undertaken the necessary thought process in good faith to form the stated purpose.
The legal test
Mr. Speker who appears for the claimants prepared a Skeleton Argument which identifies the legal test which I have to apply in deciding whether to grant this application. It is set out in paragraph 22 of Cream Holdings Ltd. v. Banerjee [2005] 1 AC 253 which explains the application of section 12(3) and (4) of the Human Rights Act 1998 which provide:-
(3) No such relief is to be granted so as to restrain publication before trial unless the court is satisfied that the applicant is likely to establish that publication should not be allowed.
(4) The court must have particular regard to the importance of the Convention right to freedom of expression and, where the proceedings relate to material which the respondent claims, or which appears to the court, to be journalistic, literary or artistic material (or to conduct connected with such material), to—
(a) the extent to which—
(i) the material has, or is about to, become available to the public; or
(ii) it is, or would be, in the public interest for the material to be published;
(b) any relevant privacy code.
In this context this means that I must be satisfied that it is likely that the claimants will establish at trial that the defendant should not be allowed to publish further acts of harassment because the defendant is unlikely to be able to establish any of the three statutory defences in section 1(3) of the 1997 Act. This is because it is common ground that the defendant has published the material and the defendant does not deny that his conduct amounts to a course of conduct which amounts to harassment of another, and (b) which he knows or ought to know amounts to harassment of the other. The harassment was by speech and caused distress and was intended to do so. Even if this was not common ground, I would find on the basis of the evidence which I have summarised above that the claimants are likely to establish these facts at trial.
The question therefore is whether the defendant is likely to fail to establish one of the statutory defences, in reality those afforded by section 1(3)(a) and (c) because the defendant does not rely on any enactment as requiring him to behave as he did. In reality, again, this boils down to section 1(3)(a) because if he cannot satisfy the rationality test in making out his avowed purpose of preventing and detecting crime, he will not be able to establish the more stringent test of reasonableness. It is for this reason that the defendant starts his defence with a reference to Hayes v. Willoughby and the rationality test.
The legal test applied to the facts
The alleged crimes involved are as follows:-
i) The crime committed by the Landlord in 2010/2011 in relation to safety certificates.
ii) Forgery and other criminal acts surrounding the meeting of August 2012 when documents relating to the land at Davenham were shown to the defendant.
iii) Unlawful interception of communications in the course of transmission contrary to section 1(1) of the Regulation of Investigatory Powers Act 2000. This relates to the diversion or forwarding of emails within the claimant Council so as to give effect to the single point of contact policy in September 2012. Rather oddly, in this case, the defendant asserts that some of these communications were confidential although he has published many of them on his website more than once. Breach of confidence is not, in any event, a crime.
iv) The various acts of nuisance committed by village drunks and drug addicts on the road to Butchers Stile playing fields. No specific criminal act by anyone in particular has been identified.
v) The corrupt and dishonest suppression of the defendant's "raft of evidence" which amounts to misconduct in public office, blackmail and perhaps other criminal offences as well.
It appears that the defendant has raised all these matters with the police who decided not to investigate them. This decision was taken as long ago as October 2012. The Local Government Ombudsman and the Information Commissioner have been involved. Neither found any significant infraction. The "raft of evidence" has now been placed before me. It does not prove any crime by anyone, or even raise any serious possibility that anyone has committed any crime. I will deal with the crimes identified above in the order in which they are listed:-
i) This issue was fully ventilated by the defendant many years ago and was a matter between him and his Landlord. The defendant did not seek to prosecute the Landlord then and it is now far too late to do so, even on the assumption that he did commit some criminal act. No reliable evidence of that has been provided.
ii) This allegation was considered by the Police and appears entirely spurious. The defendant says that he believes that these Council employees committed crimes to cover up a conveyancing error made in 1955 by a local authority which has long since ceased to exist. No sufficient evidence is provided in compliance with the direction of the court to suggest that there is any truth in the defendant's allegations in relation to the August 2012 meeting at all.
iii) RIPA 2000 is not a straightforward piece of legislation and I do not propose to burden this judgment with an analysis of the provisions as applied to a telecommunications system which is adapted by its owner so that communications from a particular source are directed to a single point of contact within that organisation whoever they are addressed to. It is clear from the evidence that many of the communications were received by their intended recipient and then forwarded. It is enough for me to say that on the evidence before me it is quite impossible to say that the single point of contact system involved any criminal activity.
iv) This appears to be at the heart of the defendant's claims. He suggests, as I have said above, that in acting as he has he is protecting his own life and the lives of his neighbours (or "former neighbours"). He appears to believe that by establishing the true status of the land in 1955 he will be able to close the road or in some other way prevent anyone from committing crime near the residential properties where he lives, or lived. However, it has been made quite clear to him as long ago as December 2012 that the Council regards this matter as closed, having investigated it. His conduct since that date was no longer capable of furthering the purpose of preventing crime by adjusting the ownership of the land in some way. To use the language of Hayes v. Willoughby at paragraph 16, the vendetta against the individuals employed by the Council was irrational. His persistence was obsessive. He was no longer guided by any objective assessment of the evidence of an ability to use the link between (1) a defective title to the land and (2) crimes which may be committed by third parties on the land to frustrate the potential criminals. There was no longer any logical connection between his suggested purpose and his acts.
v) This allegation fails because the defendant does not have a raft of evidence proving the criminal conduct of anyone. He does not have any evidence at all. If he did, he would have produced it to me. I described the Order of Judge Davies in discussing this aspect of the case with the defendant during the hearing as an order that he "put up or shut up". This was an attempt to explain its effect in layman's terms as he is a self-representing party. The defendant is quite intelligent enough to understand the simple meaning of an order that he sets out his case briefly and files and serves his witness evidence relied upon. In any event, the raft of evidence has already been considered extensively by the Police and has not, therefore, been suppressed criminally or at all by the claimants. They have simply decided that they do not intend to do anything about his complaints as they are entitled to do.
Further, and in any event, the nature of the allegations which the defendant makes suggest strongly that there is no rational causal link between his campaign of harassment and his desire to prevent or detect crime. As an example, his allegations against Mr. Finlay are very specific but not supported by any evidence at all. To accuse him of being "bent" and committing acts of torture while he was a policeman many years ago cannot rationally further the prevention or detection of any of the crimes listed above.
For these reasons, I conclude on the evidence which the defendant has produced that he has no real prospect of establishing that his campaign of harassment was justified by section 1(3)(a) of the 1997 Act. It appears to me that he has become obsessed and perhaps even exhilarated by his ability to cause distress by repeating long dead allegations over and over again. By accusing each new recipient of corruption if they do not immediately do whatever it is he asks of them, he widens the scope of his campaign to include people who have nothing to do with it. He has long since ceased to apply any rational judgment of any kind in deciding what to do. On the evidence as it stands now, it appears probable to me that he simply wants to cause harm. I consider that it is likely that he is succeeding. Elected politicians and public officials must be subject to proper public scrutiny, but this is not unlimited. They are not helped in discharging their public functions by having to deal with vitriolic abuse addressed directly to them and published widely to the world at large. This is distressing, as the defendant knows: that is why he does it.
The restriction on his freedom of speech guaranteed by Article 10 of the Convention and section 12 of the Human Rights Act 1998 is proportionate. Nothing has been "suppressed" by this order. The defendant has already published his allegations as widely and as often as he can. If he has any new allegations which are caught by it, but which should not be, he can apply to vary the order: see paragraph 52 below.
I therefore grant the Order in principle. In doing so, I have considered carefully the submissions made by the defendant orally to me at the hearing, and the points listed at paragraph 30 of Mr. Speker's Skeleton Argument where he seeks to fulfil his obligation to the court as counsel appearing against a self-representing party. It appears to me that the defendant will continue his unjustified campaign of harassment unless restrained from doing so.
I have made the Order in the form suggested by the claimants except that I have not acceded to the request for an order restraining the defendant from publishing his website TheBloodhound. He must immediately edit that website so that it complies with the other terms of the injunction. If he cannot do this immediately he must take it down until he can. He can, however, continue to use it to publish material which does not breach the injunction.
If the defendant should become aware of some material which he wishes to publish and if he considers that he should be permitted to do so, but is prevented by the injunction from doing so, it is open to him to apply to vary the order. That must be done on notice, and must supported by evidence with a Statement of Truth.
I have reserved the costs of this application to Trial. The parties have liberty to apply to vary that Order on written notice to the other side and any such application should be supported by a skeleton argument which is also disclosed to the other side.
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THE JUDGE: The Chief Constable of Lancashire has obtained interim injunctions against six men said to have engaged in gang-related activity in Preston. There was originally a seventh man, the fifth respondent Jonjo Highton, but he was brutally murdered last August, soon after the application was made. The applicant and the first, second, fourth and sixth respondents were all represented by counsel, and so was the Secretary of State who intervened in the proceedings. The third and seventh respondents (Mr Jordan Murray and Mr David Kershaw) are in custody and did not appear but have, I was told, been given notice of the hearing.
I have to decide whether the applicable statutory provisions in Part 4 of the Policing and Crime Act 2009 ("the 2009 Act") are compatible with the protection afforded to the respondents by article 6 of the European Convention on Human Rights ("the Convention") (the right to a fair trial). In addressing that broad question, I have to determine whether the present proceedings under the 2009 Act amount to "the determination of... any charge against [the respondents]" (see article 6(1)). The respondents say they do. The applicant, the Chief Constable, supported by the Secretary of State for the Home Department ("the Secretary of State") does not agree.
The respondents further submit that even if these proceedings are not a determination of any charge against them, they are a "determination of [their] civil rights and obligations..." within article 6(1). The Chief Constable and the Secretary of State agree with that proposition. However, the parties then differ as to whether the rules of evidence and procedure governing proceedings under the 2009 Act, which are being applied in the present case, comply with the requirement of a fair trial embodied in article 6. In particular, the respondents contend that the civil standard of proof on the balance of probabilities is incompatible with article 6, whether the proceedings are treated as civil or criminal, and they invite the court to make a declaration to that effect. The Chief Constable and the Secretary of State oppose that course.
The respondents also complained in their composite skeleton argument (at paragraph 39) that if these proceedings are in substance criminal, the admissibility under the Civil Evidence Act 1995 of hearsay evidence which would not be admissible under the equivalent legislation governing criminal proceedings (reference is made to the Criminal Justice Act 2003 and the Coroners and Justice Act 2009 in particular) constitutes a violation of the right under article 6(3)(d) of the Convention, being:
(d) to examine or have examined witnesses against him and to obtain the attendance and examination of witnesses on his behalf under the same conditions as witnesses against him.
In consequence of the above complaints, I am invited by the respondents to determine that it is inappropriate to exercise the discretion of the court to grant an injunction under section 34(1) of the 2009 Act. I am asked to dismiss the Chief Constable's application and to discharge the existing interim injunctions. The Chief Constable and the Secretary of State oppose that course. Alternatively, I am asked to give such further directions as are needed to achieve a final disposal of the application.
The Background
The background is set out in a previous judgment in these proceedings given by his Honour Judge Butler sitting as a deputy High Court judge on 26 February 2015. I quote from paragraphs 15 and 16:
Preston, like many other major towns and cities, has for some time suffered from the activities of gangs of young men who are alleged to act as groups and alleged to be involved in criminal activities. There have been many cases in the Crown Court at Preston over the past five or six years while I have been sitting here, both in the criminal and latterly the civil jurisdiction, in which gang activity has been alleged against various defendants. The principal activities of these gangs across the country are drug-dealing but of course some of them are simply wicked and violent... The applicant's case is that there is a gang in the northern part of Preston, in the Deepdale area, famous for the location of Preston North End's football ground, although it is slightly outside the exclusion zone, and it is alleged that the gang is called either The Deepdale Gang or The Deepdale Gangsters. There is reference in the papers to Plungington as the gang name prior to 2014.
The Chief Constable contends that the six remaining respondents, the seventh being now deceased, are members of The Deepdale gang, which he says is to be equated with the gang known prior to 2014 as The Plungington Gang. Those names refer to areas in the north and centre of Preston. The Deepdale Gang is said to be at odds with The Avenham Gang based in the area south of the city centre, bordered by the River Ribble.
The application was made on 19 August last year in the County Court, interim orders without notice were made and the matter transferred to the High Court. Mr Justice Turner gave directions on 15 December 2014 for determination of the issues that are before me today. He also directed the filing of pleadings and further evidence.
His directions included the filing of a witness statement from a police officer dealing with hearsay evidence relied upon: stating whether it is anonymous in the sense that the Chief Constable is unaware of the identity of the informant or anonymised, i.e. where the informant's identity is known but withheld; stating whether the evidence is multiple hearsay and, if so, to what degree; and explaining the sources in each case by reference to Appendix 3 of the "National Intelligence Model" used for the grading of intelligence sources.
In their defences or amended defences, the respondents took the human rights points that are now before the court. The interim orders against them remain in force. An application by the third and fourth respondents, who are brothers, came before his Honour Judge Butler in February this year. I have already quoted from the judgment he gave on 26 February, dismissing the application to discharge the injunctions but varying them to some extent. Permission to appeal against that decision was refused on the papers by Jackson LJ on 15 May 2015. I understand that an oral renewal of that application is scheduled for 21 July 2015, which is next week.
All six remaining respondents have been found in committal proceedings to have breached the interim injunctions against them and have been punished for contempt of court. I do not have the details of that exercise but it must follow that those breaches were found proved to the criminal standard.
The Chief Constable has attempted to comply with the direction of Mr Justice Turner relating to hearsay evidence by filing the statement of Detective Sergeant Riley, dated 23rd January 2015. The respondents, however, complain that that statement is less than adequate for full compliance. The fourth respondent in particular complains that it fails to address the issue as to whether the allegations are founded on multiple hearsay and to what degree. However, a more recent statement from the same witness, dated 22 June 2015, has addressed those matters further.
In view of the application for a declaration of incompatibility under section 4 of the Human Rights Act 1998, the papers were served on the Secretary of State in February 2015. She appears through Miss Samantha Broadfoot in support of the Chief Constable's position in relation to the human rights arguments, and relies upon a witness statement of Ms Esperanza Gomez dated 6 July 2015 which sets out the Secretary of State's understanding of the legislative purpose to which Part 4 of the 2009 Act is directed.
The Statutory Scheme
The Court of Appeal in Birmingham City Council v James [2013] EWCA Civ 552, [2014] 1 WLR 23, considered the interrelationship between gang-related violence injunctions and anti-social behaviour orders. It held that the local authority applicant is not precluded by the availability of the latter from founding an application on the former. Moore-Bick LJ at paragraphs 4 and 5 of his judgment explained the background to the legislation as follows:
4. In the past the council has attempted to make use of its powers under section 222 of the Local Government Act 1972 in order to disrupt the activities of gangs by obtaining injunctions restraining individual gang members from entering part of the city and associating with other gang members. However, in Birmingham City Council v Shafi [2008] EWCA Civ 1186, [2009] 1 WLR 1961, this court held that section 222 of the 1972 Act did not give local authorities substantive powers but was merely procedural in nature, allowing them to exercise powers formerly vested only in the Attorney General. The court held that although it is possible in some circumstances to obtain an injunction to prevent a breach of the criminal law, the appropriate way to obtain relief of the kind sought in that case was for the local authority to apply section 1 of the Crime and Disorder Act 1988 for an anti-social behaviour order ('ASBO').
5. The provisions in Part 4 of the Policing and Crime Act 2009 were enacted in response to the court's decision in Birmingham City Council v Shafi. Section 34 gives the court power, on the application of Chief Constables or local authorities, to grant injunctions prohibiting the persons to whom they are addressed from acting in ways that would promote gang-related violence or requiring them to act in certain ways, including taking prescribed activities.
Section 34(1) of the 2009 Act empowers the court to grant an injunction against a respondent aged 14 or over if two conditions are met. The first is that the court is satisfied on the balance of probabilities that the respondent has engaged in or encouraged or assisted gang-related violence or gang related drug-dealing activity (section 34(2)). The second condition (section 34(3)) is that the court thinks it is "necessary" to grant the injunction for either or both of the purposes of preventing the respondent from engaging in or encouraging or assisting gang-related violence or gang- related drug dealing activity or to protect the respondent from the same.
The added reference to "gang-related drug dealing activity" as an alternative to gang related violence was the result of a very recent amendment post-dating the making of the present applications which replaced, without transitional provisions, the earlier wording of the section with effect from 1 June 2015.
Section 34(4) provides that an injunction can contain prohibitions or positive requirements. There is a definition of "gang-related" in section 34(5). It is now defined as follows:
For the purposes of this section, something is 'gang-related' if it occurs in the course of, or is otherwise related to, the activities of a group that—
(a) consists of at least three people; and
(b) has one or more characteristics that enable its members to be identified by others as a group.
That has been the definition since 1 June 2015 when it changed. The wording until 31 May 2015 was as follows:
'Gang-related violence' means violence or a threat of violence which occurs in the course of or is otherwise related to the activities of a group that—
(a) consists of at least three people;
(b) uses a name, emblem or colour, or has any other characteristic that enables its members to be identified by others as a group; and
(c) is associated with a particular area.
The reference to "name, emblem or colour" and association with a particular area have been removed, therefore, but were in place when these applications were made.
By section 34(6) "[v]iolence includes a threat of violence." The definition of 'violence' in the interpretation section states that it includes violence against property. Section 35 delineates the permissible scope of the injunction under section 34 in such a way that it can prohibit presence in a particular place, being in the company of particular persons in a particular place, having charge of a particular species of animal in a particular place or wearing particular types of clothing. It could also prohibit use of the internet to facilitate or encourage violence or drug-dealing. The order can also include notification requirements relating to a change of address, curfew requirements and reporting requirements, as well as a requirement (in section 35(3)(d)) to "participate in particular activities between particular times on particular days".
Section 35(4) states:
A requirement of the kind mentioned in subsection (3)(b) [i.e. to be at a particular place between particular times on particular days] cannot be such that the respondent must be at one location for more than 8 hours in any day.
Section 35(5) provides that the injunction must be in terms that so far as practicable, will avoid any conflict with the respondent's religious beliefs and any interference with times at which he or she normally works or attends any educational establishment.
By section 36(2), an injunction under section 34 may not include a prohibition or requirement lasting more than two years from the date on which the injunction is granted. It is common ground that "the date of the injunction" is a reference to a final injunction and not to an interim injunction granted before trial with or without notice. If it is to last for more than one year from that date there must be a review hearing within the last four weeks of the one-year period (section 36(4)) and the court may order other review hearings at other times (section 36(3)). Section 36(6) enables the court to attach a power of arrest in relation to any prohibition in the injunction or any requirement thereof, apart from one which has the effect of requiring the respondent to participate in particular activities.
Section 37 provides that the application to the court may be made by the chief officer of police for a police area or the Chief Constable of the British Transport Police Force, or by a local authority. There must be prior consultation by the applicant with any local authority, and any chief police officer considered appropriate to consult, and in the case of a respondent under the age of 18, the youth offending team established under section 39 of the Crime and Disorder Act 1998 for the area in question (section 38).
The 2009 Act includes provision under section 39 for applications to be made without notice and without prior consultation, and the application may be made to the High Court or to a county court. If it is made without notice and adjourned until the return date, the court may grant an interim injunction if it thinks that it is just and convenient to do so with or without a power or arrest (section 40(2) and (3)). The same is the case where the application is made without notice save that the interim injunction may not require the respondent to participate in particular activities.
Section 42 provides for applications to vary or discharge such injunctions. Sections 43 and 44 deal with powers of arrest and the issue of warrants for arrest. Section 45 empowers the court to remand an arrested person for medical examination, which can be in custody for not more than three weeks or on bail for not more than four weeks, and there are certain other provisions relating to respondents who are under the age of 18 and which include certain additional safeguards. The present respondents are, I understand, all adults and have been since the applications were made.
Section 47 requires the Secretary of State to issue and from time to time may revise guidance relating to injunctions under Part 4 of the 2009 Act. Potential applicants are required to have regard to that guidance and the court would obviously do so too. I have been taken to part of the current guidance issued as recently as 1 June 2015, updated to deal with the amendments I have mentioned.
Those provisions of the 2009 Act are part of a process which was described by Jackson LJ in Birmingham City Council v James at paragraphs 20 and 21 as follows. He referred at paragraph 20 to:
...three different procedures for pre-empting violent or other unacceptable conduct, if there was good reason to anticipate such conduct.
He then said that they were: an application for an anti-social behaviour injunction ("ASBI"); an application for an anti-social behaviour order ("ASBO"); and an application for an injunction to restrain gang-related violence ("IRGV"). At paragraph 21 he said this:
It may be noted that these three sets of statutory provisions are a manifestation of the growing tendency to use the civil law as a means of preventing or punishing criminal conduct. This lowering of the barrier between civil and criminal litigation may give rise to difficult issues, for example, in relation to article 6.2 and 6.3 of the Convention. But those issues do not require consideration in the present case, which is a straightforward one.
There are indeed other types of such order placing restrictions on persons or regulating their conduct by means of an application by a public body in a manner that does not involve charging an individual with any criminal offence. I was shown cases and some statutory provisions in which they have been considered. They are different from each other but have in common a relatively novel use of civil remedies to police an area more classically the province of criminal law.
Examples are not just those mentioned by Jackson LJ (ASBOs, ASBIs and IRGVs) but also there has been mention in the arguments before me of football banning orders, orders that arise from having been convicted of certain sex offences (formerly called sexual offences prevention orders and now called sexual harm prevention orders), and control orders.
I add in passing that recently, on 23 March 2015, new provisions in the Anti-social Behaviour, Crime and Policing Act 2014 entered into force, recasting what used to be ASBOs and ASBIs into a single new form of injunction which can be granted on the same basis as the legislation here, which uses and explicitly refers to use of the civil standard of proof on the balance of probabilities.
The Issues, Reasoning and Conclusions
The following matters are common ground, or not seriously in dispute:
(1) The guarantee of a fair trial under article 6(1) of the Convention applies to both criminal and civil proceedings. The additional protections in paragraphs (2) and (3) of the article apply only to criminal proceedings and "the contracting states have greater latitude when dealing with civil cases concerning civil rights and obligations than they have when dealing with criminal cases". That is what Lord Steyn said in R (McCann) v. Manchester Crown Court [2003] 1 AC 787, at paragraph 7, citing from Dombo Beheer BV v The Netherlands [1994] 18 EHRR 213, 229, paragraph 32.
(2) The question whether a particular legal proceeding involves the determination of a criminal charge attracting the protections in article 6(2) and (3), is answered by applying the criteria found in Engel v The Netherlands (1979-80) 1 EHRR 647, at paragraph 82. The three criteria are: (i) the domestic classification of proceedings; (ii) the very nature of the offence; and (iii) the nature and severity of the penalty.
(3) The classification in domestic law of the present proceedings is that they are civil and not criminal as a matter of domestic law.
(4) The first criterion (that of classification in domestic law) is only a starting point and is not definitive. The Chief Constable accepts that; to quote from the skeleton argument:
Fulfilling either of the second two criteria can be sufficient to show that the criminal limb of [article 6] is engaged.
(5) Parliament made a conscious decision in response to case law such as the McCann case and the decision of the majority in Birmingham City Council v Shafi (both cited above) to enact in the 2009 Act that the standard of proof should be a civil one on the balance of probabilities – and those are the words found in section 34(2) of the 2009 Act.
(6) That was in line with the minority view of Moore-Bick LJ in Shafi that the standard of proof should be the civil one and not the criminal one, even though the application that was made was for relief in essentially the same terms as if the application had been for an ASBO.
(7) If, which is one of the matters in dispute, the application of the civil standard of proof to proceedings under Part 4 of the 2009 Act is contrary to the right of the respondents to a fair trial guaranteed by article 6, whether or not those proceedings involve determination of a criminal charge, then it is not possible to read down the civil standard of proof provided for in section 34(2) so as to convert it into the criminal standard in the exercise of the court's interpretative function under section 3 of the Human Rights Act. It is accepted by the respondents that to do so would, in the words of Lord Nicholls in Ghaidan v Godin-Mendoza [2004] 2 AC 557 (at paragraph 33) go against "the grain of the legislation".
Do these proceedings involve determination of a criminal charge?
The respondents in their composite skeleton argument submit that application of the second and third criteria in the Engel case lead to the conclusion that the respondents face a criminal charge in these proceedings. They submitted that it was very difficult to conceive of conduct supporting an application that did not involve a criminal offence and that the essence of gang-related violence is that it would almost inevitably involve criminal acts. They went on to submit that the House of Lords in McCann had accepted that the behaviour at issue in that case, which was an application for an ASBO, could be "sub-criminal" but nevertheless adopted the criminal standard as the appropriate standard by which to judge that conduct.
The respondents relied on the decision of the European Court of Human Rights in Matyjek v Poland (2011) 53 EHRR 10, App. No. 38184/03. I was taken through the facts of that case, which concerned what were called lustration proceedings. Briefly, a person found to have lied by making a false declaration denying having collaborated with the security services under the former regime, was banned from holding certain public offices for a period of ten years.
The court found that the proceedings were criminal in nature, even though they were classified in domestic law in Poland as civil proceedings, and the court noted that the making of a false declaration was similar to established criminal offences such as perjury even though not described as such in domestic law. As to the third criterion in Engel, the court noted the severity of the penalty which, though not involving a fine or imprisonment, did involve dismissal from public office and a ban on taking it up again for ten years.
The court concluded that, viewed overall, the proceedings did involve the determination of a criminal charge. Therefore, the respondents reasoned, the fact that an application for an injunction under section 34 of the 2009 Act is not formally framed as an accusation of a criminal charge is not to the point; such an application clearly requires a public authority to make an accusation against the respondent of what would virtually inevitably be serious criminal behaviour, and findings of fact would have to be made that those individuals had engaged in or assisted or encouraged that behaviour.
The respondents went on to submit that the types of injunction that could be granted under section 35 extend well beyond a simple prohibition against engaging in, assisting or encouraging gang-related violence. They can include measures such as curfews and exclusion orders which, the respondents pointed out, are closely analogous with punishments imposed by way of community penalty on persons convicted of crimes. The types of injunction available under the 2009 Act are very similar to and no doubt derived from the provisions in section 177 of the Criminal Justice Act 2003 (and surrounding provisions), providing for community penalties where a person is convicted under the criminal law.
In oral argument Mr Stark, assisted by the other counsel for the respondents and speaking for all four respondents represented in court at the hearing, expanded on those arguments. He said the mandatory requirements in section 34(2) and (4)(b) are new and that there was absolutely no limit on what mandatory activities could be ordered against the respondent in such an application. He gave the example, not entirely frivolously, of a person being made to break stones on Dartmoor. He took me to Strasbourg authorities which, he said, would help the court reach the conclusion that in this case there was a determination of a criminal charge.
He referred me to Lauko v Slovakia (App. No. 26138/95) (2001) 33 EHRR 40, in which Slovakia unsuccessfully denied that relatively minor sanctions for minor offences did not prevent the nature of the proceedings – that is the second criterion in Engel – leading to the conclusion that the charge was a criminal one. He also referred me to Öztürk v Germany (App. No. 8544/79) (1984) 6 EHRR 409, in which a minor traffic offence of which the applicant had been convicted, was held to be a criminal charge, with the consequence that it was a breach of article 6(3) to impose a financial cost on the applicant for the services of an interpreter at court.
That a charge is not framed as a criminal one and does not lead to a criminal record is, submitted Mr Stark, shown by these cases to be far from decisive. He accepted that, as a matter of theory, it could not be excluded that conduct relied upon in a section 34 application might be conduct that is not criminal in nature; but he disputed the realism of that proposition.
Thus, he challenged as unrealistic the suggestion made by Mr Cohen for the Chief Constable, supported by paragraph 4 of the Secretary of State's current guidance relating to the involvement of women and girls in gangs, that an injunction could be granted against a woman on the basis of assisting or encouraging gang-related activities if she were merely the partner of a gang leader who had engaged in such activities and not herself had any more active a role than that.
Such a person would not, argued Mr Stark, be "assisting" or "encouraging" gang-related activity, in the language of section 34. Ms Davie, for the first respondent, helpfully added that the verbs "encourage" and "assist" mirror the same two verbs used in section 44 of the Serious Crime Act 2007, the statute which abolished the old common law offence of incitement and replaced it with statutory secondary criminal liability where a person assists or encourages a criminal act.
As to drug-dealing, although not relevant on the facts here (and the amendments relating to drug-dealing post-dated making the applications), Mr Stark said that in that field it was even less likely that a respondent would not be accused of criminal acts. He sought to counter the point made by the Chief Constable and the Secretary of State that the jurisdiction under section 34 is by its nature protective and preventive but not punitive. He commented, in that context, on a line of cases relied upon by the Secretary of State and Chief Constable, arising from the attempts of Italy to combat the Mafia by legislation.
The cases started with Guzzardi v Italy [1981] 3 ERHH 333, the first in a line in which restrictive orders had been made against suspected Mafiosi, who were not accused in the proceedings of any criminal acts as such. The suspects concerned were submitted to measures such as special supervision and compulsory residence in a restricted and small area. The Strasbourg challenges were brought under article 5 rather than article 6; tt was the Commission that had raised the issue of article 6. The restrictive orders were founded on suspicion of past activities rather than on allegations of specific acts in the proceedings. There was no overt reference in the Italian legislation to anything corresponding to any standard of proof.
I was also taken to two subsequent cases emanating from the Netherlands – Landvreugd v The Netherlands (Application No. 37331/97) and Olivieira v The Netherlands (Application No. 33129/96), in which a form of administrative prohibitive order amounting to an exclusion zone had been made by the mayors of municipalities, against persons found to have taken hard drugs within the area of those municipalities.
Mr Stark submitted that all those cases were very different from the present because in none of them was there a specific accusation of criminal conduct. He said that that was an answer to the point that if a measure is preventive or protective in purpose, that necessarily deprives it of the character of a criminal charge.
There was also mention of well-known control order cases in this jurisdiction, which again are founded on suspicion; and in which, broadly speaking, a control order is made where a person is reasonably suspected of terrorist-related activity but there is no attempt to prove involvement in any specific such activity and hence no criminal charge.
Mr Stark submitted that the control order cases in which the appellate courts in this jurisdiction had decided that there was no determination of a criminal charge, were cases in the same category as the Guzzardi line of authorities emanating from Strasbourg, where the basis of the application was suspicion rather than, as here, proof to the civil standard of conduct necessarily or virtually inevitably criminal in nature.
Miss Broadfoot, for the Secretary of State, supported the Chief Constable's position. She submitted that in the present proceedings the respondents do not face a criminal charge within article 6(1) attracting the protections of article 6(2) and (3). She reminded me that article 6(1) is given an autonomous Convention meaning, and took me through the Strasbourg cases again, beginning with Guzzardi, the more recent Mafia related cases which were Ciulla v Italy (1989) 13 EHRR 346, M v Italy (1991) 70 DR 50 and Raimondo v Italy (1994) 18 EHRR 237; and the two Dutch cases of Landvreugd and Olivieira.
Ms Broadfoot submitted that, while the Guzzardi decision is very brief in its consideration of the issue of article 6 and preventive measures, there was no basis for supposing that it had been wrongly decided or had been misunderstood in subsequent case law. It was, she submitted, part of a consistent line of cases and, importantly, had been effectively endorsed by Lord Bingham in the House of Lords in Secretary of State for the Home Department v MB [2007] UKHL 46, [2008] 1 AC 440.
When dealing with the third issue before the House, namely "whether a non-derogating control order imposed under the 2005 Act constitutes a criminal charge for the purposes of article 6 of the European Convention", in holding that it did not, the court said this at paragraph 23, though I only quote part of it. After referring to domestic case law including McCann, Lord Bingham said this:
The same distinction is drawn in the Strasbourg authorities. Treated as non- criminal are preventative measures such as those in the Italian cases already mentioned, Lawless v Ireland (No. 3) (1961) 1 EHRR 15, Olivieira v The Netherlands… and Landvreugd v The Netherlands … ; treated as criminal were the measures considered in Öztürk v Germany …, Demicoli v Malta (1991) 14 EHRR 47 …. ; Benham v United Kingdom (1996) 22 EHRR 293; Lauko v Slovakia; Garyfallou AEBE v Greece (1997) 28 EHRR 344. Even this distinction, however, is not watertight, since prevention is one of the recognised aims and consequences of punishment... and the effect of a preventative measure may be so adverse as to be penal in its effects if not in its intention.
The Italian cases that he had already mentioned were those that he referred to in paragraph 21, where he said this, though I only quote part of the paragraph:
There is some analogy with the special supervision and protection measures imposed under Italian legislation, in so far as those cases fell within article 6(1) at all: see, for instance, Guzzardi …; Ciulla v Italy … ; M v Italy … ; Raimondo v Italy … ; and Arcuri v Italy, Reports of Judgments and Decisions 2001-VII, p 517.
In relation to the Matyjek case from Poland, the Secretary of State, supported by the Chief Constable, argued that it was distinguishable in that the Polish court had imposed a sanction because the defendant had previously lied in his lustration declaration and that the measure in question was clearly a sanction for past behaviour and could not be described as preventive since once the lie had been uncovered. The fact of past collaboration with the former security services was already known. Nor could the measure be described as protective of the individual who had lied.
In short, Miss Broadfoot submitted that the Matyjek case was a completely different proposition from the jurisdiction being exercised here and fell on the other side of the criminal boundary because the nature of the proceedings were so different that the application of the second and third Engel criteria led to the opposite conclusion from that which I ought to reach here.
Mr Cohen also submitted that in the present case the respondents did not face a criminal charge within article 6(1). He relied on the following main points. He submitted that the present regime is protective and preventive, not punitive. He reminded me that in McCann itself, the cases coming from Italy such as Raimondo had been found applicable, and the making of an order to protect relevant persons from further anti- social acts had been found in McCann not to amount to the determination of a criminal charge.
He referred me to the classical exposition of what criminal proceedings are, found in the judgment of Lord Bingham CJ, as he then was, in Customs and Excise Commissioners v City of London Magistrates Court [2000] 1 WLR 2020, 2025, which is as follows:
It is in my judgment the general understanding that criminal proceedings involve a formal accusation made on behalf of the state or by a private prosecutor that a defendant has committed a breach of the criminal law, and the state or the private prosecutor has instituted proceedings which may culminate in the conviction and condemnation of the defendant.
Miss Broadfoot submitted that, contrary to the position taken by the respondents, the conduct relied upon in a case such as the present need not in principle be criminal in itself and that there could be cases involving non-criminal conduct. She gave as examples persons who may be involved in accompanying other persons in a gang carrying drugs – not themselves carrying them but simply making up the numbers. She pointed out that the criminals themselves may not be those primarily targeted in gang- related violence injunction applications. It could be the associates rather than the criminals who are targeted, a point that ties in with the aim of protection of those persons themselves as well as the public.
Ms Broadfoot submitted that the wording of section 34(3) is highly prescriptive. The second condition of which the court must be satisfied is that the court "thinks it necessary to grant the injunction for either of both of the following purposes", and the two purposes that are then set out are prevention from engaging in the activity targeted and protection of the respondent from gang-related violence or gang-related drug- dealing activity. It therefore cannot on the plain wording of the statute, said Miss Broadfoot, be correct to characterise the sanction as punitive, even though the Chief Constable and the Secretary of State accept that the consequences of an order can be serious for a respondent.
Mr Cohen added to the litany of examples canvassed before me of non-criminal behaviour that might be relied on in an application such as this. He referred me to the facts actually found by the judge in Birmingham City Council v James, where the trial judge had found as follows, quoting from paragraph 8 of the judgment of Moore-Bick LJ:
That evidence satisfies me that Mr James was indeed in Handsworth Park on the afternoon of the carnival on 7th August 2011. I do not accept the evidence from Mr James and his father that he was not there. He had told PC Barton he was going in no uncertain terms; he would not have missed the opportunity.
The carnival was in Burger Bar territory [Burger Bar being a gang]. Mr James was part of a group of men who were affiliated to the Johnson crew [another gang] and a number of the officers speak of there being members of the Burger Bar in the park and of the tension there was. The group deliberately walked through the park. They were not there for the communal activities of a carnival. The size of the group, its obvious allegiance and the deliberate route through Burger Bar territory demonstrate that this was a premeditated visit...
Then a little further on, the judge commented:
What else could it be but a threat of violence? It is a show of force, extreme bravado, a demonstration that Mr James and his associates are not afraid of the Burger Bar. It is deliberately provocative. It is all those things but it is also a statement that the group are ready and looking for a fight.
I need not read any more. Mr Cohen pointed out that those findings are not findings of criminal acts but, nevertheless, can found an injunction under section 34.
Mr Cohen gave as another example a hypothetical situation in which gang members boast on social media of having entered the territory of a rival gang, taunting them without expressing any explicit intention to commit acts of violence on them; and he said that that would amount to encouraging or assisting gang-related violence by effectively bringing it on their own heads, inviting retribution in the form of violence from the rival gang.
Mr Cohen submitted that if the words "encouraging" and "assisting" were construed narrowly so as to embrace only criminal liability as a secondary party to a crime, that would defeat the purpose or one of the main purposes, of the regime, which is precisely to avoid criminalising those against whom injunctions are sought, and to deal with the problem of gangs through a regime that does not necessarily target the primary gangsters but others such as their associates, who may be in need of protection.
I turn to my reasoning and conclusions on this issue. I do not, after reflection, accept the submission that gang-related injunctions entail determination of a criminal charge. It seems to me that the following points tell against that conclusion and impel me to the contrary conclusion:
(1) First, I accept that in very many if not most cases, the conduct alleged against the respondents in an injunction under section 34 is likely to be criminal, although it will not necessarily and inevitably be criminal. That is often the case where civil injunctions are obtained whether by private or state entities. An example would be an ASBO or ASBI in the housing field where the conduct relied upon, as well as being antisocial, is also criminal. That is commonplace. That the conduct relied upon may very well be, and probably will be, criminal is not of itself decisive.
(2) Secondly, it seems to me that Guzzardi and the other authorities in the line of cases mentioned by Lord Bingham in MB were accepted by him as relevant and authoritative for the purpose of drawing the line between the cases that do and do not involve determination of a criminal charge. In view of that recognition in the highest court in this jurisdiction, I do not accept the submission of Mr Stark that the Guzzardi line of authority can be treated as an aberration or not to be followed, or that it is of no relevance to the issue where the legislation here crosses the criminal boundary.
(3) Thirdly, and most importantly, the purpose of an injunction granted under section 34 cannot lawfully be punitive (see section 34(3)(a) and (b)). The second condition is that the judge must consider the injunction "necessary" for either or both of the purposes there set out, neither of which is punitive in character. This is not mere semantics. It means that if a judge granted an injunction which, on a fair reading of the judgment and the reasoning, was in substance a punishment, that injunction would be unlawfully granted and liable to be discharged or overturned on appeal.
I recognise that there may be a danger of the regime being operated in practice in a punitive manner if it is wrongly and not correctly applied. For example if, hypothetically, a judge were to impose an unpaid work requirement as retribution and punishment for taking part in gang-related drug-dealing, that would be wrong and unlawful. If that were to happen, the judge would proceed upon a misdirection as to the law. It is not what the statutory scheme provides for. In a case, for example, where activities are required under an injunction, they must be activities that are considered necessary for either or both of the statutory purposes of prevention and protection.
For those brief reasons, I accept the submission of the Chief Constable and the Secretary of State that these proceedings and gang-related injunctions generally do not entail determination of a criminal charge within article 6(1), attracting the specific protections in articles 6(2) and (3).
One of those is, of course, under article 6(2), the presumption of innocence, which is framed as follows, quoting the well-known words:
Everyone charged with a criminal offence shall be presumed innocent until proved guilty according to law.
In the respondents' composite skeleton at paragraph 39, they submitted:
It has to be remembered that articles 6(1) to (3) are all part of the overriding requirement of a fair trial. If an application for a gang-related violence injunction [is a proceeding] in respect of a criminal charge, the respondents are entitled to the protection of article 6(2) and (3), and fairness clearly requires the application of the criminal standard of proof.
If I had come to the conclusion that these proceedings did entail the determination of a criminal charge, I would have had to have addressed the question whether that automatically meant that the criminal standard of proof must be applied, and whether the impossibility of doing so here would mean that the section 34 regime is necessarily incompatible with the fair trial guarantee in article 6(2), embodying the presumption of innocence.
As I have not reached that conclusion, I do not have to decide that point. It is certainly the case that in our legal system use of the criminal standard of proof to determine criminal charges is very deeply ingrained; but the court was not informed of the position in other Convention states and no authority was cited to me from Strasbourg or elsewhere on the question whether the article 6(2) presumption of innocence included use of the criminal standard as the only permissible standard for rebutting that presumption and proving guilt.
Does the use of the civil standard of proof infringe article 6(1) of the Convention?
The respondents submit that the right to a fair hearing requires use of the criminal standard of proof beyond reasonable doubt so that the court is sure that the allegations are made out and not merely that, as section 34(2) provides, the court is so satisfied on the balance of probabilities. They submit, at paragraph 43 of the skeleton argument:
The nature of the civil trial that is engaged upon, the allegations made and the potential consequences in the form of prohibitions and requirements as set out in sections 34 and 35 of the 2009 Act require the criminal standard of proof to be employed to ensure that there is a fair trial, especially in the light of the limited protection from hearsay evidence given by the Civil Evidence Act 1995.
In oral argument, Mr Stark submitted that if the criminal standard is not applied, there is a real risk that an unfair process will result, in particular through the use of anonymous hearsay, which, he asserted, the Chief Constable is attempting to employ in this very case. He pointed out that the findings could lead to consequences of great gravity for the respondents without commensurate protection afforded by the criminal standard of proof. He drew an analogy with the reasoning in McCann where the criminal standard had been found to be appropriate, and with cases in the disciplinary sphere where the criminal standard is sometimes applied in cases where the ability to earn a living is at stake and a person's livelihood is threatened.
He submitted, in short, that Parliament had overstepped the mark in enacting that the correct standard was that of the balance of probabilities, that that was unfair and would lead necessarily to an unfair process and that the court should so declare in a declaration of incompatibility under section 4 of the Human Rights Act. He pointed out that the problem could not be solved by a return to what used to be called the heightened civil standard of proof since that was no longer in operation as a means of dealing with the issue.
The Chief Constable, through Mr Cohen, submitted that there is nothing unfair about applying the civil standard as provided for in the legislation and made the following points in particular. He drew an analogy with care proceedings in which there is an element of protection in the exercise of the court's jurisdiction, which makes it appropriate for the civil standard of proof to apply. He referred to the well-known words of Baroness Hale in Re B (Care Proceedings: Standard of Proof) [2008] UKHL 3, [2009] 1 AC 11, at paragraph 69:
There are some proceedings, though civil in form, whose nature is such that it is appropriate to apply the criminal standard of proof... But care proceedings are not of that nature. They are not there to punish or to deter anyone. The consequences of breaking a care order are not penal. Care proceedings are there to protect a child from harm. The consequences for the child of getting it wrong are equally serious either way.
Mr Cohen pointed out that the protective element of this particular jurisdiction is novel and unique, and differentiated it from other types of regulatory order such as a football banning order or an ASBO, bringing this type of case closer to the analogy of care proceedings than to the types of cases where undesirable and reprehensible conduct is a subject of the application. He also pointed to procedural protections which he said were more than capable of assuring the fairness of the trial.
He listed these in his skeleton, referring to section 36(4) of the 2009 Act (the requirement for a review hearing where a prohibition or requirement is to last for more than a year); the section 38 duty of consultation with other agencies before making an application; the restrictions on the court's powers at without notice hearings; and the applicability of the procedural regime set out in Civil Procedure Rules, rule 65.43(3), which has been included specifically to regulate and ensure the fairness of the procedures when an application of this kind is made (whether it be in the High Court or a county court) and the accompanying practice direction.
The Secretary of State, through Miss Broadfoot, supported that position. She submitted that McCann case was not authority for the proposition that the criminal standard of proof was a necessary ingredient of a fair trial in the present case. Use of the criminal standard in McCann had been informed by considerations of pragmatism which required lower courts to decide cases in accordance with a clear and unambiguous standard, at a time when the heightened civil standard was still in use and might, it was thought, be a source of confusion to lower courts if they were required to apply it.
Ms Broadfoot pointed out that in McCann, the legislation then dealing with ASBOs – provisions in the Crime and Disorder Act 1998, as it then stood – was silent on the question of the standard of proof and that therefore their Lordships were free to determine what it should be, untrammelled by legislative compulsion such as exists in the present case.
I turn to my reasoning and conclusions on this issue. As I have been reminded and have noted, there was a time when the so-called heightened civil standard of proof was used in certain cases where regulatory injunctions were adjudicated upon; and that heightened civil standard was often, in practice, indistinguishable from the criminal standard. An example in the case of football banning orders is Gough v Chief Constable of the Derbyshire Constabulary [2002] EWCA Civ 351, [2002] QB 1213. I accept that in McCann use of the criminal standard of proof was found appropriate in the context of the then ASBO regime, even though their Lordships did not find that the regime entailed a determination of a criminal charge.
However, the heightened civil standard of proof was discarded subsequently in Re B (Children) (Care Proceedings: Standard of Proof) [2008] UKHL 35, [2009] AC 11. Lord Hoffman, after agreeing fully with the speech of Baroness Hale, said this at paragraph 5:
Some confusion has, however, been caused by dicta which suggest that the standard of proof may vary with the gravity of the misconduct alleged or even the seriousness of the consequences for the person concerned. The cases in which such statements have been made fall into three categories. First, there are cases in which the court has for one purpose classified the proceedings as civil (for example, for the purposes of article 6 of the European Convention for the Protection of Human Rights and Fundamental Freedoms) but nevertheless thought that, because of the serious consequences of the proceedings, the criminal standard of proof or something like it should be applied. Secondly, there are cases in which it has been observed that when some event is inherently improbable, strong evidence may be needed to persuade a tribunal that it more probably happened than not. Thirdly, there are cases in which judges are simply confused about whether they are talking about the standard of proof or about the role of inherent probabilities in deciding whether the burden of proving a fact to a given standard has been discharged.
After illustrating from case law examples in those categories, he said this at paragraph 13:
My Lords, I would invite your Lordships fully to approve these observations. I think that the time has come to say once and for all that there is only one civil standard of proof and that is proof that the fact in issue more probably occurred than not. I do not intend to disapprove any of the cases in what I have called the first category but I agree with the observation of Lord Steyn in the McCann case at page 812 that clarity would be greatly enhanced if the courts said simply that although the proceedings were civil, the nature of the particular issue involved made it appropriate to apply the criminal standard.
In the present case, that last option is not open to the court. The court is faced with a conscious legislative choice to adopt the civil standard in a statute enacted against the background that the House of Lords had decisively, the previous year, rejected the concept of a heightened civil standard. After careful reflection, I have reached the conclusion that use of the civil standard of itself does not necessarily make the hearing of a section 34 injunction application unfair within article 6 of the Convention.
I bear in mind the observations in McCann of Lord Steyn at paragraph 37 and of Lord Hope at paragraphs 81 to 83, where they referred to the need for use of the criminal standard to determine applications for ASBOs and the discussion of what was then the heightened civil standard; but the reasoning in McCann proceeded from a position where, firstly, the statute was silent on the correct standard of proof; secondly, the heightened civil standard, as it was called, was then in favour; and thirdly, pragmatism dictated the need for a clear direction to lower courts to use the criminal standard and not the heightened civil standard.
It seems to me, for those reasons, that the McCann case does not provide the answer here. It does not follow from the reasoning in that case that explicit use of the civil standard as a conscious legislative decision would entail a breach of article 6(1).
In my judgment the answer is to be found by applying what Lord Bingham said in the MB case, which I have already mentioned, at paragraph 24. After accepting the Secretary of State's submission that non-derogating control order proceedings do not involve determination of a criminal charge, he said this in the latter part of paragraph 24:
But I would accept the substance of AF's alternative submission: in any case in which a person is at risk of an order containing obligations of the stringency found in this case... the application of the civil limb of article 6(1) does in my opinion entitle such person to such measure of procedural protection as is commensurate with the gravity of the potential consequences. This has been the approach of the domestic courts in cases such as B [2001] 1 WLR 340, Gough [2002] QB 1213 and McCann [2003] 1 AC 787, and it seems to me to reflect the spirit of the Convention.
I think it is those words that I must consider and apply here. In the present case and in this particular jurisdiction, it is true that the consequences for respondents against whom injunctions are granted may be grave and may include, for example, curfews, a ban from specific locations and other substantial interferences with their lives including a positive requirement to undertake particular activities.
There are safeguards. They have already been mentioned. There is the two-year time limit. There is the eight-hour time limit for a requirement to be in a particular location. There is the obligation of the trial judge to consider the impact of article 8 of the Convention – the right to respect for private and family life – and there are the express provisions in the 2009 Act for minimising interference with religious beliefs and minimising any disruption to attendance at a workplace or educational establishment.
Even with those safeguards, there will be cases in which the interference with the life of a respondent against whom such an injunction is granted will be substantial. Yet, the respondents themselves accept (or at any rate the fourth respondent through Mr Stark accepts in his individual skeleton argument at paragraph 31), and in my view rightly, as follows:
It is not contended by the fourth respondent that there are no issues with gang- related violence in Preston. The seriousness of gang-related violence and the effects it can have on the public and indeed those in and associated with gangs is not underestimated, and the murder of Jonjo Highton at the hands of members of a gang, described as The Avenham Gang, is very clear and tragic evidence of that.
It cannot seriously be disputed that gangs are a scourge in our cities and that the 2009 Act is a response to that. The broader legislative purpose is an avowed attack on the operation, ethos and culture of gangs and the need to break them up. That is clear from the Secretary of State's guidance which includes, at paragraph 2.1, the following:
By imposing a range of prohibitions and requirements on a respondent, a gang injunction aims
to prevent the respondents from engaging in or encouraging or assisting gang-related violence or gang-related drug-dealing activity; and/or
to protect the respondent from gang-related violence or gang-related drug-dealing activity.
Over the medium and longer term, gang injunctions aim to break down violent gang culture, prevent the violent behaviour of gang members from escalating and engage gang members in positive activities to help them leave the gang. Gang injunctions can also be used to protect people, in particular children, from being drawn further into more serious activity.
The witness statement of Ms Gomez is to similar effect.
That broader legislative purpose cannot be achieved without measures which will have a major impact on the life of persons against whom such injunctions are granted. Again, there is some analogy with the anti-mafia legislation deployed by Italy and discussed in Guzzardi and the subsequent cases, as there is with the control order cases, which Lord Bingham accepted in MB can have a "devastating effect" on the subject and his or her family.
I accept the point that these injunctions reach a new level of interference with the lives of respondents against whom they are granted, which includes mandatory orders, and that that is provided for in the legislation with only the civil standard of proof and not the criminal standard of proof as the yardstick for the court's determination in the fact- finding exercise.
As against that, respondents have the protection of 34(3) which, as I have said, prevents the court from imposing sanctions that are punitive in character and requires the court only to grant injunctions which in its judgment are necessary to promote one or both of the non-punitive purposes of prevention and protection. On balance, and taking all the above into account, it seems to me that I should accept, and I do accept, the submissions of the Chief Constable and the Secretary of State that use of the civil standard does not violate article 6(1) by making the trial of a section 34 injunction application unfair.
Does the admissibility of hearsay evidence in these civil proceedings mean that the respondents' right to a fair trial under article 6(1) is infringed?
I will go on briefly to consider the position in relation to hearsay evidence. It is common ground that in civil proceedings hearsay evidence is admissible under the Civil Evidence Act 1995, while in criminal cases it is admissible in more restricted circumstances; for example, those set out in sections 114 to 116 in the Criminal Justice Act 2003. It was common ground that the weight attached to hearsay evidence will be affected by the factors set out in section 4 of the Civil Evidence Act 1995. Those statutory provisions are supplemented by rules of court which enable a party wishing to cross-examine the maker of a hearsay statement to seek an order directing his or her attendance at court to answer questions.
The respondents complain of reliance, in this case, by the Chief Constable on unattributed anonymised hearsay. They refer to the dangers alluded to by Brooke LJ in the judgment of the court in Moat Housing Group Ltd v Harris [2006] QB 606, 131, in particular at paragraph 140 where he said this:
While nobody would wish to return to the days before the Civil Evidence Act 1995 came into force, when efforts to admit hearsay evidence were beset by complicated procedural rules, the experience of this case should provide a salutary warning for the future that more attention should be paid by claimants in this type of case to the need to state by convincing direct evidence why it was not reasonable and practicable to produce the original maker of the statement as a witness. If the statement involves multiple hearsay, the route by which the original statement came to the attention of the person attesting to it should be identified as far as practicable. It would also be desirable for judges to remind themselves in their judgment that they are taking into account the section 4(2) criteria so far as they are relevant...
Mr Stark in his individual skeleton argument for the fourth respondent referred me to what was said by Mummery LJ in Manchester City Council v Lee [2004] 1 WLR 349 CA 30, which is well worth repeating here:
Careful consideration needs to be given by the court in each case to the scope of the injunction which is justified by the evidence. In the exercise of its discretion, the court must ensure that the injunction granted is framed in terms appropriate and proportionate to the facts of the case. Thus, if the judge finds that there is a risk of significant harm to a particular person or persons, it would usually be appropriate for the injunction to identify that person or those persons so that the respondent knows the circumstances in which he might be in breach of the injunction and liable for contempt of court if he caused a nuisance or annoyance to them in the future.
I would add that in nearly every case it is likely to be necessary for the trial judge to consider the impact of article 8 considerations when determining the scope of a gang- related injunction and to make a conscious assessment of the extent to which any interference is justified under the second limb of article 8, given the likelihood that the relief sought in the application may be such as to cause a substantial interference with the private and family life of the respondent.
Mr Cohen informed me that, unlike other types of regulatory injunctions such as ASBOs, football banning orders and formerly sexual offences prevention orders, which were dealt with in the magistrates' court in civil proceedings, section 34 gang-related injunctions cannot be dealt with in the magistrates' court but must be dealt with in the High Court or a county court. He pointed out that in a magistrates' court the admission of hearsay evidence is governed by the Magistrates' Court (Hearsay Evidence in Civil Proceedings) Rules 1999, which provide for a procedure broadly similar to the procedure under the Civil Procedure Rules. A useful account of that is given in paragraph 32 of May LJ's judgment in R (Cleary) v Highbury Corner Magistrates' Court [2007] 1 WLR 1272. It is not the case in the magistrates' court, still less in this court or the county court, that hearsay evidence is necessarily and automatically admitted.
I was reminded by Mr Stark, finally, that there is a longstop power under Civil Procedure Rule 32.1 to exclude evidence that would otherwise be admissible. But, he submitted, that would not be available to render inadmissible hearsay evidence that is made admissible by section 1 of the Civil Evidence Act 1995, exclusion of which would circumvent the regime in section 4 of that Act which lists matters that go to weight of hearsay evidence but do not permit outright exclusion of it (cf. the 2015 White Book, volume 1 at page 1050 referring to David Richards J's decision in Daltel Europe Ltd v Makki [2005] EWHC 749 (Ch), in which he indicated that there was no need to use the power under CPR 32.1 in a case where section 4 of the Civil Evidence Act 1995 was available).
In my judgment, the admissibility of hearsay evidence does not of itself entail a breach of article 6(1) of the Convention. It is tempered by the ability of the court to direct attendance of available witnesses, to adopt appropriate case management measures to enable witnesses to be put at ease and to adjust the weight to be given to hearsay evidence where the witness does not attend. In an appropriate case, that could include deciding that the weight to be attached to such evidence is nil or negligible. That seems to me sufficient protection for the fairness of the trial process.
Further Directions
I conclude that the respondents' arguments founded on the Human Rights Act 1998 and article 6 of the Convention, do not persuade me to dismiss the Chief Constable's application as ill-founded or as invoking an inherently unfair process, and I therefore decline to grant any declaration of incompatibility under section 4 of that Act.
Each of the respondents has also separately advanced specific factual argument to support their contention that the case against each of them lacks evidential substance. Mr Stark for the fourth respondent goes as far as to submit that the claim against his client has no reasonable prospect of success on the facts and ought to be dismissed on that ground in any event.
Mr Justice Turner in his order of 15 September 2014 directed, at paragraphs (d) and (e) in his order, that it should be determined at this hearing whether, in the light of the court's findings on the human rights based arguments and on the evidence adduced by the Chief Constable, the conditions in section 34(2) and (3) of the 2009 Act can be established and what directions are thereafter necessary for the proper disposal of these applications in the light of the court's findings.
It seems to me that I should do no more at this stage than give directions for the trial of the application on the facts of each case. It would not be appropriate, nor is it practical in the time available, to pronounce on the factual merits of each application at this hearing. That would require a thorough examination of the factual material deployed in each case.
An application by two of the respondents to discharge the interim injunction against them has already failed and an application for permission to appeal against that decision is pending. There is no application before me to discharge or vary the interim injunctions, save the human rights based overarching challenge which has failed. The applications against each respondent should therefore be determined on their factual merits.
To that end, I propose to transfer the application back to the County Court whence it came, so that a determination can be made either that the interim injunctions, with any necessary adjustments, should be made final (subject to possible review dates and the mandatory two-year time limit), or that the applications should be, if ill-founded, dismissed.
I will hear the parties on what further directions, if any, are thought necessary to bring the matter back before the County Court. In particular, I will consider, in so far as practical in the time available, any direction for the attendance of witnesses for the applicant to answer questions from the respondents. It will be important for the trial judge to follow carefully the guidance of Mummery LJ in Manchester City Council v Lee, which I have quoted above.
Finally, I endorse the following proposition in Mr Stark's skeleton argument (subject to the point that the word "guilt" is not apt in a preventive and protective, and not punitive, jurisdiction):
Injunctions cannot be made simply on the basis of a precautionary measure for the general good for to do so risks guilt by association and the imposition of prohibitions on a person's autonomy and liberty that are not justified by the evidence against them.
I will hear counsel on the form of the court's order and on other consequential matters.
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See also: [2017] EWCA Civ 151
His Honour Judge Robinson:
Introduction
On Monday 17 May 2010 the Claimant was unlawfully attacked and struck on the head by unknown assailants. There is a degree of confusion about precisely when he was so attacked. Times of 5:00pm and 7:00pm have been given. For the purposes of this case, the precise time is immaterial.
After a time the Claimant began to feel unwell. He was persuaded by his friend Robert Tubman to go to hospital. Mr Tubman drove him to the Accident and Emergency Department of the Mayday University Hospital, Croydon. The hospital is now known as the Croydon University Hospital.
The Claimant was booked in at the hospital A&E reception at 8:26pm. I find on the evidence that he left the hospital at 8:45pm at the latest without having been seen by a clinician. Having returned home, his condition deteriorated. An ambulance was called at about 9:42pm. He was first taken to the Defendant's hospital. A CT scan showed the presence of an extra-dural haematoma. He was transferred to St George's Hospital for neurosurgery to remove the haematoma. He has suffered a left hemiplegia.
In this trial I am concerned only with liability. It is agreed that had the Claimant remained at the hospital he would have been treated sufficiently sooner that he would have gone on to make an essentially full recovery.
The Claimant's case is that during the period he was at the hospital, there were breaches of duty by the non-clinical reception staff and by the professional clinical staff. The alleged breach of duty by the reception staff concerns what information he was given about the time he would have to wait before being seen by a clinician, and also a failure to assess the Claimant for "priority triage". The alleged breach of duty by the clinical staff concerns the failure to assess the Claimant during the time he was present at the hospital.
Thus I am concerned with what happened in the period of 19 minutes during which the Claimant was present at the hospital.
The Evidence
For the Claimant I heard from, and read the written evidence of, the following witnesses:
(1) The Claimant himself;
(2) Robert Tubman, the Claimant's friend who drove him to and from the hospital and remained with him at the hospital;
(3) Patreese Erskine, the Claimant's sister;
(4) Patricia Smith, the Claimant's mother;
(5) Ceylan Ozdemir, the Claimant's girlfriend;
(6) Mr J R C Heyworth, Consultant in Emergency Medicine.
For the Defendant I heard from, and read the written evidence of, the following witnesses:
(1) Yvonne Battie was the A&E receptionist on duty when the Claimant arrived by ambulance at the hospital. She was not on duty when the Claimant arrived at 8:26pm earlier that evening;
(2) Valerie Ashley was one of two A&E receptionists on duty when the Claimant arrived at 8:26pm. She has no recollection of the events of that evening;
(3) Susan Reeves-Bristow was the other receptionist on duty when the Claimant arrived at 8:26pm. She also has no recollection of the events of that evening;
(4) Dr G L Campbell-Hewson, Consultant in Emergency Medicine.
I am satisfied that all of the witnesses have done their best to assist me in my task of fact finding. In making findings of fact I have had regard to all of the evidence.
I do not need to dwell upon the events immediately following the attack on the Claimant, save to observe that he was not immediately so unwell that he felt any need to go to hospital.
Presentation at Hospital
By the time the Claimant signed his witness statement on 28 June 2014, he had little recollection of relevant events. He remembered his friend Robert Tubman arriving by car to drive the Claimant to see a potential landlord. He says in his witness statement that by then his head "felt as if it was in a vice".
At the hospital he remembers talking to the receptionist, and that it was difficult for him to stand because his head was hurting so much. He says this:
"… I do remember talking to the receptionist in A&E. I remember it was difficult for me to stand because my head was hurting so much and I was collapsed against the window of the A&E department. I remember that she did not seem to be listening to what I was telling her namely that I had been attacked and I had a head injury and I had a very bad headache."
He described the manner of the receptionist as being "off hand" and goes on to say that she "told me that I would have to wait in the waiting area for up to 4-5 hours". He continues in his witness statement thus:
"I remember sitting in the waiting area with Robert for a while and feeling terrible. My head was really painful and felt like it was in a vice. I just wanted to go home and lie down. If the receptionist had reassured me that I would be seen by a nurse to assess me before having to wait so long to see a doctor I would have stayed. There was no way I could wait there for 4 or 5 hours and I remember telling Robert that I wanted to go home and we left."
In cross examination he said he had been trying to tell the receptionist that he head "was in pain I had never experienced before", and "I just said my head was hurting and I need to be seen straight away". That goes beyond what he said in his written evidence and it must be open to doubt that he in fact said anything beyond that which appears in his written evidence.
Mr Tubman's account of events upon arrival at the hospital appears at paragraph 6 of his witness statement:
"Michael tried to tell the lady at the desk that he had been involved in an incident in which somebody had hit him over the back of his head and he believed he had a head injury. He told the lady that he was feeling very unwell and his head was really hurting. The lady did not have a helpful attitude at all to Michael. She seemed more concerned as to how the injury had occurred and she asked Michael if the police had been involved. Michael tried to explain to her that he had been hit over the head and was worried that he had a head injury and needed to be seen quickly. I also tried to explain to the lady that Michael was really unwell and we were worried that he had a head injury and needed urgent attention."
Time at the Hospital
An important issue is the length of time that the Claimant remained at the hospital. The Claimant himself cannot now assist on that issue. During cross examination he was taken to a document at pages 321-328 in Bundle 1. It is a form of application for compensation addressed to the Criminal Injuries Compensation Authority. At page 328 these words appear in handwritten block capitals concerning the time the Claimant remained at the hospital:
"[The receptionist] told me to sit down and wait for 5 hours. I sat down for around 2 minutes and then left as I felt it was pointless to stay due to the pain in my head and lack of help."
The Claimant explained that he did not complete the form himself and said that the person who completed the form for the Claimant must have made a mistake.
Page 45 in Bundle 1 is a copy of a typed letter dated 14 November 2010 from the Claimant complaining about his treatment at the hospital. In it he says:
"I waited for approximately an hour, however, when the pain became unbearable I left the hospital in hope that I would feel better after some rest."
The Claimant says of this letter that it was written by a friend on the basis of what the Claimant told him. The Claimant said that he wanted to say "20 to 30 minutes" and could not explain why the friend had typed "an hour". It was put to the Claimant that he had stayed at the hospital for only a few minutes, but he said in his oral evidence on one occasion that he waited for 20 minutes and on another that he waited for 20 or 30 minutes.
I will deal fully with Robert Tubman's evidence on matters other than the time he remained with the Claimant at the hospital in due course. Dealing with that time he says in his witness statement that:
"We probably waited for about 20-30 minutes until Michael said that the pain was too much and that he felt too unwell to keep sitting there and insisted on going back home for paracetamol."
The Claimant's mother, Patricia Smith, said in her oral evidence that she was aware of the Claimant arriving home. She said she was waiting for the 9:00pm news to start and just after it had started her daughter had called to her to say that Michael was here. That is consistent with the ambulance records which record that the Claimant had arrived home at 9:00pm. It is inconsistent with Patricia Smith saying that the Claimant had "just come in" during the 999 call timed at 9:42pm. She was asked about this and said she had not meant it literally.
I am confident in finding that the Claimant arrived home just after the start of the 9:00pm news.
There appears to be agreement that it takes about 13 minutes to drive from the hospital to the Claimant's home – see the AA Route Planner document at page 133 of Bundle 1. To that period there must be added a short time representing time to walk from the A&E department to Mr Tubman's car and then from the car into the Claimant's home. Thus the whole journey is likely to have taken a little longer than 15 minutes.
Although the two receptionists on duty have no recollection of the events of 17 May 2010, Yvonne Battie says she does. In her statement she says she arrived at the hospital at 9:30pm ready to start her shift at 10:00pm. In oral evidence she said she arrived at 9:15pm. Her early arrival was to allow for a proper handover between the shifts.
At paragraph 10 of her witness statement she deals with the Claimant's A&E record created on 17 May 2010:
"I have reviewed the Claimant's A&E records. I can confirm I noted in manuscript on the A&E card 'DNW [did not wait] 20:45'. I do not know why 20:45 is crossed out or who did this. I do not recall why I wrote 20:45. I assume it was either because the receptionists on the earlier shift told me he left at 20:45 or they may have said he waited about 20 minutes, having arrived at 20:26, or that at about 21:30 they may have said 'he left about 45 minutes ago'."
This evidence is not terribly satisfactory, but the time of 20:45 as the time when the Claimant left the hospital fits closely with his arrival home just after 9:00pm and a journey time in the car of 13 minutes. On the preponderance of the evidence I find that the Claimant left the A&E department of the hospital at 20:45 at the latest. This means he was present within the department for a maximum of 19 minutes.
Waiting time information given to the Claimant
The only firm evidence concerning this comes from the Claimant and Mr Tubman. The two on-duty receptionists can give evidence only of their usual practice. The evidence from Ms Battie comprises what she was told by those receptionists at handover and is necessarily hearsay.
I have already noted that the Claimant recalls being told by the receptionist that he "would have to wait in the waiting area for up to 4-5 hours".
In cross examination he repeated that he was told he would have to wait four to five hours. Having been told that he said the receptionist put the shutters down.
Mr Tubman in his written evidence said this in paragraph 7:
"The lady told Michael in a very off-hand way that he would have to go and sit down and would have to wait for about 4-5 hours before somebody looked at him. Michael said that he could not wait that long because he felt he was about to collapse. The lady told him that if he did collapse then he would be treated as an emergency. At this point she made it clear that she was not interested in dealing with him any more and was pulling down the shutter."
He was asked some supplemental questions as part of his evidence in chief. He was taken to the written evidence of Valerie Ashley where she said "I would have told him he could expect to be seen by the triage nurse within 30 minutes of arrival" and to the written evidence of Susan Reeves-Bristow where she said "I would have told the Claimant the triage nurse would be informed and he would be seen as soon as possible". Mr Tubman said that he did not remember anything like that being said and made this point: "If I had heard anything like that I would have made him [the Claimant] wait."
He was also taken to the statement of Mrs Battie who said this at paragraph 6:
"I recall Val and Susan told me that the patient had been asked to wait for triage and that he would not have to wait too long. I recall Val and Susan told me the patient came back to the reception desk and asked how long he would have to wait and that although he was again told 'not too long' the patient then left A&E before being seen by the triage nurse. I do not recall being told whether it was Val or Susan who actually spoke to the patient."
Mr Tubman described as being "untrue" any suggestion that the Claimant had returned to the reception desk.
In cross examination he said this:
"If we had been told we would be seen in 30 minutes I would have stayed with my friend for 30 minutes. I was told he would be seen up to four to five hours. I am no professional. I thought it meant he could be waiting for up to four to five hours – that might be the maximum time we might have to wait".
Later on he said:
"I was prepared to wait for as long as necessary. If we had been told he would be seen in 30 minutes I would have made sure he waited".
I find the evidence of Mr Tubman compelling. I am entirely satisfied that, whatever the usual practice of the two on-duty receptionists is or may have been, on this occasion the Claimant was not told he would be seen within 30 minutes or anything like that. I an entirely satisfied that the only information given to the Claimant and to Mr Tubman was that the Claimant would have to wait for up to four or five hours to be seen. I am satisfied that they were not told about being seen earlier by a triage nurse or anyone else.
I am also satisfied, and I so find, that if the Claimant had been told he would be seen within 30 minutes, he would have waited until he was seen. For the avoidance of doubt I find that Mr Tubman would have been successful in persuading the Claimant to wait, even if the Claimant had said he wanted to go.
Effect of the NICE Guidelines, and "Priority Triage"
The relevant guideline was issued in September 2007 entitled "Head Injury –Triage, assessment, investigation and early management of head injury in infants children and adults". The introduction makes it clear that NICE clinical guidelines are recommendations about the treatment and care of people with specific diseases and conditions in the NHS in England and Wales. The introduction continues: "This guidance represents the views of the Institute, which was arrived at after careful consideration of the evidence available. Healthcare professional are expected to take it fully into account when exercising their clinical judgment."
The relevant part of the Guideline is at paragraph 1.4.1.6:
"All patients presenting to an emergency department with a head injury should be assessed by a trained member of staff within a maximum of 15 minutes of arrival at hospital. Part of this assessment should establish whether they are high risk or low risk for clinically important brain injury and/or cervical spine injury, using the guidance on patient selection and urgency for imaging (head and neck cervical spine)."
Realistically, the assessment envisaged by the Guideline in the context of this case would be assessment by a triage nurse. The Claimant's case is that had he been assessed within 15 minutes, he would either have been admitted there and then and kept under observation, or he would have been encouraged to stay to be seen by a doctor, and would have stayed in the hospital.
The only evidence concerning the triage system operated at the hospital came from the three receptionists and from disclosed documents. The primary system operated at the hospital involved the receptionist physically transporting the completed registration form to the triage nurse station and placing it in a rack outside the room. There was evidence, which I will examine in due course, of the reception staff drawing to the attention of the triage nurse patients who appeared to the reception staff to be clearly very unwell with a view to the triage nurse prioritising triage in respect of such patients.
The first issue is whether triage within 15 minutes of arrival at hospital is mandatory. In their joint statement the experts said in answer to question 2:
"The experts recognised that the standard of 15 minutes to triage may not always be achievable, being influenced by the level of activity in the Emergency Department and other clinical priorities".
The experts discussed the issue of "triage within triage" and came to divergent views. Mr Heyworth thought that the triage nurse should review the registration forms "and prioritise those patients who may be at risk of deterioration". Dr Campbell-Hewson thought that alert and orientated patients presenting at reception are at low risk of having a serious head injury and "there would not be time for a 'triage within triage' process".
In oral evidence both Mrs Batttie and Ms Ashley spoke of a practice whereby they might draw the attention of the triage nurse to a patient who was plainly seriously unwell.
Mrs Battie said that this was "something we have always done since I started". She agreed with this proposition put to her in cross examination:
Q - If a patient is clutching his head and saying the pain is the worst he has ever experienced having been hit on the head, would you say this merits special attention from the triage nurse?
A – Yes, we have all been told to do that. With a terrible head injury, tell the triage nurse. We have a streaming process and we are told that if there is a bad injury, we should tell the triage nurse.
Ms Ashley was asked if she was aware of a system of priority triage. She said that she was: "we would inform the triage nurse". She said she would "definitely" do this if the Claimant had said he had a headache as bad as anything he had ever had. She said she would write the word "priority" on the registration form, but seemed to suggest she would only do that in the case of a patient presenting with chest pain.
This common sense practice seems to me to be no more than the practical application of the common sense proposition which appears in a document produced after this incident. The document is entitled "Triage Position Statement" dated April 2011. It appears to have been the result of collaboration between The College of Emergency Medicine, the Emergency Nurse Consultant Association, the Faculty of Emergency Nursing, and the Royal College of Nursing, Emergency Care Association. The third paragraph on page one of the document is in these terms:
"Well recognised red flag presentations, e.g. crushing chest pain or profuse bleeding may be recognised by non-registered health care workers such as Emergency Department (ED) or Urgent Care Centre (UCC) reception staff, who should seek the immediate assistance of a registered clinician … Assessing urgency in other presentations is a more complex process and requires the skills of a trained health care professional."
The Claimant was plainly able to give the personal details which appear on the registration form. Mr Tubman agreed that he did not know these details and so it must have been the Claimant who provided them. This supports the view of Dr Campbell-Hewson that the ability of the Claimant to give these details is indicative of his level of alertness and orientation. He was of the view that the presentation of the Claimant was not terribly striking. He said that priority triage is fairly common and is at the standard of a member of the public exercising common sense.
In contrast, Mr Heyworth said he would have expected the receptionists to have recognised the seriousness of the Claimant's condition.
I am not satisfied that the Claimant told the receptionist that the pain in his head was the worst he had ever had. This evidence only emerged for the first time in cross examination and I find his memory on this point to be unreliable. If the Claimant had in fact said this, I would have expected that important detail to have been recorded in his written witness statement.
I accept the accounts of the Claimant's presentation at reception given by the Claimant and Mr Tubman in their respective witness statements. Such presentation is not such as to have alerted non-clinical reception staff to the presence of a condition so serious that it was necessary to bring it to the attention of the triage nurse. I agree the standard of recognition of such conditions is at the standard of a member of the public exercising common sense. That being so, there was no obligation on the reception staff to bring the Claimant's condition to the attention of the triage nurse to be seen as a matter of priority.
Having determined that the Claimant did not fall into the category of patients who should have been fast tracked under the priority triage system, I turn next to consider the effect of the NICE guidance. I must consider two issues:
(1) Did the failure to assess the Claimant within 15 minutes of his arrival at hospital, alternatively during the 19 minutes that he was actually present, amount to a breach of duty?
(2) If it did, was such breach of duty causative of the damage ultimately suffered by the Claimant?
The 15 Minute Imperative
The primary case of the Claimant is straightforward and superficially attractive. The NICE guideline describes optimal practice. Anything less must represent sub-optimal practice and is therefore unacceptable. This indeed represented the primary position of Mr Heyworth in oral evidence when he said that "the NICE standard is a standard and failure to comply is sub-standard care".
The real world position is not so simple, as was fairly recognised by Mr Heyworth when he qualified the evidence I have just quoted by saying: "We [the experts] agreed that up to 30 minutes may be the time allowable if there are adverse factors".
This evidence flowed from the discussion between the experts in their joint statement. In answer to questions 3 and 4 the experts agreed:
"The experts recognised that the standard of 15 minutes to triage may not always be achievable, being influenced by the level of activity in the Emergency Department and other clinical priorities.
"The experts agreed that hospital Emergency Departments should in principle be provided with the resources to comply with the expected standards set by NICE and other relevant organisations. It is not always feasible to ensure compliance with all such targets at all times.
In answer to question 9 the experts wrote this:
"The experts agreed that the NICE Guidance for triage within 15 minutes applied in principle, although the potential confounders of the overall activity in the department at that time, including the numbers of patients and the nature of their presentation (casemix), would influence the achievable interval.
"The experts agreed that the expected information would be that the patient would be asked to wait in the waiting room with an expectation to be seen by the triage nurse within 30 minutes."
It was also accepted by the experts that:
"Monday evening is typically a busy evening of the week in an Emergency Department. It appears that there was a high volume of clinical workload in terms of numbers and acuity at the time of Mr Darnley's presentation. In all Emergency Departments there are finite numbers of nursing staff available for triage and it may not always be possible to triage all patients presenting with a head injury within the target time of 15 minutes."
During the course of this case, there has been much attempt to analyse what was happening in the Emergency Department of the hospital by reference to the A&E records of patients who arrived between 7.34pm and 9.02pm. The Claimant's case is that unless the Defendant can justify by evidence that the A&E department was too busy to triage the Claimant within 15 minutes of arrival, then breach of duty is established.
Analysis of the A&E records proved problematic. It appears that there are three triage streams namely adult ambulance arrivals, adult walk-ins, and children.
It was doubtless hoped that analysis would show either that the triage nurses were so busy that it was excusable to miss the 15 minute target, or that the triage nurses were not so busy that missing that target was excusable. In the event, it has not been possible to show either of those outcomes.
What I am prepared to find is that it seems to me to be extremely unlikely that the triage nurses were not fully engaged that night. The alleged breach of duty is a failure to meet a tight target of 15 minutes by a factor of 4 minutes. I am not prepared to find that this amounts to a breach of a clinical duty of care. It is right that there must be a longstop, or the target becomes meaningless. The consensus of opinion amongst the experts is that the longstop position is 30 minutes. That seems entirely appropriate.
It is not clear when the Claimant was in fact called for triage. It was after 8.45pm. However, any delay after 19 minutes was not causative of any loss since the Claimant had, by then, already left the hospital.
Thus I conclude the fact that the Claimant was not seen by a triage nurse during the 19 minutes he was present in the hospital did not amount to a breach of duty. However, in any event, the fact that he was not seen during those 19 minutes did not cause any loss. The mischief at which the NICE guideline is aimed is the prevention of intra-cranial damage. The damage in this case arose because the drastic deterioration in the Claimant's condition occurred away from the hospital. It was the Claimant's choice to leave the hospital when he did.
Scope of any obligation by reception staff to provide information
It is worth shortly repeating the relevant primary facts which I have found:
(1) When the Claimant arrived at the reception desk, he and Mr Tubman were told only that they would have to wait for up to four or five hours before the Claimant would be seen.
(2) If the Claimant and Mr Tubman had been told the Claimant would be seen within 30 minutes, whether by a triage nurse or indeed anyone else, they would have stayed and the Claimant would have been seen before they left the hospital.
The inevitable consequential finding is that upon being seen, the Claimant would either have been admitted or told to wait in the reception area. I am satisfied he would have followed such advice and thus his later collapse would have occurred within a hospital setting. His collapse would have resulted in prompt medical attention such that, on the agreed causation evidence, he would have made an essentially full recovery.
The evidence of the usual practice of the on-duty receptionists is that a person such as the Claimant would usually have been told that he would be seen by a triage nurse within 30 minutes (Valerie Ashley) or as soon as possible (Susan Reeves-Bristow. That of itself does not elevate "usual practice" to the status of a duty to follow such practice, with legal consequences potentially flowing from a failure to follow such practice.
In a letter dated 23 March 2011 (page 46 in the bundle) written by the Defendant's Chief Executive to the Claimant, the author wrote:
"You also state in your letter that the receptionist told you there would be a four or five hour wait to see a doctor. This was completely incorrect, as waiting times for individual patients are determined by the severity of their injury, as assessed by the triage nurse, and I am very sorry that you were misinformed."
This also does not seem to me to amount to the assumption of a duty provide such information, with legal consequences potentially flowing from a failure to provide it.
Dealing next with the expert evidence, neither expert dealt with this issue directly in their respective reports. Mr Heyworth does not mention it at all. Dr Campbell-Hewson sets out the relevant allegations of negligence, but then observes that the evidence of the on-duty receptionists is to the effect that they would have told the Claimant he would be seen by a triage nurse. He observes – rightly – that it is for the Judge to make relevant findings of fact, but does not deal with the consequences of a finding adverse to the Defendant's factual case.
In the agenda for the meeting between the experts, this question was asked:
"9.2 What information should have been given to the Claimant … by reception, in terms of waiting to be seen/triaged?"
The experts answered this question thus:
"The experts agreed that the expected information would be that the patient would be asked to wait in the waiting room with an expectation to be seen by the triage nurse within 30 minutes."
In oral evidence the issue was explored in more detail. In cross examination Mr Heyworth agreed that there was no clinical necessity to tell a patient what the waiting times were, but then went on to say that the duty of a receptionist is to provide information, including how long it is likely to be before a patient is seen by a clinician. He disagreed with the proposition that this duty only arose if the receptionist was asked for this information by the patient, and said that this was confusing a clinical role with a basic caring role. He pointed out that patients often complain about not being given information. However, asked whether receptionists were under a duty to tell a patient how long he would be likely to have to wait, he said that this was not a mandatory requirement but there was an expectation that information of this nature would be conveyed. He said this was a piece of advice being given to a patient. Finally he agreed that the average percentage of patients who leave hospital without being seen was less than 5%, there being a direct correlation between an increase in waiting time and increase in the number of patients who leave.
In re-examination he was taken question 9.2 in the joint statement. He said that the information given to the Claimant on this occasion was incomplete and thus was sub-standard. He laid weight upon the fact that in this case the receptionist had been asked about the waiting time and this triggered an obligation for specific additional information to be given.
Dr Campbell-Hewson was asked additional questions in evidence in chief. He was asked if receptionists have a responsibility to volunteer waiting times. He said that it was not a responsibility, but that if they were asked they should give the best estimate that they could give. He made the point that receptionists would not know directly about waiting times and that they would have to get them "second hand". Dealing with the specific case of a head injury patient, he said that it was not recognised practice to volunteer an estimated time for triage and an estimated time to be seen by a doctor, but he did say that if a patient asked for this information then it should be given.
In cross examination he said that in the circumstances of the presentation by this Claimant, he would expect the receptionist to tell the Claimant that he would be seen by a triage nurse. Asked expressly whether he agreed with the answer given to question 9.2 in the joint statement he said that he did.
In this case the issue of the scope, if any, of the duty on a hospital receptionist to provide relevant information is an issue that clearly arises within a clinical setting. However it is not, in my judgment, an issue which falls to be determined by reference to the well known Bolam test to be applied in traditional clinical negligence cases – see Bolam v Friern Hospital Management Committee [1957] 1 WLR 582. Indeed no-one has suggested that it is. Thus the evidence of the expert Accident and Emergency clinicians, whilst clearly relevant, is by no means determinative of the issue.
The relevant information in this case is the estimated time which would elapse before the Claimant would be seen by a triage nurse. That information is not clinical information. It was not sought from clinicians and the information itself could not have had any bearing on any decision concerning clinical treatment. It may inform decisions made by the person affected by the non-receipt of that information, but that does not of itself give rise to a duty to give the information, or to be accurate about the content of the information.
The Submissions of Counsel
Mr Pendlebury for the Claimant puts his case very simply. The experts say that they would expect a receptionist to tell a head injury patient that he will be triaged within 30 minutes or so. Had the Claimant been told this he would have stayed and would not have suffered the damage which was in fact sustained.
He developed this by arguing that one of the purposes of providing this information was, as he put it in his written submissions, "to keep him in A&E", or, as developed in oral argument, to "encourage" the Claimant to stay in the A&E department. He made reference to the "risk" of a patient leaving A&E, and submitted that providing accurate information concerning the likely triage time would reduce that risk. The purpose of the triage system was not simply to categorise patient priority; it was also to give the patient information.
He submitted that it was not unfair, unjust or unreasonable to hold the A&E department responsible for the consequences of the Claimant leaving the A&E department in the circumstances of this case.
Mr Martin, for the Defendant, put the issue somewhat differently. Whilst recognising that a proportion of patients do leave A&E departments without having been seen, he submitted that avoiding the risk of a patient leaving without treatment was not part of the object of the triage system.
He submitted that the Court should not conclude that there had been an assumption of responsibility on the part of the Defendant for the consequences flowing from a failure by the civilian reception staff giving inaccurate or incomplete information concerning waiting times in the A&E department. The imposition of such a duty would be unreasonable and, as it was put in written submissions, it "would make being an NHS receptionist impossible".
Even if there is a duty to provide accurate information concerning triage waiting time, Mr Martin submitted that the damage actually suffered by the Claimant was outwith the scope of any such duty, which he recognised was probably another way of saying that the Claimant's decision to leave was a new independent act which broke any chain of causation. I was referred to dicta of Laws LJ in Rahman v Arearose Ltd and University College London NHS Trust [2001] QB 351 (CA).
Finally, it was submitted that in the event that the Claimant succeeded on the issue of liability, I should hold that the Claimant was in part responsible for the damage he suffered.
Discussion
I do not find it necessary to determine the scope of the triage system since in this case there was no triage before the Claimant left the hospital. It is right to observe that Mr Heyworth in cross examination agreed with the proposition put to him that the purpose of prompt triage was not to prevent patients leaving the hospital. However, this answer was given in the context of Mr Heyworth also agreeing that in this case the fact that the Claimant was not triaged promptly made no difference to clinical outcome in the sense that provided he had remained in the hospital and not gone home, he would have been treated promptly upon collapsing.
The issue in Rahman was the apportionment of loss between the two Defendants. The Claimant had been attacked whilst working in the fast food premises of his employers, the First Defendants. He sustained injuries including damage to his right eye. As a result of the admitted negligence of the Second Defendants, he lost all vision in that eye.
The dictum of Laws LJ to which my attention was drawn must thus be read in the context that he was dealing with apportionment of liability between two Defendants who were tortfeasors, rather than with the issue of whether there was any liability at all. However, I have nevertheless found his observations to be helpful. At paragraph 33 he said:
"So in all these cases the real question is, what is the damage for which the defendant under consideration should be held responsible. The nature of his duty (here, the common law duty of care) is relevant; causation certainly, will be relevant – but it will fall to be viewed, and in truth can only be understood, in the light of the answer to the question, from what kind of harm was it the defendant's duty to guard the claimant."
We seem to live in an age where there is, in perception at least, increasing reluctance by individuals to take personal responsibility for their own actions. Here the Claimant's case on this issue, baldly stated, is that it was the fault of the receptionists that he left the hospital and thus their fault for everything that flowed from such departure. What falls for determination is whether that is an accurate summary of the law as it stands.
Caparo Industries PLC v Dickman [1990] 2 AC 605 is a case concerning liability for economic loss arising out of negligent mis-statement. However, the principles identified in that case, and in particular the now familiar three stage test, have been widely applied to the general law of negligence. Those stages are: (1) foreseeability of harm; (2) proximity; and (3) whether it is fair just and reasonable to impose liability for negligence.
On the evidence, I conclude that it is reasonably foreseeable that some patients do leave A&E departments without being seen or treated, and that in such cases harm may result. There are well documented cases of persons being "turned away" from A&E departments even after having been seen, although such cases are probably better categorised as falling within the ambit of traditional clinical negligence cases. It is reasonably foreseeable that a person who believes it may be four or five hours before they will be seen by a doctor may decide to leave, in circumstances where that person would have stayed if they believed they would be seen much sooner by a triage nurse.
The issue of proximity seems to me to be very closely allied to the question posed by Laws LJ in Rahman namely "from what kind of harm was it the defendant's duty to guard the claimant?" In my judgment, receptionists in A&E departments are not under a duty to guard patients against harm caused by failure to wait to be seen in an A&E department, even if such harm could, as a matter of fact in the individual case, have been prevented by the provision of full and accurate information about waiting times. Thus I accept the submission of Mr Martin that the harm suffered in this case is outwith the scope of any duty or obligation on the part of the Defendant, by its reception staff.
The Editors of Charlesworth & Percy on Negligence (13th Ed) deal with the "fair just and reasonable" issue in this way in paragraphs 2-40 to 2-41:
"Even if the defendant ought reasonably to have foreseen harm to someone in the position of the claimant and the parties were in a relationship of proximity, a duty of care will not arise unless the third of the criteria identified by Lord Bridge in Caparo, is satisfied, namely that a duty to the claimant should in the circumstances be fair, just and reasonable. In Barrett v Enfield London Borough Council [2001] 2 AC 550, 558 Lord Browne-Wilkinson explained the test as follows:
"In English law the decision as to whether it is fair, just and reasonable to impose a liability in negligence on a particular class of would-be defendants depends on weighing in the balance the total detriment to the public interest in all cases from holding such class liable in negligence as against the total loss to all would-be plaintiffs if they are not to have a cause of action in respect of the loss they have individually suffered."
"Ultimately it comes down to judicial conceptions of desirable policy. The question of responsibility for negligence may be argued in an almost unlimited range of circumstances, and a court may take all kinds of considerations into account in deciding whether a duty ought to be owed. However, this does not mean that the question is entirely at large, or that every new decision is no more than an ad hoc determination of policy. Certain core concerns of policy and principle can be identified to which the courts frequently refer and which provide guidance in making decisions."
In this case I also conclude that it would not be fair just and reasonable to impose liability upon the Defendant for harm arising in this case as a result of the failure by the receptionists to inform the Claimant of the likely waiting time to be seen by a triage nurse.
I reach that conclusion for the following reasons:
(1) The primary function of a civilian receptionist in an A&E department is to complete the relevant registration form so that clinical decisions can be taken by health care professionals. There is, of course, a duty to complete this task competently since clinical decision making relies upon accurate information being provided.
(2) The provision of information concerning waiting times is a courtesy that is rightly afforded to patients, and long may that courtesy continue. However, it is going too far to impose liability in damages either for failure to provide the information or to provide information that is inaccurate. Ultimately, the waiting time for a patient is a matter for clinical judgment to be made by a health care professional.
(3) The imposition of such liability carries with it a risk, the magnitude of which I consider to be significant, that civilian reception staff, certainly in A&E departments and perhaps elsewhere, will simply be instructed not to do anything other than complete the registration forms. It will be far simpler and safer for health care providers such as the Defendant in this case to instruct their reception staff to reply to any enquiry "I am not able to answer that query". That would be a regrettable state of affairs since the natural inclination of reception staff is, I am sure, to be helpful and informative.
There is inevitably a blurring of the boundaries which separate the factors discussed above. This is hardly surprising in a case where the overall issue is whether the Defendant, by its reception staff in an A&E department, should be held liable for the consequences of a decision taken by a patient to leave the hospital without having been seen. Although the decision was, in part at least, made on the basis of information provided by the receptionist which was inaccurate or incomplete, my clear conclusion is that to impose legal liability in those circumstances is a step too far. Whether that conclusion is based upon a failure at the proximity stage of the Caparo test, or at the "fair just and reasonable" stage does not seem to me to matter. Equally, the ultimate conclusion could be justified on the basis that the connection between the alleged inadequacies of the information provided and the harm suffered is broken because the decision to leave is one that ultimately was the decision of the Claimant. It was the Claimant who was aware that he had been struck over the head. He knew he was in pain. He knew that ultimately he would be seen. He took the decision to leave before he had been seen. Ultimately, it is the Claimant who must take responsibility for the consequences of that decision, not the Defendant by its reception staff.
Accordingly, the residual injury from which the Claimant suffers is not something for which the Defendant is liable to compensate the Claimant, and the claim fails.
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Mr Justice Hickinbottom :
There are a number of applications before me, which require some consideration of the somewhat convoluted procedural history of this claim. The claim itself is, at heart, a simple one.
The relevant chronology is as follows.
In or about July 1999, the Defendant, Dr Titus Awotula, entered into an assured tenancy agreement with Places for People Homes Limited (formerly the North British Housing Association) ("Places for People") for the tenancy of 184 Hermitage Road, Loughborough, Leicestershire.
On 9 December 2013, Places for People sold a portfolio of properties of which it was landlord, including 184 Hermitage Road, to the Claimant, Friendship Care and Housing Limited, a social housing charity which is an Industrial and Provident Society registered with and regulated by the Housing and Communities Agency. Of course, in line with ordinary principles of land law, the property was sold subject to the Defendant's lease – and, that same day (9 December 2013), pursuant to section 3 of the Landlord and Tenant Act 1985, the Claimant wrote to the Defendant at the property notifying him that it was the new landlord and that all rent etc should be paid to it, and notifying him of the new landlord's address for service. Under the tenancy agreement, that was good service of that notice.
The Defendant fell behind with his rent. On 13 June 2014, the Claimant served a notice under section 8 of the Housing Act 1988, seeking possession on discretionary Grounds 10 and 11 of Schedule 2 to that Act, on the basis that some rent was unpaid and the Defendant persistently delayed paying lawfully due rent. The effective date of the notice was 14 July 2014. On 30 July 2014, the Claimant issued possession proceedings on Ground 10, on the basis that £474.12 rent was outstanding. On 4 August 2014, the Claimant notified the Defendant of the hearing date of the possession claim, by serving him at the property.
The hearing was at Leicester County Court on 8 September 2014. The Defendant did not attend. District Judge Hedley made an order for possession on or before 11 September 2014, £1,274.20 for rent arrears, a per diem amount for use of the property, and costs.
On 19 September 2014, the Defendant applied to set side that order on the basis that he had been abroad from 16 March to 9 September 2014, and did not know about the hearing. On 3 October 2014, he filed a Defence to the claim, saying that the Claimant was not his landlord. That was the only substantive defence upon which he relied. After an adjournment at the Defendant's request, the application to set aside was set down for hearing on 21 January 2015.
In the meantime, the Defendant issued two further applications. First, on 3 October 2014, he issued an application to set aside or stay the warrant of possession pending his application to set aside the possession order. Second, on 20 November 2014, he issued an application seeking an injunction or mandatory order on the basis that the transfer of his tenancy agreement from Places for People to the Claimant was void because of a failure to comply with section 8 of the Landlord and Tenant (Covenants) Act 1995.
On 21 January 2015, the matter came before District Judge Reed who dismissed the Defendant's application to set aside the possession order of 8 September 2014, and his application of 20 November 2014, declaring both to be totally without merit. He directed that the warrant could be executed forthwith. He refused permission to appeal.
On 2 February 2015, the Defendant issued an Appellant's Notice seeking to appeal against the order of 21 January 2015, the appeal route being to a circuit judge in the county court. On 8 February 2015, he issued a further application seeking a stay of execution on the warrant of possession pending the determination of the appeal.
On 10 February 2015, at a hearing attended by the Defendant, Her Honour Judge George found that the grounds of appeal were not arguable and she thus refused the application for permission to appeal. She also dismissed the application for a stay of execution of the warrant, and declared both applications to be totally without merit. Unfortunately, for some reason there is no transcript available of that hearing, despite requests and a direction of His Honour Judge Worster that a transcript be obtained. However, I consider that I can fairly and justly deal with the applications before me without such a transcript.
The warrant for possession was executed later that day, 10 February 2015.
On 25 February 2015, the Defendant lodged an Appellant's Notice against the order of 10 February 2015, on the basis that Judge George had conspired with other judges at Leicester County Court to victimise the Defendant as part of institutionalised racial persecution of him. The route of appeal from Judge George's order was to the High Court.
On 10 March 2015, the Defendant applied for an injunction to require the Claimant to keep safe and secure his "material and intellectual properties for 20 years worthy (sic) millions of pounds", and from disposing of his possessions upon which (he said) his whole life depended. He said that he had only been allowed 3-4 hours to remove his possessions from the property, and had left most of them at his former home because he did not have anywhere else to store them.
On 24 March 2015, His Honour Judge Worster sitting as a High Court Judge struck out the appeal against Judge George's order refusing permission to appeal against Judge Reed's order; and directed the application for permission to appeal against her dismissal of the Defendant's application to set aside the warrant of possession be set down for an oral hearing.
On 14 April 2015, the Defendant applied to set aside Judge Worster's order striking out the appeal against Judge George's order refusing permission to appeal from Judge Reed. On 15 May 2015, Judge Worster directed that that application be treated as including an application to extend time, the application otherwise (he considered) being out of time. On 17 June 2015, the Defendant issued an application to set aside that order. However, I need not consider that application further, because, for the purposes of the substantive application to set aside Judge Worster's order of 24 March 2015, in the Defendant's favour, I shall treat that application as in time.
Consequently, I now have before me the following extant applications:
Application 1: The application of 14 April 2015 to set aside Judge Worster's order of 24 March 2015 striking out the appeal against Judge George's order of 10 February 2015 insofar as she refused permission to appeal against Judge Reed's order of 21 January 2015 refusing to set aside or stay the possession order etc.
Application 2: The application dated 20 February 2015 for permission to appeal against the balance of Judge George's order of 10 February 2015.
Application 3: The application of 10 March 2015 requiring the Claimant to keep and keep secure the possessions which he left at 184 Hermitage Road.
In relation to Applications 1 and 2, a crucial issue is whether the Defendant has shown any possible substantive defence to the possession claim. He has not. His only purported defence is that he never entered into a tenancy agreement with the Claimant, but rather with People for Places; but that is no defence at all. As a matter of conventional land law, unless restricted (e.g.) by the terms of the lease, a landlord is entitled to sell the reversion, i.e. his interest in the property, subject of course to the lease. Although Places for People did not retain a copy of its tenancy agreement with the Defendant, the Defendant himself accepts that he had such an agreement; he accepts that the tenancy was in the landlord's standard form (which is available); and there is abundant evidence that, on 9 December 2013, the freehold of the property was transferred from Places for People to the Claimant (e.g. the formal notification of a scheme transfer of properties between two registered providers to the Homes and Communities Agency). There were no restrictions of transfer of the freehold in the tenancy agreement between Places for People and the Defendant. Such restrictions would, of course, be highly unusual. Section 3 of the Landlord and Tenant Act 1985 requires notification of that transfer to the tenant – so that, amongst other things, the tenant knows to whom he must continue to pay rent – and that was done by the Claimant to the Defendant by notice on 9 December 2013. Section 8 of the Landlord and Tenant (Covenants) Act 1995 is not to the point: it concerns the appropriate procedure for a former landlord seeking the release of a covenant after he has transferred the reversion.
I now turn to the specific applications before me.
Application 1
Before me, the Defendant raised a new objection to Judge Worster's order of 24 March 2014, namely that, in the heading of the order, it says that it was made in the Leicester County Court – but the order could only be made in the High Court. That point has no force. The order is properly sealed with the seal of the High Court in Birmingham – the appeal centre for Leicester cases – and the rubric at the top of an order forms no part of the order itself. The body of the order makes it clear that Judge Worster was sitting as a High Court Judge.
As his substantive ground, the Defendant submitted Judge Worster was wrong to strike out his appeal against Judge George's order refusing permission to appeal against the order of Judge Reed. However, Judge Worster was unarguably correct to make the order that he did, for the reasons that he gave. Section 54(4) of the Access to Justice Act 1999 provides that no appeal may be made against a decision of a court to give or refuse permission to appeal. The effect of that provision is that no appeal lies from an order to refuse permission to appeal (Moyse v Regal Partnerships Limited [2004] EWCA Civ 1269). The Defendant described the provision as "an obnoxious oppressive law which must be expurgated from the statute book"; but it is an extant statutory provision, and one binding on me. It has obvious benefit in the public interest, as it prevents a party to litigation from proceeding to waste further time and effort on an appeal if both the original court and appeal court consider the basis of the appeal unarguable.
This application is refused. It is totally without merit.
Application 2
The second application is for permission to appeal against the other substantive part of Judge George's order – to set aside the warrant of possession. That is not, of course, caught by section 54(4).
The Defendant before me submitted – at least, at one stage – that Application 2 was dependent upon Application 1, i.e. if Judge Worster's order were upheld, then the rest of the appeal would be empty. However, in substance, the Defendant did put forward substantive submissions in respect of Application 2. He submitted that that the original possession order was a judgment in default under CPR Part 12; but judgments in default cannot be made in possession proceedings, and so Judge Hedley's order was unlawful.
The Defendant is correct in his proposition that a claimant cannot obtain a default judgment in a possession action: such a claim does not require a written response from the defendant (CPR rule 55.7(11)); and therefore the concept of a judgment in default of appearance has no place in possession proceedings. Part 12 has no application. That is expressly confirmed in CPR rule 55.7(4) and CPR 12 PD, paragraph 1.3(5)).
Possession claims are subject to the comprehensive regime of CPR Part 55, which requires a hearing of the claim to be set down. The defendant's submission that Part 55 does not apply to a claim by a landlord for possession from a tenant is simply wrong: Part 55 expressly applies to such claims (CPR rule 55.2(1)(a)(i)).
In this claim, the Claimant complied with the provisions of Part 55. It was unfortunate that the Defendant was abroad during the whole of the relevant period, and therefore did not know of the hearing. However, on his return, it was of course open to him to seek to set aside the possession order, on the basis that (i) he had a good reason for not attending the hearing to put his defence (which he could show, as he was abroad at the relevant time), and (ii) he had a possible defence to the claim (which he could not show, because, for the reasons I have given, his purported defence was no defence at all). There would be no point in setting aside a possession order obtained in good faith, even where the defendant did not know of the hearing, if the defendant has not suffered any prejudice because he has no sensible defence to the claim. I do not have a transcript of the hearing before Judge Reed; but it seems that he refused to set aside the possession order on that basis.
In respect of the substantive part of Judge George's order not covered by Application 1 – i.e. her refusal to set aside the warrant of possession – I refuse permission to appeal. The order for possession of 8 September 2014 remained (and remains) good. There was no reason why that order should not be effected by a warrant of possession. The immoderate grounds of appeal – suggesting that Judge George and other judges who have dealt with this case are in some sort of conspiracy to persecute the Defendant on the grounds of race – has no evidential basis. There is not a shred of evidence that Judge George or any other judge has not simply applied the law as they are bound to do. The possession order was granted, and thereafter maintained, not because of a sinister conspiracy against the Defendant, but because he was in rent arrears which he did nothing to cure.
This application is refused, as totally without merit.
Application 3
This application is also has no merit. Of course, one can sympathise with the Defendant if he has no place readily to store his possessions; but his former landlord has no legal obligation to store them for him, securely, at its cost. It has an obligation to give him reasonable opportunity to collect and remove the possessions, which it appears to have done.
This application too is refused.
Conclusion
For those reasons, each of the three applications before me is refused. None of the applications before me has any merit, and each should be marked on the order as totally without merit.
I believe that I have dealt with all of the Defendant's applications – both the Defendant and Miss Fahy confirmed that these were the only current applications in this claim – but, for the avoidance of doubt, if I have not, I formally dismiss any outstanding applications concerning the possession order and warrant of possession, both of which were and are, undoubtedly, legally good. The warrant of possession was, of course, executed several months ago.
(After further submissions)
Civil Restraint Order
In this claim, the Defendant has made seven applications that have been declared to be totally without merit. In the circumstances, Miss Fahy seeks a Civil Restraint Order ("CRO") to protect the Claimant from further such applications. In any event, given the declarations I have made, I am bound by the CPR to consider making a CRO against him (CPR rule 3.3(7)).
A CRO does not prevent a person having access to a court. However, it requires a person to apply for and obtain permission of the court before making any claim or application to the court. Such orders are made to prevent abuse of the court by parties who make claims and applications that lack any merit. Of course, where a claim or application has some merit, then permission, if required, will be granted. An Extended CRO prevents the subject party from issuing any claim concerning any matter involving or touching upon or relating to the proceedings in which it is made, or an application in any such proceedings in a specified court or courts without the permission of a judge.
The circumstances in which the court may make such an order are set out in CPR 3 PD 3C. A CRO involves a two-stage process. First, the court must consider whether it has jurisdiction to make the order it is considering. For an Extended CRO, it must be satisfied that the relevant party "has persistently issued claims or made applications which are totally without merit" (CPR 3 PD 3C, paragraph 3.1). "Persistence" for these purposes requires there to have been more than two claims or applications that were totally without merit (Courtman v Ludlum [2009] EWHC 2067 (Ch)). As I have described, the Defendant has had seven applications declared to be totally without merit. He has clearly been persistent in making applications and pursuing appeals that are totally without merit.
However, even if the court has jurisdiction to make an order, there is a second stage. The court must exercise its discretion as to whether to make an order or not.
In this case, in all of the circumstances, I consider that the court's discretion should be exercised to make an Extended CRO. In coming to that conclusion I have taken into account, not just the number of claims and applications without merit he has made in the past, but the consequences for the Claimant, which has had to pursue this claim, and respond to applications and appeals, without reimbursement of any costs, because the Defendant has failed to meet any costs orders made against him. The Claimant cannot expect a better return in the future, if it has to face more meritless applications. Furthermore, I am quite sure that, without such restraint, the Defendant will continue to pursue meritless litigation to the inconvenience and cost of the Claimant, despite the possession proceedings being substantively over with the execution of the warrant for possession in February. Indeed, in his submissions to me in respect of the CRO application, the Defendant made quite clear that he has every intention of continuing to pursue this litigation, by whatever means, undeterred. Indeed, as I understood him, he said that he proposed to issue a further application, or applications, today.
As I have indicated, meritless claims are unfair to those who have to respond to them. The effort that the Claimant has had to put into the various claims and applications in this case is obvious. But such claims are also seriously detrimental to the interests of justice. The court is required by CPR rule 1.1 to deal with cases justly, which includes dealing with them proportionately, ensuring that an appropriate share of the court's resources is allocated to any particular case (CPR rule 1.1(e)). That is because the resources of the court are both derived from the public purse, and they are finite – indeed, in these times of public spending constraint, they are very limited. Where those resources are expended on a claim which lacks any merit, then that robs the parties of claims with merit of timely justice.
In all of the circumstances, I am quite sure that it is appropriate and indeed necessary to make an Extended CRO against the Defendant, without which he will continue to issue meritless applications.
Consequently, I will restrain the Defendant in broadly the following terms, namely, whether personally or through any servant or agent, from issuing any proceedings in the High Court of Justice or in any County Court in England and Wales against the Claimant, or any proceedings concerning any matter involving or relating to or touching upon his tenancy and occupation of 184 Hermitage Road, Loughborough – or from issuing any application, appeal, or other process in this action or in any other action in any such court concerning any of those matters – without first obtaining the permission of the Designated Civil Judge for Birmingham or, in his absence, another circuit judge in that court. There will be a right of appeal to a High Court Judge; but that will be restricted to a paper application. The order will last for two years, and will consequently expire on 14 July 2017, unless it is renewed.
The order, Dr Awotula, means that you must obtain the permission of a judge in accordance with the terms of the CRO before issuing any claim or application relating to the subject matter of this claim as defined in the order. If an application is made without that permission, it will be automatically dismissed. If you seek to issue proceedings or an application without obtaining the requisite permission, then that will be a contempt of court, for which you may be punished, in appropriate circumstances by imprisonment.
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Mr Justice Green :
A. Introduction
There is before the Court (a) an application for summary judgment and for costs, and (b) an application for committal of the First Defendant, Thomas Shorey (hereafter "the Defendant"), for contempt of Court. The facts of this case may be stated relatively shortly. The Claimant is the owner of certain valuable confidential information. The Defendant was a former senior executive of the Claimant. He resigned by serving notice on 8th April 2014 and as part of the departure arrangements entered into a detailed Settlement Agreement on 9th May 2014 ("the Settlement Agreement").
This contained comprehensive restrictive covenants which included an 8 month non-compete restriction, and restrictions upon the use and dissemination of confidential information belonging to the Claimant set out in Schedule 6.
The Claimant subsequently came to learn of information to the effect that the Defendant was violating the restrictive covenants and on 22nd August 2014 the Claimant's solicitors wrote requiring the Defendant to cease and desist.
On 26th August 2014 the Defendant replied flatly denying that he had engaged in any conduct in breach of contract. Nonetheless, the Claimant persisted and issued proceedings in September 2014 which included an urgent application for an interim injunction. The application came before Cooke J on 2nd October 2014. In defence of that application on 2nd October 2014 the Defendant served a Witness Statement categorically denying breach. However, to compromise the application undertakings were offered by the Defendant through counsel pending a suitable return date. The undertakings were to the following effect:
1. Until the return date of the Claimant's application or further Order, whichever is sooner, the Defendant undertakes not to use or disclose Confidential Information that he acquired in the course of his employment with the Claimant including in particular:
1.1 Contact details of Customers, Prospective Customers and Restricted Entities;
1.2 Details of Customers, Prospective Customers and Restricted Entities requirements and terms of business;
1.3 Details of the Claimant's pricing information provided to Customers, Prospective Customers and Restricted Entities; and
1.4 Details of the Claimant's employees and officers and the remuneration and benefits paid to them.
The expressions "Confidential Information" and other terms such as "Customer" and "Restricted Entity" were defined in Schedule 1 to the Court Order and replicated the definitions in the Settlement Agreement.
Prior to the return date the Defendant gave undertakings cast in broader terms. These were embodied in the consent Order which contained the usual penal notice. It was signed by the Defendant on 28th October 2014. He undertook to the Court:
"i. Until trial or further order not to use to disclose confidential information, in the same terms as the undertakings given on 2nd October 2014;
ii. Until 31 January 2015, not to solicit any business custom or order for any Restricted Products or Restricted Services from any Customers, Prospective Customers and Restricted Entities;
iii. By 4.30pm 7th November 2014, to swear and serve an affidavit giving full particulars of the following matters:
a. Identifying any Confidential Information within his possession and control…and its location;
b. Stating what use if any he has made of the Claimant's Salesforce Database and/or other Confidential Information;
c. Identifying any third Party, if any, to whom he has disclosed any confidential information and exhibiting copies of any correspondence with such third parties through which such Confidential Information was disclosed;
d. Stating which if any Customers, Prospective Customers and Restricted Entities he has contacted using Confidential Information, including but not limited to any information derived from the Claimant's Salesforce database;
e. Stating that in respect of any Confidential Information, he has returned any hard copies and deleted any soft copies;
f. Verifying that he no longer has in his possession any Confidential Information in any form".
The affidavit sworn by the Defendant on 7th November 2014 averred that the only confidential information that he had was a hard drive kept in his attic, an electronic folder relating to certain other litigation, the contact details of a number of individuals that were automatically downloaded from the iCloud on to his newly purchased iPhone (which he had now deleted), and a copy of the agreement relating to the Claimant's price rates which he himself drew up in 2002. In relation to use of confidential information he swore that he had made no use whatsoever of any such information save with regard to certain limited exceptions. He also swore that he had not disclosed any confidential information to third parties. The thrust of his affidavit of 7th November 2014 responding to the requirement in the Court Order was consistent with his Witness Statement evidence of 2nd October 2014. A Defence was also served which followed the approach of denying the allegations.
Subsequently, a Mr Daniel Cross-Bates, an employee of the Second and Third Defendants, came to be employed by the Claimant. In due course it emerged that the Defendant's Witness Statement of 2nd October 2014 and the affidavit of 7th November 2014 were both false as was his Defence which he had signed under a statement of truth. It became clear that he had retained all along, on a USB stick, a copy of the Sales force database and a volume of other confidential information. In particular it appeared that he had retained and disseminated to the Second and Third Defendants a significant volume of information alleged to be confidential and a document known as the Bookings List which contained not only the names of the Claimant's customers, but the dates upon which they travelled, the price of the trip (thereby enabling recipients to identify the most lucrative customers) and personal contact details for the individuals responsible for leading school trips. Evidence before the Court indicates that the Second Defendant has admitted that one of its employees used the communicated list for its own commercial purposes.
The information provided to the Claimant by Mr Cross-Bates has, in effect, forced the Defendant to come clean. In a second affidavit sworn on 15th January 2015 the Defendant now admits that he gave false evidence in both his Witness Statement dated 2nd October 2014 as well as in the affidavit of 7th November 2014. He admits that the volume of information that he retained was saved on to the USB stick at various points during late 2013 and in the course of 2014, prior to the termination of his employment with the Claimant. He does suggest, however, not to have done this for the purpose of retaining it after his employment terminated. He also admits that he made a certain amount of use of the Claimant's database inter alia providing copies of the All Accounts and Contacts List and Bookings List to employees of the Second Defendant and/or associated companies.
The Second and Third Defendants admit being in receipt of the Claimant's information, it having been communicated to them by the Defendant. The position of the Second and Third Defendants (insofar as relevant for the purposes of the present applications) is that they have made but limited use of this information. I was informed, during the course of the hearing in this case, that the Claimant has now compromised its claim against both the Second and Third Defendants.
A Defence to the action commenced by the Claimant was served on 2nd January 2015. This was initially drafted so as to reflect the false position set out in the early Witness Statement and affidavit. However, it was subsequently amended to take account of the information set out in the affidavits sworn on 15th January 2015 by the Defendant and, accordingly, contains a number of admissions.
I have read with care the second affidavit of the Defendant. It is comprehensive and explains what information the Defendant took away with him when he left the employment of the Claimant. It gives an account of each false statement made in previous Witness Statements and affidavits and gives a detailed account of the extent and nature of the violation of the restrictive covenants. It is plain that a very great deal of care and attention has been deployed in the preparation of this affidavit by the Defendant. Although there are minor respects in which the Claimant cavils with its contents, for example alleging that certain statements are ambiguous, it is in large measure unchallenged by the Claimant. In this second affidavit the Defendant apologises unreservedly. He accepts that his conduct was wrong and amounts to a contempt of court. He does not seek to undermine or diminish the seriousness of his conduct. The affidavit describes the steps that he has taken to purge his contempt by, for example, contacting those to whom he had communicated information with a view to preventing further dissemination. The Defence has been amended to take account of the admissions now made.
B. Claimant's summary judgment application
The Claimant now seeks summary judgment upon the basis of what are said to be admissions contained within the second affidavit and reflected in the Amended Defence. In its original application the Claimant sought judgment on the action as a whole with quantum to be determined later. However, as the case progressed the Claimant incrementally reduced the scope of the claims. This included the complete abandonment of claims based upon alleged breach of the restrictive covenants in the Settlement Agreement (e.g. non-solicitation and canvassing and poaching); and the allegations of conspiracy. During the hearing itself Mr Rivalland for the Claimant also identified a series of important paragraphs in the Particulars of Claim which were to be struck through. The case for summary judgment thus evolved into a far more limited application than it had been at the outset.
I indicated during the hearing that I was prepared to grant summary judgment in relation to those matters which constituted admissions, or as to which there could be no sensible defence. This was upon the basis that I had the power under CPR PD 24.1 to give judgment upon an "issue on which the claim in whole or in part depends".
However I had some real difficulty in identifying what was, and what was not, agreed. To endeavour to overcome this difficulty and upon my urging (over the adjournment in the hearing) the Claimant produced a Scott Schedule which, under four headings, identified the issues upon which it sought judgment. During the hearing one heading was abandoned. Much of the Schedule was agreed and only two relatively short and self-contained issues remained disagreed.
As to the areas agreed the Defendant does not dispute that his retention of the Claimant's information (such as the Salesforce database and the Bookings List) amounted to a breach of the Settlement Agreement. Further, he accepts that, at least in some limited respects, he used that information for instance by transmitting it to the Second Defendant. I should record that the Second Defendant is connected to the Third Defendant which may explain why it also came into possession of some of the Claimant's information. There is also an acceptance that in some respects his conduct amounted to the breach of fiduciary duty that he owed to the Claimant.
I am now able to identify those matters in respect of which it is proper to give summary judgment. I identified during the resumed hearing precisely which allegations of breach were agreed. I do not set those items out here. The parties are to draw up an order which incorporates my conclusion that I give judgment for the Claimant in relation to the admitted issues.
As to the two disputed matters I deal with these below. I have some sympathy with the Claimant on these matters which has pleaded a solid prima facie case. However, in relation to both matters I have come to the conclusion that there is simply not enough information at this stage to be able to form a sufficiently clear view to justify giving judgment upon these issues. In relation to both there are pure questions of fact which are outstanding and they will have to be resolved at trial.
Contact data: First, it is alleged that the retention and use of contact data was a breach of clause 8.1.1, 8.1.3 and 8.2 of the Settlement Agreement. The Defendant's position is that whilst he accepts that he wrongfully retained confidential contact details, the emails he sent to people were based upon contact details that he had acquired from other sources. He says that much of this was in his possession prior to his taking up employment with the Claimant, or was information he obtained from social media or other third party sources and that therefore it is not information over which the Claimant can assert confidentiality vis-à-vis the Defendant. Ultimately this is a question of fact which I cannot resolve on a summary basis.
Vitesse Arnhem: Secondly, it is alleged that the transmission of contract and pricing information to Vitesse Arnhem were breaches of clause 13.1 of the Settlement Agreement and clause 2.2.2.3 of Schedule 6. The main evidence relied upon is an email dated 22nd July 2014 in which the Defendant refers to the provision of a draft agreement showing various commercial rates to a Mr Janssen of Vitesse Arnhem. The Claimant submits that this was a confidential agreement belonging to the Claimant. There is no dispute from the Defendant that this was a confidential document belonging to the Claimant. However, he says that although this was post-termination, all that the email refers to is a request made by Vitesse Arnhem for Mr Shorey to provide to them, in effect, as a continuation of his former employment, a document they wanted as part of their ongoing business relationship with the Claimant. In his Amended Defence (paragraph [10]) he thus avers that the contract was not communicated with a view to winning business from this company. He thus denies misuse of the information. On my reading of the email itself this is a possible, if somewhat surprising, inference to draw. However, it raises a question as whether, if indeed this turns out to be true, there was misuse of the confidential information. On balance I do not consider that this can be resolved prior to trial. I decline to give summary judgment upon this particular matter.
The parties are to draw up an Order reflecting those findings.
The Claimant has indicated that it might seek Wrotham Park damages (cf. Wrotham Park Estate Co v Parkside Homes [1974] 1 WLR 798). For the avoidance of doubt nothing in this Judgment is to be treated as indicating any view on whether those admitted breaches will, in due course, turn out to be material or otherwise sound in monetary terms.
Mr Solomon, for the Defendant, questioned whether the net effect of the abandonment of claims meant that the only issues upon which the Claimant now sought to go to trial were those which were the subject matter of the summary judgment application. Mr Rivalland did not express a view on this. I was left somewhat uncertain as to what was left of the claim over and above the admitted matters and the identified disputed matters (upon which I have ruled). Lest there be any doubt so far as other matters set out in the Claimant's original application are concerned (and which have not been abandoned) I decline to grant summary judgment. First, they raise factual disputes which it is not possible for me to resolve in these proceedings. There appears to be a broad dispute as to whether certain information retained or used was within the public domain and therefore was "confidential" or not. Alternatively, even if the information was in the public domain, there is a dispute as to whether nonetheless it is able to attract a level of confidentiality because of the manner in which it is aggregated or organised by the Claimant which means that, in effect, the sum of the information and data is materially greater than the value attributable to the (publicly available) individual parts: see Coco v A N Clark (Engineering) [1969] RPC 41. There are also material disputes about whether any use led to loss. I was informed by the Claimant that very shortly prior to the first hearing the Claimant had entered a settlement agreement with the Second and Third Defendants. The terms of that agreement were not before the Court. However, this led Mr Solomon, for the Defendant, to submit that summary judgment could not be granted without an analysis of this Settlement Agreement. This was because in Jameson v Central Electricity Generating Board [2001] 1 AC 455 the House of Lords held that the liability of concurrent tortfeasors for the same harm was discharged by a settlement which had been agreed with one of them. As a matter of principle, once a Claimant's claim has been fully satisfied by one of a number of concurrent tortfeasors his cause of action for damage is extinguished against all of them. The effect of a compromise was to fix the amount of a plaintiff's claim in just the same way as if the plaintiff had obtained judgment after trial. Mr Solomon submitted that the same principle, which was underpinned by a policy of preventing double recovery, applied equally to claims in contract. He submitted that if, upon a proper analysis of the Settlement Agreement with the Second and Third Defendant, the Claimant received all that it was entitled to then its claim against the Defendant would be extinguished or at least might be materially reduced. It is not possible for me at this stage to say whether the Settlement Agreement with the Second and Third Defendants would have an impact upon the claim against the Defendant. However, I cannot rule this out since it is possible that any loss attributable to the "use" by the Defendant of the Claimant's information will depend upon what the Second and/or Third Defendant did with that information. A claim compromised against those defendants might therefore impact upon the scope and effect of the Defendant's liability. See for an example of a case where a claim against one defendant impacted upon (otherwise successful) non-tortious claims against another defendant by reducing the quantum recoverable DSD & NBV v The Commissioner of Police for the Metropolis [2014] EWHC 2493 (QB) paragraphs [15], [56] – [65].
For all the above reasons the only matters upon which summary judgment is granted are those referred to above.
C. Application for committal for contempt of Court
(a) The application for Committal
I turn now to the issue of contempt of Court. The Claimant, in March 2015, issued an application for committal of the Defendant for contempt of Court. The basis of the application is said to be the Defendant's conduct in knowingly swearing and serving the false affidavit on 7th November 2014 which it is said was in "flagrant breach" of the Court Order dated 28th October 2014. It is submitted that the Defendant "knowingly swore and served a false affidavit". It is said that in the circumstances the Defendant committed a contempt of Court. Paragraph [4] of the application is in the following terms:
"4. In circumstances where the contempt in question relates to a false affidavit, it is not necessary to seek the permission of the Court or Attorney General before proceeding with a Committal Application: see for example Hydropool Hot Tubs Limited v Robertjot & Another [2011] EWHC 121 (Ch) paras, 54 – 62 (per Arnold J)".
Paragraphs [5ff] set out alleged particulars of falsity and contempt. This essentially relies upon the admissions contained within the second affidavit compared and contrasted with the position adopted by the Defendant in the first affidavit.
I have already recorded that the Defendant accepts that the first affidavit was false in that in it he denies possession of certain information belonging to the Claimant, using information belonging to the Claimant, and disseminating it to third parties. It is now accepted that the giving of false evidence amounts to a contempt of Court.
(b) Whether the application should be adjourned pending trial
Before considering how I should exercise my discretion as to punishment there are two preliminary matters which were raised. These were, first, whether I should adjourn the application pending the outcome of the litigation between the parties; secondly, whether I should refuse to hear the case because the permission of the Court has not been sought in accordance with the CPR 32.24 and CPR 81.17. I will address each issue separately.
First, as to the timing of the application, Mr Solomon, for the Defendant, submitted that it was inappropriate for the application to be made now since there would be a trial even if the summary judgment application prevailed. It was submitted that the Claimant was not seeking summary judgment on all issues and other significant issues, such as in relation to the alleged breach of the non-poaching covenant, and as against the Second and Third Defendants and as to whether certain information was in fact confidential etc., remained extant. It was submitted that the issue of the Defendant's breaches went to the core of the outstanding issues in the litigation. He cited in support the observation of the Divisional Court in Barnes v Seabrook ("Barnes") [2010] EWHC 1849 (Admin):
"47…it is important not to impose any improper pressure on a witness who may later be called to give oral evidence. In particular, if the alleged contemnor is to be called as a witness, an application under Rule 32.24 should not be made, and if made should not be entertained by the Court, until he is finished giving his evidence".
Mr Solomon also relied upon the observations of the Court of Appeal at KJM Superbikes v Hinton (Practice Note) [2008] EWCA Civ 1280 ("KJM Superbikes") at paragraphs [18] – [19]. This case, and that of Barnes, concerned the exercise of the Court's discretion to allow or refuse the bringing of contempt proceedings under CPR 32.14 and CPR 81.17.
In fact, the law is not quite as black and white as Mr Solomon would have it or as is suggested in Barnes. In KJM Superbikes the Court of Appeal made a number of observations about the exercise of the Court's discretion to grant or refuse permission to pursue contempt proceedings. Lord Justice Moore-Bick observed that cases were bound to differ widely both as to their nature and as to the circumstances of the alleged contempt and that each would have to be considered according to its own facts (ibid paragraph [15]). Further, that an important issue for a Court considering permission was not whether a contempt had been committed but whether proceedings should be brought to establish whether it has or not. In this regard he cited with approval the judgment of Sir Richard Scott VC in Malgar Limited v R E Leach (Engineering) Limited [2000] FSR 393. A further consideration was the obvious need to guard carefully against the risk of allowing vindictive litigants to use committal proceedings to harass persons against whom they had a grievance (whether justified or not) and the Court should be astute to ensure that the applicant "…was liable to be directly affected" by the underlying complaint (ibid. paragraph [17]). Lord Justice Moore-Bick also emphasised the need to further the overriding objective and not permit applications for committal to become satellite litigation disrupting the progress of the substantive proceedings (ibid. paragraph [18]). Finally, in paragraph [19] he stated that in some cases it was possible to deal with an application at an early stage especially if the alleged contempt related to a matter which had passed and had no continuing relevance to the proceedings. It was in this context that he made the observation in Barnes, relied upon by Mr Solomon, that it was important not to impose improper pressure upon witnesses who may be later called to give oral evidence.
All in all the position is clear: the Court should be wary of entertaining applications for committal if this would risk impacting adversely upon the fairness of future proceedings, and in particular upon the ability of the alleged contemnor to give oral evidence at a future point in time. However, this was not an immutable rule and a Court would have to weigh, carefully, all the relevant surrounding circumstances.
In the present case I have decided that it is appropriate to address the question of contempt now. There are a number of reasons for this conclusion.
First, and most importantly, the facts and matters set out in the Defendant's second affidavit are not materially in dispute. It has not been necessary for Mr Solomon to call his client in order to give evidence (though he was prepared to give evidence), or for him to be cross-examined. Mr Rivalland, for the Claimant, did not wish to go beyond the four corners of the second affidavit and was prepared to treat it as correct. There is no risk, therefore, of the Defendant giving evidence in the course of the committal proceedings which may conflict with or prejudice the position the Defendant may be entitled to take in future proceedings. Indeed, as the Claimant points out, the claim against the Second and Third Defendants has been compromised so the only extant issues relate to the conduct of the Defendant and as to these they are limited in scope given the admissions and might now relate to loss issues only. The basis upon which I propose to proceed is exclusively upon the matters which are admitted as being in contempt of Court and which flow out of the second affidavit. In addressing the issue now and in this way I can identify no sensible risk to the ability of the Defendant to give evidence later or to the fairness of future proceedings.
Secondly, I am aware that various attempts at mediation have already occurred and this type of case is, classically, the sort of case that does settle prior to trial. If I were to adjourn this application until after the trial but it were then to settle before trial then the net effect might be either that the application disappears out of sight (which would not serve the due administration of justice because there is a public interest in the Courts being seised of and ruling upon the propriety of the conduct of parties) or that it is pursued at a point in time long into the future when the amount of time which has elapsed between the contempt and the punishment is very substantial and during which period the threat of contempt proceedings will have hung over the Defendant. I do not view this as satisfactory on the facts of this case. In a real sense, viewed from the perspective of the public interest, justice delayed may be justice denied.
For all these reasons I propose to address the matter now, and not adjourn the application pending trial.
(c) Whether the application is a nullity?
The second matter raised by Mr Solomon, for the Defendant, was that the application was an abuse because it was predicated upon the mixture of violations of Court Orders, failure to act truthfully or honestly in Witness Statements, and failure to act truthfully or honestly in affidavits. Mr Solomon characterised the application as "hybrid". He submitted that in such circumstances the Claimant was bound to obtain the consent of the High Court prior to the bringing of the application and in default thereof the application was a nullity. Pursuant to CPR 32.24 proceedings for contempt of Court may be brought against a person if he makes, or causes to be made, a false statement in a document verified by a Statement of Truth without an honest belief in its truth. CPR 81, Section 6, contains provisions in relation to committal for making a false Statement of Truth and these include the obligation to obtain the permission of the High Court or the Attorney General before the making of an application for Committal.
CPR 32.15 provides that evidence must be given by affidavit, instead of or in addition to a Witness Statement, if this is required by a Court, or a provision contained in any other rule, a practice direction or in an enactment. There is however no equivalent of CPR 81 in relation to false statements in affidavits. The CPR thus draws a distinction between Witness Statement and affidavit evidence. The notes to the White Book (32.15.1, page 1080 (2015)) state that affidavits must be used "where sworn evidence is required". CPR 32.15.4 states that an affidavit should, if practicable, be in the deponent's own words and should be expressed in the first person and should indicate which of the statements within the affidavit are made from the deponent's own knowledge and which are matters of information and belief and the source for any matters of information or belief.
Pursuant to CPR 81, Section 6, before an application for committal for contempt of Court may be made upon the basis that an alleged contemnor made a false Statement of Truth or disclosure statement, the permission of the Court is required. Indeed this is a necessary pre-condition for the bringing of an application which will be a nullity in the absence thereof. The requirement for permission is set out in CPR 81.17. The obligation to obtain permission is provided for in CPR 81.18. This makes clear, in sub-paragraph [3], that a committal application in relation to a false statement of truth or disclosure statement may be made only with the permission of a Single Judge of the High Court or by the Attorney General. In KJM Superbikes Limited (ibid.) the Court of Appeal explained that as proceedings for contempt of Court were public law proceedings, when considering whether to grant permission the Court would have regard to the public interest alone. When the Court granted permission to a private party, that person was, in effect, being allowed to act in a public rather than a private capacity to pursue the public interest. It was therefore necessary for the Court when addressing permission to consider whether the pursuit of committal proceedings was in the public interest. The pursuit of contempt proceedings in ordinary cases may serve the public interest by drawing the attention of the legal profession, and through it to potential witnesses, to the dangers of making false statements. The Courts were not to treat serious examples of making false evidence as of little importance, otherwise the Courts encouraged witnesses to regard the Statement of Truth as a mere formality. The Court then went on to consider the sorts of considerations that should govern the exercise of discretion to grant or refuse permission.
The distinction between Witness Statements and affidavits was considered in Hydropool Hot Tubs Limited by Arnold J, at paragraphs [58] and [59] who stated as follows:
"58. In my judgment CPR rule 32.14 has no application to an allegation of contempt by knowingly swearing a false affidavit. The purpose of rule 32.14 is to enable proceedings for contempt to be brought in respect of false statements made in a document verified by a statement of truth, such as a statement of case, a disclosure statement or a witness statement. The requirement for such documents to be verified by a statement of truth was a procedural innovation introduced by the CPR. As Sir Richard Scott VC (as he then was) pointed out in Malgar Ltd v R.E. Leach (Engineering) Ltd [2000] FSR 393 at 395-396, a means for policing statements of truth was necessary and that is what rule 32.14 provides. In doing so, the CPR did not make any substantive change in the law of contempt. Whether the making of a false statement in a document verified by a statement of truth amounts to a contempt depends on the general law. He suggested that it would do if, but only if, the maker of the statement knew that it was false and the false statement was likely to interfere with the course of justice.
59. As Scott VC also pointed out, however, knowingly to swear a false affidavit has always rendered the maker liable to be prosecuted for perjury. This is because the affidavit includes a jurat. It is therefore the equivalent of testimony on oath. Although Scott VC did not say so, it has long been the case that knowingly giving false evidence, including swearing a false affidavit, is also a contempt of court: see Arlidge, Eady and Smith on Contempt (3rd ed) at 10-159 to 10-161. Nowadays it is unusual for false evidence to be the subject of contempt proceedings rather than a prosecution for perjury, but in principle the sanctions for contempt remain available in an appropriate case".
The distinction is thus one based largely upon procedural history. It is noteworthy that the judgment of the Vice Chancellor in Malgar cited in this context approvingly by Arnold J was also cited with approval by Lord Justice Moore-Bick in KJM Superbikes (ibid.): see paragraph [23] above. It thus follows that there is a clear distinction to be drawn between the position in relation to an application founded upon an affidavit, and that founded upon a Witness Statement. I am bound to say that I find the distinction drawn hard to sustain. In so far as it is considered that a false affidavit should be treated more seriously than a false witness statement (hence doing away with the need to obtain permission) this seems anachronistic. Further, it assumes that the law attributes less weight and significance to a formal Statement of Truth than to a formal affidavit, which in my view is not a reflection of modern litigation practice: see the observations of the President of the Queen's Bench Division in Adil Akram & Amir Akram v SSHD [2015] EWHC 1359 (Admin) at paragraphs [24] – [27]. Nonetheless, a distinction does exist between the two which is inherent in the procedural rules governing contempt proceedings and it is one which in this case advantages the Claimant.
As I have set out above, the Claimant has framed this application for committal upon the basis of false statements made in an affidavit. References to prior Orders, Witness Statements and the like are merely context and are not relied upon to support the application. As such this is not a case where permission is required.
Mr Solomon for the Defendant relied upon the ruling of the House of Lords in Seal v Chief Constable of the South West of the Police [2007] UKHL 31; [2007] 1 WLR 1910. This case concerned the scope of Section 139 of the Mental Health Act 1993. It concerned proceedings brought by Mr Seal against the Defendant for false detention. Pursuant to Section 139 proceedings may not be brought by a person subject to the MHA 1993 without the consent of the High Court or the DPP. In the case consent had not been obtained. The Chief Constable applied to strike out the proceedings upon the basis that since they had not been brought with consent they were thereby a nullity. Mr Seal contended that lack of permission, even when required as a precondition, was an irregularity which could be rectified and was not a fatal flaw invalidating the proceedings. The House of Lords, by a majority, held that the precondition was mandatory and the proceedings pursued in breach thereof were a nullity. The majority arrived at this conclusion by reference to a close analysis of the statutory language and history. In my view, this judgment has no impact upon the present proceedings. In so far as it is relevant it is to the effect that I must simply construe the rules for what they are worth and apply then the conclusion arrived at. The present application for committal falls outwith the scope of CPR 81. According to the judgment in Hydropool (ibid.) there is a clear historical and jurisprudential basis for the Courts differentiating between Witness Statements and affidavits. If this may seem to be an anachronism it is nevertheless good law until the rules are changed. This is not a case of a hybrid application in which the Claimant relied upon affidavit and other evidence falling within the scope of CPR 81. In this case the claim rests exclusively upon affidavit evidence. I express no view as to the position that would pertain were this matter to be hybrid with part resting upon the contents of an affidavit and another part resting upon a Witness Statement. I thus conclude that there is no requirement upon the Claimant to seek and obtain leave before bringing these proceedings.
(d) The appropriate sanction in this case
I turn now to the substantive issue before me. The Court has power by virtue of its inherent jurisdiction and under the Contempt of Court Act 1981 to punish the Defendant for his admitted contempt of Court. I have the power to impose a sentence of custody for up to 2 years and/or a fine. I also have the power to suspend any custodial sentence that I consider it appropriate to impose. The Claimant submits that I should impose a custodial sentence of some months' duration.
In the text below, I have sought to measure the Defendant's conduct by reference to the sorts of factors which Courts in other case have considered relevant. There is no fixed list of relevant criteria and the sorts of facts and matters taken into consideration reflects typical considerations which might be seen as mitigating or aggravating factors in criminal sentencing e.g. degree of personal culpability, level of harm, whether there has been an admission and efforts already taken to purge the contempt and show contrition, etc. Guidance in this regard may be found (inter alia) in: JSC Banks v Solodchenko [2010] EWHC 2843 (Ch) at paragraphs [18] and [19]; and Barnes v Seabrook [2010] EWHC 1849 at [47]. In this case I have paid particular regard to: (i) the intrinsic seriousness of the contempt and whether it passes the custody threshold; (ii) whether there has been an early and comprehensive admission and purging of the contempt and the credit to be given for this; (iii) personal circumstances including previous good character; (iv) whether a custodial sentence would serve the purpose of securing compliance with the order breached; and (v), the existence of prejudice to the applicant. Given that these proceedings are penal (quasi-criminal) and in principle a punishment of custody might be imposed it is appropriate to adopt an approach which has regard to the sorts of facts and matters that would be relevant in a criminal sentencing exercise.
I start by considering the intrinsic severity of the contempt. In the present case the Defendant has admitted proffering knowingly false evidence in an affidavit. This was part of the perpetuation of a series of false and misleading statements designed to subvert the due administration of justice. My necessary starting point is that this was a serious infringement committed deliberately and with knowledge, with the specific intent of undermining judicial proceedings. A Court would be remiss if it did not conclude that this is the sort of conduct where in many instances the custody threshold will prima facie be passed. In my view this particular case hovers at or fractionally beyond the custody threshold. I can contemplate many more serious infringements; but that does not undermine the seriousness of the contempt of Court which is before the Court. My starting point, therefore, is that in principle a custodial sentence would prima facie be appropriate.
I turn now to consider mitigation. There are 4 main points to make.
First, the Defendant is to be given substantial credit for: admitting the contempt; the early stage at which the admission occurred; and the steps taken to purge the contempt and prevent harm. The affidavit that he swore on 15th February 2015 is, as I have recorded above, detailed and comprehensive. It amounts to 43 paragraphs. It deals comprehensively with the unlawful retention of confidential information. It deals both with the use and disclosure of confidential information and makes a series of admissions as to use. It explains the steps that the Defendant took to purge his contempt once he was aware of the Claimant's application against him. He provides commentary upon each of the statements made in his earlier affidavit identifying which was true and which were not true and why and how. He apologises unreservedly and wholeheartedly to the Court and to the Claimant for his earlier provision of false evidence and for the consequential breach of the Court Order. The accuracy of the preponderant part of the affidavit is not seriously in challenge. There are some areas of disagreement but, in the light of my consideration of the summary judgment application, I accept that where there is disagreement there may be sufficient basis for a non-admission or a denial. A contemnor is not bound to roll over and play dead in litigation simply to convey a message of good faith to the court dealing with the contempt where there is a proper basis for raising a defence. In the circumstances, in my judgment, I am bound to give substantial credit to the Claimant. This affidavit represented an early facing up to the realities of the situation that he faced.
Secondly, I attach some weight to personal circumstances and good character. As to the explanations given by the Defendant for his conduct, these include personal pressures at home and at work. They do not, in any way, justify the conduct. Nonetheless, I give some modest weight to the facts and matters raised. Equally, I give some modest weight to the fact that the Defendant has no previous convictions. I give only "modest" weight to this factor because, unlike in criminal proceedings, it is common for defendants whose conduct in civil proceedings is said to amount to a contempt, to have no previous convictions. Nonetheless, because the Defendant faces the risk of prison, I am entitled to attach some relevance to the fact that he is a man of previous good character.
Thirdly, I bear in mind the purpose of punishment in cases such as this. The purpose behind the imposition of sanction is twofold. First, it is to demonstrate the Court's displeasure and condemnation of the contemnor's conduct. Secondly, it is to secure (coercive) compliance with an Order in the future. This of course assumes that there has yet been no or no sufficient compliance. In this case the purpose of coercion has no continuing relevance given the history of compliance. A term of imprisonment may of course remain appropriate even though it exerts no coercive effect and the contempt has already largely been purged, where it nonetheless remains the proper course of action to take to reflect the severity of the conduct in question. However, in the absence of a coercive effect a punishment short of custody may be more appropriate. In the present case as observed there is no need to punish through a custodial sentence in order to secure compliance.
Fourthly, I also take into account whether the Claimant has been prejudiced by virtue of the contempt and whether the prejudice is capable of remedy. The Defendant purged his contempt in January 2015 and has set out steps taken to avoid further dissemination of the Claimant's information. In large measure it appears that the harm consequential upon the breach has been limited. It is possible that to some degree the opening of the stable door might have allowed the horse to bolt on a permanent and irretrievable basis but the extent that this is so is very far from clear and no evidence has been placed before me to suggest that there is material outstanding prejudice. As already recorded the Claimant has settled (or is in the course of settling) with the Second and Third Defendants and, as I understand matters, this settlement addresses and prevents unauthorised present and future use. The imposition of a custodial sentence would not therefore serve to reflect the infliction of serious or grave continuing or irreparable harm to the Claimant.
In conclusion, I have come to the view that this is the sort of case which, in principle, is capable of passing the custody threshold. In considering whether to impose a custodial or a lesser sentence I have taken account of the mitigating factors set out above and I have concluded that considering all factors in the round a custodial sentence is unnecessary and would be disproportionate. I therefore conclude that a financial sanction is the appropriate punishment to impose. As to this, I have been shown a statement of means of the Defendant. It is clear that his present and potential liabilities exceed his assets. Accordingly, a relatively modest fine is in my judgment sufficient to mark the displeasure of the Court. I impose a fine of £1,000 to be paid within 28 days.
D. Costs
There remains a series of costs issues to resolve.
First, there are the costs of the initial applications made by the Claimant for interim relief which were compromised upon the basis of consent orders. It is normal practice in cases of this nature for the Defendant to give undertakings to resolve the issue without the need for a contested hearing upon the application for relief. This is upon the basis that the Defendant's position is protected by a cross-undertaking in damages and the Court will order that costs are to be resolved at trial when the merits are finally determined. In the present case the consent orders stipulated that costs were reserved. I am now asked by the Claimant to make an order for the costs of those applications prior to trial upon the basis that the Defendant's conduct in lying on affidavit and in view of the admissions should be reflected by a costs order now. I am not prepared to depart from the normal practice. The costs should be resolved at trial. The conduct giving rise to the contempt has been addressed separately and the Defendant has been sanctioned accordingly. There is no basis for imposing a form of double costs penalty burden upon the Defendant by taking into account his contempt in making a costs order in relation to these interim applications unless it can be said that the conduct amounting to the contempt in a real sense added to the costs of the applications for interim relief. As to this the conduct amounting to contempt post dated the consent orders in question and did not add to or cause any of the costs incurred in those proceedings. Indeed, in my view, the Claimant would have brought the application for interim relief even had the Defendant come clean much earlier. In such a case once proceedings had commenced the Defendant could hardly have resisted interim relief based upon his own admissions of wrong doing; I do not see such an application being contested by the Defendant upon the basis that since he had admitted his wrongdoing there was no longer a basis for an injunction. In such a case a court would have granted the relief or at least extracted undertakings from the Defendant. In all likelihood the parties would have entered into a consent agreement in terms not dissimilar to those actually agreed. There is another matter I take into account. It is now plain that the Claimant's case has substantially shrunk since the date of the consent orders yet there remains some significant outstanding factual matters to resolve, including as to damages. As such it follows in logic that the Defendant succumbed voluntarily to a consent order containing a deferred costs provision upon a basis that the Claimant now accepts it cannot maintain or which might not be made out at trial. In these circumstances without knowing a very great deal more about the merits it seems to me to be wrong to disturb the existing order.
Secondly, I turn to the costs of the committal proceedings. The Defendant does not oppose costs. The issue is whether I should summarily assess those costs. I have decided against summary assessment. Once again, the Claimant's case on contempt shrunk at the hearing itself in terms of the allegations made to support the application. Their case was also advanced upon the basis that it was appropriate that I should imprison the Defendant. I am in possession of a Schedule of costs; if I had summarily assessed costs I would have considered reducing the percentage to be recovered to take account of the fact that the scope of the application reduced at the last moment and that therefore the Defendant had to address by way of preparation facts and matters that were not being pursued. I consider that on balance the best solution is to give the Claimant its costs of this application on a standard basis but for them to be subject to detailed assessment if not agreed and the modification of the scope of the application can be a matter that would be taken account of during a detailed assessment if it gets to that point. I would reduce the costs by 25%. I will however make an interim payment in favour of the Claimant in the sum of £2,500 to be paid within 56 days.
Thirdly, there is the application for the costs of the summary judgment application. As to these I have granted the Claimant summary judgment upon certain admissions. I have refused summary judgment on certain other issues. Following the initial application the scope of the case has considerably reduced. The Defendant submits that had a proper schedule been advanced at the outset then he would have made formal admissions at that time upon the basis of the admissions already set out in his second affidavit and there would have been no need for this application at all. He submits, through Mr Solomon, that the initial application as drafted was vague and over ambitious and this made it very difficult for him to know how to respond and this is proven by the fact that not only were claims withdrawn but at the resumed hearing the Particulars of Claim was itself sought to be re-drawn by the crossing through of key allegations. He submits that given the admissions made in the second affidavit the sensible course for the Claimant should simply have been to press forward to trial using those admissions without this intermediate excursion into summary judgment territory. In some measure I agree. It is uncertain whether the present application will serve to progress in a meaningful way the present proceedings. Such may be evident only at trial. I will reflect these considerations in my Order but together with the fact that the Claimant has prevailed to some extent by a direction that the Claimant is to be awarded 30% of its costs on a standard basis to be subject to detailed assessment if not agreed.
E. Conclusions
The parties are to draw up an order reflecting the conclusions in this Judgment for submission to me for approval.
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MR JUSTICE POPPLEWELL:
The respondent, Ms Dorries, has been a Member of Parliament for the Mid Bedfordshire Constituency since 2005. On 8 May 2015 she was returned as the member for the constituency in the General Election held on 7 May, having received 32,544 votes. The petitioner, Mr Ireland, was an unsuccessful Parliamentary candidate for the constituency, having received 384 votes.
On 28 May 2015 Mr Ireland presented a petition seeking a determination that Ms Dorries' election was void as a result of conduct during the election campaign, which is alleged to have been contrary to sections 106 and 110 of the Representation of the People Act 1983 ("ROPA"). We are not concerned with the merits of those allegations.
Ms Dorries seeks to have the petition dismissed pursuant to rule 13.1 of the Election Petition Rules 1960 (as amended) ("EPR") on the grounds that it was not served in the prescribed manner within the prescribed time.
On the same day as the petition was presented, 28 May 2015, Mr Ireland applied to Senior Master Fontaine to fix security for costs pursuant to section 136(1) of ROPA and EPR rule 5(1). Master Fontaine fixed the amount of security at £5,000 and that sum was paid into court, as required by section 136(2) of ROPA, on Friday 29 May 2015. The petition was from that time at issue within the meaning of section 137 of ROPA. Pursuant to EPR rule 6 Mr Ireland was required to serve notice of the petition and the nature and amount of the security, together with a copy of the petition, within five days after giving security. By reason of section 119 of ROPA weekends do not count in the computation of the five day period. The last day for service was, therefore, Friday 5 June.
On Tuesday 2 June Mr Ireland's solicitors purported to serve the petition and notice of the amount and nature of the security by a letter sent by first class post to the office address of the Conservative Association in the constituency at St Michael's Close, High Street, Shefford ("the Association address"). On 3 June Mr Ireland's solicitors filed a certificate of service stating that service was effected on 4 June (being two days after posting the documents by first class post). Under rule 6.14 of the Civil Procedure Rules that would be the deemed date of service where service of a claim form is permitted to be made by first class post.
Ms Dorries was at the time conducting her Parliamentary duties in London according to her evidence. Her evidence is that she did not receive those documents until 10 June 2015, although she was aware of the existence and some of the content of the petition before then. She was first aware of the existence of the petition on Monday 1 June when Mr Ireland announced on his Twitter account that it had been issued. On 4 June she was telephoned by a Central Bedfordshire Council Legal Services Officer to be told that they had received a copy of the petition and that it bore the Association address. On the same day she was sent an email from the Guardian newspaper purporting to quote what was said to be the key extract from the petition and asking for her comment. She declined to comment because she had not seen the petition.
After 4 June, when she learnt that the petition had apparently been sent to the Association address, she asked her personal assistant to collect it, but the latter was unable to attend for personal reasons until Monday 8 June when she collected it and sent it by Recorded Delivery to Ms Dorries' office in Westminster. Her evidence is that she opened it on Wednesday 10 June, although in the application notice it is said that she received it on 9 June. It is her evidence that the Association office is a small office staffed by volunteers which, apart from the period of the election campaign when it was used as her headquarters, is usually only open once a week on a Monday morning.
On 10 June 2015 Mr Ireland made an application ex parte to Master Leslie for permission to serve at an alternative place, namely the Association address, pursuant to CPR rule 6.15. The application was supported by a witness statement from Mr Ireland's solicitor, Mr Carter, which asserted, amongst other things, that personal service would be "difficult" because Ms Dorries' Parliamentary and media commitments would have taken her away from her usual place of residence which was in any event unknown by Mr Ireland; that her residential address could not be ascertained within the limited time available from reasonable inquiries; and that the petition was not unlikely to have come to her attention as a result of postal service on the Association address, which it was asserted was manned on a daily basis. There was no evidential basis put forward in that witness statement for the assertion that the office was manned on a daily basis.
In a subsequent witness statement of Mr Ireland himself, he says that he does not accept that the constituency office is open only one morning each week as asserted by Ms Dorries. His grounds for not accepting that are based on an article dating from November 2013 published by The Mirror referring to Ms Dorries saying that her daughter had at that time been employed to provide full-time secretarial support at the constituency office. What was said on that occasion, according to the article, was that the daughter's main place of work was in the constituency and she stayed there for some of each week.
On the same day as the application was made, 10 June, Master Leslie made an order pursuant to CPR rule 6.15(2) that service of the petition and associated documents by first class post at the Association address was good service and that they were deemed to have been served on 4 June 2015.
On 19 June 2015 Mr Ireland issued an application pursuant to EPR rule 9 for directions for the hearing of the petition.
On 25 June 2015 Ms Dorries issued an application to set aside the order of Master Leslie of 10 June.
On 7 July 2015 Ms Dorries issued a further application to dismiss the petition on the grounds that the order of Master Leslie should not have been made and that there had been no timeous service of the petition. The application to set aside Master Leslie's order was referred by him to this court without objection from the parties.
Further evidence was served in the form of a witness statement from each of Ms Dorries and Mr Ireland.
The provisions governing the time and manner of service of an election petition which are relevant in this case are as follows.
Section 121(5) of ROPA provides that:
"The petition shall be served in such manner as may be prescribed."
Section 136(3) of ROPA provides that:
"Within the prescribed time after giving the security the petitioner shall serve on the respondent in the prescribed manner
(a) a notice of the presentation of the petition, and of the amount and nature of the proposed security, and
(b) a copy of the petition."
Section 185 of ROPA defines "prescribed" as meaning "prescribed by rules of court".
Section 182(1) of ROPA provides that:
"The authority having for the time being power to make rules of court for the Senior Courts may make rules for the purposes of Part II and this Part of this Act."
That authority is the Rules Committee which has made a set of rules specifically applicable to election petitions in the form of the EPR.
The EPR include the following rules:
Rule 2.2(4) provides:
"Subject to the provisions of the Act and these Rules, the practice and procedure of the High Court shall apply to a petition under these Rules as if it were an ordinary claim within its jurisdiction, notwithstanding any different practice, principle or rule on which the committees of the House of Commons used to act in dealing with election petitions."
Rule 6 provides:
"(1) Within five days after giving the security the petitioner shall serve on the respondent within the meaning of section 121(2) or section 128(2) of the Act and on the Director of Public Prosecutions a notice of the presentation of the petition, and of the nature and amount of the security which he has given together with a copy of the petition and of the affidavit accompanying any reconnaissance.
(2) Service shall be effected in the manner in which a claim form is served and a certificate of service shall be filed as soon as practicable after service has been effected."
Rule 19 provides:
"(1) Any period of time prescribed by Rules 5, 6 or 7 shall be computed in accordance with section 119 of the Act and shall not be varied by order or otherwise, but save as aforesaid rules 2.8 to 2.11 and 3.1(2)(a) of the Civil Procedure Rules 1998 shall apply to any period of time prescribed by these rules as if it were prescribed by the Civil Procedure Rules."
The relevant Civil Procedure Rules which govern service of a claim form on an individual are rules 6.3(1), 6.9 and 6.15.
CPR Rule 6.3(1) provides:
"A claim form may… be served by any of the following methods –
(a) personal service in accordance with rule 6.5;
(b) first class post…
(c) leaving it at a place specified in rule 6.7, 6.8, 6.9 or 6.10;
(d) fax or other means of electronic communication in accordance with Practice Direction 6A; or
(e) any method authorised by the court under rule 6.15."
CPR Rule 6.9(2) provides that where the method of service is by first class post, or by leaving a document at an address, the relevant place of service is the usual or last known residence of the individual.
CPR Rule 6.9(3) provides that where a claimant has reason to believe that the usual or last known residence of the individual is an address at which the defendant no longer resides, "the claimant must take reasonable steps to ascertain the address of the defendant's current residence…("current address")".
CPR Rule 6.9(4) provides that:
"Where, having taken the reasonable steps required by paragraph (3), the claimant –
(a) ascertains the defendant's current address, the claim form must be served at that address; or
(b) is unable to ascertain the defendant's current address, the claimant must consider whether there is –
(i) an alternative place where; or
(ii) an alternative method by which,
service may be effected."
CPR Rule 6.9(5) provides that:
"If, under paragraph (4)(b), there is such a place where or a method by which service may be effected, the claimant must make an application under rule 6.15."
CPR Rule 6.9(6) provides that:
"Where paragraph (3) applies, the claimant may serve on the defendant's usual or last known address in accordance with the table in paragraph (2) where the claimant –
(a) cannot ascertain the defendant's current residence or place of business; and
(b) cannot ascertain an alternative place or an alternative method under paragraph (4)(b)."
CPR Rule 6.15 provides:
"(1) Where it appears to the court that there is a good reason to authorise service by a method or at a place not otherwise permitted by this Part, the court may make an order permitting service by an alternative method or at an alternative place.
(2) On an application under this rule, the court may order that steps already taken to bring the claim form to the attention of the defendant by an alternative method or at an alternative place is good service."
It is common ground that the Association address was not a usual or last-known place of residence of Ms Dorries. Accordingly, there was only timeous service of the petition, and of the notice of the matters required by ROPA and EPR, if the order of Master Leslie of 10 June 2015 was validly made and is not set aside.
Mr Millar QC, on behalf of Ms Dorries, advances two alternative arguments. First he submits that there is no power to make an order for alternative service of an election petition under CPR rule 6.15. Secondly, and alternatively, he submits that if there is such a power it ought not to be exercised in the circumstances of this case.
Addressing the first submission, which is a jurisdiction question, I start by noting that rule 6.15 provides two different circumstances in which the court may authorise service by an alternative method. Under rule 6.15(1) an application may be made prospectively, before the time for compliance has expired, for the alternative place or method of service to be authorised. Secondly, rule 6.15(2) provides that authorisation may be granted retrospectively to validate purported service at an earlier time, when the application is made after the time for compliance has expired. It is not necessarily the case that the same principles apply to the two different alternatives.
Addressing first the question of whether service by an alternative method is permissible in relation to an election petition where what is sought is a prospective order under rule 6.15(1) I have concluded that such service is permitted by the statutory framework. Sections 121(5) and 136(3) of ROPA require service to be within the prescribed time and in the prescribed manner. The prescribed time and manner mean those prescribed in the rules which provide a hierarchy: see Ahmed v Kennedy [2003] 1 WLR 1820. Rule 6.2 of EPR prescribes that service is to be in the manner in which a claim form is served. CPR rule 6.3 identifies the permitted methods of service for that purpose. CPR rule 6.3(e) specifically provides that alternative service pursuant to an order made under rule 6.15 is a valid and permitted method of service. If such an order is sought and made in advance of the expiry of the five day limit (set out in EPR rule 6.1), so that no question of EPR rule 19 coming into play arises, there is in my view nothing in the statutory framework to prevent such service falling within the range of permitted modes of service which are prescribed.
Mr Millar submitted that what was required by the statutory provisions and by EPR rule 6.2 was "the" manner in which service is made, laying emphasis on the definite article and the word "is". He suggested that as a matter of linguistic analysis against the background of the statutory framework, that indicated that the legislative intent was only that methods of service under CPR rule 6.3 which were methods which a claimant was entitled to avail himself as of right fell within the rubric of a prescribed manner; and that what was therefore covered was a permitted method under any of subparagraphs (a) to (d) of rule 6.3(1), but not alternative service which required an order from the court under rule 6.3(1)(e).
I find myself unable to accept that argument. There is nothing in the language which to my mind dictates that conclusion. The legislative intent which is apparent from the statute and from the rules is that what is to be a permitted method of service under CPR is also to amount to a prescribed manner of service under the statutory framework. That is a result which accords with good sense. The reason for the change in the rules from 1 October 2008 which introduced rule 6.3(1)(e) and the ability under rule 6.15(2) to validate service by an alternative method or at an alternative placed retrospectively was to meet the hardship of cases in which without any fault on the part of a claimant it was impossible to effect service otherwise within the allotted times. That hardship is a hardship which is capable of arising just as much in the case of an election petition as it is in the case of a claim form. Mr Millar submitted that because a returning officer will always know the residential address of a candidate and is obliged to retain that residential address for 21 days, it will always be possible for someone bringing an election petition to have the means to discover the residential address of a candidate so as to be able to avail themselves of the ability to serve as of right under 6.3(1)(b) or (c) by reference to a last-known address. However, I am unpersuaded that there can be no circumstances in which that will not be an option available.
We were referred to Ahmed v Kennedy and Ali v Haques (10 October 2006 unreported), and the cases to which they refer, by way of the background and policy of the statutory framework in relation to election petitions; but to my mind there is nothing in those authorities, which were decided before the relevant change in the rules to which I have referred, which supports Mr Millar's submission on this point.
That then leads to the second aspect of the jurisdictional question, which is whether there is a power to validate retrospectively under rule 6.15(2) when the application has not been made or heard prior to the expiry of the five day period imposed by EPR rule 6. That brings into play questions as to whether granting retrospective validation would cut across EPR rule 19 and in particular the prohibition in that rule on extending periods of time. I prefer for my part to express no view on that question and it is unnecessary to do so for the purposes of this case. That is because I am persuaded that if the power exists under rule 6.15(2) this is not an appropriate case in which that power should be exercised. The application by Mr Ireland to Master Leslie was made without notice. The application to set aside that order has been referred to us. We are not conducting a review, but a reconsideration of the merits of that application de novo on the basis of all the evidence which is now before the court.
The principles to be applied in cases of civil claims have recently been authoritatively identified by the Supreme Court in the case of Abela v Baadarani [2013] 1 WLR 2043. The main principles are these. An order under rule 6.15(2) can only be made if in all the circumstances of the case there is good reason to do so. That involves a value judgment based on an evaluation of a number of different factors. The mere fact that the defendant has learnt of the existence and content of the claim form cannot without more constitute a good reason to make an order under rule 6.15(2), but it is a critical factor. The most important function of service is to ensure that the content of the claim form is brought to the attention of the defendant. Another highly relevant factor is whether the defendant has shown himself unwilling to cooperate with service of proceedings. Another highly relevant factor is whether it is impossible or impracticable to effect service without an order from the court under rule 6.15(2).
The starting point for the exercise of the value judgment in this case is that EPR rules 6 and 19 set out a short period of time for service of the petition which may not be varied by the court. Rule 19 excludes the applicability of rule 3.1(2)(a) to that period of time, which is the general power conferred by the CPR to extend time after the time for compliance with a rule has expired. The time and manner of service are prescribed by the statutory framework in order to provide certainty and impose a speedy process as a matter of public policy. That is because it is undesirable that a challenge to the status of elected representatives should remain unresolved for any substantial period of time. As Simon Brown LJ put it in Ahmed v Kennedy at paragraph 40:"It is undesirable to have someone serving in a public office with doubts surrounding the legitimacy of his election." Or as it was put by Tugendhat and Christopher Clarke JJ in Scarth v Amin [2008] EWHC 2886 at paragraph16: "…the rules requiring timely and proper presentation of a petition are strict because it is in the public interest that there should be early clarity as to who has been elected."
Accordingly, in the context of service of an election petition what amounts to good reasons for the purpose of a retrospective validation of an alternative method of service under CPR rule 6.15(2), if permitted at all, must have an additional degree of cogency and force if it is to justify a derogation from the public interest in speedy certainty which is reflected in EPR rules 6 and 19.
In this case there are a number of factors which militate against there being good reason to treat service by post on the Association address as good service. First, it did not bring the existence or content of the petition to the knowledge of Ms Dorries. It is true that she was by that stage aware of the existence of the petition, but she did not have by reason of that service (or by any other means) complete knowledge of the content of the petition before the expiry of the five days. It is true that as early as 22 April during the course of the election campaign the matters of which complaint is now made were set out in lengthy correspondence from her solicitor, but until she had had sight of the petition she was not to know which of those, if any, were to be the subject matter of the petition which she had learnt had actually been issued. Similarly, the fact that the email from The Guardian set out what was said to be a key part could not have told her with any certainty what the content of the petition was in its entirety.
Secondly, there was no attempt in this case to effect personal service on Ms Dorries. There is no evidence to support a suggestion that she had taken any steps to avoid personal service. She was not asked to make arrangements for personal service to be effected on her or to authorise a solicitor to accept service on her behalf. She was during that week, so far as the evidence shows, carrying out her Parliamentary business as an MP in Westminster. The election petition itself indicates that it was intended to serve the petition on the Association address. It is clear, therefore, that a decision had already been made by that stage not to make any attempt at personal service. The explanation for that decision is contained in paragraph 13 of Mr Carter's witness statement. He says:
"The deadline for observing the petition is observed strictly by the court. Accordingly, the petitioner elected not to serve the petition personally upon the respondent because it was feared she would be difficult to serve using this method owing to her Parliamentary and media commitments which would have taken her away from her usual place of residence which in any event is unknown by the petitioner and made personal service problematical in the limited time available."
That is an inadequate reason for failing to make any attempt at personal service. The suggestion that it might be difficult or problematical is no reason for failing to attempt to effect personal service. There are grounds for thinking that it would have been perfectly possible to effect personal service. Ms Dorries says that she would have been easy to serve in person at her office address at Portcullis House or by her being paged at the Palace of Westminster central lobby. There is a dispute as to whether that would have amounted to a contempt of Parliament in the absence of leave of the House, which would normally be given by the Speaker or prior to the election of the Speaker could be given by the clerk to the House of Commons. Leave could have been sought and there is force in the submission made on behalf of Ms Dorries that it would have been politically difficult if not impossible for an MP to refuse personal service of an election petition challenging his or her election after a request had been made to the Parliamentary authorities or after a request had been made to the Returning Officer.
Thirdly, there has been no sufficient attempt to discover Ms Dorries' residential address so as to seek to effect valid postal service. There is a conflict in the evidence as to the extent to which Mr Ireland knew of an address within the constituency at which Ms Dorries says she is resident and the extent to which she is (or was at the relevant time) resident there. We assume for the purposes of this application that Mr Ireland did not know of her residential address. Nevertheless, it appears that there was simply no attempt at any stage to find out that address. It is significant that the allegations in the petition had been raised in correspondence by Mr Ireland's solicitors during the course of the election campaign on 22 and 23 April 2015 and the skeleton argument served on behalf of Mr Ireland on this application positively asserts that it was clear from that moment that he intended to pursue those allegations by way of a claim after the election. Mr Ireland and his legal advisors therefore had a period of at least some six weeks within which to make inquiries as to her place of residence. It appears that no inquiries were made.
Fourth, no attempt appears to have been made to use other methods to bring the existence and content of the petition to the knowledge of Ms Dorries. Mr Ireland has exhibited to his witness statement printouts from the websites of the Conservative Association and the UK Parliament, each of which provide readily available public information with contact details for Ms Dorries. The Conservative Association site gives by way of address the Association address, but it also includes as a means of contacting her a telephone number which is obviously a London number beginning 0207 and a website through which at the very least inquiries might be made. The UK Parliament website provides an email address which appears to be a personal address on the parliament.uk domain. Steps could have been taken to use those channels first to seek to discover her whereabouts in order to effect personal service; secondly to make inquiries about her place of residence and, thirdly, to send copies of the petition so as to take all steps which were reasonably available to ensure that the content of the petition came to her attention.
Fifth, there has been no explanation provided for the delay in seeking an order under CPR rule 6.15(2) or for making that application without notice. Mr Ireland was advised by legal advisors who must be taken to have been aware of the statutory framework and the applicable procedural provisions. If service by an alternative method under rule 6.15 was to be the method which was to be relied on, then that must have been apparent to those advising Mr Ireland from the moment that the petition was presented; indeed, it may well have been apparent to them from a much earlier stage at which a decision was taken that a petition would be presented. There is, so far as the evidence discloses, simply no reason why an application could not have been made on notice within the five days permitted by EPR rule 6. Applications under the statutory framework are given priority and are regularly dealt with swiftly and expeditiously in order to comply with the tight statutory timetable.
Lastly, the sixth factor is that there has been no failure by Ms Dorries in this case to cooperate in service being effected. She has not taken any steps to evade or frustrate personal service or postal service at her residential address.
Mr Millar submitted on behalf of Mr Ireland that there need to be taken into account in making the value judgment on the application pursuant to rule 6.15(2), the rights of the petitioner under Article 3 of Protocol I; and in particular that although the desideratum of speedy certainty is a legitimate aim of the statutory framework, nevertheless to refuse to exercise the power under 6.15(2) retrospectively to validate service in the circumstances of this case would not be a necessary or proportionate way of furthering that aim. I am unable to accept that submission. All the factors which I have identified suggest that there was open to Mr Ireland in this case ample reasonable opportunity to achieve service without having to apply after the expiry of the period for retrospective validation.
In those circumstances I would for my part set aside the order of Master Leslie, declare that the petition is a nullity and order that it be dismissed.
MR JUSTICE BAKER:
I agree.
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Mr Justice Warby :
Introduction
This is an application for permission to seek the committal of the Respondent to prison for contempt of court by telling lies in witness statements.
The witness statements alleged to contain the lies were made by the Respondent in support of a claim by him for an injunction to restrain the misuse, by disclosure, of private information about sexual activities. That claim ('the Privacy Action') was successful. In order to protect the information which the court has concluded should be kept private I have taken the same course as the court adopted in the Privacy Action: I have heard the application in private, with reporting restrictions; and I have made orders for the parties' identities to be withheld, and for anonymisation by the use of the three letter pseudonyms. Those pseudonyms are not the same as in the Privacy Action.
This judgment is given in public, as were my reasons for sitting in private and making the orders I have just described.
For the reasons given below, I have concluded that this is a case in which it would not be in the public interest to grant permission for the pursuit of an application to commit.
In giving my reasons for reaching that conclusion it is necessary to avoid going into too much detail, because it is necessary to avoid identifying the parties, and this means I must take into account what has been made public in judgments of the court in the Privacy Action, and in the course of other related proceedings involving both parties ('the Other Proceedings').
The legal context
The court's permission is required if anyone other than the Attorney General wishes to seek committal for making a false statement of truth: CPR 81.18(1). When an application is made by someone other than the Attorney General, CPR 81.14(6) and PD81 5.3 give the court options as to how to proceed. The Court may direct that the matter be referred to the Attorney General with a request to consider whether to bring contempt proceedings: CPR 81.18(5) and PD81 5.3(3). Alternatively, the court may grant permission and give such other directions as it thinks fit, including transferring the proceedings to another court or directing that it be listed for hearing before a single judge or a Divisional Court: CPR 81.14(6) and PD81 5.3(1) and (2). Alternatively, the court may refuse permission, or give directions before deciding how to dispose of the application.
These powers must be exercised in accordance with the overriding objective in CPR 1. The Part 81 Practice Direction contains a reminder of this, addressed to litigants, when it states at 5.7 that 'A person applying to commence such proceedings should consider whether the incident complained of does amount to contempt of court and whether the proceedings would further the overriding objective in Part 1.' The authorities on the principles to be applied in deciding whether to grant permission reinforce this message.
There is no dispute between Counsel as to those principles, which can conveniently be drawn from passages in the decisions of Cox J in Kirk v Walton [2008] EWHC 1780 (QB), [2009] 1 All ER 257, the Court of Appeal in KJM Superbikes Ltd v Anthony James Hinton [2008] EWCA Civ 1280, the Divisional Court in Barnes (t/a Pool Motors) v Seabrook [2010] EWHC 1849 (Admin), and the Court of Appeal in Makdessi v Cavendish Square Holdings BV [2012] EWCA Civ 1540.
In Kirk v Walton, in a passage cited with approval in both KJM and Barnes, Cox J said this at [29]:
"I approach the present case, therefore, on the basis that the discretion to grant permission should be exercised with great caution; that there must be a strong prima facie case shown against the Claimant, but that I should be careful not to stray at this stage into the merits of the case; that I should consider whether the public interest requires the committal proceedings to be brought; and that such proceedings must be proportionate and in accordance with the overriding objective."
In KJM Superbikes at [6] and [9] the Court of Appeal made clear that committal proceedings are public law proceedings, and that the decision whether to grant or withhold permission must be governed by an assessment of the public interest.
In Barnes Hooper LJ cited extensively from KJM Superbikes and at [41] distilled the principles to be drawn from the decision in that case as follows:
"(1) A person who makes a statement verified with a statement of truth or a false disclosure statement is only guilty of contempt if the statement is false and the person knew it to be so when he made it.
(2) It must be in the public interest for proceedings to be brought. In deciding whether it is the public interest, the following factors are relevant:
a) The case against the alleged contemnor must be a strong case (there is an obvious need to guard carefully against the risk of allowing vindictive litigants to use such proceedings to harass persons against whom they have a grievance);
b) The false statements must have been significant in the proceedings;
c) The court should ask itself whether the alleged contemnor understood the likely effect of the statement and the use to which it would be put in the proceedings;
d) "[T]he pursuit of contempt proceedings in ordinary cases may have a significant effect by drawing the attention of the legal profession, and through it that of potential witnesses, to the dangers of making false statements. If the courts are seen to treat serious examples of false evidence as of little importance, they run the risk of encouraging witnesses to regard the statement of truth as a mere formality."
(3) The court must give reasons but be careful to avoid prejudicing the outcome of the substantive proceedings;
(4) Only limited weight should be attached to the likely penalty;
(5) A failure to warn the alleged contemnor at the earliest opportunity of the fact that he may have committed a contempt is a matter that the court may take into account."
In Makdessi the Judge's reliance on this statement of principle was not criticised by either side, or the Court of Appeal. At [81] Christopher Clarke LJ added this to the principle identified by Hooper LJ at (ii)(d):
"As the judge rightly said, citing the approval by the Supreme Court in Fairclough Homes Ltd v Summers [2012] UKSC 26 of the words of Moses LJ in South Wales Fire and Rescue Service v Smith [2011] EWHC 1179 (Admin), the discouragement of the making of false statements by litigants by way of false statements of truth is in the public interest both because of their effect on those involved in litigation and their effect upon our system of justice, which depends above all upon honesty."
The rules of procedure require the evidence relied on in support of an application for permission to bring committal proceedings to be contained in an affidavit: CPR 81.14(1)(a). If permission is granted and proceedings for committal are brought, the evidence in support of or in opposition to the application must be given by affidavit: PR81 14.1.
The Applicant's case
Two witness statements made by the Respondent are under attack. Both were made in 2012. The first was the initial witness statement in support of an application for an urgent interim injunction. The second was made in reply to evidence filed by the present Applicant in answer to the claim.
In compliance with the procedural requirements of Part 81 and directions of the court the Applicant has prepared and served a "Schedule of false statements" and an Affidavit in support of his application.
The Schedule contains three columns. These (1) list nine statements contained in the Respondent's two witness statements, quoting their terms, and in relation to each statement, state (2) why it is said to be false, and (3) the grounds on which the Applicant contends that the Respondent knew it to be false.
The Affidavit contains evidence which, if true, supports points (2) and (3) in respect of each of the nine statements, subject to a point I shall come to. The Affidavit has 12 exhibits. These consist of copies of the following: a witness statement and exhibits made by a woman whom I shall call 'AMS'; correspondence, principally text messages, passing between the Applicant and Respondent, AMS and another woman, whom I shall call 'KGX'; a bank statement; the Applicant's diary; and some photographs.
It is fair to say that although the Schedule identifies nine statements that are alleged to be false, the true number is on analysis rather more than that. This is because some of the listed statements are alleged to be false in two or more respects. However, on analysis, and when regard is had to the content of the Applicant's affidavit, the core allegations of falsehood in respect of which there is supporting Affidavit evidence are relatively few, and clear enough.
The principal allegations are (1) that on a number of occasions the Respondent had threesome or foursome sex with the Applicant and one or more of AMS and KGX; and that he made statements inconsistent with these facts in his witness statements which were false, and known by him to be false. The Affidavit contains some general allegations of this kind, but identifies five specific occasions in 2008 and 2009, stating where the events are said to have occurred in each instance. It is further alleged that the Respondent knowingly made false statements about (2) the true nature of some of the text messages relied on by the Applicant, which the Respondent described in his statement as 'banter' or as sent by him in the name of KGX; and (3) the frequency of his meetings with the Applicant. The allegedly false and dishonest statements are contained in paragraphs 16, 17 and 34 of the Respondent's first witness statement and paragraphs 27-32 of his second statement in the Privacy Action.
The Schedule also contains an allegation of drug misuse, but the Affidavit contains nothing to support this. Mr Crystal, who has appeared pro bono for the Applicant, has not placed any reliance on that point. Nor has he placed weight on the Applicant's complaint that the frequency of his meetings with the Respondent was misrepresented. Mr Crystal focuses, rather, on points (1) and (2), submitting that at the heart of this application is Applicant's contention that the Respondent 'misportrayed his character and concealed his sexual misdeeds' in his witness statements. The Respondent owed a duty to make full and frank disclosure, which was particularly important due to the cause of action relied on, and the fact that he sought and obtained an anonymity order.
Mr Crystal makes the following submissions in support of the grant of permission:
(1) there is a strong prima facie case against the Respondent in the light of the evidence served by the Applicant;
(2) the false statements may have been significant, because interim and possibly final relief was granted, amongst other things, on the basis of the character misportrayal and concealment of sexual misdeeds; the issue to be determined on the committal application would be, he submits, 'Is the Respondent a man of virtue or a Machiavellian character?'
(3) no evidence has been served either denying the Applicant's allegations, or admitting and apologising for them; there is no explanation from him, which should count against him;
(4) there is a public interest in establishing which of the parties has lied and misled the court, as one of them must have done; in this context Mr Crystal relies on the observations of Clarke LJ in Makdessi (above);
Mr Crystal illustrates his submission that the case against the Respondent has prima facie merit by drawing attention to one of the alleged falsehoods. In his first witness statement the Respondent confessed to infidelity to his wife with one of two women whom he says were introduced to him by the Applicant, and whom he says he 'quickly realised were prostitutes'. The witness statement claims this was an isolated instance. In his second witness statement the Respondent identified the woman in question as AMS. He confirmed that he remained in contact with her, and that he had subsequently sent her a cheque for £3,000. He did not say she was a prostitute.
The Applicant's case is that in truth the Respondent had had sex with AMS before the occasion he mentions and had sex with her later, on numerous occasions. His second statement was mendacious as well as the first. The Applicant contends that the £3,000 was a payment referable to this continuing relationship. The documents relied on contain material that on its face appears to corroborate this. AMS gave evidence in the Other Proceedings, where she was found to be a credible witness who had more than one sexual encounter with the Respondent. The statement of AMS exhibited to the Affidavit is a version of the statement she made in the Other Proceedings.
Mr Crystal adds a subsidiary submission: that there are also outstanding costs issues in the Privacy Action; in deciding what order (if any) to make the court has to have regard to the conduct of all the parties: CPR 44.3 (4) (a) and 44.3 (5); the court will be unable to exercise its discretion on costs fairly without determining these issues. No great importance is attributed to this point, however, and Mr Crystal accepted that the findings in the Other Proceedings might be enough to resolve this issue.
On instructions Mr Crystal tells me that his client does not wish to be the only one found to be a liar.
Submissions for the Respondent
As noted by Mr Crystal, no evidence has been submitted by or on behalf of the Respondent. Mr Nicklin QC points out, however, that the allegations that are now made by the Applicant were first put forward by him in the Privacy Action, as long ago as March 2012. They were replied to by the Respondent in a witness statement at that time. Although the Applicant has since said that the Respondent's reply was mendacious, the Respondent's position has been made clear. It is false and unfair, submits Mr Nicklin, to suggest that the allegations have not been answered by the Respondent.
Mr Nicklin makes three main submissions on the Respondent's behalf in support of his contention that permission should be refused:
(1) The Applicant does not have a strong prima facie case.
(2) Committal proceedings would not be consistent with the overriding objective.
(3) These proceedings are abusive and contrary to the public interest.
In support of these submissions the following points are made:-
(1) The only person who has made the necessary Affidavit in this application is the Applicant. His credibility was destroyed in the Other Proceedings, in which he was found to be a blackmailer and a dishonest witness. He should be treated as a liar, whose evidence could not suffice to prove the truth of the allegations. Mr Nicklin has taken me though the key passages of the judgment in the Other Proceedings, which provide ample support for his submission that the Applicant was found after a thorough evidential examination to have acted in a thoroughly dishonest way, both before and during the proceedings.
(2) There is no Affidavit from AMS. On its face, the witness statement of AMS which is exhibited to the Applicant's Affidavit and dated November 2014 appears suspect. It is a cut and paste, and the signatures do not appear to match. In the absence of an Affidavit freely and voluntarily made by AMS the court could not conclude that the Applicant has presented a strong prima facie case.
(3) In any event, the dispute of fact would be over a matter that was not material to the resolution of the proceedings in which the alleged false statement was made. In support of this submission Mr Nicklin refers to passages in a judgment in the Privacy Action, which clearly do support the view that judicial knowledge that the statements were false would not have altered the outcome.
(4) Committal proceedings, if brought, would be satellite litigation requiring the resolution of disputes of primary fact that have not yet been determined. The Court would have to try the factual issues from scratch, which would threaten to occupy the time of the Court for longer than the Privacy Claim would have taken to try. This would be wholly disproportionate.
(5) The Privacy Action and the Other Proceedings have already imposed a heavy burden on the Respondent, who has been thoroughly vindicated in both cases. The Other Proceedings were lengthy. At their conclusion, costs orders were made in favour of the Respondent and others against the Applicant in very large sums, none of which has been paid. Enough is enough.
(6) The present application is manifestly not motivated by considerations of public interest. It could have been launched long ago, as there are no new facts. The fact that it was only launched at this late stage should lead the court to infer that it is a vindictive attempt at a last throw of the dice by a disgruntled litigant who has lost every other issue between the parties. 'The Applicant is the paradigm example of a vindictive litigant wishing to use contempt proceedings to harass persons against whom they have a grievance.'
(7) If proceedings were to go ahead and the Respondent was found guilty, the procedural rules would require him to be named (CPR 81.28 and the Practice Guidance [2013] 1 WLR 1316 and The Applicant, by contrast, retains and would continue to retain anonymity, in order to protect the Respondent's privacy. That would be grossly unfair.
Mr Nicklin submits that if I am not satisfied that permission should be refused I should refer the matter to the Attorney General for consideration, because it would be inappropriate to allow the Applicant to be in control of committal proceedings, given the history between the parties and the findings in the Other Proceedings.
Discussion and conclusions
There is no general rule as to when committal proceedings begun by a private party should be referred by the court to the Attorney General: KJM Superbikes at [15]. I do not think this is a case where I should duck the responsibility of assessing the balance of public interest in such proceedings being brought. The matter is before me, at some expense, and I am in a position to reach a conclusion. The Applicant has offered, through Mr Crystal, to pursue committal only through solicitors and Counsel. I am satisfied that I could grant permission on such a condition. A condition of that kind would meet the integrity and independence concerns raised by Mr Nicklin, in which I can see some merit.
The fact that committal proceedings would be 'satellite litigation' is not of itself particularly persuasive. All proceedings of this kind are in one sense 'satellite litigation'; they are necessarily collateral to some other proceeding, and are not concerned with the resolution of civil rights or obligations between parties.
Concerns as to proportionality could be catered for to some extent by cutting down the range of allegations of falsehood in respect of which permission to proceed is granted. I would not have allowed items 2 and 4 in the Schedule to go ahead, as they are too generalised and vague. Nor would I have allowed the drugs issue to go forward, in the absence of any evidential support in the Affidavit. The Affidavit evidence and exhibits could in principle be cut down to produce a more concise and precise set of allegations, focusing exclusively on the matters I have identified.
I am highly conscious of the strength of the public interest in holding to account those who make false statements in their evidence to the court, and the high importance of upholding that public interest in relation to privacy proceedings in particular.
It is relevant to the public interest assessment to consider how important the matters were on which a party is alleged to have lied to the court. They must be significant. A judgment in the Privacy Action indicates that in this case the alleged lies would have made no difference. But that cannot be the test. A party accused of telling lies to a court in a witness statement cannot expect the court too readily to accept that the lies were not material, and on that ground refuse permission to seek committal. The court is bound to ask why, if the evidence was not material, was the evidence given at all? In this case, as Mr Nicklin accepts, the Respondent owed a duty of full and frank disclosure. That requires all matters which could be considered material to be disclosed. That, on the Respondent's case, must be why he said what he did. The materiality point has some weight but not a great deal.
Ultimately, however, I have arrived at the firm conclusion that the committal proceedings proposed by this Applicant would not be in the public interest, for these reasons:
(1) Although the Applicant has in my judgment a prima facie case on the evidence as it stands, he does not have a strong prima facie case. There is a very real prospect that the evidence would be held to fall short of proving the Applicant's case to the criminal standard.
(2) Assuming that an Affidavit from AMS was obtained, that the investigation was limited in the way I have described, and conducted with legal representation on both sides and firm case management, I still consider that contested committal proceedings, if they were to be fair to the Respondent, would be likely to last as much as two days. They would, as both sides have submitted, require findings of fact on matters which have not been tried before. Credibility would be a key factor. It would be hard to confine cross-examination on credit, whilst being fair to the Respondent.
(3) It is questionable whether the findings in the Other Proceedings would be admissible at all in the light of Hollington v F Hewthorn & Co Ltd [1943] KB 587. If they were, there would be rich potential for debate about their impact. The nature of the inquiry was different. I think Mr Crystal was right to accept that the findings in the Other Proceedings would not be conclusive, even if admissible, against his client. For one thing the standard of proof is higher in contempt.
(4) The fresh factual investigation that would be necessary would, it presently appears, be undertaken at the expense of the Respondent, win or lose. The Applicant has already caused the Respondent to incur huge irrecoverable expense in preventing the Applicant from successfully blackmailing him, and in fighting the Applicant's mendacious claims in the Other Proceedings. The public resources consumed would also be significant.
(5) There are reasonable grounds to believe that the Applicant's motives are vindictive. He certainly cannot gain materially from committal, though he can cause the Respondent loss by bringing proceedings for that purpose.
(6) The Applicant's stated aim, of evening up the scales as between him and the Respondent, is a private aim, and not a public interest purpose. Nor does it seem to me to be justified anyway. The Applicant has anonymity, so the findings against him are not generally known. For the reasons given by Mr Nicklin, I am not persuaded that committal proceedings would necessarily leave the scales in even balance. It is possible that the one-sided outcome Mr Nicklin predicts might come about, with the Respondent being named and shamed publicly whilst the Applicant retains anonymity in order to preserve what is left of the Respondent's privacy.
(7) Bearing in mind the caution required before permitting proceedings of this kind to go forward, I conclude that the public interest in holding to account those who lie to the court is considerable, but not weighty enough to justify the consequences I have identified. In the end, the public interest in this case lies in drawing a line under this long-running saga rather than initiating a further expensive exploration of what did or did not happen in private between consenting adults on five or six occasions 6 or 7 years ago.
I should explain a little more my reasons for one of these conclusions: that there is no strong prima facie case. I accept Mr Nicklin's submission that the conclusions arrived at in the Other Proceedings (admissible for present purposes) leave the Applicant's own credibility in tatters. This is not just a matter of his having told lies, though many such were found to have been told. I place weight on some of the specific findings to which Mr Nicklin has drawn particular attention. These relate among other things to the Applicant's evidence in the Other Proceedings about the frequency and dates of group sex events involving the Respondent. That evidence was found to be inconsistent and unreliable. The contents of the Applicant's present Affidavit are in several respects inconsistent with specific findings of fact made in the Other Proceedings.
There is no Affidavit from AMS. Mr Crystal objects to Mr Nicklin's suggestion that the authenticity of the witness statement exhibited by the Applicant was in doubt. His instructions are that AMS would probably make an Affidavit if asked. The fact remains that she has not done so, although there has been ample opportunity for the Applicant to obtain one. I would have been very reluctant to grant permission without an Affidavit. I might in principle have granted permission conditional upon the production of such evidence, but I doubt that would have been a satisfactory course, especially given how long this matter has been hanging about.
I have not ignored the texts and other documentary evidence, but in the absence of corroborative evidence to support the Applicant's explanation of them I do not consider they carry enough weight to overcome the absence of an Affidavit from AMS.
It is for these reasons that I refuse the application.
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Mr Justice Warby :
A. INTRODUCTION
This is the trial of preliminary issues in these libel claims, pursuant to orders made by Nicola Davies J on 1 April 2015 and Nicol J on 29 June 2015.
The claimant is an aerospace engineer, a French national who currently teaches at a military college in Abu Dhabi, in the United Arab Emirates ('UAE'), which is where he lives. He brings these claims against three different news publishers in respect of five articles first published between 20 January and 10 February 2014.
Two of the five articles were published online in the HuffingtonPost by AOL (UK) Ltd ('AOL'), represented by Mr Barca QC and Ms Ready. Two were published by Independent Print Ltd ('IPL') in hard copy, in The Independent newspaper and its sister paper, 'i'. The Independent article was also published online by IPL at www.independent.co.uk. The fifth article was published by Evening Standard Ltd ('ESL') in the Evening Standard newspaper and online at www.eveningstandard.co.uk. ESL is a sister company of IPL, and the two are jointly represented by Mr Price QC.
Each of the articles complained of contained an account of events in the UAE, including proceedings against the claimant's ex-wife, Afsana Lachaux ('Afsana'), for 'kidnapping' the couple's son. The articles reported allegations against the claimant said to have been made by Afsana, who was described in the first Huffington Post article as a 'British victim of domestic abuse'. Each article bears similar defamatory meanings about him. I shall come to the specific meanings of which he complains. For introductory purposes, it is fair to summarise the meanings as being that the claimant is a wife-beater; that when Afsana escaped, taking their son with her, he falsely accused her of kidnap, causing her to face the risk of being jailed on such a charge; and that he unjustifiably snatched their son back from her.
The claims relate to publication in this jurisdiction and, in the case of the HuffingtonPost ('the Post'), Independent, and Evening Standard, online in Dubai. The agreed readership figures for the twoPost articles together are some 4,800. For the IPL articles the agreed readership figures for the print copies are 154,370 - 231,555 (the Independent) and 523,518 - 785,277 (the 'i'). The Independent article had 5,655 unique visitors online. The Evening Standard readership figures are 1.67 – 2.5 million for the print edition and 1,955 unique visitors online.
The main issue for my decision is, in relation to each article, whether the publication of such allegations about this claimant by these defendants in this jurisdiction and Dubai, to the extent just outlined, has caused or is likely to cause sufficient harm to the claimant's reputation to justify the bringing of these claims.
Now that jury trial is very much the exception in libel actions (see Yeo v Times Newspapers Ltd [2014] EWHC 2853 (QB), [2015] 1 WLR 971) orders for the trial of preliminary issues of this kind are easier to make, and more common. In this case, meaning has already been tried as a preliminary issue in two of the claims. In ordering the trial of the preliminary issues now before me Nicola Davies J and Nicol J were following a course I recommended in Ames v The Spamhaus Project Ltd [2015] EWHC 127 (QB), [2015] EMLR 13 [101].
B. ISSUES
The preliminary issues ordered to be tried are:
i) Reference. In the claims against IPL and ESL there are issues as to whether, or the extent to which, the words complained of referred or were understood to refer to the claimant.
ii) Meaning. In three of the claims – the two against AOL and the second claim against IPL – there are some issues about the natural and ordinary meaning of the words complained of.
iii) Serious harm. In relation to all five claims, I have to decide whether the publication of the words complained of satisfies what I shall call 'the serious harm requirement' laid down by s 1(1) Defamation Act 2013 ('the 2013 Act'): that the publication has caused or is likely to cause serious harm to the reputation of the claimant.
iv) Abuse of process. In the AOL claims I have to decide whether, pursuant to the principles established in Jameel v Dow Jones [2005] EWCA Civ 75, [2005] 1 QB 946 ('Jameel') the pursuit of the claim constitutes an abuse of the court's process on one or more of four grounds specified in the order of Nicola Davies J.
The legal principles that apply to the first, second and fourth issues are well settled. Although, as will be seen, there has been some difference of approach to the reference issue, the main issues of law and fact that arise concern the serious harm requirement. I have to resolve disputes about the true construction of s 1(1) of the 2013 Act, and to apply the law as I find it to the facts I find established by the evidence.
Two main issues of law arise in relation to the serious harm requirement. The first is whether, on the proper construction of s 1(1), what a claimant must prove in order to satisfy the serious harm requirement is (a) as the claimant maintains, that the offending words have a tendency to cause serious harm to the claimant's reputation; or (b) as the defendants submit, that serious harm to the claimant's reputation has in fact been caused or is likely to be caused. The second issue in relation to the 2013 Act is whether, in reaching a conclusion on the issue of whether a given publication caused or is likely to cause serious harm, the court can and should take any and if so what account of other publications to the same or similar effect as the material complained of.
It is perhaps as well to make clear at the outset what this trial is not about.
i) This is not a dispute about jurisdiction. As their corporate names suggest, each of the defendants is a company registered in England and Wales. There is no dispute that this court has, and is bound to exercise, jurisdiction over these claims against these defendants, if the claims cross the threshold of seriousness set by English law.
ii) I am not deciding any issue about the truth or falsity of what was stated in the articles complained of. This is an important feature of a preliminary issue trial of this kind. In one of the claims against IPL, and in the claim against ESL, Defences have been served asserting that the articles were true. As Ms Page has been at pains to make clear, however, the claimant emphatically denies that there was any truth in any of the articles, so far as his conduct is concerned. It is not my task to decide which side is right about this.
iii) Nor is this judgment concerned with whether the defence of public interest, on which IPL and ESL also rely, may be available to them, or to AOL. Nor do I have to decide the merits of any other affirmative defence.
The fact that it is not necessary or indeed relevant to plead let alone investigate the merits of defences in order to determine whether a publication is harmful enough to justify the pursuit of a libel claim is one of the main justifications for trying issues of meaning and harm as preliminary issues. The potential savings in costs and time for the parties and the court are enormous. I return to this point later.
C. RELEVANT LEGAL PRINCIPLES
The determination of whether a published statement is defamatory of an individual claimant is now a three-stage process. It must be decided whether, to the extent this is disputed, the statement (1) refers to the claimant; (2) bears a meaning that is defamatory of the claimant; and (3) has caused or is likely to cause serious harm to the reputation of the claimant.
Stages (1) and (2) reflect the requirements of the common law. Stage (2) can and sometimes must be sub-divided into two separate elements: (a) the identification of the meaning of the words, and (b) the determination of whether that meaning is defamatory. Stage (3) reflects the serious harm requirement enacted by Parliament in s 1(1) of the 2013 Act. It will be necessary to consider the impact of that amendment in the context of the common law and the Jameel abuse of process doctrine, developed under the influence of the Human Rights Act 1998.
(i) The common law
The common law principles applicable to the process I have identified are clearly established, and not the subject of any major dispute. They can therefore be quite shortly summarised, without the need for extensive citation. The nature of the parties' arguments makes it convenient to set out some of the common law principles as to damage at the same time.
Reference
(1) "It is an essential element of the cause of action for defamation that the words complained of should be published 'of the [claimant]'": Knupffer v London Express [1944] AC 116, 120. This does not mean the claimant must be named. The question is whether reasonable people would understand the words to refer to the claimant:
"The test of whether words that do not specifically name the [claimant] refer to him or not is this: Are they such as reasonably in the circumstances would lead persons acquainted with the claimant to believe that he was the person referred to?"
David Syme v Canavan (1918) 25 CLR 234, 238 (Isaacs J).
(2) This is an objective test. If the words would be so understood by such people it is not necessary for the claimant to prove that there were in fact such people, who read the offending words; so an individual defamed by name in Cornwall has a cause of action even if he was unknown in that county at the time of publication: see Gatley on Libel & Slander 12th ed para 7.3; Multigroup Bulgaria Ltd v Oxford Analytica Ltd [2001] EMLR 28 [22] (Eady J) cited with approval in Jameel at [28].
To this extent, I do not accept Mr Price's submission for IPL and ESL that it is an essential element of this claim for the claimant to prove that at least one person understood the words complained of to refer to him. That is not an essential element of the cause of action at common law. Whether such proof is necessary to satisfy the serious harm requirement, or to overcome a Jameel application, or both, is a separate matter.
Meaning
(3) Although in practice any newspaper article, broadcast, blog or other publication may be understood in different ways by different ordinary people, it is a rule of defamation law ('the single meaning rule') that, as in the construction of contracts or statutes, a given set of words is to be treated as having only one meaning: Charleston v News Group Newspapers Ltd [1995] 2 AC 65 [71-72].
(4) The legal principles by which that single meaning is to be identified can be taken from the summary given by Sir Anthony Clarke MR in Jeynes v News Magazine Ltd [2008] EWCA Civ 130 [14]:
"(1) The governing principle is reasonableness. (2) The hypothetical reasonable reader is not naïve but he is not unduly suspicious. He can read between the lines. He can read an implication more readily than a lawyer and may indulge in a certain amount of loose thinking but he must be treated as being a man who is not avid for scandal and someone who does not, and should not, select one bad meaning where other non-defamatory meanings are available. (3) Over elaborate analysis is best avoided. (4) The intention of the publisher is irrelevant. (5) The article must be read as a whole and any 'bane and antidote' taken together. (6) The hypothetical reader is taken to be representative of those who would read the publication in question. (7) In delimiting the range of permissible defamatory meanings, the court should rule out any meaning which, 'can only emerge as the product of some strained, or forced or utterly unreasonable interpretation…' … (8) It follows that 'it is not enough to say that by some person or another the words might be understood in a defamatory way."
Defamatory meaning
(5) A meaning is defamatory of the claimant if it '[substantially] affects in an adverse manner the attitude of other people towards him, or has a tendency to do so': Thornton v Telegraph Media Group Ltd [2010] EWHC 1414 (QB), [2011] 1 WLR 1985, [96] (Tugendhat J). This also is an objective test. Although the word 'affects' might suggest otherwise, it is not necessary to establish that the attitude of any individual person towards the claimant has in fact been adversely affected to a substantial extent, or at all. It is only necessary to prove that the meaning conveyed by the words has a tendency to cause such a consequence. The 'people' envisaged for the purposes of this test are ordinary reasonable readers.
(6) On the issue of defamatory meaning it is firmly established that (leaving to one side any complications introduced by true innuendo meanings, of which there are none in the present case) no evidence is admissible other than the words or other statement complained of. See, e.g., Slim v Daily Telegraph [1968] 2 QB 157, 173 (Diplock LJ); Charleston 70 (Lord Bridge).
Damage
(7) If a statement published in writing or other permanent form is held to be defamatory by these tests the cause of action for libel is complete, and some harm to reputation is presumed. Damages for injury to reputation and feelings are recoverable. Evidence is admissible as to the extent of such damage but no such evidence is necessary.
(8) Some spoken defamatory words are actionable without proof of actual damage (or 'per se'). An example is a statement which imputes the commission of an imprisonable crime. The common law categories of slander actionable per se have been modified and amplified by statute: s 2, Defamation Act 1952. In cases of slander actionable per se the position is the same as in libel: damage is presumed and the cause of action is complete at the time of publication. In other cases of slander, it is necessary to prove special damage in the form of financial loss. If the slander is of a kind that requires proof of special damage the cause of action is not complete unless and until special damage is suffered.
(9) In the class of case - of which the present is an example - where many have published words to the same or similar effect, it is not legitimate for a defendant to seek to reduce damages by proving the publications of the defendant or others, and inviting an inference that those other publications have injured the claimant's reputation. This is a brief and deliberately general summary of what I shall call 'the rule in Dingle': Associated Newspapers Ltd v Dingle [1964] AC 371.
(10) It is not legitimate to prove in mitigation of damages specific acts ofmisconduct: 'the rule in Scott v Sampson' (1882) QBD 491.
(ii) The impact of statute: the Human Rights Act
Jameel
The common law principles outlined above enable a claimant who has suffered minimal actual harm to reputation to establish a cause of action. The pursuit of a claim for damages or for an injunction in such a case may however represent an interference with freedom of expression which cannot be justified as necessary for or proportionate to the pursuit of the inherently legitimate aim of protecting or vindicating reputation.
In Jameel the court recognised that s 6 of the Human Rights Act 1998 requires the court to dismiss such a case as an abuse of process. For the purposes of identifying cases which should be dismissed on this ground the Court adopted the criterion that applies where the court's permission is required to serve proceedings in tort on a defendant outside the jurisdiction: whether the claim involves a 'real and substantial tort' in this jurisdiction.
It is unnecessary to review in detail at this point in this judgment the Jameel abuse doctrine as stated in Jameel itself and subsequent authorities. The principles may be found rehearsed in some detail in Ames at [27]-[33] and elsewhere. The bases on which AOL contend that the present claims should be dismissed pursuant to the Jameel jurisdiction are conveniently reflected in the issues for preliminary trial set out in the Order of Nicola Davies J. These are whether, pursuant to the principles established in Jameel, the pursuit of the claim constitutes an abuse of the court's process on the basis that:-
"a. The Claimant does not have a sufficient connection to or reputation in this jurisdiction to be able to establish a real and substantial tort here;
b. The words complained of were not published to a sufficient number of persons in this jurisdiction who understood them to refer to the Claimant for him to be able to establish a real and substantial tort here;
c. The claim cannot serve the legitimate [purpose] of protecting or vindicating the Claimant's reputation in this jurisdiction; and/or
d. There is no realistic prospect of a final trial yielding any tangible or legitimate advantage such as to outweigh the disadvantages for the parties in terms of expense and the wider public in terms of court resources."
Delay
It is a feature of this case, not uncommon in libel actions, that the claimant has been criticised for delay. In his Skeleton Arguments before Nicol J and for this trial Mr Barca placed reliance on delay by the claimant in pursuing his complaints about the AOL articles in a manner which led Mr Busuttil at the previous hearing and Ms Page at this one to object that he was straying well outside the boundaries of the Jameel issues as defined by Nicola Davies J, above.
Before Nicol J, Mr Barca pointed out that an action 'may … be considered an abuse if the court's processes are being abused for improper collateral purposes, such as to harass a defendant (or perhaps someone perceived to be in league with the defendant): see … especially, Grovit v Doctor [1977] 1 WLR 640 (HL).' Reference was made to the way that the claimant handled another libel complaint, against his ex-wife's son from a previous marriage, Rabbhi Yahiya. This was said to be 'Of a piece with C's conduct in this regard, and further feeding the impression of a collateral tactical agenda.' As has been pointed out on the claimant's behalf, collateral purpose abuse is something quite separate and distinct from Jameel abuse. It requires proof of a dominant improper purpose.
Mr Busuttil, having raised this point before Nicol J, had understood that collateral purpose abuse was not in the event to be pursued. The passages quoted above did not feature in Mr Barca's Skeleton Argument for this trial, and Grovit v Doctor was not among the authorities relied on. However, there was a section of the Skeleton Argument headed 'Delay' that repeated much of the corresponding section of the previous document, including this passage: 'Whatever the motive for such extraordinary conduct (be it to vex or harass his ex-wife or for some other unfathomable reason), it is quite plain that C did not use the court's process through any genuine concern to seek redress for the 'serious harm' caused to his reputation on account of anything published by Mr Yahiya in 2014.'
It was this that evidently set the antennae of the claimant's team tingling, sensitised as these were to the risk of an attempt to expand the boundaries of the argument. In the event, Mr Barca did not put to the claimant in cross-examination any case that he had a dominant or collateral improper motive or purpose for bringing these proceedings. In closing submissions Mr Barca made clear that he was not inviting any such finding, but relying exclusively on Jameel principles. I approach AOL's application on that basis.
It is necessary even so to give a little more consideration to this aspect of Mr Barca's case. Both his written and oral argument relied in support of his Jameel; application on passages in the judgments of Hale LJ in Steedman v BBC [2001] EWCA Civ 1534, [2002] EMLR 17 and Sharp LJ in Bewry v Reed Elsevier UK Ltd [2014] EWCA Civ 1411, [2015] 1 WLR 2565.
i) In Steedman Hale LJ observed at [34] that the claimants had not put in evidence or offered explanations for their delay in complaining about the broadcasts which they said were libellous, saying that "This makes it difficult to conclude that vindication was uppermost in their minds at any time." Mr Barca invites me to conclude in this case that vindication was not "uppermost" in the mind of the claimant.
ii) Mr Barca relies on Sharp LJ's conclusion in Bewry at [41] that the claimant's claim "falls squarely within the Jameel jurisdiction", in part because "it cannot be said that the claim is brought to vindicate his reputation". He links this last passage to observations earlier in Sharp LJ's judgment at [25-26], [31] and [36], in which she upheld "the defendant's principal contention on this appeal … that there was serious and unexplained delay on the part of the claimant…"
Ms Page is right, in my judgment, to argue that these submissions of Mr Barca conflate two distinct issues. In Steedman and Bewry the claimants had issued proceedings after the expiry of the limitation period. The only issue in Steedman, and the main issue in Bewry was whether the claims should be struck out or, alternatively, the claimants should benefit from a discretionary disapplication of the limitation period pursuant to s 32A of the Limitation Act 1980. The onus is on a claimant to persuade the court to exercise this discretion. By s 32A(2) the court is required to have regard to all the circumstances, but mandated to have regard in particular to certain specified factors. The first of these is 'the length of, and the reasons for, the delay on the part of the [claimant]': s 32A(2)(a). Paragraph [34] of Steedman and paragraphs [25-26], [31] and [36] of Bewry are all concerned with the discretion under s 32A.
A Jameel application raises issues distinct from those that arise on an application by a claimant under s 32A. Dismissal for Jameel abuse is not a discretionary matter. Where the case is shown to involve a disproportionate interference with freedom of expression it is the court's duty to dismiss it. The onus is on the defendant to persuade the court that this is the case. Abuse of process arguments did not feature at all in Steedman, which preceded Jameel by several years. Jameel abuse did feature in Bewry, but only in relation to a small number of claims which had been brought within the limitation period. Those claims related to the communication of the offending words to just three people. It is those residual claims that Sharp LJ held to fall 'squarely within Jameel'. The other words relied on by Mr Barca appeared in the following context: 'There are a miniscule number of publications, it cannot be said that the claim is brought to vindicate his reputation in respect of those publications, or that any vindication would inure if he did so. Damages would be minimal.'
This part of Bewry is not concerned with delay. It is a clear and straightforward application of Jameel principles to a case of minimal publication and minimal damage. Indeed, the position on Jameel abuse was so clear that Sharp LJ concluded paragraph [41] in this way: 'Mr White [Counsel for the claimant] was right in my judgment not to argue that we should allow the claim to continue if the [defendant's] appeal on the limitation issue was allowed.'
Delay may be indicative of a purpose or motivation other than vindication, but those are not relied on here. I do not say that purpose can never be relevant to Jameel abuse but it is necessary to focus on an objective evaluation of the weight of the competing rights. In my judgment delay will usually be relevant in the assessment of whether a defamation claim represents Jameel abuse only if and to the extent that the delay supports an inference that objectively any harm caused, need for vindication, or need for restraint on future publication is negligible.
(iii) The impact of statute: the serious harm requirement
Section 1(1) of the 2013 Act is headed "Requirement of serious harm" and provides:
"1.— Serious harm (1) A statement is not defamatory unless its publication has caused or is likely to cause serious harm to the reputation of the claimant."
A requirement that 'serious' harm to reputation has been or is likely to be caused is clearly more demanding than the common law test identified in Thornton: a tendency 'substantially' to affect in an adverse way people's attitudes to the claimant. Parliament has left it to the judges to apply the serious harm requirement, 'serious' being an ordinary word in common usage.
These points have been made by Bean J in Cooke v MGN Ltd [2014] EWHC 2831 (QB), [2015] 1 WLR 895 [37], [39] and by me in Ames at [49] and [52] and are not in dispute in the present case. The main issue between the parties is the extent to which s 1(1) has altered the approach the court must take to the determination of whether a statement is defamatory. In Cooke Bean J accepted that evidence is admissible and may be necessary on the issue of whether serious harm to reputation has been or is likely to be caused. My approach in Ames was to the same effect, though it is fair to say that the issue was not debated or part of the ratio. The claimant's case is that in order to determine whether the serious harm requirement is satisfied one should look only at the offending words.
What is required to prove serious harm?
The main burden of the argument for the defendants on the s 1(1) issues has been carried by Mr Price. His principal submission is that Cooke was rightly decided; that is, that Bean J was correct to conclude that 'has caused' requires a claimant to establish as a fact on the balance of probabilities that serious harm has been caused to his reputation, and 'is likely to' requires proof that serious harm probably will be caused in the future: see Cooke [30-31].
To this, Mr Price adds that in principle the party who has the burden of proving a disputed fact may do so by evidence directly going to prove that fact, or by inference from other facts. Although he accepts that inference may sometimes be enough, it cannot always be so. On the contrary, serious harm to reputation will in most cases result in tangible adverse consequences, he submits. If no evidence of such consequences is adduced, the court should not draw an inference of serious harm.
Mr Price focuses his argument on construction upon the words of the subsection itself. He draws attention to the fact that 'has caused' and 'is likely to cause' are presented as alternatives. That of itself means that Parliament has departed from the common law approach of determining only whether words have a defamatory tendency. Further, as Bean J accepted in Cooke, the words 'has caused' direct attention to what has happened in the past, and the words 'is likely to cause' refer to what may happen in future.
Mr Price points out that the words 'is likely to' or similar phrases are often used in statutes to refer to a future event or consequence: see for example s 12(3) HRA, and the examples given in Cream Holdings Ltd v Banerjee [2004] UKHL 44, [2005] 1 AC 253 [21]. In Cream the House of Lords held that the word 'likely' in s 12(3) HRA should be read as ordinarily denoting more probable than not. Mr Price argues that it should be given a like meaning in the present context, as was common ground in Cooke, and as I was inclined to accept in Ames at [54].
Different language would have been used, submits Mr Price, if Parliament's intention had been to allow claims to proceed provided only that the allegation had a tendency, or was inherently likely, to cause serious harm. Parliament could easily have replicated the definition in Thornton [96], using the word 'tendency' but substituting 'seriously' for 'substantially'. Alternatively, Parliament could have adopted the term 'calculated to' which is used in ss 2 and 3 of the Defamation Act 1952, and is recognised as setting a standard of likelihood lower than the balance of probabilities: see Andre v Price [2010] EWHC 2572 (QB).
It follows from Parliament's choice of language, in Mr Price's submission, that in order to succeed in a defamation claim today the claimant must prove as a fact that the publication complained of has caused or is likely to cause serious harm to the claimant's reputation. Such an issue will fall to be decided in the same way as similar issues would be decided in any other context: on the basis of evidence. He accepts that there may be cases where the court can infer from the nature and extent of the publication complained of that serious harm to reputation has been or is likely to be caused. But it will not by any means always be enough for a claimant to point to what has been published and rely on its tendency to cause serious reputational damage.
Mr Price bolsters his submissions by reference to the legislative history of s 1(1), relying on the Ministerial Foreword to the draft Defamation Bill which preceded the Bill and the Act, a passage in the Report of the Joint Committee on the draft Bill, and the Explanatory Notes to the Act itself, to which I shall return. Mr Price argues that the interpretation for which he contends is clearly the one which will give effect to Parliament's intention, which was to rebalance defamation law in favour of freedom of expression.
The submissions for the claimant can also be concisely summarised. It is submitted that s 1(1) is solely directed to the quality of the meaning conveyed by the words. The subsection does no more than 'put into place an adjusted definition of the term "defamatory"', thereby raising the threshold of seriousness identified in Thornton. The overall structure of defamation law is left unaffected. Three key propositions are set out in paragraph 34 of the claimant's Skeleton:
i) 'The purpose of s 1(1) was to harden up existing law' relating to the exclusion of trivial defamation claims through a 'threshold of seriousness';
ii) this purpose was achieved by putting into statute 'an adjusted definition of the term "defamatory", the purpose and effect of which was to upgrade the harmful effect required to surmount the threshold of seriousness from 'substantial' … to "serious"';
iii) the existing law was to be and was otherwise undisturbed. Thus, for instance it is argued, the law as to what evidence is admissible for the purposes of deciding whether a statement is defamatory remains as it was: only the statement complained of is admissible.
It is pointed out that I am not bound by Cooke or Ames and it is submitted that the approach taken in those cases was, to the extent it is inconsistent with the claimant's present arguments, mistaken.
In support of these submissions Ms Page has developed three principal strands of argument. One is concerned with the language of s 1(1) itself. It is submitted that the words 'is likely to' reflect the common law requirement of a tendency, and common law authorities using these terms interchangeably. The words 'has caused' are said to be a reflection of the first element of the common law definition as expressed in Thornton. That in turn is said to reflect the fact that the tort is complete on publication. Thus, it is argued, the only material alteration to the law is the introduction of the word 'serious' in place of 'substantial'.
Secondly, Ms Page argues that if the defendants' arguments are correct Parliament will have wrought radical changes in the structure of defamation law. It will have abolished the objective test of meaning; the single meaning rule; the 'tendency' test of what is defamatory; the rule that libel is actionable per se, and the presumption of harm. It will also have impliedly repealed s 2 of the 1952 Act. Parliament should not be taken to have intended such a revolution, in the absence of clear words indicating as much.
The third strand of Ms Page's argument relies on the legislative history and the purposes for which the 2013 Act was passed. She submits that the Parliamentary materials assembled by Mr Price on behalf of IPL and ESL show that the mischief at which s 1(1) was aimed was to get rid of all non-serious claims at an early stage, because of the high costs of defamation litigation and the adverse impact on freedom of expression of bullying by the rich. She submits that the materials contain nothing, other than the Explanatory Notes, to suggest that it was intended that evidence would be submitted on the issue of serious harm, or that there would be any conflation of Jameel and Thornton, which are two distinct lines of authority.
As to the Explanatory Notes, these are not to be treated as reflecting the will of Parliament, submits Ms Page, relying for this submission on Lord Steyn's words in R (Westminster City Council) v National Asylum Support Service [2002] UKHL 38, [2002] 1 WLR 2956 [5] – [6]. She adds that the length and expense of the present trial illustrate the mischief that would result if the defendants' submissions were accepted. Costly trials such as this are the opposite of what Parliament intended, she submits.
I have approached this issue with an open mind, putting to one side for the moment the conclusions arrived at in Cooke and Ames. My starting point is, as ever, consideration of the language used by Parliament, in the context in which that language was used. An important part of that context is the existing common law. Parliament is presumed to know the common law, and to legislate by reference to it. Thus, Parliament is presumed to have been aware of the Thornton definition of what is defamatory, the rules as to how a defamatory meaning may be proved, the presumption of damage, and the other common law rules outlined above. The Jameel jurisdiction, being a creature of judicial decision-making, albeit pursuant to statute, is to be treated for this purpose as a common law rule. Parliament also legislates, of course, in the presumed knowledge of existing statute law, and the meaning that has been ascribed to it by the courts.
In my judgment this approach leads to the clear conclusion that in enacting s 1(1) Parliament intended to do more than just raise the threshold for defamation from a tendency to cause 'substantial' to 'serious' reputational harm. The intention was that claimants should have to go beyond showing a tendency to harm reputation. It is now necessary to prove as a fact on the balance of probabilities that serious reputational harm has been caused by, or is likely to result in future from, the publication complained of.
It is important, first of all, to note that the claimant's Counsel are clearly wrong to describe s 1(1) as a 'definition of the term "defamatory"'. It is a principle of statutory construction that Parliament is assumed not to intend the repeal of a common law rule other than by express words or necessary implication: see Bennion on Statutory Interpretation (6th ed 2013), p 280; R (Morgan Grenfell Ltd) v Special Commissioner of Income Tax [2003] 1 AC 563, 607 [8], [41], [44]. In any event, the formula adopted in this subsection, that a publication 'is not defamatory unless …', is simply not apt to create a new definition. It is clear, in my judgment, that the subsection serves to add to the common law, not to substitute a different provision.
Secondly, taken by themselves, the terms 'has caused' and 'is likely to cause' would naturally suggest to most lawyers or laymen two different and alternative ways of meeting the serious harm requirement: either by proving as a fact either that serious reputational harm has already been suffered or, alternatively, that it probably will be suffered in future. It would not occur to the ordinary reader that these requirements were to be taken as a single and indivisible requirement, satisfied or not, by reference only to the words complained of.
If one then adds an appreciation of the particular common law context, these conclusions are not undermined, but reinforced. The existing law of defamation provided some ready-made, carefully crafted and well-understood terminology, in the form of the Thornton 'tendency' definition and the term 'calculated to' in the 1952 Act. Either would have been suitable for the purpose which Ms Page attributes to Parliament. Parliament chose instead to adopt quite different language, which is not to be found in the common law of defamation or previous statutes on the subject.
Sometimes this happens when the law is modernised. Maybe, if the term stood alone in the subsection, 'likely to' could be interpreted as modern language synonymous with 'tend to' or have a tendency to'. I do not think so, because there is nothing particularly archaic about 'tend to'. Moreover, as Mr Price points out, wording such as 'likely to' is typically used in statute to refer to the prospect of a future event, not a tendency. Parliament must have known how the House of Lords had construed the word 'likely' in Cream. In any event, given that in s 1(1) the term 'likely to' does not appear alone but in conjunction with the words 'has caused', I do not think it could be right to treat the former as intended to replicate the common law tendency test. The words 'have caused' must be given some effect. Ms Page's submission does not satisfactorily account for their presence in the section. It treats them in substance as surplusage - at best an inaccurate Parliamentary rendition of the redundant and confusing first part of the common law definition.
In my opinion, the fact that s 1(1) was enacted in a legal context that included the Jameel jurisdiction lends further weight to these conclusions. By the time the section was passed the common law had developed a twin-track approach to the elimination of trivial defamation claims: they might fail to meet the threshold of seriousness identified in Thornton, and be struck out on the grounds that the statement complained of was not defamatory; or they might be struck out as an abuse of process pursuant to Jameel. Inherent in the Jameel requirement of a real and substantial tort, but absent from the Thornton test, is an assessment of all the circumstances including, and in particular, the gravity in fact of the reputational harm that a publication has caused or is likely to cause. This twin-track approach creates what is clearly a somewhat unsatisfactory legal scenario. The use in s 1(1) of the new language, 'has caused or is likely to cause' is consistent with an intention to simplify the law by drawing together the strands, and subsuming all or most of the Jameel jurisdiction into a new and stiffer statutory test requiring consideration of actual harm.
There can be no question but that Parliament knew about the role of the Jameel jurisdiction. Indeed, I doubt there would have been a need in this case for the presumption that Parliament knows the common law, and the statutory context in which it legislates. The passage of the 2013 Act was preceded and accompanied by extensive and intensive description, discussion, and criticism of the common law. It is hard to envisage any remotely interested Parliamentarian who was unaware of the essential common law rules to which I have referred above. The materials available to demonstrate this are voluminous. It is unnecessary to list them. I shall however refer to two. Legislative history is always relevant as an aid to construction, provided it is used to show the context and background in which Parliament used the words it chose. In my view the legislative history lends support to the conclusions at which I have arrived independently of them.
The draft Defamation Bill which was the origin of the Act was the subject of a report by a joint Committee of the House of Lords and House of Commons. That report (Draft Defamation Bill, HL Paper 203, HC 930-1 of 19 October 2011) noted at paragraph 27 that 'under the existing common law, the courts have power to throw out any claim that fails to meet a "threshold of seriousness", including where no "real and substantial" wrongdoing can be demonstrated ...'. The Joint Committee referred to the government's then proposal to impose a requirement of 'substantial harm' and called for a test of 'serious and substantial' harm instead. The relevant considerations identified by the Committee were, on the one hand, the importance of ensuring 'that wealthy individuals and organisations cannot stifle comment and debate that has no significant impact on their reputation' and, on the other, 'the risk of increasing costs at the start of the claim'. The Report emphasised at paragraph 30 what the Committee saw as the importance of considering 'the context in which a statement is made', which it took to includePost-publication events such as 'a rapid apology and correction', or a notice attached to internet material that has been challenged as libellous. None of this is relevant under the common law approach.
The Explanatory Notes to the Act were relied on by Bean J in Cooke at [37] and by me in Ames at [49]. As Lord Steyn observed in the National Asylum Support Service case at [5]: "In so far as ... Explanatory Notes cast light on the objective setting or contextual scene of the statute, and the mischief at which it is aimed, such materials are ... always admissible aids to construction." The following passage makes clear that Parliament was well aware of the twin-track approach of the common law to trivial claims:-
"11. The section builds on the consideration given by the courts in a series of cases to the question of what is sufficient to establish that a statement is defamatory. A recent example is Thornton v Telegraph Media Group Ltd in which a decision of the House of Lords in Sim v Stretch was identified as authority for the existence of a "threshold of seriousness" in what is defamatory. There is also currently potential for trivial cases to be struck out on the basis that they are an abuse of process because so little is at stake. In Jameel v Dow Jones & Co it was established that there needs to be a real and substantial tort. The section raises the bar for bringing a claim so that only cases involving serious harm to the claimant's reputation can be brought".
Paragraph 10 of the Explanatory Notes shows that Parliament had in mind that there might be cases where a publication has taken place but has not yet caused serious harm: 'The provision extends to situations where publication is likely to cause serious harm in order to cover situations where the harm has not yet occurred at the time the action for defamation is commenced.' This identifies a mischief which s 1(1) sought to address: a statement which has been published and is likely to cause serious harm to reputation, but has yet to do so. Ms Page's construction does not acknowledge the possibility of such a scenario.
Some Hansard extracts are among the materials put before the court by Mr Price. He has not based his arguments on those extracts, however. For my part I do not regard s 1(1) as ambiguous, and hence I do not consider the case satisfies the requirements for the application of the doctrine in Pepper v Hart [1993] AC 593. I am comforted however by the thought that, if I am wrong about that, my approach to the construction of s 1(1) receives support from the statements made by Mr Djanogly, the Parliamentary Under-Secretary for Justice, promoting the Bill in the Commons: see HC debates of 12 June 2012 vol 546 vol 12 col 259; Public Bill Committee 19 June 2012 col 17 (referring to a question at col 12).
In arriving at my conclusions I have given careful thought to Ms Page's submissions that they involve imputing to Parliament – contrary to principle - an intention to revolutionise defamation law by implication, and to do so in a way that in practice risks defeating Parliament's intention by making litigation in this area more not less expensive and complex. I regard both submissions as alarmist and ill-founded. I acknowledge the presumption against implied repeal of the common law. But I do not accept that my construction of s 1(1) is as radical as is suggested, or that it involves the dramatic consequences attributed to it by the claimant's Counsel. To the extent that my construction does involve the implied repeal or amendment of common law principles, an intention to achieve that is, in my judgment, necessarily implicit in Parliament's choice of language.
Much that is said on the claimant's behalf on this aspect of the matter seems to me to be based on a false premise, namely that on this approach it will in all cases be necessary for a claimant to adduce evidence to prove that the publication complained of is defamatory of him or her. As recognised in Cooke and Ames, however, the serious harm requirement is capable of being satisfied by an inferential case, based on the gravity of the imputation and the extent and nature of its readership or audience. Suppose a well-known public figure complains of national media publication of a grave imputation, such as conspiracy to murder or serious sexual crime. They could hardly be required to call witnesses who read the words to say they thought the worse of the claimant in order to establish a claim. In such a case the common law rules for the objective assessment of the meaning and defamatory tendency of words are plainly unaffected, as is the single meaning rule.
I cannot see why the position as regards those rules of the common law should be any different in less obvious cases, where it may be necessary for a claimant to prove some facts beyond the words themselves and the fact and extent of their publication. The court can still undertake an objective determination of the single meaning of the words, and whether it satisfies the Thornton test, before considering whether it has been proved that serious harm has been or is likely to be caused by the publication.
One main difference in practice may well be that a claim will no longer succeed where the meaning is a serious one but the claimant's reputation in the eyes of those who read the words complained of is not in fact harmed seriously, if at all. This can occur, as illustrated by the facts of Riches v News Group Newspapers Ltd [1986] QB 256 and Oriental Daily Publisher Ltd v Ming Pao Newspapers Ltd [2012] HKCFA 59, [2013] EMLR 7. In each of those cases the defendants reported allegations which were grave, but made by sources who lacked credibility. None of the claims was considered deserving of large sums in compensatory damages, but proof that readers did not believe the serious defamatory allegation made could not at common law defeat a claim altogether. It could be relied on only to mitigate compensatory damages. In this jurisdiction a Jameel application would be available as an alternative, were it not for s 1. But either approach has drawbacks for a defendant.
I accept that my construction of s 1(1) means that libel is no longer actionable without proof of damage, and that the legal presumption of damage will cease to play any significant role. These, however, are necessary consequences of what I regard as the natural and ordinary, indeed the obvious meaning of s 1(1). They are, moreover, consequences which had in practice already been brought about by previous developments. The HRA and the emergence of the Jameel jurisdiction which substantially eroded if they did not wholly undermine these common law rules. Since Jameel it has no longer been accurate other than technically to describe libel as actionable without proof of any damage. I cannot see this as a substantial argument against my construction of the statute.
The claimant's argument that this construction involves the implied repeal of s 2 of the Defamation Act 1952 is ingenious, but in my judgment ultimately misconceived. At common law spoken words were actionable as slander without proof of special damage if they defamed the claimant 'in the way of' – meaning, roughly, in connection with - any profession, calling, trade, business or office. Section 2 of the 1952 Act replaces the common law rule with the following: 'In an action for slander in respect of words, calculated to disparage the plaintiff in any office, profession, calling, trade or business held or carried on by him at the time of the publication, it shall not be necessary to allege or prove special damages, whether or not the words are spoken of the plaintiff in the way of his office, profession, calling trade or business.' As noted above, the term 'calculated to' was held in Andre v Price to connote a test of likelihood, lower than 'more likely than not'. 'Disparagement' was interpreted as requiring 'a certain threshold'.
The claimant's argument is that s 2 permits a slander action to be maintained in relation to defamatory speech which disparages a person in their trade etc. without proof of special damage; if s 1(1) of the 2013 Act requires proof of actual serious harm it has brought about a fundamental change to s 2. The fallacy will be obvious from what I have already said. The general common law rule is that a slander action requires proof of special damage. Section 2 alleviates that burden, where its requirements are satisfied. All that s 1(1) has done is to add a requirement that a claimant prove actual or likely serious harm to reputation. This is not in conflict with the existing law, still less does it involve an implied repeal.
In invoking the spectre of s 1 disputes leading to spiralling costs at an early stage, it seems to me that Ms Page falls into the trap of generalising on the basis of the particular circumstances of this case, which are quite particular. She also, to an extent, finds herself describing the kettle from the perspective of the pot. For one thing, this trial has involved very substantial argument on the true interpretation of s 1(1). It is not only the defendants who have devoted time and resources to this. The 73-page Skeleton Argument submitted by Ms Page and Mr Busuttil runs to just short of 26,000 words, a large part of it devoted to the issues of law that arise from the s 1 disputes. That will not be the case every time an issue of serious harm is tried.
Secondly, as noted later in this judgment, the claimant's written evidence for this trial went in my opinion a long way beyond what was necessary and proportionate. I eliminated a great deal of it from consideration as irrelevant. Thirdly, a large part of the hearing was absorbed by cross-examination of the claimant which, in my judgment, also went beyond what was really needed. Lessons are there to be learned. Even then, this hearing has taken only two days, and the evidence examined has not been very extensive. I am confident that in future, with appropriate case management after the applicable principles have been settled, issues such as this can be tried in a more economical and proportionate way.
In summary, my conclusion is that by s 1(1) Parliament intended to and did provide that a statement is not defamatory of a person unless it has caused or will probably cause serious harm to that person's reputation, these being matters that must be proved by the claimant on the balance of probabilities. The court is not confined, when deciding this question, to considering only the defamatory meaning of the words and the harmful tendency of that meaning. It may have regard to all the relevant circumstances, including evidence of what has actually happened after publication. Serious harm may be proved by inference, but the evidence may or may not justify such an inference.
I remain of the views expressed in Ames at [50] and [101]. In particular, where a defendant maintains that the actual or likely harm to reputation is too slight to justify a claim, the starting point should be consideration of s 1; and if that issue is raised it will usually be preferable for it to be tried as a preliminary issue, rather than by way of a striking out or summary judgment application, which may fail on the grounds that the conclusion is not obvious and the prospect of success not fanciful. I emphasise 'if' and 'usually' because it is not every case in which serious harm will be a real issue; and where it is, a preliminary trial will not invariably be appropriate.
It is not necessary in this case to determine the subsidiary question of the point in time from which the court is to judge whether a statement 'is likely to' cause serious harm. Nor was it in Cooke or Ames. The contenders are the time when the claim form is issued, or the time at which the issue is determined. The wording of the section does not assist. Bean J preferred the former: Cooke [32]. I am inclined to prefer the latter, on the grounds advanced by Mr Price. If the former approach is adopted a claim would fail if actual damage had been caused at the time of the determination, but was not likely at the time of publication; and a claim would succeed if damage was likely at the time of publication even if it turned out that none was caused.
On either approach it must be accepted that a consequence of s 1 is that the status of a publication may change from non-defamatory to defamatory. A cause of action may lie inchoate until serious harm is caused or its future occurrence becomes probable. I see no difficulty with that. A similar position prevails at common law in respect of slanders which are not actionable without proof of special damage. Another consequence is that a publication may in principle change from being defamatory to being not defamatory (and hence not actionable), for instance by reason of a prompt and full retraction and apology. That is a novelty in the substantive law of defamation, but does not represent any great change of substance. It is well-established that one effect of Jameel is that the pursuit of an action, legitimate when it began, may cease to be so when circumstances change: see, e.g., Hays plc v Hartley [2010] EWHC 1068 (QB), Cammish v Hughes [2012] EWCA Civ 1655, [2013] EMLR 13. Fairness can usually be achieved via costs orders.
Other publications and the rule in Dingle
As part of their case that serious harm to reputation has neither been nor is likely to be caused by the publications complained of, all the defendants seek to rely on other publications to the same or similar effect. In their Defences IPL and ESL each put their case in the following way, which AOL adopts in support of its case on serious harm and Jameel abuse:
(1) 'The relevant allegations have been made in many media and other publications, a number of which have a greater print and/or online readership and/or prominence than the Independent and/or named the Claimant and/or were published prior to the Article.'
(2) 'Afsana's allegations will remain accessible on the internet irrespective of the continued publication of the Article'.
(3) 'Any consideration of such coverage will disclose the fact that in 2002 the Phoenix Municipal Court in the State of Arizona granted an injunction against the Claimant prohibiting him from stalking or otherwise harassing a woman who had been in a relationship with him and an associate of hers ("the Harassment Injunction").'
In support of points (1) and (2) the defendants have adduced evidence of a range of other publications, together with circulation and readership statistics. Mr Price has prepared a chronology, demonstrating which publications first appeared on which dates. This material shows that some of the other publications took place earlier than those complained of, and that some had a very substantial readership. Particular reliance is placed on articles published in the Daily Mail, in which allegations made by Afsana were given extensive publicity, and about which the claimant, on his own account, wanted to complain. He did not, as he was advised the articles were protected by the privilege for fair and accurate reporting of court proceedings. As a matter of chronology, the articles complained of against IPL and ESL came after a publication on the website of the Emirates Centre for Human Rights, the first AOL article, articles in the Daily Telegraph and Daily Mail, and in the Gulf News and the National.
The objection which has inevitably been raised on behalf of the claimant is that reliance on this material violates the rule in Dingle. In Dingle, on 17 May 1958 the Daily Mail and other papers reported the contents of a Parliamentary Select Committee report which defamed the claimant. The report was fair and accurate and therefore immune from suit in libel. On 16 June the Mail published a further, unprivileged report to similar effect. On 26 June it published a further article stating that all interested parties had been cleared of any deliberate intent to defraud. The claim was tried by judge alone. The judge reduced damages on account of the earlier publications. The House of Lords held that this was not legitimate. The earlier publication was inadmissible on the question of what general damages were appropriate to compensate the claimant for the article complained of, which was neither privileged nor shown to be true, nor should damages be reduced on the ground that the Select Committee report had tarnished the claimant's reputation.
Ms Page submits that Dingle is authority for a rule that at common law other publications to the same effect as the words complained of, or relating to the same incident as is referred to in the words, are inadmissible in relation to the assessment of general damages for injury to reputation, whether the other articles are published by the defendant or others, and whether or not they are the subject of complaint by the claimant. This rule is qualified only by s 12 of the 1952 Act, by which a defendant may prove in mitigation of damages that the claimant has recovered or claimed damages for libel or slander, or agreed to accept compensation, 'in respect of the publication of words to the same effect as the words on which the action is founded.'
Again, it is Mr Price who leads the argument for the defendants on these issues. He seeks to meet Ms Page's objections in three ways. First, and least radically, it is submitted that the true ratio of Dingle is narrower than the claimant suggests. Mr Price submits that the decision simply relates to what material is admissible in mitigation of damages, and is not authoritative in the new legal environment in which a claimant must establish serious harm to reputation. Alternatively, it is submitted that certain propositions must follow from the nature of injury to reputation, the wording of s 1, and established principles of causation in tort. One such proposition is said to be that where newspaper A reports an allegation and newspaper B subsequently reports the same allegation, the claimant can recover against B in respect of damage to reputation caused by publication to those readers of B who were not previously aware of the allegation, and only in respect of that damage. Thirdly, it is submitted that the authorities on Jameel abuse support the view that the existence of other past and likely future publications to similar effect is relevant and admissible in determining whether a publication constitutes a real and substantial tort.
The decision in Dingle has not commanded universal agreement. To some it seems no more than common sense that previous publications to the same or similar effect are relevant when assessing what damage to reputation has been caused by a given publication. The ratio of the decision is, however, not that it is irrelevant to consider the state of a person's reputation at the time the words complained of are published. The common law has always recognised that a person should only be compensated for injury to the reputation they actually possess. A defendant may prove in mitigation that a person has a bad reputation in the relevant sector of his life. The common law has however developed rules as to the means by which such a matter may be proved or, put another way, the evidence which is admissible to establish it. Previous publications to the same effect are inadmissible. The court will admit evidence from individuals who can speak of how a person is or is not esteemed, in the relevant sector of his reputation, or evidence of a conviction or possibly some other single notorious event. Dingle is in my judgment properly understood as a reaffirmation of those long-established rules of common law, and the policy considerations that underlie them.
The speech of Lord Denning perhaps reflects this most clearly. Giving his reasons for concluding that Pearson J had erred he identified the issue in this way, [1964] QC 371, 410:
"5. Now comes the difficult point which I may state in this way. The "Daily Mail" are only responsible for the damage done to the plaintiff's reputation by the circulation of the libel in their own newspaper. They are not responsible for the damage done to the plaintiff's reputation by the report of the select committee or by the publication of extracts from it in other newspapers. If the judge isolated the damage for which the "Daily Mail" were responsible from the damage for which they were not responsible, he would have been quite right, see Harrison v. Pearce. But it is said that he did not isolate the damage. He reduced the damages because the plaintiff's reputation had already been tarnished by reason of the publication of the report of the select committee and of the privileged extracts from it in the "Daily Mail" and other newspapers. I think he did do this and I think he was wrong in so doing."
At p410-411 Lord Denning gave these reasons for that conclusion:
"At one time in our law it was permissible for a defendant to prove, in mitigation of damages, that, previously to his publication, there were reports and rumours in circulation to the same effect as the libel. That has long since ceased to be allowed, and for a good reason. … It does a newspaper no good to say that other newspapers did the same. They must answer for the effect of their own circulation without reference to the damage done by others. They may not even refer to other newspapers in mitigation of damages. Such has been the law ever since 1829 (Saunders v. Mills), and it cannot be called in question now. It is but a particular instance of the general rule which excludes rumours or reports to the same effect as the libel, see Scott v. Sampson; Speidel v Plato Films Ltd.: and it has been implicitly recognised by the legislature in the statutes of 1888 and 1952 which have created some limited exceptions to it, not in question here. "
At 412 Lord Denning addressed the contention that the claimant's reputation had been 'tarnished' by other publications. In the process he identified the kinds of evidence that the common law accepts as admissible on the issue of bad reputation:
"In order to get round this law about reports and rumours, Mr. Faulks said that they had got to the stage here where Mr. Dingle's current reputation was tarnished: and that evidence of tarnished reputation was admissible in evidence. But how are you to distinguish between reports and rumours which are inadmissible and tarnished reputation which is admitted? only in this way: In order to show that a man has a bad reputation, you should call those who know him and have had dealings with him. They are in a position to judge his worth. If they consider he has a bad reputation, they are very likely right, and he has nothing much to lose. If it is a settled reputation which has been accumulated over a period by a sequence of misdeeds, they will know of it. If it is a reputation which has been destroyed at one blow by a single conviction, they will know of it too. Either way, if you call those who know him well, you are likely to get at the truth. … "
The other principal speech on this issue was that of Lord Radcliffe, with whom Lords Morton and Cohen agreed. He said this at 396:
"Whatever may be the qualifications or requirements as to evidence led on the issue of reputation by way of mitigation of damages for libel, I do not believe that it has ever yet been regarded as permissible to base such evidence on statements made by other persons about the same incident or subject as is embraced by the libel itself. In my opinion it would be directly contrary to principle to allow such an introduction."
Lord Radcliffe identified the principles:
"A libel action is fundamentally an action to vindicate a man's reputation on some point as to which he has been falsely defamed, and the damages awarded have to be regarded as the demonstrative mark of that vindication. If they could be whittled away by a defendant calling attention to the fact that other people had already been saying the same thing as he had said, and pleading that for this reason alone the plaintiff had the less reputation to lose, the libelled man would never get his full vindication."
Dealing with the 'tarnished reputation' point, Lord Radcliffe said this:
"It is, I think, a well understood rule of law that a defendant who has not justified his defamatory statements cannot mitigate the damages for which he is liable by producing evidence of other publications to the same effect as his; and it seems to me that it would involve an impossible conflict between this rule and the suggested proof of tarnished reputation to admit into consideration other contemporary publications about the same incident. A defamed man would only qualify for his full damages if he managed to sue the first defamer who set the ball rolling: and that, I think, is not and ought not to be the law.
I believe that in saying this I am doing no more than recognising the rule derived from Saunders v. Mills.8 This case was decided in 1829 and it has enjoyed a long and respected reign in the textbooks on libel."
Lord Radcliffe left open the possibility of proving bad reputation by means other than what he called 'the reception of such hazy generalities as a "well-known pickpocket" or 'a notorious prostitute'". He was not persuaded that the House's recent decision in Speidel v Plato Films Ltd resolved the issue. But he said at 399:
"I do not think it necessary to say anything on that point because, whatever this recent decision must be taken as laying down, I am confident that none of the members of the House contemplated that the evidence of reputation that they were speaking of could possibly embrace evidence of the use of repetition of the same defamatory words by other persons dealing contemporaneously with the same incident or subject. When one speaks of a plaintiff's "actual" reputation or "current" reputation (to quote my own adjective) one means his reputation as accumulated from one source or another over the period of time that precedes the occasion of the libel that is in suit."
The rule in Dingle was considered in Rath v Guardian Newspapers Ltd [2008] EWHC 398 (QB), where the defendant pleaded reliance on a failure by the claimant to complain about similar allegations in previous articles published in the same newspaper, and argued that in the light of modern developments in the law relating to what is admissible in mitigation of damages (in particular Burstein v Times Newspapers Ltd [2001] 1 WLR 579) it was at least arguable that this was a legitimate procedure. Tugendhat J rejected the argument and struck out the relevant pleading. No variant of the argument advanced to Tugendhat J has been advanced to me.
The ratio of Dingle is binding on me, and it was not suggested otherwise. I have identified its ratio above. It would in my view be quite wrong for me to distinguish the decision by taking the narrow view of its ratio that Mr Price suggests. There is no principled distinction to be drawn between the admission of other articles in mitigation of damages, as was attempted unsuccessfully in Dingle in a legal environment where damage was presumed, and the attempt to introduce such articles to reduce or limit damages in the present case, in the changed environment following the 2013 Act.
I would add that I am far from persuaded that there is anything fundamentally wrong with the rule in Dingle. The reasoning of Lords Radcliffe and Denning is persuasive, not only at the level of authority but also in terms of both principle and pragmatism. The argument at this trial has underlined some of the practical problems which would be liable to flow from the approach that is urged on me by the defendants. Somewhat perversely, publishers, ordinarily straining to scoop one another with a news story, would have the opposite incentive when it came to responsibility for damage to reputation. There would be a contest not to be found to be first. And it is of course not just a question of timing. One would have to consider the extent of any overlap between readerships. Mr Price's core submission would require some assessment of the overlap between the readership of A and B. There is no evidence on that issue in this case, and I see no reason to assume that there is any substantial overlap between the readership of the various publications at issue.
It seems to me that the principled justifications for adhering to the rule in Dingle are at least as strong as they were at the time it was decided. I have cited the principles identified by the House of Lords. Another, pointed out by Diplock LJ in the Court of Appeal (p189-190), is that the rule corresponds with basic principles of causation:
"If a man reads four newspapers at breakfast and reads substantially the same libel in each, liability does not depend on which paper he opens first. Perhaps one newspaper influences him more than another, but unless he can say he disregarded one altogether, then each is a substantial cause of the damage done to the plaintiff in his eyes."
Secondly, at common law, a publication which bears a meaning defamatory of the claimant is irrebuttably presumed to have caused the claimant damage, if the claimant chooses to sue upon it. It could be argued that the same approach should in logic and fairness be adopted by the common law when considering the impact, if any, of other published statements to the same or similar effect: the court should presume or at least infer that a statement having a defamatory tendency has in fact caused the harm which it is inherently liable to cause. Otherwise, the scales are set unevenly as between the parties. If I am right in my construction of s 1(1) of the 2013 Act, there is now no irrebuttable presumption of serious harm to reputation; it must be proved. Although it may sometimes be proved by inference, evidence of actual harm in the form of adverse social media responses, name-calling, or similar events is admissible, and may be necessary. In this new legal context, adherence to the limits set by Dingle on evidence of collateral harm to reputation may be more likely to hold the scales evenly between the parties than it did in the past. There is less room for complaint by defendants. There would be some room for complaint by claimants if defendants were now permitted to put in evidence other defamatory publications and, without more, invite an inference that these had caused serious harm to reputation. The position of a defendant would approximate to that of a claimant under the previous law.
I note that the impact of Dingle is modified by s 12 of the 1952 Act in a case where a previous publication has resulted in a claim for damages, whether or not that claim has succeeded. This may not be entirely logical, but it has two effects relevant to the present case. Co-defendants can in principle rely on each other's publications in mitigation. And a defendant such as AOL sued for two publications to the same effect can rely on the first in mitigation of damages in respect of the second.
D. REFERENCE AND DEFAMATORY MEANING
The publications complained of and their dates of first publication are as follows:-
20 January 2014 HuffingtonPost 'British victim of domestic abuse faces prison in UAE'.
24 January 2014 Independent (online) 'British mother Afsana Lachaux faces jail in Dubai after husband claims she kidnapped their son'
25 January 2014 Independent (print) 'British mother faces jail in Dubai after husband claims she kidnapped their son'
'i' (print only) '"Kidnap" mother abandoned by UK, family say'
6 February 2014 HuffingtonPost 'Distracted by a Big, Shiny Arms Deal - David Cameron Has Abandoned a British Citizen, Please Help'
10 February 2014 Evening Standard
(print and online) "Dubai's a small place - he took Louis in an instant"
(i) The first Post Article
It is not necessary to set out in full the words complained of given the narrow scope of the dispute. It is useful to set out some key passages however. The first article contained the following words (The numbering is mine).
"[1] When Afsana Lachaux left her job as a senior civil servant four years ago in London it was as a newly wed to start afresh in Dubai, but she could never have imagined how that dream would swiftly turn into a nightmare. A victim of domestic abuse, Afsana took her baby and bravely left her partner three years ago, but has been trapped in Dubai ever since as her ex-husband has exacted a prolonged campaign of intimidation and harassment against her.
[2] Now, on 21 January, she will appear in court accused of kidnapping her own child, as she suffers the consequences of the Emirati legal system that affords little protection for victims of domestic violence.
[3] Afsana Lachaux, a 46-year-old British citizen of Bangladeshi origin, had her passport taken from her in June 2011 after her abusive ex-husband used his influence with Emirati authorities to obtain an indefinite travel ban on her and her three-year-old son. Since then she has been forced to live in abject poverty, reliant on support from her two adult sons working in London, and seen her health deteriorate swiftly.
[4] The ex-husband, a wealthy foreign exchange dealer, told her that he would 'destroy her' at a divorce hearing and has successfully used the Emirati legal system to do just that. At a trial held in her absence, he was granted sole custody of their child after a judge ruled she was an unfit mother due to neglect on the basis that her child has eczema. In October 2013, after more than a year of living in hiding, Afsana's ex-husband snatched their child after finding out where they were living."
It is not disputed by AOL that, applying the objective test to which I have referred, this article referred to the claimant. For the purposes of the serious harm test, however, it is pointed out that the reference to Afsana's husband as a 'wealthy foreign exchange dealer' was inaccurate – as the claimant agrees.
The meanings complained of in respect of the first Post article are that:
i) while he was still married to and living with his ex-wife Afsana, the Claimant subjected her to physical abuse which she bravely left him to escape, taking their baby son with her;
ii) the Claimant falsely accused Afsana of kidnapping their son, a false charge which had unjustly left her facing jail in the UAE, when the truth was (as he knew) that she had justifiably taken him away with her to escape his abuse;
iii) the Claimant improperly threatened Afsana at a divorce hearing, telling her that he would 'destroy' her; and
iv) having tracked down Afsana after more than a year of living in hiding, the Claimant snatched their son back from her without justification and with callous disregard for his welfare.
The dispute relates only to the words that I have underlined. There are two elements to those words. In my judgment the first – the sting that the claimant snatched his son back 'without justification' - is plainly present. The entire tenor of the article is to suggest that the mother was justified in taking her child away from a violent father, and that he consequently was unjustified in taking the child back. The word 'snatching' itself conveys a wrongful act. I am not persuaded however that the additional imputation of callous disregard for the boy's welfare is present.
(ii) The Independent article
There is no material difference between the print and online versions of this article. Its meaning was determined by Sir David Eady, sitting as a Judge of the High Court, on 11 March 2015 when he ruled, [2015] EWHC 620 (QB), [40] that it meant that the claimant
i) became violent towards his ex-wife Afsana soon after the birth of their son, which caused her, fearing for her safety, to escape and go on the run with the child;
ii) having tracked Afsana down, callously and without justification snatched their son back from his mother's arms (and has never returned him);
iii) falsely accused Afsana of kidnapping their son, a false charge which if upheld could result in her, quite unfairly and wrongly, spending several years in a Dubai jail;
iv) was content to use Emirati law and its law enforcement system, which discriminate against women, in order to deprive Afsana of custody of and access to their son Louis;
v) hid the child's French passport and refused to allow him to be registered as a British citizen, as Afsana wished;
vi) was violent, abusive and controlling and caused Afsana to fear for her own safety;
vii) caused her passport to be confiscated thus for her to be trapped in the UAE;
viii) obtained custody on a false basis and also initiated a prosecution of Afsana in the UAE, which was founded upon a false allegation of abduction, and which gave rise to the risk of a lengthy prison sentence there.
At this trial IPL has disputed reference to the claimant. Mr Price advances a submission that notwithstanding these conclusions of Sir David Eady it is still necessary as a matter of law for the claimant to prove that he was referred to, and to do so by adducing evidence from readers of the publication complained of who understood it to refer to him. The claimant's Counsel initially responded that this argument was not open to IPL in the light of Sir David's findings. They then drew back from reliance on any estoppel and argued simply that the submission was wrong. I agree.
Mr Price's submission is that in principle, where a claimant is not named, and reference is put in issue by the defendant, the claim will normally fail in the absence of such evidence. It is only permissible to rely on an inference that there were such readers if it is obvious, and this is 'the only reasonable inference', he argues; and only rarely will the court grant a claimant the 'indulgence' of permitting reliance on inference. Mr Price has not persuaded me that there is any reason of principle why in this context an inference should be permitted only if there is no other reasonable inference, as opposed to being the one that is more likely than any other to be true. These submissions are in my judgment wrong in law and unsupported by the passages cited (Grappelli v Derek Block Holdings [1981] 1 WLR 822, 830; Fullam v Newcastle Chronicle and Journal Ltd [1977] 1 WLR 651, 6659B, Dwek v Macmillan Publisher Ltd [2000] EMLR 284 and Baturina v Times Newspapers Ltd [2011] 1 WLR 1526 [44]-[50]). These passages in my judgment represented no more than applications of established principle to particular facts. The true position is as I have stated above: the test is an objective one.
(iii) The i article
This is merely an abbreviated version of what appeared in the Independent, under the same by-line. It is not disputed that it bears the same defamatory meanings. Reference is established for the reasons given above.
(iv) The second Post Article
The article is long, but the words complained of are short. The article goes into detail about the 'botched arms deal' referred to in the headline The words complained appear at the end of the article (again, the numbering is mine):
…While this botched deal was playing out, a British citizen named Afsana Lachaux was in serious trouble. She still is.
Afsana is a Bangladeshi-born, British-raised woman – a lifelong civil servant (both local and national level), a mother to two graduate sons, who are now working in London. She had left for Dubai to start a new life with her French husband in 2010.
Sadly, shortly after arriving there, her spouse became violent and abusive. Terrified for her own life, she fled their Dubai apartment with their new baby son, Louis, just a few months old…".
It is not disputed by AOL that this second article referred to the claimant. The defamatory meaning attributed to these words by the claimant is that 'shortly after he arrived with Afsana in Dubai, the Claimant became violent and abusive towards her, causing her, terrified, to flee for her life.' The dispute concerns syntax only. I find that this article does bear the defamatory meaning complained of.
(v) The Evening Standard article
The defamatory meanings of this article were determined by Sir David Eady at the same time as he ruled on the meaning of the Independent article. He held that the Evening Standard article meant that the claimant:
i) became violent and abusive towards his ex-wife Afsana within months of marrying her, beating her and leaving her with bruises on at least one occasion;
ii) assaulted Afsana in public on custody visits relating to their young son;
iii) attempted to snatch their son on one custody visit, leaving him with a badly bruised head;
iv) callously and without justification snatched their son from out of his pushchair in the street (and has never returned him);
v) subjected Afsana to the injustice of facing jail in Dubai for "abducting" her own child, when in truth she had only fled with him to escape the Claimant's violent abuse;
vi) having chosen to obtain a divorce in a Sharia court, also used Emirati law and its law enforcement system, which discriminate against women, in order to deprive Afsana of custody of and access to their son Louis;
vii) hid the child's French passport and refused to allow him to be registered as a British citizen, as Afsana wished;
viii) was violent, abusive and controlling and caused Afsana to fear for her own safety;
ix) caused her passport to be confiscated thus for her to be trapped in the UAE;
x) threatened to report Rabbhi and Shabbir Yahiya to the police for aiding a kidnap if they came to Dubai;
xi) caused Afsana to go on the run with Louis;
xii) obtained custody on a false basis and also initiated a prosecution of Afsana in the UAE, which was founded upon a false allegation of abduction, and which gave rise to the risk of a lengthy prison sentence there.
As in the case of the IPL article, Mr Price argues that reference still needs to be established. That in my judgment is wrong for the reasons already given. The question of how many people in fact understood the words complained of to refer to the claimant is a question of fact to be determined by evidence or inference when considering harm.
E. THE SERIOUS HARM ISSUE
(i) The facts
The figures for circulation and readership, unique views and page impressions which I have given in paragraph [5] above are agreed. There is some disagreement about the extent to which those figures provide the full picture, which I will have to address. First, I must address the evidence of the witnesses.
The evidence for the claimant on the issue of serious harm is contained in two statements of the claimant, his evidence under cross-examination and in re-examination, and supporting witness statements of his solicitor Daniel Taylor, and three others. At the outset of the hearing I ruled substantial parts of these statements, other than Mr Taylor's, to be irrelevant and inadmissible at this trial. I deal with this in section G below. The defendant's evidence was given by AOL via witness statements of Mr Coad, its solicitor, Mr Riley AOL's Commercial and Audience Development Director, and Afsana.
I shall outline the undisputed facts, identify the areas of dispute, and then state and explain my findings of fact on those matters of significance which are disputed.
Undisputed matters
The claimant was born in 1974 in Muret, France and went to Lycee in Toulouse. In 1996 he graduated in Aerospace Mechanical Systems Design from the University Paul Sabatier in Toulouse. In 1998 he obtained a Master of Sciences degree in Aerospace Testing in France. In February 1998 the claimant undertook an internship with Honeywell International Inc, in Arizona, initially. Over the next five years, whilst working with Honeywell, he obtained an MBA degree from a graduate school in Arizona.
In September 2003 he left Honeywell and in October of that year he moved to Switzerland, where he spent a year working for Pilatus Aircraft Ltd. His employment was terminated by Pilatus in August 2004. Towards the end of that year he began work for Panasonic Avionics Corporation, based in Dubai. He has lived in the UAE ever since. He held a senior management position with Panasonic until mid-2011.
The claimant met Afsana in February 2008 in New Delhi, where he was then working. She is a British citizen of Bangladeshi origin who was then married to her second husband. She was unemployed at the time, but had been a senior civil servant in this country. Between December 2008 and September 2009 the two went on a series of vacations together in Paris, USA, Turkey, Qatar, Dubai, and Cuba. From about February 2009 they were in a relationship, and from about March/April 2009 discussed getting married. In September of 2009 the claimant learned that Afsana was pregnant with their son. She accepted his proposal in January 2010, and on 26 February 2010 they were married at The Old Marylebone Town Hall, London. There was a wedding lunch afterwards at a restaurant, attended by a dozen people. The couple then made their way to Dubai separately after that. Louis was born in Dubai on 4 April 2010.
The marriage soured soon after Louis was born, and before the wedding reception took place at the Manoir Au Quat' Saisons in Oxfordshire on 28 August 2010. The reception went ahead, however, with some 40 guests. In due course the marital relationship deteriorated to such an extent that in April 2011 the claimant petitioned for divorce in Dubai. In mid-2011 he was dismissed by Panasonic Aviation Inc, in circumstances that led to a successful employment claim by him against them. In August 2011 he tried to obtain a new position using contacts with recruitment agencies based in England, with whom he had registered in 2009. One such consultant is Keith Wills, who has made a statement in support of the claim. Mr Wills worked in Worcester for a company called Resource Group, as a specialist in recruitment for the aviation and aerospace industry.
Mr Wills initiated contact with the claimant in March 2009, having found his LinkedIn profile, and pitched to him a suggestion he move to a competitor of Panasonic. They had some contact over the following month or two, but the claimant stayed with Panasonic. The two were in contact again two years later after the claimant lost his job with Panasonic.
Mr Wills explains that the UK, and England in particular, is 'an incredibly important aviation and aerospace industry hub', with the industry employing 389,000 people directly or indirectly and having an annual turnover of £20 billion. There are therefore many aerospace recruiters in England, dealing with enquiries from the UK and abroad. Mr Wills describes the 'fluid' nature of the industry, with individuals constantly on the move; it is a 'small world.'
This evidence finds some support in the claimant's second witness statement, served during the hearing, which gives more detail of his attempts to find alternative work via recruiters. This shows he was contacted by a colleague of Mr Wills at Research Group in January 2010. He was in contact with Touch, recruiters based in Amesbury, Wiltshire, in October 2008, March 2009, May 2009 (when he was in London visiting Afsana), and August 2010 (when he came to England for the wedding reception). In about August 2012 he applied to Alpha Aviation Group of Crawley for aPost as Operations Manager. In June 2013 he applied for a job as Operations Director via an English company, Zenon Aviation. In August 2013 he was contacted by Arion Recruitment of London, about a role in Germany.
The claimant's efforts to find employment were not successful until February 2013, when he began working in the role he now occupies, as a teacher and instructor at the Military College in Abu Dhabi.
In January 2014 the claimant came to know about what he describes as a 'campaign to defame me in the English press'. He attributes this 'campaign' to Afsana and her son Rabbhi Yahiya. I make no findings on these allegations. I am only concerned with what was published by these defendants, what it meant, and how harmful it was.
It was on 23 January 2014 that the claimant first learned of the 'campaign'. It was brought to his attention by his Scottish friend Jim Macfarlane, who was then living in Dubai. Mr Macfarlane, one of the claimant's witnesses, was a Human Resources Manager with Panasonic from 1998-2007, which is how he came to know the claimant. He and his wife used to socialise with the claimant and Afsana. The Macfarlanes have since moved back to Scotland.
The claimant's statement says 'I then saw several media articles relating to myself and my son…' Mr Macfarlane's statement is a little clearer on what it was that he drew to the claimant's attention. He had seen 'several articles online' which he promptly brought to the claimant's attention. He confirms that one of these was the first Post article, which first appeared on 19 January 2014. The other published material available to be seen online on 23 January 2014 included the Emirates Centre for Human Rights item, and the articles in the Telegraph, Mail, Gulf News and National to which I have referred.
Mr Macfarlane says 'every time I had gone on the internet in January 2014 … there seemed to be another news item reporting Afsana's version of events.' Mr Macfarlane describes his own reaction to the publications he saw. He says he was surprised to see the allegations of assault made by Afsana. He says of his reaction to seeing the articles he mentions, 'Fortunately, I know Bruno well enough to know that the allegations made were false.'
On learning of the 'campaign' the claimant took two steps. He contacted the Dubai court, as 'some of the articles suggested that the next hearing in the criminal child abduction case … was due to take place on 3 February 2014.' The suggestion was wrong. The claimant also made contact with his solicitors, Taylor Hampton in early February. On 3 February 2014 he sent them an email listing 'the articles that troubled me the most'. Five such articles were listed in the email, by giving links to them, in this order: (1) the Independent article; (2) the first Post article; (3) a Daily Mail article of 23 January 2014; (4) a Daily Telegraph article of the same date; and (5) a further Daily Mail piece.
Subsequently, the claimant was advised that he could not sue in respect of the Daily Mail articles as these were protected by reporting privilege. However, the claimant entered into conditional fee agreements ('CFAs') with Taylor Hampton and Counsel, and obtained after-the-event ('ATE') insurance, in respect of claims against each of the present defendants. On 28 August 2014 Taylor Hampton wrote a detailed pre-action protocol letter to the Editor-in-Chief of the Post complaining of the first Post article. On 22 September 2014 they sent a detailed letter before action to the Editor of The Independent. On 23 September 2014 they wrote a similar letter to the Editor of the Evening Standard. Correspondence followed these initial letters which can fairly be described – particularly in the case of the AOL claims - as voluminous.
The first Post article was removed from its UK website on 29 September 2014. At the same time thePost published the following ('the Apology'):
" Rori Donaghy
Director at the Emirates Centre for Human Rights
British Victim on Domestic Abuse Faces Prison in the UAE
Posted 20/01/2014 16.58 GMT. Updated 29/09/2014 16.59 BST
On 20 January this year, the HuffPost UK published a blogPost by Rori Donaghy (Director at the Emirates Centre for Human Rights) headed "British Victim of Domestic Abuse faces Prison in the UAE". ThePost recorded the travails experienced under the Emirati legal system by Afsana Lachaux, a British citizen of Bangladeshi origin, in connection with a bitter custody battle with the ex-husband over their three year old son.
The HuffPost UK has received a complaint about thisPost from Afsana's ex-husband, and we accept that thePost might fairly be criticised for conveying a one-sided impression of the couple's dispute; it could have been made clearer that Afsana's allegations of domestic abuse were denied by her ex husband.
We are happy to put that right, and apologise to him for any embarrassment caused.
Follow Rori Donaghy on Twitter: www.twitter.com/roridonaghy86
On 1 November 2014 Taylor Hampton discovered the existence of the i article. The claim forms in the five actions were issued as follows: 2 December 2014 (The Independent and Evening Standard), 19 January 2015 (first Post article), 23 January 2015 ('i'), and 5 February 2015 (second Post article). The last two of these claim forms were not immediately served, nor were any letters or notices of claim sent in respect of them at that time. However, AOL discovered that a claim form had been issued and on 17 March 2015 took down the second article.
On 11 May 2015 Taylor Hampton wrote letters of claim about the secondPost article, and the i article. Each letter stated that they had discovered the publication of the further article 'In January this year'. This prompted responses from the defendants; solicitors pointing to apparent inconsistencies between that statement and other statements by Taylor Hampton. Proceedings in respect of the secondPost article and i article were served subsequently, under cover of letters confirming that the proceedings were covered by the CFA and ATE arrangements notified earlier.
Issues in dispute
The principal matters of fact which are in dispute on the issue of serious harm are these:
i) Whether vindication has been 'uppermost' in the claimant's mind in pursuing these proceedings.
ii) The nature and extent of the claimant's connections with and reputation in this jurisdiction.
iii) The extent to which readers of the words complained of are likely as a matter of fact, to have identified the claimant as the person referred to in the articles as Afsana's husband.
iv) The extent to which the agreed figures for readership and unique users are to be treated as augmented by viral or 'grapevine' publication via social media and otherwise.
v) The impact of thePost's cessation of publication and the Apology.
The first and last of these issues are raised by AOL and not by IPL or ESL. In cross-examination the claimant was challenged and questioned by Mr Barca about issues (i) to (iii). This was done primarily in reliance on the account contained in Afsana's two witness statements, but also with reference to disclosed documents. Mr Price did not cross-examine but, as he was entitled to do, claimed on behalf of his clients the benefit of any findings made by me in favour of AOL as a result of Mr Barca's cross-examination.
Discussion and findings
I have no hesitation in concluding that the claimant was genuinely dismayed and upset by the publication of the first Post article, the Independent article and the Evening Standard article, and that he was and remains sincerely concerned at the impact of those publications on his reputation. I accept Mr Macfarlane's evidence that he drew the first of these three articles to the claimant's attention on 23 January 2014. I find that the probability is that he also drew the claimant's attention to the Independent article, which was second in the claimant's list of 3 February 2014. I am satisfied that the primary aim of the proceedings in respect of those two publications, and the Evening Standard, which was discovered later, is the legitimate aim of protecting and vindicating the claimant's reputation.
I base these conclusions in part on my assessment of the claimant's written and oral evidence, including his demeanour in the witness box. His first witness statement expressed how 'tremendously difficult' it is for him to know that very many people here and in Dubai will have read the articles complained of. He expresses concern for his reputation among people who know him and those who do not, including concern about the impact on his professional reputation. Those are not by any means unfounded concerns, in my view, given the nature of the allegations and the extent of his acquaintance, which I discuss later.
Having heard the claimant cross-examined in some detail I am left wholly unpersuaded by Mr Barca's suggestion in closing, that I should treat the claimant's credibility as undermined by the content of his oral evidence. He gave his evidence in a dignified and correct manner, with conviction. It is true that, as I have mentioned, he gave evidence of matters additional to those detailed in his first witness statement, and gave late disclosure of documents. This should not have happened. However, I do not conclude that he had suppressed any documentation or was behaving dishonestly. I accept his explanation for the late disclosure: that he had located further documents when preparing to give evidence. Other matters of which he gave oral evidence that were not mentioned in his first witness statement emerged in the course of relevant responses to questions from Mr Barca. They emerged in a natural way, and it was not suggested that the claimant had schemed to add these matters. There was little attack on the accuracy of what he said. It was not put to him that he had invented matters. This was suggested in closing by Mr Barca. Such an accusation did not stick in my view.
I also base my conclusions on the following further factual matters and findings.
i) The claimant took prompt steps to seek legal advice. I note, incidentally, the order in which he listed the five articles of most concern to him when he emailed Taylor Hampton on 3 February 2014. The Post and Independent head the list, above the first Daily Mail article, which was published earlier than the Independent article.
ii) The unchallenged evidence is that by 11 February 2014 the claimant had obtained Arabic translations of the Post and Independent articles, as well as the Daily Mail pieces, which he produced to the judge at a hearing in Dubai on 11 February 2014 in the child abduction case.
iii) Although the initial letters of complaint took time, they were not in my judgment delayed because the claimant was not concerned to vindicate his reputation. The principal reasons were that the claimant's lawyers needed to establish the facts, review the merits, and secure an offer of ATE cover before deciding whether to offer to enter into CFAs with him.
a) The suggestion advanced to Nicol J on behalf of AOL, that the claimant was seeking to use these proceedings for the collateral purpose of harassing his ex-wife, was in my judgment inherently improbable. For one thing, he could have sued her personally. I have been shown no evidence that I consider supportive of the inference that in pursuing these defendants the claimant was in reality targeting Afsana. Mr Barca's second thoughts on this were the better ones. In the absence of any identified purpose other than vindication, however his invitation to infer that this was 'not uppermost' in the claimant's mind lacks persuasive force.
b) There is in any event a better explanation. The claimant's first witness statement explains, and I accept, that he 'wanted to get on with my complaints against the Post, Independent and Evening Standard as soon as possible, and indeed was agitated when this did not happen as quickly as I would have liked'. He could not fund the claims from his own pocket, or run them himself, and his lawyers had to get to grips with a complex history which included claims and counterclaims between him and Afsana.
c) This is corroborated by the letters before action in respect of all three claims. These gave details of the CFAs and ATE insurance and said this: 'Finally, you ought to be aware that since Mr Lachaux first consulted us in relation to this matter earlier this year, we have spent a considerable amount of time not only putting together the funding arrangements mentioned above, but also establishing the facts, collating evidence, and ensuring that our client's case is sound.'
A delay of seven or eight months between publication and first complaint is long, but far from unheard of. The limitation period in defamation is uniquely short, but still allows a year. One should be wary of drawing adverse inferences against a claimant who promptly seeks legal advice and makes complaint well within the limitation period. In this case, given the explanations provided, the delay cannot justify an inference that the claimant was not primarily concerned with vindication. Those explanations may not easily justify the whole of the period of delay, given that Taylor Hampton had confirmed a willingness to act for the claimant by mid-February 2014. However, the detail of what happened between then and August was not explored. It may well be that it involved an evidential exploration and evaluation, and the advice on merits which is ordinarily required before ATE is made available. There is no basis for inferring that the unexplained delay between February and the sending of the letters before action is accounted for by a lack of enthusiasm on the claimant's part for clearing his reputation of serious charges.
As for the second Post article, the factual picture has been muddied by what I am satisfied was a misstatement in Taylor Hampton's letter of claim of 11 May 2015, and a lack of clarity in Mr Taylor's witness statements on the subject. On the basis of Mr Taylor's second statement (paragraph 7) and the claimant's oral evidence I have however reached these conclusions. The article was not discovered in January 2015 as stated in the letter of claim, but in February 2014. That happened as a result of a search made by Taylor Hampton after the firm was instructed by the claimant. The article was discussed with the claimant at that time. In mid-February 2014, the firm advised the claimant that it was willing to act for him in relation to the first Post, Independent and Evening Standard articles. It did not express a willingness to act in relation to the secondPost article, but nor did it say it would not. The matter was put to one side, deliberately or otherwise, pending a later consideration of the possibility of additional claims.
The claimant gave evidence that there had to be consideration of whether to include a claim in respect of this article within the CFA, but of course the article is to the same broad effect as the first article. The claimant agreed, when this was put to him by Mr Barca, that he had been happy to leave it to the professional judgment of the lawyers to decide which articles to complain about. The likelihood in my judgment is that the second Post article was considered by all to be something of a makeweight, and was simply overlooked thereafter, until some time in about late 2014, whilst the claimant and his legal team concentrated their efforts on the three articles about which complaint was made in August of that year. The claim was in due course brought, on the lawyers' advice. The claimant's aim in approving this was the legitimate aim of vindication, but I do not consider that he saw this claim as more than an add-on.
The position in relation to the i article has some similarities. This, being a print-only publication, in the UK only, it did not come to the claimant's attention via Mr Macfarlane or through his own research. Nor was it turned up by database and internet searches undertaken by Taylor Hampton in February 2014. Taylor Hampton's letter of 11 May 2015 mistakenly said that the article had been discovered in January 2015. In fact it was discovered in November 2014 via a LexisNexis database search. It my opinion, the likelihood is that this too was a matter on which a decision was left by the claimant to his lawyers' professional judgment. The claim was managed in the same way as the claim in respect of the second Post article. The claimant had no collateral motive. There is, however, one very obvious distinction between the position in relation to the second Post article and the article in i: the far greater circulation and readership of the latter.
Before I turn to the nature and extent of the claimant's contacts in and reputation in England and Wales I should note that the extent of his reputation in Dubai has not been explored in any detail in the evidence and submissions. However the Amended Particulars of Claim invite an inference of publication to a substantial number of friends and acquaintances there, and it is reasonable to infer that, as someone who had lived and worked in the UAE for nearly 10 years by the time these articles were first published the claimant has a substantial reputation there.
My findings in relation to the claimant's connections to and the extent of his reputation in England and Wales are as follows:
i) The claimant visited England on at least the following occasions: 2005, when he attended a three day training course in London with Panasonic; May 2009, when he visited his 'significant other', Afsana, for a period of some days (email of 26 May to Phil Newton of Touch); November 2009 (he produced an old tube ticket to prove this); the end of January and February 2010 (to meet Afsana's family and for the wedding); August 2010 (for the wedding reception).
ii) The claimant personally knows and/or is known to the following people who are residents of England and Wales or who may have read or may read the words complained of here (and/or in some cases in Dubai):-
a) members of Afsana's family;
b) friends and acquaintances of Afsana, personal and professional; I accept the claimant's evidence that Afsana has a wide circle of friends and connections, rather than the narrow one which she maintains. He explained convincingly that the reason why the guest list for the wedding reception was quite restricted was that many people would have had to come a very long way;
c) relatives of the claimant: he has two cousins who live here, named Eric and Remi Vaizelle; Remi has a wife and family; I accept the claimant's evidence about these relatives, which was that he knows them and spoke to Afsana of both;
d) personal friends and acquaintances made by the claimant himself who are resident here; the claimant's statement names by way of example ten of these, besides the Macfarlanes, who live in Scotland;
e) professional contacts in the recruitment business (I have given some of the names above);
f) professional contacts in the aviation sector who live and work in the UK (the claimant identifies persons who work for the companies SITA, Rockwell Collins, Serco, Jet Airways and McKinsey and Co.);
g) English colleagues with whom the claimant worked in previous jobs in the aerospace industry (the claimant names five of these, by way of example);
h) British nationals whom the claimant has got to know working in Dubai (the claimant names eight such, one of whom is his witness Salim Kudus, now living in Australia, and refers to others who were English or lived and worked in England);
i) individuals contacted in the course of his present work; several of the claimant's current colleagues are British, and some ordinarily resident here and working only temporarily in Abu Dhabi;
j) pilots whom the claimant meets on trips around the world in connection with his work, including former BA and RAF pilots.
Mr Barca challenged the claimant's evidence on some of these matters, putting to him what Afsana says in her second witness statement. The attempt was not especially successful. For instance, among his own friends and acquaintances in this jurisdiction the claimant identified Vishal Nischshal and Bijal Batavia. It was suggested to him that they were Indian citizens living here temporarily. The claimant replied that they are now British citizens who have lived here since 2008 or 2009. Challenged over Carol Alderson, the claimant agreed she was a Dubai lawyer in the firm acting for him in the divorce, but said she had come across the articles when she was in the UK. He added that a Dubai consultant named Marie Barton had done the same. It was put to the claimant that Alistair and Caroline Peel, whom he named, had not returned to the UK since they met Afsana in Dubai. He replied that he thought they were both in the UK now, having contacted Alistair Peel for comment on what Afsana had said in her second statement.
This all reflects, in my judgment, two things. One is that the witness statement could and should have been fuller. The other is however that there are inherent difficulties for a claimant in the position of Mr Lachaux in being asked to list everybody he can think of whom he knows or who knows him who might have read a publication of which he complains. For a professional person in an international business nowadays, the task is all but impossible. If the claimant is honest, and his claim is genuine, it is all but inevitable that if challenged in the way that happened here, his memory will be jogged, and some additional details or even additional individuals will be identified.
A court must always be cautious of lists of names or other details preceded by 'for example', whether such lists appear in statements of case or witness statements. Too often, this formula can falsely suggest that there are numerous other unidentified examples. In this case, however, the unforced emergence of the name and details of Marie Barton leaves me with the firm impression that the formula, as used in the claimant's evidence, reflects the existence of some other examples that could be given. I do not find that the other examples are very numerous, but I am satisfied that the pool of those who know or know of the claimant is larger than the list of names he has provided.
As to actual identification by readers of the articles complained of, it seems to me that anyone in any of the categories I have listed above who read any of those articles is likely to have identified the claimant as the husband referred to. Of course, the Independent referred to a wealthy foreign exchange dealer, but that false detail is not likely to have misled a reader in any of the specified classes. There is much in each article that is distinctive of the claimant, and unlikely to be taken by any informed reader as indicating some other Frenchman called Lachaux living in Dubai with an ex-wife called Afsana.
How many of these people actually did read one or more of the articles it is impossible to determine with any kind of precision. One can say with some confidence that it is not likely that every single one of them did so. It can be said with confidence that Mr Macfarlane read the firsPost article and the Independent article, and I accept that the two women identified by the claimant as having read the words complained of did read one or more of the offending articles. The true position as to the extent of publication to people who know the claimant or know of him will lie somewhere between these two extremes.
I do not think I would be justified in accepting the defendants' submission that the absence of 'tangible' evidence of adverse responses to publication indicates that the true position lies towards the 'Macfarlane' end of the spectrum, or that those who did read the offending words were unaffected by it. Mr Macfarlane is evidently a good friend of the claimant, who was confident enough to trust him over the publishers on a matter of this kind. Only two other individuals have been named as having read some of the words complained of, and there is no evidence of their reaction to whatever it was they read. But it is only human nature for people with less close relationships whose opinion of a defamed individual has been affected, to shy away from raising the matter with that individual. Sometimes there is an outward display of hostility, or an overt shunning or avoidance of a person. But evidence of that kind has always been rare, for obvious reasons. The advent of social media has notoriously increased public online denunciation by strangers, but there is no evidence that it is common for friends or acquaintances to do this. My conclusion is therefore that there were, on the balance of probabilities, tens of people and possibly more than 100 who know or know of the claimant and read one or more of the articles and identified him, and who thought the worse of him as a result.
That is not the end of the matter, as the impact of publication is never confined to the initial readers. It will always, to some degree, include people to whom the sting is passed on via the 'grapevine' including, today, social media. As to that, there was some debate at the hearing as to whether the impact of such republication by electronic means had been taken into account in Mr Riley's calculations. It seems to me that one can be confident that it had not, as there are ways in which electronic republication can occur which would not be captured by Mr Riley's figures. I do not give great weight to this, however, as it seems that Facebook 'likes' and other mainstream ways of passing on information have been taken into account. I do not discount, however, repetition by email or word of mouth. I do not believe that the 'grapevine' is nowadays wholly visible to the onlooker, as the defendants submitted. In the end, however, these points do not, for reasons which will appear, seem to me to be of great importance in this case.
What I think of rather greater significance is that all this discussion tends to leave out of account, as if it was unimportant, the impact of publication on the claimant's reputation in the eyes of people who do not already know the claimant. A person can after all be defamed, and seriously defamed, in the eyes of those who do not know him. He does not need to establish an existing reputation in order to complain, and may be entitled to substantial damages for the harm to his reputation caused by publication to people who have never heard of him. This was acknowledged in Jameel. The matter is discussed in Ames at [41]-[42].
Here, it cannot be and is not said that the allegations are trivial. The AOL readership was not enormous, but not minimal – at least in the case of the first article. IPL may have published directly to as many as 1 million people, and ESL to as many as 2.5 million. I take the defendants' case to be, in summary, that insofar as such publication caused harm to the claimant's reputation in the eyes of people whom the claimant does not know, and who do not know him, that is not serious harm. That is not an untenable argument in principle, for reasons given in Ames at [43], but it will be a rare case in my judgment in which such a proposition can be made good on the facts.
It is in this context that it was relevant for the parties to explore the prospect of Louis going to school in England, and the chances of the claimant working here, in that or any other event. I do not think that if serious harm has not yet occurred it could be said that future serious harm was probable for those reasons. What can properly be said is that present harm to reputation in the eyes of those who do not yet know a person can be serious if their opinion of him matters. That may be so if there is a real prospect that the claimant will come into contact with such people, or if he is likely to take steps to avoid such contact because of his tarnished reputation in their eyes. In the event, I think the prospect of father or son or both coming to this country is a real one, and a matter for consideration on serious harm for the reasons I have given. More significant, in my view, is the nature of the claimant's work. He is in an industry that is by its nature international. He has remained in the Middle East for many years, but he travels a considerable amount. In his work to date he has moved jobs internationally, and shown an interest in working elsewhere. He deals with many people who are resident here. There is some truth in Mr Barca's submission that the claimant's present 'centre of interests' lies in the UAE. It does not by any means follow that he cannot be caused harm to reputation that is serious by publication in this jurisdiction.
(ii) Application of the law to the facts
I address each article separately, in chronological order.
First Post article
I find that the publication of this article has caused serious harm to the claimant's reputation. The defamatory meanings conveyed are serious. The topic is serious. The article is plainly meant to be taken seriously. The publisher is reputable. The article remained online for over 9 months. It was directly published, on the agreed figures, to 3,250 unique visitors in the UK (of which I find the vast majority will have been in this jurisdiction) and to 1,360 unique visitors in the UAE. These are figures for the website and thePost's mobile apps. I accept that these figures may understate the number of visitors slightly, because visits from a single IP address are treated as unique visitors. I accept that there will inevitably have been some republication in each jurisdiction which is not captured by these agreed figures. In addition, it does appear that there were hundreds of tweets of the article. I do not, however, attribute great weight to these points.
The principal grounds for concluding that the publication caused serious harm are (a) that publication on the agreed scale is inherently likely to have reached a significant number of people – by which I mean at the very least a dozen - who know the claimant or know of him, whose opinion of him is likely to have been seriously affected in an adverse way; and (b) that the probability is that the claimant's reputation has been seriously harmed in the eyes of others, whose opinion of him matters. Mr Macfarlane is clearly a person whom this article did reach, who knew who it was about, but whose opinion of the claimant was not so affected. But he was a close friend. For the reasons given above I do not agree that the absence of visible or tangible evidence of adverse reactions from other identifiable publishees undermines my conclusions. As the claimant said in his oral evidence, though in different words, silence is not evidence of the absence of impact.
I do not consider that the Apology serves significantly to reduce the harm done by the publication. It apologised for not stating that the claimant denied Afsana's allegations. It did not retract those allegations or suggest they were false. The original headline remained, describing Afsana as a 'victim'. I am not persuaded that the Apology 'compounded' the damage as submitted by Ms Page, but it did not in my judgment undo damage caused earlier.
Nor, to the extent this was advanced as an argument, do I consider that the claimant can be said to be causally responsible for the harm to reputation, because he failed to make complaint until August 2014. The point was certainly made in cross-examination in relation to the second Post article, that AOL could not be held responsible for continuing publication when the claimant knew of the article yet failed to complain. That was in my opinion an argument without foundation in that and the present context.
The Independent
I find that this publication has caused serious harm to the claimant's reputation. The reasons for that conclusion resemble those I have given above in respect of the Post, but the arguments are the stronger in this instance. The defamatory imputations were to similar effect, in a serious article in a reputable newspaper. The scale of their publication was vastly greater. The circulation of the print copy was 77,185, in the jurisdiction. The range of estimated readership figures given at [5] above is the result of multiplying this by 2 or 3. The online publication was much more modest, but still substantial at 5,153 unique users in the UK and 401 in Dubai between first publication and 12 May 2015, and 25 and 1 after that.
I would not have found this last category of publication, if it had stood in isolation, to be sufficient evidence from which to infer serious harm. But that does not affect my overall conclusions. This is another publication that came to Mr Macfarlane's attention in January 2014, which supports an inference that others who knew the claimant, including in Dubai, also saw it. The fact that there is no other affirmative evidence identifying a reader of this article does not dissuade me from drawing the inference that serious harm was caused, for the reasons given above in respect of the firstPost article. Mr Price makes the point that the defamatory meanings which Sir David Eady found this article to bear cover meanings his clients defend as true which are not complained of by the claimant. He submits that in the absence of amendment those meanings ought not to be taken into account in resolving the issue of serious harm. I have taken account of all the meanings found, as a whole, but my conclusions would have been the same had I confined myself to those specifically complained of in the Particulars of Claim.
The 'i'
I find that this publication also has caused serious harm to the claimant's reputation. Again, the reasoning is similar to that given above, though in this instance there is no online publication and none in Dubai. However, the imputations are serious, as is the newspaper, and the circulation (261,759) and estimated readership (2 or 3 x circulation, so up to 785,277) in this jurisdiction are both very substantial. No individual is identified as having read this article, but the claimant's evidence identifies two by name who read some of the material complained of, besides Mr Macfarlane. They read it in this country. That is evidence of matters that are inherently probable. It is not possible to say which of the offending articles either woman read, but the candidates are The Independent, The 'i', and the Evening Standard. The inference of serious reputational harm is justified.
Second Post article
The claimant has not persuaded me that this publication has caused serious harm to his reputation, or that it is likely to cause such harm. This was an article of 32 paragraphs, the primary focus of which was on the arms deal referred to in the headline. The words complained of appear in three of those paragraphs, towards the end. The article was published on 6 February 2014. Although it remained online for 13 months the total number of unique visitors over that period is 306. It is a natural inference, supported by the figures for the Independent online, that the majority of these were early in the publication period, when the piece was new. Mr Macfarlane was not one of those publishees, however, even though he had seen the earlier Post article and was clearly attentive to stories about the claimant at that time. Had he seen the second article he would surely have mentioned it to the claimant, and on the evidence he plainly did not. The claimant himself did not become aware of it until it was turned up by his solicitors' search in February 2014.
Neither the claimant nor Taylor Hampton seem to have done anything about the matter for the best part of a year after that. He left it to them, and they took no action. He does not appear to have chased them about that. In this instance I consider it reasonable to infer from the absence of action that nobody saw a pressing need for vindication in respect of this article. I conclude that the reason was that there was already a claim on foot for vindication in respect of an article addressed to the same readership which contained the same allegations, and others more equally if not more serious. It is legitimate by virtue of s 12 of the Defamation Act 1952 to take into consideration the claim in respect of the firstPost article as a matter capable of mitigating damage. The article has now been removed This is a claim which, looked at in isolation, fails to cross the statutory threshold. The fact that there is another valid claim against AOL on foot is not a justification for allowing this separate claim to proceed.
The Evening Standard
I find this publication has caused serious harm to the claimant's reputation. Like the Independent and i articles, this contained grave allegations very widely published. The Standard has the largest circulation of all, at 835,779. As before, the estimated readership figures at [5] above are arrived at by multiplying this by 2 or 3. The inference of serious reputational harm seems to me inescapable. The fact that the claimant is foreign and lives abroad does not mean that ESL can publish seriously defamatory allegations about him to as many as 2.5 million people in this jurisdiction with impunity. That is not, in my judgment, a consequence that Parliament intended to achieve by raising the threshold in s 1. As in the case of the Independent, the meanings found by Sir David Eady go beyond those complained of by the claimant, and he has not amended his claim. In reaching my conclusion on serious harm I have taken into account all the meanings found, but my conclusion would have been the same if I had confined myself to those specifically complained of.
'Other publications'
In reaching my above conclusions on the five articles complained of I have left out of account the other publications relied on by the defendants in relation to harm. That is on the basis that Dingle means they are inadmissible on the issue of harm to reputation. By contrast, s 12 of the 1952 Act expressly allows each of the publications complained of in these actions to be taken into account in mitigation of damages in relation to any other such publication. The defendants have, perhaps understandably, refrained from running cut-throat defences on serious harm in reliance on s 12. I have nonetheless taken s 12 into account in reaching my conclusion on the secondPost article. I have considered it in respect of the other claims, but concluded that in the absence of any evidence of overlap in readership the only relevance of s 12 is to underline the point that each publication must be considered in isolation.
F. JAMEEL
My conclusions on the preliminary issues for trial in the AOL claims (paragraph [18] above) are that:-
i) the pursuit of the first AOL claim does not constitute an abuse of process on any of the four bases identified in the order of Nicola Davies J;
ii) the Jameel issue does not arise in relation to the second AOL claim, because in the absence of serious harm to reputation there is no cause of action; I might well have concluded in any event that it was unnecessary and disproportionate to add this claim to the claim in respect of the first article.
I add this in relation to my conclusion on the first claim. So far as the threshold of seriousness is concerned, that conclusion must follow inevitably from my findings on serious harm, which is a more exacting test than Jameel. I have however taken account of proportionality and in particular, two issues that have arisen in the course of argument.
The first is whether there are any alternative means by which the claimant could pursue his complaints over these publications. Mr Price, to whom I put these points although they arose in the context of Jameel, identified these alternatives: self-help, in the form of a response to the publishers or a self-published statement; and a regulatory complaint to the Independent Press Standards Organisation. I am not persuaded that any of these would represent a satisfactory substitute for a libel claim. AOL has done little in response to the claims. IPSO's procedures are little-tested. Its predecessor, the PCC, did not provide a satisfactory forum for the resolution of complex legal or factual disputes. A claim in data protection law for breach of the Second Principle was identified by me as a candidate, but not advanced with any enthusiasm by any party.
The other point to which I should refer is an argument advanced by AOL, IPL and ESL, that the impact of other publications on reputation may be relevant and admissible in the Jameel context, whatever the merits of the rule in Dingle. Mr Barca refers to observations of Eady J in Kaschke v Osler [2010] EWHC 1075 (QB) [20] as authority for the proposition that what matters is the 'marginal effect' of the publication complained of. Mr Price refers to Karpov v Browder [2013] EWHC 3071 (QB), [2014] EMLR 8 and Subotic v Knezevic [2013] EWHC 3011 (QB) as cases where 'the existence of numerous other publications to similar effect was relevant as to whether the publications complained of constituted a real and substantial tort', on the basis that the extent of harm caused by the latter must be judged in the context of the former.
I am not persuaded that either submission accurately reflects the law in this area. The publication taken into account by Eady J in Kaschke as relevant to the need for vindication was aPosting by the claimant herself revealing, truthfully, that she had at one time been under suspicion as a terrorist: see [8]. Such a factual scenario raises different issues, as is evident from [23(i)-(iv)] of the judgment. The decision in Subotic was not materially founded on the harmful impact of other publications. In Karpov such impact does appear to have been a factor, but the key publication was a public denunciation by the US authorities, which may be within the exceptions to Dingle. In any event these decisions predated the entry into force of s 1(1). I find it hard to see how the pursuit of an action in respect of a publication that has caused serious harm to reputation can be characterised as an abuse on these grounds.
G. PROCEDURE AND THE TRIAL PROCESS
This trial has given rise to procedural points some of which are likely to have wider significance in relation to the trial of preliminary issues on serious harm and/or Jameel abuse. There are five points: (1) the separation of trials on meaning and serious harm; (2) the extent to which it is desirable for the parties' cases on the merits to be pleaded out in advance of a preliminary issue trial such as this; (3) the content of witness statements for the trial of such issues; (4) disclosure; and (5) cross-examination. To set these points in context I need to outline the procedural history.
(i) Procedural history
In the first two IPL and ESL claims, the Defendants served Defences on 23 January 2015 containing defences of truth and public interest. Sir David Eady then tried the issue of meaning in each of those actions and handed down his judgment on 11 March 2015. By the time the matter came before Nicola Davies J on 18 March 2015 the statements of case had not moved on. The claimant had not served any Reply to the Defences of IPL and ESL, and no Defence had been served by AOL.
Nicola Davies J rejected the claimant's submission that AOL should serve a Defence before any preliminary issue trial. Instead, she ordered such a trial and extended time for service of Defences by AOL until after judgment on the preliminary issues. On 29 June 2015 Nicol J took a similar course, extending time for service of a Reply in the IPL action, and for service of Defences in the second IPL claim, again until after judgment. Nicol J consolidated the two actions against AOL, and the two against IPL and ESL.
The orders of Nicola Davies and Nicol JJ laid down a procedural regime to ensure the preliminary issues identified by their orders were fully prepared for this trial. Nicola Davies J directed AOL to state by letter the respects if any in which its case on serious harm differed from that pleaded by IPL and ESL. She directed the claimant to plead to that statement of case. Each order set a timetable for disclosure and inspection of documents, exchange of witness statements and supplementary witness statements, in relation to the preliminary issues. The direction as to supplementary witness statements provided a date for such statements to be served if necessary 'responding to the witness statements already served.' The date for service of such statements, as amended by the order of Nicol J, was 13 July 2015, a week before this hearing. The timetable was adhered to.
At the outset of the hearing Mr Barca applied for an order striking out substantial portions of the statements of the claimant, Mr Wills, Mr Macfarlane, and Mr Kudus on the grounds that they were irrelevant and, in part, unfairly prejudicial to Afsana. After hearing Ms Page in opposition to the application I upheld Mr Barca's objection and ruled that the statements of these witnesses should not be open to public inspection other than in a redacted form, omitting the objectionable material.
Mr Barca cross-examined the claimant for a substantial part of the first day of the trial. In the course of his answers the claimant gave evidence about matters relevant to harm which had not been mentioned by him in his witness statement, or otherwise put in evidence. The claimant also referred to documents, copies of which he had brought with him to the witness box, which had not been disclosed by him.
Mr Barca understandably complained of this fresh evidence and new documentation. Overnight, the claimant made a second witness statement explaining the position and copies of these documents were produced and supplied to the defence team. Mr Barca applied to cross-examine further on these matters, but I declined to allow that in view of the pressure of time and Ms Page's express acceptance on the claimant's behalf that she would not seek, on account of a failure to cross-examine, to limit his freedom to comment on the issues raised.
(ii) Procedural issues
(1) Separating meaning and harm
Sir David Eady mentioned at the outset of his judgment that there had been considerable debate at the hearing about the merit of proceeding with a determination of meaning. I can understand why, with the parties present before him, he went ahead. Without at this stage attributing responsibility to either party, however, I can say that it is inherently undesirable to separate the trial of issues of meaning and serious harm. Generally, the issues should be tried together: see Ames [101].
(2) Service of Defence and Reply
In my judgment, Nicola Davies J and Nicol J were clearly right to extend time for service of further Defences and Replies. Without, again, attributing blame or responsibility to any party at this stage, and subject always to the circumstances of individual cases, I would say this. It will generally be not only unnecessary but also undesirable for a defendant raising a threshold issue, such as a contention that the claim against it does not meet the serious harm requirement to be required to plead a Defence before that issue is determined. The existence or otherwise of a substantive defence is immaterial for that purpose. As Mr Barca has observed, there is another point. An offer of amends under the Defamation Act 1996 can only be made before service of a Defence. This is a point of relevance not only to defendants but also to claimants, who may prefer an offer of amends to a costly contest on the merits.
In these circumstances it seems to me that it may be unwise for a defendant raising a threshold issue to choose to plead a Defence, if not required to do so. Defendants who choose to plead a substantive defence will do so at risk as to costs, if they later succeed on the issue of harm. Similarly, a claimant who chooses to serve a Reply when such an issue has been raised may be at risk as to the costs of doing so.
(3) The Content of Witness Statements
Two issues arise: relevance, and sufficiency. I shall deal with them in turn.
The claimant's first witness statement is 34 pages long, consisting of 138 paragraphs. A large proportion of this deals with matters other than harm to reputation. The statement covers a wide range of matters including things said by Afsana during the wedding lunch about the claimant's wealth, details of the breakdown of their relationship, Afsana's conduct towards the claimant and their son, the content of correspondence between the two, Afsana's tax affairs, the divorce proceedings, a fake Facebook account, the claimant's dismissal by Panasonic Avionics in June 2011, and defamatory emails about the claimant purporting to originate from 'Tom Daly' and/or 'Hamed'. The statement sets out to deal in considerable detail with the truth or falsity of the articles complained of.
Mr Wills' statement also deals with allegedly pseudonymous emails about the claimant and contained his opinion about how damaging the articles complained of would be to the claimant. Mr Macfarlane's statement describes some conduct of Afsana, his own dismissal from Panasonic and the alleged reasons for it, and gives his opinion about the meaning and likely effect of the articles complained of. Mr Kudus dealt with a conversation in or around March/April 2011 between his family's nanny and Afsana, and things he was told by his wife about Afsana.
Mr Barca's application to strike out these parts of the claimant's witness statements as irrelevant was founded on the general power of the court under CPR 3.1(2)(m) to 'take any other step or make any other order for the purpose of managing the case and furthering the overriding objective'. In support of his application Mr Barca relied on Sandhurst Holdings Ltd v Grosvenor Assets Ltd (Ch D, 17 July 2001) [2001] LTL, October 25, 2001, and to GG v YY [2014] EWHC 1627 (QB). In Sandhurst it was common ground that witness statements or parts may be struck out under r 3.1(2)(m) if they are irrelevant and scandalous, and the court and opposite party ought not to be embarrassed by having to deal with them. Hart J declined to exercise the power.
In GG v YY Tugendhat J did exercise the power under CPR 3.1(2)(m) to strike out entire witness statements on the grounds that they were 'irrelevant to the matters in respect of which they are purportedly made, and so are an abuse of the court's process and likely to obstruct the just disposal of the proceedings': [2014] EWHC 1627 (QB) [51]. Reference was also made in the course of argument in GG to the court's powers under CPR 32.1(1) to control the evidence, and its powers under CPR 32.13(2) to direct that, by way of exception to the general rule in r 32.12(1), a witness statement which has been put in evidence at a hearing in public should not be open to inspection: see ibid., [43-45].
Pointing out that this is the general rule, Mr Barca submitted that for that reason it was not merely a matter of my deciding in due course whether or not the material to which he objected was or was not relevant to my determination, I needed to rule whether it ought to go on the public record. As a fall-back or alternative position, he invited me to exercise my powers under CPR 32.
I did not understand Ms Page to suggest that the passages to which objection was taken by AOL contained any admissible evidence relevant to the issue of whether the publications had caused serious harm to reputation. That was clearly correct on her own approach to the serious harm requirement. It was also surely right if as I have held s 1(1) permits examination of the evidence of harm. That approach means that the actual response of individuals to the publication complained of is relevant and admissible. That may depend on what those individuals believed about the truth of the matter before they read the offending statement. That, however, does not call for a determination of what in fact was the truth of the matter. In any event, in this case, the claimant's evidence of falsity was plainly not directed to or relevant to the issue of serious harm to reputation.
Ms Page advanced three main submissions.
i) The threshold for striking out a witness statement or part of it is a high one. She relied on what Hart J said in Sandhurst Holdings: 'this is not a jurisdiction which should be lightly exercised'. AOL do not come close to meeting the threshold, it was submitted.
ii) Since IPL and ESL have placed defences of truth on the record, and these are open to public inspection (CPR 5.4C), it is fair and reasonable for the claimant to respond publicly, and for the court to allow him to do that through a witness statement. He could have done so in a Reply, but that would have been a more expensive and hence disproportionate exercise. To strike out parts of the statement would be unjust as it would leave the public with an unbalanced picture, and permit the publication under the protection of reporting privilege of the allegations against him without his own refutation of those allegations.
iii) In order to assess whether an action is a Jameel abuse it is relevant for the court to consider the extent to which the allegations are said to be false, and the extent to which, if the claimant succeeds, he will make clear not only that he has been grossly libelled but that the public has been seriously misled. Libel actions depend on the particular facts – and in order to understand how seriously defamatory it is, one needs to know more than just the broad lines of the story. The details of the denial are critical.
These submissions fail to engage with some of the grounds of objection to the passages complained of by Mr Barca. On any view, the opinions of witnesses about how damaging the articles were or would be in the eyes of others are inadmissible. Nor could these arguments possibly justify the admission of evidence about pseudonymous emails, the contents of which are not complained of against these defendants. I do not consider these arguments justify, either, the inclusion in a witness statement served for the express and limited purpose of this preliminary issue trial of detailed material going to the question of whether the publications were or were not true.
Ms Page's first argument as to relevance only begins to get off the ground because in this case IPL and ESL have served Defences containing detailed pleas of truth. As I have said, in general it is undesirable for Defences to be served in cases where serious harm and/or Jameel are raised and are suitable for preliminary trial. In the absence of a substantive defence, on the public record, this first justification for a detailed response would inevitably fail. The mere fact that, in private correspondence, a defendant had asserted the truth of a statement complained of as a libel could not possibly justify pages of detailed refutation in a witness statement prepared for a trial such as this. There could be, and indeed is, no objection to the claimant stating firmly and unequivocally that there is no truth in the allegations his ex-wife has made against him and which the defendants have reported. Going into detail is a different matter.
I do not regard the fact that substantive Defences are on the record in the IPL and ESL cases as coming close to being a sufficient justification for the extensive detail in the claimant's first statement of the matters to which I have referred, or for the other passages objected to. The risk of unbalanced reporting is legally and factually slender. That is because the privilege for reports of the contents of public documents such as statements of case is subject to proof that the publication is for the public benefit: see s 15(3) of the Defamation Act 1996. As those responsible for safeguarding the legal interests of commercial publishers are well aware, this requires balanced reporting. The point was made by Tugendhat J in Qadir v Associated Newspapers Ltd [2012] EWHC 2606 (QB), [2013] EMLR 15 where reporting of the contents of a claim form was in issue. At [100-101] the Judge said this:
"… as a general rule (that is one to which there may be exceptions) it will not be for the public benefit to publish any defamatory allegations made in a claim form of particulars of claim available to the public from the court under CPR 5.4C without at the same time publishing the fact that the defendant has denied, or is disputing, the allegations, as the case may be. The effect of s 15(3) is to give the court trying a defamation action the power and duty to consider a balancing exercise on the particular facts of the case. In effect in that, and in the predecessor legislation, Parliament has required the court to carry out a balancing exercise similar to the one which has now become familiar under the HRA, namely art.10 and art. 8 (see Re S (A Child) (Identification: Restrictions on Publication) [2005] 1 AC 593, Lord Steyn at [17].
I find it hard to envisage any circumstances in which there would be a public benefit in publishing defamatory extracts from a claim form or particulars of claim without there being included in the publication a statement that the allegations are disputed or, if it be the case, denied."
The failure of the defendant in Qadir to report a denial and the contents of the Defence once it was aware of these defeated its reporting privilege defence. The observations of Tugendhat J must apply, with the necessary modifications, to reporting of a Defence. Experience also suggests that unbalanced reporting is factually improbable in a case such as this, where one ex-spouse is already suing three publishing companies for libel over allegations of misconduct originating with another ex-spouse.
I think Ms Page places too much weight on the observation of Hart J in Sandhurst Holdings. Of course, parties and the court should beware of devoting cost to nit-picking objections to witness statements in judge-alone hearings. It will often be disproportionate to engage in this kind of exercise. But if a serious principled objection is raised, the court should not shrink from addressing it, especially if it may have significant consequences for reporting and/or costs. In doing so, it seems to me that the appropriate test is the overriding objective. Judged by that yardstick, the passages objected to cannot be held acceptable on the first basis advanced by Ms Page.
As for Ms Page's second argument, relating to Jameel, this in my judgment was weaker than her first. I have certainly not found it necessary to reach any view at all about the extent or merits of the dispute over truth. My view is that in defamation cases where the publication complained of has caused or is likely to cause serious harm to reputation the Jameel jurisdiction will generally have no role to play. Even if I was wrong about that, it seems to me that the court should be wary of engaging, in the course of a Jameel application, or trial, in any detailed assessment of the substantive defences which defendants advance, or say they will advance if the serious harm requirement is satisfied. It should usually be possible to assess whether the claim is serving a legitimate aim proportionate to the likely costs of resolving the dispute, without an assessment of the merits.
For these reasons I concluded that the material objected to was irrelevant or otherwise inadmissible and ought not to be made public at this hearing. It did not seem to me to be necessary however to go so far as to strike out the passages objected to, as they might become relevant in future and it would be wasteful to require a further statement to be made reinserting the material. A witness statement is not available to the public as of right other than at a public hearing when it is put in evidence. I therefore concluded that only edited versions of the statements should be available to the public, and my order to that effect was made under CPR 32.13(2). Such an order may be made if the court is satisfied that it is necessary in the interests of justice or in the public interest: CPR 32.13(3). I was satisfied that it was necessary for both those purposes, given the irrelevance and/or inadmissibility of the material, for present purposes. Edited versions have subsequently been supplied. These will be accessible at the hand-down hearing, if anyone wishes to inspect them.
(4) Disclosure
The short lesson from this case is that searches of email accounts and other electronic media should be carried out carefully. Some of the material disclosed late by the claimant clearly should have been discovered and disclosed sooner.
(5) Cross-examination.
In Ames at [101] I said:
"For the purposes of a preliminary issue trial … There may be cross-examination. In Cooke there was none, and Bean J observed that it would have been inappropriate in that case: see [24]. It may not always be so, however, and this case may well be an example of one where cross-examination would be appropriate."
The extent to which cross-examination is appropriate at a trial of this kind will depend on all the circumstances of the case, and in particular the nature of the issues raised. The traditional approach, of which I was reminded by Mr Barca via references to passages in paragraphs 12-10, 12-11 and 12.35 of Phipson on Evidence 18th ed, may require adaptation or modification. The general rules are of course as set out at para 12.35 of Phipson:
"As a rule a party should put to each of his opponent's witnesses in turn so much of his own case as concerns that particular witness, or in which he had a share ... If he asks no questions he will generally be taken to accept the witness's account and will not be permitted to attack it in his final speech…"
At this trial IPL and ESL have accepted that disputed propositions of fact should be assumed in the claimant's favour, save to the extent that AOL successfully challenges them ([122] above). It has of course been the claimant's case that the serious harm issue does not call for evidence. The court has power under CPR 3 and 32 to adapt its procedures. In principle the parties could have taken the view that I should be invited to resolve disputes of fact, so far as necessary, 'on the papers.' I am inclined to think that Ms Page, Mr Price and their clients made the right judgment when they chose not to exercise their right to cross-examine but rather to leave the court to resolve the serious harm issue by reference to the witness statements and other documentary evidence. This did not cause a difficulty in this case, but it may be important in future for the parties to ensure that the ground rules are made clearer before or at the directions stage rather than grapple with disputes about the right approach when the matter comes to trial.
AOL's attack on the claimant's case was more wide-ranging than that of IPL and ESL, and embraced Jameel and issues of delay. Where a party wishes to invite a conclusion that a witness had some improper motive, or to impugn their honesty or reliability as a witness, then it will ordinarily be no more than basic fairness to ensure that the case to be put to the court is first put to the witness for his or her response. Against this background it was clearly appropriate in this case for Mr Barca to cross-examine the claimant, even if not all of the contentions that he seems initially to have meant to advance were persisted in at the final submission stage. It may nonetheless be best for a time limit for cross-examination to be set at the directions stage.
H. THE INTERIM APPLICATIONS
There are two additional applications before me: applications by the claimant
i) for an order striking out those paragraphs of the Defences served by IPL and ESL that rely on 'other publications' as an answer to the claimant's case on serious harm. I have identified the three allegations targeted for this attack in paragraph [68] above. Having reached the conclusions I have on the applicability of Dingle I shall grant this application in respect of points (1) and (2). Established law, which is binding on me, means that these parts of those Defences disclose no reasonable basis for defending the claim on damage and tend to obstruct the process of doing justice. Item (3) amounts to reliance on collateral allegations of wrongdoing and is barred by the rule in Scott v Sampson, and should be struck out for that reason.
ii) for an order that AOL pay the costs of the pre-action correspondence between it and the claimant in any event, on the grounds that this was prolix, unnecessarily aggressive and argumentative, and/or disproportionate. By agreement, argument on this application has been deferred until after my judgment on the principal issues has been handed down.
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Mr Recorder Acton Davis QC:
The Highwayman's Haunt is a public house on the Old Exeter Road in Chudleigh, Devon. A public house has stood on the site since the 13th century: the highwayman concerned was Jack Witherington who used the premises as his hide-out until he was captured on 1st April 1691 whilst hiding in the main chimney breast of the house. I take that summary of the history of the building from the menu prepared by the Claimant at [Bundle 2/853].
In 2011 the then owners of the public house, Mr and Mrs Bowden and Mr and Mrs Elliott, offered for sale the lease on the premises for the sum of £195,000. It was a lease dated 31st October 2005 from Greene King Brewing and Retail Limited. The leasehold term was 15 years from 31st October 2005.
Mr and Mrs Coles had been working in India, Malaysia and Indonesia in the restaurant business. Mrs Coles told me that she has worked for approximately 30 years in the hospitality industry. Initially she ran a Devonshire beachside Inn from May 1988, then a Wine Bar in Exeter, followed by a restaurant in that city, before becoming General Manager of a resort, bar and restaurant in southern Spain in 2003 before going to the subcontinent in 2008. However she and her husband wished to return to England. They became aware that the Highwayman Haunt was on the market for sale. Mrs Coles said that this would have been their first business venture of that kind and they were attracted to the business because it had a relatively high turnover (approximately £750,000) which had been built up by the vendors over the previous five years.
The Coles' first visit to the premises was on the morning of 1st February 2011. During that meeting they were informed by the vendors that their reason for wishing to sell was that the older couple Mr and Mrs Bowden, who ran the Bar, wished to retire and the younger couple Mr and Mrs Elliott wished to do some travelling. The division of work within the vendors was that Mr Elliott was the chef whilst Mr and Mrs Bowden were front of house.
After their first visit to the premises on the morning of the 1st February 2011 Mr and Mrs Coles made an offer to purchase the business for £100,000 which was refused. Thereafter, they increased the offer to £130,000 on 6th February 2011. That offer was accepted. Mr and Mrs Coles took no valuation or other advice before making the offers. When giving evidence to me, Mrs Coles struck me as an individual who was sure of her own mind and confident in her knowledge and understanding of the hospitality business.
Mrs Coles' evidence was that the Highwayman's Haunt is in a rural area. She said there was no other direct competition within a reasonable travelling distance. It may be that something depends upon the subjective meaning of the word "reasonable", but on the evidence there were, in fact, a number of public houses within a short car journey of the Highwayman's Haunt. In any event, Mrs Coles said that she and her husband believed that the vendors' clientele would remain with the business following their acquisition of the business. She also said that in paying a substantial sum for the value of the goodwill element of the business they would have a reasonable opportunity to keep the existing clientele and to also attract new clientele. Her evidence was that the price was split as to:
(i) A nominal £1.00 for the property representing the residue of the term under the lease;
(ii) £21,000 for fixtures and fittings; and
(iii) The balance of £108,999 for goodwill.
No evidence was put before me as to the negotiations in respect of the component parts of that sum. I am unable to place any reliance upon those component parts. Nevertheless I do accept that Mr and Mrs Coles hoped that they would retain most, if not all, of the existing clientele and that they would be able to attract new customers.
Next, the Coles were interviewed by Greene King for approval as assignees of the lease and other training.
The Coles incorporated the Claimant Company on 14th February 2011 for the purpose of acquiring the business. I do not know and it does not matter whether that decision was taken on advice. In this judgment I use the "Coles" and the "Claimant" without reference to the corporate reality, as did both Counsel in argument. The Coles were in touch with their accountants Darnells who suggested to them that the Defendant firm of solicitors act on their behalf in regard to the purchase of the business. Mr Peter Boyne was the partner in that firm dealing with the matter. He says that from looking at the file he had his first telephone conversation with Jane Coles on 9th February 2011. By then the Coles had already had their interviews with Greene King.
It was a theme of Mr Boyne's evidence that the Coles were eager to complete the sale as quickly as possible. Mrs Coles told Mr Boyne by e-mail on 23rd March 2011 that time was of the essence and that the Coles felt "impotent". There was a meeting on 29th March 2011 between Mr Boyne and Mr and Mrs Coles for the purpose of going through the pre-contract documentation and the results of pre-contract searches. Mr Coles left that meeting early because of his frustration at the situation. I take that to be an indication that Mr Coles was finding the process unduly cumbersome and slow.
I accept that Mr and Mrs Coles wanted the acquisition procedure dealt with as quickly as possible. Mrs Coles told me when she gave evidence that Easter, Mother's Day and the May Bank Holidays lay ahead and she wished to take advantage of those trading opportunities.
Kitsons sent the Coles a letter confirming their instruction enclosing Kitsons' terms of business [2/408 - 410]. It is clear from that letter that Kitsons' instructions were "to act on your behalf in connection with your purchase of the above leasehold business as per our telephone conversation yesterday". Thus the retainer went beyond mere conveyancing in respect of the lease. The retainer was to act in respect of the purchase of the leasehold business.
Contracts were exchanged on the 6th April 2011 on which date the Licence to Assign was also granted. The Claimant was registered as owner of the leasehold on 20th April 2011, completion having occurred on 6th April 2011. The Completion Statement [2/373] shows a total purchase price of £130,000.
The Claimant ran the Highwayman's Haunt until selling the premises to Beesons (Torbay) Limited for £69,950. Exchange of contracts and completion of that sale took place on 31st July 2012. The premises produced a poor return for the Claimant which resulted in the decision to sell the business at a price less than was paid by the Claimant.
On 27th July 2011 one of the vendors, Mr Elliott, took over at a public house called The Claycutter's Arms in the next village some three miles away. Mr Coles says "Mr Elliott, as a chef had a loyal following in the area and many of our clientele decided to patronise The Claycutter's Arms instead of the Business. From July 2011 we saw a distinct reduction in the turnover of the Business in comparison with the turnover stated by the vendors on the sale of the Business. We saw an average of 50 covers per night compared to the 100 covers we were expecting. We were trading at a level of around £430,000 per year compared to the anticipated £740,000 to £750,000" [1/49 paragraphs 9 and 10]. Mrs Coles gives evidence to the same effect at paragraphs 17 - 20 of her witness statement [1/53].
Both Mr and Mrs Coles said that the downturn in the business (necessitating its sale at a price less than was paid for it) was caused by the competition at The Claycutter's Arms which would have been prevented if their Contract of Sale from Mr and Mrs Bowden and Mr and Mrs Elliott had included a covenant from the vendors restraining them from operating a competing public house within a radius of 5 miles for a period of 2 years and would thus have prevented the occurrence of that which caused the downfall of their business at the Highwayman's Haunt.
The core of the case against the Defendant is pleaded at paragraph 31 of the Particulars of Claim, in particular at paragraph 31.2, that the firm: "failed to advise Mr and Mrs Coles that they should ask the Sellers to give a covenant against competing with the Business"; and paragraph 31.3 "failed to advise Mr and Mrs Cotes as to the risk that the trade of the Business might be diverted, if there was no covenant by the Sellers not to compete with the Business". It is said that through and by reason of those failures the Defendants were negligent and acted in breach of contract.
By the Defence it is denied at paragraph 10 that "it fell within the scope of the duty of commercial conveyancing solicitors to advise on the business component of any transaction and save that the Claimant is required to prove that it was 'in accordance with usual commercial conveyancing practice' for a solicitor acting for a buyer
(a) to point out that there was no covenant in a draft contract profit by the Seller against competing or
(b) to advise that such a covenant should be requested...".
It is admitted at paragraph 10 of the Defence that no such advice was given.
However, Mr Boyne's witness statement says, at paragraph 16 [1/58]:
"...I ran through the terms of the Sale and Purchase Agreement with Jane Coles. I highlighted to her what was included and what was not included. I explained to her that the Contract had been drafted by the Vendors' solicitors and I believe that I explained to her at the time that it did not contain any restrictive covenant or restraint of trade provisions. My explanation to Jane Coles in this regard was that there were other provisions that might be addressed in a Sale and Purchase Agreement including such a provision but Jane Coles made it clear that in view of the pressures to time and difficulties in dealing with the Sellers she wanted to proceed on the basis of the documentation in front of us and issues relating to dilapidations were not addressing any such matters with the Sellers' solicitors."
By letter dated 17th October 2014 [1/25A] Bond Dickinson who represent the Defendants said "you have recently asked us to prepare an amended Defence to reflect the stance taken in Mr Boyne's witness statement where he makes a positive assertion as to the advice given to Mrs Coles. We accept that paragraph 10 of our Client's Defence simply puts your Client to proof in this regard and therefore needs to be amended if this issue is to be progressed. However, after having further discussions with our Client, our Client has taken the view that it is willing to accept, for the purposes of this case that it is likely it will be found that no such advice was given (sic) the lack of attendance note."
When Mr Boyne gave evidence he accepted the case should proceed on the basis that no advice was given despite the contents of his witness statement.
In Closing Submissions, Mr de Freitas for the Defendant firm, argued that it is a borderline question whether a solicitor acting carefully would have brought the absence of the covenant to the Clients' attention and that in the circumstances of this case the Defendants were on the right side of that border because of first, the urgency of the situation and second, the different nature of the operation which the Claimants were intending to run. As I explain later in this Judgment I accept as a matter of fact that the Claimants were intending to and did run a different operation. I accept also, as mentioned above that the Claimants through Mr and Mrs Coles were anxious to proceed with all speed. However, the issue is whether those two factors excuse the Defendants from giving the advice.
In Gabriel v Little [2013] EWCA Civ 1513 Gloster LJ at paragraph 51 of her Judgment quoted without dissent the following passage from the Judgment at first instance in that case:
"The starting point is, of course, that a solicitor's duty is to be measured against his retainer. This has been well settled at least since Midland Bank Trust Co. v Hett Stubbs & Kemp [1979] Ch.384. Moreover, unless instructed expressly a solicitor does not normally have a duty to advise on the commercial wisdom of a transaction particularly where, as here, the client is an experienced businessman. It was explained in Pickersgill v Riley [2004] PNLR 31:
"8. As to the extent to which a solicitor should make enquiries or investigate matters that he has not been asked to enquire into or investigate, their Lordships think that paragraph 10 — 160 in Jackson & Powell on Professional Negligence (5th Edn, 2002) correctly states the position 'in the ordinary way a solicitor is not obliged to travel outside his instructions and make investigations which are not expressly or impliedly required by the Client'".
In support of that proposition the text goes on to refer to Clarke Boyce v Mouat [1994] 1 AC 428, a Privy Council decision, where Lord Jauncy of Tullichettle said at page 437:
"When a client in full command of his faculties and apparently aware of what he is doing seeks the assistance of a solicitor in the carrying out of a particular transaction, that solicitor is under no duty whether before or after accepting instructions to go beyond those instructions by proffering unsought advice on the wisdom of the transaction";
and in Reeves v Thrings & Long [1996] P&LR 265 Sir Thomas Bingham MR said at page 275 in a dissenting Judgment:-
"It will always be relevant to consider what the solicitor is asked to do, the nature of the transaction and the standing and experience of the client. Thus on the facts here Mr Sheppard was not retained to advise on the wisdom of offering the price Mr Reeves had informally agreed to pay but it was in my view Mr Sheppard's duty to draw Mr Reeves' attention to any pitfall, particularly any hidden pitfall, the contract might contain."
Simon Brown LJ said at page 279:
"I cannot accept that Mr Sheppard was under any further duty to his client, any duty to advise him upon the commercial implications or importance of the access provision or to warn him against the risks that it might pose for the future development, operation or sale of the hotel. These matters are well within the client's competence to appreciate and evaluate for himself, business considerations rather than legal ones."
And at page 285 Hobhouse LJ said:
"Once Mr Reeves was told what the legal position was, he required no further advice from Mr Sheppard in order to evaluate its implications and commercial significance. Mr Reeves was an experienced businessman and under no disability."
Nevertheless the principle that a solicitor's duty is strictly circumscribed by his instructions must not be taken too far. Mr Booth referred me to the observations of Laddie J in Credit Lyonnais v Russell Jones & Walker [2002] PNLR 2 at 28,
"However, if in the course of doing that for which he is retained, he becomes aware of a risk or potential risk to the client, it is his duty to inform the client. In doing that he is neither going beyond the scope of his instructions nor is he doing "extra" work for which he is not to be paid. He is simply reporting back to the client on issues of concern which he learns of as a result of, and in the course of, carrying out his express instructions. In relation to this I was struck by the analogy drawn by Mr Seitler. If a dentist is asked to treat a patient's tooth and, on looking into the latter's mouth, he notices that an adjacent tooth is in need of treatment, it is his duty to warn the patient accordingly. So too, if in the course of carrying out instructions within his area of competence a lawyer notices, or ought to notice a problem or risk to the client of which it is reasonable to assume the client may not be aware, the lawyer must warn him."
I was referred also to the summary of the law in the judgment of Arnold J. in Mason v Mills & Reeve [2011] EWHC 410 (Ch) at paragraphs 143 - 156, which is consistent with the extract from the judgment of Gloster LJ., which I have set out in full.
Applying those principles to the facts of this case, I accept that Mr Boyne had no duty to advise the Coles, or the Claimant of the commercial risks inherent in the transaction. Nevertheless, he should have noticed the absence of any covenant in restraint of competition and drawn that absence to the attention of Mr and Mrs Coles. He failed to do so. It follows that the Defendants were negligent and in breach of contract.
Causation is also in issue. In particular it is said that it is for the Claimants to establish on the balance of probability that had the advice been given they would not have proceeded with the sale. Mr de Freitas in this regard places reliance upon Mr and Mrs Coles' enthusiasm for the project and their wish to complete the acquisition urgently.
In Levicom International Holdings BV v. Linklaters [2010] EWCA Civ 494 Jacob LJ said at paragraph 284:
"When a solicitor gives advice that his client has a strong case to start litigation rather than settle and the client then does just that, the normal inference is that the advice is causative. Of course the inference is rebuttable - it may be possible to show that the client would have gone ahead willy-nilly but that was certainly not shown on the evidence here. The Judge should have approached the case on the basis that the evidential burden had shifted to Linklaters to prove that its advice was not causative."
At paragraph 261 Stanley Burton LJ said:
"Lastly, one has to ask why a commercial company should seek expensive City solicitors' advice (and do so repeatedly) if they were not to act on it. I think that the evidence that a client did not act on advice in a case such as the present must be stronger than that which persuaded the Judge. I agree in this connection with the Judgment of Jacob, LJ."
Lloyd LJ said at paragraph 282 "I also agree with paragraph 284 of Jacob LJ's Judgment".
This is not a case which is factually on all fours with the Levicom case. There, the mistake by the firm of solicitors was to give positive advice as to the prospects of success. It may be said that it is only in such circumstances that the burden shifts. Nevertheless I approach this issue on the basis that the evidential burden has shifted to the Defendants to show that its failure to draw attention to the absence of any covenant was not causative.
Having seen both Mr and Mrs Coles give evidence and considered carefully what they have said both in their witness statements and from the witness box, I am driven to the conclusion that they were determined to proceed with this transaction as quickly as possible. In particular Mrs Coles is an individual who, as I have said above, is sure of her own mind and confident in her knowledge and understanding of the hospitality business. She was utterly certain that she and her husband would make a success of the Highwayman's Haunt. She was confident that the different food and drink which she and her husband were to offer would be an immediate and huge success with the clientele; she was certain of her market. They took no advice from any professional valuer in respect of either the business or the premises before making either of the offers to the vendors. The Coles simply wanted to complete their acquisition as quickly as possible in order to take advantage of the Easter and Mother's Day festivals and the May Bank Holidays. That is the only explanation for the frustration which they display at the delays in the conveyancing process. I find as a fact that if Mr Boynes had drawn the Coles' attention to the absence of any covenant by the Vendors they would nevertheless have proceeded with the acquisition at the same pace. They would neither have tried to negotiate for a covenant nor withdrawn from the purchase. They would not have regarded any business run by the Vendors as competition to the business which they were intending to run at the Highwayman's Haunt. I find that the Defendant firm has discharged the evidential burden upon it.
I note that in an email dated 24th November 2011 [2/811] sent to Mr Johnson of the Defendant firm, the Coles say,
"If this clause had been included in the Sale Contract, this might have invoked a reaction from Mr and Mrs Elliot, they could have requested its removal then Steve and I would have been offered a clear vision of what we could have possibly been up against and possibly pulled out of the arrangement, thus saving us the loss of all our savings..."
That email was part of the internal complaints procedure within Kitsons. Even at that date the Claimants were unable to say that the transaction would not have taken place had the requisite advice been given.
The Claimants produced a business plan for Greene King which showed what they hoped to do [1/252 ff]. In particular as opposed to the current clientele which were described by the Claimants as "older people on a day out, local couples, Round Table, families, day-trippers and holidaymakers" they hoped to attract "business people, families, "foodies" and young people" together with "music lovers". They described the Vendors' menu as "boring" and the atmosphere as "drab and boring". They wanted to introduce a new head chef with new ideas, a better thought out wine list, fresh homemade dishes together with what might be generally described as upmarket drinks and food.
The menu available at the Highwayman's Haunt under the Claimants' stewardship is at [2/853 and ff], At [2/845 and ff] is the menu available at the Claycutters Arms under the stewardship of the Elliotts. The Highwayman's Haunt offer in respect of both food and drink is broadly considerably upmarket from that at the Claycutters. Mrs Coles accepted that to be so in evidence. It is in any event consistent with what she intended to do.
Further evidence of the difference between the food offers, between the Highwayman's Haunt under the Claimant and the Claycutters under Mr and Mrs Elliot, emerges from the Chartered Surveyor's report served on behalf of the Claimants prepared by Mr. David Morgan. At paragraph 5.5.2 [1/71] Mr Morgan says:
"Having had the opportunity of eating at the Clay Cutters on three separate occasions, it is self-evident that the use of over-sized turkey plates and the piling on of cheap vegetables, creates the impression of an extremely large meal. However, the quality of the ingredients can at best be described as 'satisfactory'...
Mr Morgan also offers the view at paragraph 5.5.4,
"It is accepted that 100% retention of the original trade who sought a meal experience of the "pile 'em high, chips with everything" would not have been satisfied with the hot plated food offering that was then prevalent in the Highwayman's Haunt."
The causes for the failure of the Highwayman's Haunt under the Claimant are that the old clientele did not like the new offer nor the prices and the Claimant did not attract the new clientele which the Coles hoped would use the premises.
Lest I be wrong about my findings on causation, I consider briefly the question of damages.
Mr Morgan for the Claimant produced two reports: the first dated 17th August 2012 which is at [1/62] and the second dated I7th June 2013 which is at [1/107]. Put shortly, the approach in the first report (see paragraph 7.3.4.2) is to take the continuing value of goodwill, the enhanced value of the in situ asset of the inventory; a total of £139,148, which he rounded up to £140,000 and deduct the sale price in July 2012 of £70,000 (again rounded) so as to produce a loss of £70,000. At paragraph 7.3.1 the justification is given as being the substantial movement of trade or transient goodwill to the Clay Cutters Arms. It thus assumed that in the substantive cause of the loss of profit was due to Mr and Mrs Elliott opening the Claycutters Arms and that the clientele just moved over. There is no factual justification for that assumption. There is no evidence that the customers of one simply moved over en bloc to the second: it may be that some did but that would be no more than surmise.
In Mr Morgan's second report he considered two separate instructions namely to provide a valuation of the property as at April 2011 with the benefit of a restraint of trade clause and a valuation of the property as at April 2011 without a restraint of trade clause. The difficulty with the approach which he then takes is that he continues to draw heavily upon the trading success of the Elliotts at the Clay Cutters public house as justification (and the assumption of a transfer of loyalty en bloc) for his conclusions.
I was not assisted by Mr Morgan's evidence.
Mr Parson's report [1/119] dated 27th May 2004 was prepared on the instructions of the Defendant. He concludes at paragraph 11.11 that the value of the Highwayman's Haunt as a going concern in April 2011 without a restraint trade covenant would have been £100,500 and with a restraint of trade covenant would have been £105,525. Having rejected Mr Morgan's evidence, the only material before me to assess the loss would have been those valuations and had the issue arisen I would therefore have awarded damages of £5,025.00.
However, in the event, the Claim is dismissed.
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Mrs Justice Cox :
Introduction
The Claimant, Lamarieo Manna, is now 18 years of age. He claims damages for personal injuries and financial losses sustained as a result of events that happened at the time of his birth, at St Mary's Hospital in Manchester, on 20th December 1996. He suffered severe brain damage resulting in widespread neurological dysfunction. He has bilateral tetraparetic cerebral palsy and very severe cognitive, social and communication impairments, with profound autism. There is no dispute that he is severely disabled. His condition is permanent and he will therefore remain dependant in respect of all daily living activities for the rest of his life. The Claimant was referred to as Lamarieo throughout the trial and I adopt that course in this judgment.
Proceedings were commenced on 19th November 2009. The allegations of breach of duty in the management of Lamarieo's birth were all denied, as was causation of injury. By order of Swift J dated 24th June 2013 judgment was entered for the Claimant, on her approval, for damages to be assessed at 50% of the full value of the claim.
At this trial I have heard evidence and submissions relating to those damages. While some of the individual heads of damage have been agreed, there remain substantial disputes between the parties, in particular as to Lamarieo's future care and case management and his future occupational therapy, equipment, transport and accommodation needs. The issue at the heart of these disputes is the nature and extent of his current difficulties and of his manageability, now and in the future. That issue occupied most of the time at this hearing and is therefore considered in some detail in this judgment, which is regrettably, but inevitably lengthy as a result.
In summary Mr Seabrook QC, on behalf of the Defendant, acknowledges the challenges that Lamarieo presents and the huge demands his condition gives rise to. It is contended, however, that the case presented for the Claimant paints a far bleaker picture than is supported by the objective evidence. The key to his manageability, as the Defendant's experts suggest, is forward planning, anticipation of recognised triggers leading to violent outbursts and a support and therapy regime that affords him space and enables him to develop his independence. This can be achieved by allowing for one carer to be present at all times, plus additional hours for a flexible carer for some outings or at times of need, together with the moderate occupational activities and equipment recommended by the Defendant's experts.
On behalf of the Claimant the case advanced by Mr Sweeting QC and Mr Baker is that the evidence shows Lamarieo to be prone to violent, aggressive and unpredictable outbursts. His severe intellectual limitations and behavioural problems are the product of his brain injury. There will be no change or improvement in his condition and the evidence shows that he is likely to continue to pose a serious risk to himself and to others, including his carers, without the tight care and occupational support structure considered necessary by the Claimant's experts. Lamarieo therefore needs two carers at all times for personal care and community activities and a structured routine and regime of activities to fill his days.
Evidence
I heard oral evidence from the following factual witnesses: Lamarieo's mother, Marva Cocking, and his stepfather, Brett Cocking; his natural father, Sam Manna, who is acting as Litigation Friend; the Case Manager, Wendy Ruffle, instructed since May 2014; and Alex Guy, appointed as Deputy in relation to Lamarieo's property and financial affairs.
The parties have agreed Lamarieo's life expectancy and it was therefore unnecessary to call the Consultant Paediatric Neurologists, Dr Martin Smith (Claimant) and Dr Lewis Rosenbloom (Defendant). The parties relied on their agreed written reports and joint statement as to Lamarieo's injuries and their effects. Both parties also relied on the written reports of those medical and non-medical experts who were jointly instructed: Lesley Cogher (Speech and Language Therapy), Jonathon Chan (Consultant Ophthalmologist), Tracey Shipman (Orthoptics) and Wendy Murphy (Physiotherapy).
I heard oral evidence from Dr Peter Bendkowski, Chartered Educational Psychologist, called on behalf of the Claimant. The Defendant did not call any psychological evidence. I also heard evidence from the following non-medical experts called on behalf of the Claimant and Defendant respectively: Steve Martin and Donna Cowan (Assistive Technology); David Reynolds and John Shaw (Accommodation); Caroline Penny Smith and Marie Palmer (Occupational Therapy); and Maggie Sargent and Liz Utting (Care and Case Management).
It is a feature of this case that there is also a large number of contemporaneous documents, in particular medical, social services and educational records. These documents have been helpful in assessing the credibility and reliability of disputed oral evidence, in particular the evidence of Mr and Mrs Cocking, which was the subject of robust challenge in a number of respects.
The parties agree that in this judgment, having resolved the main issues in dispute, I should identify the sums required for Care and Case Management. The question whether they should be by way of periodical payments or a lump sum will be determined subsequently, when the total award of damages for Lamarieo can be considered.
The other issues to be determined are set out in the Schedule and Counter-Schedule, as adjusted to reflect the evidence given, or further agreement reached between the parties before or during the hearing. These relate principally to the appropriate multiplier for life, and for loss of earnings for life; the recovery of the pension claim; and credit for interim payment against interest. There are other, more minor disputes, which are dealt with during the judgment.
The Relevant Legal Principles
The principles that govern the assessment of damages are well established and are not in dispute. The purpose of an award of damages in personal injury claims is, so far as is possible, to put the Claimant in the position he would have been in had he not been injured. In Heil v Rankin et al [2001] 2 QB 272, Lord Woolf MR giving the judgment of the Court of Appeal, said as follows at paragraphs 22, 23 and 27:
"… the aim of an award of damages for personal injuries is to provide compensation. The principle is that 'full compensation' should be provided… this principle of 'full compensation' applies to pecuniary and non-pecuniary damages alike… the compensation must remain fair, reasonable and just. Fair compensation for the injured person. The level must also not result in injustice to the Defendant, and it must not be out of accord with what society as a whole would perceive as being reasonable."
This Claimant is therefore entitled to damages to meet his reasonable needs arising from his injuries. Reasonableness always depends on the particular circumstances and it applies both to the head of loss claimed and to its amount. Disputes as to future losses will often require the court to make an assessment of the chances of various future events.
In relation to expenses already incurred the Claimant and those who act on his behalf have a duty to take reasonable steps to mitigate his loss. In relation to a particular choice of treatment, for example, or transport, as arises in this case, the key is reasonableness. If the choice is unreasonable it will result in injustice to the Defendant and will not be recoverable. Provided the Claimant's choice is within the range of potentially reasonable options open to him, he will have reasonably mitigated his loss. A Defendant cannot reduce his liability by arguing that the Claimant should have chosen a cheaper option from within that range.
In determining quantum the liability compromise agreed between the parties and approved by the court is irrelevant for the purpose of calculating the appropriate award of damages under each head of claim. This is agreed save, as will become apparent, in so far as it is said to explain the conduct of the Claimant in respect of sums already received for Lamarieo's care, and offered during the trial in respect of accommodation.
The Background Facts
Lamarieo was Mrs Cocking's first child. When he was born Mrs Cocking, now aged 37, was married to his father Sam Manna, now aged 67, and they were both living in Moss Side, Manchester in Mr Manna's two bedroom, two storey council house. Their relationship ended in 1998 and they subsequently divorced but they remained living in the same house, both sharing Lamarieo's care until June 2000.
Mrs Cocking had met Brett Cocking in December 1999 and they started living together in June 2000. She was then pregnant with twins, the first two of four children Mr and Mrs Cocking have had together. Problems in her pregnancy meant that Mr Manna continued to care for Lamarieo until March 2001, when Lamarieo went to live in Bolton with Mr and Mrs Cocking and their twins, Adrian and Christian, born in December 2000.
Lamarieo has needed extremely high levels of care over the years. That care has been provided principally by his mother. There is no doubt, however, that Mr Cocking, who works as an independent mortgage advisor, has also provided a great deal of care and practical help over the years in caring both for Lamarieo, with whom he has a very good relationship, and for the other members of his family. Two further children were born, Atiya in October 2006, and Jayden in November 2010 and Mr and Mrs Cocking are now married.
It is also a feature of this case that, despite the end of their own relationship, Mrs Cocking and Mr Manna acted together in the best interests of Lamarieo and continued to share his care over many years. Generally, Lamarieo lived in Bolton with his mother and stepfather from Monday to Friday each week. He went to Mr Manna in Moss Side, about 16 miles away, for three out of every four weekends on average and for some time in the school holidays.
This arrangement only came to an end in September 2013, by which time Lamarieo was 16 years old. Mrs Cocking became very upset on discovering that Lamarieo had been left on his own for short periods in Mr Manna's house. There was a disagreement between them and Mrs Cocking no longer agreed to Lamarieo having overnight contact with his natural father. Since then, Mr Manna has seen Lamarieo on only a few occasions in Bolton. In evidence he confirmed his wish to resume regular contact with his son, which is not in dispute. Mrs Cocking accepted that Mr Manna had played an important part in Lamarieo's life, that he genuinely wished to continue to do so, and that Lamarieo should continue to see his natural father, so long as the visits were properly supervised and that there were suitable arrangements in place for him.
Since 2008 Lamarieo has attended a special school, 'Firwood School' in Bolton, where he will remain until June 2016, when he is 19 years of age.
Agreed Expert Evidence Concerning Lamarieo's Disabilities
The findings of the paediatric neurologists are entirely consistent, based as they are not only on information from Lamarieo's parents, but on consideration of the available medical records and their own examinations and assessments.
In the years after he was born Lamarieo demonstrated evidence of evolving and severe neurological disability with microcephaly, severe developmental retardation and visual impairment. Doctor Rosenbloom, instructed on behalf of the Defendant, has examined him on several occasions over the years. In 2003 he found evidence of profound developmental retardation, such that cognitively Lamarieo was functioning below the level of a two year old child. His abnormal neurology was consistent with bilateral spastic cerebral palsy, with his left side being more severely affected. He also had visual impairment of brain origin (now confirmed as permanent by Mr Chan), had no speech, was doubly incontinent and was totally dependant in relation to all daily living activities.
By 2009 he was continuing to show evidence of a very profound degree of cognitive impairment, together with obsessional behaviours. In October 2011, aged almost 15, neurological examination confirmed a very severe degree of global developmental retardation, with a persistent, evolving and clinically significant disorder of movement and of motor function. Lamarieo had suffered epileptic seizures since early childhood. Brief seizures, controlled by medication, continued between October 2011 and November 2013 when Dr Rosenbloom saw him again, aged almost 17. Apart from these significant disabilities he noted that Lamarieo's overall health had been generally good over the years.
Dr Smith examined Lamarieo on 10th November 2011 and reported essentially the same findings. Lamarieo was able to walk short distances (up to quarter of a mile) independently at a steady pace on flat ground. He required a wheelchair for longer distances. He tended to go upstairs on his hands and knees and come down on his bottom. He noted Lamarieo's double incontinence, his tendency to constipation and overflow incontinence and his tendency to drool. He had reduced visual acuity. Dr Smith also noted that Lamarieo's behaviour could be very challenging and that in recent years, during adolescence, there had been increasing concerns about aggression. His sleep was noted to be very poor, so that his parents invariably had disturbed nights.
When Dr Rosenbloom saw him again two years later, in November 2013, he found no change of substance in his presentation. Lamarieo remained wholly dependant in respect of all daily living activities. He was assessed as being at Level II on the Gross Motor Function Classification System for cerebral palsy, characterised as 'walking with assistance'. He was noted to be able to get around in familiar situations, to walk independently for short distances on flat surfaces, to undertake transfers and, with some supervision, to get up and down stairs. He had very limited ability to use his hands and was unable to feed himself. Nor did he use his hands for play or any daily activities due, in Dr Rosenbloom's view, to the severity of his cognitive impairment rather than to any upper limb functional abnormalities.
There was some impairment of oromotor function and he had to have mashed food because he could not chew or swallow lumps. He still had significant drooling and he had not developed speech although he could make noises. He also had significantly impaired vision. Lamarieo remained doubly incontinent. He was noted to be significantly constipated and to require occasional enemas, as well as regular medication to control this condition. He also had asthma and eczema, for which he required regular treatment by the application of special creams. He was noted to wake on occasions each night.
As at November 2013 Dr Rosenbloom found that Lamarieo had continued to make only very slow learning progress. Clinically the impression obtained was that his understanding was at no more than an infantile or toddler level. His cognitive impairment was therefore very severe or profound. Dr Rosenbloom deferred to expert educational psychological assessment with respect to Lamarieo's learning difficulties.
In respect of Lamarieo's behaviour, Dr Rosenbloom noted that it was demanding and that he could also be aggressive at times, but that at other times he was sociable, pleasant and cooperative. This particular observation is mirrored in the observations of Lamarieo by many others throughout the evidence in this case, including his parents.
Dr Smith saw Lamarieo and his parents again six months later in May 2014, when he reported the same findings. He noted that an overnight admission to hospital had been required approximately 18 months previously, with abdominal pain secondary to constipation. In relation to Lamarieo's behaviour, Dr Smith noted that during adolescence there had been increasing concerns about Lamarieo's unpredictable physical aggression at home and at school. Lamarieo's parents reported that this had been particularly difficult during the last six months.
In relation to prognosis both experts are agreed that Lamarieo is now well established in adolescence and that his condition will continue to be much as it is into the indefinite future. He will remain ambulant for the majority of his adult life, permanently requiring a wheelchair and help from carers with transfers in the final years of life, as his mobility declines. Once he is through adolescence it is likely that the current, reasonably satisfactory control of his epilepsy will be maintained. Both experts consider that Lamarieo will need 24 hour care, although probably not waking night care. As an adult Lamarieo will have negative insight into the nature and extent of his disabilities and it is unlikely that his sleep pattern will improve. There is no prospect of him having the capacity to live independently or to manage his own household, or to obtain any form of remunerative employment. His severe learning difficulties are the greatest barrier to any prospect of independence. Both experts agree that he suffers very severe cognitive, social and communication impairments.
It is not in dispute that he also has profound autism, as reported by Dr Bendkowski. The evidence of Dr Bendkowski is otherwise in dispute in a number of respects and I shall consider it later on.
In relation to Lamarieo's life expectancy, both paediatric neurologists used the same data sources in coming to their opinions and agreed that the probable projected age to which Lamarieo will live is between 65 and 70 years. Dr Smith preferred the higher figure and Dr Rosenbloom the lower, and each accepted that the other's position was a reasonable one to adopt. The parties have now sensibly agreed a compromise figure of 67.5 years in this respect.
Further assistance as to Lamarieo's condition is found in the joint reports of Wendy Murphy and Lesley Cogher, who both assessed Lamarieo in 2014. In relation to his physiotherapy needs, Ms Murphy's physical assessment in June 2014 was limited, as a result of Lamarieo's inability to cooperate. However, she noted his postural incompetence, poorly coordinated gross and fine motor movement and postural asymmetry. Lamarieo has a crouched, flexed gait and will also bump into objects and furniture as he moves, probably due to his visual impairment. Ms Murphy also noted the history of poor sleep patterns. Although he sometimes goes through the night without waking, more often that not he will need attention two or three times each night and he invariably awakes early in the morning. Once awake she notes that someone must be with him at all times because he has no concept of personal safety and he also tends to soil himself. At her examination she observed Lamarieo pulling at his mother's clothing until she attended to him. She noted that if his wishes were thwarted he could be physically aggressive towards people, including family members and in particular his mother, and that he could lash out, using his not inconsiderable strength. This, as she observed, is never done with malice but it makes Lamarieo very difficult to cope with.
Ms Cogher noted that Lamarieo's expressive communication is through gestures, vocalisations and facial expressions. On assessment she noted that he struggles significantly with saliva control. He has significant difficulties in the coordination of his mouth movements, together with a significant degree of ritual behaviour around eating and drinking, sensory aversion and a resistance to change. He has a limited capacity to listen and tends to focus on his own agenda. His understanding of language is related to the here and now and to concrete concepts. He may also understand and retain some names or plans for the immediate future, but his understanding is limited, as is his ability to remember. Ms Cogher also noted that Lamarieo sometimes becomes very distressed and lashes out when he is thwarted.
The Evidence of Marva Cocking
In her two witness statements, prepared in May and November of 2014, and in the witness box Mrs Cocking provided a detailed account of a typical day in Lamarieo's life and of the difficulties and the significant challenges posed in caring for him. At the request of Maggie Sargent she had also provided written summaries of the history of Lamarieo's problems over the years, from the ages of 3 to 18, which were produced during the trial.
It is accepted that Mrs Cocking is and has always been devoted to and protective of her son and this was obvious to me, having regard both to her evidence and all the other evidence in the case. She describes him as a lovely and delightful boy to be with, but the problems and challenges he poses have clearly taken their toll and she became extremely distressed on several occasions when describing them.
From an early age Lamarieo had a very poor sleeping pattern and her evidence is that this still continues. When he is awake he has to be watched at all times, so that her nights have frequently been disturbed over the years. Lamarieo has no sense of danger. Feeding him has also been a very messy process and he has constantly been prone to dribbling excessively
A particular challenge over the years has been Lamarieo's recurring problems with constipation, when his abdomen will swell and she fears that he may be in considerable pain, although he cannot communicate this to her. Treatment has been by way of medication or, when required, enemas. The medication and treatment he receives, in particular the enemas, increase the frequency of his stools and cause frequent and heavy soiling, requiring regular showering, changing and cleaning both of Lamarieo and of clothing and bedding. Sometimes he puts his hands in his nappy and spreads faeces in his bedroom, requiring the carpets to be cleaned or sometimes replaced. Sometimes his nappies have not been properly applied at school and there is leakage. Lifting Lamarieo to clean him and struggling to manoeuvre him over the years has caused her to develop back problems and she currently suffers from sciatica.
Lamarieo communicates his needs by making sounds and pointing at an object. He becomes frustrated if he is trying to communicate and is not being understood, or if his routine is changed in anyway. He will become very upset and will lash out. He has tantrums on a regular basis and will lash out at her and at his brothers and sister if he is frustrated, or if his needs are not met immediately. She recognises that when he bites his hands it is a sign that he is about to have a violent outburst and lash out, although he does not lash out at his stepfather.
These difficulties and the physical and emotional demands of providing 24 hour care have had a significant impact on normal family life and have at times been extremely stressful and upsetting. Lamarieo behaves like a toddler but the difficulties have been compounded as he has grown older and stronger and has matured physically.
Neither Mr nor Mrs Cocking has any extended family nearby or available to help out in caring for Lamarieo. The same is true for Mr Manna. Lamarieo has had short break overnight care at Avondale for four nights per month and short break overnight support two to three times during the school holidays at Christmas and Easter. Some further care, using the Direct Payments she has received through Social Services, has been provided by Bridge Family support and Crossroads for two hours on Wednesday and Thursday each week. Some additional care was obtained, from about May 2014 onwards, from a carer called Jackie Lee, who has known Lamarieo through different care organisations in the past, and who was to take Lamarieo out for four hours on three out of four Saturdays to allow Mr and Mrs Cocking to spend time with their other children.
In her first witness statement made in May 2014 Mrs Cocking described Lamarieo's behaviour as having recently become more challenging. Since September 2013 he had become more difficult to manage both at home and at school, by which she meant that he had become more violent. He developed an obsession with DVDs, for example, and easily became angry if not allowed to watch what he wanted or to buy a particular DVD from a shop. He enjoys going to school and shows enthusiasm for all his subjects. However, he was not only grabbing and pulling people's hair but had had a number of violent outbursts, lashing out both at her and at members of staff at school. He was excluded from Firwood School for one day in November 2013 because of such an incident. His challenging behaviour led to numerous meetings at the school, as a result of which Lamarieo was moved in 2014 to another class which has a higher staff / pupil ratio of 5:3.
During 2013/2014 Lamarieo went away with the family on two holidays. First, they flew to Jamaica to visit Mrs Cocking's mother and family. Lamarieo enjoyed himself there and went swimming with dolphins. Later on the family flew to Tenerife on holiday, taking Jackie Lee with them. This made a big difference because Lamarieo had undivided attention and support from an adult all the time and on holiday he was well behaved, calm and relaxed. He did not need to use his wheelchair, as he did in Jamaica, because his carer was able to support him walking. Subsequently Jackie Lee came with Lamarieo when they all went to a friend's wedding reception and once again he was well behaved.
The presence of Jackie Lee and her care and support for Lamarieo has led Mrs Cocking to appreciate that full time care for Lamarieo would enable all the family to have a better quality of life. It is the firm wish of both Mr and Mrs Cocking that Lamarieo continues to live at home with his family in the future rather than in a residential placement, but with proper support and help in place to manage his behaviour so that they can be his parents and no longer his carers. Responding to the suggestion in cross examination that one carer would provide such support, Mrs Cocking acknowledged that this would help but stated that, with one carer, she would effectively have to continue to be the second carer, as she is at present. While she accepts that she still wishes to be involved in Lamarieo's life her wish, as she expressed it, is that, "I don't want to be a carer anymore. I'm tired. I want to be a mum."
The Defendant's case was explored at some length with Mrs Cocking in cross examination. That case is as follows. Mr Seabrook submits the evidence shows that, until September 2013, Lamarieo's behaviour was being reasonably well managed and was under control, but that there was a marked deterioration in his behaviour between September 2013 and mid 2014. This was due, he submits, to one or more of a number of factors, namely Lamarieo's increasing problems with constipation, puberty (as Maggie Sargent suggested in evidence), or the fact that in September 2013 Lamarieo was suddenly stopped from having further overnight contact with his father, bringing to an end the shared care arrangements in place up until that point. This was, he submits, a very turbulent period for Mrs Cocking, not helped by the fact that she was getting very little by way of help and support in caring for Lamarieo at this time, due to her own unwillingness to accept more care and to use funds made available to her for that purpose.
Mr Seabrook contends, however, that there was then a dramatic improvement in Lamarieo's behaviour and progress in the second half of 2014, in particular following the arrival of Jackie Lee as his carer. That improvement has continued to the present day and is likely to continue into the future. He submits that I should approach the experts' reports with some caution, to the extent that they are dependant on each other, or on information being supplied to them by Mr and Mrs Cocking. The recent school report and Jackie Lee's care notes indicate, in his submission, the considerable progress that Lamarieo has made since mid 2014, and show him to have become a delightful, sociable and manageable young man, whose growing independence should be encouraged. The risks that he poses will be properly controlled by the care regime proposed by the Defendant, with proper planning and anticipation and by giving him space when necessary.
Some of these suggestions were accepted by Mrs Cocking. She accepted that the holidays had gone well and agreed that, since the second half of 2014, Lamarieo seemed to be making good progress at school, growing in independence and generally doing better. She referred in this respect to the higher staff / pupil ratio now in place at the school, which she clearly sees as relevant to this improvement. She has been told that there is now a prospect of him being offered a college placement from the ages of 19 to 25 and she is currently making enquiries about this possibility.
She did not accept, however, that Lamarieo's sleep patterns had now improved. There are nights when he sleeps through, but generally a good night is when he wakes only twice and has not soiled himself. Nor did she accept that there was a particular problem with constipation and overflow incontinence in the period between September 2013 and mid 2014, and that this problem had now also improved. This condition and the problems caused by leaking nappies and by him soiling himself regularly has been a constant feature of their lives, over many years, and the problems are still continuing.
Challenged as to what she had tried to do about this problem, she explained that she had tried to cope with it herself at home with medication. The enema procedure administered in hospital involves Lamarieo being physically restrained because of his resistance and distress. She finds the process stressful and upsetting and she tries to avoid it.
This problem with constipation appears to be a feature of Lamarieo's general condition and I find on the evidence that it is. It is referred to in the medical records as chronic constipation and Mr Cocking stated that over the years the doctors have simply tried to manage it. Mrs Cocking did not accept the suggestion that the incidents of overflow, leaking nappies and night time disturbances are now occasional and infrequent. Her evidence is that there are numerous occasions when she or her husband has to deal with the effects of this persistent problem.
In challenging her account as to the extent of Lamarieo's present problems generally, Mr Seabrook placed considerable reliance upon some documents collectively referred to in the trial as "care diaries". These are some hand written notes made by those involved in Lamarieo's care during 2014 and early 2015, principally by Jackie Lee, who did not give evidence at trial. Although he accepts that the notes are incomplete and that many of them are undated, he submits that there is no reference in them to disturbed nights, or to Lamarieo soiling himself, and that the picture they portray is one of Lamarieo now being generally settled and happy, with the occasional outburst being well managed by Ms Lee on her own.
Mrs Cocking was taken through these notes in some detail, and they were put to other witnesses called on behalf of the Claimant. Mr Seabrook drew her attention to Ms Lee's many references to there being "no issues"; or to pleasurable trips out with Lamarieo on her own to the shops or for lunch; to passages suggesting that she coped well with any difficulties that did occur; and to her descriptions of Lamarieo's happiness and enjoyment when he was with her. Mrs Cocking's evidence is that these care notes do not show the whole picture and that Jackie has in fact had many problems when she has been out with Lamarieo. Jackie would tell her about Lamarieo going for her when she was driving, or lashing out at strangers in the park. Jackie would ring Mrs Cocking on occasions to come and collect Lamarieo if, for example, he was refusing to leave a supermarket. In relation to each carer that Lamarieo has had, including Jackie Lee, Mrs Cocking says she has still been heavily involved in Lamarieo's care herself. The focus of these notes was Lamarieo, his trips out and his personality, not the daily problems of nappies, soiled bedding or sleep disturbance.
Mr Seabrook challenged her account that, after a particular violent outburst in McDonalds in Bolton, when Lamarieo had grabbed Jackie Lee's scarf and pulled her over, Ms Lee had refused to take him out again on her own. This, Mr Seabrook pointed out, had not been mentioned by Mrs Cocking in her witness statements and the notes show, he suggests, that she did take him out on her own after this incident. He challenged Mrs Cocking's evidence that one of the twins, who both adore Lamarieo, will usually go out with her now.
Mr Seabrook submits that Mrs Cocking has exaggerated Lamarieo's problems. Save for the period of deterioration in his behaviour between September 2013 and mid 2014, he submits that Lamarieo was being reasonably well managed with the care he had before that period, and that he has improved dramatically in the past year. Mrs Cocking's evidence is that she has managed as well as she could over the years, despite the problems, because Lamarieo is her son and she has had to manage with the help that she had. She had no choice. Over the years, however, Lamarieo has always had good and bad days, both before and after the period to which Mr Seabrook refers.
Sam Manna and Brett Cocking
Oral evidence as to Lamarieo's problems and behaviour over the years was also given by his natural father and his stepfather. Describing his condition over the years to September 2013, when he stopped having regular contact with his son, Sam Manna said that Lamarieo always had to be checked during the night because he would get into awkward positions, or be unable to pull the covers off his head. He would often have to get up during the night to check on him and, for most of Lamarieo's life, he had not had a complete night's sleep. Lamarieo would sleep through for about fifty per cent of the time that he stayed with him.
In addition, he described Lamarieo as becoming very frustrated and having tantrums if you did not understand what he wanted or respond immediately. Lamarieo had never been physically aggressive towards him. However Lamarieo has to have a strict routine and becomes very distressed if there is any disruption. On more than one occasion he tried to push the television over, or had a tantrum over something. Sometimes it was not obvious why he had the tantrum. He liked going out to the park and going on the swings, but going out with him could be difficult because of these tantrums. Sometimes he would throw himself on the floor two or three times. Generally, Mr Manna said that he would always try to please Lamarieo by letting him watch television and ensuring that he ate regularly to keep him happy.
Over the years Mr Manna described how Lamarieo's nappies needed changing regularly. His stools were large and offensive and after he had had a bowel motion he would usually need to be washed or bathed. Dribbling and feeding were also a real problem and he would have to change his clothing several times a day.
Brett Cocking's statement, dated 25th May 2015 was served late, but the Defendant had received it two weeks before trial and did not object to his evidence being admitted. Mr Cocking also describes Lamarieo as sometimes passing stools several times a day and often needing to be showered afterwards, especially when his regular medicine for constipation results in overflow. There had been two or three such incidents in the six weeks before trial. In early May this year Lamarieo was admitted to hospital for a planned procedure to deal with faecal impaction and constipation. The following day he was severely incontinent. Such a procedure is required approximately every six to twelve months. Lamarieo misses school on average for one day each month as a result of his constipation problems, or in the aftermath of an enema.
Mr Cocking states that Lamarieo still does not sleep through the night. Sometimes he will sleep right through, but sometimes he will wake up several times a night and this happens, on average, once or twice a week. They will often be up and down several times, especially when he has soiled himself and needs to be showered.
Mr Cocking works during the day but, before he leaves and after his return, he helps with Lamarieo's care because he is now physically almost a fully grown man and is very strong. He can also be aggressive and will lash out, not at him but at female carers and at his mother in particular. This happens on a daily basis, although some days are worse than others. This lashing out is not a physical attack in the sense of dragging his mother to the floor, but it is an attack movement, in which he goes to grab her.
Mr Cocking has witnessed Lamarieo's ups and downs over the years. His routine has to be followed and he has often had to rush home from work when Lamarieo has had an outburst and his mother cannot calm him. The care now provided by Jackie Lee has helped to reduce Lamarieo's outbursts, but if he becomes upset or wound up he or his mother have to step in to help Jackie to deal with him. There is always at least one of them present to help her. Lamarieo can be difficult to manage and aggressive in public and Jackie is not prepared to take Lamarieo out on her own because of this. Sometimes she will do it on her own if they are pushed but it is not ideal. He himself will sometimes take Lamarieo out to the pub, where it is a familiar environment, or for a walk around the estate. He would not however take him out anywhere unfamiliar without help.
During these outbursts Lamarieo cries and lashes out at people and things and can damage property. Mr Cocking described a recent attack upon Mrs Cocking in the kitchen, when the twins had to help get Lamarieo off her. These outbursts tend to happen in spells. They can go for a few weeks without anything happening and then Lamarieo will have outbursts every day for a week. He thought that his chronic constipation maybe one of the triggers for these episodes.
The high level of care and support that he now has at school has, in his view, resulted in an improvement in Lamarieo's behaviour and in his interaction with others. He is, however, an eighteen year old with the mind of a toddler and the improvements in his general abilities are small. It is becoming more difficult to cope with his behaviour as Lamarieo grows stronger. There have recently been further problems and the school have contacted them to discuss this. Part of the problem is the unpredictability of his condition. They think they have turned a corner, but there is then another blip and Lamarieo goes back down again.
Asked about Jackie Lee's notes, Mr Cocking considered that she was trying to paint a positive picture of Lamarieo for them. She would not therefore refer to every negative aspect which was part of his everyday life, such as soiled nappies or sleep problems. She did nevertheless tell them about the problems she had had with Lamarieo, even thought she had not written about them in her notes. He agreed that Jackie Lee had made a real difference to their lives. He also agreed that her notes showed her real love for Lamarieo and for all the family, but the occasions when she or other carers were with him alone were not ideal and he did not believe it was safe. Sometimes Lamarieo has been aggressive towards Jackie, and he will also lash out at passers by when she is with him. About three to four weeks before the trial there was such an incident in Sainsbury's, when Lamarieo was with Jackie and started playing up.
This account was vigorously challenged in cross examination. Mr Cocking denied that he was grossly exaggerating Lamarieo's difficulties and the problems in managing them. He also denied that he was giving an untruthful account in order to bolster a case for two carers being required to attend to Lamarieo.
Documentary Evidence
In considering the disputed oral evidence I have had careful regard to the extensive documentation available, including the care notes made by Jackie Lee and others. The various medical, educational and social services records in bundles 1, 4, 6 and 7, contain many references to Lamarieo's disabilities and in particular to his behavioural difficulties over the years, which have been of real assistance in determining the pattern, nature and extent of his problems and the support he now needs. The chronology is important, given the case being advanced by the Defendant.
As early as June and July 2002, when he was just five years of age, Bolton Social Services assessed Lamarieo as a child with severe learning difficulties, some dysfunctional behaviours and no sense of danger. He was noted, for example, to be pulling hair or scratching people's faces, throwing things and pushing his twin siblings over. School records for 27 February 2004 include references to the parents' concerns about Lamarieo pulling hair and hitting out.
In the GP notes there are references to his behaviour being out of control, for example on 23rd May 2005, aged eight, and to him hitting and scratching the twins. On 6th February 2006, aged nine, his behaviour was noted to have "worsened again after a good period". On 18th April 2006 the community nurse Phil McNally noted that Mrs Cocking was describing his behaviour as demanding and he gave her advice on handling him.
Some 15 months later on 25th June 2007, aged 10, the consultant community paediatrician noted that "his behaviour can still be difficult at times but his mother thought it had improved generally…" Yet after just six months, on 26th November 2007, his behaviour was noted to have deteriorated. He was hitting out at or "nipping" his mother several times a day and was also attacking his younger brothers. This aggressive behaviour was noted to have increased in frequency and intensity and Lamarieo was referred to Learning Disability Health Services.
The referral report of Phil McNally, dated 13th December 2007, was based on discussions with Mrs Cocking and classroom staff, and on his own observations of Lamarieo. The similarity with Lamarieo's behavioural difficulties in more recent times is striking.
He observed that these behaviours came in two stages. At stage one Lamarieo would cry or bite his hand and stamp his feet, at which point there was still an opportunity to defuse and divert, although this was not always possible. Stage one could escalate quickly to stage two, involving screaming, nipping others and pulling people's hair. Stage two behaviours could be displayed immediately if the trigger were strong enough. These behaviours were noted to occur in any setting, but the most common environments for Lamarieo to find himself in were home and school. A number of potential triggers for Lamarieo's aggression were identified including, for example, objects in a room being out of place, or Lamarieo being unable to perform a task and becoming frustrated. These same triggers have been identified in relation to his more recent outbursts. In 2007 Mr McNally made a number of recommendations, noting that "… working with Lamarieo on his behaviour will be difficult without a consistent approach between the school, home and short break carers."
On 14th April 2008, after reviewing Lamarieo in clinic, the consultant paediatrician noted that his behaviour continued to be a problem for his mother, and that he was very strong and would lash out at her, although he was noted to behave better for Mr Cocking.
On 31st March 2009 the Firwood School Annual Review for Lamarieo, now aged 12, referred to his general behaviour in these terms:
"Lamarieo is usually a positive and fun class member but his moods can be very volatile and he can go into crisis very suddenly and sometimes seemingly without reason, and often cannot be brought back from a state of high anxiety by any means other than distraction or withdrawal from the situation or environment which is causing him distress. He has grown more cooperative and has grown happier as the year has progressed, although he does need daily reminders not to grab, pull hair or pinch. Lamarieo has been allocated a 1:1 supervision in the yard to prevent him targeting other students."
Two years later the Annual Review dated 21st June 2011 made no reference to volatility or crisis and provided a very positive description of Lamarieo's behaviour and of his progress at school for that year. He was described as a very sociable, kind-hearted person who was very popular and who was developing into a very capable teenager and participating well in lessons.
During the February 2011 half-term holidays, however, Barbara Copeland (Bolton Social Services) observed an incident on 24th February 2011 when Lamarieo was taken out, became anxious and grabbed the arm of a passer by. Later that year, on 15th September, in clinic with Miss Kapur concerning Lamarieo's constipation problems, Mrs Cocking was noted to be extremely distressed and frustrated by Lamarieo's condition and behaviour.
In his report written in January 2012 Dr Smith noted that Lamarieo's behaviour could be very challenging and that "… in recent years during adolescence there have been increasing concerns about aggression." School records for February 2013 refer to challenging behaviour displayed by Lamarieo "over the last year."
Between September 2013 and March 2014 a series of school records containing staff and parent/carer comments reveal a mixed picture. There are many references to Lamarieo's happiness and enjoyment of school activities, and to his excellent behaviour. These are interspersed, however, with significant outbursts of aggressive behaviour. The Case Manager, Wendy Ruffle, referred in her report to a series of "crisis meetings" held at the school, as well as to the reports and annual reviews addressing his progress. These outbursts are documented, for example, as occasions when Lamarieo grabbed someone's hair with force, scratched one of the welfare assistant's faces, or "went for" a staff member or "went into crisis". There are references to him lashing out at home more than usual over this period and to him becoming angry and unsettled.
There are also many references to Lamarieo's chronic constipation and overflow incontinence during this period. There is, however, no medical record or report identifying these problems as triggers for Lamarieo's violent outbursts, and I note that the letter to the GP of 13th January 2014 refers to his constipation as being "much better controlled" on the medication at that point.
On 17th October 2013 the school prepared an Individual Behaviour/Positive Handling Plan (IBP) for the academic year 2013/14, which included a Risk Assessment. In this IBP the immediate concerns were identified as follows:
"Can become angry when things aren't as he'd like
Grabbing hair (pupils and staff)
Pushes and slaps students and staff when surprised, angry or no apparent trigger
Moving from [behaviour level] 0-3 more quickly and regularly
Copies negative behaviour of others
If hit on the head by another student (intentionally or unintentionally) he may respond by grabbing and hitting. His response may not be immediate and occur sometime later
If he does not want something he waves it away or swipes it off his table
Concern managing Lamarieo's behaviour in the community."
Various supportive and handling strategies, involving two members of staff, were identified. Lamarieo was assessed overall as posing a high risk.
Three incidents on 19th November 2013 led to a fixed, one day exclusion of Lamarieo from school on 20th November. The Head Teacher wrote to Mrs Cocking informing her that Lamarieo had pulled a member of staff by the hair and that the person had been unable to return to work for a short while. His behaviour had compromised the health and safety of people at school and new coping strategies were going to be developed. The internal, incident record indicates that in fact there were three incidents that day, involving hair pulling (at 9.55 a.m.), lunging at a staff member in the corridor (at 12.30) and then violently pulling a female member of staff's head back (at 2.30 p.m.), causing injuries which necessitated medical treatment and absence from work.
Subsequently, on 3rd February 2014, there was an incident in which Lamarieo tried to push the computer screen on to the floor and grabbed and pulled another student's hair. Class staff decided that it would not be safe for him to attend the after school club that day. There are a number of entries in the school records in January and February 2014 referring to aggressive outbursts. The social worker Heather Riding noted on 7th February that there appeared to have been an escalation in his volatility and level of aggression in recent months.
On 25th February 2014 notes taken at a Social Services multi-disciplinary meeting, at which Jackie Lee was present, included the following:
"Meeting called to discuss Lamarieo's behaviour in all settings. All felt there had been an escalation of behaviour in the last few months. Objectives to share good practice across looking at what had been successful in different settings and apply these to provide consistency for Lamarieo across all settings."
There are further references in the medical notes later on in 2014 (12th August and 16th December) to Lamarieo being "very distressed and agitated… left with carer to sit in the car aggressive ++" and to him "kicking out and screaming" during a medical examination.
In support of the submission that there has, since about mid 2014, been a dramatic improvement in Lamarieo's progress and behaviour Mr Seabrook relies, in addition to Jackie Lee's care notes, on the general progress reported in the school's Annual Review for 2014/15, dated 9th December 2014. By this time the staff/pupil ratio had been increased to 5:3, Lamarieo's behaviour was said to be much improved in school and at home and Mrs Cocking was noted to have described the change in his behaviour as "amazing".
I shall return to this Review again later on, but in relation to his general behaviour it was noted that:
"Lamarieo has settled well into his new class and adapted to small changes in routine. His incidences of challenging behaviour have significantly reduced. Lamarieo can still become anxious when things are not quite as he feels they should be, however his level of acceptance when staff give information or instructions regarding situations he finds difficult, is increasing all the time."
Notwithstanding these observed behavioural improvements recorded in the Annual Review shared with Mr and Mrs Cocking, it is significant, in my judgment, that the internal, contemporaneous school records addressing safety and risk assessment indicate that Lamarieo is considered still to represent a high risk. These include the existence of his own "personal emergency evacuation plan" as a "high risk student: behaviour".
The Risk Assessment carried out on 15th January 2015 assesses Lamarieo, before controls are applied, at Level B on seven identified hazards (indicating a possible risk of injury of major severity or a likely risk of injury of significant severity). He is assessed at the highest level, Level A, on the hazards regarding injuries to other students, staff and to himself, and of damage to property (indicating the likelihood or possible risk of catastrophic or major injury). The existing controls in respect of Lamarieo's "limited self-help skills" are said to include "two members of staff to support personal care routines".
His IBP for April 2015, to which the contributors are the five staff members in his present class, identified their immediate concerns in very similar terms to those identified in the IBP for the year 2013/2014, set out above. His overall risk assessment for April 2015 has been documented as "High" and a detailed set of behaviours and responses required are identified in the "Behaviour Watch" document attached. All of these responses are clearly designed to prevent Lamarieo from causing injury to himself and to other students or members of staff.
Mr Seabrook submits, relying on Liz Utting's observations, that the necessary classification of risk within the school setting is very different from that required in the home. Duties of care owed to other pupils and staff members, together with obvious intimacy issues relating to his care, necessitate a higher degree of control and structure within the classroom setting. Even at school, provided Lamarieo has the right level of support and control within the right environment, the controls identified as required in the Risk Assessment are said to reduce his risk to Level E, the lowest level.
I accept that the obligations owed by the school necessitate a high degree of care and control but the significance of the January 2015 Risk Assessment, in my view, lies in the recognised unpredictability and potential seriousness of Lamarieo's outbursts. The risks arising from the hazards identified include, for example, his vulnerability in unknown social situations, particularly while in community settings, his reaction to touch, difficulties in empathising with or understanding the social behaviour of others, reaction to busy or noisy places, sensitivity to certain sounds, sights or tastes, and his inability to understand instructions and requests or to express his wants and needs.
In addition to the Risk Assessment prepared by Firwood School, Bolton Social Services carried out an "Unplanned Review - Reassessment" between 11th September 2014 and 26th March 2015. In it the assessor, Heather Ashworth, referred amongst other things to Lamarieo's problems with chronic constipation and frequent bouts of excessive soiling. Addressing need under the heading "Managing my Actions" she identified a 'Rating 1: Critical' and she listed a number of behaviours in respect of which Lamarieo requires support, as follows:
"1. Lamarieo can be physically aggressive towards others during heightened behaviours. He is not a morning person.
2. Lamarieo can be destructive of property, this includes throwing items, grabbing out.
3. Lamarieo can become very anxious and does not cope with change well. He will self harm through biting hands/fingers, increased verbal noise.
4. Lamarieo does not like the invasion of his immediate personal space and is likely to respond aggressively to this.
5. Lamarieo is prone to dropping to the floor and sit down when he is out and about in the community. More so when tired and/or bored with activities.
6. Lamarieo does not cope well with busy environments; the noise, volume of people, sounds. He can be obsessive about items.
7. Lamarieo will smear faeces. He will also become distressed when his pad needs be changed.
8. On arriving home from school, if he "launches" his shoes this is an indication of agitation and heightened behaviours."
In relation to 'Personal Care', his rating was again reported as "Critical", as was the case in respect of all the needs referred to in this assessment. Ms Ashworth's decision was as follows:
"Lamarieo is doubly incontinent. He wears pads which need to be changed regularly. He can become distressed if he needs changing so needs to be checked regularly.
Lamarieo can require 2:1 support during all personal care. Depending on Lamarieo he can be supported by one care staff and have access to a second person if needed. This can usually be determined by Lamarieo's mood. He has been known to smear faeces. He will wake in the night when he needs changing. Once changed, he will settle back down again.
Lamarieo requires a shower both in the morning and the evening. He requires full support with all aspects of his personal care."
In relation to 'Keeping Safe', the following is recorded:
"Lamarieo has a minimal sense of danger, however he is kept safe as a result of the level of support and supervision he receives from his family and staff in provider services…
Lamarieo is prone to falls or tripping up due to his poor balance.
Lamarieo has no sense of danger and needs assistance to be closely supported when out and about…
Lamarieo has 1:1 support with access to a second family member in his home, either to swap places with the other because he is very support intensive and/or additional support is required in personal care tasks.
In the community 1:1 and access to a second carer."
As regards 'Accessing the Community' it is reported as follows:
"Lamarieo needs support to attend all medical appointments in the community. He requires 1:1 with access to a second person…
Lamarieo needs structure and routine in all aspects of his life more so social and leisure. This is to ensure he remains in good health, kept mobile and more importantly manage his behaviours and moods. Not having meaningful and active activities causes heightened behaviours and upsets the family home considerably. During these times, supporting Lamarieo becomes physically and emotionally draining for his parents and siblings… Lamarieo enjoys being outdoors and being active..
Lamarieo doesn't use public transport due to the unpredictability of his behaviours and the risk posed to self and others when in heightened behaviours…
Lamarieo will be settled and happy in his days due to varied and stimulating activities. These will occupy his mind and keep him physically active."
Maggie Sargent regarded it as highly unusual, in her experience, to have this level of prescription in a Social Services assessment addressing need, and as a clear indicator of the serious risk Lamarieo is assessed as presenting, as at March 2015.
The Case Manager, Wendy Ruffle, was formally instructed in May 2014. She has since then liaised with Social Services and discussed Lamarieo's needs with his parents and with Jackie Lee at a meeting on 26th May. Ms Lee was noted to be already involved with Lamarieo through the Direct Payments scheme. In her report Ms Ruffle described Lamarieo's poor sleep pattern and problems with constipation, and the fact that he was displaying challenging behaviour on a regular basis. At school he did not interact directly with his peers. He could work alongside other students but was not working with them. The staff tended to give him space and to allow him time to calm down, but this was not always possible and Lamarieo could lash out if his agitation increased.
In relation to the activities of daily living she noted that Lamarieo was going out into the community "on good days" with Jackie Lee as his main carer. She reported, in this respect,
"1.100 Jackie Lee reported that Lamarieo enjoys going out into the community. She has to be very careful where she takes Lamarieo due to his difficulty coping with noise and enclosed, crowded spaces.
1.101 It would be safer to go out with Lamarieo with two carers to enable safe management of his behaviour should he become agitated."
Ms Ruffle's recommendation is that the provision of care and support should ensure that two adults are available in the house at all times to maintain Lamarieo's safety, as well as two carers being available to enable Lamarieo to go out into the community independently from the family at least twice per week. A behavioural management strategy will, in her view, be essential to assist new support workers to understand how to work with Lamarieo in the most effective way.
On review on 28th January 2015, having regard to the recent school Annual Review, Ms Ruffle noted that, since the introduction of extra care at home and the increased teacher to pupil ratio at school, Lamarieo's behaviour had settled down and that he had been able to engage in more social interactions with his family and with peers. Nevertheless her understanding is that Lamarieo still becomes frustrated, agitated and aggressive on occasion, and that his outbursts are unpredictable.
In January 2015 Ms Ruffle prepared her own Risk Management Plan, in relation both to "Community Access", when Lamarieo goes out into any public space, and to "Risk to Others" in general. The risk level was assessed in both as "High" applying the risk assessment matrix as to likelihood and severity of consequence set out in the plan. The identified risk, that in the community he may lash out at a member of public and that, more generally, he may lash out at family members, carers or the general public, was reduced to "Moderate" by the measures identified as necessary to minimise that risk. In relation to Community Access the two measures were:
"1. 2 people to accompany Lamarieo into the community.
2. When Lamarieo is having a bad day (to be communicated by his family) go to familiar spacious environments."
In relation to Risk to Others the measures were:
"1. 2 adults available to respond to Lamarieo's needs at all times.
2. Allow Lamarieo space when he is feeling frustrated.
3. Find a method of communication which Lamarieo can use and understand so that he knows what is expected of him or can ask for what he needs."
Ms Ruffle acknowledged that she has had only minimal observation of Lamarieo herself before preparing her reports and assessments. However, her assessments were all based on the discussions she had not only with Lamarieo's family and Jackie Lee, but also with his school teachers and the statutory services. The Risk Management Plan, in particular, was based not only on information from Mr and Mrs Cocking, but on what Jackie Lee had told her.
Ms Ruffle considers Lamarieo's behavioural difficulties to be cyclical. Notwithstanding the improvements noted at school, she said that Mrs Cocking had spoken to her very recently on the telephone about concerns with Lamarieo's increasing aggression and there are still, in her view, "flash points" that need to be managed safely. She had witnessed one such incident herself in July last year, when Lamarieo hit his mother in the eye as she tried to get him out of the car and into the dentist's surgery.
Ms Ruffle disagrees with the suggestion that having one principle carer in place together with additional, occasional support, as proposed by the Defendant, would be sufficient in Lamarieo's circumstances. Even with the male agency carers who have recently taken Lamarieo out on planned activities, these outings have not been problem free. She described an incident involving Lamarieo lashing out at his mother when one of these carers, known as Sampson, tried to take him back inside the house because his nappy was found to be soiled. Since then Sampson had decided that he should not take Lamarieo out on his own. This was a sudden escalation to aggression in what was a quite straightforward situation and it is indicative of the difficulty in predicting when such an incident will happen.
A further example of unpredictability of this sort is to be found in the notes made by the physiotherapist, Liz Cowan. At the request of Wendy Ruffle, Ms Cowan assessed Lamarieo at home on 5th December 2014 and proposed a treatment plan. She noted on one occasion in her treatment records that, on 22nd January 2015, when she attended school for a physiotherapy session with Lamarieo:
"Lamarieo happily came into the little room and lay on the mat and took his shoes off. Unfortunately he then became upset and lashed out towards my head – no real contact made. For safety and in the hope of keeping him settled we moved into the classroom."
Against this background I have considered carefully the "care diary" notes of Jackie Lee and others, given the Defendant's reliance upon them. In my judgment they do not bear the evidential significance that Mr Seabrook seeks to attribute to them.
First, the various care notes we have, including those made by Jackie Lee which form the bulk of them, are accepted to be incomplete or undated. They do not therefore provide a continuous record.
The first two, typewritten pages describe, in brief terms, eleven days in Lamarieo's life between the 5th and 18th January 2014. There are many references to soiling and sleep problems and to incidents of aggressive behaviour, Lamarieo lashing out at his mother, for example, and almost knocking the iron out of her hand on one occasion.
There are then thirteen very brief, handwritten entries on a "Daily Evaluation" sheet made in 2015 by, I assume, agency carers, one of whom may be Sampson according to the signature. They cover odd days in January, February and April, ending on 9th May 2015 and they refer only to various outings with Lamarieo. It is correct that some of them note that there were "no issues" or that Lamarieo was "settled" or "happy". However, given the detailed assessments being contemporaneously carried out by Firwood School and Bolton Social Services, and the assessments of Wendy Ruffle and others involved in Lamarieo's care and management, such brief entries cannot reasonably be regarded as indicating that Lamarieo's behaviour was no longer causing difficulty, or that he was not still prone to unpredictable episodes of violence in the earlier part of this year.
Secondly, Jackie Lee's notes, which span a period from January 2014 to April 2015, are not official entries on care logs, in the form that the courts are used to seeing in such cases. Maggie Sargent considered, with some justification, that they are not the detailed notes you would expect a professional carer/support worker to make. They do not include, for example, bowel action charts or behaviour charts, or ABC notes (Antecedent, Behaviour and Consequence), where carers record and log particular behaviours, so as to enable those who are providing care and support for that individual to improve the management of that care. Those who employ and supply care workers are now always asked to specify the risk assessments that have been carried out, the risks that have been identified, the training that is required and the steps that have been taken to protect carers from injury. The notes made by Jackie Lee do not therefore provide detailed information of the kind that is normally to be expected from someone providing personal care and support. In my view that affects the reliance that can be placed upon them as providing an accurate picture of Lamarieo's condition and behaviour during this period.
Thirdly, Ms Lee's notes are plainly written by someone who is a close friend of the family or who is regarded, as Wendy Ruffle observed, as a member of the family, and who obviously has great affection for Lamarieo. Ms Lee knew the family before she became Lamarieo's support worker and the relationship between herself and his family is therefore different from that which the family would have with a professional carer. There is some force in Ms Sargent's observation that her notes reflect that relationship. She refers, for example, to being "emotional watching Jayden and Lemar have so much fun", or says (about Lamarieo) "bless, I love him to bits", or "I have so much respect for Marva, love her to bits" and "had great weekend with Lemar and all his family". Further, from February 2015 onwards, the notes have been written so as to appear as if Lamarieo himself were the author. Ms Lee writes, for example, "my first day at Alan's was very exciting", or "Jackie sprayed me with Alan's aftershave. She likes me to smell good when she gives me a big hug," or "can't wait for dad to come home from Scotland."
It is correct that these notes do not make repeated references to Lamarieo's poor sleeping patterns, or to him regularly soiling himself, but it is incontrovertibly the case on all the evidence that chronic constipation, overflow incontinence and poor sleep patterns have been a regular feature of Lamarieo's life over the years. Their absence from Ms Lee's notes is in my judgment an indicator of their regularity and familiarity, rather than of any absence or reduction in their frequency.
I do not accept Mr Seabrook's submission that these difficulties are now occasional or infrequent, or that Mr and Mrs Cocking have exaggerated them. The suggestion that Mr and Mrs Cocking have misled the professionals involved in assessing Lamarieo, or have exaggerated the problems currently being experienced is unsustainable. I find both Mr and Mrs Cocking to be honest and reliable historians, whose accounts are supported by the other evidence in the case, in particular the documentary evidence and the evidence of Sam Manna, Wendy Ruffle, and experts instructed in this case.
In their most recent reports both the paediatric neurologists refer to Lamarieo's significant constipation and poor sleep patterns and advise that there will now be no improvement in his sleep disturbance difficulties. Wendy Ruffle spoke to both Mrs Cocking and Jackie Lee in mid 2014 and noted Lamarieo's regular and severe constipation and the lack of a well established sleep pattern. The occupational therapist, Caroline Penny Smith, visited Lamarieo and his family again in January 2015 and confirmed in evidence her understanding as to his continuing sleep disturbance and soiling problems.
I agree that the evidence indicates there were particular problems with constipation and incontinence on occasions between September 2013 and the early part of 2014. Intermittent flare ups are, however, a feature of this condition and the medication that Lamarieo receives for it. Occasionally he has to be admitted to hospital for more invasive treatment, with all the problems of incontinence and overflow that ensue. This problem also exacerbates his poor sleep pattern. I accept the evidence of Mr and Mrs Cocking that Lamarieo's wakefulness at night and problems with constipation are features which are still presenting now as they have done in the past. They occur irregularly and will vary in seriousness, but they are both constant and extremely unpleasant features of Lamarieo's life, which they manage as best they can. It appears unlikely that there will now be any significant improvement.
Nor do I accept the submission that reliance can be placed on Jackie Lee's notes as indicating that she has been managing Lamarieo's care on her own without difficulty, or that there has been a dramatic improvement in his behaviour since mid 2014. It is correct that there are many references throughout her notes to Lamarieo being happy, excited and giggling, and to him having fun and doing things which are aimed at encouraging his independence. There are also, however, a number of references to him being anxious or upset and, on occasions, to him hitting out or pulling his mother's hair, pulling her hair when she was driving, going for his younger siblings, or grabbing at Jackie Lee's coat, falling to the floor screaming and hitting out.
Some of her notes are headed "Incident". The first (undated but probably before May 2014) describes a day when Jackie Lee and Mrs Cocking were in a BHS store and Lamarieo could not have a CD that he wanted. Ms Lee has noted that Lamarieo pulled her scarf and that she went to the ground while Lamarieo was screaming, hitting out and trying to get out of his wheelchair. He then became very angry and was hitting out at Mrs Cocking. Ms Lee noted "It was hard to keep him in his wheelchair and ensure the health and safety of others."
The second, dated 23rd July 2014, describes Lamarieo grabbing his mother by the hair while they were both out shopping and to him becoming angry. In the car he went for his three year old brother and is said to have "attacked" his mother again. The note indicates that Mrs Cocking called Jackie Lee to come and help them and that, when she arrived, Lamarieo hit out at both of them but they managed to move out of his way. Later on she states that she took him for a walk but he went for her, raising his hand and trying to grab her and screaming. She notes once again, on 1st November 2014, that Lamarieo became angry and upset and grabbed at her when he could not find the DVD he wanted. He then hit out at her again when she could not help him.
I accept, on the evidence, that there was an escalation in Lamarieo's behaviour in late 2013 and the first half of 2014. Jackie Lee was present at the Social Services meeting on 25th February 2014, when everyone who was there agreed that this was the case and that there was a need to discuss ways of managing him and to share good practice.
I find on the evidence that Jackie Lee did initially refuse to go out with Lamarieo on her own after the "scarf" incident, when Lamarieo attacked her. Although this does not appear in her notes and Mrs Cocking does not refer to it in her witness statements, I accept Wendy Ruffle's evidence that Ms Lee told her this at interview. Wendy Ruffle interviewed both Jackie Lee and Mrs Cocking on 26th May 2014 and referred expressly in her report to Ms Lee's concerns about taking Lamarieo out into the community.
Caroline Penny Smith also recorded her understanding that this was the case in the statement prepared following the joint meeting of the occupational therapy experts on 13th May 2015.
As Jackie Lee's notes indicate, however, and as both Mr Cocking and Wendy Ruffle said in evidence, Ms Lee has in fact continued to take Lamarieo out on her own on occasions after this incident. I find that she did so because of the special relationship she has with this family, her genuine affection for both Lamarieo and his mother and her wish to help them out when she can. While the evidence shows that his behaviour became more settled in the later part of 2014, I find that there have still been further, violent outbursts on occasion. I also accept the evidence of Mr and Mrs Cocking that there have been further problems with aggression in the weeks running up to this trial, as they both described.
The key feature in relation to these violent outbursts is that they are unpredictable. While I accept that there are some well recognised triggers, this is not always the case. Even when a trigger event happens, the evidence shows that it is not always possible to avoid it, or to defuse the situation before the violence escalates.
There is no doubt that these challenging behaviours are the product of Lamarieo's brain injury and his profound cognitive impairment. At times he is sociable, pleasant and cooperative, as Dr Rosenbloom stated. At other times, however, he is aggressive and very difficult to manage. Dr Smith also noted his unpredictable physical aggression, both at home and at school. Caroline Penny Smith described him in her report as a delightful young man who is well supported by his family. Her evidence in the witness box, which I accept, is that he is also a very challenging and very difficult young man to work with, who has complex needs.
Given that these behaviours are the product of his brain injury, the question is whether there can legitimately be said to have been a major improvement in his general behaviour and in his performance at school in recent months, as the Defendant contends, negating the need for the care and support regime advocated on behalf of the Claimant. In addition to the carers' notes, Mr Seabrook places considerable reliance, in this respect, on what he suggests is the promising Annual Review from Firwood School for the 2014/15 academic year.
Educational Psychology Evidence
In his report Dr Rosenbloom properly deferred to expert educational psychology assessment with regard to the details of Lamarieo's learning difficulties. Assistance was given in this respect by Dr Peter Bendkowski, chartered educational and practitioner psychologist, who carried out a home visit and also spent a whole day at Firwood School observing Lamarieo on 14th November 2013. Dr Bendkowski was also in court to hear the evidence of the factual witnesses and the suggestions being made in cross examination as to Lamarieo's progress and improvement in recent months.
Dr Bendkowski's qualifications and expertise are accepted. He has many years experience in this field. His opinion, which he said remained the same after hearing the evidence given in court, is that Lamarieo has very limited cognitive skills coupled with autistic traits, which are quite profound. His learning difficulties are therefore severe and he has challenging behaviours across a range of settings.
Cognitively his ability to interpret and interact with his environment is very restricted in scope. He has no spoken language and his communications are therefore heavily dependant on the experience and interpretive skills of those around him with ordinary intellect. His understanding of language is at a very low level for his age. He understands some concrete ideas that are linked to activities and he also understands prohibitions and permissions. However, he can manage only simple ideas and concepts. His understanding of the world is restricted to basic and immediate 'cause and effect' situations, and the following of set routines that are familiar to him. His ability to link ideas into meaningful sequences of behaviour is very limited.
In relation to his autism, Lamarieo displays difficulty in accepting new situations and has a strong attachment to known routines and patterns of activities. For example, in his free time at school he likes to watch cookery programmes and he will tolerate others in the same room provided they do not interfere with this activity. It is very difficult to move him on until the programme has ended. Moving him early can cause him to react quite badly. His interactions with others also show autistic features. During group activities he tends to sit separately from others and he shows a low tolerance of others being in his proximity. Members of staff become concerned about his reactions if another student makes a noise, or moves near him in a way that can cause him to react quickly. He actively avoids eye contact, which is very limited in group situations as is facial expression and body language. He does not mix well with other students.
At Lamarieo's age the emphasis at school is on personal development and learning life skills. With respect to learning he has very limited skills. He is totally reliant on the staff to structure and guide him, even when engaged on activities to which he has had long exposure over time. Directing him to do something is usually done by verbal instructions accompanied by gestures. His problems with vision may contribute to his difficulties.
As Dr Bendkowski emphasised, it is necessary to understand the context for Lamarieo's achievements, as noted in the Annual Review. The National Curriculum Four Key Stages are too high for pupils with significant special educational needs. Special schools in the United Kingdom therefore use the system of "P Levels" in which the attainment targets apply to pupils aged 5-16, with special educational needs, working below Level One of the National Curriculum. Lamarieo's levels have therefore been achieved using PECS (the Picture Exchange Communication System), an aided form of augmentative and alternative communication used extensively for children with global developmental delay and for those with autism spectrum disorder. It aims to support oral language and it relies on visual cues to help to understand very basic communication. It is highly structured.
As at November 2013, when Dr Bendkowski was observing him at school, Lamarieo's understanding of communication was judged to be at a very low level of functioning. His Level P5 for Personal and Social Education suggested that he could take part under close supervision in activities involving two or three others, by maintaining interactions and taking turns in a small group with support. Overall his attainments showed him to be at the middle to upper range of the P Levels. However, he had not achieved levels 7 or 8 for any areas of functioning, which showed a low level of functioning for his age.
Dr Bendkowski also noted consistent behaviours that indicated when he was becoming distressed, for example biting his hand or rocking backwards and forwards. His observation was that Lamarieo found social interactions hard to deal with. While at the school he saw no instances of challenging behaviour that led to violence, although he did see difficulties in moving him on from one task to another, when he bit his hand, rocked and made noises. This caused the Teaching Assistant to move her chair away from him, to avoid him lashing out, and to stay away until he stopped rocking. The staff he spoke to related a series of problems they were having on a regular basis with Lamarieo's aggressive outbursts. He could not be relied upon to cope with interactions from adults he did not know and he also had to be dealt with very carefully by those who were familiar with him in order to avoid injury.
The incident log for September and October 2013 contained a number of incidents of face-scratching, hair pulling, hitting out and other students being pushed over. There was also passive resistance by floor sitting. These problems have existed from a very early age, as the school records show, and the approach has for some time required staff to try to read his behaviour and to head off problems before they escalate.
In Dr Bendkowski's opinion Lamarieo's low level of cognitive ability, his restricted social skills and his aggression all result in the need for a high level of supervision and support, both now and in the future. He is not safe to be left unsupervised in a normal household and he has little awareness of danger. He will need the equivalent of 24 hour care for the rest of his life. This means, in relation to personal care, that he cannot be left without a carer for any period of time. Whilst this person does not have to be in his presence for the whole of any given 24 hour period, there must be someone in close proximity to ensure his safety and also for the safety of others. Lamarieo can be left in a secure indoor environment for very short periods of time when he wishes to be on his own, with the proviso that he can be monitored and that there is a carer nearby to intervene if necessary.
After his time at Firwood School comes to an end, he will continue to need highly structured activities throughout the day, to keep him safe and to prevent his behaviour deteriorating. These activities will require carers/educators who are used to challenging behaviours and severe learning difficulties, and who are trained in appropriate restraint techniques, if necessary. The extent to which a balance is required between planned activities and more informal leisure periods will vary as he grows older. There will however always be a need for carers or other support workers to lead him through a typical day and ensure variety. A single person could not work with Lamarieo on his own. He would need the presence of at least two workers with him throughout each day.
In challenging this evidence Mr Seabrook suggested that Dr Bendkowski had painted a bleak and depressing picture which was unjustified; and that the most recent Annual Review had shown substantial improvement in Lamarieo's behaviour and excellent progress in his academic subjects. Dr Bendkowski did not accept this analysis and, in my view, his reasons for rejecting this suggestion are compelling.
In relation to 'progress' in the academic subjects, it is correct that the entries in the recent Review praise his progress and achievements in a number of respects. These include, for example, Lamarieo's stated enjoyment of music and use of different instruments, his use of a range of techniques in art, and his good concept of number and shape-placing in mathematics. On first reading it is easy to lose sight of the context for these and other, encouraging observations.
Lamarieo has profound cognitive impairment. He is, to use the phrase often repeated throughout this trial, an 18 year old with a toddler's brain. Toddlers with normally functioning brains, as Dr Bendkowski pointed out, will progress incrementally. Lamarieo has severe mental retardation, with an arrested state of development. He will not therefore progress, as that term is usually understood. The P Levels that Lamarieo has achieved in this 2014/15 year demonstrate this. P Levels are descriptors of a young person's capacity to engage in certain activities and it is misleading to think of them as equivalent to National Curriculum Levels. The P Level measures are used to describe an accrual of skills within that level, but there is no incremental progress for someone with Lamarieo's condition. A student with an arrested state of development who is functioning at a particular level will not therefore progress to the next level.
Glowing as the written descriptions of his achievements are, the recent report indicates that in all the subjects save for Personal and Social Development (PSD), there is no real change in his P Levels for 2014/15 from those in the previous year. I accept Dr Bendkowski's evidence that the increased P Levels to Levels 7 and 8 in PSD (for interaction, independence and attention) are most probably accounted for by the highly structured classroom environment he is in now and the higher pupil/staff ratio in his class, up to 5:3 from 5:6 in 2013. It is of significance, in my view, that this 5:3 ratio is the highest that Dr Bendkowski has ever seen.
Save in this respect, however, the progress described in the various school subjects describes Lamarieo's gaining of further skills within the particular P Level, and not any incremental gaining of intellectual power. Lamarieo is therefore doing more things, probably due to the highly supportive classroom environment, but he is only functioning at the same level. He cannot build on these achievements to progress to the next level.
The increased P Levels for his Personal and Social Development are important, however, because this subject is concerned with Lamarieo's behaviour. Dr Bendkowski agrees that late 2013 to early 2014 appeared to be a period of some crisis for him. However, after the provision of the increased staff/pupil ratio, and, possibly, the careful selection of those students who were to be in the same group as him, Lamarieo is noted to have settled well and the incidents of challenging behaviour have significantly reduced.
The improvements described must also be understood in context. The reference, for example, in the paragraph dealing with 'Relationships with Others', to Lamarieo as someone who is a "very sociable boy" who now "…delights in the company of others", indicates when the paragraph is read as a whole that Lamarieo is now looking at someone in the "morning circle" routine when their name is called, which he was not doing in 2013. There is no evidence, in the school report or elsewhere, that he is now making contact with others outside the classroom environment. His social interaction is still limited and the school environment is highly controlled. In this highly structured and controlled environment his level of acceptance, when staff give information or instructions, is increasing, which is encouraging. He has also become more co-operative with his personal care needs, and if someone loads his spoon for him he can feed himself independently. These improvements, in Dr Bendkowski's view, are a clear indicator of what can be achieved for Lamarieo with the right regime of structured activities and close supervision.
In relation to the period of deterioration between September 2013 and mid 2014 Dr Bendkowski rejects, as do I, the suggestion that it was due at least in part to the fact that he was prevented from seeing his natural father. That suggested reaction to the separation pre-supposes a level of cognitive ability that Lamarieo does not possess. Lamarieo's insistence on routine is in the present. He is unable to ruminate on things. His long term memory deficit means that it is unlikely he would remember the next day that he had seen his father the day before, even if he had been pleased to see him at the time. Recognition is not the same as recall. He can recognise his father and show pleasure in seeing him, but to say that he was unhappy because he was no longer seeing him is to misunderstand the nature and extent of his profound disability.
This evidence of Lamarieo's difficulties with memory is supported by Lesley Cogher, speech and language therapist, who notes in her joint report that his understanding of language is related to the here and now and to concrete concepts. While he may also understand and retain some names and some plans for the immediate future, his understanding is limited, as is his ability to remember.
The preponderance of the evidence in this case is therefore that Lamarieo has presented with difficult and challenging behaviour over many years, since his early childhood. These behaviours are the product of his brain injury, arising from his severe learning and communication difficulties and his profound autism. His problems with constipation may also have exacerbated the difficulties. The evidence also demonstrates the unpredictable and erratic pattern of these challenging outbursts over the years. As Mr. and Mrs. Cocking describe, there are good periods and bad periods. Despite the more settled behaviour described in the recent school report, episodes of challenging and aggressive behaviour are continuing to occur from time to time and, in my judgment, they are likely to continue to do so in the future.
On the evidence I consider that the most likely explanation for his deterioration during 2013/14 is that his condition is cyclical, and I accept Dr Bendkowski's opinion in this respect. He emphasised that individuals with this mix of physical disabilities, autism and profound mental retardation will go through times when they are upbeat and amenable and times of crisis when they are not. The reasons for this are unknown. Sometimes it is simply inexplicable. What is known is that with increasing age comes cognitive decline, so that the chances of unpredictable periods of aggression become greater over time.
I found Dr Bendkowski to be a thoughtful, measured and impressive witness. In my judgment his evidence as to Lamarieo's abilities and behaviour does not present an overly bleak picture. It is, rather, a picture injected with realism, supported as I find by the other evidence in the case, but notwithstanding Lamarieo's profound difficulties he is also optimistic as to what can be achieved for him with the appropriate level of support.
Conclusions: The basis for determining Lamarieo's needs
Lamarieo is a dearly loved child and an important member of a large happy family. He is also a profoundly disabled child due to brain injury sustained at birth. His parents wish him to remain with them in the family home, with support that will enable them to lead normal lives of their own and with their other children, while still playing a full part as Lamarieo's parents.
His epilepsy is reasonably well controlled and is likely to remain so. His cerebral palsy affects all four limbs. He is visually impaired but cannot wear glasses because he always pulls them off. He is independently mobile but sometimes needs assistance when walking. He is highly dependant on others for all aspects of his personal care and daily living as a result of his profound cognitive, social and communications impairments. It is these which inhibit the use of his upper limbs and hands.
He is doubly incontinent and requires to be changed frequently. He has serious problems with constipation, which is managed by regular medication and occasional hospital treatment, often resulting in overflow incontinence. This is a regular feature of his daily life, varying only in frequency and intensity. His sleep pattern is poor and erratic. He will occasionally sleep through the night but usually wakes two or three times and often requires a soiled nappy to be changed. Whenever he wakes he needs someone to be with him. He can be unsteady on his feet and cannot be allowed to wander. He has no sense of danger. All these features are permanent. Caring for him, managing him in the shower and lifting him as he grows has caused Mrs. Cocking to suffer from problems with her back.
His intellectual limitations, arrested development and learning difficulties are severe and he is on the autistic spectrum. He cannot communicate save by noise, gestures and occasional touching and his ability to understand language is very poor. He functions at the cognitive level of a toddler and will not progress intellectually, although he may accrue or develop further skills within his relevant P levels with appropriate, structured activity and support.
Due to his brain injury he has presented with episodes of extremely challenging behaviour over the years and he continues to be prone to aggressive outbursts when he will lash out at people, usually women, scratch their faces or pull their hair forcibly.
All the experts have seen Lamarieo on just one or two occasions, as Mr Seabrook points out, and the Court has in mind the potential limitations of a snapshot view in considering their assessments. In my judgment, however, all the evidence in this case leads inexorably to the clear conclusion that Lamarieo's violent outbursts are unpredictable and that his condition is cyclical. Anger, volatility and his labile nature are features of this condition. There are some well recognised triggers for his aggressive behaviour, which careful anticipation and tight management will sometimes be able to defuse, preventing an escalation, but this is not and will not always be the case. The triggers can also be wholly innocuous or unforeseen events, such as loud noises (for example the fire alarm at school), or the way in which objects are placed, or changes in the sequence of events. Sometimes there can be an outburst without such a trigger. This, as I find, will continue to be the pattern in the future.
Lamarieo has done markedly better at Firwood School, in terms of both behaviour and learning life skills, since the pupil/staff ratio changed. He clearly benefits from the highly structured and controlled environment and from close supervision. Episodes of challenging behaviour still occur from time to time, however, both at school and at home and there will continue to be flash points which need to be managed safely.
His time at this school will come to an end in July 2016. He may secure a place at a college for a further period of education to the age of 25 but, even setting aside funding issues, whether he does secure a place is presently uncertain. There is, in addition, no certainty that he will be assessed as suitable for an adult centre.
Mrs. Cocking has been his primary carer over the years, although Mr. Manna and Mr. Cocking have both provided a great deal of 'hands on' care and support themselves.
Mrs. Cocking admitted that she had little assistance with care for long periods of time, that she had struggled with the idea of having care workers in her home and that she did not ask for more help. The Defendant's case is that this demonstrates both her ability to manage on the amount of care she has had and her likely future resistance to further care. I do not accept this analysis. Marie Palmer, Occupational Therapist called on behalf of the Defendant, has reported that trust is a major issue for Mrs. Cocking and that it is very important that she feels she can trust others to care properly for Lamarieo before she is willing to leave him in their care. I accept that assessment having heard Mrs Cocking's evidence.
There are references in the Social Services records to this, essentially protective attitude towards her son. On 20 October 2011, for example, Mrs. Cocking was noted to be unhappy about different people coming in to care for Lamarieo and that she needed to feel confident about the carers. Wendy Ruffle described Mrs. Cocking's internal struggle in this respect over the years, both wanting more care and knowing it to be necessary, yet at the same time being resistant to handing over the care of her son to people she does not know and who do not know him.
In my judgment this explains, in part, the slow progress there has been in introducing the necessary care and therapeutic regime since Ms Ruffle was instructed in May 2014. The other reason, as Ms Ruffle explained, is that the present family accommodation is wholly unsuitable for the necessary support package for Lamarieo. There is simply insufficient space for multiple carers/therapists and the existing space is already fully utilised by the family.
Other entries in the Social Services material, for example a meeting on 6 February 2012, refer to Mrs. Cocking's worries about using all the Direct Payments she has received. This, I find, also explains her admitted reluctance to use the sums she has received to date for Lamarieo's care, both the Direct Payments and the Interim Payment made by the Defendant at the time of Swift J's order on 27 June 2013. I do not accept that this indicates Mrs Cocking's opposition or resistance to further care, as Mr. Seabrook suggests. On the evidence I find that her reluctance to spend this money has been due to her concern to ensure the protection of funds for Lamarieo's care, given the uncertainty as to the future and how much money there will be for his needs. The liability compromise is clearly relevant in this respect and I find that this was not an unreasonable attitude for her to adopt in the circumstances.
The evidence, however, is that this attitude is changing. Having help from Jackie Lee in caring for Lamarieo has contributed to this change and Mrs. Cocking has now also accepted help from other carers. Most recently, in the Social Services "Unplanned Review – Reassessment" in March 2015, Ms Ashworth noted Mrs Cocking's comment that "…she finds the day to day emotional and physical support of L all consuming and this has often taken her away from time with younger siblings and her husband…without paid support she is not sure how they can continue. They all love and cherish L but find it a daily struggle to keep him occupied and maintain his moods."
I accept Mrs. Cocking's evidence that she now wants to have Lamarieo living with them all in a suitable property, where he can have people caring for him and who have access to him without disrupting the lives of her other children. The weight of the evidence is that Mr. and Mrs. Cocking are both willing to accept help for Lamarieo from professional carers in appropriate accommodation. The transition will need to be managed carefully but there is little doubt, in my view, that Mrs. Cocking's genuine wish is now to stop being Lamarieo's carer and to have professional help for her son.
It has been agreed that Lamarieo's life expectancy is to 67.5 years of age.
QUANTUM: AGREED SUMS
General Damages
These have been agreed at £250,000 with interest to date of trial (15 June) of £27,900.00.
Past Losses
Before trial the total sum agreed for the past losses claimed, including past care, was £299,998.00. The relevant, individual heads of claim drawn from the Schedule appear at paragraph 7 of the Claimant's written closing submissions and it is unnecessary to repeat them here. Interest, net of £940 earned on the interim payment (this point is dealt with further below), is £125,929.15 giving an overall total of £425,927.15. Further past losses agreed in the Counter Schedule, or subsequently agreed by the Occupational Therapists, are set out at paragraph 8 of the closing submissions. Together with interest of £8,523.51 this gives a total of £28,683.18.
Paragraph 9.2 of the submissions lists a number of miscellaneous past losses in respect of Travel and Holiday costs, which were in dispute on the Schedules. Save in relation to two items, at paragraph 9.2.9 and 9.2.11, which are claimed as pleaded, the Claimant has made sensible concessions in order to avoid disputes over what are comparatively minor sums.
The two disputed items relate to the two week family holiday in Jamaica in October/November 2013 to visit Mrs. Cocking's family. The first claim is for £1,200 for the cost of a driver. The Defendant suggests in the Counter Schedule that some transport costs would have been incurred by the family in any event, in particular since, as Marie Palmer reported, the area where Mrs. Cocking's mother lives is remote. In fact, it appears from her report that Mrs. Cocking informed Miss Palmer that it was the remoteness of her mother's area that led the family to stay in a hotel about 14 miles away, for the sake of Lamarieo's health, and therefore to incur the costs of a driver to and from her mother's home. In the circumstances I consider that this was a reasonable expense which was reasonably incurred and I allow it in full.
The second item claimed, as a therapeutic activity, is the sum of £264.00 for swimming with dolphins, for the Claimant and carer. The Defendant makes the valid point that the Claimant would have incurred costs for activities in any event and allows half this sum in the interests of proportionality and to allow something for the carer's activity costs. I shall therefore award the sum of £132.00.
The total sum awarded for the items set out at paragraph 9.2 of the submissions is therefore £10,998.29 rather than the sum which appears at paragraph 9.2.15. There will be a small adjustment necessary to the interest due on that sum, which I calculate as £4,650.08, but which the parties will no doubt be able to agree.
Agreed Future Losses
The Court of Protection Fees to be incurred in future are agreed at £332,000.00.
In addition, the Occupational Therapists agreed those items of equipment as set out in Appendix 1 to the Claimant's written submissions. The total figure in Appendix 1 (£15,052.59) is different from that which appears at paragraph 10.2 of the submissions (£17,335.39). This needs to be clarified and will, I assume, be capable of agreement.
QUANTUM: DISPUTED SUMS AND ISSUES TO BE DETERMINED
I shall deal with these in the following order:
a) Remaining item of past loss: the claim for a Land Rover Discovery vehicle
b) Credit for Interim Payment against Interest
Future issues
c) Appropriate Multipliers
d) Loss of Earnings and Pension
e) Future Care and Case Management
f) Future Physiotherapy, Hydrotherapy (pool hire for Lamarieo only) and Speech and Language Therapy (Joint Reports)
g) Occupational Therapy and Equipment
h) Miscellaneous Expenses
i) Holidays
j) Future Travel
k) Assistive Technology
l) Accommodation
(a) The Land Rover Discovery
In March 2015 Mr. and Mrs. Cocking privately purchased a Land Rover Discovery HSE SDV6 3.0 Automatic for £47,200.00. The Defendant says that this was an unnecessary extravagance. Mr. Seabrook accepts that the Defendant cannot insist on the Claimant purchasing a vehicle through the Motability Scheme but he contends that the Land Rover was unsuitable and inappropriate for Lamarieo's needs.
The question is therefore whether the Defendant has shown that Mr and Mrs Cocking behaved unreasonably in purchasing this vehicle which, it is agreed, is not an approved vehicle under the Motability Scheme.
The family previously owned and drove a Ford Galaxy purchased through the Motability Scheme. The contract for this vehicle was due to expire in August 2014 and 12 weeks notice is required to purchase a new one. It is not entirely clear on the evidence where the original idea for purchasing a Land Rover Discovery came from, and there may have been some time pressure. However, I reject the Defendant's suggestion, implicit in the cross examination of Mr. and Mrs. Cocking, that they deliberately decided to opt for a much more expensive car than was needed, and that they were motivated by greed.
The family have previously taken road trips up to Scotland, where they all enjoy going. In provisionally selecting the Land Rover, Mr and Mrs. Cocking thought that all the family would be able to travel up to Scotland in comfort and safety and would be able to go "off road" in it, which Lamarieo would enjoy and which they were unable to do in the Galaxy. Mr. Cocking's evidence that his wife felt uncomfortable about owning a car that she regarded as "above our station" because of her son's disability, is entirely consistent with other evidence in the case as to her motivation in securing compensation for Lamarieo and with my own assessment of her as a witness.
I find on the evidence that before the Land Rover was purchased Mr and Mrs Cocking spoke to Alex Guy, the Deputy, about it, and that in December 2014 Mr. Guy asked Caroline Penny Smith to advise on its suitability. A meeting then took place between Mr. and Mrs. Cocking, Ms Penny Smith and a Motability expert, when there was a lengthy discussion about the benefits of purchasing the Land Rover and what could be done to make it appropriate for Lamarieo's needs. Both Ms Penny Smith and the Motability adviser considered it a suitable vehicle for Lamarieo with appropriate additions, and there is no evidence which contradicts that assessment. Mr. and Mrs. Cocking accepted that advice and purchased the vehicle. With more headroom than the Ford Galaxy and equipped with, among other things, a safety guard, a specialist step and a Houdini harness, I accept their evidence that it has enabled Lamarieo to travel in it comfortably and safely with his family, together with the necessary luggage and equipment and his present manual wheelchair.
In challenging this item of expenditure in its entirety, it is not clear what alternative vehicle the Defendant is in fact suggesting should have been purchased at this time, or at what cost. Mr. Seabrook accepts that he cannot submit that the Claimant's decision to purchase a vehicle privately rather than through the Motability Scheme was itself a failure to mitigate. Instead it is suggested that the Land Rover was extravagant and unsuitable for Lamarieo's needs. As Mr Sweeting submits, the Defendant would only be entitled to a sum representing the difference between reasonable expenditure and the alleged unnecessary extravagance in this respect.
The suitability of the Fiat Qubo recommended by Marie Palmer, by way of future funding for travel, is in dispute and the decision not to purchase that vehicle cannot therefore be said to be unreasonable. The alternative vehicle being proposed by Ms Penny Smith, a VW Caravelle, is more expensive, with a purchase price of £50,000, and Mr. Guy considers its resale value to be less than that of the Land Rover. Another Ford Galaxy would have had a lower purchase price but also a poorer resale value than the Land Rover. The Land Rover Discovery therefore represented a better business decision.
On the evidence I am not persuaded that there was here a failure to mitigate. In purchasing a vehicle suitable for Lamarieo's present needs, as adapted, and which also represents a good investment, after taking professional advice, I find that the Claimant has mitigated his loss and has acted reasonably. He is therefore entitled to recover this expenditure.
b) Credit for Interim Payment against Interest
The aggregate rate of interest is agreed at 42.28%. In August 2013 and in accordance with the order of Swift J the Defendant made an Interim Payment of £200,000.00 to the Claimant. That is the only Interim Payment made in this case. The dispute between the parties is whether the Claimant should give credit for this Interim Payment by stopping the accrual of interest upon an equivalent sum of special damages or upon part of the claim for general damages.
For the reasons set out in the Claimant's closing submissions the question of what the Interim Payment on damages represents is financially significant. If credit is given by halting the accrual of interest on general damages from August 2013, the Defendant gets the benefit of a reduction in the interest claim in the sum of £7,460, the aggregate rate for interest on general damages from August 2013 to June 2015 being 3.73%. If, alternatively, credit is given by halting the accrual of interest on special damages from August 2013 the Claimant need only give credit for £940 of interest saved, the aggregate rate on special damages for the same period being 0.47%.
Neither the Order made by Swift J nor the agreement between the parties relating to the payment of an Interim Payment of damages specifies what that payment represents. Nor is there any rule of Court specifying what the Interim Payment represents, CPR 25.7 referring to interim payments of "damages" and providing that the Court must not order an interim payment of more than a reasonable proportion of the likely amount of the final judgment.
The Claimant's written submissions at paragraphs 5.6 - 5.9 seem to me to be entirely correct. Neither Counsel addressed this point in oral submissions. The usual assumption is that an interim payment will be sought and paid to a claimant to fund expenditure that will thereafter become part of the claim for special damages (see Cobham v Eeles [2010] 1 WLR 409, at paragraph 4). That applies in the present case, as the schedule of payments/purchases produced by Wendy Ruffle demonstrates. Indeed the Defendant is critical of the fact that more of the interim payment has not been used to fund additional care for Lamarieo. It therefore follows logically that credit should be given for interest on that sum from the special account rate. As counsel for the Claimant point out, it would have been open to the Defendant to seek the Claimant's agreement to an offset against interest on general damages, when negotiating the interim payment, if the general damages rate were favourable to them. There was no such agreement in this case. The set off, in my judgment, should be against interest on special damages.
Future Losses
(c) Appropriate Multipliers
In this case the Claimant contends that a whole life multiplier of 28.43 is appropriate. This is a fixed term multiplier, for a term of 49 years, using Ogden Table 28, giving "Multipliers for pecuniary loss for term certain". The Defendant does not dispute that Table 28 produces that figure but contends, in the Counter-Schedule, that the correct multiplier is to be obtained by using Table 1, namely "Multipliers for pecuniary loss for life (males)", in accordance with the methodology set out at paragraph 20 of the Explanatory Notes to the Ogden Tables. That approach, it is said, "allows for the distribution of deaths around the expected length of life" and results, Mr Seabrook submits, in an impaired life multiplier of 27.69 (the figure in the Counter-Schedule was originally 26.76).
Save for submitting that the Defendant's approach is correct and that I should adopt it, Mr Seabrook did not deal with this point in any detail or refer me to any authority in his closing submissions. The relevant law is set out at paragraphs 4.5 - 4.7 of the Claimant's written closing submissions and is not in dispute. I therefore intend to deal with this issue briefly because, in my judgment, Table 28 is the correct table to use in calculating the relevant multipliers in this case, adopting the approach of both Swift J in Whiten v St George's Healthcare [2011] EWHC 2066 (QB) and Foskett J in Reaney v University Hospital of North Staffordshire NHS foundation Trust [2014] EWHC 3016 (QB), after a full review of the competing arguments and authorities. It seems to me unnecessary and unhelpful to conduct that detailed analysis again here, because I entirely agree with their reasoning and their conclusions, which apply equally in the present case.
In this case the parties have agreed a life expectancy of 67.5 years for the Claimant, being the mid-point between the life expectancy assessments of the paediatric neurologists. Those assessments were made by reference to this Claimant's mortality risks as a whole, not just those risks associated with his cerebral palsy, so the experts have already factored in impairment of life. The medical evidence has therefore established how long this Claimant can be expected to live. As the authors of McGregor on Damages (19th edition, paragraph 38-216) point out, "….since mortality will already have been taken into account in coming to a view on life expectancy, to use Tables 1 or 2 will result in a double discount, evidenced by the fact that the use of Tables 1 and 2 invariably produces a somewhat lower figure than emerges from use of Table 28….in paragraph 20 of its explanatory note….the point about double discount appears to have been missed by Ogden."
Adopting the same approach, the Claimant's calculation of the multiplier for future loss of earnings, set out at paragraph 4.8 of the closing submissions, seems to me to be entirely correct. Discounting the figure of 27.82 by 0.82 from Table A for contingencies other than mortality, on what I accept is a conservative basis, results in a multiplier of 22.81 (the discount figure seems to have been discounted twice in the Schedule, which explains the difference).
(d) Loss of Future Earnings and Pension
The Claimant's future earnings are claimed at the level of median gross annual earnings, giving a figure of £21,451.00 net per annum, and there is no dispute as to the multiplicand. Applying the multiplier of 22.81 (see above) the award for future loss of earnings is therefore £489,297.31.
The Defendant makes no allowance in respect of loss of pension. The basis for this, as set out in the Counter Schedule (Mr Seabrook made no submissions upon it), is that the Claimant "has not made any allowance in his loss of earnings claim for employee contributions that would have been deducted from his salary". This, it is said, would "broadly cancel out any benefit from employer contributions."
This, however, is to misunderstand the claim being made, as Mr Sweeting submits. The Claimant is not claiming the pension that his own contributions would have provided, in which case it is accepted that a deduction would have to be made. He submits, rather, that the Claimant is entitled to his full loss of earnings, including the contributions he would have made to a pension, since he is entitled to make those contributions in order for him now to be able to purchase a pension. This claim is therefore confined to the additional contributions that his employer would have made.
I accept that submission and award the sum claimed under this head. These are contributions that employers will have to make under the terms of recent pension legislation, requiring them to designate workplace pension schemes and automatically enrol all employees aged between 22 and state pension age with earnings at the income tax threshold.
The relevant calculation is set out at paragraph 11.4 of the closing submissions, applying the multiplier of 22.81 to the figure of £700, making the award one of £15,967.00.
(e) Future Care and Case Management
There is no dispute that this Claimant will need an extremely high level of privately paid care for the rest of his life. The claim is split essentially into two periods: care to the age of 19, and care from age 19 for life. It is hoped that when he leaves school next year Lamarieo will be offered a further educational placement until the age of 25, but there is presently no guarantee as to that or any other placement being available.
The central dispute between the parties relates to care in the home setting. The experts agree that Lamarieo needs 24 hour care. Maggie Sargent recommends that two carers should be available at all times during the day because of the particular challenges posed by Lamarieo and the difficulties presented for those who are providing that care. Liz Utting's recommendation is for one carer for 14 hours in the day plus additional hours for 'double up' purposes to be organised flexibly, for outings away from home and in times of need. This flexible care translates to 28 hours per week if he does not have a further education placement from the age of 19 and 14 hours per week if he does.
There are also disputes as to the appropriate rates for carers and for a Team Leader, and as to the appropriate rate for case management. Both experts have agreed the need for a sleeping night carer with waking night carer contingency for six weeks per annum.
Both experts are registered nurses and both are well qualified to express an opinion as to different care needs and the merits of different care regimes. Ms Utting has worked in both hospital and community settings and has wide experience in service and education management for people with learning disabilities, autism and complex needs. Mrs Sargent has considerable practical experience over many years in assessing the care needs of those with severe disabilities living in the community, and in establishing and supervising appropriate care regimes. She is currently a director of a national care consultancy and case management company which provides case management services to those with profound disability.
Liz Utting considers that it is unnecessary for Lamarieo to have two carers daily all the time in the home, in addition to the family support. Her views, in summary, are as follows. The present arrangement, with one external carer, is adequately meeting his needs. She sees no reason why this should change in future and considers that his care will be better managed when he has his own accommodation and input from a psychologist in relation to behavioural management, and from carers and a case manager. Two carers, she considers, would be likely to crowd Lamarieo and disrupt the family household. There should be no problem in organising and planning 'out of home' activities, thus knowing when 'double up' care is likely to be required. His outbursts are caused by well-known and recognised triggers which can be anticipated, avoided and controlled in the home environment. This is different from the school environment, where there are duties of care owed to other pupils and to staff which do not apply at home. Lamarieo is responding well to the present 1: 1 support at home and one dedicated carer will be adequate in future.
In any event, she suggests, there will be many occasions during the day when other people involved in the care delivery, such as the physiotherapist, case manager and occupational therapist, will be in attendance at the home, so that the dedicated carer will not be alone all the time. In addition, Mrs Cocking has made it clear that she intends to continue to play a major role in his care and the care team will support her in this. While she is not suggesting that Lamarieo's parents should be relied upon to support him, it is inevitable that Mr and Mr Cocking will want to spend time alone with Lamarieo and as a family, when a carer will not be required. Given the spontaneous nature of his behaviour there is no guarantee, in any event, that aggressive outbursts or similar incidents will not occur from time to time, even if two carers were with him. Even when there has been more than one person with him he has still, on occasions lashed out at someone.
Relying upon Ms Utting's analysis and conclusions Mr Seabrook submits that, in more spacious and appropriately adapted accommodation, with proper planning and anticipation, and with both support and space afforded to Lamarieo, the allowance she proposes is both generous and realistic. It will meet his needs and keep under control any risk of violent outbursts.
Mr Seabrook criticises Mrs Sargent's conclusions on the basis that they are based heavily on what she was told by Mr and Mrs Cocking in January and July 2014 and on her visit to the school in June 2014, when things were very much worse for Lamarieo and since when the situation has improved. At the time of the joint statement by the care experts (June 2015) she was mistakenly of the view that the school were "still struggling" with Lamarieo, and she also understood that his exclusion from school had been for a longer period than just one day. This, he submits, undermines the value of her opinions as to the care required in this case.
In turn, Mr Sweeting criticises Liz Utting's conclusions, based as they are on just one meeting with Lamarieo and his parents, on 16 December 2013. This was at a time when, on the Defendant's case, Lamarieo was in the middle of a period of crisis, which raises questions as to why she was able to be so sanguine at that stage about his behaviour, needs and prospects. Further, although she has had the relevant education documentation, she has never visited Firwood School and observed Lamarieo herself, or spoken to the staff about him. In addition, unlike Mrs Sargent she has never visited or spoken to Mr Manna either.
I have taken these and other criticisms into account in assessing the evidence each of these experts gave, but ultimately my clear view is that the recommendation of Mrs Sargent is the more persuasive, supported as it is by the other evidence in the case and my determination of the main areas of dispute between the parties as set out above. As Mr Seabrook fairly acknowledged, his submissions as to the appropriate level of care and case management would depend largely on my findings as to the nature and extent of Lamarieo's challenging behaviour and needs, and as to whether there has been the remarkable improvement he suggests, with still further improvement likely in the future.
Given my conclusions on those issues, I am in no doubt that in the case of this exceptionally challenging young man, two carers will be required at all times, for the sake both of his own safety and the safety of others. This provision will not, in my view, overwhelm or crowd him unnecessarily. Experienced carers can avoid that risk and ensure that he has sufficient space while simultaneously ensuring his safety and well-being.
The weaknesses of Ms Utting's analysis were exposed in cross-examination. Although she stated that she was not proposing the incorporation of Lamarieo's parents into the care regime, this seemed to me to be implicit both in her report and in her evidence, at least so far as his mother is concerned. Lamarieo's ability to manage so far with one external carer is largely due to his mother fulfilling the role of second carer. Mrs Cocking's devotion to her son and her wish to remain involved in his life "as a mum" does not indicate her intention to continue to act as his carer. Indeed the evidence shows the opposite to be the case. She is now anxious to resume a normal family life with all her children, free from the heavy burdens imposed by Lamarieo's demanding and daily needs.
The authorities establish that a tortfeasor cannot avoid payment for commercial care in reliance upon the fact that a family member has, in the past, demonstrated by their devotion their ability to care for a claimant. That family member is not obliged to act as carer or case manager and is entitled to be freed from the need for constant supervision. (See Iqbal v Whipps Cross University Hospital NHS Trust [2006] EWHC 3111 (QB); Massey v Tameside & Glossop Acute Services NHS Trust [2007] EWHC 317 (QB); and Crofts v Murton [2009] EWHC 3538 (QB).
The same difficulty arises in respect of Ms Utting's suggestion, at one point in her evidence, that Lamarieo would be spending some of his time with his natural father, in the additional property being claimed, which could accommodate one dedicated carer, presumably with Mr Manna assisting as required. Leaving aside the fact that Mr Manna, now aged 66, would be unlikely to be able to provide regular, physical care of the sort required, the Defendant is in any event disputing that a suitable property should be funded for Mr Manna in addition to a more spacious and suitably adapted home for the Claimant to live in with his mother and family. I address this claim later on.
There are similar problems with Ms Utting's suggestion that the one dedicated carer she proposes would not be alone during the day because others involved in the overall regime, including visiting therapists and the case manager, would be "involved in the care delivery". There are a number of difficulties with this. On the Defendant's own case this did not seem a very hopeful proposal so far as the occupational therapist is concerned, since very little occupational therapy is recommended for Lamarieo in the home. Thus, as Ms Utting had to concede, such a therapist would rarely be there. The frequency of visits from the physiotherapist and speech therapist is also yet to be determined. The suggestion that the team leader could act as a second carer when required was, as she accepted in the witness box, inconsistent with her failure to allow for any additional time in this respect, and to allow simply for an uplift to the pay of the one carer who would be involved at any given moment.
It seems to me inherently illogical to state that one dedicated carer will be sufficient, while simultaneously suggesting that others can be expected to assist as second carers in this way. It is also unrealistic to expect specialist therapists, tasked to assist Lamarieo to develop specific skills within his capabilities, to provide support in relation to his general care needs. As Ms Utting recognises in her report, those charged with caring for him will need to have the aptitude and ability to support him appropriately and will require "specialist training in behavioural management techniques…to include non aversive physical intervention techniques as there are likely to be times when they will need to physically hold him and employ breakaway techniques."
This recognition by Ms Utting of the serious challenges posed by caring for Lamarieo serves in my view to demonstrate the inadequacy of flexible, "double up" care of the kind she proposes. While I accept that additional care could be arranged in advance for some outings, Lamarieo's needs are not confined to one period in the day. He has different needs at different times, spread over the course of the day. There are therefore real, practical difficulties in setting up a regime with one carer, allowing for flexible care as needed. Further, the arrival of a different carer on one day, for the purposes of a particular outing, seems to me to be fraught with difficulty given the evidence that Lamarieo does not react well to strangers or to changes in his routine.
Most important of all, given the risk of aggressive outbursts at any time, flexible care of the kind proposed simply cannot accommodate the unpredictable. The unpredictability is the product of his brain injury. While there are some, well recognised triggers, the evidence shows that they will not always be responsible for an eruption, either in the home or in the community. Sometimes an entirely innocuous event will trigger an outburst. Sometimes it will not be possible to anticipate or avoid a triggering event. Nor will it always be possible to prevent the escalation from first to second stage of a violent outburst. Sometimes an outburst will move straight to second stage. Ms Utting herself recognised that, even when there has been more than one person looking after him, Lamarieo has still lashed out on occasions. I cannot accept that Ms Utting's evidence that, in such circumstances, the presence of two carers would make a bad situation worse. Sometimes Lamarieo may require restraint, or his space may need to be invaded for a while, as she expressed it, until he has calmed down.
This is not to concentrate on the negatives, as Ms Utting suggested. Addressing the risks posed by the effects of his brain injury does not detract from a proper recognition of his endearing personality and the lovable qualities that he undoubtedly has. In my judgment Mrs Sargent's reliance upon the documentation and risk assessments in this case is entirely justified. The consistent theme throughout the evidence is that two people will need to be present for Lamarieo's personal care needs and community activities. Even assuming he gains more skills within his present level of functioning, the preponderance of the evidence is that he will never progress to the extent that one carer will be able safely to manage him.
Dr Bendkowski's opinion as to quality of life is of particular importance in this respect. Over his anticipated 40 years of life Lamarieo will need to be kept occupied during the 'working day' and to have a routine of varying activities to maintain and hopefully expand his skills. His condition prevents him from deciding for himself what those activities should be. For such a structured programme he will need to have two people with him for the whole of that day. It would be too much to expect one person to be with Lamarieo for 6 to 8 hours and to keep him actively engaged in this way. Two people will be required to sustain those structured activities smoothly and effectively.
For all these reasons I accept the recommendation of Maggie Sargent that two carers are required at all times during the day for this Claimant. There is no guarantee that he will be offered a placement at a college, or elsewhere, or on what basis, and this regime should therefore run as from July 2016, after Lamarieo leaves school.
Rates
For the same reasons I accept Mrs Sargent's evidence that it will not be easy to recruit and retain carers who can look after Lamarieo, given his challenging behaviour and the need for a very tight package of care. There is in fact no real disagreement between the experts that experienced staff will be required, with social care qualifications and with behavioural training and input from a psychologist, who can develop the skills necessary to manage, care for and communicate with Lamarieo effectively and consistently.
Maggie Sargent allows for such experienced carers at rates of £10.50 per hour on weekdays and £11.50 per hour at weekends, plus a team leader at an additional £5.00 per hour. Liz Utting allows £10.00 per hour and an additional £2.00 per hour for the team leader post, on the basis that these are rates above those advertised for similar roles, both locally and nationally, and which reflect the need for carers with the necessary attributes. It is agreed that there will be additional training and holiday costs, and provision for carers' pensions as from 2016.
Mrs Sargent's experience nationally is that it is necessary to try and attract carers who will see this as a job offering security over the years. It is not an incremental job and, since there is no career progression, it is likely that some carers will leave, but the rates she proposes will make it more likely that experienced staff of the right calibre will both be attracted to the job initially and will want to stay. These are important considerations in this case. In my judgment the figures she proposes are not excessive and I accept that they reflect market rates. Mrs Sargent has extensive, practical experience of organising care regimes in such cases and I accept her evidence that these rates reasonably reflect the need to attract and retain suitable carers in this case. I therefore award the carer and team leader rates allowed by Mrs Sargent.
I also prefer Mrs Sargent's proposed allowance in respect of case management hours. I do not accept the submission that 160 hours per year is excessive. It is in fact only some 3 hours per week, which seems to me to be a reasonable and moderate allowance given the work likely to be involved in organising the "package" for this complex and demanding case. Similarly, the allowance of 14 hours per year for crisis intervention by the case manager is entirely reasonable.
There is little between the experts in relation to case management rates, Ms Utting costing this at £95 per hour and Mrs Sargent at £98.00. Ms Sargent selected a rate which was mid-point in the range between £90.00 and £107.00, the latter figure being the rate charged currently by Bush & Co. On the evidence before me, however, that is a very high rate and I accept Ms Utting's evidence that it is beyond the usual range. I therefore award an hourly rate of £95 for case management in this case. Travel costs are agreed.
I do not allow the claim for three carers to accompany Lamarieo on holidays (see paragraph 2 (h) of the joint statement). In respect of family holidays Liz Utting has allowed for two carers for two weeks per annum, paid 14 hours per day with an additional 'out of pocket' weekly expense allowance. I accept Mr Seabrook's submission that two carers represent a sufficient and reasonable allowance in relation to accompanying Lamarieo on holidays. I address the issue of holidays further below.
I anticipate that the parties will now be able to calculate the annual sum required for care and case management on the basis of these findings. Consideration can then be given to whether it should be awarded as a lump sum or as periodical payments.
(f) Future Physiotherapy and Speech and Language Therapy
The future costs for physiotherapy sessions, including initial assessment, are based on the joint report obtained from Wendy Murphy and are set out at paragraph 11.6.1 of the Claimant's closing submissions, as adjusted to reflect the agreed life expectancy and changes in the multiplier. The total sum is £49,150.00 and there appears to be no dispute either as to this sum or the cost of the tandem cycle (£5,550) and trampoline, plus one replacement (£800) also recommended by Ms Murphy.
The cost of hiring the Jubilee hydrotherapy pool in Bolton, also recommended by Wendy Murphy, is agreed by the Defendant at £1.35 per session for 92 sessions per annum. The total award, applying the adjusted multiplier, is £3,531.01. The Claimant does not pursue the costs of hiring the pool for family swim sessions.
The costs of future speech and language therapy are based on the joint report of Lesley Cogher. The sums themselves, which appear at paragraph 11.6.2 of the submissions, are not in dispute. Adjusting the multiplier for the separate annual periods, namely for the first two years, to the age of 25, and thereafter for life, the total award is £43,605.00.
(g) Future Occupational Therapy and Equipment
The Defendant relies on the reports and views of Marie Palmer, whose evidence is that the level and type of occupational therapy provision and equipment envisaged by Caroline Penny Smith is unwarranted. The Claimant's case is that the provision allowed by Ms Palmer is so grossly inadequate as to call into question whether she is properly fulfilling her role as expert to the court.
The very limited heads of agreement between these experts as to necessary items of equipment are set out in Appendix 1 to the Claimant's closing submissions, in the total sum of £15,052.59. The distance between them in relation to future occupational therapy and equipment generally is considerable and it is unusual to see disagreement to this extent in litigation of this kind. The reason for it, having heard evidence from both experts rigorously tested in cross-examination, is what I find to be a wholly unrealistic approach adopted by Marie Palmer towards necessary provision for this Claimant.
Given that Lamarieo's life expectancy is agreed to be to the age of 67.5 years, her lifetime allowance for occupational therapy of just £2,375.00 (allowing only 25 hours at £95.00 per hour) is in my view wholly inadequate. Her reasoning, that "the carers and team leader will be able to identify and manage his needs in relation to activities" is in my view simplistic. It is also inconsistent with her expressed view that two carers would crowd Lamarieo and worsen his behavioural problems.
In respect of leisure activities, she rejects all the recommendations of Ms Penny Smith and Steve Martin (assistive technology), allowing no item of sensory or multi sensory equipment of the kind he has been benefiting from at school. She allows only for the purchase of a SenSit chair, a Protac Ball Blanket and the 'one-off' purchase of a trampoline, now removed from her recommendations since this was already recommended by Wendy Murphy. She does not consider that Lamarieo "will have any future equipment needs for indoor or outdoor activities over and above that which would have been expected." This assessment, in my judgment, is also inadequate and it is inconsistent with other opinions and with the documentation in this case, for example the most recent Social Services assessment of 26 March 2015, emphasising the need for meaningful, varied and stimulating social and leisure activities to occupy Lamarieo's mind and to keep him physically active.
Mr Seabrook submits that Ms Palmer has concentrated on enabling independence, which does not always depend on overloading someone with stimulating activities, or on the provision of a "factory line" of elaborate equipment. Mr Sweeting's response, which I accept, is that the minimal provision allowed by Ms Palmer is extraordinary and is wholly out of kilter with awards made in this area.
Ms Palmer's minimal allowance is the more surprising since she accepts that Lamarieo has profound neurological problems exacerbated by the physical difficulties caused by his cerebral palsy. She maintained her position in evidence despite agreeing with Ms Penny Smith in the joint statement that Lamarieo presents with severe developmental delay, cognitive impairment, visual impairment, challenging behaviour and very limited communication. She also agreed that it was essential to take his cognitive and behavioural problems into account in relation to the provision of equipment, to encourage him to maintain his maximum level of mobility and activity and, significantly, that it is important to assist the carers in relation to his future care.
Her suggestion (at page 3 of the joint statement) that his behavioural issues should improve with the establishment of routine and structure and improved bowel management indicates, in my view, an inadequate understanding of the nature and extent of Lamarieo's disabilities. It is also inconsistent with the other evidence in the case, in particular the evidence of Dr Bendkowski, which I accept, as to the daily activities and stimulation that Lamarieo will need, all of which will be likely to help in controlling his behaviour and in enabling him to maintain the degree of independence he has gained already with the intensive structure and support he has at school. I found Ms Palmer's approach to be unhelpful and her evidence unsatisfactory and I do not accept it.
The first question is therefore whether the future occupational therapy provision recommended by Caroline Penny Smith, at paragraph 4a of the joint statement, is excessive and unwarranted, as the Defendant suggests. Ms Penny Smith's qualifications and experience in this area were not challenged. She has had many years of experience, in both the NHS and working independently, in assessing the needs of individuals with neurological disorders, including challenging behaviour, visual impairment and autism. Her assessment is also up to date following her second visit to Lamarieo and the family in early 2015, when she was able to review his condition generally and update herself on his condition and his needs.
In my judgment her recommended therapy provision is entirely reasonable for this Claimant. It is based on intensive input for the first ten weeks, with the necessary, initial assessments of both client and equipment, and training for carers on use of that equipment, costing £13,017.50. I accept her evidence that setting up therapy for someone with Lamarieo's disabilities is particularly difficult, and this sum is a reasonable sum for that initial, intensive period. She then provides for ongoing therapy for monitoring and updating, at £1748.00 each year to the age of 30, acknowledging the necessity to adapt to Lamarieo's changing needs as he grows and to ensure that the progress he has made can continue. After he reaches the age of 30 the allowance of £12.380.00 represents about two hours of therapy per annum, which I regard as relatively modest. The travel and mileage costs included are also reasonable.
The disputed items of equipment, inclusive of occupational therapy input and costings addressed above, are helpfully listed in the two tables at Appendix 2 to the closing submissions. I prefer the approach and recommendations of Ms Penny Smith. The Defendant provided no written submissions in relation to any of these items and dealt in only very brief terms in oral submissions with the claim for a powered wheelchair. Referring to the contents of the Counter-Schedule is now unhelpful since the case has moved on, given the oral evidence from the experts at the hearing and my finding that Ms Palmer's evidence is unsatisfactory. In relation to those items other than those covered under the remaining heads below, which are dealt with separately, I find the items recommended by Caroline Penny Smith to be both reasonably required and reasonably costed.
These include the manual wheelchair, insurance and Jay back seating system recommended. I have considered carefully the further recommendation for a powered wheelchair, given that Lamareio is ambulant and will have the benefit of two carers. However, manoeuvring Lamareio when he is out and about has proved difficult at times and the care notes refer to him sometimes tipping the manual chair. The difficulties are likely to increase, depending on the age and stature of his carers, as he grows older and uses the chair more often. Mrs Cocking is already suffering from back problems and will be unable to push Lamareio in a manual wheelchair for any distance, especially over undulating terrain. I accept Ms Penny Smith's evidence that, although he will not use the power chair all the time, there will be times when he does use it. I note also that putting him in his wheelchair is one of the methods presently used to calm him. Use of this wheelchair will also increase as he grows older. I therefore consider that this is a reasonable item for this Claimant.
So too is the Vela Tango chair, which provides full postural support and will help to maintain Lamarieo's physical posture; and the high stair gate recommended, which will provide protection for someone with visual impairment who tends to wander in the night and can stumble. The whirlpool bath is not, in my view, an unnecessary luxury for someone who is so limited in terms of what he can access and I accept that it will have relaxing, sensory and therapeutic benefits for Lamarieo. The claims for a mattress protector, changing table and adapted cutlery are all appropriate, reasonable and wholly unobjectionable in my view.
In relation to the outdoor sensory equipment recommended, the Defendant's general contention that all the sensory provision recommended for Lamarieo will result in overstimulation is unfounded. The aim, which I regard as reasonable in this case, is to increase opportunities for Lamarieo and to ensure that the purposeful activity currently being provided at school is replicated at home when he leaves. I accept Ms Penny Smith's evidence that it is also to ensure that those who are caring for him will have a variety of different options during the day. It will be the function of the occupational therapist to ensure that Lamarieo is not overloaded and that, through proper training, the equipment is all used appropriately.
The philosophy underpinning all the equipment recommended, including items of assistive technology which I deal with shortly, is the need to provide quality of life for Lamarieo and to ensure that he does not sink into repetitive behaviours. Even if he does secure a place at college until he is 25, we know nothing about the pupil/staff ratio there will be, or whether his placement will be full-time or part-time. As Dr Bendkowski pointed out, the equipment recommended will enable those working with him to do more than simply 'mind' him while he watches television and eats snacks, or take him to the park and KFC or McDonalds. Enjoyable as those activities will be on occasion, positive engagement and the ability to provide a variety of structured activities throughout his days is a legitimate aim for this Claimant in ensuring that he has real quality of life. In my view the outdoor sensory equipment, including a specialised swing and roundabout and a sensory garden, is reasonable as are the costs allowed of £5000 every two years, and the Claimant is entitled to them.
The tables at Appendix 2 also include other, disputed items relating to miscellaneous expenses, holidays and future travel.
(h) Miscellaneous Expenses
It is not in dispute that Lamarieo will incur additional costs in respect of future DIY/decoration, gardening, cleaning and laundry, together with the associated costs as set out in the table. The costs allowed by Ms Penny Smith are for Lamarieo's needs, independent of his parents and acknowledge that it will not always be safe for the various tasks under these heads to be done by Lamarieo and carer together. The sums claimed are all entirely reasonable and I reject the lower costings advanced by Ms Palmer.
(i) Holidays
Ms Penny Smith recommends provision for additional holiday expenses, namely (a) long haul holidays for Lamarieo and the family every two years, principally to enable visits to Jamaica to visit Mrs Cocking's family more regularly; and (b) European holidays for the family every two years. She has costed for business class flights for four people, namely Lamarieo, one carer, a second carer or parent and also one sibling, on the basis that he can provide some interaction with Lamarieo during the flight and that it will be difficult for the other parent to look after four children on his or her own. Mr Seabrook submits that this provision is disproportionate and unjustified and that the family would have been paying for their own holidays in any event.
I am entirely satisfied that the cost of business class flights is justified and reasonable in this case. Lamarieo's particular behavioural difficulties, his problems with incontinence and his autism and consequent difficulties in enclosed spaces and with strangers in close proximity to him, all justify the additional costs of the extra space and facilities that business class travel affords. It is correct, as Mr Seabrook pointed out, that he was sedated on the flight to Tenerife, a small amount of medication being sought and prescribed for this specific purpose, and that there were no problems. It is not however unreasonable to view sedating Lamarieo for each flight as an undesirable solution in the long term.
I consider that the costs of business class travel are reasonable and justified for Lamarieo, one carer and one carer/parent, who will be able to provide the interaction necessary. The other children of the family are old enough to enable the other parent to supervise them sufficiently in my view. Subject to my determination as to frequency of flights, dealt with below, I therefore allow Ms Penny Smith's costs in respect of both long haul and European flights, save that it should be for three business class seats rather than four.
There is some merit, in my view, in the Defendant's submissions as to the frequency of holidays and additional costs claimed, for long haul flights to the Caribbean and for flights and accommodation in Europe every two years. I accept Mr Seabrook's submission that this frequency is not justified on the evidence and I shall allow for visits to Jamaica every four years and European flights and accommodation every three years, as costed by Ms Penny Smith.
(j) Future Travel
For the reasons set out above I prefer Ms Penny Smith's evidence as to the VW Caravelle vehicle recommended for this family in the long term. The Fiat Qubo recommended by Ms Palmer is in my view unsuitable because of its size and space limitations. The Qubo would not accommodate a powered wheelchair, to be used on trips out, unless Lamarieo travelled in the front of the car with a single carer, which I agree would be unsafe. It would mean that Lamarieo would have to travel separately from his family and it is reasonable for this close family to want to travel together, in visits to Scotland for example, and for Lamarieo to be part of the family in that sense. The family would have to purchase an additional vehicle adapted for Lamarieo's needs if they ever wished to travel together with Lamarieo and a carer. In my judgment the Claimant is entitled to the VW Caravelle and to the replacement and running costs advised by Ms Penny Smith.
(k) Assistive Technology
The various items of equipment claimed and the revised costs under this head advanced by the Claimant and the Defendant, following the joint statement of Steve Martin and Donna Cowan and with the adjusted multiplier, are set out in Appendix 3 to the written submissions. I do not repeat them here.
There is no dispute as to the expertise and experience of both these experts in this field. Some of the technology relates to helping Lamarieo to optimise his educational potential and develop new skills. Other items are recommended to enable those caring for him to do so safely and effectively. There is some measure of agreement, as set out in the joint statement, as to IT equipment and environmental controls and as to the need for initial guidance and advice, training and support, albeit with some differences as to costs.
Overall there is no dispute between the experts in this case that the costs of the various items suggested by Steve Martin are reasonable. Both experts deferred to the occupational therapists as to whether all the equipment suggested could be integrated practically into the Claimant's home.
In determining what the Claimant is entitled to recover under the heading of educational potential it follows, from my reasoning and findings in relation occupational therapy and equipment, that I regard the purpose of technological provision in this context as also being the enhancement of quality of life for someone with acquired brain injury. If, through a particular item of technology, Lamarieo will be able to achieve a level of independence within his capabilities and thereby improve his quality of life then, in my judgment, he is entitled to it and the Defendant should pay the costs of that item provided those costs are reasonable.
The dispute as to communication devices and multisensory packages relates essentially to need and benefit. Mr Martin, having considered Lamarieo's achievements at school over the years and more recently at Firwood School, and having been present in court when Dr Bendkowski gave evidence, maintained his opinion as to the benefits to be derived by Lamarieo from the technology he suggests. Donna Cowan's view is that he does not and will not have the ability to use much of what is recommended.
In my judgment Mr Martin's opinion as to benefit and need is supported by the documentary evidence in this case, in particular the educational records and the Reviews from Firwood School. As early as June 2000, aged 4, Lamarieo was noted to be able to activate a Big Mac device using a single switch. Good progress with AT programmes involving the understanding of switch action was noted on 14 February 2003.
In his first year at Firwood Lamarieo was said, in March 2009, to have produced some superb work sitting at the PC operating a mouse and to be confident with switch use. Similar observations were made in June 2011, when he was noted to be very capable at using switches, or to be very motivated in using the switch to activate specific ICT gadgets. His ability to operate an interactive whiteboard was noted in the most recent Review.
Mr Martin's suggestions were endorsed by Ms Penny Smith. She has used the multisensory pack and Soundbeam System successfully with adults who have Lamarieo's cognitive impairments and they provide a safe and successful medium for such clients. She envisages their use in a quiet space, in more spacious accommodation, and considers that Lamarieo will benefit from them. I find on all the evidence that the Claimant is entitled to the items claimed, as costed.
The recommended motorised entrance gates and the installation of CCTV are in dispute. Their provision was, however, supported by both Ms Penny Smith and Ms Sargent and I consider these items to be reasonable in this case. The gates will enable smooth entrance to/exit from the property without needing to get out of the car, and will also ensure Lamarieo's safety and security once inside them.
On the evidence, the installation of a CCTV system is becoming a more regular feature in such cases. Ms Penny Smith is now using it in the majority of her cases and Mr and Mrs Cocking would value it in this case. Mr Seabrook raised data protection concerns, but Maggie Sargent's evidence is that legal advice has been sought and obtained by her company as to the lawfulness of such equipment within certain parameters. I accept that evidence. The application, on legal advice, of appropriate guidelines as to the obtaining of consent before installation seems to me to offer security and peace of mind both to anxious families and to those care workers who are supporting vulnerable individuals in areas of the home away from the rest of the family. The use of short clips from the film obtained also provides useful training material for carers.
In conclusion, I find that the Claimant's revised Assistive Technology costs as set out in Appendix 3 are reasonable, both as to need and cost, and that the Claimant is therefore entitled to the total costs claimed, in the sum of £76,810.00.
(l) Accommodation
The Schedule sets out the claim for two suitable properties in this case: one, the principal home, where Lamarieo can live with his mother, stepfather and siblings; and one where he can stay with his natural father, and where his carers can also be accommodated.
The claim is disputed in the Counter-Schedule as grossly overstated. The need for a new principal home is agreed, but not the costs claimed. The Defendant also deducts the full value of the current family home. The claim for a home for Mr Manna is disputed in its entirety. The Defendant does not, however, dispute the availability of such a claim in principle. It is said, rather, to be unjustified and unsupported by the evidence, given that Lamarieo's last contact with his natural father was in September 2013 and that there has been little contact since then.
There is in fact little dispute between the experts, David Reynolds and John Shaw, as to the range for the purchase price that will be required and the costs of adaptation, both for the principal home and the home where Lamarieo could stay with Mr Manna. I deal with the principal home claim first.
Principal Home
The experts are agreed that the current property in which Lamarieo lives is unsuitable for his needs and that it cannot be reasonably adapted. They are also agreed that any future accommodation should be large enough to cater for Lamarieo and his family and that he requires access to a suitably sized bedroom, bathroom, carer's accommodation, therapy space and a barrier free home. After inspection, Mr Reynolds reported in December 2014 that a suitable property in the area was likely to cost in the region of £500,000. Mr Shaw's figure was £430,000.
At the joint meeting on 27 May 2015 Mr Reynolds gave a likely range in purchase price of between £375,000 and £500,000. Similarly Mr Shaw identified a range of between £385,000 and 495,000. As at the time they prepared their joint statement, they agreed on the evidence that the appropriate price band for a suitable property is between £375,000 and £500,000.
Both experts are agreed that additional moving costs will be incurred and each set out their respective assessments in schedule form. There is little dispute between them and the difference is accounted for principally by Mr Shaw's inclusion of furnishings in building costs.
They agree that internal and external modifications together with an extension are likely to be required to a new property. The costs of those modifications, including carer's accommodation and therapy space, are likely to be between £250,000 and £300,000 inclusive of VAT and professional fees, and they agreed a mid-point of £275,000 in this respect, since no property has yet been purchased. Any property purchased which requires repairs would in Mr Reynolds' view incur additional costs.
They have agreed that there will be increased running costs in respect of the new property. The difference between them is small (just over £1000.00) and is due largely to council tax, dependent upon the price of the property purchased.
Mr and Mrs Cocking have been looking for possible properties. In evidence it emerged that Mr Reynolds had previously been asked to assess the suitability of two properties and had prepared two feasibility reports, which were produced at the hearing. The first, prepared in October 2014, identified a property at 3 Green Drive, Lostock in Bolton with a purchase price of £500,000, which he considered reasonable and he believed that this property could be suitably adapted and extended. Negotiations for funds to be provided for the purchase of this property were however unsuccessful.
The second feasibility report, prepared in May 2015, related to a possible property identified by Mr and Mrs Cocking shortly before trial at 2 Wade Bank, West Houghton in Bolton, which he reported that, suitably adapted and extended, could also be made suitable for the needs of Lamarieo and his family. Repairs would also be required to this property, which he estimated at £15,000 in addition to £300,000 for adaptations.
The purchase price of this property, at £375,000, fell below the expected purchase price, and it was this property which led to him identifying the range he did at the joint meeting. Unsurprisingly, he reported that it was a reasonable price, representing the value of the property, its style, location and ability to be extended, but in evidence he emphasised that this was the only property he had seen at this price. All the other properties he had seen were at the upper end of his price range. Mr Shaw had not seen this property, but agreed that it was suitable and that it was a little cheaper than those he had seen on his search.
Mr Reynolds strongly disagreed with an RICS HomeBuyer valuation for this property, which referred to the asking price of £375,000 as being too high and recommended renegotiation down to £325,000. This, in his view, was simply wrong and I accept that evidence for two reasons. First, the asking price is already below the bottom figure for the range identified by Mr Shaw. Secondly, Mr Reynolds had some detailed discussions with the vendor, as a result of which it was clear that he would not contemplate negotiating on the asking price to that level. Mr Reynolds stated that, if this property were not purchased, he would still maintain that a suitable property is likely to be nearer £500,000, which has always been his view, based on his research and the properties he had inspected.
Mr Seabrook submits that the Claimant should have purchased this property and he is critical of the failure of the Deputy to advise the Claimant to do so. After Mr Reynolds and Mr Shaw had given evidence he informed the court on 19 June, during the trial and while evidence was continuing, that the Defendant had made an offer of the purchase price of £375,000 by way of payment on account. He submits that the decision to purchase should have been made speedily and acted upon.
I do not accept this submission. In my judgment there is no question of failure to mitigate here. While the Defendant offered the purchase price of this property during the course of the trial, it is accepted that no offer was made in respect of the necessary adaptations. As it stands now, in its present condition and without repairs and adaptations, the property is not suitable for Lamarieo's needs
The criticism of Mr Guy is in my view misplaced. In considering that the purchase was not in the Claimant's best interests he was entitled to have regard to wider considerations, as set out in his statement of 19 June 2015. A groundwork survey would be needed and planning permission sought. The delays may not be accepted by the vendor, who would appear to want a quick sale, and the purchase process normally takes some 6 to 9 months. Reasonably, in my judgment, the Deputy wishes to ensure that the Claimant has been awarded sufficient by way of damages to cover the purchase price and associated costs and that there is sufficient money to complete the necessary repairs and adaptations. In this context too the liability compromise between the parties is relevant to the decision as to purchase of this property.
Mr Sweeting's primary submission is therefore that the starting point for the Roberts v Johnstone calculation in respect of accommodation should be the figure of £500,000 evidenced by Mr Reynolds. I accept that submission. Although the Wade Bank property has been identified as suitable, there is no guarantee that it will be secured, or that it will be possible to adapt it with the funds available to the Claimant. On the evidence before the court most of the properties identified to date, save for the one at Wade Bank, which I accept stands alone in terms of purchase price, would be outside this Claimant's reach if a pragmatic approach with a figure simply splitting the range were to be adopted. The weight of the evidence is in my judgment in favour of a calculation based on £500,000.
As I have stated, the adaptation costs are agreed at £275,000 and enhancement is also agreed by the experts at £16,000. The award for additional running costs should be £6225.00. The total award in respect of the principal home is therefore £842,801.75. (The figure stated at paragraph 11.8.6 of the closing submissions is slightly lower, but I have taken the figure in Appendix 6. No doubt the parties can clarify and agree this figure.)
The Defendant submits that I should deduct the full value of the present family home but, as Mr Seabrook fairly acknowledged, the decision in Whiten is against him in this respect. For the reasons set out by Swift J, in particular at paragraphs 465 – 469, she considered it wrong in principle for the value of a property that would have been owned by the Claimant's parents to be deducted from the value of the new property to be owned by him. I entirely agree. Such a deduction would be unfair to the Claimant and would inevitably result in him being inadequately compensated for the loss of investment income on the capital value of the new property. In effect it transfers the parents' borrowing to the Claimant, as Mr Sweeting submits. It removes the asset which would otherwise be available to the family and the Claimant's siblings and prevents the parents disposing of their property as they wish. It precludes the parents from choosing to live elsewhere in retirement or in the event of any matrimonial breakdown. It also assumes that there is no mortgage on the property. I therefore reject the Defendant's submission as to deduction of the value of the family home.
Mr Manna's Home
The Claimant seeks to recover in addition the Roberts v Johnstone claim advanced on behalf of his natural father. I have considered this claim with care, mindful both of the costs involved in making such an additional award and the Claimant's right to a family life and therefore to regular contact with his natural father, as Mr Sweeting emphasises.
Mr Reynolds has visited Mr Manna's council property and his opinion that it is unsuitable for Lamarieo's needs, and cannot be reasonably adapted to make it suitable, is agreed by Mr Shaw. Mr Reynolds' opinion as to the likely cost of a suitable property is £250,000, which is for a three bedroom ground floor apartment in a modern block or a three bedroom house capable of extension on the ground floor. He visited the area and carried out research on properties in that area.
Mr Shaw identified a potentially suitable bungalow near Moss Side for £265,000. Alternatively, he thought that a suitable house with a ground floor extension would be within the range of £160,000 to £200,000, although Mr Shaw accepted that he did not know the area and Mr Reynolds was unable to find any property at this price in the area when he did his research.
Depending on the property purchased the experts agree adaptation costs of between £20,000 and £70,000, the lower figure being more likely for a more expensive property. There is little between them as to moving costs (£4050 - £4500, the difference being in respect of stamp duty), or as to increased running costs (£9,500 to £10,000).
Mr Seabrook submits that there would have to be exceptional and compelling reasons to award a claimant the costs of a second home for a natural father, and that in this case it would amount to a wholly unjustified extravagance. He points out that there has been only limited contact since overnight contact was stopped in September 2013. Mr Manna lives only 16 miles away and there is no reason why the Claimant cannot be taken to see him in the car, or why Mr Manna cannot come to Bolton and take Lamarieo out nearby, with his carer to assist.
Mr Sweeting submits that on the evidence before the court Mr Manna provided a great deal of dedicated care for Lamarieo for the first seven years of his life and continued to share that care with Mrs Cocking until September 2013. He also made some adaptations to his own home, including an additional stair rail, the purchase of softer fitted carpets and settee and the fencing and securing of his garden. He has continued to act as Litigation Friend in this case and his evidence that he genuinely wishes regular contact with his son to be restored was not challenged. He is not therefore an absent or passive parent, as the Defendant suggests. Since his relationship with Mrs Cocking has broken down, he would find it difficult to visit the Claimant at the home of his mother and stepfather and he wishes to have Lamarieo come and spend some time with him as he used to. Inadequate provision for accommodation where Lamarieo can stay, assisted by his carers, is likely to widen the gap between father and son. It is in Lamarieo's best interests that he continues to have regular contact with his natural father and that the estrangement is not extended.
I accept Mr Sweeting's submission that there is no reason in principle why a second Roberts v Johnstone claim cannot be made, and the Defendant is not raising an objection in principle. Mr Sweeting draws my attention to the fact that claims for adaptation to an existing family home or a replacement holiday home, or for adaptation of a grandparents' home have all been held to be recoverable and there is no dispute about that. Further, in Whiten the costs of adaptations to the grandparents' home in Barbados were allowed (see paragraph 500 onwards) so that the claimant could visit them. The claim for the costs of buying and adapting a holiday home in France was rejected not on principle, but on the basis that the claimant would achieve the same benefit, in the few weeks each year that he would use this property, by renting appropriately adapted accommodation or staying in an adapted hotel.
The point is also made that if divorced parents, living apart and sharing the care of a child, then had to cope with a serious and negligently inflicted injury to that child, necessitating adaptation of their properties or the purchase of properties to be adapted, it seems inconceivable that the child would not be able to claim for the necessary adaptations or purchase of a new home for each parent.
I accept therefore that if this Claimant is regularly going to spend time staying with his natural father and have restored to him the relationship he undisputedly had with his father from the time of his birth to 2013, when he was 16, then the costs of purchasing and adapting a property for Mr Manna should not be barred in principle. If he had not been injured, Lamarieo would have been able to visit and stay with his father in his home regularly.
On the evidence in this case and in the particular circumstances that have arisen, I am satisfied that Mr Manna's stated wish to resume contact with Lamarieo is entirely genuine. Indeed the Defendant did not suggest otherwise to him in cross-examination, and it was part of the Defendant's case that Lamarieo's behaviour had deteriorated, at least in part, because of the enforced separation from his father in September 2013. I am also satisfied that Mrs Cocking accepts that their relationship should resume and has no objection to it resuming, to include overnight stay, if there is a suitable property where Lamarieo will be safe and secure and if he has proper support from carers to assist him while he is there.
Given these factors, the long history of shared care in this case, Mr Manna's extensive involvement in his son's life over many years, the relatively modest costs involved and my conclusion that it is very much in Lamarieo's best interests for his relationship with his natural father to be restored, I am persuaded that this Claimant is entitled to the costs of a second property. I emphasise that this decision has been reached on the particular evidence before the court in this case and is not to be regarded as establishing any wider precedent in respect of such recovery.
I accept Mr Sweeting's submission that, on the evidence, there was no real challenge to the figures put forward by Mr Reynolds, which I find to be well researched and reliable, and I therefore accept the calculation set out in Appendix 6 to the closing submissions as the basis for the award under this head of the claim. The Defendant raised no issue at trial as to the application of the multiplier for this calculation.
I anticipate that the parties will now be able to agree the final sums to be awarded under the various heads of claim, on the basis of the findings set out in this judgment, and that they will agree the terms of an appropriate order, having regard to the further consideration that is to be given as to the final form of that order.
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Mr. Justice Edis :
This is an interim application on notice which was argued on 8th July 2015 and in which I have reserved the decision to be given in writing. The application is totally without merit and is refused. I have reserved my decision in order to ensure that the position is set out very clearly without the expense of a transcript for reasons which will become obvious. Mrs. McDaid has argued her case with courtesy, tenacity and passion. She has very wide experience of the civil justice system and complains that previous decisions have been made in various ways which she says are unsatisfactory, and she suggests that this is evidence of a conspiracy against her to pervert the course of justice. The hearing before me has involved consideration of the application notice, claim form, particulars of claim and a witness statement provided by the claimant. She also supplied me with her note of a judgment given by Blake J on 22nd May 2014. I have a bundle of documents and skeleton argument supplied by the defendant which contains an official transcript of the hearing at which Blake J gave that judgment. The Bundle has 20 tabs and 199 pages. I heard argument from both sides in open court. Apart from this, I have no knowledge of this case and have not discussed it with anyone. I have held no ex parte hearings. The claimant says that many previous hearings have included consideration of matters of which she was unaware and of bundles which had been tampered with. This is why I have set out exactly what material has been before me.
The claim form was issued on 2nd July 2015 and says
"The NMC breached its statutory duty to me and committed breaches of contract. The NMC has been negligent with my case. The NMC has committed abuses of power and abuses of process in my case. I have been racially, physically, and sexually abused and the NMC staff who owed me a duty of care did nothing. In fact there is evidence that their barrister Anupama Thompson was behind it. Consequentially I was catatonic with mental shock and the abuse absolutely beat the spirit out of me and my daughter, as I have recovered enough to seek justice and compensation in various forms. Also, as this is a public interest case immediate action needs to be taken. I suggest a summary judgment and an inquiry by Robert Francis QC."
The Particulars of Claim expand on those allegations and claim, by way of relief, the sum of at least £3.3m, damages for breach of contract in the sum of at least £1m or such sum as this Honourable Court may award, interest, costs, declarations of assault and battery among others, damages for all the consequential humiliation, anxiety and distress and such further or other reliefs as this Honourable Court deems fit. This document was, the claimant told me, the result of several efforts to produce a document which the Masters of the QBD would agree could properly be issued.
The interim application was issued on the same day as the claim form and seeks
"Interim relief both financially and in requiring the NMC to return to the register and take out a newspaper advertisement apologising for their actions, either directions or summary judgment, to help repair my reputation. As this is a public interest case the action needs to be immediately and a public inquiry is needed."
The background to this case is a series of disciplinary hearings which resulted in the judgment of Blake J in the Administrative Court in McDaid v. NMC [2014] EWHC 1862 (Admin). I will not rehearse the long history which has involved multiple hearings both before the Conduct and Competence Committee of the defendant and in court. Mrs. McDaid undoubtedly feels that she has been treated wickedly by a large number of people acting in conspiracy with each other. She goes so far as to say that at least some of them have deliberately exposed her to stress in the hope that she may commit suicide. She told me that such behaviour is successful in about 10 cases a year where, she says, nurses or midwives cannot cope with stress caused by the defendant and do commit suicide. She says that her claim is a very important matter of public interest and that either she is right, in which case something should be done to put a stop to this behaviour, or she is "mad" (I quote her) in which case she should be medically examined and treated.
When I asked her what interim order she wanted me to make in the light of the lack of any power to make at least some of the orders which she had sought, she said that the very strong public interest involved in her claim meant that something had to be done and she wanted judicial scrutiny of her claim. She said that she did not seek a trial of the claim, but rather some form of judicial review of it. The claim is based on things which happened at least a year ago and often several years ago. Judicial review is not likely to be available to her because of the time limit on it, if for no other reason.
The Issues for Me
I have to decide
i) What if any interim order to make, and whether to certify that the application is totally without merit. I have indicated at paragraph 1 above that I dismiss the application and do certify that it is totally without merit.
ii) Whether to accede to the defendant's submission (there is no application) to strike out the Claim Form and Particulars of Claim as an abuse of process and as disclosing no reasonable grounds for bringing the claim.
iii) Whether to make a general civil restraint order pursuant to CPR rr. 23.12(a) and (b) and 3.4(6)(a) and (b). I have certified this application as being totally without merit. Proudman J made a General Civil Restraint Order against this claimant on 15th January 2010 for two years. This did not arise out of proceedings involving the NMC. Toulson LJ (as he then was) refused as totally without merit an application for permission to appeal a case management order to the Court of Appeal Civil Division on 24th August 2012 in Judicial Review proceedings against the NMC.
iv) What costs order to make.
Decisions
I am not satisfied that if the claim goes to trial the claimant will obtain a judgment for a substantial amount of money (other than costs) against the NMC. Therefore I have no jurisdiction to make an order for an interim payment by reason of CPR 25.7. None of the other conditions are met. The allegations made are largely based on the decision to strike off the claimant which was the subject of an unsuccessful statutory appeal before Blake J on 22nd May 2014. That being so, they face significant difficulties of proof. The other allegations are of very serious deliberate misconduct against the claimant and it is not possible to conclude that they are likely to succeed.
In my judgment, there is no material on which I can be satisfied that there is a real prospect that an injunction will be granted at trial requiring them to return her to the Register. That being so an interim injunction requiring the NMC to return the claimant to the register cannot be granted. There is no power to require the NMC (either at trial or by way of an interim order) to take out a newspaper advertisement apologising for their actions. There is no jurisdiction to order a public inquiry. The claims for directions and summary judgment do not justify an interim application of this kind. There is no prospect of summary judgment in this case for reasons which I have already indicated when assessing the prospects of success for the purposes of deciding the claim for an injunction and an interim payment.
Therefore this claim for interim relief is misconceived and fails.
I do not intend to strike out the claim form or the Particulars of Claim. This is a matter which requires an application and argument following notice of the application to the claimant. The test for striking out a claim is not the same as that for granting an interim injunction or making an interim payment order. I should not be misunderstood as suggesting that the defendant's application, if made, is likely to fail. The criticisms of the claim and the way it is expressed in the Skeleton Argument served in opposition to this application plainly have force. However, fairness requires that Mrs. McDaid should have the opportunity to consider an application of this kind and to respond to it. I am therefore not going to entertain the application. Its merits will have to be decided on a later occasion.
In my judgment it follows that I should also decline to make a General Civil Restraint Order. I anticipate that the defendant will apply to strike out this claim and, if it succeeds in doing so, a General Civil Restraint Order is very likely to be made given the history of these proceedings and of other proceedings brought by this claimant. Since I have left the fate of the claim open, I consider that I should do likewise with the General Civil Restraint Order.
The claimant must pay the costs of this failed application. These are claimed at £3,000 in round figures. A significant amount of the work which was done in preparation for this hearing involved seeking a strike out of the claim and a General Civil Restraint Order. These submissions have not succeeded. If they do, the time spent will be recoverable under a costs order made then. It should be very cheap simply to resist a patently hopeless application such as the one I have decided. I therefore propose to reduce the costs bill on summary assessment taking these factors into account to £1,000. The claimant submits that no costs order should be made because she is owed money by the defendant under a previous order in her favour. This is disputed but it is not necessary to resolve that. Any issue will have to be resolved by a court which enforces the costs orders if they are not paid.
In the result, the Order which will be made, drawn up and sealed is as follows (I spell this out because of the criticism Mrs. McDaid has made of the absence of a sealed order following the hearing of 22nd May 2014 before Blake J):-
i) The application for interim relief made by the claimant on 2nd July 2015 is dismissed and is totally without merit.
ii) The claimant will pay the defendant's costs of the application summarily assessed in the sum of £1,000.
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Mr Justice Lewis:
There are before the court two applications made in the context of a claim for misfeasance in public office arising out of actions taken by the employees of the Defendant, Herefordshire Council, in connection with the running of Rosedale Residential Home ("Rosedale"), in Ross-on-Wye in Herefordshire.
The first is an application for summary judgment on two issues. The first issue concerns the lawfulness of certain actions taken by employees of the Council at Rosedale on 11 to 13 May 2010 when residents ceased to reside at Rosedale and moved to other residential accommodation. The second issue concerns the lawfulness of alleged decisions taken by the Defendant in 2009 or 2010 not to make arrangements for potential residents to be accommodated at Rosedale because of the Defendant's concerns about the quality of care given to existing residents.
The second application is for an order, firstly, requiring the Defendant to disclose documents containing legal advice about the legality of the actions taken by the Defendant at Rosedale on 11 to 13 May 2010 and secondly, permitting the Claimants to use and rely upon documents containing legal advice about those matters which are already in their possession.
THE BACKGROUND
The First and Second Claimants were at the material time the shareholders in the Third Claimant, Autumn Days Care Ltd. The Third Claimant operated a business of providing residential care homes, one of which was Rosedale. The Defendant is the local social services authority for Herefordshire. The Defendant had made arrangements for accommodation to be provided at Rosedale for certain persons to whom the Defendant owed a statutory duty to provide residential accommodation. It is likely that one or more other local social services authority had made arrangements for residential accommodation to be provided there for persons to whom they owed similar duties. It is likely that other persons resident in Rosedale at the material time were persons who had made their own contractual arrangements enabling them to reside at Rosedale.
Any person who carries on or manages a care home without being registered commits a criminal offence: see section 11 of the Care Standards Act 2000 ("the 2000 Act"). The relevant registrations in relation to Rosedale were in place at the material time. The registration authority was the Care Quality Commission ("the Commission").
Put neutrally, employees of the Defendant had concerns about the quality of the care being provided at Rosedale to some of the residents there. For present purposes, it is sufficient to note that it is alleged that by about 26 January 2010, the Defendant had stopped making arrangements to place those needing residential accommodation at Rosedale and did not inform the Claimants of this fact.
The police investigated allegations relating to certain residents. On 11 May 2010, the Second Claimant was arrested. Employees of the Defendant attended Rosedale. The residents ceased to reside at Rosedale and took up residence in other care homes over a period between about 11 and 13 May 2010. The Claimants' assertion of what happened is set out at paragraph 69 of their re-amended particulars of claim in the following terms:
"69. Mr and Mrs Menon's arrests on 11 May 2010 were planned, for the reasons stated in the email from DS Wells set out in paragraph 61 above. On 11 May 2010, officers of the Defendant, who included Ms Noble, Mr Carver, and Ms Law, went to Rosedale before Mrs Menon was arrested and spent that day telling residents or their relatives and/or those who had power of attorney in relation to the residents that the residents had to be placed at a home other than Rosedale. The employees and/or other agents of the Defendant who were present took charge of the staff and residents during that day, and took over the conduct of the home on that day, by taking away all authority from the members of staff who were present. The social services team members neither wanted to enter into any discussions with, nor hear from the relatives of residents and persons with powers of attorney in relation to the residents. The sole focus of those team members' actions was the forced removal of the residents of Rosedale from Rosedale. Mr Gaurav Menon, who attended at Rosedale when he was told by an employee of Autumn Days of the situation, was told by one or more of the Defendant's employees who were present that he should not talk with the families of residents, or discuss the situation with them, or he would be arrested for "interference". That which is said in the rest of this paragraph about particular matters is merely by way of example and without limitation. Ms Noble said to Mrs Sylvia Bennett, who had power of attorney in relation to Mrs Dilys Luckett, who was at that time a resident at Rosedale: "We are closing the home and you will have to remove Dilys." Mr Carver said to at least Mrs Bennett that he was "acting on instructions to remove residents". Mrs Bennett was given a choice of two care homes for Mrs Luckett to move to, and told by the social services team member who gave her that choice that if she did not exercise it then Mrs Luckett would be moved without Mrs Bennett's consent."
The Claimants subsequently brought a claim alleging misfeasance in a public office on the part of employees for whom the Defendant was vicariously liable. The elements of the tort are set out in Three Rivers District Council v and others v Governor of the Bank of England (No. 3) [2003] 2 AC 1 at pages 191 to 196. For present purposes, and without seeking to define the requirements of the tort, the elements of the tort include the following. First, there must be an exercise of power by a public officer. Secondly, that exercise of power must be unlawful. Thirdly, the public officer must either have intended to injure a person or persons (referred to in the case law as targeted malice) or, alternatively, the public officer must have done the act knowing that he has no power to do so and knowing that the act will probably injure the Claimant. That alternative mental state may be established if the public officer is subjectively reckless as to whether the act is unlawful or not (sometimes described as wilfully disregarding the risk that the act might be unlawful). Fourthly, the actions complained of must have caused loss.
What the Claimants allege is that the actions of the Defendant (1) in not making arrangements to place persons in need of care and attention at Rosedale or (2) in removing, or causing the removal, of the residents at Rosedale are unlawful acts. At paragraph 85 of the amended particulars of claim, the Claimants say:
"85. The employees and/or agents of the Defendant who are identified in the following paragraphs below, (in the case of the employees) for whose tortious acts the Defendant is vicariously liable, acted at least in wilful disregard of the risk of the illegality of the following acts, or alternatively without an honest belief in the legality of those acts, in the knowledge that those acts would cause loss to the Claimants:
85.1 deliberately refusing to act in accordance with the expressed preferences of the potential residents at Rosedale,
85.2 deliberately failing to make known to potential residents of Rosedale and/or their relatives and/or the persons who had power of attorney in relation to those potential residents, that Rosedale had places available for those potential residents; and
85.3 causing the residents of Rosedale to be moved out of Rosedale on 11-13 May 2010."
The actions in paragraph 85.1 and 85.2 are alleged to be unlawful because of a conflict with the National Assistance Act 1948 (Choice of Accommodation) Directions 1992 ("the Directions"). The actions relating to the circumstances in which residents ceased to reside at Rosedale are said to be unlawful because:
"87. Those acts to which reference is made in paragraph 85.3 above were unlawful because they were:
87.1 simply ultra vires the Defendant, in that the Defendant had no power to remove or cause to be removed residents from Rosedale, in the absence of a determination by the FTT (which was not stayed) that the registration of the registered proprietor of Rosedale, namely Autumn Days, should be cancelled; and/or
87.2 for an improper purpose, namely to (1) close Rosedale and/or (2) put Autumn Days out of business as a care home operator and/or (3) cause loss to Mr and Mrs Menon."
Furthermore, at paragraph 89 the Claimants allege:
"89. Further or alternatively, the acts of the Defendant's employees and/or agents referred to in paragraph 85.3 above were the product of targeted malice towards Mr and Mrs Menon on the part of one or more, or all, of the following employees and/or agents of the Defendant…."
and specific individuals are named.
The Defendant denies liability. In their amended defence, they assert, amongst other things, that they did not cause any resident to be removed from Rosedale. Rather, the Defendant says that their employees attended the premises at Rosedale, provided information to the residents about what had happened and the residents decided to leave Rosedale and take up residence in other care homes. That appears from paragraph 108 of the amended defence which is in the following terms:
"108. As to paragraph 69:
"(1) The first sentence is denied, save that it is admitted that the Council were made aware that the police planned to arrest Mr and Mrs Menon on 11 May 2010, and did in fact arrest Mrs Menon at that date. As far as the Council is aware, the arrests of Mr and Mrs Menon took place in order to facilitate the investigation by the police of suspected offences of, amongst others, neglect by Mr and Mrs Menon of residents of Rosedale.
"(2) The second sentence is denied. The Council assessed that the needs of the residents of Rosedale would not be met in the event of the Menon's arrests and that there was an immediate safeguarding issue. On 11 May 2010, the Council's employees attended Rosedale and there provided information to residents, and/or their families, namely that:
(a) Mrs Menon had been arrested and was bailed not to return to Rosedale;
(b) Mr Menon was signed off sick;
(c) Rosedale was thus left without a manager; and
(d) Rosedale was rated by the CQC as "zero";
(e) The culmination of risk markers referred to in paragraph 26 above and the Schedule of Failings and Risk Markers at Schedule 1.
"This information was provided in order to enable residents to be aware of the potential risks they faced if they were to remain at Rosedale. No resident chose to stay at Rosedale. In at least one instance, a resident lacked the mental capacity to decide whether to move and the Council, deciding it was in the best interests of that resident to leave Rosedale, arranged for that person to move. In other cases, the residents chose to leave Rosedale and the Council then assisted them with the practicalities of moving. All such acts and decisions by the Council and its employees were done in good faith and for the purpose of safeguarding the immediate health and welfare of the residents of Rosedale.
"Save as aforesaid, paragraph 69 is not admitted."
There is, therefore, a stark dispute of fact as to what happened at Rosedale on 11 May 2010. The Defendants further deny that what their employees did was unlawful but, rather, involved the exercise of express, or implied, statutory powers in the social services field.
For the purposes of dealing with the application for summary judgment, the most immediately relevant provisions are the following. First, section 21 of the National Assistance Act 1948 ("the 1948 Act") provides, so far as material, that:
"Duty of local authorities to provide accommodation.
"(1) Subject to and in accordance with the provisions of this Part of this Act, a local authority may with the approval of the Secretary of State, and to such extent as he may direct shall, make arrangements for providing —
(a) residential accommodation for persons aged eighteen or over who by reason of age, illness, disability or any other circumstances are in need of care and attention which is not otherwise available to them;
…..
"(2) In making any such arrangements a local authority shall have regard to the welfare of all persons for whom accommodation is provided, and in particular to the need for providing accommodation of different descriptions suited to different descriptions."
Paragraph 2 and 3 of the Directions provide:
"2. Where a local authority have assessed a person under section 47 of the National Health Service and Community Care Act 1990 (assessment) and have decided that accommodation should be provided pursuant to section 21 of the National Assistance Act 1948 (provision of residential accommodation), the local authority shall, subject to paragraph 3 of these Directions, make arrangements for accommodation pursuant to section 21 for that person at the place of his choice within the United Kingdom (in these Directions called "preferred accommodation") if he has indicated that he wishes to be accommodated in preferred accommodation.
"3. Subject to paragraph 4 of these Directions the local authority shall only be required to make or continue to make arrangements for a person to be accommodated in his preferred accommodation if –
(a) the preferred accommodation appears to be the authority to be suitable in relation to his needs as assessed by them;
(b) the cost of making arrangements for him at his preferred accommodation would not require the authority to pay more than they would usually expect to pay having regard to his assessed needs;
(c) the preferred accommodation is available;
(d) the persons in charge of the preferred accommodation provide it subject to the authority's usual terms and conditions, having regard to the nature of the accommodation, for providing accommodation for such a person under Part III of the National Assistance Act 1948."
Other statutory provisions may, ultimately, prove relevant including section 47 of the National Health Service and Community Care Act 1990 which provides for local authorities to assess the needs of a person where he or she may be in need of community care services.
THE APPLICATION FOR SUMMARY JUDGMENT
The Claimants are seeking summary judgment on two issues only which form part of the claim. The first concerns the lawfulness of what occurred at Rosedale on 11 to 13 May 2010. The second concerns the lawfulness of any action on the part of the Defendant not to make arrangements for potential residents to be accommodated at Rosedale because of the Defendant's concerns abut the quality of care given to existing residents. The order sought is in the following terms:
"(1) The Defendant had no power to do that which it (acting through its employees and/or other agents) did in relation to the residents of Rosedale Retirement Home, Ross on Wye ("Rosedale") on 11-13 May 2010, as described in paragraph 69 of the Re-Amended Particulars of Claim or (if different) paragraph 108(2) of the Amended Defence.
"(2) the Defendant had no power [covertly] at any material time (i.e. at any time to which the Re-Amended Particulars of Claim relate) to refuse to give effect to the choice of potential residents to be accommodated at Rosedale because the Defendant's officers thought that the quality of the care given to existing residents was not satisfactory."
The Principles
CPR 24.2 provides that:
"The court may give summary judgment against a claimant or defendant on the whole of a claim or on a particular issue if–
(a) it considers that–
(i) that claimant has no real prospect of succeeding on the claim or issue; or
(ii) that defendant has no real prospect of successfully defending the claim or issue; and
(b) there is no other compelling reason why the case or issue should be disposed of at a trial."
The relevant principles governing applications for summary judgment are well-established. For present purposes, it is sufficient to bear in mind two passages from the decision of the House of Lords in Three Rivers District Council v Governors of the Bank of England (No 3) [2003] 2 A.C.1 First, at paragraphs 94 and 95, Lord Hope observed:
"94 For the reasons which I have just given, I think that the question is whether the claim has no real prospect of succeeding at trial and that it has to be answered having regard to the overriding objective of dealing with the case justly. But the point which is of crucial importance lies in the answer to the further question that then needs to be asked, which is—what is to be the scope of that inquiry?
"95 I would approach that further question in this way. The method by which issues of fact are tried in our courts is well settled. After the normal processes of discovery and interrogatories have been completed, the parties are allowed to lead their evidence so that the trial judge can determine where the truth lies in the light of that evidence. To that rule there are some well-recognised exceptions. For example, it may be clear as a matter of law at the outset that even if a party were to succeed in proving all the facts that he offers to prove he will not be entitled to the remedy that he seeks. In that event a trial of the facts would be a waste of time and money, and it is proper that the action should be taken out of court as soon as possible. In other cases it may be possible to say with confidence before trial that the factual basis for the claim is fanciful because it is entirely without substance. It may be clear beyond question that the statement of facts is contradicted by all the documents or other material on which it is based. The simpler the case the easier it is likely to be to take that view and resort to what is properly called summary judgment. But more complex cases are unlikely to be capable of being resolved in that way without conducting a mini-trial on the documents without discovery and without oral evidence. As Lord Woolf said in Swain v Hillman, at p 95, that is not the object of the rule. It is designed to deal with cases that are not fit for trial at all. "
Secondly, at paragraph 158, Lord Hobhouse of Woodborough observed that:
"The important words are "no real prospect of succeeding". It requires the judge to undertake an exercise of judgment. He must decide whether to exercise the power to decide the case without a trial and give a summary judgment. It is a "discretionary" power, i e one where the choice whether to exercise the power lies within the jurisdiction of the judge. Secondly, he must carry out the necessary exercise of assessing the prospects of success of the relevant party. If he concludes that there is "no real prospect", he may decide the case accordingly
…..
"The criterion which the judge has to apply under Part 24 is not one of probability; it is absence of reality."
Further the relevant principles applicable, in cases such as the present where it is sought to obtain summary judgment on an issue, or issues, rather than the entirety of the claim, are set out at paragraphs 27 and 28 of Wragg and others v Partco Group Ltd. and another [2002] Lloyd's Rep. 343:
"27. It seems to me that the following principles are well established, at least as articulated in relation to summary disposal under Part 24 of the CPR. (1) The purpose of resolving issues on a summary basis and at an early stage is to save time and costs and courts are encouraged to consider an issue or issues at an early stage which will either resolve or help to resolve the litigation as an important aspect of active case management: see Kent -v- Griffiths [2001] QB 36 at 51B–C. This is particularly so where a decision will put an end to an action. (2) In deciding whether to exercise powers of summary disposal, the court must have regard to the overriding objective. (3) The court should be slow to deal with single issues in cases where there will need to be a full trial on liability involving evidence and cross examination in any event and/or where summary disposal of the single issue may well delay, because of appeals, the ultimate trial of the action. (4) The court should always consider whether the objective of dealing with cases justly is better served by summary disposal of the particular issue or by letting all matters go to trial so that they can be fully investigated and a properly informed decision reached. The authority for principles (2)–(4) is to be found in: Three Rivers District Council v Bank of England (No.3) [2001] UKHL 16; [2001] 2 All ER 513 per Lord Hope at paras 92–93 (pp.541–542), considering Swain v Hillman [2001] 1 All ER 91 at 94–95; Green v Hancocks [2001] Lloyds Rep. PN212, per Chadwick L.J. at para 53 page 219, Col. 1; and Killick v Price Waterhouse Coopers [2001] Lloyds Rep. PN17per Neuberger J. at p.23 Col.2, 2–27.
"28. (5) Summary disposal will frequently be inappropriate in complex cases. If an application involves prolonged serious argument, the court should, as a rule, decline to proceed to the argument unless it harbours doubt about the soundness of the statement of case and is satisfied that striking out will obviate the necessity for a trial or will substantially reduce the burden of the trial itself: see the Three Rivers case per Lord Hope at 94–98 (pp.542–544), considering the Williams & Humbert case. (6) It is inappropriate to deal with cases at an interim stage where there are issues of fact involved, unless the court is satisfied that all the relevant facts can be identified and clearly established: see Killick v Price Waterhouse at 20, Col.2 and 21 Col.1. (7) It is inappropriate to strike-out a claim in an area of developing jurisprudence. In such areas, decisions should be based upon actual findings of fact: see Farah v British Airways (unreported) 6th December 1999 (CA) per Lord Woolf M.R. at para 35 and per Chadwick L.J. at para 42, applying Barratt v London Borough of Islington [1999] 3 WLR 83and X (Minors) v Bedfordshire CC [1995] 2 AC 633 at 694 and 741"
Realistic Prospect of Successfully Defending the Issue
The first issue concerns the lawfulness of the actions taken by the Defendant's employees at Rosedale on 11 to 13 May 2010. For the reasons given below, the application for summary judgment on this issue should be refused.
First, in my judgment, there is no basis upon which it could be said there is no realistic possibility of the Defending this issue. The Defendant's version of the events are set out in paragraph 108 of the amended defence. That involves the Defendant's employees visiting the premises, informing the residents of certain facts such as the arrest of the Second Claimant and her inability to return to Rosedale because of the conditions upon which she had been granted bail, the fact that the First Claimant was ill and Rosedale had no manger, and other matters. Against that background, no resident choose to stay. Those who had mental capacity decided that they would cease residing at Rosedale and others, who lacked capacity, had the decision taken that it was in their best interests to move elsewhere. Further evidence has been given by Mr Carver in his witness statement.
Given those facts, the Defendant contends that their actions were lawful. They rely upon, amongst other things, section 21 of the 1948 Act and the Directions. The duty is to make arrangements for providing residential accommodation to persons in specified categories who are in need of care and attention. Paragraph 3 of the Directions refer to an authority only being "required to make or continue making arrangements" if the preferred accommodation "appears to the authority to be suitable in relation to his needs". It cannot be said, in my judgment, that there is no realistic possibility of the Defendant defending the claim. In particular, the reference to "continue making" arrangements and the fact that the accommodation must be "suitable", opens the prospect of the Defendant contending that it is able to keep the arrangements under review and is able to make new arrangements for placement at different residential care homes if that is what residents want (or in the case of persons lacking capacity, if a person with authority to take decisions decides that it is in their best interests for that to happen).
For completeness, I note that the Claimants' version of events in paragraph 69 of the re-amended particulars of claim is different. That alleges that employees of the Defendant took charge of the staff and residents and took over the conduct of Rosedale. It is alleged that they told residents and others that residents had to be placed at a home other than Rosedale and the sole focus of those employees was alleged to be "the forced removal of residents". It is not possible to resolve the factual disputes that arise on this application for summary judgment. That will require the giving of evidence, including oral evidence and cross-examination.
Mr Hyams, on behalf of the Claimants, however, invites the court to grant summary judgment, on the assumption that the facts are as alleged in paragraph 108, as there would still be no realistic prospect of the Defendant establishing that the actions of its employees were lawful. He submitted that, once the Defendant has made arrangements for a resident to be placed at a home under section 21 of the 1948 Act, and until the Commission obtains an order under section 20 of the 2000 Act cancelling the relevant registrations necessary to carry on or manage the home, the Defendant has no power to enter the home, or to provide information about, or advise on, possible moves from the home to an alternative home. As it was put in submission, there is no statutory route by which the Defendant could intervene to advise or effect a change of residence of an individual unless requested by that individual or by a person with authority to act where the resident lacks capacity to make such a request. In my judgment, for the reasons given above, it cannot be said that there is no realistic prospect of the Defendant establishing that it had power to do what it says its employees did by reference to its powers, amongst others, under section 21 of the 1948 Act.
The second issue concerns the decision to refuse to give effect to the choice of potential residents. Paragraph 2 of the Directions provide that, subject to paragraph 3 of the Directions, a person must be accommodated at the place of his choice (referred to as the "preferred accommodation" if he has indicated that he wishes to be accommodated in preferred accommodation. It is not clear on the facts whether or not the Defendant refused to accommodate any person who had indicated a wish to be accommodated at Rosedale. The Claimant contends that it would be unlawful for the Defendant to refuse to make arrangements placing a person in Rosedale because the Defendant was not satisfied about the quality of care in circumstances where relevant registrations are in place and the Commission has not sought to cancel a registration under section 14 or 20 of the 2000 Act. The Defendant contends that it is entitled, in appropriate circumstances, to decline to place a person in a residential home if it has concerns over the quality of care being provided and it did not appear to them to be suitable to a person's needs. In my judgment, it cannot be said that there is no realistic prospect of the Defendant being able to defend the issue.
I note that the Defendant asserts that there are other statutory powers, or possibly common law powers, that enable their employees to act in the way that the Defendant asserts they did. Given that there is no realistic prospect of the Defendant not being able to defend the two issues on the basis described above, so that summary judgment is on any analysis inappropriate, it is not necessary to consider those other bases. They, too, are matters that can be explored at the full trial should that be necessary.
Summary Judgment on the Issues Inappropriate in this Case
Furthermore, the giving of summary judgment would be inappropriate and inconsistent with the principles identified in Wragg. As Potter L.J. observed, the purpose of resolving issues on a summary basis and at an early stage is to save time and cost. Conversely, the courts should be slow to deal with single issues in cases where there will need to be a full trial on liability involving evidence and cross-examination in any event.
In this case, the Claimants are seeking summary judgment on one aspect of one part of the elements of the tort of misfeasance in a public office. They seek to establish that what the Defendant's employees did at Rosedale on 11 to 13 May 2010 was unlawful, and a decision not to make arrangements to place persons in Rosedale was unlawful. On any analysis, there will still need to be a trial of whether the employees acted either in "wilful disregard of the risk" that the acts were unlawful or "without an honest belief in the legality of those acts": see paragraph 85 of the re-amended particulars of claim set out above. Oral evidence, and cross-examination, of witnesses on those issues will still be inevitable.
Furthermore, it is clear that there is a fundamental difference between the Claimants and the Defendant as to what the Defendant's employees did do on 11 to 13 May 2010. That is the difference between paragraph 69 of the re-amended particulars of claim and paragraph 108 of the amended defence. Although counsel for the Claimants invited the court to proceed for the purposes of the application for summary judgment on the basis that the version in paragraph 108 of the amended defence was correct, it is clear that the Claimants are still contending that their version of events is correct. The court, at trial, will still be asked to decide whether the actions of the Defendant's employees on 11 to 13 May 2010 were carried out for an improper purpose, namely to close Rosedale, put the Third Claimant out of business or cause loss to the First and Second Claimants: see paragraph 87.2 of the re-amended particulars of claim set out above. The Claimants are also still contending that the actions of the employees on those days in May "were the product of targeted malice" towards the First and Claimants: see paragraph 89 of the re-amended particulars of claim set out above.
In the circumstances, therefore, the Claimant is inviting the court to give a ruling on one issue of law, based on assumed facts. There will, however, inevitably have to be a full trial of liability, involving evidence and cross-examination of witnesses, to establish the true facts, and the court will then have to consider whether, given the facts as found, liability is established. In reality, therefore, the summary judgment sought will not save time and costs. It is not appropriate to give summary judgment on certain issues (still less so on assumed, but contested, facts) when those issues, and other issues, will all need to the subject of evidence at the full trial. For that second, separate reason, the application for summary judgment made in this case is not one that the court should grant.
THE APPLICATION FOR DISCLOSURE
The second application seeks the order for the disclosure of documents containing legal advice about the events at Rosedale on 11 to 13 May 2010. The application also seeks an order allowing the Claimants to use and rely upon documents containing legal advice which are already in the Claimants' possession. The terms of the order sought are as follows:
"(1) the Defendant disclose all documents showing and/or relating to the legal advice given to the Defendant about the legality of what its employees/agents did in relation to Rosedale on 1-13 May 2010, and
(2) the Claimants may make use of and rely on any such documents already in their possession."
The First Part of the Order Sought
The first part of the order sought requires disclosure of all documents showing or relating to the legal advice given to the Defendant about the legality of what its employees or agents did at Rosedale on 11 to 15 May 2010. The application is put on two bases. First, it is said that the documents were not created by or given to the persons who had authority to seek legal advice. Secondly, the Claimants contend that an exception to legal professional privilege should be made on public policy grounds where the claim is for misfeasance in a public office and the legal advice relates to the actions of the public officers in question.
This application concerns the privilege attaching to legal advice arising out of the confidential relationship of a lawyer and his client. Confidential communications passing between the client and the lawyer for the purpose of obtaining and giving legal advice fall within the scope of legal professional privilege. Legal professional privilege has been described as a "fundamental human right long established in common law" (per Lord Hoffman in R (Morgan Grenfell Ltd.) v Special Commissioner for Income Tax [2003] 1 AC 563 at paragraph 7 of the judgment.
The question of who is the client for these purposes arose in Three Rivers District Council v Bank of England (No. 5) [2003] QB 1556. That case concerned communications in the context of an inquiry being held by Bingham L.J. (as he then was) into the supervision by the Bank of England of a particular bank, BCCI. The Bank of England appointed three Bank officials (referred to as the Bingham Inquiry Unit or "BIU") to deal with all communications between the Bank and their solicitors. It was accepted that BIU was the client of the solicitors and that communications passing between the three officials forming the BIU and the solicitors were covered by legal advice privilege. The Court of Appeal held that documents prepared by the employees of the Bank in the particular circumstances of this case did not fall within the scope of legal advice privilege as they were not the clients of the solicitors for these purposes: see paragraphs 4, 30 to 31 of the judgment.
Mr Hyams relies upon that decision. He submits that legal advice privilege only applies to confidential communications between persons who are personally charged by the Defendant local authority with the decision-making power in question and the Defendant's lawyers.
In the present case, the factual situation is as follows. The evidence of Ms Samantha Smith, who is a legal executive employed by the Defendant, is that:
"17. I can confirm that the Defendant Local Authority has an in-house legal department providing legal advice to all officers and staff working for and on behalf of it, on all matters as and when necessary, pursuant to the work they are carrying for and on behalf of the Defendant. All officers and staff are entitled to use its services".
In other words, the employees in the present case were authorised to obtain legal advice from the Defendant's in house lawyers in connection with the discharge by them in the course of their work of functions on behalf of the Defendant. In those circumstances, the employees in question were clients for the purposes of legal advice privilege. Confidential communications between the employees and the Defendant's lawyers for the purposes of obtaining and giving legal advice in connection with the discharge of those functions were, therefore, covered by legal professional privilege.
In relation to the second ground of this part of the application. Mr Hyams submits that an exception to the scope of legal professional privilege should be made on grounds of public policy reasons. The submission is that, in cases involving misfeasance in a public office, one category of documents, that is documents seeking or giving legal advice to an individual about what he or she could or not do in relation to the matters that are subject to the claim for misfeasance should be disclosed. Mr Hyams gave a number of examples, or reasons, why it might be considered desirable in the context of such claims to for there to be disclosure of this category of legal advice.
In my judgment, where documents properly fall within the scope of legal professional privilege, there is no basis for exempting a class of documents from the scope of that protection. That is apparent from the judgment of Lord Scott, with whom Lord Rodger, Baroness Hale and Lord Brown agreed, in Three Rivers District Council v Governor and Company of the Bank of England (No. 6) [2005] 1 AC 610, itself a case involving a claim for misfeasance in a public office. At paragraph 25, Lord Scott said:
"if a communication qualifies for legal professional privilege, the privilege is absolute. It cannot be overridden by some supposedly greater public interest. It can be waived by the person, the client, entitled to it and it can be overridden by statute (cf R (Morgan Grenfell & Co. Ltd.) v Special Comr of Income Tax [2003] 1 AC 563), but it is otherwise absolute. There is no balancing exercise that has to be carried out: see B v Auckland District Law Society [2003] 2 AC 736 , 756-759, paras 46-54).
For those reasons, the application for disclosure of documents showing or relating to legal advice given to the Defendant about the legality of what its employees or agents did in relation to Rosedale on 11 to 13 May 2010 is dismissed.
The Second Part of the Order Sought
By the second part of the order sought, the Claimants seek an order permitting them to use and rely on documents containing legal advice relating to the legality of what its employees did at Rosedale on 11 to 13 May 2010. The documents referred to are documents provided pursuant to an order made by the First-tier Tribunal (Health, Education and Social Care Chamber) in proceedings between the Third Claimant and the Commission. The Defendant in these proceedings was not a party in those proceedings in the First-tier Tribunal. The basis for the application is said to be CPR 31.20 or CPR 31.22.
The background to the application is as follows. There were proceedings in the First-tier Tribunal. The Third Claimant applied for an order against Dr Williams, the Head of Adult Social Care at Herefordshire Council, requiring him "to disclose within these proceedings" (that is the proceedings between the Third Claimant and the Commission) certain documents pursuant to rule 16(1)(b) of the First-tier Tribunal (Health, Education and Social Care Chamber) Rules 2008 ("the Rules"). That rule provides that the First-tier Tribunal may:
"(b) order any person to answer any questions or to produce documents in that person's possession or control which relate to any issue in the proceedings".
The First-tier Tribunal order states that, having considered rule 16(1)(b) of the Rules it would "grant the order sought" that is, the order for disclosure within the First-tier Tribunal proceedings, and ordered the Defendant to send the documents to named solicitors. There was provision for redaction of documents which were legally professional privileged. It appears that, at least in relation to two documents, the Defendant did not in fact redact legal advice which was subject to legal professional privilege.
The documents produced pursuant to the First-tier Tribunal order for use in those proceedings were, in fact, also used by the Claimants for the purpose of bringing their claim in the present High Court proceedings against the Defendant. That included using the two documents containing legal advice. Indeed, the Claimants actually reproduced at least part of the legal advice referred to in those documents in paragraphs 57 and 78 of their re-amended Particulars of Claim.
There is no doubt that that is what the Claimants' legal representatives did. Mr Joel Leigh, the Claimants' solicitor made a witness statement on 5 June 2015, in support of the application relating to the disclosure and use of documents containing legal advice. In paragraph 1, he explains that the Claimants were applying for an order, amongst other things, that:
"pursuant to CPR Rule 31.20 or Rule 31.22, the Claimants may make use of and rely on any such documents in their possession"
At paragraph 11, Mr Leigh says this:
"As to the Defendant's argument that the documents had been mistakenly disclosed to our client, I should clarify that this disclosure was provided in November 2011 during First Tier Tribunal proceedings, i.e. before the current proceedings were issued. A copy of the letter from Geoff Hardy, a solicitor employed by the Defendant, dated 10 November 2011 which enclosed the documents disclosed is attached at page 74 and a copy of the Order of Judge Hillier dated 20 October 2011 referred to therein at pages 75-78. I was not at that time acting for the Claimants although Oliver Hyams of Counsel was. I am informed by him that whilst some documents disclosed at that time had been redacted, others, including those to which specific reference has been made in the Amended Particulars of Claim, were disclosed unredacted. There was no reason to suspect that any of the documents had been disclosed by mistake and indeed Mr Hyams has confirmed to me that he believed the documents to have been disclosed deliberately."
It is difficult to understand on what basis the Claimant's legal representatives could have considered it appropriate to use documents, including legal advice, provided pursuant to a production order made in one set of proceedings (to which the Defendant was not a party) in another set of proceedings against the Defendant without the agreement of the Defendant. The basis of the application to use and rely upon documents in their possession appears to take no account of the fact that the documents were produced for use in the First-tier Tribunal proceedings and not for use in other proceedings. Further, no consideration appears to have been given by the Claimants' legal representatives as to whether use of the documents provided for the First-tier Tribunal proceedings breached any express or implied obligation not to use the documents for other purposes and if so, what the consequences of such a breach would be. In fairness, when this matter was drawn to the attention of counsel for the Claimants, it was explained that what had happened was an oversight although counsel contends that the Claimants should still be given permission to use and rely upon the documents.
The proper analysis of the position, in my judgment, is as follows. First, the documents were provided pursuant to an order made by the First-tier Tribunal for use within the First-tier Tribunal proceedings. That was the order sought. That was the order made. The Claimants, as a minimum, are seeking to use and rely upon documents provided pursuant to an order for the production of documents made in other proceedings. The Defendant was not a party to those other proceedings. The documents were not provided by the Defendant as part of the process of disclosure and inspection of documents within the present High Court proceedings.
Secondly, even in the absence of an express restriction in the order for production, there would, on the authorities and as a matter of principle, have been an implied obligation on a party receiving them, or an implied undertaking would be treated as being given, that the documents produced pursuant to that order would not use them for any collateral purpose, including other litigation, without the leave of the court or the express consent of the party disclosing or producing the document.
At common law, an implied undertaking was imposed in relation to documents disclosed in court proceedings (see, e.g., Riddick v Thames Board Mills [1977] Q.B. 881 and the cases discussed in Matthews and Malek "Disclosure" 4th ed. at paragraph 19.01). The obligation is owed by the parties and their solicitors (see Matthews and Malek "Disclosure" 4th ed. at paragraph 19.09). Breach of an implied undertaking was a contempt and the use of documents in breach of the implied undertaking could be restrained by the grant of an injunction. The position was modified in relation to documents read to or by the court or referred to a hearing which has been made public following the decision of the European Court of Human Rights. The position in relation to court proceedings is now regulated by CPR 31.22 (see SmithKline Beecham plc v Generics (UK) Ltd.) [2004] 1 WLR 1479)
In my judgment, as a matter of principle, either a similar implied undertaking is to be treated as given in proceedings in other tribunals where documents can be required to be disclosed or produced, or the statutory provisions governing the making of orders for disclosure or production of documents will be read as imposing such an obligation. That is consistent with existing authority. In McBride v The Body Shop International plc [2007] EWHC 1658, the High Court held that a document disclosed in the course of proceedings before an employment tribunal could not be used in other proceedings (there, libel proceedings brought in the High Court).
Furthermore, that position is consistent with the fact that documentation is being obtained by means of compulsory powers for particular purposes. That involves an infringement of the rights of others to maintain privacy in relation to their documents. In the present case, the order for production was made in relation to a person who was not party to the proceedings in the First-tier Tribunal. It is not to be expected that where copies of documents belonging to one person are produced, pursuant to a production order for use in particular proceedings, that persons who obtain the documents are then able to use them for other purposes. That is the logic underlying the implied undertaking which was imposed at common law in relation to the courts and the same logic applies to legal proceedings before other tribunals. The need for a restriction on the use of documents obtained under compulsory powers for use in one set of proceedings is also consistent with the wider principle, recognised in Marcel v Metropolitan Police Commissioner [1992] Ch. 225 at page 237 that:
"private information obtained under compulsory powers cannot be used for purposes other than those for which the powers were conferred".
In submissions made after the hearing, Mr Hyams submitted that the position in the present case was governed now by CPR 31.22 and that that rule had superseded the common law so that there was no implied undertaking. I doubt that that is correct in relation to the proceedings before the First-tier Tribunal at issue in the present case. First, the Civil Procedure Rules apply to proceedings in the County Court, the High Court and the Civil Division of the Court of Appeal (see CPR 2.1). They do not apply to proceedings before tribunals. The provisions of the CPR could not impose an obligation in relation to documents produced in proceedings before tribunals. Secondly, CPR 31.22 applies to a party to whom documents have been disclosed. That is referring to disclosure in accordance with the provisions of the CPR not other types of disclosure. It is not apt on its terms, in any event, to describe the production of documents by a non-party pursuant to a statutory provision such as rule 16(1)(b) of the Rules. In any event, if Mr Hyams is correct and CPR 31.22 did apply to the proceedings before the First-tier Tribunal, then that rule would itself impose a restriction on the use of documents disclosed in the proceedings. The documents could only be used with the permission of the court or the agreement of the party who disclosed the document and the person to whom the document belongs or in the circumstances referred to in CPR 31.22(a). If the express restriction applies, it makes it even harder to understand how the Claimants' legal representatives could consider it appropriate to use the documents without the permission of the court or agreement of the relevant persons.
For those reasons, any restriction on the use of documents disclosed by parties during proceedings before a tribunal, or produced by a non-party pursuant to an order of such a tribunal is to be found either by reason of an obligation arising from the statutory provisions in issue or an implied undertaking is to be treated as given that documents disclosed or produced in those proceedings cannot be used for other purposes. I am conscious that the issue and, in particular, the question of the appropriate method of enforcement of any such obligation or any implied undertaking in relation to tribunals was not fully argued before me. I do not, therefore base my decision on any breach of any implied undertaking in the present case, nor is it necessary do so as the First-tier Tribunal expressly ordered that production of documents was for use in the proceedings before it.
It is against that background that the application for permission to use and rely upon the documents disclosing legal advice needs to be assessed. The first ground upon which the application is made is CPR 31.20. That provides as follows:
"Restriction on use of a privileged document inspection of which has been inadvertently allowed.
31.20 Where a party inadvertently allows a privileged document to be inspected, the party who has inspected the document may use it or its contends only with the permission of the court"
In my judgment, reliance on this provision of the CPR is misconceived. The rule addresses the situation where there has been disclosure and inspection of documents in the course of the proceedings. If, during that process, documents are inadvertently allowed to be inspected, then permission is required to use the document. In those circumstances, the principles identified in Al Fayed v Commission of Police of the Metropolis [2002] EWCA Civ 780 and Rawlinson & Hunter Trustees SA (as Trustee of the Tchenguiz Family Trust) v Director of the Serious Fraud Office (No. 2) [2015] 1 WLR 797 are relevant. The present case does not involve a situation where the Defendant has, in the course of disclosure in these proceedings, inadvertently allowed the Claimants to inspect documents containing legal privilege. The Claimants are seeking to use documents produced by a non-party pursuant to an order for production made in other proceedings before the First-tier Tribunal. The Defendant was not a party to those proceedings. Documents were not inspected during those proceedings as part of the disclosure requirements. Rather, the documents were produced pursuant to an order made under the Rules. Consequently, CPR 31.20 does not apply to the situation.
The second basis for the application is CPR 31.22. That provides that:
"(1) A party to whom a document has been disclosed may use the document only for the purpose of the proceedings in which it is disclosed, except where–
(a) the document has been read to or by the court, of referred to, at a hearing which has been held in public;
(b) the court gives permission; or
(c) the party who disclosed the document and the person to whom the document belongs agree."
The rule appears to have been applied by Eady J. in McBride v The International Body Shop plc [2007] EWHC 1658 (QB) where documents had been disclosed by a party to proceedings in the employment tribunal. There may be an issue, strictly, as to the applicability of that rule to the present case, given that the rule applies to a party to whom a document has been disclosed where, in this case, the situation involves an order requiring production of a document by a non-party to proceedings. It is not clear that CPR 31.22 was intended to apply to, and permit use of, documents produced by a non-party to proceedings in compliance with an order for production. The possibility of there being some inherent jurisdiction, exercisable by reference to similar principles, was not canvassed before me. It cannot necessarily be assumed that the court has jurisdiction to permit the use of documents produced by non-parties pursuant to the exercise of coercive or compulsory powers. That issue would need to be fully argued. For present purposes, however, I assume, without deciding, that either CPR 31.22 applies or there is some form of inherent jurisdiction which would permit permission to be granted.
In my judgment, it would not be appropriate to grant permission to the Claimants to use documents containing legal advice which were produced for the purposes of other proceedings. I reach that conclusion for the following reasons. First, the documents were obtained by compulsion. Secondly, they were obtained in circumstances where they were only to be used for the proceedings in the First-tier Tribunal. Thirdly, they contain legal advice and, as indicated above, there is a very high value placed upon parties being able to protect legally professionally privileged documents. Fourthly, the Claimants are seeking to take advantage of an error on the part of the Defendant in complying with the production order of the First-tier Tribunal without, it seems, realising that these documents contained legal advice. It is not appropriate, in my judgment, to grant permission to the Claimants in these circumstances to use and rely upon the documents in these proceedings which are in their possession as a result of the production order made by the First-tier Tribunal in other proceedings.
The Claimants now suggest that it should be inferred that the Defendant has consented to the use of documents. The basis for that contention is that the Claimants' solicitor referred in a letter dated 1 May 2013, headed private and confidential, to some of the documents, including at least one of the documents containing legal advice, enclosing a copy. That letter discussed, amongst other things a possible claim against the Defendant by the Claimants. It is said that as the Defendant did not object to the use of those documents in the High Court proceedings they must be taken to have consented to their use. First, the Defendants do not, in fact, consent to the use of the documentation containing legal advice in these proceedings. They have sought to resist inspection of the documents during disclosure in these proceedings. Secondly, the correct position is that the Claimants should not have used the documents obtained in the First-tier Tribunal in these proceedings without, as a minimum, having first obtained the permission of the court or the agreement of the Defendant.
I doubt that any concept of implied consent can justify the use of the documents (as opposed to seeking the agreement of the person whose documents they are, as contemplated by CPR 31.22(1)(c)). Furthermore, and separately, I do not consider that, on the facts, there is sufficient evidence of implied consent. The Claimants used the documents to write to the Defendant about a possible claim without, it appears, seeking the Defendant's consent to the use of the documents and in breach of the First-tier Tribunal order. The fact that it is said that the Defendant did then not object to the use of the documents does not, in my judgment, amount to sufficient evidence of agreement to the use of the documents, including those containing legal advice, in these proceedings for the purpose of CPR 31.22(1)(c). For those reasons, permission to use or rely upon documents containing legal advice already in the possession of the Claimants following their production by the Defendant in the First-tier Tribunal proceedings is refused.
For completeness, I note that the Claimants here do not base their application on any claim that the documents were read out or referred to at a tribunal hearing held in public, nor was that suggested in submission. There is no evidence that that occurred. Different considerations may apply in considering any statutory restriction on the use of documents, the scope of any implied undertaking and the jurisdiction of the court to permit reliance on documents where documents ordered to be produced have been read out or referred to at a hearing of the tribunal held in public.
Two further points arise. The application that has been made only seeks documents containing legal advice. There was a suggestion that one or more of the documents obtained under the production order made by the First-tier Tribunal was relevant in these proceedings, and did not contain legal advice. There is no application before this court in relation to documents on the basis that certain documents said to contain legal advice do not in fact do so. The only application relates to documents said to contain legal advice. If the Claimants consider that the Defendant, having disclosed the existence of documents, have wrongly claimed legal professional privilege in respect of certain documents and wrongly refused inspection, then the matter should be dealt with by way of an application pursuant to CPR 31.19. Secondly, the courts have jurisdiction to grant an injunction restraining the use or requiring the return of confidential information, including legally privileged documents, see, for example, Goddard v Nationwide Building Society [1987] Q.B. 670 and ISTIL Group Inc v Zahoor [2003] 2 All ER 252. There is no application at present by the Defendants for such an injunction.
CONCLUSION
For those reasons, the application for summary judgment is refused. The application for disclosure of documents containing legal advice relating to the legality of what the Defendant's employees did at Rosewood on 11 to 13 May 2010 and permitting the Claimants to use or rely upon any such documents in their possession is refused.
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Mr Justice Hamblen :
Introduction
The Claimants ("NMC" and "the Trust") bring these proceedings under Part 8 for a Civil Restraint Order ("CRO") against the Defendant, Mrs Harrold.
An interim CRO was made by Blair J on 23 January 2015. The Claimants now seek a final CRO on the trial of their Part 8 claims.
Mrs Harrold contends that the High Court has no power to make the CRO sought and, if it does, it should not do so.
This threshold issue involves detailed arguments of law. It was apparent that these would be likely to take up most of the one day set aside for the trial and it was accordingly resolved to deal with that issue and to adjourn all other matters, should they arise. These include the Claimants' objections to the Defendant's participation in the proceedings brought by the Trust and to the late service of evidence.
Background
The Trust is responsible for delivering Healthcare in Bristol and South Gloucestershire. Mrs Harrold was employed by the Trust as a nurse between 9 September 2001 and 20 December 2005, when her employment was terminated on the grounds that she refused to return to work and had declined all proposals of alternative employment made to her.
The NMC is the public body responsible for the regulation of nurses in England. Mrs Harrold was struck off by the NMC on 22 October 2009 on the grounds that her conduct was found to be "fundamentally incompatible with being on the register".
Mrs Harrold has brought a series of claims against the Trust and the NMC relating to these decisions, the timing of the decision by the Trust to refer Mrs Harrold to the NMC, the information provided to the NMC when it did so and to alleged victimisation. Most of these claims have been brought before the Employment Tribunal ("ET"), although there have also been claims made in the County Court. Save for two recent claims, which have been stayed pending the outcome of the Part 8 claim, all of Mrs Harrold's claims against the NMC have been dismissed and all bar one of her claims against the Trust have likewise been dismissed.
The Claimants contend that Mrs Harrold has made many hopeless claims and hopeless applications within those claims, a number of which involve seeking to raise under a different guise claims which have already been dismissed. They contend that absent intervention from the court she will continue to pursue this litigation, vexing and harassing publicly funded bodies, and their lawyers. They submit that the High Court's general jurisdiction to make a CRO is clearly engaged but the CRO which they seek is not limited to proceedings in the High Court and the County Court, but also extends to proceedings before the ET. It is this aspect of the CRO which raises jurisdictional issues since Mrs Harrold contends that the High Court has no power so to order.
The CRO regime
Since 1 October 2004 (by virtue of the insertion of Rule 3.11 into Part 3 of the CPR) the civil courts have had power to make CROs under the CPR. CPR Rule 3.11 provides:
"Rule 3.11 Power of the court to make civil restraint orders
3.11
A practice direction may set out—
(a) the circumstances in which the court has the power to make a civil restraint order against a party to proceedings;
(b) the procedure where a party applies for a civil restraint order against another party; and
(c) the consequences of the court making a civil restraint order."
The principles applicable, and practice to be employed, are set out in Practice Direction C to CPR Part 3 ("the PD"). There are three levels of CRO:-
(i) a limited CRO restrains the party against whom the order is made from making any further applications in the proceedings in which the order is made without first obtaining the permission of the judge identified in the CRO (para 2.2(1) of the PD). It is a pre-condition for making a limited CRO that the party in question should have made two or more applications which are "totally without merit" (para 2.1 of the PD );
(ii) an extended CRO restrains the party in question from issuing claims or making applications in the High Court or any County Court (if the order has been made by a judge of the High Court) where those claims or applications concern any matter involving or relating to or touching upon or leading to the proceedings in which the order is made without first obtaining the permission of the judge identified in the CRO (para 3.2(1) of the PD). The pre-condition for the making of an extended CRO is that the party in question has "persistently issued claims or made applications which are totally without merit" (para 3.1 of the PD);
(iii) a general CRO restrains the party in question from issuing any claim or making any application in the High Court or any County Court (if the order has been made by a judge of the High Court) without first obtaining the permission of the judge identified in the CRO (para 4.2(1) of the PD). The pre-condition for the making of a general CRO is that the party restrained should have persisted in issuing claims, or making applications, which were "totally without merit" in circumstances where an extended CRO would not be sufficient or appropriate (para 4.1 of the PD ).
The CRO regime puts on a statutory basis the powers of the High Court, under its inherent jurisdiction, to prevent abuse of its process. The High Court's powers under its inherent jurisdiction was identified, and explained, by the Court of Appeal in Bhamjee v Forsdick [2004] 1 WLR 88. Thus the limited CRO is the statutory reflection of what was known as a Grepe v Loam order (Grepe v Loam (1887) 37 Ch D 168). The extended CRO is the statutory reflection of the extended Grepe v Loam order which the Court of Appeal identified in Ebert v Venvil [2000] Ch 484. The general CRO reflects what was set out in Attorney General v Ebert [2002] 2 All ER 789 at [35].
It is clearly desirable that the High Court should have the power to make CROs. They prevent vexation and oppression. They also prevent the unmeritorious waste of court resources. The importance, as a matter of justice, of ensuring that court resources are used appropriately also applies to tribunal proceedings – see Harris v Academies Enterprise Trust (EAT) [2015] ICR 627 at [33] per Langstaff J.
It is to be noted that under the CPR the High Court can only make a CRO in relation to the issue of claims or applications in the High Court and the County Court. This is a reflection of the fact that the CPR only governs procedure in the Civil Division of the Court of Appeal, the High Court and the County Court – see section 1(1) of the Civil Procedure Act 1997. As the Claimants accept, tribunals are outside the scope of the CPR since "court" in CPR 3.11 does not include a tribunal – see section 9(1) and Law Society of England and Wales v Otobo [2011] EWHC 2264 (Ch) at [17].
The ET is, however, generally regarded as being an inferior court. Thus such tribunals have been treated as an "inferior court" for the purposes of s. 42 of the Senior Courts Act 1983 and for the purposes of making committal orders under RSC Order 52– see Otobo at [33].
The jurisdictional issue
This was an issue considered with care by Proudman J in the Otobo case and, whilst that decision is not binding upon me, I consider its reasoning and conclusion to be highly persuasive. I recognise, however, that Mr Otobo was not represented in that case and that many of the arguments raised by Mrs Harrold before me were not considered.
Proudman J identified four principles of particular relevance, which she derived from Sir Jack Jacob's article in [1970] Current Legal Problems 23: "The Inherent Jurisdiction of the Court", namely:
(1) "As a matter of principle the general jurisdiction of the High Court is unlimited save insofar as it has been taken away by statute".
(2) "The inherent jurisdiction derives historically from coercion, that is to say punishment for contempt of court and of its process, and regulation, that is to say regulating the practice of the court and preventing abuse of its process".
(3) "Under its inherent jurisdiction the High Court has the power, not to review the decisions of inferior courts, but (1) to prevent interference with the due course of justice in those courts and (2) to assist them so that they may administer justice fully and effectively".
(4) "The powers of the court under the inherent jurisdiction are complementary to its powers under the Rules and are not replaced by them".
Proudman J noted that pursuant to its inherent jurisdiction the High Court had or had had jurisdiction to punish contempts in an inferior court – R v Parke [1903] 2 KB 432 - and to restrain a party from continuing foreign proceedings over which it had no direct jurisdiction so as to protect the other party in proceedings, including proceedings in the ET – Turner v Grovit [1999] IRLR 638 (CA). She considered that it was consistent with these examples of the High Court's inherent jurisdiction and the four principles she had identified for the High Court to have the power to make a CRO relating to proceedings in an inferior court, such as the ET, in circumstances where that court had no jurisdiction to do so of its own.
Mrs Harrold's counsel, Ms Darwin, criticised Proudman J's reliance on Sir Jack Jacob's article and contended that it was out of date. However, subsequent developments in the law do not undermine the value of his historical survey of the High Court's inherent jurisdiction. In Ebert v Venvil [2000] Ch 484 at 496G-H, the Court of Appeal referred to and relied upon the article which it found to be of "considerable assistance". More recently, in Al Rawi v Security Service [2012], Lord Dyson at [18] quoted from the article with approval and described it as "seminal".
Of particular relevance to the issue raised in the present case is Sir Jack Jacob's analysis of the High Court's "Control over Powers of Inferior Courts and Tribunals" at p48-9 where he states as follows:
"The control and superintendence of the High Court over inferior courts stems, at any rate in part, from the jurisdiction of the Court of King's Bench in matters of contempt of court. Under its inherent jurisdiction, the High Court has power by summary process to prevent any person from interfering with the due courts of justice in any inferior court and to punish any such misconduct as a contempt of court, i.e., of the High Court . The basis for the exercise of this jurisdiction is that the inferior courts have not the power to protect themselves.
But the High court also has power under its inherent jurisdiction to render assistance to inferior courts to enable them to administer justice fully and effectively, e.g., by the issue of a sub-poena to attend and give evidence, and to exercise general superintendence over the proceedings of inferior courts, e.g., to admit to bail..."
There is clearly a need for inferior courts to be protected from vexatious proceedings, just as there is for the High Court to be so protected, as reflected in the development of CROs and explained by the Court of Appeal in Bhamjee v Forsdick. As is common ground, an inferior court, such as the ET, has no power itself to make a CRO or equivalent order. It is entirely consistent with the High Court's jurisdiction in matters of contempt for it to be able to make orders to protect the inferior courts in such circumstances. It can be regarded as another example of the High Court's power "to prevent any person from interfering with the due course of justice in any inferior court".
That the High Court's supervisory jurisdiction in relation to inferior courts extends to the grant of CROs is supported by the decision of the Court of Appeal in Ebert v Venvil. One of the issues in that case was whether the High Court has power to make a CRO not merely in relation to proceedings in the High Court but also in relation to proceedings in the County Court. It was held that it did. As Lord Woolf MR stated at p498B-D:
"The High Court has traditionally exercised a supervisory jurisdiction in relation to the county court and although that jurisdiction is normally exercised over the county court by means of judicial review this does not mean that it is the only way the jurisdiction can be exercised. It could for example properly be exercised by the granting of an injunction or by the sort of orders made by Neuberger J. If authority was needed for this it is provided by In re Connolly Brothers Ltd. [1911] 1 Ch 731 . In that case the proceedings which were restrained were in the Lancaster Palatine Court and not a county court. In addition the proceedings had already been commenced when they were restrained. Furthermore the injunction would be enforceable against the individual and not the court. None the less these distinctions do not alter the principle involved. The county court will give effect to the High Court order in the same way as it would give effect to an order made by a county court judge. We still have a High Court and county courts with separate but overlapping jurisdictions. However both courts are part of the same civil justice system."
Whilst the ET and similar tribunals are not part of the civil justice system in the same way as a County Court, as inferior courts they are still part of that system and of an inter-related jurisdiction.
It is also to be noted that there are a number of cases in which the court has assumed that it had a power to make a CRO or like order in relation to tribunal proceedings – see, for example, Cavannah v Borough of Blackburn (Court of Appeal, 23 November 2000, unreported) at [10]; Enfield London Borough Council v Sivanandan [2006] EWCA Civ 888 at [5]; Daniels v British Broadcasting Corporation [2010] EWHC 3057 (QB); Chorion plc and others v Lane (unreported, 24 February 1999).
The main arguments raised on behalf of Mrs Harrold as to why the High Court has no such power or jurisdiction were as follows:
(1) The High Court's supervisory jurisdiction over inferior courts and tribunals is statutory and there is no statutory power to make a CRO relating to proceedings in the ET.
(2) There are limits to the High Court's inherent jurisdiction and the modern approach is to the exercise of such jurisdiction is a circumspect one.
(3) The High Court's inherent jurisdiction cannot be used in a way which is contrary to or inconsistent with the CPR.
As to (1), particular reliance was placed upon Bremer Vulkan Schiffbau und Machinenfabrik v South India Shipping Corp Ltd [1981] AC 909 and Lord Diplock's statement at p977 that:
'The supervisory jurisdiction that the High Court exercises over the way in which inferior courts and tribunals conduct their proceedings….is not inherent in its character as a court of justice; it is statutory."
The Bremer Vulkan case was concerned with whether the High Court has a supervisory jurisdiction over arbitration proceedings analogous to that which it has over inferior courts or tribunals. It was held that it did not and the differences between bodies upon which statutory powers and duties have been conferred and consensual arbitration proceedings were emphasised. The decision affirms, however, that there is such a supervisory jurisdiction over inferior courts and tribunals. In relation to the passage cited above, Lord Diplock made it clear that the statutory basis established by the Supreme Court of Judicature Act 1873 included such jurisdiction as had been exercised by the Court of Queen's Bench up to that time. Sir Jack Jacob's article explains that the Court's inherent jurisdiction, including its supervisory jurisdiction over inferior courts or tribunals relating to matters of contempt, dates "from the earliest of times" – see p25-27. The fact that employment tribunals did not exist at that time is irrelevant. The ET is just a modern example of the type of inferior court or tribunal over which the supervisory jurisdiction has long been exercised.
Further, if it was necessary to find a statutory basis for the court's jurisdiction it can arguably be found in the broad terms of s.37 of the Senior Courts Act 1981 under which an injunction may be granted "in all cases in which it appears to the court to be just and convenient to do so", since CROs may be regarded a form of injunctive relief. This is generally recognised as being the basis upon which non-contractual anti-suit injunctions relating to foreign proceedings are now granted – see Turner v Grovit [2002] 1 WLR 107 (HL) per Lord Hoffman at [22].
As to (2), it is correct that there are limits to the court's inherent jurisdiction to how civil proceedings should be conducted as the Al Rawi case makes clear – see, in particular, Lord Dyson's judgment at [18] to [22]. However, none of the limitations there discussed are in point in this case.
It was submitted that the High Court's jurisdiction is limited because the supervisory jurisdiction which the High Court now has over inferior courts or tribunals is limited to judicial review. However, the supervisory jurisdiction is not so limited, as the passage cited above from Ebert v Venvil makes clear. Contempt orders provide another example. That contempt is now covered by the Contempt of Court Act 1981 does not alter the fact that the power to make contempt orders stemmed from the High Court's inherent jurisdiction, as does the power to make orders for like protective purposes, such as CROs.
As to (3), it is correct that the CPR may limit the inherent jurisdiction of the court where there is a conflict between them. This is not, however, a case of conflict. The CPR does not apply to tribunals because a tribunal is not a court for the purposes of the Civil Procedure Act 1977. The CPR therefore cannot and does not purport to apply to tribunal proceedings. In those circumstances its provisions are not inconsistent or in conflict with the exercise of an inherent jurisdiction in relation to such proceedings. No doubt, however, the inherent jurisdiction to make CROs in relation to such proceedings would be exercised consistently with the principles and practices set out in the PD.
It was further submitted on behalf of Mrs Harrold that even if the High Court does have inherent jurisdiction to make a CRO relating to proceedings before the CRO, it should not exercise that power given, in particular: (1) the ET's own powers under its Rules; (2) the Attorney General's statutory powers to restrain vexatious tribunal proceedings under s.42 of the Senior Courts Act 1981 and s.33 of the Employment Tribunals Act 1996, and (3) that it would cut across the fundamental principle that discrimination claims are fact sensitive and should not be determined summarily – see Anyanwu v South Bank Student Union (Commission for Racial Equality, interveners [2001] 2 All ER 353 at [24] and Eszias v North Glamorgan NHS Trust [2007] ICR 1126.
As to (1), whilst the ET has powers to reject claims under Rule 12, to strike out claims under Rule 37, and to make unless orders (Rule 38), deposit orders (Rule 39) and costs orders, none of these powers can be used to prevent proceedings being brought before the ET and they all involve time and cost being incurred. They are not a substitute for a CRO nor do they satisfactorily address the considerations of justice, convenience and appropriate use of resources which underlie the need to make such orders to restrain vexatious litigants.
As to (2), the existence of such powers does not negate the need for CROs, as made clear by the development of Grepe v Loam orders – see generally Bhamjee v Forsdick [2004] 1 WLR 88. As Lord Woolf MR said in Ebert v Venvil at p493E-G:
"It is accepted that the existence of the statutory power has not supplanted the power of the court to make a limited Grepe v. Loam order. They serve to emphasise the importance of the Grepe v. Loam orders only being made when a clear case for making the orders has been established. This is one of the situations where it is accepted that notwithstanding the intervention of Parliament an inherent jurisdiction remains alongside the statutory jurisdiction. This does not mean that intervention of Parliament may not have cut down the inherent jurisdiction of the court. If there was an application for an order of the same width as the statutory jurisdiction, the court could only appropriately deal with such an application under the statutory jurisdiction."
This is not a case where an order of the same width as the statutory jurisdiction is being sought.
As to (3), this principle is only relevant to cases which are sufficiently arguable to merit consideration on the facts. If they are then permission to bring proceedings will be given. If they are not then the principle is not engaged.
In summary, I do not accept that any of Mrs Harrold's arguments establish that the High Court does not have inherent jurisdiction to make a CRO in relation to proceedings before the ET or that the Otobo case should not be followed. On the contrary, for all the reasons outlined above, I conclude that it should be followed. If the High Court does have such jurisdiction, I also do not accept that as a universal or general rule it should not exercise that power in relation to ET proceedings. Whether or not it should do so will depend on the facts of the particular case.
Conclusion
Having carefully considered the parties' submissions and the numerous authorities to which I have been referred I am satisfied that the High Court does have inherent jurisdiction to make a CRO covering proceedings before the ET. Whether or not it is appropriate to do so in this case will involve a detailed consideration of the facts.
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Mr Justice Turner :
INTRODUCTION
In 2008, the claimant suffered serious injury when a surgical operation performed upon him by the defendant went badly wrong.
The claimant commenced proceedings in negligence against the defendant. His claim was compromised on terms which were set out in a consent order dated 4 December 2012. The defendant agreed to pay damages in the sum of £525,000 together with the claimant's costs.
An issue subsequently arose as to the enforceability of a considerable proportion of the claim for costs. The claimant had instructed solicitors, Bolt Burdon Kemp ("BBK") pursuant to a collective conditional fee agreement ("CCFA") with the GMB (Southern Region) ("the Union"). A success fee of 100% was claimed. The costs bill came to a total of just over £350,000.
Thereafter, the defendant successfully argued before Master Gordon-Saker that a proper analysis of the contractual framework led to the inevitable conclusion that BBK had no enforceable claim against the claimant in respect of those costs incurred after 2 July 2009. The consequence of this finding was that by the operation of the indemnity principle a very considerable proportion of the costs claimed against the defendant were thereby rendered irrecoverable and BBK were substantially out of pocket. It against this decision that the present appeal has been brought.
THE INDEMNITY PRINCIPLE AND CFAs
The indemnity principle is well established and very familiar to all those concerned in the assessment of costs. Subject to any statutory exceptions, an award of costs can only be made in order to indemnify a litigant against legal costs and expenses that he has paid or become liable to pay. Accordingly, if in any given case the paying party can establish that the contract of retainer between the receiving party and his legal advisers is unenforceable then he can, in turn, take advantage of this by resisting any application against him to pay any costs incurred under such retainer. In this case, the master found that the contract between the claimant and BBK was unenforceable after 2 July 2009 and that the inevitable consequence was that the claim for costs against the defendant was, in itself, rendered unenforceable by the application of the indemnity principle.
The introduction of conditional fee agreements provided fertile soil for challenges brought on behalf of paying parties in support of which it was argued that the relevant agreement did not comply with mandatory statutory and regulatory requirements. Thus a legal adviser's failure to comply with rules which were intended to protect the interests of litigants began to be deployed by paying parties to avoid liability to pay costs by the operation of the indemnity principle.
The position is clearly and helpfully set out in paragraph 4.2 of Cook on Costs 2015:
"Traditionally the idea that a solicitor would be interested in the outcome of his client's case (other than professionally) was seen as an undesirable state of affairs. The lawyer should be disinterested in order to give impartial and proper advice. He would therefore need to be paid the same whether the case was won or lost. An agreement which depended upon the outcome of events would run counter to this requirement. Consequently, agreements which did so were considered to be 'maintaining' the action and if they included a sharing of the spoils of the litigation they were said to be 'champertous'. Maintenance and champerty were crimes up to the middle of the last century. Even when abolished as crimes, they remained as torts and still rendered solicitors' agreements unenforceable…
The Courts and Legal Services Act 1990 ('CLSA') created CFAs. The wording of s 58 is not the simplest to understand because it recognises that agreements contingent on the outcome of events are generally unenforceable. So, it carved out an area of contingency fee agreements which would be enforceable, but did not otherwise alter the general position. As Ian Burnett QC [now Burnett LJ] poetically put it in Hollins v Russell [2003] EWCA Civ 718, CFAs are 'islands of legality in a sea of illegality.' They have now been joined in this situation by Damages-Based Agreements as of April 2013.
So the Golden Rule to remember in respect of CFAs is that they need to comply with the Courts and Legal Services Act 1990 and any subordinate legislation. If they do not, they become unenforceable contingency fee agreements. They are then unenforceable against the client and, by operation of the indemnity principle, fees generated under such an agreement cannot be recovered from the opponent.
This effect is the root cause of the so-called 'Costs Wars' in the early part of this century. Non-compliance was comparatively easy to demonstrate based on the original regulations. Much of those have been swept away but new Regulations and a new CFA Order came into being on 1 April 2013 and there may be more attempts by paying parties to render successful parties' agreements unenforceable."
In this case, the basis of challenge lay in the alleged failure of the CCFA to comply with the provisions of section 58 of the Courts and Legal Services Act 1990 which provides in so far as is material:
"(1) A conditional fee agreement which satisfies all of the conditions applicable to it by virtue of this section shall not be unenforceable by reason only of its being a conditional fee agreement; but (subject to subsection (5)) any other conditional fee agreement shall be unenforceable.
…
(4) The following further conditions are applicable to a conditional fee agreement which provides for a success fee –
…
it must state the percentage by which the amount of the fees which would be payable if it were not a conditional fee agreement is to be increased; …"
In short, the defendant in this case successfully contended before the Master that the CCFA did not state the percentage uplift after 2 July 2009 and was therefore unenforceable.
THE FACTUAL BACKGROUND
It is now necessary to set out the circumstances of this case in order to understand how an admittedly enforceable CCFA was found to have been rendered unenforceable within four months of the commencement of the retainer of the claimant's solicitors.
On 18 March 2009, the claimant received a letter from BBK confirming that they would be acting for him under a CCFA with the GMB and enclosing standard information and standard terms.
At the time of this letter, there was in force a CCFA between BBK and the Union dated 17 September 2008. Paragraph 3.2 of this agreement required BBK to prepare and retain a written statement of the success fee as therein defined "when accepting instructions under this agreement in relation to a claim…" BBK thus provided a "Statement of Reasons for Percentage Increase" dated 25 March 2009 setting a success fee of 100% in compliance with paragraph 3.2 and with section 58 of the 1990 Act.
The fly in the ointment for the claimant was the advent of a second CCFA document signed on behalf of BBK and the Union and dated 2 July 2009. It is in identical terms to its predecessor save that paragraph 2.3 thereof extends the categories of litigation which the agreement is expressed to cover. It is not, however, disputed that the claimant's claim fell within the parameters of both the first and second CCFAs.
By the operation of paragraph 2.3 thereof, the July 2009 agreement applied to "all claims…whether instructions in respect thereof were first received…before, on or after the date of this agreement". However, on entering into the July 2009 agreement BBK did not prepare a new "Statement of Reasons for Percentage Increase" for the claimant's case.
The master concluded that, from 2 July 2009, the second CCFA entirely superseded the earlier CCFA. As the July 2009 CCFA was not accompanied by any statement of the percentage by which the fees payable were to be increased in the event of success in respect of the claimant's claim it was not compliant with section 58(4)(b). Accordingly, he found that the claimant's solicitors had no enforceable right to costs against the claimant from 2 July 2009 and by the application of the indemnity principle no costs incurred thereafter could be recovered from the defendant either.
THE APPEAL
The claimant contends that the master reached the wrong conclusion, for the following reasons:
i) He was wrong to find that there were two, entirely separate, CCFAs. The CCFA executed in 2009 was simply a variation of its predecessor. Therefore, there did not need to be a further statement of the success fee under that CCFA.
ii) Even if this is not correct, and there was a wholly new CCFA from July 2009, then that CCFA did not impact on the claimant's retainer, because that retainer was created under the 2008 CCFA, and events subsequent to the retainer are irrelevant. The claimant's retainer subsisted under the 2008 CCFA, in respect of which a written statement of the success fee had been prepared.
iii) Even if this is not correct, and a statement of the success fee was required under a second CCFA, the master should have found that the statement of the success fee prepared on 25 March 2009 was sufficient to satisfy this requirement under the second CCFA as well as the first.
iv) Alternatively, the master should have found that, in the absence of a statement of the success fee under the second CCFA, then the proper analysis was that the claimant's retainer did not provide for a success fee, and not that it unlawfully stipulated for such a success fee contrary to the requirement of s 58(4) of the CLSA.
THE SCOPE OF THE SECOND CCFA
Despite the fact that both parties concentrated their attention on the first two grounds of appeal, we have reached the conclusion that the issue of central importance arises from the third ground.
The claimant's skeleton argument deals with the point in three short paragraphs without reference to supporting authority:
"29. The statutory requirement was for the CCFA to state the percentage success fee applicable to the claimant's case. The CCFA's mechanism for doing this was to require the solicitor to prepare a written statement of the applicable success fee in every case where the CCFA was utilised: see clause 3.2.
30. In the present case, the solicitors prepared such a statement on 25 March 2009. The exercise was not repeated when the CCFA was reproduced the following July. The solicitors simply continued with the case, without interruption.
31. The claimant contends that, in these circumstances, the existing statement of the success fee was adopted under the post-July 2009 retainer. The solicitors discharged their obligation under clause 3.2 of the CCFA via the statement they had already prepared. That remained the success fee for which they had provided in writing, and which applied to the claimant's retainer. That retainer therefore satisfied s 58(4) of the CLSA."
The defendant rejected this contention asserting that there was no factual or legal basis for it.
RETROSPECTIVITY
Paragraph 2.3 of the second CCFA provides, in so far as is material:
"This agreement applies to all claims for personal injuries… conducted by the Solicitors for members of the Union including clinical negligence claims…whether instructions in respect thereof were first received before, on or after the date of this agreement…"
Giving these words their ordinary and natural meaning, it is clear that the second CCFA applies retrospectively to past instructions.
Paragraph 3.1 provides, in so far as is material:
"When accepting instructions under this agreement in relation to a claim Solicitors must inform the member as to the circumstances in which the member may be liable to pay the Solicitor's charges…"
This paragraph does not require solicitors who have already received instructions prior to the date of the second CCFA and have complied with its requirements to repeat the provision of information already provided. The second CCFA applies retrospectively. It is thus capable of being complied with retrospectively. To hold otherwise would not only produce an absurd result but would run contrary to a straightforward interpretation of the terms of the agreement. By the operation of paragraph 2.3, the acceptance of instructions falls within the second agreement notwithstanding the fact that such instructions were provided before that agreement was entered into.
Precisely the same analysis applies to the terms of paragraph 3.2:
"When accepting instructions under this agreement in relation to a claim…the Solicitors must prepare and retain a written a written-statement (sic.) (" the written statement of the success fee")…"
Paragraph 3.3 provides:
"The Solicitors shall comply with their obligations under Clauses 3.1 and 3.2 by sending to the member a copy of the "Conditions of GMB Southern Region Legal Aid" worded as set out in the document annexed to this agreement or as may be subsequently agreed by the parties to this agreement."
I conclude that the retrospective nature of the agreement takes effect to the extent that where such conditions had already been sent prior to the date of the second agreement coming into force there was no contractual obligation to send them again after this later agreement had been concluded. In our view, the use of the word "shall" in this context is as an expression of obligation and not futurity.
As Megaw J. held in Trollope and Colls Ltd v Atomic Power Constructions Ltd [1963] 1 W.L.R. 333 at 339:
"But, so far as I am aware, there is no principle of English Law which provides that a contract cannot in any circumstances have retrospective effect, or that, if it purports to have, in fact, retrospective effect, it is in law a nullity …. Often, as I say, the ultimate contract expressly so provides. I can see no reason why, if the parties so intend and agree, such a stipulation should be denied legal effect."
In Northern and Shell Plc v John Laing Construction Ltd [2002] EWHC 2258 (TCC) His Honour Judge Thornton QC sitting as a High Court Judge held following a review of the authorities including Trollope and Colls:
"40. From these authorities, I therefore draw the following conclusions:
1. A contract…can take effect retrospectively...
2. Retrospective effect occurs where this is intended by the parties. That intention can be found if provided for in the words of the contract or deed or by way of necessary implication divined from the surrounding circumstances and from business efficacy…
5. The parties' intention that a contract or deed is to have retrospective effect is more readily to be seen where the parties had a prior contractual relationship preceding the contract.. in question but it is still possible for such retrospective effect to occur where no such prior contractual relationship was in existence where such is provided for by the clear words of the contract or deed.
6. The retrospectivity principle is excluded where, exceptionally, the law or a relevant statutory provision precludes a contract or deed from having retrospective effect. An example of that prohibition is the technical rule governing estates held in land that any term being created cannot start to run from a date prior to the date of the lease."
The Court of Appeal at [2003] EWCA Civ 1035 upheld the decision of the court below and cited Trollope and Colls with approval.
Further, in Forde v Birmingham City Council [2009] 1 WLR 2732 Christopher Clarke J (as he then was) held that section 58 of the 1990 Act made no provision prohibiting retrospective conditional fee arrangements and such a prohibition should not be implied.
I conclude that on a straightforward interpretation of the terms of the second agreement it applied retrospectively to bring within its scope all pre-existing written statements of success fees and was thus compliant with the requirements of section 58 of the Courts and Legal Services Act 1990.
THE REMAINING ISSUES
The claimant's success on his third ground of appeal renders it unnecessary for us to embark on a detailed consideration of the remaining grounds. However, for the sake of completeness I would record that I agree with Master Gordon-Saker that the second agreement was a novation and not a mere variation of its predecessor. It was a complete and self contained document that was expressed to apply to all existing retainers. The strongest argument against this conclusion was based upon the assumption that if it were a novation then the consequences would have not made commercial sense. However, once it is recognised that the second agreement was of retrospective effect then there is no need to take an artificial approach to the issue of novation in order to avoid what might otherwise have given rise to an absurd result.
I also find myself in agreement with the master on the second ground and would hold the claimant was bound by the terms of the second agreement on the basis that the Union was at all times continuing to act as his agent and was doing so when entering into the second CCFA.
Finally, I find that the fourth ground of appeal is without merit. If the claimant's contention had been correct then any CFA which failed to state a percentage fee would not be rendered unenforceable because it could merely be interpreted as not providing for any success fee at all. This would render section 58(4)(b) of the 1990 Act otiose and undermine the protection which Parliament intended thereby to afford to claimants.
CONCUSION
I conclude, therefore, that the claimant's contentions under his third ground are made out and that his appeal succeeds on this ground alone. The assessment of costs must now proceed on the basis that the second CCFA was enforceable as between the claimant and his solicitors and that, in consequence, the indemnity principle does not avail the defendant.
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Mr Justice William Davis:
Introduction
Mark Pollock is now aged 39. On 2nd July 2010 he fell from an open second floor window at the home in Henley on Thames of the Defendants, Enda and Madeline Cahill. As a result he sustained spinal and brain injuries. He is now paralysed from the waist downwards. Those matters are not in dispute. Mr Pollock's case is that he fell from the window due to the breach of the Defendants' duty as occupiers of the house in which he was staying. Insofar as Mr Pollock may be able to prove how and why he fell from the window, the Defendants deny any breach of duty. Further, they argue that, if there was a foreseeable risk of injury, Mr Pollock willingly accepted the risk and/or that Mr Pollock caused or contributed to his injuries by his own negligence. I am required only to consider the issue of liability. Mr Pollock has expressly limited his claim to the limit of the indemnity provided by the Defendants' public liability insurers. This limit is £2,000,000. I anticipate that, if he succeeds on the issue of liability, little investigation will be required on the issue of quantum. The value of Mr Pollock's claim absent such limitation inevitably would be significantly greater than the limit he has set.
In closing submissions Mr Grime Q.C. described this as "a most unusual, most unhappy and tragic case". That description was intended to reflect the fact that, prior to the events in 2010, Mr Pollock was totally blind with no light perception at all. He had not been blind since birth. Rather, he had become blind in 1998. Despite his blindness Mr Pollock initially had made a successful career in business. He then went to achieve great things as an adventure athlete and as a rower. He took part in a race to the South Pole, he competed in several marathons and he participated in a variety of races in hugely challenging conditions. Shortly before his fall he had completed the Round Ireland yacht race. As a rower he won two medals at the Commonwealth Games. His athletic achievements would have been notable for someone without any disability. Given his blindness they were and are remarkable. The events of 2010 have meant that Mr Pollock no longer can undertake the athletic challenges of which he was capable before his fall. Having overcome one disability, he now has had to come to terms with another.
Mr Grime Q.C. argues that my consideration of the case should revolve around two questions. Who opened the window and to what extent? How did Mr Pollock come to fall from the window? I agree that those are the core questions of fact. Given that this was a relatively simple event – a man fell from an open window – it might be thought the evidence would be straightforward. That is not the case and I shall have to engage in a relatively close analysis of the evidence. In the light of that analysis I shall consider the factual questions posed by Mr Grime Q.C. I then shall consider the consequences of my findings of fact in relation to the Defendants' breach of duty (if any).
The evidence – the state of the window
Mr Pollock had arrived at the Defendants' home on the day before his fall. He and a number of other friends had come to Henley in order to attend the summer Regatta. This was not the first time that he had visited the house. There had been a similar house party the previous year. On both occasions he had slept in a bedroom on the second floor. It was a room of modest size with twin beds. The beds were positioned either side of the only window in the room. The window was a double casement window of conventional timber construction. Each window was 135 centimetres high and 55 centimetres wide. The windows met at a central mullion. I do not have a precise measurement of the mullion. This does not matter since the maximum aperture of the window was the aperture created by one of the casements. Each casement had a stay with 5 holes. The stay could be placed on a pin on the window sill with the size of the opening dependent on which hole was used. The height of the window sill was 830 centimetres i.e. approximately mid thigh on a man of Mr Pollock's height. Internally the sill was 21 centimetres deep.
Since Mr Pollock fell out of the window and since there was no apparent damage to the window after his fall, the window must have been open prior to his fall. I shall return to the evidence about who opened the window hereafter. However, the evidence about the extent to which the window was open at the time of the fall is problematic. Mr Pollock can give no evidence on the point. Self evidently he could not see how far the window was open. His evidence is that, although he assumed that there was a window in the room, he did not know where it was or what type of window it was and that he did not know that it was open.
When Mr Pollock fell a number of people were sitting around a table on a terrace at ground level. The table was not immediately below the window in question but it was relatively close to it. Two of those at the table noticed that one or both of the casement windows were open. Alice Whittaker's evidence in her witness statement was as follows: "…I did notice that the window of Mark's room was open….I cannot say how far it was open". In her oral evidence she explained that she was unable to say whether both casements were open. She had only glanced up and had not taken note of that level of detail. Brendan Smyth in his witness statement said that both casements were slightly open i.e. as if on the first hole in the stay to each casement. In his oral evidence he recalled that only the right hand casement (as looked at from the ground) had been open. He did not expand on how wide the window was open. He said that he noticed the open window because he was concerned that the noise of people talking might wake Mr Pollock whom he knew was sleeping in the room above. This is the only evidence I have as to the state of the window immediately before Mr Pollock's fall. Mr Smyth's evidence about the window(s) being only slightly open cannot be correct unless Mr Pollock opened the window himself prior to his fall. Since I accept Mr Pollock's evidence that he was unaware of the presence or position of the window, I reject that possibility. It follows that there is no satisfactory eye witness evidence about how far the window was open immediately before the fall. Given that Mr Smyth noticed the open window and was concerned about the sound of conversation waking Mr Pollock, it is a proper inference from his evidence alone that the window – whether just one casement or both – was more than slightly open. Had that been the position, it is unlikely that Mr Smyth would have noticed it and, even if he had, he would not have been worried about disturbing Mr Pollock.
Mr Pollock's fall was a sudden, shocking and unexpected event. It was immediately apparent to all those sitting around the table that he was seriously hurt. Their concern was his welfare. No-one at ground level properly considered the window from which he had fallen. Martin Murphy, another guest at the house who had been sharing the room with Mr Pollock, in his oral evidence said that he had seen the window either as Mr Pollock fell or once Mr Pollock had come to rest. He said that "for some reason I expected to see the windows wide open and I did not see them." When pressed he said that Mr Pollock had come out of the window so it must have been open but beyond that he would be speculating. Given the circumstances of his observation Mr Murphy's impressionistic view cannot be given any weight. That is not criticism of him as a witness. Rather, it reflects the situation at the time.
Two witnesses said that they went up to Mr Pollock's room in the immediate aftermath of the accident. Enda Cahill went to the room in order to discover the details of medication which it was understood Mr Pollock was taking. This was because the emergency services had asked about the medication. Although I had no specific evidence on the point, I infer that this was the kind of inquiry frequently made when a patient is seriously injured and those treating the patient need to know what existing medication is being ingested in case of the need to administer other drugs or anaesthesia. Enda Cahill agreed that he needed to get this information quickly so it could be passed on to the emergency services. Notwithstanding the urgency of his mission Mr Cahill said that he also looked at the window. Indeed, he stood at the window for a few seconds and was able to observe that both windows were open and on the latch i.e. the stays were on the pins. Not only did he observe that the windows were on the latch, he also noted that one stay was on the third latch and the other stay was on the second latch. He was not able to say which casement was on which latch. Alice Whittaker went to the room in order to fetch some personal belongings of Mr Pollock so that they could go with him to the hospital. The proper inference must be that her visit came after Mr Cahill's though she believed that she was the only visitor to the room before Mr Pollock was taken to hospital. Her evidence was that both windows were open, the left slightly more than the right. The left hand window was open to an angle of 30 degrees to 45 degrees and the right hand window 15 degrees to 30 degrees. The stay of each window was on a pin. She could not recall which with any precision.
After Mr Pollock had left in the ambulance the evidence of Mr and Mrs Cahill is that they visited the bedroom together. Mr Cahill did not mention any such visit in any of his witness statements. In his oral evidence he said that he had gone to the bedroom at around 2.00 a.m. just before he and his wife went to bed. He said that he did so "to start to look at the scene and see how did this happen." He discussed that with his wife. The windows were both open at that time. Mrs Cahill said that she had a vague memory of going to the bedroom "for a very short while." The purpose of the visit was to see if there was anything else left in the room which Mr Pollock would need. Mrs Cahill did not suggest that she had noticed the state of the windows at that point. She said that she was not thinking clearly at this time given what had happened to Mr Pollock. Neither Mr Cahill nor his wife said that they touched the windows on this visit.
Alice Whittaker's evidence was that she was not with the Cahills when they went to the bedroom at about 2.00 a.m. She said that she did go to the bedroom again nearer to 7.00 a.m. Her purpose for doing so was "to look at how this (the fall) had happened." She said that she looked around the room to see if there was something which could explain the fall. But according to her she could not recall the position of the window on this visit. There is another piece of evidence in relation to Alice Whittaker and a visit to the bedroom. Brendan Smyth (who is Alice Whittaker's husband) had a conversation with her at some point within weeks of the events of the 2nd July during which his wife had said something to the effect that she and one of the Cahills had gone to the bedroom after the accident and that one of them had closed the window. Alice Whittaker was asked about that and did not recall any such visit.
Shortly after 7.00 a.m. on the morning of the 3rd July 2010 Madeline Cahill took some photographs of the scene. She began at ground level. She took two photographs looking up at the relevant window. They show one of the casements fully closed and the other casement slightly ajar. She then went to the bedroom. The first interior view photograph of the window shows the left hand casement (as seen from inside) open with the stay on the first hole or latch and the right hand casement fully closed with the handles in the closed position. Mrs Cahill then opened the left hand casement so as to place the stay on the second hole or latch and the right hand casement with the stay on the third hold or latch. Her evidence was that she did so in order to recreate the position as it had been when Mr Pollock had fallen. She knew where to place the stays because her husband had told her the night before i.e. at some point in the aftermath of the accident.
Mrs Cahill made a number of witness statements from the point in August 2011 when the claim was notified by Mr Pollock's solicitors. The first of those statements was made to a loss adjuster instructed by her insurers. She showed the loss adjuster the photographs she had taken albeit simply on the small screen on the digital camera. Her evidence at that stage was that, so far as she was aware, no one had touched the windows after the accident. When she gave oral evidence Mrs Cahill accepted that the proper meaning of that statement was that the photographs of the open windows had been taken before anyone had touched the windows. She further accepted that this was not accurate.
Mrs Cahill's purported reconstruction when she took the photographs of how the window had been immediately after Mr Pollock's fall was not the only exercise in reconstruction she undertook. At some point within two weeks of Mr Pollock's fall the sisters of Mr Pollock's fiancée – Nathalie and Lisa George – visited the house at the invitation of the Cahills. They were shown the bedroom window from which Mr Pollock had fallen. Mrs Cahill opened one of the casements. The sisters' recollection of which casement was opened differs. That difference of recollection is immaterial. Mrs Cahill agreed that she did open one (and only one) of the windows. She said that this was because she assumed that Mr Pollock must have fallen through the window nearest his bed. Both sisters had the same recollection as to how much space was provided by the window in this reconstruction exercise though one referred to the distance in metric terms (around 14 cms) and the other used imperial measurement (about 6 inches). Neither could understand how Mr Pollock could have fallen at all through the gap available.
The evidence – who opened the window?
Whichever casement was open and how far either was open, there can be no doubt that the window was open at the time of the fall. As already indicated Mr Pollock did not know that there was a window in the room. Thus, he was not the person who had opened it. The other person who had occupied the bedroom on the previous night was Mr Murphy. His evidence on this issue came simply from his witness statement in which he said "I do not know who opened the windows or whether they were open when we arrived at the house. However, we were 2 men sharing a room in hot weather and it could be kind of smelly so I am sure one of us would have opened the window."
The direct evidence from the Cahills on this issue was surprisingly sparse. Their witness statements dealt with the opening of the window in elliptical terms with the initial statements being silent on the topic. Mrs Cahill in her statement of 10th October 2013 said "I do not remember opening the window or making a decision not to close it. I did not think about the window…." In her statement of 11th March 2015 she said "I reiterate that we did not leave the window open." It is not clear where she previously had said that "we did not leave the window open." When describing the visit of Nathalie and Lisa George to her house some days after the accident, Mrs Cahill denied that she had said then that she had opened a particular window. But she did say this: "…when I would have opened the windows, it would have been when I was making up the room and at that point in time I did not know that Mark was going to be in there…"
Mr Pollock was in intensive care at Reading Hospital for some days after his fall. His fiancée – Simone George – together with her two sisters as already identified and Barbara Carson, Mr Pollock's mother, all travelled from Ireland and spent those days at the hospital. Mr and Mrs Cahill were regular visitors. The evidence of Simone George, her sisters and Mrs Carson was that they had various conversations with Mrs Cahill in which she spoke of the window from which Mr Pollock fell.
Simone George's evidence was that she had had a conversation with Mrs Cahill in the context of how Mrs Cahill felt now about her house in which she (Simone) had said that she hoped that Mrs Cahill did not feel bad about the house given what had occurred there. Mrs Cahill's response had been to the effect that "the awful thing was that it had occurred to her that it might not be safe for her to leave the window in Mark's bedroom open what with Mark being blind but that it was warm and so she thought on balance it was best open". Simone George said that she was shocked by what Mrs Cahill had said – "it felt like a punch in the stomach" – but she did not say anything because a 'what if' conversation would not have helped. Simone George said that, though her description of Mrs Cahill's comments was not verbatim, some words such as "awful" and "on balance" stuck in her mind.
Nathalie George gave evidence of a similar conversation. Since Simone George spent most of her time by the bedside of Mr Pollock, this evidence is not to be taken as another account of the same conversation. Nathalie George recalled Mrs Cahill as saying that she had had to decide whether to open the window in Mr Pollock's room. Mrs Cahill had said that she had considered whether it was a good idea given that he was blind and that it might not be safe but she concluded that it would have been impossible to sleep in the room because it was a hot day so she had opened the window and put it on the latch. Nathalie George said that she did not then or later criticise Mrs Cahill for what she had done. She felt that this would not have helped Mr Pollock's recovery which was the main focus. The fact that he had fallen out of the window was something which had happened and which could not be reversed. She said that her heart had gone out to Mrs Cahill on the basis that Mr Pollock's accident had occurred because of what Mrs Cahill had done even though she had the best of intentions.
Lisa George's evidence as to what Mrs Cahill said about the opening of the window was in very similar terms to that of her sister, Nathalie. Her recollection was that the discussion had taken place with several people present. She amplified her account in her oral evidence with a reference to Mrs Cahill saying how hot and still it was.
Barbara Carson had a conversation with Mrs Cahill apart from the George sisters. Mrs Cahill did not say in terms to Mrs Carson that she had opened the window in Mr Pollock's room. Rather, Mrs Carson said that Mrs Cahill had told her that it had crossed her mind before the accident that the window in the room should be kept closed because Mr Pollock was blind. Mrs Carson understood that to mean that Mrs Cahill was the person responsible for not having the window kept closed.
Mrs Cahill did not recall any conversation in the terms set out by any of those witnesses.
Who opened the window and to what extent?
I am wholly satisfied on the evidence that Mrs Cahill opened the window in the bedroom used by Mr Pollock. Before considering the basis for that conclusion I must deal with the evidence of Mr Murphy. His evidence does not provide any basis for a finding that he was responsible for opening the window. His witness statement is in clear terms. "I do not know who opened the windows…." That is inconsistent with the proposition that he did so. He did not say, for instance, that he could not remember whether he opened the window. When he went on to say "…I am sure that one of us would have opened the window" I cannot take that to mean that he or Mr Pollock did do so. In context it means simply that, had no-one else opened the window, he would have done had the need arisen. Mr Murphy's evidence in fact is relied on by Mr Grime Q.C. in a different way. In his closing submission he puts it thus: "…the fact of the window having been open at the time of the handover (of the room)…loses any causative potency because control passed to Mr Pollock and/or Mr Murphy and the windows would have been open anyway". I reject that proposition. Control of the window can hardly have passed to Mr Pollock since he did not know of its existence. So far as Mr Murphy was concerned Mrs Cahill did not cease to be the occupier (with her husband) of the bedroom occupied by Mr Pollock and Mr Murphy. She did not cede control of the bedroom to him in any relevant sense. The fact that Mr Murphy said that he would have opened the window had it not been open already does not remove the causative potency of what Mrs Cahill in fact did. What Mr Murphy supposedly would have done (but did not) cannot amount to an intervening cause.
Although Mrs Cahill's evidence generally was that she did not recall opening the bedroom window, she did let slip the comment about opening the windows when she was making up the room. That undermines the argument put by Mr Grime Q.C. that Mrs Cahill's recollection has been consistent throughout. I note also the absence of any evidence at all in relation to the opening of the window in the initial statement she made when the whole purpose of the statement was to deal with a proposed claim about a fall from an open window. But the significant body of evidence which demonstrates that it was Mrs Cahill who opened the window comes from what she said at the hospital. Mr Grime Q.C. relies on the following as reasons for treating this evidence with caution: the opportunity for misinterpretation given the circumstances of the conversations; the possibility of defective memory; the differences in the accounts given by the witnesses; the likelihood that it was one of the occupants of the room who opened the window. In effect he argues that the effect of those matters is that the evidence of what Mrs Cahill said at the hospital is of little or no probative value. I shall deal with those points in turn.
The conversations clearly took place when all concerned were under great stress. I have to take account of the risk of those under stress misunderstanding or misinterpreting what has been said to them. But the evidence of each of the witnesses who spoke of the comments made by Mrs Cahill was compelling. Simone George did not claim to have a verbatim recollection of what had been said to her. She did have a clear memory of certain words and phrases. I am satisfied that this was and is a true memory. Her evidence of her reaction to what she was told – "it felt like a punch in the stomach" – was quite clearly genuine. It was precisely the reaction one might expect from someone who had not prior to that point realised that the open window was due to a conscious act. Further, Simone George's decision to say nothing by way of reaction and her reason for that decision was wholly in keeping with the entire tenor of her evidence and of the manner in which it was given.
Nathalie George (whose evidence was largely mirrored by that of Lisa George) gave evidence in the same calm and measured way as Simone George. The detail she gave of what Mrs Cahill said was not what could be the result of misinterpretation. The entire sense of the discussion as described by her was clear and unequivocal. Nathalie George's reason for not engaging in blame or criticism there and then was convincing as was her description of her overall reaction to what Mrs Cahill had said.
The argument in respect of defective memory is based by way of example on Nathalie and Lisa George having a different recollection of which window was opened by Mrs Cahill when they visited the bedroom. It is notable that their recollection of the extent to which the window was opened is very similar. That fact was of far greater significance than which casement was opened. In any event a failure of memory in relation to a relatively minor detail relating to the opening of the window gives no assistance in assessing the accuracy of recollection of significant remarks made by Mrs Cahill. In reality what the witnesses say about the substance (as opposed to the detail) of those remarks is not a question of recollection or memory. Either Mrs Cahill said the substance as described by the witnesses or she did not. I am quite sure that she did.
There is undoubtedly a difference in the accounts given of what Mrs Cahill said on the one hand to the George sisters and on the other to Mrs Carson. There were separate conversations, the content of which were different. The difference does not undermine the conclusion that Mrs Cahill opened the window. She did not say so in unequivocal terms to Mrs Carter – though that is how Mrs Carter understood her comments. The lack of unequivocality when speaking to Mrs Carter simply means that Mrs Cahill expressed herself differently in that separate conversation.
I consider that the proposition that one of the occupants of the room opened the window has no evidential foundation for the reasons I have given already. Even if it could be said that there were some basis for suggesting that Mr Murphy had opened the window, I then would have to balance that evidence against the evidence indicating that it was Mrs Cahill who did so. I am quite clear where the balance would fall i.e. in favour of Mrs Cahill being responsible.
It is more difficult to reach a clear conclusion as to the extent to which the window was open. It is quite clear that someone closed the right hand casement between the time of Mr Pollock's fall and 7.00 a.m. the following morning. There also may have been some interference with the left hand casement. The result is that the photographs taken by Mrs Cahill at around 7.00 a.m. on the morning of 3rd July 2010 are not an unassailable record of the position at the time of Mr Pollock's fall. The following features of the evidence are notable.
Mr Cahill claims that he was able to note the precise position of the windows on the stays at a time when he was in the bedroom in order to retrieve details of medication needed urgently by the emergency services. According to him he stood by the window for a few seconds despite the urgency of the mission on which he was engaged.
Alice Whittaker observed the windows shortly afterwards when Mr Pollock was still lying on the ground below and when the purpose of her visit was to get some of his belongings – her observation was of the two casements open but in the opposite manner to that depicted on Mrs Cahill's photographs. She was very much less precise as to the degree to which the windows were open.
Mr Cahill said that he made a second visit to the bedroom at about 2.00 a.m. when he further observed the windows. This was a visit of some significance. Yet the first mention in evidence by him of this visit was when he was being cross-examined.
Mrs Cahill said that she visited the bedroom at about this time but only for a very short while and not in order to look at the state of the windows.
Mr Smyth was told by his wife of a visit to the bedroom at some point in the early hours after the accident during which one of the Cahills had closed the window. Mrs Whittaker did not recall any such visit and the Cahills denied closing any window at any stage on the night of the accident. There is no reason to doubt Mr Smyth's recollection on this issue.
Mrs Cahill carried out her purported reconstruction by reference to what her husband had told her the night before in the aftermath of the accident. It was not clear when the description had been given. Once Mr Pollock had gone to the hospital, Mrs Cahill on her own account was not thinking clearly yet she apparently was able to absorb and later remember the detail of how the window had been open.
Mrs Cahill made at least one witness statement which was wholly inaccurate on the issue of whether the position of the windows had been changed between the accident and the taking of the photographs. She claimed not to have realised that it was inaccurate even though she had had to re-open the window before taking the photographs when the window concerned was the one from which Mr Pollock had fallen.
When the George sisters visited the bedroom some days later Mrs Cahill supposedly showed them how the window had been open when Mr Pollock fell. Not only was only one window opened but, more to the point, it was opened rather less than it must have been open at the time of the accident.
There are inferences adverse to the Cahills which flow from these features of the evidence. Mr Cahill's evidence as to when and with whom he examined the position of the window is unsatisfactory as is Mrs Cahill's evidence about the so-called reconstructions. Most significantly I am quite satisfied that the window was closed by one of the Cahills at some point in the early hours of the 3rd July 2010. No-one else had the opportunity to do so. The evidence of Mr Smyth is a positive indication that one of them did so. On a balance of probabilities I conclude that whichever of the Cahills did so was aware at the time of closing the window and knows now that he or she closed the window. I am not able on the evidence to reach any clear conclusion as to which of the Cahills has given misleading evidence on this topic but I am satisfied that one of them has. I do not accept that Mrs Cahill could have engaged in a reconstruction on the basis of what her husband had told her the previous evening so as to give any kind of accurate representation of the position of the window at the time of the accident. It is unrealistic to suppose that (a) there was a conversation in which Mr Cahill gave a clear account of which hole of each stay the relevant casement was fixed and (b) Mrs Cahill remembered such detail the following morning.
I should mention - simply to discount it - the possibility that the window closed due to the wind or some other natural phenomenon. There is no evidence that there was any wind on the evening in question. Rather, Mrs Cahill told Lisa George that it was hot and still. Moreover, it is quite clear from the photograph taken by Mrs Cahill on the morning of the 3rd July that the window had been closed so as to lower the catches at both the top and the bottom. That could not have occurred other than by someone closing the window deliberately.
I am forced to consider why it is that one or other of the Cahills (or possibly both) has given misleading evidence. One might conceive of some innocent explanation for the closing of the window. If so, it is difficult to see why it has not been given. It could be argued that the closing of the window served no purpose – certainly no sinister purpose since the window was re-opened and photographs taken. However, the combination of evidential features as set out above has a cumulative effect which leads me to conclude on a balance of probabilities that, to use the term adopted by Mr Grime Q.C. in his closing submissions, there has been "some kind of attempt to distort or to hide evidence." What are the consequences of this? First, I cannot be confident that the space between the casement and mullion through which Mr Pollock must have fallen was as limited as shown on the photographs taken by Mrs Cahill. On a balance of probabilities I consider that it was greater – though I cannot reach any clear conclusion as to how much greater. Second, it is of relevance to the issue of the breach of duty of care and foreseeability to which I shall turn in due course. Third, it makes the expert evidence relating to the question of how Mr Pollock came to fall from the window even less useful than it already was.
How did Mr Pollock come to fall?
I heard expert evidence on this issue. Mr Lovegrove, an ergonomist, gave evidence on behalf of Mr Pollock. Mr Brown, a mechanical engineer, was called on behalf of the Cahills. Each used a computer model to simulate the bedroom, the window and Mr Pollock. Each used a different computer model and no little time was spent in the course of the evidence in a rehearsal of the relative merits of each model. I did not find this exercise useful in reaching a conclusion on the relevant issue.
In substantive terms the expert witnesses were limited in the scope of their investigations by the terms of the order made at the case management conference in relation to the issues to be addressed by them. The limitations placed upon the experts in the event meant that they did not feel able to investigate the circumstances of the fall as fully as they would have done had they begun with a blank canvas. In the result the expert evidence was of limited assistance.
Both experts proceeded on the assumption that the casements had been open to the extent shown in the reconstruction as photographed by Mrs Cahill on the morning of the 3rd July 2010. I have explained already why that assumption probably was incorrect. However, even with the windows open in that position, it was possible for Mr Pollock to have fallen through the gap. That was the agreed position of the experts after two lengthy discussions. The computer simulation created by Mr Lovegrove does show that the fall would not have been easy. Moreover, the experts agreed that the casement and its fittings were sufficiently robust to withstand the force of Mr Pollock's fall and to remain in place. Beyond those matters the experts – within the confines of the instructions they had been given – agreed on little else.
Mr Lovegrove created a computer simulation in which Mr Pollock suffered a loss of balance whilst facing the right hand casement. From that position Mr Pollock was able to fall through the window. Mr Lovegrove noted a lesion to Mr Pollock's back which was consistent with catching the window and/or its frame during such a fall through the opening, the lesion running from the right shoulder to the left hip. Mr Lovegrove assumed a loss of balance due to the terms of the interlocutory order. He further assumed that Mr Pollock had put his hand against the central mullion, that he had incorrectly identified the mullion as part of the door frame and that he then had walked forwards in the belief that he was walking through the door. Mr Lovegrove did not agree with the proposition that this was a highly unlikely combination of circumstances. He did agree that Mr Pollock could not have gone out of the window without at some point losing his balance.
Mr Brown did not accept that Mr Pollock could have fallen through the window as a result of overbalancing within the bedroom. He agreed that a person could fall through the gap as posited. But the only way in which he was able to recreate a fall in his computer simulation was to position the notional person with his legs astride the window sill. Mr Brown considered that it might have been possible for a person to overbalance and fall if there had been some leaning out of the window to start with so that the momentum and/or the overall position of the person led to overbalancing. However, he was not asked to investigate this proposition so he could not offer any considered view on the subject. In general terms he accepted that he had not done any work outside the limits of his instructions to understand how a fall could have occurred.
A significant factor in Mr Brown's conclusion was the width of the window sill. In his model he demonstrated that the effect of the sill was to prevent a person who knocked into the sill then tipping out of the window; rather the person fell forward across the sill. It emerged at the end of his evidence that this modelling assumed the sill would have acted as a barrier at the level of Mr Pollock's hips or thereabouts and that Mr Pollock would have pivoted against the sill with nothing to cause further movement beyond that pivot point. In fact, because of his height and build Mr Pollock's centre of mass was significantly above the level of the sill. Mr Brown agreed that this factor would tend to encourage forward momentum beyond the pivot point – though he still did not accept that the computer simulation created by Mr Lovegrove was viable.
The expert evidence is of limited value in relation to the issue of how Mr Pollock came to fall. That is not the fault of the expert witnesses. They were operating under the constraints of their instructions as limited by the interlocutory order. As I have found they were using a factual basis which probably was incorrect.
Mr Pollock had no recollection of how he came to fall from the window. He had spent the day at the Regatta and the Leander Club. Although he had had some alcohol he was not particularly affected by drink. He had returned to the home of the Cahills in the middle of the evening. He had decided to return to Ireland earlier than planned so he wanted an early night. Mr Murphy escorted him to the back door. He was able to make his way to the bedroom unassisted. Mr Pollock then went to bed and went to sleep. He was still asleep when the other members of the house party returned. Mrs Cahill showed Alice Whittaker around the house because there had been alterations to the house since Alice Whittaker's last visit and they went as far as the door of Mr Pollock's bedroom. They were able to tell that Mr Pollock was asleep. It was only a few minutes later that Mr Pollock fell from the window. He remembered nothing between going to sleep and coming round briefly as he lay on the grass outside the house.
It follows that Mr Pollock gave no direct evidence as to why he got out of bed. However, he recounted the events of the previous night when he had been in the bedroom. He had got out of bed in order to go to the bathroom. That journey involved getting out of bed, going to the right along the length of his bed and then moving diagonally from the end of his bed to the right in order to reach the door. The bathroom was somewhere relatively close by. Mr Pollock said that he would not feel his way along the bed since he knew the rough distances involved. On the previous night he had tried to make his way to the bathroom. As Mr Pollock put it his "internal compass" went wrong. Instead of going along the side of his bed, he walked away from his bed. He believed he was going in the right direction. He only realised his mistake when he came into contact with the bed on the other side of the room. When he reached out he touched the head of Mr Murphy. That must mean that his route on the previous night had taken him past and relatively close to the window of the bedroom. Mr Pollock said that "the most likely explanation is that I was again going to the bathroom but I fell out the window prior to getting to Martin (Murphy) this time."
Mr Grime Q.C. argues that the scenario put forward by Mr Pollock is anything but likely; rather it is inherently improbable. It is said that the loss of the internal compass is not something described by Mr Pollock or his fiancée as part of any pattern so that it in fact was intrinsically unlikely. It is said also that Mr Pollock would have used additional care on the night of his fall to avoid a similar event i.e. he would have used the bed as a guide to the proper route. I disagree with this analysis. Whether Mr Pollock was habitually losing his internal compass is of little account. He certainly did so on the previous night after he had gone to sleep in this bedroom. There is every prospect that the same thing occurred on the night of his fall. Given that it had happened once, it is not at all improbable that it happened again. As to the proposition that Mr Pollock would have used more care to avoid walking in the wrong direction, this would have more force if the issue had arisen when Mr Pollock was fully awake and alert. If Mr Pollock is right in his "likely explanation", he did what he did having just woken in order to go to the bathroom. In that situation it is not unlikely that he would not have taken what would have been for him unusual precautions. Plainly I have no direct evidence that Mr Pollock mistakenly walked towards the window in the belief that he was en route to the door. But I am satisfied that it is a perfectly sensible explanation for his presence near the window. Mr Lovegrove's evidence provides an explanation for how he then came to fall through the window. Mr Brown's concession in evidence allows for Mr Pollock's forward momentum to have taken him to a tipping point on the window sill.
Mr Grime Q.C. argues that there are at least two other possible explanations for Mr Pollock's fall from the window. Those possible explanations do not involve any breach of duty on the part of the Cahills. The burden is on Mr Pollock to prove that his fall was caused by a breach of duty. Since there are possible scenarios whereby Mr Pollock fell which involved no breach of duty and which Mr Pollock cannot disprove, his claim must fail. Mr Grime Q.C. relies on the well-known speech of Lord Brandon in The Popi M [1985] 1 WLR 948, in particular the passage in which he discussed the applicability of the dictum of Sherlock Holmes to proof in legal proceedings:
"My Lords, the late Sir Arthur Conan Doyle in his book "The Sign of Four", describes his hero, Mr. Sherlock Holmes, as saying to the latter's friend, Dr. Watson: "how often have I said to you that, when you have eliminated the impossible, whatever remains, however improbable, must be the truth?" It is, no doubt, on the basis of this well-known but unjudicial dictum that Bingham J. decided to accept the shipowners' submarine theory, even though he regarded it, for seven cogent reasons, as extremely improbable.
In my view there are three reasons why it is inappropriate to apply the dictum of Mr. Sherlock Holmes, to which I have just referred, to the process of fact-finding which a judge of first instance has to perform at the conclusion of a case of the kind here concerned.
The first reason is one which I have already sought to emphasise as being of great importance, namely, that the judge is not bound always to make a finding one way or the other with regard to the facts averred by the parties. He has open to him the third alternative of saying that the party on whom the burden of proof lies in relation to any averment made by him has failed to discharge that burden. No judge likes to decide cases on burden of proof if he can legitimately avoid having to do so.
There are cases, however, in which, owing to the unsatisfactory state of the evidence or otherwise, deciding on the burden of proof is the only just course for him to take.
The second reason is that the dictum can only apply when all relevant facts are known, so that all possible explanations, except a single extremely improbable one, can properly be eliminated. That state of affairs does not exist in the present case: to take but one example, the ship sank in such deep water that a diver's examination of the nature of the aperture, which might well have thrown light on its cause, could not be carried out.
The third reason is that the legal concept of proof of a case on a balance of probabilities must be applied with common sense. It requires a judge of first instance, before he finds that a particular event occurred, to be satisfied on the evidence that it is more likely to have occurred than not. If such a judge concludes, on a whole series of cogent grounds, that the occurrence of an event is extremely improbable, a finding by him that it is nevertheless more likely to have occurred than not, does not accord with common sense. This is especially so when it is open to the judge to say simply that the evidence leaves him in doubt whether the event occurred or not, and that the party on whom the burden of proving that the event occurred lies has therefore failed to discharge such burden."
In this instance Mr Grime Q.C. argues that two of Lord Brandon's three reasons are apposite. First, the evidence in this case is – like it or not – very unsatisfactory. Second, not all of the relevant facts are known. It is said that there is no reason to prefer the accidental fall from the window over deliberate leaning out of the window followed by over-balancing and/or sleep-walking involving Mr Pollock believing for whatever reason that he was climbing out of a hatch. The first scenario would involve a deliberate act by Mr Pollock followed by misjudgement on his part about how far he could lean out of the window. The second scenario would mean that Mr Pollock's blindness was irrelevant to his fall.
That argument only can prosper if the alternative scenarios are genuine possibilities. I am quite satisfied that they are not. The suggestion that Mr Pollock leant over the window sill to speak to those sitting below whether to remonstrate with them for making too much noise or simply to say hello to the new arrivals is untenable. First, Mr Pollock did not know that there was a window at that point in the room, still less that the window was open. Second, such an action would indicate some deliberation i.e. more than a sleepy attempt to find the bathroom. There is no reason why Mr Pollock would have overbalanced if he deliberately had gone to the window to make contact with those below. Third, the expert evidence does not allow for simple overbalancing at the window sill without forward momentum as a sensible possibility. Fourth, one might have expected Mr Pollock to have made himself known to those below before he leant so far as to overbalance. There is no evidence at all that he did so. The deliberate leaning followed by overbalancing as a scenario is without any foundation.
The second possibility put forward is that Mr Pollock was in a state of reduced consciousness such as sleepwalking. There is no evidence that Mr Pollock was prone to sleep walking. The only direct evidence on the issue comes from Mr Murphy in his witness statement in which he said "I am not aware of Mark having any history of sleep walking." Mr Pollock and Simone George were asked about sleep walking in the context of a press release issued on behalf of Mr Pollock and press reporting of the event. Neither was asked if Mr Pollock in fact had any previous experience of sleep walking.
The basis for the suggestion that sleepwalking was a possible explanation for the fall essentially comes from a press report which appeared in the Daily Mirror on about the 7th July 2010. It largely consisted of purported quotation from someone named Markham Nolan who had from time to time acted as a spokesman for Mr Pollock in relation to his adventure activities. The essence of the report was that on the day of his fall Mr Pollock was exhausted due to his exertions in the Round Ireland yacht race, that after his fall Mr Pollock did not lose consciousness and spoke to his friends saying something about sailing and that in a semi conscious state he may have thought that he was climbing through a hatch on his yacht when in fact he was climbing through the window.
I heard no evidence from Mr Nolan. I have no direct evidence that he said what is reported in the Daily Mirror. I do have direct evidence from Mr Pollock about the effect on him of the Round Ireland yacht race. He agreed that it was a tiring event. However, it had concluded some days prior to his fall and he was no longer affected by it. Mr Pollock also said that he did lose consciousness. There is no evidence to the contrary. There was evidence that at one point Mr Pollock after his fall said something about being in eighth place. Whether this was a reference to the yacht race is speculative. Mr Pollock had no recollection of saying this. His only observation was that his yacht had not finished in eighth place.
Simone George provided a clear explanation as to how the speculative theory involving Mr Pollock believing that he was climbing through a yacht hatch evolved. Those at the scene considered that, because the window was on the latch, Mr Pollock could not have fallen out. From that the belief grew that, if he did not fall, he must have climbed out of the window. Someone suggested "maybe he thought he was on the boat and he was climbing out through the hatch." That suggestion was bolstered by the fact that Mr Pollock had said something which people took to be a reference to a position in a race. It then was assumed that this was a reference to the yacht race. As Simone George put it "that had all been put together to make, in the absence of anyone actually knowing, the theory of the week." The evidence in the case demonstrates that Mr Pollock could have fallen out of the window so the underlying basis for this speculation is fundamentally flawed. It is far from clear that Mr Pollock was talking after his fall about a race and there is no evidence at all that he was talking about the yacht race. Mr Pollock explained that, had he climbed out of the window in the belief that it was a yacht hatch, his actions would have led to the window being ripped out of the wall. That may have been an exaggeration but I accept that the window would not have been left in the state it was had Mr Pollock levered himself up as if he were climbing through a hatch. I am quite satisfied that the scenario involving reduced consciousness or sleepwalking is baseless.
I am satisfied on a balance of probabilities that Mr Pollock fell through the open window as he was trying to make his way to the bathroom having just woken. He had lost his internal compass. When he got to the window he believed that he was at the door. He had forward momentum because of that belief. Whether he lost his balance before he reached the window or in the act of reaching forward towards what he believed was the door is not possible to say. That does not matter. It is not necessary for me to be satisfied precisely how the loss of balance and consequent forward momentum occurred. The result was that Mr Pollock, who did not know that there was a window there or that it was open, fell to the ground below.
Was there a breach of duty on the part of the Defendants?
There is no dispute about the duty of care owed by the Cahills to Mr Pollock i.e. the common duty of care as occupiers pursuant to Section 2 of the Occupiers Liability Act 1957, the relevant passage of which is as follows:
(2)The common duty of care is a duty to take such care as in all the circumstances of the case is reasonable to see that the visitor will be reasonably safe in using the premises for the purposes for which he is invited or permitted by the occupier to be there.
(3)The circumstances relevant for the present purpose include the degree of care, and of want of care, which would ordinarily be looked for in such a visitor, so that (for example) in proper cases—
(a)an occupier must be prepared for children to be less careful than adults; and
(b)an occupier may expect that a person, in the exercise of his calling, will appreciate and guard against any special risks ordinarily incident to it, so far as the occupier leaves him free to do so.
It is argued on behalf of Mr Pollock that the reference to "such a visitor" requires the occupier to have regard to any known vulnerability. That is clearly correct. If Mr Pollock had been a sighted person, the open window would not have rendered the premises unsafe. It was the fact that he was blind that made them so.
Mr Grime Q.C. argues that, although a fall through the window was possible (as shown by what in fact happened), the likelihood of it occurring was not "a real risk"; rather it was "a mere possibility which would never influence the mind of a reasonable man." Thus, the Cahills took such care as was reasonable in the circumstances to see that Mr Pollock would be reasonably safe. It is said that there were no danger or risk features to the window, that Mr Pollock was hugely competent at coping with his disability, that no-one felt it necessary to take precautions to protect Mr Pollock in relation to the window and that Mr Pollock himself did not ask about or make requests in relation to the window.
Obviously the window was not dangerous per se although the sill was lower than many sills in the domestic setting. However, an open window did create an obvious risk for a blind person, particularly when it was on the second storey of the house with nothing to prevent a fall to the ground below. As is admitted in the Defence it was reasonably foreseeable that a person who fell from the window might sustain serious injury. Mr Pollock was and is an adventurous and resourceful man. But he was a blind man. His adventure activities were carried out after very careful risk assessments and always with the assistance of others. The fact that he was a resourceful blind person was irrelevant to the risk created by an open window. The evidence of Mrs Cahill as the person who opened the window was that she did not think of it as a risk and that she had no concern about the safety of an open window in the room. She did understand that Mr Pollock required particular care because she was concerned about the stairs. If it is a fact that she did not think of the open window as a risk, she was wrong to take that view. It is of note that she accepted that she would not have allowed a child to be unattended in the bedroom with an open window. However, the evidence of what Mrs Cahill said to Simone George and her sisters (which I shall not repeat) demonstrates that the risk was apparent to her albeit that she clearly misjudged the extent of the risk. The views of others in the house are of limited relevance. They were not occupiers and did not owe any duty of care. The argument in relation to Mr Pollock not having investigated the issue of the window is to some extent based on the proposition that he knew of the existence of the window. As already indicated I am satisfied that he did not. The parallel drawn with Mr Pollock's behaviour at hotels when he would ask a member of hotel staff to explain the windows in his room to him is false. When Mr Pollock was at a hotel, he was a stranger and the hotel would not know he was blind. Mrs Cahill was fully aware of his position. I am satisfied that the Cahills failed to discharge the common duty of care they owed as occupiers. The open window was a real risk to Mr Pollock. They created that risk. They ought to have appreciated the risk and taken steps to prevent it by keeping the window closed or by warning Mr Pollock about it with particular reference as to the extent of the drop from the window.
The actions of Mr Pollock
I do not intend to address the suggestion that Mr Pollock caused his fall by leaning too far out of the window. That simply does not arise on the findings of fact I have made. The issue raised by the Defence are volenti (as incorporated into the liability of the occupier by section 2(5) of the 1957 Act) and contributory negligence.
For section 2(5) of the 1957 Act to have any purchase there must have been a willing acceptance of the risk by Mr Pollock. It is not immediately obvious how Mr Pollock could have accepted a risk of which he knew nothing. It is argued that the risk he accepted was the risk that the window may have been open. I do not consider that this is the kind of situation to which volenti – whether under the statute or at common law – applies. In any event and as a matter of fact Mr Pollock did not accept that risk.
Contributory negligence is put on two bases: failing to make the inquiry of the kind Mr Pollock made in a strange hotel; failing to use his bed as a guide to the door. For the reasons already given when considering those issues I do not consider that Mr Pollock failed to take reasonable care of his own safety in either respect.
Conclusion
This is an unusual case. All those involved were close friends. The process of the hearing was clearly difficult for all concerned. Everyone had great sympathy and regard for Mr Pollock. My task has been to set aside the personal issues involved. I have been concerned solely with an assessment of the evidence and the proper conclusions to be drawn from that evidence however unpalatable they may be to the parties. In the result I am satisfied that Mr Pollock has proved that his injury was caused by a breach of duty on the part of the Defendants. There will be judgment for Mr Pollock on the issue of liability.
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His Honour Judge Richard Seymour Q.C. :
Introduction
This action arises out an attempt to develop land situate in Dubai, United Arab Emirates, by construction of a tower block of flats ("the Tower"). The site of the land in question ("the Site") was in an area described as intended to be called City of Arabia ("the Overall Development Site"). The Site itself was described as "approximately 20,000 square feet identified as Parcel No. 3003 in the Development Phasing Schedule" relating to the Overall Development Site. At the material time the freehold title, or Dubai equivalent, of the Overall Development Site was vested in Dubai Tourism Development Company LLC ("Dubai Tourism"). By an agreement in writing date 1 March 2004 and made between (1) Dubai Tourism and (2) Ilyas Galadari and Mustafa Galadari ("the Galadaris") Dubai Tourism agreed to sell the Overall Development Site to the Galadaris. Subsequently, by an agreement ("the Purchase Agreement") in writing dated 1 December 2005 and made between Ilyas & Mustafa Galadari Group ("the Group"), a company incorporated under the laws of the United Arab Emirates, and Dubai Property Ring Ltd. ("the Nazran Company") the Nazran Company agreed to purchase the Site from the Group. Presumably by 1 December 2005 the Group had acquired title to the Overall Development Site from the Galadaris.
The Nazran Company was incorporated in the Republic of Seychelles on 28 July 2005. It seems to have been incorporated expressly for the purpose of acquiring the Site and causing the Tower to be constructed.
In the Purchase Agreement the Site was called "the Property" and the expression "Completion Date" was defined in clause 2.1 as meaning "the date on which the Purchaser has paid the final installment [sic] of the Purchase Price". The Purchase Agreement contained other provisions which are material to the issues in this action as follows:-
"3. SALE OF THE PROPERTY
Subject to the terms and conditions of this Agreement, the Seller agrees to sell the Property and the Purchaser agrees to purchase the Property.
4. PURCHASE PRICE
4.1 The Purchase Price for the Property shall be AED 40,000,000/- (UAE Dirhams Forty Million only).
4.2 The Purchase Price shall be paid in Post Dated Cheques as follows:
No. Date Amount (Dhs.)
1 10th December 2005 6,500,000/-
2 31st March 2006 8,375,000/-
3 31st July 2006 8,375,000/-
4 30th November 2006 8,375,000/-
5 31st March 2007 8,375,000/-
4.3 …
4.4 If the failure to honor [sic] any of the checks [sic] as stated in Clause 4.2 hereof has not been remedied within fifteen (15) days from the date of written notification from the Seller of the failure to deliver or honor any such checks, the Seller shall be entitled to terminate this Agreement by written notice to the Purchaser in accordance with Clause 12.1 hereof.
…
6. POSSESSION
6.1 Subject to signature of this Agreement and upon receipt of the Seller of the 40% payment of the Purchase Price, the Seller shall grant and provide to the Purchaser exclusive unrestricted and unlimited physical access to and exclusive physical possession of the Property in writing to enable the Purchaser to develop the Property and to plan, design and commence construction of the Building.
6.2 Subject to Clause 6.3 hereof, on the Completion Date the Seller shall transfer to the Purchaser Freehold Title to the Property and provide the Purchaser with evidence of the registration of the Purchaser's Freehold Title at, and a Freehold Title deed in the Purchaser's name issued by, the Dubai Lands Department. In connection therewith, the Parties shall bear the respective governmental fees imposed by the Dubai Lands Department on a seller and purchaser for transfer of title.
…
9. REPRESENTATIONS AND WARRANTIES BY SELLER
The Seller represents and warrants to the Purchaser that:
…
9.5 the Purchaser shall have the right to Sell the Property, Building and/or Units;
…"
In 2005 the claimants, Dr. Jagtar Singh Pooni and his wife, Jaswinder Kaur Pooni, were seeking investments to fund the education of their children. They came into contact with the defendant, Mr. Tervinder Singh Nazran, who was at that time seeking to raise funds to put into the Nazran Company to enable it to undertake the purchase of the Site and to finance the construction of the Tower. Mr. Nazran sought to interest prospective providers of funds in the opportunity to purchase a flat in the Tower when it was constructed. Dr. and Mrs. Pooni were interested in acquiring the right to two flats, and agreed to put up £100,000 in respect of each flat. The Nazran Company produced a document called a "Form IP1 – Investor & Purchase Reservation Form" which those interested in purchasing a flat in the Tower were invited to complete. Dr. and Mrs. Pooni completed two such forms, one dated 19 October 2005 and the other dated 25 November 2005. Each form as completed was in very similar terms. The only details of the flat to be purchased inserted in either form were that it was to be a two bedroom flat with one car parking space, the first on the fifteenth floor of the Tower and the other on one of the tenth to fifteenth floors. The "Terms and Conditions" on each form included:-
"DPR [i.e. the Nazran Company] guarantees the buyer:
1. To buy back the Apartment at £200,000 by date 1st March 2007 (should extension be required it will not be more than 6 months from the completion date). Or instead the Buyer can keep the Apartment (the decision to keep the Apartment is to be made in writing to DPR 3month [sic] prior to the completion date or indicate it now by circling one the following: Keeping apartment or Buy Back).[Neither was circled]
2. The Apartment is Freehold as per the Dubai Laws.
3. A contract of purchase will be issued by DPR in due course on a standard format, subject to the approval of the master developer – City of Arabia. In the unlikely case of non approval of the project, DPR will refund the full amount deposited."
The two sums of £100,000 which Dr. and Mrs. Pooni agreed to pay were paid, in the first instance, not to the Nazran Company, but to Mr. Nazran personally. Mr. Nazran entered into two written agreements ("the Guarantees"), the first dated 24 November 2005 and the second dated 25 November 2005, but in identical terms, with Dr. and Mrs. Pooni. Each of the Guarantees was drafted by English solicitors instructed by Mr. Nazran, Ansons LLP. That limited liability partnership acted for Mr. Nazran in this action. I have called the Guarantees by that name in this judgment because each was, on its face, described as "Personal Guarantee Relating to the purchase of an apartment in the City of Arabia Development". However, the Guarantees were not what one would ordinarily call guarantees. The material terms of each of the Guarantees for present purposes were these:-
"INTRODUCTION
A) A site has identified a site [sic] in the development area in Dubai, United Arab Emirates known as the City of Arabia ("Land") where it is proposed to construct a building comprising of apartments ("Tower").
B) Dubai Property Ring Limited (registered in the Seychelles) having its place of business at [address given] has been established as the corporate entity which will acquire the Land and procure the construction of the Tower.
C) Dubai Property Ring Limited has offered to sell two bedroomed apartments in the Tower to each of T S Nazran and a syndicate of others (including the Buyer [defined as both Dr. Pooni and Mrs. Pooni] for £100,000 (one hundred thousand pounds sterling).
D) This Agreement sets out the terms which apply to the £100,000 provided by the Buyer to T S Nazran for the purchase of an apartment in the Tower.
IT IS AGREED as follows:
1. Investment
T S Nazran hereby confirms receipt of the sum of £100,000 (one hundred thousand pounds sterling) from the Buyer.
T S Nazran undertakes to use the £100,000 received from the Buyer, subject to the terms of this Agreement, for the acquisition for the Buyer of a two bed roomed apartment in the Tower, as identified on the DPR [i.e. Nazran Company] IP1 form issued to the Buyer by Dubai Property Ring Limited ("Apartment").
The £100,000 provided by the Buyer will be repayable in accordance with the terms of this Agreement.
2. Assurances
In consideration of the Buyer providing £100,000 to him, T S Nazran warrants to the Buyer that:
2.1 T S Nazran is both a shareholder and a director of Dubai Property Ring Limited;
2.2 full legal and beneficial title, in accordance with the laws of Dubai, to the Land vests in Dubai Property Ring Limited (subject to the payment of further instalments of the purchase price for the Land);
2.3 T S Nazran has purchased an apartment in the Tower for £100,000 and such purchase has been made on terms no more favourable than the terms of this Agreement;
2.4 T S Nazran will not release any of the £100,000 provided by the Buyer to Dubai Property Ring Limited until it is confirmed that T S Nazran will be entitled to sell the Land and to reimburse the Buyer in accordance with the provisions of this Agreement; and
2.5 T S Nazran will ensure that the £100,000 provided by the Buyer will only be released to Dubai Property Ring Limited upon satisfactory confirmation by Dubai Property Ring Limited to the Buyer of ownership of the Apartment by the Buyer.
3. Repayment
T S Nazran undertakes that if appropriate detailed terms cannot be agreed with Dubai Property Ring Limited that he shall not release the £100,000 provided by the Buyer to Dubai Property Ring Limited and shall ensure that the £100,000 shall be returned to the Buyer, in which event the Buyer shall not become the owner of the Apartment.
T S Nazran further undertakes that the £100,000 provided by the Buyer will only be released to Dubai Property Ring Limited on the following terms:
3.1 Dubai Property Ring Limited undertakes to inform the Buyer when it is about to commence construction of the Tower, the Buyer shall then be entitled by written notice to Dubai Property Ring Limited to require it to procure the purchase of the Apartment (such right to be exercised by notice to Dubai Property Ring Limited within two weeks of receiving notification that construction is about to commence0.
In the event of such notice being served by the Buyer then within four weeks Dubai Property Ring Limited shall (subject to delivery to it of such title and transfer documentation to the Apartment by the payment to the Buyers in Dhirams [sic]of an amount equivalent to £200,000 converted at the Exchange Rate (as defined in clause 5.1). For the avoidance of doubt if the Apartment is valued at more than the amount payable to the Buyer in accordance with the terms of this clause such excess shall belong to Dubai Property Ring Limited; or
3.2 if the construction of the Tower has not commenced by the expiry of eighteen months from the date of this Agreement then Dubai Property Ring Limited shall (subject to delivery to it of such title and transfer documentation to the Apartment as it shall reasonably require) procure the purchase of the Apartment by the payment to the Buyer in Dhirams [sic] of an amount equivalent to £100,000 converted at the Exchange Rate (as defined in clause 5.1). For the avoidance of doubt if the Apartment is valued at more than the amount payable to the Buyer in accordance with the terms of this clause such excess shall belong to Dubai Property Ring Limited.
If Dubai Property Ring Limited has informed the Buyer of its intention to commence construction of the Tower and the Buyer fails to serve notice in accordance with clause 3.1 above then title to the Apartment shall continue to vest in the Buyer and the Buyer shall be deemed to have forgone any right to require Dubai Property Ring Limited to procure the purchase of the Apartment.
…"
Unhappily it is apparent immediately upon reading those parts of the Guarantees which I have quoted that the Guarantees were not well-drafted. Recital C) was confusing as to who precisely was to pay the Nazran Company £100,000 and for what. The recital was certainly capable of being interpreted as recording that there were to be only two payments – one by Mr. Nazran, and one by "a syndicate of others". It was also unclear as to how many apartments had been agreed to be sold for the sum of £100,000. Perhaps more significantly, clause 2.4, as drafted, seemed to have the effect that Mr. Nazran was required, before releasing any of the £100,000, to have acquired from the Nazran Company title to the Site so as to be able to sell it himself. Clause 2.5 appeared, as drafted, to have the consequence that title to the apartment had to be transferred to Dr. and Mrs. Pooni by the Nazran Company before the purchase price could be handed over to the Nazran Company by Mr. Nazran. The second undertaking of Mr. Nazran in clause 3 appeared cumbersome, in that Mr. Nazran was in effect undertaking to procure undertakings in favour of Dr. and Mrs. Pooni from the Nazran Company. Not all of these difficulties in construction of the Guarantees were of significance in this action, but it was upon some of the clauses in the Guarantees, specifically clause 1, clause 2.4, clause 2.5 and the first undertaking of Mr. Nazran in clause 3, that Dr. and Mrs. Pooni based their claims in this action.
It was not in dispute, by the time of the trial, that what Mr. Nazran had actually done with the total of £200,000 provided to him by Dr. and Mrs. Pooni was that pleaded at paragraph 12 of his Re-Amended Defence:-
"… the Defendant released the Claimants [sic] total funds for the two apartments of £200,000 to a holding account in which syndicate funds were deposited as a collective, funds were transferred from this account on behalf of DPR [i.e. the Nazran Company] directly to the master developer and land Seller's account in or about December 2005 towards the first instalment of the land as per the LandSPA [i.e. the Purchase Agreement] terms in which DPR is the registered purchaser. The Defendant did not withhold or utilise the Claimants [sic] funds for any other purpose."
Dr. and Mrs. Pooni requested the return of the £200,000 they paid to Mr. Nazran, but no sum has been forthcoming. In the Re-Amended Particulars of Claim in this action their claim for repayment of the £200,000 is put in a number of ways, some more exotic than others. The most straightforward were that, releasing their money to the Nazran Company to enable the Nazran Company, in conjunction with other funds, to make the first payment due under the Purchase Agreement amounted to breach of the obligations of Mr. Nazran under clause 1, clause 2.4, clause 2.5 and the first undertaking in clause 3 of the Guarantees; alternatively, that the £200,000 had been paid to Mr. Nazran to hold on trust only to be used in accordance with the provisions of the Guarantees which I have identified, so that the money has been paid away in breach of trust. As a result of the breaches of the Guarantees and breaches of trust complained of, it was said, Dr. and Mrs. Pooni had suffered loss in the amount of the sums given to Mr. Nazran, £200,000.
In answer to the claims of Dr. and Mrs. Pooni various points were raised in the Re-Amended Defence of Mr. Nazran. Many of those points were not pursued at the trial by Mr. James Morgan, who appeared on behalf of Mr. Nazran, but who had not drafted the Re-Amended Defence. In response to the most straightforward bases of claim it was said that, on proper construction of the Guarantees, Mr. Nazran was entitled to use the monies provided by Dr. and Mrs. Pooni as he did. That contention was also advanced as the answer to the alleged breaches of trust. As a matter of pleading the case of Mr. Nazran was put in this way at paragraph 26 of the Re-Amended Defence:-
"Paragraph 5 is denied. As is set out fully above, the Defendant as managing director for DPR, in accordance with the terms of the agreement, released the funds of £200,000 directly to the master developer [i.e. the Group] (as part of the first instalment to purchase the land) for DPR on or about December 2005 on the date the LandSPA was signed without delay and therefore utilised the Claimants [sic] funds for the purpose they were intended for, i.e., to purchase the land. Therefore, neither the Defendant not the Company [i.e. the Nazran Company] hold any funds on trust for the Claimants, either as pleaded or at all, and further these funds were released in accordance with the agreements with the Claimants."
The pleas in paragraph 26 of the Re-Amended Defence were elaborated by Mr. Morgan in his written skeleton argument:-
"35. [Reliance upon the actual words of clause 1 (or of clause 2.4, clause 2.5 or clause 3)] ignores other provisions in the Guarantees, the background knowledge of the parties and the clear commercial purpose of the arrangements with the early investors. In particular:
a. It is clear from the Form [IP1] and is accepted by the Pooni's [sic] that their "purchase" of the apartments was off-plan and prior to construction of even the tower;
b. That is underlined by §3.1 and §3.2 of the Guarantee which specifically identified that DPR would give notice when it was about to commence construction of the tower and/or would "purchase" the apartment if construction of the tower had not commenced;
c. Moreover, clear background facts known to the parties were that DPR (i) could not construct the apartments without first acquiring the Property and (ii) could not acquire the Property without using the early investments to pay for the initial instalments;
d. It would therefore make no commercial sense at all if as Mr. [sic] Pooni suggests later in his statement, the investment was not to be released until "we were actually going to own the apartments as a finished product and would have something to show for our investment, something that we could either sell back to DPRL…"
e. Accordingly, words such as "sell", "purchase" and "acquisition" have to be construed accordingly: they did not mean the sale/purchase of a then physically identifiable apartment or the use of investments to acquire such a thing;
f. That quoted part of clause 1 cannot be construed as a catch-all promise that in the event that the Pooni's [sic] did not become owners of a physically constructed apartment, Mr. Nazran would be liable to reimburse them their investment. This was something that only DPR promised pursuant to §3.2 of the Guarantee.
36. Accordingly, the quoted part of clause 1 has to be read in terms that the investment was to be used in connection with, or as a step in the process of, the acquisition of an apartment in the tower. The use of the investment to purchase the Property on which the tower (that would contain the apartment) was to be built, was well within the scope thereof and there was no breach. That is supported by the other "terms of this Agreement", including §2.4 and §2.5 referred to below."
The other point which was relied upon in answer to the claim for £200,000 for breach of the terms of the Guarantee was pleaded in the Re-Amended Defence at paragraph 35 in this way:-
"Further, the Claimants have failed to mitigate their loss by not accepting the £200,000 offered to them by DPR in or about May 2008."
That point was elaborated in the written skeleton argument of Mr. Morgan:-
"Mitigation of Loss
44. The Pooni's [sic] are not entitled to recover for any loss which they ought to have avoided by taking reasonable steps to so do: McGregor on Damages (19th ed) at 9-014 et seq.
45. During 2008 to 2009 there were various offers by DPR of alternative agreements to facilitate payment of at least the total investment of £200,000 to the Pooni's [sic]. They say that these offers were conditional, they did not provide a guarantee of payment and in any event they wanted the full £400,000 (plus compensation) in accordance with their contractual rights.
46. But by refusing at least the revised draft agreement dated 15th February 2009 [C166-169], the Pooni's [sic] failed to take reasonable steps which would have led to them recovering the £200,000 that they now claim. In particular:
a. The draft agreement provided for payment of the £200,000 by 31st March 2009;
b. In the event that payment was not made as promised, then the new agreement would be "null and void" meaning that the Pooni's [sic] were not prejudiced if payment was not made;
c. There is good evidence that had the Pooni's [sic] entered into the new agreement then they would have received payment as was the case with other early investors, including Mr. Sahota …
d. The Pooni's [sic] refusal appears to have been based on the erroneous assumption that they were entitled to the full £400,000 from DPR under §3.1 of the Guarantees, but in fact their rights were limited to the £200,000 under §3.1 …
e. A claim at the level of £400,000 has not been pursued against Mr. Nazran or DPR."
In the result there were, effectively, two questions requiring resolution in order to determine the most straightforward bases of claim advanced on behalf of Dr. and Mrs. Pooni – whether, on proper construction of the Guarantees, Mr. Nazran was entitled to release the total of £200,000 paid to him by Dr. and Mrs. Pooni to contribute to the first payment in respect of the Site due under the Purchase Agreement, and, if not, whether Dr. and Mrs. Pooni, acting reasonably, ought to have accepted some offer of payment made to them by the Nazran Company. As I understood the submissions of Mr. Morgan, he contended that the consequence of Dr. and Mrs. Pooni not accepting the offer, or one of the offers, upon which Mr. Nazran sought to rely, was that they were unable to recover any sum at all from Mr. Nazran.
Construction of the Guarantees
There was no difference between Counsel before me in relation to the principles to be applied in determining in English law the proper construction of a document in writing. The now classic exposition is that of Lord Hoffmann in Investors Compensation Scheme Ltd. v. West Bromwich Building Society [1998] 1 WLR 896 at pages 912H to 913E:-
"The principles may be summarised as follows.
(1) Interpretation is the ascertainment of the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract.
(2) The background was famously referred to by Lord Wilberforce as the "matrix of fact", but this phrase is, if anything, an understated description of what the background may include. Subject to the requirement that it should have been reasonably available to the parties and to the exception to be mentioned next, it includes absolutely anything which would have affected the way in which the language of the document would have been understood by a reasonable man.
(3) The law excludes from the admissible background the previous negotiations of the parties and their declarations of subjective intent. They are admissible only in an action for rectification. The law makes this distinction for reasons of practical policy and, in this respect only, legal interpretation differs from the way we would interpret utterances in ordinary life. The boundaries of this exception are in some respects unclear. But this is not the occasion on which to explore them.
(4) The meaning which a document (or any other utterance) would convey to a reasonable man is not the same thing as the meaning of its words. The meaning of words is a matter of dictionaries and grammars; the meaning of the document is what the parties using those words against the relevant background would reasonably have been understood to mean. The background may not merely enable the reasonable man to choose between the possible meanings of words which are ambiguous but even (as occasionally happens in ordinary life) to conclude that the parties must, for whatever reason, have used the wrong words or syntax: see Mannai Investments Co. Ltd. v. Eagle Star Life Assurance Co. Ltd. [1997] AC 749.
(5) The "rule" that words should be given their "natural and ordinary meaning" reflects the common sense proposition that we do not easily accept that people have made linguistic mistakes, particularly in formal documents. On the other hand, if one would nevertheless conclude from the background that something must have gone wrong with the language, the law does not require judges to attribute to the parties an intention which they plainly could not have had. Lord Diplock made this point more vigorously when he said in Antaios Compania Naviera SA v. Salen Rederierna AB [1985] AC 191, 201:
"if detailed semantic and syntactical analysis of words in a commercial contract is going to lead to a conclusion which flouts business commonsense, it must be made to yield to business commonsense."
In the light of the submissions of Mr. Morgan the fourth of Lord Hoffmann's principles was probably the most important to which to have regard in the circumstances of the present case. However, that principle needs to be understood properly. The vital clause is, "the meaning of the document is what the parties using those words against the relevant background would reasonably have been understood to mean". The process of construction is the assessment of the meaning of a written document which contains words. The words used are not to be ignored. The words used are critical, because it was by the selection of those words and the use of them grammatically to construct the sentences in which they were employed that the parties sought to express the meaning which they desired. That meaning is to be determined objectively. The question is what the use of the particular words in the particular way in which they were used, against the background in which the document was produced, would reasonably convey to a reasonable man with knowledge of the relevant background. The question is not whether the parties would have been better advised to make an agreement other than the one which they in fact made. It is not open to the court to seek to improve upon the agreement which the parties made for themselves.
Logically the process of construction has to start somewhere, and generally, at any rate, the most convenient place at which to start is by reading the words used in the document which fall to be construed and seeing what they seem to convey simply as a matter of the ordinary use of the English language. Depending upon the particular context it may be necessary to consider possible use of language in some technical sense, or some slang use, or whether the ordinary English understanding of the words used is affected by some background fact or circumstance known to the parties at the time the agreement was made.
The need for a process of construction to be undertaken is obviously most evident if there is ambiguity in the use in the document of the English words employed. If there is no ambiguity, however, there is, perhaps, at least a modest presumption at the outset that the parties intended to mean what the words used convey as a matter of English – per Lord Hoffmann, "… we do not easily accept that people have made linguistic mistakes, particularly in formal documents.". Obviously such modest presumption yields readily to any background fact or circumstance known to the parties which could affect the meaning which they intended, but the process of construction necessarily proceeds by stages.
As a matter of the use of the English language it has to be said that the effect, so far as relevant to the claims of Dr. and Mrs. Pooni, of the provisions of the Guarantees upon which they relied is tolerably clear.
The provision in clause 1, "T S Nazran undertakes to use the £100,000 received from the Buyer, subject to the terms of this Agreement, for the acquisition for the Buyer of a two bed roomed apartment in the Tower, as identified on the DPR IP1 form issued to the Buyer by Dubai Property Ring Limited", amounted, on its face, to a promise by Mr. Nazran to use the £100,000 only for the acquisition of the apartment mentioned in the IP1 form, unless some other use was permitted by the other terms of the Guarantee. Given that the apartment in question was to be constructed as part of the Tower, and that the Nazran Company was to procure the building of the Tower, what the term amounted to was that Mr. Nazran would use the money to pay the Nazran Company for conveyance of the title to the apartment to Dr. and Mrs. Pooni.
I have already pointed out that clause 2.4 of the Guarantees has some difficulties as to its exact meaning. However, those difficulties do not affect the force of the provision on the important point in what circumstances was it open to Mr. Nazran to use the money provided by Dr. and Mrs. Pooni. The words, "T S Nazran will not release any of the £100,000 provided by the Buyer to Dubai Property Ring Limited until it is confirmed that T S Nazran will be entitled to sell the Land and to reimburse the Buyer in accordance with the provisions of this Agreement", could, perhaps, have been intended to mean not that the money was not to be released until Mr. Nazran personally was in a position to sell the Site, but rather that the money was not to be released until the Nazran Company was in a position to do that. However, that is not the critical question for present purposes. The critical question for present purposes is whether it was open to Mr. Nazran to release the money when neither Mr. Nazran nor the Nazran Company was able to sell the Site.
The literal meaning of clause 2.5 of the Guarantees, "T S Nazran will ensure that the £100,000 provided by the Buyer will only be released to Dubai Property Ring Limited upon satisfactory confirmation by Dubai Property Ring Limited to the Buyer of ownership of the Apartment by the Buyer" did seem to have the effect that the purchase price of the apartment would not be paid until after title to it had been conveyed to Dr. and Mrs. Pooni. Although it would be unusual for the purchase price to be paid after conveyance, in circumstances in which the purchase price was held by Mr. Nazran and could be paid immediately upon completion of the conveyance it was of no practical effect. What was clear, however, as a matter of the use of the English language, was that the only use which Mr. Nazran could make of the money was to pay the purchase price of the apartment.
Once again, it seems to me that, as a matter of use of the English language, the relevant effect of the other provision upon which Dr. and Mrs. Pooni relied, that in clause 3 that, "T S Nazran undertakes that if appropriate detailed terms cannot be agreed with Dubai Property Ring Limited that he shall not release the £100,000 provided by the Buyer to Dubai Property Ring Limited and shall ensure that the £100,000 shall be returned to the Buyer, in which event the Buyer shall not become the owner of the Apartment", was clear. Mr. Nazran was to hold onto the money until terms for the purchase of the apartment had been agreed between Dr. and Mrs. Pooni and the Nazran Company.
It is right to say that it can be discerned from the Guarantees themselves, in clause 2.2, that the parties to the Guarantees knew perfectly well that there were outstanding instalments of the purchase price of the Site to be paid in the future. Given the terms of the provisions of the Guarantees upon which Dr. and Mrs. Pooni relied, it appears that the parties specifically had in mind that the money provided by Dr. and Mrs. Pooni to Mr. Nazran should not be used in the making of any contribution towards payments of that category.
The case for Mr. Nazran did not, by and large, involve any suggested verbal modification to the words actually used in the provisions upon which Dr. and Mrs. Pooni relied, but ignoring them. The justification for ignoring them was said to be that complying with them would have had no commercial purpose, and that the obvious commercial purpose of Dr. and Mrs. Pooni paying £200,000 at the time they did was to assist in the financing of the purchase of the Site.
Mr. Morgan did submit that the provision in clause 1 of the Guarantees relied upon by Dr. and Mrs. Pooni should be read as if it said, in material part, "in connection with, or as a step in the process of, the acquisition of" and so comprehending the use of the money for the purpose of purchasing the Site upon which the Tower containing the relevant apartments was to be constructed.
He submitted that there was in any event no breach of clause 2.4 of the Guarantees because Mr. Nazran controlled the Nazran Company and the Nazran Company was entitled to sell the Site. That contention was based on the warranty in clause 9.5 of the Purchase Agreement. However, in my judgment that warranty, that "the Purchaser shall have the right to Sell", not that "the Purchaser has the right to Sell", was plainly directed at a point in time after the Nazran Company had paid the full purchase price, not at any earlier point.
As to clause 2.5 of the Guarantees, Mr. Morgan submitted at paragraph 40 c of his written skeleton argument that:-
"The clause can be properly understood as only requiring confirmation by DPR to the Pooni's [sic] that upon construction of the relevant apartment (and assuming that the option under §3.1 of the Guarantee had not been exercised) they would be the owners of it;"
In support of the contention that the parties to the Guarantees knew that the Nazran Company had not, as at the date of the Guarantees, paid anything for the Site, and thus that it was obvious that the money contributed by Dr. and Mrs. Pooni was to be used as part of the money necessary to be paid to purchase the Site, Mr. Nazran gave evidence, at paragraphs 11 and 12 of his witness statement for the purposes of this action, that:-
"11. The Claimant's [sic] entered into two Guarantee's [sic] with me on 24th and 25th November 2005. These were witnessed by Mr. Stanley Dcosta [sic] who was working for ARE. As per Exhibit 24.
1.2 [sic] Prior to making the investment of £200,000 to secure the apartment units in the off plan development with DPR. [sic] The 1st Claimant attended a number of presentations met with myself and Mr. Stanley D'costa prior to investing. Almost always the 1st Claimant attended with Mr. Gary Sahota and another investor by the name of Mr. Ajaib Benning, who was also introduced by Mr. Gary Sahota. The Claimant took away DVD's marketing material, copies of the Personal Guarantees, and reservation form, later further meetings were held to talk through the Reservation Department, Personal Guarantee document and a specimen "Land Sales Purchase Agreement" document that was issued by IMG [i.e. the Group], which later became the agreement on which basis the land was purchased. The last page showed the master plan that was to be constructed. Exhibit 2.
12. The 1st Claimant was shown
12.1 a draft LAND Sales Purchase Agreement (LandSPA) and a a [sic] refund clause (Clause 12). A specimen version of the LandSPA had been issued from the master developer (IMG) of the City of Arabia, to show each of the Syndicate members and obtain their interest and consent to proceed. The Claimant's [sic] were shown the LandSPA document and its contents were explained on a word for word basis to the Syndicate members by myself. The 1st Claimant at the time often attended meetings with Gary Sahota and Mr. Ajaib Benning.
12.2 The 1st Claimant were [sic] informed of my decision to participate in the Dubai's realestate [sic] market and its vision to expand and create a city of tourism all of which was backed by the worlds [sic] press reports
12.3 We also discussed the great possibilities of growth on completion of the tower and the master plan of the City of Arabia
12.4 In addition to the Land SPA e [sic] a secondary Government contract which underpinned the making of the City of Arabia and referred to it as The Plan, this was a contract from the Govt Dept of Tourism which bound IMG to perform and complete (deliver) the City of Arabia within a certain time.
12.5 The claimants told me that they were confident in Dubai's real-estate market and its booming growth
12.6 I told them that they had direct access to myself in DPR and that the company DPR was a new company that had a clean sheet and no debts
12.7 The claimants as they were going to make payments to me, I made them aware of how I would act in the Guarantee to make sure that their funds were safely invested. I also explained that if the project was not to proceed before off plan sales, their funds were to return from DPR in which I would do my best in selling off the land in the open market, or if construction of the project had not proceeded within 24 months DPR would arrange for a refund as per clause 3.2. The growth would come only if the business proceeded and successfully completed with off plan Sales [sic] and with the Construction [sic] of the Tower starting, the fail safe mechanism and final resort to receive funds back was by actioning the refund clause 12 of the LANDSPA [sic].
12.8 I made the Claimants also aware of the risks n [sic] the presentations that DPR:
12.8.1 was not owning the land; but purchasing the land via a staged Syndicated fund raising process
12.8.2 Was to apply for planning and design approvals and that no planning approvals on the building design of the Tower from government authorities [sic]
12.8.3 Would have to find customers and market the towers [sic] presence in the region to make the sales possible
12.8.4 Was buying the land in City of Arabia which that at the time was a desert landscape with no infrastructure."
It was common ground that Mrs. Pooni was only involved personally in one meeting with Mr. Nazran, in May 2008. Both Dr. Pooni and Mrs. Pooni were called to give evidence at the trial. In cross-examination Dr. Pooni agreed that Mr. Nazran had told him before the Guarantees were entered into that the Nazran Company was purchasing the Site via a staged syndicated fund raising process, but Dr. Pooni understood that he was, as it were, in a second phase of a syndicate and that money provided by the first phase had covered the payment necessary to be made to acquire the Site, subject to the need for further instalments of the purchase price to be made. Dr. Pooni said in cross-examination that no draft or version of the Purchase Agreement was presented to him before the Guarantees were entered into, and, indeed, he had not seen a copy until one was, reluctantly, disclosed on behalf of Mr. Nazran in this action.
On behalf of Mr. Nazran Mr. Morgan drew to my attention that at paragraph 20 of his witness statement dated 22 October 2014 made for the purposes of this action Dr. Pooni had said:-
"The nub of the arrangement, as it was explained to me, was that a number of investors would 'forward purchase' apartments in the block, that is to say, buy them off plan and before they were built, the purchase monies thereby raised being used to buy the land and to fund the development of the site. Accordingly we were being invited to buy apartments, not the land itself, and we were definitely not investing in or becoming shareholders of DPRL, despite what Mr. Nazran asserts."
Mr. Morgan submitted that that passage was entirely consistent with Mr. Nazran's case that Dr. Pooni knew perfectly well that the money he provided was to be applied to making a payment in respect of the purchase of the Site. When that was put to Dr. Pooni in cross-examination he said that, on reflection, paragraph 20 of his witness statement might have been better expressed. The point he said he had been trying to make was that what he had been invited to do was to buy an apartment, or rather two apartments, not to invest in the Nazran Company or to provide money for the purchase of the Site. Mr. Morgan suggested to Dr. Pooni that that explanation was inconsistent with a comment in an e-mail Dr. Pooni sent to Mr. Nazran on 3 November 2010 that, "After all you did b[u]y the land with our money". Dr. Pooni observed that that comment reflected the position as it seemed to him in 2010 in the light of what had happened between the provision of the money and the date of the e-mail, not what he understood the position to be in October/November 2005.
Plainly it is necessary to reach a conclusion as to whether to accept the evidence of Mr. Nazran that a draft of the Purchase Agreement was shown to Dr. Pooni before the making of the Guarantees, or to accept the evidence of Dr. Pooni that it was not. I accept the evidence of Dr. Pooni on this point. Although criticised by Mr. Morgan in his closing submissions as inclined to rely on the terms of the Guarantees rather than answering questions put to him, I was impressed by Dr. Pooni as a witness. I do not think that the criticism made of him was justified. His position was that what was said to him by Mr. Nazran about the project involving the Tower was reflected in what the English words used in the Guarantees said, so he was not in fact evading Mr. Morgan's questions, but answering them to the effect that what was in the Guarantees reflected what he had been told. By contrast I was not impressed by Mr. Nazran as a witness. He was inclined to be evasive, launching upon long, and often irrelevant, disquisitions in response to questions which were perfectly capable of being answered "Yes" or "No". Mr. James Quirke, who appeared on behalf of Dr. and Mrs. Pooni, roundly submitted in closing that Mr. Nazran's evidence was dishonest, and that he was dishonest. That, I think, was rather harsh, but not unfair. Mr. Nazran was inaccurate in some of his evidence, and I formed the view that his professed recollection of what was said to Dr. Pooni, or shown to him, prior to the provision of the £200,000, was what Mr. Nazran wished the position to have been, rather than an actual recollection of what it had in fact been. That "rose-tinted" recollection affected also Mr. Nazran's account of the meeting with Dr. and Mrs. Pooni in May 2008 to which I shall come. However, a vivid illustration of the problem of accepting the evidence of Mr. Nazran arose out of discussion in cross-examination of various versions of what may be described as a "Settlement Agreement", on the face of it intended to be made between (1) Mr. Nazran (2) the Nazran Company and (3) usually an "Investor", but sometimes Dr. Pooni. I shall come later in this judgment to the versions of the Settlement Agreement which are relevant to the issue of mitigation of loss. For the present it is enough to observe that each version contained a number of recitals. Recital (A) of each version included this sentence, "The Investment, together with other funds to be utilised in connection with the development opportunities, are presently held in an Escrow Account (hereinafter defined) in Dubai and controlled by HSBC Bank on behalf of DPR". In each version of the Settlement Agreement there was a definition of the expression "Investment". The definitions varied a bit, but the effect of each of them was that it meant "the original investment sum". Mr. Quirke pressed Mr. Nazran with the proposition, plainly correct, that the terms of Recital (A) represented, falsely, to Dr. and Mrs. Pooni that their money had not been utilised, but had been placed in the escrow account, and so was safe. Mr. Nazran would not have it. He maintained that all that had been asserted was that there was a fund in the escrow account out of which Dr. and Mrs. Pooni could be repaid. The furthest Mr. Nazran was prepared ultimately to go, after a considerable amount of time had been spent on the point, was that there was some infelicitous use of language.
Notwithstanding my acceptance of the evidence of Dr. Pooni that he was not shown a draft, or any version, of the Purchase Agreement before the Guarantees were entered into, the point remains that, on his account, Dr. Pooni was providing money to Mr. Nazran which could not be used until the Tower was completed and Dr. and Mrs. Pooni had had conveyed to them two apartments. Mr. Morgan urged upon me that that was a very uncommercial result, such that it could not possibly be what the parties had intended.
That submission focused, of course, not on the commerciality of the Guarantees, but upon the commerciality of the underlying transaction. Although the commerciality of the underlying transaction was undoubtedly a factor to take into account in construing the Guarantees, of greater significance was the commerciality of the Guarantees. Even Mr. Nazran accepted that the purpose of entering into the Guarantees was to give confidence to Dr. and Mrs. Pooni that they were not giving their money to a recently-formed Seychelles company, but to a British citizen resident in England who promised to deal with the money in accordance with the terms of the Guarantees. If Mr. Morgan's submission was sound the apparent confidence created by the Guarantees was worthless, because Mr. Nazran could simply pass the money straight to the Nazran Company to enable it to make a payment to the Group in respect of the purchase of the Site. A reasonable person considering the meaning of the Guarantees objectively would not reach the conclusion that the parties intended them to be useless pieces of paper.
Actually I do not accept the submission of Mr. Morgan that the provision of money by Dr. and Mrs. Pooni to Mr. Nazran on terms that he would hold it until the Tower was completed and two apartments could be conveyed to Dr. and Mrs. Pooni, or they could take a profit of 100%, was uncommercial. There may well have been some value to Mr. Nazran, or the Nazran Company, in being able to say to potential lenders that not merely had two apartments been pre-sold, but that they had actually been paid for in full. That information may have provided an incentive to a lender to lend, because it would know that, subject only to completion of the Tower, money lent could be repaid.
In the result, therefore, I reject the construction of the Guarantees urged upon me by Mr. Morgan. On the plain meaning of the English words used in the clauses relied upon on behalf of Dr. and Mrs. Pooni Mr. Nazran applied their money in breach of the Guarantees and is, subject to the question of mitigation of loss to which I am about to come, bound to repay the sum of £200,000. Mr. Morgan accepted that at paragraph 47 of his written skeleton argument.
Mitigation of loss
By the end of the trial the case of Mr. Nazran as to mitigation of loss had become refined to the issue whether what was presented to Dr. and Mrs. Pooni at the meeting they had with Mr. Nazran in May 2008 was the version of the Settlement Agreement for which Mr. Nazran contended, or the version for which Dr. and Mrs. Pooni contended. Mr. Morgan accepted that, if the version presented was that for which Dr. and Mrs. Pooni contended, they acted reasonably in declining to enter into that Settlement Agreement.
The principal difference between the various versions – there seem to have been at least four produced at different times – of the Settlement Agreement was in the terms of repayment of the original investment of Dr. and Mrs. Pooni provided for in clause 3.
Clause 3 of the version of the Settlement Agreement which Mr. Nazran asserted that he had offered Dr. and Mrs. Pooni in the meeting in May 2008 was in these terms:-
"The Investor hereby acknowledges receipt of the Investment from DPR and hereby releases TSN [Mr. Nazran] from all obligations and liabilities pursuant to the terms of the Existing Personal Guarantee."
That version of the Settlement Agreement was in effect but a receipt for money handed over. Mr. Nazran contended that Dr. and Mrs. Pooni were not prepared to enter into a Settlement Agreement in those terms because they wanted to hold out for payment of the promised profit and compensation for delay. It should be remembered that, on Mr. Nazran's account, this version of the Settlement Agreement was offered two and a half years after the money had been paid by Dr. and Mrs. Pooni, at a time when work on the Site had not started, the world financial crisis had intervened, and the Government of Dubai had established the Real Estate Regulatory Authority and passed a law requiring money paid in respect of apartments sold off plan to be placed in stringently regulated escrow accounts. This version of the Settlement Agreement itself refers to money in an escrow account in Recital (A). In other words, on Mr. Nazran's evidence the Nazran Company was prepared to refund to Dr. and Mrs. Pooni £200,000 with no conditions immediately in return for signature of the Settlement Agreement, notwithstanding the fact that the money to make repayment had to come from the escrow account.
Clause 3 of the version of the Settlement Agreement which Dr. and Mrs. Pooni both contended was that presented to them by Mr. Nazran at the meeting in May 2008 provided:-
"In consideration of the premises herein the Investor hereby releases TSN from all obligations and liabilities pursuant to the terms of the Existing Personal Guarantee.
The Investor acknowledges that repayment of the Investment by DPR to the Investor has been agreed to and accepted by the legal authorities in Dubai strictly on the understanding that any such repayments must not be made to the detriment of other investors nor to the detriment of the construction programme generally and, consequently, agrees to accept repayment of the Investment at some time following the Commencement of Construction provisionally (but not absolutely) scheduled for sometime in 2009.
The Investor hereby acknowledges that payment of the above mentioned sum must be by way of withdrawals from the Escrow Account with such withdrawals being subject to the rules and regulations of the Escrow Account for the time being in force. The Investor shall not hold DPR responsible for any delays occasioned in paying the above mentioned payment to the Investor where such delays are occasioned through no fault of DPR."
The concept underlying mitigation of loss is that a person who has suffered damage as a result of the wrong of another must act reasonably to reduce, or eliminate, the loss consequent upon the wrong. In the present case what Mr. Nazran's contention amounted to was that, acting reasonably, Dr. and Mrs. Pooni, should have released Mr. Nazran from all liability under the Guarantees in return for the obligation of repayment by the Nazran Company contained in the relevant version of the Settlement Agreement. It is, I think, obvious that acting reasonably, once Mr. Nazran had acted in breach of the Guarantees by paying away money which he had agreed to hold, did not involve releasing Mr. Nazran from his liability. Moreover, it did not involve releasing Mr. Nazran from his liability in return for a claim of dubious worth against a Seychelles company which was dependent upon the views of regulatory authorities in Dubai and the rules and regulations governing the operation of an escrow account in Dubai. The issue of mitigation could only sensibly arise if Dr. and Mrs. Pooni had been offered repayment in cash of £200,000 by the Nazran Company after they had become aware that Mr. Nazran had paid away the money in breach of contract and breach of trust, but had refused it. That, of course, was Mr. Nazran's case. However, it is fair to say that, because of production of various versions of the Settlement Agreement including a Recital (A) recording that the money paid by Dr. and Mrs. Pooni was held in an escrow account, Dr. and Mrs. Pooni did not discover until after the commencement of this action what Mr. Nazran had actually done with their money. It is plain beyond argument that an obligation to mitigate one's loss cannot arise until one has become aware that one has suffered loss.
I wholly reject the evidence of Mr. Nazran that the version of the Settlement Agreement which he offered to Dr. and Mrs. Pooni in May 2008 was that for which he contended. If the Nazran Company had free access to £200,000 which could be used to repay Dr. and Mrs. Pooni, the logical way in which to proceed was for the Nazran Company to provide that money to Mr. Nazran and for him to pay it over to Dr. and Mrs. Pooni under the Guarantees. The intervention of a Settlement Agreement was wholly unnecessary as Mr. Nazran would simply have been performing his obligations under the Guarantees. It is difficult to resist the conclusion that the whole purpose of the production of the versions of the Settlement Agreement which were shown to Dr. and Mrs. Pooni was to persuade Dr. and Mrs. Pooni to surrender valuable rights against Mr. Nazran personally in return for speculative rights against the Nazran Company. The position of Dr. and Mrs. Pooni was that they had never seen the version of the Settlement Agreement which Mr. Nazran contended they had been offered at the meeting in May 2008 until after the commencement of this action. I am sure that they are correct in that.
By the end of the trial it was common ground that a version of the Settlement Agreement had been sent to Dr. Pooni as an attachment to an e-mail sent on 15 February 2009. Clause 3 of that form of the Settlement Agreement was in these terms:-
"In consideration of the premises herein the Investor hereby releases TSN from all obligations and liabilities pursuant to the terms of the Existing Personal Guarantee
The Investor acknowledges that repayment of the Investment by DPR has been agreed to and accepted by the legal authorities in Dubai strictly on the understanding that any such repayments must not be made to the detriment of other investors nor to the detriment of the construction programme generally and, consequently, agrees to accept repayment of the Investment at some time following the Commencement of Construction provisionally (but not absolutely) scheduled for sometime in 2009
The Investor hereby acknowledges that payment of the above mentioned sum must be by way of withdrawals from the Escrow Account with such withdrawals being subject to the rules and regulations of the Escrow Account for the time being in force. The Investor shall not hold DPR responsible for any delays occasioned in paying the above mentioned payment to the Investor where such delays are occasioned through no fault of DPR."
Those terms are identical to the terms set out in the version which Dr. and Mrs. Pooni said was offered to them at the meeting with Mr. Nazran in May 2008. On Mr. Nazran's case as to the offer made in May 2008 the offer which was made in February 2009 was considerably worse than the offer which he made in May 2008 which had been rejected. That could not be right. When that was pointed out to him, Mr. Nazran said that the version sent as an attachment to the e-mail of 15 February 2009, which was actually despatched not by Mr. Nazran himself, but by Mr. Phillip Ulanowski, was not that which Mr. Nazran had intended should be sent. Mr. Nazran asserted that the version of the Settlement Agreement which he had intended to be sent in February 2009 had a clause 3 which provided:-
"The Investor hereby accepts repayment of the Investment in the sum of Two Hundred Thousand Pounds (£200,000) such sum to be paid on or before 31 March 2009 and hereby releases TSN from all obligations and liabilities pursuant to the terms of the Existing Personal Guarantee.
The Investor hereby acknowledges that payment of the above mentioned sum must be by way of withdrawals from the Escrow Account with such withdrawals being subject to the rules and regulations of the Escrow Account for the time being in force. The Investor shall not hold DPR responsible for any delays occasioned in paying the above mentioned payment to the Investor where such delays are occasioned through no fault of DPR.
The Parties hereby acknowledge that the entirety of this Agreement is conditional upon the happening of the Conditional Event [paying the £200,000] in the absence of which this Agreement (in its entirety) shall be null and void and the terms and conditions of the Principal Agreement shall remain in force."
That version of the Settlement Agreement, which Dr. and Mrs. Pooni told me, and I accept, was never seen by them before the commencement of this action, was basically an exercise in futility. In effect clause 3 of that version provided that either the Nazran Company would pay Dr. and Mrs. Pooni £200,000 out of the escrow account by 31 March 2009 or they would be left with their rights under the Guarantees. It offered nothing worthwhile. However, it was expressed to be subject to some conditions which did not appear in the version which Mr. Nazran said he had offered Dr. and Mrs. Pooni in their meeting in May 2008. Again I reject any suggestion that Mr. Nazran made his best offer on behalf of the Nazran Company first and thereafter made less attractive offers. Mr. Nazran was unable to explain why the version of the Settlement Agreement which Mr. Ulanowski in fact attached to his e-mail was current in February 2009, if Mr. Nazran's intention had been that the version he identified should have been sent to Dr. Pooni. The truth, I think, is that Mr. Nazran has produced versions of the Settlement Agreement for the purposes of this action which appear to support the case he wishes to advance.
In the result there is nothing in the contention that Dr. and Mrs. Pooni had failed to mitigate their loss consequent upon the breaches of the Guarantees and breaches of trust of Mr. Nazran.
Conclusion
In the result there will be judgment for Dr. and Mrs. Pooni in the sum of £200,000, together with interest. I think by the end of the trial it was common ground that, if Dr. and Mrs. Pooni succeeded in their claim, interest should be awarded pursuant to statute at a rate calculated at a level above base rate. Understandably Mr. Quirke urged me to be generous. However, the purpose of an award of interest is to compensate a litigant for being kept out of money which should have been paid, and the concept of generosity is irrelevant. It seems to me that the focus of my attention should be the sort of rate of interest which Dr. and Mrs. Pooni might have been able to earn on their £200,000 had it been placed in a bank deposit account. There will be simple interest on the amount of £200,000 from the date Mr. Nazran applied it to payment of part of the sum due to the Group on 10 December 2005 until the date this judgment is handed down at a rate 1 per cent above base rate from time to time during that period. No doubt Counsel can undertake the necessary calculations.
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The Honourable Mr Justice Picken:
Introduction
This is a claim by the Claimant, Mr Kiza Ramathami ('Mr Ramathami'), for damages for unlawful detention arising out of his administrative detention by the Defendant (the 'Secretary of State') between 14 August 2009 and 11 July 2011 (when Mr Ramathami was released on bail). The claim does not relate to the entirety of this period but only the period between 31 December 2010 and 11 July 2011. It is Mr Ramathami's case that in this approximately six month period it was or should have been apparent to the Secretary of State that there were insufficient prospects of his removal within a reasonable period. Accordingly, Mr Ramathami says, his continued detention was unlawful pursuant to the principles established in R v Governor of Durham Prison, ex parte Hardial Singh [1984] WLR 704 and/or by virtue of Article 5 of the European Convention on Human Rights.
The case began as a claim for judicial review which concerned the entire period of Mr Ramathami's detention, but was transferred out of the Administrative Court and into the general list by virtue of an order made by Cox J on 8 October 2013, Aikens LJ having granted permission to bring the judicial review claim on 24 October 2012.
The Secretary of State resists Mr Ramathami's claim. Her position is that at all times she acted lawfully, reasonably and proportionately in continuing to detain Mr Ramathami, in view of (i) his obstruction of her attempts to 'document' him and/or his failure to cooperate with those attempts, (ii) the fact that she was still in the process of taking steps to document him and remove him throughout the period, and (iii) Mr Ramathami's background and the risk that he might abscond or re-offend.
I am concerned at this stage only with the liability issue. The parties have agreed that quantum issues, should they arise, will be determined later.
Factual background
Preliminary
The factual background is largely common ground. To the extent that there are any factual disputes at all, Mr Chirico, counsel for Mr Ramathami, suggested in his skeleton argument that it is unlikely that those disputes need to be resolved given that they are peripheral to what Mr Chirico labelled the "significant point", namely whether the Secretary of State was entitled to continue to detain Mr Ramathami.
There are only a few exceptions to the factual common ground, as identified by Mr Chirico. The main point concerns a conversation between Mr Ramathami and an immigration officer on 16 September 2009, when the Secretary of State alleges that Mr Ramathami stated that he had been raised in Kenya rather than in Burundi. This is a matter which might potentially have more significance than other matters which Mr Chirico raised: a point concerning an interview which was arranged for Mr Ramathami on 30 November 2009, but which he did not attend; the nature of the instructions given to certain language analysts commissioned by the Secretary of State; and the circumstances in which an advertisement came to be placed in the Tanzanian press. These are matters which I shall address.
In addition, as will appear when I come on later to address the parties' respective submissions, there are differences between Mr Chirico and the Secretary of State's counsel, Miss Lisa Busch, in relation to some of the inferences or conclusions which are to be drawn from certain events. However, it is more convenient to deal with these matters after first relating the narrative. As to that narrative, in what follows I have drawn on the useful summary set out in the skeleton argument submitted by Miss Busch. I nonetheless make it clear that I have myself looked in detail at the relevant underlying documentation in order to verify that this summary is accurate. What follows also takes account of various points made by Mr Chirico in his skeleton argument, although Mr Chirico confirmed at the hearing that he had no difficulty with the accuracy of Miss Busch's summary.
I should, lastly by way of preliminary, record the fact that there were two witnesses in this case: Mr Ramathami himself, and Mr Jonathan Devereux, an Assistant Director in Criminal Casework, Immigration Enforcement at the Home Office. Mr Ramathami confirmed in examination-in-chief that he had made two witness statements (strictly he signed three but the third was the same as the second except that it had paragraph numbering). He was not cross-examined by Miss Busch. It was, however, agreed by Mr Chirico that it was accepted that it was open to Miss Busch to submit that, during the conversation on 16 September 2009, Mr Ramathami stated that he had been raised in Kenya rather than in Burundi, notwithstanding that this was not a matter which was explored with him in cross-examination. It was similarly accepted by Mr Chirico that no point would be taken on fairness grounds were I to find that Mr Ramathami made this statement despite the lack of cross-examination on the matter.
As for Mr Devereux, he came across as a witness who was both honest and fair. He acknowledged, in particular, that he did not have personal involvement with Mr Ramathami, and that his evidence was based on having looked at the documentation rather than on anything else. He explained that it was the Home Office's policy, as he put it, "to escalate witness statements to HEOs or above". This was why he, rather than Deborah Schofield (the 'case owner' in respect of Mr Ramathami's case) had made a witness statement. He went on to explain that other people whose names feature in the relevant documents (Anna Pitt, Alan Shepherd and Emma Hardy) had either left the Home Office or (in the case of Emma Hardy) had been seconded away from the Home Office, and that another person mentioned in the documents (Angela Kyle) still worked for the Home Office but in another directorate. His evidence was helpful in explaining certain of the documents and in gaining an appreciation of the likely thinking at the Home Office in relation to Mr Ramathami at various times. However, it had its limitations, inevitably, by virtue of Mr Devereux's lack of direct personal involvement in relation to Mr Ramathami's case, and I bear this in mind in considering the parties' submissions on the substantive issues which arise and which need to be determined for the purposes of these proceedings.
Narrative
Mr Ramathami claims to have been born on 15 June 1965 in Burundi. That, as Mr Chirico pointed out, has been Mr Ramathami's consistent position. It is not, however, a position which the Secretary of State accepts. She does not believe that Mr Ramathami is from Burundi. Her position is that the evidence indicates that he is not from Burundi but from Kenya or Tanzania.
Mr Ramathami claimed asylum in this country on 18 June 2001. This claim was refused by the Secretary of State on 2 November 2005 on the ground that Mr Ramathami was not from Burundi. He, therefore, appealed to the Asylum and Immigration Tribunal. His appeal was dismissed on 6 January 2006, the Immigration Judge (C. J. Deavin) not accepting that Mr Ramathami was from Burundi or that he had ever lived there and finding that Mr Ramathami had "not told the truth". The matter having been ordered to be reconsidered by Senior Immigration Judge D.K. Gill, the appeal was subsequently dismissed a second time, on 30 December 2006, Immigration Judge Shanahan concluding (in paragraph 50 of his reasons) that Mr Ramathami's "lack of any understanding of the Kirundi language" caused him to find hat he was not a national of Burundi.
Mr Ramathami's appeal rights became exhausted on 28 February 2007, following a refusal by Senior Immigration Judge Goldstein of an application for permission to appeal to the Court of Appeal. Mr Ramathami was, however, granted temporary admission into the United Kingdom on 30 March 2007, on condition that he reported each month to an identified police station. It appears that Mr Ramathami might have missed his first reporting appointment, judging from the 'Bail Summary' record which has been produced, but there is no issue that he reported as required in subsequent months, and Miss Busch did not suggest that his conduct in this period gives rise to any concerns about absconding.
Just under two years after being granted temporary admission, on 11 February 2009, Mr Ramathami was arrested whilst working illegally, using a false identity document, as a cleaner at a shopping centre in Stoke-on-Trent. He was subsequently convicted on 30 April 2009 of obtaining a pecuniary advantage by deception, fraud and failing to notify a change of circumstances, offences for which he was sentenced to 12 months' imprisonment, with a recommendation that he be deported at the conclusion of his sentence. In passing sentence, Mr Chirico pointed out, based on what is stated in Mr Ramathami's witness statement dated 12 March 2014 rather than on any transcript of the judge's sentencing remarks, the judge expressed sympathy with the "predicament he [Mr Ramathami] was in".
Mr Ramathami having been released from prison, he was then taken into immigration detention on 14 August 2009. In the meantime, after giving his consent on 8 July 2009, a language analysis was performed on Mr Ramathami on 30 July 2009. The purpose of this language analysis was to assist the Secretary of State in establishing Mr Ramathami's nationality. It was carried out by Sprakab, a company based in Sweden.
The report subsequently produced concluded that Mr Ramathami had a deficient knowledge of Burundi, noting that he used certain words typical of a variety of Swahili spoken in Kenya. Under the heading "General comments" the report stated that:
"[Mr Ramathami] speaks Swahili on the recording. He speaks the language to the level of a mother tongue speaker. He says he comes from Burundi. He speaks a variety of Swahili with certainty not found in Burundi. He speaks a variety of Swahili with certainty found in Kenya."
The report continued:
"The person uses English loanwords when he speaks Swahili, which is typical of varieties of Swahili spoken in Tanzania, Kenya and Uganda. In varieties of Swahili spoken in Burundi, French loanwords are used."
This last point was expanded upon later, the report stating how Mr Ramathami used words such as "because, brown, green, two thousand and maybe".
Mr Chirico criticised the report as being "clearly deficient". He also pointed out that it does not appear that the report compiler, somebody who was born and raised in Burundi, was asked about any possible countries of origin other than Burundi, Kenya and possibly Somalia. He questioned why the Secretary of State did not also ask Sprakab to consider Tanzania as a place of origin for Mr Ramathami. He suggested that this was especially odd given that the report states that "The language analysts originate from: Burundi respectively Kenya and Tanzania", and even if that is not right, the profile of the analyst identified refers to that person having "conducted research and field studies in dialectology in Swahili in Kenya, Tanzania, Burundi, Somalia and Uganda".
Mr Devereux was unable to assist on what instructions Sprakab was given in relation to Mr Ramathami's case. It cannot, therefore, be known what instructions were given. It is nonetheless to be noted that the report makes reference also to Tanzania and Uganda, as can be seen from the above-quoted passage. I am not clear, therefore, whether it can necessarily be inferred that Tanzania was not mentioned when instructions were given. Equally, it may be that no country was mentioned other than Burundi, that being the place where Mr Ramathami was claiming to have been born, and what Sprakab has done is address that question. It does not follow that just because Sprakab concluded that Mr Ramathami spoke "a variety of Swahili found with certainty in Kenya" (not in Burundi), so Sprakab must have been asked about Kenya. The reference to Kenya might simply have been the language analyst's own suggestion. In any event, it is not clear why this really matters since Mr Chirico accepted that what matters for present purposes is that the Secretary of State was entitled to treat the report as further evidence in support of her conclusion that Mr Ramathami was not from Burundi, and to proceed to attempt to document him as Kenyan.
Thereafter, on 15 September 2009, the Secretary of State made a Deportation Order with respect to Mr Ramathami. The accompanying letter setting out the 'Reasons for Deportation' ran to some thirteen pages and started by stating, in underlined words, "Claims to be Burundian, believed to be Kenyan". The letter went on to explain in detail why the Secretary of State had reached this conclusion. This included a summary of why Mr Ramathami's original claim for asylum had been rejected, which is worth setting out because it serves as a useful précis of the Secretary of State's position as to why she did not (and does not) accept that Mr Ramathami is a Burundian national:
"…
You are unable to speak either Kirundi or French, the official languages of Burundi;
You claim that Tutsi's and Hutu's are distinguishable from each other as they speak different languages (AIR question 15). However, it is noted that Kirundi is spoken by both Hutus and Tutsis – with similar dialects (Country of Origin Information Service (COIS) assessment April 2004 paragraph 2.6);
You stated that the people you feared were from the ruling party, however, you were then unable to state who the ruling party other than that they were Tutsi's (AIR question 12 and 13);
You were vague with regards to the distance of the border from your village (AIR question 37);
You could not state which country used to rule Burundi (AIR question 61 and 62);
You could not give details of any television stations in Burundi (AIR question 65);
You stated that the rainy season is July and lasts for 1-2 months (AIR questions 67 and 68), however it is known that June to September is a dry season …;
You claim you were unaware that Burundi had an airport (AIR questions 92-94);
Whilst you know the name of the National Anthem, you can not recite it (AIR questions 72-75);
You stated that Tanzania was to the West of your village and that your village was relatively close to Bujumbura however Tanzanian is to the East of Burundi;
…".
The letter continued:
"14. You have provided no evidence to support your claim to be a Burundian national and your claim in this respect has not been accepted to be accurate. Indeed, this view was supported by Immigration Judge's during the consideration of your past appeals (as outlined above) and also following your recent language analysis test in which it was concluded that you spoke a variety of Swahili with certainly not found in Burundi but with certainty found in Kenya.
15. Given all of these findings, it is therefore considered that you are not a national of Burundi but instead are a Kenyan national."
Mr Ramathami was served with the Deportation Order on 16 September 2009. It is on this occasion, at Brook House Immigration Removal Centre ('Brook House'), that Mr Ramathami is said by the Secretary of State to have told an immigration officer, an E. Farnes (I do not know whether this person is a man or a woman) that he had been born in Burundi but raised in Kenya rather than Burundi. Mr Ramathami disputes this. However, the 'GCID – Case Record Sheet' is very specific. It states:
"Called up sub to serve DO docs, Out of Country Appeal papers, Reason for Detention Letter, Bio-Data, and Kenyan Travel Doc Application Form. Sub claims he was born in Burundi but raised in Kenya when I told him about the language analysis. He wants to read through the bio-data and other docs before completing them for submission."
This is an entry which was filled in on 16 September 2009 itself, the day of the conversation between Mr Ramathami and the immigration officer.
There is then a further entry, this time by Deborah Schofield, for 18 September 2009, which states as follows:
"Contact with E Farnes at Brook House revealed that the subject attempted to account for the language analysis findings, which indicated he is probably Kenyan, by claiming to have been born in Burundi and raised in Kenya. …
I have highlighted to staff at Brook House that the subject has never made any reference to being in Kenya and was specifically asked during the asylum interview whether he had lived in any other countries to which he replied no. All of his claims referred to alleged life and events in Burundi. It is clear that deception has been employed at some stage and it is still considered, in the absence of any evidence to the contrary, that the subject is Kenyan.
Staff at Brook House have been asked to question the subject further about his time in Kenya in the hope that he provides some truthful information that we can conduct enquiries on. Once this information has been obtained, the staff are to highlight the discrepancies to the accounts he has previously provided and ask for comment."
The next entry, on the following day (19 September 2009), is from E. Farnes again. It states:
"Called up sub for interview yesterday afternoon but he did not show up. Will call him again today.
Sub turned up for i/v. He was calm. I asked about his bio-data, he said it is with his solicitor and will submit it to his caseworker once it's completed. When I asked him about his life in Kenya, he said he's never been there. I thought you were raised there you told me I said to him, he said no. He said he did not say that. But I asked you twice I said and you said yes you were raised in Kenya. He said he never said he was raised there. He said one can not hate his own country, if I am from Kenya I will say I am from Kenya but I am from Burundi he said. I asked if he still got family ties in Burundi, he said none. He said all he's got left there are very remote relatives and he has got no contact with them."
As I have indicated, this is an area where there is a factual dispute. Mr Ramathami disputes that he told the immigration officer that he was born in Burundi but had lived in Kenya. Mr Chirico submitted that it is more likely than not that Mr Ramathami did not say what he is recorded as having stated, observing that the entries (specifically the initial entry referring to the conversation) are very brief and not a very sound basis on which to base a finding that what is recorded as having been stated was actually stated. I do not agree. I do not see any reason to suppose that what is recorded in the first entry is anything other than accurate. It is difficult to see how the immigration officer could have been under any confusion as to what was being stated by Mr Ramathami. It is a very specific entry, however brief it was. I cannot see how the immigration officer can have misunderstood what was being said by Mr Ramathami. Further, it seems to me that the context described in the entry is important. There is absolutely no reason to doubt that the immigration officer told Mr Ramathami about what the language analysis report had determined. Given this, I can readily see that Mr Ramathami would have felt it necessary to offer an immediate explanation by way of rebuttal to the report. The fact that the immigration officer then relayed the conversation to Deborah Schofield seems to me to underline the likelihood that what Mr Ramathami is recorded as having stated was, indeed, what he stated.
The fact that Deborah Schofield pointed out that Mr Ramathami had not previously said anything about having lived in Kenya does not undermine the fact that the immigration officer was reporting that Mr Ramathami had stated that he had lived in that country. On the contrary, as I see it, if anything, it strengthens the conclusion that the immigration officer's understanding of what Mr Ramathami was saying was accurate because it is likely that the immigration officer would have indicated if he or she was in any doubt about what Mr Ramathami had had to say, yet there is nothing to show that the immigration officer expressed any such reservations at all. Indeed, as demonstrated by the subsequent entry relating to the further meeting which took place between the immigration officer and Mr Ramathami, when what he had said was explored further, the immigration officer was very clear about what he or she had been told. I regard it as most probable that Mr Ramathami did say what he is alleged to have said when he was first told about the language analysis report's conclusion, and that what he then did a couple of days later was deny that that was what he had stated because by that stage he had worked out that it would be better not to confuse by maintaining the line that he had lived in Kenya for a time, but instead to stick to the simpler position that he was born and raised only in Burundi.
The following month, on 7 October 2009 to be precise, Mr Ramathami was interviewed at Brook House. During the course of this interview, he gave incorrect answers to a number of the questions put to him about Burundi. Afterwards, he then refused to complete an Emergency Travel Document (an 'ETD') and also refused to permit his photograph to be taken. It is accepted on Mr Ramathami's behalf by Mr Chirico that, whilst there might be some disputes about Mr Ramathami's understanding of the processes being followed by the Secretary of State at this time and also as to the specific contents of some of the interviews taking place at about this time, these are not matters which need to be gone into in any detail at all because they are, as Mr Chirico put it in his skeleton argument, "peripheral to the core issues in this case".
As Mr Chirico put it, what matters is that Mr Ramathami accepts that, between August 2009 and December 2010, a number of steps were taken by the Secretary of State to interview or arrange interviews with him, and also that, as will appear, steps were taken to contact and pursue his documentation with the Tanzanian and Kenyan authorities. More particularly, the "significant point", again as Mr Chirico put it in his skeleton argument, is that, throughout this period, the Secretary of State considered that Mr Ramathami was engaged, as it is put in the Defence served in these proceedings at paragraph 23, in an "on-going attempt […] to obstruct the process of his deportation".
Returning to the chronology, the next thing which happened, or more accurately did not, in the event, happen, is that the Secretary of State arranged for Mr Ramathami to be interviewed by a visiting delegation from several East African countries. This interview was due to take place on 30 November 2009, but the interview did not happen. This was because Mr Ramathami refused to leave Brook House to attend the interview. This is an aspect which Mr Chirico explored with Mr Devereux, or at least tried to explore. He asked Mr Devereux to confirm that, whilst Brook House is the detention centre which is typically used when people are going to be deported via Gatwick Airport, the detention centre where the interview was due to take place, Colnbrook Immigration Removal Centre, was the Heathrow Airport equivalent. Mr Devereux was unable to confirm this, but it was, in any event, Mr Chirico's submission that it was because Mr Ramathami was concerned about being taken to this other detention centre that he was unwilling to attend to be interviewed, not because of anything else. I accept that this probably was the position. In fairness, Miss Busch did not place a great deal of reliance on this episode.
Miss Busch did, however, point out how, throughout the whole period of his detention, Mr Ramathami refused to provide the Secretary of State with any information concerning his nationality beyond his assertion that he was Burundian. She did this when going on in the story to highlight how the following February the Secretary of State made a request that the Kenyan authorities interview Mr Ramathami. To this end, several months later, on 20 May 2010, Mr Ramathami was taken to the Kenyan High Commission. This was so that he could be interviewed for a travel document. The Kenyan authorities, however, declined to issue Mr Ramathami with such a document because of his insistence during the interview which took place that he was not from Kenya but was from Burundi.
A month later, on 24 June 2010, Mr Ramathami was then interviewed by an official from Burundi. That official, however, did not accept that that was the case, taking the view that it was likely that he came instead from the East African coast, with Tanzania being mentioned. This interview was conducted in Swahili, as Mr Ramathami had stated that "he did not know any Kirundi word".
This led the Secretary of State, on 7 July 2010, to make a request to the Foreign and Commonwealth Office (the 'FCO') to conduct inquiries with the Tanzanian authorities, asking those authorities, in particular, to check their passport archives for any trace of Mr Ramathami. That same day, Mr Ramathami was interviewed by an officer of the Secretary of State, who informed him of the conclusions reached by the Burundi officials. He nevertheless continued to maintain that he was from Burundi. He was again seen on 11 July 2010, but refused to answer the questions put to him by the officer. Some weeks after this, on 6 August 2010, the Secretary of State informed Mr Ramathami that he would no longer be permitted to undertake paid work at Brook House because of his lack of cooperation with the removal process.
Then, in September and October 2010, the Secretary of State made further contact with officers in Tanzania and Kenya with respect to Mr Ramathami.
In addition, in early October 2010, an East African countries seminar was held in Kigali. As part of this, Mr Ramathami's case was discussed as a 'real life' case study. The suggestion was made that Mr Ramathami should be interviewed by an organisation known as 'British Africans in Government', and that Mr Ramathami should also have his fingerprints compared against Kenyan records. I should explain that 'British Africans in Government' was apparently a collection of people within the British Government. It was not, as Mr Devereux suggested when asked in cross-examination what he knew about the group, some other type of organisation. In fairness to Mr Devereux, he clearly knew nothing about 'British Africans in Government'. Nothing turns on this. Nor does anything turn on the fact that, as I understand it, the group was subsequently disbanded.
All that matters, it seems to me, is that, in line with what had been suggested in the Kigali seminar, wet fingerprints were obtained and submitted to the Kenyan authorities, and Mr Ramathami was interviewed by a representative of 'British Africans in Government' on 21 December 2010. The representative, Mr Robert Jones, slightly oddly referring to himself not as a representative of 'British Africans in Government' but as a representative of 'Black Africans in Government', concluded that it was unlikely that Mr Ramathami was a Burundian national. He explained that he "formed this conclusion due to the absence of any emotion when recounting the events that lead [sic] to his alleged exodus from Burundi", adding that he (Mr Jones) was "sure the scale of violence, and claimed genocide, would likely leave residual mental or emotional trauma". Mr Jones also observed that Mr Ramathami was "far more interested in not giving different answers to ones previously provided to the HO".
I should mention that, in the meantime, on 12 October 2010, the Tanzanian authorities had notified the Secretary of State that they were agreeable to conducting checks with respect to Mr Ramathami, and the Secretary of State's officers chased the FCO for a response in this connection in November and December 2010.
Throughout this period and, in fact, beyond Mr Ramathami had sought, but been refused, bail on numerous occasions. Bail was refused again on 27 January 2011, the Immigration Judge taking the view that the evidence demonstrating that Mr Ramathami was not from Burundi was clear, and that his ongoing detention was largely his own doing. It is the Secretary of State's position, which is essentially not disputed by Mr Ramathami (through Mr Chirico), that at the same time Mr Ramathami continued to refuse to co-operate with the removal process, and to maintain that he was from Burundi.
In April 2011, the Secretary of State placed an advertisement concerning Mr Ramathami in the Tanzanian press. This was done because placing an advertisement had apparently achieved a successful result on a previous occasion. Mr Chirico made the point, both when cross-examining Mr Devereux and in submissions to me, that there is very little known about this advertisement. It is not known what the advertisement stated, nor is it known in what newspaper it appeared. It is also unclear what the contractual arrangements were in respect of its placement. Nothing but a few emails discussing the possibility of advertising has been disclosed. This, Mr Chirico submitted, is unsatisfactory. I have some sympathy with this submission. However, as Mr Chirico sensibly acknowledged, there is no reason to doubt that an advertisement was placed. It is equally clear that nothing came of the advertisement. This is really what matters, although Mr Chirico would probably go further and suggest that it was most unlikely that anything was ever going to come of the exercise. This, he submitted, demonstrates that by this juncture the Secretary of State had essentially run out of any more ideas as to how to resolve the problem of 'documenting' Mr Ramathami.
This is a matter which I shall address later when dealing with the parties' respective submissions. However, the same submission is made by Mr Chirico as regards the fact that officers contacted the FCO in June 2011 to follow up the inquiries which had been made with the Kenyan and Tanzanian authorities. Mr Chirico submitted that these were inquiries which had long been outstanding and were, in effect, going nowhere by this stage.
The same applies, in Mr Chirico's submission, to the fact that, on 14 June 2011, the Secretary of State obtained a copy of the list of his visitors whilst in detention with a view to examining it for evidence as to his nationality, only to find that the majority of his visitors were from welfare groups. It applies also, Mr Chirico suggested, to the fact that, in early July 2011, shortly before Mr Ramathami's release from detention, a police officer visited the address where a friend of his allegedly resided, only to be told by the person to whom he spoke claimed not to recognise Mr Ramathami either by name or photograph. This visit followed a further interview with Mr Ramathami, which took place on 4 July 2011. On this occasion, as on previous occasions, Mr Ramathami continued to claim that he was from Burundi and to refuse to assist in the documentation process with respect to any other country. He did, however, take down the contact details for the Tanzanian High Commission.
In the meantime, as pointed out by Mr Chirico, in a detention review which appears to have been undertaken on about 3 June 2011, Deborah Schofield wrote this:
"Proposal
? Release.
I have assessed this case in accordance with current criteria (including the presumption in favour of release and length of detention to date) and conclude that the subject does present a risk of absconding given the extensive deception utilised to date. However, the subject has now reached 24 months in detention and it is unclear when removal will be effected as nationality is still unconfirmed and efforts to establish such have thus far failed. Initiatives requested are either on hold or not receiving a response and it is therefore unclear when/how removal may be effected.
There is no evidence of any risk of harm to the public other than those inherent in the nature of the offences he has committed, he is not subject to MAPPA and his licence has expired."
Mr Chirico submitted that this is significant because Deborah Schofield, as the 'case owner', was effectively in this detention review recognising, he suggested, that the time may have come for Mr Ramathami to be released.
What followed this was that Deborah Schofield's superior, Emma Hardy (an HEO), referred the matter to her superior, Angela Kyle (Mr Devereux's predecessor as Assistant Director). The relevant exchanges took place on 3 June 2011, and entail Emma Hardy asking Angela Kyle the following question:
"… With no prospect of removal within a reasonable timeframe do you agree to maintain detention whilst a release referral is submitted to the Strategic Director?"
Angela Kyle responded:
"I agree. The risk of absconding outweighs the presumption in favour of liberty pending referral to the Strategic Director to consider whether the risk can be mitigated through robust contact management."
The Strategic Director's decision was to maintain Mr Ramathami's detention. This is reflected in the detention review for the following month in a passage coming after a reference to the fact that an advertisement had been placed in the Tanzanian press which raised the possibility that "a similar approach in the Kenyan press would be possible", albeit then saying this:
"there was concern expressed about this type of approach and further input was sought from legal advisors. An update in this respect is awaited."
This was followed by the following:
"Progress since last review
Continued detention was authorised by a Director on 03 June 2011 pending referral to the Strategic Director for consideration of contact management. A referral was submitted to the Strategic Director who responded on 06 June 2011 as follows:
'If we were to release this individual deportation would not be possible given his compliance and there is a high risk of absconding. He would also re-offend given he presumably has no assets and no means of living. He should remain detained. The length of his detention is entirely associated by his lies and deceit re nationality and identity, matters for which he was convicted in the first place. Strenuous efforts have been made to establish the identity and nationality and the result of some of the checks is still awaited. We should continue to pursue those. We should also consider if there is evidence to prosecute him for obstructing under Section 35."
The Strategic Director's decision was followed a few days later by Mr Ramathami being refused bail on 10 June 2011, the Judge remarking that he had been found to be lacking in credibility in his asylum claim and had a poor immigration history, including the use of deception. He added:
"I am satisfied that the appellant has a long history of non-co-operation in respect of the process of obtaining a travel document. Although the appellant has, on occasion, attended interviews arranged by the UKBA or spoken to Embassy representatives on the telephone, he has failed to provide useful information in order to establish his identity and nationality. It is not credible that the appellant could have left Burundi at the age of 35, in 2001, but be unable to provide the names of any friends or family there … .
Despite having been in the UK since 2001 he is unable to provide a private address or a surety which shows a lack of ties in the community or others who are prepared to come forward to support the appellant. I draw an adverse inference as a result. The only bar to removal is obtaining a travel document and I am not satisfied that any conditions I could impose would secure his co-operation".
Mr Ramathami was, however, released from detention, on bail, on 11 July 2011, subject to electronic tagging and reporting requirements, hence the fact that the present claim does not relate to any later period. He has remained on bail ever since, recently, on 23 June 2015, being told by the Secretary of State that she has decided to refuse leave to remain (with an in-country right of appeal).
The law
Just as there was little between the parties in relation to the facts, so the parties were largely agreed as to the relevant legal principles. It emerged at the hearing, however, that there was not complete agreement, and both Mr Chirico and Miss Busch made fulsome reference to authority.
The difference between Mr Chirico and Miss Busch is in relation to the topic of failure to co-operate. I was informed by both counsel that the point which divides them is novel. It is a point which, in the circumstances, I must obviously seek to resolve. Whether or not it is a point which matters on the facts of the present case is, however, a matter to which I shall have to return when discussing the parties' respective submissions.
I begin by addressing matters which I understand remain uncontroversial.
Statutory framework
The starting point is the Immigration Act 1971, specifically section 3(5)(a) which provides that a person who is not a British citizen is liable to deportation from the United Kingdom if the Secretary of State deems his or her deportation to be conducive to the public good. Section 3(6) then goes on to provide that, without prejudice to the operation of section 3(5), a person who is not a British citizen shall also be liable to deportation from this country if, after he or she has attained the age of 17, he or she is convicted of an offence for which he or she is punishable with imprisonment and on his or her conviction is recommended for deportation by a court empowered by the 1971 Act to make such a recommendation.
Section 5(1) then states that, where a person is under sections 3(5) or 3(6) liable to deportation, then, subject to the following provisions of that Act, the Secretary of State may make a deportation order against him:
"that is to say an order requiring him to leave and prohibiting him from entering the United Kingdom; and a deportation order against a person shall invalidate any leave to enter or remain in the United Kingdom given before the order is made or while it is in force".
This is followed by section 5(2), which provides that a deportation order against a person may at any time be revoked by a further order of the Secretary of State, and shall cease to have effect if he becomes a British citizen.
Of particular significance in the present case is Schedule 3 to the 1971 Act, paragraph 2 of which provides, in part, as follows:
"(2) Where notice has been given to a person in accordance with regulations under section 105 of the Nationality, Immigration and Asylum Act 2002 (notice of decision) of a decision to make a deportation order against him, and he is not detained in pursuance of the sentence or order of a court, he may be detained under the authority of the Secretary of State pending the making of the deportation order.
(3) Where a deportation order is in force against any person, he may be detained under the authority of the Secretary of State pending his removal or departure from the United Kingdom (and if already detained by virtue of subparagraph (1) or (2) above when the order is made, shall continue to be detained unless he is released on bail or the Secretary of State directs otherwise)."
Hardial Singh principles
Both paragraphs 2(2) and 2(3) of Schedule 3 are concerned with what is sometimes called 'administrative' detention by the Secretary of State. It was the exercise of the Secretary of State's 'administrative' power to detain which was under consideration in Hardial Singh. In that case, Woolf J (as he then was) stated as follows at page 706D-G:
"Although the power which is given to the Secretary of State in paragraph 2 [of Schedule 3 to the 1971 Act] to detain individuals is not subject to any express limitation of time, I am quite satisfied that it is subject to limitations. First of all, it can only authorise detention if the individual is being detained in one case pending the making of a deportation order and, in the other case, pending his removal. It cannot be used for any other purpose. Secondly, as the power is given in order to enable to machinery of deportation to be carried out, I regard the power of detention as being implicitly limited to a period which is reasonably necessary for that purpose. The period which is reasonable will depend upon the circumstances of the particular case. What is more, if there is a situation where it is apparent to the Secretary of State that he is not going to be able to operate the machinery provided in the Act for removing persons who are intended to be deported within a reasonable period, it seems to me that it would be wrong for the Secretary of State to seek to exercise his power of detention.
In addition, I would regard it as implicit that the Secretary of State should exercise all reasonable expedition to ensure that the steps are taken which will be necessary to ensure the removal of the individual within a reasonable time."
As both Mr Chirico and Miss Busch pointed out, the Hardial Singh principles were approved by the Court of Appeal in R (I) v Secretary of State for the Home Department [2002] EWCA Civ 888, in which Dyson LJ (as he then was) stated as follows at [46]:
"There is no dispute as to the principles that fall to be applied in the present case. They were stated by Woolf J in re Hardial Singh [1984] 1 WLR 704, 706D in the passage quoted by Simon Brown LJ at paragraph 9 above. This statement was approved by Lord Browne-Wilkinson in Tan Le Tam v Tai A Chau Detention Centre [1997] AC 97, 111A-D … . In my judgment, [Counsel for the Secretary of State] correctly submitted that the following four principles emerge:
i) The Secretary of State must intend to deport the person and can only use the power to detain for that purpose;
ii) The deportee may only be detained for a period that is reasonable in all the circumstances;
iii) If, before the expiry of the reasonable period, it becomes apparent that the Secretary of State will not be able to effect deportation within that reasonable period, he should not seek to exercise the power of detention;
iv) The Secretary of State should act with the reasonable diligence and expedition to effect removal."
I shall return shortly to what Dyson LJ went on to say immediately after identifying these principles. For the moment, I would merely observe that R (I) was approved by the Supreme Court in R (Lumba) v Secretary of State for the Home Department [2011] UKSC 12, [2012] 1 AC 245.
The first Hardial Singh principle
As to the first of the Hardial Singh principles (as summarised by Dyson LJ in R (I)), Mr Chirico emphasised that it is concerned, and only concerned, with a detention power which is exercised alongside an intention to deport the person concerned.
This was made abundantly clear by Baroness Hale in R (Lumba) at [198]:
"… The statutory power to detain under paragraph 2(2) and (3) of schedule 3 to the Immigration Act 1971 (quoted by Lord Dyson at paragraph 4 of his judgment) is, on its face, very broad. Provided that the detainee has been notified of a decision to make a deportation order against him, and he is not detained in pursuance of the sentence or order of a court, he may be detained pending the actual making of the order (para 2(2)). Once the deportation order is made, he may be detained pending his removal or departure from the United Kingdom (para 2(3)). However, since at least the case of R v Governor of Durham Prison, Ex p Hardial Singh [1984] 1 WLR 704, it has been recognised that there are limitations implicit in these powers: the detention must be for the statutory purpose of making or implementing a deportation order and for no other purpose; hence it cannot be continued once it becomes clear that it will not be possible to effect deportation within a reasonable period; the Secretary of State must act with reasonable diligence and expedition to bring this about; and in any event the detention cannot continue for longer than a period which is reasonable in all the circumstances."
As Mr Chirico observed, the Secretary of State has a separate power to secure a person's detention for the purposes of punishing that person for non-compliance. This is to bring a prosecution pursuant to section 35 of the Asylum (Treatment of Claimants etc.) Act 2004, but that is not an administrative sanction and as such is not comparable with the powers contained in paragraphs 2(2) and (3) of Schedule 3 to the 1971 Act.
The second, third and fourth Hardial Singh principles: their interrelationship
As to the second and third of the Hardial Singh principles, both Mr Chirico and Miss Busch referred to what Dyson LJ went on to say in R (I) after he had summarised the principles at [46].
Dyson LJ continued in the next paragraph, [47], by giving the following explanation:
"Principles (ii) and (iii) are conceptually distinct. Principle (ii) is that the Secretary of State may not lawfully detain a person 'pending removal' for longer than a reasonable period. Once a reasonable period has expired, the detained person must be released. But there may be circumstances where, although a reasonable period has not yet expired, it becomes clear that the Secretary of State will not be able to deport the detained person within a reasonable period. In that event, principle (iii) applies. Thus, once it becomes apparent that the Secretary of State will not be able to effect the deportation within a reasonable period, the detention becomes unlawful even if the reasonable period has not yet expired."
He then added at [48]:
"It is not possible or desirable to produce an exhaustive list of all the circumstances that are or may be relevant to the question of how long it is reasonable for the Secretary of State to detain a person pending deportation pursuant to paragraph 2(3) of Schedule 3 to the Immigration Act 1971. But in my view they include at least: the length of the period of detention; the nature of the obstacles which stand in the path of the Secretary of State preventing a deportation, the diligence, speed and effectiveness of the steps taken by the Secretary of State to surmount such obstacles; the conditions in which the detained person is being kept; the effect of detention on him and his family; the risk that if he is released from detention he will abscond; and the danger that, if released, he will commit criminal offences."
Mr Chirico observed that it is commonsense that the "diligence, speed and effectiveness of the steps taken by the Secretary of State" to which Dyson LJ referred in the above-quoted passage are a material consideration, and that if there is a failing in this connection, then any period of detention lengthened by it will, or at least may, be unreasonable. That seems to me to be right, and was not disputed by Miss Busch.
I agree also that it may result in a separate ability on the part of the person affected to complain that the Secretary of State has not abided by the fourth Hardial Singh principle – the requirement that the Secretary of State should act with reasonable diligence and expedition. Mr Chirico submitted in his skeleton argument that if the Secretary of State were to be shown to have acted without reasonable diligence and expedition at an earlier stage of detention, she may not be able to rely upon the possibility of belated action in justifying a further period of detention. That again seems to me to be right, and again was not disputed by Miss Busch. It is also in line with the approach which was adopted in R (Sino) v Secretary of State for the Home Department [2011] EWHC 2249 (Admin). In that case, Mr John Howell QC (sitting as a Deputy High Court Judge) said this at [69]:
"On behalf of the Claimant Ms Harrison was minded to accept that the Secretary of State's failure to act with reasonable diligence and expedition to effect removal would not make detention unlawful unless that had had an effect on the length of an individual's detention. Unsurprisingly perhaps Mr Thomann on behalf of the Secretary of State agreed. In my judgment this may well be the case. But an earlier failure to act with reasonable diligence and expedition may well mean that it is reasonable to expect that the Secretary of State should act thereafter with greater diligence and expedition than she might otherwise reasonably be expected to do. Thus, even if that failure does not itself make detention unlawful subsequently, it may affect what a reasonable period in such a case would be."
The third Hardial Singh principle
In relation to the third of the Hardial Singh principles, Mr Chirico relied on an earlier passage in R (Sino), at [64], as follows:
"In my judgment the third Hardial Singh principle is indeed important if individuals are to be protected against unjustifiable detention by the executive. Those responsible for detaining individuals need to give attention to it. It is never sufficient merely to consider whether the time for which an individual has been detained has ceased to be reasonable. It is also always necessary to consider what the prospects for removing an individual are and whether, given any period which that individual has already spent in detention, there is a realistic prospect that that individual will be deported within a reasonable time."
Mr Chirico submitted that, although there is no mandatory requirement that the Secretary of State should identify a finite period within which removal will take place, the longer the detention goes on, the greater the degree of "certainty and proximity of removal" is required in order to justify continuation of the detention.
As Richards LJ put it in R (MH) v Secretary of State for the Home Department [2010] EWCA Civ 1112 at [64]:
"… the approach of Toulson LJ in A (Somalia) seems to me to be particularly helpful when considering the issues raised here about the prospect of securing the claimant's removal to Somaliland. As Toulson LJ said, there must be a 'sufficient prospect' of removal to warrant continued detention, having regard to all the other circumstances of the case … . What is sufficient will necessarily depend on the weight of the other factors: it is a question of balance in each case."
Richards LJ continued at [65]:
"I do not read the judgment of Mitting J in R (A and Others) v Secretary of State for the Home Department as laying down a legal requirement that in order to maintain detention the Secretary of State must be able to identify a finite time by which, or period within which, removal can reasonably be expected to be effected. That would be to add an unwarranted gloss to the established principles. In my view Mitting J was not purporting to do that but was simply asking himself the questions 'by when?' and 'on what basis?' for the purposes of his own consideration of the case before him. Of course, if a finite time can be identified, it is likely to have an important effect on the balancing exercise: a soundly based expectation that removal can be effected within, say, two weeks will weigh heavily in favour of continued detention pending such removal, whereas an expectation that removal will not occur for, say, a further two years will weigh heavily against continued detention. There can, however, be a realistic prospect of removal without it being possible to specify or predict the date by which, or period within which, removal can reasonably be expected to occur and without any certainty that removal will occur at all. Again, the extent of certainty or uncertainty as to whether and when removal can be effected will affect the balancing exercise. There must be a sufficient prospect of removal to warrant continued detention when account is taken of all other relevant factors. Thus in A (Somalia) itself there was 'some prospect of the Home Secretary being able to carry out enforced removal, although there was no way of predicting with confidence when this might be' (per Toulson LJ at para 58); and that was held to be a sufficient prospect to justify detention for a period of some four years when regard was had to other relevant factors, including in particular the high risk of absconding and of serious re-offending if A were released."
He then continued at [66] as follows:
"Sales J committed no error by asking himself first whether there was 'some prospect' of removal: he referred in that connection to R (Khadir) v Secretary of State for the Home Department, where the focus was on the existence rather than the exercise of the power of detention, but the same language is to be found, as I have said, in A (Somalia). 'Some' prospect in this context plainly means a realistic prospect, and I do not read Sales J's judgment as proceeding on any other basis. Of course, A (Somalia) shows that the court needs to go on to consider the degree of certainty or uncertainty affecting the prospect of removal and to ask itself whether the prospect is sufficient to warrant detention in all the circumstances of the case; but it seems to me that Sales J had that point in mind as well. At para 86 of his judgment he set out the relevant passage in A (Somalia); and at para 98, citing the judgment of Simon Brown LJ in I (Afghanistan), he referred to the range of circumstances to be taken into account in determining the reasonableness of a period of detention, including '[t]he likelihood or otherwise that removal will in fact prove possible'. Reading his judgment as a whole I am satisfied that he carried out the requisite balancing exercise, taking the likelihood or otherwise of removal properly into account."
In short, what is required is a prospect which is realistic or sufficient, descriptions which are meant, in this context at least, to amount to the same thing. Mr Chirico and Miss Busch were ultimately agreed about this. As Miss Busch put it in her closing submissions, by reference to certain evidence which Mr Devereux had given, what would not be appropriate would be for the Secretary of State to "operate on the basis of hope"; there must instead be a "legitimate" basis for considering that removal is feasible. I emphasise that the quotation marks reflect the evidence given by Mr Devereux and, as such, should not be regarded as further muddying the waters as to what is required. Mr Devereux's evidence does nonetheless seem to me to be consistent with the need that there be a realistic or sufficient prospect of removal. I certainly did not understand him to have been suggesting that the Secretary of State purports to operate by reference to some lesser standard of removal prospects.
Absconding, commission of offences and lack of co-operation
As made clear by Dyson LJ in R (I) at [48], it is neither possible nor desirable to produce an exhaustive list of all the circumstances which are relevant to the question of how long it is reasonable to detain pending deportation, the risk of absconding and the risk that criminal offences will be committed if the person is released from detention are circumstances which it is legitimate for the Secretary of State to take into account.
I was referred in this context by Miss Busch to Toulson LJ's judgment in R (A) v Secretary of State for the Home Department [2007] EWCA Civ 804 at [54]:
"I accept the submission on behalf of the Home Secretary that where there is a risk of absconding and a refusal to accept voluntary repatriation, these are bound to be very important factors, and likely often to be decisive factors, in determining the reasonableness of a person's detention, provided that deportation is the genuine purpose of the detention. The risk of absconding is important because it threatens to defeat the purpose for which the deportation order was made. The refusal of voluntary repatriation is important not only as evidence of the risk of absconding, but also because there is a big difference between administrative detention in circumstances where there is no immediate prospect of the detainee being able to return to his country of origin and detention in circumstances where he could return there at once. In the latter case the loss of liberty involved in the individual's continued detention is a product of his own making."
I was also referred to the next paragraph, [55]:
"A risk of offending if the person is not detained is an additional relevant factor, the strength of which would depend on the magnitude of the risk, by which I include both the likelihood of it occurring and the potential gravity of the consequences. Mr Drabble submitted that the purpose of the power of detention was not for the protection of public safety. In my view that is over-simplistic. The purpose of the power of deportation is to remove a person who is not entitled to be in the United Kingdom and whose continued presence would not be conducive to the public good. If the reason why his presence would not be conducive to the public good is because of a propensity to commit serious offences, protection of the public from that risk is the purpose of the deportation order and must be a relevant consideration when determining the reasonableness of detaining him pending his removal or departure."
In the same case, Keene LJ said this at [79]:
"I am not persuaded by Mr Giffin that the refusal by this detainee to return to Somalia voluntarily when it was possible to do so is some sort of trump card. On this I see the force of what was said by Dyson LJ in R (I) at paragraph 52, namely that the main significance of such a refusal may often lie in the evidence it provides of a likelihood of the individual absconding if released. After all, if there is in a particular case no real risk of his absconding, how could detention be justified in order to achieve deportation, just because he has refused voluntary return? The Home Office in such a case, ex hypothesi, would be able to lay hands on him whenever it wished to put the deportation order into effect. Detention would not be necessary in order to fulfil the deportation order. Having said that, I do not regard such a refusal to return as wholly irrelevant in its own right or as having a relevance solely in terms of the risk of absconding. It is relevant that the individual could avoid detention by his voluntary act. But I do not accept that such a refusal is of the fundamental importance contended for by the Secretary of State."
In addition, Mr Chirico highlighted Mr Howell QC's observations on the question of offending in R (Sino), specifically the following passage at [61]:
"Obviously the type of period after which it is increasingly difficult to justify any continuing detention will depend not merely on the risk of an individual absconding and the likelihood of his re-offending. It will also depend, for example, on the nature of any likely future offences and their consequences and how imminently any removal can confidently be predicted. It is unlikely, therefore, that there is a single period which is applicable in all cases with only certain specific exceptions. It is not for me to lay down any general guidelines. In approaching the application of the second Hardial Singh principle in this case, therefore, I have accordingly borne in mind what has been said in such other cases. But I have also borne in mind that the facts of the Claimant's case are not identical to the facts of any other case and what may (or may not) constitute a reasonable period of detention pending deportation needs to be considered carefully by reference to the specific facts of his case."
As I understood it, there was actually no issue about the risk of absconding nor about the risk of re-offending, specifically in the case of the latter the need to consider the nature of any previous offending to include the seriousness of that offending. As I shall come on to show when I address the parties' respective submissions, although Miss Busch does not suggest that Mr Ramathami's previous offences as such make him a risk to the public, her position and the position of the Secretary of State is nonetheless that the fact that Mr Ramathami previously chose to work illegally with a false identity demonstrates that there is a risk of absconding and, along with that risk, the associated risk that he might again work illegally with a false identity.
There was, however, an issue between Mr Chirico and Miss Busch in relation to other aspects of the passages in the judgments of Toulson LJ and Keene LJ in R (A). I refer here to what in certain of the authorities has been described as a 'failure to co-operate'. What became clear during the course of Mr Chirico's opening submissions was that he seeks to distinguish between what may be described as two different types of 'passive' failure to co-operate, on the one hand, and what may be described as 'active' failure to co-operate, on the other. As it developed during his opening submissions and then in the course of his closing submissions, Mr Chirico's submission became that there is, as he put it, a conceptual difference between various types of 'passive' behaviour which obstruct the Secretary of State in her efforts to remove a person, and 'active' behaviour which causes the Secretary of State to have to do things which result in delay and elongation of the person's detention. Mr Chirico submitted that, whereas 'active' behaviour which itself causes delay is a matter to which it is appropriate that weight be given, indeed substantial weight depending on the facts of a given case, 'passive' behaviour of all types should only ever be afforded limited weight.
In support of this submission, Mr Chirico relied heavily on a section of Lord Dyson's judgment in R (Lumba) headed "Non-co-operation with return". I need, in the circumstances, to make fairly extensive reference to this section. It starts with the following at [122]:
"The most common examples of non-cooperation are (i) a refusal by a person who does not have a valid passport to cooperate with the obtaining of travel documents to enable him to return and (ii) a person's refusal to avail himself of one of the Home Office schemes by which he may leave the United Kingdom voluntarily. Most of the discussion in the cases has centred on (ii)."
It is apparent, therefore, that Lord Dyson was here dealing with what Mr Chirico described as 'passive' behaviour, and not with 'active' behaviour of the type to which Mr Chirico was referring in the submission which he ultimately came to make. Indeed, in his closing submissions, Mr Chirico expressly acknowledged that this was the case.
I interject to observe that Mr Chirico explained that he felt constrained to make this acknowledgment, despite initial efforts to the contrary, by virtue of the fact that in R (Sino) Mr Howell QC quite clearly, and correctly in my view, approached matters on the basis that in the section headed "Non-co-operation with return" in R (Lumba) Lord Dyson was not dealing with 'active' behaviour. Mr Howell QC stated this at [50]:
"The Supreme Court also considered in Lumba the significance of an individual's own conduct in contributing to the length of his detention in two respects: (i) delays occasioned by any legal proceedings that an individual brings; and (ii) delays occasioned by his refusal to return to his country of origin voluntarily. The Supreme Court did not specifically address other ways in which an individual's own conduct may contribute to the length of his detention. Specifically it did not consider how a refusal by an individual without a valid passport to co-operate in obtaining travel documents to enable him to return should be treated when assessing compliance with the second Hardial Singh principle. Nor did it consider what significance should be given in that connection to efforts an individual may make actively to obstruct the process of obtaining an ETD by supplying false or misleading information."
The first of the types of conduct to which Mr Howell QC was referring in this passage (at (i)) was what was addressed by Lord Dyson in an earlier section of his judgment in R (Lumba), starting at [111]. It is immaterial for present purposes. As to the second type of conduct, in Mr Howell QC's category (ii), this equates to Lord Dyson's own category (ii) in R (Lumba). I leave aside for present purposes the sentence which begins with "Specifically it did not consider" since this concerns whether different weight should be afforded to different types of 'passive' behaviour. This is a matter to which I shall return in a moment. What matters for present purposes, and which is evident from the sentence beginning "Nor did it consider" with its reference to a person "actively" obstructing, is that Mr Howell QC was making the point that Lord Dyson had only been dealing with 'passive' behaviour, as Mr Chirico would characterise it.
The fact that Mr Howell QC did not regard 'active' behaviour as having been addressed by Lord Dyson in R (Lumba) is further underlined by the fact that Mr Howell QC then went on to address the situation identified by him as (ii) in [50] by saying this at [53]:
"In relation to delays occasioned by an individual's refusal to return to his country of origin voluntarily where that is possible, the Supreme Court accepted that such a refusal may be relevant if a risk of absconding can properly be inferred from that refusal. The significance of such a refusal may also vary depending on whether there are any outstanding legal challenges to his deportation. Where there are not, however, as Lord Dyson put it at [128], 'the fact that the detained person has refused voluntary return should not be regarded as a "trump card" which enables the Secretary of State to continue to detain until deportation can be effected, whenever that may be...if the refusal of voluntary return has any relevance in such cases even if a risk of absconding cannot be inferred from the refusal, it must be limited."
He then referred, at [54], to there being an "apparent tension" between the Supreme Court's approach in relation to the two categories ((i) and (ii)) which he had identified in [50], observing that, whereas "a period of detention is largely to be disregarded in the case of a hopeless appeal", "it should not be similarly disregarded merely because it could have been brought to an end by a detainee agreeing to leave voluntarily", before, critically as I see it, continuing:
"How then should a refusal by an individual without valid passport to co-operate in obtaining travel documents to enable him to return be treated when assessing compliance with the second Hardial Singh principle and what significance should be given to efforts that he may make to frustrate their acquisition by supplying false or misleading information?"
Again leaving aside the distinction for the moment between the two different types of 'passive' behaviour which Mr Chirico's submission also makes, what seems to me to be abundantly clear is that Mr Howell QC, again quite rightly in my view, is here saying that Lord Dyson in R (Lumba) was not dealing with 'active' behaviour. This conclusion is further reinforced by what Mr Howell QC went on to say at [56]:
"In my judgment the significance of a detainee's own conduct is inevitably sensitive to the facts of the particular case, like all other matters that are relevant to the application of the Hardial Singh principles. The Supreme Court may have rejected any exclusionary rule that generally required all delay occasioned by a detainee's own conduct to be disregarded. But equally it did not adopt any exclusionary rule that generally required the contribution that a detainee's own conduct may make to the length of his own detention to be disregarded. Thus in my judgment it is likely, other things being equal, that a reasonable period for the detention of an individual who does not co-operate in obtaining a travel document may be well be longer than it will be in the case of individual who co-operates. Similarly it is likely, other things being equal, that a reasonable period may be still longer in the case of an individual who seeks to frustrate efforts to obtain one by supplying false or misleading information (leading to false hopes of obtaining, and unsuccessful attempts to obtain, a travel document). Nonetheless, although an individual who has only himself to blame for his detention being prolonged by virtue of his own conduct may not attract sympathy, in my judgment his conduct cannot be regarded as providing a trump card justifying his detention indefinitely. The Secretary of State may not detain a person pending deportation for more than a reasonable period even in the case of an individual who is deliberately seeking to sabotage any efforts to deport him. …".
I respectfully agree with everything which Mr Howell QC had to say in this passage. As I shall now endeavour to explain as briefly as I can, my agreement extends also to Mr Howell QC's approach of distinguishing not only as between 'passive' and 'active' behaviour but also as between the two types of 'passive' behaviour which Mr Chirico suggested were both dealt with by Lord Dyson in R (Lumba) in the section headed "Non-co-operation with return". I am referring here to the two types of conduct identified by Lord Dyson at [122] as categories (i) and (ii) respectively. I am quite clear, as was Mr Howell QC, that what Lord Dyson was dealing with at [123] to [128] was not conduct falling within (i) but was only conduct falling within (ii). It seems to me that this is made clear by the last sentence of [122] itself, and that Mr Chirico's suggestion to the contrary makes little sense. It is evident also, however, from the fact that Lord Dyson went on in the next paragraph, [123], to track the language used in his description of (ii). Thus, he said this:
"It is common ground that a refusal to return voluntarily is relevant to an assessment of what is a reasonable period of detention if a risk of absconding can properly be inferred from the refusal. But I would warn against the danger of drawing an inference of risk of absconding in every case. It is always necessary to have regard to the history and particular circumstances of the detained person. What is, however, in issue is whether a failure to return voluntarily can of itself justify a period of detention which would otherwise be unreasonable and therefore unlawful."
There is no mention of type (i) conduct here. Nor is there any such mention in the various passages from Lord Dyson's judgment (when in the Court of Appeal) in R (I) which follow.
Lord Dyson then went on, at [125] and [126], to set out the passages from the judgments of Toulson LJ and Keene LJ in R (A) which I have myself set out above. He next explained, at [127], that:
"It is necessary to distinguish between cases where return to the country of origin is possible and those where it is not. Where return is not possible for reasons which are extraneous to the person detained, the fact that he is not willing to return voluntarily cannot be held against him since his refusal has no causal effect."
This is consistent, as it seems to me, with the approach taken by the European Court of Human Rights in Massoud v Malta (24340/08 of 27 July 2010), a case cited by Mr Chirico, specifically at [67] where this was stated:
"The Government blamed the applicant for his unwillingness to cooperate. However, assuming the Government were right in their allegation, the Court considers that it must have become clear quite early on that the attempts to repatriate him were bound to fail as the applicant had refused to cooperate and/or the Algerian authorities had not been prepared to issue him documents. Detention cannot be said to have been effected with a view to his deportation if this was no longer feasible (see Mikolenko v. Estonia, no. 10664/05, §§ 64-65, 8 October 2009). Indeed, the Court notes that to date, a year and a half after his release, the applicant is still in Malta."
It is consistent also with Ibrahim & Anor v Secretary of State for the Home Department [2010] EWHC 764, in which Burnett J (as he then was) stated as follows at [52]:
"Removals to most countries present few logistical difficulties. It is always necessary to secure the cooperation of an individual, at least if he has no valid passport. That is because biographical data are required to obtain a temporary travel document and to ensure that the receiving country will accept the deportee. No return, enforced or voluntary, can be achieved without a travel document of some sort. A person liable to removal will have little to complain about if he is detained for some months whilst he refuses to provide the data necessary as a first step to effect his removal. Thereafter, removal to most countries will follow very quickly. There are nonetheless destinations which present more difficulty. The Secretary of State must be allowed a reasonable period to make the necessary arrangements. In a case where the impediment arises from disorder in the receiving country, the task of predicting when conditions will improve and stabilise sufficiently to allow forced returns is an imprecise exercise. It may sometimes be possible to identify a trend which enables a timescale to be predicted. In other circumstances the disorder or conflict can end relatively suddenly, not least for political reasons. Yet there must be a limit to the period during which someone can be detained, albeit judged by reference to the facts of an individual case, when the grounds for believing that enforced removal will be possible rest on a hope, and little more, that the security situation in the receiving country will improve. Otherwise for practical purposes the detention becomes indefinite and assumes the almost exclusive purpose of applying pressure on the detainee to leave voluntarily. That is not the purpose for which the power to detain was conferred."
The situation described by Lord Dyson at [127] and in Massoud and Ibrahim is not, however, relevant in Mr Ramathami's case.
Lord Dyson then went on to deal with the situation where a person refuses to return voluntarily and has issued proceedings challenging his or her deportation. In that situation, as Lord Dyson explained at [127], "then it is entirely reasonable that he should remain in the United Kingdom pending the determination of those proceedings (unless the proceedings are an abuse)" and "his refusal to accept an offer of voluntary return is irrelevant".
This is to be contrasted, however, as explained at [128], with the case where there is no legal challenge (Mr Ramathami's case at the relevant time). As to this, Lord Dyson stated as follows:
"Here, the fact that the detained person has refused voluntary return should not be regarded as a 'trump card' which enables the Secretary of State to continue to detain until deportation can be effected, whenever that may be. That is because otherwise, as I said at para 51 of my judgment in R (I), 'the refusal of an offer of voluntary repatriation would justify as reasonable any period of detention, no matter how long, provided that the Secretary of State was doing his best to effect the deportation.' If the refusal of voluntary return has any relevance in such cases even if a risk of absconding cannot be inferred from the refusal, it must be limited. That was the view of Simon Brown LJ in R (I) and Keene LJ in R (A) and I agree with them."
I am confident that nothing which Lord Dyson was here stating had as its focus the type (i) situation, where a person who does not have a valid passport has refused to co-operate with the obtaining of travel documents to enable him or her to return. I do not, therefore, accept Mr Chirico's submission that the category (i) type of case has necessarily to be given the same limited weight as the category (ii) type of case. I do not consider that Lord Dyson was saying in R (Lumba) that that is the position as, in my view and as I have explained at some length, Lord Dyson was not addressing the type (i) type of case. As can be seen from the passage at [56] set out above, specifically the sentence beginning "Thus in my judgment it is likely", that was the view taken by Mr Howell QC in R (Sino), and it seems to me that it was also the view which was taken by Irwin J in R (Amougou-Mbarga) v Secretary of State for the Home Department [2012] EWHC 1081 (Admin).
In that case, as Miss Busch explained, the claimant, a Cameroonian, argued that his detention from October 2010 to March 2012, when he was finally deported to Cameroon, had been unlawful. The context in which his claim was brought was that he had entered this country in 1999 using a forged document and he had subsequently been convicted of a number of offences, including using a false instrument and blackmail. It was, indeed, as in Mr Ramathami's case, at the end of a sentence of imprisonment that the claimant was taken into immigration detention, having been served with a deportation order. That was in 2008 and for the next two years or so, until October 2010, when he finally admitted that he was from Cameroon, he repeatedly tried to frustrate removal by denying his identity and nationality. His damages claim related to the period after that, when he conceded that he was from Cameroon, his contention being that from that point the Secretary of State should have immediately either deported him or released him.
Irwin J dismissed the claim and, in setting out the law, referred, at [40], to R (Lumba), before going on to say this at [41]:
"In my judgment a failure to co-operate falls to be distinguished from a deliberate campaign of misinformation and deception. It seems to me the two are to be regarded differently. I note that this was the view taken by John Howell QC sitting as a deputy High Court Judge in R (Sino) v Secretary of State for the Home Department [2011] EWHC 2249 (Admin). It was his view that the decision of the Supreme Court in Lumba does not go so far as to exclude regard to the contribution 'that a detainee's conduct may make to the length of his own detention'. Further the learned deputy judge went on:
'It is likely, other things being equal, that a reasonable period for the detention of an individual who does not co-operate in obtaining a travel document may well be longer than it will be in the case of an individual who co-operates. Similarly it is likely, other things being equal, that a reasonable period may be still longer in the case of an individual who seeks to frustrate efforts to obtain [a travel document] by supplying false or misleading information'."
Mr Chirico suggested that Irwin J was wrong in apparently not appreciating that the first sentence of the passage quoted from Mr Howell QC's judgment in R (Sino) at [56] was dealing with a type (i) case. Mr Chirico, therefore, submitted that Irwin J ought to have regarded the first sentence situation as being one in which only limited weight could be attributed to the conduct described. I do not agree. Irwin J was right, as I see it, not only to recognise the distinction drawn by Mr Howell QC between 'passive' and 'active' behaviour, as demonstrated by the first sentence of [41], but also to recognise that the type of 'passive' behaviour described by Mr Howell QC in the passage which Irwin J quoted was type (i) conduct and, as such, not the conduct which Lord Dyson in R (Lumba) was addressing at [123] to [128].
I acknowledge, of course, that the facts of R (Amougou-Mbarga) were somewhat extreme. This is made clear from [43]:
"It is clear that consideration of a claim for wrongful detention must closely reflect the facts and circumstances of the individual case. The facts here are striking. This is not merely a case of refusal to co-operate with removal. Against a backdrop of repeated criminal offending involving deception, this is story of gross repeated deception perpetrated by the Claimant to avoid removal. That deception has been successful in the past in confusing the authorities and in defeating his deportation, as outlined above. In my judgment, this casts a shadow not merely over the period before he relented and acknowledged his Cameroonian nationality. This history of deception had an important effect, as it was bound to do, on events after October 2010. The Claimant had lied so long and so successfully that the authorities were entitled to feel that he might be attempting to deceive them again. There was an obvious risk that they might attempt once more to deport him to the Cameroon, only to find that he went through another volte face, denied he was Cameroonian and achieved another humiliating and expensive return to the UK."
Mr Chirico highlighted, in particular, the facts that the claimant in that case was convicted of three separate dishonesty offences, together with bail offences, that he had entered this country unlawfully on at least two occasions, that he had sought to resist his removal on repeated occasions by the adoption of at least four identities (two French, one Cameroonian-Gabonese, and one Cameroonian), and that he had successfully resisted removal repeatedly, including by causing himself to be 'bounced back' both from Gabon and from Cameroon, the factor which Irwin J described as being "humiliating" to the United Kingdom. It was, therefore, perhaps not surprising that Irwin J concluded as follows at [44]:
"In that context it seems to me, it was not merely reasonable but necessary to continue the detention of the Claimant until the authorities were clear they had documentation, evidence and arrangements in place which would ensure his effective removal. It seems to me that was what they were doing, using reasonable application and intelligence, from October 2010 until the date when the Claimant was successfully removed. Both before October 2010 and after, there were some period of administrative delay, but in the context of a complex and difficult case such as this, they did not in my judgment cross the line between administrative delay and unreasonable delay amounting to illegality … ."
It does not follow, however, from the fact that R (Amougou-Mbarga) involved somewhat extreme facts that I should disregard the decision, particularly given that I have regard to it, in any event, only because of what is stated by Irwin J, correctly in my assessment, in relation to the applicable legal principles. I obviously acknowledge that every case will depend ultimately on its own facts. Different cases will fall in different places along what is clearly a spectrum. Every case will entail obstruction since it will only be where somebody is refusing to do what the Secretary of State would like that person to do, which is leave the country, that the 'administrative' detention powers need to be used at all. However, there is a qualitative difference between merely refusing to leave, on the one hand, and 'active' behaviour entailing the kind of behaviour seen in R (Amougou-Mbarga), on the other. These are cases at some distance apart from each other on the spectrum, and it is obviously right that there should be a different amount of weight attributed to them in view of their differences. It does not follow, however, that the same weight should be given to the range of different cases which are likely to fall in different places along the spectrum. As Lord Dyson demonstrated in R (Lumba) itself, there is, for example, a difference between a 'passive' case of a person refusing to leave voluntarily who makes a legal challenge and a 'passive' case where there is no such legal challenge. In the former scenario, the refusal to leave voluntarily is unlikely to be relevant, whereas in the latter case it will have more weight, albeit still only limited weight. Similarly, as I see it, if the case is a 'passive' case of the sort identified by Lord Dyson at (i) in R (Lumba) at [122], it is likely that more weight will be afforded to the behaviour concerned than if it is a 'passive' case of the sort identified by him in his category (ii). Again, however, it will depend on the facts of the particular case because not all cases will be the same even within the various categories. There may be aggravating features and there might, equally, be mitigating aspects. Some conduct may also be a mixture of the 'passive' and the 'active', perhaps depending on over what period of time a person's behaviour is being considered. I do not accept that Mr Chirico can be right when he submitted that, as he put it, the "only conceptual difference" is as between the 'passive' and the 'active'. It seems to me that this represents far too sweeping an approach, and that any assessment has to be rather more subtle and nuanced. It follows that I cannot accept Mr Chirico's submission that only limited weight should ever be given to 'passive' behaviour of whatever type, and specifically that limited weight should be attributed to the conduct identified by Lord Dyson in both (i) and (ii) at [122] in R (Lumba).
Mr Chirico similarly suggested that R (Sino) was a more extreme case than the present case. He pointed out this was a case in which Mr Howell QC decided that the detention had been unlawful from the very outset and that this had remained the case for its five year duration. It was a case in which, as Mr Chirico also stressed, serious findings were made that there was a "high risk of [Mr Sino] committing further criminal offences if released from detention and there always has been" ([114]), and that there was a "basis for real concern that, if continued, his offending may become more serious in its impact on others" ([115]). It was also found that Mr Sino "has also been, and remains, very likely to try to abscond" ([118]). Further, it was decided that Mr Sino had "provided the Secretary of State with inconsistent and false information about himself. [… he] deliberately supplied information about himself to the Secretary of state which he must have known to be untrue and […] he did so in order to frustrate attempts to remove him from this country" ([174]). Mr Chirico relied, in particular, on the fact that Mr Howell QC's decision was that "the Secretary of State ha[d] not shown that there was ever any realistic prospect that the Claimant would co-operate in facilitating his deportation" ([199]), and that, absent any realistic prospect of other means of obtaining "sufficient information and evidence in sufficient time to enable the Claimant to be deported within a reasonable period", his detention was unlawful. This was despite the fact that the possibility of such information coming to light at some point could not be excluded ([200]). Mr Chirico's submission, which I shall come on to address later, was that the same result should be reached in the case of Mr Ramathami.
Hardial Singh: a recap
Lastly on this topic and really by way of recap, Miss Busch referred to a very recent decision, which she suggested was particularly useful in drawing together the appropriate principles, namely R (Chuck) v Secretary of State for the Home Department [2015] EWHC 1103 (Admin). This case involved a claimant who had been convicted of making a false VAT statement in 2007 and who was subsequently also convicted of theft in 2010. In March 2012, after his release from prison, he was detained in immigration detention. This is where he has remained for now over three years, consistently claiming to be a British citizen but equally consistently failing to provide any evidence in support of that claim, and with the Secretary of State believing him to be Nigerian. In late 2014, the claimant was interviewed by the Nigerian authorities, who said that they knew who he was, but who failed to provide the Secretary of State with any further information concerning him.
HHJ Walden-Smith (sitting as a Deputy High Court Judge), in rejecting his application for permission to bring judicial review proceedings, summarised the principles which she considered "can be gleaned from the various authorities", in particular R (Lumba) and R (MH). I gratefully adopt her summary at [25], as follows:
"(i) there can be a realistic prospect of removal without it being possible to specify or predict the date by which removal can reasonably be expected to occur and without any certainty that removal will occur at all; there is no 'outer' limit on the reasonable period (MH);
(ii) the extent of certainty or uncertainty as to whether and when removal can be effected will affect the balancing exercise, but there must be a sufficient prospect of removal to warrant continued detention when account is taken of all other relevant factors (MH);
(iii) the risks of absconding and re-offending are relevant considerations, but the risk of absconding should not be overstated, otherwise it would become a trump card (Lumba);
(iv) the weight to be given to time taken up by an appeal depends on the facts but much more weight should be given to detention during a period when the detained person is pursuing a meritorious appeal than to detention during a period when he was pursuing a hopeless one (Lumba);
(v) a detainee who will not comply with the process of obtaining emergency travel documents or other requirements of detention and is doing everything he can to hinder the deportation process may reasonably be regarded as likely to abscond (Lumba; MH);
(vi) refusal of voluntary return does not necessarily permit an inference of risk of absconding (Lumba);
(vii) where return is not possible (for reasons that are extraneous to the person detained), the fact that the detained person is not willing to return voluntarily cannot be held against him, because his refusal has no causal effect (Lumba); however, where the detainee has failed to bring his own detention to an end when he could, then that is a relevant matter. …
(viii) even where there are no outstanding challenges, refusal of voluntary return should not be regarded as a trump card for the Secretary of State's wish to detain (Lumba);
(ix) there is no maximum period after which detention becomes unlawful (Lumba; MH);
(x) it is not enough to found a claim for damages for unlawful detention to demonstrate in retrospect that some part of the statutory process had taken longer than it should have done;
(xi) the risk of re-offending is a relevant factor as it goes to both the risk of absconding and evading prosecution as well as public protection (Lumba); however, the detainee cannot be detained simply to avoid the risk of further offending, as such detention would not be for the purpose of deportation. …".
I observe, only really in passing, that HHJ Walden-Smith cited in (vii), with apparent approval, R (Kajuga) v Secretary of State for the Home Department [2014] EWHC 426, in which HHJ Blackett (sitting as a Deputy High Court Judge) observed, at [18], that it is "a matter of common sense that if a person obstructs the deportation process and fails to cooperate with the Secretary of State then the 'reasonable period' will be longer and probably much longer". In the light of the authorities considered earlier, it may be that this is slightly too sweeping an observation.
Published policy
Mr Chirico pointed out that a failure by the Secretary of State to follow her own published policy constitutes an error of law which entitles the court to quash the decision or grant some other appropriate remedy.
Miss Busch did not take any issue about this and, consistent with what was decided by the Supreme Court in R (Kambadzi) (see, for example, Lord Hope in the majority at [36]), I proceed on this basis.
Accordingly, it is relevant, as Mr Chirico submitted, to have regard to the Secretary of State's policy on detention when assessing (i) whether detention is for a reasonable period in all the circumstances; and (ii) whether the Secretary of State has acted with due diligence.
The relevant policy is set out in Chapter 55 of the Enforcement Instructions and Guidance ('EIG'), in a section headed "Detention and Temporary Release". I need not set out everything, not least because Miss Busch confirmed during the course of the hearing that the Secretary of State's position was not that Mr Ramathami had committed what the policy describes as "more serious offences".
Relevant provisions include, however, the following:
(1) 55.1.1 (General):
"In the 1998 White Paper "Fairer, Faster and Firmer – A Modern Approach to Immigration and Asylum" it was made clear that the power to detain must be retained in the interests of maintaining effective immigration control. However, the White Paper confirmed that there was a presumption in favour of temporary admission or release and that, wherever possible, we would use alternatives to detention (see 55.20 and chapter 57). …".
(2) 55.1.3 (Use of Detention):
"Detention must be used sparingly, and for the shortest period necessary. It is not an effective use of detention space to detain people for lengthy periods if it would be practical to effect detention later in the process once any rights of appeal have been exhausted. …".
(3) 55.3.A (Decision to detain-CCD cases):
"Less serious offences
To help caseworkers to determine the point where it is no longer lawful to detain, a set of criteria are applied which seek to identify, in broad terms, the types of cases where continued detention is likely to become lawful sooner rather than later by identifying those who pose the lowest risk to the public and the lowest risk of absconding. These provide guidance, but all the specific facts of each individual case still need to be assessed carefully by the caseworker. As explained above, where the person has been convicted of a serious offence, the risk of harm to the public through re-offending and risk of absconding are given substantial emphasis and weight. While these factors remain important in assessing whether detention is reasonably necessary where a person has been convicted of a less serious offence, they are given less emphasis than where the offence is more serious, when balanced against other relevant factors. Again, the types of other relevant factors include those normally considered in non-FNP detention cases, for example, whether the detainee is mentally ill or whether their release is vital to the welfare of child dependants.
(4) 55.3.2.11:
"Those assessed as low or medium risk should generally be considered for management by rigorous contact management under the instructions in 55.20.5. Any particular individual factors related to the profile of the offence or the individual concerned must also be taken into consideration and may indicate that maintaining management by rigorous contact management may not be appropriate in an individual case. In cases involving serious offences on the list at 55.3.2.1 above, a decision to release is likely to be the proper conclusion only when the factors in favour of release are particularly compelling. In practice, release is likely to be appropriate only in exceptional cases because of the seriousness of violent, sexual, drug-related and similar offences."
Mr Ramathami's position (in summary)
Mr Ramathami's case is that it was or should have been apparent to the Secretary of State that there were insufficient prospects of his removal within a reasonable period, having regard to all relevant factors, and so his continued detention after 31 December 2010 was unlawful by reference to the third of the Hardial Singh principles as summarised by Dyson LJ in R (I). Mr Chirico acknowledged that no separate issues arise in relation to Article 5, and in these circumstances I do not propose in this judgment to deal with Article 5 separately. His submission was that Article 5, however, "informs the lawful approach to the third Hardial Singh principle", and "that a breach of that principle would lead inevitably to a breach of Article 5".
Mr Chirico clarified that, in advancing his claim, whilst Mr Ramathami maintains that he comes from Burundi, it is nevertheless accepted by him that the Secretary of State was entitled throughout the period of his detention to rely upon the fact that the Asylum and Immigration Tribunal had determined that Mr Ramathami is not Burundian, as well as to conclude that Mr Ramathami had not provided any proper evidential or legal basis to require that those findings be displaced.
Mr Chirico went on to explain that, on the facts of the present case, the second of the Hardial Singh principles does not add to the third principle on which Mr Ramathami primarily relies. He made it clear, however, that, in addition to the third principle, Mr Ramathami also alleges that, in detaining him, the Secretary of State acted contrary to the fourth Hardial Singh principle in failing to act with reasonable diligence and expedition to effect Mr Ramathami's removal.
Mr Ramathami's case, in summary, is that by 31 December 2010 the Secretary of State had, as Mr Chirico put it in his skeleton argument, "exhausted her realistic options for documenting" Mr Ramathami. She had, again as Mr Chirico put it, "done all that she could to pressurise [Mr Ramathami] into complying further with the attempt to document him", and she either did realise or should have realised that Mr Ramathami "would not provide her with the further information she wished within a reasonable time". Mr Chirico added that "those processes of enquiry which were still ongoing carried little or no prospects of success", and "that any 'fresh ideas' which [the Secretary of State] might come up with carried insufficient prospects of leading to successful documentation (and were, in any event, far too late to justify an extension to the reasonable period of detention)". Lastly, Mr Chirico submitted that Mr Ramathami was not at risk of re-offending and absconding, and as such he ought to have been made the subject of rigorous contact management in line with the Secretary of State's own stated policy, rather than kept in continued detention.
The Secretary of State's position (in summary)
The Secretary of State's case entails three main propositions, as set out in Miss Busch's skeleton argument.
First, Miss Busch submitted that it needs to be borne very much in mind that Mr Ramathami is somebody who entered this country illegally, claiming asylum on the basis that he came from Burundi when he did not, and then adopting a false identity and working unlawfully before being convicted and sent to prison. This is a case, therefore, Miss Busch submitted, where the Secretary of State was entitled to conclude that, if Mr Ramathami were released from detention, there was a risk that he would abscond and/or re-offend. In this context, Miss Busch submitted that the fact that Mr Ramathami has not absconded or offended since being released on bail on 11 July 2011 is immaterial since the Secretary of State had to make an assessment at a time when Mr Ramathami was in detention and, therefore, looking to what in the event happened does not assist.
Secondly, it is the Secretary of State's position that it was Mr Ramathami's obstructive behaviour that was "the sole barrier" to her obtaining the documentation required for his deportation, and that it was the difficulties encountered in obtaining such documentation which, therefore, meant that Mr Ramathami continued to be detained. Miss Busch submitted that, in these circumstances, the Secretary of State was justified in detaining Mr Ramathami for longer period than might otherwise have been the case. In support of this submission, Miss Busch relied on Toulson LJ's observation in R (A) at [54], in a passage which I have previously set out, that "there is a big difference between administrative detention in circumstances where there is no immediate prospect of the detainee being able to return to his country of origin and detention in circumstances where he could return there at once". She submitted that the present case falls into the latter category and so involves loss of liberty which was of Mr Ramathami's "own making".
Miss Busch relied also on Sino, Amougou-Mbarga, Chuck and Kajuga in support of this submission, contending that irrespective of whether the present case is to be regarded as a 'non-co-operation' case or as one involving a 'deliberate campaign of misinformation and deception', the relevant "reasonable period" has necessarily to be extended.
Thirdly, Miss Busch submitted that the evidence demonstrates that the Secretary of State "made real, consistent and vigorous efforts" to identify Mr Ramathami's country of origin and to obtain the documentation required to enable him to be deported. Those efforts, she submitted, persisted right up until 11 July 2011. There was, in short, Miss Busch submitted, a realistic prospect of removal throughout the relevant period. Accordingly, in Miss Busch's submission, there is no question of the Secretary of State being in breach of the Hardial Singh principles or of Article 5.
Discussion
Preliminary
I turn now to address the parties' respective submissions in more detail and by reference to the evidence as well the appropriate legal principles.
In doing so, I have in mind that my task in this case is not limited to reviewing the Secretary of State's decision to detain Mr Ramathami and to continue to detain him, but to decide for myself whether or not Mr Ramathami's detention is lawful. This point was made by Toulson LJ (as he then was) in R (A) at [62]:
"…Where the court is concerned with the legality of administrative detention, I do not consider that the scope of its responsibility should be determined by or involve subtle distinctions. It must be for the court to determine the legal boundaries of administrative detention. There may be incidental questions of fact which the court may recognise that the Home Secretary is better placed to decide than itself, and the court will no doubt take such account of the Home Secretary's views as may seem proper. Ultimately, however, it must be for the court to decide what is the scope of the power of detention and whether it was lawfully exercised, those two questions being often inextricably interlinked. In my judgment, that is the responsibility of the court at common law and does not depend on the Human Rights Act (although Human Rights Act jurisprudence would tend in the same direction)."
The same point was made by Keene LJ in the same case at [71]:
"It is to my mind a remarkable proposition that the courts should have only a limited role where the liberty of the individual is being curtailed by administrative detention. Classically the courts of this country have intervened by means of habeas corpus and other remedies to ensure that the detention of a person is lawful, and where such detention is only lawful when it endures for a reasonable period, it must be for the court itself to determine whether such a reasonable period has been exceeded. That has been the approach adopted in practice in the domestic cases to which we have been referred: Hardial Singh, R (I) v. Secretary of State for the Home Department and, to my mind, Khadir …. ."
Keene LJ added this at [75]:
"…Of course, the court will in most cases attach considerable weight to any assessment emanating from a government department about the progress of negotiations with foreign governments or with airlines about securing the return of deportees. But the ultimate decision is, in my judgment, for the court. I therefore would reject the Secretary of State's submission as to the limited role of the court in cases such as this."
As Richards LJ made clear in R (LE) v Secretary of State for the Home Department [2012] EWCA Civ 597, at [29] (specifically, i), ii), iii) and viii)), the position is different where what is being considered by the court is not the reasonableness of the period of detention and the application of the Hardial Singh principles, but whether the detention was in accordance with a Home Office policy. In the latter case, the Secretary of State's decision is subject to review under normal Wednesbury principles.
It is with these considerations in mind that I come on to consider: first, the factors which are relevant to the reasonable period of Mr Ramathami's detention; and, secondly, the prospects of Mr Ramathami's removal.
Reasonable period
Mr Chirico's and Miss Busch's submissions covered essentially similar ground. Unsurprisingly, however, Mr Chirico and Miss Busch took rather different stances in relation to that ground.
Mr Chirico began by making the point that by 31 December 2010 Mr Ramathami had already spent over sixteen months in immigration detention, and that this was three times as long as he had spent in custody owing to his criminal conviction. He suggested that any assessment of the reasonable period for which he could be detained must deal with the likely future period cumulatively with the long period already spent in immigration detention.
Miss Busch agreed with this. As she put it, the period of time for which a detainee has been detained as a whole needs to be looked at. She made the point that nonetheless in the present case it is accepted on Mr Ramathami's behalf that the Secretary of State acted lawfully in detaining him for the period between 14 August 2009 (after his release from prison and when he was taken into immigration detention) and 31 December 2010 (or thereabouts). She submitted that it follows also that Mr Ramathami accepts that the Secretary of State made appropriate efforts to 'document' and remove Mr Ramathami during that period.
Mr Chirico did not disagree with this, and nor could he. It is clear, in the circumstances, that the relevant question for present purposes is whether the Secretary of State was justified in detaining Mr Ramathami for the seven-month period ending with Mr Ramathami's release from detention on 11 July 2011. As Miss Busch pointed out, this is not a particularly long period. However, it was still a period when Mr Ramathami was deprived of his liberty. It is, therefore, in truth, a not insignificant length of time. It is also a period which needs to be viewed in its proper context, coming as it did after Mr Ramathami had already spent sixteen months in immigration detention.
The key controversy between Mr Chirico and Miss Busch concerned the Secretary of State's concern that, were Mr Ramathami to be released from detention, he would abscond or re-offend, together with what Miss Busch described as Mr Ramathami's lack of co-operation which, she suggested, went beyond merely his refusal to leave the United Kingdom voluntarily and, as such, is a factor to which more than just limited weight should be attributed.
Focusing in the first place on the risk of absconding or re-offending, as previously mentioned, Miss Busch's essential submission was that the Secretary of State was wholly justified in taking account of the fact that Mr Ramathami, having entered this country illegally, had claimed asylum on the basis that he came from Burundi when the indications were that this was a lie, and had then gone on to adopt a false identity and work unlawfully. This, Miss Busch submitted, formed what in her closing submissions she termed "part of a pattern".
Against this, Mr Chirico submitted that there was no real risk that Mr Ramathami would re-offend if he were to have been released after 31 December 2010. Mr Chirico highlighted, in particular, how Mr Ramathami's only offending was his illegal working for which he was convicted on 30 April 2009. Therefore, Mr Ramathami did not, Mr Chirico submitted, have a substantial offending history. Mr Chirico also pointed out that, without, as he put it, minimising the seriousness of Mr Ramathami's offending, it was not at the higher end of seriousness, as recognised apparently by certain remarks made by the sentencing judge. Nor, Mr Chirico submitted and Miss Busch accepted, did Mr Ramathami's offending carry a high, or even a moderate, risk of harm to any individual. In any event, Mr Chirico suggested, there was no significant risk of Mr Ramathami repeating his offending, not least because the Secretary of State had granted him provisional accommodation and so-called 'section 4' support, and Mr Ramathami was hardly likely to want to jeopardise his receipt of that assistance.
It was similarly Mr Chirico's submission that there was insufficient risk that Mr Ramathami would abscond to justify a lengthy period of detention, and still less a lengthy further period of detention. Mr Chirico suggested that Mr Ramathami should instead have been dealt with through close 'contact management' such as tagging, which would have been in line with the Secretary of State's Chapter 55 policy. There was no justification, Mr Chirico submitted, in the Secretary of State maintaining Mr Ramathami's detention, bearing in mind that he had not absconded during the eight years between his arrival in the United Kingdom and his arrest in early 2009. In particular, Mr Chirico highlighted how Mr Ramathami kept to his reporting obligations for almost two years after his appeal rights had became exhausted, and so at a time when he was removable or detainable. Mr Chirico contrasted Mr Ramathami's position with many other people who, as he put it, either "vanish or lie low". Aside from apparently missing a solitary reporting requirement in May 2007, Mr Chirico stressed how Mr Ramathami had unfailingly complied with requirements that he report. This was despite not being subject to any 'contact management' during this period, indicating, Mr Chirico submitted, that if he were to have been released from detention and made the subject of 'contact management', there would have been even less prospect or risk that Mr Ramathami would have complied with future reporting requirements. Mr Chirico also made what he described as a "jury point", namely that Mr Ramathami has not absconded since his release from detention on 11 July 2011, so indicating that he was not the absconding type.
In response to these various submissions, Miss Busch submitted that the Secretary of State was nonetheless entitled to take the view that there was a real risk that Mr Ramathami would re-offend if released from detention. She made the point, in particular, that the fact that Mr Ramathami had been granted 'section 4' support was somewhat beside the point since, if he were to have absconded on his release from detention, Mr Ramathami would not have actually received the support. Miss Busch submitted that, for this reason if no other, the risk of re-offending has (and had) to be considered together with the risk that Mr Ramathami might abscond. As Miss Busch pithily put it, if Mr Ramathami "did abscond, he would have no lawful means of support". This is why, Miss Busch submitted, the Secretary of State was justified in taking the view that there was, accordingly, a risk that Mr Ramathami would repeat his previous offending behaviour by adopting a false identity and working illegally.
I agree with Miss Busch about this. It seems to me that it is unrealistic to have expected that the Secretary of State should have taken any more sanguine a view on this aspect. On the contrary, in my assessment, given Mr Ramathami's previous offending, the risk that he would re-offend and abscond was not easily discounted. I agree also with Miss Busch when she submitted in her closing submissions that the "pattern" to which she referred included also Mr Ramathami's conduct in lying about coming from Burundi (including the lie about coming from Burundi but having lived in Kenya during his conversation with E. Farnes on 16 September 2009) and in failing to co-operate (the matter which I will address in a moment). In my view, Miss Busch is correct as well to remind me that, although Mr Ramathami's offending did not pose a direct risk of harm to the public, it was nonetheless offending of a type which undermines the system of immigration control, a system which the Secretary of State is under a duty to maintain and which she is obviously entitled to regard as being particularly important.
It is also right to bear in mind that, whilst Mr Ramathami did not abscond between his arrival in this country in 2001 and his being sentenced to imprisonment in 2009, the fact is that at some point after being granted temporary admission in March 2007 he adopted a false identity and commenced working illegally. I agree with Miss Busch that this is a significant feature of Mr Ramathami's case and that the Secretary of State was justified in giving it due regard in assessing the risk that he would abscond if released.
As to Mr Chirico's "jury point", the fact that Mr Ramathami has not absconded since his release from detention on 11 July 2011 really goes nowhere. First, the Secretary of State could only act on the basis of the information which was available to her at the time. She could not, therefore, have known, at least without a crystal ball, that Mr Ramathami would, in the event, not choose to abscond. Secondly, I agree with Miss Busch that it is hardly surprising that Mr Ramathami has not absconded since he has what Miss Busch called "a motive" not to abscond, namely the present proceedings and the possibility that he might recover damages from the Secretary of State. As Mr Chirico essentially recognised, there is no weight to be placed on his "jury point".
Mr Chirico went on to submit in his closing submissions that cases such as R (Sino) involved people who have committed serious offences. He suggested that, in the circumstances, the risk of re-offending, in the context of the risk of absconding presented by Mr Ramathami, was "not a significant factor". Although I agree that obviously more serious offending presents a higher risk of re-offending, and of doing so in a serious way, I nonetheless cannot agree with Mr Chirico that Mr Ramathami's offending should, in effect, be disregarded, and what I consider to be the associated risk of absconding effectively discounted accordingly.
Nor do I consider it right for Mr Chirico to suggest that the Secretary of State is to be criticised for not releasing Mr Ramathami and not making him subject to 'contact management'. I acknowledge that this was something which the Secretary of State had to consider, not least because her own (Chapter 55) policy required her to do so. It is clear, however, that the Secretary of State did just this when carrying out regular detention reviews. The view reached on each of these occasions was that Mr Ramathami was not suitable for 'contact management' because of the risk that he would abscond. That this was an aspect which was given proper consideration is, as Miss Busch submitted, illustrated by the fact that in the detention review carried out in early June 2011 Deborah Schofield raised the possibility that Mr Ramathami might be released and there was, in consequence, a referral to the Strategic Director, whose decision was that there should not be a release subject to 'contact management'. I remind myself that I am not presently engaged in a judicial review of the Secretary of State's decision on that occasion, nor on the occasions of the previous detention reviews, since my task is to decide for myself whether Mr Ramathami's detention was lawful. However, in my judgment, for the reasons which I have set out above, the Secretary of State was justified in reaching the view which she did concerning Mr Ramathami's risk of re-offending and the connected risk that he might abscond in the event that he were released from detention.
This leaves three other matters which, in line with Mr Chirico's and Miss Busch's submissions, I need to consider: Mr Ramathami's lack of co-operation; Mr Ramathami's medical condition; and the significance or otherwise of the various bail applications which Mr Ramathami made but which (save for the last one) failed. I shall deal with the second and third before then going on to address the first.
As to Mr Ramathami's medical condition, Mr Chirico highlighted how Mr Ramathami had a series of medical problems whilst he was in detention, suffering in June 2010 with a stomach illness and the following month being diagnosed with a "very congested larynx and pharynx" thought to have been caused by acid reflux and long-term use of asthma inhalers. Mr Chirico also referred to how Mr Ramathami had been diagnosed in late 2010 as suffering from labyrinthitis, causing dizziness and nausea and recurring approximately twice a month. Mr Chirico did not suggest that these illnesses were necessarily caused by Mr Ramathami's detention alone. He did, however, submit that the fact that Mr Ramathami was suffering from these various conditions aggravated the impact of his confinement in a detention centre. This, he suggested, together with Mr Ramathami's reduced control over his food, was another factor which, as he put it, tended to reduce the 'reasonable period' for which he could be detained. I have to say that I do not regard this as a very compelling factor, and, in fairness, in his closing submissions, it was apparent that Mr Chirico did not either. As Miss Busch pointed out, it is the Secretary of State's (Chapter 55) policy that only those persons suffering from a medical condition which cannot be satisfactorily managed in detention are unsuitable to be detained by reason of that condition. That makes perfect sense to me. Mr Ramathami's case is a very long way from being such a case. There is nothing which I have seen to show that his conditions could not be, and were not, satisfactorily managed in detention.
As to the bail applications, Mr Chirico cautioned against reliance on the findings made by judges at the various bail hearings which involved Mr Ramathami. He pointed out, correctly, that immigration judges at bail hearings heavily depend on the Secretary of State to set out fully and frankly the circumstances of a person's case. Mr Chirico added that Immigration Judges have no jurisdiction to consider the Hardial Singh principles, save insofar as they bear directly upon risks of absconding or offending. This was made clear by the Supreme Court in R (Lumba), where Lord Dyson said this at [118]:
"… I accept the submission of Mr Husain that bail is not a sufficient answer to the fundamental objection that the exclusionary rule constitutes an impermissible restriction on judicial oversight of the legality of administrative detention. Paragraph 29 of Schedule 2 to the 1971 Act gives the First Tier Tribunal power to grant bail pending an appeal, but this is subject to the restrictions stated in paragraph 30. Paragraph 30(1) provides that an appellant shall not be released under paragraph 29 without the consent of the Secretary of State if removal directions are currently in force. There is nothing in the schedule which requires the tribunal to apply the Hardial Singh principles in deciding whether or not to grant bail and, in particular, to have regard to the past and likely future length of a detention. Bail is not a determination of the legality of detention, whether at common law or for article 5(4) purposes."
Miss Busch did not quibble with any of this, and nor realistically could she. She did suggest that it was appropriate for a certain amount of weight to be given to the views of experienced immigration judges concerning the risk of absconding. Mr Devereux also explained that he thought that this was appropriate, making the point that in Mr Ramathami's case it was, he thought, "salient that Mr Ramathami was refused bail" as many times as he was "in the space of 12 months", and expressing the opinion that the Secretary of State was entitled, in such circumstances, to "have a degree of confidence" in her officials' decision making. I see some force in this. However, I do not consider that the point goes particularly far for the reasons given by Mr Chirico.
I come on now to deal with the lack of co-operation point. Consistent with the submissions which he made in relation to the relevant authorities, addressed by me above at some considerable length, Mr Chirico's submission in his skeleton argument was that, as "a matter of law, a person's non-compliance with attempts to document him/her cannot in itself justify continued administrative detention". In the alternative Mr Chirico submitted that the present case is so unlike the kind of extensive "campaign of misinformation and deception" seen in R (Amougou-Mbarga) as to mean that only limited weight should be afforded to Mr Ramathami's behaviour. Miss Busch submitted that, on the contrary, this is a case in which significant weight should be given to Mr Ramathami's behaviour, which she described as being "the sole barrier" preventing the Secretary of State from obtaining the documentation required for his removal. She submitted that this justified Mr Ramathami's detention for a longer period than might otherwise have been warranted.
I agree with Miss Busch about this. I agree specifically that Mr Ramathami's conduct, even if it was 'passive', adopting Mr Chirico's nomenclature, nonetheless falls, at a minimum, into the category described as (i) by Lord Dyson in R (Lumba) at [122] and probably entailed rather more than this. As such, for reasons which I have explained, it seems to me that Mr Ramathami's conduct is not conduct to which only limited weight should be attached. Equally, I agree with Mr Chirico that Mr Ramathami's case is not as extreme as the conduct in either R (Sino) or R (Amougou-Mbarga). Where precisely in the spectrum to which I have referred the present case comes is not especially easy to say. I have concluded, however, that Mr Ramathami's overall pattern of behaviour merits not insignificant weight. This behaviour entailed not merely lack of co-operation in the obtaining of travel documentation. It involved a lie that he came from Burundi, repeated consistently and despite a complete lack of evidence in support of his claim. It involved a lie being told to an immigration officer on 16 September 2009 when Mr Ramathami found himself confronted with the results of the Sprakab language analysis. It involved a further lie a couple of days after that, when Mr Ramathami must have appreciated that it was better if he maintained the simpler line that he was from Burundi and had not lived anywhere else. I do not consider that it matters whether, as Mr Chirico submitted, this was an episode which led the Secretary of State to act differently since what matters is that it shows that Mr Ramathami was practising deception. This is also, of course, demonstrated by the deception which led to Mr Ramathami serving a prison sentence. This is, in short, rather more than somebody refusing to leave voluntarily ((ii) in [122] in R (Lumba)), and somebody refusing to co-operate in terms of travel documentation ((i) in [122]). It is entirely legitimate, in my assessment, for the view to be taken by the Secretary of state that to a not inconsiderable extent the period spent in immigration detention by Mr Ramathami was his own doing and, as such, not something about which it is open to him to complain.
Mr Chirico submitted that only 'active' conduct which can be shown to have caused the Secretary of State to have done something which she would not otherwise have done, with consequential delay, is relevant. Any other conduct, whether 'active' or 'passive', should, Mr Chirico submitted, be regarded as having only limited weight. As I have previously explained, I do not agree with Mr Chirico about this. In any event, in Mr Ramathami's case it seems to me that, in view of the deception in which he has engaged since arriving in this country some fourteen years ago, his behaviour (whether 'passive' or 'active' or, as I suspect, a combination of the two things) was such as to mean that the reasonable period as far as he was concerned had not come to an end by the time of his release on 11 July 2011.
Prospects of removal
Mr Chirico and Miss Busch were agreed that, as Mr Chirico put it in his skeleton argument, even if there was a real absconding risk or risk of re-offending in Mr Ramathami's case, and taken with the other factors also operating (including any failure to co-operate), this means that the relevant reasonable period had still to expire, the detention would nonetheless still be unlawful if there was an insufficient prospect of removal within that reasonable time. Mr Chirico, in fact, suggested in his closing submissions, that "the case hinges" on this issue.
Mr Chirico's submission, in essence, was that, having regard to the steps which the Secretary of State had already taken by the end of 2010 and looking at the steps which apparently remained outstanding, the conclusion which should be reached is that there was no longer a realistic or sufficient prospect that she would be able to effect Mr Ramathami's removal within a reasonable time: R (MH) per Richards LJ at [64]-[66].
Mr Chirico highlighted various features in this respect, beginning with the Secretary of State's attempts to have Mr Ramathami 'documented' by the Kenyan authorities. He made the point that it was only after Mr Ramathami had already been detained for six months that the Secretary of State referred his case to the Kenyan authorities on or around 18 February 2010. He went on to highlight how nothing came of the Secretary of State arranging for Mr Ramathami to be taken to the Kenyan High Commission on 20 May 2010 for a 'travel document interview'. Mr Chirico acknowledged, as he had to, that this was because Mr Ramathami refused to co-operate. His point was, however, that what matters is that the Secretary of State's efforts as regards the Kenyan authorities met with singular lack of success. He went on, in this context, to refer to how the Secretary of State subsequently wrote to the Kenyan High Commission again, on 11 June 2010, setting out why she considered that Mr Ramathami was Kenyan, yet this elicited no response.
Similarly, Mr Chirico explained, there was no response to a further attempt to contact the Kenyan High Commission in a letter sent on 3 September 2010. As Mr Chirico pointed out, in a computerised file note that same day an immigration officer wrote that "there is not a lot more we can do with the Kenyan authorities until we are given further information to submit to the Kenyan authorities", something which the Secretary of State was going to struggle to provide as long as Mr Ramathami continued to refuse to co-operate with her. In similar vein, Mr Chirico referred to a Home Office file note on 25 October 2010 indicating that the Secretary of State was aware of difficulties in obtaining verification of Kenyan nationality by fingerprint checks. Mr Chirico then pointed out that, after the Secretary of State had obtained a copy of Mr Ramathami's fingerprints on 16 November 2010 and had sent that copy to Kenyan officials, no response was ever received. This was despite the Secretary of State chasing the Kenyan authorities on 26 November 2010.
There was, as Mr Chirico pointed out, no further attempt made by the Secretary of State to contact the Kenyan authorities directly during the period when Mr Ramathami was detained. Mr Chirico submitted that the Secretary of State clearly was not expecting to hear back from the Kenyan authorities, at least certainly not any time very soon. This explains, he suggested, why she made no further attempts to chase the Kenyan authorities after November 2010. Indeed, Mr Chirico emphasised, it remains the position even now that the Secretary of State has still not had a response from the Kenyan authorities.
Mr Chirico submitted that similar considerations apply to the Secretary of State's efforts to have Mr Ramathami 'documented' by direct application to, or contact with, the Tanzanian authorities. As he pointed out, the first contact between the Secretary of State and the Tanzanian authorities was in the summer of 2010. As far as I can see, this was in July, rather than the previous month, as suggested in Mr Chirico's skeleton argument, although nothing turns on this. Mr Chirico suggested that this was too late. However, I do not consider that this is a criticism which is warranted, it being clear enough why the Secretary of State considered that Mr Ramathami was from Kenya (in part, based on the Sprakab language analysis) and equally clear that it was only after the interview on 24 June 2010 that Tanzania was considered, the official from Burundi who met Mr Ramathami on that occasion suggesting Tanzania as Mr Ramathami's possible country of origin.
Be that as it may, Mr Chirico then highlighted how, after an initial meeting between an FCO official and a Tanzanian official on 9 August 2010 and further contact during October 2010, nothing further appears to have been heard. This was despite the Secretary of State sending the FCO chasers on 30 November 2010 and again on 8 December 2010. There was, in particular, no further attempt to chase up either the FCO or the Tanzanian authorities during the time when Mr Ramathami was detained. He noted, in passing, that that appears also to have been the case since Mr Ramathami's release from detention.
Mr Chirico made the point that these efforts as regards the Kenyan and Tanzanian authorities need to be seen in the context also of a continuing refusal by Mr Ramathami to co-operate. He submitted, specifically, that by 31 December 2010, the Secretary of State was, or should have been, aware that there was no or foreseeable prospect that, within a reasonable period of time, Mr Ramathami would give information to the Kenyan or Tanzanian (or, for that matter, the Burundian) authorities so as to enable the Secretary of State to 'document' him. Mr Chirico submitted that, as he put it, an "outside chance" that Mr Ramathami might change his approach did not justify a conclusion on the part of the Secretary of State that there was a realistic or sufficient prospect of removal within a reasonable time, bearing in mind that Mr Ramathami had already been in detention for almost sixteen months by this stage. Mr Chirico emphasised, in this context, that the Secretary of State needed to have in mind that Mr Ramathami had maintained his unco-operative stance despite his unsuccessful asylum appeals, his lengthy period of immigration detention, the removal from him of working privileges in August 2010, the various interviews with people from various countries. Mr Chirico suggested that the Secretary of State could not have thought that Mr Ramathami was about to change his stance and suddenly start co-operating.
As to the various interviews in particular, Mr Chirico submitted that these had resulted in no progress. Accordingly, he suggested, the Secretary of State cannot have considered that they would lead to Mr Ramathami's removal. In relation to the visiting delegation of people from some East African countries which was intended to interview him in late 2009, Mr Chirico made the point that Mr Ramathami was not told where he was going and why he was to go there, and this is a matter which I have already addressed. What matters for present purposes is not why the interview did not take place, but simply that it did not take place and, as a result, nothing came of this initiative. Similarly, Mr Chirico submitted, the interview with Mr Jones, the 'British Africans in Government' representative, which took place on 21 December 2010, did not progress things and, significantly, was not repeated.
Mr Chirico submitted that, in short, by the end of December 2010, nothing which the Secretary of State had done justified an assessment by her that removal was a realistic or sufficient prospect within a reasonable time. On the contrary, Mr Chirico submitted, the steps which had been taken and the lack of progress which had been achieved in relation to those steps must have indicated to the Secretary of State that there was no prospect at all that Mr Ramathami would be released in a timescale which was reasonable.
Mr Chirico went on to submit that what followed, in the first half of 2011 leading up to Mr Ramathami's release, represented merely, as he put it in his skeleton argument, "last-ditch attempts to justify continued detention in response to the prospect that [Mr Ramathami] would mount a challenge to that detention". Mr Chirico was referring here to two things: the placing of advertisements in the Tanzanian and Kenyan press; and the making of contact with visitors to Mr Ramathami at Brook House.
As to the Tanzanian advertisement, I have previously made it clear that I have some sympathy with Mr Chirico's submission that the evidence concerning this advertisement is not as good as it might have been. However, Mr Chirico accepted, quite rightly, that there is no reason to suppose that the advertisement was not placed. That is not really the issue. The issue is, rather, whether Mr Chirico is right to submit that it must have been appreciated by the Secretary of State that nothing was likely to come of placing the advertisement, and that, therefore, this was a step which demonstrates that the Secretary of State had essentially 'run out of ideas'. In my judgment, this was not the case. I accept Miss Busch's submission that the placing of the advertisement in the Tanzanian press was something which was done in the genuine expectation, based on success (albeit isolated) in the past in relation to another case. I am confident that the Secretary of State would not have gone to the expense of placing an advertisement simply so as to bolster her defence to a claim brought by Mr Ramathami for damages for unlawful detention. I consider that this conclusion is bolstered by the fact that, as Mr Chirico himself pointed out, as late as June 2011, consideration was being given to placing a similar advertisement in the Kenyan press. This did not, ultimately, happen, but the fact that the Secretary of State was considering placing a further advertisement suggests to me that she was under the impression that an advertisement might result in progress, even though by this stage there had not been a response in relation to the advertisement placed in the Tanzanian press a month or so earlier, in April 2011.
This leaves Mr Chirico's reference to the Secretary of State's attempts to contact people who had visited Mr Ramathami whilst he was in detention. Mr Chirico pointed out, correctly, that these were attempts which were made only after the Secretary of State had received a letter before claim sent to her on 10 June 2011, in which reference was made to Mr Ramathami's intention to challenge the lawfulness of his detention. Mr Chirico submitted that the Secretary of State's attempts, which apparently ranged over some three weeks or so, culminated in a single, and wholly unsuccessful, visit to one person's house. Mr Chirico suggested that there was only ever, and at best, a minimal prospect that the Secretary of State's attempts would give rise to a successful release. It was not, as such, Mr Chirico submitted, a prospect which was sufficient to justify Mr Ramathami's further detention.
Although I tend to agree with Mr Chirico in relation to this last submission concerning the Secretary of State's attempts to contact Mr Ramathami's visitors, I do not agree with his overall submission that there was little or no prospect by 31 December 2010 or at any point in the period from then until 11 July 2011, when he was released, that Mr Ramathami would be released in a reasonable period. On he contrary, I agree with Miss Busch that, as she put it in her closing submissions, the Secretary of State was continuing to treat Mr Ramathami's case as a "live case" which had not yet "reached the end of the road". I agree with her, in particular, that the fact that an advertisement had only recently been placed in the Tanzanian press and that consideration was being given to doing the same thing in the Kenyan press demonstrates that this was being treated as a "live case". I accept also that, although Mr Chirico might seek to characterise the Secretary of State's dealings with the Kenyan and Tanzanian authorities as having come to an end, the reality is that the Secretary of State had not yet given up on those dealings, with the Strategic Director referring specifically to "the result of some of the checks" being "still awaited" when deciding on 6 June 2011 that Mr Ramathami should remain in detention. This was a reference to the Tanzanian authorities probably rather than the Kenyan authorities, but either way the Strategic Director's approach shows that the case was not regarded as one in which the Secretary of State had, in effect, given up and taken the view that there was no longer a realistic or sufficient prospect of removal, still less that she was merely trying to bolster a defence to a threatened unlawful detention claim by Mr Ramathami.
I agree, in sum, with Miss Busch's submission, in her skeleton argument and essentially repeated in her closing submissions, that from the start of Mr Ramathami's detention in August 2009 to the time when he was released, and critically in the period to which the present claim relates (31 December 2010 to 11 July 2011), the Secretary of State made concerted efforts to bring about Mr Ramathami's removal. Those efforts were thwarted by Mr Ramathami's attitude, but they were meaningful and it does not seem to me that there ever came a stage where the Secretary of State had, in effect, given up on effecting removal.
I agree, in particular, with Miss Busch's submission that care needs to be taken, when considering a claim such as this, not to approach the case with the benefit of hindsight which the passage of time necessarily brings with it. This was the point made by Carnwath LJ in R (Krasniqi) v Secretary of State for the Home Department [2011] EWCA Civ 1549, at [12]:
"… To found a claim in damages for wrongful detention, it is not enough that, in retrospect, some part of the statutory process is shown to have taken longer than it should have done. …".
As I have previously explained, the Secretary of State could only act on the basis of the information which was available to her at the time. Similarly, she could only make an assessment on the prospects of Mr Ramathami being removed on the basis of the information which was available to her at the time.
Therefore, although in retrospect it is not in dispute that the Secretary of State's attempts to 'document' Mr Ramathami were unsuccessful, and indeed even now the efforts directed towards the Tanzanian and Kenyan authorities have still to lead to anything, this cannot mean that, without more, the conclusion to be reached is that there were removal prospects which were not realistic or sufficient. I consider that this is the position even though there were contemporaneous indications that the Secretary of State was unclear where her inquiries of those authorities might lead. It might be different if it could be shown that the Secretary of State had no expectation that the inquiries would lead anywhere, but that does not seem to me to have been demonstrated in the documents which I have seen, and I see no reason to disbelieve what is stated in the various detention reviews about the Secretary of State still awaiting responses and so, implicitly, expecting that something might come of the inquiries which had been made.
Accordingly, I agree with Miss Busch that, although Mr Chirico can make the various points which he did concerning the various steps taken by the Secretary of State, in each case highlighting that those steps failed to yield results, it would be wrong to conclude that, in the period with which Mr Ramathami's claim is concerned, the stage had ever been reached where there the prospects of his removal had ceased to be realistic or sufficient. I am satisfied that the Secretary of State had not reached that conclusion. More pertinently, perhaps, given that, as Keene LJ put it in R (A) at [75], "the ultimate decision" is mine, I am myself satisfied that there remained at all material times a realistic or sufficient prospect that Mr Ramathami would be removed. I make it clear that this is a conclusion which I have reached in relation to the entirety of the period from 31 December 2010 to 11 July 2011, and so to the period after 1 June 2011, when Mr Ramathami's legal representatives wrote the letter before claim to which I have referred, or the period after 6 June 2011 (not 14 June 2011, as referred to in Mr Chirico's skeleton argument), the date of the Strategic Director's decision to maintain Mr Ramathami's detention.
Conclusion
In all the circumstances, I conclude that the Secretary of State acted lawfully in maintaining Mr Ramathami's detention from 31 December 2010 to 11 July 2011. It follows that Mr Ramathami's claim must be dismissed.
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MRS JUSTICE SIMLER DBE :
INTRODUCTION
Mr Al Geabury gambled away £2 million on the roulette tables at The Ritz Hotel Casino ("the Casino") on the evening of 19 February 2014. The question raised by this claim is whether The Ritz Hotel Casino Ltd, the Claimant, is entitled to recover from him the sum of £2 million (plus interest) in respect of the cheque in that sum which he signed in return for gambling chips that evening, but which was subsequently dishonoured by him. At the heart of Mr Al Geabury's defence to this claim is his case that he suffers from "a very severe and serious gambling addiction which he is unable to control" and for which he claimed he was receiving treatment as at 8 April 2014 from Dr George Resek, a Consultant Psychiatrist (paragraph 1 of the Defence).
The case for the Defendant, Mr Al Geabury, by way of defence and on his counterclaim, is in outline that:
i) The consideration provided by the Claimant for the cheque was an unlawful consideration because the gambling facilities were provided in breach of the mandatory conditions of section 2.5 of the Social Responsibility Code of the Gambling Commission's Licence Conditions and Codes of Practice (May 2012) (referred to as "the Code") and therefore in breach of its gaming licence. Consequently, the provision of gambling facilities was unlicensed and unlawful by virtue of s.33 of the Gambling Act 2005 ("the Act"). It is the Defendant's case that this defence does not depend on any findings relating to his serious gambling addiction;
ii) Three further defences pleaded are no longer pursued. They are based on the Defendant's account of a conversation between him and Mr Roger Marris, CEO of the Claimant, at the Emirates Stadium on 19 February 2014 before he attended the Casino. First, that the transaction reflected by the drawing of the cheque was the product of actual undue influence exerted by Mr Roger Marris on 19 February 2014. Secondly, that it was induced by a misrepresentation made by Mr Marris, namely that credit facilities of £5 million would be provided to him. Thirdly, that there was a collateral contract entered into by the Defendant and Mr Marris on behalf of the Claimant pursuant to which the Defendant would be permitted to repay any gambling losses whenever it suited him to do so, and it was implicit in this agreement that the Claimant would not present the cheque for payment until instructed to do so by the Defendant. These defences are no longer pursued on the footing that the Claimant has accepted that if the Defendant's account of what was agreed by him and Mr Marris is accepted, the resulting transaction would have involved the provision of credit and would have been unlawful pursuant to s. 81 of the Act. Nevertheless the factual allegations are maintained.
iii) By way of counterclaim, it is said that the Claimant owed a statutory or common law duty of care to take reasonable steps to ensure that the Defendant was not harmed or exploited by the Claimant's provision of gambling facilities. The duty extended (among other things) to taking reasonable steps to prevent the Defendant from gambling at the Casino following the execution of a voluntary self-exclusion agreement on 22 November 2009 ("the 2009 VSE"). The Claimant breached its duty of care by re-admitting the Defendant to the Casino on and after 7 August 2012.
iv) Alternatively, the 2009 VSE was a binding contract requiring the Claimant to exclude the Defendant from the Casino for life and continued in full force notwithstanding the conduct of the parties in October 2010. His re-admission was accordingly a breach of contract.
v) In consequence of the breach of contract or duty, the Defendant has suffered loss which comprises (i) the sum of at least £4 million which the Defendant gambled at the Casino and lost since his re-admission in August 2012; and (ii) the sum of £2 million gambled and lost on 19 February 2014 (if the illegality defence fails). In addition, an already serious gambling addiction has been made even worse causing him to sustain financial losses at other casinos which might otherwise have been avoided.
vi) In addition, the Defendant complains that late bets were placed by him in the course of his gambling on 19 February 2014 and should have been returned; and finally, if he is found to be liable on the cheque he relies on an entitlement to an agreed discount of 10% on all gambling losses.
The Claimant's principal response in outline is:
i) The Defendant has failed to establish that he has or had prior to 2013 a gambling disorder, whether mild, moderate or severe. Neither the contemporaneous medical evidence nor the expert psychiatric evidence establishes such a disorder. The VSE forms signed by the Defendant do not prove a gambling disorder but are reactions to disputes with dealers as the Defendant has repeatedly acknowledged to be the case.
ii) Since he has failed to prove a gambling disorder, the 2009 VSE was signed for a reason other than a gambling disorder and/or given the circumstances in which the 2009 VSE was signed and/or because the Claimant had no knowledge of any gambling problem and acted reasonably in all the circumstances, either: (i) the 2009 VSE should not be treated as a real or genuine, or (ii) an agreed revocation of a VSE can be effective immediately or after six months.
iii) It follows that the defence of illegality must fail at least because the 2009 VSE was not in existence following its agreed revocation in October 2010 or at the time of the gambling on 19 February 2014. Other reasons also relied on as to why the alleged illegality defence fails include that there was no commission of a criminal offence because the Claimant did not have the mens rea, guilty knowledge or intent, required or alternatively, if strict liability sufficed the illegality did not carry with it the turpitude required to bar an action for illegality.
iv) As regards the counterclaim, the allegation of breach of contract fails because (among other things) there was a lawful revocation of the 2009 VSE.
v) As for negligence and breach of statutory duty, no statutory duty giving rise to private law rights of action is owed. There was no assumption of responsibility in relation to the Defendant by reason of an ineffective VSE and/or in any event any such assumption came to an end with the lawful revocation of the 2009 VSE. Furthermore, there is no general duty of care owed by the Claimant to the Defendant, even if he was a problem gambler. The question whether there is a duty of care to a pathological gambler does not arise on the facts of this case, in that even Dr Taylor did not regard the Defendant as presenting with a severe problem. Even if there was a duty of care, the Claimant was not negligent: it could not reasonably have been expected to have known of the Defendant's alleged gambling problem and it acted reasonably in all the circumstances.
vi) In any event, even if the Claimant acted in breach of a duty of care and/or in breach of contract, the Claimant's actions did not cause the Defendant to lose the sums counterclaimed. If the Defendant's gambling problem is as serious as he alleges, he would have reacted to exclusions from the Casino by gambling elsewhere and would have suffered these losses in any event. Further, there was contributory negligence by the Defendant in failing to make known to the Claimant his alleged condition (contrary to his pleaded case) to the extent of 100% thereby extinguishing all loss.
vii) Finally, the case on late bets and an agreed 10% discount is entirely unsubstantiated.
I am very grateful for the detailed oral and written submissions from Mr Clive Freedman QC and Mr Marc Delehanty, counsel for the Claimant, and Mr Kevin Pettican, counsel for the Defendant. I have considered all of the submissions with care but have necessarily not dealt with every point that they have raised.
Given that the burden of proof essentially falls on the Defendant in relation to the principal issues in dispute, at a case management conference before trial I directed that the Defendant should present his evidence first. Subsequently I directed that the Defendant should have the assistance of an Arabic language interpreter since English is not his mother tongue, albeit that conversations that lie at the heart of this dispute were in English and fall to be understood and interpreted in English.
In addition to the Defendant himself, three further witnesses of fact were called on his behalf, two business associates and friends, and his brother who was present at the Emirates Stadium and the Casino on 19 February 2014. I was also provided with CCTV recordings from the Casino on 19 February 2014 (showing the whole of the two hour period of gambling and conversations before and afterwards between the Defendant and Casino staff), which I was asked by Mr Pettican to (and did) watch from start to finish, albeit that only extracts were played in court by agreement of the parties. I heard from 12 witnesses on behalf of the Claimant, all employees. There was disputed psychiatric evidence: Dr Taylor on behalf of the Defendant; and Dr Needham-Bennett for the Claimant. They met before trial and prepared a joint report setting out areas of agreement and disagreement. Both attended at trial and were cross-examined.
THE FACTS
There is a substantial dispute of fact about matters that are central to the Defendant's defence and counterclaim; in particular, whether and if so to what extent, the Defendant had or has a gambling disorder. I first set out my views on the witnesses and then my findings of fact as to the material dealings between the Claimant and the Defendant in the relevant period, and the reasons for them.
The witnesses
A difficulty for some witnesses in this case is that some of the issues to be resolved relate to events which occurred some years ago. At the time of certain significant events there were documents prepared, largely by the Claimant's employees (but by others too, including the Defendant) in circumstances where there would have been no reason to anticipate questioning and, subject to some exceptions, no reason to record anything other than the truth as then understood. One important exception is documents prepared for regulatory or compliance purposes, where it is necessary to be more circumspect as to the motivation of those involved (both in relation to the Claimant and the Defendant) and to consider carefully whether the document should be taken at face value. Another exception are the notes of Dr Resek, as I shall explain below. Subject to those exceptions, in relation to older events, I consider that the contemporaneous documentary evidence is the most reliable evidence available to the court, and it has unsurprisingly been used by most witnesses to reconstruct what occurred or to trigger such recollection of particular matters and events as is now possible. Where possible I have based my factual findings on the contemporary documents, together with inferences drawn from those documents and by reference to the inherent probabilities that flow from them.
The Defendant is (on his own account) a Swiss citizen and a substantial international businessman involved in the financial world. He is obviously highly intelligent, highly successful and the evidence suggests fully familiar with technology such as smartphones and the use of email (he used a gmail account for emails in the material period). He gave evidence and was cross-examined over the course of two days. Although he had an interpreter (and I make no criticism of him whatever in this regard) I formed the view that he has a good understanding of English, and frequently answered questions without translation assistance, particularly when exercised and angry about the question being asked.
He was an intemperate witness, becoming irritated or heated when asked simple straightforward questions, and refusing or avoiding answering them. An early example suffices: he was asked to agree that he is a very wealthy man. He asked what was meant by "very wealthy", then said that he did not know, then asked a series of questions, effectively berating Mr Freedman QC who tried to assist him. The question had a simple answer that had been given by him in writing in a document dated 25 November 2014: his "capital assets, (inclusive of his art collection) are in excess of US$1 billion". On occasions he lost his temper altogether, shouting and gesticulating, for no apparent reason, and like Dr Needham-Bennett who formed the view that he had attended to tell his side of the story rather than be interviewed by a psychiatrist, it seemed to me that the Defendant came to court to argue his case and give only the evidence he wished to give, rather than to assist the court by answering factual questions asked of him.
His evidence was frequently contradicted by his own witness statement or by the contemporaneous gambling records or other documents and his response was to say that he meant something else by it, or that it "could have been humour", giving me the impression that he was prepared to say whatever he thought most likely to advance his case regardless of whether his answers were correct. At other times, he accepted that evidence given by Casino staff about what he told them was correct, but that he had not been telling the truth when he said it. For example, he accepted that Baum's evidence, that he told him in August 2013 that he only ever played with 10% of the money his company makes and once he loses that stops, was correct; he agreed he said that to Martin Baum (and there is evidence he made similar statements to Cameron Marvin and others, including a member of staff at a different casino - Mike Jones at the Clermont - albeit not accepted by him). However, he said that it was in fact untrue (though when pressed, he failed to give a coherent explanation as to why it was untrue). At these and other times the answers he gave were also internally inconsistent even when making allowance for any language difficulty he might have had.
Significantly, the Defendant was shown to have been untruthful in a number of important respects: (i) in his pleading, Voluntary Further Particulars, Responses to the Further Information Request, and in his witness statement he repeatedly states that he informed the Claimant's employees (identifying specifically Terry Beardall, Cameron Marvin, Martin Baum and several women duty managers) on numerous occasions about his gambling problem. Critically, at paragraph 72 of his witness statement he said that on 28 December 2013 "I told Mr Baum that I had signed the Aspinalls VSE form because I was addicted to gambling… " but, in cross-examination, he agreed that he did not mention gambling problems to Martin Baum, and he confirmed in re-examination that he never told anyone in the Ritz that he had a gambling problem; (ii) Dr Resek recorded the Defendant saying he gambled away "all money, no budget, ruination" but he did no such thing; (iii) Dr Resek recorded the Defendant saying his treatment was keeping him out of casinos but this was shown to be false by attendance records at the Casino on 25, 26 and 27 January 2014, and an attendance on 13 February 2014 at the Hippodrome casino.
Given the centrality of the Defendant's asserted gambling disorder which he claims he first recognised as long ago as 2000, and for which he then started to receive psychiatric treatment from doctors in England, Kuwait, Italy, Hungary and Switzerland, and which became serious and uncontrollable towards the end of 2009 with regular psychiatric help being sought, there have been considerable efforts on behalf of the Claimant to obtain disclosure of information and documents about this condition, and the nature and extent of the medical treatment. All that has been produced in response is a report by Dr Gupta dated 3 October 2014 and the letter and notes of consultations with Dr Resek between 8 January and 14 February 2014. I shall return to these below. Otherwise, requests and successive court orders have produced no identification of any other treating doctor (not even a name or address) and no documents whatever. During cross-examination the Defendant repeatedly indicated that he would be producing further documents by the end of the first week of trial, from treating doctors but again, without identifying them. He singularly failed to do so. This failure was highlighted in the Defendant's presence in court on the morning of Day 6 during closing submissions by Mr Freedman. At 3.32pm on Day 6, evidence having closed on the previous Friday, when Mr Pettican was bringing his closing submissions to an end, a document was produced to the court by the Defendant, said by Mr Pettican (on instructions) to be from a doctor, written in French. As Mr Pettican readily accepted, this was too little, too late and I refused to admit it.
Efforts have also been made in the circumstances, to obtain disclosure of the Defendant's emails from 2009 onwards by reference to a keyword search (in English and any other language used by the Defendant) including the words: addict, addicted, addiction, consultation, doctor (and dr), excluded, gambler, gambling, medication, prescription, psychiatric, psychiatrist, treatment, Gupta and Resek. The Defendant confirmed that a gmail account identified was the only one used during the time material to these proceedings and that he had carried out a reasonable search. However, the only emails disclosed as a consequence are promotional emails sent to the Defendant by the Claimant between 17 May 2013 and 18 November 2013; and promotional materials sent to him by other casinos and his responses where applicable between 2 September 2013 and 3 May 2015. The Defendant gave no explanation for the complete absence of any email from 2009 onwards about his asserted disorder or the medical treatment he says he was receiving: no email regarding medical appointments, treatment, drugs, or with any reference whatever to addiction or being addicted. This, in circumstances where his case is that he realised by late 2009 that he was seriously addicted, that his brother was regularly trying to persuade him to stop gambling but his gambling was so out of control that he was screaming, shouting, hurting his hands and breaking his rings, that he told everyone (even his mother) that he was an addict, that he was having regular psychiatric help, is nothing short of extraordinary. The result is that apart from the 2009 (and other) VSE forms, the letter from Dr Gupta dated 3 October 2014 and Dr Resek's notes from 8 January 2014 onwards, there is a complete absence of any contemporaneous document supporting the Defendant's account of his serious and uncontrolled gambling disorder and the regular psychiatric treatment he received.
Whether considered individually or cumulatively, these matters (and others identified below) lead me to conclude that the Defendant is a witness whose evidence I should approach with the highest caution, and unless independently and reliably corroborated, I have concluded that I cannot rely on it.
I have been provided with complete records of the Defendant's attendance at his regular casinos (including the Casino (at the Ritz)). They show whether he gambled at all on any particular visit, and if so what his stake was and whether he won or lost. From these records it is clear that the Defendant's level of gambling increased overall over the material period. However, that by itself does not entail that he had a gambling problem or disorder. I am satisfied that the careful analysis of the records (painstakingly analysed by Mr Delehanty) demonstrates the following:
i) There are many occasions when the Defendant attended the Casino (at the Ritz) and other casinos and did not gamble at all – demonstrating that he could control whether or not he wanted to gamble even when in a casino;
(See for example from Mr Delehanty's analysis,
(i) attendances at the Casino on dates throughout 2013: 24/01/13, 26/01/13, 05/02/13, 06/03/13, 05/04/13, 03/05/13, 31/05/15, 11/06/13, 12/06/13, 16/06/13, 18/07/13, 03/08/13, 13/09/13, 19/10/13, 25/11/13, 25/12/13;
(ii) attendances at Crown Aspinalls on dates throughout 2012: 27/09/12, 10/11/12, 11/11/12, 13/11/12, 18/11/12, 20/11/12, 01/12/12, 13/12/12, 14/02/12, 28/12/12;
(iii) attendances at Les Ambassadeurs on dates preceding the withdrawal of the Defendant's membership of the Ritz on 11 February 2011: 10/12/11, 18/01/11, 25/01/11, 28/01/11;
(iv) attendances at Genting casinos on dates either side of the revocation of the 2009 VSE (in October 2010): 19/09/10, 21/09/10, 23/09/10, 25/09/10, 27/09/10, 10/10/10, 16/10/10, 22/10/10, 27/10/10, 31/10/10, 01/11/10, 03/11/10;
(v) attendances at the Clermont on dates in the period preceding the revocation of the 2009 VSE (in October 2010): 12/06/10, 19/06/10, 05/07/10, 19/07/10, 13/08/10, 17/08/10, 06/09/10;
(vi) and finally, in relation to attendances on dates in the period preceding the 2009 VSE, at the Ritz Casino: 23/09/09, 26/09/09, 13/11/09, 18/11/09; at the Clermont: 6/09/09, 9/09/09, 05/11/09; and at the Genting casinos: 14/10/09, 19/10/09, 20/10/09, 04/11/09, 06/11/09, 07/11/09, 09/11/09, 10/11/09, 14/11/09, 15/11/09, 16/11/09, 17/11/09).
ii) When he did gamble, there were many times when the money he staked was three or four figures – demonstrating that he could control how much he wanted to gamble;
(The gambling records of the Defendant at the various casinos are replete with instances too numerous to list of this happening throughout the years from 2009 to 2014, but an instructive example comes from the records at Genting casinos on dates in the period preceding the 2009 VSE (when the Defendant's case is that his gambling was completely out of control): £1,000 on 13/11/09; £100 on 20/11/09; £2,500 on 21/11/09; and on dates either side of the revocation of the 2009 VSE (in October 2010): £2,300 on 22/09/13; £500 on 26/09/10; £2,400 on 11/10/10; £2,200 on 28/10/10; £2,500 on 29/10/10; £8,500 on 02/11/10)
iii) There were many occasions when the Defendant left the Casino with winnings – demonstrating that he could control when to stop gambling.
(Again, the casino records are replete with instances too numerous to list of the Defendant leaving with winnings throughout the years from 2009 to 2014. This is particularly demonstrated in the Ritz Casino records for 2013 and those for Crown Aspinalls in 2013 as well. Further, there are three examples in particular that undermine the Defendant's assertion that he had a masochistic compulsion to lose: throughout all his years of gambling at Les Ambassadeurs (ending in February 2011) he was a net winner of £295,077 (on a drop of £1,786,450); throughout all his years of gambling at the Clermont (ending in November 2010) he was a net winner of £58,110 (on a total drop of £499,010); and, he was a net winner of £46,588 (on a drop of £259,700) for 2012 at Crown Aspinalls. These results could not have occurred if the Defendant had a compulsion to keep playing until he lost.)
In light of other evidence, and in particular, the records just referred to, the evidence of the Defendant's brother, Firas Abdullah, Innocenzo Di Palma and Tarik Hani did not, in my judgment, support the existence of a gambling disorder. Their broad, general statements about the Defendant and his gambling were directly contradicted by the attendance records at casinos. In Mr Abdullah's case, the assertion that he repeatedly sought to dissuade the Defendant from gambling is totally inconsistent with the CCTV evidence that showed him sitting mute and passive throughout the Defendant's gambling on the night of 19/20 February 2014. The attendance records demonstrate that when the Defendant attended with his two associates, his level of gambling was relatively small and controlled or he did not gamble at all, a far cry from their evidence that the Defendant was out of control. The records afford no support for Mr Di Palma's evidence that he tried in vain to dissuade the Defendant from gambling given the number of times they attended together and no or little gambling occurred; or Mr Hani's assertion that the Defendant could not stop gambling till he had lost all his money, and even when he won, he would continue until he had lost everything. Moreover, Mr Di Palma could not explain why he went so regularly to eat with the Defendant at the Ritz if he had such concerns about the Defendant's gambling. Their evidence, together with the Casino attendance records of the Defendant's visits with others, suggests that the Defendant frequently gambled in the presence of business partners and friends.
I agree with Mr Freedman that the presence of these associates and friends at the Casino when the Defendant was gambling paints a picture of a successful man engaged in a highly effective business with many clients, using the Casino as a place to engage in effective networking and a leisure activity which relative to his wealth meant that his losses were of little or no consequence. It is the opposite of a man who lies to conceal his gambling. It is the opposite of a man who cannot concentrate on his business owing to a gambling disorder (as he suggested). It is the opposite of losing all his money and ruination (as he claimed to Dr Resek on 8 January 2014).
So far as the Casino witnesses of fact are concerned, I deal with specific findings below. In general I found them all to be careful and reliable. Their evidence was broadly consistent with the contemporaneous records where these are available. Each of them was prepared to state when they did not have personal knowledge of particular matters or any direct or specific recollection, and it seemed to me that they were all seeking to assist the court. In relation to problem gambling, there is no dispute that they had all received training in social responsibility issues and the signs of problem gambling. In this regard I was particularly impressed by the following:
a) evidence of Michele Leese, who with 40 years' experience, spoke about the profile of a "problem gambler" in her experience as follows:
" Well, we're trained to recognise symptoms of a problem gambler. There's quite a few, but the main ones are that a customer will come in and he will ask for help, he will say he has a problem. His friends and family will say: this man's got a problem and you should be stopping him. He will show remorse for the amount of money and time he's spent in the casino. He will -- you will see that his mood swings a lot, and he will -- sometimes when he's having a really bad problem, he will look depressed and he won't speak to anybody, he will look down, he will come in. They get a bit -- their personal hygiene goes out the window and they become very scruffy when they're on a low. They get a bit anxious when they can't get money. They will start to pester the other customers for more funds, become a nuisance. Also another indicator is a person who comes in and thinks gambling is a way to make money. … One or more [of these indicators], but generally speaking you can spot them straight away.
Q You observed Mr Al Geabury over many occasions. Did you see him indicating any of those features that you've just described? No.
Q Not even on the night of 19 February? No."
b) The evidence of Mr Roger Marris, CEO, who said that in forming the view that the Defendant was not a problem gambler he took account of Casino staff interactions with him:
"He had never said anything about problem gambling to us, he didn't show any – for our own social responsibility, didn't show any signs that he was a problem gambler, and there had been a number of conversations by the staff with him and he had never indicated that he was. …In fact he had indicated that he was in control of his gambling, that he would only risk a percentage of his wealth and sometimes what he made on that day or that period of time."
c) The evidence of Clive Pett, a Pit Boss on duty on 19 February 2014, with responsibility for overseeing the gaming operations on the floor of the Casino, and overseeing games attended by "big players" (playing for £500,000 or more). He knew the Defendant as a big player, and had watched him play regularly over many years (30, 40 or more times) and based on that play, his evidence was that he had no reasonable cause for concern that the Defendant had a gambling problem. His evidence was that he would have expected a change in the Defendant's behaviour if he had started to have a problem – shouting at or abusing staff, but that the Defendant carried on being "a very well-mannered gentleman" and there was no sign to him that he was other than his normal self. He said that the Defendant always played in the same way, starting betting once the ball was spun and then not looking at the wheel until the ball had dropped, and that his play on 19 February 2014 was no different from other occasions. He said that the Defendant had gambled away £1 million before in a shorter space of time, and that gambling for two hours in a stretch (without stopping) was not unusual, or indeed, very long in the context of regular players. He said moving between two or more tables was also quite normal, both for the Defendant and other players, and that the Defendant did not play according to set patterns, but rather, his play was random and his style was to place chips all over the table, just as he did on 19 February 2014 (as the CCTV shows).
d) Similar points were made by other employees: Amanda Hinton and Philippa Halpern both said that they had no reason to suspect any gambling problem. In their view, the Defendant was always very polite and nice, and was exactly the same on 19 February 2014 - even if he lost, he would still be very pleasant and polite.
The material events
There is evidence that the Defendant was a regular gambler at London casinos from at least 1996 onwards. He applied for membership of the Casino by a written application form dated 1 June 1999, identifying his nationality as Swiss. That application was accepted by letter dated 3 June 1999.
The 2009 VSE
On 22 November 2009 the Defendant signed a form excluding himself for life from gambling at the Casino. This is an important aspect of his case. He contends that this was an attempt to control his addiction. The very act of entering into a self-exclusion agreement at a time when no litigation was even contemplated, is relied on to support the existence of a gambling problem, and as putting the Casino on notice of the fact that he believes he is unable to control his gambling without assistance. As it was explained by Briggs J in Calvert v William Hill Credit Limited [2008] EWHC 454 (at [178]):
"… the very essence of self-exclusion is that a problem gambler, recognising in a moment of clarity that he is likely to succumb to his addiction in the future, seeks his bookmaker's assistance in helping him to control what he fears will be otherwise uncontrollable when temptation returns. He is, in effect, putting the bookmaker on notice of his fear that, at precisely the time when he wishes exclusion to be imposed upon him, he will himself be unable to control his gambling. Absent that fear, there would be no point in self-exclusion at all".
The Defendant says at paragraphs 13 to 15 of his witness statement:
"Returning to the end of 2009, I was aware of the fact that the casinos are required to operate a system under which a customer can voluntarily self-exclude himself for a period of time and must not be permitted to gamble.
My understanding of the above system is that the purpose of the voluntary self-exclusion regime is to allow a customer who has decided he no longer wishes to gamble to put it outside his control to gamble at a given casino in the future. I knew that if I wrote that I wanted to be self-excluded for life then the Casino would not allow me to come in.
In 2009, I decided to make use of the above voluntary self exclusion regime in an effort to address my casino gambling addiction which, by this time, was out of control".
It is also his case that before signing the 2009 VSE, he had already signed a self-exclusion form excluding himself from gambling at Grosvenor Casinos (on 12 October 2009), citing as his reason "Problem Gambling" which was written onto the form by him and a self-exclusion form excluding himself from gambling at Aspinalls Club (on 19 November 2009). Further, on the same day as he signed the 2009 VSE, the Defendant also signed a self-exclusion form seeking "permanent" exclusion from all casinos operated by London Clubs International.
The Claimant's case in relation to the evening of 22 November 2009 is that in the course of that evening the Defendant considered that one of the dealers had treated him in a manner which was rude and disrespectful. His reaction to that perceived mistreatment was to complete the 2009 VSE form. He did that only after a discussion with the Gaming Manager on duty that night (Terry Beardall) during which he made clear that he wished to sign the form because of his anger at his perceived mistreatment.
At paragraph 20 of his statement, the Defendant accepts that a dispute did arise between him and the Casino on 22 November 2009 relating to the placing of a bet, but asserts that this is not the reason why he insisted on signing the 2009 VSE. He states he had by then realised that he:
"was suffering from a serious casino gambling addiction and wished to ... put it beyond my power to gamble at those casinos in future. I considered that the dispute between me and the Ritz Club on 22 November 2009 over the placing of the bet (and my resulting agitation) was itself a manifestation of my addiction, …".
Despite that evidence, in cross-examination the Defendant repeatedly refused to accept that there was a dispute, suggesting at one point that he could not remember what happened in 2009, but it might be correct. Later, in answer to questions about a VSE he said he signed in February 2011, he said this:
"Ask your manager. Normally whenever something makes me upset I make a self-exclusion form immediately. I make it 20 times or 30 times."
Mr Terry Beardall's evidence (at paragraph 8 of his witness statement) is as follows:
"On 22 November 2009, I was working at the Casino and was present when the Defendant signed a self-exclusion form and I specifically recall the details of the incident on that night. Prior to the Defendant signing the self-exclusion form, I recall that there had been an incident between the Defendant and one of the dealers. The Defendant was playing in a private room at the Casino, the Carmen Room, which is off the main Casino floor. One of the roles of the dealer is to say 'no more bests', but the Defendant was becoming irate when the dealer was making that call. I approached the Defendant to calm him down and explained that the dealer did need to say 'no more bets."
He continues at paragraph 9:
"On that same night, a little later, I was called to reception, and I believed that the Defendant wanted to resign his membership. The Defendant said 'I have had enough', and I understood that he was referring to the dealers calling 'no more bets' and he stated to me that he wanted to exclude himself from the Casino. I asked the Defendant if he understood about self-exclusion and that he would not be allowed back to the Casino. I explained to the Defendant that if he signed he would not be able to return to the Casino and that it would be better to cancel his membership but he insisted on signing the form as he was upset by the dealer. The Defendant responded by saying words to the effect of 'just give me the paperwork'."
Although no customer interaction log or form was completed as it should have been, Mr Beardall was barely challenged on this account in cross-examination. I accept his evidence as to what happened on 22 November 2009 and the circumstances in which the Defendant came to sign the 2009 VSE.
I do not accept Mr Pettican's argument that what Mr Beardall says at paragraph 9 is a separate transaction from paragraph 8. To the contrary, the Defendant understood the reference to "I've had enough" to be a reference back to the dealer's call of "no more bets" referred to in paragraph 8 and Mr Beardall was well placed to connect the two events, particularly given his statement that the Defendant "insisted on signing the form as he was upset by the dealer". In light of all the evidence, I find it plausible that this defendant would wish to self-exclude solely as a result of a dealer calling "no more bets". (Indeed, there is evidence that a later dispute for exactly this reason with the Clermont led to him self-excluding in November 2010.) The fact that all roulette dealers are required to make this call simply as part of the game is neither here nor there. Moreover, Mr Beardall's account is supported by documented references to a dispute that night in later letters and documents produced around the time of the revocation of the 2009 VSE: the letter signed by the Defendant dated 20 July 2010, the email of Mr Cullimore, sent on 21 July 2010 at 14:22, and the form signed by both the Defendant and Mr Beardall on 8 October 2010, all of which I return to below.
The 2009 VSE signed by the Defendant makes no reference whatever to problem gambling. Although he used words indicating that he wished to self -exclude "for life" the printed form itself made clear that the maximum term of self-exclusion available to customers of the Casino was five years. The Claimant accordingly treated the self-exclusion as for a period of five years in the circumstances, and in my judgment was entitled to do so. That is reflected in the letter dated 23 November 2009 written to the Defendant at the address in Switzerland given by him on his membership application form and to which he was written previously. I have no reason to doubt that the Defendant received that letter, despite his denial of receiving it for the first time in cross-examination.
At paragraph 27 of his witness statement, the Defendant said:
"Despite my efforts to put Casino gambling beyond my reach by signing VSE form is excluding myself for life from the casinos at which I gambled; the urge to gamble remained and in July 2010 (only a matter of months after having voluntarily self-excluded myself for life) I sought to be readmitted to gamble at the Ritz club."
He referred then to the letter of 20 July 2010 (seeking readmission to the Casino), saying that he did not write it, but that it was prepared and shown to him "as a letter I signed" but "did not reflect anything which I had said". At paragraph 30 he continued: "I was told by Mr Roger Marris and Andrew Loves that if I wanted to gamble again they would prepare a letter and if I signed the letter I would be permitted to gamble. I do not recognise my signature on the letter." At paragraph 13 of his Voluntary Further Particulars, the Defendant did not admit signing the letter.
In fact, Roger Marris did not join the Claimant until November 2011, so it is accepted that the Defendant is wrong in that regard. It is also now conceded that the Defendant did in fact sign the letter of 20 July 2010. However, he maintains that he did not write it and that what is set out in the letter was not, as a matter of fact, true. His case is that it was written by somebody at the Casino (despite his gambling problem) solely in order to secure his re-admission, as he had been led to believe that this is what he had to do to gamble again.
The letter of 20 July 2010 is typed in perfectly grammatical English, and is self-evidently not written by the Defendant. There is no evidence about who wrote or typed the letter of 20 July 2010. The Claimant's case is that it was written by somebody outside the Claimant on the Defendant's behalf and handed to Mrs Barrett on 20 July 2010, but I did not hear from Mrs Barrett. Whoever wrote the letter, the Claimant's case is that it must have been written on the Defendant's instructions.
So far as material, the letter states that the Defendant wished to retract his previous instruction to self-exclude for life, continuing:
"At the time I was very upset at how the dealer treated me at the table; he was rude and disrespectful towards me. I have self-excluded at other Mayfair casinos for similar reasons and wish to point out that this has nothing to do with gambling. I would like to stress that I am happy to visit casinos and play as long as I am treated respectfully. Would you please remove this instruction at your earliest convenience?"
I have already found that there was a dispute with a dealer on the night of 22 November 2009 and that the Defendant perceived that the dealer had behaved disrespectfully towards him. The contents of this part of the letter accordingly reflects what happened that evening as independently recounted by Mr Beardall, who I accept had no input into writing that letter. It is also the case that the Defendant had self-excluded at other Mayfair casinos at the time. For example, on 10 December 2009 at the Clermont casino, the Defendant signed a VSE form for life but on 11 June 2010, an internal email from Mike Jones at the Clermont club records that the Defendant had:
"explained that his previous resignation was not the result of problem gambling but solely related to the negative attitude of one member of the table staff…the Defendant also explained that he is a person of considerable wealth and only gambles for fun; he said he takes a small percentage of its profit from his various business interests and only gambles that amount…; "
On 12 February 2010 the Defendant signed a VSE for life for Genting casinos, also retracted subsequently as having been based on a dispute and not a problem gambling (see letter of 8 September 2010).
The contents of the 20 July letter are further supported by casino attendance records showing the Defendant attending casinos regularly, even on a daily basis, in the period preceding the 2009 VSE (for example every day from 13 to 18 November 2009 when no gambling occurred) and either not gambling at all or gambling with relatively small stakes, consistent with him being in control and not out of control of his gambling. Of real significance also is the attendance record for Grosvenor Park Tower, which shows very controlled gambling by the Defendant on 23 November 2009 with a buy-in of £100 and on 24 November 2009 with a buy-in of £2,000.
In the circumstances (whoever physically typed the letter) I am satisfied that it was written on the Defendant's instructions and at his request; and moreover that its contents reflect the true state of affairs in November 2009, rather than a construct written only to secure re-admission and on instructions from Casino staff. In other words, whereas if taken at face value, the 2009 VSE might be regarded as strong evidence of a gambling problem and of self-excluding as a consequence, in light of all the evidence, and in the absence of any medical or other independent evidence supporting the existence of a gambling disorder, I do not accept that the 2009 VSE supports that conclusion here. Nor do I consider that it put (or should have put) the Claimant on notice of problem gambling in the circumstances.
The letter of 20 July 2010 was passed to Mr Timothy Cullimore, the Claimant's then CEO, who sent an email on 21 July 2010 timed 14:22 stating in reference to the Defendant that:
"… despite ticking the "for life" box has lifted his ban from other casinos. He has been spoken to by senior management and has confirmed both in writing and verbally that he didn't exclude because of a social responsibility related problem."
Mr Cullimore was prepared to lift the exclusion unless anyone had information to the contrary.
The Claimant's Compliance Director, Alexa Brummer, received this email and replied on 21 July 2010 stating that:
"… we are prevented from acceding to the request he made in his letter, despite his protestation now that it was because he was unhappy with the dealer and his self-exclusion must stay in place for at least 5 years. "
Mr Cullimore agreed unequivocally by email on the same day at 16:08 and at 17:46 that afternoon, Lyndsey Barrett, Director of Operations, emailed asking Mr Cullimore or Ms Brummer to write a letter, deliver it to the Casino so that it could then be given by hand to the Defendant.
Ms Brummer agreed to prepare the letter (20:18 email) and did so the following day. The letter is addressed to the defendant at 35 – 37 Grosvenor Square, W1, and is in the following terms:
"Unfortunately we are unable to accede to your request for the following reasons. When you requested self exclusion from the casino you were spoken to by Terry Beardall, Gaming Manager, who explained the procedure and consequences of undertaking such a step, including the fact that once entered into self exclusion cannot be rescinded. Nonetheless you then signed the form on which you requested a lifetime self exclusion. The form, a copy of which is attached, explains that the maximum period of exclusion is five years and we therefore take any lifetime self exclusion as meaning a five year exclusion. "
Despite your further explanation now that you were upset at a dealer, because you have given us a written request for self exclusion we are legally unable to reinstate your membership until the expiry of the five-year maximum period as this would be a breach of our licence conditions.
Once again, we are sorry that we are currently unable to comply with your request."
Ms Brummer asked Lyndsey Barrett whether the letter would be collected by the Casino or should be posted (email 22 July at 11:55). Lyndsey Barrett asked for it to be sent to the Casino as "I may go with Cameron and meeting early next week to explain further, as his English is not very good, spoken or written and I want to try and make him understand as best as possible.…".
On 12 August 2010 the Defendant sought entry at the Casino with a guest (Mr Charles Riachi). An email from the Duty Manager, Fizzy White, to Alexa Brummer and others that evening, states that when the person on reception realised who he was, he was asked to leave:
"as he has self excluded himself and cannot be allowed entry, Riachi asked me why and explained the situation to him, apparently (the D) thought that Charles would be able to have him reinstated and that's why he asked Charles to bring him in. They left the building immediately without any problem and Charles apologised before he left and said he did not know otherwise would not have brought him in."
Alexa Brummer responded stating that she was relieved that "this self excluded man did not get as far as the gaming floor… I will need to investigate what exactly happened."
On 19 August 2010 Alexa Brummer sought confirmation from Cameron Marvin, Director of Customer Relations, by email at 12:45 that the refusal letter had been successfully delivered. There is a slightly odd email exchange between Cameron Marvin and Lyndsey Barrett that followed with Mr Marvin asking whether Mrs Barrett had had any news about the Defendant, stating: "Alexa is asking me if the letter has been delivered she said it should have been delivered three weeks ago." Ms Barrett responded: "no haven't spoken to Alexa will do it when I get back. Let her know that we delivered the letter to his office a few days after she sent it over."
It is common ground that Mr Marvin visited the Defendant at his office in this period, although the purpose of that visit is in dispute. The Defendant asserts that the visit was for the purpose of seeking to encourage the Defendant to return to the Casino and the letter was never delivered or received by him. Instead he states that Mr Marvin sought to persuade him back telling him that there was a new chef, beautiful girls, and that he could play the way he liked. I accept Claimant's evidence that there was no new chef and that escort services have never been provided by the Casino, as suggested by the Defendant. In any event, the Defendant's account is improbable in the circumstances described above and I reject it: the Compliance Director had written a refusal letter and issued instructions to refuse re-admission, so it would have been futile (as Mr Marvin said) to seek to persuade the Defendant back; and it is inconsistent with Defendant's attendance with a friend in order to achieve reinstatement and the absence of any protest from him when he was refused entry.
Mr Marvin gave firm evidence which I accept, that he was asked by Mrs Barrett to deliver the letter with her, and that they did this together, attending on two occasions at the Defendant's office because on the first occasion he was not there. I also reject the Defendant's evidence that Mr Marvin was making unsolicited visits and calls to him. Although there is an email from Mrs Barrett which refers to Mr Marvin "popping out keeping the relationship alive", she has since left the Claimant and did not give evidence, and I accept Mr Marvin's evidence that he made no unsolicited calls or visits, but that the Defendant called him more than once to ask about re-admission and they used to bump into each other in Shepherd Market. It was clear from his evidence that Mr Marvin found the Defendant charismatic, and chatted to him on those occasions, as Mrs Barrett no doubt knew.
On 10 September 2010 the Compliance Manager at the Gambling Commission, Henry Kirkup, visited the Casino and met with Mrs Barrett. It is clear from an email he sent later that day, that Mrs Barrett raised with him the case of the Defendant who had completed a problem gambling self-exclusion form for life in October 2009 (after an incident with a dealer) but the incident had nothing to do with "problem gambling". Although I heard no evidence from Mrs Barrett, in light of Mr Marvin's evidence and this email, it seems to me most likely that the matter was raised by Mrs Barrett on that occasion, in part because the Defendant had continued since 20 July 2010 on various occasions to request re-admission, including on the occasion of the delivery of the letter dated 22 July 2010, on 12 August 2010 and in those informal conversations with Mr Marvin I have referred to; and in part because it was in the commercial interests of the Casino to readmit an attractive player who signed a VSE in circumstances where this had nothing to do with problem gambling. Mr Kirkup gave advice on the express understanding that the Defendant had contacted the Claimant (not the other way round) and confirmed that he did not have and never had had a problem with gambling, and wished to return. I have already found that this is precisely what had occurred. His advice was as follows:
"It is unfortunate that the customer signed a self exclusion form if that was not his true intention. Clearly there is a responsibility on both parties to ensure that they understand the commitment being made. We should also bear in mind that those who do have problem gambling can be very devious and you will need to be confident as to all the circumstances before coming to a decision."
The period of self exclusion is in the ordinary code provision of Licence Conditions and Codes of Practice. This meant that the period is suggested practice but not an absolute. However any operator choosing not to comply with an ordinary code provision should have clear and well argued reasons for this
The status of ordinary code provisions is explained on page 22 of the LCCP. These codes generally set out good practice.
May I suggest that if a similar situation arises in the future and a member wishes to cancel his membership because of a complaint or grievance (not problem gambling) you consider some type of written request to cancel club membership as opposed to using a problem gambling exclusion form."
Lyndsey Barrett forwarded the email to Alexa Brummer on 17 September 2010. It appears that she received no response to that email because by a further email dated 1 October 2010 she repeated her request, indicating that she would like to:
"sort out the above self excluded gentleman".
Her email continues:
"he sent in the letter a number of weeks ago stating that he hadn't self excluded because of a gambling problem but that he was upset with a dealer. Cameron and I had a meeting with him and Mr Al Geabury confirmed that he did not have a gambling problem. The night he excluded Terry Beardall spoke with him and explained what he was doing and it would be better for him to cancel his membership as he also told Terry that it was not a gambling problem but one of our dealers had upset him but he still insisted on signing the form. I would like to reinstate him and I await your comments and hopefully instructions."
Although she had no clear recollection of it, it appears from her email reply at 11:54 on the same day, that Ms Brummer must have spoken to somebody at the Gambling Commission, and in particular to the Head of the Casino section, Bob Good, because her email refers to his and Henry Kirkup's comments in this regard. Ms Brummer explained in evidence that their comments were to the effect that it was up to the customer to decide how long he wanted his self-exclusion to last and that it was possible for the customer to change his mind provided that six months had elapsed. Accordingly, having received that advice from her regulator, the Gambling Commission, and six months having elapsed and the customer having expressed a desire to come back to the Casino, she was happy to authorise this. However she stressed that she wanted the Defendant to acknowledge again that he did not have a gambling problem, either then or at any other time.
Ms Brummer was away for the first two weeks of October 2010 but by email of 4 October 2010 Mrs Barrett asked Gary Rolfe whether he was happy to have the Defendant back playing, and suggested that Mr Rolfe should interview him if so, or alternatively she suggested another manager could sit down with Cameron Marvin and the Defendant. She stressed that a form should be filled out after the suggested meeting.
A form entitled "end of self-exclusion waiver" was produced by the duty manager, Michelle Leese, at some point before 2am on 8 October 2010, but was never used. As she accepted, the form incorrectly refers to a self-exclusion for eight months from 22 November 2009 which did not occur. Instead, I find that Mr Beardall met with the Defendant on 8 October 2010 when the Defendant attended the Casino prior to the revocation of the 2009 VSE, and the Defendant confirmed to him (both verbally and in writing) that the only reason he signed the 2009 VSE was because of a problem with the dealer. Mr Beardall's evidence to this effect is supported by an email sent to Ms Brummer dated 9 October 2010 stating: "he confirmed in writing and verbally that he did not have a problem with gambling but had a problem with a dealer" and by an email sent in the early hours of 9 October 2010 by Cameron Marvin to similar effect.
Neither Mr Marvin nor Mr Beardall could explain precisely how the written confirmation document signed both by Mr Beardall and the Defendant came to be produced. However, Mr Beardall was certain that both he and the Defendant signed the document on the evening of 8 October 2010 when they were together. In that form the Defendant confirms that he self-excluded on 22 November 2009:
"purely because of an incident with a dealer that evening. I would like to state for the record that I do not have and never had a problem with Gambling".
Beneath his signature, Mr Beardall confirms:
"that Mr Al-Geabury was upset by one of our dealers and left the premises as a result of this incident and for this reason alone".
When asked about this form in cross-examination, Mr Beardall stated:
"… I confirmed that there was a problem with a dealer. I explained the situation on the night, which I think actually concurred with Mr Al-Geabury's statement that he actually said exactly the same as I was saying, and then the letter would have been composed. I agreed with the letter when I read it. I agreed with what happened on that night and I signed it".
In light of all the evidence (including the absence of evidence to which I have already referred, and the expert evidence referred to below) I accept the truth of the statement attributed to the Defendant in the 8 October 2010 form, to the effect that he did not have and never did have a problem with gambling. My conclusion is not affected by the fact that the document was produced by a member of Casino staff and contained their words rather than the Defendant's own words. I am satisfied that the form was completed on his instructions and reflected his true position. He was not simply signing a document in order to gain re-admission. The 2009 VSE was not lightly retracted. The Claimant re-admitted the Defendant to the Casino following persistent requests from the Defendant to allow him back, and only upon the advice of the Gambling Commission that it was possible to do so.
Some criticism was made of the failure by either Mr Marvin or Mr Beardall to identify a 24 hour cooling-off period that evening, but it is clear from the attendance records that the Defendant did not in fact return to gamble until at least that period had expired.
The Defendant relies on the fact that within weeks of being re-admitted to gamble by the Claimant, the Defendant self-excluded from the Clermont casino, with reliance placed particularly on an internal email dated 4 November 2010 from Mike Jones at the Clermont stating "the above has self-excluded as a problem gambler and should not be allowed entry to the club". The Clermont's surveillance report dated for November 2010 indicates that this occurred following a dispute about a late bet, which the defendant continued to dispute even after he was shown footage of the disputed spin. I have no reason to doubt that the dispute (and not problem gambling) led the Defendant to sign the VSE on that occasion.
Earlier, as identified above, the Defendant signed a VSE form 'for life' at Genting Crockfords' casino. On 8 September 2010, the Defendant applied in writing to lift the VSE as being "an overreaction to particular circumstances" and said that he did not have a problem with gambling. Information about this VSE was shared by Genting and the Claimant, but it is clear from an internal email sent by Gary Rolfe, the Claimant's Gaming Director, on 6 November 2010 at 22:39 to Casino staff, that what was shared was the circumstances of the Genting VSE as being other than for genuine or social responsibility reasons. Cameron Marvin thought this was a tactic used by the Defendant, just as he used other "tactics". He said:
"He would say -- as he used at the Colony -- he would say he wasn't allowed to use his debit card at Crockfords, then he'd go to the Colony, draw off his debit card and if he had won, it wouldn't be a problem, but if he lost, he would say he wasn't allowed to draw the money and so get his money back".
Mr Marvin described this as the Defendant getting "an each way bet".
Mr Pettican suggested that the Defendant's conduct in seeking to place external controls on his gambling by having a casino "ban" him from playing for short periods of time (something he also tried to do at the Casino), was only explicable on the basis that the Defendant was not, himself, able to control his gambling. I disagree. I am satisfied that for the Defendant, this was a means of getting an each way bet, as he had come to realise, and entirely explicable on this basis. As Michele Leese explained in cross-examination:
"I was never under the impression that the gentleman had a gambling addiction or was a problem gambler. I believe he was a gentleman who likes to win and when he asked me not to return his TT funds or let him play, I believe it was because he wanted to go away winning…I know the Defendant well. He was a very difficult customer and he was always looking to cause a dispute with various ways, the way he played, asking us to do things, and then if you didn't do them, then he would use that as a cause to complain. It was always about – because he was a bad loser."
On 10 February 2011, an incident occurred whilst the Defendant was gambling at the Casino, described in a later internal email dated 6 August 2012 as follows:
"[I]n February of 2011 we had a huge dispute with him, a dealer incorrectly placed his chips on the layout and he basically threw his toys out of his pram. He shouted and screamed and again mentioned self-excluding himself from the club, at this point Lyndsey decided to withdraw his membership as he was becoming too much of a problem".
The Defendant accepts that he was agitated to the point of shouting and screaming as a result of this incident. He asserts that he knew this was a symptom of his gambling addiction, and signed a further VSE with the Casino.
The incident was dealt with by a Duty Manager, Fizzy White. She gave evidence (which I accept) that the Defendant was angry about the way the pit boss dealt with a bet and complained to her about this mistake, asking to self-exclude. Given the experience of his previous self-exclusion for non-social responsibility reasons, she suggested that he calm down and think about it. He accepted that advice, leaving the Casino for the evening. That account is supported by a contemporaneous handwritten record which confirms the Defendant's wish to self-exclude, the fact that he was told to calm down and think about it and left; and the fact that later that evening his membership was withdrawn by Michelle Leese. In an email dated 10 February 2011 at 21:53, Ms Leese recorded that she had reviewed the incident and "found no fault with the table staff in regard to their behaviour and how they handle the dispute. They remained passive and professional throughout his tirade. …" By letter dated 11 February 2011 the Claimant informed the Defendant that his membership of the Casino had been withdrawn with immediate effect. There is also a form stamped 'withdrawn' in relation to the defendant, and in an email dated 11 February 2011, at 17:31, Ms Leese confirmed that the Defendant's membership had been withdrawn and that he was aware of this.
In light of the contemporaneous documents, together with the evidence of these witnesses and Ms Brummer who had an impressive command of the Claimant's VSE records, I reject the Defendant's assertion that he signed a VSE on the evening of 10 February 2011. I am quite sure having seen them give evidence, that no member of the Claimant's staff would conceal or destroy any document, still less a document of regulatory importance such as a VSE form. I am quite satisfied that the Defendant responded angrily yet again to perceived mistreatment, and again threatened to sign a VSE form but did not do so. That threat had nothing whatever to do with gambling addiction or problems, but was attributable to his anger in that moment.
That conclusion is not altered by the 'VSE for life' forms signed by the Defendant at other clubs in the same period. Within days of the incident on 10 February at the Casino, the Defendant signed such a VSE at Les Ambassadeurs on 16 February 2011, and wrote a letter to Les Ambassadeurs stating that he wished to cancel his membership for life due to problem gambling, stating "I AM ADDICT". That statement cannot be taken at face value given the record of a conversation the Defendant had subsequently with a manager, conducted on 12 February 2014 at Les Ambassadeurs, in which he stated that "he did not have a gambling problem at all and that he had written that on the form because he was angry over a bet that was not paid." Similar reliance is placed by the Defendant on the VSE form signed 'for life' at Crown Aspinalls on January 2011. But again, by a letter dated 27 September 2012, which he signed, the Defendant sought to revoke the Crown Aspinalls' VSE stating that he had "never had a gambling problem and that [his] request for a life time VSE made on 6th January 2011, was the result of a dispute [he] had with a gaming manager at Aspinalls.". There is also a record of a conversation with him completed by Crown Aspinalls' manager Howard Aldridge in which the Defendant is recorded as saying that the VSE was a result of a dispute with the manager, that he had done this at other clubs as well, and that he is a measured and controlled player.
In his witness statement the Defendant says that as far as he can recall he made no attempt to gain re-admission as a member of the Casino following that termination of his membership. He does however, recall contacting Andrew Love and Roger Marris in about July 2012 at a time when he was trying to assist a friend called 'Nora' who was in dispute with the Claimant. He states that both responded by encouraging him to rejoin the Claimant and gamble, drawing attention (at paragraph 61) to internal emails showing that the Claimant was "extremely keen to readmit me as a member, .. even providing me with gifts." He notes in particular an internal email from Mr Rolfe to Andrew Love and copied to Roger Marris of 31 July 2012 in which he states "we struggled to deliver the flowers again" in support of this assertion.
This evidence and the suggestion that the Claimant was showering the Defendant with gifts and in particular with flowers in order to entice him back was undermined by the debtors logs concerning the case of Ms Noora Al Daher, produced during the course of the trial. The first entry actioned by Gary Rolfe, dated 22 July 2012, refers to the Defendant contacting the Claimant on behalf of Ms Al Daher, and seeking to intervene in a dispute over a debt on her behalf. The second entry dated 24 July 2012 is actioned by Andrew Love who have spoken to the Defendant and was told that there was little or no point in pursuing the debt during Ramadan but that it would be paid immediately afterwards. In that context, in a further entry dated 25 July 2012, again by Mr Love records that it was suggested, in context by the Defendant, that "we send some flowers and chocs to her in UK as she is unwell" and that the Defendant "mentioned something then about his own membership and AL suggested he speak with Gary directly". This demonstrated that Mr Rolfe's email of 31 July 2012 referring to flowers was in the context of flowers for Ms Al Daher and not for the Defendant. The Defendant's attempt to suggest otherwise was untrue. Moreover, the debtor logs also demonstrate that it was the Defendant who raised re-admission, and not the other way round.
A further debtors log entry of 7 August 2012 shows that a meeting to discuss Ms Al Daher took place on 6 August between Mr Love and Mr Marris and the Defendant, and I infer that the question of readmission was also discussed. This conclusion is supported by an email at 23:50 on 6 August in which Mr Rolfe set out his understanding of the problems and disputes the Claimant had had with the Defendant, concluding that he was happy to allow him to rejoin provided there was an interview that could be logged "to cover us should any problems arise in the future"; and a response on 7 August 2012 at 9:28 from Mr Marris referring to 'yesterday's' discussions about re- admission and the Defendant being "aware of the level of behaviour that is permitted and not permitted". Mr Rolfe responded in what I regard as a telling email, as follows:
"My main point of concern that I think needs to be addressed is his consistent mentioning of 'Self-excluding', Self-exclusion is a term used when defining someone who has a problem gambling not to use when you are angry or upset with the manner in which you have been dealt with in the club. I think this needs to be mentioned as from what I remember of dealing with him in the past he does not like losing."
In context I am satisfied that Mr Rolfe's reference to "covering us should any problems arise in the future" was not to the possibility of problem gambling being a feature, but rather to the Defendant's habit of using mini-exclusions, or the threat of VSEs to get 'each way bets' and thereby avoid losing.
The Defendant was interviewed over the phone on 7 August 2012 by Roger Marris. Mr Marris made clear the level of behaviour expected from the Defendant and decided to reinstate his membership. Later that evening at 22:30, the Defendant attended the Casino and was interviewed by Cameron Marvin, to make sure that problem gambling was not the reason for his 2009 VSE and his threat to sign a further VSE in 2011. There is a contemporaneous Customer Interaction Log recording the interview between Mr Marvin and Defendant at the time of his re-admission. This confirms that the reason for the interaction was a wish to ensure that previous self-exclusions were not a result of problem gambling. In the "concerns note" box Mr Marvin recorded: "after being excluded for a period of 18 months, I have no concerns about allowing the Defendant back in the club to game. His level of gambling is far outweighed by his financial wherewithal." The Defendant's suggestion as a consequence of this entry, that the only concern Mr Marvin had related to his financial position, was firmly rejected by Mr Marvin in his witness statement and in cross-examination. I accept Mr Marvin's evidence that he asked about the Defendant's gambling and his previous self-exclusions and that the Defendant confirmed that he had no problem with gambling and had not previously self excluded because of a problem with gambling.
In June 2013 the Claimant agreed to increase the amount that the Defendant was permitted to gamble to £1 million in each 24 hour period, as is confirmed in an email from Martin Baum dated 28 August 2013. The email makes clear that the request was only granted after a discussion between Mr Baum and the Defendant where "he explained that his business was going very well and he would like to play more on the table he said that if he makes £30 million on the markets he wants to play if he loses £30 million he stops playing, as he had a DCF only it was deemed a reasonable request." I have no reason to doubt that this was said as recorded by Mr Baum.
It appears from the email that there was no immediate change in the level of the Defendant's play and that this did not in fact change until 21 August 2013. The email records that on 21 August the Defendant:
'bought in for a win account from Aspinalls for £350,000 and then started to draw heavily on his debit card. Midway through his playing session he left .. and returned to Aspinalls to try his luck there but returned to us after an hour or so'.
The email records that the Defendant spoke to his bank on two occasions, transferring money between accounts. It is apparent that this raised concerns in the mind of Mr Baum who spoke to him towards the end of the playing session. The email records that the Defendant assured Mr Baum that:
'all was fine and his business was going well and the money was not a factor and he was okay.'
Mr Baum left him alone and records that when the Defendant finished playing he was fine and left the club quietly. He also records that Ms Brummer raised a concern about this spike in the Defendant's level of play, but Mr Baum explained the background to her, no doubt based on his discussion with the Defendant. Given the Defendant's attendances at the Casino thereafter on 13 September, 19 October, 25 November and 25 December 2013 where he did not gamble at all and his numerous attendances throughout that year where he gambled with relatively low stakes, it seems to me that both Mr Baum and Ms Brummer were entitled to be satisfied that this incident was not such as to cause social responsibility concerns or be indicative of problem gambling.
There was an important conversation between the Defendant and Mr Baum at the Casino on 28 December 2013. Mr Baum made a contemporaneous email record of it (dated 29 December 2013 at 20:20) which I regard as accurate. The Defendant asked to speak with him and explained the details of an incident that happened at Crown Aspinalls relating to an unplaced bet. The Defendant told Martin Baum that he was not paid out for the bet, left the Casino and on the way out he signed a VSE, adding that it was for life. Mr Baum then records that:
"he explained to me that he did not have a gambling problem financially as he had just made $70 million in his business but that he did not like Aspinalls casino being dishonest with him and cheating him".
The Defendant explained that he had been contacted by Crown Aspinalls subsequently and told that there had been a mistake, the VSE was retracted and he had been paid out for his claim in dead chips which he lost, thereafter losing almost £650,000. He wanted this money back, or was threatening to sue. At the Defendant's request, Mr Baum called Crown Aspinalls to relay a message that the Defendant would sue if he were not repaid and Howard Aldridge of Crown Aspinalls emailed Roger Marris subsequently, referring to the:
"issues we are currently having with Al-Geabury. We do not expect this to be resolved quickly, as Al-Geabury is now claiming 'problem gambling' as a means to retrieve his recent losses."
Given the earlier conversation between the Defendant and Mr Baum, I do not regard the Crown Aspinalls' e-mail of 29 December 2013 as putting the Claimant on notice of the fact that the Defendant considered himself to be a problem gambler. To the contrary, it confirmed the Claimant's existing understanding that he was a person who had a pattern of signing VSEs in response to arguments with other clubs and dealers, in order to achieve his way, and not as recognition of a gambling problem.
On 10 February 2014, Mr Marris sent the following email to various members of the Claimant's staff regarding the Defendant:
"I have just come off a long call with Howard Aldridge who has told me that Al Geabury is involved in a full blown legal dispute with Crown Aspinalls. Not only is he looking for the money he lost surrounding his recent self-exclusion dispute but is also claiming his lifetime losses as he is suggesting that they should have known he is a problem gambler. We have to be very careful with him and Howard was giving me a friendly warning on the type of tactics Al Geabury is now using. They also don't believe he is a problem gambler and that this is a diversionary tactic. Please can you reassure me about our own position with him and that we will not fall into the same trap as Aspinalls find themselves in".
On the same day (10 February 2014), Mr Marris received a response to his email from Mr Marvin stating this regarding the Defendant:
"I have mentioned to you in the past that he is an accident waiting to happen, we have heard the story with Terry's partner at the Colony and now Aspinalls. We have stopped him asking us to stop him playing for certain periods of time and from asking us not to return any funds he has asked us to send to his bank. As long as he does not ask us to self-exclude him we should be ok, but gaming staff will have to be on their guard, I am sure Martin will concur."
The Defendant relies on these and other requests either to prevent him from playing for short periods or not to return money to him, as demonstrating that he was seeking to place external controls on his gambling and therefore as indicative of problem gambling. I have already dealt with the view taken by Mr Marvin and Ms Leese that the Defendant was a 'difficult' customer and one which the Casino had to be on its guard about in relation to such behaviour. In his evidence, Martin Baum, who has known the Defendant for 20 years, was asked about mini exclusions and explained the nature of the 'trap' referred to by Mr Marris in the email above. He responded:
"It can be very difficult to follow a customer's instructions if they purposely go against their own instructions. If a customer says, you know, 'I don't want to play until 6 o'clock in the morning', and then at 5.45 he plays because maybe the staff have changed, they wasn't aware of the instruction or the instruction had changed from the day previously, basically the customer then has what's a free bet, for example. They can play very heavily for 15 minutes. If they win, they don't say anything. If they lose, they can say, 'oh I told you not to let me play before 6 o'clock, I need my money back'."
Mr Marris gave similar evidence about the trap created by such deliberate 'tactics'.
In her evidence Fizzy White explained the steps she took when asked to stop the Defendant from gambling for a period, to ascertain whether or not he had any problem with gambling. I accept the evidence she gave, as follows:
A. On the second time when he asked me to actually not to play, I asked him -- I took him away, we sat by the slot machines and I asked him if he had a problem, is that the reason why he's asking us to stop him from playing? 1 And he said no. He said he was tired and he just needed to sleep.
……..
Q. It didn't even occur to you that this was a possibility? I mean, it was a possibility --
A. It was a possibility. That's why I had a chat with Mr Al Geabury asking him why he wanted to be stopped and I asked him and he said he hasn't got a problem because all he wanted to do is go to sleep, he's tired. That's what he told me.
Q. But isn't his answer concerning?
A. It didn't concern me after I had a chat with him, no.
The expert evidence of Dr Needham-Bennett was to the effect that asking to be stopped from gambling for temporary periods was not necessarily indicative of someone with problem gambling. He said:
"I think it could be interpreted in two different ways, really quite polar opposite ways, namely that he is externalising the responsibility for his gambling and he has a problem with it, or he is exerting control by himself by saying, "I don't want to gamble and I'd like you to stop me doing so"."
In my judgment, in light of the pattern of the Defendant's behaviour, the Claimant was entitled to take the view it did: that the requests made by the Defendant were indicative of him controlling and limiting his own gambling, the antithesis of someone who is out of control. They were not indicative of problem gambling.
The Events of 19 February 2014
It is common ground that the Defendant attended a football match at the Emirates Stadium on 19 February 2014 and that he watched the match from the Claimant's box, having obtained tickets from the Claimant. The Defendant was accompanied at this match by his brother, Mr Firas Abdullah. It is also common ground that, in the course of the match, a conversation took place between the Defendant and Mr Marris, who was also there, with one of the Claimant's suppliers. There is a dispute however, in relation to that conversation as to whether (a) it was the Defendant who sought an increase in Defendant's facility or the Claimant who spoke about the Defendant's skill as a gambler and encouraged him to get back substantial losses; (b) the increase was to £2 million, £5 million or between £5 and £10 million; and, (c) the Claimant promised not to present any cheque until such time as suited the Defendant. Notwithstanding the corroboration on paper of the Defendant's account by his brother at paragraph 12 of his statement, I unhesitatingly prefer the evidence of Mr Marris, which was measured and cogent, that he was approached by the Defendant. The approach was not anticipated by him. The Defendant said that he felt he was a £10-20 million player and sought an increase in his facility, but Mr Marris only had a £2 million facility which is what he agreed.
In reaching those conclusions I have relied on the contemporaneous email evidence from Mr Baum to the cash desk timed at 22:28 on the evening of 19 February 2014 saying that a facility of £2 million had been provided: "I have been informed by Roger that Mr S Al Geabury facility has been increased to £2,000,000 with immediate effect. This can be drawn on debit card or cheques drawn on his uk bank". Further, when the Defendant arrived at the Casino, he asked for a cheque in the sum of £2 million. I am satisfied that Mr Marris in fact had limited authority to a facility level of £2 million, and that Mr Marris would not go above that level. There is also a customer interaction log dated 20 February 2014 at 1:05am and completed by Mr Baum confirming that the limit had been arranged at £2 million; and that he later requested "another £5 million".
Moreover, the account given by the Defendant lacked credibility and was riddled with inconsistency. His witness statement referred in four paragraphs to a limit of £5 million (confirming earlier references to the same amount in the Defence and Counterclaim) but in oral evidence for the first time, he asserted that the limit was agreed at £5 million to £10 million. When challenged about his change of case, the Defendant had no answer and Firas Abdullah could only offer that it was due to a mistake by the solicitor. I reject the Defendant's assertion that Mr Marris agreed to the provision of credit of an unlimited nature i.e., that his cheque would be held for so long as Defendant wished. It is highly improbable that Mr Marris would enter into such an arrangement because it would be illegal as contrary to the Gambling Act 2005, and unenforceable. This was known to Mr Marris generally, known to both Mr Marris and the Defendant through their respective involvement in the Al Daher case which turned on a question about unlawful credit, and I am satisfied, must have been known to the Defendant because of his reference on the VSE form later that night to the credit being criminal.
I do not accept the evidence of Firas Abdullah in relation to this conversation with Mr Marris as offering any genuine corroboration. First, he demonstrated at the end of the cross-examination how limited his English was, and I am sure that he could not have understood the conversation between Mr Marris and the Defendant which was conducted in English. Secondly, the change in the Defendant's account was simply adopted by him, and I have concluded that Mr Abdullah was giving evidence simply to support the Defendant without concern about its truth.
After the football match, the Defendant went to the Casino and requested £2 million in chips at the cash desk. He signed a scrip cheque for £2 million. He says that he then went on "a frantic gambling spree" and his gambling was "frenzied and uncontrolled" and "frenzied and erratic": see Defence and Counterclaim at paragraph 4.17 and his witness statement at paragraphs 95-100. Having viewed the whole of the CCTV material, which shows the Defendant making the initial request, signing the cheque and then playing roulette at two alternating tables over a period of almost two hours during which he lost the money, while his brother sat watching impassively throughout; and having heard evidence from Clive Pett, Fizzy White, Kelly Steeden, a dealer and Philippa Halpern, an inspector, all of whom observed him that night, and none of whom had or were given cause for concern, I reject the Defendant's evidence about his gambling that night as untrue. He looked calm, controlled and measured throughout, and there was nothing whatever in his demeanour while gambling that gave or should have given any member of staff any cause for concern.
Finally, having lost the money the Defendant requested a £5 million facility but it was refused. Mr Baum's customer interaction log, completed for the stated reason that the Defendant "had been set up with a CCF for £2 million by R Marris and Mr Al Geabury was asking for an increase on this CCF", records a telephone conversation that night in which he tried to explain that the Casino were not in a position to give the Defendant an excess on his first use of the CCF. He continues: "He started to speak over me saying that he wanted another £5 million and Roger has given another player namely (SE) a £8 million CCF and did we not think he was as good as him" (emphasis added). The document records that: "[The Defendant] then reduced his demand from £5 million down to £2 million then he asked for £1 million. [The Defendant] then said to me if we did not give him the excess he would VSE as it was not fair we were not giving him a chance to get his money back. I tried to explain that Mr Marris would be unable to grant the excess but again [the Defendant] spoke over me and told me to call him and tell he will VSE if he can't have the money" . Mr Baum completed the entry as follows: "At no point during both my conversations with [the Defendant] did he mention the fact that he had a gambling problem. His only concern was that we would not give him an excess and he seemed to be using the VSE as a threat to force us into giving him more money" .
I have no reason to doubt what is recorded in the log, and was confirmed in evidence by Mr Baum. It is significant that the Defendant sought an extension of the facility before making any mention of the VSE; and sought to self-exclude only when he did not get the extension of the facility. The threat to sign a VSE if he was not granted an increase in his limit was consistent with his previous course of conduct: the VSE emerging either as a threat consequent upon not getting his way or as a reaction in order to ensure that he would get his way.
Mr Baum spoke with Mr Marris by phone subsequently, who confirmed the decision not to increase the limit. Mr Baum spoke with the Defendant after that, to tell him that Mr Marris would not increase his limit.
So far as concerns the VSE form itself, signed by the Defendant that night, he wrote:
"I AM ADDICT. I TOLD YOU THESE BEFORE AND YOU OFFER TO ME CREDIT. THESE IS CRIMINAL".
Mr Pettican submitted that these words reflect a simple complaint that he was a gambling addict, that he told them this and they gave him credit to encourage him to gamble and this is criminal. I do not accept this submission. These words were written against the background of the Crown Aspinalls dispute and the Defendant's knowledge of the Al Daher dispute. So far as the Crown Aspinalls dispute is concerned, by 10 February 2014, this was a "full blown legal dispute with Crown Aspinalls" and the Defendant was "looking for the money (he) lost" in the dispute itself and lifetime losses on the basis that Crown Aspinalls should have known that he was a problem gambler. The Defendant accepted in his oral evidence that the dispute with Crown Aspinalls concerned the revocation of a VSE (which in that case had been revoked only three days after being made) and a dispute about dishonesty against Crown Aspinalls. He must therefore have known when he gambled on 19 February 2014 that he could at any stage make similar points against the Claimant. Further, it is clear that he knew that an allegation in the Al Daher case was of unlawful credit, and that a cheque presented in respect of credit which was illegal might not have to be met.
When the Defendant did not get the additional facility he asked for, he demanded a VSE form and took the point about credit being criminal. Far from this being a vulnerable person invoking the help of a VSE, this appears to have been a decision to deploy the arguments known to the Defendant from the Crown Aspinalls case and/or the Al Daher case to his advantage. This is borne out by the fact that the Defendant immediately enlisted the assistance of Mr Cartier and that there was a holding email on 22 February 2014 and a substantive letter on 26 February 2014.
The contemporaneous medical evidence
As I have already indicated, this is not a case presented on the basis of an unrecognised gambling problem, and accordingly, the Defendant's asserted efforts to obtain medical help for his gambling have been tested. The only contemporaneous evidence produced in response to requests for information and documents are: a report of Dr Sandy Gupta of 3 October 2014 and a letter and notes of Dr Resek of his consultations with the Defendant between 8 January 2014 and 14 February 2014.
So far as concerns Dr Gupta, his letter dated 3 October 2014 is so general as to be of little or no value. It contains no detail as to the nature of the Defendant's condition and cannot realistically be characterised as a 'medical report'. Attempts to contact Dr Gupta (by the Defendant's former solicitor, Mr Cartier) appear to have failed and neither Dr Needham-Bennett nor Dr Taylor was able to do so. No relevant supporting documentation or records (eg. receipts of payments to Dr Gupta, dates of travel etc.) in relation to Dr Gupta have been provided. Furthermore, Dr Resek's report and notes make no reference whatever to the Defendant seeing two previous doctors, whether Dr Gupta or anybody else, prior to the consultations with Dr Resek. In the circumstances, I am not persuaded that there were consultations with Dr Gupta as described in the letter of 3 October 2014 or at all.
There is no evidence of consultations with any other treating doctors (other than Dr Resek). Not one has been named; not one address has been provided; no dates of appointments have been provided; no details of treatment have been provided; not one piece of paper supporting their existence has been provided, despite the Request for Further Information and order of Master Eastman. As regards those other doctors, in his evidence the Defendant says that he "talked to them and I attempted from the first day of the request, until today, only the doctor in Geneva in Switzerland, only on Friday he has accepted to give me a document. I tried everything possible but they do not like to be involved in court cases and to leave their business". This has not previously been said by him in his second and third disclosure statements, and if true, he would necessarily know the names and details of those doctors but he does not. The inference I draw is that he did not receive the significant medical assistance he says he received.
The position in relation to Dr Resek is different, but does not support the Defendant's claims:
(i) The visits to Dr Resek started shortly after the dispute with Crown Aspinalls
(in late December 2013) on 8 January 2014.
(ii) The entry for 10 January 2014 "Solicitor wants a letter from me to distribute", suggests that the purpose of seeking assistance from Dr Resek at that time was to further the dispute with Crown Aspinalls.
(iii) The Defendant lied to Dr Resek about the fact that the treatment was keeping him out of casinos between appointments. This is evident from the entry of 27 January 2014 (belied by the records of attendances at the Casino on 25 and 26 January 2014 and also 27 January 2014 assuming that this was prior to the appointment, which is likely given timings). This is also evident from the entry of 14 February 2014 (belied by gambling at the Hippodrome Casino on 13 February 2014).
(iv) The Defendant ceased attending Dr Resek after 14 February 2014 despite calls from Dr Resek to have follow up appointments and treatment (referred to in the last paragraph of his report of 4 December 2014). There was no sensible reason for non-attendance if the Defendant's account of the facts was true. On the contrary, if his attendance was to deal with a gambling problem, then it is inevitable that he would have attended after the events of the evening of 19/20 February 2014 at the Casino on his account. His explanation in cross-examination for not doing so was that he was taking the medicine which Dr Resek had given him and that it was the medication and not talking to Dr Resek which helped him. When the Defendant was shown that Dr Resek's notes show that the medicines had been discontinued, he answered that he had "resumed it". I reject that evidence as implausible in the absence of any prescriptions and because the Defendant's evidence was that the medication was stopped because the Defendant himself complained of the side-effects. Further, the Defendant made no mention of continuing with medication in the consultations with either Dr Taylor or Dr Needham-Bennett.
. (v) Shortly after the attendances with Dr Resek, the Defendant procured a settlement with Crown Aspinalls, as he confirmed.
The question is why did the Defendant tell lies to Dr Resek. Mr Pettican submits that they can be dismissed as part of an addict's propensity to lie. Quite apart from the improbability of doing so when giving information to a treating doctor, there is no evidence that this Defendant told lies to members of his family, friends or business associates. The other suggestion made was that he told lies because he did not wish to let down Dr Resek but that was contradicted by the Defendant's own evidence before the lies were exposed when he was asked "is the information which you provided to Dr Resek the truth?" and responded "Yes, of course. He is a doctor. I have to tell him the truth".
In light of all the evidence, I have concluded as Mr Freedman submits, that the evidence of Dr Resek was, to the knowledge of the Defendant (but not Dr Resek) self-serving evidence that was being procured for the case against Crown Aspinalls to show that he had a very serious gambling problem which Dr Resek had considerable success in addressing. It could therefore be used to show that this was a problem which could be corrected provided that casinos did not themselves abuse their position by allowing him in at a time when he wished to be excluded e.g. by the VSE in relation to Crown Aspinalls.
THE EXPERT MEDICAL EVIDENCE
The Defendant relies on the report and evidence of Dr Richard Taylor. He is a consultant forensic psychiatrist to the CNWL National Problem Gambling Clinic and is a specialist in this field of work. Dr Taylor's conclusion (at paragraph 7 of his opinion) is that the Defendant suffers from a gambling disorder which is "persistent, in early remission and severe according to DSM 5 criteria". Dr Taylor subsequently accepted that this categorisation was a "numerical error", and should have been 'moderate' on the basis of the number of criteria evidenced.
The Claimant relies on the report and evidence of Dr Needham-Bennett, a Consultant General and Forensic Psychiatrist. Dr Needham-Bennett provided a heavily qualified report, concluding that on the Defendant's account of the facts, he suffers from a mild gambling disorder.
Shortly before trial the experts met to identify issues of agreement and disagreement. Both experts significantly qualified their role in the joint report at paragraph 9 as follows:
"We agree that the diagnoses we have made, as is usually the case in psychiatric practice, depend on to a significant extent on self-reporting from Mr Al Geabury. In addition to self-reported information we agree that information from all sources for example the evidence relating to Mr Al Geabury's gambling behaviour from casino documents will inform our diagnosis. We agree that it must ultimately be a matter for the court to make findings in relation to the facts where these are in dispute. The extent to which we are justified in making differing interpretations in this case will depend on the findings of the court where the facts are in dispute."
Despite expressing that view Dr Taylor was surprisingly reluctant to accept the proposition that when various assumptions he made about the Defendant and his gambling were shown to be false and were factored into the analysis, they necessarily affected his diagnosis. He appeared to have a limited understanding of the duty owed to the court as an independent expert and the impression he gave was of somebody arguing the Defendant's case rather than expressing an independent opinion (this view was reinforced towards the end of cross-examination by a late disclosure of his conflict of interest, as I shall explain). For example, he maintained a characterisation of the Defendant's gambling on 19/20 February 2014 as "frenzied and uncontrolled" even after seeing the video evidence of the gambling, and when challenged adopted an unrealistic interpretation of the words "frenzied and uncontrolled" which were favourable to the Defendant. Moreover, it appeared that he had developed a thesis about the Defendant's condition and dismissed or minimised facts that were inconsistent with this thesis or alternatively, where the factual material was not available to support his thesis, relied on stereotypical views about how a person with a gambling disorder might behave.
I was particularly concerned by Dr Taylor's failure to disclose (until after two hours of cross-examination when it was too late) a fundamental conflict of interest, contrary to the last line of his expert's declaration. The conflict was that he was not simply reporting as an expert, but in the last month he had attended on the Defendant as a treating doctor on four occasions. It was no answer that this did not affect his written evidence because he had no conflict at the time of his report, since the duty is a continuing one, and it did affect him at the joint experts' meeting and in preparation of the joint report (which also contained the declaration) and when giving oral evidence (in which he referred to the declaration). I was surprised too by Dr Taylor's suggestion that it did not matter because there was no material in the subsequent consultations which affected his view. This is simply no answer to what is a substantial conflict between a role as a treating doctor and an independent expert. The information communicated to him by the Defendant as his client could not be tested, and could not with any certainty be separated in his own mind.
By contrast, Dr Needham-Bennett was impressive. He was not challenged in cross-examination because in reality, there was no basis for doing so. He was careful and methodical in his assessment of the factual situation. Where he felt able to do so, he expressed conclusions that reflected the available evidence and on the basis of the Defendant's self-reporting, concluded that there probably was a mild gambling problem. However, he correctly recognised the need to qualify his opinions as indicated above, and where new factual evidence emerged during the trial and assumptions about the evidence were put to him, that adjustments would have to be made in relation to his opinion. Ultimately Dr Needham-Bennett confirmed that if the evidence base as regards matters dependent on the Defendant's self-reporting was removed (as false or unsubstantiated) he would be "probably tearing up my existing report and starting again". He said "I think I would have to revise it down and say that he did not meet the threshold for a gambling disorder."
So far as concerns the application of the DSM-5 criteria, I consider each criterion in light of the evidence and findings I have made:
(a) Criterion (a) – 'Needs to gamble with increasing amounts of money in order to achieve the desired excitement': although the evidence shows that the Defendant gambled with larger amounts of money on particular occasions from 2013 than he had done previously, he also continued to gamble regularly with relatively small sums of money throughout 2013 and, indeed, would regularly attend casinos and not bet at all. This contradicts (a) and there is no evidence of any need to do so to achieve the desired excitement.
(b) Criterion (b) – 'Is restless or irritable when attempting to cut down or stop gambling'. This criterion is not directed towards restlessness or irritability when gambling generally but when attempting to stop or cut down gambling. Dr Needham-Bennett stated that this criterion would be "negate[d]" if there were no evidence about the Defendant cutting down or stopping gambling. There is no such evidence: I do not accept that the VSEs signed by the Defendant were done for the genuine purpose of stopping gambling. Further, the evidence suggests that any irritability the Defendant exhibited was not attributable to his gambling. His own oral evidence was that "I have thyroid disease, and people with thyroid disease are ill tempered". Dr Taylor had not considered the Defendant's thyroid problem as a source of his irritability in his report, but accepted in cross examination that "It's possible that thyroid disease could cause irritability, yes".
(c) Criterion (c) – 'Has made repeated unsuccessful efforts to control, cut back, or stop gambling'. Again, apart from the Defendant's own statements to this effect (which I have found to be untruthful and unreliable) and actions taken for other purposes (the VSEs and temporary restrictions) there is no such evidence. At all times prior to 19/20 February 2014, the Defendant was gambling at casinos: there was never an effort made to self-exclude from casinos en masse.
(d) Criterion (d) – 'Is often preoccupied with gambling (e.g., having persistent thoughts of reliving past gambling experiences, handicapping or planning the next venture, thinking of ways to get money with which to gamble)'. This criterion (as Dr Taylor accepted) is "very subjective, depends on a lot of self-reporting". As such it wholly depends upon the credibility of the Defendant.
(e) Criterion (e) – 'Often gambles when feeling distressed (e.g., helpless, guilty, anxious, depressed)'. Again, Dr Taylor accepted that this is based on the Defendant's self-reporting, which is neither reliable nor truthful.
(f) Criterion (f) – 'After losing money gambling, often returns another day to get even ("chasing" one's losses)'. The evidence does not establish this criterion as a regular feature of the Defendant's gambling. Dr Taylor acknowledged that it was "difficult" to conclude from the objective information that this criterion was made out: "[D] clearly does return repeatedly to the casino. Whether he's returning to win back losses is difficult to say." The only occasion on which there was evidence of this was on 19 February 2014, when the Defendant demanded a further £2 million to try to win his money back.
(g) Criterion (g) – 'Lies to conceal the extent of involvement with gambling'. There is no evidence of this. The Defendant regularly gambled with his brother, his friends and his business associates. This continued right through 2013. There is no evidence that he lied to conceal the extent of involvement with gambling. When challenged on this Dr Taylor fell back to stereotypes and then suggested that the Defendant was "economical with the truth about his gambling behaviour, for example, to his mother". However, the Defendant's own oral evidence was "Even my mother I told her that I was an addict".
(h) Criterion (h) – 'Has jeopardized or lost a significant relationship, job, or educational or career opportunity because of gambling'. Both experts agreed that there was no evidence of this criterion.
(i) Criterion (i) – 'Relies on others to provide money to relieve desperate financial situations caused by gambling'. Both experts agreed that there was no evidence of this criterion.
Accordingly, even were I minded to attach weight to the frequency of the Defendant's gambling and attendance at casinos, this would not be sufficient to bring him into the category of even a person with a 'mild' gambling disorder (that is somebody with 4–5 of the DSM-5 criteria). Ultimately however, I have concluded that the Defendant did not have a gambling disorder at any time material to this case.
THE ISSUES
Against that background, and permission having been granted to plead contributory negligence by way of amendment (there being no prejudice and no opposition to this by the Defendant) the legal issues that arise for decision are as follows:
The Defence
(1) Is the Claimant unable to enforce the Cheque or to recover the sum of £2 million plus interest claimed against the Defendant because of some underlying illegality or public policy consideration, and in particular:
(a) What is the illegality / public policy issue?
(b) In all the circumstances, does any alleged illegality or public policy consideration bar the Claimant's action?
(2) Was the transaction reflected by the drawing of the Cheque the product of undue influence exerted on the Defendant by the Claimant, through Mr Marris, and/or such as to amount to an unconscionable transaction which should be set aside?
(3) Did the Claimant, through Mr Marris on 19 February 2014, make a misrepresentation to the Defendant which induced the transaction/gambling on the evening of 19/20 February 2014?
(4) Did the Claimant, through Mr Marris on 19 February 2014, enter into a collateral contract with the Defendant pursuant to which the latter could repay any gambling losses at any later time?
The Counterclaim
(5) As to breach of contract:
(a) Did the 2009 VSE signed by the Defendant amount to a contractually binding agreement requiring the Claimant to exclude the Defendant from the Claimant's casino for life?
(b) If so, did it continue in full force and effect notwithstanding the agreed revocation of the same in October 2010 and/or the conduct of the parties thereafter? (Although the Defendant's list of issues objects to the wording "the agreed revocation", this is a dispute about nomenclature: there was undoubtedly an agreed revocation, the issue between the parties is whether it was effective.)
(6) Did the Claimant owe a duty of care to the Defendant and, if so, in what terms, and, specifically, was any duty owed:
(a) A statutory duty which gives rise to a private right of action for breach; and/or,
(b) A common law duty of care?
(7) If yes to either, was the Claimant in breach of that duty such as caused the gambling in the periods (i) from August 2012 and (ii) on 19/20 February 2014, and if so, in what precise respects was the Claimant in breach of duty and how did such breach cause the relevant gambling?
(8) Would the Defendant's gambling losses in the periods (i) from August 2012 and (ii) on 19/20 February 2014 have been sustained in any event irrespective of the alleged wrongdoing of the Claimant?
(9) If, and to the extent that, the Defendant has suffered loss caused by the Claimant, are damages to be extinguished or reduced by reason of contributory negligence?
Issue 1: Illegality
It is common ground that the drawer of a cheque may raise as a defence to payment the fact that the cheque was given for an illegal consideration. The failure on the part of a holder of an operating licence to observe the conditions of a gambling licence is a criminal offence that could render a gambling transaction unenforceable. Accordingly, where a cheque is provided in return for facilities to gamble in circumstances where the operator has failed to observe the mandatory conditions of its operating licence that would have the effect that the cheque was given for an illegal consideration.
The Defendant's case is that by providing him with facilities to gamble after 22 November 2009 when he signed the 2009 VSE, the Claimant breached the mandatory conditions of its gaming licence with the result that the provision to the Defendant of those facilities was unlicensed and, consequently, unlawful. This illegality defence does not turn on any findings relating to the Defendant's gambling disorder and/or the state of the Claimant's knowledge relating to that disorder. It turns primarily on the provisions of the Gambling Act 2005 and the provisions of the Licence Conditions and Codes of Practice issued by the Gambling Commission.
Section 1 of the Act (titled "The Licensing Objectives") identifies three licensing objectives, namely:
(a) preventing gambling from being a source of crime or disorder, being associated with crime or disorder or being used to support crime;
(b) ensuring that gambling is conducted in a fair and open way; and
(c) protecting children and other vulnerable persons from being harmed or exploited by gambling.
Section 20 of the Act provides for the establishment of the Gambling Commission and s.22 places upon the Gambling Commission a statutory duty to promote the Licensing Objectives in the performance of its statutory functions under the Act. Section 24 provides the statutory basis for the issuing of Social Responsibility Code ('SRC') and Ordinary Code ('OC') provisions by the Gambling Commission:
" Codes of practice
(1) The Commission shall issue one or more codes of practice about the manner in which facilities for gambling are provided (whether by the holder of a licence under this Act or by another person).
(2) In particular, a code shall describe arrangements that should be made by a person providing facilities for gambling for the purposes of–
(a) ensuring that gambling is conducted in a fair and open way,
(b) protecting children and other vulnerable persons from being harmed or exploited by gambling, and
(c) making assistance available to persons who are or may be affected by problems related to gambling."
Section 82 of the Act provides that an SRC provision is a condition of an operating licence:
"S.82 Compliance with code of practice
(1) An operating licence shall by virtue of this section be subject to the condition that the licensee ensures compliance with any relevant social responsibility provision of a code of practice issued under section 24.
(2) In subsection (1)–
(a) the reference to a licensee includes a reference to anyone employed or engaged by a licensee to perform an operational function within the meaning of section 80, and (b) the reference to a social responsibility provision of a code is a reference to a provision identified by a code as being included in pursuance of section 24(2).
(3) This section does not prevent compliance with a provision of a code, other than a social responsibility provision, from being made the subject of a condition under section 75, 77 or 78."
Ensuring compliance with SRC provisions is therefore a condition of the licence but
ensuring compliance with OC provisions is not.
Section 33 provides for a criminal offence in respect of breaches of a condition of a licence (and SRC provisions by virtue of being conditions of licences):
"33 Provision of facilities for gambling
(1) A person commits an offence if he provides facilities for gambling unless–
(a) an exception provided for in subsection (2) or (3) applies, or …
(2) Subsection (1) does not apply to any activity by a person if–
(a) he holds an operating licence authorising the activity, and
(b) the activity is carried on in accordance with the terms and conditions of the licence. ….
(4) A person guilty of an offence under this section shall be liable on summary conviction to–
(a) imprisonment for a term not exceeding 51 weeks,
(b) a fine not exceeding level 5 on the standard scale, or
(c) both."
It follows from this that, unless an activity is carried out by an operator in accordance with the terms and conditions of its licence, the requirements of s.33(2) will not be satisfied with the result that s.33(1) will apply and the operator will be committing an offence.
Section 75(1) empowers the Gambling Commission to specify conditions to be attached to (a) each operating licence, or (b) each operating licence falling within a specified class. Section 75(2) provides that "a class" may be defined wholly or partly by reference to (a) the nature of the licensed activities; (b) the circumstances in which the licensed activities are carried on; and (c) the nature or circumstances of the licensee or of another person involved or likely to be involved in the conduct of the licensed activities.
In addition to specifying licence conditions (the failure to comply with which involves the commission of an offence), the Gambling Commission is authorised under s.24 to issue Codes of practice about the manner in which facilities for gambling are provided. As set out at s.24(2) a Code of practice is required to "describe arrangements that should be made by a person providing facilities for gambling" for the purpose of meeting the Licensing Objectives set out in s.1 of the Act.
Section 24(8) of the Act provides that a "failure to comply with a provision of a code shall not of itself make a person liable to criminal or civil proceedings, but this subsection is subject to any provision of or by virtue of this Act making an exception to an offence dependent on compliance with a code".
The Act accordingly draws a distinction between two different types of provisions to be issued by the Gambling Commission. First, there are licence conditions. The consequence of an operator failing to comply with these is that the operator commits an offence under s.33. Second, there are Codes of practice. The failure of an operator to comply with a Code of practice does not, of itself, make an operator liable to criminal or civil proceedings.
Part II of the Licence Conditions and Codes of Practice ("the Code") (under the heading "Introduction") states as follows:
"These are the Commission's principal codes of practice, issued under section 24 of the Gambling Act 2005. These codes will come into effect on 1 January 2009. There are two types of provisions in this document:
Social Responsibility Code provisions; compliance with these is a condition of licences; therefore any breach of them by an operator may lead the Commission to review the operator's licence with a view to suspension, revocation or the imposition of a financial penalty and would also expose the operator to the risk of prosecution; these provisions are in shaded boxes in this section
Ordinary Code provisions; these do not have the status of licence conditions, but are admissible in evidence in criminal or civil proceedings and must be taken into account in any case in which the court or tribunal think them relevant and by the Commission in the exercise of its functions; any breach of ordinary code provisions by an operator may be taken into account by the Commission on a licence review, but cannot lead to imposition of a financial penalty; these code provisions are in the unshaded parts of this section and generally set out good practice in these areas".
Part II, section 2.5 of the Code is titled "Self-exclusion". There are two relevant provisions. The first is a Social Responsibility Code provision which, as explained above, is a condition of an operating licence. The second is an ordinary code provision which does not have the status of a licence condition.
The relevant SRC provision ("SRC 2.5") states as follows:
"2.5 Self-exclusion
All non-remote licences and remote betting intermediary (trading rooms only) licences, but not gaming machine technical and gambling software licences
Social responsibility code provision
"Licensees must have and put into effect procedures for self-exclusion and take all reasonable steps to refuse service or to otherwise prevent an individual who has entered a self-exclusion agreement from participating in gambling."
Licensees must, as soon as practicable, take all reasonable steps to prevent any marketing material being sent to a self-excluded customer.
Licensees must take steps to remove the name and details of a self-excluded individual from any marketing database used by the company or group (or otherwise flag that person as an individual to whom marketing material must not be sent), within two days of receiving the completed self-exclusion notification.
This covers any marketing material relating to gambling, or other activities that take place on the premises where gambling may take place. However, it would not extend to blanket marketing which is targeted at a particular geographical area and where the excluded individual would not knowingly be included.
Licensees must close any customer accounts of an individual who has entered a self-exclusion agreement and return any funds held in the customer account. It is not sufficient merely to prevent an individual from withdrawing funds from their customer account whilst still accepting wagers from them. Where the giving of credit is permitted, the licensee may retain details of the amount owed to them by the individual, although the account must not be active.
Licensees must put into effect procedures designed to ensure that an individual who has self-excluded cannot gain access to gambling. These procedures must include:
- a register of those excluded with appropriate records (name, address, other details, and any membership or account details that may be held by the operator)
- photo identification (where available and in particular where enforcement of the system may depend on photographic ID), and a signature
- staff training to ensure that staff are able to enforce the systems
- the removal of those persons found in the gambling area or attempting to gamble from the premises."
The relevant Ordinary Code provision of section 2.5 ( "OC 2.5") states as follows:
"Self-exclusion procedures should require individuals to take positive action in order to self-exclude. This can be a signature on a self-exclusion form.
Whenever practicable, individuals should be able to self-exclude without having to enter gambling premises.
Before an individual self-excludes, licensees should provide or make available sufficient information about what the consequences of self-exclusion are.
Licensees should take all reasonable steps to extend the self-exclusion to premises of the same type owned by the operator in the customer's local area. In setting the bounds of that area licensees may take into account the customer's address (if known to them), anything else known to them about the distance the customer ordinarily travels to gamble and any specific request the customer may make.
Licensees should encourage the customer to consider extending their self-exclusion to other licensees' gambling premises in the customer's local area.
Customers should be given the opportunity to discuss self-exclusion in private, where possible.
Licensees should take steps to ensure that:
the self-exclusion period is a minimum of six months and give customers the option of extending this to a total of at least five years
a customer who has decided to enter a self-exclusion agreement is given the opportunity to do so immediately without any cooling-off period. However, if the customer wishes to consider the self-exclusion further (for example to discuss with problem gambling groups) the customer may return at a later date to enter into self-exclusion
at the end of the period chosen by the customer (and at least six months later), the self-exclusion remains in place, unless the customer takes positive action in order to gamble again. No marketing material should be sent to the individual unless the individual has taken positive action in order to gamble again, and has agreed to accept such material
where a customer chooses not to renew the self-exclusion, and makes a positive request to begin gambling again, the customer is given one day to cool off before being allowed access to gambling facilities. The contact must be made via telephone or in person
The Licensee should retain the records relating to a self-exclusion agreement at least until the agreement has been formally ended.
(Please note that the Commission does not require the licensee to carry out any particular assessment or make any judgment as to whether the previously self-excluded individual should again be permitted access to gambling. The requirement to take positive action in person or over the phone is purely to a) check that the customer has considered the decision to access gambling again and allow them to consider the implications; and b) implement the one day cooling-off period and explain why this has been put in place".
Mr Pettican submits that the Defendant's illegality defence turns on the proper construction of SRC 2.5 and OC 2.5 which clearly fall to be read together. The Defendant's case is that, properly construed, the effect of SRC 2.5 and OC 2.5 is as follows:
(i) licensees must have and put into effect procedures for self-exclusion. If they do not, this is a breach of SRC 2.5 (and a breach of the licence conditions).
(ii) Whilst it is a mandatory requirement of SRC 2.5 that a licensee have and put into effect procedures for self-exclusion, it does not prescribe what those procedures should be.
(iii) Guidance on their content is in OC 2.5. However, the failure of a licensee to follow this guidance does not, in itself, amount to a breach of the licence conditions.
(iv) Whilst OC 2.5 recommends that, in putting in place procedures for self-exclusion, the licensee should take steps to ensure that the self-exclusion period is a minimum of six months, and that customers have the option of extending this to five years, it is a matter for the licensee to decide what periods of self-exclusion to offer and for the customer to decide what period of self-exclusion to select. By way of example, Mr Pettican submits that a licensee who puts in place a procedure for self-exclusion allowing a customer to self-exclude for a maximum of 3 months would comply with his obligation under SRC 2.5 to "put into effect procedures for self-exclusion", but would fail to comply with his obligation under OC 2.5 to "take steps to ensure that the self-exclusion period is a minimum of six months".
(v) The period of self-exclusion applicable to a self-excluded individual is the period chosen by the customer from the options made available by the licensee at the time he self-excludes. If the licensee offers the customer the ability to self-exclude for 6 months, 1 year, 5 years or permanently, and the customer ticks the box to self-exclude himself permanently, the period of self-exclusion applicable to that customer is for life.
(vi) Licensees must take all reasonable steps to refuse service or to otherwise prevent an individual who has entered into a self-exclusion agreement from participating in gambling. If they do not, this is a breach of SRC 2.5 (and a breach of the licence conditions).
(vii) Licensees must put into effect procedures designed to ensure that an individual who has self-excluded cannot gain access to gambling. If they do not, this is a breach of SRC 2.5 (and a breach of the licence conditions).
The Defendant's case is that the licence condition requiring licensees to put into effect procedures designed to ensure that an individual who has self-excluded cannot gain access to gambling includes, by necessary implication, an obligation on licensees not to accede to any future request by a self-excluded individual to lift his self-exclusion. This is because, as Mr Pettican submits, any request by a self-excluded customer to gamble involves an implied request to lift his self-exclusion, it being a logical impossibility for a customer to be both excluded and admitted at the same time. To impose a licence condition that a licensee put into effect procedures designed to ensure that an individual who has self-excluded cannot gain access to gambling if it was intended that such an individual should be able to re-gain access to gambling by asking the licensee to lift his self-exclusion would render this part of the SRC a nonsense.
On that footing he argues that the 2009 VSE completed by the Defendant by writing in the words "Life Time" as the period of self-exclusion chosen and containing the statement underneath that: "I understand that I cannot ask for the period of self-exclusion to be revoked or reduced from the period agreed above" (and counter-signed by Mr Beardall) rendered the period of self-exclusion irrevocable regardless of anything else. Moreover, even on the Claimant's pleaded case that it was "entitled to (and did) treat the 2009 VSE as giving rise to a self-exclusion for a period of five years" the Defendant should not have been re-admitted to the Claimant's casino until 23 November 2014 by which time all material events giving rise to this dispute had occurred. Accordingly, by re-admitting the Defendant to gamble on 8 October 2010 and allowing the Defendant to gamble thereafter, the Claimant breached the terms of SRC 2.5, and its licence conditions.
This argument turns on the proper construction of SRC 2.5 read with OC 2.5. The critical obligations in SRC 2.5 are:
(i) to have and put into effect procedures for self-exclusion;
(ii) to take all reasonable steps to refuse service or to otherwise prevent an individual who has entered a self-exclusion agreement from participating in gambling; and
(iii) to put into effect procedures designed to ensure that an individual who has self-excluded cannot gain access to gambling. These procedures must include: a register of those excluded with appropriate records including photo identification (where available); staff training; and the removal of those persons found in the gambling area or attempting to gamble from the premises.
The provisions of SRC 2.5 do not address periods of self-exclusion, whether minimum or otherwise. The only reference to periods is OC 2.5 - "Licensees should take steps to ensure that: the self-exclusion period is a minimum of six months and give customers the option of extending this to a total of at least five years".
Nor is there any provision in SRC 2.5 (or OC 2.5) that deals with agreed revocation before the expiry of the time specified by the relevant signatories to a self-exclusion form. Both codes are silent on revocation. The situation is simply not addressed, either by expressly forbidding it or by permitting it. The question is whether this lacuna in SRC 2.5 should be filled by the necessary implication that once entered into a VSE is irrevocable.
I have come to the conclusion that there is no necessity to imply a prohibition on revocation in either Code. I do not agree with Mr Pettican that the licence conditions would serve no useful purpose whatsoever if a licensee could avoid them by simply treating the self exclusion period as having come to an end when the self excluded customer seeks to regain access to gambling. The requirement to put into effect procedures designed to ensure that a self excluded person cannot again access gambling, is a requirement to have and put into effect such procedures in relation to a person "who has entered a self exclusion agreement", and therefore whilst a VSE is in place. For so long as a VSE is in place, those procedures must be operated and any such person found in the gambling area or attempting to gamble from the casino premises must be removed. The condition accordingly operates irrespective of whether or not a VSE can be revoked.
There is no suggestion that a casino should have to implement any unilateral request by a customer to revoke a VSE. Rather, revocation of a VSE is a bilateral process: there must be a request and a reasoned decision whether to accede or not. Provided that any agreed revocation is on reasonable grounds, reflecting the non-absolute nature of the licensee's requirements (to "have and put into effect procedures for self-exclusions" and "take all reasonable steps" to refuse service or prevent a self-excluded person from participating), in my judgment there is no necessary reason why a self-exclusion cannot be lifted by an agreed revocation on this basis. This does not undermine the efficacy of the VSE system. It respects individual autonomy; and it is consistent with the limited wording of the SRC that requires the taking of reasonable not unreasonable steps. Whether or not in a particular case it will be reasonable for a casino to agree to lift a revocation will depend on all the facts and circumstances of that case.
I am satisfied accordingly that there is no necessity for implication of a provision into SRC 2.5 prohibiting revocation. Furthermore, absent cogent policy reasons for doing so, I would have regarded it as wrong to criminalise behaviour of a licensee without clear words.
Although I have not relied on these points in construing this Code because the proper legal construction is a matter for the court, having reached my conclusion I am comforted to find that it is consistent with the position adopted by the Gambling Commission, in particular as follows:
(i) the email from the Gambling Commission's Compliance Manager, Mr Kirkup, of 10 September 2010, wherein he advised that the period of self-exclusion was as set out in the Code but that as the period was an ordinary (or non-mandatory) provision of the Code, this was therefore "suggested practice" but not an absolute. However, he advised that: "any operator choosing not to comply with an ordinary code provision should have clear and well argued reasons for this";
(ii) an entry on the Gambling Commission's website (last reviewed in October 2012) which states in answer to a FAQ about customers insisting on cancelling self-exclusion agreements, as follows:
"Before a customer completes a self exclusion agreement, the significance and implications of this action should be explained to them, including the minimum duration of six months. Generally speaking, it is considered that this length of self exclusion is necessary to enable an individual to deal with their problem gambling behaviour.
The Gambling Commission recommends that a self-exclusion agreement is not ended before the original agreed date but we recognise that there may be occasional exceptions to this.
There may be occasional situations in which an operator considers it appropriate to cancel a self-exclusion agreement but the risk that an individual might subsequently allege a breach of duty of care should be borne in mind.
Where it is considered to be appropriate to cancel a self exclusion, the reasons for the decision should be clearly documented and retained."
Mr Pettican accepted that this was odd advice for the regulator to give if his construction that revocation is precluded is correct.
Had I reached the contrary conclusion I would not have accepted Mr Freedman's alternative argument that the 2009 VSE was not 'real and effective' because it was signed by a person without a gambling disorder or was signed for a purpose other than addressing a gambling disorder. I agree with Mr Pettican that whilst the licensing objectives are for the protection of vulnerable people, it does not follow that the regime put in place is only for the protection of problem gamblers prepared to say so. Motivation is in my judgment irrelevant. In any event a person can have mixed motives and to require an enquiry into the motivation of the individual self excluding makes the scheme unnecessarily difficult to operate and uncertain.
For the following reasons I am satisfied that the Claimant had reasonable grounds and acted reasonably in agreeing to revoke the 2009 VSE because:
i) there was nothing in the Defendant's conduct or behaviour while gambling to suggest that he had a gambling addiction or was a problem gambler;
ii) the Claimant had reasonable grounds to believe that the 2009 VSE was not made because of a gambling problem and that the Defendant was not a problem gambler, as evidenced by his behaviour;
iii) the Defendant asked repeatedly for the 2009 VSE to be lifted;
iv) six months had expired;
v) the Defendant confirmed both in writing and orally that he had no gambling disorder;
vi) before agreeing to do so, the Claimant sought and acted on guidance from the Gambling Commission.
It follows that there has been no breach by the Claimant of the conditions of its gambling licence. In permitting the Defendant, at his request and upon his confirmation that he had no gambling disorder, to revoke the 2009 VSE, the Claimant did not breach either SRC 2.5 or OC 2.5. In the highly unusual circumstances of this case and in light of my findings of fact, there were reasonable grounds for the Claimant to do so and I am satisfied that it acted reasonably. For all these reasons, the defence of illegality fails.
Issue 2, 3 and 4: Undue Influence, Unconscionable Transaction and Misrepresentation
The Defendant now accepts that if his account of what was agreed between him and Mr Marris at the Emirates is accepted, the resulting transaction/gambling would have been unlawful as involving the provision of credit and consequently the court would not enforce it so that the Defendant has nothing to gain by advancing issues 2-4 inclusive, and he no longer pursues them.
He is correct not to do so in any event. I have rejected his account. The allegations had no factual foundation whatever.
Issue 5: Breach of contract counterclaim
Since it is accepted by Mr Pettican (see paragraph 114 of the Defendant's Written Closing) that the Defendant's counterclaim for breach of contract (i.e. that Claimant failed to comply with its obligations as a result of Defendant's self-exclusion on 22 November 2009) is dependent on a finding in his favour that Claimant acted unlawfully in re-admitting Defendant to gamble in October 2010, and I have rejected such a finding, the breach of contract counterclaim fails.
In the circumstances I express my further views on this issue briefly. I do not consider that the 2009 VSE gave rise to a contract. Mr Pettican's argument to the contrary is artificial and contrived. In any event any such alleged agreement would be without consideration: nothing moved from the Defendant to the Claimant. That conclusion is supported by Calvert where Briggs J found that the bookmaker had assumed responsibility for the gambler, noting that such an arrangement was one "without consideration": see paragraphs 175, 178 to 180 and 186. Even on the approach adopted on the Defendant's behalf, namely that the offer by the casino to make self exclusion available is in return for obtaining the business of the customer, it is difficult to see what consideration flows from the Defendant when he enters a self exclusion agreement providing nothing in return. At best the situation is akin to a contract but without being a contract at all. Finally, even if I had concluded that the 2009 VSE was a contract, that contract was lawfully rescinded in October 2010 when the parties to it agreed that it should be revoked.
Issues 6, 7, 8 and 9: Negligence and Breach of Statutory Duty on Counterclaim
Mr Pettican accepts that it would be inappropriate for the court to seek to fashion a statutory duty from the broad principle stated by section 1 of the Act. However he submits the statutory duty contended for by the Defendant is much narrower and is a duty to do the specific things that SRC 2.5 requires to be done as a condition of an operating licence. The duties are owed to a limited class of customers, who have entered into self exclusion agreements. He submits X (Minors) v Bedfordshire County Council [1995] 2 AC 633 is not inconsistent with the existence of the duty contended for by the Defendant; and that the Defendant relies on the breach by the Claimant of the terms of its licence so that s. 24(8) of the Act has no application. If the Claimant breached its licence conditions by re-admitting the Defendant to gamble in October 2010, then the Defendant should be able to recover from the Claimant the losses that the Defendant has sustained as a result of that breach. There is no hardship or injustice to the Claimant in such a result.
I have real doubts as to whether a private law cause of action for breach of statutory duty arises here. In my judgment the indicators identified in X (above) at 731E to G suggest otherwise: the statute provides remedies for its breach and affords appropriate means of securing the protection that was intended to be conferred. It establishes a regulatory body to enforce compliance and criminal offences. These are not conclusive but are strong indicators. However it is unnecessary for me to reach any concluded view on this issue given my conclusion that the Claimant has not acted unlawfully in breach of its licence conditions in readmitting the Defendant to gamble in October 2010.
So far as the existence of a common law duty of care is concerned, this question was addressed comprehensively by Briggs J in Calvert in a very similar context. The claimant in that case contended that there was a broad common law duty of care (based on the voluntary assumption of responsibility by means of the social responsibility policy and associated self exclusion procedure adopted) owed by a bookmaker towards a customer who the bookmaker knew, or who appeared to the bookmaker to be, a problem gambler. That argument was rejected. The bookmaker was under no duty either to take reasonable steps to offer assistance or to refuse to allow the gambler to continue gambling. The autonomy of the individual gambler was held to be paramount. In rejecting that broad duty of care towards problem gamblers, Briggs J applied the three stage test of considering foreseeability, proximity and fairness: see paragraph 172. In relation to proximity he said "in my judgment the law should be very slow to recognise a sufficient proximity to justify a requirement to take protective steps to restrain a gambler from exercising his liberty to gamble on his own responsibility, where his status as a problem gambler may mean no more than that he is experiencing mild and occasional difficulties of control." So far as fairness is concerned he said: "it would place a burden on the bookmaker pursuant to which the problem gambler could freely take home his profits, but look to the bookmaker for the return of his losses, without even seeking the bookmaker's assistance to help him control his gambling." The case was appealed but those conclusions were not challenged (see Calvert v William Hill Credit Limited [2008] EWCA Civ 1427) and have been followed in a number of other cases.
I respectfully agree with and adopt that approach: no broad common law duty of care was owed by the Claimant to the Defendant in this case.
In Calvert at paragraph 170, Briggs J left open the question (without deciding the matter) whether a narrower duty of care could arise in respect of a customer "whose behaviour has become so extreme as to demonstrate to a bookmaker that his gambling is wholly outside his control". Instead, on the facts of Calvert, a duty of care based on a voluntary assumption of responsibility arose from a direct interaction between a representative of the bookmaker and the gambler in circumstances where the representative undertook expressly to prevent the gambler from gambling with the bookmaker: see paragraphs 175 to 179.
It is unnecessary in this case to decide whether as a matter of law a duty of care can arise in the narrower circumstances identified by Briggs J in light of my findings of fact. I have rejected the Defendant's evidence that he had any gambling disorder at any relevant time. Even apart from those findings, the expert medical evidence of neither expert comes anywhere close to establishing so severe a gambling disorder as to lead to the conclusion that the Defendant's gambling was wholly outside his control.
Moreover, since the scope of the duty of care contended for by the Defendant (see paragraph 143 of the Defendant's written closing) goes no wider than the duty that is in any event imposed on the Claimant by SRC 2.5, namely the duty to take all reasonable steps to refuse service or to otherwise prevent an individual who has entered a self exclusion agreement from participating in gambling, any responsibility which the Claimant had was discharged by its compliance with both SRC and OC provisions whilst the 2009 VSE was in force. Further, for the reasons I have already given, in the unusual circumstances of this case, the 2009 VSE did not give rise to a voluntary assumption of responsibility by the Claimant to prevent the Defendant from gambling at the Casino after its lawfully agreed revocation.
As Judge Seys Llewellyn QC observed in Ritz Hotel Casino Limited v Al Daher [2014] EWHC 2847 at paragraph 116, Parliament has permitted "casinos to be licensed, and gamblers to gamble in them as a matter of their own autonomy. The scale of risk and reward, or reward and risk, may be a source of thrill and enjoyment to gamblers willing to hazard sums which those of lesser wealth would not regard as conscionable." Whilst to many it may seem irrational to gamble at the levels involved here, given the Defendant's undoubted wealth, his gambling as a VIP player was plainly within his means, and his own autonomy.
Given these findings and conclusions, it is unnecessary to address the questions of causation and contributory negligence raised by the Claimant.
Issue 10: Late Bets
The Defendant has failed to adduce evidence identifying when there were late bets and with what consequences. Although some instances of asserted late bets on 19 February 2014 were identified in correspondence shortly before the trial, there was no attempt in evidence to identify how late the bet was, why there was a requirement in the particular circumstances to disallow the bet or to identify the amount of money lost on each asserted occasion. This claim accordingly fails. It appears that the Defendant has taken a deliberate decision not to pursue this issue in the course of this action and I deal with it no further.
Issue 11: Discounts
Again so far as this complaint is concerned, no evidence as to any written or oral agreement has been adduced. It was suggested in argument by Mr Pettican that this claim depends upon a course of dealing, but again, there was no evidence produced to support the asserted course of dealing. In particular there was no evidence from the Defendant about such a course of dealing; nor was the matter pursued in cross-examination with the Casino staff. I reject this complaint in the circumstances.
CONCLUSION
The facts of this case are highly unusual and unlikely to be repeated. Although it has been presented as a case about the early revocation of a VSE in place to protect a vulnerable person with a severe gambling disorder, the evidence was a far cry from establishing the Defendant's account. The defence of illegality and breach of contract, and the claims of negligence, the additional serious allegations of misrepresentation, undue influence and unconscionable transaction all fail. The Defendant failed to establish that he had any gambling disorder at any material time and ultimately accepted that he never told any of the Casino staff about any such problem. He was the author of his own misfortunes.
Accordingly there will be judgment for the Claimant on its claim in respect of the dishonoured cheque, together with interest as claimed. The Defendant's claims fail and are dismissed.
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SIR COLIN MACKAY:
This is an application by Miss Rodway QC arising out of an ancillary issue I decided at the end of a split trial on liability only, in which I gave judgment for the claimant on 11 June last. So far as matters relating to the costs of the same, I invited written submissions, read them and produced without oral argument being addressed to me a subsidiary or second judgment on that issue, the relevant parts of which were paragraphs 1 and 4; it is paragraph 1, at which Miss Rodway now directs her fire.
It is common ground between both sides that the applicable version of the rules of the court, Civil Procedure Rules 1998, so far as this case is concerned are to be found in the 2014 edition of the White Book. There are changes that were made shortly afterwards which appear in the current edition of that work. The parties agree that I should be guided by, and act within, the 2014 rules. Secondly, it is agreed that the judgment the claimant was awarded was more advantageous than the offer that he made and which was rejected. Thirdly, it is agreed that Part 36, which caused an innovation when it was introduced in the 1998 rules, is to be read as a self-contained code and not to be confused with contractual notions or general costs discretion under Part 44 or non-Part 36 offers such as Calderbank type offers. The cases which support that correct concession have been shown to me: Gibbon v Manchester City Council [2010] 1 WLR 2081; Fox v Foundation Piling Ltd [2011] EWCA Civ 790; and Coward v Phaestos [2014] EWCA Civ 1256.
What happened here was that, on 12 March 2015, the claimant offered to settle this case in return for a judgment in his favour in which he would recover 80 per cent of the damages to be awarded in the split-trial case. The relevant period within which the defendant could (without leave) accept that offer expired on 2 April. It was not accepted and the claimant seeks to recover a judgment for damages to be assessed in full. Had the defendant decided to accept that offer within the relevant period, then the claimant would automatically have become entitled to the costs of the proceedings up until the date on which he served his notice and those were expressed to be under CPR 36.10(3) on the standard basis. As it is the matter went ahead.
The consequences of the claimant's success (if I may so call it), were that CPR 36.14 had come into play. As has been seen in the cases which I have cited, to which I made reference, that is a complete code into which nothing else should be imported from other areas of our jurisdiction.
I should read 36.14(3):
(3) Subject to paragraph (6), where rule 36.14(1)(b) applies, the court will, unless it considers it unjust to do so, order that the claimant is entitled to—
(a) interest on the whole or part of any sum of money (excluding interest) awarded, at a rate not exceeding 10% above base rate for some or all of the period starting with the date on which the relevant period expired;
(b) costs on the indemnity basis from the date on which the relevant period expired;
(c) interest on those costs at a rate not exceeding 10% above base rate; and
(d) an additional amount, which shall not exceed £75,000, calculated by applying the prescribed percentage set out below to an amount which is—
(i) where the claim is or includes a money claim the sum awarded to the claimant by the court…"
Subparagraph (4) goes on to consider what the court should consider when deciding whether it would be unjust to make two of the orders in particular the subparagraph (3) orders set out above.
In the event I ordered indemnity costs and I ordered them, on the on the face of it, to run throughout. I ordered interest on those costs but at the lower rate than the maximum, that is to say 5 per cent over base rate, that to run from 6 April (it should have been 2 April) at the end of the relevant period. I expressly said I made no order under 36.14(3)(a) and (d) and I did that because I thought that in the circumstances of a claim where nothing at all was known to either side of the overall planning of this claim, which could be very high or very modest and, despite the dramatic nature of the injuries, that it would simply be unjust to apply those provisions.
At the heart of this debate today has been Miss Hewells for the claimant arguing that I do not have power to take that course, that this is not only a complete code but it is, as it were, a menu all of whose courses must been delivered. I am not free to choose between the relevant features of subrule (3) or to find that to apply one would be unjust and to apply another would not.
Miss Rodway argues that I am required to consider the subparagraph and asked at each stage, would the application of this subparagraph to this case with its own particular circumstances, have been unjust. Reading the plain language of the rule as best I can, I have preferred Miss Rodway's construction of this provision. I also consider that she is right to argue that its proper provision would prevent the indemnity basis of assessment being applied on any day prior to the end of the relevant period. It is to be noticed that, of course, had the defendant accepted the offer within the relevant period by 36.10(1) and then (3) then the claimant would be entitled to costs of up to a point but to be assessed on the standard basis. I do not consider that it was right to make the order I made.
Because I had not heard oral argument on this matter, I left it open to counsel if they wished to come back on the draft order I imposed, and that is what has happened today. The result of that is that I believe the order as drawn was wrong to the extent that the provision that the defendant pay the plaintiff's costs relating to the issue of liability be assessed on an indemnity basis should be restricted expressly to the costs incurred or it coverable after the expiry of the relevant period, namely from 2 April 2015. So to that extent I agree the order must be amended.
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Neutral Citation Number: [2015]
EWHC 2264 (QB)
Case No: 2MA90124
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH
DIVISION
MANCHESTER DISTRICT REGISTRY
“SONAE GROUP
LITIGATION”
Liverpool Civil and Family Court
35 Vernon Street
Liverpool L2 2BX
Date: 30/07/2015
Before:
MR JUSTICE JAY
- - - - - - - - - - - - - - - - - - - - -
Between:
MRS SUSAN SAUNDERSON & OTHERS
Claimants
- and -
SONAE INDUSTRIA (UK) LTD
Defendant
- - - - - - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - - - - - -
Mr Michael Redfern QC, Mr Pepin Aslett and Miss
Alice Dobbie (instructed by Camps Solicitors) for the
Claimants
Mr Michael Kent QC and Mr Michael Jones (instructed by Clyde & Co Claims LLP)
for the Defendant
Hearing dates: 3rd – 5th, 8th
– 12th, 15th – 19th, 22nd – 26th
June 2015
- - - - - - - - - - - - - - - - - - - - -
Judgment
Mr Justice Jay:
INTRODUCTION
1.
This group litigation involves numerous similar claims for damages for
personal injuries, in the torts of negligence and public nuisance, brought by
16,626 Claimants arising out of a major fire at the Defendant’s particle board
manufacturing plant at Knowsley Industrial Park, Kirkby commencing on Thursday
9th June 2011, at approximately 17:30. The seat of the fire was
bunker no. 1 in the Woodyard building at the plant, but the fire spread to all
six bunkers in the building, causing a very substantial plume of smoke, fumes, associated
chemicals, and particulate matter to issue forth into the surrounding area. In
due course, most of the flammable contents of the building were consumed in the
fire. The Claimants, all of whom either lived or worked in the neighbouring
area or near the plant, say that they were exposed to quantities of smoke
sufficient to cause them personal injuries: in particular, a range of symptoms variously
involving the respiratory tract, the eye, and the skin; and in some cases
headache and more general debility. Fortunately, no one has alleged symptoms of
any permanence, and it is accepted that these are low-value claims.
2.
Since a Group Litigation Order was made in this case by Hamblen J on 12th
July 2012, the issues between the parties have narrowed considerably. By its
Group Defence filed on 25th January 2013, the Defendant admitted
breach of duty in respect of those who might foreseeably suffer injury in
consequence of exposure to the smoke. This admission has removed a layer of
evidential exploration, and concomitant potential complexity, from the scope of
the litigation. Both the existence and causation of actionable injury remain
hotly disputed.
3.
By Order dated 17th June 2014 the court directed that there
be a trial of common issues and of 40 test cases (at a pre-trial review which
took place on 5th May 2015 I reduced the number of test cases to 20).
The issues scheduled to that Order (being the varied GLO issues for the purpose
of CPR Part 19.13) are:
“1. When did the fire start and how did it spread?
2. What part of the site in addition to the Woodyard
Building was affected by the fire?
3. What was the quantity of recycled wood in the Woodyard
Building and any other part of the site affected by the fire when the fire
started?
4. What was the composition of such recycled wood when the
fire started?
5. What other materials were in the Woodyard Building
and any other part of the site affected by the fire when the fire started?
6. For how long did the fire burn/smoulder?
7. When did the recycled wood/other materials burn in the
fire?
8. What was the heat output of the fire over time?
9. What were the meteorological conditions during the fire?
10. What was the geographical spread of the smoke plume
during the various stages of the fire?
11. What was the chemical composition and concentration of
the smoke, in the geographical area in which exposure is alleged, during the various
stages of the fire?
12. What air quality or equivalent standards apply to
exposure to the smoke?
13. What, if any, air quality or equivalent standards apply
to short term exposure to the smoke?
14. What is the relevance of such air quality or equivalent
standards that exist to short term exposure?
15. Does Rylands v Fletcher apply?
16. What are the findings from the 40 test cases and how
should those findings apply to the issues in the individual cases, including:
(i) the extent of the Claimants’
smoke exposure.
(ii) the nature of any injury
suffered by the Claimants.
(iii) the diagnostic criteria for
any such injury.
(iv) the duration of symptoms
attributable to any injury suffered by the Claimants.
(v) the cause of any such injury.
(vi) whether such injury was
foreseeable.
(vii) whether such injury was
actionable in law.
(viii) the relevance of
pre-existing medical conditions.
(ix) the relevance of other
environmental factors such as cigarette smoke.
(x) Damages (if any)”
4.
Since this Order was made, it is apparent that (a) a number of issues
have fallen away, either through redundancy (e.g. issue 15) or agreement (e.g.
issue 9), and (b) some of the issues require refinement in the light of the
parties’ greater understanding of the case and/or the Joint Statements of the
experts. It is unnecessary to take time in the reformulation of the common
issues in this introductory section of my judgment. The Skeleton Arguments
filed at the beginning of this trial have served to stake out the battleground,
and indeed during the course of the 18 day hearing a number of issues either
disappeared altogether or the parties’ respective positions in relation to them
converged. I should also record that at a late stage in this litigation an
application was made to vary the GLO issues to enable the Claimants to pursue
nuisance and annoyance claims which differed from, or fell short of being,
claims for damages for personal injuries, but I refused that application
because it came far too late and the Defendant had all along been meeting these
claims on the basis that they were solely claims for personal injury damages –
see, for example, the original GLO issues as set out in the Order of Hamblen J.
5.
My judgment will set out the essential factual background in order to
provide sense and context to readers unfamiliar with this litigation, but the
main focus of what follows will be on what remains in dispute. In truth, not
all of the voluminous evidence I received, either orally or in writing, has
been entirely relevant to the matters remaining in issue. Moreover, the oral
evidence has been transcribed by Livenote, which may readily be referred to if
this case goes further.
THE
DEFENDANT’S PLANT AND MODUS OPERANDI
6.
The parent company of the Defendant is Sonae Industria SGPS SA, incorporated
in Portugal and a global producer of wood-based products. The Kirkby plant
opened in July 2000 and ceased production on 14th September 2012. At
the time of the fire, the plant operated for 24 hours a day, 7 days a week, and
produced approximately 400,000m³ of chipboard product a year. Back in 2000,
virgin wood was mainly used, but by 2011 the Defendant’s evidence was that 99%
of the raw material was recycled wood – with a lesser moisture content and a
greater degree of contamination from sundry extraneous matter such as plastic,
metal, glass, concrete and general detritus. The use of recycled wood also magnified
the inherent fire risk consequent on the storage of a dry, dusty product in a
relatively closed environment, and I heard evidence of a significant number of
fires before the incident presently under scrutiny. In my view, it is
unnecessary to examine the quantum of that risk, and the reasonableness of the
Defendant’s steps to minimise it, because breach of duty is not in issue.
7.
The parties called a number of witnesses to explain the workings and
operation of the plant. By way of summary, and avoiding matters of controversy
at this stage, external suppliers delivered the recycled woodchips to the plant
in vehicles variously described as lorries, trucks or wagons. The capacity of
these vehicles was up to 25 tonnes, but on average was in the region of 22
tonnes. Although the plant maintained a continuous operation throughout the
week, the vast majority of deliveries took place during normal working hours
with only around 4% of the total of 386 deliveries a week at weekends. According
to the evidence of the Defendant’s quality control manager, Mr Mark Callaghan,
incoming deliveries were weighed at the weighbridge and then directed to any
one of three areas where, after visual inspection and the possibility of rejecting
sub-standard consignments, the loads were taken off the vehicles to be
introduced in due course into the Defendant’s processes. Aside from the
external yard where considerable quantities of unprocessed woodchip may be seen
on a number of photographs, the loads were either removed from the vehicles
using massive hydraulic, tipping devices called Cometers, or were more
straightforwardly unloaded onto the walking floor of the woodyard building.
Thereafter, the loads underwent an initial cleaning process (the nature of
which varied depending on the pathway taken) before woodchips (by now measuring
between 1 and 80mm) were transferred, primarily by overhead conveyors, into any
one of six concrete bunkers which were in the same building. These bunkers were
contained in three separate silos aligned across the woodyard building in pairs
of two. Simultaneously with the deposit of woodchip into the bunkers, this
material was being withdrawn via a similar conveyor process (involving the use
of a large screw at the bottom of each bunker) to be subjected to further
cleansing and manufacturing processes “upstream”.
8.
The diagram appearing below clearly depicts the general layout of the
plant. The construct I am describing as the woodyard building comprises the
Cometer area and the Flaker Hall; the external yard is marked on the plan as
Chip Storage Areas 1 and 2. Given that the fire started in one of the concrete
bunkers in the woodyard building, it is unnecessary to describe later stages in
the Defendant’s processes culminating in the manufacture of the finished
product, namely sheets of chipboard.
A labelled
photograph appearing below shows the external configuration of the plant more
naturalistically, although the position and layout of the woodyard building is
less clearly depicted. This photograph will be better seen on an electronic
version of this judgment.
9.
I heard a considerable amount of evidence about the Defendant’s quality
controls (the efficacy of which was hotly disputed by the Claimants’
witnesses), cleaning procedures and quantities of dust. Given the evidence of
Mr Gregory Butler, which I consider in more detail below, it is unnecessary for
me to address these peripheral disputes. I certainly have the impression of a
plant which, at times, was dry and dusty, and the management of which may well
have failed to take proactive steps to analyse the fire risk and to address it.
However, these issues do not warrant close analysis, nor does the quite general
and unspecific evidence about “dressed” loads and degree of contamination.
Ultimately, there is convincing quantitative evidence upon which I am able
safely to rely.
10.
Returning to the layout of the woodyard building, the diagram appearing
below, drawn by Dr Jowett, provides a basic schematic pictorial of the position
of the silos and bunkers in relation to the Cometer area and the Flaker hall:
Each bunker was 25m in length, 12m
wide and 12m high. Each silo was 50m long and was split into two by means of a
400mm thick dividing wall, made of reinforced concrete. Along the base of each
bunker were “letterbox” or slot openings each 970mm deep.
11.
The overhead conveyor system was largely automated, and was controlled
by a SCADA system running on computer screens in various locations in the
plant. There was also a spark detection or “fire-fly” system intended to
provide early warning of combustion within the bunkers, and elsewhere.
12.
Appearing below is a diagram, furnished by the Defendant in late April
2015, illustrating the deposit of wood into the bunkers:
The legend explains the position
but further explanation is required. The ultrasound level detector (the
existence of which was revealed to the Claimants only very late in this
litigation) was designed to measure the distance between the conveyor and the
level of woodchip directly underneath. When the sensor detected that the level
had attained a pre-set value, the conveyor moved along the bunker to another
position before further deposits were effected. In this way the bunkers were
filled, but not in such a manner that the woodchips were ever horizontally
aligned within the plane formed by the tops of bunkers. The woodchips formed
peaks and troughs. Had an experiment been carried out to ascertain the maximum
capacity of the bunkers through this filling system, one would culminate with a
pile of woodchips describing a “Toblerone” shape, with the peak at a level
which matched the pre-set value on the sensor. Subject to some doubt as to the
angle of incline of this tent shape, the maximum tonnage of each bunker
calculated on this basis would have been in the region of 3,600 Te (the
Claimant proposes 3,696 Te). However, this theoretical perfection could never
be attained in practice, for several reasons. First, operational reasons within
the plant would dictate the state of the bunkers, and there was no need for the
bunkers to be as full as possible: as the operators all told me, they needed to
be “healthy”. Secondly, it is apparent from the schematic at paragraph
12 as above that the system was not designed to create a uniform, even peak –
hence the troughs to which a number of witnesses referred. Lastly, the process
was dynamic in the sense that the bunkers were constantly being emptied via
separate conveyors to enable the woodchips to enter the next stage in the
process.
13.
The SCADA system recorded the data sent back from the bunker sensors
(there was one sensor per bunker) on temporary log files, by definition for a
limited period. These files are no longer available. Two issues arise: first,
whether the data would in any event have thrown valuable light on the content
of the bunkers, as opposed to the distance between the sensor and the “drop
area” immediately below; and secondly, whether I should draw an inference
adverse to the Defendant flowing from the non-retention of these data. I will
be returning to these issues under the heading, “The Quantity of Woodchip in
the Bunkers”.
14.
Until a late stage in this litigation, the moisture content and degree
of contamination of the woodchips in the bunkers were in issue, and various
parameter values were suggested by the Claimants. However, the supplementary
witness statement of Mr Gregory Butler, the Defendant’s quality manager,
supplies an analysis, via sampling data, of the average moisture and
contamination levels over a five month period between January and May 2011; and
his evidence, although tested, was not seriously challenged under
cross-examination. Moreover, although the moisture values must be envisaged as
reasonably accurate, I accept the Defendant’s contention that the recorded
contamination levels in fact overstate the actual levels within the
bunkers, because the samples were taken before the first cleaning process. In
short, I proceed on the basis of data which cannot be significantly impugned,
namely a moisture level of 20% and a contamination level of 0.8%.
A SYNOPSIS OF
THE COURSE OF THE FIRE
15.
It has been estimated that the fire started at approximately 17:30 on
Thursday 9th June in bunker no. 1. The initial activation of the
“fire-fly” detection system occurred at 18:57, but the processes were not shut
down until just before 19:35. Employees smelled smoke, which slightly later was
seen to rise from an area towards the south-western corner of the bunker, and
attempts were made to douse the nascent fire using a hose. The Merseyside Fire
and Rescue Service (“MFRS”) was telephoned at 20:03, and fire-fighting
personnel soon arrived at the plant. Apart from spraying water into the bunker,
the strategy adopted was to remove as much woodchip material from the bunker as
possible in order to reduce the actual and potential fire load. At
approximately 03:40 on Friday 10th June a flame was seen to rise, or
shoot, from the south-western corner of bunker no. 1, fanning in all
directions. The flame was dark in appearance, and was lacking oxygen. Within a
rapid space of time flames were shooting out of the top of the bunker, and a
MFRS evacuation whistle was blown.
16.
Thereafter, the development of the fire was sudden. The amount of smoke
increased and the fire was soon spreading along the conveyors at a high level
in the building. The senior fire officer within the woodyard building described
the event as a “conflagration”. By 04:00, although the timings cannot be
altogether precise, it seems from the evidence of the fire-fighting
professionals on the ground that the fire had spread throughout the whole of
the woodyard building. By 06:05, all six bunkers were recorded as being on
fire, although it is possible that the ferocity of the fire had already
encompassed these structures. At that stage the fire was a raging inferno and
thick, black smoke was spewing from the roof of the woodyard building in
substantial quantities.
17.
According to Dr Jowett’s report dated 20th June 2011,
frictional heating within bunker no. 1 was the most likely cause of the fire.
The sudden escalation of the fire was caused by the collapse or slippage of
bulk material within the bunker, leading to the ignition of accumulated
pyrolysis products formed in the preceding hours.
18.
It is common ground that the fire went through three distinct stages or
phases. The first stage started at about 17:30 on 9th June (the
precise time matters not) and entailed a smouldering fire propagating slowly
outwards from the origin, creating a “nest” of burnt and smouldering material.
During this stage the heat that was generated by the process of combustion was
sufficient to pre-heat woodchips in the vicinity, but insufficient to ignite
the resulting pyrolysis products and cause flame. The first stage concluded
between 03:35 and 03:40 on Friday 10th June. The transition between
the first and the second stages occupied a number of minutes, and the second
stage commenced at about 04:00. This was the fully developed, substantial fire
involving in due course all six bunkers and other combustible materials within
the woodyard building. Amongst the characteristics of this second stage were
flame and black smoke. The fire transitioned into the third stage when the
appearance and quantity of smoke reduced, and the residue materials were
gradually consumed in a smouldering process characterised by “reverse
propagation”. The parties are not in agreement as to the timing of this
transition (which on any view must be somewhat imprecise), the Defendant
averring that it occurred by about 10:00 on 10th June, the Claimants
by 14:30. Thereafter, the fire diminished in intensity as the residue within
the bunkers was gradually consumed within the smoulder, with the MFRS permitting
it to burn out in a controlled manner and not declaring the incident officially
“closed” until 7th July 2011. By that point, there was very little
left in the bunkers except for ash and similar residue. Despite the extent and
intensity of the fire, only the woodyard building was involved.
THE ISSUES
ARISING FROM OR TOUCHING ON THE NATURE AND EXTENT OF THE FIRE
19.
At this stage, it is convenient to identify with greater salience and
precision than was achieved on 17th June 2014 (when the parties’
knowledge and understanding of the case and what really divided them was not as
great as it now appears) the issues which seem to me to arise for resolution in
relation to the matters I have ventured to summarise thus far. These are:
(1) the
quantity of woodchips in the bunkers.
(2) the
remaining fire load, in terms of its constituents and its quantities.
(3) the timing
of the transition between stages 2 and 3.
(4) the heat
release rates for the three stages.
(5) the
emission factors which should be applied to this fire.
(6) ash and
dust generation.
20.
The relevance of the fourth and fifth issues needs to be explained. In
order to achieve indicative values for the levels of exposure of the Test Claimants
to relevant chemicals and particles at various times, the plume modellers require
a range of data and information, including the relevant heat release rates and
emission factors. The concept of a heat release rate is self-explanatory –
other things being equal, the greater the rate, the higher the smoke plume travels
and the more widely it disperses. The concept of an emission factor is less
straightforward, and a full explanation appears under paragraph 92 below. The
basic point is that these variables are fed into the computer programme used by
the plume modellers. They also need to know the wind speeds and directions at
all material times (these are agreed), and finally they factor into their model
other variables such as exit velocities, temperature, diameter and number of
buildings (all of which variables are now also agreed). The parties are agreed
that emission factors constitute the most important scientific issue in this
litigation because they are so far apart in relation to it.
21.
Once the plume modellers have run their computer model on the basis of
the correct heat release rates, emission factors and other variables, the Test Claimants’
levels of exposure to chemicals and particles of interest can be evaluated. In
order to ascertain whether any individual Test Claimant may have suffered a
potentially injurious exposure, a scientific approach would mandate that the
raw exposure level predicted or indicated by the model be compared against
known toxicological data for the chemicals and particles of interest. These
data, to the extent that they are scientifically robust and substantiated at
relatively low levels of exposure, will serve as a guide in determining whether
any individual Test Claimant’s modelled exposure was above or below what might
be described as a threshold level for potentially deleterious health effects.
22.
I should make clear that the application of scientific methods to
engineering, toxicological and modelling questions cannot be regarded as
exhaustively determinative of the key issue which arises further down the line,
namely whether, having regard to all the available evidence, I should be
satisfied on the balance of probabilities that any individual Test Claimant
suffered personal injury in consequence of exposure to the products of the
Sonae fire. Submissions were deployed as to the difference between the
scientific and legal standards of proof, and I will need to address these in
due course. However, at this stage of the analysis I should indicate that in my
view purely scientific questions (e.g. the ascertainment of the appropriate
heat release rates from given data by applying established formulae) can only
be answered by applying scientific methods, within the context always of a
civil trial: whereas science may require proximity to certainty, the law does
not. To the extent that the heat release rates depend on the quantity of
woodchips in the bunkers, I approach the issue by applying the traditional
probabilistic standards familiar in civil litigation. To the extent that there
is inherent uncertainty or imprecision in any given scientific method, this may
be reflected in the overall assessment of whether any individual Test
Claimant’s case is proved on the balance of probabilities.
23.
I have mentioned expert evidence in a number of disciplines, and at this
stage I should explain the position in slightly more detail. The Defendant has
filed and served three reports and one letter from an expert in mechanical and
fire engineering, Dr Alan Mitcheson. His evidence bears on the issues of the
transition between stages 2 and 3, heat release rates and deposition of dust
and ash. At a pre-trial review which took place on 5th May 2015, the
Claimants sought my permission to file and serve comparable evidence from Dr
Phylaktou (I understand that he would also have assisted me on the issue of
emission factors), but I refused permission and relief from sanctions, on the
ground that it was far too late to adduce such evidence, and the smooth running
of the trial would be seriously prejudiced. My detailed reasons appear in a
separate transcript. Accordingly, the Claimants have no expert evidence
addressing these issues, although they do rely on their modelling expert, Dr
David Carruthers of Cambridge Environmental Research Consultants Ltd, to
address emission factors and the issue of radiative heat loss away from the
smoke plume (if a valid point, this would reduce the relevant heat release
rates accordingly). Issues arise as to Dr Carruthers’ qualifications to deal
with some of these issues. The Defendant has its own modelling expert, Mrs
Angela Spanton of Envirobods, and the parties have experts in meteorology (as I
have said, their evidence is agreed) and toxicology. In relation to this last
discipline, the Claimants rely on the evidence of Professor Alastair Hay, who
is an international authority in his subject, whereas the Defendant has called
Mr David Shillito, who is not a toxicologist but a chemical engineer with,
amongst other things, an environmental background. Mr Michael Redfern QC for
the Claimants did not object to Mr Shillito’s contributions in this regard, nor
did he object to him assisting the court on the issue of emission factors – a
matter on which he is qualified to opine, although it might be said that the Defendant
has exceeded its permitted quota of one engineer.
24.
I have to say that the state of the expert evidence in these technical
disciplines is not wholly satisfactory. In particular, I consider that I would
have benefitted from more evidence on the issue of emission factors. However, I
am not conducting a public inquiry, and I have to do the best I can on the
available evidence, remaining loyal to Mr Redfern’s warning, albeit delivered
in a different context, that judges are not “super-scientists”.
The Quantity
of Woodchips in the Bunkers
25.
I heard a range of evidence of variable quality and precision relating
to this issue. The theoretical maximum capacity of the six bunkers was in the
region of 4,200 Te (i.e. full to the brim), and the theoretical maximum achievable
in deployment of the sensor system was 3,696 Te (the “Toblerone” shape I have
previously explained). The Claimants’ case is that I should favour a figure in
the region of 3,000 Te, making allowances for what was practically attainable;
the Defendant’s case is that there were 1,550 Te of woodchips in the six
bunkers.
26.
The vast majority of the evidence bearing on this issue was of a lay,
not an expert, nature. The Defendant’s mechanical and fire engineer, Dr Mitcheson,
has contributed to the issue to a minor extent.
27.
The majority of the Claimants’ generic witnesses gave somewhat vague,
inconsistent evidence on this issue. According to paragraph 26 of the witness
statement of Mr Brian Beardwood, his belief was that for reasons of production
the bunkers were nearly full at the time of the fire. In oral evidence,
however, he could not say how much was in the bunkers, save that the levels
were “healthy”, which to him meant at least half full. Mr Brian Hoyles
told me that the bunkers were almost always full during the week, and fuller
during the week than at weekends. According to paragraph 33 of the witness
statement of Mr Michael McNamara, his belief was that bunker no. 1 was totally
full at the time of the fire. He was not certain, but believed that the
remaining bunkers must have been at least half full “because they tried to
keep them full all the time”. In his supplemental witness statement Mr
McNamara told me that one could view two months’ worth of data on the SCADA
system, and there were sensors on the bunkers which “definitely did measure
the quantity of woodchips in the bunkers”. He agreed in cross-examination
that his priority was the wet silos (further down the production line) and not
the bunkers, and accepted in relation to the latter that he was not sure
whether the sensors just measured the height of the drop immediately below
them. In re-examination, Mr McNamara said that as far as he could recall, when
he was reviewing the SCADA data for past trends, he was looking at the data
relating to the mixed-chip silos (i.e. not the bunkers).
28.
Mr John Rimmer, a maintenance technician, said in a statement introduced
as hearsay evidence under the Civil Evidence Act 1995 that the bunkers were “pretty
full, 65% at least at the relevant time”. The weight to be given to this
somewhat generalised and unspecific evidence can only be very slight.
29.
Impressionistic and inconsistent evidence of this nature from witnesses
who I would assess as not being particularly reliable falls a long way short of
being sufficient to prove the Claimants’ case that there was as much as 3,000
Te in the six bunkers. Further, I have already explained why operational
reasons would not require the bunkers to be so full, and that the process was
dynamic. In any event, other evidence called by the Claimants solidifies my
conclusion that the 3,000 Te figure cannot be right.
30.
Mr Terence Poulson, who I regret to say was a very poor witness, told me
that in the weeks before the fire the bunkers were 85% full to his knowledge.
On the night of the fire, he could see what was in the bunkers, and they were
85%, maybe 90% full. Under cross-examination, Mr Poulson expanded on this
evidence and said that he checked the level of the bunkers from the top of the
gantry, because he was trying to find out the source of the fire. Yet, at
paragraph 19 of his witness statement, Mr Poulson clearly stated that he was
not on the overhead gantry on the night of the fire, but was there the day
before. This is consistent with an earlier draft witness statement which was
put to him in cross-examination. Mr Poulson tried to persuade me that he was “at
the top of the stairs” rather than on the gantry itself. I did not believe
him. Another point which weighs heavily against him is that the evidence he
adduced to support his claim for damages for personal injuries was
inconsistent, exaggerated and in some respects (e.g. the reference in his
questionnaire to GP attendances) clearly untrue. I cannot accept Mr Redfern’s
submission that issues of credibility bearing on Mr Poulson’s symptoms must be
hermetically sealed from the credibility of his evidence relating to the bunker
levels. Mr Poulson well knew that the greater the contents of the bunkers, the
greater his prospects of succeeding on his damages claim.
31.
Another very poor witness was Mr Michael Moorcroft, who probably started
working at the plant as an industrial cleaner and occasional FLT operator on 22nd
May 2011. In his evidence in chief, he said “every time I visited the
bunkers, I would say that they were at least 85% full”. According to
paragraph 7 of his witness statement, “I can definitely say that they were
full”. However, it emerged in cross-examination that this witness did not
know that there were six bunkers in all. Further, his personal injuries’ claim,
although only cursorily examined because the whole picture was not available,
appeared extremely tenuous on the basis of the probable exposures to which Mr
Moorcroft was able to attest, and moreover his diagnosis of conjunctivitis on
10th May 2011 could have had nothing to do with the fire or his work
at this plant.
32.
I cannot conclude that because these two witnesses gave at best
unreliable, at worse untruthful, evidence it must follow that the Defendant’s
case is right. However, evidence of this quality has the tendency to undermine
the Claimants’ case that the levels were as high as 3,000 Te, or even 85% of
that figure.
33.
On 14th June 2011 Dr Paul Jowett of Dr J.H. Burgoyne and
Partners LLP, appointed to investigate the causes and circumstances of the fire
by the Defendant’s insurers, held a preliminary meeting with Rodney Mitchell,
its Chief Technical Officer, Nigel Graham, its Managing Director, and other
senior employees of the company. Dr Jowett was given contradictory information
as to the contents of the bunkers. The Defendant disclosed Dr Jowett’s notes of
this meeting, and others, extremely late in the day but ultimately I conclude
that nothing turns on that. His notes are a Curate’s egg from the Claimants’
perspective; and, more importantly, they are reliable. Dr Jowett was informed
of the identity of employees he might interview in the course of his
investigation. One of those employees was Mr Thomas Pybis.
34.
The Claimants called Mr Pybis to support their case on this issue. He
had been working as a Cometer operator in the woodyard building since
approximately June 2008. It is highly relevant that he was not asked to provide
a witness statement until this year. On 16th June 2011 he was
interviewed by Dr Jowett in relation to what he knew about the possible causes
of the fire and the quantities in the bunkers. Dr Jowett kept a contemporaneous
manuscript note and in my judgment was a particularly impressive witness:
moderate, measured, and astute to answer the questions put to him. The reason
why Dr Jowett took the trouble to speak to Mr Pybis was because he was the last
person to check the contents of the bunkers at approximately 18:50 on 9th
June. Mr Pybis gave Dr Jowett valuable information as to the profile of the
woodchips in bunker no. 1, and the manuscript diagram Dr Jowett was able to
draw was clearly based solely on that intelligence. When Dr Jowett’s detailed
notes were put to Mr Pybis in cross-examination, he agreed that they were
largely accurate, save as to the timing of the last inspection (in relation to
his dinner break) and the tonnages Dr Jowett recorded in relation to the
bunkers. The relevant section of Dr Jowett’s notes reads as follows:
“Bunker 1 I
estimate 200-250 tonnes a.t.o.f. [at time of fire] (i.e. about ½ full)
2 been
out of use – prob[lem]s with screw ∴ ~ 100 tonne
(sawdust) ~ 200 T
(purchased chips) ~ 300-350 T
Recycled wood 1 (S) ~ 350 T
Recycled wood 2 (N) ~ 350 T”
35.
It should be explained that Mr Pybis was using the names or labels for
these bunkers which were a throwback to the days when the plant took in virgin
wood, sawdust, purchased chips and some recycled wood. The two recycled wood
bunkers are numbered 5 and 6 on the plan (see paragraph 10 above). The
aggregate of these tonnages is 1,500 – 1,600 Te, and Dr Jowett has taken the
mid-figure of 1,550. Subsequently, Dr Mitcheson has used the self-same metric
to base his heat release rate calculations.
36.
Mr Pybis’ oral evidence was that the bunkers were habitually kept at a “healthy”
level, which in his view was anything in excess of 50% of capacity. He said, as
did other witnesses, that the bunkers would tend to be full on Thursday and
Friday to support weekend production. In cross-examination, he agreed that the
SCADA system did not indicate whether a bunker was full; it would merely show
the operators what was happening directly below the drop level. It was for this
reason that visual assessment of the bunkers, which entailed climbing up the
stairs onto the gantry, was the best way to evaluate the position, and was
therefore habitually undertaken. As regards Dr Jowett’s notes, Mr Pybis did not
accept that he would have told him the levels in terms of tonnages. He did not
in fact know these. Instead, he would have told him what the levels were in
terms of fractions or percentages. Mr Pybis agreed that he might have said that
bunker no. 1 was half full, but he would not have said that there was less in
bunker no. 2. In fact, his recollection was that bunker no. 2 was 75-85% full. He
was less sure about that in cross-examination. In his opinion, all the bunkers
had “healthy” levels, although there were different levels in each of
the bins.
37.
Mr Redfern urged me to treat Dr Jowett’s hearsay evidence, both that
contained in his notes and his oral account from the witness box, with
considerable caution. The notes were not checked for accuracy by Mr Pybis, and
the possibility for misunderstanding arises. In principle, I am content to
adopt that cautious approach in reaching appropriate conclusions about this
important seam of testimony. However, having seen and heard both Dr Jowett and
Mr Pybis, I am confident that the former’s notes are accurate.
38.
Mr Pybis gave the impression of trying too hard to persuade his
listeners that he would not have mentioned tonnages to Dr Jowett. I am sure
that he did, for a number of reasons. He was a reasonably able witness who told
me that he was passionate about his work. He had been working in the Cometer
hall for a number of years, and must have known the capacities of these bunkers
in terms of tonnages. In answer to my questions, he agreed that he heard others
mention 500 tonnes. When pressed in cross-examination, Mr Pybis let slip that
he rarely mentioned tonnages; he felt more confident using percentages. It
follows that he sometimes mentioned them. Finally, Dr Jowett’s unchallenged
evidence was that he simply wrote down what he was told. He had no reason to do
otherwise, and it is clear from other sections of his notes that he took care
to ensure that he had understood Mr Pybis’ explanations.
39.
My firm conclusion that Mr Pybis told Dr Jowett that there were
approximately 1,550 Te of woodchips in all six bunkers does not prove that the
former was right. Mr Redfern makes the points that the Defendant is relying on
the evidence of a labourer, and that an international company of this stature
should be able to adduce more cogent evidence in a case of this importance. I
will deal with Mr Redfern’s second argument later, but as for the first I
disagree with his somewhat dismissive assessment of his own witness. Mr Pybis
had worked his way up from being an industrial cleaner, and his competence and
experience are not in question. He was the last person who in fact witnessed
the levels in these bunkers. In my judgment, his experienced assessments were
reasonably reliable, and would have been at least as robust as anyone else’s. I
understand but cannot condone Mr Pybis’ reasons for wanting to backpedal. He
was not credible in that respect, but the reliability of what he told Dr Jowett
has not been undermined.
40.
Independent evidence as to the quantities in the bunkers comes from the
contemporaneous logs completed by fire officers of the MFRS. However, this
evidence is hearsay, somewhat contradictory and unreliable. MFRS’s sources are
unknown.
41.
The Defendant’s generic evidence of fact throws limited additional light
on this issue. Mr Mark Callaghan told me that the bunkers were usually
approximately 40-50% full (200-250 Te), which evidence is consistent with what
he told Dr Jowett in June 2011. Mr Callaghan said that the Defendant was
planning to stop production on Monday 13th June for at least three
weeks. This evidence came out the blue, and too late in the case for other
witnesses to be questioned about it. As I have said, other employees told me
that the bunkers would tend to be fuller towards the end of the week. I
understand Mr Redfern’s concern about the circumstances in which this evidence
has seeped into the case, but I believe that Mr Callaghan was a reliable and
impressive witness who did not enter the witness box in order to mislead me. Moreover,
in my view other former employees called by the Claimants were giving me, at
best, a generalised impression of the Defendant’s operation, not what was in
fact happening on this particular day.
42.
In any event, a shutdown on Monday 13th June might well have
precluded there being over 3,000 Te in the bunkers, but does not
necessarily contradict a total tonnage in the region of 2,500-3,000. I say this
because Mr Callaghan told me that approximately 700 Te were withdrawn per day.
On the basis of three days’ production (10th – 12th June
inclusive), and the necessity to leave the bunker screws safely covered, the
arithmetic speaks for itself. On the other hand, the impending close-down is a
pointer which slightly favours the Defendant and serves to neutralise the
Claimants’ point that as the weekend approached the bunkers tended to be
fuller.
43.
Mr Callaghan also assisted me with the workings of the SCADA system. He
explained that the purpose of the sensor was to monitor the height of the
woodchips so that they did not block the conveyor. The icon on the computer
screen would then give an indication in the form of a percentage of how much
was in the bunker overall. The temporary log files containing this information
were probably kept for around three months, but this witness was not sure. He
said that a “PLC engineer” would be needed to go back any further. However, he
was clear in his evidence that he never used the computer monitoring system to
evaluate levels, because there was no need to do so.
44.
Mr Callaghan also told me about a shift handover log which contained
information about the bunker levels; they were completed by the shift managers
on the basis of information from operatives. This was another evidential
revelation: no such logs have been disclosed, or mentioned in the Defendant’s
disclosure lists. Their purpose was to brief the oncoming shift, and the same
information would also be used at monthly meetings. In answer to my question,
Mr Callaghan told me that the shift manager on the night was Mr Steve Sharkey.
He would have ended his shift at 22:00, and would have “gone round the area”
maybe once during the course of the shift. I was given no explanation as to
why he was not called to give evidence about the bunker levels, but it is clear
that he did not speak to Dr Jowett about them and it is probable that what he
knew about bunker levels that night came from Mr Pybis. Furthermore, I draw the
reasonable inference that it is highly unlikely that any shift handover log
would have been prepared and completed on the night of the fire at or near to
22:00. There were other, more pressing concerns.
45.
Mr Alan Whitrow, the woodyard manager, told me that the bunker sensors
never worked, in the sense that they were never accurate. It was much easier to
check the levels visually, which was precisely the reason for operators and
managers doing so on a regular basis. Mr Whitrow did not agree with Mr
Callaghan’s assessment as to general practice in relation to levels within the
bunkers: he said that each week was different, and that it was difficult to
say.
46.
At the Claimants’ request, Mr Michael Kent QC for the Defendant called
Mr Brian Hayes, the company secretary of the Defendant since December 2012. At
the time of these events, he had been chief financial officer. He was responsible
for signing and declaring the truth of the Defendant’s disclosure statements in
this litigation. Mr Hayes was a somewhat cavalier witness who appeared to take
the view that because the Defendant had disclosed information relating to the
contents of the bunkers, viz. the Pybis data, that was the end of the matter. I
was not impressed by that attitude, or by certain features of his evidence. It
is unclear why no search for any electronic documents was made before the
Standard Disclosure Statement was signed on 28th March 2013. In
relation to the first Supplemental Disclosure Statement dated 25th
June 2014, Mr Hayes had ticked the box to the effect that no search had been
made for electronic data, but then it transpired that electronic meteorological
data had been disclosed. Mr Hayes told me that he had made a mistake about
this: that, in my view, evinced at best poor attention to detail. The further
Disclosure Statement dated 14th August 2014, again signed by Mr
Hayes, stated that a search had been made of the internal server in Portugal. On 17th June 2014 HHJ Gore QC had been told that a search would be
made of that server, and that it would take 4 months.
47.
The position in relation to the Sonae computer system was investigated
with Mr Hayes, but his evidence was not as clear as it might have been. He told
me that the SCADA data with which this case is concerned would not have been
backed up or saved on Sonae’s main server in Maia, Portugal. Those data were
retained on temporary log files which were deleted after 4 weeks. My
understanding of computer systems is imperfect, but I imagine that an expert
would have been able to retrieve these data from the systems in Liverpool notwithstanding their deletion. However, on 2nd November 2012 the
Sonae plant was sold to a competitor, along with its computers. Some data would
have been transferred to Portugal for financial and other obvious reasons, but even
if they still existed I see no reason for any of the SCADA data being preserved
in this way: their value was ephemeral.
48.
It follows that unless I reject Mr Hayes’ evidence about the SCADA data
not being transferred to Portugal at any stage, the data were deleted from the
system within 4 weeks (Mr Hayes’ figure) or 3 months (Mr Callaghan’s), could
not easily have been excavated from the hard drive after that, and were lost
forever on 2nd November 2012. I have asked myself why Mr Hayes took
the trouble to make any lengthy inquiries in Portugal if the true position was
that the data of interest did not exist by then. Upon reflection, and
considering Mr Hayes’ evidence as a whole, I cannot conclude that he was a
mendacious witness. It was necessary to undertake certain inquiries in Portugal
as to how the SCADA system functioned in relation to the bunkers, and the operation
of Sonae’s computer systems in general. Mr Hayes was an unsatisfactory witness,
but I do not reject his evidence wholesale.
49.
Mr Redfern also relied on the fact that in June 2011 Dr Jowett had
advised the Defendant by email to retain electronic data relating to the
firefly system, from which it should have been deduced that there was a need to
retain electronic documents generally. However, I do not draw that inference at
all: Dr Jowett was not interested in or impliedly referring to bunker sensor
data, and in June 2011 the Defendant could not have anticipated these claims,
or that the levels in the bunkers would be an issue.
50.
At this stage, it is convenient to address Mr Redfern’s submission that
I should draw inferences adverse to the Defendant regarding the contents of the
bunkers because it has lost or withheld relevant information, namely the records
from the SCADA system relating to the data sent back by the sensors. He relied
on the well-known case of Armory v Delamerie [1722] 1 Strange 505 which
has recently been considered by Mann J in Gulati and others v MGN Ltd
[2015] 1482 (Ch). In that case Mann J was considering breach of privacy claims
by victims of phone-hacking. He decided that the Armory principle was
relevant to his judicial task because on the facts of the case before him it
was germane to the scope of the Defendant’s wrongdoing, which was itself
relevant to the scope of the invasion of privacy, and concomitantly relevant to
damages [91]. Further, at [96] Mann J explained that Armory encapsulated
an evidential principle relating to how the court should assess and find facts
when that process has been obstructed by the acts of one of the parties.
51.
Mr Redfern submitted that the Defendant, both through Mr Hayes and more
generally, has acted reprehensively in failing to preserve the SCADA data
before deletion, and/or failed to interrogate the main server in Portugal. On that footing he invited me to draw the inference that the bunkers were in fact
at maximum operational capacity, which realistically (from the Claimants’
perspective) means 3,000 Te.
52.
Persuasively though they were presented, I cannot accept Mr Redfern’s
submissions. There are two answers to them. First, I do not accept that the
Defendant should have preserved the SCADA data before the temporary log files
were deleted, and/or before November 2012. Assuming that the Defendant’s
solicitors advised its client to retain relevant documents, including data,
when this claim was first intimated, the Defendant’s computer system in the UK
was sold at an early stage in the litigation. It would have required
considerable knowledge and “joined up thinking” to have concluded that these
systems should have been interrogated, and temporary log files reconstructed,
before they were transferred to the purchaser. By the time the Defendant should
reasonably have been alert to this recondite issue, it was too late. Overall,
the Claimants have fallen short of demonstrating the sort of reprehensible
conduct on the Defendant’s side which would justify the drawing of the adverse
inference sought; and, in any event, the requisite causative link between
conduct and the loss of electronic documents has not been established.
53.
Secondly, the SCADA data, even if available, would have thrown little
further light on the actual contents of the bunkers. The computer may have
generated a percentage figure from the sensor data but it was, at best, only
indicative. The clear evidence from Messrs Whitrow and Callaghan, which I
accept, is that these data were not relied on. The only reliable means of
establishing the bunker levels, and that was imprecise too, was to take a look.
Operators and managers would not have taken the trouble to do this if their
efforts were supererogatory. Furthermore, looking again at the diagram at paragraph
12 above, it is quite obvious that the inferences to be drawn from a series of
distances from sensor to individual peaks were likely to be imprecise and
inaccurate, in relation to a process which was dynamic. In the end, Mr Redfern
had to submit that I should “draw an inference from an imponderable”. The
philosophers might enjoy this sort of metaphysical conundrum, but it is lost on
the common lawyer.
54.
Mr Redfern advanced a separate submission regarding the Defendant’s
comportment in relation to its disclosure obligations generally. This was less
persuasive, given my judgment at the pre-trial review on 5th May
2015. Mr Redfern did not make sustained submissions about the shift managers’
logs, and unless the Defendant is wholly misleading the court, the position
must be that they are no longer available. I do accept, however, that the
Defendant – through Mr Hayes, is remiss in failing to include these logs, as well
as the temporary log files in its August 2014 Disclosure Statement, under the
rubric of documents no longer in existence.
55.
It is also convenient to deal with Mr Redfern’s yet broader point,
advanced more in cross-examination than at the end of the trial, that I should
draw general inferences adverse to the Defendant flowing from its poor safety record,
the number of fires, the inherent risk and the dryness of the work environment.
Mr Redfern submitted that this fire was reasonably foreseeable, and that issues
of foreseeability and causation are, by their nature, intrinsically
intertwined. I cannot accept this submission either. The Defendant does not
dispute that the Claimants’ alleged losses are reasonably foreseeable. I do not
accept that foreseeability and causation can be elided, or (to put the point
slightly differently) that the degree of the Defendant’s fault is capable of
being relevant to the issue of causation. These are, and remain, discrete
concepts. However badly the Defendant may have behaved, the Claimants still
have to prove their cases to the requisite standard, and their task is by no
means attenuated or abbreviated by the extent or quantum of breach of duty. The
instant case is wholly different from the situation analysed by Mann J in Gulati
(at [91] of his judgment) where the scope of wrongdoing bore on the quantum of
damages, and also differs from the context of Viscount Simonds’ dictum in Nicholson
v Atlas Steel Foundry & Engineering Co. Ltd [1957] 1 WLR 613, 618 (once
breach is admitted, it requires “little further to establish a causal link”).
56.
Mr Redfern advanced a separate submission on the drawing of adverse
inferences based on a case extremely familiar to him, Wisniewski v Central Manchester HA [1998] PIQR 324, 340. He submitted that I should draw inferences
adverse to the Defendant flowing from its failure to call relevant witnesses,
namely Mr Sharkey and Mr Mitchell. I cannot conclude that these men could have
given me no relevant evidence, but I do conclude that their evidence could
not have assisted me significantly. Mr Mitchell could have spoken to the
capacity of the bunkers, but this issue is no longer in dispute, pace Dr
Mitcheson’s arithmetical error in this second report. As I have already said, Mr
Sharkey could not improve on Mr Pybis’ evidence, particularly in circumstances
where the shift managers’ logs are no longer available.
57.
Returning to the quantity of woodchips in the bunkers, the final point
which places the seal on the Defendant’s case pertains to the separate
calculations Dr Mitcheson performed to ascertain the approximate tonnage within
the bunkers at the end of second stage of the fire. Paragraph 64 of Dr
Mitcheson’s first report dated January 2014 proceeded on the basis of an
initial tonnage of 1,550 and a heat release rate of 330 MW, leading to a burn
of 700 Te and a residue of 850 Te. In his report dated 12th
September 2014, Dr Mitcheson carried out a more straightforward calculation
based on the assumption that the bunkers were filled with unburnt woodchips up
to the level of the letter boxes. On this premise, the mass of the unburnt
woodchips was in the region of 900 Te, a figure not far off the 850 Te attained
by a different methodology altogether. Mr Redfern sought to persuade me through
cross-examination of Dr Mitcheson that the second method was either
self-evident or tautological, amounting in effect to the skinning of the same
cat by the same knife (my metaphor, not his), but I cannot agree. Somewhat
rough-and-ready though Dr Mitcheson might have been in his later report, I
consider that his methodology was different and the point he was seeking to make
is valid.
58.
Furthermore, Dr Mitcheson’s advice to the court is that if there had
been 3,000 Te in the six bunkers, then the heat release rate during stage 2 of
the fire would have been a staggeringly high 1,000 MW. I accept his evidence
that the degree of heat damage to the woodyard building tells against this
having been the case.
59.
It was put to Dr Mitcheson that an inference could be drawn from the
fact that the similar quantities of ash seen in the bunkers after the woodchips
had burned indicated that there were similar quantities ex ante. Dr
Mitcheson’s answers, which I accept, were that there was in fact less debris in
bunker no. 2; and, in any event, that post-fire ash levels cannot give a
reliable indication of the pre-fire load.
60.
Overall, I am satisfied on all the evidence that the total quantity of
woodchips in the bunkers was in the region of 1,550 Te. It might have been
slightly more, it might have been slightly less, but it is reasonable to
proceed on the basis of that figure.
The Remaining
Fire Load
61.
Dr Mitcheson has calculated the remaining fire load in the woodyard
building. In his estimation, there was approximately 20 Te of conveyor belting,
16 Te of foam insulation and 4.5 Te (or 5,000 litres) of hydraulic oil. The
combustion of these materials created dense black smoke. In addition, there
were unquantified accumulations of woodchip and associated dust outside the
bunkers which would not have materially contributed to the fire load but would
have accelerated the spread of the conflagration at or shortly before 04:00 on
10th June. Finally, Dr Mitcheson refers to electric cabling with
small amounts of plastic insulation, hydraulic hoses, miscellaneous painted
surfaces and other similar combustible materials. Again, these did not
contribute materially to the overall fire load.
62.
Dr Mitcheson has taken into account the conveyor belting and the
hydraulic oil in computing the heat release rate for stage 2 of the fire. In
that regard, he has not taken into account the foam insulation (more exactly,
the polyurethane foam filling the gap between the perimeter walls of the
building), on the basis that it pyrolised and absorbed heat to more or less the
same extent as it emitted heat. I do not understand that part of Dr Mitcheson’s
evidence to have been contradicted. In any event, the Claimants would not be
assisted by greater heat release rates.
63.
The Claimants dispute the quantity of foam insulation and contend for a
figure of approximately 40 Te. They also argue that 4-5 Te of perspex roof
sheeting was involved in the fire. Dr Mitcheson agreed that the total potential
fire load as regards the foam insulation was in the region of 40 Te, and on one
interpretation of his evidence in cross-examination he appeared to accept that
had it burned it would have added considerably to the heat release rate. It is
unclear to me why he made that concession (if indeed he made it) – logically, combustion
should have a neutral impact on the heat release rate regardless of the
quantity burnt – but his real point was that on his interpretation of the
photographic evidence no more than 16 Te could have been consumed in the fire. This
was on the footing that only the top 2m burned. Dr Jowett, who was in a better
position to assess this damage, said in cross-examination that “just the top
few metres were involved in the fire”. However, he also said that he had not
done the calculation. In my judgment, it is likely that more than 16 Te of foam
insulation was involved in the fire, but it is unclear how much more. I do not
accept that the whole potential fire load of 40 Te was entailed. My finding has
no impact on Dr Mitcheson’s heat release rate calculation for stage 2, but it
does serve to enhance the emissions of pollutants during that stage. Yet, how
much difference that made cannot be assessed, save in the general sense that
the enhancement could not have been that great in proportion to the quantity of
woodchips. Finally, I cannot accept Mr Redfern’s criticism of Dr Mitcheson that
he should have accounted for the foam insulation. This expert’s brief was to
evaluate heat release rates; he had no interest in emissions and pollutants.
64.
As for the perspex sheeting in the roof, it is clear that Dr Mitcheson
did not take these into account. They would have had a minimal impact on heat
release rates but would have contributed to some extent to the overall fugitive
escape of potentially toxic chemicals. This is extremely difficult to quantify,
not least because the dimensions of the roof spaces have never been measured,
and to the extent that they appear in photographs their size and weight cannot
be readily estimated. Mr Callaghan said that there were 3-4 pitches in the
roof, with a maximum of 2-3 thin perspex panels in each pitch. With reference
to furniture in the court room which Mr Callaghan used as his yardstick, I
formed the impression that each panel was about 2m x 1.5m. I would not wish to
speculate as to the total weight of all the panels, but the Claimants’ estimate
of 4-5 Te seems excessive. The panels melted at the outset of stage 2 and added
to the mélange of chemicals at that juncture.
The
Transition from Stage 2 to Stage 3
65.
Stage 2 of the fire was characterised by very considerable quantities of
thick, black smoke billowing forth from the roof of the woodyard building.
There are photographs and spectacular video footage which illustrate this quite
well, allowances being made for photograph quality, the play of light sources
across the lenses, and (at least in some cases) some doubt as to the exact
timing of certain, publicly available video footage. The black smoke was the
result of an oxygen-deprived fire, burning rich, producing incomplete products
of combustion. Dr Mitcheson agreed in cross-examination that the space both
immediately above and within the bunkers was heavily smoke-logged during stage
2, and that the richer the burn, the greater the pollutant content. Dr Jowett
was asked about smoke-logging, and in his view what mattered was not the
clogging smoke above the bunkers but within them. In my judgment, nothing
really turns on this nuance.
66.
In Dr Mitcheson’s opinion, the transition from stage 2 to stage 3
occurred at approximately 10:00 on Friday 10th June, although he
accepted that placing an exact timing on what was essentially a process rather
than an event was somewhat arbitrary. Dr Mitcheson based his opinion on the
MFRS log and what he considered to be reliable lay evidence (appended to his
first report), and on the photographic and video record. I have reviewed the
log very carefully but I am far from convinced that it provides much positive
support for Dr Mitcheson’s argument. Certainly by later on that afternoon there
is reasonably clear evidence of a significant reduction in the overall
quantities of smoke, and the Claimants propose a later time for the transition,
namely approximately 14:30 on Friday 10th June.
67.
There are two features of the evidence which require closer examination.
First, what may be described as the highlights of the photographic and video
evidence were considered by Dr Mitcheson, both in chief and in
cross-examination. I should add that when opening his case to me Mr Redfern
presented a 40 minute montage of the available evidence, and Dr Mitcheson
confirmed that he had seen it. A video available on Youtube, which is untimed
but Dr Mitcheson surmises was taken at around 10:00, shows lesser quantities of
smoke issuing from the plant, and a possible change in colour – blending from
white grey to a darker shade of grey. Photographic images taken at 10:28 and
10:29 that morning, showing the west and northwest aspects of the woodyard
building, appear to depict smoke of a light grey colour tinged with yellow.
There was some suggestion that the yellow might be a refraction or reflection of
light from the sun, but I doubt that. Dr Mitcheson agreed in cross-examination
that the yellow smoke was probably the product of something other than wood.
However, it remains unclear what this was or might have been, and ultimately smoke
of this hue does not really assist me in timing the transition from stage 2 to
stage 3. Another image timed at 11:04, but taken from a different angle, shows
what I would describe as grey, but not black, smoke. A further photograph taken
at 11:17 shows a significantly reduced amount of smoke.
68.
Dr Mitcheson agreed that the position changed at approximately 13:24 on
the Friday afternoon when there is a body of photographic and video footage
showing thick black smoke. By 14:49 the quantity had reduced but the colour was
still fairly black. Dr Mitcheson’s contention is that this represents the combustion
of approximately 2,500 litres or 2.25 Te of hydraulic oil which had entered the
immediate zone of the fire. There is some support for this explanation from a
MFRS log entry timed at 13:29 – it erroneously refers to “approximately 1,500
litres of hydraulic fuel” having entered the area of the fire, but nothing
turns on this quantitative error, or the mis-description of the substance.
69.
On the other hand, the Claimants contend with some conviction that it is
not easy to understand how 2,500 litres of hydraulic oil could have accounted
for densely copious quantities of black smoke which endured for at least 85
minutes. Interestingly, Mr Callaghan put the duration of this black smoke as
being only 10-15 minutes, which in my view is incorrect. I see the common sense
force of the Claimants’ point, but Dr Mitcheson explained in cross-examination
that the oil could have pooled on the ground. Dr Mitcheson did not accept the
force of the point that one would have expected both oil tanks to enter the
fire zone more or less simultaneously. In this regard he received some support
from the evidence of Mark Callaghan to the effect that the oil tanks were 8-10
metres apart.
70.
To my mind, there are two difficulties with the Claimants’ argument
hereabouts. First, they have no expert evidence with which to contradict Dr
Mitcheson, and overall I have concluded that he was a good witness. Secondly,
if this was not hydraulic oil burning, then the only competing hypothesis is
that there was some unexplained recrudescence in the fire involving the
woodchips, and what might be characterised as a temporary reversion from stage
3 back to stage 2. Although I fully accept the possibility that this fire waxed
and waned to some extent, I cannot agree that a flare-up of this magnitude might
have occurred. All six bunkers were heavily consumed in the fire by 06:00, and
I cannot accept Mr Redfern’s subsidiary point that more polyurethane foam might
have been involved after 13:30.
71.
For all these reasons, I have concluded on the balance of probabilities
that the transition from stage 2 to stage 3 occurred at approximately 10:00 on
Friday 10th June, and that at that point Dr Mitcheson is correct in
advising the court that around 700 Te of woodchips were consumed over the six
hour period from 04:00 to 10:00, leaving approximately 850 Te at the point of
transition. Dr Mitcheson derived this figure from the level of woodchips in
relation to the “letter box” or slot openings. In my view, this was a somewhat
rough-and-ready approach, but Mr Redfern did not take issue with it.
72.
Nor did Mr Redfern take issue with another calculation which appears at
paragraph 69 of Dr Mitcheson’s first report. There, Dr Mitcheson explains that
by 13th June the MFRS photographs show that the bunkers contained
ash and smouldering woodchips to a depth equivalent to about three-quarters of
each slot height, i.e. about 0.75 metres. This equates to a volume of about 225m³
in each bunker, suggesting an unburnt mass of about 22 Te per bunker and a
total mass of about 120 Te. Accordingly, the majority of the woodchips
remaining at the commencement of stage 3 were consumed by about midday on 13th
June. Subsequently, it is obvious that there was much less left to burn, and Dr
Mitcheson calculates that by 7th July only about 10 Te remained. Put
another way, by midday on 13th June there was much less left to
burn, much less smoke, and many fewer emissions of pollutants.
73.
In my judgment, the Claimants cannot escape from the logic of these
computations, nor did they try to. Dr Mitcheson was cross-examined on the basis
that if the figure of 1,550 Te which he was given by Dr Jowett was wrong, then
his report was wrong overall. As it happens, the figure he was given was – on
my findings - correct, but even if it had been erroneous Dr Mitcheson would
simply have had to revise his calculations on the basis of my finding; he would
not have had to revisit his methodology.
74.
Dr Mitcheson’s calculations receive further support in the lay evidence
from the Defendant’s side. I was not particularly impressed by the evidence of
Ms Joanne Ashton and Ms Gina Fitzgibbon – there were too partisan for my
liking, and overly disposed to downplay the extent of the fire on the Friday
morning. The evidence of Mr Alan Whitrow was very much more compelling.
According to paragraphs 39 and 40 of his witness statement:
“I returned to the site on Saturday 11th and
Sunday 12th June 2011. During these days, I walked around and
liaised with demolition contractors and the fire brigade. On a number of
occasions I was inside the woodyard building. I was able to see clearly and did
not experience any breathing difficulties. The fire fighters were not wearing
any breathing apparatus as we walked around the site or were inside the
woodyard building …
During the remaining period of the fire, I continued to be on
site during my normal working hours. By approximately Monday, the smoke from
the fire had decreased significantly and from then onwards, the smoke gradually
decreased.”
75.
Best of all from the Defendant’s perspective was the evidence of Dr Jowett.
Back in June 2011 he had no interest in matters such as the quantity, thickness
and colour of the smoke; these were wholly outside the ambit of his concerns. As
I have said, he went to the plant on 14th June in order to undertake
a preliminary inspection. His photographs taken at the time do not show copious
quantities of smoke, and when he inspected the woodyard building that afternoon
there was very little smoke at ground floor level. The position was the same
the following day. Dr Jowett returned to the site on 23rd June and
carried out a risk assessment for his own purposes. This assessment made
provision for wearing a personal gas monitor should the need arise, but
according to paragraph 22 of his witness statement the alarm levels on the
monitor were triggered at no point during his inspection. On that occasion, Dr
Jowett took what he called an “inspection movie” (his exhibit ‘PAJ-5’, lasting
40 minutes) which shows little smoulder or smoke emanating from the bunkers by
that stage.
76.
Finally in this regard, there is an illuminating photograph published in
a national newspaper showing the scene at 17:21 on 14th June. From
the woodyard building emerge relatively modest quantities of grey-white smoke.
The wind direction is towards the photographer. And between the photographer
and the plant we see a mother and child, apparently oblivious to the smoke or
its immediate consequences. True, one possible inference is that the woman in
question was acting in reckless disregard of her own and her child’s health. My
preferred inference, having considered all the available evidence, is that the
smoke was not causing any obvious, immediate ill-health effects.
77.
Of course, the weight to be given to this corpus of evidence should not
be exaggerated. It is far from being quantitative; it merely creates a general
impression. On the other hand, it needs to be recognised that aspects of the
Claimants’ case depended on the making of a favourable impression from their
perspective. That aside, I appreciate that from a more scientific viewpoint
greater emphasis should be placed on considerations such as the applicable
emission factors, the meteorological variables and health thresholds to be
drawn from the toxicology, all being matters which remain to be addressed in
this judgment.
Heat Release
Rates
78.
The only evidence available to assist me on this issue came from Dr
Mitcheson. Apart from a major attack on Dr Mitcheson’s factual premises (e.g.
initial tonnage of woodchips in the bunkers; amount of foam insulation), and a
strand of cross-examination intended to reinforce his case in relation to
emission factors, Mr Redfern did little to impugn Dr Mitcheson’s methodology in
this somewhat technical and recondite domain. In these circumstances, I am able
to be quite brief.
79.
As its name might suggest, the heat release rate is the heat generated
by a fire measured in watts. In a case such as the present where any empirical
evaluation would have been close to impossible, heat release rates can be
computed from the product of the mass burning rate (measured in m¹ kg/s) and
the heat of consumption, ΔH, expressed in MJ/kg.
80.
Dr Mitcheson has computed heat release rates for the various stages of
the fire, as follows:
·
Stage 1, from about 17:30 on 9th June to about 03:35
on 10th June: q¹ = 0.01 x t² MW (t being measured in hours).
·
Stage 2, from about 04:00 to 10:00 on 10th June: q¹ =
330 MW (for the woodchips), + 28 MW between 04:00 and 06:00 (for the conveyor
belts) + 12.5 MW between 06:00 and 07:00 (for the hydraulic oil).
·
Stage 3A, from about 10:00 on 10th June to about 12:00
on 13th June: q¹ = 64 x exp (-0.65 x t) MW (where t is the time in
days after reverse smouldering became predominant, on 10th June, at
which time t = 0).
·
Stage 3B, from about 12:00 on 13th June to 7th
July: q¹ = 1.4 x exp {-0.1 x (t-3)} MW (where t is the time in days after
reverse smouldering became predominant, on 10th June, at which time
t = 0).
81.
In reaching these conclusions, Dr Mitcheson made a number of assumptions
about the nature of the fire at various stages, its levels of oxygenation, the
calorific value of wood, its moisture content, and other matters. These were
necessarily imprecise, and the resultant heat release rates cannot be regarded
as entirely robust. Given the absence of an expert instructed by the Claimants
who might have advanced different heat release rates, following which there
might have been room for an element of compromise at a joint experts’ meeting, at
the conclusion of his evidence I invited Dr Mitcheson to reconsider his
conclusions and advise me as to whether there might be respects in which a
different opinion might be accommodated. Dr Mitcheson declined my invitation.
82.
On my understanding of his cross-examination, Mr Redfern sought to
undermine one of the assumptions made by Dr Mitcheson, namely that “the
combustion of the woodchips in the bunkers would be expected to resemble that
of an under-ventilated, close packed crib within an enclosure” (see
paragraph 63 of his first report). Shortly after lunch on the day Dr Mitcheson
was giving evidence (Friday 5th June), Mr Redfern cross-examined him
at length on the quantity of oxygen likely to reach the fire on account of the
degree of smoke-logging within and above the bunkers. Mr Redfern’s objective
was to ensnare the witness into a debate about emission factors, not heat
release rates, but Dr Mitcheson was unwilling to express a view about these. I
suspect that he might have been qualified to do so, but it was clear that he
had performed neither the calculations nor the degree of deep cogitation
required to express a properly tutored view. Mr Redfern made some headway on
this topic, in the sense that he was able to persuade me that certainly during
the earlier hours of stage 2 there were very considerable quantities of black
smoke and this fire was severely under-ventilated. However, I need to store
this evidence away for use at a slightly later stage in this judgment, under
the rubric of emission factors.
83.
Although Mr Redfern was far more concerned to develop his point in
relation to emission factors than to heat release rates, I pressed Dr Mitcheson
on the issue at the very end of his evidence. Given that Dr Mitcheson had
derived his mass burning rate set out at paragraph 63 of his first report from
the SFPE Handbook and a situation which is there described as apt for a “room
fire with one or more vertical openings”, I was concerned whether the
particular features of this fire might displace or undermine this model. Dr
Mitcheson had agreed in cross-examination that the simile was not exact, but he
told me that he had taken proper account of the ventilation of this fire in
arriving at his final heat release rate for stage 2. When I examine Dr
Mitcheson’s oral evidence against paragraph 64 of his report, I am not wholly
persuaded that his analysis is correct. In particular:
“The mid-heights of the slots were about 0.5m above the base
of the bunkers and the openings measured approximately 25m x 1m each side,
giving an area of 50m² per bunker. On this basis, the mass consumption rate is
predicted to have been about 4.25 kg/s per bunker. However, this ignores the
open top through which air would have entered and products would have escaped,
both of which would increase the burning rate. For this exercise I have
estimated that the burning rate during stage 2 would have been about 6 kg/s per
bunker, or 33 kg/s overall.”
84.
No one has spotted the arithmetical, or more likely typographical, error
in the final line of the foregoing quotation, and I have not redone the heat
release rate calculation to fathom this issue. Given the ubiquity of dense
black smoke and consequent under-ventilation of the fire during certainly the
early hours of stage 2, I suspect that Dr Mitcheson has increased the burning
rate by too high a factor in all the circumstances of this case. A slightly
lower burning rate, and a concomitantly depressed heat release rate, might make
a relatively small difference to the plume modelling, no doubt in the
Claimants’ favour – the higher the heat release rate, the higher the apex and
range of dispersal of the plume. However, Dr Mitcheson’s evidence has not been contradicted,
it is not obviously illogical or implausible, and I have simply no evidential
basis on which to reduce his estimated burning rate during stage 2.
85.
A separate issue arises as to whether a deduction should be made for
loss through heat radiation outwards from the smoke plume. Dr David Carruthers,
the Claimants’ modelling expert, assumed that 30% of the convective heat would
have been lost through radiation. In his evidence in chief, he explained that
it was “pretty standard in fire models to account for loss due to radiation
- it is heat lost through the buoyancy of the plume”. I appreciate that
this is Dr Carruthers’ standard practice, but his expertise in this area is
questionable. Although he has a doctorate in atmospheric physics, he is not a
fire engineer. Even so, I am prepared to accept that Dr Carruthers is qualified
to speak in broad terms about the natural propensity of a hot body to lose heat
to a cooler surface. That is basic physics.
86.
Mrs Angela Spanton of Envirobods did not make any allowance for heat
loss through radiation. Her evidence on this topic was not altogether clear,
but she appeared to be saying that the ADMS fire document takes radiative loss
into account, the radiative heat would have been retained or entrained within
the smoke, and in any event “the smoke would absorb some heat, but not 30%”.
I fail to understand her reference to absorption of heat within the smoke: the
issue is whether heat would have radiated away from the smoke plume. Mr David
Shillito, the Defendant’s chemical engineer, was qualified to comment on this
issue, but was not particularly helpful in giving me a figure upon which I
could proceed. He refused to accept that 30% might be lost through radiation;
he accepted that some might be dissipated that way, but he would not quantify
it.
87.
I am critical of the Claimants for not cross-examining Dr Mitcheson on
this issue. He was the expert best placed to deal with it, and it is clear from
paragraph 24 of his first report that he had factors such as “incident
radiant heat flux” in mind. What is entirely unclear is whether Dr
Mitcheson made any allowance for this in his computations, although I believe
not because there is no further mention of the issue. Doing the best I can in
these unsatisfactory circumstances, I am prepared to accept the probability
that some heat would have been lost through radiation, but I am completely
disinclined to embrace Dr Carruthers’ 30%, which is based on little more than
assertion. My deduction has to be somewhat intuitive and less than wholly
evidence-based, but in my judgment, applying the probabilistic standard of
proof, the correct deduction in this case is one of 10%.
88.
It follows that I am accepting Dr Mitcheson’s methodology and
computations in relation to heat release rates (see paragraph 80 above), and am
deducting 10% across the board for radiative heat loss. Overall, Dr Mitcheson
was a good witness, although the chemistry between him and Mr Redfern was at times
antagonistic. No blame for this slightly combustible situation needs to be
apportioned. It would have been preferable had Dr Mitcheson been required to
grapple during the forensic process with an expert in like discipline called by
the Claimants, but the state of affairs which obtained has absolutely nothing
to do with him.
Emission
Factors
89.
This was the most hotly contested scientific issue in this case, and by
far the most difficult. The expert antagonists were Dr David Carruthers for the
Claimants and Mr David Shillito for the Defendant. Dr Carruthers was involved
in the development of the ADMS plume model which both parties’ experts have
used to provide the court with an indication of the locations and wanderings of
the smoke plume over the relevant period. I have already alluded to the fact
that he is not an engineer, and emission factors fall within the discipline of
chemical engineering. Mr David Shillito brings precisely that expertise to the
forensic table. However, Mr Kent did not object to Dr Carruthers expressing
opinions on this issue. He was quite right not to do so. Dr Carruthers’
scientific background as a physicist, and his vast experience in the use of
emission factors in numerous situations, enables him to speak authoritatively
on the matter.
90.
Dr Mitcheson and Mrs Spanton declined to express an opinion on the issue
of emission factors. I have already observed that Dr Mitcheson was probably
qualified to do so, but the topic did not fall within the ambit of his
instructions. Mrs Spanton was less well-placed than Dr Carruthers to assist,
and from her perspective she was doubtless well aware that the Defendant’s
nominated expert in this regard was Mr Shillito. I draw no inferences adverse
to the Defendant from their silence.
91.
Throughout the trial, expert witnesses used the terms “emission factors”
and “emission rates” almost interchangeably. No confusion was created in their
minds by this approach, but I felt that this terminological schizophrenia
created the risk that the lawyers, including of course myself, were in danger
of intermingling the concepts. Regrettably, it has taken me some time to fathom
this issue.
92.
In very general terms, the endeavour is to quantify the generation rate
of any chemical or particle of interest over any given period of time. It is
this metric, the emission rate properly so called, which is factored into the
plume model. The smoke plume contained a cocktail or soup of chemicals and
particles, and their individual emission factors varied. Beyond this general
explanation, it is possible to be more precise. Strictly speaking, an emission rate
is the product of the emission factor for any given chemical or
particle and what Dr Carruthers called the “burning rate” (i.e. Dr Mitcheson’s heat
of consumption, not the same as his heat release rate) for the remaining fire
load at the material time. Confusingly, Mrs Spanton’s preferred terminology is
not “burning rate” or “heat of consumption”, but “heat output”. In ordinary
parlance, a rate is, of course, time related, whereas a factor a
fraction. On this approach, an emission factor is measured in terms of
the mass of the chemical or particle of interest per equivalent mass of the
available combustible material (usually, g/kg); the burning rate (a.k.a.
heat of consumption or heat output) is measured in MJ/kg (see paragraph 79
above); and the resultant product, the emission rate, is measured in
g/s/MW.
93.
Confusion arises because the experts have tended to use their terms
interchangeably, confident in the knowledge that each fully understands the
other, but possibly oblivious to a lawyer’s very stale basic science. For the
avoidance of all doubt, it may be helpful if I were to set out my understanding
of the position. If the emission factor is 100 g/kg, and the burning rate or
heat of consumption is 10 MJ/kg (as Dr Mitcheson says it is), 100 g/kg becomes
10 g/MJ. As a joule is a watt per second, this becomes 10 g/s/MW. As Envirobods
have explained, there are other ways in which the same result may be attained,
entailing the application of a relatively simple formula. Thus, what looks like
a rate, because it is measured over time, is described as a factor.
94.
Now that the position is fully understood, no confusion arises. However,
it is necessary to be clear as to where this leads. Whatever the terminology,
the plume modellers have used two separate variables to arrive at the
generation rate over the course of the fire of the chemicals and particles of
interest. They appear to have used an emission rate expressed in mg/s/MW
(although they have called it a factor), and they have also used an appropriate
burning rate. This is the key concept Mr Redfern wanted me to understand. It
is obvious that as the quantity of combustible material falls, so must do the
generation of the relevant chemicals and particles. According to Dr Mitcheson’s
calculations, the heat release rate falls exponentially after midday on 13th
June, and on my understanding what the plume modellers call the burning rate or
heat output is logarithmic (assuming that my recollection of basic differential
calculus has not altogether deserted me). In truth, it matters not, because the
appropriate variable is factored into the ADMS model. However, it is important
to keep separate the concepts of emission factors and burning rates, since
otherwise there might be a tendency to conclude that because the fire is dying
down the emission factors must also be falling commensurately. The emission rate
will be falling, but not necessarily the emission factors – unless,
that is, other considerations come into play which independently impact on the
latter.
95.
Armed with the foregoing scientific logic, Mr Redfern submitted that the
emission factors for this fire must remain constant over stages 2 and 3. However,
that in my view is overly simplistic an approach. Putting to one side the
reduction in the burning rate, the parties’ experts are in fact agreed that the
emission factors vary as the fire progresses. This is a consequence of variables
changing independently of the burning rate, including the chemical environment
changing as well as the degree of ventilation and efficiency of combustion. The
experts are, however, far apart on matters of degree.
96.
The smoke plume contained hundreds if not thousands of chemicals and
particles of potential interest. The expert reports range over a vast array of
chemicals and toxins, but in the events which have occurred I may short-circuit
some of the debate. The present case is concerned with chemicals which possess
irritant qualities and with micro-particles. The possible relationship between
the two will be discussed in my section on toxicology. The chemicals with
irritant properties are primarily the aldehydes, but there were others too
within the fire plume that have not been quantified in any meaningful way,
whether in terms of their emission factors, the toxicology or the plume
modelling. The parties agree that the most important of the aldehydes for
present purposes is acrolein. Apart from the irritant chemicals, the parties
have been focussing on particulate matter which is less than 10 micro-metres in
diameter (the PM10) and the further sub-set of particulate matter which
is less than 2.5 micro-metres in diameter (the PM2.5).
97.
The parties are in agreement about the emission factors for acrolein in
particular and the aldehydes in general. For the former, Mr Shillito has
undertaken a literature review and arrived at what he describes as an emission
factor of 114 mg/s/MW. For the reasons he gives in his first report, and which
I accept, this is very generous to the Claimants. Adopting the same liberal approach
yields an emission factor of 600 mg/s/MW for all the aldehydes. The experts are
also in agreement that these emission factors may be deployed over the whole of
stages 2 and 3 of the fire. For reasons which are fully explored in paragraphs
114-118 below, I disagree with their approach, but I have no evidential basis
on which to advance different values, and (in the face of expert agreement on
the issue) it would not be right for me to do so. The Claimants do far better
out of this state of affairs than does the Defendant.
98.
Where the parties part company is in relation to the PM10s
and the PM2.5s. In this respect, the PM10 emission
factors are the most important, because the factors for the smaller
micro-particles are a derivative of the larger. Here, I need to take time to
explain the basis of the differences between Dr Carruthers and Mr Shillito.
99.
Dr Carruthers has examined three sources in the literature. First, the
publication entitled US EPA Emission Factors AP42 Compilation of Pollutant
Emission Factors addresses a number of potential analogues to the present
fire, and Dr Carruthers considers that the best comparable is the wood-burning
residential fireplace. According to this source, the emission factor for PM10s
in lbs/tons is 34.6, which translates to 17.3 g/kg. Two sections of the
narrative section of this publication are relevant:
“1.9.2 Fireplace emissions, caused mainly incomplete
combustion, include particulate matter, mainly PM10s … significant
quantities of unburnt combustibles are produced because fireplaces are
inefficient combustion devices, with high uncontrolled excess air rates and
without any sort of secondary combustion. The latter is especially important in
wood burning because of its high volatile matter content, typically 80% by dry
weight.
…
Fireplace emissions are highly variable and are a function of
many wood characteristics and operating practices. In general, conditions which
promote a fast burn rate and a higher flame intensity enhance secondary
combustion and thereby lower emissions. Conversely, higher emissions will
result from a slow burn rate and a lower flame intensity. Such generalisations
apply particularly to the earlier stages of the burning cycle, when significant
quantities of combustible volatile matter are being driven out of the wood.
Later in the burning cycle, when all volatile matter has been driven out of the
wood, the charcoal that remains burns with relatively few emissions.”
100.
In his final submissions Mr Kent drew attention to a further passage in
the US EPA document relating to “wood residue in boilers”. This indicates an
emission factor equating to 3.1 g/kg. However, none of the experts was invited
to comment on this.
101.
Secondly, Dr Carruthers referred to a paper by Stec et al published in
the Fire Safety Journal [44 (2009) 62-70], Comparison of Toxic Product
Yields from Bench Scale to ISO Room. I am far from convinced that much may
be derived from this paper. In Figure 6 of the paper, the authors are
considering amongst other things the product yields (i.e. emission factors) for
soot from the burning of MDF for a steady-state tube furnace, compared with an
ISO room, as a function of the carbon dioxide/monoxide ratio. Thus, the
emission factor for a different product, namely soot, is analysed in
comparative terms in a context distant from that of the instant case. As a
separate matter, Mr Kent relied on Figure 6 in support of his argument that
emission factors decrease significantly as the fuel load is consumed. I agree
that this Figure does show that the emission factor for soot decreases
exponentially as the carbon dioxide/monoxide ratio increases, but without a
much better understanding of this paper than anyone was able to give me, I
cannot accept that it necessarily supports the point Mr Kent was seeking to
make. On the other hand, I do accept that this paper lends further support for
the proposition, if such support were needed, that increasing the ventilation
reduces the emission factors.
102.
The centrepiece of the Claimants’ case on this issue was the document
co-authored by Larson and Koenig, A Summary of the Emissions
Characterisation and Non-cancer Respiratory Effects of Wood Smoke, a
version of which was also published in the Annual Review of Public Health in
1994. Table 1 of the Summary gives the PM10 emission factors for
“conventional wood stove” and “conventional fireplace” at, respectively, 7-30
and 15-32 g/kg of wood. The narrative section of this paper reads, insofar as
is material, as follows:
“The large variability in emission rates for a given
appliance is due to a number of factors including stove design, wood moisture
content and burn rate … In conventional stoves, increasing burn rate increases
combustion temperatures and efficiencies, but in catalytic and non-catalytic
devices the higher burn rates actually decrease combustion efficiency by
decreasing the times in the secondary combustion rate …
Compared to wood stoves, we know little about fireplace
emissions. Here we distinguish fireplaces from conventional fireplace inserts.
Inserts are a home-heating device with emissions similar to conventional wood
stoves. Standard open fireplaces can be a net home cooling device because of
the large amounts of air they draw from outside during maximum burn rates. In
general, conventional fireplaces emit comparable amounts of particulate matter
and less carbon monoxide per kg wood burned compared to conventional wood
stoves. However, fireplaces usually operate at higher wood burn rates and for
shorter time periods than most wood heating devices.”
103.
On the basis of the US EPA Emission Factors, Dr Carruthers has taken in
his March 2014 report an emission factor for PM10s of 17.3 g/kg.
Looking at the Larson and Koenig paper, this falls towards the middle of the
range. For PM2.5s Dr Carruthers has used a ratio of 0.82 derived on
my understanding from the Californian Fires paper, addressed more fully below.
No issue arises as to the ratio deployed, and the resultant emission factor for
PM2.5s is 14.2 g/kg.
104.
Dr Carruthers prepared a document for the Joint Experts’ meeting on 24th
October 2014 (privilege has since been waived) which reduces these figures by
20% to reflect the moisture content in the woodchips. Envirobods did not take
issue with that approach, although I note that Mr Shillito, who was advising
them, did not make a similar deduction from his much lower figure. The point
was not explored with any of the experts: either the parties assumed that it
was not in issue, or it was overlooked. Towards the end of the trial, I indicated
to the parties that I considered that the 20% deduction was incorrect in
principle. My understanding of the literature, including the US EPA document,
was that “dry” wood did not mean wood which was 100% devoid of moisture, but
wood that was at the drier end of the spectrum. I recognise that I was running
solo with a point which had not appealed to Mr Redfern. At that stage the
parties did not comment on my rationale or conclusion, but after the close of
the proceedings and following his interpretation of an apparent concession by
Mr Redfern in post-hearing email exchanges, Mr Kent returned to it and urged me
to reconsider. His submission was that Dr Carruthers accepted the 20%
deduction, and that it was supported by the US EPA’s reference to “dry” wood in
connection with the emission factors for the residential fireplace model.
105.
I appreciate that I am responsible for setting up an issue which would
not otherwise have arisen. However, Mr Kent had every opportunity to disabuse
me of it before the trial ended. Further, I remain of the view that the 20%
deduction is incorrect in principle, and the Claimants press me to adhere to
that position. At paragraph 4.14 of his September 2014 report Mr Shillito, when
addressing CERC’s emission factors for the micro-particles, did not contend
that they should in any event suffer a deduction for moisture. On its natural
and ordinarily meaning, “dry” does not mean wood which has been notionally
drained of all moisture. In any event, the US EPA document states that the moisture
content of wood ranges from 5-70%, and that “dry” wood includes wood with
anything up to 20% moisture. I do not read paragraph 1.9.2 of the US EPA
review, with its reference to dry wood, as indicating that all moisture is
squeezed out of the computation. Finally, I am not prepared to finesse this
issue by allowing a deduction lower than 20%. It follows that, although
moisture should obviously be taken into account in relation to the heat release
rates (as it has been), it should not be in relation to emission factors.
106.
Dr Carruthers advanced reasons of his own in justification of the US EPA
residential fireplace emission factors, but before considering these it is
convenient to set out Mr Shillito’s reliance on different literature sources.
107.
In Mr Shillito’s view, the closest analogue to stage 3 of this fire is
the wood-burning biomass boiler. His reasons in support of that thesis are
summarised below, but his source is a Report to the Scottish Government dated
September 2008, AEA Energy and Environment, Measurement and Modelling of
Fine Particulate Emissions from Wood-Burning Biomass Boilers. Mr Shillito
draws attention to Table 2.5 in that report, which summarises the findings of
the Nussbaumer et al study (2008) on “typical PM emission factors” for four different
boiler types including biomass boilers. Although the report refers to 80 g/GJ, this
is equivalent to an emission factor of 0.8 g/kg. It may immediately be seen how
far apart the experts are on this issue.
108.
According to paragraph 2.1.1.4 of the report:
“Smaller biomass boilers are generally not fitted with any
pollution abatement devises as these are generally not required to meet current
CAA requirements for emissions. However, most larger new automatic boilers are
fitted with some form of flue gas cleaning device to remove particle (dust)
from the flue gas before release to the atmosphere.”
109.
Mr Redfern quite rightly drew this passage to Mr Shillito’s attention,
and the latter agreed that larger biomass boilers operating in the UK
would possess a flue gas cleaning device which would serve to reduce emission
factors. On the other hand, it is clear from the report’s analysis of the
Nussbaumer at al study that the Austrian group which performed it were looking
at a wide range of boilers, and included within scope “worse case emissions”.
When an examination is made of Table 2.6 in the Scottish report (which was not
carried out during the trial), it is clear that the average PM10 emission
factors derived from local monitoring data were markedly lower than those noted
in Nussbaumer et al. It was perhaps for this reason that Mr Shillito felt able
to state in this report that Table 2.5, on which he was relying, probably
over-stated the position.
110.
In elaboration of his position, Dr Carruthers explained that the fireplace
analogue, albeit imperfect, represents the closest fit to the circumstances of
the fire with which we are concerned. The basic principle, which is universally
accepted, is that the better the ventilation the better the efficiency of the
burn and the lower the emission factors for any chemical or particle of
interest. There are other considerations which impact on emission factors, such
as the chemical constituents of the fire load as the fire progresses, but these
may be difficult to quantify. A residential fireplace is an open, uncontrolled
fire which is reasonably well ventilated. Thus, in stage 2 of the fire this
model would in Dr Carruthers’ view (as articulated at one stage in his oral evidence)
tend to underestimate the true emission factors for the micro-particles because
it is accepted by Dr Mitcheson that the fire was under-ventilated. The
fireplace model would be more apposite for stage 3. Given that Dr Carruthers
has chosen to use one emission factor for the small particles throughout stage
2 and 3 of the fire, the Claimants submit that he has in fact under-estimated
the position.
111.
On the other hand, I agree with Mr Kent that Dr Carruthers’ final
position was that he accepted that he had used an emission factor throughout
which was based on stage 2 when there was thick smoke with poor visibility. He
said, “I think we modelled the phase 2 fire. So we were looking at when the
fire was clearly very thick with smoke”. He also accepted that his
modelling was on a worst case basis.
112.
Dr Carruthers’ basic objection to the wood-burning biomass boiler is
that it is designed to achieve an automatic, controlled process, in other words
an efficient burn, where the emission factors would inevitably be low. The
presence of thick clouds of black smoke during stage 2 is completely
inconsistent with the controlled process within Mr Shillito’s presumed
contemplation. Furthermore, a biomass boiler would have to be compliant with
the Clean Air Act 1993, where stage 2 of the fire plainly was not. Dr
Carruthers also sought to draw inferences from certain photographs relating to
how far one could see through the smoke, but this evidence was too subjective
and impressionistic for my palate.
113.
In his oral evidence Mr Shillito elaborated on why he believed that the
biomass boiler was a better analogue than the residential fireplace. In his
evidence in chief he explained that (a) the fuel was very different, and he was
looking for “an effective fuel burnout”, and (b) given the dimensions of
our fire, it was appropriate to compare it to a model which was larger than a
residential fireplace. Like Dr Carruthers, Mr Shillito in his reports had
adopted a single emission factor for both stages of the fire, although had
queried the methodological soundness of this approach. On my reading of his
written evidence to the court, Mr Shillito was adopting an emission factor
which he considered was appropriate for stage 2, and then applied the same
value to the beginning of stage 3. In his oral evidence, however, Mr Shillito
said that his approach had always been to seek to ascertain the appropriate
emission factor for stage 3a of the fire (i.e. 12th June), as he
called it, and then apply the same value to stage 2. Mr Shillito struck me as
an entirely honest witness, but I do not read his reports in that way. I
consider that he was extrapolating from stage 2 to stage 3, not the other way
round.
114.
In his oral evidence, Mr Shillito conceded that his unitary emission
factor of 0.8 g/kg was too low for the first two hours of stage 2 by a multiple
of 3 or 4, but otherwise he adhered to his figure. Mr Redfern sought to exploit
this concession by putting to Mr Shillito in cross-examination that, given that
all aldehydes and other emissions are the result of incomplete combustion,
logic would surely suggest that all Mr Shillito’s emission factors
should bear the same increment. Mr Shillito was surprised by this question, and
did not really answer it satisfactorily, but the reality is that the premise on
which the question was posed was completely incorrect (I must confess that the
enthusiasm with which I harried Mr Shillito about this was misplaced). All
emissions are the product of incomplete combustion (i.e. complete combustion of
wood would produce carbon dioxide, water and nothing else): the issue is not
the fact of emissions, but their relative quantities. Further, the
parties have proceeded on the basis of agreed emission factors for all
aldehydes and acrolein in particular – these are safely derived from the
literature, and are not related to the emission factors for the
micro-particles. In any event, multiplying the emission factors for the
irritants by even a factor of four for the first two hours of stage 2 makes no
material difference to the outcome of this case.
115.
Mr Shillito recovered much of his poise during Mr Redfern’s extended and
able cross-examination of him on the issue of emission factors for the
micro-particles. Mr Shillito rejected the fireplace analogue because in his
view it predicates flaming combustion, which this fire was not. He stated that
the key point in the instant case is that by the beginning of stage 3 the fire
load was charred woodchips in respect of which the volatiles had already been
released (during stage 2). Mr Redfern put to Mr Shillito the concept of
“re-volatilisation”, but this was simply not understood: the volatiles in Mr
Shillito’s view would burn off once and for all when initially released. As for
the biomass boiler model, Mr Shillito accepted the point about statutory
compliance, but stated that the analogue remained apposite because wood-burning
boilers use a continuous source of woodchips (which, therefore, continue to
emit volatiles and aerosols), and a larger combustion bed tends to be more
efficient.
116.
It was put to Mr Shillito that during stage 3 the fire was inefficient.
He disagreed, and the transcript of the relevant section of his cross-examination
reads as follows:
“The fire was efficient in stage 3. It had plenty of oxygen
in stage 3. My emission factors were designed for stage 3.
Q. It was reverse smoulder. That's not efficient oxygen, is
it?
A. I think you will find it was quite efficient.
Q. You can't say that stage 3 was an efficient burn, can
you?
A. It's rather like a coke brazier.
Q. The fire is burning back on itself. That's reverse smouldering,
isn't it? It's inefficient.
A. The oxidation is happening at the surface. The heat is penetrating
downwards. As the top fuel burns away, the fuel below comes alight.
Q. It's only the top –
A. If you measure the carbon monoxide from a coke brazier, you
will find there is some, but the burning combustion efficiency is quite
effective. It's like the barbecue after the main thing is alight. It's a coke
brazier.”
117.
Notwithstanding that his own expert had been content to deploy it, Mr
Redfern ambitiously sought to persuade Mr Shillito that the residential
fireplace model was inapposite in the sense that its application would tend
grossly to under-estimate the emissions from the Sonae fire. Mr
Redfern’s point was that a fireplace has flame – which burns off emissions -
whereas our fire did not. Mr Shillito did not accept that this was so:
“The fire, I think, is -- if you start at the top of the page,
that fireplaces are primarily used for aesthetic effects and secondarily as
supplemental heating. The fire is designed to be pretty, to show a nice red
flame. The red flames in themselves produce carbon black. The redness of the
flame is in fact carbon black glowing in the flame. So the fire is designed to
produce soot which burns in the flame. The volatiles, which contain the
irritant substances, will burn preferentially in the flame to the carbon. So
as I see it, a nice red flame will produce black soot, but probably low
volatile contents, and that's one part of it. The volatile material escaping
from the fire will depend obviously on the way that the fire is arranged. But
to my mind, the black soot from the open fire is contributed by the loss of
heat to the outside environment, reducing the -- this is radiation loss from the
visible fire, and effectively quenching the red flames. This is the soot in
the basic wood fire chimney.”
118.
My approach to this important issue is as follows. Unlike the experts, I
am not prepared to adopt a unitary emission factor for the whole of stages 2
and 3. In my judgment, the emission factors changed significantly over the
course of the fire, and to take either a rough-and-ready or an average value
would not achieve justice. I will take one emission factor for stage 2 and
another for stage 3. Each will be at or near the top of the range in both
instances.
119.
With respect to Mr Shillito, who I felt was a very fair and helpful
witness, I cannot accept that the present case receives its best analogue from
the wood-burning biomass boiler. This is a controlled, automated device designed
to minimise emission factors, and the instant case is concerned with an
admittedly very large uncontrolled fire.
120.
In the absence of experimental or empirical data collected at the fire
scene, I consider that the residential fireplace model is the best that may be
achieved in these circumstances. As the authors of the US EPA report make
clear, a residential fireplace is an inefficient device and there will be
significant variances between different homes, configurations and wood piles.
The report also explains that emission factors will depend on - amongst other
matters - burn rate, the degree of ventilation and the degree of flame
intensity. Here, during stage 2 we have a fast burn rate, an under-ventilated
fire (exactly how under-ventilated is not readily quantifiable) and low flame
intensity. Two out of these three matters incline towards higher emission
factors.
121.
Dr Carruthers’ value is derived from the US EPA report and he does not
appear to have examined the Larson and Koenig report and paper which give
higher figures for residential fireplaces. I do not accept Mr Kent’s point that the Larson and Koenig data have in some way been superseded by the US
EPA. The issue arises as to whether it is open to me to taken on board these
data in all the circumstances of this case. Mr Kent objects to such a course,
essentially on two grounds. First, he submits that there is no evidential basis
for a higher value. Secondly, he submits that the Claimants should be bound by
the figure Dr Carruthers has advanced on their behalf, and that it would be
wrong and unjust to countenance a higher value at this late stage.
122.
As for the first objection, I consider that there is an evidential basis
for a higher value, namely the Larson and Koenig report. Mr Shillito was taken
to it, and I cannot accept his reasons for rejecting the simile (see paragraphs
115-117 above) – at least as regards stage 2 of the fire. I am entitled to draw
inferences from all the available evidence, including Mr Shillito’s answers. Although
common sense can be a dangerous guide in relation to scientific matters, I have
reached the clear conclusion that for stage 2 the instant case must fall
towards the upper end of the fireplace model, and of the spread of values
proffered by Larson and Koenig. Stage 2 of the fire was characterised by
voluminous quantities of dense black smoke engendered in a significantly
under-ventilated environment. During its early stages, the “letterbox” slots
were blocked. Moreover, Mr Shillito has not included the hydraulic oil, the foam
and the conveyor belting in his emission factors for the micro-particles, nor
has CERC modelled these (I understand that CERC has modelled the 0.8%
contamination, using the parallel of household waste). Although these have not
been quantified, the presence of these items (which on my findings were wholly
consumed within stage 2) gives me further confidence in moving towards the
upper end of the bracket.
123.
However, it would not be right to go beyond the figure of 32 g/kg as the
emission factor for the micro-particles, as at one stage Mr Redfern temptingly
submitted I should. That would be a leap in the dark, without an evidential
platform, and unfair to the Defendant. More precisely, whatever success he
achieved in cross-examining Mr Shillito does not underpin, or warrant, so
extravagant an approach.
124.
As for Mr Kent’s second submission that the Claimant should be bound by
Dr Carruthers’ value, I see the force of it but in the exceptional
circumstances of the present case I am prepared to allow the Claimants an element
of latitude. Given Mr Redfern’s forensic success with Mr Shillito, it would not
be in the interests of justice or the overriding objective to hold the
Claimants to the figure Dr Carruthers has put forward, no doubt in good faith
but absent consideration of all available evidence. The Defendant is not
prejudiced by this course. Furthermore, Mr Shillito was aware of Larson and
Koenig because he genuflected towards them in his reports (although whether he
was aware of the report, as opposed to the published paper, is less clear).
125.
Taking all this evidence on board, I am required to alight on the
correct value for the micro-particles during stage 2 of the fire. Doing the
best I can on all the available evidence, my emission factor for the PM10 fraction
is 27.5 g/kg. I reduce that by 0.82 for the PM2.5s, i.e. to 22.6
g/kg. In reaching these figures, I should make clear that I have erred on the
side of a liberal approach: in other words, these are generous to the
Claimants, and are tethered to the start of stage 2, not the end.
126.
The transition from stage 2 to stage 3 was not instantaneous, but in my
judgment by a fairly early juncture within the longitudinal course of stage 3
the emission factors for the micro-particles had fallen significantly. As the
authors of the US EPA study explain, later on in the burning cycle the
volatiles burn out, charcoal remains, and the emission factors decline. This
tends to chime with aspects of Mr Shillito’s evidence. On the other hand, Dr
Mitcheson proceeds on the basis that at the commencement of stage 3 there were
still approximately 850 Te of woodchips left to burn. Although many of the
surfaces of the individual woodchips were charred and most were “cooked”, I do no
accept that there was charring tout court. Accordingly, further
volatilisation was a probable phenomenon. Yet, it is indisputable that the
predominant characteristic of stage 3 was smoke which was between whitish and
light grey in colour. Furthermore, I accept Mr Shillito’s evidence that the
fire during stage 3 had become more efficient in consequence of the enhanced
ventilation - both through the slots and from above.
127.
In my judgment, the emission factors for the micro-particles fell
significantly during the course of stage 3. By how much is unclear. I do not propose
to reflect this consideration in my figure, either by selecting more than one
set of emission factors over the 27 days of stage 3, or by taking an average.
Like Mr Shillito, I believe that the proper focus is on Sunday 12th
June, when the wind was from the east. In reality, the graph of emission
factors plotted against time would show a marked decline from mid-afternoon on
Saturday 11th June (I take that point in time because the hydraulic
oil had burnt out by then) and about midday on 13th June. Thereafter,
the decline continued, but was very much slower. Fortunately for the
calculations, Saturday 11th June is far less important for virtually
everyone than the Sunday, because the wind was blowing from the west. Focusing
therefore as I am on Sunday 12th June, my conclusion is that the
emission factor for the PM10 fraction is 12.5 g/kg. Again, I reduce
that by 0.82 for the PM2.5s, i.e. to 10.25 g/kg. These factors apply
to the whole of stage 3. As before, this represents a liberal approach, even
though it is slightly below the Larson and Koenig bracket for the fireplace
model. In this regard I have taken account of Mr Shillito’s evidence regarding
the efficiency of the stage 3 fire.
Ash and Dust
Deposition
128.
In his report dated 25th March 2015, Dr Mitcheson addressed
the issue of ash and dust generation. In his opinion:
“If ash and dust were produced and transported from the
fireground, the most likely time would have been during the intense combustion
that occurred during stage 2.”
In other words, Dr Mitcheson
rejects out of hand the possibility that ash and dust might have been generated
during stage 3, and I understand his reasons for doing so.
129.
As for stage 2, Dr Mitcheson has performed some straightforward
calculations on the basis of a fairly limited literature base, and has
concluded:
“The larger volume of fly ash estimated above released during
stage 2 of the fire would therefore have formed an average covering over this
area of less than about 0.35 microns, i.e. about one third of one thousandth of
one millimetre.”
130.
Dr Mitcheson was not cross-examined on this report. The plume modellers
have not modelled dust and ash on the basis of any reliable data regarding the
sequence and history of the fire (CERC’s previous modelling has been
superseded), and in scientific terms the issue may be taken no further.
131.
However, there is a mass of evidence from the Test Claimants on this
issue which needs to be considered. Given that I am not considering claims in
nuisance which are not personal injury claims, this evidence is not directly
germane to my fact-finding exercise. However, it does bear on the issue of
credibility, and I will be returning to it later.
TOXICOLOGY
132.
Even as regards relatively low exposures of short duration, the general
principle of toxicology applies: “the dose determines the poison”. However, at
these low exposures in particular, considerable allowance must be made for
human susceptibility and variability.
133.
In this domain the forensic tournament was between Professor Alastair
Hay for the Claimants and Mr David Shillito for the Defendant. It is
immediately apparent that in one sense this was an unequal fight: Professor
Hay’s enormous lance pitted against Mr Shillito’s smaller weapon. Professor Hay
is Professor of Environmental Toxicology at the University of Leeds,
and an international authority in his subject. He is extremely experienced and
has sat on numerous governmental committees over the years. Mr Shillito is not
a toxicologist at all; he is a chemical engineer. However, his experience in
environmental issues, and his sense of fairness, cannot be doubted.
134.
Despite this obvious mismatch, I had the feeling that Professor Hay was
somewhat hampered by the instructions he had been given. His three reports are
similar to one another and speak at quite a high level of generality and
theory. They are not particularly quantitative. It is almost as if he was being
discouraged from pinning his precise colours to the mast until as late as
possible. Furthermore, I cannot place any weight on the following assertion in
one passage in his March 2014 report, based as it is on a misapprehension as to
the extent of this fire, and on modelling evidence which has been superseded:
“On the basis of what is known about the Sonae fire, the
photographic evidence of smoke from the fire, modelling of the fallout of
pollutants generated by the fire and the topography of the area, it is more
probable than not that many thousands of people would have been affected by the
pollutant emissions.”
135.
Fortunately, Professor Hay has been much more forthcoming in the witness
box and in the second Joint Statement of these experts. I found him to be an
extremely commanding expert witness. On a few occasions, he became slightly
argumentative, donning the mantle of the advocate, but I understood his passion
for this subject and the strength of his opinions.
136.
The areas of controversy as between these experts have been
significantly whittled down in the later stages of the forensic process.
137.
Aside from the micro-particles which I will address below, and where
there remains a dispute, the experts are in agreement that the focus must be on
the irritant chemicals rather than on the asphyxiates. The latter will not have
left the fireground in significant quantities. As regards the irritants, the
focus has primarily been on acrolein, but consideration has been given also to
the total aldehydes within the metaphorical soup of the fire plume. During the
course of Professor Hay’s evidence in chief, Mr Redfern invited his witness to
perform from the witness box a calculation designed to estimate the additive
effect of the agglomeration all the probable irritant chemicals in this mix, in
other words to look further than the limited number of compounds previously
considered. This calculation had not been attempted before, and I did not give
the Claimants permission to adduce evidence of this nature in this unheralded
fashion. I gave a short judgment at the time, and a transcript (for the
parties’ benefit only) appears on Livenote.
138.
Professor Hay’s evidence was that irritancy is an immediate, not a
delayed, effect. Once the chemical of interest reaches a certain dose, the body
will respond adversely and defensively. Professor Hay added that the effect is
usually transient, depending of course on dose and duration of exposure. The
position is clearly explained in Dr J.C. Wakefield’s paper for the Health
Protection Agency entitled A Toxicological Review of Products and Combustion
(2010). At paragraph 3.2:
“The injury following exposure to an irritant gas depends
upon the chemical involved, its concentration, the exposure duration and its
solubility. However, the initial effect of exposure to these irritant gases is
likely to be sensory irritation. Irritation of the eyes will cause pain and
stinging of the eyes, initiation of a blinking reflex and lacrimation … An
additional characteristic sign of exposure to irritant gases is a burning
sensation of the mucous membranes of the upper respiratory tract, including the
nose, mouth and throat. Pulmonary irritation will commonly occur following
sensory irritation, due to inhalation of the irritant gas into the lungs. The
irritation of the lungs gives rise to bronchoconstriction, coughing and
breathing difficulties.”
139.
Professor Hay stated in cross-examination that there is nothing in the
literature linking dermatological problems to smoke exposure.
140.
As for the level at which a human being may react adversely to an
irritant, it seems to me that I should be primarily focusing not on workplace
or AEGLs, but on short-term levels of a different nature. Here, the HPA review
paper is of assistance. It recognises that acrolein is the most potent of the
irritants, and various thresholds are given at page 15 of the document. In this
regard it is necessary for our purposes to “translate” parts per million into
micro-grams per cubic metre, and doing the best I can with the arithmetic one
arrives at the following:
(i)
eye irritation resulting from exposure to acrolein has been observed at
concentrations as low as c.146 μg/m³ (my emphasis), nasal
irritation at c.356 μg/m³, and respiratory symptoms at c.572 μg/m³ (I
note that Mr Kent’s arithmetic is slightly different). Like Mr Kent,
I assume that these values must be for healthy subjects. There is no evidence
as to what they might be for vulnerable individuals, and I cannot accept Mr Kent’s thesis that healthy people will be more sensitive to an irritant.
(ii)
concentrations of acrolein in the region of 1,100 μg/m³ to 11,000
μg/m³ have been shown to cause the onset of lacrimation and eye irritation
in human beings within a 10-minute exposure period.
(iii)
acrolein at 2,640 μg/m³ has been reported to cause lacrimation in
human beings within 5 seconds of exposure.
141.
On my understanding, these data are agreed between the experts, but they
need to be interpreted. Item (i) above is addressing the absolute minimum levels
at which human beings might begin to experience symptoms. Most healthy persons
will not experience symptoms at such levels or anything like them (assuming
these values are correct), but the higher the dose the more individuals will
begin to suffer. Further, the paper does not throw any light on duration of
exposure (and note item (iii)), although the experts appear to have interpreted
it as a trigger value regardless of length of exposure. Taking a threshold of
146 μg/m³ for acrolein in the context of its potential to cause eye
symptoms is extremely favourable to the Claimants. The plume modellers have
used this value, at my request, for the purposes of illustration. I should emphasise,
if further emphasis were required, that exceeding it does not mean that personal
injury was caused or even likely caused.
142.
For completeness, I should add that from page 16 of the HPA document it
may be gathered that the 8-hour threshold value for acrolein is 237.5
μg/m³, being a weighted average over that period, and the 15-minute value
is 712 μg/m³. I have already said that these are not my primary focus, but
no Test Claimant comes anywhere close to these modelled levels of exposure.
143.
In his plume modelling Dr Carruthers has used an odour threshold for
acrolein of 0.38 μg/m³. Mr Shillito’s explanation for this figure is that
it represents the threshold at which 50% of the population will recognise the smell
(but would not be able to name it as acrolein). On my understanding of his
evidence, Professor Hay felt that this was far too low - he suggested something
in the region of 460 μg/m³ - but this may have been a complaint threshold
rather than an odour recognition threshold. For present purposes I consider
that it is helpful to proceed on the basis of the 0.38 μg/m³ value, not in
any way as a health threshold (pace Dr Carruthers’ view that it is a “good
surrogate as a sort of envelope of the fire impact”), but as indicative of
being the sort of level at which many people would have been able to smell the
smoke plume.
144.
Aside from acrolein, Mr Shillito has also advised the court as to an
appropriate health threshold or trigger value for “total aldehydes”, and has
alighted on a value of 500 μg/m³. As I have already said, Professor Hay
did not perform a similar exercise for the purposes of his reports, but when I
asked him at the very end of his evidence about Mr Shillito’s figure, he told
me that his recent calculations were not “far off”. Much later, I had a
colloquy with Mr Kent about the significance of this value. I had found it
difficult to understand why the threshold for “all aldehydes” was higher than
that for acrolein. The supposition must be that there is some sort of dilution
effect, which I can understand in an experimental setting where relative
concentrations may be in play; but in the context of a given smoke plume with a
number of chemicals of the aldehyde family, one would have thought that the act
of placing more of these under the microscope would serve to increase, rather
than reduce, the irritancy potential. Mr Kent did not really advance a
persuasive rebuttal of this, but overall it matters not. There is no evidential
basis, or evidence-based methodology, which might enable me to reduce the
acrolein threshold below 146, 356 or 572 μg/m³ to reflect the
aggregation of aldehydes.
145.
The HPA report also contains helpful narrative exposition under the
rubric “smoke behaviour” (page 35):
“The exposure to individuals to the fire effluent in the zone
outside the immediate fire zone (zone 2) would be expected to be of most
concern to public health … The major immediate hazard to public health in zone
2 is therefore, expected to be exposure to irritants and particulates generated
in the effluent. Low concentrations of the irritant gases may cause significant
irritation of the eyes and respiratory tract, which may affect a large number
of people who are not directly exposed to the fire plume. The adverse effects
resulting from exposure to these irritants are likely to be completely resolved
following removal from the exposure, with no long term sequelae. However, the
generation of more complex products such as PAHs, dioxins, dibenzofurans and
particulate matter are of concern, but are likely to present a significantly
greater hazard from long term or repeated exposure than following a large
single acute exposure.”
146.
Where these experts disagree is in relation to the micro-particles.
Hereabouts, the disagreement resides on at least two levels.
147.
The first issue concerns the nature and mechanism of any irritant effect
of the micro-particles. On my understanding of his evidence, Mr Shillito does
not consider that the PM10s and the PM2.5s have any
independent or free-standing irritant effect. Professor Hay, on the other hand,
believes that the role of these micro-particles is primarily, albeit not
solely, as “porters” for irritant chemicals which become adsorbed onto them.
Put in these terms, the divergence of view between the experts is minor. In any
event, in the circumstances of the present case I do not consider that this
slight parting of the ways really matters, save perhaps in one respect. Whether
or not the PM10s and the PM2.5s could in theory have any
independent irritant effect, it must be obvious that virtually all of them
operating in this smoke plume were vigorous and prolific carriers of no doubt
numerous chemicals which were dispersed into the environs. I am prepared to
accept that particularly the smaller fraction could have had a free-standing
irritant effect, but it does not matter. The only point one should not lose
sight of is that the quantities of acrolein, for example, have been separately
modelled. This modelling includes all the acrolein, whether travelling on its
own, or aided by a micro-particle. The possibility of double counting must be
resisted.
148.
Mr Kent advanced the more robust submission that I should be ignoring
the micro-particles altogether. Given that they have little or no independent
irritant effect, and given also that the acrolein and aldehydes have been
separately modelled, there is no need for them as a surrogate; we have the real
thing. Mr Kent relied on logic and on Dr Hind (his respiratory expert) in
support of this submission.
149.
I cannot accept Mr Kent’s point. Scrutinising the micro-particles is
merely a different way of trying to examine this vexed issue. It “puts a
handle” on it, as both Mr Shillito and Professor Hay have agreed in their
joint report. Mr Shillito also agreed that micro-particles could be used as a
surrogate provided that due caution was accorded. For me, the issue is not
relevance, but weight. The fact that there is direct modelling evidence of the
aldehydes does not mean that it is wrong in principle to consider evidence of
an indirect nature, particularly given that (a) the micro-particles will be
porters for more than just the aldehydes, (b) the modelling evidence is not
especially robust, and the more of it the better, and (c) there is a mass of
academic literature which chooses to examine the micro-particles. Professor Hay
suggested in addition that scrutinising the micro-particles betokens a
conservative approach in any event because there must be numerous irritant
chemicals travelling independently of them in the plume, and so modelling the
micro-particles may underestimate rather that overestimate the global value of
the irritants. However, in my judgment this is somewhat speculative, given that
(a) many micro-particles may be free of irritant chemicals, and (b) no
scientific paper has on my understanding sought to ascertain the likely ratio
of micro-particles to chemicals of toxicological interest (pace the
answer Dr Hind gave to my question). Without this data, one cannot really say
how good or accurate a surrogate the micro-particles truly are.
150.
Professor Hay’s advice to me was to consider both the PM10s
and the PM2.5s. Although CERC’s recent plume modelling has not made
much of the PM10s, and the histograms have ignored them, I see no
reason for excluding them from account. The Defendant is not remotely prejudiced
because Mr Shillito has contributed fully to this discourse.
151.
As with the irritant chemicals, the issue arises as to the appropriate
threshold levels to take. The experts are agreed that the most authoritative
domestic source is the report by the Committee on the Medical Effects of Air
Pollutants (“COMEAP”), Review of the UK Air Quality Index. Although this
report is concerned not with the effects of smoke but with ambient air quality
in general, it provides considerable assistance with the issues I have to
resolve. The authors observe that at low concentrations of particles the
thresholds have an element of arbitrariness about them, and that it remains
uncertain whether any “safe” level exists. This is a matter which Mr Redfern
explored with Professor Hay in evidence. However, the authors also state:
“While we recognise the possibility that there is no
threshold of the health effects of pollutants, nonetheless we consider that AQI
can be developed that provides useful information on the possible effects on
health at different pollutant levels in the short-term, and identifies
individuals likely to be most susceptible.
…
The health response to increases in outdoor air pollution
varies between individuals and sub-groups of the population … Individual susceptibility
may affect the level at which health effects are noticed and the rate of
increase in symptoms as air concentrations increase.”
152.
In any event, (a) the burden of proof is on the Claimants, not on the
Defendant, and the best that Mr Redfern can do is persuade me to alight on appropriate
threshold levels in view of all the expert and other evidence in this case; and
(b) I cannot agree that any exposure is intrinsically unsafe. In answer
to my question, Professor Hay accepted that “you could come up with a value
… that the majority of people would not be affected at low levels”. Overall,
Mr Redfern’s submission amounts (in loose adaptation of Chaucer) to an impermissible
attempt to make a virtue out of uncertainty.
153.
The COMEAP report sets out two different sorts of threshold level. More
valuable for present purposes are the trigger thresholds based on two
consecutive hourly mean concentrations, subject to the second hourly mean
concentration being greater than the first. Although these are principally
warning levels, Professor Hay’s advice to me, which I accept, is that they
represent the sort of levels at which irritant effects might begin to be
experienced, adopting I have to say a highly precautionary approach. I do not,
however, accept Professor Hay’s point that only one hour’s exposure might be
sufficient. I do not consider that COMEAP may properly be rewritten in this
way, and it is also noteworthy that Professor Hay’s point was specifically
based on the premise that “the particulates are only one small fraction of
the material that will be arriving at somebody’s respiratory tract”. On the
basis that the aldehydes represent the majority of this material, they have of
course been separately modelled. At Table 3-2 of the COMEAP report (page 17 on
the internal numbering), various suggested thresholds are advanced for the
micro-particles, related to three bands, “moderate”, “high or above” and “very
high or above”. Professor Hay did not say which of these bands I should select
for present purposes, although he did in relation to the 24-hour mean
thresholds. Doing the best I can on the available evidence, I take the “high”
value for both PM10s and PM2.5s, namely 107 μg/m³
and 74 μg/m³ (as it happens, CERC’s recent modelling adopts these values).
These thresholds do not appear to discriminate between non-vulnerable and
vulnerable individuals, but the precautionary principle would suggest that they
are designed for the vulnerable.
154.
The second series of threshold levels are the 24-hour mean levels for
both micro-particles of interest, again set out in various bands. The experts
were not agreed as to which bands were appropriate, but I unhesitatingly prefer
Professor Hay’s evidence to Mr Shillito’s. Professor Hay advised me to select
the following thresholds from page 33 of the COMEAP report:
·
PM10s: 51 μg/m³ for vulnerable persons, 76
μg/m³ for the non-vulnerable.
·
PM2.5s: 36 μg/m³ for vulnerable persons, 55
μg/m³ for the non-vulnerable.
As before, this betokens a liberal
approach, namely one favourable to the Claimants.
155.
The COMEAP review also contains the following illuminating expository
passages:
“Short-term effects of air pollution on health
Air pollution has a range of effects on health. However, air
pollution in the UK does not rise to levels at which people need to make major
changes to their habits to avoid exposure; nobody need fear going outdoors.
Adults and children with lung or heart conditions. It
is well known that, when levels of air pollutants rise, adults suffering from heart
conditions, and adults and children with lung conditions, are at increased risk
of becoming ill and needing treatment. Only a minority of those who suffer from
these conditions are likely to be affected and it is not possible to predict in
advance who will be affected …
Older people are more likely to suffer from
heart and lung conditions than young people and so it makes good sense for them
to be aware of current air pollution concerns.
General Population At very high levels of air
pollution, some people may experience a sore or dry throat, sore eyes or, in
some cases, a tickly cough – even healthy individuals … [page 90]
…
There has been very little work conducted on timescales of
less than 24 hours and most knowledge of the acute effects upon health is based
on day-to-day changes in air pollutant concentrations.
The acute effects of particle exposure include increases in
hospital admissions and premature death of the old and sick due to diseases of
the respiratory and cardiovascular systems. The evidence is that both PM2.5s
and PM10s cause additional hospital admissions and deaths on high
pollution days. There are also less severe effects of short-term particle
exposure during pollution episodes, such as worsening of asthma symptoms and
even a general feeling of being unwell leading to a lower level of activity … [page
114]”
156.
The final point which arises in the context of the COMEAP review is the
salience of ambient background levels to the health threshold levels I have
specified. This is a point which meshes with the plume modelling evidence, and
may be expressed in these terms. If, for example, the ambient background level
(i.e. the level untrammelled by the smoke plume) is X μg/m³ of PM10s
for any given period and location, and the modelled concentration of PM10s
is Y μg/m³ (ignoring the background level) for the same period and
location, which value should be calibrated against the relevant health
threshold level for these micro-particles? In my judgment, the answer is X + Y,
applying the straightforward tortious principle of material contribution to the
damage. There are average hourly background data from the Briery Hey monitoring
station, some 1,250 m away from the Sonae plant. I assume for present purposes
that the background levels do not vary much over the whole area under
consideration, although they may be higher nearer the M57. Accordingly, these
data will be used in conjunction with the 24-hourly mean concentrations of PM10s
(see paragraph 152 above) as evaluated for a limited number of Test Claimants
(see paragraph 171 below).
157.
Professor Hay drew my attention to an important paper authored by Kunzli
et al, published in the American Journal of Critical Care Medicine in 2006, Health
Effects of the 2003 California Wildfires on Children. The focus of this
study was a vast, catastrophic series of forest fires in the State of California, visible from space. Local air quality monitors recorded hourly particulate
matter concentrations approaching 1,000 μg/m³, being 10-20 times the
typically observed ambient levels. The researchers collected data from
questionnaires sent out by email within about one month and eight months of the
fire (i.e. far sooner after the fire than the questionnaires in the present
case, and unrelated to any medico-legal context). The children suffered a range
of symptoms not at all dissimilar from those allegedly sustained in the instant
case. What is of great interest, though, is the recorded 5-day mean PM10 exposures
for children in the various locations identified in Table 2 of the paper. From
this table it may be seen that for children with exposures in the range of
30-52 μg/m³, there were precious few complaints of symptoms. However, as
will become apparent at a later stage in this judgment, the Californian cohort
suffered far higher mean levels of exposure to PM10s over a 5 day
period than did their analogues, including adults, in the present fire. Symptoms
were only experienced in significant numbers when the 5-day mean PM10 exposure
level was in the 100+ μg/m³ range. To my mind, this paper significantly avails
the Defendant and not the Claimants.
158.
The final point which falls to be addressed on Professor Hay’s evidence
is the approach to be taken to what Mr Redfern described as “sub-threshold”
levels of exposure. Perhaps anticipating that very few of his clients could
demonstrate on the science that they suffered an “above-threshold” exposure, Mr
Redfern was astute to draw out of Professor Hay evidence which might prove the
Claimants’ case on the balance of probabilities. Whereas it is quite true that
many of the Claimants were exposed on the plume modelling evidence to the odour
of acrolein, that is far from demonstrating that any of them suffered
actionable personal injury. Indeed, if anything it is a point which tells
against the Claimants owing to the impact of human suggestibility. If Claimant
X smelt absolutely nothing, then s/he would probably have to be dishonest to
bring a claim. No one is suggesting that the smoke plume contained odourless or
occult properties akin to carbon monoxide. If the Claimants smelt something,
they might believe that they were exposed to a chemical which might have
injured them in some way. I will be reverting to this point subsequently.
159.
A “sub-threshold” exposure leads a Claimant nowhere unless either the
science is wrong in some way, or the adverse health effects are additive or
cumulative. I did not permit Professor Hay to perform the additions he
obviously wished to, but I doubt whether my ruling truly impeded the Claimants
(and, if it did, I am not reversing it). As I have pointed out, Professor Hay
and Mr Shillito do not appear to be far apart in relation to the total
aldehydes. I asked Mr Shillito whether he would be prepared to add a figure or
percentage to his 500 μg/m³ threshold, in order to reflect the potential
impact of other irritant chemicals in the mix. He suggested a figure of 5%. In
the context of this case, that figure is de minimis and I ignore it. It
falls within the general margin for error in the toxicological and plume
modelling evidence. I have no other evidence before me on which to select any
different figure. As for the possible cumulative effects, these are already
addressed within the 24-hour mean thresholds. There is no proper basis on the
available evidence for aggregating a series of below-threshold 24-hour means in
order somehow to attain an above-threshold value.
160.
Professor Hay was not asked to comment on a paper authored by Larrieu et
al, Are the Short-Term Effects of Air Pollution Restricted to
Cardiorespiratory Diseases?, published in the American Journal of
Epidemiology in 2009. There, the authors examined over a six year period the
possible effects of 10 μg/m³ increases in the ambient PM10 levels
in relation to complaints of upper and lower respiratory tract diseases,
headache and asthenia, skin rashes and conjunctivitis. Strictly speaking,
therefore this study was not about the effects of smoke, but one might have
thought that these would be a fortiori. The study found that there were
relatively modest increases in complaints to GPs, ranging from 1.5% (for the
respiratory tract) to 3.5% (for skin rashes, including dermatitis). However, it
should be noted that the association for skin rashes was said to be “close to
statistical significance” and not above it. Interestingly, Dr Larrieu’s group
pointed out that asthma was not associated with any of the indicators
considered.
161.
In my judgment, it would not be right to put much weight on this single
study. The authors rightly observe that it is a unicentre study with a
population which might have changed during the study period. I accept the evidence
of Dr Iain Foulds that the results, even if valid, show only a slightly
enhanced attendance rate at GP practices, that we have no evidence as to the
severity, as opposed to the mere fact of the complaints, no indication of the
extent to which those complaints were objectively validated, and no replication
of these findings elsewhere.
162.
In his closing submissions Mr Redfern, armed with this study and the
separate WHO Guidelines, urged me to instruct further plume modelling based on
a 10 μg/m³ increase in PM10 levels. I have declined this
request. The WHO Guidelines, based on PM10 levels as low as 3-5 μg/m³,
are concerned only with long-term health effects. In my judgment, evidence
that increases as low as 10 μg/m³ might have significantly affected even
some of the Claimants is extremely tenuous and speculative, and I prefer to
proceed on the basis of the COMEAP data, setting out indicative health
thresholds which are already favourable to them.
THE
METEOROLOGICAL EVIDENCE
163.
Fortunately, the meteorological evidence in this case is now agreed, and
it is unnecessary for me to do more than quote from paragraph 18 of the Joint
Statement of Mr Norman Lynagh and Dr Richard Wild:
“On the basis of the ‘best estimate’ winds the following are
dates and approximate times on which the wind would have been blowing from the
Sonae factory towards at least part of the residential area or very close to
it:
9th June: 22:45 – midnight
10th June: 00:00 – 08:30
12th June: 04:00 – midnight
13th June: 03:00 – 05:00
14th June: 06:45 – 09:15 and 14:30 – 20:30
15th June: 01:00 – 13:30
16th June: 02:00 – 05:15
17th June: most of the day
18th June: 00:00 – 01:15
20th June: 05:45 – 07:30
21st June: 00:00 – 01:45
22nd June: 00:00 – 06:00
24th June: 19:30 – midnight
25th June: 00:00 – 05:30
26th June: 01:00 – midnight
27th June: 00:00 – 11:00
These are similar to the findings in our reports.
…
There were 6 days on which winds did not blow from the Sonae
factory towards any residential area at any time. These were 11th,
19th, 23rd, 28th, 29th and 30th.
There was only one day, the 12th, during which
winds of any strength were blowing directly from the Sonae factory towards
residential areas for an extended period of time.”
164.
The meteorological experts do not refer to July data, but the plume modellers
have taken these into account. Plainly, the period of greatest interest is 10th
– 13th June, when the emissions were at their highest levels. For
stage 2 of the fire, the wind was blowing from the east, towards Kirkby, only
for four hours (up to 08:30). For the first part of stage 3, the wind was
blowing in that direction for 20 hours on 12th June and for 2 hours
on 13th June. Given the wind direction, 17th June is also
a date of some importance.
THE PLUME
MODELLING
165.
Nothing now separates the plume modelling experts in relation to the
area of expertise with which they are strictly concerned. What previously
divided them were the data or inputs apt to be fed into the same version of the
ADMS computer model that each was using. Given that I have taken control of
these variables, the computer programme must yield the same results whoever
operates the programme.
166.
I fully appreciate and understand that plume modelling is not an exact
science. There is an element of inherent uncertainty inasmuch as the programme
has its limitations; it cannot replicate the fabulous complexity of the real
world. However, the degree of imprecision must not be over-stated, and I do not
accept Mr Redfern’s reference to “an educated approximation”. Nor must it be
assumed that the plume modelling underestimates indicative exposures. It is
just as likely that it overestimates them.
167.
I have already discussed aspects of the evidence of Dr David Carruthers
in relation to emission factors and the overall methodology of plume modelling.
In my view, he was a compelling and beguiling expert who had the knack of
explaining quite complex concepts clearly, elegantly and with appropriate
enthusiasm. I was not so appreciative of Mrs Angela Spanton, who gave the
impression of lacking a degree of confidence and authority. I fully recognise
and understand that it was always the Defendant’s intention to call Dr Hall to
speak to the reports of Envirobods, but unfortunately he died in February 2015.
However, I do not accept the point that Mr Redfern made in cross-examination
that Mrs Spanton must be incorrect in her assertion, based on extant modelling,
that only 30% or thereabouts of all 16,000 plus Claimants were meaningfully exposed
to the smoke plume at all. Looking at the location of the majority of the Claimants
in relation to the A580 East Lancs road and the M57, it does appear that about
70% of the total cohort, some of whom were represented within the constituency
of Test Claimants, were exposed only to minimal levels. Surpassing the acrolein
odour recognition threshold for short periods comes nowhere close to being able
to prove an adverse health impact. Dr Carruthers accepted in cross-examination
that his modelling showed the same general picture.
168.
Despite his compelling qualities as an expert, and above all his
presentational abilities, Dr Carruthers was in my judgment significantly
hampered, if not misled, by the information he was given by the Claimants’
solicitors. Notwithstanding what is said in his first report, this was by no
stretch of the imagination a fire which blazed for 16 days. Like Professor Hay,
he was “drip-fed” information over the course of his litigation, much of it
being inaccurate, unreliable or unsubstantiated. I should make clear that in no
respect does the fault lie with Dr Carruthers. The internal assumption may have
been that this case would settle, but there are obvious risks in not briefing
experts properly.
169.
As regards the Claimants’ plume modelling evidence, the foregoing point
may be illustrated in this way. CERC’s first attempt at modelling was on the
basis of nine separate factual scenarios, most of which were unsustainable (I
accept that it was at least arguable that there were more than 1,550 Te of
woodchips in the bunkers). That attempt was also predicated on a fire
history/timeline which was unsupported by any expert evidence, and
unsustainable in the face of the photographs. Once the Defendant’s expert
evidence was disclosed, what the Claimants needed to do was to regroup and
instruct CERC to remodel indicative exposures on the basis of Dr Mitcheson’s
report and/or a total mass of 3,000 Te in the six bunkers (if the latter course
were adopted, permission would have been needed to rely out of time on the
evidence of a fire engineer to combat Dr Mitcheson). Moreover, the remodelling
should have been done both generically and in relation to each Test Claimant.
Although CERC carried out this exercise on an informal basis (based as it
happens on Dr Mitcheson’s data), and various data and histograms were disclosed
during the course of without prejudice meetings with the Defendant’s experts, these
were not placed before the court on any proper basis until after the trial
started. Fortunately for the Claimants, Mr Kent had the good grace and judgment
not to object. That said, even if he had done I would have allowed this
evidence in, notwithstanding its tardiness.
170.
What is now available from the Claimants’ side is the following:
·
tables (showing the original 40 Test Claimants) examining the
emission rates for PM2.5s and PM10s using the residential
fireplace model for emission factors and the COMEAP trigger values of 74 and
107 μg/m³. Unhelpfully, the tables contain two sets of meteorological data,
but helpfully they depict the number of hours of exceedances.
·
tables (as before) examining the “total aldehydes” on the basis
of the two emission rates (described by him as factors) originally proposed by
Mr Shillito (although he is now content to proceed on the basis of the higher
rates of 600 mg/s/MW) and a health threshold of 500 μg/m³.
·
a similar table for acrolein based on Mr Shillito’s emission rate
of 114 mg/s/MW and the odour recognition threshold of 0.38 μg/m³.
·
three separate tables focusing on the three highest exposed
Claimants: these examine predicted hourly concentrations of PM10s on
alternative emission factors, and include the Briery Hey background values.
·
standardised histograms for each of the 20 Test Claimants
comparing their exposures hour by hour against five separate thresholds (the PM10
threshold has not been included).
·
various contour plots examining different chemical/particles and
emission factors.
171.
The landscape has of course changed in the light of my findings. Shortly
after the close of the trial, I invited CERC to undertake further modelling of
the smoke plume limited to the 20 Test Claimants now under scrutiny, using
agreed data where appropriate and the specific bases set out below, presented
and/or tabulated as follows:
·
a contour map showing the number of hours exceeding the acrolein
odour recognition threshold of 0.38 μg/m³.
·
a contour map showing the number of hours exceeding the lowest
recorded health threshold for acrolein of 146 μg/m³.
·
a contour map showing the number of hours exceeding the health
threshold for “total aldehydes” of 500 μg/m³.
·
a contour map showing the number of hours exceeding the PM10
trigger value of 107 μg/m³ (based on an emission factor of 27.5 g/kg
for stage 2 and an emission factor of 12.5 g/kg for stage 3). I appreciate that
when interpreting this contour map I will need to take into account the point
that COMEAP requires two consecutive hours.
·
a similar contour map for the PM2.5 particles based on
a trigger value of 74 μg/m³, and emission factors of 22.6 g/kg for stage 2
and 10.25 g/kg for stage 3.
·
a table (showing only the 20 Test Claimants and the agreed
meteorological data) examining exposures to PM10s using my emission
factors for stages 2 and 3 (viz. 27.5 g/kg and 12.5 g/kg) and the COMEAP
trigger value of 107 μg/m³. As before, the table will show the numbers of
hours of exceedances above this trigger value.
·
a table (showing only the 20 Test Claimants and the agreed
meteorological data) examining exposures to PM2.5s using my emission
factors for stages 2 and 3 (viz. 22.6 g/kg and 10.25 g/kg) and the COMEAP
trigger value of 74 μg/m³. As before, the table will show the numbers of
hours of exceedances above this trigger value.
·
a table examining the “total aldehydes” on the basis of an
emission rate of 600 mg/s/MW and a health threshold of 500 μg/m³. As
before, the table will show the numbers of hours of exceedances above this
trigger value.
·
a similar table for acrolein based on Mr Shillito’s emission rate
of 114 mg/s/MW and a lowest recorded health threshold for acrolein of 146
μg/m³.
·
a similar table for acrolein based on Mr Shillito’s emission
factor of 114 mg/s/MW and the odour recognition threshold of 0.38 μg/m³.
·
separate tables for Test Claimants numbered 24 (10th
and 12th June), 30 (10th, 11th and 27th
June), 33 (work) (11th, 15th and 20th June),
37 (10th, 12th and 17th June) and 39 (10th,
12th and 17th June), using my emission factors and rates,
and the agreed meteorological data, setting out the hourly concentrations of PM10s
and the Briery Hey background data for those dates.
·
one set of standardised histograms for each of the 20 Test
Claimants comparing their exposures hour by hour against the following separate
threshold values: the odour recognition value for acrolein; the lowest recorded
health value for acrolein, and total aldehydes (all based on the previously
stated emission factors and threshold values).
·
one set of standardised histograms for each of the 20 Test
Claimants comparing their exposures hour by hour to the PM2.5s and PM10s,
using the previously stated emission factors and rates, against the trigger
threshold values of 74 and 107 μg/m³ respectively.
172.
For the avoidance of doubt, I was not inviting CERC to deduct 20% in
relation to the PM2.5s and PM10s to reflect moisture
content. I was not asking CERC to model the hydraulic oil, the foam and the
conveyor belts (the emission factors for these are not available, and they are
being accounted for in a different way). As regards the 0.8% contamination,
CERC was required to model this in the same way as it had done previously, in
other words (on my understanding) taking emission factors for household waste.
Finally, CERC’s remodelling was carried out on the basis of my earlier findings
in relation to total initial tonnage in the bunkers, heat release rates etc.
173.
I appreciate that I had not specifically requested tabulation of CERC’s
remodelling against the 24-hour mean values for the PM10s (51
μg/m³ for vulnerable persons, 76 μg/m³ for the non-vulnerable) and
the PM2.5s (36 μg/m³ for vulnerable persons, 55 μg/m³ for
the non-vulnerable). However, when I gave my instructions to CERC I was
confident that I would be able to ascertain the position as regards these values
from the considerable array of data which I had requested, in particular the
five most heavily exposed Test Claimants. In the event, CERC has kindly provided
the 24-hour mean values for this sub-group.
174.
The fruits of CERC’s remodelling have been appended to this judgment (see
Appendix 2) and are analysed further below.
175.
Before leaving this section, I have to observe that there are features
of the plume modelling which are not wholly satisfactory. One specific matter
which concerns me is the ability of the model to provide a “handle” on subtle
changes in wind direction and of temperature, and the possible ability of smoke
to linger and seep. The model cannot account for the peripatetic nature of
human behaviour, and in many cases it is difficult to know the exact position
of any Test Claimant during daylight hours. On the other hand, the plume model
fixes on external exposures, and people remaining indoors will have been exposed
to less. Further, it is unlikely that most individuals’ natural daily movements
would have brought them closer to the Sonae plant; common sense would suggest
that they would have moved in the opposite direction. Mrs Spanton referred to
the “margin for error” within the model, but its nature and extent was not
explored. Many of the sociological points set out above were made during the
course of the trial, but the inherent lack of precision of the plume model was
not quantified. These concerns aside, the plume modelling is the best evidence
the present state of human ingenuity can presently provide.
176.
In my view, this is the now appropriate stage for me to set out the
legal principles which govern these claims.
GOVERNING LAW
177.
Most of the legal principles governing a claim of this nature are so
axiomatic that explicit recognition in this judgment is not required. However,
it is appropriate to address four specific areas.
178.
First, it is common ground that the Claimants cannot recover damages for
personal injuries unless they establish on the balance of probabilities that
they sustained what the law regards as “actionable injury”. It is insufficient
for them to prove, without more, inconvenience and distress. I examined the
relevant jurisprudence on this issue in my recent decision in Greenway and
others v Johnson Matthey Plc [2014] EWHC 3957 (QB). Although, at the time
of writing, I am aware that my decision is en route to the Court of Appeal, I
am confident that my coverage of the general principles (as opposed to their
application to the cases then under consideration) is uncontroversial. The
leading authorities are Cartledge v Jopling [1963] AC 758 (HL) and Rothwell
v Chemical and Insulating Co Limited (2008) 1 AC 281 (HL). At paragraph 26
of my judgment in Greenway, I said this:
“On my understanding of its reasoning, the House of Lords in Rothwell
did not seek to reinterpret its earlier decision in Cartledge, although
– as has been pointed out in the parties’ written submissions – their
Lordships’ individual formulations of the legal test varied slightly. For Lord
Hoffmann the test (in tort claims generally) involved the “abstract concept
of being worse off, physically or economically, so that compensation is an
appropriate remedy” (at 289D). For Lord Hope, the test was whether there
was “real damage, as distinct from damage which is purely minimal” (at
297E). For Lord Rodger, the test was “material damage” (at 311F). It
might be argued that some of the formulations tend to circularity. What may be
more valuable is to consider how the test was applied to the facts of both Cartledge
and Rothwell itself.”
179.
The facts of both Cartledge and Rothwell are far removed
from the present scenario, and in the passage I have set out above I have
alluded to the potential circularity which arises. Ultimately, in my judgment,
this must be a question of fact and degree. A transient, trifling,
self-limiting, reversible reaction to an irritant is not “actionable injury”
for the purposes of the law of tort. These could fairly be described as “normal
physiological responses”. However, the ubiquity of this concept cannot be
recognised because it could be used to characterise the reaction of human
tissue to hydrochloric acid. The normality of the burn does not rob the injury
from its characteristic of being actionable. In my judgment, if the degree of
irritation is severe enough, whether or not it becomes a pathological response
expressed in terms of inflammation, it may be possible to hold that the line
has been crossed. This is more likely to be so if there are several severe
irritant responses occurring simultaneously: i.e. to the eyes, the nose, the
respiratory tract, and they last long enough. Usually, one would expect
to see evidence of a resulting inflammation in such cases.
180.
The question does arise of whether a series of minor, sub-threshold
irritations is capable of overleaping the bar set by the concept of actionable
injury. Could 1,000 sneezes amount to a claim whereas 1, or even 10, sneezes
plainly could not? I accept that difficulties might arise at the margins
(imagine 1,000 consecutive sneezes), but ultimately this point collapses into
what is in common parlance called the “zero sum game” rather more elegantly
expressed by Lord Hope in Rothwell (see paragraph 42 of his opinion).
181.
Having regard to all the available evidence, I intend to adopt a broad,
common-sense approach to this issue. The clinicians differentiate between
irritation and inflammation (“... -itis”), but my approach will not be strictly
tethered to the strict medical or pathological concepts, although will
recognise that these have some general utility. However, there is still a
hurdle which each Test Claimant has to surmount.
182.
Secondly, the Claimants seek to argue that it is sufficient for their
purposes that they are able to prove that the Defendant’s breach of duty
materially contributed to the risk of injury. I was taken to the pre- and post-Fairchild
jurisprudence, as well as to a number of decisions of the highest authority
dealing with industrial disease. On this issue I am able to be quite brief,
because in my judgment Mr Redfern is seeking to lead me into frank error.
183.
In the present case we have one tortfeasor and, putting to one side for
the time being questions of pre-existing vulnerability and background air pollution,
one package of potentially causative agents. The issue is whether that package
of chemicals and particles caused or materially contributed to the Claimants’
alleged personal injuries. The Claimants do not have to prove sole cause, but
they do have to prove material cause. It is conceptually and legally incoherent
in a case such as the present to speak in terms of the smoke plume making it
more probable that the Claimants might have suffered personal injuries, or (to
put the same point in another way) that their risk of suffering personal
injuries was increased. The issue is a binary one: either, on the balance of
probabilities, they sustained an injury in consequence of tortious exposure, or
they did not.
184.
The Fairchild doctrine of “material contribution to the risk” is
designed to cover two situations. The first is where there are two or more
tortfeasors, and medical science cannot say which caused the injury. In order
to achieve justice for the Claimants, the law relaxes the “but for” test of
causation. However, in that situation it is beyond dispute that (a) the
Claimant suffered personal injury, and (b) that injury was caused by a tortious
agent (whose agent being the issue). The second situation is where there is one
tortfeasor and two potential causative agents (one “guilty” and the other
“innocent”), but it cannot be proven which actually caused the Claimant’s
injury. Again, in all these situations it is beyond dispute that (a) the
Claimant suffered personal injury, and (b) the industrial agent was capable of
causing that injury.
185.
I reviewed most of the relevant jurisprudence in Heneghan v
Manchester Dry Docks Ltd and others [2014] 4190 (QB), another case en route
to the Court of Appeal, but where my same general observation applies (see
paragraph 178 above). The locus classicus remains McGhee v NCB
[1973] 1 WLR 1. In “innocent” and “guilty” dust cases, the law does not require
strict probabilistic proof applying the “but for” test. Mr Redfern drew my
attention to the earlier decision of the House of Lords in Gardiner v
Motherwell Machinery and Scrap Co Ltd [1961] 1 WLR 1424, another case where
the first opinion was given by Lord Reid. Mr Gardiner claimed damages at common
law for exposing him to conditions liable to cause dermatitis, and in failing
to provide proper washing facilities. Lord Reid explained the basis for the
plaintiff’s recovery of damages for breach of duty in this way:
“I can now sum up my view in this way. The appellant never
suffered dermatitis before he was exposed during his employment by the
respondents to conditions liable to cause that disease. His original symptom –
an outbreak on the back of his hand – is admittedly typical of industrial
dermatitis …
In my opinion, when a man who has not previously suffered
from a disease contracts that disease after being subjected to conditions
likely to cause it, and when he shows that it starts in a way typical of
disease caused in such conditions, he establishes a prima facie presumption
that his disease was caused by those conditions. That presumption could be
displaced …”
Other members of the Appellate
Committee analysed the case on the basis that the appellant had proved his case
on all the available medical evidence. Thus, Lord Reid’s approach, albeit
immensely authoritative, should be regarded as evidencing a minority view. This
is the same minority view that Lord Wilberforce espoused in McGhee (see
7E), and in my judgment should be regarded as apart from the mainstream.
186.
The fundamental reason why the “material contribution to the risk”
principle, in any of its manifestations, cannot avail the Claimants is that it
is incumbent on them to prove on the balance of probabilities that they were
within the relevant envelope of material risk as that concept is properly
understood. It is insufficient for them say – whatever the strength of
their personal conviction may be – that they were at risk in the sense that
they had some exposure. On that argument they should succeed even if the
exposure were minuscule, measurable only in parts per trillion. In my judgment,
any Claimant was only at risk if s/he can prove exposure at a level which was
capable of causing personal injury. This the relevant risk for these purposes.
For many people, exposure at these levels would not in fact cause personal injury,
but the threshold defines the level at which they are at least “at risk”. The
sub-threshold terrain may not be “safe”, in the sense that it cannot
scientifically be proven to be 100% safe, but as I pointed out to Mr Redfern
when he was examining Professor Hay on this topic, the null hypothesis
works the same way in science and in law; all that varies is the standard of
proof.
187.
I should not be understood as being necessarily wedded to threshold
levels which are derived from experimentation and scientific inquiry. The
levels I have selected as indicative are, in fact, favourable to the Claimants,
but there remains room for an argument that they should be relaxed yet further
to reflect the scientific uncertainties which abound, and the difference between
the level of proof the law as opposed to science requires. The extent to which
I will succumb to that argument depends on balancing the strength of the
scientific evidence against that of the lay evidence. In the final analysis,
however, I will have to arrive at appropriate thresholds, even if they are
lower than those a purely scientific approach would mandate. To do otherwise
would not be to exercise the “complete autonomy” which Mr Redfern suggests I
possess, but to indulge in unprincipled decision-making. Whatever the final
position on the thresholds, the position remains the same: below them no
Claimant is within the envelope of risk.
188.
The third legal issue which arises avails the Claimants, and there is no
dispute about it. Given that a Claimant does not have to prove more than that
the smoke plume materially contributed to his or her personal injury, success
is achieved either if it is shown that exposure exacerbated a pre-existing
condition (even if a person without that condition would not have sustained any
injury), or if exposure, added to background levels of pollutant, took that
Claimant above a relevant threshold (even if the background level was
sub-threshold).
189.
The fourth legal issue which arises is the difference between the legal
and scientific standard of proof. The Court of Appeal has stated on a number of
occasions that there is a difference between these two standards (see, for
example, the judgment of Smith LJ in MoD v Wood [2011] EWCA Civ 792),
but what is more difficult is to specify exactly what it is. Without attempting
an academic or jurisprudential analysis in a case already bristling with
difficult issues, it seems to me that the relevant points may be made in this
way. First, a scientist would tend to discount retrospective accounts given
some considerable time after the events in question. A lawyer might treat such
accounts with condign appreciation, depending on their overall reliability,
credibility and consistency, because the approach of the common law has always
been more inclusively flexible than a purely scientific approach. So, the fact
that the lay evidence in the present case would not get past the front door of
any reputable scientific journal is not quite the point. Secondly, the evidence
supporting the various health threshold levels in the toxicological literature
may have been filtered through more robust and stringent filters than those
which would be required by a lawyer applying probabilistic standards (on the
other hand, I repeat the point that many of the COMEAP levels are
precautionary). Thirdly, there are respects in which the science is inherently
uncertain, notwithstanding its claim to precision. I have in mind the plume
modelling evidence. A scientist would say that if the modelling fails to prove
the case, that must be the end of the matter. A common lawyer would say that
there remains room for flexibility and reasonable latitude, and that the whole
picture must be held in mind. How much room, though, needs very carefully to be
considered.
190.
Mr Redfern drew attention to the decision of the Court of Appeal in Armstrong
v First York Ltd [2005] 1 WLR 2751. In that case, the claimants alleged
that they suffered soft-tissue injuries to their spines in consequence of a
relatively low-impact road traffic accident. The parties relied on accident
reconstruction evidence based on second-hand information about the damage the
vehicles had sustained. This evidence directly contradicted the claimants’
evidence and stated that they could not have sustained injuries as they alleged.
The trial judge found the expert evidence to be convincing and the claimants to
be blameless and honest witnesses. The judge preferred their account. The issue
which arose on appeal was whether the trial judge could have rejected the
expert evidence without finding any flaw in it. The Court of Appeal held that
he could: he had weighed up all the evidence in the case, and was entitled to
conclude that the claimants were not lying and that there had to be some
inaccuracy in the expert’s evidence.
191.
At paragraphs 26 and 29 of his judgment, Brooke LJ said this:
“In my judgment, in this very difficult case the judge
directed himself correctly as a matter of law. He was entitled to consider the
evidence he had been given by the Claimant extremely carefully, directing
himself about the dangers of witnesses who may seem to be plausible but in fact
are telling a pack of lies, and directing himself to consider very carefully
the evidence given on behalf of the defendant. He formed the view that he could
not be satisfied that these witnesses were telling a pack of lies. He was very
impressed by their evidence, and he concluded, when he had to balance the
evidence of each side, that there must be - although he accepted fully that he
could not say what it was – something that was not accurate in Mr Child’s
evidence in that particular case.
…
In my judgment, if we dismiss this appeal in this case we are
not opening the door to a whole lot of dishonest claimants to recover just
because there may be cases in which the honesty and force of a claimant’s
evidence impresses a trial judge in the way the evidence of these claimants did
on this particular occasion. In very many cases the evidence of a witness like
Mr Childs may well be sufficient to tip the balance strongly in the defendant’s
favour.”
192.
Brooke LJ also referred to the decision of the Court of Appeal in Coopers
Payen Ltd v Southampton Container Terminal Ltd [2004] 1 Ll Rep 331, where
Lightman J said this:
“There is no rule of law or practice in such a situation
requiring the judge to favour or accept the evidence of the expert or the
evidence of a witness of fact. The judge must consider whether he can reconcile
the evidence of the expert witness with that of the witness of fact. If he
cannot do so, he must consider whether there may be an explanation for the
conflict of evidence or for a possible error by either witness, and in the
light of all the circumstances make a considered choice which evidence to
accept. The circumstances may be such as to require the judge to reach only one
conclusion.”
193.
The context of Armstrong differs from the present case in a
number of respects. There, the choice was stark and binary for the trial judge:
the claimants were either truthful or they were liars. No witness may be heard
to contradict Newton’s Laws; but the science – in Armstrong, the
engineering evidence – unlike Newton, might have been flawed.
194.
In the present case the situation is far more complex. There is a mass
of science, of variable inherent weight across the board, and a mass of lay
evidence. Earlier sections of my judgment have addressed the science, but I am
about to move onto the evidence of the clinicians and the Test Claimants. My
approach will be to assess that evidence on a traditional, common law basis,
and finally in the concluding section of my judgment I will attempt the
syncretism that Lightman J recommends. If that reconciliation cannot be
achieved, each corpus of evidence will continue to be judged in its own right,
but at the end of the day something may have to yield.
THE EVIDENCE
FROM THE CLINICIANS
195.
Although this body of evidence was called after I heard from the Test
Claimants, I consider that it is appropriate to examine the generic aspects of
the evidence from the clinicians at this stage.
196.
I heard evidence in four disciplines: lower respiratory tract; upper
respiratory tract; skin; and eyes. All the medical experts underlined the
importance of taking a detailed and accurate history from a Claimant.
197.
Dr Christopher Hardy FRCP, consultant general and respiratory physician working
primarily at the Manchester Royal Infirmiary, was called by the Claimants. Dr
Charles Hind FRCP, consultant physician working primarily at the Liverpool
Heart and Chest Hospital, was called by the Defendant. Temperamentally very
different though they clearly were, their expertise and experience is immense
and I was extremely grateful for their evidence.
198.
The respiratory physicians examined the then 40 Test Claimants jointly
in November 2014 and provided separate reports for the Court. They also
provided a Joint Statement following a without prejudice meeting in the usual
way. Although the dates of examination varied slightly, the pattern was the
same in relation to the other disciplines.
199.
In a powerful and sustained piece of oral evidence, Dr Hardy explained
why he considered that the Test Claimants he saw were likely to have been
victims of exposure to the smoke plume, causing symptoms to the lower
respiratory tract. In his view, the cases tended to follow a clear pattern.
Many of the people were aware of the fire, owing to its terrible smell and
taste, which were new. Some of them described a very large black cloud crossing
their homes and gardens. At least one person showed the doctors a photograph on
his phone of the cloud in relation to his garden. All decided to batten-down
their houses, but the smell and taste persisted. Generally, within a day or
two, the Test Claimants developed symptoms. The first thing they tended to
describe was itchy eyes, of varying degrees of severity. Nasal symptoms were
described by virtually everyone: their noses were either very blocked or very
runny. Sore throats were very prominent. Virtually all of them would say that
their throats were very dry at night, and that they needed a glass of water by
their beds to keep their throats moist. Claimants also complained of a severe
cough with tenacious sputum, sometimes with breathlessness and wheeziness, and
some had skin symptoms.
200.
According to Dr Hardy, the differences in terms of the histories taken
related principally to the duration of symptoms. In relation to those who had
pre-existing problems or issues (e.g. asthma; COPD; smokers), the onset of
symptoms was different as well as their offset. It was difficult to time this
precisely, but as regards those who had no co-morbidity the symptoms tended to
last 3-6 weeks; in relation to those who did have other problems, the duration
of symptoms could be measured in months. Accordingly, in Dr Hardy’s view, these
were severe symptoms, albeit temporary.
201.
Dr Hardy addressed the possibility that some, many or all of the Test
Claimants might have suffered from a coincidental viral infection. He agreed
that there was a significant overlap between the presenting signs and symptoms
of viral illnesses, and the Claimants’ complaints of smoke exposure. Dr Hardy
drew to my attention the inherent implausibility of so many people suffering
from a viral illness (one might add, in the early summer), and he also referred
to the very similar time period of onset and what he called the constellation
of symptoms.
202.
Dr Hardy explained that when exposure finishes, it will take time for
the patient to recover. Smoke irritated and inflamed the mucosa, the lining of
the respiratory tract, and ultimately the airways with the development of
bronchitis. When the exposure ceases, the glands producing sputum will not turn
off like a tap, as he put it.
203.
Dr Hardy therefore felt that on the balance of probabilities, if a
Claimant had been exposed to the smoke plume, and developed exactly the same
symptoms as the others, then those symptoms were due to the Sonae fire.
204.
Dr Hardy’s understanding of the fire was that it was burning well for a
week, and then smouldering thereafter.
205.
Under cross-examination, Dr Hardy agreed that no definitive test existed
to prove that these symptoms, if they were truly experienced, were due to the
fire. He said that irritant chemicals can create an inflammation if the dose is
sufficiently severe. He did not agree that people would fall ill at once; it
might take up to 24-36 hours. In relation to the toxicological thresholds, he
made the point that people may respond very differently to the same dose.
206.
Later in his evidence, Dr Hardy said that people with underlying lung
disease who suffer an inhalation injury would be more likely to develop an
infection, because their immunological response will have been compromised.
207.
Dr Charles Hind said that there was considerable common ground between
him and Dr Hardy. The reaction of the lungs to an insult will depend on its
severity. The irritant effects occur within seconds, or at the most minutes, of
exposure. The noci-ceptors in the upper respiratory tract detect the presence
of irritants and operate like “smoke detectors”. The mucosal linings will
become moist, and in due course the goblet cells will secrete mucous, producing
mild physiological effects such as coughing, phlegm and tightness of the chest.
Dr Hind stated that more severe and prolonged exposure may result in acute
inflammation of the lining of the respiratory tract, which could cause symptoms
such as a persistent cough, difficulties in breathing and bronchospasm. Even in
these cases the recovery period is likely to be short.
208.
In Dr Hind’s view, the difference between the irritant and the
inflammatory response is likely to be a question of degree. He said that the
health thresholds suggested by the toxicological evidence (e.g. 146 μg/m³
for acrolein) might be the level at which some people would begin to experience
an irritant response. Dr Hind could not say at what level an individual might
begin to be at risk of an inflammatory response.
209.
Dr Hind also suggested that in June/early July the pollen count would
have been moderate to very high (the nearest monitoring station is at Rotherham). He agreed that asthma sufferers could well respond at lower exposure levels.
210.
In cross-examination, Dr Hind agreed that there were many vulnerable
groups who might require a lower dose before experiencing symptoms. In general
terms, he agreed that there was considerable individual variation, and that such
variation was also seen between asthmatics (Dr Hardy had told me that
asthmatics can vary in reactions to particular irritants by a factor of 40). He
did not agree that smokers formed such a group. He said that if the evidence
did not show significant or above threshold exposures to the smoke plume, one
would need to examine alternative explanations for these complaints.
211.
Dr Hind agreed with Dr Hardy that smoke exposure had the potential to
lead to an infection because the microphages might be overwhelmed. However, I
interpreted his evidence as suggesting that this might arise only if the body
has already shown an inflammatory response to the irritant chemical. This
chimed with Dr Hardy’s evidence that there would need to be “a lot” of
inflammation. It is very difficult to see how milder responses might induce
infections.
212.
I have set out the evidence of Dr Hardy and Dr Hind in some detail
because (a) there is little between them, and (b) the generic points they make
were mirrored in the evidence given by other clinicians. To my mind, four
points of general application need to be emphasised. First, the difference
between irritation and inflammation is likely to be one of degree, particularly
at the margins. Secondly, human variability occupies a significant range.
Thirdly, the strength of Dr Hardy’s mini-foray into epidemiology must depend at
the very least on the quality of the evidence, including the histories,
elicited from all the Test Claimants. Fourthly, and perhaps most importantly,
much of these experts’ clinical opinion depended on their chosen point of
departure. If the starting-point is exposure to smoke at levels which may have
been sufficient to yield symptoms, then Dr Hardy’s patterns and constellations
become a compelling explanation for the phenomenon under scrutiny; and,
moreover, evidential weaknesses in an individual Test Claimant’s case became
less important, because they may benefit from the similarities within the herd.
If, on the other hand, the starting-point is exposure to smoke at levels
insufficient to yield symptoms, then certainly the medical scientist would say
that the quest for alternative explanations is necessitated. At the very least,
a close examination of the individual circumstances of the Test Claimants
becomes more important.
213.
Moving on now to the upper respiratory tract, the forensic contest here
was between Mr Andrew Swift FRCS, consultant ENT surgeon and rhinologist,
primarily working at the Aintree University Hospital (for the Claimants) and Mr
Andrew Parker FRCS, consultant ENT surgeon, primarily based at the Royal
Hallamshire Hospital, Sheffield (for the Defendant). As with their lower
respiratory tract colleagues, I was greatly appreciative of their evidence.
214.
Mr Swift had seen the DVD of the fire, and told me that he would have
expected consequences from it, namely some degree of inflammation in the upper
respiratory tract. The main insult would be to the nose, but the throat and
larynx might also be entailed. Mr Swift’s explanation of the nature of the
irritant, and then the inflammatory responses, was very similar to his
colleagues’ in the related field, and need not be repeated.
215.
My interpretation of his evidence was that Mr Swift did not accept that
those who had suffered irritant responses would be more likely to experience
head colds. He believed that this would not be so, otherwise hay fever suffers
would succumb more readily to these. I did not understand Mr Swift to accept
that the position was necessarily the same as regards those who suffered
extensive inflammatory responses.
216.
Mr Swift saw 14 Test Claimants, and believed that there was a
commonality of complaints. The likely explanation for them would be irritation
from an external source. In the majority of those he saw, he diagnosed rhinitis
and pharyngitis.
217.
Under cross-examination, Mr Swift agreed that his diagnosis of
inflammation was based solely on the history he was given as to clinical
symptoms, and on his clinical opinion, not on biopsy. He also agreed that any
inflammatory response would be presaged by sensory irritation, in particular by
sneezing. Mr Swift said that if an individual has an inflammatory response, and
then is removed from the external source, it would take days, or more likely a
couple of weeks, for there to be full recovery.
218.
Mr Swift was a diligent, careful witness who was rightly concerned not
to over-state the Claimants’ case. Mr Andrew Parker was an engaging witness
with a flair for succinct, apposite explanations. Thus, in relation to one of
the leitmotifs in this case, being the difference between the irritant
and the inflammatory responses, he said this:
“Well, it depends upon how much irritant there is. If there
is a significant irritant, then there will be an [immediate] irritant
response. If there is more irritant, then it will turn into an inflammatory
response, which is a pathological step change. Essentially, your Lordship, an
inflammatory response is a final common pathway that the body has in relation
to potentially injurious incidents, one of which is an irritant up the nose.”
219.
In Mr Parker’s view, the nose is designed to filter out material which
could be injurious further down. An irritant response will settle down very
quickly after the irritant has gone, or has been deactivated by the nose.
Particulates will be washed away by mucous, or can be swallowed. Later in his
evidence in chief, Mr Parker said this:
“Q. So given the understanding, perhaps with the benefit of
Mr Redfern's description of the fire, of what the claimants you examined
experienced, would you have expected any of them, once the irritant was
removed, to have spent as much as a week or two weeks or three weeks symptomatically?
A. I would say on the balance of probability, not. If the alleged
exposure was for a period of a few days -- a period of a few weeks, then it's
conceivable that there has been inflammatory change in the nose during that
time because the exposure has been continuing.
Q. So are you contemplating a consistent level of concentration
of the irritant?
A. The injurious agent would have to be present in the air in
sufficient and significant dose for me to endorse that concept.”
220.
Under cross-examination, Mr Parker conceded that Claimants might have
sustained an inflammatory reaction if sufficient exposure to the smoke went on
long enough. In that sense, he was conceding very little: this is a truism. He
did not accept that constant sub-threshold exposures could have had an additive
component, but he fairly said that “there might be a range of opinion on
that”. I will bear this in mind in due course, but in terms of the science
of toxicology I have already said that I consider that possible additive and
cumulative effects are addressed within COMEAP, and that unless the science is
ignored, qualified or rewritten for the purposes of this judgment, one really
should not go any further. Mr Parker’s final view on this aspect emerged after
questioning by me:
“MR JUSTICE JAY: But I think what is being put is each time you
go in there will be a sub-threshold exposure, but it will happen often enough and
in sufficient temporal proximity. In other words it's ongoing, but ebbing and flowing
always below sub-threshold. There will come a point at which, bang, you start
to get symptoms, not because you're sensitised, but because there's a sort of build-up.
I just want to know what your reaction is to that.
A. My reaction is, on the balance of probability, I wouldn't
expect that. There would have to be sufficient exposure to maintain a
continued inflammatory reaction.”
221.
Mr Parker accepted in cross-examination that the absence of permanent
damage does not preclude the possibility of a prior inflammatory response. He
also accepted that it might take time for symptoms to resolve as the
concentration of the alleged irritant falls. Finally:
“If the claimant has not been exposed as alleged then any
symptoms that they report cannot be arising as a result of the alleged index
incident. On this basis they will be unrelated to it and arising as a result of
other mechanisms.”
222.
The dermatological expert evidence was given by Dr Paul August FRCP,
consultant dermatologist, primarily working at the Leighton Hospital, Crewe
(for the Claimants) and Dr Iain Foulds FRCP, honorary consultant dermatologist,
based at the University of Birmingham (for the Defendant). Extremely helpfully,
these experts were able to encapsulate areas of consensus and disagreement in a
Joint Statement dated 3rd June 2015.
223.
These experts made the same general points as did colleagues elsewhere.
They were in agreement that there is no literature bearing on the question of
possible contact dermatitis through smoke irritation. I have examined the
Larrieu paper at paragraph 160 above. Dr August pointed out that the difficulty
and cost of obtaining such evidence heavily militate against it, although he
was compelled to accept that skin symptoms were not mentioned in the
Californian Wildfires paper.
224.
Dr August told me that the present focus is on a number of similar
conditions, varying to some extent in nature and degree, namely puritus
(itching), purigo (lesions), urticaria (an irritable condition of the skin
caused by release of histamine) and dermatitis (an inflammatory condition which
can be caused by contact with an irritant). A number of the Test Claimants also
complained of acne excoriae and rosacea, which on my understanding are
predominantly constitutional conditions which could be aggravated by exposure
to irritants.
225.
Despite the absence of evidence in the literature, Dr August said that
he believed that about 1,000 out of the total cohort of 16,000+ Claimants were
complaining of skin symptoms. That corresponds with the known proportion of the
population which is vulnerable. However, in my view that piece of evidence
taken in isolation cannot avail the Claimants in any way – the issue surely is,
vulnerable to what? In any event, we know next to nothing about the non-Test
Claimants.
226.
Under cross-examination, Dr August accepted that timing of onset of
symptoms, and levels of the modelled dose, were extremely important
considerations. He, as did others giving evidence for the Claimants, accepted
the possibility of cumulative exposures. He did not accept that onset would
have to be immediate, but he did envisage that the probable time period for
onset was likely to be in the region of hours to days. He agreed that the eyes
were more sensitive than the skin, and he said that if the airways were safe,
he would have thought that the skin would also be safe. Dr August accepted, as
he was bound to, that the conditions of this litigation were removed from those
of a scientific study, owing to the confounding factor of individuals claiming
compensation serving to magnify recall bias.
227.
Dr Foulds’s evidence was of a piece with those in other disciplines
testifying for the Defendant. In a powerful passage in his evidence in chief,
he said this:
“Well, we talked about irritant contact dermatitis, and irritants
you can divide into absolute irritants and relative irritants. Absolute
irritants will cause damage to the skin with one or two exposures. So, for
example, hydrofluoric acid, if you pour that on your skin, is going to drill a
hole in your skin. That's an absolute irritant, whereas relative irritants
work by damaging the lipid cell surface membranes within the skin, causing
damage to the integrity of the barrier function of the skin cumulatively over a
period of time. So irritants are anything which dries the skin, degreases the
skin, chemically attacks the skin over a period of time. So in practice
exposure to irritants usually requires months or years of repeated exposure to damage
the barrier level of the skin to cause problems, to break through the threshold
of the actual barrier function of the skin to actually cause dermatitis. Now,
most dermatitis will occur from cumulative damage unless that individual has
had repeated exposure over a period of time just beneath the threshold and then
the final insult will take them through the threshold. But in practice you need
months or years of repeated exposure to develop irritant dermatitis, and that irritant
dermatitis has to occur on areas which are susceptible. So hands from a wear
and tear point of view, or if you're talking about an airborne irritant, the
first place to get affected will be the eyelids, around the eyes and on the
face. Yet none of the people that we examined had problems on their eyelids. So
from irritation, I think it pretty well rules that out as a possibility. If
it's an airborne thing, it's got to affect the areas exposed to the skin. Airborne
irritants, airborne allergens where people become allergic to chemicals, affect
the skin that is exposed to the air and not on covered sites. Yet a lot of the
individuals we examined had problems on covered sites as well.”
228.
In his closing arguments, Mr Kent relied heavily on Dr Foulds’ evidence
about what the latter called the “me too” syndrome, which is particularly
prevalent in industrial or potential product liability cases. For example, close
investigation of an alleged problem (e.g. contact dermatitis caused by a “new
system” wash-powder) demonstrated that very few individuals, if any, had problems
genuinely attributable to the agent under scrutiny. Their causes were shown to
have been unrelated.
229.
Under cross-examination, Dr Foulds was asked whether he derived comfort
from the Envirobods and Shillito evidence appearing to show that the Claimants
were not sufficiently exposed. He said not, and contended that the stronger
point here was the absence of a common factor or a common clinical picture. Dr
Foulds said that there was a contradiction between the symptoms as they
described them and the histories that were elicited. Most said that their
symptoms cleared up within a short space of time. Dr Foulds denied that those
with pre-existing conditions were more vulnerable.
230.
The only generic issue on the dermatological evidence which I need
resolve at this stage is whether exposure to smoke is capable of causing
contact dermatitis. Professor Hay has advised me that there is no evidence that
it can, and I have already discussed the Larrieu et al paper. In my judgment,
the evidence base in support of the proposition that exposure to smoke at
relatively low levels (i.e, at the sort of levels suggested by the plume
modelling evidence) can cause dermatological problems must be regarded as
extremely sparse, based on little more than clinical impression alone.
231.
Finally, I heard evidence from two distinguished consultant
ophthalmologists, namely Mr Louis Clearkin FRCS, working primarily at the Arrowe
Park Hospital in the Wirral (for the Claimants), and Mr Ian Marsh FRCS,
primarily working at the University Hospital, Aintree (for the Defendant). Mr
Clearkin described himself as a “jobbing ophthalmologist”, perhaps with
a modicum of self-deprecating irony. I appreciated his charm and sense of
humour.
232.
All the Test Claimants the ophthalmologists examined had symptoms of
tear film instability due to underlying meibomian gland dysfunction. These
glands reside in the lid of the eye and are involved in the production of tears
and mucin. Tear film instability may result when the external environment of
the eye becomes abnormal in some way, causing tears to evaporate or become
otherwise dysfunctional and the tear film to break down. In Mr Clearkin’s view,
exposure to the smoke has brought forward symptoms of tear film instability by
3-5 years. He put the point rather compellingly in this way:
“I work on the Wirral. It's a very different area. Very refreshing
to meet the good folk of Kirkby. You know, solid people, gave a proper account
of themselves, pleasure to meet some of them, pleasure to meet all of them to a
degree. As I say, I've never been to Rodney Street before. It was a life
changing experience in many ways, but certainly it was a good gig in terms of dealing
with patients. This was a very straightforward experience.
Q. I wasn't asking about your pleasure.
A. I do apologise.
Q. I was asking how you found the group as far as the presentation
of their conditions.
A. It made me wish I worked in Kirkby and had much more straightforward
people to deal with than on the Wirral. But I hope nobody has written that
down. But they're very straightforward people. They struck me as no side to
them, gave an account that I found, with one exception, one minor exception, entirely
straightforward. They told me a story that fitted in with their clinical
signs. I hear this story half a dozen times at clinic in terms of symptomatic tear
film instability.
Q. Due to exposure to smoke?
A. No, due to a variety -- it's a common final pathway disease.
Many things can precipitate symptomatology.
Q. Smoke is one of them?
A. Smoke is one of them. Sunburn, for example. A
particularly dry day. A particularly cold day. It doesn't take much. It's a
complex mechanism. It's very, very robust. When it goes, it goes.”
233.
Under cross-examination, Mr Clearkin agreed that he was making an implied
assumption about the levels of smoke exposure being sufficient. He said that an
irritant chemical, for example the sulphur compounds produced by an onion,
might provoke tears, which might wash away the tear film components, which
might then precipitate chronic symptomatology. Ultimately, however, Mr
Clearkin’s evidence was that the posited environmental trigger is the final
insult in the causative chain, the metaphorical straw which breaks the camel’s
back.
234.
Mr Ian Marsh did not disagree with the general principle of tear film
instability; his dispute with Mr Clearkin was as regards its causes, and as to
the reliability of the Test Claimants’ accounts. Unlike Mr Clearkin, he
deferred to me on this last aspect. Mr Marsh emphasised that we have no
antecedent examination of these individuals before the alleged exposure; all we
have is what may now be observed four years after the relevant events. Mr Marsh
did not accept the possibility of cumulative effects: if those were a real
phenomenon, one would have expected a predominance of patients coming to
ophthalmic clinics with the signs and symptoms of this dysfunction, having
sustained only small doses of an irritant. Mr Marsh did not disagree with the
general principle of one final insult pushing a patient over the edge as
regards meibomian gland dysfunction, but could not endorse the proposition that
the acceleration might have been by as much as 3-5 years. Nor did he accept
that it was other than speculation that smoke should have accelerated a chronic
condition.
235.
Under cross-examination, Mr Marsh told me that there were some
similarities, and also some differences, as to the various Test Claimants’
symptoms and their onset. He agreed that by and large they presented with the
symptoms that one would expect from exposure to large quantities of smoke.
236.
I found Mr Marsh to be a somewhat dour witness who appeared to have been
discomfited by the forensic process and Mr Clearkin’s no doubt well-intentioned
jibes about his consulting rooms. I cannot accept his contention that because
the Test Claimants’ evidence is “subjective” it cannot carry any weight.
Rather, it is a factor to be weighed in the overall evidential mix. Even so, I
have no hesitation in preferring his evidence over Mr Clearkin’s at least as
regards the sole generic issue that I am choosing to resolve at this juncture.
I cannot accept the assertion that exposure to smoke could have accelerated
symptoms by anything like 3-5 years. The notion that smoke might advance symptoms
is theoretically possible in extreme cases, but is not really supported by
other than somewhat speculative, assertive evidence. These Claimants are all
likely to have had pre-existing tear film instability which ebbed and flowed in
the ordinary course of the condition. I accept the possibility that a few
developed this dysfunction after the fire, but it is no more than guesswork to
postulate that exposure to the smoke might have accelerated the process. Although
Mr Clearkin did not advance the argument in this manner, I accept that it is
possible that smoke exacerbated eye symptoms in previously vulnerable
individuals, including those suffering from meibomian gland dysfunction, during
the course of exposure to it and a recovery period thereafter. Whether the
exposure to this smoke plume caused such an exacerbation is entirely
case-specific and must be resolved on all the available evidence.
237.
To my mind, the following matters of general application arising out of
the clinical evidence from the eight experts I heard may be made at this stage.
First, in all four disciplines the experts spoke of a gradation between mild
irritation on the one end of the spectrum and severe inflammation at the other.
Issues plainly arise in the grey area in the middle, but generally speaking I
consider that it is valid to think in terms of irritation being transient,
self-limiting and a normal physiological response, and inflammation being
pathological and, albeit in all these cases non-permanent, probably over the
line and into the realm of personal injury and actionable damage. This
interlaces with my analysis of actionable damage in my section on the “Governing
Law” (see paragraphs 178-181 above). Secondly, I accept Dr Hind’s evidence,
read in conjunction with my interpretation of Professor Hay’s, that the lowest
health thresholds for a chemical such as acrolein are probably designed to
indicate the sort of concentrations where certain individuals may be expected
to experience an irritant, rather than an inflammatory response. Thirdly, and
as a heavy caveat on the previous point, it should continue to be recognised
that there is considerable variability, vulnerability and range of tolerance
thresholds over any given population. Fourthly, it is common ground between the
experts that timing of onset of symptoms matters. In my judgment, the irritant
response will be immediate, and in relation to an incident of this nature most
people will be likely to know within a short space of time what is causing that
response. It is the Claimants’ case, after all, that the smoke had a nasty,
pungent smell. On the other hand, I agree with Mr Redfern that one might expect
considerable variability as regards the timing of onset and offset of any
inflammatory response. Finally, and to reiterate a previous conclusion of mine,
I do not accept Mr Redfern’s submission that the medical evidence, viewed as a
whole, supports the possibility of an additive, in the sense of a cumulative,
response to sub-threshold exposures. The Claimants can do no better than rely
on the trigger values (based on two, consecutive hourly means) and 24-hour
means set out in the COMEAP report.
238.
There are other generic points too, but I will address these in the
final section of this judgment. Perhaps the most important, and controversial,
of these is the argument advanced by the Claimants’ experts and not the
Defendant’s that it is appropriate to draw inferences as to causation from the
patterns they believed they discerned as to a common, time-associated
constellation of symptoms.
THE TEST
CLAIMANTS
239.
Pursuant to CPR Part 19.13(b) and my order of 5th May 2015
(varying the previous order of 17th June 2014), I am trying 20 Test
claims within the overall framework of the GLO issues. The parties originally
selected 40 Test Claimants (20 a piece) with the objective of examining the
broad range of geographical and personal circumstances across the whole group.
I doubt whether the parties’ selections were wholly dispassionate and
objective, because it must be obvious that the Claimants will have alighted on
what they hoped were their best cases, and vice versa. Whittling down
this sub-cohort from 40 to 20 (with the parties now choosing 10 a piece), in
line with proportionate case management and the overriding objective, has
enabled me to examine what must be a broadly representative cross-section of
the group as a whole. However, I do not make the error of supposing that this
sample of 20 would be regarded as statistically significant by any
epidemiologist. It is another example of the pragmatism of the common law in
operation.
240.
My evaluation of the Test Claimants must be both inductive and
deductive. Inductive in the sense that their individual features must be
scrutinised with care before seeking to draw any more general inferences from
them; deductive in the sense that the generic evidence I have already examined
may be capable of throwing light on their individual cases. In a case of this
sort, the court must move rapidly from the particular to the general, to the
general to the particular, and then back again.
241.
Appendix 1 to this judgment comprises a list of the 20 Test Claimants
(with information as their post-codes and straight line distance from the
plant) and a map marking their locations with reference to the numbers the
parties have allocated them.
242.
Evidence bearing on the individual Test Claimants is derived from a
number of sources. First, they were asked to complete questionnaires as part of
the litigation process. Most of these were completed in the first half of 2013,
already well over a year after the incident. Secondly, each Claimant has
provided a witness statement, and in some instances a supplementary witness
statement, in line with court orders. The vast majority of these statements
were signed in September 2014. Thirdly, there is the evidence of what each
Claimant told the examining clinicians as recorded by them. Finally, but only
in some cases, there are relevant contemporaneous GP records. All this evidence
needs to be compared and evaluated in this case, assessed as appropriate
against the oral evidence given from the witness box.
243.
I will examine the Test Claimants in the order in which they gave
evidence before me. I need to explain my approach. At this stage I will be
doing so without express reference to the plume modelling evidence. This is to
avoid the potentially mechanistic thinking which underlay the Defendant’s
clinical experts’ approach, namely that because any given Test Claimant was
insufficiently exposed it must follow that s/he could not have suffered any
symptoms from exposure. I believe that I have already made clear that a more
fluid, less rigidly “scientific”, approach is required (at least at this stage
in my decision-making), although I certainly should not be understood as saying
that the plume modelling evidence can be ignored or circumvented. I will be
returning to it at a later stage of my analysis. In assessing the Test
Claimants, the focus will be primarily on the individual features of their
cases, but I will be keeping an eye on a possible “bigger picture” and
identification of patterns and constellations. However, this “bigger picture”
cannot drive my inquiry, since that would be to commit the logical fallacy of
assuming what needs to be proved. I have already said that I will be taking on
board all the available evidence, but an issue does arise as to the weight to
be given to expert clinical opinion on the Claimants’ side that, generally
speaking, the Test Claimants were honest individuals who gave reliable
accounts. Dr Swift and Dr August spoke in different terms but to the same
effect of intuitive judgments forged from lengthy experience in history-taking
and clinical examinations. The Defendant’s experts, on the other hand, deferred
to me on these matters.
244.
I have thought very carefully about this last point, but I cannot agree
with Mr Redfern that I should be affording “significant weight” to these
expressions of opinion. It is striking in this case that by the stage any Test
Claimant was seen by the experts in this case, there were no relevant signs to
witness, and no enduring symptomatology. Accordingly, there was no possibility
of correlating claimed symptoms with any meaningful clinical examination. It
follows that the clinical experts were really in no better position than I was
to assess matters of individual credibility and reliability, especially in a
medico-legal (as distinct from a purely clinical) context. With respect to
them, it might well be said that I was in a somewhat better position inasmuch
as the Test Claimants’ accounts were thoroughly tested in the crucible of the
forensic process. I do not propose to ignore the Claimants’ experts’ generally
favourable impressions; the weight to be accorded to them should, however, be
moderate.
245.
Another generic point which falls to be addressed at this stage is the absence,
in all bar one case, of any contemporaneous medical note either recording a
complaint about the fire or linking symptoms to the fire. I do not accept that
there is any solid evidence supporting the proposition that some GP surgeries
had signs discouraging appointments and encouraging over the counter remedies.
Dr Hardy told me about this, but his sources are unclear and I did not hear it
directly from any Test Claimant. I do accept Dr August’s point that it is
understandable that some Claimants might not mention symptoms to their GPs at
appointments for other complaints, but I cannot accept that this should be
treated as a universal panacea. Nor can it explain a failure to mention the
fire in instances where Claimants were attending their GPs complaining
of what they now say are fire-related symptoms. On the other hand, I do accept
and understand the bewildering variability across human nature: some patients
are not interested in possible causes and explanations; all they seek is a remedy.
246.
As a related matter, a number of the Test Claimants told me that their
GP records are either inaccurate or incomplete. I accept this possibility
inasmuch as GPs are extremely busy professionals who may not always write down
everything that is said, and may occasionally err. I am more inclined to accept
the possibility of a record being incomplete than erroneous. If a trained
history-taker records “symptoms 1/52”, that will almost invariably be his or
her best interpretation of the account being given.
247.
The final generic point to be made at this stage concerns the approach I
should be taking to the obvious delays in this case. Owing to these, and to the
fallibility of human recollection, it is inevitable that witnesses may be
unreliable historians and unable to give me more than a general sense of what
happened. Some allowances need to be made for this, but not to the point of
excess. The burden of proof remains on the Claimants, and they need to satisfy
me that they suffered the symptoms they claimed. In very many cases, apart from
recourse to the wider picture of apparently similar complaints, the Claimants
have nothing else to go on apart from their own evidence.
Mr Gary
Mangan
248.
Mr Mangan was born on 5th April 1985 and at the material time
lived 0.53km from the Sonae plant. In 2011 he was working as a retail
supervisor, but he is now employed in a very responsible role as a submarine
engineer in the Royal Navy. Mr Mangan does not smoke but he had a history of
upper respiratory tract infections, including one incident of shortness of
breath in 2008. At about 16:00 on Friday 10th June he went home and
could see black or dark grey smoke from the factory. There was an unpleasant
burning smell and a lot of smoke. Mr Mangan went running on the Friday evening,
and again on the Saturday, modifying his route on account of the smoke plume.
He felt a bit chesty when running, and his chest was “quite tight” that
Saturday evening (he denied any symptoms on the Friday). He did not go running
on the Sunday, but remained at home all day. On Monday he went to his GP,
without a prior appointment, where he was diagnosed with an upper respiratory
tract infection for which antibiotics were prescribed. He had symptoms of a
tight chest, a cough, and phlegm. These symptoms, including those of low energy
and disturbed sleep, lasted for about 10 weeks, and he remembered returning to
his doctor some weeks later.
249.
Under cross-examination, Mr Mangan said that he had no difficulty
obtaining an off-the-street consultation with his GP. Paragraph 9 of his
witness statement, which stated that he “decided to make an appointment to
see his GP”, was incorrect. In my judgment, it is difficult to understand
why so elementary a mistake was made, if it was indeed made. The GP noted the
presence of ulcers on the right side of the palate by the right tonsil. Mr
Mangan explained that he did not mention the smoke to his GP on this occasion
because he just attended “for my health”, and obviously everyone was
aware in the area what was going on. He had made the connection between his
symptoms and the fire.
250.
The GP records show that he returned to the practice on 16th
August 2011 for a night cough. He made no mention of the fire. His explanation
for this omission was that “I go to the doctors for my health”. I
understood that to mean that Mr Mangan is not concerned with the underlying
reasons for any ill-health, but just practical solutions.
251.
Dr Hind felt that Mr Mangan is likely to have suffered a coincidental
upper respiratory tract infection. Dr Hardy, taking into account the absence of
a temperature, the ineffectiveness of the antibiotics, and the fact that an
ulcerated palate is not commonly associated with infection, originally
concluded on the balance of probabilities that this Claimant did suffer from
the effects of smoke inhalation. However, in cross-examination it was pointed
out to Dr Hardy that Mr Mangan claimed to develop symptoms before 12th
June (i.e. before the date of any significant exposure to the smoke), and Mr
Kent pressed him on the GP record. Dr Hardy then said, “possibly he had an
infection; it is likely at that stage he had an infection”. He agreed that
in his report he could equally have said that Mr Mangan’s account was
consistent with smoke exposure.
252.
In my judgment, Mr Mangan was no better than a reasonable witness who,
like many others, could not remember much of the fine detail of what happened. In
such circumstances, I cannot conclude that his account was particularly
reliable. Not without some hesitation, I do not find that on Friday 10th
June he had already booked an appointment to see his GP on the following Monday
(had I made such a finding, it would ineluctably have followed that he was
suffering from an upper respiratory tract infection before he was aware of any
of the effects of smoke inhalation). Even so, on the balance of probabilities I
conclude that Mr Mangan was probably suffering from a coincidental throat
infection. His symptoms started before there was any significant exposure to
the smoke plume, and Dr Hardy agreed in cross-examination that it was likely
that this Claimant had an infection.
253.
In any event, I am not satisfied that Mr Mangan’s symptoms lasted for
anything like as long as 10 weeks. If, as a fit young man he was concerned to
see his GP for what he believed to be a mere throaty cold, suggesting a low
complaint threshold, and had it not gone away after the usual week or so, I
regard it as inconceivable that he would not have arranged to see his GP whilst
still apparently suffering symptoms. Furthermore, when he did see his GP on 16th
August, there was no mention of the fire.
254.
I will set out my final conclusions in relation to Mr Mangan’s case only
after considering all the plume modelling evidence in conjunction with the
evidence of the other Test Claimants.
Mrs Tracey
Beatham
255.
Mrs Beatham was born on 21st August 1972 and lives 1.96km
from the Sonae plant. She works as a domestic at hospital, in proximity to
cancer patients, and the nature of her employment means that she has to be
particularly cautious in not bringing ordinary colds and infections into her
work environment.
256.
Mrs Beatham is a moderate smoker and in February 2010 was suffering from
a persistent cough.
257.
According to paragraph 5 of her witness statement:
“I was not aware of the fire until the following morning when
I got up to get ready for work. I noticed a terrible smell of burning. When I
looked out of the window, I could see that the whole area was covered with
smoke. In particular, I noticed that my garden was covered in dust and ash. The
smoke was extremely thick and dark and was blowing towards my house and into my
estate. I cannot recall the plume being particularly high at the time of seeing
it.”
This was at
about 06:15, when the wind was blowing eastwards from the plant. Mrs Beatham
also noticed considerable quantities of ash and dust which lasted for weeks, as
did the pungent smell. She could not hang her washing outside. Many other
Claimants gave evidence to similar effect.
258.
Mrs Beatham complained of symptoms including a severe cough and chest
tightness which lasted for approximately 8 weeks in all. She saw her GP on 24th
June, and the following medical record has been retained:
“Upper Respiratory Tract Infection NOS 1/52 tired, sore
throat, cough, running nose. o/e throat red nil pus chest clear advice given.
Delayed script”
259.
Mrs Beatham has given inconsistent accounts of when her symptoms
started. The natural interpretation of the GP note is that her symptoms
commenced at around 17th June. According to her questionnaire, they
developed within two weeks. Her history as given to Dr Hardy was “2 days
after the onset she developed cough and phlegm so much that she vomited after
coughing the phlegm”. According to her witness statement, they started
within the first week of the fire. In the witness box, Mrs Beatham said that
her cough started on the third day, and that after about a week she took time
off work. She had to wait 3-4 days for the doctor’s appointment.
260.
In her oral evidence, Mrs Beatham said that she linked her chest
symptoms to the fire straight away, as soon as she had her cough (i.e. at
around the 2 day point). She said in evidence that she asked her GP if her
cough could be related to the fire, but he did not answer. Her witness
statement had said that she could not recall mentioning the fire to her GP at
the time. This is consistent with what she told Dr Hind, namely that she
assumed that she had picked something up. She could not explain this
discrepancy.
261.
Under cross-examination, Mrs Beatham said that she also had eye symptoms
which she mentioned to her GP. Her questionnaire and witness statement had made
no such claim. She could not explain this inconsistency. When asked about the
GP note, Mrs Beatham denied that her chest was clear. When it was put to her
that she told Dr Hind that “she was not aware of dust inside the house”,
she denied that she was exaggerating the position.
262.
Dr Hardy accepted in evidence that if the symptoms did not begin until
one week after the fire, as the GP note recorded and other evidence suggested,
then it is less likely that her symptoms were caused by the smoke: the more
probable explanation is viral infection.
263.
In my judgment, Mrs Beatham was an unreliable witness whose oral
evidence could not be accommodated within the far more reliable documentary record.
Her account, particularly in relation to the extent of the accumulation of dust
and the duration of any symptoms, contains elements of subconscious
exaggeration. I express the matter in those terms because I do not believe that
Mrs Beatham was intent on deliberately misleading the court, and that in any
event has (wisely) not been suggested. Mrs Beatham is, however, a good example
of a suggestible witness who could not remember what actually happened, and
therefore tended to say what she assumed could be right because that fitted
into her mindset of what this fire must have caused.
264.
In my judgment, Mrs Beatham’s case cannot succeed on the basis of her
own testimony. I accept that the unsatisfactory nature of her evidence does not
exclude the possibility that she may have suffered from relatively minor
symptoms hovering at the threshold of legal actionability, but (at least as
regards her own evidence viewed in isolation) she has failed to discharge the
burden of proof which remains on her. Unless the plume modelling evidence is
supportive and/or she is able to rely on a powerful intra-cohort “constellation
of symptoms” effect, her claim should fail.
Ms Jessica
Alexander
265.
Ms Alexander was born on 17th October 1993 and was only 17 at
the time of the fire. She was studying at a sixth form college which was 1.42km
away from the Sonae plant. Her home is 1.56km away from it.
266.
Ms Alexander is a non-smoker who had pre-existing eczema, including a
flare-up over her elbows and knees in January 2011. According to her witness
statement, but not her questionnaire, she had previously suffered from styes in
or near her eyelids which could cause swelling and streaming.
267.
According to Ms Alexander’s questionnaire completed on 22nd
February 2013, she suffered a range of symptoms, all of immediate onset and
floridly described. Her eyes were sore and dry, she was constantly rubbing
them, and although her symptoms resolved within two weeks, she believes that
her myopia was brought on by this experience. She developed red and itchy
patches across her torso and face, which made her self-conscious at school and
caused problems with sleep. After two months, her GP diagnosed contact
dermatitis, and after treatment it took a further two months for symptoms to
resolve. She developed migrainous headaches which interfered with her exams,
and rendered her unable to attend her maths A level exam (this must be a
typographical error: according to her witness statement, this was a GCSE maths
re-sit). These acute symptoms lasted for around 2 weeks. She also experienced
dizzy spells, an increased temperature, and a sore throat.
268.
In her witness statement, Ms Alexander stated that there was a lot of
dust and ash in the area at the time of the fire. It was sufficiently tenacious
to seep into the house, and it was a “constant job” to keep on top of
it.
269.
Ms Alexander was neither a confident nor a reliable witness. In my
judgment, she was self-conscious about her appearance before the fire, as many
young women are, and it is difficult to link cause with effect. Her myopia
could not have had anything to do with the fire, and it became clear from
contemporaneous, pre-fire documents that Ms Alexander was experiencing eye
problems which were either due to a fly entering her left eye, causing
swelling, and/or pre-existing lid margin problems – a feature of meibomian
gland dysfunction. Mr Clearkin agreed in cross-examination that it could have
been either, but appeared to favour the manifestation of symptoms from the
pre-existing condition.
270.
Although Ms Alexander was a regular attendee at her GP, she did not make
an appointment to see him after the fire. Indeed, when she saw him on 14th
June she made no mention of the fire, explaining to me that she was
self-medicating and that “everyone knew about the fire”. Reading through
her substantial, pre-fire medical history, I cannot accept that explanation –
it would only make sense if she had not associated her symptoms with the fire
at all, which was not her case. She saw her GP again on 8th July and
he gave her a sickness certificate covering the period 4th – 11th
July, presumably to excuse her from attendance at college. However, by then the
exam season had concluded. On 16th August her GP diagnosed “contact
dermatitis”, and it is surprising that on this occasion Ms Alexander did not
mention the fire if she believed, as she told me, that it had caused it. Dr
August agreed with the proposition that the itchy patches across the torso
described by Ms Alexander are difficult to explain because more naturally
exposed parts of the body would receive greater toxicological insult.
271.
There is no medical evidence supporting Ms Alexander’s other claimed
symptoms. Given her unreliability as a witness, I do not accept that she has
proved her case in these respects. Her elevated temperature, for example, is
highly unlikely to have had a toxicological origin. Her eye and skin problems
were pre-existing, and in her case there is nothing to cause me to wish to
depart from the advice of Professor Hay regarding the absence of evidence
linking dermatological symptoms to smoke. I cannot exclude the possibility that
smoke exposure exacerbated Ms Alexander’s pre-existing eye condition, but the
resolution of that issue depends mainly on the plume modelling evidence.
Otherwise, Ms Alexander’s case is in the same category as Mrs Beatham’s.
Ms Kelly
Colebourne
272.
Ms Colebourne was born on 29th October 1979 and lived 2.16km
from the Sonae plant. She continues to work as a fitness instructor. She
remains a non-smoker, and save for one issue relating to possible pre-existing
asthma, she enjoyed very good health.
273.
Ms Colebourne told me that she awoke at about 05:40 on Friday 10th
June to see a thick black cloud of smoke crossing the clear blue sky. By 14:45,
when she returned from work, it was “just smoggy, foggy, cloudy – like smog”.
The smokiness and dustiness continued that weekend, and Ms Colebourne described
a “char-grilled smell, acid-y at the back of the throat”. She said that
her breathing felt a bit funny. After about one week of the fire, according to
her questionnaire, Ms Colebourne experienced severe respiratory symptoms, and a
deep and chesty cough, which was very uncomfortable. She also suffered sore,
itchy and runny eyes, which became red and bloodshot. Her eye symptoms lasted
for about 4 weeks. These symptoms also caused low energy and a general feeling
of being increasingly worn down.
274.
On 5th July 2011 Ms Colebourne suffered a severe asthma
attack which resulted in her being hospitalised.
275.
Ms Colebourne was cross-examined closely in relation to the timing of
the onset of her asthma symptoms. According to her questionnaire:
“I was absolutely fine before the fire, and only started to
suffer these horrible symptoms after it started. As I mentioned above, I had no
history of asthma at all before this, and I was not exposed to any other
irritants that could have induced it, so it seems obvious that the fire was to
blame. ”
276.
In fact, an examination of Ms Colebourne’s medical record reveals that
she was complaining of general tiredness symptoms in July 2010, of acute tracheitis
in November 2010, and that asthma was diagnosed in February 2011 – in the
context of complaints of wheeziness and general malaise. Ms Colebourne informed
me that this diagnosis was incorrect, notwithstanding that she was given an
inhaler.
277.
On 15th June 2011 Ms Colebourne saw her GP, was diagnosed
with hay fever, and was advised to take her inhaler. It did not enter her head,
she said, to mention the fire to her GP, notwithstanding (a) the terms of her
witness statement, to the effect that it seems obvious that the fire was to
blame, and (b) the apparent need to contradict the GP’s diagnosis if there
appeared to be some more plausible explanation for her symptoms.
278.
On 5th July the history as recorded by the OOH service was as
follows:
“… since yesterday has had problems with chest since
November, not formerly diagnosed with asthma but given a ventolin inhaler. Non
smoker. Since yesterday has been coughing phlegm and struggling to clear chest.
Feels SOB and has used ventolin 4 + times today. On the phone able to speak in
long full sentences but sounds congested …”
279.
I read the “since yesterday” as a reference to the more serious
symptoms Ms Colebourne was obviously experiencing. However, it rather excludes
the sort of serious respiratory problems, dating back to one fire after the
fire, mentioned in her questionnaire. I also mention the hospital record dated
6th July which states that “over the past several months has been
suffering from increased shortness of breath”.
280.
I was not impressed by Dr Hardy’s evidence in relation to this Claimant.
He attributed her symptoms to the fire because of the temporal association, and
because she had a life-threatening attack after the fire. However, even a
cursory examination of the contemporaneous medical records does not bear this
out. I much prefer Dr Hind’s evidence on this issue. Nor can I remotely accept
Dr Hardy’s attempt to attribute six months’ of symptoms to smoke inhalation.
281.
In my judgment, Ms Colebourne was not a dishonest witness but she has
persuaded herself into believing, some considerable time after the relevant
events, that the fire caused her asthma attack. Ms Colebourne told me that
Camps (or their agents) knocked on her door to recruit her to this litigation,
and it is also noteworthy that her questionnaire contains serious errors
relating to her “very physical life” which, to be fair to her, she
disowned.
282.
It is possible that Ms Colebourne experienced respiratory problems
between 10th June and 5th July which were due, at least
in part, to the fire, but the only way that she can prove that she did is with
regard to the plume modelling evidence and/or the possible constellation of
symptoms effect.
Ms Dawn
Bunting
283.
Ms Bunting was born on 13th January 1974 and lives 0.44km
from the Sonae plant. As the crow flies, she is the closest of all the
Claimants to the original source of the smoke plume. However, that does not
mean that her exposures were likely to have been the greatest.
284.
Ms Bunting is a moderate smoker and in the past suffered from rosacea at
times of stress.
285.
Her case is complicated, if not bedevilled, by the fact that she has
completed two questionnaires containing different information. In her first
questionnaire, she stated that she first developed a sore throat, sore eyes and
a headache within two days of the fire, and that these symptoms resolved within
three to four months. She denied that she smoked or had any pre-existing skin
condition. In her oral evidence, Ms Bunting agreed that the questionnaire was “highly
inaccurate”, but a genuine mistake on her part. In her second
questionnaire, completed about two months later, she stated that she developed
symptoms within 24 hours of the fire, and that her respiratory symptoms lasted
two months, her eye symptoms one week, and her skin problems three weeks. Her
witness statement times the onset of symptoms at “within 48 hours”.
286.
There were thick layers of dust or ash inside and around the house. This
was really bad within the first week, and took about one month to settle down.
287.
There were numerous inconsistencies in Ms Bunting’s evidence, which in
my view were not satisfactorily explained. According to her first
questionnaire, “I did only think it was a passing flu at first”.
However, in her oral evidence she said that she associated her symptoms with
the fire straight away, and her sons had the same symptoms. When her attention
was then drawn to the questionnaire, she said that it was a long time ago, and “maybe
I did think it was a passing flu at the time”. In my judgment, this is the
more likely explanation, particularly when it is noted that Ms Bunting attended
her GP on 20th June 2011. She went to see him for a long-term
problem, but sought to persuade me that she did tell her GP about her cough and
sore eyes. She could not explain why this was not recorded. She did accept that
she could not recall if she attributed these problems to the fire. I cannot
accept that there was any complaint to the GP on 20th June. Ms
Bunting’s witness statement makes no mention of it.
288.
Ms Bunting was recruited to this group when she was out shopping and saw
a sign “were you affected by the fire?” In my view, she was another
Claimant who has permitted herself to embrace a narrative which gained full
currency long after the event. I am not to be understood as finding that her solicitors
have created a false account; I am making the more parsimonious point that
certain individuals are vulnerable, compliant and suggestible.
289.
Dr August was asked about the opinions expressed in his report:
“Past History Rosacea. This has been present for the
last 5-6 years beginning in 2008-2009 when it was severe for 3 months. This
became worse after the fire, particularly on the cheeks and around the eyes
where the skin became lumpy and cracked. This seemed to be bad for about 2
months and then settled back to its pre-fire severity.
…
Opinion She seems to have had redding [sic] of the
face which was worse than before. The rash was certainly confined to the face
only. The overall impression is that of rosacea exacerbated by the fire for a
period of 3 weeks, possibly longer.”
290.
Dr August agreed that the evidence in Ms Bunting’s case was “complicated”
because she has not given a consistent account. On any view, her skin problems
were not mentioned to her GP on 20th June. There is sparse evidence
linking dermatological conditions to smoke exposure, but in any event I am not
satisfied on her oral evidence that the case is made out.
291.
Hers is another case which is not necessarily doomed to fail on account
of her unreliable testimony, but requires a solid basis on the plume modelling and/or
a constellation of symptoms effect to stand any realistic chance of succeeding.
Mr Terence
Dunn
292.
Mr
was born on 12th January 1948 and lives
2.31km from the Sonae plant. He is retired, and in June 2011 went out for
substantial morning runs.
293.
Mr Dunn had no pre-existing health history of note. He gave up his
modest smoking habit in 2006 or thereabouts.
294.
According to his questionnaire, Mr Dunn suffered from the immediate
onset of respiratory, eye, nose and throat symptoms, together with headaches,
dizziness and stomach pain. More specifically, he had a nasty chesty cough,
producing shortness of breath, mainly on exertion. This prevented him from
going running. His eyes were sore and stinging, and he suffered from what he
told me was “extreme discomfort”. His nose was very blocked and he had
an “incredibly sore” throat.
295.
On the first morning of the fire, Mr Dunn told me that he was on his
usual 6½ mile run but could only do about half. He could not breathe; there was
coughing, spluttering and his eyes were watering. Mr Dunn described a “real
putrid, horrible smell”. First of all, he thought it was akin to a pig farm
(he might have been smelling the ammonia in the wood); it left an acid-y biting
taste in the mouth.
296.
The quantities of dust and ash were such that Mrs Dunn insisted that
their vertical blinds be replaced. He paid cash - £200-300. The manner in which
Mr Dunn’s evidence was given was convincing and credible.
297.
Overall, Mr Dunn appeared to give his evidence in a moderate and
understated manner. He said that his nose symptoms resolved within one week,
and the remaining symptoms within a further two weeks. He self-medicated for
these.
298.
Provisionally impressed as I was by Mr Dunn’s reliability as a witness,
I asked him to describe the colour of the smoke plume to me in more detail. He said
this:
“From the first time I saw, it was black, very black.
MR JUSTICE JAY: Very black, yes.
A. And then over a period, it would go blackish grey, if you
was looking over that way, but we didn't tend to a lot, and then it would
sometimes go a bit white. That was the colours I seen when I looked.
MR JUSTICE JAY: After about a week or so, was it still going
black?
A. No.
MR JUSTICE JAY: Was it –
A. It had changed colour, my Lord, after a week. It wasn't black
anymore.
MR JUSTICE JAY: In terms of the quantities of smoke, can you
give me an idea of that?
A. First few days, my Lord, was really bad. Really bad, and
then it just started to settle down. Just keep -- you know, there was smoke
coming from it all the time, rising, but never as serious as the first few
days, in my opinion.
MR JUSTICE JAY: Yes. I know it's difficult to describe, but
after the first few days, just give me a picture of the quantities of smoke.
A. It's very difficult to, you know -- because, as you say, it
had changed colour. So it was not as though you could look over and see
something black all the time. You know, you'd notice all the time, wouldn't
you? But there were a change in colour. Sometimes it would go very easy and
then sometimes it would flare up again and you'd see a white plume or a grey
plume. But that's only if you was out looking over all the time.”
299.
Entirely credible as a witness though Mr Dunn was, this seam of evidence
demonstrates how witnesses can be unreliable when it comes to the detail of
describing events that happened years before. The memory can pick out the worst
features of the event (in some people, the memory can blot these out
completely), and in Mr Dunn’s case he has unwittingly prolonged the period of
the black smoke well beyond its proper confines of the afternoon of Friday 10th
June – as vouched by all the expert and photographic evidence.
300.
The same unwitting process of prolongation and exaggeration may have
impacted on Mr Dunn’s evidence regarding his physical symptoms, and the ash and
dust. That evidence needs to be balanced against the plume modelling evidence
in his case. I will be examining this with care before expressing any further
conclusions about him.
Ms Julie Carney
301.
Ms Carney was born on 9th March 1977 and lives with her five
children (all of whom are also Claimants) 1.94km from the Sonae plant.
302.
She is a light smoker who had pre-existing dermatitis, on and off, from
the early 2000s, and asthma-like breathing problems for which she had been
receiving no treatment.
303.
According to Ms Carney’s questionnaire, she suffered from a range of
respiratory, skin and nose problems “soon after the fire started”. These
problems are ongoing. She did not link her symptoms to the fire until early
2013.
304.
Ms Carney’s primary complaint related to her dry, scaly skin – according
to her questionnaire, “most noticeable on backs, arms and torso”.
Plainly, these were the covered areas of the body where one would least expect
to see evidence of contact-related skin problems, setting aside the causation
difficulties that she in any event faced as regards the dermatology.
305.
Ms Carney was taken in cross-examination to her GP records which showed
that she was complaining of similar skin problems before the fire. These may
have been partly stress-related. She tried to persuade me that the spots on her
skin had completely cleared by the time the fire started, but I simply cannot
accept her evidence in this regard. Paragraph 24 of her witness statement said “I
have not suffered with my skin since 2009 prior to the fire”.
306.
The following passage taken from Ms Carney’s expert, patient
cross-examination by Mr Michael Jones serves to demonstrate the overall poor
quality of her evidence:
“Can you explain why these very serious symptoms are described
in this witness statement, when it seems that's not your recollection of the
symptoms that you have?
A. It's human error, isn't it? It's a misprint on that -- that
bit. I'd said -- when I've described my symptoms to the lady who was writing
it down, I said my nose was congested and my chest felt heavy and I found it difficult
to breathe.
Q. When you were answering questions from my learned friend Mr
Redfern, he asked you whether you went to your GP and you said you didn't, and
the reason you wouldn't go to your GP was because you had a little cough. You wouldn't
trouble a GP with a little cough.
A. I don't trouble the GP with anything.
Q. I haven't asked you the question yet. What you're
describing in this witness statement could not fairly be described as a little
cough, could it?
A. I just got on with it. I've got five kids. I'm on my
own looking after them. So I haven't got time to sit in the doctor's to be
told: it's stress and I can't give you antibiotics.”
307.
Ms Carney went to see her GP on 13th September 2011. She was
advised that her rash and cough were down to stress. Ms Carney now feels that
they are down to both. However, she agreed in cross-examination she had not
made the link with the fire. Given the smell that she described (akin to a
hamster cage – not implausible in itself), and the quantities of “billowing”
smoke that she witnessed, it is very difficult to accept that she did not make
the connection – on the premise, that is, that her descriptions are correct.
308.
Unfortunately for Ms Carney and for others, her cross-examination
concluded on an extremely damaging series of notes:
“Q. What I suggest, Ms Carney, is that you have no idea if any
symptoms you have had since June 2011 are related to this fire, do you?
A. I'm not a specialist, am I?
Q. No. So you've no idea?
A. No, because the doctor hasn't turned round to me and said:
this is all down to the Sonae factory fire. He said it's down to stress. But
in the area people have got the exact same symptoms and had the same problems.
Q. So you think because other people might have symptoms that
they say are caused, you say yours might be caused?
A. There's got to be a link somewhere, hasn't there?
Q. In fact, in 2013, when you went to that shopping centre in
Kirkby, you jumped on a passing bandwagon, didn't you?
A. No, I was asked a question and I answered.
Q. What was the question?
A. If I'd suffered anything -- any of these conditions. It was
chest, any chest symptoms from the fire, and I said yes, I had. And then they
said, would you like to come along and talk to us, and I said yes, because I
don't want something like that in the area where my kids are. My kids have got
to live here, haven't they? It's not jumping on a bandwagon. It's looking
after your family, isn't it?”
Ms Karen
Court
309.
Ms Court was born on 23rd July 1964 and lives 2.27km from the
Sonae plant. She now works in a responsible position as a volunteer care
co-ordinator. At the time of the fire she was a training manager.
310.
Ms Court completed, and apparently signed, two separate questionnaires.
I deploy that adverb because her two signatures look rather different, but she
assured me that they were both hers. I have to accept her evidence in this
respect.
311.
In her first questionnaire (Tandem Law), Ms Court stated that she had
not had the opportunity to review her medical records, but to the best of her
recollection and knowledge she first developed serious symptoms “some two
weeks after the fire started”. These symptoms included chest pain, a sore
throat, reflux, itchy eyes, itchy skin and a cough. She only became aware of
the causal link when she realised that other people in the area were
experiencing similar symptoms. According to this questionnaire, she received
medical attention at her GP surgery.
312.
In her second questionnaire (Walter Barr) she first suffered symptoms on
9th/10th June and these comprised a chesty cough (“coughing
a lot”), itchy eyes and itchy skin, and it took three weeks for the eyes
and two or three months for the remaining symptoms to recover. Ms
Court gave a different smoking history in this questionnaire. She claimed
that the Tandem Law questionnaire was rushed, and that she was happier with the
Walter Barr one, but it looks the other way round to me.
313.
In her oral evidence, Ms Court described a big white cloud of smoke
coming towards her house. The smell was “a little bit like rubber”. There
were “loads and loads” of debris. Like many other witnesses, Ms
Court was unable to hang out her washing. Her oral evidence was to the effect
that her itchy eyes lasted for four months, and her cough for approximately
four months. In my judgment, it was clear that she was exaggerating the length
of any symptoms, which calls into question her characterisations of the extent of
any ash and dust.
314.
As with the previous Test Claimant, Ms Carney, Ms Court unwittingly let
slip some very revealing answers during her cross-examination by Mr Jones:
“No, you asked me, when did you first become aware of something;
right? And I remember seeing that and thinking -- first thing I thought, I'll
be honest, is we were at risk. That fire means that we were at risk. I'd
forgotten about it because no one come to the house and said you need to be
screened, you could have been at risk, you might have got respiratory whatever.
Q. You had forgotten about the fire?
A. When I seen that I thought, oh, there's been fault with Sonae.
There's a claim. Where there's claim, there's blame. And I thought: hang on a
minute, my itchy skin and everything, what have I been exposed to?
Q. So that was the first time you'd made a connection between
your itchy skin?
A. Yes.
Q. I think you said that was two years later?
A. Yes.
….
Q. Let me ask you a narrower question. You'd forgotten
about the fire; yes? That's your evidence?
A. Yes.
Q. You're walking through Kirkby centre. You see the unit and
it says that Sonae is at fault, I think, is the phrase you used a moment ago. Had
you not seen that sort of material saying Sonae is at fault, one, you probably
would have forgotten about the fire still.
A. I didn't forget about the fire. I'd forgotten about Sonae
itself, if you know what I mean.”
315.
Ms Court was convinced that she first saw thick smoke after 20:00 on the
evening of 9th June. She must be mistaken about that.
Notwithstanding her first questionnaire, she claimed that she first experienced
symptoms immediately, in other words, that night. Her feeling at the time was
that her symptoms would be a temporary inconvenience, but her prolonged
dermatitis suggested otherwise.
316.
Ms Court saw her GP on 10th and 13th June in
relation to other matters. She said that although there was no mention of any
symptoms from the fire, she was sure that she did discuss it. The GP’s advice
was to take Betnovate for the dermatitis. She was convinced that this advice
was given on the second occasion. Paragraph 19 of her witness statement claimed
that she could recall one occasion on which her cough was so bad that she
thought that she would die. According to her oral evidence, this was the
immediate impact of the fire, which must have been before 13th June.
If that is right, one would have expected the GP to have noted a complaint; and
even if Ms Court is wrong and this occasion was after 13th June, it
is very surprising that symptoms of this severity did not attract a specific
visit for medical advice. I note too that Ms Court disowned paragraph 32 of her
witness statement, which claimed that a week after the fire she took her son to
the GP because he was unwell, and the GP recommended lotion for her skin.
317.
Finally, I should state that Ms Court agreed that her claim in the sum
of £500 for additional paint and cleaning material was probably overestimated.
318.
In my judgment, Ms Court was an unsatisfactory witness the reliability
of whose evidence I cannot accept. Her claim only has a prospect of success if
it supported by the plume modelling evidence and/or a constellation of symptoms
effect.
Mrs Annette
Farrell
319.
Mrs Farrell was born on 18th April 1952 and lives 1.81km from
the fire. She was an administrative officer at a sports college, and retired in
September 2011.
320.
She is a light smoker and had pre-existing problems with bronchitis and
shingles.
321.
According to her questionnaire, Mrs Farrell suffered a range of
respiratory, eye and ENT problems following the Sonae fire. These all developed
within 48 hours. Her respiratory problems are ongoing; her eye symptoms
resolved within one month, her ENT problems within three months.
322.
In her oral evidence Mrs Farrell described the colour and quality of the
smoke, in particular its horrible, chemical smell – “a bit like glue”.
She said that it burnt the back of her throat, went inside her nose and made
her eyes water. The gritty atmosphere, which was similar to the morning after
bonfire night, lasted for two to three days.
323.
Mrs Farrell was diagnosed with asthma in September 2011, and in November
2011 went onto the asthma register.
324.
In cross-examination, Mrs Farrell said that she had not suffered from
breathing problems before the fire. However, a letter from the Aintree Chest
Centre to her GP dated 10th November 2010 indicates clearly that she
had a wheezy cough and was quite breathless on exertion. The physician wondered
if she had bronchial hyper-reactivity.
325.
On various occasions in 2010 and 2011, Mrs Farrell was prescribed
Salbutamol. On 23rd March 2011 she was prescribed steroids for her
chest. According to his report, she told Dr Hind that she used an inhaler
approximately once a day during the year before the fire. She could not
remember telling him this, nor could she really explain why her questionnaire
had denied any asthma symptoms.
326.
Mrs Farrell told me that she was sure that she working at the time of
the fire. She was taken to a series of medical records showing that she was
given sick certificates for shingles between April and August 2011. She said
that some of these were backdated, and that she was back at work on 6th
June. At the time she was giving evidence, her occupational health records were
not available, but now that they have been obtained they clearly show that the
sickness certificates were not backdated and that Mrs Farrell was off work with
shingles over the whole of this period. I accept that Mrs Farrell was not
seeking deliberately to mislead me, and – as her recent witness statement says
- that she may have become confused about the exact dates. However, the
revelation of these records significantly undermines the reliability of her
evidence.
327.
Mrs Farrell attended her GP on 23rd June 2011 but there is no
record of her mentioning any eye and nose complaints to him. She told me that
this was an omission in the GP notes, and that she did; but that answer is
difficult to reconcile with the note of a complaint of a wheezy cough, which
was in very similar vein to previous complaints. If there had been something
new, it is highly likely that the GP would have recorded it. I have taken on
board Mr Swift’s point, made in the context of Mrs Farrell’s case, that when
people go to their GP they do not always mention all their symptoms; but her evidence
was that she did so on this occasion.
328.
Mr Swift also had this to say about Mrs Farrell’s case, which I
considered to be illuminating:
“There is also -- it's not necessarily the person that's
trying to tell mistruths. It may be their perception of things. So you find
that if someone suffers from, say, anxiety and depression, which are quite
common disorders, certainly in the rhinology field, their perception of having
a stuffy nose will be much greater than someone who is happy with life. I'll
quite often sit in clinic, trying to work out why they've come to see me,
because my nose is generally much worse than theirs, and that is an honest
opinion on that.”
329.
Overall, Mrs Farrell was not a reliable witness, and her case cannot in
my view succeed on the basis of her own testimony. As with other Test Claimants
falling within this category, she requires the plume modelling evidence and/or
a constellation of symptoms effect to support her.
Mr James
Reece
330.
Mr Reece was born on 21st January 1953 and lives 3.1km from
the Sonae plant. He works as a night janitor at Knowsley business park. He has
a history of chest symptoms and hay fever, and is a heavy smoker.
331.
According to his questionnaire, he developed symptoms on or about 12th
June 2011. He described these as “a bit of a cough and … cold flu like
symptoms”. He believes that he now has asthma as a result of being exposed.
Maybe it was for this reason that he described his symptoms as “ongoing”.
It was not until he saw an advert in a newspaper that other people had
apparently suffered similarly that he made the link between his symptoms and
the fire.
332.
In his oral evidence, Mr Reece explained that he felt that his symptoms
– of what he believed was hay fever – came on a bit stronger. He felt
miserable.
333.
Under cross-examination, Mr Reece said that he was sure that he saw the
fire before 04:00 on 10th June, when he went outside for a smoke
during the course of his employment. He must be mistaken about that. He made an
appointment to see his GP on 22nd June but did not attend. He told
me that he wasn’t thinking straight, although the appointment was probably
arranged for his symptoms. On 5th December 2011 he attended his GP
complaining off a cough which had lasted for two months. The GP records show
that asthma was not diagnosed until 19th October 2012.
334.
Dr Hardy’s report ascribes conjunctivitis and rhinitis to smoke
inhalation, and also a severe acute bronchitis which became chronic. Dr Hardy
is unclear about the aetiology of Mr Reece’s asthma. Dr Hind defers to my view
of Mr Reece’s credibility and the plume modelling. In my judgment, Mr Reece was
an entirely unconvincing witness, and I would be unwilling to attribute any
symptoms to smoke inhalation unless the plume modelling evidence and/or a
constellation of symptoms effect is available to support him.
Mr Edmund
Kenny
335.
Mr Kenny was born on 8th December 1951, and lived 1.8km from
the Sonae plant. He is retired and for some years cared for his mother, who
sadly passed away in February 2015.
336.
Unfortunately, Mr Kenny’s overall health is not good. He has a heart
condition and is diabetic. He was a heavy smoker for many years, suffers from
hay fever, and has experienced episodes of shortness of breath. Mr Kenny has
also been an asthmatic since 1990, but he told me that he manages to keep it
under control.
337.
Mr Kenny was at home at the time of the fire. He told me that he was
aware of it during the evening of 9th June. By the morning, the
smoke was a grey/white colour. At lunchtime, it went black. There was loads of
it; it was like the smoke coming off the top of a volcano. Mr Kenny also
described an awful, glue-like smell with chemical overtones.
338.
Unlike many other witnesses, Mr Kenny has given a consistent account
throughout the course of this litigation. In his oral evidence, he said that
his breathing “went terrible” within a couple of days. His eyes were
sore; he had a blocked nose and sore throat; he just felt rotten. Consequently,
Mr Kenny had to use his inhaler twice as normal, and he used Optrex 4-5 times a
day. His symptoms lasted for approximately three weeks in all.
339.
Mr Kenny also told me about “an awful lot” of dust and ash in the
smoke. It was grey, and got everywhere. It was completely different from “Sahara
sand dust”. He had to clean and wash more often, and try to keep the
windows closed. He placed masking tape on the gap over the double-glazing. A
sense of the duration of this phenomenon did not clearly emerge from Mr Kenny’s
evidence in chief, but he told Dr Hardy that he had to keep the windows and
doors closed for 2-3 days. Under cross-examination, he said that the dust etc
lasted for at least a week.
340.
On 20th June 2011, Mr Kenny saw his GP, Dr Mohammed Khan. The
computer records reads:
“H/O; asthma. Flare up after recent Sonic factory fire.
Speaking full sentences. Resp sys – b/l air entry equal. b/l scattered wheeze+.
RR-18/min. Was more worse over w/e, it seems. P]- Oral steroids. Continue
inhalers …”
341.
The Defendant accepts that Mr Kenny suffered an exacerbation of asthma
in mid-June 2011. The issue is what caused it. Mr Kenny said in
cross-examination that his hay fever tends to be worse in May/June, and then in
August/September. He agreed that the general pattern was of “good and bad
days”. There had been a deterioration in 2010 and Mr Kenny was on inhalers
throughout that and the following year. He was taking prednisolone before the
fire.
342.
Mr Kenny was asked about Dr Khan’s note, “was worse over weekend”,
which he agreed was accurate. He said that it was still musty and foggy over
the weekend on 18th/19th June. He was not sure whether
there was still smoke and dust. Mr Kenny made no mention to his GP of any nose
and eye symptoms. He agreed that his cough was getting better by then.
343.
Mr Kenny suffered from a serious bout of food poisoning at the end of
June 2011. When hospitalised on 2nd July it was noted that he had no
respiratory symptoms.
344.
In my judgment, Mr Kenny was an entirely honest witness. He is the sort
of person who I would also describe as being reliable, but an issue arises as
to the quality of his recollection, as it would in relation to anyone being
asked to recall events of this nature occurring some time ago. Thus, if he
tells me that the dust lasted for a week, I believe him; but he could simply be
mistaken about it.
345.
Mr Kenny is convinced that cause and effect has been established in
these circumstances, and I fully understand his reasons. A final decision
cannot be made in his case without considering the plume modelling evidence.
Mr Paul
McLoughlin
346.
Mr McLoughlin was born on 26th January 1962, and lives 1.61km
from the fire. He is a taxi driver who works school shifts and a number of night
shifts. He is a light smoker, and has no pre-existing health history of note.
347.
For obvious reasons, given the nature of Mr McLoughlin’s work, the plume
modelling in his case has been difficult to undertake. It has been tethered to
his home address; no other modelling exercise would have been possible. I have
to take a sensible view about this. Mr McLoughlin’s driving would have taken
him over a reasonably broad area; and, on occasion, closer to the Sonae plant
than his home. There is no satisfactory evidence as to the extent to which the
“boxed” environment of a motor vehicle provides any measure of protection.
348.
According to Mr McLoughlin’s questionnaire, he developed respiratory,
eye and skin symptoms within 48 hours of the onset of the fire, as well as
headaches. He complained of a persistent cough, sometimes painful and causing
difficulties in sleeping. His eyes felt dry, itchy and sore, and would water
when driving such that he had to pull over to the side of the road and apply
eye drops. His forearms turned red and itchy, and the skin flaked as he
scratched. He had to apply Sudacrem and an anti-bacterial soap. The headaches
caused a lot of pain in his forehead and elsewhere. All his symptoms resolved
within about two weeks.
349.
Mr McLoughlin told me that he was at home when the fire started. He saw
grey, dark soot-coloured smoke and experienced the “very unpleasant smell” of
burning wood and creosote. He also said that there were substantial quantities
of ash and dust, which meant that he and his family had to keep the windows and
doors closed.
350.
An issue arose in cross-examination as to whether Mr McLoughlin was
working on 12th/13th June. The computer record suggests
not, but he said that he worked because he had to, and would have used a different
computer code. I accept his evidence on this point.
351.
On 23rd June 2011 Mr McLoughlin saw his GP. He is not a
frequent attendee. The computer record reads as follows:
“C/O – cough had cough for a few weeks now, has been taking
OTC medication, chest seems clear. Advised to continue with meds and come back
in 2 weeks if no better.”
352.
Mr McLoughin said that he did not mention his other symptoms to his GP;
he was more concerned about the cough. He said that he thought that the fire
was mentioned to his doctor in passing. I do not find that it was, otherwise
the other symptoms would surely have been raised.
353.
Dr August was cross-examined about “the main symptoms of pruritus
unspecified” which “could be inferred as irritant dermatitis (but there
is no direct clinical evidence)” or “urticaria … or prurigo”. Dr
August agreed that, as a general proposition, one would expect such
condition(s) to be more widespread, and not confined to the forearms. However,
a lot is not known about the distribution of skin rashes. Further:
“MR KENT: It sounds as though this is quite difficult retrospectively
to diagnose.
DR AUGUST: Yes. It's inspired guesswork, really. It's a
hunch, what do you think is the best fit.”
354.
In my judgment, Mr McLoughlin’s skin symptoms require consideration
within the ambit of the overall frame of the toxicological evidence in this
case. As I have already made clear, that evidence is unsupportive. As for his
eye complaints, Mr Clearkin’s view is that these lasted just two weeks, but he
did not accept that this presentation was more consistent with infection than
tear film instability. I have difficulty with Mr Clearkin’s logic, and I take
Mr Marsh’s point that eye problems do not appear to have been mentioned at the
GP consultation on 23rd June.
355.
I have found Mr McLoughlin to be one of the most difficult witnesses to
assess. He came across as a reliable person, pleasant and understated. I have
little doubt that some key features of this experience have remained in his
mind: the smoke; the unpleasant smell; the quantities of ash; the cough; the
itchiness. However, as with other witnesses, I was left without a clear
impression of timing, duration and severity.
Mr Peter Shaw
356.
Mr Shaw was born on 31st May 1967. He works as a driver and
labourer. His depot is the premises of his employer, Kings Construction, which
is based on the Knowsley Industrial Estate 0.55km from the Sonae plant.
357.
Mr Shaw is a non-smoker who had no chest symptoms of any note for a
number of years.
358.
Mr Shaw falls into a different category from other witnesses. His
workplace is south-east of the Sonae plant. For him, therefore, Saturday 11th
June is a potentially important date.
359.
Mr Shaw normally works Monday-Fridays. His work pattern was and remains
such that he is at the depot for approximately 80-90 minutes a day; otherwise,
he is on the road. Mr Shaw arrived at work at approximately 06:50 on Friday 10th
June. He saw fire engines and a lot of black/grey smoke. He started to suffer
from a cough the day after the fire started and while he was at work. Over the
weekend, he began to suffer from itchy eyes. He found it difficult to breathe
and his work and sleep were affected.
360.
Mr Shaw told Dr Hardy that he was “probably” working on Saturday
11th June, and Mr Clearkin that he was working on that date. Since
then, his payslips have been obtained, and these contradict his account. His
explanation is that he “may have been mistaken”. It was put to Mr Shaw
that he well knew that his case would be enhanced if he could show that he was
exposed to the smoke plume on that date, and that in effect he has sought
deliberately to misrepresent the position. Not without some hesitation, I
acquit Mr Shaw of that aspersion. He was not a particularly impressive witness,
but I do not conclude that he would so brazenly have attempted to mislead.
361.
A clear issue arises as to the timing of the onset of Mr Shaw’s cough.
Under cross-examination he said that his sore throat developed over the Friday
afternoon, and the sore eyes, cough and phlegm over the weekend. On 13th
June he saw his GP who recorded “cough one week” and prescribed
amoxicillin. At that stage, Mr Shaw said that he had not made a link in his
mind between the smoke and his cough. However, he contested the accuracy of the
note. On 20th June he re-attended: he was still “bunged up”,
and the GP prescribed a short course of steroids. Mr Shaw told me that on that
occasion he did not mention the fire. It was only “maybe a week or two
after” that he began to make that connection.
362.
Mr Shaw also said that his cough largely cleared after one week, but he
was not totally better until 6-8 weeks later.
363.
In my judgment, Mr Shaw’s case faces problems whichever way the evidence
is interpreted. If the medical record is correct, which in my view it probably
is, then his cough was not due to the fire. The possibility that the fire
exacerbated his symptoms cannot be excluded, but cannot be substantiated on the
balance of probabilities on the basis of Mr Shaw’s account alone. If the cough
in fact developed on Saturday, when Mr Shaw as at home far away from the scope
of the smoke, Dr Hardy conceded that “it’s not due to the smoke, I guess”.
Mrs Teri
O’Brien
364.
Mrs O’Brien was born on 25th June 1981, and lives 2.63km from
the Sonae plant. Until recently, she worked as an emergency operator for
Merseyside Police, and is now a Probation Service officer.
365.
Mrs O’Brien is an ex-smoker. She suffers from hay fever, intermittent
chest symptoms from smoking-related bronchitis, and possibly late-onset asthma.
366.
According to her questionnaire, Mrs O’Brien suffered from a range of
eye, respiratory, throat and nasal symptoms, accompanied by headache and
fatigue, all starting about 48 hours after the onset of the fire. She had never
experienced similar symptoms before. These symptoms all resolved after three
weeks. She was working normally throughout this period – she could not take
time off, because the Police are sticklers for sickness absences.
367.
Mrs O’Brien was asked about the timing of the onset and offset of the
smoke and accompanying acrid, chemical smell. She said this:
“That day it was quite intense, for the first few days
leading off, and then obviously towards the end of that week it petered out a
bit.”
368.
In answer to my questions, Mrs O’Brien said that she saw black smoke at
around 13:30 on Friday 10th June, when it was close to her house,
although she could not say how far away. Given that the wind had been blowing
from the west for the past five hours, at the very least Mrs O’Brien’s timings
must be incorrect. On subsequent days, she said that the atmosphere was smoggy
and murky.
369.
She also said that she attempted to make an appointment at her GP. She
gave similar evidence to other witnesses about dust and not hanging out washing
outdoors.
370.
Under cross-examination, Mrs O’Brien was asked to be more precise about
the severity of her symptoms. Her evidence was that they were more intense
during the first week, but began to abate thereafter. Mrs O’Brien said that her
symptoms were “alarming”, but I agree with Mr Kent that if this were
really the case it is difficult to understand why she was unable to fit a
doctor’s appointment into her part-time work schedule. Her explanation was that
the appointments she was offered were inconvenient, and that she had other
things to do.
371.
In my judgment, Mrs O’Brien was a reasonable witness but, in common with
many others, imprecise on key issues such as timing and intensity of symptoms.
As I have already observed, the notion that her symptoms were “intense”
does not tally with her explanation for not seeing her GP. Another difficulty
from her perspective is her distance from the Sonae plant at all material times.
I will be returning to this issue in the context of the plume modelling
evidence.
Mr Francis Glascott
372.
Mr Glascott was born on 17th November 1945. He lives 2.1km
from the Sonae plant, and is retired. Owing to mental health difficulties, his
witness statement was admitted in evidence under the Civil Evidence Act 1968. I
also acceded to Mr Redfern’s application that a Litigation Friend be appointed.
373.
Mr Glascott has a history of chest pain and hypertension. COPD was
diagnosed after the fire. He claims that within two weeks of the commencement
of the fire, he developed respiratory symptoms which lasted for 10-12 weeks.
Inexplicably, Dr Hardy has attributed six months’ symptoms to the fire. In Dr
Hind’s view, the entirety of Mr Glascott’s symptoms are ascribable to smoking
and undiagnosed COPD.
374.
On 30th May 2013 Mr Patrick White of GT Law, Solicitors,
wrote a “Final Chaser” to Mr Glascott. He was told that the Statement of Truth
to be appended to his questionnaire had to be completed and signed by him
immediately, so that it could be returned to the Defendant. He was told that if
he failed to comply, there could be costs sanctions against him personally. Aggrieved
by the peremptory terms of this letter, Mr Glascott wrote to Clyde & Co (undated,
but stamped as received on 11th June 2013) and said this:
“1. Cold called on doorstep by young man regarding fire at Sonae
factory in Kirkby.
2. Was asked had it affected me and although I said no, I was
persuaded to give my details and answer some questions (including health
questions).
3. As I had breathing difficulties (and told him so) I
decided to go ahead and sign the, what I thought, the questionnaire.
3. Was subsequently phoned by GT Law about signing a
statement of truth.
4. Had been diagnosed that my breathing problem was mild
emphysema caused by my long-term smoking so I informed GT Law that I did not
wish to proceed and I did not believe that the Sonae fire had any bearing on my
current health problem.
5. Was told that I couldn’t withdraw my claim as the 7 day
cooling off period from the date of the cold caller visit had expired.
6. I told them I did not wish to proceed with what would then
be a fraudulent claim and was informed that if I withdrew I would have to pay
their costs.
7. Subsequently received enclosed letter reiterating their
claim for costs …”
375.
The Defendant has now pleaded that Mr Glascott’s is a fraudulent claim.
It should be noted that, notwithstanding the terms of his letter, he has signed
a witness statement and did submit to examination by the respiratory
physicians.
376.
Mr Patrick White agreed to give evidence in line with his witness
statement dated 21st May 2015. He denied that Mr Glascott had been
cold-called, and said that the latter would have attended GT Law’s Kirkby
office. He agreed that GT Law’s agents went round to Mr Glascott’s home in
order to ask him to sign the questionnaire. Mr White told me that when Mr
Glascott spoke to him on 14th May 2014, he did not wish to proceed.
Mr White accepted that he explained to Mr Glascott that he might suffer a costs
penalty if he withdrew. Under the terms of the CFA, it was open to GT Law to
claim costs from the client, but Mr White said that it is unlikely that they
would have done so. According to the terms of the attendance note of the call,
Mr Glascott was warned that if he backed out now, the Defendant “will seek
him for any charges”. This was notwithstanding the terms of Clyde &
Co’s letter dated 11th July 2012 under which the Defendant
irrevocably undertook not to seek payment of their legal costs. Mr White tried
to suggest that it would have been negligent of him not to mention possible
costs consequences, but in my judgment the letter could not have been clearer.
Mr White denied that he was treating Mr Glascott as a “cash cow”. He
said that Mr Glascott terminated the call by saying, “f – off”.
377.
Mr White was asked a close series of questions about Mr Glascott’s
questionnaire and the signature on the Statement of Truth. There are obvious
errors and inconsistencies in it. The signature looks nothing like Mr
Glascott’s signature elsewhere, including his signature on the letter to Clyde
& Co. Mr White maintained that it was Mr Glascott’s signature. I am not
satisfied that it is.
378.
Mr White sought to persuade me that he was acting at all material times
in Mr Glascott’s best interests. In my judgment, he was a poor, rather
self-important witness who was acting in what he thought were the interests of
his firm rather than those of his client.
379.
I am not satisfied that Mr Glascott is guilty of advancing a fraudulent
claim. He cannot be held responsible for the conduct of his solicitors. In
order to reach such a conclusion, I would need to know more about the
circumstances in which he agreed to sign a witness statement and to submit to
medical examination. However, he cannot persuade me by dint of his oral
evidence (or indeed Dr Hardy’s exorbitant attributions) of any causal
connection between the fire and symptoms. He is solely reliant on the plume
modelling evidence.
380.
This leaves the position of Mr Patrick White and GT Law. Mr White is not
a solicitor, but he was acting under the direction of his principals. I direct
that a copy of this judgment be sent to the Solicitors Regulation Authority for
investigation of the issues raised by Mr Glascott’s case.
381.
This nugget of evidence not merely leaves an unpleasant miasma of
concern and dubiety in relation to Mr Glascott’s case, it has the potential to
infect the integrity of GT Law’s processes overall, and other claims. Whether
that potential is achieved in all the circumstances of this GLO will need to be
addressed later.
Mr Leon Swift
382.
Mr Swift was born on 14th February 1989 and at the time of
the fire was a trainee accountant (he is now chartered). His place of work was
0.88km east north-east of the Sonae factory.
383.
Mr Swift arrived at work at about 08:45 on Friday 10th June.
Whilst driving to work along the East Lancs road he could see a large cloud of
pale-coloured smoke. Nearer the office, it was smoggy and foggy. From
closer-up, the smoke was in a vast quantity and a lightish/dark grey. The smell
was strange and different from normal. It did not appear to impact on his
breathing at that point.
384.
Later on, while Mr Swift was in his office, he began to suffer from
itchy eyes and sinuses. This caused him to sneeze. Everyone was talking about
the fire.
385.
On Monday 13th June the atmosphere was not as foggy as on the
Friday, but there was “definitely” still a large cloud above the
factory. Although there was less ash on his car, his symptoms had deteriorated.
He had a slight headache, and his eye and sinus problems continued. Mr Swift
told me that he tends not to visit his GP, and so he self-medicated. He bought
stronger anti-histamines than he ordinarily used, but these did not really
work. It took him 2-3 months to recover completely.
386.
Given other evidence in this case which I will be addressing below, the
Defendant has pleaded that this is a fraudulent claim. In these circumstances,
it is necessary to examine the evidence Mr Swift gave under cross-examination
with particular care.
387.
Mr Swift completed the standard questionnaire on 27th August
2013. He stated that his symptoms lasted “3-6 months” (cf. his oral
evidence), and that he made the connection with the fire only several weeks
after the incident, following talking to colleagues. Given that the symptoms
were apparently of immediate onset (cf. his oral evidence, which suggests a
short delay) I find that difficult to accept. Mr Swift also accepted in
cross-examination that the 3-6 month attribution was “excessive”.
388.
Mr Swift was taken to an undated and unsigned “Sonae Enquiry Form” which
appears to relate to him, and states that his symptoms of headaches and nausea lasted
for 4 months. He denied writing it. However, in his supplemental witness
statement dated 15th May 2015, Mr Swift said that he “completed
and returned” this form on 19th March. In the witness box he
said he may have chatted to someone over the phone. He tried to persuade me
that he did not know what the word “nausea” meant.
389.
On or about 22nd March 2013, Mr Swift completed a short
questionnaire. In it he stated that “days after the fire I began to be
affected with headaches as well as this I suffered breathing problems/ an
irritating cough developed”. Thus, here appears a somewhat different
account. Paragraph 3 of this questionnaire is also relevant:
“When did your symptoms reach a stage when you informed
your employer or GP?
Unfortunately I did not as I believed the headaches related
to working at a computer. It is only now that it has been brought to my
attention that I have linked the symptoms to the fire.”
390.
Mr Swift told Dr Hardy that he worked on Saturday 11th June. Dr
Hind’s note of Mr Swift’s history is somewhat internally inconsistent. Mr
Swift’s oral evidence was that he did not work on the Saturday. He believed
that his account must have been lost by Dr Hardy in the translation.
391.
Mr Swift agreed that in the first week after the fire he played 5-a-side
football and went to the gym as usual.
392.
In December 2008 and December 2009 Mr Swift was involved in road traffic
accidents, and brought claims for compensation which were successfully
resolved.
393.
On 22nd February 2013, Mr Swift was involved in the following
conversation on Twitter:
“Leon Swift either of you’s jumped on this sonae claim
bandwagon?
TC been all over the radio
MC residents living close going to solicitors due to
harmful emissions from the plant
MC looks like everyone’s doing it now because it’s
shut down
Leon Swift they’ve admitted liability so anyone living
or working in the area at the time of the fire can claim
MC get on it ken/tom
MC not for me #too honest
Leon Swift too honest ya, good one matt. I’m getting
involved I reckon, pays for the summer holiday if it goes thru
TC ha ha you’re a bad man Leon
MC he’s a fraud Tom
Leon Swift takes a fraud to know a fraud Matthew. Mr
‘I was in that car that crashed ye’ #showmethemoney
MC my neck was sore when Dave crashed #thetruth
Leon Swift Asking for trouble driving in flip flops
MC if you crash give us a shout #whiplashclaim
…
MC I’m sure you was fine that time Dave had a crash
Leon Swift least I was in the car though Matthew
MC so was I”
394.
Mr Swift tried to dig himself out of the massive hole created by these
exchanges. He said that the use of the term “bandwagon” was not the best
choice of words. He agreed that the Tweets could be construed as indicating
that any claim he made would be fraudulent. However, he told me that he was not
saying at the time that his claim was not genuine. He well understood, he said,
that an admission of liability did not mean that one could recover damages regardless
of injury.
395.
I watched Mr Swift very closely during the course of Mr Jones’
well-briefed and well-constructed cross-examination. One possible explanation
for his extreme discomfiture and obvious embarrassment was that his Tweets were
being taken out of context, and he was ashamed by the impression they may have
been making. Another explanation is that he well knew that the Tweets contained
accurate insights into his true state of mind. Making allowances as I do for
the degree of banter that may accompany much discourse over these social
networks, but having regard to all the available evidence, I regret that I have
to favour the second explanation.
396.
Mr Swift is a well-educated young man and ought to be ashamed of
himself. The Defendant’s pleaded case of fraud has been proved to the requisite
standard. His claim fails.
397.
Extremely damagingly not merely for him but potentially for others, is
the following exchange with counsel at the end of Mr Swift’s cross-examination:
“Q. If you were able positively to make a link, you would have
made that link when the fire was burning, not later?
A. Yes.
Q. You have just said "yes". Are you agreeing
with that proposition?
A. No. Like it is difficult to remember exactly when you do
make the association of the two. As I said previously, a lot of symptoms that
I did experience are very similar symptoms to what I experienced on a regular basis.
So it is difficult to differentiate between the two.
Q. Exactly. Mr Swift, what happened is this. You would have
great difficulty differentiating between symptoms you had anyway and symptoms
from the fire, which is why you didn't make any association in those two months
or so that you've said occurred before you made an association.
A. Yes, but that's not to say that there wasn't necessarily an
association between the two sets.
Q. That's a separate question. The question is whether you can
say there's an association. What I suggest is it was only a very significant period
later, whether months or in fact I suggest early 2013, that you saw advertising
literature, and you thought: well, I can say that those symptoms -- I'm not sure
how they were caused -- were caused by that fire and I can get some money; do
you accept that?
A. That may have been the trigger that made me think about it
again, but it wasn't the financial thing that I was thinking about in terms of
making a claim. It was just I realised that the nuisance it had caused at the
time, that I basically wanted to bring the claim.
Q. The nuisance it had caused? What do you mean by the nuisance
it had caused?
A. Basically, if you're sitting in an office and you've got itchy
eyes and tickly cough and sore nose, it's just -- it's inconvenience that you
could do without when you're trying to work, isn't it?
Q. But those are symptoms that are so similar to the symptoms
you had anyway at the time of the year each year that you couldn't positively
link those symptoms to the smoke, could you?
A. As I said, though, those symptoms were heightened considerably.
For example, I take Cetirizine, and that controls my hay fever. Things like
that. I don't need to take anything additional during the time of the fire, I
had to then go and purchase additional in order to try and appease the symptoms
that I was referring to.
Q. If that was true, Mr Swift, you would have made the link there
and then, wouldn't you? You would have thought: why is any normal medication
that always resolves my problems not resolving my problems?
A. You would think so, yes.”
398.
Finally, I note that in his report Dr Hardy fairly stated that Mr Swift
developed no chest symptoms whatsoever in consequence of smoke inhalation, but
then felt able to say that he probably suffered from conjunctivitis, rhinitis
and acute bronchitis (cough) for “up to six months”. My only observation
is that his sort of expression of opinion discloses the dangers of leading with
the chin.
Mr Shaun West
399.
Mr West was born on 29th December 1988 and lives with his
mother 0.58km from the Sonae plant. In 2011 he worked in Aintree as a sales’
advisor.
400.
Although a virtual non-smoker, Mr West has a history of skin rash (2001-2009),
asthma (since 1999), URTIs (1994-2010), rhinitis, sore throat, eczema and hay
fever.
401.
At paragraph 17 of his questionnaire, Mr West stated that he experienced
respiratory symptoms for a period of less than 2 months, eye symptoms for less
than 1 week, skin problems for less than 3 weeks, nasal symptoms for less than
2 months, and generalised dizziness, fatigue and aches and pains for less than
2 months. In the witness box he said that he felt that he had “short-changed”
some of his symptoms, in particular the eyes.
402.
In his oral evidence Mr West said that when he came home from work on
the evening of Thursday 9th June he was aware of the fire almost
immediately. He had a clear view from the hallway window of his home. Between
20:00 and 21:00 that evening, he could see flames and smoke; he was very
confident of that (his confidence was misplaced). The next day, in the morning,
the fire was really bad and the smoke was starting to billow. It was
relentless, and a very dark colour. He could smell and taste it - Mr West, in
common with others, described a “chemically” smell. By the time he returned
home at around 16:00 to 17:00, the smoke “still looked incredibly bad”.
Once he was in the house, he shut all the windows.
403.
Mr West said that it was very likely that he remained at home that
weekend. There was no real respite from the smoke. He figured that everyone was
in the same position, and that his GP would not be able to change his
environment.
404.
In terms of the evolution of the smoke plume, Mr West said this:
“But I'd say a couple of days in, after the immediate fire
getting very severe, there was one or two days when it would be a lot worse in
terms of maybe the smoke being lower. The house, I was always surrounded by
it, and to be honest, I constantly had the curtain shut.”
and
subsequently:
“Q. One final question. What was the atmosphere outside the
house like in the period of the fire and the period immediately following it?
The air quality, if you like.
A. Very poor. It felt like I was trapped in the house. Any
instance where I would have normally walked to the shop to get, you know, even
bread and milk, I would have drove to a garage in (inaudible) because I didn't
really want to go walking down the road.
Q. That's what you did as a result of it, but what was the air
quality like? Can you describe it?
A. I would cough immediately.
Q. That's a consequence.
A. A consequence.
Q. What was the air quality like?
A. Okay. Sorry, could you rephrase that?
Q. Yes. When you walked outside, was it a nice clear day or
what?
A. It obviously got worse on some days. So some days I
couldn't see across the fields because of the direction the smoke was going in
and I live very close to the fields. It was constantly smelling of the smoke
and the fire and whatever else. God knows what was in there. But it was
pretty horrid, to be honest.”
405.
In this sequence of evidence, Mr West was certainly not guilty of
short-changing himself or the Claimants generally. Being much closer to the
Sonae plant than almost every other Claimant, he was well-placed to describe
the direct and obvious consequences of the fire. However, his account bears no sensible
relation to all the objective evidence in the case, in particular the expert
evidence of Dr Mitcheson, the lay evidence of Dr Jowett and Mr Whitrow (in
particular), and the photographs which were separately provided to me by the
Defendant on a memory stick, including the photograph I mentioned at paragraph
76 above. Unwittingly or otherwise, Mr West’s account was heavily freighted
with hyperbole.
406.
Mr West was cross-examined closely about his claim that there were
considerable quantities of dust, ash and debris on the field between his
property and the plant. He said in his questionnaire that the field was covered
in dust and debris, and he was unable to take his usual walk. The photographs
do not bear him out at all. Under cross-examination Mr West made clear that he
did not examine the field in any detail, because it was not a good place to be.
He later said that there was bound to be dust and debris after a fire, but
could not support that assertion with his own evidence.
407.
On 24th August 2011 Mr West saw his GP, complaining of eye
symptoms. On examination, the GP noted the complaint of soreness, but recorded
that “there was not much to see”. Mr West claimed that he had a long
conversation with his GP about his other symptoms, about possible causes for
them, including the fire, and that he was self-medicating. If that was the
case, the GP would surely have made some note of it.
408.
In my judgment, Mr West was a poor witness who was neither credible nor
reliable. His evidence was replete with exaggeration and, at times, evasion.
The weaknesses in his oral evidence will need to be balanced against the plume
modelling evidence.
Mrs Kathleen
Tully
409.
Mrs Tully was born on 12th January 1970 and lives 1.53km from
the Sonae plant. She has a history of coughs, respiratory tract infections,
chest pain (but not for some years), conjunctivitis and sore throat.
410.
Mrs Tully said that she suffered from a number of symptoms following the
fire, including a sore throat, breathing problems, a chesty cough, sore eyes
and a congested nose.
411.
In her oral evidence, Mrs Tully described a very intense, acid-y smell
and smoggy, heavy conditions. It looked like the day after bonfire day, and
cars were white with dust.
412.
On 16th June 2011 Mrs Tully went to see her GP. His
computerised records reads as follows:
“Diagnosis Ganglion of wrist right-sided, noticed a
few weeks ago, some constant discomfort, able to use hand normally, no
pins/needles. O/E – ganglion, radial – N, sensation – N. Explained and
reassured.
Symptom Has a sore throat last 3 days, no fever, feels
achy all over, able to eat and drink a little, some diarrhoea, foul smelling,
no blood. O/E -well hydrated, systemically well, throat – tonsils inflamed,
pus bilate[ral] explained bacterial tonsillitis …”
413.
Under cross-examination, Mrs Tully said that she had made a connection
between her symptoms and the fire, and when she put this to her GP he said that
he was not sure. Mrs Tully said that she was sure it was then, but immediately
retracted this and said that it was possible that she mistaken about it. Given
that there is no mention of this account in her witness statement, I have
difficulty in accepting it.
414.
On 27th June Mrs Tully returned to her GP complaining of the
symptoms of acute conjunctivitis “for 5/7 now”. She had sore, itchy
eyes. As regards the timing, Mrs Tully said in evidence that she did not think
that her eye symptoms started on 22nd June, and that she must have
misremembered the position when she spoke to her GP. She did associate her eye
symptoms with the fire, but was unsure why she did not mention this to the
doctor on 16th June.
415.
In Dr Hardy and Dr Hind’s opinion, Mrs Tully suffered from severe bacterial
tonsillitis which was unrelated to the fire. Mr Swift’s contrary conclusion
that there was a causal relationship with smoke inhalation was based only on
clinical judgment and the temporal association. He said that the GP must have
failed to investigate the matter with sufficient care. Given the signs on
examination, the clear presentation of a severe bacterial infection, and his
own expert judgment that such infections are not the result of smoke
inhalation, in my view Mr Swift’s approach rather demonstrates the dangers of
relying on ex post facto clinical judgments in this sort of situation.
Nor can I accept Mr Clearkin’s diagnosis of tear-film instability. The clinical
findings, Mr Marsh’s sound opinion, and Occam’s Razor all point strongly in favour
of an unrelated bacterial conjunctivitis.
416.
Mrs Tully was a pleasant and entirely reasonable witness. I will be
examining the plume modelling evidence in her case, but all the reliable and
compelling evidence in her case points towards this being a coincidental
infection.
Master
Bradley Woods
417.
Bradley was born on 30th April 2005 and at the time of the
fire was aged only 6. He lives with his mother and sister 0.8km from the Sonae
plant.
418.
Bradley is reliant on the witness statement of his mother and Litigation
Friend, Mrs Kathleen Woods. According to his questionnaire, Bradley developed
respiratory, eye and skin problems within 24 hours of the fire. He had a
persistent cough and complained of a frequent wheeze. His eyes became very
itchy following the fire, and he developed a temperature. Bradley’s symptoms
had resolved within 2 weeks of the fire.
419.
Mrs Woods does not have other than a vague recollection of conditions in
the days following the fire, although she spoke of light grey smoke and “ashy”
conditions outdoors.
420.
On 14th June 2011 Bradley was taken to see his GP, who
recorded that he had been coughing and suffering from a temperature for two
days. This is inconsistent with the questionnaire. The GP diagnosed an upper
respiratory tract infection.
421.
Mrs Woods agreed that she did not mention her son’s eyes to the GP: her
explanation was that she was just bathing them.
422.
Bradley clearly did suffer from a coincidental viral infection which was
properly diagnosed on 14th June. It is of course possible that smoke
inhalation might have aggravated his symptoms from this, but I would only be
prepared to reach such a conclusion on the back of, at the very least, compelling
plume modelling evidence supporting an above threshold exposure.
Mr Steven
Woolvine
423.
Mr Woolvine was born on 2nd June 1984. He lives 2.59km from
the Sonae plant, and works as a customer service advisor at a location 1.65km
from the fire.
424.
Mr Woolvine has a history of hay fever, childhood eczema and dry skin
complaints. He is a moderate smoker.
425.
Mr Woolvine’s solicitors throughout have been Walter Barr. There are two
questionnaires relevant to his claim. Walter Barr told Mr Woolvine that this was
due to “administrative error”. The first questionnaire, dated 8th
August 2013, was completed and signed by Mr Woolvine. The second questionnaire,
dated 16th September 2013, was neither signed nor completed by him.
It contains several errors, and Mr Woolvine told me on oath that the signature
is not his. I accept his evidence. It follows that Walter Barr, or their agents,
have forged Mr Woolvine’s signature. This is a serious matter, and I direct
that a copy of his judgment be sent to the Solicitors Regulation Authority for
investigation of this issue.
426.
According to the first questionnaire, Mr Woolvine developed symptoms “right
away” and these comprised cold sores, a cough, chapped lips, a chest
infection and an eczematous rash. He claimed to have received medical treatment
at his GP surgery. This questionnaire is vague and unsatisfactory.
427.
Mr Woolvine’s witness statement does provide further detail. He said
that he developed a range of breathing, eye and skin problems in consequence of
the fire. They were particularly bad for the first couple of weeks, and took
approximately two months to resolve.
428.
Under cross-examination, Mr Woolvine accepted that he did not make the
connection between the fire and his symptoms until April 2013. He said that his
eye and chest symptoms resolved within two weeks, but it took two months for
the skin problems to recover.
429.
Mr Woolvine saw his GP on 8th July 2011 in relation to an
unrelated matter. He accepted that his questionnaire was incorrect in relation
to medical treatment, and explained that he had misunderstood it.
430.
Mr Woolvine was an unimpressive witness. Counsel began to fathom the bottom
of his case during this sequence of cross-examination:
“Q. Why didn't you go to the GP before 8 July, if you had
the symptoms you've talked about?
A. Because the symptoms that I had, I felt were manageable. I
don't want to go to the GP about every little thing, because I obviously go
quite a lot with regards to my depression and anxiety. I don't want to bombard
him with every little thing.
Q. No. So your cough never got so bad that you thought, well,
I really need to go and see a doctor?
A. No.
Q. Nor your shortness of breath?
A. No. Because at that time my shortness of breath, initially
I put it down to smoking, until it carried on for a couple of weeks, and then,
because of the other symptoms I got, I related it to the fire.
Q. It's just it was suggested at one point in the papers
[the account given by Mr Woolvine to Dr Hardy] that at one point you got so
breathless you had to sit down on a wall when you got to the church because you
were too breathless; is that right or not?
A. Yes. That's correct.
Q. If you really had that symptom at this time, you would have
gone to the GP, wouldn't you?
A. No, because, as I say, initially, I did put it down to smoking
and I did try and cut down at that stage, and after the two weeks it did ease
off.
Q. So when you cut down the cigarettes, the symptoms reduced?
A. Yes, but I've never had problems -- I've smoked for 10, 12
years, on and off, so I've never experienced problems like that before, and it
was just a bit coincidental that that happened at that period.
Q. The association you made between your symptoms and the fire
came very much later, didn't it? The association in your mind that the fire
may have caused problems came much later?
A. When I properly thought about it, yes.”
431.
In my judgment, Mr Woolvine grossly exaggerated his symptoms to Dr
Hardy, and he has also given an exaggerated account to me. I entirely accept
that this conclusion does not rule out the possibility of less severe symptoms
resulting from exposure to the smoke plume, which symptoms may have crossed the
threshold of actionable injury. However, as with other Test Claimants in his
position, Mr Woolvine’s difficulty is that he has to invoke something other
than his oral evidence to persuade me of that proposition.
432.
Having reviewed the evidence of the Test Claimants, and reached
provisional conclusions in relation to many of them, this is now the
appropriate moment at which to return to the plume modelling evidence.
THE
REMODELLING BY THE PLUME MODELLERS: RESULTS AND DISCUSSION
433.
On 7th July 2015 the results of CERC’s plume remodelling
exercise became available, and I invited further written submissions from the
parties to be provided within seven days.
434.
It is clear from Appendix 2 that CERC has followed my directions to the
letter. I have included, unedited, their explanations of their work, for ease
of comprehension. CERC’s results may be summarised as follows.
435.
Looking first of all at acrolein, it is clear that the majority of the
Test Claimants were exposed to levels greater than the odour recognition
threshold for many hours, the maximum being 44 hours (for Shaun West). The
minimum levels of hourly exceedances are for Jessica Alexander (6 hours), Kelly
Colebourne (2 hours), Karen Court (3 hours),
(4 hours), Teri
O’Brien (3 hours), James Reece (zero) and Steven Woolvine (2 hours). However,
as I have already said the odour recognition threshold is not a health
threshold; for that, and as an indicative starting-point, I have taken a value
of 146 μg/m³ for acrolein. The maximum theoretical hourly concentration
for any Test Claimant is 12.01μg/m³, i.e. more than 10 times below this
level. In fact, this Test Claimant is Peter Shaw who happened not to be at work
on that day, and so was not exposed to such a dose. The second highest
concentration is 9.48 μg/m³ (for Shaun West); for the vast majority of the
Test Claimants the exposures are below 3 μg/m³. I appreciate that the 146
μg/m³ threshold is a trigger value, and not an hourly mean, but given the
nature of this fire I doubt whether over relatively short periods of time this
makes a significant difference. It would only have done so if the wind had changed
over the course of any relevant hour.
436.
A consideration of the 8-hour and 15-minute threshold values for
acrolein of 237.5 μg/m³ and 712 μg/m³ respectively (see paragraph 142
above) demonstrates that all the Claimants come nowhere near these figures.
437.
The position is very similar as regards the total aldehydes. In this
instance, there are no examples of hourly exposures above the 500 μg/m³
threshold; indeed, the maxima are 41.0 (for Gary Mangan), 63.2 (for Peter Shaw
– not that he was there), and 49.9 (for Shaun West).
438.
As regards the PM10s, the position is less unfavourable from
the Claimants’ perspective, but still not propitious. Here, I have taken the
COMEAP trigger value of 107 μg/m³. In their remodelling, CERC has included
the Briery Hey background concentrations because this was in accordance with my
directions and ordinary tortious principles. For the vast majority of the Test
Claimants, their maximum exposures were on 17th June 2011, and their
highest recorded level was 100 μg/m³ (for a single hour – as to which, see
paragraph 443 below). The modelling for these Claimants does not show two
consecutive hours’ exceedances; indeed, in most instances the hourly exposures
were in the range of 10-50 μg/m³ (and typically within the band of 20-30
μg/m³) - in other words, at or scarcely above the background
concentrations recorded at Briery Hey. There are a limited number of Test Claimants
who fare somewhat better (in the forensic sense) with regard to the PM10s.
On 12th June, Gary Mangan incurred three consecutive hours’ exposures
of 103.6, 114.8 and 101.9 μg/m³ respectively. However, COMEAP would not
have placed him at risk inasmuch as he was not exposed to two consecutive hours
above 107 μg/m³. On 10th June, Peter Shaw (had he been at work)
would have been exposed to a maximum concentration of 140.1 μg/m³. He
would not been exposed to two consecutive hours over 107 μg/m³. On 12th
June, Shaun West was exposed to two sets of three consecutive hourly
concentrations which were very close to, or above, the 107 μg/m³ level. On
17th June he was exposed to one single hour’s concentration of 100.9
(although on that occasion the Briery Hey background level was high – 100.0).
439.
As regards the PM2.5s, the position is broadly similar.
Strictly speaking, Gary Mangan cannot demonstrate exposures to levels above the
COMEAP trigger value of 74 μg/m³ (for two consecutive hours), but he comes
extremely close. Shaun West was above the trigger value on two occasions on 12th
June. No one else threatens these levels.
440.
CERC has also calculated the 24-hour mean concentrations for the five
most heavily exposed Test Claimants. For Messrs Shaw and Swift, and Master
Bradley Woods, their exposures were well below the CERC guideline values for
the PM10s (of 51 μg/m³ for vulnerable persons and 76 μg/m³
for non-vulnerable) and for the PM2.5s (of 36 μg/m³ for
vulnerable persons and 55 μg/m³ for non-vulnerable). Moreover, their
exposures were not significantly above the Briery Hey background levels. However,
on 12th June Gary Mangan’s 24-hour mean concentrations were 54.3
μg/m³ for the PM10s and 35.8 μg/m³ for the PM2.5s.
Likewise, on the same day Shaun West’s mean concentrations were 65.6 μg/m³
and 45.0 μg/m³ respectively. Thus, it is open to them argue that there
were certainly in the vicinity or “ball-park” of the 24-hour thresholds,
depending on whether they should be regarded as vulnerable.
441.
It is no accident that Gary Mangan and Shaun West were the most heavily
exposed: they live relatively close to the Sonae plant. Interestingly, the
comparable data for Dawn Bunting - as the crow flies, being the closest of all
the Test Claimants to the source of the emissions - demonstrate a materially
different pattern. Save for 17th June, her exposures to the PM10s
were broadly similar to the bulk of the Test Claimants’, namely not
substantially above background concentrations. The fact that her home is
approximately 200m south of Messrs Mangan and West materially affects her
exposure levels. When one then examines the positions of Paul McLoughlin,
Bradley Woods and Kathleen Tully, being the sub-group of Test Claimants next
closest to the plant, their exposures to the PM10s and the PM2.5s
were scarcely distinguishable from those of the remainder, and much lower than
Messrs Mangan’s and West’s. This exercise shows that only a very small coterie
of Claimants living north-west of the plant were close to being within the
“scientific” envelope of risk, and then only for relatively brief periods on 12th
June (I exclude from account 17th June in relation to Shaun West,
owing to the high background levels).
442.
The contour maps within Appendix 2 illustrate the same point in a
different way. In relation to the micro-particles, these maps show that anyone
living further away from the plant than Gary Mangan received no exposures
higher than the COMEAP trigger values. On my reckoning, a maximum of 250
individuals could have been living within the outer contour line. Their cases
have not been individually examined, but it is possible that some of these
could demonstrate two consecutive hours’ exposure above the COMEAP trigger
values. That, without more, would not be sufficient to prove actionable injury,
but it would at least be a modest platform. Put slightly differently, such
individuals might have the makings of a claim, but success would depend
on their personal circumstances. I return to this issue at paragraph 465 below.
443.
In his closing arguments delivered upon the conclusion of the oral
evidence, Mr Kent submitted that the Briery Hey monitoring station did not show
a “spike” in PM10s in consequence of the fire. Mr Redfern did not
contradict that submission the following day, and it is borne out by the
remodelling data. For example, as regards those Test Claimants who live
nearest to Briery Hey, namely Jessica Alexander, James Glascott and Julie
Carney, there is no evidence of any “spike” once the known Briery Hey values
are removed from account. Further, I agree with Mr Kent that the 100 μg/m³
maximum value consistently referable by the remodelling to 17th June
must be attributed to background levels rather than to the fire, and that the
same analysis applies to the PM2.5s on 5th July, where
the remodelled value is about 66 μg/m³.
FINAL
ANALYSIS, SYNTHESIS AND CONCLUSIONS
444.
Viewed in isolation, the scientific evidence in this case does not begin
to support these claims, save possibly for those of Gary Mangan and Shaun West.
Indeed, viewed in those terms this evidence demonstrates that virtually all the
Test Claimants could not have suffered actionable injury.
445.
The key question which arises is whether I should be lowering the
exposure thresholds to reflect scientific uncertainty, the difference between
the scientific and the legal standards of proof, the quality of the Test
Claimants’ lay evidence and/or the views of Dr Hardy, Mr Swift and Mr Clearkin.
446.
The matters I have identified as being potentially to the Claimants’
advantage need to be addressed both individually and cumulatively.
447.
Plainly, we are not in the realm of what might be called hard-edged
science. An element of uncertainty has afflicted the exercise at every stage:
as to Dr Mitcheson’s heat release rates; the selection of the appropriate
emission factors; the toxicology (at these low-exposure levels); and the plume
modelling. However, three points need to be made. First, in relation to these
issues I have applied a liberal approach throughout this judgment: that is to
say, an approach which favours the Claimants where the evidence permits it.
Secondly, the vast majority of the Test Claimants have fallen a long way short
of demonstrating any significant exposures. Thirdly, there is no obvious reason
why the Claimants should be the greater victims of scientific uncertainty than
the Defendant. In my view, uncertainty is likely to be normally distributed.
448.
I have mentioned the scientific uncertainties in connection with the
ascertainment of the toxicological thresholds for low exposures. A related
question arises as to whether the thresholds should be lowered to reflect
pre-existing vulnerability. Many of the Test Claimants did not enjoy good
general health, despite some of their assertions to the contrary. Many may have
been prone to respiratory problems, and all those who were seen by the
ophthalmologists have current signs of meibomian gland dysfunction. A number of
Test Claimants, in particular Edmund Kenny, Kelly Colebourne and Annette
Farrell, had pre-existing asthma. However, putting that aside for one moment,
there is a lack of any solid, quantitative basis for making a discount for vulnerability.
Many Claimants might have been vulnerable, but there is no proper means of
assessing or quantifying this. Dr Hardy asserted that those without
pre-existing pathologies tended to recover within 3-6 weeks of exposure,
whereas those who were vulnerable required 3-6 months; but that assertion is
simply not borne out by a close examination of the circumstances of their
individual cases, or indeed a proper identification of how and why they were
“vulnerable”. In any event, the level of discount must be an exercise in
speculation, and for the vast majority of Test Claimants it would have to be
very considerable for them to get anywhere. I note too that the differences
between the COMEAP thresholds for vulnerable and non-vulnerable individuals are
not great, and certainly well short of the magnitudes which would be required
to avail any vulnerable Test Claimant.
449.
A related point is that the available evidence fails to demonstrate any
dose-related response. Listening as I did to all the Test Claimants give their
evidence, the accounts they gave of the smoke plume and of the nature and
severity of their symptoms bore no relationship with their modelled exposures.
The smell and duration of the smoke was described in more or less exactly the
same way irrespective of location. Indeed, I might be forgiven for thinking
that some of the Test Claimants who in fact lived the furthest away from the
plant were almost adjacent to it. Overall, the claimed symptoms appeared to be
independent of exposure and dose. It was as if the Test Claimants had
experienced a monolithic phenomenon. I appreciate that human beings differ, but
I would expected to have heard accounts which varied according to the now
ascertained doses.
450.
Secondly, I do not consider that the application of a lower standard of
proof requires me to approach the scientific evidence in any different way,
save to recognise the scale of the potential uncertainties. I have already
addressed that issue in paragraph 447 above. Where the law differs from the
science is the weight it chooses to accord to lay evidence. This brings me to
the third point.
451.
In my judgment, the lay evidence viewed as a whole was unimpressive. It
was vague, impressionistic, imprecise, sometimes inconsistent with the known
behaviour of the smoke plume, and often internally inconsistent. Only three of
the Test Claimants gave evidence which impressed me as being potentially
reliable. Given that no one appears to have kept a contemporaneous record of
his or her experiences, this generic failure to provide a coherent, consistent
account of what occurred is hardly surprising, but in my judgment cannot be a
factor in the Claimants’ favour.
452.
Had there being a critical mass of impressive, reliable lay evidence
from the Claimants, I might have been prepared to revisit the toxicological
thresholds and the plume modelling evidence. In the absence of these desiderata,
I have absolutely no proper basis for lowering the bar.
453.
The three Test Claimants who did impress me were Messrs Dunn, Kenny and
McLoughlin. They all live north-west of the Sonae plant, but some considerable
distance away. Mr Dunn, in many ways the most impressive witness, lives 2.3km
away. His exposures were modest. Mr McLoughin gave quite convincing evidence in
relation to his skin problems, but in the end I cannot accept that the science
could be so wrong that he could be right. Mr Redfern submitted that the absence
of any relationship between the good cases/witnesses and the modelled exposures
somehow avails the Claimants, but in my judgment the true position is exactly
the converse.
454.
This brings me to the “constellation of symptoms” effect, and Dr Hardy’s
eloquent foray into quasi-epidemiology (Mr Swift and Mr Clearkin were less
impassioned, but gave evidence to like effect). The difficulty with these
arguments is that they entail an overly generous and macroscopic view of the
Test Claimants’ evidence. Ultimately, they are founded on the apparent temporal
association. What I have to call this ersatz epidemiology falls away as soon as
the individual cases are scrutinised with the care they deserve in a forensic
setting. As soon as that process occurred, the inconsistencies and weaknesses
in most of the Test cases became evident. Furthermore, as soon as the plume
modelling evidence is factored into the equation – as it has never been by the
Claimants’ clinical team – the claims become weaker still. In my judgment,
these experts have sought to discern a constellation by gazing hopefully into
the sky, without taking time to look closely at the individual stars.
455.
The possibility arises that the science is just plain wrong, and that in
many years’ time a proper epidemiological study will prove that the residents
of Kirkby were right all along. I cannot exclude that possibility. However, I
have to use the best scientific evidence that is available, and then balance it
against the lay evidence. Performing that exercise, I am satisfied on the
balance of probabilities that the lay evidence I have heard cannot outweigh the
combined effect of the science. Indeed, I would put the matter higher than that
– in my view, the lay evidence creates no significant dent into the science,
the latter emerging unscathed.
456.
In my judgment, there are serious weaknesses in the Claimants’ overall
case which I need to make explicit. I have already alluded to some of them.
First, the case is severely damaged by the delay in bringing these claims and
the absence of any contemporaneous evidence. Had 16,000 people really suffered
symptoms of the severity claimed, one would surely have seen evidence of
complaints to newspapers and to the local council, increases in GP attendances,
and some contemporary record of a problem. None has been brought to my
attention. Secondly, recall bias is always an issue in scientific research
based on retrospective evidence, and this phenomenon is hugely magnified when
one brings into the equation the obvious corollaries of the medico-legal
component. Human beings are naturally susceptible and suggestible, particularly
if they are made to believe that they form part of a coherent group with shared
experiences, and if they risk none of their own resources in bringing a claim.
The standard-form questionnaires asked a series of leading questions. Many of
the questionnaires examined in the context of the Test Claimants were shown to
be inaccurate and exaggerated, calling into question the objectivity and
integrity of the whole process. Nor does the whole set up of pop-up shops and
cold-calling of potential Claimants inspire any degree of confidence.
457.
My concerns in this regard are heightened by the fact that two of the
questionnaires were shown to bear forged signatures, and that whole families
have been signed up, apparently willy-nilly, to the group. The Defendant has
drawn my attention, through the evidence of Ms Adele Wilson, to the sort of
behaviour that has been going on. According to paragraph 6 of her witness
statement:
“In approximately January 2012, I was at work when I received
a telephone call from my partner, Greg Taft. Greg told me that a lady had
visited our home in Tower Hill who had told him that she was acting on behalf
of GT Law solicitors who was dealing with claims against Sonae relating to
smoke inhalation from the fire in June 2011. She said that Sonae had accepted
liability and that compensation had already been paid out to claimants. The
lady was attempting to encourage Greg to sign up in order to put forward a
claim against Sonae for symptoms relating to smoke inhalation. Greg told her
that he was not interested in making a claim and asked her to leave.”
Ms Wilson was not cross-examined
about this evidence, which is admittedly hearsay. However, there is no reason
to doubt its accuracy. The information Mr Taft was given was inaccurate – there
had been no admission of liability, and no money had been paid. Misleading
information of this sort had the obvious tendency to encourage the bringing of
claims, on the basis that the Defendant was a soft target and this was easy
money. That this information was understood in exactly this way is revealed by
the terms of the Facebook posts referred to at paragraphs 9, 10 and 12 of Ms
Wilson’s witness statement, as well as by the evidence in Leon Swift’s case. I
strongly deprecate this sort of practice. Not merely does it sail close to the
wind in terms of its professional propriety, it is severely counter-productive
as and when the case comes to trial.
458.
I have considered the possibility of an alternative narrative pursuant
to which a number of Claimants might succeed. It runs like this. The GP records
are all incorrect/inaccurate; the Claimants have short-changed themselves in
terms of their timings and the exact sequence of events (they must not be
criticised for not remembering); when all the inconsistencies, exaggerations
and excrescences are stripped away, there lies a hard kernel of truth – a truth
which says that many of the Claimants did suffer actionable injury, albeit
maybe not for as long as they have claimed. In many cases, so this argument
might run, Claimants did sustain exacerbations of pre-existing conditions.
459.
Mr Redfern did not advance submissions along precisely these lines, for
obvious reasons – he could not be heard to do so. However, it is clearly right
that I should be considering this alternative viewpoint. Apart from the
scientific evidence, which strongly tells against such a narrative being
correct, there is this added difficulty. At its highest, the narrative I am
postulating might just be true, but there is no basis for holding that
it is probably true. Furthermore, there is no sensible or remotely
plausible basis for concluding that so much hard evidence, including the
contemporaneous GP record, is incorrect, and it simply would not be right to
make findings of fact based on a version of events that does not match the
evidence the Claimants chose to give.
460.
I return to the cases of the three Test Claimants whose evidence was, as
I have said, prima facie reliable. Given that the scientific evidence is
so heavily against them, there is in my judgment no proper, principled basis
for allowing their claims. That they were good witnesses is insufficient: that
does not preclude their being mistaken (in my judgment, they are
mistaken) and/or being sucked into the vortex of suggestibility created by the
claims environment which obtained in Kirkby in 2013.
461.
The strongest case out of the 20 is Mr Edmund Kenny’s. He was an
impressive witness and also immensely likeable. He did not exaggerate his
symptoms in any way. It is clear that he did suffer a flare-up in his asthma
symptoms in June 2011, and that he told his GP that he suspected a causal link.
He accepted in cross-examination that he did not know whether his suspicions
were correct. Ultimately, it is not his view which counts but the opinion of an
expert in respiratory diseases. Plainly, neither Dr Hardy nor Dr Hind made a
contemporaneous examination. Mr Kenny has the benefit of no contemporaneous
medical examination, and retrospective diagnosis is problematic. His exposures
were low: scarcely above the background levels for the micro-particles (I have
deduced that the majority of the “spike” on 17th June, and certainly
the single 100 μg/m³ reading, is unrelated to the fire), and a maximum
hourly concentration of 1.45 μg/m³ for acrolein. In my judgment, he fails
to satisfy me of a causal link.
462.
As for Gary Mangan and Shaun West, on account of their exposures they
stood the best chance of proving actionable injury in consequence of the Sonae
fire, but in my judgment their claims fail nonetheless. Mr Mangan is a fit
young man who could not convincingly be described as vulnerable. The plume
modelling measures out-of-door exposures, and Mr Mangan did not tell me that he
ventured outside at the relevant time. His case lies at the margins of the PM10
trigger levels, but is considerably lower than the threshold levels for the
irritants. In any event, the better view on the balance of probabilities is
that he suffered from a coincidental upper respiratory tract infection. Mr West
was not a good witness, and there were clear inconsistencies and exaggerations
in his account. He too could not be described as vulnerable. The generic
considerations set out at paragraph 465 below also apply.
463.
Where does the truth lie in all of this? It is not my function to say
what the truth is; my role is limited to deciding whether these claims succeed
or fail, applying standard legal methods. However, out of fairness to the
Claimants my conclusions about what happened in June 2011 are as follows. There
is no unified field theory or overarching explanation. The majority of
Claimants experienced an extremely nasty, unusual smell and some may have been
concerned about the possible consequences, albeit not so concerned to seek
medical advice. Many Claimants - it is not clear to me how many – suffered some
symptoms of shortness of breath, lacrimation and soreness of the throat. These
symptoms were short-lived, as were any significant quantities of smoke. For the
majority of the time, the smoke was blowing away from the plant. The better
view on all the available evidence is that these symptoms did not exceed the
hurdle the law sets for actionable personal injury, because they were symptoms
of irritation rather than of inflammation. It is difficult to say for how long
the smoke and these mild symptoms lasted, but I have in mind a maximum period
of about one week. Many months later – it is unclear exactly how and why - lawyers
arrived on the scene and sensed the opening of a business opportunity. It
proved not very difficult to recruit willing Claimants to the group, not least
because there was a lot of ill-feeling in the neighbourhood directed towards
Sonae, and many people genuinely believed that they must have been harmed in
some way. The legal process preyed on human susceptibility and vulnerability,
and the rest is history.
464.
I accept that for a period of time, probably 2-3 days, there were deposits
of ash and dust which proved recalcitrant and pervasive. It is regrettable that
Dr Mitcheson was not cross-examined about this, but I am not prepared to
disbelieve the entirety of the Claimants’ evidence on this point. However, I
should not be understood as excluding from account the probability of poetic
licence and exaggeration.
465.
Previously, I have referred to a maximum of 250 people living within the
outer contour line on the CERC contour maps marking exposures to the
micro-particles at above the COMEAP trigger values (albeit, I reiterate, not
for two consecutive hours). I do not know how many of these are Claimants. I
cannot exclude the possibility that some of these might have suffered personal
injury, but I have three observations. First, the Claimants have only asked me
to examine one individual within this sub-cohort, namely Gary Mangan.
Presumably, he was selected because he was representative of the others, and/or
because those advising the Claimants believed that he would be a good witness. My
observation would be that if there were stronger cases within this sub-group,
they should have been put forward as Test claims. Secondly, I suspect that only
those with pre-existing conditions might have had a realistic prospect of
proving actionable damage. I should not be interpreted as overlooking the fact
that all these individuals fell vastly below the relevant health threshold for
acrolein, and well below the PM10 levels at which significant
numbers of children complained of symptoms as demonstrated in the Californian
Wildfires study (see paragraph 157 above). Thirdly, after a multi-million pound
group action which has failed, in my judgment it would scarcely be proportionate
to start examining even a handful of these cases, in the pursuit of identifying
what would be, at best, modest claims. In my judgment, the Claimants’ chance
has come and gone.
466.
There are clear lessons to be learned from this litigation. The
Claimants’ legal team should have worked out the science at a much earlier
stage. Working on a reasonable best case scenario (as I have done), sound
toxicological evidence (which they had at their disposal) and plume modelling,
they should have investigated whether the case stacked up. Instead, at all
material times, the Claimants’ legal team appear to have wanted to make a virtue
out of uncertainty – perhaps because they clung to the notion that the
litigation would settle. Alternatively, they believed that the judge would not
be that interested in the science, and/or they placed undue faith on the likely
cogency of the lay evidence.
467.
On all counts, they have been proven wrong. Further, rather than give
the Claimants the opportunity to rely positively on uncertainty, I have taken
proactive steps to enable further modelling to be undertaken, thereby creating
as robust an evidential basis as human ingenuity may currently provide. The
Claimants have lost no money, but their expectations, always unsustainable in
my view, have not been fulfilled. I regret that their hopes were raised in the
first place.
468.
These claims must all be dismissed, and judgment must be entered for the
Defendant.
APPENDIX 1
CLAIMANT NUMBER
CLAIMANT NAME
POSTCODE
DISTANCE FROM SONAE (KM)
2
JESSICA ALEXANDER
L32 8TX
1.56
2
JESSICA ALEXANDER
COLLEGE
L33 8XF
1.42
3
TRACEY BEATHAM
L33 2DE
1.96
7
DAWN BUNTING
L33 6XB
0.44
10
JULIE CARNEY
L32 9PQ
1.94
13
KELLY COLEBOURN
L32 7PZ
2.16
14
KAREN COURT
L33 4DH
2.27
17
TERENCE DUNN
L33 4DP
2.31
18
ANNETTE FARRELL
L33 1UW
1.81
18
ANNETTE FARRELL WORK
L32 9PP
2.27
20
FRANCIS GLASCOTT
L32 9QD
2.1
23
EDMUND KENNY
L33 1YF
1.8
24
GARY MANGAN
L33 9XF
0.53
25
PAUL MCLOUGHLIN
L33 1WD
1.61
27
TERI O’BRIEN
L32 2AR
2.63
28
JAMES REECE
L32 4SP
3.01
28
JAMES REECE WORK
L32 9HN
2.87
30
PETER SHAW WORK
L33 7TJ
0.55
33
LEON SWIFT
L33 7UY
0.88
35
KATHLEEN TULLY
L33 1UG
1.53
37
SHAUN WEST
L33 9UJ
0.58
39
BRADLEY WOODS
L33 1RF
1.09
40
STEVEN WOOLVINE
L32 7RP
2.59
40
STEVEN WOOLVINE WORK
L33 7RX
1.65
APPENDIX 2
Sonae GLO: Further Modelling
Contents
Following
the instructions of Mr Justice Jay further modelling by CERC is presented in
the accompanying seven documents. As specified by Mr Justice Jay, the modelling
is based on:
1550 tonnes of material consumed in fire;
The heat release and burning rates
specified by Dr Mitcheson, with 10% subtracted to account for radiative
heat loss
An emission factor of 114 mg/s/MW for
acrolein for all stages of the fire, compared against an odour threshold
of 0.38 µg/m³ and a health threshold of 146 µg/m³
An emission of 600 mg/s/MW for total
aldehydes for all stages of the fire, compared against a health threshold
of 500 µg/m³
PM10 emission factors of 27.5
g/kg for Stage 2 and 12.5 g/kg for Stages 1 and 3 of the fire, compared
against the COMEAP High trigger value of 107 µg/m³. Assuming 0.8%
contamination, as specified by the Mr Justice Jay, the PM10
emission factors used are 27.61 g/kg for Stage 2 and 12.73 g/kg for Stages
1 and 3
PM2.5 emission factors of 22.6
g/kg for Stage 2 and 10.25 g/kg for Stages 1 and 3 of the fire, compared
against the COMEAP High trigger value of 74 µg/m³. Assuming 0.8%
contamination, as specified, the PM2.5 emission factors used
are 22.64 g/kg for Stage 2 and 10.39 g/kg for Stages 1 and 3
The agreed meteorological data, of Dr Wild
and Mr Lynagh (Lynagh/Wild dataset). CERC and Envirobods agreed that in
order to make full use of the Lynagh/Wild dataset, hourly inputs for the
model should be derived by calculating hourly averages from the 10-minute
data recorded every 15 minutes, as detailed in CERC’s supplementary report
dated 22nd September 2014. The Lynagh/Wild dataset only
provides data until 1st July 2011, therefore to consider whole
period of the fire meteorological data from the Met Office Crosby station
were used from the 1st July 2011, up to and including the 7th
July 2011
Modelled PM10 and PM2.5
concentrations include background concentrations using values measured at
the Briery Hey monitoring site. This monitoring data includes a 43 hour
gap in PM2.5 monitoring between the 10th June 2011
and 12th June 2011. PM2.5 concentrations for this
period were estimated from the measured PM10 concentrations,
assuming a PM2.5/PM10 ratio of 0.45. This ratio is
the ratio of the mean concentrations over the period of the fire, where
both PM2.5 and PM10 concentrations are recorded.
Based
on this model set-up, specified by Mr Justice Jay and outstanding elements
agreed between the dispersion modelling experts, the following outputs are
provided:
Document 1: Contour maps of the number of
hours exceeding the odour threshold for acrolein and the COMEAP High
trigger values for PM10 and PM2.5. Contours for
exceedences of the health thresholds for acrolein and total aldehydes
could not be plotted because modelled concentrations are not sufficiently
high.
Document 2: Tables of number of hours
exceeding the thresholds of PM10, PM2.5, acrolein
and total aldehydes at the locations of the 20 Test Claimants, along with
modelled maximum hourly concentrations at these locations.
Document 3: Tables of modelled PM10
and PM2.5 concentrations for particular days and Test Claimant
locations, as specified by Mr Justice Jay.
Document 4: Time series histograms of
hourly ‘unit discharge’ concentrations compared against the specified
acrolein and total aldehydes thresholds for the locations of the 20 Test
Claimants.
Document 4a: Time series histograms of
hourly ‘unit discharge’ concentrations, plotted for a lower concentration
range than used in Document 4, to show modelled concentrations more
clearly and allow better comparison against the acrolein odour threshold.
Document 5: Time series histograms of
hourly PM2.5 concentrations for the locations of the 20 Test
Claimants, compared with the COMEAP High trigger value of 74 µg/m³.
Document 6: Time series histograms of
hourly PM10 concentrations for the locations of the 20 Test
Claimants, compared with the COMEAP High trigger value of 107 µg/m³.
Sonae GLO: Further Modelling
1. Contour maps of number of hours exceeding threshold values
This
document presents the following contour maps of modelled number of hours for
which hourly average concentrations exceed specified threshold values:
·
Acrolein
concentrations exceeding the odour recognition threshold of 0.38 µg/m³
·
PM10
concentrations, including background concentrations using measured data from
the Briery Hey monitoring site, exceeding the COMEAP High trigger value of
107 µg/m³.
o Two plots are presented for PM10:
the first is based on 100 m resolution model output for an output area of 9.4
km x 6.6 km; and the second is based on 50 m resolution model output for
an output area of 5 km x 4 km, producing better resolution of the modelled
exceedence area.
·
PM2.5
concentrations, including background concentrations using measured data from
the Briery Hey monitoring site, exceeding the COMEAP High trigger value of
74 µg/m³.
o Two plots are presented for PM2.5:
the first is based on 100 m resolution model output for an output area of 9.4
km x 6.6 km; and the second is based on 50 m resolution model output for
an output area of 5 km x 4 km, producing better resolution of the modelled
exceedence area.
Contour
maps for the acrolein health threshold of 146 µg/m³ and the total aldehydes
threshold of 500 µg/m³ have not been produced because these thresholds are not
exceeded beyond the boundary of the Sonae factory.
The
maximum modelled acrolein concentration across the output area is 95.6 µg/m³,
below the health threshold, therefore a contour map cannot be produced since
there are no exceedences of the threshold across the model output area.[1]
The
maximum modelled total aldehydes concentration across the output area is
502.6 µg/m³, just above the threshold of 500 µg/m³. This maximum
concentration is modelled with the 50 m resolution output and is the only point
across the output area above the threshold value. This output point is located
within the boundary of the Sonae factory.
To
minimise differences in the appearance of contour plots due to contouring
methodology, CERC and Envirobods agreed to use Golden Software’s Surfer package
for contour plotting, using the Inverse Distance Weighting interpolation
method.
Sonae GLO: Further Modelling
2. Tables of modelled concentrations at the locations of the 20 Test
Claimants
Table
1 lists the locations of 20 Test Claimants. Two tables then follow presenting
the model outputs for the locations of the 20 Test Claimants:
Table
2 presents the number of hours exceeding the COMEAP High trigger values for PM10
and PM2.5 and the maximum predicted hourly concentrations for these
pollutants. The number of exceedences and maximum hourly concentrations include
the modelled contribution from the fire and background concentrations using
measured data from the Briery Hey monitoring site.
Table 3
presents the number of hours exceeding acrolein thresholds for odour
(0.38 µg/m³) and health (146 µg/m³), and the health threshold for total
aldehydes (500 µg/m³).
Table 1:
Locations of the 20 Test Claimants
ID
Name
Postcode
Coordinates
of location
(Ordnance
Survey British National Grid)
Eastings
(m)
Northings
(m)
2
Jessica
Alexander
L32 8TX
341941
397952
3
Tracey Beatham
L33 2DE
340940
399888
7
Dawn Bunting
L33 6XB
342398
399215
10
Julie Ann
Carney
L32 9PQ
341428
397883
13
Kelly
Colebourn
L32 7PZ
341955
397276
14
Karen Court
L33 4DH
341351
401049
17
Terence Dunn
L33 4DP
341193
400972
18H
Annette
Farrell (home)
L33 1UW
341158
400143
18W
Annette
Farrell (workplace)
L32 9PP
340868
397737
20
Francis
Glascott
L32 9QD
341311
397760
23
Edmund Kenny
L33 1YF
341130
399991
24
Gary Mangan
L33 9XF
342431
399666
25
Paul
McLoughlin
L33 1WD
341259
399931
27
Teri O’Brien
L32 2AR
340096
399491
28H
James Reece
(home)
L32 4SP
339918
398434
28W
James Reece
(workplace)
L34 9HN
343241
396479
30
Peter Shaw
L33 7TJ
343172
398968
33
Leon Swift
L33 7UY
343654
399545
35
Kathleen Tully
L33 1UG
341606
400205
37
Shaun West
L33 9UJ
342477
399612
39
Bradley Woods
L33 1RF
342181
400231
40H
Steven
Woolvine (home)
L32 7RP
341239
397200
40W
Steven
Woolvine (workplace)
L33 7RX
342549
397466
Table 2:
Number of hours exceeding COMEAP High trigger values for PM10 and PM2.5,
together with modelled maximum concentrations, at the test case locations.
Modelled concentrations include background concentrations from the Briery Hey
monitoring site.
ID
PM10
(including background concentration)
PM2.5
(including background concentration)
Number
of hours exceeding COMEAP High trigger value
(107
µg/m³)
Maximum
hourly concentration (µg/m³)
Number
of hours exceeding COMEAP High trigger value
(74
µg/m³)
Maximum
hourly concentration (µg/m³)
2
0
100.0
0
66.0
3
0
100.0
0
66.0
7
0
100.0
0
66.0
10
0
100.0
0
66.0
13
0
100.0
0
66.0
14
0
100.5
0
66.0
17
0
100.3
0
66.0
18H
0
100.0
0
66.0
18W
0
100.0
0
66.0
20
0
100.0
0
66.0
23
0
100.0
0
66.0
24
2
114.8
2
79.9
25
0
100.0
0
66.0
27
0
100.0
0
66.0
28H
0
100.0
0
66.0
28W
0
100.0
0
66.0
30
1
140.1
1
112.2
33
0
100.0
0
66.0
35
0
100.1
0
66.0
37
5
135.8
6
96.4
39
0
101.0
0
66.0
40H
0
100.0
0
66.0
40W
0
100.0
0
66.0
Table 3: Number
of hours exceeding odour and health thresholds for acrolein, and health
threshold for total aldehydes at the test case locations. Modelled maximum
concentrations for these pollutants are also presented.
ID
Acrolein
Total
aldehydes
Number
of hours exceeding threshold value
Maximum
hourly concentration (µg/m³)
Number
of hours exceeding health threshold
(500
µg/m³)
Maximum
hourly concentration (µg/m³)
Odour
(0.38
µg/m³)
Health
(146
µg/m³)
2
6
0
0.74
0
3.9
3
16
0
1.37
0
7.2
7
10
0
1.40
0
7.4
10
10
0
1.05
0
5.5
13
2
0
0.59
0
3.1
14
3
0
0.82
0
4.3
17
4
0
1.17
0
6.2
18H
14
0
1.29
0
6.8
18W
4
0
0.96
0
5.1
20
9
0
0.97
0
5.1
23
18
0
1.45
0
7.6
24
36
0
7.78
0
41.0
25
18
0
1.55
0
8.2
27
3
0
0.66
0
3.5
28H
0
0
0.25
0
1.3
28W
0
0
0.30
0
1.6
30
14
0
12.01
0
63.2
33
17
0
2.21
0
11.6
35
11
0
1.83
0
9.6
37
44
0
9.48
0
49.9
39
9
0
1.46
0
7.7
40H
2
0
0.39
0
2.1
40W
2
0
0.49
0
2.6
Sonae Group Litigation: Final Modelling
3. Tables of modelled hourly PM10 and PM2.5
concentrations for specific days and Test Claimants
This
document presents tables of PM10 and PM2.5 concentrations
for the day and Test Claimant combination specified in Table 1. Hourly
concentrations and 24-hour mean concentrations are presented along with
background concentrations from the Briery Hey monitoring site.
Table 4:
Summary of daily PM10 and PM2.5 concentrations tables
presented in this document
Test Claimant ID
Day
Table number
24
10th
June 2011
2
12th June
2011
3
30
10th
June 2011
4
11th
June 2011
5
27th
June 2011
6
33
11th
June 2011
7
15th
June 2011
8
20th
June 2011
9
37
10th
June 2011
10
12th
June 2011
11
17th
June 2011
12
39
10th
June 2011
13
12th
June 2011
14
17th
June 2011
15
Table 5:
Modelled hourly PM10 and PM2.5 concentrations for Test
Claimant 24, 10th June 2011
10/06/2011
Test Claimant 24
Hour (hour ending BST)
Modelled concentrations including background (µg/m³)
Briery Hey background (µg/m³)
PM10
PM2.5
PM10
PM2.5
1
18.3
6.9
16.0
5.0
2
16.0
10.0
16.0
10.0
3
18.0
1.0
18.0
1.0
4
32.6
20.8
17.0
8.0
5
20.0
5.0
20.0
5.0
6
31.5
9.4
31.0
9.0
7
22.0
8.0
22.0
8.0
8
30.0
6.0
30.0
6.0
9
26.0
1.0
26.0
1.0
10
28.0
11.0
28.0
11.0
11
13.6
7.1
11.0
5.0
12
12.0
8.0
12.0
8.0
13
15.0
6.8
15.0
6.8
14
6.0
2.7
6.0
2.7
15
17.0
7.7
17.0
7.7
16
19.0
8.6
19.0
8.6
17
20.0
9.0
20.0
9.0
18
19.0
8.6
19.0
8.6
19
3.0
1.4
3.0
1.4
20
7.0
3.2
7.0
3.2
21
13.0
5.9
13.0
5.9
22
9.0
4.1
9.0
4.1
23
5.0
2.3
5.0
2.3
24
19.0
8.6
19.0
8.6
24-hour mean concentration (µg/m³)
17.5
6.8
16.6
6.1
24-hour
mean concentration excluding background (µg/m³)
0.9
0.7
Table 6:
Modelled hourly PM10 and PM2.5 concentrations for Test
Claimant 24, 12th June 2011
12/06/2011
Test Claimant 24
Hour (hour ending BST)
Modelled concentrations including background (µg/m³)
Briery Hey background (µg/m³)
PM10
PM2.5
PM10
PM2.5
1
16.0
7.2
16.0
7.2
2
21.0
9.5
21.0
9.5
3
20.0
9.0
20.0
9.0
4
18.0
8.1
18.0
8.1
5
21.0
9.5
21.0
9.5
6
20.0
9.0
20.0
9.0
7
32.9
16.9
27.0
12.2
8
64.4
28.2
36.0
5.0
9
42.9
17.9
32.0
9.0
10
103.6
68.4
26.0
5.0
11
114.8
79.2
30.0
10.0
12
101.9
71.9
15.0
1.0
13
49.2
42.2
11.0
11.0
14
68.1
47.8
23.0
11.0
15
32.0
20.4
18.0
9.0
16
35.3
28.4
14.0
11.0
17
22.1
6.0
16.0
1.0
18
75.3
46.8
18.0
0.0
19
82.7
63.1
14.0
7.0
20
87.9
65.4
20.0
10.0
21
95.5
71.3
18.0
8.0
22
109.2
79.9
26.0
12.0
23
59.0
45.1
16.0
10.0
24
10.4
7.3
10.0
7.0
24-hour mean concentration (µg/m³)
54.3
35.8
20.2
8.0
24-hour
mean concentration excluding background (µg/m³)
34.1
27.8
Table 7:
Modelled hourly PM10 and PM2.5 concentrations for Test
Claimant 30, 10th June 2011
10/06/2011
Test Claimant 30
Hour (hour ending BST)
Modelled concentrations including background (µg/m³)
Briery Hey background (µg/m³)
PM10
PM2.5
PM10
PM2.5
1
16.0
5.0
16.0
5.0
2
16.0
10.0
16.0
10.0
3
18.0
1.0
18.0
1.0
4
17.0
8.0
17.0
8.0
5
20.0
5.0
20.0
5.0
6
31.0
9.0
31.0
9.0
7
22.0
8.0
22.0
8.0
8
30.0
6.0
30.0
6.0
9
26.0
1.0
26.0
1.0
10
28.0
11.0
28.0
11.0
11
11.0
5.0
11.0
5.0
12
23.3
17.2
12.0
8.0
13
33.5
21.9
15.0
6.8
14
140.1
112.2
6.0
2.7
15
90.2
67.4
17.0
7.6
16
19.6
9.1
19.0
8.6
17
53.4
36.3
20.0
9.0
18
25.5
13.9
19.0
8.6
19
14.0
10.3
3.0
1.3
20
7.1
3.3
7.0
3.2
21
17.8
9.8
13.0
5.9
22
9.2
4.2
9.0
4.1
23
5.2
2.4
5.0
2.3
24
20.5
9.8
19.0
8.6
24-hour mean concentration (µg/m³)
28.9
16.1
16.6
6.1
24-hour
mean concentration excluding background (µg/m³)
12.3
10.1
Table 8:
Modelled hourly PM10 and PM2.5 concentrations for Test
Claimant 30, 11th June 2011
11/06/2011
Test Claimant 30
Hour (hour ending BST)
Modelled concentrations including background (µg/m³)
Briery Hey background (µg/m³)
PM10
PM2.5
PM10
PM2.5
1
17.0
7.7
17.0
7.7
2
8.0
3.6
8.0
3.6
3
11.0
5.0
11.0
4.9
4
18.1
8.2
18.0
8.1
5
18.0
8.1
18.0
8.1
6
15.0
6.8
15.0
6.7
7
19.1
8.6
19.0
8.6
8
26.0
12.1
25.0
11.2
9
28.1
12.7
28.0
12.6
10
19.6
9.0
19.0
8.6
11
15.0
7.8
12.0
5.4
12
20.1
9.1
20.0
9.0
13
20.6
9.5
20.0
9.0
14
22.1
12.2
16.0
7.2
15
12.6
5.9
12.0
5.4
16
26.8
15.6
17.0
7.6
17
16.3
8.1
14.0
6.3
18
12.2
5.5
12.0
5.4
19
28.5
19.6
10.0
4.5
20
17.2
8.5
15.0
6.8
21
15.5
8.3
12.0
5.4
22
16.1
9.1
11.0
5.0
23
11.0
5.0
11.0
5.0
24
12.0
5.4
12.0
5.4
24-hour mean concentration (µg/m³)
17.7
8.8
15.5
7.0
24-hour
mean concentration excluding background (µg/m³)
2.2
1.8
Table 9:
Modelled hourly PM10 and PM2.5 concentrations for Test
Claimant 30, 27th June 2011
27/06/2011
Test Claimant 30
Hour (hour ending BST)
Modelled concentrations including background (µg/m³)
Briery Hey background (µg/m³)
PM10
PM2.5
PM10
PM2.5
1
37.1
32.1
37.0
32.0
2
26.0
18.0
26.0
18.0
3
36.0
28.0
36.0
28.0
4
29.0
21.0
29.0
21.0
5
29.0
18.0
29.0
18.0
6
37.3
21.3
37.0
21.0
7
43.2
35.1
32.0
26.0
8
35.0
14.0
35.0
14.0
9
33.0
10.0
33.0
10.0
10
35.0
7.0
35.0
7.0
11
31.0
14.0
31.0
14.0
12
45.0
32.0
45.0
32.0
13
41.1
37.1
41.0
37.0
14
37.0
14.0
37.0
14.0
15
29.1
5.0
29.0
5.0
16
27.3
15.2
27.0
15.0
17
21.5
7.4
21.0
7.0
18
19.3
15.2
19.0
15.0
19
22.3
7.3
22.0
7.0
20
17.0
18.0
17.0
18.0
21
23.5
5.4
23.0
5.0
22
17.0
9.0
17.0
9.0
23
25.0
15.0
25.0
15.0
24
21.1
4.1
21.0
4.0
24-hour mean concentration (µg/m³)
29.9
16.8
29.3
16.3
24-hour
mean concentration excluding background (µg/m³)
0.6
0.5
Table 10:
Modelled hourly PM10 and PM2.5 concentrations for Test
Claimant 33, 11th June 2011
11/06/2011
Test Claimant 33
Hour (hour ending BST)
Modelled concentrations including background (µg/m³)
Briery Hey background (µg/m³)
PM10
PM2.5
PM10
PM2.5
1
17.0
7.7
17.0
7.7
2
8.0
3.6
8.0
3.6
3
11.0
5.0
11.0
4.9
4
18.0
8.1
18.0
8.1
5
31.2
18.9
18.0
8.1
6
15.0
6.8
15.0
6.7
7
19.1
8.6
19.0
8.6
8
25.1
11.3
25.0
11.2
9
29.8
14.1
28.0
12.6
10
19.8
9.2
19.0
8.6
11
12.4
5.8
12.0
5.4
12
36.5
22.5
20.0
9.0
13
24.7
12.8
20.0
9.0
14
16.1
7.3
16.0
7.2
15
13.0
6.2
12.0
5.4
16
17.0
7.7
17.0
7.7
17
14.4
6.6
14.0
6.3
18
14.6
7.6
12.0
5.4
19
10.0
4.5
10.0
4.5
20
15.0
6.8
15.0
6.8
21
12.0
5.4
12.0
5.4
22
11.0
5.0
11.0
4.9
23
11.0
5.0
11.0
4.9
24
12.0
5.4
12.0
5.4
24-hour mean concentration (µg/m³)
17.2
8.4
15.5
7.0
24-hour
mean concentration excluding background (µg/m³)
1.7
1.4
Table 11:
Modelled hourly PM10 and PM2.5 concentrations for Test
Claimant 33, 15th June 2011
15/06/2011
Test Claimant 33
Hour (hour ending BST)
Modelled concentrations including background (µg/m³)
Briery Hey background (µg/m³)
PM10
PM2.5
PM10
PM2.5
1
19.0
9.0
19.0
9.0
2
19.0
13.0
19.0
13.0
3
40.0
28.0
40.0
28.0
4
33.0
17.0
33.0
17.0
5
21.0
14.0
21.0
14.0
6
22.0
12.0
22.0
12.0
7
26.0
18.0
26.0
18.0
8
22.0
10.0
22.0
10.0
9
19.0
13.0
19.0
13.0
10
17.0
8.0
17.0
8.0
11
22.0
9.0
22.0
9.0
12
17.0
15.0
17.0
15.0
13
8.3
5.9
6.0
4.0
14
7.0
3.0
7.0
3.0
15
9.0
7.0
9.0
7.0
16
25.1
13.1
20.0
9.0
17
12.7
7.6
12.0
7.0
18
12.9
8.7
12.0
8.0
19
18.5
7.0
16.0
5.0
20
10.0
4.0
10.0
4.0
21
19.2
9.7
11.0
3.0
22
26.8
9.0
17.0
1.0
23
23.8
8.9
19.0
5.0
24
30.2
12.1
24.0
7.0
24-hour mean concentration (µg/m³)
20.0
10.9
18.3
9.5
24-hour
mean concentration excluding background (µg/m³)
1.7
1.4
Table 12:
Modelled hourly PM10 and PM2.5 concentrations for Test
Claimant 33, 20th June 2011
20/06/2011
Test Claimant 33
Hour (hour ending BST)
Modelled concentrations including background (µg/m³)
Briery Hey background (µg/m³)
PM10
PM2.5
PM10
PM2.5
1
43.7
30.2
19.0
10.0
2
44.0
28.6
20.0
9.0
3
22.0
18.0
22.0
18.0
4
21.8
9.1
18.0
6.0
5
17.7
9.6
17.0
9.0
6
21.3
8.3
21.0
8.0
7
21.0
15.0
21.0
15.0
8
41.0
2.0
41.0
2.0
9
32.0
5.0
32.0
5.0
10
18.6
7.5
18.0
7.0
11
26.1
5.1
26.0
5.0
12
21.7
6.6
21.0
6.0
13
16.4
9.3
16.0
9.0
14
21.8
10.7
21.0
10.0
15
21.4
25.2
20.0
24.0
16
19.2
16.0
18.0
15.0
17
12.0
5.0
12.0
5.0
18
15.0
13.0
15.0
13.0
19
17.0
16.0
17.0
16.0
20
21.0
10.0
21.0
10.0
21
19.0
19.0
19.0
19.0
22
31.0
15.0
31.0
15.0
23
25.0
17.0
25.0
17.0
24
32.0
22.0
32.0
22.0
24-hour mean concentration (µg/m³)
24.2
13.5
21.8
11.5
24-hour
mean concentration excluding background (µg/m³)
2.4
2.0
Table 13:
Modelled hourly PM10 and PM2.5 concentrations for Test
Claimant 37, 10th June 2011
10/06/2011
Test Claimant 37
Hour (hour ending BST)
Modelled concentrations including background (µg/m³)
Briery Hey background (µg/m³)
PM10
PM2.5
PM10
PM2.5
1
17.9
6.6
16.0
5.0
2
16.0
10.0
16.0
10.0
3
18.0
1.0
18.0
1.0
4
43.3
29.5
17.0
8.0
5
20.0
5.0
20.0
5.0
6
31.3
9.3
31.0
9.0
7
22.0
8.0
22.0
8.0
8
30.0
6.0
30.0
6.0
9
26.0
1.0
26.0
1.0
10
28.0
11.0
28.0
11.0
11
13.2
6.8
11.0
5.0
12
12.0
8.0
12.0
8.0
13
15.0
6.8
15.0
6.8
14
6.0
2.7
6.0
2.7
15
17.0
7.7
17.0
7.7
16
19.0
8.6
19.0
8.6
17
20.0
9.0
20.0
9.0
18
19.0
8.6
19.0
8.6
19
3.0
1.4
3.0
1.4
20
7.0
3.2
7.0
3.2
21
13.0
5.9
13.0
5.9
22
9.0
4.1
9.0
4.1
23
5.0
2.3
5.0
2.3
24
19.0
8.6
19.0
8.6
24-hour mean concentration (µg/m³)
17.9
7.1
16.6
6.1
24-hour
mean concentration excluding background (µg/m³)
1.3
1.0
Table 14:
Modelled hourly PM10 and PM2.5 concentrations for Test
Claimant 37, 12th June 2011
12/06/2011
Test Claimant 37
Hour (hour ending BST)
Modelled concentrations including background (µg/m³)
Briery Hey background (µg/m³)
PM10
PM2.5
PM10
PM2.5
1
16.0
7.2
16.0
7.2
2
21.0
9.5
21.0
9.5
3
20.0
9.0
20.0
9.0
4
18.0
8.1
18.0
8.1
5
21.0
9.5
21.0
9.5
6
20.0
9.0
20.0
9.0
7
41.6
24.1
27.0
12.2
8
87.3
46.9
36.0
5.0
9
54.7
27.5
32.0
9.0
10
128.3
88.5
26.0
5.0
11
135.8
96.4
30.0
10.0
12
119.9
86.6
15.0
1.0
13
72.2
60.9
11.0
11.0
14
89.5
65.3
23.0
11.0
15
44.4
30.5
18.0
9.0
16
51.8
41.8
14.0
11.0
17
29.9
12.3
16.0
1.0
18
94.8
62.7
18.0
0.0
19
94.9
73.0
14.0
7.0
20
104.7
79.1
20.0
10.0
21
111.6
84.4
18.0
8.0
22
122.3
90.6
26.0
12.0
23
64.8
49.8
16.0
10.0
24
10.2
7.2
10.0
7.0
24-hour mean concentration (µg/m³)
65.6
45.0
20.3
8.0
24-hour
mean concentration excluding background (µg/m³)
45.4
37.0
Table 15:
Modelled hourly PM10 and PM2.5 concentrations for Test
Claimant 37, 17th June 2011
17/06/2011
Test Claimant 37
Hour (hour ending BST)
Modelled concentrations including background (µg/m³)
Briery Hey background (µg/m³)
PM10
PM2.5
PM10
PM2.5
1
26.0
10.0
26.0
10.0
2
22.0
18.0
22.0
18.0
3
20.0
10.0
20.0
10.0
4
24.0
7.0
24.0
7.0
5
24.0
12.0
24.0
12.0
6
27.0
12.0
27.0
12.0
7
31.0
11.3
27.0
8.0
8
23.5
7.2
22.0
6.0
9
31.2
17.9
24.0
12.0
10
41.1
17.9
40.0
17.0
11
32.7
13.2
30.0
11.0
12
85.6
11.3
84.0
10.0
13
44.0
12.8
43.0
12.0
14
81.7
15.2
79.0
13.0
15
64.7
6.4
63.0
5.0
16
100.9
13.7
100.0
13.0
17
27.5
6.0
25.0
4.0
18
21.5
8.3
20.0
7.0
19
17.8
2.6
17.0
2.0
20
18.3
12.7
15.0
10.0
21
28.0
13.1
18.0
5.0
22
27.3
13.6
18.0
6.0
23
31.6
21.8
22.0
14.0
24
31.6
32.8
22.0
25.0
24-hour mean concentration (µg/m³)
36.8
12.8
33.8
10.4
24-hour
mean concentration excluding background (µg/m³)
3.0
2.4
Table 16:
Modelled hourly PM10 and PM2.5 concentrations for Test
Claimant 39, 10th June 2011
10/06/2011
Test Claimant 39
Hour (hour ending BST)
Modelled concentrations including background (µg/m³)
Briery Hey background (µg/m³)
PM10
PM2.5
PM10
PM2.5
1
16.0
5.0
16.0
5.0
2
16.0
10.0
16.0
10.0
3
18.0
1.0
18.0
1.0
4
17.0
8.0
17.0
8.0
5
20.0
5.0
20.0
5.0
6
35.5
12.7
31.0
9.0
7
22.0
8.0
22.0
8.0
8
30.1
6.1
30.0
6.0
9
26.4
1.3
26.0
1.0
10
28.0
11.0
28.0
11.0
11
19.0
11.5
11.0
5.0
12
12.0
8.0
12.0
8.0
13
15.0
6.8
15.0
6.8
14
6.0
2.7
6.0
2.7
15
17.0
7.7
17.0
7.7
16
19.0
8.6
19.0
8.6
17
20.0
9.0
20.0
9.0
18
19.0
8.6
19.0
8.6
19
3.0
1.4
3.0
1.4
20
7.0
3.2
7.0
3.2
21
13.0
5.9
13.0
5.9
22
9.0
4.1
9.0
4.1
23
5.0
2.3
5.0
2.3
24
19.0
8.6
19.0
8.6
24-hour mean concentration (µg/m³)
17.2
6.5
16.6
6.1
24-hour
mean concentration excluding background (µg/m³)
0.5
0.4
Table 17:
Modelled hourly PM10 and PM2.5 concentrations for Test
Claimant 39, 12th June 2011
12/06/2011
Test Claimant 39
Hour (hour ending BST)
Modelled concentrations including background (µg/m³)
Briery Hey background (µg/m³)
PM10
PM2.5
PM10
PM2.5
1
16.0
7.2
16.0
7.2
2
21.0
9.5
21.0
9.5
3
20.0
9.0
20.0
9.0
4
18.0
8.1
18.0
8.1
5
21.0
9.5
21.0
9.5
6
21.2
10.0
20.0
9.0
7
27.0
12.2
27.0
12.1
8
36.0
5.0
36.0
5.0
9
32.0
9.0
32.0
9.0
10
27.0
5.8
26.0
5.0
11
31.8
11.5
30.0
10.0
12
19.5
4.7
15.0
1.0
13
11.1
11.1
11.0
11.0
14
23.3
11.2
23.0
11.0
15
18.0
9.0
18.0
9.0
16
14.0
11.0
14.0
11.0
17
16.0
1.0
16.0
1.0
18
18.7
0.5
18.0
0.0
19
20.9
12.6
14.0
7.0
20
21.2
11.0
20.0
10.0
21
20.1
9.7
18.0
8.0
22
29.7
15.0
26.0
12.0
23
32.3
23.3
16.0
10.0
24
24.5
18.9
10.0
7.0
24-hour mean concentration (µg/m³)
22.5
9.8
20.2
8.0
24-hour
mean concentration excluding background (µg/m³)
2.3
1.9
Table 18:
Modelled hourly PM10 and PM2.5 concentrations for Test
Claimant 39, 17th June 2011
17/06/2011
Test Claimant 39
Hour (hour ending BST)
Modelled concentrations including background (µg/m³)
Briery Hey background (µg/m³)
PM10
PM2.5
PM10
PM2.5
1
26.0
10.0
26.0
10.0
2
22.0
18.0
22.0
18.0
3
25.0
14.1
20.0
10.0
4
24.1
7.1
24.0
7.0
5
24.0
12.0
24.0
12.0
6
27.3
12.3
27.0
12.0
7
28.8
9.5
27.0
8.0
8
23.6
7.3
22.0
6.0
9
24.2
12.2
24.0
12.0
10
41.1
17.9
40.0
17.0
11
31.0
11.8
30.0
11.0
12
85.0
10.9
84.0
10.0
13
44.0
12.8
43.0
12.0
14
80.0
13.8
79.0
13.0
15
64.0
5.8
63.0
5.0
16
101.0
13.8
100.0
13.0
17
26.0
4.8
25.0
4.0
18
21.3
8.1
20.0
7.0
19
18.5
3.2
17.0
2.0
20
16.5
11.2
15.0
10.0
21
18.2
5.2
18.0
5.0
22
18.6
6.5
18.0
6.0
23
22.1
14.1
22.0
14.0
24
22.2
25.2
22.0
25.0
24-hour mean concentration (µg/m³)
34.8
11.2
33.8
10.4
24-hour
mean concentration excluding background (µg/m³)
0.9
0.8
Sonae GLO: Further Modelling
4. Histograms of modelled hourly concentrations for the 20 Test
Claimants
i)
Unit discharge concentrations with equivalent thresholds
for acrolein and total aldehydes
This
document presents time series of hourly average concentrations for a ‘unit
discharge’ at the locations of the 20 Test Claimants.
The
‘unit discharge’ rate of 1 g/s is used for peak heat release rate of
358 MW, equivalent to an emission factor of 2.793 mg/s/MW. Since the
emission factors for acrolein and total aldehydes are assumed to be constant
throughout the lifetime of the fire, thresholds equivalent to the exceedence
thresholds for these pollutants can be displayed on the unit discharge time
series.
The
equivalent thresholds are derived using the following formula:
unit discharge
emission factor (2.793 mg/s/MW)
x
pollutant exceedence threshold (µg/m³)
pollutant emission
factor (mg/s/MW)
The
table below shows the equivalent thresholds for acrolein and total aldehydes
based on emission factors of 114 mg/s/MW and 600 mg/s/MW, respectively. These
equivalent threshold values are also shown in the following 23 time series
histograms for the locations of the 20 Test Claimants.
Pollutant
Emission Factor
(mg/s/MW)
Pollutant
exceedence threshold (µg/m³)
Equivalent
threshold for unit discharge modelling (µg/m³)
Acrolein
114
0.38 (odour
threshold)
0.0093
146 (health
threshold)
3.577
Total
aldehydes
600
500
2.328
Sonae GLO: Further Modelling
4a. Histograms of modelled hourly concentrations for the 20 Test
Claimants
ii)
Unit discharge concentrations showing only the equivalent
threshold for the acrolein odour threshold
This
document presents time series of hourly average concentrations for a ‘unit
discharge’ at the locations of the 20 Test Claimants.
Since
the maximum modelled hourly unit discharge concentration across the Test
Claimant locations is 0.29 µg/m³, the 23 histograms shown in Document 4 are
presented again in this document with a larger scale on the ‘y’ axis (maximum
concentration is set to 0.3 µg/m³). Consequently only the equivalent
threshold for the acrolein odour threshold of 0.38 µg/m³ (equivalent to a unit
discharge concentration of 0.0093 µg/m³) can be shown on these histograms.
Sonae GLO: Further Modelling
5. Histograms of modelled hourly concentrations for the 20 Test
Claimants
iii)
Modelled PM2.5 concentrations compared against
the COMEAP High trigger value of 74 µg/m³
The
23 time series histograms in this document show modelled hourly average
concentrations of PM2.5 at the locations of the 20 Test Claimants.
Modelled concentrations include the modelled contribution from the fire and
background concentrations using measurements from the Briery Hey monitoring
site.
The
PM2.5 measurements from Briery Hey contain a 43-hour period between
the 10th June 2011 and 12th June 2011 where no PM2.5
data are recorded. For this period, PM2.5 concentrations have been
estimated from PM10 concentrations assuming a PM2.5/PM10
ratio of 0.45. This ratio is based on the ratio of mean PM2.5 and PM10
concentrations over the period of the fire where both PM10 and PM2.5
concentrations are recorded at Briery Hey.
This methodology for estimating PM2.5
concentrations for the period of missing data was agreed between CERC and
Envirobods
Sonae GLO: Further Modelling
6. Histograms of modelled hourly concentrations for the 20 Test Claimants
Modelled PM10
concentrations compared against the COMEAP High trigger value of 107 µg/m³
The
23 time series histograms in this document show modelled hourly average concentrations
of PM10 at the locations of the 20 Test Claimants. Modelled
concentrations include the modelled contribution from the fire and background
concentrations using measurements from the Briery Hey monitoring site.
[1]
A contour map is produced interpolating changes in values in between the model
output points. This calculation cannot be performed by the contouring software
if all the output points are equal.
|
Mrs Justice Andrews:
THE APPLICATION
This is an application by the Respondent to discharge a property freezing order ("PFO") made by Mostyn J under Part 5 of the Proceeds of Crime Act 2002 ("POCA") on 29 July 2014 in respect of £4,400,000 plus interest credited to an account at the Royal Bank of Scotland Plc in the name of Computershare Investor Services Plc. ("CIS").
The money frozen by the PFO is the proceeds of sale of 800,000 shares in a Canadian oil and petroleum corporation named Caracal Energy Inc, formerly known as Griffiths Energy International Inc ("GEI"). I shall refer to them as "the GEI shares". The whole of the issued share capital of GEI was purchased by Glencore Plc for £5.50 per share in or around July 2014 pursuant to an offer made by Glencore in early April 2014. CIS acted as the stock transfer agent, which is how the money came to be transferred into its bank account.
The Respondent ("Mrs Saleh") was the owner of the GEI shares. She acquired them in September 2009 for the sum of Can$0.001 per share (Can$800 or £454.40 in total) as part of a private placement, in the circumstances more particularly described later in this judgment.
The SFO contends that the acquisition of the shares was one of a series of corrupt transactions involving Mrs Saleh and others connected to senior diplomatic staff at the Chadian Embassy in Washington DC that were entered into by GEI in order to promote its commercial interests in Chad. At that time, GEI was seeking to secure development rights over two oil blocks in Chad.
At all material times, the Chadian Ambassador to the USA and Canada, based in Washington DC, was a man named Mahmoud Adam Bechir ("Mr Bechir"). His wife is called Nouracham Bechir Niam ("Mrs Niam"). Mr Bechir took up a different diplomatic post as the Chadian Ambassador to South Africa and moved there with his wife some time in 2012. Mrs Saleh is the wife of Youssouf Hamid Takane (Mr Takane") who was at all material times the Deputy Chief of Mission for Chad in the USA, also based at the Embassy in Washington. Mr Takane left that post at some point between August 2014 and 18 March 2015. There is no evidence as to what has become of him since.
There are essentially three surviving grounds of challenge to the PFO:
i) The Claimant ("the SFO") cannot establish that the shares (and thus the money representing them) are "property obtained through unlawful conduct", and therefore recoverable property under ss.304 and 305 of POCA, because there has been a binding determination in Canadian forfeiture proceedings (consequential on Canadian criminal proceedings against GEI) that the GEI shares were neither crime related proceeds nor offence related property but were at all times from the date on which they were issued to Mrs Saleh her property lawfully acquired by her. The relevant Order of the Canadian court, made on 16 April 2014, ("the Order") is expressed to operate as a judgment in rem.
ii) The SFO is unable to satisfy the "dual criminality" requirements of s.241 of POCA by establishing that the behaviour complained of is not only an offence under the law of the foreign jurisdiction concerned (Canada and/or the USA) but would have been an offence under the laws of a part of the UK if it had occurred there;
iii) The PFO was obtained by material non-disclosure.
The first of these grounds raises a point of considerable importance which could potentially arise on any future occasion in which the relevant prosecuting authorities in a country where the alleged recoverable property happens to be located at that time decide to abandon proceedings for the confiscation or forfeiture of that property, and the property concerned or other property representing it (such as its sale proceeds) subsequently comes into this jurisdiction. If the consequences of the abandonment of the first set of forfeiture proceedings and an order of the court of that other country directing its return are that the property and its proceeds are thereafter to remain immune from forfeiture anywhere else in the world, this could have serious ramifications.
Although it was originally a part of Mrs Saleh's application to discharge the PFO that she was and is subject to diplomatic immunity as the spouse of a serving diplomat, Miss Malcolm QC, who together with Mr Yeo represented Mrs Saleh on this application, realistically accepted that Mrs Saleh (a Canadian national) has never had diplomatic immunity in this jurisdiction or in Canada, and it appears that by 18 March 2015 at the latest she ceased to enjoy any diplomatic immunity that she may have had in the USA. Consequently, the highest that Miss Malcolm could put her case is that the SFO would not be entitled to rely upon any evidence obtained in the USA in violation of the Vienna Convention on Diplomatic Relations 1961 at the time when Mrs Saleh did have immunity. At this stage of the proceedings that argument was not developed before me, and for the purposes of the present application I assumed in Mrs Saleh's favour that in due course it might find favour with the Court and result in the exclusion of that evidence.
This means that if Mrs Saleh failed in her primary contention that the matter is res judicata, in order to continue the PFO the Court would have to be satisfied that there is sufficient admissible evidence besides that which is alleged to be inadmissible to give rise to a good arguable case that the shares and their proceeds are "recoverable property". For reasons that I shall explain in due course, I am so satisfied.
The SFO contends that if the application to discharge the PFO is unsuccessful, Mrs Saleh has no defence to its related claim for a Civil Recovery Order ("CRO") in respect of the money; however Mrs Saleh wishes to have the opportunity to serve further evidence. Since the two matters are inextricably linked, on 1 July 2015 Deputy Master Knapman made an order transferring the Part 8 Claim for the CRO from the Administrative Court to the Queen's Bench Division. The Part 8 Claim has been listed for directions to be given immediately following my determination of the application to discharge the PFO.
BACKGROUND HISTORY
On 19 January 2011, following protracted negotiations, GEI's subsidiary Griffiths Energy (Chad) Ltd concluded a Production Sharing Contract ("PSC") with the Ministry of Petroleum and Energy of Chad for the exploration and development of the two oil blocks. The PSC provided GEI with the exclusive right to explore and develop oil and gas reserves and resources in those blocks. Thereafter, plans were set in train to float GEI on the London Stock Exchange by the end of the year.
The corruption was unearthed when an entirely new (and independent) management team was hired within GEI following the death of Brad Griffiths, its Chairman and one of its founding shareholders, in a boating accident in Ontario in July 2011.
On or around 30 October 2011, in the course of due diligence in preparation for the planned IPO, two sequential (and materially identical) "consulting agreements" between GEI and a Nevada corporation called Chad Oil Consultants LLC ("Chad Oil") were discovered. Under those agreements GEI promised to pay Chad Oil a "consulting fee" of US$2 million if it succeeded in securing the development rights to the two oil blocks in Chad. Mrs Niam was the sole officer, director and shareholder of Chad Oil.
The sum of US$2 million had been paid to Chad Oil on 10 February 2011 pursuant to the second of those consultancy agreements, which was entered into in January 2011, very shortly before the PSC was signed. The directions concerning the banking information for the deposit of the funds into a bank account in Washington DC were given to GEI by Mr Takane.
The Chad Oil consultancy agreements and the payment of the US$2 million "fee" were drawn to the attention of GEI's board, which commendably wasted no time in taking action. It instructed legal counsel in Gowling Lafleur Henderson LLP ("Gowlings") to conduct a thorough internal investigation into all consulting agreements and transactions. The planned IPO was put on hold. The investigation unearthed, among other matters, the following information.
The first of the consultancy agreements between GEI and Chad Oil, dated 15 September 2009, replaced an earlier "consultancy agreement" in identical form entered into on 30 August 2009 between GEI and a Maryland company named "Ambassade du Tchad LLC" which was owned and controlled by Mr Bechir. That agreement had provided for a US$2 million fee to be payable to that company if GEI was awarded the oil blocks on or before 31 December 2009 (or such other date as the parties agreed). The agreement had been signed on behalf of GEI by Mr Naeem Tyab, the business partner of the late Mr Griffiths and another of GEI's founder shareholders.
In early September 2009, GEI's external legal counsel advised Mr Tyab that the Ambassador was a government official and that GEI could not make an offer or give an advantage or do anything directly or indirectly with him. This advice led to the original consultancy agreement being rescinded - and replaced shortly afterwards by the first of the consultancy agreements between GEI and Chad Oil, that company having been incorporated in Nevada five days earlier, on 10 September 2009. The original agreement with Ambassade du Tchad was used by GEI's lawyers as the template for the Chad Oil consultancy agreements.
On the same date as the first consultancy agreement with Chad Oil was signed, 15 September 2009, Mrs Saleh, Mrs Niam and a man named Hassan (a former religious teacher of the children of Mr Bechir and Mrs Niam) simultaneously subscribed for a total of 4 million "founders' shares" in GEI, ostensibly as part of a private placement of 40 million common shares at the nominal price of 1 Canadian cent each. Each of the three signed subscription agreements was accompanied by payment for the shares.
Mrs Niam subscribed for and was allotted 1,600,000 shares in her own name. GEI admitted in the criminal proceedings in Canada that Mrs Saleh and Mr Hassan were nominated by Mrs Niam to acquire a total of 2,400,000 founders' shares in GEI on the same terms as those that she acquired. 1,600,000 shares were allotted to Mr Hassan; the remaining 800,000, the GEI shares whose proceeds are frozen by the PFO, were allotted to Mrs Saleh. Mrs Saleh's payment for the GEI shares was made by means of a Western Union money transfer of US$745, the equivalent of Can$800 at the time. The share subscription agreement relating to Mr Hassan's shares was signed by Mr Bechir, as was the Western Union money order paying for the shares in Mr Hassan's name.
The total amount of shares acquired by the trio was the equivalent of 10% of the shares on offer; and although the purchase price was the same for all the subscribers, they were the only three "outsiders" who were offered the opportunity to invest in GEI. On the face of it there appears to be no reason why any of them would decide to make an investment, however modest, in a recently-formed private Canadian oil and petroleum company which, as the subscription agreement made clear, there was no guarantee would ever be the subject of public floatation – unless, of course, they foresaw that in due course GEI would acquire the rights over the oil blocks in Chad.
GEI accepted Mrs Saleh's subscription offer on 24 September 2009 and the share certificate was issued to her on 1 October. It was kept at GEI's registered office until 6 September 2011 when it was couriered to her at her request. On 3 October 2011 the share certificate was deposited with Canaccord Wealth Management ("Canaccord"), a division of Canaccord Genuity Corp, in Vancouver.
It was admitted by GEI in the Canadian criminal proceedings that Mrs Niam subsequently took steps to have Mr Hassan's shares transferred into her company's, and then into her own personal account, using a Power of Attorney granted to Mr Bechir, which purported to give him authority over Mr Hassan's shares. (Mr Hassan's shares were eventually transferred to Mrs Niam, at her instigation, in the summer of 2014, shortly before the completion of the sale to Glencore).
As a result of Gowlings' investigation, which included interviews with many of the key players including Mrs Saleh and Mr Takane, the board of GEI made the decision that GEI should voluntarily report itself to the Canadian law enforcement authorities. Thereafter GEI co-operated fully with investigations by the police in Canada ("the RCMP"), even to the extent of waiving privilege over communications with its former external legal advisers. It was accepted by the Public Prosecuting Service of Canada ("PPSC") that they would not have unearthed the corruption had it not been for GEI's self-reporting, and this made them amenable to entering into a plea bargaining arrangement with GEI.
THE CANADIAN CRIMINAL PROCEEDINGS
On 22 January 2013, at the Queen's Bench Court of Alberta, Calgary, GEI pleaded guilty to one charge of violation of the Corruption of Foreign Public Officials Act (Canada), based upon an Agreed Statement of Facts between GEI and the PPSC. It was fined the comparatively modest amount of Can$10,350,000, because of its extensive co-operation with the authorities, and on the basis that the Crown was not alleging, and GEI was not admitting, that any influence was actually realised.
It was unnecessary for the prosecution to prove that the corrupt payment and related opportunity to acquire the founder shares in GEI had been instrumental in bringing about the PSC. The relevant offence is committed where the defendant "in an attempt to obtain an advantage in the course of business, directly or indirectly provides a reward advantage or benefit to a person for the benefit of a foreign public official to induce the official to use his position to influence any acts or decisions of the foreign state for which the official performed duties or functions." The person receiving the reward, advantage or benefit does not have to be the foreign public official himself, so long as the payment is made for the benefit of that official. The recipient does not have to be aware that he or she is receiving a bribe. What matters is the purpose of GEI providing the reward, advantage, or benefit in question.
Prosecuting counsel informed the judge, Brooker J, at the hearing on 22 January 2013 that the Crown would be seeking forfeiture of the shares issued to Mrs Niam, Mrs Saleh and Mr Hassan under s.490.1 of the Criminal Code of Canada ("the Code") as being the proceeds of crime under s.462.37 of the Code and "offence related property". "Offence related property" has a wide definition in s.2 of the Code, which includes any property, within or outside Canada, by means or in respect of which an indictable offence under the Corruption of Foreign Public Officials Act is committed, or that is used in any manner in connection with the commission of such an offence.
Of course, Mrs Niam, Mrs Saleh and Mr Hassan were not parties to the Agreed Statement of Facts. The judge was alive to this point. At the sentencing hearing he said to prosecuting counsel and counsel for GEI:
"It may well be, I don't know, that some of these people have a different view of the facts than you folks have agreed to. So there has to be an effective means of providing notice to them before the Court grants a relief against them."
Counsel for GEI, Ms Robidoux, then informed the judge that although GEI had admitted that the opportunity to purchase shares by Mrs Niam constituted part and parcel of the unlawful compensation that was paid to her, and that indirectly it would benefit her husband, the foreign public official, there was no admission by GEI that the shares of Mrs Saleh and Mr Hassan were part of that [unlawful compensation]. However, Ms Robidoux understood that was the very nature of the application that the prosecutor planned to bring, and GEI would be taking no position on that.
THE CANADIAN FORFEITURE PROCEEDINGS
Forfeiture proceedings were commenced by the issue of a Notice of Forfeiture Application by the PPSC on 11 February 2013 in respect of the shares issued to Mrs Niam, Mrs Saleh and Mr Hassan on the stated basis that "providing the ability to acquire founder shares in GEI was a direct or indirect reward, advantage or benefit given to a public official to induce the official to use his or her position to influence any acts or decisions of the foreign state… for which the official performs duties or functions."
In the course of the forfeiture proceedings, ex parte applications were made for search warrants in respect of the shares (which were granted and duly executed) and for a "Management Order" (which appears to be the Canadian equivalent of a PFO) supported by an Affidavit sworn by the officer in the case, Constable Babin. The way in which he put the claim in respect of Mr Hassan's shares was based on the allegation that he was a nominee used by Mr Bechir to acquire a significant quantity of shares that were not traceable to Mr Bechir. The claim in respect of Mrs Saleh was based on the role played by her husband Mr Takane in endeavouring to ensure that GEI was successful in obtaining the relevant contract(s) in Chad. It was the prosecution case that she was being rewarded as an incentive to him, in the same way as Mrs Niam was receiving a "consultancy fee" via Chad Oil, plus the shares in GEI, as an incentive to her husband to use his influence with the Chad Government to smooth GEI's path.
On 14 June 2013 the Canadian court made a Management Order directing the Minister of Public Works and Government Services or his designate as represented by the Seized Property Management Directorate to take possession and control of, and manage or otherwise deal with the shares until they were "returned in accordance with the law or forfeited to Her Majesty". The shares were described in that order as "common shares of Griffiths Energy International Inc" although by the time the Management Order was made, GEI had already changed its name to Caracal Energy Inc. The name change had occurred on 23 May 2013, and that was the name under which GEI eventually floated on the London Stock Exchange later that year. The share certificate relating to the GEI Shares was seized by the RCMP from Cannacord pursuant to the Management Order.
On 7 August 2013, Brooker J commenced the first hearing in the forfeiture applications against Mrs Saleh and Mrs Niam. That was the first occasion on which they appeared by counsel in the Canadian proceedings. The only defence that was then put forward by Mrs Saleh (by Motion served on the same date) was that the Gowlings investigation had disregarded Mrs Saleh's diplomatic status and that her property was protected from seizure under the Vienna Convention 1961. It is apparent from the transcript that the hearing on 7 August was a directions hearing, at which the topic that probably occupied the most time was disclosure.
Mrs Saleh and Mrs Niam sought disclosure of what the judge was later to describe as "all the information the Crown has in respect to the prosecution of [GEI]." Of course some of that information was legally privileged material over which GEI had waived privilege in favour of the Crown, but only for the purposes of the prosecution. The judge stood the matter over to see if it could be resolved without his needing to make a ruling. The PPSC subsequently provided some disclosure voluntarily, including disclosure of the statements Mrs Saleh had made to the Gowlings investigators and copies of certain correspondence, but disputed that it had any obligation or requirement to make disclosure to third parties. Mrs Saleh and Mrs Niam contended that the voluntary disclosure was inadequate.
At a further hearing on 28 February 2014, the judge took the view that the Crown's written submissions recognized that procedural fairness required some degree of disclosure in the circumstances of this case. He ruled that the applicants were entitled to some disclosure from the Crown, but that the nature, extent and basis for the disclosure had yet to be determined. A date was fixed for that argument to be heard, together with an argument relating to fresh evidence (which appears to have related solely to Mrs Niam's application for further disclosure) on 16 April 2014. It is of some importance to note that that hearing was not, and was never intended to be, the hearing of the substantive application for forfeiture of the shares.
Meanwhile, on 6 November 2013 counsel for Mrs Saleh had filed a notice of motion seeking an order quashing and dismissing the forfeiture application in respect of her GEI shares, inter alia on the basis that the evidence upon which the PPSC sought to rely was inadmissible because it had been obtained in violation of the rules of the Vienna Convention. The complaint was made that the inadmissible evidence had been used to obtain the Management Order. A further point that Mrs Saleh's counsel sought to argue was that it was impermissible to seek forfeiture of her interests if she had not been joined in a lawful criminal prosecution.
That motion was never heard or ruled upon by the Canadian court, because on 4 April 2014 the Chief Federal Prosecutor informed the court and the lawyers for Mrs Saleh and Mrs Niam by letter that the Crown would be withdrawing the applications for forfeiture against them both. The letter said that Mr Rodych (prosecuting counsel) "will take appropriate steps to formalize that decision through filing notice on the record or addressing the matter before the court on April 16, 2014." The reasons for that decision were not, and still have not been, explained.
The transcript of the hearing on 16 April 2014 reveals that Mr Rodych formally withdrew the forfeiture application and then indicated that counsel for Mrs Saleh and Mrs Niam would have representations to make regarding the shares that had been seized. Mr Beresh QC, counsel for Mrs Saleh, then put a draft order before the court, which was not a consent order but which Mr Rodych had signed to signify his approval of its form, and asked the court to consider it. Mr Rodych said, in answer to a question by the judge, that he did not oppose the order. He added "there's matters in there that are beyond my capacity but I don't take issue with – and I leave it to the court to make an order in that respect."
The judge then made this remark:
"Okay. The only thing I was questioning was the … I suppose I can get around it, in the sense that whereas no evidence has been presented by the Queen upon which I could find in favour of the … the 490 has been satisfied; therefore, appearing that Saleh is innocent of any complicity.
All right, that's just a recital, in any event."
Mr Beresh responded "It is. It comes directly from the Criminal [Code]." Without hearing anything further by way of submission, Brooker J then granted the Order in the form that was put before him. He was not taken through it by counsel paragraph by paragraph with an explanation of why an order was being sought in those terms. Although, as I have said, it was not formally consented to, the Order was unopposed.
Section 490.1(1) of the Canadian Criminal Code provides that, subject to sections 490.3 to 490.41, if a person is convicted of an indictable offence under the Corruption of Foreign Public Officials Act and the court is satisfied on a balance of probabilities that any property is offence-related property and that the offence was committed in relation to that property, the court shall make a forfeiture order. However, there is a requirement in s.490.4(1) that before making such an order the court shall require notice to be given to any person who, in the opinion of the court, appears to have a valid interest in the property.
Section 490.4(3) empowers the court to order that all or part of the property that would otherwise be forfeited under s.490.1(1) be returned to a third party if the court is satisfied that the person concerned "is the lawful owner or is lawfully entitled to possession of all or part of that property, and that the person appears innocent of any complicity in, or collusion in relation to, the offence." Although on a literal interpretation the section appears to be dealing with the position where the court would otherwise make a forfeiture order (and thus is satisfied that the requirements of s.490.1(1) have been met) there appears to be no other section in the Code that provides a mechanism for returning seized property to a third party lawful owner when those requirements have not been met. It is possible to interpret s.490.4(3) as covering that situation as well.
Section 490.5 specifically deals with the situation in which any offence-related property is forfeited pursuant to an order made under s.490.1(1) and a third party claims an interest in that property. S.490.5(1) provides a mechanism for such a person to make an application by notice in writing for an order under sub-section (4). That sub-section empowers the judge, on hearing such an application, to make an order "declaring that the interest of the applicant is not affected by the forfeiture and declaring the nature and the extent or value of the interest." Again, before making such an order, the judge has to be satisfied that the applicant "appears innocent of any complicity in any indictable offence that resulted in the forfeiture of the property or of any collusion in relation to such an offence."
The difference between the two scenarios covered by s.490.4 and 490.5 is that the former relates to the position before a forfeiture order is made by the court, whereas the latter relates to the position after such an order is made. The relief to be granted in those two scenarios is also subtly different. However in each case, the power of the court to make the order arises if it is satisfied on the information before it that the person concerned appears innocent of complicity or collusion in the offending: which is not the same thing as being satisfied that the person concerned is in fact innocent of such complicity or collusion.
It appears that the judge's comment related to one of the recitals to the Order which immediately followed a recital of the fact that the PPSC had served notice on Mr Beresh that it intended to withdraw the application for forfeiture of Mrs Saleh's shares. That recital reads as follows:
"AND WHEREAS no evidence has been presented by the Applicant, Her Majesty the Queen, in the Right of Canada, upon which this Honourable Court could conclude in favour of the Applicant that section 490.5(4) has been satisfied and it therefore appearing that Ikram Mahamet Saleh is innocent of any complicity in any indictable offence that resulted in the RCMP seizure of her shares in [GEI] or that the said Saleh shares in [GEI] were likely to have been used in connection with the commission of an unlawful act by either Ikram Mahamet Saleh or by [GEI]" [emphasis added].
There is plainly a mistake in the recital, as both Miss Malcolm and Mr Mitchell QC, who appeared before me with Mr Lennon on behalf of the SFO, accepted. The recital states that there is no evidence upon which the court could conclude in favour of the Crown that s.490.5(4) had been satisfied. Section 490.5 was irrelevant, given that the Court had not yet made a forfeiture order, and the prosecution had withdrawn its application for such an order. In any event, if that section were satisfied, the court would be making a decision unfavourable to the Crown and favourable to the applicant, Mrs Saleh. If there was no evidence before the court that s.490.5(4) had been satisfied, the court would not be satisfied that the conditions had been made out for granting an applicant any relief under that subsection. The mistake cannot be cured by changing the phrase to "had not been satisfied". Quite apart from the double negative that this would produce, the evidential burden under s.490(5)(1) plainly lies on the third party applicant to satisfy the court that an order should be made under subsection (4) despite the fact that the property is already subject to a forfeiture order. No factual evidence had been adduced by Mrs Saleh.
The mistaken reference to s.490.5(4) in the recital must therefore either be a reference to s.490.1.(1) or to s.490.4(3). Since the context is that the Crown was adducing no evidence to satisfy the relevant provision of the Code mandating forfeiture, the former makes sense, and is grammatically accurate. However, the language about the applicant appearing to be innocent of any complicity is taken straight from s.490.4(3), albeit that it also appears in 490.5(4). Section 490.4(3) is the relevant section dealing with the return of seized property prior to the making of any order for forfeiture, and the purpose of the recital appears to be to record that the necessary conditions for the return of the seized share certificate to Mrs Saleh have been satisfied. Despite this, I have been unable to find a means of substituting s.490.4(3) for s.490.5(4) without re-writing the entire recital. This Court cannot act as if it were a court of appeal from the foreign court; the most that I can do is try to give the recital a sensible interpretation.
Although, as the judge remarked, it is only a recital, the recital is of some importance because it, and the other recitals, are an aid to understanding what the court was actually determining in the body of the Order itself. Bearing in mind what the judge said when he was going through the draft, I construe the recital as recording that the Crown had presented no evidence upon which the Court could conclude in favour of the Crown that s.490.1(1) had been satisfied in respect of the GEI shares. Therefore (i.e. because the Crown had presented no evidence) it appeared to the Court that Mrs Saleh was innocent of complicity or collusion in relation to the offence committed by GEI. Interpreted in that way, the recital is recording that the statutory prerequisites for discharging the Management Order and making an order for the return of the shares to Mrs Saleh had been made out.
I note that a little later on during the same hearing, after the judge had made the Order in favour of Mrs Saleh in the terms requested, counsel for Mrs Niam, Mr James, told the judge that he did not believe the Order was properly granted under section 490.5 and that it was a different section. The judge responded "I didn't look at the section, so I assume you've had the order correctly". Mr James then said that "the effect was the same". I can understand why he said that, because Sections 490.4(3) and 490.5(4) are two routes to achieving broadly the same objective – the recognition of the primacy of the interests of the lawful owner of property that has been seized in proceedings for forfeiture – premised on the same circumstances, namely, that the owner appears to be innocent of complicity or collusion in the wrongdoing. That exchange suggests to me that at the hearing everyone was focusing on the objective of getting the shares released to Mrs Saleh and Mrs Niam, and nobody was particularly concerned about whether the mechanism used to achieve it was accurately reflected on the face of the Order. In the event, nothing was done to correct the mistake.
A further recital to the Order records that the Court has been advised that GEI had changed its name to Caracal Energy Inc since it entered its plea of guilty and that Glencore had made a cash offer to Caracal Energy Inc or to its shareholders to acquire the shares of the shareholders of Caracal Energy Inc. This recital was plainly designed to ensure that the change of name caused no impediment to the return of the GEI share certificate and its exchange for a certificate in the new name, for the purpose of enabling the sale to Glencore to proceed.
The Order itself must have been made under s.490.4(3), rather than under s.490.5(4) as the recital seems to suggest, but nothing turns on this. The judge plainly had the power to make such an Order. The first paragraph discharges the Management Order, and the second directs the return of the share certificate for the GEI shares to Mrs Saleh. Thus far it is uncontroversial. It is paragraph 3 of the Order which is of paramount importance in this application, because that contains the "adjudication" relied upon by Miss Malcolm as giving rise to an estoppel. It provides as follows:
"IT IS FURTHER ORDERED AND ADJUDGED THAT
This Order/Judgment of this Court is to be construed as a judgment in rem, in that the 800,000 common shares issued by [GEI] (now Caracal Energy Inc) to the Respondent, Ikram Mahamet Saleh, are neither crime related proceeds nor offence related property but were, at all times from the date those shares were issued to her, continuously to and beyond the date of this Order/Judgment, her property lawfully acquired by her."
A separate order was made by the judge on the same date releasing and directing the return of the other seized share certificates to Mrs Niam and Mr Hassan. It is a much simpler order. It does not contain a recital similar to the one with the mistaken reference to s.490.5 of the Code, nor does it contain a provision identical to paragraph 3 of the Saleh Order. It merely recites the Management Order, vacates that order and directs the RCMP or whoever holds the share certificates to return them forthwith.
Miss Malcolm submitted that the Canadian court has definitively determined that the shares are neither the proceeds of crime nor offence related property, and that is a declaration as to their status binding as against the world. Therefore it is not open to the SFO to contend otherwise or to this Court to determine otherwise. Before addressing that issue and the other grounds for discharging the PFO relied upon by Miss Malcolm, I should briefly explain the circumstances in which this matter came before the English Court.
HOW THE SFO BECAME INVOLVED
The SFO became involved in this matter in July 2014 following a mutual legal assistance request from the US Department of Justice in relation to the shares acquired by Mrs Niam (including those recently transferred to her by Mr Hassan). Those shares had been sold to Glencore for £17.6 million. The sale of GEI/Caracal was either about to complete or had just completed, and the US authorities asked the SFO to take steps to freeze that sum. By then, Mr Bechir had become the Chadian Ambassador to South Africa, and he and his wife had moved there, but Mr Takane still remained in his post in Washington DC. In the light of possible claims for diplomatic immunity, the US Authorities did not ask for any similar action to be taken in respect of Mrs Saleh's shares. I understand from Mr Mitchell that their position may well have changed, now that Mr Takane is no longer in the Embassy in Washington DC.
The SFO responded to that request and the proceeds of the Glencore acquisition of the Niam/Hassan shares, also in the CIS account at RBS, were frozen by an external restraint order of HH Judge Taylor made at Southwark Crown Court on 24 July 2014.
The SFO acted of its own initiative in issuing proceedings for a CRO against Mrs Saleh under Part 8 of the CPR and taking steps to obtain the PFO in respect of the proceeds of sale of her GEI shares. It was unaware of the existence of the Order of 14 April 2014 when it made the without notice application for the PFO to Mostyn J. However the witness statement made in support of the application by the SFO solicitor, Stacey Barnes, stated at paragraph 5.1 that the Canadian authorities seized these physical share certificates for forfeiture in February and March 2013 but withdrew their action and released the shares. That is a sufficiently accurate description of what happened, albeit that there is no mention of the Order, and strictly speaking it was the Canadian court that released the shares.
A copy of the Order was sent to the SFO by Mr Beresh QC by email on 13 August 2014 following the service of Mostyn J's order on him (on behalf of Mrs Saleh). The Order was very properly drawn to the Court's attention by Ms Barnes in a further witness statement dated 3 September 2014, to which it was exhibited together with the transcript of the hearing in the Canadian criminal proceedings on 22 January 2013. Given that the Order came to light in the course of the summer vacation, and it was obviously appropriate that the same judge who granted the PFO should see the further evidence and decide what to do about it, I do not consider that the SFO should be criticised about the time it took them to put the information before the Court.
On 16 October 2014, Mostyn J made a ruling on the further information supplied to him by the SFO. He said that he had carefully considered whether the revelation of the existence of the Order should lead him, of his own motion, to fix a hearing to consider variation or discharge of the PFO, and that he did not consider that either the Order or the transcript of the hearing on 22 January 2013 should lead him to take that step. There was no question of his having been intentionally misled, and on the basis of the evidence before him he remained satisfied that there is a good arguable case for the existence of recoverable property. The PFO therefore continued, subject to the right of Mrs Saleh to apply to vary or discharge it.
THE MERITS OF THE CLAIM FOR A PFO
One of the slightly unusual features of this case is that there is, as yet, no witness statement from Mrs Saleh herself, and she objects to the statement taken from her by Gowlings being used in evidence, on grounds of alleged violation of the protection afforded to her by the Vienna Convention at the time it was taken. Instead, she relies on a witness statement from her solicitor, Mr Ward of Stephenson Harwood, dated 10 December 2014. Mr Ward states that the facts in his witness statement are based on information and documents that he has been provided with by her Canadian lawyers. There is nothing in his witness statement dealing with Mrs Saleh's factual defence to the allegation that the opportunity given to her to buy the GEI shares was part of the corrupt incentives offered by GEI to Mr Bechir and/or Mr Takane.
Miss Malcolm submitted that the Crown could not establish its case for a CRO without recourse to inadmissible evidence. Mr Mitchell took issue with that submission; however, as both counsel accepted, that argument is for a future occasion. In my judgment, leaving aside the issue about the impact of the Canadian Order, at this juncture there is enough evidence whose admissibility is uncontroversial to cross the threshold of a good arguable case that the GEI shares and their proceeds are recoverable property, which is all that is required for a PFO.
The SFO can establish, without recourse to any statements taken by Gowlings from Embassy staff, or to any documents produced in the course of the execution of anyone's diplomatic duties, by reference to the Agreed Statement of Facts and GEI's own documents (including copies of the relevant contracts), that:
i) GEI initially sought to provide a corrupt incentive to Mr Bechir by offering to pay a $2 million "consultancy fee" to his own company if they closed the deal;
ii) When it was advised that this would be unlawful, GEI decided to provide the same corrupt incentive by an indirect route. The $2 million "consultancy fee" was now promised to Chad Oil, swiftly incorporated for that purpose as a vehicle for Mrs Niam.
iii) As an additional incentive to her husband, Mrs Niam was allowed to acquire founder shares in GEI at a nominal price. Those shares stood to be worth a huge amount of money if GEI got the deal that it wanted in respect of the oil blocks. Commercially, therefore, their acquisition was an even greater incentive than the "consultancy fee" would have been.
iv) The three offers by Mrs Saleh, Mrs Niam and Mr Hassan to subscribe for a total of 10% of the founder shares in GEI all happened on the same day as the first consultancy agreement with Chad Oil was made, 15 September 2009. This was no coincidence.
v) They were the only three "outsiders" who subscribed for founder shares; moreover, none of them had the level of income ostensibly required of an investor in GEI ($200,000) that they stated they had in the offer to subscribe;
vi) Mr Hassan and Mrs Saleh were nominated by Mrs Niam to receive some of the founder shares. It does not necessarily follow from this that they were "nominees" in the sense of holding the shares on her behalf or on behalf of Mr Bechir. However, one legitimate inference that could be drawn from this nomination is that the incentive offered to Mr Bechir came in the form of the opportunity for Mrs Niam to acquire a total of 10% of the shares in GEI not only for herself, but for anyone else that she might wish to benefit and nominate as the recipient;
vii) There are strong indicia that Mr Hassan was a nominee in every sense, not least the fact that Mr Bechir was instrumental in making the application in his name, and that Mrs Niam took so much trouble to get hold of his shares and eventually did so before the sale to Glencore.
viii) Mrs Saleh had no apparent reason to be interested in investing in GEI;
ix) Mr Takane, her husband, was plainly involved to some extent in furthering GEI's interests. He was instrumental in directing payment of the "consultancy fee" to Chad Oil, and in the creation and execution of the second Chad Oil Consultancy Agreement in January 2011, although that company was ostensibly a vehicle for Mrs Niam used as the route for paying the "consultancy fee" originally offered to her husband Mr Bechir.
x) Thus it could also be inferred that the acquisition of the shares by Mrs Saleh was an incentive to Mr Takane.
Although GEI made no admission in the Agreed Statement of Facts that the shares allotted to Mrs Saleh and Mr Hassan were a part of the corrupt incentives provided by GEI, there is easily sufficient circumstantial evidence to raise a good arguable case that they were, and that the GEI shares are "recoverable property" as defined in POCA. It is unnecessary for the purposes of POCA to show that the person who is the lawful owner of the "recoverable property" was himself or herself guilty of any criminal offence. It seems to me that this would be a paradigm case for making a PFO, unless the SFO is unable to show that s.241 of POCA is satisfied, or the Order of the Canadian court compels this Court to reach a different conclusion.
DUAL CRIMINALITY
Logically the next issue to be determined is whether the "dual criminality" requirement under s.241 of POCA is satisfied. That requirement only applies in so far as the criminal conduct complained of took place outside this jurisdiction – thus it is a pertinent inquiry so far as the events of September 2009 are concerned.
If the opportunity to buy the GEI shares and their allotment did indeed form part of GEI's corrupt incentives to Mr Bechir and/or Mr Takane to assist them in obtaining the concessions over the oil blocks, then what GEI did was undoubtedly a criminal offence under the laws of Canada (to which it pleaded guilty). The shares were paid for by means of money emanating from a bank account in Washington DC and the relevant paperwork was completed by Mrs Saleh in that State. On the evidence of Ms Barnes in support of the PFO the acquisition of or the allotment of the shares in GEI as a corrupt incentive would also have been a criminal offence under various provisions of US Federal law including 15 USC 78dd-3 (the Foreign Corrupt Practices Act), 18 USC 1341 (Mail Fraud) and 18 USC 1343 (Wire Fraud).
The only issue is whether, if those same acts had been committed in this jurisdiction, GEI would have committed a criminal offence. Miss Malcolm candidly accepted that she would not be pursuing this point were it not for the fact that the corrupt acts complained of occurred in 2009 and thus pre-dated the coming into force of the Bribery Act 2010. Rather than setting out a positive case, Miss Malcolm challenged Mr Mitchell to explain the basis upon which the SFO contended that the dual criminality requirement was satisfied.
Mr Mitchell submitted that the allotment of the shares to Mrs Saleh was to be regarded as part and parcel of the same corrupt transaction involving the agreement to pay the consultancy fee to Chad Oil, and the allotment of the shares to Mrs Niam. GEI's conduct taken in the round, had it occurred in this jurisdiction in 2009, would have amounted to an offence of bribery at common law, since Mr Bechir and Mr Takane were both agents of the Chadian Government at the material time. Mr Mitchell contended that it would be as unlawful at common law for the briber to pay or provide the corrupt incentive to the agent's wife instead of the agent, or to a third person such as a company nominated by the agent or his wife to be the recipient, as it would be to provide it directly to the agent himself.
Such a payment or provision of a corrupt incentive would also have been an offence contrary to s.1 of the Prevention of Corruption Act 1906 (which had been extended to agents outside the UK since 2002 by virtue of the Anti-Terrorism Crime & Security Act 2001). That section provides, insofar as relevant:
"If any person corruptly gives or agrees to give or offers any gift or consideration to any agent as an inducement or reward for doing or forbearing to do… any act in relation to his principal's affairs or business, or for showing or forbearing to show favour or disfavour to any person in relation to his principal's affairs or business … he shall be guilty of a misdemeanour".
Mr Mitchell also submitted that Mrs Saleh might also have committed at least one act of money-laundering under ss 327-329 of POCA, since on SFO's case the shares were property obtained as a result of GEI's criminal conduct (and thus "criminal property" under Part 7 of POCA) and they were transferred by her from Canada to England for the purposes of being sold to Glencore, then converted into cash in England by reason of the sale. The transfer or the conversion of criminal property would both be acts of money-laundering. Of course Mrs Saleh's liability for money laundering in Canada and/or England would depend on her state of mind at the time of the transfer and sale respectively; she would have to have known or believed the property to be criminal property. If it was criminal property, however, in my judgment Mr Mitchell would not need to resort to money-laundering in order to establish that the matter was actionable in this jurisdiction.
Suffice it to say that I am satisfied that if the opportunity to acquire the GEI shares afforded to Mrs Saleh was indeed part and parcel of GEI's corrupt behaviour in 2009, (as there is a good arguable case that it was) it would have amounted to a criminal offence if GEI's behaviour had taken place in England.
RES JUDICATA
I now turn to the issue which occupied the most time at the hearing of this application and is clearly the most arguable of the grounds that are still pursued by Mrs Saleh.
The relevant rules in respect of the recognition of foreign judgments are well established, and were largely uncontroversial. A foreign judgment which is final and conclusive on the merits is conclusive as to any matter thereby adjudicated upon, and cannot be impeached for any error of fact or of law. This principle, reflected in Rule 48 of Dicey, Morris and Collins on the Conflict of Laws ("Dicey") 15th Edn, paragraph 14R-118, applies with equal force to foreign judgments in rem as it does to foreign judgments in personam.
This was established by the House of Lords in Castrique v Imrie (1870) LR 4 HL 414. I agree with Mr Mitchell's proposition that when that case was decided, their Lordships could not have anticipated the ease and speed with which, thanks to modern technology, assets can be moved from jurisdiction to jurisdiction so as to defeat the ends of justice; but that is no reason to assume that the principles in that case are no longer relevant or applicable in the modern era. It is important, however, that this Court should seek to achieve that, so far as is possible, those principles should not be applied in a manner that defeats the interests of justice.
A judgment in rem is one which determines the status or disposition of property which is valid as against the whole world and not merely between the parties: Pattni v Ali [2006] UKPC 51 [2007] 2 AC 85, especially at [21], per Lord Mance. If the property in question (whether moveable or immoveable) is located in the jurisdiction of the court which delivers the judgment, it will be a court of competent jurisdiction. A foreign judgment will not be characterised as a judgment in rem unless the foreign court so characterises it.
However, the characterisation by that court of its judgment as a judgment in rem is not the end of the matter so far as the rules of private international law in this jurisdiction are concerned, as Pattni v Ali itself demonstrates. In that case, an appeal from the Isle of Man, the Privy Council was concerned with the question whether a Kenyan judgment was in rem or in personam. It held that there was no reason why a judgment should be characterised as wholly in rem or wholly in personam; it could operate partly in rem and partly in personam, and the question of its operation is a matter of analysis. The judgment of the Kenyan court did not purport to transfer or deal with the property in question (some shares) but determined the contractual rights of the parties relating to them. Therefore, the order directing that the shares be transferred to one of the parties was held to be an order in personam directing specific performance of contractual rights under a contract of sale.
In R(PM) v Hertfordshire County Council [2010] EWHC 2056 (Admin), Hickinbottom J added the important rider (at [51]-[52]) that claims before the courts generally involve the rights and obligations of those – and only those – who are privy to the proceedings. A judgment may appear to determine an issue of status, but it is only a judgment in rem if it is made by a court or tribunal with the jurisdiction to determine proceedings where the function of those proceedings is to determine status or rights as against the world. Findings, even as to matters such as age, which are merely incidental to a determination that the court or tribunal is required to make in personam, are not binding on the world at large.
Miss Malcolm submitted that the requirement that the foreign judgment should be a judgment on the merits was confined to judgments in personam, because the inquiry whether the judgment is "on the merits" is relevant only where the parties are the same, and the question is whether they can re-open a point that the first court has already decided in an action between them. Where the judgment is in rem, the parties do not need to be the same in order for the judgment to bind them.
I do not accept that submission, for which there is no authority. In their commentary on Rule 48 the learned editors of Dicey make no such qualification: indeed, both the language of the Rule itself and the tenor of that commentary appear to contradict it. Regardless of the nature of the proceedings, the inquiry to which the question whether the judgment is "on the merits" is directed is the same, namely, whether the first decision was of a nature that should be regarded and recognized as finally determinative of the issue (either as between the parties or against the world). If anything, that question seems to me to be all the more important in the context of a judgment in rem, where the person seeking to re-open the matter may not have had any opportunity to put arguments before the first court or to influence the outcome.
The present case is not strictly concerned with so-called "cause of action estoppel" because, insofar as there is a statutory "cause of action" under POCA, it is not the same as the "cause of action" under section 490.1(1) of the Criminal Code of Canada. The argument that Miss Malcolm is advancing is essentially one of issue estoppel. The question that I have to determine is whether it is open to the SFO to contend that the GEI shares were "recoverable property" prior to their sale, in the light of the Canadian court's findings, expressed to be in rem, that they are neither offence related property nor the proceeds of crime as defined by the Code.
A decision "on the merits", as explained by Lord Brandon in The Sennar (No. 2) [1985] 1 WLR 490 at 499 means that:
"[it] is a decision which establishes certain facts as proved or not in dispute; states what are the relevant principles of law applicable to such facts; and expresses a conclusion with regard to the effect of applying those principles to the factual situation concerned."
In the same case at 494A-C Lord Diplock, who agreed with Lord Brandon's conclusions and reasons, added that the moral overtones which the expression "on the merits" tends to conjure up may make it misleading. What it means in the context of judgments delivered by courts of justice is that the court has held that it has jurisdiction to adjudicate upon an issue raised in the cause of action to which the particular set of facts give rise, and that its judgment on that cause of action is one that cannot be varied, re-opened or set aside by the court that delivered it or any other court of co-ordinate jurisdiction.
A judgment or order on the merits will not include an order dismissing a case for want of prosecution, or for a technical objection, or for a default of pleading. Nor will it include an order made by consent, for the obvious reason that even if it gives its approval to the agreement made between the parties, the court has not itself adjudicated upon the matters in issue between them. The position in respect of foreign judgments entered in default is the subject of some academic debate, which it is unnecessary to rehearse for present purposes, since I am not concerned with a default judgment.
Neither the SFO nor Mrs Saleh's legal team were able to find any authority addressing the status, in this context, of a judgment or order made by a court resulting from the decision made by a claimant to abandon or withdraw the claim either before or at the trial or substantive hearing. The nearest they got were what appear to be inconsistent decisions of the Supreme Court of Canada on the question whether the situation where the prosecution offers no evidence at a criminal trial or withdraws the case before any evidence is adduced, and the charge is dismissed, can give rise to an estoppel per rem judicatem. Those cases, R v Riddle (1979) 48 CCC (2d) 365 and R v Selhi [1990] 53 CCC (3d) 576 concerned the specific question whether the plea of "autrefois acquit" is available to a defendant in criminal proceedings in such circumstances, where the prosecution later seeks to prosecute him for substantially the same offence.
In Riddle, the main prosecution witness did not turn up on the day of the trial and the judge refused an adjournment; the Crown offered no evidence and the charge against the defendant was dismissed by the judge. The issue that the Supreme Court was asked to determine was whether the plea of "autrefois acquit" was available in respect of a summary conviction offence. The court held that it was. There was an ancillary issue as to whether in the circumstances the information (or charge) had been dealt with by the court "on the merits" because there was no certificate of acquittal. Dixon J, who delivered the judgment, said that he was unsure what the phrase "on the merits" meant, but that it did not necessarily mean "after a trial", and that where the criminal charge had been dismissed by the court, whether as a result of no evidence being adduced by the Crown or insufficient or inadequate evidence, the defendant would be entitled to a certificate of acquittal. That in turn would enable him to argue that he should not be put in double jeopardy.
In Selhi, by contrast, the same judge, by now the Chief Justice of Canada, delivered a ruling that the plea of "autrefois acquit" was not available to a defendant to a summary proceeding where the Crown had withdrawn the information before any evidence was adduced against him. It held that the withdrawal of the information could not be characterised as being in the nature of an acquittal.
In R v SCC (2001) ABQB 959, a decision of Lee J. in the Court of Queen's Bench of Alberta, the judge formed the view that Selhi must be taken to have implicitly overruled Riddle even though there was no mention of that case in Dixon CJ's judgment. He decided, consistently with the reasoning deployed in Selhi, that the withdrawal of a case by the prosecution before any evidence was called would not be sufficient to give rise to the plea of "autrefois acquit". He considered that as a matter of common sense, a defendant would not be put in any jeopardy (of conviction) until evidence was called against him.
It is always difficult to translate principles of (or akin to) issue estoppel or res judicata from the context of criminal proceedings to civil proceedings, even where (as in the present case) the civil proceedings are an adjunct to and brought in the context of earlier criminal proceedings. In any event, the question whether the Order was "on the merits" falls to be determined by the conflict of laws principles of this jurisdiction, so the approach to that question that might be taken domestically by a Canadian court is, at best, of persuasive value. Insofar as these Canadian criminal cases afford any assistance, it is of very limited scope, although the approach taken by the Supreme Court in Selhi and by Lee J in SCC superficially supports, or is at least consistent with, the proposition that an order or judgment made in consequence of the withdrawal of proceedings before any evidence is heard, is not "on the merits".
I prefer not to rest any part of this judgment on those cases, which concerned the effect of an acquittal or the dismissal of criminal charges. An acquittal of a criminal offence, either in a domestic or foreign court, is no bar to the successful institution and conclusion of forfeiture proceedings under POCA against the person who has been acquitted, let alone against a third party. Cases about the effect of withdrawal of criminal proceedings on the position of the defendant if he is charged with the same offence a second time are so far removed from the issue that I have to determine that it is very difficult to discern any principled reasoning from them that can be safely applied in the present context.
It appears, therefore, that the issue before me is one on which there is no previous authority, although the scenario is unlikely to be unique.
This jurisdiction is not the only one in which it is considered to be an important policy objective that those who commit criminal offences should be deprived of the fruits of their criminal activity, including any profits they may have made. This spells out the message that crime does not pay. That policy objective has to be balanced against the other important policy objective of achieving finality in litigation that underlines the principle of res judicata.
The claim for a CRO is an action in rem; the claim under Part V of POCA is made against the property itself, and not against any particular individual, and a CRO, if and when granted, transfers title to the property to, and vests that title in, the trustee: POCA sections 266 and 269, and see SOCA v Perry (Nos 1 and 2) [2013] 1 AC 182, at paras 123-5 per Lord Phillips. As one might expect, the same appears to be true of forfeiture proceedings in Canada (Martineau v Minister of National Revenue 2004 SCC 81 [2004] 3 RCS 737, although that was a case dealing with a different forfeiture regime) and in the USA (see United States of America v Abacha and others [2015] EWCA Civ 1291, [2015] 1 WLR 1917 at paragraphs 65 and following).
Therefore, if an order for forfeiture or recovery of the proceeds of crime is made in proceedings of that nature, it confers title to the property upon the person to whom it is transferred by court order – in this jurisdiction, the Trustee – and that title will be, and has to be, good against the world in order for the forfeiture to be effective. It does not necessarily follow that the converse must be true, and that if an order for forfeiture is not made, the decision will be (or has to be) binding on the whole world.
An order or judgment made in those circumstances will not confer title to the property upon anyone; if it says anything at all on the subject, it will maintain the status quo by declaring the existing owner to be the lawful owner. If the property has been seized as an interim protective measure, it will direct its return to him or her. If the owner then moves the property out of that jurisdiction or sells it and the proceeds are received in a different jurisdiction, then it would frustrate the whole objective of depriving criminals of their ill-gotten gains if the relevant authorities in that jurisdiction, even if they had much stronger evidence than the authorities in the first jurisdiction, were forced to sit on their hands and let the property or its proceeds go free.
The POCA regime operates in a way that will often cause a person who is the lawful owner of property to be deprived of it, and it can have adverse effects on innocent third parties, including members of the offender's immediate family, although there are limited safeguards built in to the legislation so as to protect, among others, bona fide purchasers without notice.
In Canada, as in England and Wales, the fact that someone other than the defendant is the lawful owner of the property is no answer in itself to a claim for forfeiture: this much is clear from the provisions of the Canadian Criminal Code to which I have referred earlier in this judgment. However, a person who appears innocent of collusion or complicity in the defendant's wrongdoing may prevent an order for forfeiture of his or her property from being made, or may obtain a declaration that his or her interest in that property is not affected by an order for the forfeiture of it. Thus even an order for forfeiture is not the final determination against the whole world of who has interests in or title to the property, since it will be open to someone adversely affected by that order to make an application for relief under s.490.5(4) of the Code.
It follows that a declaration by the Canadian court that Mrs Saleh is the lawful owner of the GEI shares (or was before they were sold to Glencore) is immaterial to the issues that I have to determine. Indeed the fact that she paid the asking price for the GEI shares and acquired the legal title to them in 2009 has never been a matter of controversy. The reason why her ownership of and title to those shares was a matter of any concern in the forfeiture proceedings was that only the owner could sell them. Mrs Saleh could not participate in the sale to Glencore whilst there was any danger that they might be forfeited to the Canadian authorities.
The Canadian prosecuting authority withdrew its claim for forfeiture of all the shares (not just Mrs Saleh's shares) at a stage in the proceedings after interim steps had been taken to stop their disposal (the Management Order) but before the Canadian Court heard the claim for forfeiture, or even heard the motion to dismiss it. The forfeiture proceedings had been going on for over a year, but the only matters that had been dealt with during that time were of an essentially interlocutory nature, and the hearing at which the Order was put before the judge was not the hearing of the substantive claim (or of the motion for dismissal). There was no necessity for such a hearing, as the prosecution withdrew its claim.
The proposition that an order for the restoration of the shares to their lawful owner in consequence of the abandonment of forfeiture proceedings in Canada against them, somehow precludes the prosecuting authorities anywhere else in the world from initiating proceedings under their domestic legislation against the proceeds of sale of those shares located within their jurisdiction, and does so irrespective of the existence of a good arguable case in the second jurisdiction that they are recoverable property, is not an immediately attractive one. It appears even less attractive when one considers that the same argument could not be raised in respect of Mrs Niam's and Mr Hassan's shares, since the order directing their restoration did not contain the paragraph (or indeed the recital) upon which Miss Malcolm relies.
In my judgment, the Order does not have the effect for which Miss Malcolm contends. There are a number of reasons for this. First, although it was undoubtedly made by a Court of competent jurisdiction and it appears to have finally disposed of the forfeiture proceedings in Canada, it was not a judgment on the merits. It could not have been a judgment on the merits of the claim for forfeiture, because that claim had been withdrawn. In consequence of that withdrawal, when he made the Order, the judge was not adjudicating upon that claim. He was dealing with the aftermath of the claim being withdrawn, and making an order that was designed primarily to release the property from the (interim) Management Order and restore the GEI shares to Mrs Saleh in order that they could be replaced by Caracal shares, which could then be sold on to Glencore as part of the buy-out of GEI/Caracal.
By reason of the failure by the Crown to present any evidence, which is recorded in the recitals to the Order, Brooker J. never considered whether the case was, or would have been, a suitable one for forfeiture. He did not consider any legal arguments on the issues and, as the transcript of the hearing makes plain, he did not even have the relevant provisions of the Code before him, but took Counsel's word for it that he was making the order under the correct section.
I should make it very clear that these observations are not intended to be a criticism of the learned judge or of the Order that he made, let alone an attempt to embark upon what Rule 48 of Dicey makes it plain this Court should never do, namely, an examination of whether the foreign judgment or order was right or wrong. That is not a matter with which I am concerned. I am merely explaining that there are factors in this case which demonstrate that the process of adjudication on the merits of a claim or the issues arising in that claim described by Lord Brandon, and concurred in by Lord Diplock, in "The Sennar"(No 2) was absent. The situation is analogous to the situation in which a claim is dismissed for reasons unconnected with the merits of the issues that the court would have to determine, for example, for want of prosecution, or for non-compliance with directions. In this case the Order did not even dismiss the claim. Instead, it correctly recorded, in the recitals, that the Prosecution had served notice that it intended to withdraw the claim and that no evidence had been presented by the Crown.
The recitals make it plain that the court was making the order because, there being no evidence adduced to the contrary, it appeared that Mrs Saleh was innocent of collusion in or complicity in GEI's criminal conduct and thus the preconditions in the Code for making an order in those terms had been met. As Mr Beresh rightly told the learned judge, that repeated the language of the Code. Although the Order correctly records that the court heard representations from all the parties, it is not a ruling on the evidence or the competing legal arguments. Moreover, although the Order was not made by consent, it was unopposed, and prosecuting counsel went so far as to agree its terms and to sign the draft to signify this. In this specific context, its nature was not materially different from a consent order, which would not be a judgment "on the merits".
Secondly, even if I am wrong about this, on proper analysis the relevant paragraph of the Order operates partly in rem and partly in personam. Insofar as any part of the Order operates in rem it must be the part dealing with title to the GEI shares. The whole purpose of this Order was to restore the shares to their lawful owner, Mrs Saleh. Above and beyond making it clear to anyone who might be concerned about it that she had title to the shares, and could confer clean title on a purchaser, the Court was not seeking to achieve a final ruling on their status that would bind the whole world.
I have not yet mentioned paragraph 4 of the Order, which supports that conclusion. This provides that Mrs Saleh shall be entitled to provide a certified copy of the Order to Caracal Energy Inc's transfer agent and registrar, or to CIS when she surrenders her share certificates "evidencing her ownership of common shares in [GEI] (now Caracal Energy Inc) in exchange [for] share certificates to be issued by Caracal Energy Inc." The declaration by the Court that Mrs Saleh is (and was at all material times) the lawful owner of the shares is therefore part and parcel of the mechanism designed to facilitate the exchange of the GEI shares for Caracal shares, so as to enable the Glencore acquisition to proceed. There was understandable concern that the registrar would not have gone ahead with issuing substitute Caracal shares to Mrs Saleh if there remained any possibility that someone other than Mrs Saleh would acquire title to them through the mechanism of the forfeiture proceedings.
By contrast with the declaration of title, the adjudication that the shares "are neither crime related proceeds nor offence related property" is entirely incidental. Miss Malcolm submitted that the finding was a necessary step in order to make a finding that Mrs Saleh was entitled to the return of the shares. That cannot be right. It was unnecessary for the court to pronounce upon that matter in order to achieve the objective of transferring the shares back to Mrs Saleh so that she could sell them, because, even if the shares were offence related property, the fact she appeared innocent of complicity or collusion in GEI's criminal inducements to Mr Bechir and/or to her husband, Mr Takane, would have been sufficient for an order to have been made for their transfer back to her under s.490.4(3) of the Code.
Moreover, the issue of whether the GEI shares were crime related proceeds or offence related property arose in the specific context of a claim for forfeiture by the Canadian prosecuting authorities under the provisions of the Canadian Code. Viewed in that context, the court's adjudication on that issue could only have been intended to operate in personam between the Canadian prosecuting authorities and Mrs Saleh because, to the extent that it was an issue in the forfeiture proceedings, it was only an issue that arose between them. It was for the prosecution to prove that the requirements of s.490.1(1) of the Code were satisfied; but the Code is domestic Canadian legislation and these were domestic forfeiture proceedings. Therefore what was said in paragraph 3 of the Order on that subject cannot be interpreted as a declaration of the status of the shares that was intended to be binding on the world at large. That was not the function that the Canadian court was being asked to perform or purporting to perform by making such an Order.
The third reason is related to the second. On Miss Malcolm's case the adjudication that the shares are not "crime related proceeds" or "offence related property" is a determination of their status, in the sense that it determines once and for all time that they are and were untainted by any criminality on the part of GEI (or Mrs Saleh herself). I respectfully disagree with that analysis. Those two expressions are terms of art used and defined in Canadian legislation for the purposes of that legislation. An Order that they are not "offence related property" is self-evidently not the same thing as a declaration that they are not "recoverable property" as defined by POCA. To the extent that there has been any adjudication about their "status", above and beyond declaring who their lawful owner is, it goes no further than a final ruling that the shares cannot be forfeited by the authorities in Canada.
In order to run an argument of estoppel per rem judicatem, Miss Malcolm would have to rely on the underlying statutory definition of those terms of art, and submit that the Order necessarily means that the Canadian Court has made fact-findings and declarations, binding on the whole world, that the shares are not property by means of or in respect of which GEI committed the criminal offence to which it pleaded guilty, or that was used in any manner in connection with the commission of that offence and that because of this, it is not open to the SFO to run a factual case that seeks to prove otherwise. However as soon as one spells them out it becomes apparent that these implicit findings are not findings as to the status of the shares (in the sense of being findings as to their standing in criminal or civil proceedings that might arise outside Canada). They are fact-findings that are only binding as between the parties, i.e. the Canadian prosecuting authorities and Mrs Saleh (or possibly, anyone deriving title through her who might be regarded as "privy" for the purposes of res judicata/issue estoppel arguments).
Finally, even if those findings were declarations of the status of the shares in Canada, binding on the whole world, the issue in the English proceedings is whether the GEI shares were "property obtained through unlawful conduct". There can be no doubt that there was unlawful conduct by GEI, and that the opportunity to acquire the seedcorn shares only arose because GEI allowed Mrs Saleh to nominate two other people to receive them. The focus in England, under POCA, is on whether there was a causal connection between Mrs Saleh obtaining the shares and GEI's criminal conduct, and not on the use to which the shares themselves were put by GEI or the role they played in GEI's offending. Therefore, there is not necessarily an irreconcilable conflict between the underlying fact-findings inherently encompassed in the relevant parts of paragraph 3 of the Order and the facts that the SFO would need to prove in order to obtain a PFO or CRO in the proceedings in this jurisdiction.
For all those reasons I am not persuaded that there is anything in the terms of the Canadian Order that precludes the SFO by reason of estoppel per rem judicatem or issue estoppel from obtaining a PFO in this jurisdiction.
ALLEGED MATERIAL NON-DISCLOSURE
The case on non-disclosure to Mostyn J appeared to me to be somewhat nebulous. It was not at the forefront of Miss Malcolm's submissions and, as Mr Mitchell submitted, if Mrs Saleh had been truly concerned about non-disclosure, it seems likely that her legal team would have acted more swiftly to have the PFO set aside.
Miss Malcolm initially submitted that on the "without notice" application the court was not told about the length of time that the Canadian forfeiture proceedings had been on foot before they were withdrawn, and that the picture painted at the hearing of the "without notice" application was misleading because counsel then instructed by the SFO failed to correct a remark by the judge in which he appeared to be labouring under the misapprehension that the warrant for the shares had never been executed. Miss Malcolm contended that there could be a host of reasons why a warrant was not executed, but the fact the action was withdrawn would naturally raise an enquiry whether there was something wrong with the evidence or with the merits of the claim for forfeiture.
However, as I have already indicated, Ms Barnes' first witness statement stated that the shares were seized for forfeiture in February and March 2013 and that the Canadian authorities withdrew their action and released the shares in April 2014. It seems to me that this must have been what Mostyn J had in mind when he asked counsel why the Canadian authorities gave up, and counsel truthfully replied that he did not know. Even if, instead of using slightly loose terminology to describe what occurred, Mostyn J was truly labouring under a misapprehension and counsel failed to correct him, it still seems clear from the transcript that he had enough of a flavour of what had happened in Canada to make a fair evaluation of whether it should affect his decision to grant or refuse the PFO. That must have been the view that Mostyn J himself took, when the SFO came back and told him about the Order.
Miss Malcolm next sought to criticize the SFO for not taking steps to find out from the Canadian authorities themselves why the proceedings were withdrawn before the SFO sought the PFO. She submitted that it was incumbent on the SFO not only to put forward anything material to Mrs Saleh's likely defence of which it was actually aware, but to make reasonable inquiries of the PPSC to find out why it was that, after over a year, they had decided not to go ahead with the forfeiture claim. Although Miss Malcolm acknowledged that there was a degree of urgency involved in seeking a PFO, the SFO was not operating under such time constraints as to make these inquiries impracticable.
Indeed, it had only emerged much later, in a further witness statement of Ms Barnes dated 30 January 2015 in support of the application for a CRO, that before making the "without notice" application, the SFO had been in touch with the US Department of Justice on receipt of their Letter of Request in order to try and find out from them why the PPSC had withdrawn the forfeiture application. The US Department of Justice said they had asked the Canadians that question several times, but the Canadians had said they were unable to disclose the information unless the US authorities signed a non-disclosure letter that acknowledged that the information was protected by attorney-client privilege and that they would not disclose it further. The US Department of Justice had declined to sign the letter.
It can be inferred that a direct approach by the SFO to the Canadian authorities would have produced a similar response. Indeed it appears from Ms Barnes' latest statement that this is what did happen in September 2014 when the Canadians were approached, after the PFO had been granted. The Canadians were more than happy to share the reasons with the SFO but they wanted the SFO to sign a Non-Disclosure Agreement. Ms Barnes exhibited a copy of that Agreement to her statement of 30 January 2015. I am bound to say, having read it, that it would be very risky to assume that it would permit the SFO to tell the Court what it learned from the Canadian authorities, which could potentially place the SFO in a real difficulty if it signed up to the agreement and the reasons were such as would oblige the SFO to reveal them to the Court. Miss Malcolm submitted that the SFO could and should have reverted to the Canadians to seek clarification that they could tell the Court the reasons, or to seek express permission to do so, but there is no knowing whether it would have been forthcoming, especially if the Canadians did not want Mrs Saleh or her legal advisors to know what those reasons were.
One of the problems with the non-disclosure argument is that the reasons still remain a mystery. That being so, there is no basis for supposing that if the reasons had become known in consequence of further steps being taken by the SFO to press the Canadians to tell them, it would have made any difference to the exercise of the Court's discretion. The best outcome from Mrs Saleh's perspective would be if the reason was that the view was taken by their legal advisors in Canada that the Canadian prosecutors could not prove the claim against her without resorting to inadmissible evidence, (as Miss Malcolm contended was highly likely). However even if I were to assume that to have been the reason, it does not mean that there would have been no justification for granting a PFO in this jurisdiction – the position here is that there is ample evidence besides that which is challenged as having been obtained in breach of the Vienna Convention, to raise a good arguable case on the underlying claim for a CRO.
In any event, a perceived need to rely on inadmissible evidence in order to make good their case is not the only possible reason why the Canadian prosecuting authorities gave up when they did. If that were the reason, I find it quite surprising that the abandonment of the proceedings did not follow immediately on Mrs Saleh's motion to dismiss, but five months thereafter, and some two months after the judge had made a ruling in principle on contested issues of disclosure that was adverse to the prosecution.
It is possible that the PPSC did not wish Mrs Saleh or Mrs Niam to see certain information that GEI had disclosed in the criminal proceedings and were unwilling to take the risk that the judge would compel them to disclose it at the hearing due to take place on 16 April. Alternatively, it is possible that the decision to abandon the claim for forfeiture, which more or less coincided with Glencore's offer, was somehow related to that offer. The claim against Mrs Niam's and Mr Hassan's shares was also withdrawn, and so far as I am aware they had not issued a similar motion to dismiss it. The case regarding Mrs Niam's own shares was far stronger, and could be proved on the Agreed Statement of Facts without resorting to evidence obtained from her or from other Embassy staff. It seems odd that the PPSC would have decided to give that up, regardless of the position concerning the far smaller parcel of shares belonging to Mrs Saleh.
If the shares remained subject to the Management Order it might have been a fatal impediment to the buy-out of GEI/Caracal, which would increase their value substantially if it went ahead. Maybe the PPSC had its own reasons for wanting that sale to go ahead. Maybe it believed at the time (at least, before the Order was drafted by Mr Beresh) that withdrawing the claim for forfeiture before any consideration was given to it by the court might leave open the possibility of resurrecting it if the sale proceeds were paid to Mrs Saleh in Canada, as then seemed quite likely.
All of these theories are matters of pure speculation, and I mention them only to make it clear that Miss Malcolm's preferred explanation is by no means the only plausible candidate. At the end of the day I do not consider that the SFO was at fault in failing to contact the Canadians before it made its "without notice" application for the PFO. It is unlikely to have been any better informed if it had. The SFO's lawyers told the Court what they knew, and when they found out about the Order they told Mostyn J about it. He plainly did not feel that he had been misled in any material respect or that the SFO should be criticized (e.g. because they should have found out about it sooner than they did) which is why he ruled that the PFO should continue without another hearing.
In Jennings v Crown Prosecution Service [2006] 1 WLR 182, the Court of Appeal made it clear that even if there is a non-disclosure of material facts in a case such as this, the fact that the prosecution acts in the public interest will generally militate against discharging an order if, after consideration of all the evidence, the court considers it is appropriate to make such an order. The conduct complained of has to be particularly egregious to justify what the Court of Appeal described as the "ultimate sanction" of discharge. Even if I had been satisfied that there was material non-disclosure in the present case, which I am not, this is nowhere near the type of scenario in which it would be appropriate to exercise the court's discretion to discharge a PFO which is otherwise clearly justified.
CONCLUSION
For the reasons set out above, despite Miss Malcolm's valiant efforts to persuade me otherwise, Mrs Saleh's application to discharge the PFO fails on all grounds. That application is therefore dismissed.
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Mrs Justice Patterson:
Introduction
These are applications by the defendants for extensions to general civil restraint orders made by Spencer J on 12 July 2013 in claim number HQ10X01012 Rabia Sheikh v (1) Hugo Page and (2) Nigel Meares and in HQ09X00657 Anal Sheikh v Marc Beaumont. In each case an extension is sought for a further period of two years because, in the first case, the claimant is likely to be used by her daughter, Anal Sheikh, to bring vexatious and unfounded proceedings unless so restrained and, in the second case, because Anal Sheikh herself is likely to bring vexatious and unfounded proceedings unless so restrained. In each case various procedural orders are also sought which I will deal with at the end of this judgment.
Background
A civil restraint order was first made against Miss Sheikh on 15 July 2009 by Burnett J (as he then was) for a period of up to two years (CRO1). That order was extended for a further two years by Tugendhat J on 12 July 2011 (CRO2). On 12 July 2013 Spencer J made a further order (CRO3) against Miss Sheikh and her mother, Rabia Sheikh, for a period of two years. In the latter case Spencer J was satisfied that there were grounds for believing that Miss Sheikh was using her mother's name to circumvent CRO2 and so made a civil restraint order against Mrs Sheikh at the same time as extending the order against Miss Sheikh.
The applicants for the extension are two barristers who have been sued by Mrs Sheikh and against whom Miss Sheikh has made allegations of negligence, fraud and corruption. They are two of very many individuals who have received emails and threats from Miss Sheikh. The concern is that, from late 2014 Miss Sheikh has been sending numerous communications alleging grave misconduct on the part of an ever increasing list of wrongdoers, mostly lawyers, who have acted in litigation concerning her.
Mrs Sheikh is an 88 year old lady on whose behalf a witness statement was produced at the court hearing before me. In her witness statement she says that she is disabled, ill and unable to attend court. She was separately represented by Mr Rehman. Miss Sheikh represented herself.
The defendants Mr Page and Mr Meares were represented by Mr Speaight QC and Mr Beaumont was represented by Ms Oppenheimer.
I propose to structure this judgment in six parts:
i) Before and including 2009;
ii) 2010 to 2013;
iii) 2013 until 29 June 2015;
iv) Legal Framework;
v) Claimants' Cases;
vi) Conclusions.
Before and Including 2009
Miss Sheikh was a conveyancing solicitor. For many years she was the principal of a high street practice in Wembley.
Disciplinary proceedings were brought against her by the Law Society. On 1 May 2009 the Solicitors Disciplinary Tribunal found charges against Miss Sheikh to be proved. The main charges were that she had made improper transfers out of her client account and that she delivered a bill without any honest belief that it represented a proper fee. The tribunal found that, in those respects, she had acted dishonestly. She was struck off the Solicitors List on 5 May 2009.
Prior to then one of Miss Sheikh's clients, a Mr Dogan, set up a company known as Red River (UK) Limited to buy a former petrol station which had development potential. Miss Sheikh and her mother loaned money to Mr Dogan and his company to assist in the completion of property development in the Stoke Newington Road, London N16. Mrs Sheikh provided money to her daughter with which to make the loan. By way of security, restrictions in favour of both mother and daughter were placed on the title of the land at HM Land Registry.
Disputes arose between the Sheikhs and Mr Dogan and litigation ensued. The disputes were resolved and a settlement agreement was entered into. However, that broke down and, in 2007, proceedings were commenced in the Chancery Division by Red River (UK) Limited and Mr Dogan against Miss Sheikh and Mrs Sheikh. There were numerous contested interlocutory applications in the litigation; on twelve occasions Henderson J ruled that applications brought by the Sheikhs were totally without merit. The case ultimately came to trial before Henderson J who in April 2010 gave judgment at [2010] EWHC 961 (Ch). Almost all points on liability were decided against the Sheikhs.
The settlement agreement had provided for a payment to the Sheikhs of some £1.2 million. It was envisaged that that payment would be financed by a fresh loan raised on the security of the property. That could not be done without the release of the existing restrictions in favour of the Sheikhs. Many of the interlocutory hearings in the Chancery Division were concerned with working out how that mortgage could be accomplished.
On 2 October 2007 a hearing took place before Briggs J (as he then was). Miss Sheikh contends that the order that was made on that occasion was part of a conspiracy to defraud her. At the ultimate trial Henderson J found that there was no credible evidence to support any allegation of fraud. He found also that Miss Sheikh had intentionally and with her eyes open undermined the refinancing in such a way as to make it impossible to perform. The unfortunate outcome was that the Sheikhs received nothing from the settlement at all.
Miss Sheikh then began proceedings against Marc Beaumont, a barrister who had acted for her at one stage in the Red River saga, and alleged professional negligence on his part. She obtained judgment in default of defence but that was set aside. She then applied for summary judgment and for an interim payment. Mr Beaumont applied for the claim to be dismissed in its entirety on the grounds that it had no prospect of success. Those claims were heard by Simon J who gave judgment at [2009] EWHC 1619 (QB) in which he found against Miss Sheikh. He considered the twelve bases of claim advanced against Mr Beaumont and decided that none had any real prospect of success. He ruled that four applications brought by Miss Sheikh were totally without merit.
Miss Sheikh then issued proceedings in Willesden County Court against five more lawyers who had acted against her in the Beaumont case. Those claims were stayed on grounds that the case was an abuse of process, or alternatively, that it disclosed no reasonable grounds to bring the claim.
On 6 July 2009 two actions were commenced in the Chancery Division by Miss Sheikh and her mother as claimants against a total of 16 defendants. The defendants included three individual solicitors, two barristers who acted for the Dogans and Red River and Marc Beaumont and Mr Beaumont's wife. On 17 and 18 February 2010 Norris J struck out both actions against all professionals as disclosing no reasonable cause of action.
On 18 June 2009 Withers, solicitors acting on behalf of Marc Beaumont, had issued an application for a civil restraint order against Miss Sheikh. Having been adjourned for want of time on 25 June 2009 it came on as an effective hearing on 16 July. On that occasion Burnett J (as he then was) in a judgment at [2009] EWHC 2332 (QB) made a general restraint order to last for two years. In the course of his judgment Burnett J said:
"20. The way in which Miss Sheikh has behaved in respect of her litigation with Mr. Beaumont demonstrates in my view that she has been vexatious. It is clear that Miss Sheikh is using her legal knowledge acquired over years as a solicitor to harass not only Mr. Beaumont but also his wife and now his legal advisers. Whilst I understand the depth of her feelings about the way in which she says she has been treated her actions demonstrate an all too common feature of vexatious litigation. There is an underlying dispute that mushrooms out of control; disappointments in the courts are visited with further applications, appeals and fresh actions. The involvement of lawyers on the other side as defendants in due course is also a very common feature, so too is increasingly intemperate language to describe the conduct and actions of judges who have disappointed the litigant in the course of his/her travels through these courts. But it is clear from the conclusions reached by Henderson J last year in the Red River litigation, that this behaviour is not an altogether isolated incident. Miss Sheikh has taken a lot of time today to impress upon me that her underlying complaint about the Red River property transaction amounts to fraud, in respect of which she alleges many people were involved. She considers that in due course she will be vindicated in those proceedings. Nonetheless, it troubles me that she should have started fresh proceedings in the Chancery Division on 7th July. At the heart of it is a complaint against one of the claimants in the Red River litigation, and the hallmarks of vexation are, I am afraid, present in the very long list of defendants that one sees there."
He concluded that a general civil restraint order was proportionate. An extended restraint order would not be sufficient or appropriate in the case having regard to the history of unmeritorious applications made in other proceedings and the additional claims and applications that Miss Sheikh had flagged up in front of him on that day.
Miss Sheikh sought permission to appeal. Richards LJ, in orders dated 21 December 2009, found that her proposed appeals against the judgments of Burnett J and Simon J were totally without merit.
2010 to 2013
On 16 March 2010 proceedings were issued in the Queen's Bench Division in the name of Mrs Sheikh against Hugo Page QC and Nigel Meares claiming damages in the amount of £1.5 million. Both Mr Page and Mr Meares had acted for Miss Sheikh at different stages of the Red River litigation. Allegations were made in the particulars of claim that both had been negligent, acted in breach of their duties to Mrs Sheikh, acted in breach of contract and had conspired to defraud. In addition, the particulars of claim asked the court to make a number of declarations, amongst which was a claim that Simon J erred in his decision in the Marc Beaumont proceedings (to which Mrs Sheikh was not a party), that Marc Beaumont was negligent, that Norris J erred when he struck out the Sheikhs' claim against Mr Tom Smith, that Burnett J erred when he granted the civil restraint order and that Richards LJ erred in the Court of Appeal in his finding that Miss Sheikh's appeals in the proceedings against Marc Beaumont were totally without merit.
A hearing was held on 30 June 2010 before Deputy Master Hoffman which Miss Sheikh attended with her mother. The Deputy Master refused to allow Miss Sheikh to represent her mother and recorded his findings in relation to Mrs Sheikh's capacity and Miss Sheikh's involvement. In the transcript he said:
"Mother does not understand what is going on is being used by the daughter who has got a general restraint order against her, for her own ends and it is not something that the court is going to contemplate, so I am staying it."
He stayed the proceedings and ordered that no further application could be made without permission of a Queen's Bench Master.
In February 2011 Miss Sheikh applied to a High Court Judge for permission to issue a claim form against two other lawyers who had acted for her, namely, Gregory Treverton-Jones QC and Nigel West of RadcliffesLeBrasseur. Her proposed particulars of claim also alleged that the Law Society had committed banking fraud, used its powers illegally and relied on false and perjured evidence. She alleged that the Court of Appeal was part of a conspiracy against her. CRO1 required her to give notice to proposed defendants but she sought to issue the proceedings without giving such notice.
On 12 July 2011 Tugendhat J made an order extending for a further two years the general civil restraint order which had been made by Burnett J. In late 2012 Miss Sheikh began sending communications to senior members of government and the judiciary. She made a further complaint against Anesta Weekes QC who had acted for her at one stage in the Solicitors Disciplinary Tribunal proceedings.
Miss Sheikh then sought a default judgment on behalf of her mother in the action against Mr Page and Mr Meares. The application came on before Deputy Master Bard. He refused the application. Miss Sheikh contends that is evidence of the Deputy Master being part of a conspiracy against her.
Mr Page and Mr Meares were concerned that Miss Sheikh would commence fresh proceedings of some kind against them, if she was able to do so, but also that if the civil restraint order was not extended to include her mother she would use her mother's name to bring proceedings. As a result they sought a civil restraint order in respect of Mrs Sheikh at the same time as seeking an extension of Burnett J's order.
The most convenient vehicle in which to bring those applications was in the actions stayed by Deputy Master Hoffman. Permission was sought and granted by Master Eastman on 25 June 2013 to make an application to join Miss Sheikh in those proceedings.
2013 up to 2015
The substantive applications for civil restraint orders came before Spencer J on 12 July 2013. He extended the general civil restraint order in respect of Miss Sheikh for a further two years and made a similar civil restraint order in respect of Mrs Sheikh.
There was then a period of quietude but, on 2 January 2014, Miss Sheikh sent an email entitled 'Urgent Application to the Right Honourable Lord Justice Neuberger for Interim Relief in the UK Claim or in the Case of Anal Sheikh v The Law Society [2005] EWHC 1409'. She contended that the intervention by the Solicitors Regulation Authority was a hate crime.
The following month, on 26 February 2014, Miss Sheikh emailed Patricia Robertson QC saying that she was applying to the Supreme Court to join her as a respondent in her application.
In an email dated 4 March 2015 she sent an email to significant numbers of barristers involved in the Global Law Summit 2015 entitled "The Law Society's bank scam, fraud on the compensation fund, theft of solicitors' billed costs, theft of residual balances, theft of bona vacantia, theft of client deposits, theft of client data and its unlawful interventions into solicitors firms."
On 23 April 2015 Miss Sheikh emailed Ouseley J and Baroness Deech and copied in members of the board of the Council of the Inns of Court (COIC) giving notice of her intention to intervene in the case of Marc Beaumont v Bar Standards Board. She said that her description and history was set out in a document entitled UK37. She said:
"Mr Beaumont has also let me down very badly in what I call the SRA's bank scam, compensation fund fraud etc in which he acted. He has also behaved unconscionably in the Red River conveyancing and mortgage (also as defined) in which he purported to act. Finally, Mr Beaumont and Bar Mutual have embarked upon what I refer to as the Bar Mutual fraud."
On 30 April 2015 Miss Sheikh sought to intervene in a judicial review brought by Marc Beaumont against the Bar Standards Board which was listed for hearing before Ouseley J. During the course of those proceedings she was asked if she was wanting to be joined as an interested party. She replied:
"My Lord, firstly I seek to respond to Mr Hendy's comments. Put in a nutshell there is no civil restraint order but that obviously can't be in dispute."
She was asked then what she was seeking. She replied:
"What I seek my Lord, in broad terms is this I seek a remedy from the state for loss I have suffered because of … I will put it in these terms … an act of corruption by a public official. In narrative, I seek to be joined in these proceedings to ventilate issues concerning the role of barrister in these times of [several inaudible words] but that does need some explanation my Lord so I wonder if I can take a few minutes of your time."
On 6 May 2015 Miss Sheikh sought to intervene in the case of Rehman v Bar Standards Board before Lang J. Lang J recused herself but allowed Miss Sheikh ten minutes to address the court. During the course of that address she alleged that Hugo Page QC was a thief and that the civil restraint orders against her were fraudulent.
On 20 May 2015 Miss Sheikh contacted the Bar Tribunals and Adjudication Service seeking to intervene in the interim suspension of Tariq Rehman. Her email was copied to Howard Kennedy, solicitors acting for Mr Beaumont. In turn they wrote to the Bar Tribunals and Adjudication Service saying that although they appreciated that the general civil restraint order concerned litigation only their client was concerned that Miss Sheikh should not be allowed to intervene in or influence disciplinary proceedings.
On 1 June Miss Sheikh responded with a further email to which were attached applications to:
i) Commit Mr Leigh (partner at Howard Kennedy) and Mr Beaumont to prison for contempt of court;
ii) An application made under section 50 of the Solicitors Act 1974 to strike off Mr Leigh from the roll of solicitors.
On 20 May 2015 an application notice was issued in CO/4920/2014 between Tariq Rehman and the Bar Standards Board which referred to Miss Sheikh as the third appellant and the tenth intervener.
On 3 June 2015 Miss Sheikh emailed the president and members of the COIC about their consideration of the case of Marc Beaumont, the SRA's bank scam, the compensation fund fraud etc, the Red River conveyancing and mortgage fraud, the Bar Mutual fraud, the theft of Margaret Gomm's house and 3.5 acres of land and other frauds.
On 4 June 2015 Miss Sheikh emailed Mr Coffin, the partner at Withers, with conduct of the current application before the court. In that she said:
"If you proceed with this fraudulent application I will apply under section 50 of the Solicitors Act 1974 to have you removed from the roll. Please let me know the name of any barrister whom you propose to instruct in advance of any hearing as I am applying for interim suspensions for everyone connected with the Red River fraud."
On 5 June 2015 the Bar Mutual Indemnity Fund received an email from Tariq Rehman entitled 'Rabia Sheikh v Hugo Page and Nigel Meares' referring to his client's issued breach of duty claim.
Legal Framework
CPR 3.11 provides that a practice direction may set out circumstances in which the court has power to make a civil restraint order. PD 3(C) is the relevant Practice Direction. The provisions in relation to general civil restraint orders are set out in the Annex to this judgment.
The question for me, as it was for Burnett J, and those subsequently who considered applications for renewal is whether a general civil restraint order is proportionate and required in this case or whether either a limited civil restraint order or extended civil restraint order would be sufficient.
The Claimants' Cases
In presenting her case to the court Miss Sheikh spent a lot of time and was extremely anxious that I should understand what went on in 2007. She submits that the events between 2 October 2007 and 5 October 2007 are fundamental to any understanding of the issues that have arisen since. None of the lawyers or judges who have been involved have been conveyancers. She had instructed Mr Page and Mr Meares to draft a legal charge as part of what became the Red River litigation. She is quite satisfied that no person since 5 October 2007 has made a valid judgment or understood matters properly.
She says that she obtained a judgment in default in the sum of £900,000 in May 2009 which has just disappeared.
The whole process is an insurance fraud conducted to avoid paying her money which she is owed.
She maintained that she has not seen the emails that were sent to her as part of the documents in relation to the current application. That is despite the fact that she responded to at least one of them. She says that she is a victim. She is convinced that the fraudulent proceedings have worked. The allegations made are a sham, as are all the documents. These proceedings are not the way to deal with the situation.
The basic flaw she contends is that there is no basis to proceed when a judgment in default has been obtained. Deputy Master Bard did not understand the Red River fraud and wanted to steal the money that she was rightfully owed.
She did not deny sending the emails attributed to her.
On behalf of Mrs Sheikh, Mr Rehman made the point that she was properly an interested party having been involved in the loan advanced as part of the Red River litigation. If there is a professional negligence claim against Messrs Page and Meares then she is a proper party to that action. She took action in issuing the particulars of claim in April 2010. That action has never been determined. Accordingly, those proceedings remain outstanding. Mrs Sheikh has a legitimate cause of action which she should be entitled to pursue. It has to be recalled that this is an 88 year old lady so the fact of her forgetfulness is easy to understand. All that the defendant is able to point to is a finding by Deputy Master Hoffman in June 2010, a long time ago, that she was being used in proceedings before him. His observation then is not an indication that Mrs Sheikh will put her signature to other documents or matters and will be used as a conduit for her daughter.
At the hearing the claimants produced a file which included the witness statement of Rabia Sheikh which I have already referred to. That was signed by her. In the course of making her submissions Miss Sheikh said that she was the author of her mother's statement. It is evident from that that she is very much involved in her mother's case as she is in her own.
Conclusions
The difficulty is that, whilst I would ordinarily be sympathetic towards a forgetful 88 year old lady, the history of the events since 2007 up to and including the recent witness statement mean that there is every possibility that if a general civil restraint order is not continued vexatious proceedings will be issued in Mrs Sheikh's name alleging bribery on the part of the Deputy Master Bard who, it is contended, wrongly failed to grant Ms Sheikh judgment in default, to name but one likely recipient of proceedings.
On that, it is of note that in the judgment of Simon J (at paragraphs 66 and 67) he refers to a default judgment obtained by Miss Sheikh which was then set aside. Withers had learnt of the judgment from a journalist from the Sun newspaper. As a result, on 29 May, Master Eastman ordered that the judgment be set aside on the basis that it had been made erroneously. Simon J found that in the light of that history it was clear that the claimant's application to restore the judgment in default was wholly without merit and would be refused.
Further, after the successful strike out of the proceedings brought by Miss Sheikh against Mr Beaumont shortly thereafter proceedings in which he was included as a defendant were started in the Chancery Division.
I cannot ignore the persistent way in which the claimant has pursued people against whom she perceives she has a genuine grievance. That conduct has continued up to and including June 2015. As part of that course of conduct she has demonstrated that she has no compunction in using her mother as a tool in her broader litigation aims. The behaviour is very much that of a vexatious litigant.
In the circumstances I have no doubt that the renewal which is sought of the general civil restraint orders is both necessary and proportionate in the circumstances of the case.
Procedural Matters
At present in the proceedings by Rabia Sheikh against Mr Page and Mr Meares no action can be taken without the permission of the court. I consider that is not needed in terms of any other application which may need to be made for future civil restraint orders against Mrs or Miss Sheikh.
Miss Sheikh should be added as a party to the action against Mr Page and Mr Meares both to allow for this application and for any future applications for extensions of civil restraint orders against her.
It is not known where Miss Sheikh or Mrs Sheikh are currently living. Master McCloud's order made provision for service on Miss Sheikh and Mrs Sheikh at five email accounts which Miss Sheikh has used in recent years. At least one must have been successfully received as Miss Sheikh was able to prepare volumes of documentation and appear at the court proceedings before me.
Other Matters
Miss Sheikh wanted an order made in terms of a draft which she included in the red file submitted on the day of the hearing. That included an order that judgment in default in Rabia Sheikh v Hugo Page be entered forthwith in the sum of £8 million payable on account with the hearing to be listed on the first open day after a date to be determined for directions as to the quantification of damages.
She sought also a similar judgment in default in relation to her case against Marc Beaumont. Further, if the parties did not show cause why those orders should not be made then she sought an order that they be committed to prison for contempt of court on the basis that they have conspired with others to commit the Red River conveyancing and mortgage fraud and various other matters.
No notice was given of an application for an order in those terms. As Miss Sheikh was keen to refer the court to the CPR on other matters, she must know that there is no basis for the court considering such orders without notice.
Another matter which emerged during the course of the hearing was a submission made by Miss Sheikh that Mr Speaight QC, who appeared on behalf of the defendants Page and Meares, should be committed for contempt. As I pointed out there is a well trodden process to be gone through for contempt proceedings commencing with an application notice and proceeding in accordance with the current Practice Direction. That had not been followed. If Miss Sheikh wishes to pursue that course then that is what she should do having, in the circumstances, obtained permission of the court to do so.
The documentation in a case such as this is voluminous. I have taken into account all of the evidence which is relevant to the issues before the court in relation to the applications which I had to determine.
ANNEX I
Practice Direction 3C – Civil Restraint Orders:
"3CPD.4 – General Civil Restraint Orders
4.1 A general civil restraint order may be made by-
(1) a judge of the Court of Appeal;
(2) a judge of the High Court; or
(3) a Designated Civil Judge or their appointed deputy in the County Court,
where the party against whom the order is made persists in issuing claims or making applications which are totally without merit, in circumstances where an extended civil restraint order would not be sufficient or appropriate.
4.2 Unless the court otherwise orders, where the court makes a general civil restraint order, the party against whom the order is made-
(1) will be restrained from issuing any claim or making any application in-
(a) any court if the order has been made by a judge of the Court of Appeal;
(b) the High Court or the County Court if the order has been made by a judge of the High Court; or
(c) the County Court if the order has been made by a Designated Civil Judge or their appointed deputy,
without first obtaining the permission of a judge identified in the order;
(2) may apply for amendment or discharge of the order provided he has first obtained the permission of a judge identified in the order; and
(3) may apply for permission to appeal the order and if permission is granted, may appeal the order.
4.3 Where a party who is subject to a general civil restraint order-
(1) issues a claim or makes an application in a court identified in the order without first obtaining the permission of a judge identified in the order, the claim or application will automatically be struck out or dismissed-
(a) without the judge having to make any further order; and
(b) without the need for the other party to respond to it;
(2) repeatedly makes applications for permission pursuant to that order which are totally without merit, the court may direct that if the party makes any further application for permission which is totally without merit, the decision to dismiss that application will be final and there will be no right of appeal, unless the judge who refused permission grants permission to appeal.
4.4 A party who is subject to a general civil restraint order may not make an application for permission under paragraphs 4.2(1) or 4.2(2) without first serving notice of the application on the other party in accordance with paragraph 4.5.
4.5 A notice under paragraph 4.4 must-
(1) set out the nature and grounds of the application; and
(2) provide the other party with at least 7 days within which to respond.
4.6 An application for permission under paragraphs 4.2(1) or 4.2(2)-
(1) must be made in writing;
(2) must include the other party's written response, if any, to the notice served under paragraph 4.4; and
(3) will be determined without a hearing.
4.7 An order under paragraph 4.3(2) may only be made by-
(1) a Court of Appeal judge;
(2) a High Court judge; or
(3) a Designated Civil Judge or their appointed deputy.
4.8 Where a party makes an application for permission under paragraphs 4.2(1) or 4.2(2) and permission is refused, any application for permission to appeal-
(1) must be made in writing; and
(2) will be determined without a hearing.
4.9 A general civil restraint order-
(1) will be made for a specified period not exceeding 2 years;
(2) must identify the courts in which the party against whom the order is made is restrained from issuing claims or making applications; and
(3) must identify the judge or judges to whom an application for permission under paragraphs 4.2(1), 4.2(2) or 4.8 should be made.
4.10 The court may extend the duration of a general civil restraint order, if it considers it appropriate to do so, but it must not be extended for a period greater than 2 years on any given occasion.
4.11 If they consider that it would be appropriate to make a general civil restraint order-
(1) a Master or a District Judge in a district registry of the High Court must transfer the proceedings to a High Court judge; and
(2) a Circuit Judge or a District Judge in the County Court must transfer the proceedings to the Designated Civil Judge."
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MR JUSTICE PICKEN:
Introduction
This is an application by The International Oil Pollution Compensation Fund 1992 (the 'IOPC Fund 1992') which concerns an order made on 18 March 2015 by Master Eastman (the 'Registration Order') registering a judgment of the Honourable Judge Freddy Belisario Capella of the Maritime Court of Appeal with National Competence in the City of Caracas (Bolivarian Republic of Venezuela) dated 24 September 2009 (the 'Venezuelan Judgment') as a judgment in the Queen's Bench Division of the High Court of Justice.
The IOPC Fund 1992 seeks a declaration that the Registration Order does not apply to it, or alternatively an order that the Registration Order be set aside on the basis that the IOPC Fund 1992 is immune from jurisdiction and enforcement pursuant to the 1992 Headquarters Agreement entered into between the Government of the United Kingdom and the IOPC Fund 1992 (the 'HQ Agreement') and/or by virtue of Article 5 of the International Oil Pollution Compensation Fund 1992 (Immunities and Privileges) Order 1996 (the '1996 Order').
The matter comes before me following a hearing on 11 June 2015, when I made an Order setting aside a Writ of Control which had been obtained in relation to the Registration Order. I made that Order on the basis that the Writ of Control should not have been obtained, in circumstances: (i) where CPR 74.9(1) provides that, where an application has been made to set aside a registration order, 'no steps may be taken to enforce the judgment' until that application has been determined; and (ii) where, as it would appear, the Registration Order itself stipulated that no steps were to be taken in the event that a setting aside application were to be made.
On the previous occasion, the IOPC Fund 1992 was represented both by solicitors, Reed Smith LLP, and by counsel, Mr Jonathan Hirst QC and Mr Oliver Jones. The IOPC Fund 1992 continues to be represented by this legal team.
The Applicant, Sindicato Unico De Pescadores Del Municipio Miranda Del Estado Zulia (the 'SUP'), a trade union representing fishermen in Venezuela, was not, however, formally represented on that occasion. Although there was attendance by two representatives of the firm of solicitors then on the record for the SUP, Alberto Perez Cedillo, I was informed that neither of the representatives of that firm who attended before me had conduct of the proceedings on behalf of the SUP. I was told also that Alberto Perez Cedillo were in the process of coming off the record. This has now happened. Alberto Perez Cedillo no longer act for the SUP. The SUP appointed new solicitors, Dutton Gregory LLP, although, in the event, at the hearing of these applications, counsel, Mr Stewart Patterson, appeared on a direct access basis and was not instructed by Dutton Gregory LLP.
The IOPC Fund 1971
It is important, by way of background, to explain something about the establishment of the IOPC Fund 1992. This is a matter which was addressed in the witness statement of Mr Andrew Taylor, a partner in Reed Smith LLP, made on 27 May 2015. Mr Taylor has conduct of this matter on behalf of the IOPC Fund 1992.
As explained by Mr Taylor, the IOPC Fund 1992 is established as a body corporate pursuant to Article 4 of the 1996 Order. Before enlarging on this, as I shall come on to do, I need, first, to say something about The International Oil Pollution Compensation Fund 1971 (the 'IOPC Fund 1971'). For the present, I shall endeavour to deal only with matters which are uncontroversial, since, as will appear, on behalf of the SUP, Mr Patterson advances a case that the IOPC Fund 1992 has taken over, as he puts it, the IOPC Fund 1971's "rights and liabilities".
The IOPC Fund 1971 was an international organisation which possessed a legal personality recognised under both international law and the law of the United Kingdom. It was established on 16 October 1978 when the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage 1971 (the '1971 Fund Convention') entered into force, having earlier been adopted on 18 December 1971. Specifically, Article 2(1) of the 1971 Fund Convention established, 'The International Oil Pollution Compensation Fund' as an international organisation. This was followed by Article 2(2), which required that the IOPC Fund 1971 should be given legal personality in the Contracting States. Thus, in the United Kingdom, Article 4 of the International Oil Pollution Compensation Fund (Immunities and Privileges) Order 1979 (the '1979 Order') provided that "[t]he IOPC Compensation Fund is an organisation of which the United Kingdom and foreign sovereign Powers are members" and Article 5 provided that, "[t]he Fund shall have the legal capacities of a body corporate".
As explained in Mr Taylor's witness statement, the IOPC Fund existed as part of "two separate well-demarcated, international regimes for the compensation of certain types of damage caused by oil spills from tankers". This involved a two-tier system: the primary liability of shipowners established under the International Convention on Civil Liability for Oil Pollution Damage 1969 (the '1969 Civil Liability Convention'), and supplementary compensation provided by the IOPC Fund 1971 pursuant to the 1971 Fund Convention. A convenient summary of this two-tier system is set out in Gard v Oil Pollution Compensation Fund [2014] 2 Lloyd's Rep. 219, in which Hamblen J described the position in the following way at [6] and [7]:
"The CLC
6. The Convention on Civil Liability for Oil Pollution Damage of 1969 (the 'CLC') provides for compensation for parties who suffer loss as a result of marine oil pollution incidents. The general scheme of the CLC Convention is as follows:
(1) Shipowners are made strictly liable in respect of oil pollution damage, with very limited exceptions (Art III).
(2) The amount of that liability is however limited to an amount calculated by reference to the tonnage of the vessel (Art V (1)).
(3) Shipowners may lose the right to rely on the limit of liability if the incident was due to their actual fault or privity (Art V (2)).
(4) Shipowners may avail themselves of the benefit of limitation by establishing a fund with the competent court for the limitation amount, and this may be constituted by means of a bank guarantee if acceptable to the court (Art V(3)).
(5) If they have established a fund, and are entitled to limit liability, the court shall order the release of any ship or other property of the owner which has been arrested (Art VI (1)).
(6) The courts with exclusive jurisdiction in relation to Convention claims are the courts for the place in which the damage occurred (Art IX (1)).
(7) Shipowners are required to have insurance in respect of this liability (Art VII).
(8) Claimants have a right of direct action against the insurer (here Gard) (Art VII (8)).
(9) However, the insurer is entitled to rely on the limit of liability even where there is actual fault or privity on the part of the shipowner (Art VII (8)).
(10) Where the amount of the limit of liability is insufficient to meet all claims, then each claimant is only entitled to recover its prorated share of its claim (Art V (4)).
The Fund Convention
7. The Fund Convention provides a second tier of compensation for parties who suffered loss by reason of oil pollution incidents, over and above the layer of compensation provided by the CLC. Its general scheme is as follows:
(1) The Fund is to provide compensation in respect of amounts which are irrecoverable under CLC either because shipowners are not liable under CLC, or because the amounts in question cannot be recovered from shipowners, or because the limit under CLC is too little to provide adequate compensation (Art 4(1)).
(2) The Fund's liability is limited to an amount of SDR 60 million (Art 4(4) (a)).
(3) In addition to the compensation payable to third parties, the Fund Convention provides for the payment to Shipowners of the top slice of the CLC liability (Art 5(1)).
(4) The Courts with exclusive jurisdiction in relation to Convention claims are the courts for the place in which the damage occurred (Art 7).
(5) Where claims are made against the shipowner or its guarantor, then either party to the relevant proceedings may notify the Fund of those proceedings and if the Fund has had the opportunity to intervene, the Fund is bound by the facts and findings in that judgment even if the Fund has not in fact intervened (Art 7(5) and (6)).
(6) Where the amount of the limit of liability is insufficient to meet all claims, then each claimant is only entitled to recover its prorated share of its claim (Art 4(5))."
Mr Taylor went on to explain, however, that the 1971 Fund Convention ceased to be in force and have any binding effect from 24 May 2002 onwards. The reason for this was described by Hamblen J in Gard at [16] as follows:
"Following the entry-into-force in 1996 of the modified version of the compensation regime contained in the 1992 Civil Liability and Fund Conventions, the number of State parties to the Fund Convention reduced progressively to the extent that the Fund Convention ceased to be in force on 24 May 2002. … ."
The IOPC Fund 1971 was subsequently dissolved and ceased to exist with effect from 31 December 2014. This was pursuant to a resolution adopted by the IOPC Fund 1971 on 24 October 2014. As explained in the announcement accompanying publication of this resolution on 17 November 2014:
"The 1971 Fund Convention ceased to be in force on 24 May 2002 in accordance with Article 43(1) of the 1971 Fund Convention as amended by Article 2(a) of the Protocol of 2000 to the Convention, however the 1971 Fund retained its legal personality in accordance with Article 44(3).
The Director would like to inform all States having at any time being Members of the 1971 Fund, the Secretary-General of the International Maritime Organisation (IMO) in his capacity as Depositary of the 1971 Fund Convention, and all other relevant organisations, as well as the Government of the United Kingdom of Great Britain and Northern Ireland that at its thirty-third session, the 1971 Fund Administrative Council adopted Resolution No. 18 on the Dissolution of the International Oil Pollution Compensation Fund (1971 Fund), which is enclosed for information.
In accordance with this Resolution, the 1971 Fund with effect from the expiry of the last day of the financial year 2014 (31 December 2014), shall be dissolved and its legal personality shall cease to exist.
In view of the above, in particular the imminent dissolution of the 1971 Fund as from 31 December 2014, all States having at any time been Members of the 1971 Fund may wish to take action as they deem appropriate.
This decision does not affect the functioning of the international compensation regime as implemented by the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage (1992 Fund Convention) and the Protocol of 2003 to the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage, 1992 (Supplementary Fund Protocol) and therefore the 1992 Fund and the Supplementary Fund will continue to operate after the dissolution of the 1971 Fund."
The IOPC Fund 1992
Like the IOPC Fund 1971, the IOPC Fund 1992 is an international organisation possessing a legal personality recognised both under international law and United Kingdom law. As stated in the 17 November 2014 announcement, the IOPC Fund 1992 was established by the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage, 1992 (the '1992 Fund Convention'). Consistent with the last paragraph in the announcement accompanying the resolution concerning the dissolution of the IOPC Fund 1971, the IOPC Fund 1971 and the IOPC Fund 1992 are separate legal entities, recognised as such by both international law (namely the 1971 Fund Convention and the 1992 Fund Convention) and under English law (namely the 1979 Order and the 1996 Order).
The 1992 Fund Convention entered into force on 30 May 1996, having itself been adopted on 27 November 1992 at an international conference convened by the International Maritime Organisation (the 'IMO'). The relevant provisions of the 1992 Fund Convention were, as they had been in relation to the 1971 Fund Convention, Articles 2(1) and 2(2). Specifically, Article 2(2) provided as follows:
"The Fund shall in each Contracting State be recognised as a legal person capable under the laws of that State of assuming rights and obligations and of being a party of legal proceedings before the courts of that State…".
Like the IOPC Fund 1971, the IOPC Fund 1992 also involved a two-tier system, but not the same as that with which the IOPC Fund 1971 was concerned: the primary liability of shipowners established under the International Convention on Civil Liability for Oil Pollution Damage 1992 (the '1992 Civil Liability Convention') and supplementary compensation provided by the IOPC Fund 1992, pursuant to the 1992 Fund Convention.
Immunity
I return, later on, to the SUP's case that the IOPC Fund 1992 has taken over the IOPC Fund 1971's "rights and liabilities". First, however, I need to address the topic of immunity. I focus, for these purposes, on the IOPC Fund 1992, rather than the IOPC Fund 1971. In view of the fact that the IOPC Fund 1992 has its headquarters in London, the IOPC Fund 1992 entered into the HQ Agreement with the Government of the United Kingdom of Great Britain and Northern Ireland. The HQ Agreement contains introductory wording by way of recital, as follows:
"The Government of the United Kingdom and Northern Ireland and the International Oil Pollution Compensation Fund 1992;
Desiring to define the status, privileges and immunities of the 1992 Fund and persons connected with it;
Have agreed as follows: …".
Amongst the matters agreed in the HQ Agreement is that the IOPC Fund 1992 should have immunity. Thus, Article 5 ("Immunity") provides as follows:
"(1) Within the scope of its official activities the 1992 Fund shall have immunity from jurisdiction and execution except:
(a) to the extent that the 1992 Fund waives such immunity from jurisdiction or immunity from execution in a particular case;
(b) in respect of actions brought against the 1992 Fund in accordance with the provisions of the Convention;
(c) in respect of any contract for the supply of goods or services, and any loan or other transaction for the provision of finance and any guarantee or indemnity in respect of any such transaction or of any other financial obligation;
(d) in respect of a civil action by a third party for damage arising from an accident caused by a motor vehicle belonging to, or operated on behalf of, the 1992 Fund or in respect of a motor traffic offence involving such a vehicle;
(e) in respect of a civil action relating to death or personal injury caused by an act or omission in the United Kingdom;
(f) in the event of the attachment, pursuant to the final order of a court of law, of the salaries, wages or other emoluments owed by the 1992 Fund to a staff member of the 1992 Fund;
(g) in respect of the enforcement of an arbitration award made under Article 23 of this Agreement; and
(h) in respect of a counter-claim directly connected with proceedings initiated by the 1992 Fund."
The immunities of the IOPC Fund 1992 contained in Article 5 of the HQ Agreement are replicated in Article 5(1) of the 1996 Order. The only difference is that the introductory wording is slightly, and not materially, as far as I can tell, different, since it refers to the IOPC Fund having "immunity from suit and legal process" subject to the same exceptions at (a) to (h) above.
Mr Hirst QC submits that the only exception of any potential relevance in the present case is the exception contained in Article 5(1)(b) of both the HQ Agreement and the 1996 Order, namely that the IOPC Fund 1992 is not immune "in respect of actions brought against the 1992 Fund in accordance with the provisions of the [1992] Convention". As I understand it, Mr Patterson agrees with this. Unless, therefore, that exception can be shown to apply, then the IOPC Fund 1992 cannot be the subject of any adjudicatory or enforcement proceedings brought before the courts of the United Kingdom.
The Venezuelan Judgment
The Venezuelan Judgment, the judgment to which the Registration Order made by Master Eastman relates, was a judgment given by the Honourable Judge Freddy Belisario Capella on appeal, and was concerned with an oil spillage from the tanker 'PLATE PRINCESS'. As Mr Patterson helpfully explains in his skeleton argument, this spillage took place on 27 May 1997, when the 'PLATE PRINCESS' was docked in the port of Puerto Miranda in the State of Zulia. Specifically, she was loading crude oil whilst at the same time discharging ballast into the waters of Lake Maracaibo, when it became clear that the ballast had become polluted with the oil. This was the result of the ballast line's couplings having become loose in circumstances where the ballast line passed through the tanks into which the cargo of crude oil was being loaded, so meaning that the crude oil was able to seep into the ballast line during de-ballasting. Before it was appreciated that there was a problem and operations were stopped, something in the region of 8,000 tonnes of polluted ballast had been discharged. Through the operation of tides and currents, the resultant pollution was spread over a wide area, affecting the nets and other equipment of over 800 fishing boats and some 300 or so cast-net fishermen. Accordingly, the day after the incident, the SUP's Secretary General lodged a claim before the Venezuelan authorities with regard to the damage caused to the boats, fishing nets and other equipment owned by the local fishermen.
After proceedings lasting several years, culminating in an appeal, the SUP was awarded Bs.F 2,844,982.95 against the owner of the 'PLATE PRINCESS', and, as will appear later, Bs.F 400,628,021.85 (corresponding to 56,300,000 special drawing rights, or SDRs, and the equivalent, as I understand it, in today's money, of about £51 million) against "The INTERNATIONAL FUND FOR COMPENSATION FOR OIL POLLUTION DAMAGE". Mr Patterson highlights, in particular, that the Venezuelan Judgment contains the following criticism:
"With respect to the attitude of the IOPC Funds not to fulfil its obligation to compensate, citing a hypothetical lack of notification to the said international body to efficiently intervene in this trial, this Court considers that as smokescreen to justify a breach, especially since the IOPC Funds had in its favour all procedural lapses and exercised its defences in a timely manner, so that their attitude causes prejudice and incommensurable problems to 676 under-privileged fishermen, because every day they run the risk that the lake scene where they conduct their fishing operations will be constantly threatened by oil spills, also unpredictable, and the risk as well that the international body that has to compensate them will use a rational argument and sphinx-like viewpoints to elude of the sacred obligation assigned to them by the legal system to which they owe their international existence."
That, I stress, is a translation from the Spanish, and this might explain some of the expressions used.
Mr Taylor explains in his witness statement that, because the spillage took place on 27 May 1997, it is the 1969 Civil Liability Convention and the 1971 Fund Convention which are relevant. This, Mr Taylor goes on to explain, is because, at the time of the incident, Venezuela was a party only to those Conventions. This is a matter to which I shall have to return, but it is the case that Venezuela only became a party to the 1992 Civil Liability Convention and the 1992 Fund Convention on 22 July 1999. This is demonstrated by the IMO document entitled "Status of Multilateral Conventions and Instruments in respect of which the International Maritime Organisation or its Secretary-General performs depositary or other functions". This makes it clear at page 253, as it appears in my bundle, that Venezuela deposited the relevant instrument (see Article 12.3) on 22 July 1998, and that 22 July 1999, in other words a year later, is the relevant "date of entry into force" as far as Venezuela is concerned. On this basis, Mr Hirst QC submits that only the IOPC Fund 1971 could find itself with any potential liability to the SUP.
Mr Hirst QC submits that this is the case is confirmed by the Venezuelan Judgment itself, specifically how the parties to the proceedings in Venezuela are identified. As to this, after identification of the SUP as the claimant and then the defendant being named as Subramania Balakrishna Subramanian, "captain of the tanker PLATE PRINCESS, acting as Commercial Agent and Legal Representative (Factor Mercantil) of the owner of the tanker PLATE PRINCESS according to Venezuelan law", the "Third Party Appellant" is identified as being "INTERNATIONAL FUND FOR COMPENSATION FOR OIL POLLUTION DAMAGE, 1971, domiciled in Portland House, Stagg Place, London SW1E 5PN, United Kingdom". The Venezuelan Judgment goes on to contain repeated references to "INTERNATIONAL FUND FOR COMPENSATION FOR OIL POLLUTION DAMAGE, 1971".
It is clear that the Venezuelan Judgment makes no express reference to the IOPC Fund 1992. Nevertheless, it is right to acknowledge that the various references to which I have referred are immediately followed in brackets by the words, "IOPC Funds", which does seem a little curious, given that the IOPC Fund 1971 is (or was) a single fund. It is also right to point out that, in some places, the references are to "INTERNATIONAL FUND FOR COMPENSATION FOR OIL POLLUTION DAMAGE", without the addition of the "1971". Against this, however, the Venezuelan Judgment is very specific in its identification of the IOPC Fund 1971, including most significantly at page 20 where reference is made to the first instance judgment "published on 5 February 2009" declaring that:
"SECOND: Is Ordered to the INTERNATIONAL FUND FOR COMPENSATION FOR OIL POLLUTION DAMAGE created in accordance with International Convention on Establishment of an International Fund for Compensation for Oil Pollution Damage, 1971, in accordance with the procedures provided in the said International Convention and the decisions adopted by its internal organisms, must compensate to the 676 Fisherman identified in the civil law suit filed by the aforementioned SINDICATO UNICO DE PESCADORES DEL MUNICIPIO MIRANDA DEL ESTADO ZULIA, … ".
Further, in a section at the end entitled "DISPOSITIVE OF JUDGMENT", the following is declared:
"FIRST: DENIED, Motion to appeal filed on 01 December 2008, by attorney HENRY MORIAN-PINERO, acting his capacity as judicial representative of INTERNATIONAL FUND FOR COMPENSATION FOR OIL POLLUTION DAMAGE, 1971 (IOPC Funds), against the judgment issued on 24 November 2008 by the Maritime Court of Appeals with National Jurisdiction and Based in the city of Curacaos …
…
EIGHTH: The INTERNATIONAL FUND FOR COMPENSATION FOR OIL POLLUTION DAMAGE, constituted according to the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage, 1971, in accordance with the mechanisms set out in the aforementioned international convention and the resolutions adopted by its internal bodies, IS HEREBY SENTENCED to pay the amounts of money exceeding TWO MILLION EIGHT HUNDRED AND FORTY FOUR THOUSAND NINE HUNDRED AND EIGHTY TWO BOLIVARES FUERTES AND NINETY FIVE CENTS (Bs.F. 2844,982.95), which is the amount that constitutes the FUND by CIVIL LIABILITY LIMITATION for Material Damages, Loss of Earnings, Interests and Costs. "
Elsewhere in the Venezuelan Judgment, or perhaps more strictly a related document which followed the Venezuelan Judgment and was concerned with the assessment of the appropriate compensation, at page 22, the following appears:
"… the International Fund for Compensation for Oil Pollution Damage (IOPC Funds) must pay the amount of Four Hundred Million Six Hundred and Twenty Eight Thousand Twenty One and 85/100 Dollars (Bs. 400,628,021.85) which correspond to the amount exceeding the payment that must be paid by the defendant up to the maximum limit equivalent in bolivars to 60 Million of Special Drawing Rights (SDR)."
As will appear, Mr Patterson does not agree with Mr Taylor and Mr Hirst QC that the Venezuelan Judgment was concerned with the IOPC Fund 1971 rather than the IPOC Fund 1992. His position, and that of the SUP, is that it is the IOPC Fund 1992 to which the Venezuelan Judgment relates, and that this is because the relevant regime at the time when the spillage occurred, on 27 May 1997, was no longer the 1969 Civil Liability Convention and the 1971 Fund Convention, as a result of The Protocol of 1992 to amend the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage 1971 (the '1992 Fund Protocol').
The Registration Order
The Registration Order made on 18 March 2015 by Master Eastman refers to the Venezuelan Judgment and to the fact that an application for permission had been made by the SUP to register a foreign judgment under Section 2 of the Foreign Judgments (Reciprocal Enforcement) Act 1933 and Section 177(2)(4) of the Merchant Shipping Act 1995. The Registration Order then continues in paragraph 1 as follows:
"The judgment dated 24 September 2009 in which it was ordered that the Sindicato Unico de Pescadores del Municipio Miranda del Estado Zulia ('the Judgment Creditor'), a Venezuelan Fisherman Union, organisation duly incorporated on 4 October 1959, and registered as such before the Ministry of Labour, on 9 January 1960, case file no. 214, recover against the International Oil Pollution Compensation Fund ('the Judgment Debtor') of 23rd Floor Portland House, Bressenden place, London, SW1E 5PN, United Kingdom created according to the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage, 1971, the sum of fifty six million three hundred thousand special drawing rights (SDRs 56,300,000.00) plus interest accrued be registered as a judgment in the Queen's Bench Division of the High Court of Justice under the Statute. "
It will be noted that the description of the Judgment Debtor refers to the "International Oil Pollution Compensation Fund" which was "created according to the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage 1971". There is no mention here of the IOPC Fund 1992. On learning of the Registration Order, the IOPC Fund 1992 was, however, concerned that the Registration Order purported to have been made pursuant to Section 177 of the 1995 Act, in circumstances where Section 172 makes it clear that the powers contained in Section 177 concern the registration of judgments against the IOPC Fund 1992, rather than as against the IOPC Fund 1971. Section 172(1)(c), in particular, defines "the Fund" as "the International Fund established by the Fund Convention" and Section 172(1)(b) defines "the Fund Convention" as "the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage 1992". In these circumstances, the IPOC Fund 1992's concern was, and remains, that the Registration Order might be treated as having been made against it, rather than as against the IOPC Fund 1971. I interject here to point out that, in the light of the submissions made by Mr Patterson, that concern has proven justified. In fact, the position has now been made clear that the Registration Order, so far as the SUP is concerned, is an order which relates only to the IOPC Fund 1992 and does not relate to the IOPC Fund 1971, that being an entity which, it is accepted by the SUP, no longer exists as a result of the resolution made last October declaring that the IOPC Fund 1971 would cease to exist with effect from 31 December 2014.
The Registration Order was served on 6 May 2015 when a process server went to the IOPC Fund 1992's offices at Portland House, Bressenden Place, London, SW1E 5PN, where he met with Mr Jose Maura, the Director of the IOPC Fund 1992, and previously, as I understand it, also the director of the IOPC Fund 1971, and served him with the Registration Order. Neither the application for registration filed by the SUP with the Court nor the witness statement made in support of the application for registration was provided to the IOPC Fund 1992 at the time of such service; these were only obtained by the IOPC Fund 1992's solicitors, Reed Smith LLP, from the Court file on 24 June 2015.
Subsequent to service of the Registration Order on 6 May 2015, Reed Smith LLP wrote on 21 May 2015 to the SUP's then solicitors, stating as follows:
"You may not already be aware that the 1971 Fund was dissolved and its legal personality ceased to exist with effect from 31 December 2014, following a resolution made at a meeting of the 1971 Fund on 24 October 2014. It therefore no longer exists. A copy of the resolution is attached for your reference.
In light of the above, could you kindly confirm by return on behalf of your client, Sindicato Unico de Pescadores del Municipio Miranda del Estado Zulia, that (i) the Judgment and the Order concern only the now non-existent 1971 Fund and (ii) that no steps will be taken towards recognition or enforcement of the Judgment or the Order against the 1992 Fund. Unless such confirmation is given, the 1992 Fund will make an application to the High Court."
No response having been received to this letter, the IOPC Fund 1992, accordingly, on 27 May 2015, issued the present application.
The IOPC Fund 1992's concern that the Registration Order might be regarded as having been made against it, concerns which I repeat have now proven justified, were heightened when a Notice of Enforcement was delivered to its offices on 5 June 2015. This Notice of Enforcement gave the IOPC Fund 1992's address, an address which is not shared with the IOPC Fund 1971, albeit that it previously was, for the simple reason that, as I have mentioned, the IOPC Fund 1971 has now been dissolved. The Notice of Enforcement also referred to a Writ of Control having been obtained in relation to the Registration Order, before going on to state that the "International Oil Pollution Compensation Fund" must pay the full sum due under the Registration Order by 4.30pm on 13 June 2015 or risk the Enforcement Agent "taking control" (a reference, as I understand it, to taking control of assets). Similarly, the Writ of Control was somewhat imprecise in whether it was referring to the IOPC Fund 1971 or the IOPC Fund 1992.
The IOPC Fund 1992's position
It is the IOPC Fund 1992's position that, as Mr Hirst QC submits, there is in existence no judgment against it (as opposed to as against the IOPC Fund 1971), and as such there is no judgment which falls to be registered against the IOPC Fund 1992. In this respect, Mr Hirst QC refers to Article 8 of the 1992 Fund Convention, which states as follows:
"Subject to any decision concerning the distribution referred to in Article 4, paragraph 5, any judgment given against the Fund by a court having jurisdiction in accordance with Article 7, paragraphs 1 and 3, shall, when it has become enforceable in the State of origin, and is in the State no longer subject to ordinary forms of review, be recognised and enforceable in each Contracting State on the same conditions as are prescribed in Article X of the 1992 Liability Convention."
Mr Hirst QC submits that Article 8 has no application in the present case for the simple reason that the Venezuelan Judgment has nothing to do with the IOPC Fund 1992.
Mr Hirst QC goes on to explain that there is no other provision in the 1992 Fund Convention permitting foreign judgments to be registered or enforced against the IOPC Fund 1992. As a consequence, he submits that there is no relevant exception to the IOPC Fund 1992's immunity under Article 5 of the 1996 Order and Article 5 of the HQ Agreement. In short, Mr Hirst QC submits, the IOPC Fund 1992 is immune, and the Registration Order ought not to be permitted to stand if and insofar as it relates to the IOPC Fund 1992.
Mr Hirst QC submits that this is consistent with how the registration scheme in the 1995 Act works. First, he says, the Venezuelan Judgment does not fall for recognition under Section 177(4) of the 1995 Act because that section only concerns judgments given in Venezuela under a provision which corresponds to Section 175 of the 1995 Act. Secondly, as Section 175 concerns only the liability of the IOPC Fund 1992, rather than the liability of the IOPC Fund 1971, it follows, Mr Hirst QC submits, that there is no power to register the Venezuelan Judgment against the IOPC Fund 1992.
In these circumstances and for these reasons, the IOPC Fund 1992 seeks:
(1) an order that this court has no jurisdiction to register the Venezuelan Judgment against the IOPC Fund 1992 because the IOPC Fund 1992 is immune pursuant to Article 5 of the 1996 Order and Article 5 of the HQ Agreement: and
(2) a declaration that the IOPC Fund 1992 is not the subject of, or a party to, the Registration Order; alternatively
(3) if and to the extent that the Judgment Debtor identified in the Registration Order constitutes a reference to IOPC Fund 1992, an order that the Registration Order is set aside either in its entirety or insofar as it relates to the IOPC Fund 1992.
I should observe that the Registration Order went on to provide, in paragraph 2, as follows:
"The Judgment Debtor has permission to apply to set aside registration within 21 days after service on it of notice of the registration under RSC 0.71r7(3) (Schedule 1 to the Civil Procedure Rules 1998) if it has grounds for doing so and execution on the judgment will not issue until:
a) After the expiration of that period or
b) After the expiration of any extension of that period granted by the court, or
c) Where an application is made to set aside the registration, the application has been disposed of. "
It is the IOPC Fund 1992's position that it is entitled to make the current applications both under this express liberty to apply and under CPR 11.
The SUP's position
Mr Patterson explains in his skeleton argument that the SUP resists the IOPC Fund 1992's applications for a variety of reasons. First, Mr Patterson takes what he describes as a "preliminary point". This is an argument that, not having filed an acknowledgment of service, it is not open to the IOPC Fund 1992 to make a challenge under CPR 11 because of the requirement in CPR 11(2) that an acknowledgment of service is filed in the event that an application under CPR 11(1) is made. Secondly, and more substantively, Mr Patterson submits that, as he puts it, "in respect of signatories" to the 1992 Fund Protocol, the IOPC Fund 1971 "does not co-exist with" the IOPC Fund 1992, such that the IOPC Fund 1971 "has been replaced together with rights and liabilities by" the IOPC Fund 1992. So, Mr Patterson goes on to submit, the Venezuelan Judgment takes effect only as against the IOPC Fund 1992 and, likewise, the Registration Order applies only to the IOPC Fund 1992, not also the IOPC Fund 1971. It follows, too, Mr Patterson submits, that the IOPC Fund 1992 does not enjoy the immunity which Mr Hirst QC suggests it has because Article 5(1)(b) (of both the HQ Agreement and the 1996 Order) applies.
Mr Patterson relies, in these respects, on a number of provisions contained in the 1992 Fund Protocol, which he points out came into being on 27 November 1992 at a convention, or conference, between 55 states, including Venezuela, which took place at the IMO Headquarters in London. First, he points to Article 1, which states as follows:
"The Convention which the provisions of this Protocol amend is the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage, 1971, hereinafter referred to as the '1971 Fund Convention'. For States Parties to the Protocol of 1976 to the 1971 Fund Convention, such reference shall be deemed to include the 1971 Fund Convention as amended by that Protocol."
Then, Mr Patterson refers to Article 3, which states as follows:
"Article 2 of the 1971 Fund Convention is amended as follows:
Paragraph 1 is replaced by the following text:
1. An International Fund for compensation for pollution damage, to be named 'The International Oil Pollution Compensation Fund 1992' and hereinafter referred to as 'the Fund', is hereby established with the following aims:
(a) to provide compensation for pollution damage to the extent that the protection afforded by the 1992 Liability Convention is inadequate;
(b) to give effect to the related purposes set out in this Convention."
Mr Patterson highlights that, therefore, the 1992 Fund Protocol amends the 1971 Fund Convention and stipulates that the amended version of the 1971 Fund Convention shall be known as what I have been describing as the 1992 Fund Convention and that the "International Oil Pollution Fund 1992", or what I have been describing as the IOPC Fund 1992, shall be referred to as "the Fund".
Mr Patterson stresses also the fact that the preamble to the 1992 Fund Protocol emphasises "the importance of maintaining the viability of the international oil pollution liability and compensation system" and recognises the "advantage for the States Parties of arranging for the amended Convention to coexist with and be supplementary to the original convention for a transitional period". Mr Patterson does this as a precursor to referring to certain provisions in the 1992 Fund Protocol dealing with the so-called "transitional period", which is defined as starting with "the date of entry into force of this Convention" and ending with the date on which the denunciations of the unamended 1971 Fund Convention take place. Thus, Article 26 provides as follows:
"After Article 36 of the 1971 Fund Convention four new articles are inserted as follows:
ARTICLE 36 bis
The following transitional provisions shall apply in the period, hereinafter referred to as the transitional period, commencing with the date of entry into force of this Convention and ending with the date on which the denunciations provided for in Article 31 of the 1992 Protocol to amend the 1971 Fund Convention take effect:
(a) In the application of paragraph 1(a) of Article 2 of this Convention, the reference to the 1992 Liability Convention shall include reference to the International Convention on Civil Liability for Oil Pollution Damage, 1969', either in its original version or as amended by the Protocol thereto of 1976 (referred to in this Article as 'the 1969 Liability Convention'), and also the 1971 Fund Convention.
(b) Where an incident has caused pollution damage within the scope of this Convention, the Fund shall pay compensation to any person suffering pollution damage only if, and to the extent that, such person has been unable to obtain full and adequate compensation for the damage under the terms of the 1969 Liability Convention, the 1971 Fund Convention and the 1992 Liability Convention, provided that, in respect of pollution damage within the scope of this Convention in respect of a Party to this Convention but not a Party to the 1971 Fund Convention, the Fund shall pay compensation to any person suffering pollution damage only if, and to the extent that, such person would have been unable to obtain full and adequate compensation had that State been party to each of the above-mentioned Conventions.
…
ARTICLE 36 quater
Notwithstanding the provisions of this Convention, the following provisions shall apply to the administration of the Fund during the period in which both the 1971 Fund Convention and this Convention are in force:
(a) The Secretariat of the Fund, established by the 1971 Fund Convention (hereinafter referred to as "the 1971 Fund"), headed by the Director, may also function as the Secretariat and the Director of the Fund."
I interject to point out that Mr Hirst QC in his submissions also drew attention to sub-paragraph (e) of Article 36 quater, which states as follows:
"The Fund may succeed to the rights, obligations and assets of the 1971 Fund if the assembly of the 1971 Fund so decides, in accordance with Article 44(2) of the 1971 Fund Convention."
Mr Patterson also relies on Article 27, which is in the following terms:
"1. The 1971 Fund Convention and this Protocol shall, as between the Parties to this Protocol, be read and interpreted together as one single instrument.
2. Articles 1 to 36 quinquies of the 1971 Fund Convention as amended by this Protocol shall be known as the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage, 1992 (1992 Fund Convention)."
Mr Patterson additionally refers to the fact that Article 31 provides:
"Subject to Article 30, within six months following the date on which the following requirements are fulfilled:
(a) at least eight States have become Parties to this Protocol or have deposited instruments of ratification, acceptance, approval or accession with the Secretary-General of the Organization, whether or not subject to Article 30, paragraph 4, and
(b) the Secretary-General of the Organization has received information in accordance with Article 29 that those persons who are or would be liable to contribute pursuant to Article 10 of the 1971 Fund Convention as amended by this Protocol have received during the preceding calendar year a total quantity of at least 750 million tons of contributing oil;
each Party to this Protocol and each State which has deposited an instrument of ratification, acceptance, approval or accession, whether or not subject to Article 30, paragraph 4, shall, if Party thereto, denounce the 1971 Fund Convention and the 1969 Liability Convention with effect twelve months after the expiry of the above-mentioned six-month period."
Lastly, he refers to Article 34 (6), which states:
"As between the Parties to this Protocol, denunciation by any of them of the 1971 Fund Convention in accordance with Article 41 thereof shall not be construed in any way as a denunciation of the 1971 Fund Convention as amended by this Protocol."
Mr Patterson submits that, as he puts it, "in other words each party to the Protocol is to denounce the 1971 Fund Convention while continuing to be a party to the 1971 Convention as amended by the Protocol of 1992 to amend 1971 Fund Convention, which is in fact the 1992 Convention". Since, as Mr Patterson explains, Venezuela denounced the 1971 Fund Convention on 3 June 1998, then, in accordance with Article 26, under Article 36 bis (a), in the application of paragraph 1(a) of Article 2 of the 1992 Fund Protocol, the reference to the 1992 Liability Convention shall include reference to the 1969 Civil Liability Convention and also the 1971 Fund Convention, and, under Article 36 bis (b), where an incident has caused damage within the scope of the 1971 Fund Convention, the IOPC Fund 1992 shall pay compensation to any person suffering pollution damage only if, and to the extent that, such person has been unable to obtain full and adequate compensation for the damage under the terms of the 1969 Civil Liability Convention, the 1971 Fund Convention and the 1992 Civil Liability Convention. This means, Mr Patterson submits, that the IOPC Fund 1992 will pay compensation if adequate compensation has not been made by the owner of the ship under either of the 1969 and 1992 Civil Liability Conventions, or by the IOPC Fund 1971 for any reason, for example because the state in question has denounced the 1971 Fund Convention.
Mr Patterson points out also that, under Article 36 quater (a), during the period in which both the 1971 Fund Convention and the 1992 Fund Convention are in force, the Secretariat of the IOPC Fund 1971, headed by the Director, may also function as the Secretariat (and the Director) of the IOPC Fund 1992. Mr Patterson then goes on to place reliance on Article 7(6) of the 1992 Fund Convention, which provides as follows:
"Without prejudice to the provisions of paragraph 4, where an action under the 1992 Liability Convention for compensation for pollution damage has been brought against an owner or his guarantor before a competent court in a Contracting State, each party to the proceedings shall be entitled under the national law of that State to notify the Fund of the proceedings. Where such notification has been made in accordance with the formalities required by the law of the court seized and in such time and in such a manner that the Fund has in fact been in a position effectively to intervene as a party to the proceedings, any judgment rendered by the court in such proceedings shall, after it has become final and enforceable in the State where the judgment was given, become binding upon the Fund in the sense that the facts and findings in that judgment may not be disputed by the Fund even if the Fund has not actually intervened in the proceedings."
Mr Patterson highlights how, therefore, if the IOPC Fund 1992 has had the opportunity to intervene as a party to any legal proceedings instituted in accordance with Article IX of the 1969 Civil Liability Convention before a competent court of a Contracting State, it is bound by the facts and findings of the judgment even if it has not intervened in the proceedings.
Mr Patterson cites Article 7(6) by way of response to what Mr Taylor has to say in his first witness statement, namely that at no stage was the IOPC Fund 1992 formally notified of the Venezuelan proceedings or given an opportunity to participate in them, something which Mr Hirst QC submits makes sense, given that the proceedings related to the IOPC Fund 1971, not the IOPC Fund 1992. Mr Patterson then proceeds to make a number of points which he derives from the witness statement of Mr Alfonso Rubio, a lawyer having conduct of this matter on behalf of the SUP, and who has made a witness statement dated 13 July 2015.
First, Mr Patterson refers to the fact that, on 19 September 2005, the SUP's lawyer in Venezuela requested notification of the proceedings to the IOPC Fund 1971, as Mr Patterson put it, "to put the Director in full knowledge of the lawsuit against the Captain, the ship's operator or the owner of the tanker Plate Princess". Secondly, Mr Patterson refers also to how, on 13 June 1997, according to information contained in a document with a reference "71FUND/EXC.54/7", "the Director of the Fund" by which Mr Patterson means the Director, as I understand it, of both the IOPC Fund 1971 and the IOPC Fund 1992, was notified of the incident. Mr Patterson highlights that "the Director" as he puts it, set the amount at 3.6 million SDRs as the limitation of liability amount applicable to the owner of the 'PLATE PRINCESS' under the 1969 Civil Liability Convention. Thirdly, Mr Patterson goes on to point out that, on 17 June 1997, according to information contained in a document with a reference "71FUND/EXC.54/10", "the Executive Committee of the International Oil Pollution Compensation Fund" (Mr Patterson would say, as I understand it, the IOPC Fund 1992) authorised the Director (again, Mr Patterson would say, as I understand it, the Director of both the IOPC Fund 1971 and the IOPC Fund 1992) to make final settlements as to the quantum of all claims arising out of the incident, to the extent that the claims could not give rise to questions of principle which had not previously been decided by the committee and to make payments. Fourthly, Mr Patterson then observes that, on 8 June 1997, "the Fund Director" granted before the Consular Section of the Embassy of the Bolivarian Republic of Venezuela in the United Kingdom and Northern Ireland, power of attorney to Venezuelan lawyers to act on its behalf and to represent it in actions which arose in the Republic of Venezuela relating to the incident concerning the 'PLATE PRINCESS'. Lastly, Mr Patterson explains that, on 12 June 2008, as he puts it, "the International Oil Pollution Compensation Fund" (a reference, he submits, to the IOPC Fund 1992, not least because by that time the 1971 Fund Convention had ceased to be in force, and so, he submits, the Director was only the Director of the IOPC Fund 1992) voluntarily intervened as a party to the legal proceedings instituted before the competent court of Venezuela, submitting a written response to the law suit.
In these circumstances, despite the fact that a number of the documents plainly emanate from the IOPC Fund 1971 (as demonstrated by the references to "71FUND" at the beginning of the various document reference numbers), it is Mr Patterson's submission that the reason why there are, as he himself puts it, "many references" in the Venezuelan Judgment to the 1971 Fund Convention, and, indeed, to the IOPC Fund 1971 rather than the IOPC Fund 1992, is that it is the 1971 Fund Convention (as amended by the 1992 Fund Protocol), which is applicable, and, as Mr Patterson submitted, "it was possible for the 1971 Fund or 1992 Fund to be named without distinction". In fact, as previously noted, in many (and perhaps most) places, Mr Patterson points out, the Venezuelan Judgment refers, in brackets after a reference to the IOPC Fund 1971, or a reference which contains no date, simply to "IOPC Funds" in the plural, so indicating, Mr Patterson suggests, that the intention was to refer not only to the IOPC Fund 1971, but also to the IOPC Fund 1992, which, in effect, Mr Patterson submits, were by this stage interchangeable. Mr Patterson submits that this is also the explanation for the Registration Order's reference to "the International Oil Pollution Compensation Fund created according to the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage 1971". As he puts it in his skeleton argument, "in respect of the states subscribing to the 1992 Fund Protocol, the 1971 Fund Convention referred to the 1971 Fund Convention as amended".
Mr Patterson then explains that it follows from this that, when the Registration Order identifies the Judgment Debtor as, "the Fund", it is referring not to the IOPC Fund 1971 but to the IOPC Fund 1992, since, although the IOPC Fund 1971 and the IOPC Fund 1992 were, in effect, interchangeable, by the time that the Registration Order was made "there was only one Fund", and that was (and is) the IOPC Fund 1992. This, of course, is a reference to the dissolution of the IOPC Fund 1971, which took effect from 31 December 2014. It is for this reason, as I understand it, that in his witness statement in support of the application to register the Venezuelan Judgment, Mr Rubio did not disclose that the IOPC Fund 1971 had been dissolved at the end of last year. It is also why, Mr Patterson suggests, no reference was made in this witness statement to the fact that the Venezuelan Judgment does not refer, in terms at least, to the IOPC Fund 1992, or to the 1992 Fund Convention, or to any liability arising in relation to the IOPC Fund 1992 or the 1992 Fund Convention. I consider that these were matters which should have been explained, but, be that as it may, it follows, Mr Patterson submits, that if he is right in relation to what he submits concerning the 1992 Fund Protocol, then the IOPC Fund 1992 does not have immunity under Article 5(1)(b) of both the HQ Agreement and the 1996 Order, because the exception contained in Article 5(1)(b) applies in respect of actions brought against the IOPC Fund 1992 in accordance with the provisions of the 1992 Fund Convention (or the 1971 Fund Convention as amended by the 1992 Fund Convention). As Mr Patterson puts it in his skeleton argument, the Venezuelan Judgment "is an action brought against the Fund in accordance with the provisions of the Convention and is a claim for the very compensation that the Fund was set up to provide".
Discussion and decision
I have considered the parties' respective submissions. Having done so, my conclusion is that Mr Hirst QC's submissions are clearly to be preferred to those advanced by Mr Patterson. I can state my reasons for arriving at this conclusion relatively briefly since, in truth, the only issue between Mr Hirst QC and Mr Patterson concerns Mr Patterson's reliance on the 1992 Fund Protocol.
The 1992 Fund Protocol is at the heart of the SUP's case that the IOPC Fund 1992 is subject (indeed, was a party) to the Venezuelan Judgment, that the Registration Order relates to the IOPC Fund as a result, and that the exception contained in Article 5(1)(b), accordingly, applies. I am clear, however, that Mr Patterson's reliance on the 1992 Fund Protocol is misplaced. The reason why I say this is straightforward. It is that, contrary to Mr Patterson's submissions, the 1992 Fund Protocol has no application in the present case, involving as it does an oil spillage which occurred in 1997 and so before Venezuela ratified, accepted, approved or acceded to the 1992 Fund Protocol. It is not sufficient, as Mr Patterson suggests, certainly in his skeleton argument, that Venezuela was a signatory to the 1992 Fund Protocol from the outset, on 27 November 1992, at the meeting of the conference at the IMO's offices in London, since, for the 1992 Fund Protocol to operate in this case, Venezuela needed not only to have been a signatory prior to the incident but by that stage also to have ratified, accepted, approved or acceded to the 1992 Fund Protocol.
This seems to me to be made abundantly clear by Article 28, which is in the following terms. I refer here to Article 28 of the 1992 Fund Protocol. It is headed "Signature, ratification, acceptance, approval and accession" and it reads as follows:
"1. This Protocol shall be open for signature at London from 15 January 1993 to 14 January 1994 by any State which has signed the 1992 Liability Convention.
2. Subject to paragraph 4, this Protocol shall be ratified, accepted or approved by States which have signed it.
3. Subject to paragraph 4, this Protocol is open for accession by States which did not sign it.
4. This Protocol may be ratified, accepted, approved or acceded to only by States which have ratified, accepted, approved or acceded to the 1992 Liability Convention.
5. Ratification, acceptance, approval or accession shall be effected by the deposit of a formal instrument to that effect with the Secretary-General of the Organization.
6. A State which is a Party to this Protocol but is not a Party to the 1971 Fund Convention shall be bound by the provisions of the 1971 Fund Convention as amended by this Protocol in relation to other Parties hereto, but shall not be bound by the provisions of the 1971 Fund Convention in relation to Parties thereto.
7. Any instrument of ratification, acceptance, approval or accession deposited after the entry into force of an amendment to the 1971 Fund Convention as amended by this Protocol shall be deemed to apply to the Convention so amended, as modified by such amendment."
Whilst it is true that, as Mr Patterson points out, Venezuela did not denounce the 1971 Fund Convention until 3 June 1998, it is equally clear that Venezuela did not become a party to the 1992 Civil Liability Convention and the 1992 Fund Convention until 22 July 1999, having deposited the relevant instrument on 22 July 1998. In these circumstances, by virtue of Article 28(4) of the 1992 Fund Protocol, Venezuela cannot have "ratified, accepted or approved" in accordance with Article 28(2) (or, indeed, "acceded", as also referred to in Article 28(4)) until after the oil spillage in 1997. Whether the relevant date in this regard is 1998 or 1999 is immaterial (I am referring here to the depositing of the instrument in 1998 and to the effective date a year later in 1999) since, either way, there cannot have been the required ratification, acceptance or approval (or accession) in 1997 at the time of the oil spillage which gave rise to the Venezuelan Judgment. It follows that the 1992 Fund Protocol, in my judgment, has no application, it being clear from Articles 28(1) and 28(2) that merely being a signatory to the 1992 Fund Protocol is not by itself sufficient to mean that the 1992 Fund Protocol is applicable. As to when Venezuela became a signatory, I am not aware that a date has been given for that, although it would appear that the mere attendance at the conference on 27 November 1992 is not going to have been the occasion when Venezuela became a signatory, given the terms of Article 28(1), which indicate that the Protocol was only "open for signature" starting from 15 January 1993.
Further, it is clear, as it seems to me, that, when Article 36 bis (a) refers to the transitional provisions as applying in "the transitional period, commencing with the date of entry into force of this Convention", it is referring to the "date of entry into force" insofar as the individual states are concerned. The relevant provision in this context is Article 30, which is entitled "Entry into Force" and which provides as follows:
"1. This Protocol shall enter into force twelve months following the date on which the following requirements are fulfilled:
(a) at least eight States have deposited instruments of ratification, acceptance, approval or accession with the Secretary-General of the Organization; and
(b) the Secretary-General of the Organization has received information in accordance with Article 29 that those persons who would be liable to contribute pursuant to Article 10 of the 1971 Fund Convention as amended by this Protocol have received during the preceding calendar year a total quantity of at least 450 million tons of contributing oil.
2. However, this Protocol shall not enter into force before the 1992 Liability Convention has entered into force.
3. For each State which ratifies, accepts, approves or accedes to this Protocol after the conditions in paragraph 1 for entry into force have been met, the Protocol shall enter into force twelve months following the date of the deposit by such State of the appropriate instrument.
4. Any State may, at the time of the deposit of its instrument of ratification, acceptance, approval or accession in respect of this Protocol declare that such instrument shall not take effect for the purpose of this Article until the end of the six-month period in Article 31."
As I see it, the effect of Article 30(3) is that the focus is on the individual state ratifying, approving or acceding to the 1992 Fund Protocol, and not the entry into force to which Article 30(1) relates. Otherwise, in my judgment, Article 36 bis makes little sense, particularly the reference to "denunciations provided for" in Article 31, which, as Mr Patterson accepts, is clearly focusing on denunciations from each state, that is viewing each state separately and individually, and so considering the position of each state on an individual basis. In my judgment, it makes no sense for the end date to be considering the position of the individual states individually, but for the start date to be considering something else, namely whether or not eight other states have deposited their instruments and 12 months has passed (as well as compliance with Article 30(1)(b)).
Mr Patterson, as I say, takes no issue with the proposition that the reference to "denunciations" (that is, the reference to the end date of the transitional period) is a reference to the position of individual states as referred to in Article 31. His argument is that the relevant start date in Article 36 bis, namely "the date of entry into force of this Convention", should not have as its focus the position of the individual states but should instead be taken to be a reference to the entry into force provisions contained in Article 30(1), a point bolstered, he submits, by the reference on the front page of the 1992 Fund Protocol, in brackets, to the protocol entering into force on 30 May 1996. That is an argument which, as I have indicated, seems to me to make no sense. It seems to me to be quite clear that the reference in Article 36 bis to the start date being "the date of entry into force of this Convention" is a reference to the start date so far as the individual states are concerned. Were Mr Patterson's argument right, then it would, in effect, mean that the reference in Article 30(3) to the 1992 Fund Protocol coming into force 12 months following the date of the deposit by the individual states is redundant. I consider, on the contrary, that the fact that Article 30(3) contains the language of entry into force by reference to individual states makes the position entirely clear and is the only workable position. I repeat that Mr Patterson's argument would make the references in sub-paragraph (3) to the Protocol coming into force in relation to individual states surplusage. I consider also that Mr Patterson's submission makes no sense, since it would mean that a state could be a party to the 1971 Fund Convention, and do nothing by way of signature or ratification or approval or acceptance of (or accession to) the 1992 Fund Protocol, yet find itself subject to Article 36 bis and the other transitional provisions contained in Article 36 bis regardless, until such time as that state got round, if it ever got round, to denouncing the 1971 Fund Convention. As I see it, that is an utterly unrealistic scenario. It simply cannot have been the position that those drafting the 1992 Fund Protocol could have had in mind.
Nor do I consider it right that, as Mr Patterson submits, essentially in the alternative as I understand it, the transitional provisions contained in Article 36 bis and following apply retrospectively, that is that they come into play after a state has ratified, accepted, approved or acceded to the 1992 Fund Protocol, and not before. In my judgment, this, again, is a wholly unrealistic submission. For provisions such as this to have retrospective effect would require, Mr Hirst QC submitted in his reply submissions, and I agree, the clearest possible words, and yet there is not the slightest hint that that is what the draftspersons had in mind. Further, it seems to me that Mr Patterson's stance is unrealistic for an additional reason, which is that it would lead to the peculiar consequence that the 1971 Fund Convention would apply during a particular period, and apply exclusively, only for it to be discovered, subsequently, and with the benefit of hindsight only, that actually the position was different, not because it was actually (or, as it were, in 'real time') different, but because of a subsequent event making it different. That is a very unlikely scenario. It is far more likely that the parties and the states should understand at any given moment during the relevant period, contemporaneously as it were, what regime applied and what regime did not apply.
I also consider that there is considerable force in Mr Hirst QC's submission that, if Mr Patterson's case about retrospectivity were right, then it would lead to the oddity, as Mr Hirst QC describes it, that a state could achieve for itself an ability to recover a higher amount under the 1992 Fund Convention through the operation of the 1992 Fund Protocol retrospectively, despite contemporaneously, in other words in the period that came before its ratification, acceptance, or approval of (or accession to) the 1992 Fund Convention, having made somewhat lower contributions consistent with an ability to claim lesser amounts under the 1971 Fund Convention than would be claimable under the 1992 Fund Convention. That is a very practical illustration of why, in my judgment, Mr Patterson's argument on retrospectivity simply cannot be accepted.
Put simply, and by way of summary, therefore, in my judgment, the transitional provisions to be found in Article 36 bis apply, and only apply, to states which have ratified, accepted or approved (or acceded to) the 1992 Fund Protocol through the deposit of a relevant instrument, but have yet to denounce the 1971 Fund Convention. They do not apply to states which, although they may have signed the 1992 Fund Protocol, have yet to ratify, accept or approve (or acceded to) the 1992 Fund Protocol. States which have not "ratified, accepted, approved or acceded to the 1992 Liability Convention" cannot ratify, accept or approve (or accede to) the 1992 Fund Protocol. Therefore, Venezuela being a state which had not ratified, accepted, approved or acceded to the 1992 Civil Liability Convention until after the 1997 oil spillage which gave rise to the Venezuelan Judgment, the SUP is not in a position where it can invoke the 1992 Fund Protocol in the manner suggested by Mr Patterson.
I should add that I am not swayed from the conclusion which I have reached by any of the matters relied upon by Mr Patterson in the context of his reliance on Article 7(6) of the 1992 Fund Convention. It is clear to me that the intervention made in the Venezuelan proceedings was made by the IOPC Fund 1971, rather than by the IOPC Fund 1992. As previously mentioned, this is demonstrated by the fact that a number of the documents plainly emanate from the IOPC Fund 1971, but it is also consistent with the analysis which entails the IOPC Fund 1971 and only that entity, being liable, given that the 1992 Fund Protocol has no application for the reasons which I have canvassed.
Mr Patterson, towards the end of his submissions, took me to a particular document dated 1 October 2009 concerning the 'PLATE PRINCESS' matter and headed "Note by the Director". Mr Patterson highlighted the fact that, at the top of the page, a number of entities were identified, including "1992 Fund Assembly", "1992 Fund Executive Committee", "Supplementary Fund Assembly" and "1971 Fund Administrative Council". The suggestion which he made to me was that this document indicates that, as at 1 October 2009, both the IOPC Fund 1971 and the IOPC Fund 1992 were involved in the matter of the 'PLATE PRINCESS', and specifically the Venezuelan proceedings. It was pointed out by Mr Hirst QC, however, that the boxes which contain the various references to the entities I have just identified has a dot in just one of the boxes, against the entity described as "1971 Fund Administrative Council". It is a fair inference, and indeed it is what Mr Hirst QC submits to me, that, therefore, this is a note that was actually directed to and concerned only with the "1971 Fund Administrative Council", and not the various other entities involving the IOPC Fund 1992. In short, this is, in a sense, a circulation list, and the relevant entity being circulated was not an entity concerned with the IOPC Fund 1992.
The truth is that the documentation which might have supported a contention by Mr Patterson that the IOPC Fund 1992 was involved in the Venezuelan proceedings is scarce, to say the least. Frankly, it is non-existent. In these circumstances, particularly bearing in mind what I read also in the third witness statement of Mr Taylor, dated 21 July 2015, I am quite clear that the argument that the IOPC Fund 1992 was, in fact, involved in the Venezuelan proceedings is an argument which is not sustainable.
Mr Taylor explained in his most recent witness statement how, between 24 May 2002 and the dissolution of the IOPC Fund 1971 on 31 December 2014, the IOPC Fund 1971 and its constituent decision-making bodies continued to operate separately from the IOPC Fund 1992 and its constituent decision-making bodies. He also explained that the finances and accounts of each of the IOPC Fund 1971 and the IOPC Fund 1992 were handled and administered separately. He did so by pointing, for example, to a Note of the Director of the IOPC Fund 1971 dated 27 September 2002 showing that, after the 1971 Fund Convention ceased to be in force, it was still necessary for the Administrative Council on behalf of the 1971 Fund Assembly and the 1971 Fund Executive Committee to determine how to deal with extant claims against the IOPC Fund 1971 and how to dissolve the IOPC Fund 1971. This is demonstrated by various resolutions which were regularly passed by the Administrative Council of the IOPC Fund 1971 relating solely to the activities of the IOPC Fund 1971 including significantly the resolution passed on 24 October 2014 concerning the dissolution of the IOPC Fund 1971, as referred to in the announcement made on 17 November 2014 to which I have previously referred. Mr Hirst QC also drew my attention to Article 36 quater, specifically sub-paragraph (e), which I have previously quoted, making the point that at no stage was a decision made by the IOPC Fund 1971 in effect to merge with the IOPC Fund 1992. I agree that, in the circumstances, the argument that in effect the IOPC Fund 1971 and the IOPC Fund 1992 are to be treated as one and the same is misconceived.
It follows from all this that Mr Patterson's submission that the Venezuelan Judgment should be regarded as applying to the 1971 Fund Convention as amended by the 1992 Fund Protocol is not a submission which I can accept. It follows also that nor can I accept the submission that the Venezuelan Judgment should be regarded as applying to the IOPC Fund 1992, despite the fact that there is no reference at all to the IOPC Fund 1992 anywhere in the Venezuelan Judgment. I do not consider, in the circumstances, that the references in several places to "the IOPC Funds" are sufficient to change matters. Even if this might arguably suggest that more than just the IOPC Fund 1971 was being referred to, given that the IOPC Fund 1992 can have had no relevant liability, as I see it, I do not feel able to conclude that these are references which were actually intended to include the IOPC Fund 1992, and significantly, when I asked Mr Patterson why it should be that nowhere in the Venezuelan proceedings does there seem to have been a mention of the 1992 Fund or the 1992 Fund Protocol or the 1992 Fund Convention, no particularly enlightening answer was forthcoming. I say that, of course, with no criticism of Mr Patterson personally. It would have been very easy indeed, however, I observe, to have made it clear within the context of the Venezuelan proceedings that the true target was not the IOPC Fund 1971 but the IOPC Fund 1992, and that the claim was brought not under the 1971 Fund Convention as amended by the 1992 Fund Protocol, but was brought under the 1992 Fund Convention. The fact that there is no such reference in the Venezuelan Judgment is very telling.
It further follows, in the circumstances, that it was not open to the SUP to obtain an order registering the Venezuelan Judgment against the IOPC Fund 1992 for the simple fact that the Venezuelan Judgment is not a judgment against the IOPC Fund 1992. I agree with Mr Hirst QC that, as far as the IOPC Fund 1992 is concerned, Article 8 of the 1992 Fund Convention simply does not apply. I agree also with Mr Hirst QC that, even if the Venezuelan Judgment had been as against the IOPC Fund 1992, which I have determined it was not, since it was not a judgment establishing liability on the part of the IOPC Fund 1992 under the 1992 Fund Convention, there is no relevant exception to the IOPC Fund 1992's immunity under Article 5 of the 1996 Order and Article 5 of the HQ Agreement in that the exception in Article 5(1)(b) is inapplicable. Therefore, I agree with Mr Hirst QC that the IOPC Fund 1992 would be immune in that event. Either way, I am clear that, contrary to Mr Patterson's submission, the Registration Order is not an order which the SUP ought to have been able to have obtained as against the IOPC Fund 1992, and that, as such, it ought not to be permitted to stand if and insofar as it relates to the IOPC Fund 1992, as I am told now, of course, by Mr Patterson, it is intended by the SUP that it should.
This is sufficient to mean that the IOPC Fund 1992's applications succeed. It would not necessarily have meant, however, that the Registration Order should be set aside completely if and insofar as it also is to be regarded as relating to the IOPC Fund 1971. In circumstances where the IOPC Fund 1971 is not represented and has made no application, no doubt for the simple reason that it no longer exists, I might have been minded to have left matters on the basis that the Registration Order should be set aside insofar as it concerns the IOPC Fund 1992 only, and to have said nothing further about the Registration Order if and insofar as it relates to the IOPC Fund 1971. However, in circumstances where the SUP's own position is that the Registration Order does not relate to the IOPC Fund 1971, it seems to me that the right course is to set aside the Registration Order in its entirety. I am strengthened in this view by the fact that, as Mr Hirst QC submits, the Venezuelan Judgment does not fall to be recognised under Section 177(4) of the 1995 Act because that section only concerns judgments given in Venezuela under a provision which corresponds to Section 175 of the 1995 Act, and Section 175 concerns only the liability of the IOPC Fund 1992, rather than the liability of the IOPC Fund 1971, these provisions of the Merchant Shipping Act being the provisions relied upon when seeking the Registration Order. In other words, it was not open to the SUP to obtain the Registration Order as against the IOPC Fund 1971 under those provisions, in any event.
This leaves Mr Patterson's so-called "preliminary point". I am not persuaded that there is any force in this objection. First, it is not clear to me that there is any requirement that a party (a judgment debtor) should file an acknowledgment of service, and it is telling that in the present case it does not appear that the Registration Order was accompanied by any pack which required such a document to be filed. Secondly, it seems to me that it was, in any event, open to the IOPC Fund 1992 to make its application under the liberty to apply provision contained in the Registration Order itself, and that nothing turns on whether there is also an application under CPR 11.
In the circumstances, the orders which I make are these:
(1) an order that this court has no jurisdiction to register the Venezuelan Judgment against the IOPC Fund 1992 because the IOPC Fund 1992 is immune pursuant to Article 5 of the 1996 Order and Article 5 of the HQ Agreement: and
(2) an order that the Registration Order is set aside in its entirety.
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Mr Justice Warby:
A. Introduction
This judgment deals with remedies in this libel action, following the entry of judgment in default of Defence. The judgment contains and explains my assessment of the damages to which the claimant is entitled for what I consider to be serious libels of him published by the defendant. I also give my reasons for granting the claimant's application for an injunction prohibiting the defendant from further publication of the libels in this jurisdiction. My conclusions on these issues are summarised in section F at [98] below. The reasons for reaching those conclusions are contained in sections D and E.
Before addressing those issues, however, I need to set out something of the procedural history of this action. It is necessary to make clear how the case has reached this remedies hearing: see section B. I then need to explain why I have proceeded to hear evidence and argument and reach a decision on remedies, despite assertions made recently in a letter written to the court by the defendant on 19 June 2015. In that letter she complains that she has been unable effectively to defend this action, and that the justice system has "let her down".
Having carefully considered what the defendant has said in support of those complaints, and heard Ms Page QC for the claimant in response, I have concluded, for the reasons given in section C below, that the complaints are unfounded. In my judgment the defendant has had a full and fair opportunity to defend herself in these proceedings. She has not taken that opportunity, and this remedies judgment is the consequence. I summarise my reasons for that conclusion at [73] below.
B. The Procedural History
Events up to 5 March 2015
The following is a summary. A more detailed account can be found in my judgment of 5 March 2015, [2015] EWHC 545 (QB) ("my March judgment").
The claimant is a Russian citizen, a businessman, who was a Senator in the Senate of the Russian Federation from 2002 to 2010. In April 2011 he emigrated from Russia to Israel, where he has lived since. The defendant is a Russian journalist who writes for the Novaya Gazeta newspaper, and contributes to other publications. She is married to Alexei Kozlov, a businessman who was formerly an employee of a company owned by the claimant. Alexei Kozlov was prosecuted, convicted and imprisoned in Russia for stealing assets from a company owned by the claimant.
In April 2012 solicitors instructed by the claimant complained of a number of publications by the defendant, which they described as a "campaign" of "false and highly defamatory allegations" published in this jurisdiction as well as in Russia including, among other things, allegations of involvement in murder plots, corrupting judges, and perverting the course of justice. The defendant instructed iLaw solicitors, who responded stating among other things that they had no instructions to accept service. Proceedings were issued on 4 January 2013.
The claim form and Particulars of Claim complain of four publications: (1) A blog post written by the defendant on the website of the Moscow-based radio station Echo Moscow ("the Blogpost"); (2) & (3) two articles quoting the defendant published on the Russian website gazeta.ru ("the Second and Third Articles"); and (4) a programme broadcast on Radio Liberty ("the Programme").
The Blogpost and the Second and Third Articles were first published on 15 November 2011. The Programme was broadcast on 15 March 2012. All are said to have remained available online ever since. The statements of case complain in addition of the republication of the defamatory sting of the Blogpost and the Second Article on third party websites.
The defamatory meanings complained of are:
i) "that the Claimant had put a contract out for the murder of Alexei Kozlov, which was to be carried out whilst Mr Kozlov was being transferred to prison" (the Blogpost).
ii) "that the Claimant had ordered the fabrication of evidence in the criminal prosecution of Alexei Kozlov and had put a contract out for the murder of Mr Kozlov, which was to be carried out whilst Mr Kozlov was being transferred to prison" (the Second Article);
iii) "that the Claimant had threatened to kill Alexei Kozlov and had put a contract out for his murder, which was to be carried out whilst Mr Kozlov was being transferred to prison" (the Third Article); and
iv) "that the Claimant had by means of bribes corrupted the head of the Presnensky Court, Evgeny Mikhailovich Naidenov, the public prosecutor and Judge hearing the appeal in Alexei Kozlov's case, Judge Vasyuchenko, and had issued instructions to them that Mr Kozlov's sentence of imprisonment was to be increased at his appeal hearing (whereas otherwise he would have been released) and was thereby guilty of an horrific perversion of the course of justice." (The Programme).
Service of proceedings in Russia can be a slow process. These proceedings were however brought to the defendant's attention in October 2013 by a summons from a Moscow court. The documents reached her, or her husband, in Moscow in July 2014. An acknowledgment of service disputing jurisdiction was filed on the defendant's behalf by iLaw on 24 July 2014. In September 2014 the defendant applied to set aside service. She submitted that the court should decline jurisdiction and/or that she had not been validly served. In support of that application she made a witness statement dated 5 September 2014.
On 12 January 2015, the defendant parted company with her solicitors. They wrote a letter on her behalf dated 13 January 2015, setting out her position and inviting the court to set aside service. Although iLaw were no longer acting for the defendant her address for service remained that of the solicitors. She has confirmed in the letter of 19 June that, as one would expect, they passed on correspondence from the claimant's solicitors. The claimant's solicitors have confirmed service on her of their client's applications, evidence and submissions, and all orders that the court has made. But between 13 January and 19 June 2015 there had been no response at all from the defendant, who had not engaged with the proceedings in any way.
The defendant did not attend or send anyone to represent her at the hearing of her application on 27 February 2015. At the conclusion of that hearing I reserved judgment. In my March judgment I ruled against the defendant. I summarised all my conclusions in paragraph [100] - [101] where I said this of the application to set aside.
"I have concluded that the claim involves a real and substantial tort in this jurisdiction, and that England is clearly the appropriate place in which to try the claim. I have found that the steps taken by the claimant brought about service of the proceedings on the defendant in October 2013, which was valid and effective under Russian law and the CPR.
Next steps
The proceedings can now continue… "
As to conducting proceedings here I said this at paragraph [80]:
"Conducting proceedings here will naturally pose challenges for the defendant, and for the court. The evidence in the claimant's exhibits suggests that there may be large disparities in resources. It is said that the defendant cannot afford representation. But that is not supported by evidence. In any event, I do not consider the difficulties to be insuperable. I consider on the evidence presently before me that the defendant can and will be given a fair opportunity to defend herself in this court and will not be prevented from putting forward any case that it is reasonably open to her to advance."
Events since 5 March 2015
I handed down my March judgment in the absence of the parties. By an order of 5 March 2015, made of my own initiative, I directed the claimant's solicitors to serve the defendant with a copy of my judgment and order. I gave the claimant a week to put in written submissions on what form of order was appropriate, and what directions should be given. I gave the defendant two weeks after that to respond in writing and, if so advised, to seek permission to appeal. I extended her time for seeking permission to appeal for over a week, until 27 March 2015. I extended time for service of a Defence until after this procedural timetable had been completed, and decisions reached on the appropriate form of order and directions. All of this was served on the Defendant. The order stated that she had the right to apply to set aside or vary the order by way of an application in writing within 7 days. The substance of all of these directions was repeated in the judgment at paragraph [101]. The defendant made no application.
On 12 March 2015, the claimant made written submissions as to the form of order and directions applying, among other things, for an order that the defendant serve a Defence by 17 April 2015. The defendant did not respond in any way. On 13 March 2015 I declined to order service of a Defence on the date requested. I said this in my written reasons:
"I have not granted the order sought for service of a Defence by 17 April as I consider the defendant should have an opportunity to respond on that point, and on the issue of directions generally, as well as the other issues mentioned in the order.
She will however need to address in her response the points made in paragraphs 14 and 15 of the claimant's submissions of 12 March 2015. She should recognise that the existing directions are relatively generous as to time, and should work on the basis that I may be persuaded to timetable the service of a Defence by 17 April or soon after."
The defendant did not make any submissions as to the form of order or appropriate directions, nor did she respond at all to these events, and her time for doing so expired on 27 March. On 31 March 2015 I therefore dealt with the form of order and directions on the papers. I formally dismissed the defendant's application to set aside service, and declared that service took place in October 2013. I ordered the defendant to serve her Defence by 4pm on 24 April 2015. I made a costs order in favour of the claimant, and ordered the defendant to make an interim payment of £10,000 on account of costs by 4pm on 30 April 2015. Again, the order stated that there was a right to apply to set aside or vary. It specified 10 April 2015 as the deadline for doing so.
The reasons for making these orders and directions were set out in the order. I said this:
"2. The interim payment I am ordering in the sum of £10,000 represents a small proportion of the costs said to have been incurred on the Claimant's behalf. In the absence of evidence about the Defendant's means I cannot conclude that it is an inappropriate sum to order her to pay. My order gives her a month to do so. She has an opportunity to apply for and to file evidence in support of a reduction in the amount or an extension of the time to pay."
3. Within that time the Defendant should file and serve a Defence. I consider that in the light of my order and reasons of 13 March 2015 the time allowed is sufficient. If the Defendant needs more time she can apply, giving reasons. She should be aware that if she fails to file and serve a Defence the Claimant may apply for judgment in default of Defence."
The defendant made no application to vary or set aside that order, or to reduce the sum payable or to extend the time for payment. Nor did she seek to appeal, nor did she file or serve a Defence, or apply for an extension of time for doing either of those things. She did not communicate with the court or the claimant at all.
Accordingly, on 29 May 2015, on the claimant's application I entered judgment in default of Defence. That was over 8 weeks after my order for directions was made, and more than 4 weeks after the expiry of the time I set for service of a Defence. At the same time, I ordered that a hearing to assess damages and to determine the injunction claim and costs ("the remedies hearing") should take place on a date, to be fixed, between 10 and 31 July 2015. The order set a deadline for the defendant to serve evidence on the remedies issues.
Because this order was, again, made on the papers without a hearing it stated that the defendant could apply to set aside or vary the order by making an application in writing within 7 days. She had in any event a right to apply to set aside the default judgment pursuant to CPR 13. The order was served on the defendant by email to iLaw on 8 June 2015. She did not seek to set aside or vary any of the orders it contained, nor did she seek to challenge my orders or directions by way of an appeal. On 17 June the claimant's solicitor emailed iLaw and 18 June 2015 they wrote to iLaw seeking dates to avoid for the Remedies Hearing
The defendant's letter of 19 June 2015
It will not surprise the reader to learn that the defendant has not appeared at this Remedies Hearing. As I have indicated, however, she did break her silence by writing a letter to the court dated 19 June 2015. The letter was sent by the defendant to the Queen's Bench Action department, for my attention. It began by explaining that the defendant had been helped to write it by the Media Legal Defence Initiative, a London-based NGO that helps journalists defend legal cases. The defendant went on to say that she had been informed by Mr Hall at iLaw "that the case against me is going ahead and a hearing is to be held at some point in July 2015". She continued:
"I have decided to write to you in order to fully explain my current circumstances, and specifically address why I am no longer able to engage with the court in relation to my case."
After setting out, over nearly 3 pages, reasons in support of that point, the letter ended in this way:
"I have the utmost respect for English law and the English courts, but on this occasion I feel that the justice system has let me down. I am no longer able to take an active role in these proceedings going forward. I hope the English courts can understand my position, and I trust the Honourable Mr Justice Warby will take into account my current position when he reaches his final decision on the matter."
The letter made it tolerably clear, in the light of the history, that the defendant would not appear at the Remedies Hearing. It was plainly going to be necessary to consider the implications of the defendant's letter and to address as a preliminary point whether, in the light of the letter, the hearing should proceed in the defendant's absence. There was no indication on the face of the defendant's letter that it had been copied to the claimant's solicitors. I therefore made an order ensuring that it came to their attention, so that they could respond before the hearing which, by that stage, had been fixed for 13 July 2015.
It turned out that the claimant's side had not been sent a copy of the letter and knew nothing about it until receiving from the court my order and a copy of the letter. In the event, however, the claimant has been able to respond by serving evidence and argument before the hearing, and through the submissions of Ms Page QC and some limited oral evidence given by the claimant at the hearing.
C. Adjourn or Proceed in the Defendant's Absence?
I had to consider the approach to proceeding in the absence of a party in my March judgment, where I said this at [22]-[23]:
"Where a party fails to appear at the hearing of an application the court may proceed in their absence: CPR 23.11. This is a power that must be exercised in accordance with the overriding objective. Ms Page properly referred me to authority making it clear that the court should be very careful before concluding that it is appropriate to proceed in the absence of a litigant in person who is seeking for the first time to adjourn a hearing: Fox v Graham Group Ltd (26 July 2001) (Neuberger J); SmithKline Beecham Ltd v GSKline Ltd [2011] EWHC 169 (Ch) (Arnold J), [6]. That is not the situation here, however. The defendant has not sought an adjournment. …
Where a litigant fails to appear without giving a reason it is necessary to consider first whether they have had proper notice of the hearing date and the matters, including the evidence, to be considered at the hearing. If satisfied that such notice has been given, the court must examine the available evidence as to the reasons why the litigant has not appeared, to see if this provides a ground for adjourning the hearing."
I consider that the same approach is appropriate here, with three modifications. The first is that on this occasion the hearing is a trial of the issue of remedies. The applicable rule is therefore CPR 39.3(1), by which "The court may proceed with a trial in the absence of a party …". A judgment or order made in absence may be set aside on an application made for that purpose, but rule 39.3(5) lays down certain threshold requirements which do not apply in the case of a mere application. I do not consider that these differences affect the overall approach that I should take, however. The second modification is that here the defendant has given express reasons for her non-appearance. The third modification is that default judgment has been entered against the defendant. That means that I should consider whether to treat her letter as in substance an application to set aside judgment or for time to make such an application.
I am entirely satisfied that the defendant has had proper notice of the Remedies Hearing and the matters to be considered at it. The documentary evidence makes clear that iLaw have been given written notice by the claimant's solicitors of each step in this litigation. The opening paragraphs of the defendant's 19 June letter confirm what one would expect, by indicating that Mr Hall of iLaw had passed on the information given to his firm in the claimants' solicitors email and letter of 17 and 18 June 2015. The date fixed for the hearing was notified to iLaw by the claimant's solicitors on 22 June 2015. Subsequently, the correspondence shows, the claimant's solicitors served on the defendant via iLaw the evidence to be relied on at the remedies hearing, the skeleton argument, chronologies, and list of authorities and the hearing bundles. The defendant's letter itself confirms that iLaw have passed on the claimant's solicitors' correspondence.
I therefore need to address whether there is anything in the available evidence that provides a ground for adjourning the hearing. First and foremost I must consider the defendant's letter.
The first observation that needs to be made about the letter is that it does not contain any application for an adjournment or the setting aside of any judgment or order. Indeed, it makes no application of any kind. Secondly, it is not a witness statement. I attach some real importance to each of these points. The defendant is not a lawyer, and those assisting her at the MLDI may or may not be lawyers. However, they must all know that to obtain any order from a court a litigant must make an application for that order. They must surely know, in addition, that evidence in support of an application or at a trial is given by means of a witness statement.
In saying this I am not attaching any weight to mere formalities. Part 23 does not require an application notice to be in any particular form. What it does require is that the notice "must state (a) what order the applicant is seeking; and (b) briefly, why the applicant is seeking the order": CPR 23.6. The defendant has not in any shape or form asked me to adjourn this hearing. The 19 June letter does not identify, clearly or at all, any order which the defendant seeks or any step which she wishes me to take. I am merely asked in some unspecified way to "take into account" what the defendant says is her position when I reach my "final decision." A witness statement can be non-compliant with some formalities, but it must contain a statement of truth. A statement of truth is not a mere formality. It makes a witness statement a distinctly different thing from a letter, falsehoods in witness statements carry particular consequences. The defendant's letter is not an adequate substitute for evidence confirmed by a statement of truth.
Despite these points, and although not asked by the defendant to adjourn the hearing, I heard argument from Ms Page QC, and considered whether an adjournment of the Remedies Hearing would be the just and appropriate response to the contents of the defendant's letter. I shall set out the majority of that letter later in this judgment. Put simply, however, she was clearly saying that she had not been afforded access to justice, and explaining why. She was also saying that she had a meritorious defence. If these were reasonable points then the overriding objective would seem to mandate an adjournment, to ensure fairness. My conclusion was however that the defendant's letter was not at all persuasive, and that the course of action most consistent with the overriding objective was not to keep the claimant from recovering the remedies the law provides, but rather to proceed to hear evidence and argument, and to reach decisions on remedies.
The defendant makes six main points in her letter, some of which are inter-related. They are (i) language difficulties, given that she is Russian, (ii) financial problems precluding her from paying for translation and representation; (iii) inability to obtain pro bono representation; (iv) inability to conduct the litigation in person; (v) the gravity of the consequences for her of an adverse judgment; (vi) the merits of her case. I shall deal with each in turn.
(i) Language difficulties
The defendant's letter says this:
"My native language is Russian, and I only have limited knowledge of English. I have found it very difficult to engage with the English courts in relation to my case because of my limited ability to speak, read and write in English. I have had to rely on my husband, Alexei Alexandrovich Koslov, to translate many of the email communications and documents I have received in relation to my case. My husband's knowledge of English, although slightly better than my own, is far from fluent. Furthermore, due to my financial position, I have also been unable to afford translators to work on my case. This has meant that I have been unable to read Russian translations of the court's documents. This includes the Honourable Justice Warby's written decision of 5 March 2015.
… I am unable to ascertain my legal position from these documents [provided to her by iLaw] due to language issues, my lack of legal representation and my lack of translation resources"
I shall return to the defendant's alleged financial position and inability to fund representation. But I do not accept that this paragraph fairly represents the defendant's linguistic abilities, or those of her husband.
It would have been an easy matter for the defendant to raise a matter such as language difficulties at an earlier point in this case, whether at the time she was represented by iLaw, as well as by specialist junior Counsel, or afterwards. Yet not only has she not claimed that language was a barrier for her, she has positively asserted an ability to read and write the English language and to understand written English.
The defendant told the court this in paragraph 4 of her witness statement of 5 September 2014:
"I am able to speak some English and can read and understand English. In order to make this witness statement, I communicated with my solicitors in English and through a Russian lawyer in Russian. The statement was then drafted in English and I have been able to read and understand it and confirm that it is accurate."
The defendant had no reason to overstate her ability to read and understand English at that time. The witness statement which she had been able to read and understand contained some complex material and some sophisticated English relating to, for instance, the Hague Service Convention and other procedural rules. The defendant's own witness statement therefore indicates a relatively high level of skill in English.
At paragraph 44 of the same statement the defendant disclosed that "I am able to read and write in English" (my emphasis). She said there that she is "not proficient in spoken English" and would need an interpreter, but that is a different matter. Many for whom English is not their first language need an interpreter when in court, but are well able to read and write the language, as the defendant said she could in September 2014.
The Wikipedia profile exhibited to the first witness statement of Mr Sloutsker records that the defendant was the Moscow correspondent for Institutional Investor Magazine from 1991-1994. The evidence of Mr Frost, the claimant's solicitor, is that this is a US based English language magazine. As for the English language abilities of Mr Kozlov, I allowed Ms Page to lead evidence from Mr Sloutsker on the topic, given the late emergence of an issue about it. He told me that Mr Kozlov "Was very much fluent in English. He was performing correspondence in English and in contact with my lawyer in Geneva, Jack Jones, who is of US origin. He was in contact with other foreign partners of mine who were English speakers only. He was in written correspondence with them and had verbal conversations. He was quite fluent for business purposes. He never required any translation assistance or any support or help. His correspondence in English was complete, in grammar and sentences. It was comparable to my own at the time I was living in Moscow until 2007."
My judgment of 5 March 2015 was lengthy. However, it contained a paragraph which summarised in a few lines all of my main conclusions. The claimant's evidence shows that my decision was extensively reported at the time by the Russian media both in English and in Russian. The reports are short, but accurately summarise the gist of my decision to dismiss the defendant's application and accept jurisdiction over the claim. That is not hard to understand. The orders I have made have deliberately been expressed in straightforward language, and the correspondence from the claimant's solicitors has been simple not complex. The defendant is an educated woman, a Professor of Journalism. I cannot accept her claim that she has encountered language difficulties such as to disable her from following what is going on in the proceedings or from engaging with the court.
(ii) Financial position
Nor do I accept the defendant's claim that financial limitations have prevented her access to justice in this court. If finance were a real problem, the most natural thing would have been to say so in her witness statement of September 2014. This, however, said nothing at all about any financial constraints. The statement did refer to a number of steps that would have to be taken by the defendant if this action proceeded in this country, including obtaining translations. It said that the need for translation would needlessly increase the costs. But at no point did it indicate that the defendant would be unable to meet such increased costs, or that her defence of the claim would or might be stifled or hampered by expense if the claim proceeded here.
iLaw's letter to the court of 13 January 2015 was the first occasion on which it was suggested that the defendant had financial difficulties. The solicitors enclosed notice of change dated the previous day, stating that the defendant was now acting in person. They went on to refer to "queries" that had been posed by the claimant's solicitors about the intended case of truth that she had referred to in her September 2014 witness statement. They said that "The Defendant has not responded, and does not intend to respond, to the Claimant's queries. The simple fact of the matter is that she cannot afford the costs of dealing with these queries or indeed of further representation in the matter." …
With due respect to the author of that letter, the suggestion that answering the questions posed by the claimant's solicitors would have involved substantial or, as it was put elsewhere in the letter "disproportionate" cost, is hard to accept. Some of the questions, for instance, related to the defendant's contention that she would prove the truth of an allegation that the claimant "or someone acting on his behalf, contacted an officer of the FSB seeking to arrange for the killing of Alexei Kozlov for payment of the sum of $300,000." The 31 October letter asked her to identify the FSB officer, and state when and how he was approached, and the evidence that the officer would give by which it would be proved that the approach was by the claimant or someone acting under his direction, and that its purpose was to arrange the killing of Mr Kozlov. In circumstances where her list of intended witnesses did not appear to include any FSB officer, she was asked to confirm that she did not intend to call that officer at trial. Ms Page was justified in submitting that these questions, and others contained in the letter of 31 October 2014, were straightforward and not costly to answer. To suggest that it was "disproportionate" to provide answers to such questions was remarkable and unconvincing.
It is a striking feature of iLaw's letter of 13 January 2015 that whilst asserting an inability to fund representation it gave no detail at all. Nor was there any evidence to confirm this – a point I made in my reasons for ordering a payment of £10,000 on account of costs (above). There is still no evidence, strictly so-called, as there is still no witness statement. The defendant has however gone into some detail in her letter. She says this:
"On 1 April 2015, I received a court document from iLaw. It was my interpretation of this document that I had to pay 10,000 GBP to the English courts before I could proceed with defending my case. I viewed this as a completely unreasonable sum as I do not have the means to pay such a large sum of money."
This is clearly a reference to my order of 31 March 2015. I am unable to understand how the defendant could have interpreted that order as requiring her to pay £10,000 as a condition of proceeding with the case. It does not say that, or anything of the kind. It specifically provides a time for service of a Defence. Moreover, as I have noted, the order made quite clear that the defendant could apply to the court. That would have been a simple matter yet she did no such thing.
The defendant's letter went on to say that her net annual income "is" RUB 902,060.38, equivalent to about £10,662. She produced documents evidencing the three income streams that are said to contribute to this total. However, I believe I am justified in rejecting what she says in her letter about her finances. That is for four reasons.
The first is that this is only said in any detail at all at this late stage. Secondly, the statements are made in a letter and not in a witness statement. The only witness statement made by the defendant is that of 5 September 2014, which says nothing about any financial constraints. The third reason is the narrow scope of what the defendant says. As the claimant's evidence points out, the figures and documents she has provided relate to 2013. Nothing is said about 2014 or 2015. The figures given do not address all the apparent sources of income that the claimant would seem to have. They say nothing whatever about her capital assets. And nothing is said about resources that may be available to the defendant from other sources, such as her husband. The fourth reason for rejecting the defendant's case on this issue is that the claimant's evidence suggests that the true picture is very different from the one presented by the defendant.
The evidence is that the defendant lives in a high value home in an expensive district of Moscow, where properties cost about US$6,500 per square metre. According to a translated article, the defendant has spoken in the past of her husband's wealth and their lifestyle in these terms: "By Moscow standards he was a completely average businessman. Yes [there was] Rublyovka [a prestigious Moscow suburb], Nikolina Gora [the most expensive suburb of Moscow], a country house, holidays five times a year, a big fleet of cars. Well he was 'worth' a few million dollars, maybe up to $10m". There are media reports suggesting the sale of a property by her for between RUB 40m and RUB 100m (approximately £500,000 and £1.25m). Photos posted on Facebook by her husband suggest they enjoy expensive holidays. In addition, there is evidence that in 2011 the claimant received an award set at either RUB 500,000 or RUB 1,000,000 (between £12,500 and £25,000)
This evidence has been assembled at relatively short notice, from publicly available material, by translators acting for the claimant. It can therefore be said to have some shortcomings. It has been served on the defendant, but only relatively shortly before this hearing. The defendant cannot reasonably complain of the short notice, however, as it flows directly from her failure to copy the claimant's solicitors in on her letter to the court. I accept this evidence as a better guide to the true financial position of the defendant than her own letter and its supporting documentation.
(iii) Inability to obtain pro bono representation
If I am right in my conclusions on the defendant's financial position this issue and the next do not arise, but I shall deal with them nonetheless.
There is no suggestion by the defendant that she sought legal help from anyone between 13 January 2015 and April 2015. She gives this account of her efforts to obtain advice or representation without payment:
"In April 2015, I reached out to Karinna Moskalenko, a Russian human rights lawyer, to see if she could help me with my case free of charge. I felt that I needed a lawyer's advice to see what I could do about my case, and Karinna Moskalenko is a personal friend. She consulted with a number of people to see if they could help me. On 20 April 2015, I also contacted Anna Stavinchkay, another Russian lawyer to see if she could advise me in relation to my case free of charge."
As noted at [16-17] above, the procedural position in April 2015 was that after giving the defendant time to make submissions about the timing of a Defence I had set her a deadline. Time was running, but the deadline was 24 April and the defendant had been told, in my reasons of 31 March 2015, that she could apply for an extension of time for that purpose. I cannot accept that she failed to understand the simple English in which that point was stated. Moreover, in the event, judgment in default was not entered until as late as 29 May 2015. The defendant therefore had more than a month more than the time I had allowed her in which to file a Defence.
The defendant does not give any account of what she did between 20 April and 29 May. Her letter goes on:
"Anna and Karinna spoke with each other, and on 2 June 2015 Karinna spoke with Peter Noorlander who is the Chief Executive Officer of the Media Legal Defence Initiative. The Media Legal Defence Initiative … then reached out to its pro-bono network but was ultimately unable to find lawyers to take on my case due to its complexity at this stage. I have tried every effort to find free legal defence, but to no avail, and I now believe it is impossible for my position to be fairly represented before the British courts."
It was not until after default judgment had been entered against her, therefore, that the defendant, through her Moscow legal contacts, got in touch with the MLDI. Her contention is that the MLDI was then unable to find lawyers for her due to the "complexity" of her case, and that she has made "every effort."
It is in my judgment highly improbable that the claimant has been unable for financial reasons to secure the services of adequately skilled lawyers. She gives no detail of any attempts made by her, other than her contacts with the two named Moscow layers. The claimant's researches have however identified two Russian organisations that appear to provide legal assistance to journalists: one, advertising its services at www.mmdc.ru which offers a hotline for legal advice on issues affecting the professional activities of journalists and the other at www.freepress.ru providing 'help for journalists in critical situations.' More pertinently perhaps, since this is a case in England and Wales, Ms Page points out that 'old-style' conditional fee agreements are still permitted in this area of law, and that many of the cases heard in this court are pursued or defended on this basis, and, occasionally, both.
The additional point is well made by Ms Page, that the defendant's case is not 'complex' at this stage, or at all. She has had judgment in default entered against her, because she has failed to file a Defence. The rules permit her to make an application to set aside that judgment, provided she can show an arguable case on the merits. She has previously asserted that she can prove the truth of what she said. As will appear from my discussion of her case on the merits, she is presently saying either that, or that she can establish that she engaged in responsible journalism, or both. These are not inherently complex matters. Many more complex cases have been taken on CFAs in modern times, when as here there is reason to believe the opposing party would be able to meet a costs order. In the light of my assessment of the defendant's merits arguments, below, I consider the likely reasons for her failure to secure fresh legal representation are a failure to make diligent efforts and/or a failure to persuade any candidate lawyers that her case is likely to succeed.
(iv) Inability to conduct the litigation in person
The defendant states in her letter that iLaw agreed to act for her for a fixed fee of £5,000, to cover "representation for the stage of the proceedings relating to whether the English courts could properly hear my case". For financial reasons she had to cease instruction of iLaw on 12 January 2015 which "has left me with no choice but to represent myself before the English Courts." I do not accept that, for reasons already given. The defendant then says that "under the circumstances, I am unable to properly do so." I am not persuaded that this last sentence is true.
The defendant says, for instance, that she "cannot afford to travel from Russia to England in order to file documents, and take part in meetings and hearings." This is the first time this point has been made. There have so far been only two hearings in this matter. All other issues have been dealt with on the papers, a process I have adopted specifically to assist the defendant. There is no difficulty in filing documents from a remote location, electronically or by post. I note, in this connection, that the defendant's letter of 19 June 2015 was received in the court office on the day it was sent. Financial difficulties cannot explain the defendant's failure to file documents.
As for hearings, it is simply not credible that the defendant cannot afford to travel to this country at all. The claimant's evidence shows that flights from Moscow to London and back on 13 July 2015 could have been obtained for RUB 10,970 each way, or about £250 in total. Even on her own account of her financial position this is plainly not beyond the defendant's means. The defendant's claim that "it would be hard for me even to obtain a visa" is mere assertion, unsupported by any evidence and lacking in detail. She does not say that she has tried to obtain a visa or, if not, explain why she would find it hard to obtain one.
(vi) Adverse impact of a judgment
The defendant says:
"This case has now become like a runaway cart that I am unable to stop, and ultimately it is going to have an incredible financial and reputational impact on my life.
….
I am a reputable journalist in Russia, and I rely heavily on my good name as a journalist. A judgment against me from an English court would seriously affect my status as a journalist in my own country."
I accept that a judgment of this court against the defendant is an important matter, that it is likely to have a financial and reputational impact on the defendant, and that it may very well affect her status as a journalist in Russia. The defendant's letter entirely overlooks, however, the fact of which she must be aware, that a judgment has already been entered against her because of her failure to file a Defence. The letter also fails, in my judgment, to put forward any acceptable explanation for her complete failure to engage with the court or the claimant's solicitors at any time between 13 January and 19 June 2015.
When default judgment has been entered the court should not easily be diverted from granting the appropriate remedies by pleas for clemency that come at the last minute, without any adequate explanation for their lateness. The position might be different if such a plea was accompanied by an application to set aside the judgment, or at least – in the case of an unrepresented litigant such as this defendant - cogent material suggesting that despite her long silence she has an arguable case on the merits
(vi) Merits
The defendant says:
"I wish I was in a position to defend my rights as a journalist and justify the blog, articles and radio interview that are the subject matter of this case. However, it is simply not possible for me to do so without some form of legal representation.
I stand by my belief that Mr Sloutsker's claim is without merit, and that I practised responsible journalism in disclosing the information that I did."
Ms Page submits that this represents a stance inconsistent with the merits arguments advanced by the defendant in her September 2014 witness statement. At that stage she stated she would prove the truth of her allegations against the claimant. Now she suggests for the first time a defence of responsible journalism, instead. I think that may be too strict an interpretation of these parts of the defendant's letter. I would adopt a more generous interpretation, reading the word "justify" as suggesting that she could establish the truth of what she said. I suspect that the new reference to responsible journalism is prompted by an observation in my March judgment at [78].
What I would not accept, however, is that the defendant has yet put forward cogent material suggesting an arguable defence on the merits, such as might support an application to set aside the default judgment I have granted against her. She has not made any such application, so what I have to say should not be regarded as a determination of such an application. It is however relevant to my task to consider what the available material suggests as to the merits. My conclusion is that the material indicates that the merits are not strong.
So far as the defence of truth or, to give it its common law name, justification is concerned, the assessment I made at paragraphs [74] and [78] of my March judgment was that "the defendant's evidence as it stands is not satisfactory" and that "the information provided appears on the face of it an unpromising basis for a plea of justification." The reasons for these conclusions appear from paragraphs [74]-[78] of that judgment and do not require repetition. To those reasons I would add what I have said above about the defendant's failure to answer the claimant's solicitors' "queries" about her supposed defence of truth. Her refusal to answer any of those queries on unconvincing grounds undermines her claim that it is "simply not possible" for her to defend herself without legal representation.
There is now further material that causes me to take a considerably more sceptical view of the merits of a defence of truth in respect of the allegation that the claimant plotted to murder Mr Kozlov. The researches prompted by receipt of the defendant's letter led the claimant's legal team to an interview given by the defendant in 2011 to Peter Oborne for a Channel 4 documentary "Russia: Vlad's Army", Unreported World Series broadcast. The programme was broadcast on 4 November 2011, a date worth noting, as it is the day before the publication of the Blogpost and the Second and Third Articles complained of by the claimant. I have been provided with a transcript of the relevant parts of the interview, which includes the following. 'PO' is Mr Oborne; PO/C is commentary by him; 'OR' is the defendant. The defendant spoke in Russian, with English subtitles.
"PO/C: Every Wednesday evening, a group of wives meet in this Moscow restaurant. Many of them say Russia's security service, the FSB, have arranged for their husbands to be jailed on trumped up charges.
Woman: [Speaking in Russian with sub-titles ..................]
PO/C: In some cases they say their husbands were jailed because they posed a political threat or just because the men who run Putin's Russia want a slice of their companies. The inspiration for these dinners was Olga Romanova, a financial journalist whose husband had been in prison for three years. I went back to Olga's to find out about her husband and her fight to free him. Until three years ago her husband Alexey ran a successful construction business. Then, Olga wrote an article about the business dealings of Mordashov, an ally of Vladimir Putin. She said that soon after an official close to Putin made a menacing call to Alexey's business partner who passed the message on.
OR: He told my husband he had to choose. Either he had to leave his wife who he had allowed to write about Putin or to stop being his business partner.
PO: So what happened next? What did your husband do when he was given this choice between divorcing you and getting out of the business?
OR: I was amazed he didn't even want to discuss us getting divorced. I thought he was more rational.
PO/C: Soon after, the FSB investigated him and he was sentenced to 8 years for fraud. In Russia, few people regard the courts as independent of the state.
PO: So who is it who is bringing charges against your husband?
OR: The K Department of the FSB. It's the same unit that has jailed people for political and commercial reasons before us and is still doing it now.
PO/C: Olga believes Putin was guilty of allowing businesses to be unfairly seized to enrich his allies.
OR: Putin's FSB cronies are ideologically loyal so they are allowed to earn infinite money."
This is an account of events given by the defendant herself that Ms Page submits is wholly inconsistent with the account involving the claimant, which the defendant claims she can defend as true, or as responsible journalism. I agree. In the Channel 4 interview, the defendant accused the Russian security service, the FSB, acting under the direction of President Putin, of being the originator of trumped up charges against her husband, and his consequent imprisonment, by way of reprisal for what the defendant had written about an ally of Mr Putin. The version of events given in the articles complained of and the defendant's witness statement was that it was the claimant who was responsible for fabricating the charges against her husband. No mention was made of Mr Mordashov or Mr Putin or the FSB in that connection. Her account was that the FSB, so far from organising the prosecution and incarceration of Mr Kozlov, had acted to foil an attempt by the claimant to have him murdered, by revealing that attempt to the media.
The position seems to me to be made worse rather than better for the defendant by her reference in the 19 June letter to the 'Magnitsky list'. She says that Alexei Kozlov "the threats to whom I reported on and which ultimately led to the present case, is mentioned in the 'Magnitsky Act' adopted by US Congress in December 2012."
The 'Magnitsky Act' is a reference to the Russia and Moldova Jackson-Vanik Repeal and Sergei Magnitsy Rule of Law Accountability Act of 2012, passed by Congress on 7 December 2012 and enacted after being signed by the President on 14 December 2012. Sec. 404 imposes on the President an obligation to submit to the appropriate congressional committees a list ('the Magnitsky List') of persons whom the President determines, based on credible information, is (1) responsible for the detention, abuse or death of Sergei Magnitsky, or played certain other specified roles in respect of Mr Magnitsky or
"(2) is responsible for extrajudicial killings torture, or other gross violations of internationally recognized human rights committed against individuals seeking "
(A) to expose illegal activity carried out by officials of the Government of the Russian Federation; or
(B) to obtain exercise, defend, or promote internationally recognised human rights and freedoms …."
Given these criteria, and the nature of the claimant's case of truth or responsible journalism as I understand it, it is unsurprising that she does not suggest that the claimant is on the Magnitsky List. I am told by Ms Page, and accept, that he is not. It is not easy to understand what significance the defendant does attribute to the Act, when one examines the context in which her husband is mentioned. His name appears in Sec. 402 which contains 15 "Findings". The last of these is as follows (the emphasis is mine):
"The tragic and unresolved murders of Nustap Abdurakhmanov, Maksharip Aushev …. the death in custody of Vera Trifonova, the disappearances of Mokhmadsalakh Masaev… the torture of Ali Israilov… the near-fatal beatings of Mikhail Bekhetov … and the harsh and ongoing imprisonment of Michail Khodorkovsky, Alexei Kozlov … further illustrate the grave danger of exposing the wrongdoing of officials of the Government of the Russian Federation … or of seeking to obtain, exercise, defend, or promote internationally recognized human rights and freedoms."
This finding is apparently consistent with the allegations made by the defendant in her Channel 4 interview, as it appears to depict Alexei Kozlov's imprisonment as a consequence of 'exposing the wrongdoing' of Russian officials. The finding seems to me to be inconsistent with the articles complained of, and the case of truth put forward by the claimant in her September 2014 witness statement. The fact that shortly before she accused the claimant of the matters complained of she was advancing a different account to Mr Oborne, coupled with her failure to answer the legitimate questions posed in the claimant's solicitors' letter of 31 October 2014, also leaves me wondering how the defendant could hope to sustain a responsible journalism defence. I am certainly not persuaded that the material she puts forward should lead me to treat the defendant's letter as if it were an application to set aside default judgment, or to adjourn and extend her time for doing so.
Summary of conclusions
The defendant has not asked for an adjournment, nor has she applied for the default judgment against her to be set aside. I have nonetheless considered carefully whether her letter should lead me to adjourn, so that she can apply to set aside the default judgment or make representations as to remedies. Having examined each of the points made in her 19 June letter I am not persuaded that she is or has been deprived of a fair opportunity to contest this claim. I am not convinced that language difficulties have been a significant obstacle. I do not accept, either, that financial constraints have obliged her to dispense with paid legal representation. Even if that were the case I am not persuaded that pro bono or CFA advice and representation have been or are unavailable to her, or that in the absence of such representation she has been unable fairly to defend her position. The likely reasons for her lack of representation are lack of effort on her part, and/or a failure by her to convince a lawyer of the merits of her cause.
D. Damages
Legal principles
In cases such as this, where there is no claim for punitive or exemplary damages, the purpose of a damages award is compensatory. The aim as in all tort cases is to restore the claimant so far as money can do so, to the position he would have been in had the libels not been published. That requires compensation for the injury done by the libels to the claimant's reputation. Where the claimant is an individual it also requires compensation for the injury to his feelings.
In arriving at an appropriate figure for injury to reputation the court must take account of the gravity of the defamation, and the extent of its publication (Gatley on Libel and Slander 12th Ed para 9.4 p 333). Republication by third parties, where this is a likely result of the original publication, is included in this; in the modern era the court will take into account the tendency of damaging statements to percolate via the Internet: Cairns v Modi [2012] EWCA Civ 1382, [2013] 1 WLR 1015 [27].
Damages for injury to feelings may be significant. The court must take account of what the claimant "thinks other people are thinking of him": Cassell & Co Ltd v Broome [1972] AC 1027, 1125 (Lord Diplock). Damages for injury to feelings may be mitigated by a retraction or apology, or they may be aggravated by the way the defence of the action is conducted, subject to some qualifications mentioned below.
The sum awarded must also be enough to serve as an outward and visible sign of vindication. Vindication is sometimes identified as a purpose of damages separate and distinct from that of compensation. I prefer to see it as an intrinsic part of compensation for this tort, the gist of which is the effect on the claimant's reputation and standing in the eyes of others. Damages which serve to restore the claimant's reputation to what it was by vindicating his reputation serve a compensatory purpose. If the award fails to achieve vindication it fails properly to compensate. The correct analysis does not however impact on the approach in the present case. The approach is well summarised in the often-cited words of Cory J in the Supreme Court of Canada in Hill v Church of Scientology [1995] 2 SCR 1130 [166]:
"Not merely can [the claimant] recover the estimated sum of his past and future losses, but, in case the libel, driven underground, emerges from its lurking place at some future date, he must be able to point to a sum awarded by a jury sufficient to convince a bystander of the baselessness of the charge."
In that case, a tweet published to 65 people resulted in a damages award of £75,000 before an uplift of a further £15,000 by way of aggravated damages for the way in which the proceedings were conducted on behalf of the defendant. In the case of Times Newspapers Ltd v Flood [[2013] EWHC 4075, internet publication to 550 people resulted in an award of £60,000. In neither case was the allegation complained of as high up the scale of gravity as in this case.
Having said this much, I need to bear in mind some restraints on damages awards in this area. First, in cases of international libel, the court must always be careful to ensure that it compensates only for the damage caused by the publications that are complained of in the action. In this case, the publications complained of are those that took place in this jurisdiction, and these represent only a part of the total publication. I therefore rule out any compensation for damage sustained by the claimant as a result of publication in Russia, or elsewhere outside this jurisdiction. It follows from this general point that vindication is only relevant in so far as it is required to clear the claimant's name in the eyes of readers or listeners in this jurisdiction.
Secondly, it is notable that in Hill Cory J referred to a sum awarded by a jury. Now that jury trial is very much the exception, in this jurisdiction the award will be made by a judge in the vast majority of cases. Depending on the circumstances, a claimant may obtain some measure of vindication from the judge's reasoned judgment. This possibility should be taken account, whilst keeping in mind that the ordinary bystander is more likely to pay attention to the sum awarded than to the details of a reasoned judgment: Purnell v Business F1 Magazine Ltd [2007] EWCA Civ 1382, [2008] 1 WLR 1; Cairns v Modi [31]. As Eady J observed in Cruddas v Adams [2013] EWHC 145 (QB) [43], "What most interested observers will want to know is, quite simply, 'how much did he get'?"
Thirdly, it is necessary to be a little cautious about aggravated damages claims.
i) Ms Page relies on the suggestion in Gatley paragraph 9.4 (above) that in assessing damages for injury to reputation account should be taken of the extent to which the defamatory charge has been persisted in. That must be qualified, it seems to me. Compensatable damage may continue because the defendant has not withdrawn or apologised for the defamation; but the court must be careful not to treat assertions that an allegation is true as conduct that in itself increases harm to reputation, or otherwise aggravates damages. Persistence in asserting the truth can aggravate injury to feelings, and is compensatable if the allegation is manifestly unsustainable. However, as pointed out by Lord Neuberger of Abbotsbury NPJ in Blakeney-Williams v Cathay Pacific Airways Ltd [2012] HKCFA 61, 62, [2013] EMLR 6 at [105], it is wrong in principle to award aggravated damages on account of a good faith defence of truth. (See also Oriental Daily Publisher Ltd v Ming Pao Holdings Ltd [2012] HKCFA 59, [2013] EMLR 7 [132] (Ribeiro P)).
ii) Ms Page also relies on the fact that my March judgment was reported in the Russian media, in reports which included reference to the defendant's allegation that the claimant sought to have Mr Kozlovsky murdered. One of these is, by way of example, headed "London court to hear libel suit brought by ex-Russian senator Slutsker". The claimant's witness statement refers to this as a matter relevant to damages. In the course of argument however Ms Page has accepted that these reports are only relevant to the extent that their publication in this jurisdiction increased the injury to the claimant's feelings. Given my conclusions about the reach of the publications complained of, and the nature of the reports relied on, I accept that these reports will have been read by a substantial number of people in this jurisdiction. But I cannot attribute a significant element of any damages award to any hurt feelings suffered by the claimant on that account. The reports in evidence are fair and neutral accounts of the proceedings and my judgment. Whilst they will have brought the allegation to the attention of a reader who did not previously know of it, they will equally have informed such a reader that the claimant is suing the defendant for libel and that the case is going ahead.
Finally, the court's overall award must not be more than is required to achieve the legitimate aims of compensating the claimant and, if this is a separate requirement, vindicating his reputation; the court's approach is constrained by the Convention requirements of necessity and proportionality: Rantzen v Mirror Group Newspapers (1986) Ltd [1994] QB 670 and John v MGN Ltd [1997] QB 586. The Judge will normally arrive at a global figure by way of award: Cairns v Modi [2013] 1 WLR 1015 [38]. It may be helpful to refer to personal injury awards to ensure damages will be, and be seen as, proportionate.
Gravity
I have set out the meanings complained of by the claimant at [9] above. As I said in my March judgment at [69],"It is beyond dispute that the imputations complained of are all extremely serious." At that stage all I had to assess was whether those meanings were arguable, which they plainly were and are. Ms Page now invites me to make findings of fact that the publications complained of bore those meanings.
I do not think that is either necessary or appropriate. There are cases in which the court has made an assessment of the merits of a publication claim, when deciding whether to grant default judgment (eg Law Society v Kordowski [2011] EWHC 3185 (QB), [2014] EMLR 2; QRS v Beach [2014] EWHC 3319 (QB)) or when assessing damages after default judgment has been entered (eg Al-Amoudi v Kifle [2011] EWHC 2037 (QB) [8]-[17]). However, CPR 12.11(1) provides that "Where a claimant makes an application for a default judgment, judgment shall be such judgment as it appears to the court that the claimant is entitled to on his statement of case." This rule enables the court to proceed on the basis of the claimant's unchallenged particulars of claim. There is no need to adduce evidence or for findings of fact to be made in cases where the defendant has not disputed the claimant's allegations. That in my judgment will normally be the right approach for the court to take. Examination of the merits will usually involve unnecessary expenditure of time and resources and hence contrary to the overriding objective. It also runs the risk of needlessly complicating matters if an application is later made to set aside the default judgment: see QRS v Beach [2014] EWHC 4189 (QB), [2015] 1 WLR 2701 esp at [53]-[56].
I note that HHJ Parkes QC appears to have taken a view similar to mine in Reachlocal UK Ltd v Bennett [2014] EWHC 3405 (QB), [2015] EMLR 7 [32], where he said:
"I do not think that I am required, and Mr Singh does not ask me, to consider whether [the claimant's pleaded] meanings are apposite, in the sense of being the correct meanings of the words complained of. It seems to me that the claimants are entitled to rely on the judgment and on the terms of CPR 12.11. That may be just as well, because the task of assessing the meanings of a variety of different publications, some of which may have been read or heard by some publishees and others of which may have been read by other publishees, would be a protracted one.""
I shall therefore assess damages on the basis of the claimant's pleaded meanings. I add four points. The first is that not only has the defendant put in no defence, she has never specified the respects in which she disagrees with the claimant's case. The second is that I recognise that the general approach outlined above could need modification in an appropriate case, for instance if the court concluded that the claimant's interpretation of the words complained of was wildly extravagant and impossible, or that the words were clearly not defamatory in their tendency. That however leads to my third point: I remain quite satisfied that the claimant's meanings in this case represent, at the least, reasonable interpretations of the offending words. Finally, I note that Ms Page submitted that the approach I am taking would unreasonably curtail the vindication obtained by the claimant. I do not agree. He has obtained judgment because the defendant has failed to put in a defence. He will be awarded damages on the footing that his case is correct. I do not consider that in the circumstances of this case justice requires more than that.
The extent of publication
It seems to me that an approach similar to the one I have outlined above should in principle apply in this respect also, though with some modification. A claimant should be able to rely at the default judgment stage of the proceedings on the allegations as to the extent of publication which are set out in his statement of case. Similarly, at the assessment of damages stage. At that stage, however, he may supplement those allegations with evidence, provided it does not go beyond the boundaries of pleaded case but fills in the detail.
Here, the Particulars of Claim pleaded the scale of publication alleged by the claimant, setting out visitor and viewer figures for each of the means of publication and republication. In addition, however, evidence was adduced by both parties in relation to the defendant's application to set aside service of the proceedings, and I assessed that evidence in ruling on that application. No additional evidence on the issue has since been adduced by either party, nor has the defendant said anything about the matter. I consider it appropriate to proceed on the basis of the findings in paragraph [69] of my March judgment:
"Even on the defendant's figures, however, and allowing for the qualifications she puts forward, the sting of the allegations made on each of the Blogpost, the Second Article and the Third Article could easily have reached as many as 60,000 readers in this jurisdiction, and the Programme appears likely to have been heard or read here by several thousand at least."
Evidence of harm
I dealt with the extent of the claimant's reputation here in my March judgment at [59]-[69]. It is unnecessary to repeat in full what I then said. It is sufficient to say that the evidence was and is that the claimant was well-known as a Russian senator, and that in 2001 there were 248,000 people from countries where Russian is spoken living in the UK. He is well known in the Jewish community especially in London. And he is well known internationally as a successful business man. He has visited London frequently and owned a house there from 2000. His divorce was the subject of a highly publicised ruling by the Family Division in 2012. That, though after the initial publication, was during the period when it was continuing as it does to this day. I was and remain satisfied that the claimant had "a real and substantial reputation in this jurisdiction at the time of first publication, which is likely to have grown since."
Since my May judgment the claimant has made a further witness statement and gave oral evidence to me. In his statement he gave further evidence of his links with this jurisdiction, referring to several visits to London over the past few months. I established that these were not all in connection with this case, but included business visits relating to real estate investment. He also explained his intention to relocate to London with his family over the next 2 years. Family means his 16 year old son and 11 year old daughter and his parents, both in their 80s but in good health. These are matters of obvious relevance to the extent of any need for vindication.
As to his feelings, he said "The allegations are so serious and harmful that I continue to live in fear of the danger that at any time they will be brought up in the context of my business dealings or will surface so as to cast a shadow over me…" I note that these points are specifically tied by him, as is proper, to fear of the consequences for his reputation in this jurisdiction, including with the British Jewish Leadership Council and British politicians. The claimant expresses frustration at the defendant's conduct in claiming her allegations are true, "without producing any evidence that would allow me to refute her claims in detail". That in my view is a legitimate ground of complaint by way of aggravation of damage, given the defendant's response to the letter of 31 October 2014.
Assessment
These were serious libels. The allegation of conspiracy to murder is the most serious, but the addition of imputations of corruption makes the matter worse. The allegations were published to a relatively substantial audience in this jurisdiction, where the claimant has a substantial and valuable reputation. My assessment of him as a witness is that he is a robust character, and that whilst his evidence of distress is genuine he has not suffered lasting emotional injury. He is however entitled to a sum that will vindicate him in the eyes of interested third parties who are unlikely to read this judgment. Adopting the approach I have indicated above, and taking account of all the factual matters I have identified, I have reached the conclusion that the appropriate global award of damages to compensate for the injury to reputation, and to feelings, and to ensure adequate vindication in respect of these serious allegations is £110,000.
E. The Claim for an Injunction
I remind myself that the judgment to which a party is entitled when the defendant fails to serve a Defence is such judgment as he is entitled to on his statement of case. It has long been the position that the court will grant the injunction which appears to be merited on the face of the particulars of claim. An injunction is of course a discretionary remedy. An injunction to restrain publication is one which represents an interference with freedom of expression and must therefore be no more than is necessary or proportionate in pursuit of the legitimate aim pursued. In this case that aim is the protection and vindication of the claimant's reputation in this jurisdiction. I have no doubt that the gravity of the allegations in this case means that Article 8 is engaged.
In many publication cases there are strong countervailing considerations, which will usually include freedom of expression and may include other Convention rights. Decisions on whether to grant an injunction in publication cases can therefore often involve difficult balancing exercise. Where a default judgment has been entered, however, the position is simpler. As Ms Page points out, I should proceed on the basis that there is no defence and hence no justification for interfering with the claimant's right to a good reputation. There is no objection in principle to the grant of an injunction against a foreign defendant subject to the court's jurisdiction. In Jameel v Dow Jones [2005] QB 946, there was no suggestion that there was any bar in principle to the grant of an injunction against the defendant, the US company Dow Jones & Co Inc. Indeed, Lord Phillips MR said at [74] that where there is a relevant threat, there may well be justification for pursuing proceedings to obtain an injunction, even where the defamatory statement has received insignificant publication in the jurisdiction.
That said, there would be no justification for granting an injunction in the absence of any evidence that repetition was to be anticipated. Sometimes there is no such evidence. Here, though, publication has continued with no apparent attempt by the defendant to stop it, and an assertion by her that what she said is true. My attention has also been drawn to the Wikipedia profiles of the defendant and Mr Kozlovsky, which make similar allegations against the claimant, and to a book chapter written by the defendant and published in late 2013, in which she accuses the claimant of "throwing his partner [Kozlovsky] in prison" (I note that the allegation of conspiracy to murder does not appear to be repeated). I am satisfied there is a real prospect that the defendant will re-publish the allegations complained of, if an injunction is not granted.
Will she do so anyway, and if so should I hold back from granting an injunction on the grounds that it is pointless, or worse? It is well-established that the court will not grant an injunction that it would not take steps to enforce if it were broken. But the court does not approach the question of whether to grant of an injunction against a person over whom, necessarily, it has assumed jurisdiction, on the basis that the person is likely to disobey the order if made. More than this, as Lord Bingham said in South Bucks DC v Porter [2003] 2 AC 558 [32]: "When granting an injunction, the court does not contemplate the possibility that it will be disobeyed.... Apprehension that a party may disobey an order should not deter the court from making an order otherwise appropriate: there is not one law for the law-abiding and another for the lawless and truculent." It may also be appropriate to grant an injunction if it would have a real deterrent effect on the particular defendant: Secretary of State for the Environment, Food and Rural Affairs v Meier [2009] 1 WLR 2780.
In deciding to grant an order prohibiting this defendant from further publishing the imputations complained of or similar imputations in this jurisdiction I bear in mind the relatively limited impact that such an injunction would, in principle, have. It is an order directed at the defendant personally. In my judgment, the better view is that the so-called Spycatcher principle, that a person knowing of an injunction who does an act which defeats the court's purpose is in contempt of court, does not apply to injunctions restraining the publication of a libel. No third person would be in contempt unless they somehow assisted the defendant to publish in this jurisdiction in breach of my order. So far as foreign defendants are concerned the order will contain the usual Babanaft proviso, so that they are clearly not affected save to the extent that a foreign court so declares. Despite these limitations I consider it appropriate in my discretion to grant the injunction sought, against an individual who declares her utmost respect for the English court.
F. Overall Conclusions
I concluded that it was appropriate to hear evidence and argument at the Remedies Hearing, and to reach decisions on the appropriate remedies, despite the defendant's letter of 19 June 2015. I have set out my evaluation of that letter in detail above. After hearing evidence and argument I have concluded that the appropriate award of damages is £110,000, and that I should grant an injunction restraining the defendant from republishing the allegations complained of in this jurisdiction.
The defendant has had the opportunity to participate in this case throughout, but has declined to do so between 13 January and 19 June 2015. She has not attended any hearings in the case. The only step she has taken since I decided the case could proceed in this jurisdiction is to write a letter to the court. She knew of her right to appear. She has been repeatedly informed by me in writing of her rights to apply to set aside orders and directions made by the court in her absence. She has also had the opportunity to seek permission to appeal. She has done none of these things. On this occasion I make clear in this judgment, without intending to encourage or discourage any such steps, that the defendant has a right under CPR 13 to apply to set aside the default judgment that I entered against her on 29 May 2015. Alternatively she may seek permission to appeal out of time against that judgment. She also has, as noted above, the right to apply under CPR 39.3(3) to set aside this decision. Alternatively she may apply to stay enforcement of my award of damages, or seek permission to appeal against it, or my grant of an injunction.
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Mr Justice Nicol :
This has been the trial of claims for slander and libel brought by the comedian and entertainer, Freddie Starr, against Karin Ward. They arise out of an interview which Ms Ward gave to the BBC in November 2011 and to ITV in October 2012 and the subsequent broadcasts of parts of those interviews and also out of online publications made by Ms Ward.
1974: the background
Ms Ward was born on 25th March 1958. She had a troubled family background including, she says, sexual assault by her step father. She also shoplifted on a number of occasions. When she was about 14 she was sent to Duncroft Approved School ('Duncroft') in Surrey. There were about 25 girls at the school. The Headmistress was Margaret Jones.
While Ms Ward was at Duncroft she met Jimmy Savile ('Savile'). She says that she and other girls at Duncroft were sexually abused by Savile. In return they were given cigarettes and also the opportunity to attend Savile's TV shows. Savile was particularly known for a show called 'Jim'll Fix It'. But another show was a programme called 'Clunk Click' on which guests appeared with Savile in front of a studio audience. 'Clunk Click' was not broadcast live, but recorded in advance of transmission.
One episode of 'Clunk Click' was filmed on 7th March 1974. Ms Ward and about 4 other girls from Duncroft attended as part of the studio audience. On that date Ms Ward was 15. One of the guests on that episode of 'Clunk Click' was Freddie Starr. He was 32 at the time and was well known as a comedian and entertainer.
After the show, Ms Ward says that she and the other girls from Duncroft were able to meet with Savile and others connected with the show including Mr Starr. Precisely what took place then is hotly disputed between the parties and I will need to return to it but, in very brief terms, Ms Ward's case is that Mr Starr felt her bottom. She protested vigorously. She says that he then made a crude remark referring to the flatness of her chest. She found this deeply humiliating. Mr Starr denies touching or attempting to touch Ms Ward. He denies saying anything humiliating.
The publications complained of
Ms Ward wrote an account of some of the incidents in her life on a website called 'FanStory'. She says that she started this exercise in 2008. For that reason it is convenient to take it first. However, the Particulars of Claim pleaded that the words were only defamatory of the Claimant after 8th October 2012, by which time the Defendant says she had taken this part of her account down from the website. In the course of his closing submissions, Mr Dunham, on the Claimant's behalf, accepted that he had no evidence to contradict what the Defendant said about the date when the story was taken down. He accepted that this part of the Claimant's case could not succeed.
Nonetheless, what the Defendant said in 'FanStory' is relevant to other parts of the evidence and so it is still useful to set it out. What are conveniently called 'the FanStory words' were as follows:
"The first time we were taken to London there were eight of us. All the rest of the girls had gone home for the weekend. We were escorted into Television Centre and taken to see Sir Jimmy in his 'dressing room'.
The air hung thick with his foul cigar smoke. He laughed and joked with Miss Jones, Theo and every girl close enough to speak to. We were to be introduced to some of his guests on the show before it began.
Now my recollections of meeting with these guests are very vivid, not least because at least one of them has since been prosecuted for sexual misconduct with minors. Don't get me wrong. Not every celebrity we met was a closet paedophile.
Over several weeks, I met a great many male and female celebrities, some of whom I remember fondly for their intelligence, wit and general pleasant demeanour. However, of those who had similar tastes to Jimmy Savile – a liking of under-age girls, I can only recall vague disgust and horror.
One particular celebrity, a very popular comedian of the time, whom I shall simply refer to as 'F', absolutely stank of booze and sweat. His hands wandered incessantly; he had absolutely no qualms whatever about any one of the girls seeing what he was doing to any of the others. The fact that we sat in his dressing room with him, drinking vodka or Bacardi rum whilst he blatantly selected which girl to humiliate amazes me. I cannot recall where Miss Jones and Theo were. Surely, they must have known what was going on?
…
Even so there were no acts of violence or threats. No-one was hit or taken against their will. I refused 'F' because getting anywhere near him made me heave. He smelled far too much like my step-father for my liking. 'F' made some rather cruel remarks about my lack of breasts by way of getting back at me for refusing him. Everyone laughed whilst I burned with humiliation."
On 14th November 2011 the Defendant was interviewed by Liz MacKean of the BBC. In the course of the interview, the Defendant spoke these words:
"That's when the other guests on the show would come in, generally after the show had finished they would come in and they clearly saw girls and, well, kids, male and female, as being there to be used. I had a famous person who would try, he smelled awful, he smelled of sweat and alcohol and it made me heave just to be near him, so I certainly didn't want him to do anything to me."
For this publication the Claimant relies on words spoken by the Defendant. It is therefore a claim in slander[1]. He pleads that the words were defamatory of him in an innuendo meaning. An innuendo meaning is one which is dependent on certain facts being known to the person or people to whom they were published. In this case, the Claimant alleges that Ms Ward told Ms MacKean that the famous person in question was him. It is also alleged that Ms Ward told Ms MacKean that she had visited Savile's dressing room when she was a 14 year old schoolgirl and that the Defendant's words were in answer to the question 'What sort of things happened in Jimmy Savile's dressing room?'
With the knowledge of those facts, it is alleged that these words were defamatory of the Claimant in that they meant that he saw children in Savile's dressing room as being there to be sexually abused and that he had tried to abuse the Defendant when she was a fourteen year old schoolgirl. I will refer to this publication as 'the BBC words'.
Savile had died on 29th October 2011. Liz MacKean had interviewed the Defendant for the purpose of an item which she was helping to make for BBC 'Newsnight' on Savile's sexual offending. The BBC decided not to go ahead with the item before it was completed. The interview with the Defendant was not therefore broadcast on 'Newsnight' or anywhere else immediately after it was recorded. A part of it was broadcast later (see below).
One of the people who had helped to work on the 'Newsnight' report was a consultant called Mark Williams-Thomas. In the autumn of 2012 he was preparing a programme on Jimmy Savile for ITV which was to be called 'Exposure: the Other Side of Jimmy Savile' ('Exposure'). The Defendant and Mr Williams-Thomas were in contact and she agreed to give him an interview which took place on 2nd October 2012. Ms Ward said in her interview, the following:
"I was horribly, horribly humiliated by Freddie Starr who had a very bad attack of wandering hands and had groped me and I didn't like him because he smelled like my step-father and it frightened me and freaked me out and I rebuffed him and he humiliated me in front of everyone in the dressing room."
I will refer to these as 'the ITV words'. Since they were spoken by the Defendant to Mr Williams-Thomas, the Claimant's claim in respect of them is again in slander[2]. Again the Claimant relies on an innuendo meaning. He alleges that Ms Ward told Mr Williams-Thomas that she was a fourteen year old schoolgirl at the relevant time and, with the knowledge of that, the ITV words meant to Mr Williams-Thomas that the Claimant was a paedophile who had groped and thereby sexually assaulted the Defendant when she was a fourteen year old schoolgirl and that he had humiliated and frightened her.
'Exposure' was broadcast on 3rd October 2012. Mr Williams-Thomas explained that its focus was Jimmy Savile. The programme did not include the ITV words.
In order to explain how, nonetheless, the ITV words and BBC words came to be broadcast, it is necessary to interpose an account of further developments.
Others within ITV had access to the material which Mr Williams-Thomas had accumulated, including his interview with the Defendant. On 3rd October 2012, a senior news editor at ITN emailed the Claimant's solicitor (Mr Dunham) and asked him to respond to the allegation that the Claimant had groped and humiliated a 14 year old girl in Jimmy Savile's changing room in the 1970s. Shortly afterwards, Mr Dunham responded by saying that the allegation was false and defamatory and he asked ITN to confirm that they would not report it, failing which the Claimant would seek an injunction. ITN responded by saying that it did not intend to identify the Claimant and it was carrying out journalistic inquiries. If circumstances changed, Mr Dunham would be notified. That evening (3rd October 2012) the Claimant applied without notice for a temporary injunction. This was granted by Cox J. A hearing on notice took place the following day (4th October 2012) before Tugendhat J. who discharged the injunction and ordered the Claimant to pay costs on an indemnity basis. Tugendhat J. was careful in his judgment not to set out the allegation as to what the Claimant was said to have done. Nevertheless, his judgment was public and the Claimant's unsuccessful attempt to obtain an injunction was widely reported.
The Claimant then gave media interviews in which he denied meeting the Defendant, let alone groping her. He also denied being with Jimmy Savile on BBC premises. He said that he had only met Savile twice and those were quite different occasions. His remarks were widely reported.
On 8th October 2012 Channel 4 News obtained footage of the episode of 'Clunk Click' which had been filmed on 7th March 1974. The Claimant could be seen as one of the guests on the show. The Defendant could be seen in the audience on the set.
That same day, 8th October 2012, Channel 4 News broadcast part of the interview which Mr Williams-Thomas had conducted with the Defendant on 2nd October and which included the ITV words. It did so as part of its coverage of developments following 'Exposure'. It included the apology of the Director-General of the BBC to victims of Jimmy Savile's abuse. It also included a report of the Claimant's attempts to obtain an injunction (initially successful, but then unsuccessful), his denial that he had ever met the Defendant or appeared on a Savile show, and the 'Clunk Click' footage showing the presence of both the Claimant and the Defendant. It also included a statement by Mr Dunham that the Claimant accepted he had been mistaken about appearing on the Savile show, but that he maintained his denial of the Defendant's allegation.
On 10th October 2012 the Claimant was interviewed on an ITV show, 'This Morning' together with his fiancé Sophie Lea. An extract of the Defendant's interview with Mr Williams-Thomas (which included the ITV words) was played. The 'Clunk Click' footage was also played. The Claimant was allowed to give his response to both. He denied the Defendant's allegation.
On 1st November 2012 the Claimant was arrested on suspicion of sex abuse. An extract from the Defendant's interview with Mr Williams-Thomas (again including the ITV words) was broadcast on ITV News. The broadcast also included the Claimant's full denial.
It is helpful to refer to these three broadcasts as 'the ITV broadcasts'. The Claimant has not sued ITV. He alleges that the Defendant is responsible in law for the harm which they caused him by two alternative routes. First, he submits it is a consequential loss flowing from the original slander in the ITV words and that the Defendant is liable for this further loss since she knew or should have known that there was at least a significant risk that the ITV words would be broadcast to a wide audience. Secondly, he submits, the Defendant is liable for them as a co-publisher since, he alleges, she intended or authorised the ITV words to be broadcast. He argues as well that, even if the Defendant did not intend or authorise these further broadcasts, the reasonable foreseeability that they might occur would be sufficient to make her liable as a co-publisher of them.
The 8th October broadcast was preceded by the words 'Karin Ward was a schoolgirl when she claims she was assaulted.'
The natural and ordinary meaning which the Claimant attributes to the ITV broadcasts is that the Claimant was a paedophile who had groped and thereby sexually assaulted the Defendant when she was a schoolgirl and that he had humiliated and frightened her. A defamatory publication by TV broadcast is a form of libel and, so far as the Claimant relies on the ITV broadcasts as giving rise to an independent cause of action, it is therefore in libel.
On 22nd October 2012 BBC broadcast a 'Panorama' programme. It included footage of the Claimant. A narrator then said,
'Among the guests on Clunk Click were young people from hospitals and other institutions, including girls from Duncroft. Karin Ward, aged just 14, was one of them. After the show, she was invited with other young people to join more famous guests in the dressing rooms. She told Newsnight about this 11 months ago in the interview that was dropped'.
Liz MacKean was then heard to say,
'What sort of things happened in Jimmy Savile's dressing room?'
The BBC words were then broadcast. They were followed by footage of the notorious paedophile, Gary Glitter and these words,
'Gary Glitter also appeared on Clunk Click. He, too, would join Jimmy Savile and his young guests in the dressing room after the show.'
I shall refer to this as 'the BBC broadcast'.
The Claimant says the BBC broadcast had the natural and ordinary meaning that he saw children in Jimmy Savile's dressing room as being there to be sexually abused, and that he had tried to abuse the Defendant when she was a fourteen year old schoolgirl.
The Claimant has not sued the BBC. As with the ITV broadcasts, the Claimant alleges that the Defendant is liable for the harm which flowed from the BBC broadcast either because it was reasonably foreseeable that there was a significant risk that the BBC words would be broadcast and she is liable for the harm which flowed from the broadcast as consequential loss from her slanderous BBC words, and/or because she is a co-publisher of the broadcasts since she intended or authorised them, or, because the broadcast was a reasonably foreseeable consequence of her interview with Liz MacKean.
On 13th October 2012 the Defendant published an eBook for the Kindle device. It was entitled, 'Keri Karin: the shocking true story of a child abused, continued' and included the following words:
"The first time we were taken to London there were eight of us. All the rest of the girls had gone home for the weekend. We were escorted into Television Centre and taken to see JS in his 'dressing room'.
The room was large and well appointed. The air hung thick with his foul cigar smoke but most of us were smoking cigarettes as well so it all combined into a kind of hazy fog at ceiling height. JS laughed and joked with Miss Jones, Theo and every girl close enough to speak to. We were to be introduced to some of his guests on the show before it began.
Now some of my recollection of meeting with these guests are very vivid, not least because at least one of them has since been prosecuted for sexual misconduct with minors. Don't get me wrong. Not every celebrity we met was a closet paedophile.
Over several weeks, I met a great many male and female celebrities, some of whom I remember fondly for their intelligence, wit and general pleasant demeanour. However, of those who had similar tastes to JS – a liking for under-age girls, I can only recall vague disgust and horror.
One particular celebrity, a very popular comedian of the time, whom I shall simply refer to as 'F', absolutely stank of old sweat and the same cologne my step-father used to use. His hands wandered incessantly; he had absolutely no qualms whatever about any one of the girls seeing what he was doing to any of the others. The fact that we sat in JS's dressing room with both of them, being encouraged to drink vodka, gin or Bacardi rum whilst they blatantly selected which girl to humiliate amazes me. I cannot recall where Miss Jones and Theo were. Surely, they must have known what was going on?
…
Even so, there were no episodes of violence or threats. No-one was hit or taken against their will. I refused 'F' because getting anywhere close to him made me heave. He smelled far too much like my step-father for my liking. 'F' was furious that I dared refuse him; he made an exceptionally cruel remark about my lack of breasts by way of getting back at me for refusing him. So that everyone could hear, he said loudly, 'I wouldn't touch you anyway, you're a titless wonder!' Everyone laughed while I burned with humiliation. I carried that humiliation for the rest of my adult life because I was always stick thin and never, ever had any breasts; I could barely fill a double A cup bra."
I shall refer to these as 'the eBook words'.
The Claimant alleges that, although he is not named in the eBook words, he could be identified as the popular comedian (which is what he was) whose name began with 'F' (which his did) and because of the ITV broadcasts and (after 22nd October 2012) the BBC broadcast.
The Claimant alleges that the eBook words meant that he was a paedophile with a sexual liking for underage girls; that he groped and thereby sexually assaulted underage girls; that he, with Jimmy Savile, encouraged a group of underage girls to drink alcohol while blatantly choosing which of them to humiliate; and that he humiliated the Defendant in front of other girls.
The Claimant has claimed general damages for harm to his personal and professional reputation and because of the distress, upset and embarrassment which the Defendant's publications have caused him. He has also alleged that he suffered special damages in the form of lost earnings when a number of venues cancelled his previously booked appearance with them.
The Defendant's defences in outline
The Defendant takes issue with the meanings attributed to each of the different publications and the facts relied on to support the innuendo meanings of the BBC words and ITV words.
She accepts that she spoke the ITV words and the BBC words. She argues that to be actionable slander the Claimant would have either to prove special damage or he would have to show that the publications came within one of the specific categories of case where proof of special damage is unnecessary. Although the Claimant pleaded that he had suffered special damage in the form of lost bookings, she had provided evidence which disputed each of them and the Claimant had not challenged any of that evidence. Accordingly, the Claimant could not show special damage. His Particulars of Claim did not allege that any of exceptional cases where slander was actionable per se (i.e. by itself and without proof of special loss) applied to either the ITV words or the BBC words. She does not accept that she is liable for the ITV broadcasts or the BBC broadcasts, whether as consequential loss or as co-publisher.
She denies that the eBook words identified the Claimant.
For each of the publications, the Defendant pleads in the alternative that the words were true in the meanings which she sets out.
In the further alternative, the Defendant says that she is entitled to rely on the same privilege as was established in Reynolds v Times Newspapers Ltd [2001] 2 AC 127 ('Reynolds'), or that each of the publications was on an occasion of qualified privilege since there was a duty and interest relationship between herself and those to whom each publication was made. She says also that the claims (except the ones based on the BBC and ITV broadcasts) are an abuse of process.
She argues that the claim in relation to the BBC words is time barred because the claim was issued on 23rd September 2013, which was more than 1 year after her interview with the BBC on 14th November 2011.
The Claimant denies that Reynolds privilege is available to a person such as the Defendant who is not a journalist, but the source of the allegations in question. In any case, he denies that the necessary foundation for a Reynolds privilege has been established. The Claimant does not accept that any of the publications were on an occasion of qualified privilege since she had no duty to publish and the journalists had no interest in receiving her communications. He disputes that any of the Defendant's allegations are true.
The oral evidence
The Claimant gave evidence. He also called Susan Bunce who had also been at Duncroft. She was 15 when she, too, went with the Defendant and other girls from the school to the recording of 'Clunk Click' on 7th March 1974. She recalled meeting Freddie Starr after the show. I will return to other parts of her evidence.
The Defendant gave evidence. She also called Meirion Jones. He was the nephew of Margaret Jones, the headmistress of Duncroft at the time the Defendant was there. He worked as an Investigations Producer for the BBC on 'Newsnight' in 2011 and the proposed item on Jimmy Savile in particular. He made contact with the Defendant and encouraged her to give an interview on camera (primarily about Savile). Liz MacKean conducted the interview with the Defendant for the 'Newsnight' item. She, too, gave evidence. Mark Williams-Thomas was a consultant for 'Newsnight' and then worked on the 'Exposure' programme for ITV. He, also, was called by the Defendant.
Another of the girls who had been at Duncroft had also been in contact with Ms MacKean. She was unwilling to give evidence voluntarily but she was witness summonsed by the Defendant. Before she was called, I heard an application made on her behalf that she should be able to conceal her name from the public and press in court. I agreed for reasons which I gave orally in a judgment on Monday 22nd June 2015. Accordingly, I will refer to her as 'Witness C' in this judgment.
Applications by the Claimant
In the course of his closing submissions on behalf of the Claimant, Mr Dunham made two applications: (a) to amend the Particulars of Claim and (b) to disapply the ordinary period of limitation in respect of the claim in slander for the BBC Words. Both applications were opposed by Mr Price QC for the Defendant and I said that I would give my decision on them in my Judgment. Since they raise discrete issues, it is convenient to deal with them now.
Extension of time to bring the claim in slander for the BBC Words
As I have noted, the BBC Words were spoken by the Defendant in her interview with Liz MacKean on 14th November 2011. The Claim Form was issued on 23rd September 2013. That is more than the 1 year which is the ordinary limitation period for defamation claims – see Limitation Act 1980 s.4A. Mr Dunham's application was for the limitation period to be extended pursuant to the Court's power in s.32A. This says,
"(1) If it appears to the court that it would be equitable to allow an action to proceed having regard to the degree to which –
(a) the operation of section 4A of this Act prejudices the plaintiff or any person whom he represents, and
(b) any decision of the court under this subsection would prejudice the defendant or any person whom he represents,
the court may direct that that section shall not apply to the action or shall not apply to any specified cause of action to which the action relates.
(2) In acting under this section the court shall have regard to all the circumstances of the case and in particular to –
(a) the length of, and the reasons for the delay on the part of the plaintiff;
(b) where the reason or one of the reasons for the delay was that all or any of the facts relevant to the cause of action did not become known to the plaintiff until after the end of the period mentioned in section 4A –
(i) the date on which any such facts did become known to him, and
(ii) the extent to which he acted promptly and reasonably once he knew whether or not the facts in question might be capable of giving rise to an action;
(c) the extent to which, having regard to the delay, relevant evidence is likely -
(i) to be unavailable, or
(ii) to be less cogent than if the action had been brought within the period mentioned in section 4A.
…."
The Claimant was arrested by the police on 1st November 2012 on suspicion of having sexually assaulted the Defendant. The Amended Defence pleads (and the Re-Amended Reply admits) that some 14 additional complainants made similar allegations to the police. The Claimant was on police bail until May 2014 when the CPS announced that he was not to be charged with any offence.
The letter before claim was written by the Claimant's solicitors on 2nd September 2013. The letter began by saying,
'Please note that this letter has nothing to do with the current police investigation in relation to your allegations and therefore that it relates to a civil matter, not criminal.'
The letter concluded,
'Please note that this letter is in no way meant to interfere with the current police investigation relating to you and our Client. In this respect we can confirm that we have fully informed the police of the action that our Client is taking against you and provided them with a copy of this letter.'
Mr Dunham submitted that section 32A conferred a broad discretion on the Court. The Claimant could not have known about the interview with the BBC until the broadcast took place and he had issued proceedings less than a year after that. The limitation defence was only applicable to one of the Claimant's causes of action. In consequence, the Defendant would anyway have had to face a trial in respect of the other causes of action and these covered broadly the same territory. It was obvious that the Claimant was inhibited from taking action by the police investigation. The final paragraph of the letter before claim showed that he had, properly, liaised with the police before proceeding.
Mr Price accepted that the Claimant could not have known about the Defendant's interview with the BBC until 'Panorama' was broadcast on 22nd October 2012. However, it was obvious from 'Panorama' that the Defendant had been interviewed. The words she had spoken - the BBC words – in the course of that interview were included in the programme. In addition, the commentator in the programme had said precisely when the Defendant had been interviewed – 14th November 2011. Consequently, the Claimant had all the information he needed for his claim in slander for the speaking of the BBC words as from 22nd October 2012. Section 32A(2)(b) directed the court to have specific regard to the date when the Claimant became aware of the necessary facts and the extent to which he acted promptly when he had that knowledge. But, this paragraph began with the words, 'where the reason or one of the reasons for the delay was that all or any of the facts relevant to the cause of action did not become known to the plaintiff until after the end of the period mentioned in section 4A.' Mr Price emphasised the words I have italicised because the Claimant could not satisfy this opening condition. He knew about the BBC words on 22nd October 2012, which was less than a year after the interview on 14th November 2011.
The Re-Amended Reply pleaded that the Claimant had acted promptly after he did become aware of the interview but, Mr Price submitted, that was not so. He would have been aware of the interview from the 'Panorama' broadcast on 22nd October 2012. His solicitors did not write their letter before claim until 2nd September 2013, some 9 months later and the Claim Form was issued on 23rd September, over 10 months after 'Panorama' was broadcast. This was not the prompt action which s.32A(2)(b)(ii) expected. The letter before claim did refer to the Claimant's liaison with the police, but it did not say when this took place or why it could not have occurred earlier. The police investigations had, of course, been ongoing, but they were still continuing when the Claimant's solicitors did write on 2nd September 2013 and they were still continuing when the Claim Form was issued on 23rd September 2013. Nor was there any evidence at all from the Claimant to explain or expand on the reasons for the delay.
I turn to the specific matters to which I must have regard in accordance with s.32A(2):
i) The length of the delay is a little over 10 months beyond the 1 year ordinary limitation period.
ii) I accept that until 22nd October 2012 the Claimant was unaware of the BBC interview, but, as Mr Price submitted, the ordinary limitation period had not by then expired. If 'delay', as I believe, refers to the time which elapsed after the expiry of the ordinary limitation period and before proceedings commenced, then there is no explanation at all. When a claimant is seeking to have an ordinary limitation period disapplied, the absence of an explanation for the delay can be of great importance – see for instance Steedman v BBC [2002] EMLR 318 (CA) per Brooke LJ at [45].
iii) Because all the facts relevant to the cause of action arising out of the BBC words were known before the ordinary limitation period expired, s.32A(2)(b) is not applicable. I accept that I must take account of all the circumstances, but particular regard must be had to the matters referred to in sub-paragraphs (i) and (ii) and they do not assist the Claimant. The date on which the facts were known to the Claimant was 22nd October 2012. Waiting 9 months thereafter to write a letter before action and almost another month before issuing the Claim Form was not in my judgment an example of acting promptly or reasonably. When the Claim Form was issued the sensible course was taken of staying proceedings until the police investigation was concluded. There is no evidence before me as to why a similar procedure could not have been adopted if the Claim Form had been issued earlier.
iv) The Defendant has not suggested that evidence is unavailable or less cogent because of the delay.
Those are the specific matters to which I must have regard, but the essential test is in s.32A(1), namely whether it would equitable to allow the action to proceed having regard (I paraphrase) to the degree to which the Claimant would be prejudiced if this claim is time barred and the degree to which disapplying the time bar would prejudice the Defendant. In my view, the prejudice on either side would not be very great. The Claimant will lose the opportunity of obtaining redress (assuming, as I must, that the claim in slander for the BBC words would otherwise be a good one) for the BBC words. The immediate audience for the BBC words were few – probably only Liz MacKean and the camera operator. I appreciate that the Claimant alleges that the Defendant is liable as well for the onward broadcast by 'Panorama' on 22nd October 2012. As I have already said, he does so on two bases. If he is right in his contention that the Defendant is liable as a co-publisher of her words on 'Panorama' then he will still recover because that cause of action is not time-barred. If he is right only in his contention that the Defendant's liability is for consequential loss caused by the broadcast then, I recognise, he will lose compensation for that loss as well if the action for slander in the BBC words is barred by limitation. This is not a situation where allowing the ordinary time bar to operate will preclude the Claimant from seeking vindication of his reputation. He has his other causes of action which will be a vehicle by which he can seek to achieve that end. Conversely, this is not a case where if the time bar operates the Defendant will be free of litigation worry. I recognise, of course, that the features of each of the causes of action differ somewhat, as do the defences advanced by the Defendant.
I have considered all of these matters, but what seems to me to be of particular importance is the absence of any evidence as to why the Claimant delayed. 'Time is always "of the essence" in defamation claims' – see the Defamation Pre-Action Protocol paragraph 1.4. It is for the Claimant to persuade the Court that the equitable jurisdiction which he invokes under s.32A ought to be exercised. In my judgment he has failed to do that. I will not disapply the ordinary time limit.
This has the consequence that his claim in slander for the BBC words is time barred. That in turn means that the Defendant is not liable for any consequential loss caused by the 'Panorama' broadcast. I will consider below his case that the Defendant is liable as a co-publisher of the BBC words in the 'Panorama' broadcast.
Amendment of the Particulars of Claim to plead that the ITV words and BBC words were actionable without proof of special loss
There is no dispute that, ordinarily, slander is only actionable on proof of special damage which means, in essence, some financial loss. The Particulars of Claim did allege that the Claimant had suffered such loss because bookings for his appearance were later withdrawn. The Defendant served a witness statement from Helen Morris of David Price Solicitors and Advocates, the Defendant's solicitors, which explained why, in each case, it was not accepted that the bookings had been withdrawn as a result of the publications on which the Claimant was suing the Defendant. Mr Dunham in his closing submissions accepted that the Claimant had put in no evidence in response. He accepted that the claim for special damage must fail.
There are, though, four categories of case where slander is actionable without proof of special damage. In those cases, as with all libels, the slander is said to be actionable per se (by itself). In their current form, the Particulars of Claim do not allege that the slanders on which the Claimant sues (i.e. the ITV words and the BBC words) were actionable per se. Mr Dunham accepted in his closing submissions that, in order for the Claimant to make a case out that the slanders were in one of these exceptional categories, the Claimant would need to plead the necessary facts. This concession prompted Mr Dunham to apply to amend the Particulars of Claim so as to rely on two of the exceptional cases where slander is actionable per se.
I will concentrate on the ITV words since my decision above means that the claim in relation to BBC words is anyway time barred.
The Defamation Act 1952 s.2 provides,
'In an action for slander in respect of words, calculated to disparage the plaintiff in any office, profession, calling, trade or business held or carried on by him at the time of publication, it shall not be necessary to allege or prove special damage, whether or not the words are spoken of the plaintiff in the way of his office, profession, calling, trade or business.'
Mr Dunham wishes to add to the pleading of the ITV words that '[they were] calculated to disparage him in his profession as an entertainer and comedian'.
A second category of case where slander is actionable per se is where the words impute a criminal offence that is punishable by imprisonment.
In the paragraph of the Particulars of Claim which allege the meaning of the ITV words, Mr Dunham wishes to add that the words complained of 'impute a criminal offence namely s.14 of the Sexual Offences Act 1956 for which the Claimant could have been punished by imprisonment.'
By Section 14 of Sexual Offences Act 1956 it is an offence for a person to make an indecent assault on a woman. Section 14(2) provides that a girl under 16 cannot in law give any consent which would prevent an act being an assault for the purposes of this section. Where the victim was over 13 and the offence was committed prior to 1985, the maximum sentence was 2 years imprisonment. Section 14 of the 1956 Act was repealed by the Sexual Offences Act 2003. There was no specific transitional provision preserving the 1956 Act for historic offences in either the 2003 Act itself or the commencement order bringing it into force. However, the Interpretation Act 1978 s.16 is regarded as having that effect – see Archbold 2015 paragraph 20-1.
Mr Dunham argued that the ITV words alleged that the Claimant had 'groped' the Defendant and that would amount to an indecent assault which was punishable with imprisonment. For this reason as well, he submitted, the ITV words were actionable per se.
Mr Price opposed the application to amend. He accepted that an accusation of groping would be an allegation of sexual assault under the present law (Sexual Offences Act s.3). He submitted that it was rather more ambiguous as to whether the ITV words alleged an 'indecent' assault which was necessary for the words to impute an offence under s.14 of the 1956 Act. He submitted that the alternative relied upon by Mr Dunham was not arguable. The pleaded audience for the ITV words was the journalist, but the journalist in question, Mr Williams-Thomas was already aware of the Defendant's account of what Freddie Starr had done to her through having read her online account on FanStory and because he had learned from the Defendant that 'F' referred to the Claimant. So far as he was concerned, therefore, the allegation could make no difference to the Claimant's reputation, whether in connection with his business or otherwise. Mr Price refers me to Andre v Price [2010] EWHC 2572 (QB) in which Tugendhat J. considered a case of slander before a studio audience (in relation to words which were not subsequently broadcast). Tugendhat J commented that 'calculated' in Defamation Act 1952 s.2 meant 'likely' and this meant something less than 'more likely than not'. 'Disparage' could cover a wide range. It should be interpreted flexibly, but it meant something more than minimal. There had to be a degree of seriousness to justify imposing liability consistent with Article 10 of the European Convention on Human Rights - see [98] and [103]. Tugendhat J. also said that the effect of s.2 had to be considered, not just by reference to the words themselves. Their context was also important - see [99].
Mr Price argued as well that it would not be fair to allow the amendments to be made. He had prepared for the case on the basis that there was an obvious answer to the claims in slander: there had been no special loss proved and slander per se was not pleaded. In a case where the Claimant relied on multiple causes of action, the Defendant was entitled to adopt a proportionate approach to preparation for trial. It was notable as well that the Claimant had provided no evidence as to why this application was made so late in the day. That was a significant obstacle in the Claimant's path –see Swain-Mason v Mills and Reeve [2011] 1 WLR 2735 (CA) at [82], [104] – [106].
At this stage, I am only considering whether the Claimant should be permitted to amend his Particulars of Claim rather than ruling on whether the pleaded case can succeed. If it was hopeless, there would be no point in allowing the amendment, but I do not consider that to be so. The imputation of a criminal offence punishable by imprisonment is plainly arguable.
I also consider that the Claimant can arguably allege that the words were likely to disparage him in his profession. Mr Price's argument based on the limited audience for the ITV words is in my view flawed. If the Claimant in a slander claim cannot come within one of the special cases and has to prove special damage, the damage in question can arise from the repetition of the words by others, if that is the natural and probable consequence of the original publication – see Gatley 12th edition paragraph 5.9. That is the common law. However, I see no reason why the test of 'calculated' (for which read 'likely to') in Defamation Act 1952 s.2 should not be viewed in a similar way. If it was likely that the interview with the Defendant would be broadcast and so seen by a much wider audience and that was in turn likely to disparage the Defendant in his profession, I find it difficult to see why the test in s.2 would not then be satisfied. This issue did not arise in Andre v Price either because the words in question were not in fact broadcast or because the point was not argued.
While I understand that a legal representative in Mr Price's position has to make choices as to how to prepare for a trial, an argument based on prejudice has to be rather more clearly particularised. I could not discern in Mr Price's submissions any particular questions which he would have wished to put to any of the witnesses if the Particulars of Claim had stood as Mr Dunham wishes to amend them. In the course of the argument on the application to amend, Mr Price has taken the opportunity to make his submissions as to why amendments do not assist the Claimant. I accept that there is no evidence to explain why the application is made so late in the day, but I accept as well the point made by Mr Dunham, that this amendment is very different from what was being considered in Swain-Mason. The present amendment is clear and straightforward (which was plainly not the case in Swain-Mason - see [107]). It was also a position anticipated by the Defendant since her Amended Defence in terms denied that the ITV words were actionable per se (see paragraph 5 of the Amended Defence).
I shall give permission to the Claimant to amend the Particulars of Claim in the way sought in paragraphs 3 and 5 (which are the ones relating to the ITV words). I will refuse permission in relation to paragraphs 9 and 10 (which are the ones relating to the BBC words) since the claim in slander arising out of the BBC words is anyway time barred.
The 'Panorama' broadcast
I have found that the slander for the BBC words is time barred. That means that the Claimant cannot recover for the 'Panorama' broadcast as consequential loss. He does, though, rely as an alternative on his claim that the Defendant is responsible for the repetition of the BBC words in 'Panorama' as a co-publisher of that part of the broadcast. I turn to that claim now.
A publication is only actionable in defamation if it is 'of the claimant'. Another way of putting this requirement is that it must be apparent to the readers or audience of the words in question that it is the claimant who is identified as the subject of those words. In her BBC interview the Defendant spoke only of what 'a famous person' had done. That would not be enough to identify the Claimant.
Identification does not have to be by name. The makers of 'Panorama' showed footage of the Claimant immediately before they broadcast the extract from the Defendant's interview with the BBC words. In combination the resulting broadcast was, I accept, 'of the Claimant'. But the question is whether the Defendant is liable as a co-publisher of what I will call that composite broadcast.
Mr Price accepts that she would be so liable if she intended or authorised the BBC to put out the composite broadcast. But, he submits, she neither intended it to do so, nor authorised it to do so.
Her evidence was that she did not intend Freddie Starr to be identified in what the BBC put out. That was why she referred to him as a 'famous person' rather than naming him. That approach was consistent with the fact that she had not named him in the FanStory words. She said the BBC promised her that Freddie Starr would not be identified. This evidence is corroborated by Liz MacKean and Meirion Jones. I accept their evidence. Of course, at the time of the Defendant's interview with the BBC, Mr Jones, Ms MacKean and their team were preparing an item for 'Newsnight'. The focus of the item was the behaviour of Jimmy Savile. Ms Ward had a great deal to say about the sexual abuse which she had suffered from Savile. What she had to say about Freddie Starr was of some relevance (because it had taken place on the occasion of a Savile TV show), but it was by no means certain that it would be included in an item which anyway was expected to last only about 10 minutes. It may be that no great thought was given by anyone to what use might be made of the interview if, as happened, the item was not included in 'Newsnight'. Nonetheless, given the content of the BBC words (deliberately not naming the Claimant) and the promises which the Defendant received (that the Claimant would not be identified) it seems to me impossible to infer or imply an intention on the part of the Defendant that a composite broadcast should take place which did identify the Claimant. For the same reason, it cannot be said that she impliedly or inferentially authorised the BBC to put out such a composite broadcast.
Mr Dunham argued that the Defendant would also be liable as a co-publisher if it was reasonably foreseeable that her words would be subsequently broadcast.
There are, though, several reasons why this argument is not open to the Claimant.
First it is not how the claim is pleaded. Paragraph 11 of the Particulars of Claim pleaded liability for the 'Panorama' programme. The Defendant served a Part 18 request which asked the Claimant to, 'Confirm that the broadcast referred to in paragraph 11 is merely being relied on as consequential damage arising from [the BBC words].' The Claimant responded, 'The publications referred to in paragraph 11 were intended and/or authorised by the Defendant and are therefore sued upon as an independent torts for which the Defendant is liable; further or alternatively they were a sufficiently foreseeable consequence of the publication of [the BBC words] such that the Defendant is liable for the enormous damage that the publications caused to the Claimant…' The emphasis is mine and shows that the claim that the Defendant was a co-publisher was premised on intention or authorisation. Reasonable foreseeability was put forward as the basis for liability for consequential loss, consequent on the original slander.
Second, the law does not support this alternative. It is sufficient to say in the circumstances that I share the views of Laws LJ in Berezovsky v Terluk [2011] EWCA Civ 1534 at [27] – [28]. He expressed his views tentatively because it was not necessary to reach a conclusion on the facts of that case. I also follow his views tentatively because in this case, as well, it is not necessary to reach a firm conclusion on the law.
The third obstacle in Mr Dunham's way is that his argument fails on the evidence. Once again, it is necessary to emphasise that it is only if one has regard to the composite broadcast that the Claimant is able to say the 'Panorama' broadcast was 'of him'. The Claimant therefore has to prove that the composite broadcast was a reasonably foreseeable consequence of the interview which the Defendant gave to the BBC. He cannot do that. Far from it being reasonably foreseeable that the BBC would broadcast the Defendant's interview in such a way as to identify the Claimant, the exact opposite was the case. The Defendant, Ms MacKean and Mr Jones expected that, if the BBC words were broadcast, the Claimant would not be identified.
For all of these reasons, I conclude that the Defendant is not liable as a co-publisher of 'Panorama'. Accordingly, the Claimant's claim for libel against the Defendant for that BBC broadcast fails.
The ITV words
I remind myself of what the Defendant said in her interview with Mark Williams-Thomas on 2nd October 2012. It was,
"I was horribly, horribly humiliated by Freddie Starr who had a very bad attack of wandering hands and had groped me and I didn't like him because he smelled like my step-father and it frightened and freaked me out and I rebuffed him and he humiliated me in front of everyone in the dressing room."
Unlike with the BBC words, the Defendant did name Freddie Starr in this interview. There is, therefore, no dispute that these words were spoken by her 'of the Claimant'. The pleaded natural and ordinary meaning of the words is not really disputed. In any event, I accept that they meant that the Claimant groped the Defendant. This would be taken to mean that he had touched her in a sexual way and, in this sense, had sexually assaulted her. I also accept that the words meant that he had humiliated and frightened the Defendant.
The Claimant also argues that the words had an innuendo meaning. He has pleaded that the ITN journalist was told by the Defendant that at the relevant time she was a fourteen year old schoolgirl. With that knowledge, the words which the Defendant spoke meant to him that the Claimant had groped and thereby sexually assaulted a fourteen year old schoolgirl whom he had also humiliated and frightened and, for this reason, he was a paedophile.
The ITN journalist was Mark Williams-Thomas. He says that he cannot recall the Defendant telling him that she was 14 at the time. He does remember knowing that she was still at school at the time and was under 16. He was not cross examined about this evidence.
While this means that the Claimant has not proved precisely the facts on which the innuendo meaning is based, in my judgment he has established sufficient for an innuendo meaning which is more serious than the natural and ordinary meaning. Frightening and humiliating a girl who is under 16 is more serious than doing the same to an adult. Groping and thereby sexually assaulting a girl who is under the age of consent is also more serious than doing the same to an adult woman. The allegation that the words also meant that the Claimant was a paedophile adds nothing to the meaning that he had sexually assaulted a girl who was under 16. So far as they do, that is not an additional meaning which I consider the words bore with the limited additional facts known to Mr Williams-Thomas that the Claimant was able to prove.
The Claimant has sued in slander for the ITV words. Mr Dunham has accepted that he cannot prove financial loss. By his amendments to the Particulars of Claim he relies on two categories of slander which are actionable without proof of special loss. He need only establish one. In my judgment he can rely on both.
i) I accept that the words were calculated (for which read 'likely') to disparage him in his profession as an entertainer and comedian. I have, in considering the application for permission to amend, referred to Mr Price's argument that Mr Williams-Thomas was already aware of the Defendant's account of what Freddie Starr had done (from his work on the 'Newsnight' item) and her repetition of that account in the ITV words could have had no impact on the Claimant's reputation so far as he was concerned. In my view, though, in deciding whether words are likely to have the relevant effect, it is permissible to take into account any repetition which is reasonably foreseeable. Whether or not the Defendant authorised or intended the ITV words to be broadcast (and I return to this below in the context of the ITV broadcasts), it was in my judgment reasonably foreseeable that they would be. The Claimant was about 69 when the Defendant was interviewed, but he was still performing and still active as a comedian and entertainer. The ITV words did not allege the most serious form of sexual assault, but I accept that they were likely to disparage the Claimant in his profession.
ii) In considering the application to amend, I explained that even in 2012 and long after the repeal of the Sexual Offences Act 1956, a person was still amenable to prosecution for something which was an offence under that Act at the time it was done. Section 14 of the Act prohibited an indecent assault on a woman. The prosecution would have to establish that the assault was 'indecent', but I am not concerned with whether the prosecution would necessarily succeed, but whether the words imputed that the Claimant had committed that offence. In my judgment, they did. To be relevant for these purposes, the imputed offence has to be punishable with imprisonment. An offence under s.14, committed in 1974, would have been punishable with a maximum of 2 years imprisonment. It is not necessary, as I understand it, for the Claimant to show that he was actually likely to be sent to prison if convicted of the particular act which was imputed.
It follows that the ITV words are actionable even without proof of special damage.
Mr Price argued that the claim in slander for speaking the ITV words was an abuse of process. Since that publication was only to Mark Williams-Thomas and he already knew of the allegation, it could have had no adverse impact on the Claimant's reputation.
As I have said above, it seems to me plain that it was at least reasonably foreseeable that the ITV words would be broadcast. If that is so, it is wrong to confine attention to the immediate audience of the ITV words at the time the interview was filmed. They had a potential for a much wider audience which was reasonably foreseeable. I would not dismiss the claim based on the ITV words as an abuse of process.
The remaining defences on which the Defendant relies for this claim (justification, Reynolds privilege, qualified privilege) are more conveniently dealt with when I consider the claim based on the ITV broadcasts.
The ITV broadcasts
These were the Channel 4 News on 8th October 2012, 'This Morning' on 10th October 2012 and ITV News on 1st November 2012. On each occasion, ITV played a clip from the interview which the Defendant had given to Mark Williams-Thomas. On each occasion the clip included the ITV words and a statement to the effect that she had been a schoolgirl when she claims she was assaulted.
The Claimant alleges that the Defendant intended or authorised the ITV words to be broadcast. In her witness statement the Defendant said that she agreed to be interviewed by Mr Williams-Thomas for the 'Exposure' programme. This was essentially about Jimmy Savile and his sexual abuse. As I have already noted, the Defendant had a good deal to say about how she had been sexually abused by Jimmy Savile. She claimed that, while she had been a pupil at Duncroft, he had visited and encouraged her to perform oral sex on him on several occasions. She accepted that, in the course of the interview, she was also asked about the Claimant. She spoke the words complained of, but said, in her witness statement that she did not know or intend that they would be broadcast. In her evidence she said that she had understood from Mr Williams-Thomas that he was building up a dossier on Freddie Starr and her comments on him were for that purpose. She agreed that she did not know what particular part of her interview was going to be included in the broadcast. She agreed that anything which she said to him in the course of the interview was 'broadcastable'.
In his evidence Mr Williams-Thomas confirmed that the focus of 'Exposure' was Jimmy Savile. The programme had been largely completed when he had interviewed the Defendant on 2nd October 2012 and she was told that this was so. However, they still wanted to gather supporting information regarding Savile. He was asked what authorisation the Defendant gave for the interview to be broadcast. He said that there would either have been a written authorisation or (which was more likely since this was an interview for a news, rather than a current affairs, programme) she would have signified her agreement on camera. In one way or another the Defendant had indicated that she was happy for him to use the material in any way he saw fit.
I accept Mr Williams-Thomas's evidence which is consistent with the Defendant's. It is also consistent with her evidence that there were several takes of the interview and that at various times he asked her to express herself more clearly (including in what she was saying about the Claimant). All of this is compatible with Mr Williams-Thomas wanting (and obtaining the Defendant's authorisation for) film which could potentially be broadcast.
The Defendant will not have known the precise circumstances in which her interview would be broadcast, but I accept that she was prepared to leave that to the discretion of ITV. She had made no secret of the fact that she was a school girl at the time of the incident with Freddie Starr and I accept that she impliedly authorised her interview to be accompanied by a statement to this effect.
It follows that I agree she was a co-publisher of the ITV broadcasts.
The meaning of the ITV broadcasts was that the Claimant had groped the Defendant when she was a schoolgirl and that he had thereby sexually assaulted her. It also meant that he had frightened and humiliated her.
Justification and the ITV words and ITV Broadcasts
In essence the meanings which I have said the ITV words and the ITV broadcasts bear are meanings which the Defendant has said are true. Thus she is relying on the common law defence to a claim in defamation (whether libel or slander) of 'justification'. This defence is abolished and replaced with a statutory defence of 'truth' by Defamation Act 2013 s.2, but that provision only came into force on 1st January 2014 and is not relevant to the claims which I am considering.
It is for the Defendant to establish that the meaning of the words she published was true. The parties were agreed that I must apply the ordinary civil burden of proof. Thus I must consider whether it is more likely than not that they are true. I bear in mind that the words, as I have found, imputed a criminal offence. That does not change the standard of proof. It does mean that I must look rather harder at the evidence to see whether that standard is satisfied since 'the more improbable an allegation the stronger must be the evidence that it did occur before, on the balance of probabilities, its occurrence will be established.' Chase v News Group Newspapers Ltd [2002] EWCA Civ 1772 at [35] per Brooke LJ. That said, the sexual assault which was imputed was not, as I have said, of the most serious kind.
The Defendant's evidence was that her allegations were true. She had been a pupil at Duncroft since she was 14. On 7th March 1974 she was 15. She was among a group of about 5 girls from the school that went to a recording of an episode of 'Clunk Click' which was a programme hosted by Jimmy Savile. She can be seen among a group of young people on the stage in footage of the programme. One of the guests on the show was Freddie Starr. He, too, can be seen in the footage.
The Defendant says that, after the show, she with the other Duncroft girls and some other people met with Savile. Freddie Starr joined them. She says that there came a point where he grabbed or squeezed her bottom. She says that this was something she commonly experienced at the time from men, despite her age. In her evidence she said that she recognised it as the first stage in what was called a 'goose'. The next stage of a goose was that the man would grab or touch the woman or girl's breasts. That, too, had often happened to her. On this occasion, though, she was repelled by Freddie Starr's smell. It was a male smell, a mixture of stale sweat, halitosis and stale cologne. The smell strongly reminded her of her step-father who had sexually assaulted her since the age of 4. She recoiled and made a fuss. Freddie Starr then said 'I wouldn't touch you anyway. You're a titless wonder.' She says she was frightened. She was also humiliated. Her breasts were small. She was self-conscious of them. To have attention drawn to them in this manner was deeply hurtful.
The Claimant said that nothing of this kind took place. He had not touched the Defendant. He had said nothing of the kind which she attributes to him. As I have mentioned previously, when first asked about the occasion in 2012, he denied that he had ever appeared on television with Jimmy Savile. He agreed that that was a mistake. He had been in business for 55 years and had done about 3,000 – 4,000 television shows in the course of his career. In the interview which he gave on camera for 'This Morning' on 10th October 2012, he said that he had shot straight off with his manager after the show. He added, 'We never stayed behind'. In his evidence he said that he and his manager, stayed behind for 10 minutes in the Green Room. When he was asked about what he had said on 'This Morning' he responded, 'That night we did go straight off, after we finished a coffee or something.' A little later in his evidence he said that his wife had also been with him (this was his second wife, Sandy). His witness statement had made no mention of his wife being present. He explained, that this was because he had been trying to get her to come to court but her present husband would not let her come. After hearing Mr Starr give evidence, my conclusion is that he has very little, if any, recollection of that night at all.
The Claimant's case is that the Defendant is mistaken. Either these things never occurred or they were done by someone completely different. In a Part 18 Request of his Particulars of Claim he was asked whether it was alleged that the Defendant knew her allegations were false. He replied,
'The Claimant does not need to and does not make any allegation about whether the Defendant knew that her allegations were false.'
In her Amended Defence the Defendant has relied on qualified privilege. In his Re-Amended Reply, the Claimant has not pleaded that the Defendant was malicious. While malice may be demonstrated in a number of ways, a classic form is where the Defendant knew that what was said was untrue. That, as I say, was not pleaded by the Claimant. There is little scope for a plea of malice in response to a defence based on Reynolds privilege. The Amended Defence does rely on Reynolds, but it does also plead qualified privilege of the duty/interest kind. To this malice would be an answer since the privilege is only qualified. Because of this state of the pleadings, I agreed with Mr Price that it was not now open to the Mr Dunham to cross examine the Defendant on the basis that she had made her allegations about the Claimant knowing them to be untrue or that she had deliberately manufactured a false account. He did not do so.
He did put to the Defendant that she was mistaken. She accepted that these events had taken place over 40 years ago, but she said that the insult about her breasts and what led up to it had been particularly hurtful and had stayed with her. She agreed that she had been prescribed Lithium at the time and her memory of some of the surrounding circumstances was hazy, but she said, of the core elements – the grabbing of her bottom, the expression 'titless wonder' and the fact that it was Freddie Starr who had done these things she was certain. She agreed that she could not be certain if the smell which came from the Claimant included alcohol (the Claimant does not and did not drink alcohol), but she was sure that the odour had reminded her of her step-father. She denied that she had changed her story from saying that the Claimant had attempted to molest her to saying that he had succeeded in grabbing her bottom. She said he had succeeded in touching her bottom. He had attempted to go further with the 'goose' but he had not been able to do so because of her protests.
Susan Bunce gave evidence for the Claimant. As I have said, she was another of the Duncroft girls who attended the recording of 'Clunk Click' on 7th March 1974. She, too, was 15 at the time. She recalls that, after the show, they were taken to a room behind the theatre. There were 15-20 people present. She remembers that the Defendant was wearing rather old-fashioned clothes which led to her being teased by the other girls. At one point, while the Claimant was in the room, one of them said aloud to him, 'she [i.e. the Defendant] wants to know if she is attractive and if you would fancy her.' The Claimant went towards her in a playful manner and inspected her as if he was an army parade sergeant. Ms Bunce says the Claimant did not touch the Defendant and was not even within touching distance, but suddenly the Defendant jumped back as if a wasp had flown in her face and waved her hands in front of her. There was no obvious cause for this behaviour. The Claimant did not insult the Defendant. I will need to return to this and other aspects of Ms Bunce's evidence later.
Witness C gave evidence that when she was 15 and also a pupil at Duncroft she went to the BBC. There was only one occasion when she made such a trip. A Jimmy Savile programme was filmed. Afterwards they went to a room and Freddie Starr came in. She asked him for something to remind them of the trip. He said that she could have a lock of his hair. He then put his hand down the front of his trousers and said, 'you can have a lock of my pubic hair.' Jimmy Savile was there and he laughed.
In his evidence the Claimant denied doing any such thing as Witness C described. He said that he had been wearing tight trousers and a wide belt, as can be seen in the footage of the 'Clunk Click' recording, and it would have been physically impossible for him to do what Witness C alleged. However in her evidence, Ms Bunce had said that after the show when Freddie Starr came into the room, she asked him for a cigarette. He said she could help herself from a packet in his pocket. She recalls reaching into his trousers' pocket and the trousers were loose. I agree with Mr Price that the likely explanation is that the Claimant had changed after his appearance on the show. The Claimant said that it would be standard for him to be allocated a dressing room when he appeared on TV. Ms Bunce had no recollection of an incident of the kind which Witness C described and thought that Witness C had attended a different episode of 'Clunk Click', yet Freddie Starr appeared on only one BBC show with Jimmy Savile. The Defendant's evidence makes no mention of this incident either.
Witness C accepted that her memory of this visit was incomplete. She could not recall the name of the show or the celebrities who appeared on it or the month in which it had taken place. She was not sure if Freddie Starr had been on the show itself. However, she was sure that it had been Freddie Starr who offered her some of his pubic hair as a memento of the occasion.
Witness C had first been contacted by Liz MacKean on 16th November 2011 (and so two days after Ms MacKean interviewed the Defendant). As part of her investigation on Jimmy Savile, Ms MacKean tried to make contact with as many of the girls who had been at Duncroft as she could. She had succeeded in contacting 45-60 of them, mostly through the Friends Reunited website. When Witness C spoke to Ms MacKean she remembered Jimmy Savile coming to the school. She recalled as well that a number of girls had said that he had encouraged them to perform oral sex on him. She did not say this had happened to her. But she did mention the incident with pubic hair which had taken place in Jimmy Savile's presence and Savile had laughed. She did not name Freddie Starr but she said he was 'A certain person who is now in the celebrity Jungle.' Ms MacKean said that made it obvious that she was referring to the Claimant since he was on that show at the time that she was in contact with Witness C.
I said I would return to another aspect of Ms Bunce's evidence. Before the recording of the show, she said she bumped into Freddie Starr in the corridor and recognised him. He came and joined a group that was waiting for the show to start. There was a jocular atmosphere. Ms Bunce who says that she was particularly small was picked up by the Claimant and held in the air. One of the Duncroft girls then said 'why don't you kiss him?' Ms Bunce did. In her interview with the police subsequently on 9th May 2013, she said,
'"Well I'm up for it" he said …
So I kissed him. Still, he's still holding me, and, but instead of just like, erm, just a kiss, and he did actually, looking back, it could wrong, it did actually linger on rather, it was a bit of, er, you know, the tongues tangled up there, and it was an extended long kiss.'
Later in her interview she described it as,
'one of the more passionate kind of kisses that people would do in private.'
She said that the Claimant offered to give her a lift home after the show, but she declined.
The Claimant has no recollection of kissing Ms Bunce. He said the entire thing was fiction and lies. He says he did not offer her a lift because, after the show, he had to go elsewhere urgently.
Ms Bunce also recalled a conversation with the Claimant about her age. She had asked him to guess. He suggested 18. She said he was good at guessing and left him with the impression that she was older than her true age at the time of 15. In her police interview, she said that this conversation took place after her kiss with the Claimant. In her evidence she said it was before.
In the end I have to decide whether the Defendant's account is true on the balance of probabilities. I must do so, taking account of the oral evidence of these witnesses (which, necessarily, I have only summarised above), the documentary evidence that has been put before me and the submissions of Mr Price and Mr Dunham. In my judgment the Defendant's account is true.
i) It is, of course, a matter which took place a long time ago. But I find that the Claimant's remark to the Defendant, 'you're a titless wonder' was a striking one. It lodged in her memory. She was sensitive about her appearance (as are many teenage girls) and this remark in a crowded room which included some of the other girls at her school was understandably humiliating. I reject the submission by Mr Dunham that the Defendant had confused the Claimant with some other celebrity.
ii) I find as well that the Defendant's account of what led up to this remark by the Claimant is also more likely to be true than not, that is the Claimant touched or grabbed her bottom and she recoiled. The recoil, at least, was seen by Susan Bunce. Ms Bunce did not see what caused the Defendant to behave in this fashion. I have considered Mr Dunham's submission that it may have been the Claimant's smell which the Defendant associated with her step-father, but I have decided that it was more likely than not the smell, plus the sexual advance which grabbing of the Defendant's bottom was.
iii) The Defendant was being given Lithium at Duncroft at this time. She has accepted that this affected her memory. On peripheral matters her account has varied. Thus she said at some points that the Claimant's smell included a component of alcohol. She has accepted that she may have been wrong about that. In her BBC interview she said she was 14 at the time. We know that she was in fact 15. But in its core elements, her account has been consistent.
iv) In her BBC interview the Defendant had said 'I had a famous person who would try, he smelled awful, he smelled of sweat and alcohol and it made me heave just to be near him, so I certainly didn't want him to do anything to me'. Mr Dunham emphasised the word 'try' and suggested that the Defendant had later in her ITV interview sexed up what was previously described as an attempt to an actual grope. I reject this argument. In the first place, in the BBC interview she did not go on to explain what was 'tried'. In her evidence she said that the Claimant had tried to complete the 'goose', but got no further than grabbing her bottom. Secondly, the account which the Defendant gave in her FanStory words (and which was written in about 2008 so well before the BBC interview) was that the Claimant's hands 'wandered incessantly' and the meaning attributed to this in the Particulars of Claim was that the Claimant had groped and sexually assaulted her. Next, I do not accept that Mr Williams-Thomas encouraged the Defendant to elevate an 'attempt' to a 'grope' for the purpose of the ITV interview. I agree with his response that that would have been unprofessional. Mr Williams-Thomas, like Ms MacKean and Mr Jones, impressed me as a professional reporter and broadcaster. It would also be a curious thing to do in relation to a person who was not the focus of the programme he was making and where the difference between an attempted grope and an actual grope was not of the highest magnitude. I do not attach significance to the Defendant's omission to use the word 'goose' until she gave evidence. It is not a common idiom now and she would be right to consider that her audience (whether readers of FanStory, watchers of 'Newsnight' or viewers of the ITV interview) would be mystified if she used it.
v) As I have said, I find that in truth the Claimant has no recollection of what actually happened on this evening. He originally said that he could not remember being on a show with Jimmy Savile at all. I accept that the Claimant has appeared on several thousand TV shows and he could not be expected to remember each one, but his response when initially approached was to deny his appearance categorically – not to say he could not remember. He then said that he had left immediately after the show. In his evidence he said he may have stayed for a short time with him manager, Mr Cartwright. Later in his evidence he said that his wife remained as well with him and Mr Cartwright. There has been no evidence from either Mr Cartwright (whose absence in the USA would not have prevented him providing a witness statement) or the Claimant's wife at the time (who could have been witness summonsed if she was unwilling to attend voluntarily).
vi) In his evidence, Mr Starr accepted that he had a voracious sexual appetite in 1974. Slapping a girl's bottom is what people did in the 1970's, he said. It did not mean anything and was acceptable. He revelled in the reputation of being a 'cheeky bastard' as he put it in his autobiography. He agreed that he did make jokes about women's breasts. 'Every man does it, even my 15 year old son', he said in evidence. He was asked about a passage in his autobiography which recounted his first meeting with Sandy, whom he later married in the mid-1970s. The book recorded him as saying to this woman to whom he had not previously spoken and, when learning her name, 'Hello Sandy. Can I play with your fur purse?' He said in his evidence this was inaccurate. In fact he had asked if he could play with her fur clitoris.
vii) In his witness statement, the Claimant said 'my humour was and remains the opposite of humiliation.' That is difficult to reconcile with an extract which Mr Price played from one of the Claimant's shows in which he takes two women from the audience on to the stage: one beautiful; the other, not so. The audience is repeatedly invited to laugh at the latter. Mr Starr emphasised that this was an adult show to which children were not admitted. That may be and it may explain why the jokes could be sexually frank. But it also showed that the Claimant felt free to raise a laugh at another person's embarrassment about her body.
viii) The Claimant's response was to say that his behaviour towards young girls was different. He said he didn't like younger women. In his interview for 'This Morning' he had said 'I always kept away from girls because I knew it spelt trouble.' In his evidence he said the cut off point was 22 or 23. However, his behaviour on the very same occasion as the Defendant spoke about tells a different story. Susan Bunce was a small 15 year old. He picked her up, held her in the air and gave her a long passionate kiss. Later in the evening he offered to drive her home. There was, according to Ms Bunce, a conversation about her age in which she allowed the Claimant to believe that she was 18. In her evidence she said that this took place before the Claimant had kissed her. Even if this was the case, it would mean that the Claimant's cut off below which he avoided girls was lower than he was prepared to admit. However, I prefer the account which Ms Bunce gave in her more detailed interview with the police. In this she said the conversation about her age took place only after the incident in which she and the Claimant had kissed. I also accept the evidence of witness C. When she, also a 15 year old school girl, asked for a memento, he offered her a tuft of his pubic hair. I reject the claim that this was impossible because of the tightness of his trousers or the width of his belt. Ms Bunce had described him as wearing loose trousers when he invited her to look in his pocket for a packet of cigarettes. He had obviously changed from the trousers he had been wearing during the 'Clunk Click' show.
ix) The accounts of the Defendant, Witness C and Ms Bunce appear to be independent of each other. There is no evidence to the contrary. Indeed, Ms Bunce was called in the Claimant's support. Ms Bunce did not see what the Claimant did and said to Witness C. Witness C and the Defendant gave no evidence about what took place between Ms Bunce and the Claimant. I do not find this surprising. There were lots of people in the room. Each of these three remembered most clearly what happened to her. The accounts of Ms Bunce and Witness C however, provide support as to the Claimant's behaviour towards 15 year old girls that night. They contradict the Claimant's evidence that below 22 or 23 was the cut off for his interest in women. They support the Defendant's account that it included girls of 15.
The ITV words also meant that the Claimant had frightened the Defendant. She said in her evidence that it was his smell which frightened her because it resembled her step-father. In my judgment the ITV words made the same link. It may be that in this sense the words were not defamatory of the Claimant, but, to the extent that they were, I find they were true.
Other defences for the ITV words and ITV broadcasts
Justification is a complete defence to a claim for slander or libel. This means that it is not necessary for me to rule on the Defendant's alternative defence of Reynolds. A further reason not to do so is that the Reynolds defence has been abolished by Defamation Act 2013 s.4(6) and replaced with the statutory defence of publication on a matter of public interest. It is sufficient for me to record that Malik v Newspost Ltd [2007] EWHC 3063 (QB) would in my view have been a formidable obstacle to the Defendant succeeding in the Reynolds defence despite Mr Price's submissions to the contrary.
It is a disputed issue as to whether a defendant who fails on Reynolds can succeed on qualified privilege – see Hays plc v Hartley [2010] EWHC 1068 (QB) at [69] and Seaga v Harper [2009] AC 1, 15. Since I am not reaching a concluded view on the applicability of Reynolds it would not be right for me to consider the hypothetical applicability of a residual qualified privilege defence.
However, for the reasons which I have given the claims based on the ITV words and ITV broadcasts fail.
The eBook
In view of my conclusions in relation to justification above, I can be relatively brief in relation to this claim.
The words are not identical to the ITV words but the sting of the libel in the eBook is the same. Assuming that the reader would recognise the Claimant as 'F' (as to which see below), the essential allegation is that the Defendant when an under-age girl refused a sexual advance from the Claimant who then humiliated her by making the same remark as was alleged in the ITV words. I have found that the Defendant has proved these allegations to be true. I do not accept that the words meant that the Claimant assaulted underage girls in the plural. However, as it happens, I have also found that he did engage in a passionate kiss with another underage girl and did offer yet another underage girl a tuft of his pubic hair.
I accept that the eBook words also meant that the Claimant and Jimmy Savile had encouraged underage girls to drink alcohol. The Defendant has not shown this to be true. However, as Mr Dunham realistically accepted in the course of his closing submissions, this allegation was put in the shadows by the others. This is another way of saying that although the Defendant has not proved the truth of this particular matter, the Claimant's reputation was not materially affected because of the truth of the remaining charges. I find that the Defendant is thus able to rely on s.5 of the Defamation Act 1952.
There are, though, two interconnected matters which Mr Price raises which mean that the Defendant does not need to rely on the defence of justification to the eBook publication.
The first concerns identification of the Claimant. He is not named, but referred to as 'F', a popular comedian of time. The Claimant pleads that this refers to him because (a) he was a popular comedian in the time referred to, (b) his name begins with 'F', and (c) millions of people saw the ITV broadcasts and (after 22nd October 2012) BBC Panorama and, when they read the eBook, would make the link between the person to whom the Defendant referred.
There are a number of difficulties in the way of the Claimant making good this case:
i) The eBook does not say that the name of person concerned began with 'F', simply that was the code which the Defendant was going to use. But, even if I assume that some readers made the (correct) assumption that it did mean that the comedian's name began with F (a) and (b) alone give insufficient clue as to the identity of the person about whom she was speaking. The evidence of Ms MacKean, Mr Jones and Mr Williams-Thomas was that none of them knew who F was until the Defendant told them. Mr Dunham argued that a reader of the eBook could have consulted the internet and found that the Claimant was a popular comedian in the 1970's whose name began with F. However, there is no pleading or evidence to this effect. Nor do I know how many other comedians whose names began with F would have been thrown up. The size of that group would make a difference as to how realistic it would be for a reader to assume that 'F' was the Claimant.
ii) The Claimant relies as well on (c), but a reader of the eBook who was able to identify the Claimant as F because of the broadcasts would have learned that he vigorously denied the Defendant's allegations. Furthermore, Channel 4 News broadcast the item because of the Claimant's actions in applying unsuccessfully for an injunction and because of his denials in the media of the Defendant's allegations (which had not at that stage been published by her). Mr Dunham acknowledged the force of these points which had been made by Mr Price. He responded by saying that there would be some readers of the eBook who had not seen the broadcasts. However, that brings him back to the difficulty which I mentioned in (i) above.
iii) The numbers of those who read the eBook in this jurisdiction is uncertain. The Claimant pleaded that there was a significant number. This was not admitted and he called no evidence in support of the contention. In cross examination the Defendant said she had sold 100 copies of Part 1 of her book (an earlier part than the eBook which contained the words complained of). At least some of those were to the United States of America and there is no claim in respect of publications outside the jurisdiction. There was no cross examination and no other evidence in relation to sales of the eBook.
The related point is that a claim in defamation will be an abuse of process if it did not seek redress for a real and substantial tort because the publication within the jurisdiction was minimal or the damage to the Claimant's reputation by the publication was insignificant - see Jameel v Dow Jones Inc [2005] QB 946 (CA). That seems to me to describe the position in relation to the eBook, given (at most) the very small number of copies sold in the jurisdiction and that readers of them would only have identified the Claimant if they had seen the broadcasts for which I have held the Defendant is not liable, but which anyway would have included the Claimant's denials of the Defendant's allegations.
For all of these reasons the claim in relation to the eBook fails.
Summary of conclusions
The claim in slander based on the Defendant's interview to the BBC is time barred. I have refused to disapply the ordinary limitation period. Accordingly, the claim fails.
The claim in libel based on the broadcast of a clip from the BBC interview in 'Panorama' was only recognisably about the Claimant because the BBC also included footage of the Claimant. The Defendant did not authorise or intend the BBC to broadcast a section of her interview in conjunction with material which identified the Claimant as the 'famous person' about whom she spoke. Accordingly, she is not liable for this composite broadcast and this claim fails.
The interview which the Defendant gave to ITV did name the Claimant. He sues her for this in slander. He has accepted that he cannot establish any financial loss in consequence, but that in itself is not an obstacle to this claim since the Defendant's words imputed that he had committed a criminal offence (indecently assaulting a woman) and was likely to disparage him in his profession as a comedian and entertainer. However, she has proved that it was true that he groped her (an under-age school girl) and humiliated her by calling her a 'titless wonder'. His behaviour and smell also frightened her because it reminded her of her step-father who had sexually abused her as a child. Because her words were true, this claim fails.
A clip from the ITV interview was broadcast three times. The Defendant authorised its broadcasting and she is therefore to be treated as a co-publisher of those broadcasts. However because her words were true, this claim also fails.
The Claimant has sued the Defendant for publication of her memoir on FanStory only after 8th October 2012. He has not been able to prove that it was still available after this date. He accepts, therefore, that this claim fails.
The Claimant has also sued the Defendant for the publication of her eBook. The essential allegations were the same as she had made in the ITV interview. They were true. Her eBook also alleged that the Defendant (along with Jimmy Savile) had encouraged her to drink alcohol, although she was underage. This was not true, but in view of my finding that she has proved the more serious allegations, this matter did not seriously injure the reputation of the Claimant. In consequence, she can successfully defend the claim against her in relation to the eBook. In any event, no evidence was called as to the readership of the eBook which, at most, was very small. The eBook did not name the Claimant but referred only to 'F', a popular comedian. On their own, there is not the evidence that these matters would have been sufficient to identify the Claimant as 'F' to a significant number of readers. Those who saw the ITV broadcasts might have been able to join the dots, but if they saw the broadcasts they would, inevitably, have also seen the Claimant's denials of the allegations. Putting all of this together, the claim in relation to publication of the eBook does not represent a real and substantial tort. For this reason as well, the claim in relation to the eBook fails.
I have found that all of the Claimant's claims fail. It follows that judgment must be entered for the Defendant.
Note 1 At one point in his closing submissions, Mr Dunham suggested that words spoken which were recorded on film could, alternatively, be treated as a libel, but on reflection he accepted that they were pleaded as slander and he did not apply to amend to plead them as libel in the alternative. [Back]
Note 2 As with the BBC words, Mr Dunham accepted that the claim for the ITV words was pleaded in slander and he did not apply to amend to plead libel in the alternative. [Back]
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Mrs Justice Patterson:
Introduction
This is an application for committal of Sophie Louise Oakley (otherwise known as Gaskin) for contempt of court by reason of breaches of an injunction granted on 17 December 2014 by Mark Ockelton QC sitting as a Deputy High Court Judge. The order was granted after an oral hearing under section 187B of the Town and Country Planning Act 1990 in relation to unauthorised use of land known as The Birches, Glassfield Road, Bardwell, Suffolk IP31 2DS ("the Land").
Planning permission had been granted on 13 June 2013 for the Land after an appeal by the defendant against the refusal of planning permission by the claimant for the use of the Land for the stationing of caravans for residential purposes for one gypsy pitch and a three loose box stable block together with the formation of additional hard standing and a utility/day room ancillary to that use.
In the decision letter which allowed the appeal the inspector described the character and appearance of the area as follows:
"8. According to the Suffolk Landscape Character Assessment (2008) the appeal site and surrounding area fall within an area of Ancient Plateau Claylands. Key features include a flat or gently undulating arable landscape and substantial open areas…"
She continued:
"9. Although there is some vegetation around the perimeter of the larger field within which the pitch would sit, the appeal site is openly visible from Glassfield Road. In addition, I agree with the Council that the gently rolling landscape allows longer distance views towards the site, particularly from the eastern edge of Bardwell and along Stanton Road to the north. Whilst the stables and utility/dayroom would be similar in appearance to other agricultural buildings in the vicinity, it seems to me that the residential character of the use would be evident from the presence of caravans and vehicles on site and, at night in an unlit landscape, from any external lighting arrangements. In addition, the siting of the pitch – on open ground, towards the centre of the field and physically separate from other instances of built development – would be at odd with the larger scale and open character of the wider landscape. In the short term therefore, the proposal would have a significant adverse effect on the character and appearance of the surrounding countryside.
…
12. With that in mind, the proposal would fail to satisfy Core Strategy policy CS6(e) and Local Plan policy H8(c). It would also conflict with Core Strategy policy CS3, to the extent that this policy also seeks to protect the landscape. Furthermore, whilst this landscape is not normally designated as being of value, the Landscape Character Assessment has identified certain elements which contribute to its character, including openness and historic field pattern. Since the proposal would cause some harm to the field pattern even in the longer term, it would also run counter to one of the core planning principles in the NPPF which expects, among other things, that planning should recognise the intrinsic character of the countryside."
The inspector then considered the need and supply of gypsy pitches. On that, she recorded that the claimant had acknowledged that a need had been established for gypsy pitches so that the proposal accorded with Local Plan policy H8(a). Other factors which she considered to be in favour of the proposal were the lack of available alternative sites and the failure of policy. Her final conclusions were set out in [39]:
"The proposal would have some adverse effect on the character and appearance of the countryside, bringing it into conflict with those aspects of Core Strategy policies CS6 and Local Plan policy H8 which seek to prevent harm to the countryside. However, it is not in conflict with other aspects of those policies concerned with location and access and it would accord with policy H8 in respect of meeting an established need. On balance therefore, I consider that the proposal is in accordance with the development plan as a whole. In addition, whilst there would also be some conflict with national policy owing to its effect on the countryside, there would be significant benefits associated with meeting need in circumstances where no alternative sites have been shown to be available and where there are strong grounds to question whether existing need and future supply will be adequately addressed through the local plan process. All of these matters carry significant weight and, on balance, I consider that they outweigh the harm identified."
The planning permission granted was conditional. Condition 9 related to the siting of the caravans and reads:
"No caravan shall be brought onto the site until details of its intended siting have been submitted to and approved by the local planning authority in writing. The caravans shall only be positioned in the approved locations, unless otherwise agreed in writing by the local planning authority."
A plan was duly submitted and the location for the caravans was approved by the claimant.
On a site inspection on 27 November 2014 seven caravans were observed at the property together with about twelve vehicles consisting of cars, vans, motor homes and horseboxes. It appeared to the enforcement investigator that the land was being occupied by four families in addition to the family occupying the permitted pitch. Hard standing and an approach path had been constructed on one of the extra plots without planning permission. The stable block referred to in the planning permission appeared to have been constructed as a single large room and the day room referred to in the permission formed a large kitchen adjoining the stable block. Again, that was unauthorised.
That was the background to the claimant commencing injunction proceedings which resulted in the court order of 17 December 2014. The order granted by Mr Ockelton QC is attached as Annex A to this judgment.
On 12 January 2015 a planning application was submitted by the defendant which sought to regularise the position on the site. That was refused on 17 March 2015. That refusal has not been appealed. The claimant notified the defendant that, if the planning application was refused, the terms of the order would need to be fully complied with.
Unauthorised Development
On 14 May 2015 a Planning Enforcement Officer, Adam Ford, visited the site and observed multiple breaches of the order as follows:
i) The stationing of a touring caravan in an unauthorised location;
ii) Use for residential purposes of the touring caravan;
iii) Use of the stable block for residential purposes;
iv) Use of the land for stationing, parking or storage of vehicles comprising a metal trailer, a silver Peugeot car and two white vans;
v) Use and/or permitting others to use the land for the unauthorised storage of residential paraphernalia comprising a washing line, lawn mower and trampoline;
vi) Use or permitting others to use the land for the unauthorised storage of a dog kennel;
vii) Allowing an unauthorised shed to be erected without planning permission and/or used for the storage of residential paraphernalia.
The same use of land in breach of the order had been observed on 30 April.
Evidence
The claimant filed witness statements before the hearing and called Adam Ford to give oral evidence. He confirmed his observations on the two occasions relied upon, as set out above.
The defendant gave oral evidence to the court. But during the course of that she accepted all of the allegations of contempt and apologised to the court for her mistakes. She admitted that she had done wrong and said that she was doing her hardest to sort the area out. She had not made any application to vary the injunction and had only instructed her solicitor again on the Monday of the week of the injunction hearing. She did not disagree with the factual findings of Mr Ford (set out above).
Conclusions
At the end of the evidence it was apparent that the differences between the parties were slender. The claimant accepted that in the light of the evidence of the defendant and her apology given to the court, despite the harm to amenity as a result of the breaches of planning control and the unwillingness on the part of the defendant to heed explicit warnings about those breaches before the institution of committal proceedings, that the correct course for sentencing, although at the higher end of the sentencing spectrum would be a suspended custodial sentence.
The defendant, in closing submissions on her behalf, accepted that there had been a breach in all counts. She was a lady with a young dependant child (seven months old). She was prepared to give undertakings and accepted that a suspended sentence of imprisonment was the most appropriate sentencing course.
On that basis I indicated that I would not impose a sentence of immediate imprisonment upon the defendant and asked the parties to see if they could draw up an agreed order with undertakings. If it was not possible to agree the full terms then I would determine what the order should be where there was a dispute between the two sides.
I have done that in the undertakings and order which accompany this short judgment. Such amendments as have been made are to reflect the extant planning permission granted on 13 June 2013 and the wording of the order of the court made on 17 December 2014.
In the circumstances that I have set out I have to conclude that the order of the court was flouted by the defendant. Her persistent failure to comply with its requirements aggravates the gravity of her conduct. There has been no prompt and full compliance and, until the court hearing, there was no acknowledgment of fault or apology for her conduct.
I take into account that the defendant has taken steps, albeit belatedly, and has financial pressures that may have impeded her compliance with the order. But I have to take into account the fact that court orders have to be respected and the authority of the court would be undermined if the defendant were permitted to breach a court order indefinitely.
I take into account also the fact that there are two elements of a committal sentence, namely a punitive element and a coercive element. I conclude that both parties were realistic in their submissions that a sentence of imprisonment is inevitable as a result of the breaches which have occurred here. The hardcore remained on site as did the wrongly positioned touring caravan when proceedings were brought. In the circumstances, in my judgment, the appropriate sentence is one of four months imprisonment but, as I indicated at the court hearing, that will be suspended provided the defendant adheres to the timings set out in the undertakings which the court accepts and the order that the court makes.
In what I hope is the unlikely event that the agreed timescales and order is not complied with so that there is a further application to the court, the defendant needs to be aware that any future judge considering the position may well be less sympathetic. As Mummery LJ said in Mid Bedfordshire District Council v Brown [2004] EWCA Civ 1709:
"26. The practical effect of suspending the injunction has been to allow the defendants to change the use of the land and to retain the benefit of occupation of the land with caravans for residential purposes. This was in defiance of a court order properly served on them and correctly explained to them. In those circumstances there is a real risk that the suspension of the injunction would be perceived as condoning the breach. This would send out the wrong signal, both to others tempted to do the same and to law-abiding members of the public. The message would be that the court is prepared to tolerate contempt of its orders and to permit those who break them to profit from their contempt.
27. The effect of that message would be to diminish respect for court orders, to undermine the authority of the court and to subvert the rule of law. In our judgment, those overarching public interest considerations far outweigh the factors which favour a suspension of the injunction so as to allow the defendants to keep their caravans on the land and to continue to reside there in breach of planning control."
The defendant should be in no doubt, therefore, as to the possible sanction on the part of the court should the order and undertakings not be complied with.
I should record that after the court hearing the site was further inspected by Mr Ford who has sworn a further Affidavit on the 1st July of what he observed on the Land which indicated that breaches were continuing. Those will need to be remedied in accordance with the Court Order.
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Mrs Justice Andrews:
The Claimant, Professor Stevens, is a highly distinguished clinical academic. In 2004 he was appointed to the Chair of Medicine (Diabetes and Metabolism) at Birmingham University. His contract of employment as one of the University's 241 clinical academic staff is expressly dependent upon his having and retaining an honorary appointment contract with the Heart of England NHS Foundation Trust ("HEFT") under which he undertakes clinical duties as a consultant. 120 other clinical academic staff are employed at consultant level by the University, out of a total of 6320 academic staff. Professor Stevens receives no remuneration from HEFT under his contract with them, but HEFT provides the University with the funds from which to pay his salary.
Professor Stevens has a job plan which sets out his main academic duties and responsibilities and his main clinical duties and responsibilities, and gives an indicative split of his time between them, which is stated to be "flexible". One of his listed academic duties and responsibilities is to "lead and co-ordinate a programme of research into the aetiology and management of diabetic neuropathy, foot complications and heart disease complicating diabetes." His listed clinical duties include leading the multidisciplinary diabetic foot service and multidisciplinary diabetic neuropathy service across HEFT.
As part of his research activities, Professor Stevens has been the Chief Investigator ("CI") responsible for the scientific and overall conduct of five randomised controlled clinical trials of investigational medical products ("the trials"). All the patients taking part in the trials were already receiving NHS treatment at Heartlands Hospital. Such trials are experiments undertaken to compare alternative interventions on patients with a defined medical condition – in this case, diabetes. They involve screening for suitable patients, confirming their eligibility, randomly allocating them to one or other intervention, following them through a defined timeframe, and assessing and comparing their outcomes. Since the allocation of a drug to a particular patient is made on a random basis, any observed differences in outcomes can be confidently attributed to the difference in interventions, rather than to pre-existing differences between the groups. For this reason, trials of this type are regarded as the "gold standard" method of evaluating the impact of interventions on patient health.
Professor Stevens has given a description of each of the five trials in paragraphs 23-34 of his first witness statement, which it is unnecessary for me to reproduce in this judgment. The University does not accept that his description is comprehensive or entirely accurate, but it agrees that it conveys a sufficient impression of the background facts for present purposes. All but one of the trials are jointly sponsored by HEFT and the University; the remaining trial is sponsored by the University alone. It is the sponsor's responsibility to be satisfied that the study meets the standards set out in the regulations and that arrangements are put in place and maintained throughout for management, monitoring and reporting on the trial. Where there are co-sponsors, they may agree to divide certain defined sponsor responsibilities between them, and that is what HEFT and the University did.
The roles of the University and HEFT differed in relation to each of the trials. For example, in respect of two of the five trials, HEFT was responsible for provision of the CI, for the study protocol, and for ensuring compliance with Good Clinical Practice ("GCP"); in the third trial those responsibilities all fell to the University. The evidence before me in respect of the remaining two trials is unclear as to where those responsibilities lay. In all of the trials the University was responsible for the registration and administration of the study. The University was generally responsible for pharmacovigilence (the process of monitoring the safety of all medicinal products used as part of a clinical trial), while HEFT was generally responsible for provision of a pharmacy service for, and the sourcing and supply of, the study drugs.
The Medicines and Healthcare Products Regulatory Agency ("MHRA"), an executive agency of the Department of Health, is responsible for ensuring that clinical trials are carried out in accordance with accepted standards, and for safeguarding patient interests. The MHRA is entitled to carry out inspections, including visits to the premises at which a trial is being carried out, and reviews of documentation, including records held at the site of the trial or at the sponsor's premises.
In December 2013 concerns that there had been breaches of GCP were initially raised by Professor Stevens himself and drawn to HEFT's and the University's attention in the course of preparing for an MHRA inspection of HEFT as sponsor involving a review of Trial E (one of the trials in which HEFT was responsible for ensuring compliance with GCP). This prompted the University to offer support and advice. Professor Stevens liaised with Ms Wilma van Riel, an employee of the University from the College of Medical and Dental Sciences, in preparation for the inspection, and with a view to addressing the problems that had been identified and ensuring that they did not recur.
Following the MHRA inspection of trial E and two of the other trials, Trials P and V, in which various breaches of GCP were found and reported, the University suspended Professor Stevens from any duties associated with research with effect from 20 December 2013, whilst it carried out an internal disciplinary investigation into allegations of misconduct. At that stage, the suspension was partial and Professor Stevens was still able to engage in clinical activities and to carry out his teaching responsibilities.
At around the same time, the Pro-Vice Chancellor of the University and Head of the College of Medical and Dental Sciences, Professor Jenkinson, commissioned an internal "Management Review" by a Professor Deeks (a Professor of Bio-Statistics) in respect of the research activities of the team working under Professor Stevens in all five trials, in order to determine whether there appeared to be prima facie evidence of any breach of the University's Code of Practice for Research ("the Code") sufficient to warrant any disciplinary action against them, or what was mischaracterised in Professor Deeks' report as an "extension of the existing disciplinary action" against Professor Stevens. There is, as yet, no such disciplinary action. The whole purpose of a disciplinary investigation is to determine whether or not any disciplinary action should be taken, and if so, at what level.
In February 2014, an email was sent to the General Medical Council ("GMC") by Professor David Adams which, on its face, purported to be from both the University and HEFT, informing the GMC that they had each decided to suspend Professor Stevens from his research activities and that the matters were currently the subject of internal investigation by both the University and HEFT. In fact, it is the University that has been responsible for any investigation from a disciplinary perspective.
Professor Deeks' report, completed in June 2014, did lead to further allegations of misconduct being added to those that had already been made against Professor Stevens, in consequence of which he was suspended from all his duties at the University on 11 July 2014.
There are 28 separate alleged breaches of the Code listed in total under the five trials. Professor Deeks has very fairly stated in the introduction to his report that unlike trials E, P and V, where there have been MHRA inspections, the judgments for trials R and T are those of only one assessor, and should be treated with a greater degree of caution until others have confirmed the assessments. At the time when these proceedings commenced, Professor Stevens had not seen copies of the MHRA reports, and therefore he did not know what they said about the conduct of the three trials to which they related.
For present purposes it is unnecessary to go into any detail about the nature of the allegations of misconduct, but they largely relate to an alleged lack of oversight of the team, inappropriate delegation, a failure to keep proper records or samples of tests, and other matters pertaining to the way in which the trials were conducted or documented. I have seen no allegations that patients were put at risk or inappropriately treated, though one allegation is that Professor Stevens "failed to ensure that medication was prescribed following proper checks and assessments by health professionals and in accordance with HEFT policies for prescribing".
The University had no choice but to take these matters seriously. As Mrs Carolyn Pike, the University's Director of Legal Services, explains in her witness statement, findings (and consequential reports to the MHRA) of widespread serious breaches of the Code could have significant ramifications for the University, including restrictions being placed on existing clinical trials, and current (or even historic) research being declared invalid or unreliable. No-one has suggested that the situation did not warrant formal investigation. However, because the investigation is potentially the precursor to disciplinary action, and that action could lead to sanctions including dismissal, not to mention the possibility of a GMC investigation which might lead to the loss of Professor Stevens' registration, it is vitally important that it be carried out fairly.
In a letter to Professor Stevens dated 16 February 2014 from a Ms Jane Capewell, an external HR consultant not employed by the University, he was informed that Professor Derek Alderson would be undertaking the role of Investigating Officer, supported by Ms Wilma van Riel, QA Manager, on behalf of the College of Medical and Dental Sciences, and by Ms Capewell herself. The letter informed Professor Stevens that the investigator wished to hold an "investigation meeting" with him as soon as possible, and that its purposes would be to provide him with further information with regard to the allegations of misconduct against him and "to give you an opportunity to make a statement which will form part of the evidence to be submitted to a disciplinary panel, should it be found that there is a case to answer". The letter emphasised that the meeting was not a disciplinary hearing, but asked Professor Stevens not to discuss the allegations with any potential witnesses whilst the investigation was ongoing.
Subsequent queries raised by Professor Stevens as to the role to be played in the investigation by Ms van Riel (who is a potential witness because she had been involved in assisting Professor Stevens in dealing with the breaches of good practice that he had reported prior to and during the first MHRA inspection) led to Ms Capewell describing her as a "technical adviser" to Professor Alderson on the basis that this is "a complex technical matter". Ms Capewell said that in that capacity Professor Alderson may invite Ms van Riel to attend some or all of the investigation meetings as he believes necessary and appropriate.
The letter also told Professor Stevens that if he wished, he could be accompanied at the investigation meeting by a trade union representative or an employee of the University. Professor Stevens is not a member of a trade union, but he is a member of the Medical Protection Society ("MPS"), a leading medical defence organization. Membership of such an organization is no longer a compulsory requirement of his contract with HEFT, but Clause 3 of that contract expressly advises him to maintain medical defence membership.
Even if Professor Stevens had been a member of the British Medical Association ("BMA"), which is the doctors' trade union, they would not have sent anyone to accompany him to the meeting if he had requested them to. The reason for this is that there is an informal arrangement or understanding between the BMA and the MPS that if the doctor concerned is a member of both organizations, the MPS assists with professional conduct issues such as these. The same arrangement naturally applies if the doctor concerned belongs to the MPS but not the BMA, as is the case with Professor Stevens.
The reason for these proceedings is that Professor Stevens wishes to be accompanied to the investigation meeting by Dr Roger Palmer, an MPS representative who has been supporting him ever since the initial allegations were made in December 2013. Dr Palmer was previously employed as a Fellow of the Medical Research Council, and has considerable familiarity with clinical trials. He has an LLM degree in Medical Law and Ethics, but no professional legal qualification. Professor Stevens' position is that Dr Palmer is equivalent to, and would be fulfilling the same role as, a trade union representative. The University has refused to allow Dr Palmer to be present. Its position is that Professor Stevens is only allowed to bring along another member of staff or a union representative, and Dr Palmer is neither. The University is unwilling to move from that stance.
Professor Stevens has explained in his evidence that he has no friends who are employees of the University who would be suitable to accompany him to the meeting. His clinical responsibilities mean that he spends a lot of time away from the University campus, and he has no regular contact or meetings with University employees other than members of his own laboratory. He plainly could not bring with him any member of staff who was involved in the trials that are the subject of the investigations and might be called as a witness. He says that if he is unable to bring Dr Palmer with him, he will be compelled to attend the meeting unaccompanied, and that this would be unfair.
On the face of it, Professor Stevens' request to be accompanied by Dr Palmer appears perfectly reasonable, and the University's intransigence on the subject seems extraordinary. However, Mr Sutton QC, who appeared on behalf of the University, explained that there is a concern that what the University contends would be a departure from the terms of the contract of employment between itself and Professor Stevens, and in particular a departure from the "Disciplinary Procedure" in the Ordinances agreed back in 2008 between the University and its approved Union, the UCU (formerly the AUT) after four years of hard negotiations, would open the floodgates to similar requests. Put simply, the University does not want to create a precedent.
It is in these unhappy circumstances that I have to decide whether Professor Stevens does or does not have a contractual entitlement to be accompanied by Dr Palmer, and whether the University's refusal to accede to his request in these circumstances is a breach of the overriding contractual obligation of trust and confidence that governs the relationship between employer and employee.
THE OBLIGATION OF TRUST AND CONFIDENCE
It is by now well-established that a contract of employment is subject to an implied term (by operation of law) that an employer must not, without reasonable and proper cause, conduct itself in a manner likely to destroy or seriously damage the relationship of mutual trust and confidence between itself and the employee: see e.g. Malik and Mahmud v BCCI [1998] AC 20, Gogay v Hertfordshire County Council [2000] IRLR 703; Bristol City Council v Deadman [2007] IRLR 888; and, more recently, The Leeds Dental Team Ltd v Rose [2014] ICR 94, an egregious example of an employer's breach of the implied duty to maintain trust and confidence, in the way in which it handled a disciplinary process.
The implied obligation of trust and confidence was described by Lord Steyn in his dissenting speech in Johnson v Unisys Ltd [2003] 1 AC 518 at [24] as an "overarching obligation implied by law as an incident of the contract of employment." Although the remaining members of the House of Lords decided that the obligation did not extend to the exercise of a power of dismissal, they did not dispute its existence or disagree with Lord Steyn's formulation. At [36] Lord Hoffmann described the term of trust and confidence as "the most far reaching" of the terms that the common law implies in a contract of employment. He went on to say at [37] that although such an implied term could supplement the express terms of the contract, it could not contradict them. In Eastwood v Magnox Electric Plc [2005] 1 AC 503 Lord Nicholls said at [11] that the term means, in short, that an employer must treat his employees fairly.
A useful example of the practical operation of the implied term is United Bank v Akhtar [1989] IRLR 507. The case concerned a mobility clause which provided that "the bank may from time to time require an employee to be transferred temporarily or permanently to any place of business which the bank may have in the UK". The bank sought to rely on that clause to move Mr Akhtar from Leeds to Birmingham at less than a week's notice, and refused his request that the transfer be postponed for three months because of certain personal difficulties relating to his wife's health and the sale of his house. Mr Akhtar's further request to be allowed 24 days' leave to sort out his affairs before commencing work in Birmingham received no response. His claim for constructive dismissal was upheld.
Knox J, who delivered the judgment of the Employment Appeal Tribunal ("EAT") dismissing the bank's appeal, identified the key issue as "whether the bank was in repudiatory breach of contract as a matter of common law in the way in which it sought to exercise its powers under [the mobility clause]". At [37] he referred to the earlier judgment of Browne-Wilkinson J in Woods v WM Car Services (Peterborough) Ltd [1981] IRLR 347 in which he explained that:
to constitute a breach of this implied term, it is not necessary to show that the employer intended any repudiation of the contract: the Tribunal's function is to look at the employer's conduct as a whole and determine whether it is such that its effect, judged reasonably and sensibly, is that the employee cannot be expected to put up with it."
Knox J went on to say at [50] that it was
"inherent in what fell from Mr Justice Browne-Wilkinson that there may well be conduct which is either calculated or likely to destroy or seriously damage the relationship of confidence and trust between employer and employee, which a literal interpretation of the written words of the contract might appear to justify, and it is in this sense that we consider that in the field of employment law it is proper to imply an over-riding obligation in the terms used by Mr Justice Browne-Wilkinson, which is independent of, and in addition to, the literal interpretation of the actions which are permitted to the employer under the terms of the contract."
It is important not to confuse this implied term with a different implied term that arises as a matter of law specifically in the context of the exercise of a contractual discretion, for example, the discretion to award a bonus to the employee. It is an implied term that such a discretion will be exercised in good faith and not arbitrarily, capriciously or irrationally: see e.g. Horkulak v Cantor Fitzgerald International [2004] EWCA Civ 1287, [2005] ICR 402. In an earlier passage in United Bank v Akhtar the EAT decided the case on the basis of a breach of that implied term as well, see the judgment at [44] to [48].
The same principles come into play when the employer has agreed to consider a request by the employee that he should waive his strict contractual rights: Kulkarni v Milton Keynes Hospital NHS Foundation Trust and another [2009] EWCA Civ 789, [2010] ICR 101 per Smith LJ at [74].
THE RELEVANT CONTRACTUAL TERMS
The letter to Professor Stevens from the University offering him appointment to the Chair is dated 10th February 2004. It states that the appointment is held in accordance with the attached terms and conditions for clinical academic staff. The letter asked Professor Stevens to send a written confirmation of his acceptance of the appointment to a named individual. The attachments to the letter did not include the disciplinary procedures, but they included the Terms and Conditions (Academic) and the Terms and Conditions (Clinical). The Conditions of Employment governing Clinical Academic Teaching and Research Staff ("Clinical Academic Conditions") contain, at Clause C4, a provision that:
"All appointments and conditions of employment are subject to the Ordinances and Regulations of the University".
Clause C13 provides that clinical academic staff are also required to undertake clinical duties in accordance with an honorary appointment contract issued to them by an NHS Trust or Authority on the recommendation of the University. Their contract of employment as a member of the University's clinical academic staff is dependent upon their having and retaining such an honorary contract. Clause C14 provides that such clinical academic staff will agree their duties in an annual integrated job planning process conducted jointly with the University and the Trust. Clause C17 provides that they are required to participate in an annual appraisal process conducted jointly by the University and the Trust, which may contribute to periodic re-accreditation with the GMC (or GDC in the case of a dentist). Clause C18 states that members of clinical academic staff are required to comply with the University's current arrangements for research governance, as amended from time to time.
Clause C50 of the Clinical Academic Conditions deals with disciplinary matters. It provides as follows:
"Members of clinical academic staff are subject to the disciplinary procedure as amended from time to time. The current version is set out at [there is then a link to a website] or available from the Office of the Director of Human Resources. In respect of duties carried out under the honorary consultant contract, a member of staff of the University is subject to the disciplinary procedure referred to in the Trust's honorary contract. While the Trust's disciplinary procedure is being applied, at which the University will have observer status, a member of the University's staff may not have access to the University's grievance procedure in respect of the matter which is being dealt with under the Trust's disciplinary procedure. Rights of appeal against a disciplinary penalty applied by one organisation will be confined solely to the appeal procedure of the organisation which issued the disciplinary penalty in question, and individual employees may not appeal to the other organisation about that decision. Following a disciplinary hearing, and any appeal, in the Trust, the University will consider what action, if any, it should take in respect of the member of staff concerned."
As Mr Sutton candidly accepted, this is not a particularly fine example of draftsmanship. It is silent on many aspects of the inter-relationship between the two disciplinary processes to which a clinical academic may be subject. For example, there is no provision dealing with the status of any findings made in one set of disciplinary proceedings if the other employer subsequently invokes its own disciplinary process. There is nothing, on the face of it, to stop disciplinary proceedings being brought by employer B after the allegations have been fully investigated by employer A and found to be without substance.
As Mr Sutton pointed out, no disciplinary procedure is expressly referred to in the Honorary Consultancy Agreement between HEFT and Professor Stevens. On a literal interpretation, the third sentence of Clause C50 would have no practical effect. That cannot possibly be right – the paragraph must be given a workable interpretation to reflect the parties' objective intentions. By necessary implication, therefore, it must be interpreted as referring to the investigative and disciplinary procedure that would be applied by HEFT if it were to take such action against Professor Stevens under the honorary consultant contract.
In Chhabra v West London Mental Health NHS Trust [2014] ICR 194, at [1] Lord Hodge explained how, by the Directions on Disciplinary Procedures 2005 issued pursuant to powers under s.17 of the National Health Service Act 1977, the Secretary of State for Health directed all NHS bodies in England and Wales to implement the full version of a framework policy agreed between the BMA and the Department of Health in a document entitled "Maintaining High Professional Standards in the Modern NHS" ("MHPS"). Mrs Pike's evidence is that the Directions do not apply to NHS Foundation Trusts and that it is her understanding that MHPS only has the status of "advice" for an entity such as HEFT.
In answer to that, Professor Stevens has exhibited to his second witness statement HEFT's published disciplinary procedure from November 2011, and a further version approved in September 2014. Confusingly, the HEFT document is also entitled "Maintaining High Professional Standards". It expressly provides that where there is a conflict or lack of clarity, the national guidance in MHPS will take precedence over HEFT's procedure.
Paragraph C50 of the Clinical Academic Conditions appears to envisage (without necessarily mandating it) that HEFT would take the lead in any investigation of, or disciplinary action in respect of, any matters falling within the ambit of the honorary consultancy. That would certainly encompass, but is not necessarily limited to, matters of a purely clinical nature. Although not referred to in the Paragraph itself, it might reasonably be assumed that, at the other end of the spectrum, matters of a purely academic nature (for example, an alleged lack of proper supervision of a PhD candidate, or a persistent failure to turn up for lectures) would be dealt with by the University under its disciplinary procedures. The problem in the present case is that in his role as CI of these clinical trials, Professor Stevens was acting in a dual capacity, and his behaviour was governed by both contracts.
Mr Sutton contended that it was consistent with Paragraph C50 and the demarcation of clinical and academic responsibilities in Professor Stevens' job plan that the University should take the lead in disciplinary investigations pertaining to research projects even if they involve clinical trials taking place at a hospital for which HEFT is responsible. I do not accept that Paragraph C50 draws a clear demarcation line between those matters in which HEFT is to take the lead in disciplinary matters and those in which the University is to do so. However, I agree with Mr Sutton that there was nothing to preclude the University from instituting the disciplinary investigation and taking the lead in this particular case.
The relevant Ordinance setting out the University disciplinary procedure referred to in Clause C50 ("the Ordinance") provides, by Clause 3.21.3, that:
"the procedures set out in this Ordinance apply to a member of clinical Academic Staff… on the same basis as to any member of Staff, apart from a circumstance in which the honorary clinical contract has been withdrawn…. Disciplinary action may be taken under this Ordinance against a member of clinical Academic Staff in respect of misconduct or unsatisfactory or inadequate performance arising in connection with that member of Staff's clinical work as if the work or activities were performed in or for the University."
Theoretically, at least, this raises the spectre of double jeopardy for someone who has been cleared of professional misconduct by the relevant NHS Trust, as indeed does Clause C50 itself. However, as Mr Sutton pointed out, the University needs to have the power to discipline, and if need be terminate the employment of someone who has been found guilty of serious professional misconduct by another professional body, if the circumstances would justify taking such steps. This is one area in which the overarching duty of trust and confidence might come into play in an appropriate case, so as to preclude an employer from acting oppressively.
The relevant investigation into Professor Stevens' involvement in the trials is apparently being carried out under Part V of the Ordinance which is entitled "Procedure for Dealing with Serious Issues". This provides, in paragraph 3.21.34, that unless the Vice Chancellor (or in his or her absence the Vice-Principal) determines that, on the basis of the allegation itself, the allegation should be dismissed as being trivial or without substance or should be dealt with under the Disciplinary Warning Procedure under Part III, the Vice Chancellor or Vice-Principal shall nominate a person to conduct "such investigations as may be considered appropriate" and to prepare a report of that investigation.
In this case, the nominated investigator is Professor Alderson. There is no suggestion that he is an inappropriate person to conduct the investigation. Unlike the procedure under Part III, there is no mention under Part V of the involvement of, or of any support being given to the nominated investigator by anyone from Human Resources (internal or external), let alone for "technical advice" to be given by a member of University staff. Nevertheless the powers of the investigator are couched in wide terms, and there is nothing that expressly prohibits him from having such assistance.
Unlike Part III, the purpose of the investigation is not expressly referred to. However it is to be inferred that the purpose is to enable the Vice Chancellor or Vice-Principal, on receipt of the investigation report, to make a properly informed decision as to which of the various courses of action listed under paragraph 3.21.36 should be taken.
The key paragraph is 3.21.35 which provides as follows:
"Before any investigation referred to in paragraph 34 above the member of Staff shall be given in writing full information about the allegation to enable him/her to respond. S/he shall have the right to nominate individuals to be interviewed as part of the investigation, and the right to submit any documents which may be relevant for the consideration of the person specified in paragraph 34 above. At any meeting with the member of Staff during the course of the investigation, s/he shall have the right to be accompanied by a member of Staff or a trade union representative of his or her choice. The member of Staff shall be kept informed of progress of the investigation and, in writing, of its outcome."
Paragraph 3.21.36 makes it clear that the decision about what, if any action to take in response to the report of the investigation lies with the Vice Chancellor or Vice-Principal rather than with the investigator. If, in consequence of a report following such investigation, the Vice Chancellor or Vice-Principal determines that the allegation should be dealt with by a Disciplinary Panel, there are detailed provisions about the composition of the Panel and how the hearing is to be conducted. For example, under paragraph 3.21.37, if the member of Staff is a clinical academic, then a representative of an NHS or other relevant body may be appointed to the Panel, which can then consist of more than 3 but no more than 5 members. This demonstrates that the position of clinical academics was not overlooked when the Ordinance was agreed.
Paragraph 3.21.40 provides that the member of Staff may be represented at the Panel Hearing by another person, who may be legally qualified, and accompanied by a friend who shall be a member of staff and who shall take no part in the proceedings. Paragraph 3.21.40(b) entitles the representative to speak on the member of staff's behalf, but precludes the representative from answering questions relating to the issues in dispute on behalf of the member of staff, unless the person chairing the Panel permits him to. This partly reflects the statutory minimum requirements for disciplinary hearings under s.10 of the Employment Relations Act 1999, but enhances them in two respects, by permitting the additional silent companion, and by giving the employee a free choice of representative, including a barrister or solicitor or a member of a professional defence association such as the MPS.
Under the disciplinary procedures in HEFT's policy documents, Professor Stevens would have been entitled to be accompanied by Professor Palmer to any equivalent interview (as well as to any subsequent disciplinary hearing). Paragraph 4.15 of the policy states that where there is such an investigation "the practitioner must also be afforded the opportunity to put their view of events to the case investigator and given the opportunity to be accompanied."
Paragraph 4.16 provides:
"At any stage of this process – or subsequent disciplinary action – the practitioner may be accompanied in any interview or hearing by a companion. In addition to statutory rights under the Employment Act 1999, [sic] the companion may be another employee of the NHS body, an official or representative of the British Medical Association, other recognised trade union … or a defence organisation, or a friend, partner or spouse. The companion may be legally qualified but he or she will not be acting in a legal capacity."
The proviso in the last sentence has been held by the Court of Appeal to be "devoid of meaning" as regards disciplinary hearings, because once a lawyer has been admitted as a representative, they would be entitled to use all their professional skills in the practitioner's service: Kulkarni v Milton Keynes NHS Foundation Trust [2009] EWCA Civ 789 [2010] ICR 101.
Thus, Professor Stevens would appear to have different procedural rights and safeguards, depending on which of his two employers decides to take the lead in investigating the allegations against him. It is understandable that he regards this situation as unsatisfactory.
In 2000, the then Secretary of State for Education commissioned a report from Sir Brian Follett and Michael Paulson-Ellis to review the appraisal, disciplinary and reporting arrangements for joint appointments between the NHS and universities. The Follett Report, published in September 2001, made a number of recommendations including, at paragraph 62, a recommendation pertaining to clinical research. It describes this as a good example of a situation where both parties (i.e. the university and the NHS Trust) are inextricably involved:
"The prime responsibility for the quality of research being undertaken and its progression lies with the university but the NHS Research Governance guidelines mean that the NHS body must be involved throughout the process. Should difficulties arise in this area of an individual's job, as indicated for example by the annual appraisal process, then both must be involved in correcting the situation and if necessary in any disciplinary proceedings."
Regrettably, this is one recommendation of the Follett report that the University of Birmingham has not taken up (although it has adopted some of the others, including a system of joint appraisals). There is no provision for a joint disciplinary process to be undertaken if matters of concern arise in respect of clinical trials forming part of a research project.
On behalf of Professor Stevens, Mr Hyam submitted that it cannot have been objectively intended that a clinical academic in his situation should be placed at a procedural disadvantage at the investigation stage if it were decided that the University should take the lead in investigating the matter instead of HEFT, given that this was a situation in which both employers were inextricably involved, and Professor Stevens has no control over that decision. Whilst that might seem to be a sensible approach, the fact remains that the University and HEFT have chosen not to adopt a unified disciplinary procedure as recommended by Follett, and therefore in my judgment they cannot be treated as if they had.
THE EXPRESS TERM ARGUMENT
Mr Hyam submitted that the phrase "in respect of duties carried out under the honorary consultant contract, a member of Staff of the University is subject to the disciplinary procedure referred to in the Trust's honorary contract" in Clause C50 of the Clinical Academic Contract should be interpreted as meaning that where a significant proportion of the duties under investigation arise under the honorary consultant contract, as they did here, the Trust's disciplinary procedure must be used in preference to that of the University. I would be unable to accept that submission even if the MHPS disciplinary procedure had been expressly referred to in HEFT's contract with Professor Stevens. It is not the natural meaning of the phrase, especially when considered in the context of the paragraph as a whole. The natural (and intended) meaning is that where his duties fall under both contracts of employment, the consultant is subject to the Trust's disciplinary process as well as the University's.
Clause C50 emphasises that the two disciplinary regimes are separate (and subject to their own grievance and appeals procedures, with no cross-over between them). Moreover, as I have already illustrated, the Ordinance itself contains express provisions addressing the position of clinical academics. Despite Clause C50, the University has expressly retained a right to invoke its own disciplinary procedures in matters of clinical practice. A clinical academic may be subject to the University's disciplinary procedure in matters concerning clinical practice outside the University campus (and even outside his NHS consultancy – for example if he had a private practice in Harley Street). Those provisions mean that the Trust's procedure cannot prevail in cases of overlap or where the allegations relate solely to clinical matters. Objectively, it cannot have been the parties' intention that one set of disciplinary rules should trump the other.
It follows that not only must I reject the express term argument, but that there is no room either for the implication of any term melding the procedures or, as Mr Hyam at one point submitted, a term that the elements of either procedure which are the most favourable to the clinical academic under investigation should be adopted. However, this does not mean that the fact that Professor Stevens would be permitted to take Professor Palmer with him to an equivalent investigatory meeting initiated by HEFT is an irrelevant consideration. On the contrary, it is an important part of the factual matrix.
Having determined that there is no contractual obligation on the University to adopt HEFT's procedure in these circumstances, the Court next has to determine the rights and obligations of the University and Professor Stevens in respect of the application of the University's disciplinary procedure set out in the Ordinance.
WHAT IS THE STATUS OF PARAGRAPH 3.21.35 OF THE ORDINANCE?
The first matter that I have to consider is whether the provisions of the Ordinance, or at least the provisions of Paragraph 3.21.35, are terms of Professor Stevens' contract of employment, or whether, instead, there is an implied term that the University will follow the disciplinary procedure set out in the Ordinance unless there is a good reason for departing from it.
Provisions of a collective agreement to which a contract of employment is said to be "subject", or which are referred to as governing the relationship between employer and employee, can range from matters of policy and aspiration to hard-edged contractual rights. The leading case on determining whether any part of a collective agreement has been incorporated into an individual contract of employment is Alexander v Standard Telephones & Cables Ltd (No.2) [1991] IRLR 286. Hobhouse J held at [31] that the court must ascertain the contractual intention of the employer and employee on normal contractual principles. Where a document is expressly incorporated by general words it is still necessary to consider, in conjunction with the words of incorporation, whether any particular part of the document is apt to be a term of the contract; if it is inapt, the correct construction of the contract may be that it is not a term.
In Bristol City Council v Deadman [2007] EWCA Civ 822 [2007] IRLR 888 the key issue in the Court of Appeal was whether the employer council's "procedure for stopping harassment in the workplace" was incorporated into the contract of employment. The relevant clause stated that "rules and local agreements made by the city council directly affecting other terms and conditions of your employment currently include…" followed by a list of 22 different provisions. Some of these were couched in language appropriate to contractual terms; others, such as the "integrated equalities policy" were not.
Lord Justice Moore-Bick, who delivered the judgment of the court, drew a distinction between these two types of provision at [17]. A document like the equalities policy, which did not naturally lend itself into incorporation into the contracts of the employees, was properly to be understood as illustrating the manner in which the council expected to conduct its relationship with its employees, both in complying with its over-arching contractual obligation not to undermine the mutual relationship of trust and confidence, and in observing its duty of care towards them. The procedure for stopping harassment in the workplace was different, because although some parts of it contained little more than statements of policy, other parts were of a more detailed and formal nature and were capable of being incorporated into contracts of employment.
Moore-Bick LJ said that where an employer has published and implemented, with the concurrence of employees' representatives, formal procedures providing for the manner in which complaints are to be investigated, it will usually become a term of the contract of employment that these procedures will be followed unless and until withdrawn by agreement. It was therefore a term of Mr Deadman's contract of employment that his employer would follow its published procedure in the investigation of any complaints of harassment made against him. There was no separate contractual obligation to investigate such complaints sensitively.
There appear to be some similarities between the procedure in that case and the Ordinance, in that they each contain a mixture of policy, guidance, and rights or obligations. However in Bristol City Council v Deadman, there were no express words of incorporation; instead it was recorded that the various policies and procedures "directly affected" the terms and conditions of the individual contracts of employment. Had there been an express incorporation clause, there would have been no need for the Court of Appeal to decide the matter on the basis of an implied term that the collectively agreed procedures would be followed. In this case, there are express words of incorporation and the guidance in Alexander is therefore applicable. The Court must look at the Ordinance and determine which, if any of its terms are "apt for incorporation".
In Lakshmi v Mid-Cheshire Hospitals NHS Trust [2008] EWHC 878, the relevant NHS Trust had brought into effect a disciplinary policy known as "HR2" in order to implement MHPS. There was an issue as to whether Clauses 3.7 and 3.9 of HR2 were terms of a doctor's contract of employment. Her letter of appointment had stated that she "will be subject to the Trust's normal disciplinary procedure and rules" - language which is very similar to the words used in the first sentence of Clause C50. The court, following Hobhouse J's guidance in Alexander, decided that the breadth of HR2 and the language that it used was inconsistent with it being regarded as a contractual document, and that it was purely guidance. Nevertheless, it was a term of the contract that the Trust would comply with HR2, unless it could establish a good reason not to.
Mr Hyam submitted that the Court should take the same approach to the Ordinance, which, like HR2, contains a mixture of different provisions ranging from those couched in the language of policy and aspiration (e.g. paragraph 3.21.4, or the description of the purpose of an investigation under Part III in paragraph 3.21.13) or guidance (e.g. the examples of gross misconduct given in paragraph 3.21.12) to those using the language of contractual terms. He contended that the Ordinance as a whole is not incorporated into the contract of employment, but that there is an implied term that the University will comply with it unless there is a good reason not to.
Mr Sutton submitted that on the Alexander test, various aspects of paragraph 3.21.35 could be identified as conferring express contractual rights upon the employee or mandatory obligations upon the employer, namely:
i) The right to be given in writing full information about the allegation before the investigation, to enable him/her to respond;
ii) the right to nominate individuals to be interviewed as part of the investigation;
iii) the right to submit any documents which may be relevant for the consideration of the investigator;
iv) the right to be accompanied at any investigatory hearing by a member of staff or a trade union representative of his or her choice;
v) The obligation on the part of the employer to keep the member of staff concerned informed of progress of the investigation, and
vi) The obligation to notify him or her, in writing, of its outcome.
All these, he submitted, are plainly terms of the contract which the employee is entitled to enforce.
It may be that some of the more nebulous aspects of the Ordinance would be regarded as policy or guidance that the University is bound to follow unless there is a good reason not to; but taken as a whole I cannot characterise the Ordinance as just guidance. I am reinforced in that view by the fact that it was the subject of a collective agreement. Moreover, given that these specific provisions of the Ordinance are expressed as conferring "rights" upon the member of Staff concerned, or expressed in mandatory language (by which I mean "shall do" something as opposed to "shall aim/endeavour to do" it) it is difficult to reach the conclusion that, on ordinary principles of construction, the contracting parties did not intend them to be binding and enforceable contractual terms. For that reason, I prefer Mr Sutton's analysis.
It is therefore Professor Stevens' contractual right to be accompanied to any investigatory meeting by another member of university staff or by a trade union representative of his choice. Neither the University nor Professor Alderson would be entitled to stop such a person from attending, for example on the basis that the chosen staff member is a QC specialising in employment law, or the union representative comes from a union other than the UCU. That begs the question whether those two categories are exhaustive.
The specific rights that I have identified in Paragraph 3.21.35 are to be contrasted with aspects of the investigation that are not expressly addressed in the Ordinance. It appears that the decision as to what investigations are to be carried out is a matter for the discretion of the investigator – the phrase used in paragraph 3.21.34 is "such investigations as may be considered appropriate". So too is the manner in which the investigations are to be conducted. There is no express obligation to hold a meeting with the person under investigation – he just has a right to be accompanied to any such meeting. However the overarching obligation of trust and confidence may require such a meeting to be held, because of the serious nature of the investigation and the potentially serious consequences for the person concerned. That is a good illustration of how a term implied by law into the contract of employment supplements and complements, rather than contradicts, its express terms.
Nothing is said about how any interviews with nominated (or other) witnesses are to be conducted. The evidence before me is that when witnesses employed by HEFT were interviewed, they were allowed to be accompanied by persons outside the two categories specified in paragraph 3.21.35, such as an HR person from HEFT. Mrs Pike says that this was simply a courtesy intended to encourage them to co-operate with the investigation, as the University has no power of compulsion over them. Whatever the reasons, the consequences are that in what is said by the University to be a fact-finding exercise, witnesses other than the person under investigation (who may be exposed to disciplinary investigation or action themselves in future, if they were members of Professor Stevens' team) have been afforded a free choice of companion when they attended an investigatory interview, whereas he has not.
There is nothing in the procedure about submitting a questionnaire to the person under investigation, although questionnaires have been sent to and completed by Professor Stevens (with the assistance of Dr Palmer). Dr Palmer was also permitted to attend Professor Stevens' inspection and review of the Trial Master File documents in January 2015.
The "rights" that are conferred upon the person under investigation by Paragraph 3.21.35 have one common characteristic. They are all concerned with ensuring that the investigation adheres to minimum standards of procedural fairness. The employee is entitled to know in advance the allegations he is facing, so that he can address them and collate evidence to support his defence. He is entitled to provide documents to the investigator which support his account of events; he is entitled to require the investigator to interview certain witnesses; he is entitled to be accompanied at an investigatory meeting; and he is entitled to be informed about the progress and outcome of the investigation.
That being so, in my judgment there is nothing on the face of paragraph 3.21.35 that would either preclude the implication of a term, or the exercise of a discretion by the investigator (who is after all the person in charge of the process) which adds to those minimum levels of protection. The language of paragraph 3.21.35 is that of entitlement, not permission.
Mr Sutton submitted that although there was an appreciable margin of discretion in how he conducted the investigation, the investigator would have no power to vary the express terms of paragraph 3.21.35 by permitting someone outside the two specified categories of companion to attend the investigation meeting. I disagree. He would not be varying anything. The fact that someone has a contractual entitlement to insist that X or Y accompanies him, does not, as a matter of language or logic, preclude the investigator from allowing him to be accompanied by Z. However, unless there is an implied term mandating Z's presence, or a refusal would fall outside the margins of discretion afforded to a reasonable investigator taking into account all the relevant factors, the employee could not insist on being accompanied by Z.
What did the contracting parties envisage would be the role played by the person accompanying the employee to the meeting? It seems to me that the Court cannot properly ascertain what their objective intentions were without considering that question. Mr Sutton submitted that the role of the companion was a matter for the discretion of the investigator. I cannot accept that submission, which would lead to an undesirable lack of consistency, with some companions being unable to speak, and others acting as advocates. It seems obvious, given the character of the rights afforded by paragraph 3.21.35, that the parties intended that the person concerned would not be there merely to afford moral support, but to act as a counterweight in terms of basic procedural fairness, i.e. to fulfil the same supporting role for the employee as the external HR consultant (and technical adviser, if there is one) are presumably intended to fulfil for the employer.
The companion is not there to act as an advocate. This much is clear from the clearly defined role of the "representative" at the stage of the disciplinary hearing. He or she is there to see fair play (e.g. in terms of ensuring that the notes of the interview and any statement taken from the employee for potential use in future disciplinary proceedings are accurate and comprehensive) and to help the employee to give a full and sufficiently clear account of everything of relevance so as to enable the investigator to be properly informed, and to understand the employee's response to the allegations.
Therefore in a case such as this, the companion is unlikely to be much use if he does not have a grasp of the technical issues or understand the practical demands of research of this nature. The University plainly believes that Professor Alderson, eminent scientist though he is, needs to have recourse to a technical adviser (though it is most unfortunate that it picked someone who is likely to be an important witness). One might therefore reasonably assume that the person accompanying Professor Stevens should have sufficient knowledge of research trials of this type to be able to afford him meaningful assistance.
The University's interpretation of the right to choose a companion in Paragraph 3.21.35 involves implicitly adding the word "only". However it was common ground that the two categories expressly referred to cannot be exhaustive, because the paragraph does not cater for the situation in which the person under investigation suffers from a disability. Suppose, for example, that he is profoundly deaf. He can lip-read very well, but because of the importance of the meeting he is anxious to be supported by someone who can sign, so that he does not misunderstand any of the questions or miss any vital nuances in them. If there was no proficient signer among the University staff, and if he is not a member of a trade union, or the union could not provide a signer, then it is obvious that he would have to be allowed to be accompanied by a companion who could sign.
Mr Sutton submitted that the University would be obliged to make reasonable adjustments to cater for the needs of any person under a disability because the Equality Act 2010 mandates it. Whilst that is of course true, even in the absence of such legislation, or prior to its enactment, it seems to me to be beyond argument that there would be an implied term to the effect that the employee concerned would have the right to be accompanied by a companion who would give him the assistance that he required, even if that companion was not a member of staff or a union representative. The difficulty lies in reconciling that implied term with the effect of a collective agreement.
The University places great weight on the fact that the Ordinance is the product of a collective agreement, and that prior to that agreement the individual concerned had no right to be accompanied to the meeting by anyone. His only rights were those conferred on him by the Employment Relations Act 1999 in respect of representation at any subsequent disciplinary hearing. That statute entitles an employee to be accompanied at a disciplinary hearing by a trade union representative or another of the employer's workers. Therefore, when it was introduced, at the union's behest, Paragraph 3.21.35 conferred an additional right on the employee to be accompanied at an investigatory meeting by a person drawn from precisely the same categories as those in the statute. The intention cannot have been to exclude lawyers, since there is nothing to prevent the employee from choosing someone within those categories who is legally qualified.
Mr Sutton submitted that this right was non-discriminatory because everyone could choose a fellow member of staff to accompany them; union members were simply being given the additional right to choose a union representative, who could be external, and from any union (it must be borne in mind that in most organisations the representative of the recognized union will be a member of staff). Of course that submission does not recognise the practical realities, namely, that whilst a fellow employee might wish to avoid becoming involved for all kinds of reasons, the union representative would probably have little choice but to attend - unless of course the union had an arrangement with a defence organization along the lines of the arrangement between the BMA and the MPS.
Mr Sutton reminded the Court of the well-known passage in Waite LJ's judgment in Ali v Christian Salvesen Food Services Ltd [1997] ICR 25 at 31B-D, in which he pointed out that it is in the nature of a collective agreement that it should be concise and clear, and therefore one would not expect the parties to attempt to cover every possible contingency. He said that: "should there be any topic left uncovered by an agreement of that kind, the natural inference, in my judgment, is not that there has been an omission so obvious as to require judicial correction, but rather that the topic was omitted advisedly from the terms of the agreement on the ground that it was seen as too controversial or too complicated to justify any variation of the main terms of the agreement to take account of it."
Those considerations make it difficult for a party to establish that a term should be implied as a matter of fact into a collective agreement, on the basis of the principles so elegantly re-cast by Lord Hoffmann in Attorney General of Belize v Belize Telecom Ltd [2009] 1 WLR 1988. That does not mean that the "natural inference" referred to by Waite LJ can never be displaced. The question which the Court has to answer is whether, bearing those matters in mind, the provision sought to be implied into the contract would spell out in express words what the contract, read against the relevant background, would reasonably be understood to mean.
Moreover, the points made by Waite LJ have no application to a term which is implied as a matter of law, such as the overriding term of trust and confidence. The distinction between the two types of implied term was succinctly explained by Baroness Hale JSC in Geys v Socie?te? Ge?ne?rale [2012] UKSC 63, [2013] 1 AC 523 at [55]-[56]. The term of trust and confidence is implied by law as a necessary incident of the relationship, unless the parties have expressly excluded it. Although Mr Sutton at one point suggested that the Court could infer that there had been an exclusion or modification of that term if there appeared to be a conflict between it and the express provisions of the Ordinance, I prefer to resolve any such apparent conflict in accordance with Lord Hope's suggested approach in Geys at [24], namely, to do my best to reconcile them, if that can be achieved conscientiously and fairly.
Returning to the hypothetical scenario of the person under a disability, it seems to me that the implied term that he could choose a companion outside the two named categories who would provide him with the necessary assistance could be implied either as a matter of fact or as a matter of law (quite apart from the obligations imposed on the employer by statute). Despite Waite LJ's dictum, it could be legitimately inferred that the parties intended, consistently with the purpose of the procedural safeguards in paragraph 3.21.35, that such a person should not be put at a disadvantage. Likewise it could be argued that to deny him such a companion would be a breach by the employer of the obligation of trust and confidence. Both routes would lead to the same conclusion.
Mr Hyam submitted that it is possible to imply a term into paragraph 3.21.35 so that it reads:
"At any meeting with the member of Staff during the course of the investigation, s/he shall have the right to be accompanied by a member of Staff or a trade union (or equivalent) representative of his or her choice."
Mr Sutton submitted that this would amount to re-writing the contract, which is something that the Court is not allowed to do, even if it would produce a fairer or more reasonable term.
The introduction of the words "or equivalent" would involve adding a new category of companion to those expressly referred to, and it would apply across the board in every case, regardless of whether or not the employee was a member of the UCU or any trade union. One major problem with the suggested implied term is that the words "or equivalent" are vague and liable to create uncertainty. Mr Hyam contended that the contracting parties plainly intended to permit accompaniment by someone discharging the role of a union representative; but anyone could discharge that role, unless in the special circumstances of the case, the companion required special attributes or specialist knowledge in order to fulfil it. If that is really what the parties had intended, they would have produced a clause similar to that in the HEFT policy.
It cannot be said that the parties to the collective agreement failed to turn their minds to the special position of clinical academics. They have made specific provision for the composition of any disciplinary panel in cases involving them. They have also drawn a distinction between "representation" at formal, adversarial disciplinary hearings, and "accompaniment" at the inquisitorial stage of the process.
I am unable to conclude that it can legitimately be inferred on AG (Belize) v Belize Telecom principles that the parties had an unexpressed intention that any employee who belongs to a professional defence organization could be accompanied to such a meeting by a member of that organization in lieu of a union representative, especially since the parties have expressly provided for him to choose from a wider pool of persons to represent him at the stage of the disciplinary hearing. This is precisely the kind of scenario in which Waite LJ's dictum strikes a resonant chord. The presence of a person from a defence organization is a topic which may well have proved controversial, if not with the union, then with the University. Nor can I accept Mr Hyam's submission that Professor Stevens is being penalised for not being a member of a union. Employees who are not members of a union are not left to fend for themselves, since they still have the ability to bring a member of staff with them. Therefore I agree with Mr Sutton that I cannot imply that term.
However, that is not the end of the argument because the University is bound by the overriding obligation of trust and confidence. United Bank v Akhtar is an illustration of how an employer's right to rely upon the express terms of the contract was modified by that overriding obligation, as well as by terms that were implied in fact, and by the independent obligation not to exercise a contractual discretion capriciously. The EAT reached its conclusion by several distinct legal routes, of which the obligation of trust and confidence was one. The case is authority for the proposition that the overriding obligation of trust and confidence is independent of, and in addition to the express terms and that it may qualify behaviour which might otherwise appear to be justified because it falls within the literal interpretation of those express terms.
Mr Sutton submitted that United Bank v Akhtar was distinguishable because it concerned a contractual discretion. However, it is clear that the passage at [50] of Knox LJ's judgment which I have quoted in paragraph 27 above is not limited to cases of that nature. It is true that the situation with which the EAT was directly concerned involved the exercise of express contractual rights by the employer in a manner that was held to be objectionable. Yet the mischief that the EAT was addressing was the reliance by the employer upon the express provisions of the contract to justify acts or omissions which would seriously undermine the relationship of mutual trust and confidence. Instead of finding that the obligation of trust and confidence yielded to the express terms of the contract permitting such behaviour, the EAT decided that the express terms had to be applied in a way that was consistent with the overriding obligation of trust and confidence.
The question, therefore, is whether the University's insistence that Dr Palmer should not be allowed to accompany Professor Stevens to the meeting in the particular circumstances of this case is a breach of the implied term of trust and confidence. The test has been described as "a severe one. The conduct must be such as to destroy or seriously damage the relationship" see Gogay v Hertfordshire County Council [2000] IRLR 703 per Hale LJ at [55].
Mr Sutton submitted that the refusal by the University to allow Dr Palmer to attend the meeting is insufficiently serious to constitute a breach of the term of trust and confidence, and that any perceived unfairness at this stage is adequately compensated by the right to legal representation if the matter proceeds to a disciplinary hearing. I disagree with the latter point – the investigatory meeting does not inexorably precede disciplinary action and it should not be assumed that it will. The presence of an appropriate assistant at the investigatory meeting could make all the difference between Professor Anderson's report containing information that would or might lead the Vice Chancellor to decide to take no further action or to proceed under Part III, and containing information that would lead him to decide to convene a disciplinary hearing under Part V. Therefore the ability to have legal representation at a later stage does not "cure" any unfairness at the investigatory stage.
I have no hesitation in finding that the University's behaviour in refusing his request to be accompanied by Professor Palmer is such as to seriously damage the relationship of trust and confidence between the University and Professor Stevens. It would be patently unfair not to allow Professor Palmer to attend, and the suggestion made at one point that he might sit quietly outside so that Professor Stevens could leave the room to consult him from time to time was obviously unworkable. Indeed that suggestion serves to illustrate just how unattractive the University's stance is.
The investigatory interview is a crucial stage in the process. Both parties must be assumed to be aiming to get to the truth and to put the investigator in the best possible position to provide a comprehensive and balanced report to the decision maker. I appreciate that the process is not, as yet, adversarial. In many cases the provisions of paragraph 3.31.35 might be regarded as perfectly fair. Yet in this case, the perception has been created that the University has an advantage over Professor Stevens because it has enlisted the support of an external HR consultant, who will attend, and it has provided Professor Alderson with the technical assistance of a senior member of staff, chosen by the University, who may also possibly attend, whereas it is forcing him to go into the meeting without any support of that nature. That objective perception of an inequality of arms is not helped by the fact that Ms van Riel was the very person to whom Professor Stevens reported certain of the breaches of the Code before the first of the MHRA inspections, and with whom he was working to address them.
The allegations that are being investigated by Professor Alderson are extremely serious, and they potentially have serious ramifications for Professor Stevens personally and professionally. The more serious the matter, the more thorough the investigation that is required. The ACAS Guide emphasises the importance of keeping an open mind and looking for evidence which supports the employee's case as well as evidence against. I am sure that this is what Professor Alderson has set out to do.
The person best placed to provide the evidence in support of the employee's case is usually the employee himself, but he may not always appreciate the significance of a particular piece of information. A union representative is likely to be experienced in safeguarding the interests of members in these circumstances, and should be able to help the employee to identify the significant features, and ensure that they are mentioned. Professor Stevens cannot avail himself of such assistance because he is not a member of a union, and even if he were a member of the BMA, he would be no better off. Professional defence organizations serve a similar function to unions in this particular situation, and have similar know-how and experience, which explains the agreed division of responsibilities between the BMA and the MPS.
Professor Stevens has had the assistance of Dr Palmer thus far, which makes it even more remarkable that he should be denied it at the interview, when it is probably of most value to him. Other witnesses have been treated more favourably by the University in terms of their choice of companion at interview. It matters not that the University has good reasons for trying to maintain their goodwill and co-operation. Professor Stevens is not being afforded the same treatment, and at this stage he is just as much a witness of fact as they are.
I accept that this is a large University, and in theory Professor Stevens could approach another member of staff, and ask them to accompany him. However, the reality is that the "choice" given to him by paragraph 3.21.35 is not even a choice of only one category of companion. It is no choice at all. He has given a cogent (and unchallenged) explanation why there is nobody in his own department that he could approach, and why he does not know anyone else well enough to ask them. Even if someone from another department, such as the law faculty, agreed to come, they would not have the technical know-how that Dr Palmer has, and which the University must accept is necessary, otherwise they would not have provided Professor Alderson with Ms van Riel to assist him. Thus paragraph 3.21.35 does not afford Professor Stevens with the envisaged minimum procedural safeguards in practice, and the University is well aware of that. It would be patently unfair to force him to attend the interview alone.
It is also pertinent, when considering fairness, to bear in mind that it was a matter outside Professor Stevens' control that the University took the lead in the investigation which related to clinical trials for which the University and HEFT each had a share of responsibility. If it had been HEFT that took the lead, as it could well have been, Dr Palmer would have been allowed to accompany Professor Stevens to any investigatory meeting. Although the University is entitled to investigate the matter first, and its procedures are separate from HEFT's, an employer slavishly adhering to its contractual terms so as to produce the result that Professor Stevens' choice of companion at the investigatory meeting must necessarily depend upon the fortuity of which of his two employers decides to initiate the investigation – a matter over which he has no influence - hardly strikes one as the epitome of fair dealing. This point may not suffice in and of itself to castigate the University's behaviour as something which seriously undermines the relationship of trust and confidence, but it provides additional support for my conclusion that it does so in the particular factual circumstances of this case.
The next question is whether there is "reasonable and proper cause" for the employer's conduct; that means that there has to be some countervailing justification for behaving in a way that would seriously undermine the relationship of trust and confidence. The fact that the behaviour is permitted by the contract is no answer, because the obligation of trust and confidence qualifies the express terms. Such behaviour would rarely be justified except on grounds of public policy, and in my judgment there is no justification for the unfairness in this particular case.
The University says that it does not wish to depart from the collective agreement, as it might upset the UCU. That would not be a sufficient justification, even if the cause for concern was likely to materialise, which I doubt. Whilst I could understand that a union might well get upset if the employer reneged on its promises, e.g. if it bypassed the investigation altogether and proceeded straight to a disciplinary hearing, I find it difficult to accept that it would ever object to an employer agreeing to confer what might be regarded as more favourable treatment on its employees than it had agreed with the union - at least so long as this did not result in union members being treated less favourably than non-union members.
I would find it astonishing if the UCU was in the least concerned about the creation of a level playing field for members of the BMA or non-union members or an expansion of the categories of companion to an investigatory meeting in this or any other case. Dr Palmer's evidence is that he is unaware of any other university in the country refusing to allow an MPS representative to be present at such investigatory meetings; if that is so, their presence cannot be a matter of concern for the UCU, which must represent many of the academic staff employed by other universities.
The University is also apparently concerned that an "ad hoc" departure from the rules would create a perception of favouritism which would be inimical to good staff relations and possibly lead to other instances of special pleading. That does not justify treating Professor Stevens unfairly. If the "tip of the iceberg" argument were correct, then the University would never countenance any departure from the procedure and would be setting its mind resolutely against consideration of any circumstances, however compelling, that would justify such a departure. It may well be that there are other situations in which fairness would dictate that the University should permit a representative of a defence organization to attend the investigatory meeting. Why should the possibility of having to adhere to the duty of trust and confidence on other occasions be regarded as a good reason for refusing to do so in this particular case? Logically it cannot be a justification.
There is no reasonable and proper cause for the University's objectively unfair conduct, which is serious enough to undermine the relationship, and thus the refusal to allow Dr Palmer to accompany Professor Stevens to the meeting is a breach of the overriding term of trust and confidence.
DISCRETION
It is therefore unnecessary for me to go on to consider in any detail the further and alternative ground of challenge raised by Mr Hyam to the University's purported exercise of its discretion to waive adherence to the literal requirements of paragraph 3.21.35. Whilst there is some force in the criticism that the University has failed to take into account all the relevant factors that it should have done before making up its mind, some of those factors (such as the difficulties for Professor Stevens in finding an appropriate member of staff to accompany him) have not been fully articulated until recently.
Matters are further complicated by the fact that in my judgment there is a separate and distinct layer of discretion under the agreed procedure that thus far has been ignored – although the request to allow Dr Palmer to attend was very properly directed to Professor Alderson. As I have already said, the person with the discretion under the agreed investigation procedure to permit anyone to attend the meeting, besides someone that Professor Stevens has the contractual right to insist must attend, is the investigator. The nominated investigator, Professor Alderson, has a free rein over the investigation and over matters of procedure subject only to ensuring that the rights enshrined in paragraph 3.21.35 are respected. He has never exercised that discretion, which plainly exists despite Mr Sutton's valiant attempt to persuade me otherwise.
It is understandable why Professor Alderson did not wish to get involved in the dispute and passed the request to the University to deal with, and I intend no criticism of him for doing so. Nevertheless, the decision was really a matter for him. The University would not have been entitled to interfere either with the decision-making process or with the decision, any more than Professor Stevens would. Had I not concluded that there was a breach of the term of trust and confidence I would have directed that the matter be left to Professor Alderson to determine, but (no doubt to his relief) that will not be necessary.
CONCLUSION
For the reasons set out above, the express terms of Clause C50 of the Clinical Academic Conditions do not oblige the University to apply HEFT's disciplinary policy or those parts of it which would give Professor Stevens more favourable protection than its own disciplinary policy. Nor is it permissible to imply a term into the contract or read paragraph 3.21.35 as implicitly providing that the employee under investigation should be permitted to be accompanied by a Trade Union "or equivalent" representative of his choice.
However, on the facts of this particular case, it would be conspicuously unfair for the University to insist on adherence to the literal terms of that paragraph so as to deny Professor Stevens the accompaniment of Dr Palmer at the investigatory meeting, and that behaviour is a breach of the implied and overarching contractual term that the employer should do nothing to seriously damage the relationship of mutual trust and confidence without good and sufficient reason. I am prepared to grant a declaration to that effect, but I shall assume that it will be unnecessary for me to grant an injunction, as I have no reason to suppose that the University would fail to abide by the terms of the declaration.
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HIS HONOUR JUDGE HAVELOCK-ALLAN Q.C.
This judgment determines an application by the claimant to amend the Particulars of Claim.
The claim in the action is for alleged mis-selling of an interest rate hedging product or "swap". The swap was a Structured Collar. It was entered into by the claimant with the defendant bank ("the Bank") on 11 June 2008. The transaction has been investigated by the Bank as part of the review of swaps agreed between the major banks and the FSA ("the FCA Review"[1]). The Bank has made the claimant an Offer of Redress. The claimant considers that the amount of the Offer of Redress is not adequate because it is based on what the claimant maintains is an unjustified assumption as to what kind of swap it would have entered into if the original transaction had conformed to the standards and principles agreed between the Bank and the FSA as the basis for the Review.
As an alternative to its claim for damages for negligent misrepresentation, breach of contract and/or negligent advice or the negligent provision of information, the claimant has pleaded that, by virtue of section 1 of the Contracts (Rights of Third Parties) Act 1999, it is entitled to enforce the agreements between the Bank and the FSA under which the FCA Review was instituted because it was a member of a class on whom the agreements purported to confer a benefit. The claimant alleges that the Bank is in breach of the agreements because it has failed to carry out the FCA Review in accordance with the standards and principles agreed with the FSA, and that the Bank is liable to the claimant for the consequences of that breach. I shall call this claim "the third party rights claim".
The third party rights claim is now dead in the water. When the particulars of claim were drafted, the exact terms of the agreements between the Bank and the FSA were not in the public domain. There were two agreements. The first was dated 29 June 2012 ("the June 2012 Agreement"). The second was dated 31 January 2013 ("the January 2013 Agreement"). Under the June 2012 Agreement, the Bank (together with HSBC, Lloyds and RBS) agreed to give a written Undertaking to the FSA to carry out a review of its sales of swaps since 1 December 2001 to private customers and retail clients who did not meet Sophisticated Customer Criteria, and to provide appropriate redress in cases where mis-selling was found to have occurred. The January 2013 Agreement followed a pilot exercise in which a sample of transactions had been reviewed. The pilot exercise suggested that certain amendments should be made to the Undertaking so as better to define the "Sophisticated Customer Criteria". These amendments were embodied in the January 2013 Agreement.
After initially declining to disclose copies of either Agreement as part of early disclosure, the Bank eventually furnished the claimant with a redacted copy of the June 2012 Agreement[2], which revealed that it contained the following express provision:
"Rights of persons other than the Parties
9. A person who is not a Party to this Agreement has no right under the Contracts (Rights of Third Parties) Act 1999 or otherwise to enforce any term of this Agreement."
In the light of clause 9, the claimant has abandoned its claim under the 1999 Act, and seeks permission to delete that head of claim from the particulars of claim. The Bank consents to that part of the application to amend. The part which is opposed consists of 3 new claims, or bases of claim, by which the claimant says that it is entitled to enforce its rights under the FCA Review and to claim the same measure of damage as if the 1999 Act had applied. These proposed new bases of claim have been raised in at least one other swaps case in the Bristol Mercantile List and are likely to be raised in other swaps cases where there is dissatisfaction with the Offer of Redress. So the decision on whether permission to amend should be granted in this case may have wider repercussions.
The new claims are, in summary, as follows:
(1) that in consequence of the Bank's offer to the claimant to review the sale of the swap and the claimant's agreement to participate in the review process and incurring expense in so doing, a contract came into being between the claimant and the Bank under which the Bank owed the claimant a duty to conduct the review in accordance with the specification it had agreed with the FSA for the conduct of the FCA Review;
(2) that in agreeing to provide redress in accordance with the specification for the conduct of the FCA Review, the Bank owed the claimant an equivalent duty of care in tort; and
(3) that in entering into the June 2012 and January 2013 Agreements with the FSA, the Bank agreed to confer on customers whose swap transactions were reviewed the benefits of such a review and of redress if appropriate, and, in accordance with the principles explained in White v Jones [1995] 2 AC 207, owed the claimant a duty to implement the review process properly because any failure to do so would place the Bank in breach of its Agreements with the FSA in circumstances where the FSA and FCA would suffer no loss but the claimant, as intended beneficiary of the FCA Review, would suffer a loss.
The Bank's objection to these new claims is that they stand no real prospect of success. No issue of limitation arises, nor is it contended that, as a matter of discretion, the amendments should not be permitted if the new claims are capable of serious argument. The Bank's contention is that they are not capable of serious argument but are fanciful and contrived.
. The Bank is right that the relevant test is that which applies on an application to strike out or an application for summary judgment. The Court should not give permission to introduce by way of amendment new heads of claim which do not cross the arguability threshold of a "real prospect of success". To do so would be wasteful of the parties' and the Court's time and resources, and contrary to the overriding objective.
Whilst accepting that this is the correct approach, Mr Virgo, counsel for the claimant, draws attention to what was said by Mummery LJ in Doncaster Pharmaceuticals Group Ltd v The Bolton Pharmaceutical Company 100 Ltd [2006] EWCA Civ 661 at para. 5:
"Although the test can be stated simply, its application in practice can be difficult. In my experience there can be more difficulties in applying the "no real prospect of success" test on an application for summary judgment (or on an application for permission to appeal, where a similar test is applicable) than in trying the case in its entirety (or, in the case of an appeal, hearing the substantive appeal). The decision-maker at trial will usually have a better grasp of the case as a whole, because of the added benefits of hearing the evidence tested, of receiving more developed submissions and of having more time in which to digest and reflect on the materials."
Mr Virgo also relies on the cautionary note struck by Lord Browne-Wilkinson in Barrett v London Borough of Enfield [2001] 2 AC 550 where (at 557E-G) he said:
"In my speech in the Bedfordshire case [X (Minors) v Bedfordshire County Council] [1995] 2 AC 633 at pp. 740-741 with which the other members of the House agreed, I pointed out that unless it was possible to give a certain answer to the question whether the plaintiff's claim would succeed, the case was inappropriate for striking out. I further said that in an area of the law which was uncertain and developing (such as the circumstances in which a person can be held liable in negligence for the exercise of a statutory duty or power) it is not normally appropriate to strike out. In my judgment it is of great importance that such development should be on the basis of actual facts found at trial not on hypothetical facts assumed (possibly wrongly) to be true for the purpose of the strike out."
Mr Virgo points out that there is a second limb to the test for striking out, as it is reflected in CPR 24.2. The Court should not strike out a claim or give summary judgment in respect of it, and therefore should also not preclude its being introduced by way of an amendment, if there is a "… compelling reason why the case or issue should be disposed of at a trial". This, in Mr Virgo's submission, is a case where there is a compelling reason. He submits that the FCA Review was plainly intended to generate some legal entitlement for those customers whose swaps transactions fell within its remit. It has created an expectation that the principles of the FCA Review would be faithfully implemented by the banks who signed up to it. There are a number of cases, aside from the present case, where the customer is not satisfied with the basis of calculation of an Offer of Redress. The question whether the customer has a private law right to enforce compliance with the FCA Review specification as opposed only to a public law right to challenge decisions taken during the FCA Review is an issue of some public importance and ought to be decided at a trial.
I shall start by rehearsing the arguments on each side in a little more detail under each new head of claim. There is a considerable degree of overlap.
The contract claim
Mr Virgo accepts that the viability of the new claim in contract hangs on the claimant being able to identify the basic framework of a contract, in terms of offer, acceptance and consideration, in the exchanges which led to the subject swap being incorporated into the FCA Review. He submits that in the present case all the indicia of a contract are in play. The outline facts are as follows.
On 17 July 2013, the Bank's Interest Rate Hedging Resolution Team wrote a letter to the claimant as follows:
"We are writing to you with regard to the … interest rate hedging product (IRHP) that you purchased from Barclays.
We have determined that, at the time of the purchase, you met the criteria of a non-sophisticated customer according to the definition agreed with the Financial Conduct Authority (FCA). This means that the sale of the above IRHP is automatically eligible for redress. …
As detailed in our guide to the review (which you can view online at www.barclays.com/swapsreview), we would like to invite you to take part in an impartial fact find regarding the sale of the above product, which we have asked Eversheds[3] to carry out. This is not compulsory, but does mean that Barclays will be able to take into account anything you wish to tell us. You are also invited to submit any documentation that you believe is relevant.
Eversheds' role is to gather relevant information regarding the sale of IRHPs and to present that information to Barclays. This will be important to assist Barclays in determining what redress will be offered. Eversheds' role will not involve making any decisions about whether a mis-sale had occurred or, where redress is due, what amounts to a fair and reasonable redress.
The FCA states in its report, "Interest Rate Hedging Products - Pilot Findings", not only that it encourages all customers to take advantage of this opportunity to engage in the review but also that they have received positive feedback from customer representatives on the engagement process.
…
If you choose to speak to Eversheds, they will not have access to any Barclays documents prior to the fact find with you. This will ensure that they do not have any preconceptions in relation to your sales experience. Their work will also be overseen by the independent reviewer to ensure that fact finds are conducted appropriately.
Please complete the attached form and return it in the enclosed prepaid envelope within 14 days from the date of this letter to let us know whether you would like to participate in a fact find or not.
…
If you do not wish to take part in a fact find, or we do not hear from you, we will continue with the review of your case, and provide you with a redress proposal.
We want to assure you that we are working hard to restore customer trust in Barclays and that we are committed to keeping you fully informed. In the meantime, you should continue to comply with all terms of any agreement you have with Barclays, including continuing to make payments under any IRHPs.
…"
The claimant signed the Response Form on 23 July 2013 saying that it wanted to talk to Eversheds and nominating one of its directors, Mr Atkinson, as the person with whom Eversheds should make contact. There followed a meeting on 16 September 2013 between the claimant, Eversheds and the independent reviewer[4]. The claimant's evidence in support of the application to amend does not say what happened at the meeting. The amendment itself (at paragraph 31) states only that the claimant "agreed to participate in the review process". The Bank accepts that on 16 September 2013 the claimant participated in the Fact Find with Eversheds. I infer from that that Mr Atkinson gave Eversheds the claimant's version of how the swap was entered into and possibly also some information as to the financial impact of the swap.
The Offer of Redress was sent to the claimant on 11 March 2014. It contained three options, the first involving acceptance of the Offer and no more, the second involving acceptance of the Offer and claiming consequential losses other than IRHP borrowing costs and/or lost profits/opportunities caused by mis-sale of the swap, the third rejecting the Offer and requesting a detailed assessment of IRHP borrowing costs and/or lost profits/opportunities caused by mis-sale of the swap as well as other consequential losses.
The claimant's solicitors responded on 21 May 2014. I have not seen the letter, but it challenged the basis of the Offer without selecting any of the 3 options. The challenge was presumably on grounds similar to those set out in the particulars of claim. The claimant's pleaded complaint is that the counterfactual by reference to which the Offer was calculated was a replacement swap in the form of a vanilla swap for 9 years and 10 months at a rate of 5.84% from which the claimant would have sought an exit on 3 August 2010, entailing a break cost of £131,533. The claimant's case is that if the Bank had complied with the relevant regulatory requirements it would have sought and obtained a hedge in the form of a 5 year interest rate cap at 6.5% and no more. It would not have sought to exit from that commitment and would not have incurred any break cost. The claimant further alleges that the Bank's counterfactual contravenes certain of the principles for the assessment of redress in the Annexes to the January 2013 Agreement.
The Bank wrote back on 21 May 2014 to say that the information provided by the claimant in support of its counterfactual had already been taken into account. However, further evidence would be considered if submitted within 14 days. The letter went on to explain that the Offer of Redress was the product of an assessment by a Customer Review Director within the Interest Rate Hedging Resolution Team. That assessment was then subjected to an internal quality assurance process before being referred to the independent reviewer. The role of the independent reviewer was to scrutinise the Offer for compliance with the standards and principles agreed between the Bank and the FCA and to determine whether it was fair and reasonable. The Bank gave the claimant an additional 14 days to confirm which option it was selecting. The claimant did not do so. At any rate the claimant did not confirm that it wanted to claim for any category of consequential loss. Accordingly the Bank wrote on 5 June 2014 to say that the Offer of Redress was now final and no further steps would be taken by the Interest Rate Hedging Resolution Team to review the sale of the claimant's swap.
From these exchanges, the amended particulars of claim assert that the Bank made an offer to review the sale of the swap to the claimant and the claimant accepted the offer by agreeing to participate in the review process and gave consideration by providing information to Eversheds. The resulting contract is alleged to have imposed an implied contractual duty on the Bank pursuant to section 13 of the Supply of Goods and Services Act 1982 to carry out the review with reasonable care and skill and/or an implied duty on the Bank (by necessary implication and/or to give business efficacy to the agreement between the Bank and the claimant) to comply with the principles and specification set out in the June 2012 and January 2013 Agreements.
Mr Allen, counsel for Barclays, submits that the contractual analysis is fundamentally flawed. The Bank was committed to carrying out the FCA Review whether or not the claimant wanted to participate. In the exchanges on which the claimant relies, it is not possible (he says) to extract an express promise by the Bank to the claimant that the Bank would comply with the Agreements. At most the Bank invited the claimant to engage with the Eversheds Fact Find and promised that any information supplied in the course of the Fact Find would be taken into account as part of the FCA Review. It was. If there was any contract established between the Bank and the claimant it must be one that can be inferred from the exchanges about the Fact Find. It is impossible, submits Mr Allen, to infer any contract of the kind now alleged, namely, that the Bank would comply with the specification in the Agreements when conducting the FCA Review, having regard to the fact that: (1) the Bank and the FCA had expressly agreed that third parties were to have no right to enforce the terms of the January 2012 Agreement whether under the 1999 Act "or otherwise", (2) the Bank and the FCA had included a confidentiality provision in clause 11 of the January 2012 Agreement so that, at the time the alleged contract was concluded in the summer of 2013, the claimant did not know the specification of the FCA Review which it now says that the Bank promised to observe, (3) the independent reviewer was appointed specifically to ensure compliance by the Bank with the specification of the FCA Review, and (4) the FCA also has the right to enforce compliance with the FCA Review and customers who are dissatisfied with the process can complain to the FCA.
Mr Allen further submits not only that there was no consideration for the alleged contract but also that the parties cannot have intended to create the legal relationship for which the claimant now contends. As Lord Clarke held in RTS Flexible Systems Ltd v Molkerei Alois Muller GMBH & Co. [2010] 1 WLR 753 at 45: "Whether there is a binding contract between the parties and, if so, upon what terms depends upon what they have agreed. It depends not upon their subjective state of mind, but upon a consideration of what was communicated between them by words or conduct, and whether that leads objectively to a conclusion that they intended to create legal relations and had agreed upon all the terms which they regarded or the law requires as essential for the formation of legally binding relations". Mr Allen points out that, where a contract is sought to be implied, the burden of proving that legal relations were intended rests on the party asserting the contract. By any objective assessment of the facts, Mr Allen says that the claimant stands no prospect of discharging that burden here.
Un-phased by these points, Mr Virgo insists that the contract claim crosses the arguability threshold. He accepts that the burden is on the claimant of proving that there was an intention to create legal relations: but contests that clause 9 or clause 11 of the June 2012 Agreement negate that intention. Neither of those provisions was in the public domain in the summer of 2013. The claimant knew only that the Bank had agreed with the FSA to conduct a FCA Review which covered the sale of the swap which it had entered into and which guaranteed the claimant compensation if a mis-sale was found. The claimant realised that there were likely to be principles governing the FCA Review because the Pilot Findings document published by the FSA in March 2013 (to which the Bank's letter of 17 July 2013 expressly drew attention) said so. The claimant knew from the Pilot Findings that the test of whether there had been a mis-sale was compliance with the regulatory requirements at the time of the sale. The claimant knew from the section of the Pilot Findings document entitled "Principles of redress" that there were principles of redress, but did not know precisely what those principles were, save that any redress was to be fair and reasonable and either full redress (if the customer would not have entered into any IRHP), alternative product redress (where the customer would have entered into a different IRHP) or no redress (where the customer would have entered into the same IRHP or has suffered no loss anyway). Specifically, the claimant was unaware that the Bank had agreed with the FSA that third parties should not be entitled to enforce the June 2012 Agreement. By contrast the Bank would or should have known that the claimant was ignorant of that fact when it wrote on 17 July 2013 to encourage the claimant to participate in the FCA Review process. That context is enough, submits Mr Virgo, for it to be more than merely arguable that, when the claimant agreed to engage in the process, the Bank undertook a binding obligation to conduct the FCA Review with reasonable care and skill and/or in accordance with the specification for the FCA Review that had been agreed with the FSA.
Mr Virgo submits that the effect of clause 9 was only to dis-apply the 1999 Act. It left untouched any other route by which customers with swap transactions subject to the FCA Review might argue that they had a right to enforce their entitlement to compensation in the FCA Review process. He points out that the Pilot Findings and clause 11 of the June 2012 Agreement itself are equivocal as to whether customers such as the claimant may have a private law right to enforce compliance with the FCA Review. The Pilot Findings document encouraged customer engagement in the FCA Review process. It explained, in Chapter 4, how the FCA Review would be conducted and, under the heading "Assessing compliance with regulatory requirements", included the following statement: "If a customer is dissatisfied with the outcome of the review, they may have recourse to the Financial Ombudsman Service where they are eligible. Other customers may be able to take action through the courts". Clause 11 of the June 2012 Agreement stated that: "The terms of this Agreement are confidential between the Parties and their legal advisers and shall not be disclosed to any third party except as envisaged in this Agreement, to the extent required by law or to ensure, enable or enforce compliance with this Agreement. …". In Mr Virgo's submission, neither document rules out enforcement of the FCA Review by a customer who agrees to take part in it. Mr Virgo asks, rhetorically, whether it could seriously be contended that, if the claimant had stopped paying sums due under the swap and the Bank had sued for payment, the claimant would have been precluded from pleading, by way of a set-off defence, its right of redress under the FCA Review.
The duty in tort
The arguments for and against the imposition of a duty of care in tort run along similar lines. Mr Virgo recognises that the imposition of any such duty must satisfy the threefold "Caparo" test of proximity of relationship, foreseeability of harm and absence of any public policy reason for not recognising a duty of care, as well as the test for assumption of responsibility (see Henderson v Merrett Syndicates Ltd [1995] 2 AC 145) or the incremental approach (see BCCI (Overseas) Ltd (in liquidation) v Price Waterhouse No. 2 [1998] PNLR 564 at 583). He submits that, against the factual background I have described, there is a real prospect of establishing that the Bank owed the claimant a duty of care and skill in carrying out the FCA Review. He questions why the Bank would want to deny such a duty and disputes that clause 9 of the June 2012 Agreement is a sufficient ground for doing so or that the exclusion of the application of the 1999 Act contradicts the imposition of such a duty.
The White v Jones duty
White v Jones is the leading case in a line of "disappointed beneficiary" cases. In White v Jones, the House of Lords upheld the imposition of a duty of care on a firm of solicitors in favour of two intended beneficiaries of a Will which, through negligence, was not drawn up and executed before the death of the testator, but under which the beneficiaries each stood to receive a legacy of £9,000. Under the testator's extant Will, which took effect on his death, the beneficiaries in question (his two daughters) received no inheritance. The rationale for imposing the duty was to fill a lacuna in the law arising from the fact that the person with a valid right to claim against the solicitors for breach of contract or duty in tort (the testator) had suffered no loss, whereas the persons who had suffered the loss (the beneficiaries) had no obvious basis of claim. Lord Goff of Chieveley (at 265D-H) drew an analogy with cases of transferred loss, where damage is caused in the performance of a contract but the damage is suffered by someone not a party to the contract. He observed that the situation was similar but not the same in disappointed beneficiary cases. The difference in the latter cases is that the loss is never one which the testator will suffer because his estate will not be depleted by the amount of the bequest in his lifetime. But the lacuna of no remedy for the person who has suffered the loss exists in both instances. In White v Jones, a Hedley Byrne type of duty of care towards the beneficiaries was imposed on the solicitors in order to plug the gap and give the beneficiaries a remedy where otherwise there would have been none.
Mr Allen submits that White v Jones is distinguishable from the present case, because there is no gap which needs filling. Unlike the situation in White v Jones, where the contracting party (i.e. the testator) had died before the loss occurred, the FCA, both directly and through the independent reviewer, is able to enforce the terms of the June 2012 and January 2013 Agreements if they are not applied faithfully. The claimant also has remedies. It can complain to the FCA if it believes that the Agreements are not being followed. It can sue for damages in respect of the original sale of the swap, and has in fact done so. It may also be able to seek judicial review of decisions of the independent reviewer in the review process, if it believes that those decisions have failed properly to apply the specification for the FCA Review. In The Queen on the application of Holmcroft Properties Ltd [2015] EWHC 1888 (Admin), Kenneth Parker J gave permission to bring judicial review proceedings of just this kind, holding that it was arguable to the requisite standard under CPR 54 that customers participating in the FCA Review could challenge decisions taken by the "Skilled Person". In the circumstances, Mr Allen submits that there is no need for the claimant to be given a right in private law to enforce the terms of the Agreements between the FSA and the Bank. According to Mr Allen, the imposition of a duty of care on the Bank in the circumstances of this and other swaps mis-selling cases would involve an "unacceptable circumvention of established principles of the law of contract" of exactly the kind which Lord Goff deprecated in White v Jones at 268F.
In riposte, Mr Virgo points out that the fact that customers can complain to the FCA about the conduct of the FCA Review, and may even be able to challenge decisions of the independent reviewer, demonstrates that the FCA Review has conferred some legal rights on customers who participate in it. The question, he says, is whether the claimant is to be confined to a public law remedy or whether it is at least arguable that non- sophisticated customers have a private law right to complain about the way in which the FCA Review has been conducted.
Mr Virgo submits that allowing a private law right would not infringe the principle stated by Lord Diplock in O'Reilly v Mackman [1983] 2 AC 237 at 285 that "… it would …as a general rule be contrary to public policy, and as such an abuse of the process of the court, to permit a person seeking to establish that a decision of a public authority infringed rights to which he was entitled to protection under public law to proceed by way of an ordinary action and by this means to evade the provisions of Order 53 [now CPR Part 54] for the protection of such authorities". According to Mr Virgo, it would not infringe that principle for 2 reasons. The first is that it is by no means certain that the conduct of the independent reviewer or of the Bank in implementing the FCA Review is open to a public law challenge. There has yet to be a judgment on full argument in the Holmcroft Properties case. It could yet be decided that judicial review is not available. The second is that the principle in O'Reilly v Mackman is a general rule to which there are exceptions "… particularly where the invalidity of the decision arises as a collateral issue in a claim for infringement of a right of the plaintiff arising under private law …". Even if the applicant in the Holmcroft Properties case establishes the right to bring a public law challenge, any decision-making error in the implementation of the FCA Review in this or similar cases is arguably incidental to the breach of the duty owed to customers whose swaps transactions are the subject matter of the Review.
Mr Virgo cited, as an example of a case where public law and private law remedies co-existed side-by-side, the decision in Roy v Kensington and Chelsea Westminster Family Practitioner Committee [1992] 1 AC 624. Dr Roy issued a writ against the Westminster Family Practitioner Committee claiming payments to which he believed he was entitled, which the Committee had decided to withhold. The Committee failed in its attempt to have the claim struck out on the ground that the appropriate remedy was judicial review of the decision not to make the payments. Even though the House of Lords considered that Dr Roy's relationship with the Committee was probably not contractual, the rights he had acquired under the statutory terms of service in the NHS were private law rights on which he could sue, notwithstanding that the decision of the Committee was susceptible also of judicial review. Lord Bridge of Harwich, commenting on the principle in O'Reilly v Mackman at 628G-629A, held that, while it was important to uphold the principle, it needed to be confined within proper limits. He went on: "It is appropriate that an issue which depends exclusively on the existence of a purely public law right should be determined in judicial review proceedings and not otherwise. But where a litigant asserts his entitlement to a subsisting right in private law, whether by way of claim or defence, the circumstance that the existence and extent of the private right asserted may incidentally involve the examination of a public law issue cannot prevent the litigant from seeking to establish his right by action commenced by writ or originating summons, any more than it can prevent him from setting up his private law right in proceedings brought against him."
Mr Virgo further submitted that to accord a private law right of challenge to the claimant on the facts of the present case would not be a radical step since a customer who is a private person already has a statutory right of action under section 138D of the Financial Services and Markets Act 2000 ("FSMA") and could claim for breach of the Dispute Resolution Rules in the FCA Handbook if an Offer of Redress in the FCA Review was alleged not to be appropriate. The Dispute Resolution Rule to which Mr Virgo referred was DISP 1.4.1R[5]. Since this point was raised for the first time in argument and was one which Mr Allen had not anticipated, I allowed the Bank to serve a written submission in response to it before Mr Virgo served his reply submissions in writing. Mr Allen took issue with whether a complaint about the FCA Review would be a "complaint" as defined in the FCA Handbook, namely, "… any oral or written expression of dissatisfaction … from or on behalf of a person about the provision of, or failure to provide, a financial service or a redress determination …". It seems to me that Mr Virgo is arguably right in saying that a complaint about the mis-selling of a swap and the way in which the Bank had offered inadequate redress through the process of the Review is a complaint which could be made under DISP 1.4.1R, although I do not have to decide that point. Mr Allen's more fundamental objection was that, since the statutory right of action under section 138D is only available to private persons and not to corporate entities, the recognition of a right of action in the claimant in contract or in tort to enforce the FCA Review against the Bank would circumvent the policy underlying the restriction on claims under section 138D of FSMA. Mr Virgo's answer was that the FCA Review applies to all non-sophisticated customers regardless of whether they are or are not private persons and applies the same standards in determining compliance with the FCA Review. It would therefore be discriminatory if non-sophisticated customers who were private persons had a right of suit via section 138D, but non-sophisticated customers who were not private persons had no right of suit at all.
Conclusion
I have come to the clear conclusion that I should refuse permission to introduce the new claim in contract but permit the proposed amendments for a claim in tort. The former I regard as unsustainable. The latter raises issues which in my judgment are more than merely arguable. I also think that there is some other compelling reason why the new tort claims should be considered at a trial. My reasons in summary are the following.
The claim in contract faces an insuperable hurdle of lack of consideration. The Bank made it clear that it was going to include the claimant's swap in the process of the Review, whether or not the claimant engaged with the Fact Find. There was, as Mr Allen submits, no conditionality. The Bank did not promise to conduct a review of the sale of the claimant's swap in accordance with the specification of the FCA Review if the claimant agreed to supply information to Eversheds. The most that can be extracted from the exchanges relied upon is that the Bank promised the claimant that if it participated in the Fact Find the Bank would take into account, when conducting the FCA Review, any information which the claimant supplied to Eversheds. There is no evidence that the Bank did not do so. The claimant does not complain that the information it provided was not considered. The complaint is that the Bank failed to conduct the FCA Review in accordance with the specification agreed in the June 2012 and January 2013 Agreements. Although want of consideration is often a weak argument in the law of contract, that is not so where the contract terms which are sought to be enforced are ones which have been agreed between the counterparty and a third party because, in that situation, the premise is that the counterparty is already bound to perform his side of the alleged bargain. I do not think that there is a real prospect of the claimant successfully arguing that a contract can be implied from the conduct I have described in paragraphs 14 and 15 of this judgment.
The new claims in tort raise different considerations. Like the contract claim, they raise issues of mixed fact and law: but the factual matrix relevant to whether a duty of care should be imposed is broader. Mr Gordon QC (for the applicant) emphasised the significance of the factual and legal matrix in the Holmcroft Properties case and my reading of the judgment of Kenneth Parker J is that he accepted this part of Mr Gordon's argument. I cannot be confident that all the relevant facts are known and have been deployed at this early stage of the claimant's action. As Mummery LJ said in Doncaster Pharmaceuticals at para. 18: "In my judgment, the court should also hesitate about making a final decision without a trial where, even though there is no obvious conflict of fact at the time of the application, reasonable grounds exist for believing that a fuller investigation into the facts of the case would add to or alter the evidence available to a trial judge and so affect the outcome of the case."
The fact that there may be public law remedies with which to challenge the way in which the FCA Review has been implemented is not necessarily a bar to a private law duty of care being owed. In any case, it has yet to be decided whether public law remedies are available. If they are not, the case for implying a duty on the banks towards customers who swaps sales are being reviewed is arguably stronger. Nor, in my judgment, is the fact that the claimant can sue for the original mis-selling a sufficient answer to the proposed new claims in tort. The FCA Review was intended to provide a route to fair and reasonable compensation without customers having to sue for mis-selling. Those who stayed their hand and have not sued for the mis-sale in the hope of deriving a satisfactory result from the FCA Review process, but now allege that the specification of the FCA Review has not been faithfully applied, may be left without any remedy if they did not agree a standstill or moratorium with the bank which sold the swap and the mis-selling claim has since become statute-barred. Whilst that is not this case, it is a relevant consideration because it is part of the wider landscape in which the Court will have to assess whether the banks should owe a duty of care to customers in their conduct of the FCA Review.
I think that Mr Virgo is arguably right in saying that the fact that a customer who is a private person may have a statutory right of action under section 138D of FSMA to claim for a breach of DISP 1.4.1R if the specification of the FCA Review has not been applied militates in favour of allowing a private law right of action for corporate customers in circumstances where the FCA Review does not distinguish between non- sophisticated customers who are individuals or corporate entities. There is otherwise a gap in remedy for which the rationale of according statutory rights of suit under section 138D to individuals only does not cater.
I am also not persuaded that the approach in White v Jones has no potential application in the present case because the FCA can enforce compliance with the principles of the FCA Review through the independent reviewer. The fact remains that the FCA will suffer no loss if the Bank falls short in implementing the specification of the FCA Review. The loss will lie with the customer for whose benefit (in the broad sense) the FCA Review was instituted. Furthermore, the case for the implication of a duty along White v Jones principles will be the stronger, if it is ultimately held that the conduct of the independent reviewer is not susceptible of judicial review.
I am concerned at this juncture only with whether the proposed new claims are sufficiently arguable for the amendment to introduce them to be allowed so that they can be pursued to trial. For the reasons I have given I do not consider that the claim based on an implied contract crosses the required threshold: but the claims in tort do.
This conclusion is in my judgment fortified by the fact that the question whether (and if so what) private law remedies accrue to customers who have participated in the FCA Review is a question of some public importance. It is one that affects a number of swaps claims in which an unacceptable Offer of Redress is alleged to have been made. Whilst in my judgment it is not possible to imply a binding contract between the claimant and the Bank on the facts of this case, there is a compelling reason why the new claims in tort should be permitted to go forward to trial. A trial in the present case is inevitable on the original mis-selling claim, assuming there is no compromise. The new and alternative bases of claim in tort arise in a factual matrix which is likely to prove to be the same or very similar to that in other cases. Thus, in my view, the tort claims merit argument at the trial, rather than being throttled at birth by a refusal of permission to amend.
Note 1 The FSA was replaced on 1 April 2013 by the Financial Conduct Authority and the Prudential Regulation Authority. The role performed by the FSA in relation to the review passed to the FCA, hence it has come to be known as “the FCA Review” [Back]
Note 2 A generic copy was also made publically available following a hearing of the House of Commons Treasury Select Committee on or about 12 February 2015 [Back]
Note 3 Eversheds LLP is the firm of solicitors which the Bank has retained to assist it in conducting the review. [Back]
Note 4 The independent reviewer is the “Skilled Person” defined in the Undertaking given by the Bank under the June 2012 Agreement as “… an independent third party, approved by the FSA, who will report to the FSA under section 166 of the Financial Services and Markets Act 2000 on the [Bank’s] conduct of the review”. KPMG was the independent reviewer in this case. [Back]
Note 5 5 DISP 1.4.1R provides: “Once a complaint has been received by a respondent, it must (1) investigate the complaint competently, diligently and impartially, obtaining additional information as necessary, (2) assess fairly, consistently and promptly (a) the subject matter of the complaint; (b) whether the complaint should be upheld; (c) what remedial action or redress (or both) may be appropriate; (d) if appropriate, whether it has reasonable grounds to be satisfied that another respondent may be solely or jointly responsible for the matter alleged in the complaint taking into account all relevant factors; (3) offer redress or remedial action when it decides this is appropriate; (4) explain to the complainant promptly and, in a way that is fair, clear and not misleading, its assessment of the complaint, its decision on it, and any offer of remedial action or redress; and (5) comply promptly with any offer of remedial action or redress accepted by the complainant.” [Back]
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Mr Justice Green :
A. Introduction, issues and conclusions
There is before the Court an appeal brought by Swiss Life AG ("Swiss Life") from the decision of Deputy Master Eyre of 16th December 2014 striking out the Appellant's claim and giving summary judgment to the Defendant Mr Moses Kraus ("Mr Kraus"). The claim by Swiss Life was to enforce the costs component of a Default Judgment made on 13th December 2013 by the US District Court (Southern District of New York) ("the Default Judgment"). As I explain more fully below the costs claim amounts to c. $1.5m; however the underlying damages award amounts to c. $150m. The judgment (as to both damages and costs) was made in favour of Swiss Life in respect of a Third Party Claim against Mr Kraus and a Lichtenstein company, Caruso AG ("Caruso") under (inter alia) the Racketeer Influenced and Corrupt Organisation Act ("RICO"). I refer to these proceedings in this judgment as the "Third Party proceedings". The appeal by Swiss Life against the refusal to enforce the Default Judgment is brought with the permission of the Deputy Master by Order dated 18th December 2014[1]. In determining this appeal I am considering whether the Deputy Master wrongly concluded that the summary judgment test was met. There is no need to set out in any details the law relating to the test to be applied by this court on an appeal from such a judgment. For the reasons I set out below I am satisfied that the Deputy Master clearly erred and should not have granted summary judgment. The Deputy Judge did not address himself to the law on the issue of the "real plaintiff". He did not therefore address the relevant facts. There are serious issues to be tried upon which Swiss Life has a proper case to advance.
The Default Judgment relates to the allegedly unlawful conduct of (inter alia) Mr Kraus in the context of a range of proceedings in the US, Switzerland and Israel in which it is said by Swiss Life that Mr Kraus acted unlawfully and wrongly and also in contravention of RICO. One part, but only one part, of that conduct concerns a law suit commenced in New York against Swiss Life by various plaintiffs who are said to be nominees or ciphers of Mr Kraus. I describe this action below where it is referred to as the "Main Action". In the Default Judgment an order was made for the damages to be quantified in the future at an "inquest". The damages were also to be subjected to a trebling pursuant to the penal provisions of RICO. Swiss Life was also awarded its costs. As I understand matters the award of costs was made pursuant to express statutory provision in RICO; costs are not (unlike in this jurisdiction) normally awarded in ordinary litigation.
It is also important to record at the outset that the costs and the damages were awarded for conduct which went beyond the facts of the Main Action. There is however no break down of either the damages or the costs in the New York proceedings so that it is not stated how much is to be allocated to each of the various objected to acts which are the subject matter of the Third Party proceedings.
Swiss life has now brought proceedings to enforce the costs element of the Default Judgment; this is notwithstanding that (albeit subsequent to the commencement of this action) in August 2014 the quantification process occurred and Swiss Life now has an order that Mr Kraus pay trebled damages of in excess of $150,000,000. Mr Kraus applied to the Deputy Master for summary judgment and/or to strike out the costs enforcement proceedings because he had not, he contended, submitted to the jurisdiction of the US courts in either the Main Action, or, the Third Party proceedings and the Default Judgment in the Third party proceedings was therefore not enforceable in England & Wales in the High Court. The Deputy Master agreed. Hence this appeal.
The issues arising on the appeal can be summarised as follows.
First, did Mr Kraus submit to jurisdiction in the Main Action by reason of his actions in initiating and controlling the Main Action via the named (nominal) plaintiffs (the real plaintiff point)?
Secondly, if Mr Kraus can be said to have submitted to jurisdiction in relation to the Main Action did he thereby submit to the jurisdiction in relation to the Third Party proceedings given that they, at least in some measure, relate to the conduct which is the subject matter of the Main Action (the related action point)?
Thirdly, did Mr Kraus submit to jurisdiction in the Third Party proceedings because of a letter that he wrote to the Judge on 22nd January 2013 in the context of those Third Party proceedings (the 22nd January 2013 letter point)?
Fourthly, even if Mr Kraus can be said prima facie to have submitted to the jurisdiction of the New York Courts in relation to the Third Party proceedings does he has available to him other defences which can be said now to be so compelling as to justify upholding the Deputy Master? Three possible defences arise:
Abuse of process: Because it is an abuse to seek to recover costs when the intention is, when the costs enforcement proceedings are successful, thereafter to seek to recover the damages element of the same Default Judgment (the abuse of process point);
Non-severability: Because the costs claim covers matter which go well beyond the matters relied upon in the Main Action and the Court cannot enforce such collateral matters and where the recoverable and non-recoverable costs elements are non-severable, leading to refusal to enforce the whole claim.
High Court no power to entertain claim under Protection of Trading Interest Act 1980: Because the Court has no power to entertain an action such as the present because it is a claim under a judgment which includes penal treble damages objectionable either under common law as a foreign penalty or because the courts are statutorily barred from entertaining such a claim pursuant to section 5 Protection of Trading Interest Act 1980 ("PTIA 1980").
In relation to the PTIA 1980 it has long been assumed that the judicial practice of awarding treble damages (objectionable and egregious to English eyes) was a device dreamt up by US lawyers in the context of antitrust (pace Section 4, Clayton Act 1914) and then extended to other areas of public policy, such as RICO. However, its origins lie, in actual fact, in this jurisdiction in the Statute of Monopolies of 1624 which prohibited the granting of royal monopolies and held them to be void. It also introduced a right to treble damages for those who were "hindered, grieved or disturbed" by any monopoly or letters patent. The Protection of Trading Interests Act 1980 (PTIA 1980) has seen English law come full circle. In 1624 treble damages were vogue; by 1980 they were rogue.
In relation to these issues I have to decide, in effect, whether Swiss Life has an arguable case to go to trial. I have decided that it does. In particular:
i) I conclude that it has an arguable case that Mr Kraus was the "real plaintiff" in the Main Action. On the basis of the case law as it stands it is properly arguable that a person who uses ciphers or nominees to act on his behalf in foreign litigation can be said properly to submit to the jurisdiction of that foreign court, in effect, through the nominees or ciphers.
ii) I also conclude that it is arguable that in acting as the "real plaintiff" Mr Kraus not only submitted to the jurisdiction of the US courts in the Main Action but that the Third Party proceedings are "related", at least in part.
iii) I have also indentified in this judgment defences which Mr Klaus has alluded to. But none are so clear cut that they can justify refusing the appeal. They will have to be tried.
iv) Finally, I have decided that in one respect the Deputy Master was correct in rejecting submission to jurisdiction upon the basis of the letter of 22nd January 2013. In my judgment this is not arguable as a basis for jurisdiction.
v) The net effect however is that the appeal must be allowed.
B. Summary of relevant facts
(a) The "Main Action"
The origins of this appeal lie in proceedings brought against Swiss Life by various plaintiffs alleging breach of contract arising out of various endowment policies and loans issued by Swiss Life.
The plaintiffs in the Main Action were members of the Chassidic Jewish communities in New York State who resided or used to reside in Brooklyn, New York. In this judgment I refer to them as the "Moskovitz Plaintiffs". Between 1988 and 1995 Swiss Life sold "mixed life" or endowment insurance policies on the life or marriage of a child (the "Marriage Policies") through a number of authorised brokers and representatives. Mr Kraus, a resident of London, was an insurance broker affiliated with Caruso, an authorised broker, who also had an affiliation with another brokerage firm, Bituswiss SA ("Bituswiss"). It was alleged that Mr Kraus signed an agreement between Caruso and Swiss Life permitting him to sell the Marriage Policies in New York. These policies paid benefits to the named beneficiary, a child of the policy purchaser, when the beneficiary died, married, or reached a certain age without marrying. The policy holders paid annual premiums and earned dividends on the Marriage Policies and could borrow against them after a specified period of time. It was alleged that, in soliciting broker arrangements with Swiss Life to sell these policies, Mr Kraus, and others, misrepresented to Swiss Life the marriage rates and ages of the targeted Chassidic communities. This caused Swiss Life to base the Marriage Policy premiums upon the allegedly misrepresented rates and ages. However, in due course, the children married at far earlier ages than projected and the policy holders paid, commensurately, in the region of 5 fewer annual premiums than Swiss Life had anticipated and planned for and the policy holders thereby reaped a very favourable rate of return. Upon this basis the brokers, including Mr Kraus, were able to sell many thousands of such policies to the Chassidic communities. Swiss Life sustained, it is alleged, substantial losses as a result of these policies but the brokers benefited significantly because of commissions earned upon every policy sold.
Swiss Life has submitted that in fact Mr Kraus paid all or most of the premiums on behalf of the policy holders. It is said that Mr Kraus solicited the sales of the policies by placing advertisements in newspapers circulating in the Chassidic communities offering that the brokers would pay the premiums upon the policies. The brokers stated that the policy holders would not receive the policy benefits, but would receive a sum of money upon the marriage of the named child in exchange for the use of the policy holder's names.
Swiss Life ceased issuing new policies in 1995 when it discovered what it considered to be the alleged misrepresentations and sought to take steps to stem losses flowing from existing policies.
The Moskovitz plaintiffs in the Main Action however contended that this conduct amounted to a breach of contract. They contended that Swiss Life acted in breach of contract by, inter alia: backdating policy start dates to cause accelerated premium payment due dates; backdating premium due dates in order to charge late interests; levying penalties by wrongfully claiming that marriages occurred prior to the child's 19th birthday; failing to prorate early marriage deductions by monthly rather than full-year increments; and, requiring unnecessary and illegal documentation for proof of marriage.
The Moskovitz plaintiffs sought to pursue a class action in New York against Swiss Life. They contended that they were suitable to act as representatives for the class. Their application was (says Swiss Life) masterminded by Mr Kraus. Had this strategy prevailed then the damages action against Swiss Life could have been very significant indeed. The application however failed as did the Main Action itself. Swiss Life then brought a Third Party complaint against Mr Kraus and Caruso alleging actionable misrepresentation, fraud and they also brought a claim under RICO for bribery and extortion. I set out the details of this below.
(b) Who was the "real" Plaintiff in the Main Action?
It is Swiss Life's case that notwithstanding the existence of the Moskovitz plaintiffs in the Main Action the "real" plaintiff in that action was Mr Kraus. Accordingly all of the substantive procedural steps taken in the name of the Moskovitz plaintiffs were in fact attributable to Mr Kraus and demonstrate plain and obvious submission to jurisdiction in the Main Action. The Claimant has drawn my attention to evidence intended to show that Mr Kraus was, in pith and substance, the real plaintiff and that the Moskovitz plaintiffs were mere nominees or ciphers for him. During the hearing I was referred to a substantial body of documentary evidence to demonstrate the closeness of Mr Kraus to the conduct of the litigation. Since the oral hearing I have carefully reviewed the extensive file of evidence upon this issue. This provides evidence of: Mr Kraus instructing US attorneys to act on behalf of the Moskovitz Plaintiff; the frequency and intensity of the instructions given to those attorneys by Mr Kraus in relation to all aspects of the Main Action spanning big issues of strategy right through to the minutiae of negotiations with lawyers for Swiss Life over procedural matters and the preparation of evidence; the payment of attorneys' fees by Mr Kraus and later Caruso (who Swiss Life submits is controlled by Mr Kraus); and the detailed involvement of Mr Kraus in settlement discussions with Swiss Life whereby it is submitted Mr Kraus hoped personally to benefit.
Further, the Claimant has adduced the deposition evidence of seven out of the eight named Moskovitz plaintiffs. They described the role of Mr Kraus in funding, organising and instructing the attorneys acting for them. These depositions were given in connection with the plaintiffs' application for certification that they were suitable representatives of classes of policy holders in bringing representative action. Class certification was rejected by the New York Court in 2002 on account of the Moskovitz plaintiffs failing to satisfy the statutory requirements for acting as representatives of a class. Judge Yanthis (a Federal Magistrate Judge performing a similar role to that of a High Court Master) in his Report and Recommendation dated 31st March 2011 summarised the position of the plaintiff/deponents in relation to the Main Action in the following way:
"Although this action was first filed in 2005, none of the named plaintiffs were aware of the litigation until shortly before their respective depositions in May and June of 2009…None of them are paying for an attorney or know the fee arrangements for the attorney.
[Plaintiffs] Malka, Sarah, Berl, and Victor did not authorise or seek an attorney to bring a lawsuit in their names…Malka only spoke with an attorney once in connection with her deposition…Sarah first spoke to an attorney three to four weeks prior to her deposition…Berl only spoke to an attorney twice: the day before and the day of his deposition…Moshe first spoke to an attorney one day before his deposition, and only learned he had an attorney a few days before that…Israel first spoke to an attorney a couple of weeks before his deposition…Joseph first spoke to an attorney a few days prior to his deposition…Sarah believes that she does not need to know everything about the litigation and has no familiarity with it other than what she learned at her deposition…an attorney told Israel that he does not need to know everything about the lawsuit…neither Israel nor Joseph recognise the Class Action Complaint or Amended Complaint…Victor did not understand what the documents filed in the action meant, and his son, Berl, did not even know he had a Marriage Policy until four months prior to his deposition…Neither Moshe nor Victor know who makes decisions regarding litigation…Neither Moshe nor Joseph know the former or present filing attorneys.
In addition, Sarah, Berl, Victor, and Moshe do not understand the responsibilities of a Class representative…Moreover, Malka, Sarah, Berl and Moshe do not know the details of their Marriage Policy or loan(s) to sufficiently describe or be aware of their claims, and thus whether said claims are typical to another Class member…Finally, Joseph does not know who decided to file a Class Action…
This testimony demonstrates that the action was filed without plaintiffs' authorisation and knowledge, they only learned of the lawsuit shortly before their respective depositions, and most do not know who is financing the litigation or who makes the decisions. Their lack of knowledge of the litigation is not simply a matter of ignorance. None of the plaintiffs stayed abreast of the litigation and there is a stark lack of substantive discussion with their attorneys. As such, the plaintiffs are not adequate class representatives".
It is not necessary for the purpose of this judgment to set out all of the specific items of evidence which have been placed before this Court upon this issue. However, in order to give a flavour of that evidence I set out below a few illustrations.
First, it is recorded in the Report and Recommendation of Judge Yanthis (ibid.) that Mr Kraus admitted that he had extensive involvement between May 2005 and January 2006, through the internet, emails and telephone calls to New York in finding counsel for the current policy holders in the present action (ibid. page [13]).
Secondly, it is also evident from documents before the Court that Mr Kraus was at various points involved with Swiss Life in settlement negotiations vis-à-vis the Main Action and that he contemplated that he would receive, into his own hands, a benefit therefrom. For instance, in an email of 21st November 2006 from Mr Kraus to a Dr Vogel the following is stated:
"Dear Dr Vogel, attached please find a paper by the US Attorney with reference to the proposal transmitted to you today.
Besides this option, there is also another possible option, as follows:
SL does not pay anything today, but everyone withdraws everything, including the US complaint. SL then deposits the entire amount to a frozen account, to be paid out later as desired by SL, under the condition that there will be no new legal cases appearing from this point forward. At the latest, ten years after the last policy has been paid.
Please note: The entire amount in the frozen account is to be invested in Swiss Life stock. The dividends are payable on a regular basis, to me".
Thirdly, in relation to the giving of instructions, it is clear from itemised fee notes prepared by the attorneys acting for the Moskovitz plaintiffs that they were receiving detailed instructions about the litigation on a frequent basis from Mr Kraus and, it would appear, no one else. Emails between Mr Kraus and the attorneys evidence negotiations over fees and levels thereof and an acceptance of responsibility on the part of Mr Kraus for the satisfaction of fee invoices. It appears that at some point in time in or around 2009 fee notes were being sent to Mr Kraus and to Caruso. I have already recorded that it is the case of Swiss Life that Mr Kraus, in effect, controls Caruso. Mr Croxford QC, for Swiss Life, drew my attention to one illustrative email of 28th July 2008 from the US attorney to Mr Kraus in which the following is recorded:
"Finally, we consider you one of our best clients. You know the litigation details and you know strategy. Moreover, you have always paid our bills conscientiously and quickly. I would appreciate your attention to bill outstanding now…".
It is clear from the extensive emails passing between Mr Kraus and the US attorneys that Mr Kraus was closely involved in all aspects of the litigation which included, inter alia: advising on overall policy; the review of evidence and pleadings; the detailed drafting and finalisation of statements and other evidence; and, the detailed conduct of negotiations with lawyers representing Swiss Life. There is no evidence that Mr Kraus obtained instructions from third parties before expressing his own opinions or giving instructions to the US attorneys.
Fourthly, evidence before the Court shows that Mr Kraus adopted a sophisticated view of the "risk/reward" ratio in the litigation. This level of sophistication extended to an appreciation of the risks of Default Judgments being obtained from the New York Courts and thereafter being the subject of enforcement proceedings extra-territorially. For example, in an email of 3rd June 2008 from Mr Kraus to the US attorneys he sets out, in detail, his views on jurisdictional issues. At the start of the email Mr Kraus states as follows:
"2. New matters have been brought to my attention, which may change the initial planned tactic of filing a "motion to dismiss for lack of jurisdiction".
1. In the agency contract, which forms the basis of any indemnity claim, there is a jurisdiction exclusion clause, which excludes anything else than Lausanne.
2. In the unlikely case that I litigate the jurisdiction issue in the USA and lose, UK Courts will enforce US Rulings; but if I do not appear at all, then the UK Courts will look at the Jurisdiction issue before enforcing, I can bring jurisdiction defences here in the UK later, and they will be heard (but only if I have not tried already in the USA).
Things progress nicely here in the various European litigations, settlements may be forthcoming sooner or later".
Later in the same email the following is stated:
"Please, think it through. Please, let me have your thoughts on the Risk/Reward ration of my intention. Be aware that I have no enforceable assets in the United States or in Switzerland, and my assets in UK can move away from name within due course. So, I am actually quite judgment-proof. So, why risking $150,000 just [to] (sic) defend an unlikely and far-fetched potential judgment? I want rather to spend $300,000 on attacking LS's to make them pay the class. Time is running, please consider and comment".
The above illustrations serve to provide a flavour of the degree of control over the Main Action maintained by Mr Kraus. I return to the inferences in law that may be drawn from this later in this judgment.
(c) The Third Party proceedings
The present litigation arises out of the Third Party proceedings. The facts that I have described in relation to the Main Action are relevant context thereto. I turn now to consider, again briefly, the procedural history of the Third Party proceedings brought by Swiss Life against Mr Kraus. The Third Party complaint was commenced on 17th March 2008 by the filing of a Third Party Summons and Complaint in the New York Court. Paragraph [23ff] of the Third Party proceedings set out the factual basis of the claims. It was alleged that Mr Kraus, inter alia, had informed Swiss Life that he, and other brokers, planned to market the Marriage Policies to the Jewish population at large. Statistics about marriage rates and ages of the Jewish population were said by Mr Kraus and others to be consistent with statistics of marriage rates and ages of the Swiss population. However, it was pleaded that in fact the marriage rates and ages of the Chassidic community are different to those of the Swiss or Jewish populations generally. It was alleged that the brokers, including Mr Kraus, in fact knew that the average marriage age of members of the Chassidic community was approximately 19 years which was far lower than that of the Swiss or Jewish population generally. When Swiss Life began to uncover the fraud in 1995 it immediately ceased the sale of new policies but continued paying the benefits on existing policies. It is said that the information provided to Swiss Life to induce it to offer the policies amounted to misrepresentation and led to substantial losses of up to 300 million Swiss Francs being incurred.
In paragraph [67] of the Third Party proceedings the following is alleged:
"67. Upon information and belief, the brokers, including Kraus and Caruso, paid the premiums on behalf of policy holders of Marriage Policies in exchange for the right to collect the benefit of the Marriage Policies. The Brokers never informed [Swiss Life] that, in many cases, they were the true party of interest".
In paragraphs [69ff] it is alleged that Mr Kraus used the threat of litigation and actual litigation to attempt to extort Swiss Life. Particulars of extortion and bribery are set out in paragraphs [70ff]. These include allegations that Mr Kraus offered to provide favourable testimony for Swiss Life in other, similar, litigation if he were compensated. It is pleaded that:
"In the context of demands by Kraus that [Swiss Life] make payments to him, he advised [Swiss Life] executives that he could influence the jury in [other litigation] depending upon how he chose to testify. He also said that he had, in his possession, documents which could similarly sway the jury".
It is then alleged that because Swiss Life refused to make the payments sought Mr Kraus planned to testify for the Plaintiffs in this other litigation. Paragraph [78] of the Third Party proceedings refers to a "silent solution", as follows:
"78. Kraus and Caruso's numerous extortionate acts relating to the policyholder lawsuits include:
a. On or about August 31, 2006, Kraus met with a representative of Swiss Life at the Geneva airport. Kraus presented himself as a representative for Caruso and for the policyholders. At the meeting, he threatened to file yet more lawsuits against Swiss Life in Switzerland (Zurich and Lausanne). He threatened to block any formal class action settlement of Moskovitz unless Swiss Life made payments to him of CHF 1,000 per policyholder per policyholder involved. (As the class is comprised of approximately 10,000 policyholders, Kraus effectively demanded a personal payment of approximately CHF 10,000,000 to permit Swiss Life to settle its claims with the policyholders).
b. At this same meeting, Kraus proposed a settlement which he called the "silent solution." Under the "silent solution," Swiss Life would make a payment directly to Kraus and Caruso. In exchange, Kraus promised to withdraw all policyholder lawsuits, including Moskovitz, and block other policyholders from asserting claims against Swiss Life in 1he future. The principal draw of the "silent solution," as proposed by Kraus, was that it would cost Swiss Life approximately CHF 10,000,000 less than the class settlement, even after factoring in Kraus's demand of CHF 1,000 per class member to allow a class settlement.
c. Kraus and Caruso have repeated the class settlement threat and "silent solution" proposals numerous times and have made countless threats to file additional lawsuits in the name of policyholders against Swiss Life if they were not compensated.
d. For example, on or about December 15, 2006, Kraus sent Swiss Life several written settlement demands. Following up on the "silent solution," two of the settlement demands did not provide for any payment directly to the policyholders, but instead provided for payment only to Kraus and Caruso. In exchange for the payments to Kraus and Caruso, they would cause all lawsuits brought against Swiss Life by the policyholders to be withdrawn and prevent future lawsuits by policyholders. The settlement demands made clear that Kraus and Caruso would be entitled to distribute payments made by La Suisse in their absolute discretion without any oversight, including keeping the payments themselves.
e. In another follow up to the "silent solution," Kraus suggested, on or about June 13, 2007, in a telephone call with a Swiss Life representative, that he could easily cause Moskovitz to be withdrawn if Swiss Life would quickly enter into a "quiet" settlement that avoided disclosure to all class members. He also threatened that the cost to Swiss Life of any settlement would increase if Swiss Life failed to accede to his demands because, according to Kraus, the dispute would be publicized and more class members would learn of the litigation and demand a part of such a settlement.
f. Kraus threatened to finance and bring a class action on behalf of the policyholders in Israel, similar to Moskovitz, if Swiss Life did not make payments directly to him. On or about December 29, 2006, he sent a draft of that complaint, which was never filed, to attorneys for Swiss Life.
g. On February 18, 2008, Kraus, in a telephone call to a Swiss Life representative, repeated his threats. Kraus, once again, implied that he would cause Moskovitz, and other litigations against Swiss Life, to be withdrawn if Swiss Life made direct payments to him".
(d) The letter of 22nd January 2013
Very little seemingly happened in the Third Party proceedings for some years. Problems occurred in relation to service outside of the US. A significant document in respect of the present appeal is a letter sent on 22nd January 2013 by Mr Kraus to Judge Yanthis who was at the time responsible for the docket relating to the Third Party proceedings. This letter is important because it is submitted, by Swiss Life, that it amounts to voluntary submission to the jurisdiction of the New York Court. I now set it out in full:
"Dear Judge Yanthis:
I have been served a third-party complaint in April 2008 at the above address which is my correct domicile. On 24 December 2012, when my entire family was away, FEDEX has left at the above address a "sorry we missed you" card for a parcel #794376774051. When Mrs Malka Kraus returned on 31st December, she told me about the attempted delivery. I called FEDEX and informed them that I will come back on 21st January 2013. I asked them to deliver it again on 22nd.
On 2nd January, the courier came again. Mrs Malka Kraus informed him again that Moses Kraus is abroad and comes back on 21st, and that he must deliver on 22nd.
I came back. We had no delivery, so I called FEDEX. FEDEX informed me that it is recorded in their computer file that they had scheduled the parcel to be re-delivered today the 22nd, but that meanwhile the shipper from New York called them on 7th January and was informed that the parcel is with FEDEX London to be delivered on 22nd. The shipper thereupon explicitly instructed FEDEX to return the parcel immediately to the sender.
Meanwhile I received with regular mail a copy of a letter from Becker-Glyn to your Honor, dated 8th January 2013, mentioning a declaration of a Jesse T Conan, stating that I had made an attempt to avoid receipt of said documents. That declaration is knowingly false. Becker-Glynn as the shipper of said documents know that the fact is exactly the opposite: They have been informed by FEDEX that I have made sure that I will get the shipment as soon as I return, whereupon Becker-Glynn have made certain that the shipment returns undelivered I demand that they return my shipment to me, so that I can react or reply.
Whilst I write to you, I use the opportunity to state the true facts. All the allegations in the Third-Party complaints are completely untrue. I am confident that your Honor will notice so when you are checking their allegations in detail. Your Honor will recognize that all their allegations are confused, unspecified and constructed without factual basis. Moreover, they confuse myself with Caruso, of whom I was never a director or owner or employee. They mix figures and numbers and actions of other independent entities like of Bituswiss and Horowitz and Beck and Caruso and of a Moses Kraus of Monsey who has no relation to me whatsoever (Document 22. ¶12 - ¶50). When your Honor will look at their exhibit to ¶48 you see the Monsey fax stamp from that different Moses Kraus. Swiss Life has deliberately burdened the third-party complaint with so many unrelated parties and persons that it became so unspecified and so confusingly mixed, that it can hardly be defended or relied upon. I ask your Honor to direct the Third-Party claimant to narrow down their allegations towards me to concentrate it on what they want to allege my person with.
Respectfully submitted".
It appears that this letter had the effect of stirring the New York Court into action. An Amended Memorandum Order ("the Memorandum") was prepared by Judge McMahon on 25th November 2013. This was an internal document prepared by Judge McMahon upon the action being assigned to her. She records that the action: "…has lingered for some years on the dockets of two District Judges and a Magistrate Judge who are no longer sitting on the Court. This Court was asked to take over the matter based on my familiarity with the underlying facts and the need for expedition in view of the extraordinary - and unfortunate – delays in dealing with open issues in this case".
She explained that the letter from Mr Kraus had been sent in response to an application by Swiss Life for default judgment against Mr Kraus and Caruso. She stated:
"In December 2012 [Swiss Life] moved for entry of a default judgment as against both defendants. Efforts to serve both defendants with the motion papers at the addresses where the summonses and complaints had been served were unsuccessful".
Prior to this matter being assigned to Judge McMahon the Judge dealing with the matter (Judge Yanthis) had concluded that service of the default judgment proceedings upon the defendants lacked proper process and it was his position at the time that the motion for default judgment against both defendants be dismissed. Judge McMahon, in the Memorandum, took a different view:
"Kraus, however, had actual notice of the default judgment papers. Indeed, only a month after the motion was made, Kraus sent an ex parte letter to Judge Yanthis on January 22, 2013, alleging that he was out of the country when Federal Express attempted to serve the default judgment papers. In that letter, he revealed that he had received by regular mail a letter dated January 8, 2013, from counsel for [Swiss Life], in which the defendant alleged that Kraus was attempting to evade service. Had that letter included a copy of the default judgment papers, there would be no question that service of the motion papers had been effected on him – and quite possibly on Caruso as well, since [Swiss Life] counsel alleges that Kraus controls Caruso and an affidavit filed by Kraus in this action confirms that Kraus is a minority shareholder in Caruso who has worked as an insurance broker at Caruso (albeit under a power of attorney rather than as an employee) from 1989 – 2000".
Judge McMahon proceeds to explain in the Memorandum that the letter of 22nd January 2013 had been retained on the Court file and had not been communicated to Swiss Life. They discovered its existence only when the document was docketed some nine months later.
It is clear from the Memorandum that Judge McMahon did not view this letter as constituting any sort of a response by Mr Kraus to the motion for default judgment and nor was it treated as being a step contemplated by procedural rules. She stated:
"I have reviewed the papers in support of the motion for a default judgment. As all asserted facts are deemed proved upon default, it is quite clear that [Swiss Life] will be entitled to entry of a default judgment unless Kraus has an acceptable explanation for his failure to file an answer during the last 20 months".
Later Judge McMahon stated:
"If Kraus' excuse for failing to file an answer to the Third Party Complaint is deemed inadequate, the motion for entry of a default judgment will be granted and judgment will be entered against him. Kraus should understand that he cannot cure the default by filing an answer now; only if the Court concludes that the has proffered an adequate excuse for his one and one half years of default will the Court permit him to file an answer".
As such, Judge McMahon treated Mr Kraus as remaining in default and not having answered the complaint. Mr Kraus was given until 5pm New York time on 10th December 2013 to file with the Court whatever explanation he could for his "…failure to file an answer to the complaint as previously stipulated and ordered". In response, Mr Kraus did nothing.
(e) The Default Judgment
Accordingly, on 13th December 2013 default judgment was entered in favour of Swiss Life. The preamble to the Judgment was in the following terms:
"The Third Party Complaint was commenced on March 17, 2008 by the filing of the Third Party Summons and Complaint. The Third Party Summons and Complaint was served on the defendants, Moses Kraus ("Kraus") and Caruso AG ("Caruso"), on or about March 20, 2008, by international mail at each defendant's primary UK address under Fed R Civ P 4 (f) and Article 10 of the Hague Convention on the Service Abroad of Judicial and Extra Judicial Documents in Civil or Commercial Matters. Proofs of Service were filed on or about April 17, 2008 (Clerk Certificates of Mailing Received). The defendants have not answered the Complaint, and the time for answering the Complaint has expired".
Thereafter, the Court declared and ordered, inter alia, that Mr Kraus participated in a racketeering scheme in repeated violation of US criminal statutes on extortion, mail and wire fraud and bribery under RICO. This entitled Swiss Life to treble damages as well as injunctive relief. The Court also ordered that Mr Kraus, and sub-brokers under his control, owed a duty to Swiss Life properly to explain and not misrepresent the terms of the Swiss Life insurance policies and to the extent that they intentionally misrepresented, exaggerated or failed to explain the policy terms that Swiss Life was entitled to indemnification. The Order also permanently enjoined Kraus from pursuing, directly or indirectly, litigation against Swiss Life in the US or abroad in limited respects relating to marriage policies.
For present purposes, paragraphs [4] – [6] of the Order are particularly relevant. They are in the following terms:
"(4) Swiss Life is awarded monetary damages against Kraus and Caruso, on a joint and several basis, in an amount to be fixed at inquest.
(5) Swiss Life is further entitled to a trebling of its monetary damages pursuant to 18 U.S.C. § 1964(c).
(6) Swiss Life is further awarded attorney's fees against Kraus and Caruso, on a joint and several basis, in the amount of 1,369,718.50 U.S. Dollars, plus costs and disbursements in the amount of 201,884.61 U.S. Dollars, all computed pursuant to 18 U.S.C. § 1964(c).".
As noted below Swiss Life commenced enforcement proceedings in relation to the costs element of this judgment in the High Court shortly thereafter in January 2014. The quantum of the Third Party proceedings was finally determined in the US on 6th August 2014. The Judgment in relation to quantification records that Mr Kraus had not answered the complaint and the time for answering the complaint had expired and that on 17th December 2014 the Court had issued a Default Judgment in which Mr Kraus was found to have participated in a racketeering scheme and which also recorded that the monetary damages payable to Swiss Life were to be "fixed at inquest". The quantification judgment concluded that the monetary damages suffered by Swiss Life for which Kraus and Caruso were liable on a joint and several basis amounted to $52,640,373.43 which total was then trebled leading to a total amount for which Kraus and Caruso were jointly and severally liable of $157,921,020.29.
(f) The enforcement proceedings
On 31st January 2014 Swiss Life commenced proceedings in the High Court against Mr Kraus in the sum of £955,063.210 together with costs in enforcement of the costs Order of the New York Court. This is a claim therefore only for the costs of the US Third Party proceedings. It is not a claim for the damages ordered to be paid (whether trebled or otherwise). As already set out the basis upon which the Order is sought to be enforced is said to be that Mr Kraus submitted to the jurisdiction of the US Court by virtue of the letter of 22nd January 2013. It is submitted additionally or in the alternative that Mr Kraus and Caruso submitted to the jurisdiction of the US Court in that at all material times Kraus and Caruso had been and continued to be the real plaintiffs in the Main Action and that the Third Party proceedings were sufficiently related to the Main Action to be a part thereof such that being subject to jurisdiction in the Main Action sufficed to found jurisdiction over the Third Party proceedings.
Mr Levey, counsel for Mr Kraus in respect of the written submissions, observed that the costs enforcement proceedings were a form of Trojan horse, to be followed by the damages components of the Default Judgment:
"By these proceedings (commenced on 31 January 2014), the Claimant is seeking to enforce the costs and disbursements element of the Default Judgment but, if successful, it will no doubt then seek to enforce the treble damages awards subsequently made in its favour (on 21 July 2014) in the sum of approximately US$150,000,000".
Mr Kraus complained that he was in effect to be subjected to multiple enforcement litigation in this jurisdiction arising out of a single US judgment. During the course of the oral hearing I asked why Swiss Life was pursuing simply the costs element of the Default Judgment. I was informed that as of the date of the claim for enforcement the quantum had not yet been fixed and that a quantum claim might follow which would strip out the treble damages component of the claim. Two legal issues were present in my mind. First, whether it was open to the Claimant to pursue a claim for costs if the underlying treble damages award was unenforceable in whole or part by virtue of Section 5 PTIA Act 1980. Secondly, whether it might, in principle, be an abuse of process to attempt to bring, subsequently and through new proceedings, a claim for substantive damages which could, and should, have been included or joined to the enforcement claim for costs: Henderson v Henderson (1843) 3 Hare 100; Johnson v Gore Wood (No 1) [2002] 2 AC 1. And possibly, if that was the intention of Swiss Life, whether it might be an abuse now to set in train a litigation strategy which had as its end purpose the pursuit through different pieces of litigation the enforcement of a single judgment.
(g) The judgment of Deputy Master Eyre
By an application dated 4th March 2014 Mr Kraus applied to strike out the claim and/or for summary judgment. This was upon the basis that the Default Judgment was not enforceable because he had, at no point in time, either appeared in New York or otherwise voluntarily submitted to jurisdiction. Further, even if he had this was only in relation to the Main Action and not in relation to the Third Party proceedings. The matter came before Deputy Master Eyre on 9th December 2014 and he granted summary judgment to Mr Kraus. In paragraphs [16] – [20] of his ruling the Deputy Master stated as follows of the argument about the letter of 22nd January 2013:
"16. On 22/01/13, the Defendant sent the New York court the letter on which the Claimant now relies.
17. In it:
(a) He complains that the suggestion that he was evading service was "knowingly false."
(b) He "demands" that the Claimant re-send him the application.
(c) He protests that the allegations in the 3rd Party proceedings "are completely untrue."
(d) He asks the New York court "to direct the Third-party claimant to narrow down their allegations."
(e) He concludes the letter with the words "Respectfully submitted."
18. The Claimant insists that these expressions are consistent only with a submission by the Defendant to the jurisdiction of the New York court.
19. However, that is to disregard the circumstances in which the letter was written. The letter was provoked by what the Defendant (who by the way was now acting in person) considered an allegation of bad faith by him. It is quite impossible to say that what he wrote was "only necessary or useful" if he had abandoned his objection to the New York jurisdiction. Even his request at (d) gives no indication of whether he proposed to do anything at all on receiving the narrowed-down allegations, far less an unequivocal indication that he intended to challenge the 3rd Party proceedings. The suggestion that he betrayed his real intentions by his concluding words completely disregards the evidence that they are the standard formula in New York legal usage, and doubtless imitated by the Defendant for that reason.
20. The Claimant however says that by docketing that letter the New York court demonstrated that it considered it of importance. But docketing in that jurisdiction is a matter purely of ensuring that a document forms part of the court file, and confers no status on the document such as is suggested, or possibly of any kind whatever".
With regard to the submission that Mr Kraus was the "real" Plaintiff in the underlying US proceedings, at paragraph [7] of his judgment, the Deputy Master pointed out that Swiss Life had chosen to refrain from taking procedural steps in the Main Action to ensure that if Mr Kraus wished to obtain the benefit of that underlying action he was also obliged to accept the burden of it. He said that Swiss Life could have sought an Order compelling Mr Kraus to join the Main Action as a claimant, or, if he refused to do that, as a defendant. In paragraph [10] of his judgment the Master stated:
"The contention…is quite simply impossible. It entails that this court can rule that an individual that was a stranger to the Main Action ought to be treated as having been a party to that action. But the Claimant quite freely chose not to make him a party to the Main Action, and whether he ought nonetheless to have been treated by the New York Court as such is a matter for that Court not this one".
C. Submission to jurisdiction: Relevant legal principles
(a) The rival contentions
Swiss Life submits that by virtue of the facts and matters set out in paragraphs [21ff] above Mr Kraus is the "real plaintiff" in the sense that he was the driving force and potential beneficiary behind the Main Action and the actual plaintiffs were merely nominees or ciphers of his. As such the actions taken by the nominal plaintiffs during the proceedings amounted to submission or appearance by Mr Kraus in the New York proceedings and, critically, this included for the purpose of any counterclaim or other collateral or related proceedings, such as the Third Party proceedings.
Mr Kraus contends that, to the contrary, there is no truth in the actual allegation that the plaintiffs in the Main Action were mere ciphers or nominees for him. But, more fundamentally, he argues that even if he is the so-called "real" plaintiff in the Main Action that does not, in law, make him the actual plaintiff for purposes of submission to jurisdiction. He says that there is no principle of being a constructive plaintiff. He also contends, in the alternative, that even if it did it would only go to the point of requiring him to submit to a counterclaim that was related to the claim, but not to the Third Party proceedings.
(b) The principles underlying enforcement
I turn now to consider the principles of law which are relevant to this appeal.
The principal requirement for the recognition or enforcement of a foreign judgment in this jurisdiction at common law is that the foreign court should have jurisdiction according to the domestic rules of conflict laws: see e.g. Sirdar Gurdyal Singh v Rajah of Faridkote [1894] AC 670, 683 – 684 (PC). This is upon the basis that jurisdiction is territorial and in personam actions and orders or decrees pronounced "in absentem" by a foreign court in circumstances in which the defendant has not in any way submitted himself to that court are in international law a nullity. In Buchanan v Rucker (1808) 9 East 192 at page 194 Lord Ellenborough famously posed the following rhetorical question: "Can the Island of Tobago pass a law to bind the rights of the whole world? Would the world submit to such an assumed jurisdiction?" A leading modern authority on this point, Adams v CK Industry Plc [1990] Ch. 433, 517 – 518 (CA) ("Adams"), is authority for the proposition that: "…in determining the jurisdiction of the foreign court…, our court is directing its mind to the competence or otherwise of the foreign court to summon the defendant before it and to decide such matters as it has decided".
The basis upon which domestic law recognises the competence of foreign courts and respects its judgments is a species of comity. In Adams (ibid.) at pages [517] – [519] the Court of Appeal described the source of the territorial jurisdiction of the court of a foreign State to summon a defendant to appear before it as "…being his obligation for the time being to abide by its laws and accept the jurisdiction of its courts while present in the territory". In Lewis v Eliades [2003] EWCA Civ 1758 at paragraph [48] ("Lewis") Lord Justice Potter explained that the principle of recognition and enforcement of foreign judgments evolved from one of comity to become a part of a "doctrine of obligation". He cited Blackburn J in Schibsby v Westenholz (1870) LR6 QB 155, 159 where the principle of enforcement was predicated upon the judgment of a court of competent jurisdiction over a defendant imposing "…a duty or obligation on the defendant to pay the sum for which judgment is given, which the courts in this country are bound to enforce…". In Murthy v Sivajothy [1999] 1 WLR 467 ("Murthy") Lord Justice Evans stated that the jurisdiction of the domestic courts to enforce a foreign judgment was derived from comity of nations but was not based upon reciprocity in any strict sense since the English Court did not have to enquire whether the foreign court in question would enforce an English judgment if the courts' positions were reversed. He put the basis in the following way:
"But when the defendant has submitted to the jurisdiction of the foreign court then he cannot be heard to say that the court has no jurisdiction to decide the issues raised by the proceedings in which the submission was made".
(ibid. page [476H], [477A])
In essence, when in Rome live by the law of the Romans.
(c) When is jurisdiction established?
However, be that as it may, the principles which explain why the domestic laws are as they are tell one little about the precise test which will be applied in domestic law to determine precisely when a defendant must be treated as having succumbed to the jurisdiction of the foreign State and hence triggered the duty of the English courts to respect that judgment.
Under the common law a court of a foreign country has jurisdiction to give a judgment in personam in certain circumstances which have been drawn together and summarised in "Rule 43" of Dicey, Morris and Collins, Conflict of Laws, 15th ed., 2012, paragraph 14R-054. This was approved of by the Supreme Court in Rubin v Eurofinance SA [2012] UKSC 46 ("Rubin") at paragraph [7ff] per Lord Collins.
Rule 43 identifies four circumstances or "cases" where a person may be subject to a foreign judgment. It is in the following terms:
"A court of a foreign country outside the United Kingdom has jurisdiction to give a judgment in personam capable of enforcement or recognition as against the person against whom it was given in the following cases:
First Case? If the person against whom the judgment was given was, at the time the proceedings were instituted, present in the foreign country.
Second Case? If the person against whom the judgment was given was claimant, or counterclaimed, in the proceedings in the foreign court.
Third Case? If the person against whom the judgment was given submitted to the jurisdiction of that court by voluntarily appearing in the proceedings.
Fourth Case? If the person against whom the judgment was given had before the commencement of the proceedings agreed, in respect of the subject matter of the proceedings, to submit to the jurisdiction of that court or of the courts of that country".
It follows that if the Default Judgment in issue is regarded as a judgment in personam within the ambit of Dicey Rule 43, then it will only be enforced in England at common law if the judgment debtor was, in summary, present in the foreign country when the proceedings were commenced, or submitted to its jurisdiction.
What is understood by the concept of submission? The general rule is that the party alleged to have submitted must have "taken some step which is only necessary or only useful if" an objection to jurisdiction "has been actually waived, or if the objection has never been entertained at all": cf. Williams & Glyn's Bank plc v Astro Dinamico Compania Naviera SA [1984] 1 WLR 438, 444 (HL) citing Rein v Stein (1892) 66 LT 469, 471 (Cave J), approved of in Rubin (ibid) paragraph [158] per Lord Collins.
This principle has been extended to apply to any question whether there has been submission to a foreign court for the purpose of enforcement in this jurisdiction. The question is to be determined according to English law and involves an objective assessment of all the surrounding facts. The position adopted by the foreign court is relevant and admissible but not conclusive. In Rubin Lord Collins thus stated:
"160. The same general rule has been adopted to determine whether there has been a submission to the jurisdiction of a foreign court for the purposes of the rule that a foreign judgment will be enforced on the basis that the judgment debtor has submitted to the jurisdiction of the foreign court: Adams v Cape Industries [1990] Ch 433, 459 (Scott J); Akai Pty Ltd v People's Insurance Co Ltd [1998] 1 Lloyd's Rep 90, 96-97 (Thomas J); see also Desert Sun Loan Corpn v Hill [1996] 2 All ER 847, 856 (CA); Akande v Balfour Beatty Construction Ltd [1998] ILPr 110; Starlight International Inc v Bruce [2002] EWHC 374 (Ch), [2002] ILPr 617, para 14 (cases of foreign judgments); Industrial Maritime Carriers (Bahamas) Inc v Sinoca International Inc (The Eastern Trader) [1996] 2 Lloyd's Rep 585, 601 (a case involving the question whether the party seeking an anti-suit injunction in support of an English arbitration clause had waived the agreement by submitting to the jurisdiction of the foreign court).
161. The characterisation of whether there has been a submission for the purposes of the enforcement of foreign judgments in England depends on English law. The court will not simply consider whether the steps taken abroad would have amounted to a submission in English proceedings. The international context requires a broader approach. Nor does it follow from the fact that the foreign court would have regarded steps taken in the foreign proceedings as a submission that the English court will so regard them. Conversely, it does not necessarily follow that because the foreign court would not regard the steps as a submission that they will not be so regarded by the English court as a submission for the purposes of the enforcement of a judgment of the foreign court. The question whether there has been a submission is to be inferred from all the facts.
162. It is in that context that Scott J said at first instance in Adams v Cape Industries plc [1990] 1 Ch 433, 461 (a case in which the submission issue was not before the Court of Appeal): "If the steps would not have been regarded by the domestic law of the foreign court as a submission to the jurisdiction, they ought not … to be so regarded here, notwithstanding that if they had been steps taken in an English court they might have constituted a submission. The implication of procedural steps taken in foreign proceedings must … be assessed in the context of the foreign proceedings.
163. I agree with the way it was put by Thomas J in Akai Pty Ltd v People's Insurance Company Ltd [1998] 1 Lloyd's Rep 90, 97:
"The court must consider the matter objectively; it must have regard to the general framework of its own procedural rules, but also to the domestic law of the court where the steps were taken. This is because the significance of those steps can only be understood by reference to that law. If a step taken by a person in a foreign jurisdiction, such as making a counterclaim, might well be regarded by English law as amounting to a submission to the jurisdiction, but would not be regarded by that foreign court as a submission to its jurisdiction, an English court will take into account the position under foreign law".".
The premise which underlies this case law appears to be based upon procedural fairness – taking the "rough with the smooth". In Adams (ibid.) at page 519, when discussing the relevance of physical presence in a foreign country, the Court thus stated as follows:
"So long as he remains physically present in that country, he has the benefit of its laws, and must take the rough with the smooth, by accepting his amenability to the process of its courts. In the absence of authority compelling a contrary conclusion, we would conclude that the voluntary presence of an individual in a foreign country whether permanent or temporary and whether or not accompanied by residents, is sufficient to give the courts of that country territorial jurisdiction over him under our rules of private international law".
In Dicey (ibid.) it is pointed out that in Adams the Court referred to the "voluntary" presence of the defendant as being one not induced by compulsion, fraud or duress. However, it is also stated (ibid. paragraph [14 – 064]) that it was not finally decided that the presence of such factors would necessarily negative jurisdiction. It is pointed out that there is no decision in this jurisdiction as to the position that would pertain were a defendant forcibly brought or fraudulently induced to come into the jurisdiction of the foreign court and there served with process. In the United States the view is held that in such a case jurisdiction exists but may or should be "…disclaimed by the court for reasons of equity if the plaintiff is privy to…force or fraud". In such a case it is said that the defendant has the benefit of the laws of the State concerned and owes temporary allegiance thereto. Once again, basic tenets of fairness or equity appear to underlie the operation of the rules.
Equally difficult questions of classification arise in determining whether a foreign corporation carries on business in this jurisdiction sufficient to render itself amenable to the jurisdiction of the English courts at common law. Case law suggests that complicated issues of fact arise in such cases: see Dicey (ibid.) paragraph [14 – 065]. It is pointed out that the mere fact that a defendant contracted through an agent in a foreign country is not of itself sufficient: see Dicey (ibid.) page 695 footnote 244 citing Seegner v Marks (1895) 21 VLR 491.
Case law provides illustrations of the sorts of acts of participation in foreign proceedings which amount to submission. These include: pursuing acts as a plaintiff; pleading to the merits of a claim qua defendant without contesting jurisdiction; contesting jurisdiction but nonetheless proceeding further to plead to the merits; agreeing to a consent order dismissing the claims and cross claims; failing to appear in proceedings at first instance but appealing on the merits; taking no part in proceedings and allowing judgment to go against him in default of appearance but later applying to set aside the default judgment on non-jurisdictional grounds. In Guiard v De Clermont [1914] 3 KB 145 a defendant applied successfully to set aside default judgment and have judgment entered in his favour at first instance. The original judgment was restored by an appeal court and the defendant held to have voluntarily submitted. For a general discussion which includes illustrations of acts of submission see Stichting Shell Pensioenfonds v Krys [2014] UKPC 41 at paragraph [27ff] ("Stichting"). Where a defendant now contests the jurisdiction of a foreign court, pursuant to Section 33 Civil Jurisdiction & Judgment Act 1982 if his challenge to jurisdiction prevails no question of submission arises; if unsuccessful and he proceeds to contest the case on the merits he will have submitted to the jurisdiction of the foreign court. Dicey records that it is an open question whether if such a defendant takes no further part in the proceedings and judgment in default is entered against him whether he will be regarded as having voluntarily submitted. Dicey states:
"Common sense would suggest that a defendant who has been vigorously protesting that a court has no jurisdiction should not be regarded as having voluntarily submitted".
(ibid. paragraph [14 – 070])
In Rubin it was accepted (ibid paragraph [166]) that an objection made in the proceedings to jurisdiction was not evidence of submission. It seems also to have been implicitly accepted (ibid paragraph [169]) that the fact that it had not been argued in the foreign proceedings by the party later seeking enforcement that the other party (now the defendant in the enforcement proceedings) had in fact submitted to the foreign jurisdiction was also a relevant factor against submission (when the person in question had not appeared).
In Rubin participating in a liquidation by way of proof and receipt of dividends was treated as capable of amounting to submission and, as such, that party "… should not be allowed to benefit from the insolvency proceeding without the burden of complying with the orders made in that proceeding."(ibid paragraphs [158] [165] and [167]). Proof in a liquidation was considered to be an act of submission because it was part of the process of judicial supervision which, in due course, could led to the payment out of dividends.
In relation specifically to "appearance", this is treated as an instance of submission. Dicey states (ibid. paragraph [14 – 069]):
"This case rests on the simple and universally admitted principle that a litigant who has voluntarily submitted himself to the jurisdiction of a court by appearing before it cannot afterwards dispute its jurisdiction".
(d) Jurisdiction in related proceedings
There are two final matters that I should address before setting out my conclusions on the application of the law to the facts of the present case. The first point is that it is well established in case law that where a person renders himself susceptible to the jurisdiction of the foreign court he does so not only with regard to the original claim but also to such other claims as the court allows to be added by the plaintiff or which are "related". Dicey states:
"In principle, submission will extend to claims concerning the same subject-matter, and to related claims which ought to be dealt with in the same proceedings, but (in either case) only if advanced by parties who were such at the date of the defendant's submission to the jurisdiction of the court; the decision of the foreign court to allow the new claim is not decisive".
(Dicey paragraph [14 – 075])
In Murthy (ibid.) the Court of Appeal, in the context of an analysis of Dicey Rule 36 (which ultimately became Rule 43), applied the ultimate test of fairness to the extent to which a person who submits for the purpose of one set of proceedings may be taken also to have succumbed to the jurisdiction in relation to other related matters. Lord Justice Evans (ibid. page [476e/f]) stated:
"We must remind ourselves that these United States authorities are cited to us as persuasive authorities, showing what the English common law is likely to be. There is nothing in them, in my judgment, which precludes or contradicts a common law rule to the effect that when a person submits to the jurisdiction of a foreign court in respect of a claim made against him by the plaintiff or claimant in those proceedings, then he can also be taken to have submitted to its jurisdiction in respect of, first, claims concerning the same subject matter and, secondly, related claims in the sense described above. This is provided, of course, that such claims may properly be brought against him under the rules of procedure in the foreign court, either by the original claimant or by others who are parties to the proceedings there at the time when he makes the submission".
The reference to "related claims in the sense described above" in the quote above was a reference to the analysis in the judgment at pages [473ff]. The gist of the authorities referred to do not, unambiguously, speak with one voice. However, the test involves looking at all the facts from the perspective of fairness and whether there is a sufficient nexus between the facts of the case in which the submission to jurisdiction is established and the related litigation in terms of time, space, origin, motivation or whether their "treatment as a unit" conforms to the parties' expectations or business understanding or usage.
(e) The issue of constructive appearance or submission: What is a "real plaintiff?
The second point, which is also of central relevance to the present case, focuses upon the position where a person is said to amount to the "real" plaintiff in substitution for nominal plaintiffs in an action. The gist of the Claimant's argument in the present case is that Mr Kraus is, constructively, to be viewed as the plaintiff in the Main Action and, by virtue of the principles referred to above, has thereby submitted to jurisdiction and should be susceptible to judgment arising out of the related Third Party proceedings. As to this there is some guidance to be had from domestic law.
In Willis v Baddeley [1892] 2 QB 324 ("Willis") it was held that where the agent of a principal resident abroad brought an action in his own name, but on a contract made with him as agent, the defendant was entitled to discovery to the same extent as if the principal were a party to the action and to have the action stayed pending discovery. Lord Esher MR (ibid. pages [325], [326]) stated:
"I do not desire to confine what I am about to say to cases of insurance; I am prepared to decide that where it is known to the Court that there is a foreign principle residing abroad who is the real plaintiff in the action and is only suing through his agent here, and that the agent was dealt with by the other side as agent and not as principal, then, in order to prevent palpable injustice, the Court by reason of its inherent jurisdiction will insist that the real plaintiff shall do all that he ought to do for the purposes of justice as if his name were on the record. It is true that the Court cannot make an order on him such as is here asked for, because he is not a party to the action; but he can say that the nominal plaintiff shall not proceed with the action until the real plaintiff has done that which, had he been a party to the action, he might have been ordered to do".
The concept, therefore, of a "real plaintiff" who was subject to the jurisdiction of the Court has thus been long recognised. Though, in the quote above, the Court of Appeal appeared to draw a distinction between the taking of procedural steps in order to facilitate justice and the making of an Order directly against the "real plaintiff". The Court could not do the latter because the "real plaintiff" was not a party to the action. The Court, therefore, limited the Order it made to the "nominal plaintiff" with the sanction of a stay as the consequence of non-compliance.
In Rainbow v Kittoe [1916] 1 Ch 313 it was held that a plaintiff who was an administrator would not be ordered to provide security for the defendant's costs of the action notwithstanding that the letters of administration were only granted to him as the attorney of a person who was abroad and notwithstanding that he could be shown to be insolvent. The underlying facts, to modern eyes, verge on the bizarre. They are not, however, relevant for present purposes. Mr Justice Sargant, in the course of giving judgment, stated this:
"Now the first rule of our Courts clearly is that no plaintiff should, on the mere ground of poverty, be deprived of his opportunity of suing in a Court of first instance; the matter is otherwise when the question of appeal comes to be considered. But to that rule there is this very broad and general exception, that where a person is suing is a mere nominee of the real plaintiff – and I will consider presently what is meant by the phrase "a mere nominee" – and he is also insolvent, that is to say unable to pay the costs if given against him, he should be ordered to give security for costs. The broad general reason fro that exception is that a plaintiff is not to be allowed to escape from liability for costs by means of setting up a dummy to fight on his behalf".
In Vogel v R & A Kohnstamm Limited [1973] 1 QB 133 the issue arose as to whether the defendant could be said to have been at any material time resident in the State of Israel. Mr Justice Ashworth stated:
"As has been said in many cases, residence is a question of fact and when one is dealing with human beings one can normally approach the matter on the footing that residence involves physical residence by the person in question. I keep open the possibility that even in regard to such a person he may be constructively resident in another country although his physical presence is elsewhere".
(emphasis added)
The Judge made the obvious point that in the case of a corporation there is no question of physical presence since a corporation is resident there by way of its human agents.
Abu Dhabi National Tanker Co v Product Star Shipping Limited [1992] 2 All ER 20 ("Abu Dhabi") concerned a claim upon a charter party. The owners sought specific discovery of various classes of document relating to the damages claim including documents in the possession of Adnoc (the parent company of the charterers whose primary purpose was to provide a shipping arm to Adnoc, which itself was the main oil company in the UAE). Adnoc refused to disclose the documents upon the basis that under the law of Abu Dhabi the charterers had no right to compel Adnoc to supply the documents and consequently they were not in its possession, custody or control. The owners contended that the charterers were nominal plaintiffs with a limited interest in the proceedings and that they were accordingly entitled to an order staying proceedings until Adnoc, the real plaintiff, disclosed the relevant documents. In judgment Webster J cited Willis (ibid.). He drew from this a general principle that the Court was to look through the "legal rights or liability as between" various companies and the nominal plaintiffs and determine who was "…to be regarded as the real plaintiffs…". He stated (ibid. [25e]):
"In my view I have to look at the position, as between Adnoc and Adnatco, at the date of the application for discovery; and in my view I have jurisdiction to make the order sought if I conclude that, at that date, whatever their legal rights or liabilities as between themselves and the defendants, Adnoc are to be regarded as the real plaintiffs and Adnatco as nominal plaintiffs, in the sense that beneficial interest in the proceedings is that of Adnoc and that Adnatco had no interest in the proceedings other than their right to bring them. If Adnoc are properly to be regarded as undisclosed principals it would follow, without more, that they satisfied that test. But in my view it is not a condition of their satisfying that test that they must, in law, be regarded as undisclosed principals. Whether or not they satisfy that test is ultimately one of fact".
The "test" being referred to in the above quotation was simply whether a particular person was, as a matter of fact, to be viewed as the "real plaintiff".
More recently, as Mr Levey pointed out in his skeleton argument on behalf of Mr Kraus, the mere fact that a person might be viewed as a "real" plaintiff for the purposes of certain procedural rules did not thereby necessarily make that person a "real plaintiff" for the purpose of "substantive liability" in relation to the cause in action. He cited the judgment of Mr Justice Cooke in Deutsche Bank v Sebastian Holdings Incorporated [2014] EWHC 2073 at paragraph [10]:
"…if a non-party costs order is made against a company director or shareholder, it is wrong to characterise this as piercing or lifting the corporate veil or to say that the company and the director or shareholder are one and the same. The separate personality of a corporation, even a single member corporation, is deeply embedded in our law for the purpose of dealing with legal rights and obligations. By contrast, the exercise of the statutory discretion to make a non-party costs order leaves the rights and obligations exactly where they are. The fact that the making of such an order is discretionary demonstrates that the question is not one of rights and obligations of a non-party, for no obligation exists unless and until the court exercises its discretion. Moreover, the fact that the discretion, if exercised, is exercised against a non-party has the effect of underlining the proposition that the non-party has no substantive liability in respect of the cause of action in question."
Mr Levey also cited the case law showing the practice of the English courts in exercising the power under section 51 Senior Courts Act 1981 to make non-party costs orders. He submitted that the way in which that power is exercised is not such as to support the conclusion that simply because a person is held to be a "real" plaintiff or an alter ego to litigation that the person will be treated as the person against whom final orders can or should be made.
D. Analysis: Conclusions
I turn now to my conclusions.
(a) Was Mr Kraus the "real plaintiff" in the Main Action?
I consider first whether Mr Kraus is to be treated as the "real plaintiff" in the Main Action. In my judgment the proposition that he is, is properly arguable and must go to trial. The case law adopts a test whereby the court examines the pith and substance of the relationship between the alleged "real" plaintiff and the nominal plaintiffs. I am required to look beyond the legal niceties to see whether the nominal plaintiffs are the "real plaintiffs" and if I conclude that (arguably) they are not then I must seek to identify who the real plaintiff is. A Court may certainly take procedural steps against the nominal plaintiffs in the light of its findings about the identity of the real plaintiff. So, for example, in Willis (ibid.), which was treated as good law by Webster J in Abu Dhabi, the Court stayed the proceedings by the nominal plaintiff unless and until the real plaintiff gave discovery. The Court however observed that they would not make an Order against the real plaintiff who was not a party. However, in Abu Dhabi Mr Justice Webster seemingly did go further and make an Order directly against the "real plaintiff". Although he purports to apply the Court of Appeal in Willis he did not consider himself bound by the procedural limitation that the Court of Appeal in that case perceived itself constrained by. The guiding principle applied by Webster J was one of general fairness or equity or justice.
In the present case I am satisfied that there is a proper case to go to trial on the question of whether Mr Kraus was the real plaintiff behind the Main Action. The point at which the person becomes "real" plaintiff is clearly one of degree. A person does not become the "real" plaintiff simply because he/she provides funding or proffers advice or assistance in the compilation of a witness statement or affidavit, etc. However, at some point the degree of involvement crosses the line and suffices to label the actor as the "real" plaintiff. Identifying the point when the Rubicon has been crossed involves focusing upon all of the acts and omissions both of the alleged "real" plaintiff and the alleged nominal plaintiffs.
In my view, the questions to focus upon include:
i) Who chose the lawyers to represent the nominal plaintiffs?
ii) Who paid the lawyers?
iii) Who decided upon strategy and who guided day to day negotiations?
iv) Who stood to benefit from the litigation?
In relation to the acts or omissions of the nominal plaintiffs key questions to focus upon include:
i) What was the level of their involvement?
ii) What knowledge did they have of the proceedings?
iii) What expectations did they have of receiving the fruits of the litigation, if successful?
iv) What expectations did they have of suffering the burdens of the litigation, if unsuccessful?
Posing these questions in the context of the present facts I am of the view that it is arguable that Mr Kraus devised and implemented the litigation, funded it and sought and intended to benefit from it, and, that the nominal plaintiffs were disinterested, uninformed, passive and non-participative and had no expectations about benefits or even burdens. I rely upon the facts and matters recorded at paragraphs [18] – [25] above. On this basis Mr Kraus did sufficient by way of conduct in the course of litigation to lead to the conclusion that he was in effect the true plaintiff and as such it follows that he also took sufficient procedural steps in that litigation which self-evidently amounted to submissions to jurisdiction (commencing the litigation, pursuing it, making application for certification, etc).
Mr Kraus, in his comprehensive oral submissions, accepted that he was actively involved in the litigation. He denied tht he was the real plaintiff. He said that he performed this role out of a sense of moral obligation towards the Chassidic community. He explained that the US attorneys were never bound to accept the advice that he gave to them. He denied that he had paid their fees. He submitted that he had received nothing by way of benefit from the litigation. He emphasised that in his view he had acted honestly and in good faith at all times. He categorised the submissions of Swiss Life as "character assassination". He explained in detail how he came to be involved in the promotion of the endowment policies which was because he perceived them to be of considerable benefit to the Chassidic community and he felt obliged to help. He denied that he had evaded service of documents although he accepted that he had quite deliberately sought to avoid appearing or submitting to the jurisdiction of the New York Court in the context of the Third Party proceedings. He said that had he done so he would have been sucked in to an ever escalating and uncontrollable piece of litigation which he simply could not have afforded to engage in and which he would have been swamped by. He also submitted that even if, as a matter of principle, he was to be treated as the real plaintiff in the Main Action there was no or no sufficient connection between that action and the Third Party proceedings.
I do not discount Mr Kraus' explanations. However, the question for me is whether the Deputy Master erred in granting summary judgment upon the basis that the "real plaintiff's" argument was unsustainable. As to this, I have concluded that the Deputy Master clearly erred. He did not, in a proper sense, grapple with the law or the facts.
(b) As the "real plaintiff" in the Main Action did Mr Kraus thereby submit to the Third Party proceedings?
I turn now to the next question, which is whether assuming that Mr Kraus was (arguably) subject to the jurisdiction of the US Court in relation to the Main Action this suffices for the purposes of submission to the Third Party proceedings. It is clearly not the case that the latter inexorably follows from the former.
The judgment now sought to be enforced is predicated upon it having been obtained in default of appearance by Mr Kraus. The US Court did not treat any act or conduct by Mr Kraus in that litigation as having amounted to a submission or appearance. Indeed it is recorded that the Judge treated Mr Kraus as having been served but not as having taken part in the proceedings whether in relation to procedural matters or substance. Whilst this therefore suffices for the purposes of US jurisdiction it will not (and subject to the analysis of the letter of 22 January 2013 below) establish jurisdiction in the High Court unless submission at the Main Action is in law sufficient to establish submission to the Third Party proceedings. The test in law is set out at paragraphs [65] – [67] above.
As to this, some, but by no means all, of the Third Party proceedings are predicated upon the facts and matters relied upon in the Main Action. This is because a considerable part of the Third Party proceedings arise out of alleged misconduct on the part of Mr Kraus in relation to, at least, three other matters. First, in relation to the role he played in a series of policy holder lawsuits against Swiss Life in New York (in Kalman Weiss v La Suisse 97 Civ 1352 (CM) (MDF)). Secondly, in relation to litigation pursued or procured by Mr Kraus in Switzerland. Thirdly, litigation pursued or procured by Mr Kraus in Israel. Details of conduct on the part of Mr Kraus in relation to all of those three matters form a significant component of Third Party proceedings. Furthermore, throughout the complaint Swiss Life used the expression "The Brokers" upon the basis that Mr Kraus was simply one of a number of brokers who engaged in acts said to be unlawful and detrimental to Swiss Life.
The costs order is said to arise under a power accorded to the court under RICO to award costs. Those costs would appear to have been incurred in relation to a range of matters which go beyond the Main Action. By way of illustration of the general point, under the heading "Extortion and Bribery" a series of allegations are made to the effect that Mr Kraus was prepared to provide favourable testimony for Swiss Life in the Kalman Weiss litigation if he were compensated. It is then said that when Swiss Life declined to make the proposed payments, Mr Kraus and Caruso not only filed the Main Action but also initiated 50 lawsuits in Switzerland and Israel. In further particularisation it is said that Mr Kraus threatened harm to Swiss Life by filing criminal complaints in Switzerland against employees of Swiss Life. Indeed, it is clear that the acts relied upon in considerable measure are unrelated to the matters pleaded and relied upon in the Main Action. On a fair reading of the complaint in the Third Party proceedings it is, in my view, clear that only one part thereof relates to the Main Action. Paragraph [101] of the Complaint states:
"Kraus and Caruso's violations…approximately caused, to date, Swiss Life to suffer direct injury to its business and property, including legal fees incurred in defending against Kraus' extortionate lawsuits in New York, Switzerland and Israel, and other damages and losses described above".
In my judgment it is arguable that there is a sufficient connection between the Main Action and the Third Party proceedings to enable submission to the former to constitute submission to the latter. Whether this ultimately turns out to be sufficient in law is a matter from trial. It is not possible for me to say, in the context of an appeal against a summary judgment decision, that the connection between the two sets of proceedings is so remote as to make them wholly or insufficiently unconnected.
(c) The letter of 22nd January 2013
I turn now to the question of the letter of 22nd January 2013. I propose to consider: how this was in fact treated by the New York Court; whether there is any evidence before the High Court as to how, even in principle, this could have been treated under New York procedural law as a formal procedural step; and, how the domestic courts would deal with this.
It is clear (see paragraphs [30]–[37] above) that the US Courts did not view this as a step in the proceedings there. It was treated as an informal letter having no status which did not even have to be disclosed to Swiss Life. It was placed on a Court file and came to the attention of Swiss Life only as a matter of happenstance. It was essentially ignored by the Court and it played no part in the reasoning behind the Default Judgment which proceeded upon the basis that Mr Kraus had neither appeared nor submitted to the jurisdiction of the US Courts i.e. had taken no steps of a procedural nature.
Swiss Life argues that, contrary to the above, the letter did amount to a procedural step in the litigation emphasising that pursuant to the test in Stichting (ibid.) at paragraph [31] all that had to be established was "any procedural step consistent only with acceptance of the rules under which the court operates" (emphasis added). It is said that the letter represents an engagement with the New York court's procedural rule because Mr Kraus was accepting those rules and going further by asking the court to enforce those rules. He invited the New York Court to: (i) order that Swiss Life effect proper service upon him; and (ii), order that Swiss Life narrow down its allegation against him so that he could better understand them. Of these two alleged steps it is contended that the first seeks an "order that Swiss Life effect proper service of the default judgment on him" where proper service is a "paradigm" procedural rule; and as to the second it is said that this "looks like a request for further and better particulars". I do not accept this argument.
First, the difficulty with these arguments is that the letter was, in actual fact, not treated as steps recognised under New York procedural law by the Judge. As observed the letter was ignored. If the New York Court had treated these as steps "consistent only with acceptance" of the rules operating in New York then there is no explanation as to why they were not acted upon as such by the Court and were simply put away in a court file, no doubt under the troublesome litigant heading, and not even passed on to Swiss Life. I have set out at paragraph [57] above citation from authority which indicates that if the foreign court does not treat an act as submissions that the English court will at the very least treat the foreign court's view as of substantial weight in forming its view under English law. In relation to a concept which is underpinned by comity, it is hard to see why the domestic court should in such circumstances accord the disputed act in question much weight as an indicator of submission.
Secondly, no evidence was put before this court to show how, in principle, and notwithstanding the view of the New York judge, New York procedural rules would apply to the procedural steps which it is submitted the letter amounts to. Indeed, it was not submitted that this letter was capable of being a formal procedural step under identified, specific, procedural rules in New York. To make an application, for instance for further and better particulars (and I assume that there is an equivalent under New York procedure) must special forms be used? Must a court fee be paid? Must an application be attested to by a statement of truth or a jurat? Must it be served upon the other side? Does the fact that Swiss Life did not respond to it as if it were a formal procedural step (and indeed sought default judgment upon the basis that Mr Kraus had not complied with the rules) have relevance? And so on. It is notable that the act in question which was being referred to in Stichting was the formal lodging of a "proof" which had equally formal procedural consequences in the litigation (see per Lord Sumption and Lord Toulson (ibid.) at paragraph [31]).
Thirdly, if the High Court is not to take the position in New York as providing the definitive answer then it is relevant to consider how this letter would have been treated under domestic procedural rules. It was not however in this context argued before me that an informal letter of this sort sent by a litigant in person would be treated as a pleading or procedural step recognised under the CPR in this jurisdiction. In my view, had such a letter been sent to a Judge in the High Court (and such letters are from time to time sent) it would equally have been treated as an informal communication. If this letter had been sent to a Judge he/she would have (i) passed it on to the court office so that advice about procedure could be given by court officials to the author of the letter and (ii) sent a copy as a matter of courtesy to the other litigants in the case upon the basis that a judge should not be receiving communications from one litigant that another litigant does not know about. It would not have been treated as a formal procedural step.
Fourthly, the Stichting test, cited by Swiss Life, assumes that the procedural step being examined must be consistent "only" with acceptance of the rules under which the court operates. See also the reference to "only" in Williams & Glyn's Bank (ibid.) approved of in Rubin (ibid.): cited at paragraph [56] above. If one applies this strictly then where there is ambiguity and the step does not point unequivocally to compliance with the foreign procedural rules, it does not amount to submission. Nonetheless, in so far is it is relevant in my judgment it cannot be said that this letter meets the exclusivity requirement. The letter was a response to what Mr Kraus perceived as a slur to his reputation and it was also a complaint about the shipment of documents: See the 3rd and 4th paragraphs of the letter cited at paragraph [30] above.
Finally, case law indicates that the test is an objective one based upon all of the facts: Rubin (ibid.) paragraph [163]. In so far as the intention of the person alleged to have submitted is concerned has any relevance it is clear, as recorded at paragraph [24] above, that Mr Kraus did not intend ever to submit to the jurisdiction of the New York Court. My attention was drawn to this correspondence by Swiss Life as an indication of the fact that Mr Kraus was playing a clever game and supportive of its argument that he was the "real plaintiff". I accept that a person might not intend to submit to jurisdiction but, mistakenly, perform an act which amounts to submission, and it is the latter which will prevail. Actions count louder than words. But in the present case, and bearing in mind the overall context, I do not take the letter as reflecting an intention to submit to jurisdiction.
Standing back from this issue I am, in effect, asked by Swiss Life to treat as relevant and decisive a document that the Court in New York treated as irrelevant. There is no other piece of evidence which suggests Mr Kraus in any way communicated with, or appeared in, or submitted to the US courts in relation to Third Party proceedings. No evidence has been put before me to show that an informal letter would or could be treated as a formal procedural step in New York; and the same goes for the position in this jurisdiction. In my judgment, the Deputy Master correctly rejected this letter as evidence supporting jurisdiction. I am fortified in this conclusion by the position adopted by the Outer House Court of Session in Service Temps Inc v Innes Nicholson MacLeod et Ors [2013] CSOH 162 per Lord Hodge ("Service Temps"). In that case the Court had to consider whether there was sufficient evidence of submission to jurisdiction in relation to a decree of the District Court in the 68th Judicial District of Dallas County Texas. An issue arose as to whether the judgment was tainted by virtue of the PTIA 1980. In this context an issue arose as to whether a letter sent to the Dallas District Court amounted to submission. Lord Hodge clearly (ibid. paragraphs [24] and [25]) treated the stance adopted by the Texas Court as highly relevant, though not dispositive. He observed that the US Court treated the letters as instituting a valid appeal and he stated that the Scottish Courts would in his view have acted similarly.
In view of these matters I conclude that the Deputy Master did not err in his analysis of the letter.
(d) Other possible defences
I therefore conclude that there is an arguable case that Mr Kraus in acting as the real plaintiff in the Min Action also submitted to jurisdiction in relation to the Third Party proceedings. There are now certain other matters I would address which go to whether Mr Kraus has some knock-out defence that should lead me to dismiss the appeal notwithstanding my prima facie conclusion. In the case of each possible defence below I have concluded that they are certainly arguable from the perspective of Mr Kraus but that I cannot say at this stage that they are so strong that I should refuse to give effect to my prima facie conclusion which is that Swiss Life has a proper case to take to trial on its enforcement action.
Abuse of process: The first concerns the fact that Swiss Life has not sought enforcement of the Judgment in relation to the principal damages, which have been trebled and amount to a sum exceeding $150,000,000. Mr Kraus complained that, if it were now to be pursued (whether in a trebled form or not), it should have been pursued much earlier and that it was an abuse of process to pursue it in separate proceedings. He emphasised that he is now a litigant in person who could not afford legal representation. He complained that it was unfair to use the tactic of multiple, staged, litigation to wear him down. Mr Croxford QC, for Swiss Life, submitted that the High Court proceedings were commenced before the quantification of the Default Judgment had occurred, which was only in August 2014. He submitted it was therefore within the discretion of Swiss Life to seek to enforce that sum as a quite separate action. I have already referred to the general principle of law that a party should include all of the causes of action that it can in one set of proceedings: See paragraphs [9] and [44] above. It would of course have been open to Swiss Life to delay bring the enforcement proceedings until after the quantification judgment was obtained in New York. Whether the strategy adopted by Swiss Life sounds as an abuse either now, or, at the stage of an attempt to enforce the underlying monetary claim, is for trial or for later proceedings. I do not view it as a knock out reason to justify refusing the appeal.
Non-severability: A second issue arising is that even if in principle it is possible to seek to enforce the costs order in this jurisdiction because there is a sufficient connection between the Main action and the Third Party proceedings the trial judge might conclude that only a part of the costs sought to be claimed are in fact attributable to the Main Action and that therefore only a part of the claim is enforceable here. If that is so then a consequential issue as to severance might also arise. Is it possible to separate out the recoverable claim from the unrecoverable part? Mr Croxford QC submitted generally that issues such as this could in law be resolved through a principle and process of severance. He referred to Lewis where severance was applied under the PTIA 1980. He said that Swiss Life recognised that pursuant to the PTIA 1980, and also under the common law, the courts will not enforce a penalty and that Swiss Life was not intending to pursue the trebled part of the quantum claim. Mr Croxford QC submitted that in Lewis (ibid.) the Court of Appeal held that, in principle, it was possible to sever unenforceable, penal, treble damages from, otherwise unobjectionable damages. At paragraph [52] Lord Justice Potter stated:
"…in a situation where the court is asked to enforce a foreign judgment for a particular sum and it is faced with a plea by the defendant that the judgment is unenforceable, it should first examine whether and to what extent the judgment falls within the exception to enforceability relied on. If, upon such examination, it is apparent that part only of the judgment falls within that exception, the court should then consider whether the unexceptionable part can readily be distinguished, separated and quantified for the purposes of enforcement. If it can, then that separable part should be recognised and enforced".
Ultimately it is for the trial judge to: examine the nexus between the costs claim and the Main Action to see to what extent there is overlap; and in the light of that assessment to determine whether the whole or only a part of the costs claim can be recovered; and if only a part can be recovered whether it is in fact possible to sever the recoverable from the irrecoverable parts. It is correct to conclude that the Default Judgment does not contain any reasoning which allocates the costs as between issues in the Third Party proceedings and this might be an obstacle to severance. Ultimately however I confine myself to concluding that these are all arguable defences but I cannot say at this stage that their resolution is so clear in favour of Mr Kraus that they should lead me to refuse the appeal.
High Court no jurisdiction to entertain enforcement claim under section 5 Protection of Trading Interest Act 1980: There is one other matter to mention which concerns whether the Courts are permitted to even entertain an application to enforce a part of a judgment which contains a trebled component. In Lewis (ibid.) an issue arose as to whether a US judgment which was, in principle, subject to trebling pursuant to RICO could be enforced in the domestic courts, even though the specific judgment sought to be enforced had not been subject to any trebling process. It was argued that pursuant to Section 5 PTIA 1980 because this was a judgment which fell within the broad scope of Section 5(3) and Section 6 PTIA 1980 then the prohibition in Section 5(1) applied. This reads:
"(1) A judgment to which this section applies shall not be registered under Part II of the Administration of Justice Act 1920 or Part I of the Foreign Judgments (Reciprocal Enforcement) Act 1933 and no court in the United Kingdom shall entertain proceedings at common law for the recovery of any sum payable under such a judgment".
In Lewis it was contended that the bite in Section 5(1) was broad and sharp. It applied to "any sum" payable under a judgment caught within the scope of the Act. And as to the latter question, Section 6 made clear that a judgment which imposed treble damages was a judgment to which Section 5(1) applied. It was thus submitted that since the US judgment sought to be enforced in that case included an element of, prohibited, treble damages then no other part thereof could be enforced in the United Kingdom, even if the judgment actually being enforced had no component of trebling within it. The Court of Appeal considered that Section 5(1) was ambiguous in this regard but that there was no reason of policy within the terms of the Act which dictated a construction which led to the "draconian consequence that a US judgment for damages largely in respect of private causes of action otherwise enforceable under longstanding principles of English law may be rendered wholly unenforceable by inclusion of a claim, and consequent judgment, for damages under the RICO Act" (ibid. paragraph [47]). On the facts the Court applied a test of severance (cf. paragraph [39]) and thereby permitted the untainted judgment to be enforced in the United Kingdom.
The Court in Lewis was thus concerned with particular facts: the Claimant was enforcing in this jurisdiction a US judgment which was for a fixed sum with no element of trebling therein: see (ibid.) at paragraphs [5] – [10]. This was the context in which severability was held to be unobjectionable. Importantly for present purposes Lord Justice Jacob expressly distinguished the instant case from the more complex one where enforcement was sought of a component of a single judgment which also included a trebled award (cf. ibid. paragraph [62]).
The facts of the present case are more complex than in Lewis both because here the claim is for enforcement of the costs element of a single judgment that explicitly provided for trebling with only quantification deferred, and because the costs order was made under the very statute (RICO) which permits the trebling.
In Service Temps (ibid), Lord Hodge, having cited Lewis, concluded that the prohibition on courts entertaining foreign judgments containing treble damages elements set out in section 5 PTIA 1980 was to be given a wide (i.e. strict) meaning (ibid paragraph [37]):
"[37] It is consistent with the purpose of the 1980 Act to give a wide meaning to the words at the end of section 5(1): "proceedings at common law for the recovery of any sum payable under such a judgment". I acknowledge that the judgment against the defenders, which STI seeks to enforce, relates to a claim under the UFTA and is not a direct claim for multiple damages. But it is a judgment against United Kingdom citizens resident in the United Kingdom which orders them to pay a creditor of HDL, whose only claim for such an order is a judgment against HDL for multiple damages under US anti-trust legislation. That in my view involves the recovery of a sum payable under a judgment for multiple damages within the meaning of section 5(1). The fact that the claim under UFTA arises from an alleged transfer of assets to defeat STI's claim is not material. As STI accepts, the 1980 Act prevents it from suing HDL in the United Kingdom to recover multiple damages. It would be contrary to the broad intention of the legislation, which is to discourage the extra-territorial enforcement of anti-trust judgments and measures, for the court to order HDL's directors in the United Kingdom to pay sums to STI, an anti-trust claimant, to enable it to recover its award of multiple damages.
Lord Hodge was of the view that on the facts of the case before him there was no possibility of severance of the compensatory element of a judgment from its excess: See paragraph [39].
On one view the present claim, which seeks to enforce a costs order, is an attempt to enforce a part of a judgment which, itself, contains a component which is objectionable under the PTIA 1980. The facts of this case are not four square on a par with those in Lewis (where the foreign judgment was enforced here) and as was observed in that case by Lord Justice Jacobs where there is a greater degree of linkage between the sum to be enforced and the underlying judgment which contains the objectionable trebling, then the limits of section 5 require further exploration. In this respect Service Temps suggests a relatively strict approach. The exploration of these questions will have to be performed by the trial judge in this action. Once again it suffices for present purposes to conclude that the points arising as possible defences are arguable but are not such that at this stage I can say that they afford Mr Kraus a clear and unanswerable defence to the case advanced by Swiss Life.
E. Conclusion
For the reasons set out in this Judgment the appeal is allowed.
Note 1 The appeal was conducted orally by Mr Kraus in person. He made detailed submissions about the evidence in this case. His case was supplemented by written submissions by Mr Edward Levey, of counsel. These written submissions helpfully and concisely addressed the principal issues of law arising and I have, gratefully, taken full account of them in preparing this judgment. [Back]
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MR JUSTICE FOSKETT :
Introduction
Calabria is the Southern Italian region that forms the "toe" of Italy. It comprises the five provinces of Cosenza, Reggio Calabria, Catanzaro, Crotone and Vibo Valentia. The climate is Mediterranean as is its cuisine. The west-facing coastline borders the Tyrrhenian Sea and the east-facing coastline borders the Ionian Sea. Its overall extensive coastline makes it a popular tourist destination during the summer months and its mountainous interior also offers skiing opportunities during the winter. As with many parts of Italy, it has a rich cultural and architectural heritage.
Its increased popularity as an area where relatively inexpensive holiday homes might be acquired lies at the heart of this case. At least prior to the material events in this case, relatively cheap flights could be obtained from the UK mainland and from Ireland to Reggio di Calabria, Lamezia Terme and Crotone through the well-known budget airlines.
The case arises from the proposed purchase of apartments by a number of individuals in a prospective development near the coastal resort of Brancaleone, which is a 'comune' in the province of Reggio Calabria, where the coastline borders the Ionian Sea. The purchases were made "off plan" – in other words, the properties had not been built at the time the purchasers committed themselves to the transactions. Those commitments were made in 2007 and 2008, the anticipation at that time being that the development would be complete by the summer of 2009. In each of the cases with which these proceedings are concerned, the proposed purchase was never completed as a result of which it is said that each proposed purchaser has made a financial loss.
The overall development was called the "Jewel of the Sea" ('Il gioiello del mare' in Italian) development which has, for short, been referred to throughout as the "JoTS" development.
The promoter of the JoTS development was VFI Overseas Properties Limited ("VFI"), a company registered in the Republic of Ireland on 18 December 2006. There were two parts of the overall development which can be identified as the Main Development and the Beach Front development. I will describe the difference between the two below (see paragraphs 22 - 34). The vendor/builder of the Main Development was RDV Srl ("RDV") and of the Beach Front development was Veco Costruzioni Srl ("Veco").
Each purchaser engaged one or other manifestation of the legal practice of Avvocato Gabriele Giambrone to act in the proposed purchase. As I have said, none of the proposed purchases involved in this case proceeded to completion and the proposed purchasers, who comprise the claimants in the case, seek to recover their losses from Avvocato Giambrone's firms and/or from him and his partners personally on the basis of alleged failures to act properly in their interests in the transactions. Each exemplar claimant has rescinded the contract into which he or she entered with the effect, amongst others, of sacrificing the deposits they paid.
Following directions given by Asplin J in May 2014 the trial has focused on a number of "exemplar" transactions (in the event, 12 out of the 100+ cases currently outstanding) with a view to the court reaching certain conclusions on various issues that will either assist the conclusion of this litigation in its entirety or at least reduce the issues that might arise in further proceedings (see paragraphs 10 - 12 below).
The claimants in the various actions before the court are either resident in England or the Republic of Ireland. It is accepted that the correct venue for resolving these cases is in this jurisdiction.
Various proceedings arising out of the JoTS development have been brought by claimants in England and Wales and in Northern Ireland. Until this case commenced no case had ever proceeded to trial, with many settling on confidential terms at or shortly before trial. Indeed in the present proceedings the El Caribe claims (see paragraph 22 below), which were due to be reflected in one of the exemplar cases, were settled shortly before the trial. It is to be noted that the issues raised by the claimants in those previous proceedings were similar to those raised in the present proceedings. In the present proceedings, almost every issue raised on behalf of the remaining claimants has been hotly contested.
The List of Generic Issues
As I have indicated, the focus of the trial has been on a number of specific issues deduced from the pleadings. Not all issues raised by the pleadings have been the subject of argument at the trial. For example, causation of loss in individual cases (on the assumption that a relevant breach of duty is established) has deliberately been excluded. How the issues were to be formulated was the subject of the first preliminary hearing before me in October 2014. I need say nothing more about the arguments then advanced save to note that I was essentially of the view that the way the claimants were seeking to have the issues identified was the best way forward. At all events, a List of Generic Issues was agreed and has represented the effective agenda for the trial.
Inevitably, some issues have assumed greater significance than others and during the course of the trial some issues were either resolved, in whole or part, or abandoned. Attached to this judgment as Appendix 1 is the List of Generic Issues amended to show those issues that remain alive and upon which I have, so far as possible on the evidence, endeavoured to reach a conclusion.
In preparing this judgment I have identified a number of issues in the List of Issues that seem to me either no longer to be relevant or for it to be premature to decide them. I shall indicate those areas in the course of the judgment. There are some matters not identified in the List of Issues where I sensed I was being invited (particularly on behalf of the defendants) to make findings. I have generally endeavoured to resist that invitation.
The structure of this judgment
At the outset I will give a description of the developments in question and endeavour to reach a conclusion about the state of progress of those of relevance. After reference to some general issues I will trace the history of the involvement of Avvocato Giambrone in the transactions, either personally or through others who worked for him, in a broadly chronological fashion.
To the extent that it is possible to reach conclusions of fact as the chronological history unfolds, I will set out those findings.
I will indicate my approach to submissions made that certain matters advanced by or on behalf of the defendants were not challenged in cross-examination by Mr Robert Duddridge and Mr Shantanu Majumdar on behalf of the claimants they represent (see paragraphs 53 - 69 below) in paragraphs 17 - 21 below.
The developments in question (and some issues concerning the assessment of the evidence)
As indicated above, before setting out the background in greater detail, it will help if a brief description is given of the developments that either constitute the direct subject-matter of these proceedings or which have at least figured in some way in the background.
Whilst the evidence before me has, of course, focused on those aspects of the JoTS development of direct concern to the claimants, other more general evidence was given during the case suggesting that many residential complexes have been completed in the region successfully over recent years with few, if any, of the problems associated with the development in this case. That evidence was given by Avvocato Giambrone in his witness statement when he said that his firm was involved in transactions "in about 52 developments in Calabria" and that he believed that "over 90% of the Calabrian property transactions in which [the firm] was involved have completed successfully." Mr William Flenley QC, Leading Counsel for the Defendants, and Mr Jamie Carpenter said in their written Closing Submissions that that evidence was unchallenged. If that was intended to suggest that I am bound to accept that evidence as a matter of fact, I should say unequivocally that I am simply in no position to judge whether that is the case or not. This case has not been about those other developments. I have no particular reason to suppose that other developments in Calabria have necessarily given rise to the problems that emerged in this case except to note that, at face value, Avvocato Giambrone's claim in his witness statement seems at variance with what he was quoted as saying in the 'Mail on Sunday' article referred to later (see paragraph 224)[1] – upon the basis of which article, incidentally, Mr Flenley seeks to obtain some support on another aspect of the case (see paragraph 384) - and, at least to some extent, with the fact of the seizure of certain Calabrian developments by the Italian financial police (see paragraph 33 below). However, the extent to which what Avvocato Giambrone said was or was not the case in this regard is not a matter upon which I can make any express finding, but I do not regard myself as bound to accept what he says. The same applies to some of the more expansive assertions he made about the levels of deposit made for off-plan purchases in Calabria and the levels of commission charged by international promoters working in Calabria at the time. This case has not been about other developments and there has been no investigation (or disclosure if Avvocato Giambrone was involved in them) of these other instances to see if what he says is correct. It follows that there has, in reality, been no way in which a meaningful dialogue in cross-examination could have been undertaken about matters such as these.
I should add generally, in relation to forensic points made by Mr Flenley in particular that some matters were not challenged and thus must be accepted, that had every potential issue of fact or opinion in dispute been the subject of sustained challenge in cross-examination, the trial would have taken even longer than it did with, as I shall indicate below (see paragraphs 71 - 76), the risk that the increased associated costs would not be recovered by the claimants even if they were to succeed on the merits of the case or that the individual defendants would find themselves with a personal costs liability arising from the way the case had been dealt with on their behalves. A measured and proportionate view must be taken of this kind of contention and, of course, the general credibility and reliability of the witness who says something, particularly, though not exclusively, of a general and expansive nature, which is "unchallenged" needs to be taken into account when making an assessment of the value of that evidence. I propose, where appropriate, to take that approach to contentions of this nature.
Furthermore, Avvocato Giambrone, although a lawyer, did not give evidence as an expert in Italian law and to the extent that his views of the law were given, it was not generally incumbent on those representing the claimants to challenge those views, nor was it necessary to pick up and dispute any collateral comment he might have made in an extended answer to a question.
Avvocato Giambrone was often keen to set the agenda for his questioning rather than focusing on and answering directly the questions posed to him. His answers were often lengthy and expressed quickly. Throughout I felt that he was a witness for whom some credible supporting evidence was required before I could safely accept what he said. It will thus be apparent that I have approached everything he has said with a significant degree of caution. With the exception of Avvocato Virga (see paragraph 28 below), I was of the same view about the other witnesses employed by him and particularly those such as Mr Buchan, Mr Dine and Mr Klingenbergs who have known and worked with him for many years. There was a sense that all wished to be saying the same thing even if, as was the case in a number of important areas, the contemporaneous documentation did not support the combined viewpoint they wished to support and advance.
I should also add that where what is in issue is the meaning of a document or series of documents, the process of elucidation is rarely, if ever, assisted by cross-examining either the drafter of the document(s) as to what was meant by the words used or by seeking the potentially self-serving opinion of someone closely associated with the importance of the meaning of the document. The answer to the issue is ordinarily resolved by reference simply to the words used in the context in which they are used. Equally, where inferences are open to be made on the basis of the totality of the evidence, the mere fact that a particular inferred conclusion was not put to Avvocato Giambrone does not mean that it has been accepted by the claimants or that I must accept it. I will highlight just one example of a number that could be advanced. Issue 20 is expressed in these terms: "Did [the defendants] allow themselves to be influenced by the interests of the vendors, developers or promoters in conflict with the interests of [the claimants]?" That is, in effect, an inference the claimants are inviting me to draw. Mr Flenley argues that because this suggestion was denied by Avvocato Giambrone in his witness statement and since that position was not challenged in cross-examination I must accept the position as Avvocato Giambrone states it. I do not accept that merely because the suggestion that what he said in his witness statement was untrue (or simply misguided) was not put specifically to him (a proposition that inevitably he would deny) means that I am bound to accept his position. It is, of course, important to be fair to a witness, particularly if serious imputations as to the witness' honesty and integrity are being made, and there may be other areas of a witness' evidence that need to be challenged head-on, but the days of the "I put it to you" cross-examination on other matters have long since gone. In any event, it needs to be borne in mind that what I am to determine is the collective position of "the firm" or "the practice" on an issue rather than assessing a particular individual's attitude to or appreciation of that issue. Putting matters to an individual, even the senior person, will not necessarily assist a court in deciding on that issue.
Returning to a description of the two developments that have generated the claims in these proceedings, they were (1) the El Caribe development and (2) the JoTS development. Each has been the focus of a somewhat fraught disclosure exercise. The El Caribe development was intended to be an apartment complex constructed on a site to the south of Crotone between Capo Colonna and Capo Rizzuto. The JoTS development is the development near to Brancaleone to which reference was made in paragraph 3 above. The actual location of this development is in a village called Galati, a couple of miles or so to the south of Brancaleone itself. There are two broad geographical areas within this overall development that need to be identified in order to put some of the issues that have arisen into context.
There is a railway line running along the coast in this area, as well as a parallel coastal road known as the SS106, and both pass through Galati. To the seaward side of the railway line and coast road is where 'the Beach Front development' was to take place – and indeed now appears to have been completed substantially though probably not to the full extent contemplated (see paragraphs 25 - 26 below). To the other side of the railway line and road, and spreading up the hillside above, was to be 'the Main Development'.
The Beach Front development consists of nine separate apartment blocks, four of which are immediately adjacent to the beach, the other five being to the rear of those four blocks, but to the seaward side of the railway line and road.
The witness statement of Tiziana Baiamonte (an architect instructed on behalf of the defendants), which speaks of the state of affairs in January 2013, says that at that stage the whole of the Beach Front development had been built, although the statement appears to suggest that not all necessary features were complete because, as she put it, "the necessary preparations have been made for the subsequent installation of independent piping for air-conditioning, with attachments for an external air-conditioning machine, as well as attachments for the washing machine." The completion of those features may not have formed part of the commitment of the builders for the project although the absence of such facilities may well have had a bearing on whether the properties were considered habitable by their purchasers. On the evidence before me the position in terms of the essential habitability of the Beach Front development in January 2013 from that point of view is thus not entirely clear: whether all were then considered by the proposed purchasers to be habitable or not and whether, if not, they have since become habitable is unclear, but it is a fact, on the evidence called in the proceedings, that not all have been sold to completion (see paragraph 28 below). I am here using the expression "habitable" in the non-technical sense rather than as in the concept of a "certificate of habitability" (see paragraph 167 below).
It seems to be accepted that the access road to the Beach Front development has not been completed in the manner contemplated at the outset and the current means of access, whilst negotiable to all or most vehicles, is along a steep and narrow road under a bridge (demonstrated on a photograph I was shown). It is hardly the kind of access that would be expected of a prestigious development.
Since the Beach Front development was effectively on the beach, the properties there were generally more expensive than those in the Main Development and could be seen as occupying the more exclusive part of the JoTS development. Ms Baiamonte describes the residencies that had been constructed in the Beach Front development as of the "terrace type" with two floors above ground level with apartments on each level, the apartments on the ground floor having their own gardens in the front. The intention was that this relatively small development should be a gated complex.
The current assessment of the position, based upon recent records, given by Avvocato Riccardo Virga, who now works for Avvocato Giambrone and whose essential reliability as a witness I accept, is that 19 units of the Beach Front development have been sold to the point of completion. This is out of a total of about 30 – 40 residential units within that part of the development.
The remaining 560 – 570 units of the whole JoTS development were to be within the Main Development. This was divided into various sectors which, in English, would be known as Emerald, Ruby, Sapphire A and B, Turquoise, Topaz, Amethyst and Diamond. The plans also included a shopping centre, hotel, club house with sports facilities and, at a number of points within the complex, various swimming pools. A golf course was also planned nearby and the proposal was of importance to some purchasers. It never materialised, but the failure of the initiative has played no real part on the trial and it is not mentioned in the List of Issues.
Ms Baiamonte said that in January 2013 5 out of the 11 blocks comprising the Emerald sector had been fully completed, 3 out of the remaining 6 had been completed to the extent of 90% (with only some aspects of the external façade remaining to be completed) and the remaining 3 blocks completed to the extent of about 70%. She took some photographs of the Emerald sector which she exhibited to her witness statement. Avvocato Virga said that his recent investigations showed that there had been 13 completions in respect of units within the Emerald sector.
So far as the rest of the Main Development was concerned at that time, Ms Baiamonte effectively described it as half-built although she said that the foundations for each individual block and all the containment walls for the entire complex, including the connecting ramps between one terrace and the next, had been completed. The internal roads of the complex, plus the associated lighting, had been built.
Various photographs which appear on the Internet were placed before me. A number taken in February 2013 (and thus not long after Ms Baiamonte had visited the site) by Marie Hilliard (who appears to be someone who did complete on her purchase in the Emerald sector because the name "Hilliard" appears on Avvocato Virga's list of completed purchases) appear on a website entitled "jots-calabria.info". Those photographs undoubtedly convey the impression of a building site with a great deal more work to do.
Ms Baiamonte said in her witness statement that she understood (as indeed has been confirmed by other evidence in the case) that all further building work ceased on 5 March 2013 because the whole of the JoTS development site had been seized by the Guardia di Finanza (the Italian financial police) as part of what was known as "Operazione Metropolis". This appears to be a large international investigation into alleged money-laundering activities engaged in or facilitated by the Calabrian mafia known as the Ndrangheta. The JoTS development was not the only development site in the region seized as part as this investigatory process – apparently it embraced 17 tourist developments along the Calabrian coastline. However, the net effect, as explained by Avvocato Virga, is that the site is now in the hands of court-appointed administrators, as indeed are the building companies (see paragraphs 79 - 81). No further work has been undertaken on site since 5 March 2013 and, whilst the administrators have, according to Avvocato Virga, expressed their intention to complete the JoTS development, the position appears to be that there is no cash-flow to enable this to occur at the moment. It is, of course, very unclear when any progress will be made.
The position "on the ground" appears, therefore, to be that only 32 residential units out of those actually completed have been acquired by purchasers. That total number is, of course, a very small fraction of the total number of units planned for the overall JoTS development originally due for completion in 2009. Those who have completed their purchases in the Main Development must be surrounded by a great deal of uncompleted building and other construction work.
The significance of this is that many of the purchasers who were contemplating acquiring a property in a completed development, with all the facilities I have indicated, wanted to withdraw from the purchases. It is their actual or perceived contractual inability to do so that lies at the heart of their complaints against the lawyers they instructed.
Alleged mafia involvement
I have already referred to Operazione Metropolis (see paragraph 33 above) and the seizure of the JoTS development. I should, however, make one thing clear at this early stage in this judgment concerning the alleged mafia involvement in the development and indeed the alleged associations of Mr Harry Fitzsimons to whom I will refer later (see paragraph 39). For completeness, in order to set out the background as fully as possible for anyone reading this judgment, I have merely recited already (see paragraph 33 above) what I have been told about the Italian police investigations and their consequences and will merely recite in summary form below (see paragraphs 39 - 41) what has been reported in various media outlets about the backgrounds of some of the individuals principally involved and the allegations apparently made. It forms no part of my task to assess the validity or otherwise of those allegations.
I have been told by Mr Flenley that so far as he is aware nothing has yet been established definitively in Italy about the alleged mafia involvement in the JoTS development. However, irrespective of that it is important to understand that there is no allegation made in these proceedings that either Avvocato Giambrone or any of the other individual defendants in the proceedings have or have had any involvement in the alleged mafia activities. It is, however, the case that many documents that his firm possessed concerning this and other developments were seized by the Italian police in March 2013 in their investigation, but Avvocato Giambrone and the other defendants are not, I have been told, themselves under investigation. Furthermore, it is no part of the case advanced on behalf of the claimants that, if there was some kind of criminal "scam" or money-laundering involved in the developments in question, any of the defendants were involved in it.
The possibility of mafia involvement in the Calabrian construction industry is, however, an issue that has arisen in connection with the duties alleged to have been owed by Avvocato Giambrone and his firm to the proposed purchasers (and I will deal with this aspect of the case later: see paragraphs 421 - 439). Indeed the issue has been raised (albeit peripherally for the purposes of the present trial) by the defendants themselves by way of a partial response to the case advanced against them (see paragraphs 421 - 423).
There was a fair degree of media interest in England and Ireland at around the time of the property seizure by the Guardia di Finanza (see paragraph 33 above) and the twenty or so arrests made at the time. A number of media reports have been put before me. In summary it was said that the investigations leading to these matters began in 2008 and that Mr Fitzsimons was a "convicted IRA terrorist" who was said by the Italian police to have developed links with the Calabrian mafia in order to "funnel dirty money from the IRA's criminal activities into holiday developments in the far south of Italy." At the time of the other arrests Mr Fitzsimons was, it was said, no longer in Italy and had gone into hiding in Africa. Apparently, he was detained in Senegal and was then returned to Italy. The reports detailed the nature of what the Italian police were alleging, but they also contained very firm denials by his solicitor in Ireland of any wrongdoing in connection with these activities (which were said to be entirely legitimate transactions). His IRA past was not, according to the reports, denied. The reports name Mr Antonio Velardo as a "mafia member" whose "sudden wealth" was cited by the investigators as evidence of a close association with a source of huge funds derived from criminal activities. The reports also name Mr Antonio Cuppari as being from the "Morabito [Ndrangheta] family". One of those reports suggested that the mafia was "able to get round planning regulations by buying off corrupt local politicians".
Avvocato Charlotte Oliver, one of the claimants' expert witnesses, drew attention in a supplemental report dated 15 January 2015 to an article in a local newspaper entitled 'Corriere della Calabria' dated 5 August 2014 which referred to the ongoing criminal proceedings connected with the JoTS development and the allegations concerning the planning permission. It is recorded that six individuals, including Mr Cuppari, were to appear before a preliminary investigation judge on 9 October 2014 concerning the JoTS development. The translation of the article available is not wholly clear, but the suggestion appears to be that the prosecution were of the view that town planning and environmental offences had been committed in furtherance of a major money laundering enterprise. The gist of the allegation appears to be that the land upon which the development was to take place was originally designated as "agricultural" for planning purposes and that, by unlawful means, the designation was converted to "tourism/residential". One of those under investigation was reported to be Domenico Vitale, described in the article as "the ex officio technical manager of the Brancaleone comune", the allegation appearing to be that he played an active part in enabling the transition between the planning designations to take place but without appropriate authorisation. Domenico Vitale's name appears at the foot of the building permit dated 8 June 2007 (see paragraph 200 below) as, in effect, the responsible officer and indeed also at the foot of the new planning permission dated 21 July 2008 (see paragraph 206 below) when he appeared to have the title "technical director".
That, therefore, is the nature of the information that would be gleaned from media reports about the alleged background and the current investigations. Obviously, the overall evidential value of this material for the purposes of this trial is low. Equally obviously, all those reports post-date many of the material events that are of relevance to this case, but it is not difficult to understand why many of the proposed purchasers who have read all or some of those reports have subsequently felt that they had been led unsuspectingly into something quite different from "Living the dream in the Southern Italian Riviera" that they had been anticipating from the VFI brochure (see paragraphs 90 - 95 below).
That, however, is not what this case is about. It is essentially about whether Avvocato Giambrone's firms carried out the "due diligence" they promised and did sufficient to protect the position of the purchasers so that, when things went wrong, the purchasers could legitimately withdraw from the proposed purchases and recover the deposits paid.
I propose to say something about the procedural history that lies behind the trial over which I presided in March 2015, but before I do so I should identify the various manifestations of Avvocato Giambrone's firms at various times. This will help to put one or two of the issues into context.
Avvocato Giambrone's "firms"
Avvocato Giambrone became an Italian "Avvocato" on 27 January 2005. Giambrone & Law, his first "firm", began in April 2005. At that time he entered into a "cooperation agreement" with Cristina Poncibo, another Italian Avvocato, and they both registered as Registered European Lawyers ('RELs') with the Law Society of England and Wales. There were offices in London, Palermo and Turin, Cristina Poncibo essentially operating in Turin. (Cristina Poncibo was made a defendant to these proceedings by the Penningtons Manches cohort of claimants – see paragraphs 53 - 69 below – but shortly before the trial began, terms were agreed on the basis of which the claims against her were discontinued. She did, however, give evidence and her involvement in the events may not be without significance.)
Although many of the previously disputed issues concerning the status of this arrangement and the status of other personnel involved at various stages thereafter with the "partnership" were eventually resolved by concessions made during the trial (see paragraphs 444 - 451), Giambrone & Law was the first vehicle by which Avvocato Giambrone and those with whom he worked operated both in England and elsewhere. The status that he and Cristina Poncibo had as RELs enabled the firm to practise in England.
Discussions about the practice becoming an LLP had been ongoing since about 2006, but it was not until April 2008 that this became a reality and it is accepted that there was a transfer of the business of the previous partnership to the LLP on or about 6 April 2008. The way the matter was put to all clients of Giambrone & Law was in a letter dated 7 April 2008 the substance of which was in these terms:
"We are writing to inform you of an important development within Giambrone & Law: with effect from today, the Firm will begin trading as a Limited Liability Partnership ("LLP") under the name "Giambrone Law LLP".
This form of legal entity was introduced in 2000 and was designed to enable partnerships to expand without individual partners having to put their personal assets at risk. Such risks were considered unfair in a modern economy. Members of the LLP will be the existing Partners of Giambrone & Law, based in London and in Italy, with the appointment to Partner status of Ugo Tanda, Head of our Italian Division.
With regard to the way we work, and our staff, nothing changes. At this stage there is nothing for you to do, however we will be issuing new engagement letters in due course to reflect the new LLP status. We will try to make this exercise as straightforward as possible, but thank you in advance for your patience in dealing with this transition.
Giambrone & Law has grown remarkably since its inception and the conversion to LLP is an exciting time for the practice. The Firm will now comprise Giambrone Law LLP and its associate offices, with over 30 lawyers operating from offices in London, Manchester, Turin, Palermo and Calabria, all of whom share industry knowledge and sector expertise across borders to support our clients worldwide. Our recently opened office in Manchester is going from strength to strength and we plan further expansion in the UK and across Europe in the near future.
Today, Giambrone Law LLP is a progressive and expanding legal practice, advising corporate and private clients upon a broad range of contentious and non-contentious work, including cross-border disputes, civil and commercial litigation, international property law and corporate finance, family and private client work.
We would like to take this opportunity in thanking you for doing business with us and look forward to continuing our relationship in the future. Should you have any queries regarding our conversion to LLP please do not hesitate to bring them to the attention of your usual contact with the Firm."
The underlying partnership agreement was not referred to in that letter, but the "Members Agreement" dated 6 April 2008 records the initial capital of the LLP as totalling just over £4.955 million which was "to be provided by the Members in the ratios detailed [in the Agreement] within six months of the incorporation of the LLP together with such further sums as shall be determined by the Members as being required for the purposes of the LLP." According to the Agreement, the capital was to be provided as to just under £4.6 million by Avvocato Giambrone (90%) and just under £248,000 (5%) by each of Alessandra Bellanca and Cinzia D'Arpa. The capital assets said to form the initial capital of the LLP consisted of tangible assets of £50,000 in Italy and £110,000 in England, goodwill of £187,575 in Italy and £4,312,242 in England and work in progress of £455,624. Set against those figures were outstanding debts of just over £160,000, yielding the figure of just over £4.955 million to which I have referred.
The major proportion of this figure (over 85%) appears to be attributable to "goodwill". I do not know to what extent the LLP ever became fully capitalised, but it ceased to practise in April 2009 and at some stage subsequently went into liquidation. In fact Avvocato Giambrone has not practised in England since 2009 when restrictions were placed on his Practising Certificate. Because of the decision of the Solicitors Disciplinary Tribunal in April 2013 (affirmed by the Divisional Court in March 2014: Giambrone v Solicitors Regulation Authority [2014] EWHC 1421 (Admin)), he is no longer able to practise as an REL in England.
After the cessation from practice of the LLP Avvocato Giambrone commenced practice under the style of 'Giambrone Studio Legale Internazionale'. That is how he continues his legal practice in various offices around the world (see paragraph 75 below). Whilst he cannot carry on practice in England, an office in the name of 'Giambrone International Law Practice' exists in London.
Whilst there is no dispute that there was a transfer of the business of the previous partnership to the LLP in April 2008 (see paragraph 46 above), issues arise about the extent to which, for example, any liabilities of Giambrone & Law were passed to the LLP and, if so, the legal and practical effect. To the extent that they arise, they will be dealt with later, but it will be appreciated that some claimants will see their claims as against Giambrone & Law and some against the LLP. For present purposes, it is simply necessary to understand the different entities involved.
For convenience, however, I will frequently refer in this judgment to "the firm" or "the practice" simply as a shorthand or generic expression for whatever manifestation of Avvocato Giambrone's legal practice was involved at the time. To the extent that any changes in its identity are relevant to the disputes in this case, I will deal with those matters more specifically as appropriate.
As I have indicated (paragraph 45 above), many issues concerning the status of the individual defendants as "partners" in the above manifestations at various times were resolved by way of concessions made at various stages of the trial. Mr Flenley has invited me to conclude that these matters have now been resolved totally and that I should not be troubled to deal with resolving any apparently outstanding issue which is said to be academic. Mr Duddridge and Mr Majumdar, however, invite me to deal with one outstanding issue. They also say that the way this overall issue has been handled by the defendants is indicative of an obstructive approach to the litigation generated by the developments in question that throw light on the credibility of the case advanced by the defendants. I will return to these matters in due course (see paragraphs 444 - 451).
The procedural history
The procedural history of these proceedings has been complex and chequered, to say the least. I have case-managed the proceedings to trial since October 2014, but there was a substantial history prior thereto. I propose only to summarise that history in order to give a broad appreciation of the structure of the case as it has been presented to the court and to explain why, unusually, there are two groups of claimants represented by two separate firms of solicitors and two separate Counsel. The position of the various defendants (including the insurance cover) is also not without its complications and I will mention that briefly in the next section.
I have already indicated that most of the claimants in this case are either resident in England or the Republic of Ireland.
As will appear, the problems concerning the development of particular relevance to these proceedings started to emerge and were revealed to the proposed purchasers in early 2009 (see paragraph 209 below), but it was not until 2010 that a number of them initiated proceedings against Avvocato Giambrone's firms. There had, however, been a considerable amount of activity involving the proposed purchasers' concerns in the meantime with the emergence of various websites and Internet forums where experiences could be shared. Mr Cleere, one of the exemplar claimants, was actively involved in one of them. It was doubtless as a result of common themes emerging during that period concerning the work done by Avvocato Giambrone's firms that a number of proposed purchasers combined to bring proceedings.
As I understand it from the helpful chronology that was prepared for me by the parties' solicitors, in 2010 a large group of claimants instructed Russell & Co (a firm of solicitors in Northern Ireland) to take proceedings against Avvocato Giambrone and his colleagues in relation to JoTS and El Caribe. As will appear below, there had already been moves by certain individuals in England prior to that.
By a letter dated 4 November 2009 Mr and Mrs Jeff Edwards (who, with Mr and Mrs Michael Stretton, were proposing to purchase two apartments, one within the Beach Front development and one within the Main Development) had written to the three possible professional indemnity insurers of the LLP endeavouring to discover where any claim should be directed. This letter represented a follow-up letter to one dated 15 July 2009 that they had written to the Essex Street address of the LLP in London and various letters written to the Law Society. Eventually, on 9 March 2010, CMS Cameron McKenna, instructed by the LLP's then current professional indemnity insurers, responded inviting them to particularise their allegations so that they could be investigated either by those professional indemnity insurers or one of the others that might have been involved at some stage. Mr and Mrs Edwards and Mr and Mrs Stretton instructed Edwin Coe who wrote a detailed letter before action dated 30 September 2011. That was sent to CMS Cameron McKenna for the attention of Mr Will Sefton, who was then with that firm. By about that time or shortly thereafter Mr and Mrs Noel had instructed Edwin Coe and a detailed letter before action was sent on their behalf on 9 December 2011, again addressed to Mr Sefton at CMS Cameron McKenna. By January 2012 RPC had replaced CMS Cameron McKenna as the solicitors acting for the LLP and on 23 January 2012 and 26 March 2012 responses to the respective letters before action were sent on behalf of the LLP. During this period, Edwin Coe had acquired as clients a number of other proposed purchasers and during the first half of 2012 they were seeking the files of the clients for whom they were acting and writing letters before action in respect of their cases.
Reverting to the proceedings in Northern Ireland, during 2010 separate "lead" claimants were identified in the proceedings in Northern Ireland relating to JoTS and El Caribe. The defendants to those proceedings were the 3rd, 4th and 5th defendants in the present proceedings. Those lead claims were set for trial in April 2012 (El Caribe) and May 2012 (JoTS). I will say what happened to them below.
In the meantime other events had occurred in the Northern Ireland proceedings. I take the facts that follow from the judgment of Weatherup J in Craven and ors and Martin and ors v Bellanca, D'Arpa and Giambrone [2012] NIQB 58. It will be apparent from the title to those proceedings that there were two actions. The Craven action was a group action by 22 claimants in relation to the El Caribe development. By 2011 Russell & Co had instructions from a total of 26 proposed purchasers in the El Caribe development of whom 16 were domiciled in Northern Ireland, 7 in England, 2 in Scotland and 1 in the Republic of Ireland. In August 2011 proceedings were instituted on behalf of those claimants, but they were not progressed further pending resolution of the lead claims. The Martin action was a group action by 101 claimants in relation to JoTS of whom 61 were domiciled in Northern Ireland, 11 in England, 2 in Scotland, 26 in the Republic of Ireland and 1 in England who at the time lived and worked in Hong Kong. (According to the judgment of Weatherup J, earlier proceedings had been brought by another claimant (William Baxter) who was domiciled in Northern Ireland.) Likewise, these claims were not progressed pending resolution of the lead claims.
In passing it is interesting to note from Weatherup J's judgment that the "defendants filed an affidavit by their solicitor" (Mr Sefton) "which indicates that at the time of the transactions with which all the [claimants] are concerned the defendants practised as a partnership known as Giambrone and Law". It was conceded that "the correct defendants in any proceedings are the partnership and the LLP." That affidavit was sworn on 11 June 2012 (see further at paragraphs 444 - 451 below).
At all events, each of the lead claims was settled on confidential terms shortly before trial. This left all the other claims in the Northern Ireland proceedings outstanding. In respect of those outstanding claims, the defendants invited the High Court of Northern Ireland to conclude that there was no jurisdiction to determine those claims brought by claimants not domiciled in Northern Ireland. By a judgment given on 22 June 2012 Weatherup J concluded that that was so and declined jurisdiction in respect of the non-Northern Ireland claimants. Those claims were discontinued, but the claims of the Northern Ireland-domiciled claimants continued. I will deal with what happened to the claims that continued in Northern Ireland below (see paragraphs 63 - 66), but in respect of those claimants whose claims were discontinued in Northern Ireland some instructed Penningtons Manches (and later became the claimants in the proceedings known for short as "Main and Others"[2]) and some formed a group of self-represented litigants who instructed a direct access member of the English and Northern Ireland Bars, Dr Austen Morgan. Those claimants became known as "Brennan and Others". The proceedings (in England) were not in fact issued until 31 January 2013 and 3 April 2013 respectively (and in those cases where Dr Morgan assisted the claimants, not all the claims were commenced on this latter date).
In the meantime in September 2012 proceedings were issued (in England) in the Edwards/Stretton case and the claim in Noel was issued in January 2013.
The Craven action in Northern Ireland (involving the proposed El Caribe purchases) was listed for trial in February 2013. As I understand it, it settled on confidential terms at or shortly before trial. I am not entirely sure of the sequence of events but I have noted in the trial bundles a copy of the judgment of Weatherup J in a case of Mullan ([2013] NI QB 46) in which he decided the question of the currency in which judgment should be entered for the claimants. I assume that that decision related to the El Caribe cases.
Again, I am not entirely sure when the claimants in the Northern Ireland proceedings sought and obtained a Mareva injunction freezing Avvocato Giambrone's assets and preventing their dissipation and whether what I am about to record was said before or after such an order was obtained, but Avvocato Giambrone put this on his Facebook site:
"They thought they knocked me down, now they will see the full scale of my reaction. F*** them, just f*** them. They will be left with nothing."
He then sought an injunction seeking to prevent the claimants from disclosing what he had said on his Facebook site to the judge hearing the Mareva injunction application, Burgess J, or the trial judge (presumably in the JoTS cases that were still pending), Weatherup J. Horner J refused that application and his judgment is in one of the trial bundles and reported at [2013] NIQB 48. Avvocato Giambrone explained in his evidence to me that he was angry about the Mareva injunction.
In June 2013 the Northern Ireland proceedings concerning the JoTS claims were listed for trial. Again, those proceedings were settled on a confidential basis shortly before trial. With that, of course, all the proceedings in Northern Ireland were concluded and what remained were the various proceedings commenced in England.
At that stage, of course, there were effectively three cohorts of claimants: those represented by Penningtons Manches, those represented by Edwin Coe and those self-represented claimants who were being assisted by Dr Morgan. At some stage all the claimants assisted by Dr Morgan transferred their instructions to Penningtonss Manches and that is how the position remains. It explains the two sets of claimants, the two firms of solicitors and why Mr Duddridge and Mr Majumdar appeared at the trial for the Penningtonss Manches claimants and the Edwin Coe claimants respectively.
The pleadings became extremely complicated and there was a good deal of pre-trial activity. I will refer to it more fully if necessary at later stages in the judgment, but there are two matters of potential significance to record: first, during 2013 the Mandates (see paragraphs 137 - 149) were disclosed in various ways at various times. On 26 February 2013, in the Edwards/Stretton case, the RDV Mandates in Italian were disclosed to Edwin Coe. On 30 April 2013 the Mandate of 3 March 2007 (see paragraph 137) was disclosed in the Noel action. On 2/3 September 2013, Dr Morgan told Penningtons Manches of the existence of the two Mandate agreements involving RDV and VFI. Requests for specific disclosure of these documents were made shortly thereafter and the Mandates dated 3 March 2007 and 28 June 2008 were disclosed. Second, the Edwards/Stretton trial was settled on confidential terms on 13 November 2013.
The Edwin Coe claimants had brought their proceedings in the Queen's Bench Division. The Penningtons Manches claimants had brought theirs in the Chancery Division. In due course, but after several months, all proceedings were transferred to the Queen's Bench Division which is how the proceedings ultimately came before me. However, for present purposes, it is to be noted that very shortly after the settlement of the Edwards/Stretton case, Mr Flenley produced the Note referred to in paragraph 74 below and the proceedings thereafter have continued in the shadow of the suggested lack of insurance cover to enable the claimants to recoup any losses that they may establish as a result of establishing liability.
I will turn to that position briefly.
The Defendants and their insurance position
The insurance position of the various Defendants is, strictly speaking, irrelevant to the issues before the court. However, an unusual situation has emerged that I propose to record. Any matters arising from this will only become relevant if the claimants, or any of them, establish liability against the Defendants in one or other of their manifestations.
As will appear (see paragraph 154 below), one representation made by Avvocato Giambrone's then firm (Giambrone & Law) at the outset of any engagement by a potential purchaser prior to the formation of the LLP was that it had "professional indemnity insurance of £5,000,000", something plainly put forward to offer comfort to anyone considering instructing the firm.
However, in the first place, it seems that the cover was only for £3 million, but that discrepancy has not been explained. Nonetheless, if liability to each client was insured to the extent of £3 million, that would be more than sufficient to cover any liabilities arising in the context of the various claims made. However, the insurers (AIG) took the position in November 2013 that by reason of what they claim to be the right to aggregate the claims in relation to JoTS, only about £37,000 of the £3 million limit of indemnity for both damages and claimants' costs remained at that time, £2.963 million presumably having been used in the various settlement payments up to that time. In the affidavit of means referred to in paragraph 75 below, Avvocato Giambrone confirmed that following an order for costs made against the Defendants by the Court of Appeal on 3 November 2014 (see [2014] EWCA Civ 1562), the limit of the indemnity provided by AIG had been reached and, accordingly, that any liabilities for costs or damages in these proceedings would fall to him personally (and such other "partners" as might, in law, be responsible). There have, however, been sufficient resources for those insurers to instruct RPC as the litigation solicitors, to brief Mr Flenley and Mr Carpenter for the purposes of a trial that lasted 18 days and to bring a number of witnesses (including Notary Cardarelli) to the UK to give evidence.
In a Note prepared for a Case Management Conference on 2 December 2013, Mr Flenley said this:
"The Insurance Position
13. Another important consideration is the position taken by the defendants' insurers, AIG. This is set out in the letter from AIG's solicitors Kennedys dated 20 November 2013 …. AIG take the view that the VFI claims amount to one claim for the purposes of the defendants' insurance policy; all Jewel of the Sea claims are VFI claims; cover for Jewel of the Sea claims is therefore limited to £3 million payable in respect of damages or costs to claimants; and that all but £37,837.28 of that sum has now been paid out.
14. It should be noted that the solicitors acting for the defendants in the litigation are not Kennedys, they are RPC. RPC are neutral on whether AIG are right or wrong on their argument as to the effect of the insurance policy.
15. If AIG are right then, at least in relation to the Jewel of the Sea claims, it would appear that further prosecution of the claims may not be economic."
At a hearing on 27 November 2014 Mr Flenley told me that AIG continued to fund the defence of the partners in Giambrone & Law pursuant to a confidential agreement with them. However, as I understood it, this did not include any commitment to the payment by AIG of any costs or damages to the claimants if awarded against the Defendants. Indeed on 4 February 2015 I ordered certain costs against the Defendants (payable within 14 days) in respect of an interlocutory application only to be told that the individual defendants, including Avvocato Giambrone, could not afford to pay them and sought time to do so. The order was for £33,500 in total. Avvocato Giambrone swore an affidavit of means on 17 February 2015 setting out his financial position in support of an application for time to pay his share of the order. He was suggesting that the maximum he could pay would be €400 per month. He describes himself as the "founding partner" and "Principal/Owner" of Studio Legale Giambrone which, he says, now consists of 40 lawyers of various nationalities and about 28 support staff and has offices in London, Palermo, Rome, New York, Tunis, Milan, Berlin and Barcelona. According to his affidavit, he spends 15-20 days a month travelling between these offices at a cost of between €5,000 and €7,500 and he personally leases a Mercedes car for €800 per month in Palermo. Against that background the picture he paints of his personal finances is surprising and may, one supposes, give rise to questions at some stage. That aspect of the case was put over for consideration at a later date.
The position about the Defendants' funding of this litigation is thus unclear and in a number of respects plainly unsatisfactory. It is a most unattractive position that every point can be taken by the defendants against the claims brought by the claimants, with the risk to the claimants of having to pay the insurer's costs if the defendants succeed, but the insurers cannot be made to pay the claimants' damages or costs if the claimants succeed, the claimants having to rely in that situation upon recourse to the person of Avvocato Giambrone and/or his fellow partners (all of whom claim to be in no position to meet any such liabilities). However, as I have said, any issues arising out of this will fall to be considered only if the claimants establish liability or, of course, if the defendants challenge successfully the position taken by their insurers.
There have been issues between the parties (principally between the Edwin Coe claimants and RPC, the solicitors acting on the instructions of AIG) as to the insurance cover for the LLP. At the Case Management Conference on 2 December 2013 I understand that it was indicated to the court that because the indemnity limit had all but been reached (see paragraph 74 above), the insurers were giving serious consideration to ceasing to defend the claims against the LLP (which by then was in liquidation). That did not occur immediately and at the hearing before me in November 2014 this position was repeated. I do not think that the insurers actually withdrew from defending the claims against the LLP until shortly before the trial (and after the El Caribe claims had been settled), but at the trial the LLP was not represented by RPC and the liquidator (the Official Receiver) took no part in the trial.
The net effect of this position is that, to the extent that submissions have been made on behalf of the claimants about the potential liability of the LLP for any of the matters raised in these proceedings, no arguments on behalf of the LLP have been made.
The companies behind the development
I identified the relevant companies in paragraph 5 above. VFI was a company registered in the Republic of Ireland on 18 December 2006. Whatever personal experience Mr Velardo and Mr Fitzimons, who were named as the administrators (which I believe equates to "director" in UK company law terms) of the company, had of building and developing holiday residences, the company was obviously formed with a view to promoting the JoTS development and, of itself, had no track record in the field. This is acknowledged by Mr Flenley (see paragraph 302).
RDV was an Italian company registered in the "Sezione Ordinaria" of the Chamber of Commerce on or around 11 October 2006. The sole administrator of the company at that time was Mr Cuppari. Again, it is acknowledged by Mr Flenley that it had no proven track record at that time. It also must have been formed as the vehicle for the building of the development.
At the outset of the JoTS development it appears that the sole administrator of Veco was Mr Velardo. The documentation before the court is not entirely clear, but it seems that the company was first formed in 2001. Equally, at various times Mr Fitzsimons and Mr Cuppari both became directors and in 2010 RDV took over Veco.
How Avvocato Giambrone first became involved with VFI, RDV and Veco
I will be dealing below with the documentation that was generated in the early stages of Giambrone & Law's involvement with VFI, RDV and Veco, but it is appropriate to record what Avvocato Giambrone said in his witness statement about how the initial contact was made.
He said this:
"96. I first met Mr Velardo and Mr Fitzsimons in or around November/December 2006 at a property exhibition in London called "OPP". By then, G&L was already acting for several purchasers in connection with other similar property developments in Calabria, which were promoted by people such as Italian Connection (part of Medsea Group plc), IPL and Parador, and we had a stand at the exhibition.
97. I was personally in attendance when Mr Velardo and Mr Fitzsimons, who were visitors to the exhibition, approached me. They explained to me how they were intending to create the "biggest five-star, luxury development in Southern Italy" and that they were looking for a number of reputable law firms to refer their clients to. They told me that Mr Velardo was a property salesman, based in Cape Verde, and had worked for one of their competitors (MRI), when he met Mr Fitzsimons, who was described to me as a property investor from Northern Ireland. They also informed me that MRI, which promoted the sale of developments worldwide, used to refer their clients to a Spanish Law Firm with offices internationally. I think that this firm was called "Martines Echeverria" which was about to open a new office in Calabria.
98. I recall vividly that conversation because they both appeared to have a lot of information about G&L's involvement in Calabria as they also told me that their main concern was that we were acting for clients who were purchasing properties from VFI's biggest competitor in the region - Italian Connection. I replied in the same manner as I would have replied to any other promoter or estate agent that would have posed the same question, i.e. that we were completely impartial and independent from the vendors, that we would not pay any referral fees for clients introduced to G&L and that - in any event - such referrals should have been done purely on the basis of the good reputation and of the expertise of G&L in the Calabrian property market. I also explained that we were already acting for various clients introduced to us from various sources. In such cases, each group of clients was handled by a different group of caseworkers/lawyers.
99. During such exhibitions, it was not uncommon to meet a lot of agents and developers coming up with (they said) new and exciting developments for Calabria. I took most of what they said with a pinch of salt, because I knew that they were salesmen. After I met Messrs Velardo and Fitzsimons, I agreed with them that we (G&L) would do some preliminary research on the due diligence as I wanted to investigate some more and see whether the project was feasible before becoming involved with it."
He was not questioned about these paragraphs in his witness statement during the trial and taking them at face value it was, therefore, plainly Avvocato Giambrone's personal contact with Mr Velardo and Mr Fitzsimons that led to the "preliminary research on the due diligence" in order to "see whether the project was feasible before becoming involved with it".
He continued by saying that from January to March 2007 Giambrone & Law "undertook due diligence in relation to JoTS", the work being done by Avvocato Giuseppe Margiotta who was then based in the Palermo office. Avvocato Giambrone described him as "the son of a leading Notary in Palermo and used his father's expertise in relation to Real Estate matters". He (Avvocato Giambrone) was in London, he said, for much of the time and was informed about the results of Avvocato Margiotta's work. He referred to a fax dated 2 February 2007 sent by Avvocato Margiotta to his personal assistant, Nara Hallam, which, when giving evidence, he translated as follows:
"Hi Nara. I am sending you the documents related to the due diligence related to [JoTS] that I have received today. We have also sent to you by post the remaining documents."
He said there were 15 pages of further documentation and cited this as evidence that Avvocato Margiotta "was definitely not fluent in English". However, the fact that it was sent demonstrates the close interest he (Avvocato Giambrone) was taking in the project. I will return to this in the context of the document referred to in paragraph 97 and 99 below.
Avvocato Margiotta has not been called to give evidence. The reason, according to Avvocato Giambrone is that he left the firm in March 2008, does not want to get involved in this litigation and Avvocato Giambrone does not wish to call "an unwilling witness". That is, of course, his choice but it is unfortunate that I have not heard directly from the person responsible for the "due diligence" given the central importance in this case of the scope and conduct of that due diligence.
Nonetheless, it is tolerably clear what was and was not done in this regard by reference to the documentation that has been produced. I will return to the specific findings about this in due course (see paragraphs 440 - 443).
I will turn now to what was being said in the early stages, either by VFI or by the firm or both, about their respective involvements.
What VFI said about Giambrone & Law and what Giambrone & Law said about itself before being instructed by the proposed purchasers
VFI's glossy, coloured promotional brochure was inevitably couched in inviting phraseology including the suggestion that by purchasing a property within the JoTS development it would be possible to "live the Italian dream" at the same time as buying a property on the coast at a price which "it is estimated … will triple over the next decade." The "Welcome" page of the brochure was signed by "Antonio and Harry", presumably Mr Velardo and Mr Fitzsimons.
It also contained the following passage on page 4:
"We will provide a full legal package with qualified lawyers and handle all aspects of moving in, including any legal documentation that is required."
On the next page there was a list of the "personalised services to all our clients", one of which was "legal services" and on the next page appeared the following passage:
"As is normal good practice, the properties are built in stages, with no property being built before the foundations and services for the rest are all in place. This ensures the coherence of the development, so that the whole community will be completed and functional by the time your keys are handed over. During the inspection visit, you will be able to view the property during the building process, and our advisers will be on hand to answer questions, help you choose your furniture and arrange a meeting with our local legal team." (Emphasis added.)
The following passage appeared on page 8:
"Full advice and assistance is available at every stage. You can take advantage of Italy's low interest rates, currently 4 to 5%, while having the assurance of our independent legal team, with offices in London and Calabria, who can assist you every step of the way." (Emphasis added.)
Just below that there is a paragraph headed "Decision to buy" below which the following appears:
"If you fall in love with the place, which we have no doubt you will, a legal consultant will take you through each step, over dinner, to ensure the process to secure your dream holiday home is easy and stress-free."
When questioned about this brochure by Mr Duddridge, Avvocato Giambrone said that he was unaware that VFI were circulating it at the time and that he was unable to recall when he saw it for the first time. He did, however, accept that the references to the lawyers in the brochure were to Giambrone & Law and that he was unaware that VFI were recommending any other lawyers to proposed purchasers at that time. In his witness statement he had said this on the topic:
"As far as I am aware, we were not the only law firm who were being asked to act for purchasers in JOTS. I have already said that VFI had indicated that they were considering various firms to represent buyers and I know that other firms did so, as is evidenced by a letter from Avv. Maurizio Romolo of Studio Legale Associato Romolo-Ruggiero dated 11 November 2010 …. Avv. Romolo was acting for RDV at the time. The letter referred to a meeting to discuss the problems with the development. It was addressed to "Dear Lawyers and Buyers" and it named a number of law firms who were representing buyers.
The letter of 11 November 2010 from Avvocato Maurizio Romolo did indeed refer to other firms who "represented the buyers in the preliminary contracts", but this letter was written well over 3½ years after the initial marketing of the JoTS and El Caribe developments and does not, in my view, throw any light on what VFI was saying about which lawyers they would recommend at that time. (Incidentally, one of the firms mentioned in that letter was L'Abbate International Law Firm: see paragraph 218 below)
Another letter of potential relevance in these early stages and in this context was on Giambrone & Law's headed notepaper and addressed "To whom it may concern". It was dated 14 February 2007. It contained the following paragraphs:
"Due Diligence Report - "Jewel of the Sea" Development (Brancaleone)
We would like to confirm that Giambrone & Law, an independent firm of Italian lawyers in London, is in the process of carrying out the due diligence over the land and the development called "Jewel of the Sea".
Upon inspection of the land registry searches, we have found that the Municipality of Brancaleone has granted two building licences on the 7th July 1994 … for the building of a residential complex located in Brancaleone, and hereby referred to as "Jewel of the Sea"….
We have carried out a number of land registry searches (visure catastali, visure ipotecarie, certificate di destinazione urbanistica) to verify that the Developers have a valid title to dispose of each property in the Development, and checked the legal title of the land to ensure that the property actually belongs to the Vendor and that no-one else has any claims on the land; we have also checked that the land is not being contested in an inheritance dispute in relation to an existing will (in accordance to the strict rules of Italian inheritance law, as regulated in the Civil Code).
We can confirm the absence of pre-emption rights in favour of third parties (such as the "prelazioni agrarie per coltivatori diretti" and/or the "prelazioni urbane"). We have carried out enquiries to ensure that there are no liens, encumbrances, and rights of way in favour of third parties and that the land is legally registered with the urban registry.
Finally, we also confirm that the Developer has provided us with a sample of a "Fidejussione Assicurativa" which is a bank loan guarantee valid under the current Italian legislation in accordance to decree 122 of 2005 and is a safeguard to any potential buyers for the event of default or bankruptcy of the building company."
That letter has a potential importance in connection with the duties which are alleged to have been owed by Giambrone & Law to the proposed purchasers who instructed the firm (see paragraphs 120, 290 and 442 below), but it is the first paragraph of that letter, in particular, that is relevant for present purposes. Emphasis is laid on the "independence" of Giambrone & Law.
In his witness statement, Avvocato Giambrone said that he was "unable to recall who drafted the letter" but that he "may have had some input". I have little doubt that he did. He said that the information in the letter "that RDV owned the land on which the development was to be built" was derived from the documents sent to him by fax two weeks previously. He said that the letter was produced "at the request of UK and Irish agents for their potential clients", its purpose being "to give some comfort that Giambrone & Law were independent Italian lawyers, and to confirm what initial due diligence checks had been made in relation to JoTS". This letter was, of course, drafted before the planning permission had been granted (see paragraph 200 below) and indeed before RDV had completed the purchase of the land.
I had read that passage in Avvocato Giambrone's witness statement as meaning that the letter was intended to be shown to potential purchasers who had approached agents and who expressed a provisional interest in acquiring a property in the development. However, Avvocato Giambrone said, when questioned by Mr Majumdar, that the letter was not intended for the clients, but merely for the agents so that the agents could be satisfied that it was appropriate for them to send potential purchasers to Italy on an "inspection trip". He accepted that he had no control over what would become of the letter once in the hands of the agents, but repeated that it was not his personal intention that the letter should be seen by the clients because there were no clients at that stage. I have, of course, only been directly concerned with the 12 "exemplar" cases. Of those the letter appears in the files of Mr Cleere, Mr Nambiath, Mrs Rawson and Mr and Mrs Noel. It follows that it must have been passed on in those cases. It would be most surprising if the same did not happen in other cases and I draw that inference on the balance of probabilities.
The whole emphasis of the letter, whether seen directly by a potential purchaser or by virtue of its substantive content being mentioned by an agent to such a person, was the independence of Giambrone & Law from the developers and the professionalism they were bringing to the due diligence process. On any view, this message was intended to (and plainly did) operate as an incentive to potential purchasers to instruct Giambrone & Law.
Mr Cleere's account was that when he visited Brancaleone in June 2007 a representative of VFI (Darren Berry) introduced him to a representative of Giambrone & Law whose name he was unable to recall. Whilst speaking to that representative Avvocato Giambrone himself passed the table and Mr Cleere was introduced to him and Mr Brendan Dine (Mr Klingenberg's brother). Avvocato Giambrone recalls meeting Mr Cleere. Mr Cleere says that he was told that Giambrone & Law were established in London, regulated by the UK legal authorities and for that particular reason the firm and the service it provided could be trusted. Avvocato Giambrone was, according to Mr Cleere, "very much presenting himself as a trustworthy English law firm that was regulated in England and was insured in the event of anything going wrong … [and that] … was why we should choose them in order to conduct this transaction."
This was very much of a piece with what VFI had been putting forward about Giambrone & Law and plainly represented the reassuring message that both VFI and Avvocato Giambrone wished to convey.
Mr Cleere said that it gave him confidence. Others have said so too. Avvocato Giambrone accepted that there was a promotional aspect to the fact that Giambrone & Law had offices in Calabria and in London because this would be seen as an advantage to clients.
There can be absolutely no doubt that everything said on behalf of the firm during this period was designed to convey to potential purchasers that it (a) was experienced in transactions of the nature involved, (b) had the required level of expertise in the field to ensure that the purchasers' interests were protected, (c) was independent of the promoters/developers and (d) was regulated in England and Wales as well as in Italy and that, accordingly, the purchasers could be entirely sure of their professionalism and adherence to correct professional standards.
That essential message was also conveyed in the "retainer letter" and associated documents to which I will be referring in due course (see paragraphs 151 - 154).
Before turning to further features of the chronology, it would be helpful briefly to review the processes involved in purchasing a property "off plan" in Italy.
The procedure for purchasing a property "off plan" in Italy
An important feature of the legal picture concerning the purchase of an off-plan property in Italy is provided for by Legislative Decree No. 122 of June 20, 2005. Because of the importance of this I will deal with it separately (see paragraphs 120 - 136).
Before outlining the procedure adopted in Italy, I should record the position about lawyers acting in the transaction. In the English system it is normal for the purchaser and vendor to be represented by different solicitors in the conveyancing process. The position is different in Italy where the legal system is based on a civil code. The whole conveyancing transaction (called the "compravendita") can be negotiated freely between the parties and all the rights and obligations of the parties are set out in the Civil Code which provides remedies for breach of the contract. Neither party is required by law or by established practice to be assisted or represented by a qualified lawyer.
However, for a property sale to be valid, the final contract or deed of sale (the "rogito") must be in writing and ordinarily in the form of a public deed of sale witnessed by a Notary Public and recorded in the Notarial Archives. The Notary is acting as a neutral and impartial public official responsible for ensuring that all legal requirements in relation to both vendor and purchaser have been complied with. The Notary arranges for the payment of stamp duty by the purchaser and deals with the registration of the public deed at the Land Registry. Since the Notary is a highly respected public official who is expected to ensure that the transaction complies with the law it is not usual for parties to be assisted by their own lawyers.
The first step in any purchase is usually the payment of a relatively small initial reservation payment ("acconto") to the vendor or his agent by the purchaser at the same time as the signing of an offer proposal by the purchaser ("proposta di acquisto") or a Reservation form. Ordinarily, the acconto is refundable up to the time that the purchaser signs the offer proposal. In a number of the cases involved in the present proceedings the acconto was refundable in certain other circumstances, but that was as a result of specific negotiations.
In a normal conveyancing transaction, once the offer proposal setting out all the essential terms of the contract required by law, including the sale price and the date fixed for completion, is then signed by the vendor and that acceptance is communicated to the purchaser, the parties are contractually bound to complete the transaction. However, an off-plan purchase is subject to the provisions of Decree 122/2005 which requires the provision of a guarantee at the same time as a detailed preliminary contract ("Contratto Prelimanare di Compravendita Immobiliare") is signed (see paragraphs 155 - 188 below). Such a guarantee has been called a "bank loan guarantee" in this case. There has been a suggestion, particularly by Avvocato Oliver, that the title is misleading (which indeed Avvocato Giambrone accepted). Indeed it does not describe accurately what must be provided (see paragraph 122 below) and it sounds more reassuring as expressed than the reality. However, nothing really turns on it for the purposes of the issues in the case and it has been used as a convenient shorthand by everyone.
The next stage is, therefore, the preliminary contract. This should contain all the terms and conditions required by law, together with the provision of the requisite documents including the guarantee. At the stage of the signing of the preliminary contract there would be a payment by the purchaser of a further advance payment to the vendor, which would normally, together with the acconto, constitute the confirmatory deposit (the "caparra"). This is regulated by Article 1351 of the Italian Civil Code.
With an off-plan purchase there may be further staged payments to be made at specified stages of the works or the final payment is made upon completion. At all events, when there is final, certified approval of the completed building project payment of the balance of the sale price takes place together with the legal transfer of all rights and obligations of ownership and possession to the purchaser, all witnessed by the Notary (see paragraph 110 above). The vendor is required to provide a 10-year guarantee against defects in the property.
As will be seen (see paragraph 118), the payment required at the preliminary contract stage in the transactions with which this case is concerned was 50% of the total purchase price and 50% on final completion.
The legal position if a guarantee is provided that is not compliant with Decree 122/2005 is potentially of importance in this case. I will return to it in due course (see paragraphs 397 - 420).
The initial deposits paid by the purchasers in this case
The opportunity to reserve a property existed by the payment of an initial deposit of ?3,000. This was the acconto (see paragraph 111 above).
The form that each completed (called Real Estate Purchase Proposal – "Proposta d'acquisto immobiliare") was in substance as follows:
"Terms of payment
By signing this Real Estate Purchase Proposal, the client deposits the sum of:
With VFI (hereinafter known as the reservation deposit and non refundable) to be set against the full purchase price, with the balance to be paid as follows:
A: 50% on signing of Preliminary Contract Date (approx) …
… D: 50% on transfer of title. Date (approx) 01/07/09
Developers forecasted completion date: June 2009
…
It is understood that:
1. With effect from the completion date the buyer will acquire full freehold ownership of the said property.
2. As soon as this Real Estate Purchase Proposal is accepted by the vendor, the buyer agrees and authorises VFI to send this Purchase Proposal to the legal representatives to draft the corresponding Preliminary Contract.
3. As soon as this Real Estate Purchase Proposal is accepted by the vendor, the reservation deposit will become non refundable except in the case of non fulfilment by the vendor. In this event, the deposit will become fully refundable and the buyer may obtain legal compensation in accordance to the Italian civil code.
4. Should it not be agreed otherwise, the property will be delivered upon completion, free from debts, charges, liens and encumbrances.
…
8. The purchase of the above Property and this Real Estate Purchase Proposal are regulated by Italian law."
Some, but not all, Real Estate Purchase Proposal forms contained a "Special Condition" concerning the acconto in the following (or similar) terms:
"This reservation is refundable if you decide on your viewing trip you do not wish to proceed and the viewing trip is taken within 30 days of reservation."
The requirements of Decree 122/2005 and whether it was complied with
A number of the exemplar claimants said (hardly surprisingly) that they were greatly attracted by what VFI told them about the bank loan guarantees which led them to believe the payment of the deposit of 50% of the purchase price was safe. In VFI's brochure, it was said that "[all] apartments have 100% bank guarantee, an insurance bond which gives full surety no client will risk any money." That, of course, was a "sales pitch" by VFI but it will be recalled that the letter from Giambrone & Law dated 14 February 2007 (see paragraph 97 above) referred to the bank loan guarantee (a "Fidejussione Assicurativa") valid under the Decree as "a safeguard to any potential buyers for the event of default or bankruptcy of the building company". It was a matter emphasised in the subsequent "retainer letter" (see paragraphs 151 - 154 below). It was, therefore, a "sales pitch" to which the firm was prepared to lend authority by its own statements. The word "default" does suggest that something less than simply the financial destitution of the company leading to bankruptcy could be the trigger for the operation of the guarantee.
In his initial report Notary Francesco Valente gave a helpful background to the reasons for the introduction of Decree 122/2005 with which there was little, if any, disagreement by the other experts. He said that before its introduction there were serious problems for purchasers of buildings "off plan" where the builders became insolvent. Following a declaration of bankruptcy of the builder, the purchasers and the partners in the building venture lost all rights to the transfer of ownership of the relevant buildings even if the construction of the building was already completed and even if the building was already occupied. Article 72 of the bankruptcy law allowed the liquidator or administrator to dissolve the preliminary contract which led to repossession of the property and its resale at auction. The purchaser could only compete with other potential purchasers in order to try to win it back. Purchasers who had paid reservation payments or who had even paid the price in full prior to the execution of the notarial deed were treated merely as unsecured creditors in the bankruptcy.
It was this unsatisfactory background that the Decree was designed to rectify. The relevant provisions (as translated into English) are as follows:
"Article 2.
Surety
1. Upon the conclusion of a contract which has the purpose of the non immediate transfer of ownership or other real right of enjoyment of a property to be built or an act having the same purposes, or at an earlier time the builder is obliged, on penalty of voiding the contract, which can only be enforced by the purchaser, to obtain a surety and consign it to the purchaser, also in accordance with Article 1938 of the Civil Code, for an amount corresponding to the sums and the value of any additional settlement that the builder has received and in accordance with the terms and conditions laid down in the contract, must still receive from the buyer before the transfer of ownership or other real right of enjoyment. The amounts which it is agreed should be provided by an individual lender, as well as government grants already secured by autonomous guarantee are excluded.
2. For cooperatives, the act equivalent to that referred to in paragraph 1 shall consists of one with which sums have been paid or obligations assumed with the same cooperative for the assignment of ownership or purchase of a real right of enjoyment of a property to be built on the initiative of the same.
Article 3.
Issue, content and procedures for enforcement of the surety
1. The surety is issued by a bank, insurance company operator or financial intermediaries registered in the special list described in Article 107 of the Consolidated Law on Banking and Credit, referred to in Legislative Decree 1 September 1993, No. 385, as amended and it shall ensure, in the event that the builder incurs a crisis situation referred to in paragraph 2, the return of the amounts and the value of any additional consideration actually received and legal interest accrued until the moment in which the aforementioned situation has occurred.
…
7. The surety shall cease to be effective at the time of the transfer of ownership or other real right of enjoyment of the property or the definitive act of assignment."
Whilst there is a debate about the extent to which it matters for the purposes of the issues in the case, it is clear that the "surety" should be issued by an institution "registered in the special list described in Article 107 of the Consolidated Law on Banking and Credit" for it to comply with the Decree. It is common ground that checking whether a financial institution is registered under Article 107 is very straightforward and simply requires going to the Banca d'Italia website, inserting the name of the institution and checking whether it is registered on the Article 107 list. There is also a list of other financial institutions registered under Article 106. Article 106 is not, of course, referred to in the Decree. It is, I understand, possible for an institution to have been registered on both lists.
Notary Valente and Avvocato Oliver said clearly that the requirements for registration under Article 107 were more stringent than under Article 106. In her Supplemental Report she said this:
"There were far more rigorous requirements for a bank or financial institution to be listed on the special roll under Art. 107, for example much higher paid up share capital was required. Less rigorous requirements were necessary for those seeking to be registered on the general roll under Art. 106."
I did not understand Notary Cardarelli to dispute this. I accept it.
It is common ground that for any such guarantee to give effect to the intention behind the Decree, it must remain enforceable until completion of the purchase: it would offer no protection otherwise.
Avvocato Oliver characterised a guarantee provided by an Article 106 institution as a "second class" type of guarantee and that such a guarantee was much cheaper to obtain and required a far lower premium to be paid by the seller of the property. Notary Valente said in reply to a question from Mr Flenley that the risk sought to be covered by an Article 106 guarantee was the same as if given by an Article 107 institution, but the guarantee was "greater" if given by the latter type of institution. That accords with the increased stringency of the qualifying requirements for Article 107.
As will appear, in all the exemplar cases there was an initial guarantee, but in some a second guarantee was provided. Indeed in three cases, a third guarantee was provided. (A summary of the position appears in Appendix 2 to this judgment.) The reasons for this will become apparent later (see paragraph 409). In all cases the initial guarantees were issued by institutions registered under Article 106 (not Article 107) and the guarantee indicated that that was so in the small print on the face of the guarantee. Indeed all guarantees issued at any stage were issued by institutions on the Article 106 list, but it is said that some of those institutions might have been on the Article 107 list also. It is accepted on behalf of the defendants that the guarantees supplied should have been obtained from financial institutions which were registered on the Article 107 list. It is also accepted that the firm should have told the claimants that the guarantees did not comply with Article 3.1 and that it was negligent not to have done so.
Most of the initial guarantees issued to the exemplar claimants were issued by Industria e Finanza SpA or Gioia Fin SpA and all the second guarantees were issued by Fingeneral SpA. Each of these institutions, according to Avvocato Oliver, were known as "financial intermediaries" and were among 100 or so such institutions to be removed from the Article 106 list during 2009 for failure to comply with a number of requirements specified by Italian law. According to newspaper reports she found, Industria e Finanza SpA was being prosecuted in a substantial fraud involving fraudulent financial services in Italy and overseas and Fingeneral SpA, which went bankrupt in 2010, was the subject of a criminal investigation into the issue of fraudulent guarantees in very significant sums between March 2008 and September 2010.
I will return later to the significance in the context of this case of the guarantees having been issued by Article 106 institutions, but it is accepted by all the experts in Italian law that the preliminary contract is voidable at the option of the purchaser if the guarantee that is provided is not issued by an institution registered under Article 107.
Against the background that all proposed purchasers will have gained comfort from believing they had a watertight guarantee concerning their deposits, it will be appreciated that when things started to go wrong (see paragraphs 209 - 211 below), the guarantees became an immediate focus of interest.
Before leaving the terms of the Decree, it should be noted that the expression "crisis situation" is defined in Article 3(2) as follows:
"'crisis situation' means the situation that occurs in cases where the builder has undergone or been subjected to foreclosure, in relation to the property subject of the contract, or bankruptcy, extraordinary administration, agreement with creditors, compulsory administrative liquidation …"
As will be apparent later (see paragraphs 232, 240 and 254), the nature of the advice given by the defendants about the bank loan guarantees varied and the essential issue will be whether the nature of the advice is or was material to the decision to proceed with the purchases. It was accepted by Notary Valente that the circumstances necessary to trigger recourse to the guarantees (namely, a situation of crisis or insolvency as defined) have not in fact arisen in this case. It would seem that the appointment of court-appointed administrators does not fall within the definition of a "crisis situation" and indeed, according to Avvocato Virga, the existence of the judicial administration would prevent the company from being made insolvent. Mr Flenley submits that it follows that, even on the assumption that the guarantees were defective, the claimants would now be no better off even if they were in possession of fully enforceable guarantees because they could not call on the guarantees for payment. This is part of his SAAMCO argument.
I will return to the SAAMCO argument later (see paragraphs 331 - 356), but the way the claimants put the argument concerning the allegedly defective bank loan guarantees is, I apprehend, somewhat different and will need addressing in that different context. In short, what is said is that had the proposed purchasers been told that the guarantees did not conform to the decree, it might have had an impact on their willingness to proceed with the purchase, either as a sole reason or as part of a wider concern that insufficient safeguards were in place to protect their deposits.
There is also a separate issue concerning the circumstances in which the deposits were paid out by the firm which may turn on the validity or otherwise of the guarantees (see paragraphs 397 - 420 below).
There is another area of concern (not revealed to the purchasers until after they had committed themselves to the preliminary contracts) arising from a potential area of conflict of interest between the firm and their clients arising from what the firm knew about the arrangements between the builders and the developers. It is not disputed as a matter of principle that the defendants should not place themselves in a position of conflict of interest or duty, but it is denied that they did do so. This issue can be introduced by reference to the "Mandates".
The Mandates
As indicated above, the vendor/builder of the Main Development was RDV. On 3 March 2007 RDV and VFI entered into a written agreement (which has been called the '2007 JoTS Mandate') which set out the terms on which VFI was to be paid by RDV for the promotion of the JoTS development. As will be seen, Giambrone & Law also joined in this agreement to some extent and that involvement has given rise to criticism – or, more accurately, the failure to disclose the involvement has given rise to criticism – by the claimants. I will, however, set out the relevant terms of this Mandate (and the other Mandates) first.
The Mandate was apparently executed in Italian and English. What appears below is deduced from the English part of the Mandate. RDV and VFI are referred to as the "Principal" and "Agent" respectively (and are defined jointly as "The Parties") and Article IV is in the following terms:
"The PRINCIPAL agrees to pay the AGENT, a commission for the amount of 31% of the sale price of the Building Complex's units…. The parties expressly take note of the Commission due to the AGENT will be kept safe in a fiduciary deposit at law firm "Giambrone & Law" to whom the AGENT gives expressly Mandate according to the under mentioned article V and will be released in favour of the AGENT only following the written ratification of the preliminary contract by Mr Antonio Cuppari and released of a regular Invoice to the PRINCIPAL …. The Parties agree in the event that any client should cancel the purchase of any Building Complex's unit, before signing the preliminary contract, that the 3,000 Euros reservation fee paid at the signature of the Reservation ("the deposit"), in case that for any reason no restitution shall be paid to the client, shall be kept by the AGENT to cover any cost relating to the sale promotion of the particular property relating to the client and the said property will be offered for resale to another client.
The eventual deposit will be kept safe in fiduciary deposit at the law firm "Giambrone & law" according to the following article V and will be released in favour of the AGENT only following the release to the PRINCIPAL of a regular invoice."
Article V was in these terms:
"By the signing of the present agreement, V.F.I., Overseas Properties Real Estate Agent Limited gives – and RDV srl takes note – irrevocable Mandate to Giambrone & Law International Law Practice, main office in London, to collect in a fiduciary deposit on its own non interest bearing deposit account the deposit and the commission due to the AGENT.
The law firm "Giambrone & Law" – which undersigns this agreement through its own legal representative Avv. Gabriele Giambrone – takes note and undertakes to release the deposit and the commission due to the AGENT only following a written ratification of the preliminary contract by Mr Antonio Cuppari and the issuing of a regular Invoice from the AGENT to the PRINCIPAL.
All fees, rights and commission and expenses pertaining and relative to this Mandate agreement and due to the Law firm Giambrone & Law will be paid only by the AGENT. The company RDV srl should not pay anything at any [time] to the Law firm Giambrone & Law."
Article IX (with the heading "Privacy and Confidentiality") is as follows:
"The Parties undertake not to disclose any information relating to the Agreement to any third party or others without first obtaining written consent by the other Party."
Article XI contains the following provision:
"This contract is also undersigned by Avv. Gabriele Giambrone, as legal representative of the law firm "Giambrone & Law" to accept the duties stated in Article V of this agreement."
Just below the foregoing provision, and apparently part of Article XI, are the words –
"Attached:
1. copy of reservation form.
2. copy of preliminary contract form."
In fact in the papers before the court there are no documents attached to the copy of the Mandate.
Avvocato Giambrone also confirmed in his evidence that the Mandate agreement would have been discussed with RDV's lawyers by Avvocato Margiotta on behalf of Giambrone & Law because it was he who was dealing with the drafting of the preliminary contracts. I see no reason to doubt that. Since, according to Avvocato Giambrone, the mechanism of payment set out in the Mandate was reflected in the preliminary contracts it would have been necessary for these discussions to have taken place and agreement in principle to the terms of the Mandate secured. He signed the Mandate on behalf of Giambrone & Law and was content to do so.
On 25 June 2008, and thus after Giambrone & Law had become an LLP (see paragraph 46), an agreement (also called a Mandate) in similar terms was signed on behalf of the LLP by Avvocato Francesco L'Abbate instead of Avvocato Giambrone. Nothing really turns on the terms of this agreement save that the terms as to commission were as in the 2007 Mandate.
The owner/builder of the Beach Front development was Veco. A similar, though not identical, Mandate (the 'Veco Mandate') was entered into in relation to that part of the JoTS development which set out the terms on which VFI was to be paid by Veco for its promotion. Although the Veco Mandate was undated it was sent by fax to Giambrone & Law on the 19 June 2007 which suggests it had been completed shortly before then. It referred to Veco and VFI as "Principal" and "Agent" respectively (again defined as jointly "The Parties"). Article IV of the provided, inter alia, as follows:
"The PRINCIPAL agrees to pay the AGENT a commission for the amount of 31% of the sale price of the Building Complex's units (hereinafter "the Commission") to be paid from the AGENT'S clients at the signature of the preliminary contracts, excluded VAT.... The parties expressly take note of the Commission due the AGENT will be safe kept in a fiduciary deposit at law firm "Giambrone & Law" to whom the AGENT gives expressly Mandate according to the under mentioned article V and will be released in favour of the AGENT only following released of a regular invoice to the PRINCIPAL … The eventual deposit will be safe kept in fiduciary deposit at the law firm "Giambrone & Law" according to the following article V and will be released in favour of the AGENT only following the release to the PRINCIPAL of a regular invoice."
Article V provided as follows:
"By the signing of the present agreement [VFI] gives - and the company [Veco] takes note - irrevocable Mandate to Giambrone & Law International Law Practice, main office in London, to collect in a fiduciary deposit on its own non interest bearing deposit bank account the deposit and the commission due to the AGENT."
The Veco Mandate was not in fact countersigned by anyone acting on behalf of Giambrone & Law, but it seems plain that the firm acted in accordance with it when necessary. In his evidence Avvocato Giambrone said that the firm was treating Veco exactly as it was treating RDV and that the "transactions in respect of Beach Front were handled in the same way as the transactions for JoTS were handled."
I will return to the relevance and effect of the Mandates in due course (see paragraphs 357 - 396), but it is quite plain that as at the date they were signed on behalf of the firm the firm was fixed with knowledge of the level of the commission payable to VFI and consequently the proportion of the 50% deposit paid by the purchaser to the builder, RDV.
The first substantive letter received by a proposed purchaser after paying the initial deposit was what has been called "the retainer letter" and I will turn to its contents.
The "retainer letter"
Once a potential purchaser had paid the initial deposit of €3,000 VFI would notify Giambrone & Law and a letter would be sent to the potential purchaser. There were some minor variations between the letters actually sent to the various individuals, but in substance they were the same and one in the following terms (in fact sent to Mrs O'Connor on 22 May 2008 when the LLP was in existence) was typical:
"Re: Purchase of your property in Calabria
We have been passed your details from VFI following your reservation of a new property in Jewel of the Sea (Calabria).
Giambrone & Law LLP is one of the leading Italian Law firms in the United Kingdom and Ireland and we have a dedicated department specialising in Italian Real Estate law and off-plan property acquisitions.
We have been requested to complete the necessary due diligence over the development, issue the Preliminary Contracts and to advise you in relation to the legal aspects of the aforementioned purchase. We have experience in advising a growing number of foreign investors in the Calabrian market, which is now fast becoming one of the "hot spots" in the Italian real estate market, with prices increasing rapidly.
Our lawyers from the London office have visited the area of Calabria and met with the representatives of VFI and of the Builders in order to discuss the legal aspects of these new developments in more detail.
Moreover, we will soon be opening a new office in Reggio Calabria: we hope to build a long relationship with you and be able to advise you on all different aspects of Italian law after you complete your purchase in Italy.
A brief overview of the purchasing process
Although we may been recommended to you by the Promoters, we wish to emphasise that our Italian Lawyers are completely impartial from any other party associated with this purchase and therefore we will act solely in your best interests and advise you on all aspects of Italian law which will be relevant to your purchase.
The initial part of our remit is to carry out the customary due diligence over the Development and draft the Preliminary Contract in compliance with the provisions of the Italian Civil Code and local legislation. Our Italian Lawyers have already requested a number of documents to enable us to carry out the due diligence over the Limited Company which is building the Complex.
We have already carried out a number of land registry searches, called visure catastali, visure ipotecarie, and check the certificate di destinazione urbanistica, to verify that everything stated in the initial draft of the Preliminary Contact is correct.
We will also check the legal title of the land to ensure that it actually belongs to the Developers, that no-one else has any legal claims over it, and that this land is not being contested in an inheritance dispute. We will check for the absence of pre-emption rights in favour of third parties (such as the "prelazioni agrarie per coltivatori diretti" and/or the "prelazioni urbane"). If the Developers have obtained a mortgage to fund part of the project, we will need to inspect copies of any relevant bank documents to ensure that any legal charges in favour of the lenders will be removed prior to completion.
We would routinely carry out enquiries to ensure that there are no liens, encumbrances, and rights of way in favour of third parties and that the land is legally registered with the urban registry, and, furthermore, that valid planning permission is in place for the project to go ahead.
We will ensure that the Builders/developers or the Promoters will provide us with a copy of a "fidejussione banacaria", which is now mandatory in certain circumstances: this is a bank loan guarantee that has to be provided by them so that, in the event of bankruptcy, we can claw back any funds anticipated at this stage directly from the guaranteeing Bank.
We will draft a Report on Title which will give you a clear idea of the legal status of the apartment that you wish to purchase and of the land upon which it is being built. At the same time, the final version of the Preliminary Contract will have been prepared by our lawyers and it will be sent to you for your consideration. Our documents are always drafted in Italian and English so that you will know the exact content of what you are required to sign: however, it is important to note that only the Italian version of the Contract will be legally binding.
Our professional fees
…
All our lawyers in the London office are regulated by strict rules of conduct imposed by the Law Society (England and Wales) and we have professional indemnity insurance of £5,000,000 for your extra peace of mind. You can rest assured that we will constantly strive to provide you with the highest level of service possible.
…." (All emphasis as in original.)
A letter sent to Mrs Manning on 1 June 2007 (prior to the formation of the LLP) was in more or less identical terms.
This letter is, not unnaturally, the focus of a fair amount of the argument in these exemplar cases about the extent of the retainer undertaken by Giambrone & Law and/or the LLP. I will return to these matters in due course, but it is to be noted that the firm describes itself as "one of the leading Italian Law firms in the United Kingdom and Ireland". The essential formula for the letter was drafted in the first half of 2007. By that time Avvocato Giambrone was aged 30 and had been an Italian "Avvocato" since January 2005. Giambrone & Law was founded in April 2005, his "co-partner" at the time being another Italian Avvocato, Cristina Poncibo (see paragraph 44). The foundation for the suggestion that within two years the firm had acquired the reputation suggested in the letter is somewhat slender, but it demonstrates an ability to put a very positive "spin" for marketing purposes on what at that time must have been relatively insubstantial material.
The letter contains the reference to £5 million of professional indemnity insurance to which I made reference in paragraph 72 above. As I have said, I will return to a more detailed analysis of this letter later (see paragraphs 293 - 303).
The preliminary contract and 'Report on Title'
The letter sent to clients in which the Preliminary Contract was sent said that it enclosed two copies of the preliminary contract in Italian (duly translated into English), a cover letter of advice, a Report on Title (with full legal explanation of the content of the contract) and an invoice for the professional fees. The request was that both copies of the contract should be returned duly signed (together with the deposit) within 14 days.
The retainer letter had said that the firm would have drafted the preliminary contract (see paragraph 151 above). There was an issue (no longer pursued) as to whether the contracts were drafted on the instructions of the vendors or promoters. Avvocato Giambrone said in his witness statement that the preliminary contracts were the product of negotiation between the firm and RDV's lawyers. I see no reason to doubt that, not simply because it was not challenged, but because it is inherently plausible. There is some question about whether there has been full disclosure about this period of the history of this overall enterprise, but it seems to me to matter little in relation to the issue in question. Nothing, as it seems to me, arises directly from precisely how the preliminary contracts were drafted. The more important question is whether they protected the interests of the proposed purchasers adequately, but I will deal with that separately (see paragraphs 167 – 171, 186 and 322). So far as the contract itself is concerned, it might be observed that Notary Cardarelli said that it was a badly drafted contract.
The "cover letter of advice" contained the following paragraph of relevance relating to the funds required to pay the deposit:
"We will keep these funds in our Client account in London until the enclosed Preliminary Contracts have been signed and executed by both parties and the bank loan guarantees have been issued ..."
The other paragraphs of relevance in this letter were as follows:
"We have now completed the final stages of our Due Diligence in relation to the purchase of your new property in Calabria, within the "Jewel of the Sea" residential complex in Brancaleone.
…
As the exchange rate between Euro and Sterling seems particularly favourable during this period, it may be worth considering the possibility of stipulating a "Fixed Term forward Contract" with the Currency Broker for the forthcoming Payment of the Total Price.
…
For the avoidance of any doubts, it is not within our remit or competence to advise you as to whether you should enter into a Forward Contract now, because the currency market is very volatile and the exchange rate could even become more favourable in the future: you must discuss this option with a professional who deals with currency trading and decide independently as to whether this product is suitable to your own financial circumstances.
…
We will only be able to advise you in relation to legal aspects of the purchase and, if you have any enquiries about any other aspect of the transaction (for example: size of the rooms in your property, depth of the swimming pool, and so on), please liaise directly with the Promoters (VFI) as they will be delighted to answer your queries." (Emphasis as in original.)
It contained a paragraph that stated that by transferring the required deposit to the firm's Euro Account the purchaser was authorising the onward transmission of the commission to the Promoter.
There seem to have been several versions of the Report on Title on JoTS. In substance each probably amounts to the same thing, but I will mention the differences.
Each version starts with a paragraph entitled 'Introduction' with the following text:
"Giambrone & Law has independently carried out the due diligence in relation to [JoTS] promoted by VFI … and has also carried out a multiple object investigation aiming at determining the feasibility of the targeted purchase and at reviewing the clauses of the Preliminary Sale Agreement for Immovable Property) prior to the exchange between the client and the Vendor"
The meaning of the expression "multiple object investigation aiming at determining the feasibility of the targeted purchase" has been the subject of debate at the trial and I will return to it (see paragraphs 306 - 311).
The Report on Title describes the "Vendor" in the following way:
"Based on the information supplied to us by the developers, and our own legal and administrative verifications, as well as the attendance of two lawyers of our firm to Calabria to inspect the site where the Complex is due to be built, aiming at establishing the real existence of such a project and the current legal status of the land, we have verified the following information in relation to the Promoter and the Vendor."
"The Promoter" is said to be VFI and "The Vendor" is said to be RDV and the following information is given:
"We have checked the legal status of Italian RDV s.r.l., where "s.r.l" stands for societa a responsabilita limitata: this is the Italian equivalent of a Limited company in the United Kingdom.
…
The Company has 2 administrators, the Managing Director being Mr. Antonio Cuppari, born in Brancaleone (RC) on 17th March 1964. He therefore has the necessary authority to sign a Preliminary Contract on behalf of RDV s.r.l., hence the legal power to enter the company into a valid agreement under the rules of Italian company law. The Promoter acts as an attorney of the Company and he has the legal power to sign it on behalf of the Vendor.
…
In this instance, we have verified that R.D.V s.r.l. has, within its statutory powers, the faculty of buying and selling real estate and properties in Italy, as well as other ancillary faculties such as renting properties, management of residential complexes and similar activities related to property disposition and management.
…
We confirm that those parties mentioned in the Contract actually own the land and have conferred to the Promoter the task of promoting the residential complex to the overseas market and selling it off-plan. We have ascertained that the Promoters are acting in their capacity as "mandatari senza rappresentanza".
The contract of "Mandato" is an Italian type of contract which is similar to the "agency agreement" under English law, and is regulated by articles 1703 – 1730 of the Italian civil code. In particular, VFI Overseas Properties Real Estate Agent Limited is acting as an agent of the Building Company (mandatario) and it has the legal faculty to do so, under art. 1704 of the civil code: they have the faculty to legally bind the developments in completing the construction of the complex within the agreed timescales under the terms of the current agency contract."
The Report on Title goes on to describe the Preliminary Contract and says that it does not confer ownership, merely an obligation on the part of the Vendor to "build the complex and transfer the ownership of the agreed property to the buyer and upon the buyer to pay the agreed price at the agreed timescale". It said this:
"Once the contract has come into being neither side is free to withdraw without penalty. The Buyer pays a Deposit (defined in Italian as 'Caparra confirmatoria') to the Seller. If the Buyer changes his mind before completion, he/she will lose this money. If the Vendor does so, he/she must pay the Buyer an amount equal to double the value of the 'Caparra'.
The Italian off-plan legislation has been updated recently with the introduction of Legislative Decree n.122/05 that has imposed a number of compliance issues and burdens upon the Developers of an off-plan Residential Complex to protect the Buyers. Under the terms of Decree n. 122 for a Preliminary Contract to be valid at the time of exchange, the Developers must present a request for planning permission to the local authority ("Richiesta di Permesso di Costruire") and must provide a bank loan guarantee for all funds received in deposit by the potential Buyers: we have supervised that the Developers are fully complaint with the requirements of Decree 122. Furthermore, the decree also states that a 10-year guarantee against any building defects must be provided when the Notarial deed is signed."
The reference to "double the value of the 'Caparra'" is a reference to the position under Italian law (agreed by the experts and based upon section 1385 of the Italian Civil Code) that the buyers would have the right to claim double the deposit from the vendor for any failure to complete the contract. Recovery of such a sum, of course, would depend upon the vendor having the resources with which to meet the liability (cf. paragraph 262 below).
An issue relates to the provision in the preliminary contract concerning the "certificate of habitability" referred to in the Report on Title (see paragraph 171 below). It is convenient to deal with it here. Avvocato Oliver described such a certificate in these terms and I did not understand there to be any dispute about the description:
"The Certificate of Habitability is a document which was introduced in new building laws which entered into force in 1994. This would be issued to newly built properties, by the Comune as well as to properties which undergo major renovations, such as the addition of new kitchens and bathrooms. Many factors are pertinent to the issuing of this certificate, including the height of ceilings, no. of bathrooms per square meter of the habitation, gas and water supplies etc."
Clause 5.5(d) of the preliminary contract provided that the purchaser was bound to complete the purchase even if there was no certificate of habitability in place. It was expressed in these terms (which do not translate very well, but the import is clear):
"… the certification of habitability that the VENDOR will undertake to request at its own care and expense, as soon as possible has not been granted within the date established by this article at the signature of the final Notarial deed. The BUYER therefore undertakes to receive the handing over of the building and proceed to stipulate the final contract of sale, regardless of the issuing of the certification of habitability, of the finishing of the works indicated in the above points of this article and/or of any eventual imperfections in the final touches of the building, remaining commitment of the vendors to finish them."
Avvocato Oliver expressed the view, mirroring the view of Notary Valente, that it would not be usual or correct to include such a clause in a contract for a new construction since it implies that the buyer is agreeing to purchase a property that had not yet been finalised in accordance with the building regulations and planning laws and thus not declared legally habitable. She said that a property without such a certificate would be more difficult, or even at worst impossible to sell, and it could have an impact on its market value. I do not think that, in principle, Notary Cardarelli disagreed with this analysis.
Notary Valente agreed that by law, the builder is obliged to apply for the certificate of habitability within 15 days of completing the building works and that if there is no objection to the application within 60 days it is deemed to have been granted unless the council requires further information. Upon the basis of this Mr Flenley submits that it is very doubtful whether the contract needed to include a different provision, but even if it did, it would have made no difference to the exemplar claimants because they all terminated their contracts before completion of the transfer. He suggested that problems with the building not being habitable would have affected them only if they had actually purchased their properties.
I do not consider that that argument addresses the real issue here. I accept that it is possible that there would not have been a problem in a particular case (or indeed in all cases), but the issue is whether it was right to include such a potentially risky condition in the preliminary contract and the effect which knowledge of its existence within the contract prior to signing the preliminary contract might have had upon the purchaser. The positive scenario identified by Mr Flenley would be dependent on the builder applying for the certificate and the council not objecting to its grant after the contract had been completed. Furthermore, the Report on Title did not state the position accurately: it suggested that completion was "subject to a certificate of habitability being presented to us by the Vendors prior to the signing of the final deed" (my emphasis).
The Report on Title contained the following paragraphs prefaced by the following words of introduction: "In particular, we would draw your attention on the following aspects of the Preliminary Contract, which will all become binding as soon as you sign the Preliminary Contract and the Developers countersign it" -
8. Payment Schedule: the proposed payment schedule seems acceptable, as there is no request by the Builders for further interim payments during the phases of construction: this somehow seems to imply that they have their own resources to bring the construction to a positive completion.
9. Bank Loan Guarantee: as soon as we receive the deposit in our Clients account, we will retain it until the other party has signed the Contract too. In this period, the funds will be held in our account which is non-interest bearing. The Vendor will provide us with a bank loan guarantee (within 30 days of signing the Preliminary Contract) for the funds anticipated to them at this stage, so that in the unlikely event of the Building Company going bankrupt or becoming insolvent, you will be able to claw the deposit back from the Bank which has issued the bank loan guarantee.
…
11. We have made arrangements for funds to be transferred directly from our Client Account in the UK directly to the Vendor's Bank account, after having deducted the Promoter's commission. This will ensure that all payments are properly documented and will reconcile with the figures stated in the contract.
…
13. The long stop date for completion of the project is scheduled for June 2009. We have negotiated with the Vendor's lawyers a period of 6 months which is defined as "ex gratia" period whereby the Vendor can delay completion for up to 6 months without incurring any financial penalty. At the end of the aforementioned ex gratia period, the Vendor will be liable to pay a penalty of €300 per month for each month of delay in the completion of your property."
In some Reports on Title paragraph 11 reads as follows:
"We have made arrangements for funds to be transferred directly from our Client Account in the UK directly to the Vendor's Bank account and therefore this will ensure that all payments will be properly documented and will reconcile with the figures stated in the contract."
In that version there is no reference to deduction of the promoter's commission.
In some Reports on Title paragraph 13 (albeit numbered paragraph 8) reads as follows:
"As standard in Italy, the long stop date for completion of the project has been included to be within 24 months of exchange of the preliminary contracts and/or the date of issuing of the planning permission, whichever is the latest. You will acquire ownership when the final deed of sale will be signed before the Notary and this is subject to a certificate of habitability being presented to us by the Vendors prior to the signing of the final deed, at the Vendor's expense."
The passage underlined in paragraph 175 above is sometimes to be found in a separate paragraph in the contract.
The Report on Title also included the following paragraph about the proposed golf course:
"18. In relation to the proposed golf course, it does not form part of the due diligence that we have carried out, as the proposed golf course will be adjacent to the "Jewel of the Sea" Complex but will not be included inside the Complex; however, the Directors of R.D.V. and the Promoters have informed us that RDV has recently signed a Preliminary Contract to purchase the land where the Golf Course should be made. We have requested a copy of this preliminary Contract that will be kept in our files for information purposes only."
The Report on Title says nothing further about the planning dimension other than the references that appear in the following two paragraphs:
"7. Due to Italian bureaucracy, it is quite common for a substantial period of time to elapse from the moment when the request for planning permission is submitted to the authorities and the date when this is issued by the Comune.
8. As standard in Italy, the long stop date for completion of the project has been included to be within twenty-four months of exchange of the preliminary contracts and/or the date of issuing of the planning permission, whichever is the latest. You will acquire ownership when the final deed of sale will be signed before the Notary and this is subject to a certificate of habitability being presented to us by the Vendors prior to the signing of the final deed, at the Vendor's expense."
There are issues about the validity of the planning permission (see paragraphs 189 - 208), but on the face of the planning permission for the Main Development the development was designated by the comune as "turistico residentiale" ("tourist residential"). Notary Valente confirmed that this means that the owners are not allowed to use a property within the zone as their main residence in Italy nor are they allowed to live in such properties as if these were their main homes. If they do so, although they cannot be evicted, they are acting unlawfully. There are fiscal issues too. The designation prevents the purchasers from being entitled to the tax advantages available on the purchase of a first home where VAT is charged at 4% compared to a second home for tourism at10%. It also has the effect that the owner would not be able to have their NHS General Practitioner in the area.
It is acknowledged that none of this was made clear to the purchasers before the preliminary contracts were signed.
The preliminary contract contained the following terms that are suggested to be relevant to the question of when the deposits should be handed over (see paragraphs 397 - 420 below):
"3.4 The deposit is to be paid at the signing of this preliminary contract and shall constitute a confirmation deposit according to art. 1385 of the Italian Civil Code. The VENDOR'S, as above represented, signature of the present Contract constitutes formal receipt of this deposit.
3.5 The aforementioned deposit will be paid by the BUYER into the Client Account of the law firm "Giambrone & Law", with registered office in London, which is a non-interest bearing account. Furthermore, the BUYER authorises the law firm "Giambrone & Law" to transfer this deposit to the company RDV bank account by bank transfer, or by non negotiable bank draft, after having retained costs and fees due to the V.F.I. Overseas Properties Real Estate Agent Limited as agent of the above mentioned agency agreement. This money transfer shall be carried out at the same time as the ratification of this contract by Mr Antonio Cuppari and the granting – at RDV srl own care and expense – of a suitable bank or insurance guarantee which would comply with the legal requirements set out by the art 2 and 3 of the decree legislative 122/2005.
The BUYER promises to give back the insurance guarantee received in original by RDV srl at the signature of the final contract of sale.
3.6 The balance will be paid at the signature of the final contract of sale."
As will appear later (see paragraphs 405 - 407), Clause 3.5 is an important clause.
Clause 5.4 of the Preliminary Contracts provided that execution of the final notarial deed (in other words, completion) was to take place by 30 June 2009. There was no express provision that time was of the essence (the view expressed clearly by Avvocato Oliver and Notary Valente in their reports), but Clauses 5.6 and 5.7 were as follows:
"5.6 Any delay in stipulating the final Notarial deed could not be, as agreed between the parties, a valid reason for the BUYER to cancel this contract or request damages.
5.6 (a) Any delay in the stipulation of the notarial deed of sale exceeding by 6 months the timescale set out for the completion of work under the aforementioned art. 5.4 and for which the VENDOR is exclusively liable, will oblige the VENDOR to pay a compensation of Euro 300 for each month of delay, starting from January 2010.
5.6 (b) In the same way, in case that the final Notarial deed should be delayed for reasons of force majeure beyond the control of the VENDOR, as agreed between the parties, nothing could be asked and or charged to the VENDOR as penalty and/or damages and it could not be a good reason for the BUYER to cancel this contract.
5.7 The stipulation of the final Notarial deed of purchase will have to take place in front of a Notary appointed by the VENDOR."
On the basis of Notary Cardarelli's view, it was admitted on behalf of the defendants that the effect of Clause 5.6, if taken at face value, was to prevent purchasers from terminating the preliminary contract on the ground of delay to completion, however serious that delay may be. It was accepted that the firm should have explained this to the purchasers before the preliminary contract was signed, but did not do so, and that this represented a breach of duty. This position was reinforced by an admission made on 9 March, the 6th day of the trial.
It was common ground between Notary Cardarelli and Avvocato Oliver that Clause 5.6 would be held by an Italian court to be unenforceable. This led Avvocato Giambrone to say this when he was questioned about what the claimants should have been told in the Report on Title:
"So what we should have said is, "The contract only allows you to get a penalty, it does not allow you to terminate the contract if the builder is in breach. However, the law supersedes the contract and you can terminate the contract", which is in fact what the clients did anyway. They were able to terminate the contract. So my acceptance was that we should have been clearer [in paragraph 13 of the Report on Title: see paragraph 172 above] of and it should have been worded more carefully."
I am bound to observe that if the Clause was unenforceable, it is not clear why it was included in the preliminary contract in the first place. Furthermore, the kind of advice that Avvocato Giambrone said should have been given would have been confusing to most people. And indeed the reality, as I understood the view of Avvocato Oliver, was that the purchaser would have to go to court to obtain an order terminating the contract and damages from the builder. As I understood him, Notary Cardarelli accepted this but thought that it would not be in the builder's interest to go to court and would agree a settlement.
As I understand the position in respect of all the exemplar claimants, each has terminated their contract but has not recovered the deposit. That loss, amongst other things, is what they seek by these proceedings.
I will turn now to the planning dimension although, as will appear, its chronological position is, properly speaking, earlier in time than when the Report on Title was sent. What needs to be observed is that there was nothing in the Report on Title to undermine the reassurance that was given by the firm to potential purchasers in communications prior thereto that all was in order.
Planning issues
In order to introduce the debate concerning the planning issues it is, perhaps, appropriate to record how the generic issues concerning the planning dimension were identified prior to the commencement of the hearing. It is to be noted that the list of issues was expressly said "not [to be] intended to replace the pleadings herein and should not be taken to alter the pleaded claims and defences." As will be observed, the issues concerning the planning permission (Issues 70-72) were expressed in very broad terms and did not descend to the particularity of the inadequacy or defect of the planning permission:
70. What was the position regarding the planning permission for JoTS?
71. What did [the defendants] know about the planning permission and what ought they reasonably to have known?
72. [Were the defendants] duty bound to give [the claimants] any information or advice about the position regarding planning permission and if so what?
The Penningtons Manches claimants had alleged as one of the Particulars of Negligence that the defendants "failed to advise … prior to the execution of the Preliminary Contract and release of the Deposit, that adequate planning permission was not in place for the development". The allegation in the Edwin Coe claimants' pleadings was, inter alia, that the defendants "failed to identify defects in the planning permission and that such planning permission as was in place was incomplete", reference having been made earlier in the pleading to the contents of the retainer letter concerning the planning permission (see paragraph 313 below). My attention has not been drawn to any further particulars of those allegations that were sought or given at any stage. The pleaded response to each was respectively as follows:
To the Penningtons Manches claimants
"(2) At the date the Preliminary Contracts were executed and the deposits transferred, planning permission had been granted in respect of each Claimant's Apartment. The Second Defendant was entitled to rely on the validity of planning permission which had been granted by local government bodies, which is what the Second Defendant did here. Italian conveyancers are not required to advise on the risk that such planning permission may later be overturned.
(3) The suspension of planning permission on 26 June 2008 (in respect of the Emerald, Emerald I and Emerald II and Ruby blocks) was due to matters which were
a. outside the influence of the First and/or Second Defendants, and
b. not reasonably foreseeable to the First and/or Second Defendants as at the date on which any of the Claimants executed their Preliminary Contracts and/or transferred their deposits."
[The underlined passage reflected an amendment made in July 2014]
To the Edwin Coe claimants
"… it is denied that GLILP had any obligation, as a matter of Italian conveyancing practice, to give the advice alleged. Italian property lawyers, including Notaries, are entitled to rely on the validity of planning permission which has been granted by local government bodies, and are not obliged to second guess such permission. In the alternative, it is denied that any breach of duty in relation to planning permission caused the Claimants' loss."
[That Defence was pleaded in February 2014]
As with the claimants' pleadings, no further particulars have been sought of those averments, most notably for present purposes the averment that the suspension of the planning permission in June 2008 was "due to matters which were … outside the influence of the First and/or Second Defendants, and … not reasonably foreseeable" as at the dates referred to. As it stands, this averment suggests that the defendants could, if asked, say what the reason for the suspension was and why it was not reasonably foreseeable by them at an earlier stage (although that latter part of the averment may have been addressing a different issue).
This analysis of the pleaded position may be of relevance to the ultimate disposal of the issues concerning the planning dimension to this case. I will return to this below (see paragraphs 193 - 207).
That there were problems arising from the planning permission for at least part of the Main Development is not in issue. The essential case advanced on behalf of the claimants in the pleadings to which I have referred is that these problems should have been identified by the firm as part of the due diligence it said it would carry out. Equally, the essential response on behalf of the defendants was that they were "entitled to rely on the validity of planning permission which had been granted by local government bodies", an assertion undoubtedly based on Notary Cardarelli's view of the responsibilities of an Italian lawyer acting for a client in such a situation. As I have indicated, there is an averment that the suspension of the planning permission in June 2008 was "not reasonably foreseeable" at the time the preliminary contracts were signed and, as an alternative allegation, that there was no causal link between any breach of duty, if established, and the loss claimed.
Mr Majumdar is right when he says that the thrust of this response to the claimants' case is that the firm had no duty to go beyond what appeared on its face to be a valid planning permission. It is not alleged that, had such a duty existed, it would have been unreasonable to expect the problem that led to the suspension of the planning permission to be identified. Mr Majumdar was, of course, addressing the pleadings in the Edwin Coe cases, but the same point can be made in relation to the response to the Penningtons Manches' claimants: there was an assertion that it was not necessary to go beyond the terms of the planning permission and whilst it is said that the suspension in June 2008 was not "reasonably foreseeable" that may (and indeed appears to) be addressing a different issue from the issue of whether, had the validity of the planning permission been examined further, the defect would have been identified. At all events, there is nothing in the defendants' pleadings that (a) identifies what was the defect in the planning permission that led to its suspension and (b) asserts that such a defect could not reasonably have been expected to be identified if there was, contrary to the defendants' primary case, a duty to go beyond the terms of the planning permission itself. Equally, of course, there is nothing in the claimants' pleadings to indicate what was the defect in the planning permission.
To that extent, the factual issue concerning the true reason for the invalidity of the planning permission was not an expressly live issue on the pleadings. As far as I can determine, Notary Valente was the only expert to address in his report the question of whether the firm ought to have identified the danger of the future suspension of the planning permission if it had carried out "its usual enquiries into the planning permission for JoTS". He addressed that issue because it was a question he was asked to consider. He answered it in the affirmative, but gave no detailed reasoning other than to say that an examination of "the regulatory and specialist plans" would have demonstrated the "mistake on the part of the municipality of Brancaleone". When Notary Cardarelli came to comment on that view, he merely took the position that going beyond the terms of the planning permission was unnecessary which, of course, was the starting-point for the question in the first place.
It emerged during Mr Flenley's cross-examination of Notary Valente that he (Mr Flenley) did not have expert evidence on what the defect in the planning permission was (which indeed reflected the terms of Notary Cardarelli's report in response to Notary Valente's report), but in his written Opening Submissions, Mr Flenley had asserted that the problem was that the original permission, which on its face was regularly granted, was in fact susceptible to being overturned later "because the local authority had failed to apply the planning rules correctly." He said that the defendants' contention would be that that type of problem "was not one which a reasonably competent Italian conveyancer, instructed simply to act on the purchase of the property, would have investigated."
By the time of his Closing Submissions Mr Flenley contended that the nature of the problems that did emerge needed to be identified before it was possible for the court to say whether they ought to have been identified or, as he put it, "if one is going to advance a case that any reasonably competent Italian conveyancer should have spotted the problem with the planning permission, one needs to know what was [the] problem and secondly to say by what means should the reasonably competent lawyer have spotted it?" He asserted that the claimants' case in relation to whether Avvocato Giambrone's firm should have identified the planning permission issue at the outset was "fatally undermined" because their experts did not know what the defect in the planning permission was. As I have already observed, however, Notary Cardarelli, who was called for the defendants, at least in part because he had "specialist knowledge" of inter alia the law and practice of town planning and building requirements, did not himself identify the problem in his various reports or in his evidence and had not attempted to do so.
It is possible that Mr Flenley's eventual position was encouraged by some interventions of mine during the trial because, as the cross-examination of Notary Valente proceeded, it seemed to me that without knowing what the defect in the planning permission was it was difficult to say whether it ought reasonably to have been identified within whatever level of due diligence was required of or promised by the defendants. I adhere to that provisional view, but for reasons I will give, I do not consider that the failure to identify the defect at this stage leads to the conclusion that the claimants' case in this regard is "fatally undermined" – nor, incidentally, do I accept Mr Flenley's argument that the pleadings do not permit the claimants to suggest that an enhanced level of inquiry was required in relation to the validity of the planning permission. As it seems to me, notwithstanding the continued re-visitation of the pleadings in the various sets of proceedings over many months prior to the trial, the analysis of the pleadings above (paragraphs 193 - 195) demonstrates that the precise issue of the defect in the June 2007 planning permission was not sufficiently crystallised either in those pleadings or in the agreed issues for it to be capable of satisfactory resolution at the trial. Notary Valente made it clear when giving evidence that he had not seen all the relevant documents and the same must apply to the other experts also. No comparison exercise was carried out between the initial planning permission and the new one granted in July 2010 (see paragraphs 202 - 206 below). No copy of the judgment of the court setting aside the suspension of the planning permission was available (see paragraph 204 below). There may have been other documents too, some of a public nature, some perhaps in the control of the Guardia di Finanza, that might inform this issue. What is clear, however, is that no inquiry into the intrinsic validity and integrity of the planning permission was undertaken by the firm. That is, I apprehend, accepted on the defendants' behalf. (That this was so is evidenced in a fairly graphic way in that, for example, in Mr Wootton's case - who was purchasing a property in Sapphire in the Main development - the letter containing the Report on Title was dated 4 June 2007, some two days before the planning permission was granted.) What is presently unclear is how an enhanced level of inquiry, if such was demanded, should have been implemented and what would have been revealed. I will return to this in due course (see paragraphs 313 - 326).
I will venture a provisional view about what the problem with the planning permission was, but it is not possible to be wholly specific because the story has to be pieced together from an assortment of documents, one of which (the June 2007 planning permission) is in un-translated Italian and the other (the July 2010 planning permission) is a rather dense document translated from Italian where the translation leaves a few question marks. I am largely leaving out of account at this stage Avvocato Giambrone's account in his Legal Opinion (see paragraphs 253 - 256) which is said on behalf of the claimants to be self-serving although there are one or two points of some potential interest in that document.
In summary it appears that the first relevant permission (called a "building permit") was granted on or around 8 June 2007 which then became "integrated" with another permission granted on 31 July 2007 which was known as No. 13/2007. Another building permit that relates to this part of the development appears to have been granted on 27 May 2008 and was known as No. 6/2008. Both were issued by the Comune of Brancaleone. It would seem that the building works commenced at some stage after the first permission. RDV suggested in a letter dated 25 September 2007 that site works began in July 2007 although a number of the exemplar claimants who gave evidence went out to see the area in July/August 2007 and said that no work had been commenced at that stage. It is, therefore, not entirely clear when the building works commenced. However, it is clear that work did commence at some stage and continued until it was suspended in June 2008 in the circumstances set out in the next paragraph.
It appears from the planning permission granted by the Comune of Brancaleone in July 2010 that in June 2008 RDV "requested" what is called in the document a "clarification meeting" concerning the validity of the building permits issued previously, apparently acknowledging "the absence of the regional opinion with regard to the planning variations". Mr Duddridge has assumed from this that it was RDV that "spotted" the problem and raised the issue. That may, of course, have been so, but it raises the question of why it should have taken over a year for any problem with the permission granted on 8 June 2007 to emerge unless it was something that arose with the permission granted on 27 May 2008 that caused the problem to be spotted. One would have thought, though this is to a degree speculative, that it was more likely that some officials of the Comune of Brancaleone or of the Regional Government had identified the problem at about that time, drew it to the attention of RDV as a result of which RDV then sought the "clarification meeting". Indeed, in his Legal Opinion, which dealt at some length with the suspension of the planning permission and generally put a favourable complexion on matters from the firm's perspective, Avvocato Giambrone said this:
"In respect of the Jewel of the Sea planning permissions listed above, the validity of [the 2007 and 2008 building permits] was … unilaterally suspended by … RDV … on 13 June 2008, and thus the construction work stopped. This occurred due to the view taken by the technicians of the Financial Institute of the project, who claimed that it was a requirement to obtain the opinion of the Regional Government of Calabria, Town Planning Department, in order to ratify an effective building license at the site." (My emphasis.)
Insofar as one can deduce from the July 2010 planning permission the reasons for the defect in the June 2007 permission, they appear to be that there was no input from the Regional Government on the effect of the development on the whole region. However, as I have said, without further expert assistance it is difficult to reach a clear conclusion about what was truly defective in the first planning permission.
The article to which Avvocato Oliver has drawn attention (see paragraph 40 above) suggests that a local official may have been involved in some illegality that led to the initial grant of the permission. Indeed, the local official who signed both the June 2007 and the July 2010 permissions is, according to that report, under criminal investigation. If corruption was involved, the circumstances are rather far removed from "a mistake as to the grant of planning permission" to which Mr Flenley suggested that the claimants were subject and indeed which Notary Valente assumed.
At all events, according to Avvocato Giambrone's Legal Opinion (see paragraphs 253 - 256), work was suspended by RDV on 13 June 2008. On 17 June and 26 June 2008 respectively, the planning department of the Comune gave notice suspending the building permits. It seems that, following the obtaining of legal advice, the Comune cancelled the permits in October 2008. It seems that RDV took court proceedings which did result in January 2009 in the cancellations being suspended, but it was not until July 2010 that a fresh building permit was granted thus enabling the works on the Main Development to recommence.
I should say that the cessation of the work on the Main Development at this time is consistent with what Mrs Noel and her companion saw when they visited the site in late July 2008 with a representative of VFI where they met an architect although nothing was said about the planning issues.
It is tolerably plain from the very detailed building permit issued on 21 July 2010 that close attention had been paid on this occasion by the various authorities to the proposed development. Detailed provisions concerning, for example, the space for a cemetery and the provision of a local school were incorporated. In its original Italian version it ran to 5 closely-typed pages. The June 2007 permission ran to 2 pages. As I have said, no comparison between the two has been undertaken and indeed there was no English translation of the June 2007 permission available.
I will return to the significance of this analysis later (see paragraphs 313 – 326 below). However, the short point is that if there was no duty on the firm to go beyond what appears on the face of the June 2007 planning permission, then the reason for the defect in that permission has no relevance. If, however, there was a duty to go beyond it, the question will be how much further it was necessary to go and whether, if further steps were required, those steps would probably have revealed the defect. Given the prominence the defendants seek to give to the delays caused by the planning issues, this is an important area both from their point of view and also from the claimants' point of view.
Whilst recording the terms of the July 2010 planning permission, one of its requirements, as translated, was as follows:
"The works are carried out as provided for and for the intended purposes set out in the approved plan with the specification that the tourist/hospitality units may only be transferred on the foreign market to citizens not resident in Italy, pursuant to article 3 of the planning agreement …."
The breaking of the bad news
As indicated above (paragraph 204), the issues surrounding the planning permission for the "Main development" part of the JoTS development led to a cessation of work in June 2008. This news was not conveyed by the firm to any of the proposed purchasers until January 2009.
Each client was sent a letter from the Vibo office dated 19 January 2009 running to some 8 single-spaced pages, the substantive parts of which were as follows:
"We write with reference to your current purchase of a new property in Calabria to provide you a general update on the current state of the real estate market in southern Italy; we would also like to take this opportunity to offer some useful guidance on the completion procedure, the role of the Notary in Italy, the costs associated to the Notarial deeds, the applicable legislation regarding capital gains tax and Italian inheritance laws, some additional information about completion costs and useful suggestions to obtain an Italian mortgage.
We have been informed by the developer that the current adverse weather conditions that have affected the Calabrian region over the last few months may delay the completion of the development by a few months but we are not in a position to provide you with a further update on the construction work at this date: we are seeking written confirmation by the developer of this potential delay and, as we understand it, the likely new completion of the complex is likely to be by early 2010. However, if you would like to have more updates in respect of this matter, we suggest that you contact VFI After-Sales team in Vibo as they act as Mandate holder on behalf of the developer and are therefore more likely to have up-to-date information in this respect.
Every newspaper, website and news bulletin threatens, at best, a "slow-down" and, at worst, a "crash" of the property market. In our experience, the Italian real estate market is holding up well and properties have not been decreasing dramatically in value as it might have happened in other European countries. This is partially due to the fact that the Italian banking system is notoriously more robust than other European counterparts (Italian banks have traditionally had a very conservative approach to lending) but also to the fact that the Italian market usually suffers the effects of a European down-turn with a significant delay of up to 12 months, at best: whilst therefore the current market conditions in Italy do not show any significant warning signs of recession, it is highly probable that the economy will enter into recession by early 2009, which may also affect the value of your new purchase.
The economic climate remains precarious and, although raw value in southern Italy has held up well compared to the rest of the country, the values of sales to foreigners (and to northern Italians looking to purchase a holiday home by the sea) has dropped considerably in the past 12 months. However, the predicted 10%-15% drop in the southern Italian property market estimated for next year should be taken in a context of a double-digit rise in the property market in the last decade.
Another important issue that may affect our British clients is linked to the fact that, with the sterling pound at an all-time low against the euro, the sterling has lost approximately 40% since the peak of mid-2006 (some bureau discharge at airports are exchanging at pound/euro 1.03): this is negatively affecting the British buyers unless they already hold the completion funds in euros: if you would like to discuss the effects of the currency devaluation and how this may affect your completion costs, we recommend that you contact as soon as possible a currency trader ….
Cancellation of your purchase
If you are concerned about a sudden change in your financial circumstances or if for any reason you are no longer interested in buying your property in Calabria, we can assist you in managing such process in two ways.
1. The Assignment Contract
Firstly, you should consider the "assignment of your preliminary contract" whereby you can re-sell your property to a new buyer and assign to the new buyer your preliminary contract, for a fee of €1800 (€1500 plus Italian VAT at 20%). We can draft a new agreement between you and the new buyer(s) which, under the terms of the Italian civil code, may need to be countersigned by the developer in certain circumstances to be legally enforceable. The new buyers will transfer the deposit to our Client account on exchange of the new contract and we will then notify the developer of such assignment, obtain the consent (where necessary) and then transfer the balance to you, having deducted our costs. The new buyer will be charged a fee of €500 plus completion costs as per usual. Upon the execution of the assignment, you will no longer be legally bound to purchase your property.
2. The Rescission Contract
If you cannot find a new buyer prior to completion, the other alternative is to cancel your purchase altogether with the consequential loss of your deposit already paid to the developer: however, you will need to bear in mind that you cannot simply "walk away" from the purchase because the developer can legally bind you to complete under the terms of the preliminary contract; if you do not pay the completion funds when the property is finished, you will be in breach of contract, lose your deposit and the developer may issue proceedings in an Italian Court to obtain the balance of the purchase. In order to avoid this unpleasant scenario, we would recommend that you make contact with Katy[3] or Kierran[4] in our office as soon as possible so that we can discuss with you your personal requirements and attempt to negotiate with the developer a "rescission" of your purchase.
By entering into a rescission agreement, you are likely to lose the deposit already paid but you will no longer be legally bound to complete your purchase and the developer will put the property back on the market, perhaps at a lower price. However, you should also be aware that there is no certainty that the developer will agree to enter into a "rescission contract" although we have successfully negotiated on behalf of other buyers in other developments.
We will apply a fee of €1800 (€1500 plus Italian VAT at 20%) to carry out the following activities: to negotiate a settlement, including a meeting between our lawyers and the representatives of the builder, with a possible view of rescinding your contract, drafting and executing the rescission (or "severance") agreement to ensure that you will no longer be liable for the purchase of the aforementioned department.
We may also be able to negotiate a partial refund of your deposit (although this is extremely unlikely as the developer is under no legal obligation to do so) by inserting a clause in the rescission agreement whereby "should the property be sold again within three months from the execution of the "rescission agreement", the developer would undertake to reap fund a percentage of the deposit to you".
…."
The rest of the letter went on to discuss the completion procedure in Italy, the matrimonial property regime, how transfer of funds may be effected, mortgages and mortgage costs and the role of a Notary in Italy. It concluded with the announcement that Giambrone & Law were proposing to host a number of seminars in various locations throughout the UK and Ireland on certain aspects of Italian law including the legal aspects of completion, together with advice on cancellation and assignment rules, and an update on the construction work completed on each of the developments where the firm represented purchasers. There were to be two seminars on 3 March 2009 in Dublin, one in Belfast on 4 March 2009, one in Manchester on 13 March 2009 and two in London on 16 and 19 March 2009 respectively (see paragraphs 234 - 236 below). Entrance was said to be free of charge for "clients of Studio Legale Giambrone", but a small charge of "£15/?15" for "all other delegates". It was said that places for the seminars would be limited and "allocated on a first come first served basis." Plainly, the arrangements for these seminars must have been put in hand some time in advance of this letter.
Although it was six months since the building works ceased on the Main Development because of the issues surrounding the planning permission, it is noteworthy that there is no reference in that letter to those problems. The thrust of the letter in relation to delay was that it was all down to adverse weather conditions. A great deal was said about the actual and impending economic downturn. This was, of course, the period when, following the collapse of Lehman Bros in September 2008, a period of very considerable uncertainty existed in the international financial markets.
Avvocato Giambrone did not mention this letter in his witness statement. Neither did Kierran Klingenbergs in his witness statement. I did not hear from Katy Beatty. When questioned about it by Mr Majumdar, Avvocato Giambrone said that "we did not know … at the time" that "construction work on the main development had been suspended because of problems with planning permission". He asserted that it was in October 2008 that the work was suspended. In fact it was in June (see paragraph 204).
The natural assumption, given the close working relationship between the firm and VFI and RDV, would be that the firm would become aware very quickly of something as fundamental as the suspension of building works because of some problems with the planning permission. Doubtless with that sort of consideration in mind Mr Majumdar raised this question in cross-examination:
"You had an office locally with lots of lawyers and caseworkers, who were working on Jewel of the Sea amongst other developments. Are you saying that none of them knew, so far as you know, that work had been suspended on site; there had been no work done for months and months?"
In answer Avvocato Giambrone raised the issue of when it was that the Brancaleone Office was closed and moved to Vibo Valentia which, he said, was 200 km away from Brancaleone, the implicit suggestion being that there was little contact thereafter with what was occurring there. It seems to be accepted that it was in early 2008 that the move to Vibo occurred. It is some distance from Brancaleone though whether it is as much as 200 km is unclear. Nonetheless, whatever the distance, it would be unlikely for all communications between the firm and those with ready access to the site to cease completely. Indeed Mr Klingenbergs' witness statement said this:
"In January 2008 I transferred to the Vibo office permanently. Both Roccella and Brancaleone were then to be transferred to Vibo because VFI Overseas Properties transferred their operations to this area. They had a number of sites in the area that they were developing and the units in JOTS were now limited because the development had almost sold out. By transferring the office to Vibo it was easier for prospective clients to meet with our lawyers without having to travel to Brancaleone for a meeting."
This seems to suggest that there was continuing contact between the firm and VFI during this period and in my view it is inconceivable that at some stage between June 2008 and January 2009 knowledge of the difficulties with the planning permission was not conveyed to someone within the firm. That, of course, from the English law perspective would be enough to fix the firm with knowledge of the relevant fact, whether or not it was passed on to Avvocato Giambrone personally. One person from whom I have not heard in this case, Avvocato Francesco L'Abbate, was still working with Avvocato Giambrone until at least the end of July 2008 although the precise date of his departure is unclear on the evidence (see paragraph 217 below).
Avvocato L'Abbate had played a central role in much of the work that had gone on in relation to the JoTS development prior to him leaving the firm and, most particularly for present purposes (and as indicated in paragraph 145 above) he signed the "RDV Mandate" on behalf of the LLP together with Mr Cuppari and Mr Fitzsimons on 25 June 2008. Furthermore, in the letters sent to all JoTS purchasers from the Vibo office dated variously between 21 and 24 July 2008 (this being the spread of dates revealed by the documents available in the exemplar transactions), informing them of the transfer of their files to that office from the London office, all recipients were told that henceforth their files would be the responsibility of "Avv. Francesco L'Abbate and Avv. Luigi Tilotta … assisted by a team of 7 Italian lawyers and 6 real estate consultants." That demonstrates that he was still working with the firm at least until the latter part of July 2008 and was apparently intending to be there in the longer term. The first documentary indication of his absence from the office in the material before me is an e-mail from Katy Beatty to Mr and Mrs Nambiath dated 6 October 2008 indicating that he was no longer with the firm. That e-mail indicated that Karla Macedo had taken over all his work. It follows that he must have left the firm in all probability during August or September 2008.
I cannot believe that Avvocato L'Abbate was unaware of the difficulties with the planning permission, but his presence as a witness at the trial could have resolved this aspect once and for all (indeed along with one or two other issues). However, Avvocato Giambrone said in his witness statement of 28 January 2015 that he was "not being called as a witness, because, after leaving the LLP in or around late June 2008, he set up his own legal practice in Vibo and is a commercial competitor with my practice." From the correspondence to which I have referred, it is clear that he was still with the firm in late July 2008 (not June) and, as I have said, may have been with the firm for another month or so thereafter. Surprisingly, very few e-mails between any of the exemplar claimants and the Vibo office are available for this period. At all events, I am not wholly persuaded that what Avvocato Giambrone says is a compelling reason for not calling him as a witness: these events were over 6½ years ago and any rivalries concerning work ought by now to have subsided. In fact Avvocato Giambrone also said that he was not sure whether Avvocato L'Abbate was still practising (saying that his website could be checked) and that it "may well be that he is not still working" and that he was "aware that he [Avvocato L'Abbate] had some problems". This was not pursued any further, but I merely comment that again I have not heard from someone closely involved with material events during this important period.
It is to be noted, however, that Avvocato Giambrone personally was likely to have been somewhat distracted during this period because it was on 4 August 2008 that the Solicitors' Regulation Authority began an investigation into the books of account of the recently formed LLP. This was the first of three investigations by the SRA, as I understand it. I have not been told what it was that led to the investigation (which did indeed in due course reveal irregularities), but it began shortly after letters were despatched to all JoTS clients informing them that their files had been transferred from London to the new office in Vibo (see paragraph 215). The failure of the firm to secure the informed consent of the clients to that transfer was one of the allegations made (and sustained) by the SRA in the proceedings before the SDT. I have read Avvocato Giambrone's witness statement in the subsequent SDT proceedings and he appears to have become actively involved, certainly in the early stages of the investigation. There is a letter from the LLP's accountants (Simpson Wreford & Co) to the SRA dated 23 October 2008 asking for "a further extension to 31st December 2008" to "respond fully" to the investigation. The Forensic Investigation Report ('FIR') itself was dated 20 February 2009. The LLP ceased to practise on 5 April 2009, in effect precisely one year after its inception (see paragraph 46).
I am sure that this was a difficult time for Avvocato Giambrone personally and professionally, but nonetheless, as I have said, I think it sufficiently unlikely that news of the planning issues did not permeate through to the firm prior to January 2009 for me to draw the inference that, on the balance of probabilities, it did so permeate – and indeed at some stage permeated through to him personally before that time. It follows that the status report of January 2009 did not tell the whole story.
I should, perhaps, observe that there is, so far as I am aware, no documentary evidence concerning the way in which VFI responded to the request for "written confirmation … of this potential delay" as mentioned in the second paragraph of the letter.
This letter met with a variety of reactions. Its essential message was that people who had entered into the preliminary contract were not in a position to extricate themselves from the transaction other than at some cost. Of the exemplar clients, Mr Marsden said initially that he wished to continue with the purchase and raised certain matters concerning the formalities. He did indicate in his witness statement that he and his partner were very worried about the position, but felt that they had no other option than to proceed. Ms Kavanagh said that she was not too worried at this stage by a slightly delayed completion date, though she had concerns about her bank loan guarantee which is an issue raised by others. Mrs Manning raised some issues about her bank loan guarantee in some emails in February, but otherwise did not react to the letter of 19 January. Mr Wootton said he felt he had no option but to proceed. Mrs O'Connor felt much the same as did Mrs Rawson and Mr Corry. Mr Cleere was not concerned by the letter, simply noting that there would be some delay. Mr and Mrs Ballard had been concerned about the expiry of their bank loan guarantee, but the letter suggested that the project was continuing and it remained attractive to them. Again, in summary, that frame of mind described the frame of mind of Mr and Mrs Ormay. Mr Nambiath does not believe he received the letter of 19 January although there is a letter of that date in the same terms as the others in the disclosure of the defendants. In fact he and his wife had been out to Reggio between 13 and 20 January 2009 and had been to the site in Brancaleone. They had been expressing concerns about their bank loan guarantee prior thereto. He was in touch with VFI during his visit and was told of a delayed completion date until December 2009/January 2010. He had some conversations with Karla Macedo thereafter and, as he said in witness statement, it would be likely that their conversations would have been different if he had known of the letter of 19 January. At all events, he continued to express his concerns about the bank loan guarantee which is an issue that surfaced more significantly for many of the individuals with the events of March/April 2009. Mr and Mrs Noel did receive the letter of 19 January, but took no action in relation to it. Their concerns were brought to the surface by later events.
Some of the exemplar claimants saw, or heard of, the article that appeared in the 'Mail on Sunday' on 8 March to which I will now turn.
The Mail on Sunday article and its immediate fall-out
On 8 March 2009 the 'Mail on Sunday' carried an article under the headline "DISASTRO! The Calabrian dream we were promised", the relevant parts of which were as follows:
"A year ago the British mania for buying holiday homes off plan was in full swing in Calabria, the toe of southern Italy, but already it has turned sour. Then, sharp-suited salesmen hovered at Lamezia airport, waiting for the next 'viewing trip' to arrive, and all the usual outfits from the Spanish Costas – MacAnthony, Medsea, mortgage brokers J.P. Lynch – descended on the sleepy, provincial district.
Most are now long gone. The promise of 'undiscovered' Calabria, miraculously revealed to the world when Ryanair began regular flights has turned to dust as much thanks to local skulduggery and incompetence as the world economic crisis.
Left behind are an increasingly disgruntled group of British and Irish buyers, who bitterly regret their purchases in developments that are either long delayed, did not have proper planning consent or have been finished to such a bad standard that their owners say they are unsaleable.
Their laments litter forums on websites such as www.incalabria.com and www.eyeonworldwide.com.
Ask Italians about the brief Anglo-Irish mania for Calabria and they shake their heads knowingly. In a part of the world renowned for its lawlessness – and nasty local mafia – the arrival of well-monied, naïve, monoglot holiday homebuyers, eager to snap up an off-plan bargain for the price of a garage in Tuscany, was bound to result in disappointment.
Now the largest scheme in the province, the Jewel of the Sea, with 600 units, which improbably was to have had a golf course on its parched hillsides, has been blocked for environmental reasons, while the El Caribe scheme, where 90 would-be buyers have paid €4.5 million (£4 million) in deposits and which was scheduled to open in May, has yet to start any work at all.
Last month, 120 apartments and villas, valued at €30 million, at the Santa Venere and Marinate resorts at Vibo Marina, were sequestered by police, having been illegally built.
At Vista Montagna resort in Caulonia the workmanship is so bad buyers want to pull out, and completion deadlines of August and December last year have been broken. The developer, local hotelier Antonio Ventiglione, won't discuss the matter, or confirm whether it will be finished in April, as promised.
Much of the opprobrium for the disaster that is Calabria is heaped on the head of Gabriele Giambrone, 33, an English-speaking lawyer from Sicily, whose firm has carried out the bulk of the conveyancing from offices in London and Calabria.
Until 2006, Giambrone Law made a modest living dealing with simple purchases of existing properties in Tuscany and Umbria but then came the boom in Calabria and the arrival of mass off-plan buying.
Over the past two years he has organised 1,800 property purchases, making his the busiest legal practice in Calabria, processing €30 million to €50 million (£26.7 million to £44.5 million) of clients' money.
'Unfortunately, Calabria is total chaos and there are problems with every single development,' he says. 'They are either late, or they have not started, or the developer has gone bust. No sooner do I fix one problem than another comes along.'
Last week, Giambrone and Antonio Cupari, the developer behind the Jewel of the Sea scheme, were in Dublin, Belfast and Manchester reassuring most buyers that their apartments would be finished.
But he could offer little comfort to his 45 clients who bought at El Caribe, sited on the hitherto unspoilt Capo Rizzuto on the Ionian coast. 'The builder Domenico Vallone owns the land, he has a valid permission to build there so we processed the contracts. But nothing has happened,' says Giambrone.
Similarly, there is little comfort for buyers at San Rocco 2 at Isca Marina, after work stalled when the British company Medsea, owned by veteran Costa estate agent Tony Gatehouse, pulled out of the scheme. In the fallout of the Calabria property boom, where estate agents typically charge local developers 20 to 30 per cent commissions on every sale, there is now mutual recrimination and demands for lost fees. Medsea is taking legal action over unpaid commissions.
The estate agency VFI, owned by Antonio Velardo and Ulsterman Harry Fitzsimons, claims Giambrone Law owes €800,000 (£713,200) on sales to the Jewel of the Sea. This is denied by Giambrone, who adds for good measure his opinion that VFI is not a properly regulated estate agency in Italy.
'Mine is the only practice that is regulated, by both the Law Society and the Italian Order of Advocates, and that is why I get all these complaints', he says.
He claims the client accounts in both the UK and Italy are regulated by his professional bodies, and there has been no impropriety at his practice at all. 'I am not operating any Madoff-style scheme,' he adds.
…
The Law Society confirmed that complaints about Giambrone Law have been received and that the Solicitors Regulation Authority will be taking appropriate regulatory action."
Some purchasers read the article and some had its general message drawn to their attention. Inevitably, it caused concern.
The article appeared after the two seminars in Ireland, but before the three seminars in England (see paragraph 211 above).
The article mentioned suggestions having been made by VFI that the firm owed sums to them in respect of the sales. It is not entirely clear to me precisely how the chronology of this period developed, but I have seen from the file of Mr Cleere (and indeed elsewhere in the documentation) an undated document emanating from VFI which contained the following paragraphs, one of which suggests it was composed shortly after the series of seminars was completed:
"Deposit Guarantees
Due to this confusion, certain buyers, either directly or through their lawyers, have asked V.F.I. to provide funds for expired "bank loan guarantees". V.F.I. does not hold any bank guarantee on this project. As promoters we would not even have the capacity to undersign a guarantee as legally under Italian Law it is something that must be issued by the builder or the owner. In the case of JOTS there is a guarantee, on the deposit – not on any bank loan, that is held by the owner. As far as we know this guarantee is current through June 2009, the initial completion date. Should any buyer need to make a claim against the guarantee, the claim needs to be put forth directly to the responsible party, in this case the owner.
Recently there were conferences regarding Italian property held in Belfast, Dublin, Manchester and London. It has been reported that during these conferences the issue of the JOTS guarantee was mentioned and clarification was given as to the responsible parties. The conference panel which included lawyers from Giambrone Law LLP (the firm representing the majority of JOTS buyers) as well as the owner of the largest portion of JOTS, confirmed that the owner, R.D.V. S.r.l., is responsible for the guarantee and it would be extended to cover the construction delay. Appropriately, there was no mention of V.F.I. having any connection whatsoever to the deposit guarantee – which is legally correct.
…
Non-Payment of Deposit
We understand that Giambrone Law LLP (GL), also Giambrone & Law or Studio Legale Giambrone, was instructed by the majority of the buyers in JOTS project to carry out checks prior to the signing of the preliminary purchase contract and the transfer of sums to the owner. Certain buyers who were represented by GL transferred the sums to be paid into the firm's client account, as fiduciary deposit, while awaiting the outcome of the legal checks. A large amount of these funds being held in GL's fiduciary account have, at the time of this letter, not been transferred to owners despite numerous requests by both the client/buyers, the builders, and ourselves. Official complaints against GL have been filed with the Law Society of England and Wales by certain of their clients purchasing Italian property as well as Italian builders. GL is currently under investigation for several violations including misconduct in regards to its management of client funds. The pending outcome of this investigation will be critical to their role in the JOTS project.
While under investigation by the Law Society, GL has applied a strategy of diverting blame by accusing other involved parties of misconduct. One of these parties is V.F.I. We are currently working through the appropriate legal channels in Italy, the U.K. and Ireland to defend ourselves from these accusations, so we will not go into detail in this letter. We are however making you aware this situation exists as it has come to our attention that GL has been contacting their JOTS clients with false accusations regarding V.F.I. One such aspect was the attempt to shift the responsibility of the non-payment of sums from themselves to us. Please note that the reality is that we are working diligently to resolve the situation of the funds that remain with GL. However VFI are working very hard to avoid buyers being in breach of contract for deposit non-payment."
This prompted e-mails to various of the concerned claimants from Mr Buchan in the following terms:
"Re: Your purchase in Jewel of the Sea, Calabria
We have been informed that VFI has recently been spreading malicious rumours against RDV, the builder of JOTS and our firm. Our lawyers are preparing a full response which will be forwarded to you by post within the next seven days.
In the mean time, I can confirm that RDV have revoked the Mandate to VFI and put them on notice that they are no longer authorised to market or more generally deal with Jewel of the Sea.
I therefore advise you not to deal with VFI any longer until this situation is resolved.
I would also bring to your attention that most of the allegations set out by VFI are not true because most of our lawyers are dually qualified both under the Italian and English legal system and regulated by both the Italian Law Society and the Law Society in England and Wales.
Our accounts are audited annually by independent Chartered Accountants and our firm has built over many years a reputation as one of the leading Italian law firms in the UK. On the contrary, VFI is an Irish company which is not regulated as an Estate Agent in Italy and we have reason to believe that they have been trading illegally; this matter has also been reported to the police accordingly.
We also understand that RDV lawyers are about to issue civil and criminal proceedings against VFI to protect the reputation of their company, likewise, our firm has already sent a pre-action letter to VFI in compliance with the defamation protocol in England and Wales and we anticipate that a claim will be issued against VFI for defamation in the next 14 days.
As you can see, it seems evident that VFI have fallen out both with our firm and with RDV and they are therefore continuing to divulge slanderous and untrue remarks against both companies in retaliation.
We will no longer tolerate such childish behaviour and please rest assured that we will take all reasonable steps to ensure that both your purchase is fully protected and our reputation is not affected by VFI.
As previously stated, I anticipate that our lawyers will prepare a full update within the next seven days so I kindly ask you to wait until then and thank you for your patience in the mean time."
The reference to the revocation of the Mandates is to a formal document to that effect by RDV to VFI dated 18 March 2009.
As I have indicated, tracing the precise chronology in this period is difficult. The letter from the firm to VFI about the bank loan guarantees was dated 9 March 2009.
This was a period of some relatively intensive activity. An important letter concerning the bank loan guarantees was sent by the firm to VFI to which I will now turn.
The letter to VFI from Giambrone concerning the bank loan guarantees
The day after the 'Mail on Sunday' article (though doubtless drafted before the article was published) a letter with a reference incorporating the words "Final demand" from Giambrone Law was sent to VFI as follows:
"Re: Bank Loan Guarantees – Nullity of preliminary contracts
We refer to the above matter and to the previous correspondence with your company and your lawyers, in which we highlighted our serious concerns about the expired bank loan guarantees for the majority of the developments sold by your company in Calabria.
We have already put you on notice that, unless VFI produced a valid bank loan guarantee issued in compliance with art 107 of legislative decree no 85/1993, we would have had no option but to advise our clients of their entitlement to rescind the preliminary contract on the ground of nullity in line with the legislative framework set out at art 3 of decree 122/2005. Our clients are therefore entitled to cancel the purchase and seek a refund of their deposits plus interest and damages.
…
Your failure to deal with our previous correspondence has left us with no other option but to contact our clients and inform them of your breach of contract, and we hereby formally demand the refund of all commission received by VFI in respect of those contracts which are now formally null and void."
The "previous correspondence with [the] company and [its] lawyers" has not emerged during the disclosure process. However, on its face this is a demand to VFI (not RDV) to provide replacement bank loan guarantees, coupled with a threat to advise the firm's clients of "their entitlement to rescind the preliminary contract on the ground of nullity". This needs to be contrasted with the position subsequently taken (see paragraph 240) and as it is acknowledged in fact to have been (see paragraph 130).
The seminars
I have mentioned the seminars to be held in March and April 2009 above (see paragraph 211). The invitation from 'Giambrone Law Firm' and 'Giambrone Private Finance' went out in the following form:
"Series of Seminars on Italian Law By Invitation Only
Topics will include:
Legal aspects of completion, including advice on cancellation and assignment rules. There will also be an up-date on the construction work completed on each development where this firm represents purchasers.
Italian Wills and Estate Planning rules: how to protect your investment in Italy.
Italian mortgages and alternative financial options to fund the purchase.
Italian Tax and fiscal rules post-completion together with capital gains tax rules.
Legal aspects of condominium rules (i.e. managements of apartments in development).
Legal procedures and solutions to cancel a purchase in Italy when the developer is in breach of contract and the completion of the construction work is delayed: negotiation of a reduction of the asking price, the assignment contact or issuing proceedings at court (including advice on costs and timescales)
There will be a 30 minute Q & A session at the end of each seminar to enable delegates to raise issues that have particular relevant to their individual development. However, please note that such questions must be of general nature and individual questions can not be answered as our lawyers will not have direct access to your file during the seminars."
It is, perhaps, inevitable that there is little reliable evidence about what was said precisely at these seminars since there is no written record. One matter I should mention relates to the question of when the level of commission to VFI was revealed to the purchasers. Mr Flenley's written closing submission suggested that there was evidence that Avvocato Giambrone "chose to make it public at the March 2009 seminars" that the level of commission was as it was. However, Avvocato Giambrone did not say anything about this in his witness statement nor did he say it in his evidence. I should say that I have been unable to locate a passage in Mr Flenley's cross-examination of any of the claimant witnesses who attended such a seminar (of the exemplars Mr Nambiath and Mr Ballard attended one or other of the seminars) where it was suggested to them that this was made clear at the seminars they attended. I would have expected this to be suggested to them given that it is clear that the case advanced on behalf of the claimants is that it was not until the letter of 29 April 2009 (see paragraphs 238 and 241 - 252 below) that they learned of this. Mr Nambiath said this specifically in his witness statement. Neither he nor Mr Ballard mentioned in their witness statements that they had learnt about the level of commission at the seminars they attended.
Simply looking at this material as it stands, my conclusion would be that the level of commission was not referred to at any of the seminars. I will review the evidence about the letter of 29 April below, but, as will appear, that review reinforces my view to that effect.
The letter of 29 April 2009 – Status Report IV – and other documents at this time
A personal letter from Avvocato Giambrone dated 29 April 2009 was sent to all proposed purchasers of properties within the JoTS development.
The claimants point to a number of passages in this letter as being of significance, one in particular containing, it is said, a highly material disclosure concerning VFI's commission not previously made. I will quote the relevant passage:
"The relationship between VFI (The Promoter) and RDV Development (The Builder)
I am aware that you may have received certain confusing emails from both companies and I feel it is important to clearly define the roles of the parties named in the Preliminary Contract.
When the project was initially marketed, VFI was granted a Mandate agreement by RDV Development (an Italian limited company which owns the land and is constructing the development). This Mandate agreement allowed VFI to market Jewel of the Sea Resort on behalf of RDV Development to the foreign market. In consideration of this marketing and after sales activities, I understand that VFI has been paid a commission of approximately 31% of the purchase price of your property. This means that for a property sold by VFI for €100,000, the average buyer was asked to pay a 50% deposit (€50,000) of which €31,000 was paid to VFI and the difference (€19,000) was utilised by RDV to finance the build.
This information is crucial to understand the reasons why the commercial relationship between RDV and VFI has irretrievably broken down.
We were copied in to a letter sent from RDV to VFI by registered post on 18 March 2009 in which RDV cancelled the Mandate agreement for VFI. As a result, VFI are no longer authorised to act on behalf of RDV or to make any representations in relation to Jewel of the Sea because the power to act on behalf of the builders has been revoked. In plain English this means that VFI are not authorised to contact you in relation to your purchase in Jewel of the Sea nor to promote an After Sales Service of any sort.
Whilst we understand that VFI is named in your preliminary sale agreement, please rest assured that this revoked Mandate agreement does not affect your purchase.
You will appreciate that as your representatives, we are not privy to the specific reasons as to why this Mandate was revoked: however, I understand that the disagreement started by virtue of the level of commissions earned by VFI and because of the difference of opinion as to which party was responsible to provide an extension of the expired Bank Loan Guarantees.
There are conflicting opinions as to VFI's official role in these transactions and it is apparent that the boundary between the definition of their role as "Real Estate Agent" and "Promoter/Marketing consultant" has become blurred. In Italy the role of an (sic) "Real Estate Agent" is a heavily regulated profession and the commissions that agents can charge are limited by law.
It is possible that the commissions received by VFI are contrary to the provisions of the Italian Civil Code which states that (a) any company acting as an estate agent or an intermediary in real estate transactions must be registered with the Chamber of Commerce in the register of "estate agents" and (b) commissions chargeable to a developer cannot exceed a reasonable value of say 6%.
31% is, in my opinion, an unreasonable figure and, for this reason, I understand that RDV has or intends to put VFI on notice that civil proceedings will be issued to recover the excess commission: this is a matter entirely between VFI and RDV, and a Judge will decide if the dispute proceeds to trial. This will not affect your purchase.
To prove our independence and impartiality from both RDV and VFI, I can confirm that VFI is represented by Studio Legale Metta in Bari whereas RDV is represented by Avv. Romolo in Reggio Calabria.
….
The relationship between VFI and Giambrone Law
…
In my opinion, VFI has had disagreements with different building companies in Calabria with regards to the non-payment of commissions for some property purchases. Due to the sheer amount of transactions over a limited period of time, there are still reconciliation issues as some funds have been allocated to wrong purchasers in error, thus bringing more confusion into this equation."
I would like to reassure you that the Client accounts of our law firm have been audited by independent Chartered Accountants and all transactions related to our clients' funds are supplied to our auditors.
…."
[All emphasis as in original].
The letter went on to deal with "the completion procedure", the relevant part of which was as follows:
"I am due to meet with Mr Cuppari (the owner of RDV) and the Notary who has been appointed to execute the Public Deeds of Sale … by the end of May/early June in order to:
(a) discuss the progress of construction works;
(b) create a realistic timetable for completions, considering that Sapphire will be due to complete from late June 2009;
(c) formally appoint our firm to coordinate all completions within Jewel of the Sea (whether our clients or not) in order to avoid confusion between buyers of several nationalities.
Clearly the task ahead is very challenging for all of us, because it will be very difficult to arrange more than 600 completions in such a short time-frame (July-December 2009 for Phase 1) considering that buyers in Jewel of the Sea are of various nationalities.
For this reason, Mr Cuppari and the Notary have indicated that they would prefer to delegate the task of coordinating completions to one law firm only: I also plan to open a temporary satellite office in Brancaleone during the completion period so that our attorneys will be at hand to act on your behalf to execute the Final Deed of Purchase before [the Notary]."
Finally, for this purpose, what was said about the bank loan guarantees is of importance:
"As many of our clients are aware, the majority of the bank guarantees initially issued by RDV Developments have expired towards the end of last year.
Giambrone Law contacted the vendors (RDV and VFI) one month prior to the expiration date, in order to remind them of their obligation to provide the guarantee for the entire duration of the Preliminary Contract.
I would also urge you to consider that estate agents have a vested interest in your purchase because they get paid hefty commissions only if you buy the property: as usual, it is important to exercise caution when following the advice of an estate agent bearing in mind their evident conflict-of-interest.
…"
As indicated above, there are a number of aspects of this to which the claimants draw attention, but I will focus for present purposes on those passages concerning VFI's commission. It is argued that the passage "I understand that VFI has been paid a commission of approximately 31% of the purchase price of your property" (with the underlining in the original) was a deliberate attempt to suggest that Giambrone Law had only recently learned that VFI had been paid commission at this rate, the words "I understand" seeking to convey that meaning. As will be apparent from paragraph 138 above (and as Avvocato Giambrone accepted when giving evidence), he and his colleagues knew the level of the commission payable to VFI from no later than March 2007.
Avvocato Giambrone's explanation for the meaning of the words "I understand" appears in the following extract from the evidence. Mr Majumdar was suggesting to him that these words carried the suggestion (deliberately made) that the 31% was a recent discovery:
A. The paragraph is important. So I am dealing with the relationship between VFI and RDV. The background is that these two companies were bombarding clients with conflicting information. RDV said, "Do not deal with VFI anymore". VFI said "It is nothing to do with us, we are still acting in Jewel of Obviously, that was a concern and I explained during the seminars what the relationship was between the two companies. So, again these issues were not new, they had already been discussed during the various seminars that had been attended to. This sentence is nothing else, it is a big story being made about it. What it says effectively is that VFI was entitled to be paid 31% for the purchase price in return for a number of activities, marketing and after sales activities and then I continue and explain how in simple terms, so for every property worth €100,000, 19,000 went to RDV and 31,000 went to VFI.
MR. JUSTICE FOSKETT: You must deal with this obviously but the point being put to you is that this gives the impression that you have only recently discovered the 31%.
A. No, what I am saying here is that VFI has been paid 31% in consideration for marketing and after sales activities. That is how - again, English is not my first language, but that is what it means to me, clearly. VFI has been paid a percentage of your purchase price in return for doing certain work. Certain works were these marketing and after sales activities, because the context was RDV are saying that VFI is not entitled to that money, or part of it, because the letter that we looked at before from RDV -- unfortunately, we did not look at the relevant bit. The final bit says that RDV put VFI on notice for the refund of all the deposits - the commissions. So that was the background.
This answer broadly reflected what had previously been pleaded in response to the suggestion that these words were intended to convey recent acquisition of knowledge concerning the level of commission:
"The words quoted beginning "I understand…" have been quoted out of context and were not intended to imply anything about Gabriele Giambrone, or the defendants' knowledge of the level of VFI's commission. Further, Avv Giambrone is not a native speaker of English, and it is not appropriate to subject his written English to detailed textual criticism of nuance as one might do to a native English speaker. Hence the alleged dishonesty is denied."
I will return to this, but there are two other documents that arguably inform the position in this regard as it was at the relevant time. The first is a letter to Mr and Mrs Lissenburg dated 19 May 2009 – in other words, less than 3 weeks after this lengthy letter was sent. Their e-mail of 11 May and letter of 19 May, to which the letter of 19 May is a response, have not been before the court (and indeed they are not exemplar claimants) but it is plain that they raised the issue of the commissions in their e-mail and the nature of their question appears from the answer which was as follows:
"We note your comments with regards to the content of or letter of 29th April 2009
With regards to the commissions earned by VFI, this information has only just come to light and it did not form part of our due diligence to check levels of commissions which are a private agreement between VFI and the builder. Therefore we are unable to comment on your question with regards to who "approved" the commissions. We simply advised you of the level of commissions earned because we felt that it was pertinent for your purchase.
…."
I should, perhaps, record that their letter of 19 May (though not specifically available in these proceedings) was, according to Mr Ian Buchan, in broadly the form of an e-mail that many concerned purchasers wrote to Avvocato Giambrone at about this time which was apparently available to download from an Internet forum called 'In Calabria'. Mr Buchan, a long-time friend and associate of Avvocato Giambrone whom he met in February 1999 whilst studying at the University of Aberdeen, was General Manager of the Palermo office at that time.
That letter was drafted not long after the letter of 29 April (which Mr Buchan thinks he typed) and responsibility for drafting it has been accepted by him in the circumstances to which I will refer below. The focus of the questioning on behalf of the claimants was upon the expression "this information has only just come to light" in relation to the commissions payable to VFI. I will turn to what he has said about it shortly, but he had also drafted a response to an e-mail from Mr Cleere on 1 April (so a few weeks before the letter of 29 April) which contained the following passage:
"We, as your lawyers, have become aware of the level of commission earned by [VFI] and we feel that they are now acting illegally in Italy, this is probably the reason they are retaliating by spreading unfounded rumours regarding our client accounts. Which I repeat again, are heavily regulated and audited externally. It is important to note that VFI are not regulated!
We reiterate that we are your lawyers, we are independent and we do not and have never acted for the other side in these transactions."
There had been a number of e-mail exchanges involving Mr Cleere and Mr Buchan that day, but those paragraphs appear to be in response to an e-mail from Mr Cleere in which he said that it was clear to him that Giambrone were not representing him, but were representing the developer. The e-mail contained this sentence:
"You seem to have a very close relationship with them but I am your client and in my dealings with your firm has not inspired any confidence and nor have I got the impression you are working on my behalf."
The suggestion was made to Mr Buchan that both these communications suggested that the message being conveyed to the recipients was that Giambrone & Law had only recently discovered the level of the commission payable to VFI. In relation to the e-mail to Mr Cleere he accepted that, on the face of the paragraph quoted above, it appeared that the e-mail referred to the amount of the commission, but suggested that it needed to be seen in the context of the e-mail exchange as a whole. It was put to him that it sounded as though he was saying that this was a recent discovery but he said that he did not see it that way. When pressed further about this his response was as follows:
"The fact it was 31% came into my knowledge probably as a result of my knowledge, not the firm's knowledge -- as a result of the April 2009 update. I knew payments were going to VFI, obviously, as a result of my reconstruction exercise. But I was not concerned with whether it was 31%, 62%, 100% because, like I said in relation to Italian Connection, 100% went to Italian Connection. I was just concerned with making sure A added to B equalled C."
In relation to the letter to Mr and Mrs Lissenburg, Mr Buchan raised the question of whether it was actually sent given (as indeed is the case) that there appears to be an uncompleted paragraph at the end of the letter. However, the fact is that, even if it was a draft (which, frankly, I doubt), the question of how the particular words came to be included arises. He said that he could not say what the sentence in the letter (or the whole paragraph) meant unless he could see the e-mail of 11 May, but he believed that the level of commissions to VFI became relevant at that stage since RDV were then seeking to recover those commissions from VFI.
When Avvocato Giambrone was questioned about this letter, he was anxious to say that it was not drafted by him, that he was not involved in day-to-day client queries and that it needed to be looked at in the context of the e-mail of 11 May (which, as I have said, for some reason is not available or in evidence in these proceedings). After a fair amount of questioning about the letter and its meaning (to which Mr Buchan was listening as he was present in court), Mr Flenley indicated that Mr Buchan did indeed write the letter. Plainly, the context in which it came to be drafted was potentially significant. At the time it was drafted Mr Buchan was in the Palermo office, as was Avvocato Giambrone and the other lawyers who were engaged in the JoTS work at the time. Avvocato Francesco L'Abbate was no longer there. Mr Buchan accepted that the letter was in his style, but said that he would have checked with the lawyers about any aspect that needed legal input and they would have checked it before it was sent out. He maintained that he could not answer the specific issue of why he used the phraseology he did concerning the commissions without seeing the email of 11 May, but he accepted that he would have discussed the question of due diligence referred to in the letter with the lawyers.
I have to say that Mr Buchan's explanation of the phraseology used in the two documents he drafted was no more convincing than the explanation of Avvocato Giambrone when dealing with the terminology used in the letter of 29 April. Mr Buchan's native language is English. He was plainly answering a question about the level of commissions raised by Mr and Mrs Lissenburg because they, equally plainly, had picked that issue up from the letter of 29 April. I do not think that the absence of the e-mail of 11 May makes any difference to the ability to answer the question raised and it has simply been advanced as an attempt to avoid addressing an awkward issue. Avvocato Giambrone's native language is, of course, Italian, but he speaks English fluently – he had no difficulties in facing cross-examination over the best part of three days. He did, of course, study in the United Kingdom between 1998 and 2000 and he worked in London before qualifying as an Avvocato. I am quite certain he would have chosen his words carefully and, given his close interest in the whole JoTS business (particularly in this very intense period in 2009 when the firm was coming under increasing pressure), I cannot believe that he would have let anything go out from the firm that did not have his express approval. I am quite sure that the intention at this time in 2009 was to suggest to the clients of the firm that the firm had only recently discovered the level of commissions paid to VFI. All attempts to suggest that the letters meant something else are, in my view, attempts to re-write an inconvenient part of the history.
That conclusion, of course, invites consideration to the question of why that should have been so. I will return to that in due course (see paragraph 375).
Avvocato Giambrone's Legal Opinion dated 22 June 2009
Although not mentioned at all in his witness statement, Avvocato Giambrone prepared personally a lengthy document entitled "Legal Opinion on Italian Law" dated 22 June 2009 and signed personally by him. Its purpose, he said in his evidence, was to try "to explain to my clients what the [Italian] law states."
The relevant parts were in these terms:
"I have been asked to provide a Legal Opinion to the current buyers of Jewel of the Sea (Brancaleone, Calabria) in respect of the interpretation of Italian law regarding the validity of the existing bank loan guarantees issued by the developer and/or their compliance with Legislative Decree 122/2005 and an update on the administrative issues regarding the planning permission issued by the municipality of Brancaleone for the construction of the aforementioned development.
Bank Loan Guarantees
With this opinion, I will explain the difference between bank loan guarantees ("fidejussioni") issued by a company registered under Art. 106 and those registered under Art. 107 of the Legislative Decree n. 385/1993 which is also referred to as "Testo Unico Bancario". Further I will explain why Art. 107 is not relevant with regards to the initial guarantees issued against the deposits paid for purchases in Jewel of the Sea; and explain the method that the buyer must use in the event that the guarantee becomes enforceable.
…
On the basis of these preliminary considerations, I conclude that the obligations of issuing and releasing a guarantee under decree 122/2005 are placed upon both V.F.I. Overseas Property Ltd, an Irish company registered in Dublin, and R.D.V. s.r.l./VECO Costruzioni/F & C S.R.L. which are Italian companies registered at the Chamber of Commerce of Reggio di Calabria and which are constructing various phases of Jewel of the Sea (Phase I and II) and Beach Front (Phase I and II). Such obligations are classified under Italian law as "obbligazioni solidali" which means that both companies are jointly and severally liable for the issuance and the production of the guarantee in favour of the buyer.
Art 106 v Art 107 – Companies Issuing Bank Guarantees
…
For the avoidance of any doubt the initial guarantees were issued by an insurance company, not a "financial intermediary" and therefore I find that any specific references to Art. 107 are not relevant.
In conclusion, the bank guarantees received at the outset on exchange of Preliminary Contracts, in respect of Jewel of the Sea, were fully compliant and effective.
It is apparent, at this stage, that for some purchasers, there is not a current effective bank guarantee in place and this has occurred due to the differing opinions between R.D.V. and V.F.I. as to which company was responsible to renew them. The onus to provide them is on both companies.
Claiming your deposit against the Bank Guarantee
In order to be absolutely clear I feel it would be sensible to advise you of the exact method which must be used, and the conditions that must be met, in order to claim your deposit back using the "fidejussione" (whether this unlikely situation may occur or not).
…
Since the bank loan guarantees are an insurance policy, it is common practice for them to be valid for only one year, as with many insurance policies. The vendor has a legal obligation to ensure that a bank loan guarantee is in place for the entire duration of the contract, until the construction work is completed and that it is valid in accordance with the criteria set out in the decree.
As your legal representatives, whilst we can put pressure onto the vendor to comply with the requirements of the Italian law, we cannot, physically force them to issue a new Bank Loan Guarantee: we can simply request it, formally, in writing. It is important to note that the bank loan guarantee only covers the event of the builder going into administration, and does not secure the funds in any other situation.
In any event, the Italian legislative framework is very protective of the buyers' position and a buyer may seek recourse in court to issue proceedings against the developer for breach of contract.
If the vendor fails to produce an extended Bank Loan Guarantee against a deposit, the contact will be come null and void and the buyer is entitled to rescind it, and seek a refund of the deposit paid (in this case without consideration) plus interest and damages.
Planning Permission
With this section of the opinion I will assess the issues related to the planning permission documents for "Jewel of the Sea" and "Beach Front", I will explain the extent of the due diligence carried out during 2007 and finally I will clarify the events that occurred after the due diligence was carried out. I will confirm that, at the outset, the planning certificates were in place and that the revocation of the building permissions by the Regional Government in Calabria, was contrary to law. In any event, I will demonstrate that the current status of the planning permission is due to the actions of the Municipality of Brancaleone. I will make clear that we (your representatives) were not informed of the developments after having completed our due diligence. It is for this reason that our clients were not specifically informed, until now. Given the planning permission was in place initially, there was absolutely no reason why deposits should have been legally withheld from the builder.
I would like to emphasize that whilst I do consider the internet to be a valuable tool for sharing information, I would advise buyers to be cautious and to check information carefully since there is very little control over the content posted on forums and much of the recent speculation about Jewel of the Sea and Giambrone Law is factually incorrect; this has created uncertainty and concern amongst the buyers in this development.
I apologise that certain parts of this analysis may seem very technical, this is unavoidable due to the very complex nature of Italian Real Estate and Administrative Law, which is based upon different sets of statutory provisions as well as national and regional laws, decrees and legislative measures. It is important that I try to explain all procedures and make reference to the relevant legislation in order to allay any fears that buyers may have with regards to the planning permission at Jewel of the Sea and Beach Front. For the record, Studio Legale Giambrone (Giambrone Law) cannot guarantee that these developments will be completed on time (or that they will be completed at all) since it is not within our remit to do so, nor do we represent the building companies involved. I can however, assure buyers that we will monitor the situation constantly and will inform each buyer of the relevant updates only if these updates are necessary.
…
Suspension of planning permission
In respect of the Jewel of the Sea planning permissions listed above, the validity of building permits No. 13/2007 and No. 06/2008 was, for the first time, unilaterally suspended by the R.D.V. s.r.l. on 13th June 2008, and thus the construction work stopped. This occurred due to the view taken by the technicians of the Financial Institute of the project, who claimed that it was a requirement to obtain the opinion of the Regional Government of Calabria, Town Planning Department, in order to ratify an effective building license at the site.
Following on from this, a written communication from the Municipality of Brancaleone (17th June 2008 Protocol No. 2843 and 28th June 2008 Protocol No. 4183) ordered, as an interim measure, the suspension of building permits previously issued and granted to R.D.V. s.r.l. [No. 13/2007 and No. 06/2008] and ordered the initiation of legal proceedings with the aim of reviewing these building permits.
On 31st July 2008 R.D.V.'s lawyers made an urgent application to initiate proceedings under Art. 5 D.P.R. 447/1998 and art. 38, D.P.R. 380/2001, claiming that in the interpretation of the recent Jurisprudence of the Italian Courts, the Public Administration ad competent Authority required a preliminary review of the existence of all conditions of law aimed at the regularisation of permits and elimination of procedural defect, given the existence of part of the development constructed in compliance with the building permit previously granted and subsequently suspended.
The same Regional Office of Calabria, with specific opinion dated 26th August 2008 had already positively expressed the need to adopt measures under Article. 38, D.P.R. 380/2001 paragraphs 1 and 2 and subsequently the re-proposition of the intervention in variant with the simplified procedure under Article. 5 of D.P.R. 447/1998. The administrative procedures that first led to the cancellation of these permits (which was implemented by separate administrative orders under Protocol 7355 (permit No. 13) and 7354 (permit No. 06), was notified to R.D.V. on 15th October 2008, without any motivated assessment prior to the removal of the breach of procedure, according to art. 38 paragraph 1.
R.D.V's lawyers did not inform us of these administrative decisions which had cancelled the planning permission documents referred to above, nor did we have any other means to ascertain these suspensions as the administrative decision was internal between the Public Administration and R.D.V.
I must therefore highlight how the construction works started only after receiving all the necessary health permits, building permits, planning permissions civil permits and engineering approvals among others which had emerged in 2007 during our due diligence." (All emphasis as in original.)
It is not clear who "asked" him to prepare the opinion and it was sent, unsolicited, to all purchasers with a request that each paid ?850 plus VAT for it. Not all were prepared to pay.
Aspects of this Opinion are criticised by the claimants, largely on the basis that it is self-serving and exculpatory so far as the firm was concerned. By then, of course, all the claimants were bound by the preliminary contracts. I will return to its implications where appropriate below.
The levels of the deposits
A major feature of the case advanced by the claimants is that the firm should have disclosed to them the basis upon which their 50% deposits were to be utilised, with only 19% going to the building company. Leaving to one side, for the moment, the expert evidence on this issue, I will revert to the issue I mentioned in paragraph 252, namely, why it was that the firm pretended that it only learned about the level of commission in about April 2009.
Mr Majumdar submits that if the firm gave the impression that it had only just discovered this information then no-one would or could ask why it had not told its clients before. He observes that it seems to have been an effective tactic because, until the revelation of the Mandates during 2013 (see paragraph 68 above), no-one outside the firm knew that the firm knew the position from the outset in 2007.
Why should the firm be sensitive about this? Again, leaving aside any expert opinion about it, there are two revealing pieces of evidence from within the firm (albeit given by those who were not involved in the early stages) that offer an insight into this. The first is an e-mail from Louise Connell to a Mr McShane on 11 August 2011 in the following terms:
"In relation to your question about VFI, they only acted as the Estate Agent in this case and the Mandate between RDV and VFI was between them, we do agree that the split of 19% for RDV and 31% for VFI was wrong and that RDV should have received more however, that was their agreement."
Louise Connell was employed to assist Avvocato Virga (who joined the firm towards the end of 2010) in dealing with client inquiries. She was not a lawyer and was thus doubtless reflecting a view expressed to her by Avvocato Virga or another lawyer in the firm. Although Avvocato Giambrone suggested that this was a "personal view", it would be very surprising if a non-lawyer (or indeed anyone in a purely administrative position such as a "relationship manager" which is what she was) would express such a view to a client. However, it reflects a clear recognition that the builder ought to have received more.
Avvocato Virga confirmed when he gave evidence that he had approved the statement made in the e-mail and that it reflected his view at the time. He did not seek to depart from that view and he was one witness who gave evidence on the defendants' side upon whom I felt I could safely rely.
Shortly before that e-mail, on 11 May 2011, Louise Connell answered a query from a client, Mr Martin, in these terms:
"In relation to your funds these have been paid to VFI … in accordance with your Preliminary Contract, the funds are not held in any bank account as they would have been used by RDV at least to start the building works on the development, of the 50% deposit 31% went to VFI Overseas property for their commission in selling the property to you and 19% went to RDV to start the works. This why it is not just as simple as asking RDV to refund the 50% deposit back to you as one, they would only be able to refund 19% as two, the money is no longer in any bank account as far as I know."
It is obvious that the practical implications of the way the deposit was divided between VFI and RDV were apparent within the firm.
As I have indicated, this is an issue upon which there was expert evidence and I will be turning to the opinions expressed in due course (see paragraphs 374 - 396). However, this is a convenient point at which to say a little about the various experts who gave evidence. I have referred to some, if not all, of the experts already, but I should introduce them in a little more detail at this stage, indicate my approach to their evidence and my assessment of them.
The expert witnesses
The expert evidence I have received relates to Italian law and practice. As in any case, I have not seen it as my duty either to accept the whole of the expert opinion of each expert or not to accept it at all. As I shall be observing at one part of the judgment (see paragraph 414), an expert can be right about most things but wrong about others.
I should say that I regard each expert as having been properly qualified to assist me. I heard from Avvocato Carlo Scarpa, a partner in the Padua office of Tonnuci & Partners. He was essentially a commercial lawyer who was asked on behalf of the Penningtons Manches claimants to advise on the implications of the Mandates. Avvocato Charlotte Oliver had also been instructed by the Penningtons Manches claimants to advise on the property and professional aspects of the claim. She is English by birth and qualified as a solicitor in England and Wales in 1994 and as an Avvocato Integrato (an integrated European lawyer) in 2001. She practised in Rome in various firms until she formed her own firm in 2013. Finally, instructed on behalf of the Edwin Coe claimants was Notary Francesco Valente. He has been a notary in Martina Franca in Puglia for the last four years and had held a number of academic appointments prior to that
The defendants sought the opinion of Notary Sergio Cardarelli. He graduated from Pisa University in 1959 and was a Notary in Padua for nearly 40 years between November 1972 in June 2012. I think the position is that he has now retired as a Notary, but still practises to some extent as an Avvocato. His first report in this case ran to nearly 80 pages. According to his report, he is the author of, inter alia, what is described as an article in 2009 entitled "The purchase of buildings to be constructed or in the course of construction".
Mr Flenley has subjected each of the claimants' experts to criticism. Of Avvocato Oliver he says that she has never taken any examinations in Italian law, but has learned on the job in three firms. He criticised her for setting the standard of care required for a solicitor at too high a level. He points to a passage in his cross-examination of her where she uses the expression "very diligent" about the duties required of a solicitor in this situation and based upon it he says that is the standard by which she approaches everything. He submits that she is effectively applying the standard of a "meticulous and conscientious practitioner".
I do not consider that that is what she was saying, nor do I think that the passage upon which Mr Flenley relies bears the construction he contends for. Since he attaches importance to this I will set out the passage:
Q. There is no difference between your own personal standards and those of any reasonably competent lawyer. You are no more diligent than a reasonably competent lawyer. Is that your evidence?
A. I do not know.
Q. Is not the case that really you know that you are, if I may respectfully say so having read your report, very diligent?
A. Yes, I think I am very diligent and I think you have to be in this job. That is why clients would look to a lawyer to help them in a property transaction in a foreign country.
Q. Is your approach really that any lawyer doing this sort of work has to be very diligent?
A. Yes, because the buyer does not have the opportunity to be very diligent. They do not know the language, they do not know the law.
Q. The standard that you are applying throughout your reports is: Did the defendant act in a very diligent way?
A. Did the defendant act in a diligent enough way, in the circumstances of this particular case, with red flags that were popping up?
Q. Yes, but in light of your last but one answer, in your view, in order to act in the circumstances of this case in a diligent way, the lawyer had to be very diligent, because that is the test that you say you have applied in your report?
A. Yes.
What she was saying, in my view, is that in the circumstances of this particular case (i.e. foreign purchasers buying off-plan properties in Italy) what was required was the diligence to be expected of a lawyer when, as she put it, "red flags … were popping up." I do not see what is wrong with that view or that it inflates the standard of care beyond what is reasonably to be expected in that situation.
Mr Flenley then relies upon an answer she gave to him when he asked her whether she would expect the solicitor effectively to guarantee that nothing could go wrong with the purchase when she gave this answer: "He is guaranteeing that he has done everything possible to ensure that the buyers are not going to be taking any risk in buying" the property. It is to be noted that this answer was given in the context of some further cross-examination by Mr Flenley after I had asked Avvocato Oliver for her assistance on what she would have understood by the "multi-object investigation" expression (see paragraph 306 below).
Again I do not consider that this demonstrates any misplaced thinking on her part or that it demonstrates that she is setting the standard of care too high. Doing "everything possible" can only mean doing what is reasonably practicable. Having had the advantage of seeing and hearing her give evidence, I thought that she was a measured and careful person who, of course, had the benefit of looking at matters from the point of view both of an English solicitor and an Italian Avvocato, although her evidence related to the latter.
Mr Flenley says that Notary Valente is not an experienced Notary. True, but within the limits of my ability to make an assessment when questions and answers are translated, I thought that he was also a careful and measured witness who was a very competent lawyer. He cannot match Notary Cardarelli for experience – few could – but that is not the test. Mr Flenley suggests that the effect of a piece of cross-examination of Notary Valente had demonstrated a glaring error in his report such that it "cast considerable doubt on the weight of his evidence."
I have reviewed the transcript of the cross-examination which, of course, I recall in any event. With no disrespect to Mr Flenley (or for that matter to Notary Valente), it was a very difficult passage of the evidence to follow. In fact it is not central to the issues in this case and I am not really persuaded that it constitutes the volte face that Mr Flenley suggests occurred. However, I will assume in Mr Flenley's favour that he pointed to something in Notary Valente's report that, after prolonged testing, was shown not to be wholly accurate. That does not mean that the rest of his evidence is to be regarded as doubtful. As will become apparent (see paragraph 414), I have not applied that test to Notary Cardarelli's evidence: if I had done so, I would have had to approach all his evidence with considerable doubt. As I have said, Notary Valente gave the impression of being a talented and conscientious lawyer who was endeavouring to assist me (not the party who instructed him) to the best of his ability.
Notary Cardarelli is very experienced, though essentially as a Notary and not as an Avvocato. To that extent he brings a perspective which is different from that of a solicitor or Avvocato to a potential purchaser of an off-plan property. It does not negate the value of his testimony, but it is a fact that has to be borne in mind, indeed as it does in relation to Notary Valente's evidence.
Mr Flenley accepts that Avvocato Scarpa was well qualified to give evidence on the areas he did, but subjects his evidence to criticism in a number of areas. His evidence was generally directed to the issue of conflict of interest. He expressed the view that the Mandates put the defendants in an area of potential conflict of interest. Although I conclude elsewhere in this judgment (see paragraph 396) that a finding of conflict of interest is unnecessary, I do not doubt that such a conflict could have arisen through the Mandates and I cannot see upon what basis Avvocato Scarpa can be criticised for expressing the provisional view he did in his report. Where I think Mr Flenley's criticism has some justification is in relation to Avvocato Scarpa's view that the defendants were bound to confidentiality by virtue of Article IX of the Mandate. As will appear (see paragraph 396), I do not accept that view (although I can understand the argument), but I consider it to be irrelevant. However, it does not undermine Avvocato Scarpa's evidence completely.
The nature and standard of the duty of care and its scope
(i) the nature and standard of the duty of care – the general approach
It is, I apprehend, common ground between the parties that the starting point for determining the nature and extent of the duties owed to the claimants by whatever manifestation of Avvocato Giambrone's practice they instructed is what is to be expected in English law of an English firm of solicitors. I say "the starting point" because what the practice set out to do was to advise, guide and represent proposed purchasers in the acquisition of off-plan properties in Italy, something which ordinarily an English firm would be unlikely to undertake. It follows that the constituent elements of the duty owed are not truly determined by what, without more, an English firm would have done. The issue has to be looked at in the context of what a firm based in the English jurisdiction, but with actual or professed expertise in the Italian off-plan market, would have done. That goes further than Mr Flenley's contention that the firm "had a duty to act as would the reasonably competent English [conveyancing firm of solicitors], holding [itself] out as able to conduct conveyancing in Italy" which, for the reasons set out below, is too restrictive an approach. However, for present purposes the fact that the firm was based in and subject to the English jurisdiction means, in the first instance, that it owed the claimants as actual or potential clients the duties established in English law, namely, a contractual duty and a tortious duty to exercise the requisite degree of skill and care in acting for and advising them: see generally Jackson and Powell on Professional Liability, 7th Edition, paras 11-004 – 11-015. Also owed were the accepted fiduciary duties that a solicitor owes to a client and the duties as a trustee in relation to client monies received: Jackson and Powell, paras 11-016 – 11-042. A solicitor in England is also bound by certain regulatory obligations under the Solicitors Accounts Rules ('SAR') and the Code of Conduct applicable at the time. The firm was plainly subject to those obligations.
There has been no argument addressed in the case concerning the Code of Conduct and I do not need to deal with it further. (I should emphasise that I reach that conclusion not because Avvocato Giambrone was not asked about it in cross-examination, but because no further issue was raised in the trial about it.) There is, however, an issue about the extent, if any, to which the SAR constituted or reflected the terms of the trust on which the claimants' money was held. Relying on what Chadwick J, as he then was, decided in Bristol & West v May May & Merrimans [1996] PNLR 138 at 159A-B, Mr Duddridge has submitted that the defendants' obligations under the trust upon which the claimants' money was received and retained included the obligation that they would comply with the requirements of the SAR 1998. Chadwick J held that, absent any express trust imposed by the client at the time the monies are paid to a solicitor, an implied trust arises to give effect to the SAR by which the solicitor is bound.
Mr Flenley argues that in the subsequent case of Bristol & West BS v Mothew [1998] Ch 1, a decision of the Court of Appeal, Millett LJ referred to May, but "did not approve Chadwick J's statement that the Solicitors Accounts Rules formed part of the trust on which the claimant's money was held" and that it was, accordingly, doubtful whether May survives Mothew on this point.
I am not sure how important this point is for the purposes of the present case, but my respectful view is that the Court of Appeal in Mothew did not disapprove of Chadwick J's approach in May (the issue not, so far as I can see, arising in that case) which, though not strictly binding upon me, is persuasive and which, in any event, I respectfully regard as correct.
That being so, and on the assumption that the SAR have the effect contended for, the relevant rule is rule 15(3):
"Client money may only be withdrawn from a client account when it is: (a) properly required for a payment to or on behalf of a client ... (e) withdrawn on the client's instructions, provided the instructions are for the client's convenience and are given in writing, or are given by other means and confirmed by the solicitor to the client in writing ..."
Mr Duddridge's argument is that since the individual claimants did not know of the amount of VFI's commission they were unable to give informed consent to the payment of that commission to VFI and, accordingly, when payment to VFI was made the payment did not comply with rule 15(3) and was in breach of trust. Mr Flenley submits that this involves writing into rule 15(3) the requirement that payment out be made not only with the client's instructions, but also with the clients' instructions after the client has given informed consent to payment in the event that the solicitor is aware of any matter which might cause the client to decide not to pay out. Those words, he says, do not appear in rule 15(3) and there is no basis for implying them and that to do so would give rise to all sorts of practical problems.
I do not see that this would give rise to insuperable practical problems and there is something very unattractive about the proposition that a client's money can be withdrawn by a solicitor on the basis of instructions that are not given with a full appreciation of the situation. Doubtless whether there is such a full appreciation may vary from situation to situation, but I cannot see that this should prevent the obligation in principle from arising.
To the extent that it is material in this case, I prefer Mr Duddridge's submission.
Returning to the issue of the duty of skill and care, the extent of the duty of skill and care in contract is, of course, determined by the terms of the retainer, those terms being deduced from such written instruments as there may be and/or by inference from conduct. The extent of the duty of care in negligence is to be determined by reference to all the recognised principles including whether there has been an assumption of responsibility by the solicitor going beyond what would ordinarily be expected of a reasonably competent solicitor.
Because it is English law that governs all these issues, it is by reference to the approach of English law that any documentary material of relevance is to be judged. That some documents were or may have been drafted by non-native English speakers is not relevant to that approach. Having stated that as a proposition of principle, given the role that Avvocato Giambrone played personally in this case (and the role that others who were either native English speakers or who had a good command of written and spoken English played), the proposition has little practical relevance to this case. But nonetheless it is the contention of the claimants that what has been said by or on behalf of Avvocato Giambrone's firms must be judged (a) objectively and (b) by reference to what the kind of person to whom it was addressed would reasonably have understood it to mean. Although Mr Flenley has made one or two pleas that what was said in various documents should be assessed by reference to the fact that it was or may have been drafted by a non-native English speaker, I did not understand him seriously to dispute the general approach contended for on behalf of the claimants. At all events, I am quite satisfied that it is the correct approach and I will adopt it. I might add in this connection that Avvocato Giambrone said in his evidence that he and his colleagues, when setting up the English practice, were endeavouring to "be as English as possible" from a number of points of view including the sending of a client care letter. Against that background (and indeed the background to which I will refer in a little more detail shortly), he can, in my judgment, have no complaint that his words and those spoken on behalf of the firm must be assessed by reference to the way in which his English-speaking clients would reasonably understand them in the context in which they instructed him. If that approach should result in the conclusion that a wider area of responsibility than normal has been undertaken then that would simply be a result of the working through of the English law approach to the interpretation of the relevant documents.
I have thus alluded to the possibility that the terms of the retainer and/or the assumption of responsibility under the law of negligence might result in the conclusion that wider responsibilities than those expected of an ordinary, reasonably competent, solicitor were undertaken in this case. Mr Flenley has been anxious to submit that there is, as he put it, "no middle way between on the one hand a duty of reasonable skill and care and on the other hand a promise or guarantee" that all will be well and that no problems will emerge. I accept the submission as far as it goes, but what constitutes reasonable skill and care in any particular context is determined, at least in part, by what the professional person claims to be his area of skill and expertise and what he claims he can provide by way of information, advice or guidance to the client. This is simply a manifestation of the common sense proposition that a client who goes to a High Street solicitor cannot reasonably expect the service of an elite City commercial practitioner, just as a patient cannot expect his General Practitioner to exhibit the kind of skill and care and area of expertise of a Consultant in a particular area of speciality. However, if the professional person professes to have skills and expertise in a particular area, the client (or, in a medical context, the patient) is entitled to assume that he or she does indeed possess those skills and that expertise. Putting it in layman's language, if a professional person sets out his stall in a particular sphere as involving the ability to go an extra mile, his work is to be judged by reference to someone who can in fact go that extra mile.
(ii) the duty undertaken – just legal matters or further?
So what did Avvocate Giambrone's firm claim as its sphere of expertise in this case and what documents are relevant for determining the answer to that question?
In the first place, there is no doubt, whether looked at subjectively or objectively, that the intention behind everything that Avvocato Giambrone and his associates said and did in 2007 and 2008 (the material period for this purpose) was to invite instructions from proposed purchasers who were resident outside Italy by giving them enhanced comfort that the firm was a reliable and dependable firm to instruct with experience and a proven track record in the Italian off-plan market. I will consider some individual features of this, but those features need to be looked at together and seen as a whole.
The emphasis laid upon the firm's independence was plainly designed to offer reassurance to anyone who might have thought that the firm would simply be dancing to the tune of the promoters and developers. This is a message to be received from VFI's brochure (which, even if Avvocato Giambrone and his senior associates had not seen it, contained material that would have come as no surprise to them and would have occasioned no concern) and, of course, the message derived from the letter of 14 February 2007 (which described the firm as "an independent firm of Italian lawyers in London": see paragraph 97 above) and the "retainer letter". Indeed it was the message conveyed orally by the firm's representatives when the opportunity presented itself (see paragraph 102).
The expression "due diligence" itself would have conveyed to the ordinary well-informed person that a detailed and careful appraisal was to be undertaken. I will consider the extent of that appraisal shortly (see paragraphs 294 - 327).
The emphasis laid upon the regulation of the firm by The Law Society of England and Wales and the extent of the professional indemnity insurance cover were also designed to give reassurance and, of course, made the clients feel that if anything went wrong it would be resolved within the domestic jurisdiction – and, incidentally, without difficulty.
In the "retainer letter" there could hardly have been a more encouraging invitation to instruct the firm henceforth given the description of "one of the leading Italian Law firms in the United Kingdom and Ireland and we have a dedicated department specialising in Italian Real Estate law and off-plan property acquisitions." Even allowing for an element of puffery with the expression "one of the leading Italian Law firms in the United Kingdom and Ireland" (see paragraph 153 above), the suggestion of the existence of "a dedicated department specialising in Italian Real Estate law and off-plan property acquisitions" would have operated as an inducement to everyone to think that everything that needed to be considered in "off-plan property acquisitions" would be considered.
The letter goes on to say that the firm "[has] been requested to complete the necessary due diligence over the development, issue the Preliminary Contracts and to advise you in relation to the legal aspects of the aforementioned purchase." Whilst it is important not to construe the terms of this paragraph (or indeed any aspect of the letter) as if it were a statute, any reader would have seen this paragraph as involving the firm doing three different things –
(i) the necessary due diligence over the development,
(ii) issuing the preliminary contracts, and
(iii) advising on the legal aspects of the purchase (my emphasis).
Equally, reading on further would demonstrate that the firm was proposing to undertake "due diligence over the Limited Company which is building the Complex".
It is, of course, important to look at the letter as a whole and I will come to some of the points made about it by Mr Flenley shortly. However, stopping at that point, what would the expression "necessary due diligence over the development" convey to a proposed non-Italian purchaser who was considering instructing a firm of lawyers that was offering the kind of experience and expertise that the firm was offering in that letter? That experience, accordingly to the next sentence, involved "advising a growing number of foreign investors in the Calabrian market" which, it is said, "is now becoming one of the "hotspots" in the Italian real estate market, with prices increasing rapidly". That suggests in the first instance that the contemporary enthusiasm for investing in a property in Calabria is recognised (and not seen by the firm as something to be discouraged), but it also conveys the suggestion that the firm's approach is professional and cautious. That message is also confirmed by the further reference in the letter to the "customary due diligence over the development" and the additional reference to "due diligence over the limited company which is building the complex" which I have emphasised above.
In my view, those features of the letter do convey in their own right the suggestion that what the firm was offering was something more than just ensuring that the legal formalities of the purchase would be complied with so that the purchaser would be secure in the binding nature of the acquisition. They conveyed a clear message that some degree of "due diligence" would be conducted in relation to "the development" as a whole and in relation to the building company undertaking the development. Indeed this message is reinforced by what Avvocato Giambrone said of his motivation in relation to the preliminary research namely, that he "wanted to investigate some more and see whether the project was feasible before becoming involved with it" (see paragraph 83 above). This, in my judgment, is what, according to English law, those aspects of the letter would reasonably have conveyed to the kind of person to whom the letter was addressed. (I should say that, in my view, that interpretation is reinforced by the terms of the Report on Title to which I will turn later, but I reach that conclusion at this stage of the analysis on the basis of the retainer letter as it stands.)
The letter certainly does refer, as Mr Flenley has been anxious to emphasise, to the giving of advice on the "legal aspects of the purchase" and to "all aspects of Italian law which will be relevant to your purchase." There is plainly material within the letter (e.g. those parts referring to land registry searches, legal title, absence of rights of way over the land and so on) which would convey to someone from the United Kingdom that the usual features of a conveyancing solicitor's duty within the domestic jurisdiction would be carried out in Italy. However, it is to my mind an unrealistic and unduly narrow reading of the letter to suggest that it is confined solely to those aspects.
The issue is how much further than what might be termed the basic duties of a conveyancing solicitor has the firm undertaken by virtue of what it said in the retainer letter. In addition to the question of what due diligence "over the development" and in relation to the building company meant, there is the question of what was undertaken by carrying out "enquiries to ensure … that valid planning permission is in place for the project to go ahead."
There has been a sustained debate between the experts who gave evidence as to what might be expected of a reasonably competent Italian lawyer instructed on behalf of a purchaser of an off-plan property in Italian. Whilst I acknowledge the relevance of this to some extent in this case, the real issue is what it was that, as reasonably understood by the non-Italian purchaser of a property in the JoTS development, Avvocato Giambrone's legal practice undertook to do. Whether what it undertook to do was itself feasible is a factor to be borne in mind, but essentially the issue for the purpose of defining the scope of the duty of care owed, whether in contract or in tort, is what the firm said it would do. Although the emphasis is upon what it was that the firm undertook to do, assessed by reference to the way the English law would interpret the words it used, there seems to be little difference between the English and Italian legal approaches. Notary Cardarelli (to whose evidence I will refer more fully in due course) said that if the firm had assumed the responsibility of going further than "normal" due diligence, then it would have to comply with the task it undertook. The relevant interchange in Mr Duddridge's cross-examination was as follows:
Q. It would be possible for a lawyer to agree to carry out investigations going beyond legal due diligence, would it not?
A. It is possible but very rare and I have never seen such a thing happen.
Q. Yes, I appreciate it may be rare for a lawyer to do things that are not legal tasks, but it would be possible for a lawyer to agree to do that?
A. Everything is possible, yes, it is.
Q. A lawyer could agree to carry out detailed investigations to help decide whether a project is feasible or not?
…
A. That is also possible, yes.
Q. If a lawyer agreed to do those things, then he has to do what he has agreed to do?
A. Yes, of course. If the avvocato undertakes to ascertain the feasibility of a project, that is very strange, it seldom happens and if it does so, fine, all the worse for him.
In other words, in Italy (as in the domestic jurisdiction) if a lawyer undertakes to go the extra mile (see paragraph 287), he must do so in fact in order to fulfil the duty he has assumed.
(iii) inquiries as to the funding of the development?
Mr Flenley has submitted that there is nothing in the retainer letter that constitutes a promise to undertake some kind of wide-ranging financial search in respect of the building company or to engage in lengthy accountant-style enquiries in relation to it or the overall project. I agree that is not what would reasonably be expected of the firm purely from the words in the letter, but although Mr Duddridge's question in the passage quoted above used the expression "detailed investigations", it seems to me that the issue is really whether the promised due diligence "over the development" and in respect of the building company demanded some basic financial inquiries upon the basis of the answers to which, if so advised, further questions might be raised. Mr Flenley concedes that RDV and Veco "were new companies and therefore had no track record in property construction" and that there "is no evidence of the total capital available to either RDV or Veco". He goes on to submit that there is "no evidence from which the Court could make a finely calibrated feasibility assessment as at 2007-8 [which] would require sight of all financial information relating to RDV and Veco and expert accountancy (and other) evidence." This, with respect, misses the point. It is not for me to assess whether the project was feasible. The issue is whether the firm should have drawn to the attention of the purchasers the fact (which was easy for it to discover and was almost certainly known in any event) that the two companies had no track record in property construction and that their funding stream to ensure completion of the project was uncertain. Even if one leaves to one side the issue of the use to which the deposits were to be put (see paragraph 374), I think Mr Duddridge is right when he submits that the inquiries would not at this stage have been very onerous: the builders could have been invited to provide evidence of their ability to fund the development to completion or indeed simply to answer a question to that effect in the first place. Although Notary Cardarelli suggested that the developer would "laugh in [the] face" of someone asking the question, I find that very difficult to accept. As will be apparent from the introduction of Decree 122 of 2005 (see paragraphs 120 - 122 above), there had been concerns about the protection of off-plan purchasers arising from failed developments in the recent past. It would be surprising against that background if a developer or builder sought to brush off a reasonably expressed inquiry about the funding of a development, particularly if addressed on behalf of a number of potential purchasers. But even if he is right, that does not prevent the relevant question(s) being asked. If there was a refusal to answer or an unsatisfactory answer given, the clients could be told and it would then be up to each individual to decide whether to proceed. Whether there would be a positive duty on the firm to advise against proceeding where no satisfactory answer was given is a matter to which I will return (see paragraph 352 below), but I am quite unable to see why some inquiry along these lines could not have been made.
In my view, the way in which the "retainer letter" was drafted resulted in a reasonable expectation on the part of the purchasers that attention would be drawn to matters of this nature before they committed themselves to the preliminary contract and the payment of the 50% deposit. The letter conveyed the impression that there would be some element of financial inquiry into the feasibility of the project and the funding of the limited company. As it was, there was nothing in any subsequent communication about it and, if anything, the Report on Title gave added comfort about the feasibility of the whole project. In my judgment, Mr Duddridge is right to submit that the firm should have explained clearly to its clients precisely what the nature of the due diligence and investigations it was carrying out constituted and, given the apparently all-embracing nature of the due diligence work undertaken, to indicate clearly what was and was not being done in case any individual client wanted some further inquiries carried out.
In this context Mr Flenley drew attention to the recent decision of HHJ David Cooke, sitting as a Judge of the Chancery Division, in Kandola v Mirza Solicitors LLP [2015] EWHC 460 (Ch), where at [51] he said this:
"It is not, in general, a solicitor's duty to check on the credit status of his client's counterparty in a transaction unless instructed to do so. There may be circumstances in which a solicitor should check specifically for the commencement of bankruptcy proceedings, since that may affect a party's ability to complete a transaction or give a good title. But that is not the same as a general duty to make checks about risk of future insolvency. Nor can such a duty arise merely because the client is incurring a risk of loss if the counterparty becomes insolvent, for that will be true in most if not all transactions. Nor in my view does such a duty arise merely because the transaction takes an unusual form which does involve a solvency risk (eg on release of a deposit) where the more normal form would not (deposit held as stakeholder). In such cases the duty of the solicitor is to advise of the unusual risk, but not to seek to evaluate it unless specifically instructed to do so."
I do not doubt the correctness of the decision in that case and the accuracy of the general statement thus quoted. However, it does not, in my judgment, assist in a case where, as here, the retainer letter holds out the prospect of a wider enquiry than normal because of the particular nature of the transaction.
(iv) the Report on Title and associated documents
I will deal with the planning aspect separately (see paragraphs 313 - 326). Returning to the issue of the feasibility of the project and what the purchasers ought to have been told, it is to be noted that when the Report on Title was drafted it began with the introductory paragraph set out in paragraph 161 above containing the assertion that the firm had "also carried out a multiple object investigation aiming at determining the feasibility of the targeted purchase". The word "also" came after the first part of the paragraph which recorded that the firm had "independently carried out the due diligence in relation to [JoTS] promoted by VFI" – in other words, the "multiple object investigation" was described as something different from the due diligence. However, irrespective of that, this is an expansive expression which, taken as it stands, would, in my judgment, have conveyed to a purchaser that the firm had undertaken a number of investigations designed to check the feasibility of the project and that nothing untoward or concerning had been revealed. According to Avvocato Oliver, whose evidence on this issue I accept, this expression sets out precisely what would have been expected of the due diligence exercise.
Plainly, the document has to be read as a whole and in the context of the earlier documentation, particularly the retainer letter. Mr Flenley says that the Report on Title, when looked at as a whole and in the context of the letter of advice (see paragraphs 157 - 158 above), is directed solely to legal, not financial, issues. He draws attention to the fact that it contains no report on the result of any financial inquiries and the expression "somehow seems to imply" in numbered paragraph 8 (see paragraph 172 above) could, he says, hardly be weaker and that no reasonable reader of those words could take them as "offering anything more than the faintest indication that the builder might conceivably have the means to build the development".
That seems to me to be a very two-edged argument. Having indicated, on the one hand, the extensive nature of the investigation into the feasibility of the project (with no indications of any perceived problems), on the other there is, on Mr Flenley's analysis, a very insubstantial assertion that the builder "might" have sufficient means to complete the development. In my judgment, it is totally unsatisfactory that a client of a lawyer who has solicited their custom should have to try to choose between potentially mixed messages: such a client is (as indeed all clients are) entitled to a straightforward appraisal of the situation. Nor is it an answer to say that each client could have raised the ambiguity with the firm despite the invitation in the covering letter to contact "any members of our Italian Real Estate Department if we can assist you with any further queries which you may have in relation to your purchase." The detailed Report on Title and accompanying documents included the request to send the 50% deposit and the signed Preliminary Contracts (two copies of which were provided) within 28 days, according to the covering letter, or 14 days, according to the letter of advice. At that stage people would be anticipating that everything was in order.
There is a further dimension to the suggestion that the expression "this somehow seems to imply that they have their own resources to bring the construction to a positive completion" was something upon which no reasonable reader would place much reliance. If, as many of the claimants suggest, they thought that all (or at the least, a very significant proportion) of their 50% deposit went to fund the building work itself, this kind of statement would not, as it seems to me, raise any particular concern in the mind of the reader and would be taken as a reasonable assessment of the situation. If, however, the Report on Title had said that only 19% of the deposit had gone to the builder and 31% to the agent, but had then gone on to use the same expression, it would, in my view, have been most likely that some, if not all, purchasers would have asked the question of how the whole building project was to be completed, particularly if told that it was a recently formed company with no accounts to examine and with no identifiable track record in building developments of this nature.
I should say that Mr Flenley makes what he acknowledges to be the forensic point that Mr Duddridge, on behalf of the Penningtons Manches claimants, did not refer to the "multiple object investigation" expression in his pleadings, even though the Report on Title is quoted extensively, Mr Flenley's argument being that even at the stage of re-amending the Particulars of Claim, Mr Duddridge saw no importance in the expression. He enlarged on that in his oral submissions by saying that Mr Duddridge in his written closing submissions at the end of the trial was "now asserting that there was a general holistic duty more or less to give any kind of advice of any sort" in relation to whether what was proposed was "a good deal or not" and the purpose of this was to try to "force this case into the Portman type of case or to say this is a "duty to advise what to do case". This, he submits, is an argument fashioned to avoid what he describes as "the SAAMCO cap" upon which, on behalf of the defendants, he places considerable reliance (see paragraphs 331 - 356). Mr Flenley accepts that that the Edwin Coe claimants did plead the quotation but did not aver thereby that the defendants "were agreeing to undertake a major accounting exercise examining every financial aspect of the development." He suggested that there had been indications during the trial that the claimants wished to widen their case to embrace such an allegation which, he says, is not open to them.
In the first place, I do not recognise any of the submissions attributed to the claimants as being that "a major accounting exercise examining every financial aspect of the development" was required. It was Mr Flenley who raised the question of the involvement of accountants in his cross-examination of some of the exemplar claimants. The whole point here is that it was Avvocato Giambrone's firm that used the "multiple object investigation" expression at the beginning of the Report on Title which was a vital document for each purchaser to consider before committing themselves finally to the purchase and to handing over the deposit. The way Mr Duddridge has put the matter is reflected in paragraph 302 above and I did not understand Mr Majumdar to take a materially different approach. Nonetheless, however the matter has been raised does not preclude me from forming my own view on the basis of the evidence and argument as to what the duty in this regard was. I have already expressed my view about that (see also paragraph 302). The relationship between that view and "the SAAMCO cap" is a matter to which I will return (see paragraphs 331 - 356).
It is convenient now to turn to the question of what obligation the firm undertook in relation to the planning permission and whether it was in breach of that obligation. I have already examined in some detail how there is, in my view, a potential deficiency in the evidential position on both sides in this case if there was an obligation on the firm's part to go beyond the "face value" of the June 2007 planning permission (see paragraphs 189 - 207 above).
(v) the duty undertaken in relation to the planning permission
The retainer letter (see paragraphs 151 – 154 above) said that the firm would "carry out enquiries to ensure … that valid planning permission is in place for the project to go ahead." The first observation about the wording of this part of the letter is that it does not obviously and clearly confine the obligation merely to checking that the proposed development was in accordance with a planning permission that had been granted. It does not say "we will check that what is proposed is in accordance with the relevant planning permission" or some expression to like effect. It is common ground between the experts that a basic duty to that effect would be owed in such a situation: such a duty would arise in Italy, just as it would in England and Wales. However, at face value, the commitment is to carry out enquiries to ensure that a valid planning permission is in place to enable the development to proceed.
Immediately following the passage of the cross-examination of Notary Cardarelli quoted in paragraph 300 above was the following interchange:
Q. If a lawyer undertakes to ensure that there is valid planning permission in place, then in the same way, he must do that?
A. Of course, if that is his undertaking, of course he has to. That is a very difficult investigation to carry out but if he does take that burden upon himself so much the worse for him.
Mr Majumdar, on behalf of the claimants generally, realistically in my view, accepted that, notwithstanding what would seem on a literal reading of the retainer letter to be an absolute commitment to ensure that valid planning permission for the development was in place, it could not be suggested that such a strict or absolute obligation existed. He did, however, contend that a "degree of enquiry … higher than normal" was required. I think that submission is well founded and I accept it. I reject Mr Flenley's submission that what the firm offered to do was simply "work of a routine nature for Italian conveyancers." The commitment given in relation to checking the validity of the planning permission is of a similar, enhanced level of due diligence to that offered in relation to the financial viability of the whole development to which I have referred above (see paragraphs 302 - 303). It is another part of a package aimed at proposed purchasers which, in effect, says "we are experts in this field – we will check everything for you." I should say that I have reached this conclusion, both in relation to the financial viability aspect of the due diligence and the planning permission aspect, without reference to any concerns there might be about a development being undertaken in an area where, it is said, organised crime may play a part in the construction industry. I will return to that dimension later (see paragraphs 421 - 439).
As with all other parts of the promised due diligence, the commitment is given by, in effect, an English firm of solicitors with expertise and experience in the Italian off-plan market. The difficulty I face at the moment, in the light of where the evidence presently stands, is that I do not know what specific material would ordinarily be available in Italy to carry out the due diligence that the firm undertook to provide, whether at the ordinary or enhanced level. Notary Valente spoke of regulatory and specialist plans (see paragraph 195 above), but gave no greater detail than that and was not cross-examined about it. My assessment must, to a degree, be informed by what the position would be within the domestic jurisdiction because I doubt that it is materially different from the procedures in Italy. However, that ultimately may be no substitute for some further evidence about the practice and procedure adopted in Italy.
Mr Flenley has suggested that what the claimants' case amounts to is to require a level of enquiry that would "involve immensely difficult work … to second-guess the town council's decision to grant planning permission." That overstates significantly what, in my view, the claimants are suggesting and, in any event, what, in my judgment, would be required of an English solicitor undertaking an enquiry into the validity of an English planning permission. What would probably have been required can be assessed by reference to the requirements of domestic planning law and procedure. I will confine myself to what seem to me to be relevant areas for the purposes of this case, but I do emphasise that I consider that more evidence is required of the reasons for the actual or perceived defect in the June 2007 planning permission, whether they were true or imagined defects (given the suggestion that the whole affair arose out of the mistakes of the Comune) and how they came to be rectified. Equally, I will confine myself to a very broad outline.
If the position in relation to the June 2007 planning permission is that the opinion of the Regional Government of Calabria was not obtained, it can be likened within the domestic jurisdiction to a failure on the part of a local planning authority to consult a statutory consultee. The Town and Country Planning (Development Management Procedure) (England) Order 2010 sets out in Schedule 5 those bodies that must (by virtue of Articles 16 and 17) be consulted before the grant of any planning permission in a situation where the proposed development is mentioned in Schedule 5. A failure to do so renders the planning permission granted vulnerable to challenge by a third party and/or to revocation by the planning authority under section 97 of the Town and County Planning Act 1990: see, e.g., R. (on the application of Health and Safety Executive) v Wolverhampton City Council [2012] 1 WLR 2264.
Another comparable situation would be where, by virtue of the European Council Directive 85/337/EC, there is an obligation on the part of the local planning authority to prepare an Environmental Impact Assessment ('EIA'). If the JoTS development was proposed anywhere in England or Wales, an EIA would almost certainly be required given that what would be proposed is a "holiday village" where the development exceeds 0.5 hectares (see Town and Country Planning (Environmental Impact Assessment) Regulations 2011, Schedule 2, para 12.) Given that the project would be on the coastline, it is almost certain that the Habitats Directive would also come into play. (In her report, Avvocato Oliver said she assumed that the planning permissions had been applied for before the purchase of the land by the developer and "would have involved a very elaborate technical project being drawn up with specifications that were in line with all building regulations and planning laws, including the "piano regolatore" ie the General Regulatory Plan for the local area, in respect of local laws in relation to, for example, prohibited building, protection on landscape, use of coastal areas." This tends to confirm that the kind of considerations to which I have referred would be relevant in Italy, as indeed one would expect.)
The examples I have given are simply examples. There may be others. It seems to me clear that a solicitor within the domestic jurisdiction who is acting on behalf of potential purchasers of off-plan properties within any area, but particularly one which was being built in a sensitive area from a planning perspective such as a coastline, would need, at the very least, to request written confirmation from the local planning authority that all appropriate consultations had been carried out and that no grounds for a potential revocation of the permission could be foreseen. This, as it seems to me, would be the bare minimum, particularly if the period within which an application for permission to apply for judicial review of the local planning authority's decision had not expired. For my part, I would have considered that to be a minimum requirement in such a situation where a solicitor was simply undertaking what might be termed ordinary due diligence. If the view of the experts in Italian practice is that no such inquiry needed to be made under the ordinary due diligence requirement in Italy, I would say that the position is different under English law and that an English solicitor would be obliged to make (or cause to be made) inquiries in Italy to the effect I have suggested. As I have said, for my part, I would see those steps as being necessary within the ordinary standard of exercising reasonable skill and care in relation to an off-plan purchase within the domestic jurisdiction with its consequent impact upon a solicitor's duty when acting on an off-plan purchase outside the UK. However, if I was wrong about that, the steps I have indicated would, in my judgment, certainly be required where some enhanced due diligence was promised by the solicitor.
If the response of the local planning authority to the request for written confirmation that all appropriate consultations had been carried out was largely positive, but not entirely unequivocal, the solicitor could go on to invite the provision of evidence that the relevant consultations had been carried out. If the response was that the solicitor's clients must rely upon their own inquiries, (a) I would expect the solicitor to indicate to his clients that the position adopted by the local planning authority was not satisfactory, but (b) if requested to go further by the clients would involve considering:
(i) the planning application itself;
(ii) the report of the officers to the planning committee;
(iii) such record as existed of the planning committee meeting at which the approval was given.
I would also expect the solicitor to advise the client to wait at least until the period for a judicial review challenge can be undertaken had expired before entering into any binding commitment to purchase and/or only to enter into a contract conditional upon no successful challenge to the planning permission taking place.
I would add that if the solicitor engaged was not sufficiently well-versed in planning matters to make inquiries such as these, then it would be incumbent on the solicitor to seek specialist assistance in order to be able to fulfil the obligation undertaken. This seems to me to be obvious common sense, but nonetheless is confirmed by the thrust of what Avvocato Oliver said to Mr Flenley when he cross-examined her as follows:
Q. So a lawyer instructed to act on a property purchase without some special requirement to look into the validity of planning permission, in your view, does not have to be a specialist in public administrative law?
A. No.
Q. If the lawyer were told, "By the way, please make absolutely certain that this planning permission has been validly issued", it would be different?
A. In that case I would need an expert.
The context for the questioning was what Notary Valente had said in what appears in the response below to the following question:
"Please summarise any planning and/or building permission problems with JOTS, both the main development and, if any, the Beachfront. Please briefly explain how and why any such problems arose, with reference if relevant to any recent developments and/or arrests."
Response
"… On the other hand, in the case of a professional appointment of a lawyer to check the correctness of the planning permissions, then it is assumed that the lawyer must know the correct administrative procedure that leads to the issue of the measure, that is he should be a specialist in public administrative law, and as such the diligence of a prudent man is not required of the lawyer but rather the professional diligence necessary for the correct carrying out of the professional Mandate received."
Avvocato Oliver had said this in her report:
"… I do not agree with Notary Valente where he states … that a lawyer should be a specialist in public administrative law, but I do agree that it would be expected for the carrying out of the professional Mandate that the lawyer appointed to represent the Buyer should be adequately informed and make at least a basic analysis of the paperwork and if areas of concern such as that above come to light, further investigation by an independent surveyor or Architect would be prudent."
In other words, if some duty is undertaken to check the validity of a planning permission and what might be termed "in house" expertise is not available, it would be necessary to engage that expertise from elsewhere. I am not really sure that Avvocato Oliver and Notary Valente do disagree in substance on this issue: the expertise would have to be found somewhere. However, be that as it may, what is plain in this case is that no checks additional to looking at the face of the planning permission were undertaken. As I have indicated, what remains uncertain on the evidence is how a more detailed inquiry could be carried out in Italy and what, if carried out at the relevant time, it would probably have revealed in relation to the JoTS development.
I must move on to deal with Mr Flenley's SAAMCO argument, but before doing so I will simply highlight a passage in a Status Report prepared by Avvocato Giambrone in December 2010. It obviously post-dates most of the material events for present purposes in this case, but it demonstrates his awareness of the risks of buying off-plan and the continued position he adopted of a positive approach to the JoTS development despite the delays.
Status Report X
In Status Report X (December 2010), the following answer was given in response to what was said to be a Frequently Asked Question, namely, "Although we are concerned about the latest developments in respect of the planning permission, do you advise me to keep my property if its value will increase in future and considering the ?3,600 per year penalty payment?" -
"This is one of the most common questions that we have received from a significant number of our clients.
From a strictly legal point of view, we should simply respond that it is not within the remit of lawyers to advise in respect of the value of an investment. However, we understand that our clients are concerned in the current climate that they do not wish to continue to invest in a project that is has (sic) been beset with problems but, since the outset, Giambrone Law has been consistently advising our clients that we genuinely believe that this is a good investment, although it should be noted that in our opinion all off-plan investments are, by their nature, risky.
Due to our extensive knowledge of the Calabrian market … it appears entirely plausible that the value of each property will increase at the end of the economic recession provided that JOTS will be completed to the same high standards and with the same facilities that it was promised for sale in 2007.
With caution, we share the above view and we are highly optimistic about a successful outcome of the project, albeit delayed, which will give much needed investment and development to the entire area.
Buying off-plan is notoriously a risky investment in view of the fact that the buyers need to rely on the ability and technical skills of the developer in order to obtain the same property/facilities/amenities that are usually included in the glossy brochures at the outset.
…."
The question (said to be asked frequently) is expressed in somewhat leading terms – "… do you advise me to keep my property if its value will increase in future and considering the ?3,600 per year penalty payment?" The response, which says that from a "strictly legal point of view" no such advice can be given, is thereafter expressed in very positive terms.
I will now turn to the SAAMCO issue.
The SAAMCO issue
Mr Flenley has placed much reliance on what, for shorthand purposes, has been called "the SAAMCO issue". It can be termed a causation issue (or a scope of duty issue) based on what he contends is the effect in this case of the principle established in South Australia Asset Management Corp v York Montague [1997] AC 191. He argues that it meets any case as to breach of duty that the claimants might establish in contract and negligence (unless it relates to the validity of the 2007 planning permission for the Main Development) because the claimants cannot demonstrate loss if the principle is applied. In other words, if breaches of duty are established arising from the allegedly defective bank loan guarantees, the required financial due diligence said to have been necessary, any failure to warn of the influence of the mafia or of organised crime, the failure to disclose the level of commission and/or level of deposit, the inadequacy of the terms of the preliminary contract and the failure to advise the claimants concerning the "Turistico Residenziale" planning designation, it is suggested that no loss can be established.
Thus expressed, the argument is unattractive and, as Mr Duddridge rightly observed, counter-intuitive. However, if the principle applies to the circumstances of this case then plainly it must be observed.
How is the argument constructed? In SAAMCO valuers were instructed by lending institutions to value properties on the security of which they were considering advancing money on mortgage. In each case, the properties were considerably overvalued. As a result loans were made which would not have been made if the true values of the properties had been known. The borrowers subsequently defaulted and in the meantime the property market had fallen substantially, greatly increasing the losses eventually suffered by the lending institutions. The issue was the measure of the loss recoverable by those institutions from the valuers. Lord Hoffmann set out the framework for the debate in this way (at p. 210):
"The Court of Appeal … decided that in a case in which the lender would not otherwise have lent (which they called a "no-transaction" case), he is entitled to recover the difference between the sum which he lent, together with a reasonable rate of interest, and the net sum which he actually got back. The valuer bears the whole risk of a transaction which, but for his negligence, would not have happened. He is therefore liable for all the loss attributable to a fall in the market. They distinguished what they called a "successful transaction" case, in which the evidence shows that if the lender had been correctly advised, he would still have lent a lesser sum on the same security. In such a case, the lender can recover only the difference between what he has actually lost and what he would have lost if he had lent the lesser amount. Since the fall in the property market is a common element in both the actual and the hypothetical calculations, it does not increase the valuer's liability.
The valuers appeal. They say that a valuer provides an estimate of the value of the property at the date of the valuation. He does not undertake the role of a prophet. It is unfair that merely because for one reason or other the lender would not otherwise have lent, the valuer should be saddled with the whole risk of the transaction, including a subsequent fall in the value of the property."
Lord Hoffmann (with whom all their Lordships agreed) said that the duty of care on the valuers was to exercise reasonable care and skill in the valuations, but the lending institutions had, in addition to showing a breach of that duty, to demonstrate that the duty was owed "in respect of the kind of loss which he has suffered" (page 211). He added this subsequently: "The real question in this case is the kind of loss in respect of which the duty was owed." (page 212).
When formulating the applicable principle, Lord Hoffmann said this at page 213:
"Rules which make the wrongdoer liable for all the consequences of his wrongful conduct are exceptional and need to be justified by some special policy. Normally the law limits liability to those consequences which are attributable to that which made the act wrongful. In the case of liability in negligence for providing inaccurate information, this would mean liability for the consequences of the information being inaccurate.
I can illustrate the difference between the ordinary principle and that adopted by the Court of Appeal by an example. A mountaineer about to undertake a difficult climb is concerned about the fitness of his knee. He goes to a doctor who negligently makes a superficial examination and pronounces the knee fit. The climber goes on the expedition, which he would not have undertaken if the doctor had told him the true state of his knee. He suffers an injury which is an entirely foreseeable consequence of mountaineering but has nothing to do with his knee.
On the Court of Appeal's principle, the doctor is responsible for the injury suffered by the mountaineer because it is damage which would not have occurred if he had been given correct information about his knee. He would not have gone on the expedition and would have suffered no injury. On what I have suggested is the more usual principle, the doctor is not liable. The injury has not been caused by the doctor's bad advice because it would have occurred even if the advice had been correct."
The principle can be deduced from the following paragraphs at page 214:
"I think that one can to some extent generalise the principle upon which this response depends. It is that a person under a duty to take reasonable care to provide information on which someone else will decide upon a course of action is, if negligent, not generally regarded as responsible for all the consequences of that course of action. He is responsible only for the consequences of the information being wrong. A duty of care which imposes upon the informant responsibility for losses which would have occurred even if the information which he gave had been correct is not in my view fair and reasonable as between the parties. It is therefore inappropriate either as an implied term of a contract or as a tortious duty arising from the relationship between them.
The principle thus stated distinguishes between a duty to provide information for the purpose of enabling someone else to decide upon a course of action and a duty to advise someone as to what course of action he should take. If the duty is to advise whether or not a course of action should be taken, the adviser must take reasonable care to consider all the potential consequences of that course of action. If he is negligent, he will therefore be responsible for all the foreseeable loss which is a consequence of that course of action having been taken. If his duty is only to supply information, he must take reasonable care to ensure that the information is correct and, if he is negligent, will be responsible for all the foreseeable consequences of the information being wrong." (Emphasis as in original.)
The net result of the case was that the damages available to the lending institutions were limited to the difference between the negligent valuation and the true value of the property concerned at the date of valuation.
As will become apparent (see paragraph 344 below), the distinction between a duty to provide information for the purpose of enabling someone else to decide upon a course of action, on the one hand, and a duty to give advice on a course of action, on the other, was subsequently characterised as either being a "category 1 case" or a "category 2 case".
Mr Flenley says that the circumstances of the present case are such that what the defendants were retained to do was to provide information to the claimants (and thus category 1) and not to give advice. On that basis the SAAMCO principle would result, he submits, in liability only for "the consequences of the information being wrong". He says that if breach of duty is found at common law, then the court will have to compare (i) the position which the claimants are, or were when they rescinded the preliminary contracts, in fact in, and (ii) the position which they would have been in if the information which the defendants provided had been correct.
He suggests that the claimants' case has been characterised on the basis that the defendants should have advised the claimants not to proceed (which, he submits, is wrong) because it would only be in that situation that damages of the nature sought to be claimed in this case could be obtained.
Mr Duddridge and Mr Majumdar reject the submission that the SAAMCO principle applies to the circumstances of this case either at all or to its full extent. In the first place, they contend that the rigid demarcation between the giving of information and the giving of advice does not necessarily apply in this case. As a broad proposition they contend that the distinction is easy to apply to cases involving valuation advice given to lenders because typically the valuation is only one of a number of pieces of information relied on by the lender in deciding how much to lend and it is, they suggest, usually tolerably straightforward to decide which losses are or are not attributable to the negligent valuation by working out the extent to which the lender obtained a less valuable security than it believed it was obtaining. Support for their argument against too rigid a demarcation comes, they contend, from Haugesund Kommune and another v Depfa ACS Bank (No 2) [2011] 3 All ER 655.
This was a case in which a bank entered into a number of interest rate swap agreements with certain Norwegian municipalities (known as 'Kommunes'). The capacity of the Kommunes to raise loans was limited by certain Norwegian legislation. The bank had been advised by Norwegian lawyers that the swap transactions were not loans for the purposes of the legislation and that the Kommunes had capacity to enter into them. This advice was incorrect and negligent and the bank would not have advanced the monies had it been advised correctly. However, the lawyers correctly advised the bank that a claim against a Norwegian municipality could not be enforced, that no distress or seizure could be obtained of any of its assets and no bankruptcy or debt settlement proceedings could be initiated against it. It was common ground that the bank knew, and was willing to take the risk, that it was not possible to obtain execution against the Kommunes should there be any need to do so. The monies advanced were invested disastrously by the Kommunes and, whilst some sums were repaid to the bank, the liability to repay was held to be to the extent merely of the amount left over from the unsuccessful investments. In proceedings against the lawyers the bank sought to recover the whole amount of the advances made as losses caused by the lawyers' negligence subject only to the deduction of such sums, if any, as might be actually recouped from the Kommunes. The lawyers, relying upon SAAMCO, argued that it was not responsible for any loss which, on the facts, arose from the risk taken by the bank of the creditworthiness of the Kommunes.
Rix LJ identified the issue in the case as follows:
"A solicitor wrongly and negligently advises a bank that its prospective counterparty to a banking transaction has capacity to enter into the proposed transaction, which is in fact ultra vires and void. The counterparty is nevertheless liable to repay the bank in restitution. Is the solicitor liable to the bank for the whole of the sum transferred to the counterparty irrespective of every other consideration, save only to the extent that the bank succeeds in making an actual recovery from its counterparty? That is the essential question asked on this appeal."
However, the broader comments in the Haugesund Kommune case are relied upon by Mr Duddridge and Mr Majumdar. In that case the demarcation between the two types of case referred to by Lord Hoffmann in SAAMCO was reflected in the labels "category 1" and "category 2" cases. Rix LJ referred to Nykredit Mortgage Bank Plc v Edward Erdman Group Ltd (Interest on Damages) [1998] 1 All ER 305 which revisited SAAMCO and to Aneco Reinsurance Underwriting Ltd v Johnson & Higgs Ltd [2001] UKHL 51. In relation to the latter case he said that whether it was a "category 1" case or a "category 2" case "was not an easy characterisation about which to come to a conclusion."
In relation to the debate in the Haugesund Kommune case Rix LJ said this:
"I therefore do not consider [the solicitors'] retainer to have been of a general kind. It was not like the examples of general retainers which have been considered in the authorities discussed above. [The solicitors] had no general responsibility to advise [the bank] on whether to proceed with the transactions or not. It did not share the same markets, in the way that insurers and insurance brokers do. It was not acting as lawyers sometimes do, as hommes des affaires. It was giving a specific piece of legal advice. The judge, citing Bristol and West Building Society v Fancy & Jackson …, Portman Building Society v Bevan Ashford …, and the Aneco reinsurance Underwriting case, appears to have considered otherwise … but essentially on the ground that the principle in [SAAMCO] applies only to cases where a transaction (albeit on different terms) would still have occurred if the claimant had known of the true position, and does not apply where, but for the negligence, no transaction would have occurred at all. In my judgment, however, that involves a misreading of the principle, which takes as its starting-point that, but for the negligence, the transaction would not have occurred, and then asks whether, even so, all the loss caused by entering into the transaction is within the scope of the defendant's duty."
Rix LJ repeated that the lawyers' retainer was not a "general retainer to report or notify problems about the proposed transactions" [74] and concluded that the lawyers were "not responsible for any loss with respect to its advances which [the bank] may ultimately suffer by reason of the Kommunes' impecuniosity" [94] and emphasised, inter alia, that "because [the lawyers] never took responsibility for the Kommunes' creditworthiness, freedom from execution, or good faith" it would be "unfair to leave [the lawyers] with the consequences of this situation".
Mr Duddridge and Mr Majumdar submit that the task undertaken by the firm in the instant case is much closer to that kind of general retainer. They also suggest that the rigid demarcation of a case as being either within category 1 or category 2 is not always helpful and that the focus should be less on the demarcation and more on the nature of the information/advice negligently tendered and the nature of the loss said to have flowed from it. They draw attention to what Gross LJ said in the Haugesund Kommune case:
"For my part, I am unable to accept that [the lawyers] could be liable for loss relating to enforcement and credit risks, which, as already emphasised, were never assumed by [them] …. I do not think it can be right - without more – to suppose that the loss suffered by [the bank] was within the scope of [the lawyers'] duty. Even if the contract was valid, [the bank] had been advised that it could not enforce a claim against the Kommunes. So far as concerns the credit risk, that was for the bank … not its legal advisers. Further, merely because in one sense it can be said that the transaction would not have taken place but for [the lawyers'] negligence (i.e., so that this was a "no transaction" case), it does not follow that [they are] liable for the whole of [the bank's] loss. For these purposes, I do not think that it matters whether this is a "category 1" or "category 2" case, in terms of the distinction canvassed by Lord Hoffmann in [SAAMCO] – a distinction which, with respect, may perhaps be easier to state than to apply in practice. (Cf., Aneco….) In short, whether this was a "category 1" case or a "category 2" case, losses attributable to enforcement and credit risks were outside the scope of [the lawyers'] duty."
The submission they make is that the application of the SAAMCO principle must necessarily be fact-specific and that is not enough simply to ask whether what was imposed was an information duty or an advice duty. It is necessary, it is argued, to look very carefully at what duties are in fact assumed in any situation and to ask what the purpose of the advice or information was in any particular case. To the extent that specific authority is necessary to sustain that proposition, they draw attention to Portman Building Society v Bevan Ashford [2000] PNLR 344. I need not recite the circumstances in detail, but it was treated as an "information case" where the information led the lender to believe that there was no second charge on the relevant property and that the purchasers were providing the balance of the purchase price from their own resources. Otton LJ (with whom Dame Elizabeth Butler-Sloss P and Schiemann LJ agreed) said this:
"Where a negligent solicitor fails to provide information which shows that the transaction is not viable or which tends to reveal an actual or potential fraud on the part of the borrowers, the lender is entitled to recover the whole of its loss."
Mr Duddridge and Mr Majumdar focus on the word "or" to demonstrate that, contrary to Mr Flenley's submission, an exception to the Saamco principle is not restricted by Portman to a situation where the breach of duty involved a failure to report to the client that the whole transaction about to be entered into was fraudulent. Mr Flenley had relied upon the way in which Portman is "principally discussed" in Jackson & Powell at paragraph 11-317 which is headed "An exception: dishonest borrowers" and upon the basis upon which Portman is referred to by Rix LJ in the Haugesund Kommune case at [61] (as accepted by Mr Anthony Elleray QC sitting as a Deputy High Court Judge in Credit & Mercantile v Nabarro [2014] EWHC 2819 (Ch)).
I have not, with respect, found these particular submissions on either side very illuminating. Every statement in every case depends upon its context. In the first place, it should not be overlooked that, despite the demarcation made in Saamco between the provision of information, on the one hand, and the tendering of advice, on the other, Lord Hoffman made it clear that in "information cases" the negligent provider of the information will "not generally be regarded as responsible for all the consequences of that course of action" (my emphasis). That there may be exceptions to the general position is thus recognised and it was not limited in that case to cases of fraud. Second, the purpose of the principle, as Mr Duddridge correctly submits, is to operate as a means by which the natural consequences of the "but for" principle of causation are modified to accord with the justice of the situation. In Saamco the decision was designed to confine the liability of the negligent valuer to the direct losses consequent upon the over-valuation and not to the losses attributable to a fall in the market value of the property. It is possible to see, when the case is analysed fully, how this same approach was made to apply in the Hausgesund Kommune case.
Whilst the principle is established and must be applied where appropriate, I agree with the thrust of the submissions that Mr Duddridge and Mr Majumdar make that the first port of call in any analysis must be the nature of the information/advice tendered by the solicitor to the client in the context in which it is tendered. When that has been identified the next step is to examine the extent to which the losses associated with entering into a transaction that otherwise would not have been entered into are fairly attributable to the negligently proffered advice/information. Thus expressed, the question is divided into two parts, but the reality is that it is one overall issue – what responsibility is being undertaken by the solicitor? Is it responsibility for the loss alleged?
The distinction between simply giving information and the giving of advice is not one that is easy to apply in this case, certainly against the background of what the firm said it would do. In most cases (of which Cottingham v Attey Bower and Jones (a firm) (2000) PNLR 557 is an example – see paragraphs 47 – 48), a solicitor would not advise a client specifically on the wisdom or otherwise of a proposed purchase. I say "specifically" because, in most cases where any kind of risk may be involved arising from some legal factor, it would be for the client to assess and evaluate the extent of the risk and his or her response to it. What the client will want will be accurate and reliable information or advice upon which any such risk can be evaluated. If the client asked the solicitor "Well, what would you do?", the solicitor would, of course, be obliged to answer even if it was to the effect that he really could not say. Most solicitors in that situation, however, would be likely to advise caution if there was a risk of substantial money being lost. In my view, all reasonably competent solicitors would do so.
The whole of the SAAMCO argument on behalf of the defendants is predicated on the basis that in respect of the heads of loss to which it is said to apply (see paragraph 331 above) no purchaser is worse off because of any inadequacies in the advice and/or information given to them by the firm. For my part, this seems to miss the point.
Plainly, everything that went wrong with the development cannot be blamed on the firm: there were undoubtedly factors well outside its control that affected the process of the development, the planning dimension doubtless being one such factor. However, it is equally plain that buying off-plan has its inherent risks (as Avvocato Giambrone has expressly acknowledged: see paragraph 328) and apparently Italy had seen plenty of evidence of that such that Decree 122 of 2005 was promulgated. The essential nature of the claimants' case is that because of the terms of the preliminary contract (or at least on the basis of the terms as explained to them by the firm), all the purchasers were (or believed that they were) locked into proceeding to completion of the contract, no matter when the properties were completed, otherwise they would lose their deposits. What I apprehend is being said on their behalf is that they should never have been put in that position and that either the preliminary contract should have been drafted in a way that gave them the opportunity to withdraw (and recover their deposits) if there was delay in implementation or they should have been advised fully of all the aspects of the preliminary contract that gave rise to risks so that each individual could decide, on a properly informed basis, whether or not to proceed.
Mr Duddridge put the matter accurately, in my judgment, when he said in his written closing submissions that a "duty to identify relevant information and advice cannot properly be characterised as a collection of multiple duties to provide specific information". In this case the firm "had a single, holistic duty to take reasonable care to provide appropriate advice and information about the transactions." In his oral submissions, comparing the circumstances with the kind of case to which the SAAMCO principle applies, he contended that this is not a case where the firm was retained to give one discrete piece of information or one discrete piece of advice. It assumed an extensive duty to identify what steps should be taken to protect the claimants, what advice and information the claimants needed and to ensure that they gave that advice correctly. If it failed to do this, it was assuming the responsibility for the consequences. I agree with that analysis and would add that the emphasis laid in its approach to all the claimants upon the insurance cover that the firm had (see paragraphs 72, 152 and 154) was itself indicative that it saw itself as responsible for the consequences if it fell short in the discharge of the duties it undertook.
In my judgment, the SAAMCO cap, as it has been called in this case, does not apply to the circumstances of this case.
The Mandates, the commission, conflict of interest and what the claimants were entitled to know
I have given this section of the judgment the heading I have because the various issues raised are inter-related.
The question is the extent, if any, to which the firm ought to have alerted the claimants to the level of commission being paid to VFI and whether, by not doing so, they were acting in accordance with the Mandates which gave rise to a conflict of interest because of some obligation of confidentiality. Leaving aside the issue of conflict of interest, the question of whether the firm ought to have given the claimants information and guidance about the implications of the level of commission also arises.
I will deal with the latter issue first because if there was no reasonable basis upon which the firm was obliged to tell the Claimants about the level of commission and the implications for the development, the issue of conflict of interest would be somewhat academic.
I need not repeat what I have concluded previously. The short question is whether, on an objective analysis, the level of commission and its implications for the funding of the development was of sufficient significance, all other things being equal, for it to be revealed to the purchasers given that the firm knew about it from the outset.
There have been discussions amongst the experts about this and I will refer to the views expressed shortly. However, I have already alluded (at paragraph 257) (a) to my conclusion that the firm pretended in April 2009 only just to have learned of the level of the commission (b) to the view of Avvocato Virga (which I take to represent the view of the firm at the time he expressed it) that the split between VFI and RDV "was wrong". Putting those two matters together, it is but a small step to conclude that the level of commission and its implications were matters to which the purchasers should have been alerted before they committed themselves to a non-returnable deposit of 50% of the price of their property. However, before finally deciding whether to reach a conclusion to that effect based upon those items of evidence, I need to look at what the experts say to see if the conclusion is reinforced or undermined.
The starting point is whether the overall deposit of 50% is of itself sufficiently high to merit comment. Mr Flenley concedes on the evidence that a deposit of 50% is generally considered unusual in this type of transaction and that the defendants should have told the claimants that this was so. He suggests a possible modification to that to which I will refer below (see paragraphs 369 - 373).
He says that the evidence supports the proposition that normally there is a deposit of 15 – 20% followed by staged payments up to a total of 85 – 90% before completion. In fact what he put to Notary Valente, which Notary Valente accepted, was that where a purchaser offers a small initial payment followed by further payments, the first payment is usually 10% or 20% and the further payments "can often reach 85% before completion." Notary Valente did thereafter say that it is possible to get to 80% or 90% "right at the end".
Against the background of what would be the usual payment structure for purchasing a property off-plan, with payments being made as the building works progress, it was, I am bound to say, surprising that Notary Cardarelli ventured the view that the arrangement in this case (of a 50% deposit) was more advantageous to the purchaser than the more conventional arrangement. He suggests that the purchaser is "more protected" if the builder encounters a "crisis situation" because the purchaser could "execute the surety and recover the advance payment", but if the builder does not complete the building even if he has the resources to do so, then the purchaser having paid the higher deposit would be entitled to twice the amount of the advance payment as compensation (see paragraph 166 above). For my part, I cannot see how the purchaser is "more protected" in a "crisis situation" (see paragraph 132 above): the protection is the same whatever the initial deposit may be. Furthermore, I cannot see what advantage there is to be derived from the potentially higher compensation. Purchasers are looking to the completion of their purchase, not some bonus derived from a failure on the part of the builder to complete. Mr Duddridge put the matter more elegantly when he said that "stage payments mitigate against … the loss of money with nothing to show for it." If the pace of the building work more or less matches the stage payments before the builder stops work, the purchaser will have something to show for it and a greater financial ability to employ someone else to finish off the work than might otherwise be the case if a high initial deposit was paid.
Avvocato Oliver, when pressed with Notary Cardarelli's argument in cross-examination was unable to see the logic of it. I share that position. She also said that she saw no evidence that the large deposit (with the lack of staged payments) was negotiated specifically to protect the buyers, but was required by the builders because they needed the funds to distribute between themselves and the promoters. It was not put in place for the protection of the buyers. There was, she added, an absence of any plan or timings or dates by which certain aspects of the development were going to be completed which she regarded as a significant omission in this transaction. I agree.
I mention all this primarily because it emphasises that the more usual approach of a smaller initial deposit followed by stage payments is unarguably, in my view, better from the purchaser's point of view and also gives the developer an incentive to complete the project in order to make the anticipated profit from the venture. On the basis that a significant proportion of the money paid goes to the developer/builder, that incentive exists. I mention it also because, when it comes to appraising the value of an expert opinion, a court needs to see that the opinion withstands logical scrutiny and analysis. I do not consider that, in this respect, Notary Cardarelli's position does withstand such scrutiny.
As I have indicated, Mr Flenley concedes that the claimants should have been told that the 50% deposit was unusual. It had been in issue prior to the trial and I quote Mr Flenley's opening skeleton argument where he was referring to Notary Cardarelli's position at that time:
"He does not accept that the level of deposit should have been reported to the buyers as being unusually high. In those circumstances, unless it is decided that Avv Cardarelli is dishonest, it is hard to see how the Court may conclude that any reasonably competent Italian conveyancer would have concluded that the level of deposit had to be reported to the buyers."
Indeed it was also Avvocato Giambrone's view that it was not necessary to tell the claimants that a 50% deposit was unusual because he did not regard it as unusual (see paragraph 370 below). At all events, in my view, Mr Flenley's acceptance of the position was correctly made. However, for my part, I would not regard simply saying that a 50% deposit was "unusual" would be a sufficient discharge of the duty of care. There would need to be some explanation of why it was unusual, what the "usual" arrangement would be and some appraisal given of the advantages/disadvantages of each. Whilst it might be said that the advantages/disadvantages of a 50% deposit are obvious, that would not preclude the need for a reasonably competent and conscientious lawyer to spell them out to the client.
Mr Flenley contends that, whilst it was necessary to tell the claimants that a 50% deposit was unusual, it would also have been reasonable to tell them that a 50% deposit was common in Calabria. He suggests that this is how the case was put to Avvocato Giambrone. The argument is constructed by reference to a number of propositions. First, he says that Notary Cardarelli's unchallenged evidence is that, when there are no staged payments, a deposit within the range of 40 – 50% was usual. Notary Cardarelli speaks with experience of many transactions and I have no reason to doubt that aspect of his evidence. It was not, of course, confined solely to Calabria. Secondly, Mr Flenley says that Avvocato Giambrone gave unchallenged evidence that "the vast majority of Calabrian off-plan developments were structured with a 50% deposit on exchange of contract and the balance on completion." He repeated that when giving his evidence. I have already mentioned the difficulty of assessing this kind of evidence (see paragraph 17) and because of my reservations about the reliability of a fair amount of what Avvocato Giambrone says I approach it with considerable caution. Nonetheless, even assuming it is correct, it does not seem to me to be something that should have been put forward in a way that neutralised the caution that should have been advised concerning the risks to the purchaser of a 50% deposit with no stage payments.
The final suggestion that this is the way the matter was put on behalf of the claimants is, with respect, pushing the boundaries of the way in which Mr Majumdar's cross-examination of Avvocato Giambrone can be interpreted. I do not propose to extend this already very lengthy judgment by referring to the full context, but I will refer to one passage in a much larger passage on this overall issue. Mr Majumdar was asking Avvocato Giambrone whether he agreed with the experts that a 50% deposit was unusual. The answer and questioning continued as follows:
A. No, I do not. I say in my statement actually the opposite - in Calabria 50% was the norm.
Q. Fine. So are you disagreeing with the general proposition that off-plan purchases usually involve a lower initial deposit and stage payments?
A. I believe that the experts may be referring to the situation where Italians buy off plan in Italy. Obviously, we already understand the scenario here is different. We have foreign buyers in Italy. So I am not sure if the experts specifically addressed the issue of non-Italians buying off plan in Italy.
Q. Why would that make a difference?
A. Because there is a number of -- I already said to you at the beginning that Italians do not use lawyers, for a start, so the whole purchase is different. Italians do not use Report on Titles, Italians do not use letter of care and Italians would not even raise half the allegations in these proceedings. It is totally different the way Italians do things.
Q. Yes, but in terms of the amount of the deposit and the presence or absence of stage payments is about the mechanism, the funding of the development. So why would that be different? Suppose, for example, that an Italian was buying a property at Jewel of the Sea -- maybe there were some examples of that -- why would that buyer expect to pay a smaller deposit at the outset?
A. No, I did not say that. I said that in an Italian context it would be different. If an Italian was to buy in Jewel of the Sea, he would have been asked to pay 50% deposit like everybody else. I never suggested to say that foreign buyers were discriminated or anything. I am just saying the way that Jewel of the Sea was structured like every other development in Calabria -- or sorry like the majority because there were exceptions -- the majority of off-plan developments in Calabria was in such a way that a 50% deposit was requested on exchange of Preliminary Contract.
Q. I put to it you that it was unusual and buyers should have been advised of that even if you explained it as being common in Calabria.
A. Well there are two answers to this. First of all that the clients had agreed the purchase structure before coming to us. They had already committed to 50% deposit when they signed the reservation form. So they would have had already in mind what they had to pay, and they would have accepted willingly to commit 50% of the purchase price towards the purchase but ----
Q. Just pausing there. Sorry, I am not going to stop you giving the rest of that answer, but I think it might be helpful ….
There were further questions and answers about the stage at which the claimants were committed to the purchase and the relevance of the ?3000 acconto. I intervened in the following manner:
MR. JUSTICE FOSKETT: What is being suggested to you, I think, is that all right they put their €3,000 down, but if your firm had given advice that 50% deposit was unusual, that might have dissuaded some people from going to the next stage and committing themselves finally to paying 50% of 100,000, 120,000, 150,000. That is the point that is being put to you.
A. And in response to this my response would be that because we do not accept that the 50% was unusual ----
Q. You are saying that you had no obligation to advise them.
The foundation for the suggestion that it was "the claimants' case" that the claimants could have been told that 50% was common in Calabria is the penultimate intervention of Mr Majumdar in the quotation from the transcript set out in paragraph 370 above where he used the words "even if you explained it as being common in Calabria". It is impossible to say that that was "the claimants' case" simply because of the use of that expression.
At all events, this seems to me to be a side issue. As I have said, if there was any justification for referring to the fact that a 50% deposit was not unusual in Calabria (and this all depends on whether what Avvocato Giambrone says is correct about which there is no independent confirmation and no documentation to support it), it should have been said in a way that did not water down the impact of explaining to the clients the concerns that arise from such a situation compared with the small initial deposit/staged payments structure which was the usual position in Italy.
However, arguably, the more important issue is whether, given the accepted unusual nature of a 50% deposit in such a situation, the actual breakdown of the way the deposit was to be utilised should also have been spelled out to the claimants. The consequences of the division have been dealt with previously (see paragraphs 257 - 264). As it seems to me, the issue here is not that some commission might have come from the deposit, but the fact that nearly two-thirds (62%) of the amount paid over went to the promoter and only a little over one-third (38%) went to the builder.
As has already been indicated (see paragraphs 257 - 263), I am satisfied that the firm realised by no later than April 2009 (if, which I doubt, it had not realised before) that it should have told the claimants at the outset about this division. This could be the only explanation for the pretence maintained in about April/May 2009 (because pretence is what it was) that it had only recently discovered that the level of commission received by VFI was as it was then acknowledged to be. Mr Flenley makes the point that some of the exemplar claimants did not seem troubled about the payment of commission to VFI and to the amount. However, it does have to be observed by reference to the transcript that the way they were asked about it did not involve putting to them the situation that 62% of their deposit went as commission to VFI. I do not attach much significance to the answers to which Mr Flenley refers. Most of the exemplar claimants said that they were surprised when they learnt the true position. However, all this is irrelevant to the question of whether the fact of the amount of the commission payable to VFI (a) was potentially relevant information for the claimants to receive and (b) whether the firm was in breach of duty to the claimants in not revealing it.
The starting point, of course, is that the overall level of the deposit from which the commission was to be paid was unusually high on the basis of the expert evidence. Given that the firm was (and individuals within it were) plainly saying in April/May 2009 that the level of commission was too high, it is again somewhat surprising that Notary Cardarelli should take a different view as Mr Flenley submits he did. The evidence on the issue was given in various places, but one passage in the evidence to which Mr Flenley draws attention does not, in my judgement, wholly support the position for which he contends. Mr Majumdar was asking about the 31% that went to VFI. The question was put and the answer was given through an interpreter:
Q. Just returning to … the main point, what I am putting to the notary is this, that 31% commission sounds as though it was unusual even by Italian standards because, as he said, it is not usual to employ a promoter as opposed to an estate agent.
A. It is unusual in the sense that almost never is an agent employed, an agent in the technical sense of the word, not an estate agent. However, an agent acting to promote with a complex entrepreneurial business activity such a development, that they should be granted this level of commission, I do not see as in any way disproportionate. It might perhaps have been in the interests of the buyers to know about it because if you take into account the builder's profit and the agent's commission, the price was certainly higher than if VFI had not been involved.
As I understood Notary Cardarelli's position on confidentiality, it was to the effect that the firm was precluded from conveying information about the level of commission by reason of the commercial obligation of confidentiality. I will return to that (see paragraph 396). However, the above answer seems to acknowledge that it would or might have been in the interests of the purchasers in this case to be told about the level of commission the developers were receiving. It does seem to me that if that is so, it would require very strong grounds for a solicitor subject to the usual obligations placed upon him by English law not to inform his client.
However, Notary Cardarelli gave another answer later, in the context of his view that the firm's responsibility was pursuant to a "contract was a contract for consulting services" such that it was "advising the buyers on the legal aspects of [the] transactions", that "if we are talking only of the level of commission, I personally would not have disclosed it." Mr Flenley submits that a reasonably competent Italian conveyancer could therefore have taken the view that the level of commission need not have been disclosed and that justifies no disclosure in this case.
I do not accept that contention. In the first place, the test has to be what an English solicitor with expertise in Italian off plan transactions would have been obliged to tell his client. Second, Notary Cardarelli's viewpoint is very narrowly confined in the sense that his focus is upon the firm's duty as an adviser on the legal aspects. He plainly does not see the level of commission as a legal aspect of the transaction.
It is to be noted that Avvocato Giambrone expressed the opinion that the level of commission was an irrelevant consideration. That emerges from the following passage in his cross-examination by Mr Duddridge:
A. … the level of commission … was not, in my opinion at the time, something that was material for the client to know, for one simple reason. In a joint venture agreement VFI was bringing the know how. The planning permissions existed for JoTS since 1994, so it is about 13 years prior to the sale of this. There was no way RDV could have sold to an international clientele without the know how of VFI, so VFI was not just paying for flights and for costs. They arranged seminars, exhibitions. They did the drawings, they did the rendering. They valued their know how one third of every sale. How was the buyer's solicitor to question the arrangements in a joint venture agreement what each party values the contribution. Effectively, to put it very simply, the deal was that VFI would assist with finding the buyers, RDV would assist with building the development on the land that it owned and in their agreement, the value of VFI was a third of the total price, the value of RDV was the other 66%.
…
Q. You do not have to ask any questions of VFI or RDV. All you have to do is say to the purchasers, "You should know that before the first load of concrete has been poured on this site, before the first brick has been laid, nearly a third of the purchase price is going to VFI. Are you happy with that?" That is all you have to do and you did not, did you?
A. This is where you are saying with hindsight.
In my judgment, the underlying assumption of the position adopted by Avvocato Giambrone, namely, that it is not for the lawyer to draw attention to the commercial arrangements between the developer and the builder, is not one which the reasonably competent and conscientious solicitor whose duties are governed by English law would adopt. Notary Cardarelli recognises the potential relevance of the information within the Italian system (see paragraph 376 above) and either, in my judgment, is sufficient to fix the firm with an obligation to disclose it.
Avvocato Oliver, who has the benefit of an English and an Italian legal qualification, supported the proposition that the information about the commission should be disclosed. In her initial report she described the commission as "exorbitant" and "even higher than the amount that a normal deposit would be expected to be as a percentage of the purchase price". She was not asked to comment on whether it was necessary for the firm to disclose this to the purchasers. When she was cross-examined by Mr Flenley she said this:
Q. The view of Avv. Cardarelli, as you may have seen, as I understand it, was that there was no obligation on Giambrone & Law to report the level of commission to clients. Do you disagree with that?
A. This is a very unusual situation, an unusual amount of commission, in very unusual circumstances. I think alarm bells should have been ringing much earlier than this. The clients should have been informed about not only this defect, but also other problems that may lead to this investment not being the soundest they could make.
Q. I think your answer then is you do not agree with Avv. Cardarelli. You say that, because of the unusual circumstances of the development and other factors, this is all part of a duty to advise the client that this was not the soundest investment they could make?
A. I would like to be, and I have been all the way through this, very objective. It is difficult to put myself in the situation of a reasonably competent lawyer acting in a transaction such as this for six hundred purchasers. If I was told by the seller that this is the way it had to be and that once I had the clients' money on trust, I had to then siphon off part of it to Northern Ireland to a promoter, it is one of the many things I would have questioned. Even if I did not put it in a Report on Title, I think it would be my duty to alert the client to all aspects of the transaction that they were investing their money in.
It follows that she regarded disclosure as important.
Mr Flenley placed reliance on Avvocato Giambrone's evidence that other international promoters working in Calabria at the time charged between 20 and 30% of the purchase price by way of commission. This evidence, Mr Flenley, asserted, was unchallenged and consistent what was said in the Mail on Sunday article (see paragraph 224 above). He submits that I should conclude on that evidence that 31% commission was not unreasonably high for an international promoter operating in Calabria at the time.
I repeat what I have said on a number of occasions about the weight I can give to the suggestion that Avvocato Giambrone's evidence was "unchallenged". This was another very broad piece of evidence that was entirely self-serving. Without some independent support, preferably reliable documentary support, I would attach little, if any, reliance upon it. With no disrespect to the newspaper and the author of the article, I cannot attach any evidential weight to the assertion to which Mr Flenley refers, the source of the information for which is, in any event, not identified.
Finally, Mr Flenley places reliance on what he suggests was a concession by Notary Valente in cross-examination. In order to put this submission into context, I should refer to what Notary Valente said in his report on this issue. He was asked to confirm the following:
"It may be relevant to know, as a matter of Italian law, whether a competent Italian lawyer acting on a purchase of this nature would/should have explained to the Claimants before
(a) They signed the preliminary contracts or
(b) The Defendants transferred their deposits to VFI and RDV and/or Veco
that it was intended to make a payment of commission to VFI and to explain the size of that commission namely that it amounted to 31% of the total purchase price and some 62% of the deposit and that it had signed an agreement with RDV and VFI which apparently required it to do so."
He expressly confirmed this with the result that he expressed the view that "a competent Italian lawyer acting on a purchase of this nature would/should have explained to the Claimants" that a commission payment of 31% of the total purchase price was to be paid to VFI pursuant to an agreement with RDV.
Mr Flenley invited him to read the above question and his answer and the following interchange occurred:
Q. You have read that?
A. (In English): I read just my answer.
Q. So this question relates to the commission payable by RDV to VFI.
A. Si.
Q. I suggest to you that it was no part of the lawyer's duty acting for the buyer to report to the buyer the level of commission which RDV was paying VFI.
A. Yes, it is not the duty of the solicitor. It is up to the parties.
This seemed at variance with what he had said in the report and it occurred to me that he had not fully understood the question, translated as it was by an interpreter or perhaps the interpreter, whose English was not completely fluent, had not interpreted correctly. As I have observed previously (see paragraph 273), I thought that Notary Valente was generally a very careful and meticulous witness and it seemed surprising to me that he should give this answer. Mr Flenley asked no further questions doubtless having secured an answer that he considered helpful to his case.
At all events, when Notary Valente was re-examined by Mr Majumdar (in non-leading fashion) he reaffirmed his earlier position in this way:
Q. … if an Italian avvocato who is advising a buyer at an off plan development knows that a 50% deposit is payable at the time of the Preliminary Contract and that there are no staged payments after that, and he also knows that 62% of that 50% deposit is going to someone who is not building the development?
…
A. In such a case they should have advised the buyer … that that money would not go and fund the construction, that would have a different destination. So there is the potential risk for the purchaser. So the solicitor needs to warn the buyer.
It seems clear therefore that, whatever may have been meant by his answer to the question posed by Mr Flenley, he supports the need for disclosure of the level of commission in this case.
That, in my judgment, is indeed what was required in this case and it was not sufficient for the firm simply to mention the payment of commission in the Report on Title and await a request from a proposed purchaser for details which Avvocato Giambrone had argued was sufficient.
That attitude of Avvocato Giambrone suggests that had the firm been asked about the level of commission it would have felt itself free to disclose the information. However, the case has been made during these proceedings that the firm was precluded from disclosing the level of commission by reason of obligations of confidentiality.
This issue has been somewhat confused, but in the end the position seems to me to be relatively straightforward. It was the case advanced by both sets of claimants that the firm was bound by virtue of Article IX of the Mandate agreement (paragraph 140 above) not to disclose any of the terms of the Mandate agreement to any other party. Avvocato Scarpa and Notary Valente both took that view. It was admitted in the pleadings on behalf of the defendants that that was so. However, Notary Cardarelli took the view that Article XI (see paragraph 141) was the only article that bound the firm and that it became thereby bound to perform the duties set out in Article V (paragraph 139) and nothing more. His view was that Article IX bound only VFI and RDV (the "Parties" to the Mandate). He did, however, take the view that the firm was bound by reasons of commercial confidentiality not to disclose the terms of the Mandate including, of course, the terms relating to commission.
Notarty Valente accepted, when cross-examined, that Notary Cardarelli's view of the Mandate was correct. Avvocato Scarpa did not accept this and adhered to the view that ArticleIX related to the Mandate agreement as a whole and that the firm was bound by all its provisions.
If I had to resolve this issue, although I understand Avvocato Scarpa's view, I would prefer the view that the firm was not bound by Article IX, its only obligation (pursuant to Article XI) being to comply with Article V. However, all this is, in my view, irrelevant. On the evidence the real reason why the level of the commission was not revealed to the claimants was either because the firm did not consider the issue at all at the outset or it took the view (as articulated by Avvocato Giambrone) that revealing the commission was irrelevant (see paragraph 380 above). For reasons I have already given (paragraphs 377-392), I have no doubt that the level of commission should have been disclosed to the claimants. It does not matter why it was not disclosed: not to have done so represented a breach of duty. Given that conclusion I do not, for my part, see that a finding of conflict of interest is material or adds anything to the picture. If there was a conflict of interest, it probably arose from the general obligation of confidentiality referred to by Notary Cardarelli from which the firm ought to have secured an exemption from VFI once it realised that it owed a duty to disclose the level of the commission to the claimants.
Payment of the deposits by the firm
It is not in issue that the funds supplied by the individual claimants to the firm with which to pay the deposits at the time of the preliminary contracts were held upon trust by the firm. The circumstances in which the monies should have been paid out have been the subject of debate in the case, but essentially it is argued on behalf of the claimants that monies should not have been paid over (a) if there was no guarantee in place at all and/or (b) if the guarantee was defective in the sense that it was issued by an Article 106 institution, not an Article 107 institution (see paragraph 123). The claimants assert that when money was released in such circumstances it constituted a breach of trust.
It will be recalled that the "cover letter of advice" (see paragraphs 155 - 157 above) contained the commitment that the client's funds would be kept in the client account in London until the preliminary contracts had been signed and executed by both parties "and the bank loan guarantees [had] been issued".
The firm also sent out a standard letter to all purchasers from whom the deposit money was sought in the following terms:
"We confirm your instructions to release the exact funds received in our client account to the Vendor upon receipt of their signed copy of the preliminary contract and the issue of a bank loan guarantee in compliance with Italian Decree 122/05."
Mr Flenley acknowledges that it would be a breach of trust to release the money in exchange for no guarantee at all, but submits that it would not be a breach of trust to release money in return for a guarantee which is merely defective in some way and, in particular, it would not be a breach of trust to release it against a guarantee which is enforceable as a guarantee, albeit one not issued by an Article 107 institution. He says that the terms of the trust are not to be deduced from the terms of the standard letter referred to above, but "in some other way" including an assessment of "the client's commercial objective" part of which "was to get a guarantee" – by which I apprehend he means an enforceable guarantee, relying, as I understood the argument, on Target Holdings Ltd v Redferns [1996] 1 AC 421, per Lord Browne-Wilkinson at 436A-C. He also argues that if, notwithstanding the foregoing argument, I should conclude that there was a breach of trust, no loss arose from any such breach if a compliant guarantee was put in place subsequently, again relying on Target Holdings Ltd v Redferns.
So far as the exemplar claimants are concerned, there was a guarantee in place before the monies were paid over in all transactions (other than Marsden/Campbell and Barton/Kavanagh where no guarantee was in place) though the case advanced on their behalves (as it is on behalf of all claimants similarly affected) is that the guarantees were invalid because they did not comply with the Decree and, accordingly, the monies should not have been paid over. In the larger picture of all the claimants it is agreed that there are other transactions where the monies were paid over with no guarantee in place or where there was no signed contract from the vendor (and in some cases where both were absent).
I should say immediately that there is no suggestion that any dishonesty was involved in this, but it is symptomatic of the somewhat disorganised way in which aspects of this whole venture were handled by the firm (in which there was a fairly regular turnover of employees). However, the motivation is irrelevant. If the money should not have been paid, it should not have been paid and, prima facie at any rate, would constitute a breach of trust. The same applies to whether it constitutes a breach of contract or breach of the duty of care (both of which are admitted where a deposit was paid either before the guarantee was issued or the preliminary contract was signed or both).
One of the arguments advanced by the claimants is that the firm was obliged by the terms of the Mandate to pay over the deposit to VFI before the guarantee was in place and, accordingly, its obligations to VFI were inconsistent with their obligations to the purchasers. Article IV of the Mandates (paragraph 146 above) provided that VFI had a right to its commission "only after the written ratification of the preliminary contract by Mr Antonio Cuppari" and Article V (by which the firm was bound) provided that it would release the deposit and the commission due to the VFI "only following a written ratification of the preliminary contract by Mr … Cuppari and the issuing of a regular Invoice from the [VFI] to the [RDV]." There was no reference to the provision of a guarantee in Article V and, accordingly, the firm's obligation to pay VFI was not dependent on the provision of a guarantee. This, it is said, put them in a position of conflict with the "cover letter of advice" and the standard letter referred to above.
If there was compelling evidence that the firm was acting on the basis of the Mandate rather than the terms of the letters (and I do not consider that the "standard letter" can be ignored as Mr Flenley submits it should), then this might be a material consideration (subject to the argument advanced against the suggestion that the Mandate should be read in the way referred to above: see paragraph 405 below). However, in my view, what occurred was much more likely to be the result of sloppy practice than upon a rigid adherence to some perceived contractual obligation. If that view is correct, the meaning and effect of the Mandate is irrelevant even if, on a correct reading, it placed the firm in conflict with its obligations to its clients. I accept that there is evidence that those in the office responsible for this process simply made the relevant payment because VFI asked the firm to do so and that can be said to be consistent with what Article V requires. However, on the evidence I am not satisfied that this procedure was adopted as a direct result of the terms of the Mandate agreement: it was, in effect, the operation of a default position within the office that if VFI asked for payment, it got it.
The argument advanced against the interpretation referred to above emanated from the opinion of Notary Cardarelli. He suggested that these apparently inconsistent obligations could be harmonised if Article V of the Mandate was interpreted in the light of Clause 3.5 of the preliminary contract (see paragraph 181 above) which, according to the text of the Mandate, was attached to the Mandate. Leaving aside the substance of the argument for a moment, as previously indicated (see paragraph 143), on the papers before the court no documents are attached to the Mandate. This prompted the not unreasonable observation by Mr Majumdar that since no copy of the version allegedly attached to the Mandate has been produced, it is impossible to know whether Clause 3.5 was, at that stage, in the same terms as it appears in the papers before the court.
At all events, assuming it to have been in identical terms to the version before the court, there do seem to me to be some formidable objections to the interpretation suggested by Notary Cardarelli. Simply reading the provisions without the benefit of expert assistance suggests, in the first instance, that there is nothing said expressly in the Mandate agreement to the effect that its provisions are subject to the provisions of the attached preliminary contract. Furthermore, as Mr Majumdar observes, they are separate contracts between different parties and it is difficult to see why one should necessarily influence the interpretation of the other. He submits that Article V cannot be read in isolation from Article IV since it defines when commission is due to VFI, namely, after ratification of the preliminary contract by Mr Cuppari. It follows that in both Articles IV and V VFI is said to be due its commission without any condition that a guarantee has been provided. Clause 3.5 of the preliminary contract does not define when commission is due. Mr Duddridge puts it in much the same way, namely, that Article V of the Mandate is an instruction from VFI to the firm to release VFI's commission. Clause 3.5 of the preliminary contract is an instruction from the purchaser to the firm to release the deposit to RDV (after having retained costs and fees due to VFI). They are, he submits, different instructions given by different parties and concerned with different subject matter. As he put it, one does not shed interpretive light on the other.
As I have said, these arguments seem to me to be compelling. I am not satisfied that any provision of the Italian Civil Code demands a different conclusion.
This conclusion means that I must return to Mr Flenley's argument that it was not a breach of trust to release money in return for a defective guarantee particularly one which is enforceable as a guarantee, albeit one not issued by an Article 107 institution (see paragraph 400 above).
Before turning directly to it, I should mention one dimension additional to the fact that each guarantee was issued by an Article 106 institution. It is the claimants' case that the guarantees were also defective because their validity expired before the completion date. It is clear on the face of each guarantee that a period of validity was specified and, as a matter of fact, all the initial guarantees certainly "expired" for this reason before the relevant contracts had been completed. (As previously indicated, the schedule in Appendix 2 to this judgment contains a summary of the various guarantees supplied in the exemplar cases and the dates of expiry of each.)
Notary Carderelli, who considers that the duration of the guarantee (the "durata" in Italian) should not have been on the face of the guarantee and was unlawful, has suggested that all the guarantees did meet the legal requirement of extending to the date for completion of the contract by virtue of the operation of Article 3.7 of Decree 122/2005 (see paragraph 122 above). He suggests that any provision that seeks to limit the duration of the guarantee is unlawful and ineffective. This interpretation was rejected by Avvocato Oliver and Notary Valente when it was put to them in cross-examination.
Notwithstanding Notary Carderelli's extensive experience as a Notary (but not, I have to say, demonstrated on the evidence to be "an acknowledged expert on the issue of off-plan conveyancing" whose book on the subject is "a source of law" as claimed by Mr Flenley), I am quite unable to accept that Article 3.7 has the effect he suggests or was ever intended to have this effect. The purpose of the provision was plainly and simply to provide that once a completed transfer of ownership had taken place, the guarantee would cease to be effective even if completion occurred within any period specified for the duration of the guarantee. Given that the whole purpose of the decree was to protect the purchaser up until completion of the purchase, this is an obvious provision to include within the decree.
As it happened, when the question of the validity of the guarantees became an issue during 2009 the firm pursued VFI and RDV for the provision of new guarantees. This would have been wholly unnecessary if Notary Carderelli's view was correct.
Leaving aside the interpretation of the decree itse lf, the obvious commercial reality is that the premium for any guarantee provided pursuant to the decree would be different for say, a guarantee lasting one year rather than one lasting three years.
I cannot, therefore, accept Notary Carderelli's view on this issue. Mr Flenley has been anxious to submit that if I should reject any aspect of the expert evidence of Avvocato Oliver, Notary Valente or Avvocato Scarpa, it should make me cautious about accepting any aspect of their expert evidence. As I have already indicated (see paragraph 265), I would not ordinarily consider that a legitimate approach to the evaluation of a reputable expert's evidence – as with any witness, an expert can be right on many issues, but wrong on others. I do, however, have to say that this particular viewpoint advanced by him has, I regret to say, shaken my confidence in Notary Carderelli's expertise in interpreting some aspects of Italian law accurately for my benefit.
In my judgment, it is plain (leaving aside the question of the institution that provided the relevant guarantees) that the firm should not have permitted any claimant to part with a deposit when there was not in place a guarantee that extended until the completion date and, as a consequence, should not itself have paid out any deposit without such a guarantee in place.
My concern about Notary Carderelli's evidence does lead to one other matter. He was of the view that an article 107 institution is no more secure than an article 106 institution. That view is not consistent with what Avvocato Oliver and Notary Valente said (see paragraphs 124 - 125) and I had thought that Notary Cardarelli had agreed that the requirements for article 107 status were more stringent than for article 106. At all events, on my overall evaluation of the weight to be given to the various experts on this issue, I prefer the combined view of Avvocato Oliver and Notary Valente to that of Notary Cardarelli.
As indicated above (paragraph 128), no guarantee was ever issued that, on its face, indicated that it was issued by an Article 107 institution. Notary Cardarelli suggested that it was not necessary for the status of the institution to be set out on the face of the instrument. Whether that be so or not, the fact is that every guarantee in this case (whether initial or subsequent) was said to have been issued by an Article 106 institution and the evidence that any of these institutions was on the Article 107 list at the same time does not exist. There was a suggestion that the two lists merged in 2010, but Notary Valente's evidence was that the relevant decree (Decree 141 of 2010), though passed, was never implemented. This was not pursued further and I think I must approach this case on the basis that that is so. Nonetheless, notwithstanding Mr Flenley's efforts to circumvent the awkward position in which his clients find themselves in this regard, I do not think I can approach this part of the case other than on the basis that there was never a compliant guarantee in place and that that non-compliance (a) should have been drawn to the attention of the purchasers and (b) should have led to no deposits being paid out. I equate a non-compliant guarantee with a defective guarantee for this purpose. I can see no justification for treating a guarantee that did not comply with the Decree as if it did. It follows that any payment out of a deposit when all that had been provided was a guarantee either issued by an institution other than one listed in Article 107 or which was not expressed to extend until the completion of the purchase was a payment made in breach of trust.
This section of the judgment is, of course, focusing on the position concerning breach of trust and not with what I perceive to be arguably the more important question of whether, had the claimants been told of the defects in the guarantees (possibly along with the other matters about which they should have been told), they would have entered into the preliminary contract at all. I have identified at the beginning of this section what Mr Flenley seeks to say about all this and, logically, I should move to his argument that, even if there was a breach of trust, no loss was occasioned thereby.
I have to say, however, when reviewing the material for the purposes of writing this judgment, I was unable to identify any one of the items on the list of issues as raising this point at all. It was, of course, foreshadowed in Mr Flenley's opening and the substance of the argument has been addressed by Mr Majumdar. However, I am reluctant to deal with it for two reasons: in the first place, although no objection has been taken to the ventilation of Mr Flenley's argument, all issues of causation of loss in the individual cases have been deliberately left out of the current proceedings. This issue does seem to me to be one, if it is to arise at all, that would be best dealt with at that stage. The question is whether, if a breach of trust is established, it made any difference to the outcome financially such that there is a compensatable loss. This was the issue addressed in the Target Holdings case on the assumed facts. The practical difficulty in the present case is making any valid assumption of fact for the purposes of the argument. As I see it, if the firm had complied with its duty of alerting each claimant to the non-compliant guarantees (an obligation that is admitted), either the claimant would have said that he/she was not prepared to go ahead until a compliant guarantee was in place or would have decided (possibly given the existence of other concerns about the overall transaction) not to go ahead at all or, finally, would have decided to go ahead and take the risk of not having a compliant guarantee in place. It would only be in that last situation that any loss might arise but it would be difficult to see how there could have been a breach of trust (because the firm would have alerted the claimant to the issue) and, in any event, any loss would be attributable to the individual claimant's own decision to proceed.
To my mind, the issue based upon the Target Holdings case is truly academic, certainly at this stage, and interesting though the arguments are, as presently advised, I see no good basis for trying to arrive at a final conclusion about them. The position thus advanced in paragraph 419 and the first sentence in this paragraph appeared in the draft judgment sent to the parties on 24 June and it remains my view. I undertook in the draft judgment to re-consider that position if invited by the parties to do so and, if so persuaded, would provide a short supplemental judgment. Mr Flenley and Mr Majumdar have asked me to do so. As I have said in paragraph 418, I see this case as turning on a wider issue than whether the deposits were paid out in breach of trust. However, if I were wrong about that and it is of importance to the parties to know my conclusions on the arguments advanced, those conclusions are set out briefly in the Supplemental Judgment which, for convenience, is attached as Appendix 3 to this substantive judgment.
Risks of criminality
Following the late disclosure of an e-mail from Cristina Poncibo to Avvocato Giambrone sent on 11 December 2006 (to which I will refer below at paragraph 424) I permitted an amendment to the pleadings to enable the claimants to allege, if so advised, that they should have been alerted to the potential involvement of organised crime in Calabrian off-plan developments. Prior to that disclosure, the only pleaded reference to mafia or criminal activity was made in the Noel action. The following averments was made in the Defence in that action to support an allegation of alternative causation and/or contributory negligence:
"What caused the claimants' loss was their unwise entry into the transaction, relating to the off-plan purchase of property in a notoriously crime-ridden part of Italy without, it appears, taking any financial advice. That was due to their own negligence, not that of their Italian property lawyers."
"In the alternative, the claimants' alleged loss was caused or contributed to by their own negligence in investing in an off-plan property in a crime-ridden part of Italy without obtaining any financial advice as to the wisdom of the transaction."
Made as they were, these averments suggested that it was the knowledge of those instructing the pleader (presumably Avvocato Giambrone and possibly other individual defendants) that Calabria was "a notoriously crime-ridden part of Italy".
Although this might be thought to be a somewhat unusual averment, in reality it went to a causation issue. Since there was no allegation (and still is no allegation) that any of the defendants were in any way involved in mafia or other criminal activity I ruled at an interlocutory stage that there was no issue concerning criminal involvement to be considered at what was essentially a trial of issues related to allegations of professional negligence and other breaches of professional duty. However, the disclosure of Avvocato Poncibo's e-mail did change the picture somewhat and, accordingly, I permitted the proposed amendments.
What was revealed in a sequence of e-mails that Avvocato Poncibo was sending to Avvocato Giambrone during the Autumn of 2006 concerning her status as a partner was the following (translated) passage in an e-mail sent on 11 December 2006:
"I have become aware of very serious issues.
I refer to agreements for off pan (sic) sales in Calabria and other transactions.
Such transactions are very dangerous, both financially and criminally and they may involve persons onsite that could also have links with organised criminality.
I am distressed by the thought that you used (and still use to date) my name and surname, without having said a word to me in relation to such transactions.
Does this seem to be the right way to conduct yourself toward me?
I am distressed to learn that I have asset and personal liability for very dangerous activities that I KNOW NOTHING ABOUT …."
This has led to a pleading by Mr Duddridge alleging that she knew of a real risk that off-plan transactions might be implicated in or connected with organised crime and that there was a real risk that purchasers might lose money. Her knowledge of these matters was, it was alleged, communicated to Avvocato Giambrone on the assumption (which was not admitted) that he did not know of such matters already.
This allegation has led to the issues that appear at 30A-C in the List of Issues.
Avvocato Giambrone accepted that the e-mail was sent to an e-mail address he was using at the time, but said that he only became aware of the e-mail when the defence for the present case was being prepared and that he "did not read this at the time … because probably I receive so many e-mails on a daily basis in my inbox that just did not read this e-mail at the time." He did accept that he received other communications from her in this period.
In cross-examination he said that he regarded Calabria as being "a notoriously crime-ridden location" and that it infiltrated "all sectors", by which I understood him to include the building sector.
Notary Cardarelli said that "Calabria has a reputation for organised crime" and that it had infiltrated "all sectors" and created risks for "everything and everyone." He agreed that a lawyer acting for an English client should not assume that the client would have the same knowledge of the situation relating to organised crime as an Italian person would.
Notary Valente had been asked to answer this question in his report:
"Ought the Defendants to have given the (non-resident and non-Italian) Claimants some indication of the prevalence of Mafia activity in Calabria and its possible effects on the building of a major off-plan development and on the local sale and rental market for such properties?"
His answer was as follows:
"Yes because Calabria is among the Italian regions with a high rate of organised crime, (a "Mafia" organisation known as "NDRAGHETA") which, as is well known, has infiltrated commercial activity in the building sector."
Avvocato Poncibo was asked by Mr Duddridge whether she agreed with this and she replied as follows:
A. This is the sort of information that is in the public domain, everybody knows?
Q. So everybody knows that there is a risk that building operations in Calabria may be implicated in organised crime?
A. No, I would not say specifically in the building sector, but it's notorious that there are in the south of Italy some criminal organisations that have then branched out.
Q. But large developments of this kind, large off plan developments, might be implicated in, for example, money laundering?
A. Not necessarily. That is not different from what happens elsewhere in Italy and I also would like to say in other countries.
Mr Duddridge asked her about the paragraph in her e-mail which said that off-plan transactions were "very dangerous, both financially and criminally" and could involve people "onsite that could also have links with organised criminality":
Q. … I am asking why transactions of this kind may be risky both financially and criminally. What are the financial risks and what are the criminal risks?
A. These are huge conflicts and can require really large amounts of money and also I think at the moment, when the building begins, there might be some attempts on the part of crime to gain access to the operations. That is what I meant.
I thought Avvocato Poncibo was trying to retreat somewhat from the true effect of the words in her e-mail, but the clear inference to be drawn from all this evidence is that "the firm" (including Avvocato Giambrone) plainly knew that organised crime could be involved in projects, including building projects, in Calabria and that could give rise to risks for those who became interested in those projects. That does not mean, however, that there is any evidence that the firm knew or even suspected that the JoTS development was affected by this – on, I should emphasise, the assumption (as yet unproved) that it was.
What implications does this have for this case? Most, if not all, of the exemplar claimants said that they had not thought of criminal involvement when they first became interested in acquiring a JoTS property. Whether that was so will be a matter that will be considered if the situation arises when the issues pleaded in the Defence in the Noel action fall for determination. However, looking at the position more generally, it seems to me that Avvocato Giambrone and his colleagues, when making a pitch for the instructions of foreign clients buying off-plan in an area where there was a risk of organised criminal activity, particularly in the building sector, will have wanted to ensure that those clients believed that they were not exposed to the additional risks to which such activities might give rise. It may partly explain the emphasis given to the "independence" of the firm in the approaches made to potential clients (see paragraph 99 above).
Does it make a difference to the breadth of the duty of care to be expected or its standard? In my judgment, whilst it is not the reason for requiring it, it reinforces the need for what I have described previously as "enhanced due diligence" which is precisely what the firm promised (see paragraph 289).
Does it mean that the claimants should have been alerted to the risks and that the failure to do so was negligent or in breach of duty? Looking at this as an English lawyer would have done (but with knowledge of the risks involved), in my judgment, it was necessary to say something to the effect that a proposed purchaser "may have heard" that the area is generally one where organised crime in the construction industry has been known to be involved on occasions, that it is something that the purchasers should bear in mind, but that the enquiries to be undertaken by the firm will be designed to see if there is any basis for concern in relation to the JoTS development. In my view, that would have been a sufficient discharge of any duty to alert the purchasers in this regard. Obviously, having said that appropriate enquiries would be undertaken would mean that they would have to be undertaken and reported on to the purchaser. Notary Valente gave evidence about the kind of enquiry that might be made. It may well be that nothing would have been revealed, but that again is not the point.
When cross-examined, Avvocato Giambrone said that, in his view, it was not necessary for the firm as lawyers to advise clients positively that "Southern Italy was a crime ridden area." This, however, was an example of his suggesting an exaggerated requirement and saying that it was not a necessary requirement. What Mr Majumdar was endeavouring to put to him during the relevant passage of his cross-examination was that the firm had a positive duty to say to clients that there is a crime problem in Southern Italy, but that the firm had no information that JoTS was in any way connected to it. (Incidentally, I did not interpret the cross-examination in the way Mr Flenley's written closing submissions suggested it was intended, namely, to put that there was in fact no reason or information to suppose that JoTS was in any way connected with organised crime, but to put that this could have been said to clients at the time if it was what the firm believed.) Avvocato Giambrone answered the proposition in the way I have indicated. As I have said, in my judgment, the general issue should not have been ignored and should have been dealt with in the way I have indicated.
One of the issues raised (part of issue 30C) is whether the failure to mention this aspect represented a deliberate choice on the part of the firm, designed to prefer its interests and those of RDV, VFI and/or Veco above those of the clients. If this is an allegation that is maintained, it is the sort of allegation that would need to be addressed head-on with someone such as Avvocato Giambrone. It was not so addressed and, in my view, for the good reason that there is no evidence that it represented the motivation for not raising the issue with the clients. I am inclined to accept that Avvocato Giambrone did not himself consider that it was something that needed to be mentioned to the clients from his perspective as an Italian lawyer and someone who lived and practised in an area where, on his own account, there is a fair degree of organised criminal activity. What he overlooked was that his message was being received by the clients on the basis that he was acting as an English lawyer with an English lawyer's perspective. At all events, whether that is a correct evaluation or not, I do not consider, on the evidence I have heard, that not referring to the crime aspect represented the result of some improper influence or the combined interests of the firm and the developer and builder. There is no doubt that the firm was "swept along" with the marketing impetus provided by VFI and RDV, but that, in my view, was the result of an opportunistic desire on the firm's part to secure business for itself when its inner resources were not adequately geared to provide the necessary services. On the evidence available to me, that is the most likely cause of the deficiencies in the advice it gave to the claimants and in the general service it provided.
What due diligence was actually carried out?
What due diligence was actually carried out? I have observed elsewhere that I have not had the advantage of hearing from Avvocato Margiota who was responsible for the judicial diligence exercise. Again, Mr Flenley makes an argument that because Avvocato Giambrone was not cross-examined about it "there is apparently no dispute as to what due diligence [the firm] in fact carried out." My attitude to that kind of submission is set out above (paragraph 17), but if it is the case (as it appears to be) that Avvocato Margiota was left to deal with this, I cannot see what purpose there would have been in cross-examining Avvocato Giambrone about it.
At all events, it is contended on behalf of the Defendants that the following matters were carried out as part of the due diligence:
(i) carried out Land Registry searches in respect of the land on which the development was to be built;
(ii) checked the legal title, including that RDV and Veco owned the land in question and how the land was acquired;
(iii) checked that there were no charges or other encumbrances on the title;
(iv) checked that the land was correctly registered with the urban registry;
(v) identified and checked the formal validity of all relevant planning permissions;
(vi) undertook company searches in relation to RDV and Veco with the Chamber of Commerce in order to ascertain their status, their administrators, whether they could lawfully undertake the proposed activities;
(vii) checked that VFI had legal authority to act on behalf of RDV and Veco;
(viii) checked that the developers were in principle willing to provide a bank loan guarantee in accordance with Decree 122/2005.
The contemporaneous sources of that information are said to be the "to whom it may concern" letter of 14 February 2007 (paragraph 97), the retainer letters (paragraphs 151 - 154), the Reports on Title (paragraph 155 and following) and the preambles to the preliminary contracts.
The claimants suggest that the evidence supports the proposition that some land searches have been carried out, but otherwise no further enquiries were conducted. There has been little revealed in the disclosure exercise that supports the precise claims made by the defendants and, as I said, the one witness who might given a fuller picture was not called. However, it seems to me that answering the question posed in issue 28 is not that helpful in the circumstances. What is in issue is whether certain matters that the claimants allege should have been looked into were in fact looked into: the battleground is what should have been done rather than what was done because there is no dispute that the areas where it is said that there should have been more extensive enquiries (e.g. concerning the financial status of RDV and Veco and matters relating to the planning permissions) were not pursued. It seems to me that the highest I can put it on the evidence is that it is likely that each of the items listed in paragraph 441 above was addressed in the due diligence exercise to a sufficient extent that the actual information conveyed was accurate, but overall the information given was not adequate in the circumstances.
The partnership issue
I set out a brief history of the partnership in paragraphs 44 - 52 above without dealing with issues that have been raised concerning the legal relationship of the individual defendants.
Admissions were made during the trial that disposed of much of the argument about those issues. The remaining partnership issue is a relatively narrow one and I can deal with it shortly. However, there is a substantial background to the concessions eventually made on behalf of the individual defendants that Mr Duddridge, in particular, submits throws light on the approach of the defendants to this litigation and to their individual and collective credibility. Mr Flenley has been anxious to submit that the remaining issue is academic, that the court should not be troubled with it and that his clients "should not be put to the cost of dealing with an academic issue." Given the way that this litigation has been conducted on the defendants' side, it is, frankly, very difficult to determine what is and what is not an academic issue. Mr Duddridge understandably draws attention to the position that the defendants' insurers have taken (see paragraphs 71 - 78 above) and is concerned that there may be some underlying coverage argument that has not yet surfaced which may relate to this issue. He says that I should deal with the remaining partnership issue to avoid the possibility of having to re-litigate it. It is recognised, however, that the insurers are not parties to these proceedings and, strictly speaking, could not be bound by any finding I made, but the suggestion is that it would be unlikely that insurers would want to re-litigate precisely the same issues on precisely the same evidence as has been before me. I accept that that is a legitimate justification for dealing with it and I also consider that the background to the whole partnership issue is potentially revealing in terms of credibility. I might add also that the costs associated with my dealing with it must be very small by comparison with the costs incurred by the claimants in pursuing the partnership issue (including disclosure issues) and the defendants in resisting it before the concessions were made.
The first intimation of an admission concerning the partnership issue was made after lunch on the first day of the trial and the position was clarified on the second day. The net effect of the admission at that stage was that the third, fourth and fifth defendants admitted that there was a partnership in English law between them from October 2007 until 6 April 2008, although they say that they did not intend to create a partnership in English law. This admission was then extended on the sixth day of the trial to accepting that they were an English law partnership (without having intended to be in one) from 16 April 2007 until 6 April 2008. Apparently, 16 April 2007 was the date when the Solicitors Regulation Authority has confirmed that the third and fourth defendants were registered in the UK as partners and that is why the partnership from then was admitted.
In the first place, Mr Duddridge says that there is no obvious need for the three individual defendants to qualify the admission by reference to what they did or did not intend: if they were partners in English law, it is irrelevant whether or not they intended to create such a partnership. To the extent that it matters, I agree.
He invites me to find that at all material times before 7 April 2008, Giambrone & Law traded as an English law partnership, that Avvocato Giambrone was always a partner in that partnership and that the third and fourth defendants were partners in that partnership from 16 April 2007 to 6 April 2008. Mr Flenley accepts that Avvocato Giambrone was always a partner in the partnership from its inception. Mr Duddridge suggested that November 2005 was the beginning of the partnership although Avvocato Giambrone said in his witness statement that Giambrone & Law began in April 2005. On that basis I find that there was a partnership from April 2005. At that stage the two partners were Avvocato Giambrone and Avvocato Poncibo. Avvocato Giambrone's evidence was that from the outset he had to comply with the English regulatory regime and, accordingly, had to practise with somebody who had 3 years' post-qualification experience which he did not have at the time. He was not qualified to practise on his own before November 2007 at the earliest. The person who did have that experience was Avvocato Poncibo and Avvocato Giambrone gave evidence that she underwent training courses to ensure that she understood her professional obligations, including compliance with the Solicitors Accounts Rules. Although she put forward a different account of the need to undergo this training, she confirmed that she intended to comply with the English Law Society's requirements from the outset. There is, therefore, ample justification for the conclusion that there was a partnership from the beginning.
Mr Duddridge does not seek to extend the date range in relation to the third and fourth defendants from 16 April 2007 to 6 April 2008 because the date range itself is irrelevant since the deposits were all paid away after 16 April 2007 although they each entered into an employment contract as "salaried partner" with Giambrone & Law in June 2006. By early June 2007 they were being described on Giambrone & Law's headed paper as partners. On that basis one would have thought it beyond question that they were, properly speaking, "partners" and thus legitimate defendants in any proceedings brought concerning allegations against the firm arising from about that time. Mr Sefton's affidavit in the Northern Ireland proceedings (see paragraph 60 above) confirmed that. However, affidavits sworn a few months later on 12 December 2012 in those proceedings by the third, fourth and fifth defendants in the present proceedings asserted that they had not been in partnership and that the third and fourth defendants were not proper defendants to those proceedings. Notwithstanding that position, on 15 January 2013 the third and fourth defendants made statements in the SDT proceedings (defending the allegation that they had held themselves out as a partnership when they were not) that they were sure that they had been trading as partners. Avvocato Giambrone made a statement that did not dissent from that position. Mr Simon Monty QC, acting on behalf of all three before the SDT, submitted that it was quite clear from the evidence that they were genuine partners. Until the position was reversed by the admissions to which I have referred were made, it has been the defendants' position in these proceedings that there was no partnership. Witness statements to that effect have been made.
Avvocato Poncibo's position is now truly academic because a settlement by which the claims against her were discontinued was concluded shortly before the trial began. However, she gave evidence via video-link from Italy and was asked about aspects of the communications she sent to Avvocato Giambrone in the latter part of 2006 (see paragraphs 424-434 above), particularly the use of the Italian word "responsabilita" which was translated to mean "liability". The context of the communications, particularly the e-mail of 11 December 2006, suggests that this is indeed what was meant. The expression "responsabilita patrimoniale" was translated as "financial liability". In her witness statement and during her oral evidence she suggested that these expressions meant "moral responsibility", not any kind of liability associated with a legal partnership. In the context of this questioning she said that she recognised "that [her] command of English is patchy at best". That appeared to be evidenced by having an interpreter when she gave evidence and the evidence she gave that she could not prepare her witness statement in English and that she had prepared it in Italian with a view to being translated. Very properly, RPC drew Mr Flenley's attention to the fact that her witness statement had always been in English and that she had prepared it. He, of course, drew that to the court's attention. That information was a matter of concern.
Although she has subsequently put forward a statement indicating that she made a mistake, this evidence (and particularly the context concerning the difference between "liability" and "moral responsibility") has made me very cautious about accepting her evidence. It adds also to my general impression (also reinforced by the "moving target" of the partnership issue) that all the individuals who have worked within the firm who have given evidence (with the exception of Avvocato Virga) will say what seems to be convenient at the time.
The legal effect of the transfer of the Giambrone & Law's business to the LLP
Issues 3-6 raise the relevant questions. As previously indicated, I have not been assisted by any submissions by or on behalf of the LLP although until shortly before the commencement of the trial Mr Flenley and Mr Carpenter, instructed by RPC, were representing the LLP. That did not impede Mr Flenley (perhaps because I did not notice at the time until I was reminded about it after the event) from cross-examining Mrs. O'Connor, who was a client of the LLP and only a client of the LLP, at some length.
At all events, the answer to issue 3 is plainly 'yes'.
Equally, I do not think there can be any dispute that the transfer of the business to the LLP gave rise to an implied novation (or a novation by conduct) that the LLP would provide the remaining services that Giambrone & Law had been retained to provide to each of the claimants who chose to continue with the LLP. All of the exemplar claimants did. The transfer did not transfer any existing liability to the claimants for breach of duty to the LLP or release Giambrone & Law from those liabilities as, it seems, Avvocato Giambrone had at one stage argued in correspondence.
The claimants' pleaded case is, in short, that the LLP was under an obligation to perform any unperformed obligations of Giambrone & Law, which included correcting prior breaches of duty, and "to act faithfully and in the best interests of the [relevant claimant] in doing so, and to advise and act with reasonable skill and care". It is further alleged that any liability of Giambrone & Law to a claimant in contract arising out of any breach of duty or want of care that had occurred before the transfer would be transferred to and borne by the LLP and that the LLP would indemnify the claimant in respect of any loss caused by any breach of duty or want of care (of any kind) by Giambrone & Law committed before the transfer.
I can see nothing in principle that is wrong with that case and I accept it. It follows that Issues 3-6 can be answered accordingly.
Limitation
An issue as to limitation arises in relation to some, though not all, of the Penningtons Manches claimants. The action seeking damages for loss of their deposits was commenced in some cases a few months after the 6-year period from the date on which those deposits were (on the claimants' cases) wrongly paid over to RDV and VFI in breach of trust and/or in breach of duty. The basis of the claim is, as previously indicated (see paragraph 358), that the Mandates required those payments to be made in breach of the firm's duty to its clients, but perhaps more importantly for present purposes, that the defendants should have told the purchasers about the division of the commission.
As I have recorded elsewhere (see paragraph 68), the existence of the Mandates was not disclosed by the defendants until 2013 for most of the claimants. Apparently, the first occasion on which either of the JoTS Mandates came to the attention of any of the claimants was on 22 July 2011 when copies were provided to Mr Richard Brennan (the First Claimant in Claim HC13A01254) by the Legal Services Ombudsman. Given that a claim based upon the terms of the Mandates could not be maintained until their existence and contents were known by a claimant or ought reasonably to have been known, it is difficult to see how any legitimate limitation defence could be advanced provided that the claim was brought within 6 years of the date when the existence of the Mandate was known or ought reasonably to have been known.
However, as I perceive it, the substantive claim made by the claimants arising on the basis of the Mandates is the knowledge they demonstrate that the firm had at the outset about the levels of commission. The claim advanced is that, in breach of duty, the firm failed to reveal it to the individual claimants prior to signing the preliminary contract. That claim could only be advanced when a claimant knew or ought reasonably to have known the fact that the firm knew about this at that stage. The short point is that it is clear that the firm knew about this at the outset, but did not reveal it to the claimants, and the letter of 29 April 2009, which revealed the level of the commission, contained the pretence that the firm had only recently discovered it. It was only when the Mandates themselves were revealed that any claimant would have had grounds for alleging that the firm had knowledge of this from the outset. Whilst it would be right to say that the Mandates provided the evidence for this, they also afforded the fact relevant to the right of action that the claimant would wish to advance. Section 32(1)(b) of the Limitation Act 1980 provides, of course, that where "any fact relevant to the plaintiff's right of action has been deliberately concealed from him by the defendant" the period of limitation shall not begin to run until the plaintiff "has discovered the … concealment … or could with reasonable diligence have discovered it."
I have re-read the transcript of Mr Flenley's submissions on this issue and the helpful note prepared by Mr Carpenter, but I am quite unable to see the complications arising in this context that they say exist. Mr Duddridge has drawn my attention to The Kriti Palm case [2006] EWCA Civ 1601 and has submitted that before the claimants could plead a case of breach of duty based either upon the fact of the Mandates and/or upon the contents of the Mandates they needed to be aware of the fact of the Mandates and of their contents. In my judgment, a fundamental fact underlying the cause of action based upon the failure to reveal the commissions was suppressed deliberately on 29 April 2009 and the full truth was not revealed until the Mandates were revealed later. Mr Flenley accepted that if this was my conclusion, it was capable of showing that there was concealment of the fact that the defendants had known earlier what the level of commission was. For my part, I would hold that the limitation period for this cause of action would not commence until a relevant Mandate was revealed to an individual claimant or the individual claimant "could with reasonable diligence have discovered it". If I was wrong about that, the earliest moment at which this cause of action could arise would have been 29 April 2009 (which, one supposes, might have led some individuals to start asking questions about what the firm truly knew and when). In that event, Mr Flenley accepts that all claims have been brought within time.
I have focused only upon section 32. Mr Duddridge has said that, if necessary, he reserves the right to invoke section 14A of the 1980 Act in individual cases. This was not on the List of Issues.
Remedies
Issue 90 relates to remedies.
I can deal with these quite shortly because some, in my view, cannot properly be determined until the individual cases are considered if that scenario becomes necessary.
However, I am in no doubt that the deposits can be recovered if it is established in an individual case that but for the breaches of duty the deposit would not have been paid out. The deposit for this purpose would only include the acconto if either the acconto was paid after material advice from the firm had been given or the acconto was refundable and the individual claimant would have been able to recover it but for reliance on the firm's advice.
Expenditure incurred on trips to Italy reasonably undertaken to check on progress and/or to consult either the firm or others about what was happening after the firm had been consulted would prima facie be recoverable, particularly if it related to seeking advice about what to do and/or how to extricate a claimant from a contract. Reasonably incuured legal costs for this purpose would also prima facie be recoverable.
I agree with Mr Flenley that I cannot really make any generic finding on claims for additional costs and interest incurred through borrowing to raise funds to pay the deposits.
There is no dispute that the claimants would be entitled to equitable compensation for any breach of trust or breach of fiduciary established.
I am unable to see the claim for specific performance of the LLP's obligations under rule 7(1) of the SAR as other than academic and thus express no view upon it. Equally, an order for an account relating to the deposits is, in effect, covered by any damages claim for breach of duty and/or any claim for equitable compensation for the breach of trust and breach of fiduciary duty established by paying out the deposits when they should not have been paid out.
Interest on any award is covered by section 35A of the Senior Courts Act 1981. I do not consider that I can make any generic finding other than to observe that it is usually awarded.
It is agreed, as I understand it, that any compensation should be paid in the currency in which the loss was incurred. I do not consider that I should say anything about the date when any relevant exchange rate applies to a compensation award.
Conclusion
I believe I have now dealt with all the issues that are still material issues at this stage.
The details of my conclusions on the individual issues are to be found in the main body of the judgment. I draw together the following observations for convenience and a general summation. There are not intended to replace or modify any of those previously expressed conclusions.
On the evidence I have heard, it is quite clear that Avvocato Giambrone saw a lucrative business opportunity in Calabria when there was a "boom" in off-plan transactions in the holiday residence market. There is nothing wrong with that, of course. It is possible that he (as a relatively inexperienced practitioner himself) found his very new firm being inundated with requests to act (which, of course, he had solicited with the active encouragement of the developers and promoters) when the firm's resources were not sufficient (or not sufficiently experienced) to cope with the demand. As a result, either corners were cut or, because he had insufficient experience of what the English solicitor (whose standards he said he set out to adopt) would be required to do in such a situation, the standard of work was inadequate. However it came about, the preliminary contract was wholly inadequate to protect the interests of the purchasers and there is no doubt that the purchasers were not given certain relevant information (for example, relating to the payment structure for the project and the level of commission going to the promoter) that they ought to have been given in order to make an informed decision about whether to proceed.
It would be an entirely fair point that neither Avvocato Giambrone nor his colleagues could have foreseen some of the problems that occurred in this case, for example, the worldwide economic downturn from September 2008 onwards that must have had a significant impact on developments such as those involved in this case. It must have affected the ability of builders to raise money to complete them and also for purchasers to make contributions to the building costs by way of stage payments. However, the risks against which the firm should have protected the purchasers were recognisable risks in all off-plan schemes and the contract did not do enough to protect against them.
When difficulties started to emerge with the planning aspects of the development in June 2008, at about the same time as the decision was made to transfer all the purchasers' files from London to the Vibo office, and then shortly afterwards the SRA inquiries commenced, a prolonged and committed damage limitation exercise began, evidenced outwardly to the claimants by the letter of 19 January 2009 and, more particularly, by the letter of 29 April and Avvocato Giambrone's Legal Opinion of 22 June 2009. It continued thereafter but with the onset in due course of the litigation in its various forms it transformed itself into a damages limitation exercise. It was suggested to me on behalf of the claimants at the first case management hearing in October 2014 that "attritional" tactics were being adopted. I was not prepared to take that view at that stage and indeed there can be no criticism of taking legitimate points against any claim that is mounted. I have, however, previously observed that, despite many settlements achieved in the past, almost every aspect of the claimants' cases in these proceedings has been contested. On my findings and conclusions, many of those points have been laid to rest. Whether this judgment heralds a new dawn in these unhappy proceedings remains to be seen, but Avvocato Giambrone, his insurers and his advisers may see it as an opportunity to review the position.
If the proceedings do continue, and since the question of causation in individual cases has been left to one side, it is impossible to say what the result in any such case would be. However, the conclusions that I have reached establish clearly that relevant breaches of duty have occurred.
Expression of thanks
I am grateful to all Counsel and their Instructing Solicitors on all sides in this case for their assistance and to Hannah Noyce, Diarmuid Laffan and Michael Deacon, each of whom acted as my marshal at various times in the proceedings and who assisted in court with the substantial documentation.
APPENDIX 1
LIST OF GENERIC ISSUES
(as remaining at the end of the trial, the deleted matters having been resolved or not pursued)
C
The Claimants
D
The Defendants
G&L
Giambrone & Law (a firm)
The LLP
Giambrone & Law LLP
Guarantee
See paragraph 122
Mandates
See paragraph 137 and following
Preliminary Contract
See paragraph 112 and 155 and following
Partnership
Was G&L a partnership under English law? If so, which of the individual Ds (being Allessandra Bellanca, Anna Cinzia D'Arpa, Gabriele Giambrone, Cristina Poncibo) were its partners during the material time?
Alternatively, are any of the individual Ds liable (or potentially liable) as partners on the basis:
(1) that they were held out as such under s.14(1) of the Partnership Act 1890, or
(2) that they are estopped from denying that they were partners;
and, in either case, for which periods?
Transfer / Assignment / Novations
Was there a transfer of G&L's business to GL LLP on or about 6.4.08?
What was the effect, if any, of D having sent to C its circular letter regarding the LLP on or about 6 April 2008, and C having thereafter proceeded to instruct the LLP? Did that result in any assignments or novations of G&L's retainers with C to GL LLP?
What were the terms of any such assignments or novations?
(a) Was or should D2 have been aware of what D1 had done or not done by reason, inter alia, of comprising the same lawyers. (b) If so, was D2 under any obligation to rectify mistakes and omissions by D1.
Retainers/ Contractual and tortious duties of care
What were the express and implied terms of the retainers between C and D and what was the nature and scope of the duties of care which D assumed to C from time to time[5]?
What was the standard of care which D owed to C:
(1) Was it the standard of a reasonably competent Italian conveyancer;
(2) Was it the standard of a reasonably competent English solicitor conducting Italian conveyancing transactions;
(3) Did the standard depend on the precise duty in question?
Fiduciary Duties
What fiduciary duties did D owe to C under English law? Did these include the following:
(1) If G&L/ GL LLP (a) were bound by the Mandates to deal with C's deposits in accordance with those Mandates (including any obligation not to disclose the existence of those Mandates) and/or (b) had acted for the developers or promoters and drawn up Preliminary Contracts on their instructions, a duty not to act for C at all;
(2) A duty not to act for C in the circumstances set out in (1) without C's informed consent;
(3) A duty to disclose to C the existence and implications of the Mandates and/or that G&L/ GL LLP had drawn up the Preliminary Contracts on instructions from the developers or promoters before accepting C's retainer;
(4) A duty not to make an undisclosed profit from their relationship with C[6];
(5) A duty not to put themselves in a position where a conflict of interest or duty arose or might arise?
Regulatory Duties
What regulatory duties did D or any of them owe to C under the Solicitors Account Rules 1998 and /or the Code of Conduct of Solicitors? Did such duties give rise to enforceable obligations owed by D (or any of them) to C, either under the retainers or at common law?
The relationship between D and VFI, RDV and Veco
At any material time, what was the nature of the relationship between D and VFI, RDV and/or Veco in relation to JoTS?
Did the relationship between D and VFI, RDV and/or Veco give rise to a conflict of interest or duty? If so, what steps should D have taken in relation to that conflict of interest or duty? Did D take those steps?
Were G&L/ GL LLP seeking to advance the commercial interests of the promoters, vendors and/or developers as well as their own commercial interests?
Did G&L/ GL LLP act for the vendors or promoters of JoTS during the material times and in connection with matters related to Cs' retainers?
Did G&L or GL LLP draft the preliminary contracts in respect of the JoTS purchases:
(1) If so, did they do so on instructions from the vendors or promoters?
(2) If not, should D have informed C of that, in view of their statement in the letters of engagement that they would do so?
Were the terms of the general form of preliminary contracts sent to C negotiated by D and, if so, how and to what effect?
The effect of the Mandates
What was the effect of each of the Mandates and without prejudice to the generality of that issue:
(1) Did the Mandates give rise to binding obligations owed by the relevant D to VFI or RDV/Veco to deal with the Deposits paid by C in the manner prescribed by the Mandates;
(2) What was the nature of any such obligations - contractual, fiduciary, trustee, or other Italian law obligations;
(3) Did the terms of the Mandates entitle the relevant Defendant to be paid fees or commissions by VFI or RDV/Veco;
(4) Did D in fact receive such fees or commissions from VFI or RDV/Veco;
(5) Did the Mandates give rise to conflicts of interest and/ or duty?
Were D duty bound to disclose the terms of the Mandates to C?
Conflicts of Interest
Were D unable to act for C by reason of any conflict of interest and/ or duty?
Did D receive any undisclosed profit as a result of their role as fiduciaries for C?
Did D allow themselves to be influenced by the interests of the vendors, developers or promoters in conflict with the interests of C?
Did D consciously prefer the interests of one client over another in breach of the "no inhibition" principle?
The Developer and Promoter
With reference to each developer:
(1) What experience did it have in the construction of properties?
(2) What capital did it have available for the development project?
(3) How financially feasible was the development project?
(4) What was the risk of developer insolvency?
(5) What did D know about the above matters and what ought they reasonably to have known?
(6) Was D duty bound to inform C of the above matters or give any advice about them?
Did VFI act as an estate agent or intermediary under Italian law such as to require it to be registered as such with the Italian Chamber of Commerce? If so, in the light of the fact that it was not registered with the Chamber of Commerce at the material times, what effect did that have on its entitlement to be paid commission or any other payment?
Progress of the Development
How has the development progressed during the material period and continuing to the date of trial? What parts (including common parts and facilities) of the development at JoTS have been completed?
The Typical Transaction
What was the normal conveyancing process for purchasing off plan in Italy as applied to these transactions?
In general terms what was the Italian legal framework that applied to these transactions?
What was the purpose for which Italian legislative Decree 122/2005 was introduced?
Due Diligence
What due diligence, if any, did D carry out in relation to the vendors, the developers and the developments?
What investigations should D have conducted into the vendor and/or builder of JOTS and/or promoter or agent of such a vendor or builder and what investigations did they conduct, including:
(1) What, if any, investigations should have been made by D into the background, financial standing and ownership of the vendor and/or builder and/or promoter;
(2) Should D have advised C that the continuing role at JoTS of the vendor/developer caused a risk of abuse for example by its drafting and operation of the Regolamento di Condominio;
(3) In stating in their reports on title that they had undertaken "a multiple object investigation aiming at determining the feasibility of the targeted purchase" and expressing the view that "The proposed payment schedule seems acceptable, as there is no request by the Builders for further interim payments during the phases of construction: this somehow seems to imply that they have their own resources to bring the construction to a positive completion." did D act with reasonable skill and care in circumstances where
i. they apparently had no knowledge or reason to believe that the builders had substantial financial resources;
ii. they knew that approximately 62% of the only sums payable to the builders before completion was to be paid to a third party with no apparent responsibility for constructing the development;
(4) Did D by their Reports on Title or otherwise sufficiently explain who VFI, RDV and Veco were, the relationships between them and the identities of the developers and/or sellers;
(5) In all the circumstances, are the Reports on Title prepared by D adequate, accurate and complete;
When were the Reports on Title on the Beachfront and Main developments drafted[7]?
Risks of Criminality
A. Did D know or ought D to have known at the material times that there was a real risk that off plan developments in Calabria and/or JoTS and/or the C's transactions might be implicated in or connected with organised crime and/or that RDV, VFI and/or Veco might be involved in or have links with organised crime?
B. Did D owe duties to C to warn them of such risks? If so, what were the natures of those duties: contractual, tortious and/or fiduciary?
C. Did D negligently and/ or deliberately fail to warn C of such risks and/or to advise them not to proceed with the transactions? If deliberately, was that because D preferred the interests of RDV, VFI and/or Veco and/or their own interests to the interests of C and/or because D were improperly influenced by the interests of RDV, VFI and/or Veco?
The Preliminary Contract for JoTS
Certificate of Habitability
Under Clause 5.5 of the general form of Preliminary Contracts in JoTS C were bound to complete the purchase even though no certificate of habitability had yet been obtained in relation to the property in question. In respect of this clause
(1) was it lawful?
(2) was it usual or proper to include it?
(3) what was its actual legal and practical effect?
(4) should D
i. have permitted this clause to be inserted;
ii. have explained / drawn this clause to the clients' attention before their signature of the preliminary contracts?
Delay/ Timing and Completion
Clause 5.6 purports to prevent C from terminating the contracts on the grounds of delay to completion, however serious:
(1) What is the true legal effect of this clause? Did it, in particular, absolve RDV/Veco or VFI from having to repay sums received by them by way of deposit or commission;
(2) Under Italian law was it a lawful and/or appropriate clause to be in the contract;
(3) Should D have explained/drawn this clause to C's attention before their signature of the preliminary contracts?
Did the Preliminary Contracts in respect of JoTS fail to make time of the essence? Did they otherwise entitle C to terminate the contract if the property had not been constructed by the contractual completion date of 30.6.09? Alternatively did C have a right to terminate in that event under Italian law?
What obligations did the Preliminary Contracts impose on the vendors with regard to completion and what remedies were available to C in the event of delay or failure to complete?
What advice should D have given concerning the completion obligations and remedies?
Repayment of the Deposit
What was the true legal effect of Clause 6.2 (as to the repayment of the deposit):
(1) Does it, in particular, make D liable to repay the deposit, and if so, in what circumstances;
(2) Under Italian law was it lawful and/or appropriate for it to be in the contract;
(3) Should D have explained / drawn this clause to C's attention before their signature of the preliminary contracts?
Other
In relation to each of clauses 8.4(a), 8.4(b), 8.4(c) and 8.4(d)
(1) What was its legal effect;
(2) Under Italian law was it appropriate or necessary or usual for it to be included in this contract;
(3) Should D have explained / drawn the clause to C's attention before their signature of the Preliminary Contracts?
As to clause 8.4(e) (the Regolamento di Condominio), the developer retained control of the common parts and the development as a whole. What advice should have been given by D to C about the actual/potential effect of this term?
The Deposit
What was the normal level or range of Deposit at the material times which was payable for purchase of a property that had yet to be developed? Were the Deposits of 50% of the purchase price unusually high?
Was it unusual for there to be an initial deposit of 50% of the purchase price rather than smaller stage payments as the work progressed?
What did D know/what should they have known about these Deposits?
What did D advise C in relation to the deposit and what should they have advised?
The Commission paid to the Promoters
What was the normal level of commission payable to promoters of developments such as JoTS? Was the commission of 31% paid to the promoters of JoTS unusually high or excessive?
What did D know about the commission and what ought they reasonably to have known? In particular, did they know that the commission was unusually high or excessive?
On this issue what is the meaning and effect of the letter dated 29 April 2009 from Mr Giambrone and was he:
(1) saying that the commission was unreasonable or excessive;
(2) giving/seeking to give the impression that D had only recently learned or had not always known about the level of this commission?
Were D obliged to give C any information and advice about the commission? In particular without prejudice to the generality of the issue should D have informed C:
(1) that VFI was entitled to be paid and D agreed to pay to VFI some 31% of the purchase price by way of commission; and/or
(2) that this involved the payment of some 62% of the deposits which were the only sums due to be paid to the builders by the Claimant purchasers before completion; and/or
(3) that D held the view that this was unreasonable or excessive; and/or
(4) that there was in any event objectively no or no sufficient commercial justification for the amount/order of magnitude of this commission payment; and/or
(5) that, should the question arise:
i. it would be much harder if not impossible to recover from VFI with whom C had no contractual relationship;
ii. the builder/developer would be unlikely, practically, to be able to return money which it had never received.
Registration of Preliminary Contracts
Is it common practice to register a Preliminary Contract against the land where the completion date is some time after execution of the Preliminary Contract and/ or the Preliminary Contract is for the purchase of a property yet to be developed?
What is the practical effect of such registration in terms of the security it gives the purchaser?
Were D duty bound to give C any information or advice about the possibility of registration and, if so, what?
Holding and Paying Out of Client's Funds
Did the terms of the trust on which G&L/ GL LLP held the Deposit in each case include:
(1) That the Deposit would not be paid over to the vendors until a compliant guarantee had been provided? Or that it was a condition precedent to payment of the Deposit:
i. that there should be a guarantee in place that complied with all the compulsory requirements of Italian law; or
ii. merely that there should be an enforceable guarantee in place;
(2) That G&L/ GL LLP would comply with the SAR 1998?
Did G&L/ GL LLP's obligations under the Mandates conflict with the terms of that trust?
If G&L/ GL LLP paid C's funds out to the vendor and/or developer and/or as commission to the promoter in any of the following circumstances, was that payment in breach of trust or in breach of their duties of care or fiduciary duties:
(1) Before the Preliminary Contract had been executed by the vendor;
(2) Before any guarantee had been provided;
(3) Where the Guarantee did not comply with Italian legislation and did not provide any adequate indemnity to C;
(4) Without disclosing that the funds were being used to pay commission rather than to pay for the construction to commence;
(5) To a different party than that named in the Preliminary Contract as the recipient of the Deposit;
(6) In breach of the SAR 1998.
If claimant monies were paid out before 7 April 2008 in breach of trust was the LLP thereafter duty bound by rule 7(1) SAR 1998 to restore those funds?
As a matter of course, to what accounts were payments of deposits and commission remitted by D?
The Guarantee
What were the requirements (in Italian law) for a compliant guarantee as envisaged by the Preliminary Contract?
Were the Guarantees (representative specimens attached) compliant with Italian law and, if not, were they defective as a result of non-compliance?
What information or advice should D have given C about the Guarantees?
What did the relevant Italian legislation, including Italian legislative Decree 122/2005, require to be done by the vendor?
Did the relevant Italian legislation, including Italian legislative Decree 122/2005, impose any obligation on VFI as agent/promoter?
In what circumstances could a guarantee compliant with Italian Legislative Decree 122/2005 be called upon?
Was the phrase "Bank Loan Guarantee" an accurate description of the instruments provided by the vendors in these cases?
If not, was the phrase "Bank Loan Guarantee" apt to give a misleading impression as to the security provided by the same?
Were D aware of the claims which were made in VFI's promotional brochure about the protection offered by the Guarantees? If so, what if any advice should they have given about what that brochure said?
In relation to
(1) the Beach Front and/or
(2) the main development of JoTS
have circumstances at any time arisen in which a guarantee compliant with Italian Legislative Decree 122/2005 could be called upon and, if so, when?
How would/could a guarantee compliant with Italian Legislative Decree 122/2005 be enforced?
In order to comply with Article 2 and 3 of Decree 122/2005 the issuer of a guarantee had to be registered in a register maintained in accordance with Art 107 of the Single Banking Code:
(1) What difference was there (if any) in the method and cost of obtaining a guarantee from an Article 107 issuer as compared to an Article 106 issuer?
(2) What different or additional requirements were made of Art 107 as opposed to Art 106 issuers?
(3) Was an Article 107 issuer more financially secure than an Article 106 issuer?
Duration and Timing:
(1) When, according to Italian law, should a guarantee be issued? In particular, should it be issued by the time of the signature of the preliminary contract?
(2) If so, what is the effect of there being no guarantee in existence or referred to at the time of the signing of the contract, whether:
i. by the time of its signature by all of the parties; or
ii. by just the purchasers?
(3) Should the guarantee have been issued before deposits were paid?
(4) Should details of the guarantee be contained in the preliminary contract? If so, what is the effect of there being no such reference in the preliminary contract?
(5) What expiry date should the guarantee state/how long should it last? Should the expiry date be no earlier than the date of completion?
(6) Does the guarantee expire on its stated date of expiry? If so:
i. Then if this date is earlier than the contractual date of completion, what effect does this have on the preliminary contract in relation to its enforceability by either party, or otherwise?
ii. Should D have
(a) accepted such a guarantee; and/or
(b) advised C of its deficiencies (if any deficiencies existed); and/or
(c) paid out funds held on behalf of C?
iii. What, if any, advice should D have given C in the light of such expiry?
Did D owe continuing duties to C after the execution of Preliminary Contracts and transfer of deposits to advise them about any:
(1) defects in or the expiry of the Guarantees provided by the vendors;
(2) deficiencies in the Preliminary Contracts;
(3) remedies which arose from (1) and (2)?
If so, did they provide such advice whether at all or accurately and competently and timeously?
Planning Permission
What was the position regarding the planning permission for JoTS?
What did D know about the planning permission and what ought they reasonably to have known?
Was D duty bound to give C any information or advice about the position regarding planning permission and if so what?
TOURIST DESIGNATION
What legal restrictions, if any, apply to C's abilities to live in, sell or rent out the properties?
What did D know about those restrictions and what ought they reasonably to have known?
Were D duty-bound to give C any information or advice about the above restrictions and if so what?
Is it the case that (as to the Main Development at JOTS):
(1) from the outset, the land on which the Main Development was to be constructed was designated as "turistico residenziale" and, if so, what was the legal and practical effect of that designation?;
(2) A further restriction was subsequently imposed, restricting resale of properties to "non-Italian residents"?
As to the designation "turistico residenziale", should D have informed C (who were non-resident and non-Italian) of this designation prior to their signature of the preliminary contract.
As to the restriction of sales to "non-Italian residents" which was subsequently imposed, was it a possible or probable occurrence even if/though it had not yet occurred at the time of the signing of the preliminary contracts?
Should D have informed C (who were non-resident and non-Italian) of the risk that such a restriction might be imposed on JOTS, before they signed the preliminary contracts or transferred the deposits to D?
Advice not to proceed
Should C have been advised by D not to proceed with the purchases? If so, at what stage should that advice have been given?
Breaches of Duty
What if any duties in tort, contract, trust and/or fiduciary duties did the above matters give rise to?
Did G&L/ GL LLP owe the following duties of care to C:
(1) to advise that a deposit of 50% was unusually high and the normal deposit was between 5% and 10% of the purchase price;
(2) to enquire and/or advise as to why such a large deposit was being sought, and/or consider the implication that the developer lacked capital;
(3) to advise C to negotiate a lower deposit and/or payment by stage payments;
(4) to draft the Preliminary Contract so that the preliminary deposit was credited towards the Deposit rather than the final purchase price; alternatively, to advise C to negotiate that the preliminary deposit be credited towards the Deposit;
(5) to advise as to the possibility of registering the Preliminary Contract against the land and the advantages of doing so;
(6) not to release the Deposit before the Preliminary Contract was in place/ before the Guarantee had been obtained;
(7) not to release the Deposit to a different party than the recipient named in the Preliminary Contract;
(8) to advise that the Guarantee was not issued by an appropriate Institution as required by Italian Law;
(9) to advise that the Guarantee expired before the contractual completion date and/or there was no enforceable obligation to renew it;
(10) to give adequate advice as to the circumstances in which C could recover under the Guarantee;
(11) not to advise that the insolvency of the developers was unlikely without making adequate enquiries as to the financial standing of the developers and the risk of their insolvency;
(12) to advise about the potential for a large number of claims to be made (given the size of the developments) and the risk that the developer would not be able to meet those claims;
(13) to advise that the vendor under the Preliminary Contract did not own the land but was an agent, and as to the risks that presented;
(14) in the case of GL LLP, to review G&L's conduct and discover any breaches of duty or want of care by G&L, (ii) to take reasonable care to remedy any breaches of duty or want of care by G&L, or (iii) to notify C of any breaches of duty or want of care by G&L and (iv) counsel C to take independent advice.
(15) to take reasonable care to remedy any breaches of duty or want of care by G&L;
(16) to notify C of any breaches of duty or want of care by G&L and counsel C to take independent advice.
(17) to advise that a substantial part of the deposit was immediately payable as commission to the promoters of the development and/or as to the implications (a) that part of the deposit would not be available to the developers to commence the development and/or (b) that the value of the completed property might be less than the purchase price.
Did G&L/GL LLP owe the following further duties of care to C:
(1) to advise that adequate planning permission was not in place and the risks this entailed and the likelihood that the development would be delayed;
(2) to advise that the development is designated as a Tourist Development, preventing C from using the property as their main residence and limiting their ability to sell it;
(3) not to incorrectly advise in the RoT that C would not be required to complete until a Certificate of Habitability was provided, in circumstances where the Preliminary Contract provided the opposite;
(4) to advise that the Preliminary Contract did not make time for completion of the essence or provide a means for C to terminate the contract in the event of delayed completion of the development;
(5) In cases where they had received a request from C to extend the Guarantee, to take steps to ensure that that was done;
(6) to ensure that an Addendum to the Contract varied the completion date, or advise C appropriately.
Did G&L/ GL LLP owe the following fiduciary duties to C:
(1) not to act when they had a conflict of interest because of their relationship with the vendors/ developers/ promoters of the development;
(2) to refuse to act when the Mandates bound them to deal with the Deposits in accordance with the Mandates;
(3) to disclose the Mandates or the obligations and consequences they gave rise to to C before the commencement of the retainer;
(4) in default of the duty at (3), a continuing further duty to disclose the said documents at all material times thereafter;
(5) not to draft the Preliminary Contracts on the instructions of the vendors/ promoters rather than pursuant to instructions from C;
(6) not to draft Preliminary Contracts that were unduly favourable to the vendors/ developers/ promoters and unduly unfavourable to C;
(7) to in fact draft the Preliminary Contracts when they had told C that they would do so.
(8) to negotiate the terms of the Preliminary Contracts;
(9) not to allow themselves to be influenced by the interests of the vendors/ developers/ promoters and/or not to improperly prefer those interests to the interests of C;
(10) not to make an undisclosed profit;
(11) not to act when there was a conflict of interest;
(12) not to prefer the interests of the vendors/ promoters by paying all or parts of the deposits to them when their duties to C required them not to or to disclose that they had agreed to do so.
Did G&L/GL LLP owe C the following further duties in trust, contract tort and/or as fiduciary duties:
(1) In the case of G&L, a duty to replace C's money into its client account where it had been paid away in breach of the SAR 1998 prior to the Novations;
(2) In the case of GL LLP, a duty to replace that money where it had been paid away in breach of the SAR 1998, whether paid away by G&L prior to the Novations.
Causation
Were G&L/ GL LLP duty bound to remedy their breaches of the SAR 1998 by replacing C's deposits into their client account?
Assuming the correctness of C's case as to how they would have behaved but for the matters complained of, are any of the alleged breaches of duty and trust capable of having caused C's losses?
Did any of C's losses fall within the scope of D's duty to C?
Limitation
Did D deliberately conceal matters so as to give rise to any extended limitation periods pursuant to s.32 Limitation Act 1980?
Remedies
Assuming C prove liability and causation:
(1) What heads of damage are they entitled to recover in principle? Without prejudice to the generality of that issue do those heads include:
i. The loss of their Deposits – on the basis that the developments and/or properties they contracted to purchase have not been completed, but the vendors/ developers have not and/or are unable to refund the Deposits, and the Guarantees are ineffective.
i. The loss of their preliminary deposits/ 'accontos';
ii. Wasted expenditure incurred in visits to Italy;
iii. Additional costs and interest incurred through the borrowing of monies to raise the funds to pay the Deposits;
iv. Additional Italian legal costs incurred in relation to the contract.
(2) To what remedies are the C's entitled in principle including without prejudice to the generality of that issue :
i. Equitable compensation for breach of trust or fiduciary duty;
ii. An order for specific performance requiring GL LLP to comply with any obligations under Rule 7(1) of the SAR 1998;
iii. An order for an account and inquiry as to any undisclosed profit made by G&L/ GL LLP and an order that that sum be paid to C;
iv. An order that G&L/ GL LLP do account for the Deposits;
v. Restitution of the fees paid to G&L/ GL LLP[8]?
vi. Interest under s. 35A of the SCA 1981, or in equity
(3) To the extent that compensation is payable,
i. should it be in euros or pounds sterling
ii. is it necessary to determine the date of exchange from euros to sterling, and, if so
iii. on what principles what should the relevant date be determined?
APPENDIX 2
THE GUARANTEES
First Guarantee Second Guarantee Third Guarantee Third Guarantee Third Guarantee Third Guarantee Third Guarantee Third Guarantee Third Guarantee
Claimant Issuer From To Issuer From To Issuer From To
Marsden/Campbell GF[9] 12.09.08 12.09.09
Barton/Kavanagh[10] IF[11] 01.04.08 31.03.09 F[12] 27.03.09 31.12.10
Manning IF 21.04.08 20.04.09
Wootton 01.08.07 F 27.03.09 31.12.10 A[13] 19.04.12 30.06.13
O'Connor GF 18.06.08 18.06.09 P[14] 18.12.09 18.12.10
Rawson SF[15] 18.05.07 17.05.08 F 27.03.09 31.12.10
Corry IF 15.04.08 14.04.09
Cleere IF 05.02.08
19.12.07 04.02.09
18.12.08 F 27.03.09 31.12.10
Ballard IF 04.12.07 04.12.08
Ormay IF 04.10.07 04.10.08 F 27.03.09 31.12.10 A 19.04.12 30.06.13
Nambiath IF 01.04.08 31.03.09 F 27.03.09 31.12.10
Noel IF 19.11.07 18.11.08 F 27.03.09 31.12.10 C[16] 20.11.11 20.11.12
Appendix 3
Supplemental Judgment
I have introduced the issue to which this Supplemental Judgment relates in paragraphs 419 and 420 of the substantive judgment. For the reasons I endeavoured to set out in those paragraphs, I do not consider that the issue of what, if any, compensation would be payable if a breach of trust in the manner set out in that section of the judgment has occurred is likely to arise in this case. In my judgment, it would arise only if the sole basis of a claim against the firm was breach of trust. For reasons given elsewhere in the substantive judgment, I am satisfied that other breaches of duty occurred (antecedent to any breach of trust arising from the payment out of the deposits) that are likely to have greater potency in terms of compensation than a claim based upon pure breach of trust in the manner alleged.
At all events, both Mr Flenley and Mr Majumdar have asked me to express my conclusion on the issue which, with some reluctance, I will do briefly.
As I understand it, the issue of law that Mr Flenley raises in a general sense would arise in any case only if it could be demonstrated as a matter of fact that, despite the occurrence of
a breach of trust, events had taken place subsequent to that breach that resulted in the "victim" of the breach of trust sustaining no loss or a loss that would have been sustained irrespective of the breach of trust. It is based upon the factual premise in the present case that, despite paying out a deposit initially when there was no compliant guarantee in place, subsequent to that event a compliant guarantee was put in place with the result that the purchaser was in reality no worse off. The alternative assertion is that, even if there was never any effective guarantee in place, it did not matter because no event has arisen that would in fact have triggered successful recourse to a valid guarantee.
The first response to these issues is to repeat that, on the basis of my conclusions in the substantive judgment, the first of these two scenarios has not been demonstrated. As Mr Majumdar rightly observed in his closing submissions, there has never been a compliant guarantee in place in any of the exemplar cases. Although "replacement" guarantees were issued (see paragraphs 128 and 409 of the substantive judgment), they have not been demonstrated to my satisfaction to have complied with Decree 122 of 2005 which is the governing Italian statutory provision. That, to my mind, is another reason for treating this issue as academic, although I recognise that there might be a different factual scenario in other (non-exemplar) cases though it would have been helpful to have had such a case as one of the exemplar cases if that was to be asserted.
However, notwithstanding that view, I will address the issues to which I have referred on the basis that, in a given case, a fully compliant guarantee was put in place after the deposit was paid out in breach of trust. I emphasise that I do this on the basis (contrary to my general conclusions) that this is the sole ground upon which the firm's conduct of these transactions can be criticised. Equally, I will address the secondary argument of Mr Flenley that even if there was a breach of trust by paying out the deposit monies when there was no effective guarantee in place, no loss has arisen since, even had an effective guarantee been in place, no event triggering the right to recourse under any such guarantee has occurred.
I do not propose to extend this Supplemental Judgment by making extensive citations from the principal cases of Target Holdings Limited v Redferns [1996] AC 421 and AIB Group (UK) PLC v Mark Redler & Co. [2014] 3 WLR 1367. It cannot be doubted that the approach adopted in the former case proved to be controversial and the decision attracted criticism. However, the Supreme Court in the latter case affirmed the principle established in Target Holdings and there can be no doubt that when the principle falls to be applied it must be applied. That is, of course, accepted by Mr Majumdar.
I hesitate to formulate in my own words the combined effect of these two cases, the speeches and judgments in which are extensive and, in some respects, complex. However, in the broadest summary, the issue of the redress for any beneficiary for breach of trust in any situation similar to that presented in this case is dependent upon the circumstances and, most significantly for the purposes of Mr Flenley's argument, is not necessarily restricted to focusing upon the moment immediately after the breach of trust has occurred with an expectation of a restoration of the trust fund. It is to be looked at when the issue is determined at trial with the full benefit of hindsight. That approach does not preclude the possibility of restoration of the fund, but its purpose is to ensure that, in a case such as the present, the firm is not responsible for a loss that would have been occasioned even if the trust obligation had been performed.
Mr Flenley contends that, looking at the issue with the benefit of hindsight, the subsequent provision of a compliant guarantee that would have been effective to enable recovery of the deposits in accordance with Decree 122 of 2005 results in the conclusion that no compensation for breach of trust would be payable. In that situation the purchasers would, he argues, have obtained, albeit late, that which they were entitled to expect the firm to have secured for them and no loss arising from the failure to implement the trust could consequently be established. As I have said, however, at the trial the subsequent provision of compliant and valid guarantees was not established so that the issue, in my judgment, does not arise. If a valid and compliant guarantee was put in place after the deposits had been paid out, the issue is whether, notwithstanding the breach of trust, compensation would be payable.
Mr Majumdar's argument is that the terms of the trust that bound the firm in this case were simply that the deposits should not be paid out unless and until a compliant guarantee was in place and that since that situation never arose the proper performance of the trust obligations would never have led to the monies being paid out. Accordingly, he submits that the firm is accountable for the monies thus paid out. As I understand his argument, it is that, trust monies having been misapplied, the trustee (here the firm) must restore the trust fund to the position it would have been in if the firm had performed its obligation: see [90-94] and [134] in AIB v Mark Redler. In the situation where, as I have found, there never has been a valid and effective guarantee, that seems to me to be correct. The practical effect may be no different from simply saying that the beneficiary (here the relevant purchaser) should be compensated directly for the consequences of the breach of trust, but I am prepared to hold that the analysis for which Mr Majumdar contends is correct and that, accordingly, the purchaser was entitled to be put in the position that he/she would have been in if the terms of the trust had been implemented.
The final issue is whether, on the basis that there never was a compliant guarantee in place at any stage, the claimants are any worse off given that no event triggering recourse to the guarantees has in fact taken place (see paragraph 133 of the substantive judgement). Mr Flenley's argument seems to me to be to the effect that a claim for compensation (however formulated) in such a situation is akin to claiming for a lost opportunity when the opportunity has not been lost. I am not entirely sure that he would need to rely upon Target Holdings to establish that no loss is occasioned in such a situation, but it seems to me to be clear that if a claim is asserted for the lost prospect of reclaiming a deposit because there was no valid guarantee, but no triggering event had occurred, the claim would fail.
However, at the risk of repetition, I do not see this as the way in which this claim is advanced, whether formulated as a breach of trust or as a breach of a contractual or tortious duty. The claimants say that they were not told, prior to committing themselves to the preliminary contracts, that the guarantees were non-compliant and thus not effective. The issue, therefore, in individual causation terms is whether that fact (possibly in addition to other matters about which, according to my conclusions in the substantive judgment, they ought to have been told, but were not) would have resulted in a decision not to proceed at all or in a re-negotiation of the terms of the preliminary contract to make them more acceptable to the purchaser. If he/she had not proceeded at all, he/she would not have been exposed to the risk of losing the deposit or the re-negotiated terms would have been such as to protect the purchaser more effectively.
7 July 2015
Note 1 ‘Unfortunately, Calabria is total chaos and there are problems with every single development,’ he says. ‘They are either late, or they have not started, or the developer has gone bust. No sooner do I fix one problem than another comes along.’
[Back]
Note 2 “Main” happens to be the surname of the first Claimant represented by Pennington Manches – it has nothing of itself to do with “the Main Development”. Indeed Mr Main was purchasing a property in the El Caribe development. [Back]
Note 3 Katy Beatty, described by Mr Klingenbergs as the Office manager at Brancaleone when there was an office there and as a case worker by Avvocato Giambrone. She signed e-mails in 2008 as the “Client Services Manager”. [Back]
Note 4 Kierran Klingenbergs, currently the Office Manager of the Palermo office. From January 2008 he transferred to the Vibo office and was working there at the time of this letter. [Back]
Note 5 This issue was wrongly numbered in the sequence, but the numbering has been retained for convenience. [Back]
Note 6 Although this was a live issue, the allegation was not pursued because there was no evidence that the defendants made any such profit. [Back]
Note 7 This is acknowledged no longer to be relevant. [Back]
Note 8 This is not pursued. [Back]
Note 9 GF = Gioia Fin [Back]
Note 10 The first guarantee provided was for half of the amount of the deposit. A further guarantee covering the other half of the deposit was provided from Gioia Fin, which was valid (on its face) from 12 November 2008 to 12 November 2009. The guarantee referred to in the “second guarantee” column was for the full amount of the deposit. [Back]
Note 11 IF = Industria e Finanza [Back]
Note 12 F = Fingeneral [Back]
Note 13 A = Agricolfidi Abruzzo [Back]
Note 14 P = Puntofin [Back]
Note 15 SF = La Stella Finanziaria [Back]
Note 16 C = Crediconsumo [Back]
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Mr Justice Edis:
In this case Ms. Elizabeth Watson has appeared before me to seek an interim injunction against "Eversheds LLP and their agents (inc Paul Mitchell, Hailsham Chambers)". In the course of a lengthy hearing I heard from her, from Mr. Christopher Coomber and Ms. Sheila Oraki, whom I permitted to speak on her behalf. They told me that they believe she has a real complaint of injustice and that they fear for her health if she is not given more time to advance it. I did not hear from the claimant's husband for whom, I was told, she acts under an "assignment". I would not, quite apart from any other consideration, grant any order in his favour on this basis. Interim orders require undertakings and I am not convinced that I could properly accept one from Ms. Watson given on his behalf. If, in due course, she issues proceedings, or he wishes to do so, they may wish to consider this aspect further. I have reserved judgment and issued it in written final form by email with a copy to the County Court at Winchester and to Eversheds for reasons which will become obvious. It is important that my conclusions and reasoning are clearly recorded and rapidly available without the need for a transcript to be commissioned. It will be formally handed down for the purposes of open justice on Friday the 17th July 2015 at 09:30am. There will be no time for any hearing on that occasion and no attendance is required by any party.
No claim form has been issued against the proposed defendants, and no-one has been served with any notice of this hearing, nor has Ms. Watson produced a draft Order. There is no written application for an order which Ms. Watson asks me to make. Given the way in which the proposed defendants are described (see above) this presents some difficulty in ascertaining who, exactly, would be subject to any injunctive order. From paragraph 43 of her witness statement dated 14th July 2015 it appears that she seeks:-
i) An order suspending a possession order made by District Judge Dancey on 1st July 2015 whereby he refused to adjourn a trial, dispensed with the requirement that the claim form in proceedings before him be sealed, and granted a possession order in favour of the Bank of Scotland PLC ("the Bank") in respect of 3 Roslin Road, Talbot Woods, Bournemouth ("the Property"). He also ordered the defendants in those proceedings (the claimants in the application before me) to pay £430,022.82 to the Bank.
ii) A non-molestation order to ensure that no further harassment may be permitted to occur to the claimant or other family members (especially her daughter Louise) within 100 metre radius of the Property.
She seeks an order that these interim injunctions should continue "until such time that the outcome of the fresh claim to impeach the judgment handed down is known and until such time that there has been a full enquiry and investigation conducted in to the many very serious issues surrounding this long-standing and protracted matter which has had a deleterious effect on our lives since its inception nearly 7 years ago". Obviously, that is far too long a time period and its termination is insufficiently certain for it to be possible to grant an injunction in such terms. Ms. Watson wishes there to be a criminal investigation into her complaints. I have no power to order such a course of action, nor do I have any reason to believe that any investigating body intends to take any such action.
Ms. Watson claims that Eversheds have manipulated the court process and conspired with a large number of other people, including some judges, to procure the possession order by fraud. She says that they have purported to do this on behalf of the Bank although she contends that they have no instructions from the Bank and should not be acting. She says that they are "interlopers" who have conspired with judges and others to steal her home from her. Ms. Watson will have to decide whether to issue a claim form setting out this, on the face of it, somewhat unlikely claim.
The proposed claimants issued an application on 26th June 2015 for an injunction restraining Eversheds from continuing to advance the claim for possession on behalf of the Bank "on the ground that it has been confirmed by the Bank that no instructions have ever been given to issue such proceedings and that they must immediately withdraw their claim issued in the Bournemouth County Court under the name "Bank of Scotland plc" pending the claimants' claim against them for fraud upon the court." That application was not heard because although it was listed for hearing on 2nd July 2015 (after the possession order had been made) the claimant applied for an adjournment on the ground of ill-health and this was granted on the morning of 2nd July 2015. On the previous day, 1st July 2015, the Listing Officer of the Queens Bench Division emailed Ms. Watson pointing out that a possession order had been made that morning and that the Judge before whom the application was listed had said "if you wish to challenge this, the correct course is to appeal that order". On 10th July 2015 she emailed HH Judge Hughes QC at the Winchester County Court expressing her dissatisfaction with proceedings and setting out her case. On the same day she copied that email to the QBD listing officer saying
"Obviously I need to get an Appeal lodged with a stay on the possession order pending a criminal investigation and a private criminal prosecution, and so I would request directions as to whether I should obtain this from the High Court Chancery or QB Division or from the Winchester County Court?.
"Last year in 2014 I was also invited by the Registrar at the Supreme Court, Louise di Mambro, to re-open the Judgment of January 2013 at the High Court of Appeal, on the basis that it was obtained through fraud on the Court on an invalidly brought possession claim which was never sealed by the Court and therefore could not proceed. There are multiple other aspects of fraud on the court, too numerous to go into detail here. On this basis I will also be submitting an Appeal against the Order of Jan 2013 "out of time" because I hold compelling evidence to justify this appeal.
"I will also be taking up the ex parte Injunction hearing and would be grateful if the court would confirm that I may attend this coming Monday next week at 2pm? If not, Tuesday at 2pm? Please let me know."
Despite this, she has confirmed to me today that she has not issued a Notice of Appeal. In the course of submissions, particularly when I was addressed by Ms. Oraki and Mr. Coomber, it became clear that what they really wanted was an extension of time for the enforcement of the possession order to enable her to formulate her claims properly. An interim application without notice in a proposed action for fraud against the solicitor of the judgment creditor is not a suitable vehicle for such an application. I pointed this out during the hearing on several occasions and this clearly caused some frustration which resulted in Ms. Watson accusing me of being corrupt. I terminated the hearing and left court because I feared that she would continue in such behaviour and this might ultimately lead to a situation where the level of contempt became difficult to overlook. It seemed unkind to risk provoking such a situation and I was certain that I had heard everything which might assist me, and more besides. I mention this because Ms. Watson has a habit of describing the behaviour of Judges at hearings in her cases and citing it as proof of their involvement in a conspiracy to harm her. She refers, for example, to His Honour Judge Meston QC at a hearing in September 2014 as "trembling", looking frightened, as if he had been threatened.
Her tendency to allege that anyone who does not immediately agree with her is corrupt and "in on the conspiracy" to steal her home may possibly alienate some tribunals and may result in court staff refusing to deal with her. She certainly alleges that she has had communication problems with courts in the past. I felt that her sense of grievance was genuine, by which I mean that she genuinely feels that she has been wronged. I do not mean to say that I have decided she is right. I am not able to determine the merits of the original dispute about the debt on which this possession order is based. There has been a very long procedural history in this case and I accept that her health has been affected from time to time. A great deal of what she says is patent nonsense and it is very difficult for a Judge in circumstances of this kind to identify any merit there may be in anything she says. It does not follow that because a lot of what she says is nonsense that it all is. She is a litigant who is very vulnerable because she is quite unable to refrain from making grandiose and groundless allegations of dishonesty against everyone who does not immediately side with her. This is a very good way of hiding any meritorious point she may have. I think that the decision of Knowles J which I refer to below is based on a similar feeling.
Procedure
Where it is alleged that a judgment was obtained by fraud Noble v. Owens [2010] EWCA Civ 224 suggests that the proper course is to issue an action in which that fraud can be proved, rather than to appeal. No doubt there is power in the context of such an action to make an order that enforcement of the order concerned should be stayed. The position may not be clear in a case such as this where procedural failings are relied upon which are more properly the subject of an appeal. The very wide nature of Ms. Watson's claims means that some may be more suited to determination in an action for fraud, and others in an appeal. Of course, where an appeal is lodged, there is machinery to stay the effect of the order pending determination of the appeal. In this case, the complaints made before me on this application are against Eversheds and others and these appear to be such as can only be advanced by a fresh claim. Whether Ms. Watson also (or instead) seeks to issue an appeal to which the Bank would be a party in order to litigate those complaints of hers which may be capable of being addressed within an appeal is a matter for her.
My recent experience in the applications list in the Queens Bench Division suggests that professional litigators as well as self-representing parties have developed a practice of issuing applications ex parte and before issue of a claim form as if this were the normal way of proceeding. It is not. The default position is that interim remedies are granted within existing proceedings. The default position is that they are granted after notice has been given to the person against whom they are sought and after service of the claim form on that person. Those default positions can (and very often are) be varied where good cause is shown, but each variation needs to be justified and considered separately. Where, as here, the claimant comes without having issued proceedings, without serving proceedings, and without giving notice to the other party or parties there is a series of issues to be addressed before any order at all can be made:-
i) Why has no claim form been issued? Is it appropriate to consider granting an order on an undertaking to issue and serve proceedings forthwith? Is there sufficient urgency to justify this course, and what is the likelihood that a claim form will come into existence in such a form that it can lawfully be issued within that time frame?
ii) If the application is entertained before issue, why is it being pursued without notice? There must be a substantial justification for that before the application will be heard, still less granted.
This case
I have set out a little of the procedural history above. It appears that the claimant considered setting aside an order for fraud in 2014, because in an email to the court she refers to her discussions with the Registrar at the Supreme Court, Louise di Mambro to that effect. On 31st March 2015 she assisted her sister in proceedings brought against her in similar proceedings by the Bank. Knowles J granted her sister permission to appeal in a judgment given on that date with a neutral citation reference [2015] EWHC 921 (QB). Very similar issues appear to be involved in those proceedings to those which she wishes to raise now. She later (on 26th June 2015) issued an application for an injunction before issue of proceedings on the basis that Eversheds were acting without instructions and referred in her application to her "pending claim against them for fraud upon the court."
There is still no claim form. There is no proper basis on which to entertain this application without a claim form and I decline to do so. There is no urgency demonstrated in circumstances where the claim was said to be "pending" nearly three weeks ago when the first application for an injunction against Eversheds was made.
Further and in any event this state of affairs is accurately described by Ms. Watson as a "long-standing and protracted matter" in which she has known of her suggested grounds of complaint against Eversheds for a considerable period of time. She has also made those grounds plain to them already. There is therefore no element of secrecy or urgency which would justify the court considering this application in the absence of the person against whom it was made. I decline to do so.
Finally, Ms. Watson has not dealt with the cross-undertaking in damages. I have no evidence on the basis of which I could be satisfied that she would be able to pay any sums which may be held to be due from her as a result of the making of this order.
I have not adjudicated on the merits of this application applying American Cyanamid v. Ethicon [1975] AC 396. If Ms. Watson issues proceedings and seeks an order this issue will have to be addressed. The court will have the benefit of evidence and argument from both sides in deciding whether there is a serious issue to be tried. The application before me is an application which seeks an order against Eversheds preventing the enforcement of a judgment which stands in favour of the Bank. If Eversheds were restrained from enforcing the judgment, the Bank would be free to do so providing it did not procure a breach of the injunction by Eversheds. On the face of it, it therefore appears to be misconceived.
I suspect that where she refers to an "invitation" from the Registrar to re-open a judgment (see above), Ms. Watson has misunderstood a ruling that a particular procedure exists as meaning that it might be wise to use it. Of course it means no such thing. If Ms. Watson pursues a claim properly it will be judged on its merits. If it fails the usual costs consequences are likely to follow and the court will consider whether it was totally without merit.
The application to me is totally without merit because it could not possibly result in any order being made for the reasons which I have given.
I now turn to the revised application which was made orally which was, as I have said, really for an extension of time in which to appeal. I have sympathy with this in principle. Ms. Watson strikes me as a person who is struggling with this litigation, despite her obvious commitment to her cause. I have seen some medical evidence about her daughter who was admitted to hospital on the evening of the first day of the two day trial which resulted in the order of the 1st July 2015. The order requires her to give vacant possession on 29th July 2015, a day after her time for appealing expires. It appears to me that she has a right to issue a notice of appeal against that order and to have the issue of permission determined by the County Court. I have referred above to the difficulties involved in dealing with Ms. Watson who is very free with her allegations of corruption. I trust that if she presents a notice of appeal and an application for an extension of time pending its determination in a form which can properly be issued within the time limit it will be issued and referred for consideration by the Circuit Judge. She told me that she had been refused permission to appeal because it would be a second appeal. I do not know what she was referring to, and any observations I make are expressed on the limited basis of what I know.
I am not going to grant an extension of time for the issue of a notice of appeal because Ms. Watson made clear to me in oral argument what grounds she wishes to raise, and is no doubt equally capable of doing so in writing. She still has two weeks before the possession order takes effect in order to issue a notice of appeal and to seek an extension of time for enforcement pending determination of the appeal. She has known of the order since 1st July 2015 or, as she says, the 4th July. Her email of 10th July set out at paragraph 5 above shows that she has known of the need to appeal since at least then and if she had attended to that rather than wasting her time seeking a without notice injunction against a firm of solicitors she could have done it by now.
Not everything which she wishes to say about the judgment of the 1st July 2015 is capable of being adjudicated on in an appeal, as opposed to an action for fraud, but some of it is. In essence, it appeared to me that her complaints about the judgment of 1st July 2015 which might form the basis of an appeal are
i) That a disclosure order made by Judge Meston QC in September 2014 was never complied with by the Bank perhaps because District Judge Dancey had in some way cancelled it.
ii) That there is no jurisdiction to hear a claim unless a claim form has been issued and the absence of a sealed claim form suggests that it had not been issued. This, she would say, was a defect which could not properly be rectified under CPR 3.10.
iii) That she had inadequate notice of the hearing and was denied the opportunity to call witnesses. Apparently 8 attended to give evidence. Naturally the court will have given directions about evidence and I do not know what they were or whether any application for relief from sanction was made or what happened to it. She contends that the trial should have been adjourned.
iv) That she was absent from the second day because her daughter had been admitted to hospital overnight. I have seen evidence which suggests that this is true. I do not know on what basis the District Judge decided to continue the hearing in these circumstances or what steps were taken to ensure that the proceedings were fair despite her apparently excusable absence.
v) That the Judge should have recused himself because he had shown bias as a result of previous dealings with the case.
vi) That the conduct of the hearing was not fair.
vii) She would also wish to argue that the result of the hearing was wrong in fact in that she did not owe the Bank any money and there was no charge on her house.
By identifying these complaints I do not mean to suggest that there is force in them or what the result may be of any appeal proceedings. I have merely attempted to distil my understanding of her case as advanced before me, stripping out the more extreme allegations of conspiracy which would have to be pursued, it seems to me, by an action rather than an appeal.
I have indicated to Ms. Watson that I cannot presently see any basis on which any court is ever going to make any order in this case unless notice of an application has been given to the other side. It was while I was explaining that the obligation to hear both sides is fundamental to justice that she first accused me of being corrupt. I refer to the need to give notice in this written judgment so that there can be no doubt that she understands that in this respect the law which applies to every other litigant equally applies to her. If she applies again without giving proper notice she must show good reason for doing so. If she fails to do that she will not be heard and the application will probably be certified as being totally without merit.
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His Honour Judge Martin McKenna:
Introduction:
This is the Defendant's application for summary judgment pursuant to CPR 24.2 (a) (i) in respect of the whole of the claim on the basis that the Claimants have no real prospect of succeeding in their claim. The application is supported by the first witness statement of Ms Melissa Danks dated 17th December 2014 and is opposed by the Claimants, who rely on the witness statement of Mr Andrew Anthony Hickman dated 16th February 2015.
In its Application Notice, in addition to applying for summary judgment, the Defendant also sought an order that the Second Claimant, Genesis Range Company Limited, ("Genesis") should give security for costs. However in view of the evidence filed on behalf of the Claimants, that application is no longer pursued and I need say no more about it.
Following the hearing I invited submissions on two specific points. I am grateful to both parties' counsel for their submissions which I have read and considered. Given that neither party was attracted by the suggestion of an adjournment, I have rejected that suggestion and propose to say nothing further about the two specific points which I raised.
Background
At all material times Mr Jon Williams, ("First Claimant"), was the sole shareholder in a company called Vital Industries Limited ("Vital"). That company in turn had two subsidiaries called Arc Aluminium Limited ("Arc") and Arc Aluminium Services Limited ("Services").
Over the years, the First Claimant had developed a range of window and door products the intellectual property rights to which he wished to extract from Vital at the same time as effecting a sale of Vital. Those rights ("the Rights") were in fact owned by Arc.
Genesis is a company which was specifically incorporated with a view to being the vehicle into which the Rights were to be transferred.
In or about April 2012 the First Claimant agreed to sell his shares in Vital, Arc and Services to Firstmain Investments Limited ("Firstmain") on the following principal terms:-
i) A payment to the First Claimant of £265,000 comprising £170,000 in cash together with deferred consideration of £50,000 to be paid by means of 18 monthly instalments.
ii) A repayment by the First Claimant of his loan account (quantified at £57,623)
iii) Genesis, as the First Claimant's nominee, was to purchase from Vital for the sum of £45,000 the Rights and would then licence their use back to Vital.
The First Claimant instructed the Defendant to act on his and Genesis' behalf in the sale of his shares in Vital, Arc and Services to Firstmain, the purchase of the Rights and the granting of the licence from Genesis back to Vital.
The Defendant produced a series of drafts of the documentation designed to put into effect the agreement negotiated between the Claimants and Firstmain namely a Share Purchase Agreement ("SPA"), by which the First Claimant sold his shares in Vital to Firstmain, an Assignment by which Vital and Arc assigned the Rights to Genesis (" Assignment") and a Licence ("Licence") by which Genesis was to licence Firstmain to use the Rights in much the same way as Vital had previously used them, but which nevertheless permitted Genesis to seek to exploit them in new ways.
Negotiations on the form of the various agreements were conducted by Mr Adrian Leonard of the Defendant on behalf of the First Claimant and Genesis and by David Goulding on behalf of Firstmain. At a late stage in those negotiations, on or about 3rd July 2012, Mr Leonard and Mr Goulding agreed, apparently without advising or taking instructions from the First Claimant, that the £45,000 nominally due from Genesis to Vital under the Assignment did not need to be recorded as part of the purchase price because it was too cumbersome to require Genesis to pay £45,000 to Vital only for Firstmain to pay £45,000 immediately to the First Claimant. Instead, they agreed that the purchase consideration ought to be referred to in the SPA as simply the sum of £170,000 plus the value of the First Claimant's outstanding director's loan (£57,623) that is to say a total consideration of £227,623. Moreover, given that the director's loan was being repaid by the First Claimant, the actual cash sum changing hands from Firstmain to the First Claimant on completion was agreed to be £170,000. Firstmain however remained under an obligation to pay the First Claimant the deferred consideration of £50,000 over 18 months.
The sale of the First Claimant's shares was completed on 5th July 2012 with the execution of the finalised documents namely the SPA, the Assignment and the Licence.
Unfortunately the SPA, at clause 4.2, continued to include the following provision:
"The seller (the first Claimant) shall:-
(d) Procure the entry of the Genesis Range Company Limited (Genesis) into the licence and the payment to the Company of the Transferred IP Payment (i.e. the sum of £45,000 payable by Genesis to Firstmain pursuant to the Assignment)."
Subsequently the First Claimant and Genesis commenced negotiations to permit Thyssen Krupp Materials (UK) Ltd ("TKM") to develop and market products using the Rights and in early 2013 agreement in principle was reached with TKM for the use by TKM of the Rights and the payment of commission/royalties by TKM to the First Claimant and or Genesis.
Firstmain defaulted on paying the deferred consideration and in early 2013 the First Claimant wrote to Firstmain demanding payment of the deferred consideration and royalties said to be due under the Licence. Firstmain responded alleging that the Assignment had been ineffective to transfer the Rights to Genesis and that they therefore remained vested in Arc as a result of a failure by the First Claimant/Genesis to pay the sum of £45,000 in respect of the Rights and that accordingly no further payments were due from Firstmain to the First Claimant.
The solicitors acting for the First Claimant and Genesis notified the Defendant of the problem and sought their assistance and also sought to resolve the dispute with Firstmain but without success. As a result TKM withdrew from its agreement with Genesis and/ or the First Claimant.
In this action Genesis asserts that the reason why it was unable to enter into what it says would have been a very lucrative agreement with TKM for the exploitation of the Rights was the defective drafting of the SPA and damages in excess of four million pounds are sought.
Legal Framework
CPR 24.2 is in these terms:-
"The court may give summary judgment against a claimant or defendant on the whole of a claim or on a particular issue if -
(a) it considers that –
(i) that claimant has no real prospect of succeeding on the claim or issue;…and
(b) there is no other compelling reason why the case or issue should be disposed of at a trial.
(Rule 3.4 makes provision for the court to strike out a statement of case or part of a statement of case if it appears that it discloses no reasonable grounds for bringing or defending a claim)."
In this case it is not suggested that Rule 24.2 (b) is engaged.
There is a useful summary of the applicable principles for exercising this jurisdiction in Easy Air Ltd - v – Opel Telecom Limited [2009] EWHC 339 (Ch) in the judgment of Lewison J (as he then was), which was subsequently approved by Etherton LJ in AC Ward and Son – v – Catlin (Five) Limited and others [2009] EWCA Civ 1098:-
"15. As Ms Anderson QC rightly reminded me, the court must be careful before giving summary judgment on a claim. The correct approach on applications by defendants is, in my judgment, as follows:
i) The court must consider whether the claimant has a "realistic" as opposed to a "fanciful" prospect of success: Swain v Hillman [2001] 1 All ER 91 ;
ii) A "realistic" claim is one that carries some degree of conviction. This means a claim that is more than merely arguable: ED & F Man Liquid Products v Patel [2003] EWCA Civ 472 at [8]
iii) In reaching its conclusion the court must not conduct a "mini-trial": Swain v Hillman
iv) This does not mean that the court must take at face value and without analysis everything that a claimant says in his statements before the court. In some cases it may be clear that there is no real substance in factual assertions made, particularly if contradicted by contemporaneous documents: ED & F Man Liquid Products v Patel at [10]
v) However, in reaching its conclusion the court must take into account not only the evidence actually placed before it on the application for summary judgment, but also the evidence that can reasonably be expected to be available at trial: Royal Brompton Hospital NHS Trust v Hammond (No 5) [2001] EWCA Civ 550;
vi) Although a case may turn out at trial not to be really complicated, it does not follow that it should be decided without the fuller investigation into the facts at trial than is possible or permissible on summary judgment. Thus the court should hesitate about making a final decision without a trial, even where there is no obvious conflict of fact at the time of the application, where reasonable grounds exist for believing that a fuller investigation into the facts of the case would add to or alter the evidence available to a trial judge and so affect the outcome of the case: Doncaster Pharmaceuticals Group Ltd v Bolton Pharmaceutical Co 100 Ltd [2007] FSR 63;
vii) On the other hand it is not uncommon for an application under Part 24 to give rise to a short point of law or construction and, if the court is satisfied that it has before it all the evidence necessary for the proper determination of the question and that the parties have had an adequate opportunity to address it in argument, it should grasp the nettle and decide it. The reason is quite simple: if the respondent's case is bad in law, he will in truth have no real prospect of succeeding on his claim or successfully defending the claim against him, as the case may be. Similarly, if the applicant's case is bad in law, the sooner that is determined, the better. If it is possible to show by evidence that although material in the form of documents or oral evidence that would put the documents in another light is not currently before the court, such material is likely to exist and can be expected to be available at trial, it would be wrong to give summary judgment because there would be a real, as opposed to a fanciful, prospect of success. However, it is not enough simply to argue that the case should be allowed to go to trial because something may turn up which would have a bearing on the question of construction: ICI Chemicals & Polymers Ltd v TTE Training Ltd [2007] EWCA Civ 725."
The Issue
What is said on behalf of the Defendant is that Firstmain's contention that the Rights have not vested in Genesis is, as a matter of law, wrong. Rather the Rights were transferred to Genesis and thus they were capable of being exploited by Genesis. It follows, it is said, that there was no relevant breach of duty on behalf of the Defendant and the losses alleged to have been sustained cannot be said to have been caused, as a matter of law, by the drafting error in the SPA.
The Claimants for their part assert that an important issue is not whether the documents in question did effectively transfer the Rights to Genesis but whether the alleged negligence of the Defendant allowed Firstmain to be able to say to TKM and the Claimants that they were the rightful owners of the Rights and that, in the circumstances, there is a real prospect of the Claimants' succeeding against the Defendant. Those prospects it is said cannot be described as fanciful so that this application should fail.
Discussion
The principles governing the identification of a contractual term as a condition, breach of which may be considered by the innocent party as a substantial failure to perform the contract at all are summarised in Chitty 31st edition, at paragraph 12- 040 (cited with approval by the Court of Appeal in BS&N Ltd (BVI) – v – Mikado Shipping Ltd (Malta) ("The Sea Flower") [2001] [1 Lloyd's Rep 341, at 348, 350 and 353];
"The conclusion to be drawn from these cases is that a term of a contract will be held to be a condition:
(i) If it is expressly so provided by statute;
(ii) if it has been so categorised as the result of previous judicial decision (although it has been said that some of the decisions on this matter are excessively technical and are "open to re-examination by the House of Lords");
(iii) if it is so designated in the contract or if the consequences of its breach, that is, the right of the innocent party to treat himself as discharged, are provided for expressly in the contract; or
(iv) if the nature of the contract or the subject matter or the circumstances of the case lead to the conclusion that the parties must, by necessary implication, have intended that the innocent party would be discharged from further performance of his obligations in the event that the term was not fully and precisely complied with.
Otherwise a term of a contract will be considered to be an intermediate term. Failure to perform such a term will ordinarily entitle the party not in default to treat himself as discharged only if the effect of the breach of the term deprives him of substantially the whole benefit which it was intended that he should obtain from the contract."
It is common ground that the starting point for determining the nature of a contractual term is the context in which it appears. Here that context is supplied by the three agreements to which I have referred, all of which were executed on the same day and which together gave effect to the agreements reached between Firstmain, Vital, Arc, the First Claimant and Genesis.
The relevant clauses of the three agreements are as follows
i) Clause 4.2 of the SPA which provided that at completion of the sale by the First Claimant of his shares in Vital he would cause to be delivered the documents set out in part I of schedule 2 which included the Assignment and the Licence.
ii) The SPA was defined at clause 1.1 as "an agreement between (Vital) and (Genesis) whereby (Vital) agrees to transfer the Rights to (Genesis)"
iii) This Licence was defined in clause 1.1 as "an agreement between (Genesis) and (Firstmain) whereupon (Genesis) licensed certain Intellectual Property Rights in relation to the products known as the Genesis range of products, such rights currently being held by (Vital) (that is to say the Rights)"
iv) Clause 1.1 also included the definition of the "transferred IP payment" as "the sum of £45,000 payable by (Genesis) to (Vital) pursuant to the (Assignment)"
v) By clause 4.1 (d) (as I have already recorded) the First Claimant agreed that upon completion he would also "procure the entry of (Genesis) into the Licence and the payment to (Vital) of the Transferred IP Payment"
vi) The parties agreed that at completion, Vital and the First Claimant would execute and deliver to each other the Assignment and the Licence.
vii) The Recital to the Assignment noted that (by the terms of the SPA) Vital had agreed to assign the Rights to Genesis. Clause 2.1 provided that "pursuant to and for the consideration set out in the SPA (Vital and Arc) hereby assign to (Genesis) absolutely and with full title guarantee all their right title and interest in and to the Assigned Rights and the Assigned Rights are defined as "all the intellectual property rights embodied in the Materials." Vital and Arc also agreed for the same consideration to sell to Genesis all their interest in the "Materials". These were defined as those items listed in the Schedule and consisted of all the dies for the Genesis range products.
It is common ground that for the purposes of this summary judgment application Firstmain's contention that the consideration set out in the SPA meant the "Transferred IP Payment" defined in clause 1.1 of the SPA must be accepted as the correct construction. The question is whether such an obligation was a condition precedent to the transfer of the Rights to Genesis.
The Licence provided by its recitals that Genesis was the owner of the Genesis Range Dies detailed in schedule 1 and it is plain that these were the dies particularised in schedule 4 to the SPA and the Schedule to the Assignment and by clause 2.1, Genesis, as owner of the Genesis Range Dies, granted a 999 year licence to Vital to cause manufacturers to manufacture products with the dies for use in the products manufactured by Arc and sold by Vital within the United Kingdom.
It was submitted on behalf of the Defendant and in my judgment it is plainly right that the scheme of the SPA, the Assignment and the Licence was self evidently to effect the transfer to Firstmain of the shares in Vital, to extract the Rights from Vital/Arc to Genesis; and then for Genesis to grant a licence to Firstmain to make use of products embodying the Rights to continue the business it had previously operated when Vital owned the Rights. Nowhere is there any indication that any obligation on Genesis to pay Vital £45,000 for the Rights is a breach which would entitle Vital not to transfer the Rights to Genesis. On the contrary:
(1) It was a term of the SPA that the First Claimant would upon completion of the sale of his shares in Vital cause Genesis to deliver to Firstmain an executed copy of the Assignment: the executed copy was made at the time when the First Claimant was still the owner of Vital.
(2) It was a term of the SPA that the First Claimant would upon completion cause to be delivered to Firstmain an executed copy of the Licence. If the transfer of the Rights under the Assignment had been conditional upon anything, the SPA would have made provision for the contingency that the condition was not fulfilled.
(3) The operative clause of the Assignment provided that the Rights were assigned "absolutely" that is to say not conditionally.
(4) In the licence not only did Firstmain expressly acknowledge Genesis' ownership of the dies and the Rights embodied in them, it also paid for a licence to use the dies without there being any clause making provision for the position should Genesis not pay the £45,000 due under the Assignment.
In all the circumstances to my mind if any obligation to pay £45,000 existed, it merely gave Vital a claim against Genesis for payment of a debt of that amount.
It follows that the agreements drafted by the Defendant were, in fact, effective to do what it was required that they should do. In those circumstances, as it seems to me, the loss of the TKM business opportunity cannot, as a matter of law, have been caused by any breach of duty on the part of the Defendant. The losses which are alleged are not losses which can possibly legally have been caused by the breach of duty alleged. If any loss were caused by the deficiencies in the drafting such losses could conceivably have been the additional costs of having to argue with Firstmain about the construction of the agreements but no such losses are claimed.
It follows in my judgment that the Defendant is entitled to judgment against the Claimants on the grounds that the claim that has been brought cannot as a matter of law succeed.
I trust that the parties will be able to agree the form of an order that reflects the substance of this judgment and deals with the costs consequences. If the parties are unable to agree the costs consequences, they should file and serve brief submissions of the form of order they seek and, if possible, I will deal with that issue on paper.
Finally, I would like to take this opportunity to thank both counsel for their very helpful submissions.
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Mr Justice Hamblen :
Introduction
In 2008, the inaugural season of the Indian Premier League ("IPL") took place - a venture which has transformed the cricket world.
An impression of the heady times of that first season is given by an article from Forbes Magazine in 2009 entitled "The World's Hottest Sports League":
"The IPL was conceived in 2007 near some hallowed ground for sports: in London's Wimbledon suburb. There, Lalit Modi, representing the Board of Control for Cricket in India (BCCI), the governing body of Indian cricket, and Andrew Wildblood, an executive at sports management powerhouse IMG, discussed the disconnect between cricket's worldwide popularity and the lack of commercial success of any domestic league. Their solution: a franchise ownership structure modeled after top U.S. sports leagues. Since then, the league has grown at breakneck speed.
...
How successful was that first season? The 2008 semifinals and final drew 62 million viewers in India, with a per-match average of 11% of the nation's total cable audience. In the months that followed, Modi, now IPL commissioner, opted out of TV deals with Sony and World Sports Group, risking nearly $1 billion of guaranteed payments over the next nine years. The gamble paid off, to the tune of a 98% annual increase from those broadcast partners, both of which deemed the IPL too valuable a property to lose.
…
…private franchise ownership coupled with the commercial possibilities of the new, abbreviated version of the game in India's cricket crazed marketplace has upended the sport's established order."
By 2014, it was estimated that the brand value of the IPL was over US$3 billion.
The Claimant, Mr Wright, was in at the start of the IPL. He rode the wave of excitement and expectation created by it and the prospect of extravagant riches were held out to him. Unfortunately, in 2009 that wave came crashing down all around him and he has been left picking up the expensive pieces ever since. This litigation is one such piece.
Overview
There were eight IPL franchisees in the first IPL season. The IPL franchisee for the city of Hyderabad was the Deccan Chargers. The Deccan franchise was held by Deccan Chargers Sporting Ventures Limited ("DCSV"), a subsidiary of Deccan Chronicle Holdings Limited ("DCHL"), a media group who owned India's fourth largest English language newspaper, the Deccan Chronicle. In 2008, the Deccan Chargers came last in the IPL. In 2009, they won the league.
Mr Wright was the Chief Executive Officer of DCSV from 1 June 2008 until the end of January 2009 when he was constructively dismissed.
Mr Wright engaged the Defendant, Lewis Silkin LLP, the well known firm of solicitors ("LS"), to assist him in the drafting and making of his employment contract. Mr Wright was assisted and advised by Mr Burd, one of the two joint heads of LS's Employment Department.
The contract concluded ("the Heads of Terms") included a "Severance Guarantee" under which Mr Wright was entitled to be paid £10 million in the event of Mr Wright being constructively dismissed ("the severance guarantee"). Under the Heads of Terms DCHL guaranteed DCSV's financial obligations to Mr Wright.
Since early 2009, Mr Wright has taken various steps to obtain payment of the severance guarantee from DCSV and DCHL, to no avail.
Proceedings were issued by Mr Wright against both DCSV and DCHL in this country on 2 February 2009 ("the first English proceedings"). DCSV and DCHL disputed both service of the proceedings and the English court's jurisdiction over the claim. To address the service issues a second set of proceedings was issued by Mr Wright on 19 November 2009 and served in April 2010 ("the second English proceedings"). DCSV and DCHL again challenged jurisdiction ("the jurisdiction challenge").
The jurisdiction challenge was dismissed by Master Fontaine on 15 December 2010. On 25 May 2011 Tugendhat J dismissed an appeal from that decision.
DCHL paid to Mr Wright the interim costs orders made by Master Fontaine (£90,000) and Tugendhat J (£47,000), but after serving a Defence and Counterclaim and a List of Documents in the second English proceedings, DCSV and DCHL ceased to take any active part in them. On 16 July 2012 Mr Wright's claim was tried in the absence of DCSV and DCHL by HHJ Seymour QC. The claim succeeded and Mr Wright obtained judgment in the sum of £10,323,094 plus £210,384.65 interest, indemnity costs (which, while not assessed, are quantified by Mr Wright at £956,878.23), and an order for interest on costs (together, "the Judgment").
From August 2012 to September 2014, Mr Wright was engaged in protracted proceedings to enforce the Judgment in India at a further cost of about £55,000. These have got nowhere and Mr Wright has been advised that there is no prospect of recovering the Judgment debt. Meanwhile, in September 2012, DCHL (into which DCSV had been amalgamated in May 2011) lost its IPL franchise and is seemingly insolvent.
Mr Wright's attempts to obtain payment of the severance guarantee have accordingly been disastrous. He has incurred costs of over £1 million but has not recovered a penny; nor does there appear to be any realistic prospect of him doing so.
Mr Wright claims that these losses are the result of LS's negligence. In particular he alleges that LS was negligent in:
(1) Failing to consider or advise on securing effective means of enforcement of DCSV and DCHL's obligations and in particular the obligation under the severance guarantee; and
(2) Failing to advise in relation to jurisdiction matters and to include an exclusive jurisdiction clause with provision for service of proceedings in the UK.
LS denies both negligence and causation of loss.
The parties and witnesses at trial
Mr Wright
Mr Wright has a background in sports management. From 1990 to 1999 he was employed by the International Management Group ("IMG"), probably the leading global sports management and marketing company. In 2000, Mr Wright entered into a contract to become CEO of Global Golf and he then set up his own company to provide consultancy in sports marketing.
In February 2008 Mr Wright rejoined IMG under a consultancy contract to act as IMG's representative in assisting the Board of Control for Cricket in India ("BCCI") to develop the IPL. He was given the title of Managing Director of IMG India, oversaw the company's operations there and was IMG's main point of contact with Mr Lalit Modi, the chairman and commissioner of IPL and vice-president of BCCI.
Between February and April 2008, Mr Wright worked closely with Mr J Krishnan who held the title of "President and Chief Executive" of Deccan Chargers.
In April 2008, when Mr PK Iyer first approached Mr Wright on behalf of DCSV/DCHL, Mr Wright was well placed. He had a background in international sports management and marketing. He knew cricket. He had had close involvement with the development of the IPL.
Lewis Silkin
A description of LS's practice at the material time is provided in "sales pitch" material supplied by Mr Burd to DCSV/DCHL in May 2008. It describes itself as a "full-service commercial law firm based in the City of London" with 46 partners and a total staff of around 250. In relation to employment law it is stated that "employment law has been a key area of expertise for Lewis Silkin for many years" with a team of 53 dedicated employment lawyers which is "consistently highly ranked by the legal directories". It then sets out various reasons for choosing Lewis Silkin for employment law advice, including: offering the full range of employment law advice, strength in depth, and international capability through Ius Laboris. This was described as "the international alliance of leading employment, employee benefits and pension law firms" which was said to enable them "to provide a unique and truly global solution". It linked them with an Indian law firm, Kochhar & Co.
Mr Burd joined LS in September 1984 as a trainee solicitor and has worked there ever since, being made a partner in 1988. He started his career in the Commercial Litigation Department but from 1995 onwards he began to specialise in employment law. From around that time he and Mr James Davies had built up the Employment Department to its present size and are its joint heads.
Mr Wright had been a client of LS since the 1980's and first met Mr Burd around 1990. Mr Burd acted for Mr Wright on a number of occasions thereafter and had a good professional and personal relationship with him.
Other witnesses
Aside from Mr Wright and Mr Burd oral evidence at trial was given by Mr Hampel, the Chief Executive Officer of the IMG joint venture company, International Stadia Group ("ISG"), by Mr Modi (called by Mr Wright) and by Mr Roger Alexander, former senior partner of LS (called by LS). There was also a witness statement from Ms Sara Cohen of LS but in the event she was not called as no criticism of her was pursued. LS also adduced an expert report on Indian law from Mr Sameer Tapia of ALMT Legal, Mumbai, which addressed the issue of enforcement of judgments in India. Mr Wright provided no Indian law expert evidence of his own and Mr Tapia's evidence was unchallenged.
Factual background
The first contact between Mr Wright and Mr Iyer occurred on 20 April 2008, when Mr J Krishnan invited Mr Andrew Wildblood, Mr Michael Fordham (both IMG employees) and Mr Wright to a meeting with Mr Iyer, in Kolkata. Mr Iyer told them that DCHL intended to create a big sports and entertainment company in India. He had a vision to create what he called a "sports city" which would consist of a multi-use sports stadium on the scale of Wembley Stadium and a sports and entertainment arena on the scale of London's O2.
Mr Wright met Mr Iyer again twice, in Hyderabad, during late April 2008. He introduced Mr Wright to his fellow promoters, Mr Ram Reddy, Chairman of DCHL, and Mr Ravi Reddy, Vice Chairman of DCHL.
On 6 May 2008, Mr Wright, together with Mr Hampel of ISG, met Mr Iyer at an apartment at St James' Court, in Buckingham Gate, London.
Mr Iyer presented a business plan document for DCSV, a "newco". The business plan showed the scale of the sports city project. Mr Iyer said that within 4 years he anticipated that the enterprise value of DCSV could be billions of dollars.
At the end of the meeting, Mr Iyer requested to speak to Mr Wright in private. He asked Mr Wright to assure him that, in the event of IMG/ISG successfully bidding for the contract to advise DCHL on the development of its sports city, Mr Wright would personally run the project. Mr Wright told Mr Iyer that he was a consultant to IMG and that accordingly he could give no such guarantee. Mr Iyer asked Mr Wright to have lunch with him the following day.
On 7 May 2008, Mr Iyer and Mr Wright met for lunch during the course of which Mr Iyer offered Mr Wright the position of Chief Executive Officer of DCSV. Mr Iyer explained that DCSV would take ownership of the Hyderabad IPL franchise and that it would be the corporate vehicle through which the sports city would be developed. Mr Iyer told Mr Wright that he, together with Messrs. Reddy, would inject US$100m into DCSV and would raise a further US$900m via an IPO, probably in London.
Mr Iyer set out the headline terms of his offer; an initial annual salary of £300,000 rising to £500,000 and the grant of 3.5% of the equity in the newly created company which, he said, would be "marketable from day one". Mr Iyer reminded Mr Wright that the business plan indicated the enterprise value of DCSV could, within four years, be US$4 billion, and that therefore his 3.5% could be worth US$140 million. He said to Mr Wright: "Get used to it: you are going to be a wealthy man."
Mr Wright told a trusted friend of his about the offer and he suggested that Mr Wright meet an Indian associate of his, who he described as being "well-connected and wise". On 9 May 2008, Mr Wright met this associate, subsequently referred to as the "Wise Indian".
The "Wise Indian" reasoned that DCHL was so keen to have Mr Wright run DCSV because they needed someone with his international sports marketing and management CV to front the IPO which was being planned and that nobody in India had that. He expressed that view that Mr Wright was in a "strong position".
The "Wise Indian" advised Mr Wright to be sure to get an option in any agreement signed so that the equity would have a ready buyer at an agreed price. He also told Mr Wright that if DCHL was serious, Mr Iyer would offer him a generous signing on bonus and that, in his view, the signing on bonus should be £250,000.
It was Mr Wright's evidence that the "Wise Indian" also advised him to ensure that any dispute was resolved in England. Mr Wright recalled him saying "because, as you know, India very slow, no good, must be here" and that as he said, "here", he was tapping on his desk. In response Mr Wright explained that he was already aware of how slow India was with regard to legal matters because of a dispute there had been between IMG India and the Indian owners of an American jeans brand. The meeting concluded with the "Wise Indian" offering to check out DCHL and the three promoters through good contacts of his in Hyderabad, to which Mr Wright agreed.
It was disputed by LS whether the "Wise Indian" ever said anything to Mr Wright about dispute resolution given that, in particular, this aspect of the conversation is not referred to in the contemporaneous emails which followed. I accept, however, Mr Wright's vivid evidence on this issue.
Mr Iyer and Mr Wright met again on the morning of 12 May 2008 at St James' Court. During the meeting, Mr Iyer spent time talking about India, about DCHL and about how he saw DCSV developing. Mr Wright expressed some reservations about the optimistic financial projections being made for DCSV. Mr Iyer agreed these could be refined and seemed keen for Mr Wright's further input. At the end of this meeting Mr Iyer asked Mr Wright to bring a lawyer to meet him on 14 May 2008 to discuss the deal further. Mr Iyer told Mr Wright that he was not available on 13 May 2008 as he was flying by helicopter to the Bentley factory to inspect the production of his latest car.
Following this meeting with Mr Iyer, Mr Wright telephoned LS to discuss the offer which had been made to him.
His call was returned by Mr Alexander. Mr Wright described the opportunity to him in some detail. Mr Wright appeared to be very excited about the prospect of running the venture and wanted a deal to be done quickly. Mr Alexander's note of the conversation states: "Time of the essence". Although it is unlikely that Mr Wright used this expression, I accept that he did stress the need for urgency and in particular that he wanted someone to accompany him to the proposed meeting with Mr Iyer on 14 May 2008. Mr Alexander suggested that that should be Mr Burd. Mr Alexander's note also recorded Mr Wright saying that DCHL was "registered in Singapore with sub in Hydrabad".
Later the same day Mr Wright spoke to Mr Burd. Mr Burd made a hand written note of that conversation. It records Mr Wright outlining the terms of the proposed deal. It notes that Mr Iyer had made "a rather seductive offer. Saying they want Tim and after 5/6 years he would be able to retire". It refers to Mr Wright seeing "wise Indian guy" and his advice in relation to the put option. It does not record the advice of the"Wise Indian" on dispute resolution and I find that this was not raised.
Mr Wright told Mr Burd that the headline terms were agreed. Mr Burd understood that Mr Wright wanted the agreement to be documented in a binding way and for that to be done quickly as Mr Iyer might not be in London for very long. Mr Burd suggested that a binding Heads of Terms be used, with which Mr Wright agreed.
On 13 May 2008, Mr Wright sent Mr Burd an email at 12.15 ("the 12.15 email") setting out the headline commercial terms which had been agreed with Mr Iyer and the main points to be covered by the Heads of Terms. The email provided as follows:
"We are agreed so far that the salary should be on basis of 2 years initial fixed term at £300k becoming 12 months rolling and increasing to £500k after two years or opening of the sports city, whichever is the sooner.
The equity should have a clear put option with a minimum value based on at least the cost of the IPL Hyderabad franchise (US$100+m) the "promoters" of DCSV have told me they are investing. I like your idea of asking PK Iyer to tell us what he considers DSCV to be worth at this point and that within reason we take that as the minimum put price. Agree also that one of the "big four" accountancy practices, agreed by both parties, should be able to determine the value of the equity at any future point and that their valuation should apply if I leave DCSV for any reason, unless it is less than $4m which would always be the minimum.
We talked about key milestones that might trigger bonus payments. These could include the following:
1) Raising US$ 900m via IPO
2) Signing a naming rights deal
3) Selling all hospitality boxes
4) Selling all premium seats
5) Completing the construction project
6) Deccan Chargers reaching IPL semi finals in a given year
Agree these are all points the Managing Director of DCSV should be achieving to justify salary but PK has agreed a bonus structure should be included and these achievements will all deliver more value to the equity and therefore to the major shareholders' upside.
I have discussed fact that Helen, Theo and I live in London. Current agreement is that we continue to do so with sufficient travel to Hyderabad….I can see a point when the amount of time required in India makes that difficult and therefore agree we should include relocation expenses if we agree to move.
Also agree we need all normal executive benefits including, private health, life insurance cover and pension.
With regard to signing on bonus I am a little shy regarding my Wise Indian friend's figure £250,000, but agree there should be a six figure sum……..
Should we ask them to cover Lewis Silkin fees as well as any tax advice?
Let's discuss at 4.00 with a view to creating and presenting the majority of Heads of Terms at 12.00 in Buckingham Gate tomorrow at 12.00.
While the Heads will be binding, are we still able to give due consideration to best tax aspects once they are signed?"
As the email makes clear, the aim was to be in a position to present "the majority of Heads of Terms" at the 14 May meeting scheduled with Mr Iyer.
About an hour later, by an email at 13.21 ("the PRR email"), Mr Wright forwarded an attachment to Mr Burd consisting of a note from "PRR", which Mr Wright had received earlier that day in relation to DCHL and its directors and which he understood to come from the "Wise Indian". It was not and is not known who "PRR" is. The note stated as follows:
"Deccan Chronicle is run by Mr. T. Venkataram Reddy and his brother T. Vinayak Ravi Reddy.
They are second generation businessmen.
Their father Mr. Chandrashekar Reddy was the brother of the current Congress MP Mr. T. Subbarami Reddy (former union minister for mines in the current congress government). Their father split with his brothers a few decades ago.
Mr Venkataram Reddy has a reputation for being brash and fairly flashy. I do not believe they don't have any cases for fraud against them. But they also don't have a completely clean reputation like the "Hindu" family.
In the mid-1990's their current MD – Mr. P.K Iyer became a close associate and subsequently joined their board. Mr Iyer is currently the MD of DC Holdings. Mr Iyer was a 50% partner in the Odyssey book chain – which is how Deccan Chronicle ended up buying the book chain. I do know from Odyssey's MD (Ashwin) that they lose between Rs. 5 and Rs 10 Cr. a yr., but the reported figures don't indicate this loss. Last year's P&L indicates a loss of Rs. 700 k only for Odyssey.
I don't have any knowledge about the Deccan Chronicle numbers, though I have heard N.Ram commenting in parties that the DC numbers are cooked up.
I have heard from several people that Mr P K Iyer and the two brothers' regularly play the DC stock and that P K Iyer is the brain behind this entire stock scheme.
The two brother's have in private, indicated to some common friends that P K Iyer was given a fair bit of equity in DC holdings in return for his contribution.
There are several common friends so if there is any specific area that you would like me to find some info on, I could make some discrete enquiries.
Regards
PRR"
As reflected in Mr Burd's recording sheet for 13 May 2008, at 13.42 Mr Wright spoke to him for up to 12 minutes ("the 13.42 call"). Mr Wright did not recall that conversation in detail. Mr Burd said that during the call Mr Wright recounted and elaborated on some of the terms set out in the 12.15 email.
Soon after the 13.42 call Mr Wright sent Mr Burd an email at 14.13 ("the 14.13 email") with the subject line, "English Law" stating:
"English law or otherwise, can we just give some thought to how we would enforce the provisions of the contract on a company based in Singapore? Talk after 4.00 pm".
It was Mr Wright's evidence that this reflected his having raised with Mr Burd during the 13.42 call the recommendation made by the "Wise Indian" for dispute resolution in England. This was denied by Mr Burd. His evidence was that the topic of English law as governing law had initially arisen because he had said that he was only competent to advise on English law. He said that there had been some discussion about whether DCSV was already incorporated and, if so, where it was or would be so incorporated.
It is clear that there was some discussion between Mr Wright and Mr Burd about the Heads of Terms being governed by English law. This had caused Mr Wright to wonder how, even with an English law contract, a company in Singapore or elsewhere, could be forced to do what the English courts directed them to do. It did not cause him to wonder about jurisdiction since he presumed that having a contract subject to English law meant that any dispute would be heard in England. I find that Mr Wright never did raise with Mr Burd the issue of dispute resolution or jurisdiction. To his mind that issue had been addressed by the proposed inclusion of the English law term.
Mr Burd replied to the 14.13 email a few minutes later. He wrote, "Sure. Can we make it 5pm, as I've had an urgent conference call put in for 4pm". Mr Wright confirmed that that was fine with him.
During that afternoon, between that exchange of emails and the planned telephone conversation, a terrorist bomb exploded in Jaipur, India, killing 63 people and injuring 216. The cities of Mumbai and Delhi were put on red alert. This made Mr Wright understandably apprehensive. He also had some concerns about jumping into such a venture too quickly and was reluctant to uproot his family. After the terrorist bombs he decided to turn down the opportunity and the considerable sums of money being offered to him.
At or just after 17.00 that afternoon, Mr Wright spoke to Mr Burd and told him that in the light of the terrorist attack in Jaipur he now intended to turn down Mr Iyer's offer and that he would not need him to attend the planned meeting with Mr Iyer. Mr Burd understood that there would be no further work for him to do and that he was not to spend any more time on the matter.
On 14 May 2008, at the meeting with Mr Iyer at St James' Court, Mr Wright explained that he had decided to turn down the employment offer, referring to the terrorist bomb in Jaipur and to the general threat of terrorism in the region. Mr Iyer appeared disappointed and made clear that he would do what he could to persuade Mr Wright to change his mind. Mr Iyer suggested that the real reason Mr Wright was turning down his offer, was that he had been told that Indian owners did not permit executives to have genuine authority. He then said that in order to allay any concerns Mr Wright might have, he would offer Mr Wright a guaranteed severance payment which would be payable if he was dismissed. He apologised for not having mentioned it in their previous conversations. He told Mr Wright that this would protect him from any such interference, but that Mr Wright had nothing to fear as he intended that they should work together until Mr Wright had so much money he did not want to work any longer.
Mr Wright asked Mr Iyer what figure he had in mind for the severance guarantee. He said, "You tell me." Mr Wright said that in view of the potential value of the equity he would hold – which Mr Iyer had estimated previously at £140m within four years – £10 million seemed to be a reasonable figure. Mr Iyer asked if that was a number with which Mr Wright was comfortable. Mr Wright said that it was. Mr Iyer said: "Done. Have your lawyer put it in the contract."
Discussions with Mr Iyer continued over lunch. Mr Iyer agreed that Mr Wright would be based at an office in London which DCHL would open specifically for him and a small staff. Mr Iyer suggested the office should be in Mayfair. As they walked back towards St James' Court after lunch they discussed a signing on bonus. Mr Wright told Mr Iyer that someone senior in Indian business had advised that this was appropriate. Mr Iyer asked Mr Wright for a figure. Mr Wright proposed a figure of £250,000. Mr Iyer asked, "Is it the right number; can you look me in the eye and tell me it is the right number?" Mr Wright said he could. Mr Iyer replied "Done. And if you had asked for £500,000, I would have given you £500,000. That is why I asked if you were comfortable with the number."
Mr Iyer and Mr Wright spent the rest of the day discussing DCSV, Mr Iyer's objectives, Mr Wright's role and his reservations about the financial projections in the business plan.
At 22.04 that evening, Mr Wright sent Mr Burd an email setting out the terms of the improved offer that Mr Iyer and he had agreed. The email stated that: "I am now much more comfortable and spent 9 hours discussing! Let's talk when you can in the morning". It also referred to "severance payment agreed £10m" and to Mr Iyer still being keen to sign Heads of Terms "as soon as possible".
On 15 May 2008, Mr Burd telephoned Mr Wright at around 09.30 and they agreed to meet at LS' offices on Chancery Lane at 11.00. The meeting started at 11.24. Mr Wright told Mr Burd about his meeting with Mr Iyer the previous day and appeared buoyed up. He said that he had arranged to meet with Mr Iyer at 14.00 to sign the Heads of Terms. Given the time pressure Mr Burd explained that this would of necessity be a simple document setting out the key terms. In the event, the drafting session took just over three hours and the meeting was put back for about an hour.
Mr Wright and Mr Burd sat down side by side at a table in a LS meeting room and Mr Burd drafted the Heads of Terms by hand. Mr Burd had a copy of the 12.15 email and Mr Wright's email of the previous evening which he used as a guide.
Mr Burd started the draft by setting out the contracting parties, Mr Wright's job title, salary, terms and bonus arrangements. In that first draft Mr Burd described the employer as: "Deccan Chargers Sporting Ventures Limited (or such entity as is the operating company for the IPL (franchise (currently known as "the Deccan Chargers")) ("the Company")". As he explained in evidence, the reason why he described DSCV in this way was because it was not clear that DCSV had been incorporated or where it was or was to be incorporated. He said that it was his understanding at the time that Mr Wright thought it was intended to be a Singapore based company, but he was not sure. Whilst one can understand the reasoning behind Mr Burd's expanded definition of "Employer", it was not suggested that this was explained to Mr Wright at the time.
The 12:15 email referred to the agreement needing "all normal executive benefits including, private health, life insurance cover and pension (?)" and during the drafting exercise Mr Wright and Mr Burd talked about what benefits should be included in the Heads of Terms. Mr Wright said he had discussed with Mr Iyer that "normal" benefits would be included. Mr Burd explained that if getting the Heads of Terms signed by Mr Iyer that day was his objective, then it was a question of striking a balance, with which Mr Wright agreed.
The first part of the draft Heads of Terms included bonus arrangements. A signing-on bonus of £250,000 had been agreed the day before. Mr Wright and Mr Burd then discussed the other bonus milestones set out in the 12:15 email.
The draft Heads of Terms also included equity provisions. Mr Burd relied upon the 12:15 email and his instructions from Mr Wright in drafting that provision. The first draft referred to 2% of the shares in DCSV vesting immediately and that a further 1.5% would vest when the company made an operating profit.
During this time, Mr Burd mentioned to Mr Wright that it would be usual for a recital, or preamble, to be included in the Heads of Terms which would set out the nature of the agreement and which could be useful when interpreting the agreement and Mr Wright offered to draft this.
Mr Burd also drafted a parent guarantee clause. Mr Burd was concerned about contracting with an entity that may not yet exist. Mr Burd had been told, during his conversations with Mr Wright, that DCHL was the owner of the third largest newspaper in India, and he assumed this meant it was substantial. Mr Wright and Mr Iyer had agreed a substantial severance guarantee and if DCSV turned out not to exist or to have insufficient funds to pay that severance guarantee, Mr Burd wanted to make sure that Mr Wright would have recourse to a party that could pay. He therefore included a form of parent guarantee to ensure that DCHL would guarantee any of the financial obligations of DCSV. Whilst one can understand Mr Burd's rationale for including this provision, I accept Mr Wright's evidence that this was not explained to him at the time.
It was Mr Burd's evidence that during consideration of this iteration of the Heads of Terms he had a brief discussion with Mr Wright about the governing law of the agreement. He said that when considering governing law "we naturally went on to touch on the jurisdiction of the agreement".
It was Mr Burd's evidence that he briefly explained to Mr Wright that if one does not know where a party is (or would be) located then there could be a problem including a jurisdiction clause specifying a particular country, whether that be England or another. This is because that might cause difficulties in enforcement if DCSV, or its assets, turned out to be located in another jurisdiction which might not recognise a judgment of the exclusively chosen country. Mr Burd said that he explained that he had a concern that, even if they included a non-exclusive jurisdiction that might be enough to prevent suit in another jurisdiction (e.g. Singapore). Mr Burd said that he told Mr Wright that if a Singapore Court ended up dealing with any claim then it would have to interpret the Heads of Terms in accordance with English law, and therefore if they adopted the same process as the English courts they would need an English law expert. He said that he suggested that with so many unknown elements the best course was to ensure that the agreement was governed by English law. Having touched on the "pros and cons" of whether to specify a jurisdiction for the contract, he therefore cautioned against it and suggested that in the circumstances it was preferable to leave the question of jurisdiction open. He said that he told Mr Wright that he would have the protection of the agreement being governed by English law but, depending upon where DCSV ended up being located, there could be an argument about which country had jurisdiction. He said that Mr Wright appeared to take in what he was saying and signalled to him to proceed on the basis he had suggested, which was to leave jurisdiction open.
It was Mr Wright's evidence that there was no such discussion then or at any time. His evidence was that if it had been suggested to him that he might want to sue DCSV somewhere other than England he would have been surprised as this was not what the Wise Indian had advised him or what he wanted. He said that if Mr Burd's rationale of keeping jurisdiction open because it was unclear where DCHL or DCSV were incorporated had been explained to him he would have said that DCHL is obviously an Indian company and that even if DCSV was incorporated in Singapore he would not want to sue there and that it was better to be sure where a case could be brought rather than to have uncertainty. This important conflict of evidence will be addressed when considering the issue of breach of duty.
Once the agreement had been drafted both Mr Burd and Mr Wright read it through and Mr Burd asked his secretary to prepare three engrossed copies of the final agreement,
Mr Wright and Mr Burd then went to St James' Court to meet Mr Iyer. After some small talk, Mr Burd handed Mr Iyer a copy of the Heads of Terms. Mr Iyer reviewed the document quickly and made some amendments. These included striking out the proposed bonus milestones and amounts, the provision that DCSV would fund any tax liability of Mr Wright arising on the equity grant and the provision for payment of Mr Wright's legal fees. When striking out the last of these he said words to the effect that he was paying Mr Wright quite enough and that he could pay his own legal fees.
Referring to the choice of law, it was Mr Wright's evidence that Mr Iyer said: "You may have English law. If I wanted to bring an action against Timothy Wright I would want to do so under Indian law in Hyderabad but as I do not, you may have your English law in London, or Timbuktu for all I care." Mr Burd's evidence was that Mr Iyer made no reference to "in London" or the place of any proceedings and said words to the effect of: "You may have English law or Timbuktu law for all I care". Mr Burd agreed that this was in the context of a consideration of the choice of law clause and said that it was also in the context of Mr Iyer saying: "I don't intend to break this contract" or something similar. I prefer the evidence of Mr Burd on this issue. The context was the choice of law clause and there was no reason for Mr Iyer to mention anything other than governing law. It is also to be noted that Mr Iyer was later to deny so doing.
Once they had finished going through the draft and discussion of the changes to be made, Mr Burd volunteered that the LS office could make the changes. Mr Iyer agreed and Mr Burd telephoned his secretary to make the necessary arrangements.
When the revised Heads of Terms documents were delivered, Mr Burd checked the three copies for the changes and there was a discussion about when Mr Wright would be available to start work for DCSV and a start date agreed for him "as soon as free from current IMG commitments". The amended documents were passed to Mr Iyer who initialled the handwritten amendment and signed each one on behalf of DCSV and DCHL. Mr Iyer then passed each one across to Mr Wright for counter-signature. Once each copy was signed Mr Iyer kept one copy and gave two copies to Mr Burd. Mr Wright and Mr Burd then left and went out for a celebratory dinner.
On 17 May 2008 at 20.24, Mr Wright sent an email to Mr Burd regarding the notice clause in the Heads of Terms and raised a concern as to how the reference to the "term" in the contract and the £10m severance guarantee related and whether DCSV could terminate on payment of 3 times the agreed salary. Mr Burd replied by email the same day stating: "That's not how I'd interpret. The key is in your use of the word "terminate". If they (as opposed to you) terminate then they have to pay a minimum of £10m including whatever you are then due under the contract (currently 3 years' pay) and the then value of the stock. No need to change it, (not that I think it would be a good idea to try just now anyway)." Mr Wright considered that this met his concern.
The Heads of Terms dated 15 May 2008 provided that the parties would cooperate in the structuring of the arrangement to achieve "optimal tax efficiency" for Mr Wright. In this regard, on 20 May 2008, Mr Burd sent Mr Wright an email with a note prepared by Ms Sara Cohen, a partner in LS' Tax Department. The note summarised the tax implications arising from the acquisition of Mr Wright's shares in DCSV.
On 21 May 2008, Mr Wright met Ms Cohen in Pimlico, together with Mr Iyer and Mr J Krishnan. Ms Cohen brought up the suggestion of DCHL/DCSV buying TW Sports for £250,000 instead of DCSV paying me £250,000 as a sign on bonus. Mr Iyer dismissed the idea.
On 23 May 2008 Ms Cohen sent Mr Wright by email an amended Heads of Terms.
At 09.45 on the morning of 24 May 2008, Mr Wright met Mr Burd in Buckingham Gate and they ran through the amended draft Ms Cohen had sent.
At 10.00 on the morning of 24 May 2008, Mr Burd and Mr Wright met Mr Iyer and Mr J Krishnan at St James' Court. Mr Iyer reviewed the amendments made to the language around the provision of equity and the severance guarantee. Mr Iyer requested that Mr Wright's title be changed from Managing Director to Chief Executive. Mr Burd asked Mr Iyer to confirm that, notwithstanding the change in title, Mr Wright would always be the most senior employee of DCSV and was assured that he would. The start date was also discussed and it was agreed that the start date would be 1 June 2008. Revised agreements were then produced and Mr Wright took them back to Mr Iyer for signature and dating.
The final version of the Heads of Terms provided so far as material as follows:
Binding Heads of Terms
Deccan Chargers Sporting Venture Limited
and
Tim Wright ("TW")
Preamble
The Company (as defined below) has described to TW its plans to create a "sports city" in Hyderabad. This may be summarised as a multi-use stadium, arena and hotel complex with state of the art facilities to showcase sports, music and other entertainment.
The Company wishes TW to help engage the services of certain sports and music industry companies and to collaborate with them in the development of a business model and a business plan that will be key documents to support an Initial Public Offering ("IPO") for the Company's stock on the London Alternative Investment Market or other investment exchanges ("listing exchange").
TW will be expected to lead an executive team he will identify and engage as well as the Company's various external agencies and other out-sourced project management, architects and constructors. TW is to play a pivotal role in the development of the sports city brand and all of the commercial and other associated opportunities.
It is understood and agreed that TW will have responsibility for the strategic management of the Hyderabad IPL franchise currently known as Deccan Chargers. TW is to advise the Board on issues to include, but not be limited to: transfer targets player contracts, coaching staff acquisition and management, marketing and management, commercial exploitation and other brand building worldwide.
It is agreed and understood that certain of TW's fellow Directors will act as "promoters" of the IPO and noted that they have a proven track record in this regard. It is further understood and agreed that the Company will not look to TW to take a lead role in the acquisition of a suitable property site in Hyderabad or in obtaining all necessary planning approval and other permissions.
TW agrees to cooperate and collaborate fully and closely with the Managing Director of Deccan Chronicle Holdings Ltd and with any and all other Directors of the Company from time to time.
It is agreed that, unless and until otherwise agreed in writing, this role is to be TW's exclusive executive employment activity.
Employment
Employer: Deccan Chargers Sporting Ventures Limited (or such other entity as is the owner of the Hyderabad IPL franchise (currently known as 'the Deccan Chargers')) ("the company")
Title Chief Executive Officer of the Company reporting to P K Iyer
Start date: 1 June 2008
Board: A member of the Board of the Company
Salary £300,000 until such time as the Company is generating revenue, at which point rising to £500,000 per annum, payable monthly in arrears
Term Initial fixed term of three (3) years and thereafter 12 months rolling notice on either side.
Severance guarantee
In the event that TW's employment is terminated by the Company (including as a result of a constructive dismissal) at any time, TW will receive immediate payment (to include contractual notice entitlement and payment for any then vested equity ("total package") of the higher of the then value of his total package and £10 million. If the shares are not listed at the time, their value for this purpose shall be as determined independently in accordance with normal UK unlisted company share valuation principles by one of KPMG, Deloitte, Ernst & Young or PWC (as agreed between the parties and not being the Company's auditors) within 60 days of being instructed, the cost of such valuation to be borne by the Company and the result to be binding on the parties (save in the case of manifest error). Any unvested equity then held by TW shall be forfeited for an amount equal to the acquisition price paid or still to be paid, and any vested equity shall be transferred by him to the Company or its nominee as soon as is practicable after such payment is made.
Tax efficiency
The parties will cooperate in the structuring of these arrangements to achieve optimal tax efficiency for TW.
Guarantee
Any financial obligations to TW arising out of these arrangements to be guaranteed by Deccan Chronicle Holdings Limited.
Law
These terms to be governed by English law.
Mr Wright commenced his employment with DCSV in early June 2008. He was paid his sign on bonus and his salary but did not receive his equity share.
In September 2008 Lehman Brothers collapsed and the financial crisis ensued. Mr Wright immediately realised that DCSV/DCHL's sports city plans were unlikely to be realisable and that his position was vulnerable. At around the same time Mr Iyer made Mr V Shankar Chairman of DCSV and he soon made it clear that he regarded himself as the company's chief executive. In November 2008 Mr Wright briefly spoke to Mr Burd about their relative roles and what he should do about it. Mr Burd advised him not to be confrontational and to raise his concerns in a measured way.
On 27 November 2008, the day after the Mumbai terrorist attack, Mr Wright met with Mr Iyer, Mr N Krishnan and Mr E Venkratran Reddy (a cousin of Messrs. Ram and Ravi Reddy) in Hyderabad. They briefly discussed Mr Shankar and Mr Iyer assured Mr Wright that in the "new order" of things, there was no role for Mr Shankar and that he would be working directly with Mr Iyer. Mr Wright reminded Mr Iyer about his equity and the fact that he had not yet received his shares. Mr Iyer told him that in view of the financial crash, and now the terrorist atrocity, nothing would happen in India in relation to sponsorship and raising money over the next three months and that Mr Wright was potentially unsafe in India. He told Mr Wright to return immediately to London and not to come back to India until 1 March 2009. Mr Wright duly left for London.
In London, Mr Wright continued to work on DCSV business, in particular continuing with the development of brand guidelines for use of the new corporate identity for Deccan Chargers and working with the head coach and captain on player targets at the IPL player auction due to be held in early February 2009. By January 2009, however, Mr Wright had concluded that the continuing failure on the part of DCHL/DCSV to act in accordance with the Heads of Terms, including failure to provide any of the benefits, failure to appoint him to the board of DCSV and failure to transfer to him 3.5% by value of the shares in DCSV, meant there was a serious problem. Accordingly, on 15 January 2009 he wrote to Mr Iyer setting out some of the issues and saying that: "…a number of the issues we agreed on over several days in London in May 2008 and which were reflected in the contract we signed have not eventuated.". Mr Wright sent a copy of the letter to Mr Burd who replied. "Good letter".
On 17 January 2009 Mr Wright received a letter in response from Mr Iyer. The letter stated that the police in Hyderabad had opened a dossier into his visa and that, if he travelled to India, he faced arrest, "from which we would not be able to extricate. " Mr Iyer suggested that, in these circumstances, they should "mutually rescind the agreement." Mr Wright spoke to Mr Modi and asked him whether he was aware of any investigation of visa misuse by foreign workers in relation to the IPL. Mr Modi replied that he was not. Mr Wright also mentioned to Mr Modi that he had a £10m severance guarantee in his contract with DCSV.
On 26 January 2009, Mr Wright instructed Maitland Hudson & Co ("MH&Co") in relation to his dispute with DCHL/DSCV.
In January 2009 MH&Co wrote on behalf of Mr Wright to DCSV asserting and accepting repudiatory breach of contract by DCSV and claiming a right to be paid sums in accordance with the Heads of Terms, including the £10m severance guarantee.
Following a review of the Heads of Terms dated 24 May 2008, MH&Co advised Mr Wright that the contract was silent on jurisdiction, and therefore DCHL/DCSV would almost certainly challenge the jurisdiction of the English courts should he bring a claim against them in England. It was Mr Wright's evidence that he was shocked by this and that this was the first time he was made aware that the clause providing for English law did not provide that any dispute would be resolved in England. In addition, MH&Co advised that the severance guarantee of £10million might be regarded as a penalty.
After he had instructed MH&Co, it was Mr Wright's evidence that he rang Mr Burd to tell him that he was not instructing LS in relation to the dispute with DCHL/DSCV and that he had been advised that the Heads of Terms were silent as to jurisdiction and that this would be a major problem. He said that Mr Burd replied, "Err I know." Mr Burd had no recollection of this exchange and did not believe it happened. I find that there was a conversation along these lines and that, whether or not Mr Burd said the words attributed to him, he did not claim that he had given Mr Wright detailed advice in relation to jurisdiction.
On 18 March 2009, MH&Co wrote to LS "Without prejudice save as to costs". The letter asserted that "the failure to include proper machinery in the Heads of Terms to enable proceedings to be initiated in England was negligent", that Mr Wright had a valid claim against LS in that regard and that LS should bring the matter to the attention of their professional indemnity insurers.
LS replied by letter of 24 March 2009 denying any negligence. The letter stated that:
"Mr Burd and Mr Wright also discussed the issue of having an exclusive jurisdiction clause. Mr Burd advised that there were pros and cons to this, but it was not known if Mr P K Iyer would agree to one, and it was also thought better to have the issue of jurisdiction open. As he explained, this was because of possible problems in enforcing an English judgment in India and because on consideration of the circumstances at the relevant time, it might be thought better to sue directly in India rather than England."
Mr Burd confirmed in evidence that he was consulted about this letter and that he read it before it was sent out.
The above passage in the 24 March 2009 letter was later corrected in a letter from LS to MH&Co dated 9 September 2009 as follows:
"Mr Burd has, as a result of your most recent request gone back through the file in greater detail and reviewed the emails which are attached to this letter. The e-mail dated 13 May, timed at 12:15 and already referred to above is when Mr Wright first outlined to Mr Burd in writing the possible deal he had been discussing with Mr Iyer. There is no mention of jurisdiction. The second email sent on 13 May timed at 13:21, with the heading: "Comments on Indian group" was understood by Mr Burd to attach a note Mr Wright had received from this unnamed "wise Indian". It contains no mention of jurisdiction. In the third email sent to Mr Burd by Mr Wright on 13 May and timed at 14:13 Mr Wright states: "English law or otherwise, can we just give some thought to how we would enforce the provisions of the contract on a company based in Singapore?" This email (and a reading of the time recording entry made by Mr Alexander on 12 May) has reminded Mr Burd that, at the time, Mr Wright thought the Deccan Chronicle holding company was a Singaporean corporation. Nothing happened between 13 May and the rushed drafting and meeting on 15 May to clarify the position and, as far as Mr Burd was concerned, he was having to deal with the drafting against the background of that uncertainty. It follows that what was stated in the final sentence of the paragraph numbered 1 of our letter to you dated 24 March 2009 was incorrect, and has to be qualified and corrected by the foregoing."
Meanwhile, on 2 February 2009, Mr Wright had issued the first English proceedings seeking damages in excess of £10 million. Permission to serve out of the jurisdiction was granted and the first English proceedings were purportedly served on DCSV and DCHL.
DCSV and DCHL disputed that the first English proceedings had been validly served on DCSV or DCHL and also, in the alternative, applied for orders that the English court should refuse jurisdiction over the dispute between Mr Wright and DCSV and DCHL and should set aside the order granting permission to serve out of the jurisdiction.
On 19 November 2009, Mr Wright issued the second English proceedings so as to nullify any complaint relating to the validity of the service of the first English proceedings. In the second English proceedings Mr Wright again sought damages of more than £10 million, but also asserted an entitlement to have the 24 May 2008 Heads of Terms rectified to include an express English jurisdiction clause.
Permission was once again granted to serve the second English proceedings on DCSV and DCHL out of the jurisdiction. Thereafter the papers to be served on DCHL and DCSV were lost and a second set of the papers to be served on DCHL and DCSV was received by DCHL and DCSV on 6 April 2010. In order to meet a further objection by DCHL and DCSV over the validity of service, Mr Wright obtained an order permitting alternative service of the second English proceedings on DCSV and DCHL.
In the jurisdiction challenge DCSV and DCHL again applied for orders that the English Courts should refuse jurisdiction over the dispute between Mr Wright, DCSV and DCHL, and that the order granting permission to serve the second English proceedings out of the jurisdiction should be set aside.
The jurisdiction challenge was dismissed by Master Fontaine on 15 December 2010. On 25 May 2011 Mr Justice Tugendhat dismissed an appeal by DCSV and DCHL against Master Fontaine's decision.
After serving a Defence and Counterclaim and a List of Documents in the second English proceedings, DCHL and DCSV ceased to take any active part in the second English proceedings.
Mr Wright's claim in the second English proceedings went forward to trial before HHJ Seymour QC on 16 July 2012. Mr Wright was represented by counsel. DCHL and DCSV were not represented.
HHJ Seymour QC awarded Mr Wright Judgment in the second English proceedings in the sum of £10,323,094, indemnity costs (which, while not assessed, are quantified by Mr Wright at £956,878.23) and interest on costs.
Since that time Mr Wright has made substantial attempts to enforce the Judgment against DCSV and DCHL in India, but with no success and, indeed, hardly any progress. Up to November 2014 the case had been vacated 41 times out of 44 hearing dates. In the proceedings DCSV and DCHL have taken every conceivable point open to them to challenge the enforceability of the Judgment. These include that the English court had no jurisdiction, that there was no proper trial, that there was no enforceable agreement and that the severance guarantee and resulting judgment is a penalty.
The undisputed Indian law expert evidence of Mr Tapia is that the time for execution of foreign judgments in India "may vary from three to five years or longer in some cases when the execution proceedings are heavily contested by the opposite party…". This has been borne out by Mr Wright's experience to date and he has been advised that there is no realistic prospect of him making any recovery, even if he had the financial means to pursue the proceedings further.
Aside from the difficulty of enforcement proceedings in India there is also the fact that DCSV/DCHL would appear to be insolvent. DCHL lost the IPL franchise in September 2012 following its failure to pay its players and its failure to put up the £10 million security required by the Indian court as a condition of any interim order preventing the loss of its franchise.
The Issues
The Issues to be determined may be summarised as follows:
(1) Was LS in breach of its duty of skill and care in:
(i) Failing to consider or advise on securing effective means of enforcement of DCSV and DCHL's obligations and in particular the obligation under the severance guarantee?
(ii) Failing to advise in relation to jurisdiction matters and to include an exclusive jurisdiction clause with provision for service of proceedings in the UK?
(2) Were these breaches causative of any and, if so, what loss?
The law
Standard of duty of care and skill
As a professional man and a solicitor Mr Burd was contractually obliged to exercise reasonable skill and care. The precise content of that duty will depend on the circumstances of the case and the nature and scope of any retainer.
Lewis Silkin and Mr Burd were retained to draft an employment contract to reflect the commercial terms agreed between Mr Wright and Mr Iyer. Mr Wright wanted a binding agreement to be concluded whilst Mr Iyer was in London so there was a degree of urgency. It was suggested by Mr Burd at an early stage and agreed by Mr Wright that this was best done by a Heads of Terms agreement.
Mr Burd was retained to consider and advise upon the appropriate terms for such an agreement, not merely to produce a draft which reflected what had already been agreed.
As Mr Burd accepted in evidence, his retainer included giving such advice as might appear appropriate to the work he was doing. As LS accepted in its final submissions, it was being asked to provide input and advice in relation to the Heads of Terms.
A helpful summary of the standard of skill and care required of a specialist solicitor such as Mr Burd is set out in Jackson & Powell on Professional Liability (7th edition) at 2-131:
"The standard of skill and care which a professional person is required to exercise is that degree of skill and care which is ordinarily exercised by reasonably competent members of the profession, who have the same rank and profess the same specialisation (if any) as the defendant."
In relation to solicitors, rank is of less importance since work will be done under the supervision and responsibility of a partner, even if not carried out by one. In this case Mr Burd was a partner and the joint head of the Employment Department.
The relevant specialisation was employment law, including multi-national, cross-border work. This was also the nature of the work LS were being asked to undertake in this case.
To similar effect to the summary set out in Jackson & Powell is Eckersley v. Binnie & Partners (1998) 18 Con. L.R. 1 or (1955-1995) P.N.L.R. 348 at p382 per Bingham L.J:
"The law requires of a professional man that he live up in practice to the standard of the ordinary skilled man exercising and professing to have his special professional skill".
Mr Burd's "special professional skill" was as a specialist in employment law, including multi-national, cross-border work – see also Matrix-Securities Ltd. v. Theodore Goddard [1998] S.T.C. 1 at p.27; Swain Mason v Mills & Reeve [2011] EWHC 410 (Ch) [2011] W.T.L.R. 1589 at [149].
Mr Wright placed emphasis on the publicity materials produced by Lewis Silkin and the "sales pitch" it made to DCHL. These emphasised that Lewis Silkin was a leading and top ranked firm, as borne out by statements made in various legal directories. Whilst such material may fuel expectations, it does in itself not mean that the standard of skill and care is subject to a sliding scale according to whether solicitors are or claim to be a "leading" firm.
Mr Wright submitted that the appropriate standard was "solicitors fully equipped to handle, at the leading edge as at May 2008, complex multi-national employment work, in particular, the drafting of high-value employment contracts for senior executives consulting English solicitors when proposing to work for Asian organisations". If one removes the sales pitch language, this is essentially a statement of the general standard already identified, but related to the particular factual context of the present case. Multi-national, cross-border employment work will often be complex and will include high value contracts, senior executive contracts and contracts to work for Asian organisations, amongst others.
Causation
The proper approach to the issues of causation was common ground between the parties in accordance with the guidance provided in Allied Maples Group Ltd v. Simmons & Simmons [1995] 1 WLR 1602.
Where the relevant contingency depends on what the claimant would have done then that has to be proved on the balance of probabilities.
In the present case the alleged breaches of duty include failure to advise. In such a case the next step is to consider whether the claimant would have acted in a way different from the way in which he did in fact act. This, although a hypothetical question, is to be decided on the balance of probabilities. In deciding this question, the court will have regard not only to the current opinion of the claimant as to how he would have behaved in any hypothetical situation, but also to the contemporaneous facts insofar as they show what the considerations were for the decision-maker at the time or provide a basis for inference.
If it is not proved on the balance of probabilities that the claimant would have acted in a different way had the defendant advised correctly, the claimant loses and recovers only nominal damages
If it is proved on the balance of probabilities that the claimant would have acted in a different way but what would then have happened depends on the actions of third parties, or other hypothetical contingencies independent of the claimant, then the claimant recovers damages provided he can prove that he had a real or substantial as opposed to a speculative chance of a better outcome - see Allied Maples at pp.1610D-1614, particularly 1614D.
If this threshold is crossed then the court awards damages on a loss of a chance basis. This may be simple if there was only one potential favourable outcome, or more complex if there were others. If the one favourable outcome was a certainty, the award will be 100% of the loss; down at the bottom of the range the percentage may be very low.
Issue (1) - Was LS in breach of its duty of skill and care in failing to consider or advise on securing effective means of enforcement of DCSV and DCHL's obligations and in particular the obligation under the severance guarantee?
Mr Wright's pleaded case was that his position could have been secured by:
(1) "obtaining a UK bank guarantee or performance bond in favour of the Claimant;
(2) the placing of a sum of money equal to the amount of the severance guarantee by DCH into an escrow account in the UK; and/or
(3) obtaining personal guarantees from Mr Iyer, Mr Ravi Reddy or Mr Ram Reddy; and/or
(4) securing a charge over the property at Buckingham Gate which Mr Burd understood belonged to Mr Iyer."
By the time of the trial only the first of these options was still pursued, namely that security should have been sought in the form of a UK bank guarantee or performance bond.
There was no satisfactory evidence as to whether, how or at what cost an Indian company could have provided such UK security. Such evidence as there was suggested that there would have been exchange control issues and that the cost would have been at least £100,000 a year.
There was equally no evidence of any such provision ever having been included, or even having been proposed to be included, in any employment contract.
Mr Burd's evidence was that: "I can say categorically that in all my years of practice, I have never seen it proposed, either on behalf of a prospective employer or employee, that such a clause be included in an employment contract".
That evidence was not changed in cross-examination during which he emphasised that: "I have never once seen that [a security provision of the type contended for] in any employment contract … Even these large financial institutions do not, ever, provide security for often very, very large payments". I accept that evidence.
Mr Wright stressed that Mr Burd's experience is primarily on the employer side and therefore his evidence is of limited value. However, Mr Burd did on occasion act for employees and, even when he did not, the counterparty would be an employee. Nevertheless, he had never seen such a provision being proposed.
It is correct that there are many commercial contracts in which an obligation of payment may be required to be backed by a bank guarantee or performance bond. Mr Wright cited some reported examples. None of these cases concern contracts of employment or analogous contracts.
It is also correct that Mr Burd was alive to the possible difficulties of enforcement against DCSV: hence his inclusion of the owner of the franchise in the definition of "Employer" and his inclusion of a parent company guarantee. He was also aware from the PRR email that somebody had some concerns about whether those behind DCSV/DCHL were completely honourable and that this could be a risk. At the time, however, DCHL and the owner of the franchise were considered to be substantial businesses with valuable assets. As Mr Wright said in evidence, he was confident that DCHL was able to pay £10 million if that became necessary. In any event, the reliability of a contractual counterparty is essentially a commercial rather than a legal matter.
The evidence shows that for a solicitor in Mr Burd's position to consider the provision of security would be unprecedented. It would also run contrary to and potentially undermine the relationship of trust and confidence upon which an employment relationship is based. As a general matter, it would simply not be on an employment lawyer's radar.
After careful consideration of the evidence and the parties' written and oral submissions I find that Mr Burd was not in breach of duty in failing to consider or advise on securing effective means of enforcement of DCSV and DCHL's severance payment obligations for the reasons outlined above and in particular:
(1) There is no evidence of such a provision ever being included or even proposed for inclusion in an employment contract.
(2) Mr Burd, with his very considerable experience, has never seen such a clause being proposed.
(3) No authority, textbook or article has been identified describing or discussing the possible inclusion of such a provision in an employment contract.
(4) It runs contrary to and would undermine trust and confidence.
(5) Reliability of performance is essentially a commercial rather than a legal matter.
(6) At the time both Mr Wright and Mr Burd understood DCHL to be a substantial business.
(7) It is striking that such an allegation was not included in the initial allegations of negligence made against LS by MH&Co (who were advised by leading counsel at the time) and was made for the first time in 2014.
(8) It is also striking that three of the four means of providing security suggested for the first time in 2014 have since been dropped.
Even if I had found there to have been a breach of duty, I would have rejected Mr Wright's case on causation. This would have been a complicated, controversial and costly proposal. It was complicated because the exact form of security would have had to be discussed and agreed and, once that had been done, it would have been necessary to investigate whether and how it could be done and, if it could, the costs of so doing. That was going to take considerable time. It was controversial because it implied that DCSV/DCHL would not only fail to honour their contract and the financial obligations assumed thereunder, but that they also would fail to honour a court judgment (the likely trigger of any such security arrangement). It was costly because any arrangement was going to have a significant annual cost for DCSV/DCHL to cover an eventuality which Mr Iyer was saying was never going to occur. Further, Mr Wright wanted to get the deal done. As Mr Burd explained in evidence, he wanted to create as few obstacles as possible to the signing of the deal and did not want to do anything to scare Mr Iyer away.
In these circumstances I find that, if he had been fully advised as to what was involved in putting forward such a proposal, Mr Wright would have chosen not to do so. Even if he had decided to put forward such a proposal, I am not satisfied that there was a real or substantial chance of Mr Iyer accepting it. Mr Iyer had refused a number of lesser, simpler and uncontroversial financial requests and I have no doubt that he would have refused this too. Even if that be wrong, I am not satisfied that there was a real or substantial chance of DCSV/DCHL providing and maintaining such security as they may have agreed. This is made manifest by their complete failure to honour most of their contractual obligations, including all financial obligations other than those for immediately due, up front payments.
Issue (2) - Was LS in breach of its duty of skill and care in failing to advise in relation to jurisdiction matters and to include an exclusive jurisdiction clause with provision for service of proceedings in the UK?
The central matter to be decided in relation to this issue is whether or not Mr Burd did in fact advise Mr Wright in relation to jurisdiction matters. He says that he did. Mr Wright says that he did not.
Mr Burd's evidence therefore implicitly acknowledges that it was appropriate for him to consider and advise upon jurisdiction issues, as he claims to have done. Indeed it was realistically accepted by LS that any solicitor dealing with an international contract of this type should consider and advise upon jurisdiction. If he did not do so then he was negligent.
After careful consideration of the evidence and the parties' written and oral submissions I find that Mr Burd did not advise in relation to whether or not a jurisdiction clause should be included for the following reasons in particular:
(1) Neither party put the case on the basis that either of the key witnesses was lying. On both sides the essential case was put as one of faulty memory or reconstruction. In any event, I accept that both witnesses gave truthful evidence to the best of their recollection. In such circumstances the inherent probabilities are of particular importance.
(2) There are a number of evidential matters which support the inherent probability of Mr Wright's account that he was not advised in relation to the jurisdiction clause. In particular:
(i) As already found, he was advised by the "Wise Indian" that he should ensure that dispute resolution was in England and that India should be avoided.
(ii) Mr Wright's own experience at IMG reinforced the good sense of avoiding litigation in India.
(iii) Mr Wright had concerns about enforcement abroad, as borne out by the 14.13 email.
(iv) Mr Wright's understanding was that choice of law carried with it choice of jurisdiction.
(v) Against that background, if Mr Burd had advised as to the "pros and cons" of choosing English jurisdiction Mr Wright's immediate and strong response would have been to insist on English jurisdiction. That is what he had been advised to do and that is what he thought the choice of English law would be achieving. Moreover, leaving jurisdiction open would have meant the possibility of litigation in India which, as far as Mr Wright was concerned, was to be avoided at all costs.
(vi) If Mr Wright had been advised that it was unwise to include a jurisdiction clause because it was not known where DCSV and/or DCHL were incorporated or based he would have asked Mr Burd to find that out. He would also have said that as far as DCHL was concerned, it was obviously based in India.
(vii) On any view there would have been a discussion about the matter, and that is something Mr Wright would have remembered. This is all the more likely if the discussion was in anything like the detailed terms suggested by Mr Burd.
(viii) This was a matter of abnormal importance to Mr Wright at the time. As such, he is likely to have a good general memory of it. Although I do not accept that his recollection is accurate on every point of detail, it is virtually inconceivable that he could have forgotten the suggested detailed discussion on jurisdiction.
(3) By contrast there are a number of evidential matters which detract from the inherent probability of Mr Burd's account. In particular:
(i) The initial account given by Mr Burd of the "pros and cons" discussion was that he advised that jurisdiction should be kept open because it might be better to sue in India. As was later acknowledged, this was incorrect. However, it is the first account in time and it would have been provided after careful consideration and reflection, given that it was in response to a letter of claim from MH&Co.
(ii) The corrected version gave a different explanation. Now it was said that jurisdiction was kept open because of the uncertainty surrounding where DCHL was incorporated and the possibility that it was in Singapore.
(iii) These differing accounts indicate that in March 2009 Mr Burd had no clear recollection of the claimed discussion. Further, the reason given for the changing account was going through the file in greater detail. This suggests a process of reconstruction rather than recollection.
(iv) There are also differences between the corrected account, the pleaded account and Mr Burd's evidence. The corrected account refers only to uncertainty surrounding the position of DCHL. The pleaded version refers to uncertainty surrounding the position of both DCSV and DCHL. Mr Burd's witness statement evidence refers only to uncertainty surrounding the position of DCSV. These inconsistencies are also indicative of reconstruction rather than recollection.
(v) Neither of the reasons given in Mr Burd's initial accounts are compelling. The notorious delays involved in litigation in India means that it is not a place you would advise someone to sue, as Mr Wright knew and Mr Burd should have known. The uncertainty of where DCHL or DCSV was incorporated could have been simply addressed by making inquiry, if necessary of Mr Iyer. In any event, it was clear that DCHL's operations were based in India and that that was where its principal assets were.
(vi) If Mr Burd had been concerned about being tied down to litigation in England by an exclusive jurisdiction clause the obvious alternative to consider and discuss would have been a non-exclusive jurisdiction clause, in accordance with LS's own contract precedent. Mr Burd claimed to have done so (in which case it is even more likely that the discussion would have been remembered by Mr Wright), but his reason for advising against it is again not compelling. He suggested that such a clause might prevent Mr Wright suing in Singapore, but there is no reason why a non-exclusive clause should have that effect.
(vii) In contrast to Mr Wright, for Mr Burd this was a matter of normal importance and his memory therefore less likely to be heightened.
(viii) Mr Burd had no notes or record of any advice given. Notwithstanding the haste with which the drafting exercise was being done, if detailed advice was given and followed on such a potentially important matter one would expect there to be some record of it.
(ix) Mr Burd did not claim to have given detailed advice to Mr Wright on jurisdiction when the issue was first raised with him by Mr Wright on the telephone in early 2009.
(x) I accept that Mr Burd is a generally careful and competent solicitor and that he did have concerns about the fact that DCSV might not exist. This is reflected in his definition of "Employer" and his suggestion that there be a parent company guarantee. However, on neither of these matters was his thinking explained to Mr Wright. The same is likely to be the case in relation to his omission of a jurisdiction clause.
(xi) I also accept that Mr Burd is a truthful witness and that he genuinely believes that he did go through the "pros and cons" with Mr Wright at the time. However, I find that this reflects faulty reconstruction rather than accurate recollection.
I accordingly find that Mr Burd did not advise Mr Wright in relation to jurisdiction matters. Alternatively, if he did, he did not do so in sufficiently clear and explicit terms for Mr Wright to appreciate that this was an issue and, moreover, one which required consideration and choice.
In all the circumstances I find that LS was in breach of duty in failing to advise Mr Wright properly or at all in relation to jurisdiction matters.
Mr Wright further contended that Mr Burd was negligent in failing to consider and advise upon the inclusion of a provision for service of proceedings in the UK.
With the benefit of hindsight one can see how Mr Wright would have been better off with such a clause. However, there was no evidence that this is a usual provision in an employment contract, or indeed of any employment contracts containing such a clause. By contrast, jurisdiction clauses clearly are a common feature of international employment contracts, as is reflected in LS's own precedent. That precedent contains no service of process provision.
Service of process involves different issues to jurisdiction. It is a more obvious concern to a litigator than a contract lawyer. It also raises practical questions of who is to be authorised to accept service and how that is to be arranged. Unlike the issue of jurisdiction, it clearly did not occur to Mr Burd. I do not find that surprising. Nor was there anything to put him on notice that there might be serious service issues.
In all the circumstances I am not satisfied that it has been proved that LS was in breach of duty in failing to advise upon or include a provision for service of proceedings in the UK.
Issue (3) - Was LS's breach of duty in failing to advise in relation to jurisdiction matters causative of any and, if so, what loss?
The first issue which arises on causation is whether Mr Wright would have insisted on an exclusive English jurisdiction clause had he been advised in relation to it. I am satisfied that he would have done so given the advice he had received from the "Wise Indian", the importance of avoiding proceedings in India and the obvious desirability for him, as a private individual, of a home jurisdiction. Indeed I am satisfied that this would have been his decision even if Mr Burd had advised in the negative terms he suggested. For Mr Wright the choice was clear and he would have insisted that this be included in the Heads of Terms to be presented to Mr Iyer.
In these circumstances it is not necessary to determine precisely what LS's advice should have been. On any view LS should have set out the "pros and cons" so that an informed decision could have been made. Mr Wright's decision would have been to include an exclusive jurisdiction clause regardless of the further advice Mr Burd would or should have given.
It is similarly not necessary to decide whether LS was in breach of duty in failing to include an exclusive jurisdiction clause. As a matter of fact such a clause would have been included had Mr Wright been advised in relation to jurisdiction.
The next issue which arises is whether there was a real or substantial chance that Mr Iyer would have agreed to English jurisdiction. I find that there was and that the probability of him so doing is high. Although I have found that Mr Iyer made no comment about jurisdiction, his general attitude was that he was not concerned about being sued since, as he stated, "I don't intend to break this contract". He would also have been aware that even if English jurisdiction was agreed that would still leave open the question of enforcement in India, which he would have known was far from straightforward. Viewed at the time, there was no real downside to agreement to English jurisdiction and he is very likely to have so agreed.
This leads on to the issue of whether there was a real or substantial chance that Mr Wright would have been paid the judgment amount or a lesser settlement sum if the Heads of Terms had contained an exclusive jurisdiction clause. This falls to be addressed on the basis of no security being provided in this country against which a judgment could have been enforced and for the consequent need to seek enforcement in India.
In the light of the evidence as to the delays involved in enforcement proceedings in India, Mr Wright realistically had to accept that, even if judgment had been obtained in England earlier because of the jurisdiction clause, he would not have obtained an enforceable judgment in India before DCHL became insolvent and the franchise was lost in around September 2012. His case was that, if he had been armed with an English court judgment in 2010, DCSV/DCHL would have been constrained to pay it or at least settle with him for reputational reasons and because of the risk that they would otherwise lose the IPL franchise. In support of that case he relied on the evidence of Mr Modi, who was the IPL commissioner until 26 April 2010. This case involves consideration of a number of steps and in particular:
(1) When an English judgment would have been obtained if the Heads of Terms had contained an exclusive English jurisdiction clause.
(2) Whether and if so what pressure would have been brought to bear by the BCCI on DCSV/DCHL to pay the judgment.
(3) How DCSV/DCHL would have responded to any such pressure.
As to (1), it is apparent that DCSV/DCHL would have taken every step possible to defeat or delay the successful prosecution and enforcement of Mr Wright's claim, as they have done.
In relation to the first English proceedings DCSV/DCHL took issue not merely over jurisdiction but also in relation to service. These service issues led to the second English proceedings being issued and served. Even if DCSV/DCHL had resolved not to raise a jurisdiction challenge in the light of the agreed exclusive jurisdiction clause, I have no doubt that they would have taken any service points open to them. The consequence is that, regardless of any jurisdiction clause, effective proceedings would not have been served at any earlier stage – i.e. not until the second English proceedings were served on 6 April 2010.
Thereafter DCSV/DCHL may have decided to challenge jurisdiction regardless of lack of merit in such an application because it might assist in resisting enforcement in India thereafter. However, I accept that there is a good chance that they would not have done so.
As to DCSV/DCHL's attitude to the defence of the claim in circumstances where it made no jurisdiction challenge there is no good reason to expect it to be any different to the approach it in fact adopted. That was to serve a defence and to participate in proceedings up to and including disclosure, but not thereafter. This lack of later participation assisted them in arguing in the Indian proceedings that the English proceedings went ahead in their absence and that there was no proper trial.
On this basis it is reasonable to expect that the proceedings would have proceeded to judgment in a similar timescale as between Tugendhat J's dismissal of the jurisdictional challenge (May 2011) and HHJ Seymour's judgment on the claim (July 2012) – i.e. 14 months. That would have meant judgment being obtained in June 2011.
As to (2), by June 2011 Mr Modi was long gone and therefore evidence of what he would have done is not directly relevant. Indeed, even if there had been no service issues in respect of the English proceedings, Mr Wright is most unlikely to have obtained judgment before sometime in April 2010, at the earliest. Even if he did obtain judgment then, the chances of him requesting Mr Modi to take action, let alone Mr Modi acting thereon, prior to Mr Modi's abrupt dismissal on 26 April 2010 are extremely remote.
Mr Modi's evidence was as follows:
"I have been asked by Mr Wright to assume that he had obtained the same Judgment in 2010 and then say what, if anything, the BCCI/IPL would have done when it became aware of such a Judgment. As set out above, I was as at April 2010 the Commissioner of the IPL. Had Mr Wright obtained judgment against DCHL in early 2010, I would have told DCHL to pay Mr Wright the amount ordered under the judgment. Enforcement proceedings brought in India by a former CEO against a franchisee would have tarnished the reputation of all the teams, other key stakeholders and the league. I was responsible to the BCCI, to the broadcasters (who had agreed to pay $1.6 billion for the television rights) to DLF, the title sponsor, and to all other sponsors and licensees as well as to the other seven franchisees (who had agreed to pay $617m for the franchise rights) for the continuance of the good name and reputation of the IPL, and the inevitable negative publicity that would have followed these proceedings would have been unacceptable. I therefore would have instructed DCHL to fulfil its obligations to Mr Wright under the judgment in order not to bring the league into disrepute.
The BCCI maintained the right under the terms of the franchise agreement to terminate the franchise in such circumstances. Further, had Mr Wright obtained his judgment at some time after I left the IPL, I would expect the BCCI to have adopted a similar stance to that described above. It is a matter of record that the BCCI did cancel the franchise owned by DCHL for reasons of owing money to various parties including those in its employ.
I am satisfied that, as I explained above, given the potential value of DCHL's franchise in 2010 which would have been forfeited had the franchise been terminated, DCHL, faced with such a stark choice, would have agreed to my demand and paid Mr Wright."
Although Mr Modi's evidence is not directly relevant it does explain why and how commercial pressure could have been brought to bear on DCHL and Mr Modi expresses the view that it would have been, even after his departure.
LS criticised Mr Modi's evidence generally and submitted that his evidence as to what would have happened after his dismissal was mere speculation. LS also pointed out that Mr Modi said in oral evidence that at some stage he had a discussion with Mr Ram Reddy about Mr Wright's dismissal but that had not seemingly made any difference to DCHL/DCSV's position.
LS also stressed that there is no evidence from anyone in a position of responsibility within the BCCI at the material time – i.e. on my findings, mid June 2011 onwards. LS further submitted that such evidence as there is indicates that Mr Modi's successors at the BCCI would not have taken the stance he suggested. In particular, as Mr Modi explained in evidence, in his view there were serious reputational issues (notably alleged match fixing) about which his successors at the BCCI took no action. Further, MH&Co did write to Mr Modi's successor on 29 April 2010, enclosing the Particulars of Claim, highlighting reputational issues and urging him to intervene against DCSV, but there is no evidence of any response, still less action.
Mr Wright submitted that the situation would have been changed if the BCCI had been presented with an English court judgment. Defying an English court judgment is very different to refusing to make a payment in disputed circumstances. It raises clear reputational issues which the BCCI would have been anxious to address, as shown by the action they eventually took against DCHL over issues of non-payment. LS's response was that if, which was unlikely, BCCI had raised the issue of the judgment with DCSV/DCHL, they would have responded that the judgment was not enforceable for the multifarious reasons they have raised in the Indian enforcement proceedings and that the matter would have been taken no further.
The action taken by the BCCI against DCHL in 2012 centred on DCHL's failure to pay players, support staff, associations and overseas cricket boards. These had not led to any judgments against DCHL, although the claims were not seemingly disputed. Mr Wright's Judgment appears to have been brought to the attention of the Indian court during the course of the injunctive proceedings brought by DCHL and its response is said to have been to contend that it was "ex parte" and was being challenged. The judgment of the Indian court does, however, refer to the anxiety expressed by BCCI's counsel their that "the failure on the part of DCHL to fulfil their contractual commitments may tarnish their image in International cricketing circles" and the judgment acknowledges that the court has "to keep in mind the interest of BCCI, the game and its players more particularly the image of BCCI in the International Cricketing World".
Having carefully considered the parties' evidence and submissions my conclusion is that there was a real or substantial chance of the BCCI requiring DCHL to fulfil its obligations under the Judgment. I so find essentially for the reasons given by Mr Wright. In particular: reputation was important to the IPL and the BCCI; the BCCI had the power to insist that a franchisee met its obligations so as to protect that reputation; the obligation in question arose under an English court judgment; it related to a claim about which there had been much publicity, and the BCCI did ultimately take action against DCHL for failing to make payments which raised reputational concerns. On the other hand, I also find that the probability of BCCI so acting is low for the reasons relied upon by LS, as outlined above, and in particular, the fact that the judgment would have been obtained after Mr Modi's departure, the fact that there is no direct evidence from those involved thereafter and the evidence of lack of action on their part.
As to (3), if in mid 2011 the BCCI had required DCHL to satisfy the Judgment or risk losing its franchise there would have been a very strong incentive for it to do so. The IPL Hyderabad franchise was extremely valuable. In 2010, for example, the BCCI had sold franchises for the city of Kochi for US$330 million and the city of Pune for US$370 million, both of which are smaller cities. In 2011 DCHL would appear to have been in reasonably good financial health. In 2012, when it was facing serious financial problems, it would appear from the Indian court judgment that it was nevertheless able to put in place arrangements to make the outstanding third party payments identified by BCCI when faced with the loss of its franchise. No doubt DCHL would have sought to negotiate a settlement with Mr Wright rather than pay the total judgment sum. The total judgment sum, including interest and costs, would have been over £11 million, but the headline judgment sum was the principal sum claimed in the proceedings of £10 million. In all the circumstances I consider that this is the appropriate sum against which to assess the loss of a chance.
Having carefully considered (1), (2) and (3) above, my conclusion is that Mr Wright did have a real or substantial chance of recovering the principal Judgment sum had there been an exclusive jurisdiction clause in the Heads of Terms, but that the value of that chance is low.
In the light of the findings made, including the prospects of Mr Iyer agreeing to an exclusive jurisdiction clause, I have to determine the value of Mr Wright's lost chance. Having regard to my findings, the evidence as a whole and the parties' submissions my assessment of the value of that chance is 20% of the principal judgment sum of £10 million – i.e. £2 million. That conclusion is the same whether I take an overall view of the value of the lost chance or rate the chances of success for each contingency progressively.
On my findings Mr Wright also had a real or substantial chance of a costs saving in the English proceedings as a result of avoiding a jurisdictional dispute. The relevant costs sum consists of the costs incurred in relation to the jurisdiction challenge, less those attributable to the service issue and those paid by DCHL. I find that the value of that lost chance to be 80% of that sum.
Conclusion
In summary, I conclude that Mr Wright's claim fails on Issue (1) but succeeds on Issue (2). In relation to Issue (3) I find that he is entitled to damages of £2 million in respect of the lost chance of judgment satisfaction and a sum to be determined or agreed in relation to costs saving.
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Mr Justice Warby:
This is the pre-trial review of this libel action by the former MP Tim Yeo against the publishers of The Sunday Times, which relates to articles published on 9 June 2013 and 23 June 2013. The action is due for trial by me over 7 days commencing on 12 October 2015.
All the articles complained of stemmed from an undercover investigation undertaken by two journalists of the Sunday Times "Insight" team, Heidi Blake and Jonathan Calvert. Ms Blake and Mr Calvert posed as representatives for a solar energy concern in the Far East. Central to the story was what Mr Yeo said at a lunch with the two journalists at Nobu restaurant on 21 May 2013.
By a judgment of 20 August 2014 I determined, as preliminary issues in the case, the meanings of the articles complained of. The full meanings I found the articles to bear can be seen from my judgment: [2014] EWHC 2853 (QB), [2015] 1 WLR 971 [121], [126], [138] and [139]. The central factual allegations I identified were to the effect that Mr Yeo was prepared to and had offered to act in a way that was in breach of the Code of Conduct of the House of Commons, by acting as a paid Parliamentary advocate.
I also found that the 9 June article contained comment to the effect that Mr Yeo had behaved scandalously, and shown willing to abuse his position in Parliament to further his own financial and business interests in preference to the public interest.
The defendant (TNL) contends that the factual meanings of the articles are true, that the comment was fair comment, and, or alternatively, that the content of each article represented responsible journalism on matters of public interest.
This judgment addresses the most substantial issues to which argument has been addressed at this PTR, which are the following:
i) The extent to which Article 9 of the Bill of Rights 1689 applies to the issues in the case, and its potential implications for the trial. Mr Yeo's team has raised the question of whether the court should at this stage lay down "ground rules" on that issue.
ii) An application by TNL for an order striking out, or summary judgment on, the claim in respect of the 23 June article.
iii) An application by TNL to strike out passages in the claimant's witness statement which it maintains are irrelevant or otherwise inadmissible or illegitimate, and related parts of the claimant's statements of case.
iv) An application by Mr Yeo for the court's approval of an amendment to his costs budget.
The Bill of Rights
Article 9 of the Bill of Rights 1689 provides "That the freedome of speech and debates or proceedings in Parlyament ought not to be impeached or questioned in any court or place out of Parlyament." This embodies a vital constitutional principle, which can conveniently be referred to as Parliamentary Privilege.
In my August 2014 judgment at [12] I referred to a report of the House of Commons Committee on Standards of November 2014 (the Standards Report) on which, at that stage, Mr Yeo was relying as having exonerated him of any breach of the MPs' Code of Conduct. I recorded that TNL took issue with that, maintaining that the Standards Report was concerned with different issues, did not exonerate Mr Yeo of the allegations made in the articles, and could not in any event affect the issues in this action.
I did not at that stage have to address any issues that this might generate about Parliamentary Privilege, but noted at [13] that "No issue has so far arisen as to whether any of the issues in this case are, on account of their connection with Parliamentary proceedings, fit for adjudication by a court at all". Issues of that kind have now arisen, and to make what follows comprehensible I will need to sketch out how that has happened.
Events since August 2014
Following my judgment of August 2014, the parties amended their statements of case to reflect the meanings I had found. Mr Yeo amended his Particulars of Claim to substitute those meanings for the meanings of which he had initially complained. At paragraph 10 he retained his complaints, relied on in aggravation of damages, that TNL had failed to report the Standards Report; that it had delayed in providing a transcript to the Parliamentary Commissioner for Standards, who was conducting an investigation; and that it had continued publishing the articles online even after the Standards Report was published.
Turning to the Amended Defence, the gist of the defence of justification or truth pleaded by TNL was that the defamatory factual sting that I found the articles to bear could be proved true by reference to Mr Yeo's behaviour at the Nobu lunch on 21 May 2013. The defence of fair comment or honest opinion relied on his conduct at the lunch, together with a limited range of other factual matters, mainly concerned with business activities and jobs held by Mr Yeo outside Parliament. The defence of Reynolds privilege or public interest set out reasons for concluding that the general and the specific subject matter of the articles were issues of public interest, and went on to assert that "The account of how C had conducted himself at the lunch was a matter of considerable public interest and concern."
The three defences pleaded by TNL did not obviously involve any impeachment or questioning of anything said or done in Parliament, or give rise to any need for any such conduct to be impeached or questioned. Plainly, the lunch meeting was not a Parliamentary proceeding of any kind. Nor did the particulars of the facts relied on detail any parliamentary activity on which TNL relied to prove its case.
As for the claim for aggravated damages, TNL's position remained in the Amended Defence as it stood before my August decision: TNL disputed Mr Yeo's case about the Standards Report; maintained that it could not affect the issues in this action; and asserted that it provided a copy audio-visual recording to the House "in reasonable time". The statements of case therefore gave rise to live issues about the relevance of the Standards Report, but at that stage neither side apparently saw any issue of Parliamentary Privilege arising.
In October 2014 Mr Yeo's Reply was served. This was a lengthy and detailed document. I addressed one aspect of it in my second judgment in this case, in February 2015, when I struck out the plea of malice: [2015] EWHC 209 (QB), [2015] 1 WLR 3031. For present purposes however the important aspect of the Reply is paragraph 7, which responds to the Reynolds/public interest defences. This contains passages which explicitly rely on and quote from Parliamentary statements. Paragraph 7.4(1), for instance, responds to TNL's reliance on the fact that previous Sunday Times articles had led to the suspension of two peers. It does so by quoting statements from a Privilege Committee report which were critical of the journalists concerned, who included Mr Calvert. Paragraph 7.4(4) quotes from and relies on a report of the Committee on Standards concerning a joint investigation by The Daily Telegraph and BBC Panorama concerning Patrick Mercer MP.
Paragraph 7 of the Reply goes on to refer to the need, under the Editors' Code of Practice of the Press Complaints Commission, for journalists to have a public interest justification before resorting to the use of subterfuge. At paragraph 7.11, noting that "the Defence contains no particulars whatsoever of the alleged decision to use subterfuge", the Reply makes clear that "pending disclosure and/or further information on this point" the Claimant's case is "that the Defendant had no sufficient basis on which to justify the use of subterfuge against the Claimant." Paragraph 7.27 refers to "the journalists' blatant fishing expedition [which] was utterly inconsistent with the tenets of responsible journalism." Paragraph 7.28 alleges that the journalists had "no evidence that [Mr Yeo] had ever given any indication that he would act [as a public advocate in breach of the rules]."
The rules of pleading do not call for any response to a Reply. Even in libel actions, which feature more statements of case than many other kinds of claim, a Rejoinder is extremely rare. But TNL responded to the case for Mr Yeo when witness statements were exchanged on 22 May 2015. TNL's statements, of which there were 5, included an account of how and why the journalists came to investigate Mr Yeo, the evidence they obtained that led them to conclude that Mr Yeo might be behaving improperly, and the way in which the justification for subterfuge was approached by them and the Editor, Martin Ivens, and Managing Editor (News), Charles Hymas. Some of the material relied on by the witnesses for this purpose related to Mr Yeo's past Parliamentary conduct.
Mr Yeo's team does not appear to have seen this as presenting a problem, initially. Indeed, they served a statement from Mr Yeo which itself contained a large number of passages placing reliance on the Standards Report, or what Mr Yeo had said to the Commissioner. According to the submissions of Mr Browne QC the first time that the claimant's team appreciated that there might be an issue of significance concerning Parliamentary Privilege was when they received a letter from TNL's solicitors on 6 July 2015. This attacked the content of Mr Yeo's witness statement, and parts of his pleadings, and invited his solicitors to agree that specified paragraphs or parts of paragraphs should be struck out.
The first objection taken by TNL, which applied to considerable parts of the witness statement, was that it referred to the Standards Report. Such material was said to be irrelevant and inadmissible for four separate reasons: (1) the issue considered in the Standards Report, namely whether Mr Yeo had acted in breach of the Code of Conduct, does not arise in this claim; the published allegation was that he was "prepared to and had offered himself as willing" to act in a way that was in breach of the Code; (2) in any event, it is for the court to adjudicate on the dispute and the views expressed in the Report are immaterial; (3) reliance on Parliamentary proceedings in support of Mr Yeo's case was objectionable in principle, as there would otherwise be unfairness to TNL because Parliamentary Privilege would preclude it from disputing the views relied on; (4) for similar reasons references to alleged delay in the provision of recordings by TNL to the Commissioner were objectionable. The first two of these points had been made at the outset, in TNL's original Defence.
The application to amend the claimant's costs budget reveals that over the following days Mr Yeo's solicitors and Counsel incurred nearly £21,000 in costs addressing the Parliamentary Privilege issue and related matters. They responded by letter of Friday, 10 July 2015. Their letter did not address the detailed objections raised on 6 July. Instead, under the heading "References to the Standards Report" the letter expressed surprise that the point had been raised so late. It was said that if it had been raised sooner Mr Yeo could, if necessary, have waived Parliamentary Privilege by virtue of s 13 Defamation Act 1996, which provided so far as relevant as follows:
"13.— Evidence concerning proceedings in Parliament.
(1) Where the conduct of a person in or in relation to proceedings in Parliament is in issue in defamation proceedings, he may waive for the purposes of those proceedings, so far as concerns him, the protection of any enactment or rule of law which prevents proceedings in Parliament being impeached or questioned in any court or place out of Parliament.
(2) Where a person waives that protection—
(a) any such enactment or rule of law shall not apply to prevent evidence being given, questions being asked or statements, submissions, comments or findings being made about his conduct, and
(b) none of those things shall be regarded as infringing the privilege of either House of Parliament."
This is the provision that enabled Neil Hamilton MP to sue Mohammed Al Fayed for allegations about his Parliamentary activities often described as "cash for questions". Section 13 was however repealed by the Deregulation Act 2015 with effect from 26 May 2015. Both parties were therefore bound to ensure that their evidence did not offend Article 9, suggested Carter-Ruck. It was proposed that the parties should try to agree the "ground rules" for the application, and invite the court to make a ruling. A schedule of what were said to be the principles was attached to the letter of 10 July.
The letter went on:
"Our preliminary view is that much of the potentially problematic evidence can be omitted with little or no effect on the claim or defence. Even without Article 9, good case management would demand that the essential issues in this case are tried by reference to the transcript/recordings of the meeting, the dealings between the parties before and after the meeting and your client's post-Meeting/pre-publication conduct.
Conversely, it seems to us that the evidence which delves into past parliamentary proceedings – such as our client's alleged previous conduct – is simply unnecessary."
TNL disagreed with this approach, and issued an application to strike out the parts of the witness statement and statements of case, as it had threatened to do in its letter of 6 July.
The presentation of Mr Yeo's case at this hearing has broadly followed the line taken in Carter Ruck's letter of 10 July. The claimant has prepared and submitted a Schedule, prepared by Ms Jolliffe and served on Tuesday 14 July, two days before this hearing, listing passages in the evidence "potentially affected by parliamentary privilege and the admissibility of which requires the establishment of ground rules." The parts of TNL's statements which are labelled in this way are, generally, passages in which the witnesses explain their views of the relationships between parliamentarians and business, both in general and specifically. Some such passages refer to Mr Yeo, and explain why the journalists "suspected [Mr Yeo] in particular might be behaving improperly by profiting from clear conflicts of interest". But no application notice seeking the striking out of any particular passages in TNL's statements of case or witness statements or any other procedural order has been issued. And Mr Browne, while offering illustrations of passages said to be objectionable, has not sought to address the claimant's objections to the TNL statements in detail. Instead, he has invited me, in the absence of agreement on "ground rules", to hear argument and lay down rules as to Parliamentary Privilege.
The justification for that approach which is offered by Mr Browne is twofold. First that this matter, though very important, is really a matter of case management. Secondly, that Mr Yeo's team wished to avoid a protracted and costly examination of the detail of some 200 pages and more of pleading and witness statement. It would be better, suggests Mr Browne, for ground rules to be established, after which junior Counsel could agree on the application of those rules to the particular documents. I do not consider these to be adequate reasons for a failure to identify with precision, in an application notice, what it is that the court is being asked to do.
I agree with Mr Millar's primary position, which is that it is not appropriate for the court to be asked, on short notice to TNL, to embark on an attempt to identify the relevant principles or ground rules. The fact that these issues fall under the umbrella term of "case management" does not justify departure from these ordinary procedural requirements, which serve an important purpose. As Mr Millar points out, these are delicate issues that depend on the detail rather than broad propositions. The claimant's Schedule, though helpful, is not adequate for the purpose. The nature of the objection raised, or potentially raised, to the passages of evidence listed in the Schedule is identified only as "Parliamentary Privilege", without further elaboration.
Mr Millar has nonetheless outlined the nature of TNL's response to the contention on behalf of Mr Yeo. In summary, it is that the passages in TNL's witness statements that appear to be objected to are not objectionable on Parliamentary Privilege grounds or, if they are, some issues of very substantial constitutional importance arise. Mr Millar makes the following submissions:
i) Reference to business interests developed by Mr Yeo or other parliamentarians cannot engage Article 9 as these are not proceedings in Parliament. Such activity does not "form part of, nor is it incidental to, the core or essential business of Parliament, which consists of collective deliberation and decision making": R v Chaytor [2011] 1 AC 684 [62] (Lord Phillips).
ii) It is not a breach of Article 9 for a journalist to hold an opinion about parliamentary conduct, or to express such an opinion in print, online, in a broadcast, or otherwise. As Lord Browne-Wilkinson said in Pepper v Hart [1993] AC 593, 638: "Plainly article 9 cannot have effect so as to stifle the freedom of all to comment on what is said in Parliament, even though such comment may influence Members in what they say."
iii) Nor can it infringe Article 9 for a journalist to give evidence in defence of a libel claim, explaining why such an opinion was held. That is the purpose of the evidence here. Its function is, essentially, to rebut the case pleaded by the claimant in his Reply, by explaining the justification for investigating Mr Yeo, and using subterfuge in the process. That is not a process which "questions" any parliamentary proceeding.
iv) If that is wrong, then Parliamentary Privilege is in conflict with the requirements of a fair trial and/or it represents an interference with freedom of expression that requires, and may not have, a proportionate justification. It is established that Parliamentary Privilege may so limit what can lawfully be investigated in a libel action that proceedings must be brought to a halt by a stay, to avoid an unfair trial: Prebble v Television New Zealand [1995] 1 AC 321 (PC). That, however, may not suffice to avoid a breach of Article 10 of the Convention. The threat or prospect of proceedings which may or may not be stayed, with all the costs involved, may represent an unjustifiable interference with free speech. Furthermore, a stay leaves the publisher unable to vindicate its position. Thus, Parliamentary Privilege represents an immunity which may be in conflict with the Convention.
These are clearly important issues, which might arise, but are plainly unfit for disposal on short notice. They are certainly not ripe for decision on this pre-trial review, in response to Mr Browne's invitation to lay down ground rules. I suspect that they may not need to be resolved in this action at all, because a rather simpler point has come to the fore in the course of the hearing. This is that it is hard to see how Mr Yeo can simultaneously (a) object that it is "unnecessary" to "delve" into Mr Yeo's past conduct and (b) maintain, as he presently does in his Reply, that TNL had no basis for engaging in the subterfuge it employed. He cannot, fairly, stand by his pleaded case yet require on grounds of Parliamentary Privilege, case management, or any other grounds that TNL be prevented from responding to that case, in a relevant and proportionate way.
In these circumstances I have declined Mr Browne's invitation to hear argument on ground rules, and suggested that Mr Yeo's team consider how to proceed. There is a great deal to be said for the argument that this case can fairly be tried by reference to the issues identified in Carter-Ruck's letter of 10 July that I have quoted above. For my part, I agree that there is no real need to go beyond those issues. But those are not the issues raised by the statements of case as they stand. Having taken the view they have, Mr Yeo's team may conclude that the appropriate course is for the Reply to be trimmed down so as to make it unnecessary for TNL to explain and justify the decision to investigate Mr Yeo, or to use subterfuge for that purpose. If they do, TNL will need to consider what consequential amendments are appropriate to its witness statements.
Alternatively, it is open to Mr Yeo to issue an application to strike out passages in TNL's witness statements on the grounds of Parliamentary Privilege. In that event I would expect to see not only a precise identification of the passages under attack but also a detailed explanation of the reasoning behind each attack. It may be that some combination of these two courses of action is open to Mr Yeo. At all events, it is clearly important to ensure that these issues are dealt with promptly, so I accept Mr Millar's invitation to set a short time limit for the issue by Mr Yeo's team any application arising from this issue, and my order sets a time limit of 2 working days.
The claim in respect of the article of 23 June 2013
TNL's application notice seeking the dismissal of this claim was issued on 13 July 2015 for hearing on 16 July. It sought dismissal pursuant to CPR 3.4(2)(a) and/or (b) and/or summary judgment pursuant to CPR 24.2. The basis for the application can be summarised as being that Mr Yeo has no real prospect of establishing that the publication of this article represented a real and substantial tort.
The application faced some valid procedural objections, as the requirements of CPR 24 plainly had not been complied with, and the Amended Particulars of Claim clearly disclose a reasonable cause of action. However, evidence is admissible in support of an argument that a claim is an abuse of the court's process, and in the end Mr Browne has addressed the application on its merits, as shall I.
The article of 23 June 2013 was not about Mr Yeo. It focused on a separate alleged Parliamentary scandal. The key passage in the words complained of is in the paragraph which has been numbered [8] for ease of reference:
"Three lords and a select committee chairman are being investigated by the parliamentary authorities after The Sunday Times revealed that they were selling themselves as parliamentary advocates for paying clients."
Mr Millar reminds me of what I said about this claim at [130] of my August 2014 judgment:
"The article did not name Mr Yeo but his case is that he was identified as the "select committee chairman" referred to in para [8]. In support of that contention Mr Yeo says that there were readers of this article, he says a "large but unquantifiable number", who had already seen the articles of a fortnight earlier and who would therefore know that it was he who was being referred to."
Mr Millar emphasises that the class of readers to whom the defamatory meaning complained of could have been conveyed is a limited one. It comprises readers who had read the whole of the earlier articles, and remembered their contents when reading the "snippet" in the 23 June article. He points out that, as I observed in the same paragraph of my judgment, the allegation that there was a "large" number of such readers "is not admitted by TNL and is a matter that would require proof at a trial." Paragraph 8b of the Amended Defence puts Mr Yeo to strict proof that there was a substantial number of such readers, so that some substantial publication of this defamatory allegation is made out.
Mr Yeo's witness statement says, at paragraph 99:
"Although I was not named, the article stated that 'Three Lords and a select committee chairman were being investigated…' It would have been obvious to anyone who read this, from the extensive publicity about the original allegations that I was the "select committee chairman" to which this article referred".
Mr Millar describes this as an "assumption" which, he submits, provides a wholly inadequate basis upon which to establish the series of propositions of fact required. Mr Millar submits that this is the only evidence on the point, and that absent cogent evidence on identification, the claim relating to this article has no realistic prospect of success and the relevant paragraphs should be struck out of the Particulars of Claim, along with paragraph 99 of Mr Yeo's statement.
I do not consider it would be right to dismiss this claim on this basis. A claim should only be struck out if it is plain and obvious that it cannot succeed, and cannot be saved by amendment. Summary judgment should only be granted if it is fanciful to suppose the claim might succeed. On this issue I accept Mr Browne's primary argument, which is that it is realistic to view the claim as it stands as one that may succeed, on the basis of inference.
The essential issues for determination at a trial, on the pleaded case as it stands, will be (a) how many of those who read the Sunday Times article of 23 June 2013 had read the articles of 9 June, and recalled enough of what had been published then to identify Mr Yeo as the "select committee chairman" referred to; (b) is the number of such readers sufficient to make the publication on 23 June a real and substantial tort? I do not accept that in order to sustain such a case it is necessary for a claimant to adduce evidence from readers in the relevant class. That may be so, if the inference that would otherwise have to be drawn is an inherently improbable one as, for instance, in Fullam v Newcastle Chronicle & Journal Ltd [1977] 1 WLR 651 (CA). But I see no reason why in this case the court may not proceed by way of inference, in the absence of evidence from such readers. This is a national newspaper with a very substantial circulation; it is well-known that newspaper readers are reasonably loyal to a given title; the articles of 9 June were prominent; and only a fortnight passed between the two articles. The inference cannot be said to be fanciful.
Mr Browne has added some submissions which go beyond the parameters of the pleaded case as it stands. He argues that the 9 June article not only appeared in print but also online, and its online publication was continuous. Thus, there will have been online readers who read that article much less than 2 weeks before reading the article of 23 June. This is not in dispute, but it is not yet pleaded in support of the reference innuendo. Mr Browne also argues that there had been extensive republication of the sting of the 9 June article elsewhere in the media, which will have extended the class of readers of the 23 June article who knew the identity of the "select committee chairman" referred to. It is true that in aggravation of damages it is alleged, in paragraph 10.4 of the Amended Particulars of Claim that the sting of the earlier article was republished in whole or in part "in virtually every newspaper and by every broadcaster in the UK and beyond". But the details are not given (it was said in the statement of case itself that it was not proportionate to do so at that time) nor are they in evidence. Mr Millar submits that it is unclear whether these republications will have conveyed the information necessary to identify Mr Yeo, and to carry the meaning complained of. In the circumstances I do not rest my decision on these unpleaded points. Mr Yeo's team can of course consider whether they wish to re-amend the Particulars of Claim to rely on them.
Mr Yeo's witness statement and other parts of his statements of case
I have described above the nature of TNL's objections to the content of Mr Yeo's statement and pleadings. By the time of this hearing extensive concessions had been made on Mr Yeo's side. It was accepted, in particular, that it is not legitimate for Mr Yeo to rely in support of his case on (a) what he said to the Commissioner or to the Standards Committee or (b) the findings of the Commissioner or the Standards Report, and that the many references to such matters that are contained in his statement must be removed.
It is not necessary, in order to reach that conclusion, to enter into debate about the reach of Parliamentary Privilege. Evidence of what Mr Yeo said to the parliamentary authorities in the form "As I said to the Commissioner ..." is objectionable as impermissible self-corroboration, regardless of whether it would also infringe Parliamentary Privilege, or be unfair because a response would do so. As for evidence of findings made by the Commissioner or in the Standards Report, this is inadmissible according to well-settled principles recognised in Hollington v Hewthorn [1943] KB 587 and the majority in Three Rivers DC v Bank of England (No 3) [2003] 2 AC 1: see in particular [28]-[33] [79], [103], (Lord Hope), and [130]-[133] (Lord Hutton). The issues in this case must be resolved by the court, and not by reference to what Mr Yeo said to parliamentary bodies, or the findings made by those bodies.
Some further concessions have been made in the course of argument at the hearing. Those concessions include the removal of a section of the witness statement relating to a falling out between Mr Yeo and Paul Staines, aka "Guido Fawkes", which was rightly accepted to be irrelevant. But there remains a small number of areas of dispute about the admissibility of passages objected to by TNL. I have identified orally to the parties my conclusions on those issues, and given brief reasons for those conclusions. I will summarise them shortly.
i) Para 89. Objection is taken to the inclusion of a complaint of unreasonable delay by TNL in providing a copy of the video recording of the Nobu lunch to the Standards Commissioner. Mr Millar points out that TNL's case is that it acted with reasonable speed. He submits that TNL has a case which could not be advanced without infringing Parliamentary Privilege, as it would involve a critical examination (in both senses) of the conduct of Mr Yeo in instigating the investigation and of the dealings between TNL and the Commissioner. He cannot go into further detail to support this argument without infringing privilege, he submits. The argument is that it is unfair to allow Mr Yeo to make this complaint, if TNL would be prevented or hampered by privilege from defending itself. I accept that submission. As Lord Woolf MR said in Hamilton v Al Fayed [1999] 1 WLR 1569, 1586G, the courts cannot and must not pass judgment on any parliamentary proceedings. See also Stanley Burnton J in Office of Government Commerce v Information Commissioner [2010] QB 98 at [58]. In deciding to strike out this passage, and the corresponding pleading, I bear in mind proportionality. We are concerned here with complaints made in aggravation of damages, in a case where, if the claim succeeds, there will be substantial damages awarded.
ii) Para 90 makes a similar complaint, of deliberate withholding of evidence from the Commissioner. That must be struck out for the same reasons.
iii) TNL objects to a number of passages in a section of the witness statement that deals with whether Mr Yeo "coached" a witness to a Parliamentary Committee, one John Smith. The fundamental nature of the objection taken is that Mr Yeo does not complain of any defamatory allegation of that nature, there is accordingly no pleaded defence in that regard, and this section is irrelevant prejudice. I have concluded as follows:
a) Para 77: deletion of the first and last sentences is conceded. The other material is of little assistance, perhaps, and to some extent repetitive, but not so prejudicial that it is necessary to strike it out.
b) Para 78: the objection that has not been conceded is to Mr Yeo's statement that if "the coaching allegation" had been put to him he would have denied it, but it was not mentioned until too late. Since he does not complain of such an allegation this is irrelevant. He complains elsewhere in his statement of being given late notice of the allegations of which he does complain.
c) Para 80: the first three sentences deal with the merits of a complaint about "the coaching allegation" and the way it was put to TNL in correspondence. Mr Browne submits that the facts related here are true and unobjectionable. They are however irrelevant and should be removed.
iv) The part of paragraph 10.2 of the Amended Particulars of Claim that corresponds to Mr Yeo's paragraph 89 must be struck out, for the reasons given above.
Revision of Mr Yeo's costs budget
In February 2015 I approved the parties' costs budgets in reduced sums: [2015] 1 WLR 3031 [52]-[73]. On Friday 10 July 2015 Mr Yeo's solicitors served a revised Costs Budget, and on Monday 13 July 2015 they issued an application for approval of the Revised Budget, seeking to add various sums. Some of those items have since been abandoned. One has been agreed and approved by me: an additional £450 for trial. A much more substantial item amounting to £36,120 in total is however disputed.
The item is described in the Revised Budget in this way: "Contingent Cost A: Considering impact of parliamentary privilege and considering and making amendments to statements of case and witness evidence of both parties." A breakdown appears on page 5 from which it appears that, as noted above, a total of nearly £21,000 had been incurred in this connection by the time the budget was signed. This was split more or less equally between solicitors' and Counsel's fees. A further £15,440 was then estimated as future costs.
On behalf of Mr Yeo it is submitted that I can and should approve this budget variation pursuant to PD3E 7.6, which provides, so far as relevant, that
"Each party shall revise its budget in respect of future costs upwards or downwards, if significant developments in the litigation warrant such revisions. … The court may approve, vary or disapprove the revisions, having regard to any significant developments which have occurred since the date when the previous budget was approved or agreed."
The objections raised by TNL give rise to the following issues:
i) Can PD3E 7.6 be employed to obtain approval for costs that, by the time of the revised budget, are incurred costs? Paragraph 7.6 itself refers to "future costs", and PD3E 7.4 provides that the court "may not approve costs incurred before the budget".
ii) Has there been a "significant development in the litigation"? TNL submit that there has been none, and that the approach to Parliamentary Privilege adopted on Mr Yeo's side has been both tactical and misconceived.
iii) To the extent that there are costs, incurred or future, which it would be reasonable for the claimant to recover what mechanism is available, other than PD3E 7.6? The answer is of course relevant to issue (i) above. Mr Millar identifies two alternative routes:
a) CPR 3.18(b) (a Court may depart from a budget where "there is good reason to do so") or
b) PD3E 7.9 ("If interim applications are made which, reasonably, were not included in a budget, then the costs of such interim applications shall be treated as additional to the approved budgets.")
It seems to me that Mr Millar is right to submit that PD3E 7.6 is not an apt vehicle for obtaining the court's approval for costs incurred before the budget. The wording of that paragraph and of PD3E 7.4 point firmly in that direction. In support of his submission to the contrary Mr Browne has reminded me of what I said at [71] of my February judgment:
"If work identified as a contingency is included in a budget but not considered probable by the court no budget for it should be approved. If the improbable occurs, in the form of an unexpected interim application, the costs will be added to the budget pursuant to PD3E 7.9, unless the matter involves a "significant development" within para 7.6[1] in which case, if time permits, a revised budget should be prepared and agreed or approved."
I still take that view, but I do not think it supports Mr Browne's position. The key words in that passage are "if time permits". If the unexpected happens, and time does not allow for a revised budget to be approved before costs are incurred, then there will often, perhaps usually, be an unexpected interim application and PD3E 7.9 will apply. The fall-back position is CPR 3.18(b).
Mr Browne points out that this puts a high premium on swift action to prepare a revised budget. That must be right, but I do not see it as a good reason to adopt a different interpretation. Take this case. The issue is said to have arisen on 6 July. It has not been made clear to me why a revised budget could not have been prepared sooner than 10 July. There is some force in Mr Browne's submission that the analysis I have set out is unsatisfactory for an individual paying privately, such as Mr Yeo. It leaves him in undesirable uncertainty about the recoverability of a large slice of cost until after the assessment stage. But I do not think that leads to a different conclusion. As I have said, such a litigant will normally have an unexpected interim application on which to peg reliance on PD3E 7.9. In any event the wording of the Practice Direction is too clear to allow me to accept that incurred costs can be approved in this way.
In any event, I am not persuaded that there has yet been a "significant development in the litigation" within the meaning of PD3E 7.6 which would justify the approval of the additional costs incurred (assuming for this purpose I am wrong in my above conclusions) or the additional costs forecast in the revised budget. The "significant development" in the litigation identified by Mr Browne is the repeal of s 13 of the Defamation Act 1996 in May 2015, and the consequent need to address issues of Parliamentary Privilege when this could otherwise have been managed by a waiver on Mr Yeo's part, pursuant to that section. I find it hard to see the repeal of the section as a development of significance for the action. There is no evidence nor is there any indication that any thought had been given to Parliamentary Privilege, or waiver pursuant to s 13 before 6 July 2015. It is not a question of whether the claimant's legal team were aware of the repeal of the section, which had escaped many of us, but whether the prospect of reliance on it had at any point been a real consideration.
In any event, as Mr Browne's submissions implicitly acknowledge, the repeal of the section is not itself a development in the litigation, but something separate from it. I do not doubt that between 6 and 10 July Mr Yeo's legal team did give attention to Parliamentary Privilege and the issues identified in the Revised Budget. But their approach does seem to me to smack of tactical maneouvering. The probability seems to me to be that one significant reason they paid attention to Parliamentary Privilege is that they had to consider the objections taken to Mr Yeo's statement, which they realised were on analysis justified. That cannot be a significant development, let alone one justifying a budget increase.
The second main reason, in my assessment, is that they had identified aspects of TNL's evidential case that they saw as undesirable from their client's perspective. I can see that there is a good deal in the TNL statements that is, in the abstract, not necessary for the fair resolution of this claim. But as explained above, the evidence has been put forward in response to Mr Yeo's Reply. Provided it is relevant and proportionate to that purpose he cannot complain. I do not consider this to be a "significant development" which requires significant expenditure on issues of Parliamentary Privilege. Whilst recognising the desirability of cutting the issues down, I am far from persuaded that the proper means of doing so is to engage in an elaborate or any debate about the ramifications of Article 9, rather than to revisit and cut down the case pleaded in the Reply.
It may yet be that some revision in the budget of one or both parties may in future be shown to be justified in order to deal with issues of Parliamentary Privilege, but at present I am not persuaded that I have been presented with any justification for approving the revision put forward on that ground, pursuant to PD3E 7.6.
Note 1 I have corrected a typographical error in the original. [Back]
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Mr Justice Stewart :
Introduction
Mr Neil Young, the Claimant (C), is now aged 77 years having been born on 4 April 1938. On 13 May 2013 he was involved in an accident caused by the negligent driving of the Defendant's (D) insured. He suffered personal injury as a result of that accident. The question for me to determine is one of causation only.
On 15 January 2015 Master Eastman made the following order:
"A Preliminary issue shall be tried between the Claimant and the Defendant as to whether the road traffic accident that occurred on 13 May 2013 and/or the treatment the Claimant received post-accident caused or materially contributed to the stroke suffered by the Claimant on 4 June 2013."
C suffered a myocardial infarction (heart attack) ("MI") on/about 15 May 2013. D accepts that the accident caused the MI. C also sustained a spinal haematoma, the neurological symptoms of which first developed on/about 17 May 2013 and this rendered him paraplegic. The spinal haematoma and its consequences are also admitted as having been caused by the road traffic accident.
On 4 June 2013 C suffered a non-haemorrhagic stroke. This caused left-sided paralysis which apparently will have the effect of substantially increasing C's claim (and particularly his care needs) if C succeeds on the disputed issue of causation.
There is expert cardiological evidence from Professor Hall for the Claimant (report 9 January 2015) and Dr Saltissi for the Defendant (report of 12 November 2014). There is a joint statement of the cardiologists dated March 2015.
In addition there is expert neurological evidence from Professor Venables for the Claimant (report 6 January 2015; letter 19 April 2015) and Professor Chadwick for the Defendant (report 6 October 2014). There is a joint statement of the neurological experts dated March 2015.
The Amended Defence
The core of the issue arises from paragraph 8 of the amended defence which, in relation to the causation of the stroke says:
"(i)…..In the light of the expert evidence of the neurologists and cardiologists obtained in this matter, the Defendant does not admit that the Claimant's stroke was caused by the accident and/or by the Defendant's breach of duty.
(ii) There are 4 potential mechanisms for the development of the Claimant's stroke which the experts are unable to differentiate between or to identify which was the actual cause of the stroke. The 4 potential mechanisms are:[1]
(1) Embolism arising from (a carotid artery) atheromatous plaque unrelated to the spinal injury;[2]
(2) Embolism from the heart relating to a non-ST elevation myocardial infarction;
(3) A local in situ thrombosis occurring within the right middle cerebral artery and related to a hyper-coaguable state which would be unrelated to the spinal injury;
(4) Paradoxical embolism arising from a venous thrombosis passing through a previously present atrial defect) which would be unrelated to the spinal injury.
The Claimant is put to proof as to which of the above is the actual cause of the Claimant's subsequent injury in the form of the development of a stroke and is further put to proof as to the mechanism by which this can be established…"[3]
In summary, D submits that the medical evidence merely establishes a material increase in risk and that this is not the applicable test of causation in the circumstances of this case; that C's case at its highest is that D's negligence merely added a new discrete risk factor (the MI) to the existing risk factors of age, male gender, ex-smoking habit, hypertension, hypercholesterolemia and overweight/obesity. Therefore, D submits that the court cannot find that the road traffic accident probably caused the stroke.
The Neurological Evidence: Joint Statement
The joint statement of the neurologists is short. There is agreement as to the 4 potential mechanisms for the non haemorrhagic stroke, as now recorded in the amended defence.[4] The statement continues:
"We agree that the investigations performed at the time do not allow any differentiation between these mechanisms, being sufficient only to exclude the occurrence of intra-cerebral haemorrhage as a cause of the stroke. We agree however that the last of these mechanisms is unlikely in this case.
We note that the cardiological investigation failed to reveal any positive evidence, such as the presence of an intra-ventricular clot, or the presence of a ventricular aneurysm, or atrial fibrillation, that would provide pointers in favour of a cardiac source of embolism. We further note that expert cardiological opinion is divided as to the extent that this absence of positive indicators reduces the probability of cardiogenic embolism causing stroke.
We agree that there is strong epidemiological evidence (Witt et al) that irrespective of the mechanism of stroke, the occurrence of myocardial infarction greatly increases (SMR 44) the probability of stroke in the following 30 days and that the Claimant was within this high-risk period when his stroke occurred.
We therefore conclude that, while the Claimant was at risk of stroke by virtue of his background of his risk factors, his myocardial infarction, on the balance of probability will have brought forward the date by which it might have occurred had he not been involved in the accident."
Further questioning of Professor Venables, subsequent to the joint statement, revealed the following:[5]
"…the Claimant had an approximately 30% chance of having a stroke over the 10 years from the time of the accident even if the accident had not occurred, i.e. on the balance of probabilities, he would not have had a stroke…"
Cardiology Evidence: Overview
Before dealing with the cardiology evidence, a short glossary may help:
• LV – left ventricular chamber of heart
• Akinesia – static LV wall without contraction
• Thrombus – blood clot
• Mural Thrombus – blood clot which forms on the wall of the LV
Embolus – usually a piece of thrombus which has broken away and is carried towards the brain by the circulation of blood.
Of the 4 potential causes for C's stroke, the cardiologists (and neurologists) agree that cause (d) is the most unlikely. They agree that if cause (b) was responsible for the stroke then it was caused by the accident. Professor Hall says that of the 4 causes (b) is the most likely, but he cannot say that it is more probable than not that that was the mechanism which caused the accident. He accepts that (a) and (c) are serious possibilities and, although (d) is very unlikely, it cannot be excluded.
What Professor Hall does say is that on the clear balance of probabilities the accident caused the stroke or, to put it another way, absent the accident C probably would not have suffered the stroke he did suffer. The evidence is that the stroke was likely to have been caused by a thrombotic mechanism but he cannot say which of the 4 probably did cause it, though (b) is the most likely candidate of the 4. In other words:
The stroke (it is agreed) caused the MI and the MI is the most likely of the 4 causes of the stroke, though not such that on the balance of probabilities it did cause the stroke.
If it was not the MI (cause (b)) then there were multiple factors driving the thrombotic process. These were the initial trauma, the spinal cord surgery and immobility in hospital.[6]
Professor Hall accepted that C was at some increased background risk by reason of the facts set out in paragraph 7 of this judgment. Nevertheless, for the reasons given, his view was that the accident very probably did cause the thrombus which caused the stroke by 1 of the 4 possible pathways. In addition there was the close temporal relationship.
Dr Saltissi's overall view was that (d) was a "non starter", (b) was unlikely and that (a) and (c) were possibilities which were possibly linked to the accident. He said he genuinely believed that there was an equal likelihood that this was a coincidental event or an event caused by the accident. I pressed him and asked him that if he had to "put his money anywhere" what would his order of likelihood be? He said (of course extremely qualified) that it would be (c), (a), (b), (d).
There was substantial cardiological evidence on the possible pathways. It is right that I summarise this evidence. I shall begin with pathway/ cause (b).
Pathway/cause (b): the cardiologists
The essence of Professor Hall's opinion for making (b) the most likely cause of the 4 is that the risk of stroke in the post MI period is greatly enhanced. For this he relies upon the article by Witt[7]. On the other hand Dr Saltissi says that the temporal link between the MI and the stroke exists, but he considers that there are reasons why the link, whilst possibly causal, is more likely to be co-incidental.
Dr Saltissi says that the Witt paper is a blunt instrument and there are aetiological features in this case which undermine the reasoning that one can deduce from the epidemiological increased risk of stroke following MI that the balance of probabilities is that the MI caused the stroke.[8] Indeed he suggests that cause (c) is more likely than cause (b). He says that Witt not only has limitations which make it non applicable in this case; it also contains inconsistencies.
Dr Saltissi gives 4 essential reasons for his opinion that the balance of probabilities favours a cause other than (b), notwithstanding the Witt article. These need some analysis.
The First Reason: no clot/stroke/extensive akinesia apparent on three echocardiograms.[9]
It is agreed by the cardiologists that the degree of LV damage shown on C's echocardiograms is no more than moderate. There is no evidence of extensive damage. Dr Saltissi says that although the quality of scans does vary, an echocardiogram would almost always show a significant area of akinesia and often thrombus. This is important according to him, because where a cardiogenic embolus is caused by MI, a mural thrombus has previously formed. A principal reason for the thrombus formation is that the MI damages the heart walls such that it no longer contracts. The lack of contraction means that the blood in contact with that part of the wall is static and so the thrombus forms. The absence of mural thrombus/extensive LV akinesia demonstrated on the echocardiograms is, he contends, a strong indicator against cause (b). He says that to establish the presence of a cardiogenic embolism, at least on the balance of probabilities, it is necessary to identify either mural thrombus or extensive LV akinesia (or both) on the echocardiograms.
Professor Hall disagrees with Dr Saltissi on this. He says that mural thrombus or extensive akinesia would not necessarily be evident on an echocardiogram. He is not surprised by the fact that no thrombus is seen in the LV and says that deterioration of areas of damage to the myocardium will depend on the quality of the imaging. In addition he says that the first and third echocardiograms were described as being technically difficult, and so it would be hard to identify thrombus or accurately delineate areas of abnormal contraction. Professor Hall also says:
(i) One would not expect to see a thrombus on the first echocardiogram because it was on the day of the MI and clots take time to form.[10] As regards the second and third echocardiograms, they were too late because, although thrombi may stay in situ, they also can fully embolise or dissolve naturally. Therefore the fact that there was no thrombus a number of months later does not take the matter any further.
(ii) When the echocardiogram specifically refers to the study being "technically difficult", the fact that that is remarked upon is important to demonstrate that it may not show everything. It may not indicate the true detail of the impairment and, if a thrombus had been there, it may have been missed on the echocardiogram.
(iii) The echocardiogram report stated "The posterior wall contracts with a bouncy motion. Inferior wall appears dyskinetic". This means that the wall moves out when it should move in and makes it a candidate for thrombus formation because the blood flow is not being normally expelled from that area.
Dr Saltissi responded that he considered that Professor Hall was over diminishing the importance of the echocardiogram. The technicians were able to determine the motion of the heart wall and were able to comment upon it. He accepted that the echocardiogram was not a perfect tool but emphasised that none of the three echocardiograms showed a thrombus. Whilst he accepted that the first echocardiogram was early, he said it is the larger clots which occur earlier and are picked up on the echocardiogram and embolise. As regards to the second and third echocardiograms, he said that some thrombi do dissolve and some fully embolise but some also organise and would be visible.
There is clearly a problem with the echocardiogram evidence. It is difficult to say that it is supportive of C's case. I accept Dr Saltissi's evidence that it is some indication against there having been a left ventricular clot. However it is by no means conclusive.
The Second Reason: No extensive akinesia
The cardiologists also disagree as to whether extensive akinesia is necessary so as to make cause (b) likely.
Professor Hall says extensive akinesia is not necessary. As regards to the aetiology he says that the main pre-requisite is an area of myocardial damage. This is by definition present when there is a proven MI. A non-ST elevation MI is nearly always sub endocardial[11]. In a STEMI damage goes through the heart wall, therefore there is greater myocardial damage and more likelihood of clot. Nevertheless non ST elevation MI provides a site where the clot can form prior to (potentially) becoming an embolism if it breaks off. He suggests that in the context of MI a reduction in contraction may favour the occurrence of thrombus on the wall of the LV but there is another very important factor. This is that when the inside lining of the heart becomes inflamed and damaged, it acts as an area where thrombus will form, since the clotting mechanism is activated by that type of inflammation as a result of the MI.
Dr Saltissi on the other hand says the mere presence of some myocardial damage is necessary but not sufficient. The damage has to be sufficiently focal, extensive and severe to have impaired LV mural contraction. Non – ST elevation MI affects only the sub endocardium and not the full thickness of the wall. Therefore it less commonly causes a wall motion abnormality sufficient to cause an attached mural thrombosis.
The Second Reason – The medical literature: critical analysis
Professor Hall says that Witt (table 2) shows that there is no difference in the incidence of anterior myocardial infarction, ST elevation MI or presence of Q waves in patients who suffer a stroke and those who do not.[12] Further, Witt says[13]:
"No association was seen between stroke and peak creatine kinase ratio, location of MI, presence of Q waves, or ST-segment elevation."
The peak creatine kinase indicates the size of the MI.
How does Dr Saltissi respond to this? His first comment is that he considers the Witt paper to be internally inconsistent. He cites Witt[14] (relying on the sentence I have underlined):
"The association between the size and severity of the MI and stroke remains controversial. Some authors suggest that severity is related to stroke… whereas others failed to detect such an association. Our analyses suggest that larger size is associated with early occurrence of stroke after MI."
Of course the first part of that sentence points out the controversy which is a factor of some importance in this case. Again there was argument about this. I take it into account but do not have to determine the specific point.
The Third Reason: the unusual MI site.
Dr Saltissi says that he accepts that a clot can form and embolise from anywhere within the LV. Nevertheless he says it is considerably more common at the cardiac apex, on the arterial wall following infarction, and after a full thickness (Q wave/ST elevation) MI rather than a partial thickness/non ST elevation inferior MI as in C's case. Professor Hall says that when a clot is actually seen in the heart it is more often at the cardiac apex but the clot can occur anywhere and with any kind of MI.
The Fourth Reason: anticoagulation.
C had been on warfarin prior to his admission to hospital. On 14 May 2013 (the day prior to the MI) his INR was just below the therapeutic range. It is agreed that mural thrombus is susceptible to prevention by anticoagulation. Dr Saltissi accepts Professor Hall's point that in the time interval between the INR on 14 May 2013 and the MI the level of anticoagulation will have reduced, though unlikely to have returned to its normal level.
If the stroke was caused by an embolus originating in the heart, then Dr Saltissi says that it is only possible to say that the thrombus causing the stroke occurred at some point prior to the onset of the neurological symptoms on the morning of 4 June 2013.[15]
What happened between the MI and the stroke in terms of anticoagulation? C did not receive further oral anticoagulation after the MI until the time of the stroke. C was treated with heparin[16] between 15 – 17 May 2013 and between 21 May 2013 and the date of the stroke on 4 June 2013. It therefore appears that there were only 3 days out of the 22 between admission and the stroke when C was not anticoagulated. In fact, anticoagulation (heparin is an anticoagulant) was a problem with C because of the risk of bleeding. Therefore, although he did receive heparin, it was only in therapeutic dosage for the first day/so. Thereafter it was in prophylactic dose of Low Molecular weight heparin. This would reduce the risk of clotting but not abolish it.
According to Professor Hall the anticoagulation result is something of a red herring since, wherever it occurred, C did suffer a stroke by reason of a blood clot. Therefore the anticoagulation did not prevent the clot which caused the stroke. This tells us nothing about where or why the clot formed. Dr Saltissi opined that an in situ clot in the brain was less likely to respond to anticoagulation than a clot in the heart, but I do not consider that the anticoagulation is any pointer against cause (b).
Cause (b) – summary on the cardiologists' evidence
In short cause (b) is entirely possible as the pathway for the stroke to have occurred. On the cardiology evidence it was not, perhaps because of the points made by Dr Saltissi, agreed in part by Professor Hall, a cause which was more probable that the other 3 causes combined; nor did Professor Hall claim this. He said it was the most likely of the 4 candidates.[17]
Pathway/causes (a), (c) and (d): the cardiologists
If the cause of the stroke was not (b), then Professor Hall contends that each of the other 3 candidates was probably caused by the accident. He said that C would have been in a "metabolic mayhem" by reason of the major trauma of the accident, immobility in hospital, the MI, the severe spinal cord injury and attendant surgery. All these have the capacity to cause a stroke[18]. Shortly after the MI, blood tests were taken. These were taken in relation to the heparin prescription. They show a normal platelet count and mildly raised APTT.[19] However, according to Professor Hall it is the activity of platelets that is relevant to clotting. Most clots occur when there is a normal platelet count. In clinical terms more subtle tests which might indicate the "metabolic mayhem" were not done. This is because it is universally known that adverse metabolic changes do occur after major trauma etc. That is why, to the extent possible, C was given anticoagulant therapy. A research study could test for the metabolic changes but hospitals do not do these subtle tests because they are known to occur and treatment is prescribed. Professor Hall said that is why C was given Low Molecular Weight Heparin. In the circumstances of a bleed around the spinal cord, if the hospital could have properly avoided anticoagulant treatment, they would have done.
Dr Saltissi did not accept the term "metabolic mayhem". He said that the main reason for the anticoagulation would be because of the immobility to stop a venous thrombosis. His opinion was that it was very rare for a patient to suffer arterial thrombosis. He accepted that the hospital had done the normal clotting tests and also that after major trauma (including surgery etc) it is possible to get increased clotting. The clotting tests which were done would not necessarily show any metabolic disorder, as Professor Hall had stated. Dr Saltissi's point was that there was no actual evidence that there was any serious metabolic upset which may have led to a clot in a place other than the heart. He accepted that there was a possibility that if the pathway was cause (a) or (c) then that was caused by the accident, but this was not a probability.
The Epidemiology Literature: the cardiologists:-
Professor Hall relies on Witt. He accepts that epidemiologically the risk will be at its highest the earlier after the MI that a patient is. The SMR[20] of 44 is for the whole period 0 – 30 days. In the second month the SMR drops to 4.5. What we can say is that at 31 days (and even more so at 20 days) for the Witt cohort it would have been lower than 44 and higher than 4.5. There were other matters:
(i) C had background risk factors. However, if one looks at Witt (Table 2) a not insubstantial number of the cohort had some such background risk factor(s).
(ii) On Professor Hall's evidence, as a result of the accident, C was put in a worse risk category than the Witt cohort because of the "metabolic mayhem", including that caused by the MI. Therefore either the MI was directly causative of a cardiological embolus or it was part of the metabolic mayhem which led to a clot forming there or elsewhere.
Both cardiologists agree that Witt is a very reputable paper. There is no reason not to use it as a starting point. Dr Saltissi said it should be read with some caution for the following reasons:
(i) It reviewed a US population in a small area. The authors specifically say:
"Limitations: findings may not be generalisable to different populations. The authors measured outcomes by reviewing medical records. "
(ii) The patients in the study had an MI between 17 and 36 years ago. Management of MI has transformed in that period. C was treated in a way in which one sub group was treated i.e. with low molecular weight heparin. We do not know if the SMR of that sub group was the same or similar to that of the cohort as a whole. Also the cohort as a whole would be treated differently in 2013 in England such that the overall SMR would probably be somewhat different from 44.
(iii) Witt was a community based paper not a hospital study.
(iv) Witt includes all strokes, though 95% were ischaemic. There is no break down of the cause of the ischaemic strokes.
(v) It is suggested that strokes following STEMI are associated with a worse short term prognosis than N-STEMI.
(vi) There is a statistical quirk which neither cardiologist could explain but which suggested that the Killip class (which measures the seriousness of the MI), according to the P value, shows that there is a highly significant difference between those who sustained a stroke and those who did not sustain a stroke.
All those factors have to be borne in mind and all have some importance. Nevertheless there is no better source of information than the Witt paper.
Dr Saltissi referred to a review paper by Weir.[21] That paper states:
"Acute MI is associated with a 2% absolute risk of stroke in the first 30 days, resulting from multiple mechanisms including acute AF, hypotension, simultaneous coronary and carotid plaque inflammation, reduced LV function and LV mural thrombosis."
Dr Saltissi read this as meaning that there was only an association between acute MI and the 2% risk of stroke[22] and that a number of the multiple mechanisms would not be caused by the acute MI. However the footnote references in support of this statement are the Witt paper itself and one other paper by Szummer[23]. Szummer was not produced in evidence. In my judgment, reading the words themselves, one cannot infer from this that the multiple mechanisms or some of them were not caused by the acute MI. There was no convincing aetiological reason why this should be the case, though it is possible.
The neurological evidence.
Professor Venables was asked about the Witt paper. I will take his evidence on this matter shortly. Mr Willems QC probed in relation to the statistical evidence. Professor Venables had to be cautious about certain responses because (a) he is not a statistician or epidemiologist and (b) this was not a matter of dispute between him and Professor Chadwick; therefore the detail of Mr Willems' questions had not, perfectly reasonably, been anticipated by Professor Venables.
Professor Venables accepted that roughly speaking C's background risk of a stroke was about 3% per annum i.e. 0.25% per month. The standardised risk for the population as a whole is about 2 per 1000. Even in relation to a 75 year old, C's background risk was significantly increased. As regards the Witt paper:
(a) The highest risk of a stroke after MI was in the first 30 days. It may be that there is a short period after the MI before the peak incidence occurs and then the incidence will fall.
(b) Witt does not separate out the background risk of the cohort since someone prone to MI is also more prone to a stroke.
(c) Part of the Witt cohort would have had a stroke coincidentally and it is not easy to say what percentage would have had a coincidental stroke i.e. a stroke absent the MI.
(d) In Table 2 of Witt under the heading "cardiovascular risk factors" a substantial percentage of the Witt cohort had cardiovascular risk factor(s) and, since the risk factors often appear together, it is likely that a not insubstantial number had more than one risk factor. Indeed the heading "Comorbid Conditions" shows this.
(e) The Witt paper includes patients who had STEMIs (39%). They would be at greater risk of stroke than somebody who did not have a STEMI.
These are some of the main points which Mr Willems QC explored with Professor Venables and which, in broad terms, Professor Venables accepted. I have not gone into the minutiae of the figures which were put to Professor Venables and on which he made some guesses, because it is not fair to record some of the details because of his lack of epidemiological expertise/notice of the questions. What Mr Willems was mainly seeking to establish is that the SMR of 44 had to drop substantially as it was not known to what level it dropped in relation to C personally.
There is no doubt that one cannot just transfer the SMR of 44 to C as an individual. It is also true that a number of points can be made which appear to reduce that SMR of 44 in relation to him. There are however factors, which cannot be statistically measured, which increase C's risk since he not only suffered an MI as a result of the accident but also the original major trauma and the spinal operation to decompress the haematoma. Thus there were three, not one, major stressors. In relation to this Professor Venables said that the body's response to injury is to heal and the body's response in healing is inflammation. Even something as trivial as a cut on the finger causes inflammation which is part of the body's stress response to injury in order to advance the healing process. That was much magnified by the events following the sort of injury which C had.
At the end of his evidence Professor Venables said that he still thought the epidemiological evidence was very strong and drove his view that (b) was the route probably followed in C's case. As regards (a) and (c) Professor Venables said he thought that certainly they could be in the causative chain. If the argument is accepted that you can activate a plaque in the coronary arteries and cause a heart attack, then a plaque in the ascending aorta, the common or internal carotid artery or the origin of the middle cerebral artery is exactly the same physiologically. If somebody could prove that the pathway was not (b) then Professor Venables said that one has exactly the same mechanism for cause (a) and (c) and this gives the same result. So if C had not had the trauma of the accident, (a) and (c) probably would not have happened. This hinges on the pathophysiological similarity of (a), (b) and (c). Wherever an atheromatous plaque is, once it has been activated by the pathophysiological chain of events that go on after trauma, then it does not matter whether it is in the leg, heart or brain. In short, Professor Venables believed that the accident probably caused the stroke through pathway (b) but, if not by pathway (b), by (a)/(c). In response to Dr Saltissi's suggestion that the background risk was equally likely to have been the cause rather than the accident, Professor Venables said that he did not see how a surge in stroke incidence against a background in Witt of myocardial infarction can just be a coincidence. He said that one does not see those sorts of coincidences where risks are raised 4 fold, 10 fold or 44 fold. Indeed he felt that whichever route (i.e. pathway (a), (b) or (c)) was involved, then he had no doubt that in some way this was triggered through the accident.
Professor Chadwick gave brief evidence. He said that having heard Professor Venables[24] there was nothing which changed his view or led him to wish to clarify his view. He said from the point of the injury leading to the MI, then subsequently the paraplegia, and the stroke were part of a chain of events. He also thought route (b) was more likely, though conceding Dr Saltissi's point that there was an absence of direct evidence to support (b). He strongly agreed with Professor Venables that whether it was route (a), (b) or (c) there was no real doubt but that there was a causal link from the accident rather than background risk. He said he thought that was the evidence that Witt provided because the SMR, no matter what precise figure you give for a point in time, is a big number and it is impossible to get away from that fact. In answer to the question how confident he was that C would not have had the stroke if he had not had the accident, Professor Chadwick said he was clinically confident and clinical confidence was rather higher and demanded a rather higher level than the balance of probabilities.
Discussion
This is an unusual case in that the Claimant's cardiologist and both neurologists are firmly of the opinion that the accident caused the stroke. The sole dissident is Dr Saltissi. Of course, it does not follow from that that the Claimant must succeed. It is necessary to examine the quality of the evidence. This is why I have set it out in such detail. Also it is the court's function to decide causation, not that of the doctors.
It is conceded by the Defendants that if the court is satisfied on the balance of probabilities that the accident caused the stroke, it is not incumbent upon C to prove which one of the four possible pathways caused it. The Defendant submits, however, that the evidence can merely demonstrate that the accident increased the risk of C's stroke. Mr Willems QC invited me to say, if I felt I could, having heard his submissions on this point, whether I was persuaded that C had proven causation on the balance of probability. If not, there would have been further argument as to whether material increase in risk enabled C to succeed. After hearing Mr Willem's submissions, I accepted his invitation and told him that I was convinced that, absent the accident, the stroke would not have occurred on the balance of probabilities.
Having reviewed the evidence in detail my conclusions can be crystallised as follows:
(i) C had a background risk which was higher than a healthy 75 year old. It was about 30% risk over 10 years or, roughly speaking, 0.25% each month.
(ii) If one effectively discounts pathway (d)[25] then there were 3 possible pathways to the stroke. Any one of these pathways could have happened absent the accident and any one of them could have happened because of the accident.
(iii) Whilst the precise figures in the Witt paper will never apply to an individual, I accept the evidence of the majority that, to put it in Professor Chadwick's words, the SMR, no matter what precise figures you give for a point in time, different points in time, after the myocardial infarction, the SMR is a big number, and it is impossible to get away from the fact that it is a big number.
(iv) Further, Witt dealt with incidence of stroke after MI. C was subject to other stressors, most particularly the major trauma of the accident and of the spinal surgery. Pathophysiologically these are likely to have triggered, if not pathway (b), then pathway (a) or (c).
(v) The evidence does not depend solely on the epidemiology in the Witt paper. It depends also on the pathophysiological explanation and experience of two eminent neurologists. To the extent that a cardiologist can properly have an input into the issue on pathways (a) and (c) (as opposed to (b)) then that evidence is supported by Professor Hall. Dr Saltissi disagrees on pathway (b) and indeed on pathways (a) and (c). He accepts the possibility of the accident having caused a stroke through pathway (a) or (b) or (c) but believes that coincidence i.e. background risk is equally as likely. Of course he may be right but very probably, in my judgment, he is wrong.
(vi) In Alphacell v Woodward [1972] AC 824, 827 Lord Salmon said:
"The nature of causation has been discussed by many eminent philosophers and also by a number of learned judges in the past. I consider, however, that what or who has caused a certain event to occur is essentially a practical question of fact which can best be answered by ordinary commonsense rather than abstract metaphysical theory."
I respectfully agree, particularly in the circumstances of this case. The evidence in favour of the accident probably being the cause of the stroke is very strong. Absent the accident C very probably would not have suffered the stroke he did. He had a 30% risk of suffering a stroke over a 10 year period.
Conclusion
For those reasons the answer to the preliminary issue ordered to be tried by the Master is that the road traffic accident that occurred on 13 May 2013 on the clear balance of probabilities caused the stroke suffered by the Claimant on 4 June 2013.
Note 1 These are referred to as causes (a) – (d) respectively in this judgment. [Back]
Note 2 NB. Although an atheromatous plaque would be unrelated to the spinal injury, an embolism arising from an atheromatous plaque whether in the carotid artery or in the ascending aorta is not necessarily unrelated. This applies also to (3) and (4). [Back]
Note 3 Dr Saltissi said that in fact no thrombosis/embolism had ever in fact been demonstrated, but he accepted that the stroke was probably caused by one of these. [Back]
Note 4 There has been some amendment as a result of the cardiologists changing the wording slightly. [Back]
Note 5 Letter 19 April 2015 [Back]
Note 6 Though immobility would be relevant only to cause (d) i.e. venous thrombosis. [Back]
Note 7 (2005) Annals of Internal Medicine Volume 143 No. 11 page 785 [Back]
Note 8 Of course Professor Hall does not so contend. He mostly contends that it is the most likely of the 4 possibles. [Back]
Note 9 One echocardiogram was very shortly post MI; the second in July 2013 and the third in November 2013. [Back]
Note 10 Professor Hall points out that the Lip article contain a number of references as to the fact that thrombus is not picked up in echocardiogram and that only 27% are picked up on the first 24 hours after an MI. [Back]
Note 11 i.e. affects the lining of the heart. In clinical practice there are 2 common types of MI (i) non ST elevation (N-STEMI) and (ii) STEMI. An echocardiogram has a segment in it which indicates the STEMI i.e. a blocked coronary artery. This usually produces a poor outcome, but not much poorer on recent information about outcome at 1 and 3 months. [Back]
Note 12 The percentages are extremely similar in these three characteristics of those who suffer a stroke and those who do not. Anterior location of the MI 35% - 34%, STEMI 40% - 39%; Q wave MI 50% - 48%. [Back]
Note 13 Page 788 [Back]
Note 14 Page 790 [Back]
Note 15 If the cause was in situ thrombosis in the brain or embolism from the carotid artery then the timing may have been seconds or minutes but it would have been somewhat longer if there was a cardiogenic thrombo embolism [Back]
Note 16 Initially intravenously and then subcutaneously [Back]
Note 17 Nevertheless both neurologists continued to be of the opinion that it was more probable than the other 3 possible causes combined. See below. [Back]
Note 18 He noted that the stroke was within 2 weeks of surgery. The immobility would have the capacity to cause a venous stroke. [Back]
Note 19 This monitors the heparin [Back]
Note 20 Standardised Morbidity Ratio [Back]
Note 21 Post Graduate Medical Journal 2008: 84: 133 - 142 [Back]
Note 22 The 2% absolute risk of stroke coincides with the SMR of 44 in the first 30 days [Back]
Note 23 European Heart Journal 2005 [Back]
Note 24 He, like Professor Venables, had also heard the cardiologists’ evidence [Back]
Note 25 Though it cannot be wholly discounted [Back]
|
Mrs Justice Elisabeth Laing DBE :
Introduction
On the evening of Friday 31 July 2015, my clerk was approached by the solicitor for the Applicants ('As'). He wished to make an urgent application for an injunction to restrain publication in a newspaper of material relating to the first Applicant ('A1'). That evening, my clerk received a skeleton argument from the Respondent ('R'). I held a telephone hearing on the afternoon of Saturday 1 August at which the As and R were represented by leading counsel (Mr Tomlinson QC and Mr Browne QC). I said that I would hold the hearing in private, and make an anonymity order, given the issues in the case. Mr Tomlinson QC gave an undertaking to ensure that a record of the hearing was kept.
I had witness statements from both sides. I had skeleton arguments by that stage from both counsel. At the end of that hearing, I said that I had decided to give the relief sought by the As. I gave brief reasons for doing that, and said that I would write a short judgment explaining those reasons in more detail. One of R's witness statements did not reach me in time for the hearing. Mr Browne QC referred to some of the material in it in the course of his oral submissions. I should make clear that although I did not see that evidence at the time of the hearing, I have consulted it in order to deal in this judgment with the points which Mr Browne QC derived from it in his oral submissions.
The relief I granted was for a short period only, until Wednesday 5 August 2015, when both leading counsel would be available to argue more fully in court whether interim relief should be granted in this case or not.
This judgment
Counsel agreed that this should be a public judgment. Because I had also decided to grant the As' application for anonymity (a subject to which I shall return), they agreed that I should ensure that the judgment was not expressed in terms which might enable an astute reader to join up the dots. I have tried to strike a balance in this judgment which ensures that my reasons for granting the order are intelligible, without saying so much about the facts that it is possible for the reader of this judgment to undo the work of the order. This means that what I say about the facts is, necessarily, expressed in relatively general terms. I should therefore make clear that while my description of the facts is necessarily short on detail, I have, in making my decision, nonetheless considered the nuances of the facts which were relied on by each side. I cannot, however, show that I have done so in this judgment. Any reader of this judgment will thus have to take that on trust.
Except to a limited extent, counsel did not disagree about the framework in which I had to make this decision. I will not, therefore, in what is intended to be a brief judgment, explaining my reasons for giving what is intended to be a short-lived order, cite extensively from authority for points which were not controversial. I did not think it would be useful, either, to engage, in this judgment, in the artificial exercise of analysing the authorities in greater depth than the parties did in their skeleton arguments. There are two reasons. The first is that such an analysis did not inform the decision I made after the hearing on Saturday. The second is that the judge who conducts the hearing on Wednesday 5 August 2015 will have a greater opportunity than I did to listen to detailed arguments about the authorities. That means that it would not be proportionate for me to analyse them in any depth, even if, which I do not, I considered that it would be appropriate.
A general outline of the facts
A1 is a prominent and successful professional sportsman, who has, from time to time held positions of responsibility in his sport. He appears in advertisements for some products.
He is now married to A2. He seeks to restrain a national newspaper from publishing a story, to be recounted by X, about a sexual relationship between them. It is common ground that the relationship was some years ago and lasted a few months. At the time of this relationship, he was not married to A2, but she had been his girlfriend for a while. X says, and this has not been specifically denied by A1, that they met at times when he should have been preparing for sports events. She and R now criticise that conduct.
Some material has been published about X and A1. There is a dispute about whether A2 has contributed to that.
X now wishes to give her account in order to 'put the record straight'. R's evidence describes the proposed content of the article. It is considerably more detailed and concrete than what has been published so far. Its publication will no doubt cause embarrassment to A1 and A2.
The law
This is a case in which there is a conflict between rights conferred by the European Convention on Human Rights ('the ECHR') and set out in Schedule 1 to the Human Rights Act 1998 ('the 1998 Act'). The rights in issue are the article 8 rights of the As and the article 10 rights of R and of X. A conclusion about that conflict requires an intense focus on the facts. Neither right has precedence over the other. The protections conferred by both article 8 and article 10 rights are defeasible. One of the interests which may defeat the protection conferred by article 8 is the interest in protecting the rights and freedoms of others. One such interest is the exercise of the qualified freedom conferred by article 10. The exercise of the freedom conferred by article 10 'carries with it duties and responsibilities, [and] may be subject to such formalities, conditions, restrictions or penalties as are prescribed by law and are necessary in a democratic society ...for the protection of the reputation or rights of others [or] for preventing the disclosure of information received in confidence...'. That will include the interests which the As seek to protect by this application.
Neither 'side' has a burden to discharge, as such; rather, each has to justify a desired interference with the other's Convention right or freedom. So I have to balance, in deciding what, if any, protection, or weight (as the case may be) the court should give to the article 8 and 10 rights/freedom of each side, the desire of the other to assert a defeasible right or freedom protected by a different article of the ECHR. In each case that right or freedom conflicts with the right or freedom on which the other relies. This means that, on the facts of this case, I have to examine closely the relative importance of the two rights which are in play.
Section 12 of the HRA applied to this application. In short, the court may not grant relief unless an applicant is 'likely to establish that publication will not be allowed'. It was agreed by counsel that that is a variable standard depending on facts of case. In general, the court should be satisfied the applicant will probably, that is, is more likely than not to, succeed at trial. They agreed that a lesser degree of likelihood may suffice if the court is granting an injunction, where, as here, if granted, it will only last for a short period, pending more detailed argument. That, and the nature of the 'news' in this case mean, in my judgment, that I should give less weight than might otherwise be appropriate to the intrinsic evanescence of 'news', a point which Mr Browne QC relied on in his oral submissions. This is not a story, either, which has only just broken, or which is developing at a fast pace.
Section 12 also requires me to take into account the importance of the ECHR 'right' of freedom of expression, and the extent to which the material has become, or is about to become available to the public. I must take into account any relevant privacy code. Mr Tomlinson QC referred me in argument to the relevant provisions of the code which applies. In my judgment, and on my analysis of the facts, it does not support publication of this story. Finally, I must take into account the extent to which it is, or would be in the public interest for the material to be published. On the authorities, that means the extent to which the material contributes to a debate of general interest.
The rights which are in play
I will start with the article 8 rights of A1 and A2. I should say that this is not because I have made the mistake of giving article 8 a primacy it does not have, but because I have to start somewhere. Mr Browne QC's oral submissions hinted that A2's article 8 rights were irrelevant, because X and R are not proposing to publish her private information. I reject the submission, if made, that A2's article 8 rights are irrelevant. Publication will interfere more than minimally with her right to respect for her home and family life, as her witness statement makes clear. I accept, however, that any likely interference with her article 8 rights is less serious than any likely interference with A1's article 8 rights, and so can more easily be justified. I have considered the conflicting evidence about the extent to which A1 and A2 conduct their lives in the public eye. Apart from the prominence which A1 has as a result of his job and product endorsements, I do not consider that the limited evidence relied on by R shows that, as a couple, they court publicity.
Does A1 have a reasonable expectation of privacy?
The authorities show that in order to rely on article 8 in support of an injunction restraining publication, A1 must first show that he had a reasonable expectation of privacy. If he did not, there could be no interference with his article 8 rights, and the question of justification would not arise. There is some suggestion in the authorities that a transient relationship is entitled to less protection than a permanent relationship. But I accept that material about a person's sexual life, whether it relates to a transient, or to a more durable relationship, is in principle protected by article 8, as a person's sex life is a very important aspect of the interests protected by article 8.
R relied heavily on the submission that this relationship was at the transient end of a spectrum. But on the evidence I have read, this relationship at issue in this case was not a one-night stand, or an encounter with a prostitute, as X's witness statement makes clear. She says, 'We spent a considerable time together whilst in our relationship...', and that while she has had many affairs, she felt that this relationship was different. She thought that things between them 'could go further'. Despite finding out towards the end of the relationship that A1 was in a long-term relationship with A2, she felt that 'we had a chance of building something together'. When, after a while, it became clear that A1 was not serious about the relationship, and the relationship ended, she describes her upset. Even so, she says that she kept in contact with A1for a long time after the relationship ended.
A further factor which I have taken into account, in addition to this important evidence about the duration and nature of the relationship, is the evidence of X that, from the outset, both of them conducted it clandestinely. From her evidence it is clear that it was her understanding that A1 did not want to get 'caught out', and that both needed to be careful to ensure that this did not happen. They kept an eye out for CCTV cameras, for example. Finally, although R's case is that X conducts her entire private life in public, that evidence only goes a limited distance. X has kept her counsel about this relationship for some time, and was discreet about when it was going on, even after she discovered that A1 had a long-term girlfriend, and even after the relationship ended. She kept in contact with A1, on her evidence, until quite recently, and did not any stage, until very recently, decide to make it public.
It is against this evidence that I have to assess the weight I should give to R's submission that X is 'not a private person'. The submission is based on the fact that she has chosen to display in public aspects of her life which others might regard as normally private. Examples of this are given in R's evidence. This evidence is adduced in order to suggest that X is a shallow, one-dimensional, cut-out character who broadcasts, and is known to broadcast, her entire private life, so that anyone embarking on a relationship with her knowingly takes the risk that it will be made public. I do not accept that this is an accurate account of the evidence. X's own witness statement paints a more complicated picture. It shows, in my judgment, that she did not see this relationship, or treat it, as public property at the time, and for some time afterwards. She was discreet about it, and valued it. She did not apparently see it, or use it, as part of her public career.
I also take into account the fact that successful sportsmen necessarily have a prominent position in public life, and because of that, and whether they like it or not, lose control over aspects of their private life. But I do not consider that being a public figure of and by itself makes the entire history of that person's sex life public property. R argued that A1's position of responsibility in his sport, and the fact that he is a prominent sportsman, make him (whether he wants it or not) into a 'role model' who can therefore expect to have his conduct, on and off the sports field, to be examined minutely and publicly. I consider these arguments in more detail when I come to justification under article 8.2. I do not think that, singly, or collectively, in this case, they undermine the reasonable expectation of privacy about this relationship which A1 had.
At this stage, I only add that it is important to analyse what sort of a role model A1 is or can be. He is a role model for sportsmen and aspiring sportsmen. Any scrutiny of his conduct away from sport ought to bear a reasonable relationship with the fact that he is a sportsman. His position does not turn him into an example in every sphere of his existence. He is not a role model for cooks, or for moral philosophers. The fact that he is a prominent sportsman does not mean that he impliedly pontificates publicly about private morality. In my judgment, a discreetly conducted affair, before he was married, some years ago, is not obviously inconsistent with his public role, even if its conduct involved the breach of team rules.
Publication of the proposed story will undoubtedly interfere with A1's reasonable expectation of privacy, and thus, with A1's article 8 rights. It will also interfere with A2's article 8 rights, for the reasons given in her witness statement.
Justification
This brings article 8.2 into play. I have to ask what justification is advanced for that interference. The justification is the desire of X and R to exercise their article 10 rights. While I have to take into account the importance of the freedom of the press, that freedom is not, self-evidently, of and by itself, enough to trump the As' article 8 rights. I cannot balance these two incommensurables without asking why, and for what purposes, X and R seek to exercise their article 10 rights. So I turn to that.
R's reasons for publishing the information are, no doubt commercial. But I do not give this any weight, as the fact that most newspapers are run for profit does not deprive them of, or lessen the importance of, their article 10 freedom. R argues that there is an important public interest in publishing this story. I bear in mind both that newspaper editors should be given some leeway in judging where the public interest lies, and that, just because the public might well have a prurient interest in being told something does not mean that it is in the public interest for them to be told it. The public interest here is, I remind myself, a contribution to a debate in the general interest.
The public interest arguments circled round the suggestion that this story shows that A1, who is, and should act as, a role model is, in reality, a hypocrite. First, it is said that there is a public interest in publishing the story because A1's conduct of the relationship meant that he broke rules on a few occasions in having a woman with him when he was staying at a hotel. He denies that his conduct led to the breach of any rules. I cannot resolve that conflict at this stage. But even if I assume that he did break any rules, I do not see that there is any public interest in revealing this now, some years after the event. Such stories may generate some interest at the time of the infraction, but I was shown no evidence to suggest that there is any current debate about past infractions by sportsmen of rules of this sort. Nor do I consider that the mere fact he broke rules in the past shows that he, is or should be publicly exposed as, a hypocrite.
Second, R argues that, in having the relationship, A1 deceived both A2, and his then manager. A1 does not deny these deceits. A2 now knows the truth. His deceit of A2 is a private matter between them. I can see no public interest in the publication of the fact that some years ago, A1 deceived his then team manager in the way that X said he did. I was shown no material that suggested that there is debate in the general interest about this subject. Nor do I consider that an isolated past deception of a former team manager means that A1 is a hypocrite, or that there is a public interest in exposing him as one.
R's third argument is that A1's success as a sportsman has given him the opportunity to earn money by appearing in advertisements. It is said that this is built on his image as a 'clean-living family man'. X's story is a valuable antidote to this false impression, it is said. The high point of the material relied on to show this false image is an interview which A1 gave, shortly after the end of the relationship with X, in which he said he liked to eat at home with his girlfriend. I reject the strained submission that any of the material relied on in this context shows that A1 has misled the public by creating and projecting a false image of himself. There is nothing misleading or untruthful, in my judgment, about any of this material.
It is argued that the public interest extends to the exposure of conduct which is socially harmful, as well as conduct which is unlawful. I doubt whether a court is equipped to act as an arbiter of what conduct, falling short of illegality, is 'socially harmful' to the extent that it should be publicly exposed. The court is perhaps even less well-equipped to do this than a newspaper editor. A1's conduct in two-timing A2 for a relatively brief period before they married must have hurt the two women concerned when they found out about it. It is not for me to moralise about such conduct. But I do express a suitably diffident doubt whether this conduct was socially harmful. It caused private pain; but no-one was corrupted or co-erced. The conduct had no ramifications beyond the three people who were affected by it. It did not affect society in any way. If it did not, I cannot see how it could be described as socially harmful. I am conscious that there is a risk that the phrase 'socially harmful' can become a pretext for judging others by reference to moral positions which those others do not, or might not, share. This is a particular risk for a court in an increasingly secular society in which some issues, especially questions of sexual conduct, do not attract the consensus which they once did. In my judgment, few people, other than adherents to strict religious codes, could rationally consider that this conduct is so fundamentally inconsistent with being a role model of the kind which A1 is that there is a public interest in exposing it.
I turn to X's position. She has disclosed the information, she says, because she was hurt by A1's 'hypocrisy about the whole situation'. That assertion is not further explained, and I do not understand it. It appears to be based on reasoning after the event, rather than on any reasoning which she could plausibly have engaged in at the time. It is inconsistent with her evidence that even after she found out about A1's relationship with A2, she continued the relationship with him for a time, and even after her relationship with A1 ended, she kept in touch with him, even to the extent of discussing that relationship with him after she disclosed the information. She says that she knows that A1 has lied to A2 about X's relationship with A1. The basis for that is material which I consider in the confidential annex to this judgment. For the reasons I give in that, I consider that that is a fragile basis for any justified sense of outrage on her part. Moreover, on any view, it happened after, not before, she disclosed the information.
Conclusions
I have analysed the facts at some length. I can state my conclusions briefly. The interference with the article 8 rights of A1 and A2 which is proposed by R and X is not a proportionate means of achieving a legitimate aim. I was referred by Mr Browne QC to McClaren v News Group Newspapers Limited [2012] EWHC 2466 (QB). I consider that that decision is distinguishable, on two main grounds. First, the Claimant in that case was married at the material time, and second, he had, in the past, sold a similar story about himself to a newspaper.
I consider now the proposed exercise by R and X of the freedom conferred by article 10. I can also do this briefly, because the facts which are relevant to the two competing Convention rights are, in this case, the same. In the light of my conclusion about article 8, I consider that the grant of an order restraining publication of this material for a short period is a proportionate means of achieving a legitimate aim. I should deal with two further points here.
First, R argued that the story is already in the public domain. I accept that, depending on the extent and content of any publication, that could mean that it would not be necessary or proportionate, for the purposes of protecting the article 8 rights of A1 and A2, for an injunction to be granted, even for a short time. I have compared the material which is already in the public domain (as summarised in R's witness statements) with the proposed story (also as described in R's evidence). In my judgment, there is a significant gap between what is now public and what would become public if the story were published. It is proportionate, in that situation, to restrain publication of that further material. I should also make clear that, in my judgment, the extent to which there is some material in the public domain is not great enough to mean that damages would be an adequate remedy.
Second, the As applied for, and I granted, derogations from the principle of open justice. These too, in my judgment, are necessary and proportionate. They will last for a short period, when they can be reconsidered by the court. Without them, the purpose of the application would be defeated, as without them, the parties could be identified.
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Mr Justice Dingemans:
At 2 pm on Wednesday 5th August 2015 there was listed before me the hearing of a return date in relation to an injunction which was granted by Laing J. on Saturday 1st August 2015. Laing J. gave an open judgment [2015] EWHC 2361 (QB) in the morning on Wednesday 5th August 2015 giving her reasons for making the injunction. The relevant background is set out in that judgment.
In the event the parties agreed orders containing undertakings and directions for trial, which meant that the hearing before me did not go ahead. This short judgment records that fact by way of open judgment, and this is because the orders provided for a derogation from the principle of open justice in that the order for anonymity of the Claimants made by Laing J was continued.
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Mr. Justice Edis:
The 3rd August 2015 was the return date for an interim freezing and disclosure order granted to the claimant in support of enforcement of an unpaid debt. A claim form under Part 8 has been issued claiming an injunction in similar terms as the substantive relief in these proceedings. On the return date, the claimant applied for an order granting the injunction for a period of two years, and for further disclosure. I extended the existing order until 11.59pm on 6th August and reserved my decision until 09.30am on that date. This is my decision.
Procedural history
An order without notice was granted by Knowles J on 29th June 2015 and the matter first came before me on the return day specified in his order, the 7th July 2015. On that occasion the defendant was represented by solicitors and counsel. I continued the order, varied some of the disclosure provisions and extended its reach to cover assets anywhere in the world. I fixed the main return date for 3rd August 2015 and ordered that a further hearing should be held on 10th July 2015. The purpose of that hearing was to consider any application which the defendant wished to make to use his assets to meet legal costs in proposed judicial review proceedings. That hearing took place and, again, the defendant was represented at it. No substantive application was made for access to the frozen funds to meet the future costs of the application for judicial review. The defendant said in a witness statement dated 9th July 2015 that his solicitors in those proceedings, K&L Gates, held funds which were already allocated to past costs. He said that his costs going forward will be funded entirely by third parties. At the hearing on 10th July I was informed that his costs of these proceedings would be met by well wishers of the defendant and that he did not need access to his frozen funds for that purpose. The defendant did not oppose the making of the orders which I made at either hearing before me.
The judgment debt
The defendant was the Mayor of Tower Hamlets, having been elected as such on the 22nd May 2014. Soon afterwards, the claimant and three others began proceedings before the High Court under the Representation of the People Act 1983 to have the election set aside on several grounds, principally the alleged commission by the defendant or his agents of corrupt and illegal practices contrary to that Act. Mr. Richard Mawrey QC was appointed as Election Commissioner to conduct the trial and to report to the High Court under sections 145, 158, and 160 of the Act. The trial lasted from 2nd February-13th March 2015 with oral submissions being made on 24th March 2015. A reasoned judgment was handed down by the Commissioner on 23rd April 2015 and is to be found at [2015] EWHC 1215 (QB). A consequential order was made which was sealed on 27th April 2015. The result is well known and was in favour of the petitioners and adverse to the defendant. The only aspect of it with which I am concerned is the order for costs which was made. This provided that the defendant was to pay the Petitioners' costs of the petition to be assessed on the standard basis if not agreed, and payment on account of costs was ordered in the sum of £250,000. No time was specified for payment which means that they were payable with 14 days, namely by 7th May 2015. No payment has been made by the defendant, and this is the debt which is the reason for the present claim for a freezing order.
Judicial Review
I am told that the defendant has now issued judicial review proceedings to challenge the decision of the Commissioner at least in part. I have seen the Grounds for Judicial Review and I accept that although some of the conclusions of the Commissioner which were adverse to the defendant are not challenged, their outcome may affect the costs order. The application for permission has not yet been heard and it is conceivable that, if permission is granted, the proceedings will not be concluded for a considerable period of time.
The Charging Orders
Initially, the claimant (whose entitlement under the order is joint and several and whose title to bring these proceedings is not disputed) sought to enforce the judgment by seeking charging orders. There are, in all, three London properties which are the subject of argument before me. They are 30 Deal Street, London E1 5AH and numbers 3 and 5 Grace Street London E3 3DJ. Interim Charging Orders were granted by Master Yoxall in respect of Deal Street and 3 Grace Street on 27th April 2015. Those two properties alone appear to afford sufficient security for the payment of the judgment debt if the defendant is beneficially entitled to the whole of the equity in them. The third property, 5 Grace Street, was the subject of later proceedings because only latterly did the claimant seek to contend that the defendant had a beneficial interest in it. I summarise the position as to the properties as follows:-
Interim C/O Final C/O Disclosure date for defendant Estimated value of equity (subtracting initial mortgage advance from online valuations produced by D): no account is taken of the effect on the equity of the mortgage instalments which have been paid by the defendant. D's contention as to his interest Legal Title
30 Deal Street 27/4/15 24/7/15 c. £364 0% D's sole name
3 Grace Street 27/4/15 29/6/15 24/7/15 c. £255 26% D's sole name
5 Grace Street 16/7/15 31/7/15 D denies any interest in this property and has produced no figures. 0% D's wife's sole name
These three properties are investment properties which produce rent. The defendant and his family live at another property in which he says he has no interest.
Initially the claimant's solicitors considered that their charging orders would secure payment of the costs (which may exceed £250,000 after assessment). They believed that he was the sole beneficial owner of 3 Grace Street and Deal Street. They believed that to be the case because that is what he had said in evidence during the trial of the Petition. I have read the transcript of that evidence, and will not set it out here. It was unqualified by any reference to any interest in these two properties being vested in his wife, although he did also say that she owned another property, which turned out to be 5 Grace Street. On 23rd June 2015 an application was received from Ayesha Khatun Farid, who is the defendant's wife, objecting to the charging orders and applying to be joined. She claimed a 74% interest in 3 Grace Street and a 100% interest in Deal Street, and produced declarations of trust dated 16th May 2006 to make her claim good. In the event, she was joined to the charging order proceedings and directions were given. Her claims to an interest in all three properties are due for trial on 1st December 2015. It was this intervention and the defendant's confirmation that it was his case also that his interest in these properties was limited to the same extent that caused the claimant to seek an injunction, and which was an important part of the evidence which caused it to be granted. The claimant contended that he had been misled as to the extent of the security for the debt in correspondence if the new contentions were true.
I have included the date for disclosure in the Table above because it shows that by now the defendant should have given disclosure of documents relevant to the issue in those proceedings, namely the extent of any beneficial interest he or his wife may have in the properties. She was subject to the same directions.
The claimant appreciated that if the claims of the defendant's wife proved to be correct, there would only be 26% of the equity in 3 Grace Street available to satisfy his claim, perhaps some £66,300. He therefore brought these proceedings to secure the benefit of any other assets the defendant may have by preventing their dissipation.
The Freezing and Disclosure Orders: procedural history and evidence served
The without notice order of Knowles J restrained the defendant from disposing of any of his assets up to the value of £350,000. That exceeds the judgment sum, but the payment on account of costs was based only on an estimate of the costs which have yet to be assessed. He was also ordered to inform the claimant's solicitors, to the best of his ability, of all his assets in England and Wales, whether in his own name or not and whether solely or jointly owned giving the value, location and details of all such assets. He was required to verify this on affidavit by 6pm on Friday 3rd July. He was allowed living expenses of £500 per week and also a reasonable sum for legal advice and representation.
On 1st July 2015 the defendant swore an affidavit. It disclosed the existence of three bank accounts with credit balances totalling £12,659.62. In relation to property he said that the legal titles to Deal Street and 3 Grace Street were in his sole name but said that he had no beneficial interest in Deal Street and a minority beneficial interest in 3 Grace Street. This exiguous information did not explain what had happened to the defendant's earnings over the years, or how he had managed to fund his defence to the proceedings in the Election Court.
My first Order made on 7th July 2015, but sealed on 8th July, was in similar terms. The sealed copy of the order in the bundle recites that the hearing was without notice to the defendant. This is wrong. Counsel appeared on behalf of the defendant, instructed by his present solicitors in these proceedings who had themselves only just been instructed. Before it was sealed I was sent a draft by counsel and I caused my clerk to point this error out to counsel and she received the response
"Yes that it is correct.
Upon hearing Counsel for the Claimant and Counsel for the Defendant.
The Defendant had notice of the hearing. "
It now required disclosure of all assets worldwide. This was because of a concern about where the defendant's assets might be in view of his disclosure. He had said through his counsel that he had no assets abroad, and the order therefore simply required him to confirm that on oath if it was true. The Order contained a more specific disclosure obligation requiring information about Deal Street and 3 Grace Street, and tax returns, and full disclosure of all income. I also ordered him to provide details of all expenditure of all sums over £500 from 1st January 2010 to date. I ordered disclosure of details of third party funding for the defendant's legal costs because they would be relevant to the extent to which he required his frozen assets to fund legal advice and representation, in particular in connection with the judicial review proceedings. Further, if the suggestion that his costs had been paid by third parties could not be substantiated, it would imply that the defendant himself had access to very substantial sums.
On 9th July 2015 the defendant made a witness statement. This was in support of an application for the sum of £80,466.20 held by K&L Gates to be spent on outstanding legal fees from the trial and on the preparation of the judicial review application. My order had made no allowance for that sum to be paid, but had given liberty to apply on 10th July 2015 and ordered that evidence in support should be served on 9th July. In the event that hearing resulted in a somewhat amended Order (finally sealed on 17th July after correspondence between the parties and with the court) which made adjusted provision for living expenses but still did not permit the use of assets for legal fees because I was told orally by counsel that the ongoing costs in these proceedings would be met by third parties. I have referred to the funding of the judicial review proceedings above. I made it clear that I was allowing a lengthy period for compliance with the disclosure provisions because they were onerous and because it was important that the defendant took care to avoid careless errors. After this Order the claimant and K&L Gates have agreed that the funds held by them can be defrayed for legal expenses, and I am not concerned with that fund any longer.
The disclosure provisions in the Order sealed on 17th July for present purposes required disclosure to the best of the defendant's ability by 29th July 2015 of the following things, among others:-
"6.2.1 Full details of the accounts from which fund were used by the defendant or any third party to purchase 30 Deal Street, London E1 5 AH and 3 Grace Street, London E3 3DJ, both of which are registered in his sole name and of any other properties in which the defendant has a beneficial interest which has yet to be disclosed…including the name of the account holder and/or holders; and full details of the date and amount of any payments made to finance the purchase in any way;
6.2.6 The defendant's expenditure in the above period [from 1st January 2010 to date] of any sum over £500 including by means of the withdrawal of cash from any of his deposit or other accounts and details of all such expenditure. The defendant may disclose bank statements from all his bank accounts in compliance with this provision."
On 29th July 2015, within time, the defendant served his second affidavit. This repeated what he had said before about the ownership of the properties. It contained a passage about what had become of a fund raising effort launched on 30th April 2015 at a political meeting seeking donations (not loans) to be credited to a particular bank account. In relation to the two disclosure orders identified above, it contained somewhat surprising omissions. First he said
"In response to order 6.2.1 I make the following statement. In or about June 2005 I purchased 3 Grace Street and a month later in July I purchased 30 Deal Street. The former was purchased for £232,000 with a down payment deposit of £56,288 and mortgage (from Mortgage Express) of £176,544. the purchase was financed from my NatWest current account to Maxwell Solicitors. Of this total down payment, 26% was contributed by me and the remainder 74% from my wife. As regards 30 Deal Street the purchase price of this was approximately £280,000 of which £117,000 came from my wife and her relatives and the remainder from a mortgage (from Redstone Mortgage). Once again the purchase of this property was made from my NatWest current account. As the claimant's lawyers are aware these properties are currently the subject of Charging Order proceedings involving my wife and she will be making full disclosure in due course. I therefore do not wish to prejudice her case in any way."
As I have noted above, the directions in the Charging Order proceedings require both the defendant and his wife to have given disclosure of documents already. The defendant did not disclose anything else. Exhibit MLR 6 is the list of payments exceeding £500 from the three bank accounts in the relevant period. It shows that since January 2010 the defendant has been paying Redstone Mortgage a monthly sum by direct debit which must be the mortgage on Deal Street. The defendant has not explained or produced any documents which explain
i) Why he has been paying the mortgage on a property in which he has no interest? On the face of it the discharge of the mortgage would appear to evidence a claim to a beneficial interest in the property. He has also been paying what I understand to be the whole mortgage on the other property although he says he has only a 26% interest in it. I know this because of the authorisation which I have granted to the Bank to continue to make these payments, which are less than £500, under the existing direct debit.
ii) Why he has been receiving the rental income from a property in which he has no interest, see MLR/4. He told me through counsel (the defendant was present at the hearing on 3rd August 2015) that the rental income has been declared to HMRC. The account of the rental income was drawn up very recently by Consilium Consulting LLP and shows the defendant as the "proprietor" of both Deal Street and 3 Grace Street. It confirms that the mortgage interest was deducted from the profit and also certain other sums which are itemised going back to 2010.
Secondly, the defendant produced a list of payments out of three bank accounts, which are the same ones which he had previously disclosed. These payments exceed £500. Where they were payments by cheque, no information is given apart from that fact. No information at all was provided about who the money went to, and what the defendant bought with it. I asked whether he filled in and kept counterfoils. I was told, by counsel speaking in the presence of the defendant, that he does not keep records and could not possibly identify the payees of all these cheques. I do not know how Consilium LLP have managed to vouch for the deductions from the rental income going back to 2010 without any records. I was told that two cheques totalling £35,000 paid in April 2014 were for legal expenses in contemplated defamation proceedings. This fact was not disclosed in compliance with my order, but shows that information does exist which could have been given in the affidavit, for which I allowed time to ensure it could be properly and completely prepared.
My approach to the evidence
It is submitted that the omission of the details of the contributions made by the defendant to the purchase of the properties is a clear contempt of court and similarly that the failure to identify the destination of cumulatively large sums by cheque is a contemptuous failure to provide "details" of expenditure as ordered. As I indicated in the course to the hearing, there is no application before me to commit the defendant for contempt and I do not intend to make any ruling on that issue. If an application is made to commit the defendant for contempt, any explanation he may have will have to be fairly considered and the terms of the Order strictly construed to determine whether he is guilty of contempt of court.
It is, however, reasonable for me to approach my present task on the basis that the application for interim relief was properly founded because there are good grounds to believe that the defendant is seeking to minimise the extent of his interest in Deal Street and 3 Grace Street. Since its grant, there are questions about the defendants' candour in giving disclosure which he has not resolved by his evidence. It is quite clear from what I have already said that he has not disclosed the full position in regard to Deal Street and 3 Grace Street. His failure to identify the destination of any payment by cheque over the last five years may or may not amount to a contempt of court, but it justifies a finding that his approach to these proceedings is such that unless restrained there is a real risk that he will dissipate his assets. The submission that such large payments in round sums by cheque justifies an inference that the money has been used to acquire assets is sound. If it is wrong, the defendant could have shown that by explaining where the money went. Mr. Khan, counsel for the defendant, told me on instructions that the defendant had spent all his money on "politics". I cannot act on that assertion, unless and until it is supported on oath, accompanied by persuasive detail and documentation. If he did acquire any assets with the money, he has not disclosed them. If he is concealing them, it is because he does not wish them to be available to satisfy the judgment debt. This is, in itself, a form of dissipation for present purposes.
Certain further matters arise from the disclosure in the affidavit of 29th July 2015 which lead to the same result. A comparison of MLR/6 (the payments out of the three bank accounts) and MLR/7 (the "loans" made by third parties to fund the defendant's legal expenses) reveals further questions. The "loans" identified in MLR/7 total £749,500 and were made by 53 different donors. Ms. Turner, the claimant's solicitor has filed evidence to show that some of these individuals are not likely to have been able to afford such sums. I will not set it out in full, but an example is Foujiya Sultana. She is said to have lent the defendant £80,000 between September and December 2014 and a further £2,500 since. The defendant said in his evidence at the trial that Foujiya Sultana was his niece aged 23 or 24 years. She has a job which is not likely to enable her to acquire large capital sums. Rafia Munni is said to have paid £8,000 directly to K&L Gates on 17th July 2014. This is the only payment so described and I infer that the rest of the payments (amounting to £741,500) were made to the defendant who paid them onwards to K&L Gates. This inference is supported by the payments out to that firm from the defendant's Natwest account to which I will come shortly. In addition to that payment Rafia Munni paid further sums amounting to £34,730 in September and November 2014. Again, the evidence suggests that her employment is unlikely to generate such sums. Limehouse.com is said to have lent £25,000 and the London Training Centre £22,000. The financial circumstances of these companies, so far as the evidence reveals, do not permit the making of such loans. Therefore, the suggested sources of these payments into the defendant's bank accounts are questionable. Where did the money come from? A further question is this: why did all these people lend the defendant money? A donation to a political cause is one thing, but a loan implies an expectation of repayment. Why did anyone think that the defendant would be able to repay £749,500 in loans? According to him, he has a 26% share in one property in London and £12,659.62 in the Bank. It is reasonable to infer that some of these lenders must have a different view of the creditworthiness of the defendant than this. How has this come about?
There was controversy during the hearing before me on 3rd August about Mr. Hoar's description of this evidence as showing "money laundering". This was, in my judgment, an unnecessarily inflammatory expression. Mr. Hoar made it immediately clear that he did not mean that any of this money was the proceeds of crime. To my mind that makes the use of the term inapt. What he actually meant was that this evidence casts grave doubt on the suggested source of the sum of £749,500. If it was not loans from the 52 named people or companies was it actually the defendant's money? If so, was the arrangement designed to conceal this fact so that his true wealth remained hidden from the claimant?
Payments to K&L Gates including the £8,000 paid directly by Rafia Munni on 17th July 2014 up to and including 20th May 2015 amount to £624,223. This is the total of all payments identified by the defendant to that firm. If he paid any sums to them by cheque he has not identified those payments and so they are not included. If any third parties paid them directly then he has failed to disclose that fact contrary to the terms of the interim order I made in July. On this basis it is reasonable to observe that he appears to have received £125,277 in loans more than he has paid to his solicitors in costs. I do not know why that is so, or where that money is.
Finally, for present purposes, the payments out of the Natwest account show what appear to be initial deposits for a Landrover vehicle followed by regular finance monthly payments to a hire purchase company. No vehicle has been disclosed by the defendant among his assets and the payments are such that any such vehicle must have a significant value. No evidence was given by the defendant about this. When the issue was raised at the hearing, Mr. Khan (again speaking on instructions) told me that this car had been sold in June 2015 for £22,500. The proceeds were paid to Mohammed Abdul Munim who is one of the lenders listed in MLR/7. Mr. Munim is said to have lent the defendant £60,000 for his legal costs and I was told that the proceeds of sale of the car were paid in part settlement of that debt.
These are Part 8 proceedings and I have not heard oral evidence. The only disclosure relating to these issues which has taken place is that provided by the defendant which I have described above. I am not therefore able to make findings of fact about the matters I address above. What I have to decide is whether, on the evidence, there remains a sufficiently demonstrated risk of dissipation of assets to continue the freezing order and to make any further order for disclosure. That risk was shown in the first place principally by reference to the difference between the defendant's evidence about his property ownership at trial and his present case on that issue. The claimant also relied on the findings of the Commissioner about the truthfulness of his evidence in certain respects. The issue is whether the defendant has produced evidence which is sufficiently cogent to show that the injunction should not continue. For the reasons I have given, I do not regard his evidence in his affidavit of 29th July 2015 as cogent at all. It raises more questions than it answers. I allowed a period of three weeks for the preparation of this evidence and I consider it therefore fair to decline simply to excuse its failings as originating from some benign cause and to give effect to my assessment of it.
I was referred to paragraphs 24 to 29 of Ms Turner's third witness statement, in which the defendant's evidence is compared with the documentary evidence exhibited by Helal Rahman which is said to demonstrate that the defendant lied about his dealings with Hardings solicitors and Geoffrey Maxwell. If that is true it may mean that he has an interest in a partnership that was the beneficial owner of shares held by Helal Rahman in the Bangla Town Business Complex Ltd. The claimant says that he has evidence obtained during the election petition that he holds an interest in this partnership that could be worth over £100,000. Although on a reading of the documents there appears to be some force in this submission, I will not rely on it without affording the defendant a fair opportunity to deal with it in these proceedings. The matters I have dealt with above arise from his own evidence and it is fair to approach my decision on the basis of a proper judicial assessment of what he has himself said. The Bangla City allegation does not arise from his evidence before me. That evidence was served in compliance with a disclosure order and not as a means of answering the claimant's case. I do not regard it as necessary to resolve the Banlga City issue to determine the application I have to decide. The same applies to the suggestion that the defendant has interests in a building currently under construction in Bangladesh. If the defendant seeks to vary or discharge the order which I intend to make, he must do so having served evidence dealing with the issues raised in this judgment and in the claimant's evidence. If that evidence is silent on any material issue it will be fair to treat the allegation as unanswered and to draw an inference.
The present task
I have three issues to decide
i) Whether to continue the freezing order and if so for how long.
ii) What, if any, disclosure order to make.
iii) What costs order to make. I shall not deal with costs in this judgment but will hear further submissions after handing it down on 7th August 2015 and give an ex tempore decision on costs then.
Principles
It is a fundamental principle that a freezing order is not granted for the purpose of providing security for the claim. By procuring an order an applicant is not put in a better position than any other creditor. The mere fact that the defendants creditworthiness is in doubt does not justify the making of an order. In summary, a claimant demonstrates a sufficient risk of dissipation if he shows that (1) there is a real risk that a judgment or award will go unsatisfied, in the sense of a real risk that, unless restrained by injunction, the defendant will dissipate or dispose of his assets other than in the ordinary course of business, or (2) that unless the defendant is restrained, assets are likely to be dealt with in such a way as to make enforcement of any award or judgment more difficult, unless those dealings can be justified for normal and proper business purposes
The claimant accepts that he should not seek to enforce the order for costs while there is a prospect that it may be overturned. The judicial review proceedings are not an appeal against the costs order, but may result in it being quashed or varied. That is why he seeks a time limited injunction to last for two years. That two year estimate is rather rough and ready. It is intended to allow for the judicial review application to be fully contested and determined at a hearing. Permission may not be granted in which case two years is an overestimate of the time those proceedings will take. An appeal to the Court of Appeal and Supreme Court may be involved in which case it will be an underestimate.
I should attempt in exercising my discretion to manage the case in accordance with the overriding objective which means, in my judgment, avoiding repeated applications in these essentially ancillary proceedings as far as possible.
I should not allow these proceedings to provide a forum within which to litigate the pre-trial issues of the charging order proceedings. It was appropriate to make disclosure orders in relation to assets but directions have now been given in those proceedings for disclosure in the usual way. If any party fails to give disclosure then the usual sanctions are available. Unless there is a good reason to do so, it would not be right simply to duplicate those directions and attach a penal notice for non-compliance.
Discussion and decision
For reasons which appear above I have concluded on the evidence before me that there is a risk that unless restrained by order of the court the defendant will dissipate his assets and will take steps to frustrate the enforcement of the judgment debt. I therefore propose to continue the freezing order in the same terms as before.
I will not grant that order for two years as asked. It seems to me that this is guesswork and that two years is a long time for an order of this kind. The continuation of the order should be further considered when the result of the trial of the charging order proceedings is known. That is fixed for 1st December 2015, with a time estimate of 3 days. It may well result in a reserved judgment and I therefore propose to grant an order to expire at midnight on 31st January 2016. The trial judge can be informed of this time limit and, if the proceedings are not concluded by that time and date for any reason, an application can be made under the liberty to apply provision which will appear in my order.
Disclosure order: I now turn to paragraph 6 of the Draft Order prepared by the claimant's advisers. This seeks substantial disclosure, after substantial disclosure orders have already been made. Mr. Hoar accepts, I think, that to a degree the proposed new orders repeat orders made in the interim orders, but he is concerned that those earlier orders need to be "tightened up" in view of the way in which the defendant has complied or purported to comply with them.
Paragraph 6.1 contains 9 sub-paragraphs on which I rule as follows:-
i) This order duplicates the disclosure order already made in the charging order proceedings and as I have said this is not a suitable purpose of injunctive relief. The position in relation to these properties is as set out above. The defendant and his wife seek to prove that his only contribution to their purchase was 26% of the deposit of one of them. That assertion is capable of documentary proof, no doubt, and if they fail to give disclosure then even if their cases are not struck out, they may fail at trial. If that happens, orders for sale will be made and the claimant will be paid. Accordingly, I make no further order for disclosure in respect of these properties.
ii) The claimant says that the disclosure in relation to the rental income is not satisfactory. He is right. I have referred to MLR/4 above. It constitutes statements of rental income drawn up by Consilium LLP in July 2015. That is not what is required. What is required is the underlying documents which show what the income is, and what has been done with it. They must have been gathered together to enable Consilium LLP to prepare what is, in effect, a summary of them. They will therefore be disclosed. This is because they are not solely relevant to the issue of the shares of the beneficial interest in the properties but also to the issue of what income the defendant has.
iii) I make these orders for the same reason as I have made (ii) above. The order in relation to bank statements will be subsumed in an order which I will describe when dealing with paragraph 6.2 of the draft order at paragraph 36 below.
iv) I decline to order any further Tax Returns but the interim order already made requires the defendant to use his best endeavours to obtain the ones covered by it which he has not disclosed so far. His solicitors have, I accept, tried and failed to obtain them from HMRC so far. The defendant must continue to use his best endeavours to obtain them and I will include an order in this Order to make that clear. It will be co-extensive with the earlier order in relation to tax returns. I am not persuaded that tax returns going back to 1995 will assist. Otherwise I make the orders contained in paragraph 6.4. If the defendant cannot produce any cheque stubs he must explain why that is in his affidavit and produce such other documentation as will evidence the destination of these payments. If, for example, any money was paid to solicitors for legal costs a letter from them confirming addressed to his solicitors in these proceedings will no doubt be obtainable. My reasoning appears from the concerns I have expressed about his evidence above.
v) Not all of the lenders listed in MLR/7 are members of the defendant's family. I accept that a degree of informality occurs in the Bangladeshi community when money is passed between members of the same family. This extends no doubt to close friends and associates. Transactions often depend on trust. However, it is remarkable that these very large sums of money have apparently been lent by people of modest means. Some of the lenders are businesses which will have to prepare accounts and the same degree of informality will not be possible in those cases. Further, such a degree of informality is simply not possible when dealing with 123 separate payments from 52 sources. There must be a record of who paid what, and when, and on what terms otherwise it would be quite impossible for the defendant to keep track of the state of the various loans. He tells me through counsel that he cannot say who his cheques were made out to during this time, so I doubt if the information in MLR/7 comes purely from his memory. The suggestion made by the claimant is that the sum of £749,500 was not in fact lent to the defendant as is alleged but represents some other source of funding. I consider that there is enough substance in that suggestion to require the defendant to provide disclosure which definitively deals with it. He should therefore produce the relevant bank statements, and loan agreements or other written evidence of the making of loans. As will appear in relation to the draft at 6.2 which I deal with below, the bank statements will be a sub-set of a larger quantity of bank statements which are to be disclosed.
vi) I make the orders at 6.1.6-6.1.7. I refuse the order in 6.1.8. The order will not be to produce registration details or to give the current whereabouts of vehicles. If he has sold them, he will not know where they are nor will he have registration documents. I will deal with moveable chattels at 6.1.9 which includes vehicles and anything else of value.
vii) See above.
viii) See above.
ix) The defendant will be required to produce a list showing what items which may reasonably be valued at £2,000 or more he has owned or in which he has had any beneficial interest since 1st January 2012. If the value has or may have changed during that period, by depreciation or appreciation, he should list the item concerned at its highest potential value. In all cases he should say what he paid for it and what, if it has been sold or otherwise disposed of, he received for it giving the dates of all relevant transactions and the other parties to them.
By paragraph 6.2 the claimant seeks ongoing disclosure of all bank statements as they are received. There is no such order in respect of all bank statements to date. In view of what I have said about the questions concerning his income and expenditure I consider that disclosure of bank statements for the three disclosed bank statements should be given. They plainly exist for the period covered by MLR/6 because they are its source. I consider that they should be disclosed from 1st January 2010. I know that it is alleged that some older bank statements have been disclosed by the defendant's wife in the charging order proceedings, but they are relevant to that action, and I have dealt with the potential duplication above. I therefore order disclosure of bank statements going back to that date and ongoing disclosure in relation to the three disclosed accounts as asked in paragraph 6.2 of the draft. That deals with 6.1.3.1 and 6.1.5.
This disclosure can now be given quickly. The need for it has been clear since 7th July 2015 and I have removed the more complex area of disclosure concerning the interests in the three properties which involve quite a degree of work (and which should already have been given in the charging order proceedings). I therefore order that the disclosure and affidavit should be served on the claimant's solicitors by 4.00pm on 14th August 2015. Where any material has been sought by the defendant but not obtained by him using his best endeavours, he should say so and provide the relevant correspondence.
I agree to the request to allow drawings of £2,020.81 per month from a nominated bank account provided that all the defendant's income is credited to that bank account.
I do not allow the defendant to draw any funds for legal advice and representation. That is because he told me in his witness statement of 9th July 2015 that his costs in the judicial review proceedings would be met by third parties. His solicitors in those proceedings have notice of this order and will not facilitate any breach of it and they are required by money laundering regulations to satisfy themselves of the source of funds they receive. The court can safely rely on them to ensure that the funds they use to progress the judicial review proceedings are genuinely third party monies which do not belong to the defendant. I was told orally on 10th July 2015 by counsel who then appeared that the same applies to his costs of these proceedings. Any application for leave to draw funds for legal representation in these circumstances will have to be supported by cogent and patently complete and candid evidence. In reaching this conclusion, I also have regard to the different and inconsistent explanations contained in MLR/3 of the fate of a bank account which was advertised at a meeting on 30th April 2015 as the place to send donations to a "fighting fund" for the defendant.
Both parties will have liberty to apply to vary this order. Any party relying on evidence in support of any such application will serve it on the other party not later than 7 days before the return date and any evidence in reply will be served not later than 2 days before the return date.
When circulating this judgment in draft, I directed the parties to attempt to agree a draft Order reflecting its terms. I also sought typographical and factual corrections and invited the parties to check the arithmetic underlying some of what appears above. It is open to both parties to raise any matters of substance when it is handed down.
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Mr Justice Green :
A. Introduction: Issues and facts
(i) The issue / preliminary matters
This case concerns the application by two defendants facing capital charges in criminal proceedings in Thailand for disclosure to them of personal data held by the Defendant, the Commissioner of Police for the Metropolis ("MPS"). The data is contained in a confidential report ("the Report") prepared by the MPS into a murder inquiry conducted in Thailand. The purpose of the Report was to enable the MPS to provide reassurance to the families of the victims about the investigation being conducted by the Thai authorities. The application is brought under section 7(9) of the Data Protection Act 1998 ("DPA 1998").
This matter has been brought before the Court on an urgent and expedited basis during the vacation. As of the present date the trial of the Claimants (who are the accused in the Thai criminal proceedings) in Thailand is ongoing having commenced in early July 2015. The prosecution has nearly completed presenting its case; the accused (the Claimants in these proceedings) will open their defence shortly and it is anticipated that the trial will continue until mid/late September 2015, when the court will adjourn to consider the evidence and arrive at verdicts. The decision is taken by a judge; there is no jury. I am told that the defence can tender evidence, which therefore includes any disclosure ordered as a result of these proceedings, until the end of their case.
In order to address certain procedural issues arising I convened a case management hearing on 19th August 2015 and the substantive hearing was held on 21st August 2015. Judgement is now being given upon an expedited basis. I indicated to the parties at the case management hearing on 19th August 2015 that, having made enquiries myself by that stage and regardless of outcome, I would grant permission to appeal and that the Court of Appeal would hear any appeal very expeditiously in order that the final outcome of this case would be in time to enable any disclosure that was ultimately ordered to be assessed and placed before the Thai court, if that was considered appropriate. I took this view because the issues of both law and fact are complex, novel and difficult. The stakes are very high for both sides. For the Claimants they could hardly be higher: life or death. For the Defendant it has been urged upon me that an incursion by a court into the ability of the police, or of Ministers, to make promises of confidentiality to foreign authorities, could have substantial and adverse consequences for law enforcement and/or the fulfilment of public policy or security objectives.
In order to explain my reasoning it has been necessary in this judgment to record the arguments of the accused in the Thai proceedings. I should make clear at the outset of this judgment that, in setting out arguments made by the parties and in particular the Claimants about the Thai criminal investigation and the proceedings, nothing that I say is intended to express any view by this Court whatsoever on the merits of the issues arising in the Thai courts or upon the conduct of those proceedings by the authorities there.
On 19th November 2014 each Claimant submitted a subject access request to the MPS under section 7(9) DPA 1998 (set out below at paragraph [72]). They each sought disclosure of material held by the MPS in connection with its review. The MPS accepts that, prima facie, it does hold information ("personal data") relating to the Claimants. However, it relied upon section 29 DPA 1998 (set out below at paragraph [74]) which permits access requests to be refused in certain defined circumstances relating to criminal law enforcement. In this case the MPS says that in preparing the Report: (i) it was processing the Claimant's personal data for purpose of family liaison which it submits is a legitimate part of crime enforcement; and (ii), it was proportionate on the facts to withhold the data, even in a death penalty case.
The MPS has confirmed that the total of the potentially relevant "personal data" is to be found in drafts of the final report and in one email from 2014. I shall refer throughout this judgment to this material generically as the "Disputed Information", but I also refer to the "Report" to indicate the final version of the Report prepared by DCI Lyons and his team.
With that introduction I turn now to the facts.
(ii) The basic facts: the murders
On 15 September 2014 two young British tourists, Hannah Witheridge and David Miller, were brutally murdered on the island of Koh Tao in Thailand. Hannah was also raped. The crimes made international news. The Claimants in this case – Zaw Lin and Wai Phyo – are Burmese nationals who were living in Thailand. They were arrested and charged by the Royal Thai Police ("RTP") with the murders of Hannah and David. The Claimants confessed to these attacks both during interviews with the police and then later during a video recorded demonstration of how they acted before police officers. Later they were taken to the scene of the murders where they re-enacted the attacks this time with the world's media in attendance. Later on the Claimants alleged that the confessions had been tortured out of them and the confessions have now been retracted. They have subsequently complained of the conduct of the prosecution and by the courts and they allege they cannot obtain a fair trial. If convicted the Claimants face the death penalty and indeed this is actively sought by the prosecution. The incident, but also the misgivings about the handling of the prosecution arising out of the Claimants allegations, has received worldwide coverage in the media. For obvious reasons the case is one of great sensitivity to the Thai authorities.
(iii) The deployment of the DCI Lyons of the MPS to Thailand and the concerns expressed by the MPS about confidentiality
The misgivings raised were sufficient for the Prime Minister to engage in discussion with the Prime Minister of Thailand with the consequence that the two reached agreement that The Commissioner of Police for the Metropolis (MPS) would send a team led by a senior officer to Thailand to conduct an independent inquiry. That senior officer was DCI Lyons. The legal basis for this cooperation was section 26 Police Act 1996. This empowers a police authority to provide advice and assistance to foreign police authorities and it includes a power to send police officers on a temporary basis to a third country to engage with such foreign authorities. The power can only be exercised with the express authority of the Secretary of State subject to such conditions as the Minister might consider appropriate.
In the present case the authority granted by the Minister took account of the fact that Thailand maintained the death penalty and that in the absence of assurances about the possible punishment that might be imposed at the end of the trial the officers assigned to go to Thailand were to undertake, in essence, a listening or observer role. The authority emphasised the need to avoid "straying in the area of advice and support". Evidence before the Court included that from Ms Cressida Dick, an Assistant Commissioner with the MPC seconded to the Foreign Office but at the time an Assistant Commissioner responsible for Specialist Crime and Operations. She has explained that because assurances about the death penalty were not forthcoming "…the s26 authority was prepared on the basis that the initial stage of his [DCI Lyons's] deployment would be comprised of observational work which would serve the family liaison function, and the wider needs of the families".
In paragraph 15 of her witness statement Ms Dick has explained that "… the Commissioner of the RTP had sought and obtained express agreement from DCI Lyons at the outset that his observations of the deployment, as set out in the Report, would only be shared with the Miller and Witherbridge families, and would not be disclosed any further".
There are three further points which arise from this evidence. These are: that agreements of this sort are routine; that they are considered to be "essential"; and, that without them the engagement would simply not occur. The Assistant Commissioner thus explains that in her experience "… agreements of this kind are commonplace and essential where foreign governments and policing authorities provide us with access to their information, and vice versa, whether on an ad hoc or routine basis. I was content that DCI Lyons's agreement was wholly appropriate, and it is my view that without such agreement, it would not have been possible for DCI Lyons's team to achieve any of their objectives".
The purpose of the engagement was therefore not that the MPS could conduct its own investigation. Further, because the MPS will not, as a matter of as a matter of settled policy, assist foreign authorities to pursue investigations where there is a risk of the imposition of the death penalty, the purpose of the inquiry was also not to enable the MPS to provide advice to the Thai authorities. In further consequence the Report has not been provided to the Thai authorities.
Nonetheless as is evident from the documents that I have read, the Thai authorities and the RTP cooperated fully with DCI Lyons and his team who were, in consequence, able to produce a comprehensive report on all aspects of the investigation. This has enabled the MPS to provide reassurance to the families of the victims. The RTP was of course fully aware of the reaction of the international media. The evidence of Ms Dick indicates that the Thai authorities were sensitive to the risk that a report might be used to engender further public criticism but also, and importantly, that it could if publicised prejudice the trial planned to be held in Thailand. This latter point was uppermost in the thinking of the MPS. Assistant Commissioner Dick was concerned that the MPS's work could inadvertently prejudice the trial. She wished to ensure that any work undertaken by DCI Lyons and his team did not "become part of the Thai evidential chain". Had this occurred it risked placing the MPS, its officers and the UK "… at extreme legal and reputational risk". In paragraphs 18 and 19 of her statement Assistant Commissioner Dick states:
"18. It would be a significant and I believe a damaging step to provide the Report or parts of it to the suspects to use in their defence when we were not willing to give it to the Thai authorities. I believe that it would significantly undermine the Thai authorities' relationship with UK law enforcement, if not the wider relationship between the two governments given the very high-profile nature of the case. In future cases, it would have a significant impact on Thai cooperation with UK police investigations and would affect the wide variety of cases where UK citizens, businesses and interests because drawn into the Thai criminal justice system, whether as victims, suspects, witnesses or family members. The reputation of UK policing and "Scotland Yard" in particular is very high internationally. This enables significant success and support around the world which benefits UK citizens and interests. I am concerned that the breach of trust involved in releasing the report in this manner would affect the UK police and MPS reputation beyond Thailand.
19. Whenever we approach sharing or receiving information internationally we will always consider the issue of confidentiality. If we do not receive the appropriate assurances about how our information will be treated within another country we cannot cooperate with them. Equally, we would not expect another agency in another country to cooperate with us if they did not receive the assurances they may receive about how their information may be used."
Later Assistant Commissioner Dick expressed the opinion that if the legal risks of deployment of teams abroad included the risk of subsequent disclosure pursuant to the DPA 1998 then this would: "… make it very difficult for the MPS to give assurances the foreign authorities require to preserve the integrity of their own criminal procedures".
Detective Superintendent John Sweeney of the Homicide and Major Crime Command in the MPS also gave detailed evidence but I will only summarise the overarching themes. He gave evidence about his extensive experience of arranging and conducting foreign engagements of this sort. He echoed the concerns of Assistant Commissioner Dick. He also gave evidence about the practical difficulties of securing deployment in foreign jurisdictions given that invariably the very reason why a deployment takes place is because the incident abroad is complex or controversial. This in turn invariably implies a high level of sensitivity on the part of the foreign authority as to the use to which any resultant report might be put; "acute diplomacy" is the order of the day and securing the trust of the foreign authorities is an important and often difficult task for the MPS.
(iv) The Report of DCI Lyons
DCI Lyons duly produced his Report and he gave a detailed verbal summary to the families
I propose now to summarise the Report. I am conscious of the need not, in effect, to disclose the Report incidentally through this judgment. It is however necessary to say what I can about the Report because it lies at the heart of this case and because I should do what I can to explain to the Claimants (and also to the public) the basis of my judgment. In describing the Report I have therefore relied upon the evidence in the public domain given by the MPS itself as to the contents of the Report. I have also relied upon information as to its contents from press reports including press statements issued about the Report by the families via the Foreign and Commonwealth Office ("FCO"). I have, of course, had full sight of the actual Report and drafts thereof and all other material which contains "personal data" about the Claimants. I am clear that the description that I give below preserves confidentiality. DCI Lyons in his Witness Statement to the court provided a summary of the Report and that is the starting point. The Report sets out the background to the deployment of DCI Lyons and his team to Thailand. It records the misgivings that were circulating in the media about the investigation though of course the Report does not indicate that these misgivings were accepted. Instead of referring to the Report for details of these "misgivings" I can explain them by reference to material in the public domain in the form of press coverage and witness statements and other evidence placed before me in this case. Zaw Lin says in his statement that when he was arrested he was stripped naked and exposed to extremely cold air from an air conditioning unit. He says he was beaten, kicked and punched. He says that the police held a plastic bag over his head and neck to suffocate him. He says there were threats to kill him, electrocute him and burn him and he denies that he had a lawyer or translator present when interviewed and that he was deprived of food until he eventually signed a confession because he could not withstand any further mistreatment. Wai Phyo has also given a witness statement to this court. He makes the same complaints, in more or less identical language. These allegations are strenuously denied by the RTP. In referring to these allegations I reiterate: I am doing no more than recite evidence that is in the public domain. I can also refer to a letter from Mr Ross Allen, head of Consular assistance, the FCO, dated 27th November 2014 to Ms Maya Foa (who has given evidence in this case for the Claimants) of the Death Penalty Team at Reprieve. Mr Allen acknowledges the concerns of the Government about allegations of corruption and mistreatment of the accused and says that these concerns have been raised with the RTP. He explains that the Prime Minister had also had discussions with the Thai Prime Minister about the matter. He explains that because of these concerns "... we exceptionally agreed that a UK Police team should review the Thai investigation". This I believe suffices to explain the background to the Report. The Report also refers to the fact widely reported in the press that the reconstruction of the crime scene had been insensitive to the families as had the release of photographs of the victims on the beach.
The Report describes the victims and their characters in glowing terms: they were talented and blameless young people who were brutally murdered whilst on holiday.
The Report summarises the evidence collected by the RTP. It includes summaries of physical evidence collection relating to the accused. It summarises the witness evidence relating to the movements of the accused and their activities. DCI Lyons makes the comments that "[a]s may be expected" (ie in a report which describes an investigation into a crime) "... much of this material also contains the personal details of third parties, namely witnesses, other identified individuals (including members of the families of Hannah and David), Thai police officers, translators and lawyers." I have emphasised the words "as may be expected" because it highlights the point that in many respects what is being described in the Report is no more than the routine conduct of a serious crime investigation. This is not a Report which contains, for instance, state secrets.
In his Witness Statement DCI Lyons describes his approach to the Report as being, in effect, one of studied neutrality. He says: "It is not, and was never intended to be, an attempt to present a case for or against any particular suspect. It is a summary of the RTP investigation, the evidence collected and the lines of enquiry pursued so far as we saw from our observations. It was my role to approach the RTP with an open mind, and this was the way in which I approached the drafting of my Report".
The Report describes the approach adopted by the MPS in preparing for its inquiry. It then addresses the details of the crimes. It chronicles the events leading up to the discovery of the bodies. The Report sets out in detail the steps taken by the RTP in investigating the crime and in pursuing suspects and leads. It provides an account of how evidence was collected such as the performance of mass DNA testing, the identification and retrieval of CCTV footage from across the island, and the retrieval and collation of cell phone data etc. It describes the autopsy results. It records the third party witness evidence collected.
With regard to the accused the Report describes the events leading up to their arrest and it records their interviews including their confessions. In particular the Report makes reference to the fact that confessions were made at more than one time. DCI Lyons points out that he cannot comment upon the allegations made later that the confessions were procured by torture "in an open statement" but he does say that the accused repeated their confessions in court before the judge in the presence of their own lawyers. He also says that the accused have not adduced medical or other evidence which might corroborate their torture claim. I should add for the sake of completeness that the Claimants did not accept the accuracy of all of these statements.
The report sets out in some detail relevant Thai criminal law procedures. It chronicles meetings with the families. It makes a very limited number of recommendations concerning matters of procedure and, for instance, in respect of the handling of relations with the families. It does not comment qualitatively upon the Thai investigation in any material sense.
It is thus fair to say that in very large measure the Report is descriptive and contextual. It does not contain value judgments about the Thai authorities. Even where it does refer to the evidence that forms the core of the prosecution case it is largely general or merely summarises what is in documents which the MPS team were shown. Very roughly I estimate that the percentage of information contained in the overall Report which would amount to personal data which would even in principle be subject to disclosure under the DPA 1998 would be in single digits. It is apparent from the above that the preponderant part of the Disputed Information could not ever be subject to disclosure under the DPA 1998.
The description that I have given above is of the Report as a whole; not the "personal data" therein. It will be clear however that the personal data that is found within the Report relates to the above matters. Of course it does not follow that in relation to any given, specific, item of personal data that it is necessarily a comprehensive or cogent piece of stand-alone evidence.
(v) The submission of subject access requests under the DPA 1998 and subsequent events
As I set out at the start of this judgment on 19th November 2014 each Claimant submitted a subject access request to the MPS under section 7(9) DPA 1998.
In their Witness Statements before this court the Claimants have explained why they consider their applications to be valid. Each makes essentially the same points: (i) that the information contained in the Report might be incorrect; (ii) that at the time the Report was prepared the accused had not then been shown any of the evidence that the MPS team had sight of; (iii) that the MPS team had access to at least part of the case that the RTP was going to advance; (iv) that the Report might contain information that was useful to the accused as part of their defences; (v) that were many false statements made in the press about the accused and these might be perpetuated in the Report; (vi) that these falsehoods might be given greater publicity if the Report was made public ie the information shared.
Much of the reasoning is focused upon establishing that the Report must contain "personal data". This is not now an issue in dispute. The MPS accepts that it does. The Claimants have endeavoured to clothe their arguments in the somewhat technical language of the DPA. It seems to me that the bottom line of these arguments, stripped bare of technical garb, can be put in two ways. First, the views of the MPS carry weight. Scotland Yard has an international reputation. If the Report is seen as favourable to the prosecution and contains material supportive of the RTP investigation (which is in effect how the Claimants say it has been presented in public by the families) then they should have the right to see the personal data so they can correct any misapprehensions. Secondly, that in any event they should be able to use any personal data which is favourable to their defence.
The MPS refused the requests upon the basis that the Disputed Information that was held by the MPS which would otherwise be subject to disclosure was exempt from disclosure under section 29 DPA 1998. This provides an exemption from disclosure in relation to data relating to criminal enforcement activities. In a letter of 19th December 2014 the MPS contended that: the UK officers deployed to Thailand had not conducted any investigation into the murders; that the Thai authorities permitted the MPS officers to have observer status only; that the MPS did not provide advice or assistance to the RTP; that the MPS did not take physical possession of any evidence; that the RTP provided to the MPS an interpreter who translated some of the documents for the MPS; that the MPS subsequently visited the families of the deceased to explain verbally limited aspects of the investigation as well as the judicial process in Thailand; that none of the MPS officers conducted or participated in or assisted in any witness interviews nor were present during interviews; that the officers did not take photographs or measurements of any crime scene; and that no officers conducted, assisted or observed any test or analysis carried out.
The MPS sent letters dated 23rd December 2014 to the Claimant's legal representatives in which it was stated that disclosure would be likely to prejudice the prevention and detection of crime and/or the apprehension or prosecution of offenders.
The position of the Claimants as now pleaded in the Particulars of Claim can be summarised in the following way. The Claimants are concerned that because of the very high profile nature of the case they risk not receiving a fair trial in Thailand. They refer to media coverage which is, they submit, hostile to them. In particular they cite the public reaction of the families of the victims to the report given to them by the MPS. Specifically they refer to the fact that the FCO issue a joint statement on behalf of the families on 6th December 2014 in which the families said they were confident in the work carried out by the Thai authorities and that from what they had seen the suspects had a difficult case to answer. The statement included these words: "the evidence against them appears to be powerful and convincing". The statement however also says this: "They [i.e. the accused] must respond to these charges and their arguments must be considered with the same scrutiny as those of the prosecution…" The Claimants also cite the public reaction of the Thai authorities to the favourable response given by the families following receipt of the MPS verbal summary: "Relatives of the deceased in the UK have stated that they are confident in the evidence in the Koh Tao case and the evidence was clear beyond a shadow of a doubt". This material was covered in the Thai press.
They submit that having access to their own personal data would not undermine the prosecution but would remove or reduce the risk of prejudice of unfairness created by the MPS sharing the Claimants' personal data with the families and the dissemination of the gist of the report into the public domain. They say that they could correct inaccuracies in that data.
(vi) The issue
The action is brought under section 7(9) DPA 1998. The action raises an important point about the extent to which police authorities, which are cooperating with foreign police authorities, either to further the latter's inquiries or to gather information for their own purposes, must make the fruits of their labour available in so far as it contains personal data which falls within the scope of the DPA 1998.
The relevant legal framework which governs this question derives from both EU and domestic law; and there is also a strong input from the European Convention on Human Rights ("the Convention"). The relevant EU measure is Directive 95/46/EC of the European Parliament and of the Council of 24 October 1995 on the protection of individuals with regard to the processing of personal data and on the free movement of such data ("The Directive"). The domestic implementing measure is the DPA 1998.
The dispute between the parties boils down to a relatively narrow compass which concerns the powers of the MPS to withhold data. In short there is significant common grounds between the parties which means that it is agreed that prima facie the Claimants are entitled to disclosure of personal data about them contained in the Disputed Information unless the MPS can invoke an exemption from disclosure. It is thus common ground that: (i) the MPS is a data controller within the meaning of section 1(1) DPA 1998; (ii) the Claimants are data subjects within section 1(1) of the Act; (iii) the Disputed Information contains some material that amounts to personal data; and (iv) but for the operation of any exemption the MPS would be bound to disclose to the Claimants that personal data. The issue thus turns on whether the MPS has a lawful right to refuse access. The Directive in two places (Articles 3 and 13) sets out that it does not apply to matters outside the scope of EU law (which in large measure includes international criminal law enforcement matters) and in any event even where EU law applies Member States are empowered to introduce into national law exemption from disclosure based upon (loosely) considerations of criminal law enforcement. The heart of the dispute in this case is about whether, on the facts of this case, the MPS was entitled to withhold access.
I should at this stage briefly address a concern that the Claimants have about the identification by the MPS of specific items of "personal data" in the Report. In oral argument Mr Facenna for the Claimants submitted that I should be sceptical of the claim by the MPS that the amount of personal data in the Report was small. I heard submissions about the scope and effect of sections 1 and 2 DPA 1998. Mr Facenna in particular submitted that a Report that was about a crime allegedly committed by the two Claimants should in very large measure be treated as personal data, more or less in its entirely. He referred me to the Guidance issued by the Information Commissioner "Determining what is personal data". On pages 16 and 17 the following is stated:
"It is important to remember that it is not always necessary to consider 'biographical significance' to determine whether data is personal data. In many cases data may be personal data simply because its content is such that it is 'obviously about' an individual. Alternatively, data may be personal data because it is clearly 'linked to' an individual because it is about his activities and is processed with the purpose of determining or influencing the way in which that person is treated. You need to consider 'biographical significance' only where information is not 'obviously about' an individual or clearly 'linked to' him.
When considering 'biographical significance', what is important is whether the data go beyond recording the individual's casual connection with a matter or event which has no personal connotations for him. Does the processing of this data affect, or is it likely to affect, the individual? Data may, for example, have personal connotations for an individual if it provides information about an individual's whereabouts or actions at a particular time.
Example
Where an individual is listed as an attendee in the minutes of a meeting then the minutes will have biographical significance for the individual in that they record the individual's whereabouts at a particular time.
The fact that an individual attended the meeting will be personal data about that person. However, this does not mean that everything in the minutes of that meeting is personal data about each of the attendees.
I do not go so far as to construe the whole Report as constituting personal data. Whilst it is correct that it was compiled after the Claimants were arrested as suspects it is nonetheless a report about an investigation as a whole and it contains a good deal of information about matters which are not directly or indirectly about the Claimants. It is possible that the MPS has erred on the side of caution, rather that adopting an expansive interpretation of personal data. In the extremely limited time available I have not been able to perform a very detailed item by item analysis of the exact and true parameters of the personal data. But I have been very alive to the fact that the identification on the part of the MPS might, in all good faith, be conservative and I have certainly borne this in mind when reviewing the actual evidence and have, as I explain more fully below, given the Claimants the benefit of the doubt where I have been uncertain.
B. The procedure to be adopted to determine the dispute
The issue that I have to decide gives rise to troubling and significant problems of procedural fairness. I have been provided with a copy of the Disputed Information on a closed basis for my inspection, in other words it has been shown to me but not to the Claimants or their representatives. I have power under section 15(2) DPA 1998 to receive information which is not shown to the Claimants. This provides: E+W+S+N.I.
"(2) For the purpose of determining any question whether an applicant under subsection (9) of section 7 is entitled to the information which he seeks (including any question whether any relevant data are exempt from that section by virtue of Part IV) a court may require the information constituting any data processed by or on behalf of the data controller and any information as to the logic involved in any decision-taking as mentioned in section 7(1)(d) to be made available for its own inspection but shall not, pending the determination of that question in the applicant's favour, require the information sought by the applicant to be disclosed to him or his representatives whether by discovery (or, in Scotland, recovery) or otherwise."
Section 15(2) thus empowers me to "inspect" the information in issue but I have no power to compel the MPS to provide it to the Claimants. The MPS has moreover made it very clear that it will not provide the Report voluntarily to the Claimants.
Prima facie, if the MPS is correct and the material is immune from disclosure because of a statutory exemption then it would defeat the purpose of the statutory exemption if the Claimants were to be given sight of the material for the purposes of advancing their arguments.
On the other hand if the Claimants are denied access they are hindered in their ability to advance arguments both in rebuttal of those advanced by the MPS and, equally, to advance a positive case as to the probative and forensic value of the data to their defence. The issue before me is unlike a traditional PII application brought in the course of criminal proceedings where the court, if it considers that the material the prosecution wishes to withhold from disclosure (eg about an informant) would be of value to the defence, can in effect put the prosecution to an election: disclose or withdraw. In the present case I do not have the prosecution in the Thai proceedings before me and do not have power to put them to that election and of course they do not possess the personal data anyway. The present case is also unlike the closed material hearings that occur in security and terrorism cases in this jurisdiction where special advocates may be instructed to appear to represent the interests of the accused.
I note that the Court of Appeal in Durant v Financial Services Authority [2003] EWCA Civ 1746 ("Durant") was also shown the disputed information in issue is that case (cf at paragraphs [2] and [12]) and it was the subject of witness statement evidence from officials within the FSA. No particular procedure seems to have been adopted to enable the applicant to advance submissions cognisant of the content of the Disputed Information. However the facts of that case were a very far cry indeed from those before me.
I cannot, in these proceedings, ignore the fact that this is a death penalty case. I confess to profound unease at a procedure whereby a disclosure exercise is being conducted with the accused arguing with their eyes covered. It was essentially for this reason that I convened the case management hearing on 19 August 2015. At that hearing the following became clear:
First, the MPS is adamant that it will not disclose the Disputed Information to the Claimants or their legal advisers on a voluntary basis (even subject to a confidentiality ring) and I cannot compel them to do so. Mr Facenna for the Claimants in any event expressed his disquiet at the prospect of being in such a ring (had it been offered). He pointed out that whilst such cases were common place in commercial and regulatory litigation this being a death penalty case the inability to take instructions from his clients or their legal advisers in Thailand and the potential conflict of interest that might arise if he had to gve an undertaking to this court and could not therefore communicate freely with his clients, were very troubling limitations. It was one thing to be in a ring with a limited ability to take instructions in a commercial or regulatory case but quite another to be so in a death penalty case. In any event because the MPS was not prepared to release the Disputed Information (as was their right) this option was academic.
Secondly, Ms Proops for the MPS submitted that pursuant to section 15(2) DPA 1998 if I had serious questions to pose about individual items of information then I could do so in a closed hearing which would entail the public and the Claimants being excluded from the court room. She submitted that my right to question the MPS was a necessary concomitant of the right of "inspection" which the court had under section 15(2). I agree that in principle this must be so. If I have the right to inspect the Disputed Information that must imply a right to seek assistance so as to be able to understand it. For instance if the Disputed Information had been expressed as an algebraic formula it might have made little sense to me unless I could seek an explanation of it. Mr Facenna submitted however that the right to "inspection" was just that - a limited right for a judge to inspect, and it did not carry with it a further right to seek explanations and clarifications from the representatives of the authors of the information. He also submitted that there was no express power in the DPA 1998 for any form of closed procedure to take place. In my judgment the Court has an implied power flowing from section 15(2) to seek clarification from the representatives of the authors of the material but also the inherent jurisdiction to seek clarification as to the evidence before it. I do not therefore accept Mr Facenna's analysis. I do however have an objection to using a closed procedure from the perspective of natural justice, heightened in a case such as this involving the death penalty. I can conceive of little which is more inimical to the perception and practice of open and fair justice than that the Judge should be alone in a court with a State body discussing whether a death penalty accused should receive or be denied (potentially relevant) disclosure in circumstances where the lawyers of the accused were excluded from the dialogue. This is especially so when the essential nature of the information being discussed is not, for instance, related to terrorism or national security but, on the contrary, is common place summaries of routine criminal procedures – it is not sensitive material per se. For this reason I was not attracted to the notion of any sort of closed procedure.
Thirdly, it was submitted by both parties that if I were really concerned that there was injustice which I was incapable of addressing myself then I should consider the appointment a special advocate who could appear to represent the interests of the accused. I gave serious consideration to this. If this case had not been so urgent I would have considered this option more closely. No suggestion was however made by the Claimants that the Court should appoint a special advocate it being considered that there was no clear power so to do. At all events given the urgency and the time constraints there was no basis upon I could sensibly have delayed this hearing given the progress of the trial in Thailand, the urgent need for me to hear the case and deliver a judgment, and the equally urgent need for the losing party to have a chance to pursue an appeal and therefore for the Court of Appeal to have time to convene and determine any appeal.
I ultimately came to the conclusion that, given the exigencies of the situation, the best way to proceed was for me to raise any questions and queries that I had about individual pieces of information contained in the Disputed Information in open court articulating my queries and questions in the abstract ie without disclosing the specific information in issue. This way Mr Facenna could at least (I hoped) respond by reference to my generic description of the information and according to principle. Further, I sought to mitigate further possible prejudice to the accused by seeking to accord to them the benefit of any doubt that there might exist. The performance of this actual task was however complicated by two matters. First, the Claimants have not put before the Court any information as to the state of play in the Thai proceedings. I am told that communicating with the Thai lawyers (who work pro bono) is difficult and that, not being able to see the Disputed Information, the Claimants did not consider it would be meaningful to the Court to have a comparison. Nonetheless for the purpose of assessing whether any personal data might be useful in the context of the defence it has made life much more difficult that I know very little indeed about the actual Thai proceedings. Secondly, Ms Proops objected to my even attempting to pose in abstract terms questions to Mr Facenna for him to answer about the relevance of what might be in the Report to the defence in the Thai proceedings. When I said to her that I had no intention to letting the cat (ie the Report) out of the bag but that I could see no objection to putting before Mr Facenna the odd hair from its back she nonetheless said that even a highly limited and (frankly) innocuous disclosure like this would be objectionable and contrary to section 15(2) DPA 1998. I invited Mr Facenna to identify (over the lunch adjournment) the information that was now in the public domain about the prosecution case (which was nearing completing in the Thai proceedings) and as to the evidence that was in fact in the possession of the Claimants. This proved not to be possible.
For the record I consider that the way in which I have been required to form a judgment in this case to be deeply unsatisfactory. In a future case which involves analogous sensitivities (which of course not all DPA 1998 cases will do) a consideration of the procedure to be adopted should occur well before the actual hearing; the onus must be on the parties to address this at the earliest possible stage.
C. Relevant legal framework
I turn now to the legal context. In this section I set out the relevant legislative and legal framework. There are two sets of legislative measures which are of prime relevance to the dispute, namely the Directive and the DPA 1998. The latter is the first port of call with the former existing as a source of guidance as to the construction of the DPA 1998. The Convention arises because it has been prayed in aid by the Claimants, in effect, to stiffen the sinews of the Court in the application of any necessity or proportionality weighing exercise.
The parties advanced detailed written and oral submissions about the correct approach to be adapted to the construction of the DPA in the light of the Directive and the Convention. There are a number of points of difference between the parties. These focus upon the scope and effect of section 29 DPA 1998. First, the Claimants submit that personal data obtained for the purposes of a report used for family liaison purposes does not fall within the scope of the exception in section 29 DPA 1998; whereas the MPS submit that construed purposively it does. Secondly, the MPS submit that viewed literally section 29 DPA 1998 does not involve a weighing or proportionality exercise which requires it to weigh the importance of its public policy in not disclosing against the Claimants' public policy in disclosure. On this occasion the MPS does not favour a broad purposive construction and the Claimants do. I therefore need to set out my conclusions on the correct way in which to construe section 29.
(i) Common law principles of construction: Application of anxious scrutiny to the facts under the common law
In my view not much actually turns upon an invocation of broader principles of EU or Convention law. I do not consider that there is a need for the sinews of the Court to be stiffened. In my judgment the common law, and in particular the principles of natural justice and fairness, would in a case such as this which involves the right to life, and the right to a fair trial, as well as powerful countervailing issues of public interest, compel the court to apply the most intense level of anxious scrutiny to the facts to ensure that the accused were not prejudiced. In my view the common law leads inexorably to a purposive construction of section 29 DPA 1998 which permits of intensive scrutiny of all relevant interests arising and which injects a proportionality exercise into the weighing process. The common law takes account of context and adjusts accordingly.
In Kennedy v Information Commissioner [2014] UKSC 20 AC 455 the Supreme Court (at paragraphs [56], [92], [132] and [136] concluded that the strictness of a proportionality review would not materially differ depending upon whether a case was brought under the EU law. Lord Mance stated: "The common law no longer insists on the uniform application of the rigid test of irrationality once thought applicable under the so-called Wednesbury principle... The nature of judicial review in every case depends on the context" (ibid. paragraph [51]).
In Pham v Home Secretary [2015] UKSC 19; [2015] 1 WLR 1591 the observations about the common law in Kennedy were endorsed (at paragraphs [59], [60], [98] and [108] - [110]. Lord Carnwath observed (ibid. paragraph [60]) that the intensity of a judicial review and the weight to be accorded to a decision maker were context driven and that such considerations "apply with even greater force ... where the [act in question] concerns the removal of a status as fundamental [in law] ... as that of citizenship." In other words the more important the fundamental right being potentially intruded upon the greater and more intensive the level of judicial scrutiny. It is perfectly plain from both Kennedy and Pham that the common law, EU law and the Convention can walk side by side when protecting rights.
The present case is not a judicial review. It is nonetheless a determination by this court of the legality of the decision of a public body. The mere fact that the DPA 1998 mandates a different procedure to that of judicial review cannot in my view make a difference; form cannot triumph over substance. The key point is that this Court is determining the legality of the decision of a public body and that the facts and issues arising engage very important fundamental rights.
(ii) The Directive: Relevant principles of interpretation
I should add that ultimately both parties agreed that under the common law an intensive review of the relevant public interests arising was fully justified and that there was most unlikely to be any real difference to outcome based upon a common law, Convention based or EU driven approach to construction.
Nonetheless, I will address the main points of EU law arising. The practical relevance of this argument arises because the MPS argues that the facts of the present case do not engage EU or Convention law at all and since the DPA 1998 was adopted to implement the Directive that is highly relevant to the interpretation of the DPA 1998. In particular no reliance could be placed on EU law or the Convention to assist the Claimants.
The DPA 1998 was introduced in order to implement the Directive. As a measure implementing EU law it must, so far as possible, be construed in conformity with the Directive so as to achieve its purpose. See for a detailed summary of the relevant principles of interpretation and its limits: R (Nutricia Ltd) v The Secretary of State for Health [2015] EWHC 2285 (Admin) at paragraphs [114] – [120]. In Campbell v. MGN [2002] EWCA Civ 1373; [2003] QB 633 ("Campbell"), Lord Phillips of Worth Matravers, MR, said at paragraph [96]:
"In interpreting the Act it is appropriate to look to the Directive for assistance. The Act should, if possible, be interpreted in a manner that is consistent with the Directive. Furthermore, because the Act has, in large measure, adopted the wording of the Directive, it is not appropriate to look for the precision in the use of language that is usually to be expected from the parliamentary draftsman. A purposive approach to making sense of the provisions is called for.
In the present case, submits the MPS, even though the DPA 1998 was indeed introduced to implement the Directive, the facts have nothing at all to do with EU law. In their written submissions the MPS submitted that the Directive was about the completion of the internal market and that fact provided an important backdrop against which to measure the Claimants' application which was about criminal proceedings in Thailand which it was said was about as far away from the internal EU market as it was possible to be. In their skeleton argument they submitted:
"The presence of the MPS in Thailand and the production of the Report as a result, was an activity in the area of criminal law and public security. Moreover, these activities fell squarely outside the scope of Community law. The European Community has no competence over the relationship and cooperation between police forces of Member States and non-member States. Whilst some inter-Member State enforcement activity falls within the scope of Title VI (referred to in article 3(2) (police and judicial cooperation in criminal matters), it makes no provision for interactions with non-Member states [Title V relates to the EU's common foreign and security policy provisions]. For the avoidance of doubt although article 3(2) refers to the scope of Community law, nothing in the subsequent Treaty on the Functioning of the European Union, or the Treaty on European Union would require any different answer, even if article 3(2) were to be read more broadly as relating to the scope of Union law."
In relation to the Convention (and therefore the Directive which is in large measure intended to reflect Article 8 of the Convention) Ms Proops relies upon the judgment of the Supreme Court in R(Sandiford) v Secretary of State for the Foreign and Commonwealth Affairs [2014] UKSC 44; [2014] 1 WLR 2697 ("Sandiford") which, she submitted, showed that a state's jurisdictional competence under the Convention was primarily territorial. I do note that this case is not exclusively extra-territorial: the victims were British and their families are based in this jurisdiction; the statutory authority for the MPS to engage with the Thai authorities was under a domestic statute and was between a Minister in this jurisdiction and the MPS also in this jurisdiction; the Report is physically in this jurisdiction; the briefing to the victim's families occurred in this jurisdiction. Because of my conclusion that the common law affords no lesser protection than EU law or the Convention it is not necessary for me to determine the correctness of the argument advanced by the MPS. I will however address only one issue which concerns the extent to which the Directive (and ergo the DPA when construed to as to achieve the purpose of the Directive) is premised upon fundamental rights.
First, the Directive has multiple objectives only one (and not the most important) of which is focused upon the internal market. Critically, the Directive is also about wide ranging fundamental rights. This is manifest from the recitals to the Directive. Recitals 1-3 of the Directive refer to a range of social and human rights as well as economic desiderata as justifying the measure:
"(1) Whereas the objectives of the Community, as laid down in the Treaty, as amended by the Treaty on European Union, include creating an ever closer union among the peoples of Europe, fostering closer relations between the States belonging to the Community, ensuring economic and social progress by common action to eliminate the barriers which divide Europe, encouraging the constant improvement of the living conditions of its peoples, preserving and strengthening peace and liberty and promoting democracy on the basis of the fundamental rights recognized in the constitution and laws of the Member States and in the European Convention for the Protection of Human Rights and Fundamental Freedoms;
(2) Whereas data-processing systems are designed to serve man; whereas they must, whatever the nationality or residence of natural persons, respect their fundamental rights and freedoms, notably the right to privacy, and contribute to economic and social progress, trade expansion and the well-being of individuals;
(3) Whereas the establishment and functioning of an internal market in which, in accordance with Article 7a of the Treaty, the free movement of goods, persons, services and capital is ensured require not only that personal data should be able to flow freely from one Member State to another, but also that the fundamental rights of individuals should be safeguarded …"
Article 1 spells out that the objective of the Directive is conceived broadly with "fundamental rights and freedoms" of which the "right to privacy" is an illustration:
"Article 1
Object of the Directive
1. In accordance with this Directive, Member States shall protect the fundamental rights and freedoms of natural persons, and in particular their right to privacy with respect to the processing of personal data.
2. Member States shall neither restrict nor prohibit the free flow of personal data between Member States for reasons connected with the protection afforded under paragraph 1."
It follows that the Directive must be construed with the broad range of fundamental rights well in mind. These are not to be narrowly construed. I do not think that (and setting aside for the moment the MPS's argument about the lack of a territorial nexus between the facts of the present case and the Directive) it can be argued that in construing the Directive and therefore implementing legislation such as the DPA 1998 one can simply ignore as irrelevant rights as fundamental as the right to life, which is engaged in this case.
And even if the Directive were to be construed (artificially) with only privacy in mind that would still lead to a broad and purposive construction. In Campbel (ibid) Lord Philips MR stated at paragraph [73] that the legislation was to protect individuals against "prejudice" flowing from the processing of their personal data:
"The Directive was a response to the greater ease with which data can be processed and exchanged as a result of advances in information technology. Foremost among its aims is the protection of individuals against prejudice as a consequence of the processing of their personal data, including invasion of their privacy…"
(Emphasis added)
The 41st recital to the Directive emphasises the right of an individual to verify the accuracy of data relating to him. The Court of Justice has linked this right of verification with the fundamental right to a private life (under Article 8) which is materially wider than the right to privacy. In Cases C- 141/12 & C-372/12 YS v Minister voor Immigratie (17th July 2014) the European Court of Justice emphasised, at paragraph [44] and by reference to this recital, that: "the protection of the fundamental right to respect for private life means ... that that person may be certain that the personal data concerning him are correct and that they are processed in a lawful manner". This was cited by Dingemans J with approval in Kololo v MPS [2015] EWHC 600 (QB); [2015] 1 WLR 3702 at paragraph [22]. The right to private life under Article 8 can indeed extend to a wide range of private interests. It has in some cases before the Strasbourg Court been linked to Articles 2 and 3: See eg MC v Bulgaria (2005) 40 EHRR 20 paragraphs [150] – [153]) which linked the right to private life under Article 8 to the protection of a person's physical integrity and the thoroughness of police investigations.
So far I have focused upon the rights of individuals against the state; but the Directive also recognises that states have important rights which may trump the individual's rights. Article 3 of the Directive defines the "scope" of the Directive but importantly recognises exceptions thereto including in relation to "criminal law":
"Scope
1. This Directive shall apply to the processing of personal data wholly or partly by automatic means, and to the processing otherwise than by automatic means of personal data which form part of a filing system or are intended to form part of a filing system.
2. This Directive shall not apply to the processing of personal data:
- in the course of an activity which falls outside the scope of Community law, such as those provided for by Titles V and VI of the Treaty on European Union and in any case to processing operations concerning public security, defence, State security (including the economic well-being of the State when the processing operation relates to State security matters) and the activities of the State in areas of criminal law,
- by a natural person in the course of a purely personal or household activity."
(An issue arose between the parties as to whether the reference in Article 3 to criminal law was a reference to it simply being outside the scope of EU law ratione materiae; or whether it was referring to a self-contained exception even if it was within the purview of EU law. In this regard questions arose as to how Article 3 was to be construed given that since the adoption of the Directive, EU law has evolved and assumed responsibility for certain aspects of criminal law. I have not in this judgment however considered it necessary to examine this complex issue).
Recital 13 is in the following terms:
(13) Whereas the activities referred to in Titles V and VI of the Treaty on European Union regarding public safety, defence, State security or the activities of the State in the area of criminal laws fall outside the scope of Community law, without prejudice to the obligations incumbent upon Member States under Article 56 (2), Article 57 or Article 100a of the Treaty establishing the European Community; whereas the processing of personal data that is necessary to safeguard the economic well-being of the State does not fall within the scope of this Directive where such processing relates to State security matters…"
Finally, Article 13 provides a broad and free standing exception for criminal law enforcement activities. The basic rights granted to citizens to obtain access to data are set out in, inter alia, Article 6 (relating to data quality) Article 10 (information to be given to data subjects) Article 12 (the data subjects right of access to data) and Article 21 (the duty on Member States to publicise their data production activities). Article 13 empowers Member States to introduce domestic legislation creating exceptions in certain identified areas which includes criminal law enforcement. In relevant part it provides:
"Article 13
Exemptions and restrictions
1. Member States may adopt legislative measures to restrict the scope of the obligations and rights provided for in Articles 6(1), 10, 11(1), 12 and 21 when such a restriction constitutes a necessary measure to safeguard:
(a) national security;
(b) defence;
(c) public security;
(d) the prevention, investigation, detection and prosecution of criminal offences, or of breaches of ethics for regulated professions;…"
The Directive thus in two places provides exceptions of exemptions for "the activities of the State in areas of criminal law" (Articles 3), and "the prevention, investigation, detection and prosecution of criminal offences" (Article 13).
I should also mention the recent judgment of the Supreme Court in R(Catt) v Association of Chief Officers of England & Wales [2015] UKSC 9; [2015] AC 1065 ("Catt"). This is significant because it makes clear that there are important policy considerations on both sides of the public interest equation when it comes to balancing police interest with those of individuals. Lord Sumption held, in relation to the DPA 1998, that it provided a comprehensive scheme of enforcement and regulation which reflected, not just EU law, but also the Convention:
"8. The exercise of these powers is subject to an intensive regime of statutory and administrative regulation. The principal element of this regime is the Data Protection Act 1998. The Act was passed to give effect to Directive 95/46/EC on the protection of individuals with regard to the processing of personal data… a harmonisation measure designed to produce a common European framework of regulation ensuring a "high level of protection" satisfying (among other standards) article 8 of the Convention: see recitals 10 and 11. On ordinary principles of statutory construction the Act will as far as possible be interpreted in a manner consistent with that objective."
Later in paragraph [12] Lord Sumption stated:
"12. The Data Protection Act is a statute of general application. It is not specifically directed to data obtained or stored by the police. But it lays down principles which are germane and directly applicable to police information, and contains a framework for their enforcement on the police among others through the Information Commissioner and the courts. It deals directly in section 29 and in Schedule 2, paragraph 5 with the application of the principles to law enforcement. The Data Protection Principles themselves constitute a comprehensive code corresponding to the requirements of the EU Directive and the Convention."
Where does all of this lead to? It leads simply to the conclusion that when construing the DPA 1998 (whether through common law or European eyes) decision makers and courts must have regard to all relevant fundamental rights that arise when balancing the interest of the State and those of the individual. There are no artificial limits to be placed on the exercise.
(iii) DPA 1998
I turn now to the DPA 1998. Section 1(1) DPA defines "personal data" as
""personal data" means data which relate to a living individual who can be identified—
(a) from those data, or
(b) from those data and other information which is in the possession of, or is likely to come into the possession of, the data controller,
and includes any expression of opinion about the individual and any indication of the intentions of the data controller or any other person in respect of the individual…"
Section 2 makes clear that there can be a subset of "personal data" comprising "Sensitive personal data" which may be confidential because it consists of information as to "...the commission or alleged commission [of a person] of any offence" or "... any proceedings for any offence committed or alleged to have been committed by [that person]". Mr Facenna pointed out that simply because information held by the police related to crime was not a reason for it to be treated as sacrosanct and immune from disclosure.
Section 7 DPA sets out the basic provision governing the rights of data subjects to access of personal data:
"Right of access to personal data.E+W+S+N.I.
(1) Subject to the following provisions of this section and to sections 8, 9 and 9A, an individual is entitled -
(a) to be informed by any data controller whether personal data of which that individual is the data subject are being processed by or on behalf of that data controller,
(b) if that is the case, to be given by the data controller a description of—
(i) the personal data of which that individual is the data subject,
(ii) the purposes for which they are being or are to be processed, and
(iii) the recipients or classes of recipients to whom they are or may be disclosed,
(c) to have communicated to him in an intelligible form—
(i) the information constituting any personal data of which that individual is the data subject, and
(ii) any information available to the data controller as to the source of those data, and
(d) where the processing by automatic means of personal data of which that individual is the data subject for the purpose of evaluating matters relating to him such as, for example, his performance at work, his creditworthiness, his reliability or his conduct, has constituted or is likely to constitute the sole basis for any decision significantly affecting him, to be informed by the data controller of the logic involved in that decision-taking.
(2) A data controller is not obliged to supply any information under subsection (1) unless he has received—
(a) a request in writing, and
(b) except in prescribed cases, such fee (not exceeding the prescribed maximum) as he may require.
(3) Where a data controller—
(a) reasonably requires further information in order to satisfy himself as to the identity of the person making a request under this section and to locate the information which that person seeks, and
(b) has informed him of that requirement,
the data controller is not obliged to comply with the request unless he is supplied with that further information.
(4) Where a data controller cannot comply with the request without disclosing information relating to another individual who can be identified from that information, he is not obliged to comply with the request unless—
(a) the other individual has consented to the disclosure of the information to the person making the request, or
(b) it is reasonable in all the circumstances to comply with the request without the consent of the other individual.
(5) In subsection (4) the reference to information relating to another individual includes a reference to information identifying that individual as the source of the information sought by the request; and that subsection is not to be construed as excusing a data controller from communicating so much of the information sought by the request as can be communicated without disclosing the identity of the other individual concerned, whether by the omission of names or other identifying particulars or otherwise.
(6) In determining for the purposes of subsection (4)(b) whether it is reasonable in all the circumstances to comply with the request without the consent of the other individual concerned, regard shall be had, in particular, to—
(a) any duty of confidentiality owed to the other individual,
(b) any steps taken by the data controller with a view to seeking the consent of the other individual,
(c) whether the other individual is capable of giving consent, and
(d) any express refusal of consent by the other individual.
(7) An individual making a request under this section may, in such cases as may be prescribed, specify that his request is limited to personal data of any prescribed description.
(8) Subject to subsection (4), a data controller shall comply with a request under this section promptly and in any event before the end of the prescribed period beginning with the relevant day.
(9) If a court is satisfied on the application of any person who has made a request under the foregoing provisions of this section that the data controller in question has failed to comply with the request in contravention of those provisions, the court may order him to comply with the request.
(10) In this section—
"prescribed" means prescribed by the Secretary of State by regulations;
"the prescribed maximum" means such amount as may be prescribed;
"the prescribed period" means forty days or such other period as may be prescribed;
"the relevant day", in relation to a request under this section, means the day on which the data controller receives the request or, if later, the first day on which the data controller has both the required fee and the information referred to in subsection (3).
(11) Different amounts or periods may be prescribed under this section in relation to different cases.
It will be noted that the jurisdiction of the High Court to rule on the correctness of decisions taken under the DPA 1998 by bodies such as the MPS is created under section 7(9).
It will also be noted that the DPA 1998 does not create two separate exceptions based upon Articles 3 and 13 of the Directive but combines those provisions into a single exception found in section 29. Article 13 of the Directive does not compel Member states to introduce exceptions; it introduces a power ("may") exercisable where "necessary to … safeguard", inter alia, criminal law enforcement. Section 29 provides, so far as relevant to the present case:
"29 Crime and taxation.E+W+S+N.I.
(1) Personal data processed for any of the following purposes—
(a) the prevention or detection of crime,
(b) the apprehension or prosecution of offenders, or
(c) the assessment or collection of any tax or duty or of any imposition of a similar nature,
are exempt from the first data protection principle (except to the extent to which it requires compliance with the conditions in Schedules 2 and 3) and section 7 in any case to the extent to which the application of those provisions to the data would be likely to prejudice any of the matters mentioned in this subsection.
(2) Personal data which—
(a) are processed for the purpose of discharging statutory functions, and
(b) consist of information obtained for such a purpose from a person who had it in his possession for any of the purposes mentioned in subsection (1),
are exempt from the subject information provisions to the same extent as personal data processed for any of the purposes mentioned in that subsection.
(3) Personal data are exempt from the non-disclosure provisions in any case in which—
(a) the disclosure is for any of the purposes mentioned in subsection (1), and
(b) the application of those provisions in relation to the disclosure would be likely to prejudice any of the matters mentioned in that subsection.
(4) Personal data in respect of which the data controller is a relevant authority and which—
(a)consist of a classification applied to the data subject as part of a system of risk assessment which is operated by that authority for either of the following purposes—
(i) the assessment or collection of any tax or duty or any imposition of a similar nature, or
(ii) the prevention or detection of crime, or apprehension or prosecution of offenders, where the offence concerned involves any unlawful claim for any payment out of, or any unlawful application of, public funds, and
(b) are processed for either of those purposes,
are exempt from section 7 to the extent to which the exemption is required in the interests of the operation of the system.
(5) In subsection (4) — "public funds" includes funds provided by any EU institution; "relevant authority" means—
(a) a government department,
(b) a local authority, or
(c) any other authority administering housing benefit or council tax benefit.
Limits are imposed upon persons collecting data. The collection and retention process must accord with certain overarching principles set out in Schedule 1 to the Act. These are not in dispute in the present case. I refer to them to observe that one governing principle is fairness (cf Principle 1). A further point of relevance is Principle 8 which prohibits the transference of personal data to a country or territory outside of the EU unless that territory ensures an adequate level of protection for the rights and freedoms of data subjects in relation to the processing of personal data.
Section 29 permits derogation from the disclosure obligation in section 7 in defined circumstances. As I have already set out the MPS accepts that the Report prepared by DCI Lyons contains personal data. The question for the High Court is whether the MPS is entitled to withhold that personal data from the Claimants because the personal data was "processed" for the purpose of "(a) the prevention or detection of crime, (b) the apprehension or prosecution of offenders"? If the answer to this is in the affirmative then a secondary question arises which is whether granting access would be "likely to prejudice any of the matters mentioned in this subsection". Even if the subject matter of the personal data is within the confines of an exempted subject matter withholding that data from the relevant person is only permitted "to the extent" that disclosure would cause the prejudice to the interests referred to in the section.
Protection is thus not absolute. It is a qualified protection. This conclusion accords with the language of Article 13 of the Directive which introduces a necessity test and permits a refusal to grant access only where the refusal is "necessary" to "safeguard" the purpose.
Although section 29 DPA 1998 and Article 13 use different language they are in my view consistent. They require a balancing exercise to be performed between the individual's right to access and the data processor's right to refuse. In my judgment this calls for a classic proportionality balancing exercise to be performed.
It was submitted by Ms Proops, for the MPS, that in fact section 29 did not call for a proportionality balancing exercise. She submitted (boldly) that provided that the MPS could show a legitimate reason for withholding disclosure then the weight and importance of the personal data and the impact of its non-disclosure on the individual was immaterial. In response to my question whether in the view of the MPS there would be any difference in the outcome where the personal data was (a) the applicant's date of birth or (b) information which could exculpate completely a defendant in a death penalty case, she said that it would made no difference; provided the MPS had a valid reasons for withholding then that was the end of the matter.
This argument is not sustainable. If it were correct then it would in effect reduce to nought the relevant individual's right to privacy or any other right including the even more fundamental right to life. The argument is inconsistent with (inter alia): (a) the Directive and the plain reference to the fundamental rights of the individual concerned; (b) the raison d'etre of the DPA 1998 as a protector of an individual's fundamental rights; (c) the view taken by the Court of Justice that derogations from the individual's fundamental rights had to be construed narrowly and in this regard see by way of illustration Case C-473/12 IPI v Englebert et ors [2014] 2 CMLR 9 at paragraph [39] where the Court emphasised that derogations from the fundamental right to privacy "... must apply only insofar as is strictly necessary" ...this being the traditional language of the Court of Justice when it is referring to a proportionality exercise); (d) the judgment of Mr Justice Munby in Lord at paragraph [99]: see below at paragraph [84] and with his explanation that because of the importance of the policy of protecting individual rights the burden of proof lay on the State to justify derogation to a high standard of proof; and (e) the judgment of Lord Sumption in Catt at paragraph [8].
D. Issues: Analysis and conclusions
In the light of the analysis above I turn now to identify the issues and then to an assessment of the merits of the case.
There is a preliminary issue to address, namely the burden and standard of proof (issue I).
There are then two substantive issues to be determined. First, was the personal data in the Report "processed" for purposes of (a) the prevention or detection of crime or (b) the apprehension or prosecution of offenders (Issue II)? Secondly, would granting access be likely to prejudice any of those matters (Issue III)?
(i) Issue I: Who has the burden of proof of proving both the right to invoke the exemption? What is the standard of proof?
These issues were considered by Munby J (as then was) in R(Lord) v Secretary of State of the Home Department [2003] EWHC 2073 (Admin) ("Lord"). The judge held that because of the importance attached to the rights of the individual it was the data controller who had the burden of proof to establish the right to refuse access and that the standard of proof was a relatively high one. At paragraphs [99] and [100] the judge, relying upon the Directive as a source of interpretative inspiration, stated:
"99. I accept that "likely" in section 29(1) does not mean more probable than not. But on the other hand, it must connote a significantly greater degree of probability than merely "more than fanciful". A "real risk" is not enough. I cannot accept that the important rights intended to be conferred by section 7 are intended to be set at nought by something which measures up only to the minimal requirement of being real, tangible or identifiable rather than merely fanciful. Something much more significant and weighty than that is required. After all, the Directive, to which I must have regard in interpreting section 29(1), permits restrictions on the data subject's right of access to information about himself only (to quote the language of recital (43)) "in so far as they are necessary to safeguard" or (to quote the language of Article 13(1)) "constitute a necessary measure to safeguard" the prevention and detection of crime (emphasis added). The test of necessity is a strict one. The interference with the rights conferred on the data subject must be proportionate to the reality as well as to the potential gravity of the public interests involved. It is for those who seek to assert the exemption in section 29(1) to bring themselves within it, and, moreover, to do so convincingly, not by mere assertion but by evidence that establishes the necessity contemplated by the Directive.
100. In my judgment "likely" in section 29(1) connotes a degree of probability where there is a very significant and weighty chance of prejudice to the identified public interests. The degree of risk must be such that there "may very well" be prejudice to those interests, even if the risk falls short of being more probable than not. "
The burden of proof is thus upon the MPS in this case to show its entitlement to refuse access and it must do this with significant and weighty grounds and evidence.
(ii) Issue II: Was the personal data in the MPS report "processed" for purposes of (a) the prevention or detection of crime or (b) the apprehension or prosecution of offenders?
Mr Facenna submitted that the personal data was not subject to the exceptions in section 29 because a purpose of family liaison was not a purpose for which exemption from disclosure could be claimed.
I do not accept this argument. The pursuit of an investigation for the purpose of family liaison is within the scope of section 29. Of course the paradigm case is where the foreign engagement is for the purpose of collecting evidence to be used in this jurisdiction as part of a criminal investigation or for advising and assisting in a foreign prosecution. However, modern thinking is to accept that the criminal justice system is not exclusively about pursuing and punishing the guilty; it is also about protecting the victims and this can include their families. There are numerous illustrations of this.
First, in murder (and of course in other) cases impact statements are routinely accepted from the families and form part of the evidential basis for sentencing.
Secondly, at the EU level, legislation has been adopted which explicitly recognises the position and standing of victims' families in criminal proceedings: see eg Directive 2012/29/EU of the European Parliament and of the Council of 25 October 2012 establishing minimum standards on the rights, support and protection of victims of crime, and replacing Council Framework Decision 2001/220/JHA ("the Victims Rights Directive"). Under that directive a victim is defined to include: "family members of a person whose death was directly caused by a criminal offence and who have suffered harm as a result of that person's death" (cf Article 2(1)(a)(ii)). I would add that under Article 3 of Protocol No 21 on the position of the United Kingdom and Ireland in respect of the Area of Freedom, Security and Justice, annexed to the TEU and to the TFEU, the United Kingdom has notified its wish to take part in the adoption and application of the Victims Rights Directive.
Thirdly, the rights of families are recognised as an important interest worthy of protection in cases where a person is under the control or custody of the State and dies. The rights of the family to participate in subsequent investigations (for example inquiries and inquests) into how a death occurred is recognised under Article 2 of the Convention on the right to life: See R (Letts) v Lord Chancellor [2015] EWHC 402 (Admin) and the cases cited therein. The following was stated at paragraph [59]:
"The right or legitimate interest of the next-of-kin to involvement in the procedure is viewed as a concomitant of the imperative for there to be an element of public scrutiny of the investigation in order to secure accountability. This in turn is an ingredient of the overriding need to maintain public confidence in the adherence of the State to the rule of law and to prevent any appearance of collusion in or tolerance of unlawful acts. It necessarily follows that the right of the individual to participate, which triggers the consequential obligation upon the State to consider whether legal aid is needed, is an integral part of the Article 2 duty."
In R (Amin) v Home Secretary [2003] UKHL 51; [2004] 1 AC 653 ("Amin"), Lord Bingham identified five different purposes behind the duty to investigate a death in custody and he emphasised the rights of relatives in that of the deceased process. One of the purposes behind the right of families to participate was to ensure " that suspicion of deliberate wrongdoing (if unjustified) is allayed":
"31. The state's duty to investigate is secondary to the duties not to take life unlawfully and to protect life, in the sense that it only arises where a death has occurred or life-threatening injuries have occurred …. It can fairly be described as procedural. But in any case where a death has occurred in custody it is not a minor or unimportant duty. In this country … effect has been given to that duty for centuries by requiring such deaths to be publicly investigated before an independent judicial tribunal with an opportunity for relatives of the deceased to participate. The purposes of such an investigation are clear: to ensure so far as possible that the full facts are brought to light; that culpable and discreditable conduct is exposed and brought to public notice; that suspicion of deliberate wrongdoing (if unjustified) is allayed; that dangerous practices and procedures are rectified; and that those who have lost their relative may at least have the satisfaction of knowing that lessons learned from his death may save the lives of others".
(Emphasis added)
Fourthly, the Directive envisages in Article 3 exceptions to the disclosure obligation in "areas of criminal law". The personal data in the Report is most certainly in the "area of criminal law" since it describes a criminal investigation. The reassuring of the families of the victims of a murder is also in the "area of criminal law". In my view Article 3 is valid as a source of guidance to the interpretation of Article 13, and in due course, the DPA 1998. It is a reason to give to the language of the exception in section 29 a broad construction.
Fifthly, a general policy of treating families well is increasingly recognised as integral to a policy of engendering trust in prosecution authorities which, in turn, is critical in creating a climate where victims and witnesses will come forward to the police and assist in enquiries. Looking after families is thus an increasingly important component of the broad creation of a policy of facilitating the effectiveness of police operations.
In my view construing section 29 purposively by reference to these considerations leads to the conclusion that the MPS, when it compiled the Report, was processing data for a legitimate purpose under section 29 DPA 1998.
(iii) Issue III: Would granting access be likely to prejudice any of those purposes?
I turn now to the weighing, proportionality, exercise.
I should start by setting out some general observations about the approach I adopt to this.
First, it is apparent from section 7(9) DPA 1998 that my first task is to determine whether the MPS acted unlawfully. If I so find then I must form my own judgment about the issues:
Secondly, it has been observed that when a court exercises its own judgment under section 7(9) that power is "general and untrammelled": Kololo (ibid) paragraphs [24] and [32] citing Munby J in Lord (ibid) at paragraph [160]. Ms Proops submitted that if I found an error on the part of the MPS then I had a broad and unfettered discretion which was not limited by the strictures of the Act. For instance if I found that processing personal data for family liaison reasons was not a legitimate purpose I could still, in the exercise of my discretion, permit the MPS to refuse access despite this being outside of the scope of the exemption in section 29. The effect of this submission was that if the MPS acted unlawfully under the DPA 1998 I could simply overlook that unlawfulness and apply a broad discretion ignoring the strictures of the Act. As such the MPS would obtain the benefit of a broader discretion to be exercised in its favour specifically by virtue of its prima facie unlawful refusal. In my judgment section 7(9) cannot support that construction. If Parliament had intended to confer such a broad residual discretion on the court then, in my view, it would have used far more specific language in section 7(9) than in fact it did. In any event I do not understand the observations in the authorities referred to above to suggest that if I find that the MPS has erred that I should simply make up and then apply whatever test I see fit. If I find an error on the part of the MPS such that I must form my own view then I should do in accordance with the principles set out in the DPA 1998 and taking account of the relevant background principles in the Directive and the Convention. My discretion is unfettered by the decision that has gone before, and which I find unlawful, but I cannot depart from Parliament's intent.
Thirdly, it will be apparent from the tenor of this judgment that I consider that in applying the weighing / proportionality test, I must take fully into consideration that this is a death penalty case. It follows that on the specific facts of this case I should apply an "anxious" and intensive review of the evidence and the approach adopted by the MPS in arriving at its refusal decision. I shall accord the MPS no material margin of appreciation or discretion. It of course follows that in another case where the interests at stake are less acute the intensity of the approach adopted by the Court might be different.
With these general observations in mind I turn to the factors advanced by the parties as relevant to the weighing exercise.
The starting point – the Claimant's prima facie right to the personal data: The starting point is that the Claimant's are entitled in law to the data unless the MPS can meet its burden and standard of proof by persuading the Court that there is a fully justified reason for withholding the personal data. This presumption in favour of disclosure should be viewed as a strong and weighty factor. The fact that the courts have placed the burden of proof on the data processor and raised the standard of proof is also a reflection that the default position is one of disclosure. The numerous references to fundamental rights of individuals as the basis for this legislation underscore the proposition that the right of access is a strong right.
The intrinsic strength of the MPS's legitimate objectives: The next question is whether the MPS has legitimate objectives which it can raise relating to law enforcement to be set against the individual's strong right of access. I have set out above that I accept that the MPS is entitled, under section 29, to advance the various general policy arguments about criminal law enforcement referred to in paragraphs [11] – [16] above. The follow-on question is how heavily these should weigh in the proportionality scales. If they were valid but of little weight then it would not take much, in a death penalty case, to persuade me that these objectives could be outweighed. I address below each of the policy purposes identified by the MPS.
Family liaison: I have no doubt but that protecting the interests of families is an important consideration. Nonetheless, in a death penalty case if there was (say) personal data which could, when verified, potentially benefit the accused then it is hard to see how or why the families could or would object to the accused having a fair trial and being able to deploy genuinely relevant evidence. I have set out at paragraph [32] above the statement issued on behalf of the families by the FCO in which the families state that they wish all relevant evidence to be placed before the Thai court and reviewed fairly. I cannot imagine for one moment that the parents of Hannah and David would wish to see the wrong persons found guilty or subjected to an unfair trial. This is thus an important objective but the weight it attracts will depend upon the particular importance of the personal data to the accused especially in the context of the criminal proceedings.
Chilling effect: I turn now to the argument based upon the chilling effect of disclosure. I accept that this is, in law, a valid consideration for the MPS to take into account and raise. This is so even though the purpose does not relate to the proceedings in issue but to other future and unidentified proceedings.
An issue arising in Lord (ibid) was whether data could be withheld from disclosure on the basis of wider public interest considerations which went beyond the case in issue. The Judge held that it was for the data controller to show that the statutory objective was likely to be prejudiced in the case in which the issue arose (paragraph [94]). But importantly he held further (at paragraph [122]), in an observation of direct significance to the present case, that the focus of attention was not just on the facts of the instant case but could also take account of the impact on other cases:
"122. Moreover, I can accept that, although section 29(1) requires that the issue of whether disclosure is likely to prejudice the prevention or detection of crime has to be determined in relation to the particular and individual case in which disclosure is being sought, this does not mean that one can simply ignore the consequential effect that disclosure in the particular case may have in others."
In my judgment this observation must be correct. Nothing in the Directive provides support for a conclusion that the exemption can only be invoked if the data controller can establish that disclosure would be prejudicial in the narrow confines of the instant case. The rationale behind non-disclosure must go wider. Article 13 of the Directive is concerned with the generic activities of prevention, investigation, detection and prosecution of criminal offences and Article 3 refers even more broadly to "areas of criminal law". Disclosure which is prejudicial to these tasks should, under the Directive, be capable of being immune from disclosure. If the disclosure would not prejudice the instant case but would set a precedent which would cause prejudice more broadly, for instance by discouraging cooperation in the future with third parties, then that is also a matter which, in my judgment, falls within the legitimate scope of the protection as a purpose which can in principle be invoked to justify a refusal in the instant case.
The chilling effect argument is in my judgment a powerful argument for the MPS to deploy and I see considerable force in the points made. I accept the evidence of the MPS witnesses on this. The evidence is given by officers of the highest order who have considerable personal experience of the issue. I accept their judgment and opinion as to the risks that release of the Report would give rise to and in particular, their position on: the considerable benefit to the public interest (in relation to crime enforcement and public security) generally in the MPS (and other relevant police authorities) being able to engage with foreign authorities; the high importance that is attached by foreign authorities to confidentiality; and the risk that not being able to give strong assurances as to confidentiality would pose to the ability of the MPS and others to enter into meaningful working relationship with such overseas authorities. This is thus in my view a weighty factor in favour of non-disclosure.
How strong a factor is this? The MPS adopts a very rigorous approach on this point. It accept that in theory no public interest that it advances can be wholly invincible and can never be trumped; but it does submit that the public interest considerations raised are so compelling and powerful that it can conceive of few, if any, circumstances where that public interest it could even be surpassed in importance by a countervailing interest raised by an individual. I asked the parties for their views on a hypothetical situation: A foreign prosecutor fails to disclose to a defendant a key piece of evidence of great value to the defendant in a criminal case. This item is however recorded in an MPS report and amounts to personal data. The report explains that there is compelling evidence that the foreign forensic scientists employed by the police abroad have mixed up DNA samples. It also records that the prosecution are nonetheless seeking to rely in court upon the wrong DNA evidence to inculpate the accused. This entry might be pivotal to the defence and might quite literally represent a matter of life or death. In those circumstances does the Court sacrifice the accused for the wider principle of comity and trust between authorities? Ms Proops for the MPS submitted that such was the power and force of the public interest objectives the MPS advanced that even in such extreme circumstances the public interest would still trump the private interest. Though as observed she accepted that in theory it was not open to the MPS to adopt a blanket approach refusing access come what may. Mr Facenna submitted that this position on the part of the MPS was absurd and showed simply that the MPS in truth wished to adopt a stonewall, blanket policy, of non-disclosure which was a position he submitted was itself unlawful as the deliberate fettering of a statutory discretion. The parties thus agree that there is in law no such thing as a universal right to refuse access; but they disagree strongly as to how and where to draw the line. I do not intend to express even a tentative view on this particular problem. Were it to arise in a future case (and it does not arise here) it would require very much closer scrutiny than has been possible in this case.
I can, in the context of this case, conclude by saying that I accept that the chilling effect policy consideration is a strong point in favour of the MPS but I can leave to another day how it would be resolved in the acute hypothetical illustration referred to.
There is a further point which concerns the risks associated with the disclosure of only small amounts of personal data. It is common ground between the parties (and I view I also share) that I must apply the balancing proportionality test to each item of personal data. There is no one cap that fits all. A good deal of the MPS's core concerns related to disclosure of the Report as a whole. However, there is no prospect of the Report being disclosed: the issue is whether some or all of the personal data contained within in the Report would be disclosed. The position of the MPS is however that the disclosure of even a small portion of the Report would have a serious chilling effect because even a minor release could be seen by foreign counterparties as reflecting a more systemic risk that the ability to enter into confidentiality arrangements would be subject to override by the Courts. I accept broadly the evidence of the MPS on this. However, this is of course already a risk and the MPS accepts, as it must, that it has no right to ignore the law. Evidence was put before this court from the MPS (by DSU Sweeney) which makes clear that the MPS already take account of domestic law when discussing and negotiating conditions with foreign authorities. DSU Sweeney said in relation to conditions sought to be imposed by foreign authorities as a pre-requisite of engagement: "Such conditions will usually be agreed to by the MPS unless they fall foul of UK legal principles or are otherwise considered to be appropriate in the circumstances, in which case the deployment may not be undertaken". Overall, the risk of a chilling effect may be one of scale and degree; but I do accept that there may be a real risk to the public interest of the disclosure of even small amounts of data. In other words it is not necessarily an answer for an applicant to say - disclosure relates only to a small amount of personal data.
Need to avoid interfering in a foreign trial. The MPS has also raised the point that disclosure might risk undermining the Thai proceedings. The Report was not given to the Thai authorities. The MPS team was conscious that they should in no way become part of the evidence chain (see paragraph [10] above). If I acceded to the application I would in effect be giving disclosure according to a set of rules which may be inconsistent with Thai rules on disclosure in criminal cases. As such I could be taking a step which might risk interfering with the criminal law procedure of a foreign sovereign state. That state has its own rules of disclosure; they might very well not be the same as apply in this jurisdiction and there is in fact evidence in this case that in some significant ways they are not the same: for instance I understand that there is no right on the part of the defence to access unused material, and there are different rules as to the prosecution's duty of disclosure of material they propose to rely upon in court. But that does not mean that this court should assume a stance of procedural superiority. It is significant that in this case no evidence has be put before me that the judge in the actual trial is acting improperly or unfairly or that the accused have been unable to avail themselves of all the rights normally open to defendants in Thai criminal proceedings. This somewhat broad consideration against disclosure is underscored by practical considerations. If I order disclosure of the personal data I would risk giving a sliver of the Report which might be misleading because it is taken out of context. It is clear from my reading of the Disputed Information that on some occasions the items of personal data in and of themselves do not have a clear self-contained logic to them. The references may be stray matters included as part of a wider issue which is being discussed in the Report. I can well understand why both the MPS and RTP would wish to avoid a situation where personal data was released and then used but the wider context (the relevant part of the Report) was not in evidence. Quite how far this all goes is however unclear. I have not had detailed evidence placed before me of the Thai court procedures or as to the state of play in the trial. If I ordered disclosure that does not necessarily mean that the judge would rule that data to be admissible. At the end of the day I consider this to be a serious policy consideration which the MPS is entitled to rely upon.
The right for the Claimants to use personal data as part of a defence: There was some debate as to the right of the Claimants to use the personal data for a purpose such as their rights of defence. In my view the Claimants have a perfectly proper right to seek access to the personal data for the purpose of using it subsequently in their defence in criminal proceedings. The DPA is about fundamental rights. The right to a fair trial and the right to life are fundamental rights. The right of access is a fundamental right and it does not lose that character simply because the data, once obtained, is then used to protect a further fundamental right. Reference was made in argument to Durant v Financial Services Authority [2003] EWCA Civ 1746; [2004] FSR 28 ("Durant") where the Court of Appeal was concerned with an application under the DPA 1998 by a Mr Durant to the FSA for access to personal data about him held on the FSA's computers. At paragraph 31 Auld LJ criticised the applicant for making an application which was perceived to be in support of a litigation strategy:
"In short, Mr. Durant does not get to first base in his claim against the FSA because most of the further information he sought, whether in computerised form or in manual files, is not his "personal data" within the definition in section 1(1). It is information about his complaints and the objects of them, Barclays Bank and the FSA respectively. His claim is a misguided attempt to use the machinery of the Act as a proxy for third party discovery with a view to litigation or further investigation, an exercise, moreover, seemingly unrestricted by considerations of relevance."
(Emphasis added)
At paragraph [27] Lord Justice Auld disassociated the right of access from any purported right to participate in legal proceedings:
"In conformity with the 1981 Convention and the Directive, the purpose of section 7, in entitling an individual to have access to information in the form of his "personal data" is to enable him to check whether the data controller's processing of it unlawfully infringes his privacy and, if so, to take such steps as the Act provides, for example in sections 10 to 14, to protect it. It is not an automatic key to any information, readily accessible or not, of matters in which he may be named or involved. Nor is to assist him, for example, to obtain discovery of documents that may assist him in litigation or complaints against third parties. As a matter of practicality and given the focus of the Act on ready accessibility of the information - whether from a computerised or comparably sophisticated non-computerised system - it is likely in most cases that only information that names or directly refers to him will qualify. In this respect, a narrow interpretation of "personal data" goes hand in hand with a narrow meaning of "a relevant filing system", and for the same reasons (see paragraphs 46-51 below). But ready accessibility, though important, is not the starting point.
It is right to observe that Lord Justice Auld was referring to an altogether different context where a person seeks access to data to facilitate that person bringing civil proceedings. In the present case the nexus between the application for access, the personal data and the criminal proceedings is very close to the point of being indistinguishable. The Claimants are facing a capital charge in Thailand. The personal data was collected in the specific context of criminal proceedings and, furthermore, refers to evidence in the case, including that against the accused. There is a powerful connection therefore between the personal data and extant criminal proceedings. As such I do not see how the observations of Lord Justice Auld can have application in the present case. In other words the fact that the application in the High Court is couched in terms of the use to which the data might be put in the criminal proceedings in Thailand does not mean in my view that it is being sought for an improper purpose.
Observations on the importance of the personal data references in the Report: In my view this case ultimately turns upon the intrinsic relevance of the personal data to the defence in the criminal proceedings when set against the interests of the MPS in non-disclosure. The crux of the matter is to take each individual item of personal data and determine whether it is such that it could in any realistic sense provide support for the defence. If a particular piece of personal data does have this quality then it must be balanced against the interests of the MPS. Such a piece of data will attract considerable weight in the scales but there are yet weighty counter points to be placed on the other side of the scales. A delicate balancing exercise then ensues.
In the text below I set out my conclusions on the weight to be attached to the personal data in the Report. I am unable in this judgment to describe in any detail the personal data that is in issue. I think however that in actual fact an alert reader could readily deduce from the description that I have been able to give of the Report what the personal data therein related to.
The approach that I have taken is as follows. I have reviewed ("inspected") each item of personal data in the Report very carefully and I have focused upon the possible value that the item in question could have for the accused in the trial. I have adopted a cautious, pro-accused, view. I have already explained that I am materially hampered in this exercise because the Claimants have not put before me an account of the evidence already tendered in the Thai proceedings, or any indication of what their defence is or might be to the murder charge against them. Nonetheless, it is fairly obvious what the prosecution case is and as I understand matters that case has now very largely been advanced in court and the defence has seen the evidence against the accused and has had a chance to cross examine upon it. On my reading of the Report I have, I therefore consider, a good idea of how the prosecution evidence will have been organised and presented and I believe that I can form a fair view of how the personal data will fit into that case. This means that I can form a view as to whether it is likely to be helpful to the accused were it to be disclosed to them.
The principles that I have applied to the items of personal data in the Report are as follows.
Data harmful to accused: I have been able relatively easily to identify items of personal data which would not be helpful to the accused. I am assuming in any event that inculpatory evidence has already been adduced to the court as part of the prosecution case and, in the unlikely event that it has not, then that omission will have caused no prejudice to the accused. I am therefore concerned essentially with evidence which might be adverse to the prosecution and helpful to the accused. Therefore, I take the position that where I conclude that the personal data in the report is adverse to the accused then I consider that the policy arguments of the MPS outweigh the Claimants interest in disclosure.
Data neutral to accused: If the data is neutral then in my view the legitimate objectives identified by the MPS will trump the disclosure obligation; this is not a case where one would say: "the personal data is neutral and therefore why not disclose it". In fact one would say the opposite. The sort of data which might fall into this category would include data references along the lines of: "X is in custody", or "this is a photograph of the accused" or "the accused lives at Y", or, "these are the main steps in the court procedure to date in relation to the suspects", etc.
Summaries of other evidence: I also identified whether the items of personal data were a summary of other evidence collected by the police. In fact a high percentage of the personal data references reflect summaries of other evidence. This is not at all surprising given the limited observer role played by the MPS. They were not collecting evidence; they were recording in summary form the evidence collected by the RTP. Thai criminal procedure governs the access given to the accused. Although I do not know for certain (because this evidence has not been put before me) I surmise that the underlying evidence that forms the basis of the personal data will have been tendered in court so will be in the possession, in a form permitted by Thai law, of the accused and their lawyers
Level of detail: I have also formed a view as to the level of detail inherent in the personal data. Generally speaking the more general the item of information the less valuable it is going to be as part of the defence of the accused.
Personal data placed in the public domain by the FCO on behalf of the families and deployed adversely to the Claimants in Thailand: The Claimants submit that the personal data has already caused them prejudice because the FCO, on behalf of the families, has stated publically that the evidence was "powerful and convincing" and the Thai authorities have referred in public in Thailand to this as strong support from the families and/or UK Government for the prosecution case. It is said that this risks prejudicing the trial in Thailand. I attach some weight to this. But it is not compelling. First, the FCO did not disclose personal data; they (at its highest) provided a very high level statement about the strength of the evidence generally. Secondly, there has also been extensive press media critical of the Thai authorities, especially in the light of the allegations by the accused that they had been tortured and were subject to unfair procedures – the media coverage was not therefore one way traffic. Thirdly, and importantly, the trial is presided over by a judge about whom no complaint has been made to me in these proceedings. Any adverse comment in the Thai press can, I am bound to assume, be addressed by the judge applying normal, objective, standards.
Observations on the personal data: With these general considerations in mind I would make the following observations about the items of personal data in the Report:
a) The references are frequently brief, descriptive, and broad brush.
b) There are some exceptions to this where personal data is compiled in tabular form. But even here it is not much more than a series of terse statements in abbreviated form eg a summary of the main points in the chronology leading up to a suspect's arrest. In such cases whether the items are viewed in isolation or as part of a wider picture (the table as a whole) it is all information that the accused will already be aware of.
c) A good deal of the personal data relates to the observations of the MPS on documents or video recordings that they were permitted to read and review. As such since (as I understand matters) the accused will have had access during the trial to the same material then the references in the Report would, at this stage, add nothing to the sum of knowledge held by the defence team on these matters.
d) To the extent that the personal data refers to such matters as whether the accused had access to legal representation during interviews and/or translators these are matters within the knowledge of the accused and their lawyers in Thailand even if, as is said in the evidence before me in this case, there is a dispute about such matters.
e) The personal data is not, as I have already observed, analytical and does not perform an evaluation of the prosecution evidence or case.
f) I have not identified any material exculpatory personal data in the Report.
Conclusion: My ultimate conclusion is that there is nothing in the personal data which would be of any real value to the Claimants. I have not identified any particular piece of information to which I would attribute any really substantial weight to be set against the MPS's objectives. As such I accept that the objections to disclosure raised by the MPS to defeat the application are valid and, on the facts of the case, suffice to outweigh the claimants' otherwise strong interest in access.
In coming to this end result I nonetheless feel very considerable unease. I sit at a long distance from the seat of the trial and I do not have a true "hands on" feel for the way the evidence has been tendered in the trial to date or how the accused might structure their defences. I have not been assisted by the lack of evidence about the Thai proceedings or as to the evidence that has in fact been tendered by the prosecution or as to the main lines of the defence. I have had to work these out for myself doing, as the parties put it, "the best I could". This has not been a comfortable process.
E. Conclusion
For the above reasons the application does not succeed. The MPS did not err in its application of section 29 DPA 1998.
There has been no need for me to exercise an independent judgment under section 7(9) DPA 1998. Had I done so in view of my conclusions about (i) the strength of the MPS's legitimate objectives and (ii) the intrinsic value of the personal data to the accused, I would not in any event have arrived at a different decision.
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Mr Justice Stewart :
Overview
Mrs Karen Owers was born on 1 October 1967. She died on 27 August 2014. Her estate brings a claim arising out of matters which occurred at Medway Maritime Hospital, Kent on 14 March 2010. The claim is brought for her pain, suffering and loss of amenity and consequential losses between that date and the date of her death. There is no claim that her death resulted from the alleged negligence of the Defendants. Although strictly the estate is the First Claimant I shall refer to Mrs Owers as "C1". C1's husband, Mr Timothy Owers, was born on 3 June 1967. He brings a claim in his own right arising out of psychological injuries said to have been sustained as a result of the Defendants' negligence on 14 March 2010. I shall refer to him as "C2".
Medway NHS Foundation Trust is vicariously liable for any negligence on behalf of its staff, except that, in the present case, two members of the stroke team (Caroline Bates – nee Hannon – and Chris Gedge) were employees of the Medway Community Healthcare NHS Trust and therefore the Second Defendants are vicariously liable for any negligence by them. For the purposes of this judgment the First and Second Defendants will be referred to as "Ds", there being generally no reason to distinguish between the two Defendants.
This trial follows the order of Master Cook who ordered "A preliminary issue shall be tried between the First Claimant and the Defendants as to whether or not the Defendants are liable to the First Claimant by reason of the matters alleged in the Particulars of Claim and, if so whether or not any of the injuries pleaded were caused thereby; if any such injuries were so caused, the extent of the same. The Second Claimant's secondary victim claim shall be tried at the same time as the preliminary issue."
It is sensible to consider C1's claim first since there is a considerable overlap between her claim and the claim of C2.
It is agreed that on 14 March 2010 C1 suffered a stroke. It was of a rare type, being an insult to one of the posterior circulatory arteries occurring as a result of Basilar Artery Occlusion (BAO). C1's stroke was as a result of Vertebral Artery Dissection (VAD). VAD is a flap-like tear of the inner lining of the vertebral artery, leading to the escape of blood and clot formation. C1's case is that Ds failed to diagnose and treat her stroke either by way of thrombolysis (clot busting drugs) or, if not a candidate for thrombolysis, by aspirin.
Some breaches of duty are admitted, some are denied. The task of the Court in relation to C1's claim is to determine relevant breaches of duty which are in dispute and issues of causation.
It may be helpful at this stage to set out the dramatis personae in this case apart from C1 and C2
(i) Non expert witnesses:
Caroline Bates (nee Hannon), nurse member of the stroke team
Dr Ramphele, Senior House Officer in the Accident and Emergency Department
Christopher Gedge, physiotherapist and advanced stroke practitioner
Dr Mamun, Consultant Stroke Physician
(ii) Expert witnesses who gave oral evidence
Dr Paul Baines, Consultant in Accident and Emergency (for Cs)
Dr Steven Allder, Consultant Neurologist (for Cs)
Dr Gregor Campbell-Hewson, Consultant in Accident and Emergency (for Ds)
Professor Adrian Wills, Consultant Neurologist (for Ds)
(iii) Expert witnesses who did not give oral evidence
Professor Philip White (Cs) and Dr Marcus Likeman (Ds) Consultants in Neuroradiology).
Dr Mark Tattersall (C2) and Dr Niall Campbell (Ds) – Consultant Psychiatrists.
As part of setting the scene it should be noted that there are two main chemical treatments of acute stroke. These are:-
(1) Thrombolysis – this treatment chemically breaks up a blood clot so as to reconstitute normal blood flow back to brain tissues.
(2) Antiplatelets and Anticoagulants – the two referred to are heparin and aspirin. It is not C1's case that heparin should have been prescribed at Medway. It is her case that aspirin should have been prescribed there. This is conceded by the Defendants though there is a dispute as to the time by which it should have been prescribed. Aspirin does not break up a blood clot. Its effect (if it works) is to stop a blood clot getting bigger and it reduces the tendency of a clot to break up and send part of the clot further along the circulatory system, thereby potentially causing serious harm.
I attach to this judgment, as Appendix A, material sections of NICE clinical guidelines: Stroke, Diagnosis and initial management of acute stroke and transient ischaemic attack (TIA). Issued July 2008 (the NICE Guidance).
The Period up to C1's Arrival at Medway Hospital
This period, and in particular the period when C1 woke up at or just before 7am on Sunday, 14 March 2010 is of significance. This is because the onset of stroke symptoms is crucial for determining whether or not a patient can be prescribed thrombolysis. In 2010 the licence for the only drug in the market (Alteplase) specified that it should be given within 3 hours of onset of stroke symptoms. At the time there was also a trial at King's College Hospital London (KCH). KCH was the regional centre and centre for excellence to which Ds referred difficult cases. The trial was for prescribing thrombolysis within an extended period of 6 hours of the onset of symptoms. Generally, Ds would have worked to the 3 hour time frame, on the basis that the knowledge at the time was that the increased risks of haemorrhage associated with thrombolysis after 3 hours outweighed the benefits. This is subject to the fact that Dr Mamun, the stroke physician at Medway, said that in 2010, in appropriate cases, he would prescribe thrombolysis in a young woman up to 4 - 4½ hours after onset of symptoms.
To return to the chronology, C1 and C2 (and their son Jake aged 9 at the time) visited C2's parents who live in Hoo, Kent. They drove from their home in Aston in Oxfordshire. C1's statement, dated 09.05.2014, admitted under the provisions of the Civil Evidence Act 1995, continues:
"3… on the way there I had a bit of a headache. I do get migraines occasionally, usually about 3 or 4 times a year, if that. I have migraine tablets and when I feel the migraine coming on I take a tablet and this usually "nips it in the bud". I get a warning of flashing lights in the corner of my vision and a stabbing pain in my right temple. This headache was definitely not a migraine.
4. When we got to my parents in law I went upstairs for a sleep in the afternoon. I woke up later and although the headache was still there it was much better. I had a meal with the rest of the family in the evening, took some painkillers (panadol as I recall) and then went off to bed. At 5.50 I woke up. I do not recall what it was exactly that woke me up but when I woke I had a funny feeling in my eyes; they were itchy and painful. I had never had this before. I got up to the toilet. I have been asked if I had any problems getting up but my recollection is I got up normally. The only thing was the funny itchy eyes. I went back to bed and must have dozed off as I next woke at my usual time of waking at 07.00.
5. Tim was still asleep. I got out of bed and immediately felt a little bit "strange". The only way I can describe it is like being a little bit drunk as if I had a bit of a hangover. I managed to get dressed. I found I was doing things a bit slower than normal but otherwise I had no problems getting dressed. I picked up my book in my right hand and started to go down the stairs. About halfway down the stairs I suddenly started to feel dizzy and sat down on the stairs where I started to feel a little bit better so I got up again and carried on walking down the stairs. When I got to the bottom of the stairs I just did not feel right and I dropped my book on the floor. My father in law must have heard this because he came over and helped me to sit down. My father in law made me a cup of coffee and as I was starting to drink it I felt my right arm getting weaker and it just seemed to be becoming more and more of an effort to lift my arm. I would describe it as being heavy. I also remember it getting harder and harder to talk and get my words out and I became very frightened.
6. I knew that I was having a stroke. In any event my father in law, Harry, called NHS Direct and they told him to call an ambulance. He then told Jake, my son, to go and wake Tim up.
7. After a very short period of time a Rapid Response person arrived at the house and then the ambulance crew appeared shortly after. I have a very clear memory of these early events and the time spent in Medway Hospital, but I am not so clear about events later on from the time I went to Darent Valley Hospital and Kings College Hospital, London.
8. I went in the ambulance to Medway Hospital and Tim and his dad followed behind in his dad's car. I have seen the ambulance record obtained by my solicitors and know that the ambulance arrived at the hospital at 07.59. I was taken into a cubicle in Accident and Emergency and by the time we arrived my speech had got worse. Tim arrived shortly afterwards and stayed with me the whole time."
The two main issues arising out of this history are:
(i) Has C1 proven on the balance of probabilities that she is accurate and reliable in relating what happened at 05:50 hours?
(ii) Was C1 experiencing symptoms on waking up at about 7am or only after she got out of bed?
It is common ground that the "funny feeling" in the eyes described at 05:50 hours is irrelevant to the issues in the case. C1 submits that, based on her witness statement, the relevant neurological symptoms first occurred shortly after waking up. The Ds cast doubt on the 05:50am incident and ask the Court to find on the balance of probabilities that C1 awoke suffering from stroke symptoms and, given that these were of uncertain time of onset, and may well have been present for more than 3 (or 4½) hours at or shortly after C1's arrival at hospital, she was excluded from receiving thrombolysis treatment. This factual evidence as to the onset of symptoms is therefore the first matter which the Court has to determine.
The Onset of Stroke Symptoms: The Evidence
C2 cannot really assist on this point since, on the Sunday morning, he was awakened at about 7am by Jake coming to the bedroom. He cannot therefore say what if anything happened at 05:50 hours or describe C1's state immediately upon waking, some minutes prior to him being awakened. However he does comment as to what happened subsequently at the hospital. These comments are relevant to the reliability of records.
Before turning to the oral evidence, it is important to set out a number of the medical records relevant to this point.
The ambulance crew arrived at 07:24. The presenting complaint was ? stroke – TIA as C1 had right-sided weakness. Her pupils were equal and reacting. On examination she had weakness on the right-side with slurred speech. The ambulance notes continue:
"Pt woke 7am. ® sided weakness. ® sided facial droop. ?TIA. Speech problems.
- had headache yesterday – worse than normal – did not clear with tablets
* Hx – Pt collapsed 4 weeks ago while shopping after sudden episode of concussion. Investigated @ John Radcliffe Hospital (undiagnosed) admitted 3 days
Pt sustained head injury from this previous episode …"
A care continuum document timed at 08:10 assesses C1 as "mobile, independent …headache/heavy on limbs…"
The next note which relates to the onset of symptoms is timed at 08:16 where at Triage, Nurse Farrall wrote "pt woke this morning feeling unwell and wobberly (sic). pt has slurring of speech and ® sided weakness".
At 08:20 hours Nurse Hannon, now Nurse Bates, the Designated Stroke Specialist, recorded:
"Stroke Services
HPC. Last night was feeling unwell. Felt sick with a headache. Took painkillers which helped. Patient went to bed and awoke with right-sided weakness* and ? slurred speech.
O/E. Patient's speech very slow and deliberate with mild dysarthria. C/O headache like tight band around head. Patient able to push and pull and raise arms – when arm falls she is able to lift back up again with effort.
Patient suffers with migraine – no previous episodes of aura. Also seizure 15 years ago – nil since. Also a fall and head injury 4 weeks ago – investigated in Oxford Hospital.
Plan "Neurology non suggestive of CVA – requested to hand back to A+E for further Assessment at 08:30 hours."
(* See later)
C1 was then handed back to the A & E team by the Stroke Team and she saw Dr Ramphele, Locum SHO, who recorded in the notes at 08:36:
"PC: Slurred speech, ® sided weakness. ? stroke.
HPC: Woke up this morning with slurred speech and ® sided weakness.
No hx of CVA. No hypertension.
Or Cardiac disease
Head injury – 4 weeks ago, after the patient collapsed.
Investigated, no cause found…."
(Dr Ramphele examined but, for the present purposes, that is the relevant part of the note).
In terms of evidential value as to the onset of symptoms it is important to look to some other entries in hospitals to which C1 went on the Sunday afternoon.
Darent Valley Hospital
14.01 "Onset of Rt sided weakness and slurred speech at 7.00am, ?CVA, pt brought to Resus, seen immediately by A/E doctor"
14.25 "HPC patient presented with right sided weakness, started about 7.00am this morning and was seen at Medway Hospital and sent home after assessment by the stroke team…"
22. (i) KCH triage at 16.00 "…sudden onset ® sided weakness/slurred speech 0700 at home (found by husband)…"
(ii) Thrombolysis Pathway: summary. "Date and Time of onset 14/3/10 0700"
(iii) History taken by Neurologists, Dr Bercocal/Dr Haider (Specialist Registrar)
"History
Yesterday she had headache. This morning she woke up at 7.00 and since this moment she felt light weakness on her right arm, right leg and problems with her speech. No headache different from other days. Since this morning symptoms are have been worsening up to present situation…"
I shall turn in a moment to the Ds' evidence. Before that I will set out the context of how C1's case is put. It is this:
(i) The Court should accept on the balance of probabilities C1's evidence as to what happened at 05.50 hours and that her relevant symptoms began after she woke up and not upon waking up.
(ii) Members of the dedicated stroke team ought to have elicited this history on detailed questioning of C1. She should have been told why it was important to ascertain the last time she was free of neurological symptoms. C1 accepts that the A & E team (Triage Nurses/SHO) would not have needed to go into so much detail when taking a history.
(iii) The criticism of the fact that C1 did not mention the 05.50 incident at any stage to the doctors in the hospital is misplaced because C1 would not have appreciated the importance of being symptom free at this stage. (It was in fact only upon questioning by the solicitor for the purpose of taking her witness statement that this matter came to light). It is further said that if C1 was to have invented the 05.50 incident then it would have been more likely she would have invented a later time of, say, 6.30am, thereby improving the prospects of success for her case by identifying a later time for the onset of symptoms.
(iv) It is said that the gist of the entries at Darent Valley Hospital and KCH is indicative of sudden onset of symptoms after waking up and not upon waking up.
(v) Had she woken up with symptoms of any significance she would have awakened her husband who was sleeping with her.
A preliminary matter needs to be determined based on the Defendants' evidence. That is in relation to the asterisked word in the above extract from Nurse Bates' entry at 8:20 hours. This had been interpreted as "weakness" until the outset of the trial when Mr Samuel suggested it may be "heaviness". At first Nurse Bates insisted it was weakness, partly because of reading her own writing and partly because she said that the word heaviness was not terminology she would use. It was pointed out that (i) she would be recording a word the patient used; (ii) the care continuum note at 08:10 records "heavy on limbs"; (iii) there appears to be an "i" in the word because of the dot on the line above. Further similarities in other letters of Nurse Bates' handwriting were pointed out to her and she accepted that quite possibly it did say "heaviness". I find on the balance of probabilities that, because of the reasons relied upon, the probability is that the word is "heaviness". That said, the expert evidence was that in terms of whether there was a focal neurological deficit, any distinction between heaviness and weakness was not material.
Nurse Bates initially denied that her history taking could have been better, though she later accepted that her note taking should have reflected the fact that she elicited information which was not out of the ordinary (which she did not note) and only noted information which was out of the ordinary[1]. As regards C1's evidence that she got up at 05:50, she said that she would have asked the question whether C1 got up in the night and the response was no. Had C1 told her that she got up in the night and felt okay, then she would have recorded this. Similarly, on or after awakening, she would have probed. She would have asked to whom C1 was speaking when she noted slurred speech, but, even if C1 had not spoken to anybody until some time after she got up then the onset of slurred speech would have been unknown. She said she could only record what she was being told. C1 was not, not co-operating. Nurse Bates did not tell C1 why she needed an accurate time of onset.
I appreciate that Nurse Bates said she recorded only that which was abnormal. On the balance of probabilities I do not accept that she specifically asked C1 whether she had got up in the night. The first time this became apparent was in cross-examination. I consider that she knows that she should have asked that question and in her own mind believes she did do. However she is mistaken in my judgment.
What about the history on/after C1 awakened? Again the note taking of Nurse Bates is unfortunately below standard. She says that she would have asked to whom C1 was speaking when she noticed slurred speech but there is no recording of this. The reality must be on the balance of probabilities that this was some minutes after waking when she spoke to her father-in-law. Of course Nurse Bates is right that such a history does not tell us whether, had she spoken to somebody earlier, her speech would have been slurred. Nevertheless on the question of fact I find that on the balance of probabilities Nurse Bates did not elicit the history in this detail. Given that C1 was co-operating I am forced to the conclusion that Nurse Bates did not "unpick" the history. It is likely that C1 "telescoped" the history to some extent by saying that she woke up with right-sided heaviness and slurred speech but, as Nurse Bates accepted, time of onset was very important and such a statement needed careful analysis. There is no evidence of this in the notes and, as I have said before, I believe that Nurse Bates has persuaded herself that she did do it. In my judgment she did not.
As to some of the other notes:
(i) The ambulance notes do not purport to take a detailed history. They say that the patient woke at 7am. After that there is a full stop then "® sided weakness. ® sided facial droop. ?TIA etc."
Mr Booth says one would expect a degree of precision and the notes suggest she woke with ® sided weakness. C1 says the notes are consistent with her case that she awoke at 7am and then developed ® sided weakness. In my judgment these notes are consistent with either account and do not assist on this issue.
(ii) The Triage nurse notes describe the patient as having awakened feeling unwell and wobberley (sic). That is some, but limited, confirmation of Ds' case.
(iii) Dr Ramphele under "HPC" recorded "Woke up this morning with slurred speech and ® sided weakness." He essentially accepted that he did not ascertain (in any detail) what happened in the ½ hour before the ambulance came. He said he thought that C1 had told him she awoke with right-sided weakness, but accepted that if it is assumed that C1 got up and dressed, picked up a book and went downstairs then it looked in hindsight that he failed to elicit this. [On agreed evidence, he is not to be criticised for this, given that he was an SHO in A & E]. Neither party submitted that his note assists me in deciding this issue. I agree.
I have set out above the notes from Darent Valley Hospital and KCH. They do not elicit the incident at 05:50, nor any detail of what happened when C1 awoke at or around 7am. The authors of those notes have not given evidence. Dr Allder said that anybody taking a history in circumstances similar to C1's would want to know what the person was like when they went to bed and during the night, when they woke up and in the couple of minutes following. He was asked in cross-examination about the KCH history and he said it was a reasonable history. It was pointed out that there was no mention of a 05:50 incident. His explanation was that they were going to get tests and they did not think they would find anything on the history. He said he would have expected KCH to ask the question as to whether C1 got up in the night, and to have noted the answer. He did interpret the KCH note as the stroke starting at 7am. He said that is what they thought and by that point there was no detail because the extent of the deterioration was driving the decision making. He interpreted the KCH note: "This morning she woke up at 7:00 and since this moment she felt light weakness on her right arm, right leg and problems with her speech" – as not being a stroke in the middle of the night, but accepted that on that history one could not determine the time of onset.
In Dr Allder's report at 11 March 2015, he referred to the history at 05:50 and said "This information was obtained by Mrs Owers Solicitor so it is difficult to understand why this could not have been discerned by the medical staff questioning her." However he accepted that when he had produced his draft liability report in 2011 he did not elicit the 05:50 history, and therefore conceded that what he said in his 2015 report was unfair criticism (adding that 05:50 was not a big thing and that the onset on the stairs was more likely to be the onset – see later).
In relation to the 05:50 incident:
(i) I have already found that Nurse Bates did not ask whether C1 awoke during the night. What if she had so asked? In other words is the witness statement of C1 reliable on this point?
(ii) On the balance of probabilities I do not find that C1 is accurate about the 05:50 incident.
(iii) The Defendants have not had the chance to cross-examine C1 and I must take that into account when weighing her Civil Evidence Act statement in the evidential balance.
(iv) It is not clear precisely when that evidence first emerged but, so far as the Court is aware, the first record is in C1's statement, dated 9 May 2014.
(v) There is unfortunately no corroboration whatsoever of the 05:50 incident.
(vi) I should emphasise that this does not amount by any means to a finding that C1 has tried deliberately to mislead the Court. Of course I appreciate that what happened on this day was much more likely to remain in her memory than most other days since the event was so highly significant and tragic. Nevertheless, there is the real potential for error especially in/after very distressing circumstances.
(vii) I therefore find on the balance of probabilities that the 05:50 incident did not occur.
That leaves the question as to what happened on the balance of probabilities when C awakened. This is a difficult issue given (a) C1 cannot be cross-examined, (b) the authors of the notes at Darent Valley and KCH have not been cross-examined (c) I am not persuaded for the reasons I have already given that Nurse Bates "unpicked" C's condensed history of waking up with right sided heaviness and slurred speech. [I shall deal later with C2's evidence as to Nurse Bates' examination]. I accept Mr Owers' evidence that Jake came into the bedroom and woke him up at 7 o'clock and he went downstairs and C1 was sitting on the settee and that he, C2, thought that she was having a stroke. If this is right, it is corroboration of C1's evidence that she had got up without speaking to C2 and got herself downstairs. It is also very likely that she had dressed herself before going downstairs. This is some corroboration of C1's own statement.
I now consider the other notes of 14 March 2010:
(i) The Darent Valley records, if anything, slightly support C1's case generally. However, there is no detail to suggest that anyone elicited more from C1 when, as I shall find, there was more to be elicited.
(ii) The same goes for the note of Dr Bercocal/Dr Haider which is more favourable to Ds. Again there is no detail. One possible explanation is that they considered that if she woke up with these problems, then they were focal neurological deficits at time of waking. (I do not believe that the later typed note of Dr Haider can assist more than the written note).
(iii) In respect of the Darent Valley and KCH notes re onset, it must also be recalled that they were being taken long after the normally accepted window for thrombolysis had passed, even on a 7am onset.
So far I have mentioned only briefly C2's evidence on the onset of symptoms issue. In relation to Nurse Bates, he says that her note of what happened bears no resemblance to his recollection of what happened. His recollection was that Nurse Bates came in, very briefly spoke to him and his wife, and then said "I am going out to find the notes". She just disappeared and they did not see her again until she came back much later with Mr Gedge. He does not recall her examining C1 or asking her about symptoms or when they started. Despite this evidence I find that Nurse Bates did take the history and examine as recorded in her notes. She started this at about 8am and finished at about 8:20 when she wrote up the note. Other things were going on in this time, such as neurological observations and blood being taken. Nevertheless, I do not accept that Nurse Bates transcribed notes from other sources and/or fabricated an examination which did not take place. One possibility which she mentioned, and which may well have been the case, is that C2 was not there when she first saw C1. In any event, my general findings as to C2 are that he is an honest witness but not accurate in certain regards. This is not a criticism of him. As I said about C1, in these circumstances there is always the potential for error because of the distress. For example, C2 accepted that paragraph 9 of his witness statement was incorrect when he said "It is certainly not my recollection that Dr Ramphele saw Karen at that time. I thought he saw her much later." He also said that C1 did not suffer with migraine whereas her own statement (paragraph 3) says she gets occasional migraines, usually about 3 or 4 times a year, if that. She had migraine tablets and if she felt it coming on she took a tablet which usually nipped it in the bud. She had a warning of flashing lights in the corner of her vision and a stabbing pain in her right temple.
Cs originally cast doubt on Nurse Bates' note because she refers to C1 having had a head injury 4 weeks before and notes "Investigated in Oxford hospital". The ambulance record also says "Investigated at John Radcliffe Hospital". The suggestion was that Nurse Bates may have merely transcribed this from the ambulance record, and not taken this history. This is because the evidence of C2 was that his wife was taken to Cheltenham and not Oxford hospital and she would not have made this error. In fact the error was seemingly that of C2 himself since records show that C1 did go to the John Radcliffe hospital in February 2010 and went to Cheltenham in 2008.
Considering the evidence as a whole, I accept as probably correct paragraph 5 of C1's statement subject to two qualifications. The first is this: I accept that she awoke with right sided heaviness as Nurse Bates recorded. She would not have been aware of the slurred speech until some minutes later when she spoke to her father-in-law. This also fits reasonably well with the neurologists' KCH note that she awoke feeling "light weakness on her right arm, right leg and problems with her speech." (There again the problem with her speech has been "telescoped"). Therefore I find that she awoke with some right sided heaviness but it was mild or "light"[2].
To this must be added an important point which arose during Professor Wills' evidence. He said that the history of being a little bit drunk would have required clarification as to whether C1 meant that she was unsteady on her feet. If she had felt unsteady on her feet then that would have been ataxia, a neurological symptom noticed within moments of waking up. Again there was no opportunity to cross-examine C1 on this. However the balance of probabilities shifting in favour of ataxia as the main evidential indicator is to be found in paragraph 7 of the original Particulars of Claim.[3] This states:-
"When she got up she felt a little bit drunk. As she was dressing she felt that she could not coordinate her arms and felt unbalanced. She felt weird but after she had finished dressing she went downstairs…"
As it is necessary, the Particulars of Claim is signed with a statement of truth by C1's solicitor. Therefore I can assume that these were C1's instructions. On the basis of that statement, Professor Wills said, and I accept, that this indicates ataxia which probably (though not necessarily) occurred in the night.
In short my findings therefore are:-
(i) C1 is not accurate about the 05:50 incident
(ii) Otherwise C1's history in paragraph 5 of her statement is broadly correct save on the balance of probabilities:-
(a) she awoke with right sided heaviness/weakness, there being no material difference between the two;
(b) she had ataxia immediately she got out of bed. I accept Professor Wills' evidence that this means that the neurological deficit so manifested probably existed prior to waking.
Consequences of the Findings as to the Onset of Symptoms
It is common ground that the result of my findings is that they put an end to the allegation that C1 should have been thrombolysed. I therefore do not need to deal with the disputed evidence as to whether the head injury in February 2010 contra-indicated thrombolysis.[4] The case then proceeds as to when C1 should have been prescribed aspirin and the causative effect of the failure to prescribe her aspirin.
Events at Medway Subsequent to Nurse Bates' Examination
Dr Ramphele examined at about 08:36am. By this time C1 had already been seen by the ambulance crew, triage, the author of the care continuum and Nurse Bates. An ECG had also been done. In addition there was a neurological chart entry at 08:10 which showed blood pressure 122/82, mild weakness in right arm and leg and a pain score of 2. Dr Ramphele accepted he would have seen all the records except the care continuum which may not have been available to him.
I have already set out part of Dr Ramphele's note. The note continues, so far as material:
"CNS: GCS 15 PEARL
Sensation: intact upper and lower limbs.
?slurred speech
No facial weakness
Tone: normal, upper and lower
Motor: power: 5/5
Reflexes: normal
?? Psycho-somatic/? TIA
P – bloods v CT: NAD
- ECG: NAD
- D/W Dr Tolat
- Advised: - get Rapid Response assessment
- Stroke team to review again
D/W: Medical reg: Advi (H)"[5]
It was clear to Dr Ramphele that some parts of his note were added after the 08:36 examination. On balance those parts which were added were ?TIA, CT:NAD and everything after the words "advised: - get Rapid Response assessment…" He said at the end of his examination at 08:36 he would have put a presumptive diagnosis and at that stage it was ? Psycho-somatic.
Dr Ramphele said that he was surprised to read that Nurse Bates had noted "neurology non suggestive of CVA". He had had a chat with her. He did not remember it precisely but he said that she had said she had assessed for stroke and could not find objective evidence for it. He did not question her but went and assessed C1 himself. He said he would have been influenced to some extent by the fact that Nurse Bates had more experience of stroke because she was dealing with strokes at that time. That would have set the bar for diagnosis slightly higher. However he would not have carried out his examination in a less diligent way. Even if it was not a stroke there were neurological problems and therefore needed a full examination.
He had decided at the end of his examination to discuss with Dr Tolat and he told her face to face that he was not sure what was happening. There is no note of his discussion with Dr Tolat or subsequent discussions which he said he had with her. Nevertheless his evidence was that he did speak to her. He asked her to see C1 but she did not see her. Essentially what he had communicated to Dr Tolat was that he had a patient referred with a possible stroke. The stroke team was saying she was not having a stroke and he was not sure what was happening.
At 09:40 the care continuum document says
"obs recorded. Pt now cannot feel arm – is upset"
(The neurological chart at 09:40 shows mild weakness in right arm and leg and pain score of 2).
C1's statement (paragraph 11) says:
"The nurse came to take my observations a second time and I see from the records that this is timed at 09.40hrs. The only reason this was done is because Tim went out to find someone because I had deteriorated. From arriving at the hospital I could feel myself getting gradually worse and when the nurse was there I told the nurse I couldn't feel my right arm and I also knew my speech was getting worse. I was very upset and crying. Tim kept asking them shouldn't they be doing a scan because all they seemed to be discussing was getting me home. After I got worse Tim made a big fuss because they still wanted to send me home and it was after this that they sent me for a CT Scan. I now know from the notes that this was not until about 11am, about 1 hour and 20 minutes after I had told the nurse I could no longer feel my right arm and 3 hours after I arrived at the hospital."
There are echoes of this paragraph in paragraph 10 of C2's statement.
Dr Ramphele said that the nurse told him that C1 had deteriorated. He did not re-examine and accepted that this was a significant failure in his care. At this point he said he would also have tested for gait and co-ordination and diagnosed a stroke. Had he done this, he would have got in touch with the stroke team again because they were primarily responsible. He would have said to them that her signs were more consistent with a stroke.
The next entry in the notes is timed at 11am and it was written by Mr Gedge. As to timing, Mr Gedge said he may have started the examination a little before, perhaps at 10:50, but it was possible that he started at 11am. He said the stroke team were bleeped to re-review as C1 was deteriorating. He said both he and Nurse Bates would be bleeped. C1 was to be reassessed. Mr Gedge's entry reads:
"Stroke team
Asked to R/V pt again by A & E as pt presenting with worsening weakness. Husband present who reports symptoms have worsened.
Pt c/o headache and photophobia.
Vision – NAD
Face – some R facial droop present but inconsistent and appears athetoid.
Speech – no aphasia
Dysarthria present"
For the upper limbs he recorded normal tone 0/5 power and "tingling" sensation on the right and normal tone power and sensation on the left. For the lower limbs the record is the same as for the upper limbs. The note then continues:
"Symptoms appear to have changed although pt inconsistent during multiple assessment.
No risk factors present.
P/ CT head"
Two issues arise with which I shall deal with briefly:
(i) C2 says that Mr Gedge's examination was "perfunctory" and that the detailed examination in the note "simply did not happen". For reasons similar to my rejection of the like suggestion in respect of Nurse Bates at 08:20, I do not accept C2's recollection as reliable on this.
(ii) C2 says that Mr Gedge arrived with Nurse Bates in the cubicle and they both left the cubicle together. This was not accepted by Mr Gedge or Nurse Bates. Mr Gedge said that if they were bleeped, as the two members of the on call stroke team, they would go to the A & E department together so that the other would be there in case a discussion was needed. Mr Gedge's note records in the margin "C Gedge", then underneath "C Hannon". Mr Gedge said he documented Nurse Bates' presence as meaning that she came up to A & E with him, not that she was in the cubicle. My finding on this is that it is unlikely she was there all the time, but also unlikely that C2 is totally mistaken. On balance I find that Nurse Bates was in the cubicle for some, but not necessarily all, of the duration of this examination.
Mr Gedge decided at the end of his examination to order a CT scan. At that moment his provisional diagnosis was a stroke. That was his clinical impression. It took about two minutes to get C1 to the CT scanner and she arrived there at 11:15. The CT scan had been done by 11:25. It was negative. Mr Gedge said that he was aware that this did not exclude a stroke diagnosis. What he then noted at 11:30am was:
"CT head – normal
NB* in CT patient was able to lift bottom up to get onto sliding board and sustain in crook position despite apparent "dense weakness".
Impression: - unlikely stroke
? functional overlay/conversion disorder
?? hemiplegic migraine
P – Pass back to A & E – 11:36."
In paragraphs 21 – 22 of his witness statement Mr Gedge said this:
"21. It was at this point that I requested an urgent CT scan, based on her current clinical condition, as I was concerned with the sudden deterioration in her symptoms, her apparent lack of stroke risk factors and also in light of her reported recent head injury. I liaised with the CT imaging department who agreed to do the scan urgently. Along with a member of the A & E team I assisted to take her round to the CT scanning department.
22. On assisting her to transfer from the A & E trolley to the CT scanning table I observed that she was able to lift her right leg up into the crook position and then lift her bottom up to "bridge" and held this position whilst a sliding board was placed underneath her to transfer her safely. I again found this very odd seeing as a few minutes earlier she was completely unable to lift her right leg up during an assessment.
…….
24. From my own objective assessment and review of previous assessments by Caroline and Dr Ramphele I did not feel that the presentation was consistent with that of a stroke and actually her presentation was more that of a possible stroke mimic. I did question whether this was a case of functional overlay or conversion disorder or whether she was suffering with a hemiplegic migraine. However I did not make any particular diagnosis as our protocol is that if we believe the patient symptoms are not suggestive of stroke we pass the patient back to A & E to review and they make their own formal diagnosis."
Mr Gedge said that that he had never seen stuttering/fluctuating symptoms which are consistent with a BAO stroke. His mindset was that a patient can have dysarthria with lots of other conditions. Therefore he thought it was more likely to be a stroke mimic. The facial droop presentation was inconsistent, he said. His note of "athetoid" meant that she could smile and raise her eyebrows. He did not expect that. C1 was complaining of headache and photophobia. A person does not always have a headache with a stroke and could have had migraine. He did not write history of migraine but he had seen a history from the ambulance, Nurse Bates' and Dr Ramphele's notes.
Shortly after 11:36 C1 was referred back to A & E. The only notes relevant to this are the last few lines, already dealt with above, from Dr Ramphele's record. He said he did not make proper notes at this time and it looks as though he was trying to squeeze everything on the same page. He said he did not see C1 at this stage save at a distance in the department and he only examined her once. He said he was trying to get her admitted and he spoke to the medical registrar. There is no note that he was trying to get C1 admitted but he was insistent that he did. He said if she was not admitted by the stroke team then she could only be admitted under the medical team. Dr Tolat advised to get a Rapid Response assessment. Dr Ramphele did not know why she said that rather than coming to see C1. He explained to Dr Tolat that it seemed like a stroke. However Dr Tolat, the Registrar, said send her home even though she had not seen C1. Getting the Rapid Response assessment was to ensure that C1 was fit to discharge. The entry "stroke team to review again" was a note which was added afterwards.
Dr Ramphele was an honest witness. I accept his evidence as probably correct in relation to what happened after 11:36, so far as he was concerned. [I should add that Dr Tolat was not a witness and any implied criticism of her is based on the evidence put before the Court. It would be wholly wrong for anybody to consider anything in this judgment to be a definitive criticism of Dr Tolat when she has not had the opportunity to be heard].
I also accept as a probability the recollection of C1 and C2 that Dr Ramphele said that they were to go and find a wheelchair and take C1 home so she could sleep it off. C1 had to be helped into the wheelchair by her husband and she recalls deteriorating in the 5 or 10 minutes from getting into the wheelchair to getting into the car.
That brings to an end the history up to the moment of discharge at Medway Hospital.
The Time When Aspirin Should Have Been Prescribed
Ds accept that aspirin should have been prescribed at some point between about 10:40am and 11am. This is on the basis that after the deterioration in C1's condition at 09:40am, she should have been seen by a doctor. She was not. After a re-examination of some 10 minutes or so, the diagnosis of probable stroke should have been made, an urgent CT scan undertaken within about 30 minutes and the aspirin prescribed in about a further 10 minutes. Allowing for a few minutes to get a doctor and some variability, the window was therefore about 10:30am – 11am. Precise timings at this stage do not matter. This is because there was no further significant deterioration after 09:40 and before aspirin should have been prescribed. Indeed C1's stroke was still "fluctuating" at the time she was in fact having the CT scan, when Mr Gedge saw her able to lift her bottom up to get onto the sliding board and sustain herself in the crook position. This, on the evidence, was between about 11:15am and 11:25am.
C1's case is that aspirin should have been prescribed earlier. It is submitted that it was substandard practice in 2010 that C1 was not diagnosed as having a stroke by about 08:20am, which was approximately the time Nurse Bates finished her examination. The time window for this submission is very tight. This is because of the significant deterioration in C1's condition at 09:40am. Therefore, working back from 09:40am, C1 would have had to have been seen by a doctor capable of diagnosing a stroke by about 08:30[6]am so as to allow 10 minutes for the examination, 20 – 30 minutes for the urgent CT scan, 10 minutes to prescribe aspirin and 30 minutes for the aspirin to potentially take effect. It takes about 30 minutes for aspirin to work.
There is no doubt that there were clear failings in the Medway Stroke Pathway. Most particularly, it was wholly unclear whose responsibility it was to make a diagnosis and to whom a patient should be referred in a difficult case where a stroke could not be excluded. The pathway at the relevant time said:
"4.1 A patient suitable for thrombolysis should be referred for urgent CT scanning and the on-call/consultant bleeped"
Albeit under the heading "Patient's (sic) Presenting as a TIA", the advice for a patient not a stroke was:
"3.2 If the patient is not a stroke and the suitability for admission or the cause of the patient's condition is unclear or uncertain then the patient is to be handed back to the ED[7] doctor for further assessment and planning of care."
From this it is apparent, as Dr Baines said, that there was a lot of confusion as to the role of the stroke team and it was not clear as to what to do with ambiguous patients. In similar vein Professor Wills was critical of the pathway in difficult cases. There was nobody to take ownership of a difficult case.
Nurse Bates said she was not there to diagnose but to triage to a pathway. Mr Gedge's evidence was similar on this point. There was, on the evidence[8] no criticism of Nurse Bates or Mr Gedge (as stroke nurse and stroke physiotherapist) if they acted in a screening role. The real criticism is that they should not diagnose in difficult cases (which they say they did not) and of the Medway Stroke Pathway provision for what should happen in a difficult case. Doctor Mamun[9] expressly said that he did not expect Nurse Bates or Mr Gedge to diagnose in difficult cases.
What happened in Medway in a difficult case in 2010? Unsurprisingly, given the content of the Medway Stroke Pathway at the time, Nurse Bates said that if she thought a patient was suffering from a clear stroke or there was an unclear diagnosis, she would call the stroke physician if the patient was in time for thrombolysis. This she took to be 3 hours from time of onset of relevant symptoms. If she did not think somebody was having a stroke or was uncertain, she passed the patient back to Accident and Emergency to investigate further. She would return the patient to the SHO who had access to more senior doctors. Mr Gedge's evidence was similar. If a patient was outside the 3 hour window from clear onset of symptoms he would not contact the stroke consultant. If there was a probable stroke and a patient was within the 3 hours he would refer to the stroke physician. If he thought there was probably a stroke and more than 3 hours had passed from the clear onset of symptoms, he would liaise with A & E for aspirin prescription and contact the acute stroke unit for a bed and contact the on-call medical team. If he thought there was a real possibility of a stroke, and the patient was within 3 hours of clear onset of symptoms, he would hand the patient back to A & E. If the pathway at the time had said that in cases of doubt, refer to the stroke physician, he would have referred C1 to Doctor Mamun. That is what the Medway Stroke Pathway says now. However, it was practice and training to hand back to A & E in difficult cases in 2010.
Taking on board these deficiencies in the 2010 Medway Stroke Pathway, Ds concede, for the reasons I have given, the failure to make a stroke diagnosis following the 09:40 deterioration. The question is as to what should have happened in a competent stroke unit in 2010 at about 08:20am when Nurse Bates finished her examination.
As a preliminary matter, if Nurse Bates had telephoned Doctor Mamun at home at 08:20 and he had come in, as he said he could, within 30 minutes of a call, then even that would have been too late on the timings to have made a difference. He would not have arrived at the hospital until about 08:50am. Mr Samuel initially said that Dr Mamun could have ordered a CT scan over the telephone, but accepted that there was no evidence to support that he should or would have done so. Therefore C1's case has to depend, as said above, on her needing to be seen and diagnosed by a consultant physician or neurologist or registrar with special knowledge of strokes, by 08:30 – 08:40am at the latest.
C1 relies first on Dr Baines. His opinion was that C1 presented with atypical features but from the A & E perspective there were sufficient features that a stroke should have been suspected. He said that in 2010 there were no stroke teams without the support of a physician or neurologist in the hospital, or out of hours from a medical registrar. He said that a senior medical person from the stroke team could have attended after Nurse Bates' examination and examined C1 and ordered an urgent CT scan. The process would have been to contact the senior medical support. There would not have been a confirmed diagnosis at this point, but a more urgent CT scan and then prescription of aspirin. He said that at 08:20am a stroke should not have been ruled out but the matter escalated to a neurologist or stroke physician; he had earlier said that if Nurse Bates had not been sure and C1 had been admitted to the acute stroke unit that would be satisfactory.
Mr Baines considered that in 2010 stroke teams had the unilateral support of the stroke physician or neurologist with immediate access to physicians for diagnostic support (or out of hours the medical registrar).
Doctor Allder said that in 2010 the diagnostic phase always involved a senior doctor and he did not think a nurse or physiotherapist could be trained to do this diagnosis. It needed a doctor au fait with strokes, at least a registrar who could telephone the consultant if need be. He said that by that date it was clear that there needed to be a physician on-call and regular liaison with A & E, to ensure that people did not fall through the gaps in the system. If there was any difficult case and any room for doubt then a stroke doctor should be involved.
Professor Wills did not criticise Nurse Bates handing back to a junior doctor, but said that if the system had worked Doctor Ramphele would have engaged a registrar in A & E or general medicine. He did not accept that such a registrar would have diagnosed a stroke. He said he thought that the medical registrar would have thought it was a migraine. His view was that the average/poor registrar would have sent C1 home. A good registrar may have realised the potential significance of the previous head injury and admitted C1 to a medical bed. On balance at this stage the diagnosis would have been migraine. This takes into account that C1 did not have typical dysarthria. Nurse Bates' evidence was that C1, at the time of her examination, had a very unusual speech pattern. Some words at the end did appear slurred but this was not consistent.
The totality of the evidence leads to a confusing picture. Apart from the difference in evidence, there are the following factors for me to take into account:
(i) A number of features can be consistent with a stroke but have differential diagnosis such as migraine or transient ischaemic attack[10]. As Doctor Campbell-Hewson said, there was no lateralised hemiplegia. There was a history of right-sided weakness not seen by Doctor Ramphele. That account of improving from an equivocal diagnosis is more likely to be a resolving TIA. Similarly Professor Wills said that on balance migraine was the probable diagnosis at the pre 09:40 deterioration time.
(ii) Despite Dr Baines' oral evidence, he had said in the joint statement (paragraph 7):
"…If Nurse Hannon or Mr Gedge did not feel that a patient met the typical criteria for them to make an independent diagnosis of stroke, the patient could be referred back to the emergency department. However under such circumstances it should be clarified that a diagnosis of stroke had not been excluded."
(iii) Commenting on Dr Ramphele's examination Dr Baines said that after his examination he would have expected a 10 minute conversation with Dr Tolat and then a CT scan and referral to the general medical team. He said that the scan at that stage would have been requested as non urgent but at 09:40 would trigger urgency[11].
(iv) On the other hand Professor Wills had to explain as an "error" this statement he made in his 3 March 2015 report:
"I am surprised that neither Ms Bates nor Mr Gedge sought advice from a senior medical member of the stroke team (either consultant/physician or consultant neurologist) in these circumstances."
He said that this was his view at 2015 rather than in 2010. He added that a registrar in an ideal world would contact the consultant physician who would probably have admitted C1 at this early stage and see how things went.
(v) Doctor Mamun accepted that at 08:30am a stroke was at least a realistic possibility. He said that it was not sufficient then for CC to be examined just by an SHO. She should have been seen by the A & E registrar or the medical registrar or she could have telephoned him[12]. He added that there were several consultant physicians in the hospital.
My findings on the balance of probabilities are as follows:
(i) There were consultant physicians on call in the hospital and Doctor Mamun, a stroke physician, was on call at home and could have been in the hospital within 30 minutes of a call.
(ii) The stroke pathway and the training of Nurse Bates should have been such that she did not refer back to an SHO on the findings on her examination.
(iii) The least that the pathway in 2010 should have required was that C1 be seen urgently after 08:20 by a doctor of the level of A & E registrar or medical registrar.
(iv) An A & E or medical registrar would probably not at that stage have diagnosed a stroke. Differential diagnoses of resolving TIA or migraine would have been entirely possible.
(v) However, because stroke could not have been excluded, a CT scan would probably have been ordered by an A & E/medical registrar but on a non urgent basis.
(vi) The alternative and perfectly feasible system at the time would have been for Nurse Bates to have been required by the pathway to telephone Doctor Mamun. Even if he had come in by about 08:50 and examined her, then the relevant time window had passed for the prescription of aspirin after a CT scan and for the aspirin to take effect prior to the 09:40 deterioration in C1's condition[13].
C1 relied in submissions on this statement from Doctor Allder's March 2015 report, page 34:
"At the time of the assessment by Nurse Hannon, with a clinical syndromic diagnosis of acute stroke, the first line diagnostic would have been a CT scan to exclude the possibility of a haemorrhagic stroke and enable the consideration of treatment through thrombolysis or antiplatelet therapy. Depending on the conclusion reached by the clinical team, either thrombolysis or antiplatelet therapy would have been offered at this point."
For reasons I have given above I do not accept that a diagnosis of acute stroke would or should have been made at the time of assessment by Nurse Bates or shortly afterwards. Dr Allder's statement, which does not go into the detail of the various possible findings, does not influence my overall decision.
In summary the remainder of this judgment will proceed on the basis that Ds were not negligent in failing to prescribe aspirin prior to the 09:40 deterioration, but were negligent shortly thereafter. I do not need to make findings as to precisely when thereafter since the admission of 10:40am – 11am was well within the next relevant therapeutic window on any view of the case.
I therefore turn to the issue of causation.
The Consultant Neurologists – Overview
Dr Allder is a Consultant Neurologist at Hampshire Hospitals NHS Foundation Trust. From January 2004 to March 2015 he was a consultant neurologist at Plymouth Hospitals NHS Trust. From 2008 he was the clinical director for the whole of the Plymouth area, including the outlying hospitals. He had had a particular interest in strokes since 1997 and had been involved in substantial stroke research. He opened the stroke unit in Plymouth in 2005.
Professor Wills has been a Consultant Neurologist at Nottingham University Hospitals and Honorary Consultant Neurologist at Queen Square Hospital since December 1998. He has published a number of neurological articles, though has not been involved in stroke research, apart from participating in a stroke trial. Since 2008 he has spent every Tuesday on the acute stroke unit. He has a TIA clinic and is on the on call rota for strokes – this included weekends until last year. In his hospital he is the neurologist responsible for stroke.
Dr Allder was asked how many basilar artery strokes he had seen since these are very rare. At first he guessed 200. He then estimated that he had seen more than 10,000 patients and that 1% of them would approximately be basilar artery strokes, thereby concluding with a figure of about 100. Professor Wills said that he had seen very few basilar artery strokes. When one comes in to his hospital the doctors discuss it. He said he worked in a very busy teaching hospital and he found it extraordinary if Dr Allder had actually seen 100 basilar artery strokes. He wondered whether Dr Allder had estimated how many posterior circulatory strokes, rather than basilar artery strokes, he had seen – given that basilar artery strokes are only one category of posterior circulatory strokes. He said that he saw some 200 – 300 strokes a year. Statistics would suggest that he would see some 2 – 3 basilar artery strokes but said that he did not see that many, probably because they die in A & E. He estimated he had diagnosed about 10 to 20 basilar artery strokes in the acute phase over the last 10 years. He said that his experience was also gained from talking to other stroke doctors when a basilar artery stroke came in. Some of the basilar artery strokes have had mild symptoms and he and his colleagues used heparin/thrombolysis not aspirin.
As is not unusual in adversarial litigation, each party sought to attack the reliability of the other party's expert, not only on the basis of the accuracy and coherence of their argument, but also in ways which undermined their professionalism. I shall take very briefly a few examples.
C1 said that Professor Wills:
Produced literature during the trial and said he had arrived late at a conclusion and wanted to express his doubts as to the efficacy of thrombolysis yet during cross-examination accepted that treatment within 3 hours would have helped C1. This, Mr Samuel described as "a complete volte face".
Failed to set out his case on why aspirin would not have made a difference in his main report, and in the joint statement evaded the question relating to aspirin by digressing to heparin and thrombolysis.
Failed to consider the evidence impartially by failing to take into account the evidence of C1 and C2 that Nurse Bates did not carry out a thorough examination.[14]
Ds said that Dr Allder:
Was very vague in his report so that for example he said (page 41) "Aspirin would have afforded the opportunity to avoid further deterioration" and in his conclusion (report page 42)
Was inconsistent for example in his report at page 34 he said that C1 had a moderate severe clinical syndrome when he conceded in evidence that was not the case.
Put an absurdly positive spin on the external reports of the poor stroke service in Plymouth in 2008 and 2011 over which he had presided since 2005.
I have to say that, listening carefully to the evidence over many days and taking on board the force with which the rival submissions were made, I give little if any weight to these criticisms of the doctors. All parties agreed that this was an extremely difficult case. Both experts made some errors, both made concessions in evidence from their reports and it will be clear from this judgment that on particular matters there are occasions when I have rejected the accuracy of both experts. Nevertheless, in this complex case, both were professional and assisted as much as possible. I do not find that either was partisan. My assessment of the evidence is based on my independent and objective analysis, this not being tainted by any suggestion on either side of lack of professionalism by the experts.[15]
C1 submitted that I should prefer Dr Allder's evidence because of his more extensive stroke experience. Ds submitted that Professor Wills was the expert who produced the most up to date and relevant literature on the respective effects of antithrombotics and thrombolysis in BAO and that Dr Allder did not produce or rely upon Schonewille 2009 before Professor Wills produced it, it then becoming a main plank in Dr Allder's causation argument. I did not find any of these points particularly helpful in coming to my conclusions. That is not a criticism of the fact that they were made by Counsel. Nevertheless in my role as judge, my evaluation of the expert evidence is based on what is set out below in detail rather than these matters. The personal experience of both doctors does not help me in arriving at a conclusion on the difficult issue of causation. For that the central evidence is general aetiological exposition, the facts surrounding C1's case, the medical literature and a critical analysis of the reasoning of the experts.
Aspirin Prescription
The NICE Guidance suggests that all people presenting with an acute stroke and a normal CT scan should be given aspirin "as soon as possible but certainly within 24 hours" (paragraph 1.4.2.1).
At paragraph 4.2 The Guidance says "Aspirin administered within 48 hours of acute ischaemic stroke improves outcome compared with no treatment or early anticoagulation".
I shall examine later the detailed medical literature. It is important to do so. It is also important to realise that it does not answer the precise questions which fall to me to decide.
A simple diagrammatic representation of the basilar artery and surrounding arteries was produced by Cs. It was agreed to be helpful and I attach it to this judgment as Appendix B. On the diagram can be seen two vertebral arteries which lead into the basilar artery. We know that C1 had suffered a vertebral artery dissection (VAD), a tear in the lining of one of the vertebral arteries. This can cause emboli to form.
The NIH Stroke Scale (NIHSS) is an assessment tool that provides a quantative measure of stroke related neurological deficit. The Modified Rankin Scale[16] (mRS) is a scale for measuring the degree of disability/dependence of stroke patients. The scale runs from 0 – 6. mRS 1 is no significant disability, mRS 2 slight disability, mRS 3 moderate disability, mRS 4 moderately severe disability, mRS 5 severe disability and mRS 6 dead.
Aspirin is an antiplatelet medicine. Heparin is an anticoagulant.
C1's NIHSS score prior to 09:40am was in the region of 2 – 4. By 11am it was 11 – 12. Her case on causation as put forward by Dr Allder is, in broad terms, that if she had been prescribed aspirin so as to take effect before 09:40am then she had a 58% chance of mRS 0 – 1. After 09:40am Dr Allder says that her probable outcome was mRS 3.
In the joint statement in answer to question 36 "What is the prognosis for patients who suffer a basilar artery occlusion?" Dr Allder replied:
"SA's opinion is that this is a complicated issue. The first issue is the distinction between total basilar artery occlusion and basilar artery stenosis. The digital subtraction angiogram that Mrs Owers finally underwent at KCH showed a distal basilar artery occlusion with collateral circulation. However, given the fact that Mrs Owers clinical state fluctuated considerably – certainly for 8 hours after her deterioration at 7:00 – and her MRI showed basilar artery stenosis as opposed to occlusion, this suggests that during the period of her assessment at Medway and at Darent Valley, Mrs Owers did not necessarily have total basilar artery occlusion. Therefore, application of the evidence associated with basilar artery occlusion needs to be considered carefully. The second issue is that as diagnostic modalities and treatment of stroke have matured, so the complexity of issues determining prognosis following basilar artery occlusion has emerged. For an individual patient, the prognosis will be determined by the precise position of the occlusion, the critical extent of the occlusion and the presence, or not, of collateral circulation. Therefore, in any given patient, the prognosis can vary from a very mild clinical deficit through to catastrophic brain stem infarction.
Mrs Owers did not present with a devastating clinical brain stem syndrome. Her imaging appears to reveal a varying degree of occlusion and the presence of a certain amount of collateral circulation. Therefore her prognosis cannot be considered inevitably poor, either with or without treatment."
Dr Allder had not mentioned this theory in his report. Nevertheless it was subject to detailed evidence. In any event it is to be noted that Dr Allder's opinion in the joint statement as set out above was guarded. As to the specific question relating to the prescription of aspirin or other anticoagulation or antiplatelet therapy on the long term outcome, Dr Allder replied:
"SA refers to his original report in respect of his view concerning aspirin and antiplatelet therapy:
"Aspirin would have afforded the opportunity to avoid further deterioration. Antiplatelet therapy reduces micro emboli within 30 minutes of oral administration by 33% - 66%, therefore on the balance of probabilities I conclude that timely administration would have made a contribution to avoiding her stroke progression. Without this further deterioration, based on the severity of her clinical state prior to the deterioration, I would predict she would have achieved an independent, not dependent, final clinical outcome.""[17]
I have already found that C1's stroke was a fluctuating stroke while she was at Medway. This means[18] that she had fluctuating symptoms with alternating periods of neurological worsening and improvement.
It was common ground that the way aspirin operates is to stop emboli forming and breaking away from the lining of the artery. Professor Wills explained that the mechanism for natural improvement during a fluctuating stroke is that small parts of the clot blocking the artery break off and the brain recovers to some extent.
Cs' final submissions were that if that is the mechanism and aspirin shuts down the formation and propagation of emboli, there is no mechanism to explain why she would have deteriorated after periods of improvement had aspirin been given. In a fluctuating stroke when no aspirin (or thrombolysis) is given one can understand Professor Wills' explanation as to how the fluctuating symptoms are affected by small clumps of thrombus breaking off from the main clot, thereby allowing blood to flow more freely and thus permitting an improvement in functions. However, if there were no further emboli emanating from the VAD to assist in reforming the thrombos to add to the occlusion there is no rational explanation for the subsequent deterioration. Therefore had aspirin been given at Medway the micro emboli would not have been capable of forming or propagating or sticking to the main clot and so she would not have got naturally worse with time. If there is a complete occlusion then aspirin would make little if any difference but in a partial occlusion, if the mechanism for the propagation of emboli is stopped, the advancement of the thrombus will also stop and there will be no deterioration.
This, I find, was based on a misunderstanding of Professor Wills' evidence. While he accepted that the mechanism by which aspirin would work, if it did, he did not accept that it does in fact stop emboli in the vast majority of cases. He accepted that if aspirin does in fact work then it shuts off the source of emboli and if it does do so, that there is no other way of doing damage. However he said that in reality it has only a minor effect in actually achieving this outcome. He said there was a difference between the theory and the in vitro results of aspirin and the reality of the chances of it actually working in that way in the human body.
Nor did I understand Dr Allder to say that aspirin will always work in practice as it does in theory. Hence the guarded terms of his joint statement answer (set out above) and the fact that he only referred to probabilities. If, as C1 submitted, aspirin did work like that in cases of partial occlusion, then it would stop any deterioration.
Thus I find that if aspirin does work then that is how it works. The question is how likely is it to work in a partially occluded basilar artery stroke? My review of the literature will show that there is little room for any optimism here. Further, if Dr Allder's theory is correct, then one wonders why the specialist team at KCH did not prescribe aspirin. Prior to day 2 the basilar artery was not completely occluded. C1's case is that the literature does not separate between heparin and aspirin in terms of effect. Professor Wills' opinion was that heparin is more effective, particularly in basilar artery stroke. Yet C1 was prescribed heparin constantly at KCH from 00:07 on 15 March 2010 throughout that day[19]. If the effects of heparin and aspirin are equivalent in outcome (though different in mechanism) as is C1's primary case, then what happened at KCH does not assist and in my judgment undermines Dr Allder's theory.
Also, as already mentioned, Dr Allder in his original report relied on the Goertler et al paper only as to aspirin causation. This paper, which was a pharmacological paper, specifically said:
"Whether the effects of an anti thrombolytic therapy can be monitored by TCD (transcranial Doppler) detected micro embolic events and corresponds to the clinical efficacy of a drug therapy cannot be judged on the basis of the cross sectional observation presented here."[20]
Literature and Overall Evaluation of Effects of Aspirin
In order to consider the issue of causation further it is necessary to analyse the medical literature on the subject. Since that literature does not provide crystal clear answers, I have had to hear differing opinions from Dr Allder and Professor Wills as to its effect. I am very aware, as I said during the hearing, that in the medical world there would potentially be teams of doctors pooling views and working together over a period of time to answer the question I have to answer. Then, if they produced a report, it would be peer reviewed to look for errors etc. I have only the bare literature and the two neurologists on which to form my judgment on the balance of probabilities.
The literature is complex and inconclusive. It does not, perhaps cannot, deal clearly with what the prognosis is likely to have been if aspirin had been prescribed at 8:35am (C1's case) or 11am (Ds' case) for C1 as an individual. Such literature as there is has to be considered with caution as:-
(a) many papers do not deal with prognostic outcome in the rare BAO strokes;
(b) the papers which do deal with BAO strokes;
(i) contain strong caveats[21]
(ii) do not distinguish in the results between heparin and/or aspirin when assessing the effects of antithrombotic (AT) therapy;
(c) There are no trials comparing the effects of AT therapy (or just aspirin) on the one hand and a placebo on the other – though Professor Wills said that this undermines confidence in the literature a little, but should not materially affect the position as far as the Court is concerned.
The starting point is that aspirin affords a small absolute benefit (around 1%) in patients with acute ischemic strokes and causes fewer haemorrhages than does heparin. This statement comes from the review paper by Mattle and others (2011)[22]. The footnote in Mattle refers to the International Stroke Trial (IST) paper (1997)[23] for this information. The IST paper does not specifically mention a 1% figure. Further the IST paper deals with acute ischemic strokes overall and not BAO strokes. In this context it does make the following statements:
"Aspirin v Avoid Aspirin
….Among aspirin – allocated patients there were non – significantly fewer deaths within 14 days (9.0% vs 9.4%), corresponding to an absolute reduction of 4 (SD4) per 1000 patients…
Outcome at 6 months…At 6 months, there were fewer deaths among aspirin allocated patients but the absolute decrease of 10 (SD6) per 1000 was not significant…
Sub Group Analyses…Analyses of the effect of aspirin sub-divided by the prognostic score indicated greater benefit among good prognosis patients but the trend was not significant…..
Aspirin
The effects of immediate aspirin use in acute ischaemic stroke on the unadjusted primary outcomes in the IST were not significant…since most patients with acute ischaemic stroke are likely to benefit from long term antiplatelet therapy, the IST and CAST results for the safety (and slight additional benefit) of giving aspirin immediately in acute ischaemic stroke are reassuring…
Clinical Implications
Because the evidence on aspirin is based on 40,000 randomised patients (IST and CAST),[24] it is more reliable than that for heparin. The benefit from the IST and CAST, of about 10 deaths or recurrent strokes avoided per 1,000 patients treated with aspirin in the first few weeks is about the same size as the benefit per year from long term aspirin treatment in stroke survivors…"
The IST paper examined a large number of acute ischaemic stroke patients, but of the cohort only a small percentage received treatment within 3 hours (4%) or 4 – 6 hours (12%)[25], only 5% were aged under 50 and only 12% were posterior circulation strokes (it is unknown what percentage of this 12% were BAO). Because of these factors the IST paper, referred to in Mattle, is no more than a starting point. It tells us little about the effect of aspirin on BAO strokes.
The first paper specific to BAO strokes to consider is that of Schonewille and others[26]. This paper considered 82 patients who had had BAO and had been treated conventionally i.e. had not been thrombolysed, but treated with antiplatelets, anticoagulation or both. The patients had been treated in three academic hospitals with a special interest in stroke in an 11 year period ending in 2002. In common with other papers, to evaluate outcome Schonewille used mRS. The authors stated:
"Most studies …have used a modified Rankin Score of 0-1 or 0-2 to define good outcomes. Because of the poor natural history of Basilar Artery Occlusion we used a modified Rankin Score of 0-3 as a measure of independence and good outcome."
Therefore the outcome results were in three groups:
mRS 0-3, mRS 4-5 and death.
The overall outcome figures were in relation to the total patients numbering 82:
0-3: 17 (21%)
4-5: 32 (39%)
Death 33 (40%)
On these bald figures, the chances of even a 0-3 mRS outcome is only 21%.
However there are a number of variables to which C1 points. The difficulty with these variables is that it is not possible to evaluate them by their combined effect. Looking at table 2 "Predictors of Good Outcome":[27]
(i) 35 of the 82 patients were under 60. Of those 11 (31%) achieved a "good outcome" (mRS 0-3). This was still well below 50% but more likely than for patients over 60.
(ii) Exactly the same numbers applied to patients presenting with a minor stroke. "Minor" in the context of this paper was "non comatose and not tetraplegic, intubated or locked-in at time of presentation."
(iii) Fluctuating strokes were present in 13 patients. They did marginally better than those who did not have fluctuating strokes (23% good outcome compared with 20% for those with non fluctuating strokes).
It is to be noted that 95% confidence intervals (CI) were very wide on all these sub groups, which is not surprising given the low number. Nevertheless:
(a) Those under 60 and those presenting with minor strokes were assessed to have an odds ratio (OR) of 3.1 compared to the patients in those categories.
(b) Yet in each group their chance of a 0-3 mRS outcome was still only 31%.[28]
The second paper is also by Schonewille and others and dates from 2009[29]. This paper considered 592 patients who had BAO. Of these 183 had been treated with AT. In this paper that was antiplatelets or systemic anticoagulants. The remainder were treated with IVT (thrombolysis) or IAT (thrombolysis, mechanical thrombectomy, stenting or a combination). This paper is based on what is known as the BASICS study and the patients' registry in Utrecht ran from 2002 to 2007. Patients were categorised as "mild to moderate" at time of treatment if they were not in a coma, or tetraplegic or in a locked-in state. If they were any of these, they were "severe". The mild to moderate deficit patients had a mean NIHSS score of 10.7, though this was for all patients, not just those treated with AT and table 1 shows that the NIHSS score of AT treated patients was lower than that of the patients on IVT or IAT.
The main purpose of the 2009 paper was to try to compare outcomes of the three different types of treatments. The paper is heavily qualified in the last two pages, with references to the fact that it is an observational study with all the limits of a non randomised study, together with numerous other possible biases/variables which could not be eliminated or catered for.
C1 relies on the 2009 paper for the information in the Figure. This shows that there were 104 patients treated with AT who were in the mild to moderate category at time of treatment. Their mRS outcome was:
mRS 0 10 ( 9.6%)
mRS 1 19 (18.3%)
mRS 2 9 (8.7%)
mRS 3 22 (21%)
mRS 4/5 31 (29.8%)
Death 13 (12.5%)
Total 124 (99.9%)
Therefore 36.6 achieved an mRS outcome of 0-2 and 22% an mRS outcome of 3 making a total of 58.6% who achieved an mRS outcome of 0-3.
The comparison of those presenting with a severe deficit is quite stark. Those figures are:
mRS 0-3 (6/79) 7.6%
mRS 4-5 (30/79) 38%
Death (43/79) 54.4%
To the extent that direct comparison between Schonewille 2005 and Schonewille 2009 is possible, the statistics suggest a massive improvement since, as we have seen, minor strokes achieved a good (mRS 0-3) outcome in only 31% in the 2005 paper as opposed to 58.6% in the 2009 paper.
Further the overall (i.e. mild to moderate together with severe) figures suggest a marked improvement from the 2005 to the 2009 papers as follows:
Year mRS % mRS % Deaths
2005 0-3 17% 4-5 32% 33%
2009 0-3 36% (66/183) 4-5 33% (61/183) 31% (56/183)
(Other figures are contained in the paper of Mattle and others. This review paper, amongst other things, compares the two Schonewille papers in table 4. However it compares only the overall 2005 Schonewille figures with the 2009 mild to moderate figures and thus shows an even starker contrast).
Professor Wills addressed the change in outcome statistics between the two Schonewille papers. Professor Wills said the apparent improvement in outcome in the two studies[30] is probably explained by the fact that the period of patient recruitment was much later in the 2009 studies. The therapeutic effect of the AT drugs cannot have changed. Professor Wills's best estimation[31] was that it would be the evolution of stroke units over the two periods which has made the difference. In other words, the general overall specialist treatment which was being received by patients in the middle of the first decade of the millennium compared to those in the 12 year period finishing in 2002. One might assume that as C1 was admitted in 2010 therefore she should be entitled to be classed amongst the 2009 figures in terms of the effect of AT therapy. To this Professor Wills gave a convincing response. He said that the 2005 paper assessed outcome at time of discharge or in-hospital death. The 2009 paper assessed outcome at 1 month. C1 had the benefit of the more modern stroke unit treatment.[32] The only benefit she did not have is that she was not prescribed AT treatment (particularly aspirin) at Medway. Therefore she cannot pray in aid the advantage bestowed by the improvement of the 2009 figures. Unfortunately her outcome was not a good outcome despite her more modern stroke unit treatment at KCH. For this reason I accept that on balance the 2005 Schonewille outcome figures in relation to the effect of aspirin are more likely to reflect the likely consequences of AT had it been prescribed to C1 at Medway.
Looking therefore at the 2005 Schonewille paper, although age and "minor" stroke (and to a much lesser extent fluctuating stroke) were predictors of good outcome, individually they were all well below 50% in producing an outcome of mRS 0-3. There are no statistics to deal with the situation of a person with the three favourable predictors. Nor do we know the number of patients, if any, who were common to more than one of the sub groups. Although it is possible that the combined effect would be to produce a more than 50% chance of a mRS 0-3 outcome, this in my judgment is impressionistic only and lacks any proper scientific/statistical basis. It may or may not be correct. Nor does the fact that C1 was aged 42 years, and therefore well under 60, or that her symptoms were at the very mild end of the spectrum at 8:35am and only moderate at 11am, provide any proper sound warrant for finding that the chances of a 0-3 mRS outcome exceeded 50%.[33]
In the Mattle paper (Table 5) there are 7 predictors of favourable outcome and 7 predictors of unfavourable outcome. Professor Wills accepted that at 8.35am C1 had 5 favourable predictors according to that table[34]. The other two favourable predictors[35] were unknowns. There was only 1 out of 7 unfavourable predictor namely dysarthria. It must be remembered that Mattle is a review paper. Apart from the two Schonewille papers, there are footnote references to papers which have not been examined in court. Mattle provides, in my judgment, no proper basis for a quantative assessment of C1's probable outcome had she been prescribed aspirin at Medway. As Professor Wills said, the paper is not subtle enough to give a percentage outcome. Further, the text in Mattle in relation to anticoagulation agents is not encouraging in relation to a submission that C1 probably would have had a favourable outcome. I shall refer to this text later in the judgment.
Dr Allder estimated that because of C1's favourable predictors, if C1 had been given aspirin at Medway at 8.35am, she would have had a 58% chance of an outcome of mRS 0-1. If aspirin had been given at 11am then he estimated that C1 would not have had a 0-1 or 0-2 mRS outcome but probably a mRS 3 outcome. Given that there is no clear literature to support these figures, the assessment appears to be based first on what I have referred to as an "impressionistic" evaluation of the Schonewille 2009 figure statistics and the fact that at 8.35am C1 was at the very mild end of the symptom spectrum, whereas at 11am her symptoms were moderate. I have already rejected the 2009 paper as a sound basis for considering C1's case; nor do I accept that I can extrapolate an even more favourable outcome from C1's symptomatology or other favourable predictors to give me any confidence that Dr Allder is correct. He may be, but I do not find it to be convincing on the balance of probabilities.
Of course, Dr Allder also relied on his theory as to aetiology. I add the following comments as to why this theory does not persuade me:
(i) There is no literature on stenosis/partial occlusion of the basilar artery and its effects so as to support Dr Allder's theory.
(ii) Dr Allder accepted that he could not quantify his theory that stenosis/partial occlusion, treated by aspirin, would produce a better outcome.
(iii) Therefore even if correct, the theory only really explains how aspirin might produce a better outcome in a case where it is administered at a time where there is only stenosis/partial occlusion of the basilar artery. It does not assist in the assessment of the extent to which it does have that effect. Schonewille 2005 tells us that an mRS 0-3 outcome is achieved after administration of AT only in 31% of patients presenting with a "minor" stroke and 23% of those presenting with a fluctuating stroke. Therefore the substantial majority of each sub group does not achieve an mRS 0-3 outcome despite the administration of AT.
Dr Allder's theory, and it is no more than a theory, is not given any support from the information we have in the literature as to the potential outcome for C1 had aspirin been administered at Medway.
There is the further feature that even if the literature showed that AT administration would probably have led to a better than 50% chance of an mRS 0-3 outcome in C1, the literature does not distinguish between aspirin and heparin as the two main forms of AT. There is no evidence to show the effect of aspirin only in BAO strokes. Professor Wills said that prior to thrombolytic treatment, he was trained to use heparin, as KCH did. He said that in the vast amount of strokes similar results are produced by heparin and aspirin but the vast amount of strokes are not embolytic BAOs. Dr Allder did not accept that it is heparin, not aspirin, that is more responsible for producing such positive effects as the Schonewille papers show.
Had I been persuaded of C1's case taking into account the expert evidence, the literature and in particular the Schonewille papers, I would not have found that there was sufficient evidence to distinguish between the effects of heparin and aspirin in relation to favourable outcome. Again Professor Wills may be correct but this point alone would not have swung the causation balance in favour of Ds.
I will make brief reference to a paper by Shahpouri and others (2012)[36]. This review article comes from Iran. It deals with ischaemic stroke as a whole and not specifically BAO strokes. In the context of acute ischaemic strokes the difference between patients treated with heparin versus placebo showed no improvement in overall outcome at 3 months.[37] Sub group analysis suggested a higher rate of favourable outcomes in patients treated with heparin who had a large artery atherosclerotic stroke. Professor Wills said, and I accept, that although the basilar artery is a large artery, one cannot use these figures for BAO strokes. As the Mattle and Schonewille statistics show, the overall outcome of BAO strokes even after AT therapy is not good.[38]
Professor Wills was asked about a paper by Redekop[39] (2008). Again this is a review article. In relation to the point Professor Wills made about heparin, he was asked about the statement that "the Canadian Stroke Consortium reported a non randomised pilot study comparing anticoagulation and aspirin in 116 patients with carotid or vertebral dissection, and found no significant difference in stroke rate." He accepted that aspirin and heparin in this context are of equal efficacy but said that the paper did not show they were of equal efficacy when the vertebral artery dissection had led to BAO. I accept this, but this does not affect my view that I am not persuaded that there are probably different effects of aspirin and heparin in respect of BAOs.
I began this section with a general point made about the IST study which dealt with the whole range of strokes and was pessimistic about the effect of AT. I have then dealt in some detail with the literature and expert evidence and concluded that C1 has not proven on the balance of probabilities that her outcome would have been mRS 0-3 had aspirin been prescribed either at 8.35 or 11am at Medway. Reverting solely to the literature, although I am fully aware, as I hope I have made clear throughout this section of the judgment, that there are numerous variables and, most particularly, a number of the papers do not refer to BAOs, nevertheless the overall tenor of the efficacy of AT in stroke treatment is not encouraging. In this regard there are the following additional extracts from the literature:
(i) The Mattle paper
"Aspirin affords a small absolute benefit (around 1%) in patients with acute stroke and causes fewer haemorrhages than does heparin. However comparative studies of antithrombotic verses placebo in people with BAO are not available. In hospital based series of patients with BAO treated with antithrombotics outcomes were good in 20% to 59% of patients; however, in a large series, case fatality was still 40%. Among survivors, 65% remained dependent (mRS 4-5). Good outcome (mRS 0-3) was reached by only 20%. Table 5 lists predictors of outcome from these series."
(ii) Lohse and others (2011)[40]
"Recent research has suggested that for patients with unambiguous basilar artery thrombosis, the only promising treatment option is early thrombolytic treatment…
Nowadays the prognosis of basilar artery thrombosis is still poor. Thus, it is common sense that nearly any promising intervention appears justified, because of the otherwise disastrous outcome..…
The natural course of basilar artery (thrombosis) is often lethal and even survivors bear a high risk for mortality and morbidity…"
(iii) Redekop (2008)
"Both anticoagulation and antiplatelet agents have been advocated as treatment methods, but there is limited evidence on which to base these recommendations."
(iv) Schonewille (2009)
The conclusions of this paper refer to the efficacy of IVT (primary intravenous thrombolysis) and IAT (intra-arterial therapy). There is no consideration, despite the statistics in the paper, of recommending AT therapy for BAO stroke. The conclusion is:
"Our observations underscore the continued absence of a proven treatment modality for patients with an acute BAO and that current clinical practice varies widely. Furthermore, the often held assumption that IAT is superior to IVT in patients with an acute symptomatic BAO is challenged by our observations. Therefore, we believe that a randomised controlled trial to compare IVT with IAT in patients with acute symptomatic BAO is a high priority.
In the meantime our results should encourage clinicians to treat patients who have acute symptomatic BAO and a mild to moderate deficit with IVT. In case of subsequent acute worsening, additional IAT can be considered…"
In summary, basing myself upon an analysis of the evidence from Dr Allder and Professor Wills and the medical literature in this area, I cannot be persuaded on the balance of probabilities that had C1 been prescribed aspirin at 11am (or even prior to 9am) at Medway she probably would have achieved an mRS of 0-3. Her chances would have been somewhat improved but, on the best evidence available, I find that on the balance of probabilities she unfortunately would not have had any better outcome than in fact was the case.
Both Counsel addressed me on the balance of probabilities and sought a ruling on that basis. As an alternative C1 submitted that potentially she could rely upon the case of Bailey v Ministry of Defence[41]. At paragraph 46 Lord Justice Waller said:
"In my view one cannot draw a distinction between medical negligence cases and others. I would summarise the position in relation to cumulative cause cases as follows. If the evidence demonstrates on a balance of probabilities that the injury would have occurred as a result of the non-tortious cause or causes in any event, the claimant will have failed to establish that the tortious cause contributed. Hotson exemplifies such a situation. If the evidence demonstrates that 'but for' the contribution of the tortious cause the injury would probably not have occurred, the claimant will (obviously) have discharged the burden. In a case where medical science cannot establish the probability that 'but for' an act of negligence the injury would not have happened but can establish that the contribution of the negligent cause was more than negligible, the 'but for' test is modified, and the claimant will succeed."
The present case can be decided on the balance of probabilities. In my judgment the evidence demonstrates that on a balance of probabilities, even if C1 had been prescribed aspirin at any time at Medway, her outcome would have been the same. Therefore C1 has not proven on the balance of probabilities that the Defendants' breach of the duty of care in failing to treat her promptly with aspirin caused or materially contributed to her eventual outcome.
C2's Claim: His witness evidence
C2 was with C1 throughout the day from the moment when he followed the ambulance to the Medway Maritime Hospital (arriving a matter of minutes after her) until late that night, he estimated around midnight, when he left KCH. There was a period at KCH on arrival when he did not see her for a couple of hours. When he left KCH he went to his parents' house, stayed overnight and was intending to take his son back to Oxford. He was then going to return to KCH. He had just got through the Dartford Tunnel when he received a telephone call from a doctor at KCH telling him that his wife had deteriorated and to come back straight away which he did, arriving at about 1pm – 2pm.
C2 gave evidence as to how his experience on the Sunday and Monday affected him. In broad terms I find his evidence to be accurate and reliable. There are certain aspects where, in comparison with the notes, I believe that he is mistaken as a result of the pressures of those days and the passage of time.
Whilst at Medway Hospital C2 said he noticed his wife deteriorating around 09:40am. He saw it himself. After that his levels of frustration increased rapidly. He said his wife was deteriorating in front of him and it was if they were being ignored. He felt that something should be happening and his fear was that if she deteriorated further and faster it would be too late. Later, when C1 was handed back to Doctor Ramphele and he discharged her, C2 was incredulous. He did not know how Doctor Ramphele could say she wasn't having a stroke. By 11:30 – 12 noon C1 could make noises but not speak properly. He said he did not think that later her speech improved but he understood it more. C2 said that when they left Medway C1 could not get into the wheel chair and he could not do it without the assistance of his father. I accept the evidence about the wheelchair but Dr Baines effectively said that because of the Darent Valley records, C1 was not in such a poor state that, when she left Medway, she could not move either arm or leg and could only move her eyes and could not speak reasonably clearly.
When they left Medway C2 decided to go back to his parents intending then to continue to Oxford and the John Radcliffe Hospital. Something changed his mind about going to Oxford. C1 told him that she remembered somebody saying it would take too long for them to go to Oxford and they should go to the nearest hospital. They therefore went to Darent Valley Hospital. They arrived some 2 hours after leaving Medway Hospital.
Later on the drive to Darent Valley Hospital she deteriorated further. He said he could hear her choking. She could not alert him to the fact that something was wrong because she could not move or speak. He said this was the worst moment. He thought she was dying. He had to remove a bit of biscuit from her mouth because she could not swallow it. She was slumped in the front seat, seemingly lifeless and choking, with her head on one side and her eyes wide open. She was panicking. [I find that this incident of choking did happen. She may well not have been able to swallow something as large and hard as a biscuit.].
C2's recollection was that at Darent Valley the staff recognised the stroke straight away and before he knew it she was in the ambulance to KCH. He accepted that the records show that she was there for something more than an hour, however. He said that at Darent Valley he thought that that was the last time he was going to see her. She was unable to move except her eyes. She wanted to communicate but could not. He was trying to talk to her and calm her. It was difficult for him to put into words how bad he felt and how useless he felt.
The Glasgow Coma Scale (GCS) score at Darent Valley was 15 out of 15. This suggests that at this stage C1 was apparently able to answer questions and was fully orientated. The examination in the clinical notes at Darent Valley does not suggest that C1 was as bad as C2 recalls. There is reference to right sided facial droop with pupils being equal and reacting (C2 referred to C1's eyes being all over the place). Right sided weakness was noted with muscle power in the right upper limb and right lower limb at 1/5 but in the left upper limb and left lower limb at 5/5. Therefore, at this stage, I find that C2 was in a poor state but that she had right sided weakness rather than bilateral weakness.
From Darent Valley C1 was taken to KCH in an ambulance. C2 did not see her there for a couple of hours after he arrived. He said it seemed like an eternity. He was expecting the doctor to come and tell him that his wife had passed away. The next day when he returned having received the telephone call once he had exited the Dartford Tunnel, C1 was ashen. C2 thought he was too late and was as if his whole world had fallen through the floor. He said he found it difficult to put into words. He was devastated.
Similar comments can be made about C1's condition on arrival and during the initial hours at KCH, as I have made above in relation to Darent Valley. Again C2's recollection was that C1 could not move. Also that she could not really communicate. The clinical notes at KCH from Dr Bercocal/Dr Haider (untimed) record slow speech that seemed to be more intense dysarthria and no dysphasia. It is recorded that C1 made no mistakes in the naming of colours/objects. The GCS score was 15 out of 15. Again the neurological deficit was on the right side, being complete facial palsy, no movement at all in the right limbs and hypaesthesia on the right side with the plantar right up going. On examination C1 tended to sleep but awoke with minimum stimulation.
In summary, I broadly accept C2's recollection as to C1's state save that her condition was not as bad as he recalls. On the Sunday her neurological deficit was overwhelmingly right sided rather than bilateral, her speech was slurred and the GCS scores were normal. Nevertheless she was very poorly and deteriorated during the day.
C2's Claim in the Light of Ds' Breaches of Duty
It must be recorded that it is common ground that C2's claim can succeed despite the failure of C1's claim on the issues of causation. This is subject only to the issues as to whether or not C2 satisfied one of the "control mechanisms" applying to secondary victims, and to causation in his case. I shall first set out how C2's claim is put in the light of my findings in relation to C1.
In this judgment I have explained that Ds were negligent in failing to prescribe aspirin shortly after the 09:40 deterioration. It has always been admitted that Ds were negligent in discharging C1 and not admitting her to hospital. In addition I accept that from about 09:40 C2 kept on asking some staff in A and E why they were not sending C1 for a scan. In short it is said that C2 suffered psychiatric injury because C1 was not properly treated and was then discharged. Had she been properly treated she would have been admitted to Medway, C2 would not have found himself thinking about driving to Oxford, then changing his mind and also witnessing his wife's state on discharge and then in the car, including the choking incident. None of this, it is said, would have taken place, absent Ds' breach of duty towards C1.
What is the medical evidence relevant to these issues? Some extracts from the reports of Dr Tattersall and Dr Campbell should be cited:
(i) Dr Tattersall:
"5. My instructions arise following Mr Owers' wife suffering a stroke on 14 March 2010, followed by a delay in this being diagnosed in the Accident and Emergency Department at Medway Hospital resulting in urgent treatment to limit the extent of the damage this caused then not being given. This event is referred to within this report as "the Index Event"…"
(In relation to the discharge)
"13. Mr Owers said that with some difficulty he was able to transfer his wife into their car using a wheelchair and initially drove to his parents' home. However, his wife was continuing to deteriorate and he was increasingly anxious about the choking, so he drove her to another hospital…"
"20. As Mr Owers described these post traumatic stress type symptoms, I explored in further detail his experience of the broader range of symptoms of post traumatic stress disorder, as follows:
(a) Mr Owers experienced in the index incident an event that threatened his wife with death, and resulted in her developing an enduring severe and life changing disability.
(b) Mr Owers said that during the index incident[42] and its immediate aftermath, his emotional response was of shock, horror and helplessness. He said that an (sic) initially he had felt "very scared" when he realised that his wife was having a stroke, and then increasingly frustrated, angry and hopeless at the delay in any assessment or treatment. He said that the subsequent days when his wife became so ill that she might have died was a very frightening time for him, and he also was stressed by the uncertainty regarding her prognosis during the subsequent months of rehabilitation.
(c) Mr Owers described experiencing recurrent intrusive and distressing recollections of the index incident occurring in the form of "a video loop" of his experience (as if seen through his own eyes at the time) of waiting for his wife to have appropriate and effective assessment and treatment in the Accident and Emergency Department at Medway Hospital, associated with feelings of frustration he had felt at the time. He said that these reliving "flashbacks" occurred every day, usually in the evenings when he feels tired…"
(ii) Dr Campbell:
"2. Post Traumatic Stress Disorder (DSM V Criteria)
A) Witnessed his wife suffering from severe illness which could have been fatal. Mr Owers was additionally traumatised by the failure of Medway Maritime Hospital to correctly diagnose his wife and has he understands it to instigate proper treatment…"
" Causation…
Precipitating Factors
The trauma of the events of the 14 March 2010, namely the rapid onset of a serious life threatening illness of his wife.
The knowledge that during her 4 hours in Medway Maritime Hospital they had failed to diagnose her condition.
Failure to treat his wife's illness in Medway Maritime Hospital.
Premature discharged (sic) her despite her physical deterioration.
It was the intensity of this distress which acted, on the balance of probabilities, to cause his post traumatic stress disorder and depressive illness.
The best indication as to causation, separating out the very serious illness of C1 from the failure by Ds properly to treat her and admit her to hospital is dealt with by Dr Campbell in this way:
"I have been asked to comment on the following scenarios. The likely outcome to Mr Owers if:-
Mrs Owers had been diagnosed at the Medway Maritime Hospital with a pontine infarct type stroke.
- This was not treatable.
- She had continued to develop the same physical complications.
In this case Mr Owers would still have been very upset by his wife's sudden illness, but would not have suffered the trauma of a missed diagnosis, no discussion of any treatment options and a premature discharge in a deteriorating physical condition.
In as much as it is possible to say, in retrospect in this scenario he is likely to have developed the lesser diagnosis of an Adjustment Disorder with depressive symptoms, and not PTSD.
If she had gone on to develop the same physical disability he would still, on the balance of probabilities, have developed a major depressive episode from the initial adjustment disorder."
Therefore I find on the balance of probabilities that the Ds' breach of duty towards C1 caused C2 to suffer from the PTSD. He would in any event have suffered depression and an Adjustment Disorder.
C2's Claim: The Legal Background
Claims based on psychiatric injury following witnessing clinical negligence in respect of a loved one have recently been considered in two cases. The first was Shorter v Surrey & Sussex HC NHS Trust [2015] EWHC 614 QB; the second Liverpool Women's Hospital NHS Foundation Trust v Ronayne [2015] EWCA Civ 588. Both deal extensively with the authorities. I shall start with the Shorter case, a decision of Swift J.
In Shorter the deceased suffered a subarachnoid haemorrhage (SAH). The claim was brought by her elder sister as a secondary victim. The Claimant was aware that her sister had suffered a bleed to the brain on the morning of the 12 May 2009, having been telephoned by her sister's husband. She was panicky and knew that her sister was in the danger zone. She was present with her sister from late morning that day, following her sister's admission to East Surrey Hospital, until the evening when she left to make child care arrangements. During this period her sister was in some pain and the Claimant, who had specialist knowledge of neurological patients and SAH, became increasingly worried and frustrated about the failure to transfer her sister to a specialist unit and to give her nimodipine that had been prescribed hours earlier. At 22:00 hours she was "terrified" by a telephone call that her sister was still at East Surrey. At about midnight she was told of her sister's first seizure at St George's Hospital. This raised her level of anxiety. A subsequent call that there had been more seizures and, probably, a re-bleed made her "absolutely terrified". The Claimant went back to St George's Hospital, saw her sister in the ITU and had distressing discussions with doctors, until finally her sister was confirmed brain dead at 12:45pm on 13 May 2009. None of this should have happened as there had been a negligent interpretation of a CT scan at East Surrey on 5 May 2009.
Swift J set out the prerequisites for liability to secondary victims deriving from the decisions of the House of Lords in McLoughlin v O'Brian [1983] 1AC 40 and Alcock v Chief Constable of South Yorkshire Police [1982] 1AC 310. The essential element in the present case, as in Shorter and Ronayne, is the proximity to a shocking event. In Alcock Lord Oliver said this (416E – 417A):
"The necessary element of proximity between plaintiff and defendant is furnished, at least in part, by both physical and temporal propinquity and also by the sudden and direct visual impression on the plaintiff's mind of actually witnessing the event or its immediate aftermath…"
At page 401F Lord Ackner said that the element of "shock" involved:
"The sudden appreciation by sight or sound of a horrifying event, which violently agitates the mind. It has yet to include psychiatric illness caused by the accumulation over a period of time of more gradual assaults on the nervous system."
Having referred to other accident cases on this point, and in particular Galli-Atkinson v Seghal [2003] 1 Lloyd's Rep Med 285 at paras 25 – 27, Swift J turned to the trio of claims by secondary victims following negligent medical treatment, namely Taylor v Somerset Health Authority [1993] PIQR P262, Sion v Hampstead Health Authority [1994] 5 Med LR 170 and North Glamorgan NHS Trust v Walters [2002] EWCA Civ 1792.
In Shorter the Claimants relied upon Walters where the Court of Appeal had found that once the "event" started, a period of 36 hours could be regarded as a "single seamless event". The Defendant argued that Walters was distinguishable because the mother had woken up and witnessed her son rigid, bleeding and choking and therefore there was a "sudden appreciation of the horrifying events". In Shorter the Defendant said there was no sudden "horrifying event". The Claimant's realisation came on gradually as a result of telephone calls, her own concerns and the events at hospital. It was submitted that the Claimant did not have the required degree of proximity to a specific and shocking "event".
Swift J accepted that the Claimant "must also show that her psychiatric illness was caused by the sight or sound causing an assault to her senses. She must establish sufficient proximity to the event, a sudden and direct visual impression on her mind of witnessing the event or its aftermath." (Paragraph 202). She also said that cases of clinical negligence present particularly difficult problems. The factual background of cases can be very different and often quite complex. The nature and timing of the "event" which the breach of duty gives rise will vary from case to case (paragraph 209). The nub of her decision can, I believe, be found in the following extracts:
"213…I do not consider that, at the time, the sight of Mrs Sharma had the visual effect on the Claimant which was later described. In the case of Walters, the trial judge and the Court of Appeal laid considerable emphasis on the start of the "event", when the mother awoke to find her baby rigid and choking after a convulsion, with blood pouring out of his mouth. Ward LJ likened that to the "assault upon her senses" the mother would have suffered if she had seen her child bleeding in a seat after a road traffic accident. That sort of "assault upon the senses" is, it seems to me, of a very different order to the scene in the A & E Department at ESH on 12 May. Indeed, even if Mrs Sharma had for a short time been in the state described by the Claimant, I do not consider that the sight would have come within the type of "event" described in Walters and the other relevant authorities. Mrs Sharma's condition was fluctuating; she did not have obvious injuries; she was not – or at least did not appear at that stage to be – in any obvious or immediate danger…"
(In paragraphs 216 and 217 Swift J pointed out that during a period of 9 hours overnight at St George's, the Claimant did not see her sister and was not proximate to the events that were unfolding and it was not until she saw her sister on the life support machine that the reality became clear. That must have been deeply upsetting but was not "a sudden or unexpected shock")
"218… It does not seem to me that what happened in this case can properly be described as a "seamless single horrifying event". There was a series of events over a period of time. The Claimant was proximate to some of those events, during the periods spent in ESH and SGH. However, much of her fear, panic and anxiety were caused by information communicated to her by telephone, or face-to-face by Mr Sharma, when he told her that her sister had "gone". I do not consider that any of the individual events within the series actually witnessed by the Claimant gave rise to the sudden and direct appreciation of a "horrifying event". Even when she witnessed her sister on the life support machine, her perception was informed by the information she had been receiving over the previous 15 hours or so and by her own professional knowledge. Mrs Sharma did not have the type of injuries suffered by the deceased in Galli-Atkinson, was not in obvious pain and had not been pronounced dead at that time. In the circumstances, it does not appear to me that the sight of her can be regarded as a "horrifying event"; nor was it sudden or unexpected."
Finally, I turn to Ronayne. In that case, over a period of 24 hours, the Claimant observed a rapid deterioration in the condition of his wife, manifested most vividly in two distinct episodes:
(a) At about 5pm on 18 July the Claimant saw his wife connected to various machines
(b) Sometime on the following day he observed her in the post operative condition unconscious, connected to a ventilator and being given four types of antibiotic intravenously. Her arms, legs and face were very swollen. Pressure pads were in place. Later he described his wife's then appearance as resembling the "Michelin Man".
Mrs Ronayne's condition on 18 and 19 July 2008 were as a consequence of the Defendant's negligence.
(Paragraphs 3 and 4).
At paragraph 13 the Court of Appeal agreed with what Swift J had said at paragraph 214 of Shorter and in particular "That the question whether an event is for these purposes to be recognised as in the relevant sense "horrifying" must be judged by objective standards and by reference to persons of ordinary susceptibility." The Court of Appeal also endorsed observations of Judge Hawkesworth QC in Ward v Leeds Teaching Hospital NHS Trust [2004] EWHC 216 (QB) where at paragraph 21 he had said (amongst other things):
"…An event outside the range of human experience, sadly, does not it seems to me encompass the death of a loved one in hospital unless also accompanied by circumstances which were wholly exceptional in some way so as to shock or horrify…To describe an event as shocking in common parlance is to use an epithet so devalued that it can embrace a very wide range of circumstances. But the sense in which it is used in the diagnostic criteria for PTSD must carry more than that colloquial meaning."
(The Court of Appeal pointed out that that was said in the context of a determination where the PTSD had been suffered as opposed to a severe and prolonged bereavement reaction, but the same principles apply to an assessment whether an event could be properly characterised as shocking as intended by Lord Ackner in Alcock).
The Court noted that the only case of which Counsel were aware where the Claimant had succeeded at trial, in a claim in consequence of observing in a hospital setting the consequences of clinical negligence, was Walters. At paragraph 17 Tomlinson LJ said:
"That is in my view unsurprising. In hospital one must expect to see patients connected to machines and drips, and…expect to see things that one may not like to see. A visitor to a hospital is necessarily to a certain degree conditioned as to what to expect, and in the ordinary way it is also likely that due warning will be given by medical staff of an impending encounter likely to prove more than ordinarily distressing."
The Court of Appeal then dealt with Walters and the facts of the Ronayne case. The appeal was allowed in favour of the Defendant Hospital Trust on the basis that there was no "sudden appreciation of an event" and that what the Claimant saw was not "horrifying by objective standards." I find the following citations to be helpful:
"35. …It was not, like Walters, "a seamless tale with an obvious beginning and an equally obvious end." In Walters the obvious beginning was the mother awakening to see her baby rigid and choking after a convulsion, with blood pouring out of his mouth. The obvious end was the tragic death of the baby in the mother's arms. The working out of the tragedy, with the raising of hopes, the journey up the motorway to London following in the wake of the ambulance, and the dashing of hopes and then their final destruction was almost Sophoclean in its seamlessness.
36. The present case is in my judgment not comparable, just as Swift J found the facts in Shorter not comparable. As there, so here, there was in my judgment a series of events over a period of time. There was no "inexorable progression" and the Claimant's perception of what he saw on the two critical occasions was in each case conditioned or informed by the information which he had received in advance and by way of preparation….
40. It follows that this was not in my judgment a case in which there was a sudden appreciation of an event. As Swift J found in Shorter, there was a series of events which gave rise to an accumulation during that period of gradual assaults on the Claimant's mind. Ward LJ in Walters contrasted what there occurred with a "gradual dawning of realisation that her child's life had been put in danger by the defendant's negligence," which would not have amounted to a sudden and unexpected assault on her mind. That in my judgment is an apt description of what here occurred – a gradual realisation by the Claimant that his wife's life was in danger in consequence of a mistake made in carrying out the initial operation. At each stage in this sequence of events the Claimant was conditioned for what he was about to perceive…
41. Furthermore what the Claimant saw on these two occasions was not in my judgment horrifying by objective standards. Both on the first occasion and on the second the appearance of the Claimant's wife was as would ordinarily be expected of a person in hospital in the circumstances in which she found herself. What is required in order to found liability is something which is exceptional in nature… I can readily accept that the appearance of Mrs Ronayne on this occasion must have been both alarming and distressing to the Claimant, but it was not in context exceptional and it was not I think horrifying in the sense in which that word has been used in the authorities. Certainly however it did not lead to a sudden violent agitation of the mind, because the Claimant was prepared to witness a person in a desperate condition and was moreover already extremely angry."
C2's Claim: discussion
In relation to the four control mechanisms applied to claims by secondary victims[43] Ds accept that C2 had a close tie of love and affection with C1, that he was close to the incident in time and space and that he directly perceived the incident. Apart from causation, upon which I have already ruled, the issue is whether C2's illness was induced by a sudden shocking event. As was said in paragraph 8 in Ronayne there are two interrelated points:
"(a) Whether the events concerned were of a nature capable of founding a secondary victim case, i.e. were they in the necessary sense "horrifying"; and
(b) Whether the sudden appreciation of that event or those events, i.e. shock, caused the Claimant's psychiatric illness."
I have set out in some detail the Court of Appeal's helpful exegesis of those points and also noted that the Court of Appeal laid emphasis on the fact that the only case of which Counsel were aware in that case of a Claimant succeeding in a hospital negligence case was Walters. The bar is set very high for secondary victim claimants in that context. The question is whether C2 has overcome that high bar.[44]
In my judgment, what was witnessed by C2 from shortly after 09:40am until C1 was discharged from Medway, and the incidents in the car before she eventually arrived at Darent Valley, were very distressing. However they were not "horrifying" as judged by objective standards and by reference to persons of ordinary susceptibility. They were not wholly exceptional. His wife was in the throes of a severe illness and C2 should have seen her admitted and looked after (irrespective of the eventual outcome). After the deterioration of 09:40 he not only saw a failure properly to diagnose and treat, but also the negligent discharge of his wife who was by then, on any account, very seriously ill. In the aftermath, which should have been avoided had the Defendants acted non-negligently, he perfectly understandably gave her a biscuit to eat and witnessed her choking upon it. Also, to borrow the words from Ronayne (para 13) "this was not, like Walters, "a seamless tale with an obvious beginning and an equally obvious end." There was therefore no sudden appreciation of a "horrifying" event.
For those reasons C2's claim also fails.
Conclusion
This has been a long arduous journey for Mr and Mrs Owers – a journey which Mrs Owers sadly completed last year after suffering 4 years of serious disability. They have established that the Hospital acted in breach of its duty of care towards Mrs Owers, but not established causation in her case, or liability in Mr Owers' case. There have been difficult factual matters for the witnesses to address and for the court to determine on the evidence presented. While I understand that the failure of Mrs Owers' action in particular will no doubt be very difficult for Mr Owers to come to terms with, nevertheless I hope it will be of some consolation that highlighting the failures in the system in diagnosing timeously his wife's condition has seemingly led to a greater awareness and improvements. This should now benefit patients in a similar position.
Appendix A
National Institute for Health and Clinical Excellence (NICE)
Diagnosis and Initial Management of Acute Stroke and Transient Ischaemic Attack (TIA). Issue date: July 2008.
NICE Clinical Guideline 68
(Page 6)
Definitions
Symptoms of stroke include numbness, weakness or paralysis, slurred speech, blurred vision, confusion and severe headache. Stroke is defined by the World Health Organization as a clinical syndrome consisting of "rapidly developing clinical signs of focal (at times global) disturbance of cerebral function, lasting more than 24 h or leading to death with no apparent cause other than that of vascular origin. A transient ischaemic attack (TIA) is defined as stroke symptoms and signs that resolve within 24 hours… symptoms of a TIA usually resolve within minutes or a few hours at most, and anyone with continuing neurological signs when first assessed should be assumed to have had a stroke…"
(Pages 8 – 9)
Specialist Care for People with Acute Stroke
• All people with suspected stroke should be admitted directly to a specialist acute stroke unit following initial assessment, either from the community or from the A&E department (1.3.1.1).
• Brain imaging should be performed immediately[8] for people with acute stroke if any of the following apply:
……
unexplained progressive or fluctuating symptoms
…
severe headache at onset of stroke symptoms (1.3.2.1).
("Immediately") is defined as "ideally the next slot and definitely within 1 hour, whichever is sooner"
(Pages 10 – 11)
1 Guidance
…….
1 Rapid recognition of symptoms and diagnosis
There is evidence that rapid treatment improves outcome after stroke or TIA. The recommendations in this section cover the rapid diagnosis of people who have had sudden onset of symptoms that are indicative of stroke and TIA. ….
1.1 Prompt recognition of symptoms of stroke and TIA
1.1.1.3 People who are admitted to accident and emergency (A&E) with a suspected stroke or TIA should have the diagnosis established rapidly using a validated tool, such as ROSIER (Recognition of Stroke in the Emergency Room).
1.3.2 Brain imaging for the early assessment of people with acute stroke
1.3.2.1 Brain imaging should be performed immediately for people with acute stroke if any of the following apply:
…….
• unexplained progressive or fluctuating symptoms
…….
• severe headache at onset of stroke symptoms.
1.4 Pharmacological treatments for people with acute stroke
Urgent treatment has been shown to improve outcome in stroke. This section contains recommendations about urgent pharmacological treatment in people with acute stroke.
1.4.1 Thrombolysis with alteplase
1.4.1.1 Alteplase is recommended for the treatment of acute ischaemic stroke when used by physicians trained and experienced in the management of acute stroke. It should only be administered in centres with facilities that enable it to be used in full accordance with its marketing authorisation.
……
1.4.2 Aspirin and anticoagulant treatment
People with acute ischaemic stroke
1.4.2.1 All people presenting with acute stroke who have had a diagnosis of primary intracerebral haemorrhage excluded by brain imaging should, as soon as possible but certainly within 24 hours, be given:
• aspirin 300 mg orally if they are not dysphagic
………..
People with stroke associated with arterial dissection
1.4.2.6 People with stroke secondary to acute arterial dissection should be treated with either anticoagulants or antiplatelet agents, preferably as part of a randomised controlled trial to compare the effects of the two treatments.
…………
(Page 27)
4.2 Aspirin and anticoagulant treatment for acute ischaemic stroke
………………
Why this is important
Aspirin administered within 48 hours of acute ischaemic stroke improves outcome compared with no treatment or early anticoagulation.
……..
Appendix B
The basilar artery (middle of figure) arises from the vertebral arteries and terminates when it bifurcates in the left and right posterior cerebral arteries
Note 1 [Professor Wills said in chief that he thought Nurse Bates’ history taking was very reasonable. In cross-examination he also said that it was not below standard not to record positive and negatives. However he later conceded that on an initial history taking in a suspected stroke the position was different] [Back]
Note 2 There is the possibility that the word “light” in the KCH record reads “Right”. However this makes less sense because the right arm and right leg are then mentioned and, to be “right” there would have to be “R” in the middle of a sentence, which seems unlikely. [Back]
Note 3 I say “main” because there is some weak corroboration of this account in the Triage note “pt woke this morning feeling unwell and wobberly…” (my underlining) [Back]
Note 4 In an attempt to focus submissions and streamline the case it was agreed by all that I should hear submissions first on time of onset of symptoms and announce my findings of fact on this. Having done this, the parties did not therefore address me on whether the head injury was relevant. [Back]
Note 5 (There are two ticks under the words upper and lower. There is also a large bracket which covers the spaces after the words, vertically read “normal, 5/5, normal, /bloods”. Therefore the words upper and lower and the ticks beneath them and ?TIA and CT:NAD appear after the bracket though the ? before the TIA straddles the bracket.)
[Back]
Note 6 At the very latest 08:40 [Back]
Note 7 Emergency Department [Back]
Note 8 Including Dr Baines and Doctor Allder [Back]
Note 9 Consultant Physician and Stroke Physician at Medway from 2010 onwards [Back]
Note 10 It is only safe to make a diagnosis of TIA if symptoms have fully resolved. However if symptoms are or appear to be in the process of resolving then TIA has to be considered as a possibility [Back]
Note 11 It was only if the history was as C1 gave in terms of onset of symptoms and had been elicited for example by Nurse Bates, that the CT scan should have been ordered urgently. I have not found that the history was as C1 gave it. Therefore this does not apply. [Back]
Note 12 As before stated I do not accept that there is criticism of Nurse Bates in this regard. Nevertheless the evidence is of relevance as to Doctor Mamun’s view of what should have happened (had Nurse Bates had a proper pathway or been properly trained in this regard). [Back]
Note 13 Doctor Mamun said that sometimes he would give aspirin before checking there was no bleed on a CT scan. However he said that usually one would want to make sure there was no bleed though sometimes one has to take a clinical decision. I do not believe that on the balance of probabilities in this situation (i.e. examining C1 at about 08:50am and from what we know of her presentation) he would have taken this chance. Other experts said that they would not prescribe aspirin without a CT scan. See also the NICE guidance paragraph 1.4.2.1. [Back]
Note 14 I specifically mention that Professor Wills, in cross-examination, gave evidence that C1 had complained that he had not undertaken a detailed examination. He said that he had asked his solicitors to ensure that C1 came with a chaperone and she came un-chaperoned so he could not fully examine. He said he was upset by the allegation that he had not done his job properly and conceded he may have used that as part of his judgment as to what Nurse Bates did or did not do in terms of examination. I have not relied upon Professor Wills’ opinion on that particular point about Nurse Bates’ examination. Although this exchange was unfortunate, I do not accept that it affected the professionalism of Professor Wills generally or his reliability as an expert witness.
[Back]
Note 15 [Back]
Note 16 C1’s eventual outcome was mRS 4 [Back]
Note 17 The sole basis for this opinion by Dr Allder was a paper Goertler et al “Acetylsalicylic Acid and Micro Embolic Events Detected by Transcranial Doppler in Symptomatic Arterial Stenosis”. Cerebro Vascular Disease (2001) [Back]
Note 18 Schonewille (2005) [Back]
Note 19 C1 sought to establish that probably heparin was stopped at about 08:30am on 15 March 2010 at KCH, relying on the “record of intravenous infusions…” and that deterioration during that day may have been due to the withdrawal of heparin. Professor Wills accepted that had heparin been stopped and C1 had deteriorated then that was probably correct. However on the balance of probabilities that is a misreading of the documents. The syringe still had 26 mls left at 08:30. There is no record on that document of anything further. Nor is there a record on that document or elsewhere that the infusion was stopped. The “patient results” document shows that there was no period on 15 March when the blood test (the APTR) used to monitor heparin in C1’s blood was below the therapeutic range. (Though the sample at 12:14 may have been affected). The result above the therapeutic range of 5.42 may well be that copied into the document headed “Over Anticoagulation with Warfarin” which is untimed but has the 5.4 figure and says “stop for 60 minutes then restart at 1.6 ml/hour.” [Back]
Note 20 Further the paper dealt with patients with symptomatic carotid artery stenosis, not basilar artery strokes. Professor Wills said that the paper showed that aspirin can have quick effects but not that it is necessarily effective. [Back]
Note 21 “The results of our study should be interpreted with caution”, (Schonewille 2005)
“Our study is observational and has all the limitations of a non-randomised study. The interpretation of our results is hampered by the absence of a treatment protocol for all patients who entered the study” (Schonewille 2009). [Back]
Note 22 Basilar Artery Occlusion; Lancet Neurology [Back]
Note 23 The Lancet; May 31 1997. The International Stroke Trial (IST): a randomised trial of aspirin, subcutaneous heparin, both, or neither among 19,435 patients with acute ischemic stroke. [Back]
Note 24 Chinese Acute Stroke Trial [Back]
Note 25 Of course it is not known when during the night prior to 7am C1’s symptoms first began [Back]
Note 26 Journal of Neurological and Neurosurgery & Psychiatry 2005 [Back]
Note 27 Patients were admitted to the study if they fulfilled at least one of 3 diagnostic criteria (A) – (C). These all suggested a worse initial presentation than C1 and the only one possibly relevant to her was Group (A) “acute neurological deficit attributable to the posterior circulation and basilar artery occlusion”. If, as may well be the case, “occlusion” means full occlusion, then C1 at Medway had only partial occlusion. [Back]
Note 28 C1 submitted that Dr Allder had said that because the OR was 3.1, that, being more than 2, gave a greater than 50% chance of a good outcome. Nobody else had this note of his evidence. If he did say it, I reject it as inconsistent with only 11/35 in each subgroup achieving a good outcome. It may be that this submission is based on a confusion of relative risk and odds ratio. The two concepts are statistically distinct. [Back]
Note 29 Lancet Neurology August 2009. This was a prospective study, not a retrospective study which Schonewille 2005 was; also the cohort was larger. However, these were not suggested by the experts to be significant in evaluating the evidence. [Back]
Note 30 Assuming the studies are reliable and I note again the caveats of the authors [Back]
Note 31 Dr Allder was not asked about this point [Back]
Note 32 Wills said that AT is only one aspect of the holistic package on a specialist stroke unit. Patents can improve even after total BAO stroke e.g. because other parts of the brain take over the functions of the damaged part; or other therapies, e.g. speech therapy, can be significant. [Back]
Note 33 Though Professor Wills accepted that logic might suggest an increased chance of a better outcome in these circumstances. [Back]
Note 34 Younger age, minor stroke, mild to moderate deficit, acute onset and single – sector stroke. [Back]
Note 35 Feeding arteries to the posterior circulation on mR angiography and reversed Basilar flow [Back]
Note 36 Journal of Research in Medical Sciences: anticoagulant therapy for ischemic stroke: a review of literature. [Back]
Note 37 In progressive strokes generally therefore this paper suggests heparin doesn’t halt neurological worsening (though note that it was the drug of choice for C1 at KCH). Also in cervical artery dissection there were no data to support the therapeutic superiority of anticoagulants over antiplatelets. [Back]
Note 38 In any event it appears to me that an increase in large artery strokes of 68% favourable outcome with heparin compared to 55% with placebo suggests that only 13% of those patients do better with heparin AT than if they were not treated at all. [Back]
Note 39 Canadian Journal on Neurological Science: extract cranial carotid and vertebral artery dissection: a review [Back]
Note 40 The Open Critical Care Medicine Journal: Clinical Diagnostics, Therapy and Outcome after Basilar artery thrombosis [Back]
Note 41 [2008] EWCA Civ 883 [Back]
Note 42 As previously described in paragraph 5 of his report (see above) [Back]
Note 43 Set out at paragraph 10 of Ronayne, [Back]
Note 44 I take account of the fact that C2 suffered PTSD, which is an indicator (but not determinative) of a sudden shocking event. Also the psychiatric evidence shows that C2 was more vulnerable than the average person to developing PTSD. [Back]
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Mr Justice Dingemans:
Introduction
This is a claim for clinical negligence made by Georgina Wells ("Mrs Wells") and Bradley Smith ("Mr Smith") who are the parents of Layla Wells ("Layla"). Layla was born and died at the Princess Anne Hospital, Southampton ("the hospital") on 20 July 2010. Layla died as a result of meconium aspiration about 35 minutes after her delivery at 1153 hours.
The claim is against University Hospital Southampton NHS Foundation Trust ("the NHS Trust") which operates the hospital. It is contended that given the readings on the cardiotocograph ("CTG") and the clinical picture, the caesarean section ("C section") which was carried out at 1153 hours should have been carried out by 1050 hours. It is contended that Layla probably aspirated the meconium after 1050 hours, and that if the C section had been carried out by 1050 hours Layla would not have died. The NHS Trust says that it interpreted the CTG properly and denies liability and contends that the care given to Mrs Wells was of an appropriate professional standard.
It should be noted that this case is not a case about failing to provide advice to Mrs Wells about the risks of continuing with the pregnancy and not having an earlier C section, compare Montgomery v Lanarkshire Health Board [2015] UKSC 11; [2015] 2 WLR 768. Some evidence at trial suggested advice should have been given to Mrs Wells about the risks of continuing with the pregnancy, which would have been balanced against the risks of having a C section. An example of this evidence was answer 20 of the joint statement and there was some oral evidence at trial to the same effect. A Montgomery type claim has not been pleaded, and there was no evidence from Mrs Wells about what she would have done had she been given any such advice. It was confirmed at trial that such a claim was not being pursued.
Mrs Wells and Mr Smith claim damages for bereavement as a result of Layla's death in the sum of £11,800 and funeral expenses of £1,049.95. The quantum of these claims is agreed if liability is established.
Mrs Wells and Mr Smith also bring claims for psychiatric injuries, namely an adjustment disorder of mild to moderate degree lasting 6 months, suffered as a result of the death of Layla, and £500 for the cost of 3 sessions of bereavement therapy. The NHS Trust accepts that Mrs Wells and Mr Smith suffered an adjustment disorder, but deny liability for that injury and dispute the quantum of the claim made for the psychiatric injury. There is a dispute between the parties about whether Mrs Wells is a primary or secondary victim for the purposes of the claim for psychiatric injury and whether Mr Smith (and Mrs Wells if she is a secondary victim) can satisfy the preconditions for such a claim.
Amendment to the Particulars of Claim
At the beginning of the hearing Mr Neil Davy on behalf of the NHS Trust submitted that part of the claim as advanced in the Claimants' Skeleton Argument had not been formally pleaded. The NHS Trust was able to deal with the point and it was common ground that permission should be given to Mrs Wells and Mr Smith to amend the Particulars of Claim. This was to plead reliance on what were said to be repetitive shallow decelerations, and that the fact that the nadir of the decelerations was below 100 beats per minutes ("bpm") as supporting the requirement to have carried out an earlier C section. The costs of that amendment were reserved.
The evidence at the hearing
The evidence from Mrs Wells and Mr Smith was not challenged, and so their witness statements stood as their evidence.
I also heard oral evidence from: David Howe ("Mr Howe"), the consultant in feto-maternal medicine employed by the NHS Trust who was the obstetric consultant on duty for the labour ward on 20 July 2015; and from Alexander Taylor ("Mr Taylor") who was the specialist Registrar (or formally the specialist Trainee Year 6 in Obstetrics and Gynaecology) on duty on 20 July 2015 and who is now a consultant employed by Plymouth Hospitals NHS Trust.
I heard oral expert evidence about the management of Mrs Wells' pregnancy from Edwin Chandraharan ("Mr Chandraharan"), a consultant Obstetrician and Gynaecologist at St George's Healthcare NHS Trust in London, who has worked for that NHS Trust since 2005. He is also the lead for clinical governance in Obstetrics and Gynaecology and he is clinical director for Women's Services. He has particular expertise in fetal monitoring and conducts courses on CTG for consultants and midwives. He has written chapters in textbooks on CTG and has written a number of peer reviewed articles on CTG, reference to some of which was made in the evidence. I also heard oral expert evidence on the same issues from Duncan Irons ("Mr Irons") a consultant in the department of Obstetrics and Gynaecology at University Hospital of North Durham and who was clinical director for the period 2001-2006. He is a reviewer for National Institute for Clinical Excellence ("NICE") guidelines.
Mr Chandraharan and Mr Irons had produced a joint statement dated 13th April 2015, and Mr Chandraharan produced a further clarification of his position on 5th June 2015.
There was a post mortem report from Dr Holden, a consultant paediatric pathologist dated 4 November 2010. This report had been prepared for the Coroner for the purposes of an inquest into Layla's death, and it was relied on by the NHS Trust in its own internal inquiries which led to the production of its Root Cause Analysis Investigation Report. The Claimants' solicitors served a hearsay notice in relation to that post mortem report, noting that the NHS Trust had relied on the post mortem. No counter notice was served, and it appeared that the findings in the post mortem report were likely to be common ground at trial. In the NHS Trust's Skeleton Argument it was suggested that an important conclusion of the post mortem to the effect that Layla had suffered hypoxic insult "at least one hour prior to death" and therefore at least 30 minutes before birth by C section was wrong. Mr Mark Lomas on behalf of Mrs Wells and Mr Smith suggested that I should take little account of the challenge, because the NHS Trust had not asked for Dr Holden to attend and had only challenged it late. Mr Davy on behalf of the NHS Trust suggested that I should give little weight to the post mortem report because I had not heard Dr Holden give evidence. My approach to the post mortem report will be to do the best that I can, knowing that this was a report produced by the NHS Trust and relied on by the NHS Trust for the purposes of the inquest and its own inquiries, but recognising that a late but important point about the compatibility of the findings in the post mortem report with the cord gas analysis has been raised. In carrying out this task I have the disadvantage of not having seen Dr Holden give evidence or having had the benefit of any further explanations that Dr Holden might have been able to give.
I also had reports and answers to written questions from Dr Morgan O'Connell, a psychiatrist, on the adjustment disorder suffered by Mrs Wells and Mr Smith. Dr O'Connell's report and answers was agreed. Dr O'Connell had been a consultant psychiatrist at the Royal Navy Hospital in Haslar and is now in private practice.
In addition to the medical notes set out in the trial bundle at the hearing I was also provided with a copy of the CTG trace which commenced at 0827 hours and which continued (albeit for some interruptions which will be addressed below) until about 1119 hours.
I will set out material parts of the evidence when addressing the issues raised by the claim.
The case was listed for two days, having regard to issues of proportionality and cost, and it was completed in two (very full) days with oral submissions supplemented by written submissions. I am very grateful to Mr Lomas on behalf of Mrs Wells and Mr Smith and Mr Davy on behalf of the NHS Trust, and their respective legal teams, for their submissions and assistance.
Relevant guidance
Both sides made reference to the NICE quick reference guide "Intrapartum Care: Care of healthy women and their babies during childbirth" issued in September 2007 ("the NICE Guidance").
The NICE Guidance provided details of: what maternal factors might contribute to an abnormal trace; what to be done when there was meconium stained liquor; what features of a trace would be reassuring, non-reassuring and abnormal; and what actions should be taken in the event that traces were pathological. I will refer to the relevant passages when dealing with the evidence. Both sides made the point that the CTG needed to be looked at as a whole, and that the NICE Guidance provided important guidance but could not provide a complete answer to what ought to be done and what was being shown by the emerging clinical picture.
Reference was also made to "The Use of Electronic Fetal Monitoring" evidence based clinical guideline number 8 issued by the Royal College of Obstetricians and Gynaecologists ("the EFM Guidance").
There was further reference to a number of articles including an article written by Mr Chandraharan with Professor Arulkumaran headed "Prevention of birth asphyxia: responding appropriately to cardiotocograph traces. Best practice & research clinical obstetrics and gynaecology".
Relevant principles of law relating to claim for negligence
The relevant principles of law which relate to the claim for negligence are common ground between the parties, and I am therefore able to summarise them very shortly. The doctors owed a duty of care. Mrs Wells and Mr Smith have the obligation to show, on the balance of probabilities, both a breach of duty of care on the part of the doctors and that the breach of duty caused loss. The NHS Trust is vicariously liable for the actions of the doctors against whom complaint is made.
A doctor is liable if he fails to act with the reasonable care and skill expected of a reasonable, prudent and competent doctor. A doctor does not act in breach of duty if he acts in accordance with a proper, responsible and logical practice merely because there is a body of opinion which takes a contrary view.
The admission and subsequent events on 20th July 2015
Much of the factual background was common ground and I have set out material parts of the background below, which unless indicated otherwise are my findings of fact. Mrs Wells went into labour at 0300 hours on 20th July 2015. She began to experience contractions which were regular and the baby was moving vigorously. Mr Smith was with her, and the hospital was phoned at 0700 hours to warn them that Mrs Wells was coming in. Mrs Wells had blood on her underwear and brought that in to show the midwife.
Mrs Wells and Mr Smith arrived at the hospital at about 0800 hours, having been driven in by Mrs Wells' father and stepmother. The evidence establishes that the ward was busy that day and Mrs Wells was taken to a corner room which just had a bed in it. Carrie Packwood ("Ms Packwood") was Mrs Wells' midwife.
A CTG was started at about 0827 hours, and it is common ground that this was an appropriate response to the vaginal bleeding. The CTG showed that Layla's heart rate was about 155 bpm which was within the normal range but higher than the previous reading of 130 bpm at a clinic attended by Mrs Wells. Ms Packwood had also written "? fetal tachycardia" referring to the possibility of an increased FHR. There was a deceleration at 0840 hours.
A vaginal examination was carried out at 0855 hours and showed a cervical dilation of 1-2 cm. Mrs Wells was seen by Mr Taylor but there is not an exact note of the time at which he saw Mrs Wells. The notes of this visit were written up by Dr Rust, who was the career senior house officer and who was scribing for Mr Taylor. He recorded "BP prev raised – now settled. Asked to R/V trace". Further notes showed a diagram of Mrs Wells' abdomen and noted what proportion of the head was palpable. It was recorded that there was no more vaginal bleeding. The CTG was analysed, and it is apparent that this analysis must have taken place after 0856 hours because there is a reference to the drop in the FHR which occurred after 0856 hours when there was a deceleration, and when the FHR recovered only to 120 bpm. It was noted that there had been a significant drop "now 120 from 160 after vomiting and decel." Variability was noted to be greater than 10, acceleration was present, deceleration was occasionally variable, lasting 2 minutes, overall it was noted that the trace seemed to have settled, and Mr Taylor was happy with the trace. The plan was to continue and an IV cannula was inserted in case of an emergency developing, with a review after theatre with an unrelated case.
It is common ground that the CTG trace showed a deceleration starting at 0856 hours and that the precipitating cause was vomiting. It was agreed at the joint meeting that this deceleration lasted for 6 minutes, followed by a recovery. In his oral evidence Mr Irons said that he had now had access to the original trace, and that it might be 2 periods of deceleration of 2 minutes duration rather than 6 minutes, although he was still happy to agree the 6 minutes with which he had agreed at the joint meeting. I saw the original trace, and there is no doubt that it is easier to read than the photocopied trace, but Mr Lomas was right to point out that there did not appear to be any particular feature which was not on the photocopy which was on the original trace. I therefore find that there was a deceleration, precipitated by vomiting, which lasted for 6 minutes. The FHR did not return to its earlier level until 0928 hours and there is a dispute about how this should be characterised and I will address this when making my findings on the expert evidence.
Mr Howe, who had started duty at 0830 hours that morning, reviewed Mrs Wells at 0950 hours. His note recorded that a vaginal examination had been carried out at 0855 hours. He also recorded "clear liquor draining".
The issue of whether there was clear liquor draining is relevant because Mrs Wells and Mr Smith rely on it as showing that if clear liquor was draining at 0925 and meconium was recorded at 1000 hours, the meconium must have been passed between those times. There was some suggestion that, notwithstanding the notes, there could be no certainty that there was clear liquor draining. Mr Howe said that he had noted a report that was from a midwife and that the note on the trace made by the midwife at about 0925 was "? SROM". It is common ground that this meant "query spontaneous rupture of membrane". This suggests that the midwife might have been less confident of the report that there had been clear liquor draining than Mr Howe had previously understood. The notes also show that the membranes were ruptured at 1000 hours which also suggests that they were not fully ruptured before. There was evidence showing that it is possible to get false reports of liquor draining, and that it is possible to get some drainage of liquor from a partial rupture, which might then get blocked by movement of the fetus. In my judgment the best that I can do is to rely on the note which was made at the time, which does report that there was clear liquor draining, and I find that there was clear liquor draining at around 0925 hours. This must mean that the meconium was passed after 0925 and before it was noted at 1000 hours.
Mr Howe also recorded that the CTG showed a variable baseline which was initially 150 bpm and then 140 bpm. Mr Howe said that at 0900 hours there had been a drop to 110-120 bpm following vomiting by Mrs Wells. He also noted "Good STV" meaning good short term variability. Mr Howe recorded at "9.45 ? loss of contact, ? deceleration". Mr Howe noted that there had been a better pick up since 0950 hours but increased short term variability. His plan was "Plan VE and FSE" meaning vaginal examination and fetal scalp electrode ("FSE").
Mr Howe signed the trace at 0950 hours. It is now common ground that the plan for a vaginal examination and to place a FSE so that a better trace could be obtained was reasonable.
The vaginal examination was carried out by Sister Purkiss who found the membranes intact and ruptured them so that a FSE might be applied. At about 1000 hours Mrs Wells' waters were broken and there was significant meconium in the water but Mrs Wells was again reassured. Mrs Wells reported that she had been transferred to a different room that was properly equipped.
Mrs Wells was seen by Mr Howe again at 1020 hours, although Mrs Wells put the time at approximately 1025 hours. Mr Howe explained that he had returned to review the trace once the quality of the reading was better. He signed the trace, and noted that it had improved with a baseline rate of 150-155 bpm, normal variability, accelerations present and no decelerations since Mrs Wells had been last seen. After FSE applied the FHR showed good variability.
The visit was recorded by Dr Rust who was accompanying Mr Howe. Mr Howe said that he did not consider that meconium present in labour was an indication for an early caesarean section and referred to the NICE Guidance which provided that "significant meconium-stained liquor" and the action which was "advise continuous EFM" which was being undertaken. Mr Chandraharan contends that a C section should have been asked to be carried out at 1020 hours, which would have meant delivery by 1050 hours, and I will address this point later.
At 1028 hours there was a deceleration but a recovery. Mr Taylor reviewed Mrs Wells at 1030 hours and noted 1 deceleration, good variability, contracting well, thick meconium, 3 centimetres, a suspicious CTG and "we need to keep close vigilance over next 30-40 mins". Mr Taylor said that the CTG was suspicious because of isolated decelerations in the fetal heart rate, but was reassured by the good variability of the CTG.
Mrs Wells thought it was just after 1030 hours that the midwife became concerned because the CTG was abnormal and reported to Mrs Wells that she would press the emergency buzzer and that Mrs Wells would be going to theatre for a caesarean section shortly. In fact the CTG trace shows that it was at 1040 hours that there was a deceleration with a sloped recovery which showed variability.
Mrs Wells recalled that some doctors arrived and Mrs Wells thought that she was given medication in readiness for a caesarean section, but in fact the notes on the trace show that had happened a bit before at around 1025 hours. Mrs Wells said that she continued to be sick and was very uncomfortable throughout.
The notes show that at 1045 hours Mr Howe reviewed the CTG again. He recorded "contracting spontaneously 4-5/10" being a reference to the frequency of Mrs Wells' contractions. The note continued "Since FSE applied, baseline 150 bpm. STV 10-15 bpm. Thick meconium draining. 2 decelerations @ 10.28 and 10.40. Second deceleration – slow, recovering over 3 minutes. Rpt VE by Dr Rust – 4 cm dilated. Thick cervix. Head still high. Baseline now recovered to 150 bpm. Need FBS".
It was common ground that at this stage the trace was pathological. The NICE Guidance suggested that a Fetal Blood Sample ("FBS") should be obtained and this was the action which Mr Howe directed should be carried out, but whether a FBS should have been carried out was an area of controversy between Mr Chandraharan and Mr Irons, and I will address this point later.
At about 1100 hours Mr Taylor arrived to do what Mrs Wells understood was a scratch test to Layla's head which was the FBS. Mr Howe said that he understood that Mr Taylor made two attempts to obtain a FBS. Mr Taylor said that he had been involved with a major gynaecological emergency in the recovery area of theatre at the time but had arrived within 15 minutes of notification and attempted to obtain the FBS. Mr Taylor said that he had considerable experience of obtaining a FBS and he said that after attempting to do the FBS in this case he did not pursue it. In his note timed at 1115 hours Mr Taylor recorded that he was unable to obtain the FBS because of hair, high head and meconium. In the post mortem it was noted that the FBS had caused a mark and haemorrhage. It was also suggested on the evidence that this might have been caused by natural pressure during contractions but I consider it more likely than not to have been caused by the FBS. This is because the extent of the area was more compatible with having been caused by the FBS than with natural pressure on the then available opening during contractions.
Mr Taylor discussed the inability to obtain the FBS and because the trace remained suspicious due to recurrent decelerations he decided that Layla should be delivered by C section. His note recorded that his impression was the CTG was non reassuring for under 2 hours, there was thick meconium, there was the inability to get the FBS and that this was a category 2 C section.
At 1120 hours Mrs Wells recalled that she was told that she was going to have a caesarean section and she was given the appropriate paperwork to sign. Mrs Wells was taken to theatre, given an epidural and Layla was delivered at 1153 hours.
Mr Taylor recorded in his retrospective note of the caesarean section that "fast delivery of baby (easily delivered in 2 mins)".
Events after delivery
Mr Smith was with Mrs Wells. After delivery Mr Smith thought that he heard Layla gasp, although Mrs Wells thought that Layla did not make any noise when she was born. The note recorded immediate cord gases venous pH was 7.329 and 4.8 arterial pH. Dr Rust noted in the caesarean section that the baby was corded once.
Mr Taylor gave evidence that the cord was loose around Layla's neck and that Layla came away easily.
The evidence shows that when born Layla was blue, her muscles had poor tone, and there were no signs of respiratory effort. In these circumstances I do not consider that whatever it was that Mr Smith heard was a gasp from Layla.
Layla was taken to be examined, and more doctors came to work on Layla. Approximately 30 minutes after she had been born Mrs Wells and Mr Smith were told that Layla had died. Mr Taylor recorded in his note that there was an "unexpected poor response of baby to resuscitation".
After being sutured Mrs Wells was taken back to a private ward and Layla was laid on her bed. Mrs Wells, Mr Smith and Layla were left alone for about 30 minutes. Mrs Wells was deeply upset. Mr Smith contacted his parents to explain what had happened.
Mrs Wells and Mr Smith were told that the doctors wanted to perform a post mortem to find out why Layla had died. The doctors wanted to take Layla but Mrs Wells and Mr Smith wanted and were given more time, cuddling Layla and taking foot and hand prints. Mrs Wells spent all night with Layla and she was released for a post mortem the next morning. Mrs Wells was discharged on 22nd July 2010.
Later events
Returning to the flat was, as Mrs Wells put it, "a horrendous experience", and Mr Smith reported that both Mrs Wells and he were "horrendously upset". The funeral was very difficult. Mrs Wells and Mr Smith became reclusive, but were assisted by their families.
Mrs Wells, who is a hairdresser, felt unable to work until 9 months after Layla's birth. When she returned to work she felt unable to cope with questions about Layla. Mr Smith said that he turned to drink to dull the pain.
Mrs Wells and Mr Smith have subsequently had a son in July 2011 and a girl in November 2013. Mrs Wells has returned to work.
Mrs Wells stated that she wanted an admission by the NHS Trust that they caused Layla's death and an apology. Mr Smith said that what both Mrs Wells and he wanted was an admission from the hospital that they should have delivered Layla much earlier and that had that happened, Layla would have lived.
Was there a breach of duty on the part of the doctors?
Mr Chandraharan considered that at 1020 hours a C section should have been required to be carried out. Mr Chandraharan considered that there was a failure to recognise evidence of ongoing hypoxia to the central nervous system on the CTG trace and to recommend delivery by 1020 hours so as to accomplish delivery by 1050 hours. He stated that this constituted substandard care. He referred to two signs of hypoxic events and stress namely a deceleration at 0840 hours and from 0856 to 0924 hours; the trace showing repetitive shallow decelerations; and thick meconium which was the likely product of fetal hypoxic stress and which he considered changed matters. He noted that Mrs Wells was still in the early stages of labour and birth could be 8 hours off and that all factors indicated urgent delivery.
Mr Howe at 1020 hours considered that the trace had improved and resolved to continue labour. Mr Irons considered that this was a proper response to the trace. It is necessary to consider a number of factors which led Mr Chandraharan to his opinion.
There was a considerable dispute between Mr Chandraharan and Mr Irons about whether account should have been taken of the fact that the FHR had been reported at 130 bpm at the last clinic attended by Mrs Wells before 20 July 2010. It was common ground that FHR in a maturing fetus might be expected to fall and so it might be expected that the increase from 130 bpm to 155-160 bpm would be of significance. However the evidence also showed that when the FHR was measured in a clinic it not would be done by CTG trace, and the measurement would only be for a very short period. This meant that there might be a false comparison, for example if the measurement had been taken during a deceleration, and in this respect it might be noted that there were earlier and higher readings taken at earlier clinics. The literature and guidance did not seem to suggest that it was normal practice to compare FHR from a normal measurement taken in a clinic (as opposed to a measurement taken by CTG in a clinic) and Mr Howe, Mr Taylor and Mr Isoms were all clear that this was not a normal practice. In these circumstances I conclude that there was no requirement to take account of the earlier reports of FHR from the clinic.
Mr Chandraharan considered that at 0848 hours the CTG trace had a "wavy" unstable baseline fetal heart rate indicating ongoing hypoxia to the central nervous system. He also said that there was an absence of cycling. Mr Chandraharan referred to shallow repetitive decelerations. Mr Chandraharan suggested that an ordinary skilled obstetrician should have been aware that the absence of a stable baseline fetal heart rate and reassuring variability indicated hypoxia to the central organs and was associated with fetal acidosis. By contrast Mr Irons considered that the baseline heart rate was normal and the baseline variability was normal. Mr Irons considered that a flat CTG would have caused concern, not the CTG which was present. I will address this dispute when considering the effect of the deceleration which started at 0856 hours.
I turn next to the effect of the deceleration at 0856 hours. The position was complicated by Mrs Wells vomiting, which is recorded on the CTG, but as set out above I find that there was a deceleration which lasted for 6 minutes. Mr Chandraharan noted that the trace showed a drop from 160 bpm to a base or nadir at 80 bpm at 0900 hours and that although precipitated by vomiting, he considered that there was a sustained umbilical cord compression at the time as maternal vomiting would not lead to a prolonged deceleration with salutatory pattern. The fetal heart rate did not recover to its original baseline until 0928 hours, but there was a dispute between the experts about whether there could be a new baseline. Mr Chandraharan said that as vaginal delivery was not imminent he said a category 1 caesarean section call should have been activated.
In his oral evidence at trial Mr Chandraharan was very critical of this response to the CTG trace at 0856 hours. At one stage, albeit when being prompted in cross examination by Mr Davy, Mr Chandraharan contended that every reasonable doctor should have caused a C section to be carried out in response to the 0856 hours deceleration and that it was negligent for the doctors not to have done so. He later made it clear in further questioning that he did not maintain that stance, and that a reasonable prudent and competent doctor would have looked for signs of a recovery of the CTG, which there were within the relevant time.
The suggestion that every reasonable doctor should have carried out a C section in response to the 0856 hours deceleration was unsustainable because: (1) vomiting is a well known cause of an abnormal trace and its effect on the CTG needed to be taken into account; (2) there was a recovery of FHR to 120 bpm, which although not at the pre-existing level was within the normal range; and (3) the CTG showed good variability and it was common ground there were 4 contractions every 10 minutes, which was the expected frequency of contractions.
As to the first point Mr Howe noted that maternal vomiting was recognised as a factor which might result in a change of trace. Under the heading "Continuous EFM" in the NICE Guidance and in the box headed "Maternal factors that may contribute to an abnormal trace" is the statement "woman has been vomiting or had a vasovagal episode". Mr Irons said that a new baseline was established at about 0902 or 0903 hours which marked the end of the deceleration, and there was a logical explanation for the deceleration namely the vomiting. Mr Chandraharan noted that the fetus had its own autonomous nervous system and that vomiting would not lower the heart rate of the fetus on a continuous basis. This raised an issue as to the second point, about whether it was possible to have a new baseline.
As to the second point the FHR did recover to 120 bpm. This was within the normal range and in my judgment it is possible to have a changed baseline. This is because the EFM Guideline at page 11 under definitions defines "atypical variable decelerations" as "variable decelerations with any of the following additional components … continuation of baseline rate at lower level" (underlining added). The EFM Guideline therefore specifically contemplates the possibility of a new baseline. As Mr Irons pointed out, if there had been a prolonged deceleration from 0856 hours to 0928 hours it would have been essential to have rushed Mrs Wells for a C section there and then but, apart from when Mr Chandraharan was being pushed in cross examination, no one suggested that should be the case.
As to the third point Mr Irons noted that there was good variability on the CTG, and this certainly appears to be the effect of the CTG.
Mr Chandraharan's changing evidence on whether all reasonable practitioners should have carried out a C section in response to the 0856 hours deceleration gave me no confidence that he had appreciated the differences between: practices which he considered to be best practice; practices which he considered to be reasonable; and practices which no reasonable practitioner would carry out. This was particularly so in circumstances when it was apparent from Mr Chandraharan's evidence and his articles that he has a particular skill in the interpretation of CTG traces. It is apparent that Mr Chandraharan thought he could detect, albeit with the benefit of the hindsight of the final outcome and the post mortem report, changes which he considered led through to the final result. An example of this was his identification of repetitive shallow decelerations which are not highlighted as a problem in the NICE Guidance. However in my judgment he was not able to set aside that hindsight and look at the CTG trace through the eyes of reasonably competent and prudent doctor when reviewing it in the course of the morning. The need for care before relying on Mr Chandraharan's criticisms of the care provided to Mrs Wells is further supported by his approach to the issue of fetal blood samples ("FBS") set out below.
In my judgment Mr Chandraharan's reference to the "wavy" nature of the CTG trace seemed to me to have been formulated with the benefit of hindsight. There was nothing in the NICE Guidance to suggest that the "wavy" nature of the CTG was likely to be a problem.
The same is true of Mr Chandraharan's reference to the absence of cycling on the trace. Mr Chandraharan took this as a warning of the problems that would later occur. However again there was nothing in the NICE Guidance which suggested that the absence of cycling, as explained by Mr Chandraharan, was a problem. It is well known that fetuses will go through stages of being awake and asleep, and that being asleep may be an explanation for a flattened baseline for up to 40 minutes as indicated in the guidance, but Mr Chandraharan was suggesting that there should be cycling as he explained it, and its absence was a problem. This was all evidence produced with the benefit of hindsight, and was not indicative of any real appreciation about how a reasonable doctor might interpret the CTG trace on the relevant morning.
Mr Chandraharan also said that the CTG had become saltatory, meaning an increased baseline fetal heart rate variability of greater than 25 bpm. It was agreed that there was a brief saltatory pattern shown for 4 minutes between 0856 and 0920 hours. Mr Chandraharan, in further comments after the joint meeting, contended that there were other saltatory patterns and periods. Mr Chandraharan suggested that Mr Howe should have understood that the saltatory pattern was due to a rapidly evolving hypoxic stress and activated a category 1 caesarean section as vaginal birth was not imminent. However the reference to a saltatory pattern was neither in the NICE Guidance nor indeed in the 2014 update of the NICE Guidance. Mr Chandraharan identified some parts of the trace as saltatory when they did not show variability of greater than 25 bpm. In my judgment Mr Chandraharan's reliance on the saltatory nature of the CTG was very interesting, and may be the basis for further research in the understanding of CTG traces but it is not a basis on which there can be any fair findings against Mr Howe or Mr Taylor.
In these circumstances in my judgment there was no sustainable criticism to be made of the care provided to Mrs Wells during or in response to the 0856 hours deceleration.
Mr Chandraharan relied on decelerations occurring at 0922 hours, 0928 hours and 0940 hours. However Mr Irons noted that these were all periods where there were interruptions to the trace. Having looked at the periods, and having heard the evidence about them it is in my judgment impossible to draw any reliable inference from the 0922 reading because a continuation of the trace at the top of the chart shows, according to the evidence, that the machine was not reading, although it looks as if there might have been a deceleration, there was a proper response namely an adjustment of the transducer. The further readings at 0928 and 0940 show that it was difficult to get proper readings, but they did not form the basis for criticising the care provided. There was a proper and reasonable response to the difficulties in getting readings, namely the use of the FSE.
Mr Chandraharan particularly relied on the fact of meconium as making it necessary to carry out a C section because birth was some 6-8 hours away. The evidence established that meconium occurs in about 20 per cent of deliveries, and that the NICE Guidance shows that once there is meconium there should be monitoring by CTG trace. This was occurring. The suggestion that once there was meconium everything changes ignored the NICE Guidance. The fetus was being supplied with oxygen through the umbilical cord, and meconium is very unlikely to cause problems unless it is ingested in utero through gasping caused by hypoxia. However even with all the matters identified above there was in my judgment no indication apparent to the reasonable practitioner of hypoxia.
Mr Chandraharan was very critical of the decision to carry out the FBS. Mr Chandraharan considered that no responsible body of obstetricians would support performing a FBS in view of the given clinical picture, stage of labour as well as the presence of thick meconium staining of liquor. He considered that there was no evidence that a FBS improved outcomes, and he considered that it should never be obtained. The NICE Guidance set out that the proper response to a pathological trace was to obtain a FBS. Mr Chandraharan relied on the evidence collated and analysed in a document called the "The Cochrane Collaboration" which suggested, as part of a subgroup analysis in the review, that FBS did not improve outcomes. As a result of his reliance on the Cochrane Collaboration Mr Chandraharan considered that the 2008 NICE Guidance was wrong to suggest that FBS should be obtained once that research was out there, and he maintained his position notwithstanding the fact that the 2014 NICE Guidance, which postdated the events which gave rise to this case, repeated the advice. Mr Chandraharan was critical of a member of the team producing the NICE Guidance who he considered to have had a disproportionate influence on the Guidance. The effect of this approach is that Mr Chandraharan was saying that there was a practice by a body of doctors who were acting in accordance with the NICE Guidance who were negligent. It is obviously possible to show that a body of practitioners acting in accordance with accepted standards are negligent, see Bolitho v City and Hackney HA [1998] AC 232, but it is necessary to show that the accepted standards had no logical basis, or were not based on a proper understanding of risks and benefits, or had reached no defensible conclusion. In this case taking a FBS allows the doctors to have a much better idea of the actual condition of the fetus, so that the best decision can be made. There is a logical reason for having the best evidence relating to the state of the fetus because, as the evidence shows, a C section carries risks to a mother. In order to make a fair assessment good information is required. The fact that the Cochrane Collaboration did not show that outcomes were very different with the FBS did not mean that it was not a reasonable practice to undertake one. The fact that the NICE Guidance in 2007 and the same Guidance in 2014 had suggested a FBS should be taken was strong evidence of the reasonableness of undertaking the FBS.
In the Claimants' written closing submissions it was suggested that the NHS Trust could not have it both ways, relying on NICE Guidance for one thing (going on to perform FBS) but not for another, which is not treating the whole of the period of 0856 hours to 0928 hours as a prolonged deceleration. I do not consider that to be an accurate representation of the position. The NHS Trust is relying on the NICE Guidance for the purposes of taking the action of a FBS where there was a pathological trace. As to the issue of a response to the deceleration at 0856 hours if there was a prolonged deceleration from 0856 hours to 0928 hours there should have been an urgent birth. However there was not a prolonged deceleration within the meaning of the NICE Guidance because it is possible to have a new baseline for the reasons given above. Further Mr Chandraharan accepted (see above) that reasonable practitioners might not carry out an urgent birth in response to the CTG at 0856 to 0928 hours.
In all these circumstances I do not accept the criticisms made by Mr Chandraharan of Mr Howe's actions at 1020 hours, or the criticisms made of Mr Taylor. This is because Mr Chandraharan has been influenced by hindsight and placed interpretations on the CTG which would not have been shared by a reasonable practitioner at the time. Mr Chandraharan has been inconsistent about what would have been a reasonable response to the 0856 hours trace. Mr Chandraharan has shown that he is willing to condemn as negligent all doctors who accept and follow NICE Guidance on FBS in circumstances where there appears to be a logical reason to take FBS. I accept the evidence of Mr Irons that the actions of Mr Howe and Mr Taylor were in accordance with reasonable practice. The taking of the FBS was in accordance with reasonable practice. There was no breach of duty on the part of Mr Howe or Mr Taylor, or the NHS Trust. For these reasons I will dismiss the claim.
Causation
I will address the issue of causation in case it becomes relevant. The NHS Trust rely on the venous cord gas analysis and arterial cord gas analysis, showing oxygenated blood, to show that there was no hypoxia before birth, and that any delay in carrying out the C section did not cause the aspiration of the meconium.
This raises an issue about whether the cord gas analysis was measuring Layla's blood or the cord was so tightly wrapped around Layla's neck that the cord gas analysis was in fact the measurement of Mrs Wells' blood. The evidence shows that Layla was "corded" once, and Mr Taylor, who was present when the caesarean was performed, supervising Dr Rust, said that the cord was loose around the neck. I accept this evidence from Mr Taylor. Although Mr Chandraharan suggested that the cord might get tightened during contractions, he did not demonstrate with the doll used for this purpose in the witness box any clear way in which the cord would not have contained part of Layla's blood.
It was suggested by the NHS Trust that Dr Holden could not have been aware of the results of the cord gas analysis, and that I cannot rely on Dr Holden's analysis that there was hypoxia before birth. I reject that suggestion. It was apparent that Dr Holden had access to the full medical records, including the cord gas analysis. Dr Holden's report sets out convincing evidence (in particular a petechial haemorrhage in the right eye, epicardial petechial haemorrhages and hippocampi containing shrunken neurones within the hyperchomatic nuclei in the CAI region which were symmetrical and well defined) showing hypoxia of some duration before birth. I have not heard Dr Holden questioned, but the physical findings support the conclusion that there had been a hypoxic change at least an hour before death, namely at least before about 1133 hours. In these circumstances I accept the evidence from the post mortem report and can only conclude that there is no ready explanation for the cord gas analysis results. Dr Holden suggested that the hypoxia was an intrauterine insult, rather than occurring following delivery. The cause of this hypoxic insult was not known, and is another matter which was unexplained on the evidence before me.
In these circumstances it seems probable that the aspiration of the meconium occurred in response to hypoxia, which the evidence showed was a known cause of fetal gasping. This occurred after meconium was passed so it must have been at some time after 0925 hours (when clear liquor was noted to be draining) and before 1133 hours (at least one hour before death). As to when in this period it occurred is very difficult to say on the evidence. Mr Chandraharan suggested that it occurred around the time of the decelerations occurring at about 1112 hours, 1126 hours or 1134 hours. Mr Chandraharan referred to a saltatory pattern, indicating ongoing hypoxia, and he supplemented his evidence in the joint statement in this respect. Mr Irons said in the joint statement that he could not help beyond saying it was after the meconium had occurred, but in evidence pointed to the CTG at 1040 hours, which does show a more shallow recovery after the deceleration.
On the issue of causation I prefer Mr Chandraharan's evidence. This is because he has acknowledged expertise in reviewing CTG's. Although I have rejected his evidence about saltatory patterns as a basis for criticising doctors instrumental in Mrs Wells' care, it does seem to me to have a logical base and is at least consistent with Dr Holden's evidence in the post mortem report. Mr Irons position was that he could not say, although he pointed to features relating to the 1040 hours deceleration, and in these circumstances I am left with Mr Chandraharan's analysis. I therefore consider it likely that the aspiration of meconium occurred at some time after 1100 hours. If there had been a breach of duty in failing to ask at 1020 hours for a C section to be carried out, which would have been carried out by 1050 hours, causation would have been established.
Psychiatric injuries
I will set out my conclusions on the claim for psychiatric injuries should they become relevant.
Dr O'Connell noted that the issue to be addressed in relation to Mrs Wells was to comment on her mental health and to identify "whether she suffered any adverse psychological consequences, as a result of the death of her daughter Layla".
Dr O'Connell reported that he had not explored in detail with Mrs Wells the events in her statement to avoid causing distress. This was understandable, but it did make it difficult for me to address whether there was any shocking event which had caused the adjustment disorder. Dr O'Connell recorded matters from Mrs Wells' medical notes and concluded that Mrs Wells had developed an adjustment disorder lasting for 6 months of a mild to moderate degree. This was not a normal grief reaction. Bereavement therapy would help to address these issues.
Dr O'Connell stated that the issue to be addressed was Mr Smith's current mental state and the psychological consequences, if any, of the death of Layla. Dr O'Connell referred to Mr Smith's statement about being present throughout the birth and made reference to his previous history of self harming and depression, before referring to his grief in the aftermath of Layla's death. Dr O'Connell concluded that Mr Smith experienced symptoms consistent with a diagnosis of an adjustment disorder lasting for a period of 6 months which was of a mild to moderate intensity. Bereavement therapy with his partner would help to address these issues.
The first issue in relation to this was whether Mrs Wells was a primary or secondary victim at the material time. It is apparent that, if liability had been established, there would have been a negligent failure to take Mrs Wells to have a C section by 1050 hours. At that time it is common ground that Mrs Wells and Layla were still (various exceptions apart) considered as one person, see Wild v Southend University NHS Foundation Trust [2014] EWHC (QB) at paragraph 22. However it was noted that Layla was born alive, and that the evidence showed that Mrs Wells had suffered because of Layla's death.
In my judgment Mrs Wells was a primary victim. This is because the negligence (if it had been established) would have occurred when Layla and Mrs Wells were still one. That meant that Layla would (albeit unknown to Mrs Wells) have aspirated the meconium, which later caused her death, when Mrs Wells and Layla were one person. This aspiration of the meconium caused Layla's death and caused the adjustment order suffered by Mrs Wells. Although some of the distinctions in this area of law are arbitrary it does seem to me that in such circumstances Mrs Wells is a primary victim.
In these circumstances Mrs Wells would have been entitled, if liability had been established, to general damages. I accept Dr O'Connell's evidence and find that there was adjustment disorder of mild to moderate degree lasting for 6 months, and that 3 sessions of bereavement therapy costing £500 are necessary. Having regard to the Guidelines, and the comparable cases referred to by both parties, in my judgment a proper sum for that would have been £7,000. Mrs Wells would also have been entitled to counselling costs of £500.
It is common ground that Mr Smith was a secondary victim. It is common ground that in order to succeed in this claim as a secondary victim Mr Smith needed to satisfy the control mechanisms derived from Alcock v South Yorkshire Police [1992] 1 AC 310. The control mechanisms have been described as "both arbitrary and pragmatic" see Liverpool Women's NHS Foundation Trust v Ronayne [2015] EWCA Civ 588; Times 8 July 2015 at paragraph 11. It is necessary in this case to show: a close tie of love and affection to the person killed; that Mr Smith was close to the incident in time and space; that he must have directly perceived the incident, rather than hearing about it from a third person; and that there must have been a sudden, shocking event arising from witnessing the death of or extreme danger to Layla. The issue in Mr Smith's case is whether there was a sudden shocking event arising from witnessing the death of or extreme danger to Layla.
In Alcock there was reference to shock being a "sudden appreciation by sight or sound of a horrifying event, which violently agitates the mind". What is "horrifying" must be judged by objective standards and by reference to persons of ordinary susceptibility. The need for a shocking event was emphasised in Ward v Leeds Teaching Hospital NHS Trust [2004] EWHC 2106 (QB). This was satisfied in a case where a mother witnessed a fit and was shocked by the sequelae because she had been reassured by incorrect medical advice. That established that a sequence of events could be shocking. In this case although no one can doubt the profound distress suffered by Mr Smith (and Mrs Wells) over the events of 20 July 2010 there was in my judgment no shocking event. There was no assault on the senses. There was no sudden appreciation of an event, or perhaps the gradual dawning of realisation that her child's life had been put in danger, as in other cases. There was a C section, followed by the removal of Layla for efforts at resuscitation, which failed. The control mechanisms are part of the law and I am bound to give effect to them. I would therefore have rejected Mr Smith's claim for psychiatric injury.
Conclusion
For the reasons given above I find that there was no breach of the duty of care owed by the doctors and NHS Trust to Mrs Wells and Mr Smith, and I dismiss this claim.
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Sir Robert Nelson :
The Claimant is now 23 years old, having been born on 18 June 1992. Between July 2006 and 2011 she was a pupil at the Defendant's special educational needs school, for children with emotional and behavioural difficulties. The Claimant had developed severe epilepsy at the age of eighteen months. This was difficult to control and the Claimant then developed behavioural problems. She has some communication and memory difficulties.
She claims damages against the Defendant for personal injuries which she alleges were caused by sexual abuse she received while she was a pupil at the school, from a member of staff, Mr Whillock, the Part 20 Defendant/Third Party. It is alleged that Mr Whillock groomed the Claimant, then aged about sixteen, by befriending her, listening sympathetically to her problems, spending increasing amounts of time with her, regularly talking on the telephone with her, encouraging her to send indecent images of herself to him, exchanging text messages of a sexual content and eventually, sexually assaulting her. The allegations of sexual assault include indecent touching, digital penetration, oral sex and one allegation of rape.
At the time of the alleged abuse Mr Whillock was the Vice Principal and Head of Boarding at the school. He was the co-author of the Child Protection Policy for the school. He strongly denies the allegations, save for those relating to the indecent images and the texts. On 21 April 2010, in the Maidstone Crown Court, Mr Whillock pleaded guilty to four counts of possession of indecent photographs of a child, the Claimant, and was sentenced to a community order, and banned from meeting with the Claimant or communicating with her for a period of three years.
The Defendant accepts vicarious liability for Mr Whillock, the part 20 Defendant, if it is established that he sexually abused the Claimant. It puts the Claimant to strict proof of the allegations. The Defendant seeks 100 per cent contribution from Mr Whillock for any damages the Defendant may have to pay to the Claimant.
The Claimant was extremely fond of Mr Whillock, and remains fond of him today. She declined to cooperate with the police, initially denying that even indecent images had been sent. She did not allege that there had been any physical abuse until 2013 when she decided to make a claim against the school, encouraged by her father, albeit that at that stage, the Claimant said in evidence, he was only aware of the sending of indecent images.
In addition to the Claimant's medical problems, she has a dysfunctional family. The relationship between her mother and father has been tense for years and in 2009/2010 they were considering divorce. There was domestic violence in the family, including physical assaults on the Claimant by her father and elder brother. Both the Claimant and her brothers were placed on the child protection register in 2009 under the category of emotional and physical abuse.
Shortly before trial the Defendant applied to Master Fontaine to amend its Defence so as to raise the issue of consent by the Claimant. This application was refused, amongst other grounds, on the basis that such a late application would require the trial date to be vacated as further evidence on the issue would have to be obtained. The issue was again raised at the beginning of the trial, but was not pursued by the Defendant after the court had indicated that it shared Master Fontaine's view that adjournment would be necessary for further evidence if the issue of consent was to be considered. It is therefore agreed between the parties that consent is no longer an issue and the Defendant fully accepts that any sexual activity between the Claimant and Mr Whillock, was abusive. It is therefore the extent of any abuse which took place which has to be established.
The Claimant's case is put upon two bases: firstly that she was physically assaulted and is entitled to damages for those assaults, and secondly that if no assault occurred, and the abuse was limited to the texts and indecent images, the claim for damages arises under the principles set out in Wilkinson v Downton as re-formulated by the Supreme Court in Rhodes v OPO 2015 UK SC32. It is alleged that if there was no physical contact amounting to an assault the emotional manipulation of the Claimant and the encouragement of her to take and send indecent photographs of herself and the ensuing sexual banter by text, amounted to the intentional infliction of harm as redefined in the case of Rhodes.
The facts
The Claimant progressed well initially at the Defendant's school. She had gone there because she had been excluded from mainstream education as a result of her difficult behaviour, but settled in well at The New School at West Heath. There is no doubt that she was then a very vulnerable girl; she could have many fits during the day, as many as ten or twelve, though they varied in their intensity and on occasion she could apprehend their onset and prevent them occurring. The risks to her were however so great that she had to have a teaching assistant accompany her all day, though not necessarily throughout lunchtime.
In August 2008 the Claimant had a left temporal lobectomy which significantly improved her condition; indeed for several years she was entirely fit free. As a consequence she no longer had to be monitored by a teaching assistant throughout the day.
It is probable that the Claimant had suffered brain damage either through the cause of the initial onset of epilepsy or through the fits themselves. It is likely therefore that she had suffered organic brain damage which may be responsible for her communication and memory problems. Her memory improved to some extent after the operation in August 2008, as also did her behaviour and mood for a while when she was relieved of the regular fits. The pressures of her difficult family life however continued and she often sought to escape the tensions of the family home during the evenings by going to a café at the local Tesco store where she became well known and was treated with kindness and understanding by some of the staff there.
The effect of her dysfunctional family upon her behaviour and mental stability is significant both on the facts and upon the medical evidence. It appears that her general improvement in behaviour after her operation in August 2008 continued until about Halloween (31 October) 2009. On 3 November 2009 there was apparently a drunken row between the Claimant's parents which ended with her mother throwing bottles at her father and being taken away by the police and placed in the cells. This was no doubt a particularly difficult experience for the Claimant's mother, especially as she was herself a police officer; indeed she attempted suicide in the cells that night. During the period from October through until the end of the year there were constant arguments within the family as recorded in the Claimant's diary and in December 2009 a fight between the Claimant and her younger brother Stephen, with whom she normally got on well. It is recorded in the mental health assessment of 22 December 2009 that the Claimant was in a low mood because of family conflicts and that she wanted to "leave the family, sleep outside and get raped".
During this time the Claimant made no mention of any abuse by Mr Whillock to either the doctors or mental health workers who saw her. It is however the case that also during this period the relationship between the Claimant and Mr Whillock was developing, certainly at the level of texts and photographs, into a sexual one. It is not clear when the relationship first moved from quasi friendship to one with sexual overtones; the Claimant is not consistent in her recollection of the duration of the abuse that she alleges, and the texts, as not all of them have been recovered, may give an incomplete picture. It is necessary to look at the history of the relationship through the emails and the texts in order to examine the nature and development of the relationship.
The development of the relationship between the Claimant and Mr Whillock
The surviving emails start in 2007 rather than in 2009 as Mr Whillock initially insisted in evidence. There is an email from the Claimant to Mr Whillock of 5 October 2007 ending "love from ABC xxxx" and an email dated 3 February 2003, which looking at the sequence, is also probably 2007, from Mr Whillock to the Claimant which is headed "Hello Princess" and ends "Love xxxxx" This suggests, Mr Levinson, counsel for the Claimant, submitted, that the relationship was already inappropriate by 2007. The Code of Practice which Mr Whillock had himself co authored, reminded staff that boundaries had to be kept between students and teachers, and the teacher was not a pupil's friend. Mr Whillock accepted in evidence that his signoff in the email 3 February 2007, wrongly dated 3 February 2003, was in clear contravention of the policy, but, he said, was meant with the best of intentions. He said that he addressed other female students in the same manner, though no evidence was produced by him to this effect. If that is correct, it would equally be in contravention of policy and best practice.
There are no further emails extant from 2007 and 2008, but by the summer of 2009 Mr Whillock was meeting up with the Claimant in the school holidays; again in contravention of proper practice. On 31 August 2009 in a long exchange of chatty emails the Claimant said that she had played squash which made her feel stiff. Mr Whillock emailed her suggesting she had a nice long hot bath if she was still stiff, or should treat herself to a massage at the gym "so long as it's a lady that does it!". When it was put to Mr Whillock that the phrase intended to mean that he didn't want another man's hands on the Claimant's body he said that was not so, and he had just made the reference as a joke. He was however unable to explain the joke and whilst he accepted that what he had written might be described as light hearted banter, he also accepted that it made more sense in the context of a sexual relationship going on. He said that was not the case however, but "pure fantasy." I am clear that the use of these words in the email demonstrates that at the time Mr Whillock had a sexual interest in the Claimant. His email encouraged the Claimant, who was then just 16, to see herself as being in an intimate and private relationship with him.
On 8 November 2009 he further encouraged the close and intimate relationship with her by ending his email "Love you xxx". He accepted in cross examination that this was more intimate than simply signing "Love". These two emails, sent before the texts and photographs of an explicit nature were, contrary to Mr Whillock's assertion, wholly unprofessional.
Phone Calls
It was around this time in the autumn of 2009 that Mr Whillock started to telephone the Claimant late at night at bedtime. He did so, he said in evidence because her mother and father had had a fight and her mother had been taken off to the cells. The Claimant was frightened to go through the front door and indeed frightened to go home, feeling safe only in her bedroom. Mr Whillock said that he advised that it would be appropriate to phone up and see whether she had got to her bedroom safely and in order to do that rang her in the evenings at bedtime.
The texts and images recovered from the Claimant's or Mr Whillock's mobile phones show that the telephone calls took place as late as 11pm or later, some of them when the Claimant was in bed. Mr Whillock said in evidence that he sought, and was granted, permission to make these calls by one or other of the Claimant's parents and Mrs Wells, the Principal of the school. Having heard the evidence of the Claimant's mother, Mrs Wells and Mr Whillock and considered the contents of the police statements by those witnesses and that of the Claimant's father, I reject Mr Whillock's evidence upon this issue. The evidence of the Claimant's mother, which I accept, made it clear that neither she nor her husband were aware of who was making these late night calls to their daughter until by chance, outside Tesco, the Claimant's mother took the Claimant's phone and realised that the man talking to her daughter was Mr Whillock. He did not ask either of the parents for their permission. He did discuss the care of the Claimant with Mrs Wells but did not inform her of the fact that he was telephoning the Claimant whilst she was in bed having 4 to 5 minute conversations with her. He certainly did not tell her of the content of those conversations nor the texts which were taking place at or about the same time in the evening. Had he told Mrs Wells of the late evening phone calls she would have refused permission; she said in evidence, that such calls would have rung alarm bells. I accept her evidence.
The Texts
Mr Whillock told the Claimant that she must delete the photographs and texts from her mobile phone. She did not delete all of them, though Mr Whillock did delete those on his mobile phone. On 13 January 2010 the Claimant left her mobile phone at school. It was picked up by a member of staff, Stacey Miles, who decided to look at the inbox as she had recently thought that the Claimant was becoming slightly obsessive about Bill Whillock. She had written that she loved Bill on her jotter or pencil case and that message had been found by a member of staff. Ms Miles thought that the Claimant was relying on Bill too much rather than utilising the support of the post 16 staff.
When she looked at the phone she saw text messages from Mr Whillock calling the Claimant "Princess" and referring to her having a hot bath. She also saw naked images of the Claimant. The matter was reported to the police and Mr Whillock eventually prosecuted and convicted as set out above. The texts which were on the Claimant's phone or those which were recovered from the Defendant's phone amount to some 18 texts between 18 November 2009 and 12 January 2010. There may have been more texts and photographs but they are not before the court. There were 20 photographs sent by the Claimant to Mr Whillock on the phones; 12 of these involve photographs of the Claimant either topless, in her underwear, or naked in the bath, and three of them show photographs of her genitals. The remaining photographs are of snow scenes, photographs of food, of animals and a netball court. The following texts demonstrate the nature of the relationship between the Claimant and Mr Whillock, -
i) On 27 December 2009 Mr Whillock texted the Claimant asking if she had sent something as nothing had come through. Shortly afterwards a photograph of the Claimant in her underwear and topless was sent. Mr Whillock's reply was "Hello Princess. That's really beautiful. Thank you. So now go to sleep all snug with lots of hugs." Mr Whillock said in evidence that he did not arrange beforehand for the photograph to be sent in spite of his question to the Claimant as to whether she had just sent him something but nothing had come through. He said that he responded "That's really beautiful" because she said she needed plastic surgery and he was reassuring her and protecting her modesty. This answer did not inspire confidence in Mr Whillock's ability to give his evidence in an honest and truthful manner.
ii) On 1 January 2010 the Claimant sent a photograph of herself naked with a close up of her genitals and Mr Whillock replied "That's really lovely. Night night Princess x".
iii) On 5 January 2010 after four photographs of her either in her underwear or naked over the previous 4 days, she sent a message to Mr Whillock stating "here's wat u ordered x" together with a photograph of her genitals. Mr Whillock replied "That's so lovely. Can I kiss it one day? x Okay we'll take that as yes! Meanwhile you can use your imagination to send me some more when you want." Mr Whillock accepted in evidence that this response was shaming and inappropriate. He had, he said, in relation to his responses to the photographs of the Claimant's genitals, lost the point or sight of the person behind the image. It just became a sexual photograph to him which aroused him because he was drunk. He denied that he had had specifically asked for the indecent photographs though he couldn't say he didn't encourage her as he gave her ambiguous messages. He claimed in evidence that on each occasion after the indecent images had been sent he told the Claimant that it was inappropriate and that she must stop. There is however no reference to this in the texts either directly or indirectly; indeed approval of the images is there, not disapproval When the Claimant said "wat u ordered" she was not, she said in evidence, responding to his earlier request for snow scenes rather than the pictures of her genitals. The Claimant said that she sent him what he requested. There is nothing in the texts to suggest that Mr Whillock was requesting photographs of snow scenes, on the contrary he specifically asks the Claimant to use her imagination to send him some more photographs in response to her sending him a photograph of her genitals.
iv) On 6 January 2010 the Claimant sent a photograph of herself topless in the bath and another one of her naked. Mr Whillock replied "Mmmmm x" Mr Whillock said in evidence he thought this was referring to a meal which the Claimant had cooked. Another answer which did not inspire confidence in his truthfulness. Nor did his answer that he was supporting her self image and affirming her sense of self worth and value.
I am clear in my conclusion both from the texts themselves, and the evidence, that Mr Whillock not only encouraged the photographs but requested them and was sexually aroused by them. He did not, I am satisfied, tell her to stop sending such photographs.
It is important to note that Mr Whillock accepted in evidence that whilst the texts and indecent images were being sent and received he was also meeting the Claimant during the school holidays.
The Alleged Rape.
On the weekend of 2/3 January 2010 or 9/10 January 2010 Mr Whillock took the Claimant to his house and then drove her to a motorway service station where there was a Tesco store, for a cup of coffee; this was a round trip of in excess of 40 miles. The car was parked in a dark secluded area under trees and after they had got their coffee, the Claimant said in evidence, they went back to the car where Mr Whillock performed oral sex upon her and took "full advantage" of her. The Claimant told Dr de Taranto that he had full vaginal intercourse with her on this occasion against her wishes. He asked her to lie down and she didn't know what he was doing but it hurt. She got him to drop her at the supermarket rather than at home because she was in tears. The Claimant told Professor Maden that Mr Whillock tried to have full sex with her on one occasion in his car; he "pretty much had full sex" with her. She also said to Professor Maden that he did have full sex with her.
Mr Whillock agrees that he took the Claimant to the service station but says that they just had coffee there and no sex at all took place. He did not drop the Claimant off at the supermarket but took her home and returned her to her parents. The evidence of the Claimant's mother confirms that there was anxiety about the Claimant going out with Mr Whillock on this occasion and that he did drop her off at the house rather than the supermarket.
Pornography
On 21/22 January 2010 the police removed two digital cameras, one on Mr Willocks's dressing table, and two computer hard drives in other rooms, in his flat at the school. Photos of Mr Whillock kissing a girl with men standing around, and newspapers in various eastern European languages advertising brothels etc. were found, as were hard core pornographic DVDs of homosexual acts. In addition, photograph albums were discovered which contained hundreds of Polaroid images of Mr Whillock performing a variety of different sexual acts, in one of which there was a photograph of a young woman in hardcore bondage. A selection of these photographs was taken to the headmistress to see if any of those involved could be identified as pupils, former pupils or members of staff. None were in fact identified.
Mr Whillock said in evidence that the pornographic DVDs had been confiscated from students and he had been keeping them with a view to burning them at his home in Kent. When it was put to him that as DVDs they could be simply destroyed by being broken in two he said that that had not occurred to him. The Polaroid photographs he said, were all of himself performing sex with a previous partner who had since died. He had kept these as a memento. All this pornographic material was found in Mr Whillock's flat at the school.
As Mr Levinson submits, Mr Whillock's apparent interest in pornography is not in itself probative of any act of sexual abuse. Nevertheless the Polaroid photographs of Mr Whillock engaged in various sexual acts, together with the fact that he kept these does demonstrate his strong interest in sex and appetite for it. The fact that he kept pornography at school may, as Mr Levinson submits, inform about his appetite for risk. I do not accept his evidence that the DVDs were confiscated from students and were merely kept there until he could destroy them; they could simply have been broken rather than be taken away to his house in Kent.
The effect upon the Claimant
The Claimant's response to leaving her mobile at school, the discovery of the texts and photographs and Mr Whillock's arrest was dire. She took an impulsive overdose, suffered from acute distress and continued with suicidal threats and threats of self harm. She feared that her life depended on the outcome for her friend Bill, who had "not done anything wrong". As far as she was concerned it had been blown out of all proportion. On 16 January 2010 she said that she loved him and wanted to live with him, and again that he'd done nothing wrong. She was reviewed by the Crisis Resolution Team at Priority House which deals with disturbed children with mental health problems. She had scissors in case the outcome for Bill was not favourable to her. The diagnosis was of Adjustment Disorder, and signs of Personality Disorder with a dysfunctional family. On 23 January 2010 she said she would like to knife her dad in the back. On 2 February 2010 she cut her chest with scissors and didn't want to be at home. Her parents were drinking and arguing and she picked up a knife so that the police had to terminate the call they were then having with the family. On 25 February 2010 she said that she planned to commit suicide if her friend was sent to prison.
On 18 March 2010 she was returned to Priority House, after an argument with her father who had emailed some of her emails to his account for forwarding to the police in relation to the prosecution of Mr Whillock. On 22 May 2010 she took an overdose after the court case against Mr Whillock.
The Claimant complained of anxiety on 12 September 2013 and it is noted she was experiencing disabling anxiety in which her muscles became stiff and she felt she had no nerves in her body. She described panic attacks with palpitations and not being able to swallow. She felt that she had had a stroke. She has continued to suffer from anxiety.
Her anxiety predated 2009 as do her behavioural problems. Dr de Taranto, the consultant psychiatrist on behalf of the Claimant, and Professor Maden the consultant psychiatrist on behalf of the Defendant, agree that the Claimant's complex history of significant physical, neurological, social and mental health problems predated the alleged abuse and that many of those problems, including family conflict continued to affect the Claimant and her ongoing conditions. The difference between them is the extent to which the abuse and its discovery is responsible for the Claimant's current condition and her ongoing problems. What they are both agreed about is that the Claimant, when she was a needy young person with inadequate support, turned for help to a man who exploited her vulnerability and breached the boundaries of an appropriate teacher – student relationship.
The Issues
It is agreed between the parties that these are threefold, firstly the extent of the sexual abuse, secondly causation, and thirdly quantum. It is now agreed between the Defendant and the part 20 Defendant that the Defendant will be entitled to 100% contribution if it is ordered to pay damages to the Claimant.
The extent of the sexual abuse.
I am satisfied upon the basis of the texts, the indecent images, and the evidence, in particular that of Mr Whillock, that he was actively encouraging the Claimant to send indecent photographs to him and that he did so because he was sexually interested in her and hoped to have a sexual relationship with her. The indecent images aroused him sexually as he accepted in evidence.
I have no doubt that Mr Whillock was not merely interested in the Claimant sexually, but that he was grooming her for some period of time for sexual activity. This is not to say that he was not fond of her or that he did not seek to advise her from time to time on her family problems. That was part of the relationship that they had, and that he built upon in order to secure her dependency and reliance upon him. But it was, I am satisfied upon the evidence, always his ulterior motive to have some kind of sexual relationship with her.
When considering the extent of the abuse beyond the admitted texts and indecent photographs it is necessary to consider the evidence of the Claimant and of the Third Party in greater detail. There are no objective, external sources of any evidence as to what occurred between them.
I am satisfied that neither the Claimant nor Mr Whillock have been fully truthful in their evidence or in their dealings with others.
The Claimant's evidence
The Claimant suffered problems giving evidence, and indeed generally in life due to her communication, comprehension and memory difficulties which probably stemmed from her early brain damage when an infant. Her apparent social ease and charm tend to belie her difficulties and make them less apparent than they are. It was clear during the course of her evidence that she did not always follow the questions being asked of her, could not always find the words to give the answer she was seeking, and occasionally became confused. I do not wish to underestimate her disability, which undoubtedly exists, but it is also the case that she remains a young woman of charm with, in general, an ability to express most of that which she wishes to communicate.
Mr Levinson cites an example of the Claimant giving different answers to a similar question expressed in a different way, namely the occasion when she agreed in cross examination that she had told Dr de Taranto that she had had no sexual relationships in order to bolster her claim, but then immediately denied, as part of the same answer, that she had been trying to mislead the experts to increase the value of her claim. Mr Levinson submits that this inconsistency was clearly lost on the Claimant who was trying to say that she had answered the experts' questions about this to the best of her ability. I am conscious of the fact that the Defendant and Third Party's response was that the first part of her answer was correct.
I am nevertheless quite satisfied that it would be appropriate for the court to take into account the Claimant's accepted difficulties with communication comprehension and memory. I shall bear all these in mind when testing her evidence.
Mr Weitzman, counsel for the Defendant, and Mr Payne counsel for the part 20 Defendant, submit that the Claimant's evidence was misleading and deliberately designed to support her claim in various respects. Firstly they contend that the Claimant gave an inaccurate account of her sexual history to both medical experts. She told Dr de Taranto on 31 July 2013 that she had never had any sexual relationship and didn't want one because, as a result of the abuse, she did not believe sexual relations could be enjoyable. In her witness statement paragraph 50, she said that she did not like having sexual contact with anyone as a result of the abuse. Both of these accounts are inconsistent with what in fact is the case. The GPs notes show that she sought general contraceptive advice and counselling in May 2012; she had a partner aged 30 and looked happy. On 27 November 2012 her periods had not been regular, and no contraception had been used when she had been having casual sex about 3 to 4 months earlier. She had a pregnancy test which was negative. She said in evidence that she had forgotten about these matters when interviewed by Dr de Taranto. The Defendant and Third Party said that this was not credible.
The Claimant gave a different account to Professor Maden in May 2014. She said that she had never had any sexual problems with the exception of feeling her confidence and self esteem had dropped for a while after the disclosure of her relationship with Mr Whillock. Her one and only boyfriend was Ed whom she met in Miami. They had a sexual relationship which she enjoyed. When asked about the GP's notes she told Professor Maden that the pregnancy test was because she had had sexual intercourse with Mr Whillock. That could not have been correct because sexual intercourse with Mr Whillock, if it had occurred, was several years before the pregnancy test.
In December 2014 the Claimant told Dr Muthuveeran that she had had three short term relationships.
The Claimant accepted in evidence that her account to Dr de Taranto and Professor Maden had been inaccurate, and she accepted the relationships set out in the GPs notes. She said that she had simply forgotten them at the time of the medical examinations.
Her accounts to the doctors are very inconsistent. They range from telling Dr de Taranto she never had any other sexual relationship than the one alleged with Mr Whillock, repeated in her witness statement, and telling Professor Maden that she had never had any sexual problems and enjoyed sex with Ed. This inconsistency and its obvious artlessness leads Mr Levinson to submit that it may be thought the Claimant lacked the cunning to lay a false trail in her medical records. It is surprising that she should repeat in her witness statement of November 2014 not liking sexual contact at all because of the sexual abuse by Mr Whillock, when only some five months earlier she had been telling Professor Maden that she enjoyed sex with her boyfriend in America.
The overall picture suggests to me that the differing accounts which the Claimant gave of her sexual relationships were in part due to her inadequate memory but also in part due to her preparedness on some occasions to exaggerate her claim where she thought it might help her. I do not consider that embarrassment about talking about her sexual relationships in front of her mother (if she was actually present at any of the examinations) is likely to be a correct explanation for the inconsistencies of her accounts.
It is also pointed out on behalf of the Third Party that the Claimant's evidence as to the duration of the abuse varied from 3 years, to 2 years to 1 year or even between the ages of 13 and 19. It is however easy to see how confusion over the level of the relationship and the length of the abuse in that relationship might arise in a young woman looking back at her time in school some years earlier.
The same applies to the frequency of the abuse. Mr Payne points out that on some occasions it is said to be 3 to 4 times a week and on another once a week. I do not however regard this apparent inconsistency to be of significance. If the abuse did occur, and occur more in some weeks than others then the Claimant's recollections might be correct.
Both Mr Weitzman and Mr Payne contend that the Claimant also lied about her relationship with Mr Whillock after the discovery of the texts and conviction. She said in her witness statement paragraph 50, that she had had no contact with Mr Whillock. She told Dr de Taranto at the end of July 2013 that she still loved Mr Whillock and wanted to be with him if she could and said that she had been trying to find him. She felt anxious about seeing him, wanting to see him, but not wanting to see him. The Claimant did not tell Dr de Taranto in January 2015 when she saw her again that she had in fact now seen the Third Party on numerous occasions. Nor had she told Professor Maden in May 2014 that she had been seeing the Third Party on a regular basis, meeting him, having coffee with him and on one occasion having a curry with him. She wrote him a letter dated 6/11/2013 telling him how much she missed him and apologising for the trouble she had caused him. She invited him to friend her on Facebook either earlier in 2010, or after she had re-met him. She sent him texts including a link to a love song.
Her mental health worker, William Parsons, expressed concern to her about her renewed contact with Mr Whillock. It is recorded in the Patient Progress Notes of 12/02/2014 that the Claimant said that she had met Mr Whillock on several occasions and was concerned when she had been in the car with him, and expressed some concerns about his behaviour. However she liked speaking to him, and did not wish to stop contact with him, and was worried about any actions that Mr Parsons might take due to her concerns. She was worried also that Mr Whillock would be angry if he, Mr Parsons, informed the police. She liked being with Bill because he gave her money and made her feel looked after. Mr Parsons did contact the Public Protection Unit who informed him that because ABC was of age and full capacity there was no action to be taken about her contact with Bill.
On 5 March 2014 it was stated in the Risk Overview that ABC had seen the Third Party several times, was exchanging texts and talking to him. She is reported as suggesting that he was making advances on her and was stating that she was fearful of his behaviour but enjoyed his company and liked the fact that he was caring for her and gave her money. The author of the report said there appeared to be grooming behaviour there.
Mr Weitzman, supported by Professor Maden, submits that the Claimant's behaviour in seeing Mr Whillock is inconsistent with the alleged abuse. Had he abused and raped her she would not wish to have any further contact with him. It was for this reason, it was submitted, that the Claimant denied any contact with him in her witness statement and did not mention such contact either to Professor Maden or to Dr de Taranto.
It can be seen from the above that the Claimant had many conflicting views of the Third Party. She was indeed somewhat fearful of him, but nevertheless wanted to see him. The evidence would suggest that she is still fond of him and perhaps still is infatuated with him. Dr de Taranto said that the Claimant must have deliberately not disclosed her contact with him, but she had complex reasons for having so acted. Her ongoing relationship with him was confusing and the fact that she lied about it showed that she knew that there was something wrong with it.
I am quite satisfied that Dr de Taranto's evidence upon this issue is correct. The Claimant wanted to see Mr Whillock but knew that the rest of the world disapproved strongly of her doing so. The 39 year age difference between them must have become more apparent as she got older. She had seen when she had reported the matter to her mental health workers that it had been reported to the public protection unit. I am satisfied that her feelings about Mr Whillock were extremely confused in 2013; she felt that she was still in love with him, but was concerned about his behaviour and the making of advances to her; she was somewhat fearful of him but liked his company and the fact that he gave her money. I think it probable that she did not want to admit to the world that she felt that she still loved Mr Whillock. In evidence she said that she felt that after she had seen him again he "lured" her back with him. I accept that is what she felt. As the mental health workers said it appeared that there might be grooming; this had restarted. It might even be the case in the Claimant's mind, that at least in 2013 when she first met him, she was unsure as to when the period he was not allowed to see her had ended.
Taking the evidence as a whole I conclude that the denial and non disclosure of contact with the Third Party is not a significant point in assessing the truthfulness of the Claimant as a witness or the honesty of her case. If there was any conscious element at all in suppressing this information for the furtherance of her claim it was not a dominant reason, but was lost in the myriad of reasons that she had for keeping the matter quiet. Nor do I accept Mr Weitzman's and Mr Payne's submission or Professor Maden's evidence that continuing to see the Third Party was wholly inconsistent with abuse or rape. The fact remains that the Claimant was still infatuated with Mr Whillock. She still liked him even if she did not like everything that he had done to her. He had groomed her and made her dependant upon and reliant upon him. Seeing him again is consistent with the nature of the relationship that they had and her feelings towards him, even if that relationship did include encouraging her to send indecent images of herself or even physical sexual abuse. The fact that he was in a sense a father figure to her meant that any sexual conduct towards her was extremely confusing but she clearly still felt the need to see him, even though she was uncomfortable about having done so.
Mr Payne submitted that the Claimant's evidence that although the Third Party sought to make her give him oral sex she declined, demonstrated that the evidence in her witness statement that he made her do it to him was untruthful. I accept her evidence given to me that she did not perform oral sex upon him with the consequence that the passage in her witness statement where she said that she did was inaccurate. I take that into account when assessing her evidence as a whole.
Her failure to report the abuse she now alleges to anyone until she went to see a solicitor, prompted by her father to make a claim, is also a matter I have taken into account though I am clear that her reasons for not initially informing the police of anything against Mr Whillock including even the fact that the indecent images existed, was due to her desire to protect him and her relationship with him.
The Third Party's evidence
I now turn to consider the evidence of Mr Whillock. In his role as Vice Principal and Head of Boarding he worked different hours to the teaching staff. He arrived at lunchtime and started work in the afternoon and remained on duty until 10 or 11pm. Accordingly he had premises in the Gate Lodge where a security team were also based on the ground floor. His premises had a bedroom and a sitting room and kitchen. He had during the time that the Claimant was at the school and he was a member of staff there, an office in the main school premises firstly on the ground floor and later on the first floor. The ground floor office had a large uncovered window and the first floor office was in a very busy corridor; there was an open door policy in the school so that students could walk in at any time without knocking.
I do not however accept the submission that the opportunity for abuse could not have arisen between the Claimant and Mr Whillock. I accept Mr Levinson's submission that it would have been possible for Mr Whillock to organise an opportunity for planned abuse provided that he chose such opportunities carefully. There were occasions as earlier noted in this judgment when the Claimant was alone with him during part of a lunch hour. After she was 16 she went away to college for much of the working day as many post 16 year old students did, but she did however on occasions come back early from college and went to see Mr Whillock at a time when others would not have been around in such numbers and she could have been alone with him. Furthermore as Mr Levinson submits the evidence suggest that Mr Whillock was a risk taker. He was certainly prepared to keep pornographic material in his flat at the school even though students might come into his room.
I consider it unlikely for abuse to have taken place pre the operation in August 2008 because of the presence of the teaching assistant accompanying the Claimant for much of the day before the successful operation. After the operation, abuse in the Third Party's office could have occurred. I do however find that it is unlikely that either would have removed significant amounts of clothing as the possibility existed of a student walking in. But the opportunity for partial undress, for example the removal of underwear was present.
Mr Levinson submits that the Third Party was and still is manipulative and dishonest. Mr Weitzman in his submissions has described the Third Party as a thoroughly unreliable witness who had groomed the Claimant so that she would send him indecent images, and lied to the police. I found the Third Party to be an unreliable and untrustworthy witness. I am satisfied that he lied in relation to many matters. Thus:-
• He lied when he said that the emails began in 2009 not 2007
• He lied when he said that the reference to a lady carrying out a massage rather than a man was just a joke
• He lied when he said that his meetings with the Claimant were professional when in fact he was grooming her and encouraging indecent images to be sent to him
• He lied when he said that his description of a photograph of herself naked as "really beautiful" was about her fears of the need for plastic surgery and to protect her self image
• He lied when he said that he wanted and asked for photographs of more snow scenes
• He lied when he said he told her to stop – in fact he continued encouraging her
• He lied when he said that he'd asked Mrs Wells for permission to continue making late night calls
• He lied when he said that he asked her parents for permission to make those calls
• He lied when he said that nothing "inappropriate" had happened to her to Mrs Wells
• He lied to the police when he said he'd never encouraged the Claimant to send indecent photographs.
These lies were about what he had done and what he had intended to do and what had happened. In other words lies which go to the heart of the principal issues in this case.
Mr Whillock was also hesitant and deliberately vague as Mr Levinson submits, in answering questions about similar allegations made against him. He spoke about the transgression of school policy requiring doors to students' rooms to be kept open at all times which he had been in breach of, stating that this had been examined in the course of tribunal hearing when the school had been found not responsible. He said that there had been no other similar allegations against him, when in fact the allegation that was made, arising out of that incident, was that he had raped a 17 year old girl with learning difficulties. The Claimant does not and could not rely on similar fact evidence; indeed the previous allegations cannot prove any of the matters in issue in the case. Mr Levinson does however rely upon the denial of the Third Party that he'd ever faced such an allegation before as relevant to his credibility.
I found that Mr Whillock also lied about the pornography in his flat at the school. I reject his evidence that pornographic DVDs were kept by him in the flat in order to burn them when in fact breaking them and throwing them away would have been the simplest solution.
I do not accept Mr Whillock's evidence that the Claimant had told him that her father had been pressing her to sue him, that she had resisted but agreed to sue the school and was "going to make stuff up." If the Claimant had said that, her case would have inevitably and obviously involved criticism of Mr Whillock and it is improbable that he would have been prepared to continue seeing her knowing that she was making a false claim, dishonestly alleging sexual abuse against him and holding the school responsible for it.
I conclude therefore that the third party is a wholly untrustworthy witness but I have also found that there are various aspects of the Claimant's evidence which cannot be regarded as wholly reliable. As the burden of proof lies on the Claimant I am conscious of the fact that any exaggeration of her claims requires me to consider her evidence and the issues with considerable caution. I note the decision in Armagas Limited v Mundobas S.A. 1985 WLR640 as to how to deal with credibility issues when there is a substantial conflict of evidence such as there is here. The advice of Lord Goff in that case was where such conflict exists reference to the objective facts and documents, to witnesses motives and the overall probabilities can be of very great assistance in ascertaining the truth. The witnesses themselves however have to be assessed, especially in the light of objective facts and documents and overall probabilities.
I perform that task here. I note that once the abuse was reported the Claimant has given a clear and consistent account of a course of conduct by Mr Whillock culminating, she alleges, in an act of sexual intercourse which she did not consent to. I found her account of a gradually developing and increasingly intimate relationship persuasive in itself and on the probabilities. I noted that when she gave her evidence that Mr Whillock did start to touch her and said when challenged, "yes it did happen" she did so with a quiet nod of the head, an almost internal gesture. I also noted that she appeared to be distressed when describing the events in the car at the motorway service station. The fact that I found part of her account persuasive and convincing does not mean however that I accept her evidence in total.
I am equally satisfied that Mr Whillock lied to the police, to Mrs Wells, and to the court. His denial that he was sexually attracted to the Claimant and his evidence that he didn't particularly enjoy the Claimant's company, no more than any one else's, was wholly against the weight of the evidence and as untruthful as it was unconvincing. The same applies to the initial denial of encouraging the Claimant to send him indecent photographs.
Nevertheless the fact that I have found that the Third Party to be a thoroughly unreliable witness does not mean that every aspect of his evidence is untrue.
I now turn to considering the sexual abuse which I find did occur.
Sexual Abuse
I am satisfied that as the relationship developed the Third Party hugged the Claimant, not in the manner permitted by the school, from the side, but with a full frontal body contact. I accept the Claimant's evidence that on one occasion she went into the bedroom in his flat at the school premises laid down on the bed and was joined by him. On that occasion he cuddled her but no abuse took place. This was part of the acclimatisation process that he carried out to make the Claimant feel confident about physical contact with him.
I am equally satisfied that on many occasions he sat her on his lap and cuddled her and that this progressed to him touching her sexually and eventually to him putting his hand on and in her vagina. I'm satisfied from the evidence of the Claimant, the Third Party and the texts and the photographs that the Third Party had a strong sexual desire for the Claimant, but knowing his position in the school and her age and her status as a vulnerable student, set about his advances to her slowly and with care. Such activities I have found were perfectly possible in his first floor office if done discreetly and I have no doubt he chose his moment when the corridor was less busy, during the lunch hour or when the Claimant came back early from college to see him when few others were about. His possession of pornography in his flat in the school suggests that he was probably not averse to taking risks.
I find that it is unrealistic and wholly improbable that Mr Whillock, writing texts to the Claimant encouraging and indeed asking for indecent images of her to be sent to him, and being aroused by them, thereafter conducted an entirely professional relationship with her when he and she were alone together at the school.
I do not, however, find that he took his trousers off or her clothing completely off. That is possible but improbable given the position of his office, even at lunch times.
I am however satisfied that the Third Party did ask the Claimant to give him oral sex, but that she declined to do so. Her evidence on this issue was truthful in the witness box, whereas that in her witness statement suggesting that it had taken place is incorrect.
There is no dispute between the Claimant and Mr Whillock that he took her in his car to the motorway service station and that there they had coffee, having first taken her to his home where he changed from the wet clothing he was wearing. I am satisfied that they went back to the car having obtained their coffee and that in the car sexual activities such as kissing and touching took place. As to the rape however only the parties themselves know whether a full act of sexual intercourse took place in the car, but it is a very serious allegation and I am not persuaded that the evidence is sufficient to satisfy me that penetrative sexual intercourse in fact took place. The Claimants' description to Professor Maden was that the Third Party "pretty much had full sex with her". This is not a convincing description even though she confirmed to Professor Maden that intercourse had in fact taken place. When she gave evidence upon the matter the description was vague: he "took full advantage of me" "everything happened". Added to that there is no detailed evidence of how or where in the car the act took place, nor is there any evidence of the location, for example where the nearest lamp post was, how the area was lit, how close they were to the nearest parked car, how busy the service station, was and other similar points.
The same applies to the allegations of oral sex. This was simply dealt with by the description that "everything happened". Further, the text from Mr Whillock stating he wanted to kiss her vagina "one day" implied that at that date, namely 5 January 2010, it had not taken place. There is also some doubt as to when the visit to the motorway service station was, either the first or second weekend in January 2010, and I am not satisfied that the evidence, taken as a whole, is sufficient for a finding that oral sex on the Claimant took place.
I have therefore found that sexual touching, fondling and digital penetration of the Claimant by Mr Whillock did occur but that I am not satisfied on the evidence that oral sex either on the Claimant or the Third Party or that penetrative sexual intercourse took place. I make these findings on the basis of the evidence I saw and heard, coming in particular from the Claimant and the Third Party, the texts and indecent images, the documents, and the probabilities. I took into account my reservations about the reliability of the Claimants' evidence with particular focus on the burden of proof.
As to the duration of the abuse that I have found I am satisfied that it occurred in the latter part of 2009 and January 2010. It may have been earlier but there is no need for any finding as to the precise date of commencement. The texts make no reference, directly or indirectly, to sexual intercourse having taken place by early January 2010. They are however in my judgment consistent with sexual touching fondling and digital penetration having taken place.
I reiterate that I reject the contention that the Claimant's contact with Mr Whillock from 2013 onwards is inconsistent with any abuse having taken place. The Third Party had made her dependant on him and reliant on him. He had groomed her to the point where she was totally infatuated by him. She didn't like what he did to her, but she very much liked the man, his sympathy, his apparent understanding of her problems and his friendship. He took the place of her father and she did not want to lose him. His grip over her remained so strong that when she saw him again she felt lured back.
Causation
There is no doubt that family conflict has been a real and continuing cause of the Claimants past and ongoing mental health problems, and that it was primarily the disclosure of the indecent images and texts which initiated the severe problems which the Claimant then developed.
It is equally clear on the medical evidence, the documents and the evidence generally that as a result of the abuse and in particular its disclosure, the Claimant suffered an adjustment disorder, i.e. a diagnosed psychiatric condition (ICD10-F43.2). This involved increased anxiety, increased self harm, social difficulties with her peers and a decrease in her self confidence and self esteem. The doctors are agreed that for a time these events caused a great disruption in her life. Dr de Taranto puts the length of the adjustment disorder at some ten months and Professor Maden at six months. There is a debate between the two medical experts as to whether or not the Claimant still has symptoms referable to the abuse and its disclosure, particularly as to whether she has an anxiety disorder as Dr de Taranto considers, or a lesser condition, acute anxiety, as Professor Maden thinks, and what the prognosis is for any anxiety condition from which she may suffer.
Having heard the Claimant give her evidence particularly on the issues of her past sexual history, length of abuse and contact with Mr Whillock, both medical experts considered the abuse and its disclosure to be less powerful a causual factor than they had earlier done. Professor Maden considered that the Claimants present state is what it would have been if the abuse had not happened and Dr de Taranto reduced the percentage estimate she had made of the responsibility of the abuse and its disclosure to her anxiety condition, reducing it from 40% - 50%, down to 30% .
Another area where there was agreement between the medical experts was the effect of the abuse upon the Claimant's view of the relationships she formed. The background of her family conflict would always make the forming of relationships more difficult for her than otherwise might have been the case but the breach of trust by Mr Whillock has, I am satisfied on the evidence, increased her problems significantly. Professor Maden described the breach of trust as being a "massive breach" which "grossly distorted the boundaries" between teacher and pupil. This would have undoubtedly have increased the Claimant's confusion about relationships between parent and child and teacher and pupil. Doctor de Taranto expressed a similar view but added that such confusion would be likely to continue for as long as her relationship with Mr Whillock was ongoing.
The medical evidence as to the nature and extent of the breach of trust and its effect on the Claimant is of importance. The Claimant was a very vulnerable young woman when Mr Whillock sought to exert his influence over her. He was of course fully aware of that fact and this makes his breach and its nature and extent so much more damaging; he helped to ensure that a vulnerable person was made more vulnerable and that further harm which might have been avoided was rendered inevitable.
It matters not in my judgment that it was the disclosure of the abuse rather than the abuse itself which initiated the serious mental health problems which the Claimant suffered from January 2010. It is in the very nature of successful grooming that the victim may become infatuated, and accept the abuse in exchange for the continuation of the relationship. This is especially so in a case such as the present where Mr Whillock in effect became a father figure, substituting himself for the Claimant's father with whom she could not get on. It is not, as Mr Levinson submits the sexual acts which caused the problem in themselves in a case such as this, but the emotional manipulation and the encouraging of indecent images which precede or accompany the physical abuse. Nor because of the nature of grooming is it likely that any stress or psychological shock will start at the outset of the abuse; it is likely to come later when the victim is able to see what had truly been happening. The risk of disclosure in such a dangerous illicit relationship was inherent and indeed I note that on 21 January 2010 Dr Barnard, the treating psychiatrist stated that the Mental Health Team knew that texts had been passing between Mr Whillock and the Claimant and planned to approach the school before the disclosure intervened. It should also be noted that the nature of the relationship and the abuse itself was in fact responsible for creating confusion in the Claimant's mind about her relationships. It is not difficult to envisage the difficulty which someone in her position might feel about being sexually abused by a father figure and the effect which that might have upon her relationships.
I accept Dr de Taranto's evidence that it is likely to be true that the Claimant suffers from reservations about her sex life. She has, so far, formed short term fairly unsatisfactory relationships. It is probable that difficulties in forming and sustaining relationships relate both to her early family life and conflict as well as to the confusion which her emotional manipulation by Mr Whillock created.
I found Dr de Taranto's analysis of the case more compelling than that of Professor Maden and accept her evidence that the Claimant does suffer from an anxiety disorder and continued to do so after 2010. The percentage (30%) that is due to abuse will diminish over the next few years. I accept her evidence that therapy will help the Claimant as indeed will more stable relationships.
I am satisfied that causation has been established.
The Rhodes Claim
As I have found that there was direct physical sexual abuse as well as emotional manipulation in the encouragement of indecent images, and further because Mr Weitzman on behalf of the Defendant has accepted that the Claimant has a good cause of action for distress caused by the discovery of the indecent photographs, it is not necessary for me to consider this part of the claim as a separate entity in any detail.
I should note, however, that I am entirely satisfied that a claim under Wilkinson v. Downton as explained in Rhodes is established. This tort of intentional infliction of harm in its reformulation has three elements (a) the conduct element (b) the mental element (c) the consequence element. (Rhodes para 73) I am satisfied that each is established. Mr Whillock acted unjustifiably towards the Claimant by emotionally manipulating her and encouraging her to send indecent images of herself to him and engaging in sexual banter in the texts. His manipulation was successful in that she became infatuated with him and wanted to make him happy. She is still infatuated by him now. The mental element requires the Claimant to establish that Mr Whillock intended to cause severe mental or emotional distress to her. There are however, as was said in Rhodes para 112 actions whose "consequences or potential consequences are so obvious the perpetrator cannot realistically say that those consequences were unintended". It was obvious that the illicit relationship would in the end cause nothing but harm to the vulnerable Claimant some 39 years younger than her groomer and those consequences must have been entirely clear and obvious to Mr Whillock. The consequence element is also established. As I have found under the heading of causation she suffered from an adjustment disorder after the disclosure in January 2010 with an acute exacerbation of her mental health problems when the abuse became public.
The assessment of damages involves considering both the Wilkinson v. Downton element and the assault element as one. I therefore deal with them together.
Quantum
Pain suffering loss of amenity
The Claimant suffered an adjustment disorder with increased anxiety, self harm, social difficulties with her peers and a decrease in her self confidence and self esteem for some ten months. During this time she suffered serious distress, made more than one attempt on her life, injured herself and spent short spells at Priority House. She had to face the embarrassment of the publication of the photographs to many, and experience the hostility of her fellow students who blamed her for the departure of the Third Party. The contemporaneous medical notes indicate serious anxiety and desperate unhappiness in 2010. Her anxiety could involve palpitations, panic attacks and shortness of breath.
The Claimant still, on the evidence of Dr. de Taranto which I accept, suffers from an anxiety disorder and will continue to do so for the next year or the next few years. On the basis of both medical experts she suffers from confusion about her relationships between parent and child due to the emotional manipulation of her by the Third Party. Although she has had short sexual relationships, she has reservations about sex and her relationships with men and remains to some extent infatuated still by Mr Whillock. Her ultimate full recovery will be in part dependent upon whether that relationship continues or ceases.
Neither party has been able to find a comparable case although I have found C v.D [2006] EWHC 166 (QB), and J L v. Archbishop Bowen and ors Manchester County Court March 2015 of some assistance. I have taken account of the seriousness of the breach of trust and emotional manipulation together with the fact that the physical abuse that I have found does not include either oral sex or rape.
Taking into account all the factors set out in the medical evidence, part of the evidence and the documents before me, I assess pain, suffering and loss of amenity in this case at £35,000. Were this to have been a Rhodes case alone I would have assessed the pain, suffering and loss of amenity at £25,000.
Loss of earnings
As a consequence of Mr Whillock's conduct and the consequences for the Claimant, the Defendant offered her a place at the school for another year to enable her to reach her educational potential properly. This year was satisfactory and the Claimant achieved one GCSE at grade C in art and design and other GCSEs. Her employment record since leaving school has been patchy and it has been clear that she suffered from lack of self confidence in dealing with others.
It is submitted on the Claimant's behalf that the extra year at school, whilst successful caused her to lose out on one year of employment and hence earnings as a result of the abuse. This should be calculated as the last year of earnings Mr Levinson submits.
I am, however, not satisfied that the pattern which the Claimant's employment has followed since leaving school has been significantly different to that which it would have been had the abuse not occurred. Her educational attainments after the extra year were probably much the same as they would have been had no abuse occurred. Her family conflicts and difficulties arising from that have always been in part responsible for her difficulties in life. I am not satisfied that the consequences of the abuse have caused a provable loss of earnings since she left school.
There is, however, some force in the claim that in the future she may suffer handicap on the labour market as a result of the emotional manipulation and abuse. Awareness of the true nature of the relationship between her and Mr Whillock when it comes may well be disruptive and it is, on Dr. de Taranto's evidence, at least a year and perhaps several years before the anxiety disorder will diminish to the point where her condition is the same as it would have been if no abuse had occurred. These disruptions and continuing anxiety create a handicap on the labour market for her.
I assess damages for handicap on the labour market at a global figure of £10,000.
Psychological Treatment
I accept Dr. de Taranto's view that psychological treatment would be beneficial even though there is an apprehension that the Claimant would not be prepared to undergo it at present. She did however express a willingness to undergo it in her witness statement and in evidence and I consider it probable that if funds were available she would in the relatively near future seek such help. I award the sum claimed £6,370.
Deputyship Costs
This claim is dependent upon Dr. de Taranto's view that the Claimant does not have capacity to manage any financial settlement arising out of this claim. Dr. de Taranto considers that whilst the Claimant could understand relevant issues and probably retain the information it is doubtful that she could use or weigh the information to make proper decisions. She expressed in evidence concern about the suggestion that the Claimant and her American boyfriend Ed were going to set up a business in Thailand about which the Claimant was eager but ignorant.
Professor Maden took the view that there is no lack of capacity here and that whilst the Claimant might make unwise decisions she could not be said to lack capacity.
I formed my own view of the Claimant observing her in the witness box and I do not consider, having taken into account the medical expert for each party, that this is a case where she lacks capacity. She may make unwise decisions but that does not mean that she lacks capacity. I am satisfied that this is not a case where deputyship costs should be awarded.
Aggravated Damages
These are only to be awarded where the compensation element is not in itself sufficient to properly compensate the Claimant. I do not consider that applies in this case. However bad the breach of trust and the behaviour by Mr Whillock, I believe the compensation I have awarded is sufficient to cover the case properly. This is not an appropriate case for aggravated damages.
I therefore conclude that the total of the Claimant's claim is as follows:
Pain suffering and loss of amenity £35,000
Handicap on the labour market £10,000
Psychological treatment £ 6,370
Total £51,370
Accordingly I award the Claimant damages in that sum. If any further figure in respect of interest arises the parties should calculate that so that it can be included when judgment is handed down.
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MR. JUSTICE GREEN:
A. INTRODUCTION
This matter comes before the High Court today upon an urgent basis. It relates to a hearing due to commence tomorrow. It raises issues of some factual and legal complexity. Given the time constraints it is necessary to give an ex tempore judgment and as such the reasoning cannot be as full as I would otherwise have wished it to be. I have been referred to and have reviewed a good deal of evidence. It is not possible, however, to reflect all of it in this judgment.
This is an application for interim relief to restrain a hearing due to commence tomorrow on 1st October 2015 and set to last two days, at which a panel of independent assessors convened by the Defendant Trust will consider whether the Applicant's employment should be terminated for one or more of the following reasons: first, that there are serious and irremediable shortcomings in the Applicant's professional capability and/or secondly, that there has been an irreparable breakdown in relations between the Applicant and key members of the multi-disciplinary team with whom he would have to work if he were to return to practice within the Trust.
B. STATEMENT OF FACTS
The Applicant is a consultant colorectal and general surgeon employed by the Defendant Trust. The background chronology is complex but for present purposes it suffices to provide the following short summary. From about September 2004 the Applicant was employed as a consultant general surgeon with an interest in colorectal surgery. In July 2010 the medical director of the Defendant Trust sent a letter to the Applicant explaining that the Trust had concerns about complication rates arising from major colorectal surgery performed by the Applicant. The letter referred also to a perceived failure on the Applicant's part to take and accept advice. The letter indicated that the Applicant would be suspended from performing colorectal surgery pending the outcome of an investigation. From 2010 onwards a series of investigations were performed into the capability of the Applicant and as to his relations with colleagues. In respect of the latter issue, namely relationships, the Trust proposes to rely upon a series of pieces of evidence included in reports by, amongst others, Professor Martin Wetherall, Professor Carson, RCS assessors, a GMC report and from a judgment of Mrs. Justice Elizabeth Laing of 2nd February 2015.
In April 2011 the Applicant was subject to exclusion from his practice at the Trust. This was pursuant to the Trust forming the view that the Applicant's professional capability was below that required, and further that relations between him and others with whom he worked had irretrievably broken down. This was varied in March 2015 so that the Applicant could undertake a remedial placement at an external NHS Trust if one could be found. In the event no such Trust has been identified to host such a programme and there has been no internal Trust remediation report. I am told that this was for two reasons, both said to be insuperable. First, it has not been possible to identify an appropriate supervisor to oversee the remediation excercise, and, secondly, it is considered that personal relations between the Applicant and colleagues had fallen to such a low ebb as to be non-reparable.
I have briefly referred to the judgment of Laing J. This arose because the Applicant convened High Court proceedings challenging the legality of his suspension. The trial of this issue occurred in December 2014. The claim failed and judgment was given on 2nd February 2015 and is reported at [2015] EWHC 191. Mediation efforts had failed. In February 2015 the Trust through the appointed case manager informed the Applicant that there would be a reference of the Applicant's capability to a formal capability panel.
The Applicant's employment was subject to written terms and conditions dated 14th September 2004. These include at paragraph 17 provisions relating to disciplinary matters. Paragraph 17 is in the following terms:
"Wherever possible any issues relating to conduct, competence and behaviour should be identified and resolved without recourse to formal procedures. However, should we consider that your conduct or behaviour may be in breach of the Trust's disciplinary policy and dismissal procedures for medical staff or that your professional competence has been called into question we will resolve the matter through our disciplinary or capability procedures subject to the appeal arrangements set out in those procedures."
It is common ground that the procedure laid down in the Department of Health document "Maintaining High Professional Standards in the Modern NHS" applied. I refer to this document as the "MHPS". The terms of reference of the assessment panel which has now been instituted follow in effect two parts. In relation to the issue of capability the Trust is purporting to follow the MHPS. In relation to the issue of relationship breakdown there is a dispute as to whether the Trust has in fact applied the MHPS. Nonetheless, the Trust accepts that whether or not the MHPS applies to the question of breakdown of relationship, it must in all regards act fairly. The MHPS itself sets out detailed procedures including in relation to the detailed pre-hearing preparation of evidence and the affording to an investigated person of a right of response. It also includes detailed appellate procedures described as intended to be "robust", the predominant purpose of which is to ensure that a fair hearing is given at the original stage and that a fair and reasonable decision was reached by the hearing panel: see the MHPS document, paragraph 31.
C. SUMMARY OF APPLICANT'S OBJECTIONS
The basis upon which the Applicant now says that convening this hearing is arguably unlawful is summarised in the Claimant's skeleton in the following way. It is the Claimant's case that the Trust's decision to proceed with the capability hearing constitutes a breach of his contract of employment. In particular the Applicant relies upon the following: (1) an alleged failure on the part of the Trust to conduct any or any adequate investigation as to whether there had actually been a fundamental breakdown of working relationships; (2) the intention on the part of the case manager responsible for decision making on behalf of the Trust in relation to the case in accordance with the MHPS procedures and responsible for the presentation of the Trust's case at the capability hearing, to be absent from that hearing; (3) intention of the Trust to rely in support of its case that the Applicant should be dismissed upon grounds of a fundamental breakdown in working relationships upon conclusions contained within the judgment of Laing J., to which I have already referred.
These three grounds subdivide into a number of more discrete points, but all lead one way or another to a submission that the procedure to be adopted in the assessment hearing will be unfair. I shall elaborate briefly upon each ground before turning to my analysis of the issues arising in the light of the criteria applicable to interim relief.
First, it is submitted by Mr. Sutton QC on behalf of the Applicant that the Trust is using the MHPS procedure for the capability issue but not the relationship breakdown issue. This is it is said in breach of the Applicant's contract, not least because on the Trust's case that the two issues are inextricably intertwined. The Applicant submits that the substance of the Trust's relationship case is based upon facts and matters properly falling within the heading of capability, and therefore the effect of this bifurcated approach is wrongly to sidestep important and fundamental safeguards provided by the MHPS to the Applicant. Next it is said that there has been no prior investigation into the alleged breakdown in relationships. No investigation has ever been performed by any person with formal terms of reference to enquire into that issue. By way of illustration it is said that the prior investigations by Professors Wetherall, Winslett and Carson did not proceed upon the basis of terms of reference addressing relationship breakdown. The GMC investigation equally was not specifically on point. In short, it is submitted that the Trust has never had the intention of conducting an investigation of the sort that is said to be required.
In paragraph 47 of the Applicant's skeleton argument the following is stated which encapsulates the point:
"It is clear that the Trust has no intention of conducting an investigation of the type required. The Trust's intention as set out in the recent correspondence is to trawl back through the historic documentation produced in the course of the five years since Professor Wetherall was first commissioned to start his investigation with the aim of flagging up references which may support the assertion it seeks to advance. There is no intention to (1) undertake any interviews of the current members of the department to ascertain whether they would be willing to work with the Claimant; (2) call any of the relevant staff as witnesses at the capability hearing; (3) investigate the extent to which the current concerns expressed by staff might be met; (4) enquire into the circumstances in which the mediation failed to proceed; and (5) produce a report."
In paragraph 49 of his skeleton the Applicant states and submits:
"A process of cobbling together at the last minute a case based on selective extracts from documents produced over the last five years in the course of investigations of other issues is plainly no substitute for a properly conducted investigation into the current concerns of the doctor's colleagues, and the extent to which those concerns can be addressed."
The next point is that the Applicant submits that the role of a case manager is critical to the assessment process mandated by the MHPS. Under the mandated procedure a person must be appointed to the role of case manager and thereafter that person has defined investigatory functions to perform which include attending and presenting a case before a panel. In particular, the case manager must review the evidence obtained during the prior investigation to reach a conclusion as to what further action should be taken by the Trust. It is submitted that in the present case the case manager is not intending to be present at the hearing. The Applicant has set out in his skeleton argument at paragraph 55 a series of questions which he says ought to be posed to the case manager but in his absence will not be.
Finally, it is said that in relation to the judgment of Laing J. that the Trust's position is confused and inconsistent. It is submitted that reliance upon her judgment is fundamentally unfair, particularly as the judge herself did not, it is said, purport to lay down definitive findings of fact: see paragraphs 89 and 92 of her judgment. It is pointed out in any event that the judgment is subject to appeal.
D. ANALYSIS AND CONCLUSION
I turn now to an assessment of these arguments. Some of the arguments go to whether the Applicant has shown a serious issue to be tried in traditional Cyanamid terms. In applying Cyanamid I have had regard to the case law and the way that it applies to internal employment proceedings. Mr. Cooper has in the course of the hearing today made a number of submissions about the manner in which the courts exercise their discretion to grant or refuse interlocutory relief in circumstances such as these. There was no material dispute between himself and Mr. Sutton as to these principles, and I summarise them as follows.
First, in an employment context there is a power vested in the employer to manage employees, which includes establishing relevant facts and deciding how these facts affect future relations. Even where internal procedures are detailed the purpose of those procedures is to facilitate the employer's managerial power. Where detailed procedures are silent on the matter then the fallback is that it is a managerial discretion for the employer to decide upon in relation to that gap. In this regard see MacMillan [2014] EWCA 1031, paragraph 51 and the judgments cited therein.
Secondly, it is accepted that there are implied terms in the Applicant's contract that neither party will without reasonable and proper cause act in a manner that is calculated or likely to destroy or seriously damage the relationship of trust and confidence and that the defendant will in any event act fairly in the conduct of an internal disciplinary or similar process. It is therefore accepted that implied terms constrain the exercise of the employer's discretion. But it is also submitted that the discretion remains broad: See in this regard Braganza [2015] UK SC 17 at 30 and Yapp [2014] EWCA Civ 1512 at paragraphs 59-61. In those judgments there is reference to the discretion being akin to a Wednesbury rationality test in that an employer may properly be able to exercise a discretion over a range of possible reasonable options.
Thirdly, it is submitted that the court should not engage in micro-management of employment procedures. Illustrations of matters which the courts have treated as micro-management may be found in the judgment of the Court of Appeal in Kulkarni [2009] EWCA Civ 789. In that case the High Court and Court of Appeal refused to interfere in a panel where the issue concerned the alleged wrongful admission of prejudicial evidence; see also Chhabra v West London Mental Health Trust [2013] UKSC 80, at paragraphs 36-40.
Fourth, there is a public interest in allowing internal processes to run their course and courts should be slow to interfere if disputed issues can be sorted out and resolved within the framework of the internal procedure itself. See for example, Makhdum [2012] EWHC 4015 per Beatson J. at paragraph 51 where the judge indicated that it would in effect require serious irregularities before the court would consider interfering. He also intimated (see paragraph 52) that where the parties have agreed upon a process the court should prima facie respect the contractual intention of the parties and allow the process to occur. Similar observations were made by Mann J. in Hendy v MOJ [2014] EWHC 2539 at paragraph 49 and see also Sarker [2015] EWHC 165 to similar effect.
Fifthly, there is a public interest that matters which needs to be taken of a substantive nature, (which would in my view include a decision upon the capability of a practitioner to work within the NHS) should be taken by the mandated expert panel: See by way of illustration Dr A v HTX [2012] EWHC 857 (QB) at paragraph 203.
Finally, I should refer to the decision of Simler J. in Chakrabarti [2014] EWHC 2735 at paragraphs 116 and 160-163 for the proposition that procedures should be applied with flexibility.
With that review of the facts and the law I turn now to my conclusions. I state straightaway that applying these principles to the facts I do not propose to grant the relief sought. I do have a postscript to this however which I will add at the end of my judgment. This is for a number of reasons.
I start my analysis by mentioning one of the Applicant's core complaints, namely that the MHPS does, properly construed, cover relationship issues but that the Trust has failed to apply the mandated procedures to the question of relationships. It is not in my judgment possible to say that the Applicant's arguments on this point are not arguable or serious. I propose to proceed upon the basis that the MHPS might arguably include relationship issues and concerns. I am also conscious of the fact that there is a dispute as towhether if the framework applies the Trust has in any event complied with the MHPS. Mr. Cooper submits that construed flexibly and purposely the Trust has complied. Mr. Sutton says they have not. It is not necessary for the purpose of my judgment to resolve that particular dispute. In my judgment the crux of this matter turns upon broader balance of convenience issues.
My first reason for rejecting the application is that the application is in a sense premature. This is pre-emptive litigation. The Applicant can, should he so wish, raise any points that he likes during the hearing of either a substantive or a procedural nature. If he prevails then that will be the end of the matter. He will have attained the result he seeks. If he fails and is unhappy with the result he can then appeal under the procedures referred to in the MHPS. The assessment procedure is flexible and the Trust points out that it is able to deal with the full range of the Applicant's arguments. It is therefore in my view a relevant consideration that the Applicant has a specialist body prepared to listen to his case and to rule upon it. There is no suggestion that it lacks adequate independence or would be biased or otherwise would be incapable or unwilling to listen to the Applicant's submissions.
This consideration in my judgment also addresses the Applicant's concerns about the judgment of Laing J. Mr. Sutton for the Applicant accepts that the judgment is at the very least admissible. But he rejects any contention that the findings bind the panel or should have any probative weight. He relies upon paragraphs 89 and 92 of the judgment which do indeed provide support for Mr. Sutton's submissions that the judge herself considered that the appropriate place for findings to be made was a panel. As to this Mr. Cooper for the Trust accepts that the findings are not binding upon the panel albeit that it is the Trust's intention to make submissions to the panel about them. If the Trust places over or exaggerated reliance upon the judgment the Applicant may say as much. It will then be for the assessors to consider the judgment carefully and attach such proper weight, if any, to the findings therein as they see fit. It is not open to me to rule in advance as to the weight to be attached to the judgment or findings therein, and I have no way of knowing what approach will be taken by the assessors. If they err their decision can be appealed.
The same point can be made about the criticism that there has been no formal investigation into the breakdown in relations or that the MHPS procedure has improperly been overlooked. In their skeleton argument the Trust at paragraph 11 set out a list of references to reports in which in varying degrees of detail about investigations and enquiries into the Applicant's relations within the trust had been considered. By way of example I cite from paragraph 11.3 which says as follows: "Professor Wetherall sought assistance with his investigation from the RCS. In March 2011 the RCS assessors obtained evidence that many of the Claimant's colleagues believed him to be 'dangerous' and 'arrogant' and found ways to 'bypass him' rather than work with him. They recommended his immediate exclusion, which was subsequently converted into a formal exclusion and has in effect remained in place ever since." In paragraph 11.6 the Trust refers to adverse conclusions formed by the GMC.
There is thus a body of evidence which the Trust proposes to place before the assessment panel. Whether it is accepted however, and if it is what weight and probative value is attached to it, is for the panel. They are better placed to assess that evidence than is the High Court.
And yet again the same point arises in relation to the presence of the case manager, Mr. Neil. The hearing has, I understand, been adjourned on a number of previous occasions. It has proven difficult to get the relevant individuals together. It so happens that on the date now chosen Mr. Neil must give evidence at a coroner's inquest. However it is accepted that he must make himself available either by phone or conference call or Skype or in some other convenient way and in extremis the Trust has indicated that they will extract Mr. Neil from the coroner's inquest so as to make him available for questioning. I do not propose to indicate how the panel might address logistical case management issues arising, but it seems to me it falls within their discretion to act fairly and to make appropriate arrangements to ensure that the Applicant is not prejudiced by the case managers unavailability.
In short, this sort of pre-emptive challenge based upon assertions that the proposed procedure will be unfair must necessarily be unconvincing in the absence of evidence that the procedure that will in practice be adopted is systemically unfair. Given that it is common ground that the panel must act flexibly and fairly, I cannot make that assumption at this stage.
I take account of the fact that in Chhabra v West London Mental Health Trust [2013] UK SC 80 the Supreme Court held that the mere fact that there are or may be irregularities in a procedure will not necessarily be decisive and lead to it being found to be unlawful. Lord Hodge for example, at paragraphs 39 and following, addressed this. In each case it may turn upon the materiality of the irregularity, but as matters presently stand I cannot say that there is an irregularity or that if there is that it will be material. Properly appraised the panel is capable of overcoming prior irregularities and ensuring, as indeed it must, that the Applicant is treated fairly. Mr. Sutton submitted that the court should interfere where an important procedural protection was being denied a practitioner, and he submitted that in this case fundamental procedural protection was going to be denied to his client. In my review of the evidence taken in the round I do not, with respect, share this view.
I turn now to the Applicant's related complaint, that because the MHPS does not apply to relationship breakdowns there will be procedural unfairness. As to this I am far from satisfied that the dispute over whether the MHPS applies is a significant or material issue. It is clear from authority that even if the MHPS does not apply the panel is still under a duty to act fairly. This must mean that evidence will be placed before the assessors to enable them to form their own independent view as to whether relations have broken down. They must assess that evidence objectively and dispassionately. They must arrive at a conclusion having given the Applicant a fair chance to be heard upon that evidence and to put his side of the case. If that occurs I cannot see that the fact that the Trust has, arguably on the Applicant's case, not complied rigorously with the precise requirements of the MHPS to be relevant. It will have caused no material prejudice to him. On my analysis the Applicant will have a fair hearing regardless.
The gravamen of this case is that the Defendant through its assessment panel must act fairly towards the Applicant under all of the heads which are to be disputed and resolved before it. If at the end of the day the Applicant does not prevail and wishes to challenge the panel's conclusion it has a right of appeal. I have already referred to the existence of that and the predominant purpose of the Appellate procedure being to ensure that the first instance panel acted fairly and reasonably.
I turn now to the final issue of timing and delay. In my view an injunction now would in effect place the decision making process into the lap of the High Court. The trial of this matter would not occur, assuming a reasonable tail wind, until 2016. If it was delayed it could even occur as late as 2017 and an appeal thereafter could push the matter into 2018. I accepted the Trust's submission that it must grapple with this dispute sooner rather than later. I considered that it is in the public interest in relation to the workings of a body as important as the NHS that issues surrounding the status of senior professionals be resolved as speedily as is possible. Granting relief could thus thwart justice and increase uncertainty for the Applicant and for the Trust. Complaint is already made by the Applicant as to the length of time that the investigation has already taken. I am also confident that granting relief would very substantially increase the costs for, as I see it, no good reason. The assessment by independent assessors from within the Trust is the route considered best suited to resolve these disputes. Transferring that task to the High Court would not in my view demonstrably improve the efficiency of the decision making process.
For all of these reasons I decline to grant the relief sought.
E. POSTCRIPT
I would add one matter by way of postscript. In the course of argument Mr. Sutton for the Applicant advanced a serious case to the effect that the procedure adopted was in a number of respects unusual or irregular as he put it. I have not formed any definitive view on this matter. Nonetheless it seems to me critical that the panel is acutely conscious of the need to be vigilant to ensure that the Applicant's right to a fair hearing is protected. The Applicant must know clearly what the Trust's case is against him on all relevant matters, including relationship matters. I am told that the panel has the ability to adjourn. It will be for the panel to decide if and how to use its powers of adjournment if it considers that the Trust has not acted fairly towards the Applicant or given him a fair opportunity to prepare his case. In considering its duty to act fairly the panel will no doubt have regard in all respects to the MHPS, even if it is of the view that strictly it does not apply. This is because the MHPS is intended to apply a test of fairness in the professional NHS setting, and it provides valuable guidance as to how fairness may be achieved.
I emphasise this particular point because of paragraphs 45 and 46 of Professor Wetherall's second witness statement which concerned the issue of a complaint made by the Applicant about various nurses. It is not necessary to go into the details of that matter at this stage. The matters raised in those paragraphs are in an unparticularised form, though I accept these were matters litigated before Laing J. But I would be concerned if the panel permitted this sort of evidence to lead it into satellite litigation which detracted from the core issues which are before it. Of course at the end of the day it will be for the panel to form its own view on all of these matters.
For all the reasons that I have given this application does not succeed.
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Mr Justice Blair :
This is a claim by Mr David Barrett, who is now aged 37, for damages for personal injuries suffered as a result of the alleged clinical negligence of staff at the Birmingham & Midland Eye Centre (BMEC) where he was being treated. The defendant is an NHS Trust which is vicariously liable for any negligence on the part of the staff. The claimant's case is that that he has been rendered effectively blind as a result of the negligent treatment which he received at BMEC in October 2008.
Among other issues, a central issue at trial has been whether (as the claimant says) surgery should have been carried out to relieve excessive post-operative intraocular pressure in the claimant's left eye within 24 hours of the beginning of medical treatment, or whether (as the defendant says) the condition was appropriately continued to be managed medically.
The defendant's case is that there was no negligence on the part of its staff. There is also a causation issue, since the defendant asserts that the claimant, who was suffering from diabetic eye disease, would have lost useful vision in any event. If liability is established, there is a dispute as to quantum of damages, the claimant claiming damages totalling just over £1.3 million, as against subject to causation £165,506 in the defendant's counter-schedule (the figure narrowed by the end of the trial).
The proceedings
Proceedings were commenced in the Birmingham County Court in March 2012, and later transferred to the High Court. The parties' respective cases are set out in the pleadings (and there have been issues between them as to whether matters in dispute have been properly pleaded which are referred to as necessary below).
At the court's request, before the beginning of the trial the parties agreed a list of issues. Each side made oral and written submissions in opening and closing. Following closing, at the court's request the parties provided further written submissions relating to advice which the claimant says should have been, but was not, given. I have taken all the points that have been made into account (including any not expressly mentioned below).
The court heard oral testimony from the following witnesses of fact called on behalf of the claimant:
1. Mr David Barrett, the claimant;
2. Mr Lee Garbett, director of claimant's employer from about 2006 to September 2008;
3. Mr Neil Jacobs, a Contracts Manager from the claimant's employer between 2000 and 2004;
4. Mrs Susan Barrett, the claimant's mother;
5. Ms Michelle Barrett, the claimant's sister;
6. Mr Dean Woodward, the claimant's cousin;
7. Mr Mark Benson, Consultant Ophthalmic Surgeon now in private practice.
The court heard oral testimony from the following witnesses of fact called on behalf of the defendant, all being consultants at Birmingham & Midland Eye Centre:
8. Professor Robert Scott, Consultant Ophthalmologist and Vitreoretinal Surgeon;
9. Professor Philip Murray, Consultant Ophthalmic Surgeon;
10. Mr Ash Sharma, Consultant Ophthalmic Surgeon specialising in vitreoretinal surgery and diabetic eye disease.
Each of these witnesses gave his or her evidence well, and their evidence is referred to as necessary below.
It is appropriate to say something more at this stage about the claimant. That he enjoys dedicated support from his family and friends has much to do with the warmth of his own personality, being described by the defendant's care expert, Mr Tom Boyd-Smith, as a "smashing lad". To cope as well as he has over the last seven years with increasing blindness has been a personal achievement.
It is also appropriate to say something more about Mr Benson. As was pointed out on behalf of the claimant, in a clinical negligence trial it is unusual to have one of the clinicians directly involved give evidence for the claimant. It was suggested on behalf of the defendant at one point that he might be less than impartial since he carried out the surgery on the claimant at the material time. However, there is no complaint about his surgery though in the event it was not successful in restoring sight to the claimant's left eye. Though there were unfortunate errors in his witness statement (which he candidly accepted was drafted by the claimant's lawyers), I found him overall to be a good witness who did his best to assist the court.
The parties' medical experts were as follows: for the claimant, Mr Dominic McHugh. He has been Consultant Ophthalmologist at King's College Hospital, London, since 1994. He performs several hundred vitreoretinal procedures each year, of which a significant proportion are for patients with diabetes.
For the defendant, Mr Martin Snead. He was appointed as Consultant Opthalmic and Vitreoretinal Surgeon at Cambridge University NHS Foundation Trust (Addenbrooke's Hospital) in 1996, and specialises in dealing with all aspects of vitreoretinal disorders.
There is a fundamental difference in opinion between these two distinguished ophthalmologists. In short, Mr McHugh considers that the loss of vision in the claimant's left eye was caused by damage to the optic nerve resulting from excessive pressure following his vitrectomy a few days earlier. He is of the opinion that this should have been relieved by surgery within a 24 hour period. Mr Snead, on the other hand, is of the view that the pressure was appropriately managed medically, and while it may have had some minimal effect on the claimant's already significantly constricted and damaged peripheral visual field, it would have had no effect on his central vision which was lost through the effects of his proliferative diabetic retinopathy and the retinal detachment at the macula (an area near the centre of the retina of the eye).
These differences of opinion are central to the case, and each party has extensively criticised the other's expert. It is not necessary to set out these criticisms in detail. Some of the points raised amount to a disagreement with the expert's opinion, and are considered further below.
Despite the criticisms made by the parties, I consider that both experts are highly qualified in the field in which they have given their opinion. It is correct, as the defendant says, that Mr McHugh only refers to his "main sub-specialist interest" being "in the medical and surgical management of diabetic retinopathy" in his second, but not in his first, report (prepared in 2012 and 2014 respectively). On the other hand, in oral evidence he explained that he sees an increasing number of diabetic cases from the ethnic communities in South London which Kings College Hospital serves.
It is correct, as the claimant points out, that only one of the many articles and other pieces written by Mr Snead expressly refers in its title to diabetes. However, in his oral evidence, he explained that he sees around 30-40 young patients a year who are in the worst category of proliferative diabetic retinopathy, like the claimant.
Nevertheless, the parties are in agreement that the court must express a preference as between these two experts. My views in this respect are as follows.
Mr McHugh was particularly good at explaining the functions of the eye to the court, with helpful diagrams. He is a very experienced surgeon, and has a research interest in the use of lasers, the effect of which was an issue which arose in the course of the evidence.
Both experts cited literature in support of their opinions. In that regard, the claimant criticises Mr Snead for the fact that five new items of medical literature were included in materials supplied by the defendant within the 30 day period prior to trial allowed in the rules. However, there was no suggestion that Mr McHugh was not able to properly deal with this material, and he accepted that he was. The claimant's real criticism was on grounds of relevance. Broadly, my view is that both experts referred appropriately to the literature, and though it does give context to some of the issues for decision, little turns on its precise content.
As to context, it is a fair reading of the literature that in the great majority of cases, raised intraocular pressure following an operation (as happened in this case) does not need to be dealt with surgically. On the other hand, as Mr McHugh pointed out, the question is whether the claimant's case falls within the band of exceptions, and if so, when surgery was indicated.
Further, the defendant emphasises that Mr McHugh has not been able to point to any literature which supports his opinion that medical management of elevated intraocular pressure of 40mmHG and over should be pursued for no more than 24 hours before surgery becomes mandatory.
Having observed both witnesses testify, and studied their reports, my on-balance preference is for the testimony of Mr Snead. He has a particularly impressive C.V., and is undoubtedly a leading figure in the field of ophthalmology, including the vitreoretinal field. I consider that, on balance, particularly in his oral evidence he took better account of the undoubted complexities in this case than Mr McHugh, and was less partisan. He demonstrated his independence in his oral testimony by a concession that it was "regrettable" that the option of surgery was not discussed with the claimant. The claimant has placed emphasis on this concession in his closing submissions. Having expressed this preference, however, I make clear that is on balance, and it remains for the court to weigh their evidence on the particular issues where they differ.
Turning to the experts on the damages issues, the claimant's care expert was Ms Helen Street, and the defendant's care expert was Mr Tom Boyd-Smith. The claimant suggested that Mr Boyd-Smith lacked the necessary expertise, since he is not an expert in the provision of care. However, he is an expert in the particular living problems faced by those with visual impairment, having done extensive work with the RNIB. Ms Street, on the other hand, though an expert in the subject of care programmes, has no particular expertise in the field of visual impairment. I consider that the evidence of each of them was of assistance in relation to the quantum issues.
Agreement was reached as to life expectancy, and the parties concluded that it would be disproportionate to call the expert diabetologists to give oral evidence. The report of Dr HJ Bodansky for the claimant and Dr Anthony Robinson for the defendant form part of the material before the court.
The facts
This case has an extensive background, and it is not necessary (or feasible) to include all the facts, or all the details of the medical evidence factual and expert, which I have however taken into account. The facts as I find them are as follows.
The background history
The claimant was born in 1978, and at the age of 10 was diagnosed as suffering from insulin dependent diabetes.
After he left school, he worked as an electrician, and witnesses testify as to his good work ethic. He was clearly also a sociable and popular individual.
In 2000, bilateral background diabetic retinopathy was noted. Diabetic retinopathy occurs when high sugar levels damage the retina and is potentially a serious condition.
Over the next few years, the claimant's condition appears to have deteriorated. There are references in the material to poor diabetic control, and also to the claimant smoking, both of which can aggravate the condition.
At this time, as for some 8 or 9 years afterwards, the claimant was being treated under the supervision of Mr Benson. A letter from his department was the subject of considerable discussion at trial.
On 21 May 2004, Mr Benson's then SHO (Senior House Officer) wrote to the claimant's GP. She recorded that, "This gentleman was quite frustrated as his vision is quite poor and he is at the moment not able to do his job as an electrician". Poor visual acuity is recorded, though as was pointed out on the claimant's behalf at trial, this was tested on an unaided basis, apparently because the claimant did not bring his long distance glasses. With his glasses, his vision at that time was near normal.
The claimant submits that when viewed against the rest of the evidence, this letter must be a mistake, and criticises Mr Snead for his interpretation of it. The claimant himself says he had no such problems at the time.
On the other hand, it is difficult to see where this information could have come from, if not from the claimant. I would be inclined to accept that the SHO recorded what she was in fact told. But it is not determinative, and I need make no finding.
Perhaps more significantly, the SHO records that she discussed the case with Mr Benson who suggested that the claimant should have a fluorescein angiogram. In July 2004, that showed bilateral macular ischaemia (lack of blood to the sensitive macular portion of the retina) and the suggestion of peripheral nerve vessel formation on the left. The diagnosis at the time was pre-proliferative diabetic retinopathy in both eyes.
Monitoring now became particularly important, but it seems that over the next two years there were episodes of non-attendance by the claimant at clinic appointments, and he was next seen in clinic in October 2006. Laser treatment began about this time. Mr Snead gives considerable significance to this, considering that earlier laser treatment would have substantially reduced the risks of the complications that later occurred. I need make no findings in this respect.
The operation on 14 October 2008
The claimant's deterioration is shown by a letter sent by Mr Benson to the claimant's GP following a clinic attendance on 3 December 2007. Mr Benson says he was "concerned that this gentleman has very aggressive proliferative retinopathy". The letter goes on to discuss the fact that he found laser treatment uncomfortable and that Mr Benson had arranged to carry out bilateral indirect laser treatment under general anaesthetic. This was carried out at BMEC in December 2007. The evidence is that the claimant received unusually extensive laser treatment over this period, and there was an issue as to whether this could cause damage to the retina, which I need not resolve.
On 29 September 2008, the claimant was examined by Mr Benson. He complained of blurred vision, which was getting worse. Mr Benson diagnosed "aggressive neovascular disease" and planned a vitrectomy on his left eye and indirect laser treatment on his right eye. Mr Benson's notes state that he told the claimant that there was a "very guarded prognosis". Mr Benson explained in evidence that he wanted his patient to be aware that there were no promises the operation would be successful.
It was, as Mr Benson put it, a big and complex operation. It took place on 14 October 2008, when he performed a left vitrectomy, delamination of the membranes, endolaser photocoagulation, and a gas injection, together with right indirect laser photocoagulation. In fact, the "gas", used as the tamponade was air.
When Mr Benson reviewed the claimant on 15 October 2008, the following day, his visual acuities were recorded as 6/30 on the right, and perception of light on the left. On the left eye, a hyphaema, that is the presence of blood in the anterior chamber at the front of the eye, was present. This however was not in itself unusual following such an operation. The intraocular pressure (IOP) was 20mmHg, which is normal. For convenience, I will refer to the IOP from now on as is done in the medical notes simply by reference to the number.
The claimant's condition did not give rise to concerns, and he was discharged. An appointment was made for him to see Mr Benson in two weeks time, that is on Monday, 27 October 2008.
To put matters into context, it is unfortunately correct to say that since this operation on 14 October 2008, the claimant has effectively had no useful vision in his left eye.
The period 23 to 26 October 2008
The critical time period in this case is relatively short, namely 23 to 27 October 2008. It is convenient to split it down, starting with the period from Thursday, 23 October to Sunday, 26 October. Mr Benson was on holiday at this time, which coincided with school half term.
The claimant describes how he had some slight discomfort in his left eye on 22 October, but by the evening he was in excruciating pain. On 23 October 2008, he attended the ophthalmic accident and emergency department at BMEC.
What happened over the next five days is central to this case. In this regard, the court has seen the medical records, and has heard factual evidence from the three senior clinicians at BMEC who were involved in the claimant's treatment, as well as from Mr Benson who returned to work on 27 October when he saw the claimant, and decided to operate the following day.
The notes show that when examined at 10:30 am on 23 October 2008, although the IOP was normal in the right eye (at 18) it was found to be elevated in the left eye at 40. Without drawing precise distinctions, it is common ground that an IOP of 40 is high and requires active management to protect the eye. The notes record hyphaema of 4mm. The significance of this is that following the operation the blood had not cleared by itself.
These measurements are important, and to explain how they developed over this period there is annexed to this judgment a table prepared on behalf of the claimant for closing submissions. The connection between IOP and hyphaema is that a hyphaema can cause a rise in pressure—as Mr McHugh explains in his report, red blood cells cause obstruction to acqueous outflow through the drainage angle so that pressure builds up.
The treatment plan was discussed with Professor Robert Scott, a consultant ophthalmologist at BMEC and specialist vitreosurgeon with a clinical interest in diabetic eye disease. He advised treatment with oral Diamox and Lopidine drops. The medical notes show that it was known that the claimant was due to see Mr Benson on Monday.
It is not in dispute that this was an appropriate course of treatment, and to the extent that it was challenged, I accept Professor Scott's evidence. He said that an intraocular pressure of 40 is "moderately high" and requires active medical management but would not be a case requiring immediate surgical management. The course of action he decided on was to try to bring down and manage the pressure until the claimant could see his treating consultant on Monday who could make any decisions about further intervention if required.
In fact, the left eye IOP did reduce to 35 that evening, although Professor Scott cannot recall whether the junior doctor had updated him on this or not.
Professor Scott also said that high IOP requires appropriate and speedy management. He said that "as a rule of thumb, the patient can be discharged if pressure is between 20 and 30, between 30 and 40 you have to watch a bit carefully, and at 40 you need active management". He also said that after a vitrectomy the red blood cells generally clear after a time.
The claimant says that he was told to return the next morning, which he did. It was found that the hyphaema was now 3.2mm, and the pressure in his left eye had now risen to 46.
I infer that this gave considerable cause for concern, because at 11 am that morning, the claimant was examined by Mr Ash Sharma, a consultant ophthalmic surgeon at BMEC specialising in vitreoretinal surgery and eye disease. The claimant's allegations of negligence are principally focused on the course taken by Mr Sharma at this time.
Mr Sharma admitted the claimant for IOP control. He did this by addressing the pressure medically, that is through drug treatment. This included oral Diamox plus topical hypotensives. He also prescribed intravenous Mannitol, which had not been part of the treatment up until that time. The evidence is that this is a powerful drug which decreases vitreous volume. Partly because of the side-effects, this drug is short-term rather than long-term treatment. Mr Sharma's notes record that the claimant is to see Mr Benson at Solihull on Monday.
Mr Sharma also arranged for a B-scan (an ultrasound scan) to be carried out. The scan was carried out by a specialist described as a visual scientist, the evidence at trial being that he was qualified to interpret the scan. Although the pre-trial material consisted of a photocopy, the original snapshot was produced at trial. The evidence was that the specialist actually taking it would have seen something more like a video. Among the notes he made, was reference to a possible choroidal haemorrhage in the claimant's left eye.
Mr Sharma reviewed the scan. He said that the suspected choroidal haemorrhage pointed to a diagnosis of suprachoroidal haemorrhage. He considered that this increased the complications of surgery. I am satisfied that he held this belief at the time, and make further findings as to whether this was right later in this judgment.
The notes are to the effect that the treatment plan was discussed with Ms Stavrou, who is also a consultant ophthalmic surgeon (she did not give evidence at trial).
The defendant's case is that Mr Sharma acted perfectly properly. The claimant on the other hand submits that Mr Sharma missed the opportunity at 11:00 am or soon afterwards to arrange for surgery which by then had become mandatory, because 24 hours had passed since medical treatment of the elevated pressure had commenced, and the pressure remained unacceptably high. It is common ground that the claimant would have needed to fast for six hours before surgery.
At 5.40 pm, the IOP was down to 38, but at 8:45 pm, it was up again at 44. The medical notes show a discussion with a specialist registrar, the upshot being that there was nothing further to be done that night.
On 25 October 2008, which was a Saturday, the claimant's left IOP is recorded as 48 at 11:30 am, and the hyphaema at 3.3mm.
At 15:10 that afternoon, the IOP was recorded at 45, the hyphaema still being 3.3mm at this time.
At that point, the case was discussed with Professor Murray, Professor of Ophthalmology, though not himself a vitreoretinal specialist. He was, however, consultant on call at this time. The claimant submits that his advice must have been sought because of concern about the high intraocular pressure. I agree with this submission.
The claimant's case is that Professor Murray did not consider surgery, and was wrong not to have done so. The claimant's case is that the situation was very urgent, and required the immediate consideration of urgent surgery. In his evidence, Professor Murray says that he would have considered surgery, which raises a factual issue which is determined below.
At 19:00, the hyphaema is recorded as 3mm and the left IOP as 47. This was the highest the IOP had reached up to that time.
At 09:50 on the morning of Sunday 26 October 2008, the IOP in the claimant's left eye was 49, and the medical notes record "full hyphaema".
At 10:45, the specialist registrar called Mr Sharma, who it so happened was the consultant on call because he was covering that day for Professor Murray. Mr Sharma advised further intravenous Mannitol and added oral glycerol, which had not at that point been included in the medication.
The claimant's pressure was measured later in the day, though there is not a time stamp. The notes say "review this evening", which the claimant says (probably rightly) suggests it was prior to the evening. At that time pressure was 36, and the hyphaema 1.7mm. The notes read, "IOP settling". Mr Sharma says this shows that the treatment he recommended proved effective. The claimant says that it reflects the short term effect of the powerful medication.
27 October 2008 and the operation on 28 October 2008
27 October 2008 was a Monday. There is an entry for "7:30 am" with the date "26/10/08" written in above it. Despite Mr McHugh's evidence that the "a" could be a "p" and so be referable to the previous evening, I am satisfied that "26" has been written in error. I find that this entry refers to Monday morning at 7:30 am. It records the IOP as 34 and 36, and the hyphaema as 1.75mm-1.50mm.
In cross-examination, Mr Benson accepted that the pressure appeared to be improving, and whilst reluctant to be drawn into using the word "reassuring", he did in substance accept that it was.
However, unfortunately this improvement did not continue. The notes for 13.10 pm record that the claimant still had a painful left eye. The evidence of the claimant and his mother, which I accept, is that he was worried about his condition, and whether he could make his appointment with Mr Benson that afternoon.
In fact, when his pressure was recorded as at 13:10, it had risen steeply to 52 in his left eye, with the hyphaema at 3mm.
There is a significant dispute between the parties in this respect. Mr Snead's opinion was that the large rise in the IOP and the size of the hyphaema is explained by a re-bleed. In oral evidence, he described it as a serious possibility. It was the presence of the re-bleed, he said, that tipped the balance to surgery, and but for that he would have continued with medical treatment.
Mr McHugh was unwilling to accept that a re-bleed was a possible explanation, and the claimant's case is that there was in fact no re-bleed or that it was irrelevant because it was the fact of the hyphaema which was of importance.
However although it was submitted for the claimant that Mr Snead was "on his own" in this respect, the three BMEC surgeons did not see the claimant on Monday, and which may explain why they did not deal with this issue. Mr Benson did accept a re-bleed as a possible cause. He did not himself identify the source of the bleeding in the eye, and his notes of the operation on 28 October do not identify the cause. In so far as I have to make a finding, on balance I consider Mr Snead's explanation as best fitting the facts as known. I consider that this is relevant over and above the fact of the hyphaema, because it is consistent with the pressure reducing by Monday, with the implication that medical treatment was working, and then again sharply elevating due to an extraneous cause.
The claimant's mother arranged for his sister to take him to the Solihull Hospital Eye Clinic, where Mr Benson is based. The nursing staff gave him his medical notes, and told him not to remove his hospital wristband, because he would have to return to the ward once he had seen Mr Benson. It is clear from their evidence that the claimant and his mother feel that more should have been done by BMEC to contact Mr Benson, but this does not affect the matters I have to decide.
Mr Benson saw the claimant at 16:04 that afternoon. The claimant's case is that, perturbed by the delay in treatment, Mr Benson "held his head in his hands". He does not have a precise recollection of the consultation, though his witness statement says that this would have perfectly reflected his mood upon realising that the claimant had not been operated upon. He says that had it been him, he would have operated after 24 hours of medical treatment if the pressure was not alleviated, and this is the claimant's case.
Mr Benson recorded the pressure in the claimant's left eye as 56, which was the highest it ever reached. He noted that hyphaema was present, but did not measure it. He prescribed further intravenous Mannitol, and planned a left vitrectomy the following day.
The operation took place at BMEC the following morning. Mr Benson explained in his oral evidence that it was in effect the same operation that he had carried out on 14 October 2008. Although there was air and oil in the front of the eye where it should not have been, the operation was successful in the sense that when the IOP was measured on 29 October 2008, IOP was now within normal limits at 20. However, visual acuity remained as perception of light, which unfortunately remains the position.
End 2008 to 2009
On 17 December 2008, Mr Benson noted some localised tractional retinal detachment in the left eye, and considered that it might be possible to obtain some visual improvement by dealing with this operatively.
This operation took place on 21 January 2009, Mr Benson noting that it was to deal with an aggressive retinal membrane resulting from diabetic eye disease. He records that the procedure went well technically, with normal intraocular pressure and an attached retina. However, he also records that the central retina was in very poor shape despite being attached, which he thought was the result of severe ischemia. As a result, the visual prognosis for the left eye was very poor. However, he says that the right eye was now "behaving well with good control of the neovascular disease. Clearly this needs to be watched closely".
The claimant's right eye
The material before the court shows that from about 2009 it was realised that little more could be done for the left eye, and attention shifted to the claimant's right eye, through which he still had reasonably good vision. However unfortunately, this did not last.
On 21 July 2009, Mr Benson referred the claimant to Mr Zdenek Gregor, consultant vitreoretinal surgeon at Moorfields Eye Hospital in London. Mr Benson explained that over the past two years, the claimant had developed a very aggressive proliferative retinopathy. The vision in the right eye had improved, but there was some fibrosis in the macular area.
Mr Gregor's opinion is recorded in a letter dated 21 October 2009. The position at that time was stable, and Mr Gregor said that whilst surgery may become indicated, the claimant was naturally not at all keen on any surgery at this point. Mr Gregor reinforced Mr Benson's advice not to operate on the right eye at this point.
It appears that in April 2010, the claimant experienced a sudden drop in the vision in his right eye, though this did settle.
In about April 2011, he had a vitreous haemorrhage in his right eye, which was however clearing. He appears to have had a further haemorrhage in November 2011, but again this was not serious.
However, by 16 October 2012, Mr Benson's Staff Grade assistant referred the claimant to BMEC to consider "delamination procedure for this patient who has extremely poor vision in his only good eye".
In April 2013, Mr Benson referred the claimant to Mr Stephen Charles, consultant ophthalmologist and vitreosurgeon at Manchester Royal Eye Hospital (by now Mr Gregor had retired). In a letter, Mr Charles refers to a frank discussion with the claimant and his parents to the effect that vitreoretinal surgery was not without risk, including blindness, and also had a guarded prognosis due to the long standing maculoschisis. However, surgery was indicated and he reports that the claimant accepted the risks and was keen to proceed.
That operation took place on 15 May 2013. Whilst the material before the court shows that the claimant was satisfied with the operation, in terms of improved vision it was only of limited success.
Overall, the experts agree that he has now lost 90% of his vision, with a 25% chance of loss of all functional vision over the next ten years. It is agreed that he now lacks almost completely the capacity for fully independent living and requires a high degree of support.
The issues on liability and causation
At the beginning of the trial, the following issues on breach of duty and causation were identified and agreed by the parties for determination by the court:
(1) Should the defendant have operated on the claimant's left eye between 24.10.08 and 27.10.08? Put another way, given the knowledge that the claimant was scheduled to see his surgeon, Mr Benson, for review on 27.10.08, was it reasonable to pursue medical management of the claimant's elevated left intraocular pressure between those dates?
(2) Should the defendant have advised the claimant between 24.10.08 and 27.10.08 that he urgently required alternative treatment, in particular surgical management? It was made clear in oral opening on behalf of the claimant that this issue includes advising about the possibility of surgery.
(3) If the defendant should have operated on the claimant's left eye, by when at the latest was it mandatory to operate?
(4) What contribution, if any, did the alleged negligent delay in left eye surgery between 24.10.08 and 28.10.08 make to the claimant's loss of vision in the left eye following the left vitrectomy of 14.10.08?
(5) What would the claimant's visual acuity in the left eye have been with earlier surgery?
(6) Would the claimant have gone on to lose useful vision in his left eye in any event as a result of his retinal detachment? If so, by when?
(7) Would the retinal detachment in the left eye have been capable of repair in the absence of the alleged negligence? If so, what would the claimant's visual acuity in the left eye ultimately have been?
(8) Did the loss of useful vision in the left eye affect the prognosis for the claimant's right eye, whether directly or indirectly (e.g. by causing ophthalmic surgeons to be more reluctant in proceeding to vitrectomy in the right eye)?
(9) Had earlier vitrectomy (from 2009 onwards) been performed in the right eye, what would the claimant's visual acuity in the right eye have been?
(10) In the absence of the alleged negligence, how much greater (than now) would the claimant's practical visual capabilities have been in terms of:
(a) Driving
(b) Reading
(c) Watching TV
(d) Self-care
(e) Meal and hot drink preparation
(f) DIY, Decorating & Gardening
(f) Work
(g) Going on holiday independently
(h) Crossing roads
This issue is dealt with under the heading of quantum.
The parties' contentions on liability and causation
The claimant's contentions on liability and causation
The claimant's case is that the initial management of the elevated IOP on 23 October 2008 was appropriately undertaken by attempting medical therapy. However, that should have been for a maximum period of 24 hours before urgent surgical management was required. Given the claimant's pre-existing diabetic retinopathy, there would have been the risk of permanent optic damage arising after only a few hours. Although the claimant suffered a subsequent retinal detachment on the left side, had there been appropriate earlier management of the eye, that would have been capable of being treated successfully. The final visual acuity in the left eye would have been an estimated 6/24 to 6/60.
Further, as a result of the severe impairment in vision in the left eye, it was considered appropriate in 2011 not to proceed to operative treatment on the right side. It was only as the right side deteriorated that it was operated on in 2013. Accordingly, mismanagement of the claimant by the defendant has set in play a cascade of events which has ultimately resulted in the claimant being rendered effectively blind.
In closing, the claimant naturally emphasised the effect of Mr Snead's "concession". At no point between 23 and 27 October 2008 was the claimant told of any possibility of having urgent surgery to his left eye. Had he been told of the possibility of having urgent surgery, he would have wished to undergo the same. The defendant was obliged to inform and advise him of the option of urgent surgery dispassionately and benefiting the benefits and risks – there was a total failure to do so.
If negligence had not occurred, the claimant would have expected to return to work in around 3 months. Although he could not have worked as an electrician, he could have used his experience, and obtained work as a "non-working foreman" in the electrical field, supervisory work with an electrical contractor, or other appropriate work.
In summary, on the basis of the evidence of Mr Benson and Mr McHugh, with the claimant presenting as he did with his diabetic eye condition and the vitrectomy recently undertaken, his case is that it was mandatory to perform urgent surgery after a maximum of 24 hours and no other course was reasonable. The defendant's position is unsustainable as even on its own case, neither Mr Sharma nor anyone else discussed the option of urgent operative treatment with the claimant.
The claimant accepts that absent the negligence, there would have been an element of deterioration in his vision, however he would have had significantly better vision. In the left eye he would have had visual acuities in the range between 6/24 and 6/60, and in the right eye 6/38 and 6/60. More importantly, the claimant would have been able to lead a fully independent life style.
If it is Mr Snead's position that the high IOP did make a material contribution to the claimant's visual loss, but he is unable to quantify that contribution, then following Bailey v Ministry of Defence [2008] EWCA Civ 883, it is submitted that the claimant is entitled to claim for the entirety of the damage to the left eye, irrespective of whether the causes are of a result of negligence or otherwise.
Accordingly, the claimant invites the court to make the following findings:
(1) The defendant was in breach of duty in that it failed after a maximum period of 24 hours after instituting medical therapy in respect of raised intraocular pressure on the left side on 23rd October 2008 to urgently consider and proceed to surgical management. This should have happened from around 11.00 hours on 24th October 2008. If that had been done, there would have been urgent surgery undertaken by the afternoon of 24th October 2008 or, alternatively, at the latest late on 24th October 2008 or very early on 25th October 2008.
(2) From around 11.00 hours on 24th October 2008 to the time that the claimant was seen by Mr Benson at around 16.04 hours on Monday, 27th October 2008 at Solihull Hospital there was a continuing failure on the part of the defendant to consider and proceed to urgent surgical treatment of the left eye.
(3) From around 11.00 hours on 24th October 2008, the defendant should have ensured that the claimant was advised that he required urgent surgical treatment to his left eye.
(4) Further and in the alternative, from around 11.00 hours on 24th October 2008 [the defendant] should have advised the claimant that there were two options for the treatment of the intraocular pressure of the left eye. The benefits and risks of, in particular, the urgent operative treatment, should have been discussed with the claimant. If that had been done appropriately then the claimant would have chosen to have had urgent surgical treatment which would have been undertaken by the afternoon of 24th October 2008 and, in any event, by late 24th October 2008 or early 25th October 2008.
(5) From around 1100 hours on 24th October 2008 to the time that the claimant was seen by Mr Benson at around 1604 hours on Monday, 27th October 2008 at Solihull Hospital there was a continuing failure on the part of the defendant to advise the claimant as (4) above.
(6) If appropriate urgent surgical treatment had been undertaken then the claimant would not have suffered profound visual loss in the left eye and the urgent operative treatment undertaken by Mr Benson would have been less complex and would have required less delamination of the pre-retinal membranes which would have been likely to have progressed during the period of delay in undertaking urgent operative treatment.
(7) If the left eye had been appropriately managed then there would have been urgent surgery and earlier treatment undertaken of the right eye; such urgent treatment would have been around mid-2009 and would have been undertaken probably by Mr Benson or another vitreoretinal specialist.
(8) If the left eye had have been treated appropriately and [there had been] earlier treatment of the right eye, the range of visual acuity in the left eye would have been between 6/24 and 6/60 and in the right 6/38 and 6/60. There would have been a 25% chance of some further visual impairment during the claimant's life. The claimant would have been able to lead a fully independent life. He would have needed to have taken care in performing potentially hazardous activities such as negotiating stairs, crossing streets and pouring hot drinks but would have been able to undertake them. He would not have been able to return to work as an electrician but would have been able to undertake work which was clerical or supervisory or managerial in nature.
(9) If it is the case in the alternative that damage to the left eye cannot be apportioned, there has been a "material contribution" of damage to the left eye which is not capable of being apportioned by reason of the state of medical science and in those circumstances the claimant is entitled to claim for the entirety of the damage to the left eye. On this basis there are the same findings as to the right eye as set out above.
The defendant's contentions on liability and causation
The defendant's case on liability and causation is as follows. It was reasonable prospectively for Mr Sharma at 11:00 on 24 October 2008 to manage the claimant's elevated IOP and hyphaema as an inpatient with medical therapy. Given the way the case has been pleaded and argued, on that basis the claim must be dismissed.
There is no medical basis for Mr McHugh's opinion that medical management of elevated IOP of 40 and over should be pursued for no more than 24 hours before surgery becomes mandatory. Mr McHugh's evidence is not supported by that of Mr Benson, who did not say that no responsible body of ophthalmic surgeons would have continued to treat the patient with medical therapy during the period of 24-27 October 2008.
Professor Scott, Professor Murray, and Mr Sharma amply justified their decision making over the relevant period, and constitute a responsible body of ophthalmological opinion.
Whilst Mr Snead accepted that it was "regrettable" that the option of surgery had not been discussed with the claimant on 24 October 2008, on the key issue, that of reasonableness of medical management between 24 and 27 October 2008, Mr Snead was clear that this was reasonable in all the circumstances. He considered that the raised pressure on 27 October 2008 was caused by a re-bleed, and but for that, he personally would have pursued medical management for longer still.
In any case, the key factor is that neither Mr Sharma nor Mr Snead would have recommended that the claimant undergo surgery. As the claimant accepted, he would have accepted the recommendation of the specialists who were treating him in hospital.
If contrary to the above, the defendant should have operated on the claimant's left eye, it would not have been realistic in all the circumstances of this case at BMEC in 2008 to have expected complex and difficult vitreoretinal surgery to have been performed before Monday morning at the earliest. But by 07:30 on Monday morning, both the IOP and the hyphaema were relatively reassuring. Further, although the period of raised IOP may have had some minimal effect on the claimant's already significantly restricted and laser damaged peripheral visual field, this would have had no effect on his central vision which was lost through the effects of his proliferative diabetic retinopathy and the retinal detachment at the macula.
Mr McHugh was wrong to assert that because the retina had been reattached on 28 October 2008 and the claimant did not recover vision in his left eye, any loss of vision must have been caused by optic nerve damage. The alleged negligent delay in eye surgery did not make a material contribution to the claimant's loss of vision following the vitrectomy on 14 October 2008. At best, the vision in the left eye would have been hand movements rather than perception of light but in all probability it would not have been any different from now.
The final retinal detachment on the left side appears to have occurred between February and April 2009. Therefore, even if the claimant had retained some useful vision in the absence of the alleged negligence, he would have lost that vision within six months of October 2008.
As to the right eye, Mr Snead did not support Mr McHugh's theory that a better outcome would have been achieved with earlier right vitrectomy. There is no causal link between the alleged negligence and the loss of vision in the right eye, the latter being the consequence of the claimant's aggressive proliferative diabetic retinopathy alone.
Earlier vitrectomy on the right eye would have made no difference.
Accordingly, the claimant would have been severely and permanently sight impaired as a result of persistent bilateral retinal detachment. He would have been in no better position than now.
The case put by the claimant in closing submissions that urgent surgery could have taken place "very early on 25 October 2008" is a new case. Further, the case put in closing submissions that the defendant should have advised the claimant that there were two options for treatment, and that the claimant would have chosen to have had urgent surgical treatment, is not a case which has been pleaded or advanced, and it would be unfair to allow the claimant to advance it in closing.
The applicable legal principles
The parties are not in disagreement about the applicable legal principles as to which there was limited debate at trial. Taken from the defendant's opening submissions, the test to be applied as to whether there was any negligence by the defendant's ophthalmic surgeons is by the standard of the ordinary skilled ophthalmic surgeon in October 2008, exercising and professing to have the special skill of an ophthalmic surgeon.
Taken from the claimant's closing submissions, the test in clinical negligence cases is set out in Bolam v. Friern Hospital Management Committee [1957] 1 WLR 582 and qualified in Bolitho v. City and Hackney Health Authority [1998] AC 232. The Bolam test at p.587 provides that a medical practitioner "… is not guilty of negligence if he has acted in accordance with a practice accepted as proper by a responsible body of medical men skilled in that particular art. … Putting it the other way around, a man is not negligent, if he is acting in accordance with such a practice, merely because there is a body of opinion who would take a contrary view".
As held in Bolitho (quoting from the headnote at p.233), in applying the Bolam test " … the court had to be satisfied that the exponents of a body of professional opinion relied upon had demonstrated that such opinion had a logical basis and in particular directed their minds where appropriate to the question of comparative risks and benefits and had reached a defensible conclusion; that, if, in a rare case it had been demonstrated that professional opinion was incapable of withstanding logical analysis, the judge was entitled to hold that it could not provide the benchmark by reference to which the doctor's conduct fell to be assessed, but that in most cases the fact that distinguished experts in the field were of a particular opinion would demonstrate the reasonableness of that opinion;".
The claimant also relies on the recent decision of the Supreme Court in Montgomery v. Lanarkshire Health Board [2015] 2 WLR 768, in which it was held that the doctor's duty to advise the patient as to the risks of proposed treatment does not fall within the scope of the Bolam test ([86]). It was held at [87] that:
"An adult person of sound mind is entitled to decide which, if any, of the available forms of treatment to undergo, and her consent must be obtained before treatment interfering with her bodily integrity is undertaken. The doctor is therefore under a duty to take reasonable care to ensure that the patient is aware of any material risks involved in any recommended treatment, and of any reasonable alternative or variant treatments. The test of materiality is whether, in the circumstances of the particular case, a reasonable person in the patient's position would be likely to attach significance to the risk, or the doctor is or should reasonably be aware that the particular patient would be likely to attach significance to it."
The claimant draws attention to the passages in the judgment which deal with the assessment of whether a risk is material ([89]), the doctor's advisory role involving dialogue ([90]), and the degree of unpredictability inherent in the decision being tolerated as a consequence of protecting patients from exposure to risks of injury which they would otherwise have chosen to avoid ([93]). Attention is also drawn to [103] where it is said that, "The question of causation must also be considered on the hypothesis of a discussion which is conducted without the patient being pressurised to accept her doctor's recommendation", and advice as to the risks being discussed dispassionately explaining the potential consequences of the alternatives ([104]). As to alternatives, "… it is not possible to consider a particular medical procedure in isolation from its alternatives. Most decisions about medical care are not simple yes/no answers. There are choices to be made, arguments for and against each of the options to be considered, and sufficient information must be given so that this can be done…" ([109]).
Thus, the claimant says, it is no longer permissible for a clinician to simply give to a patient their preferred course – the advice must be given dispassionately and issues discussed with the patient.
In respect of causation, the claimant refers to the principle in clinical negligence cases of "material contribution" arising from the case of Bailey v. Ministry of Defence [2008] EWCA 883 at [46]. The claimant formulates the principle as follows: If a court is satisfied that the negligent cause has made a material contribution to the loss but the state of medical science is such that a determination of the precise extent of that loss cannot be made even on a balance of probabilities then the claimant succeeds in causation and also succeeds as if the entire loss had resulted from the negligence. The defendant does not dispute the principle, but does dispute its application to the present facts, including a submission that this is not a case at the limits of medical science.
Neither party argued that loss of a chance is relevant in this case.
Discussion and conclusion on liability and causation
It should be stated at the outset that the issues of breach of duty and causation in this case are difficult ones. The claimant's case is that surgery on his left eye should have been carried out on 24 October 2008, and has adduced strong evidence to that effect. However, there is strong evidence going the other way, to the effect that medical management was the right course. Further, such surgery was in fact carried out on 28 October 2008, so that the question is not only whether earlier surgery was required, but whether this would have made a difference. The claimant relies on a failure to advise as to the options, but the defendant objects that this was only raised in closing and is unpleaded, and it would be unfair to allow the claimant to pursue it now. It raises its own causation issues. Additionally, the claim is complicated by the fact that the claimant suffered retinal detachment in his left eye some six months after the operation, and there is an issue as to whether he would have lost vision in his left eye irrespective of whether surgery should have been carried out earlier. Finally, loss of vision in the claimant's left eye would not in itself have deprived the claimant of his independence, which is the basis of the damages claim. The loss of vision in the right eye is factually unconnected with the left eye, and the question is whether the claimant can establish a causal connection from what he argues was a justifiable reluctance to perform surgery earlier in view of the history of the left eye when it would have made a difference. In seeking to answer these questions, the court has heard factual and expert evidence from six highly qualified opthalmic surgeons, who fundamentally disagree on some of the central issues. Finally, the background is one of a young man who tragically has suffered from aggressive proliferative diabetic retinopathy, and who needs as much support as possible going forwards. All this has made this case particularly difficult to decide.
The analysis can usefully be broken down into a number of questions (I make it clear that this includes the questions raised by the parties in argument). First, is the claimant right to assert a breach of duty consisting of a failure to operate on his left eye on 24 October 2008? Second, was the defendant in breach of duty by failing to give proper advice as to the alternatives? Third, if the answer to either of these questions is affirmative, did the fact that the operation was not carried out until 28 October 2008 make any, or any material, contribution to the claimant's loss of vision in his left eye? Fourth, would the claimant have lost vision in his left eye in any event by reason of retinal detachment from about April 2009? Fifth, given the fact that there was no negligence in the treatment of the right eye, can the claimant show that the loss of vision in that eye was caused by the breach of duty was in relation to the left eye? These headings, of course, include various other issues, but reflect in broad terms the issues which arose at trial so far as liability and causation are concerned.
(1) Failure to operate on 24 October 2008
The claimant's case is that a maximum of 24 hours should have been allowed after instituting medical therapy, and that the defendant should have proceeded to surgical management from around 11:00 am on 24 October 2008. This is the time when Mr Sharma saw the claimant, and admitted him to hospital as described above. The claimant's case as articulated in Mr Benson's witness statement and Mr McHugh's report is that it was mandatory to intervene surgically to lower the pressure in the claimant's left eye by undertaking a vitrectomy following this examination.
The annexed table showing the intraocular pressure and hyphaema measurements over the critical days show that the IOP was 40 at 10:30 on 23 October 2008 and (whilst the claimant was at BMEC) rose to 49 at 09:50 am on Sunday 26 October 2008. The lowest level during this period was 35 at 19:45 on Thursday 23 October. There was evidence that pressures can be higher in the morning due to overnight sleeping posture, and also some debate among the ophthalmologists as to how these pressures should be characterised. Reference was made to glaucoma patients with an IOP of over 50, and indeed considerably over 50. However, I am satisfied that the pressures in the claimant's case can properly be described as high to very high over the whole period under consideration. I find that this was, as Mr Snead put it, worrying.
Mr McHugh produced from the medical literature a useful piece on "Elevated Intraocular Pressure Associated with Retinal Procedures", which is consistent with the other evidence in the case. It is to the effect that elevated IOP is a common complication following pars plana vitrectomy, particularly among patients with proliferative vitreoretinopathy (like the claimant). If therapy is needed to control IOP elevation, most cases can be managed medically with anti-glaucoma medications. Occasionally, surgical intervention is needed to relieve extremely high IOPs, and the procedure is chosen carefully based on the mechanism of IOP elevation. The study cited showed that 11% of the patients in the study required some form of surgical intervention.
Although it has been suggested on behalf of the claimant that lesser surgery would have sufficed, as noted elsewhere in this judgment, the intervention carried out by Mr Benson on 28 October 2008 was essentially the same operation as he had carried out on 14 October 2008. I find that if surgery was to be carried out, it was of this nature (and not for example release of gas from the left eye – it became clear that the reference to "gas" as regards the operation of 14 October 2008 was a reference to air). This was effectively common ground between the experts in their oral evidence at trial.
In any case, the claimant accepts that the medical treatment (i.e. with drugs) prescribed on 23 October 2008 when he attended as an out patient at BMEC was appropriate. There is no question in my view that this is correct. The medical notes suggest that this was commenced about 11.00 am when treatment was discussed with Professor Scott.
When he returned on the morning of 24 October 2008, the claimant's IOP was 46 which was materially higher than the previous day. It remained at 46 when Mr Sharma saw him at 11:00 am. Mr Sharma admitted the claimant, and obtained a B scan (ultrasound). I am satisfied that he acted reasonably in taking this course.
The results of the scan give rise to a dispute of fact. As already noted, the scan was carried out by a specialist qualified to interpret it. Although the pre-trial material consisted of a photocopy, the original snapshot was produced at trial. The evidence was that the specialist taking it would have seen something more like a video. Among the notes he made, was reference to a possible choroidal haemorrhage in the claimant's left eye.
Mr Sharma reviewed the scan. He said that the suspected choroidal haemorrhage pointed to a diagnosis of suprachoroidal haemorrhage. He considered that this increased the complications of surgery, and I am satisfied that he held this belief at the time, and that it was reasonable.
However, his opinion is not fully borne out by the expert evidence. In this regard, the claimant points out that Mr Snead does not refer to choroidal haemorrhage in his report. When asked about this, his response in cross-examination was that he was unaware that the scan had been carried out by someone qualified to interpret it, and so felt he could not give it any weight. The claimant submitted that this was a "bizarre" answer, but I do not accept this.
The scan itself is mentioned in the experts' joint memorandum, though it is common ground that the haemorrhage being discussed by the experts was to a possible sub-macular haemorrhage suggesting a retinal break or tear, providing a conduit for blood from the vitreous cavity to gain access to the sub-retinal space.
Having seen the original snapshot at trial, Mr McHugh said in evidence that the scan did not point unequivocally to a choroidal haemorrhage. If in fact there was a haemorrhage, it was relatively localised and a low risk to surgery. Mr Snead said that the scan indicated blood, but it was not clear where it was located. It could be lying beneath the retina, or it could be in the choroidal space. My overall impression from the expert evidence is that the risk that concerned Mr Sharma was part of the overall picture, rather than a presenting a serious further risk in itself. I find that the results of the scan did not in itself rule out surgery if otherwise required.
The critical question is whether surgery was required. Mr Benson's evidence was that he would have proceeded to surgery. It is common ground however that it could not have happened immediately, because the patient requires to be starved for six hours prior to surgery.
A complicating factor is that the patient was due to see Mr Benson on Monday on his return from holiday. Mr Sharma explained that it is generally safest to leave the decision about further specialised surgery to the original surgeon. As the claimant says however, and I accept, that whilst this is clearly correct, it cannot be an answer where (as here) the original surgeon will not be available for another three days – if, that is, immediate surgery is required.
In closing, the claimant submitted that there should have been urgent surgery undertaken by the afternoon of 24 October 2008 or, alternatively, at the latest late on 24 October 2008 or very early on 25 October 2008. The defendant objects that this is a new case, since what is pleaded is that surgery should have taken place after a maximum period after instituting medical therapy on 23 October 2008. It was clarified on behalf of the claimant orally that what was meant by this in closing submissions was late on the night of 24 October or in the early hours of 25 October.
In this respect, there were other complications raised in the evidence, including Mr Benson's evidence, to which it is necessary to refer. The claimant was seen by Mr Sharma at 11.00 am on 24 October. I do not think there is any dispute that (and I am satisfied that) this was the first opportunity when a decision as to surgery could have been taken. Allowing for six hours starvation, the claimant could not have been ready until the evening, and perhaps even the late evening.
However, a vitrectomy is a complex operation requiring a full-staffed surgical theatre. Mr Benson himself waited until the following morning to operate after he saw the claimant on the afternoon of 27 October when the pressure had reached 56. On the evidence, it is in my view doubtful that a late night operation would have been practical.
Further, 25 October 2008 was a Saturday. In closing the defendant submits that it would not have been realistic in all the circumstances of this case at BMEC in 2008 to have expected complex and difficult vitreoretinal surgery to have been performed before Monday morning at the earliest.
The claimant objects that there is no pleaded case by the defendant to this effect, and that the defendant should not be allowed to advance it. It is right to say that it is not pleaded, though it can equally be said that the defendant was responding to a pleaded case to the effect that surgery should have been carried out on 24 October 2008.
It was clear on the evidence (including that of Mr McHugh and Mr Benson) that surgery over the weekend would have difficult, the reason being primarily logistical, in terms of assembling a specialised surgical team. However, though a factor within the factual picture as a whole, I do not think that it is a decisive factor in this case. Albeit extended slightly to the early hours of 25 October in closing, the claimant's case is that surgery had to be carried out on 24 October. It is not the claimant's case that surgery should have been carried out over the weekend, and indeed an important part of his case is that damage to the optic nerve can happen within a few hours. Had the view been taken, as is maintained on behalf of the claimant it should have been, that surgery was required on 24 October 2008, I am satisfied that a way would have been found to accomplish this. So one comes back to that central question.
In that regard, reliance is placed by the claimant on the evidence of Mr Benson. It is correct that in his witness statement Mr Benson says that surgery was "mandatory". The defendant in contradicting this evidence placed considerable reliance upon the fact that Mr Benson did not report this as a Clinical Incident or Serious Untoward Incident, and indeed continues to refer patients to Mr Sharma, for whose skills he expressed a high opinion. However, I place a limited weight on this contention. Even the best practitioners can make a mistake, and the claimant's case is that Mr Sharma did.
However, it is important to be clear what Mr Benson said in his oral evidence about the treatment. The gist of his evidence was to accept that other surgeons had taken a different view to his view. He was not, he said, in court to criticise colleagues, but his view was that the claimant should have had surgery prior to the weekend. Whilst of a clear view as to what he would have done, taken as a whole I agree with the defendant that his oral evidence did not rule out the possibility of a different view being taken by a responsible clinician.
So far as the expert evidence is concerned, Mr McHugh firmly stated that surgery was mandated by the fact that by 24 October, the claimant's IOP had not come down. He was of the opinion that raised pressure at this level would cause damage to the optic nerve within a short period of time. He accepted the risks of complex vitreoretinal surgery, but was of the opinion that it was necessary to take that risk. However, as the defendant says, Mr McHugh did not point to any literature which supported his opinion that medical management of elevated IOP of 40 and over should be pursued for no more than 24 hours before surgery becomes mandatory. I agree with the defendant that this might have been expected, and I do not accept Mr McHugh's evidence in this regard.
Mr Snead was equally firmly of the contrary opinion, stating that raised IOP would have had no effect on the claimant's central (as opposed to peripheral) vision (a point also emphasised by Mr Sharma), and that the risks of undertaking complex surgery at this point in time far outweighed the risks of proceeding with medical management. But for the re-bleed which he believes occurred on Monday, he himself would not have operated on 28 October 2008, but would have continued to treat the claimant medically.
There is a further point to note here on the evidence. The plan instituted by Mr Sharma on Friday added intravenous Mannitol to the existing medical treatment. Even allowing for Mr McHugh's evidence (which I accept) that Mannitol will only have a temporary effect, it is correct as the defendant says that the medical treatment implemented on the advice of Professor Scott on 23 October was augmented by Mr Sharma on 24 October. He did not simply continue with the existing treatment.
Before expressing a conclusion, it is necessary to deal with an allegation made by the claimant as regards Professor Murray. The claimant's case is that when the treatment was discussed with him on the afternoon of Saturday 25 October 2008, Professor Murray did not consider surgery, and was wrong not to have done so. The claimant's case is that the situation was very urgent, and required the immediate consideration of urgent surgery.
Professor Murray was consulted on the phone, and in his statement says he cannot recall the conversation (which took place 5 years earlier) but that he would have considered surgery. He said he had knowledge of many patients who have vitreoretinal surgery, and works closely with his vitreoretinal colleagues.
His advice, he said, was to persevere with aggressive medical treatment as before, and wait to see if the IOP reduced as the blood in the eye cleared. There was, he said, nothing about the claimant's presentation that suggested to him that urgent surgical intervention was required, the condition appearing to be relatively stable and capable of being managed medically until the claimant could see Mr Benson on Monday 27 October. In the 25 years he has been a consultant, he said he had been called about a patient with a vitreoretinal issue "many, many times".
As indicated, Professor Murray could not recall the conversation specifically. However, I had the opportunity to see him give oral evidence, and I accept that albeit not a vitreoretinal specialist, he had considerable experience of dealing with such cases, and that he would have considered surgery, but thought it was right to continue with medical treatment. I do not accept that he should have sought the advice of a vitreoretinal specialist.
The defendant says, and I accept, that in fact maximum medical therapy was not achieved until 26 October 2008 when, on Mr Sharma's instructions given on the phone in the early afternoon that day, oral Glycerol was added to a further dose of intravenous Mannitol.
I can now express my conclusions. The clinical judgment in this case was whether to continue to treat the claimant's elevated IOP medically, or whether surgery was required. By far the greatest part of the trial was devoted to this question.
In terms of the test to be applied in law, as explained above, the Bolam test is that a doctor is not guilty of negligence if he has acted in accordance with a practice accepted as proper by a responsible body of doctors with the necessary skills. A doctor is not negligent if he is acting in accordance with such a practice merely because there is a body of opinion that would take a contrary view. As Lord Scarman put it in Sidaway v Governors of Bethlem Royal Hospital [1985] AC 871 at 881F, "A doctor is not negligent if he acts in accordance with a practice accepted at the time as proper by a responsible body of medical opinion even though other doctors adopt a different practice".
Applying that test, I am satisfied that Mr Sharma was not negligent in pursuing medical treatment as he did on 24 October 2008. On the evidence as a whole, I am satisfied that this was a logical and justifiable clinical judgment. Whilst I accept that Mr Benson may have taken a different course, that cannot affect the fact that the course adopted by Mr Sharma was one which would have been taken by a responsible body of ophthalmological opinion. It follows that I reject the contention that surgery was mandatory or required. For the same reason, I am satisfied that Professor Murray was not negligent in continuing the treatment when consulted on 25 October 2008. The principal reason for this conclusion is that whilst the elevated IOP involved risks for the patient, surgery also carried risks, and it was reasonable to regard the risks of surgery as outweighing the risks of medical treatment, albeit a responsible body of ophthalmological opinion may have taken a different view.
(2) Failing to give proper advice as to the alternatives
The claimant's case is that from around 11.00 hours on 24th October 2008, the defendant should have ensured that the claimant was advised that he required urgent surgical treatment to his left eye. He asks for a finding to this effect. For reasons set out above, in my view he is not entitled to such finding.
Citing Montgomery v Lanarkshire Health Board [2015] 2 WLR 768 (see above) the claimant seeks an alternative finding that from around 11.00 hours on 24 October 2008 the defendant should have advised the claimant that there were two options for the treatment of the intraocular pressure of the left eye. The benefits and risks of, in particular, urgent operative treatment, should have been discussed with the claimant. If that had been done appropriately then the claimant would have chosen to have had urgent surgical treatment which would have been undertaken by the afternoon of 24 October 2008 and, in any event, by late 24 October 2008 or early 25th October 2008.
The defendant responds that the claimant's pleaded case is not that the defendant negligently failed on 24 October 2008 to set out all the possible treatment options to the claimant. That has never been pleaded. Equally, the claimant had never said in these proceedings (whether by pleading or witness statement) until he gave oral evidence that if he had been offered the option of surgery, he would have taken it. Both points are, in my view, correct. Up to trial, the claimant's case summarised by Mr Benson in his witness statement was not that surgery was an "option", but that it was "mandatory".
The defendant submits that insofar as the claimant now runs an unpleaded case based on the legal duty to advise of alternative treatment options as set out in Montgomery, that case does not get off the ground. The high point of his case on this, the defendant says, is Mr Snead's acceptance that the failure to discuss surgery as a possible option with the claimant on 24 October 2008 was regrettable. However, the key factor, the defendant says, is that neither Mr Sharma nor Mr Snead would have recommended to the claimant that he undergo surgery. Both would have recommended that he persist with medical therapy. As the claimant accepted when he gave oral evidence, he would have accepted the recommendation of the specialists who were treating him in hospital. Accordingly, the defendant submits, there is no merit in the claimant now seeking to advance what is effectively an unpleaded allegation, and it would be unfair to allow him to do so.
Having considered the submissions made on the pleading point provided at my request after the end of the trial, the position in my view is as follows. Although this point is not pleaded, it was made clear on behalf of the claimant that the list of issues agreed prior to the trial beginning had to include the possibility of advice as to the possibility of surgery. The trial proceeded on this basis, and the defendant was in a position to deal with the point. I do not accept the defendant's assertion that the claimant is barred on pleading grounds.
The position on the evidence is as follows. Mr Snead said that the fact that there was no discussion with the claimant on 24 July 2008 of the possibility of surgery was regrettable. He said that he would have discussed it with the patient, and his recommendation would have been to continue with the medical treatment. He also would have explained the reasons for this advice. As was pointed out on behalf of the defendant, Mr Snead did not say that he would have discussed the possibility of "urgent" surgery, as suggested in the claimant's closing submissions. However, I think that it was implicit in his evidence that he was referring to the possibility of surgery at the time, as opposed (for example) to waiting until after the claimant's appointment with Mr Benson on the afternoon of 27 October before taking a decision.
As regards the claimant's evidence, he said in oral evidence that had he been told of the possibility of having surgery he would have wished to have it. However, he qualified his evidence by saying he would have followed medical advice. I find that he would have followed medical advice. In the context of this case, this was inevitable given the complexities of his condition.
Mr Sharma's evidence was that he would not have discussed the possibility of surgery with the claimant, because he did not think that any course other than medical treatment was appropriate. However, it follows from the evidence of Mr Snead that surgery was an alternative for consideration at this time, albeit he would not have recommended it. The position therefore is that a breach of duty has been accepted by the defendant's expert in this regard. The question is what follows from such breach of duty.
The defendant contends that it makes no difference because the treating clinician, Mr Sharma, would not have recommended surgery. However, the claimant contends that the duty to advise is a duty to advise dispassionately (Montgomery at [104]), and that Mr Sharma could not have done this since he considered that surgery was, in effect, out of the question. It is submitted that the question has to be answered by reference to what a reasonable vitreoretinal surgeon would have advised, rather than by reference to a particular individual. As a matter of principle, I accept that submission.
Whereas in relation to the claimant's primary case it is sufficient to hold that the views of Mr Sharma were in accordance with a responsible body of ophthalmological opinion, on this alternative case, on the factual premise that claimant would have taken medical advice, the Bolam test does not provide an answer. In the light of the parties' submissions the court must, therefore, make findings as regards the advice that should have been given.
As explained above, the position on the evidence is that Mr Benson and Mr McHugh would have advised immediate surgery, whereas Mr Sharma and Mr Snead would have advised continuing to treat the IOP medically. It is not easy for the court to choose between the views of these highly skilled surgeons. The question centres, in my opinion, on the balance of risk, and I consider that this was most cogently explained by Mr Snead.
Apart from questions of practicality, I am satisfied that to perform major surgery on the claimant on 24 (or 25) October 2008 would have been a major step to be avoided if possible. The consequent risk of damage to the optic nerve was an important factor, but taking the evidence as a whole I am satisfied that the risks of surgery (e.g. bleeding, cataract, loss of vision, and retinal detachment) were considerable and outweighed it. The fact that the risks did not materialise when Mr Benson performed the operation on 28 October 2008 does not affect the matter, because that is with the benefit of hindsight. Accepting the defendant's case in this regard, I consider that the better advice, and therefore the advice which the hypothetical reasonable ophthalmologist posited by the claimant would have given, was to proceed to treat the IOP medically. I find that the claimant would have followed this advice. This finding is reinforced by the fact that he was seeing his own surgeon on Monday. I further find that by Monday morning, the treatment was beginning to work.
Accordingly, I conclude that the claimant cannot establish that this breach of duty caused any loss or damage. The failure to give advice as to alternative treatment by surgery made no difference. Following the end of the trial I asked the parties for submissions on whether a more broadly based causative approach might be available to the claimant based on the decision in Chester v Afshar [2005] 1 AC 134. However, the parties agreed that this decision is inapplicable.
(3) Did the fact that the operation was not carried out until 28 October 2008 make any, or any material, contribution to the claimant's loss of vision in his left eye?
The next question is whether the fact that the operation was not carried out on 24 October 2008 but only on 28 October 2008 made any, or any material, contribution to the claimant's loss of vision in his left eye. Mr McHugh's opinion is that the visual loss that developed after the first vitrectomy was primarily due to optic nerve damage, secondary to a prolonged and severe elevation in IOP in the early post-operative period. The delay in performing earlier surgery probably also allowed further progression of pre-retinal membrane formation, rendering the surgery that was eventually performed more complex with a compromised visual outcome. A sustained elevated IOP of over 40, he said, will cause a degree of permanent optic nerve damage after only a few hours.
Mr Snead's evidence was that the raised IOP from 23 to 28 October will have had an effect on the perfusion of the left optic nerve in addition to any circulatory compromise from his pre-existing diabetic vasculopathy. In cross-examination, he clarified this by accepting that there would have been a degree of optic nerve compromise, the nature and extent of which would be impossible to quantify. He would assess the damage caused by the raised pressure in the context of this case as being minimal. Asked whether he accepted that the high pressures caused some damage, he said he would. There was however a difference here between damage to the optic nerve and damage to vision. The raised pressure, although worrying, and higher than one would have liked, was for a relatively short period of time, and would be expected only to affect peripheral (rather than central) vision, which was already affected by the proliferative diabetic retinopathy.
For reasons set out below, I do not accept Mr McHugh's evidence as to the speed of the progression of pre-retinal membrane formation. I would be disposed to accept the evidence of Mr Snead as to the effect of IOP in its entirety, but there is other significant evidence that must be taken into account. Following the second operation, Mr Benson wrote to the claimant's GP on 19 November 2008 stating, "I am concerned that his poor vision may be the result of ischaemic damage caused by the very high intraocular pressure that was present for approximately 1 week prior to surgery". A similar point was made in a letter of 22 January 2009. This has the value of contemporary evidence, and I am satisfied it reflected Mr Benson's opinion.
It is right to add that the evidence suggested that undue pressure produces a "cupping" of the optic nerve and Mr Benson accepted in cross-examination that he did not think that the claimant's optic nerve head was particularly cupped. Further evidence in this regard concerned the pallor of the optic nerve, but this evidence was not in my view sufficiently clear to draw reliable conclusions from it.
Despite the views expressed by Mr Benson, on the evidence as a whole, and in particular the evidence of Mr Snead which was convincing, I do not consider that it is established that the cause of the loss of vision in the claimant's left eye was the period he suffered of elevated IOP, as opposed to damage arising from his proliferative diabetic retinopathy. However, on the evidence as a whole, I consider it to be established that the elevated IOP made a contribution to the loss of vision which was more than minimal.
In this regard the claimant relies upon Bailey v Ministry of Defence [2008] EWCA Civ 883 in which it was said that:
"45. Hotson was a case where the House of Lords held that the cause of the injury was the non-negligent falling out of the tree and that that injury would, on the balance of probabilities, have occurred anyway without the negligent delay in treatment; thus the negligent conduct made no contribution to causing that injury. …
46. In my view one cannot draw a distinction between medical negligence cases and others. I would summarise the position in relation to cumulative cause cases as follows. If the evidence demonstrates on a balance of probabilities that the injury would have occurred as a result of the non-tortious cause or causes in any event, the claimant will have failed to establish that the tortious cause contributed. Hotson exemplifies such a situation. If the evidence demonstrates that 'but for' the contribution of the tortious cause the injury would probably not have occurred, the claimant will (obviously) have discharged the burden. In a case where medical science cannot establish the probability that 'but for' an act of negligence the injury would not have happened but can establish that the contribution of the negligent cause was more than negligible, the 'but for' test is modified, and the claimant will succeed."
The defendant submitted this principle is inapplicable, because it can confidently be stated that the effect was minimal. However, on the facts as I have found them I prefer the claimant's submission in this regard. It follows that I consider that the claimant has made good his causative case in this regard.
(4) Would the claimant have lost vision in his left eye in any event by reason of retinal detachment from about April 2009?
Mr McHugh and Mr Snead both note that on review on 20 April 2009 there was an area of retinal detachment in the left eye. The position is summarised in the Particulars of Claim to the effect that "on the left an area of retinal detachment and folding was sketched, together with a number of retinal tears situated in the macular region". I find that this probably occurred between February and April 2009, and that the retina remained detached.
However, the question is as to the significance of this, which gives rise to a further dispute between the experts. The defendant's case supported by Mr Snead is that the retinal detachment was unrelated to the treatment of the elevated pressure, and that even in the absence of the alleged negligence, the claimant would have lost useful vision within about six months of October 2008.
As described above, in his evidence Mr McHugh attributed the loss of vision to damage to the optic nerve. In cross-examination, he said that immediate surgery would have significantly reduced the risk of detachment, and on balance his view was that surgery performed on 24 October 2008 would have produced re-attachment of the retina. He expressed the view that pre-retinal membrane could have formed between 24 and 28 October 2008 making the surgery when performed more difficult. Although retinal detachment can cause loss of vision, he said that with a healthy optic nerve, even total detachment will give some vision.
Mr Snead took a different view. He said in evidence that when the retina detaches, there is a tearing effect on the rods and cones (the two types of photoreceptor cells in the inner layer of the retina) which means that simple re-attachment of the retina will not of itself restore vision. The macula is the part of the retina which is most densely packed with 'seeing cells', especially cones. The macula is responsible for central vision (the rest of the retina being responsible for peripheral vision). This is why, he says, breaks or detachments over the macula (as here) are particularly serious.
This issue is an important part of the defendant's case, and is a difficult one for the court to resolve. As to the relation between surgery and the retinal detachment, the defendant submitted a Part 18 Request asking whether it was the "claimant's case that the persistent retinal detachment in the left eye is causally related to the alleged negligent period of raised intraocular pressure? If so, how?". The response was, "There is not a direct causal relationship between the negligent period of raised IOP and subsequent retinal detachment". This is repeated by Mr McHugh in his report.
It appears to me that this supports the defendant's case, though it is right to repeat that Mr McHugh also says that there would have been an earlier opportunity in surgery for management of secondary pre-retinal membrane formation, which corresponds to his oral evidence. However, this implies a significant difference in this regard over the four day period when the claimant argues that surgery should have happened, and when it actually did happen. On balance, I prefer Mr Snead's view, which was that the membrane removed in subsequent surgery was not new, and that by far the most likely explanation is that it was not possible to remove everything in the earlier operation in its entirety.
As to the oral evidence of Mr Benson, he said that the claimant's left retinal detachment was a result of his disease, not the surgery. It was not suggested that the note of his evidence in this regard taken by the defendant's side during the trial was inaccurate: "Re retinal reattachment, you have to remember that C has ongoing eye condition, diabetes does not go away. The retinal detachment was due to the retinopathy not surgery". Mr Benson also accepted that the failure of the retina after the January 2009 surgery was a major problem.
My conclusion on this important issue is as follows. Although it was submitted for the claimant that following the failure to operate, the damage was effectively done, for reasons set out above I have not accepted this, except in the sense that the damage to the optic nerve made a contribution to the claimant's loss of vision which was more than negligible. I find that the subsequent retinal detachment was unrelated to the elevated IOP, and I did not think that the claimant was really able effectively to answer the defendant's case in this regard.
I accept the evidence of Mr Snead that even if it had been possible to lower the intraocular pressure in the left eye sooner by earlier surgical intervention it is highly likely that the left visual function would have remained severely compromised as a result of the persistent retinal detachment which was not successfully repaired despite further surgery. I cannot therefore accept Mr McHugh's evidence that if surgery had been performed within 24 hours (whether of 23 or 24 October), the final visual acuity in the left eye would have been between 6/24 and 6/60.
(5) The position as regards the right eye
As explained above, the operation on the claimant's right eye was performed on 15 May 2013. The issues are whether the loss of useful vision in the left eye affected the prognosis for the claimant's right eye, whether directly or indirectly (e.g. by causing ophthalmic surgeons to be more reluctant in proceeding to vitrectomy in the right eye), and had earlier vitrectomy (from 2009 onwards) been performed in the right eye, what would the claimant's visual acuity in the right eye have been.
The claimant's case is that having lost the vision in his left eye, the decision of Mr Benson and Mr Gregor, together with the claimant and his mother, was not to take the risks of operative treatment on the right eye until that became unavoidable. Mr Benson was very much alert to that position and hence he took the precaution of referring the claimant for a second opinion from Mr Gregor. The decision of the claimant, not wishing to risk the vision of his right eye in light of the catastrophic consequences which would flow with any complications which may arise in the context of having no vision in the left eye is, it is submitted, entirely understandable. The fact that there was no vision in the left eye undoubtedly played a part in the considerations of his medical attendants.
On the 6 December 2012, Mr Benson wrote to the claimant's GP that surgery to his right eye would be "very complex and we would be taking significant risks with Mr Barrett's only seeing eye. For that reason it must not be entered into [lightly] and it would be unwise to make any such move whilst Mr Barrett feels this situation is fairly stable and that is confirmed by the clinical findings)". The claimant's case is that if he had maintained vision in his left eye he undoubtedly would have proceeded to operative treatment to his right eye at an earlier stage and with stabilisation of the right eye at an earlier time.
The claimant says that Mr Benson was clearly perturbed with the question of whether or not to operate on the right eye as is evidenced in the medical notes. Despite the fact that he was a senior vitreoretinal surgeon he wished to get an external independent view. There can be no reasonable issue, it is submitted, that if the claimant's left eye had been in a reasonable condition and the right eye could have been stabilised by operative treatment, the claimant would have chosen to have had earlier operative treatment rather than wait to the point of effectively no return.
The claimant argues that Mr Snead has failed at any stage to make a proper assessment of the position in respect of the right eye, and failed to address the issue whether there should or would have been operative treatment to the right eye at an earlier stage. The court should, it is submitted, accept the evidence of Mr McHugh which is that had the intraocular pressures been dealt with appropriately, in the right eye the claimant would have had visual acuities in the range between 6/38 and 6/60.
The claimant seeks a finding that if the left eye had been appropriately managed, then there would have been urgent surgery and earlier treatment undertaken of the right eye. Such urgent treatment would have been around mid-2009 and would have been undertaken probably by Mr Benson or another vitreoretinal specialist.
The defendant submits that the case as to the right eye has been developed by Mr McHugh, who stated in his report dated 11 March 2014 that if the surgical management of the left eye had achieved a more favourable outcome, earlier (date unspecified) surgery to the right eye would have been performed, with a final visual acuity of between 6/38 and 6/60, rather than the present level of 6/95. He repeated this in a "glib fashion" in the course of his oral evidence.
The defendant points to the content of the letter of Mr Gregor dated 21 October 2009 which makes no reference to the left eye. It submits that the risks of surgical intervention outweighed potential benefit. Had vitrectomy been clinically indicated in 2009, as Mr McHugh now says, then the court can be reasonably sure that Mr Gregor would have recommended it then, and so would Mr McHugh himself in his first report of March 2012 (when the claimant had already registered as severely sight impaired).
The defendant says that it is wrong to assert that Mr Snead did not deal with this issue. He gave his opinion in the agreed agenda for the experts' joint meeting. He says that the left eye surgery was complicated by persistent post-operative haemorrhage and persistent post-operative retinal detachment. This may well have influenced the claimant's confidence in a successful outcome for the right eye and is likely to have influenced the consultations regarding the timing of any surgical intervention. In his oral evidence, Mr Snead referred to patients falling roughly equally into two different camps in this situation, essentially those reluctant to contemplate surgery until absolutely necessary and those who say "go ahead, doc, do what you can". He emphasised that both were reasonable responses, but he did not feel that the period of raised IOP here in the left eye had affected the decision over when to operate on the right eye. Nor did he agree with Mr McHugh's opinion that a better outcome would have been achieved with earlier right vitrectomy.
The defendant invites the court to find that there is no causal link between the alleged negligence and the loss of vision in the right eye, the latter being a consequence of the claimant's aggressive proliferative retinopathy alone.
My conclusion on this issue is as follows. The claimant's case as regards his right eye arises factually if, but for the negligent delay in performing surgery on the left eye, the claimant's visual acuity in that eye would have been significantly better than it in fact was. I have rejected the claimant's case in these respects, but should nevertheless set out my reasoning on the premise that such case is correct.
It is, I believe, common ground, in any event I am satisfied that once progressive diabetic retinopathy was established in 2006, it would be expected that vitrectomy surgery would have been required for both eyes. I accept the claimant's evidence that given the disappointing result of the left eye surgery, he was reluctant to embark on right eye surgery until it was really necessary. I consider that this was a reason for Mr Benson referring his case to Mr Gregor at Moorfields for a second opinion.
In his letter of 21 October 2009, Mr Gregor makes no reference to the claimant's left eye. He says that the severe proliferative retinopathy in the right eye has now become completely inactive following extensive laser treatment. He says that whilst vitreosurgery may become indicated if and when the claimant developed further complications, "… for now, I would suggest that we observe him closely as his right vision has been stable for at least one year".
It is correct that Mr Gregor goes on to say that, naturally, the claimant is not at all keen on any intraocular surgery at that point, reinforcing Mr Benson's previous advice not to operate on the right eye at this point. However, there is no suggestion that this has influenced Mr Gregor's view that surgery on the right eye was not indicated at that time. This was Mr Benson's view as well. I reject the submission that the position as regards the left eye had any effect on the decision not to perform a vitrectomy on the right eye in 2009.
The claimant's submissions relating to Mr Benson's letter of 6 December 2012 are referred to above. However, the letter also refers to the fact that "… the rest of the retina is sitting down nicely and, in fact, the diabetic process does seem to be fairly settled at present". He goes on to say that if "he did require vitreo-retinal surgery then I would probably seek the further advice of Mr Gregor". Again, there is no suggestion that Mr Benson thought that surgery was indicated at that this time. (This is not something he dealt with in his witness statement.)
Mr Benson's letter of 21 March 2013 says that "recently the vision has slipped down and he has had a number of small bleeds. The area of retinal elevation has extended across the macular now and vision in his only eye is down at 6/60. I have talked this through with David and he would certainly be up for surgery if you felt this was appropriate". As explained above, the patient was seen by Mr Charles of the Ophthalmology Department of Manchester Royal Eye Hospital in April 2013, who considered that surgery was indicated. It took place in May as I have stated.
As a matter of fact, I find that there was no causal link between the alleged negligence and the loss of vision in the right eye. I find that the loss of vision was solely the consequence of the proliferative retinopathy. I find that surgery on the right eye was carried out only when it was indicated, and that earlier decisions not to operate were indicated by the state of the right eye at the time. In this regard, I prefer the evidence of Mr Snead to that of Mr McHugh. It follows that I do not accept Mr McHugh's evidence as to the difference in visual acuity had an earlier vitrectomy been performed in the right eye.
Quantum
Issue 10 set out above goes largely to quantum, and much has been agreed since the trial started. The evidence was that the claimant was no longer able to drive prior to the first operation, and I make that finding. As regards the other matters identified, see below.
So far as quantum is concerned, the parties dealt with it on the basis that the claimant succeeded on his causation case, which has not happened. However, it is right that I should make findings on the issues that remained live by the end of the trial.
On that basis, I accept the basic submission made on his behalf, namely that on the visual acuities which Mr McHugh considers the claimant would have had absent the alleged negligence, he would have been able to lead an independent life, whereas he is unable to do so now.
Both parties correctly observed in closing that the imponderable factors in the case meant that even if the claimant's case on liability and quantum was accepted in full, following trial the court would not be able to decide quantum in the sense of deciding on amounts. The parties asked the court to make findings with on the main outstanding issues, on the basis that with the court's views the parties would be able to reach agreement, and I proceed on that basis.
The main outstanding issues are as follows:
1. Had I accepted the claimant's case, I would have assessed general damages at £110,000 (the claimant arguing for £125,000 and the defendant arguing for £80,000). I have considered the claimant's submissions to the effect that his figure was already discounted in respect of the visual impairment he would have in any event suffered, but the uncertainties surrounding the position require a lower figure in my view.
2. Loss of earnings: The claimant was made redundant on 12 September 2008. The claimant's case is that loss of earnings should be calculated on the basis of his net income for the tax year 2007-8 which was £26,724 (together with annual increases of 3%). However, as the defendant points out, his net income for tax year 2005-6 was only £8,892, and for 2006-7 it was £13,424. The defendant argues that the base figure should be £16,347, which is the average over the three completed tax years. It further points to the fact that even absent the alleged negligence, the claimant would have been unable to continue as an electrician because of his increasingly limited eyesight. That is common ground and in my view is established on the evidence. On behalf of the claimant, the response is that he could have returned to work undertaking supervisory, managerial and office based work. It was asserted in evidence that he could have worked as a "non-working foreman". Although I accept that the claimant would have wished to work, and that efforts would have been made to provide it, I am satisfied that his earning potential would have been limited. He could in my view not have worked as a "non-working foreman" without being able to see properly the electrical work that was being done. His office skills are limited by the fact that he left school at 16 with minimal qualifications. In those circumstances, the defendant says that given the imponderables, there should be a total lump sum in the region of £40-45,000, or a multiplicand based on a gross income of £16,000, net £13,042. There would need to be a 15% deduction from that figure. I also have to take account of the fact that the claimant has not in fact worked since the operation, and generally in my view, the defendant's case as regards loss of earnings is more realistic than that of the claimant. On balance, in all the circumstances I would have calculated loss of earnings based upon the average net figure of £16,347, which in my view fairly reflects my view of the limitations on the claimant's earning potential, but also his positive work record prior to the operation. The parties can if necessary agree the adjustments that should be made to that number.
3. In respect of future loss of earnings, the claimant's case is that what is now an agreed multiplier to age 55 of 14.80 should be moderated to 12 to allow for the fact that the claimant would not have worked throughout the period, and particularly towards the last years of his life. The defendant contends that the imponderables, even on the claimant's case are so great that the court should make a Blamire award. I consider that there is a real case for that approach, but on balance, I accept the claimant's submissions that the court has sufficient material to make the assessment on a multiplicand/multiplier basis by making appropriate adjustments. On that basis, the defendant submits that the multiplier must be taken from the adjusted Ogden tables, and that for someone who would have been disabled, and who was not employed at the date of the alleged negligence, the appropriate multiplier for someone in the claimant's position is 2.92. The figure rises to 5.69 if the person concerned was in work. On balance, although the claimant was not in fact in work, in view of the overall position as regards his employment referred to above, I would have adopted the higher multiplier of 5.69 had I accepted the claimant's causation case.
4. Past care: The dispute between the parties has been as to the net commercial cost of the additional past care. This has undoubtedly been required by the claimant, and it was provided particularly by Mrs Barrett who has done her utmost for her son, and also his sister Michelle who has shown great commitment to his care as well. The parties' respective figures in closing were £65,505 (claimant) and £18,394 (defendant). I propose to adopt the suggestion made by counsel in closing, and take a figure between those two, which is £41, 949.50. (A 25% reduction is now agreed.)
5. Future care: It is now agreed that this must be on a commercial rather than a "family and friends" basis. There is however force in the defendant's submission that in practice, the family may continue to provide the care itself. On the evidence, the balance is between care which is sufficient to maintain a proper standard of life for the claimant, and a level of care which is unrealistic and undermines his independence. As between the experts, I felt that Ms Street tended to adopt a maximal approach, whereas Mr Boyd-Smith had a better understanding of the needs of someone in the claimant's position. As regards multiplicand, the claimant's figure was £28,343, and the defendant gave a range of between £3,144 and £25,496. The latter figure was on the basis that the court accepted Ms Street's package, but excluding care at night (Ms Street does not now argue for this). However, she does argue for 21 hours care per week for 48 weeks, plus a four week 24 hour contingency. Mr Boyd-Smith, on the other hand, argues that 12 hours care per week is more likely to promote the claimant's independence. There is a further complication in that even if the claimant's case on causation is accepted, he would have required some care in any event. Notwithstanding, I consider that the defendant's various alternatives are too low given the difficulties which the claimant will undoubtedly face. I consider that on the evidence as a whole, the appropriate multiplicand for future care is £21,257.25 (75% of Ms Street's figure). This includes allowance for a four week 24 hour contingency. The multiplier has been agreed at 14.80.
6. Future gardening, decorating, and DIY: The claimant lives in a flat without a garden, though he says he would prefer a house. Given that, I would have adopted a multiplicand of £620 (as opposed to £963 as sought by the claimant). (Past costs have been agreed.)
7. Chiropody: Although this is available on the NHS, this is an important part of diabetic care. I find that it is an appropriate head of claim, and the parties can agree the figures.
8. Caller System: I do not understand there to be a substantial dispute between the parties in this regard.
9. Holidays: To date, the claimant has taken holidays with his family and friends. However, I am satisfied that provision should be made for some level of care in this respect. Taking account of the inevitable lack of certainty as to what will actually happen, a figure between that advanced by the claimant of £2,000 p.a. and the defendant of £400 p.a. is appropriate. The figure of £1,200 p.a. reflects the balance I consider necessary between the claimant's need for considerable assistance whilst on holiday in an unfamiliar place, without adopting an unreasonable approach as to what someone in the claimant's position would actually contemplate.
Conclusion
I refer to what I say above about the claimant's personal courage in facing his disability, and the immense support he has received from his family and friends. I also refer to the factors that have made this case so difficult to decide. However, on the evidence, and for the reasons stated above, I have concluded that this claim does not succeed. I am grateful to the parties and their representatives for the considerable assistance that has been given to the court.
Annex
Date/Time Intraocular Pressure Hyphaema
Thursday 23rd October 2008
1030 hours
1100 hours
1945 hours
40mmHg
40mmHg
35mmHg
2.4mm
-
-
Friday 24th October 2008
Around 0950 hours
1100 hours
1740 hours
2045 hours
46mmHg
46mmHg
38mmHg
44mmHg
3.2mm
-
3.4mm
-
Saturday 25th October 2008
1130 hours
1510 hours
1900 hours
48mmHg
45mmHg
47mmHg
3.3mm
3.3mm
3mm
Sunday 26th October 2008
0950 hours
1045 hours
Time unknown (before evening)
49mmHg
-
36mmHg
"Full hyphaema" "dense blood clot @ 2mm"
-
1.75mm
Monday 27th October 2008
0730 hours (or 1930 previous evening)
1310 hours
1604 hours
34+36mmHg
52mmHg
56mmHg
1.75mm – 1.50mm
3mm
-
|
Mr Justice Warby:
Members of the legal profession and other readers of the law reports will be familiar with 'Solicitors from Hell'. It is the name used for and by a variety of websites which, over a period of years, have been used as a vehicle for denouncing solicitors and other member of the legal profession in the most outspoken terms, for alleged misconduct. The original website, set up by Rick Kordowski, was at www.solicitorsfromhell.co.uk. That site was closed down some years ago.
The solicitors firm which is the claimant in this action acted for the claimants in the litigation against Mr Kordowski, in which orders were made that closed down the original Solicitors from Hell site: Law Society v Kordowski [2011] EWHC 3185 (QB), [2014] EMLR 2. Now the firm itself has been targeted, via a web address which is a simple variant of the original. I shall refer to the new site as SFHUK.com.
Some of the claims made against the operator(s) of Solicitors from Hell websites in the past have been for harassment. The majority have been in libel, as is the present claim. There are two aspects to this claim. The first complains of the listing of the claimant firm as one of the 'Solicitors from hell'. The site is, as its home page explains, devoted to complaints about 'Solicitor fraud, misconduct, incompetence, negligence, dishonesty, overcharging, corruption, embezzlement, lying/perjury and racism.'
The second aspect of the claim arises from some words which refer specifically to alleged conduct of the firm. An item referring to the claimant appears on the site in the 'complaints' section. It is headed with the firm's name and address, and the headline or subject line 'Harassment'. The item takes the form of a letter of complaint by an anonymous client of the firm. In summary, the letter accuses the firm of seeking to charge three times the quoted fee for a simple letter and then, when the client refused to pay, unjustifiably threatening legal action and engaging in a campaign of harassment.
The offending words first appeared on SFHUK.com at some point between 2 October 2014 and 15 January 2015, which is when the claimant discovered their presence there. The words complained of were still on the site at the date of the application before me in September 2015.
The claimant firm has tried, in conjunction with the Law Society, to find out the identity of the people who operate SFHUK.com, but without success. They have discovered that the WHOIS registry lists 'Anonymous Speech' as the website owners. Anonymous Speech is a proxy registrant service. It claims to move its servers from one country to another on a regular basis. It further claims to ignore court orders originating from the EU or US. It appears to be an organisation which specialises in providing proxy services to those who do not wish to be traced.
A letter of claim dated 20 February 2015 was emailed to an "info@" address of SFHUK.com, but received no response. On 24 April 2015 the Law Society and the claimant obtained a Norwich Pharmacal order against Anonymous Speech, requiring it to disclose identifying information in relation to the owner/operator of SFHUK.com. The order provided for its service by email to [email protected] and [email protected] and two physical addresses, one in Tokyo and the other in Panama. There was no response. So when, on 28 July 2015, the claimants started this action claiming damages for libel and an injunction to restrain the continued publication of the words complained of, they issued their claim form against Persons Unknown.
The legitimacy of this procedure has been recognised for over a decade, since Bloomsbury Publishing Group plc v News Group Newspapers Ltd [2003] 1 WLR 1633. It is necessary for the unknown persons to be identified by description, in such a way as to identify with certainty those who are included within it and those who are not. That criterion has been met here by describing the defendants as "Persons Unknown responsible for the operation and publication of the website [SFUK.com]".
There is no difficulty in principle, if an action may be brought against persons unknown, in granting an injunction to restrain those persons from carrying out acts such as the misuse of unlawfully obtained copies of a book prior to its official publication date (as in the Bloomsbury case), or harassment (as in Stone & Williams v "WXY" [2012] EWHC 3184 (QB), and Kerner v WX [2015] EWHC 128 (QB)). In each of the last two cases the defendants were described as "Persons Unknown responsible for pursuing and/or taking photographs of" the claimants at specified places on specified dates.
Although the injunctions granted in the cases just cited were all interim, the court can grant final injunctive relief against persons unknown. McGowan J did so in Novartis Pharmaceuticals UK Ltd v Stop Huntingdon Animal Cruelty & Ors [2014] EWHC 3429 (QB), where she concluded on the written evidence put before her that the test for summary judgment in CPR 24.2 was satisfied.
The relevant procedural safeguards must of course be applied. A difficulty that can arise in cases of this kind is that of ensuring that the unknown defendants have been duly served with the proceedings, and with any application for interim or final relief. Kerner v XY provides an illustration of some of the difficulties: see the judgments at [2015] EWHC 178 (QB) and [2015] EWHC 1247 (QB). In the present case, however, the claimant applied on 28 July 2015, the day the claim form was issued, for permission pursuant to CPR 6.15 to serve the claim form, Particulars of Claim, any other statements of case, application notices and documents in these proceedings by an alternative method, namely by email to the two addresses mentioned above. Master McCloud allowed that application to be made without service on the defendants, and granted permission. As submitted by the claimant, the email addresses are given as contact addresses by Anonymous Speech, and it is reasonable to infer that they are genuine addresses, and that emails sent to them will be brought to the attention of the domain owners.
On the evening of 28 July the claimant emailed those two addresses with the claim form, Particulars of Claim, Response Pack, Master McCloud's order and the documents that had been put before her. Certificates of service were completed the following day, pursuant to CPR 6.17(2). I am satisfied that the proceedings were duly served. Pursuant to CPR 23.10(1) the defendants had the right to apply to set aside or vary the order of Master McCloud. Paragraph 3 of the order itself pointed this out. The time limit for making such an application is 7 days after the date the order was served on the person making the application: r 23.10(2). No such application was made within that time limit, or at all. Nor did the defendants file an acknowledgment of service or a defence by the deadline for doing so which has been calculated as, and I accept was, 13 August 2015. Indeed, nothing at all has been heard from the defendants.
It is against that background that on 19 August 2015 the claimants issued the application now before me, and served it on the defendants by the method authorised by the order of Master McCloud. The application seeks, inevitably, default judgment pursuant to CPR 12.3(1) and 12.4(2). It also seeks "summary disposal of the case pursuant to section 8 of the Defamation Act 1996 with the following relief: (a) damages, (b) an injunction and (c) costs." The application is supported by a witness statement of Mr Iain Wilson, a partner in the claimant firm. Mr Wilson is not a solicitor-advocate but has prepared a skeleton argument and appeared before me on the application and I have allowed him to advance submissions.
The first issue to be addressed is whether it is right to hear and dispose of the claimant's application in the absence of the defendants. I accept Mr Wilson's submission that I should follow the approach I identified in Sloutsker v Romanova [2015] EWHC 545 (QB) [22]-[23]:
"Where a party fails to appear at the hearing of an application the court may proceed in their absence: CPR 23.11. This is a power that must be exercised in accordance with the overriding objective. Ms Page properly referred me to authority making it clear that the court should be very careful before concluding that it is appropriate to proceed in the absence of a litigant in person who is seeking for the first time to adjourn a hearing: Fox v Graham Group Ltd (26 July 2001) (Neuberger J); SmithKline Beecham Ltd v GSKline Ltd [2011] EWHC 169 (Ch) (Arnold J), [6]. That is not the situation here, however. The defendant has not sought an adjournment. …
Where a litigant fails to appear without giving a reason it is necessary to consider first whether they have had proper notice of the hearing date and the matters, including the evidence, to be considered at the hearing. If satisfied that such notice has been given, the court must examine the available evidence as to the reasons why the litigant has not appeared, to see if this provides a ground for adjourning the hearing."
The application in Sloutsker was the defendant's application to set aside service of proceedings on her outside the jurisdiction. In the present case, as Mr Wilson fairly points out, there is another important facet to the requirement of proper notice, in the form of s 12(2) of the Human Rights Act 1998. Section 12 is engaged because the order the claimants seek involves "relief which, if granted, might affect the exercise of the Convention right to freedom of expression" within the meaning of s 12(1). Section 12(2) prohibits the court from granting such relief if the respondent is neither present nor represented, unless satisfied "(a) that the applicant has taken all reasonable steps to notify the respondent; or (b) that there are compelling reasons why the respondent should not be notified."
There is clearly no good reason for not notifying the defendants in this case. But I am satisfied that the claimant has taken all reasonable steps to notify them. I am satisfied that the defendants have in fact had notice, and an adequate time to respond if they chose. As I have already noted, it is reasonable to infer that emails sent to the Anonymous Speech addresses have come to the attention of those responsible for the operation of SFHUK.com. Indeed, that is in my view highly probable. The inference I draw is that the reason why the defendants are not present or represented at this hearing is that they wish to remain anonymous, and are "hiding". They have decided, in my judgment, to avoid engaging with the court process. I see no reason not to proceed in their absence. On the contrary, there is good reason to proceed in their absence. Any other course would lead to delay and further cost, without any justification.
The conditions for obtaining judgment in default of an acknowledgment of service prescribed by CPR 12.3(1) are met: the time for filing an acknowledgement of service or defence has expired, and neither has been filed. This is not a case in which default judgment can be obtained by filing a request pursuant to CPR 12.4(1). The claimant has, as required by CPR 12.4(2), made an application pursuant to CPR 23.
The claimant's entitlement on such an application is to "such judgment as it appears to the court that the claimant is entitled to on his statement of case": CPR 23.11(1). I accept Mr Wilson's submission that I should interpret and apply those words in the same way as I did in Sloutsker v Romanova [2015] EWHC 2053 (QB) at [84]:
"This rule enables the court to proceed on the basis of the claimant's unchallenged particulars of claim. There is no need to adduce evidence or for findings of fact to be made in cases where the defendant has not disputed the claimant's allegations. That in my judgment will normally be the right approach for the court to take. Examination of the merits will usually involve unnecessary expenditure of time and resources and hence [be] contrary to the overriding objective. It also runs the risk of needlessly complicating matters if an application is later made to set aside the default judgment: see QRS v Beach [2014] EWHC 4189 (QB), [2015] 1 WLR 2701 esp at [53]-[56]. "
As I said in the same judgment at [86], "the general approach outlined above could need modification in an appropriate case, for instance if the court concluded that the claimant's interpretation of the words complained of was wildly extravagant and impossible, or that the words were clearly not defamatory in their tendency." Those instances of circumstances which might require departure from the general rule are not exhaustive, but only examples. I have considered whether there is any feature of the present case that might require me to consider evidence, rather than the claimant's pleaded case, verified by a statement of truth and uncontradicted by the defendants. I do not think there is any such feature. I have therefore proceeded on the basis of the pleaded case, both in my introductory description of the facts above, and in reaching the conclusion that the claimant has established its right to recover damages for libel, and to appropriate injunctions to ensure that the libel is not further published by the defendants.
In reaching those conclusions I have considered first the question of jurisdiction. Section 10(1) of the Defamation Act 2013 provides as follows:
"(1) A court does not have jurisdiction to hear and determine an action for defamation brought against a person who was not the author, editor or publisher of the statement complained of unless the court is satisfied that it is not reasonably practicable for an action to be brought against the author, editor or publisher."
Section 10(2) of the 2013 Act provides that the terms 'author', 'editor' and 'publisher' in this context have the same meaning as in s 1 of the Defamation Act 1996. That section provides so far as material as follows:
"(2) For this purpose "author", "editor" and "publisher" have the following meanings, which are further explained in subsection (3)—
"author" means the originator of the statement, but does not include a person who did not intend that his statement be published at all;
"editor" means a person having editorial or equivalent responsibility for the content of the statement or the decision to publish it; and
"publisher" means a commercial publisher, that is, a person whose business is issuing material to the public, or a section of the public, who issues material containing the statement in the course of that business.
(3) A person shall not be considered the author, editor or publisher of a statement if he is only involved—
(a) in printing, producing, distributing or selling printed material containing the statement;
(b) in processing, making copies of, distributing, exhibiting or selling a film or sound recording (as defined in Part I of the Copyright, Designs and Patents Act 1988) containing the statement;
(c) in processing, making copies of, distributing or selling any electronic medium in or on which the statement is recorded, or in operating or providing any equipment, system or service by means of which the statement is retrieved, copied, distributed or made available in electronic form;
(d) as the broadcaster of a live programme containing the statement in circumstances in which he has no effective control over the maker of the statement;
(e) as the operator of or provider of access to a communications system by means of which the statement is transmitted, or made available, by a person over whom he has no effective control.
In a case not within paragraphs (a) to (e) the court may have regard to those provisions by way of analogy in deciding whether a person is to be considered the author, editor or publisher of a statement."
The defendants in the present case are described in the title to the action as persons 'responsible for the operation and publication of' SFHUK.com. They are described in paragraph 3 of the Particulars of Claim as 'an individual or group of individuals who has/have established and run a website at … [SFHUK.com].' Paragraph 5 alleged that SFHUK.com is 'a website that produces its own content and apparently allows third parties to submit material for publication.' In paragraph 14 the Particulars of Claim allege that the defendants 'published or caused to be published, and are continuing to publish, on SFHUK.com' the words complained of.
The Particulars of Claim do not allege that the defendants are in the 'business' of issuing material to the public, or contain any similar allegation. It seems that the defendants are likely to fall outside the scope of the term 'publisher', as defined by s 1 of the 1996 Act. I cannot conclude, on the pleaded case, that they fall within it. The claimant has not alleged, either, that the defendants are the 'authors' of any of the words complained of, or made any similar allegation. Indeed, in paragraph 39 of the Particulars of Claim it is said that 'It is not known whether the publication has been authored by the Defendant(s) or whether it has been submitted by a third party.' I am satisfied, however, that on the claimant's pleaded factual case the persons unknown who are the defendants to this action are persons within the definition of "editor" in s 1(2), and that they are not within any of the categories described in s 1(3)(a) to (e), or any analogous category. The court therefore has jurisdiction.
That conclusion means it is not necessary for me to address the pleaded allegation in paragraph 39 of the Particulars of Claim that "if [the publication] has been submitted by a third party it is not possible to identify him/her from the publication and it is therefore not practicable (or indeed possible) to bring an action against him/her." I would however say in passing that whilst the evidential position may be different I am not sure that this pleading would suffice to satisfy the proviso to s 10.
The Particulars of Claim allege that the words which the defendants published or caused to be published on SFHUK.com bore the following defamatory meanings:-
"(a) The Claimant is a shameless, corrupt, fraudulent, dishonest, unethical, incompetent and oppressive firm of solicitors which does not provide competent services, has had a justified complaint made against them and whose wrongdoing should be exposed to prevent others from suffering by instructing them.
(b) The Claimant unscrupulously inflates costs.
(c) The quality of the Claimant's work is sub-standard and poor value for money.
(d) The Claimant's staff and/or partners are guilty of committing the imprisonable offence of harassment contrary to section 1 of the Protection from Harassment Act 1997.
(e) The Claimant breaches its professional obligations and acts contrary to the Solicitors Regulation Authority's Code of Conduct.
(f) The Claimant's staff and/or partners are rude, threatening, intimidating and unprofessional.
(g) The Claimant 'strong-armed' payment from a former client that was not owed or warranted and thus committed an offence contrary to section 40 of the Administration of Justice of Act 1970.
(h) Prospective clients seeking to instruct the Claimant will receive sub-standard advice and lose out financially."
The allegation that the words bore these meanings is an uncontradicted allegation of fact, and it is not one that I consider extravagant. I proceed on the basis that these are the natural and ordinary meanings of the words complained of. The meanings plainly have a defamatory tendency. Section 1(1) of the Defamation Act 2013 provides however that "A statement is not defamatory unless its publication has caused or is likely to cause serious harm to the reputation of the claimant". And by s 1(2) it is provided that "For the purposes of this section, harm to the reputation of a body that trades for profit is not 'serious harm' unless it has caused or is likely to cause the body serious financial loss." The claimant is clearly a body that trades for profit.
Allegations relevant to these requirements are made in paragraph 2 of the Particulars of Claim, which describes the claimant. Further relevant allegations are made in paragraphs 16 to 29, which appear under the heading "Serious harm to reputation and financial harm".
Paragraph 16 states that "The Claimant believes that the publication of the defamatory words has caused serious harm to its reputation. It also believes that the publication has caused it serious financial harm." This could be criticised as a statement of belief rather than a statement of fact. I note also that the statutory term is "financial loss" not "financial harm". If no more had been pleaded I would have felt uneasy about granting default judgment. I would have had to ask myself if these allegations were enough to show that the serious harm requirement is met. In the event, enough is alleged in other parts of the Particulars of Claim to satisfy me that the requirement is met.
The features of the pleaded case that lead me to that conclusion are these:
i) The claimant is a "'boutique' firm of solicitors based in London" with two departments, one specialising in "defamation, privacy and harassment law", and the other in "criminal litigation, civil fraud, regulatory and disciplinary proceedings" (para 2).
ii) "The firm is relatively small and is only five years old. Traditionally it has attracted a considerable amount of work from the internet. Where work comes from a different source, it is usual for the prospective client to undertake some sort of 'due dilligence', this would typically involve a Google search." (para 21).
iii) For six months, Google searches for Brett Wilson LLP or Brett Wilson solicitors have produced the following result and snippet within the top five listings, immediately below links to the firm's own website (para 19):
"SOLICITORS FROM HELL - Brett Wilson LLP Solicitors ...
[web address given]
Rude, intimidating and threatening. Clients should stay well away from Brett Wilson Solicitors.Have you complained about your solicitor and got nowhere?"
iv) "… the publication has been read, and will inevitably continue to be read, by a number of prospective clients considering instructing the Claimant and undertaking research on the Claimant's reputation" (para 22).
v) "It is inevitable that a number of prospective clients who have read (or will read) the snippet and publication have decided (or will decide) not to instruct Brett Wilson LLP as a result of what has been published."
vi) "The loss of a single instruction can cost the firm tens of thousands of pounds (and in some instances more)."
vii) "… on 20 April 2015 a litigation opponent raised the publication as evidence that the Claimant was a disreputable firm."
viii) "… on 25 July 2015 a prospective client who had previoulsy indicated he wished to instruct the firm withdrew his instructions as a result of the publication."
ix) "It can be inferred that there will have been a far greater number of instances where an individual has read the publication or search result snippet and not notified the Claimant. That is, they have simply decided to 'go elsewhere'. …"
x) "The Claimant believe[s] that there has been a noticeable drop in the conversion of enquiries from prospective clients to instructions over the past six months. …"
xi) The Claimant has suffered financial loss …"
Whilst the allegation quoted at [29] (x) suffers from the same deficiency as paragraph 16, these pleaded allegations taken overall are in my judgment sufficient to make out a case of serious financial loss. I need say little to elaborate on that. "Serious" is an ordinary English word. I would only add that whether loss is serious must depend on the context.
This is enough to justify judgment for damages to be assessed. It is not necessary for that purpose to allege falsity, although the Particulars of Claim do so – no doubt for the purpose of supporting the claim for an injunction.
I am satisfied that the pleaded allegations make out a case for the grant of injunctions against the defendants. It is alleged that the defendants have published allegations of a highly defamatory nature, which have caused serious financial loss, and that they are continuing to do so. It is alleged that the allegations are false. None of this has been contested by the defendants. The Particulars of Claim also set out the defendants' failure to respond to the letter of claim and these proceedings.
Because s 12 of the HRA is engaged I must have particular regard to the importance of the Convention right to freedom of expression: s 12(4). I must be satisfied that the injunctive relief granted represents an interference which is necessary in the pursuit of a legitimate aim, and goes no further than required. I am so satisfied. The legitimate aim is the protection of the reputation of the claimant against false and damaging allegations of misconduct. I bear in mind that it is contrary to the public interest for false or misleading information to be issued on matters of this kind.
The injunctions now sought are both prohibitory and mandatory. The mandatory orders are for the removal from the World Wide Web of specified webpages, and the removal from the SFHUK.com website of any metadata or search engine links which refer to the claimant as 'solicitors from hell' or 'lawyers from hell'. I hesitated at first over the mandatory orders, for two reasons. I was initially concerned that these orders went beyond what is sought in the Particulars of Claim. These claimed a negative injunction. However, there is a prayer for 'further or other relief.' Secondly, I wondered if mandatory orders would impose obligations which the defendants might be unable in practice to perform. However, given the way the defendants are described and defined, I consider that these aspects of the order sought are legitimate.
The orders for damages to be assessed and for final injunctions to which I have just referred are available to the court on the application for default judgment. As I have explained, however, the claimant's application notice also seeks summary disposal pursuant to ss 8 and 9 of the Defamation Act 1996. Section 8 allows the court to give judgment for the claimant in a defamation case and grant "summary relief" if it appears to the court "that there is no defence to the claim which has a realistic prospect of success and no other reason why the claim should be tried." Summary relief is defined by s 9:
"9.— Meaning of summary relief.
(1) For the purposes of section 8 (summary disposal of claim) "summary relief" means such of the following as may be appropriate—
(a) a declaration that the statement was false and defamatory of the plaintiff;
(b) an order that the defendant publish or cause to be published a suitable correction and apology;
(c) damages not exceeding £10,000 or such other amount as may be prescribed by order of the Lord Chancellor;
(d) an order restraining the defendant from publishing or further publishing the matter complained of.
This has been a relatively little-used procedure. That is probably because summary judgment under CPR 24 is now available in defamation cases, and the damages recoverable by way of summary relief remain capped at £10,000, as they were when the procedure was first enacted. The procedure is invoked here, however, in order to bring a swift end to the matter and avoid assessment proceedings which might well be disproportionately expensive. The claimant does not seek a declaration of falsity or any order for an apology. The application is for damages of £10,000 and an injunction. The procedure has been used in similar circumstances and for similar reasons before, for example in Robins v Kordowski [2011] EWHC 1912 (QB).
In Robins Tugendhat J held at [55]-[57] that the jurisdiction to grant summary disposal is available after the court has entered default judgment for damages to be assessed. He applied the reasoning of the Court of Appeal in Loutchansky v Times Newspapers Ltd [2001] EWCA Civ 1805, [2002] QB 783, where judgment on the merits had been entered after a trial. Tugendhat J concluded that the criteria for summary disposal were satisfied and assessed damages at £10,000. I am invited to do likewise.
For these purposes I can and should have regard to evidence. CPR 53.2 provides that "In proceedings for summary disposal … rules 24.4 (procedure), 24.5 (evidence) and 24.6 (directions) apply." I have allowed the claimant to apply for summary disposal although no acknowledgement of service or defence has been filed. The witness statement of Mr Wilson was served in time, in compliance with rule 24.4. CPR 24.5 and 24.6 are inapplicable to this case.
Given what I have said already it is easy to conclude that Mr Wilson is correct when he asserts in paragraph 25 of his witness statement that there is no defence to the claim, and no other reason why it should be tried. In reaching this conclusion I have considered the five matters to which s 8(4) of the 1996 Act directs me to have regard in deciding whether there is a reason for the claim to be tried. I accept also that the claimant is entitled to an award of the maximum sum available by way of damages under s 9(1), that is to say £10,000.
For this purpose the claimant relies on the matters pleaded in paragraphs 16 to 29 and 40 of the Particulars of Claim, the material parts of which I have quoted in paragraph [29] above, and some supplementary evidence contained in the witness statements of Mr Wilson and Emma Lyons. Ms Lyons is Head of Search at Eight&Four digital marketing company, and runs digital marketing campaigns for corporate clients including the claimant. Her evidence is that between 15 January and 27 July 2015 some 276 individuals carried out a search on Google for "Brett Wilson LLP" or "Brett Wilson solicitors". She is able to provide this figure because the firm has a Google Pay per Click account, which allows one to see how many users have carried out a search of a particular term. A further six weeks have passed since 27 July 2015 and the offending words have remained online, with the snippet cited above returned among the top search results.
Mr Wilson's statement supports, evidentially, what is alleged in the Particulars of Claim about the response of individual clients to the publication complained of.
It is beyond dispute that the words complained of had a clear tendency to put people off dealing with the claimant firm. That was their evident purpose. The allegations are serious, and would be likely to deter anybody unfamiliar with the firm from engaging its services. There is affirmative evidence that in all probability one client was deterred, with probable financial loss. I bear in mind that of the 276 searches identified by Ms Lyons, some may have been repeats, and some may not have been serious enquiries, likely to lead to an instruction. Equally, however, the continued publication during August and September and the "grapevine" effect of publication including, if not especially, online publication must mean that the numbers to whom the defamatory messages were conveyed are very likely to be substantially larger. I have no doubt that others were put off, and that there has been a financially damaging impact on a serious scale. Quite apart from this, the award needs to serve the purpose of vindication.
Mr Wilson draws my attention to other awards made in comparable circumstances. He mentions not only Robins but also Farrall v Kordowski [2011] EWHC 2140 (QB), Hussein v Hamilton Franks & Co Ltd [2013] EWHC 462 (QB) and The Bussey Law Firm PC v Page [2015] EWHC 563 (QB). Farrall, like the present case, concerned a posting criticising the competence and integrity of a solicitor. The posting was thought to have been live for about a month. On an application under ss 8 and 9 of the 1996 Act in a claim which was undefended Lloyd-Jones J awarded £10,000. Hussein also involved an online "blacklist", on which the claimants were accused of fraud. On an assessment of damages, three foreign Claimants were awarded £20,000, £10,000 and £10,000. In The Bussey Firm a US law firm and its principal sued an English defendant who had published a false and defamatory review on Google maps that was live for approximately 12 months, alleging that the principal "pays for false reviews and loses 80% of his cases". After a trial Sir David Eady assessed damages for the law firm "conservatively, at £25,000".
Every case depends on its own facts, but these four cases lend some support to my conclusion that the award of £10,000 is amply merited on the facts of the present case.
That disposes of the claim for summary relief in the form of damages. Section 9(1)(d) of the 1996 Act allows me to prohibit republication but does not at least in terms give me power to grant mandatory injunctions as part of an order for summary relief. As I have explained, however, I have power to grant the injunctions sought as part of the default judgment process. It is better to use that power in this case, and I do.
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His Honour Judge Simpkiss:
Introduction
On 1st July 2011 the First Claimant entered into a farm business tenancy agreement ("the FBT") with a company known as Wyldecrest Properties Limited which is a company registered in the register of companies under 6914944 ("WPL") to rent a farm known as Park Farm, Northaw Road West, Northaw Hertfordshire ("Park Farm") for a term of 5 years.
Thereafter the Claimant ran a business from Park Farm. The Second Claimant is a company owned and controlled by the First Claimant. In connection with the business activities, both Claimants owned items of property which were kept on Park Farm. Their case is that these included items of machinery such as a tractor, quad bikes, a hay cutter, containers and other items connected with the business.
The main business run at Park Farm was a livery business but other activities took place such as moto-cross and quad bike racing.
The Second Defendant is the freehold owner of Park Farm. It is common ground that WPL never had any legal interest in the property and no evidence has been adduced that it had any interest out of which it could grant the tenancy to the First Claimant. The Second Defendant's case is that on 15th or 17th February 2013 a section 146 notice was served on the First Claimant giving him 90 days notice to remedy various alleged breaches of the FTL. These mostly comprised allegations that he had erected buildings carried out works or actions on Park Farm in breach of the terms of the FBL and without planning permission. The First Claimant says that the section 146 notice was never served on him and asserted in these proceedings that it was in fact drafted at a later date. The February section 146 notice names WPL as the landlord and the second version names the First Defendant as the landlord. Neither makes any mention of the freeholder, the Second Defendant.
On 7th June 2013 the Second Defendant re-entered Park Farm and took possession.
The Claimants bring these proceedings to recover damages as a consequence of this re-possession. They allege that the re-possession was unlawful and that they have lost profit from the business as a result. They also claim damages for loss of items on the property which they say they have not recovered and have not been returned.
The Defendants' case is straightforward. They say that the Second Defendant is entitled to possession as freeholder. There is no tenancy binding on them and the Second Defendant was entitled to possession irrespective of the validity of the section 146 notices.
The way in which the pleadings in this case have developed is thoroughly unsatisfactory, despite amendments at earlier stages, and there were very lengthy part 18 requests. There have been numerous interim applications for disclosure. At one of these in February 2015, Master Eyre gave written reasons which he attached to the order. These make clear that he considered the case to be in a chaotic state. I agree with his views.
At the start of the trial (having heard 2 peripheral witnesses who were not available later in the trial period) I had a discussion with both counsel about the case. Mr. Brown set out his case and, as a result, Mr. Dutton made it clear that he considered that there were some serious pleading and evidential points. I indicated that if any application was going to be made to amend the pleadings or to admit additional evidence I would need to see the amendments and the new evidence in writing.
Mr. Brown made these applications on the second morning of the trial. I rejected the application to adduce new evidence on grounds I gave in a separate ruling. The amendments to the particulars of claim, to a significant extent, either brought into the particulars of claim material that had previously been pleaded in the amended reply and defence to counterclaim or amounted to assertions of the legal consequences of previously pleaded facts. Although Mr. Dutton opposed the application, he did not make a great deal of fuss about this and did not suggest that he was prejudiced.
I am therefore satisfied that the issues which I need to deal with are clarified sufficiently to enable the trial to proceed. One further development greatly assisted in narrowing or, rather, focussing the issues. Having considered the position in the light of the application hearing that morning, Mr. Dutton made a statement that he did not intend to call any evidence and intended only to cross examine the Claimants' witnesses on issues which he regarded as relevant, on the basis that this did not mean that his side accepted all the other evidence, some of which made significant but un-pleaded allegations against the Second Defendant. Mr. Dutton made it clear that he appreciated that it was his judgment whether the evidence was relevant to the issues which arise in this case. In consequence, some of the issues which had appeared to arise no longer do and Mr. Dutton made various concessions which I will set out once I set out in more detail the issues which arise.
The issues
The unlawful eviction issue
The case advanced in the original particulars of claim was based on a right to possession of Park Farm by reason of the FBT. It was alleged that the tenancy had not been terminated and therefore when the Defendants re-entered the property they did so unlawfully.
In the original defence it was pleaded that WPL had entered into the FBT "as agent for D2" and that the First Defendant had subsequently taken over the agency "in relation to the letting". The Defendants' amended defence pleaded primarily that the Second Defendant was, as freehold owner, entitled to possession by reason of title paramount. The amended pleading drew attention to the omission from the particulars of claim of any case that the First Claimant's entitlement to possession defeated the Second Defendant's freehold title. It did however plead that in the event that the Claimants sought to amend the particulars of claim to plead that the FBT was entered into as agent for the Second Defendant then such an allegation would be admitted. In which case, the Second Defendant was entitled to re-enter Park Farm when he did because of the breaches of the tenancy agreement as set out in the section 146 notice and pleaded in the original defence.
In the reply and defence to counterclaim, the Claimants pleaded various matters which, they say, demonstrates that the landlord was intended to be WPL and not the Second Defendant. There are 2 grounds relied on:
a. The doctrine of apparent ownership;
b. Estoppel by representation. The precise terms of the alleged representation are important and have developed during this case. The pleading in the reply and defence to counterclaim was in the following terms: "D2 represented to C1 that Wyldecrest Properties Limited was the owner of such proprietary interest as to permit it to grant the term which it agreed to grant to the C1".
An alternative case is also pleaded to cover the eventuality that the court finds in favour of the Second Defendant's allegation that the tenancy was granted by the Second Defendant and not WPL then the Second Defendant is bound by the FBT as an undisclosed principal.
The concession made by Mr. Dutton after lunch on the second day of the trial as a consequence of his decision not to call any evidence was as follows: If the court were to find that an estoppel arose, such as to prevent the Defendants from alleging that the existence of the tenancy granted by the FTT was binding on them, then the Defendants would have to accept that their actions in re-entering Park Farm were not the actions of WPL or any other because there was no evidence that WPL had adopted or condoned the Defendants' re-entry. Therefore it was irrelevant whether WPL was entitled to forfeit the FTA. Accordingly, the counterclaim should be dismissed.
Following the amendment to the particulars of claim which I permitted at trial, the Claimants say that by reason of a representation that WPL was entitled to such interest in Park farm as would permit it to grant the term agreed, the Second Defendant is estopped. The only new allegation is that the Second Defendant is derogating from grant by re-entering.
The remaining issues
The issue of the loss of the chattels arises whether the Claimant succeeds on the first issue or not. The issues are as follows:
a. Whether, and if so what, chattels were on Park Farm belonging to the Claimants and have not been returned since the re-entry;
b. The value of those items;
c. In the case of certain items there are issues whether they are fixtures or fittings.
The issue of the trading losses is dependent upon the decision about the lawfulness of the re-entry. If it was lawful, then this issue goes. If it was unlawful then there are factual and valuation issues which arise and about which I heard factual and expert evidence.
The witnesses
The Defendants elected to call no evidence, although witness statements were served shortly before the trial they were not relied upon, save that some exhibited documents were referred to in cross-examination.
There were also expert reports from 2 jointly instructed experts: Philip de Nahlik an accountant and Geoffrey Fairfoull who valued various of the items. No party indicated that they wished to cross-examine any of them, although in his oral evidence and witness statement the First Claimant stated that he did not accept all their conclusions and he and his partner, Ms. Davie, sought to give evidence to challenge some of the conclusions. I will deal with this later when I come to the issues relating to the chattels.
For the Claimant, a number of witness statements were served and there were also gist statements of people who had been summoned but had not provided statements. In the end, Mr. Brown submitted that he intended to rely only on the evidence of the witnesses who had been called at trial plus Mr. Clive Jefferson whose statement was agreed. The two main witnesses were the First Claimant and his partner of 23 years, and the mother of their 3 children, Denise Davie. The other witnesses were all people who had had some dealings with Park Farm, either as people who kept horses there or who had farm business dealings with the Claimants. They were all transparently honest and straightforward, although the degree to which they were able to give sufficiently precise evidence of items that they had seen at the farm varied and was not always reliable – understandably since they were on the farm for other reasons and not to carry out an inventory. Their evidence was helpful where it was reliable and I will refer to those parts where necessary.
I did not find the First Claimant a reliable witness. He has made some extremely serious allegations or assertions against the Second Defendant. For example, there is an allegation that shortly before the re-entry the Second Defendant made explicit threats to burn down the house in which he was living and to burn his cars. Threats are also alleged that he would harm the First Claimant's family and children and that on one occasion he was directly threatened with a gun. Subsequently 4 cars belonging to the Claimants were burned. Other serious allegations were made about the Second Defendant's business practices (that he is a bully and a thug) and that he had set about a course of conduct whereby he has evicted the Claimants from Park Farm at a stage when they had set up a thriving business, and taken it over for his own benefit. If these allegations are true (or could be proved) then it is extremely surprising that there is no claim made in relation to them or that the police were not informed at an early stage. The gun threat was reported to the police by the First Claimant but only after the lapse of a year. There is no independent evidence to support any of these allegations – some of which are sweeping and completely unsupported by any evidence at all.
Despite the allegedly horrendous behaviour by Mr. Best towards the First Claimant and his family it is simply not believable that he would wish to continue to be a tenant, yet in the late Spring/early summer of 2013 he was forging ahead with the business, purchasing very expensive machinery and indicating to Mr. Fitzjohn (who gave evidence for him) that he was going to purchase equipment so that he could be self-sufficient in hay making. Mr. Fitzjohn said that the cost of the necessary equipment was in the tens of thousands. These are not the actions of someone who has been the subject of such serious threats.
His evidence about the acquisition of the Second Claimant and of entering into the FBT was both vague and unsatisfactory. Ms. Davie had said in her evidence that she and the First Claimant had discussed what they were going to do beforehand and that the intention was that the First Claimant would take the tenancy and that the Second Claimant would carry on the business at the farm. The First Claimant was not anything like as clear about this.
The background is that he had been made bankrupt in 2005. In the course of the bankruptcy the First Claimant gave Bankruptcy Restriction Undertakings on 27th September 2006 which were to last for 9 years 9 months which was at the top of the middle range of disqualification as set out by the Court of Appeal in Re Sevenoaks Stationers (Retail) Ltd [1991] Ch 164). He was asked in cross-examination whether he knew that he might be breaching the undertakings (and thereby committing a criminal offence) by becoming a director of the Second Claimant and by his involvement in the business. He said that he had not been and that this was, at least partly, because he did not have legal representation. I do not believe him. The undertakings would have been clear. He did not need legal advice in order to understand what he was debarred from doing or the consequences. Unless he had been completely disinterested in the effect of the undertakings, which I very much doubt, it is inconceivable that he was unaware of their length and effect. Even it that is not correct, he was at least reckless as to whether he was breaching the undertakings. His attitude towards the FBA is also informative in this regard. He was asked whether it occurred to him that some of the work which he did at the farm – such as putting up stables and building tracks and a manege – were in breach of the terms of the tenancy (which required written permission from the landlord). He said that he had been informed verbally by the Second Defendant at the time he signed it that he could do what he liked so long as he paid the rent. He said that he had read the FBA "briefly" and acknowledged that he was aware of some of the significant clauses but ignored them.
The First Claimant was cross-examined about a number of matters. He found it extremely difficult to give a direct and straightforward answer to a simple and straightforward question, regularly trying to provide an answer to the point behind the question without answering the question itself.
If his account of the way in which the business was managed is correct, then he doesn't appear to have paid much attention to VAT requirements. After a long period of cross-examination during which his answers were very unclear, it became apparent that the machinery and assets were paid for through the Second Defendant because it was registered for VAT. That did not mean that all the income from the farm was channelled through the company because his evidence was that some (it was not clear what proportion) of the individuals who kept horses in livery at the farm were not charged VAT, whereas other were. This was because the Second Claimant was registered for VAT but he was not. Therefore he invoiced from some services and the company for others.
The overall impression from the First Claimant's evidence is that he is not being frank about a number of matters, is well aware of his use of Ms. Davie to mask his involvement in business in order to get round the undertakings (albeit that they have now been discharged).
Ms. Davie also gave oral evidence. She said that after university she had worked in the financial sector most of her working life and therefore was well aware of financial matters and running a business. After a break, following the birth of their third child, she went back to work in 2009/2010 working with the First Claimant in a business of buying and selling cars which operated from their home. She told me that she was running this business although both of them shared decisions "mostly using my bank account". She was asked whether this was because of the First Claimant's bankruptcy and said that he didn't have a bank account.
I find it hard to believe her when Ms. Davie said that she was working in this business on her own account since both seem to have been heavily involved. I find it impossible to believe that she knew nothing of the bankruptcy undertaking (although she told me that she did not). She agreed that they discussed the bankruptcy, but the length of the undertaking strongly suggests that it was a significant matter and although the terms were not directly produced in court, it should have been a very serious concern to anyone setting up in a business with which he had any involvement. She accepts that they discussed the bankruptcy and knew he was disqualified but was unaware of the length or that he was prevented from becoming a director or managing a business. I find this impossible to accept. I also found her unconvincing in her attempts to persuade me that she was running the business of the Second Claimant and made all the decisions (albeit in discussion with the First Claimant) and she was unable to explain with any degree of conviction why the FBT was granted to the First Claimant and not to her. I do not believe that she has given me a frank account of the matters about which she was cross-examined. I also agree that her explanation of where the capital of £69,687 which she says she put into the Second Claimant was not anything like as clear as one would expect from someone who said she had provided that money. She said that she had raised it by mortgaging a property which she owned in France but was very vague about this.
My judgment is that neither the First Claimant nor Ms Davie's evidence was entirely candid and that I should therefore treat their uncorroborated evidence with great caution.
The trespass to land claim
The law
The Defendant's starting point is that where a tenancy is created by lease or tenancy agreement, the original parties to the tenancy are identified by looking at the document which creates the tenancy. It is not permissible to adduce evidence that the person was acting as agent for an undisclosed principle (Hanstown Properties v Green [1978] 1 EGLR 85). It is permissible to adduce evidence that the person who was acting as agent for a disclosed principle but only if that person was the tenant (Danziger v Thompson [1944] 1 KB 654).
Mr. Brown referred me to passage in Woodfall vol 1 at 5.014:
"Where a lease is taken by a person as an agent for another, evidence is admissible to prove that fact, although evidence is not admissible to reveal the existence of an undisclosed principle."
Mr. Brown submitted that the Claimants could not adduce evidence to show that Mr. Best was the undisclosed principle and that he was therefore the landlord. This, he said, was why equitable principles had to come into play. He said that a freehold owner cannot on one day grant a lease to a tenant in the name of a third party which has no interest in the land (and sign the lease as representative of that third party) and on the next day go into possession of the property on the basis of title paramount.
The question in this case is whether equity will intervene. This will only occur if the Claimant can succeed in bringing his claim within the principles of estoppel by representation or apparent authority.
Estoppel
The principles applicable in order to establish and estoppel by representation are well known. The person claiming the estoppel must prove the following:
a. A representation by words or conduct of an existing fact;
b. Which is clear and unambiguous; and
c. Is inconsistent with the factual situation which the maker is now seeking to advance.
The principle is succinctly explained by Lord Denman CJ in Pickard v Sears (1897) 6 Ad & E 469:
"but the rule of law is clear, that, where one by his words or conduct wilfully causes another to believe the existence of a certain state of things, and induces him to act on that belief, so as to alter his own previous position, the former is concluded from averring against the latter a different state of things as existing at the same time; and the plaintiff, in this case, might have parted with his interest in the property by verbal gift or sale, without any of those formalities that throw technical obstacles in the way of legal evidence. And we think his conduct, in standing by and giving a kind of sanction to the proceedings under the execution, was a fact of such a nature, that the opinion of the jury ought, in conformity to [two authorities cited] to have been taken, whether he had not, in point of fact ceased to be owner".
Apparent ownership
The first point to note is that this is a very different legal animal to the doctrine of apparent authority. The latter arises where the owner ("O") or principal allows or is taken to have allowed someone else ("A") to hold himself out as having authority to enter into a contract as agent for the principal. Apparent authority arises where A enters into a disposition of property as owner and the true owner is not involved in the sales process. O is then fixed with whatever has gone on between A and the third party by some form of estoppel. Ostensible or apparent ownership applies where there is a sale so that the true owner is debarred from contending that A is unable to pass title to the purchaser. The authorities all relate to transactions involving goods.
Mr. Brown referred me to Bowstead on Agency 19th ed 8-129:
"8-129
Where a principle, by words or conduct, represents or permits it to be represented that his agent is the owner of any property, any sale, pledge, mortgage or other disposition for value of the property by the agent is as valid against the principal as if the agent were its owner, with respect to anyone dealing with him on the faith of such representation".
The comment below this states that the proposition is more complex and can apply to cases which do not strictly depend on agency principles. Where, for example, there is no actual authority, and the third party does not think that the agent is an agent, but the owner.
"The rule is regarded, by longer standing pedigree than that of apparent authority in contract, as based on estoppel, though it is an even looser application, or, apart from the fact that the estoppel confers title, it is difficult to see that a third party can rely on the representation of someone of whose existence he may not be aware. The estoppel is therefore said to be based on representation in the loose sense, or negligent conduct".
Mr. Brown referred me to VLM Holdings Limited v Ravensworth Digital Services Limited (2003) EWHC 228) which he said showed the flexibility and extent of the doctrine where Mann J applied the principle referred to in Lord Denman's judgment:
"The effect was that the claim of the true owner failed. While Lord Denman refers to conduct which led another to believe that (in that case) the sale was proper, it does not appear from the facts that there were any dealings between the owner and the defendant which would of themselves have led the defendant to that belief. The defendant had his belief as a result of uncommunicated conduct on the part of the plaintiff".
This case is somewhat removed from the present one. VLM owned a copyright and granted a licence to a subsidiary ("UK") to exploit the copyright in the UK. UK in turn granted a sub-licence to an estate agency, Spicehaart. UK went into liquidation and VLM terminated all licences granted to it and gave an exclusive licence to Ravensworth. In the course of the litigation the issue arose as to whether the Spicehaart sub-licence survived the termination of the head licence granted by VLM to UK. The judge decided that the effect of the sub-licence was to operate as a grant by VLM to Spicehaart of permission to use the copyright which was not therefore brought to an end by the termination of the licence to UK. This was because the copyright was not proprietary in nature. This contrasts with the position of a lessor/lessee which is a very different legal world. The alternative argument was that VLM was estopped from contending that the sub-licence was terminated.
The sub-licence had a recital in it to the effect that the sub-licensor was the owner of the copyright. It was a representation of ownership of the underlying copyright. In other words, that the sub-licence had an existence independent of the licence. The directors of VLM were parties to the sub-licence and were therefore taken to have made the representation.
Mann J said (paragraph 70) that the conduct of VLM was very similar to that in Pickard v Sears and that although VLM had not communicated with Spicehaart as such, it had allowed UK to include the recital in the sub-licence and generally to behave as though it was the owner. There was therefore an estoppel preventing VLM from asserting that it, rather than UK, was the true owner of the copyright.
I agree with Mr. Dutton that whether applying the principles of estoppel by representation or of apparent ownership, it is important to keep in mind some basic principles of landlord and tenant law, quite apart from the cases on the admissibility of extrinsic evidence of undisclosed principals.
The first of these is the effect of the termination of the interest in the demised property of a tenant's immediate landlord before the end of the term of the sub-tenancy. As between immediate landlord and tenant there is a relationship created by the tenancy which cannot be terminated otherwise than in accordance with the terms of the tenancy or at the expiry of the term. It cannot be forfeited for breach of most of the tenant's covenants without service of a section 146 notice.
As noted by Simon Brown LJ in Pennell v Payne ([1995] QB 192 197B):
"At common law, the general rule is that, when the head tenancy comes to an end, any subtenancy derived out of it is also automatically and simultaneously comes to an end. This general rule applies without question when the head tenancy come to an end by effluxion of time, by a landlord's notice to quit, or by forfeiture …"
If the immediate landlord does not in fact own or have any interest in the property which he purports to let then the situation is as follows:
a. The purported tenancy is effective to create the relationship of landlord and tenant between the parties to the tenancy;
b. The contracting parties are estopped from denying the tenancy's efficacy in creating an estate in land. This estoppel may be "fed" if the purported landlord subsequently acquires the freehold or a superior interest in the land;
c. So far as concerns anyone who actually owns a proprietary interest in the land, the purported tenancy is of no effect.
(Bruton v London & Quadrant Housing Trust [2000] AC 406). As Lord Neuberger said in Mexfield Housing Ltd v Berrisford [2011] EWSC 52: "The Bruton case was about relativity of title which is the bedrock of English land law".
Mr. Dutton QC submits that there is no room for the application of the doctrine of apparent ownership in relation to real property. This is confined to title to goods and chattels. In particular he points out that ownership of freehold land is dependent upon registration under the Land Registration Act 2002. I agree that this gives rise to difficulties in many situations. For example, it is difficult to see how the doctrine of apparent ownership could be applied to a disposition of land where the true owner negligently gave rise to a situation where someone else is permitted to sell land as owner. If, however, the true owner of land had stood buy, knowing that someone whom he knew had no interest in the land was giving someone else permission to build on that land or agreeing the position of a boundary, then it is equally difficult to imagine that the court would not intervene.
The analysis, in my judgment, is that the doctrine of estoppel by representation would intervene in the above situation and that the doctrine of ostensible ownership adds nothing where land transactions are involved. The true owner in the example above will be estopped if his conduct is construed as amounting to a representation that the other party has authority to enter into the boundary agreement or to give the permission.
The present case will, in my judgment, stand or fall on the estoppel by representation case.
The relevant facts and representations.
WPL was incorporated on 26th May 2009. The First Defendant is also a limited company which was incorporated on 20th December 2000. Until 26th May 2009 it was called Wyldecrest Properties Limited when it changed its name to the current one. On 4th July 2014 it changed its name again to Wyldecrest Parks Limited. The Second Defendant is a director of the First Defendant and has been since 14th July 2009. Hanif Waseem has also been a director for the same period of time. Mr. Waseem (although his address is different) was also a director of WPL since July 2009 and the First Claimant's evidence that it is the same person was not challenged. The Second Defendant is not recorded as ever having been a director of WPL and it is not proved that he owns any shares or has any interest in it.
The Second Defendant is the registered proprietor of the freehold interest in Park Farm and has been at all material times.
The First Claimant's relationship with the farm started just before Christmas in 2010 when he saw an advertisement offering Park Farm House for rent. He went to the farm house and met the Second Defendant for discussions. The First Claimant's evidence was that they agreed to split the cost of new carpets and that he was told that his landlord would be "my company Wyldecrest Properties Limited". Shortly after this he entered into an assured shorthold tenancy ("the AST") in which the landlord was identified as Wyldecrest Properties Limited. Others standard documentation relating to the AST was in similar terms as were subsequent cheques or direct debits for the rent.
In his pleaded case (either in the particulars of claim or the re-amended reply and defence to counterclaim) the Claimants allege the following representations:
a. The Second Defendant represented to the First Claimant that WPL was the owners of "such proprietary interest as to permit it to grant the term which it agreed to grant to the First Claimant" (ie a 5 year FBT).
b. The Second Defendant told the Claimants that he was the director and chairman of Wyldecrest Properties Limited and that any company with the name "Wyldecrest" belonged to him. This was before the AST, when the First Claimant was asked by the Second Defendant to undertake some work at Shirkoak Park in March 2011 (a different property in Tenterden where the First Claimant agreed to do some refurbishment work for the Second Defendant) and when they discussed his entering into the FBT in June/July 2011.
c. Signs at the Second Defendant's premises indicated that it was the offices of "Wyldecrest Properties".
d. During discussions between the Second Defendant and the First Claimant leading up to the signing of the FBT the Second Defendant said that the landlord would be WPL.
e. The Second Defendant signed the FBT on behalf of WPL.
f. A direct debit mandate originator form was provided by the Second Defendant in the name of WPL.
g. The Second Defendant did not inform the First Claimant that WPL was acting as agent for him.
It is also alleged that the First Claimant relied on these alleged representations in agreeing the terms of the FBT and signing it.
Ms. Davie was not present at any of the conversations with the Second Defendant and the First Claimant's evidence is therefore the only relevant source of any evidence of representations. He was not cross-examined about this issue. The relevant evidence is therefore as follows:
a. At about the time of the AST, the Second Defendant told the First Claimant that he was the director and owner of any company that had the "Wyldecrest" name or of companies "starting with Wylde" and that it was part of his group of companies. "Wyldecrest Properties Limited" owned and operated many mobile home parks in the UK. He also told the First Claimant that he was a director and chairman of WPL on several occasions, including during the lead up to the FBT.
b. At the time of the grant of the AST, the letting agents and the Second Defendant told the First Claimant that the landlord would be "his company Wyldecrest Properties Limited".
c. Sometime after 14th February 2011 the Second Defendant asked the First Claimant to undertake some building work at Shirkoak Park saying that his company "Wyldecrest Properties Limited" needed 3 residential mobile units refurbished. Invoices for this work were made payable by "Wyldecrest Properties Limited".
d. At the time the First Claimant and the Second Defendant were discussing a tenancy of the whole farm, the Second Defendant told him that he "could do what [he liked] with Park Farm so far as generation of income was concerned if [he] entered into an FBT on his terms". "The place would be yours to do what you liked with it, treat the place like it's your own".
e. During negotiations for the FBT the Second Defendant told the First Claimant that WPL would be his landlord on 3 occasions and the latter believed that he was entering into a FBT with WPL as landlord.
f. When the First Claimant attended the Second Defendant's premises in order to sign the FBT (at 35a Rainham New Road, Rainham, Essex) he saw signs displayed indicating that it was the offices of "Wyldecrest Properties Limited" and there were cars parked outside with similar signage on them.
g. At the time of signing the FBT the Second Defendant provided the First Claimant with a direct debit mandate originator form in the name of "Wyldecrest Properties Limited". It was only later that the First Claimant was told to pay the rent into the First Defendant's account and the WPL did not have a bank account.
h. In paragraph 32 of his witness statement, the First Claimant says: "Therefore in reliance of D2's representations I entered into possession and paid rent under the FBT to D1 as requested by D2 ….".
i. In paragraph 28 of the statement the First Claimant says: "I relied on D2's representations that Wyldecrest Properties Limited had sufficient proprietary interest in Park Farm to grant the FBT I was entering into with Wyldecrest Properties Limited in agreeing to the terms of the FBT and signing the same and paying the rent thereunder".
The First Claimant describes entering into the FBT. He was not legally represented and, as stated above, signed it at the Second Defendant's office in Rainham. He says that he read the agreement and then crossed out clause 12, which provided that either party could terminate the 5 year tenancy on 12 months notice.
The FBT defines the landlord as "Wyldecrest Properties Limited" and the address is given in clause 22.1.1 as 35a New Road, Rainham. By clause 5.1 it is agreed that the agreement would come into operation on 1st July 2011 and "shall subsist for 5 years". Clause 5.2, which provided for termination on 12 months notice, is crossed out.
The FBT is signed by the First Claimant and by the Second Defendant, who signs on behalf of the landlord.
The AST was for a term of 12 months from 14th February 2011 and was signed on behalf of WPL by an agent and not by the Second Defendant.
Argument and decision
In his closing submissions Mr. Brown said that the Second Defendant could not sign the FBT one week and then turn round and claim possession by title paramount the next. He said that the transaction was a sham put in place by the true freeholder. There are a number of problems with this submission. Firstly, there is no pleading that the transaction was a sham or a device to enable the Second Defendant obtain possession at will. This is not just a minor pleading point which can be ignored. Such a case would be a wholly different one requiring evidence in support. The absence of a pleaded case is fatal to this argument.
In any case a sham transaction is one which is dressed up to look like one thing but is in fact something else. The alternative situation is where one party presents a transaction which is in fact a sham and the other knows nothing about it. This is a fraud. Not only is this not pleaded, there is no evidence that the wool was deliberately pulled over the First Claimant's eyes.
The high point of the Claimants' case is that, as a result of the representations set out above, the First Claimant was led to enter into the FBT with the understanding that WPL had "sufficient proprietary interest in Park Farm to grant the FBT". This is his evidence in paragraph 48 of his witness statement. This leads to 3 issues: On the evidence were representations made to that effect? if they were, was it reasonable to rely on them? and, finally, where does this lead?
Mr. Brown submits that the First Claimant was granted by the FBT a 5 year tenancy terminable only upon breach and service of a section 146 notice or at the end of the term. He says that a reasonable person would understand from the representations by the Second Defendant that WPL had the right to grant a 5 year term which would not be determined otherwise than above.
Mr. Dutton QC submits that the court should not read paragraph 48 of the First Claimant's witness statement as alleging an express representation that WPL had sufficient proprietary interest to grant the FBT. I agree. The representations which are alleged are set out elsewhere in the statement and I read this paragraph as setting out the First Claimant's understanding as a result of what is alleged before.
He then refers to the First Claimant's evidence that he believed that the Second Defendant was acting as agent for WPL. Therefore, he says, any representation is made by WPL and not the Second Defendant. In my judgment this is disingenuous in the circumstances and it is necessary to examine what representations might be construed as having been made by the Second Defendant and what might reasonably have been understood by them.
This is an unusual case and one of the difficulties is that it is not usual for a tenant to investigate the immediate landlords's title to grant the lease. As set out earlier, the landlord party to the grant of a tenancy is bound as between him and his tenant but the superior landlord is not. Another potential problem arises where, for instance, the immediate landlord grants a tenancy in breach of the terms of a mortgage against sub-letting. If the mortgagee goes into possession the sub-tenancy would not usually be binding on the mortgagee.
A number of the representations were made in relation to the grant of the AST, which was for 12 months and only related to the residential property. That cannot, in my judgment, have any real bearing on the FBT.
Nor is the representation that the Second Defendant was a director of WPL take that matter anywhere. It is difficult, however, to construe the fact that the Second Defendant has said that the landlord would be WPL otherwise than as meaning that WPL would be able to enter into the FBT. If, the next day, the Second Defendant had contended that WPL had no interest in the property and could not enter into the FBT at all. The real question is whether it goes further than that, and can be construed or reasonably understood as a representation that WPL had a freehold interest or that its interest would necessarily endure for the next 5 years.
In reality, the Claimants' case amounts to this and no more: WPL would be the landlord and would be the party with whom the First Claimant would enter into the FBT as landlord. This is no more than would usually be the case when a party enters into a lease or tenancy agreement. There is no representation as to WPL's title beyond that it had sufficient interest to enter into the FBT on the day that it did to grant a valid FBT or any other type of tenancy. This would be so provided WPL had some sort of interest in the property, such as a weekly tenancy or a licence. If and when the licence or tenancy comes to an end then, as a matter of law, the FBT would not be binding on the freeholder. I am unable to find that the representations amount to or can be reasonably understood as meaning that WPL had a freehold interest in the property or that its interest was at least going to last until the end of the 5 year term. The situation is, in my judgment, removed from that of an owner of goods who permits a third party to sell those goods and, thereby, represents by words or conduct that the third party has title.
I therefore conclude that the Claimants have not established that an estoppel by representation against the Second Defendant and the case of apparent ownership adds nothing to this claim. It follows that the Claimants' cannot contend that the Second Defendant went into possession of Park Farm unlawfully.
I should mention that in paragraph 5B of the amended particulars of claim it was pleaded in the alternative that WPL had entered into the FBT as agent for the Second Defendant. At the application for permission to amend it was made clear that this was only being pleaded because the Second Defendant had asserted that this was the case in his witness statement. It was accepted by Mr. Brown at that time, that this claim would fall away if the Second Defendant was not called. That issue was not therefore a live one by the end of the trial.
I have not made any findings in relation to the section 146 notice or the further 146 notice which, in his statement, the First Claimant alleges was made well after the event and a not a genuine document. As the Defendants called no evidence their credibility is not relevant and it is accepted by Mr. Dutton QC that his client cannot rely on the section 146 notice. That issue is not therefore relevant. The First Claimant obviously believes that the Second Defendant has cynically allowed him to build up the livery business and other parts of Park Farm and then moved into possession and reaped the benefits personally. That case is not pleaded and does not therefore arise for decision.
The trespass to goods claim
Introduction
On 7th June 2013 the Claimant was evicted from Park Farm. His case is that there were a large number of goods and chattels on the property which then came under the control of the Second Defendant. The evidence is that, apart from some children's clothing stored in a car which Ms. Davie was allowed to take, all the remaining goods and chattels remained on Park Farm.
Following the eviction there were communications between the First Claimant's solicitors and Mr. Scott of Legal Resolutions who were acting for the Second Defendant. I will refer to these later. On 14th June 2013 the First Claimant went to Park Farm as a result of an agreement between the parties' representatives and in order to collect goods which he said belonged to him. He organised some security men and the police to attend as well as a number of people of various trades who were to assist in the repossession and removal of the chattels. He had several lorries with him. The Claimant says that there were difficulties getting onto the site and that after a short time, during which he tried to remove the stabling and some fencing, the Second Defendant asserted that he was trespassing and he was no longer able to reclaim his goods. He says that he was prevented from removing most of his goods "other than a small number of items" and was not subsequently allowed back to collect the remainder.
Counsel produced schedules which very helpfully divided up the items into various categories. Mr. Fairfoul also made a schedule which sets out which items he saw when he inspected Park Farm, together with his comments. There are a number of points of principle to be decided which will determine the issues in relation to groups of items and I do not intend, unless necessary, to deal with each individual item in turn. I will summarise the results at the end of this judgment.
The law
There was no dispute about the legal principles to be applied. Mr. Dutton submitted that there were 4 questions to be answered in relation to each item claimed:
a. Have the Claimants proved the things which they say were on the farm on 7th June 2013 and which of those items was not recovered on 14th June 2013 or disappeared between the 2 dates? This is an issue of fact.
b. Of those things, which are to be regarded as "goods" for the purpose of the Torts (Interference with Goods) Act 1977? This is a combined question of law and fact.
c. If the goods are not to be returned to the Claimants by the Defendants, what should the Defendants be required to pay for them? For the most part this question will be answered by the evidence of the joint expert, but there are some areas where he cannot do so or has left alternative prices which the court will need to choose between.
d. If the goods are to be returned by the Defendants, what, if anything, should be paid by them as compensation for their late return. The court will have to choose between compensation by reference to the use made of the items by the Defendants and the use that could have been made of them by the Claimants if they had had them in their possession.
The relevant sections of the Tort (Interference with Goods) Act 1977 are:
"1. Definition of wrongful interference with goods
In this Act "wrongful interference" or "wrongful interference with goods" means:
a. conversion to goods
b. trespass to goods (also called trover)
c. negligence so far as it results in damage to goods or to an interest in goods
d. subject to section 2 any other tort so far as it results in damage to goods or to an interest in goods
……..
2. Abolition of detinue
…….
3. Form of judgment where goods are detained
(1) In proceedings for wrongful interference with goods against a person who is in possession or control of the goods relief may be given in accordance with this section, so far as appropriate.
(2) The relief is:
a. an order of delivery of the goods, or payment of any consequential damages, or
b. an order for delivery of the goods, but giving the defendant the alternative of paying damages by reference to the value of the goods, together in either alternative with payment of any consequential damages, or
c. damages.
(3) Subject to the rules of the court
a. relief shall be given under only one of paragraphs (a), (b) and (c) of sub-section (2)
b. relief under paragraph (a) of sub-section (2) is at the discretion of the court and the Claimant may choose between the others.
(4) ……
(5) …....
(6) An order for delivery of goods under sub-section 2(a) or (b) may impose such conditions as may be determined by the court or pursuant to rules of the court and, in particular where damages by reference to the value of the goods would not be the whole value of the goods, may require an allowance to be made to the claimant to reflect the difference.
For example, a bailor's action against a bailee may be one in which the measure of damages is not the full value or the goods, and the court may order delivery of the goods, but require the bailor to pay the bailee a sum reflecting the difference."
"Goods" is defined by section 14 as including "all chattels personal other than things in action and money".
The only other relevant point of law relates to "fixtures". I was referred to Elitestone v Morris [1997] 1 WLR 687 and the judgment of Lord Lloyd of Berwick. He starts by referring to the difficulty which arises from the use of the word "fixture" since the natural understanding of the meaning of the word does not match up with its legal use in this context. Thus, a building might usually be thought to be "fixed" to the land if it is attached in some way, but the authorities show that such a building or structure is not always a "fixture" in law.
Lord Lloyd approved the 3 fold distinction set out in Woodfall at 13.131:
"An object which is brought onto land may be classified under one of three broad heads. It may be (a) a chattel; (b) a fixure; or (c) part and parcel of the land itself. Objects in (b) and (c) are treated as being part of the land".
He then explained how the decision depended on the circumstances of each case, but mainly on the degree of annexation and the object of the annexation. Of these it is clear that the purpose of the annexation is the more important. For example, it does not prevent a house being annexed to the land that it is not attached in any way to the land but resting on its own weight on pillars.
When it comes to the object of annexation, Lord Lloyd made it clear that there were a number of factors to be considered. In some cases, whether the object was attached to the land to enable its better enjoyment or to make a permanent improvement to the freehold is a helpful test but in others, such as a house, it is not. The application of common sense is important and whether, if the object is to be removed, the act of removal will result in its destruction – in which case it is probably part of the land. A house that is constructed so as to be moveable will probably be a chattel.
Lord Clyde also referred to the importance of the object being recoverable in its constituent parts if it was to be removed and that to the relevance of whether it was put on the property as a temporary or permanent measure. If the only thing you can do with the object is to recycle its constituent parts then it is probably not a chattel. In one case a dry stone wall was held to be a fixture although its stones could have been removed without causing any damage to either the land or the stones, so that they could have been used to build a wall elsewhere.
In the event this issue only concerns the manages and the fencing since Mr. Dutton QC conceded in closing that the stabling put up by the Claimants was not a fixture.
On final point arises. Mr. Dutton QC referred to Mancetter Developments v Garmanson [1986] QB 1212. This case is authority for the proposition that if tenant's fixtures are removed and leave the premises in a damaged condition, then the tenant must restore the premises to a reasonable condition and make good the damage. A failure to do so is waste, actionable in tort.
The issue of whether the items are landlord or tenant's fixtures is not relevant in this case because that is an issue between the landlord and tenant and neither WPL nor the receiver is a party to these proceedings and has no interest in the land.
What items have not been returned to or reclaimed by the Claimants?
Mr. Dutton QC produced a schedule in which he highlighted the items in 3 colours. Red referred to the times which the Defendants say were either not on Park Farm on 7th June 2013 or, if they were, have been recovered on 14th June 2013. The Claimants had vacated the house on 17th May 2013, they say because of attacks on them.
Apart from item 2 (the manege grader) which it was common ground should have been in the next category (green) as it was identified by Mr. Fairfoull when he visited Park Farm, he was unable to find any of these items. Item 11 should also be in red because Mr. Fairfoull did not find a bailer trailer of 20 foot but one of 16 foot. The green coloured items were those which the Defendants accepted were at the property and were chattels. This includes the stables, stable flooring, cross-country fences and green tape. The Defendants had not previously agreed that all these items were goods but, in the light of the evidence, now agreed that they were.
The yellow coloured items are those which the Defendants still do not agree are goods although there is no doubt that they remain on the farm. These comprised the manages, post and rail fences and lighting round the manages and the fencing and gates around the farm. Mr. Dutton QC also includes troughs "and other related items".
The item number references to the numbers in counsels' schedules.
The red items
The issue of what goods were on Park farm is highly dependent upon the credibility of the First Claimant. The other witnesses gave some corroborative evidence but, for the most part, they were not able to provide evidence of exactly what they saw on the property and when and therefore are not of much assistance.
I have already set out my judgment of the First Claimant's reliability. I am not prepared to accept his evidence in the form of statements that items were on the property unless there is some corroboration in the form of documents or that there is some reason other than his assertion to that effect for finding that the item was there. I also keep in mind that the Claimant was evicted from the property in circumstances when he appears not to have expected it and therefore it is probable that a great deal of equipment would have been on Park Farm on 7th June 2013. The evidence of both Ms. Davie and the First Claimant was that most of the paperwork was in a container on Park Farm which they were unable to access and has since been lost. What is much less clear is what was reclaimed on 14th June 2013 and this is when his credibility is most relevant.
Two of the red items can be excluded at once: item 27 which is vehicle hire for the vehicles hired in order to recover items on 14th June 2013 and item 36 for storage of goods. These cannot be heads of loss for trespass to goods and would not be recoverable in relation to the eviction.
Mr. Fairfoull visited Park Farm on 19th May 2015. He was provided with the schedule of items which the Claimants said had not been returned and during his visit he identified some of the items which were still on the property. He referred to each item on the Claimants' schedule, stating whether he had found them and providing a value at 7th June 2013 and at the date of the report (3rd June 2015), where he has been able to.
The Claimant has produced invoices which he says relate to the purchase of the items he claims and for the most part this wasn't challenged. The dates and amounts of those invoices appear on the schedules.
Following the eviction, the Claimants instructed his current solicitors on Monday 10th June 2013. They sent a list of 37 items which he intended to collect. In cross-examination the First Claimant says that these were the ones he remembered at that stage. It would be unsurprising if the First Claimant did not have a complete list in his mind. The reaction of the Defendants' representative (Mr. Scott) was that nothing could be collected until the Claimants had proved ownership. There is clear evidence from the correspondence that there was little or no attempt at any serious co-operation at this stage despite the fact that it was obvious that the Claimants had a lot of goods at Park Farm.
On 12th June 2013 Mr. Scott sent an email to the Claimants' solicitors agreeing in principle to the collection of goods from Park Farm which were on the list previously sent, with the exception of the stables in respect of which they disputed ownership. The First Claimant went to Park Farm on 14th June 2013 with a significant number of other people. In his statement he says that there were 10 security staff, 2 police officers, an electrician, a contractor with a tractor, and representatives from a plant hire and haulage company with lorries, all to assist in the removal of the items. In cross-examination the First Claimant said that he had arrived with "30 or 40 people" and accepted that he had been there for about 2 hours. He also said that the police presence had been arranged by Mr. Scott.
In his statement the First Claimant says that on arrival the 2 police officers spoke to the Second Defendant and were told that he would not agree to the re-possession of the goods and that the First Claimant was trespassing. He says that the collection of goods was therefore prevented save for "a small amount of my and C2's goods". He does not say what he did collect. He also says that he was able to look into his shipping container and saw that he had stored items and that they were missing – including item 39 the Kubota B2530 tractor which he says Mr. Hopson (who had managed the livery stable for him) used to take water drums to the lower fields.
Later that day Mr. Scott sent an email to Tees Law stating that the Claimants had no right of access to Park Farm, had had plenty of time to collect items and that no further visits would be allowed. Tees Law replied the following Monday 17th June 2010 stating that the Defendants had refused to deliver up 11 of the 37 items listed in the earlier letter. Another 4 missing items were added which included the show jumps, the IFOR Williams triple axle car transport trailer, the jack leg portacabin and the manege grader. Amongst the missing goods were the saws and other items which form items 3, 4, 5 and 6 on the list. It was said that the container in which they had been stored was recovered but that there was nothing inside it.
Further requests were made by Tees law on 21st June and 10th July 2013 for permission to collect items and particular items were identified in the letter of 17th June 2013. No other items were identified as missing at this state. Although further efforts were made through Tees Law at a later stage the Claimants have not been given access to collect anything more.
Mr. Roger Hare was one of the people who came with the First Claimant on 14th June 2013. He had previously sold and delivered the stables and a store room to the First Claimant and described the structures and how he had erected them. He went on 14th June 2013 in order to dismantle and remove the stables (for which he was still owed part of the price (£4,000)). He took his van and another lorry with which to transport the dismantled buildings. These items proved to be a sticking point with the Second Defendant and the police also suggested that they should not be removed while they were still housing horses. His evidence was that he had been told by the First Claimant that he would have 4 hours on site to do this job.
Significantly, since he was called by the Claimants, Mr. Hare says that while he was discussing with the police and the owners of the horses whether the stables should be taken away, the First Claimant was removing other items. Mr Hare says that he left at about 11.00 am having arrived at 9.00 am. He produced a list produced by the First Claimant and put an asterisk against those which he said that he had seen on Park Farm on 2013.
Of these items only 2 are claimed which are no longer on the property: item 9 the Kuhn mower conditioner and item 38 the IFOR William triple axle trailer. He saw a JCB and also a lorry with a crane on the back. He was unable to say how much the Claimants had removed from the site as he was concentrating on the stables.
I have no reason to doubt Mr Hare's honesty and he does not appear to have any connection with the Claimants other than being a creditor. At first blush Mr. Hare's evidence that he saw these items on the site is compelling, but his statement is dated 8th May 2015 and he gave no evidence whether they were still there when he left. Significantly, when the the First Claimant was asked about item 38 (because the purchase invoice date is 27th June 2013) he said that this was a mistake and then said that it was a pro-former invoice obtained in order to get a value. This was not mentioned prior to his oral evidence. He did not produced any other proof of purchase and I reject his evidence on this. He had not ordered this trailer and it had not been delivered. This means that Mr. Hare's evidence that he saw the trailer cannot be right and therefore his asterix's on the schedule are unreliable. Even if it was in fact purchased, for the reasons already given, I do not accept that there is reliable evidence that it was left on the property after the visit on 14th June 2013.
There are a number of problems with the First Claimant's evidence about the goods:
a. The First Claimant has not identified what he removed from Park Farm on 14th June 2013. Under cross-examination he said that it was difficult to remember after 2 years but it is surprising that no list was made at the time. He told me that he had taken the security equipment (for security for the house to which he and his family had moved), 4 cars which had been "petrol bombed" and a Case tractor.
b. Although item 36 (storage charges) is not recoverable, it is revealing. The First Claimant said that the invoice was for the collection of goods from a container, namely "housing stuff". The invoice however pre-dated the eviction as it was dated 18th May 2013. The First Claimant said that this was a mistake but it suggests that it related to their move from the house and that items were removed from a container before the eviction. We only have his word what these were.
c. Item 38 is claimed but in cross-examination he said that it had never been delivered.
d. Under cross-examination he agreed that there was some duplication in the amounts claimed. Item 43 is a claim of £19,857.32 for timber, electric fencing, troughs and "other related items". The First Claimant explained that this was in fact the total amount that he had spent at Farm and Country on a miscellany of items many of which were duplicated elsewhere in the schedule. e Ther
I therefore reject all the claims to the red items as I am not satisfied that they were on the property after 14th June 2013 and some were probably not on the property on 7th June 2013.
The yellow items
The first issue concerned the maneges. When the First Claimant entered into the FBT there was a livery establishment operating on Park Farm. He describes it as a low grade operation and this was not challenged. There was a manege near the entrance to the property. The evidence was that the First Claimant expanded and refurbished the original manege and installed 2 new ones. Mr. Alldis gave evidence about their construction. A manege is a rectangular area with post and rails around it. The area is dug out and a hardcore base is built up in or to provide drainage. On top of that is a layer of pink granite or hoggin. That is then covered with a permeable membrane to keep the weeds down and to prevent the surface drifting down into the base. The surface is then laid down on top of that. There are various types and qualities of surface which Mr. Alldis said was usually made up of a 4 inch depth of fibre or rubber and sand.
Mr. Alldis said that it common to purchase second hand surface material and the surface of the original manege had been topped up with second hand material. He had, for example, tried to buy the surface used in the 2012 Olympics which had been recovered and sold. Mr. Fairfoull, who relied on an equestrian expert, agreed that the surface material had a good value. The Olympic site was obviously dismantled after the games and therefore was always temporary. The joint expert has valued the whole manege (and has not been asked to value the constituent parts of it) which he has done by reference to the overall cost of installation. Mr. Alldis said that the surface material can often be worth as much as £35 to £40 per metre but this would not include the cost of removal as to which there was no evidence.
Applying the legal principles set out earlier, I am satisfied that a manege is not a temporary structure. Its removal completely would leave a hole in the top soil and if the surface material was removed it would leave the permeable membrane exposed and new surface material would need to be laid. Like a stone wall it can be said that a manege is used to better enjoy the land but it is also part of the structure. Its removal would mean, at best, that its constituent parts could be recycled and, like the stone from a dry stone wall, the materials would have a value. I find that the manages are part of the land and it is not open to the Claimants to argue that they can take part of the manage. The Claimants' claim in respect of the manages therefore fails.
Next I turn to the manege lighting and the manege post and fail fences. The post and rail fencing (item 25) was erected in about November 2011 (the invoice is dated 21st November 2011) and the manege lights included in item 42) were invoiced at the same time. The First Claimant said that item 25 related to the work he did to the original manege. Posts were hammered into the ground and rails nailed to the posts. The invoice is for £5,820.60 inc VAT. Mr. Fairfoull was not able to establish which fencing was referred to in item 25 but I accept that First Claimant's evidence on this point. He gave a replacement cost (namely the original cost) but reduced it to 20% as a value on 7th June 2013 because of the cost of removal and transportation.
In my judgment item 25 is a fixture. It cannot be removed without knocking it down, destroying the fence and reclaiming those posts and rails that were not damaged in the process. It is not temporary because it is part of the manage. Had I found that it was not a fixture, then I would have awarded compensation at the figure of £1,067.10 which Mr. Fairfoull bases on an ex VAT invoice. This appears to be wrong because Mr. Dutton QC's schedule agrees that the original invoice includes VAT.
I make the same finding in relation to the manage lighting. The photographs show that these lights are on gantry's around the manages and they don't appear to be temporary structures. They are clearly part of the manage itself although they could be more easily reclaimed. Mr. Fairfoull put a value of £1,250 on them if they had been recovered and it is not clear whether this includes VAT. That is the figure of compensation that I would have awarded if I had not decided that they are not fixtures (albeit tenant's fixtures). The First Claimant's oral evidence in relation to "wiring" item 35 was that the "wiring" was the electric wiring he had put in place in order to power these lights around the manages. He said he had removed the lights (providing some confirmation that quite a lot of goods were removed on 14th June 2013). There can be no claim against the Defendants for the lights and I find that the wiring is to be treated as a fixture for the reasons given above. The Claimants have not and could not make any claim to the lights which have been taken away as these would have been tenant's fixtures.
Next I turn to the fencing which the First Claimant put up around the farm. This is largely item 43 (which is part of the goods purchased from Farm and Country). The First total expenditure at Farm and Country was spent on fencing, where that fencing work was done and how much was renewal or repair (ie to replace existing fencing) and how much was entirely new. There was practically no evidence about it, although it is clear that some fencing work was done by the Claimants. Other claimed items relating to fencing are items 32 and 34 described as "fencing". He also said that he had put in 7 new gates.
The evidence about his is extremely vague and it is not possible to do more than guess at the value of any recovered elements from this fencing and the gates. Item 55 (a timber gate) was not found by Mr. Fairfoull on his inspection.
I am satisfied that the fencing under items 43, 32 and 34 (which are probably included within the cost of item 43) are fixtures for the same reason as the post and rail fences round the manages or else were repair and improvements to existing features. The Claimants are not entitled to recover in respect of them.
The electric fencing and electro tape are clearly not fixtures but it is not clear from the evidence whether this was in use or in a roll ready for use. Mr. Fairfoull found no evidence of any electro tape and in the light of my previous findings I am not satisfied that it remained on the farm after 14th June 2013 when the Claimants collected some items.
The Defendants had originally questioned whether the jumping fences were fixtures or fittings but having heard evidence from April Gingell, who sold fences to the Claimants, Mr. Dutton QC did not contend in his final submissions that any of the jumps were fixtures and this was clearly right.
The remaining items under in the yellow list are items 61 and 62 (staple on plate and pipe fitting). Mr. Fairfoull identified "tie rings" but said he could not identify this one. He could see no evidence of the pipe fittings. The First Claimant said that item 62 was "a bit of plumbing" and was a back plate. I have not been satisfied that this was within the definition of goods and not a fitting. On the scant evidence available it seems to me more likely that this was merely an improvement to some plumbing.
I reject the claim to items 3 to 6 (saws and strimmers etc). Firstly, the First Claimant's only evidence is his oral testimony which I have already said is unreliable. He did point out, through his solicitors that these items were missing and explained in court that they had been in a container which he said was empty on 14th June 2013. There is no credible evidence about what he took away that day, whether these items were on the property on 7th June 2013 and when he had previously seen them in the container. There are a number of possibilities, including: that they were not there at all, taken by the Claimants on 14th June 2013, stolen or otherwise removed from the container before 7th June 2013 or stolen subsequently. It is impossible to find, with any confidence, that these items were in the container on 7th June 2013 and I find that the Claimants have not proved their case with regard to them.
The green items
As it is common ground that they remain at Park Farm, this is a quantum issue.
As a matter of principle I find that any compensation should be measured as the value of the item at the date of exclusion (7th June 2013) and Mr. Fairfoull has done that in his report. Replacement cost might have been appropriate if the Claimants had established that they were going to set up a new business and replaced them. The evidence points the other way. There is no evidence that the Claimants made any serious effort to find a new property on which to set up a livery business and the First Claimant's evidence was that he had asked Mr. Perks to look for a new farm "a couple of months ago". There is no documentary evidence to support a case that there was any attempt to do this before and the strong impression was that the recent enquiry was, at best half, hearted. No replacements have been purchased.
I have also found that the compensation figures should be exclusive of VAT. This should be the case whether compensation paid as the value of the goods lost by the Claimants or the benefit accrued to the Defendants. In the former case, the goods were used for a business and the VAT paid on purchase was, or should have been, accounted for to the HMRC and the same would apply on the purchase of any replacement. If the items are retained then there is no VAT.
My findings in relation to these items are as follows:
a. Item 2 should be valued at £1,300 which is the 2013 value.
b. Item 11 should be in the list of red items and I find that there is no credible evidence that this item was on the premises after 14th June 2013 or that the Defendants are responsible for its loss.
c. Next there is a series of individual items which were purchased by the Claimants, in some cases second hand and in some new. Items 10 and 13 were clearly purchased second hand from the sums originally paid. I find that the compensation figures are £800 (price paid in this case because the replacement cost given by Mr. Fairfoull is for a more sophisticated machine) and £500 respectively, being Mr. Fairfoull's value on 7th June 2013. In relation to the buggy (item 13) this was purchased in April 2011 and at the time of Mr. Fairfoull's visit was in a dilapidated state and the photograph does not suggest that it is useable. I find that this is not in a returnable state and that the compensation must therefore be paid.
d. Item 18, the show jump set, is given a replacement value of £1,079 excluding VAT by Mr Fairfoull and this would be the correct measure of compensation sum for that item but I am not satisfied that the show jumping sets on the premises were those purchased by the Claimants. The invoice is dated September 2013 and the First Claimant said in compensation that he had taken a container from the premises when asked about these. The evidence about these was therefore a mess and reliant on the First Claimant's credibility and I therefore disallow this item.
e. Item 19, mounting blocks, and item, a horse shower, should be compensated for at the value on 7th June 2013 of £75 as stated by Mr. Fairfoull. Item 20 at £89.50 for the same reason. Similarly, I find that the value at 7th June 2013 should be applied to item 21 (£1,200 ex VAT).
f. Item 12 is a claim to 250 bales of hay. Mr. Fairfoull found some bales on the farm but all in a poor condition and Mr. Hopson told him that they belonged to him. It is therefore clear that any bales of hay on the farm on 7th June 2013 have been lost and the Defendants should pay compensation. It is very unlikely that bales of hay were taken on 14th June 2013. The First Claimant estimated that there were 100 to 150 bales of hay on 7th June 2013 – a far lower number than claimed. He had not cut any hay on 7th June and therefore any stock from the previous year would have been reaching its low point.
g. Mr. Fitzjohn gave evidence that the grassland produced about 1500 to 2000 bales a year. He couldn't recall how many were left by June 2013. Mr. Alldis said that he saw the hay store in early 2013 when there was "quite a lot of it". None of the other witnesses who spoke about the hay had a very clear recollection. It is not unreasonable to suppose that there were 100 to 150 and since the Defendants made no attempt to record the amount, I find that there were 125. Mr. Alldis was asked about the cost of each bale and gave a value of £35 to £45 in June 2013. This was along the lines of the figures given by Mr. Alldis and I find that the compensation should be based on a value of £40 per bale giving a total of £5,000.
h. Item 24 is the cross-country fences. Mr. Fairfoull valued these at £315 on 7th June 2013. He said that there was a low value because of the cost of dismantling them. Ms. Turner said that the fences she sold to the Claimants were moveable ones and it doesn't therefore appear that they are the ones viewed by Mr. Fairfoull. They cost the Claimants £1574 but there was no evidence whether they were subject to VAT. If they were sold then they would have to be moved and they are substantial – although moveable. Mr. Fairfoull's value of £315 which takes account of these costs but if they are kept by the Defendants then they will have the benefit of them without the cost of removal. Any compensation should therefore exclude removal costs and the compensation figure should be £750.
i. Item 28 is 15 tack lockers which Mr. Fairfoull said were in good condition in a storage container and valued at £500 on 7th June 2013. Item 29 is rubber flooring valued by £425 on 7th June 2013 and item 33 is a quantity of green tape valued at £13.33. I accept these as the compensation values.
j. Item 30 is a Wessex PTO driven grass scarifier which cost £2,400 including VAT. Mr. Fairfoull said that it was in fact a paddock sweeper and the First Claimant said that you could change the brushes. He gave a value of £1,900 ex VAT on 7th June 2013 which I find is the compensation value.
k. Item 37 is a heavy duty chain harrow and I accept Mr. Fairfoull's valuation of £700 ex VAT as at 7th June 20013 as the compensation.
Next I turn to the stables. These are comprised in items 14, 15, 16, 17 and 26. It is now conceded that these are moveables and not fixtures.
Mr. Fairfoull described the units as "basic rather than premium" and that they had been erected on hard core and not concrete without any drainage or guttering. He has produced a range of value for each and there is nothing to justify the court doing anything other than chose the mid-point of the range. Items 14 and 15 are £3,412 each; Item 16 is £7,125; item 17 is £1,575. Item 26 comprises various internal stable partitions which are in good condition. Mr. Fairfoull's valuation is £3,050 which I accept.
Item 21 is a storage container. There is a container on the site but in cross-examination the First Claimant said that he had removed it on 14th June 2013. Therefore he cannot recover this. Mr. Fairfoull's value on 7th June 2013 of £1,200 is an ex-yard price. There is no evidence of the cost of removal (which might have been added in order to give a fairer value of the benefit that the Defendants might retain if they kept it. In these circumstances the compensation figure would have been £1,200 if the Claimants had succeeded in the claim to this item. The invoice produced by the First Claimant also post-dates the eviction.
Item 31 is a portacabin and kitchenette. The invoices produced by the Claimants are dated 15th September 2012 and were for £4,900 plus VAT for 2 such portacabins but the Claimants claim for one. One therefore appears to be on the property and in a poor condition. Mr. Fairfoull valued it at 7th June 2013 at £2,450 and the replacement cost would have been less than the amount paid. I do not read his report as valuing it in the dilapidated state that he found it in. I find that its condition is not suitable for return by the Defendants and that it is likely to have deteriorated significantly between 7th June 2013 and Mr. Fairfoull's inspection. Compensation should therefore be paid for this item of £2,450 ex VAT.
Finally, I turn to the issue of compensation to be paid by the Defendants as a result of the goods remaining in their possession since 7th June 2013. The Claimants have not been able to recover them and I have not been told of any effort on the part of the Defendants to let the Claimants do so. In these circumstances it is my judgment that compensation should be paid to the Claimants for those items which the Defendants are likely to have made use of. I have received no evidence in relation to this point, nor on how to value it. Both counsel invited me to do my best and with that in mind, the only logical way to do this is to award interest on the compensation values (whether or not the goods are in fact returned) from 7th June 2013 to date and until they are either returned or the compensation paid.
It is clear that the Defendants have benefitted from the retention of the stables and the evidence shows that the livery business continued and that the Defendants received rent or other payment as a result. I therefore find that all the items which could be used in that business should bear compensation for use: Items 14, 15, 16, 17, 19, 20, 24, 26, 28 and 29. Items 10, 30 and 37 were also capable of use on Park Farm and there is no evidence that they were not used. They should also bear this compensation. The green tape has not been used and the portacabin does not appear to have been used. The hay has been used and should also bear the compensation interest.
I find that the appropriate interest rate is the court rate of 8%. My calculation of the total of compensation for the items is £33,076.63 interest to 31st July 2015 is £5,676.13 but this, and any other figures, may be the subject of correction once the parties have seen this judgment. If any corrections are needed to the figures, then this can be done at the final hearing to deal with outstanding issues such as costs or by agreement.
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The identity of the children referred to
At the beginning of the trial an application was made for an order that the names of the children not be reported and that all reference to them in reports of these proceedings should be anonymised. CPR 39.2 provides a general rule that hearings should be in public but that the court may order that the identity of any party or witness must not be disclosed if it is in the interests of that party or witness. There is a strong presumption that justice should be done publicly and that there should be freedom to report court proceedings. The reasons for this are well known and need not be rehearsed here. However the court is obliged to have regard to the legitimate rights of children and in particular the right to respect of their family life under Article 8 of the ECHR. In this case it was submitted by Ms Cooper for the claimants, with no opposition from Mr Sinai for the defendants, that the issues in the case involved reference to sensitive matters from their early childhood life and that public association of their identities with these matters would not only be embarrassing but could risk causing damage to them. I agree, and would add that they are not parties to these proceedings, and that the legitimate public interest in the case does not extend to knowledge of the children's identities. The disclosure of their identities would be counter to the protective purpose of the legislation under which the defendant purported to take the various actions which I have to consider in this case. Accordingly, I made an order that the names of the children referred to in these proceedings shall be kept private and not disclosed. Subject to any submissions the parties may wish to make I am now minded for the same reasons to continue the order indefinitely and further to order that no part of any witness statement or other document which might otherwise be open for inspection which discloses the names of the children will be open for that inspection [CPR 32.13].
In this judgment where it is necessary to refer to the children, I have done so without disclosing their names.
Introduction
If ever there was a case illustrating the challenges that face children, parents, public authorities, and the courts when concerns are raised about the safety and welfare of children it is this. A relatively trivial incident on 5 July 2007, followed by an allegation made by a young child in potential trouble, led to the exposure of issues about the upbringing of a large family in respect of whom there had been no previous concerns. Eight children, including a young baby, were removed from their parents' care and distributed to foster homes. A swift consideration of the welfare issues concluded that if some simple improvements were made to their home, the children could return home. Yet it was some 2 months before the children returned to their parents, after experiencing a variety of foster placements, some of which were of dubious quality. A criminal investigation led to a 20-count indictment against the parents, but in the end, 2 years later, no evidence was offered and the parents were acquitted. The parents' complaints about the handling of their case by the defendants were considered in a complaints process over a period of nearly six years culminating in a final decision of the Local Government Ombudsman, issued on 22 April 2013. In spite of their complaints being upheld in part, and the exoneration of their character in the Crown Court, the claimants believe their grievances have not been properly addressed and therefore bring these proceedings, ending in this trial, eight years after this unfortunate incident started. Fortunately it is not my task to adjudicate on more than a small fraction of what has occurred, but the overall picture is not a happy one.
The claimants bring this claim against the London Borough of Hackney ["Hackney"] in their own right, and not on behalf of any of their children. They accept that the authorities acted lawfully in the initial action of taking their children into foster care under the authority of what has been described as police protection order. However, they claim damages for what they say were the unlawful actions of the defendant authority and its officers in keeping the children of the claimants in authority controlled foster care after the expiry of the effect of the police order. The causes of action alleged are misfeasance in public office, breach of statutory duty, negligence, religious discrimination and breach of the parents' Article 8 human rights. The defendant denies liability in any of these causes of action.
Summary of what happened
The claimants, John and Adenike Williams, have been married for 24 years. They have 8 children whose ages at the time of the matters about which they complain ranged from 8 months to 14 years. All the children lived at home, and no concerns were raised about the manner in which their parents were caring for them until one of them was arrested on suspicion of shoplifting on 5th July 2007. This child was said to have told the police that he had been beaten by his father with a belt, as an explanation for a bruise on his face. The police visited the family home and were of the opinion that it was not in a fit state to be accommodation for the children. They alerted the defendant to their concerns. The police also initiated a Police Protection Order under section 46 of the Children Act 1989, and the defendants made emergency arrangements to accommodate them in foster homes. The police order authorised these arrangements for 72 hours. On 6th July, in circumstances I will have to examine in some detail, the parents signed a form of agreement which the defendants assert authorised them to continue to accommodate the children away from their parents, an assertion the claimants dispute. The children did not in fact return to live with their parents until 11th September 2007. It is right to record at the outset of this judgment, that, although the claimants were eventually charged with various offences relating to their treatment of the children, following strong observations made by a Crown Court judge, no evidence was offered, and a not guilty verdict was entered on all the charges.
The application to strike out the claims in negligence and discrimination
By a notice dated 16 June 2014 Hackney applied for an order striking out the claims in negligence and discrimination. On the same date Master Yoxall ordered that the application be considered on the first day of the trial. In relation to the negligence claim the ground for the application was that as a matter of law no duty of care is owed by a local authority to parents when exercising its statutory function to protect children. In relation to the discrimination claim the ground was that the claim was insufficiently particularised.
CPR 3.4(2) provides in so far as relevant:
The court may strike out a statement if case if it appears to the court
(a) that the statement of case discloses no reasonable grounds for bringing … the claim.
Practice Direction PD 3A.1.4 offers examples of cases where the court might conclude that particulars of claim fall within the rule:
(1) those which set out no facts indicating what the claims are about…
(2) those which are incoherent and make no sense
(3) those which contain a coherent set of facts but those facts even if true, do not disclose any legally recognisable claim against the defendant.
Paragraph 1.7 states
A party may believe that he can show without a trial that an opponent's case has no real prospect of success on the facts, or that the case is bound to succeed or fail, as the case may be, because of a point of law (including the construction of a document), In such a case the party concerned may make an application under rule 3.4 or Part 24 (or both) as he thinks appropriate
Paragraph 5 draws attention to Part 23 and PD23A requiring all applications to be made as soon as possible and before allocation if possible. It also suggests that applicants consider whether facts need to be proved and if so whether evidence in support should be filed and served.
Reference to the note in Civil Procedure para 3.4.2 shows that it has been held to be permissible to strike out on the ground in CPR3.4(2) where the case is "unwinnable", where continuance would bring no possible benefit to the relevant party: Harris v Bolt Burdon [2000] LTL February 2 2002, or as a matter of law Price Meats Ltd v Barclays Bank Plc [2002] 2 All ER (Comm) 346 ChD. However it is not appropriate to strike a case out in an area of developing jurisprudence in the law: Farah v British Airways The Times January 26 2000; Barrett v Enfield BC [1980] 3 WLR 83 HL. An application to strike out should not be granted unless the court is certain that the claim is bound to fail: Hughes v Colin Richards & Co [2004] EWCA Civ 266.
At the outset of the hearing I decided to defer argument and a decision on this application to the end of the evidence. I did so for two reasons. Firstly, the statement of case is somewhat discursive, and I thought it might be better understood in the light of the documentary material and oral evidence which would be produced in the case in any event. Secondly even if I decided to grant the application, the case would have continued on the outstanding causes of action, and, as counsel agreed, the evidence relevant to the negligence and discrimination claims would be largely relevant to the other issues in any event. Therefore little time if any would be potentially saved by hearing the application at the outset of the trial. Having heard the evidence and argument I have concluded that it would have been wrong to have struck out the negligence claim as a matter of law without hearing evidence as to the actions of Hackney, and its officers. Hearing the evidence has assisted the consideration of the precise nature of the activity which is said to give rise to the duty, and a comparison with the activity which has been authoritatively determined by appellate courts not to give rise to a duty to parents. With regard to the discrimination claim, it is correct that insufficient particularisation appears in any statement of case offered by the claimants, whether drafted by them in person or by their legal representative. Having heard the evidence and the way in which this part of the case has been put, if only lightly, by their counsel, I have to say that the basis for the claim is still lacking in clarity, but in my judgment no injustice is caused by considering the claim on its merits. Both parties have had a full and fair opportunity to put their cases before the court.
The evidence
Three volumes of documentary material were presented to the court. I was not referred to every page, for which I am grateful, and I believe that the parties referred me to every document they consider material to their case. There was a suggestion that some documentation was missing, but I am satisfied that the material which is available, supplemented by the explanations offered by the witnesses, enables me to form a fair picture of what happened.
I heard oral evidence from both claimants, and two of their sons, now adult. Kulbant McLaughlin, who was manager of the defendants' Access and Assessment Team at the material time, was summoned by the claimant to give evidence. She had not provided a witness statement in advance of the hearing and she was personally accused of misconduct in the claimants' statement of case. Accordingly her evidence was not easy to elicit. This is not intended to be a criticism of Mrs McLaughlin, but counsel for the claimants had the forensically challenging task of questioning her without cross-examining her. For the defendants evidence was given by Ciara Toal a social worker and Rory McCallum, who was also qualified as social worker and at the material time was head of the defendant's access and assessment service. All witnesses laboured under the inevitable difficulties in recalling details, given the passage of time and in some instances the possible absence of relevant documentation. I was satisfied that all witnesses were doing their honest best to offer me an accurate recollection of events and, where relevant, of the reasons for their actions. As will be seen, Mr and Mrs Williams had to endure a most distressing and stressful experience while their children were kept away from them and their home, and while they waited the outcome of the various investigations by the police and social services, not to mention the uncertainties which hung over them with regard to their prosecution for serious offences. As with the other witnesses I was satisfied they were doing their honest best to tell me the truth as they saw it, but I do consider that their recollection of these events has on occasion been clouded by their very understandable emotions. As a result there are some aspects of their evidence that I am compelled to treat with a degree of caution.
While, as I have said, witnesses sometimes struggled to remember details, I very much doubt that much more would have been reliably remembered, had the questioning taken place 12 months or so after the events in question. The documentation was in my judgment sufficient to fill substantially any gaps of memory. Accordingly I was satisfied that there was no prejudice to either party arise out of the length of time this matter has taken to arrive at a hearing.
The events which form the context of the claim
I now turn to describe what happened. Much of the history of events is not in dispute, but where it is I shall indicate my findings. It is important to the determination of the claims made against the defendant to view events in their chronological order. Where there are disputes I have had regard to all the evidence before me, both the written material and the oral evidence.
Allegations of violence against the children
On 5 July 2007 one of the Williams children was interviewed by the police. The child was reported said to have alleged that Mr Williams "regularly beats him and his siblings and had reported that [the child] had been beaten the previous evening as he had gone to the shop without his permission to buy some lollipops." It was also reported that the child had attributed a mark below the eye to the father using a belt.
The legality and justification, if any, for what was done following that report does not depend on whether the allegations made by the child were true but on the appropriateness of the reaction of the authorities to the potential risks to the children implicit in them. However the truth of the allegations of violence was put in issue.
In examining the evidence before me it is important for me to bear in mind and record in this public judgment the conclusions which HH Judge Paul Kennedy reached in the Crown Court having examined the evidence before him in the criminal proceedings brought against the parents for assault, cruelty and child neglect. Having read the file, he urged the Crown to offer no evidence. In his remarks, made on 16 September 2008 he said this:
These are persons of good character, who faced the quite enormous task of bringing up 8 young children in an overcrowded home. That they loved their children, that they wanted the best for them, that there were determined that the future held more for them than for what Mrs Williams described as "street kids" has never been in doubt and shines out from Mrs Williams's interview. Whilst there is little doubt that conditions at home were chaotic, the Williams have accepted the help they were offered and, within a remarkably short time, have turned around a difficult and dangerous situation to one where all departments of Social Services are content and positive about the future.
Following these observations no evidence was offered and the judge entered a verdict of Not Guilty on all counts.
There was much evidence in these proceedings to confirm the view arrived at by the learned judge, and I am absolutely satisfied that Mr and Mrs Williams were loving parents who wanted only the best for their children. They had brought them up in what must have been challenging circumstances without reproach or concern until July 2007. Their anxiety and distress exhibited when they were separated from them, their reactions to the ordeals their children endured over the next few months, were as clear in their demeanour in the witness box in this hearing as they were from the contemporaneous documentation and the evidence of the two children who gave evidence. I have absolutely no doubt that the claimants were and remain loving and committed parents determined to do their best for all their children. Their sense of sadness at not being able to be reconciled with the child who made the allegations triggering the authorities' concerns was palpable.
Mr Williams denies that he beat his child as alleged in the police report. He told me that there was a troubled relationship with this child which, sadly, has never subsequently been repaired. He agreed that he did smack the children, but in the case of three of them on only a few occasions. In relation to the child who had made the allegation, Mr Williams said he had never smacked, or used a belt to smack, the child in the face. To my mind somewhat strangely, Mr Williams told me that he did not "recollect" punching this child in the face, an allegation made by this child to doctors in relation to a later incident in November 2009. In relation to a row that occurred in 2010 he said that he could not remember if the child had any resulting injuries, although he could not see any. He used similar expressions claiming a lack of memory on several occasions about incidents which appeared from his descriptions and the records of them to be dramatic. Of course to say something cannot be recollected can merely be a form of denial, but I sensed here that there was a degree of equivocation in Mr Williams's answers. There was, however evidence before me that he did hit his children in the course of disciplining them. One of the adult children who gave evidence before me agreed that this was so. I was told by this witness that Mr Williams used a belt "sometimes but not always" if the children "really misbehaved, [were] really really bad". The witness added, "sometimes he went a bit too far". When I asked this witness what was meant by "misbehaving" in this context I was told this meant "arguing with mum, messing about outside or doing things repeatedly – that is when the belt came out". Very much in favour of Mr and Mrs Williams is that whatever the nature of the discipline handed out certainly the two children who gave evidence clearly remained very close to their parents. There is no evidence that with the one exception described, any of the other children have a less close relationship.
I am satisfied on the evidence before me that Mr Williams did administer what he believed to be justifiable discipline to his children, which included on occasion the use of a belt. It is distinctly possible that a belt was used on or shortly before 5 July, although the circumstances and the extent to which it was used cannot now be reliably established. The only relevance of these matters is that in the course of the involvement of the defendant's officers with this family they would have seen an attitude towards discipline similar to that which I have seen in this court. It is this sort of factor which persuades me that the defendant was justified in considering that the allegations were evidence of a risk to the safety of the children which they could not ignore in determining whether to exercise their statutory powers. This is not in any way to contradict the very positive conclusions that both HH Judge Kennedy and I have reached about the general character of both claimants.
Entry and examination of the claimant's home on 5 July 2007
In the light of the information they had received from the child, the police visited the family home and instituted a Police Protection Order and arrested Mr and Mrs Williams. They contacted the defendant's Access and Assessment Service to inform them of what had happened and of the need to for social services to take care of the children. Mrs McLaughlin led a team of social workers to respond to this request. The scene they found clearly concerned them. Ciara Toal, the social worker, [who was not one of those who visited the home on this occasion] made a note on 5 July of what must have been reported to her, that the
"family home was found to be were extremely dirty and untidy and unfit for the children to be living in. The children looked unkempt in that their clothes were dirty and their hairs [sic] were quite matted. Dirty mattresses were also found which some of the children had been sleeping on. The children also informed my manager and colleagues … that some were even sleeping three to a mattress."
She also noted that when she saw the children at the office two of them were sufficiently hungry to finish off not only their own plates of food but also what their siblings left. In an email written the following day Mrs McLaughlin described the home as being "extremely dirty and unhygienic." In a later summary of a Children's Resource Panel meeting on 16 July it was recorded that the home was "dirty, cluttered, mattresses had been ripped out, and there was no food and clean clothes. Twigs and canes wrapped together with string were found in each room (allegedly used for beatings)"
In a statement for the police made on 27 July Mrs McLaughlin stated that she was "immediately struck by the chaotic, disorganised, dirty, unhygienic and filthy environment of the home." It was her judgment that placements were required for the children "as I could not leave them in the dangerous and inappropriate environment in which they were living." The cleanest room, where the TV was placed, had clothes strewn across it; it was dirty and had loose wires across it. The bathroom was extremely dirty; all areas in it were "ingrained with dirt and grease. It appears not to be used." The toilet was in a similar condition. The mattress in one of the bedrooms was "dirty and rotten with dirty sheets on it". Clothes were strewn across the room or were in piles against the walls. She stated that she could not find a clean pair or knickers for one of the younger children. The only clean clothes were adult male clothes in the wardrobe, still in their dry cleaning bags. In the kitchen the floor was filthy, and there was "no apparent food in the freezer – only plastic bags." The cooker was dirty with burnt rice in the grime. She saw no food for the children. In the hallway, which was also dirty, there were loose wires across the floors and sockets hanging from the walls. The children were unkempt with matted hair, and dirty faces and clothes. They were extremely reluctant to engage with the social workers and the two eldest were "hostile". One child had an apparent skin condition some parts of which were "weeping". Mrs McLaughlin could find no medication in the home. In her oral evidence she told me that this was one of the worst homes she had ever been in, before or since. A statement made by another social worker on the visiting team, Mark Burgess, was to a similar effect.
In her evidence to this court Mrs McLaughlin confirmed that she could clearly remember the dry cleaned suits. There was material covering the windows which made it dark. There were clothes piled up on the floor and wires across the room. Thee were bundles of sticks in each room,. The home smelt of urine. A police officer put a key into the grime on the bath "and it swallowed up the key". The 'fridge and cooker were very dirty. There was no food apart from a snapper fish in the freezer.
At a Child Protection Conference on 31 July, the police officers who attended at the home to arrest Mr Williams are recorded as having reported that the conditions they saw were "not suitable for children." They referred to the smell of urine. They said that the lack of hygiene and hazards rather than the uncleanliness were their main concerns.
While Mr and Mrs Williams accepted that the home was in a poor state they did not accept that it was as bad as made out by the evidence I have just described. Mr Williams said that normally they made sure their children had a healthy diet and that the home was clean and tidy. Mr Williams said that his wife had been unwell for a short time and because of that the state of the home "not in the best state". He denied it was as dirty as described by the defendant's witnesses, still less that it was uninhabitable, that there were wires across the floor, that there were no clean knickers or that the was no food available. These were, he asserted, all lies.
I consider that Mrs McLaughlin's recollection of the state of the property has been affected by the passage of time, and in some limited respects is unintentionally exaggerated. For example, I doubt that it would be literally possible for a key to be "swallowed" in grime as she suggested. Furthermore Ms Toal's recollection of what was reported with regard to the availability of clean underwear was that it had been difficult to find any rather than that there was none. Nonetheless the material to which I have just referred persuades me that, bluntly, the premises were in an appalling state. It is inevitable that social workers must as part of their duties see many homes which are less than perfect in their cleanliness and safety, but it is evident to me that the concerns expressed in the contemporaneous records were not exaggerated for forensic purposes but were genuine and substantially true. It is understandable that caring parents like Mr and Mrs Williams find it hard to accept the full extent of the deficiencies that have been described, but I cannot accept that the state as described represented a transient phenomenon caused by a short term illness. If there were any doubt it is laid to rest by the photographs produced to me by the claimants. These were put to witnesses, but their provenance was not a matter of formal evidence and is therefore uncertain. It appears, however, that they may have been taken by the police. It is possible they were taken after some, perhaps preliminary, attempt, had been made to start remedying the deficiencies. Nonetheless they show very concerning conditions. If there is more food in the freezer than the snapper just mentioned, it is contained in unwholesome looking bags. The fridge itself is filthy, as is the cooker and various other surfaces. There are indeed hazardous wires on the floor, even if they are not across the entire floor. There are piles of items in various places, and a tied bundle of sticks is clearly visible. Accordingly I am entirely satisfied that on 5 July 2007 the claimant's home was not a suitable environment in which to accommodate children of any age.
That the conditions in the home may not always have been unsuitable for children in this way received some support from the information the defendants obtained from the school attended by four of the children that they always looked clean and tidy. They had a 100% attendance and punctuality record, and there were no other concerns expressed. However this reassurance cannot outweigh the strength of the evidence of the actual observations made on 5 July by professional social workers whose findings, subject to the qualification mentioned above, have been, I am satisfied, substantially accurately described to me by Mrs McLaughlin. Further it was clearly reasonable for her and her colleagues to believe that such a state of affairs could not have come about during a few days or even weeks previously.
Police bail for Mrs and Mrs Williams
As already described Mr and Mrs Williams were arrested in the course of the afternoon of 5 July and taken to a police station and interviewed. They did not at that time know where their children were and this must have been an extremely distressing and stressful experience. The youngest child was only 8 months old at the time and was still being breast-fed. The claimants were released on bail in the early hours of the morning of 6 July. Mr Williams says they were told by the police to go to social services who would return their children. According to him no mention was made of any bail conditions.
While this latter point seems surprising, there is no evidence to contradict this recollection. The records of bail produced to the court are not signed by either claimant but instead in the space for the signature of the person bailed is typed the word "INCAPABLE". This is consistent with what Mr Williams told me: he said that he and his wife were in a "dazed state" when they left the police station. They did not look at the documents they were given before they left. It was only subsequently that they realised there was a condition. Therefore I accept that the claimants did not understand that they had been granted bail subject to a condition at this time, even though they were handed copies of the bail documents. Nonetheless it is clear that bail was granted by the police on condition that Mr and Mrs Williams not contact their children "unless supervised". The ground given on the forms for this condition was "to prevent interference with victims". The legal consequences of this condition will be considered below but, as will be seen, it was at least a practical impediment to the return of the children to their parents' care. Although the condition was silent as to the nature of the supervision expected, it was interpreted as requiring the presence of a social worker during any contact with the children.
It is rightly not in dispute that the circumstances existing on 5 July justified immediate action to safeguard the welfare of the children and, in particular, it is accepted that the police decision to invoke their powers to protect children under section 46 of the Children Act 1989 was justified. A serious allegation of physical abuse had been made which clearly required investigation. The police arrested the parents and therefore those with parental responsibility were not in a position while in custody to look after the children. I am satisfied that the children presented as possibly neglected. The home was clearly in an unsuitable state to accommodate the children, even if an adult to care for them had been identified. However the relevance of these concerns extends beyond the immediate action taken by the police: it forms the background to the consideration of the subsequent actions of the defendants to which I must now turn.
Availability of alternative accommodation
There is a dispute as to whether any accommodation was available from family members of friends which could have been used to avoid the children continuing to be placed by the local authority in foster homes. Mr Williams stated that there were three relatives, an aunt, a cousin and an uncle who could have offered accommodation. His brother could have taken all eight. However he agreed that over the ensuing period in which the children were in foster care none of them had written to the defendants offering accommodation. One of the adult children who gave evidence told me that he had been taken by a social worker to a friend's home nearby to see if it was suitable. Then they went to another set of family friends. He thought that they had said they would offer accommodation.
Mrs McLaughlin asserted in her police statement of 25 July 2007 that she asked another social worker, Anne Ayodeji, to go with the child to whose evidence I have just referred to see if there were family or friends who could accommodate the children, but they could not do so. The police statement made by Mr Burgess, social worker, also asserted that they had been given two names and that the son had confirmed that they were indeed family friends. Mrs McLaughlin had asked Ms Ayodeji to accompany the son to see if their accommodation was suitable. However later, he stated, he was told by Mrs McLaughlin that the children could not be placed with family friends because of a fear that the parents might be released from police custody during the night. Asked about this, Mrs McLaughlin recalled that the response reported back from the visit to the friends was that they could not accommodate the children; she thought Mr Burgess's statement was inaccurate. Ms Toal also said that on the night the children were taken into care a colleague had been provided with the name of someone to contact, but reported back that this person was not suitable. Mr McCallum, who, it will be recollected, was not present at the home that evening, asserted in his witness statement for these proceedings that the parents had not volunteered the names of any one who could look after any of the children. Ms Ayodeji did not give evidence before me, but did give a statement to the police on 25 July 2007 in which she stated that it had been her role to try to find other family members after the children had been taken into police protection but she had been unable to do this. Unfortunately she did not describe what, if anything, she had done to explore the possibilities.
I find it surprising that there is no contemporaneous record of the steps taken to look for alternative accommodation. However I note that in spite of the assertion made now by the claimants that family members were willing to take the children in, no such suggestion was made in the correspondence sent by their solicitor to which I will have to refer for other reasons below. Given the clear wish, indeed desperation, of the claimants to have their children back in the family rather than in separate and in some cases what they believed to be distinctly undesirable foster homes, I consider the absence of such a suggestion at the time inconsistent with any realistic chance of one or more family members having been willing or able to take on the challenging task at short notice of accommodating all or part of this large family. I conclude that throughout the period with which I am concerned no realistic alternatives were available, and that the defendants did probably take sufficient steps on 5 July 2007 to satisfy themselves of that position at the time.
The "section 20 agreement"
On 6 July Mrs and Mrs Williams signed a document carrying the title "Safeguarding Agreement in respect of [their eight children]". It was also signed by Ciara Toal. The circumstances in which it was signed, and its effect have been the subject of significant dispute between the parties and I must therefore set out what happened in some detail. Where there has been a significant dispute of fact I shall make my factual findings clear.
After reciting the parties to it [the claimants and Hackney Children and Young Person's Services] the "agreement" continued as follows
This document was drawn up on Friday 6th of July 2007 and is a Safeguarding Agreement concerning the child mentioned above.
This Safeguarding Agreement was drawn up in relation to all of the children. Although the agreement is not legally binding, it may have significance, should there be any court procedures in the future.
We, Mr & Mrs Williams parents to all the above children, agree to the following:
1. That all the children will remain in their foster placements for the present time.
2. When contact takes place you will encourage the children to return to their placements and ensure [sic] them that this is a safe place.
3. That we will behave appropriately while contact is taking place, ie assure the children that we love and care for them, show them affection.
4. That we will not discuss with any of the children what has happened.
5. To continue to comply with Hackney Children's Social Care.
In conclusion Hackney Children's Social Care will seek legal advice with a view to protecting the children if it is found that parents are not complying with the contents of this Safeguarding Agreement.
By the time this document was signed all the claimants' children had been placed in foster homes. Mr Williams's account in his witness statement – supported formally by Mrs Williams in her witness statement - is that after their release from the police station he and his wife went to the defendant's offices arriving at around 9.30 am. They met Mrs McLaughlin and asked for their children back. She told them that the defendant wanted to inspect the house and if it had been tidied up and cleaned they would return the children. She told them to return to the office at midday. Accordingly, he says, the claimants went home and cleaned and tidied it up. No-one attended to inspect it. On their return the defendant's office they were met by Mrs McLaughlin and Ms Toal who told them that the police had now issued a Police Protection Order under which the defendant could hold he children for 72 hours. Ms McLaughlin then produced a document in which the defendant said the children would be released after 72 hours, and asked the claimants to sign it. Mr Williams said he wanted to speak to a solicitor before signing a document to which Mrs McLaughlin responded that the claimants should not speak to a solicitor as otherwise they would not get their children back. As the claimants were about to leave Mrs McLaughlin told them that unless they signed a document they would not see their children again. Because they were tired and did not understand what was happening they panicked and signed the document Mrs McLaughlin then said that they could see the children that afternoon. Mr Williams says he made it absolutely clear that the claimants wanted to take their children home but they were misled into signing the "agreement".
Before considering the defendants' evidence on this episode it is necessary to refer to the relevant documentary material. In addition to the "agreement" described above the claimants have signed forms for each child which contain consents to various forms of medical treatment, should that prove necessary. An example appears at bundle 3A page 39 to 40. Further printed forms, also dated 6 July 2007 and containing the claimants' signatures are on their face each an agreement by them for the local authority to accommodate a child or young person, except for the fact that no name for any child has ben inserted on the form – see bundle 3A pages 49, 62, 81, 100. It may be that if the forms, which appear to have consisted of some 19 pages each, were viewed as a whole it would be clear to which children they referred, but the space for a child/s name on the signature page remains empty.
Ms Toal took a note of meeting with the parents that day. While it needs to be read in full, it is sufficient to summarise the points that appear to me to be pertinent:
a. Mr Williams is recorded as claiming that the home was tidied twice every day with the help of the children but that on the previous day the children were too tired, and he was unable to do so because he was working. The claimants rejected the, to my mind, entirely reasonable point offered by Mrs McLaughlin that the direct and untidiness observed could not have accumulated in days but must have been over weeks.
b. The claimants denied that their children had looked dirty and unkempt.
c. They denied that the cooker was covered in food that looked as though it had been there a long time. If they did indeed deny this, their denial is at odds without the photographs I have been shown.
d. While Mr Williams did not agree that the mattresses were dirty he did accept that what the children were sleeping on was inappropriate.
With regard to the proposed "agreement". The following discussion is recorded:
Kulbant [McLaughlin] then spoke to Mr and Mrs Williams about the children remaining [in] accommodation until we complete our investigation. She also informed parents that she understood their need to have the children home but outlined that we must carry out assessment first before this can take place. Kulbant asked parents if they would agree to work with us and in turn give their consent for all their children to remain accommodated.
Kulbant discussed with parents the need for all the children to be medicated and asked for their consent on the issue also. In response to this Mr Williams stated that he was not happy for his children to remain in care but that he preferred to work with us than against us. He also outlined that he hoped we would do everything in our power to ensure that his children would be returned home to him and his wife as quickly as possible. He stated they would agree to the children remaining accommodated and for them all to be medicated as long as they could attend the medicals. Kulbant informed Mr & Mrs Williams that this was fine.
After a record of discussion about what would be in the agreement, rehearsing the terms I have set out above, and the child's allegations of assault, it was recorded that:
Parents agreed to come back into our office at 1pm to complete the Section 20 forms, to sign the Safeguarding Agreement, to sign the form giving medical consent and to give me any necessary items the children may need.
There appears to be no contemporaneous record of the second meeting, which, as is apparent from the note just quoted, must have taken place.
In her witness statement Ms Toal said that she could not recall the exact details of the conversation, but her practice would have been to explain that there were two options for the defendant. Either the consent of the parents could be obtained or they could make a court application: the defendants followed the "no order approach" wherever possible in order to work in cooperation with the parents.. The parents would have been aware that they did not have the option of taking he children home because of the bail condition. It was possible she did not expressly explain that the parents could withdraw their consent at any time. She would have made it clear that the children would not be returned until the investigation was completed, and it was assessed that it was safe for the children to do so.
In her oral evidence Ms Toal accepted that, contrary to her witness statement, she may not have mentioned the option of children staying with family or friends, as there was no note of that being said. She also accepted that she had been concerned about Mrs Williams's presentation: she was "quite low" and quieter than Mr Williams. However, while both parents were rightly upset and low in mood, they were able to engage in conversation and appeared to understand what was being asked. She agreed that the notes showed that Mrs Williams did not want the children to be accommodated by the defendants. Ms Toal said her understanding of the bail conditions was that if the parents had taken their children home they would have been in breach of bail and would probably have been arrested.
Mrs McLaughlin found it difficult to remember who had done the talking at this meeting, although she thought it was Ms Toal. She recalled that Mrs Williams was quiet and upset and that Mr Williams was understandably cross. She could not remember if the right to take the children home after 72 hours or not to agree to the authority accommodating their children had been explained.
Mrs McLaughlin told me she recalled that at the meeting on 6 July Mr Williams was "understandably" cross; Mrs Williams was quiet and upset. She avoided eye contact. She was concerned about Mrs Williams's mental health but did not think she lacked capacity or an understanding about what was happening. She could not remember any of the detail of what was discussed, but recalled Ms Toal talking about the children and section 20 of the Children Act 1998. She could not remember if the parents were told of their right to take the children home at the end of the 72 hour period. She had noted that Mrs Williams looked "down" and was concerned about her mental health. However she had not thought that she lacked capacity to give her consent, or was unable to understand what was happening. She did recall the parents saying they had tidied their home during the night. She emphatically denied that she told the claimants that their children would be returned in 72 hours if they signed the agreement, or that they should not go to a solicitor or that they would not see their children again if they did not sign. She said that this would have been against all her ethics as a social worker.
In assessing the evidence I have heard on the circumstances surrounding the signing of the so-called section 20 agreement, I have had regard to the fact that the claimants were on any view in a highly distressed and doubtless tired state when they met Mrs McLaughlin and Ms Toal. Their recollection of what they were told is likely to have been clouded by their understandable emotions, and indeed anger, at what had happened. They were vulnerable people without advice facing two officials vested with the powers of the state to take their children away, possibly indefinitely. The claimants were not therefore in an ideal position to understand the complexities of what they were being faced with. On other side, the two social workers were dealing with an unusual and fraught situation. The defendants had as a matter of urgency found themselves having to accommodate eight children, who themselves were showing signs of distress, against a background of apparently serious allegations of physical abuse, and a home which was without doubt at that moment unfit for accommodating children. Considerable, and to my mind laudable, energy had been devoted to inspecting the home and relocating the children in these challenging circumstances. The parents, however caring they wanted to be, were arguably not in a position to offer that care without being in breach of bail conditions. The notes of what happened are almost certainly not complete and understandably the officers' direct recollection of what was said is also incomplete. However, given all the circumstances, I consider it likely that the claimants have built up a mistaken picture in their minds of what they were told, in part through misunderstanding at the time and in part through their distress at having to relive these events repeatedly over the intervening years. I prefer the account to be gained from the contemporaneous record as supplemented by the evidence of Mrs McLaughlin and Ms Toal where it conflicts with that of the parents. That does leave a number of points of serious concern about the process adopted to which I will return after examining the legal framework under which the consensual accommodation of children by a local authority is meant to occur.
The relevant statutory framework
Unless otherwise stated the citation of statutes refers to the provisions in force at the time of these events in 2007. I must consider not only of the local authority's powers and duties with regard to the protection of children, but the powers of the police in that regard, as well as the role played by police bail.
When there are concerns about the safety and welfare of children there are a range of options available to address the issues. I will consider those principally relevant to the circumstances of this case.
Police protection
Section 46 of the Children Act 1989 provides in so far as is relevant:
(1) Where a constable has reasonable cause to believe that a child would otherwise be likely to suffer significant harm, he may (a) remove the child to suitable accommodation and keep him there…
(2) As soon as is reasonably practicable after taking a child into police protection, the constable concerned shall
(a) inform the local authority within whose area the child was found of the steps that have been, and are proposed to be, taken with respect to the child under this section and the reasons for taking them
(b) give details to the authority within whose area the child is ordinarily resident ("the appropriate authority") of the place at which the child is being accommodated.
(c) Inform the child (if he appears capable of understanding)
(i) of the steps that have been taken with respect to him under this section and of the reasons for taking them; and
(ii) of the further steps that may be taken with respect to him under this section
(d) take such steps as are reasonably practicable to discover the wishes and feelings of the child
(e) secure that the case is inquired into by an officer designated for the purposes of this section…
(f) where the child was taken into police protection by being taken to accommodation which is not provided
(i) by or on behalf of a local authority….
secure that he is moved to accommodation which is so provided.
(4) As soon as is reasonably practicable after taking a child into police protection, the constable concerned shall take such steps as are reasonably practicable to inform
(a) the child's parents…
of the steps that he has taken under this section with respect to the child. The reasons for taking them and further steps that may be taken with respect to him under this section
(5) On completing any inquiry under subsection (3)(e), the officer conducting it shall release the child from police protection unless he considers that there is still reasonable cause for believing that the child would be likely to suffer significant harm if released.
(6) No child may be kept in police protection for more than 72 hours.
(7) While a child is being kept in police protection, the designated officer may apply on behalf of the appropriate authority for an emergency protection order to be made under section 44 with respect to the child.
(8) An application may be made under subsection (7) whether or not the authority know of it or agree to it being made
(10) Where a child has been taken into police protection the designated officer shall allow
(a) the child's parents…
to have such contact (if any) with the child as, in the opinion of the designated officer, is both reasonable and in the child's best interests.
(11) Where a child who has been taken into police protection is in accommodation provided by or on behalf of the appropriate authority, subsection (10) shall have effect as if it referred to the authority rather than to the designated officer.
"Harm" is defined in section 31(9) as
ill-treatment or the impairment of health or development [including, for example, impairment suffered from seeing or hearing the ill-treatment of another]
Whether harm is "significant": to be determined in accordance with section 31(10) [see section 105] which provides:
Where the question of whether harm suffered by a child is significant turns on the child's health or development, his health or development shall be compared with that which could reasonably be expected of a similar child.
It is stating the obvious to observe that this provision gives a power to the police to address an emergency in which, in their judgment, children can only be protected from the risk of "significant harm" by removing the child to "suitable accommodation", preferably provided by the relevant local authority. Accordingly the police are required to notify that authority as soon as reasonably practicable. Responsibility for arranging contact between the parents and their children transfers to the local authority [see subsection (10) above]. As was common ground between the parties, a child cannot be kept in police protection for more than 72 hours. In that time the section requires the police to make inquiries [subsection (3)(e)], and they have the power to apply for an emergency protection order ["EPO"] under section 44 [subsection (7)].
Care orders and interim orders
A local authority may apply for a care order [section 31] and in so doing may seek an interim care order [section 38]. Such orders cannot be made unless [section 38, 31(2)] the court is satisfied that
(a) that the child concerned is suffering, or is likely to suffer, significant harm; and
(b) that the harm, or likelihood of harm, is attributable to—
(i) the care given to the child, or likely to be given to him if the order were not made, not being what it would be reasonable to expect a parent to give to him; or
(ii) the child's being beyond parental control.
An interim order takes effect for such period as the court specifies but in any event comes to an end at the conclusion of the proceedings.
Emergency Protection Orders
Section 44 of the Childrens Act 1989 empowers the court, on application, to make an Emergency Projection Order [EPO]. While in force this, among other things, authorises (but does not compel) the removal of the child at any time to accommodation provided by or on behalf of the applicant and gives parental responsibility to the applicant [section 44(4)]. The power of removal is only to be exercised to safeguard the child's welfare [section 44((5)(a)], and the applicant is obliged to take such action in meeting parental responsibility as is reasonable to safeguard and promote the child's welfare. Before granting an EPO the court must be satisfied that there is reasonable cause to believe that the child is likely to suffer significant harm if not removed to accommodation provided by or on behalf of the applicant [section 44(1)(a)]
In a case to which I was not directly referred, X v Liverpool City Council [2003] EWCA Civ 173 (sub nom Langley v Liverpool City Council [2006] 1 WLR 375, helpful guidance was given about the relationship between the use of police protection orders and applications to the court for EPOs. The case concerned rather different facts to the present case: concerns arose for the safety of children whose father persisted in driving them around although registered blind. The police were requested by the local authority to take the children into protection under section 46, even though an EPO had already been obtained. In allowing a claim by both parents and children against both the police and the local authority for breach of their Article 8 rights, the Court held that there was no statutory prohibition on the use of section 46 where an EPO was in force [paragraph 30]. The reasoning is instructive for the present case. Dyson LJ, as he then was, with the agreement of Thorpe and Lloyd LJJ, rejected the contrary construction because
… there would be a real danger that one of the important powers provided by Parliament for the protection of children would be emasculated. [Paragraph 30]
and that
The relevant provisions of the Act should be construed so as to further the manifest object of securing the protection of children who are at risk of significant harm. A construction of the Act which prohibits a constable from removing a child under section 46 where he has reasonable cause to believe that the child would otherwise be likely to suffer significant harm would frustrate that object. [paragraph 32]
Dyson LJ compared and contrasted the requirements for an EPO to be made and the police powers under section 46. An EPO was a court order which could not be made unless the court was satisfied of the conditions in the statute and gave parental responsibility to the applicant. An EPO did not require the removal of the child which could only be done if reasonably required to safeguard or promote the child's welfare. The court had the power to make appropriate directions with regard to parental contact and medical examinations. The section 46 regime was quite different: "the court is not involved" [paragraphs 34, 35]. In those circumstances the Court held that where an EPO was in place, section 46 should not be used unless there were
"… compelling reasons to do so. The statutory scheme shows that Parliament intended that, if practicable, the removal of a child from where he or she is living should be authorised by a court order and effected under section 44… The removal of children, usually from their families, is a very serious matter, It is, therefore, not at all surprising that Parliament decided that the court should play an important part in the process. This is a valuable safeguard. The court must be satisfied that the statutory criteria for removal exist."
… In my judgment, the statutory scheme clearly accords primacy to section 44. Removal under section 44 is sanctioned by the court and it involves a more elaborate, sophisticated and complete process than removal under section 46. The primacy under section 44 is further reinforced by sections 46(7) and 47(3(c). The significance of these provisions is that they show it was contemplated by Parliament that an EPO may well not be in force when a removal is effected under section 46, and that removal under section 46 is but the first step in a process which may then include an application for an EPO. [paragraphs 36, 37]
Thorpe LJ added that
Practitioners, whether in the legal department or the social services department of the local authority, will naturally consider the powers provided by Parts IV and V [of the Act], and the limitations on those powers, when considering how and to what degree they should invade the territory of the family in order to protect its children. If there is no imminent danger the appropriate application is an interim care order. If there is greater urgency the appropriate remedy is an emergency protection order. It is to be emphasised that even in an emergency the local authority must apply to the family proceedings court for the order and prove the need for the order to the satisfaction of the court. This is a potent check on the local authority's powers of intervention in an emergency. [paragraph 76]
I note that this decision was handed down in July 2005, two years before the events with which I am concerned. It makes it clear that unless there urgency requires otherwise, local authorities should apply for an EPO in preference to reliance on the emergency powers of the police in order to ensure the safeguard of court scrutiny.
Consensual accommodation of children
Under section 20 of the Childrens Act 1989 local authorities are empowered to take children into accommodation provided by it in the circumstances specified by the section. As this provision has been the subject of detailed argument I shall set it out in full:
20.— Provision of accommodation for children: general.
(1) Every local authority shall provide accommodation for any child in need within their area who appears to them to require accommodation as a result of—
(a) there being no person who has parental responsibility for him;
(b) his being lost or having been abandoned; or
(c) the person who has been caring for him being prevented (whether or not permanently, and for whatever reason) from providing him with suitable accommodation or care.
(2) Where a local authority provide accommodation under subsection (1) for a child who is ordinarily resident in the area of another local authority, that other local authority may take over the provision of accommodation for the child within—
(a) three months of being notified in writing that the child is being provided with accommodation; or
(b) such other longer period as may be prescribed.
(3) Every local authority shall provide accommodation for any child in need within their area who has reached the age of sixteen and whose welfare the authority consider is likely to be seriously prejudiced if they do not provide him with accommodation.
(4) A local authority may provide accommodation for any child within their area (even though a person who has parental responsibility for him is able to provide him with accommodation) if they consider that to do so would safeguard or promote the child's welfare.
(5) A local authority may provide accommodation for any person who has reached the age of sixteen but is under twenty-one in any community home which takes children who have reached the age of sixteen if they consider that to do so would safeguard or promote his welfare.
(6) Before providing accommodation under this section, a local authority shall, so far as is reasonably practicable and consistent with the child's welfare—
(a) ascertain the child's wishes [and feelings] regarding the provision of accommodation; and
(b) give due consideration (having regard to his age and understanding) to such wishes [and feelings] of the child as they have been able to ascertain.
(7) A local authority may not provide accommodation under this section for any child if any person who—
(a) has parental responsibility for him; and
(b) is willing and able to—
(i) provide accommodation for him; or
(ii) arrange for accommodation to be provided for him,
objects.
(8) Any person who has parental responsibility for a child may at any time remove the child from accommodation provided by or on behalf of the local authority under this section.
(9) Subsections (7) and (8) do not apply while any person—
(a) in whose favour a residence order is in force with respect to the child;
(aa) who is a special guardian of the child; or
(b) who has care of the child by virtue of an order made in the exercise of the High Court's inherent jurisdiction with respect to children,
agrees to the child being looked after in accommodation provided by or on behalf of the local authority.
(10) Where there is more than one such person as is mentioned in subsection (9), all of them must agree.
(11) Subsections (7) and (8) do not apply where a child who has reached the age of sixteen agrees to being provided with accommodation under this section.
The structure of the section is that it imposes a duty on the relevant local authority to provide accommodation to children if the conditions of subsections (1) or (3) are met, and a discretion to do so if the conditions of subsections (2), (4) or (5) apply. Crucially accommodation cannot be provided under this section if a person with parental responsibility and who is willing to provide or arrange for accommodation objects [subsection (7)]. Furthermore any person with parental responsibility may remove the child from such accommodation at any time. It is to be noted that these limitations on the local authorities duty or power to accommodate children are not qualified by any requirement that the objecting parent is capable of caring for them, or that the proposed accommodation is adequate. This has been explained, albeit, I think, obiter by Black LJ in Re B (A Child) (sub nom Redcar and Cleveland Borough Council [2013] EWCA Civ 984 at para 34:
I raised the question during the appeal hearing as to whether a parent who is inadequate is in fact "willing and able to …provide accommodation" but it did not excite much argument. That is explained, I think, by there being a common understanding that where parents in fact object to a local authority providing accommodation, a local authority will have to have recourse to care proceedings if they seek to accommodate a child and any debate as to whether the parents are "able" to provide accommodation is to be had in that context, not in the context of section 20. That accords with the overall structure of the Children Act 1989 and is the interpretation I would presently support.
At first sight section 20 might be thought not to require the active agreement of those with parental responsibility: the duty or power to provide accommodation is expressly conditional on the absence of parental objection. However, as was submitted by Ms Cooper without contradiction from Mr Sinai, on a proper construction the section imposes a more stringent requirement, namely that the positive and informed consent of a parent must be obtained. I was referred to R (G) v Nottingham City Council [2008] EWHC 152 (Admin), a decision of Munby J, as he then was. The case concerned the summary removal of a newborn baby from its 18 year old mother without any court order. The learned judge ordered the immediate return of the baby to the mother. He stated the law in emphatic terms which he described as "elementary" [paragraphs 15-18]:
15. The law is perfectly clear but perhaps requires re-emphasis. Whatever the impression a casual reader might gain from reading some newspaper reports, no local authority and no social worker has any power to remove a child from its parent or, without the agreement of the parent, to take a child into care, unless they have first obtained an order from a family court authorising that step: either an emergency protection order in accordance with section 44 of the Children Act 1989 or an interim care order in accordance with section 38 of the Act or perhaps, in an exceptional case (and subject to section 100 of the Act), a wardship order made by a judge of the Family Division of the High Court.
16 Section 46 of the Children Act 1989 permits a police constable to remove a child where he has reasonable cause to believe that the child would otherwise be likely to suffer significant harm, and that power can be exercised without prior judicial authority. But the powers conferred on the police by section 46 are not given to either local authorities or social workers.
17 Local authorities and social workers have no power to remove children from their parents unless they have first obtained judicial sanction for what they are proposing to do. Only a court can make a care order. Only if a court has authorised that step, whether by making an emergency protection order or by making a care order or an interim care order or in some other way, can a local authority or a social worker remove a child from a parent. And the same goes, of course, for a hospital and its medical staff.
18 As I said during the course of the hearing, no baby, no child, can be removed simply "as the result of a decision taken by officials in some room."
The learned judge went on to consider the circumstances in which the urgency of the situation precluded obtaining a court order before action was required, for example where a medical emergency was such that there was "not even time to make an urgent telephone application to a judge" [paragraph 25]. In such cases the doctrine of necessity could be involved, but, as he made clear, only for the shortest time.
The same case returned before Munby J, in R (G) v Nottingham City Council and Nottingham University Hospitals NHS Trust [2008] EWHC 400 (Admin) in which he agreed to make a declaration that the separation of the baby from the mother had been a breach of the mother's Article 8 rights [see paragraph 77]. He made clear in emphatic terms that acquiescence could not of itself be the equivalent of consent [paragraphs 53-55]:
53. I do not wish to be misunderstood. I am not suggesting that consent to the accommodation of a child in accordance with section 20 is required by law to be in writing – though, that said, a prudent local authority would surely always wish to ensure that an alleged parental consent in such a case is properly recorded in writing and evidenced by the parent's signature. Nor am I disputing that there may be cases where a child has in fact, and without parental objection, been accommodated by a local authority for such a period as might entitle a court to infer that the parent had in fact consented.
54. But the local authority here seemed to be going far beyond this. It seemed to be conflating absence of objection with actual consent – a doctrine which at least in this context is, in my judgment, entirely contrary to principle and which, moreover, contains within it the potential for the most pernicious consequences, not least because there are probably many mothers who believe, quite erroneously, that a local authority has power, without any court order, to do what the local authority did in this case.
55. To equate helpless acquiescence with consent when a parent is confronted in circumstances such as this with the misuse (or perhaps on another occasion the misrepresentation) of non-existent authority by an agent of the State is, in my judgment, both unprincipled and, indeed, fraught with potential danger.
He went on to hold that a failure to raise an objection does not amount to consent [paragraph 57] and that [paragraph 61]:
Submission in the face of asserted State authority is not the same as consent. In this context, as in that, nothing short of consent will suffice.
The learned President returned to and repeated this point in Re W (Children) [2014] EWCA civ 1065 paragraph 34.
Any such agreement requires genuine consent, not mere "submission in the face of asserted State authority"
Of course Munby J's case was not one in which the local authority was claiming it was acting lawfully under section 20. In that context I was referred to Coventry City Council v C [2013] EWHC 2190 (Fam) a decision of Hedley J. The factual background was that a young mother had been persuaded, having been admitted to hospital as an emergency, and having been administered morphine, to consent to the child of which she had just been delivered being removed to local authority provided accommodation under section 20, although she had previously resisted proposals for such a plan. The judge had before him adoption proceedings, and the approval of a proposed settlement of a Human Rights Act claim by the mother. The opportunity was taken to consider the use of section 20 agreements. It is not totally clear to me that this consideration was strictly necessary to the decisions the court had to take, but the judgment contained guidance which was specifically approved by the President [see paragraph 46, 49]. Therefore what the learned judge said is at the very least of considerable persuasive weight and various points he made are particularly pertinent to the case before me:
a. The learned judge pointed out that section 20 is in Part III of the Act which has an emphasis on partnership and contained no compulsory curtailment of parental responsibility. While unwarranted restriction on the use of this section could undermine the partnership element of Part III, it must not be "compulsion in disguise" [paragraphs 25, 27], a description approved of by Munby P in Re W (Children) [above] paragraph 34.
b. Parents have a right to consent. This requires the social worker seeking such consent to be satisfied
i. The parent has capacity to consent
ii. He/she has been full informed and understands the nature and consequences of both consent and refusal of consent
iii. It is fair and proportionate in all the circumstances to seek the consent.
I can do no better than to set out in full the guidance of Hedley J, which followed on from this conclusion:
i) Every parent has the right, if capacitous, to exercise their parental responsibility to consent under Section 20 to have their child accommodated by the local authority and every local authority has power under Section 20(4) so to accommodate provided that it is consistent with the welfare of the child.
ii) Every social worker obtaining such a consent is under a personal duty (the outcome of which may not be dictated to them by others) to be satisfied that the person giving the consent does not lack the capacity to do so.
iii) In taking any such consent the social worker must actively address the issue of capacity and take into account all the circumstances prevailing at the time and consider the questions raised by Section 3 of the 2005 Act, and in particular the mother's capacity at that time to use and weigh all the relevant information.
iv) If the social worker has doubts about capacity no further attempt should be made to obtain consent on that occasion and advice should be sought from the social work team leader or management.
v) If the social worker is satisfied that the person whose consent is sought does not lack capacity, the social worker must be satisfied that the consent is fully informed:
a) Does the parent fully understand the consequences of giving such a consent?
b) Does the parent fully appreciate the range of choice available and the consequences of refusal as well as giving consent?
c) Is the parent in possession of all the facts and issues material to the giving of consent?
vi) If not satisfied that the answers to a) – c) above are all 'yes', no further attempt should be made to obtain consent on that occasion and advice should be sought as above and the social work team should further consider taking legal advice if thought necessary.
vii) If the social worker is satisfied that the consent is fully informed then it is necessary to be further satisfied that the giving of such consent and the subsequent removal is both fair and proportionate.
viii) In considering that it may be necessary to ask:
a) what is the current physical and psychological state of the parent?
b) If they have a solicitor, have they been encouraged to seek legal advice and/or advice from family or friends?
c) Is it necessary for the safety of the child for her to be removed at this time?
d) Would it be fairer in this case for this matter to be the subject of a court order rather than an agreement?
ix) If having done all this and, if necessary, having taken further advice (as above and including where necessary legal advice), the social worker then considers that a fully informed consent has been received from a capacitous mother in circumstances where removal is necessary and proportionate, consent may be acted upon.
x) In the light of the foregoing, local authorities may want to approach with great care the obtaining of Section 20 agreements from mothers in the aftermath of birth, especially where there is no immediate danger to the child and where probably no order would be made.
There is no formal requirement that the parent's consent to a section 20 arrangement be obtained in writing [see Re G [above] paragraph 53], but clearly that would be a prudent step to take for all concerned, and that form should not imply or suggest any form of coercion. The form of some agreements has been the subject of adverse, albeit obiter, comment in re W [above]. Tomlinson LJ [paragraph 41, describing the agreement before the Court there as "almost comical in the manner in which it apparently proclaims that it has been entered into under something approaching duress." He went on:
There must be a suspicion that the reason why the mother did not object was because she was made to understand that if her agreement was not forthcoming, public law proceedings would have been instigated. I cannot believe that section 20 was enacted in order to permit a local authority to assume control over the lives of the mother and her children in this way.
Police bail
Bail in this case was granted under the powers accorded to police by section 37 of the Police and Criminal Evidence Act 1984. Conditions may be imposed by virtue of section 47. The person bailed has a right to apply to a magistrates court for a variation of the conditions: section 47 (1E), (1D). The conditions can be varied by the police. Breach of a bail condition entitles the police to re-arrest the bailed person: section 46(1A). Such a breach does not constitute a statutory offence: Regina v Ashley [2005] EWCA Crim 2571, [2004] 1 WLR 2057.
It follows that any attempt by Mr and Mrs Williams to effect the return of their children home would not be an offence, unless, arguably, the conduct amounted to some substantive offence. Therefore the consequences of non-compliance would be most likely limited to a consideration by the police of whether to re-arrest the parents. The most likely immediate reaction to any attempt by the parents to take their children out of foster care would, or should, have been an urgent application by the defendants to the court for one of the available orders authorising them to retain the children in their care. Such an application would of course have enabled the parents to make representations to the court and, potentially give undertakings with regard to their care of the children and their plans for improving the home.
The parties' submissions on the validity of the section 20 agreement
The claimants submit that the defendant had no power to keep their children away from them after the expiry of the PPO, 72 hours after it was made on 5 July 2007, without either a court order of one of the types described above, or the consent of the parents to a consensual arrangement pursuant to section 20. They submit that there was no valid consent obtained on 6 July for a number of reasons:
a. The mother at least lacked the capacity to give such consent because of her mental illness or general distress.
b. Neither parent was fully informed to enable them to fully understand the consequences of their giving a consent, to appreciate the options available, and to be in possession of all the material facts.
c. They were coerced into signing the agreement by the threat of not seeing their children again.
d. They were not told of their right to take their children home at any time
e. There was no indication that the agreement was to have any effect after the expiry of the PPO.
The defendants' argued that there was a valid consent under section 20. Mr Sinai relied heavily on what he said was the inability of the parents to provide accommodation because of the bail condition. It was his case that unless the person objecting was able to provide accommodation the right to object did not exist. Mr Sinai submitted that this as not a case of lack of capacity and that I should infer that the effect of section 20 was explained.
Conclusions on validity of section 20 agreement
Capacity for this purpose is equated to capacity as defined in the Mental Capacity Act 2005: see paragraph 37 of Coventry City Council v C [above]. I am satisfied that both Mr and Mrs Williams had the capacity to understand what they were told and the consequences of the decision they were being asked to make. They were distressed, but not so distressed that they lacked the capacity to make decisions. In my judgment this case is far removed from that of the newly delivered mother under consideration in C. Mr and Mrs Williams were able to express their wish to have their children returned as soon as possible, and to challenge the allegations made against them. They were capable of understanding what they were told. That their distress has resulted in their misunderstanding what they were told has more to do with the inadequacy of the information conveyed to them and its communication than their capacity to understand it.
I do not consider the claimants were fully informed of the matters of which they should have been informed:
a. Bearing in mind the threatening circumstances in which the "Safeguarding Agreement" was offered to the claimants, its form suffered from very similar defects to those described by Tomlinson LJ as being "comical".
i. On its face the agreement is said to have possible "significance" in court proceedings. The strong inference is that the "significance" would be adverse to the parents' prospects of seeing their children back home. This is reinforced by the threat of the defendants to seek legal advice in the event of non-compliance by the parents; clearly such advice would be with a view to making an application to the court.
ii. The document makes no reference to the legal basis on which the children are to be accommodated by the defendants. There is therefore no guidance for the parents as to the context of what they are signing.
iii. The document contains only a list of obligations being imposed on the parents, with no reference to any obligations on the part of the defendants. In particular there is no mention of the parents' legal right to withdraw their consent and require the return of their children.
iv. The parents are required "to comply" with the defendants whatever that means. It has the look of a provision which requires the parents to comply with absolutely anything the defendants might require.
b. There is no persuasive evidence that the parents were expressly told that that they had a right to take their children away from local authority provided accommodation at any time or to object to that provision and I accept that they were not. It is no justification for this omission that the bail condition prohibited unsupervised contact. As was pointed out there could have been a number of solutions, ranging from either the parents or the defendant persuading the police to vary bail to allow alternative accommodation with family and friends if any were identified who could help. There is also an issue about what the police would have done if the children had returned home. Breach of police bail is not an offence and there has been no evidence enabling me – or the claimants - to know what was likely to have happened. It is clear that this issue was not raised or discussed by Mrs McLaughlin and Ms Toal when obtaining the parents' signatures to the agreement.
c. There is no evidence that they were told, still less encouraged, to seek legal advice before signing the agreement.
d. I agree that there was no clear indication offered as to the effect of the agreement following the expiry of the PPO.
e. While I do not accept that the parents were told, or that the defendants' officer intended to convey to them, that they would never see their children again if they did not enter the agreement, I do accept that this was what, in their distressed state, the claimants understood.
f. In short the circumstances, combined with the inadequacies of the information conveyed, were such as to amount to the "compulsion in disguise" of the type described by Hedley J in the Coventry case. For the same reasons such agreement or acquiescence as took place was not fairly obtained.
For these reasons I conclude that on 6 July there was no valid consent obtained from the parents such as to give the defendant authority to accommodate the children under section 20. It is therefore unnecessary to go on to consider the final part of the test, namely whether action under section 20 was a proportionate response to the circumstances facing the defendants at that time. Had I been satisfied that the parents had been fully and fairly informed of all relevant matters and given their consent, which I am not, I would have accepted that the circumstances were such that it would have been proportionate to take action to accommodate the children under section 20. The potential risks to the children posed by the condition of the family home, the parents' apparent unwillingness to acknowledge the extent of the problem, the allegations of abuse which were under investigation, and, as I find, the absence at that time of any established alternative accommodation would have made such action a reasonable response.
The defendants' response to the letters of 13 July 2007 from claimants' solicitors
Later in the afternoon of 6 July and again on 7 July the claimants were permitted to have supervised contact with their children. On the first occasion the claimants were distressed to find that only two of them were present, but on the second all appeared. I accept the claimants' evidence that, not surprisingly, the children were exhibiting distress.
On 9 July the claimants met Mrs McLaughlin at the defendants offices. According to them they asked for the return of their children as the 72 hours period of authority under the PPO had passed. They say that Mrs McLaughlin refused this request saying that the children would never be returned and that the document they had signed permitted the defendant to keep the children indefinitely. Mrs McLaughlin denied that she would have said this. I accept her denial. While I have no doubt she would have retained concerns about the risks that might be posed to the children were they to be returned home at that point, I find it would be improbable that she would have told the parents their children would never be returned. It is, however, probable that they would have been told that the document they had signed authorised the children to be kept, as that appears to be what she believed at the time. I was not referred to contemporaneous records in relation to this meeting, and therefore it is difficult to determine whether and, if so on what, terms the claimants asked for their children to be returned. In the light of my conclusions with regard to the validity of the agreement of 6 July, this is not material and I make no finding about it. The fact is that by this time the defendants had no legal authority to hold the children.
At some point before 13 July Mr Williams consulted solicitors, Messrs Sternberg Reed. On that date they wrote and faxed two letters to the defendants' legal department. The first letter recited their understanding of the position following the PPO:
From what I could gather it appears that [Mr Williams] subsequently gave his consent to the children remaining accommodated under section 20.
The letter went on to request details of the defendants' plans, make clear the parents' concern at the way in which the children were being cared for, and stated that
Our client, and his wife, are very keen to have their children returned to their care as soon as that is thought possible, and indicated that they would cooperate with any further assessment that the Local Authority required them to undertake.
Finally they inquired whether the defendant was intending to institute care proceedings. They would be representing Mr Williams in any such proceedings.
The second letter of the same date went further:
Mr Williams wishes us to give you formal notice of his intention to withdraw consent to the accommodation of his children under Section 20 of the Children Act 1989. He wishes to continue to work cooperatively with the Local Authority and will therefore agree to their continued accommodation for a further 10 days, to Monday 23rd July 2007 in order that the Local Authority can make further investigations necessary to plan for the stable rehabilitation of the children to their parents' care.
The letter went on to ask for the plans for each individual child if the defendant felt unable to return them all. The solicitors conveyed an offer by Mr Williams to relocate to alternative accommodation to enable the children to return to their mother should that be necessary to allay the defendants' concerns. Finally the defendants were again requested to inform the solicitors of any plans to commence care proceedings.
On 16 July a meeting of the defendants' Children's Resource Panel, considered the case of this family. Dawn Carter-McDonald of the legal department and Rory McCallum were among those who attended. The minutes recorded that the parents wanted their children back. The decisions recorded were:
The plan is to return the children home
A Child Protection Conference must be held
Talk to police re procedure and bail condition
Speak to housing association and raise [at another panel] re getting the house in order
Mr McCallum was noted to be responsible for the first and third items and jointly responsible with Ciara Toal for the second. Mr McCallum said in evidence he could not recollect having spoken to the police personally: he said the purpose of the panel was to take decisions which it was the responsibility of managers to put into practice. He believed that discussions had taken place with the police, but could not point to any record of that occurring, apart from the strategy meeting on 24 July, described below. He said that a panel would never have intended an immediate return of the children, given the outstanding serious concerns. A plan to return the children "as soon as possible" [as suggested by note written after a meeting to which I refer below] would have meant that they would be returned when it was safe, the right processes were in place and bail conditions had been changed to avoid "criminalisation" of the parents. It would also have been necessary for the case to be considered by a CPC before the return.
This understanding of the meaning of the plan arrived at by the Resource Panel was not shared by all. On 19 July, a Thursday, Ciara Toal sent an email to colleagues reporting a conversation with Mrs McLaughlin. She wrote:
After speaking to my manager Kulbant McLaughlin, I would just like to make you all aware that as of today it has been decided that we do not have enough evidence for the Williams children to remain accommodated, therefore the plan is that they will either return home to their parents tomorrow or Monday. For this reason we will not need to have the LAC [Looked After Children] reviews.
Mr McCallum's reaction to seeing that email in his written and oral evidence was that it did not correlate with the decision made by the panel. While the panel decided matters in principle that was subject to the social worker being satisfied that the family was ready for re-integration, and a target date would not have been set. Work would have been required with other services. He considered it inconceivable that the children would have been returned before the CPC on 31 July. Mrs McLaughlin said that any discussion as referred to in the email, the contents of which clearly puzzled her, could not have been just with her, but would have included Sue Morris and others as a decision of this nature would have involved more senior people then her. She said at that stage Ms Toal's assessment was not completed, and the decision to return the children home would have required gathering the relevant information. The panel's expectation to return the children just could not have been completed. Confronted with this evidence Ms Toal felt she could only explain this on the basis that she understood her function following the panel's decision was to enable the children to go home.
Sternberg Reed sent a chasing letter, having received no reply to their earlier letters. The following day at 6.19 pm a solicitor from the firm emailed Erroll Reid of the defendant's legal department referring to the second letter of 13 July. She relayed an understanding of Mr Williams that the defendant would be willing to return the children were it not for the bail condition. She suggested that it would be "highly unusual" for the police to prevent children from returning home if the return was approved by social services. The email concluded:
In the event that you will wish the children to remain in foster care we await notice of your application for an interim care order. We seek clarification of your position as a matter of urgency and expect to hear from you no later than 4pm on Monday 23rd July 2007.
Mr Reid replied within 2 hours that the email had been forwarded to the fee earner for a response and ended:
It appears likely that we will proceed to a hearing given that there are further investigations and a possible charge.
On the same date, presumably after receiving Sternberg Reed's email, Mr Reid faxed copies of the letters to Mrs McLaughlin.
Mr McCallum told me that his understanding of the letter would have been that although the solicitors were serving a notice of intent they did not want to be precipitous. He thought they were working together and there was a working assumption that the consent remained in place.
On Monday 23 July the defendants held a panel to consider the case of the children attended by, among others, Mrs McLaughlin, Ciara Toal and the director of the children and young persons panel. It was suggested that the letters and emails from Sternberg Reed may not have been received by them at the time of the meeting. The minutes do, however, refer to the father's wishes:
Accommodation was initially agreed by father but he has sought legal advice and is planning on withdrawing the Section 20
I observe that this is clearly not an accurate or fair summary of the position stated by Sternberg Reed, but the reference to legal advice suggests strongly that at least someone attending the meeting was aware of their letters. I note that one person in attendance was from the legal department.
The minutes went on to note that information about the father's church was outstanding, and that the police were still gathering information. There was reference to the bail condition and a report that there were no concerns about the mother's mental health. The decisions and actions noted were as follows:
Bail conditions need to be resolved/changed in order for children to return home as soon as possible
Request an earlier CP [child protection] conference to evidence risk to children will be appropriately managed. A 3 week delay … is unacceptable.
Work with father in order for children to return home.
Each of these was to be actioned by Sue Morris and Mrs McLaughlin.
In a note of the meeting, dated in error 20 July, Ms Toal recorded that the Director
… clearly stated that the children should be returned home as soon as possible.
Mr McCallum explained, as observed earlier, why this did not equate to an intention to return the children immediately. He said it would "wholly unrealistic" to have expected the children to be returned within a few days. He accepted that if there were no consent from the parents, the local authority would have had to react to that. He did not believe there had been any question of consent not being in place and that had that been the case "a whole host of questions" would have had to be asked. He considered that the Sternberg Reed letters were saying that the parental consent continued. At another point in his evidence he suggested that the solicitors were saying that although there was no legal basis for the authority to continue holding the children they "did not want to pull the plug". He conceded that if they were stating simply that the parents wanted the children back, that would have been a different matter.
Mrs McLaughlin also said of this meeting that she could not recall the solicitors' letters and did not recall it being said that Mrs Williams was withdrawing consent. Had that occurred she would have consulted Sue Morris and a head of service and after consideration of whether it was safe and appropriate for the children to go home, if was safe to do so they would have been returned. If necessary they would have taken court proceedings. However she accepted on reading the letters that the practical and legal effect of them was that the children were to be returned, and, later, that she did not know what the basis was for keeping children in foster accommodation.
On 24 July the defendants' senior legal officer wrote in response to Sternberg Reed's letters. This stated that the defendants were in the process of undertaking a "section 47 investigation". It went on
…the outcome of the initial assessment is that the local authority are not minded to take care proceedings and the plan is to return the children home once the investigation is completed and satisfactory responses are received from the initial inquiries of the school, health visitor and any other external agencies who are being asked for information…
Unfortunately the local authority are unable to provide you with a date as to when the children will be returned home as we are instructed that the bail conditions… are that the children should not be left unsupervised with your clients… This therefore has a significant impact on the local authority's plans and abilities to return the children home to your clients.
We therefore trust that your clients will not seek to remove the children from the care of the local authority until clarification can be contained with regards to the police bail conditions.
The letter went on to seek confirmation of what if any charges had been made and stated that
The answers to the above will have an impact on the local authority returning the children to your clients care.
Finally the letter repeated the requirement for cooperation and informed the solicitors that further information would be forthcoming after a strategy meeting to be held that day and that
A written agreement will be presented to you clients for their agreement and for them to sign.
Mrs McLaughlin did not recall seeing or approving this letter. She thought it was possible that she did so, and it would have been approved by a line manager. She agreed that a section 47 investigation could proceed while children were at home, but also that they would have wanted to be satisfied that it was safe to allow their return.
The strategy meeting was attended by Mrs McLaughlin, Ciara Toal and two police officers and others. This was largely taken up, according to Ms Toal's note, with discussions about the allegations of physical abuse and other information from the children made, but it was noted that the police had spoken about the bail conditions.
Mrs McLaughlin had a limited recollection of these letters and records, and it was clear to me that she struggled to reconcile the apparent inconsistencies between the recorded decisions of the panel and the contents of the letter to Sternberg Reed. In particular she found the apparent decision that the children should be returned as soon as possible difficult to understand. According to her the children could not possibly have been returned immediately because in her view this could not have happened before the CPC meeting and the completion of the necessary inquiries. She therefore suggested that the meaning of the instruction was that the children be returned as soon as possible having regard to their safety and the completion of the necessary plans. When asked whether it would not have been appropriate to apply to the court for an interim order she said that would not be appropriate if the parents were saying they would cooperate. To do so would prejudice the relationship with them. It would also have been wrong for the defendants to assist the parents break the bail conditions, which would impact on the children in any event. She said that in her mind at the time the children were still being accommodated by virtue of section 20 and she was also relying on the welfare of the children being paramount. She denied there was any deliberate or considered action by social services or herself in particular to act outside the law.
The parties' submissions
The claimants submitted that the letters of 13 July clearly withdrew any consent previous given, even if there had at that point been a valid consent in force. They could not amount to a validation of a previously invalid agreement. In any event if there was a policy that the children could not go home before the Child Protection Conference, the parents and the solicitors were not told that, and therefore any consent at this point was not fully informed. They argued that an indication they did not want to act precipitously did not amount to consent. It was further submitted that section 20 could not be relied on to achieve a result that could not have been achieved in court. Further the bail conditions did not provide a justification for overriding an objection to section 20 arrangements. The only way that could have been achieved was to obtain a court authorisation.
The defendants submitted that the letters of 13 July did not claim that the original consent was invalid, but confirmed that the consent would continue until the 10 day period had elapsed. It was argued that because the letters did not say the claimants were withdrawing their consent at that time and acknowledging that other things needed to happen, consent was not withdrawn.
Conclusions on the effect of the solicitors' letters and the defendant's response
I reject the defendants' attempt to justify their omission to make a court application on receipt of the Sternberg Reed letters of 13 July. The absence of a contention that any consent originally offered was invalid does not amount to a retrospective ratification. The acknowledgement that the defendants would need time to complete their investigations is no more than an acceptance that if the authority was determined to keep the children there was nothing the claimants could do about it practically in the short term. That does not amount to a consent but to a submission in the face of the power of the State. In my judgment the letters amount to an express withdrawal of any consent that may have been signified at the time of the signing of the "agreement". For the reasons stated above acquiescence does not amount to a on agreement for these purposes and I do not regard the solicitors description of the previous "agreement" as more than a summary of their understanding of events as opposed to a statement of their legal effect.
However I do not accept that either Mrs McLaughlin, or Ms Toal or any other officer of the defendants were aware that in law there was no lawful authority in place to retain the children in foster care. While I find that their understanding of the position was wrong, I accept that they honestly, but mistakenly, believed that there was a section 20 consent in place. I consider their behaviour as evidenced by the contemporary documentation is inconsistent with a belief that they had no legal authority for their actions. The facts were known to the defendant's legal department but the response to the solicitors' letters is inconsistent with any advice having been given that legal authority was absent.
It does not necessarily follow from the absence of a legal authority under section 20 that the only option available to the defendants would have been the return of the children. I have to consider whether they had material on which they could have made an application for an EPO. There is material suggesting that such evidence was not available, in particular the email from Ms Toal of 19 July. While in the absence of evidence at that time the logical position was that the children had to be returned the following day or very soon thereafter, I am satisfied that the overall thinking was that the children needed to be kept in foster care while investigations were completed and the bail position was resolved. The contrary is not consistent with the actions taken thereafter or indeed with an appreciation of the practical reality. Throughout the period considered above investigations were continuing. It is true that reassuring information had been received, for example that there were no reported concerns at the childrens' schools. However, there remained outstanding serious allegations of physical abuse, and the correction of the appalling state of the family home. The underlying causes of that were far from fully explored. Finally, whatever the theoretical possibilities for accommodating the children in compliance with the bail conditions, I accept that the practical reality was that without reliable evidence of satisfactory alternative accommodation, releasing them from foster care arguably gave rise to risks for the children which a court might have wanted to explore. Nonetheless no opportunity was given to a court to consider these matters, and, importantly, to the parents to offer their proposals to an impartial tribunal.
Continued foster care until 11 September 2007
In the light of my conclusion that there was no legal authority for the children to be kept away form their parents from mid-July, I need not consider the events that followed in great detail. There are, however, points in the story as it unfolded which are relevant to the effect of what happened on the claimants.
Requests for assistance with regard to the bail conditions
The defendants declined an invitation from the father's solicitors on 27 July to confirm in writing to the police that the bail conditions were hindering the return of the children. The reason given in their reply of 2 August in my judgment missed the point of this request: the claimants were not asking for the defendants to participate in an application to vary bail, but merely to confirm the effect of the condition.
There was no reason why the defendants could not have provided the claimants or the police with their view of the effect of the bail conditions. Indeed they were willing to the provide information to the police on 17 August in response to an inquiry from the police requesting information to assist them in making a decision about the bail conditions. However in a number of respects the information provided was, I am satisfied, substantially incorrect or was not an adequate basis for concern. Sue Morris is recorded as having told them that
a. The claimants had been missing appointments with social workers. The only evidence offered to justify this was in relation to an appointment Mr Williams had missed through a misunderstanding. Ms Toal was unable to offer any detail of what might have lain behind this concern.
b. The claimants had not been engaging sufficiently for the completion of the core assessment. There is no evidence that the claimants were not cooperating fully with the defendants and providing information as they were requested for it. As late as 7 August Ms Toal was noting that updating of the assessment had not started and she had not spoken to the parents about this.
c. The claimants had been inappropriately taking photographs of their children. Yet the only photographs taken by them were intended to be a record of various injuries visible. No secret was made by them of this activity, and it is difficult to understand why this was in itself considered to be a matter of concern.
d. The children's aunt had been contacting the children and advising them to disrupt their placements. If this occurred, there was no evidence that this had been instigated or encouraged by the parents. The parents observed with some force that as they did not know whether the children were being accommodated the aunt could not have known either. Ms Toal could not recall anything of substance on this point.
e. There had possibly been some unauthorised contact by the parents. It was not clear to what, if any, specific occasions this referred. The parents' evidence was that there was no contact outside supervised meetings, apart, perhaps from accidental sightings in the road.
f. There were concerns about Mrs Williams's mental health. There was some basis for this observation, but it is open to doubt whether it was a concern which was likely to justify the police maintaining the bail condition.
Some of these concerns were repeated in a letter from the defendants' legal department to Sternberg Reed on 28 August, but repetition does not in itself provide any satisfactory evidence that there was a reality behind them.
On 22 August solicitors acting for the mother in the criminal proceedings wrote to the defendants to say they had been informed by the police that the bail condition was still in force because of the concern raised in relation to missed appointments. The letter asked the defendants to contact them as a matter of urgency to confirm their position on this. If the parents were confirmed to be engaging with social services they intended to make representations to the police that the bail condition should be varied. There does not seem to have been a direct response to that letter, but on 6 September Sue Morris is recorded as having
arranged with the police for the bail conditions to be varied with a view to the children being returned on Tuesday.
It is likely that the police were willing to receive information from the defendants to help them form a judgment with regard to relaxing the bail condition. That the defendants did not take this step before 6 September is certainly not due to a lack of a request on behalf of the claimants. In my judgment it is probable that the apparent reluctance to do so was caused by a collective concern that there were still issues to be considered in order to be satisfied that the potential risks for the children had been addressed. Unfortunately the coherent communication of what those concerns were was hindered by a failure to ensure that sufficient detail was conveyed with the overall description of the concern. The result was that the police did not, until 8 September, receive a clear and accurate account of the progress of the defendants' investigations. As the police had their own independent concerns which in the end led to multiple charges of neglect and assault, it is not possible to say what effect an earlier positive report from the defendants would have had on bail. It is clear, however, that the claimants at least lost the opportunity to support an argument in favour of a relaxation of the condition at an earlier stage.
The experiences of the children in foster care
While this is not a claim brought on behalf of the children, the perception of their experiences in foster care is potentially relevant to an assessment of the interference with the parents' family life. Any non-consensual separation of children from their parents is bound to be distressing for all concerned, but in this case there were some particular features which went beyond what is implied in that generalisation:
a. On 1 August one of the children fractured an arm while in foster care. There was some delay in this being reported both to the defendants and the claimants.
b. On 6 August another child was burnt by hot water while taking a shower.
c. Concerns were raised by the parents that one of their children has been the subject of sexual abuse while in foster care owing to the child complaining of pain in the genital area, although this was not confirmed on medical examination
d. Most of the children were moved to different foster carers several times, in two cases at least five times, while in accommodation provided by the defendants.
Causes of action arising out of the facts
Negligence/breach of duty
At my request Ms Cooper for the claimants produced more detailed particulars of negligence than had been included in the particulars of claim. They can be summarised as falling into the following categories:
a. Failing to make prompt arrangements to return the children to their parents.
b. Failing to give accurate information to the police of their plans to do so or its lack of evidence for maintaining the separation or requesting them to reconsider the bail condition.
c. Failing to explore the options for returning some or all of the children in spite of the bail condition.
In X v Liverpool City Council [see above] the observations of the Court on the factors to be taken into account on such a claim are in my judgment helpful and relevant in the present case, even if the subject-matter was not precisely the same, and the proceedings were public law proceedings not, as here, a private law claim:
a. Latitude had to be accorded to local authority officials in making judgments on the urgency of the need to protect children in any particular case because
An authority such as the council in the present case is better equipped than a court to judge how urgent a situation is and whether in all the circumstances removal of the child is necessary
b. However:
… the court should never lose sight of the fact that the removal of children from those who have custody of them is an extreme form of interference with family life and calls for compelling justification. [paragraph 60]
The stresses and strains under which local authorities and their social workers are placed in undertaking the protection of children were eloquently expressed by MacFarlane J in Re X: Emergency Protection Orders [2006] EWHC 510 (Fam) [paragraph 19]:
The child protection system depends upon the skill, insight and sheer hard work of front line social workers. Underlying those key features, there is a need for social workers to feel supported and valued by the courts, the state and the general populace to a far greater degree than is normally the case. Working in overstretched teams with limited resources, social workers frequently have to make crucial decisions, with important implications, on issues of child protection; often of necessity these decisions must be based upon the available information which may be inchoate or partial. There are often risks to a child flowing from every available option (risk of harm if the child stays at home, risk of emotional harm at least if the child is removed). It is said that in these situations, social workers are 'damned if they do, and damned if they don't' take action. Despite these difficulties, it is my experience that very frequently social workers 'get it right' and take the right action, for the right reasons, based upon a professional and wise evaluation of the available information. Such cases sadly do not hit the headlines, or
warrant lengthy scrutiny in a High Court judgment. I say 'sadly' because there is a need for successful social work, of which there are many daily examples, to be applauded and made known to the public at large.
I consider that an elegantly expressed reminder that I must be cautious before finding proved criticisms of the sort made against Hackney and must bring to bear an appreciation of the challenging circumstances in which many decisions concerned with the protection of children have to be made. It also raises factors relevant to the consideration of whether a cause of action is permissible in a case like this one.
In A v East Sussex County Council, Chief Constable of Sussex Police [2010] EWCA Civ 743 the Court of Appeal applied the principles set out in X v Liverpool City Council in upholding the dismissal of an Article 8 claim by a mother whose baby had been removed from hospital under section following concerns about possible factitious illness, but it was later concluded that there was in fact no cause for concern. In doing so the court expressed some cautionary observations about this class of case which I must keep in mind:
a. Local authorities are required to protect children from the risk of harm, and cannot wait until that risk has been conclusively proved or disproved. Hedley J, with the agreement of Jackson and Carnwath LJJ said [paragraph 6]:
….. child protection is just that. It is protection from the consequences of perceived risk. There will be cases, as here, whether either risk was incorrectly perceived or did not eventuate. That of itself does not mean that protective measures were wrongly taken. It merely illustrates the price that sometimes has to be paid for having a child protection system and it is unfortunate that it was exacted from this appellant and her son
b. However the powers involved must be exercised lawfully and proportionately:
Nevertheless, because child protection powers can have draconian consequences, it is essential that they are exercised lawfully and proportionately.
c. Hedley LJ went on to observe [paragraph 9] that in deciding whether to seek parental agreement under Part III of the Act, or to apply for an EPO, or to leave the matter to the police under section 46 it was
incumbent on the local authority where practicable to act in partnership with a parent and to devise a process (whether by supervision, retention in hospital or removal) which commands at least the acquiescence of the parent. That accords with both the spirit of the Act and with Convention requirements of Proportionality.
The defendants maintained from the outset that there was in law no duty of care owed to the parents, as opposed to the children on the authority of JD v East Berkshire County Council [2005] UKHL 23; [2005] 2 AC 373. That authority established that in relation to the diagnosis of sexual abuse against children no duty of care was owed to parents as to impose such a duty on social workers and doctors would give rise to a conflict with the duty owed to the child. It was submitted that there was no valid distinction between that case and this.
For the claimants it was submitted that JD could be distinguished because the claim here is limited to the time after the children were taken into care and after a decision had been made that there was insufficient evidence to keep them there and their action in retaining the children was outside the scope of their statutory authority. Relying on the speeches of Lord Browne-Wilkinson in X (Minors) v Bedfordshire County Council, and Lord Slynn in Barrett v Enfield London Borough Council, it was contended that where the decisions taken were so unreasonable as to fall outside the scope of the ambit of discretion conferred on the local authority, or if the authority acted in abuse or excess of its power, it could not be supposed that there was an immunity. This, it was argued, was a case of operational failings not of policy.
JD concerned an application to strike out cases as showing no arguable cause of action on the pleadings. It was alleged, and had to be taken as true for the purposes of the decision, that in breach of acceptable professional standards, an erroneous diagnosis of abuse had been made. The majority held that a common law duty of care owed to the parents would be in conflict with the performance of a duty to the children who required protection. Lord Nicholl put it this way [paragraph 78]:
The existence of such a duty would fundamentally alter the balance in this area of the law. It would mean that if a parent suspected that a babysitter or a teacher at a nursery or school might have been responsible for abusing her child, and the parent took the child to a general practitioner or consultant, the doctor would owe a duty of care to the suspect. The law of negligence has of course developed much in recent years, reflecting the higher standards increasingly expected in many areas of life. But there seems no warrant for such a fundamental shift in the long established balance in this area of the law.
Although the facts of the cases arose before the enactment of the Human Rights Act 1999 and the importation of Article 8 rights into domestic law, their Lordships did consider the impact of the ECHR right to respect for family life and concluded that it did not alter the substance of the result at common law. Lord Nicholls said [paragraph 85]:
Ultimately the factor which persuades me that, at common law, interference with family life does not justify according a suspected parent a higher level of protection than other suspected perpetrators is the factor conveniently labelled "conflict of interest". A doctor is obliged to act in the best interests of his patient. In these cases the child is his patient. The doctor is charged with the protection of the child, not with the protection of the parent. The best interests of a child and his parent normally march hand-in-hand. But when considering whether something does not feel "quite right", a doctor must be able to act single-mindedly in the interests of the child. He ought not to have at the back of his mind an awareness that if his doubts about intentional injury or sexual abuse prove unfounded he may be exposed to claims by a distressed parent.
Lords Steyn, and Brown gave speeches to a similar effect [see paragraphs 110, 129]
That was the general principle expressed, but their Lordships accepted there could be exceptions, albeit limited ones. Lord Nicholl, at paragraph 91, said:
This should be the general rule, where the relationship between doctor and parent is confined to the fact that the parent is father or mother of the doctor's patient. There may, exceptionally, be circumstances where this is not so. Different considerations may apply then. But there is nothing of this sort in any of these three cases. The fact that a parent took the unexceptional step of initiating recourse to medical advice is not a special circumstance for this purpose. Nor is the fact that the parent took the child to a general practitioner or to a hospital to see a consultant
There is a suggestion in the earlier case of S v Gloucestershire County Council [2001] Fam 313, 338-339 by May LJ that the principles enunciated in X )(Minors) v Bedfordshire county Council [1995] 2 AC 633 did not apply across all cases which could be labelled as "child abuse" cases. He observed:
it may be seen that a decision whether or not to take a child said to have been abused away from its natural parents and into care may often be acutely difficult. But many of the decisions about care and upbringing of a child once he or she has been taken into care, difficult though they may be, may not have the acute complications, strains and conflicts identified in the Bedfordshire cases.
The evidence offered in this case has been considered already. I have found that at material times the defendants were indeed acting outside the statutory authority granted to it by Parliament to interfere with the family life of Mr and Mrs Williams. However they were doing so in the mistaken belief that they had sufficient consent from the parents to authorise their actions under section 20 of the Children Act 1989. They were taking decisions and implementing actions solely for the purpose of protecting children against risks which, on the basis of the information they had, they reasonably believed required protective steps to be taken. It was not disputed that some action was justified as a result of what was found on 6 July. There was at all times a potential for conflict of interest between the children and their need for protection and the parents who were suspected of neglect and abuse. The fact that they were subsequently exonerated of the criminal allegations does not mean there was not a basis for a belief that protective action was required. Therefore I find some difficulty in the distinctions Ms Cooper has sought to persuade me exist between this case and one concerning the actual diagnosis of abuse. Diagnosis and assessment of risk to children is not a one off event, but a continuous process in which the significance of information and the balance of risks has constantly to be reviewed. As the, at times somewhat painful, dissection of decisions and processes in this case has shown, disentangling the rights and wrongs of individual decisions can be complex. It would in my judgment raise the danger of inhibiting authorities from taking steps to safeguard children in difficult cases were they to be open to a minute examination of their every action in a case like this. In short, if there are exceptional cases where there is no conflict justifying an exclusion of cause of action in favour of a parent, this is not one of them. This is not to apply a blanket policy, but to do my best to apply the principles of the common law as determined by the higher courts to the facts of this case.
There is a further reason why in my judgment a claim in negligence cannot be pursued in this case. Even if there is a duty of care, and a breach of that duty, the claimants have to show actionable damage caused by the breach. The claimants accept that they have neither pleaded nor suffered any psychiatric or other personal injury and that damages cannot be recovered for psychological trauma or distress falling short of that. If I understand Ms Cooper's submissions correctly, her case is that there is pure economic loss for which the defendants are liable. The loss is said to be a loss of a chance of Mr Williams making a profit from the introduction of a developer of a hotel complex in Nigeria to a lender, and that work to this end was prevented by the traumatic events surrounding the removal of the children. An agreement dated 28 May 2007 is produced between two companies, signed by Mr Williams in the capacity of CEO and chairman of one of them. Apart from that the only evidence is that in Mr Williams's statement that he received a sum of £10,671 in expenses for the work done on the contract. Mr Williams claims they lost the chance of gaining US$263,000 as a result. I observe that such a huge profit is completely at odds with the impoverished circumstances in which the Williams family were living. There is no evidence of a previous pattern of income which remotely equates to this expectation. In my judgment this is little more than wishful thinking. Leaving aside the inherent improbability of this claim and the completely speculative basis on which it is submitted that I should award 25% of this sum for loss of chance I consider that any such loss was not sufficiently proximate to the alleged breach of a duty of care. Put another way I reject the contention that a loss of this nature was the reasonably foreseeable consequence of a local authority seeking, albeit imperfectly, to exercise its statutory responsibilities to safeguard children.
For these reasons I conclude that as a matter of law the claimants have not shown that on the facts proved there is a cause of action in negligence, or a loss which would be recoverable in negligence.
Religious discrimination
I can deal with this allegation shortly. The defendants rightly complain that the pleaded claim contains no substantial particularisation of it. The claimants' evidence did little more. The case amounts to this. In paragraph 36 of the reply the claimants allege that they were treated more harshly by Mrs McLaughlin than would a person who was not of their religion. The sole basis for this allegation is that on 6 September she asked Mr Williams over the telephone for details about his church, its publicity and details of the contract for the church hall. This is said to amount to an implied threat that if the information were not provided it would further delay the return of the children. I accept Mrs McLaughlin's explanation for these questions. Details of Mr Williams's church, of which he was a pastor, were needed in order to enable the authority to fulfil its duty to report information about the case to the designated safeguarding officer for investigation. Pastors are in a position of trust and where allegations of abuse are raised this process is required. With considerable passion Mrs McLaughlin convincingly explained to me that she was not a person who would discriminate against any one on the ground of religion. This allegation is without foundation and I dismiss it.
Misfeasance
The particulars of claim allege that Ms Toal knew as evidenced by her memo of 19 July that a decision had been made to return the children and that her continued involvement in the case thereafter in the knowledge that the separation of the children from their parents was not authorised was misfeasance. A further allegation is effectively that any officer with that knowledge was guilty of misfeasance. No other officer was named in the particulars, but in the reply Mrs McLaughlin was alleged to have had the relevant knowledge that
a. The claimants retained the right to take their children home at any time
b. There were no grounds for obtaining a court order to authorise retention of the children
It is further alleged that Ms Toal and Mrs McLaughlin deliberately acted to refuse to permit the claimants to take their children home in the knowledge that they were acting beyond their powers or with reckless indifference to whether or not they had such power, and knowing that to do so would cause harm loss and damage to the claimants.
The case was put on the basis of the second form of misfeasance identified in Three Rivers District Council v Bank of England (No 3) [200] 3 All ER 1 in which the ingredients of the cause of action are
a. an act done by a public officer
b. knowing or recklessly indifferent to the fact that:
i. he had no power to do the act complained of
ii. the act would probably injure the claimant
I have set out in detail my findings of fact with regard to the actions of both Ms Toal and Mrs McLaughlin. Dealing first with the issue of authority to place and keep the children in foster care, while I have found the defendants did indeed not have the valid consent of the parents to the accommodation of the children in foster care, or any valid legal authority to retain them in such care after the expiry of the police protection order, I am satisfied that these officers honestly believed they had such authority for the reasons I have explained above. They were not in my judgment recklessly indifferent either to the need for legal authority for their actions or the possibility of harm to the claimants. As to the first, the defendants legal department were involved at many of the critical stages of the management of this case, and there is no evidence that they were other than supportive of the actions being taken by these officers and their colleagues. It is evident to me that throughout the process the officers were genuinely attempting to bring about the reunification of the family, even if this was not at a pace which satisfied the parents. Both of them may have been mistaken in their belief that there had been a valid consent or that any such consent had not been withdrawn, but this was based on their judgment of the factual situation and their honest conclusions. There was in my judgment no deliberate action to delay the end of a known unauthorised or unlawful separation.
It was suggested in closing submissions that there was a further act of misfeasance in refusing to allow the parents to accompany their child, whom they feared had been sexually abused to a medical examination on 29 August. No such act was complained of as misfeasance in either the particulars of claim, reply or the opening written skeleton argument. Not surprisingly therefore it was not perhaps the focus of as much attention during the hearing as it might otherwise have been. The nearest to a contemporaneous account I have seen was in an email dared 30 August 2007 by Mrs McLaughlin. After the concern of abuse as raised by the parents the plan was that the children be taken to a general practitioner, she decided that in the interests of the child the parents should not go because of the way they behaved in taking photographs. The GP declined to undertake the examination because the children were on the Child Protection Register. Arrangements were subsequently made for an examination by a paediatrician and the parents accompanied their daughter to that appointment. Mrs McLaughlin was concerned at the parents' behaviour in insisting that their daughter had been "violated" and in demanding an internal examination, which the paediatrician considered to be unwarranted. Mrs McLaughlin could remember little of this episode, but Mrs Toal agreed that she had a view that the parents should have been part of the process but that she could not override her manager's decision. Mrs Williams gave evidence on this episode. In the course of telling me her recollection she became very distressed and a pause was required while she recovered some form of composure. I have no doubt that she was exhibiting genuine distress, and would have been very distressed at the time. Given the parents' reaction to their suspicions, as described by Mrs McLaughlin, I consider there was potential reason to be concerned at the impact on the child of their presence at an essential medical examination. Where the welfare of a child is at risk it cannot be that the parent has an absolute right to be present. While the judgment of Mrs McLaughlin may be open to question on this issue I am satisfied neither she nor Ms Toal deliberately or recklessly contravened the parents' rights. In any event any failure to recognise their rights to be present at an examination were not in practice contravened, as in the result the GP conducted no examination. Therefore no case of misfeasance is proved in respect of this incident.
I accordingly I reject the claim in misfeasance.
Liability under the Human Rights Act
Section 7 of the Human Rights Act 1998 provides that a victim of an act of a public authority made unlawful by section 6 may bring an action against the authority. Section 6 makes it unlawful for a public authority to act in a manner which is incompatible with the specified Convention Rights. In this case the right engaged is that in Article 8 which reads [Schedule 1 paragraph 1 of the Act]:
1. Everyone has the right to respect for his private and family life, his home and his correspondence.
2. There shall be no interference by a public authority with the exercise of this right except such as is in accordance with the law and is necessary in a democratic society in the interests of national security, public safety or the economic well-being of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights and freedoms of other.
It is not disputed that the rights set out in Article 8 are engaged on the facts of this case and therefore it is unnecessary to burden this judgment with extensive citation of authority. Clearly the separation of children from their parents is an interference with the parents' family life and therefore to be lawful such an action must be justified by reference to the qualification of the right set out in article 8(2). The first such qualification is that the interference must be in accordance with the law. For the reasons I have already set out the consent necessary in law for a separation by virtue of section 20 of the Children Act 1989 was not obtained. Alternatively even if agreement to the separation was validly obtained out the outset, that agreement was withdrawn by the solicitors' letters of 13 July. It follows that, while the initial removal of the children from their home was lawful and indeed a proportionate and necessary response to the need to safeguard them from harm, the actions of the defendants in retaining the children away from their parents after the expiry of the 72 hour period were unlawful, and therefore the interference with the parents' Article 8 rights was also unlawful. The interference only came to an end when the children were returned on 11 September. This remains the case even if, hypothetically, the separation might have been rendered compliant with the State's Article 8 obligations by seeking the authority of the court for it.
The defendant contends that the human rights claim, is time barred by virtue of section 7(5) which provides that
Proceedings under subsection (1)(a) must be brought before the end of—
(a) the period of one year beginning with the date on which the act complained of took place; or
(b) such longer period as the court or tribunal considers equitable having regard to all the circumstances
It is clear from the authorities that the court is accorded a broad discretion with regard to the period within which it can consider it equitable to allow a claimant to bring a claim, and that the exercise is not on all fours with an extension of time limits under the Limitation Act 1980. Lord Dyson JSC set out the principles succinctly in Rabone v Pennine NHS Trust [2012] UKSC 1, [2012] 2 AC72, 100 paragraph 75:
The court has a wide discretion in determining whether it is equitable to extend time in the particular circumstances of the case. It will often be appropriate to take into account factors of the type listed in section 33(3) of the Limitation Act 1980 as being relevant when deciding whether to extend time for a domestic law action in respect of personal injury or death. These may include the length of and reasons for the delay in issuing the proceedings; the extent to which, having regard to the delay, the evidence in the case is or is likely to be less cogent than it would have been if the proceedings had been issued within the one-year period; and the conduct of the public authority after the right of claim arose, including the extent (if any) to which it responded to requests reasonably made by the claimant for information for the purpose of ascertaining facts which are or might be relevant. However, I agree with what the Court of Appeal said in Dunn v Parole Board [2009] 1 WLR 728 , paras 31, 43 and 48 that the words of section 7(5)(b) of the HRA mean what they say and the court should not attempt to rewrite them. There can be no question of interpreting section 7(5)(b) as if it contained the language of section 33(3) of the Limitation Act 1980.
This claim was started on 1 July 2013, nearly 6 years after the actions complained of. The defendants contend that the passage of time is such that it would be inequitable to allow it to proceed. They say that they are hampered in their defence by the lack of availability of evidence and they point to the absence of much material in the files of Sternberg Reed, or the criminal solicitors. They contend further that the time taken for a complaint to be processed with the Local Government Ombudsman is immaterial as that complaint was never going to resolve the issues in this case. There had been independent findings in 2009 and these proceedings were launched four years after that.
In my judgment the length of time taken to bring these proceedings, though considerable, does not make it inequitable to allow the claim to proceed. The final decision of the Local Government Ombudsman was issued on 22 April 2013, less than three months before these proceedings were started. I note that the proceedings before the Ombudsman were protracted, including a judicial review application [which resulted in the Ombudsman re-opening the investigation] and a review of a provisional report. While a significant amount of the time taken in this process seems to have been about the handling of the claimants' complaints, rather than their initial treatment, I consider it reasonable for them to have awaited the final outcome of the process before issuing these proceedings. The latter stages involved interviewing both Ms Toal and Mrs McLaughlin, which had not been undertaken before. One of the complaints considered was the alleged failure to return the children when the parents "withdrew their consent" – referred to as "complaint 3" in the Ombudsman's report. The Ombudsman's conclusion was that the defendants had been at fault in failing to record the claimants' consent and in failing to explain the process to them. While this outcome did not entirely satisfy the claimants, there was a sufficient overlap with the subject-matter of this claim for it to have been justifiable to await the Ombudsman's final decision. Furthermore the continuation of the complaints process meant that the defendants had a continuous reason to maintain their records and indeed recollections of this case.
With regard to the effect of the passage of time on the cogency of the evidence, I have already commented on this. In my judgment the recollection of all witnesses has to some extent been hampered by this, but in my judgment there has been sufficient documentary material enable them to refresh their memories on the most significant issues. In any event I doubt whether memories for some of the details lost would have been any better within a year of the events in question. I have paid regard to the difficulties of memory to ensure in assessing the evidence, and in particular the evidence of the defendants' witnesses. In assessing the defendants' compliance with such a fundamental requirement as obtaining the fully informed consent of the parents for the very serious step of placing all their children in foster care it is to be expected by public authority that it will take care to retain such documentation as sufficiently records the steps taken in that regard. It has very largely been possible to assess the merits of the claim in this respect by reference to the defendants' documentation which has proved to be demonstrably inadequate, but not missing.
Finally I consider the evidence relating to a breach of the claimants' rights sufficiently cogent to justify the claim being brought, albeit out of time. Their entitlement to a remedy outweighs such prejudice as may exist.
For these reasons I have concluded that it is equitable to allow the claim to proceed in all the circumstances of the case. I have borne in mind that it is clearly desirable that such claims be brought as soon as possible after the events in question and that public authorities should not be kept under threat of such proceedings indefinitely. However here for the reasons described the defendants were inevitably going to be concerned with this case until the conclusion of the Ombudsman's process.
Remedy
The claimants seek financial redress and submit that I should award £15.000 to each on the basis that a declaration that their rights have been unlawfully interfered with would be an insufficient remedy. I was referred to Re H (A Child: Breach of Convention Rights: Damages) [2014] EWHC 3563, TP and KM [2001] 1 FLR 549; PC and S v United Kingdom [2002] 2 FLR 631, Venema v Netherlands [2003] 1 FCR 153 as indicating that the range of damages for cases of this nature lay between £10,000 to £15,000. Perhaps the most pertinent case is AD vi United Kingdom [2010] ECHR 28680/06, which was the ECHR claim resulting from the JD case [above]. There the interference with the parents' Article 8 rights through unjustified separation from their child. While it accepted that the decision to investigate injuries was justifiable, they held there was an unlawful interference the result of which included an enforced stay in an assessment centre of 12 weeks and a six week separation later. An award of E15,000 was made to the parents jointly.
Rabone v Pennine NHS Foundation Trust concerned a claim by parents under Article 2 of the ECHR arising out of the failure of a hospital trust to prevent the death of their daughter by suicide. The Court of Appeal [2010] EWCA Civ 6698, [2011] QB 1019, while rejecting their claim opined obiter that an award of £5,000 for each of the parents would have been appropriate. While the parents succeeded on their appeal to the Supreme Court [above]on liability they did not appeal on the issue of quantum, but the defendant did. Dyson PSC considered the ECHR authorities on redress and noted that the range of awards in such cases was between E 5000 and E60,000, He described this range as "considerable" but "relatively modest". [paragraph 85] he went on:
This is not surprising, because Strasbourg does not award a fixed conventional figure for this head of loss. One would expect the court to have regard to the closeness of the family link between the victim and the deceased, the nature of the breach and the seriousness of the non-pecuniary damage that the victim has suffered. Factors which will tend to place the amount of the award towards the upper end of the range are the existence of a particularly close family tie between the victim and the deceased; the fact that the breach is especially egregious; and the fact that the circumstances of the death and the authority's response to it have been particularly distressing to the victims. Conversely, factors which will tend to place the award towards the lower end of the range are the weakness of the family ties, the fact that the breach is towards the lower end of the scale of gravity and the fact that the circumstances of the death have not caused the utmost distress to the victims.
Noting that the family ties were strong, that the parents had expressed their anxiety to the authorities and that the very risk which they feared and warned the authorities against occurred, making the occurrence of their daughter's death all the more distressing, he considered that made it a "bad case". He thought that there was real force in the argument that the £5,000 preferred by the Court of Appeal was too low but as there was no appeal against this by the claimant, that assessment would have to stand: see paragraphs 87, 88.
.
I consider that comparable factors are relevant in an Article 8 case generally, and the present case in particular. This was undoubtedly a close family presided over by loving parents. They were extremely distressed by the continued separation from their children and constantly voiced their anxieties in that regard to the defendants. They witnessed the adverse effects of foster care on more than one of their children, one of whom was a baby who was being breast fed. On the other hand, I must bear in mind that the initial separation was justified, and that an investigation of the type which occurred would have taken place in any event. This is not a case of permanent loss or bereavement, and the children were returned in the end.
Clearly the claimants have not received adequate redress to date. While certain of their complaints were upheld by the complaints process and the Ombudsman, they have received no acknowledgement let alone compensation for the unlawful deprivation of the care of their children for a number of months. Reminding myself that awards of this type should be fairly modest, I consider that the appropriate sum to award to each parent is £10,000 each. It was contended by Ms Cooper that I should award aggravated or exemplary damages, but if I understood her submissions correctly this related to the misfeasance claim which I have rejected. In any event I do not consider that such an award would be appropriate.
Conclusion
For the reasons given judgment will be entered for the claimants in the sum of £10,000 each. I will hear submissions on any further and consequential orders that are said to arise out of this judgment.
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Ex Tempore Judgment
Mrs Justice Whipple :
INTRODUCTION
I have before me a claim brought by American Express Services Europe Ltd (the Claimant) against Talib Jafar K Al-Shabrakah (the Defendant).
The Claimant contends that the Defendant owes it substantial amounts in unpaid American Express bills together with interest.
The Defendant disputes the debt on a number of bases which I will shortly come to. But first I must address a number of preliminary issues.
PRELIMINARY ISSUES
Application to vacate trial
By application notice dated 15 October 2015, the Defendant applied to vacate the trial date. That application was made just one working day before the trial window which commenced on 19 October 2015. That application was heard by Blake J on Friday 16 October 2015, and not surprisingly, he adjourned the application to the trial judge. The application was renewed before me at the outset of the trial, and I refused the application and said I would give reasons later. These are my reasons.
The Defendant's application notice was supported by the witness statement of David Rosen, solicitor for the Defendant, dated 15 October 2015, and his exhibited materials.
The Claimant resisted the application and has filed a witness statement dated 16 October 2015, together with exhibited materials.
The power to vacate is within CPR 3.1, and must be exercised consistently with the overriding objective. If I refused this application to vacate, the trial would go ahead without the Defendant being present in person (although he was represented by Mr Rosen). That would engage CPR 39.3, which would enable me to continue the trial in the absence of a party; give me power to strike out his defence or counterclaim; and enable the Defendant to make an application to set aside any judgment I may give against him. The provisions of Practice Direction 39A, para 2 are relevant also.
The main basis for seeking to vacate was that the Defendant was said to be unfit to attend trial or give directions to his representative. In support of this, Mr Rosen's witness statement exhibited a medical report dated 2 October 2015 from Dr Hamed Abdel-Wahab, Professor of Cardiology at the "Heart Care Clinic" (no further details were given, and I do not know what this clinic is or where it is). That doctor indicated that the Claimant had heart problems and had been recommended complete bed rest for three months "from today" (ie from 2 October 2015, the date of the report). There was an inconsistency in this report, because the advice to rest flowed from the date of the report, although the condition for which rest was recommended was said to have been identified some months ago.
On the first day of trial, 20 October 2015, Mr Rosen provided me with a fuller medical report from a different doctor, Doctor Ahmed El-Neklawi, a consultant physician, dated 18 October 2015. There is no address for Doctor El-Neklawi and it is unclear where he works. Dr El-Neklawi says that the Defendant was diagnosed with ischaemic cardiomyopathy back in 2014, alongside a number of other heart problems. The Defendant had been advised to travel to the US for possible correcting procedures but had not done so. On medical examination (it is not stated when that examination took place) certain signs of congestive heart failure were identified. The recommendation was for complete bed rest, and that corrective procedures (it is not stated what those procedures might be) abroad should be sought as soon as possible; yet it was said that the patient was unfit to travel (I question therefore how he was to get abroad for the proposed procedures). That doctor said that the Defendant was too weak to be able to give instructions or make decisions, that he should be medically evaluated after 3 months, and concluded that the Defendant was unfit to attend Court.
My main reason for refusing the application to vacate is that it is made far too late, without good reason for the lateness. It is quite clear that the Defendant's health problems, such as they may be – and I make no finding about them - have been ongoing for some considerable time. The latest medical report suggests that they were diagnosed in 2014. Notice of the trial date was given on 5 February 2015, for a 5 day trial to commence during a trial window which ran from 19 October 2015. There was no suggestion that the Defendant was too unwell to attend trial until the back end of last week. If the Defendant had health problems which might have interfered with his ability to attend trial, the Court (and the Claimant) should have been made aware of them much earlier.
To grant this application would mean that Court time would be wasted. It would mean that the Claimant's time would be wasted - the Claimant is here, represented by Counsel and solicitors. The Claimant's witness is here, and his time too would be wasted. Costs would be thrown away. It would mean that there would be a further delay in the matter being heard, bearing in mind that the claim relates to transactions which took place in 2012, already almost 3 years ago.
These reasons are sufficient to dispose of the Defendant's application. But there are other points to make, which lend support to my conclusion that the application must be refused.
First, the Defendant suggests that negotiations have been ongoing between the parties and that is why the application was not made until so late in the day. The fact that there may have been negotiations is plainly an inadequate excuse for the late application.
Secondly, the effect of refusing this application will be that the trial proceeds in the absence of the Defendant. But the Defendant has failed to take any part in the preparation for this trial over many months now. Most notably, the Defendant has yet to serve a witness statement. There were a number of directions for service of witness statements. The last order required service of the Defendant's witness statement by 8 May 2015: that was 5 months ago; yet no witness statement has been lodged, and no application has been made to extend time for service of such a statement. Without a witness statement served in compliance with Court rules, the ordinary rule would be that the Defendant would not have been in a position to offer this Court any oral evidence anyway, at least not without permission of the trial judge.
I infer from the Defendant's failure to file a witness statement, for which no proper explanation has been given, that he did not intend to take an active personal part in this trial anyway. His conduct in relation to this litigation has been unimpressive for many months now.
Mr Rosen says that the Defendant's absence will put Mr Rosen in difficulty in obtaining instructions. But Mr Rosen remains on the record. It is not for me to enquire as to the source and adequacy of Mr Rosen's instructions, but he is plainly satisfied that he is able to be here and to present the Defendant's case; and that he has instructions to do so. I accept that Mr Rosen may have been in difficulty in taking instructions on detailed points arising during the course of the trial, but the issues in this trial are familiar from the pleadings filed years ago, and Mr Rosen has plainly had the opportunity to take instructions on them in the past. Any difficulty he may now face is an insufficient reason to vacate the trial.
Finally, and in any event, there is no clarity at all about what length of time might be needed before this trial could resume. If the medical evidence is to be believed (and I express no view on that either way), then the Defendant is not going to get better in the near future, or be able to attend trial if it is re-fixed. It is not clear what purpose an adjournment would serve, other than to delay this trial further and create uncertainty for both parties.
For those reasons, I dismiss the application to vacate the trial.
Defendant's Application re hearsay evidence
The second preliminary matter relates to two notices dated 6 October 2015 in which the Claimant gave notice that it intended to rely on the witness statements of Mr Al Hamoud (who is elsewhere referred to as Abdul Sammad) and Mr Al-Tayyar, as hearsay. Both individuals have provided witness statements to the Court. Both of them are resident (and physically present) in Saudi Arabia. I have no power to compel them to attend this trial, in person or by video-link. I will refer to them as the Saudi witnesses.
The Defendant opposed the application to rely on their evidence in written form, and in the alternative sought an order that he should be entitled to cross examine those witnesses pursuant to CPR 33.4.
The rules permit the Claimant to serve the Notices as it has done. Section 2 of the Civil Evidence Act 1995 applies, and the notices comply with the requirements of CPR 33.2, giving the reason for not calling the witnesses that they were not willing to attend trial despite every reasonable effort having been made to get them here. There is no basis for the Defendant to oppose the CEA notices. The Claimant is entitled to serve them, as Mr Rosen frankly accepted. The issue is one of the weight to be attached to these statements given that the Defendant has had no opportunity to challenge the statements by way of cross examination.
In the alternative, Mr Rosen asked for permission to cross examine the Saudi witnesses, relying on CPR 33.4. In my judgment, that application was misconceived. CPR 33.4 enables another party to call a particular witness to be cross examined if a Civil Evidence Act notice has been given that the particular witness is not to be called. But in circumstances where the Claimant, as here, wanted to but could not get the witnesses to Court, because they were unwilling to attend, there is no point making an order under CPR 33.4, because the witness will not be coming to Court, regardless of which party wishes them to be there.
I therefore refused the Defendant's second application relating to the hearsay evidence.
I record here that there remained some possibility that the two Saudi witnesses might have attended the trial by video link from Riyadh, notwithstanding the various indications of unwillingness, and the Claimant continued to try to make that happen. The Claimant's representatives communicated with the Saudi witnesses and set a time for them to appear by video link from a location in Saudi Arabia. In the event, neither witness attended that location. That meant that the Civil Evidence Act notices became operative and the two statements were admitted as hearsay. I will come back to them later.
Defendant's application to rely on affidavit evidence
As mentioned, the Defendant has not submitted a witness statement. Mr Rosen sought to rely on an affidavit filed by the Defendant in response to an earlier application by the Claimant for a freezing order in connection with this claim. That affidavit was dated 28 June 2013, sworn and signed by the Defendant.
The Claimant resisted only on the basis that the affidavit should not be treated as a substitute for a witness statement, which it was plainly not.
That was in my judgment the correct approach. I gave Mr Rosen permission to refer to the affidavit, both in cross examination of Mr Shingles, the Claimant's lead witness, and in submissions on behalf of the Defendant. That affidavit is part of the evidence in this case. How much weight it should carry is a matter for me, as I made clear to Mr Rosen.
THE CLAIM
I turn now to the substantive issues in the case.
The Defendant had two Amex accounts at the material time, the Gold Account and the Centurion Account. He had three cards on the Centurion Account, two of which are relevant to this claim (the third was held by his wife and has no relevance to this case).
Standard terms and conditions applied to the two accounts and governed the Defendant's use of the Amex Cards. These terms and conditions were summarised, accurately, at paragraph 5 of the Particulars of Claim in the following terms, noting that AESEL is the acronym for the Claimant:
"a. At clause 2.1 that the customer consented to charges being applied to his account inter alia where the customer signed a paper slip issued by a merchant or concluded an agreement with a merchant and consented to the merchant charging his account or the customer verbally consented or confirmed his agreement to all or part of a charge after a charge had been submitted.
b. At clause 2.2 that the customer agreed that he could not cancel charges once he consented to charges being applied to his account.
c. At clause 2.3 that to prevent misuse of his account, the customer would sign the card in ink as soon as he received it and keep the card secure at all times.
d. At clause 5.2 that the customer should check his statements for accuracy promptly upon receipt and contact AESEL as soon as possible if he needed more information or had a question about or a concern about any charge on the statement. This was expected to be done within one month of receipt of the statement and if the customer did not question a charge that he believed to be unauthorised or inaccurate within this period, or up to 13 months in exceptional circumstances, he would be liable for the unauthorised charge.
e. At clause 5.2, that if AESEL requested, the customer would promptly provide AESEL with written confirmation of his question or concern about a charge and any information that AESEL required in relation to the question or concern.
f. At clause 6.1, a late payment fee would be payable in the event that the customer delayed or omitted the payment of any charges due in respect of his account. The late payment fee would be payable in the event that the customer still owed payment after 30 days from the statement date (at 3% or USD25 whichever is higher); then 60 days from the statement date if the customer still owed payment (at 1.5% or USD15 whichever is higher) and each month thereafter (at 1.5% or USD 15 whichever is higher) until the customer paid AESEL in full all amounts outstanding on the account.
g. At clause 6.2, if AESEL referred the account to a collection agency (including a firm of solicitors), AESEL was entitled to charge the customer for any actual and necessary costs which AESEL or the agency might reasonably incur in recovering any outstanding amount owed to AESEL. Late payment fees would continue to accrue until the amount owed was paid by the customer including after judgment if the case was taken to court.
h. At clause 8 that the customer was required to pay AESEL all amounts outstanding on his account when due including charges on all cards issued to the customer even if there was no signature or card presented.
i. At clause 20.1, the customer must tell AESEL immediately by telephone if he suspects his account is being misused or a transaction is unauthorised.
j. At clause 20.3, that the customer's maximum liability for any unauthorised charges was USD50 unless he did not comply with this agreement intentionally or because he was grossly negligent or contributed to, was involved in or benefitted from the misuse, in which case he would be liable for the full amount of the unauthorised charge.
k. At clause 20.4, provided the customer notified AESEL in accordance with clause 20.1 and the customer did not contribute to and was not in any way involved in or did not benefit from misuse of the card, then the customer would not be liable to AESEL for any unauthorised charges once he had notified AESEL.
l. At clause 20.5, the customer agreed to cooperate with AESEL including giving AESEL a declaration, affidavit, or copy of an official police report, if AESEL asked.
m. At clause 20.7 if, upon contacting AESEL, the customer provides AESEL with grounds for disputing a transaction, AESEL would initiate an enquiry and place a temporary credit on the account in the amount of the transaction. Once investigations are complete, AESEL will adjust the account accordingly."
I shall refer to these terms and conditions collectively as the "Contract".
The Gold Account
US$56,790.59 is outstanding on the Defendant's Gold Account and is claimed by this action. The Defendant disputes liability for this amount. His case is set out in the Defence, which asserts that "the matters claimed on the Gold Account, were part of a fraud upon the Defendant and many others, in a claim known as the 'UFX Bank Scandal'." No details have been put before me as to what the UFX Bank Scandal was, and why (if it exists) it has any relevance at all to the debt outstanding on the Defendant's Gold account. Mr Rosen was not able to take the matter any further in submissions. He simply relied on the Defence (which the Defendant had attested by a statement of truth).
The defence went on to say in relation to the 'UFX Bank Scandal' that "The Claimant was notified and accepted the position some months ago". That is incorrect: Mr Shingles, a witness called by the Claimant (whose evidence I shall consider in more detail below) gave clear evidence, which I accept, that he was not aware of the 'UFX Bank Scandal' and that at no point was the Claimant notified of this dispute, until the Defence was received; the Claimant had not agreed that the charges were not due from the Defendant; it was not correct to say that the position "was agreed" as the Defendant asserted. Mr Shingles was not cross examined on this point. I accept his evidence on this point.
I reject what the Defendant asserted in his Defence. It is perfectly clear that the Claimant had not accepted that the Defendant was not liable for the debts on the Gold Account.
The Claimant is entitled to judgment in the amount claimed on the Gold Account ie US$56,790.59, together with interest as claimed at the contractual rate of 1.5% per month on unpaid balances together with late payment charges, which together come to US$28,111.38.
The defence in relation to the Gold Account does the Defendant's credibility no good at all.I shall come back to that issue later.
The Centurion Account
US$617,961.57 is outstanding on the Centurion Account. That amount reflects 19 disputed transactions which took place between 1 October 2012 and 21 December 2012.
I heard evidence from Mr Shingles, a former police officer who now works for Amex (or its connected companies) investigating fraud. He explained that each of the 19 disputed transactions was completed by use of an Amex ROC (record of charge), being a tripartite docket, inserted into a "zip-zap machine" (the old fashioned swiping machine used for paying by card), with the card beneath. The card would have been swiped. The purchase details and price would be inserted by hand on the ROC. Typically, the cardholder would then be asked to sign.
The retailer in each of the 19 disputed transactions was Mr Al-Tayyar, then an accredited Amex merchant retailing in Riyadh, Saudi Arabia (he has since ceased to trade and his merchant agreement with Amex has been terminated). In each of the 19 disputed transactions, Mr Al-Tayyar sought authorisation which was given over the phone by Amex before the transaction went through.
I have been taken to the copies of the ROCs for each of those transactions. They are as follows:
No. Card used Date Amount (USD)
1 Card 2 01/10/12 15,110.69
2 Card 2 14/10/12 30,221.39
3 Card 2 04/11/12 34,891.97
4 Card 2 10/11/12 6,106.09
5 Card 2 12/11/12 12,212.19
6 Card 2 12/11/12 2,747.40
7 Card 2 20/11/12 4,579.09
8 Card 2 28/11/12 108,371.16
9 Card 2 02/12/12 486.29
10 Card 2 02/12/12 4,882.12
11 Card 2 12/12/12 265,948.25
12 Card 2 18/12/12 93,411.57
13 Card 2 18/12/12 13,736.99
14 Card 2 19/12/12 30,221.39
15 Card 2 19/12/12 30,770.86
16 Card 2 20/12/12 10,989.59
17 Card 1 20/12/12 13,736.99
18 Card 1 20/12/12 30,221.39
19 Card 2 21/12/12 13,736.99
20 Card 1 21/12/12 10,989.59
(Transaction 9 has since been dropped from this claim, it is conceded to be a mistake by the Claimant.)
I accept that the paperwork for each of the disputed 19 transactions establishes the Claimant's case, at least prima facie. The ROCs correspond in amount and date with the outstanding charges on the Centurion account. Each ROC is signed by a signature which corresponds – at least to the layman's eye – with samples of the Defendant's signature held on file by Amex. (It is important to note that the Defendant has two signatures, possibly reflecting his use of Western and Arabic script).
More broadly, I accept Mr Shingles' evidence about his investigation, conversations that he had, and places that he visited in the course of it. I respect his conclusions (that the transactions were genuine), because he is an experienced investigator, but I recognise that the conclusion as to the genuineness or otherwise of those transactions is in the end for me, not him.
Admitted transactions
The Defendant admitted three of the 19 transactions, namely 17, 18 and 20 (see paragraph 2 of the Defence). The admission was originally made in a telephone call on 5 February 2013 between the Defendant and an employee of the Claimant, a transcript of which I have seen.
The Defendant has not paid the amount outstanding in relation to these transactions, although he says that a US$75,000 guarantee of his liabilities, which was called on by Amex to meet the sums outstanding on these two accounts, covers his indebtedness.
These three transactions took place using a different card from the other 16. But that apart, these three are markedly similar to the other 16. Most notably, the ROCs for these three transactions, which are admitted, show Al Tayyar as the merchant. The inference I draw is that the Defendant did, knowingly, purchase goods from Mr Al-Tayyar. That is why he accepts his liability for these three charges. Yet the defence says in terms at paragraph 2: "The Defendant denies doing any business with Al Tayyar jewellery shop in Riyadh, Saudi Arabia". That statement is not correct. On his own case he engaged in at least three transactions with that merchant.
Moreover, the three accepted transactions are at the end of the sequence, taking place on 20 and 21 December 2012. It is difficult to fit the Defendant's acceptance of those three with his denial of the earlier transactions (which he says were fraudulent). I will return to the Defendant's credibility later.
Disputed transactions - contractual claim
The Claimant claims that money is due under the contract between the Claimant and the Defendant (ie the standard terms and conditions) in relation to the 16 remaining transactions. The Defendant denies that he is liable. Different provisions are in point for different transactions and I shall group those 16 in different ways to reflect the impact of the various clauses of the Contract.
Transactions 8 and 10
The Claimant wrote to the Defendant by email to request verification of these two transactions (now listed as 8 and 10). The Defendant replied by email dated 5 December 2012 saying "I confirm the transactions. Thanks indeed for your concern". These two transactions, like all the others in relation to the Centurion Account, were with Mr Al-Tayyar.
Pursuant to clauses 2.1.5 and 2.2 of the Contract, the Defendant is plainly fixed with his agreement to these charges.
The Defendant asserts that the acceptance was "by mistake". I reject that suggestion. The aggregate amount of these transactions was over US$113,000. The Claimant queried the transactions with the Defendant because the sums involved were so substantial. It is not credible to suggest that he confirmed these transactions, in writing, by mistake.
The Defendant further seeks to rely on the maxim "ex turpi causa non oritur actio". I do not accept that that maxim has any possible application here. There is no evidence before me to suggest that the Claimant has been involved in a fraud, or should be deprived of repayment of the amount owed to it on the Centurion account because of some immoral or unlawful act by it. That maxim is raised in the context specifically of these two transactions. But if the Defendant seeks to argue it more broadly, in relation to the other transactions too, then the answer is the same: it has no application here.
There is no defence to transactions 8 and 10 for which the Defendant is contractually liable, having expressly accepted those charges.
Transactions 1-8 inclusive
These transactions all took place between 1 October 2012 and 28 November 2012. The Defendant first reported his concerns that the transactions were not genuine on 22 January 2013 when he emailed Amex saying (the following is an exact quote):
"Pls note that I did not receive the goods/services pls I need
Urgently to dispute the charge of USD 108,371.16 also to
Dispute any further charges from Al-Tayar effective immediately
Pls dispute from beginning up to date and bring the account in credit after disbute
All al-Tayar transactions from date 1/10/12
N.b Al-Tayar are using manual machine and he rent it to others
Unless he proof all these purchases and received
The goods by us and provide the pictures and serial numbers of
The goods and authenticated by our official signature
Dispute it all
N.b
Pls rectify the account before 25/1/2013"
(In passing, I note that the Defendant appears to say in this email that all the Al-Tayyar transactions after 1 October 2012 are fraudulent. But he has in fact accepted the last three, numbers 17, 18 and 20, and had on 5 December 2012 accepted another two, 8 and 10. The Defendant's emailed rejection of all the transactions is therefore inconsistent with his own actions in accepting at least 5 of them in the course of this dispute.)
The Claimant points to clause 5.2 and argues that this fixes the Defendant with paying for all transactions which took place more than a month before his last account statement. The Claimant was therefore fixed with all the transactions up to the end of November, because he only notified his concerns on 22 January 2013.
The only exception to the one month deadline imposed by clause 5.2 is where there are "exceptional circumstances" in which case the period can be extended to 13 months. I accept the Claimant's submission that there are no exceptional circumstances here. Far from it. The evidence is that the Defendant's account was being accessed very regularly during this period (a point made by Mr Shingles and backed up by extensive electronic print outs). I infer that the person accessing the account was the Defendant himself, or someone who was in contact with the Defendant: therefore, the Defendant knew that the charges were on the account. Further, the Defendant made payments into the account, in substantial amounts, on 23 October 2012, 8 November 2012 and 18 December 2012, and I am satisfied that before doing so, he would have inspected his account and authorised payment. I infer that the Defendant knew about the activity on his account throughout the period October to December 2012. He had no reason not to raise within one month any concern he had in relation to the transactions. There are no exceptional circumstances to extend that period.
But in the end, what the Defendant knew or did not know is unimportant. He had a contractual obligation to check his statements and to raise any concerns, within a month at the outside. He did not raise any concerns until 22 January 2013 by which time the transactions in October and November were long passed, and beyond the permitted window for raising concerns.
The Claimant is fixed with paying for these transactions under the Contract.
The 16 disputed Al-Tayyar transactions
On 7 February 2013, the Claimant contacted the Defendant and asked him to complete a Fraud Declaration form in relation to the 16 disputed transactions. The Defendant refused, emailing back that "Sorry I already inform dgt all concern information pls do not contact me again" [sic]. The Claimant then forwarded the form to the Defendant's Liechtenstein bank, for the attention of Nicolas Maurer, under cover of an email which stated that it was a "fundamental requirement that the attached Fraud Declaration form is completed to assist with our ongoing enquiries". Nicolas Maurer forwarded the Claimant's email to the Defendant under cover of his own email which stated "I must insist that you fill out the form below as soon as possible and send it back to American Express directly. Otherwise there is the possibility that the refunds made to your account will be cancelled and you are obliged to pay the full bill as far as I am concerned".
The Defendant replied on the following day, 8 February 2013:
"Pls note that we provide dgt dispute dept with all the information they need
Thru secure messages
All confidential information provide it to dgt dispute dept
Mr John Hassan he is account security not his jop dispute solution if he need any information let him refer to dispute dept I do not need conflict in the investigation
If they try to reverse the credit I will raise the issue to my lawyer and high Authorities and might effect Amex reputation" [sic]
This was an extraordinarily unhelpful response. It put forward a spurious excuse that the wrong person had asked for the form to be completed and that was the reason for the Defendant's refusal to do so. That response was totally inadequate. It is inconsistent with the conduct to be expected of a person who has been defrauded of substantial sums of money and wishes to be protected against a claim for the missing money.
Mr Rosen suggests that the Defendant now accepts that he should have completed and returned the Fraud Declaration form. His failure to do so was attributable to (i) his failure to understand what he was being asked to do, as a result of his poor mastery of English, (ii) his irritation at being asked to complete the form when he had already given all relevant details to the Claimant, and (iii) his lack of awareness that he was obliged to fill in the form under the Contract. Dealing with each in turn: (i) I reject the suggestion that the Defendant did not understand what he was being asked to do, because of any language deficiency. It is clear from the written email exchange that the Defendant understood perfectly well what he was being asked to do, and simply refused to do it. His written English is imperfect, but it is clear enough that he understood what he was being asked to do. Further and in any event, I accept the evidence of Mr Shingles that the Defendant speaks good English, and understands English well – Mr Shingles as a native English speaker would have been able to form a view as to whether the Defendant could understand him, even in the course of short conversations. (ii) Even if the Defendant was irritated by being asked for details, that can have no bearing on the fact that he was obliged under the Contract to confirm that the transactions were fraudulent, or risk having to pay for the transactions himself. I reject this suggested excuse for his failure. But in any event, I fail to see why the Defendant was irritated in this way: the request was a reasonable one, and there was no reason to be "fed up" about it. (iii) The Defendant was not unaware of the Contract terms requiring him to complete the Fraud Declaration, because the requirement for him to do so was clearly outlined in the emails to the Defendant, to both of which the Defendant replied. But in any event, the Defendant's ignorance of the requirement, if true, could not excuse this failure. There is no substance in any of the points made on the Defendant's behalf in this context.
The failure to complete a fraud declaration in relation to the 16 transactions which the Defendant was by this stage disputing was a clear breach of clause 20.5 of the Terms and Conditions. It means that the Defendant effectively forfeited his right to be indemnified by the Claimant for any losses.
For that reason, in addition to the contractual provisions which apply in relation to other specific transactions in dispute, the Claimant is obliged to meet the charges for all 16 transactions under the Contract.
But further, I infer from the Defendant's refusal (having examined and rejected all the arguments put forward on his behalf by Mr Rosen) that the Defendant knew that he had not been defrauded at all. He was reluctant to sign the form because he knew that if he did so, he could get into trouble, for making a false accusation of fraud.
Conclusion on the basis of the Contract
In reliance on the Contract, the Claimant has an unanswerable claim to the money sought on the Centurion Account. The Claimant is entitled to the outstanding sum of US$617,961.57.
The Defendant is in addition liable to interest at the contracted rate, which comes to US$305,890.86.
Disputed transactions – evidence of fraud
Thus the Claimant has established its case under the Contract (and will have judgment on that basis). I nonetheless wish to deal with the remaining and central factual issue raised in this case.
The cornerstone of the defence is that the 16 transactions were fraudulent. The Defendant denies that he signed the 16 ROCs relating to these transactions, and asserts that the signature on the ROCs is not his.
In this connection, the Defendant attached to his defence an undated report purporting to be from three individuals, Mahmoud El Faqih, Antoine Venianos and Mohamad Sultan, commenting on the signatures on the various ROCs. But this "report" is not compliant with CPR rules: there is no expert's declaration, the specialism of the authors is not stated, there is no suggestion that any of them understood that they had any obligations to the English Court at the time of writing the report. I am unable to place any reliance on this "report" and I do not do so.
I do not find the version of events put forward by the Defendant to be credible, for the following reasons:
a) Although he asserts in his defence (paragraph 2), that he never did any business with Mr Al-Tayyar, that is manifestly untrue. The Defendant accepts transactions 17, 18 and 20, all of which were with Mr Al- Tayyar.
b) The Defendant originally accepted transactions 8 and 10, which were also with Mr Al-Tayyar. He did so because he was asked by the Claimant to confirm them and explicitly did so, in writing, on 5 December 2012. He would not have accepted those transactions – which were for a substantial sum – unless they were genuine. In my judgment, his initial acceptance represents the truth. His subsequent denial of those transactions is a fabrication. In relation to those transactions also, he had dealings with Mr Al-Tayyar. His assertion to the contrary is yet further devalued.
c) I have already rejected the suggestion that the Defendant's lack of understanding of English caused him to misunderstand at any stage what was going on. His reliance on poor language skills is therefore a further lie.
d) I have already rejected the suggestion that the Defendant can have misunderstood the need for him to sign the Fraud Declaration form: in light of the emails to him which set out clearly why the form was required, his arguments are untenable and are a further fabrication in this case.
e) I have already concluded that the defence put forward in relation to the Gold Account is based on the mistruth that the Claimant had "accepted the position". That was not so.
f) I have already concluded that the Defendant refused to sign the Fraud Declaration form because he knew the various transactions were in fact genuine, and he did not want to get himself into trouble by making a false accusation of fraud.
In summary, I find the Defendant's case to be inherently implausible, internally inconsistent, and lacking in credibility. I do not believe it.
I hardly need to address the other evidence in the case, but for completeness I will do so.
The Defendant's affidavit sets out a collection of excuses for the Defendant's failure to pay the sums due. Some of these I have already considered: he suggested that his language skills caused him to misunderstand, a point which I have already rejected. He refutes the authenticity of transactions 8 and 10 because he says it is not his signature on the ROC: I have dealt with those transactions already, but the suggestion in the affidavit that the Defendant did not sign for those transactions because he was engaged in negotiations with the jeweller as to price at the time, lacks credibility and further undermines his case. He complains that the Claimant failed to set a cap on his spending on the card, and to notify him if his spending exceeded the cap, but I fail to see how those points (if they are true – and I make no finding about that) alter his contractual liability to the Claimant. He denies that the signatures on the ROCs for the disputed 16 transactions are his, but as I have already said, there is no reliable expert evidence before me to support that assertion and in light of my earlier conclusions that these transactions were genuine, I reject that assertion. He suggests that he has had no dealings with Mr Al-Tayyar, a point I have already addressed and which is patently untrue. He accepts that he has had dealings with Abdul Sammad jewellers and suggests that because the ROCs went through on Mr Al-Tayyar's machine, that somehow absolves him of liability to pay the sums due: I do not follow this argument, which appears to rely on the fact that Abdul Sammad borrows Mr Al-Tayyar's zip-zap machine (as to which I make no finding) as an excuse for non-payment. This is misconceived: even if true, it would provide no defence to the Claimant's claim.
All in all, the affidavit does very little to help the Defendant. In my judgment, its contents confirm the conclusion I have already reached that the Defendant is not a credible witness. He has no proper defence to this claim.
Finally, then, I turn to the witness statements of Mr Al-Tayyar and Mr Al-Hamoud, the Saudi witnesses. They hardly matter, given my conclusions above. Neither witness wished to come to give evidence at trial, as set out in Katie Molloy's witness statement dated 7 October 2015. Their volte face is unexplained. Such reasons as can be gleaned are as follows: it seems that the Defendant had spoken to Mr Al-Tayyar (at least on Mr Al-Tayyar's account, reported to Ms Molloy), and Mr Al-Tayyar now feels that the Claimant has let him down and is doing nothing for him; Mr Al- Hamoud reports being concerned for his reputation. Both men at one stage sought a substantial sum of money to come to Court, far more than could be seen as reasonable expenses.
It is not possible for me to come to form any concluded view on the veracity of these witnesses. However, I do accept that the version of events that they put forward is inherently more likely to be the truth. They both say that the Defendant purchased items in person from Abdul Sammad's shop (Abdul Sammad is the same person as elsewhere referred to as Mr Al-Hamoud), producing his Amex card to pay; the payment was put through on Mr Al-Tayyar's zip-zap machine and Mr Al-Tayyar sought authorisation for each transaction, which was given, and then the goods were handed over to the Defendant, personally.
This fits precisely with the ROCs I have seen and with the fact that telephone authorisations were logged by the Claimant. It explains the whole sequence of the 19 transactions. It is the logical consequence of my rejection of the Defendant's case on the facts.
CONCLUSION
I express my gratitude to Mr Ali Tabari, counsel for the Claimant, for his clear and helpful submissions.
I also thank Mr David Rosen for his submissions on behalf of the Defendant. He said everything that could possibly be said on his client's behalf. But in the end, he was given the impossible task of trying to make bricks without straw.
I give judgment for the Claimant in the amount sought. I will hear submissions on the appropriate order.
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MR JUSTICE JAY:
Introduction
On 7th May 2015 combined parliamentary and local government elections were held in Bournemouth. There are 18 local government Wards of the Bournemouth Borough Council, each retaining 3 councillors. Two of these Wards are Kinson North and Kinson South. On 7th May 2015 there were 7,664 registered electors eligible to vote in the Kinson South Ward.
The result of the election for Kinson South Ward, following a recount, was declared on 8th May 2015. Laurence Fear (UKIP) secured 1,224 votes, Roger Marley (Conservative Party) 1,188 votes, Norman Decent (Conservative Party) 1,147 votes and Beryl Baxter (Labour Party) 1,083 votes. Accordingly, Laurence Fear, Roger Marley and Norman Decent were elected. It may be seen on the elementary arithmetic that the fourth candidate, Beryl Baxter received 64 votes fewer than Norman Decent, 105 votes fewer than Roger Marley and 141 votes fewer than Laurence Fear. There were a number of other candidates, but the gulf between them and Ms Baxter's tally is too great to have any material impact in the circumstances which have arisen.
Beryl Baxter has petitioned this Court seeking a declaration that the local government election was invalid, on the basis of alleged acts and omissions perpetrated by the Returning Officer, the Fourth Respondent to these proceedings. Helpfully, the parties are agreed that the issues raised by this Petition can be determined by this Court by way of a Special Case pursuant to section 146 of the Representation of the People Act 1983. This has eliminated the need for the finding of facts in an intricate evidential setting.
The two issues raised by this Petition are important and novel. Before addressing them, it is convenient to distil the essential ingredients of what occurred on 7th and 8th May 2015.
Essential Factual Background
The problems arose owing to a simple, unfortunate, printing error. "Books" or batches of ballot papers were printed and assembled in advance of election day. Whilst the cover of the Kinson South ballot books showed the correct information for the Ward, the ballot papers inside were for Kinson North; and vice-versa.
At around 7.15 on polling day, the Presiding Officer at one of the polling stations in Kinson South telephoned the Elections office, contained within the Council's offices, informing it of the problem. It very soon became clear that this problem affected each of the nine polling stations in both Wards, and steps were promptly taken to start moving ballot papers from the incorrect polling stations to the correct ones. As this was happening, all polling stations in Kinson North and Kinson South were contacted and stopped issuing ballot papers for the local government elections for these Wards until the correct ballot papers had been provided.
By 10.15, all polling stations in Kinson North and Kinson South had been issued with the correct ballot papers. In one of the nine Wards, the correct ballot papers could be issued immediately, and so there was no period of postponement or interregnum. However, the maximum hiatus was one of 2 hours 32 minutes.
Unfortunately, some electors provided with the wrong ballot papers nonetheless placed them in a Kinson South ballot box before the pause in voting.
Since the ballot boxes originally provided now contained ballots for the wrong election, each polling station was furnished with a new ballot box. In the meantime, lists had been prepared of those affected by the ballot paper problem. These were compiled by checking the corresponding number lists in the station for the elector numbers of those impacted, which information was then cross-referred to the register of electors to obtain the names and addresses of the affected electors.
At around 13.00 on 7th May 2015, a decision was made to send a "door knocking team" to the addresses of the affected electors, with instructions to invite the latter to return to vote. The exercise began at around 13.30, and continued until around 16.30 when a new team, armed with the same instructions, was despatched to continue the exercise, which was completed at around 21.20.
After the result of the election was declared on 8th May, an unofficial investigation was undertaken to ascertain the numbers of electors affected by the ballot paper error. The outcome of this investigation, taken in conjunction with the formal inspection and re-count which took place in the High Court before Master Eastman on 17th September 2015, may be summarised in the following way.
The number of electors in the Kinson South polling stations issued with incorrect ballot papers was 76. Of these, 56 returned to vote, and completed ballot papers, having been invited to do so pursuant to the exercise mentioned under paragraph 10 above. The number of electors who attended Kinson South polling stations after the problem had been identified, were issued only with parliamentary ballot papers at that time, and later returned and voted in the local election was 65. The number of electors in this category who did not return to vote was 95. Thus, the total number of electors affected by the ballot paper error to the extent that they were effectively disenfranchised was 115 (i.e. 20 plus 95). The 56 returning electors were affected to the extent that their second votes may have been in breach of the rules, and should therefore be disregarded.
An analysis has also been undertaken of how the 56 returning electors voted. The result may be encapsulated in this manner. Laurence Fear's 1,224 votes equated to 31.85% of the ballot papers included in the recount on 8th May. He received 37.5% of the votes on the ballot papers submitted by the 56 returning voters. The corresponding figures for Roger Marley are 30.91% and 33.92%, for Norman Decent are 29.94% and 26.78%, and for Beryl Baxter are 29.15% and 26.78%. Thus, even if the returning electors' votes are not taken into account, they make no material difference to the arithmetical calculations set out at paragraph 2 above.
The First Issue
Section 48 of the Representation of the People Act 1983 provides, insofar as is material:
"48 Validity of local elections, and legal costs
(1) No local government election shall be declared invalid by reason of any act or omission of the returning officer or any other person in breach of his official duty in connection with the election or otherwise or rules under section 36 or section 42 above if it appears to the tribunal having cognizance of the question that -
(a) the election was so conducted as to be substantially in accordance with the law as to elections; and
(b) the act or omission did not affect the result.
(2) A local government election, unless questioned by an election petition within the period fixed by law for these proceedings, shall be deemed to have been to all intents a good and valid election."
It is common ground that the Returning Officer's relevant acts and omissions were perpetrated in good faith. Their precise definition and ambit is in dispute, hence the second issue arising on this Petition. It is also common ground that, notwithstanding these acts and omissions, however characterised, this local government election was conducted as to be substantially in accordance with the governing law as to elections. Accordingly, the first issue engages sub-paragraph (b) of section 48(1) and not sub- paragraph (a).
The Petitioner accepts that it must appear to this Court that the Returning Officer's acts and omissions did not affect the result of the election as regards Laurence Fear. Even if all 115 of the affected electors had voted for the Petitioner, and none had voted for him, she would still have fallen short of the votes he had already accumulated. It follows that the election of Mr Fear cannot be declared invalid, and for this straightforward reason he did not attend the hearing to defend a position which could not be assailed.
However, the basic arithmetic does not lead to the same ineluctable conclusion as regards Norman Decent and Roger Marley. This is because the gap Ms Baxter needs to make up is less than 115. That said, assuming for the purposes of argument that a statistical or psephological approach is appropriate (and this is the very issue that arises for decision), I accept the submission of Mr Francis Hoar for the Second and Third Respondents that it is unlikely that the 115 affected electors would have voted in such a way as to lift the Petitioner to third place. Not merely (on this footing) may reasonably robust inferences be drawn from the voting behaviour of the 56 returning voters - who were widely distributed across the Ward, and voted in a broadly similar manner to the much larger cohort of original voters - sub-paragraphs (4) and (5) of paragraph 3 of Mr Hoar's well-reasoned Skeleton Argument makes these telling points:
"For Cllr Decent's election to have been affected by the error Ms Baxter would have to have obtained 65 more votes than him among the 115 returning voters. It is important to consider that some of the affected voters could have cast a vote for Cllr Decent, either instead of or (given each voter had three votes) as well as Ms Baxter. Even on the strained assumption that none of the affected voters would have voted for Cllr Decent at all, Ms Baxter would still have required an advantage of 57.39% of the votes (as opposed to the 1.59% fewer votes she received overall and the identical number of votes she received among the returning voters); this does not change if the votes of the 56 returning voters are removed, as Cllr Decent and Ms Baxter received 15 votes each from those voters.
For Cllr Marley's election to have been affected, he would have had to have polled lower than both Ms Baxter and Cllr Decent and both the following would have to have occurred:
(a) Ms Baxter would have had to have obtained 106 votes out of 115 more than Cllr Marley (an advantage of 92.17%, as opposed to the 2.76% fewer votes she received overall and the 7.14% fewer votes received from returning voters) (or 102 votes more, an advantage of 88.70%, if the 56 votes are disregarded, Cllr Marley having received four more votes than Ms Baxter amongst those voters); and
(b) Cllr Decent would have to have obtained 41 votes out of 115 more than Cllr Marley (an advantage of 33.65%, as opposed to the 1.7% fewer votes Cllr Decent received than Cllr Marley overall and the 7.14% fewer votes received from returning voters) (or 37 votes more, an advantage of 32%, if the 56 votes are disregarded, Cllr Marley having received four more votes than Cllr Decent amongst those voters)."
It follows that on a strong preponderance of probabilities the result would have been the same had the acts and omissions in question not occurred. This conclusion may obviously be expressed with an even higher degree of confidence as regards Mr Marley.
However, these conclusions may only be drawn if the stated premise is correct, namely that a statistical or psephological approach is appropriate. It is hotly disputed. In these circumstances, the issue for this Court may be formulated in these terms: for the purposes of section 48 of the 1983 Act, is it permissible for the Court to undertake an inferential analysis of how disenfranchised electors would or might have voted?
There is no decided authority which directly answers this question. Accordingly, recourse must be had to the language and purpose of section 48 of the 1983 Act, and to first principles.
The leading authority on the correct, general approach to this provision remains the decision of the Court of Appeal in Morgan v Simpson [1975] 1 QB 151. The provision under scrutiny there was section 37(1) of the Representation of the People Act 1949, but it was in identical terms. According to Lord Denning M.R., the section should be read in such a way as to confer a positive obligation on the Court to declare an election invalid if it appears that the election was not concluded so as to be substantially in accordance with the law, or that the act or omissions did affect the result. For Stephenson and Lawton LJJ, the section should retain its negative form, but the conjunction "and" should not be read disjunctively. However, the practical import of these textual considerations dwindles to next to nothing in view of the twin considerations that the parties are agreed that there is no formal burden of proof, and as Stephenson LJ's observed:
"For the negative form of the section provides that both substantial compliance with the law and no effect upon the result are required in conjunction to save breaches of duty or of the rules from avoiding an election, as is pointed out in the judgments of Lord Denning M.R and Lawton LJ" (at 167E/F)
In both Edgell v Glover [2003] EWHC 2566 (QB) and Considine v Didrichsen [2004] EWHC 2711 (QB) this Court proceeded on the basis that the reasoning of Lord Denning M.R. and Stephenson LJ could be synthesised into the following two statements of principle:
"(1) Section 48 can be translated and understood as creating a positive duty with the consequence that an election must be declared invalid by reason of any act or omission of the returning officer if it appears that the election was not so conducted as to be substantially in accordance with the law as to elections or that the act or omission did not affect the result.
(2) The negative form of the section means that both substantial compliance with the law and no effect upon the result are required to save breaches of duty or the rules from voiding the election." (per Newman J in Edgell at paragraph 23)
In all the relevant jurisprudence in this jurisdiction, whereas courts have been prepared to analyse how, if at all, the relevant act or omission has affected the number of votes which would or might have been cast, there is no example of courts being disposed to analyse how (i.e. for whom) these hypothetical votes would or might have been distributed. On my understanding, on no previous occasion has the court been asked to undertake such an exercise.
Mr Hoar drew our attention to the decision of the High Court of Justice in Northern Ireland, in Re The Parliamentary Election for Fermanagh and South Tyrone [unreported, 19th October 2001]. In that case, a polling station was kept open for up to 15 minutes beyond the appointed time. Carswell LCJ performed some rough-and- ready calculations of the number of voting papers which could have been issued during this period, and concluded that it could not have been materially more than thirty - still well short of the successful candidate's majority of 53 votes. Thus:
"We do not need to determine the matter by resort to the burden of proof, for we are affirmatively satisfied on the balance of probabilities that materially fewer than 53 voting papers were issued after 10pm on polling day. We therefore hold that the breach of the regulations did not affect the result of the election."
Mr Hoar's core submission is that the same analytical, probabilistic approach may be applied to the present situation, with the same outcome. He is fortified in that submission by his compelling analysis of the figures (see paragraph 17 above), as well as by the decision of the Court of Appeal of the East Caribbean States in Ouinn- Leandro v Jonas [2010] 78 WIR 216, where a close scrutiny of voter distribution and voting patterns was undertaken in order to draw inferential conclusions as to how votes would have been cast (see, in particular, paragraphs 181, 191-192 and 201 of the judgment of Rawlins CJ). However, this authority is not persuasive, still less binding, in this jurisdiction, and it appears that no contrary argument was advanced.
Mr Gavin Millar QC for the Petitioner, and Mr Timothy Straker QC for the Returning Officer, advanced broadly similar submissions to the effect that for reasons of statutory language, and on grounds of principle, it was simply impermissible notionally to penetrate the lock and seal of the ballot box by speculating how excluded voters would or might have cast their ballots at any particular time.
In my judgment, the Petitioner's case on this issue is correct. Does it appear to this Court that these acts and omissions affected the result? My initial reaction to the statutory language was to focus on the word "appears" in section 48, the use of which tends to suggest that the approach should not be overly analytical and should not travel deeper than the external or superficial appearance of the matter. However, I am persuaded by Mr Millar's argument that the whole of the relevant phrase should be considered, including the verb "affect In the context of the respective positions of the Petitioner, the Second Respondent and the Third Respondent, it appears that the result has been affected because 115 electors have been effectively disenfranchised by the Fourth Respondent's acts and omissions. It is, of course, true that both these Respondents could not come fourth in the poll, but the role of the court is not to attempt to reach any conclusion as to the hypothetical result, absent the relevant acts and omissions having taken place. This would be to enter terra incognita, namely the very territory which in terms of principle and policy must be regarded as constitutionally sacred. By enacting section 48 of the 1983 Act, Parliament cannot be treated as somehow empowering the judicial arm of Government to peer into the voting booth, whether by drawing informed, probabilistic inferences or otherwise.
This conclusion supports the delicate constitutional balance which clearly exists in this domain, and achieves practical and legal certainty. If Mr Hoar's exercise were permissible, it would have to be undertaken in all situations where similar problems were created, even if the numbers were more finely balanced. It is no answer to this objection to say that the facts of this instant case are particularly strong. Furthermore, there would in principle be no constraint on the type of evidence the court might receive: e.g. psephological (on a micro or macro level), geographical and behavioural. In my view, it seems obvious that Parliament could not have intended to mandate such a potentially far-reaching, penetrating and invidious level of inquiry by the judiciary.
The position is clearly different as regards Mr Fear, because the basic arithmetic yields the same result in his case, however the figures may be finessed. This is not a question of drawing inferences but of simple subtraction; the gap to be bridged is more than 115. Nor can the present case be equated with Re The Parliamentary Election for Fermanagh and South Tyrone, being probably the most helpful authority from Mr Hoar's perspective, because the common sense conclusions of a deductive nature that the Court was prepared to make were entirely straightforward, and did not go beyond a simple head count.
There are dicta in Edgell which at least on one reading might suggest that the court has a deeper role. At paragraph 29 of his judgment, Newman J said that the words "it appears" means something equivalent to "the court must make up its mind on the evidence", without it seems applying rigid evidential considerations or formally applying a standard of proof. This phraseology is capable of lending some support for Mr Hoar's case, but ultimately it is only limited. The facts of Edgell were very different, and it is not an example of an instance of the court being prepared to draw inferences as to how missing votes would or might have been cast.
There are many situations where courts are prepared to draw inferences from evidence of a statistical nature, and I have in mind in particular the field of personal injuries' litigation. However, in those domains the policy considerations are rather different, not least because no quasi-constitutional issues arise. In Sienkiewicz v Grief (UK) Ltd [2011] 2 AC 229 the Supreme Court stated that epidemiological evidence should be deployed, if at all, with considerable care, because it is inherently generic. In the present context, the practical and policy arguments militating against the use of this type of evidence appear overwhelming. Voting behaviour can be extremely unpredictable across a Ward, and may depend on factors about which it is difficult to be precise. Ultimately, the policy of section 48(1) is that an investigation of likely voting behaviour is tantamount to an exercise in pure speculation, and must be avoided.
This Petition must succeed on the basis that it appears to the Court that the acts and omissions for which the Fourth Respondent is responsible, effectively disenfranchising 115 electors, affected the result of the election of the Second and Third Respondents.
Strictly speaking there is no need to consider the second issue which arises. However, we heard detailed argument on it, and given the importance of the point and that this case may go further, it is appropriate that it be addressed.
The Second Issue
In relation to this second issue, the fault lines between the parties are differently distributed. Mr Hoar sided with Mr Straker, and it was only Mr Millar who argued that the ballots of the 56 returning electors should not have been included.
The legal backdrop to this issue is the relevant provisions of the Local Elections (Principal Areas) (England and Wales) Rules 2006 [2006 S.I. No. 3304] ("LEPAR"), in particular Rules 15, 16, 33 and 35 of Schedule 3. LEPAR contains a specific and detailed set of mandatory rules governing the method of poll, the form of the ballot paper, the questions to be put to voters, and the voting procedure.
I agree with Mr Millar that it is necessary to be specific as to the breaches of LEPAR which were perpetrated by the Returning Officer in this case.
In my judgment, these breaches comprise:
(i) issuing an erroneous or invalid ballot paper to 76 electors;
(ii) failing to issue a ballot paper to the 160 electors who applied to vote during the interregnum;
(iii) issuing the 56 returning electors with a second ballot paper.
Items (i) and (ii) are common ground, but item (iii) is in dispute and needs to be addressed.
Mr Millar submitted that there is no provision under LEPAR, which is a comprehensive and self-contained code of rules, empowering a Returning Officer to cause or countenance a preliminary investigation to be undertaken, and a "door knocking team" to be despatched. In my view, this submission is clearly correct, but it does not strike at the real vice of what happened here. Although the 56 returning electors would not have returned to the polling stations in the absence of these affirmative, purportedly curative steps, the real point under LEPAR is whether there exists any power to issue a second ballot paper in these circumstances. If there was, the taking of these pragmatic steps would make no difference to the legal analysis.
Mr Millar's submissions have two fundamental ramifications: first, that there is no "self-help" remedy under the regulatory scheme; and, secondly, that these acts and omissions must be dealt with, if at all, through the judicial process. Mr Millar accepted that the corollary of his argument was that it must be deemed to be the policy of LEPAR to fix the voter with responsibility for examining the ballot paper for its correctness.
Mr Straker's brief and attractive riposte to Mr Millar's technical argument is that these 56 returning electors had never cast a legally valid vote "first time round" because the ballot paper was non-compliant with LEPAR, from which it followed that their second vote was in fact their first legally cognisable ballot. It was as if, first time round, these electors had been given a ballot paper for Bourneville.
The parties are in complete agreement that on the first occasion the relevant electors were not given a valid ballot paper. For Mr Millar, this is one of the "acts or omissions" founding his section 48 complaint; for Mr Straker, this would have been an act or omission falling in that category were it not for what happened subsequently. Thus, Mr Straker's submission has the uncomfortable appearance of seeking to define the legal character of what occurred by the happenstance of subsequent executive action by the Returning Officer.
Furthermore, Mr Straker's submission is based on the twin premises that the first ballot cast may be deemed to have no legal effect, and the Returning Officer is effectively empowered to say so. Mr Millar hinted that the analogy with public law may not be complete, but in my view Viscount Radcliffe's famous dictum in Smith v East Elloe RPC [1956] AC 736 (at 769) provides a valuable analysis in the present situation:
"An order, even if not made in good faith, is still an act capable of legal consequences. It bears no brand of invalidity upon its forehead. Unless the necessary proceedings are taken at law to establish the cause of invalidity and to get it quashed or otherwise upset, it will remain as effective for its ostensible purpose as the most impeccable of orders."
There are numerous judicial utterances of the highest authority to broadly similar effect. The old void/voidable distinction is, of course, no longer regarded by public lawyers as a helpful analytical or juridical tool. The more parsimonious and straightforward analysis is that the ballots of the 76 electors, all cast on invalid ballot papers, fell under the provisions of LEPAR nonetheless to be taken into account until an issue was raised as to their validity (see, further, the express wording of s.48(2)). These ballots were invalid, and could (and should) be adjudicated as such by the Returning Officer at the count; or, if necessary, upon an Election Petition. However, LEPAR contains no mechanism for correcting errors once the ballot paper has been folded and placed into the ballot box. This is treated by the rules as a legally irrevocable act - at least until the poll closes and the ballots are scrutinised.
I agree with Mr Millar that there is no provision in LEPAR for errors of any sort to be corrected by the delivery of a second ballot paper to the voter. Indeed, the tenor of Rules 33(l)(b) and 35(l)(c) is to the contrary effect, because these provisions are predicated on there being one vote, not two. The answer to this submission is not to be found in interpolating the adjective "valid", or the adverb "validly", in the appropriate place in the rules, since this is entirely question-begging.
The upshot is that LEPAR, properly construed and applied, leaves no room for discretionary decision-making by returning officers, let alone for "self-help" remedies which entail ascertaining who has voted incorrectly, and then making contact with them. However well-intentioned, what happened here had the tendency to undermine rather than to safeguard the integrity and secrecy of the whole voting process: the philosophy of LEPAR is to regulate and constrain contact between presiding officers (or their agents) and voters, and to postpone dealing with errors and irregularities until after the closing of the polls.
I accept that the consequence of Mr Millar's submission being correct is that voters only had one bite at the metaphorical cherry in circumstances where they could have no responsibility for the initial printing error. However, although all 76 voters appear not to have spotted the mistake, each was responsible for ensuring that his or her individual ballot paper could be and was completed correctly. The delays which would have flowed from their recognising the error, although constituting an act or omission under the Rules, would have been highly unlikely to have affected the result.
In short, I am driven to conclude that Mr Millar's submissions under this rubric are well-founded, and I would uphold this Petition on the second issue as well as the first.
MR JUSTICE WILKIE
I agree.
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His Honour Judge Graham Wood QC :
Introduction
A claim has been brought by BDA, as she is now known in these proceedings, to recover damages for the consequences of systematic sexual abuse to which she was subjected by the Defendant, her then karate instructor, during her teenage years, that is from late 2001 until December 2005. The Claimant is now 28 years of age.
The matter has proceeded before this Court by way of assessment of damages, following the entry of interlocutory default judgment towards the end of last year, and after Master McCloud refused to set aside judgment in April of this year. Although the Defendant was at one point represented, he has participated in these proceedings as a litigant in person with the assistance of a McKenzie friend. However, he had served no evidence, and thus was not in a position to give any testimony (although this is unlikely to have been relevant to causation/quantum issues for the most part) but I permitted him to ask questions of the Claimant through me.
In this respect, and reflecting the procedure which was followed in the criminal proceedings in which the Defendant had been involved, special measures were allowed, and the Claimant gave her evidence from behind a screen, visible only to myself and her own counsel. Further, and in view of the sensitivity of the subject matter of this claim, and in respect of her privacy, I agreed that an order for anonymity should be continued.
The issues which fall to be determined in this case, therefore, relate to general damages, with the assessment of PSLA for psychiatric injury, the assessment of damages for mental distress and injury to feelings, whether any separate award should be made for aggravated damages in addition, and the quantification of the pecuniary loss claim in relation to lost earnings. However, fundamental to that determination is the proof that the sexual abuse which is established by the interlocutory judgment on liability has been the cause of the subsequent loss and damage.
The only oral evidence before the court was that of the Claimant herself. Witness statements had been provided by two friends and her mother but a decision had been made by her legal team not to call these witnesses and instead to rely upon them as hearsay statements. It was acknowledged that they do not advance the Claimant's case significantly further than her own testimony, which is considered in the context of the agreed medical evidence from the psychiatrist, Dr Rozewicz.
Without any evidence of his own to contradict the Claimant's account and the expert evidence, the Defendant has been unable to play anything other than a very limited role in the forensic process. With the help of his McKenzie friend, Mr Quirino conducted himself with respect and dignity accepting that it was his own behaviour over the identified years which entitled the Claimant to pursue this claim for damages. Whilst he maintained a challenge to the factual basis, he acknowledged that he could not go behind the judgment, and simply sought to question the Claimant on the extent to which other factors might have played a role in her resultant psychiatric presentation.
Having heard evidence within the fairly limited scope of this trial, I reserved my judgment to enable a consideration of the several authorities relied upon and to look in more detail at some of the documentary evidence.
Background
BDA had a normal and uneventful upbringing with her sibling sisters, notwithstanding the divorce of her parents when she was only four. She continued to live with her mother who remarried, but maintained regular contact with her father.
When she was at junior school, BDA took karate lessons from the age of ten years, and it was on this occasion that she first met the Defendant, then a senior grade at the centre where she was training. However she had no close involvement with him. It was not until 14 years of age, when she returned to the sport, that the Defendant became her instructor and head trainer in conjunction with a number of other children from her school, Coombe Girls School in New Malden, Surrey. As she progressed in her training, in early 2002 BDA began to attend evening classes at the Malden Centre, and because of her enthusiasm, the Defendant began to take more interest in her, becoming involved in closer instruction.
This was the beginning of the grooming process throughout 2002 as he moved to private lessons, and then started personal text messaging which BDA considered at the time to be inappropriate and bizarre. When on his own with the Claimant, at a time when she was only 15, he made unprompted comments about her body and her figure, and often brought the conversation round to sex and kissing. These were classic grooming ingredients, because by the beginning of the following year he began to force the Claimant to kiss him in a way in which she could not refuse, progressing on to inappropriate touching of her breasts and genital area, initially over, and eventually under her clothing. This occurred when the Claimant was only 15.
The intimate touching occurred in circumstances where BDA felt unable to resist, and often in situations where she was on her own in his company, because he had picked her up, or she was involved with him in one-to-one training. The Claimant enjoyed her karate, but felt trapped by the Defendant's behaviour. She did not report any of his inappropriate touching, nor did she feel that she was able to stop going to her karate lessons.
When she was 16, in 2004, the Defendant began to engineer situations whereby he could be on his own with her in outdoor locations, and the sexual contact graduated, after initial attempts to resist penetration when he pressed himself against her when both were unclothed, to full sexual intercourse. At all times, the Claimant made it plain that she was an unwilling partner, and no occasion did she ever initiate sexual contact.
BDA's sexual involvement with the Defendant continued throughout the end of 2004 and into the early middle part of 2005, because she had maintained her interest in karate, and she felt trapped and unable to extricate herself from the situation of physical and sexual intimacy which the Defendant had maintained. On approximately six occasions sexual intercourse occurred and the Claimant would have been 16-17 during this time.
Eventually, after confiding in a friend about what was happening, she summoned the courage to set out in a letter her objection to the way in which the Defendant was using her, which she regarded as abusive, insisting that it should stop. She handed this letter to the Defendant shortly before Christmas 2005, by which time she was now 18 years old.
It seemed to have an effect on the Defendant, because there were no further occasions of sexual contact, although BDA remained in his karate circle for a significant time thereafter.
The above summary is provided as a brief outline of the circumstances in which the sexual abuse occurred. It is unnecessary to go into further detail of the history, but it was not just the abuse itself, but also what happened in the following years which had a role to play in the development of deleterious consequences for the Claimant. However, mention should be made briefly of the progress of the Claimant's education in this period, at a time when she was not reporting the Defendant's behaviour to anyone else.
She did exceptionally well in her GCSEs, obtaining for the most part A*s and As in the summer of 2003, with long term career aspirations towards medicine. However the Defendant's abusive behaviour had become established at this stage and in the following academic year by January, with her AS levels, the Claimant flunked in her first set of exams, and decided to leave the secondary school where she had been studying. She obtained a part-time job, but in September she started at Richmond College, a sixth form college, where she studied the International Baccalaureate (IB), an alternative to A level for university qualification. Whilst she had lost a year, over the following two years, she obtained sufficient marks within the IB to obtain a place at university commencing at St George's University London on a three-year biomedical science degree in October 2006 which she completed with first-class honours in 2009.
According to BDA, she was able to achieve such results through hard work, although concentration had been difficult. She had learned to blank out the events of her teenage years and her involvement with the Defendant, putting it to the back of her mind. She then enrolled in September 2009 on a four-year combined Masters with PhD in biomedical research at Imperial College where she had been awarded a scholarship. She completed her Masters with distinction without difficulty.
However, during her PhD year, and in the early part of 2011, BDA began to use the university counselling services. She had been having significant relationship difficulties at an intimate level, disliking any sort of physical or sexual touch. Her previous sexual relationships had been relatively limited and had been marred by poor experience and mistrust arising out of that fear of touch. One particular relationship, with her then friend and subsequent boyfriend was causing particular anxiety, and seems to have been the catalyst for the use of the counselling service. The counselling led to an acceptance on the part of the Claimant that the abuse by the Defendant should be reported to the police, and in April 2011 there began the long process of criminal investigation, followed by prosecution, in which the Claimant had to play a significant role, through interview, preparation of witness evidence by ABE interview, and willingness to attend trial.
The process led to significant depression and withdrawal, and an inability to complete the PhD course at the time. She was afforded indulgence by her supervisors to allow the prosecution to be finalised, but unfortunately, apparently because of a mistake on the indictment, the initial criminal proceedings floundered on an abuse argument, and the whole process had to be begun again.
During this period, BDA was afforded a further time away from her studies, attending the initial aborted trial, and eventually the final trial which took place in October 2012. However, partly because she had come into contact with the Defendant in the precincts of the court in June 2012, and partly because of the pressure which she now faced having to decide whether to continue with her allegations, the Claimant took an overdose, ingesting over 60 tablets with alcohol. This required treatment as an inpatient for several days.
As far as the criminal procedure was concerned, the Defendant was convicted of one out of four counts with which he was charged, relating to indecent assault committed when the Claimant was 16. Unfortunately, there were no convictions in relation to the post-16 matters. The sentencing remarks made it plain that the Claimant had been unwilling to disclose in her evidence the finer details under examination in court, which may not be particularly surprising in the circumstances, but this meant that insufficient proof was provided. The Defendant received a community sentence.
However, that was not the end of the matter, because the Defendant attempted to appeal his conviction and a further prolonged process was involved, which was not finalised until the dismissal of the appeal in November 2013. This enabled the Claimant to recommence her studies on the PhD course at the beginning of 2014, and it is anticipated that she will complete those studies by the end of the academic year 2016. However she believes that she has lost three years in higher education as a result of the reported abuse, and the consequences in which she was inextricably involved.
I now turn to consider the evidence of psychiatric injury, which is based for the most part on the evidence of Dr Rozewicz the psychiatrist who has provided two reports.
After taking a full history of the description of the sexual abuse as provided by the Claimant, the doctor traced the development of psychological and psychiatric symptoms, noting that clinical depression, in the sense that it was treated with antidepressant medication, was first acknowledged in 2011 after the abuse had been reported to the police. However, BDA had described feeling low and depressed, and unable to concentrate on her studies in previous years. This continued over a two-year period, including in the aftermath of the overdose, when she had been hospitalised. He did not observe any frank signs of depression at the time of his examination in July 2014. (The Claimant informed this court that she had recently been taking antidepressant medication again, as depression returned, probably in anticipation of this hearing).
The doctor did not find any other signs of mental health illness, although the Claimant was a little upset when talking about the abuse. He reviewed the psychiatric and counselling records, particularly those relating to the overdose and the disclosures when a student, as well as the GP records. Dr Rozewicz concluded that there were two elements to the Claimant's psychiatric/psychological injury. The first was a depressive illness at its height for a two-year period following disclosure and during the recovery from the overdose, and whilst currently (or least at the time of his examination in July 2014) not evident, it represented a mental state which was likely to recur in the years ahead. He assessed the probability of recurrence at 20% per year, even on the basis of focused cognitive therapy which he recommended. Of course the recent recurrence of depression as described by BDA to me confirms that prognosis.
The second element was represented by post-traumatic anxiety symptoms. While these do not fit within the psychiatric classification, nevertheless they were severe and tangible, in that she found it difficult to talk about the abuse, became tearful, but most notably was having problems in sexual and intimate relationships, which was having a profound effect on her personal life. There was a prospect of the symptoms improving with trauma focused cognitive behaviour therapy, assessed at 60%.
In terms of causation, Dr Rozewicz had little difficulty in attributing both elements to the abuse which the Claimant had suffered at the hands of the Defendant, noting in particular at the time it had risen the Claimant was at a particularly vulnerable stage in the development of sexual identity and the attitude to sexual relationships (in her mid teens). He believed that the Claimant's intelligence and resilience had led to the symptoms being milder than might have been expected in the circumstances of the extent of the abuse.
Dr Rozewicz provided an assessment of the behaviour therapy which he recommended, and these were included in the costings provided in the schedule of loss. I shall deal with this later.
Findings
Insofar as it is necessary to make any findings on the basis of this evidence relevant to the assessment of damages, I do so as follows on a balance of probabilities.
The Claimant's A-level course was affected by the ongoing abuse which she was suffering at the time, and this led to a disruption in her studies, and a commitment to work, with poor exam results, and her decision to leave school. Accordingly, when she commenced at Richmond College, she had lost a year of her education, and was one year behind her contemporaries for the purposes of starting a career, or going to university.
The tangible depression which she suffered, and which was treated with antidepressant medication, was directly connected with a reasonable decision to report the abuse after counselling. I accept that whilst a recovery was achieved, there is an ongoing liability to recurrence of depression which will remain with the Claimant for the rest of her life.
The psychosexual problems for the Claimant (dislike of physical touching, and difficulties with sexual intimacy) are entirely related to the Defendant's abuse.
It was a reasonable decision on the part of the Claimant, because of the significant effect which the criminal proceedings were having on her, both in terms of her mental state and ability to concentrate, that for the duration she should suspend her Ph.D. research. The consequence has been that instead of completing her course by the end of the academic year 2013, it will not be completed until the end of the academic year 2016. Thus she will be entering the labour market three years later than she might otherwise have expected. In total, she is four years behind her contemporaries.
The Claimant will pursue a career in the bio-chemical or pharmaceutical industry, which would have entitled her to an income of at least £28,000 per annum as a graduate.
Assessment
I now turn to the various heads of damage claimed.
Pain, suffering and loss of amenity (PSLA)
Mr Davison has referred the court, as its starting point, to the JC guidelines for the assessment of general damages, and in particular chapter 4A which sets out various categories for psychiatric damage generally. Listed in the preamble are the factors to be taken into account whichever category is determined as appropriate, because of the broad range given within those categories.
(A) Psychiatric Damage Generally
The factors to be taken into account in valuing claims of this nature are as follows:
(i) the injured person's ability to cope with life and work;
(ii) the effect on the injured person's relationships with family, friends and those with whom he or she comes into contact;
(iii) the extent to which treatment would be successful;
(iv) future vulnerability;
(v) prognosis;
(vi) whether medical help has been sought; Claims relating to sexual and physical abuse usually include a significant aspect of psychiatric or psychological damage. The brackets discussed in this chapter provide a useful starting point in the assessment of general damages in such cases. It should not be forgotten, however, that this aspect of the injury is likely to form only part of the injury for which damages will be awarded. Many cases include physical or sexual abuse and injury. Others have an element of false imprisonment. The fact of an abuse of trust is relevant to the award of damages. A further feature, which distinguishes these cases from most involving psychiatric damage, is that there may have been a long period during which the effects of the abuse were undiagnosed, untreated, unrecognised or even denied. Aggravated damages may be appropriate.
It is not suggested that BDA's tangible psychiatric injury (and in this respect I am referring to both the depressive illness and the psychosexual problems) fall into any other category than "moderately severe". This provides a range as follows. (The second column deals with the 10% uplift which clearly does not apply in this case).
b) Moderately Severe
In these cases there will be significant problems associated with factors (i) to (iv) above but the prognosis will be much more optimistic than in (a) above. While there are awards which support both extremes of this bracket, the majority are somewhere near the middle of the bracket. Cases of work-related stress resulting in a permanent or long-standing disability preventing a return to comparable employment would appear to come within this category. £14,500
to £41,675 £15,950
to £45,840
The question for me is which of the relevant factors should be taken into account, so as to place this case within a particular point within the category and to what extent should a suitable comparators be considered where there has been psychiatric injury following prolonged or a single episode of serious sexual abuse?
Mr Davison has referred to a number of cases as exemplars. One of these is the case of Lawson v Glaves Smith, provided as a Lawtel extract, because it was an otherwise unreported County Court decision. The claimant in that case had been imprisoned for three days by the defendant after attending a fabricated job interview, and subjected to extremely unpleasant and prolonged sexual attack by the defendant, as well as the administration of class A drugs. She had significant ongoing symptoms, which may have amounted formally to a diagnosis of PTSD, but thereafter she made a gradual and slow recovery. The award of quantum in that case was £78,500 (October 2006) which may well have included a significant element of aggravated damages. He also relies upon another short extract of a County Court decision from 2008, that of B v Quirk in the Manchester County Court. It is a case which has a number of similarities with the present situation, although the child was very much younger when the abuse took place (11 years), the assault was particularly serious, taking place over several days, and the diagnosis was one of PTSD. She had continuing problems of sexual aversion at the age of 24 years. The judge awarded £55,000 (now worth approximately £60,000 with inflation). Unfortunately, while the report indicates that aggravated damages were included, from the breakdown they were not given, nor is there a reference made to the applicable category.
These cases are referred to by counsel to support an argument that assessment should come within the upper end of the moderately severe category, although he maintains that an award should be made separately for aggravated damages.
It seems to me that when carrying out an exercise of assessing pain, suffering and loss of amenity, and using the JC guidelines as a reference point, where the tangible consequences in psychiatric terms of a prolonged sexual assault are being considered, aspects such as abuse of trust and the subjective conduct of the perpetrator do not sit comfortably with such a process, being factors relevant to aggravated damages, although in previous reported cases there appears to have been some degree of assimilation. I prefer to approach the assessment on the basis of identifiable features of psychiatric consequence, rather than those other elements, and to make a separate award, if appropriate, for aggravated damages.
I bear in mind that this Claimant was described as particularly resilient, perhaps unexpectedly so, and the clinical depression from which she suffered was over a relatively short period, despite leaving her vulnerable to further episodes of recurrence. In the circumstances, I am not persuaded that an award at the very upper end of the bracket is appropriate, particularly having regard to the fact that a claim has been made for therapies which are likely to have a significantly improving effect in the long run. In my judgment an appropriate figure for this aspect of the claim would be one of £30,000.
Mental Distress
There is no doubt that the Claimant is entitled to an award of damages assessed on a non-pecuniary general basis, for what is known as "injury to feelings" which would otherwise not amount to a tangible psychiatric disorder. Mental distress which falls short of compensable injury otherwise is recognised in a number of situations, and is commonly awarded in the absence of such injury in sexual abuse cases. Quantification is not a straightforward exercise, because there is rarely an independent assessment, and courts are likely to take a wide variety of approaches when considering the subjective element reported by the victim of such abuse. To find suitable comparators, Mr Davison of counsel has referred to harassment and discrimination cases, where the courts are often called upon to make awards without such evidence, instead arriving at their own evaluation based upon subjective account and the nature of the abusive or harassing behaviour. In particular, he drew upon the case of Vento v Chief Constable of West Yorkshire police [2003] ICR 318 CA, in which the Court of Appeal was addressing the type of award which should be made to a female police constable who had been the subject of sexual harassment and bullying over a prolonged period. The award of the tribunal in the sum of £65,000 was considered to be significantly out of line, and substituted with a lower award, broken down into various categories for non-pecuniary loss. In relation to "injury to feelings" the court ordered £18,000, but helpfully provided three separate bands for seriousness, depending upon the length of the discriminatory harassment. The lowest of these (grossed up for inflation) was up to £6000. The middle band, was £6000-£18,000, and the upper band for the most serious cases was £18-£30,000.
It is submitted that this falls into the most serious band. It is also said that assistance can be derived from the assessments by Irwin J in A.B. v Nugent Care Society [2010] EWHC 1005 QB in dealing with historical sexual abuse in children's homes, where a range of general damages awards, without psychiatric injury or aggravated damage ranged from £10,000-£25,000.
I am conscious that in conducting this exercise the court may be appearing to "pluck figures out of the air" with no clear or rational basis for arriving at a final figure. However, relevant in this case are a number of features. First, whilst this abusive relationship was continuing, the Claimant had been unable to confide in anybody, and found herself trapped. She loved her karate and was committed to training, and yet knew that there was no alternative but to find herself in the Defendant's company. Equally, if she backed away, she risked having to reveal the reason, which in her middle and developing teenage years would have had devastating consequences. Furthermore, at a time when she should have been enjoying relationships, and developing in an entirely normal and natural way, she was instead in the thrall of a person who had taken advantage of her, and this would have had a particularly damaging effect. I also take into account (although this may have some relevance on the question of aggravation of damages) the fact that the criminal process would have been a particularly unpleasant ordeal, meaning that she was having to relive the whole experience having put it out of her mind. On the other hand, her intelligence and natural resilience would act as an insulating element from the more damaging mental effects. In the circumstances, it seems to me, that if the Vento categorisation is to be used for assessing injury to feelings (and in my judgment that is appropriate) then the upper end of the second band is applicable. In this regard, the correct award for damages in relation to mental distress/injury to feelings would be one of £16,000.
Aggravated Damages
As indicated, there is an obvious overlap between aggravated damages, which reflect heightened "feelings" and damages for injury to feelings / mental distress and I can detect no hard and fast rule in any of the authorities which establishes a preferred approach. It seems to me that where there is identifiable "heightening" in a particular case, it is sensible and appropriate to make a separate award. It is also important to note that aggravated damages are not punitive, which is the function of an exemplary award, but intended to reflect an additional element or layer which has made the consequence worse and which otherwise would not be compensable in other categories. Nevertheless, the particular additional layer should be referable to the conduct in question.
Here it is suggested that in two respects aggravated damages might be justifiable. First, in respect of the heightened humiliation on having to make the disclosure after the years of abuse, and subsequently when it was kept quiet, because the Claimant was a quiet and private person, and second the manner in which the criminal proceedings were conducted, that is with the maintenance of a defence of consent, attacking the Claimant's credibility in the course of the trial, and later the pursuit of an appeal.
I see no reason why these elements cannot sound as aggravating features and provide additional damages, particularly when they have not been taken into account as factors within the two previous heads of PSLA, and damages for mental distress. I did have regard to the criminal process, when considering the latter, although it is right that it was particularly protracted and far beyond anything which might have been anticipated in this case, because of a failure to pursue the correct charges. Whilst it is correct that this was not the Defendant's "fault" (a point which he made to me in the course of his brief and sensible submissions) nevertheless it has still served to aggravate the Claimant's position. Furthermore, it is appropriate to take into account the fact that the Claimant had endured so many years in silence, partly because of the predicament in which she found herself, as a result of the Defendant's grooming and partly because of her own nature.
In arriving at a figure, I have kept in mind the totality of the heads of non-pecuniary damages which the Claimant will receive, noting that the previous reported cases have usually provided "rolled up" figures. Accordingly, for aggravated damages, which in my judgment are appropriately awarded in this case, I arrive at the figure of £9000.
Totality
The aggregate sum of general damages for PSLA, mental distress and aggravated damages is therefore one of £55,000. If I am wrong in the approach which I have taken in providing a separate award of damages on an aggravated basis, this is a total figure which I would have arrived at on the basis of the two other heads, allowing additional features which have been removed and put into this category.
Pecuniary loss / Loss of earnings
The most significant claim, of course, is for loss of earnings, which has been pursued on behalf of BDA in a sum just under £92,000.I have already made a finding that the Claimant's career was disrupted by four years as a consequence of her psychiatric and psychological injury.
However, if the Claimant is to recover this sum, I must be satisfied, on a balance of probabilities, that it represents a true loss to her, based upon the monies which she would have earned had it not been for the Defendant's wrongful conduct. Where an injured party is already in settled employment, of course, or where there is an inevitable qualification path at the time of the tort, the conventional multiplier/multiplicand approach is appropriate and it is a matter of simple calculation. On the other hand, where, as here, the wrongful conduct occurs at a very early stage in the Claimant's life, and before she has made any life choices, and in particular where the usual vicissitudes of growing up, obtaining independence, moving away from home, and considering opportunities including travel abroad are likely to be relevant, a predicted career path, and thus clear calculation of loss is difficult. The loss of earnings claim in fact straddles past loss and future loss and it is possible, with a degree of certainty, to know the course which the Claimant will now take in the light of the resumption of her postgraduate studies. It is far less certain what she would have done if education had not been interrupted.
For this reason, I favour a broad brush approach to the assessment of loss of earnings, as encouraged in Blamire v South Cumbria Health Authority because of the number of imponderables which do not enable a precise conclusion. The anticipated earnings based upon four years loss is a helpful starting point, but in my judgment such a figure would represent overcompensation after allowances are made for the uncertainties. It seems to me that an appropriate figure, essentially one of general damages for past/future loss of earnings, in all the circumstances would be £75,000.
The additional claim is for what used to be known as Smith v Manchester handicap on the labour market damages, and is represented by the potential risk of the Claimant losing her employment as a result of recurrent depression, or having periods of absence, or further finding it difficult to obtain fresh employment with the stigma of absence through mental health illness. These awards are made far more rarely these days, in the light of the helpful assistance provided in Ogden 6, where actuarial calculations with discount rates can be made for disabled Claimants. The problem for the Claimant is that she is not specifically disabled and will not be regarded as such, and therefore it is not unreasonable to adopt a more traditional approach.
However, I do not believe that the risk to the Claimant in this case is as substantial. I accept that it is significant, but if it arises, in my judgment it is unlikely to lead to long periods of unemployment. I regard the Claimant as a highly resilient and resourceful young woman, as demonstrated by the way in which she has been able to manage her life circumstances, and the abuse which she has suffered to achieve a goal of high academic qualification. Accordingly it would represent overcompensation to approach assessment for this kind of damage using a conventional calculation based upon say two to two and a half years salary. It seems to me that the risk is probably represented by the potential for slightly over one lost year of earnings, or thereabouts, and an appropriate award under this head would be £30,000.
It follows that the total sum which I award for past and future loss of earnings and handicap on the labour market is £105,000.
Whilst there has been no effective challenge of the other items of pecuniary loss pursued by the Claimant, both in terms of past and future claims, these must still be proved. However, it seems to me that there is sufficient evidence to establish on a balance of probabilities the incurrence of expense for the major item of past treatment in respect of medical therapies, and on the basis of the unchallenged evidence of the psychiatrist the future cost of such therapies. The other claims relating to travel and prescription charges are very modest indeed, considering the extent to which the Claimant is availing herself of treatment, and will be in the future.
In these circumstances, I award the sums as claimed by BDA in the schedule of loss as follows
Past treatment £1550
Travel £100
Prescription costs £50
Interest £773
Future medical treatment £9600
Future travel £480
Total £12553
I invite the parties to agree any corrections and the terms of any final order, or to make necessary suggestions prior to the handing down of this judgment.
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MR. JUSTICE WARBY:
This is an application for pre-trial directions in a claim for libel. The parties have agreed, in my view rightly, that there should be a trial of the preliminary issue of whether the publications referred to in the Particulars of Claim have caused or are likely to cause serious financial loss to the claimants pursuant to s.1(2) of the Defamation Act 2013. That is an approach which accords with what I said in Ames v The Spamhaus Project Ltd [2015] EWHC 127 (QB), [2015] 1 WLR 3409 and Lachaux v Independent Print Ltd [2015] EWHC 2242 (QB), [2015] EMLR 28.
The issues in dispute today are two. First, the claimants seek and the defendant resists an order for the defendant to clarify or provide further information about his case on the issue whether the defendant's statements complained of are defamatory and satisfy s.1(2). Secondly, the claimants seek an order that their application to strike out the defendant's counterclaim should be listed for hearing at the same time as the preliminary issue trial unless the defendant discontinues the claim and pays the claimants' costs.
The claim is brought by three energy companies against an individual, Mr. Scrivener, in respect of five posts published on two publicly acceptable discussion boards. The two discussion boards concerned are the Complaints Board web forum and the Money Saving Expert web forum. The defendant's posts were part of a thread on the Complaints Board forum headed "BES and commercial energy - missold energy contract and prices". The first of the five posts was published also in a thread on the Money Saving Expert forum entitled "Meter Registration Service??!!!" The posts were first published on dates between September 2014 and February 2015 and all remain online.
The claim was issued on 3rd March 2015. It is not necessary for the purposes of this judgment to set out in full the meanings attributed to the words complained of by the claimants. It is enough to say that the stings complained include using fraudulent and oppressive means to secure contracts with customers or apparent contracts with them, tampering with evidence relevant to those issues, extensive deliberate disregard of the claimants' energy suppliers' licences and various other forms of deception and dishonesty. It is accepted for present purposes by the defendant that the posts contain allegations of ripping off and scamming consumers.
A common law proof that the statements complained of did indeed convey stings to that effect would have been enough to establish liability, subject to any defence that the defendant might raise. The meanings all have a defamatory tendency according to the common law test, and that is not in dispute. But all these publications took place after the Defamation Act 2013 came into effect, raising the threshold of seriousness that a statement must cross in order to be actionable.
Section 1 of the 2013 Act lays down the serious harm requirement. Section 1(1) provides that:
"A statement is not defamatory unless its publication is caused or is likely to cause serious harm to the reputation of the claimant."
Section 1(2) provides that:
"For the purposes of this section, harm to the reputation of a body that trades for profit is not 'serious harm' unless it has caused or is likely to cause the body serious financial loss."
The claimants are all bodies that trade for profit, so both s.1(1) and (2) are applicable in this case. Accordingly, the Particulars of Claim allege, as they must nowadays, that the requirements of s.1 are satisfied.
Paragraph 15 of the Particulars of Claim alleges that the publication of the words complained of "has caused and/or is likely to cause serious harm to the trading reputation" of each of the claimants and it is pleaded at para.16.8 that the publication by the defendant of each of the said statements is:
" . . . inherently likely:
(i) to have caused and, for as long as it continues to be published, to continue to cause serious harm to the reputation of the Claimant to which the statement in question refers; and
(ii) at the time it was first published and, for as long as it continues to be published, to cause the Claimant to which the statement in question refers serious financial loss."
Particulars in support of those allegations are given in paras.16.1 to 16.7.
On 30th June the defendant, who was then acting as a litigant in person, served a defence of counterclaim. The defence raises five main issues: meaning, truth, honest opinion, public interest and, finally, whether the publication of the words complained of has caused or is likely to cause serious harm to the claimants' reputations or serious financial loss so as to satisfy s.1(2).
Since 9th September 2015 Mr. Price QC and his firm (DPSA) have represented the defendant. The day after notifying the claimants' solicitors Fieldfisher Waterhouse that they were acting for the defendant, DPSA wrote proposing a preliminary file on meaning and serious harm. Later the issue was narrowed by agreement to a trial on serious harm. This is clearly appropriate. No doubt if this matter was to go to a full trial the defence would be repleaded by Mr. Price, as he has made clear in correspondence. Nonetheless it is tolerably clear from reading the fairly lengthy defence as it stands that it is likely that substantive defences would be raised that would require reasonably extensive investigation and consideration of a number of factual issues and possibly matters of law. In contrast, the question of whether an publication satisfies the serious harm requirement is one that usually should require only a relatively narrowly confined enquiry and that is one reason why, in cases where substantive defences are pleaded, it is often convenient to provide for a preliminary issue trial, as has been agreed in this case.
Where it is clear that serious issues are likely to arise as to whether the serious harm requirement has been satisfied, it may be appropriate to order such a preliminary trial before the expense of preparing and serving a substantive defence has occurred, as took place in Lachaux. That course of action may have other advantages, such as preserving a defendant's ability to make an offer of amends (see Lachaux para.168). That said, each case depends on its own facts, and the present case is one in which a defence has been pleaded at considerable length by a litigant in person prior to the instruction of lawyers. I take those particular circumstances into account in reaching my conclusions in this case.
The first issue is whether the defendant should be ordered to provide further information. The defendant accepts for the purposes of the preliminary issue trial that the words complained of bear the meanings complained of by the claimants. The defendant also accepts for the purposes of that trial that if the claimants establish their case under s.1(2) of the 2013 Act, that is sufficient to satisfy the requirement under s.1(1).
(I pause to observe that that is an assumption which the court is invited to make in this case and which I accept the court should make in this case. It is not been conceded, and I am certainly not deciding, that a publication which causes serious financial loss is always on that account to be treated as having caused serious harm to reputation. In that context, it is of some relevance to note that in the background in this case is a potential claim for malicious falsehood. My attention has been drawn to a letter written on behalf of the claimants on 22nd September 2015 drawing the attention of DPSA to the fact that on 18th September the claimant's solicitors took the precaution of issuing proceedings against the defendant for malicious falsehood. They explained that they had done so "given in particular the legal uncertainties to which s.1 of the Defamation Act 2013 is currently giving rise.")
However that may be, the effect of the position adopted by the defendant is that in practice the preliminary trial in this case will be concerned only with the question of whether the requirements of s.1(2) have been met. Those requirements can be met in more than one way. The publication may be shown to have caused serious financial loss, or to be likely to cause such loss, or both. The first limb of s.1(2) would appear potentially to be concerned with loss that has already occurred and a second limb with loss that has not occurred but which is likely to occur in future (cf. Cooke v MGN Ltd).
Here, perhaps a little unhelpfully, the pleaded case for the claimants in para.16.8 of the Particulars of Claim, that I have quoted above, uses the term "likely" in conjunction with an allegation that the publication has caused loss. In context, however, and as Mr. Busuttil made clear in the course of argument, the case of each claimant is that on the balance of probabilities (1) it has suffered actual financial loss which counts as serious within the meaning of s.1(2), and/or alternatively (2) it is likely or probable that it will suffer serious financial loss in the future, as a consequence of the publications complained of.
The defendant pleaded his case that there was no serious harm to reputation and no serious financial loss in his defence and in particular in paras.7 and 8, but on and since 10th September 2015 DPSA have set out in correspondence the position that the defendant now adopts on that issue. In a letter of 10th September it was made clear that it would be submitted that the claimant's pleaded case, which is an inferential one, failed to disclose any proper basis for satisfying s.1(2). In a letter of 21st September this was elaborated upon and legal submissions to be advanced were set out, as followsw.
"4.1 The claimant must prove (a) that serious harm has been caused at the date of the determination or (b) that it is more probable than not that it will be caused after the date of the determination. It is insufficient to allege that such harm is inherently likely.
4.2. In the case of a trading corporation this requires proof that (a) serious financial loss has been caused at the date of the determination or (b) that it is more probable than not that it will be caused after the date of the determination. This requires an identifiable financial loss to be alleged and proved, not merely a general assertion that it is likely that some people will have been put off doing business with the claimant."
In Schedule A, supplied with the letter of 21st September, DPSA set out the defendant's case in response to the factual allegations in para.16 of the Particulars of Claim. The basic method adopted was to break the claimants' pleaded case down into its 23 individual sentences and to plead in response to each sentence an admission, denial or non-admission, together with a few further averments such as an averment of irrelevance.
In a Schedule B supplied under cover of a letter dated 28th September DPSA set out what were described as "relevant factual allegations advanced by the defendant on serious financial loss". These are the allegations that the defendant seeks to prove. There are 24 paragraphs of them. They fall into three broad groups. The first group is concerned with the Complaints Board web forum, the second with the Money Saving Expert web forum and the third addresses the claimants' case that the posts complained of are responsible for the prominence of negative search results in Google searches on the claimants' name or search terms relating to them.
The character of the facts alleged in relation to the Complaints Board web forum can be gauged from the first few paragraphs. Paragraph 1of Schedule B alleges that the Complaints Board web forum thread that featured the posts complained of was commenced on 25th July 2012 by a named user with a post, the terms of which are set out. Schedule B goes on:
"2. The Complaints Board thread contains 14 web pages of comments that follow on from the original posting referred to above by (the named poster). This equates to approximately 250 posts by around 85 users with around 18 posts displayed on each page.
3. Save for a small number of posts the Complaints Board thread contains predominantly negative comments of a similar kind from individuals who have had dealings with BES."
The second group of factual allegations relating to the Money Saving Expert web forum is of a similar character.
In correspondence complaint has been made that the defendant's position lacks clarity. The response on behalf of the defendant is that it is sufficiently clearly set out.
It is paras.1 to 19 of Schedule B that have been the focus of Mr. Busuttil complaints in argument today. It is in these paragraphs that DPSA deal with the content of the two forum threads. Paragraphs 20 to 24 of Schedule B deal with the claimant's case on the Google searches, and it is accepted that the defendant's case is sufficiently clearly set out in that respect in those paragraphs.
On 29th September the claimants' solicitors, Field Fisher Waterhouse wrote at para.4.2.1:
"Regarding paragraphs 1 to 19 of Schedule B, having regard to Warby J's reasoning and ruling in paragraph [69]- [87], [154], [158]-[159] and [190(i)] of his judgment in Lachaux, we fail to understand the relevance in fact or law and/or the admissibility of these allegations to any issue that falls to be decided under s.1 of the Defamation Act 2013. We should therefore be obliged to receive a clear account of your client's case on this point."
The complaint was, therefore, about a lack of clarity as to the relevance and/or admissibility of the facts alleged. The response from DPSA to what was said in para.4.2.1 of the letter of 29th September was, so far as relevant, this on 1st October 2015:
"2. Assuming a corporate claimant can succeed on section 1 without identifying any specific financial loss, the matters set out in Schedule B are probative of whether each of the specific publications complained of have caused financial loss to your clients and whether it can be properly characterised as serious.
3. The issue in Lachaux and Dingle was causation in the context of injury to an individual's reputation, not serious financial loss. Alternatively, with respect to Warby J, he was wrong."
Mr. Busuttil submits that the defendant has provided scant useful information on the nature of its case and that it would further the overriding objective for the defendant to give a proper explanation of the matter at this stage. The application is for an order originally framed in the following terms, that by a stated date:
" . . . pursuant to CPR 18.1 the defendant provides to the claimants (by way of clarification of or additional information in relation to his case comprised in Schedules A and B . . . a clear account of the precise nature of the defendant's challenge to the claimants' case on serious harm/serious financial loss under s.1 Defamation Act 2013, stating the legal and factual basis of that challenge."
Mr. Busuttil submits that the claimants should not be expected to deal with matters on a speculative and hypothetical basis, particularly when the parties and the court are still in "relatively uncharted territory" so far as the requirements of s.1 of the Defamation Act are concerned.
Mr. Busuttil has made clear that his concern is to avoid what he calls "mission creep" and, with some justification, he points out that now that the practice indicated in Lachaux will often be for issues of this kind to be tried before a defence has been served, the question arises of how the court should ensure that the issues are properly crystallised in the absence of formal pleadings. In Lachaux defences had been served by two of the three defendants involved in the litigation, verified by statements of truth. To ensure clarity, directions were given by Nicola Davies J that the third of the defendants should serve a statement specifying any respects in which its position on the issues for trial differed from that of the other two: [2015] EWHC 915 (QB).
Mr. Busuttil submits that if there had been no defences at the time that Nicola Davies J was dealing with Lachaux she would doubtless have ordered the service of statements of case limited to the issue of serious harm. Mr. Busuttil therefore submits that an issue of general significance arises on this application, as to the procedural methods that should be adopted to crystallise the issues in advance of a preliminary trial on serious harm. In general, he has submitted, there should be a pleading verified by a statement of truth.
Mr. Price accepts that the powers conferred by part 18 of the CPR are wide enough to allow the court to make an order of the general nature of the one that is sought. He submits, however, that the necessity test should be strictly applied; that the order sought is too general in its formulation to be useful; and that satellite litigation is to be avoided generally and specifically in relation to issues under s.1 of the Act. In response Mr. Busuttil makes clear that he is not in the present case so much concerned with formality as substance. What he invites me to do is to take the view that he has not been given enough clarity as yet and that in some form the defendant should be ordered to provide further clarity.
I accept the submission of Mr. Price that it is undesirable for satellite litigation to be generated over matters such as this. Of course, a preliminary issue trial is still a trial, and needs to be properly prepared. Fairness and efficiency may require a directions hearing such as this if a party, be it the claimant or the defendant, fails in a serious way to disclose with clarity the case to be advanced. I agree with Mr. Busuttil that it is highly undesirable for the parties to arrive at trial with any significant degree of uncertainty about the nature of the case they are to meet factually and legally. But at the same time the parties and the court should be wary of engaging in skirmishes on procedural issues before a preliminary trial.
I can see the desirability in general terms of directions being given for issues as to serious harm to be pleaded in formal documents verified by statements of truth even if a formal defence is not to be served, but I do not consider that this is an appropriate case in which to attempt to lay down any general rules or guidance, given its particular circumstances. The critical aspects of the matter in this case from the claimants' perspective are two. First, to ensure that they are not ambushed by evidence of fact which they could not reasonably have foreseen. Secondly, not to miss an opportunity to advance factual evidence in response by being kept in ignorance of some legal submission which might have made additional factual material relevant. I do not see either of those as significant risks at present.
There does not seem to me to be any real ambiguity or lack of clarity about the factual case that the defendant is seeking to advance, and none is suggested. The factual propositions in Schedule B, paras.1 to 18, are clear enough. I suspect that many of them will be agreed. The draft directions which the parties have agreed provide for the claimants to respond by way of a counter-schedule stating ,whether they admit, do not admit or deny those propositions and, if they deny them, why.
The defendant's legal case is essentially as set out in DPSA's letter of 1st October 2015. Mr. Price has made clear in the course of argument that the defendant's case on this issue is as set out in correspondence and that the defendant will not be relying at the trial on anything said in the defence on this issue - except to the extent that it is consistent and in line with what has been set out in correspondence. The terms of the letter of 29th September make clear that the claimants' legal team consider the factual propositions to be relied on are legally irrelevant, but tend to undermine the complaint of lack of clarity. I consider the position adopted is clear enough.
The precise nature of the defendant's case in legal terms will inevitably be set out in the skeleton argument for trial, for which the draft order makes provision. As I indicated in the course of argument, it seems to me that if there is any legitimate concern on the claimants' part about being "bounced" by unexpected legal submissions, those concerns can be adequately met by an order that skeleton arguments be exchanged earlier than provided for in the order. The order provides for three days in advance of trial. There is to be some discussion about the timetable but I should have thought five to seven days with a provision for a reply skeleton to be served, if so advised, would meet any such residual concern. That seems to me to be a much more satisfactory solution in the particular circumstances of this case than an order in the general terms sought by the claimants' application notice and I do not consider it appropriate to make that order.
Turning to the second issue, the counterclaim pleaded on 30th June 2015 sought damages for harassment and various other remedies, such as costs due to the charges for unwanted texts received while abroad. On 27th July 2015 Field Fisher Waterhouse issued an application seeking, among other orders, orders striking out the counterclaim and the entry of judgment for the claimants on the counterclaim. When DPSA came on the scene on 10th September they stated: "Our client will not proceed with his counterclaim."
The response is the application made today by Mr. Busuttil on behalf of the claimants for an order that unless the defendant discontinues and agrees to an order that he pay the costs of and occasioned by the counterclaim to be subject to detailed assessment on a standard basis the claimants' strike-out application should be adjourned to the trial of the preliminary issue. Mr. Price resists that application on the basis that it is calculated merely to add to costs and to achieve no useful purpose. He says that the defendant has indicated he will not proceed with the counterclaim and there is no point in proceeding with an application to strike it out. He indicates that if the claimants fail on s.1 the parties may be able to agree costs. He submits that it is arguable that the claimants should have sought a determination of serious harm before requiring the defendant to serve a defence and this should impact on costs.
In my judgment the appropriate course is to give the directions sought by Mr. Busuttil. That will ensure that a formal application of relevance is before the court at an appropriate time, and can be formally disposed of in whatever manner seems to be appropriate at that stage.
The costs of the counterclaim are the real issue. I make quite clear that in making that order I am not in any way encouraging the expenditure of any further resources on the application until after the court's decision on the preliminary issue is known, by which I mean has been circulated in the form of a draft judgment. It is clear that the defendant will not be pursuing the counterclaim and there is absolutely no need for any resources to be devoted to the strike-out application until after the outcome of the preliminary issue trial has become known.
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Mr Justice Cooke:
Introduction
This is Mr Vik's application to set aside or vary the order of Teare J made without notice on 20th July 2015. The order provided for Mr Vik to attend on 28th October 2015 to be examined pursuant to CPR Part 71 in his capacity as an officer of the defendant (SHI) and for him to produce documentation as set out in the order on a date two weeks prior to the hearing, namely 14th October 2015.
The order is challenged on five grounds, each of which, it is suggested, should lead to the order being set aside. Alternatively Mr Vik contends that the order be varied with regard to the timing for compliance with it in the light of proceedings in the USA and in the Court of Appeal here. In the United States there is a trial scheduled in Connecticut for two weeks beginning on 10th November 2015 whilst there is an appeal against the Non-Party Costs Order made against Mr Vik which is scheduled to be heard in the Court of Appeal in this country on 3rd November with an accompanying application for the admission of new evidence.
The five grounds upon which it is contended that the order should be set aside are as follows:
i) the Order is unjustified and exorbitant and Part 71 jurisdiction was not properly engaged because of the absence of any exceptional circumstances.
ii) The Order was sought and obtained for a collateral purpose, namely to obtain documents which have been refused in the Connecticut proceedings and to have a "dry run" at cross-examination of Mr Vik prior to the Connecticut proceedings.
iii) The proposed examination serves no useful purpose.
iv) The documents sought are not properly the subject of an enquiry within CPR Part 71.
v) The Order would not have been made if there had been full and frank disclosure to Teare J.
On 8th November 2013 I found SHI liable to pay DBAG some $243 million following a lengthy trial. I also ordered SHI to pay 85% of DBAG's costs on an indemnity basis and ordered an interim payment on account of £34 million. Subsequently I made a Non-Party Costs Order against Mr Vik personally in respect of those costs on 24th June 2014. I have knowledge of the background to the application made by DBAG for examination of Mr Vik in relation to the assets of SHI, of which he was the sole shareholder and director at the relevant time, because at the time of the trial there was evidence relating to its assets and his attempts to impede the recoverability by DBAG of sums due to it.
I can see nothing in any of the grounds which are put forward which would justify setting aside the order for the reasons which appear hereafter.
The background facts
The key element to many of the disputed issues before me appears to lie in the facts recited at section 33(a) of my judgment of 8th November 2013.
i) I held at paragraph 1435 ff. that Mr Vik had arranged for funds of approximately $896 million to be transferred out of SHI to himself or to companies associated with him or his family. Additionally, shares worth $92 million approximately in Confirmit were transferred to him. Thus nearly $1 billion worth of assets were transferred in the course of a week or so at a time when DBAG was seeking to recover sums owed to it by SHI.
ii) I also held at paragraph 1439 that SHI had given inadequate disclosure of its financial position and that Mr Vik had lied in a disclosure statement and that his explanations for the transfers to which I have already referred were not credible. I found that Mr Vik treated SHI's assets as if they were his own and transferred them in order to render access to them more difficult.
iii) At paragraph 1461 I concluded that all the funds transferred were available to SHI prior to transfer and that Mr Vik, at a moment's notice, could procure the transfer of the funds back to SHI if he chose to do so. I found that there was no good bona fide commercial reason for the transfers (see also paragraph 1464 and paragraphs 66-68 of the Non-Party Costs judgment).
I also declined to grant a stay of execution of the judgment pending any application for permission to appeal on the basis that SHI was in a position to pay the sums awarded because of the funds that were available to it – namely the $896 million transferred at the direction of Mr Vik in October 2008.
When the matter came before the Court of Appeal on an application relating to permission to appeal, Tomlinson LJ said the following at paragraphs 25-26:
"25. … I approach this application on the basis that, as the judge himself put it at paragraph 1455 of his judgment, the transfers out of SHI were done both with a view to depleting SHI's assets and with a view to making it more difficult for DB to seek recovery, should it need to do so. In short, SHI has sought to dissipate its assets in order to avoid paying a judgment which it knew DB would have to seek. There was, as the judge found, "a strong element of impropriety in making those transfers".
26. I have already indicated that I accept it as inherent or implicit in the judge's findings that, as at October 2008, SHI had the right to recover its funds. It has not been asserted that the ability to recover the funds has been lost in consequence of subsequent transactions in the ordinary course of business. It follows that if circumstances have changed such that SHI no longer has the right to recover its funds, that can only be because it has carried out further acts of impropriety with a view to avoidance of payment of the judgment which it anticipated would be rendered against it. I can give little weight to VBI's protestation that "under no circumstances will it return money transferred to it by SHI." Beatrice has not replied directly to SHI's letter of 24 January 2014 quoted above. It has however made clear in litigation in New York that it opposes return of the funds. That is hardly surprising."
He went on to say at paragraph 36 that:
"It is right to point out that Mr Vik gave no guarantee for the liabilities of SHI to DB, and that is a point which he is entitled to stress and does stress. However there is no evidence to suggest that Mr Vik is not still the sole owner and director of SHI as he was in 2008. SHI apparently observed no corporate formalities. Given the judge's findings as to the manner in which Mr Vik treated SHI and its assets as his own, it is difficult to think that there can be a more appropriate case in which to take into account that he could, if minded to do so, pay the judgment debt. However, it is not in my judgment necessary to go that far. On the basis on which I approach the case SHI could itself pay the judgment debt into court if Mr Vik chose to procure it to do so. That does not involve Mr Vik funding SHI or paying the judgment debt on its behalf. It involves Mr Vik taking steps to restore to SHI what are rightfully its assets."
Additionally, as appears from other evidence, including the tenth and twelfth witness statements of Mr Hart:
i) SHI disposed of interests in various private equity investments between December 2008 and April 2011 but nothing is known as to the consideration received for such disposals or the whereabouts of such receipts.
ii) SHI claims to have disposed of all its remaining assets pursuant to a Sale Agreement "as of 26th September 2012" which had, as I said in the Non-Party Costs judgment, a number of unusual features and did not specify the assets sold. The identity of the purchaser was not disclosed and the documents gave rise to justified suspicions on the part of DBAG.
The whole history of the proceedings against SHI, Mr Vik's creature company, as set out in the previous judgments I have given, reveals attempts by Mr Vik and Mr Johansson to avoid liability, to deceive the court and to conceal the true state of SHI's financial affairs.
There is thus, as DBAG submits, on my findings and those of the Court of Appeal, a basis for saying that SHI has assets which could be used to satisfy the judgment against it, although the location of any such assets is currently unknown. These are the very circumstances for which CPR 71.2 was designed.
I should add that, following the service of the order made by Teare J under CPR 71 on Mr Vik on 21st July, the evidence from his current solicitor is that on 28th July 2015 he sold his shares in SHI to a company called Rand AS and ceased to a director the same day. Rand AS had been a director since 2nd April 2015. From other evidence before the Court it appears that Rand AS was controlled by Hans Eirik Olav, a friend and business associate of Mr Vik who was until June 2015 the chairman of Confirmit and who also had been an officer of other companies associated with Mr Vik. No details of this disposal of the shares have been given by Mr Vik but in a witness statement adduced for the purposes of the Non-Party Costs Order appeal, Mr Vik stated on 23rd September that Mr Olav had fallen ill and resigned from Rand AS and that he, Mr Vik had no current association with Rand AS or Mr Olav. Mr Vik said that he now has no control over SHI's documents.
DBAG contends that Mr Vik's conduct is all of a piece and that these actions are all intended to impede enforcement of the judgment against SHI. It is hard to come to any other conclusion.
The US proceedings
I should mention at this stage the proceedings in the USA in New York and Connecticut. The details of these proceedings were set out in Mr Hart's tenth witness statement which was put before Teare J who made the ex parte order under CPR 71.2. Putting to one side SHI's 2008 proceedings in New York where a decision is awaited on DBAG's motion for summary judgment on the basis of res judicata, there remain the 2013 New York proceedings and 2013 Connecticut proceedings commenced by DBAG against (inter alia) Mr Vik and SHI. These proceedings were commenced following the handing down of my judgment on liability against SHI on 8th November 2013. In them DBAG seeks to recover sums due to it under that judgment on the basis that Mr Vik is or was the alter ego of SHI, Beatrice and VBI (the recipients of some of the October 2008 transfers) whilst also claiming that various transfers from SHI to recipients were fraudulent and made with a view to evading liability to DBAG.
DBAG's requests for disclosure by SHI in the New York proceedings in relation to SHI's financial position have so far been refused. In the Connecticut proceedings, some disclosure has been ordered in as much as it relates to the issues before the court but other requests relating to the assets of SHI have been refused. I take it that refusal is likely to have been based on the conclusion that such documents are not relevant to those issues. Though detailed reasons for the refusal have not been given it is fair to assume that the Connecticut court did not consider the disclosure sought as necessary for the purpose of determining the central issues before it relating to the alter ego argument.
The documents sought
Whilst it is clear that there is a significant overlap in the documents sought under CPR 71 and those sought or ordered in the United States, there is an obvious conceptual difference between the issues which arise in the different proceedings. Those sought here relate to the assets and finances of SHI, namely its means to pay the judgment debt, whilst the documents sought in Connecticut and New York relate to the alter ego issue which, whilst not limited simply to the funds passing between Mr Vik's "creature companies" do not necessarily encompass all the financial assets of SHI – in particular sums received by SHI on disposal of its assets.
A recurring theme in Mr Vik's arguments before this court was that historic transfers of assets have no bearing on SHI's current available means to meet the English judgment and that therefore documents relating past assets and questioning thereon are irrelevant. It was said that DBAG had failed to identify any cause of action by which it could make recovery of assets which had been transferred and that any remedy in respect of fraudulent transfers, transfers at an undervalue or fraudulent preference was only open to a liquidator of SHI. It was pointed out that DBAG had not taken any steps to put SHI into liquidation in the Turks and Caicos Islands where it is incorporated nor in any other jurisdictions.
The basis of this argument is ill-founded. What DBAG says is that the assets transferred remained SHI's assets, relying on findings made by the English Courts in this respect. It says that it is entitled to question SHI's officers about the whereabouts of such assets and to see documents which relate to that. The past history of assets which have been transferred but which remain SHI's assets is therefore highly material in ascertaining the location of such assets now as they constitute the means by which the judgment debt could be satisfied. Moreover, it is clear that any claim which SHI might have to the return of funds could constitute a chose in action and thus, in itself, an asset of SHI. Moreover, not only are the judgment debtor's means a relevant consideration but so also is "any other matter about which information is needed" in order to enforce the judgment or order, as set out in CPR 71.
In Mubarik v Mubarak [2002] EWHC 2171 (Fam), Hughes J, as he then was, stated that a predecessor to Part 71 did not "authorise a freestanding process of specific discovery". He stated that the oral examination was a process of considerable potential utility to a judgment creditor in a case where the judgment debtor was deliberately evading his obligation to pay. The obligation on the judgment debtor to procure books or documents was necessarily ancillary to the process of examination and not independent of it but that it was an important and often vital part of the process and a significant tool in the enforcement of the court's order in relation to which, ex hypothesi, the judgment debtor was in default. The documents specified for production had however to be relevant to the questions to which the examination was directed, which, for the purposes of CPR Part 71 are those which I have set out above.
CPR 71.2
I turn to the terms of CPR 71.2 which provides that a judgment creditor may apply for an order requiring an officer of a corporation which is a judgment debtor to attend court to provide information about:
"(i) the judgment debtor's means; or
(ii) any other matter about which information is needed to enforce a judgment or order."
The rule provides that an order may be made for an officer of the judgment debtor to attend the court to provide information about its means or any other matter about which information is needed to enforce a judgment or order. It is self-evident that, for such an order to be made, the applicant does not need to be aware of the extent or location of the judgment debtor's assets since this is the purpose of the enquiry. Mr Vik contends that DBAG knows that SHI has no assets in this jurisdiction and no assets anywhere in the world that are capable of satisfying the judgment and that, for this reason, no enforcement proceedings have been taken against SHI in this country or the USA. This is also why SHI has not been put into liquidation in its country of incorporation or centre of operations, namely the Turks and Caicos Islands. In saying this, SHI relies on various statements made by DBAG at different stages in the proceedings where it is said that SHI had no apparent assets but this cannot assist SHI in the circumstances which I have already outlined regarding the various transfers of assets made by SHI on Mr Vik's instructions both in October 2008 and subsequently. DBAG should be able to ask questions about any matter which will assist it in enforcing the English judgment by any means available to it and SHI's past history of asset transfers is clearly material in that regard.
I was taken to a series of authorities upon which SHI relied in advancing the proposition that an order could only be made on a non-resident foreigner under CPR Part 71 if there were exceptional circumstances. That is not a phrase which appears in Part 71 at all but it was said that, because of the territorial nature of Part 71, there was either no jurisdiction to make an order against an individual who was only fleetingly present in the jurisdiction when served or that such jurisdiction should only be exercised exceptionally. It is no doubt true that the nationality and residence of the company and officer are relevant to the exercise of discretion but I did not find anything in the authorities which justified the proposition as put. In any event, I am entirely satisfied that this is an appropriate case for the exercise of the court's jurisdiction and that it is sufficiently "exceptional", should there be any such requirement.
The essential point made on SHI's behalf was that Mr Vik was not resident or domiciled in the jurisdiction. On 20th July at the time when the application was issued and 21st July when the order upon was served, he was in the country for a very limited time in order to attend the offices of DBAG's solicitors in order for him to be deposed as part of the process for providing evidence in the Connecticut proceedings. The order was therefore made against a non-resident requiring him to produce documents belonging to a Turks and Caicos company of which he was the sole shareholder and one of the co-directors at a time when the documents, wherever they might be, were not themselves within the jurisdiction. This was said to be the exercise of an exorbitant jurisdiction.
It was in this connection that reliance was placed on the decision of the Court of Appeal in Kuwait Airways Corporation v Iraq Airways Co & anor [2010] EWCA Civ 741 and in particular to paragraphs 10-12 in the judgment of Rix LJ. The Court was there concerned about the exercise of the Bayer v Winter jurisdiction relating to disclosure supported by a restraint order and passport order made against the Director General of the respondent company. Rix LJ referred to the reasoning of the first instance judge and a passage in Phipson on Evidence at paragraph 8.32 which acknowledged the possibility of a witness summons against persons temporarily within the jurisdiction but which also emphasised the limitations upon that possibility and the need to have regard to the provisions of CPR Part 71 in the context of the application being made. Reference was made to the court not exercising unusual or exorbitant jurisdiction unless it was necessary. At paragraph 34 the Lord Justice referred to the fact that CPR 71 is not available against respondents out of the jurisdiction and was essentially a domestic aid to execution. The Court of Appeal nonetheless was prepared to make the unusual order involving the surrender of a passport by a foreign national present in this jurisdiction and to restrain his leaving the jurisdiction for a limited time and the use of the tipstaff to enforce those parts of the order. That was the unusual or exorbitant form of order to which reference was made.
In MacKinnon v Donaldson, Lufkin and Jenrette Securities Corporation [1986] 1 Ch 482, an order sought under section 7 of the Bankers' Books Evidence Act 1879 against a foreign bank which was not a party to the action was compared with a subpoena and it was said by Hoffmann J (as he then was) that in principle and on authority a court should not, save in exceptional circumstances, require the production by a non-party foreign bank of documents outside the jurisdiction concerning business which it has transacted outside that jurisdiction. The principle was stated to be that "a state should refrain from demanding obedience to its sovereign authority by foreigners in respect of their conduct outside the jurisdiction" (page 493 at G). At page 499A-F – the judge decided that the case was not an exceptional case justifying the making of an exorbitant order and that, where alternative legitimate procedures were available (by a letter of request or an application to a foreign court) "an infringement of sovereignty can seldom be justified except perhaps on the grounds of urgent necessity".
In Phipson On Evidence (18th edition) at paragraph 8-32, the authors state:
"Other than in exceptional circumstances, the court should not require a non-resident who is not party to the proceedings but who happens to have been served during a temporary visit to the United Kingdom to produce documents held outside the jurisdiction relating to business conducted outside the jurisdiction because the summons would be an infringement of local sovereignty."
This therefore summarises Hoffmann J's decision but the authors go on to state that although the provisions for examination of the officers of a judgment debtor do not apply to persons resident abroad, this does not prevent an order being made against an officer who is temporarily within the jurisdiction though, in such a case, care should be exercised before exercising such a jurisdiction against a foreigner. In this connection reliance was placed by the authors on the decision of the House of Lords in Masri v Consolidated Contractors International (UK) Ltd [2010] 1 AC 90. At paragraphs 23-26 Lord Mance, with whom the other Law Lords agreed held that CPR Part 71 could not apply to company officers outside the jurisdiction but said nothing at all about the situation where a non-resident was served within the jurisdiction.
I accept that care must be taken in making an order of this kind particularly if there are alternative means available to a judgment creditor to obtain the relief sought but the relief sought here is not extravagant or exorbitant in the sense of the MacKinnon and Kuwait Airways cases and Mr Vik is not an independent person unconnected to the English litigation and the judgment debt. To the contrary, he was the physical embodiment of SHI at all material times until divesting himself of his interest a week after the CPR Part 71 order was served. Reference should be made to the Non-Party Costs judgment. There is no threshold requirement of "exceptional circumstances" for an application of the kind made here, but Mr Vik's direct connection with SHI and his interest in every element of its financial affairs and procurement of the transfers are exceptional in nature.
I was referred to CIMC Raffles Offshore (Singapore) PTE Ltd v Schahim Holdings SA [2014] EWHC 1742 (Comm) where, after reviewing the authorities to which I have already referred, Field J accepted the submissions of counsel that no order could be made under Part 71 if the individual to be subject to the order was outside the jurisdiction either at the time when the application was made or at the time when the order was made. It was conceded by counsel however that even a fleeting presence within the jurisdiction at the time of the application and the making of the order meant that the court had jurisdiction, a concession which the judge appears to have accepted as correct, as do I.
Here there are strong reasons for exercising the jurisdiction. This is an exceptional case where the officer of the company controlled the company which failed to give proper disclosure of its assets in accordance with court orders in the proceedings, where he told lies to the court about its financial affairs in addition to telling other lies in his evidence relating to the dispute. He, as I found in my earlier judgments, was the physical embodiment of the company and treated its assets as his own. He is an international businessman who travels the world using his Blackberry to communicate. His main office and his residence were in Monaco and as I found in the judgment on liability against SHI, he was in the USA for less than 60 days a year at the relevant time. According to his recent deposition evidence in the US proceedings, the amount of time spent in Connecticut in recent years has been much less than this and, this year has been for about a fortnight. He no longer has a desk on Ashton Drive.
DBAG has "exported" the English judgment against SHI on liability by "domesticating" it in New York and Connecticut so that it falls to be recognised there. Nonetheless, the evidence of Mr Zaroff is that, although there are equivalent procedures to those under CPR 71 in both New York and Connecticut, which DBAG has not sought to utilise, in his opinion it is unlikely that the courts in either of those jurisdictions would permit their procedures to be used to obtain the information/documentation that DBAG seeks. DBAG has served Post Judgment Interrogatories on SHI and Mr Vik in the Connecticut proceedings which require them to provide information about the assets of SHI but both SHI and Mr Vik filed objections to the provision of such information and none has been given as yet.
The position is therefore that CPR Part 71 provides this court with jurisdiction in relation to the judgment which it has given whilst neither of the courts in the USA would, on the evidence, be likely to grant the relief that is being sought here. Mr Vik's presence or association with this country may be considered as fleeting but his presence in or association with New York and Connecticut is hardly significant and this factor is outweighed by the unlikelihood of either of those courts granting the leave sought. If it is just and appropriate for this court to grant such relief, it should do so in the particular circumstances of this case. There is nothing arguably oppressive or irregular in DBAG's seeking to pursue alternative and parallel routes to possible recovery of the sums awarded by this court in November 2013 and this court should aid enforcement of its orders if it can properly do so.
Examination under CPR 71 is intended to be a summary and straightforward process allowing the judgment creditor to obtain information from the judgment debtor for the purpose of being better able to decide which method or methods of enforcement to use, whether sequentially or simultaneously (CPR 71.0.01 and 71.1.1). Various methods of enforcement are available as listed at CPR 70.2.1 including the making of a charging order or the appointment of a receiver over assets which are identified in the examination of a judgment debtor or the officer of a corporation which is a judgment debtor. Any order is, by definition, intended to assist in establishing the extent and whereabouts of the judgment debtor's current means to pay the judgment debt and, as decided by a two judge Court of Appeal in Interpool Ltd v Galani [1988] 1 QB 738, a judgment debtor or its officer can be questioned about assets outside the jurisdiction in respect of debts incurred inside or outside the jurisdiction. The officer may also be ordered to provide relevant documents if they relate to the property or other means of paying what the judgment debtor owes.
Collateral purpose
The evidence of Mr Hart in his tenth and twelfth witness statements is to the effect that, because DBAG has not obtained the information and documentation it needs fully to understand SHI's assets and financial position and has therefore been unable to enforce the Judgment Debt against SHI, it wishes to cross-examine Mr Vik about SHI's assets and financial position and for that purpose to obtain relevant documents. It was contended on behalf of Mr Vik that DBAG had a collateral purpose in seeking the documents and examining Mr Vik, namely to obtain documents of which disclosure had been refused in Connecticut and then to use them for the purpose of those proceedings in the context of the substantive alter ego issues. It also was seeking to have a dry run at cross-examining Mr Vik prior to the trial in Connecticut. It was said that the date of 28th October had specifically been fixed with this in mind. This was in fact the only basis for the inference that I was invited to draw by counsel for Mr Vik but, to my mind, the point is without substance and goes nowhere. Mr Vik has been deposed on a number of occasions, apart from giving evidence in the English proceedings. A further "dry run" is probably neither here nor there in the overall context of the different answers he has already given about SHI's assets. Furthermore, if documents are produced in relation to SHI's assets which are relevant to the issues in the proceedings in Connecticut, then no doubt they can be admitted by the court there if it so decides whilst it would doubtless refuse to allow cross-examination on irrelevant documents or to allow their admission into evidence as such. (See also my comments in paragraph 32 above).
It was further suggested that the object of the fixing of the date was to create maximum disruption to Mr Vik and his legal team.
In Mr Hart's tenth witness statement and the skeleton argument put before Teare J, reference was made to the scheduled trial in Connecticut and the Non-Party Costs appeal in England due to be heard in November. The date of 28th October was, according to his twelfth witness statement, selected on the basis of the availability of the court and DBAG's counsel team as a date prior to the hearing of Mr Vik's appeal on the Non-Party Costs Order. It is now said that Mr Vik is more likely to comply with an order under Part 71 in circumstances in which he has a live appeal which is being pursued in the Court of Appeal. I do not see any grounds for disbelieving this evidence.
No useful purpose
This argument appears to rest upon the proposition that DBAG knows that SHI has no assets within the jurisdiction nor any elsewhere in the world which could satisfy the judgment debt. For the reasons I have already given, DBAG has strong grounds for saying that there are assets of SHI, the location of which is unknown.
Insofar as it is alleged that identical requests have been made for documents for which disclosure has already been granted in Connecticut, SHI has failed to take into account the provision of the order that documents are only to be provided to the extent that they have not already been ordered in one jurisdiction or another. It has been agreed between the parties that documents made available in one jurisdiction can be utilised in another.
The documents sought are not properly the subject of an enquiry within CPR Part 71
This point appears to turn upon the proposition that DBAG is seeking documents relating to past transactions (namely the transfers of funds and assets made by SHI from 2008 onwards) and not to SHI's current assets. For the reasons already given, this overlooks the fact that DBAG's case is that SHI is still the beneficial owner of the assets which it has transferred, quite apart from any assets which it has received as consideration for the disposal of the private equity investments or other assets the subject of the Sale Agreement to the unidentified purchaser.
The bank statements sought in item 1 of the list of requested documents cover the position from 1st January 2008 to date in relation to each of the bank accounts of which DBAG has knowledge, as a result of documents already disclosed, in order to ascertain SHI's current means to pay the judgment debt. In light of SHI's past history, such documents represent an obvious source of information in respect of funds actually held in the name of SHI as well as funds transferred elsewhere to which it may be beneficially entitled. Item 2 relates to the private equity investments set out at paragraphs 7.22 to 7.43 of the report of Elizabeth Gutteridge dated 30th June 2015 and the disposal of those investments and the consideration received. This too relates to potential assets of SHI. The same applies to item 4 which covers other investments or assets held by SHI and documents relating to the disposal of them and consideration received for them. DBAG seeks, in item 6, an unredacted copy of the Sale Agreement together with a detailed schedule of all the assets allegedly sold pursuant to that Agreement. This too may assist DBAG in understanding the current asset position of SHI, including consideration received and any issues of beneficial ownership of assets ostensibly sold.
I was told that items 3 and 5 were the subject of orders by the Connecticut court and no issue arises in relation to them. Insofar as they are not provided pursuant to the Connecticut court order they would fall to be provided under CPR Part 71.
Lack of full and frank disclosure
I need not go into any great detail with regard to this head of argument. It is said in Mr Vik's skeleton argument that Teare J remained in ignorance of the "collateral use" issue, the extent to which DBAG knew and relied on the fact that SHI was assetless, the totality of what was going on in the proceedings in the USA, the lack of explanation for delay in making the application, the relevance of DBAG seeking disclosure of documentation refused in the US proceedings and the reason for such refusal.
I was unable to see that there was any force in this submission at all. The tenth witness statement of Mr Hart set out the basis upon which the application was made over 38 pages and 86 paragraphs. Details of the English proceedings, the New York proceedings and the Connecticut proceedings were set out as was the basis for the application in the light of the findings made by me and by the Court of Appeal in relation to SHI's assets which were transferred for no good commercial reason and the sale of other assets where a consideration received was unidentified.
In explaining the Connecticut proceedings, Mr Hart set out the different basis for disclosure in that jurisdiction as compared with Part 71 in this jurisdiction. The judge was fully aware of DBAG's request for production of documents in Connecticut and the denial of a number of those requests relating to SHI's financial position and the objections raised by Mr Vik and SHI in the discovery process, some of which were upheld.
It was suggested that DBAG ought to have explained the reason why it was seeking a Part 71 order in this country as opposed to seeking some form of similar order on the back of the domesticated judgments in Connecticut or New York. In my judgment DBAG is entitled to pursue enforcement proceedings in the way that it chooses and to seek information to enable it to do so in the manner it considers most effective. Counsel for Mr Vik seemed to argue that DBAG was bound to pursue an application of this kind in Connecticut because of the proceedings there against Mr Vik on the alter ego issue though any post judgment application would have to be based on the domesticated judgment of the English court in that jurisdiction where, as it now appears from Mr Zaroff's evidence, the court would be unlikely to grant the relief sought here. I can see no basis for saying that DBAG should have advanced an explanation for its preference to proceed on the basis of the primary judgment in this country as opposed to the domesticated judgment in Connecticut, absent some overwhelming feature which rendered Connecticut the appropriate location. If service could be effected here, as it was on an occasion when DBAG knew that Mr Vik would be present, it was entitled to take advantage of that opportunity, explaining to the judge the circumstances in which this was to occur, as DBAG duly did.
I consider that there was nothing which fell to be disclosed to Teare J which was not disclosed.
Variation of the order
I can see no basis for variation of the scope of the order in relation to the documents sought, once it is accepted that DBAG has a case, as it has, in relation to SHI's available assets about which it needs to obtain information.
The only two issues which arise relate to the form of the order against Mr Vik and time for compliance with it in relation to documents and the date of examination. Since 28th July 2015, it appears that Mr Vik has not been the director or shareholder of SHI. It is said that he does not have control over SHI's documents, wherever they may be. As to their location, the evidence before me at the trial was that they were in Monaco, in Connecticut and in other branch offices of SHI elsewhere in the world but that most of the material was electronic in format and was held on Mr Vik's Blackberry. Documentation was made available to lawyers in both jurisdictions.
Given the past history of the matter and Mr Vik's obvious attempts to evade compliance with orders for disclosure, it is hard to credit any suggestion that Mr Vik cannot obtain access to any documents that he wishes which belong to SHI regardless of disposal of his interests to Rand AS or Mr Olav's illness. It is open to any person ordered by a court to do something to inform the court of inability to observe an order and to give reasons for doing so but the reality of the matter is that all SHI's financial documents should long since have been disclosed in the period prior to 28th July 2015 and were then undoubtedly in the control of SHI and its director/directors. Resignation from the position of director one week following the service of the Part 71 order and disposal of the shareholding represents a poor excuse for non-compliance with obligations ordered in circumstances where Mr Vik has attempted to put it out of his power to comply with the order. At this stage I can see no basis for interfering with the scope of the order.
Timing
Mr Vik's alternative application was to seek adjournment of the CPR 71 examination until all outstanding proceedings had been concluded, including the American proceedings. The New York enforcement proceedings are, on the evidence, unlikely to come to trial until 2017 and any decision would be subject to an automatic right of appeal. Counsel for Mr Vik recognised that this was an unrealistic application and instead posited an adjournment until December 2015, after the conclusion of the Non-Party Costs appeal and the trial in Connecticut. Six reasons were given in support of the application for such an adjournment.
i) It was said that however much DBAG maintained that it was not its intention to seek information to deploy in the US proceedings, there are no safeguards which would prevent that from occurring. I am wholly unpersuaded by this since the court in Connecticut can control its own proceedings and the use of material in them to ensure that only relevant evidence is adduced and relevant questioning allowed.
ii) There is a real risk that DBAG will obtain an unfair collateral advantage in the US proceedings if it is allowed a dry run cross-examination of Mr Vik on such material. Much the same answer applies here as to the first ground, together with the point that I have already made as to the extent of evidence already given by Mr Vik in England orally and in witness statements and in depositions for the US proceedings.
iii) DBAG has failed to identify any prejudice arising from such a postponement. The prejudice which is put forward by DBAG in fact is the risk that Mr Vik may not comply with the orders made if, by that time, his Non-Party Costs appeal has failed, whereas if it takes place before that, he has an incentive to comply with English court orders.
iv) DBAG has delayed for nearly two years in bringing this application and there can be no urgency about it. If it was seen as having any utility at all, it would have been pursued far earlier. It cannot delay such an application and then complain about an adjournment. It is right to say that the delay which has occurred so far demonstrates a lack of urgency, albeit that service of Mr Vik in this jurisdiction was required and there is no evidence that he could have been served any earlier than he was.
v) The US proceedings may render the whole exercise otiose because the October 2008 transfers and the private equity transfers will be scrutinised with full cross-examination. If DBAG succeeds in the US then Mr Vik will be personally liable for the sums in dispute and DBAG would no longer have any interest in pursuing SHI as opposed to Mr Vik for recovery of sums awarded. As I have already said, DBAG is entitled to pursue alternative remedies against SHI and Mr Vik and to seek enforcement in parallel proceedings but it is true to say that success in one jurisdiction might obviate the need for the pursuit of alternative remedies elsewhere. The timing of these matters is however wholly uncertain, particularly given the possibility of appeals in the USA. Moreover, if DBAG does not succeed in the USA, it will have been held up in pursuing its application here.
vi) Maximum disruption will be caused to Mr Vik and his legal teams, both in England and in the USA because of the Non-Party Costs appeal and the trial in the US. Mr Zaroff states that Mr Vik is required to be active in the preparation and run up to the Connecticut trial and his case is likely to suffer significant prejudice if he is forced to deal with the preparation for and the attendance at the examination hearing in the High Court on 28th October 2015. The timetable leading up to the trial in Connecticut on 10th November is said to be extremely tight and a great many tasks have to be completed prior to that. It is said that daily input is required from Mr Vik between September and November 2015 including preparation for various interlocutory steps before the trial. Details are given in paragraphs 20-22 of his witness statement.
Against this it is said by DBAG that since SHI and Mr Vik have resisted and obstructed enforcement at every stage, there should be no further delay in the production of documents and examination of Mr Vik which might give him further opportunities to frustrate the purpose of the order. If Mr Vik's resignation from SHI impacts on his ability to obtain documents or provide information, it is said to be essential that Mr Vik is examined sooner rather than later since his knowledge of SHI's financial position will become stale. Further, the best prospects of Mr Vik complying with the order exist if the examination takes place before the Non-Party Costs appeal commencing on 3rd November because of the incentive thus given to him to be seen to be complying with English court orders.
Doubt is expressed as to the extent of any prejudice to Mr Vik in his preparations for the Connecticut trial and 14th October 2015 as a date for production of documents does not impact on any particular scheduled date in the Connecticut proceedings. Documents can be obtained by Mr Vik's administrative assistants, by Mr Johansson and by writing to third parties such as banks. The examination is listed for one day only and although two further days would be taken out of his diary in travelling, he will have had over three months from the date of the order to prepare. His input would not be required for the Non-Party Costs appeal though he might well wish to be present if it did not impact upon his preparation for Connecticut.
I am troubled by the consideration that, if the Non-Party Costs appeal fails, Mr Vik may simply ignore the order of this court. Nonetheless, I do consider that the burden on him and his lawyers in dealing with this application at the same time as the Non-Party Costs appeal and the Connecticut trial is such that the timing should be altered.
Reluctantly I have come to the conclusion that the examination of Mr Vik should be postponed to a date in December which I will fix on the handing down of this judgment but that the date for production of documents should remain as it is, namely 14th October 2015, because all such documentation should long since have been collated and the task of producing it should not be extensive whether or not this has or has not happened.
Conclusion
In these circumstances I refuse to set aside the order made by Teare J but vary it so that the examination is to take place on a date to be fixed in December 2015. Counsel should attend the hand down of the judgment with details of their schedules to hand.
Mr Vik's application has failed in every respect except for this variation which was not what was sought in his summons. In the circumstances it appears to me inevitable that he must pay the costs of this application albeit not in their entirety. Unless there are special circumstances which fall to be taken into account of which I know nothing, my conclusion would be that he should pay 90% of the costs of this application.
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MR JUSTICE SPENCER:
As pleaded, this is an application by the claimant ("Dorma") for a springboard injunction against the first four defendants to restrain them from working for or with the fifth defendant ("Arrow") or anyone else in the business of commercial and industrial doors in the UK market, from soliciting specified customers, from poaching and employing specified employees and from competing with the claimant in relation to specified businesses. The claimant also seeks injunctions against all five defendants for the return and protection of the claimants' confidential information, including the provision of affidavit evidence in relation to the misuse of such information.
The claimant seeks an injunction against the first defendant to prevent breaches of his restrictive covenants and an injunction to prevent the fifth defendant, Arrow, from inducing the first four defendants to breach any orders made against any of them.
The application notice for this interim relief was issued on 28 September 2015 with a time estimate of one hour. This proved to be grossly inadequate. The application was listed before me on Wednesday 7 October with a revised time estimate of half a day. In the event it lasted a full day. I have had the benefit of skeleton arguments and full oral argument from Mr Adam Solomon and Ms Charlotte Davies on behalf of the claimant and from Mr Simon Devonshire QC on behalf of all five defendants. I am grateful to all counsel for the clarity of their submissions.
Because of the urgency of the matter, I indicated that I would give this extempore judgment today, Friday 9 October.
It is important at the outset to explain that the parties have agreed on directions for a speedy trial to be heard in December 2015 and this application must be viewed against that background. This is not the occasion for a minute analysis of all the evidence and arguments. I shall therefore concentrate in this judgment on the main issues. However, I make it clear that, although I will not necessarily refer to each and every argument that has been advanced, I have taken into account and considered all the submissions that have been made.
The evidence before me on behalf of the claimant is a witness statement from Dorma's regional director for the United Kingdom and Ireland, Mr Craig Gilmour, dated 28 September, producing many documentary exhibits. On 6 October, the day before the hearing, witness statements from all five defendants were served. The statement on behalf of the fifth defendant, Arrow, was made by its managing director Mr Oliver.
Factual background
In short summary, the factual background is as follows. Dorma's business is the manufacture, repair, maintenance and installation of automatic commercial and industrial doors for the UK market. The company has a branch in Bridgwater, Somerset, which covers the south west region. In October 2013, Dorma had taken over a company called Ascot Doors Ltd, including the team at Bridgwater. The first defendant had been the regional service manager. He became Dorma's branch manager.
In January 2015, his terms of employment were enhanced. He received a substantial pay increase. His terms and conditions were also revised to include various restrictive covenants, including, to adopt the shorthand used during the hearing, a six month non- compete clause and nine month non-solicit, non-poach and non-deal clauses. I shall describe those clauses more fully later in this judgment. As branch manager in Bridgwater, the first defendant had overall responsibility for all aspects of the branch's performance, including managing the team.
The second defendant was employed as a service surveyor responsible for generating sales through marketing and business development. The third and fourth defendants were both employed as service coordinators, responsible for handling customer calls to the branch and co-ordinating visits by engineers to customers.
It seems that in late 2014 or early 2015 the first defendant approached the fifth defendant, Arrow, with a view to a possible change of employment. Arrow is a national company whose business is generically similar to the claimant's, that is to say the manufacturer and supply of commercial doors. The precise extent to which Dorma and Arrow are in direct competition for the same business is less clear and may be one of the issues for the trial. There is a suggestion that each caters for different niches within the market.
Arrow was already a well-established company but its branch in Bridgwater, only two miles from the claimant's branch, did not open for business until the beginning of September 2015.
The claimant's case is that the first defendant, in breach of the restrictions in his contract and in breach of his fiduciary duties to the claimant, effectively engineered an unlawful "team move", by which he and the other three defendants all resigned from their employment with the claimant and took up employment instead with Arrow. It is common ground that they handed in their resignations on the same date, 3 August 2015. On the claimant's case, at the time they tendered their resignations, the defendants were evasive and untruthful with the claimant's regional director, Mr Gilmour, not revealing that they were going to work for Arrow, a competitor. The first defendant, for example, when asked the direct question, lied in denying that he was going to work for Arrow.
On 5 August, the first defendant was placed on garden leave. He was reminded of his post termination restrictive covenants. The second, third and fourth defendants were subsequently placed on garden leave on or around 14 August.
At the start of his garden leave, the first defendant returned his company mobile phone and company laptop. All information on the devices had been wiped. He was not asked to do this by his employers. The claimant suggests that he must have been covering his tracks. The first defendant, in his witness statement, denies this. He does not remember wiping emails from his laptop or phone and, if he did, he says it would only have been in order to clear a few private emails which would have taken a long time to weed out individually; he did this as a matter of politeness and etiquette when returning the company's property.
Before starting her garden leave, but after giving notice, the third defendant, Chloe Power, contacted Mr Gilmour on 10 August asking for a printed version of all service clients. The request was refused. It was not the first such request. On 11 June, she had contacted the claimant's head office, asking for lists of all the company's five star clients, ie those who pay an annual service fee. There would have been 800 or so clients and the information would have run to hundreds of pages. That request had been declined as well.
The claimant's case is that these requests must have been made so that the third defendant could take and misuse confidential information in the form of customer lists. During her notice period, before she went on garden leave, it is said that she and the fourth defendant, Holly Morton, were seen carrying out a high volume of photocopy. In her witness statement, the third defendant, Chloe Power, denies that there was anything sinister in her request for customer lists. The June request was so that she could have a list on paper, which she found easier to work with, and although this request came a few days after she had been offered an interview with the fifth defendant, there was no intention of misusing the information. She says that the request on 10 August was for much the same reason. She was trying to get on top of the outstanding paperwork before she left the company. She found it difficult to work with the information on the screen. She had previously raised a problem with the service director but nothing had been done about it. There was inadequate information about when the last service had been completed for each customer. She said she had also raised it with Mr Gilmour. She and the fourth defendant had obtained this list and were working on it for the benefit of those who would take over their role when they left. She had explained this, she said, in an email to Mr Gilmour on 10 August.
On 13 August, the fourth defendant, Holly Morton, approached the claimant's north west branch coordinator requesting that she be sent the reports showing all the contracts for the Bridgwater branch. This time the reports were sent. They included hundreds of customer names, contract start and end dates and the like. The claimant's case is that this was another attempt, now successful, to obtain confidential information for improper use in their new employment.
In her witness statement, the fourth defendant denies this. She explains at length the problems there were with the new computer system, exacerbated by the introduction of a call centre at Hitchin rather than personal contact with customers. She points that, when the covering email was sent, it is stated that Ricky Heere, the business process manager, had requested the same information as her, confirming that they both thought it was the best way to update their service maps system. She spoke to Mr Heere, who asked her to print off the reports and suggested that she and another employee should work through the information. She and another employee, Claire Barrett, worked through the document and, when she finished, she handed the document back to Claire Barrett. She denies that she took any confidential information with her.
The case for the defendants is that, although the first four defendants all resigned from their employment on the same date, 3 August, and had been offered employment by Arrow on the same day, 15 July, this was not an unlawful team move.
The first defendant, Mr Bateman, says in his witness statement that he had been unhappy for some time with the changes in Dorma's business when they took over Ascot. The call centre at Hitchin was one of the problems. He had met with Mr Oliver of Arrow as along as February 2015 at a hotel in Leeds to discuss the possibility of joining Arrow. He said he had not discussed this with the second, third or fourth, defendants until a few days before he actually resigned.
The second defendant, Paul Bailey, says in his witness statement that he left Dorma's employment because he was dissatisfied with the way the company was working. He felt that his competence as a surveyor was being impugned and he had mentioned it to the first defendant, his manager, in June or July, saying he wanted to leave the business. He did not feel he was valued any longer. He says that he emailed a number of companies, including Arrow, but he did not tell the first defendant that Arrow was one of them. He had conversations with the third and fourth defendants about the negative feelings in the Bridgwater office resulting from changes to working practices. Both women confided in him that they were unhappy as well and were thinking of leaving. The second defendant accepts that he told both of them that he had considered applying to Arrow and that they might wish to do the same. He did not try to persuade them to leave the claimant.
The third defendant, Chloe Power, says in her witness statement that she too had been unhappy at Dorma. The second defendant, Mr Bailey, gave her and the fourth defendant, Holly Morton, the email address of Mr Oliver at Arrow and she made contact with Arrow to register her interest in working for them. She says she did not discuss this with the first defendant, Mr Bateman, at that point. It was only a few days before she planned to resign that Mr Bateman said that he intended to resign as well.
The fourth defendant, Holly Morton, gives much the same explanation for her to decision to leave Dorma and join Arrow. She was unhappy in the job with all the changes, especially the new call centre. She discussed the situation with the second defendant, Mr Bailey, and discovered that he was thinking of joining Arrow. This prompted her to make the same enquiry. She never discussed it with the first defendant, Mr Bateman.
The fifth defendant's witness statement from Mr Oliver, the managing director of Arrow, confirms that he received emails from the second, third and fourth defendants on 2 June 2015 enquiring if there were vacancies. He knew the second defendant by reputation and was keen to employ him. It was mainly because the second defendant wanted the third and fourth defendants to work with him as well that they were offered the job. They occupied comparatively unimportant junior administrator roles which could easily have been filled. Mr Oliver insists that the first defendant's approach to Arrow was independent of the approach by the other three defendants.
It is important to observe at the outset that, although the first defendant's contract of employment contained post termination covenants and restrictions, there were no such covenants and restrictions in the contracts of the second, thirdor fourth defendants.
On 14 September, the claimant's solicitors wrote letters before action to the first defendant and the fifth defendant requesting undertakings. At that stage no undertakings were forthcoming. On 22 September, the claimant's solicitors wrote pre- action letters to the second, third and fourth defendants. No response had been received from them by the time this application was filed on 28 September. The claimant's case is that evidence has recently come to light that the second defendant has been canvassing Dorma's customers since he has joined Arrow.
A day or so before the hearing, limited undertakings were offered by the first defendant but none by the second, third, fourth and fifth defendants. Between the hearing and judgment, as I shall explain later, undertakings have been put forward on behalf of the other defendants as well.
The issues
The issues I have to decide are as follows:
(1) Should Dorma be granted springboard relief such as would effectively prevent Arrow operating with its current staff of the first four defendants at the Bridgwater office in competition with Dorma until trial?
(2) Should Dorma be granted injunctive relief against all five defendants restraining them from using any of Dorma's confidential information?
(3) Should the defendants be required to confirm by affidavit what use, if any, has been made of Dorma's confidential information?
(4) Should the first defendant, Mr Bateman, be restrained from breaching the restrictive covenants in his contract of employment, including in particular the covenant against competing with Dorma?
(5) Should Arrow be restrained from causing, inducing, encouraging or permitting the other defendants to act in breach of orders made against them on this application?
The general approach
It is common ground that I should apply the principles in American Cyanamid v Ethicon Ltd [1975] AC 396. I must be satisfied that the claim for relief in respect of each of the issues identified above is not frivolous or vexatious, in other words that there is a serious issue to be tried. If there is a serious issue to be tried, I must then consider the balance of convenience, in particular whether damages would be an adequate remedy on either side if the relief is refused or granted. In the words of Lord Diplock, at page 407H:
"It is no part of the court's function at this stage of the litigation to try to resolve conflicts of evidence on affidavit as to facts on which the claims of either party may ultimately depend nor to decide difficult questions of law which call for detailed argument and mature consideration. These are matters to be dealt with at the trial."
Mr Devonshire submits, however, that by the time the trial comes on in December a substantial period of any injunction, if granted, will have expired. He submits that I should adopt the approach followed by Silber J in CEF Holdings Ltd v Mundey [2012] FSR 35 at paragraphs 25 to 30 and, as Staughton LJ put it in Lansing Linde Ltd v Kerr [1991] 1 WLR 251 at 258:
"If it will not be possible to hold a trial before the period for which the plaintiff claims to be entitled to an injunction has expired, or substantially expired, it seems to me that justice requires some consideration as to whether the plaintiff would be likely to succeed at a trial. In those circumstances it is not enough to decide merely that there is a serious issue to be tried."
In the present case, the claim for the injunction in relation to non-competition is based on the covenant in the first defendant's contract of employment for six months, and the period in respect of the other covenants is nine months. These periods would expire in February and May 2016 respectively. The date for the speedy trial is only some eight or nine weeks ahead. Mr Devonshire submits that at the very least I should "sift" the evidence carefully rather than simply accept that, because the claimant's case is challenged, there is necessarily a serious issue to be tried.
I do not accept that the test I should apply on this application is as high as whether the claimant is likely to succeed at trial. I do accept, however, that in relation to the application for springboard relief in particular I must analyse the evidence carefully to decide not only whether there is a serious issue to be tried but also whether there is any real prospect of success, and whether the court should in its discretion grant the springboard relief sought.
Springboard relief
The claimant's case is that there was an unlawful team move orchestrated by the first defendant. Mr Solomon described it in his submissions as a concerted attack on Dorma. It is no coincidence, he submits, that the first four defendants were all offered employment with Arrow on the same date, 15 July, or that all tendered their resignation to Dorma on 3 August. As a result, Arrow acquired a ready-made team, "up and ready" was Mr Solomon's phrase, to operate from their Bridgwater office in direct competition with Dorma, thereby gaining an unfair competitive advantage.
Mr Gilmour's evidence is that it could take up to 12 months for a new business setting up in the region to recruit a team with good experience and contacts and to build up a profitable business by legitimate means. It is said that the unlawfulness of the defendants' actions arises in several ways. The first defendant, as a senior manager with Dorma, should have reported the fact that the other defendants were planning to move to a competitor. Had he done so, there would have been the opportunity for Dorma to talk to the defendants and seek to assuage any concerns they had and try to persuade them to stay. Instead, the first defendant colluded in their actions in gross breach of his fiduciary duties to Dorma. The erasing of information from his company laptop and mobile phone, it is said, must have been done to cover his tracks.
The claimant's case is that the second defendant too was a comparatively senior employee. He encouraged the third and fourth defendants to leave Dorma and to join Arrow. He has been contacted customers of Dorma to solicit business since he has joined Arrow, making use of Dorma's confidential information. The claimant's case is that the third and fourth defendants are close working colleagues and friends. There was an improper attempt by the third defendant to obtain customer lists on 11 June and a further attempt on 10 August. The fourth defendant succeeded in obtaining a customer list on 14 August and, as a matter of inference, it is said this must have been copied and taken with them when they joined Arrow.
Although springboard relief is not sought against Arrow as such, the claimant's case is that Arrow has been a very willing beneficiary of the unlawful conduct of the other defendants. There was an obligation, it is said, on the first defendant at paragraph 2.5 of his terms and conditions of employment to inform any new employer of the post- termination restrictions by which he was bound. On the assumption that he did not inform Arrow, it was nevertheless incumbent on Arrow to satisfy themselves that their new regional manager was not subject to such restrictions. It is said that the unfair competitive advantage gained by Arrow is underlined by the fact that they obtained a complete team from Dorma without advertising any vacancies and without any formal interviews, ready to start the new operation on 1 September.
The case on behalf of the defendants is in effect that what may on the face of it look suspiciously like a co-ordinated team move is in fact fully explained in the defendants' witness statements and was entirely innocent. For the reasons each defendant separately explains, he or she had become dissatisfied with Dorma. The second, third and fourth defendants were quite entitled to go and work for Arrow, even if it is a competitor. It is submitted that the claimant's case amounts to no more than assertion based on suspicion, which is not sufficient to establish that there is a serious issue to be tried, still less to establish that the claim for a springboard injunction is likely to succeed at trial.
Counsel helpfully referred me to a number of authorities in the developing jurisprudence in relation to springboard injunctions. I do not propose to rehearse them at length because, as both counsel acknowledged, every case in the end turns on its own facts. I shall however refer to some passages from these authorities which are helpful in clarifying the principles.
First, I gratefully adopt the analysis of Haddon-Cave J in QBE Management Services UK Ltd v Dymoke [2012] EWHC 80; [2012] IRLR 458, where he draws together the principles from the authorities to date at paragraphs 240 to 247 of judgment. I quote from that analysis, omitting the case references:
"First, where a person has obtained a 'head start' as a result of unlawful acts, the Court has the power to grant an injunction which restrains the wrongdoer, so as to deprive him of the fruits of his unlawful acts. This is often known as 'springboard' relief.
Second, the purpose of a 'springboard' order as Nourse L.J. explained in Roger Bullivant v Ellis ... is 'to prevent the defendants from taking unfair advantage of the springboard which [the Judge] considered they must have built up by their misuse of the information in the card index' ... May LJ added that an injunction could be granted depriving defendants of the springboard 'which ex hypothesi they had unlawfully acquired for themselves by the use of the plaintiffs' customers' names in breach of the duty of fidelity'
... The Court of Appeal upheld Falconer J's decision restraining an employee who had taken away a customer card index from entering into any contracts made with customers.
Third, 'springboard' relief is not confined to cases of breach of confidence. It can be granted in relation to breaches of contractual and fiduciary duties ... and flows from a wider principle that the court may grant an injunction to deprive a wrongdoer of the unlawful advantage derived from his wrongdoing. As Openshaw J. explained in UBS v Vestra Wealth ... at paragraphs 3 and 4:
'There is some discussion in the authorities as to whether springboard relief is limited to cases where there is a misuse of confidential information. Such a limitation was expressly rejected in Midas IT Services v Opus Portfolio Ltd, ... although it seems to have been accepted by Scott J in Balston Ltd v Headline Filters Ltd... In the 20 years which have passed since that case, it seems to me that the law has developed; and I see no reason in principle by which it should be so limited.
In my judgment, springboard relief is not confined to cases where former employees threaten to abuse confidential information acquired during the currency of their employment. It is available to prevent any future or further economic loss to a previous employer caused by former staff members taking an unfair advantage, and "unfair start", of any serious breaches of their contract of employment (or if they are acting in concert with others, of any breach by any of those others). That unfair advantage must still exist at the time that the injunction is sought, and it must be shown that it would continue unless retrained. I accept that injunctions are to protect against and to prevent future and further losses and must not be used merely to punish breaches of contract.'
Fourth, 'springboard' relief must, however, be sought and obtained at a time when any unlawful advantage is still being enjoyed by the wrongdoer ...
Fifth, 'springboard' relief should have the aim 'simply of restoring the parties to the competitive position they each set out to occupy and would have occupied but for the defendant's misconduct' ... It is not fair and just if it has a much more far-reaching effect than this, such as driving the defendant out of business ...
Sixth, 'springboard' relief will not be granted where a monetary award would have provided an adequate remedy to the claimant for the wrong done to it ...
Seventh, 'springboard' relief is not intended to punish the defendant for wrongdoing. It is merely to provide fair and just protection for unlawful harm on an interim basis. What is fair and just in any particular circumstances will be measured by (i) the effect of the unlawful acts upon the claimant; and (ii) the extent to which the defendant has gained an illegitimate competitive advantage ... The seriousness or egregiousness of the particular breach has no bearing on the period for which the injunction should be granted. In this regard, it is worth bearing in mind what Flaux J, said ...:
'I agree with Mr Lowenstein that logically, the seriousness of the breach and the egregiousness of the Defendants' conduct cannot have any bearing on the period for which the injunction should be granted - what matters is the effect of the breach of confidence upon the claimant in the sense of the extent to which the first defendant has gained an illegitimate competitive advantage. In my judgment, Mr Cohen's submissions seriously underestimate the unfair competitive advantage gained by the defendants from access to the claimant's "customer list" and ignore, in any event, the impact (if the injunction were lifted) of actual or potential misuse of other confidential information such as volume of business or pricing information. It is important in that context to have in mind that the claimant maintains in its evidence that all the information said to be confidential remains confidential ...'
Eighth, the burden is on the claimant to spell out the precise nature and period of the competitive advantage. An 'ephemeral' and 'short term' advantage will not be sufficient ..."
Against this framework, it is necessary to analyse in more detail the evidence on which the claimant relies to support the inference of an unlawful team move. As ever, the chronology is instructive.
(1) The first defendant confirms in his witness statement that he had a meeting with Mr Oliver of Arrow as early as 23 February 2015 to discuss the possibility of joining Arrow, having already sent his CV.
(2) On 2 June 2015, the second, third and fourth defendants all emailed Mr Oliver in similar terms, registering their interest in working for Arrow. The first defendant enquired whether there were any current vacancies for a surveyor in the south west area. The third and fourth defendants registered their interest in any opportunities which might arise if Arrow were to open a branch in the south west. All three indicated that they were currently working for Dorma. The third and fourth defendants sent their CVs with their email. The second defendant sent his CV on request.
(3) On 6 June 2015 Mr Oliver informed the third defendant that Arrow would be holding interviews in the week commencing 15 June. He sent her an employment application form which she completed, giving the first defendant's name as a referee.
(4) On 11 June 2015, the week before Arrow was due to hold job interviews, the third defendant emailed Claire Barrett at Dorma's head office in Hitchin asking for a list of all Dorma's five star clients, ie those paying an annual fee to cover all their breakdowns or repairs throughout the year. When the request was queried, the response was vague. The information was not sent.
(5) On 15 July, Mr Oliver wrote to each of the defendants offering them employment and forwarding an engagement letter. I note that the offer letter did not specify the identity of the Bridgwater office as the place of employment, although that was implicit. He said in his email to the third and fourth defendants:
"I am delighted that we have been successful in bringing together the team for this exciting new venture."
(6) On 3 August, all four defendants tendered their resignation from Dorma, giving four weeks' notice.
(7) On receipt of the letters of resignation, Mr Gilmour asked the first defendant if he had a job to go to. He said he had three options, only one of which was within the industry. Mr Gilmour asked him in terms if he was joining Arrow. The first defendant said no. The second defendant said he was not prepared to say where he was going. The third and fourth defendants said they had no job to go to, they just wanted to leave. On the face of it, therefore, three of the defendants lied about their true intentions and the other was evasive. None of the defendants address these conversations in their witness statements.
(8) On 6 August, Dorma's HR department emailed the first defendant, placing him on garden leave for the duration of his period of notice until the last day of his employment, Friday 28 August. The letter specifically drew his attention to the restrictive covenant section of his contract.
(9) When he was placed on garden leave, the first defendant returned his company mobile phone and laptop. He had wiped all information from both devices.
(10) On 10 August, the third defendant emailed Mr Gilmour asking for a printed version of the list of Dorma's service clients. It would have run to thousands of pages. She said it would be easier for her and the fourth defendant to see what was needed and that she wanted to break down the information into postcodes. Postcodes were in fact already shown. The request was declined.
(11) On 13 August, the fourth defendant telephoned Claire Dunne, Dorma's north west branch co-ordinator in Bolton, asking her to send reports showing all contracts for the Bridgwater office with the status live, extended or cancelled. She said she needed it to hand over the local information to the national accounts team. The information was sent.
(12) There is some evidence that the third and fourth defendants were observed at the Bridgwater branch engaging in a lot of photocopying at or around the time they were serving out their notice.
(13) On 14 August, the third and fourth defendants were both placed on garden leave until their last day of employment, 28 August.
(14) On 1 September, the first four defendants all began their new employment with Arrow.
(15) On 2nd September, the claimant's solicitors wrote to the first defendant setting out in detail their concerns that the other defendants had joined Arrow and setting out in summary the matters outlined in this chronology. He was warned that legal action might be taken to protect Dorma's interests.
(16) On 4 September, the claimant's solicitors wrote in similar terms to the second defendant.
(17) On 11 September, the claimant discovered Arrow's new office in Bridgwater was advertising on the internet with the first defendant described as regional business centre manager and Paul Bailey, the second defendant, described as business development manager. The website entry included the following:
"ARROW expand their industrial door operation to cover the south west of England
The new super enlarged ARROW Regional Business centre is now open from its regional control centre in Bridgwater covering the whole of the South West of England including South Wales. ARROW is now ready to make the most of ARROW's unique specialist installations. Service and Repair, Planned Maintenance Contracts for all Business Managers, Facility Management Companies, maintenance personnel and to consult with all Health and Safety Officers on all Industrial Doors for the whole of the South West.
All South West businesses will receive the very best attention from their facilities 24/7 365 days every year ...
My team will be in place for all customers, new and old alike..."
Alongside that entry was the second defendant's name and phone number at his place of work and his mobile phone.
(18) On 12 September, the second defendant emailed one of the claimant's customers, Westway Services Ltd, apparently using a specific email address for a employee at that company, Jamie Dale. The email read:
"Good morning. We would just like to introduce you to our new business centre that has opened in Bridgwater, Arrow Industrial Group Ltd. The new centre will focus on supporting all companies to ensure the safety and security on all types of automatic and industrial doors, gates, barriers, windows, dock levellers, access controls, security doors and any new projects. Our teams of fully trained experienced engineers are available 24 hours a day 7 days a week to ensure all client needs are met promptly. No contract is either too small or too big for us to undertake. Please take a look at our website [details were given] and have no hesitation in contacting me on my mobile should you require any further requirements. Regards, Paul Bailey business development manager."
The claimant suggests that this must have been a general email sent to potential customers and probably to other customers of Dorma. I was told at the hearing that another such email sent by the second defendant to another customer of Dorma has recently come to light.
(19) On 18 September, two of Dorma's engineers resigned from their employment, giving only a week's notice. Both of them told the new branch manager who had replaced the first defendant at Dorma's Bridgwater office that they were moving to Arrow. Another engineer, who wishes to remain anonymous, says that he has been asked by the first defendant to join him in the employment of Arrow. The first defendant said he would beat his current pay.
In my judgment, these individual pieces of evidence plainly give rise to a strong inference that this was an unlawful team move in the sense that I have outlined. They amount to a powerful circumstantial case. The coincidence of timing in relation to the registering an interest with Arrow (2 June), the offer of employment by Arrow (15 July) and tendering of resignations to Dorma (3 August) is particularly striking. It was not a matter which Mr Devonshire addressed discretely in his submissions and there was little he could have said. It is also highly significant that when the jobs were offered on 15 July there was not even an office in place. In effect, Arrow recruited a complete team from Dorma under the very nose of the first defendant, who grossly breached his fiduciary duty by conniving in it and not reporting it. There is a proper inference to be drawn that there must have been communication between the first and second defendants prior to June 2, with a view to encouraging the job applications to Arrow. It is telling that the first defendant said on the website that "my team will be in place for all customers new and old alike". His "team" was the team he had brought with him from Dorma. The references to customers "old and new alike", in combination with his own name and phone numbers, could be regarded as aimed at those who would have known him as customers of Dorma. The first, third and fourth defendants lied, on the face of it, in concealing their true intention to join Arrow. The second defendant was evasive. The unusual interest of the third and fourth defendants in obtaining a printout of customers only out of those who approached Arrow at the beginning of June is more than suspicious. Such a list was eventually obtained by the fourth defendant in August and there is an inference that the second defendant had access to some list of customers whom he was circulating as his email to Westway strongly suggests.
The defendants all deny the allegations against them. In my judgment, it is plain that there is a serious issue to be tried in relation to the question: was this an unlawful team move? Mr Devonshire submits that the evidence amounts to no more than suspicion and suspicion is not enough. He relies on dicta to that effect in CEF v Mundey (supra) at page 255D and in Re Lord Cable; Garret v Walters [1977] 1 WLR at 19F to 20B. In Caterpillar Logistics Services (UK) Ltd v de Crean [2011] EWHC 2154, Tugendhat J said at first instance that a case based only on suspicion does not raise a triable issue. He refused to make an interim confidentiality injunction in the absence of proper evidence to support the charge that the employee had improperly removed and retained confidential information. His decision was upheld by the Court of Appeal: see [2012] EWCA Civ 156. The facts of that case were, however, very different, and I do not consider that it provides more than general assistance in the task I have to perform.
Mr Devonshire submits that the explanations given by defendants in their witness statements for what may seem suspicious actions are entirely plausible. He submits that, when the evidence is sifted, the suspicion of impropriety is dispelled. I have considered very carefully and reflected upon the content of the defendants' witness statements. I have already rehearsed the gist of their explanations in my earlier summary of the factual background. It is to be noted, however, that the second defendant in his witness statement does not even address the issue of the email he sent to Westway, a customer of Dorma, soliciting their business. Mr Devonshire makes the point that there is no evidence that any search was made for the product of the downloading of the customer list on 13 August to establish whether or not physically the list had been removed from Dorma's premises. He also makes the point that, although the letters before action sent a month ago refer to an impending forensic analysis of the computer and phone to establish what precisely the first defendant had deleted, there is no evidence of any such examination. I was told, however, that this is neutral in that no independent forensic analysis has yet been undertaken.
I am acutely conscious of the need to sift and assess the evidence as a whole and I have done so. I am firmly of the view that there is not only plainly a serious issue to be tried on the question of an unlawful team move but also, if I am required to express a provisional view, that the evidence is strong. It will of course be a matter for cross- examination of the defendants in due course. Suffice it to say that I am sceptical of the explanations which have been put forward by the defendants, looking at all the evidence as a whole.
Nevertheless, the mere fact that there has been on the face of it an unlawful team move does not automatically entitle the claimant to springboard relief and certainly not to relief which would effectively prevent Arrow from employing the first four defendants at the Bridgwater office irrespective of whether they are likely to act unlawfully until trial.
In this regard, I bear in mind the helpful guidance given by Simler J in De Vere Holding Company Ltd v Belgravia Wealth Management Europe KFT [2014] EWHC 3189. At paragraph 39, she said:
" ... Even if I am satisfied that the defendants, or some of them, have made unlawful use of material belonging to the claimants, that is not enough to found a claim for springboard relief. The claimants must show that the defendants have gained an unfair competitive advantage over the claimants and that that advantage still exists and will continue to have effect unless the relief sought is granted. It is clear from the authorities that the court should exercise considerable caution both as to whether to grant such an injunction at all and, if so, as to its form and duration. In particular, the duration of such an injunction should not extend beyond the period for which the defendants' illegitimate advantage may be expected to continue because such injunctions are granted to protect against and to prevent further loss, rather than being used to punish for past breaches of contract."
Mr Devonshire submits correctly that, even if the claimant has raised an arguable case in relation to the unlawfulness of the defendant's conduct, the court must also be satisfied that the relief sought does no more than proportionally negate the springboard advantage improperly obtained in consequence.
Mr Solomon accepts that the first paragraph of the draft order to which I alluded in the very first paragraph of this judgment is too widely drawn. That paragraph provided:
"The First, Second, Third and Fourth Defendants must not by themselves, their servants, agents or otherwise howsoever carry on with, be employed or otherwise engaged by or concerned or interested in any capacity (whether for reward or otherwise) or provide any commercial, professional or technical advice to, or in any way assist, any other Defendant in the business of the manufacturing, repair, maintenance and installation of automatic, commercial and industrial doors for the UK market."
That would effectively prevent the defendants from working at all in the industry. Mr Solomon explained that this paragraph was, however, always intended to be an alternative to paragraph 2, which reads as follows:
"The First, Second, Third and Fourth Defendants must not until trial or further Order (whichever is the sooner):
a. Solicit or endeavour to entice away from the Company or any Group Company the business or custom of a Restricted Customer with a view to providing goods or services to that Restricted Customer in competition with any Restricted Business;
b. In the course of any business concern which is in competition with any Restricted Business, offer to employ or engage or otherwise endeavour to entice away from the Company or any Group Company any Restricted Person;
c. In the course of any business concern which is in competition with any Restricted Business, employ or engage or otherwise facilitate the employment or engagement of any Restricted Person, whether or not such person would be in breach of contract as a result of such employment or engagement;
d. be involved in any Capacity with any business concern which is (or intends to be) in competition with any Restricted Business, save that this shall not prevent any of them from:
i. Holding an investment by way of shares or other securities of not more than 5% of the total issued share capital of any company, whether or not it is listed or dealt in on a recognised stock exchange;
ii. Being engaged or concerned in any business concern insofar as his duties or work shall relate solely to geographical areas where the business concern is not in competition with any Restricted
Business; or
iii. Being engaged or concerned in any business concern, provided that their duties shall relate solely to services or activities of a kind with which they were not concerned to a material extent since in the 12 months before the termination of their employment with the Claimant.
e. Being involved with the provision of goods or services to (or otherwise have any business dealings with) any Restricted Customer in the course of any business concern which is in competition with any Restricted Business."
The exceptions I shall refer to a little later.
Those four subparagraphs follow the wording of the post termination restrictions imposed upon the first defendant by his contract of employment. The effect of subparagraphs (a), (b) and (c) is to prevent any improper soliciting of Dorma's customers or the enticing away of any of Dorma's staff. Paragraph (d) is different in that it would prevent the first four defendants from working for Arrow at the Bridgwater office, although it would not prevent Arrow from employing them at some other branch. Bearing in mind the location of the office in rural Somerset, it is doubtful whether any of the first four defendants could conveniently be employed at any other branch of Arrow elsewhere in the country. It would, however, be open to Arrow to continue their contracts of employment pending trial even if they could not continue to perform their duties at the Bridgwater office.
For practical purposes, an order in these terms would compel Arrow to engage a new team, at least until trial, building up the customer base from scratch. That is the position they would have been in but for the unfair advantage which, on the face of it, they gained in the presumed unlawful team move. I accept Mr Devonshire's submission that the claimant must show "the precise nature and period of any competitive advantage". I am satisfied that the period of the competitive advantage is still running and, on the evidence at present, it is likely to run for a considerable further period beyond the proposed date for a speedy trial. Mr Gilmour's estimate is that it would have taken 12 months for Arrow to build up the business to this level. It is certainly not an ephemeral or short term advantage such as to disentitle the claimant to springboard relief.
I have considered carefully whether it would be sufficient to make an injunction in the terms simply of subparagraphs (a), (b) and (c) of paragraph 2 of the draft order. However, I am persuaded that the evidence does justify making the order in the terms of paragraph (d) as well. For reasons which I shall give later in this judgment, I am satisfied that the restrictive covenant in paragraph (d) is likely to be held to be enforceable and justifies the making of an injunction against the first defendant in any event. It is only paragraph (d) that will have the effect of providing fair and just protection from unlawful harm on an interim basis by preventing further loss from the unfair competitive advantage which is assumed in the order I make.
In reaching that conclusion, I also bear in mind the following matters.
(1) On the assumption that the defendants are unlawfully in possession of Dorma's customer lists, on which I am satisfied there is a serious issue to be tried and a real prospect of success, it will be very difficult to police the obligations in the proposed order without the inclusion of paragraph (d).
(2) If an injunction in these terms is not granted and the alleged unlawful action is established at trial with substantial damages awarded, it is unlikely that the first four defendants will be able to pay such damages.
(3) If, on the other hand, an injunction in these terms is granted and the defendant succeeds at trial, the claimant's cross-undertaking as to damages will afford the defendants the necessary protection.
(4) If an injunction in these terms is not granted, the assessment of the claimant's loss is likely to be very difficult, although I accept that the same could be said of the defendant's'position should they ultimately succeed.
In the course of submissions, Mr Solomon explained that the approach of framing the springboard injunction against the second, third and fourth defendants in terms which mirror the first defendant's post termination restrictions is one which found favour with Simler J in the De Vere case. I accept that it is appropriate here as well. On that discrete point, Mr Devonshire made no submission to the contrary. Accordingly, subject to any further refinement counsel may suggest at the conclusion of this judgment, I will grant the springboard relief in the terms of paragraph 2 of the draft order. There are some minor adjustments to the definitions of "restricted customer" and "restricted person" in paragraph 8 of the order to which I shall return.
Injunction in respect of confidential information
The next issue is whether Dorma should be granted injunctive relief against all five defendants restraining them from using any of Dorma confidential information. As one would expect, the written terms and conditions of employment for each of the first four defendants contained restrictions on the use of confidential information both during employment and following termination. The precise terms of the restrictions differed as between the defendants.
In the case of the first defendant, under the heading restrictive covenants, there was a recital, page 40, of the need to protect the confidentiality of information with which he would be entrusted and that to protect the confidentiality of this information he agreed "not at any time whether during or after the end of your employment with the company to disclose to any person or to make use of any such confidential information".
In the case of the second defendant, there was an obligation at paragraph 20.11 of his terms and conditions, which included the following:
"You must not disclose any trade secrets or other information of a confidential nature relating to the Company or any of its associated companies or their business or in respect of which the Company owes an obligation of confidence to any third party during or after your employment except in the proper course of your employment or as required by law."
In the case of the third and fourth defendants, there was an obligation in their terms and conditions under the heading "protection of business" as follows:
"You undertake at all times after the term of your employment to keep secret and not to use or disclose any information obtained by you during the term of your employment which is of a confidential nature and of value to the employer including, without limitation, secrets, the business methods of the employer and confidential lists and particulars of the employer's suppliers and customers whether or not in the case of documents they are or were marked as confidential and all information relating to the business and/or marketing strategy."
It follows that it would have been a serious breach of the third and fourth defendants' duty of confidentiality to remove and/or make use of any confidential information which they took with them to Arrow whether they left the employment of Dorma. That proposition is not disputed. I have already concluded, for the reasons that I have explained, that there is a serious issue to be tried as to whether, as part of the unlawful team move, the second, third and fourth defendants were responsible for misappropriation of confidential information, particularly in the form of lists of Dorma's customers. It follows that there is a proper basis also to grant an injunction restraining the first four defendants from misuse of Dorma's confidential information until the trial.
The proposed injunction in paragraphs 3 and 4 of the draft order was in these terms:
"3. Until the earliest of trial or further Order, the First, Second, Third, Fourth and Fifth Defendants must not:
a. Use for the their own purposes or for the purpose of any other Defendant or any unauthorised third party any Confidential Information;
b. Disclose or cause to be disclosed and will not cause or induce the publication or disclosure of any Confidential Information; and
c. Reproduce any Confidential Information or any part thereof in any format or media form.
Save that nothing in this paragraph shall apply to information that enters the public domain other than by reason of the Defendants' default, and save that nothing in this paragraph prevents compliance with any other paragraph of this Order.
4. On or before [date] the First, Second, Third, Fourth and Fifth Defendants must return to the Claimant's solicitors, without modification, any property and/or Confidential Information belonging to the Company or any Group Company which is in their possession, custody or control and any copies of the same. Following return of such Confidential Information, the First, Second, Third, Fourth and Fifth Defendants must permanently delete any electronic versions or copies of the same that remain in their possession, custody or control."
At the end of the hearing on 7 October, I invited Mr Devonshire to put in writing the form of any undertaking which the first defendant was prepared to give as there had been some considerable discussion of this during submissions. As I recall, there had been no suggestion during the hearing that the second, third or fourth defendants would be prepared to give any undertakings. Taking up my invitation, Mr Devonshire helpfully forwarded by email yesterday, 8 October, proposed confidentiality undertakings which the first, second, third and fourth defendants were now prepared to give.
The proposed undertaking will be in this form:
"Without prejudice to their contentions that they hold no documents belonging to the Company or any Group Company, the First, Second, Third and Fourth Defendants each undertake that they will not until trial of the action or further order in the meantime:-
1. Use for their own purposes or for the purposes of any other Defendant or any unauthorised third party;
2. Disclose or cause to be disclosed or cause or induce the publication or disclosure of;
3. Reproduce (in whole or in part) in any media or format any 'Confidential Information' contained in any documents or records (whether in hard copy or soft copy format) belonging to the Company and any Group Company and retained by them after the termination of their respective employments, save that nothing in this undertaking shall apply to information that enters the public domain other than by reason of the Defendants' default.
Confidential Information for this purpose shall mean information contained in such documents and concerning any of the matters described in paragraph 8 of the draft Minute of Order."
During the hearing, there had been debate in relation to the breadth of that definition of confidential information in paragraph 8 of the draft order, which in turn was taken from the first defendant's terms and conditions. I shall read the definition in paragraph 8:
""Confidential Information" means information (whether or not recorded in documentary form, or stored on any magnetic or optical disk or memory) which is not in the public domain relating to the business, products, affairs and finances of the Company or any Group Company for the time being confidential to the Company and trade secrets including, without limitation, technical data and know-how relating to the business of the Company or any of their business contacts including in particular (by way of illustration only and without limitation) policies, organisation and management, pricing, pricing policies, future plans and staffing of the Company, the persons with whom the Company has dealings and upon what terms, the nature, origin, and composition of the Company products and services and production techniques."
Mr Devonshire submitted that this was far too wide a definition because it would include information which a employee had retained in his or her head. He relied by way of comparison upon the criticism of a wide definition of confidential information by the Court of Appeal in the Caterpillar case (supra) at paragraph 68. There Stanley Burnton LJ described the relief sought by the claimant as "hopelessly wide and vague" in that it did not specify the confidential information with any certainty but simply described it as "all or any confidential information acquired by the respondent during her employment with the claimant in whatever form". It seems to me, as a starting point, that that is far from the position here.
This morning there was a further exchange of emails between counsel, and sent to me, containing further submissions as to the extent to which information about a customer which is retained only in the employee's head should or should not be regarded as confidential information which the employee should not be permitted to use. That arose from the fact that the proposed undertaking which I have read seemed to confine the definition to confidential information contained in any documents or records.
In this regard, Mr Solomon relies upon the observations of Staughton LJ in Lansing Linde Ltd v Kerr (supra) at page 425J:
"It appears to me that the problem is one of definition: what are trade secrets, and how do they differ (if at all) from confidential information? Mr. Poulton suggested that a trade secret is information which, if disclosed to a competitor, would be liable to cause real (or significant) harm to the owner of the secret. I would add first, that it must be information used in a trade or business, and secondly that the owner must limit the dissemination of it or at least not encourage or permit widespread publication.
That is my preferred view of the meaning of trade secret in this context. It can thus include not only secret formulae for the manufacture of products but also, in an appropriate case, the names of customers and the goods which they buy. But some may say that not all such information is a trade secret in ordinary parlance. If that view be adopted, the class of information which can justify a restriction is wider, and extends to some confidential information which would not ordinarily be called a trade secret."
Immediately before that passage, Staughton LJ had been considering the case of Faccenda Chicken Ltd v Fowler [1987] 1 Ch 117. At page 135H, Neill LJ said, in the course of stating the principles which the court derived from the authorities:
"While the employee remains in the employment of the employer the obligations are included in the implied term which imposes a duty of good faith or fidelity on the employee. For the purposes of the present appeal it is not necessary to consider the precise limits of this implied term, but it may be noted: (a) that the extent of the duty of good faith will vary according to the nature of the contract ... ;(b) that the duty of good faith will be broken if an employee makes or copies a list of the customers of the employer for use after his employment ends or deliberately memorises such a list, even though, except in special circumstances, there is no general restriction on an ex-employee canvassing or doing business with customers of his former employer: see Robb v Green [1895] 2 QB 315 and Wessex Dairies Ltd v Smith [1935] 2 KB 80."
My attention has been drawn by counsel to a recent decision of the High Court in Halcyon House Ltd v Baines [2014] EWHC 2216. There the judge, HHJ Seymour QC, sitting as a judge of the High Court, was concerned with the issue of whether a customer's name in itself was or was not properly to be regarded as a "trade secret". The judge was referred to the passage I have just quoted from Lansing Linde v Kerr but (at paragraph 185) expressed his preference for what might be termed the traditional approach in Robb v Green, quoting the judgment of Hawkins J in that case at pages 12 to 13:
"Great stress was laid by the learned counsel for the defendant upon the fact that a servant having left his master may, unless restrained by contract, lawfully set up in the same line of business as his late master, and in the same locality; and that he may, without fear of legal consequences, canvass for the custom of his late master's customers, whose names and addresses he had learned, bona fide accidentally, during the period of his service. I do not suppose that anybody, with any knowledge of the law, would seriously contend the contrary."
In the Halcyon case, Judge Seymour went on to say:
"It seems to me that that principle extends to making contact with customers of the former employer whose names the former employee can recall because they have been learned accidentally during the course of the former employment, after having researched their contact details through publicly available information – classically telephone directories or electoral rolls, but now obviously including utilising the resources of the internet."
In reply to Mr Devonshire's submission based upon that authority, Mr Solomon acknowledges that customer names in themselves are not confidential but the combination of a customer's name and contact details would or certainly could be confidential. Here the concern was that there has been a misuse of information by the second defendant on the face of it in contacting the customer Westway which shows a degree of precision in the contact details. Moreover, Mr Solomon submits that the second defendant in particular may be in a position to know the requirements a customer of Dorma may have for goods or services and the price that he has paid before.
I do not propose to express any concluded view on this issue, Suffice it to say that there is still a difference between the parties in the terms of any acceptable undertaking that could be proffered. It seems to me that the definition in paragraph 8 of the order is sufficiently precise and I propose to adopt that definition and make the injunction in the appropriate terms as set out in the order.
So far as the fifth defendant is concerned, no undertaking has been volunteered. However, I have already found that there is a serious issue to be tried in relation to the alleged unlawful team move with a real prospect of success. It follows that there is a serious issue to be tried as well that the fifth defendant has been the unlawful beneficiary of the breaches of confidentiality on the part of the first four defendants. That is sufficient to make it appropriate that the fifth defendant also be subject to an injunction in the same terms. So I propose to make the injunction in the terms of paragraph 3 and 4 of the draft order against all five defendants.
Confirmation by affidavit
The next issue is whether the defendants should be required to confirm by affidavit what use, if any, has been made of Dorma's confidential information. The order sought at paragraph 5 of the draft order is in these terms:
"By 4pm on [date], the First, Second, Third, Fourth and Fifth Defendants will each provide to the Claimant's solicitors an affidavit, which for each Defendant:
a. Confirms that he has complied fully with his obligations as set out above under this Order;
b. Setting out each and every use or disclosure, save on behalf of the Claimant, that has been made of the Confidential Information by himself or, to the best of his knowledge or belief, any other third party; and
c. If he had but no longer has in his possession or control any item which falls within paragraph 4 of this Order, stating (save in relation to any disclosure on behalf of the Claimant):
i. What date the particular piece of information or property was disclosed;
ii. To whom it was disclosed (providing names and addresses);
iii. The means or medium by which it was disclosed;
iv. Insofar as he is aware, the current whereabouts of the information or property."
Mr Devonshire submits that such an order is inappropriate for three reasons. First, he submits the order falls on the wrong side of the line, so to speak, by reference to the guidance given by Mackay J in Aon Ltd v JLT Reinsurance Brokers Ltd [2009] EWHC 3448;[2010] IRLR 600. He relies on the observation by Mackay J at paragraph 26 in particular:
"I see no reason here to subvert the normal accusatorial basis of our litigation, where the horse precedes the cart, into an inquisitorial one starting from an assumption that guilt has been proved, and saying to the defendants, 'Tell us everything you and others have done which was wrong.'"
Without going into detail, it is right to observe that the relief sought in that case and the disclosure which was required went far beyond what is sought here.
Second, Mr Devonshire submits that there is in any event no purpose in requiring such disclosure by affidavit when the information has already been given by the defendants in each of their witness statements: each denies removing or misusing any such confidential information. Third, Mr Devonshire submits that the timetable of directions for the speedy trial in December envisages pleadings closing within the next fortnight and the defendants would be required to serve their witness statements for the trial within the next month, but by then disclosure will have taken place so that all relevant documents which would show, for example, the names of customers who have been approached by Arrow will in any event have become apparent. He also makes the point that on the timetable the claimant will have to be pleading its case very shortly indeed before any affidavit could reasonably be expected to be filed. Mr Solomon submits that the order should nevertheless be made. He says it is perfectly standard and if, as the defendants insist, they have done nothing wrong, they would simply have to repeat in very brief terms what they have said in their witness statements.
Although I accept that the proposed request is on the right side of the line and does not fall foul of the criticisms in Aon, in the exercise of the court's discretion I do not consider that such an order is necessary or appropriate on this occasion. The information has already been provided in the witness statements. If it proves to be false, the remedy of contempt is available just as much for an untruth told in a witness statement as it is for an untruth told in an affidavit. It seems to me the parties will have enough to do in preparing their cases for this speedy trial without the additional burden on the defendants of preparing separate affidavits, but all the relevant documentary evidence will emerge on disclosure. Accordingly, I do not propose to make an order for disclosure by affidavit in the terms of paragraph 5 of the draft order.
First defendant's restrictive covenants
The next issue is whether the first defendant should be restrained from breaching the restrictive covenants in his contract of employment, including in particular the covenant against competing with Dorma. There is a substantial measure of agreement in relation to the restrictive covenants. By the conclusion of submissions on 7 October, Mr Devonshire had conceded that all but one of the covenants should be the subject of an undertaking or an injunction, although there was some slight issue still with the wording of the related definitions of "restricted customer" and "restricted person". I deal with the covenants in turn.
Paragraph 6a of the draft order provides that the first defendant must not "solicit or endeavour to entice away from the company or any group company the business or custom of a restricted customer with a view to provide goods or services to that restricted customer in competition with any restricted business".
Mr Devonshire takes issue with the definition of restricted customer in paragraph 8 of the draft order, which is:
""Restricted Customer" means any firm, company or person who, during the 12 months before the termination of the Defendant's employment, was a customer or prospective customer of the Company or any Group Company with whom the Defendant had contact or about whom he became aware or informed in the course of his employment."
Mr Devonshire submits that the words "or about whom he became aware or informed" make the definition far too broad and that, rather than the phrase "had contact", the word "dealt" would be more appropriate. Mr Solomon did not take issue with those proposed amendments.
There is however a more fundamental dispute as to whether, for the avoidance of doubt, the claimant should provide a list of the customers in question so that the injunction can be framed by reference to that list. Mr Devonshire submits that such a list would make for clarity: everyone would know exactly where they stood. He submits that that is particularly important for the fifth defendant, Arrow, who will be giving an undertaking or submitting to an injunction not to cause, induce, encourage or permit any breach of the order by the first defendant.
Mr Solomon submits that with the removal of the words "or about whom he became aware or informed" and the substitution of the word "dealt" for "had contact", there is perfect clarity. The first defendant knows perfectly well who the relevant customers are with whom he dealt in his last 12 months. If the fifth defendant, Arrow, permitted the first defendant to solicit such a customer unwittingly, that would not constitute a contempt. Mr Solomon also submits that there would have to be a cumbersome procedure in place for such a list to be held by the defendants' solicitors on a confidential basis. It would be quite inappropriate to present to any defendant himself a list of the customers in question.
I have considered this matter carefully. In the end, I accept Mr Solomon's submissions and I propose, subject to any further submissions there may be at the conclusion of this judgment, to make an injunction in the terms of paragraph 6a. I say immediately that it may be that it is far easier for there to be injunctions in respect of this part of the restriction rather than undertakings, commendable as it is that undertakings have been proffered at a late stage. I say that because of the differences in the wording of the various covenants and undertakings and the importance of consistency and ease of interpretation of the order. That is a matter to which we can return if necessary.
As to paragraph 6b of the draft order, there is no dispute about the proposed terms. It provides that the first defendant must not "in the course of any business concern which is in competition with any restricted business offer to employ or engage or otherwise endeavour to entice away from the company or any group company any restricted person". Nor is there any dispute about the terms of paragraph 6d of the draft order, provided the definition of restricted person in paragraph 8 is amended. As drawn at present in the draft order, that definition reads as follows:
""Restricted Person" means anyone employed or engaged by the Company or any Group Company and who could materially damage the interest of the Company or any Group Company if they were involved in any Capacity in any business concern which competes with any Restricted Business and with whom the Defendant dealt in the 12 months before the termination of the Defendant's employment."
What is proposed is that the words from "and who could materially damage" through to "Restricted Business and" should be deleted and the word "dealt" in the penultimate line replaced by the word "worked". Mr Solomon was content with those proposed amendments by Mr Devonshire during the course of submissions and I am content to make the injunction in those terms.
Nor is there any dispute over the terms of paragraph 6e, although an alternative formulation has been provided by undertaking. Paragraph 6e provides that the first defendant must not "be involved with the provision of goods nor services to (or otherwise have any business dealings with) any Restricted Customer in the course of any business concern which is in competition with any restricted business". I am content to make the injunction in that form, subject to any further discussion.
The restrictive covenant which remains the subject of dispute is paragraph 6d of the draft order, by which the defendant must not:
"... d. be involved in any Capacity with any business concern which is (or intends to be) in competition with any Restricted Business, save that this shall not prevent him from:
i. Holding an investment by way of shares or other securities of not more than 5% of the total issued share capital of any company, whether or not it is listed or dealt in on a recognised stock exchange;
ii. Being engaged or concerned in any business concern insofar as his duties or work shall relate solely to geographical areas where the business concern is not in competition with any Restricted Business; or
iii. Being engaged or concerned in any business concern, provided that his duties shall relate solely to services or activities of a kind with which he was not concerned to a material extent in the 12 months before the termination of his employment with the Claimant."
This restriction is of only six months duration. As the exceptions make clear, it restricts the first defendant only from involvement in a competing business in the geographical area served by Dorma's south west regional office. Mr Solomon accepted that proposition in the course of submissions and indeed he relies upon it as indicative of the reasonableness of the covenant. So too the exception in paragraph (iii) that there is no prohibition on activities of the kind with which the first defendant was not concerned to a material extent in the last 12 months of his employment with Dorma.
The starting point, of course, is that any covenant in restraint of trade is presumed to be unlawful. It is for the party who seeks to rely upon it to show that it is reasonably justified. Mr Devonshire relies upon the guidance given by the Court of Appeal in Office Angels Ltd v Rainer-Thomas [1991] IRLR214. There it was held that if a covenant between an employer and an employee designed to prevent competition by an employee after termination of the contract of employment is to be upheld as valid, it must be shown that there is an advantage or asset in the business which can properly be regarded as the employer's property and which it would be unjust to allow the employee to appropriate for his own purpose; the court must be satisfied that the restriction is no greater than is necessary in protecting the employer's legitimate interest. Mr Devonshire relies in particular upon a passage in the judgment of Sir Christopher Slade at paragraph 49:
"The court cannot say that a covenant in one form affords no more than adequate protection to a covenantee's relevant legitimate interests if the evidence shows that the covenant in another form much less far reaching and less potentially prejudicial to the covenantor would have afforded adequate protection."
Mr Devonshire submits that in the present case the interests requiring protection are customer connection and work force stability. He suggests that this is apparent from paragraph 44 of Mr Gilmour's witness statement, which describes the risks to the business of Dorma if an injunction is not granted by reference to those interests. However, as Mr Solomon points out, that is an incomplete reading of Mr Gilmour's evidence and of the terms of the restrictive covenant as a whole. In particular, it is important to note the recital to the post termination restrictions at paragraph 2.1 of the terms and conditions, at page 42 of the bundle:
"In order to protect the confidential information and business connections of the company and each group company to which he has access as a result of the employment, the employee covenants with the company ... [etc]"
In other words a critical legitimate interest requiring protection is the employer's confidential information. This ties in with subparagraph (d) under the heading restrictive covenants, at page 40 of the bundle, in the first defendant's contract of employment, which provides:
"In the normal course of employment with the company you will have access to and be entrusted with information as to the policy, organisation and management pricing, pricing policies, future plans and staffing of the company as to the persons with whom the company has dealings and upon what terms as to the nature, origin and composition of the company products, services and production techniques, all of which information is confidential."
Mr Solomon submits that non-competition covenants are often the only practicable solution to the difficulty of policing or enforcing confidentiality provisions. He cites the approach of the Court of Appeal in Thomas v Farr Plc [2007] EWCA Civ 118. At paragraph 42, Toulson LJ said:
"As was observed by Lord Denning MR in Littlewoods Organisation v Harris [1977] 1WLR 1472 at 1479 and by Waller LJ in Turner v Commonwealth and British Minerals Limited [2000] IRLR 114 at para 18, it is because there may be serious difficulties in identifying precisely what is or what is not confidential information that a non-competition clause may be the most satisfactory form of restraint, provided that it is reasonable in time and space."
The court went on to identify pricing and financial information as clear examples of information to which the employee was exposed during the course of his employment and which the employer was entitled to require to be kept confidential after termination of the employment. In this context it is relevant to observe that part of the evidence relied upon by claimant is that the first defendant has recently approached one of Dorma's engineers inviting him to join Arrow and has promised to beat the pay that that engineer was receiving at Dorma. The first defendant's special knowledge of the overall details of Dorma's business in the south west makes this, in my judgment, a classic case for the enforceability of a non-competition restriction. It is on the face of it reasonable "in time and space". I stress that it is not for me at this stage to decide the issue finally but there is certainly a serious issue to be tried, with a reasonable prospect of success in relation to the enforceability of this covenant. I therefore grant the injunction in the terms of paragraph 6d as well.
Restraint against Arrow
The final issue is whether Arrow should be restrained from causing, inducing, encouraging or permitting the other defendants to act in breach of orders made against them in this application. Very properly, Arrow have indicated that they are prepared to give an undertaking in this regard and, subject to any further submissions, it seems to me that that would be an appropriate way of dealing with that particular part of the relief sought.
That concludes my judgment. I repeat my gratitude to counsel for their very considerable assistance.
|
HHJ Peter Hughes QC :
Introduction
This is a contested application for permission to bring committal proceedings for contempt of court against the Respondents pursuant to CPR 81.18 in relation to statements made in support of a personal injury claim by the 1st Respondent.
The point raised by the application, on which I am told there is no existing authority, is whether it is ever appropriate to bring committal proceedings when the alleged contemnor has already been tried and acquitted by a criminal court on the same facts. It is well established that the fact that someone has been punished for contempt of court is no bar to a subsequent prosecution based on the same facts. This case raises the corollary to that situation.
In the background to the application is a sense of deep concern, felt by those who insure defendants to personal injury claims, about the increasing number of false and inflated claims. Insurers feel that there is a need for it to be made clear that such dishonesty will not be tolerated by the courts and will be punished as a contempt.
The Personal Injury Litigation
The 1st Respondent started proceedings in the Romford County Court in November 2009 against his former employers. He alleged that, two years earlier on the 10th December 2007, he had had an accident in the course of his employment as a London bus driver. In this he said that he had fallen and banged his head. He claimed to have sustained some minor brain injury resulting in post concussional syndrome and causing him to suffer dizziness, prolonged headaches and blackouts.
The claim was supported by a medical report from a neurologist, Dr. Cockerell. He recorded that the 1st Respondent had told him that he couldn't do anything around the house; that his son (the 2nd Respondent) had to be with him all the time, and that he stayed in doors and did nothing. Dr Cockerell trusted and accepted what he was told. He concluded that it was likely that the 1st Respondent had suffered some form of psychological functional seizure.
In July 2010 the Applicants' insurers admitted liability, for 90% of the claim, and made an interim payment of £50,000.
In support of the claim dealing with quantum, the Respondents each filed two witness statements. The statements were signed and verified by statements of truth. In each the Respondents sought to present the picture of a claimant who had been left seriously incapacitated and in need of constant care.
In his second statement of the 2nd October 2012, the 1st Respondent described himself as nervous to leave his home in case he blacked out. He said that he couldn't drive or do anything that involved heavy lifting and that he feared that he would never be able to work again.
His son, in his second statement dated the 1st June 2012, said that he had to be with his father all the time "to keep an eye on him to stop him going out". He said that there had been no improvement in his father's condition, and that, if anything, it was getting worse. He said that he had to drive him about as his father no longer held a driving licence.
The timing of these statements is significant, as they cover a period when the 1st Respondent was under surveillance arranged by the Applicant's insurers.
The initial period of surveillance covered two days in June 2012, the 27th and the 28th. Before it was carried out the investigators made various database checks and ascertained that the 1st Respondent had in the past been a director of a car wash business in Barnet and that the 2nd Respondent was registered as a director of a car wash business trading in Hilldene Avenue, Romford.
Extensive still and video images over the two day period show the 1st Respondent leading a seemingly normal life, leaving home in the morning, and attending at the Romford car wash premises. There he can be seen playing an active part in the business, driving vehicles, instructing others, and going to the bank alone on foot.
On the 15th November 2012, only six weeks after his second statement, the 1st Respondent flew from Luton to Skopje. He appears to have stayed in his native Kosovo until he took a return flight on the 5th March 2013. Whilst he was away his solicitors submitted an up-dated schedule of loss dated the 4th February 2013. The statement of truth was signed by his solicitor on his behalf. There is no suggestion that the solicitor was acting dishonestly, so he could not have been informed of his client's whereabouts.
In the schedule the 1st Respondent is described as in need of constant care and supervision and unable ever to work again. The value of the claim is put at £637,308, including £65,000 for general damages, £175,768 for future loss of earnings, and £177,504 for future care.
It was at this stage that the Applicant's insurers showed their hand. In a robustly worded counter-schedule, they asserted that the claim was a sham, and that the 1st Respondent, supported by his son, was intent on deceit.
The Applicants applied for the claim to be struck out as an abuse of the process of the Court, pursuant to CPR 3.4(2)(b), and for the repayment of interim payments, which by that stage totalled £125,000.
Having considered the surveillance evidence, the 1st Respondent's solicitors withdrew from the case.
The strike out application came before His Honour Judge Collender QC in the Central London County Court on the 15th August 2013. The 1st Respondent appeared in person and Mr Freeman represented the Applicants. Judge Collender viewed the surveillance evidence, and had no hesitation in concluding that the claim was fraudulent. He rejected the 1st Respondent's case that the two days of the surveillance were isolated incidents and capable of innocent explanation, with the words
"If that explanation had been true and was consistent with the disabilities suggested by the medical reports and detailed in the schedule of loss, then what one sees in the surveillance evidence would not have taken place."
Judge Collender struck out the claim, and ordered the repayment of the £125,000 plus costs on an indemnity basis. In addition, he directed that the case be transferred to the High Court to enable an application to be made for permission to bring contempt proceedings.
Subsequent events
Seven days after the hearing the 1st Respondent went back to Kosovo. He appears to have returned to the United Kingdom briefly over Christmas and New Year, and made further journeys between the two countries in early 2014. When he returned on the 26th March 2014, the Metropolitan Police were waiting for him. He was arrested the following day and remanded into custody.
On the 29th May 2014, the Applicants filed their application pursuant to CPR 81.18. They did not do so earlier, I am told, because of the 1st Respondent's absence from the country. The Respondents filed statements in answer to the application on the 21st July 2014. In these they reiterated the claim, rejected by Judge Collender, that the personal injury claim was genuine. The 1st Respondent asserted that he was continuing to suffer blackouts even whilst on remand in Wandsworth Prison.
On the 8th September 2014, the 1st Respondent stood trial at Southwark Crown Court on a single charge of fraud contrary to Section 1 of the Fraud Act 2006. The particulars of the offence alleged that between the 10th December 2007 and the 15th August 2013 he had
"made a false representation to [the Applicants] which was and which he knew was or might be untrue or misleading, namely, that he exaggerated the injuries that he claimed to have suffered in an industrial accident on the 10th December 2007."
After a three day trial, he was acquitted by the jury on the 11th September 2014. The verdict may seem surprising in the light of Judge Collender's observations, but these, of course, would not be before the jury, and the surveillance evidence, which I am told was. I have not seen a transcript of the proceedings, and it would not be right for me to comment further on the verdict.
The 2nd Respondent was not prosecuted. Apparently this is because the police or CPS took the view that there was insufficient evidence against him.
A final twist to the tale is that there was a second attempt to prosecute the 1st Respondent. This was a prosecution brought by the Department of Work and Pensions for fraudulently claiming benefits by not disclosing his true care and mobility needs. The case was based on the same evidence. It was stayed as an abuse of the process of the court by a judge sitting at Snaresbrook Crown Court.
The CPR and Part 81.18(3)
CPR 32.14(1) provides –
"Proceedings for contempt of court may be brought against a person if he makes or causes to be made, a false statement in a document verified by a statement of truth without an honest belief in its truth".
CPR 81(18) (3) provides –
"A committal application in relation to a false statement of truth or disclosure statement in connection with proceedings in the County Court may be made only –
(a) with the permission of a single judge of the High Court; or
(b) by the Attorney General."
This provision differs from CPR 81.18(1) which, in the High Court, enables the committal application to be made with the permission of the court dealing with the proceedings in which the false statement was made. Indeed, the recognised practice is that the judge hearing the proceedings can, and should in the absence of special circumstances, deal with both the permission application and the substantive hearing, as the trial judge is likely to be best placed to do so justly and economically; see Summers v Fairclough Homes [2012] UKSC 26 (at para. 39). This has the advantage of ensuring that the matter can be dealt with whilst it is still fresh and without delay.
There are a number of recognised factors to which the court should have regard in deciding whether or not to grant permission. These were drawn together by Hooper L.J. sitting in the Divisional Court in the case of Barnes t/a Pool Motors v Seabrook [2010 EWHC 1849 (Admin)]. At paragraph 41, Hooper L.J. said: -
"i) A person who makes a statement verified with a statement of truth or a false disclosure statement is only guilty of contempt if the statement is false and the person knew it to be so when he made it.
ii) It must be in the public interest for proceedings to be brought. In deciding whether it is the public interest, the following factors are relevant:
a) The case against the alleged contemnor must be a strong case (there is an obvious need to guard carefully against the risk of allowing vindictive litigants to use such proceedings to harass persons against whom they have a grievance);
b) The false statements must have been significant in the proceedings;
c) The court should ask itself whether the alleged contemnor understood the likely effect of the statement and the use to which it would be put in the proceedings;
d) "[T]he pursuit of contempt proceedings in ordinary cases may have a significant effect by drawing the attention of the legal profession, and through it that of potential witnesses, to the dangers of making false statements. If the courts are seen to treat serious examples of false evidence as of little importance, they run the risk of encouraging witnesses to regard the statement of truth as a mere formality."
iii) The court must give reasons but be careful to avoid prejudicing the outcome of the substantive proceedings;
iv) Only limited weight should be attached to the likely penalty;
v) A failure to warn the alleged contemnor at the earliest opportunity of the fact that he may have committed a contempt is a matter that the court may take into account."
I would also draw attention to the observations of Moses L.J. in South Wales Fire and Rescue Services v Smith [2011] EWHC 1749 (Admin) :-
"2. For many years the courts have sought to underline how serious false and lying claims are to the administration of justice. False claims undermine a system whereby those who are injured as a result of the fault of their employer or a defendant can receive just compensation.
3. They undermine that system in a number of serious ways. They impose upon those liable for such claims the burden of analysis, the burden of searching out those claims which are justified and those claims which are unjustified. They impose a burden upon honest claimants and honest claims, when in response to those claims, understandably those who are liable are required to discern those which are deserving and those which are not.
4. Quite apart from that effect on those involved in such litigation is the effect upon the court. Our system of adversarial justice depends upon openness, upon transparency and above all upon honesty. The system is seriously damaged by lying claims. It is in those circumstances that the courts have on numerous occasions sought to emphasise how serious it is for someone to make a false claim, either in relation to liability or in relation to claims for compensation as a result of liability.
5. Those who make such false claims if caught should expect to go to prison. There is no other way to underline the gravity of the conduct. There is no other way to deter those who may be tempted to make such claims, and there is no other way to improve the administration of justice.
6. The public and advisors must be aware that, however easy it is to make false claims, either in relation to liability or in relation to compensation, if found out the consequences for those tempted to do so will be disastrous. They are almost inevitably in the future going to lead to sentences of imprisonment, which will have the knock-on effect that the lives of those tempted to behave in that way, of both themselves and their families, are likely to be ruined.
7. But the prevalence of such temptation and of those who succumb to that temptation is such that nothing else but such severe condemnation is likely to suffice."
At paragraph 49 of the judgment, Moses L.J., having dealt with the merits of the case, and decided not to punish the contemnor because of delay in the case, added these general observation –
"The message as I would see it is that in future it is vital that these cases are dealt with with urgency and with speed, so that the all-important message of deterrence, the all-important process by which it is brought home to false complainants that the likely consequence is prison, can be underlined."
The Merits - Discussion
I have no hesitation in finding that the case against both Respondents is a strong one. The statements that are alleged to have been false where highly significant in the context of a large personal injury claim made on the basis that the claimant was permanently incapacitated and in need of constant care.
I do not consider that delay in itself is a sufficient reason to refuse permission, because the delay was initially attributable to the 1st Respondent's absence from the country, and thereafter to the criminal proceedings.
The factor that prompts pause for thought is the acquittal of the 1st Respondent in the Crown Court. Mr Douglas Day QC accepts that there is unlikely to be any material difference between the evidence relied on then and now in support of the present application.
It is well-established that the fact that a person has been punished for contempt of court is no bar to a subsequent criminal prosecution; see for example R v Green [Times July 14, 1992 (CA), (1993) Crim LR 46). There it was held that breach of a molestation order leading to a finding of contempt did not give rise to a valid plea of autrefois convict in subsequent criminal proceedings based on the same facts.
The rationale behind this and other decisions like it is to be found in the case of CPS v Tweddell [2001] EWHC Admin 188. In that case, Latham L.J. said:
"14. In domestic law contempt proceedings and criminal charges have different purposes. As far as the proceedings for contempt are concerned, as Lady Justice Hale said in Hale v Tanner, there are two objectives. Firstly, the court has to mark the court's disapproval of disobedience to its order; secondly, it has to consider how best to secure future compliance with the order. Those are two considerations which are quite different and separate from the considerations which are raised by a criminal charge. Unlike contempt proceedings, which are essentially proceedings between the court seeking to enforce its order and the contemnor, criminal proceedings are between the public and are concerned with different considerations.
15. The essential feature of a criminal charge is the attempt to protect public order; the necessity to punish offenders and in so doing both deter the offender and others from committing offences and therefore provide protection for the public. Incidentally, of course in relation to the sentencing process, there will be considerations relating to the rehabilitation of the offender. But the important feature of a criminal charge is the fact that it is seeking to ensure that there is proper sanction for those who break the law. Not a court's order, but the law.
16. It seems to me in those circumstances that there can in domestic law be no justification for concluding that merely because someone has, on a given set of facts, been found guilty of contempt of court, that should in any way preclude the appropriate prosecuting authorities from bringing criminal proceedings for the purposes to which I have referred.
17. It is not only those considerations which need to be emphasised. Further, a criminal conviction is a public sanction which has consequences which are of significance in relation to the protection of the public for the future. Further, it may or may not be that, in view of the considerations which affected the court when dealing with a breach of an injunction, the way in which the court dealt with that matter was appropriate in considering the public interest so far as punishment is concerned. By that I mean it may or may not be the case that given the facts of the particular case here, three months' imprisonment would be an appropriate criminal sanction. One can envisage cases in which the court dealing with the contempt application will deal with the matter in a wholly different way from the way in which the criminal courts may consider appropriate."
Had contempt proceedings been dealt with in this case before the criminal prosecution, and had the 1st Respondent been found guilty of contempt, on the authorities that would have been no bar to the criminal trial proceeding. The question is what should happen when the converse situation arises.
The Relevance of the 1st Respondent's Acquittal
Mr Day QC submits that permission should be granted notwithstanding the acquittal of the 1st Respondent. He submits that there is a strong public interest element that justifies the grant of permission. He says that if contempt proceedings are not permitted in a case such as this, it will tend to confirm an increasingly widely held belief in society that this type of financially motivated deceitful and manipulative behaviour is tolerated and, by implication, acceptable.
Additionally, he submits that the verdict of the jury does not mean that the 1st Respondent is innocent; only that the jury were not sure of his guilt. Juries do not give reasons for their decisions, and their decision contrasts with the reasoned judgment of His Honour Judge Collender QC.
Finally, he submits that the 2nd Respondent cannot shelter behind the verdict of the jury and that the just result is that father and son should have to face contempt proceedings together.
Mr Stephen Field, for the 1st Respondent, supported in brief submissions by Mr Martin Hodgson for the 2nd Respondent, bases his submissions largely on the principle of autrefois acquit. He, also, submits that permission to bring contempt proceedings should not granted where the allegations concern factual issues that have already been determined in the respondent's favour.
In this context he relies on a recent decision of His Honour Judge Cotter QC, sitting as a High Court Judge, in an unreported case, Ergun v Smith (10th June 2015). The case concerned a hotly contested property dispute between two litigants. The judge found that the application was an attempt to resurrect factual issues that had already been determined. The case comes within the principle set out by Hooper L.J. that care must be taken not to allow vindictive litigants to use committal proceedings as a way of perpetuating their grievance. In my view, it has no relevance to this case.
Double Jeopardy - Discussion
As the Court of Appeal observed in CPS v Tweddle, contempt proceedings and criminal proceedings can serve different purposes; one is to mark the court's disapproval of its orders and procedures not being complied with and to ensure future compliance; the other is to punish for criminal misconduct.
In most instances disobedience of the court's order will not involve the commission of a criminal offence. It is only where the offence is committed in breach of a court order (as with assault in breach of a non-molestation order) or where a false statement has been made in the course of litigation with the object of misleading the court that the contempt and the criminal offence arise together from the same conduct.
Where the contemnor is punished first by the civil court, the criminal court will take account of the punishment in sentencing the offender; see CPS v Tweddle (above, at paragraph 18 of the judgment). In the course of submissions, I asked Mr Day whether this application would ever have been made (at least against the 1st Respondent) if he had been convicted in the Crown Court and appropriately sentenced. Mr Day tried to convince me that the application would still have been made. Were that so, which I rather doubt, I do not think, though, that permission would have been granted. This is because the Respondent's misconduct would already have been publicly exposed and appropriately punished. No sufficient purpose would have been demonstrated to justify further proceedings for contempt.
The point was made by Moses L.J. in the Smith case that contempt proceedings need to be brought "with urgency and with speed". The same point was made by the court in the case of Green. The difficulty arises where the application for permission is made to the court only after the criminal proceedings have been concluded, and the case rests on the same evidence.
The answer does not lie, in my judgment, in pleas of autrefois acquit, but on broader considerations and the exercise of discretion whether or not permission should be granted.
In the recent case of R v J(JF) [2013] EWCA Crim 569, the Court of Appeal, presided over by the Lord Chief Justice, reviewed the law on double jeopardy and emphasised the narrow basis of the principle of autrefois acquit. The Lord Chief Justice cited with approval a passage from a case in the Supreme Court of the United States, Green v United States (1957) 355 US 184 at 187-8. Black J. said: -
"The underlying idea, one that is deeply ingrained in at least the Anglo-American system of jurisprudence, is that the State with all its resources and power should not be allowed to make repeated attempts to convict an individual for an alleged offense, thereby subjecting him to embarrassment, expense and ordeal and compelling him to live in a continuing state of anxiety and insecurity as well as enhancing the possibility that even though innocent he may be found guilty."
This is, in my view, a principle that is relevant to the exercise of discretion in the context of a case such as this.
Conclusions
In the case of the 1st Respondent, two important and competing considerations have to be weighed in the balance. The first consideration, relied on by the Applicant, is that the court should itself punish those who seek to rely on false statements in civil proceedings before it with a view to financial gain. The second, based on the principle of finality in litigation, is that the same allegations should not be litigated twice over.
Each case must be considered on its merits. I do not believe that the acquittal by the jury is an absolute bar to permission being granted for committal proceedings, but, in my view, permission is unlikely to be granted except, for example, where there is material evidence that was not before the jury, or where important new evidence has since come to light. This is not such a case.
Were permission to be granted, the judge hearing the committal application would be invited to reach a different conclusion to the jury on the same evidence and applying the same standard of proof. That is not an attractive proposition.
If it is inappropriate to grant permission to bring committal proceedings against the 1st Respondent, it must logically follow that it would not be appropriate to grant permission in his son's case. This is because the same problem would arise; that the judge was being invited to reach a different conclusion to the jury as the son's statement could not be found to be false without the same finding, by implication, being made in relation to the father.
For these reasons, and with reluctance, I refuse permission in the case of both Respondents.
The lesson in all of this is that emphasised before, that applications for permission to bring contempt proceedings need to be made without any delay. That applies particularly to cases before District and Circuit Judges, who hear the bulk of personal injury litigation, and where the trial judge does not have the power to grant permission to institute the proceedings.
This difference of approach may be something that the Civil Procedure Rule Committee might wish to consider in view of the importance of ensuring that those who make and rely on false statements to make bogus or inflated claims are punished speedily and effectively. The County Court is a creation of statute. Empowering judges who sit in the County Court to deal with contempt applications of this nature would require legislation, as it is not covered by Section 118 of the County Courts Act 1984, as amended. It might, in any event, not be felt appropriate having regard to the seriousness of the matter. It ought, though, to be possible to streamline the practice and procedure to ensure that applications arising out of County Court proceedings are referred to the High Court immediately and fast-tracked to ensure that a decision is made with the minimum of delay.
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His Honour Judge Butler:
INTRODUCTION
The claimant, GB, was during the two football seasons of 1986/87 and 1987/88 a youth trainee (apprentice footballer) with the first defendant, Stoke City Football Club Limited (hereinafter called simply "the club"). During those seasons (and indeed between 1978 and 1992) the second defendant, Peter David Fox, was employed as a professional footballer by the club and was the regular first team goalkeeper.
A trial of the preliminary issue of limitation ("the limitation trial") in this case took place over four days between 4th and 11th December 2013 and I delivered a reserved judgment on 31st January 2014. It will be appropriate occasionally to quote from that previous judgment, but I hope to avoid unnecessary repetition and the terms of that judgment should be regarded as being fully incorporated by reference into this judgment. Counsel for all three parties were in agreement that the earlier trial, at which some oral evidence was given by claimant and two witnesses (one also gave evidence at the substantive trial and the other was made the subject of a hearsay notice at that trial), should be regarded as being part of the whole trial process, the procedure adopted having been that sanctioned by the Court of Appeal in B v Nugent Care Society [2009] EWCA Civ 827.
The primary limitation period had expired on 25th July 1991 but I granted the claimant's application under section 33 of the Limitation Act 1980 by exercising my discretion to direct that section 11 of the Act should not apply to his present claims against both defendants. I considered that a fair trial would still be possible. He was accordingly enabled to bring these claims notwithstanding that the relevant allegations go back nearly thirty years in time. These claims are based on his allegations that on two occasions, once in 1986 and once in 1987, the second defendant was guilty of trespass to his person (assault by battery). As against the second defendant the claimant claims damages for injury and loss allegedly caused by those tortious acts. As against the club he claims damages on the basis of its vicarious liability for the tortious acts of the second defendant as its employee.
As originally issued and pleaded, the claimant's case included a further claim in the nature of a "direct negligence" claim against the club on the basis that it was in direct breach (by its officers, directors or managers) of a duty of care to take reasonable care for the safety of apprentices and in particular to prevent assaults of any kind being committed upon them by professional players. The additional claim no longer proceeds because I refused to exercise my discretion under section 33 of the 1980 Act to disapply the primary limitation period applicable to that claim. Unlike the statute-barred "direct" claim against the club, the "vicarious" claim against it does not depend upon the club, by its officers, directors or managers, being shown to have been at fault independently of the alleged acts of the second defendant.
Background
The general background facts of the matter and the chronology of relevant events remain relatively uncontroversial. The claimant was born on 25th July 1970 in Northern Ireland. In early July 1986, shortly before his sixteenth birthday, he moved to England to take up a position as an apprentice with the club, then based at the Victoria Football Ground, Stoke-on-Trent, Staffordshire. During the two seasons in question, the club was positioned in League Division Two and during both those seasons the second defendant was its regular first team goalkeeper. He made 477 appearances for the club during his fifteen years' tenure, whereafter he moved on to coaching or managerial work at other football league clubs. At the substantive trial, the claimant told me that it had been his dream to become a professional footballer and, as at the previous hearing, I have had no difficulty whatever in accepting the truth of that statement. In common with other apprentices at that time, he was enrolled as a youth trainee on the youth training scheme (YTS) provided by the government of the day and although much of his time and theirs was spent in training under the general direction of the youth development leader (youth coach) Mr Tony Lacey, he also attended at a local college one full day a week. I remain of the view previously expressed (see paragraph 12 of my judgment dated 31st January 2014) that the most appropriate description of him at that time would be that he was a "young person", not a "child". He had left school. He attained the age of 16 on 25th July 1986. No copy of his training contract has survived, but it was accepted that it probably bore the same date as those of others, which have survived, that is to say 7th July 1986. On his own evidence he would have been 16 years old at the time of the first alleged assault and would have been 17 years old by the time of the second alleged assault, although as will be seen the evidence of other witnesses at the substantive trial gave rise to some uncertainty as to whether his recollection of the timing of that second assault (if it happened at all) is correct. Certainly, if he is correct, no apprentice who had already embarked upon his second year of apprenticeship in the season 1986/87 could have witnessed the second assault which he described.
There is one correction and one addition to make to the recital of facts in my earlier judgment. The correction is that at the time of the limitation trial I understood that he had remained at the club until July 1988 (a full two calendar years). However, it now appears from the evidence given at the substantive trial that he probably left at the end of the football season, in about late May 1988, by which time he had been informed by Mr Mills, the first team manager, that he was not to be retained either on a short professional contract or on a non-contract basis. The addition is that I now find as an uncontroversial fact that he remained in Stoke-on-Trent until his return home to Northern Ireland in January 1989 living at his then-girlfriend Catherine's home. Her parents (in fact her mother and stepfather) also lived there.
Representation
At the outset of this judgment, I should express my thanks to all three counsel involved in the case, Ms Aswini Weereratne QC for the claimant, Mr Nicholas Fewtrell for the club and Mr Joseph Mulderig for the second defendant. (Mr John McNeill, who represented the second defendant at the trial of the preliminary issue has, as I understand it, since retired from professional practice). All three trial counsel produced detailed written skeleton opening arguments and made clear, thorough and persuasive oral closing submissions. I am grateful to all of them for their industry and for the generally courteous spirit in which the case was conducted between them, notwithstanding that it was necessary for each of them on instructions to put allegations of the most serious and unpleasant nature to the opposing parties and witnesses.
Procedure
The trial bundle consisted of four full lever arch files, supplemented by a bundle of authorities and by copies of the official transcripts of the evidence of the claimant and the two witnesses whose evidence was called before me orally in December 2013. Those transcripts were (belatedly) obtained because of the agreement that their evidence given at the limitation trial constituted evidence in the substantive trial. It had initially been hoped that the availability of those transcripts might substantially shorten the cross-examination of those witnesses (in particular the claimant) although of course the defendants might also have hoped to make capital out of any differences between what had been said in December 2013 and what would be said in July 2015. As matters turned out, it was not possible for the official transcribers to provide the transcript of the claimant's earlier evidence until after his cross-examination had concluded and so unfortunately it was not possible for that cross-examination to be shortened. The fact of a change of counsel also meant that I considered it to be important not to restrict the ability of Mr Mulderig to challenge the claimant's account comprehensively by cross-examination. The transcripts of the evidence of the two witnesses were available before the former gave evidence at the substantive trial.
As to the specified causes of action which, notwithstanding the delay, I allowed to proceed on the basis that the ability of both defendants to defend had not been materially affected and that a fair trial would be possible, it is important to note that I was not called upon to make any findings of fact at the limitation trial. I am satisfied, from the way in which the substantive trial was conducted and the amount of oral and documentary evidence capable of being adduced, that a 'fair trial' was indeed possible. I do however record the fact that two of the claimant's witnesses, one of whom became potentially his most important witness, had not given statements at the time of the limitation trial so that, when considering the cogency of evidence, I did not have their evidence before me. Had I been aware at that time that the claimant would be relying at trial so heavily on (a) similar fact evidence of events in 1985 and (b) the evidence of recollection of something heard in a radio broadcast (of which no recording survives) on an unspecified date between 1986 and 1988 I might have found it more difficult to disapply the limitation period because of the obvious additional difficulty for a defendant having to answer such evidence. However, on balance I am satisfied that this belated evidence did not tip the balance against either of the defendants to such a degree that it rendered the trial unfair by preventing them from deploying their defences fully.
I reserved my judgment having regard to the nature of the case, the length of the trial (13 days), the number of witnesses, the amount of documentation and the considerable public interest shown in the case (as demonstrated by the attendance in the court each day of representatives of media and football organisations). A draft of this judgment was circulated to all three counsel for editorial corrections before handing down.
Volume and page references in parenthesis (for example '1, C1' standing for 'volume 1, page C1') in this judgment refer to the trial bundles, unless otherwise indicated.
THE CLAIM
I have already indicated briefly what this claim is about. More specifically it is whether: (a) the claimant was physically assaulted by the second defendant on either or both of the alleged occasions; (b) if so whether the club as the second defendant's employer at the time is vicariously liable for his tortious act or acts; and (c) whether (and to what extent) the claimant has suffered personal injury and/or pecuniary loss as a consequence thereof. It is in my judgment, having regard to the public interest in this case, also important to state expressly what this claim is not about. Firstly, it is not about alleged systemic or institutional neglect or abuse of apprentices at this club during the 1980s or at any time. Secondly, it is not about any lack of care for and/or abuse of apprentices at any other football club at that time or at all. Thirdly, it is not about the rights or wrongs, legal or moral, of any 'initiation rituals' which might in the past have been or may even now still be a feature of life as a football player at any level. Suggestions made in evidence and in submissions of a culture of bullying and/or punishment rituals at this or other clubs in the past may be matters to be considered or determined in other proceedings involving other claimants against this or other clubs in other courts.
Ms Weereratne QC suggested on more than one occasion that it was well known that misbehaviour of various kinds was a feature of football league dressing rooms, to which both defendants' counsel objected that no admissible evidence to support that suggestion had been adduced in this case. The defendants' counsel were correct and in any event the alleged notoriety of the matters suggested was, as I publicly said, unknown to me. Insofar as such allegations were raised as against this club, the effect of my refusal to disapply the primary limitation period in respect of a "direct" claim against the club prevents the claimant from pursuing such allegations which were, in my judgment, in any event not relevant to the questions of whether (a) in fact he was assaulted as alleged or (b) the club should be held vicariously liable for such assaults as he might prove.
For the avoidance of doubt, to the extent that there was reference to an alleged ritual (whether of initiation or punishment) described as "blacking", that is to say application of boot polish to the genitals of male apprentices or players, the claimant does not allege that any such practice was ever applied to him. It is accordingly not relevant to consider whether as a matter of fact it occurred at this club at any time or to consider any argument that such physical contact would have been considered generally acceptable in the ordinary conduct of everyday life in workplaces generally or in particular in male sports workplaces during the 1980s or more recently.
It was no part of the second defendant's defence that the punishment actually alleged by the claimant, known as "gloving" or "the glove" (as described in paragraph 20 of my previous judgment), could have been justified by any such argument. The second defendant denies not only that any such practice was applied by him to the claimant in 1986/7 but also that it was ever applied by him to anyone before or since. The club denies that any of its officials were aware of any such practice and did not seek to raise any argument by way of justification of such a practice (which was denied) on the basis that times had changed. Mr Fewtrell, for the club, urged me not to risk any confusion between civil wrongs and criminal offences, but as I understood it, he accepted that if the claimant did indeed suffer "the glove", then an offence or offences of indecent assault contrary to Section 15(1) of the Sexual Offences Act 1956 was or were probably committed by the perpetrator. However, I am not called upon to consider whether any criminal offence was committed but rather whether any tort was committed, as to which the claimant bears the burden of proof.
Burden and standard of proof
The burden of proof is not, of course, the starting point but the end point of a case such as this because it is first necessary for the court, if it can, to find the facts. No judge likes to decide cases on the burden of proof if he or she can legitimately avoid having to do so. A judge should only resort to the burden of proof where he or she is unable to resolve an issue of fact or facts after having unsuccessfully attempted to do so by examination and evaluation of the evidence: see Verlander v Devon Waste Management Limited [2007] EWCA Civ 835 at [19]. Those cases where resort to the burden of proof is necessary to decide the case are sometimes described as being "exceptional": see Verlander at [24] explaining the earlier case of Stephens v Cannon [2005] EWCA Civ 222. If the available evidence is so conflicting or uncertain or falls so short of proof that there is nothing left but to conclude that the party bearing the burden of proof has not proved his case so that the court is unable to find the facts on the balance of probabilities, it must then ask where the burden of proof lies and apply the burden against the relevant party (that is to say to give the benefit of doubt to the other party). In this case, on all issues, the party bearing the burden of proof is the claimant. It follows that my duty is to examine and evaluate the evidence and in doing so to assess the credibility or reliability of the witnesses and to try to resolve all disputes of fact on the balance of probabilities, but to the extent that I cannot do so, the burden must be applied against the claimant and consequently the benefit of any doubt must be given to the second defendant.
The standard of proof is the balance of probabilities. It may be unnecessary to say more than that but I will do so simply because there appeared to be a conflict or at least a difference of emphasis between the submissions of Ms Weereratne QC and Mr Mulderig in their respective skeleton openings. Mr Mulderig, referring to Re H [1996] AC 563, cited part of Lord Nicholls' opinion at page 586 where he said that "the more serious the allegation the less likely it is that the event occurred and hence the stronger should be the evidence before the court concludes that the allegation is established on the balance of probability" and went on to say that "deliberate physical injury is usually less likely than accidental physical injury" and "that the inherent probability or improbability of an event is itself a matter to be taken into account when weighing the probabilities and deciding whether on balance the event occurred".
Ms Weereratne QC made clear that she relied on the more recent case of Re B [2009] 1 AC 11 and submitted that there is no heightened standard of proof in such a case as this. In my judgment, the submissions of Ms Weereratne QC are correct and I think it fair to say that Mr Mulderig did on reflection concede the point. For the avoidance of doubt, there is in my judgment a single civil standard of proof on the balance of probabilities, that is to say proof that the facts in issue more probably occurred than not. It is the simple balance of probabilities, neither more nor less, and the inherent probabilities are simply something to be taken into account where relevant in deciding where the truth lies. There is no sliding scale requiring stronger evidence the more serious the allegation or the more serious the consequences. Those points were clarified by the House of Lords in Re B, when explaining the earlier decision in Re H. It follows that "serious cases" do not require a different standard of proof, a heightened standard of proof or a specially cogent standard of evidence. The court must of course give appropriately careful consideration to the evidence before being satisfied of the matter which has to be established and must look with care at accusations which potentially give rise to serious consequences but nevertheless, in determining whether or not they occurred, the court must apply a single unvarying standard, that is to say the balance of probabilities.
The nature of the alleged assaults
I have considered how the alleged assaults should be described for the purposes of this judgment (and indeed in any media publication). The claimant's own evidence is that he regarded them as "physical" assaults until he attended the child protection course in 2008, twenty years after the events, whereupon it seems he considered that they might be "sexual" assaults. It is undoubtedly the case that between the late 20th century and the early 21st century there has been a reconsideration and to some extent redefinition of acts which might then not have been, but are now, properly described as "sexual" acts, whatever the motivation of the perpetrator might be: see for example section 3 of the Sexual Offences Act 2003 (the new offence of assault by penetration). At the relevant time (1986/87) the acts described by the claimant, if proved to the full extent alleged, would probably in my judgment have constituted an indecent assault for the purposes of the criminal law then in force: see section 15 of the Sexual Offences Act 1956. However, it was not (to my recollection of practice at that time) conventional in those days to use the criminal terminology for the purpose of civil proceedings. In a case such as this it is more likely that the more general terms "trespass to the person" or "assault by battery" would have been used. It is I think very important to say at the outset that this is not a case of historic sexual abuse of the kind exemplified by a number of the cases cited to me both at the limitation trial and at the substantive trial. That is to say, it is not a case of assaults being committed in secret by an adult male or males against a teenage boy targeted for the purpose but a case, according to the claimant, of what was in effect an "accepted practice", perhaps carried on behind closed doors but not shielded from the eyes of witnesses in the shape of whichever professional players or apprentices might happen to have been in the home team dressing room at the relevant time. It would not in my view be appropriate to substitute 21st century criminal terminology for the criminal (or civil) usage of the relevant time. Nevertheless, simply to describe what the claimant alleges as "assaults" would not really do justice to the seriousness of what is alleged.
In that context, it is important to note that this claim is not presented and was never pleaded as a claim for "sexual" abuse, in the sense that there is no allegation or even suggestion of a sexual motivation on the part of the second defendant (or his three alleged accomplices). Nor is it suggested that the claimant was targeted for assault or abuse in isolation or secret. Quite the contrary, his case is that he was one of a number of apprentices who were so assaulted, albeit on only one or two occasions over a two year period. In her skeleton opening argument Ms Weereratne QC specifically stated that "these are not sexually motivated assaults". She categorised them as "intimate physical assaults". I propose essentially to adopt her suggested formulation and to describe the alleged assaults as serious intimate physical assaults. In my view, that is how they should be described in any wider reporting of this case.
The law relating to proof of trespass to the person
As a matter of law, an assault may be defined as an act by which one person intentionally or recklessly causes another person to apprehend immediate unlawful personal violence or to sustain unlawful personal violence and assault by battery may be defined as the intentional or reckless application of unlawful force by one person to another. In the criminal context, there must be a "hostile intent" on the part of the first person and an absence of consent on the part of the victim, but proof of the criminal offence of common assault does not depend upon whether any bodily harm has been suffered. In tort, the particular conduct alleged (in this case the application of "the glove") must be intended by the first person but his motive, that is to say the reason why he acted as he allegedly did, is irrelevant to liability. The basic general principle is that a person is entitled to be free from unauthorised physical contacts. A claimant must establish that a defendant intentionally or recklessly subjected him to a contact to which he did not consent but no "hostile intent" in the sense of malice or ill-will is required. It was a particular feature of this present case that the claimant and some of his witnesses made clear that they did not believe that there was any "malice" on the part of the second defendant. Indeed, perhaps surprisingly, if what he described was accurate, the claimant's witness Mr Lomas said that he retained respect for the second defendant even after he had himself (allegedly) received the glove and further that he remained grateful to the club and in particular the youth development officer Mr Lacey for making him the (apparently successful) man he had become.
Thus there is at common law no need for the claimant to prove that the second defendant intended to cause him injury, whether physical or psychological. What he must prove is that the second defendant intended the conduct not that he intended any harm by it: see Clerk and Lindsell, 21st Edition, paragraphs 1-61 and 1-62. That textbook does however suggest that the intention to impose the contact (that is to say the intention to act as alleged) should be "coupled with an understanding that the contact exceeds what is acceptable". This appears to be based upon the combined effect of the decisions of the Divisional Court in Collins v Wilcock [1984] 1 WLR 1172 and the Court of Appeal in Wilson v Pringle [1987] QB 237, both of which coincidentally were decided just before the alleged occurrence of the conduct of which the claimant complains. Collins was not a civil case. It was an appeal by case stated from a magistrates' court to the High Court, but in the course of his judgment Robert Goff LJ considered the principles underlying the common law at pages 1177 to 1178. That section of his judgment was quoted in full in, and approved by, the judgment of the Court of Appeal in Wilson at pages 250 to 252. It is a long quotation. The principles set out in it are authoritative and binding upon me. I have had regard to the full quotation as set out in Wilson and it is I think only necessary for the purpose of this judgment to quote a small portion of it, as follows:-
"We are here concerned primarily with battery. The fundamental principle, plain and incontestable, is that every person's body is inviolate. It has long been established that any touching of another person, however slight, may amount to a battery … the effect is that everybody is protected not only against physical injury but against any form of physical molestation. [S]o widely drawn a principle must inevitably be subject to exception … but, apart from these special instances where the control or constraint is lawful, a broader exception has been created to allow for the exigencies of everyday life. Generally speaking consent is a defence to battery and most of the physical contacts of ordinary life are not actionable because they are impliedly consented to by all who move in society and so expose themselves to the risk of bodily contact … [A]lthough such cases are regarded as examples of implied consent, it is more common nowadays to treat them as falling within a general exception embracing all physical contact which is generally acceptable in the ordinary conduct of daily life".
These cases are authority for the proposition that a defendant will not be held liable in damages for the tort of assault by battery if his intended conduct does not go beyond generally acceptable standards of conduct.
At one stage early in the substantive trial it seemed that the argument might be advanced (as it seemed to have been at the limitation trial – see paragraph 37 of my previous judgment) that even if the practice of "gloving" occurred and I were to find as a fact that it was applied to the claimant by the second defendant, there should be no liability for that conduct because times had changed and at the relevant time, nearly thirty years ago, it was conduct which would have been generally acceptable if not in all sectors of ordinary life then at least in the context of a workplace which was a male sporting environment. However, it is important to record that no such submission was made by Mr Mulderig in his closing submissions and that Mr Fewtrell in his closing submissions expressly disavowed any intention to raise such an argument. Indeed the second defendant, in addition to denying that he applied "the glove" to the claimant (or anyone else), made it clear that it was not a practice that he would have found acceptable and none of the witnesses called on behalf of either defendant said that they would have regarded that practice (the occurrence of which they all denied or said they were unaware of) as being acceptable whether to themselves personally or to other sportsmen or to the public generally during the 1980s. This was not a case in which any witness for either defendant admitted that such practices went on, or might have gone on, but sought to defend or justify them on the basis that they were acceptable at the time. Paradoxically, it was the claimant's witness PL who described it as being "just what happened" or "the accepted punishment" which the apprentices "normalised" and his witness BD who described it as "just what happened in those days" and as "part and parcel of getting a contract".
At the conclusion of the evidence it was clear that there remains a stark conflict and that there is no basis for any middle way. Either the claimant was assaulted in the manner he alleges (including digital anal penetration) or he was not or, perhaps more accurately, either he can prove on the balance of probabilities that he was so assaulted or he cannot. In my judgment, it is plain that if the claimant does prove that what he alleges did occur then such conduct not only went beyond the standard of conduct that would be generally acceptable now but also that which would have been generally acceptable thirty years ago.
THE ISSUES
In his application to the Criminal Injuries Compensation Authority on 24th April 2009 (2, B25), in relation to each of the two occasions alleged, the claimant described "digital penetration of the anus by Peter Fox whilst I was being held down by others during a training session with Stoke City Football Club, Ralgex was involved". Although the specific proprietary description of the rubbing ointment or gel in question has varied (being also described as "Deep Heat") the essence of the allegation is that before insertion of a finger into the claimant's anus, the second defendant put on a football/goalkeeper's glove, smeared it or at least a finger (the middle finger) with a hot rubbing ointment or gel and then applied his gloved hand to the claimant's bare backside, not simply running the finger over or between the buttocks but inserting it into the anus and holding it for a few seconds. The claimant has never been able to be specific as to the precise dates on which either of the assaults occurred, but he has been relatively consistent (since first revealing the alleged occurrence of these events in about 2009) in saying that the first assault occurred within four to eight weeks of beginning as an apprentice in the 1986-87 and that the second assault occurred between twelve to fifteen months later during the 1987-88 season. If correct, that would mean that the first occurred during the month of August 1986 and the second at some time between August and November 1987.
In opening, Ms Weereratne QC confirmed that the claimant did not allege that the second defendant was personally responsible for other alleged discrete assaults particularly associated with the second incident (slapping of his backside and the placing of a hot teapot on it). If these occurred they were perpetrated by other players of whose identity he was not sure but in so far as he suspected individuals he had not joined them as defendants. They would have caused only minimal or at worst minor temporary injury in the form of pain and discomfort but in any event he did not seek to recover damages for this against the second defendant.
The issues arising for determination are as follows:-
(1) Did the first assault, as described by the claimant as having been perpetrated upon him by the second defendant, in fact occur?
(2) Did the second assault, as described by the claimant as having been perpetrated upon him by the second defendant, in fact occur?
(3) If either or both of the alleged assaults occurred, is the first defendant (the club) vicariously liable for those assaults?
(4) Did the claimant suffer any and if so what injury or loss? In particular:-
(a) did he suffer psychiatric/psychological injury in addition to any admittedly short-lived pain and physical symptoms;
(b) did he suffer any long-term psychiatric/psychological symptoms in and after 2008 when reliving the events for the purposes of the police investigation, criminal injuries compensation claim and civil proceedings;
(c) did he suffer pecuniary loss in the particular form of loss of the chance of earnings as a professional footballer greater than the earnings in fact achieved in his other employments to date?
In relation to issue (3) it is agreed between counsel for the claimant and counsel for the club that when considering vicarious liability a two- stage test must be applied, namely:-
(1) Is the relationship between the club and the second defendant capable of giving rise to vicarious liability?
(2) What is the connection that links
(a) the relationship between the club and the second defendant, and
(b) the act or omission of the second defendant?
The club concedes that the first stage of the two-stage test is satisfied in that the relationship of employer and employee between the club and the second defendant is capable of giving rise to vicarious liability. However, the question of vicarious liability on the part of the club only arises if the claimant proves that he was assaulted by the second defendant on either or both of the alleged occasions.
EVIDENCE
Witnesses of fact
I heard oral evidence in support of the claimant's case from the claimant himself and from seven witnesses. Four of them had been apprentices at the club at or about the same time as the claimant, whether during the same two-year period or overlapping from a previous apprenticeship cycle, namely BD, IG, Philip Howard, and NP (the latter of whom had also given oral evidence at the trial of the preliminary issue). I heard oral evidence from PL, who had not been an apprentice during any part of the claimant's two-year period at the club but who had been an apprentice just prior thereto and who gave what was in effect similar fact evidence. I heard oral evidence from John Washington, whose witness statements were served belatedly during the trial. He was not an apprentice at the relevant or any time. He is a long-term supporter of the club. He was the subject of an application for permission to rely on his late evidence, which I granted. I heard evidence from Dennis Hill, who had known the claimant after his return to Northern Ireland, who had no connection with the club and whose evidence did not relate to the occurrence or otherwise of the alleged assaults but to matters relevant to causation or quantum of damages. The evidence of a further witness who had been an apprentice at the same time as the claimant, namely JE, was admitted under the provisions of the Civil Evidence Act 1995 because, although he had attended to give evidence at the trial of the preliminary issue, he was unfit to do so at the substantive trial.
Neither the second defendant nor any other witness for either defendant had given oral evidence at the trial of the preliminary issue. At the substantive trial I heard oral evidence from the second defendant and from five witnesses in his support. The first three were George Berry, Steve Parkin and Carl Saunders. The other two witnesses, whose evidence was obtained in response to Mr Washington's evidence, were Nigel Johnson and Ivan Gaskell. In support of the club I heard the oral evidence of Michael Mills and Anthony Lacey and the evidence of the club's third witness Cyril Chung was admitted under the Civil Evidence Act 1995 because he too was unfit for medical reasons to attend the trial to give oral evidence.
Where possible and appropriate I will identify evidential conflicts and indicate findings of fact in the course of my review of the evidence. When doing so, I will probably not refer to every single point of evidence to which my attention was drawn and I will probably not specifically deal with each and every submission made but I will endeavour to make findings, if possible, on the essential issues addressed in closing submissions.
Anonymity of witnesses if judgment published
Before dealing with the evidence in detail I should refer to the fact that during the trial the question arose as to whether any or all parties or witnesses should be anonymised for the purpose of any publication relating to the trial, including this judgment. Although, as I have already noted, it is not and never has been the claimant's case that the alleged assaults were "sexual" and it has never been his case that they were sexually motivated, it is his case that they were "serious and intimate assaults including digital anal penetration with the finger of a goalkeeping glove … intimate physical assaults with severely aggravating features". As already noted, counsel appeared to agree that any such assaults would have constituted not only a tort but also the 'old' criminal offence of indecent assault. On the sixth day of trial, it was pointed out to me that such 'old' offence is listed in section 2 of the Sexual Offences (Amendment) Act 1992 as an offence to which that Act applies: see section 2(1)(a) and (2)(l). Section 1(1) of that Act provides that:
"Where an allegation has been made that an offence to which this Act applies has been committed against a person no matter relating to that person shall during that person's lifetime be included in any publication if it is likely to lead members of the public to identify that person as the person against whom the offence is alleged to have been committed."
Although the Act is described as one which makes "provision with respect to anonymity in connection with allegations of and criminal proceedings related to certain sexual offences" it was submitted by Ms Weereratne QC, with whom counsel for both defendants agreed, that it applied even where the relevant "allegation" was made outside criminal proceedings, as for example by a claimant or witnesses in a civil case such as the present case. I do not find it necessary to decide definitively whether that submission is correct or not. The Act provides no power for the court to make any order restricting publication of a complainant's name, although if section 1 is contravened a criminal prosecution may follow.
I was told by counsel that the claim, the limitation trial and the substantive trial had attracted attention in both traditional and online media. Indeed that fact featured in the evidence of several witnesses and was particularly pertinent to the evidence of PL and Mr Washington. The effect of the legislative provision appears to be that it is for those responsible for publication (such as reporters and editors) to ensure that the provisions which protect the public identification of a complainant in a "sexual case" are obeyed, not because enjoined to do so by judicial order but because that is a statutory requirement: see R (on the application of the Press Association) v Cambridge Crown Court [2012] EWCA Crim 2434. In the present case the only witness who was an apprentice at the time but who makes no personal complaint appears to be Mr Howard. The claimant's other witnesses Mr Dennis Hill and Mr John Washington were never apprentices and so are of course not within this category at all. It may or may not be that that those who have identified themselves by name or allowed photographs to be published have waived anonymity but I need not say more than that for the purpose of this judgment but if the Act applies it seems to me to cover the publication of court judgments whether in a formal law report or other media. It follows that if this judgment were to be so published the claimant and all other witnesses to whom the 1992 Act applies should from abundance of caution be identified by their initials (for example 'GB' for the claimant) but they were all referred to throughout the public trial by their proper names and so for the purposes of the handed-down judgment I have referred to them by those names.
I should add that in JE's case a further specific reason for anonymity would be that he was involved in criminal proceedings (not involving any allegation against the second defendant) in which he had already been afforded permanent anonymity as a complainant by operation of law, even though those criminal proceedings have now concluded, there having been a "not guilty" verdict entered on 1st September 2015 by direction of a judge following the offering of no evidence by the Crown (a fact which it was agreed was admissible but not relevant to the issues to be determined).
Adverse inferences from absence of potential witnesses
Mr Fewtrell cited the case of Wisniewski v Central Manchester Health Authority [1998] Lloyd's Rep 223 (CA) for the principles enunciated by Brooke LJ at p. 240. He submitted that an adverse inference should be drawn against the claimant arising from his failure to disclose any witness statements from and call as witnesses a number of people whose names were mentioned in evidence as being people who knew or might be expected to know of the use of "the glove" (one Mr Shaw or others who may have had contact with the press) or of his alcohol misuse and its effects (his mother, his ex-wife and his eldest two daughters) or to whom he said that he had complained of the assaults at least in general terms within a year or two after they had occurred (a friend called Mr Millen). No explanation was given in evidence for their absence (although counsel suggested that a desire to keep the length and cost of the litigation or simple privileged legal advice might be factors). Ms Weereratne QC made the same point in relation to the fact that the defendants (in particular the first defendant) had not called, for example, any other first team players or former apprentices from the mid-1980s named in the contemporaneous documents. No explanation was given in evidence for their absence either (although counsel suggested that the long delay and again possibly privileged legal advice might be factors). It is surprising that at the very least the court did not hear from Mr Millen, who might be thought to have been a good witness (if not necessarily "his best" as I suggested in my judgment on limitation). The claimant said in December 2013 that he was or was able to be in touch with his old friend and he had permission to file and serve statements of further witnesses before the substantive trial, which permission he used to disclose a statement from PL but not from Mr Millen.
I find that the mere absence of such potential witnesses for the claimant is not of itself sufficient to allow to me to draw the specific inferences either that they have been approached but refused to perjure themselves or that the claimant has instructed his solicitors not to approach them because he knows that they will not support him (because what he has claimed is untrue) if brought to court and examined on oath or affirmation. Equally, the mere absence of such potential witnesses for either defendant is not of itself sufficient to allow me to draw the specific inference that there are others who know of the alleged "gloving" practice and will not perjure themselves or that the defendants are not willing to take the risk of what they might say if brought to court and examined on oath or affirmation. This is not a case in which it would be fair or just to any of the parties to decide the case on mere inference, adverse or otherwise, and I do not propose to do so.
THE CLAIMANT'S WITNESSES
GB
I will not repeat my assessment of the claimant's evidence given at the limitation trial, for which reference may be made to my previous judgment. It is however necessary to deal with his evidence at the substantive trial in some detail because his reliability and credibility are very much in issue.
He again verified his first witness statement (1, C1) made on 3rd January 2013 and he also verified his supplementary statement (1, C11A) made on 30th April 2014 and his statement to the police (3, EB1) made on 8th April 2009. By way of correction or amplification he said that whilst he still could not recall the precise date of the first incident, he now believed it to have occurred within the first six to eight weeks after starting in early July 1986. He said that it was certainly within the first couple of months. This located the incident in late August or just possibly September 1986. In relation to the second incident, he again confirmed his memory that this had occurred twelve to fifteen months later, following a training match. He explained that a "training match" was to be distinguished from a "reserve match". Reserve matches were played in a minor league called the Central League against other clubs, usually on Wednesday nights, whereas training matches were internal games, played at the Victoria Ground or elsewhere with teams comprising a mixture of professionals and apprentices. He also produced by way of late disclosure an additional bundle of 35 pages for insertion into volume 3 containing programmes and extracts from statistical data demonstrating that even professional players, such as the second defendant, would occasionally play in the Central League reserve matches. He was taken through a list of about a dozen matches during the 1987/88 season to demonstrate that on most occasions the reserve team did include a small number of first team players. This was not challenged. It is contemporaneous evidence which contradicts the apparent assertion made in the statements of the second defendant's witnesses to the effect that the professionals and apprentices did not mix but were essentially kept separate. In oral evidence this was not their position. On the other hand, perhaps not intended by the claimant, it is also contemporaneous evidence of his performance as a player. During the 1986-87 season, the claimant played in six reserve team games in Central League Division Two (3, additional p.34) and the second defendant played in two such games. I am unable to find that they played in the same match or matches game insofar as that might be relevant. During the 1987-88 season, the claimant played in nineteen such games and the second defendant again played in two (3, additional p.9).
The claimant confirmed that he had never played for the Northern Ireland youth team although he had been invited to attend practice sessions for the under-18s in his first year of apprenticeship. His evidence about this was rather unimpressive. When the invitations were adduced (vol. 3, additional pp. 11 and 14) he was asked if he had travelled and/or played. At first he claimed that he could not remember, which I thought very odd because one might expect that to be the sort of thing a keen young player would not forget. When pressed, he agreed that he had not played. In his closing speech, Mr Mulderig laid stress on these answers as being indicative of a tendency on the claimant's part to try to conceal facts that he might not think helpful to his claim. In my judgment, that was a fair criticism.
The claimant claimed to feel "destroyed as a person" by the assaults. He said that he had found it very difficult to deal with over the years. He said that he was taking antidepressant medication, had found therapy helpful and did intend to undergo further counselling in the future. He claimed to have (a) experienced deterioration in his performance as an apprentice footballer, (b) taken to gross over-indulgence in alcohol throughout his apprenticeship and beyond, and (c) suffered relationship problems, including a slow start in relationships with women and impotence once relationships began. When asked what he hoped to achieve by this claim, he said not that he sought compensation but that he wanted "them" (by which he plainly meant not only the second defendant but also Mr Saunders, Mr Parkin and Mr Berry) to be "held accountable".
The claimant was comprehensively cross-examined firstly by Mr Mulderig and then by Mr Fewtrell. The second defendant's case was that the assaults had not happened and that his evidence of deterioration, alcohol dependence, relationship problems and impotence were inconsistent with disclosed records of various kinds, unsupported by any witnesses or documentary records and incredible. I was invited to disbelieve them or at least to find that the claimant had not come close (as Mr Mulderig put it in his closing speech) to discharging the burden of proof. It is impossible to do justice to the detail of the cross-examination of the claimant without effectively setting out a transcript which would be wholly inappropriate and disproportionate. What follows is a summary of what I consider to have been most relevant.
(1) Press interest. The claimant denied having spoken to any of his witnesses (JE, NP, BD, PL, IG or Mr Howard) personally before the trial of the preliminary issue but admitted that he had been approached by the press and, with his solicitors' involvement, had agreed to speak to them. I was struck by the fact that he did not appear to become visibly upset until the end of Mr Mulderig's cross-examination, when he was being asked about his contacts with the press. It was put to him that BD had contacted his solicitors, apparently out of the blue, on 3rd October 2013 and appeared already to know the details of the claimant's allegations. The claimant denied having spoken to BD about his allegations before that time. He said that he had met a reporter from the Sun newspaper at the Europa Hotel, Belfast, and that the reporter had told him that he (the reporter) had spoken to four people, including IG. He was at pains to stress that the reporter had approached him and not the other way round and that money was not discussed on that occasion although subsequently, with his solicitors' involvement, it was agreed that £2,000 would be paid. However, this money was not to be received by the claimant. He said that he had asked that it be shared between the counselling organisation Nexus and the Irish Football Association (each to receive £1,000) although he could not say whether the money had in fact been paid. He confirmed that he had met the reporter in October 2013, having first been contacted by him in September 2013 but that apart from one telephone call he had had no further meeting with the press since the trial of the preliminary issue. It appears however that he had given a statement to the press which is referred to in an attendance note dated 30th October 2013 written by his solicitor after a conversation with external solicitors for the Sun newspaper (3, C171).
The involvement of the press, not only with the claimant but also with some of his witnesses before they contacted his solicitors to offer their evidence is problematic. When BD had contacted the claimant's solicitors on 8th October 2013 he gave them the names of six people who had spoken to the Sun and said that he had given a statement to a sports reporter, namely Mr Rob Beesley (4, C173). Indeed it appears to have been Mr Beesley who identified potential witnesses including NP to the claimant's solicitors when he spoke to them on 11th October 2013 (4, C170). The document recording that conversation contains the information that BD passed on IG's telephone number and that "I told him nothing about G's case nor about G speaking to the paper but he seemed to know all of this and said that G is meeting Rob tonight?" which was probably the meeting at the Europa Hotel. The defendants understandably suggest that those witnesses have an agenda of their own to pursue and a financial interest in the outcome of this claim (whether in terms of damages claims or the sale of their stories to the press or both) and that there has been collusion between them, if not between them and the claimant, such that their evidence should be discounted as being unreliable.
(2) Alcohol. It was forcefully pointed out (as is the fact) that there is no indication in the weekly logs or quarterly reports (2, A8ff) or in any medical record of the alleged descent into alcoholic dependency of which the claimant complained, saying as he did that he had begun to drink heavily after the first assault, painting a graphic picture of having purchased bottles of spirits (such as vodka) from local shops, having gone from his digs after his evening meal on a regular, if not daily, basis to sit on a bench in a local cemetery drinking "to forget" the abuse he had suffered. He claimed to have been drunk up to five nights a week on a bottle of spirits a night as well as beer on some nights. If true, this would have occurred at a time when he was aged 16 and 17 years and was required to turn up at the club each weekday morning (except Thursdays when he went to college) to engage in a rigorous training programme controlled by Mr Lacey who was, according to all witnesses who were asked, a hard taskmaster.
There is no contemporaneous record of the claimant ever having been seen or reported to have been the worse for wear by reason of drunkenness on any such morning. No witnesses were called by the claimant to speak of having seen him in a drunken condition on his return to the digs at night or in the morning.
The claimant accepted that whenever questions as to alcohol intake had been asked of him in other contexts, he had failed to reveal any alcohol abuse. He said that he had continued drinking heavily for twenty years as a result of the assaults and had not stopped until about 2004, following a road accident after which he was breathalysed (but not found to be over the limit) whereupon he says that the risks of drink-driving nevertheless came home to him and he was also conscious of the effects his heavy drinking was having on his family. Sadly he is now divorced. For whatever reason, no evidence was adduced from his mother, his ex-wife or from any of his children (his eldest two daughters being now adults) all of whom according to his evidence are aware of this claim and were aware of or affected by his past alcohol consumption, to support his case that he was a heavy drinker. Nor, as already noted, had his friend Mr Millen, the friend to whom he had allegedly revealed the fact of the assaults soon after his return to Northern Ireland whilst drinking together, been asked make a statement or attend to give evidence. Their evidence might have assisted him in terms of credibility. However, I repeat that I do not consider that any adverse inference should be drawn from their absence alone.
As to the period after he left Stoke, he claimed that excessive alcohol consumption continued until at least 2004, but the defendants placed heavy reliance on the fact that he had told his GP at the time of a Health Assessment on 13th June 1996 that his alcohol consumption was in the "trivial" category of less than one unit a week, the fact that he had certified to Legal & General in relation to a mortgage on 20th September 1996 that his average weekly consumption was "1 pint beer" and the fact that he had told the police doctor, Dr Hall, in December 2009 that he had no history of alcohol abuse.
These matters deserve detailed consideration because, in my judgment, they are of substantial importance when assessing the claimant's credibility. On 20th September 1996, when applying to Legal & General for life insurance in connection with a mortgage, he signed a declaration (4, C125) to the effect that he drank only one pint of beer a week. He said that he was trying to hide the fact of his alcohol abuse and simply lied, but he would not admit that he had lied for financial gain. He accepted that when his general practitioner had enquired as to his alcohol usage on 13th June 1996, he had said that it was in the "trivial" category on a 'Health Promotion' assessment form (less than one unit a week) and admitted that he had "lied" because he did not want to tell the GP the truth. He admitted that he had not reported excessive alcohol consumption until 2009. He could not so easily or adequately explain why, when giving the history to the medical expert, Dr Janet Hall, who had been asked to examine him in the course of the police investigation, he had not told her the truth. She took a history and her report dated 22nd January 2010 (3, B77) expressly states that there was "no history of alcohol abuse".
The claimant sought to explain this by saying that the question she had asked him was whether he was drinking "now" or alternatively that he had misunderstood it as a question about his current (2009) consumption. He was reminded that at the trial of the preliminary issue when this point had been raised in cross-examination he had admitted that he had hidden the fact from her. He thereupon modified his evidence again to say that, whilst he still asserted that she had asked him about his present not his past alcohol consumption, he had also concealed the past consumption from her. In short, having apparently to his credit admitted in evidence on oath at the trial of preliminary issue in December 2013 that he had "lied" to her, because of shame, he subsequently to his discredit gave contradictory evidence on oath at the substantive trial in July 2015, saying that he had misunderstood and had thought that she had been asking about his current (2009) consumption. These conflicting statements cannot both be true. In my assessment, his answer on the first occasion, which was given straightforwardly, was the truth and I find that his answer on the second occasion, which appeared contrived, was untrue. I formed the impression at the very point in time that he gave the second account (long before the closing speeches) that he had decided to change his evidence for a self-serving purpose. I simply do not believe that he would have failed to tell Dr Hall about the past alcohol abuse if it had actually occurred, given the context in which he was being examined and interviewed by her. I find that his evidence on the second occasion was false and this goes a considerable way to undermining his credibility and dissuading me from making any findings of fact based on his evidence, unless it is unsupported by other reliable oral or documentary evidence.
Accordingly, in relation to the evidence about alcohol abuse from 1986 to 2004, I find the claimant's evidence not to be reliable or truthful. His omission to tell Dr Hall about his alleged resort to excessive alcohol consumption as consequence of the assaults, taken together with the information given to the GP, the declaration to the mortgage company, the absence of any witnesses called to describe his drunkenness on any occasion, and the fact that there is no contemporaneous evidence of his having failed to perform his training duties by reason of being inebriated or suffering the after effects of inebriation, leads me to the firm conclusion that the claimant did not resort to excessive consumption of alcohol to "forget" the alleged assaults at all. Whether he now honestly but falsely believes his account, whether it is fabricated because of a belief that it bolsters his claim as being the sort of symptom that abused victims do suffer (as the agreed medical evidence in this case indicates), or whether it is a simple exaggeration or embellishment I am unable to find. I do however find that he has failed to satisfy me on the balance of probabilities that his claim to have indulged in excessive alcohol consumption as a consequence of being assaulted by the second defendant is true. I find as a fact that he did not consume alcohol to the extent he now alleges or to any extent. I further find that to the extent that he did consume alcohol it was probably no greater than the consumption of his fellow apprentices at the time and it was not consumed "to forget" any alleged assaults.
(3) Personal relationships. The true picture about his personal relationships is, I find, also at variance with his accounts to the psychiatric experts and in his evidence. In December 2010 he told his own expert, Professor Maden, that he was slow to get started on relationships with girls and had had only a couple of relationships but neither lasted more than a week and there was no sexual activity (1, D17). In March 2013 he told Dr Mumford that he had had a couple of "casual relationships with girlfriends in Stoke but nothing serious" and had lived with the family of a "friend". I find these statements to the experts to have been untrue at least in terms of the nature of the relationship and its longevity because it is now accepted by him that he had a girlfriend, Catherine, for about a year between early 1988 and his return to Northern Ireland in January 1989. On the balance of probabilities I find that he was economical with the truth because the revelation of a long-lasting relationship in the year immediately following the alleged second assault would not assist his case. In fact, for some months after the end of his apprenticeship and before returning to Northern Ireland, he lived at his girlfriend's parents' home. When pressed, he confirmed in evidence that his relationship with her was not casual but serious. He had remained on friendly terms with her parents and had been in contact with them over recent years. There had been no conflict between the claimant and his girlfriend's parents during the time he lived with them such as might, by inference, have been expected had he been regularly drunk in their or their daughter's presence at home. However, no direct evidence was adduced by any party from his girlfriend or her parents. I do not on balance consider that such an inference is strong enough to be of more than peripheral relevance (if relevant at all) to the issue of alcohol misuse and I have excluded it from my consideration of that issue. However, it is in my judgment relevant to the credibility of the claimant's claims made to the psychiatric experts about his relationship problems, which claims I reject.
I should add that I am unable to find whether his complaint of impotence is true and, if so, what the cause may have been. There is no independent contemporaneous medical evidence in support. Neither have his wife (with whom he has four children), any pre-marital girlfriend nor his post-divorce female friend or partner been called to give evidence about what would, of course, be a sensitive topic for them whatever the truth of the matter. The claimant has singularly failed to prove his claim to any attributable impotence.
In paragraph 4 of their first agreed statement dated 11th June 2013 (1, D1) the three psychiatric experts expressed a conditional opinion about the effects of the alleged assaults, opining that "if" the court should accept the claimant's evidence about the assaults then they could have given rise to such symptoms of post-traumatic stress reaction as excessive drinking. In paragraph 10 of the same joint statement (1, D2) they noted the absence of corroborative evidence for any of his complaints of reaction, impotence or alcohol misuse and the differences in the accounts given to them. In a further joint statement consisting of answers to questions dated 17th September 2015 (1, D9) they confirmed that the inconsistencies in his history were not minor and plainly indicated serious doubts as to his veracity. In no way can the opinion of the experts be said to support the proposition that the assaults probably occurred. At best they support the proposition that if (the court finds that) they did occur the symptoms alleged, if themselves accepted (by the court) to have been suffered would be consistent with a post-traumatic stress reaction. Having rejected, as I do, the claimant's account of those symptoms the medical opinions provide no support for the claimant on the issue of liability. Further, having rejected his account of those symptoms, there is no support for the proposition that he suffered any psychiatric injury in the form of post-traumatic stress reaction during or in the years immediately after his apprenticeship. There is of course a separate issue as to whether he nevertheless did suffer a psychiatric injury in the form of depressive disorder after disclosure of the alleged assaults in 2008. He has been diagnosed as suffering from a depressive disorder which the experts agree, in paragraph 6 of their first joint statement, developed from or after that time (1, D2). The question remains whether it is on the balance of probabilities attributable to the disclosure of 'abuse' that actually occurred or (whether or not 'abuse' in fact occurred) to some other unrelated cause, such as the emotional consequences of his marital breakdown and the resulting child contact dispute. In my judgment the mere fact of a diagnosis of depression after he made his allegations cannot of itself prove that those allegations are true but if they are found to be true the opinion of the experts gives strong support for a finding favourable to him on causation.
(4) Football performance. Mr Mulderig explored more deeply those issues that had been explored at the trial of the preliminary issue with a view to demonstrating, by reference to contemporaneous records (weekly logs and quarterly reports), that the claimant's performance as a footballer had improved rather than deteriorated throughout his period at the club and that nothing in the logs approximately contemporaneous with the times at which he alleged he was assaulted gave any indication of any deterioration in his performance.
I am quite satisfied having heard the claimant's evidence, assessed the manner in which he gave it and compared what he now says with the contemporaneous records and uncontroversial fact of absence of contemporaneous complaints, that there is no support whatever for his assertion that his performance as a footballer deteriorated following the alleged assaults. The fact is that the football logs compiled by Mr Lacey and signed by the claimant on most occasions actually demonstrate an overall improvement in his performance over the whole period of his apprenticeship and speak positively of his presentation and attitude. His performance was variable in the first year but at the time Mr Lacey, the youth team coach, put it down to the claimant, then aged only 16 years, having difficulty settling away from home. The claimant had made no complaint to Mr Lacey to justify any other explanation and I find that the contemporaneous explanation is at least as likely if not indeed more likely than that now alleged, especially in the context of the clear and consistent improvement during the second year with no indication of any deterioration at or after the time of the alleged second assault. The fact that the claimant's performance improved (and I repeat that I do find as a fact that it did steadily improve throughout his apprenticeship) is in part relevant to the question of whether the assaults occurred but perhaps more important to the general credibility of the claimant who, in the words of Mr Fewtrell, is in my judgment guilty at the very least of "retrospective attribution", that is to say attributing his failure to obtain a contract at the end of his apprenticeship or to obtain any contract anywhere playing professional or semi-professional football (other than for a very short period with Ards FC in Northern Ireland) must be attributable not to his own lack of ability but to some extraneous cause.
The weekly logs for the first year (2, A8 ff) show that having received assessments of either "average" or "poor" in his first eight weeks at the club, he achieved his first "good" assessment on week 9 and the number of achievements recorded as being "good" continued to improve thereafter (compare week 9 with two "good", eight "average" and two "poor" with week 12 when there were five "good" and six "average"). In week 13 he went home to Northern Ireland. His evidence was that he did not mention the alleged first "gloving" incident to his parents. In my judgment it is clear that in what would, on his evidence, have been the four or five weeks after that alleged assault, his performance was not only recorded as being better than it had been before, but continued to improve.
Moving to the second year of the apprenticeship and bearing in mind that the claimant cannot be specific as to whether the alleged second assault occurred in August, September, October or November 1987, there is a quarterly report dated 9th October 1987 (2, A140) which contains the comment by Mr Lacey that "he is playing his best football" and the assessments are either "good" or "very good". By this time his weekly logs had begun to include "excellent" assessments. It is possible that the quarterly report could be regarded as having pre-dated the second assault but the quarterly report dated February 1988 must on any view of his evidence have post-dated it. By that time yet further improvement is recorded (eleven "very good" and three "good" in February 1988 as compared to ten "very good" and four "good" in October 1987). Further, in week 74, which would have been in about late November/early December 1987, and on the claimant's account therefore after the second time on which he had received the "glove", his weekly logs contain no fewer than three "excellent" grades, together with eight "good" and one "average". Further, during the 1987-88 season the claimant was selected by Mr Lacey to play for the reserve team in Central league matches on no less than 20 occasions out of 31 matches up to 23rd April 1988, nineteen times to play from the outset and once as a substitute (vol. 3, additional p. 9).
In his parting reference in May 1988 Mr Lacey described him as having a "regular place" in that team (2, A250). I am satisfied, having heard Mr Lacey give evidence, that this reference was a fair and accurate assessment by him of the claimant at that time. All witnesses who spoke of Mr Lacey described him as a hard but fair taskmaster. I am satisfied that the claimant would not have been selected for two-thirds of the matches in 1987-88 if his performance had been other than very good, as Mr Lacey said in evidence it was. The records summarised in paragraphs 46 and 47 above were made at a time when according to the claimant's evidence he was drinking heavily on three to five nights a week, getting drunk about three times a week and drinking up to three-quarters to a full bottle of spirits daily. His oral evidence on oath to the effect that the assaults "knocked the desire" for football out of him is simply not supported but rather is contradicted by the contemporaneous records. His belief, however honestly it may conceivably now be held by him, that he could have done even better is not proof that he could have done so. His only explanation for the achievement of such good assessments was that he was still trying his best to make it as a professional footballer. The obvious contradiction between that explanation and his evidence that the assaults had "knocked the desire out of me to succeed" was apparently lost on him.
In my judgment, the contemporaneous evidence is supportive of the conclusion that the claimant continued to possess the desire to succeed throughout the second year of his apprenticeship, playing more games for the reserve team in the Central League than he had done in his first year and improving both in his performance of the playing of football and in his overall attitude as demonstrated by the weekly assessment logs. His evidence was that he had been called in at the end of his apprenticeship and told that he was too short (at five feet four and a half inches) to be a professional footballer not that he was a poor player. I am unable on the totality of the evidence, after such a lapse of time, to find whether this was or was not said at the time, but it is the case that the claimant was the shortest player at the club and Mr Lacey's evidence was that a player of such stature would have had to be "exceptional" to be a successful midfielder and the claimant was not that. At all events he was not kept on. One or possibly two other apprentices were kept on but there was no evidence before me to demonstrate how they had subsequently performed whether at the club or elsewhere. I find, as Mr Lacey and Mr Mills said, that he was good but not good enough and that he was released because of their honest assessment to that effect (not, for the sake of completeness, to cover up any abuse). In fact, I find that neither of those men was, at the time, aware of any abuse. If it had happened, it played no part in their assessments.
In finding that the claimant has not proved this aspect of his claim, I leave aside the apparent agreed psychiatric opinion in paragraph 16 of the first joint statement (and confirmed in the second) that even if the assaults occurred they would not have impaired "his long term footballing abilities or potential" (1, D3). Quite apart from the point made by Miss Weereratne QC that they fail to draw a distinction between the basic ability to kick a ball about a pitch and the acquisition of the skills necessary to make kicking a ball into a career I am far from satisfied that this is a matter which they were qualified to address at all. In her own report (1, D79) Dr Reveley had said that she was "not in a position to give an opinion" as to whether the alleged abuse had an impact on the claimant's footballing career, adding that his "proficiency" would properly be the subject of "other expert opinion". Of course the claimant has singularly failed to adduce the evidence of any such other expert, despite having been given permission to do so after the limitation trial, but that makes no difference to the medical experts' lack of expertise on which to base any such opinion. I reject the submission by both defendants' counsel that the agreed psychiatric evidence is "conclusive" against the claimant on this aspect of his claim, either on liability or causation. On the other hand, he has adduced no expert evidence to support it and the factual evidence does not support it and in my judgment it is this which is conclusive.
PL
PL was the first and, at first blush, the most impressive of the claimant's witnesses. He did not make his witness statement (1, C100) until after the limitation trial. He was not a contemporary of the claimant. He had been an apprentice during the 1984-85 and 1985-86 seasons and his evidence was that he did not know the claimant, had never met him when at the club or otherwise and that the first time he had seen him was when he came to court on 6th July 2015. Further he said he did not know NP, IG, JE, BD or Mr Howard. He told me that he had suffered a knee injury in April or May 1985, at the end of the first year of his apprenticeship. Notwithstanding treatment, for which he gave generous tribute to the club, and a temporary return to the club between October and December 1985, he had been unable to return to playing football thereafter because his knee had finally "given out" on Boxing Day 1985. Unlike the claimant's contemporaries, who may harbour some resentment at not having become professional footballers, whether sufficiently talented or otherwise, PL appeared to accept his fate as a consequence of his injury and he has apparently made a success of his life in the business sphere. He now holds a responsible position for an international corporation. On the face of it, he had no axe to grind. He is not, so far as his evidence is concerned, a claimant or potential claimant. No letter of claim has been written by him or on his behalf. He said that he has not instructed solicitors or spoken to the press. He said that he had no present intention of doing those things.
PL's evidence cannot and does not directly support the claimant's case about the two alleged assaults because he did not witness them. If they happened at all, they happened long after he had left the club. It is in the nature of 'similar fact' evidence of allegedly 'strikingly similar' occurrences in the years before the claimant's time at the club, but no court, criminal or civil, has found that the events he described did occur, so it is not evidence which carries the inherent weight of a previous admission by or conviction of a defendant in related criminal proceedings, as for example in EB v Haughton [2011] EWHC 279 (QB).
He described "the glove" as common practice during his apprenticeship years and as a "kickback", that is to say an accepted punishment meted out to apprentices by professionals if the apprentices had "prodded them too far". He said that it was regarded as commonplace and that he had received "the glove" from the second defendant on one occasion. His evidence was that it had never affected him in a big way. The pretext for his punishment was that he had worn without permission the training shoes of Philip Heath, one of the professional players. His evidence was that he had been noisily dragged from the away team dressing room, along the corridor to the home team dressing room on a date between October and December 1985. It was, he said, not earlier because, after his injury, he had not been at the ground for some months before October. It could not have been later than 26th December 1985 because his knee finally gave way on that date and his apprenticeship effectively ended. He did not implicate Mr Parkin or Mr Saunders in this event at all. He implicated only the second defendant and Mr Berry, who both denied the incident when they gave their evidence.
He said that "the glove" was covered in white liquid, that he was slapped by someone (to stop him clenching his buttocks) and that the second defendant's gloved finger "went inside". Remarkably he said that he retained respect for the second defendant and for Mr Berry. The latter had assisted him in obtaining compensation (my understanding was that this related to his injury whilst an apprentice). His evidence was that there was no malice in the application of "the glove". His explanation for his delay in giving this evidence (his witness statement is dated 15th April 2014) was that friends had drawn the reports of the preliminary trial to his attention and he had seen something on television about it. He said that he had never concealed his experience and his friends knew of it, that he sat down with his wife and that she told him he should "tell the truth", whereupon he contacted the claimant's solicitors. He confirmed that it was the second defendant who had inserted the glove and that Mr Berry was the person or one of the persons who had smacked him.
He said that he had seen "the glove" applied by the second defendant to other apprentices on a dozen occasions and that it was no secret. He also said that Mr Lacey and Mr Mills were never present and he could not say that they knew of the practice from having witnessed it but that it was in his view simply the accepted reality that the first team punished apprentices in this way and that he "believed" that "everyone" knew about it. By implication this included Mr Lacey and Mr Mills, who both firmly denied any such knowledge when they gave their oral evidence.
He was searchingly cross-examined by Mr Mulderig and it was put to him forcefully that his evidence was simply not true, but he did not flinch from his account. He was asked whether it was possible that if a glove had been used at all, it had merely been passed over the buttocks, whereupon he said that "it went a lot further inside". He was not cross-examined by Mr Fewtrell. When answering a question of mine, intended to clarify when his alleged incident occurred, he said not only that it occurred between October 1985 and December 1985 but went on to volunteer that it had not bothered him, that he accepted there was no malice, that it was just "what happened", that he had not talked to the press, that he had not brought a claim and that he had no interest in such things. His evidence was that he and the other apprentices "normalised" what had happened and it was "the accepted punishment". Most extraordinarily, perhaps, he said, "I told my parents". What precisely he told them was unclear, but in any event, if this was objectively correct and not just an honest but mistaken memory, his parents did nothing about it.
Apart from the reference to his parents' indifference (which was difficult to believe) PL's evidence was apparently credible. It is difficult to understand why he should lie, given his present employment status and (expressed) disinterest in compensation, if such lack of interest is genuine. There would be no basis for a positive finding that he was lying other than that he is in direct conflict with the second defendant and Mr Berry and they cannot all be telling the truth. I cannot find that he was deliberately committing perjury. It follows that the only alternatives would appear to be that his evidence is true (and that of the second defendant and Mr Berry is false) or that it represents an honest but false memory. Whilst, if true, it would not directly prove the claimant's case because his experiences occurred before the claimant began his apprenticeship and he was no longer at the club when the first assault on the claimant allegedly occurred, nevertheless it would be damaging to the second defendant's case. It would support the allegation that there was an established practice of the use of "the glove" essentially in the manner alleged by the claimant prior to August 1986, that the practice was specifically known to the second defendant and Mr Berry and that it was the second defendant who carried out the punishment. The second defendant's defence is not simply that he did not assault the claimant as alleged but that he had never assaulted anybody in that manner, that the punishment ritual known as "the glove" did not exist. As it is put in Mr Mulderig's written skeleton opening (paragraph 4), he "vehemently denies the pleaded allegations".
Could such a practice in fact have been carried on so regularly and (by necessary inference) noisily as PL claims to remember without Mr Lacey (as caretaker manager from January to June 1985) and Mr Mills (as player/manager from June 1985), who both occupied offices on the corridor, in fact knowing about it? Having heard from Mr Lacey and Mr Mills (after hearing from PL) I have no hesitation in finding on the balance of probabilities that they did not know of any such practice (see further paragraphs 125 and 127 below). It follows that logically I must either find that PL's asserted belief that everyone at the club in fact knew about is wrong or at least that I cannot be satisfied on the balance of probabilities that it is correct.
It is possible for a judge to decide that the evidence of apparently equally credible but contradictory witnesses cannot be reconciled and to find that it is not possible to decide between them, but this should in my judgment only be done if there is no feature of their evidence, however slender, that tips the balance one way or the other. Thus, it is my duty to consider whether there are any such features and to enable me to decide between them before concluding, if there are none, that I cannot. In performing that duty, I consider that there are two such features. First, there was a distinct false note in PL's evidence, that is to say the evidence that he told his parents what had happened to him but they did nothing about it. I do not believe that this is an accurate recollection after thirty years. I find, on balance of probabilities, that it was an embellishment or a false memory and that at the very least he did not tell them the full details of what he told the court (because no reasonable parent would have done nothing about it if he had). I find that either he did not tell them anything (because nothing happened) or he told them something other than he recalls (because he was concealing the full truth from them or because what he was telling them about was an experience less serious than he now says). Second, his evidence that everyone at the club knew about "gloving" is founded upon his belief that this was so but Mr Lacey's evidence and Mr Mills' evidence is of the fact that they did not know. It follows that he may be wrong but honestly so. By contrast, they cannot be wrong unless dishonest. I have no reason to believe and no basis for finding that he was being consciously untruthful and I do not so find but I am able to find that he is honestly wrong. Other than his evidence I would have no basis for finding that they were being consciously untruthful and I do not so find. It follows that I am able to decide between PL on the one hand and Mr Mills and Mr Lacey on the other in relation to the issue of general knowledge or notoriety of "gloving", rather than being in the unsatisfactory position of simply being unable to do so. In short, I accept the evidence of Mr Mills and Mr Lacey.
The fact (as I find) that Mr Mills and Mr Lacey did not know of any such practice also undermines to some extent the reliability of PL's account of the noisy and public manner in which he was allegedly assaulted. It does not, of itself, justify findings of fact that no assault took place (it is at least possible that, for some unknown reason, they were not in their offices at the time and were out of earshot) or that the second defendant and Mr Berry were not involved, but if the accuracy and reliability of the description of the manner in which that alleged assault was carried out has been undermined it has to be considered whether it has a consequential effect on the reliability of his recollection of the identities of those involved. This in turn affects the principal dispute between the claimant on the one hand and the second defendant and Mr Berry on the other where credibility is also in issue. I have to consider whether the features already identified in PL's evidence tip the scales in deciding whether to prefer him to them or vice versa and how that affects the claimant's credibility.
JE
JE did not give oral evidence and the weight to be given to what he says in his witness statement (1, C55) is diminished to the extent that Mr Mulderig was unable further to cross-examine. It is right to say that he had given evidence at the limitation trial and was cross-examined by Mr McNeill, but there have been significant changes to the claimant's version of events, particularly relating to the second assault in relation to which JE could not be cross-examined about contentious matters. In particular, the claimant's most recent account of being dragged along the corridor, which is on the face of it inconsistent with what JE said he saw, could not be put in December 2013 because it had not then been raised. In his statement (1, C59. para 16) he had said that he had seen the second assault, having been with the claimant "in the first team dressing room when … some of the professionals (I cannot remember who) grabbed (him)" and in his oral evidence at the limitation trial he had said that he "was in the doorway to the dressing room". Nor could he be cross-examined about his location (viewing events in the home team dressing room from a position at the door, looking in) which is inconsistent with BD's account of the door being closed and guarded by a first-team player, which account had not been given at the limitation hearing. Nor could he be cross-examined about the more detailed account he had given to the Football Association investigators on interview in April 2014 because that did not happen until after the limitation hearing. Finally, he could not be further cross-examined by either defendant about his evidence to the effect that Mr Mills knew of the practice of "gloving" because of something allegedly said to him by Mr Mills (who denied any such knowledge and denied JE's account of the conversation).
JE was the only witness who suggested actual knowledge on Mr Mills' part. He said in his witness statement in January 2013 (1, C59, para 14 & C60, para 16) that he "certainly" knew and that after a game in which he had acted as a linesman and given a disputed goal decision Mr Mills had said to him words to the effect "be careful about the glove, Eddy". He had not mentioned this to the police when interviewed in 2009. It is however to be noted that, when cross-examined at the limitation trial by Mr Fewtrell he modified his evidence, saying that there had perhaps been "some confusion" and that "somebody else" made the comment that he would "end up getting the glove". He did not in fact, he said, get it on this occasion. He claimed already to have done so (but in a version without anal penetration) on an earlier occasion. He agreed that this was not a comment by Mr Mills and that he had not mentioned Mr Mills to the police. It was not necessary to make any finding on this point at the limitation trial but, even at that stage, there was considerable doubt as to the accuracy of recollection by JE of what, if said at all, was a passing comment made about twenty-five years before he first recalled it. A finding is now necessary. Balancing the confused and uncertain recollection of both what was said and by whom it was said against the firm and unshaken evidence of Mr Mills that he said nothing of the sort to JE or anyone else because he did not know of any practice called "the glove" I am unable to find that I can or should prefer the evidence of JE to that of Mr Mills. I go further and, on this specific matter of fact at least, I prefer and accept the evidence of Mr Mills (see further paragraph 125 below). I find that Mr Mills made no such comment or comments and there is accordingly no evidence upon which the claimant can rely to justify a finding of fact that he knew about "the glove" or from which an inference that he knew about it could be drawn. If the remark was made it must have been made by someone else who has not been identified, but on the basis of his oral evidence at the limitation trial in the absence of the opportunity for Mr Fewtrell to explore the point further by cross-examination of JE at the substantive trial, I cannot determine positively if it was said at all or, if it was, when or by whom it was said.
My assessment at the limitation trial was that JE gave his evidence in a convincing manner which supported, for the limited purposes of that trial and on the incomplete evidential picture then available, the cogency of the claim. I had criticisms of him but these related not to the way in which he gave evidence before me but to his failure to be fully frank with the police officer who had interviewed him. It now appears that there may have been other unrelated issues affecting him which perhaps go some way to explaining, if not excusing, his belated revelations in the evidence he gave. If I had known of the unrelated matters of which I have now been informed in relation to him it may be that I would have expressed less severe criticism, if any at all, of his professional conduct.
At the risk of oversimplification (nothing I say here is intended to modify or qualify my previous judgment) the significance of his evidence at the limitation trial was that, unlike the claimant taken in isolation or even in combination with NP, his evidence gave support for the proposition that the claimant's claim was cogent, not because it directly proved the occurrence of either of the two alleged assaults, but because it supported the proposition that there was a form of punishment ritual involving a goalkeeping glove in use at the club at the relevant time (a proposition denied the defendants). It was material to my decision at the limitation trial that JE said that he had not made a claim in relation to his own alleged (non-penetrative) experience of "the glove" and that he had no present intention of claiming damages against the defendants. He was also apparently untainted by any approach to the press or contact with other witnesses. It has since emerged that he has now instructed solicitors who have sent a letter of claim to the first and second defendant. He has also been mentioned in the evidence of other witnesses (such as Mr Howard) as having been one of those who had met to discuss a claim and as having (possibly) met NP and Mr Graham Shaw when playing in a charity football match before the limitation trial. Although that evidence, particularly that of Mr Howard, is not independently verifiable and I am unable to make any relevant finding of fact that he was or was not so involved, it does raise doubts about the disinterestedness, credibility and reliability of JE which might have been assuaged had he been able to attend trial for further cross-examination but which, as it is, remain.
BD
BD's witness statement (1, C82) is dated 13th November 2013 but he did not give evidence at the trial of the preliminary issue. As to that, medical evidence was put before me at the substantive trial to show that BD suffers, among other things, from medicated but poorly controlled epilepsy. He told me in evidence that he suffers PTSD as a consequence of his experiences in the armed forces. Having no reason to doubt such evidence, I make it clear that there is no adverse inference to be drawn from the fact that he did not attend the earlier hearing to give evidence in accordance with his witness statement. Given that in fact he did not give evidence at the last hearing I was unable to make and did not make any findings about the cogency of his evidence but I did comment in my previous judgment (paragraph 65) that he was to some extent tainted by the fact that he appeared to have approached the press directly or through solicitors before offering assistance to the claimant. The only relevance of making that comment at that time was that I did not rely on his witness statement when deciding to exercise my discretion in favour of the claimant to allow these claims to proceed.
The first point made in cross-examination of BD by Mr Mulderig was that he could not have witnessed the second alleged assault because it occurred in late 1987, whereas his two-year apprenticeship had ended at the end of the 1986-87 season. BD said that the claimant's recollection of the time at which the assault occurred must be wrong. In reality, perhaps it was the only thing he could say in answer, but he was not the only one of the claimant's supporting witnesses who saw fit to contradict the claimant's own evidence about the timing of the second assault (see later). In the course of giving his evidence he displayed a certain degree of bitterness towards the club and in particular Mr Mills (gratuitously calling him a "lying rat"). The personal reasons for such bitterness were not explored further. However, he said that he had an uncle who had played for the club in the past and that he had first witnessed "the glove" when he was as young as 12 years old, walking into the dressing room on an occasion of visiting his uncle, a remarkable piece of evidence if true. He said that his uncle was a friend of the second defendant but that he had not told his uncle until 2013 that the second defendant had used "the glove" on him. Like PL, he said that the practice did not affect his ability to play football and that he and others just got on with their apprenticeship because they were there to play football. Unlike PL he harboured deep resentment about what he called "gang bullying" which had made him unwilling to go to work.
He was also cross-examined about his contact with the press. He agreed that he had attended a meeting, apparently arranged by one Graham Shaw. I was told in evidence that Mr Shaw had been an apprentice and later become a solicitor but he did not give evidence before me. It was clear from the way in which BD (and more particularly IG) spoke of him that Mr Shaw was not much liked. BD said that the meeting was attended by a number of people, including IG and that through Mr Shaw contact had been made with a firm of solicitors (but not the firm now acting for the claimant). He said that it was agreed that a solicitor would be asked to write a letter to the club to ask for a specific sum of money and that this was Mr Shaw's idea. It was put to him that this was in effect blackmail in that the letter would not be a proper letter of claim in advance of civil proceedings but rather in effect an offer to accept a specific sum of money in return for keeping quiet. Some such letter was written and reference was made to it in cross-examination but I was told by Mr Fewtrell that the letter could not be shown to me because those who had written it had declined to waive privilege. Be that as it may, the club refused to pay whereupon it appears that BD, IG and others (including Mr Howard) did not immediately commence civil proceedings or indeed go to the police but rather, through Mr Shaw, approached the press. As a consequence of that approach, BD was then approached by a reporter to whom he told his story, allegedly saying that he did not want to receive any money. When asked whether he had reached any agreement with a specific national newspaper, he said that he could not remember (which I did not find to be a credible answer).
He gave evidence of an occasion on which he received "the glove" in about September 1986, naming the second defendant, Mr Berry, Mr Parkin, Mr Saunders and also one Steve Bould (not implicated specifically by the claimant) as being involved. He said that he accepted that there was "no malice" in the second defendant's behaviour. Indeed, he said that the second defendant, as a friend of his uncle's, would occasionally drive him home. He said that "gloving" was "just what happened in those days" and "part and parcel of getting a contract". He claimed to have seen the claimant receive "the glove" on two occasions, being two of only three occasions on which he had ever seen it administered at all (not counting the assault upon himself). However, his account of the two incidents was very confused. In his interview with the Football Association (4, C253) he described the first assault as having occurred after the bad line call. Under cross-examination he said that that was simply "my mistake". Having corrected his "mistake" and saying that the first incident followed the complaint of lukewarm tea, his account of the incident was somewhat different to that of the claimant, but in my judgment the most important point to note is that the claimant did not refer to any other apprentice being present during that assault and indeed the timing of that assault was, on the claimant's account, when he had been deployed to provide the refreshments so that he had come off training with the other apprentices before they had finished their training match. There was accordingly no reason for any other apprentices to be in the home team dressing room. Pressed by Mr Mulderig to accept that he did not see and could not have seen digital penetration, he said that "I saw it occur in my mind" (my emphasis). In relation to his alleged witnessing of the second incident, there were again significant discrepancies between his account and that of the claimant. He said that the teapot had been placed on the claimant before the gloving and that he had been slapped by a number of people before being gloved such that his buttocks became "red raw". The claimant was quite clear both at the preliminary trial and at the substantive trial that the teapot was applied to him after the gloving and he did not refer to any slapping. It was put to BD forcefully that this account was either invented, misremembered or the product of discussion with others such as IG, which he denied.
Ms Weereratne QC attempted to salvage the situation in her closing submissions by referring to what, as she submitted, were the different ways in which memories might be laid down. She submitted that the claimant might not have noticed another apprentice if he was focussed on what was happening with the glove and that BD equally might have been focussing on the gloving and not the order of surrounding events which may have been less memorable. The first difficulty with that argument is that the use of a teapot would not be a lesser event but if anything ("the glove" being allegedly normalised but the teapot being an unusual feature) a more memorable event. The second difficulty is that the claimant does not simply fail to mention BD. He fails to mention any other apprentices yet, as will be seen, both IG and Mr Howard also say that they were present at the assault involving a teapot.
Ultimately I did not find BD's evidence to be credible or reliable.
IG
IG verified his witness statement dated 23rd November 2013 (1, C96). He was blithe about the meeting with Mr Shaw and about the decision to go to the press. He agreed that there was an approach to the club, that if money had been paid he would have received an equal share and that he had spoken to the press after a reporter had approached him (arranged by Mr Shaw). Although he said that his purposes were both exposure of what had happened and the gaining of money, he agreed that it was correct that the primary intention was the money not the exposure. He had signed a confidentiality agreement with a newspaper and had had his photograph taken with a view to future publication. It was clear from his evidence that he understood that the newspapers were waiting for the outcome of this trial before deciding to run the story. He said that he had been told by Mr Shaw that a reporter had said that no-one would get rich but that there "might be £5,000 to £10,000 in it" for those who told their story. He had instructed solicitors (not those instructed by the claimant) who had written a letter of claim in March 2015. He said that he had witnessed the assault on the claimant involving the teapot. However, his account of the incident was different to that of the claimant because he regarded the pretext as having been the provision of lukewarm tea. His description both in his witness statement (1, C98) and in his evidence on oath appeared to be a conflation of the two allegations made by the claimant. When it was put to him in cross-examination that his account of a single assault in fact contained part of the first assault and part of the second assault as described by the claimant, his answer was that he "thought it happened at the same time". Nevertheless, he stuck to his account that the teapot had been used on the claimant at the time he was punished for having produced lukewarm tea and this remained his version of events. It was of course contrary to what the claimant had said.
I found IG to be a thoroughly unreliable witness. His primary motivation having been the obtaining of money from the club, he had attended a meeting and had then spoken to the press. I am quite satisfied that the account given by him to the claimant's solicitors and before me was an account based on his understanding (or rather misunderstanding) of the claimant's claim, possibly arising from the meetings or discussions with other witnesses (although I have no basis for finding that the claimant was directly or personally involved) and that his evidence was not credible. At times during cross-examination his attitude was glib or argumentative. I am quite satisfied that his primary motivation for supporting the claimant is the belief that if the claimant's claim were to succeed then his own claim, motivated purely by the desire for money, may have a better prospect of success. I reject his evidence in its entirety.
Mr Howard
I also reject in its entirety the evidence of Mr Howard but in his case I go further than simply saying that his evidence was not credible and provides no support for the claimant's case. In my view, at least on the balance of probabilities, he came to court to lie and persisted in his lies even when they were quite obviously demonstrated in cross-examination. In his police statement dated 12th January 2010 (4, B22C) which begins with the usual declaration as to the consequences of giving a false account, he is recorded as having told the interviewing officer that he had never seen "gloving" happen. Despite the fact that he had read and signed the statement in three places, he said that this was wrong, that the police officer had wrongly recorded what he had said and that what he had said was that he had not received the glove. Although there was no mention of a teapot being used in the police statement, he said that he had told the officer about it and had seen that incident involving the claimant. The police statement also records that he said that he had "never heard that Peter Fox was responsible", but he said that this was also wrong and that the officer had misunderstood. The foregoing brief account cannot convey his patent lack of candour and the unimpressive demeanour as he gave such evidence. I considered it appropriate to warn him of the consequences of giving false evidence and, in particular, given that his evidence before me was to the effect that he had not told the police officers the truth, that he might therefore be liable if only theoretically to prosecution. Therefore I advised him of his right to decline to answer any question on the ground that it might incriminate him.
Mr Mulderig proceeded to cross-examine by taking each sentence of the police statement in order to see whether he agreed that it was correctly recorded or not. The statement contains seventeen sentences, fifteen of which he accepted were correctly recorded and represented his evidence. However in relation to two crucial sentences he declined to answer the question whether what was stated was true and had been accurately recorded. In particular, he declined to answer whether the sentence "I had never seen this happen during my time at Stoke City" was correct or had been accurately recorded. If accurately recorded, it was of course directly contrary to the evidence he was seeking to give on oath before me. He then said that he had told the interviewing police officer that he had seen the second defendant assault the claimant but he agreed that this had not been recorded. He said that he had specifically told the officer "he got him down on the treatment table, removed his slip and shorts, smeared his finger with Deep Heat and inserted it into his anus". He agreed that this had not been written down. He agreed that he had not queried why it had not been written down before signing. In my assessment, his assertion that he had told the officer specifically about the second defendant smearing a finger in 'Deep Heat' and inserting it into the claimant's anus was not only false but represented a deliberate untruth.
He was further cross-examined about an approach he had made to the Professional Footballers' Association (PFA) in 2004 seeking financial assistance from its benevolent fund to help him pay off a loan made by his stepfather. He said that he had told the chief executive of the PFA about "the glove" being used at the club and that he intended to go to the papers about it. He said that by saying this he was hoping to get money from the PFA. He alleged that the chief executive's tune then changed, money was offered and that he received £2,000. The plain and blatant allegation was that money had been paid to him by the PFA to prevent him going to the press. Exploration of the documents disclosed in this case demonstrated to my satisfaction that his evidence on this point was also false. The relevant documents (4, C221 to C224) make clear that the true facts are as follows. He made a written application for funding on 27th April 2004. He did so after speaking to one Mr Richard Jobson (not the chief executive). Having spoken to Mr Jobson he wrote a letter to Mr Gordon Taylor (the chief executive) to which Mr Taylor replied on 20th April 2004 inviting him to make his application. The PFA response was a request on 11th May 2004 for proof of the debt to which he responded by a letter dated 20th May 2004 enclosing a letter from his stepfather (not in fact revealing that he was his stepfather). There followed on 8th June 2004 a cheque number 900605 from the PFA in his favour in the sum of £1,000. I am quite satisfied on the balance of probabilities and find as a fact that his claim to have reported the practice of "gloving" at the club to the PFA in 2004 is false and that no such report occurred.
In short, I found him to be a thoroughly unimpressive and obviously dishonest witness. It is impossible to find in the case of such a witness which, if any, of the statements he has ever made are true. If anything was true, it is in my judgment most likely to have been the police statement in which he said that he had never seen "the glove" applied and by necessary implication had never seen it used on the claimant. I reject his evidence in its entirety and accordingly he provides no support whatever for the claimant's claim. At the conclusion of his evidence I directed that a transcript of it should be provided at the public expense and, subject to any further submissions that any counsel may see fit to make, I propose to consider after the handing down of judgment whether proceedings for contempt of court should be brought against him on the basis that he has made a false statement in a document verified by a statement of truth without an honest belief in its truth (that is to say his witness statement in these proceedings dated 15th April 2014) contrary to CPR 32.14, whether by direction that the matter be referred to the Attorney-General under CPR 81.18(5) or otherwise as appropriate.
I should add that even if the evidence of IG had not already been rejected, he would have been irrevocably tainted by the evidence given by Mr Howard. Mr Howard is a long time friend of IG, whom he described familiarly by nickname. I noted that he also described BD familiarly by nickname. On the balance of probabilities I am satisfied that at the very least Mr Howard and IG have colluded to obtain compensation for themselves by jumping on the bandwagon of the claimant's claim, the merits or otherwise of which were probably a matter of complete indifference to them.
NP
I formed an unfavourable impression of NP at the limitation trial, as to which reference may be made to my previous judgment (paragraph 66(b)). Having heard him give evidence again, I find no reason to change my previous assessment. His evidence at the substantive trial was that insofar as there were differences between his account given in his police statement on 26th February 2010 (3, B11) and his witness statement for these proceedings dated 22nd November 2013 (1, C91) he had simply recollected more facts. He added yet more alleged facts in his oral evidence, the most important of which being that he now claimed, nineteen months after the limitation trial and thirty years after the event, to recollect that at the beginning of his first year as an apprentice the second defendant, whilst brandishing his goalkeeping glove, had specifically said to him in the company of two or three other unidentified apprentices that if they were to "mess up" they would "get this". He described "the glove" as being white in colour with the proprietary name 'Reusch' upon it. He had given that description to the police in February 2010 (3, B20) but never before, neither then, nor in his witness statement, nor in his oral evidence in December 2013, had he mentioned this alleged incident.
Contrary to his assertion to the police at the time of interview that he had witnessed "the glove" being applied to others, he confirmed on oath before me that the glove had not been administered to him and that he had never seen it administered to anyone else. All he claimed to recall of what may or may not have been the occasion of the claimant's second alleged assault was hearing a voice which "sounded like" Mr Berry's voice making a threatening remark and then, a little later, hearing and seeing the claimant return to the away team (apprentices') dressing room. He even purported now to remember that he had himself been the person who had kicked the ball off the line on the occasion of the claimant's alleged "bad" line call and that he had gone to the away team showers in order to keep out of the way to avoid any punishment coming his way. However, his account of what the claimant did when he came into the dressing room was contrary to the claimant's own recollection. The claimant had said that he had run in and locked himself in a toilet cubicle but NP specifically said that the claimant had not done so.
Mr Fewtrell's cross-examination was essentially limited to the part of his statement to the effect that on one occasion when he had been receiving a different and lesser form of punishment ritual ("blacking") the process had been interrupted and stopped by Mr Lacey who had quite clearly physically and verbally disapproved of what was going on. NP agreed that "blacking" would be much less severe than "gloving" and that his "blacking" was stopped by Mr Lacey. Although not directly on the point, this evidence did seem to cast considerable doubt on the suggestion that Mr Lacey was aware of "gloving" or, if he had been aware of it, that he would have failed to intervene to prevent it. Curiously, Mr Lacey told me that he could not remember stopping any "blacking" incident and indeed denied knowledge of that term at the time. In passing, I should note that Mr Berry said that he had been aware of the term since the 1970s but that it had never happened at the club during his time there. I was left with the uncomfortable feeling that this incident, as described by NP seeming to be favourable to Mr Lacey, may not in fact have happened but added to add verisimilitude to his evidence critical of the second defendant or alternatively wrongly remembered after such a lapse of time and in fact stopped by someone other than Mr Lacey. I find myself unable to find as a fact whether such an incident happened or who the persons involved may have been, but my inability to place reliance on NP even in relation to unrelated events involving himself gives me no confidence in accepting his reliability when it comes to events involving the claimant.
In a final inconsistency, NP also contradicted the claimant by failing to confirm the timing of the alleged second assault. The claimant has, as I have said, been consistent in saying that there was a twelve to fifteen month gap between the two assaults and that the second assault occurred in the autumn of 1987. NP said that the events he had witnessed involving the claimant (the bad line call, the threat by Mr Berry and seeing him upset in the dressing room thereafter) had all occurred in the early part of 1987 and he was "definite" about that. He said that the claimant was wrong to say that it was any later than that. If that is correct, then the gap between the two alleged assaults would have been no more than six months which is so inconsistent with the claimant's firm recollection and repeated account that NP's evidence cannot in my judgment be regarded as supportive of the claimant's account at all.
In short, the evidence of BD, IG and NP was to a greater or lesser extent inconsistent, contradictory, unreliable and incredible and the evidence of Mr Howard was at least in part dishonest. Their evidence, individually and collectively, provides no credible support for the claimant's claim.
Mr Hill
Mr Dennis Hill was the manager of East Belfast Football Club, an amateur team, between 1997 and 2001, during which time the claimant played for that team. He gave no evidence directly as to liability. He knew nothing of the claimant's alleged experiences during their association. His evidence was indirectly relevant to liability, albeit not perhaps intended by the claimant to be so, in that he described the claimant as having been a reliable player whose disciplinary record was good. This evidence sits uneasily and seems to me to be inconsistent with or at least unsupportive of the claimant's evidence that during that period he was still drinking heavily (he said that he stopped only in 2004). Otherwise his evidence was only relevant the issues of causation and damages.
Mr Washington
Mr John Washington did not make any witness statement in this matter until 10th July 2015, which was the fifth day of the trial, later supplemented by a statement dated 13th July 2015, that is to say the sixth day. By definition, those statements had not been filed or served by the date set by the relevant case management directions order. Exceptionally, I granted an application made on the sixth day of trial by the claimant for relief from sanction. This application had been opposed by both defendants because any witness statements upon which the claimant intended to rely should have been filed and served by 30th April 2014. However, Mr Washington had only made himself known to the claimant's legal advisors on 10th July 2015. He verified his two statements (1, C193 and C195 respectively) and said that although he had been aware of the case in 2013 he had only been prompted to contact the claimant's lawyers after reading a newspaper report on 7th July 2015. His evidence, if reliable, is remarkable and contradictory of the evidence of the second defendant that no such practice as "gloving" existed. It was that he had heard the second defendant, in a radio interview approximately contemporaneous with the assaults alleged by the claimant (he said "1986 to 1988" in his statement but was less specific when cross-examined), publicly state that if any young lad or apprentice at the club should get too big for their boots there was a way of bringing them down a peg or bringing them back to earth which was "the glove treatment" involving "the Deep Heat rub" which was very hot and put in a "very sensitive place".
In his handwritten note written on 7th July 2015 and addressed to Ms Weereratne QC (1, C198) he had expressly referred to "the glove treatment" but he had not done so in his witness statements dated 10th July 2015 (1, C193) or 13th July 2015 (1, C195). This is a major inconsistency, occurring within three days thirty years after the event and it suggests at the very least that his recollection is not fixed or clear and also that he had been influenced in what he had initially written by what he had read in the newspapers reports which he admitted he had read and had been the catalyst for his note to counsel. In short, it casts doubt on his reliability if not credibility. In cross-examination he sought to explain this discrepancy by saying that his note was "a rush job", that when he wrote it he thought that was what had been said but he had thought a bit more about it before talking to the solicitor for the purpose of making his statement and his recollection had changed. He did not allege that there was any mention of anal digital penetration but he claimed to have been shocked on hearing it and assumed that other people would have complained (although he himself did not). He said that it had a resonance for him because of an alleged experience of abuse in his own youth during an industrial apprenticeship in the 1950s. He did not contact the radio station or anyone else to complain. He said that he thought others would have done so but on the evidence before me no one ever did so, although (as I find to be a fact on the unchallenged evidence of the sports editor at the time, Mr Gaskell) the programme had many tens of thousands of regular listeners in the North Staffordshire area.
The evidence of Mr Washington did not in any event support the claim that the practice involved digital anal penetration. Indeed it was not his understanding that that was the case. Rather, his understanding at the time was that the glove would be applied externally to the genital area. The essence of his evidence was that far from being unaware of this practice the second defendant in the 1980s was so unabashed at admitting its existence that he mentioned it in a public radio broadcast to a reporter who was so unconcerned that he did not follow it up at all.. Under cross-examination it became clear that his supposedly clear memory was rather selective. He had misremembered the name and timing of the relevant radio programme. He added more details of the interview but said that it was truncated abruptly for a discussion of match tactics (implying that it was a pre-match interview) whereas in his witness statement he had said that the next item relayed the scores (implying that it was a post-match interview).
I allowed a two-day adjournment for enquiries to be made after the grant of permission to rely on Mr Washington's evidence during which time the statements of two BBC employees at the time, now freelance, namely Mr Gaskell (1, C202) and Mr Johnson (1, C204), respectively the sports editor and a sports reporter at BBC Stoke, were obtained on behalf of the second defendant. They were impressive witnesses and their oral evidence (which I summarise in paragraphs 114 to 116 below) did not support his alleged recollections but rather cast very considerable further doubt upon them. Whilst it is not perhaps wholly impossible that he may have heard what he believes he heard or something similar I am not only satisfied on the balance of probabilities but quite sure that it was not said to Mr Gaskell or Mr Johnson. The chance that it could have been said without one or other of them being aware of it is, on their evidence, so small as to make it overwhelmingly probable that Mr Washington has either misheard or misremembered or is simply mistaken in his (apparently) honest and disinterested belief. His evidence, although apparently of significance when first read on paper, justifying exceptional permission to rely on him, did not stand up to scrutiny and does not help me towards the resolution of this claim.
THE DEFENCE
In the course of dealing with the evidence of the claimant and his witnesses I have tried to identify the principal matters of evidential dispute, have incorporated the evidence of the defendants' witnesses where relevant and have made some findings of fact where possible and, in my view, appropriate. Accordingly, what follows is a comparatively brief summary of the oral evidence given in support of the respective defences, particularly in the case of the first defendant. By agreement between counsel and with my approval the evidence for the second defendant was called before that for the first defendant.
THE SECOND DEFENDANT'S WITNESSES
Mr Fox
The second defendant himself verified his three witness statements (1, C64, 71A and 71F). He amplified his evidence by referring to the fact that he had started 'The Junior Potters', which was the junior supporters club (for supporters aged under 16 years) and had become its president. He had not been an apprentice at the club but at Sheffield Wednesday FC. He was thoroughly cross-examined by Ms Weereratne QC and it would, in brief, be a fair summary of his evidence to say that he remained unshaken, firmly and politely (perhaps with excessive politeness having regard to the allegations made against him) saying that "the events did not occur". This was as pleaded in paragraph 13(f) of his Defence. He said that the allegations made by the claimant were false.
The second defendant had prepared a rough sketch of the layout of the ground floor of the Victoria Ground. It was inserted into the trial bundle (1, C68A) but he agreed certain modifications suggested by Mr Fewtrell (on the basis of instructions from Mr Mills) who had used the modified sketch when cross-examining the claimant. It showed that the two dressing rooms were at opposite ends of the corridor which was parallel to but not as long as the pitch outside. Between the two dressing rooms there were a number of offices which, running along the corridor on the right side looking from the away team (apprentices') towards the home team (professionals') rooms would have been occupied by the manager (Mr Mills), the club secretary and assistant secretary, the personal assistant to the manager and the main public reception room. Between the reception area and the PA's office was an open entrance for players or guests flanked by a press room. On the left side were the referee's room (only used on match days), Mr Lacey's office, the office of the first team coach (possibly unoccupied in the 1986-87 season but probably occupied by Mr Chung in the 1987-88 season), the washing room and the physiotherapy room. Between Mr Lacey's office and Mr Chung's office was the tunnel to the pitch. I find as a fact on the totality of the evidence on all sides that the areas and offices used by the first defendant's staff other than Mr Mills, Mr Lacey and Mr Chung would probably have been occupied each weekday morning, that after the conclusion of the morning training sessions those three men would usually have gone to their offices and that most if not all the offices or rooms off the corridor would not have been unoccupied at the time of the alleged assaults on the claimant.
Ms Weereratne QC suggested to the second defendant that he was "hiding behind his good character". A similar suggestion was made to his witnesses. In my judgment, it is correct to say that he has not simply a good character but a positive good character, by reference to his reputation as a long serving player for the club, his sports-related charitable activities and his involvement, with his wife, in the fostering of children. It is right to recognise that in a case such as this a defendant with a good character has been something of a catch-22 situation: in principle a positive good character is relevant to credibility on the basis that it may be argued that such a person is on the balance of probabilities less likely to have behaved in the manner alleged; on the other hand it is a sad fact that claims, revelations and indeed convictions over recent years have demonstrated that a good reputation can be an effective cover for misdeeds. However, I remind myself that the question in this case is not whether it is likely that the mature elder statesman of football aged 58 years with a distinguished football career behind him that the second defendant has now become assaulted the claimant, but rather whether his younger self, half his lifetime ago when 29 years old, did what the claimant alleges but is now unable or unwilling to admit it. The extent to which an (apparent) good character in later life may be of relevance to the likelihood of misbehaviour long ago is less compelling.
I am not sure that it was entirely fair of Ms Weereratne QC to suggest that Mr Fox was "hiding behind" his good character but it seems to me to be a point of little relevance. Taken to its logical conclusion it would mean that possession of a good character would be a positive disadvantage to a defendant in such a case which is not how the law stands. It is a neutral factor. She invited him to admit to his past behaviour and to apologise to the claimant. Firmly but politely he refused to do so on the basis that he said that he had done nothing wrong and therefore had nothing for which to apologise.
He admitted that what he described as "jovial things" went on, that is to say what he regarded as ordinary pranks, jokes or high jinks of a kind that ordinarily then did and probably still do occur in the milieu of male sporting dressing rooms. Ms Weereratne QC suggested to him that he was presenting a picture of an incredibly well-behaved group of men but he insisted that pranks (examples given were cutting feet off socks, tying knots in sleeves, making those who had cleaned themselves muddy again, and the like) were only played on and between equals and that there was no playing of pranks upon or ribaldry of apprentices. He agreed that he was nicknamed "Foxy" but denied ever having been invited to "give him the glove", a practice which he said "never happened" to anyone. He flatly denied the allegations made not only by the claimant but also by PL, BD and JE.
He voluntarily disclosed his medical records for 1986 to 1988 to demonstrate that he had suffered an injury in a swimming pool accident in 1987 which appeared to have aggravated a longstanding back problem dating from 1983. Particular reference was made to records between 17th September 1987 and 19th April 1988 and to the fact that he had been suffering back pain since about June 1987 and required surgery in the form of a laminectomy in January 1988. At first it appeared that these records were relied upon to demonstrate either that it was unlikely that he would have been at the club or in the home team dressing room on the occasion of the alleged second assault or perhaps that he would have been unfit to take part in the activities surrounding that alleged assault, but he agreed that he was in fact at and around the club during the whole of that period, training and indeed playing (if only in reserve teams). Ultimately, therefore, the fact (as I find it to be) that the second defendant was suffering back pain and discomfort during the latter part of 1987 is not of itself inherently inconsistent with the truth of the allegations made by the claimant.
He said that if he had ever come across the alleged punishment ritual of "gloving" he would personally have stopped it or "at least I would like to think so". He agreed that it would have been an unacceptable practice from his point of view in 1986 or 1987 and there was no question of seeking to argue that if (which he denies) it happened it could be excused or explained or condoned on the basis that times have changed.
With reference to the evidence of Mr Washington, he confirmed that he did appear on the local radio programmes but said that he had definitely not said what Mr Washington claimed to remember. It was suggested that he had in fact said it because at that time he was unashamed and because the practice was tolerated but he denied both suggestions firmly.
A considerable amount of time was spent exploring the question of whether or not tea (in addition to orange juice) would have been made available in the home team dressing room during the summer months, his apparent argument being that the allegation of a punishment for making lukewarm tea in July or August 1986 was inherently incredible because no tea would have been made at that time in any event. When pressed, he said that if tea was required then it would be made by the individual who required it, rather than being brought in a teapot. However he did appear to accept that it was at least possible that tea might have been made as late in the year as August. Insofar as it is necessary to do so, I find on the balance of probabilities that at the very least it is quite possible that some players might wish to drink tea in August and that accordingly a pot of tea might have been brought to the dressing room by an apprentice for their purposes. I cannot on the evidence before me find that it is impossible that a pot of tea might have been brought to the home team dressing room by an apprentice at that time of year. I am accordingly unable to find that the claimant's allegation that the catalyst for the first assault was the presence of a lukewarm pot of tea is inherently incredible, impossible or even improbable.
Ultimately, Mr Fox was unshaken in his denials by the searching cross-examination.
Mr Parkin
Mr Parkin verified his statement (1, C128) and told me that he had been an apprentice at the club between 1982 and 1984 and thereafter played for the club until 1988 before moving to other clubs at West Bromwich, Mansfield, Rochdale and Barnsley, initially as a player and latterly as the assistant manager. He is now the assistant manager of Bradford City FC. He disputed the claimant's suggestion that apprentices were able to "hang around" the home team dressing room, which he said did not happen when he was an apprentice or when he was a first team player. He said that Mr Lacey was a man of strong discipline who brought his apprentices up to be the best they could be. He denied the existence of any such punishment as the claimant alleged whether during his time as an apprentice or during his time as a player and he firmly denied that he had been involved in any such assaults. The details of those assaults and his participation in them were fully put to him and his response was "absolutely not".
Like the second defendant, he said that in July or August only cool drinks would have been provided, not tea, but he accepted that there might have been one or two players who would have drunk tea. Overall, he was an impressive witness and (recognising the same point about good character having been made to him as to the second defendant) his credibility was in my judgment supported by the fact that he was not dogmatic in denying that the demand for tea was possible. He said that he did not mean to say that tea was never made but rather that "without question" more squash was consumed than tea. He also accepted that, in relation to another area of apparent dispute, it was "possible" that a linesman might be used in a training match, as the claimant had alleged, although he also said that he could not remember this possibility having actually occurred. In this respect at least he did not support the second defendant's evidence which was that this would never have happened and it certainly did not appear to me that he was simply reciting an agreed script.
Ultimately, like the second defendant, Mr Parkin was adamant of his innocence and was unshaken by cross-examination.
Mr Berry
Mr Berry verified his statement (1, C118) and told me that he was not apprenticed at the club but joined from Wolverhampton Wanderers. By 1986, then aged 29 years, he had become team captain. As he himself confirmed, it would have been difficult to mistake him for any other player. He was and is six feet two inches tall and black and at the time he had an 'Afro' haircut. At that time, he said that he regarded himself as a role model because of his race. He "absolutely" denied that he had ever been involved in "gloving" or that he was aware of any such practice.
He agreed that there were definitely high jinks (in addition to the mud and socks pranks he recalled stereotypical remarks about penis size specifically directed at another black player) but he said that there was no malice in any of these pranks. He had been the victim of pranks and he had been the perpetrator of pranks but never participated in "gloving". He said that from his point of view, knowing as he does and did the properties of the 'Deep Heat' rubbing lotion, it would have been unacceptable to use it in the manner the claimant alleged. He denied having been the person who had placed a teapot on the claimant's buttocks. He said that the practice of "gloving" as described by the claimant was not acceptable now and would not have been acceptable in the 1980s. He very firmly stated that if he had known about or witnessed it he would have stopped it.
He was invited by Ms Weereratne QC to apologise. He declined on the basis that "it is fiction".
Mr Saunders
Mr Saunders verified his statement (1, C122). He adamantly disputed that he had been involved in any way in assaults of the kind alleged by the claimant. In particular he denied having participated by removing the claimant's shorts. Like his former colleagues, he did not suggest that any such practice, if it had existed, could or would have been considered acceptable at the time and certainly not by him. As a black player he was then, like Mr Berry, perhaps a rarity and also regarded himself also a role model. Further, at the present time, he regards himself as "a strong Afro-Caribbean role model". In recent years he has become a support worker for black youths without father figures in their lives. He said that if he had witnessed "gloving" he would have been "disheartened" and "would like to think that I would have stopped it". He stressed that he had not been brought by his parents up to behave in the way alleged against him but rather he had been "brought up properly, to do the right thing". He denied that he had participated in either alleged assault on the claimant, whose name he did not remember. He had not seen him since the 1980s until he came to court for this trial in July 2015.
I found Mr Saunders to be a very impressive witness who gave every appearance of being truthful and of being genuinely surprised and indeed bemused by the allegations. He was entirely unshaken by cross-examination and there were no inconsistencies in his denials. Naturally, I bear in mind Ms Weereratne QC's point that it is very difficult to disprove a negative and thus to undermine a denial. However, I am bound to say that I believed his denial of participation. He was, if anything, the most credible of the second defendant's three footballer witnesses and I believed his evidence.
I am satisfied, on the balance of probabilities and find as a fact that he did not participate in any assaults on the claimant (even if others did so). This finding does not, of itself, lead me to find that no assaults took place, but I am satisfied that if they did the claimant is mistaken in his recollection that Mr Saunders was an active participant or indeed was even present.
Mr Johnson
Mr Johnson verified his witness statement (1, C204). He had been the regular football reporter for BBC Radio Stoke on match days in the 1980s. He was also a teacher at the time. He is now a retired headmaster and is still a freelance broadcaster. He presented as a man of high personal and professional standards, both educational and journalistic. He had no recollection of the comments attributed to the second defendant by Mr Washington, adamant that he had never heard him say any such things and adamant that he would not have ignored it if he had done so. I accept his evidence that if the second defendant had said it to him he would have followed it up at the time and remembered it now. He had enjoyed good health and rarely if ever missed a league match involving the club, upon which match he would have commentated as well as setting the scene beforehand and speaking to players or the manager afterwards. He could not of course exclude the remote possibility that it had been said to another reporter filling in for him on the very rare occasion of a possible absence. I find as a fact that he was telling the truth. If the second defendant said what Mr Washington claimed to recall, it was not said to Mr Johnson.
Mr Gaskell
Mr Gaskell verified his witness statement (1, C202). In my judgment his evidence effectively closed the door on the possibility that the second defendant did say what Mr Washington claimed to remember but said it to a reporter other than Mr Johnson. Mr Gaskell was the sports editor and presenter of the match day programme of which Mr Washington said he was an avid listener. It would have been on air no later than 2.00pm on Saturdays and sometimes as early as 1.30pm, before match time which was usually 3.00pm. He would always have been in a mobile studio at the Victoria Ground or in the studio at the BBC premises in the town. If any pre-match interview had been conducted with any player, including the second defendant, he would have conducted the interview and it would have been pre-recorded during the preceding week and edited for broadcast. He would therefore have (a) heard what was said during the interview (b) heard it again at least once whilst editing and (c) heard it again when broadcast. He had no recollection of the comments attributed to the second defendant by Mr Washington. He was as adamant as Mr Johnson that he would not have ignored it if it had been said to or heard by him. There would, he said, have been "a story" to follow up and as a professional journalist he would have done so. Ms Weereratne QC invited him to accept that this was a rationalisation made with hindsight applying 2015 standards not those of the 1980s, but he firmly disagreed. He said that he would not have been doing his job properly had he let it go. When asked by Ms Weereratne QC whether he thought Mr Washington was lying, he said that it was not for him to say but he must at the least have misheard. There were at the time "many tens of thousands of listeners" to the programme and he was personally proud of increasing its loyal audience during the years 1986 to 1992. There is no evidence that any of those listeners made any comment far less complaint about any such remark and, as Mr Washington admitted, he did not do so at the time.
I find that the possibility that the second defendant said what he is alleged to have said on an occasion when neither Mr Johnson was the reporter/commentator nor Mr Gaskell was the presenter/interviewer/editor of the programme is so remote as to prevent any finding that the words alleged were in fact spoken or have been accurately remembered. On the balance of probabilities I find that no such comment was made by the second defendant during the radio programme in question on any occasion. I am unable to accept the accuracy of Mr Washington's recollection and evidence, however honest it may be. If it is honest, I am quite satisfied that it is honestly mistaken.
THE FIRST DEFENDANT'S WITNESSES
Mr Mills
Mr Michael Mills was England captain at the 1982 World Cup and has been awarded an MBE for services to football. Those two facts, in and of themselves, are of no relevance to, and will have no influence on, my decision. Of relevance and importance is the fact that in 1985 he joined the club as player/manager. He was in that post when the claimant arrived and throughout his apprenticeship. He verified his witness statement (1, C137), confirmed that he had never witnessed "gloving" and said that he was wholly unaware of any such practice having existed, whether in 1986 to 1987 or at any other time at the club. He confirmed the corrections to the second defendant's sketch plan of the ground floor and corridor area of the Victoria Ground. His office as manager, together with those of the secretary and assistant secretary and various support staff were along the corridor. Plainly, if the offices were occupied, as I have found most if not all probably were in the middle of the day when the morning training sessions ended, any noisy commotion in the corridor could not fail to have been heard by the occupants.
None of the claimant's witnesses, except BD who appeared to dislike him for some unexplained reason, had expressed any positive dislike of Mr Mills. None of the claimant's witnesses, including BD, had suggested that he had ever been present when "the glove" happened and only one of them suggested that he was actually aware of the practice. That one was JE, who in his witness statement had said that Mr Mills had once made a remark to him to the effect that that he should "beware of the glove" but as I have said (see paragraph 74 above) in cross-examination at the limitation trial about this evidence he was much less dogmatic, he admitted that he had not mentioned this remark when making his police statement and he appeared to accept that the remark, if made at all, may have been made by someone else. Mr Mills expressly denied making any such remark, which would of course be inconsistent with his general denial of knowledge. Leaving aside JE, the claimant's case against the club was otherwise based on the proposition that the club's representatives such as Mr Mills and Mr Lacey knew because "everyone" knew.
Mr Mills was an impressive witness and his evidence had the ring of truth. I accept his evidence and find as a fact both that he was unaware of any such practice as "gloving" at the club at or after the time he joined the club and that he would not have tolerated but rather would have stopped it if he had known. I repeat that I find that he did not make the remark alleged by JE.
Mr Lacey
Mr Lacey verified his witness statement (1, C149). He also confirmed that he as youth team coach had never witnessed "gloving" and said that he was wholly unaware of any such practice having existed, whether in 1986 to 1987 or at any other time at the club. The claimant, the second defendant and all their respective witnesses who had known him in the 1980s had spoken positively and well of Mr Lacey. No-one had a bad word for him. He was responsible for the training and general welfare of the apprentices including the claimant (who had made no criticism of him even when invited to do so). There was reference on all sides to his parting reference for the claimant (2, A250). I find that he did write this reference and did so in the most positive terms possible with the genuine motive of trying to help him to find another football placement.
He was an impressive witness and his evidence also had the ring of truth. I accept his evidence and find as facts both that he was unaware of any such practice as "gloving" at the club at or after the time he joined the club and that he would not have tolerated but rather would have stopped it if he had known.
It follows that I find that if there was a practice of "gloving" at the club neither Mr Mills nor Mr Lacey had actual knowledge of it or of any events which would or should have aroused their suspicions.
Mr Chung
Mr Chung was the first team coach at the time of the claimant's apprenticeship. He did not give oral evidence but his witness statement (1, C144) was admitted as hearsay evidence. Again, neither the claimant nor any of his witnesses made any specific positive criticism of Mr Chung or alleged that he had ever been present when "gloving" had occurred.
FINDINGS ON LIABILITY
The claim against the second defendant
The evidential conflict is stark. I have referred to the unsatisfactory nature of the evidence of the claimant and of some of the witnesses called on his behalf. I have recorded (see paragraphs 51, 52 and 60 above) that I reject the claimant's evidence that he descended into a cycle of alcoholic dependence, that his personal relationships were adversely affected or that his football performance deteriorated after the assaults, but I still have to consider whether, despite such embellishments, exaggerations or frank inventions, he has nevertheless established on the balance of probabilities that he was assaulted on either or both of the alleged occasions by the second defendant. On his own evidence alone, because of the conflicts and uncertainties arising from these embellishments, he would have an uphill task discharging the burden of proof upon him. Mr Mulderig, who made his closing submissions first because of the order in which the witnesses had been called, submitted that he had "not come close" to succeeding. In his closing submissions Mr Fewtrell described his evidence as being "riddled with lies and inconsistencies". A decision cannot be made simply by reference to the claimant's evidence because there are other witnesses (on all sides) and I must consider the totality of their evidence. My ultimate findings of fact, to the extent that I can make them even on the balance of probabilities after such a long lapse of time, depend on my assessment of the credibility of those witnesses and the reliability of their evidence as well as that of the claimant himself.
I regard the evidence of all four of the former apprentices who gave oral evidence in purported support of the claim on the basis that they had witnessed either the actual assaults or the preamble to or aftermath of those assaults as being to a greater or lesser extent unreliable or incredible. The fifth former apprentice, who gave evidence at the limitation trial but not at the substantive trial, claimed to have witnessed occasions of the use of the glove but not digital penetration. His evidence was inconsistent with that of other witnesses including that of the claimant in so far as it had developed since the limitation trial but, being absent from the substantive trial, he could not be cross-examined about those matters.
The evidence of PL is the only evidence given in support of the claimant which, if it were to be accepted, would in my judgment justify any positive finding of any facts contrary to the second defendant, albeit not directly relating to the specific assaults alleged by the claimant. Uniquely among the claimant's witnesses, he remained essentially unshaken after cross-examination and, to that extent, may deserve equal comparison with the defendant's witnesses. Apart from the two features which I have mentioned (see paragraph 71 above) he was an apparently solid witness. However, in the context of the effect of his evidence on the principal dispute (see paragraph 72 above), I find it troubling that, at a time before PL's evidence was available to him, the claimant had told the police in his (criminal) witness statement dated 8th April 2009 (3, B5) only that he had been "in the first team dressing room" when "grabbed and forced … onto the table". Although he had referred to being "dragged into" the home team dressing room on the occasion of the alleged second assault in his first (civil) witness statement dated 31st January 2013 (1, C1), he had not mentioned being dragged along the corridor from the apprentices' dressing room in that statement. He did not mention it in his evidence at the limitation trial in December 2013. Even after PL's statement became available to him he did not mention it in his second (civil) witness statement dated 30th April 2014 (1, C11a). He did not add the detail of having himself being dragged along the corridor until his oral evidence in July 2015, more than six years after his first formal statement. I find that it is probable that by the time of the substantive trial the evidence of the claimant had been influenced by PL's account of his alleged experience and that he embellished his own account to include the allegedly strikingly similar details. An embellishment provoked by an account the reliability of which is itself in doubt further weakened the claimant's ability to discharge the burden of proof. It also had an adverse effect on the consistency of the claimant's evidence with that of JE (see paragraph 73 above).
PL's similar fact evidence, whilst given by a witness of apparent credibility, is weakened firstly by my positive finding of lack of knowledge on the part of Mr Mills and Mr Lacey and secondly because I am satisfied that it has led the claimant to embellish his own account of his own second assault in a manner which makes his account inconsistent with that of another of his own witnesses (JE). I am therefore in real doubt as to whether the features of PL's experience which were said to be strikingly similar were in fact features of the claimant's own alleged assault. In any event I find myself unable to make positive findings of fact which would enable me to prefer PL's evidence to that of the second defendant or Mr Berry in relation to the alleged assault by them on him. I am unable to find as a fact whether an assault on him in 1985 occurred or not. Even if it did, I would have been unable to find whether it was perpetrated by them or not, it being simply his word against theirs after thirty years.
In considering whether the claimant has discharged the burden of proving that one or both assaults occurred, his own evidence must be carefully examined and evaluated. It remains his reliability and credibility which must be favourably assessed if he is to succeed. It was for that reason that I considered that I had to deal with the evidence he gave in considerable detail and as I have already said his evidence was ultimately unconvincing.
The totality of the evidence called on behalf of the second defendant about the assaults amounted to a vigorous and unshaken denial that either of the assaults alleged by the claimant occurred. I have already recorded that I found the evidence of Mr Saunders to be honest and reliable and that the claimant is mistaken about his participation. If the second defendant, Mr Berry and Mr Parkin are also to be believed then not only the allegations made by the claimant's witnesses but those made by the claimant himself are false, whether in the sense that they are honestly believed by the claimant to be true or alternatively known by him not to be true. Conversely, if the claimant's allegations are true, there can be no question of those three witnesses having genuinely and honestly forgotten what happened.
Ultimately, the significance of PL's evidence is that it prevents me from dismissing the claim on the basis of a finding of fact that the claimant was not assaulted at all or at least not by the second defendant. But for his evidence, I might well have been able to justify doing so but his evidence sows the seed of doubt as to whether there was ever such a punishment ritual at the club. But for him, I would have been able to find that I preferred all the defendants' witnesses to the claimant and his witnesses wherever there was an evidential dispute between them and on that basis would have found that there was no such ritual as alleged. I cannot make such a finding because I am unable to find as a positive fact that PL was not assaulted and that he was not assaulted by the second defendant. If in truth (as opposed to legal fact) he was assaulted the evidence given by and on behalf of the second defendant to the effect that no such practice had ever existed would be contradicted. This would still not have proved the claimant's claim to be true but it would have supported his credibility.
I disapplied the primary limitation period and allowed the claimant to proceed with his claim on the basis that a fair trial could still take place. I find that the substantive trial, although fair, has demonstrated that such a long passage of time has so affected the reliability of the memories of some of those giving evidence and the credibility of that evidence that the picture has become so confused and the truth, whatever it may be, so obscured that I am unable to make the positive findings of fact necessary in order for the claimant to succeed. I do not find the claimant's allegations are consciously dishonest or that nothing untoward ever occurred between players and apprentices at the club all those years ago, but I am unable to find as a fact that the specific events alleged by and allegedly involving the claimant did occur.
Unsatisfactory as it may seem after such a long trial, but having regard to my duty to apply the burden and standard of proof appropriately, I am driven to the conclusion that the claimant has failed to discharge the burden of proof in his claim against the second defendant and it should be dismissed. His claim fails not because I find on the balance of probabilities that there was never any "gloving" at the club or that he was not "gloved" but because he has not proved those allegations and I cannot find on the balance of probabilities that he was "gloved".
The claim against the first defendant
It follows inevitably that his claim against the club, which only fell to be considered if he succeeded in his claim against the second defendant, also fails and should be dismissed.
DECISION
In all the circumstances I find that the claimant has failed to discharge the burden of proof which rests upon him. I determine both issue (1) and issue (2), as set out in paragraph 28 above, in the negative. The claim accordingly fails and is dismissed.
At the risk of repetition, this decision is not the equivalent of a positive finding that no such assaults took place. Except in so far as I have been able to make some findings of fact about matters which do not bear directly on the happening of the specific assaults alleged by preferring one witness over another in relation to certain matters, I am unable to make such a positive finding in favour of the second defendant. A civil trial is not a search for absolute truth, even when findings of fact are possible, but I am very conscious that the full truth has not been revealed by this trial. I have the uncomfortable feeling that neither the claimant nor the second defendant have given a fully accurate account and that both they and others may have been economical with the truth. There is both a legal and a moral difference between the telling of a lie in answer to a direct allegation and keeping silent when the correct allegation has not been made. Whilst I am unable to find the facts necessary for me to conclude that the claimant has proved that the alleged assaults on him happened or happened in the way he alleges or that "the glove" was used in the manner he alleges, I am equally unable to find positively that they did not and it was not. I confess to a lurking suspicion (partly but not wholly arising from the evidence of both JE and PL) that some form of prank may lie at the root of this case. A prank that may have involved a glove but not the extra features of the hot rubbing gel or digital penetration. A prank which is now, honestly or otherwise, misremembered or exaggerated. A prank that caused no lasting harm and would and could not justify the extensive claim made in this case. A prank in a form that has not been alleged so that the second defendant and others have not been required to admit or deny it but can with a clear conscience deny that which has been alleged. This suspicion amounts to no more than speculation (if that). Suspicion and speculation are no substitutes for evidence and no basis for findings of fact.
Additional remarks (vicarious liability)
It follows that it is, strictly, unnecessary to consider the merits of the claim against the first defendant, which is dependent upon the claimant succeeding in his claim against the second defendant. However, in deference to the detailed and interesting submissions of Mr Fewtrell and Ms Weereratne QC, and in case the case should go any further, I propose to deal fully with the vicarious liability issue, set out as issue (3) in paragraph 28 above.
In the course of my previous judgment (paragraphs 43 to 45) I dealt with the current state of the law on this issue, so far as was necessary for the purposes of deciding the preliminary issue of limitation and on the basis of the authorities cited to me at that time. The leading cases are still Lister v Hesley Hall [2002] 1 AC 215 (HL) and Various Claimants v Catholic Child Welfare Society and Others [2012] UKSC 56, [2013] 2 AC 1. At its most basic the question is whether the court is satisfied that any tortious act of an employee which has been proved by the claimant was "so closely connected with his employment that it would be fair and just to hold the employer vicariously liable". The burden of proof is on the claimant to prove that the acts of the second defendant, if proved, were so closely connected with his employment that it would be fair and just to hold the club vicariously liable for them. If so, the club will not be held liable for any culpable act or omission on its own part. Rather, it will be held answerable in law for the fault of the employee even though the club itself, as employer, is not (by any official or management staff) at fault. In my previous judgment, I summarised the position as set out in Munkman on Employer's Liability, 16th edition 2013, paragraph 4.89, citing the decision of the Supreme Court in the Various Claimants. This decision applies to vicarious liability generally and for the avoidance of doubt I find there to be no distinction between vicarious liability for child sexual abuse (specifically in issue in that case) and the vicarious liability for serious intimate physical assault (specifically in issue in the present case). The law is as stated by Lord Phillips at paragraphs [86]-[87]:
"Vicarious liability is imposed where a defendant, whose relationship with the abuser put it in a position to use the abuser to carry on its business or to further its own interests, has done so in a manner which has created or significantly enhanced the risk that the victim … would suffer the relevant abuse. The essential closeness of connection between the relationship between the defendant and the tortfeasor and the acts of abuse thus involves a strong causative link … [C]reation of risk is not enough, of itself, to give rise to vicarious liability for abuse but it is always likely to be an important element in the facts that give rise to such liability.".
Having regard to the fact that the club concedes that the relationship of employer and employee is capable of giving rise to vicarious liability, the dispute between the parties is whether there is a sufficient closeness of connection between (a) that relationship and (b) the alleged assaults. That dispute arises from the application of the second stage of the test (see paragraph 28 above). Mr Fewtrell's general submission on behalf of the club is that even if the second defendant did assault the claimant in the manner alleged on either or both occasions, those assaults were not so closely connected with his employment that it would be fair and just to hold the club vicariously liable because such acts could not fairly and properly be regarded as being done by the second defendant whilst acting in the ordinary course of the club's business or his employment. Mr Fewtrell effectively adopted the phraseology used by Lord Nicholls in Dubai Aluminium v Salaam [2003] 2 AC 366, a case decided after Lister but before Various Claimants.
More specifically, Mr Fewtrell's submission for the club was that the alleged assaults cannot fairly and properly be regarded as being closely connected with the second defendant's employment because the club did not create or enhance the risk of that kind of behaviour occurring to the claimant or any other apprentice. Reliance was placed on the fact that (as he invited me to find) the club conferred no special authority on the professional players. The apprentices looked up to them as role models but this did not amount to the conferring of a power over them. I would have found as a fact that the second defendant had no contractual authority to train or chastise apprentices, the tasks of the apprentices being done on the instructions of the club (acting by Mr Lacey) not of the professional players, there being no express term to that effect in the second defendant's contract (2, A251).
Mr Fewtrell submitted that such assaults could not in any way be said to be a means of advancing the club's interests or business, improperly or at all. The risk of friction or confrontation between different classes of employee is a feature of human interaction but was, he submitted, no more inherent in the club's business conducted at the Victoria Football Ground than in any other workplace and in that context the second defendant's conduct, if proved, was an unrelated and independent venture of his own (albeit in company with other employees of the club) and constituted at best a 'frolic' or at worst a 'personal act of vengeance or spite' for a perceived slight. His concluding argument was that it should be held that, even as the law has now developed, these actions fall outside the admittedly wider range of employer's liability for employee's actions.
In Wilson v Exel UK Limited [2010] CSIH 35 the Scottish Court of Session decided that it is not enough to bring home vicarious liability that the acts were committed in the employer's premises during the hours of work, the mere opportunity to commit them having been provided by the fact of employment, where the employee's behaviour was an unrelated and independent venture of his own, that is to say a personal matter, rather than a matter connected to his authorised duties. The club adopts this decision and I am asked to follow it.
I find that, on the evidence before me, the second defendant, even as the player designated as club captain, had no express or implied power or duty or discretion conferred upon him by the club to train, discipline or chastise the apprentices. His duties were to train with the first team, to play in goal for the first team (and for the reserve team if so required) and perhaps to act as president of the youth fan club ('The Junior Potters'). Although the contrary appeared to be pleaded against the club, I accept the unchallenged evidence of Mr Mills and Mr Lacey on this point. Thus, on the authorities, if the second defendant had been accused of assaulting a youth supporter in the course of performing the latter role the club would probably have been vicariously liable if the assault were to be proved. But that is not the case. At the time of the alleged assaults, the second defendant was neither training, nor playing in goal nor acting as the fan club president. Similarly, if the claimant's allegations had been made against Mr Lacey, who had been given direct authority over the apprentices and duties in relation to them including disciplinary powers, then the club would probably have been vicariously liable if the allegations were to be proved. Again, that is not the case.
Mr Fewtrell relied on the case of Mohamud v W M Morrisons Supermarkets PLC [2014] EWCA Civ 116, a decision of the Court of Appeal subsequent to the Various Claimants' case in which a violent unprovoked attack by a petrol station attendant employed by the defendant was held not to give rise to vicarious liability. Treacy LJ said at [46] that:
"… [T]he mere fact that the employment provided the opportunity, setting, time and place for the tort to occur is not necessarily sufficient … [S]ome factor or feature going beyond interaction between the employee and the victim is required … such as the granting of authority, the furtherance of an employer's aims, the inherence of friction or confrontation in the employment and the additional risk of the kind of wrong occurring".
Each case must be decided on its own facts. Mohamud can of course be distinguished on its facts because the relevant employee did not attack another employee (or trainee) but a member of the public. However, in my judgment it is the connection between the act of the wrongdoer employee and the relationship between the wrongdoer employee and the employer which matters, rather than the status of the alleged victim. The authorities do not appear to me to draw any distinction relevant in law between victims who are fellow employees (whether senior or junior) or customers or persons for whose care the employer was responsible (for example children in care homes) or strangers. Two contrasting reported cases are illustrative. In Wallbank v Wallbank Fox Designs Limited [2012] EWCA Civ 25, a junior employee assaulted a factory manager in response to an instruction and the employer of both was held vicariously liable because of the possibility of friction inherent in any workplace where instant instructions and quick reactions are required and the risk of an "over-robust" reaction was held to have been a risk created in the particular factual scenario in that case. On the other hand vicarious liability was not accepted in a case decided on the same occasion by the same court, namely Weddell v Barchester Healthcare Limited [2012] EWCA Civ 25, in which one employee called another employee at home and asked him to do a voluntary shift. When the other refused but came to the workplace to assault the maker of the request the employer was held not to be liable.
I confess that I find it hard to discern a relevant distinction between those two contrasting cases other than the speed of reaction and that in the former everything happened on the work premises but in Mohamud (at paragraph [35]) the two appear to have been reconciled by deciding that the cases in which an injured employee assaulted by another employee was successful the wrongdoer had been "given duties involving the clear possibility of confrontation" whereas in those cases in which the injured employee so assaulted failed no such duties had been given to the wrongdoer or such duties as had been given to the wrongdoer were circumscribed. This appears to me to be consistent with the non-inclusive list of factors identified in the Canadian case of Bazley v Curry (1999) 174 DLR (4th Ed) 45 the approach of McLachlin J in which was followed or adopted in Lister. Those factors included, at paragraph 41(3) of her judgment, the fact of the giving of power by the employer to the wrongdoer, the extent of the power conferred on the wrongdoer in relation to the victim and the extent to which the employer's business afforded the wrongdoer the opportunity to abuse that power.
In the most recent Court of Appeal authority on this issue, Graham v Commercial [2015] EWCA Civ 47, the facts were that a person described as a "co-employee" with no apparent distinction in status between the wrongdoer and the victim, had used a cigarette lighter in the vicinity of the victim whose overalls had been sprinkled with a thinning agent and a fire started which caused serious injury. This was described by the trial judge as a "deliberate and clearly reckless" act and by Longmore LJ as "frolicsome but reckless". The claimant failed at trial and on appeal. The wrongdoer's conduct was held to be similar to that of the wrongdoer in Wilson. The case fell into the category of cases in which it is inappropriate to impose vicarious liability.
None of the cases seem to me to place the focus on the duties given by the employer to the victim, but Miss Weereratne QC would in effect be driven by the fact (as I find) that no duties were given to the second defendant in relation to the apprentices in general or the claimant in particular to submit that it was the duties given to the apprentices (to the victim) which created or enhanced the risk of confrontation with first team players or of violence, whether frolicsome or vengeful or however else described, being done to them by first team players. She submitted that it would not matter whether the victim was an apprentice, another employee or a supporter. Her general submission was that the status of the victim is irrelevant and that, as she put it "a victim is a victim". I accept that submission so far as it goes but the context of the assault on the apprentice, the employee or the supporter is important for the satisfaction of the "close connection" test.
More specifically, taking her written opening and her closing oral submissions on behalf of the claimant as a whole Ms Weereratne QC argued that the club is a business, its business being association football and, whether or not there was a formal contractual obligation or requirement upon the professionals to train or chastise apprentices, the first team players and the apprentices nevertheless interacted in a strict hierarchical manner, the apprentices' duties including the performance of menial duties for the first team players (cleaning boots, putting out clean kit, preparing refreshments) which were imposed on them by the club requiring them to enter the first team players' dressing room from time to time.
Ms Weereratne QC also relied on the fact that the apprentices were also engaged on occasions in playing competitive minor league matches against other clubs, or practice matches among themselves, when the teams consisted of a mixture of first team players and apprentices, albeit that the question of how often if ever apprentices ever acted as linesmen was in dispute. In so far as it may be necessary, although it seemed to me not to be very important in the context of vicarious liability (it was more important to the facts of the second assault), I find on the evidence of Mr Mills and Mr Lacey that there were occasions, albeit rare, when apprentices might have been asked to act as linesmen and that it would have been Mr Chung rather than Mr Lacey who asked them.
In short, in her submission, far from keeping the first team players and the apprentices apart, the way in which the club operated its business unavoidably brought them together and if indeed the claimant did receive "the glove" from the second defendant firstly for the perceived fault of failing to make the tea hot enough to the satisfaction of some professionals and secondly for the perceived fault of having given an erroneous line call, then there was a sufficiently close connection between those acts and the relationship between the second defendant and the club and (perhaps more obviously in the case of the lukewarm tea rather than the erroneous line call) the carrying on of the business.
Of those arguments or submissions it seemed to me that the one which would have to be accepted for the claimant to succeed is that summarised in paragraph 153 above.
At risk of repetition, the claimant's case is that in the course of and for the purpose of the club's business of football they operated a system whereby, as part of their training, the apprentices performed what might be called "menial" duties for the professional players, including cleaning their kit, preparing liquid refreshments and cleaning their dressing room and it was this feature of the case which created or enhanced the risk of a professional assaulting an apprentice. The question is whether this created or enhanced a risk of friction such that professionals would, if disgruntled for whatever reason with the performance of menial or other services for them by apprentices, deliver some form of punishment whether or not strictly contractually authorised to do so.
I am invited to find that the club had created an inherent risk that, given the disparity of status between the professionals and the apprentices and the fact that the apprentices were required to perform menial services for the apprentices and in so doing come into close contact with them, real or perceived transgressions of the performance of those tasks would, in the context of an entirely male sporting workplace environment, lead not to some kind of formal complaint to management but to some form of non-contractual immediate informal sanction or punishment being imposed on apprentices by professionals.
In response, the club relies on the absence of actual knowledge or active encouragement and also on the absence of any supervisory or disciplinary duties or powers expressly contractually granted to the professional footballers in relation to apprentices. I am indeed satisfied on the balance of probabilities that only Mr Lacey, or higher authority above him such as such as Mr Mills or, in a case of sufficient seriousness, the board of directors, had those formal duties or powers. I find that in fact, if Mr Lacey had witnessed what was allegedly going on or had been made aware of what was allegedly going on, he would neither have condoned nor approved but would have stopped any such practice
In my judgment, the acceptance of the claimant's submission would involve an extension of the boundaries of vicarious liability beyond the parameters of the decided authorities. I consider that if I were to accept it I would be significantly and unjustifiably extending the scope of vicarious liability. Most if not all apprentices or trainees in all workplaces, not just sporting organisations, would be at such a theoretical risk and such a finding would be little short of holding that any employer should be vicariously liable for any assault on any apprentice or trainee by a full-time employee in all circumstances. If not a "leap", as Mr Fewtrell suggested, it would be a step further than the authorities justify. I am not prepared to make that step on the facts of this case. In the absence of the conferring by the club on the second defendant of any formal duties or powers in relation to the apprentices or proof that the management of the club in the persons of such senior employees as Mr Lacey or Mr Mills actually knew of and condoned the alleged practice, I find that even if it had occurred (as to which the claimant has not discharged the burden of proof) it would have been deliberate and intentional or reckless conduct involving a serious assault outside the course of the second defendant's employment. In other words, it would have been conduct of a kind analogous to that in the cases described by Longmore LJ in Graham as ones in which it is inappropriate to impose vicarious liability.
In summary, even if I had found that the claimant had proved his case against the second defendant I would have found that he had failed to prove it against the first defendant, that is to say that he had failed to establish his entitlement to hold the club vicariously liable for the second defendant's tortious conduct.
Accordingly if, contrary to my primary finding that the claim against the second defendant fails, the claimant had proved that he was assaulted by the second defendant (assisted by other professionals) on either or both of the two occasions alleged, the criteria for the imposition of vicarious liability for such assault or assaults would not have been made out on the particular facts of this employment relationship. I would have determined issue (3), as set out in paragraph 28 above, in the negative. The claimant would not have been entitled to judgment jointly and severally against the first defendant (the club) as well as against the second defendant.
CONCLUSION
On my primary findings, the claimant's claims against both defendants are dismissed.
The appropriate costs order will be one in both defendants' favour against the claimant for the costs of the claim to be determined by detailed assessment in default of agreement. The parties were not required to attend court for the formal handing down. As I have said (paragraph 10 above) a draft of this judgment was circulated. I also invited the parties to lodge a draft order for the court's approval before the handing down date. They have helpfully done so, subject only to my approval of interim payments on account of costs and my decision as to time for payment thereof. I signified my approval and have directed payment within 21 days after handing down. The appropriate Order, essentially in terms of the draft version agreed and lodged, will be sealed and sent to the parties.
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MRS JUSTICE THIRLWALL DBE
Mrs Justice Thirlwall:
The applicant, Ms Goncharova, seeks an order which will permit the Westminster Coroner to release blood and other samples taken from the body of Mr Kakha Bendukidze, who she says was her father, so that they may be sent for DNA testing at the Bureau of Forensic Medical Examination in Moscow in accordance with an order of the Gagarinsky District Court in Russia. Ms Zolotova, Mr Bendukidze's widow, resists the application.
Background
Kakha Bendukidze, was a Georgian businessman. He died in a London hotel in November 2014, a short time after undergoing heart surgery in Switzerland. In accordance with the law of this jurisdiction the coroner arranged for the taking of samples from his body in order to establish the cause of death.
Some of the samples were tested. As a result of the testing the coroner was satisfied that Mr Bendukidze died of natural causes. The rest of the samples are held to the order of the coroner at Imperial College, London.
Mr Bendukidze was enormously wealthy. At the time of his death he was married to Ms Zolotova who says they had been married for 16 years. Ms Goncharova says that the couple had been living apart for some years. This is disputed by Ms Zolotova.
The applicant is in her mid twenties. She asserts that she has known Mr Bendukidze since childhood. He played a part in her life for many years. She knew him as her godfather. In recent years he told her she was in fact his daughter. Ms Zolotova asserts that she had no knowledge of Ms Goncharova until the latter announced who she was at the funeral of Mr Bendukidze. Ms Zolotova does not accept that Ms Goncharova is the daughter of Mr Bendukidze.
Mr Bendukidze's massive estate is in Georgia and Russia. There may be assets elsewhere. Mr Bendukidze died, it appears, intestate. Ms Zolotova is bringing proceedings in the Gagarinsky District Court, Moscow. Although she was aware of Ms Goncharova's claim to be the daughter of Mr Bendukidze, Ms Zolotova sought and obtained a declaration certifying that she was the sole heir to Mr Bendukidze's estate. The applicant has intervened in those proceedings. She seeks a declaration that she is the daughter of Mr Bendukidze. She is also intervening in other proceedings brought by Ms Zolotova in Georgia. On 28th May 2015 the Tbilisi Municipal Court granted Ms Goncharova's application for an injunction preventing the distribution of Mr Bendukidze's assets in Georgia to Ms Zolotova. On 28th September 2015 the Georgian court held that it would abide by the decision of the Russian court on Ms Goncharova's claim to be the daughter of Mr Bendukidze.
The fundamental question in the resolution of the dispute between the two parties is whether or not Ms Goncharova is the daughter of Mr Bendukidze. With modern techniques this can be resolved quickly and easily by way of analysis of blood or tissue taken from the deceased, identifying the DNA and comparing it with the DNA of Ms Goncharova. Ms Goncharova is willing to provide a sample for testing and comparison. There is a very large quantity of material some of which could be used for DNA testing:
a) 15 ml stomach contents
b) 10 ml plain blood
c) 5 ml urine
d) 1 ml blood preserved with fluoride oxalate
e) 2 ml urine preserved with fluoride oxalate
Despite the availability of samples from Mr Bendukidze and the willingness of Ms Goncharova to submit a sample for DNA testing this obvious step has not been taken in the 11 months since Mr Bendukidze's death.
DNA Solutions
Some time between the death of Mr Bendukidze and January 2015 Ms Zolotova sent other samples taken on her behalf from Mr Bendukidze's body to DNA Solutions Ltd, a company that carries out DNA testing. It is Ms Goncharova's case that she and Ms Zolotova had agreed that DNA Solutions would carry out a DNA test. Ms Zolotova has not commented on this but it is difficult to see why the samples would be sent to a company of that name other than for DNA testing. Whatever the original position, Ms Goncharova knew the samples were with DNA Solutions for testing and contacted them to find out what was going on. From emails produced by Ms Goncharova for the first hearing and further emails adduced by her at the renewed hearing it is plain that by 31st January 2015 Ms Zolotova had directed DNA Solutions to return the samples to her. In recent days they have said that they did not carry out the test. There is no evidence about what Ms Zolotova has done with those samples.
The Probate Proceedings
On 29th July 2015, the applicant engaged PennTrust Limited, an independent firm of administrators, and applied to the Probate Registry of the Family Division to obtain letters of administration over the estate of Mr Bendukidze pursuant to rule 30(1)(c) of the Non-Contentious Probate Rules 1987. On the same day she applied to the Chancery Division under section 117 of the Senior Courts Act 1981 for an order appointing PennTrust as independent administrator over the estate of Mr Bendukidze pending suit of the proceedings in the Probate Registry. The purpose of that application was to ensure that the coroner did not release the samples held by the court to Ms Zolotova.
On 30th July 2015 Mann J made an order on the interim application which:
(a) Recited that Ms Zolotova had undertaken not to request the samples from the coroner pending determination of the application made by PennTrust (in fact the application was made by the applicant but nothing turns on this);
(b) Recited that Ms Zolotova had undertaken to write forthwith to the coroner in a joint letter from the parties' solicitors confirming their respective consent to the coroner retaining the samples until otherwise directed by joint letter from the parties' solicitors; and
(c) Provided at paragraph 6 that, "In the event that [the coroner] confirms by 2pm on 31st July 2015 that she is prepared to retain the [samples] and not dispose of them without giving at least 14 days' notice to the parties then this application shall be stayed generally with liberty to restore".
On 31st July 2015 it was confirmed on behalf of the coroner that she would hold the samples on the basis set out in paragraph 6 of the order of Mann J.
In the meantime the applicant's solicitors were chasing the application in the Probate Registry. On 25th September 2015, somewhat unexpectedly, the District Judge made an order which provides that, "the applicant's application for letters of administration to PennTrust Rule 30(1)(c) is granted…" and that, "this order having been made in the absence of the parties either party has permission to apply to have it set aside within 7 days of receipt".
On 1st October 2015 the coroner stated that if the appointment of PennTrust was confirmed she would release the samples to the personal representative of Mr Bendukidze; and that if the appointment was not confirmed she would consider releasing them to the applicant "in any case by the 14/10/2015, as the sample appears to be the key to resolving the legal dispute between the parties and so not to allow it to be DNA tested would be seen to be obstructing the administration of justice".
By application notice dated 5th October 2015, Ms Zolotova applied (on a non urgent basis) to set aside the Probate Order. She asserts that the appointment of administrators was inappropriate because Mr Bendukidze had no business interests in the UK and no assets in this jurisdiction. That application is listed for hearing in January 2016.
On 17th October 2015 an email was sent on behalf of the coroner to the parties stating that, "the coroner has requested confirmation as to whether PennTrust have been officially appointed as the PR for this case. It is her understanding that the matter was to be resolved by 7th October 2015. If PennTrust have been appointed then she would wish to release the samples to them".
Both PennTrust and the coroner have been informed of these proceedings. They remain neutral and will abide by the order I make.
The Orders of the Russian Court
On 3rd July 2015 Ms Goncharova's Russian lawyers filed a petition with the Gagarinsky District Court for a letter of request to be sent to the Westminster Coroner's Court to transfer the samples to the Russian Court. At the same time a petition was filed asking for the appointment of an expert to carry out DNA analysis of the samples to determine the issue of paternity.
On 13th July 2015 the Gagarinsky District Court made an interim order directing the Westminster Coroner's Court to preserve the samples for DNA testing to be carried out. According to the respondent's solicitors this was not served on the coroner but in any event they told the Westminster Coroner in a letter of 22nd July 2015 that the order had no legal effect in England.
The hearing of the application of 3rd July 2015 was adjourned to 4th August 2015. Just before the hearing Ms Zolotova's lawyers provided a significant quantity of documentation by way of support for her objection to the petition of Ms Goncharova and so it was adjourned again, this time to 11th August2015.
On 11th August 2015 the judge heard Ms Goncharova's renewed application for a letter of request to be sent to the Westminster Coroner's Court for its assistance in providing the samples for analysis in Russia. He also considered her application that the court appoint an expert in Russia who would be charged with carrying out DNA testing on the samples once received from the Westminster Coroner.
At the hearing Ms Zolotova maintained her objection to the application that DNA testing be carried out on a number of grounds including i) the fact that there were questions about the integrity of the Russian laboratory proposed by Ms Goncharova and ii) the testing would only serve to prolong the Russian proceedings.
Ms Zolotova's representatives proposed the use of a different laboratory but failed to include the laboratory's consent that it would be prepared to carry out the DNA analysis if ordered to do so.
The judge ordered that both parties prepare a list of Russian state laboratories which the court would consider at the next hearing on 1st September 2015.
On that date Ms Goncharova maintained her petition for the appointment of DNA experts and for a letter of request to be sent to Westminster Coroner's Court for the release of the samples. She provided letters from two state laboratories who would be prepared to carry out the DNA analysis. Ms Zolotova's lawyers provided their list of laboratories, one of which was the Bureau of Forensic Medical Examination (BFME).
Ms Zolotova's Russian lawyers again objected to the appointment of any Russian laboratory to carry out a DNA analysis, not because of standards in the laboratories, but because that process would prolong the Russian proceedings, a submission that is not easy to understand, but I have not heard argument about it. In any event it carried no weight since despite the objections, the judge ordered that the BFME be appointed to carry out an analysis of the samples once they were provided from the Westminster Coroner.
Although she has not attended the hearing before me, Ms Zolotova has been represented throughout, by leading counsel, junior counsel and at least two solicitors, including a partner in the firm of Forsters and her Russian lawyer. I am quite satisfied that every argument that could conceivably be run has been run on her behalf on this application. That is not a criticism; it is the fact from which I infer that no less quality or quantity of advice and representation was before the Russian Court which made the order.
In so far as is relevant the Court Ruling reads as follows (the emphasis is mine):-
"September 1, 2015, Gagarinsky District Court of the City of Moscow consisting of the Presiding Judge Achamovich I. V. assisted by Secretary Pak E. A. having examined in an open court hearing the civil case No.2-3307/15 regarding the claim of Goncharova Anastasia Igorevna against Zolotova Natalia Yurievna disputing the establishment of paternity, recognition of heirship, the court has found:…
Having heard the explanations of the parties' representatives, the court has concluded the following.
In accordance with Article 79 of the Civil Procedural Code of the Russian Federation.
If questions arise in the course of considering the case which requires special knowledge in various fields of science, technology, the arts and the handicrafts, the court shall appoint an expert to express an opinion thereupon. The performance of the expertise may be entrusted to a legal expert agency, to a particular expert or to several experts. The resolution of the dispute requires special knowledge in the fields of medicine, biology, genetics, the court finds the request reasonable and a subject to satisfaction. In accordance with Articles 166, 79, 80 of the Civil Procedural Code of the Russian Federation, the court has ruled:
To appoint and conduct under the civil case No. 2-3307/15 regarding the claim of Goncharova Anastasia Igorevna against Zolotova Natalia disputing the establishment of paternity, recognition of heirship, the forensic-molecular-genetic examination using the biological material, stored at the Westminster Coroner's Court of the United Kingdom, located at the address: 65 Horseferry Road, London, SW1P 2ED, UK and ask the following questions:
Is Bendukidze Kakha Avtandilovich, born on April 20, 1956 in Tbilisi, Georgia, died on November 13, 2014 the biological father of Goncharova Anastasia Igorevna, date of birth November 01, 1990 is not excluded, what is the probability that the result is not a consequence of a random coincidence of individualising symptoms of unrelated individuals?
Execution of the forensic-molecular-genetic examination to be assigned to the experts of the State State-Financed Institution of Health Care of the city of Moscow "Bureau of Forensic Medical Examination", located at the address: Moscow, Tarniy proezd, building 3.
To assign to the experts of the State State-Financed Institution of Health Care of the city of Moscow "Bureau of Forensic Medical Examination", located at the address: Moscow, Tarniy proezd, building 3 to collect the biological material of Bendukidze Kakha Avtandilovich, died November 13, 2014 from the Westminster Coroner's Court of United Kingdom…for the execution of the forensic-molecular-genetic examination.
To oblige Goncharova Anastasia Igorevna to ensure her appearance for the examination and deliver the biological samples of Bendukidze Kakha Avtandilovich received from the Westminster Coroner's Court of United Kingdom…to the State State-Financed Institution of Health Care of the city of Moscow "Bureau of Forensic Medical Examination"…;
The fact of the receipt of biological samples in relation to Bendukidze Kakha Avtandilovich promptly notify the Gagarinskiy District Court of the City of Moscow…;
To oblige Zolotova Natalia Yurievna to submit the biological samples of Bendukidze Kakha Avtandilovich, which she had received from "DNA Solutions" Limited into the laboratory of the State State-Financed Institution of Health Care of the city of Moscow "Bureau of Forensic Medical Examination"…
The experts in accordance of the articles 307,308 of the Criminal Code of the Russian Federation should be warned of their responsibilities.
All expenses, related to the execution of the forensic-molecular-genetic examination to be handled by Goncharova Anastasia Igorevna.
To entrust Westminster Coroner's Court of United Kingdom…to send the biological samples to the State State-Financed Institution of Health Care of the city of Moscow "Bureau of Forensic Medical Examination", having notified the Gagarinskiy District Court of the City of Moscow located at the address: Moscow, ulitsa Donskaya, No.11, Building, room 302;
The delivery of the samples should be conducted in compliance with the storage conditions, including during the transportation, at the expense and power of Goncharova Anastasia Igorevna, entrusting her all the necessary expenses.
The terms of the execution of the forensic-molecular-genetic examination to be set for one month after the court ruling comes in force, ie until October 16, 2015".
The translation is far from perfect but the gist of the order is clear. Mr Holiner, a dual English/Russian qualified barrister retained by Ms Zolotova also provided a translation. It is attached to this judgment at Appendix A.
Ms Goncharova is prepared to provide a sample of her DNA for comparison with that of Mr Bendukidze. Ms Goncharova is not in a position to provide the samples since they are subject to the coroner's order. The coroner will abide by the order of this court.
Ms Zolotova has not complied with the order of the Russian court to deliver to BFME the samples originally sent to DNA Solutions. I have received no explanation for that. She appears to be in contempt of the Russian court order. That is a matter for the Russian court.
The use of DNA testing in the Russian courts
In the Russian courts where the parties seek to rely on DNA testing in order to establish/disprove paternity, the testing must take place in a Russian laboratory. I take this from the evidence of Ms Mishenkina. It was first asserted by Mr Green in his first witness statement and was relied on by the applicant at both hearings. Mr Holiner has not dealt with it nor has Ms Zolotova's Russian lawyer who was present throughout the hearings in front of me. Mr Wardell QC, who appeared with Ms Newton for Ms Zolotova, submitted that I should not accept the evidence because Ms Mishenkina may be partisan. I can see no basis for coming to that conclusion, particularly since Mr Wardell has produced no evidence to contradict the evidence. I accept it.
At various stages in the argument Mr Wardell warned me of "serious dangers" were the samples to be tested in Russia. The risk of "false positives" was referred to. Reliance was placed on the report of Mr Barber, an experienced forensic scientist based in the UK who had been engaged by Forsters on behalf of Ms Zolotova. He has no experience or knowledge of the work of BFME or the standards that apply there or anywhere else in Russia. He informs the court that there are international standards which apply to laboratories working on DNA testing. They are recognised across the world and are applied in many UK laboratories. To be accredited by the Ministry Of Justice for use in court proceedings in the UK, companies which offer these services must meet a particular International Standard, ISO 17025. In Russia, ISO 17025 or other International Standards are not routinely applied and so Mr Barber opines that it is unlikely that they are applied at BFME. The answer to that question must be known to Ms Zolotova's legal team in Russia since they selected BFME. In any event Mr Barber goes on to say that he is aware that there are standards which apply in Russian laboratories but he does not know what they are. Before entrusting testing to BFME he would wish to be reassured about their processes and procedures. I am asked to infer that because Mr Barber, who does not hold himself out to be an expert in the standards in Russian laboratories, does not know what the standards are, there is a risk that the standards are not sufficiently high for me to be satisfied that the samples may safely be tested in Russia. I am not prepared to draw the inference urged upon me. The laboratory chosen by Ms Zolotova is acceptable to and approved by the Russian court which is seised of the claims. I can see no reason why a Russian court faced with determining paternity through the use of DNA testing would have any lower standards as to the integrity of the scientific process than would a court in the UK. Mr Barber's evidence goes nowhere near establishing "serious dangers" or the risk of "false positives", as Mr Wardell put it. I should add that it would be open to the parties to challenge any evidence that came from the laboratory, in the usual way. If there were genuine concerns about the process it would have been (and it remains) easy enough to carry out tests on samples in the United Kingdom.
My own experience of DNA testing for the purposes of our domestic courts is sufficient for me to know that accurate reliable results may be obtained from the testing of relatively small volumes of material or of whole blood. There is, by the standards of DNA testing, a very large volume of material here. Although the Russian court directed the sending of all samples (those held by the coroner and those held by Ms Zolotova) the purpose of the order was to ensure that sufficient samples for accurate testing are received at BFME.
The Application
The application is made on two alternative bases: under Section 2 of the Evidence (Proceedings in Other Jurisdictions) Act 1975 (the 1975 Act) and alternatively under section 25 of the Civil Jurisdiction and Judgments Act 1982.
Urgency
The application came before me with a one and a half hour time marking as a matter of urgency on 14th October. The urgency arose because 16th October was the date by which the BFME was to carry out the testing. The applicant's advisers were concerned that there was a risk that failure to comply with the order may lead to the claim being struck out altogether. The respondent's representatives said that there was no urgency at all and that since one and a half hours was an unrealistic time estimate I should restrict myself to giving directions only. I directed the parties to get as far as they could in the time available with a view to taking stock. In the event it was possible for me to hear the balance of the argument on 20th October. I understand that the Russian Court has indicated informally that it will probably look at the case at the end of October/beginning of November. This judgment is being delivered within that time scale. I am satisfied that the slight delay has not prejudiced the applicant. The respondent has had all the time necessary properly to defend the application.
Evidence (Proceedings in Other Jurisdictions) Act 1975
The 1975 Act was passed so that the United Kingdom could ratify the Hague Convention on the Taking of Evidence Abroad in Civil or Commercial Matters (the Hague Convention). It does not contain the same provisions as the Convention nor does it incorporate the Convention.
Mr Wardell reminds me and I accept that when dealing with this application there may be no recourse to the inherent jurisdiction of the court. The powers are as set out in the 1975 Act.
Sections 1, 2 and 9 of the 1975 Act read, so far as is relevant, as follows:
1. Application to United Kingdom court for assistance in obtaining evidence for civil proceedings in other court.
Where an application is made to the High Court … for an order for evidence to be obtained in the part of the United Kingdom in which it exercises jurisdiction, and the court is satisfied-
(a) that the application is made in pursuance of a request issued by or on behalf of a court or tribunal ("the requesting court") exercising jurisdiction …in a country … outside the United Kingdom; and
(b) that the evidence to which the application relates is to be obtained for the purposes of civil proceedings which either have been instituted before the requesting court or whose institution before that court is contemplated,
the High Court … shall have the powers conferred on it by the following provisions of this Act.
2.-Power of United Kingdom court to give effect to application for assistance.
(1) Subject to the provisions of this section, the High Court … shall have power, on any such application as is mentioned in section 1 above, by order to make such provision for obtaining evidence … as may appear to the court to be appropriate for the purpose of giving effect to the request in pursuance of which the application is made; and any such order may require a person specified therein to take such steps as the court may consider appropriate for that purpose.
(2) Without prejudice to the generality of subsection (1) above but subject to the provisions of this section, an order under this section may, in particular, make provision-
(a) for the examination of witnesses, either orally or in writing;
(b) for the production of documents;
(c) for the inspection, photographing, preservation, custody or detention of any property;
(d) for the taking of samples of any property and the carrying out of any experiments on or with any property;
(e) for the medical examination of any person;
(f) without prejudice to paragraph (e) above, for the taking and testing of samples of blood from any person.
(3) An order under this section shall not require any particular steps to be taken unless they are steps which can be required to be taken by way of obtaining evidence for the purposes of civil proceedings in the court making the order (whether or not proceedings of the same description as those to which the application for the order relates); …
9.-Interpretation
(1) In this Act-
"civil proceedings", in relation to the requesting court, mean proceedings in any civil or commercial matter;
"requesting court" has the meaning given in section 1 above;
"property" includes any land, chattel or other corporeal property of any description;
"request" includes any commission, order or other process issued by or on behalf of the requesting court.
Mr Wardell informed me that he can find no case where a court has made an order under the 1975 Act requiring physical property to be transferred out of the jurisdiction. That does not mean that it cannot be done. It will rarely be necessary since in most cases the party obtaining the evidence then takes it to the other country for the purposes of proceedings in that jurisdiction. The question is does the order sought come within the Act?
There are four questions to be resolved.
i) Is this an application for an order for evidence to be obtained in the United Kingdom?
ii) Is the application made in pursuance of a request from the Russian court?
iii) Does the application relate to evidence which is to be obtained for the purposes of civil proceedings in Russia? and
iv) Does the order sought require steps to be taken by way of obtaining evidence which the High Court can require to be taken in civil proceedings here (whether or not proceedings of the same description).
I shall deal with (i) and (iii) together.
There was some shifting of position by the respondent. Ultimately it was Mr Wardell's argument that this application is not about obtaining evidence at all. He submitted that, properly analysed, it is an application for a mandatory injunction for the samples to be sent to Russia for testing. Accordingly, he argues, the 1975 Act is of no application.
I do not accept this argument. The Russian court requires DNA testing to be carried out in Russia on samples taken from Mr Bendukidze in order to resolve the question of paternity. The primary evidence will be the samples which are currently held to the order of the coroner. Testing of samples will reveal DNA (where it is present in the sample). The evidence of the results of the DNA test is not free standing. It depends on the original sample.
An order is necessary to require the coroner to release the samples she holds. That is an order for obtaining evidence. The contrary is not arguable. For the evidence to be obtained for the purposes of the proceedings in Russia it must be received at BFME for testing so that the results may be used in evidence, if appropriate. An order directing either of the parties to arrange for the samples to be sent to BFME for the tests to be carried out does no more than ensure that the samples are obtained for the purposes of the Russian proceedings. In most cases it is not necessary to order the parties to send evidence to the requesting country because the party seeking the evidence receives it and takes it to the country for the purpose of the proceedings. That approach is not expedient in a situation where there is such mistrust between the parties.
It follows that I am satisfied that the answer to the questions at (i) and (iii) above is yes.
(ii) - Is the application made in pursuance of a request from the Russian court?
I am satisfied that the application is made in pursuance of a request from the Russian court for the following reasons.
First, the definition of "request" in section 9 of the 1975 Act includes an order (see paragraph 39 above);
Second, the order made by the Russian court contains all that could be required i) to seek the release of the samples by the coroner ii) to secure the safe passage of the samples from the coroner to the BFME iii) to secure the production of the DNA Solutions samples by Ms Zolotova to BFME iv) to secure the production of a sample of her own DNA by Ms Goncharova to the BFME and v) to secure the testing by BFME within a reasonable timescale.
Mr Holiner says in his first report that the order gives the impression that the court "simply decided to order all possible parties to obtain or produce the samples in the hope of achieving this outcome." I have the same impression. The need for speed may well have been to avoid the delay in the proceedings which Ms Zolotova said would result were testing ordered.
Mr Wardell submits that the order of the Russian court is not a Hague Convention compliant letter of request and so the application is not a request within the 1975 Act. Article 3 requires that the letter must specify-
a) the authority requesting its execution and the authority requested to execute it, if known to the requesting authority;
b) the names and addresses of the parties to the proceedings and their representatives, if any;
c) the nature of the proceedings for which the evidence is required giving all necessary information in regard thereto;
d) the evidence to be obtained or other judicial act to be performed.
Where appropriate the Letter shall specify, inter alia-
g) the documents or other property, real or personal to be inspected
…
Mr Pringle submits that there is no need for a letter of request which complies with Article 3. What matters is that there is a request which complies with the Act. I agree. In any event, save for the omission of the parties' addresses the order contains everything required by the Convention. The addresses here are immaterial.
The order is directed to the Westminster Coroner and not the central authority as required by the Convention. That does not matter. It is before the High Court, as the 1975 Act requires. International comity would not be served were I to send the order back to Russia with a request that it should be sent again, this time to the Senior Master so that he may send it to the High Court. If authority for the proposition that the Court may adopt a pragmatic approach is necessary, see the observations of Lord Keith of Kinkel in Rio Tinto Zinc Corp v Westinghouse Electric Corp [1978] QB 547 at 653 C-E "It is the duty of the court to do its best, consistently with the provisions of the statute, to assist the processes of justice in the court from which the request comes, and to do so in a way as will cause the minimum of delay".
Mr Holiner opines that the order would not be considered an effective (Hague Convention compliant) letter of request in Russian law for broadly the same reasons as those given by Mr Wardell, with the addition of a requirement in Russian law for a certified translation. This has not caused any difficulty. He also submits that the order would not in Russian law be effective extra territorially. No doubt the judge knew that. It does not prevent the order from being a request under the 1975 Act nor does the fact that the judge did not consider the application for a Hague Convention Compliant letter of request. I am satisfied that the order is a request within the meaning of the 1975 Act.
iv) Does the order sought require steps to be taken by way of obtaining evidence which the High Court can require to be taken in civil proceedings (whether or not proceedings of the same description).
Mr Wardell submits that the High Court would not make an order to send samples to Russia. That misses the point. Were the proceedings taking place in the High Court for (eg) a declaration of parentage under the Family Law Act 1986 or for relief under the Inheritance Act 1975 and paternity was in issue the court could and would make an order for DNA samples to be tested (pursuant to its powers under the Family Law Reform Act and/or CPR 25.1). In this jurisdiction the testing is done by laboratories approved by the Ministry of Justice, in the United Kingdom. The court directs which company is to carry out the testing. There is usually no reason to send samples abroad. There may well be a situation where expertise lies only abroad and an order may be made for testing in another jurisdiction but that is not this case.
It follows that the order requires steps that the High Court can require to be taken in this jurisdiction.
Mr Wardell further submitted that the order could not be made because it would cut across the Probate Proceedings. I do not accept this. The only issue in the probate proceedings is whether PennTrust should be administrators and if so should the coroner release the samples to them rather than to Ms Zolotova. Either way the order made by the High Court in civil proceedings would be the same.
Mr Wardell further argued that the High Court would be prevented from making the order by reason of the operation of the Human Tissue Act 2004.
By section 1, read in conjunction with Schedule 1, it is unlawful to "obtain scientific or medical information about a …deceased person which may be relevant to another person" from "relevant material" (the samples would be included in this definition), without "appropriate consent". Appropriate consent is the "consent of a person who stood in a qualifying relationship to [the deceased] before he died". It is not disputed for the purposes of this part of my judgment that Ms Zolotova is the person able to give appropriate/qualifying consent.
Mr Pringle argued in his skeleton that were the proceedings taking place in England Ms Zolotova would consent in any event. At that stage she had raised two objections to testing:-
i) religious reasons (unspecified) and
ii) concerns about the quality of testing in Russia.
As to (i) were there genuine religious reasons to object, Ms Zolotova would not have obtained samples from Mr Bendukidze's body to send to DNA Solutions Ltd. Furthermore her solicitors, Forsters, could not properly have suggested to the coroner, in July 2015, that if testing were necessary in the Russian courts Mr Bendukidze's body could be exhumed for that purpose.
As to (ii) I have already dealt with this earlier in the judgment. In any event, were the proceedings in England, this reason to refuse consent would also disappear.
At the resumed hearing I was told that Ms Zolotova now "stands on her rights" under the Human Tissue Act 2004. She intends to use her withholding of consent as leverage in negotiations with Ms Goncharova. She might consent to the release of the samples for testing provided that Ms Goncharova gives certain undertakings to her about her entitlement to a share (presumably size to be agreed) of the estate should the DNA test reveal that Ms Goncharova is indeed the daughter of Mr Bendukidze. This puts the previously expressed religious reasons and alleged concerns about the quality of testing into perspective. Consent here is being used as a bargaining chip.
I am satisfied that were the English Court concerned with determining the parentage of someone in Ms Goncharova's position (in Inheritance Act proceedings or proceedings under the Family Law Act 1986) and post mortem samples were available in the circumstances that pertain here it would have no hesitation in ordering DNA testing of the samples for the reasons I have already given. It is not unlawful to carry out DNA testing in accordance with an order of the Court.
I am satisfied that the order sought is for steps to be taken that the High Court can require to be taken in civil proceedings.
Mr Wardell finally submits (in respect of the application under the 1975 Act and section 25 of the CJJA) that applying general principles I should take account of the "effect of the relief, if granted". The effect of the testing will be that it will be known whether or not Mr Bendukidze was Ms Goncharova's father. Thereafter the Russian and Georgian courts will apply their respective law in determining the dispute about the estate. Mr Wardell submits that the law of Georgia may be interpreted so as to leave Ms Zolotova with nothing. He refers to Article 1341 of the Civil Code. Were the court to be satisfied, contrary to her assertions, that she had in fact been separated from Mr Bendukidze for three years or more at the time of his death she "may be disinherited". That does not begin to found an argument that I should not make the order on some sort of public policy grounds, particularly in the absence of expert evidence on the law of Georgia.
I am satisfied that the applicant is entitled to an order under the 1975 Act. Subject to submissions as to its precise form, I shall make an order securing the release of one half of the samples so that they may be sent to BFME for testing in accordance with the order of the Russian Court. [ THIS SECTION WILL NOT APPEAR IN THE FINAL JUDGMENT A draft order accompanies this draft judgment. I shall hear submissions, if necessary, on hand down about the precise mechanics and timing as well as any ancillary matters, including who pays for the safe carriage and delivery of those samples released by the coroner, costs etc].
I am satisfied that the provision of one half of the samples meets the request of the Russian Court.
Section 25 of the Civil Jurisdiction and Judgments Act 1982
If I am wrong about the fact that the application involves "obtaining evidence" then the applicant relies on section 25 of the Civil Jurisdiction and Judgments Act 1982. It reads:
25.- Interim relief in England and Wales and Northern Ireland in the absence of substantive proceedings.
(1) The High Court in England and Wales or Northern Ireland shall have power to grant interim relief where-
(a) proceedings have been or are to be commenced in a [Brussels [Contracting State or a State bound by the Lugano Convention]2
---
other than the United Kingdom or in a part of the United Kingdom other than that in which the High Court in question exercises jurisdiction; and
[
(b) they are or will be proceedings whose subject-matter is either within the scope of the Regulation, as determined by Article 1 of the Regulation, within the scope of the Maintenance Regulation as determined by Article 1 of the Lugano Convention or within scope of the 2005 Hague Convention as determined by Articles 1 and 2 of the 2005 Hague convention (whether or not the Regulation, the Maintenance Regulation, the Lugano Convention or the 2005 Hague Convention has effect in relation to the proceedings).
]6
(2) On an application for any interim relief under subsection (1) the court may refuse to grant that relief if, in the opinion of the court, the fact that the court has no jurisdiction apart from this section in relation to the subject-matter of the proceedings in question makes it inexpedient for the court to grant it.
Although Russia is not party to the Brussels or Lugano Conventions, by the Civil Jurisdiction and Judgments Act 1982 (Interim Relief) Order 1997 (SI 1997/30) the scope of sections 25(1) and (2) of the CJJA are satisfied, the English court may make orders in aid of proceedings taking place in the courts of Russia.
This provision gives the court a broad power to grant interim relief in support of foreign proceedings.
It is agreed that the issues on this application are two fold:-
i) Would the court grant the relief sought if the substantive proceedings were in this jurisdiction? and
ii) If yes, does the fact that the substantive proceedings are taking place abroad render the granting of any such interim relief inexpedient?
Mr Wardell accepted that the court could in theory make an order in the terms sought but submitted that I should not do so.
Would the court grant the relief sought if the substantive proceedings were in this jurisdiction?
As I said in respect of the application under the 1975 Act the substantive proceedings would probably be under the Inheritance Act 1975 and/or the Family Law Act 1986. Whatever the precise nature of the application, the court in civil proceedings has comprehensive powers under the CPR to order inspection of property, the taking of samples, the carrying out of experiments (see CPR 25.1). The Family Law Reform Act also permits DNA testing. Mr Pringle submits that the High Court would be entitled to and would order that a sample or samples be sent to a named MoJ approved laboratory for DNA testing. Where, as here, there is sufficient whole blood for repeat testing the court may well direct that some of it should be retained for later testing, if necessary.
Mr Wardell submitted that the order would not be made for a number of reasons:-
i) It would cut across the probate proceedings.
I do not accept this for the reasons I have already articulated.
ii) There are "serious dangers" in sending the samples to Russia.
I do not accept this for the reasons already set out above. Any issues about the validity of a particular test can be determined in the Russian court. Retention of half of the samples in the UK would guard against that hypothetical risk.
iii) Ms Zolotova is the person who has the right to give or withhold consent to testing under the Human Tissue Act 2004. This order would cut across that. I have already dealt with the unattractive stance Ms Zolotova now takes. I am quite satisfied that the Human Tissue Act is not a reason not to make the order.
iv) Mr Wardell further argues that this order is effectively a mandatory injunction which would dispose finally of the issues in the proceedings and so the threshold for granting it at an interim stage is extremely high. He has referred me to a number of well known authorities.
The issues in the Russian proceedings are paternity and the distribution of the estate. If Ms Goncharova is not Mr Bendukidze's daughter then the proceedings will be disposed of in favour of Ms Zolotova. If Ms Goncharova is his daughter then Russian/Georgian law will determine what happens to the estate. The results of the testing are overwhelmingly likely to determine paternity. There is no good reason to delay this fundamental step any further. The Russian Court has ordered that the testing take place now. Further delay will achieve nothing.
Sending samples to Russia does not risk injustice, as was submitted to me. Not sending the samples for testing risks grave injustice. The Russian court will be deprived of the best evidence upon which to determine whether Ms Goncharova is the daughter of Mr Bendukidze, a question to which she has a right to an answer irrespective of her rights to a share in the estate.
Were the substantive proceedings in this jurisdiction the High Court would make an order for the samples to be tested.
Does the fact that the substantive proceedings are taking place abroad render the granting of any such interim relief inexpedient?
Mr Pringle submits that there is no sensible basis upon which it might be said that because the substantive proceedings are taking place abroad it is inexpedient to grant this relief. I agree.
With due deference to the submissions of Mr Wardell which ranged over a number of well known authorities, the answer to this question is plain. It is not inexpedient. On the contrary it is highly expedient since the samples must be tested in Russia for the results to be used in the Russian court. I do not repeat my findings in respect of the quality of testing in Russia.
Accordingly I would, were it necessary to do so, make an order under Section 25. It would be in the same terms as the order under the 1975 Act.
Annex A
Alternative translation of the Order of the Gagarinsky District Court
[Drew Holiner]
The operative part of the Ruling of the Gagarinsky District Court of Moscow dated 1st September reads as follows:
'Being governed by Articles 166, 79 and 80 of the Code of Civil Procedure of the Russian Federation, the court
Rules
To appoint and conduct in case No. 2-3307/15 which concerns the claim of Anastasia Igoryevna Goncharova against Natalya Yuryevna Zolotova seeking to establish paternity and to declare her as heir, a forensic molecular genetic expert analysis of the biological material located at the Westminster Coroner's Court of Great Britain, located at the address: 65 Horseferry Road, London, SW1P 2ED, Great Britain, in which the following questions shall be posed:
1. Is Kakha Avtandilovich Bendukidze, dob 20 April 20 1956, native of Tbilisi, Republic of Georgia, and deceased on 13 November 13 2014, the biological father of Anastasia Igoryevna Goncharova, dob 1 November 1990, native of Moscow and born of Margarita Leonidovna Zarsepina? If so, what is the percentage of probability?
2. If the paternity of Kakha Avtandilovich Bendukidze, dob 20 April 1956, native of Tbilisi, Republic of Georgia and deceased on 13 November 2014, in respect of Anastasia Igoryevna Goncharova, dob 1 November 1990, native of Moscow is not excluded, then what is the probability that the result obtained is not the consequence of a random coincidence of individualising features of unrelated persons?
The conduct of the forensic molecular genetic examination shall be assigned to experts at the State Budget Institution of Health Care of the city of Moscow [entitled] "Forensic Medical Expert Analysis Bureau", located at the address: Moscow, Tarnyy proezd, d 3.
To instruct the experts of the State Budget Institution of Health Care of the city of Moscow [entitled] "Forensic Medical Expert Analysis Bureau", located at the address: Moscow, Tarnyy proezd, d. 3, to make a fence [sic] [NB The original Russian literally says 'to make a fence' This appears to be a misspelling; it may be understood from the context that the author intended to write "to collect"] the biological material of Kakha Avtandilovich Bendukidze, deceased on 13 November 2014 from the Westminster Coroner's Court of Great Britain located at…in order to conduct a forensic molecular genetic forensic analysis.
To order Anastasia Igoryevna Goncharova to appear for the examination and submit the biological samples of Kakha Avtandilovich Bendukidze received from the Westminster Coroner's Court of Great Britain…to the laboratory of the State Budget Institution of Health Care of the city of Moscow entitled "Forensic Medical Expert Analysis Bureau", located at the address: Moscow, Tarnyy proezd, d. 3;
To immediately notify the Gagarinsky District Court of the City of Moscow at the address… of the fact of receipt of the biological samples in respect of Kakha Avtandilovich Bendukidze;
To order Natalya Yuryevna Zolotova to submit the biological samples of Kakha Avtandilovich Bendukidze, received by her from DNA Solutions LLC to the laboratory of the State Budget Institution of Health Care of the city of Moscow entitled "Forensic Medical Expert Analysis Bureau", located at the address: Moscow, Tarnyy proezd, d. 3.
To warn the experts of their liability under Articles 307 and 308 of the Criminal Code of the Russian Federation.
All expenses, connected with the conduct of the forensic molecular genetic expert analysis shall be borne by Anastasia Igoryevna Goncharova.
To instruct the Westminster Coroner's Court of Great Britain located at …to send biological samples to the laboratory of the State Budget Institution of Health Care of the city of Moscow entitled "Forensic Medical Expert Analysis Bureau", located at the address: Moscow, Tarnyy proezd, d. 3. for the purpose of conducting a forensic molecular genetic expert analysis, and to send notice of their dispatch to the Gagarinsky District Court of the City of Moscow at the address: Moscow, ulitsa Donskaya, d.11, Str.1, room 302;
Delivery of the samples shall be implemented in compliance with the conditions of storage, including during transportation, at the account and through the efforts of Anastasia Igoryevna Goncharova, who shall bear all the necessary expenses.
The time for conducting the forensic molecular genetic expert analysis shall be set at one month after this ruling enters into legal force, ie by 16 October 16 2015.
The report on the forensic molecular genetic expert analysis shall be sent to the Gagarinsky District Court of Moscow at the address…
To explain to the parties the requirements of Article 79 of the Code of Civil Procedure of the Russian Federation, which states that if a party avoids participation in the expert analysis or fails to provide to the experts necessary materials and documents for the examination and in other cases, if the circumstances of the case and without the participation of that party it is impossible to conduct the expert analysis, then the court, depending on which party is avoiding the expert analysis and the significance of the [expert analysis] for that party, shall be entitled to declare the fact for which the expert analysis has been appointed to be proven or disproven.
The proceedings in the case shall be stayed until receipt of the results of the forensic molecular genetic expert analysis.
This ruling in the part concerning the stay of proceedings may be appealed to the Moscow City Court through the registry of the Gagarinsky District Court of Moscow within 15 days.
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Mr Justice Popplewell
On Saturday 10 October 2015 I granted an interim non-disclosure order restraining the disclosure or publication of images and information in a so called "revenge porn" case. These are my reasons, in brief.
The Claimant is a successful professional actor. JPH had been in a relationship with XYZ for a number of months, during the course of which a number of photographs and videos were taken on devices belonging to JPH which portrayed nudity and sexual activity. On the afternoon and early evening of Friday 9 October 2015, XYZ sent a series of communications to JPH threatening to post the images on social media and/or to cause them to be published in magazines. It appeared that XYZ's motive was revenge for JPH having brought the relationship to an end; and, it is to be inferred, with a possible view to persuading JPH to resume the relationship. XYZ also sent an email to a former partner of JPH in which XYZ gave graphic details of alleged sexual activity by JPH whilst in a relationship with XYZ, and later sent the former partner two explicit videos. During the communications with JPH, XYZ stated that locked files with copies of the images had been lodged with two unidentified friends who would be authorised to cause them to be published should the police become involved. This was the reason for adding Persons Unknown as Second Defendants.
On the morning of Saturday 10 October 2015, shortly before the beginning of the hearing, a small number of the still images appeared on a website in circumstances from which it is to be inferred that they had been posted by or at the instigation of XYZ. By the time of the hearing JPH had succeeded in removing them from the site.
The application was made without notice. There were compelling reasons for doing so, in accordance with s. 12(2)(b) Human Rights Act 1998, because XYZ's conduct justified the belief that if prior notice were given there was a real risk that disclosure would occur before the hearing could take place so as to defeat its purpose.
The hearing was held in public. It was possible to do so without defeating the purpose of the order because:
(1) I made orders protecting the anonymity of JPH and XYZ. I was satisfied that this was necessary because some of the images had been put on a website, and the fact of JPH's previous relationship with XYZ was in the public domain. If a person who was aware of both those matters learnt that JPH had issued these proceedings or that they had been brought against XYZ, they would be able to deduce information about the content of the material or the circumstances in which the images were created which JPH is entitled to have protected by an interim non-disclosure order. Anonymity of JPH alone would be insufficient to protect against this risk because identification of XYZ might enable identification of JPH to be made. The principles in AMM v HXW (2010) EWHC 2457 (QB) apply.
(2) The images and information of which JPH was seeking to prevent disclosure were referred to during the course of the hearing in a way which did not reveal their detailed nature or scope. I read material contained in a confidential schedule to an approved but as yet unsigned witness statement of JPH and was shown some of the images on a mobile phone upon an undertaking that they would be included in the confidential schedule when the witness statement was signed. Conducting the hearing in this way was necessary if the purpose of the order was not to be defeated.
In order to provide further protection against unwarranted further access to the material I also made orders restricting access to the material on the Court file under CPR 5.4C and an order that the confidential material on the Court file was to be kept in a sealed envelope not to be opened except by or with the permission of a High Court Judge.
There is cogent, credible and as yet uncontradicted evidence that the photographs and videos were taken in circumstances where JPH has a strong case for asserting that he had a reasonable expectation of privacy and in circumstances attracting confidentiality. This engages his rights to respect for private and family life under Article 8 of the European Convention on Human Rights.
With these have to be balanced the right to freedom of expression under Article 10 of the ECHR. I was satisfied that the balance comes down firmly in favour of protection of JPH's Article 8 rights. The images and information involve intimate, graphic and sexually explicit material of a highly sensitive and personal nature. There is cogent and credible evidence that the effect of disclosure will be highly damaging to JPH both emotionally and financially. Damages would not be an adequate remedy. There is no discernible public interest in publication of the images or information. They concern private and lawful behaviour and there is nothing to suggest that disclosure would contribute anything to a debate of general interest in a democratic society. Any argument for protection of XYZ' s rights of freedom of expression in publishing images which portray XYZ, or in disclosing images or information created in the context of the relationship with JPH, carries little weight when the threatened publication is motivated by revenge and, it is to be inferred, possibly blackmail. The limited disclosure which has apparently already been made to JPH's former partner, the two holders of the files, and briefly on one website on Saturday morning, is no reason for declining to make the order. The material is not currently in the public domain and the limited distribution has not come close to the stage where there is no longer any privacy interest left to be protected.
Accordingly I was satisfied, in accordance with s. 12(3) of the Human Rights Act, and having had regard to the matters set out in s.12(4), that on the current evidence JPH is likely to establish that disclosure and publication should not be allowed.
At this stage of proceedings an order restraining publication and disclosure is necessary in order to protect JPH's rights. The material is likely to be widely disseminated if disclosed in the way threatened by XYZ and it would be very difficult, if not impossible, to contain it or to withdraw it from the public domain thereafter. XYZ's stated expectation and intention was that it would go "viral" and numerous references by XYZ to "hashtags" are to be construed as being to this effect.
Two further aspects of my order require explanation. I ordered that XYZ should provide information to JPH's solicitors comprising details of any third party to whom the information had already been passed and any internet sites on which it had already been posted. This aspect of the order required identification of the two alleged holders of files of the material, as well as that of anyone else to whom XYZ had already passed the material. This was intended to enable JPH's solicitors to give notice of the order to anyone else to whom XYZ had passed the material, or to take such steps as were possible to remove it from any website if it had been posted prior to service of my order. I ordered XYZ to provide this information within one hour of the order coming to XYZ's attention and required the solicitors specifically to draw this aspect of the order and the short timescale to the attention of XYZ when serving the order. I was persuaded that this very short timescale was necessary in order to minimise the risk of publication by third parties and maximise the ability of JPH to contain the scope and effect of any such publication, given that the nature of the material is such that it may well be rapidly disseminated on social media once initially posted or disclosed.
I also made an order under CPR 81.8 dispensing with personal service of the order and providing that good service be effected by sending it to an email address which there was good reason to believe would bring it swiftly to XYZ's notice. I was satisfied that this was appropriate to meet the risk that if XYZ became aware of the application or the existence of an order before it was possible to effect personal service of the order, XYZ might fail to comply without being amenable to committal proceedings for contempt of court. The difficulty of containing the material if it were initially disseminated by XYZ justified this aspect of the order which is intended to ensure compliance with the order by making committal proceedings an effective sanction.
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HHJ Coe QC :
This is the Claimant's claim for damages for false imprisonment arising out of his detention by the Defendant at Dover Immigration Removal Centre ("IRC") between 27th November 2013 and 20th February 2014. The matter is listed for trial of liability only. If necessary, quantum will be dealt with at a later hearing.
The Claimant originally also pursued a claim in respect of his period of detention between 14th November 2013 and 27th November 2013, but that part of the claim has been abandoned.
Apart from the skeleton arguments prepared for each side I have a trial bundle and a bundle of authorities. The Defendant added the case of the SN v SSHD [2014] EWHC 1974 (Admin). I heard oral evidence from the Claimant and from the Defendant's witness Mr Richard Pulham. Pursuant to an application dated 22nd September 2015 to which there was no objection I granted permission to the Defendant for Mr Pulham to give evidence adopting the witness statement in the trial bundle of Miss Janelle Roberts as his own, due to the unavailability of Miss Roberts who is on maternity leave.
The Claimant, Mr Khaleseh, is an Iranian national born 4th January 1984 and who is therefore now 31 years old. He arrived in the United Kingdom on 12th November 2013 concealed in the rear of a lorry amongst a load of car parts. He was discovered at 10.05 by border force officers. Thus he arrived clandestinely. A EURODAC search revealed that the Claimant had been fingerprinted in Italy where he had entered illegally on 22nd October 2013. A screening interview was carried out on 12th November 2013 between 14:40 and 15:00 hours. An interpreter was present. The Claimant speaks Farsi. The Farsi-speaking interpreter was from Afghanistan. It was identified that the Claimant was claiming asylum. He was transferred to the Dover IRC arriving in the early hours of 13th November 2013.
Meanwhile Italy was asked to take charge of the Claimant's asylum claim. Italy ultimately by default accepted responsibility for the transfer of the Claimant pursuant to the Dublin II Regulation on 13th December 2013. By decision letter dated 17th December 2013 the Defendant notified the Claimant that his asylum application would not be considered substantively because he would be removed to Italy. In response to that solicitors, Duncan Lewis, wrote a pre-action protocol letter dated 7th January 2014 which is at p.398. The Defendant's response to that letter is at p.436. The letter from Duncan Lewis made no reference to the current false imprisonment claim.
Solicitors for the Claimant, Leigh Day, who act in these proceedings, wrote a letter to the Defendant which is at p. 443 in the bundle. That is also a pre-action protocol letter seeking the Claimant's release and damages for false imprisonment based on the Defendant's breaches of Rules 34 and 35 of the Detention Centre Rules (SI 2001/238) and the Defendant's published policy. There is no response to that letter. It seems that the Defendant wrongly concluded (p.553) that the letters covered the same ground and that no response was required to the letter from Leigh Day. Thereafter a Claim Form was issued in the Upper Tribunal challenging the Defendant's decision to issue removal directions and those removal directions were suspended. On 17th February 2014 a claim for judicial review was issued challenging the Defendant's refusal to release the Claimant from immigration detention. On 20th February 2014 the Claimant was granted temporary admission and released from detention. Pursuant to a Consent Order in the "challenge to the refusal to release" proceedings, the claim (this claim) was transferred to the Queen's Bench Division.
For the sake of completeness, I should add that from March 2015 the Claimant was re-detained and was in detention for a further period of time in respect of which further proceedings were issued (and I think transferred to the Queen's Bench Division). However those proceedings are stayed pending the outcome in this case. There has not yet been a decision in respect of the "third country" appeal.
The notes of the screening interview on 12th November 2013 are at pp. 264- 282 in the bundle. The Claimant indicated that he was fit and well and that he understood the interpreter. He understood that he had entered illegally. He said that he had left Iran 12 or 13 days previously and could not remember which countries he may have travelled through. He said that he had come to the UK to claim asylum. He said that he was a follower of the Ahl-e Haqq religion which is illegal in Iran. He was distributing leaflets and he was found out and had to leave. He said that he had no criminal convictions. As is apparent from the form at p.267 the Claimant was told that the questions that he was about to be asked related to his identity, background and travel course to the United Kingdom and that the information would be used mainly for administrative purposes. He was told that he would not be asked at that stage to go into detail about the substantive details of his asylum claim, but that that would be done at a later interview. Of course, the decision having been taken to remove the Claimant to Italy for his asylum claim to be determined, there was no substantive asylum claim interview ever carried out.
The Claimant told the officer in the screening interview that he had suffered from a form of leukaemia, but had been treated and was healthy at that time. He identified that he belonged to a minority religion. He said that his friend had been arrested and that he was forced to leave Iran. He said that his father had been summoned to court some years previously to speak about his religion and was interrogated and died. He denied that he had ever been arrested and charged with or convicted of an offence in any country, but said that he was "wanted" because of his religion and because he had been preaching.
At p.225 in the bundle is a Patient Record from Dover IRC showing that at 10.14am on 13th November 2013 at the health centre the Claimant was seen by a nurse. He was asked a series of questions and in response to a question as to whether or not he had been the victim of torture, it is recorded that he answered "yes" because a "new episode" is referred to. There is a record at 10.30 with the same nurse which reads that the Claimant "claims he has been tortured – for MO". In other words he was going to be referred to the doctor.
He was seen by Dr Naveed Tippu at 9.44am on 14th November where he was examined and where he supplied information about his non-Hodgkin's lymphoma and its treatment. There is no mention of torture in the record. No Rule 35 report was prepared at that time. It was this failure by the doctor that formed the basis of the claim in respect of the period of detention prior to 27th November which has now been abandoned.
However, at p.121 in the bundle is a Rule 35 report from Dr Tippu on the Claimant. It is dated 23rd November 2013. Dr Tippu has ticked the box which reads "I have concerns that this detainee may have been the victim of torture". It sets out: - "Alleges that he was arrested on a number of occasions last year and was detained for a total of 2 months. He was beaten with a cable. He belongs to the Al-Haq division of Islam which is not recognised in Iran. His father was killed for his belief. Says he will be killed if he returns to Iran. He has a number of scars which are recorded on the body map. Impression: this is an account given by Mr Khaleseh. Injuries might be consistent with scars from a beating with cables". The body map shows approximately 11 scars identified as those which might be consistent with scars from beating with cables. It is apparent from the record on p.229 that the Rule 35 form was completed and copies were given to the Claimant, the Centre manager and "immigration".
The Defendant through their caseworker Tracy Nicholls responded to this report by letter dated 27th November 2013. The document is at pp. 126 - 127 in the bundle. It sets out that it is in response to the Rule 35 report and sets out the Claimant's account of events as given to Dr Tippu, including that "The Doctor has stated that this is an account given by you and your injuries might be consistent with scars from a beating with cables". It then goes on to summarize the information obtained from the Claimant on 12th November at the screening interview. That paragraph concludes "It is not considered unreasonable to have expected you to mention such a significant life event; such as being tortured, when asked the above questions".
Miss Nicholls correctly quotes the relevant definition of torture taken from the case of R (EO and Others) v SSHD [2013] EWHC 1236 (Admin) ("EO") which refers to the use of intentional infliction of physical or mental pain or suffering "for any such purpose as…punishing him for an act". The last sentence of that paragraph reads "you have not stated what information was demanded of you and/or what … you were expected to confess".
The conclusion is that the information contained within the report submitted by the IRC staff has been considered and reviewed and having taken into account "that you have not provided any independent evidence or verifiable details of the alleged torture, it has been decided that your detention will be maintained. The detention is to be maintained for the following reasons: to effect your removal from the UK; to prevent absconding. You have knowingly entered the UK illegally without entry clearance or any valid travel document which clearly shows a complete disregard for the UK immigration law, therefore your detention remains appropriate and lawful".
In the course of the hearing evidence was given to the effect that this decision would be and was subject to quality control by a senior case officer, in this case, Miss Roberts. She agreed with the decision concluding that the report (the Rule 35 report) did not constitute independent evidence of torture. It was noted that the Claimant had failed to mention the allegation of torture during his screening interview. Furthermore it was not considered that the claim fell under the definition of torture since there was no confirmation from the Claimant that he was being beaten in order for information or a confession to be obtained. His continued detention was authorised to prevent him from absconding where he had no ties in the UK and was considered therefore unlikely to have an incentive to remain in one place and because removal was a realistic prospect in the near future.
In his witness statement which begins at p.93 in the bundle, the Claimant sets out much more significant detail of the way in which he alleges he was ill-treated in Iran and the injuries he sustained.
I also note that there is a document exhibited to the Claimant's statement which is described as a booking-in sheet. It is not dated and it does not indicate by whom or where it was completed. However in response to a question in that document about distinguishing/visible marks, for example tattoos and scars it is recorded that the Claimant indicated that he had a scar on his chest and on his right thigh and that he had the name of his brother tattooed on the top of his arm.
Against this background the parties' cases can be put very shortly. It is the Claimant's case that the Rule 35 report of Dr. Tippu is independent evidence of torture and that the Defendant's response in the letter at p.126 is flawed because issues of credibility do not undermine the fact of there being independent evidence of torture (although clearly it may undermine the proof thereof) and because the definition of torture does not require that there be an aim of extracting information or a confession. Thus the Claimant claims that the Defendant acted in breach of her policy when on 27th November 2013 she decided to maintain the detention of the Claimant.
The Defendant's case is that these decisions are fact-sensitive and that each decision will be case-specific. The Defendant says that the decision-maker here reached a reasonable decision and formed a view which was reasonable bearing in mind all the circumstances. The decision-maker acted within the limits of her discretion when applying the policy to the facts of the case known to the Defendant and it was properly open to her to reach the conclusion, on those facts, that the torture claim was incredible or very unlikely to be true. The words "might be consistent with" entitled the Defendant to give much less weight to the report than if it had said, for example, "highly consistent with".
The Claimant goes on to argue that if I am satisfied that there was independent evidence of torture, I should go on to find that there were no very exceptional circumstances which would have justified the Claimant's continued detention. In fact the Defendant concedes that there were no such very exceptional circumstances. The point is significant, of course, since the Claimant's entitlement to substantive rather than nominal damages depends on a finding that he should have been released from detention in light of the Rule 35 report.
The legal framework here can be set out relatively shortly in circumstances where in the event there was not a great deal of dispute between the parties as to the framework or the proper interpretation and application of the relevant criteria and tests. Mr Buttler on behalf of the Claimant took me through the relevant provisions and authorities in opening the case. They are referred to in both parties' skeletons. As I say there is no real dispute as to their effect.
The Defendant's Enforcement Instructions and Guidance Chapter 55 – Detention and Temporary Release ("EIG") set out that there is a presumption in favour of temporary admission or release and wherever possible alternatives to detention are used, but that it is most usually appropriate to detain someone to effect their removal, to establish their identity or basis of claim or where there is reason to believe they will fail to comply with any conditions attached to the grant of temporary admission or release. Against that background 55.10 sets out that certain persons are normally considered suitable for detention in only very exceptional circumstances. The list of such people includes "those where there is independent evidence that they have been tortured". The Guidance provides that if a decision is made to detain a person in such a category the case worker must set out the very exceptional circumstances for doing so on the file.
The Detention Centre Rules 2001 provide (Rule 34) that a detained person shall be given a physical and mental examination by the detention centre's medical practitioner within 24 hours of his admission to the detention centre. The medical practitioner shall report to the manager on the case of any detained person who he is concerned may have been the victim of torture. The manager shall send any such report to the Secretary of State without delay.
The Detention Rule 35 Process ("the Process") which is at Tab 3 in the authorities bundle identifies that the purpose of Rule 35 is to ensure that particularly vulnerable detainees are brought to the attention of those with direct responsibility for authorising, maintaining and reviewing detention and emphasises that the information contained in the report needs to be considered in deciding whether continued detention is appropriate in each case. The Process specifically refers to the case of EO. That decision follows on from others but is a particularly helpful review and distillation of the principles in these cases. The Process provides that "at the present time and until further notice torture in the context of Rule 35 and the application of detention policy must be regarded as that defined by Burnett J in EO and torture is thus defined as "any act by which severe pain or suffering, whether physical or mental is intentionally inflicted on a person for such purposes as obtaining from him or a third person information or a confession, punishing him for an act he or a third person has committed, or intimidating or coercing him or a third person, or for any reason based upon discrimination of any kind".
Caseworkers are reminded that Rule 35 reports are not medico-legal reports and should not be considered defective for not containing the detail of such reports or not being written according to the Istanbul protocol or other standards. Such reports require careful handling particularly because they are generally not written by medical practitioners with expertise in assessing whether an individual has been tortured. Specific provision is made for a situation where greater clarity from a report is necessary to allow a substantive response to be given. In those cases the relevant IRC should be contacted without delay and a request should be made for the further information. It is specifically to be used where there is inadequate information and is "not a means by which the concerns of the doctor should be questioned in the case of disagreement".
The Process provides some examples. Example no.4 hypothesises a report from a doctor giving an opinion that a detainee's injuries "might be attributable to the torture" he claimed to have experienced and in that example the appropriate response suggested to the Defendant's case workers is that this would constitute independent evidence of torture.
Against this background, following the cases of (Lumba) v SSHD [2011] UKSC 12 and Kambadzi (R (SK Zimbabwe) v SSHD [2009] 2 All ER 365, Burnett J in EO cited (paragraph 21) the two propositions which are material here: "(1) a breach of public law duties when exercising a discretionary power to detain renders the subsequent detention unlawful ... i.e. amounts to the tort of false imprisonment) if the breach bears on and is relevant to the decision to detain; (2) whilst it is no defence to a claim for false imprisonment to show that the Claimant could and would have been detained lawfully, if such were established the Claimant would be entitled to nominal damages only".
The Claimant's case here is specifically stated to be a public law error and the Claimant alleges that that public law error is a breach of policy and nothing else.
Both Counsel agreed that the Court needs to consider the Defendant's decision in light only of the information that was available to the Defendant at the time. Whatever evidence there may have been later is not admissible in the consideration. This cuts both ways: the Defendant may not make submissions in relation to any later arising inconsistencies in the Claimant's evidence; similarly the Claimant may not rely on a subsequent medico-legal report (as has been obtained here). This is the case even though my decision is made ex post facto.
In Lumba it was held that a failure by the Secretary of State to have regard to a material policy concerning detention would render the detention unlawful and result in false imprisonment even where it is certain or inevitable that the person detained could and would have been detained had the power been exercised lawfully. If detention was certain or inevitable although the tort of false imprisonment will have been committed by the Defendant, the person detained would only be entitled to nominal damages.
The Defendant's published policy is as identified by the Claimant and it is acknowledged by the Defendant that a failure to comply with that policy may render detention unlawful where it is material to the decision to detain. Again, by reference to Burnett J in EO at paragraph 52 it is established that causation is relevant to the question whether a Claimant should be entitled to compensatory damages. It is not relevant to the question of whether the detention was lawful. As is set out in paragraph 59 there is no doubt that the underlying rationale of the policy is that those who have suffered torture in the past are disproportionally adversely affected by detention. Hence they will normally only be detained in very exceptional circumstances.
At paragraph 69 of the decision in EO the learned Judge set out that the credibility of a detainee may be a factor which informs the question of whether there are very exceptional circumstances for maintaining detention. Doubts about the credibility of a detainee are not sufficient because they are commonplace and acting on those doubts would be tantamount to requiring a detainee to prove that the allegations of torture were true. The Judge said "However there may be cases in which the information available to the decision-maker leads him to the firm conclusion that the torture claim is untrue, that is to say incredible or very unlikely to be true". As set out at paragraph 99 the learned Judge concluded that issues of credibility of the detainee do not inform the question whether a medical report amounts to independent evidence of torture.
As set out in EO it is established that there is a clear difference between something that amounts to independent evidence of a fact and proof of that fact.
Various other authorities are cited in the skeleton arguments. The Claimant invited me to follow the decision of HHJ McKenna sitting as a Judge of the High Court in the case of R (BA) v SSHD [2014] EWHC 4223 (Admin). The facts in that case are indeed similar to the facts here. The Judge (at paragraph 22) stated that although the doctor preparing the Rule 35 report had not specifically said that he believed the Claimant's account he had ticked the box to show he had concerns that the Claimant may have been the victim of torture. Moreover the doctor had not indicated that he doubted the Claimant's account. This was the doctor's own view and therefore gave some credence to the Claimant's case. Thus whilst not every Rule 35 report will amount to independent evidence of torture, the judge was satisfied that it did in that case.
As indicated above, the Defendant handed in the case of SN where Carr J found (paragraph 89) that the Rule 35 report did no more than recount the Claimant's assertions and record the presence of scars. It did not amount to independent evidence of torture. The doctor did not express concern about torture nor did he say that the scars might be attributable to the torture asserted. The Claimant had been specifically asked and had denied that he had been tortured. He had been found not to be credible by a Tribunal and he had absconded. There are other distinctions to be made between that case and the present one.
I do not intend to refer to the other cases cited. These decisions are fact-specific. For what it is worth, however I consider that the present case is far closer to the circumstances in BA than those in SN. There was a wealth of information to be considered in SN. There is less information here than there was even in BA. It seems to me that where the evidence is essentially limited to the Rule 35 report and the doctor has said that there are medical findings which are or might be consistent with the Claimant's account; and has ticked the "concerns" box; it will be difficult to argue that that does not amount to independent evidence of torture.
It was submitted on behalf of the Claimant that I could reach my decision on the basis of the evidence contained in two documents: the Rule 35 report; and the Defendant's letter in response. At the end of the day I think that that submission is probably correct. I did hear from the Claimant and from Mr Pulham. I should say that I found the evidence of both witnesses to have been for the most part reliable. Mr Pulham was a patently honest witness albeit he had had no involvement in this case and was in the position of adopting someone else's evidence. The Claimant gave his evidence via an interpreter. He was obviously mistrustful of the questions he was being asked and in consequence gave the impression of being evasive. His answers were perfunctory. I did not consider that he was untruthful, however in respect of the answers he did give.
Mr Khaleseh has unfortunately been told recently that he is suffering a recurrence of his non-Hodgkin's lymphoma. He is still taking between 12 and 14 tablets a day for his various medical conditions. He told me that he had not taken any since the day before he gave his evidence in order to enable him better to answer questions.
He described how he had been taken to hospital from the detention centre in Dover on two occasions. The first time was an emergency. He told me that he was handcuffed to his right hand and right leg. On the second occasion when he went for a bladder test he had both hands handcuffed and despite a request from a nurse they were not removed. Following the test when he needed to use the lavatory, his handcuffs were extended by a longer chain and an officer went to the toilet with him. There were other people around at the time.
He confirmed that he was greatly affected by what had happened to him in Iran. He said that the screening interview was difficult because he was feeling unwell at the time in particular because of the circumstances of his arrival. Moreover the Afghan interpreter, although he spoke Farsi spoke it in a different dialect to that spoken in Iran and so there were difficulties with translation. It is right to say that he wrote and complained about the use of the Afghan interpreter from the detention centre. He said repeatedly when he was cross-examined that he considered that he had answered all the questions that he was asked during the screening process. He described how during the interview he was in shock and unwell. He was inside a closed room. He had some pain. He wanted to smoke, but was not permitted to. He agreed that he had shown an officer some scars, but considered that it was a matter for the officer to decide what to record from what he saw. He confirmed as is apparent from the records (page 226) that he told the nurse that he had been tortured when he was asked and that this was on 13 November 2013, the day after his arrival at the detention centre.
Mr Pulham began by saying that he considered that the Rule 35 response letter to be sound and he saw no error in it. He agreed that the Claimant underwent a screening interview and not a full asylum interview. There was no asylum interview and no decision made because of the third country policy whereby the Claimant was to be removed to Italy. Mr Pulham accepted what the Claimant says about the different Farsi spoken in Afghanistan and Iran. He agreed that during the screening interview there is nothing in the notes that would suggest that the Claimant was actually asked if he had been the victim of torture and Mr Pulham did not know when he was first asked that.
He agreed that the failure to answer the pre-action protocol letter from Leigh Day on the grounds that it was the same basis of claim as the challenge being made by Duncan Lewis was wrong and that the Defendant therefore had not dealt with Leigh Day's letter.
He told me that he was familiar with the EIG and Rule 35 guidance. He had seen the Detention Services Order albeit some time ago. He was not familiar with the guidance from the case law and was not familiar with the authority of EO. He felt that he had last had some training on these issues about three years ago. Having been taken through some of the documents Mr Pulham expressed the view that if somebody had entered the country clandestinely and was subject to an adverse decision by the Defendant that would be a strong ground for maintaining detention, if there was a realistic likelihood that the detainee would be removed in a reasonably short period of time. He acknowledged that that view was informed by some guidance which he had been given, but which was unpublished. He felt that that was the case here where Italy had accepted responsibility albeit by default. Of course, as he said it is easier from an administrative point of view to remove someone if they are in detention. He seemed to agree with the proposition that if there was a realistic likelihood that somebody would be removed in reasonably short period of time (having entered clandestinely and being subject to an adverse decision) in those circumstances the presumption of temporary admission would be displaced by that unpublished guidance.
He accepted and agreed with the guidance points that he was taken to. Having considered that, he concluded that if the objective findings of a doctor caused the doctor to say that those findings were consistent with an account of the individual concerned, then it would provide some independent evidence of torture. He felt it needed to be taken in the context of the case, but that a finding of scarring consistent with an allegation of torture would be independent evidence of torture albeit not proof of the same. At that point in his evidence he said that he disagreed with Miss Roberts on that issue.
Nonetheless he considered that the decision was a reasonable one and that it would be reasonable to expect that someone who had had the Claimant's experiences would have said something. He thought that this point went to credibility and expressed the opinion that issues of credibility would be relevant to whether or not the report amounted to independent evidence of torture. Again when he was asked to consider this more carefully he acknowledged that he could see that credibility would be irrelevant to the issue as to whether or not the report amounted to independent evidence of torture. Thus he accepted that Dr Tippu's report was independent evidence of torture.
All he could say really in respect of Miss Nicholls' decision was that it seemed to him that she did not agree that Dr Tippu's evidence was independent evidence of torture. It was his view that there were no very exceptional circumstances in the case. He could not identify Miss Nicholls' reasons for saying that Dr Tippu's evidence did not amount to independent evidence of torture. He felt that perhaps, when she was referring to the lack of detail about information or confession being sought from Claimant, Miss Nicholls might have been saying that the Claimant had not given an account of why he had been tortured. At this point in his evidence he felt compelled to agree that Miss Nicholls had made the wrong decision. He agreed that the quality control process carried out by Miss Roberts essentially repeated the details relied on and reasons given by Miss Nicholls.
In re-examination Mr Pulham confirmed his understanding of the "unpublished guidance" to be that if removal was planned imminently then it would be reasonable to continue to detain a person. He felt that the grounds for the decision to maintain detention made by Miss Nicholls were that Miss Nicholls did not accept that there was independent evidence of torture and she had taken into account the fact that the Claimant did not mention anything about being tortured when he might have done when being interviewed. Mr Pulham told me that it would be possible in his view to read into the word "might" an implication of some other cause for the scarring.
The findings I need to make in regard to this evidence are limited. As I have said I accept that the witnesses were doing the best they could. I accept that the interpreter from Afghanistan did not speak the same dialect of Farsi as Mr Khaleseh and that this caused some difficulties at the screening interview. I find that Mr Khaleseh was not asked during that interview if he had been tortured. I find that the first time that he was asked about that was by the nurse on 13th November and his response to that was "yes". I find that he did identify some scars to the interviewing officer on 12th November, but he did not identify all the scars on his body and the officer neither looked for nor asked about any more.
I find that, as described by him, Mr Khaleseh: was restrained on the two occasions he went to hospital; was restrained in the presence of others; the restraint was continued despite the request of a nurse for handcuffs to be removed; and he was required to use the toilet while still chained to an officer.
In respect of Mr Pulham's evidence, the weight to be attached to it is limited given his total lack of involvement in this case. It seems to me that he considered that Miss Nicholls might have reached her decision because she had concerns about the Claimant's credibility arising out of his failure to disclose that he had been detained and tortured immediately and because he had not explained why he had been tortured. I consider that Mr Pulham felt that maintaining detention might be appropriate in circumstances where there was a realistic possibility that the detainee would be removed in the near future.
It seems to me to be more likely than not that Mr Pulham himself (and I cannot make any finding in relation to any other employee of the Defendant) had at some point been given some training or guidance which is not in any of the published documents to the effect that the imminence of removal might justify maintaining detention in a case such as this even where the decision would otherwise be for temporary admission or release. This is not a claim in the Administrative Court any longer. It is not appropriate therefore in my view for me to go beyond reaching that conclusion. I do not need to go beyond it to reach my decision in this case.
In reaching my conclusions, first of all I remind myself (and it is not in dispute) that the Defendant, the detaining authority, bears the burden of showing that the Claimant's detention was lawful. That proposition is clear from authority and in particular I refer to paragraph 44 of the decision in Lumba. Further the Defendant additionally has an evidential burden as referred to at paragraph 80 of R (Das) v SSHD [2014] 1 WLR 3538. The Defendant has put herself significantly at risk of an adverse finding in this case where there was no evidence from the actual decision-maker, Miss Nicholls, before the Court. I have dealt with the rather limited weight to be given to the evidence of Mr Pulham. He could only express a view as to what Miss Nicholls' decision-making process might have been, but I did not hear from Miss Nicholls herself. It is apparent that Miss Roberts' review did not consider or explore any matters beyond those set out in the letter of Miss Nicholls and that does not take the issue any further either.
As set out at paragraph 68 of the decision in EO the question is whether or not something amounts to independent evidence of torture. That evidence must necessarily be something beyond the say so of the person concerned. It will not necessarily depend on their credibility.
Considering the authorities generally and analysing the matters set out above I have reached the clear conclusion that the Rule 35 report from Dr Tippu amounts to independent evidence of torture. Of course a significant part of the document is a recital of the Claimant's account. That is not independent evidence. However, Dr Tippu has ticked the box to say that he has concerns that the Claimant may have been the victim of torture. He has expressed a view. That view is that "the injuries might be consistent with scars from a beating with cables". As I find, that is independent evidence of the Claimant's account. Dr Tippu was under no obligation to submit the report. He was under no obligation to tick the box raising concerns. He has done so and the only conclusion can be that as a medical practitioner he formed the view that on the basis of objective evidence in the form of scarring Mr Khaleseh might have been the victim of torture. That independent evidence according to Dr Tippu might in his view be consistent with the account given namely of being beaten with a cable. Dr Tippu does not say it is not consistent. He does not say that there could be other causes for the scarring identified on the body map. He does not raise any specific doubts about the findings or the Claimant's account. He clearly felt it was necessary to comply with the Rule 35 procedure in this case and inform the detention centre manager and the Defendant.
As I have found, the Claimant did not mention at the screening interview that he had been arrested, detained and tortured in Iran. He was not asked. He was asked the following day and mentioned it. It seems that the information upon which the decision was made by the Defendant as set out in the response letter was limited to the information from Dr Tippu and from the screening interview. The screening interview is not a full asylum claim interview. It may be that there are issues raised with regard to the Claimant's credibility because he did not give the account of his detention and torture in Iran that he gives now when he was first interviewed. As set out above that potential issue of credibility does not and in this case cannot undermine the opinion and findings of Dr Tippu. The decision-maker is not looking for proof of torture but for independent evidence of torture.
On analysis there are two bases in the letter of 27th November upon which the conclusion that the Claimant had not provided any independent evidence or verifiable details of the alleged torture seems to have been reached. Firstly, that the Defendant did not consider it unreasonable to expect the Claimant to mention torture when asked if he had any medical conditions, when asked for his reason for coming to the United Kingdom and when asked why he could not return to his home country. This purported reason goes to issues of credibility only. It does not address Dr Tippu's independent evidence. In this respect the decision maker has fallen into error. She has not followed the appropriate guidance. She has not considered the nature of the evidence properly.
The second apparent reason is that the Claimant did not state what information was demanded of him or what confession was expected of him which gave rise to the torture. On the definition of torture in EO which is specifically set out in the Defendant's own guidance that is simply not a requirement. A detainee may have been punished by being tortured or it may have been as a result of some discrimination, for example. In so far as it is an attempt by Miss Nicholls to say that the Claimant has not explained why he was being tortured, then again, that does not address the issue as to whether or not Dr Tippu's report amounts to independent evidence of torture.
On these bases I conclude that the Claimant's case succeeds. I find that the decision was reached in breach of the Defendant's own policy. This amounts to a public law error. The Claimant's detention was unlawful. It was unlawful from the date on which the decision was made, namely, 27th November 2013. The decision-maker should have concluded that there was independent evidence of torture. She should then have gone on to consider in light of the guidance whether there were very exceptional circumstances in the Claimant's case such as would override the presumption that a victim of torture should not be detained. The Defendant concedes that there are no such very exceptional circumstances. Miss Nicholls did not identify any. Mr Pulham was unable to identify any. These two points are at the heart of the case and I find them in the Claimant's favour.
Although I was urged on behalf of the Defendant to find that the decision was a reasonable one I can see no basis for doing so.
Although Miss Nicholls refers to the fact that the Claimant is to be removed to Italy there is no suggestion in the letter that she was acting on the "unpublished guidance" identified by Mr Pulham. It does not seem to me that as far as the Claimant is concerned that issue forms any part of my decision.
At paragraph 35 of the Defendant's skeleton argument Dr Tippu's use of the words "might be consistent with" is referred to and an argument raised that the use of those words are important because they denote nothing more than that the scars might have been caused by the trauma described, but it is non-specific and there are many other possible causes. Dr Tippu does not say that there are many other possible causes. The Defendant's own example (no. 4) in the process document referred to above is almost on all fours with this wording and the guidance there suggests that this would amount to independent evidence of torture. In any event it does not seem to form any part of Miss Nicholls' decision and therefore is not a matter which falls to be considered at all as I find.
Had Miss Nicholls felt that the information in the Rule 35 report was insufficient she could have requested more information. She did not do so and she does not say that she felt that she needed to. It does not seem to me that this point arises. As referred to in the case of EO the question as to whether or not there is independent evidence of torture "is in reality fairly hard-edged". In my view this report not only does amount to independent evidence of torture, but clearly does so and with sufficient information.
It is clear that the public law errors I have referred to were directly relevant to the decision to detain. The decision to detain was made on the basis of the matters set out in Miss Nicholls' letter.
In the circumstances there will be judgment for the Claimant on the issue of liability in this case.
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Mrs Justice Whipple : INTRODUCTION
This is an appeal brought by Michael Wilson Partners (here, MWP) against the decision of Master Yoxall dated 9th June 2015. By that order, Master Yoxall granted the application of Thomas Ian Sinclair (here "TIS") and ordered "that there be a stay of execution of the Registration Order".
The Registration Order is the order of Master Eyre dated 19 October 2014. By that Order, Master Eyre registered various judgments as judgments and orders of the Queen's Bench Division, pursuant to the Administration of Justice Act 1920, Part 74 of the CPR, and the Reciprocal Enforcement of Judgments Order 1984.
The 7 judgments which are the subject of the Registration Order are costs orders made against TIS in favour of MWP, by the courts of the Bahamas, where TIS initiated proceedings against MWP which were in the end unsuccessful, thus generating the adverse costs orders. One of those judgments is a certificate of taxation, for costs in the assessed amount of US$250,000. The others are orders for costs which have yet to be taxed. The total likely value of the various "Bahamian orders" is disputed by the parties, but that dispute does not matter for the purposes of this appeal.
The present appeal (and indeed the existence of the Bahamian orders) arises in the context of long-running litigation. The following is intended as a summary only for present purposes. I do not detail every twist and turn in the litigation which has now been ongoing for almost a decade:
a) In June 2006, a Mr John Emmott (not a party to this appeal, but an individual who features in the underlying events) terminated his relationship with MWP, a law firm which operates in Almaty, Kazakhstan.
b) In August 2006, MWP initiated an arbitration in London against Mr Emmott, claiming that Mr Emmott had made a secret profit in relation to certain shares in a company called Max Petroleum Plc (the "Max shares"), which MWP contended belonged to it. A freezing order was obtained by MWP over Mr Emmott's assets, including the Max shares. MWP gave an undertaking in damages as a condition of the freezing order.
c) Although the freezing order related to Mr Emmott's assets, and Mr Emmott was the registered holder of the Max shares, it was TIS' contention that he, TIS, was the beneficial owner of the Max Shares (a contention which I understand was accepted in the arbitration, by means of the Second Interim Award released in February 2010). Therefore, the freezing order impacted significantly on TIS who was unable to dispose of or otherwise deal with the Max shares while they were the subject of it. For that reason, I am told, TIS funded Mr Emmott's legal costs in the arbitration (although he was not a named party to the arbitration), and involved himself in other aspects of the broader litigation against MWP.
d) In October 2006, TIS commenced proceedings in the Bahamas to confirm his ownership of the Max shares. MWP challenged the jurisdiction of that action, suggesting that the appropriate jurisdiction was England, where the arbitration was underway. In the end, TIS failed to establish jurisdiction in the Bahamas and the Bahamian action was struck out. The Bahamian costs orders which are the subject of the Registration Order relate to this piece of litigation.
e) Meanwhile, the arbitration progressed in London. The panel consisted of Lord Millett, Christopher Barry and Valerie Davies. MWP was unsuccessful in the arbitration. In September 2014, the panel determined quantum in favour of Mr Emmott, awarding him a substantial amount of damages, together with his costs of the arbitration (I am told that his costs had in fact been funded by TIS). The costs have yet to be quantified. Nothing has been paid.
f) In October 2010, MWP commenced a separate action in the High Court, seeking a declaration that the Max shares were owned beneficially by MWP and not TIS (the "Max action"). The Max action was struck out with costs, as an abuse of process given that the arbitration had already determined the issues now raised by MWP in the Max action. Costs orders in TIS' favour were made. Those costs have yet to be quantified on detailed assessment. An appeal against strike out is currently pending before the Court of Appeal, due to be heard in November 2016. The costs of the Max action are therefore at large, at least until that appeal is determined.
g) Meanwhile, on 17 October 2010, the freezing order in MWP's favour was discharged.
h) TIS seeks to enforce the undertaking in damages given by MWP. He has permission from the Commercial Court to proceed with any enquiry. TIS will contend in that enquiry that he has sustained loss and damage consequent on the freezing order, including (i) the loss of value of the Max shares which are now worth substantially less than they were at the time of the freezing order in 2006; and (ii) the costs associated with the Bahamian proceedings which were initiated by TIS to establish TIS' ownership of the Max shares. (Permission was originally granted on condition that TIS abandoned his counter claim in the Max action. I am told that TIS has now done that.)
Against that background, we come to the present appeal. On 3 June 2015, TIS applied to the Master for a "stay of execution in respect of the Enforcement Order" pending determination of the enquiry as to damages relating to the MWP's damages undertaking. The reference to the Enforcement Order was a reference to Master Eyre's order of 19 October 2014, which I have referred to in this Judgment as the "Registration Order".
Master Yoxall granted that application. There is no formal transcript of the Master's judgment, but I have two good notes of his judgment (one by Counsel for MWP, Charles Samek QC, and the other by a trainee with the solicitors formerly acting for TIS). Master Yoxall's decision, and the reasons for it, seem clear. Neither Counsel suggested that reliance could not be placed on these notes and I was content to do so.
MASTER YOXALL'S JUDGMENT
Master Yoxall set out the background to the application. He held that he had jurisdiction to stay the execution of the Registration Order, and indeed a discretion to do so. He preferred TIS' submissions, and ordered a stay. He considered it relevant that the Bahamian costs orders were not freestanding, as could be seen from the history of the litigation which had at its core MWP's asserted proprietary right to the Max shares which had been asserted from the outset in 2006, which had now been proved wrong. Further, TIS had an arguable claim in damages which could be a substantial claim, and had costs orders in his favour from the arbitration and other proceedings. There was a fear that if the Bahamian orders were met by TIS the money would be dissipated and not be available to meet orders for costs and damages going the other way.
MWP now appeals that order.
GROUNDS OF APPEAL
MWP advances two grounds of appeal:
a) That the Master had no discretion to order a stay of execution of the Registration Order;
b) Alternatively, if he had a discretion, then the Master was wrong in exercising his discretion in the way that he did.
The first ground of appeal was introduced by way of amendment, under cover of an application dated 25 June 2015. Knowles J granted permission to amend by order dated 29 June 2015.
FIRST GROUND: NO DISCRETION
The Administration of Justice Act 1920 provides for enforcement in the United Kingdom of judgments obtained in superior courts in other British dominions. Section 9(3) provides that:
"Where a judgment is registered under this section –
a) the judgment shall, as from the date of registration, be of the same force and effect, and proceedings may be taken thereon, as if it had been a judgment originally obtained or entered up on the date of registration in the registering court;
b) the registering court shall have the same control and jurisdiction over the judgment as it has over similar judgments given by itself, but in so far only as relates to execution under this section;
…"
Mr Samek QC, who appeared for MWP, argued that the domestic court lacked any discretion to stay the execution of the Registration Order, as Master Yoxall had done. He accepted that the position was different for the underlying Bahamian orders, which were amenable to a stay of execution, once registered under the provisions of the 1920 Act. His argument proceeded thus: TIS had a period of 31 days to challenge the Registration Order, during which time execution was stayed (reflecting paragraph 4 of the Registration Order, which itself complied with CPR 74.6); TIS made no such application; it follows that the Registration Order has become final; there is no power in the Court to stay the execution of the Registration Order in such circumstances. He further argued that if TIS wanted to stay the execution of the Bahamian orders, TIS should have applied to the Bahamian courts where the orders were made, and not to the English courts where the Bahamian orders were registered. He further accepted that his point would have no force if the terms of Master Yoxall's Order (and indeed TIS's application for that Order) had referred to a "stay of execution in respect of the Bahamian orders which are the subject of the [Registration] Order" (added words emphasised) but the problem was the suggestion that the Registration Order itself should be stayed.
I do not accept Mr Samek's arguments under this ground of appeal. It is quite clear that TIS' application to Master Yoxall, and Master Yoxall's Order, related to the various Bahamian costs orders which had become the subject of the Registration Order, and in consequence of the Registration Order were now liable to be enforced against TIS within this jurisdiction. The point taken by Mr Samek is a semantic one, which was not raised before Master Yoxall. But it is clear that everyone at that hearing was proceeding on the basis that TIS was seeking to stay enforcement of the various Bahamian costs orders which were now the subject of the Registration Order.
In any event, I am not persuaded that the language used by TIS in its application, or by Master Yoxall in his Order, was inapt. By means of the Registration Order, the Bahamian costs orders became subject to the jurisdiction of the English Courts. It was acceptable to seek a stay of the "Registration Order" itself, rather than the various underlying judgments which have been registered by means of that Order: within this jurisdiction at least, and in the context of enforcement, they are in effect one and the same thing.
SECOND GROUND: INCORRECT EXERCISE OF DISCRETION
By his second ground, an alternative to the first ground, Mr Samek argues that the Master erred in the exercise of his discretion by failing to have regard to various matters.
MWP's arguments
Mr Samek argues that the Master should have had regard to and considered the exercise of his discretion under CPR 83.7, and that if he had done so, he would have applied the different (and more stringent) test of whether there were "special circumstances" which rendered it inexpedient to enforce the judgment or order (CPR 83.7(4)(a)); it was not permissible for the Master to apply an "open-textured" discretion. Further, Mr Samek argues that if the Master had correctly applied the narrower discretion under CPR 83.7, he would and should have concluded that there were no special circumstances such as to justify a stay. The reasons why a stay could not be justified were set out in Mr Samek's skeleton, broadly as follows: there is no suggestion that MWP is in fact going to seek to enforce the Bahamian judgments in the UK, not least because there is no evidence that TIS has any assets against which to enforce in the UK; but in any event, the Bahamian judgments related to separate proceedings in which costs have been awarded against TIS, and certainly to the extent those Bahamian orders give rise to a crystallised debt (in terms of taxed orders for costs) they should be met; there is no reason to think that any domestic Court would, in due course, order the Bahamian costs judgments to be set off against damages or costs orders obtained in this jurisdiction in TIS' favour given the discreet and free standing nature of the Bahamian proceedings; further, the enquiry as to damages has not even commenced and the existing costs orders in TIS' favour in this jurisdiction are not yet quantified, so any argument about set off is necessarily speculative and uncertain. All of this means that, on the facts, there are no special circumstances which could meet the test under CPR 83.7 and so the Master should have concluded.
What discretion was the Master exercising?
Mr Shepherd, who appeared for TIS, directed me to CPR 3.1 which gives the Court wide case management powers, including specifically CPR 3.1(2)(f) which contains the power to "stay the whole or any part of any proceedings or judgment either generally or until a specified date or event". Mr Shepherd argued that this was the provision relied on by Master Yoxall. CPR 83.7 is irrelevant.
Master Yoxall did not say in terms in his judgment (so far as the notes of that judgment record) what power he was exercising in granting TIS's application for a stay. But given the terms of the application notice, which refers in terms to CPR 3.1(2)(f), it is reasonable to infer that he was exercising the Court's inherent jurisdiction, now reflected in CPR 3.1. I approach the appeal on that footing.
Court Rules permitting stay
The discretion under CPR 3.1 is broad. The notes in the White Book, at paragraph 3.1.7, record that the Court has an inherent jurisdiction to stay the whole or any part of the proceedings, and that the circumstances in which a stay may be appropriate are many and various.
The Registration Order is in my judgment a type of "proceedings or order" within CPR 3.1(2)(f). As a matter of ordinary language, CPR 3.1(2)(f) extends to the application before the Master.
I do not accept that the Master was constrained to exercise his discretion under CPR 83.7 or alternatively CPR 40.8A, to the exclusion of CPR 3.1. I do not accept that once a judgment becomes liable to execution, an application for stay can only be made outside CPR 3.1, or that CPR 3.1 is ousted by one or other of CPR 83.7 or CPR 40.8A.
In relation to CPR 83.7, the first and important point is that it only applies where the judgment debtor or other party is liable to execution of a writ of control or a warrant (see CPR 83.7(1)). In those circumstances, that party can apply to the Court for a stay of execution, and must demonstrate "special circumstances" justifying a stay. I can readily understand the argument (without reaching any conclusion on it) that once a writ of control or warrant is issued by the judgment creditor, the narrower discretion in CPR 83.7 should apply with exclusive effect, because it is specific to that situation. But MWP has not issued any writ of control or warrant. So that argument does not run. In my judgment, CPR 83.7 does not apply on its plain terms.
Further, I do not accept that the rules require a judgment debtor to wait until active steps are taken by the judgment creditor to enforce the debt, by issuing a writ of control or warrant, before he is entitled to come to Court to seek a stay under CPR 83.7. The better analysis is that the judgment debtor can come to Court, even where no steps have been taken towards enforcement by the judgment creditor, and seek a stay under CPR 3.1. Whether the stay is granted depends on all the facts and circumstances of the case: it is a matter of discretion.
CPR 40.8A gives the judgement debtor the right to come to Court to seek a stay of execution on the basis of "matters which have occurred since the date of the judgment or order" in which case the Court can grant such relief on such terms as it thinks just. But that was not the basis on which TIS put his application, and the application notice did not indicate what, if any, matters had arisen since the date of the Registration Order (which was the Order cited in the application notice) which might justify a stay. Rather, the factors relied on by TIS related to the wider picture of unfolding litigation, including the outcome of the arbitration, which pre-dated the Registration Order. I do not consider that the existence of CPR 40.8A precludes an application for a stay under CPR 3.1(2)(f). These are complementary provisions. In any event, TIS' application to the Master did not, on the facts, fit the precondition for exercise of discretion under CPR 40.8A.
I therefore reject Mr Samek's technical argument. I accept that the Master had discretion under CPR 3.1(2)(f) and was correct to approach the application, as he was asked to do, under that rule.
The scope of this Court's review
I can only interfere with the Master's exercise of discretion if I conclude that it was wrong, in the sense of disclosing some material error of principle, or if it produces an unjust result: see CPR 52.11(3). Mr Shepherd reminded me of the guidance in Tanfern Ltd v Cameron-MacDonald [2000] WLR 1311, paras 30-33. Specifically, in relation to the first limb (whether a decision of a lower court is "wrong"), it is not my role to substitute my own view, but rather to have regard to the "generous ambit within which a reasonable disagreement is possible", see G v G (Minors: Custody Appeal) [1985] 1 WLR 647, cited in Tanfern.
Conclusion
I do not detect any such error of principle, nor do I consider that the Master's decision leads to an unjust result. I have set out above in summary the reasons for the Master's decision. His decision reflected a perfectly reasonable response to the facts and submissions before him.
In my judgment, the Master exercised his discretion correctly. There is no basis for this Court to interfere. I dismiss the appeal.
SECOND GROUND: ALTERNATIVE CONCLUSION
If my conclusion that CPR 3.1(2)(f) applies is incorrect, and MWP is right to say that the provision which the Master should have been considering is contained in CPR 83.7 – leaving aside the fact that there is no writ of control or warrant in existence - then my conclusions would be as follows. First, I would accept that the Master made no reference to the test in CPR 83.7, and thereby misdirected himself. That would be an error of law, which would vitiate the Master's judgment. It would fall to me to exercise the CPR 83.7 discretion afresh. If asked to do so, I would conclude that there are special circumstances here which do render it inexpedient to enforce the Registration Order. Those special circumstances consist of the following factors, many of which are the same as the factors considered by Master Yoxall; but there are others as well.
The key feature of this case is the complex web of litigation which surrounds this application for stay. The signal event to date has been MWP's claims touching on the Max shares, which failed in the arbitration. It is important to hold the ring while the various aspects of the post-arbitration "mop up" are completed. To do otherwise would permit an unfair advantage to accrue to MWP, who would be able to "steal a march" on TIS.
In that context, I accept that TIS has at least three bases on which he might secure money from MWP pursuant to a Court order in the future (I put it no higher than "might"):
a) By means of the costs orders in favour of Mr Emmott in the arbitration (on the footing that TIS funded the arbitration, TIS can expect to recover some at least of his outlay);
b) By means of the enquiry as to damages (if indeed it is established that the freezing order caused loss and damage in relation to the Max shares of which TIS was the beneficial owner; alternatively, if it is shown that the Bahamian proceedings were an incident of the freezing order such that the Bahamian costs orders should now be recovered as part of those damages);
c) By means of the domestic costs orders in TIS' favour. Although there is an appeal outstanding in the Max action, and so costs are still at large, TIS has costs orders in his favour and could proceed to assessment of them.
There is plenty of litigation to come. But the prospect of recovery by TIS is not mere "speculation". Each of these bases is connected with MWP's claim over the Max shares. The prospect of recovery for TIS is real.
Specifically, in relation to the Bahamian costs orders, it is to be noted that they are themselves the subject of the damages claim against MWP. For that reason, if no other, it would be preferable, as matters stand, to wait and see whether those costs are recouped as damages in due course, rather than ordering them to be paid now.
I was told that Mr Emmott has a worldwide freezing order in place against MWP, and that any costs which are paid to MWP would get caught by that freezing order, in any event. This factor lends support to the conclusion that it would be better to stay the enforcement of the Bahamian costs orders, rather than risk wasting time recovering costs which would then simply become subject to a freezing order in Mr Emmott's favour.
Further still, I was told that MWP has not taken any steps to enforce the Bahamian orders against TIS within the jurisdiction, because TIS has no assets within the jurisdiction. So long as that remains the case, a stay will not prejudice MWP, nor will it create any injustice.
More broadly, I reject the proposition that the Bahamian costs orders (assuming they are not recouped as damages in the enquiry) would not be the subject of a possible set off against orders for costs or damages going the other way. I was shown Fearns (T/A Autopaint International) v Anglo-Dutch Pain and Chemical Co Ltd [2010] EWHC 2366 (Ch). That case demonstrates that there is a discretion to order set off between different liabilities in respect of damages or costs, in accordance with what the Court considers to be just in the particular circumstances (see para 75). The Court may well have to address set off in due course, and it cannot be said (as Mr Samek argues) that there is no likelihood of set off involving the Bahamian costs orders at the end of the day.
In my judgment, these factors would amount to special circumstances rendering it inexpedient to enforce the Bahamian costs orders. I would grant the stay under CPR 83.7, if that was the correct rule to deploy.
FURTHER POINTS
I wish to deal, finally, with a handful of other points.
First, Mr Samek challenged Master Yoxall's judgment on the further basis that Master Yoxall was, he said, wrongly influenced by comments made by Flaux J in related proceedings in the Commercial Court, where the possibility of a stay of the Bahamian costs orders was discussed but not fully argued. Master Yoxall said in terms that he had reached his own view and not been influenced by what the Judge said. That is the answer to Mr Samek's point. The further comment by Master Yoxall that his view was "fortified" by its coincidence with Flaux J's view was just that, a comment. It does not form part of the reasons for his judgment. Mr Samek's challenge in this respect fails on the facts.
Secondly, a number of witness statements were produced in advance of the appeal hearing before me. Each party objected to the statements produced by the other party. At the hearing, I was not referred to any one of them. I was not pressed on the issue of permission to rely on these witness statements. I would have declined permission: such updating of the facts as was needed was achieved by Counsel's submissions and related to the status of other proceedings, which is a matter of record.
Third, complaint was made by Mr Samek that the New Zealand courts had picked up on Master Yoxall's judgment and had drawn support from it in making orders in that jurisdiction. What the New Zealand courts choose to do is a matter for those Courts. It is not relevant to the issues on this appeal.
Fourth, I have this morning received a flurry of emails, and indeed have been privy to an embargoed judgment of the Court of Appeal in a separate but related piece of litigation. I have read that judgment and all the emails I have been sent. None of these documents make any difference to my conclusion in this appeal, which I dismiss for reasons set out above. For that reason, I have not adjourned today's hearing to deal with the Court of Appeal judgment: there was no point, it is irrelevant.
CONCLUSION
The appeal is dismissed.
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MR JUSTICE GILBART :
I shall deal with this matter as follows
A Introduction [2]
B Preliminary Matters
(a) Position of Mr Mark Jones [8]
(b) Other proceedings relating to this incident, and their relevance if any [11]
(c) Similar Fact Evidence- ruling of Sir David Eady [26]
(d) The evidence before me and the position of PC Onwugbonu [29]
(e) Ruling on the admissibility of evidence about the Claimants' activities [39]
C The Claimants and the TSG officers on the van - background, character etc
(a) The Claimants [42]
(b) The officers on the TSG carrier including PC Onwugbonu [53]
D The TSG carrier [74]
E Events as the carrier travels south and then returns north [75]
F Edgware Road events –
(a) evidence of the Claimants [96]
(b) evidence of PC Amechi Onwugbonu [127]
(c) evidence given and called by the Third to Sixth Parties [136]
K Events at the Police Station [207]
L Hearsay Evidence called about the Claimants [239]
M Similar Fact Evidence [245]
N My assessment of the witnesses and their evidence [263]
O Findings of fact on liability, and conclusions on liability [301]
P Evidence, submissions and conclusions on injuries and on issues relevant to damages [318]
Q Contribution and indemnity [393]
R Order [400]
A Introduction
On 1st June 2007 at some time after 5.30 pm, a marked TSG[1] carrier van containing 6 Metropolitan Police officers stopped at the junction of Edgware Road and Sussex Gardens in Central London, so that officers within could speak to a group of youths containing the three Claimants. The van had been driving south down Edgware Road, and the group of youths walking north on the northbound pavement, but, if their evidence is true, the officers in the van considered that one or more of the group had been making gestures or mouthing obscenities at the van, and that they should be spoken to about their conduct. The van was then driven south to Marble Arch, where it passed around the junction and off north to look for the youths. After looking along the Edgware Road and in the side streets (and, according to some evidence, after officers had made enquiries in a restaurant or a shop) the van and its officers came upon the group of youths at the junction of Edgware Road and Sussex Gardens. In an incident lasting only a few minutes Omar Mohidin had entered the van, and then been allowed to leave it, Ahmed Hegazy had been arrested and handcuffed, and then shortly afterwards Basil Khan had also been arrested and handcuffed. By 5.50 pm, the Police Van had arrived at Paddington Green Police Station with Ahmed Hegazy and Basil Khan.
The events which took but a few minutes on Edgware Road that evening over 8 years ago have resulted in a long history of allegations and counter allegations. Insofar as I have to do so, I shall say something of that presently.
In short terms, the Claimants aver as follows;
i) Omar Mohidin alleges that he was taken into the van and there assaulted by the Third Party PC Mark Jones, who also swore at him and abused him verbally;
ii) Ahmed Hegazy alleges that he was unlawfully searched while on the pavement, and then wrongfully arrested by the Sixth Party PC Neil Brown, handcuffed by and put on the floor of the van by PC Brown and the Fourth and Fifth Parties PC Steven White and Sergeant William Wilson with unreasonable force, where he was further assaulted. He says that at the Police Station he was strip searched unnecessarily. Ahmed Hegazy also asserts that PC Brown swore at him, and that he was racially abused;
iii) Basil Khan alleges that he was wrongfully arrested, whereupon he was handcuffed and then, when placed in the van, was assaulted by both PC Jones and Sergeant Wilson. He was sworn at and abused. He was then forced to the floor, and then made to kneel within the van in handcuffs, both during the journey to the Police Station and then for some 20 minutes while he waited to be taken from the carrier into the custody suite. He was strip searched, which it is alleged was in breach of the relevant PACE code as he was then only 16 years old.
iv) Each claims damages, including exemplary damages, for false imprisonment and assault. In addition Ahmed Hegazy claims damages for direct discrimination under section 1 of the Race Relations Act 1976 and for breaches of Articles 3, 8 and 14 of the European Convention on Human Rights (" ECHR")
By contrast, the Third to Sixth Parties contend that;
i) One or more of a group of Arab youths had been seen making gestures and mouthing obscenities across the road at the TSG carrier, and the decision had been made to speak to them. Once the carrier caught up with them, PC Jones formed the suspicion that Omar Mohidin was in possession of controlled drugs, and decided to search him. He went into the van voluntarily to be searched. Nothing untoward occurred;
ii) In the case of Ahmed Hegazy, PC Brown suspected that he was in possession of controlled drugs. He started the procedure for a search under the Misuse of Drugs Act 1971. Ahmed Hegazy became violent, made serious threats of violence, was arrested and handcuffed, and was then placed in the van on the floor by PC Brown, PC White and Sergeant Wilson. He was never assaulted;
iii) As the van moved off with Ahmed Hegazy inside it, Basil Khan approached it and made threats. He was arrested by PC Jones and put in the van. There is a conflict within the Third to Sixth Parties' case as to exactly what happened in the van, but it is common ground that he was not assaulted. It is accepted that he was at some point put to the floor while handcuffed, and accepted that he was required to kneel in handcuffs on the way back to the Police Station and after arrival. That was justified because of his violent conduct, including his striking PC Jones.
One officer on the van that evening, PC Amechi Onwugbonu, made a report that evening to his superior officer that his colleagues had, to put it neutrally for the moment, behaved inappropriately to Omar Mohidin, Ahmed Hegazy and Basil Khan, but especially Omar Mohidin and Basil Khan. He is still a serving officer, as is PC Steven White, as are two other officers on the van who gave evidence before me when called by the Third to Sixth Parties, PC Giles Kitchener and PC Simon Prout. For that reason, the Defendant felt unable to assert any positive case about what happened in the van. I shall say more about the position of PC Onwugbonu presently. Mr Beggs QC for the Defendant Commissioner accepted that if a claimant established his case, the Commissioner was liable to compensate him, but he has joined the Third to Sixth parties so that if a case is established, an indemnity can be obtained from the officer responsible for such false imprisonment, assault or other tortious conduct as is established.
My task is to determine the claims for damages, on the basis of the evidence before me.
B Preliminary Matters
(a) Position of Mr Mark Jones
On the 5th day of evidence (Wednesday 17th June 2015) Mr Jones commenced his evidence in chief during the morning. I was told after the midday adjournment that he had collapsed and been taken to A and E at St Thomas' Hospital. He was discharged to the care of his General Practitioner at his home, which is in the deep south west. I asked Mr Hardy to convey my best wishes to Mr Jones for a speedy recovery. I intimated that I was prepared to consider any reasonable way of accommodating Mr Jones, including taking his evidence by video link, if it could be arranged. The Court continued with other evidence on Thursday 18th June and Tuesday 23rd June (It did not sit on 19th June or 22nd June for reasons unconnected to the case or this issue). I then received a short report from his GP, which attached a discharge report from St Thomas' hospital referring to an episode of collapse while giving evidence, and referring to a history of blackouts. The GP expressed the view that he was unfit to give evidence. Mr Hardy who, if I may say so, showed exemplary care and concern for his client, said that while he thought that Mr Jones was unlikely to want to return to the trial, asked for, and was given time for his instructing solicitors to talk to the GP. I was concerned that the report did not make it clear whether Mr Jones was prevented from completing his evidence if expected to do so within the next day or so, or whether his difficulty would last rather longer. After discussion had been had with the GP, it was said that a report was expected. I had also indicated to Mr Hardy that there was an amount of evidence which, if I were to accept it, would support the allegations against him, and that it was in his interest, if he could, to give evidence to deal with the allegations made against him.
On 24th June 2015, I was informed that unhappily, Mr Jones had again collapsed. I expressed the view that while an adjournment for a reasonable period to allow him to complete his evidence might inconvenience counsel for other parties, I gave more weight to his having access to justice, and to his thus being able to complete his evidence if he could, and reiterated that I was prepared to consider any reasonable means of enabling him to do so.
On 25th June 2015 Mr Jones consulted a Consultant Psychiatrist by telephone, arranged with admirable expedition by his solicitors. On 26th June 2015, after having time to take instructions by telephone, Mr Hardy QC informed the court that he was closing his case. It follows that Mr Jones did not return to court to complete his evidence in chief, nor to be available for cross examination.
(b) Other proceedings relating to this incident, and their relevance if any
This incident has resulted in a series of investigations and various proceedings. By the early hours of the morning, it was known that PC Onwugbonu had raised concerns about what had happened. An investigation by the Directorate of Professional Standards of the Metropolitan Police had started by about midnight on 1st June 2007. Ahmed Hegazy and Basil Khan thereafter both alleged that they had been wrongfully arrested and assaulted.
In due course all the other officers on the van were interviewed under caution. They were all prosecuted and tried at Kingston Crown Court in October 2009 for misfeasance in public office. PC Jones was also charged with racially aggravated assaults on Omar Mohidin and Basil Khan, and PC Brown was charged with racially aggravated threatening behaviour towards Ahmed Hegazy. Each of the three claimants and PC Onwugbonu gave evidence for the Crown. The case against PC Prout was dropped during the trial. The trial judge directed that PC Brown was acquitted of racially aggravated threatening behaviour. Sergeant Wilson and PCs Jones, White, Brown and Kitchener were all acquitted by the jury on all the remaining counts with which they were charged. The trial concluded on 3rd November 2009. During the course of that trial, PC Onwugbonu was in the witness box for no fewer than 5 days. He was then recalled for a further day. The transcript of his evidence in chief, cross examination by 5 defence counsel and re-examination runs to no fewer than 543 pages.
The Third to Sixth parties both in their pleadings and in their case (submitted in a skeleton) and to a degree the Defendant in the Defence, wanted me to have regard to the fact that there had been acquittals as evidence which tended to support the cases against the Claimants. I was also presented (by the Claimants) with transcripts of the evidence of each claimant, and of PC Onwugbonu, and (by the Third to Sixth parties) some of the evidence of and called by the Third to Sixth Parties.
There has been a long series of investigations by IPCC and by the DPS[2]. I have taken the summary provided to me in the skeleton for Mr Beggs QC for the Defendant Commissioner. I shall deal with it as neutrally as I can:
i) the IPCC managed an investigation by DPS, which concluded in June 2008 that all six officers in the van (save PC Onwugbonu) had a case to answer on both the civil and criminal standard;
ii) on 22nd March 2010 the IPCC decided not to institute misconduct proceedings;
iii) in January 2010, the solicitors for Omar Mohidin and Basil Khan made a complaint that a witness called Inspector Davis had given evidence for PC Jones at the trial, to the effect that he had not seen him misconduct himself on other occasions, when he had been present during the arrest of Babar Ahmad (of which more below). In due course the IPCC rejected the complaint;
iv) meanwhile in December 2009, the families of the officers who had been prosecuted made complaints to the IPCC about the conduct of the original secondary investigation, which it was said was biased, about the evidence of PC Onwugbonu, which was said to be false and dishonest, and the late disclosure at trial of CCTV evidence from the Police Station;
v) on 12th August 2010, four officers, including PC Jones, were charged with assaulting a man called Babar Ahmad during an arrest. They were acquitted at Southwark Crown Court on 3rd June 2011;
vi) in July 2010 all six officers from the TSG van in this incident (apart from PC Onwugbonu) issued proceedings in the Employment Tribunal against the Defendant Commissioner, alleging racial discrimination, harassment and victimisation;
vii) in July 2011 the IPCC concluded that the central complaint of the families about the investigation should be upheld. PC Onwugbonu's evidence should have been investigated for its accuracy and honesty, and the investigating officers lacked necessary investigative experience and should be subject to management action. However while there were mistakes in PC Onwugbonu's written and oral evidence, which justified management action, he had not been guilty of any criminal offences or of gross misconduct;
viii) on 6th September 2011 the IPCC concluded that there was a case of gross misconduct against two officers, and misconduct against one, for failures to review and manage over 2000 hours of CCTV film, or disclose it on time. Written warnings were given in March 2013;
ix) after the Part 20 proceedings had been issued in this action, the Additional Parties brought additional claims in the Employment Tribunal alleging that the issue of the proceedings constituted further acts of race discrimination and victimisation. All Employment Tribunal proceedings have been stayed until this action has been heard;
x) on May 8th 2013, the IPCC upheld appeals by the families against the findings of the DPS into their complaints. The IPCC directed DPS to hold a further investigation in the light of further enquiries;
xi) that reinvestigation was published on 5th September 2014. It recommended that no further action be taken, and upheld the original DPS conclusions that management action was adequate to deal with the complaints against the officers involved, including PC Onwugbonu;
xii) in January 2015 an appeal was submitted against the conclusions of the DPS reinvestigation.
The documents relating to those matters covered no fewer than 750 pages. I also had voluminous documentary evidence of police intelligence, stop and search records and sets of PNC print outs. That covered no fewer than 744 pages in the original bundles, and another 444 pages in a supplementary bundle put in by the Third to Sixth Parties.
The witness statements of the Claimants, evidence served under hearsay notices for the Claimants, and other material (principally consisting of PC Onwugbonu's evidence at the criminal trial, even though that was not served as hearsay evidence) amounted to 1508 pages, of which 796 related to PC Onwugbonu. The witness evidence for the Defendant took up 810 pages. That for the Third to Sixth Parties about events on the Edgware Road and at the Police Station consumed another 1094 pages.
The Similar Fact evidence, which as put before me in the court bundles, still included cases which had already been ruled inadmissible by Sir David Eady, and the evidence in rebuttal, took up over 3800 pages. The submissions made to me in response to the draft judgment show that there is an issue about which party was responsible for its inclusion. I return to this matter below.
Thus it was that I was presented with 13 lever arch files of documents and statements, in a case concerning what happened on the Edgware Road in a period of less than 30 minutes. I started the trial by inviting all parties to agree (as they all did) that:
i) the tribunal determining the claims for damages was myself, and that I would determine it on the basis of admissible evidence placed before me. I had received witness statements, and also hearsay notices of other evidence;
ii) evidence of what conclusions others had reached about the issues which I had to determine was inadmissible and irrelevant;
iii) the only potential relevance of what happened at the trial at Kingston or in other proceedings or investigations was if some reference were made to what a witness in this trial said for the purpose of showing inconsistency, a lack of reliability, or under s 5(2) Civil Evidence Act 1995, or to establish an admission against interest, or to rebut allegations of recent fabrication or similar. Even then, its admissibility was not automatic.
It is quite apparent to me, having heard the evidence and seen the witnesses, that both sides in this dispute harbour a great deal of bitterness about what happened that evening, or about the consequences of what happened. But I am not and was not conducting a public inquiry, nor do I have some wide ranging remit to consider whether the various IPCC conclusions were correct. My task was and remains one which is easily defined, albeit perhaps less easy to carry out: that is to determine, on the admissible evidence put before me, whether the claims of any of the claimants in these proceedings against the Defendant Commissioner have been proved, and if so whether he/they is/are entitled to damages, and if so to what degree, and then whether the Commissioner is entitled to an indemnity or contribution from all or any of the Third to Sixth parties.
I must express, as I did to Counsel, some surprise that anyone would think that any of that material relating to the IPCC investigations and conclusions, or the DPS responses thereto, was relevant unless something within it was relevant in some way- such as supporting an allegation of a witness making a previous inconsistent statement. As it turned out, no-one ever suggested that any of it was relevant, and I was not referred to a single page or line of it during evidence or submissions. I must also express my concern that the Third to Sixth Parties should include long sections of evidence in their witness statements describing the effects upon them of the various proceedings and investigations that have ensued, and their sense of grievance at what has or has not been decided. In the absence of a counterclaim by any of them in these proceedings, it was patently irrelevant unless it went to explain some difficulty or inconsistency in recollection. If it was intended to affect my judgment in some way, it has not done so. I shall not hold that against the Third to Sixth Parties when assessing their evidence, as I do not know whether the decision to include it was theirs, or whether it was included due to the advice received from others (be that the Police Federation or their solicitors), or whether shortcuts were taken, and witness statements prepared for other proceedings (such as in the Employment Tribunal) have been adapted for use in these proceedings. But the Court will have regard to it if any costs issue arises, as it will the unnecessary inclusion in the case bundles of hundreds of pages of material from the various proceedings and investigations which were irrelevant and inadmissible.
I make no complaint about the discovery of the various documents between the parties. But the manner in which any and every document, relevant or not to the issues before me, was copied into 13 case bundles showed a regrettable unwillingness by the parties collectively to engage in a cost effective preparation for trial. The submissions made to me in response to the draft judgment show that there is an issue about which party was responsible for the inclusion of this material. I return to this matter below.
At the outset of the trial, I also pointed out that in the Third to Sixth Parties' evidence there were several instances of passages about the motives of PC Onwugbonu, Inspector Belej of the DPS and others, and that allegations of conspiracy, concoction or collusion were made. I stated that while any witness was entitled to have his or her views, that did not of itself make such evidence admissible, and I would (and did) permit such evidence to be given or admitted only if it had some evidential foundation and went to a relevant issue.
In the event, there was no evidence which was admissible which supported any of the allegations of collusion or conspiracy made by the Third to Sixth Parties, as Mr Hardy QC very properly conceded, for he made it plain in his closing submissions that none was being suggested by him in this trial. There was however some evidence which related to PC Onwugbonu's approach to carrying out the Unit's duties which was relevant, and some about a past complaint of his which was unjustified (both of which I shall consider below).
I shall in due course have some other comments on some of the material about him which was included within the evidence for the Third to Sixth Parties.
All that having been said, once the trial was under way, all counsel proceeded to deal properly, fairly and efficiently with the actual issues. In a case listed for at least 6 weeks, the evidence actually finished on day 9, and I heard final submissions which started at the end of week 3. I am grateful to all counsel for the way in which the case was conducted at the trial. I am only sorry that ill health on my part has prevented the earlier production of this judgement.
(d) Similar Fact Evidence- ruling of Sir David Eady
On 10th February 2014 Sir David Eady gave a ruling on the admissibility of similar fact evidence ([2014] EWHC 235 (QB)). He was asked by all three Claimants to admit evidence relating to 9 incidents, and a further 2 on behalf of Ahmed Hegazy. As he made plain, he was not ruling that the trial judge should admit any of the evidence, but whether the material passed the stage one and two tests in O'Brien v Chief Constable of S Wales [2005] 2 AC 534.
He ruled that four incidents passed the tests, of which three were relied on at trial:
i) an incident relating to the arrest of Babar Ahmad by PC Jones and others on 2nd December 2003;
ii) an incident relating to the arrest of a Mr Mohammed El-Kholti by PC Jones and others in March 2007;
iii) an incident relied on by Ahmed Hegazy and known as OG1/07/2999, involving the stopping by PC Brown and another officer of a black man called Barnes in Kennington Road on 26th June 2007.
No further arguments were taken before me about the admissibility of any of that evidence. As will become apparent, I regard the evidence adduced by the claimants, even if true, as being of very little weight in determining what happened in the incident with which this case is concerned.
(e) The evidence before me and the position of PC Onwugbonu
All parties agreed to my suggestion that I should hear examination in chief orally insofar as it related to events on the Edgware Road or in the van, or in the case of the Claimants and Third to Sixth parties, and PCs Kitchener and Prout, what happened at the Police Station. In the case of the evidence called by the Defendant from the then custody sergeant Inspector Watkinson and his supervising officer Inspector Cruickshank, the witness statements were adopted as the evidence in chief. Both were cross examined.
Ahmed Hegazy's case was the first to be heard. He gave evidence first. Ms Gerry also put before me as hearsay evidence:
i) medical evidence of the examination of Ahmed Hegazy by Dr Frazer;
ii) the notebook and parts of the witness statement of PC Onwugbonu. I shall say more of this in the ensuing paragraphs;
iii) evidence of Mohammed Ahmed;
iv) evidence from Inspector Terry Banks, who was on duty at the police station, and from other officers there (Abdul-Salam and Reid)
v) similar fact evidence, as already described.
In her case for the First and Second Claimants, Ms Kaufmann called both of them to give evidence. She also relied on:
i) the evidence of a solicitor's clerk, Millie Guest, who was present at the Police Station. She was to have been called, but all parties agreed to her evidence being admitted under the hearsay notice provisions;
ii) the notebook and parts of the witness statement of PC Onwugbonu. I shall say more of this in the ensuing paragraphs;
iii) evidence from a DC Bates about a statement written by PC Onwugbonu;
iv) evidence from Inspector Terry Banks, who was on duty at the police station, and from other officers there (Abdul-Salam and Reid);
v) evidence from PCs Everett and Mackay about events at the Police station. PC Everett also gave evidence orally when called by the Third to Sixth parties.
In the case for the Third to Sixth parties, Mr Hardy called each of them. I have already set out what happened during Mr Jones' evidence. Mr Hardy also called or adduced
i) oral evidence from PC Kitchener and PC Prout (both of whom were also on the van);
ii) oral evidence from PC Everett (about events at the Police Station);
iii) oral evidence from PCs Bond-Vaughan, Mullen and James –Bowen on the similar fact incidents, as described above;
iv) evidence given by hearsay notice from an Inspector Allmey denying a remark he was said to have made;
v) PC Ryan Davis, a Sergeant Burger, a PC Thomas, PC Arno and another PC Brown, about dealings some time after the incident with Omar Mohidin and with Basil Khan, and remarks they were said to have made about the case.
Mr Beggs QC for the Commissioner called Sergeant (now Inspector) Watkinson, who was the custody sergeant, and Inspector Cruickshank, who was also on duty at the Police station. He had also filed, but did not call, evidence from other witnesses involved with the investigation of the officers in the van. Given the rulings I had made, such evidence was not relevant.
On the first day of the trial I had an accompanied inspection of the TSG carrier in question. That was very useful, and as will become apparent, inspection of it proved very helpful in understanding some aspects of the evidence.
It was agreed that the medical evidence relating to quantum could be dealt with in written form. I had read the reports, and the joint reports of the respective psychiatrists, which set out areas of agreement and disagreement.
As to the evidence of PC Onwugbonu none of the parties called him, albeit for different reasons:
i) Ms Kaufmann QC and Ms Gerry did not do so because the First and Second Claimants' solicitor had been told in an email of 30th January 2015 by his solicitor, Mr Richard Conley, a partner in Messrs Taylor Haldane Barlex of Chelmsford that
ii) "I have discussed our conversation with my partner Russell Haldane who is litigating all matters connected with this case on behalf of PC Onwugbonu. I regret to say that it will not be possible for him to offer you the assistance that you seek, because, following an appeal against the initial finding of the IPCC, a decision is pending which could potentially result in proceedings against him.
iii) Until the conclusion of the IPCC investigation we will not be in a position to comment."
iv) It is to be noted that the email in question never refers to his instructions or wishes. Further, it seems to confuse two principles. One is whether a witness can decline to give evidence (which he cannot in the event of a witness summons being in place under CPR Practice Direction 34A), and the other is whether, once called, he may decline to answer questions on the grounds of avoiding self-incrimination;
v) Mr Beggs QC did not do so because he said that the Commissioner had to remain neutral when serving officers gave conflicting accounts;
vi) Mr Hardy QC did not want to call him as part of his case, pointing out that his clients did not accept the veracity of his evidence. However they had also decided not to require him to attend for cross examination pursuant to CPR 32.7 and section 3 of the Civil Evidence Act 1995. He chose to rely on what he said were concessions made at the trial in the Crown Court, which, submitted Mr Hardy, affected his reliability. I shall deal with those submissions below.
Given his absence, it is also necessary to consider the criteria in section 4 of the Civil Evidence Act 1995, as I shall in due course, but I shall touch on criterion (2)(a) here. Mr Hardy referred to his absence as "Hamlet without the Prince." That is a touch unfair. While I accept Mr Beggs' position for the Defendant Commissioner, I am not impressed by the Claimants' or the Additional Parties' reasons. The Claimants could have required him to give evidence and issued a summons accordingly if he declined to attend voluntarily. Their solicitors should have pointed out to PC Onwugbonu's solicitors firstly that the decision on whether to give evidence was his and not theirs, secondly that those solicitors had confused the question of his attendance with the right not to answer certain questions, and thirdly they could have obtained a witness summons. Nor do I accept that the Third to Sixth Parties' had good reasons for not requiring him to attend to be cross examined, beyond securing the tactical advantage of not having him give live evidence, and thus potentially affecting the weight to be given to it. They also secured what I suspect they perceived as the tactical advantage of being able to mount very substantial attacks on his credibility without having to put them to him in the witness box.
I have some sympathy for Mr Onwugbonu, who has given evidence in this matter before, and in whose case there is an extant appeal relating to the IPCC investigations. He gave evidence at the Crown Court, and was cross examined over no fewer than six days about an incident that took place in less than half an hour. As I shall come to, he has also been subjected to a considerable degree of personal criticism by his former colleagues, some of which is concerned (as I shall discuss below) with little more than ill-considered vilification about inconsequential matters which do those who advance it little credit. But be that as it may, his solicitor has intimated that he will not give evidence before me, although as already noted, it is not clear whether that was said on instructions. However I do not consider that the reasons advanced by his solicitor can justify his non-attendance, nor the Claimants' decision not to call him. I must have regard to that fact when I consider what weight I should ascribe to it. But the fact remains that his evidence has been lawfully admitted, and the Third to Sixth Parties could have required him to give evidence, but elected not to do so.
(f) Ruling on the admissibility of evidence about the Claimants' activities
As will become apparent, each of the three claimants have been convicted, cautioned or reprimanded for various offences. On any view that evidence was a proper subject for cross examination, as Ms Gerry and Ms Kaufmann QC accepted. They have also been arrested on other occasions, and have been the subject of many stops and searches, most of which have proved negative. They have also (and especially Ahmed Hegazy and Basil Khan) been the subject of a good deal of internal police intelligence.
One must be realistic. If teenage youths go around together in a part of London which endures a fair amount of crime (and I heard evidence about it being known for street robbery, drug taking and prostitution) it is not surprising that they have been stopped and searched many times. I did not regard the facts of the negative stops and searches as indicating any propensity to commit crime on their part. Mr Hardy very properly accepted that the only relevance of the material about stops and searches and about other Police Intelligence was to show that they had been in a particular place at a particular time, or what happened when they were stopped and searched. So far as the Police Intelligence was concerned, it cannot show anything that could affect the credibility of a witness, for obvious reasons.
But I must add also that I do not treat the fact that they had been stopped and searched often without anything been found as being a matter for which the officers who had done so should be criticised. Policing an area such as this requires that the full range of measures is available for use, provided that sensible discretion and judgment is used. In this case the critical questions were not why previous stops and searches had taken place, but (a) why the TSG unit had turned from its course to find this group, and (b) what happened during the incident, including what was said to be a lawful stop and search of Ahmed Hegazy.
C The Claimants and the TSG officers on the van- background, character etc
(a) The Claimants
Omar Mohidin was born in Kuwait to Iraqi parents. He came to this country in 1996 and is now a British citizen. At the time of this incident he was almost 17. Since then he has studied Pharmaceutical Sciences at University.
On 7 February 2006 (when he was 15) he was reprimanded for using disorderly behaviour at Hammersmith Bus Station. It concerned an argument with a bus driver. On 5 November 2008 he was convicted of travelling on the railway without paying a fare when he used his girlfriend's Oyster card to get to Hounslow and Maida Vale. On 15 December 2009 he pleaded guilty to the theft of a mobile telephone on the 21 March 2009 from the manager's officer of Burger King in Queensway. On 23 October 2009 he pleaded guilty to an offence of false representation, namely using someone else's Oyster card. He was fined £50. On 23 December 2009 he pleaded guilty at the Magistrates Court to a theft of a black leather jacket from a clothing store, for which he was in due course made the subject of a community order with an unpaid work requirement and a curfew requirement.
On 3 November 2010 he was sentenced after a trial to an offence of assault on a member of staff at McDonalds Restaurant in Ealing by hitting him with a rucksack.
He told Mr Hardy QC that at this stage in his life (the years before and after the incident) there were times when he was dishonest and violent. He gave evidence that he had had the intention of joining the police force. He said that he had decided not to because of what had happened in this incident.
There was an incident referred to in the medical records that on 15 November 2011 he had dropped his girlfriend at Acton Town and then taken a 94 bus before getting off to walk through streets back to his house. The former Prime Minister Mr Blair lives in that vicinity. He was questioned by the police. FTAC is an organisation set up by the Barnet Enfield and Haringey Mental Health NHS Trust and the Metropolitan Police Service. Concern was raised because it appeared that Omar Mohidin wished to touch a weapon carried by the armed police officers who attended. The view was formed that he clearly did not pose a threat to others but appeared to be a vulnerable man who had a preoccupation with a protected site. He was visited at home by the FTAC Service Manager and two police officers. He was described as being pleasant, cooperative and appropriate in mood, thinking and behaviour. There was no sign of mental disorder or abnormal experience. He said that his only previous contact with the psychiatric service was many years ago for the purposes of a report requested in relation to legal proceedings (i.e. these proceedings). He also referred to past difficulties with police officers. The officers and the FTAC Service Manager were informed that he had always wanted to join the police service and he had approached the armed officers because "they are dressed cool."
Basil Khan was born in Kuwait in 1990, and came here in 1996. He works as a porter at a local medical services laboratory. He has a degree.
On 15 November 2005 he appeared at the Hammersmith Youth Court for a public order offence and he was made the subject of a referral order. On 10 April 2008 for handling stolen goods on a date between June and December 2007 he received a Community Order with a Supervision Requirement, having pleaded guilty. On 9 February 2011 having pleaded guilty to an offence of shoplifting on 3 February 2011 he was fined £85. On 8 November 2011 he was convicted of theft on 8 October 2011 to which he had pleaded guilty, and was made the subject of a community order with a curfew requirement. He had also been reprimanded for theft in September 2004, for criminal damage on 13 June 2008, and on 25 November 2013 had been cautioned for possessing cocaine and had received a penalty notice for possession of cannabis.
Ahmed Hegazy was 17 at the date of this incident. He is of Egyptian origin, but was born in the United Kingdom. His father had owned a small supermarket and then worked in various security jobs. He has an older sister, with a qualification in Business Studies who now teaches English in Egypt. Another sister graduated from University College London and works in a Travel Agency. He left school without qualifications save in mathematics.
On 5 March 2007 Ahmed Hegazy pleaded guilty at the Hammersmith Juvenile Court to robbery of a mobile phone, for which he received a referral order for nine months. The offence had happened on 3 March 2007. On 15 April 2008 he pleaded guilty to an attempted robbery on 16 January 2007, for which he received a community order for 18 months with requirements. On 21 April 2009 at Southwark Crown Court it was varied to a custodial sentence of 36 weeks wholly suspended for 12 months, together with a programme requirement. On 5 May 2009 for offences of assault occasioning actual bodily harm and criminal damage he received concurrent custodial sentences of 16 weeks suspended for 12 months with a supervision requirement. On 30 November 2010 he was fined for possession of cannabis some eleven days earlier, having pleaded guilty. On 21 June 2011 he was fined £85 for a similar offence. On 24 July 2012 for two offences of battery he was convicted after trial and made the subject of a community order. That related to an argument with a security officer at Whiteleys' store near Paddington. On 20 September 2013 he appeared at the Southwark Crown Court for an offence of robbery committed on 18 January 2012, for which he received a sentence of 54 months imprisonment. He also received a concurrent six month sentence of imprisonment for aggravated vehicle taking on the same date, and a three month consecutive sentence for failing to surrender to custody. The circumstances of the offences were that he and two others had decided to book a private mini cab so as to rob the driver. He was robbed of a mobile phone cash and credit cards. He was put into the rear of the vehicle where he was told that those who were attacking him had a knife and guns. He had his coat put over his head and the PIN numbers of the cards were demanded from him. They let him get out of the cab at a nearby junction. The vehicle was then crashed and the perpetrators were discovered hiding in rear gardens. He was arrested at the scene.
The medical records from prison (HMP Wormwood Scrubs) showed that in March 2013 he was put under restraint and handcuffed, insisted on being naked and complaining that the officers in the prison were treating him like a dog. He was described as being very angry. On 30 March 2013 the nurse was called to attend to him. He was complaining of chest pain and was being verbally aggressive and threatening to do something else to the officers. He accused officers of being rapists and said that they were the ones to be watched. He became angry, shouting and refusing to leave the treatment room. He was placed on segregation. On 10 May 2013 he was again placed on segregation under restraint following an incident with prison staff. He again appeared angry, rude and was complaining of chest pains. When asked about these incidents, he told the court that he agreed that he could get angry, and he was angry at his treatment in prison. He said that the officers on his wing were very racist. His anger was such that he was put under restraint and placed in the segregation unit.
He agreed that he started smoking cannabis when he was 13. He smoked it to block things out, and that it made him feel more mellow. He told Mr Beggs QC that he was very familiar with the procedure of "booking in" at a police station and with going into a cell.
(b) The officers on the TSG carrier including PC Onwugbonu
Neil Brown is a former officer in the Metropolitan Police, having been retired on medical grounds in 2013. He is now 38 years old. He is a graduate in English Literature and Social Policy, who joined the force in 2002. He qualified at Hendon Police College with distinction. He applied to join the TSG, which he did in 2005. He is an accredited Firearms Officer. Training for that role involved, among other things, learning the ability to work under pressure, and ensuring that one would "not do something silly." He has been trained in equality and diversity issues. His family are drawn from a widely diverse family, which includes African, Arabic and Hispanic members.
Former PC Mark Jones is now 48 years old. He retired from the Metropolitan Police in 2013 on health grounds. He had joined the force in 1990, having served as a Royal Marine from the time he was 17, in 1984. He joined the TSG in 1995, in which he remained until his retirement. He was a fully trained Firearms officer.
PC Steven White is a serving police officer. He joined the Thames Valley Police in 2003, joining the Metropolitan Police in 2005. Since the incident he has transferred to the CID.
Former Sergeant William Wilson joined the Metropolitan Police in 1979. In 1990 he transferred to the Warwickshire Constabulary, but re-joined the Metropolitan Police in 1994. He was promoted to Sergeant in 1999, and was a core sergeant and recruit trainer at Hendon Police College. Among subjects he taught was a two week diversity section of the foundation course for new recruits. He joined the TSG in 2003, where he remained until the time of this incident after which he was suspended for two years until his acquittal in 2009. He retired in November 2009.
PC Simon Prout is a serving officer in the Metropolitan Police. He joined it in November 2004, having previously been in the Hertfordshire Constabulary. He went straight into the TSG. He has taken and given courses in diversity in both forces. He now works on special operations.
PC Giles Kitchener completed his training course at Hendon Police College (where he was class captain) and joined the Metropolitan Police. Among other assignments, he ran a Team Leader programme on attachment to the Prince's Trust. He joined the TSG in May 2007, a little over 2 weeks before the incident in question. After the trial of the officers at Kingston Crown Court (when the trial judge withdrew the case against him from the jury), he was required to leave the TSG. He was put in charge of a team in Ealing supporting safe neighbourhood teams. He is now a trainee detective.
PC Amechi Onwugbonu had been in the Metropolitan Police since 2000, having previously served in the British Transport Police. He had been a TSG officer for at least 2 years by June 2007. He is still a serving police officer. I had a great deal of material put before me by the Third to Sixth Parties about him.
Each of the Third to Sixth Parties gave evidence about PC Onwugbonu, as did other witnesses called on their behalf, who also gave evidence about Messrs Brown, Jones, Wilson and White. I start by observing that there was no evidence before me from PC Onwugbonu which set out any observations he may have had, but of course his solicitors had declined the opportunity for him to give evidence.
PC Brown said that he endeavoured to get on with everyone professionally. Although they shared the common ground of an interest in motorcycles, they were not friends. In his witness statement he said that PC Onwugbonu was not a natural TSG officer. He said that he would express his strongly held views to PC Brown as they stood at their lockers, which were adjoining. He said that PC Onwugbonu did not like PC Jones. He strongly suspected that he had made up the allegations to try and get PC Jones moved away from TSG, and considered that PC Onwugbonu "did not appreciate the enormity of his allegations and that the likely consequences would be much more serious." PC Brown said that he had spoken to PC Onwugbonu on 12th June 2007, who had told PC Brown that he was sorry for the situation he was in, and had only wanted Sergeant Wilson and PC Mark Jones to be involved. He told PC Brown that when he had spoken to Inspector Banks, it was the Inspector who had insisted on DPS being involved. PC Brown said that PC Onwugbonu told him that he (PC Brown) had done nothing wrong.
PC Mark Jones had known PC Onwugbonu for some years, and had worked with him with almost daily for 2 years before June 2007. He said in his witness statement that they did not really get on, and he found PC Onwugbonu "arrogant and lazy." He would drive past incidents, was opinionated, did not volunteer for jobs or get involved in unpleasant or difficult work, and was often late for work. He did not cope well with confrontation, and would not want to get involved at all if it meant stopping members of the public who came from an ethnic minority. That was because he seemed to feel embarrassed to do so as a black officer. If an incident occurred he would often remain on the van. In July 2005 he had wrongly alleged that PC Mark Jones and another officer had put a mouse in his locker.
PC Steven White said in his witness statement that he had known PC Onwugbonu for a little over two years. Before PC Onwugbonu had joined the TSG (in 2005) he had been entrusted with helping new officers just out of training school perform street duties. PC White's view was that PC Onwugbonu had always made it clear that he was motivated by money, and would get upset over the allocation of overtime. PC White said that they had a professional working relationship, but complained that on one occasion PC Onwugbonu had carried out an arrest (of six men suspected of a scam on casinos) when he thought that he (PC White) should have done. He too regarded him as opinionated, not good at accepting criticism and had what he called "an issue" when dealing with confrontation, and "a problem" dealing with the stopping of members of ethnic minorities. He also recounted an incident at the Unit's Christmas party when PC Onwugbonu approached him and said that PC White would be "all right" and that he had never wanted things to get this far. PC White thought that PC Onwugbonu did not appreciate the seriousness of the situation.
Sergeant William Wilson, in his witness statement, said that he had known PC Onwugbonu for about 2 years. He described him as a "reasonably competent officer, although he inclined to being a bit lazy at times, and I formed the impression that he did not like confrontational situations." He considered that PC Onwugbonu was sometimes not assertive enough. He had criticised him for wanting to allow an uninsured driver to take his (the driver's) children to school. Sergeant Wilson thought that PC Onwugbonu could have dealt with his complaint about the mouse in his locker by letting him (Sergeant Wilson) deal with it, rather than reporting it to the Inspector.
PC Prout started with the TSG at about the same time as PC Onwugbonu. In his witness statement he described him as "pleasant enough" but said he was opinionated, which could cause friction. PC Prout said that he was not a team player. PC Prout also described PC Mark Jones and PC Onwugbonu as having alpha male personalities, who would clash. They behaved professionally to each other, but did not get on.
When giving evidence orally, PC Prout told Ms Kaufmann QC that at the time of the incident he had believed PC Onwugbonu to be honest and fair. On the night of the incident he had seemed really upset. While he had seen him upset before (as he had others in the unit) he had never seen him as upset as this. In re-examination by Mr Hardy, he said that he no longer thought him to be honest and fair, but no reasons for that were adduced.
PC Kitchener, in his witness statement, said that he had not met PC Onwugbonu until May 2007, when PC Kitchener joined the TSG Unit. He said that there had been an incident when it was alleged that one group of schoolchildren had robbed another. The van (driven by PC Onwugbonu) stopped and a group of black schoolchildren matching the description, was stopped by PC Kitchener and searched. They were arrested and put in the TSG carrier. At some point PC Onwugbonu said "why are we hassling these kids," which led PC Kitchener to think that he disliked dealing with young black males.
PC Richard Everett (the same PC Everett whose statement to DPS was adduced on behalf of Basil Khan as hearsay evidence) gave oral evidence. He gave evidence that a witness statement made by him in the proceedings on 10th March 2015 was true. In that he described how he joined the TSG in 2004 at Paddington Green Police Station, and was still a member of it. He gave descriptions of the various officers involved in the incident of 1st June 2007:
i) Sergeant Wilson was said to have a wealth of experience and expertise, who was a good solid supervisor who would not take any nonsense;
ii) PC Brown was a very professional officer who was very good at his job. He was very bright with a good work ethic and huge ability as a police officer. They were friends;
iii) PC Mark Jones was "without doubt one of the best police officers I ever worked with." He was extremely professional, highly motivated and committed to his work as a police officer;
iv) PC Steven White was a very thorough police officer and competent.
He had no concern about any of those four officers, nor ever saw any conduct from them that gave him any cause for concern. However that was not his view of PC Onwugbonu, with whom he disliked working. PC Onwugbonu was a very strong character who liked to give his opinion on things. He did not consider that he should have to deal with black youths on the street, and would feel very uncomfortable if a black person was stopped, and would not want to get involved. That caused discontent among other officers, because he was not doing his fair share of the work. However he would "happily get involved with white people, but wouldn't be willing to help when the person concerned was from other racial groups."
He said that PC Onwugbonu had made a false allegation against him and PC Jones about a forced entry and search in Hammersmith, which was not pursued by DPS.
He finished his witness statement thus "30. …….I genuinely think that PC Onwugbonu simply didn't want to work with PC Jones anymore and he thought that if he made an allegation PC Jones would be moved off the TSG. PC Onwugbonu may be malicious, but he is not very bright, and I doubt that he appreciated the seriousness of his allegations he was making or what the likely consequences would be for PC Jones and the other officers."
Perhaps unsurprisingly, that last passage was the subject of some short, sharp and effective cross examination by Ms Kaufmann who invited him to reflect on the fact that it was absurd to suggest that PC Onwugbonu would not appreciate the significance of what he said when he had complained. I shall return to this matter again in due course.
PC Roderick Michael James-Bowen, formerly a member of TSG at Paddington Green, and now a member of the Diplomatic Protection Group, gave a witness statement in the proceedings, principally concerned with the similar fact evidence relating to the incident involving Babar Ahmad. However his witness statement (which he adopted in examination in chief) also dealt with the officers involved in the June 2007 incident. He had known PC Mark Jones since 2002, describing him as an outstanding officer, who had a laid back approach. PC Brown was his former "partner" whom he held in high regard. He had known Sergeant Wilson and PC White for less time, but described both as keen and professional. He then turned to PC Onwugbonu. He fell out with him in December 2006, because he said that PC Onwugbonu had disputed the use of the Unit's social club funds to pay for a Christmas event which he could not attend. He thought him quite selfish in this request. He also referred to the incident in 2005 when PC Onwugbonu had complained that PC Mark Jones had put a dead mouse in his locker.
D The TSG Carrier
The TSG carrier is effectively a minibus adapted for TSG use. It has tinted windows running down the sides from the front to just in front of the rear wheel arches. The tint of those windows darkens views into the vehicle. There are doors for the driver and the "operator", who sits in what in an ordinary vehicle would be the front passenger seat. There is a sliding door on the nearside behind the operator's seat, and a door to the rear of the vehicle. It contains 9 seats, which are laid out in the following arrangement (diagrammatic only)
DIAGRAMMATIC VIEW OF CARRIER[Diagram or picture not reproduced in HTML version - see original .rtf file to view diagram or picture]
E Events as the Carrier travels south and then returns north
The evidence from Ahmed Hegazy on this topic was as follows. He said that on that date he had been in Hyde Park with a few of his friends. They had left during the afternoon although he was not sure at what time. They left to go to the supermarket to get alcohol, intending to go to the Somerfield supermarket on Edgware Road. He and his friends walked to the bus stop at first. He could not remember the discussion they had, but he remembered seeing a police van on the opposite side of the road, but said that there had been no discussion about it. They carried on towards the bus stop. He and his friends got a bus (he thought a number 15) and went to the supermarket where he bought a bottle of Smirnoff Ice[3]. His recollection was that there were about 5-6 in his group. The intention was to go back to Hyde Park with the alcohol.
It was at that point that the TSG Carrier arrived. In cross examination by Mr Hardy he said that he could not remember if he had seen five white people in the back of the TSG van. He accepted that it would not be possible to see through tinted windows. He denied that it was a natural reaction to call out and make rude gestures at a police van. When it was put to him that he was concerned that the van would turn and follow him, he said that that was untrue and that that was the last thing on his mind. He had got on the bus and travelled one or two stops as he could not be bothered to walk.
Hearsay evidence was given by Mohammed Ahmed. He stated in a statement of 28 April 2008 that he was one of the group of which Ahmed Hegazy was a member. He said that "On 10 June 2007 in the afternoon – I don't remember exactly what time as it was a while ago – I was with my friends, there were about six or seven of us. We had been walking from Hyde Park area along the Edgware Road. We were by Boots and Somerfields when we saw the police van."
The claimant Omar Mohidin gave evidence about seeing the van. He said that on that day he was with Ahmed Hegazy, Basil Khan and others, making about six or seven people in all. He said that they had been in Hyde Park and headed onto Edgware Road to get to Maida Vale at some time in the afternoon. He noticed a police van on the opposite side of the road going south, and noticed an officer in the driver's seat. He had simply looked at the carrier. They then got on a bus and went two stops. He noticed that the van had gone around the Marble Arch roundabout. He said that he thought that it might be coming back for his group because he had been stopped by the police before. After they had gone into a store to get some drinks he heard a skid and was then grabbed by PC Jones. When he was cross examined by Mr Hardy QC he was asked about a passage in his examination in chief as a witness at the Crown Court. He endorsed what he had said there, namely that while he could see the driver he could not see into the van otherwise because the windows were tinted, and there was too much sun so that he couldn't see.
He also agreed that he had said that the police might be following his group. He told them that if there was anything that they should not be carrying they should get rid of it. He was afraid that others could have spliffs, cigarettes or Rizla papers. He could not remember whom exactly he had warned. He thought that he had told the whole crowd. He had done so because he had been stopped by the police before and he did not want to be stopped on a nice day.
So far as Basil Khan was concerned, he told the court that on that afternoon he had been in Hyde Park with Ahmed Hegazy, Omar Mohidin, and couple of mates, with there being about seven of them in all. He said that they left as a group to go towards the Edgware Road and when they got onto the Edgware Road he noticed a police van travelling southbound. He thought that they would have an interest in stopping and searching his group because that often happened. He was doing nothing to justify it. Having seen them, they decided to jump on a bus. Everyone got on a bus and went two stops getting out further up. Some of his group (but not him) went into the Somerfields supermarket. Shortly after his leaving it, the police van arrived. He was cross examined about his interview under caution by the police on 2 June 2007. He repeated what he had said in that interview that he was not part of a group walking up on the street intimidating members of the public, and that he was not part of a group making wanking gestures towards the van or shouting obscenities towards the police carrier.
I turn now to the evidence given by the police officers in the van. It was largely, if not wholly, to the same effect as between the officers. PC Brown said that on that date his unit was placed on the Commissioner's Reserve. His unit was due to go to work in Lambeth from its base at Paddington Green. The day was particularly warm with the temperatures in the high twenties and sunshine. He knew all the others on the carrier except PC Kitchener, and had worked with all the others before. There was some delay in setting out because PC Onwugbonu was late in arriving. After receiving a Metbats[4] briefing they set out. Their purpose was to get to Lambeth as soon as they could, where they were dealing with street crime in Brixton. However as the van drove down Edgware Road a group of youths attracted their attention. Mr Brown could not say who saw them first. The group turned to face the carrier and were gesturing. They were making wanker signs; they were sticking up middle fingers, and making beckoning gestures. He said "I could hear shouting, but I could not hear the specific words. But I could see that they were enunciating the words "fucking pussies." I felt embarrassed. It looked appalling. Their behaviour in isolation was appalling. It was directed at the police carrier. It was not an option to drive on."
He said that when one was on the Commissioner's Reserve, one was required to deal with anything that cropped up which was seen. He said that a positive intervention was required because of the public perception. There would have been a dereliction of duty not to do so. The gestures and bad language were clearly directed at them. He said "I was not riled by it but I was embarrassed. My hackles did not rise."
He said that while looking for the group the van stopped and he spoke to a restauranteur. He said that the van then carried on up the road. The restauranteur had said that he had thrown out a group matching the youths' description. The carrier would have gone on to some side streets running off from Edgware Road to see if the group was there. They came across them at Sussex Gardens. The purpose of their going up to them was to be seen to speak to them because part of the rationale of the Territorial Support Group is that of high visibility policing.
When cross examined he accepted that there was no mention of the visit to the restaurant in his notebook. He said that he felt "professionally embarrassed" by the behaviour of the group, because it was directed at them as police officers. He accepted that the gestures were aimed at the police and not the public. He agreed that when they came upon them at Sussex Gardens there were no gesticulations or signs of public disorder, in what he described as "that particular freeze frame shot". In further cross examination by Ms Kaufmann QC he said that he could not remember anything in the briefings about problems relating specifically to Basil Khan or Ahmed Hegazy. He remembered that the Metbats briefing said there were problems on Edgware Road, but not the names in question. However, Ms Kaufmann pointed out to him that in his witness statement of March 2015 he said "As such we had received a detailed power point briefing from Paddington District Management. We were therefore familiar with the current problems that Paddington Officers were facing, including with Basil Khan and Ahmed Hegazy. The briefing had specifically referred to Basil Khan causing problems on the Edgware Road. He was reported to have threatened local officers and was frequently and deliberately walking along the footpath of Edgware Road and barging into members of the public and becoming aggressive. With this in mind it was somewhat coincidental that as we had travelled out along Edgware Road towards Lambeth that we encountered and spotted a group of Arab youths walking along the footpath clearly walking four to five abreast in an intimidating manner to members of the public…"
However as Ms Kaufmann pointed out to him in his interview under caution by the DPS on 1 April 2008 he stated that he could not recall specifically any named individuals as part of that briefing. He said "I think there may well have been but I can't recall specifically." When Ms Kaufmann suggested that it was not credible that he could not remember this in 2008 but could remember it in March 2015 he stated that he had just put in the names, and that he had learned this information at the criminal trial.
He told Ms Kaufmann that it was not an everyday occurrence to see youths behaving like that towards the carrier, and he had felt disgusted by it. He insisted that he could see the words that were being enunciated, and demonstrated that to me from the witness box. He said that if the TSG do not do anything in a situation such as that then complaints are received. He was asked how the public could have been aware of any response some 15-20 minutes later when the van had disappeared from the Edgware Road down the back streets before coming back onto Edgware Road. He said in answer to that that there could have been "word on the streets".
In his witness statement Mr Brown complained that the DPS did not investigate what he had said about the restaurant, to check its veracity. He accepted that he told DPS in his interview under caution that he did not remember the address of the restaurant and he had not said that he would get details. He responded that DPS were contacted after the interview and told by the Police Federation Representative that he could identify it. However Mr Brown also accepted in cross examination that while his notebook, which was written on the evening of 1 June 2007, gives details about what it was that was said by the group towards the van, it contains no suggestion of any visits to a restaurant.
The next witness was PC Mark Jones. He said this about the incident witnessed from the van when it was travelling southbound. "On 1 June 2007 I was on duty. PC Onwugbonu was driving. We set off to Lambeth down the Edgware Road. I cannot recall if we had had a formal briefing that day. As to the Metbats information, I tended to rely on my colleagues. I sometimes looked at it. On the opposite footway there was a group of 8-10 Arab youths barging past members of the public. One, who was Omar Mohidin, stepped forward and mouthed the words "fucking pussies" and gave the wanker sign towards the carrier. I had a clear and unobstructed view. I said "Did you see that? We should stop and speak to them." It was a collective decision to go around Marble Arch and follow them. We stopped near a restaurant to see where they had gone. We followed them because of their general anti-social behaviour. It was about 15 or 20 minutes from the time that we saw them to coming across them in Sussex Gardens. Once we stopped them, we intended to speak to them about their behaviour. We may have gone round some side streets – I cannot recollect. The behaviour we had witnessed was not unusual for that vicinity or elsewhere in London."
Mr Jones's notebook, written that evening, is to much the same effect. He stated in it that the one he approached at Sussex Gardens – i.e. Omar Mohidin – was the one who had mouthed the words "fucking wankers" whilst gesticulating with both hands at the carrier. He said in the notebook that Mohidin had said it several times using the wanker sign. As noted above, Mr Jones did not finish his evidence in chief so could not be cross examined.
The next witness was PC Steven White. He said that there had been no briefing that afternoon before the van set off. However there was intelligence of which he was aware that Edgware Road at its junction with Sussex Gardens is a hot spot for prostitution and drug dealing. He had had no contact with the claimants before. He said that he became aware of a group of youths on the opposite pavement walking in the opposite direction from the carrier. PC Jones said something like "have you seen that lot. Look at that lot," and drew the attention of the whole carrier to the group. PC White said that the first thing that he noticed was the conduct of the youths, because of the way they walked on the pavement. They were boisterous and spread across the footway and were, he supposed, obstructing it. He said that the standard he would apply was "would my wife or mother find it acceptable?" It was not possible to pass by, he said, when he had seen the mouthing of "you fucking pussies" and the "come on" gesture with hands. As the van started north up the Edgware Road it went into a couple of back streets looking for the group and also stopped once or twice on Edgware Road. He could remember PC Brown and PC Jones leaving the carrier and getting back on. He did not know what information they had. When he was cross examined by Ms Gerry he said that he did not know who it was who had mouthed "fucking pussies". He thought that it was Police Constable Jones who suggested going back round to follow the group, because of their behaviour. He did not think that they had followed them because of any briefing. (He was there departing, and rightly so, from his witness statement, which had been padded out to include the phrase "and no doubt the briefing he had received") He said that the behaviour they had seen passed his test of whether it would offend his mother or girlfriend. He would have felt the same if the gestures and language had been aimed at anyone else. He said that he had not felt angry but accepted that he possibly had felt affronted. He did not feel humiliated. He insisted that the van had stopped on its way northwards on Edgware Road. He accepted that there was nothing in his witness statement about the group doing anything other than making gestures and mouthing. His witness statement had said nothing about the way that they walked on the pavement. However he pointed out that he had referred to it in his interview with the DPS.
In answer to Ms Kaufmann QC he did remember an individual mouthing at the carrier in an exaggerated manner. He said this: "If left to me, maybe I would never have ended up at Sussex Gardens, or spent that long looking for them," which accords with what he told the DPS in his interview. He went on to say that he had no objection to the decision that was taken.
The next witness was Sergeant Wilson who was the officer in charge of the van on that occasion. He said that his role was to ensure discipline on the carrier and to be there for advice. He said that if someone saw something he would rely on them to exercise their judgement. While he could have countermanded Jones' decision that the group should be followed, he was quite happy with it. There would be no issue from senior officers if a TSG van stopped on the way elsewhere to deal with something. He said this "Once PC Jones said what he saw I saw them (the group) walking along the road. There was a ripple effect. People were getting out of the way and it looked intimidating." When he was cross examined by Ms Kaufmann QC he said that he had seen no gestures or swearing by the group. He said that there was a point when Jones and Brown got off the carrier, but he did not know if that was to go into a restaurant.
The next witness was PC Kitchener, who had joined the TSG shortly before this incident. He said this: "Travelling south I particularly recall wanker signs made with two hands. The one doing it had a black coat, black spiky hair and Arab appearance. We then did a circuit of the usual haunts. We would drive north, turn left and left and then back north onto Edgware Road." He said that a time came when PCs Brown and Jones got off the carrier and went into a shop to see if they had any information to offer. He was told that a group of youths had been in there causing a disturbance and been thrown out. He went on "That renewed our impetus to find them. It may have waned a bit by then." When the van pulled up at Sussex Gardens he recognised Ahmed Hegazy from the earlier incident he had seen across the road. When cross examined by Ms Kaufmann QC he agreed that he thought that following the group had been the idea of PC Jones. He said he had some recollection of a point coming when people said it was not a good idea to continue, but said that when there had been a visit to the shop that had renewed the impetus to look for them. That occurred after two circuits of side roads of Edgware Road. It was pointed out to him by Ms Kaufmann that he had never mentioned this until he made his witness statement in March 2015. He said that he had not done so before as it was not relevant to the offence with which the incident was concerned.
The next witness was PC Prout. He was the operator on the van that day sitting in the front nearside seat, keeping a log, map reading, and completing checks on individuals. He said that he did see the group of individuals passing up Edgware Road. He said that their demeanour struck him. It was a group of individuals bunched together the behaviour of some caught his attention in mouthing insults and one seemed to be making beckoning gestures inviting a confrontation. The decision was made to go around Marble Arch and come back. There were largely unsuccessful attempts to locate the group. He described it as "not a quick process, which was beginning to drag on." There was a difference of opinion when PC Onwugbonu said it was not worth carrying on, and he agreed with him. Sergeant Wilson said that they should carry on. When cross examined by Ms Gerry, he said that he did see someone mouthing off "fucking pussies," and saw gestures, which he thought were aimed at the carrier. He said that in his notebook written that evening he had referred to a report of a group of youths that had been terrorising pedestrians and local shop keepers and that it was decided that we would speak to the group as their behaviour strongly suggested that that was the group in question.
The hearsay evidence of PC Amechi Onwugbonu was to the effect that PC Jones had shouted from the rear of the carrier that he (PC Onwugbonu) who was driving should do a U turn on Edgware Road, because someone had shouted abuse as the carrier went passed. He said that he saw 7-10 young Arab males at the bus stop just outside a public house on the opposite side of the road. He described his negotiating the one way system, and then heading north and carrying out an area search for the youths for about 20 minutes. His evidence in his statement given on 6 June 2007 was that all the directions were mainly given by PC Jones in terms of the areas to search. He said that there was one point where PC Jones and PC Brown got out of the carrier for a look down an alleyway while the rest of the officers waited on the carrier. PC Onwugbonu said this "I turned around and said to Sergeant Wilson "is this it? What have they done?" Sergeant Wilson shrugged his shoulder saying "it looks like he has got a bee in his bonnet."
F Edgware Road events
(a) Evidence of the Claimants
The evidence of and for the claimants was as follows. I shall deal with them in the order in which they were involved in the incidents at the van.
Omar Mohidin was 16 at the time of the events in the Edgware Road. He said that after they went into Sussex Gardens, he heard a skid and remembered being grabbed. It was an officer in uniform, who was PC Mark Jones. Omar Mohidin said that he was grabbed and dragged into the side door of the van, when he was handcuffed and put on to a seat. Jones did not introduce himself as a police officer. Omar Mohidin said "He accused me of calling him a pussy. He said "you calling us pussies you are a fucking schoolboy." He said nothing else about why he was taking hold of me." Omar Mohidin said that there was a lot of screaming and shouting from PC Jones, and he looked as if he was going to get very physical. He went on "He told me to stand up and sit down repeatedly. He was asking me where I was from. I said I was born in Kuwait but I was from Iraq. He then went mental and shouted louder in my face and screamed. He said "Iraq, fucking Iraq, I got mates out there being killed by fuckers like you, and you are out here fucking robbing people." He was screaming at me. Every time he told me to get up he had his face very close to mine, and every time he did so I could feel his saliva hitting my face. I felt as if I was getting terrorised. I was terrified. I was 16. I was very scared."
He said he was in shock and only did what Jones told him to do. He remembered Jones telling him to sit down again. He realised what was going on outside the van. He noticed a few officers on his friend Ahmed Hegazy. He had heard a lot of shouting. It was not an argument it was someone shouting out of pain. They had hold of his lower and upper body but he could not remember the details. He saw it for about 3 or 4 seconds. He went on "He (PC Jones) told me not to move and said "don't fucking move or else." He said that he rushed out of the same side door. It had not been fully closed or pushed to before. In front of him there was a police officer sitting behind the driver's seat who was the one who was driving the van when he first saw it. He was the black officer PC Onwugbonu. He was not participating. His body language said that he was not participating. He thought that he would speak to him. He went on: "I asked him if he would help, and I said it was police brutality. He did not look back at me he said "I know. I can't do anything about it. I am sorry mate.""
He went on to say that the door opened up and he saw Ahmed Hegazy being brought in head first with around four police officers carrying him with his head towards the driver's seat. The officers were being very aggressive towards him. When they put him in the van Omar Mohidin said that they started getting "very physical." He said that "They had him on the ground on top of him. I saw elbows going up and down. I could not see where they were landing. I had a blind spot I think that was the corner of the chair (seat)". Then he said that everything went silent and the police carried on doing what they were doing. He said he was really scared and that he thought it would happen to him and he also said that he was really scared when Ahmed went silent because he thought that he might have died. Then he said that he started to hear an officer laughing "Oh look at him he is crying." Then he thought at least he knew that Ahmed was OK.
Omar Mohidin was sitting in the last seat on the driver's side. He said that the van was crowded, and he was terrified and scared. He saw a police officer come out of the crowd towards him. He was again very scared. It was PC Mark Jones. While he could not remember the exact detail he remembered that PC Jones told him to stand up and turn around. His chin was over his (Omar Mohidin's) left shoulder. He said "This is your lucky day. What you have seen – do you want this to happen to you?" As he took Omar Mohidin's handcuffs off, he went on "if I see you in the area in the next 24 hours you'll be nicked." The officer took his handcuffs off and pushed him out of the back door.
Omar Mohidin said that he then felt some relief but was really scared. His friends were still on the pavement, and there was a lot of shouting and screaming of "police brutality" and "racist fucks." Then he saw the van stop. Mark Jones got out. He said he thought "Oh no he's going to take me." PC Jones took Basil Khan into the van. He heard no one say "I'll fucking kill you." As Basil Khan was grabbed he did not hear him say anything like "I am going to stick you. I am going to watch you go cold as your blood drains away." He said that he heard nothing like that. He said that Basil Khan was taken on to the van and then the van left again.
When he was cross examined by Mr Hardy QC he said that he had assumed that it was Basil Khan whom he had heard shouting "racist fucks." because it sounded like his voice. He did not see any hand gestures before PC Jones came out and grabbed Basil Khan. It was put to him that he and PC Jones had simply walked to the van, where he was searched for drugs after being given the option of being searched on the van. He said that was all untrue. He accepted that he had not said before that he had been handcuffed (which is not actually true- he had told Dr Lord the psychiatrist in early 2011.) He said he had not mentioned it in his witness statement of August 2007 because he had been contacted 5 or 6 times by the police insisting that he should meet them. They had come to his house and talked to his mother and invited him to Starbucks for a hot chocolate. He did not know whose side they were on when he saw them so he only gave them a quick summary. For example, he left out mention of getting on the bus and some other things. He thought it was common sense that they used handcuffs. He said that he had handcuffs on his hands behind him and tried to reach his telephone. He insisted that, contrary to Mr Hardy's questions, he had not been patted down or searched for drugs. He thought that he had been on the van for about 20 minutes. He also said that as far as he was concerned Ahmed Hegazy was face down and he could remember him face down.
Omar Mohidin was also cross examined by Mr Hardy about an occasion when, as he admitted, he had attended a demonstration outside the Israeli Embassy on 29th December 2008. It was suggested to him that on that occasion he had been active in shouting abuse and threats at police officers who were "corralling" the protesters. It was said that he had made a speech, and that he had shouted at the Police officers present as follows; "Do you know PC Mark Jones? I'm getting him sacked for nothing. I'm going to get £40,000 from the Paddington Police and I'm going to send it all to our brothers in Palestine." In due course the crowd dispersed, but he kept shouting at officers "Don't fucking touch me or you'll lose your job like PC Mark Jones". A Sergeant Burger had taken his name.
Omar Mohidin said that he did not normally attend protests. He took no interest in matters concerning Israel and Arabs. He had gone there because of a phone call he had received that there would be good looking girls there. It is true that the Police were taking names. He never sounded off about anything or said anything about bringing a claim against PC Jones.
Ahmed Hegazy said that he had gone into the Somerfield supermarket on Edgware Road and bought a bottle of Smirnoff Ice. He said that they meant to go back to Hyde Park with the alcohol. However the police van was outside, and one officer, whom he described as white, stocky and a bit bald, came up to him. (That officer was undoubtedly PC Brown) The first thing that the officer did was to go for the bottle and ask Ahmed Hegazy his age. Ahmed Hegazy told him he was 17, whereupon the officer poured the contents away saying "you won't be needing this." Ahmed Hegazy said he was not affected by that because he could have bought another bottle. The officer then turned back towards him and began to pull around his belt. He thought that he had pulled up his own belt before they came towards him. He could not remember what was said to him. One officer was talking to him saying things like "you fat cunt" and "ugly". He responded in due course and said "I get more girls than you" in a joking way. He said that he felt a bit insulted, but took it as a joke. The officer then shouted at him "you threatened to get blood from me". He had not said that. He was also pulling up his (Ahmed Hegazy's) jumper. He had not asked about anything which he was holding. He was not sure if anything was taken from him. He had a mobile phone on him and, he thought, a wallet. If he had his wallet with him it would have contained his bank card, an Oyster card and cash, and possibly a provisional driving licence. Ahmed Hegazy could not remember if he handed anything to the officers at this point. He said that the officer repeated what he had said about blood a few times and was saying it loudly.
Ahmed Hegazy thought that the officer went for his handcuffs. There were some other officers there dealing with other people. As the officers shouted quite loudly the other officers showed some interest. He said that the officers tried to arrest him - i.e. they were trying to put his handcuffs on him. He did not think that the officer had said anything. Ahmed Hegazy asked the officer if he was serious and why was he arresting him. When the officer put the handcuffs on him he said that he was shocked. He said "why are you arresting me?" He said that he was handcuffed to the front. He was not sure if he had got an answer to his question, because he could not remember. He had said nothing abusive. He had not called him a "fucking cunt" or said "I will fucking kill you."
He said that the next officer who came was slimmer and taller and had, he thought, black hair (a description that matches PC White). That officer tried to put his foot out to take him down to the floor, and he eventually went to the floor. The second officer tackled him down to the floor, literally next to the van. The two officers held him down to the floor and he thought a few more joined them. He thought that there were maybe one or two more restraining his legs in some sort of lock. He said that he was trying to move his legs, because of the pressure on them. He was trying to move all of his body as he was very uncomfortable. He said that he said nothing. The officers were saying that they wanted to get him on to the van. He thought that it was because people were watching, but he could not recall if that was said.
The officers lifted him up by the hands and legs with his face upwards. There were three or four officers, but he could not remember exactly what parts of his body they had hold of. He was put into the carrier, and was struggling as he was placed in it. When he was put into the van he was put near the front of the van. He could not remember if he made contact with the officers. He could not remember if an officer said that he (Ahmed Hegazy) had hit him with his elbow. He was facing upwards, with his head towards the front of the van and his feet towards the rear. No one had hold of his head, which was next to a fire extinguisher and something else. (That fire extinguisher lies at the front of the rear compartment next to the inner edge of a bulkhead behind the driver's seat). He said that most of the officers dealing with him came into the van, but he could not remember exactly where they went. The shorter one (i.e. PC Brown) was on his left side, but he did not know if he was standing or sitting. He could not recall any restraints being placed on him other than the handcuffs. He said that they were tight and his ability to move was very limited. He could not remember if he said anything or if the officer said anything, but he said that he felt quite scared.
He then said this; "I might have been told already that I was being arrested. I think it was while the handcuffs were being applied. I think it was for threats to kill a police officer. I later learned that it was for that." He was not later told that he was under arrest on the way to the police station.
He said that he was in a lot of pain, all over his body. He could not recall what the officer to his left was doing. He said that someone he referred to as the "second officer" came towards him and grabbed his neck with his left hand and started strangling him with it. He then started punching him with his right hand, and he could not speak. That officer started shouting a lot and swearing at me, saying "you fucking Arab." He did not respond at all. The officer punched him two or three times in the face. He said that he thought someone outside was shouting towards the van. He thought that it was Basil Khan as he was the one who came in after that. He did not know who it was then. He heard shouts of "don't worry" and "leave him alone".
He said that an officer walked over him. One or two walked over him and in doing so stepped on him from his stomach downwards. He could not remember if the door was open or closed but he was lying across the way of anyone entering the van through the side door. The officers then came back in with Basil, went to the back of the van, and all of them including Basil stepped on him. He thought that the stepping on him may possibly have been accidental.
There was no more physical contact by the first officer during the journey. However he started taking off his body armour and said "I'll take your handcuffs off and we will have a one to one". He said that he was shouting it very aggressively. He did not take the handcuffs off. There was a time when the first officer picked up his leg and forced it onto a chair. He could not remember other officers doing anything else during the journey.
I shall deal with his evidence about what happened at the police station in due course.
He told the Court in evidence that he had injuries as a result of what had occurred: a lump on his leg, scratching and bruising of his neck and near his ear, on his wrist, and a few marks on his body, but he could not remember where. Dr Alan Frazer (from whom there were witness statements admitted as hearsay evidence), who was on duty as forensic medical examiner at Paddington Green on 1st June 2007 examined him at 21.08. As well as his work in general practice, he is a very experienced and well qualified forensic medical practitioner. He also has particular experience of dealing with musculoskeletal and soft tissue injuries, having been team doctor to three major professional football clubs in the London area, all of which have been in the Premier League from time to time[5]. Ahmed Hegazy complained of being kicked and punched. He was seen to be upset and crying.
Dr Frazer (who took photographs) found bruises to his upper arms, and especially to his left arm. They were consistent with the arms being gripped firmly. He had faint bruising round his left shoulder blade, diffuse bruising over the left side of his neck, reddening of his right temple, bruising on the back of neck and lower head, and minor weals on both wrists from the wearing of handcuffs. He considered that the diffuse bruising around the neck, which was red and obvious, was not caused by a blow, but by the application of pressure. While he could not exclude the possibility, he did not consider that the injuries he saw were attributable to "full blown kicks, heavy punches, being struck by a stick or truncheon."
Ahmed Hegazy's mother and sister went to the Police Station. Both made witness statements admitted under hearsay notices. He was released at about 3.30 am. Both say that he was bruised, shocked and complaining of pain. They took him to the Chelsea and Westminster Hospital where he was seen at 4.00 am on 2nd June 2007 shortly after his release. He complained of the injuries noted, and of swelling of the shins, where he said he had been kicked. His left wrist, leg and left ankle were X-rayed and no fractures were found. In her statement his mother said that she saw a footprint on the shoulder of the jumper he was wearing, which Ahmed said had got there "because he had put his foot on my shoulder."
He was cross examined by Mr Hardy QC. He agreed that he had moved his hand at his trousers. He denied that he was familiar with anything to be described as a distraction technique. He agreed that Omar Mohidin was the first of his group to be taken onto the van. It was pointed out to him that at the trial of the officers in the Crown Court, at which he gave evidence, he said that the officer and Omar Mohidin had walked off to the van. He said in the witness box that he could not remember that. It was pointed out to him also that at the trial he accepted that the officer had said something about him hiding drugs. He accepted in answer to Mr Beggs QC on behalf of the defendant that in his interview by the police he had said that it was Smirnoff Vodka[6] rather than Smirnoff Ice. He also accepted that he also could have smoked cannabis at some time during that day. He said that it did not affect his perceptions as he saw it. He said that he smoked it to block things out and it made him feel more mellow. He could not remember if he was smoking spliffs throughout the day in question.
He also gave some evidence about what happened with regard to Basil Khan. I have referred above to what he said about Basil Khan's entry when he was put down on the floor of the van. He was asked more questions by Mr Hardy QC about this topic. He said that Basil Khan was being dragged to the van and looked upset and angry. Although he had said at the Crown Court that he thought that Basil Khan had been punched, he said (as he did on that occasion) that he did not see him being punched. He said that he could not see the punch but he could hear what he described as "rattling".
I have referred above to the hearsay statement of Mohammed Ahmed who was another member of the group of youths. He said this about the events at Sussex Gardens: "We were by Boots and Somerfield when we saw the police van. I knew that TSG officers were in that kind of van. We were stood in the large pavement area. The van stopped and all of the officers got out. We all got stopped. One particular officer stopped me and spoke to me. I will describe him as officer (1). He began to ask me my name and address – which I told him. He didn't finish writing it down, as he was distracted by Ahmed. The officer did not search me. At this time I was stood with my back to a fence about six feet away from Ahmed who was slightly off to my left.
Officer 1 was distracted then by Ahmed (Ahmed Hegazy), who was screaming. I don't remember what he was saying. Officer 1 left me then and went over to Ahmed. I stayed where I was. I could clearly see Ahmed and two officers with him one on each arm. Ahmed was then put on the floor by the officers. Ahmed was then picked up off the floor by the officers – two on his arms and one on his legs. The officers then put Ahmed in the van quickly, but not safely. Ahmed was put in the van on the floor with his face near the front and his legs near the rear. When this happened me and the others moved nearer the van. Basil was stood immediately next to me on my left. We stayed there watching. All of the Officers got on the van and it moved a bit. Suddenly the van stops and two officers got out. They got hold of Basil for no reason. He did not speak to Basil or explain what he was doing. I think one each of the officers grabbed an arm each of Basil. When this happened I was stood next to him. The officers put Basil on the van and the van left."
The next witness was Basil Khan. When his group had got to Sussex Gardens, he had heard the screech of a tyre which he thought was the police van. He crossed over the entrance to Sussex Gardens and sat down on the other side opposite Boots shop next to Star Street. He had crossed the road because he wanted to avoid being stopped and searched. He said that at first everything was calm and the police officers were dealing with a group of his friends. He did not remember seeing Omar Mohidin at this point. It was only calm for a short while because then he saw police officers struggling and rushing towards the group. There was what he called an "argy bargy – pushing and struggling" with Ahmed Hegazy. He said that Ahmed Hegazy was half off the floor with four police officers around him. They were restraining him and it looked as if he was resisting them. They succeeded in getting him into the van. When Ahmed got to the van Basil Khan said that he crossed over thinking the van would leave. He crossed over with his mates to find out what was going on because he was concerned. There was discussion between them as to what had gone on, what had happened and so on. He did not know if the door was completely shut when the van began to roll forward. He said that "we wanted answers, and we began to move towards the van. We were shouting "why has he been arrested,"" but he never said "you racist fucks." He said that he was at the front of the group and was saying "why has he been arrested?"
He said that the van stopped and suddenly the door was opened and he was dragged in by two police officers. He was dragged in with no warning and they said nothing to him. He did not say "I'm going to fucking kill you" and he did not say to PC Jones "I'm going to stick you. I'm going to watch you go cold as your blood drains away." He told the court "I would not know how to put a sentence like that together at the age of 16. It's a bit too Shakespeare for me."
He said that it was not calm in the van. Ahmed Hegazy was lying on the floor. He was not comfortable and he was in pain and struggling. He was unaware of Omar Mohidin. Then he went on to say the following. "I was dragged in and placed on a chair at the very back by Mark Jones. It was seat F on the plan. Ahmed was on the floor, and I stepped on him by accident as I was being dragged along. I can't really remember what Mark Jones told me. As the van began to move a police officer came in and sat on seat E[7]. He was on his knees facing seat F as if he was looking down at me. It was Sergeant Wilson; I saw his epaulettes. He asked me a number of questions like "what's your name?" and "where are you from?" Basil Khan said that he was asking that very aggressively. He told Sergeant Wilson that he was from Kuwait. He went on "and without warning (he) slapped me straight across the left side of the face. I saw stars for one minute. I blacked out. I was shocked. By "seeing stars" it's like when you get up too fast and see stars."
He said that the Sergeant then got up and moved away, but he was then placed in a choke hold from the back (in other words someone's arm around his neck from behind) and was pulled off his seat still in this lock. He got dragged back by the equipment rack. The officer was on the floor with Basil Khan on top of him with the officer having hold of his neck. He said that as the officer put him on the ground and he was on top of him there was more pressure. He was running out of breath. He went on "I got scared. I could not shout. I clapped my hands to get enough of the police officers' attention. No one came. It seemed to go on for about ten minutes. I was feeling dizzy, my vision was not clear and I was seeing stars again." He said that the officer then moved towards the front of the van where he remained for a short period and then came round again to the equipment rack area. He went on "I got more scared. He stood over me, shouting down at me. He was shouting abuse like "you're a fucking schoolboy. Welcome to the real world. You don't own the Edgware Road." He repeatedly shouted abuse and screamed in my face. He slapped me twice. I then started to cover my face. He then hit the top of my head. He kept punching me on my head. He rubbed his knuckles on my head. He was still shouting abuse "You are a schoolboy. Welcome to the real world." It eventually stopped as I was shouting and began to cry. It felt like twenty minutes to me that's how long the whole journey felt." "
He was also examined by Dr Frazer, at 21.18 pm. Basil Khan complained of being kicked in the left side of his back. Dr Frazer (again in a witness statement admitted as hearsay) asked him to show him anywhere he had been injured. He noted a small area of bruising on the back of his left ear, minimal reddening of his wrists from handcuffs, but no bruising to his back. He took photographs. Dr Frazer did not consider that his injuries were consistent with "full blown kicks, heavy punches, being struck by a stick or truncheon."
He went on to say that the atmosphere began to calm down before they got to the police station. He had been in seat F for 2-3 minutes but for the rest of the journey he had been by the equipment rack. It was suggested to him by Mr Hardy in cross examination that he had shouted "racist fucks" at the police van, which he denied. He said he was not shouting at the police officers but shouting at the van loud enough so that they could hear and he agreed that he was gesturing with open hands. He denied "giving the finger" and denied giving the "wanker sign" but did not know if others were giving it. He insisted that he was slapped in the van and had hands put around his neck in the van.
(b) evidence of PC Amechi Onwugbonu
The next evidence about what happened in the van comes from PC Onwugbonu whose evidence was put in as hearsay evidence on behalf of Omar Mohidin and on behalf of Basil Khan.
It is important to note that PC Onwugbonu did not make up his notes in conjunction with any other officer. The other officers all made their notes in the same place, and all made them together save for PC Prout who insisted on writing his own recollection. That evening PC Onwugbonu not only wrote up his notebook but also prepared a statement in electronic form about what he said he had seen. On 6 June 2007 he made a further statement to the Directorate of Professional Standards.
PC Onwugbonu had been the driver of the van at the time when it went looking for the youths. His account is to the following effect (taken from the electronic file he prepared, which was retrieved from his computer. The document was prepared starting at 8:32pm.).
He said the following occurred after the carrier caught up with the group of youths. "Eventually the males were spotted in Edgware Road (at its junction with) Sussex Gardens outside Boots the Chemists. There was about ten youths present. PC Jones and the other officers jumped out of the carrier. I was blocking the road so I moved further into Sussex Gardens about 30 yards away from the junction. My colleagues approached the males who were all of Arabic origin and ranged between 15 -20 years old. PC Jones brought a young Arab male on the carrier who apparently shouted out the abuse at the carrier who later gave his name as Omar Mohidin. I was still in the driver's seat but facing into the carrier observing what was going on as PC Jones was by himself, everyone else was dealing with other males by the chemist, members of the public had started to gather, the rear carrier door was closed by one of my colleagues, I can't remember who, whilst PC Jones and Omar were still inside the carrier."
"PC Jones then began to shout and swear at Omar "you think we are fucking pussies" "you fucking cunt," "you are not so big now why are you fucking crying". PC Jones then asked Omar "where are you from?" Omar said "Kuwait" PC Jones then shouted at him saying words to the effect of "you're fucking here robbing people our British soldiers are getting killed in Iraq." Omar looked terrified saying "I didn't say anything to you." PC Jones continued to lay into him verbally and asked him to take off his jacket and began to search him. Suddenly, there was a disturbance outside with my other colleagues. I saw PC Brown and PC White struggling to handcuff a larger built male, there was a lot of shouting. PC Jones then asked me to keep an eye on Omar, he then jumped out of the carrier to assist PC Brown and PC White who were already being assisted by other officers. I jumped out of the driver's seat through the centre console area and joined Omar in the rear of the carrier. I then obtained his details and whilst doing this PC Brown and other officers brought this larger male to the carrier I now know this male to be Ahmed Hegazy………. He was handcuffed to the rear and appeared to be struggling as they escorted him in the carrier, he was forcibly placed on the floor of the carrier by the door area, I was at the rear of the carrier still dealing with Omar. Ahmed was shouting out loudly like he was really in pain saying "my face was squashed against the fire extinguisher" (this is the large red extinguisher that sits between the driver and passenger seat). PC Jones then said that Omar was free to leave, telling him (Omar) it was his lucky day. Omar then exited the carrier. All my colleagues were on the carrier at this point because of the large crowd that were gathering. As I was still in the back PC White jumped into the driver's seat and I think PC Prout jumped in the operator's seat. Everyone was at the rear. PC Jones and PC Brown were by the door holding Ahmed to the floor."
He continued: "As we were about to leave (and) the wheels had started to roll Police Sergeant Wilson who was sat on the seat by the rear door (G) immediately shouted out "stop the carrier he's said something" indicating that another male in the crowd had said something. Once the carrier had stopped Police Sergeant Wilson and PC Kitchener jumped out and grabbed another male in the carrier. This male was placed on the single seat at the rear of the carrier. I was sat in the single seat in the middle at the time, and I was facing the rear door. Police Sergeant Wilson went over to this male who later gave his name as Basil Khan……..and began to lecture him saying words to the effect of "you fucking little cunt, you ever say one more thing and I will fucking kill you, you little shit". I saw Sergeant Wilson slap him once across the face with his right hand on his left cheek; Basil appeared terrified and said "I didn't say anything." Basil was not under arrest at this point and the carrier began to move, PC Jones then asked Sergeant Wilson "what did he do?" Sergeant Wilson responded by saying he said something as we drove off."
He continued: "PC Jones then went to the back of the carrier behind where Basil was sitting and moved a couple of public order bags which were on the floor in the centre aisle towards the rear door. I saw him approach Basil from behind taking him by surprise, grabbing him around his neck in a headlock. Basil was shouting "I can't breathe, I can't breathe." PC Jones then dragged Basil backwards still in a headlock and threw himself down backwards with Basil on top of him and still in a headlock. They landed on the public order bags that PC Jones had prepared earlier, whilst doing this he was shouting and swearing at him most of which I can't remember. PC Jones then released the lock and stood up leaving Basil on the floor, he started to attack Basil violently pushing, kicking and driving his knees into Basil several times while Basil lay on the floor crying and screaming. I was in total shock and ashamed to be in this uniform. I could not believe what was happening in front of my eyes; I looked at the Sergeant expecting him to put a stop to this but nothing was happening. Ahmed was still shouting and making a lot of noises. PC Jones then began to ask Basil for his details. It became apparent that it was possible that he was well known on Paddington's ground. PC Kitchener then said "Isn't he the Basil Khan that walks around saying he owns the Edgware Road?" None of us were sure at the time. PC Jones started on Basil again saying "you think you own Edgware Road, you fucking cunt I am going to teach you a lesson you tell all of your friends." PC Jones then threw a furore of punches, I saw him punching and punching him several times like he was punching a punch bag, this all happened whilst en route to the (police station)."
"We stopped at the back gate for a few minutes whilst waiting for cell space and PC Jones was still punching and driving his knees into Basil, shouting swearing and basically abusing him. I looked at Sergeant Wilson using hand signals asking him to stop this but he ignored my request. There was cell space at Paddington and we drove into the yard. PC Brown and PC White took Ahmed into custody whilst we remained on the carrier with Basil and PC Jones carried on, again punching and punching and punching Basil several times. I was then approached by Sergeant Wilson in the yard. He'd been informed that I was not happy with what went on and I told him "I'm not impressed with what went on that was way out of line". He said "They can't go around abusing police officers." He then began to tell me that they were well known robbers. I informed him that I may have to speak to the governor about this and Sergeant Wilson said "you can speak to the governor if you are not happy.""
I shall refer to the rest of the conversation involving PC Onwugbonu and other officers presently. I turn now to the evidence given and called by the Third to Sixth Parties.
(c) Evidence given and called by the Third to Sixth Parties
PC Brown gave evidence about the events on Edgware Road. He said that the TSG Carrier came across the group at Sussex Gardens, having looked through back streets. Their purpose was to be seen speaking to them, as it is part of the rationale of the TSG that one has high visibility policing. Everyone got out of the carrier except for the driver, PC Onwugbonu. There were approximately 8 youths on the pavement, but there could have been more. Ahmed Hegazy came to his attention because he thrust his hand in the front of his jeans. It was an attempt to conceal something quickly or a distraction technique. In gang dynamics they are often very well organised at avoiding the police and concealing items. In Ahmed Hegazy's other hand he had a bottle of Vodka. His recollection is that it was a bottle of Vodka (i.e. neat and unmixed), which he thought was expensive for him. However he agreed that if anything had been drunk, it was only one nip which had been taken out of it. PC White asked Ahmed Hegazy his age, which he told the officers whereupon PC Brown emptied the contents of the bottle. He said that he was surprised that Ahmed Hegazy was under age as he was a big guy with a full beard. He went on "I told him that he would be searched. I opted for drugs. I suspected that he had a full wrap of some description. It is a red light area with lots of drug use. Nearby there is an apartment with a large car park known for drug dealing."
He said that he did not know who he was when he approached him. He had not met him before and did not think that he knew him. He said that he was concerned with the hand being thrust into the waistband and the vicinity in which the officers were. As to the issue of the gestures made earlier, the intention had simply been to speak to them. He went on "I would have introduced myself with something like "what are you up to?" He said that he used "GOWISELY" which is an acronym standing for:
Grounds – "I have seen your hands thrust into your waistband"
Object – "Suspicion of drugs"
W – Warrant Card if not in uniform.
Identification – "I am PC Brown, PC 1678U"
Station – Paddington Green.
Entitlement – The form which has a copy underneath and gives the statutory basis for search.
Legislation relied on – Misuse of Drugs Act 1971
Y – "you are detained for the purposes of search."
He said that the search was very brief due to his behaviour. Ahmed Hegazy said "If you search me I will draw your blood." PC Brown said "I did not mishear him – definitely not. He interrupted me, he kept calling me a "fat cunt." PC Brown said that he was wearing a Metropolitan Police firearms vest, when what he should have been wearing was a stab vest, which is lightweight. He was wearing the firearms vest because his stab vest had been soiled. When Ahmed Hegazy said what he did about blood, he instinctively drew out his hand cuffs and arrested him for threats to kill. He said this "I put the first cuff on and he wrenched his body away. He was like a raging bullock trying to wrench away. He was angry. His countenance was just a grimace. He referred to "get the cuffs off or I'll fucking kill you". He was shouting "racists" directed at us but designed to alert those around him."
His aim was to isolate him from the group, and he wanted to avoid escalation because of the dynamic of the Edgware Road. He said that rival gangs would bind together against their common enemy, namely the police. He then said "I managed to handcuff him with the assistance of PC White. Unfortunately it had to be in the front stack. There were not enough of us to be able to apply rear stack. We made a quick risk assessment, and decided that a front stack was better than nothing at all. He combined escape and attack. He tried to lunge forward at one point it was very fluid and fast moving. His verbals were continuous – a barrage of abuse. He made many varied and expressive expletives and comments."
He said that at this stage of his police career this kind of situation was not unusual. He had encountered this level of aggression many times, but it was particularly odd that it had escalated so quickly, which he thought was a massive overreaction to a routine polite stop. He said that Ahmed Hegazy was not keeping still, and was either yanking back or lunging forward. He said that if handcuffs are applied to the front stack it gives scope to use the hands as a weapon. He said that he caught Ahmed Hegazy's elbow on his head, and that Ahmed Hegazy was kicking out a lot and tried to head butt him and that he was someone who knew how to use his size. He then said to him "You are under arrest. You are getting on the carrier. We are walking to the carrier" or words to that effect. He would have been shouting. He said that Ahmed Hegazy's behaviour was certainly inciting the crowd. It seemed orchestrated, on reflection. In his view Ahmed Hegazy needed to be on the carrier so that they could control it better.
PC Brown then said this "I sensed they were bearing down – it's common in this kind of situation. There were lots of mobile phones pointing directly at us and in my face." He described how at all times PC White was with him on the other side of Ahmed Hegazy from him. He said that both of them were trying to force Ahmed Hegazy's shoulders down. PC Brown said that he was trying to restrain Ahmed Hegazy at the front by having hold of his arms while PC White was also holding on to him. PC Brown said that he was the "contact" officer while White was the "cover" officer – i.e. one taking the lead and the other covering the leader. He said that Ahmed Hegazy was trying to break free as they walked him from outside Boots to the carrier. Then he was taken to the floor by himself, PC White and Sergeant Wilson who by this stage had joined in. He said "We had to do it to get control. If you take a man upright to a van, then he can get a purchase on the door". He said that when Ahmed Hegazy was on the floor he screamed "The police officers are going to beat me, going to beat me." He said that he would sue them all.
He said that Ahmed Hegazy's ability to struggle was more limited by his being on the floor, but he was still struggling and offering threats. Outside the carrier, he had been able to kick out violently with his feet although he made no contact with Mr Brown with his feet. Mr White was carrying Ahmed Hegazy's left shoulder, he was carrying Ahmed Hegazy's right shoulder, and Sergeant Wilson was carrying the feet in an angle cross position. They managed to get him on to the carrier. He was placed on the floor inside the open sliding door. They had not dropped him, nor had they thrown him in nor had his head smashed against the fire extinguisher. The way that they put him in was closer to placing him than throwing him in.
His torso was by seats C and D, while his body ran at an angle from the left hand side of the driver's seat A towards seat G on the plan. Seat G was the Sergeant's seat. He, Mr Brown, sat on seat D having taken Ahmed Hegazy's weight on to his leg which was a handling technique. He then sat on the seat.
He said that he had arrested Ahmed Hegazy the moment that he uttered the threats to him. But he went through the whole process of arrest and caution on the van. He thought that he replied "pussies" or "fucking pussies." He arrested him for uttering a threat to kill as an instinctive reaction. He did not abuse him racially on the van. He was now less physically aggressive although his verbal aggression continued for considerably longer.
When the van drove away PC White was driving. PC Onwugbonu, who had driven the van on the way there, was now sitting in seat E or F. He said that PC Prout was sitting in seat B. PC Kitchener was at the rear and PC Jones was towards the rear. As the van was moving off Basil Khan came on board. PC Brown said that he was then looking after Ahmed Hegazy. He had hold of his handcuffs, and was monitoring him for spitting, asphyxia or excessive heart rate. There was no sign of any of them. He said that he never strangled him or put his knee on to his throat. Neither he nor anyone else had done that.
So far as Basil Khan was concerned he was aware that someone was going to come on board when the door was opened and he saw fleetingly that PC Jones had returned to the carrier with him. He said that Basil Khan seemed animated.
He said that the van had gone straight to the police station, and did not take a circuitous route. On arrival at the police station PC Prout would have gone to ask the desk Sergeant if there was custody space. On entry to the police station Ahmed Hegazy was subdued. That is quite common especially when one has had members of a gang looking on before. The bravado is now no longer required.
The allegation that he invited Ahmed Hegazy to fight one-to-one was untrue. He agreed that he had removed his ballistic vest, but that was because it was heavy and uncomfortable, as it contained ceramic plates. He had taken it off for a number of reasons, one was that he was going into the custody area so it was the logical time to remove it, the second was because he was perspiring heavily as it was hot, and the third was that bending forward with a ballistic vest is very restrictive. PC Onwugbonu was wrong to say that he had offered to fight Ahmed Hegazy. He referred to the fact that at the Crown Court trial Mr Onwugbonu accepted that it was an impression and that he could have been mistaken.
He was cross-examined by Ms Gerry about what had occurred on the Edgware Road. He said that what focussed his attention on Ahmed Hegazy was his thrusting his left hand inside his trousers. He agreed that he had said he was 17, but denied that he had taken out his driving licence. There were at that time no obvious signs of Ahmed Hegazy being upset. He said that he thought he had complied with the requirements for a search under Section 2 of the Police and Criminal Evidence Act 1984. He had told him his name. However he told the Court in answer a question asked by me that he had not told him he was being detained at the point when he had hold of him. (At a later stage in re-examination by Mr Hardy he said that when he first started searching him, it was under the GOWISELY procedure. However he said that he could not complete it because of his behaviour. He did not get as far as explaining who he was or where he was from.)
He went through the lion's share of the GOWISELY procedure. In his view you could start the search simultaneously so as to speed things up by starting the patting down as you went through the GOWISELY procedure. That accorded with his training instructions.
He succeeded in checking Ahmed Hegazy's waistband. It was put to him that he began telling Ahmed Hegazy that he "needed to lose weight" and "was a fat fellow". He denied that. He denied that Ahmed Hegazy had said anything to him about getting more girls than he did. In answer to the Court he said that he agreed that he had not told Ahmed Hegazy he was being detained at the point where he had hold of him. He said that Ahmed Hegazy pulled his arm away when he threatened to draw blood. It was suggested to him that he had said to Hegazy "You just said that if you search me I'll draw your blood." He said that was entirely untrue. He had interpreted the words used by Hegazy as a threat to kill. He had had regard to his manner and demeanour, and thought it was an articulate threat from one so young. He thought that he had reasonable grounds to arrest him. He agreed that the resistance by Ahmed Hegazy only occurred after he had started to arrest him. Before that point he had simply been pushing away his hands.
He was asked about why he had handcuffed Ahmed Hegazy's hands in the front stack position. He had said that one does that either when a person is compliant or when one has no option. He said that in this case he had difficulty in placing handcuffs on him. He agreed that he did get the handcuffs on successfully. He would have had help from PC White. It was pointed out to him that he did not mention that in his notebook. He said that once Ahmed Hegazy had the handcuffs on, he was still standing. Both PC White and he had a tight grip of his upper arms. He did not accept that bruising would have occurred at that stage. He was definite that Ahmed Hegazy had struck his (PC Brown's) head, but agreed that he had received no injury. He agreed that in the TSG incident report compiled with respect to this, while it refers to an attempt to strike PC Brown, that was not a reference to Ahmed Hegazy's elbow but to a head butt. He agreed that they used reasonable force to get Ahmed Hegazy to the carrier, and that he had hold of the upper parts of Ahmed Hegazy's arm. He said that Sergeant Wilson helped PC White and himself get Ahmed Hegazy to the floor, so as to establish control. He said that it had a twofold reason: both to protect himself and the other officers from injury. When he was lifted and put into the van, Sergeant Wilson had his legs under control. He said that Ahmed Hegazy had his face up looking towards PC Brown.
On board the carrier PC Brown said that he reiterated the arrests, and with cautions, for threats to kill. He did not call him a "fucking Arab." He said that Ahmed Hegazy was not crying out in any pain at all and that if a man is face up it is possible to apply not much ankle pressure to secure his legs. He denied taking off his vest and offering to have a one-to-one fight with Ahmed Hegazy. He said that that did not happen but that what happened was that Ahmed Hegazy asked to take his handcuffs off. He said that Ahmed Hegazy was not in pain. He did not notice any injuries. He noticed no reddening whatever.
He was cross-examined by Ms Kaufmann QC. He said that he did not remember briefings about problems with either Basil Khan or Ahmed Hegazy. He remembered that there were problems on the Edgware Road, but not the names, and that when he found out Ahmed Hegazy's name he did not recall any briefings. That was also the position he put forward when he was interviewed by the DPS. He was asked to explain how, if he could not recall any specific names 11 months after the incident, yet he could put it in his witness statement compiled in March 2015. He said he had just put in the names. He said he had learnt the information at the criminal trial.
He suggested that PC Onwugbonu should have assisted him. However, he agreed that he had said in interview under caution that it was common for the driver to remain on the vehicle unless required on the street. He agreed with Ms Kaufmann that there were six officers on the street three of whom were getting Ahmed Hegazy into the vehicle. He said that he was almost certain that Jones was on the carrier and was dealing with Omar Mohidin.
He was then asked about the incident with Basil Khan. He said that as the van was moving off he heard someone approach the carrier, and heard words to the effect "I'll fucking kill you". He was aware of a presence near the window. He could not say if he heard it first or saw him first. He was aware that officers got out of the carrier and thought that he had fleetingly seen Basil Khan come to the carrier. He did not hear Basil Khan being arrested and did not hear Basil Khan saying anything about "I'm going to stick you…" He said that when the door was open, there was a lot of shouting going on. He did hear him shout "I'm going to fucking kill you." He said that Basil Khan was resistant to attempts to restrain him. He was insistent that he could see that. He said that Basil Khan was as aggressive as Ahmed Hegazy, which is what he had also noted in his notebook on the evening in question. He said that he did not see Basil Khan strike Jones in his face with his elbow. But he did hear a loud verbal shout "He's just fucking hit me." He said that it was their training to shout out so that others can assist. He said that others went and assisted. He agreed that the shout for assistance was not mentioned in the note written that night.
It was pointed out to him by Ms Gerry that in his witness statement PC Brown included the following when describing the taking of Ahmed Hegazy to the carrier. "33…His behaviour was more akin to a person who had just been caught in the act of committing a very serious crime and was trying to escape. Of course, I now know that he was in possession of a stolen phone and was on licence from prison at the time, which could explain his behaviour but I didn't know this during the arrest." At paragraph 66 of his witness statement he then asserted that "Mr Ahmed Hegazy was on licence at the time of his arrest. He had pleaded guilty to an attempted robbery some months prior. Had Mr Ahmed Hegazy been charged and found guilty of the crimes for which I had arrested him….., he would have been recalled to prison. Mr Ahmed Hegazy had a desperate need to avoid being charged." Having referred to the fact that he was in possession of a stolen phone, he then went on "It is clear that he had a motive to adopt PC Onwugbonu's malicious complaint."
It was pointed out to him by Ms Gerry and by the Court that as Ahmed Hegazy was only 17 at the time, there could be no question of him being on licence from prison. PC Brown then asserted that it could be because he was on a suspended sentence. It was then pointed out to him again that as he was only 17 that was impossible, and that in fact he was on a referral order at the time.
I have already noted the concession made in re-examination (see paragraph 149).
PC Mark Jones gave evidence that his intention was to have a general chat with the youths about their behaviour when they caught up with them, in the tone he was using in the witness box. He started to walk up to Omar Mohidin who was the first person he had seen gesturing and mouthing in the Edgware Road. He said that he walked up to Omar Mohidin to start to speak to him. He said "As I approached he mouthed "Fucking wanker" under his breath. He had now moved his glasses up to on top of his head. His eyes appeared bloodshot. There was a peculiar smell coming from his clothing. It was cannabis. I then decided to search him. He said that he started to go through the GOWISELY procedure, but did not finish it as he said he wished to be searched in the carrier. He said he was 19 years old. We walked to the carrier. I had not arrested or handcuffed him. We got onto the carrier. Before I searched him I went through the GO WISELY procedure. I then commenced a search." (There is no record kept of this search).
He went on "As I was searching him I became aware of a struggle outside the carrier. I heard and saw it. I asked PC Onwugbonu to come through from the driver's seat to keep an eye on Omar Mohidin. During the GOWISELY procedure Omar Mohidin had been on seat F. When I started the search he was standing because I asked him to do so. At this stage he was very apologetic for his behaviour. I did have a conversation with him about his behaviour – he apologised." There is no mention in his witness statement or notebook about this conversation with him about his behaviour. PC Jones said that Omar Mohidin refused to give his details. He said he was not abusive or aggressive to Omar Mohidin nor did he force him to stand up and down repeatedly which was untrue.
He said that outside the van Ahmed Hegazy caught his attention. He was with PC Brown and PC White and was generally swearing saying "Fucking racists you're going to beat me" and "Take these cuffs off or I'll take on you cunts." He went on that he remembered that Ahmed Hegazy was being carried face down with his limbs thrashing about. He said that he opened the door. The sliding doors opened but he had no need to get out. He said that when Ahmed Hegazy was brought onto the carrier he took Omar Mohidin off the back of the carrier through the rear door. He said that he told him, although it was not in his notebook, that he should just think about his behaviour. He did so as part of a general chat. He said that he did not swear at him or call him a schoolboy or a pussy. He could recall no conversation about his country of origin. He said that he had no colleague serving at that time in Iraq and was unaware of anyone who had done so. He said he was then in seat H. Ahmed Hegazy was between seats A, B, C and D, and was very loud and vociferous, shouting "Take these cuffs off. I'll take on you cunts."
He went on "As we drove off I saw Basil Khan approach the left hand side of the carrier with clenched fists down by his side. He had an angry, menacing grimace on his face. I could not hear him say anything. He mouthed the words "I will fucking kill you." It was Sergeant Wilson whom he was addressing. Sergeant Wilson opened the door and I followed him out. We went to speak to him about his behaviour. Sergeant Wilson said "You were warned to move away but threatened me instead." He sneered to me and said "I'm going to stick you as well, I'm going to put a knife in you and then I'm going to watch you go cold as the blood runs away."
PC Jones said that it was graphic and that he was shocked. He took it seriously given the look on Basil Khan's face. He could not recall what power he was using to justify taking hold of him. The others in the group were moving closer to them and he wanted him on the carrier as soon as he could. He went on: "As Basil Khan was forced up into the carrier, I motioned him to sit at the rear of the carrier. He then spun and hit me with his right elbow in my right cheek." He said that he was saying that Basil Khan struck him deliberately. He said that he reacted by shouting straight away "He's just fucking hit me." He said "I would not normally swear as a police officer but I have done so before."
That was as far as Police Constable Jones got before the luncheon adjournment on the day he was giving evidence. He never returned to Court. It is therefore right that I should set out what was in his notebook to which he had already had permission from the Court to refer. I set out what he said further about Basil Khan. Having referred to him shouting out "He's just fucking hit me" PC Jones went on his notebook to say "I then grabbed Basil Khan from behind by the top of his shoulders and forced him heavily on to the floor towards the rear of the carrier by the equipment rack. It was an extremely confined space and it was proving difficult to handcuff him. I eventually placed him in handcuffs as he was lying over some equipment holdalls. He was complaining he couldn't breathe, so I sat him up and he just looked at the floor as we drove to (the police station)."
In his witness statement he included the following further details about what happened at this stage. "63. I handcuffed Mr Basil Khan in the rear "back-to-back" position and then lifted him up on to his knees so I could do a pat-down search of him just to satisfy myself that he did not have any weapons on him. He was still shouting and swearing and being abusive and I was aware that Ahmed Hegazy was still calling us "racist cunts" and similar words of abuse from the front of the carrier where PC Brown was dealing with him." "64. When I patted Mr Basil Khan down, I found a wallet. At some stage I gave the wallet to PC Kitchener, but I cannot remember precisely when. PC Kitchener did say "This is Basil Khan, he thinks he owns the Edgware Road" and by this I thought he was referring to a report about Basil Khan in one of the briefing packs that I had previously mentioned."
That is a reference to something which appears in a criminal intelligence record dated 11 May 2007. In that record it states that Basil Khan was stopped and searched on that date and that he was seen walking down the Edgware Road with his fist clenched and chest out. He was said to have been walking in a straight line so that members of the public had to get out of his way. It states that when asked to stop he turned in the opposite direction and tried to walk off. He was searched but nothing was found on him. And then it continues "when stopped asked why he was walking the way he was, he stated "He owns Edgware Road and he will walk how he likes". He was aggressive and had a bad attitude."
PC Jones did recall that Basil Khan said he was having problems breathing and he realised that his neck was on a helmet. He helped him up as quickly as he could and then restricted his movement by holding onto his handcuffs. He said that he told Basil Khan that he was being arrested for threats to kill and assault on police and cautioned him. He said that Basil Khan became less vocal and calmer once he was upright in the back of the carrier. I shall refer in due course to the events when the van reached the police station.
In his evidence PC Steven White said that when the carrier stopped, he saw through the window or door (he could not remember which) Ahmed Hegazy put his hand in his waist band. He thought that PC Brown was still in the van at that point. He described PC Brown getting out of the van before him with PC Brown as the "contact" and him being the "cover". He said that his intention as he drew up in the carrier had just been to speak to the individuals concerned in a firm clear voice much like the one he was using in Court. He said that Ahmed Hegazy was holding a large bottle of Smirnoff Ice. He took it from Ahmed Hegazy's hand as it could have been used as a weapon. He asked him his age, rather than his name, because he knew the group was young. Hegazy produced his original driving licence. PC White put the bottle on a low wall out of reach and then PC Brown said what he'd seen with the hand in the waistband, and said that Hegazy would be detained for a search under Section 23 of the Act. He said that Ahmed Hegazy very quickly said "Fat cunt," obviously directed at PC Brown. Ahmed Hegazy's demeanour was unhappy and he clearly did not want to be stopped. He repeated his abuse. PC White had Ahmed Hegazy's wallet in his hand which is where the driving licence was. He thought it had been produced from the back pocket. PC Brown commenced a search, but he could not remember the exact sequence. He remembered most of the requirements for a search being complied with, but given how the circumstances deteriorated further it would have been difficult to complete the mnemonic. In answer to the Court he said that the procedure GOWISELY would not necessarily be given in that order and he had never carried it out in that sequence. In his view the most important thing to do was to tell the person that he was being detained, what one was searching for, and why.
He heard the phrase "If you search me, I'll draw blood," said aggressively. PC Brown said "Did you threaten to draw my blood?" and arrested him for threats to kill. Ahmed Hegazy was not cautioned, as it was not practicable because his resistance was immediate. He continued: "I tried to take hold of his upper arm. As the handcuffs were applied he was struggling. He was not going to be 'coming quietly' ". He said words like "I'll fucking kill you." He did not recall him saying anything about the attitude of the police officers at that point. He did say "Fucking racists, you're racist, they're going to beat me" after he had been taken to the ground. PC White took him to the ground with his right leg. He said that he had hold of him, and that Mr Brown almost certainly did so too and that his aim was to put him on the ground so as to avoid injury. Others standing around were holding mobile phones, apparently filming. He said he was uncomfortable at how close they were. But he went on to say "I was used to being filmed. I was aware of an officer (whom he named): he was convicted of using certain language to a prisoner which was caught on mobile phone. I was told early in my service to imagine that I had a documentary crew with me at all times. I assumed that everything that I was saying or doing was being recorded."
He said that before Ahmed Hegazy went to the ground he had adopted a fighting stance like a boxer with his feet in a fighting stance. When Hegazy was on the floor he only had a clear memory of him waving his arms around and of himself trying to take control of Ahmed Hegazy's upper arm. He could not recall if he was on his back or his front. Ahmed Hegazy's lower limbs were flailing about. He said that to get him on the van they had help from Sergeant Wilson. He was too heavy to have been thrown in, but was placed in. Ahmed Hegazy said something about "Take these cuffs off, I'll fucking kill you. I'll take you on." Once Ahmed Hegazy was lifted he (White) was hit squarely in the chest. He thought that occurred after Hegazy had been put in the carrier and he had moved away.
He said that once he had been placed on the floor, he (White) was asked to drive the van. He stepped over Hegazy without contact. That was the last time that he had any dealings with him. PC Prout was sitting next to him in the operator's seat. He drove the van straight to the police station without any detours.
He was cross examined by Ms Gerry. He said that at Edgware Road, his attention was drawn to Ahmed Hegazy because of his size and the fact that he was carrying a bottle. He said that in his mind he thought that he may have secreted something but didn't think that he said anything about it. He was sure that he was carrying Smirnoff Ice rather than Smirnoff vodka. He said that he was not aggressive as they approached him, and did not object to handing over the bottle. He said after that he was bemused as to how things deteriorated. He did not think that the GOWISELY procedure had been completed and he pointed out that his recollection was that the PACE code says "where practicable." He said that he may well have said part of the GOWISELY. After Hegazy had said "you fat cunt" he may well have said to him "calm down you are going to be searched." PC Brown said that he was going to be searched for drugs and that he was being detained. It is wrong to say that he did not say that he was being detained. It is possible that he did not say his name and police station. It was suggested to him that Hegazy was not being violent and aggressive at this point, which he did not accept. It was then suggested to him that it was not Hegazy who had called Brown "a fat cunt" but rather PC Brown who called Ahmed Ahmed Hegazy fat. His answer was as follows according to my notes "Ludicrous. I had worked with him for two years and had never heard him speak to someone like that."
He agreed that when the handcuffs were put on he was under the impression that only one was applied but he could be wrong. He said that one applied handcuffs in whatever way one could, but agreed that using the rear stack method was better. He said it depended on the circumstances. He denied that the front stack was used because Ahmed Hegazy was compliant, and said that he was resisting throughout. He agreed that the search had already started when he said "if you search me I will draw blood." He was not compliant and was taken to the floor so that they could put him on the carrier.
He said that Ahmed Hegazy had bruising to his upper arm at some point. He did not know whether Sergeant Wilson came to assist before Ahmed Hegazy was taken to the ground or afterwards. He thought that PC Brown and he had control of the upper part of Ahmed Hegazy, and although he could not be certain it was him at the head, he thought he was. He had no memory of seeing PC Brown being elbowed in the head by Ahmed Hegazy. He agreed that there was nothing in his notebook about Brown being elbowed in the head by Ahmed Hegazy. He denied trying to strangle Ahmed Hegazy. He said that that suggestion had never been made before Ahmed Hegazy gave evidence on the first day of the trial. It was suggested to him that he had punched Hegazy in the face with his right hand. He said that he had not, and had he done so, the medical officer would have found some marks on his hand.
The next witness to give evidence about the incident in Edgware Road was Sergeant Wilson. He said that as the van stopped in the junction of Sussex Gardens and Edgware Road he was next to the door and it was quite likely that he opened the door. But others got out before him, which was normal because it is the role of a TSG sergeant to stand back and assess the situation. He said that he approached one youth to ask about their movements and what they were up to. He said that he then became aware of PCs Brown and White having difficulties with Ahmed Hegazy. They were almost at the carrier before Sergeant Wilson became aware and got involved. He heard raised voices but did not know what was said. He said that they had almost got to the carrier when he saw Ahmed Hegazy struggling and swinging his arms about and he thought that he had made an attempt to hit PC Brown. He lunged forwards with his hands in handcuffs. He said that he moved forward intending to assist them. He heard him shout "you're racists" and he lunged forward with his head towards Police Constable Brown. Sergeant Wilson said that he put his hands around the back of Ahmed Hegazy's head, which is a recognised technique to pull someone forward off balance. He assisted in getting him to the floor. Sergeant Wilson thought that it was him pushing them forward that did it, and that he did not realise that he also been tripped by the others; it was a collective effort. Ahmed Hegazy was kicking out. He said that he leaned on his legs to prevent him from doing so.
There was a lot of shouting from the rest of the group, but he could not really say what they said. PC Prout and PC Kitchener were standing behind Sergeant Wilson between him and the group of youths. He referred to his notebook, where he had recorded that evening that "the group of youths ran towards us and I feared we were about to be attacked. He was conscious that he was vulnerable. Ahmed Hegazy was saying "fucking racists" and "look they are going to beat me." Hegazy was more face down than anything else. Otherwise Sergeant Wilson could not have folded his legs behind. He was lying a bit on his left. Sergeant Wilson said that they did not throw him into the van or smash his head into the extinguisher. As far as he recalled Hegazy was partly on his left hand side and partly face down. He said that as he got him on the van he lost control of his legs at one point and he kicked out and caught Sergeant Wilson on the right knee. However Sergeant Wilson did not see him strike out at anybody else. It was not safe to put Ahmed Hegazy in a seat as he was behaving in a violent manner. He was big and struggling, and that anyone of any size is difficult to contain if they are struggling. Sergeant Wilson said that he wanted to leave the scene as soon as possible.
He said that the van could not have moved more than a couple of feet, with the crowd continuing to shout and gesture. One stood out from the crowd and approached very close and with a kind of snarling look on his face, saying "I'll fucking kill you," looking at where I was. He could not say if he saw it or heard it. He was then joined by PC Jones on the footway, and the two of them got hold of Basil Khan with Sergeant Wilson having his right arm and Jones his left arm. Sergeant Wilson said that he told Basil Khan "You have been warned to move away but chose to threaten me instead." He said that Basil Khan said to Jones. "I'm going to stick you as well. I am going to watch you go cold as your blood drains away." Sergeant Wilson went on "I recorded those as his exact words. That is what I believe he said."
However he said that he did not feel comfortable in arresting and cautioning him before putting him on the van, because the crowd were there and he wanted to get away as soon as possible. They had to get him in over Ahmed Hegazy. Basil Khan stepped up, Mr Jones followed him, Sergeant Wilson got back in and slammed the door shut and said "let's go." Sergeant Wilson said that he would have expected Police Constable Jones to conduct the arrest on the way back to the police station. It would be normal to let the police constable make the arrest because the Sergeant's supervision may be needed elsewhere. He said that all he heard Jones say was "he's just fucking hit me." He did not remember reacting. He had no need to intervene at that point.
Ahmed Hegazy was on the floor and PC Kitchener was sitting in the seat behind Sgt Wilson's. There would have been six or seven kit bags, helmets, coats etc on the floor. They should have been kept in the back but that is often where one puts them. He denied ever slapping or abusing Basil Khan, which he said just did not happen. He never recalled Basil Khan sitting in any seat. He knew he was behind him somewhere, and he presumed that Jones had "taken him down". Normally one would put the prisoner on the seat opposite his (i.e. seat E) where PC Onwugbonu was. He presumed that Jones had taken him to the floor. He saw and heard no abuse of prisoners. When asked by the court, he said that he had spoken to a youth about conduct by asking him "what he was up to" which he said "is my way of doing it." He said the reason for the search became superfluous in the light of what then happened.
When cross examined by Ms Gerry he could not remember seeing Hegazy being handcuffed. He accepted that he had said in evidence at the criminal trial that he first heard it at the de-briefing which took place afterwards. He accepted that in his notebook that evening the description of the events were "Suspect/persons concerned: Basil Khan/Ahmed Hegazy. Arrest/process/incident: Threats to kill, handling stolen goods." In other words there was no mention of the assault on a police constable. He could not say if he had heard PC Brown arrest Hegazy inside the carrier for threats to kill. He said that had Hegazy been on his back he could not have restrained him in the way that he did. He used an ankle cross position.
In evidence he said that at that time he did not know who Ahmed Hegazy was, although he knew who Basil Khan was. He accepted to Ms Gerry that his witness statement was untrue at paragraph 39 when it referred to a conversation he later had with PC Onwugbonu where he said this. "I explained to PC Onwugbonu that the detainees were suspected of being local robbers and that their behaviour had to be dealt with."
He was then cross examined by Ms Kaufmann QC. He said that when Basil Khan said "I am going to fucking kill you" his view was that he would arrest him for a breach of Section 4 of the Public Order Act 1986. His concern was about incitement of the crowd. He said he was not really sure about what he was going to arrest him for, but he was not going to arrest him for uttering threats to kill. He had no idea that PC Jones was getting off with him until he got out of the van. Basil Khan was not swinging or kicking out violently but had a sneering aggressive attitude. He was not struggling. Basil Khan addressed his next remark to Jones. His demeanour was just nasty and snarling, with his fists clenched at his side. Sergeant Wilson thought it seemed calculated. Although he had been threatened many times, he said there was a cold nasty way Basil Khan said it, which he found quite frightening. He then said that once he got back into the carrier, he let Basil Khan be, and he did not check him for weapons. He agreed that although he had made a threat to stab the officer, Sergeant Wilson had not warned anybody about that. He said that was because PC Jones knew what he was dealing with and PCs Onwugbonu and Kitchener were also there.
Ms Kaufmann pointed out to him that in fact he sat straight back down. He agreed that it sounded "crazy" that he had not warned anyone. Ms Kaufmann asked Sergeant Wilson about the witness statement he had made for the purposes of a claim in the employment tribunal. In his complaint made in 2010, he described the incident with Basil Khan in the following terms: "As we were pulling away, another of the youths, who I now know to be Basil Khan, then came up to the side of the carrier. He was acting in a threatening manner and I told Steve (White) to stop and Mark (Jones) and I got out. I said to Basil Khan "you have been told to go and you chose to come back and threaten us." He said to us "I am going to stab you and make your blood run away." He said that he took the threat seriously. Ms Kaufmann pointed out that the statement suggested that the threat was made to both of them, and was in different words from those he had stated before. Sergeant Wilson agreed with that. He also agreed that when he was interviewed under caution on 31 March 2008, he said that he could not say whether or not PC Jones had witnessed the words "I will fucking kill you" said to Sergeant Wilson. He said that he did not know whether he had passed the information to PC Jones. He did not know whether he used those specific words or whether he might just have said "he said something" and said that he could not remember. He said that the arrest for "threats to kill" related to the comment he made to the two of them when they were walking him back to the van. He thought that was what PC Jones had arrested him for and not the original comments towards Sergeant Wilson. He told Ms Kaufmann that he did not tell PC Jones to arrest Basil Khan for what he had said to him (Wilson).
He agreed with Ms Kaufmann that it would not have been appropriate to arrest him for uttering threats to kill. He had not told PC Jones to arrest him. He thought that if an offence had been committed it was probably a public order offence. He said it was not his decision to arrest him for uttering a threat to kill and that he would not have arrested him for that. He told Ms Kaufmann, as he had told DPS interview under caution, that on reflection what had been said to PC Jones by Basil Khan was a ridiculous statement.
He reiterated that he had heard someone say "he's just fucking hit me." He could not say if that was before or after he had sat down however he also agreed with Ms Kaufmann that he did nothing when he heard this, because he was dealing with Ahmed Hegazy. He agreed with Ms Kaufmann that he had reacted to what Basil Khan had done outside and was angry when he came up to the carrier and he agreed that he was not going to have him abusing him again. He agreed with Ms Kaufmann that he did not have him searched, and then said "I could hear things happening but was not interested in what they were."
He was aware that Basil Khan was not sitting in the seat F. At that time, he thought everything was under control. Ms Kaufmann pointed out to him that Basil Khan (and of course PC Jones) both said that Basil Khan was complaining that he could not breathe. Sergeant Wilson said that he never heard that. He said he did hear that the person they were dealing with was Basil Khan and he could have heard someone making reference to him owning the Edgware Road. He knew he had read that before. He described himself as being "angry at a rude disrespectful schoolboy." However he denied having a go at him, swearing at him or abusing him. When it was put to him that he had acted like an angry parent and slapped him round the face, he said "absolutely not." It was suggested to him that he was saying that he had heard or seen nothing wrong going on as to protect PC Jones. His answer was "No. This violent young man was not hit deliberately. He swung his elbow and it struck him."
He agreed with Ms Kaufmann that when he heard the words "he's fucking hit me" he did nothing. In answer to the court he agreed that Basil Khan was left in the van at the Police Station for about 20 minutes kneeling in handcuffs. He said that he was being looked after by other officers, and that that was the assessment made by whoever was dealing with him.
The next witness to deal with the events on the Edgware Road was PC Giles Edward Kitchener. He had been with the TSG for about two weeks having done some training beforehand. They operated a "buddy" system and PC White was his buddy. He said that when the van pulled up at Sussex Gardens he could see Ahmed Hegazy and recognised him from the earlier incident. He said he was putting his hands in his waistband and looked to be concealing something down his trousers. He was aware from the briefings he had read of the drug problems in the area, which was "part of my decision making." He approached Ahmed (the other Ahmed not Ahmed Hegazy).It was a stop and search but it was a very civil and polite stop. It was the polar opposite from how Ahmed Hegazy was getting on with PC Brown and PC White. He said that he could see that Ahmed Hegazy was hunched up and leaning forward, and he heard him call PC Brown "a fat cunt". He did not remember PC Brown's response, but he seemed surprised. Ahmed Hegazy said "if you search me I'll draw blood".
PC Brown put Ahmed Hegazy in handcuffs and then PCs Brown and White took him to the van. He said that Ahmed Hegazy was cooperative at first but as they got closer to the carrier he was moving his arms and shoulders and got more violent. He saw the officers take Ahmed Hegazy to the ground. One of the crowd went round to his unprotected rear. That is when he finished his stop and search of Ahmed and went over and stood facing the youths with PC Prout. He said that three things caught his eye: first one person poked PC Prout in the chest: secondly he saw a number of mobile phones come out which told him that they were being filmed: and third he was told repeatedly that "Allah will judge you."
He then told the crowd to disperse and go home. PC Prout got into the front seat and he could see Ahmed Hegazy inside the sliding door. He went to the back door. Having got into the van and the van just having set off, he saw a pair of hands come up to the Sergeant's window and make a V sign with both hands. He had not put this in his notebook because it was not part of the evidence for the offences in question. He agreed that he had said in interview to the DPS that what Basil Khan had done was "had his fingers up at the window and was shouting at us." He also said that he did not know why Ahmed Hegazy had been brought on the carrier. He explained this by saying that he had been panicked by the DPS interview which had been his first. It was not in his notebook. His training was "if it's not written down it didn't happen" and he tried clumsily to retract it.
When Basil Khan was brought on to the carrier Sergeant Wilson said "arrest him." He stood up from his seat (H and I) but could not get out. Basil Khan was in front of PC Jones going to the back of the bus. He then went on "I was looking at the crowd outside. I heard Jones say "he's just fucking hit me." I looked straight up. I saw Basil Khan's elbow raised and PC Jones' head go back. I was under no illusions that he had just been hit. This happened by the Sergeant's seat (G). PC Jones was level with the Sergeant's and Basil Khan was level with the back of the seat. I did not see Sergeant Wilson slap Basil Khan."
He said that then the van moved off. PC Jones took hold of Basil Khan. They may have tripped over Ahmed Hegazy's legs, and they fell on to the bags at the back. He said he never heard PC Brown offer a one to one fight with Ahmed Hegazy. He said nothing racist and heard nothing racist and had he done so he would have raised it with the Sergeant. He said PC Jones and PC Basil Khan were lying on the bags, which were of course immediately to his right as he was in seats H and I. He said there was nothing he could have done to assist PC Jones. PC Jones then brought Basil Khan up to a kneeling position and PC Jones sat down opposite. PC Kitchener said that he felt that it was justified at the time, as PC Jones had arrested Basil Khan at this point for threats to kill and assaults on the police. As he was under arrest and Basil Khan had not yet been searched PC Kitchener thought it was justified. He did not see Jones kick or punch Basil Khan. He said that on the way back to the Police Station Jones was able to search Basil Khan and handed items to PC Kitchener, who found Basil Khan's driving licence. When he saw the name written down (at first he said when he saw "the font") it recalled the memory of the Metbats briefing he had read. He then said "Isn't this the Basil Khan who goes around saying that he owns the Edgware Road?" PC Kitchener said this about that statement of his "it was an announcement – to see if anybody else had anything to remember."
He was cross examined by Ms Gerry. He said that he did hear Ahmed Hegazy say "fat cunt" and "if you search me I'll draw blood." He had no recollection of Ahmed Hegazy being arrested for making threats to kill, although his witness statement at paragraph 46 said that he did. He confirmed in the witness box that he did not hear it. He said it was an error in his witness statement and he must have thought at the time that he had heard it. He did not hear Ahmed Hegazy shout "I will kill you" and he did not see him try to hit PC Brown. Hegazy was not crying in pain. He was adamant that Brown did not offer to fight him.
When cross examined by Ms Kaufmann QC he said that he saw the man who was arrested (i.e. Basil Khan) bang on the window. He thought he was going to be arrested for his hand gestures. He accepted that in his notebook, written the same night, he had not referred to Basil Khan saying anything. He said that he heard nothing being said outside the carrier or being said by Basil Khan. When asked about his making of notes, he agreed that what the individual had done and the reasons for his arrest were important parts of the narrative. He said that the only things that he had seen which would have justified an arrest were Basil Khan making V signs.
He was asked about the entry in his notebook which reads as follows: "I was looking out of the window at the group still loitering at the window and as I looked back I saw PC Jones recoil as if he had been struck and wince in momentary pain. His head rocked back and at that time he was following Basil Khan through the carrier. PC Jones said "he's just fucking hit me!"" He agreed that it made no reference to Basil Khan using his elbow. He said that was an omission and that it had happened. He was asked about his interview under caution on 26 March 2008, where he described Basil Khan's arrest. He said that he had assumed that Basil Khan was under arrest for assaulting a police officer because PC Jones has shouted "he's just fucking hit me." He said then that that had happened as Basil Khan got on the carrier, and as he had written in his notebook, he saw PC Jones' head go back as if he had been struck and he then said "he's just fucking hit me." He agreed that he had not referred to seeing the use of the elbow, but insisted that he had actually done so.
He was then asked about what happened between Basil Khan and PC Jones at the rear of the carrier. He said that they had fallen into the area between the seats having tripped over Ahmed Hegazy's legs. They then landed on the bags at the back of the carrier. It was pointed out to him that in his notebook he said "PC Jones then took Basil to the only available space on the carrier which was at the back. PC Jones had then handcuffed Basil Khan and arrested him for threatening to kill him and assault on police. " As was pointed out to him, the only available seat was seat F. However PC Kitchener said that he had not been taken to a seat. It was then pointed out to him that he had given a very different account in his interview under caution. In that interview in March 2008, he said that Basil Khan had got into the back seat on the carrier (i.e. seat F) and was sitting down. He could not recall whether he had been sitting down for the entire journey, but when asked for further details said this "He couldn't have walked anywhere, ……… .no I don't recall that he moved at all." He was asked in the interview about where PC Jones had gone to, and said that PC Jones could have been sitting next to himself (i.e. on the other side of the aisle). He did not recall whether or not he did so.
He was then asked this question in the interview "you have seen the nature of the allegations made by Basil Khan specifically, in that PC Jones grabbed him around the neck, dragged him, if you like, to the back of the carrier where he had organised some kit bags which he could land on and punched and kicked him and kneed him in the face and body; you have seen that?" Having said that he had seen the allegation, he said that that allegation was not true, and that nothing of that nature occurred. He said that he was sitting opposite Basil Khan for the entire journey back to Paddington, and that he did not recall Basil Khan moving. He said that Basil Khan did not shout in pain and did not clap his hands because he could not breathe. He said "that didn't happen, and I certainly don't recall anything like it, even clapping his hands if you misunderstood or misheard something, nothing like that happened."
He was asked about how he could have said all of those things in interview when his evidence to the court was that Basil Khan had not been sitting down but had been put on the floor. He said this "I got myself in a complete muddle. I said things that were not true. I made a tremendous mistake." He said that nothing had happened in the back of the van. He also said that Sergeant Wilson had never slapped Basil Khan in the face, and had not been in the seat where he was able to do so. He also said that Jones was perched on his seat. Basil Khan was handcuffed behind him before Jones got up off him and brought him up to the kneeling position. It was appropriate for him to remain at the back of the van on the floor. However he told the court in answer to its question that it would have been better to let him sit down.
He said that after they had arrived at the police station yard, and Basil Khan had been patted down, he was made to kneel again in handcuffs and left there for 20 minutes. At the police station he did not say anything about having a child in custody. He did not know his age. He had thought he was older from his age and demeanour.
In cross examination by Mr Beggs QC he said that he would make notes of the evidence where he had to describe any use of force by him or actions he had undertaken, or events he had witnessed. He was then asked about how long it took from Basil Khan being brought on to the bus and being on the floor with PC Jones, and he said that was a matter of seconds. He said that there was nothing for him to cover up, and the evidence was what he had sworn was the truth.
The evidence of PC Simon Niall Prout was that upon arrival at the Sussex Gardens junction with Edgware Road, as he got out of the carrier (he being the operator in the passenger seat) he became aware that Sergeant Wilson was talking to a male next to the railings. He took over, as it was not usual for a Sergeant to do a stop. He said that to begin with the person that he was talking to was affable in the extreme. He became aware of a commotion to his right with raised voices. He looked over and saw a large male – Ahmed Hegazy– cuffed in a front stack position. He saw him lunge towards PC Brown and his head snap back. He was unable to say if that was because the strike had made contact or because PC Brown was pulling his head out of the way. He thought that PC White was also with PC Brown. He said that events turned into a bit of a fracas. Brown and White were attempting to take Hegazy in the direction of the police carrier. He said that the demeanour of the group had now become very confrontational. He contrasted that with the demeanour of the man to whom he had been speaking which was anything but confrontational. He said that after the incident between Ahmed Hegazy and PC Brown, Hegazy was put to the floor. PC Prout moved across with PC Brown and PC White to his back so that he was creating a barrier between them and the group. He said that there were now gestures being made at the other officers and at PC Prout. He was told repeatedly by one male that Allah would judge him. On two occasions he said that he had to push a male back to keep a safe distance between himself and his colleagues who were behind him. He said that he was saying "Stay back" and "Don't get involved". He had a recollection that several people were holding up mobile phones, which he presumed was to film them.
He then described getting into the van, being the last person to get onto the carrier. He could hear the sounds of a struggle behind him. However there was nothing untoward as they began to pull away. The van stopped almost immediately and he heard the door slide open. He heard PC Jones's voice and he was aware that he was detaining somebody. He heard nothing abusive. In his notebook written that evening he recorded the following: "As I turned in the seat I saw he was detaining a …youth whom I now know as Basil Khan. He was placed on the carrier and moved to a seat at the rear; I became aware that he had been arrested for a public order offence. I then continued to (illegible) my radio and to contact the local custody. As I did so I heard struggling from the rear of the carrier and heard PC Jones saying "stop struggling, sit still!"
When he was cross examined by Ms Gerry on behalf of Ahmed Hegazy he agreed that his notebook did not record him saying that PC Brown's head snapped back as a result of any action by Ahmed Hegazy. He did remember Hegazy saying "they are all racists" He agreed with Ms Gerry that if he had heard any threats to kill or Hegazy calling Brown a cunt, then he would have noted it in his notebook. He said he did not hear that happen. Having looked at his notebook and then at his interview under caution, he agreed that he was not told what anyone had been arrested for. He said that it would not have been proper to put in his notebook what others said about things that he had not remembered seeing or hearing.
He was cross examined by Ms Kaufmann QC. He said that he had assumed that Basil Khan was put in a seat, but that he had heard the words "sit still".
In re-examination he said that he had never seen PC Jones lose control – i.e. act improperly or illegally. He told the court that the log he had completed as the operator of the carrier that day showed that he knew of Ahmed Hegazy's arrest but not Basil Khan's.
K Events at the Police Station
We now come to the evidence about what happened when the carrier returned to Paddington Green Police Station.
There is a substantial amount of CCTV film which was taken at Paddington Green Police Station that evening. It is convenient to deal with that first. The parties very usefully agreed an index to the footage. At 17.47.54 the TSG carrier entered the rear yard of Paddington Green Police Station. At 17.48 Police Constable Prout left the carrier and entered the custody suite. At 17.49, Ahmed Hegazy was brought into the custody suite by PC White and PC Brown. At 17.50 a strip search was carried out of Ahmed Hegazy. At 17.51.20 PC Jones entered the custody suite, and at 17.54.08 PC Brown and PC Jones spoke together outside the cell where Ahmed Hegazy was being searched.
At 17.56.38 onwards Police Constable Brown was booking in Ahmed Hegazy at the Custody Sergeant's desk. Hegazy was at the front desk until 18.06. At 18.09.56 Basil Khan was brought into the custody suite from the carrier by PC Jones followed by PC Kitchener. At 18.10.25 and thereafter Basil Khan was strip searched in a cell. Between 18.20 and 18.32.44 Basil Khan was at the custody desk with PC Jones and other officers. He was returned to the cells at 18.47.
At 20.12 lay visitors visited the police station. At 20.36.59 and 20.37.51 respectively PC Onwugbonu visited Basil Khan's cell and Ahmed Hegazy's cell. There is no evidence that he spoke to them.
I turn now to the evidence of the custody sergeant Police Sergeant (now Inspector) Richard Watkinson, called by the Defendant Commissioner. He said in his evidence that, as each of the Claimants Ahmed Hegazy and then Basil Khan were brought in, he was given a brief overview of the reasons for their arrest. Before they were brought in he was also told by PC Prout that there had been a public order incident involving two individuals. He had said to Mr Prout he could bring them in if they were going to behave. Prout said that they probably would not, as one had threatened to kill an officer and had had "a pretty good go at doing so." Mr Watkinson said that they should be brought in for a strip search. When Hegazy was brought in he was taken straight away to the strip search cell to be searched. When he was brought in he recorded on the custody record what he had been told as the reason for arrest. They were "threats to kill; abusive towards police, stopped and spoken to, threaten to draw officer's blood and assaulted several." That account was given to him by PC Brown.
Sergeant Watkinson was later informed that Hegazy had been arrested for being in possession of a stolen telephone. I shall set out in due course the evidence relied on as justifying that arrest. Ahmed Hegazy's detention was authorised. So far as Basil Khan is concerned the court heard evidence not only of what was in the custody record but also a transcript of the audio from the CCTV film. At 18.20 PC Jones brought Basil Khan to the desk and said that he had been arrested for threats to kill. He said "The circumstances are a stop and search by (inaudible). He was sort of on the periphery but mouthing off. Dealt with his friends and then the other big guy started kicking off so he was taken to the carrier but in the meantime I am just sort of in the van. The crowd that he was with, amongst the crowd were members of the public that (inaudible). He threatened to stab up a number of tourists. I told him to calm his tone down and he turned to me and said "I'll stab you up and watch you go cold." I then said "I am arresting you for threats to kill. Get on the carrier" and he turned around and swiped me in the face and ultimately he was arrested for threats to kill and assaulting police." (Various "ers" omitted.) The record made on the custody form by Sergeant Watkinson was "threats to kill and assault; crowd gathered around police officers, threaten to stab up public, told officer he would stab him up and watch him go cold, head butted officer."
He stated that he had authorised the strip search of Basil Khan not realising that he was 16. He agreed with Ms Kaufmann in cross examination that the information he had before him was inaccurate and did not justify the strip search. He said he had made a mistake and he would do things differently now. He confirmed that he had been told that Basil Khan had threatened to stab tourists.
So far as Ahmed Hegazy's evidence is concerned, he said that once the van had arrived at Paddington Green Station the officers in the van were talking about what they would arrest him for, but mainly what they would arrest Basil Khan for. He did not remember any more about that conversation. He was taken into the police station in handcuffs. He was with the officer he called officer 1 i.e. PC Brown whom he said was now trying to act more nicely and saying to him "don't worry." He said he was taken straight to a cell and strip searched. One said something like "if you move, I will take you down." He was required to remove all of his clothes, though he was not entirely naked at any time. Nothing was found upon him. He then went back to the custody sergeant's desk. When asked if he wanted a solicitor he had said yes. The sergeant said that there had been a phone call from his cousin and was told that a Millie Guest was upstairs who worked for a firm of solicitors. He spoke to her by telephone and decided to use her firm's services, which he told the custody sergeant. He said at some point in the evening he was rearrested for theft of a phone. Later another officer came into the cell in a group and said that they were independent of the police. He refused to speak to them because he did not trust any of them (these were the lay visitors). He also saw a doctor and his solicitor.
He could not remember how long it was before he was given bail. His mother and sister were waiting outside. They went to the hospital for a check up as he was in a lot of pain. There was pain in one of his legs. He went home. No one told him at the police station that a police officer had said that he had been mistreated. He was told a few weeks later by his solicitor Millie Guest.
When interviewed under caution at just after 2.00 am the following morning, Ahmed Hegazy had given an account very similar to that which he gave in evidence, albeit with more detail as it was the following morning. He was bailed. Thereafter he was contacted by the DPS. In due course he made a complaint on 19 July 2007. He said that in this incident he had a lump on his leg, a scratch and bruise on his neck, and a scratch and bruise near his ear. He had marks around his wrist and a few marks around his body but he could not remember exactly where they were. On the evening he was arrested he was very confused, and he could not understand what had happened. Thereafter he could not sleep, and was quite jumpy, so that when he was sleeping a noise would disturb him. He said that he found the Crown Court trial unpleasant because it felt as if he was getting tried. (I shall set out in due course what happened at the Crown Court trial in so far as is relevant).
He was cross examined by Mr Hardy QC. He agreed that he could sit down normally when he was in the station and walk around, as could be seen on the CCTV. He also agreed that he was moving freely when he left custody. He denied putting on a show to his mother and sister when they came to the police station to collect him. It was suggested to him (and denied by him) that he had put on a "theatrical show" and "a show for your mother like an Italian footballer."
Basil Khan gave evidence that after the van had arrived at the police station Ahmed Hegazy was taken out. PC Jones came and told Basil Khan to kneel down with his hands (handcuffed) behind his back facing the back door. He was left there for 15-20 minutes. PC Jones kept coming back every 3-4 minutes. He said that he would turn around and Jones would tell him to turn back round. PC Jones eventually took him off the van. There were police officers talking outside the van amongst themselves. When the back door opened PC Jones told him that he was under arrest for threats to kill and he could not say what else. It was a big shock for him to be told that he was under arrest for threats to kill; it was too much to handle. He was then strip searched. He was uncomfortable. He was completely naked at the end. He was told to squat at the end three times when naked. He felt humiliated. His recollection was not that clear about what happened in the police station. He did not remember seeing the doctor, being rearrested for possession of a stolen mobile phone, or pressing the buzzer and asking for information.
Basil Khan said that he was released the following morning. He said that in the weeks following he felt scared, terrified and had panic attacks. He said that if he saw a police van he would go into a shop and be where members of the public were. He thought about it every day.
Other evidence about events at the Police Station
There was other agreed evidence about the arrival of Basil Khan at the police station. PC Everett made a statement to the DPS on 27th June 2007. He described how he, and another TSG officer, were in company with two other officers (PC McKay and PC Allen) when they saw the carrier in question adjacent to the entrance to the custody suite. Sergeant Wilson and PC Jones were standing at the side door and PC Onwugbonu and PC Prout were standing near the front of the carrier. After he had been informed that two males had been arrested for public order offences he looked in the rear of the carrier and saw someone he described as the prisoner kneeling within the carrier near the rear door, and who was handcuffed. After he has spoken to a group of youths outside who were concerned about two of their friends who had been arrested, he went and looked again at the person in the carrier, who was still in the same position as before – i.e. kneeling on the floor and handcuffed.
PC McKay described in a statement of 20 June 2007 seeing the carrier. He spoke to Sergeant Wilson who was standing outside it and said that two youths had been arrested for "public order." He went to the side door of the vehicle where PC Jones was standing. Inside he could see PC Kitchener sitting on the back double seat and he was then able to see a male on his knees facing the rear doors whom he thought was handcuffed to the rear.
PC Onwugbonu described what happened at the rear of the police station. He said: "We stopped at the back gate for a few minutes whilst waiting for cell space and PC Jones was still punching and driving his knees into Basil, shouting swearing and basically abusing him. I looked at Sergeant Wilson using hand signals asking him to stop this but he ignored my request. There was cell space at Paddington and we drove into the yard. PC Brown and PC White took Ahmed into custody whilst we remained on the carrier with Basil and PC Jones carried on again punching and punching and punching Basil several times. I was then approached by Sergeant Wilson in the yard. He'd been informed that I was not happy with what went on and I told him "I'm not impressed with what went on, that was way out of line". He said "They can't go around abusing police officers." He then began to tell me that they were well known robbers. I informed him that I may have to speak to the governor about this and Sergeant Wilson said "you can speak to the governor if you are not happy."
PC Prout said that upon return to the police station, after Hegazy had been taken in, PC Onwugbonu was standing near the front of the carrier and looked upset. PC Prout said to him "What's up, what's the problem?" He replied "That's not right, he was too rough with him." The conversation was then interrupted. At a later stage PC Onwugbonu had said to PC Prout "That's not right, what should I do about it?" PC Prout gave him the advice he would give anyone and said that if he had concerns they should be reported.
Sergeant Wilson said that at the police station, while Basil Khan was still in the carrier and Sergeant Wilson was sitting in the carrier, he became aware of PC Onwugbonu standing there rubbing his head. He said that he approached him and a short conversation ensued. Sergeant Wilson gave evidence that he said something like "Amechi you don't look happy what's wrong?" He said something like "you (or we or he) should not have treated him like that" or an answer along those lines. Sergeant Wilson said to the court in evidence: "If I had treated him differently, things may not have escalated. I was quite dismissive. He said something like "If you are not going to do anything about it, I will take it somewhere else." I said "Do what you like" because I was irritated. I thought it was unjustified and that he was criticising me." He said that he then went straight upstairs to the Sergeant's office. He said that PC Onwugbonu made his notes separately. He went to look for him to ask why he was not with the others. He said something like "My notes will not do anyone any favours." Sergeant Wilson said that he thought that he was saying that they had used too much force.
He told his senior officer, Inspector Banks, that PC Onwugbonu would contact him. He told the court he had been dismissive because he knew that nothing had happened. However he agreed that he did not see what had happened between Jones and Basil Khan, but said that from his demeanour he knew nothing had happened on the van.
Inspector Banks' evidence, dated 31 July 2007, was put before the court as hearsay evidence. He got a call at 8pm from Sergeant Wilson to say that his carrier had arrested two persons earlier and that they had been taken to Paddington Green Police Station, having been arrested for threats to kill. He went on "He also informed me that PC Onwugbonu might speak to me as the officer had spoken to Sergeant Wilson about his concerns about the manner in which the youths had been dealt with on arrest. I asked if there were any incidents upon arrest that I needed to be aware of and was assured by Sergeant Wilson all was carried out correctly. Shortly after this call I received another call on my work mobile phone from PC Onwugbonu. He stated that he wanted to speak to me about the arrest of two males on Edgware Road earlier in the evening."
Inspector Banks then went to Paddington Green Police Station from Lambeth. He was met by PC Onwugbonu who asked to have a word in private with him. PC Onwugbonu appeared apprehensive and looked worried and stated that he had witnessed officers whom he believed had used excessive force during the arrest of the two males on the Edgware Road. Inspector Banks asked him to give an account of what had happened. He described PC Jones bringing a youth into the carrier and making him cry (this would be Omar Mohidin). He then referred to another youth being placed on the floor of the carrier (i.e. Ahmed Hegazy). He stated that he thought that the officers had used excessive force on him although he did not elaborate what had occurred or who used the force….. He stated that the first youth was let go with a warning about his behaviour from PC Jones……..Just as they were pulling away, Police Sergeant Wilson asked them to stop and he got off and brought another youth onto the carrier. He stated that he saw Sergeant Wilson grab the youth by the neck and slap him on the face. PC Jones then asked Sergeant Wilson what the youth had done and then he hit the youth. PC (Onwugbonu) then went on to describe that he saw PC (Jones) move some of the public order kit bags at the rear of the carrier towards the rear doors. He then saw PC (Jones) place the youth Sergeant Wilson had brought into the carrier in a neck hold and then immediately fall backwards with him (so that the officer landed on the kit bags) (and) described how the youth was screaming that he could not breathe. He then went on to say that he saw PC (Jones) hit and kick this youth several times. ….for no apparent reason. (He) appeared to be visibly upset as he recounted this incident to me. ….. he also stated that the carrier stopped prior to the custody suite area where again PC (Jones) hit one of the youths"
Inspector Banks telephoned his Chief Inspector to inform him what he had been told. As a result DPS were contacted. Later that evening he was provided with a notebook from each of the officers except PC Onwugbonu.
The officers Sergeant Wilson, PC White, PC Kitchener, PC Brown and PC Jones all sat together taking their notes. At the time of these events, no criticism can be made of officers comparing notes while drawing up their notebooks. PC Prout was in the same room but sat apart from the other officers, albeit at the same table. When he was interviewed under caution in March 2008 he said that PC Onwugbonu had called out to him that he should not make up his notes with the other officers. PC Prout said to him that he should not worry because he was not going to put anything in his notes that he couldn't swear to, but that he had seen Hegazy strike out at PC Brown. He considered that it was not inappropriate for him to be with the other officers or near them when making notes about an incident that he had witnessed. He said that he sat at the extreme end of the table, and that during that process he felt uncomfortable and ostracised. He did not seek to have his memory refreshed by anybody. He told Ms Kaufmann that he knew or believed that something had happened, and wanted to be as scrupulous as possible about writing his notes. He said that he had stayed out of the way of the others afterwards as he felt that something had happened. Meanwhile PC Onwugbonu made his notes, to which I have already referred, and also began typing a recollection of the incident to which I have already referred.
Ms Millie Guest, who was an accredited police station representative, was acting for Ahmed Hegazy at the police station on 1 June 2007. She had made a statement, and was to have been called as a witness for Basil Khan, but in the event her statement was agreed. She sought to see Hegazy at 18.25 pm but was told to wait. She was told at 19.10 pm the officers had still to complete their notes. She was told to get photographic identification so she had to leave the police station. She telephoned again at 20.15 and was told that the notes had not yet been handed in. She returned to the police station at 21.05 but was told that she could not enter the custody suite as they were too busy and the officers were still completing their notes. She again contacted the custody suite at 21.38 and said that she wished to see her client. At the front desk at 21.50 she asked to see the Inspector concerning the delays. She was permitted to enter the custody suite at 22.08. She asked for disclosure at 22.25 and was told that the officers had still not completed their notes. At 22.35 she spoke to Ahmed Hegazy. A review was carried out by Inspector Cruickshank at 23.45 and she registered her concern as six hours had passed since her client's arrest. She was again informed that the delay was because of the writing up of the notes. In fact all the stamped notebooks had been handed in by 10pm.
She had a consultation with Hegazy at 00.37. Her notes record that Hegazy had complained that he had been assaulted by the police and she recorded his injuries as "reddening to his throat, three scratches on the right side of his forehead and over the eyebrows; red marks (slight swelling) to right temple, scratch on back, slight swelling to left wrist and marks."
She advised him not to lodge a formal complaint about his treatment while still in custody, which was her standard practice advice. She spoke to the DPS at 00.45, but made no note of what was said. At 02.06 she represented Hegazy at his interview. She had no contact at all that she could recall with Basil Khan.
The mobile telephones issue
Both Hegazy and Basil Khan were in possession of mobile telephones. When PC White checked the list of mobile phones whose loss was known to the Police, they were shown. Each was arrested for theft of a mobile telephone. But the evidence showed that the list was of telephones reported as "lost or stolen." Ms Gerry rightly pointed out that the information in the hands of the police was equivocal on whether either telephone had been stolen.
Even more significantly, neither of the listed owners of the telephones wanted their return. It became quite obvious that the system involves a considerable risk of abuse. If someone wants to make an insurance claim, and reports the telephone as "lost or stolen" then they may recover compensation, even though the telephone has been sold. No-one can know what happened here, but the fact that the listed owners took no steps to recover the supposed stolen telephones suggests strongly that they were certainly not stolen, and probably not lost either.
I have a great deal of sympathy with the position of the Police, who must do the best they can on the evidence they have. But in any event, there is no suggestion that either Ahmed Hegazy or Basil Khan would have been kept in custody as a result of the mobile phone allegation.
The visit to Basil Khan's cell by Inspector Cruickshank
This is a very important piece of evidence. The CCTV evidence shows that a telephone call was received by Inspector Cruickshank sometime after midnight. He was on duty at the station in uniform. Inspector Cruickshank's evidence was that he had received a telephone call from an Inspector Belej of the DPS. As a result he went to speak to Basil Khan. Basil Khan by this stage had made no complaint about what had happened to him. There is a transcript, which is not disputed, albeit not formally agreed. The conversation went as follows, insofar as it is relevant:
Inspector Cruickshank: "Basil, still awake? …………..The sergeant is just here to be a witness to this, did anything happen to you in the back of that police van tonight?
Inspector Cruickshank: "What?"
Basil Khan: "I got beaten."
Inspector Cruickshank: "Tell me what happened?"
Basil Khan: "First the Sergeant came up to me and said "where's your bottles" right cos you know how it is yeah."
Inspector Cruickshank: "That was the Sergeant?"
Basil Khan: "He slapped me across my face."
Sergeant: "And then?"
Basil Khan: "I remember that name was PC Jones. PC Jones came up the back and he strangled me."
Inspector Cruickshank: "Who did, PC Jones?"
Basil Khan: "yeah, and I was strangled yeah and he pushed my hand back so both my arms were unfolded, yeah man it was then after he told me to get back in the chair then he grabbed me again. I don't know how to describe …I don't know if you will ever believe me but I was telling you what happened."
(pause)
Inspector Cruickshank: "If I didn't believe you I wouldn't be here Basil. Ask the Sergeant, we have a witness that sees you strangled in the (inaudible) also I am recording all you tell me for the purpose of once you are in the van."
Basil Khan: "I was standing there and then… he was doing that to my head like."
Inspector Cruickshank: "Who is this, PC Jones?"
Basil Khan: "PC Jones did it like three times to me. Then I started crying. …..
Basil Khan: "…PC Jones came up to me and started kneeing again over here and hitting me on my head I was just covering my face hitting, hitting me so then afterwards (it felt like it was so bad) I really felt just like crying….."
Inspector Cruickshank said in evidence that he spoke to Basil Khan because Inspector Belej had spoken to him. At that point Basil Khan had not made a complaint of any injury or indeed of anything. Inspector Cruickshank was asked by Mr Hardy QC if it was possible that he had told Basil Khan anything which Inspector Belej had told him. He said that he may have done so inadvertently but he said that the transcript was accurate. It will be seen from the transcript that Inspector Cruickshank asked an open question without suggesting to Basil Khan what his answer should be.
Other evidence was called by the Third to Sixth Parties. I shall deal with that called on the similar fact issues separately. I shall deal with this evidence by topic.
L Hearsay Evidence called about the Claimants
Sergeant Burger, in a witness statement of 24th September 2009, described the incident involving Omar Mohidin at the Israeli Embassy to which I have already referred. It was not based on any notes.
PC Ryan Davis, in a witness statement of 15th October 2009, described stopping Basil Khan on 5th July 2007. He says that Basil Khan said that he really liked PC Jones, and made a money sign with his hands.
PC Luke Thomas had written an undated witness statement. It contained a series of unsubstantiated allegations about Ahmed Hegazy and Basil Khan, coupled with speculative opinion. It is a matter of astonishment to the Court that anyone would think it admissible, and I have disregarded it.
A PC Brown (whose other names are unknown) gave a witness statement on 5th October 2009 about an incident in April 2009 when he spoke to Basil Khan. Basil Khan said "I can do a lot of damage to police officers, haven't you heard about me?" He said that he had beaten up six officers in the back of a van.
PC Chris Arno made a statement on 4th December 2007. He came across a group which included Basil Khan. Basil Khan advised one of his colleagues not to be aggressive. He told PC Arno that PC Jones had beaten him up in a carrier like the one PC Arno was working on. PC Arno said that he defused the situation by saying that there were lots of people called Jones in the service.
M Similar Fact Evidence
For Ahmed Hegazy, Ms Gerry adduced hearsay evidence relating to an incident involving a Mr Barnes. The evidence consisted of a complaint form filed by email on 26th June 2007 by Mr Barnes, relating to an incident about one hour earlier on the same date. In it, Mr Barnes alleged that PC Brown and another officer had stopped his car in Kennington Road. The other officer ordered him out of the car, but he refused because he had not been told the reason. The other officer threatened to break the windscreen. PC Brown told him that he had been stopped because the window tints of the car were illegal. His partner and child were also in the car. When he got out, he said that he was seized by his wrists and arms and searched. He was then handcuffed by PC Brown, who told him that he was being detained under the Public Order Act. He was also told that his description fitted that of a sexual predator. Barnes said that he was exasperated, and said that PC Brown said "I've had enough of this nigger." After a PNC check he was released. He stated that at a later stage he attended the Police Station, where both officers confronted him. He was threatened by the officer and told that if he did not shut up, they would arrest him.
PC Brown's account in his witness statement is that he and the other officer were in a carrier when they saw a car being driven badly. He said that "he clearly wanted to attract our attention…..he forced his way into a queue of traffic and made it very difficult for us not to stop him, as public perception would have been damaged." PC Brown said that he went to assist the other officer "with huge reluctance." He sat and watched the man, feeling physically sick "as I contemplated my career as a police officer, and realising that I would never have the confidence to deal with this type of stop again." He said that the complaints were fictitious.
When the IPCC investigated the complaint, Mr Barnes failed to attend a meeting with DPS investigators, despite reminders. On 10th December 2007 he told DPS that he was working nights and was involved with childcare issues, and no longer wished to pursue the complaint.
For that reason, whatever views one might have about PC Brown's rather emotional account, in my judgement it is impossible to give this complaint any weight. I express no views on its veracity, but shall discount it entirely.
For Omar Mohidin and Basil Khan, Ms Kaufmann relied on two incidents. The first related to a man called Babar Ahmad. Ahmed Hegazy also relied on it. Babar Ahmad was suspected of offences under the Terrorism Act. Since the incident in question relating to him (2nd December 2003) he has been extradited to the USA, where he was convicted of terrorism offences and has since served a prison sentence.
A hearsay notice was served, relating to a witness statement made by him. On 2nd December 2003, a number of police officers entered the house he shared with his wife. He said that when the Police entered their bedroom, he was standing with his arms in the air and his feet apart, to show that he was not hiding anything. He was told to "get down, get down, fucking get down!" He was grabbed and his head forced into the window. He says that he was sworn at, kicked, kneed and punched. He was repeatedly sworn at. He was struck repeatedly when on the floor, and his testicles were grabbed. He was arrested and handcuffed. One officer stamped on his bare feet.
He was taken downstairs and forced, while in handcuffs, to adopt a praying position. His private parts were forcibly searched.
He was placed in the police van. He was made to lie on the floor. He was struck repeatedly in the back and left kidney. An officer pressed his boot down on his crossed ankles, while twisting his cuffs and causing him pain. An officer, whom it is said was PC Jones, was asking him about where he was born. Having hit him, he then got him in a choke hold, while pulling him upwards as the other officer still had hold of his ankles. After that he put him in another headlock. His evidence about what happened in the house was supported by his wife Uzma Qureshi.
The officers involved denied any improper conduct.
The IPCC investigated the matter and took action against one of the officers (not PC Jones), who had misconduct charges against him dismissed in April 2005. However in June 2005 Mr Ahmad issued proceedings against the Metropolitan Police Commissioner. The trial started before Holroyde J in March 2009. During the trial, the Defendant Metropolitan Police Commissioner decided to make a full admission of liability, which resulted in compensation being paid to Babar Ahmad. The decision was then made to prosecute the officers involved, including PC Mark Jones.
Jones and three other officers stood trial at Southwark Crown Court in May 2011. Shortly before the trial was due to start there was disclosed a recording made within the house by the security services. It did not support Babar Ahmad's account of what had happened in the house. It was of course silent on what happened in the van.
It is plain that whatever happened in Babar Ahmad's house and in the van outside is hotly disputed. I am not prepared to make any findings about the matter when I have not heard any of the significant evidence, let alone heard it tested under cross examination. I am also reluctant to make conclusions about propensity relevant to an incident of the type I am dealing with from an incident of a major raid on the home of a suspected terrorist.
So far as Ahmed Hegazy is concerned, he had little interaction with PC Jones in the incident I am dealing with, so this evidence advances his case no further. In the case of Omar Mohidin and Basil Khan, as will become apparent, I have formed an adverse view of PC Jones in any event. In doing so, I have not placed any weight at all on the Babar Ahmad incident.
The other incident relied on by Ms Kaufmann related to an incident in the Tottenham Court Road on 7th March 2007 involving a Mr Mohammed El-Kholti. He complained on 7th March 2007 of an incident when he had been in Tottenham Court Road at about 1.20 am, and was, he said, asking passers by and then a group of workmen where a snooker club was which he wished to visit. A police van approached, of which the driver was PC Jones, who vaulted a fence or barrier and approached him. He said that a female officer also swore at him, calling him a "cunt." He said that he was grabbed by PC Jones and pulled towards the door of the Police Van, where PC Jones pushed him in. Inside the van PC Jones told him to get on his knees. He refused, whereupon PC Jones grabbed him by the neck and was swearing at him. He was arguing that PC Jones had no right to act as he was doing. PC Jones than sprayed him with CS spray, pulled open the door and ejected him from the van. He was then handcuffed and resisted. He was put back in the van.
On the way to the Police Station, PC Jones said that El-Kholti was being detained for a drugs search. At the police station PC Jones said that he had arrested him for obstructing the Police. There was medical evidence from a Dr Sandor that El-Kholti had some abrasions and smelled of CS spray. It appeared that pressure had been applied to his neck. He also gave evidence that at a later stage El-Kholti was found banging his head against his cell door.
PC Jones in his witness statement said that he was driving with two other officers, PC Kelly Bond-Vaughan and PC Trevor Mullen. As they did so, they heard whistles, which is a sign drug dealers give to warn of the presence of the Police. He sought to detain El-Kholti for a drugs search, but he refused. After El-Kholti had repeatedly refused to be searched, PC Jones took hold of him and put him in the van. El-Kholti was very aggressive and lunged at him. PC Jones, having failed to control him, warned that he would use his CS spray. El-Kholti lunged at him again, so he used it. PC Jones opened the door to call for help, but both of them fell out. He was given CS aftercare and then out back in the van. He described El-Kholti as being very tall.
PC Kelly Bond-Vaughan gave evidence. She was principally concerned with the other man who was with El-Kholti. She gave evidence that they had been stopped because they were suspected of dealing in drugs. She was adamant that she would never have called him a "cunt" which was a word she detested. She described seeing El-Kholti at the door of the van towering over PC Jones, and of El-Kholti being very aggressive on the way back to the police station. PC Trevor Mullen gave evidence to much the same effect.
Ms Kaufmann was keen to persuade me that PC Jones' conduct of getting El-Kholti into the van, and then seeking to mete out his own form of justice, was strikingly similar to the events relating to Basil Khan and Omar Mohidin.
My starting point is that I accept the evidence of PC Bond-Vaughan that the two men were rightly suspected of dealing in drugs. The idea that they would be approaching people at 1.20 am to discover the whereabouts of a snooker hall is inherently implausible. Neither she nor PC Mullen can give evidence about what happened in the van. In the absence of evidence from either El-Kholti or PC Jones, I am not willing to reach any other conclusions.
N My assessment of the witnesses and their evidence
It is inevitable that when witnesses seek to describe an incident such as this, there will be contradictions and inconsistencies between them. That is the common experience of the courts and judges who have dealt with cases concerning events such as these. Added to that, a great deal of time has passed since the events of June 2007, and it is thus inevitable that recollection by witnesses will be much less clear than it was at the time. It is also important to remember that evidence which is untrue may not be a lie or lies, but may simply be mistaken. It is also the common experience of the criminal courts, and especially in cases of assault or disorder, that a witness or witnesses may be untruthful or exaggerate about some matters, but not about others. Whether that has happened depends on the evidence, and on the judgments I form about that which I accept, and that which I do not.
I have also had regard to the evidence which I heard that TSG officers have to get used to the experience of some of those with whom they deal making false complaints.
It is only proper that I should take into account the evidence which I admitted and heard about the characters of the Claimants, which I have set out in full. Some of it seems to me to go only to credit (whose significance I accept), but is of no relevance beyond that to deciding what happened in the incidents. In the circumstances of this case, it is hard to see for example why misuse of an Oyster card by Omar Mohidin or theft by him of a jacket show anything at all about what happened that day. In Basil Khan's case, all but one were similarly irrelevant to anything but general credit. However in Ahmed Hegazy's case some at least of what was put before me was significant.
Equally, I give full weight to the fact that all the officers on the TSG carrier were trained and (save for Mr Kitchener) experienced TSG officers.
I had the opportunity of observing all of the main participants (save of course Mr Onwugbonu) in the witness box, and, save for Mr Jones in the respects already described, how they gave their evidence in chief, and how they responded to being tested in cross examination. I have also taken into account the evidence before me about PC Onwugbonu, given by the other officers.
I start with Ahmed Hegazy. There can be no doubt that Ahmed Hegazy's criminal history, which includes significant robberies, must cast considerable doubt over his credibility. I also consider that there is evidence about him, which shows that he had the propensity to become very angry, and to use violence or to make threats when he did so. He accepted in evidence that he could become angry. I also found his account of the effects of the incident upon him to be very considerably exaggerated. He has exaggerated aspects of his evidence, and especially the claimed effects upon him, as I shall deal with below when I address the issue of damages. In the witness box he could not remember many features of what had occurred in the incident. I am not critical of that, as the incident happened 8 years ago.
However he did make a complaint about what had occurred while at the Police Station. He did so after seeing his legal representative Millie Guest. It is quite unclear whether or not she had told him anything of what she had learned of PC Onwugbonu's account before that complaint was made.
So far as his injuries are concerned, I am quite satisfied that he did suffer some painful bruising, and I am critical of the attempts to portray him as being histrionic on his release from the Police Station. Dr Frazer found some injuries which must have been painful, and described him as tearful. But I am also satisfied that there is nothing in his injuries which undermines the account given by the PCs Brown and White, who described Ahmed Hegazy's violent struggle, which required them to grip his arms, get him to the floor, and place him on the floor of the van, where his legs were held so as to restrain him. When there, he was stepped on, but Ahmed Hegazy did not allege in the witness box that that happened deliberately. Given his position across the access into the rear of the van from the main door, and the number of people dealing with him, his being stepped on by accident was not unlikely.
So far as Omar Mohidin is concerned, he too has some, albeit much less, experience of crime. He has exaggerated aspects of his evidence, and especially the claimed effects upon him, as I shall deal with below when I address the issue of damages. I also reject the account he gave of what happened at the Israeli Embassy. While it is true that Sergeant Burger's recollection was made several months later, the fact is that Omar Mohidin accepts that he was there. That being so, I am minded to accept that he was boasting about obtaining money from the Police because of the activities of Mark Jones. That may have been unwise, but it does not discredit his account of what occurred in the van. However I do not accept the other parts of Sergeant Burger's evidence. His witness statement was not made until 9 months later, and he had made no notes of the incident.
However Omar Mohidin's account of what happened to him in the van was potentially credible, and I consider that he gave it in a straightforward manner. This following of the group by the TSG carrier started because of a perceived insult to the TSG officers within it, of obscene gestures and insults of a type regrettably typical of some groups of teenage youths. It is a notable and curious feature of the case for PC Jones that Omar Mohidin was not arrested for that, but was said to have been made the subject of a search for cannabis, of which none was found, and of which search no record was kept. I do not believe that PC Jones intended to conduct a search for cannabis at all. His purpose was, and remained, bringing home to Omar Mohidin that he should not mouth obscenities or to make obscene gestures at the Police. I am inclined to accept Omar Mohidin's evidence that he was grabbed by PC Jones and shouted at about having mouthed at the Police. That rang true, and chimed with the actual reason why the Police were interested in stopping them, which was that the officers felt that a challenge had been made to them by a group they regarded as bad mannered and objectionable teenagers. His evidence is also supported by the evidence of PC Onwugbonu. Whether that inclination remains after considering the evidence from the other officers must await my consideration of their evidence.
However I do not accept that he was handcuffed. I am sure that had he been so, he would have mentioned that in his original complaints.
Basil Khan has exaggerated aspects of his evidence, and especially the claimed effects upon him, as I shall deal with below when I address the issue of damages. However his account of what occurred to him in the van was straightforward, and while I accept that he minimised what he did outside the van, it is quite plain that he provided details of what he alleged had happened at an early stage, and did so unprompted, when Inspector Cruickshank came to his cell. PC Onwugbonu provides strong evidence to support what Basil Khan says about what happened in the van, and did so quite independently within a few hours of the incident. I also found that PC Prout's careful evidence and independently written note suggested strongly that the account given by both PC Onwugbonu and Basil Khan that he was at first put into a seat was correct. I shall consider the evidence of the other officers in due course.
However, I do not accept Basil Khan's evidence about the reasons for his arrest. In that respect I accept the evidence of Sergeant Wilson that he was angry about what he had seen happen to Ahmed Hegazy, and had approached the van swearing and making angry gestures. That is supported by evidence from Hegazy himself. The group had seen a struggle involving Ahmed Hegazy, who had been put in the TSG carrier against his will. While they were wrong to do so, it is unsurprising that his friends decided to remonstrate with the Police officers. When the van was leaving, Basil Khan decided to have a parting shot of swearing and gesturing at the van. However, I do not accept that he made the threat alleged by PC Jones. It did not sound authentic, and had it been made I would have expected Sergeant Wilson not to have overlooked it in the way that he did. As it was, he treated Basil Khan as only having committed a public order offence.
It is convenient that I deal here with the evidence called about PC Onwugbonu's conduct as an officer. Some of it related to his approach to dealings with members of ethnic minorities, and to his having made what was another allegedly erroneous complaint in the past. I accept the relevance of both, and I shall consider that below. However some of it was utterly irrelevant. For example, how can it conceivably be thought that arguments about payments to a social club, or his being keen to maximise his earnings, have the slightest relevance? The purpose of that evidence was to drag up any and every piece of information which might put him in an unfortunate light. It was an attempt to smear him, and it has the potential to say more about the motives of those who gave or adduced such evidence as part of their case than it does about him.
In my judgement that approach to PC Onwugbonu's evidence was not only unfair, but suggested strongly that Ms Kaufmann's suggestion that a whistleblower places himself in a very difficult position was one of substance. While the witnesses who did so are of course to be criticised, I am also very critical of those who advised the Third to Sixth Parties on the presentation of their cases. I have pondered whether I should regard this mudslinging (the aptest description for it) as something which I should put in the balance when considering how I assessed the credibility of the witnesses who adduced it. On reflection, I cannot exclude the possibility that it has been included out of very poor judgment or very bad advice from an outside source (or both) rather than out of any desire to obscure the facts of what occurred that day. The solicitors for the Third to Sixth Parties are to be strongly criticised for its inclusion in the evidence filed in the action. Their job as lawyers is not merely to enable clients or witnesses to say anything they want. They have a duty to the court to see to it that irrelevant, vexatious or abusive material is excluded.
As to the past complaint, I am quite prepared to accept that it was wrongly made. I have no evidence of any substance (as opposed to mere opinion) that it was deliberately made falsely. As to the question of the mouse in the locker, no-one suggests that there was no mouse (indeed I heard evidence that Paddington Green suffered from the presence of mice), and I am prepared to accept that PC Onwugbonu thought that PC Mark Jones had put it there, whether that belief was true or not. However I find the idea absurd that that belief would lead to his making deliberately false complaints of violence against PC Mark Jones, so as to get him removed from the Unit. The evidence of PC Onwugbonu's distress that evening (from PC Prout) is enough to dispel any idea that this was some calculated stratagem to get his own back. It also faces the problem that his account matched that of Basil Khan, when the latter had no idea of knowing what PC Onwugbonu had said.
I also accept PC White's account of the conversation he had with PC Onwugbonu at the Christmas party in late 2007. It strongly supports the idea that PC Onwugbonu was not complaining of what PC White had done, but was very exercised about what had been done by Sergeant Wilson and PC Mark Jones. I am also convinced, as a result of PC Prout's evidence that PC Onwugbonu realised very well that if he made a complaint on the evening of the incident, serious consequences would follow for PC Mark Jones and perhaps Sergeant Wilson. It was not a matter which he took lightly at all. He did not appreciate that what he said would result in serious consequences for others, which given what I find had occurred, is an entirely understandable view.
I also consider that the account given by PC Brown of his conversation with PC Onwugbonu on 12th June 2007 is true. It strongly supports the idea that PC Onwugbonu was not complaining of what PC Brown had done with regard to Ahmed Hegazy, but was very exercised about what had been done by Sergeant Wilson and PC Mark Jones.
As to the point about dealing with members of ethnic minorities, I do not give that much weight in the context of this case, where I rely on the evidence of what the witnesses say occurred. It is true that PC Onwugbonu had thought that the pursuit of the youths should be called off, but others were of the same mind. If his view was that the use of resources was excessive, to divert from the journey to Brixton (where they were needed) to chase after a group of youths because of some gestures, I consider that he had a very good point.
In the context of his evidence, I must have regard to the criteria in section 4 of the Civil Evidence Act 1995:
"(1) In estimating the weight (if any) to be given to hearsay evidence in civil proceedings the court shall have regard to any circumstances from which any inference can reasonably be drawn as to the reliability or otherwise of the evidence.
(2) Regard may be had, in particular, to the following—
(a) whether it would have been reasonable and practicable for the party by whom the evidence was adduced to have produced the maker of the original statement as a witness;
(b) whether the original statement was made contemporaneously with the occurrence or existence of the matters stated;
(c) whether the evidence involves multiple hearsay;
(d) whether any person involved had any motive to conceal or misrepresent matters;
(e) whether the original statement was an edited account, or was made in collaboration with another or for a particular purpose;
(f) whether the circumstances in which the evidence is adduced as hearsay are such as to suggest an attempt to prevent proper evaluation of its weight."
I have already set out my views on the witness' absence from the trial. I turn now to the criteria in section 4(2):
(a) I do consider that he could have been produced as a witness. Equally, the Third to Sixth Parties could have required him to attend;
(b) the statements relied on were made contemporaneously;
(c) the statement does not involve multiple hearsay;
(d) I do not consider that he had any motive to conceal or misrepresent matters. I deal at length with this matter in the succeeding paragraphs;
(e) it was not an edited account, nor made for any purpose other than that of a police officer setting out in his notebook and in a draft witness statement his recollection of the events that had occurred a few hours before;
(f) For the reasons I have given, I do not consider that the Claimants sought to avoid calling him to prevent a proper evaluation of weight. I do consider that the Third to Sixth Parties' approach sought the tactical advantage of depriving it of weight by keeping him from the witness box. However I have received a large amount of material about him, and a large amount of evidence from others who were involved in these events. That being so, there is nothing in the circumstances which prevent the court from making a proper evaluation of weight.
Mr Hardy also invited me to consider under section 5 (2) Civil Evidence Act 1995 the following matters about his evidence at the Crown Court trial, which he said discredited his evidence:
i) he had admitted at the Crown Court trial that he had wrongly said that a man I shall refer to as D was beaten up by officers, including PC Jones on 31st May 2007;
ii) he had wrongly said at first that Ahmed Hegazy was handcuffed to the rear;
iii) he had been "possibly wrong" to say that PC Brown had been swearing;
iv) he had been wrong to say at first that PC Prout was in the rear of the van:
v) he had been wrong to record that it was PC Kitchener and Sergeant Wilson who brought Basil Khan on to the carrier, when it was Pc Jones and Sergeant Wilson;
vi) he had been wrong to have an impression that PC Brown removed his vest as he was offering to fight Ahmed Hegazy, and that he accepted that he could simply have been removing it because he was hot and uncomfortable;
vii) he was wrong to maintain that PC Jones kept punching Basil Khan after the carrier arrived at the Police Station;
viii) he was wrong to say that he did not visit Basil Khan in custody, when he visited both him and Ahmed Hegazy;
ix) he was wrong to recall that PC Prout told him that he had also seen wrongdoing;
x) he had not told DPS officers about the matter of the premises search in 2006;
xi) his notebook and WORD draft contained differences.
I shall take those in turn;
i) I have addressed the previous complaint already. I shall treat it as untrue;
ii) this is an error in recollection. It has no effect on credibility at all;
iii) he had been "possibly wrong" to say that PC Brown had been swearing. In any event, I would not regard evidence that PC Brown swore in the situation he was dealing with as in any sense blameworthy, albeit perhaps unwise;
iv) this is an error in recollection. It has no effect on credibility at all. Indeed his concession was properly made and led to PC Prout's acquittal on the charge of misconduct in public office;
v) this is an error in recollection. It has no effect on credibility at all;
vi) at most it was an impression, which he conceded could have been wrong. It has no effect on credibility at all;
vii) I agree that PC Onwugbonu is wrong about this matter. I agree that it is necessary to look at his evidence in the light of it. However I conclude that the other parts of his evidence relating to Omar Mohidin and Basil Khan are true;
viii) this is not a proper allegation by the Third to Sixth Parties. It became quite apparent from the CCTV film, as Mr Hardy accepted, that the most he did was to go to the doors of their cells. There is no evidence at all of his ever having spoken to them;
ix) this was his error in recollection. PC Prout was undoubtedly sympathetic to him. It has no effect on credibility at all;
x) this is another aspect of (i);
xi) this is a frankly desperate point. None of the differences are of any real significance in the context of the case.
It is also important to stand back and look at his evidence overall. If one does so, it is a striking fact that it is a very detailed account, recorded within a few hours of the incidents in question. In the case of Omar Mohidin, it chimes well with the actual reason for the van having made the long detour, namely that PC Jones was angry at the disrespect shown towards him and the other TSG officers by Omar Mohidin as the van travelled southwards. In the case of Basil Khan, it is a remarkable fact that the account given by him of what occurred when Basil Khan was put in the van matches so well with that of Basil Khan, when, given the evidence of Inspector Cruickshank and the CCTV and audio evidence, Basil Khan had no idea at all of what PC Onwugbonu had said when Basil Khan gave his description. The only evidence one can set against what PC Onwugbonu said is that of PC Jones, Sergeant Wilson and PC Giles Kitchener, as I shall presently.
I turn now to the Third to Sixth Parties and their witnesses. I heard oral evidence from all the police officers on the van save PC Onwugbonu.
I consider that there were two witnesses among the Police Officers on the TSG van who emerged from the witness box with their credibility and reliability largely intact about what happened in the incident: PC White and PC Prout. It is true that PC White unwisely joined in the attacks on PC Onwugbonu's credit and character in a manner which I have had to take into account when assessing his own credibility. But even taking that into account, and adopting the approach set out above, I found them both to give clear, careful and reliable evidence about what occurred at the incident.
PC Brown exaggerated at times, but the fundamentals of his evidence about his dealings with Ahmed Hegazy were supported by PC White and to a degree PC Prout. Some aspects of Mr Brown's evidence were most unsatisfactory, such as his unwise and ill-informed attempt to speculate that Hegazy was acting as he was because he was on licence from a sentence of imprisonment (he was in fact 17, and the subject of a referral order). However the core of his evidence that Hegazy got angry when he said he was searching him, was strongly supported by PC White, and accords with other evidence of Ahmed Hegazy's character and tendency to become angry. For that reason I accept Mr Brown's account and reject Ahmed Hegazy's.
I find great difficulty in accepting Sergeant Wilson's evidence, save where it is supported by that of PCs White or Prout. It follows that I accept it about his dealings with Ahmed Hegazy. While I accept that Basil Khan had been arrested for making gestures and shouting at the van, and that Sergeant Wilson had not thought that he should be arrested for threats to kill, I do not accept what he says about what happened thereafter. On any view, an incident was taking place just behind him as he sat in the seat by the side door. If PC Jones and PC Kitchener are correct, Jones was complaining that Basil Khan had hit him, and there was a struggle in which Basil Khan ended up on the floor with Jones on top of him. Both Basil Khan and PC Jones say that Basil Khan was complaining that he could not breathe. Yet Sergeant Wilson, who was the man in charge, would have had the Court believe that he remained sitting in his seat and saw and heard nothing, and that he had no reason to turn round and see what was happening. His accounts about that have varied from time to time. In my judgement, no responsible Police Sergeant in charge of that unit and van, could have just sat there and allowed that situation to continue. No person sitting in that seat could possibly have remained oblivious to what was happening just behind his right shoulder. In my judgement, he was claiming to have seen and heard nothing so as to avoid incriminating PC Mark Jones and to minimise his own involvement.
He also allowed Basil Khan, who was then aged 16, to be left handcuffed and kneeling in the back of the van for about 20 minutes at the Police Station, when it was quite unnecessary and he could have been put on a seat, not least for his own safety. I find it impossible to reconcile that with the image of a Police Sergeant dealing properly with those whom his officers have arrested. He was again letting PC Mark Jones continue in his ill treatment of Basil Khan. The evidence that Sergeant Wilson hit and shouted at Basil Khan comes from both Basil Khan and PC Onwugbonu. I find it impossible to prefer Sergeant Wilson's evidence to theirs so far as the incident is concerned involving Basil Khan.
So far as Mr Jones is concerned, I only had some of his evidence orally before his collapse, but I have his notebook entry of that evening, and also evidence of what he told the custody sergeant. There is a stark conflict between the latter two. There is no evidence from any other source of any threat to stab tourists. I am satisfied that it was said to the custody sergeant so as to put Basil Khan in a deliberately worse light. I also consider that the account by Basil Khan of what Mr Jones said to him inside the van rings true. It is supported by the evidence of PC Onwugbonu. The latter gave his account without any way of knowing what Basil Khan would say, and Inspector Cruickshank's evidence, (which I entirely accept) and the CCTV transcript shows that before Basil Khan made his complaint, he had no way of knowing what PC Onwugbonu had said. What PC Onwugbonu and Basil Khan describe is the very angry response of PC Jones to anyone who he perceived as challenging the authority or actions of his unit by someone he regarded as an antisocial youth who required being told who was boss. That is also what Omar Mohidin described, and it too rings true.
PC Giles Kitchener was a witness in a very difficult position. He had only been in the unit for just over a fortnight. However his evidence is, at the very least, unsatisfactory in several important respects. He gave one account in his notebook that evening, a very different account in an interview under caution (in which he said that in some respects the account in his notes was wrong) and another in his evidence before this court. To give the most glaring example, he gave evidence to me that Basil Khan was never placed on a seat. He was in a position to know as he was sitting behind Sergeant Wilson on Seats H and I, and whatever was happening between Basil Khan and PC Jones was happening immediately to his right. Yet in an interview under caution in 2008 he described in detail how Basil Khan was required to sit on seat F. He told me in evidence that he had said it because he had got muddled. I disagree. This is not a case of slips being made in recollection. Either that account given in interview under caution in 2008 or the one he gave me was a deliberate lie. I am satisfied that the lying account was the one he gave to me, which seemed to me to be deliberately devised to counter Basil Khan's case that he was hit while on the seat, and to seek to support his colleagues.
I also reject his account of his comment about Basil Khan thinking he owned the Edgware Road, which invited the Court to believe that he would just say that as a way of informing others of a piece of information, rather than as something said, as it I find it obviously was, to expose Basil Khan to ridicule.
Having seen and observed Mr Kitchener, I am convinced that he was lying about what happened to Basil Khan, and doing so because he knew that PC Jones and Sergeant Wilson had mistreated Basil Khan. As I have observed he was put in a very difficult position, witnessing violence by fellow officers (including his Sergeant) within a short time of his joining the Unit. But my sympathy for him does not permit me to overlook what I find to be his false evidence.
I make it plain that there is one aspect of PC Onwugbonu's account which I do not accept, which is that the attack on Basil Khan continued for any significant time after the van arrived at the Police station. It is not consistent with the CCTV footage. However what is beyond argument is that PC Jones, without interference from Sergeant Wilson, and with the cooperation of PC Kitchener, deliberately made Basil Khan kneel in handcuffs in the van, when it was quite unnecessary to do so. He could and should have been put in the seat on the carrier, and on arrival at Paddington Green that was an even more obvious thing to do, when there was not the slightest risk of escape. If it is true that they did not know he was only 16 years old, and they had thought he was (say) 20 years old that was still an entirely unnecessary course to pursue. That is consistent with the idea that there was an intentional humiliation of Basil Khan. That matter alone is strong reason to disbelieve the evidence of Messrs Jones, Wilson and Kitchener that they acted properly to Basil Khan throughout.
I have set out above the other evidence called by the Third Parties about the Claimants. Leaving aside the patently inadmissible evidence of PC Thomas, one then has evidence from Sergeant Burger, PC Davis, PC Brown and PC Arno.
I have already set out my views about Sergeant Burger's evidence about Omar Mohidin. As to PC Davis and PC Arno's evidence about Basil Khan, they describe someone who took the opportunity to taunt the police when stopped. It does not say much for his wisdom, common sense or judgement, but it does not begin to undermine his account of what happened. If anything, those statements are consistent with his having been attacked by PC Jones and his taking steps to establish it. As to the only surnamed PC Brown, his evidence takes one nowhere. Basil Khan's case was not that he had beaten up six officers, but that he had been beaten up.
So far as the Defendant's witnesses are concerned, I accept their evidence in its entirety. Inspectors Wilkinson and Cruickshank were both straightforward careful witnesses. The evidence from the CCTV transcript of what occurred when Inspector Cruickshank went to Basil Khan's cell puts the end to any idea that Basil Khan was somehow informed of what PC Onwugbonu had said, and decided to latch on to it, and Mr Hardy QC was wise to abandon any argument of any collusion. It makes it very difficult indeed to accept that Basil Khan's evidence of what occurred is manufactured.
Given those matters, and bearing in mind all the matters placed before me by Mr Hardy, I now stand back and ask whether there is anything in the evidence of PC Mark Jones, Sergeant Wilson and PC Giles Kitchener which should cause me to disbelieve the evidence of PC Onwugbonu about what occurred to Basil Khan. While, given the CCTV film, I cannot accept his evidence about PC Jones continuing to hit Basil Khan after the van had arrived at Paddington Green, I accept the other parts of his evidence. I regard the evidence of the three officers mentioned about the events in the van as incapable of belief for the reasons I have given. I have then considered why the lies were told. I am quite satisfied that PC Jones lied to conceal his own wrongdoing, while Sergeant Wilson lied partly to conceal his own wrongdoing, but also to conceal that of PC Jones. The unfortunate PC Kitchener lied to conceal the wrongdoing of both. I also find that PC Jones' account to Sergeant Wilkinson was also deliberately padded out with false allegations. All three have lied about what occurred once Basil Khan was put in the van. Having found that PC Mark Jones has lied, I can place no weight on his evidence so far as Omar Mohidin is concerned. I accept the accounts of Omar Mohidin and PC Onwugbonu.
O Findings of fact on liability, and conclusions on liability
I reach the following conclusions, based on the evidence placed before me. As it is accepted that force was used on Hegazy and Khan, and that they were detained, it is for the Defendant to show on the balance of probabilities that the use of force was justified, and that he was lawfully arrested and then kept in detention for the period in question. In Omar Mohidin's case, where the question of his detention is disputed, the burden of proof lies on him to show that he was detained on the balance of probabilities. As will become apparent, my conclusions do not depend on the incidence of the burden of proof.
I am satisfied that this incident started as the TSG carrier was driving southwards on Edgware Road. I find that PC Jones saw one of the youths in the group mouth something towards the TSG unit, and make aggressive and obscene gestures, as it travelled southwards. The conduct of the youths had been seen as a challenge to the authority of the Police. I accept that the youths had engaged in conduct which amounted to a public order offence (under section 4 Public Order Act 1986). The view was taken that the van should follow them, although as it made its way back up the Edgware Road, three at least of its occupants thought that it was not a sensible use of police resources. However Sergeant Wilson was persuaded by PC Jones that it was justified.
Meanwhile the group containing the claimants had visited at least one store, and Ahmed Hegazy had acquired a bottle of alcohol. I find that it was a bottle of Smirnoff Ice rather than Smirnoff vodka. Whether it was or not, only a nip of it had been drunk, moments before the Police arrived. I find that it had no effect on Ahmed Hegazy's conduct. I also find that there is no evidence that any of the youths was so affected by cannabis consumed that day to the extent that it affected their actions that afternoon.
When the van eventually came across the group, some minutes later, while Sergeant Wilson and others started off by talking to some of those involved, PC Jones rapidly became involved with the person whom he said he had seen making gestures and mouthing obscenities. I am satisfied that PC Jones confronted Omar Mohidin, and pulled him into the van, where the tinted windows made it difficult for anyone outside to see or film what was happening. I reject as absurd the idea that Omar Mohidin asked to go into the van. I find that he did dislike the Police, and he knew that he had made obscene gestures. There is no evidence that he had any cannabis or other drugs on him. He had not the slightest reason to agree to get into the van with the officer, out of sight. It is noteworthy that, whereas others engaged with the youths by talking to them on the pavement, within a very short time PC Jones had got Omar Mohidin into the van. I find that PC Jones wanted to bring the message home to Omar Mohidin that conduct of the kind he had engaged in would be met with a vigorous response. But he did it in quite the wrong way. The fact is that PC Jones grossly overreacted to what had occurred earlier, and wanted to intimidate Omar Mohidin, rather than dealing with it in the more measured way which the law and society expect of a policeman. If he had dealt with it in that measured way, he had a choice; either arrest him outside the van for a public order offence, or speak to him outside the van about his conduct. He chose neither. He chose to intimidate him, and to do so out of public gaze, and away from the apparently ubiquitous mobile phone cameras. I am wholly satisfied that Omar Mohidin was forced into the van, and then abused and sworn at in the van by PC Jones in a threatening, intimidating and very aggressive manner. Part of the abuse was racist. I accept Omar Mohidin's account of what was said. He was still present in the van when Ahmed Hegazy was brought in, but was then told to leave by PC Jones. I do not find that he was handcuffed or struck, but he was undoubtedly subjected to battery when forced into the van, and was falsely imprisoned for a few minutes.
Before dealing with my findings on what happened with regard to Ahmed Hegazy, it is necessary to set out the legal framework which applies. Section 2 of the Police and Criminal Evidence Act 1984 ("PACE") reads, insofar as is relevant:
"2 Provisions relating to search under section 1 and other powers.
(1)……………………………
(2) If a constable contemplates a search, other than a search of an unattended vehicle, in the exercise—
(a) of the power conferred by section 1 above; or
(b) of any other power…………………..—
(i) to search a person without first arresting him; or
(ii) to search a vehicle without making an arrest,
it shall be his duty, subject to subsection (4) below, to take reasonable steps before he commences the search to bring to the attention of the appropriate person—
(i) if the constable is not in uniform, documentary evidence that he is a constable; and
(ii) whether he is in uniform or not, the matters specified in subsection (3) below;
and the constable shall not commence the search until he has performed that duty.
(3) The matters referred to in subsection (2) (ii) above are—
(a) the constable's name and the name of the police station to which he is attached;
(b) the object of the proposed search;
(c) the constable's grounds for proposing to make it; and
(d) ………………………………………………………………….
It applies to a search under section 23 of the Misuse of Drugs Act 1971. The Courts have emphasised that the duty to inform the person to be searched the matters set out in section 2(3) is a precondition of a lawful search; see Osman v Southwark Crown Court [1999] 163 JP 735, R v Bristol [2007] EWCA Crim 3214, and B v DPP [2008] EWHC 1655. It is worth considering the judgement of Blake J in the B v DPP case, with which Moses LJ agreed. It contains some parallels to the current case. B, the Appellant, was convicted by the Youth Court of the offences of obstructing a police constable in the execution of his duty, and using threatening or abusive words or behaviour contrary to section 4 of the Public Order Act. The justices found that on 5 May 2007 a police constable was on plain clothes patrol in the company of two other police constables, when he came across the appellant from whom there was a strong smell of cannabis and whose eyes were glazed. He had reasonable grounds to suspect that an offence under the Misuse of Drugs Act 971 was being committed.
The justices found that the constable introduced himself and informed the appellant that a search under section 23 of the Misuse of Drugs Act 1971 would be carried out and the reason for so doing. It was common ground before that court that by "introduction" was meant the giving of his name and police station as required by statute. Equally, the justices found that he did not show the appellant a warrant card or any other form of documentary evidence that he was a police constable. It was said that the appellant knew the police constable from previous experience.
The justices found that the appellant immediately put his hands into his pockets. The police constable then grabbed the appellant's hands, fearing he was reaching for a weapon or about to conceal drugs. He searched him and told him what he was doing, and that he would be entitled to a copy of the search record. The appellant resisted physically and verbally, while the appellant was continually shouting and making threats of violence to the officers. His left wrist was handcuffed. Another officer told him to remove his hand from his pocket. The appellant refused, and he threatened to stab the officers present. He was handcuffed, arrested, cautioned for both offences and taken to the police station. The magistrates found that the search of the appellant was lawful notwithstanding an admitted failure to comply with the Police and Criminal Evidence Act Code of Conduct. They concluded that the officer had taken reasonable steps to comply with his duties under section 2(2) (b) of the Police and Criminal Evidence Act 1984.
Blake J stated at [9]- [19]:
"9 It is therefore clear from the statute that it is the duty of the constable, if he is not in uniform, before he commences the search to take reasonable steps to bring to the attention of the appropriate person documentary evidence that he is a constable. A search conducted in breach of this duty cannot be a lawful search, and therefore resistance to such a search would be lawful and cannot constitute the offence of obstruction of a constable in the execution of his duty.
10 The justices found in their case that the search was lawful, but in their recitation of the evidence, they did not record any evidence of an attempt to produce evidence that was frustrated by the appellant's actions.
11 Miss Stevens, who appears for the respondent……., submitted that Parliament has not required that the warrant card, or indeed any other documentary evidence, be produced in every case, and it is sufficient if the officer has taken reasonable steps to produce it. I accept that submission. There may be cases when physical resistance from the appellant prevents the process of production of documentation being complete before there is a physical taking hold of a person in order to search them.
12 However, I reject (1) any submission that it can be inferred on the present facts that the officer was about to produce the warrant card but had been prevented from so doing, and (2) generally that performance of the duty for uniformed officers, namely informing a person to be searched of the name of the officer and police station concerned, was a sufficient part-performance of the separate and additional duty for plain clothed officers. In my judgment, that distinct duty is the more important duty when an officer is in plain clothes. The uniformed officer has his uniform to speak for him or her as the source of his or her authority and status as a constable. The plain clothed officer needs to produce the warrant card to start in the same position as the uniformed officer.
13 Although there is no reference in the statute to which order the duties are to be performed in, this consideration would lead me to believe that, in the normal case, the card should be produced before or at least at the same time as the verbal introduction in order to found a legitimate search. It is notable that the authors of the Codes of Practice, who are well experienced in the practical realities of policing, provide as follows:
"Code of Practice A 3.9.
3.9 Officers not in uniform must show their warrant cards ..."
14 It is also notable that in the case of Mustapha Osman v Southwark Crown Court [1999] 163 JP 735 (1 July 1999) in the judgment of Sedley LJ there has been the suggestion that a convoluted oral explanation might take longer and might be more likely to interfere with the duties of preventing crime and searching, and that a convenient alternative would be the production of a piece of paper with the requisite information contained on it.
15 In the present case, there was no evidence, or certainly no evidence recited in the justices' case, as to the following matters: (1) why the card was never produced or attempted to be produced; (2) that PC Townsend ever intended to produce the card but was prevented from doing so; (3) that he explained at any time that he was intending to do so when his hands were free; (4) that he did so when the appellant had been restrained and handcuffed with the assistance of other officers. It was equally plain from the facts found that before and during the search the officer was able to give a lot of oral information about who he was and what he was intending to do.
16 It is clear from the line of authorities, beginning with the case of Osman and continuing through to the case of R v Christopher Bristol [2007] EWCA Crim 3214 (4 December 2007), as well as the plain words of the statute, that compliance with the statutory requirements is a precondition of a lawful search. It makes no difference that the constable is said to have been known to the person being searched. The earlier decision in the case of Forde [1985] 81 Crim App R 19, to which reference was made by Miss Stevens, preceded the statutory language with which we are concerned. It cannot assist in the kind of case that is concerned with whether those preconditions have been complied with. Of course, as already acknowledged, where the evidence demonstrates that the constable did take reasonable steps to produce the documentary evidence but was prevented from doing so, the duty may have been complied with, but there is no evidence to that effect in this case.
17 In my judgment, the justices have misunderstood the mandatory requirements for a lawful exercise of the power of search, and on the facts found by them, could not have concluded that the power had been lawfully exercised. The consequence is that the search was unlawful, the officer was not acting in the execution of his duty when conducting it, and the appellant was entitled to use reasonable force to resist the search.
18 The justices posed three questions for the opinion of the High Court:
"(1) Was the court entitled to find that notwithstanding the failure of PC Townsend to produce documentary evidence to the appellant, that he had taken all reasonable steps to comply with his duty as provided by section 2(2)(b)(i) of the Police and Criminal Evidence Act and the Code of Conduct?"
The answer is "no", in my judgment.
"(2) If not, did that failure render the search unlawful?"
In my judgment, the answer is "yes".
"(3) If the search and use of force on the appellant were unlawful, can the appellant properly be convicted of an offence pursuant to section 4(1) (a) of the Public Order Act 1986?"
In my judgment, the answer is "yes", but only if the conduct used in resisting any unlawful force was excessive. (My italics)
19 Applying those answers to the facts of this case, it must follow that the conviction for obstruction of the police must be quashed and an acquittal substituted. The appellant was entitled to use reasonable force to resist the search, and conviction for threatening words or behaviour could be founded on reasonable force or threat of force to resist such a search. Since the justices appear to have included the appellant's resistance to the search as at least part of the basis of the conviction for threatening words, the conviction cannot stand. However, the case stated also recites that the justices found that the appellant threatened to stab the officer with a knife. It is strongly arguable that use of such words could be excessive force and constitute the offence of threatening words and behaviour, irrespective of whether the officer was acting in the execution of his duty or not. It is therefore common ground that we should quash the conviction of the public order offence as well, but in the case of that offence, and that offence only, remit the charge to the justices for further consideration of this issue. Of course, it will be open to the CPS to review whether this is a prosecution they would wish to pursue in all the circumstances of the case. But to this extent, this appeal is allowed."
I should refer also to section 24 of the Police and Criminal Evidence Act 1984 as amended by the Serious Organised Crime and Police Act 2005, which was in force at the date of this incident.
"24 Arrest without warrant: constables
(1) A constable may arrest without a warrant—
(a) anyone who is about to commit an offence;
(b) anyone who is in the act of committing an offence;
(c) anyone whom he has reasonable grounds for suspecting to be about to commit an offence;
(d) anyone whom he has reasonable grounds for suspecting to be committing an offence.
(2) If a constable has reasonable grounds for suspecting that an offence has been committed, he may arrest without a warrant anyone whom he has reasonable grounds to suspect of being guilty of it.
(3) If an offence has been committed, a constable may arrest without a warrant—
(a) anyone who is guilty of the offence;
(b) anyone whom he has reasonable grounds for suspecting to be guilty of it.
(4) But the power of summary arrest conferred by subsection (1), (2) or (3) is exercisable only if the constable has reasonable grounds for believing that for any of the reasons mentioned in subsection (5) it is necessary to arrest the person in question.
(5) The reasons are—
(a) to enable the name of the person in question to be ascertained (in the case where the constable does not know, and cannot readily ascertain, the person's name, or has reasonable grounds for doubting whether a name given by the person as his name is his real name);
(b) correspondingly as regards the person's address;
(c) to prevent the person in question—
(i) causing physical injury to himself or any other person;
(ii) suffering physical injury;
(iii) causing loss of or damage to property;
(iv) committing an offence against public decency (subject to subsection (6)); or
(v) causing an unlawful obstruction of the highway;
(d) …………………………
(e) ………………………….
(f) …………………………...
(6) ……………………………......."
Uttering a threat to kill (section 16 Offences Against the Person Act 1861) is an offence, as are unlawful wounding or wounding with intent (sections 20 and 18 of the same Act respectively). It follows from the above that if the search of Ahmed Hegazy was unlawful, then he was entitled to use or threaten reasonable force to resist it. Equally, if PC Brown taking hold of him or seeking to restrain him was unlawful because of the deficiencies in the stop and search procedure, Hegazy was entitled to use or threaten reasonable force to resist it. But if PC Brown considered that, by the threat to draw blood, he was threatening to commit an offence by using or threatening unreasonable or excessive force which could lead to his being injured, then he was entitled to exercise his powers under section 24 of the Police and Criminal Evidence Act 1984 (as amended) to arrest him. In this case the tests in subsections 24(1), (4) and (5) (c) (i) are satisfied.
I find that Ahmed Hegazy was approached by PC Brown outside the van. His bottle of Smirnoff Ice was removed from him. PC Brown saw him move his hand into his trousers, and formed the reasonable suspicion that he was in possession of controlled drugs. He started the procedure for carrying out a search under section 23 of the Misuse of Drugs Act 1971 and section 2 of the Police and Criminal Evidence Act 1984 ("PACE 1984"), but did not complete it, in that he had not said who he was, or what station he was from (see re-examination and section 2(2) and (3) of PACE 1984). It follows that the search was therefore unlawful. However when told that he was going to be searched, Ahmed Hegazy lost his temper and threatened him that he would draw blood. I find that PC Brown was entitled to form the view that Ahmed Hegazy had uttered a threat to kill. Even if it fell short of that, it amounted to a stated intention to commit an offence under sections 18 or 20 of the 1861 Act. I find that, on the facts here, drawing blood would be an unreasonable and excessive use of force in response to an unlawful search. Given the words that had been used by Ahmed Hegazy, I am satisfied that by virtue of that, PC Brown was entitled to take steps to restrain him so that no offence would be committed. He was then lawfully detained. I find that he resisted arrest, which explains why he was only handcuffed to the front. PC Brown, PC White and Sergeant Wilson placed him on the floor of the van. He was partly on his side and partly facing upwards. I find that he was not assaulted in the van. I find that such injuries as he sustained came from the struggle of getting him into the van. I was impressed by the evidence from PC White that he was aware that he and the other officers were being filmed. That confirms me in my view that Ahmed Hegazy's evidence is not to be accepted. I reject Ahmed Hegazy's evidence that he was subjected to any form of racist abuse.
I find that he was not falsely imprisoned. I find that his strip search at the Police Station was justified given the nature of the threats he had made. I find that he was released as soon as was reasonably practicable.
I find that Basil Khan did make gestures at the van as it set off after the arrest of Ahmed Hegazy, and shouted abuse at it, such as "Racist Fucks." I accept that his conduct could have justified his arrest for a public order offence, but I do not accept that he made any threats to kill or injure any police officer. It is significant that it was again PC Jones who reacted to what he did, seeing it as insulting and confrontational behaviour, and getting out of the van. Within the van, I am abundantly satisfied that he was then hit by PC Jones and abused, including racist abuse, and then forced to the floor and handcuffed, where he was left to kneel, in a manner intended to further humiliate him. I also find that PC Jones grabbed him around the neck, making it difficult for him to breathe.
His injuries, such as they were, are consistent with his account up to that point. He had been hit, but not hard. I do not accept any of the evidence which alleges that Basil Khan struck PC Jones. On the basis of Basil Khan's evidence and that of PC Onwugbonu, I also accept that Sergeant Wilson struck him and abused him. He did so out of perhaps understandable irritation, and as what would in past days have been known as a "clip round the ear" but, what he did was unlawful and an assault. I also find that Sergeant Wilson allowed Jones to hit and scream abuse at him. At the Police Station he again failed to show leadership by permitting Basil Khan to remain handcuffed and kneeling when it was quite unnecessary to do so.
I do not accept that the attack continued after the van had arrived at the Police Station.
I therefore find that:
i) Omar Mohidin was forced into the van, and thus the subject of a battery, and falsely imprisoned for a few minutes, during which time he was abused verbally by PC Jones, including racist abuse;
ii) Ahmed Hegazy was lawfully arrested. Any injuries he sustained were as a result of his unlawfully resisting arrest. He was not assaulted. He was not falsely imprisoned. Ms Gerry expressly conceded that the claim under the Race Relations Act stood or fell with the claims for assault and false imprisonment. I find in any event that he was not the subject of racist abuse;
iii) Basil Khan was not lawfully arrested, as he had not uttered threats to kill. He did not make any threats to PC Jones, or assault him, but was abused and struck by Sergeant Wilson, and then struck and abused by PC Mark Jones, who also grabbed him round the neck, causing difficulties in breathing. He was then forced by PC Jones to kneel with his hands in handcuffs behind his back, both within the van en route to the Police Station for about 5 minutes, and then thereafter for about 20 minutes without any justification whatever, but for the purposes of humiliation. Sergeant Wilson chose to allow PC Jones to behave as he did in the van, and was also a party to Basil Khan's continued humiliation in having to kneel handcuffed in the van. It follows that he was falsely imprisoned until his release the following day. I find that PC Jones used racist abuse towards him. His being strip searched only came about because PC Jones had given false information about the reasons for his arrest. I accept that the Desk Sergeant genuinely thought that he was old enough to be strip searched.
P Evidence, submissions and conclusions on injuries and on issues relevant to damages
I shall deal here with
i) a summary of the claims made
ii) the evidence of physical injuries
iii) the evidence on the claimed subsequent effects
iv) the effect of the Crown Court trial of the officers on the Claimants
v) Damages for personal injury, false imprisonment, aggravated and exemplary damages.
vi) Other claimed heads
I shall also include my assessment of the Claim by Ahmed Hegazy had he established liability.
(i) a summary of the claims made
Omar Mohidin's case was that he suffered from pain and shock from the indignity of being detained. He contended that he had suffered acute stress disorder for some 3-4 weeks.
Basil Khan's case was that he had been caused fear anxiety and distress as a result of the "brutal and dangerous" assaults by PC Jones and Sergeant Wilson. He alleged that he suffered pain, and reddening of the wrists. He also endured a loss of liberty. He contended that he had suffered Post Traumatic Stress Disorder for about a year.
Both Omar Mohidin and Basil Khan also claimed aggravated damages. They claimed that they were detained in full public view, were treated in a high handed and abusive manner by Sergeant Wilson and PC Jones, whose use of a neck hold had placed both of them in fear for their lives during their detention. (This latter part can only relate to Basil Khan). They contended that they had been subjected to racial abuse, and the actions of the officers were motivated by reason of their ethnic or national origins, which added to their humiliation and dismay.
Basil Khan claims that the allegation of his uttering threats to kill was concocted, with the result that he was detained overnight and then kept on police bail.
Both then allege that the fact that they were cross examined during the officers' trial at the Crown Court by counsel who accused them of fabricating their evidence, and the fact that other officers attended their trial, led to further humiliation. Further they refer to the fact that two Inspectors gave what they contend was false character evidence at the trial when called by the Defence.
They refer to the fact that the Defendant had not admitted liability for the acts of his officers.
They then make a claim in exemplary damages, on the basis that the conduct of the officers was oppressive, arbitrary and unconstitutional. It is also alleged that the failure to act on the complaints of others who are black or Asian about the conduct of Sergeant Wilson and PC Jones, including the complaints of Babar Ahmad, justifies an award.
Ahmed Hegazy alleges that he was subjected to a terrifying and humiliating ordeal, and feared for his own safety and that of Basil Khan. He says that he suffered bruising to his throat, both arms, left wrist and behind his right ear, scratches to his left shoulder and swelling over both shins. He contends that he has since suffered from Post Traumatic Stress Disorder, which continues, and which requires continuing treatment. He claims £ 14,858 special damages for 48 sessions of psychiatric treatment for 12 months.
He too claims aggravated damages, relying on what he alleges was a grave affront to his personal dignity, a terrifying and degrading ordeal, the racially motivated behaviour of the officers, the failure of all of them save PC Onwugbonu to intervene or report the incident, the fabrication of an account which the officers knew to be untrue, the uncertainty of not knowing for a fortnight whether he would be charged with the offence of threatening to kill a police officer, the lack of an apology, the conclusion of the original DPS investigation that reasonable force had been used to restrain him, and that the original stop and search was lawful.
He takes the same point about the trial at Kingston Crown Court. He also states that the Defendant was at fault for failing to act on the complaints made by Babar Ahmad and others against PC Jones.
He repeats the particulars of aggravated damage in claiming exemplary damages. He also claims damages in excess of £ 50,000 for personal injury and injury to feelings under the Race Relations Act 1976, together with a declaration that the Defendant's officers had racially discriminated against him.
(ii) the evidence of physical injuries
Omar Mohidin does not suggest that he suffered any physical injury. I have set out above the evidence on the injuries to Ahmed Hegazy and Basil Khan. I accept Dr Frazer's evidence on both. Ahmed Hegazy would have suffered some pain from his bruising for a few days. Basil Khan would have recovered from his within a day or two.
(iii) the evidence on the claimed subsequent effects
All three maintained that they had suffered psychiatric symptoms as a result of what occurred. I had medical reports as follows
i) Omar Mohidin :
a) For First Claimant: Dr Adrian Lord MBBS MRCPsych: Consultant Forensic Psychiatrist : 29 March 2011
b) For Third to Sixth Parties: Dr Christopher M B Jarman, MA (Oxon) BM, B.Ch., LRCP, MRCS,M.Phil, MRCPsych; Consultant Psychiatrist; 23 November 2014
c) Joint Report by Drs Lord and Jarman: 28th April 2015
ii) Basil Khan :
a) For First Claimant: Dr Adrian Lord MBBS MRCPsych: Consultant Forensic Psychiatrist : 29 March 2011
b) For Third to Sixth Parties: Dr Christopher M B Jarman, MA (Oxon) BM, B.Ch., LRCP, MRCS,M.Phil, MRCPsych; Consultant Psychiatrist; 23 November 2014
c) Joint Report by Drs Lord and Jarman: 28th April 2015
iii) Ahmed Hegazy:
a) For Third Claimant: Dr Piyal Sen MBBS, DPM, FRCPsych, Dip Forensic Psych, PGCAP; Consultant Forensic Psychiatrist; 31st May 2011, 28th November 2014
b) For Third to Sixth Parties: Dr Christopher M B Jarman, MA (Oxon) BM, B.Ch., LRCP, MRCS,M.Phil, MRCPsych; Consultant Psychiatrist; 8th January 2015
c) Joint Report by Drs Sen and Jarman; 8th May 2015.
In Omar Mohidin's case, he told Dr Lord that PC Jones had handcuffed him, and had been making him stand and sit. He felt terrified, both by that and what was happening to Ahmed Hegazy. He felt helpless, humiliated and drained of confidence and pride. After the incident he did not go back to the Edgware Road for a month, and avoided it. He relived the events and his sleep was disturbed for 3-4 weeks afterwards. His giving evidence at the Crown Court was a stressful experience in which he was fiercely cross examined and accused of being a liar, led to a recrudescence of his symptoms. He had previously wanted to join the Police.
Dr Lord's opinion, based on that history, was that he suffered from Acute Stress Disorder for 3-4 weeks afterwards, as set out in the Diagnostic and Statistical Manual (DSM4) of Psychiatric Disorders, Code 308.3. He considered it highly likely that he had episodes during the investigation and during the Crown Court trial. He considered that in terms of the JSB Guidelines, he had suffered a category D "Minor" post traumatic stress disorder.
Dr Jarman adopted an approach to his reports on all three Claimants which, to be frank, was as much one of advocacy as it was expert opinion, although once winnowed of the advocacy it contained much of value. He also trespassed at times into making findings of fact about credibility which should have been left to the court. But his central point in both cases was that Dr Lord depended wholly on the veracity of the respective Claimant, and that there was no evidence independent of him to support the diagnosis.
It is important to consider the evidence about Omar Mohidin's activities after the 1st June 2007. Despite his claims that he avoided the Edgware Road, he accepted that he was stopped there on 7th June 2007, and in Hyde Park on 8th June. His account in cross examination, namely that he had to travel down Edgware Road to get to Oxford Street, is of course true, but this evidence still undermines his account of the effects of the events upon him.
I am prepared to accept that at some point he may have wanted to join the Police, but he could not seriously have thought that he could do so after his offending, as set out above.
I therefore reject the claim that he suffered Acute Stress Disorder at any stage. I accept that he found the conduct of PC Jones distressing and frightening, but I do not accept that it had any longer term consequences.
It follows from the above that the pain, injury and loss of amenity suffered by Omar Mohidin consisted, at most, of his feeling upset for a few days. I shall consider the claims for aggravated and exemplary damages below.
So far as Basil Khan is concerned, Dr Lord was informed by Basil Khan that he had been picked on because of his religion. He was distressed and upset, and did not leave his house for a month, because he was scared of the Police. He "did not go to College or socialise or anything." He would sit at home talking to his mother and both would be crying. He said that he had dreams and nightmares about it. If a police car came on to his estate he would pull the windows, close the curtains and have a sense of breathlessness. He would have dreams, relive the incident and wake up terrified. The nightmares continued for about 12 months.
He said that he did not sleep for a week, lost his appetite and increased his consumption of cigarettes. . He first emerged from his parents' house four weeks after the incident. At the date of the report (March 2011) he remained suspicious and paranoid of the Police, but otherwise the effects of what had occurred had worn off within 18 months of June 2007.
Dr Lord considered that he had suffered from hyper-arousal, had re-experienced phenomena and had suffered emotional numbness and de-realisation as a result of post-traumatic disassociation. He concluded that he had suffered post traumatic stress disorder (Code 309.81 in the same Diagnostic Manual) for a year, with some remaining vestigial symptoms of automatic hyper arousal and an exaggerated startle response. He considered that it fell into the Moderate (B) category in the Judicial Studies Board guidelines. He had largely recovered and would have no future disabling symptoms.
The effect of Dr Jarman's report is summarised above. In the joint report Dr Lord was frank that his diagnosis depended on what he had been told by Basil Khan.
As it was in the case of Omar Mohidin, it is important to consider the evidence relating to Basil Khan's activities after the incident. He was stopped on Edgware Road at 5.40 pm on 4th June 2007 in the company of Ahmed Hegazy. He was seen on 23rd June 2007 at 12.15 pm on Hallfield Road, which is about 10 minutes away. He was stopped and searched on Edgware Road on 4th July 2007 at 3.15 and again at 7.00 pm. When these were put to him, he said that he had meant that he did not go out to socialise, and that he would go onto Edgware Road to get a bus to his father's house in Pimlico.
In the light of that evidence, it is plain that Dr Lord had been misled by Basil Khan about the effects of the incident. Further, the evidence of PC Davis and PC Arno shows that Basil Khan had no fear of the Police on the occasions when they spoke to him.
I find that Basil Khan was shaken up and distressed by the events in the carrier, but that he was well enough to leave the house, and often, within 3 days. I do not accept that he had the psychiatric symptoms claimed.
So far as Ahmed Hegazy is concerned, he described himself to Dr Sen as someone who before the events of 1st June 2007 was "kind and nice, and who liked to joke and laugh a lot." He also described hobbies of going to the cinema, playing snooker and football. He said that he liked going on holidays and had friends. He said the memories of what had happened on 1st June 2007 kept coming back to him. He now liked to be on his own rather than in groups. He had lost trust in others and now lived from day to day. He would get stressed and distracted easily. He too complained of the effect on him of the trial at the Crown Court.
This account was given of his forensic history as at 31st May 2011
"Mr Ahmed Hegazy remembered being arrested a few times before the incident of 1st June 2007. After the incident, he had been involved in a few incidents like fights on the streets, one fight in a hotel with another hotel worker. He remembered being a bit drunk at the time and was charged with common assault. He has also been charged with possession of cannabis…….he also has a conviction for robbery of a mobile phone, for which he received a Community Order and had to have contact with the youth offending team. He has not yet been in prison."
Dr Sen's opinion was that since the incident he had shown signs and symptoms consistent with Post Traumatic Stress Disorder ("PTSD"). He had experienced intrusive flashbacks, vivid memories, and distress when he encountered the Police. He avoided the company of others, felt emotionally detached from others and could make no plans. He had hypervigilance and difficulties in concentration and sleep, and could get angry easily. They were all classic symptoms of PTSD. The trial at the Crown Court exacerbated these problems. As a result he had given up the B Tech course he was doing at the time of his arrest, and had not felt motivated enough to go back to University, and had lost 4 years of his life. His symptoms were of moderate severity and he also suffered from a depressive disorder. Both were attributable to the events of 1st June 2007. Dr Sen considered that he was in urgent need of psychiatric treatment in the form of anti-depressants and counselling. If he were to have 6 months treatment, there was an optimistic prognosis. His PTSD fell in the moderately severe range in the Judicial Studies Board guidelines.
In a further report of 28th November 2014, for which he had examined Ahmed Hegazy at HMP Wandsworth, Dr Sen addressed his medical and prison records. He concluded that he was still suffering from PTSD. He had not engaged in the counselling which Dr Sen had advised him to receive.
Dr Jarman wrote his report after seeing Ahmed Hegazy twice at HMP Wandsworth. He wrote a lengthy report. He found Ahmed Hegazy to be an unreliable historian. He noted that within a few days of 1st June 2007, he was attacked by others with baseball bats, which must itself have been frightening. He points out that he had never taken the anti-depressants recommended to him, and had minimised his drug use to Dr Sen. Dr Jarman considered that his low mood, feelings of stress, poor memory, lack of motivation and apathy are all associated with chronic cannabis use, which can also produce symptoms of paranoia. He had failed to accept Dr Sen's advice to have counselling and take anti-depressants. He rejected the diagnosis of a depressive disorder. He pointed to his criminal history and heavy use of cannabis as causing a low mood.
Dr Sen rejects Dr Jarman's diagnosis, and maintains that appearing in his reports.
My conclusions are as follows. Dr Sen's original report gave a very short account of Ahmed Hegazy's criminal record. It omitted the two concurrent suspended sentences of imprisonment in 2009. I also find it noteworthy that at no time in that report did Dr Sen ever consider whether the fact that Ahmed Hegazy was continuing to commit criminal offences was relevant to his diagnosis. While his second report addresses adjudications made in prison, and while it deals with the facts of the serious robbery for which he was imprisoned in September 2013 (which I have described above) his only comment on that is this
" the prolonged nature of his mental health symptoms as well as other aggravating features like the increase in the pattern and quantity of his cannabis use and the escalation in the pattern of the offending leading to prison sentences, which would act as further traumatisation experiences, leads me to be more guarded about Mr Ahmed Hegazy's prognosis."
There is nothing in that passage or elsewhere which seeks to consider whether his carrying out the serious and violent robbery which he did, and which was a joint offence, is consistent with PTSD or a depressive disorder. Given the fact that his description of his symptoms was that he sought to avoid the company of others, that is a very surprising omission, and one which causes me to have grave reservations about Dr Sen's approach.
I prefer Dr Jarman's opinion. I am quite prepared to accept that Ahmed Hegazy has suffered from low mood and the other symptoms described, but I do not accept that they were caused by PTSD or depressive illness caused by the events of 1st June 2007. He has been a heavy user of cannabis, and had started his criminal activities before the incident in question. It follows that I reject the claim that Ahmed Hegazy suffered PTSD or depression as a result of the incident on 1st June 2007.
His claim for special damages would also have failed. It is for the cost of counselling which he has not used, despite repeated advice.
(iv) The effect of the Crown Court trial of the officers on the Claimants
I must also say something about the events at the Crown Court trial. There can be no doubt at all that being a witness undergoing robust cross examination, in which, as was the case here, each Claimant was challenged on the basis that he was a liar, and was after compensation, can be difficult to deal with. Having sat as a circuit and senior circuit judge for 10 years before my appointment to the Queen's Bench Division, and having presided over large numbers of criminal trials, I have seen many times the effects which the experience can have on even the most apparently robust witnesses.
But it is the right of any Defendant in a criminal trial to seek to challenge the evidence given against him which he disputes. I asked Ms Kaufmann during her opening and closing submissions how the lawfully conducted defence of a man charged with serious offence could amount to tortious conduct. Ms Kaufmann suggested that the Defendant was somehow vicariously responsible. But that assumes that the conduct was tortious, and that it was carried out in the course of the employee's employment. The police officers against whom the Claimants had made allegations, were being prosecuted on the basis that those allegations were true. The Defendant Commissioner cannot be held responsible for the fact that the accused officers were robustly defended. Further, their appearance in court as Defendants in a criminal trial was not in the course of their employment. Similarly, the Defendant Commissioner had no standing whatever to prevent any witness being called at the trial. It follows in my judgement that the events at the criminal trial cannot be taken into account in any sense in the assessment of damages, unless they produced a renewal or exacerbation of any psychiatric effects already endured, which were caused by previous actionable tortious conduct. Such renewed effects would then be relevant, not because the actions which caused them to reoccur were tortious, but because the chain of causation from the original tortious infliction of harm had not been broken.
That being so, it is strictly unnecessary to go into arguments about the immunity from actions in tort in respect of evidence given in court, or in respect of the conduct of a criminal defence by counsel (on which see the very recent discussion in South Wales Police v Daniels & Ors [2015] EWCA Civ 680 per Lloyd-Jones LJ at [27]-[48]). However I do consider that it would be a very novel approach to give a cause of action in tort, not to a Defendant alleging that the prosecution is malicious or amounts to misfeasance in public office, or to a Defendant complaining that his advocate was negligent, but to a witness who simply alleges that those who challenged his account in court did so trenchantly. Further, the fact that Inspector Allmey and Inspector Davis gave evidence whose veracity is challenged, cannot be the subject of an action in tort - see Darker v Chief Constable of the West Midlands Police [2001] 1AC 435 and South Wales Police v Daniels & Or at [42]. That being so, it is another reason why I cannot accept that Ms Kaufmann's argument that the Defendant Commissioner was vicariously liable for his officers' conduct at the trial is of any substance. Vicarious liability is only relevant if there has been an actionable tort: but there was none so far as the Crown Court trial was concerned.
v) Damages for personal injury, false imprisonment, aggravated and exemplary damages.
I had great assistance from all counsel, for which I am grateful, on this topic. All agreed that three heads were to be considered:
i) Basic: this will include damages for false imprisonment and for the physical effects of any assault ;
ii) Aggravated damages;
iii) Exemplary damages.
I was referred to the guidance on basic damages for false imprisonment in the leading case of Thompson and Hsu v Commissioner of Metropolitan Police [1997] EWCA Civ 3083 [1998] QB 498 (CA) at pages 514D-516B. That gives a starting point (in February 1997 values) of £ 500 for the first hour in a "straightforward case of wrongful arrest and imprisonment". While an additional sum is to be awarded after the first hour, it is to be on a reducing scale so that it keeps the damages proportionate to those paid in personal injury cases, and gives a higher rate of compensation for the initial shock of the arrest. 24 hours of being wrongly held in custody would give an award (in February 1997 values) of about £ 3000. Those figures, bearing in mind the 10% uplift in Simmons v Castle [2012] EWCA Civ 1039 [2013] 1 WLR 1239 give current day figures of about £ 910 and £ 5500 respectively.
So far as Omar Mohidin is concerned, he was detained for about 5 minutes. Basil Khan was detained until 13.25 pm the following day, or 20 minutes under 20 hours. During that time he had also been strip searched. Ahmed Hegazy was detained until 3.40 am, or for about 10 hours. He too was searched, although he was not fully naked.
Dealing with false imprisonment as a basic award, I would value the claims as follows:
i) while Omar Mohidin was not detained for long, I place weight on the fact that it is the initial shock that attracts the higher rate of award, but it was still a very short period. The Claimant and Defendant's counsel submitted that I should value the basic award for false imprisonment at £ 200. I agree.
ii) Basil Khan was detained for a substantial period. I must have regard to the fact that he was strip searched. It was common ground that it was a breach of the PACE Code of Practice C (Annex A paragraph 11) to strip search a 16 year old, but as noted already, the custody sergeant mistakenly but reasonably believed that he was older. Ms Kaufmann put the figure at £4500, Mr Beggs QC at £ 4200, and Mr Hardy put it at £ 4000 for the whole period of detention. I agree with Ms Kaufmann's suggested valuation. I value his basic award at £ 4500. He is also entitled to damages for assault. I have found that he suffered some minor injury, described above, which would not have affected him after 7 days at most. Applying the Judicial College Guidelines to his injuries I value his award for pain suffering and loss of amenity at £ 250.
iii) So far as Ahmed Hegazy is concerned, were I to have found his claim proved, I would have valued it as follows. He was detained for 10 hours, which included a search. I value his basic award at £3000. As to his injuries, they were painful, but the effects would have worn off within 7 days. Applying the Judicial College Guidelines to his injuries I value his award for pain suffering and loss of amenity at £500.
I turn now to the question of aggravated damages. It is necessary to return to the guidance in Thompson and Hsu to address the relationship between basic damages, aggravated damages, and exemplary damages. At page 516B-G Lord Woolf MR said:
"(8) If the case is one in which aggravated damages are claimed and could be appropriately awarded, the nature of aggravated damages should be explained to the jury. Such damages can be awarded where there are aggravating features about the case which would result in the plaintiff not receiving sufficient compensation for the injury suffered if the award were restricted to a basic award. Aggravating features can include humiliating circumstances at the time of arrest or any conduct of those responsible for the arrest or the prosecution which shows that they had behaved in a high handed, insulting, malicious or oppressive manner either in relation to the arrest or imprisonment or in conducting the prosecution. Aggravating features can also include the way the litigation and trial are conducted. [The aggravating features listed take account of the passages in the speech of Lord Reid in the case of Broome at 1085 and Pearson LJ in McCarey v Associated Newspapers Limited [1965] 1 QB 86 at 104.
(9) The jury should then be told that if they consider the case is one for the award of damages other than basic damages then they should usually make a separate award for each category. [This is contrary to the present practice but in our view will result in greater transparency as to the make up of the award].
(10) We consider that where it is appropriate to award aggravated damages the figure is unlikely to be less than a £1,000. We do not think it is possible to indicate a precise arithmetical relationship between basic damages and aggravated damages because the circumstances will vary from case to case. In the ordinary way, however, we would not expect the aggravated damages to be as much as twice the basic damages except perhaps where, on the particular facts, the basic damages are modest.
(11) It should be strongly emphasised to the jury that the total figure for basic and aggravated damages should not exceed what they consider is fair compensation for the injury which the plaintiff has suffered. It should also be explained that if aggravated damages are awarded such damages, though compensatory are not intended as a punishment, will in fact contain a penal element as far as the defendant is concerned.
(12) Finally the jury should be told in a case where exemplary damages are claimed and the Judge considers that there is evidence to support such a claim, that though it is not normally possible to award damages with the object of punishing the defendant, exceptionally this is possible where there has been conduct, including oppressive or arbitrary behaviour, by police officers which deserves the exceptional remedy of exemplary damages. it should be explained to the jury:
(a) that if the jury are awarding aggravated damages these damages will have already provided compensation for the injury suffered by the plaintiff as a result of the oppressive and insulting behaviour of the police officer and, inevitably, a measure of punishment from the defendant's point of view;
(b) that exemplary damages should be awarded if, but only if, they consider that the compensation awarded by way of basic and aggravated damages is in the circumstances an inadequate punishment for the defendants.
(c) that an award of exemplary damages is in effect a windfall for the plaintiff and, where damages will be payable out of police funds, the sum awarded may not be available to be expended by the police in a way which would benefit the public. [This guidance would not be appropriate if the claim were to be met by insurers].
(d) that the sum awarded by way of exemplary damages should be sufficient to mark the jury's disapproval of the oppressive or arbitrary behaviour but should be no more than is required for this purpose.
(13) Where exemplary damages are appropriate they are unlikely to be less than £5,000. Otherwise the case is probably not one which justifies an award of exemplary damages at all. In this class of action the conduct must be particularly deserving of condemnation for an award of as much as £25,000 to be justified and the figure of £50,000 should be regarded as the absolute maximum, involving directly officers of at least the rank of superintendent.
(14) In an appropriate case the jury should also be told that even though the plaintiff succeeds on liability any improper conduct of which they find him guilty can reduce or even eliminate any award of aggravated or exemplary damages if the jury consider that this conduct caused or contributed to the behaviour complained of."
In Rowlands v Chief Constable of Merseyside [2006] EWCA Civ 1773 [2007] 1 WLR 1065 Moore-Bick LJ said at [26]
"It is now generally recognised that an award of aggravated damages is essentially compensatory in nature, notwithstanding the fact that it may have a punitive effect by increasing the overall amount the defendant is ordered to pay. That was explicitly acknowledged by Lord Woolf M.R. in Thompson as one can see from the passages cited earlier. Whether damages awarded to compensate the claimant for distress, humiliation and injury to feelings are treated as part of the basic damages (as Thomas L.J. suggested in Richardson v Howie [2004] EWCA Civ 1127, (unreported, 13th August 2004)) or are separately identified by the name of aggravated damages, the important factor to bear in mind is that they are primarily intended to be compensatory, not punitive. It follows that any injury for which compensation has been given as part of the award of basic damages should not be the subject of further compensation in the form of an award of aggravated damages. However, the distinction between basic and aggravated damages will continue to have a part to play as long as the right to recover for intangible consequences such as humiliation, injury to pride and dignity as well as for the hurt caused by the spiteful, malicious, insulting or arrogant conduct of the defendant attaches to some causes of action and not others."
Are there features in this case which should aggravate the basic award in line with the principle set out above? In Omar Mohidin's case, the way he was dealt with was not only humiliating, and involved the implied threat of violence, but was patently intended to be so. It was also insulting in a particularly unpleasant way, because, as I have found, he was racially abused. Ms Kaufmann sought to persuade me that the fact that PC Jones fabricated evidence and lied at his trial, was also an aggravating feature. But the entries in his notebook (which must be taken to be untrue) had no effects on Omar Mohidin at all, who was not arrested or charged. PC Jones' evidence at trial was not part of the events on 1st June 2007. Further, it must be remembered that at trial, PC Jones was being prosecuted after an investigation by the DPS of the Metropolitan Police. It cannot be right that the Defendant can be said to have caused additional harm to Mohidin by the fact that PC Jones denied the allegations against him, made by the Defendant.
However it is right to say that after receipt of the letter before action from the solicitors from Omar Mohidin and Basil Khan, on 9th September 2011, the Directorate of Legal Services of the Defendant replied, resisting the claim. However that letter expressly eschewed making any positive case, but chose instead to make points about the credibility of the Claimants. The Defence and Amended Defence adopted the same approach.
Mr Beggs QC sought to persuade me that the level of aggravated damages should be mitigated by the fact that Omar Mohidin had convictions and had been in dealings with the Police before. As at 1st June 2007 he had no convictions. On reflection, I am unpersuaded that that should count as a factor in mitigation of damage. It bears with it the implication that the racist humiliation of a youth is somehow less serious if he has come to the attention of the Police before. This is a classic case of a police officer failing to exercise proper judgment or discretion and allowing his temper to get the better of him, and in a particularly unpleasant way. Nor do I consider that Omar Mohidin's award should be reduced because of any conduct on his part. By the time the TSG carrier had arrived at the junction of Edgware Road and Sussex Gardens, some time had elapsed since the gestures and shouting by Omar Mohidin. He did nothing whatever when approached by PC Jones which justified what occurred next.
I do not consider that the basic award provides adequate compensation for the racist humiliation inflicted on Omar Mohidin. I am satisfied that there should be an award of aggravated damages, or on that alternative basis canvassed in Rowlands an award for distress, humiliation and injury to feelings . I turn now to its valuation. Ms Kaufmann referred me to an employment case: Vento v Chief Constable of Yorkshire Police No 2 [2002] EWCA Civ 1871 [2003] Po LR 171 [2003] ICR 318 [2003] IRLR 102. In that case at [7]- [10] Mummery LJ, giving the judgement of the court, set out the facts in outline:
"Outline Facts
7. Ms Vento was born on 15 February 1967. She had a long held ambition to join the police force, but she was unable to do so before the height requirements were relaxed in 1995. On 11 December 1995, at the age of 28, she joined the police force as a probationary constable and began training to be an ordinary police constable. At that time she was married with 3 children. Initially she had the support of her husband, though he did not expect her to succeed in combining her responsibilities as a mother with those of a trainee police officer. The couple separated in 1996 and they were divorced in 1999.
8. In general, Ms Vento made good progress during her first year in her paperwork and in her work relationships. But in the first half of 1997 a series of incidents occurred when fellow police officers criticised her conduct, her personal life and her character in an unwarranted, aggressive and demoralising manner. The treatment was found to be less favourable than a hypothetical male officer would have received in the same circumstances. The tribunal inferred that the less favourable treatment was on the ground of her sex.
9. At first she coped well with the situation and with the effects of the recent breakdown of her marriage. On 12 May 1997, however, she was diagnosed as clinically depressed. She was given medication. She continued working until July 1997. She then went off work sick and was absent for 3 months. Although still on medication, she returned to work in October 1997. Further incidents of discrimination occurred following which she suffered suicidal impulses. The discriminatory treatment of her contributed to her depression and affected her ability to form relationships. On 8 December 1997 she was dismissed on the ground of alleged lack of honesty and lack of performance.
10. The Employment Tribunal found that Ms Vento did not have a vulnerable personality, which would increase the risk of failing to complete a full career in the police force to the retirement age of 55. It found that she would have successfully completed her probation and qualified as a police constable. It also found that she had limited career prospects. She was only likely to engage in clerical work in the future."
The Employment Tribunal ordered the respondent Chief Constable to pay a total sum of £257,844 compensation for sex discrimination. Of that total, the sum of £165,829 was awarded for loss of future earnings, calculated on the basis that there was a 75% chance of Ms Vento working in the police force for the rest of her career. The balance of the compensation (£74,000) was awarded for non-pecuniary loss: as to £65,000, for injury to feelings (including £15,000 aggravated damages) and, as to a further £9,000, for psychiatric damage. Interest of £18,015 was also ordered. The Employment Appeal Tribunal upset the awards. It remitted the calculation of loss of future earnings for rehearing by a freshly constituted Employment Tribunal on the ground that there was an error of law in having proceeded on the basis that Ms Vento had a 75% chance of working in the police force for the rest of her career. As to compensation for non-pecuniary loss, the Appeal Tribunal held that the award of £65,000 for injury to feelings (including aggravated damages) was so excessive as to amount to an error of law. The Appeal Tribunal substituted a total award of £30,000 for injury to feelings, to include £5,000 aggravated damages.
The Court of Appeal restored the figure for financial loss, substituted for the decision of the Employment Tribunal the sum of £18,000 for injury to feelings, plus £5,000 for aggravated damages, and left the damages for psychiatric injury at £9,000.
At paragraphs [65]- [68] guidance was given by Mummery LJ on the bands of compensation for injury to feelings:
"Guidance
65. Employment Tribunals and those who practise in them might find it helpful if this Court were to identify three broad bands of compensation for injury to feelings, as distinct from compensation for psychiatric or similar personal injury.
(i) The top band should normally be between £15,000 and £25,000. Sums in this range should be awarded in the most serious cases, such as where there has been a lengthy campaign of discriminatory harassment on the ground of sex or race. This case falls within that band. Only in the most exceptional case should an award of compensation for injury to feelings exceed £25,000.
(ii) The middle band of between £5,000 and £15,000 should be used for serious cases, which do not merit an award in the highest band.
(iii) Awards of between £500 and £5,000 are appropriate for less serious cases, such as where the act of discrimination is an isolated or one off occurrence. In general, awards of less than £500 are to be avoided altogether, as they risk being regarded as so low as not to be a proper recognition of injury to feelings.
66. There is, of course, within each band considerable flexibility, allowing tribunals to fix what is considered to be fair, reasonable and just compensation in the particular circumstances of the case.
67. The decision whether or not to award aggravated damages and, if so, in what amount must depend on the particular circumstances of the discrimination and on the way in which the complaint of discrimination has been handled.
68. Common sense requires that regard should also be had to the overall magnitude of the sum total of the awards of compensation for non-pecuniary loss made under the various headings of injury to feelings, psychiatric damage and aggravated damage. In particular, double recovery should be avoided by taking appropriate account of the overlap between the individual heads of damage. The extent of overlap will depend on the facts of each particular case."
In 2010, those bands were uprated in Da'Bell v NSPCC [2009] UKEAT 0227_09_2809, [2009] IRLR 19, [2010] IRLR 19 so that the top bracket becomes £18,000 to £30,000, the second bracket £6,000 to £18,000, and the third bracket £600 to £6,000. Some further uprating for changes in the value of money will be required- see Roberts v Bank of Scotland Plc (Rev 1) [2013] EWCA Civ 882 at [62] per Jackson LJ.
It is worth seeing how Mummery LJ characterised what had occurred to Ms Vento at [63]-[64]
?63. In our judgment, taking account of the level of awards undisturbed on recent appeals to the Appeal Tribunal and of the JSB Guidelines, the fair, reasonable and just award in this case for non-pecuniary loss is a total of £32,000, made up as to £18,000 for injury to feelings, £5,000 aggravated damages and £9,000 for psychiatric damage, which took the form of clinical depression and adjustment disorder lasting for 3 years (and against which there was no appeal). We also bear in mind that there was no finding by the Employment Tribunal that the injury to Ms Vento's feelings would continue after the psychiatric disorder had passed. During the period of psychiatric disorder there must have been a significant degree of overlap with the injury to her feelings.
64. It should be understood that the reduction in the amount of compensation is made solely to bring the global award more into line with conventional wisdom on levels of compensation for non-pecuniary loss generally. The reduction does not mean that this Court takes a less serious view than the Employment Tribunal did of the persistent unlawful discrimination suffered by Ms Vento at the hands of her colleagues in the Police Service, which is expected to set an example of abiding by the law, including the law governing all forms of discrimination."
Ms Kaufmann contends that this case lies towards the lower end of the middle Vento bracket (now worth £7,000 to £12,000 at current prices). Mr Beggs QC submitted that the appropriate award for aggravated damages, if I concluded that one was justified, was a maximum of £ 300. Mr Hardy submitted that the maximum award should be £ 1000.
I reject Ms Kaufmann's approach. In my judgement, there is no comparison to be drawn between Omar Mohidin's case and Ms Vento's. Ms Vento had endured discrimination over a substantial period at her work. By contrast, Omar Mohidin had endured racist abuse and threats for a few minutes, albeit that it was direct and aggressive. As I have found, it caused him no significant effects thereafter. I consider that that bears out the fact that reading across between awards for a course of conduct (as in the second Vento band) to a one off occurrence of this kind can be difficult. I do however accept her submission that I should not be constrained by any choice of ratio between the basic award and the overall award including aggravated damages. The gravamen of this incident was not that Omar Mohidin was detained for long or suffered injury. It is that he was humiliated and racially abused by a police officer. In Thompson and Hsu at page 516E-F at Guideline 10, Woolf MR addressed the question of the ratio:
"………We do not think it is possible to indicate a precise arithmetical relationship between basic damages and aggravated damages because the circumstances will vary from case to case. In the ordinary way, however, we would not expect the aggravated damages to be as much as twice the basic damages except perhaps where, on the particular facts, the basic damages are modest."
This is a case where, on the traditional (aggravated damages) approach, the basic damages are indeed modest. I consider that this is a case where there is no upper limit of the kind described. Indeed, if one adopts the approach of Thomas LJ as he then was in Richardson v Howie [2004] EWCA Civ 1127, as referred to in Rowlands, then the distress to feelings would be treated as part of the basic award. The effect is therefore that one will end up with a proper overall award, whichever route one follows.
But I also reject Mr Beggs' and Mr Hardy's submissions. In my judgement, the Vento guideline is helpful on the level of award where the Claimant has suffered a one off occurrence, which this was so far as he was concerned. I would put this case towards the lower end of the third bracket, but not right at the bottom. I consider that Omar Mohidin is entitled to an award of £2300 damages in respect of the humiliation and distress he was caused, which on the traditional basis includes both basic and aggravated damages, or on the alternative approach is one of basic damages. His overall compensatory award, inclusive of the award for false imprisonment, is thus one of £2500. I shall address the issue of exemplary damages in due course.
So far as Basil Khan is concerned, who was only 16 years old at the time, he endured a wrongful arrest, a blow with some abuse from one officer, and a sustained assault from another, which was accompanied by racist abuse, and included him being grabbed fiercely round the neck, his being pulled on to the floor, and his being made to kneel quite unnecessarily in handcuffs, with the intention of humiliating him. All of that sustained assault and humiliation took place under the eye of the officer in charge, who let it continue. False allegations were made about him on his arrival at the Police Station, which led to him being strip searched. While I have rejected his case on whether he sustained any psychiatric injury, and have concluded that he made a rapid recovery, this is a bad case.
Ms Kaufmann drew my attention to those factors. She also reiterated her position about the events at the trial, and also submitted that the Defendant had been at fault in failing to disclose the audio transcript at that trial of the discussion between Inspector Cruickshank and Basil Khan. She complains that the acquittal of the officers was no barrier to the compromising of the claim by the Defendant.
She submitted that an award of £ 14,000 to £ 21,000 was appropriate under the middle Vento band. Mr Beggs QC invited me to look to a figure of £ 5000 for aggravated damages. Mr Hardy's figure was "rather less than" £6000.
As in Omar Mohidin's case, this is one where the basic award is a modest one. I adopt the same approach to paragraph 10 of the guidance in Thompson and Hsu and also refer to the alternative route canvassed in Rowlands of looking at distress to feelings as part of the basic award.
I do not accept that the late disclosure of the audio transcript was anything other than an error of the type that often happens with disclosure at criminal trials. Otherwise I accept the general thrust of Ms Kaufmann's submissions, although not her choice of Vento band. In my judgment, this case lies at the top of the third band. The racial abuse and humiliation visited on Basil Khan, and the physical indignities were serious, but happily did not have any long term effects. It is again a one off occurrence, but a very bad one. Given the change in the value of money since De' Ball v NSPCC in September 2009 (approximately 20% in RPI terms), I value this element, whether on the traditional or alternative basis in Rowlands, as £7200. That gives an overall compensatory award, including the damages for assault and false imprisonment, of £11,950.
I must consider whether that award should be reduced because of Basil Khan's conduct in approaching the TSG carrier shouting obscenities and making gestures. It was foolish and objectionable, but it did not in any sense justify what happened next. The level of damages which his case attracts is justified because of what PC Jones and Sergeant Wilson then elected to do in the van. I do not consider that the award should be reduced.
In Ahmed Hegazy's case, were he to have established liability, I would approach it as follows. He was falsely imprisoned, and then forced on to the floor of the Police van. It was no doubt humiliating, and was inflicted by police officers. In this case also, I would consider that the basic award of damages for the assault would otherwise be modest. However unlike his fellow Claimants, I am not satisfied that he was the subject of any racial abuse. Subject to arguments about contribution, in my judgement the proper award lies towards the upper range of the third Vento band, whether as aggravated damages or under the alternative approach. I would have valued the aggravated damages at £ 5,000, making a total award, including the basic element, of £8,500.
In Ahmed Hegazy's case, I consider that his decision to struggle so violently led to him being handcuffed, placed on the floor of the van and kept under restraint. If his arrest was unlawful, then that is the cause of what happened to him, but I consider that his excessive reaction and the subsequent restraint of him, led to him sustaining more serious injuries, and greater distress. I would accordingly have reduced his aggravated damages (or if one prefers the Vento award for distress to feelings) to £3500, making his award, had I found for him, of £7,000.
I shall now address the question of exemplary damages in the light of paragraph 12 of the guidance in Thompson and Hsu. While I accept that this is a case where there is evidence of oppressive behaviour by PC Jones to Omar Mohidin, and by PC Jones and Sergeant Wilson, to Basil Khan, I consider that the awards set out above are not an inadequate punishment for the Defendant.
I therefore decline to make any additional award by way of exemplary damages. I would have taken the same approach to Ahmed Hegazy's case.
Other claimed heads
Ms Gerry accepted that the Race Relations Act claim on behalf of Ahmed Hegazy would add nothing to any award of damages. I have in any event concluded that nothing that occurred to Ahmed Hegazy arose out of any racial discrimination of the kind dealt with under that Act.
An award of damages is available under the Human Rights Act 1998 for breaches in accordance with section 8 of the Act:
"8 Judicial remedies.
(1) In relation to any act (or proposed act) of a public authority which the court finds is (or would be) unlawful, it may grant such relief or remedy, or make such order, within its powers as it considers just and appropriate.
(2) But damages may be awarded only by a court which has power to award damages, or to order the payment of compensation, in civil proceedings.
(3) No award of damages is to be made unless, taking account of all the circumstances of the case, including—
(a)any other relief or remedy granted, or order made, in relation to the act in question (by that or any other court), and
(b) the consequences of any decision (of that or any other court) in respect of that act,
the court is satisfied that the award is necessary to afford just satisfaction to the person in whose favour it is made."
It follows that damages may only be awarded for breaches of Convention rights if the court is satisfied that it is necessary to do so to afford just satisfaction. In my judgement, the awards set out above do provide just satisfaction, and no additional award should be made.
It follows that the claims of Omar Mohidin and Basil Khan against the Defendant Commissioner succeed, and that of Ahmed Hegazy fails. I award Omar Mohidin damages of £2500, and Basil Khan damages of £11,950.
Q Contribution and indemnity
Mr Beggs QC submitted that, given the number of potential findings, the issue of contribution and indemnity should be postponed.
However not all aspects of the Part 20 claims require postponement. In the case of the Fourth and Sixth Parties, Mr Steven White and Neil Brown, the effect of the judgement must be that the Part 20 claim for an indemnity or contribution must be dismissed in each case.
So far as Omar Mohidin's claim is concerned, the findings made above do not attribute any blame to the Fifth Party Mr William Wilson. It follows that the Part 20 claim against him for an indemnity or contribution must be dismissed insofar as it relates to the claim of Omar Mohidin.
So far as Ahmed Hegazy's claim is concerned the findings made above do not attribute any blame to the Third Party Mark Jones or the Fifth Party William Wilson. It follows that the Part 20 claim for an indemnity or contribution must be dismissed insofar as it relates to the claim of Ahmed Hegazy.
So far as the claim of Omar Mohidin is concerned, the Defendant still has a claim for indemnity or contribution from Mark Jones. So far as the claim of Basil Khan is concerned, the Defendant still has a claim for indemnity or contribution from Mark Jones and William Wilson.
All of the above may also involve issues about costs.
I therefore accept Mr Beggs QC's submissions. However I do not accept that there must be a further hearing. It is to be hoped that, if agreement cannot be reached, the matter can be dealt with by written submissions. The next section of this judgement is intended to facilitate that process.
R Order
I therefore invite Counsel's submissions on costs and the orders to be made. Subject to any submissions, I see no reason why judgements for the First and Second Claimants against the Defendant Commissioner, and for the Defendant Commissioner against Ahmed Hegazy, cannot be entered now.
I had hoped that the parties would be able to make submissions on the appropriate Order and on the issue of costs in the light of the circulated draft judgement. While I have received some submissions which address the points of criticism above about case preparation, I have received none directed to the terms of any Order, nor about the actual making of an award of costs.
Given the issues that appear to be live concerning responsibility for the inclusion of extraneous matter in the bundles, there may be issues about the payment of costs as between various parties.
I therefore order that
a) Within 2 weeks of the date of handing down, the First, Second and Third Claimants must make submissions in writing on;
i) the terms of any orders arising from this judgement;
ii) any claims for costs by them against the Defendant or any of the Third to Sixth Parties .
b) Within 3 weeks of the date of handing down, the Defendant must make submissions in writing on any orders it seeks,
i) including any orders under CPR Part 20 against the Additional Parties Mark Jones and William Wilson,
ii) and including any orders for costs which the Defendant seeks against any of the Claimants, and against any of the Third to Sixth Parties;
and setting out any objections the Defendant has to the orders sought by the First, Second or Third Claimants;
c) Within 4 weeks of the date of handing down, the Third to Sixth Parties must make submissions in writing on any orders any of them seeks
i) relating to the CPR Part 20 claims made against each of them by the Defendant;
ii) against any of the First, Second or Third Claimants, including any relating to any Orders to be made, and including any application for costs;
and they must set out any objections to any Orders sought against any of them, or awards for costs sought against them, by any of the First, Second and Third Claimants, or by the Defendant.
d) Within 6 weeks of the date of handing down
i) the First, Second and Third Claimants must file any submissions made in response to those made by the Defendant or any of the Third to Sixth Parties
ii) The Defendant must file any submissions made in response to those made by any of the Third to Sixth Parties.
Note 1 Territorial Support Group [Back]
Note 2 Directorate of Professional Standards [Back]
Note 3 Smirnoff Ice is a drink consisting of vodka and mixer drink . It has an alcohol content of about 5% [Back]
Note 4 A briefing document with names of those suspected of criminality, information about crime in the area and so on. [Back]
Note 5 Not that there is any reason to think that injuries in the Premier League are any different in nature or extent from those sustained at any level of professional football [Back]
Note 6 i.e. unmixed vodka with an alcohol percentage of c 37.5% [Back]
Note 7 See diagram of TSG carrier supra [Back]
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MR JUSTICE JAY:
This is an appeal against the decision of Master Leslie given at a case management conference on 21 July 2015. He refused the application brought by the claimant for permission to rely upon the expert evidence of an architect. That evidence was relevant to late-advanced claims for maintenance and running costs, as well as for property adaptation.
This case arises out of a road traffic accident which took place on a pedestrian crossing on the Finchley Road in Temple Fortune on 5 November 2010. The accident was caused by the negligent driving of the defendant and liability is not in dispute.
At the material time the claimant was 27 years of age. It was a dry evening and she was walking to a local synagogue for a Friday night service. The exact path she took, whether she, for example, parked a car, and the location of her flat in relation to the synagogue are matters which are unclear to the court at this stage.
At all events it is clear that the claimant had a pre-existing genetic condition, which is known as osteogenesis imperfecta. In consequence her skeleton has not developed properly and in her teenage years she was prone to fractures. However, her last fracture occurred at the age of 14, and at the time of the accident the claimant was in gainful employment.
In consequence of the accident the claimant was knocked to the ground, the emergency services were called and she was taken to the Royal Free Hospital in Hampstead. She was however discharged the same evening.
About two weeks later the claimant's physical condition, on her version of events, deteriorated very significantly. She is now left - and I emphasise on her version of events - severely disabled and effectively wheelchair-bound. It is her case that whereas before her accident she managed to live in a first-floor flat, she now requires one-storey accommodation: hence the accommodation claim.
There is a mass of medical evidence which was before Master Leslie. The evidence is from orthopaedic experts, neurological experts, neurosurgeons and psychiatrists. There is also expert evidence from consultants in pain management.
It would be fair to say, without pre-judging the issue, that this case is complex and has baffled some of the experts. The basis thesis which will be advanced by the claimant at trial is that although the precise causal mechanism may not be wholly clear, the accident set in train a series of anatomical or physiological events which have clearly left her severely disabled.
The defendant's case is that viewed in these physiological terms the claimant's injuries are inexplicable. There must be another reason for them. And experts in pain management and psychiatry have hypothesised as to what those might be. Of course underlying the defendant's case is the suggestion, scarcely thinly veiled, that the claimant is a malingerer.
I should emphasise that it is not possible for this court to reach any firm conclusions as to the rights and wrongs of the parties' respective medical cases on the available evidence. This is because the trial process has not started; by definition, therefore, the evidence has not been tested. All that the court could properly do is reach some preliminary views and impressions. It cannot properly reach any conclusions having weighed up all the evidence, including the oral evidence of the claimant.
However, there are some unusual features about this case. The claimant had a sad childhood with her parents dying prematurely. There are, I think it is fair to say, issues concerning her religious identity, her cultural identity. The impression she gives is that her life was entirely stable and happy before this accident. There are reasons to doubt whether she is right about that. However, any judicial concern about the claimant's case cannot be expressed with any greater force than I have just done. The court genuinely is and must be in a state of agnosticism.
Looking at the medical records which probably are the best guide to what was happening at various relevant points in time, though of course they are not infallible, it appears to be common ground that in 2002 the claimant was having problems with her ankles and underwent at least one operation. There are quite a few medical and related records for the year 2009. In March 2009 she saw her GP who noted that she had had a fusion to the right ankle which now felt painful. On 9 June 2009 her GP said in referring her for an orthopaedic opinion that she had developed bowing of the right leg and suffered from quite a lot of pain after walking only 10 metres. She used a stick for support.
On 17 June 2009 she made an application for disability living allowance. That was completed by her GP. Subsequently, there is reference in the papers to that application being unsuccessful.
On 24 June 2009 she made an application for rehousing. There is a fair amount of evidence in relation to that application. I have not seen the relevant form, but it appears that a doctor completed it and he/she must have done so on the basis of what was being imparted by the claimant. The claimant was saying that stairs are very difficult; she has difficulty walking any distances; she uses sticks and on occasion a wheelchair; there is 10 metres of walking, then pain.
The thrust of the application was that the claimant had special needs and in particular needs for ground floor accommodation. The position, as I have already indicated, is that she is living in a first-floor flat with a lift. Mr Julian Picton QC took me to other entries in the bundle which relate to June 2009. Mr John Greenbourne in his reply referred to an entry in a care report which was to the effect that before the accident she was restricted in her walking and standing tolerance to walking half a mile and standing 30 minutes. In my view, this is not quite the same as the form dated 24 June 2009.
Going back to the chronology, her GP was writing letters to the orthopaedic department in July 2009. On 10 August 2009 a claim form was sent to Camden from the GP which reinforced on my understanding the claim for ground floor accommodation. There was then a radio silence in the medical records. Indeed, I do not know on the basis of what has been put before me, and I suspect that Master Leslie did not know it either, what happened to the application for re-housing; but it is reasonable to infer from all the pressure that is on local authorities at the moment that that application has not been determined.
It is also unclear whether the claimant's symptoms were continuing between August 2009 and the date of the accident. At least two inferences are capable of being drawn: first, that there was no change between Summer 2009 and November 2010 and the Claimant is stoically awaiting the result of her application. Another interpretation is that the events of 2009 were (to use the vernacular) a blip, and that there was an improvement.
The difficulty for present purposes is that this issue has in part been generated by the claimant herself in that her witness statement is solemnly silent about these matters. It rather gives the impression that everything was fine and well over the whole of the relevant period, including the summer of 2009. I do find that somewhat forensically naive on her part, but then it may be wrong to read too much into the way these witness statements are prepared or to assume too much knowledge and understanding of claimants for whom the legal process is after all entirely unfamiliar. What I am saying in effect is that this is a forensic point which may or may not appeal to the court having heard and seen the claimant in due course.
The Master was taken to the relevant material by Mr Picton, and a transcript of the hearing is of course available. Mr Picton's submission in effect was that there was no real prospect of the claimant making good her accommodation claim. The Master's decision is quite brief, although I agree with Mr Picton that he is not required on this sort of occasion to give a detailed judgment. The parties' expectations must be different from those which they might reasonably have if the matter is considered at the level of High Court judge.
I set out the Master's reasons in full before I analyse them. He said this, missing out irrelevant words:
"I did not think it is reasonably required because I do not think the issue is likely to commensurate. The notion is that this young woman has had various serious problems with her bones: osteogenesis imperfect".
Mr Greenbourne then interjected: "Master, I am sorry to interrupt, but there is no suggestion by anybody that it is degenerative." The Master continues:
"No; I understand that, but it makes her vulnerable. Indeed she was vulnerable possibly or probably in 2009 when she suffered an accident to her ankle. As a result of that she applied for or was given some form of disability housing and so on and so forth. There would have come a time, no doubt the defendant will be saying, with some prospect of success, that this would have happened anyway. I simply cannot see that as a result of this accident whether - as is known, Scenario 1 or Scenario 2 arises - there is any real likelihood of the court saying that accommodation needs arise as a result of this accident. If they arise as a result of the accident, then the answer is that they might have arisen or would have arisen in any event as a result of her condition. Not reasonably required."
Mr Picton QC's very clear submission before me runs along these lines. He hints that if I were trying the matter myself I might be apt to reach a different conclusion. He emphasises rightly that this is an appeal and not a re-hearing. The Court of Appeal have said on at least two occasions that in relation to case management decisions the higher court should only interfere if the decision appealed against is plainly wrong. As Arden LJ pointed out in one case, the judge dealing with case management is usually better equipped to deal with these issues. Mr Picton, armed with that authority, submitted that the decision of Master Leslie was well within his case management discretion. In effect he applied Part 24 by analogy. There was incontrovertible evidence relating to 2009 which the claimant cannot surmount. Therefore, the court should not subject the Master's reasons to too close a textual analysis. It is not sufficient, said Mr Picton, that this court would itself have reached a different conclusion. One has to identify by analysis a flaw of principle in the Master's decision or conclude that it was plainly wrong.
In my judgment, these were attractive submissions but I cannot accept them. My starting point is the Master's reasons which in my view betray a varying emphasis. On the one hand, he appears to be saying that there is no real likelihood of the court concluding that the accommodation claim could succeed. On the other hand, he expresses himself far more tentatively, using phrases such as "with some prospect of success" and "might have arisen" or "would have arisen". That in my view is not altogether satisfactory.
In any event, I agree with Mr Greenbourne that there is a point of principle here. This decision was taken in the context of a case management conference, but in my view it is not the sort of case management decision to which Arden LJ is referring. Those decisions typically engage issues of discretion, and first instance tribunals must be permitted to get on with it and to reach these decisions without a proactive appellate approach.
The position is different here since the Master was effectively, at least on one interpretation of his reasons, applying a sort of Part 24 summary judgment test. That depends on an evaluation of all the available evidence seen in its proper context. There might be some room for differences of opinion, but there is no issue of discretion.
I accept as a matter of principle there might be circumstances in this sort of litigation where the court could properly say under the decision-making rubric of Part 35 of the CPR that expert evidence is not reasonably required because the underlying claim has no real prospect of success. Those cases, however, will be comparatively rare. Rarely in my view would this be a proper occasion for determining what are essentially acutely disputed matters of oral evidence, as well as of expert opinion. There may be weaknesses in parts of the claimant's case and her witness statement is, as I have already pointed out, far from satisfactory in one respect as to the deafening silence in relation to the events of the summer 2009, but her evidence has not been tested. None of the evidence in the bundle has been tested. This case depends acutely not just on expert opinion but on the court's assessment of the credibility and reliability of the claimant's account.
In my judgment, the Master reached the wrong decision; effectively I say for three reasons. First, his short reasons are not sufficiently clear and they vacillate between applying by implication the test in Part 24 and applying some different and weaker test. Secondly, on my view of the evidence (giving the Master some degree of latitude in his assessment of it) one cannot properly conclude that the accommodation claim has no real prospect of success. It is not so weak in the context of this personal injuries' claim that the claimant should effectively be closed out from court on the issue at an interlocutory stage. Thirdly (this point is related to the second point), there will only be rare occasions on which this sort of debarring exercise, using Part 24 by analogy, should appropriately be applied in circumstances where, as I have said, the evidence is of an oral character. The present case does not fall within that category of case.
It is common ground that the most significant part of the accommodation claim cannot be advanced without expert evidence. There was some debate at the Bar as to whether the claim for the costs of adaptation could be maintained without expert evidence, but that is in one sense peripheral to the main issue. The claim, therefore, logically and analytically falls into a different category to the employment claim, and the Master, in my view quite rightly, said that an employment consultant expert was not required. The claimant can advance this lady's loss of earnings without such an expert, which she cannot in relation to her accommodation claim under Roberts v Johnstone.
Looking at this case more broadly, two issues arise here. First, as to what exactly was the claimant's physical and psychological condition before the accident. Secondly, as to what would have happened but for the accident? I take Mr Greenbourne's point that the accommodation claim may not endure over the whole of the claimant's life as it were with a full life multiplier, but that is his fall-back position. His best case is that she would have sustained none of these losses if the events of November 2010 had not intervened. Even if Mr Greenbourne were forced to fall back onto his less ambitious case, this expert evidence would still be reasonably required.
For all these reasons, this appeal is allowed.
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MR JUSTICE HICKINBOTTOM:
Background
From 1990, Patrick Heesom ("Mr Heesom") was a local councillor, first on Clwyd County Council and then, following the reorganisation of local authorities in Wales, on Flintshire County Council ("the Council").
In 2009, a complaint was made to the Public Services Ombudsman for Wales ("the Ombudsman") about Mr Heesom's conduct as a councillor, under the procedure set out in the Local Government Act 2000 ("the 2000 Act"), which still applies in Wales although no longer in England. In a lengthy report, the Ombudsman found that there was evidence of breach of the Council's Codes of Conduct serious enough to warrant reference to the Adjudication Panel for Wales for adjudication by a case tribunal.
The matter was referred. The proceedings before the case tribunal were substantial, occupying nearly 60 hearing days over many months. In two decisions, issued in June and August 2013, the case tribunal published its findings in relation to fact, breach and sanction. It found Mr Heesom had committed fourteen breaches of the Codes of Conduct, and it disqualified him from being a local councillor for thirty months.
By section 79(15) of the 2000 Act, an appeal against the case tribunal's decisions lies to "the High Court". Mr Heesom exercised that right by lodging an Appellant's Notice in the Administrative Court Office at the Royal Courts of Justice on 9 August 2013. The proceedings were served on the Ombudsman on 15 August 2013.
On 26 August 2013, the Ombudsman applied "to transfer the case to Cardiff". The Adjudication Panel, which, with the Council, had been added to the claim as defendants, supported that application. Correspondence between the parties ensued. The Ombudsman said in a letter dated 31 October 2013 that he took the view that the case should be transferred to Cardiff Civil Justice Centre, and it would be up to the Administrative Court in Cardiff to decide where the case should be heard – but, the Ombudsman said, he had no objection to it being heard in North Wales. Howe and Co, for Mr Heesom, responded that same day saying that, in their view, the case should be heard in North Wales and the administration of the case should be transferred to the Administrative Court Office in Cardiff; and they had no objection to such a direction being made, if permission to appeal were granted. The following day, the Ombudsman responded, in substance agreeing with that suggestion. On 7 November 2013, Howe and Co wrote to the Administrative Court Office at the Royal Courts of Justice to that effect.
On 15 November 2013, Supperstone J granted permission to appeal, removed the Adjudication Panel and the Council as defendants, and made an order in the following terms:
"The hearing of the appeal to be transferred to Cardiff with a direction that the appeal be heard in North Wales."
The claim was duly transferred to the Administrative Court Office in Cardiff, where it was administered, a number of orders for directions being made there following transfer.
I heard the substantive appeal in Mold over four days in April 2014, and I delivered a reserved judgment on 15 May 2014 (now reported as [2014] EWHC 1504 (Admin), [2014] 4 All ER 269). I allowed the appeal in part, overturning three of the case tribunal's findings of breach; and, in respect of sanction, concluding that a period of disqualification was warranted, but the period imposed was manifestly excessive. I substituted a period of eighteen months. Following consideration of written representations in relation to costs, on 4 June 2014 I ordered the Ombudsman to pay Mr Heesom 35 per cent of his costs of the appeal.
A bill of costs for detailed assessment was prepared by Mr Heesom's costs lawyer/draftsman, John Robins of Robins Costs Consultants Ltd ("Robins"), and served on the Ombudsman on 4 September 2014. The full sum, including VAT, was £1,949,259.60, 35 per cent of which is £682,240.86. On 16 October, points of dispute were served on behalf of the Ombudsman, which indicated that the Ombudsman accepted a full bill of only £213,215.36, 35 per cent of which is £74,625.38. A response to those points of dispute was served on 12 November 2014. An interim payment of £100,000 on account of costs was made voluntarily.
Given the difference between the parties, they were unsurprisingly unable to agree the amount of costs that should be paid. On 29 December 2014, Robins on behalf of Mr Heesom sent the detailed bill to Cardiff Civil Justice Centre, for the costs proceedings to be issued there. Accompanying that bill were (i) an application for a further interim payment of £160,000, and (ii) an application to transfer the assessment proceedings to the Senior Courts' Costs Office ("the SCCO"). However, on 17 February 2015 these documents were returned unissued, with a letter explaining that "these should be filed at [SCCO]". Mr Robins duly filed them there.
On 8 April 2015, a one-day hearing of preliminary issues was listed in the SCCO before Master Haworth, for December 2015. One of the preliminary issues, as I understand it, is in respect of the proportionality of the bill as a whole.
On 6 May 2015, the Ombudsman filed an application for the transfer of the assessment proceedings from the SCCO to "the Cardiff District Registry"; or, alternatively, if the matter were retained by the SCCO, for an order that the assessment hearing be in Wales.
Service of that application on Mr Robins caused him to telephone Cardiff Civil Justice Centre for further details as to why it had been thought by the court that the assessment must be lodged in the SCCO; and he followed that up on 11 May 2015 with an email essentially to the same effect. The following day, 12 May 2015, he received a response from David Gardner, the Administrative Court Office Lawyer assigned to the Cardiff Administrative Court Office. The email read:
"I have been forwarded your email below by the Administrative Court Office Wales staff for advice.
The advice of the Administrative Court Office is that all applications for a detailed assessment of costs arising out of
Administrative Court proceedings must be lodged in the [SCCO]. The reasoning behind this advice is as such:
1. CPR 47.4(1) requires all applications for a detailed assessment of costs to be lodged in 'the appropriate office'.
2. The meaning of 'appropriate office' is outlined in CPR PD 47 paragraph 4.
3. All five offices of the Administrative Court Office (that is to say Birmingham, Cardiff, Leeds, London and Manchester) are part of 'the Administrative Court Office' and as such Administrative Court claims are not covered by the directions in CPR PD 47, paragraphs 4.1(a) and (b). Thus the direction in CPR PD 47, paragraph 4.1(c) applies and the application for a detailed assessment must be lodged in the SCCO.
I hope this assists. Please feel free to contact the Administrative Court office or me if you have any further queries."
I shall return to the relevant provisions of CPR Part 47 shortly.
However, to complete the chronology, the applications to transfer and for a further payment were set down for hearing before Master Haworth on 13 May 2015. At that hearing, he found that (i) the assessment proceedings were correctly filed in the SCCO; (ii) there were no good grounds for transferring the assessment to Cardiff or for the SCCO to hear the assessment in Wales, whether in Cardiff or Mold; and (iii) in addition to the payment on account already made, an interim costs certificate in the sum of £100,000 should be issued. The Master gave permission to appeal in respect of the venue issues, but refused permission to appeal against the interim certificate.
In an Appellant's Notice dated 8 June 2015, but issued on 9 June, the Ombudsman pursued the appeal in respect of venue, and renewed his application for permission to appeal against the interim certificate. Those are the applications before me now.
Mr Vikram Sachdeva QC has appeared for the Ombudsman, and Mr Martin Westgate QC for Mr Heesom. At the outset, I thank them for their helpful contributions.
The Application for an Extension of Time
In the absence of a specific order of the court to the contrary, CPR rule 52.4(2)(b) requires an appellant's notice to be filed within 21 days of the decision of the lower court that the appellant wishes to appeal. The decisions of Master Haworth that the Ombudsman wishes to appeal were made on 13 May 2015. Any appellant's notice therefore had to be filed on or before Wednesday 3 June. As I have indicated, it was not in fact filed until Tuesday 9 June.
The reasons for that delay, such as are given, are set out in the notice itself. A Litigation Assistant from the Ombudsman's solicitors attended the Royal Courts of Justice on the afternoon of 3 June 2015, the last day for filing the appellant's notice. She did not have a happy time. She first attended the Administrative Court Office, where she had to wait for some time because the office was extremely busy. When she eventually spoke to a clerk, she says she was told that the appeal had to be lodged in the Civil Appeals Office. She went there, and waited again. When she arrived at the front of the queue, she says she was told that the correct place to lodge the documents was the Senior Courts' Costs Office. She went to there; but, unfortunately, by the time she arrived, the counter was closed. Therefore, during the course of the afternoon, she had managed to pay the appeal lodgement fee – and the papers were stamped to confirm that she had done so – but she had not in fact filed the appellant's notice.
If the Litigation Assistant correctly recites what she was told by the various offices she attended, she was unfortunately misinformed. The destinations table, set out in paragraph 3.5 of CPR PD 52A, makes clear that an appeal from a Master in a case such as this is to a High Court Judge, and the appeal should have been lodged with the High Court Appeals Office. As I have indicated, it was not in fact lodged there until 9 June 2015, by when it was six days late. The fact that it is dated 8 June – and the evidence of the solicitors is that it was filed on 8 June – might possibly be explained by late lodging that day, and sealing the following date; but, in any event, the difference between filing the notice on 8 or 9 June 2015 is not material.
In support of the application for an extension of time, Mr Sachdeva submitted that, in the context of this appeal, that delay was neither serious nor significant, no prejudice to Mr Heesom has been caused, and an appropriate extension should be granted. In opposing it, Mr Westgate submitted in his skeleton argument that, simply because a time limit for appealing is missed by only a short period, that does not mean that the breach of rules is not serious or significant. In this case, he emphasised, there has been no explanation as to why the Ombudsman's solicitors left it until the last minute – or, at least, the last afternoon – to file the appeal, in circumstances in which they appear to have been unfamiliar with the correct place to issue it. He submitted, with some force, that there has also been no explanation as to what happened between 3 June (when the appellant's notice ought to have been lodged, and there was the attempt to do so that I have described), and 8 or 9 June (when it was actually filed). Furthermore, a preliminary hearing has been listed for December 2015 to deal with several issues of principle and, if the venue appeal before me succeeds, then that date will be lost and further delay occasioned whilst a hearing date is found in Cardiff or Mold.
The correct approach to an application under CPR rule 3.1(2)(a) for an extension of time prescribed by rule 52.4(2) for filing a notice of appeal was recently, and helpfully, considered by the Court of Appeal in R (Hysaj) v Secretary of State for the Home Department [2014] EWCA Civ 1633; [2015] 1 WLR 2472. The Vice President (Moore-Bick LJ), giving the judgment of the court, confirmed that such applications should be approached in the same way, on the basis of the same principles and with the same rigour as an application for relief from sanctions under CPR rule 3.9. The proper approach in relief from sanction cases was set out in Denton v T H White Ltd [2014] EWCA Civ 906; [2014] 1 WLR 3926 at [24]:
"A judge should address an application for relief from sanctions in three stages. The first stage is to identify and assess the seriousness and significance of the 'failure to comply with any rule, practice direction or court order' which engages rule 3.9(1). If the breach is neither serious nor significant, the court is unlikely to need to spend much time on the second and third stages. The second stage is to consider why the default occurred. The third stage is to evaluate 'all the circumstances of the case, so as to enable [the court] to deal justly with the application…'."
In Hysaj, at [38], this guidance was expressly held to be applicable to applications for extensions of time for filing a notice of appeal.
Consequently, the first question for consideration in this case is whether the delay was serious (which focuses primarily on the length of the delay) or significant (which focuses primarily on the effect of the delay on the proceedings). The delay was a short period, being six days. I accept Mr Westgate's submission that no good reason has been put forward for the delay that in fact occurred. As Moore-Bick LJ stressed in Hysaj (at [52]), "ignorance of the relevant rules and procedure will rarely, if ever, provide a good reason for failing to comply promptly, especially where professional lawyers are involved". That the Litigation Assistant did not know where to file the appeal in this case is not, in my view, a good reason for the delay. In any event, the delay between 3 and 8-9 June is entirely unexplained.
However, critically, the delay has not prejudiced Mr Heesom and I am unpersuaded that it has had any real detrimental effect on the proceedings. Mr Heesom would have been expecting an appeal top be pursued: the Master himself gave permission. Even if, as Mr Westgate submits, the December hearing date of preliminary issues may be jeopardized if the venue appeal is ultimately successful – and it cannot be assumed that it will be delayed – that is a consequence of the time which it has taken to determine this appeal, rather than the six days' delay in issuing it.
Mr Westgate did not press his opposition to an extension in his oral submissions today, relying upon his skeleton argument. In my view, his reticence was warranted. I do not consider the delay in this case was either serious or significant; and, in my judgment, there is no good ground for refusing an extension of time.
In all of the circumstances, an appropriate extension of time should be granted; and I do grant an extension, such that the Ombudsman's notice of appeal was filed in time.
The Venue Appeal
I have described how the costs assessment ended up being issued in London: Robins attempted to issue the assessment proceedings in Cardiff, but were redirected by that court to the SCCO.
Decisions in relation to venue are, of course, within the sphere of case management; and it is trite law that an appellate court should not interfere with case management decisions by a judge who has applied the correct principles and taken into account all relevant matters (and no irrelevant matters), unless the decision is "so plainly wrong that it must be regarded as outside the generous ambit of discretion entrusted to the judge" (Walbrook Trustees (Jersey Ltd) v Fattal [2008] EWCA Civ 427 at [33] per Lawrence Collins LJ).
Mr Sachdeva submitted that, in this case, the Master did err in principle, because he proceeded on the basis that the cost assessment proceedings were properly filed in the SCCO whereas they ought properly to have been filed in the Cardiff District Registry. The Master therefore embarked upon the exercise of his discretion on the basis of a false starting point. In any event, Mr Sachdeva submitted, he erred in the exercise of that discretion, e.g. by proceeding on the basis that, unlike the substantive claim, costs proceedings have no "local flavour". Even if the costs proceedings were properly commenced in the SCCO, the Master erred in exercising his discretion not to transfer them to Cardiff or, alternatively, in not directing that the assessment be heard in Wales.
Mr Westgate did not agree. He submitted that the costs assessment proceedings were correctly filed in the SCCO because (i) the substantive claim was never transferred to Cardiff: the Order of Supperstone J, properly construed, only directed that the hearing take place in Wales; and (ii) if it was transferred, then the costs assessment was in any event properly lodged in the SCCO, essentially for the reasons given by Mr Gardner to Robins in May 2015 – and the decision of the Master not to transfer the proceedings to Cardiff fell well within his wide case management discretion. In particular, the costs proceedings did not have any "local flavour", in the sense that they would be of no real interest to people in Wales, whether it be in Cardiff or Mold – or at least the Master did not err in concluding that they did not. Counsel and solicitors for both the paying and receiving party are London-based, and it would very substantially increase the costs of the assessment hearing if it took place in London. It is clear from the Master's judgment that he regarded that factor as important, if not crucial. Mr Westgate submitted that he was entitled to proceed on that basis.
This appeal requires some brief consideration of the structure of the courts as well as the relevant Civil Procedure Rules.
The Administrative Court does not exist as a distinct court. Like its predecessor, the Crown Office List, it essentially provides a separate list for judicial reviews and other public law claims and appeals, which are managed separately and differently from other High Court actions and are set down for hearing before a specialist judge in a separate list. However, despite these distinct arrangements, the Administrative Court is an integral part of the Queen's Bench Division, as are other specialist lists that are referred to as "courts", such the Technology and Construction Court and the Planning Court (which is effectively a sub-list within the Administrative Court).
The Civil Procedure Rules are somewhat coy as to the claims that should be issued, managed and heard in the Administrative Court. Paragraph 2.1 of CPR PD 54A does provide that claims for judicial review are to be dealt with in the Administrative Court. However, with three specific exemptions[1], the Civil Procedure Rules do not specifically allocate appeals that are directed by statute to the High Court to the Administrative Court. Public law cases, such as statutory appeals, appear to be allocated to the Administrative Court largely by convention and practice.
The venue of Administrative Court claims is dealt with in CPR PD 54D. The intention behind that practice direction is set out in paragraph 1.2:
"This Practice Direction is intended to facilitate access to justice by enabling cases to be administered and determined in the most appropriate location. To achieve this purpose it provides flexibility in relation to where claims are to be administered and enables claims to be transferred to different venues."
Paragraph 2 of practice direction provides as follows:
"2.1 The claim form in proceedings in the Administrative Court may be issued at the Administrative Court Office of the High Court at
(1) the Royal Courts of Justice in London; or
(2) at the District Registry of the High Court at Birmingham, Cardiff, Leeds, or Manchester unless the claim is one of the excepted classes of claim set out in paragraph 3 of this Practice Direction which may only be started and determined at the Royal Courts of Justice in London.
2.2 Any claim started in Birmingham will normally be determined at a court in the Midland Region (geographically covering the area of the Midland Circuit); in Cardiff in Wales; in Leeds in the North Eastern Region (geographically covering the area of the North Eastern Circuit); in London at the Royal Courts of Justice; and in Manchester, in the North Western Region (geographically covering the Northern Circuit)."
We are not here concerned with any of the excepted classes of claim in paragraph 3 of the practice direction.
By paragraph 5.1 of CPR PD 54D, proceedings may be transferred from the Administrative Court Office at which the claim form was issued to another office, such transfer being a judicial act. Paragraph 5.2 provides that the general expectation is that proceedings will be administered and determined in the region with which the claimant has the closest connection, subject to various considerations which are there set out.
Turning to the venue for cost assessment proceedings, CPR rule 47.4(1) and (2) provide:
"(1) All applications and requests in detailed assessment proceedings must be made to or filed at the appropriate office.
(Practice Direction 47 sets out the meaning of 'appropriate office' in any particular case)
(2) The court may direct that the appropriate office is to be the [SCCO]."
Paragraph 4 of CPR PD 47 provides, so far as relevant to this appeal:
"4.1 For the purposes of rule 47.4(1), the 'appropriate office' means —
(a) the district registry… in which the case was being dealt with when the judgment or order was made or the event occurred which gave rise to the right to assessment, or to which it has subsequently been transferred;
(b) …
(c) in all other cases, including Court of Appeal cases, the [SCCO].
…
4.3(1) A direction under rule 47.4(2)… specifying a particular court, registry or office as the appropriate office may be given on application or on the court's own initiative.
(2) Unless the [SCCO] is the appropriate office for the purposes of rule 47.4(1) an order directing that an assessment is to take place at the [SCCO] will be made only if it is appropriate to do so having regard to the size of the bill of costs, the difficulty of the issues involved, the likely length of the hearing, the cost to the parties and any other relevant matter."
Mr Westgate submitted, first, that the substantive claim in this case was never transferred to Cardiff. However, in my respectful view, that argument has no force. The parties agreed that, were permission to appeal to be granted, the case should be transferred to Cardiff for case management to take place there, and the hearing should take place in North Wales. Although Supperstone J's order refers to "the hearing" being transferred to Cardiff, it clearly means the claim; because the same paragraph goes on to deal with the hearing – which, he directed, should be in North Wales. I am unconvinced that Supperstone J was labouring under the misapprehension that Cardiff is in North Wales; or that there was any internal inconsistency in the order. Properly construed, the order achieved that which the parties had agreed, namely the transfer of the case to Cardiff (District Registry), with an eminently sensible direction that the hearing be in North Wales.
Mr Westgate submitted, in the alternative, that the "appropriate office" for filing the cost assessment proceedings in any Administrative Court claim, whether that claim is managed or heard in London or one of the English regions or Wales, is the SCCO; because, even where such a claim is managed in one of the out-of-London Administrative Court Offices and heard out-of-London, it is not being "dealt with" in a "district registry" as properly construed, the Administrative Court being in effect a single, essentially London-based, entity. In any event, he submitted, its out-of-London offices do not cover the same areas as district registries. For example, the Administrative Court Office in Cardiff deals with Administrative Court claims from across Wales, and indeed now also the Western Circuit. The substantive claim here was managed from the Cardiff Administrative Court Office but heard in Mold, which has its own distinct district registry.
In his oral submissions before me today, Mr Westgate has focused upon the term "the district registry" in paragraph 4.1(a) of CPR PD 47. He says, as appears to be the case, that that provision was first included in the relevant practice direction in 1999, as part of the new, post-Woolf Report rules – and, consequently, at a time before the regionalisation of the Administrative Court. He submitted that, properly construed, "district registry" there should be restricted to the district registries as they deals with private law claims, and should not be extended to claims issued or transferred out of London in the Administrative Court.
Those submissions, which to an extent reflect the comments of Mr Gardner to Mr Robins in May 2015, have some force; but ultimately I am not persuaded by them.
As I have indicated, the Administrative Court is not a discrete institution or entity, it is a list within the Queen's Bench Division that is subject to particular practices and procedures and dealt with by specialist judges, including specialist Masters. A claim issued in the Administrative Court Office in the Royal Courts of Justice is issued in the High Court (Queen's Bench Division) at the Royal Courts of Justice. In my view, equally, a claim issued in the Administrative Court Office in Cardiff is issued in the Cardiff District Registry of the High Court (Queen's Bench Division). There was a period in which Administrative Court claims could be lodged in Cardiff for issue in London – and they were simply sent to London for issue, the Cardiff office effectively being a mere post box facility – but that practice ceased on the advent of the various fully-fledged out-of-London offices, which each had and has the ability to issue, manage and hear Administrative Court claims.
It is clear from paragraph 2.1 of CPR PD 54D, which I have already quoted, that a claim form in Administrative Court proceedings may be issued in "the Royal Courts of Justice or… the District Registry of the High Court at Birmingham, Cardiff, Leeds or Manchester…" (emphasis added). Just as those claims may be issued in those district registries, when an Administrative Court claim is "transferred" from (say) the Royal Courts of Justice to "Cardiff" it is, in my judgment, transferred to the Cardiff District Registry of the High Court. If the Administrative Court were some sort of single London-based entity, as Mr Westgate suggests, there would be no need formally to transfer claims by way of a judicial order.
That out-of-London Administrative Court claims are dealt with by out-of-London Administrative Court Offices through the relevant district registry is, in my view, not only clearly recognised by CPR PD 54D paragraph 2.1, but also in paragraph 4.1 of that same practice direction:
"During the hours when the court is open, where an urgent application needs to be made to the Administrative Court outside London, the application must be made to the judge designated to deal with such applications in the relevant District Registry." (emphasis added)
I have today been referred to U v Liverpool City Council (Practice Note) [2005] EWCA Civ 475 at [48], which, Mr Westgate submitted, urged caution when considering CPR Practice Directions. In particular, it says:
"It is sufficient for present purposes to say that a practice direction has no legislative force. Practice directions provide invaluable guidance to matters of practice in the civil courts, but in so far as they contain statements of the law which are wrong they carry no authority at all."
However, as that passage itself makes clear, CPR Practice Directions may (and, often, do) give helpful guidance; and they are, of course, drafted by the Civil Rules Committee which also drafts the Rules themselves. Rightly, in my respectful view, it is at least clearly assumed in CPR PD 54D that, when they issue proceedings, out-of- London Administrative Court Offices do so through the district registries of which they are an integral part.
Mr Westgate relied upon the fact that, historically, detailed assessments of costs in Administrative Court claims have always been dealt with by the SCCO, i.e. Mr Gardner's email to Robins quoted in paragraph 12 above accurately set out that which occurs in practice. Certainly, I have been unable to identify any such cost assessment which has been dealt with out of London. However, for the reasons I have given, if that has been what has happened historically, I consider that practice to have been wrong.
Of course, simply because an Administrative Court claim is issued in or transferred to Cardiff District Registry does not mean that it has to be heard in Cardiff. Paragraph 2.2 of CPR PD 54D (quoted in paragraph 33 above) makes clear that any claim started in Cardiff will normally be determined at a court "in Wales"; and the Administrative Court in Wales regularly sits outside Cardiff. Mr Heesom's statutory appeal, heard in Mold, is but one example. The court sits in Wales wherever is generally most convenient, for the court, parties and the interested public.
Consequently, in my view, an Administrative Court claim that is issued in or transferred to the Administrative Court Office in Cardiff is a case "being dealt with" in Cardiff District Registry for the purposes of paragraph 4.1 of CPR PD 47; and therefore the "appropriate office" for filing cost assessment proceedings under rule 47.4(1) is that district registry. Although primarily a matter of construction of the relevant CPR rules and practice directions, it comes as some comfort that the construction I favour gives a result which reflects the importance of local justice and the general principle that all aspects of public law claims involving Welsh public bodies should be managed and heard in Wales.
CPR rule 47.4(1) requires such proceedings to be issued in the appropriate district registry: it is mandatory – all applications and requests "must" be made or filed in the appropriate office. However:
(i) under rule 47.4(2), the court may direct that the appropriate office in a particular case is the SCCO: in other words, there is specific provision for transfer of a costs assessment from outside London to the SCCO; and
(ii) as I have emphasised, just because the assessment is in a particular district registry that does not require any assessment hearing to be at a particular venue: for example, the court can direct that an assessment in the Cardiff District Registry will be heard in, say, Mold.
As will be apparent, in my judgment Master Haworth did unfortunately err in construing the relevant provisions of the CPR.
In considering what should be done in that event, Mr Sachdeva submits that I should make a declaration that the costs assessment ought to have been issued in Cardiff, waive that defect and now send the matter to Cardiff to be dealt with there now. He accepts that Mr Heesom could make an application in the Cardiff District Registry for the transfer of the assessment to the SCCO; but, if he wishes to do that, he must take his chances there. It would, he submits, not be appropriate for me to come to an assessment as to whether such a transfer should be made.
Mr Westgate submitted that, even if he were wrong in relation to the construction issue (as I have now found him to be), Master Haworth took into account the relevant factors as set out in CPR PD 47 paragraph 4.3(2) and, having done so, concluded that the SCCO is the appropriate forum for this costs assessment. He went so far as to submit that, even if the Master had construed the provisions correctly, he would inevitably have come to the same conclusion as to venue. Furthermore, he submitted that the matter has by now been significantly progressed in London, the application to transfer was made relatively late, and to change venue now would seriously disrupt the progression of the assessment.
However, in respect of what should happen in this assessment now, I consider Mr Sachdeva's submissions to be sound. I am afraid I cannot accept the submission that, if the Master had started from the correct point so far as construction of the procedural provisions are concerned, he would necessarily have come to the same conclusion.
In any event, I accept Mr Sachdeva's submission that the Master unfortunately erred in proceeding on the basis that "there is no local flavour in a costs matter," by which I understand him to have meant that the importance of localness of justice does not apply to costs assessments. I accept Mr Westgate's submission that costs assessments comprise often lengthy and (at least to the layman) tedious detailed arguments; and it is unlikely that members of the public – or many of them – would wish to attend such proceedings. However, in this case, a Flintshire County councillor is contending that his bill of costs for appealing his disqualification properly amounted to nearly £2m, of which nearly £700,000 should be borne by the public purse. I do not accept that that matter will necessarily be of no interest locally in Flintshire.
For those reasons, although I shall hear submissions in relation to the precise form of the order, the proposed relief suggested by Mr Sachdeva is broadly, in my view, appropriate.
The Costs Appeal
Finally, I turn to the costs appeal.
In addition to the court's powers to order costs on account of CPR rule 44.2(8), CPR rule 47.16 gives the court a power "to issue an interim costs certificate for such sum as it considers appropriate", and order that paying party to pay the costs so certified within a particular period. In practice, trial judges usually use the power to make an order for payment on account, and costs judges issue interim certificates. Mr Heesom's application for an additional payment towards his costs over and above the£100,000 already paid was therefore treated by the Master as an application for an interim certificate.
In issuing that certificate, the Master noted that a detailed bill had been lodged and points of dispute and replies filed. He noted that there was "a huge gap in terms of costs" between the receiving and paying parties – which is no understatement - and he specifically referred to the point made to him by Mr Sachdeva, that he was required to exercise particular care in allowing further sums because he had not yet carried out an item by item assessment or seen the file including the backup documents in respect of the bill and points of dispute (a point emphasised by Christopher Clarke LJ in Excalibur Ventures LLC v Texas Keystone Inc [2015] EWHC 566 (Comm) at [23], to which Mr Sachdeva has referred me). In his judgment, the Master specifically referred to that point.
The Master concluded, at [11], as follows:
"Looking at matters in the round together with a point of dispute and replies, costs judges are well used to dealing with these types of applications and it seems to me that there is scope here for a further interim payment to [Mr Heesom], albeit not in the sum that [he seeks]. Being cautious, considering the bill, the points of dispute [and] replies and generally looking at a possible outcome at detailed assessment, I am going to award an interim certificate of £100,000."
The effect of the costs payments now required to be made, a total of £200,000, means that the full aggregate bill would have to be assessed at no less than £571,428. Mr Sachdeva submitted that the Master was not in a position to conclude that the costs that would be allowed would approach that level. As I have indicated, if the Ombudsman's points of dispute are fully accepted, the amount due to Mr Heesom would be only about £75,000.
However, as CPR rule 47.16 makes clear ("the court may… issue an interim certificate for such sum as it considers appropriate…"), the court is given a very wide discretion indeed to award an interim certificate, even though there has been no assessment on quantum. Costs judges are especially experienced in considering bills of costs and points of dispute, and assessing an appropriate sum to include in an interim costs certificate in the form of a rough calculation as to the minimum amount the receiving party is likely eventually to be awarded.
I appreciate that the Ombudsman does not agree with the Master's assessment; but for the Master to assess the appropriate amount of £200,000 to be paid "on account of costs" before the full assessment on a bill of nearly £2m does not on its face appear to be obviously excessive. The Master clearly considered the matters he was bound to consider, notably the bill, points of dispute and points of reply. He does not appear to have taken any immaterial considerations into account. He – as an experienced costs judge – was in a very good position to make the assessment of an appropriate amount. Nothing in the submissions of Mr Sachdeva persuades me that that assessment was in any way arguably wrong in principle or irrational.
Therefore, in respect of the costs appeal, I refuse permission.
(After further submissions on costs.)
Having dealt with the substantive issue before me, the only matter that now remains outstanding relates to the costs of this appeal and also the costs below.
In respect of the costs of this appeal, as a matter of principle, the Ombudsman is entitled to his costs of the venue appeal, having been successful in it; and he is not, of course, entitled to his costs of pursuing the interim certificate appeal.
The statement of costs amounts to just over £19,600 in total. Counsel's fees for the hearing appear high, but I do bear in mind that the fee earners in relation to this matter are lower grade and certainly lower hourly rate than those employed by Mr Heesom.
In all the circumstances, I think it would be appropriate to reduce the amount of profit costs as follows. I am afraid that I do not consider that the solicitors should be paid in respect of travelling and attending this hearing, and overall the hours spent on preparation are somewhat high. Given that I am not going to reduce Counsel's fees at all, I would reduce those solicitors' costs by about £3,700, which would leave the bottom line at about £16,000.
I do not reduce that figure for the delay in bringing the appeal, but it does have to be reduced to reflect the failed interim certificate appeal. In respect of this appeal, I will order that Mr Heesom pays the Ombudsman's costs, which I will summarily assess in the sum of £14,000.
In relation to the costs below, the Master made an order that the Ombudsman pay Mr Heesom's costs. In fact, following this appeal, each party effectively succeeded in one of two issues before the Master. I am informed, and accept, that the work done on each of those issues was approximately the same; and, in those circumstances, I will quash the order for costs below, and replace it with an order that there be no order for costs.
Note 1 Namely (i) appeals under section 289(6) of the Town and Country Planning Act 1990 and section 65(5) of the Planning (Listed Buildings and Conservation Areas) Act 1990 (see CPR 52DPD.27); (ii) appeals from decisions of the Law Society or the Solicitors’ Disciplinary Tribunal under the Solicitors Act 1974 and other statutes (see CPR 52DPD.28); and (iii) appeals from decisions of the Bar Standards Board and Disciplinary Tribunals of the Council of the Inns of Court under section 24 of the Crime and Courts Act 2013 (see CPR 52DPD.28.1), [Back]
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The Honourable Mr Justice Wilkie :
INTRODUCTION AND LITIGATION BACKGROUND
The claimant was a patient of the 2nd defendant ("Medway") when she gave birth to her second child at Medway Maritime Hospital on 5th January 2004. During the birth she was given an epidural. She asserted this led to immediate pain and discomfort. She was discharged home on 9th January she states without having had proper consideration of her symptoms. Having been readmitted on 28th January she was diagnosed on 30th January as having developed hydrocephalus. She had surgery at King's College Hospital in London on 31st January when a ventriculo-peritoneal shunt was inserted. She had from the 5th January neurological symptoms in her lower spine and legs. She has continued to suffer a significant disability since that date. Her claim is that these injuries were said to be due to the negligence of Medway through its anaesthetic team who administered the epidural.
In June 2004 the claimant retained the 1st defendant firm ("Wolferstans") to act as Solicitors for her to investigate a prospective claim against Medway. Wolferstans obtained public funding for the investigation from the Legal Aid Board and instructed medical experts: Professor Schapira, a consultant neurologist; and Dr Bogod, a consultant anaesthetist. Professor Schapira advised in February 2006 that it was likely that the claimant had sustained damage during the epidural procedure which either directly, or indirectly, led to the development of hydrocephalus. He suggested that further investigations be carried out, which would include an MRI scan of the spine. Dr Bogod, a consultant anaesthetist, expressed the view, by his report of 1st April 2006 that the claimant had probably suffered a dural puncture. Dr Bogod said that this explanation, which was unlikely to involve any negligence on the part of the clinician involved, could potentially be overridden if an MRI scan revealed evidence of direct damage to the spinal cord by the epidural needle, in which case, he advised, there would be negligence present.
Wolferstans took steps to arrange an MRI scan. A number of appointments were made for the claimant to attend, which she cancelled or failed to attend. Eventually, she attended in January 2007, but the scan could not go ahead as she was in too much pain, was unable to lie still and was experiencing claustrophobia. There were discussions as to how a general anaesthetic might assist her to have a scan. A further scan was arranged during April 2007 which, again, was not successfully completed.
During this period Wolferstans obtained from Medway extensions to the primary limitation period which, it was believed, would expire on 5th January 2007, three years from the date of the epidural. However, without any further evidence from an MRI scan, neither expert felt able to support a case for negligence. On 26th July 2007, Wolferstans advised the claimant that she should discontinue her claim and that they would inform the Legal Aid Board so that public funding would be withdrawn. The claimant provided such instructions on or about 15th August 2007 and on 7th September 2007 public funding was withdrawn. The final agreed extension to the primary limitation period expired on 7th September 2007.
The claimant continued to need treatment for her conditions. She was successfully given an MRI scan in August 2010. That scan resulted in a diagnosis of arachnoiditis, inflammation of the arachnoid membrane, one of the membranes surrounding and protecting the nerves of the central nervous system, including the brain and spinal cord. This was the first time that the claimant became aware of this condition, which was not caused by direct trauma to the spinal cord.
In August 2010, the claimant retained her current solicitors but did not then pursue a claim against Medway. She had been advised and acted on the basis that her claim against Medway was statute barred. She was minded to pursue a professional negligence claim against Wolferstans. Medical reports were obtained to that end including a second report from Dr Bogod dated 19th April 2012. This report first raised the suggestion that the probable cause of the arachnoiditis was the introduction of a contaminant, chlorhexidine, during the epidural procedure. Dr Bogod considered that this would lead to a conclusion of negligence on the part of Medway.
The claimant issued proceedings against Wolferstans on 2nd September 2013 alleging that, due to Wolferstans' negligence and/or breach of contract, she had lost the chance to recover damages from Medway. Wolferstans has defended that case, amongst other ways, on the basis that no such loss of chance had occurred at that point. They say that, as the claimant had three years to bring a claim from her date of knowledge pursuant to section 11(4)(a) of the Limitation Act 1980 and as such knowledge arose no earlier than 19th April 2012, the date of Dr Bogod's second report, her claim against Medway remained valid and live at the date of issue of the proceedings against Wolferstans.
The claimant issued a claim form against Medway on 28th August 2014 reflecting the outcome of the report of Dr Bogod dated 19th April 2012. Medway defends that claim on the basis that the claim is statute barred, that the date of knowledge for the purposes of section 11(4)(a) of the Limitation Act was January 2004, when the claimant was aware that she had suffered a significant injury that she attributed to the administration of the epidural or, by the latest, the 22nd July 2004 when she signed her statement supporting her claim for the purposes of obtaining Legal Aid.
On the assumption that the claimant's claim against Medway was out of time, and on the footing that a claim against Medway would be made out, Wolferstans have also pleaded that the claimant has failed to mitigate her loss by failing to apply to the Court, pursuant to section 33 of the Limitation Act 1980, requesting the Court to exercise its discretion to permit the claimant to pursue its claim against Medway, by disapplying s. 11 of the Limitation Act. The claimant has made such an application.
By an order of Master McCloud dated 6th February 2015, the claimant's action against Medway was consolidated with her action against Wolferstans and provision was made for a case management conference to be held on the 18th May 2015 to consider listing preliminary issues in relation to limitation and the application of section 33.
Master McCloud made directions in an order dated 8th June 2015 including the following paragraph defining the preliminary issues as follows:
"For the purposes of sections 11(4) and 14(1) of the Limitation Act 1980 when did the claimant acquire the requisite knowledge for the purpose of her claim against the Medway NHS Trust and in particular
1. Did the claimant acquire such knowledge by no later than 22nd July 2004?
2. Did the claimant acquire such knowledge some time between 16th August 2011 and 19th April 2012?
3. Did the claimant acquire such knowledge on a date prior to 2nd September 2010 being three years prior to the issue of the claim form against Wolferstans?
4. At the date of issue of the claim form against Wolferstans on 2nd September 2013 had the claimant lost the chance to pursue her claim against the Medway?
5. At the date of issue of the claim on 2nd September 2013 was the claim against Wolferstans in contract statute barred pursuant to section 5 of the Limitation Act?"
Master McCloud also ordered that these preliminary issues be listed together with the claimant's application under section 33 of the Limitation Act 1980.
THE RELEVANT STATUTE AND CASE LAW
The Limitation Act 1980 section 11 provides:
"11(1) This section applies to any application for damages for negligence, nuisance or breach of duty … where the damages claimed by the plaintiff for the negligence, nuisance or breach of duty consist of or include damages in respect of personal injuries to the plaintiff or any other person …
(2) None of the time limits given in the preceding provisions of this Act shall apply to an action to which this section applies
(3) An action to which this section applies shall not be brought after the expiration of the period applicable in accordance with sub-section (4) or (5) below
(4) Except where sub-section (5) below applies, the period applicable is three years from –
(a) The date on which the cause of action accrued; or
(b) The date of knowledge (if later) of the person injured … "
Section 14 of the 1980 Act provides for the date of knowledge for the purposes of section 11. It provides as follows
"14(1) … in sections 11 … of this Act references to a person's date of knowledge are references to the date on which he first had knowledge of the following facts –
(a) That the injury in question was significant; and
(b) That the injury was attributable in whole or in part to the act or omission which is alleged to constitute negligence, nuisance or breach of duty;
(c) The identity of the defendant, and
(d) If it is alleged that the act or omission was that of a person other than the defendant, the identity of that person and the additional facts supporting the bringing of an action against the defendant;
and knowledge that any acts or omissions did or did not, as a matter of law, involve negligence, nuisance or breach of duty is irrelevant …
(2) For the purposes of this section an injury is significant if the person whose date of knowledge is in question would reasonably have considered it sufficiently serious to justify his instituting proceedings for damages against the defendant who did not dispute liability and is able to satisfy a judgment.
(3) For the purposes of this section a person's knowledge includes knowledge which he might reasonably have been expected to acquire -
a. From facts observable or ascertainable by him, or
b. From facts ascertainable by him with the help of medical or other appropriate expert advice which it is reasonable for him to seek;
But a person shall not be fixed under this sub-section with knowledge of a fact ascertainable only with the help of expert advice so long as he has taken all reasonable steps to obtain (and, where appropriate, to act on) that advice."
There is no doubt that the date on which the cause of action accrued was the 5th January 2004. The issue before me has been the date of knowledge of the claimant, if later.
Nor is it in issue that the date on which the claimant first had knowledge of: the fact that the injury in question was significant; the identity of the defendant; and the identity of the anaesthetist engaged by the defendant whose act or omission was alleged to be negligent; was on or shortly after 5th January 2004. The focus of the preliminary issue concerning section 11 and section 14 is the date of knowledge that the injury was attributable, in whole or in part, to the act or omission which is alleged to have constituted negligence, nuisance or breach of duty. I have been referred to a number of authorities to enable me to address this issue and I summarise them below.
In Spargo v North Essex District Health Authority 1997 PIQR page 235 Lord Justice Brook formulated the following four propositions.
"(1) The knowledge required to satisfy section 14(1) is a broad knowledge of the essence of the causally relevant act or omission to which the injury is attributable;
(2) Attributable in this context means "capable of being attributed to" in the sense of being a real possibility.
(3) A plaintiff has the requisite knowledge when she knows enough to make it reasonable for her to begin to investigate whether or not she has a case against the defendant. Another way of putting this is to say that she will have such knowledge if she so firmly believes that her condition is capable of being attributed to an act or omission which she can identify (in broad terms) that she goes to a solicitor to seek advise about making a claim for compensation;
(4) On the other hand she will not have the requisite knowledge if she thinks she knows the act or omissions she should investigate but in fact is barking up the wrong tree; or if her knowledge of what the defendant did or did not do is so vague or general that she cannot fairly be expected to know what she should investigate; or if her state of mind is such that she thinks her condition is capable of being attributed to the act or omission alleged to constitute negligence, but she is not sure about it, and would need to check with an expert before she properly be said to know that it was".
In Haward v Fawcetts (a firm) 2006 PNLR 25 page 447 in his speech in the House of Lords, Lord Nicholls said at paragraphs 10 and 11 (page 451)
"10. Questions about the degree of detail required have mostly arisen in the context of the need for a claimant to know 'that damage was attributable in whole or in part to the act or omission which is alleged to constitute negligence' … consistently with the underlying statutory purpose, Slade LJ observed in Wilkinson v Ancliff 1986 1WLR1352, 1365, that it is not necessary for the claimant to have knowledge sufficient to enable his legal advisors to draft a fully and comprehensively particularised statement of claim. Where the complaint is that an employee was exposed to dangerous working conditions and his employer failed to take reasonable and proper steps to protect him it may well be sufficient to set time running if the claimant has "broad knowledge" of these matters. In the clinical negligence case of Hendy v Milton Keynes Health Authority 1992 3Med LR, 114, at 117 Blofeld J said a plaintiff may have sufficient knowledge if she appreciates "in general terms" that her problem was capable of being attributed to the operation even when particular facts of what specifically went wrong or how or where precise error was made is not known to her. In proceedings arising out of the manufacture and sale of the drug Opren, Purchas LJ said that what was required was knowledge of the "essence" of the act or omission to which the injury was attributable; Nash v Eli Lilly & Co 1993 1WLR 782, at 799. In Spargo v North Essex District Health Authority 1997 PIQR page 235 Brook LJ referred to "a broad knowledge of the essence" of the relevant acts or omissions. To the same effect Hoffmann LJ said section 14(1)(b) requires that "one should look at the way the plaintiff puts his case, it is still what he is complaining about and ask whether he had, in broad terms, knowledge of the facts on which that complaint is based." Broadly v Guy Clapham & Co 1993 4Med LR328, at 333.
11. A similar approach is applicable to the expression "attributable" in section 14A(8)(a). The statutory provisions do not require merely knowledge of the acts or omissions alleged to constitute negligence, they require knowledge that the damage was attributable in whole or in part to those acts or omissions. Consistently with the underlying statutory purpose, attributable had been interpreted by the courts to mean a real possibility, and not a fanciful one, a possible cause of the damages as opposed to a probable one; see Nash v Eli Lilly at 797 to 798. Thus, paraphrasing, time does not begin to run against the claimant until he knows there is a real possibility his damage was caused by the act or omission in question."
In the same case, Lord Mance observed at paragraph 119 (page 487)
"119. On the other hand, as counsel for the claimants accepted in his note to the Judge …, a claimant cannot postpone the running of time almost indefinitely by reference to detailed factual points which often only become known in the course of investigation of a possible claim, or during the litigation itself. The Court of Appeal was right in Broadly v Guy Clapham & Co to disapprove a test adopted by Hirst J in Bentley v Bristol and West Health Authority insofar as it would have required a claimant to know all factual matters necessary to establish negligence or to draft a fully and comprehensively particularised claim."
In Nash v Eli Lilly 1993 1WLR782, Lord Justice Purchas giving the judgment of the court set out at page 796 certain conclusions to guide them on this issue which included
"… 3. The period of limitation begins to run when the plaintiff can first be said to have knowledge of the nature of his injury to justify the particular plaintiff taking the preliminary steps for the institution of proceedings against the person or persons whose act or omission has caused the significant injury concerned …
5. It is to be noted that a firm belief held by the plaintiff that his injury was attributable to the act or omission of the defendant, but in respect of which he thought it necessary to obtain reassurance or confirmation from experts, medical or legal or others would not be regarded as knowledge until the result of his inquiries was known to him … If negative expert advice is obtained that fact must be considered in combination with all other relevant facts in deciding when, if ever, the plaintiff had knowledge … If the plaintiff held the firm belief which was of sufficient certainty to justify the taking of the preliminary steps for proceedings by obtaining advice about making a claim for compensation, then such belief is knowledge and the limitation period would begin to run."
And at 799
"… It was not in our judgment the intention of Parliament to require for the purposes of section 11 … of the Act proof of knowledge of the terms in which it will be alleged that the act or omission of the defendants constituted negligence or breach of duty. What is required is knowledge of the essence of the act or omission to which the injury is attributable. …"
In AB v Ministry of Defence 2012 UKSC 9 reported 2013 1AC 78, in his judgment Lord Wilson JSC, at paragraph 12, considered the degree of confidence with which a belief should be held and the substance which it should carry before it amounts to knowledge for the purposes of the sub-section. He then conducted a survey of the authorities. He described
"12. … A search for the moment at which the claimant knows enough to make it reasonable for him to begin to investigate whether he has a "case" against the defendant. … The investigation upon which the claimant should reasonably embark, is into whether in law he has a valid claim (in particular whether the act or omission of the defendant involves negligence or other breach of duty, being a matter of which the claimant is specifically not required to have knowledge under section 14(1)) and, if so, how that claim can be established in court. So it is an investigation likely to be conducted with the assistance of lawyers; but, in the light of their advice, it may well also embrace a search for evidence including from experts. The focus is upon the moment when it is reasonable for the claimant to embark on such an investigation. …
13. I hasten, however, to add an obvious rider. From the fact that a claimant may well need to consult experts after he has acquired the requisite knowledge, it in no way follows that he will have acquired such knowledge by a date when he first consults an expert. Section 14(3) expressly recognises that the facts that he is required to know may be ascertainable by the claimant only with the help of experts and deems him to have acquired such knowledge at the point at which he might, with their help, reasonably have been expected to acquire it. In my view, the date upon which the claimant first consulted an expert is not, on its own, likely to assist the court in determining whether by then he had the requisite knowledge. Instead the court will have regard – broadly – to the confidence with which the claimant held the belief, and to the substance which it carried, prior to his consulting the expert … and also, if the conclusion is that at that prior stage the claimant lacked belief of the requisite character, the effect upon the claimant's belief of his receipt of the expert's report.
14. In short, the assistance given to the claimant by an expert in this respect can be of two kinds. One is assistance in his acquiring "knowledge" of the "facts" required by section 14. He may, for example, advise the claimant that he has a medical condition, of which he was previously unaware, which provides him with a substantive basis for believing that his injury is attributable to an act or omission of the defendant. The other is the provision of evidence which will, in court, help him to substantiate the claim which, in the light … of his knowledge of the limited matters specified by section 14(1), he proposes to bring."
In Harrison v Isle of Wight NHS Primary Care Trust 2013 EWHC 442 (QB) His Honour Judge McKenna was sitting as a Judge of the Queen's Bench Division. He applied the principles identified in these appellate authorities. The claimant had undergone shoulder surgery but was left with limited movement and discomfort. She was of the view that something had gone wrong. There was suspicion she had had an excessive amount of bone removed but that was not confirmed by MRI imaging. She remained of the view that her continued discomfort had something to do with the bone removal. She obtained the support of a consultant orthopaedic surgeon that there was excessive and unnecessary removal of bone but, in his opinion, she did not have a claim because the removal of such an amount of bone might be supported by a body of orthopaedic surgeons and therefore would fail the "Bolam" Test. As a result, proceedings were not commenced and the limitation period, which had been extended for a short time by consent, was allowed to expire. A few weeks later, another doctor examined the claimant and discovered that her deltoid muscle was not properly attached. Proceedings, relying on that as the cause of her discomfort and as the act or omission comprising negligence, were issued 2 years later. The Judge concluded that the essence of the claim was the detachment of the deltoid muscle rather than the excessive removal of bone and that the claimant did not have appropriate knowledge before receipt of the opinion of the doctor who identified the muscle problem. Accordingly the claim was brought in time.
I am also referred to Driscoll-Varley v Parkside Health Authority 1991 2 Med LR 346 in which Mr Justice Hidden concluded that a generalised formulation of complaints such as "attributable to negligence in treatment at the hospital" would not satisfy the statutory test that the injury "was attributable to the act or omission which is alleged to constitute negligence". In that case, the difference was between a suspicion that a claimant's broken limb had been mis-set and the later discovery that the injury was due to premature mobilisation.
THE CLAIM AGAINST WOLFERSTANS AND THE LIMITATION ACT
Section 2 of the Limitation Act 1980 provides for a time limit for actions founded on tort. It provides
"2. An action founded on tort shall not be brought after the expiration of six years from the date on which the cause of action accrued."
Section 5 of the Act provides for the time limit for actions founded on simple contract. It provides
"5. An action founded on simple contract shall not be brought after the expiration of six years from the date on which the cause of action accrued."
In Bell v Peter Browne & Co 1990 2QB495 Lord Justice Nicholls considered the starting date for the running of the six-year limitation periods, respectively, for professional negligence claims based on contract and on tort. He said as follows at 501H-502A
"One might have expected that parallel professional negligence claims based on contract and the tort of negligence would have a common starting date for the running of the six-year limitation periods applicable in most cases under the Limitation Act 1980. But this is not so, because a cause of action based on negligence does not accrue until damage is suffered. It is from that date, not the date on which the negligent act or omission occurred, that the six-year limitation period prescribed by section 2 of the Limitation Act 1980 runs".
In respect of contract, he said as follows at page 500c
"… [Section 5 of the Limitation Act 1980] precludes the bringing of an action founded on simple contract after the expiration of six years from the date on which the cause of action accrued. Ascertaining that date involves identifying the relevant terms of the contract and also the date on which the breach relied on occurred."
Lord Justice Nicholls then considered two different situations. The first is where a solicitor (in that case) failed to take steps which were required of him by the contract thereupon being in breach of contract. He concluded that the six-year limitation period began to run from the date of the breach even though the breach remained remediable for many years. Thus, even though remediable, time running from the breach of the limitation period expired, so that a claim based on such a breach of contract was statute-barred, even though the solicitor's breach of contact did not discharge his obligations. Thus he said, at 500H, as follows
"It is, of course, true that the solicitor's breach of contract in 1978 did not discharge his obligations. Had the plaintiff learned a year or two later what happened, he would still have been entitled to go back to his former solicitor and require him to carry out, belatedly, his contractual obligations so far as they could still be performed. … Despite this, it was in 1978 that the breach occurred. Failure thereafter to make good the omission did not constitute a further breach. The position after 1978 was simply that, in breach of contract, the solicitor had failed to do what he ought to have done in 1978 and, year after year, that breach remained unremedied. Nor would the position have been different if in, say, 1980 the plaintiff's solicitor had been asked to remedy his breach of contract and he had failed to do so. His failure to make good his existing breach of contract on request would not have constituted a further breach of contract: it would not have set a new six-year limitation period running. Once again, the position would have been simply that the solicitor remained in breach. Nor, finally, is the position any different because … the breach remained remediable until 1986 when the house was sold. A remediable breach is just as much a breach of contract when it occurs as an irremediable breach, although the practical consequences are likely to be less serious if the breach comes to light in time to take remedial action. Were the law otherwise, in any of these instances, the effect would be to frustrate the purpose of the statute of limitation, for it would mean breaches of contract would never become statute-barred unless the innocent party chose to accept the defaulting party's conduct as a repudiation, or perhaps performance ceased to be possible."
For completeness I add that the above observations are directed at the normal case where a contract provides for something to be done, and the defaulting party fails to fulfil his contractual obligation in that regard at the time when performance is due under the contract. In such a case there is a single breach of contract. By way of contrast are the exceptional cases where, on the true construction of the contract, the defaulting party's obligation is a continuing contractual obligation. In such cases the obligation is not breached once and for all, but it is a contractual obligation which arises anew for performance day after day, so that each successive day there is a fresh breach. A familiar example of this is the usual form of repairing clause in a tenancy agreement. Non-repair for six years does not result in the repairing obligation becoming statute-barred while the tenancy still subsists. The obligation of the tenant or the landlord to keep the property in repair is broken afresh every day the property is out of repair
… We were much pressed with the decision … in Midland Bank Trust Co Ltd v Hett, Stubbs and Kemp 1979 Ch 384. That case may be distinguishable on its facts. There, the defendant firm of solicitors never treated themselves as functi officio in relation to the auction. They continued to have dealings with their client in respect of the unregistered option, … The incident case stands in marked contrast. There is no suggestion that the defendants had any further contact with the plaintiff or his affairs after the conclusion of the divorce proceedings. That was more than six years before the writ was issued. The amended statement of claim, indeed, alleges that the solicitors owed a "continuing duty" to protect the plaintiff's one-sixth beneficial interest until that duty could no longer be fulfilled or the plaintiff accepted the solicitor's breach as repudiation. But this alleged continuing duty is not founded on any facts other than the initial retainer I have mentioned. This allegation takes the plaintiff's case no further. "
SECTION 33 OF THE LIMITATION ACT 1980
Section 33 of the Limitation Act 1980 provides for discretionary exclusion of the time limit for actions in respect of personal injuries or death. It provides:
"33-(-1) If it appears to the court that it would be equitable to allow an action to proceed having regard to the degree to which –
(a) The provisions of section 11 … of this Act prejudice the plaintiff or any person whom he represents;
and
(b) Any decision of the court under this sub-section would prejudice the defendant or any person whom he represents;
The court may direct that those provisions shall not apply to the action, or shall not apply to any specified course of action to which the action relates. …
(3) In acting under this section the court shall have regard to all the circumstances of the case and in particular to –
(a) The length of, and the reasons for, the delay on the part of the plaintiff
(b) The extent to which, having regard to the delay, the evidence adduced or likely to be adduced by the plaintiff or the defendant is, or is likely to be, less cogent that if the action had been brought within the time allowed by section 11 …
(c) The conduct of the defendant after the course of action arose, including the extent (if any) to which he responded to requests reasonably made by the plaintiff for information or inspection for the purpose of ascertaining facts which were, or might be, relevant to the plaintiff's course of action against the defendant;
…
(e) The extent to which the plaintiff acted promptly and reasonably once he knew whether or not the action, act or omission of the defendant, to which the injury was attributable, might be capable at that time of giving rise to an action for damages;
(f) The steps, if any, taken by the plaintiff to obtain medical, legal or other expert advice and the nature of any such advice he may have received. …"
The discretion given to the court under section 33 is unfettered. It is to do what is fair and just in all the circumstances of the case. Nonetheless, the appellate courts have emphasised the burden placed on the claimant if she is to avail herself of the discretion given to the court. By way of example in KR v Bryn Alyn Community Holdings Ltd 2003 QB 1441 at paragraph 72(ii) Lord Justice Auld spoke, at paragraph 74, of there being a "heavy burden" on the claimant and it being "an exceptional indulgence" and, in Sayers v Chelwood 2013 1WLR 1695, Lord Justice Jackson said at paragraph 53
"…there can be no doubt that if a claimant commences proceedings out of time and asks the court, in the exercise of its discretion under section 33 of the Limitation Act, to dis-apply section 11 … then the burden is on the claimant to persuade the court by evidence and argument that such a direction is appropriate….such a claimant is seeking the indulgence of the court … such indulgence is exceptional, in the sense that the claimant is seeking an exemption from the normal consequences of failing to commence proceedings within the limitation period".
He went on to say at paragraph 56
… " All that one can say about the general approach to section 33 is that the burden is on the claimant. The claimant is seeking to be exempted from the normal consequences of failing to issue proceedings in time. It is for the claimant to establish by reference to the criteria set out in section 33 that it would be equitable to allow the action to proceed despite the expiry of the prescribed limitation period".
He discouraged an overly elaborate approach and encouraged a focus on the terms of the section. He discouraged, in particular, adding to the burden of the claimant by saying that it was "heavy" as opposed to simply saying that the burden was on her.
Most recently Lord Justice McCombe, in the case of RE v GE 2015 EWCA Civ 287, said at paragraphs 58 -59
"58. … The question for the court under section 33 is whether it "would be equitable to allow the action to proceed", notwithstanding the expiry of the primary limitation period. That question is to be answered by having regard to all the circumstances of the case, including in particular the factors identified in section 33(3).
59. Whether it is "equitable" to allow an action to proceed is no different a question, in my judgment, from asking whether it is fair in all the circumstances for the trial to take place … That question can only be answered by reference … to "all the circumstances" including the particular factors picked out in the Act. No factor, as it seems to me, can be given a priori importance; all are potentially important. However the importance of each of those statutory factors and the importance of other factors (specific to the case), outside the ones spelled out in section 33(3), will vary in intensity from case to case. One of the factors will usually be … that statutory limitation rules are
'… no doubt designed in part to encourage potential claimants to prosecute their claims with reasonable expedition … but they are also based on the belief that a time comes when, for better or worse, a defendant should be effectively relieved from the risk of having to resist stale claims' [Bingham MR in Dobbie v Medway HA [1994] 1WLR 1234 , 1238 D-E]
Nor must it be forgotten that one relevant factor is surely that the very existence of the limitation period which Parliament has decided is usually appropriate."
THE FACTS AND EVIDENCE
The claimant was born on 18th March 1979. In 1996, with the benefit of an epidural, she gave birth to her first child. In April 2003 she became pregnant again. During the evening of 3rd January 2004 she was admitted to Medway's hospital, hypertensive with proteinurea. At 2pm on 4th January, she was transferred for induction of labour by artificial rupture of membranes. At about 8:50pm, she elected to have an epidural. At 9am on 5th January 2004 an anaesthetist, Dr Kanna, attended and at about 9:15am he began the epidural procedure. The first stage entailed siting the needle in the epidural space. The second stage entailed threading a catheter into the epidural space and beginning the administration of the anaesthetic block.
In her statement in support of her application of public funding made to Wolferstans, dated 22 July 2004, she said:
"The anaesthetist gave me the epidural, had me sitting at the edge of the bed while he injected it. I thought this was strange as on the previous occasion I had had to lie down on the bed whilst I had the injection. Immediately the anaesthetist put the needle into my spine I felt everything, from my waist down, go numb. I told the anaesthetist what had happened but he said that couldn't be the case as he hadn't started to inject the anaesthetic at that point. I immediately knew that something was wrong and began to panic. I could not feel my legs and had a pain which felt like it was rushing up my spine and into the front of my head. The pain then moved into my neck and all around the back of my head. I was becoming increasingly agitated and all the anaesthetist said to me was "easy tiger"."
A note written by one of the midwives at 14:30 on 5th January is as follows
"09:30. Kara feeling strange. Complained of pain in upper back and headache. Unable to stay still. Asked to lay down instead of sitting up. … Unable to… give epidural drugs at present… Kara in present condition although needle sited."
At 18:00 on 5th January, Dr Kanna described the claimant's condition as follows:
"Severe headache (periorbital and frontal) and right shoulder pain. This patient caused a lot of trouble for us doing her epidural (got agitated) complained of severe headache the minute after siting her epid … complained of … and that she can't move her leg. Very anxiety … Explained v possibility dural puncture. Pain killers prescribed …"
In her 22nd July statement, the claimant recorded that her child was delivered by caesarean section. After she came round from the anaesthetic she was still numb below her waist and had the pain in her head. She was told over a number of days that she would be OK in time. On 9th January, when she was due to be released, she told the hospital staff she was still numb in her legs. They didn't seem concerned. Her first day home she collapsed at the top of the stairs and couldn't get up. Eventually, she was admitted back into hospital for a CAT scan and was told that they found fluid on her brain from the epidural. She was transferred to King's College Hospital and underwent major surgery to release fluid from her brain. On 31st January they inserted a shunt to drain the fluid from her brain which is permanent.
She was discharged from King's College Hospital on 6th February 2004, the symptoms of hydrocephalus having improved dramatically.
By 17th February 2004, the claimant's GP wrote to a consultant neurologist describing a major problem concerning loss of sensation from the waist down. She is described as struggling to walk with the aid of two crutches. The fear was she would require a wheelchair unless her neurology improved.
By a letter of the same date, the GP requested that the hospital hold a critical incident meeting because the claimant's family were asking questions about her care upon which the GP was not in a position to give an informed explanation.
On 15th March 2004, the claimant made contact with Accident Support Ltd with a view to bringing a claim against the Trust. On the form, the claimant gives the following description "Had epidural in her back causing fluid on the brain and paralysis from waist down. Client had to have major brain surgery … Client uses crutches to walk. Waiting for wheelchair …The anaesthetist injecting the epidural on clients back injected needle too far into client's spine causing paralysis from (illegible) into her legs".
In her statement of 22nd July, under the heading "Breach of Duty of Care", the claimant said "I believe that the anaesthetist who performed the epidural did so negligently in that he, I believe, pushed the needle too far into my spine causing damage".
Under the heading "Causation of Injury", she attributed the severe loss of feeling in her legs, total numbness in her big toes and loss of all the reflexes and sensations in her legs, to the anaesthetist's negligence as well as the hydrocephalus.
On 17th August 2004, Wolferstans obtained a certificate of public funding to investigate the claim against the Trust.
On 8th October 2004 Wolferstans wrote to Medway seeking disclosure of hospital records with a view to investigation of a possible claim. Wolferstans stated that, if the matter was to be pursued, a detailed letter of claim would be provided. In November 2004, Wolferstans received and reviewed the medical notes from Medway. They demonstrated that the claimant consistently said the problems she was experiencing were triggered by the epidural but that the hospital dismissed the suggestion that the symptoms were related to the epidural. In fact, no letter of claim was sent by Wolferstans to Medway. No claim form was served and, on 21st January 2008, Wolferstans confirmed they had closed their file and invited Medway to do the same.
Following Wolferstans' letter of 8th October 2004, Medway obtained preliminary comments from Dr Mukherjee (lead clinician for obstetric anaesthesia) who reviewed the claimant's notes and Dr Venkat, the consultant anaesthetist who saw her for the first time on 28th January 2004. No further investigation was made at that stage and no other witnesses were then contacted.
In July 2005, Wolferstans prepared letters of instruction for Dr Bogod, a consultant anaesthetist, and Professor Schapira, a consultant neurologist. Detailed letters of instruction then followed.
Dr Schapira provided his report on 13th February 2006. He was prepared to support a case on causation in respect of the hydrocephalus arising from the epidural procedure. He wanted to review the MRI scan as that might demonstrate damage to the spinal cord by the needle.
He identified two potential causes of the claimant's problems. The numbness and weakness in the legs would imply there had been some damage to the spinal cord by the epidural needle which would be indicative of negligence. Alternatively, there could have been a dural puncture with bleeding into the cerebral spinal fluid space, that being a more common cause of symptoms of headaches and hydrocephalus. Wolferstans were of the view that they needed to consider whether or not the siting of the epidural needle was negligent.
Mr Bogod's report of 1st April 2006 concluded the most likely cause of the subsequent symptoms was a dural puncture followed by a significant haemorrhage during the epidural. While that would explain the headaches he did not consider it would have caused the hydrocephalus or the neurological problems in the legs and, therefore, felt that the needle must also have penetrated into the spinal space and hit a blood vessel which would have led to blood travelling up to the head, causing the hydrocephalus, and possibly cord compression, explaining the neurological symptoms. The other possibility to explain the leg symptoms was that the epidural needle had actually penetrated the spinal cord.
Dr Bogod also considered the possibility of the wrong drug being injected, but dismissed this option as the claimant had in fact been anaesthetised.
His conclusion was that there was no evidence to suggest that the anaesthetist had acted negligently. Dural punctures can occur without negligence during epidural procedures. If, however, the needle had penetrated the spinal cord then that would have been negligent. The best way to establish whether this was the case was to obtain an MRI scan to see whether there was any evidence of direct spinal cord damage by the needle.
Arrangements were then set in train for the claimant to undergo an MRI scan. That was problematic. There is a detailed account in Gill Burrows' witness statement for Wolferstans concerning attempts to arrange an MRI scan. I do not refer to them in detail but her account is not disputed. In the end, a scan was arranged for 26th January 2007 at the Nuffield Hospital, but that was unsuccessful because the claimant was in too much pain, was unable to lie still and was reported to be claustrophobic. Attempts were made to arrange a second scan which required extensions of the primary limitation period to be agreed by the Trust, initially to 7th April 2007, then to 7th May 2007. A further attempt was made to conduct an MRI scan on 23rd April 2007 but the claimant was unable to keep still for long enough to allow the scan to take place.
The Nuffield wrote to Wolferstans on 27th April reporting the failure of the second attempt at an MRI scan stating that the only option was a scan with general anaesthesia.
At this point conduct of the claimant's case was transferred within Wolferstans from Mrs Burrows to Mrs Buckthought, who describes herself as a very experienced clinical negligence lawyer. She immediately sought a further extension of time to 7th July to which the Trust acceded.
On 2nd May Mrs Buckthought wrote to the claimant that the Nuffield had confirmed that the only option was to proceed by way of general anaesthetic. Mrs Buckthought stated that she was "really quite reluctant to go down this route because of the obvious implications that this would have for [the claimant]". She asked that they discuss matters over the phone. On 30th May the claimant and Mrs Buckthought had a meeting at which it appears the claimant agreed that it was extremely unlikely that she would be able to undergo an MRI scan. The claimant had similar concerns to Mrs Buckthought about undergoing one under general anaesthesia, as did her GP. Mrs Buckthought said they needed realistically to reassess the strengths and weaknesses of the claim, bearing in mind that they could not obtain the MRI scan which the experts had previously indicated was crucial.
On 4th June 2007 Mrs Buckthought notified the claimant that she had written to the experts to assess the strengths of the claim if an MRI scan were not available. On 18th June 2007 Mrs Buckthought received a letter from Dr Bogod who stated he did not know of any other way of assessing the spinal cord anatomy without an MRI scan.
On 26th June, Mrs Buckthought asked for a further extension to the 7th August to which Medway agreed. On 16th July Professor Schapira wrote that both he and Dr Bogod considered it very likely that the dura was punctured at the time of the epidural and that this could have allowed blood to enter the CSF space which could have resulted in an inflammatory process such as to induce hydrocephalus. Dr Bogod did not consider the puncture of the dura to have been negligent. The alternative explanation, that there was direct damage to the spinal cord, required MRI investigation. He added that any alleged failure relating to the care the claimant received after the injury would, for the most part, not have caused further injury.
On 19th July 2007 Mrs Buckthought wrote to the claimant that she had received Professor Schapira's response. She explained that both Dr Bogod and Professor Schapira were of the view that the most likely cause of the injury was the penetration of the dura mater which had occurred non-negligently. The file note of the same date recorded that it was "difficult to see how we can now take this further".
On 24th July 2007 there was a long telephone call between Mrs Buckthought and the claimant. Mrs Buckthought explained that whilst they could establish causation of her injury they could not establish breach of duty of care as the most likely cause was an inadvertent puncture of the dura mater, which Dr Bogod said was not negligent. On the other hand, in respect of aftercare, they could identify breach of duty but were not able to identify any causation of injury as per Professor Schapira. Mrs Buckthought noted that she assured the claimant that the fact that she could not undergo an MRI scan was not determinative of the decision to advise her to discontinue. Whilst there was a possibility that she had damage to the spinal cord, the much more likely cause, the experts felt, was dural puncture and, on the balance of probabilities, this was what caused the injuries. Her advice was to discontinue the claim.
On 26th July Mrs Buckthought wrote to the claimant reiterating her advice that the claimant should discontinue the claim and provide written instructions to that effect. In that letter Mrs Buckthought stated that, by discontinuing, the claimant would not be able to recommence her claim at any later stage because the limitation period had already expired, though it had been extended by Medway to 7th August. Once the case was discontinued and she passed that date, Medway would argue that she was out of time for bringing a further claim.
On 30th July 2007, the claimant asked Mrs Buckthought for a further set of her hospital records. She wanted to have another look at them before making a decision. She referred to her own neurologist being critical of the reports of Professor Schapira and Dr Bogod. Mrs Buckthought obtained a further extension from Medway to 7th September. On 3rd August, the claimant spoke to Mrs Buckthought to the effect that she agreed with Mrs Buckthought concerning the spinal injury part of the claim but wished to continue the claim with regard to aftercare. Mrs Buckthought explained she would commence proceedings in the following week to protect her position but that it was unlikely that the Legal Service Commission would support such a claim. On 8th August, Mrs Buckthought reviewed matters and noted that in her view there was clearly no claim in respect of the epidural itself and that, as far as the potential failure to diagnose the hydrocephalus was concerned, that would only produce a case that was very limited in value and that, overall, there was insufficient merit to proceed. On 9th August, Mrs Buckthought wrote to the claimant concerning her view there would be difficulties pursuing any claim in respect of the post-operative care. Whilst they might be able to identify a breach of duty of care, Professor Schapira's very clear opinion was that such breach of duty did not have any effect in terms of causation as the treatment and prognosis would have been the same. Mrs Buckthought concluded that she did not believe they would be able to continue with the claim and she had notified the Legal Services Commission accordingly. She anticipated the Legal Services Commission would issue a "show cause letter" as to why funding should continue.
On the same day Mrs Buckthought sent the claimant a form of authority requiring the claimant to tender instructions authorising Wolferstans to discontinue with her clinical negligence claim and thereafter to discharge her public funding certificate.
On 10th August 2007, relying on Mrs Buckthought's advice, the claimant completed the form of authority and, on 15th August, emailed it to Wolferstans. Mrs Buckthought acknowledged receipt on that date by email to the effect that the claimant had now provided her with instructions to discontinue the case in any event.
On 7th September the Legal Services Commission appears to have resolved to discharge the certificate of public funding, although this, apparently, was not communicated to Wolferstans for some days. As a result, on 11th September, Mrs Buckthought wrote to the Legal Services Commission inviting them to respond to her previous request that they should discontinue funding.
The claimant's neurological symptoms did not resolve and on 12th November 2009 and 10th August 2010 she underwent MRI scans, respectively, of the head and spine, performed under sedation. The MRI scan of the spine demonstrated extensive spinal abnormalities which, in the opinion of the claimant's doctors, could only plausibly be caused by the condition known as arachnoiditis, inflammation of the arachnoid, one of the membranes surrounding and protecting the nerves of the central nervous system including the brain and spinal cord. It was a likely trigger of the hydrocephalus which developed in January 2004 and the cause of the claimant's ongoing neurological symptoms affecting her lower limbs.
Within a week, the 17th August 2010, the claimant revisited Wolferstans enquiring about a possible new claim. But on 2nd September 2010 Wolferstans, having completed their preliminary screening procedure, stated that they were unable to assist because the claim was time-barred and she would have considerable difficulty persuading the court to exercise its section 33 discretion.
The claimant approached her current solicitors who applied for legal aid. They applied for clinical notes and records from her GP and Medway at the beginning of September 2010. The bulk of the notes and records were received by the end of October. On 30th December 2010, Medway emailed the new solicitors asking why it was thought there was a claim against the Trust on the basis that she did not fall foul of the Limitation Act, as opposed to a claim against her previous lawyers.
The new solicitors sought advice from counsel on limitation and, in particular, section 33. In June 2011, advice was received which was negative in respect of the prospects of a successful section 33 application.
Dr Bogod was instructed to reconsider the case. His second report was dated 19th April 2012. This involved rehearsing much of his original report but updating and altering his conclusions.
In his initial report, Dr Bogod described two areas of injury; serious cerebral problems evinced by severe headache immediately after the epidural procedure, and a less clear-cut, but still convincing, history of numbness and weakness in her legs. An explanation for what had happened needed to account for these disparate elements as well as fitting with the events surrounding the epidural procedure. In his initial report, the only feasible mechanism put forward was dural puncture followed by a significant haemorrhage from one of the blood vessels in or around the spinal cord.
Dural puncture was extremely likely because: first, the epidural needle finished at a depth of seven centimetres from the skin which suggested the needle went further than usual; and second, both the first epidural dose and the second caesarean section dose produced a much higher block than would be expected with a normal epidural. However, in that report he also recorded that the dural puncture would not, on its own, account for either the hydrocephalus or the neurological problems in the legs. To explain these phenomena it would be necessary to postulate that the epidural needle, having penetrated into the spinal space, then hit a blood vessel and that blood travelled up to the head in the cerebral spinal fluid (CSF) and behaved like a sub-arachnoid haemorrhage blocking the free flow of CSF and causing hydrocephalus. If the needle had actually penetrated the cord then it could have caused direct neurological damage to the legs. Alternatively, the same bleeding which caused the hydrocephalus could also have compressed the spinal cord resulting in a more gradual loss of function.
However, against that hypothesis was the fact that a haemorrhagic cause for the hydrocephalus was considered unlikely by the surgeon because of the relatively low red cell count in the CSF at the time of surgery. Furthermore, direct spinal cord damage by the needle tip would almost certainly have caused the claimant to feel a very severe pain like an electric shock, whereas none of her accounts of the events indicated that. Finally, gradual cord compression would not readily account for the immediate leg numbness of which the claimant complained as the needle was inserted.
Dr Bogod had also considered another possible explanation, namely, that the anaesthetist made a serious error and injected the wrong drugs down the epidural catheter. If these drugs could have found their way into the sub-arachnoid space, as would be the case in the presence of a dural puncture, they could have set up an inflammatory reaction which would result in both hydrocephalus and aggressive neurological dysfunction in the legs. However, it would be difficult to reconcile this hypothesis with the fact that the injected drugs produced their expected numbing effect enabling caesarean section to be carried out.
He had reported that he could not rule out some form of idiosyncratic reaction on the claimant's part to the drugs that were injected. He referred to having encountered one case with several similarities.
He had opined in the first report that: (i) there was an implied direct connection between the claimant's injuries and the epidural procedure; (ii) it was very likely that the claimant suffered an inadvertent dural puncture at the time of the epidural procedure; (iii) there was no evidence of substandard practice; (iv) if it transpired that there was direct damage to the spinal cord from the epidural needle that would strongly support the view that the performance of the epidural procedure was unacceptably poor; (v) the after care was poor but it would be difficult to demonstrate any direct causative link between that and the damage the claimant has suffered; and (vi) to answer the several areas of uncertainty he strongly recommended an MRI scan of the claimant's thoracolumbar spine
In his second opinion, he noted the fact that, subsequently, a scan had shown a picture which was compatible with arachnoiditis with loculation of the sub-arachnoid space leading to cord compression. He recorded that, in 2006, his view was that the only feasible mechanism was dural puncture followed by a significant haemorrhage from one of the blood vessels in or around the spinal cord. He recorded that in the intervening years he had been involved in, or become aware of, similar cases which had led him to change his view. He is now of the opinion that the fluid used to locate the epidural space (most likely), or the drugs used to initiate the epidural block (less likely) became contaminated with chlorhexidine, an antiseptic widely used to decontaminate the skin before sterile procedures.
He repeated his reasoning to support his conclusion that dural puncture was extremely likely to have occurred. He then recorded that in his original report he pointed out that dural puncture would not explain the development of hydrocephalus or neurological problems in the legs but had discussed the possible aetiologies stressing that none was very convincing.
He explained why none of: bleeding into the sub-arachnoid space; injection of the wrong drugs; and an idiosyncratic reaction to the correct drugs; were convincing. He referred to the case of Angelique Sutcliffe, where he had been instructed as an expert to support her case. In that case, decided after his first report, a court had found that the spinal dose of bupivacaine had become contaminated with chlorhexidine used to prepare the skin, probably as a result of the syringe coming to lie in a pool of the antiseptic on the sterile procedure trolley and that it was this chemical which caused the catastrophic reaction. At the time of his first report, he had felt that this was unlikely and there was no prima facie evidence that contamination had occurred. However, his opinion changed after hearing of an Australian patient, Ms Wang, where it was known that the anaesthetist had accidentally used a chlorhexidine solution instead of saline to identify the epidural space. She suffered hydrocephalus and progressive neuropathology of the legs. Thus it was now clear that chlorhexidine, injected down an epidural needle into the sub-arachnoid space can result in a progressive arachnoiditis characterised by a rapid onset of obstructive hydrocephalus and progressive neurological deterioration of the lower limbs affecting bladder and bowel functions, such as with the claimant.
He concluded that, in the light of cases of Sutcliffe and Wang, since there is no other explanation of the claimant's problems which adequately explains the outcome "I am compelled to conclude that, on the balance of probabilities, chlorhexidine was injected down the epidural needle or catheter, either in error for the correct solution, or as a contaminant".
He maintained his view that a dural puncture, on its own, was not indicative of sub-standard practice. But if it were found that the anaesthetist administered chlorhexidine, either down the epidural needle or the catheter, then that would be indicative of unacceptably poor practice. That would similarly be the case if there were inadvertent contamination of the correct fluid with a small amount of chlorhexidine as there was a burden of duty upon anaesthetists to ensure that epidural and spinal injections remain completely uncontaminated.
Thereafter, reports were obtained from consultant neurologists all of whom reached the view that the claimant's injuries were, on the balance of probabilities, caused by the injection of chlorhexidine into the epidural space during the process of analgesia on 5th January 2004.
Proceedings were commenced against Wolferstans on 2nd September 2013, served on the 8th December 2013.
Wolferstans served their defence on the 8th May 2014. They contended that the limitation period governing the claim against the Medway was still current so that the claimant had not lost the chance to pursue Medway. Her claim against Wolferstans disclosed no cause of action. Wolferstans also contended that the contractual claim against them was out of time. In the alternative, they contended that if, contrary to their primary case, the claimant was prevented by limitation from pursuing Medway she would have had good prospects of succeeding on a section 33 application, following the MRI scan in August 2010 and Dr Bogod's second report in April 2012, and that failure to make such an application would constitute a failure to mitigate her loss.
On 28th August 2014, proceedings were issued by the claimant against Medway. They invited Medway to restrict its pleaded defence to the issue of limitation.
On 24th November 2014, Medway served a defence alleging that the claimant had the requisite knowledge for the purposes of sections 11 and 14 of the Limitation Act by 22nd July 2004 at the latest, so that the claim was statute-barred.
An application has now been made by the claimant in the proceedings against Medway seeking discretionary release under section 33.
THE PLEADED CLAIMS
THE CLAIM AGAINST MEDWAY
The nub of the factual basis for the claim is at paragraphs 60, 62, 63, 64 and 65 of the Particulars of Claim. They read as follows
"60… The claimant underwent an MRI scan … on or about 10th August 2010 [of … the spine]
…
62. The MRI scan of the claimant's spine demonstrated extensive spinal abnormalities, the only possible cause of which being arachnoiditis.
63. The arachnoiditis was the likely cause of the hydrocephalus which developed in January 2004 and of the claimant's ongoing neurological symptoms.
64. The arachnoiditis was caused by a chemical contaminant. On the balance of probabilities, the chemical contaminant was chlorhexidine (an antiseptic) used to clean the claimant's skin in preparation for the epidural which was, or must have been, introduced into the cerebral spinal fluid space on 5th January 2004 when the epidural needle was placed (to test whether or not the needle was in the sub-arachnoid space) or at the time when the catheter was threaded.
65. In so contending, the claimant will in particular rely upon the following:-
65.1 The claimant suffered sudden severe symptoms (including headache, pain in the back and agitation) after the anaesthetist placed the epidural needle but prior to the insertion of any anaesthetic agent.
65.2 The symptoms were suggestive of dural puncture and either bleeding into the sub-arachnoid space or contamination of the cerebral spinal fluid …
65.5 Blood contamination of the cerebral spinal fluid could not have been the cause of the irritation of the arachnoid membrane since the CT angiogram conducted on or about 31st January 2004 excluded intra-cranial-vascular pathology (which could have caused sub-arachnoid haemorrhage) and intra-dural-arterial haemorrhage could not have occurred since damage to the conus of the cord would have occurred which would have resulted in a different pattern of symptoms.
65.6 Accordingly, the cause of the arachnoiditis was chemical contamination with chlorhexidine at the time of the siting of the epidural on 5th January 2004.
Breach of Duty
66. Contamination with chlorhexidine occurred and could only have occurred by reason of negligent clinical practice on the part of the anaesthetic team. In the premises, the claimant will rely upon the doctrine of Res Ipsa Loquitur as establishing breach of duty on the defendant Trust's part.
67. Further, or in the alternative, the claimant's injuries and consequential losses were caused by the negligence of the defendant Trust's servants or agents in breach of their duty to the claimant."
Paragraph 67, contains particulars of negligence. Particulars number 11 to 19 relate to complaints about the aftercare of the claimant including the response to the symptoms experienced by her immediately after the epidural procedure. As a consequence it is said that the negligence in her aftercare caused the claimant to suffer the consequences of delay in the diagnosis of hydrocephalus from 5th January 2004 to 30th January 2004.
On causation, the case is pleaded in the following terms
"68. Had the defendant Trust's servants or agents exercised the requisite skill and care, the claimant would not have been contaminated with chlorhexidine and/or chlorhexidine would not have entered the sub-arachnoid space and/or contaminated the cerebral spinal fluid. But for the negligence of the defendant Trust, the claimant's hydrocephalus, or her neurological symptoms and her continuing neurological disabilities would have been prevented.
69. Had the treating doctors exercised reasonable care during the period from 5th January 2004 to 30th January 2004, the claimant's neurological condition would have been diagnosed on or shortly after 5th January 2004 and the delay of 25 days in the diagnosis and treatment of the hydrocephalus would have been avoided."
The Particulars of Claim set out particulars of injury, loss and damage. There is no reference to any injury, loss or damage suffered during the period between 5th January and 30th January and said to be occasioned by the negligent aftercare of the claimant.
THE CLAIM AGAINST WOLFERSTANS
The pleading opens with a brief statement of the claimant's clinical negligence claim in the following terms
"2. At or about 9:15 on 5th January 2004, an epidural was administered in the course of which procedure contamination of the cerebral spinal fluid with chlorhexidine occurred.
3. As a result of the said contamination, the claimant developed acute arachnoiditis and a consequent gross hydrocephalus affecting all four ventricles of the brain necessitating the surgical insertion of a ventriculo peritoneal shunt.
4. By reason of the aforesaid, the claimant has been left with severe permanent neurological injury and thereby suffered loss and damage."
The pleading then sets out the detailed chronology of the involvement of the claimant with Wolferstans. In particular, at paragraphs 47 and 48, reference is made to advice tendered to the claimant by Mrs Buckthought on 24th July 2007 and by letter dated 26th July 2007 that, given the very slim prospects of success, the claimant should discontinue the claim and that she should provide instructions to that effect in writing.
The chronology continues with reference to activity on the file and at paragraph 57 it states
"On or about 15th August 2007, the claimant confirmed to the defendant that she agreed to discontinue her claim.
58. In the premises:
58.1 The defendant's retainer was terminated.
58.2 No claim form was issued against and/or served on the Medway NHS Trust prior to the expiry of the limitation period (which had in any event been extended by agreement to 7th September 2007).
58.3 The claimant's right to bring a claim against the Medway NHS Trust was irretrievably lost."
At paragraph 66, it is contended that Wolferstans, its servants or agents, were in breach of contract and/or in breach of tortious duty. It sets out, at paragraph 66.1 to 12, a series of particulars of negligence which include at 66.11
"Wrongly advised the claimant and the Legal Services Commission that the case had limited prospects of success such that it should not be pursued when there were in fact no grounds upon which to make such a determination since matters had not been investigated sufficiently …"
The pleading sets out, at 66.11.1 and 66.11.2, contentions in support of that proposition.
At 66.12, the pleading continues
"Failed to issue a claim form (and/or further extend the limitation period by agreement) in order to protect the claimant's position, prior to the expiry of the limitation period (as extended by agreement) and thereby allowed the claimant's claim to become time-barred."
The claim is put that the claimant lost the chance to pursue her claim against Medway.
SUBMISSIONS AND CONCLUSIONS ON THE QUESTIONS POSED
Question 1. For the purposes of sections 11(4) and 14(1) of the Limitation Act 1980 did the claimant acquire the requisite knowledge for the purpose of her claim against Medway by no later than 22nd July 2004?
Submissions
The claimant accepts, and Medway contends, that she had the requisite knowledge at the latest by 22nd July 2004, the date she made her initial statement to Wolferstans for the purpose of obtaining legal aid to investigate a claim against Medway for negligence in respect of her symptoms – hydrocephalus and neurological difficulties – arising out of the application of the epidural on 5th January 2004.
The claimant and Medway submit that she had, by that date, a broad knowledge of the essence of the act or omission said to be negligent and to which her significant injuries are said to be attributable. She had enough knowledge supporting her belief which was sufficient to make it reasonable for her to begin to investigate whether or not she had a case against Medway. She so firmly believed that her condition was capable of being attributed to an act or omission which she could identify in broad terms that she went to a solicitor to seek advice about making a claim for compensation.
The claimant and Medway do not accept that, during the period up to her MRI scan in August 2010 or receipt of Dr Bogod's second report on 19th April 2012, she was "barking up the wrong tree". Her knowledge throughout was sufficient in general terms. Her knowledge was of the essence of the act or omission to which the injury was attributable. That was sufficient to start time running. Whilst she may not, until April 2012 have known all factual matters necessary to establish negligence or to draft a fully and comprehensively particularised claim, that is not a requirement for time to begin to run.
The claimant and Medway say that the essence of her complaint is that on 5th January 2004 an anaesthetist employed by the Trust administered an epidural to the claimant, that the epidural went wrong, and as a result she developed hydrocephalus and the other neurological problems from which she continues to suffer. Her state of mind, as evidenced by her actions and statements up until 22nd July 2004, was that she was convinced that all the physical problems she was experiencing were a consequence of the administering of the epidural on 5th January 2004. She knew she had significant injuries, hydrocephalus and was suffering considerable back pain and loss of mobility.
She had broad knowledge of the essence of the relevant act or omission immediately the anaesthetist inserted the needle into her back and she experienced unexpected pain. Her knowledge then of what went wrong extended to her belief that the anaesthetist pushed the needle too far into her spine causing damage.
The claimant and Medway point out that her claim continues to be based on the action of the anaesthetist in pushing the needle to the point where there was a dural puncture. The development of Dr Bogod's thinking about the precise mechanism causing her injuries, as evidenced by his report of April 2012, still involves the dural puncture as part of the mechanism by which her injuries were caused. In April 2012 his opinion had developed so that he now attributes the injuries to the development of arachnoiditis through the contamination of the needle or catheter by chlorhexidine which was, or must have been, introduced into the cerebral spinal fluid space when the needle was placed to test whether it was in the sub-arachnoid space, or when the catheter was threaded.
The claimant and Medway contend that, far from barking up the wrong tree, the claimant has, from the outset, had knowledge of: the identity of the defendant; its relevant servants or agents; that her injuries were significant; and that they were attributable in whole, or in part, to the act or omission which is alleged to constitute negligence, nuisance or breach of duty, namely, the administering of the epidural and, in particular, inserting the needle too far so that there was a dural puncture. She has had knowledge of the essence of her case in these respects from the outset and, certainly, from 22nd July 2004.
Wolferstans contend that knowledge did not arise until Dr Bogod's second report of April 2012. They contend that the key lies in the way in which the claim against it was introduced by the claimant
"2. … an epidural was administered in the course of which procedure contamination of the cerebral spinal fluid with chlorhexidine occurred.
3. As a result of the said contamination the claimant developed acute arachnoiditis and consequent gross hydrocephalus …
4. By reason of the aforesaid the claimant has been left with severe, permanent neurological injury and thereby suffered loss and damage."
This was further articulated in that pleading in the following terms
"62. The MRI scan of the claimant's spine demonstrated extensive spinal abnormalities, the only possible cause of which being arachnoiditis.
63. The arachnoiditis was the likely cause of the hydrocephalus in 2004.
64. The most likely cause of the arachnoiditis was a chemical contaminant, namely, chlorhexidine … which was, or must have been, introduced into the cerebral spinal fluid space on 5th January 2004 when the epidural needle was placed … or at the time when the catheter was threaded.
65. Contamination with chlorhexidine occurred, and could only have occurred, by reason of negligent clinical practice on the part of the anaesthetic team on or about 5th January 2004."
It is said that, prior to Dr Bogod's second report, the focus of the claimant, the solicitors and her experts was wrongly directed to considering whether the insertion of the needle had been negligent and had directly caused her injuries.
Dr Bogod's first report concluded that a dural puncture was extremely likely though that would not, in itself, constitute negligent practice. He indicated that a dural puncture would not on its own account for either the hydrocephalus or the neurological problems. To explain those it would be necessary to postulate: that the epidural needle, having penetrated into the spinal space, then hit a blood vessel, blood from which would travel up to the head in the cerebral spinal fluid so as to cause hydrocephalus and could have compressed the spinal cord resulting in a more gradual loss of function. Alternatively the needle had penetrated the cord and caused direct neurological damage to the legs.
There were contra indications to each of these proposed mechanisms – the relatively low red cell count in the cerebral spinal fluid at the time of the surgery, and the claimant not reporting a very severe pain like an electric shock. Thus Dr Bogod opined that, if it transpired that there was direct damage to the spinal cord from the epidural needle, then the performance of the epidural procedure would have been unacceptably poor and that an MRI scan and assessment by an expert neurologist should be undertaken to test that possibility.
Wolferstans contend that Dr Bogod did consider some form of contamination setting up an inflammatory reaction which would result in both hydrocephalus and progressive neurological dysfunction in the legs, but only in the form of a serious error by the anaesthetist by injecting the wrong drugs down the epidural catheter. Dr Bogod discounted this because the injected drugs had produced their expected numbing effect.
The mechanism causing the injuries on which Dr Bogod advised in April 2012 reflected the contamination route. The injuries were caused by arachnoiditis resulting from contamination by chlorhexidine being introduced into the CSF, albeit the precise mechanism was inadvertent contamination of the needle or catheter rather than deliberate but erroneous injection of the wrong chemical. It was only after his consideration of this case in the context of the case of Sutcliffe, to which he had made passing reference in his first report, and the recent case of Wang that this explanation presented itself to Dr Bogod as the only one which could explain what had happened in all the circumstances.
Wolferstans contend that it was only once the claimant had knowledge of her true diagnosis and the connection between arachnoiditis and chlorhexidine contamination that she had the relevant knowledge for the purposes of section 11. It is contended that this is a case in which she and her advisers were "barking up the wrong tree" for some years and that the starting point for limitation is the receipt of Dr Bogod's report in 2012.
Reliance is placed by Wolferstans by way of example upon the decision in Harrison v Isle of Wight NHS Primary Care Trust.
Conclusions
In my judgment, this is not a case in which the claimant and her legal and medical advisors were "barking up the wrong tree" from the outset until the true position was revealed to Dr Bogod in April 2012. On the contrary, from, at the latest, the 22nd July 2004, the claimant had a firm belief that her injuries had been caused by something that had gone wrong in the administration of the epidural. She attributed it to a mechanism which involved the insertion of the needle to the extent that it triggered the injuries. That much was supported by her medical advisers at that stage. The inadvertent dural puncture has been present as the likely mechanism resulting in what went catastrophically wrong from that early stage. From that point the precise mechanism by which the dural puncture led to the injuries was a matter of conjecture and uncertainty as evidenced by the contents of Dr Bogod's first report and it was not until diagnosis of arachnoiditis was confirmed by the MRI scan in 2010 and was further processed by Dr Bogod in his second report in 2012 that the precise mechanism whereby the injuries had been sustained could authoritatively be described by him in the form which is reflected in the pleaded cases against Medway and Wolferstans.
Applying the various formulations which the appellate authorities have provided for the assistance of the courts in applying sections 11 and 14, in my judgment, this is a case in which the claimant did from, at the latest 22nd July 2004, have the requisite level of knowledge, in terms of the firmness of her beliefs and the substance of her knowledge, as to the act or omission alleged to constitute negligence to which her injuries were attributable. It was, the administration of epidural and, in particular the insertion of the needle. True it is that she was not, until April 2012, in possession of knowledge which would enable her precisely to describe and plead the mechanism whereby her injuries were sustained and the precise form of negligence which, it is said, must have occurred so as to cause her injury. Such a level of detail and precise knowledge, however, in my judgment, goes beyond the level of knowledge which is required by section 11 and section 14, as explained in the authorities, to cause time to start to run. She had a broad knowledge of the essence of the causally relevant act or omission to which the injury is attributable sufficient for her to embark on an investigation of whether or not she had a claim. Thus I am satisfied the level of knowledge evidenced in her statement of 22nd July 2004 was sufficient, pursuant to section 11 and section 14 to cause time to start to run.
I also conclude that the development of the formulation, in April 2012, by Dr Bogod of the precise mechanism through which the injuries were caused does not evidence a situation in which the claimant and her advisors were barking up the wrong tree until then.
In my judgment the facts of this case are distinguishable from the facts in Harrison. In that case there was a lack of certainty on the part of the claimant from the outset. The cause of the injury from which the claimant suffered was substantially different from that which had previously been considered at the earlier stage of the investigation.
Accordingly, my answer to Question 1 is yes.
Question 2. Did the claimant acquire such knowledge some time between 16th August 2011 and 19th April 2012?
The answer to this question is no.
Question 3. Did the claimant acquire such knowledge on a date prior to 2nd September 2010 being three years prior to 2nd September 2010 being 3 years prior to the issue of the claim form against Wolferstans?
The answer to that question is yes.
Question 4. At the date of issue of the claim form against the defendant Wolferstans on 2nd September 2013, had the claimant lost the chance to pursue her claim against the Medway NHS Trust?
The answer to that question is yes. However, I have yet to consider the application under section 33 which would, if successful, mean that her claim against Medway would not be statute-barred.
Question 5. At the date of issue of the claim on 2nd September 2013 was the claim against Wolferstans in contract statute barred pursuant to section 5 of the Limitation Act 1980?
Discussion and conclusions
It is common ground that, so far as the claim against Wolferstans is a tortious one, that claim is not statute-barred. It is accepted that the damage sustained by the claimant, namely the loss of the chance of successfully suing Medway, did not occur until 7th September 2007 when the final extension period granted by Medway expired without renewal, at which point, in the light of my decision on Question 1, the claim against Medway became statute-barred (subject to any decision I may make under section 33). As the cause of action in tort accrues only when the damage occurs then the claim instituted by the claimant against Wolferstans on 2nd September 2013 fell within the six-year limitation period, starting on the 7th September 2007, provided for by section 2 of the Limitation Act 1980.
The limitation period is not necessarily the same for a claim brought in contract based on the same underlying facts. The cause of action in contract accrues when the breach of contract occurs and, even though that breach may be remediable, once time has started, it continues, unless it can be said that the breach of contact is of a continuing nature. (Bell v Peter Browne)
The breach of contract contended for by the claimant against Wolferstans is, effectively the giving of advice that she had no good claim against Medway and that she should discontinue her claim and, as a consequence, failing to institute proceedings in time. This was first tendered orally on 24th July. It was then tendered in writing on 26th July 2007 and was finally reiterated on 9th August 2007. It was acted on by the claimant 15th August 2007 when she emailed a copy of her signed form of authority instructing Wolferstans to discontinue her clinical negligence claim and to discharge her public funding certificate.
Thereafter the retainer of Wolferstans as the claimant's solicitors may have continued until 7th September 2007, when the Legal Services Commission resolved to discharge the claimant's certificate of public funding and thereafter communicated that fact to Wolferstans.
In my judgment time began to run on the 24th July 2007 when advice, alleged to be in breach of contract was given. Time began to run again on 26th July 2007 when, for a second time, the same advice was given in written form. It began to run again on 9th August 2007 when, for the third time, the same advice was tendered. On this occasion it was acted on by the claimant by her signing and, on 15th August, returning the form giving instructions in accordance with that advice. At that point Wolferstans could not, in accordance with the claimant's instructions, have instituted proceedings against Medway. Thereafter, although the breach of contract (if it was such) was remediable, it was not a continuing breach which arose afresh day by day so as to give rise to the commencement of a fresh limitation period on each day that passed.
It follows, therefore, that the institution by the claimant of her claim alleging breach of contract against Wolferstans on 2nd September 2013 fell outside the limitation period of six years provided for by section 5 and is time-barred.
The answer to question 5 is yes.
The claimant's application under section 33 of the Limitation Act 1980.
Discussion
This application was made on 11th December 2014, filed with the court on 7th January 2015, in the proceedings brought against Medway commenced on 28th August 2014.
The contention of the claimant is that it would be equitable to allow this action to proceed having regard to the degree to which the provisions of section 11 prejudice the claimant and a decision to allow the action to proceed would prejudice the defendant.
The claimant contends that it only became apparent in April 2012 that she had a claim against Medway. Only on that date did the precise mechanism by which her injuries were caused by way of contamination of the CSF by chlorhexidine, as a result of the dural puncture, become apparent to her expert, Dr Bogod, who then opined that such contamination must have arisen by way of the negligence of the anaesthetic team administering the epidural on 5th January 2004. Until then, although she had "knowledge" sufficient to trigger the running of time for the purposes of section 11, as early as 22nd July 2004, the claimant had, throughout, acted in accordance with her legal advice, supported by the evidence of her medical experts, that her claim, as then understood, had little or no prospects of success. She did not understand that she had what is now said to be a good claim against Medway until the development of Dr Bogod's thinking, in the light of the outcome of the MRI scan and his consideration of similar cases, fructified in his opinion in the report of 19th April 2012.
The claimant contends that she has a good claim against Medway which is now time-barred pursuant to section 11. She is said to be prejudiced by section 11 because she is unable to bring this good claim and she has no appropriate alternative remedy against Wolferstans in negligence. Medway contends that the claim against Wolferstans is an appropriate alternative so as to preclude the operation of section 33
The claim against Wolferstans is for the loss of the chance of suing Medway. Of necessity that would result in her recovering less than 100% of what she would recover were her claim against Medway allowed to proceed and were to be successful.
Furthermore, her ability to succeed against Wolferstans, even to the extent of recovering for the loss of her chance, depends upon her establishing that Wolferstans was negligent. Whilst the claimant contends that she has a good claim in negligence against Wolferstans, that claim too is by no means bound to succeed. I have not, of course, considered in any depth the contentions, respectively, of the claimant and Wolferstans concerning their alleged negligence, but even a cursory examination of the chronology demonstrates to me that the claimant would be by no means bound to succeed in establishing a claim of negligence against Wolferstans.
Accordingly, I am satisfied that the operation of section 11 would prejudice the claimant because the alternative remedy against Wolferstans is by no means bound to succeed and would, in any event, result in an award of damages less than that she would receive were she to proceed against Medway and win.
I have, however, also to have regard to the prejudice to Medway if the claimant were permitted to proceed against Medway by disapplying section 11 of the Limitation Act 1980 to this claim.
I have to have regard to all the circumstances, but in particular, to the matters set out at section 33(3)(a to f).
I have first to consider the length of the delay and the reasons for it on the part of the claimant. The delay is from 7th September 2007 until 28th August 2014 being, respectively, the expiration of the extended limitation period and the commencement of these proceedings against Medway. There is no doubt that the period is significant. That is by no means, on its own, determinate of the issue.
I find that the claimant has been an assiduous litigant. She has acted proactively to investigate and to pursue a claim which she felt she had against Medway from shortly after the 5th January 2004. The only criticism made of her is that, having had two unsuccessful attempts to obtain an MRI scan which was considered critical to her claim, she did not seek to have an MRI scan under general anaesthetic when it was offered by the Nuffield Hospital. In that regard, however, having regard to her then medical condition, the misgivings expressed by Wolferstans and the misgivings expressed by her GP, she cannot be criticised for not undertaking an MRI scan at that time. The extended primary time limit was allowed to expire because she accepted legal advice, underpinned by medical advice, that her claim had little or no prospect of success.
From 7th September 2007 until August 2010, when she was informed that she had suffered arachnoiditis arising out of the outcome of an MRI scan, she was inactive, having acted in accordance with the legal advice she had been given. Immediately she was given her diagnosis of arachnoiditis, she tried to obtain the assistance of Wolferstans, who declined on the grounds that the claim was already statute-barred. She sought the assistance of other solicitors, who had experience in similar cases. They were prompt in beginning to investigate the claim. One course which was adopted was to obtain the advice of counsel, in May 2011, on the operation of section 33 of the Limitation Act. His advice was that an application under section 33 was, at that stage, very unlikely to succeed. That was, of course, prior to receipt of Dr Bogod's second report in April 2012 which, for the first time, spelt out a precise mechanism on the basis of which, it is now said by the claimant, she has a good claim against Medway.
Thereafter, her focus was on proceedings brought against Wolferstans who, in turn, raised the issue that, in fact, she was not time-barred to proceed against Medway by reason of the contention that the requisite knowledge for section 11 purposes did not arise until April 2012. Thereupon, without any significant delay, she commenced proceedings against Medway on 28th August 2014, contending that this claim was in time. As a backstop, in response to an argument raised by Wolferstans, this application under section 33 is now made.
In my judgment, though the period of delay is a significant one which may, in other respects, affect the exercise of my discretion, it cannot be said that the claimant has been at fault in causing any significant part of the delay.
Similarly, I am satisfied that the claimant has not failed to act promptly or reasonably for any of the purposes identified under sub-paragraph e and f of sub-section 3. Sub-paragraph d does not apply in this case.
The focus of the argument in this application has been on section 33(3) sub-paragraphs b and c. Sub-paragraph b requires me to have regard to the extent to which, having regard to the delay, the evidence adduced, or likely to be adduced, by the claimant, or the defendant, is likely to be less cogent than if the action had been brought within the time allowed by section 11.
In my judgment, the evidence of the claimant is not likely to be less cogent by virtue of the delay. In so far as she can give evidence of what happened on 5th January she gave her account to her then solicitors in July 2004 which is as full as it is likely to be.
Medway contends that the passage of time makes the evidence it can adduce substantially less cogent than if the proceedings had been commenced before 7th September 2007. There is contemporaneous evidence from the anaesthetist and the midwife, or midwives, in the form of contemporaneous medical notes and records recording the administering of the epidural. Medway contends that it is now handicapped, by reason of the passage of time, in its ability to obtain direct evidence from those who were present in the administering of the epidural. The anaesthetist, Dr Kanna, has been contacted but has no recollection of the case. Other members of staff who were present are no longer employed by Medway. I am invited to infer that, even if they were contactable, they would be likely to have no recollection either. Medway contends that it is impossible for it properly to defend the case and that this handicap is such that it means that the claimant cannot satisfy me that it is equitable that the case should be permitted to proceed. It is pointed out that in the similar case of Sutcliffe the trial judge had the benefit of hearing from the witnesses to the procedure.
The claimant contends that the handicap under which Medway labours is of little or no significance. First, there is contemporaneous evidence in the form of the charts filled out by the anaesthetist and the members of his team and the notes made by midwives who were in attendance and the anaesthetist, which are virtually contemporaneous. Second, there should be evidence which Medway can adduce of its procedures, systems and protocols designed to prevent inadvertent contamination, such as is alleged by the claimant occurred on this occasion. Third, and in any event, the claimant's case is that the contamination occurred inadvertently and was highly unlikely to have been known to have occurred by any of the Medway staff present at the time, other than as evidenced by the matters that are already in their records. Thus it is contended that it is highly unlikely that Medway would be able to adduce evidence from those who were there which is any more cogent than that which is already available through contemporaneous notes and records. Fourth, the claimant's case is that the expert evidence can establish, on the balance of probabilities, that the precise mechanism of the injuries sustained must have been occasioned by contamination of the needles or the catheter by chlorhexidine and that this could not occur otherwise than by way of negligence on the part of the anaesthetic team. The case is explicitly pleaded on the basis of "Res Ipsa Loquitur". The claimant contends that the case will succeed or fail on the basis of the establishment of the immediate effect of the application of the epidural on the claimant, which is already in evidence from Medway's own records, and on the effect of the medical expert evidence on what, the claimant contends, must have been the cause of the injuries and the fact that it must have arisen through the negligence of Medway. The claimant contends that evidence from those present at the procedure, which goes beyond what is already contained in the notes, would be highly unlikely to be in any way relevant or probative. The complaint is that the contamination was inadvertent, that is to say, those present were unaware of it.
Medway contends that, to the extent that any such contemporaneous recollection of those who were present might be of assistance to them in resisting the claimant's claim, then they are inevitably prejudiced due to the passage of time by being unable now to obtain such evidence.
I also have to have regard to the conduct of the defendant after the cause of action arose, including the extent to which it responded to requests reasonably made by the claimant for information or inspection for the purpose of ascertaining facts which were, or might be, relevant to the Claimant's cause of action against the defendant. No criticism is, or could be, made of Medway in its responding to requests for hospital records or for extensions of the primary limitation period.
The claimant invites me to note that Medway was put on notice that the claimant's family were expressing disquiet about her treatment to her GP as early as 17th February 2004 when the GP wrote suggesting that it would be prudent for the anaesthetics department to hold a critical incident meeting and investigate the circumstances of her delivery further. In any event, although there was never any formal letter before claim, Medway were aware from 8th October 2004 that the claimant's solicitors were seeking disclosure of her hospital records with a view to investigating a possible claim against them arising from the administration of the epidural. They remained on notice, and acceded to a number of requests to extend the primary limitation period, until expiration of that final extension on 7th September 2007. Thereafter it was not until 12th January 2008, when Wolferstans confirmed to Medway they had closed their file, that Medway was invited to do the same.
Following receipt of the letter of 8th October 2004, Medway obtained preliminary evidence in the form of comments from Dr Mukherjee, lead clinician for obstetric anaesthesia, and Dr Venkat, the consultant anaesthetist who saw the claimant following her readmission on 28th January 2004. Though it was open for them to do so, Medway did not then seek any further comments, beyond their contemporaneous notes, from those who had been present during the administration of the epidural. Thus, to the extent that Medway may now be handicapped by the passage of time and the lack of recollection and/or unavailability, of those who were present, to that extent it is the result of its decision made in or about October 2004.
Medway says that this is a stale case which it would not be fair or equitable to permit the claimant to pursue
Conclusions
I have found that the claimant is prejudiced by the provisions of section 11 which, unless I were to exercise my discretion under section 33, prevent her bringing her claim against Medway. I also find that, were I to make a section 33 order, it would prejudice the defendant because it would have to respond to a claim which, but for the order, it would not have to face because it is time-barred. The burden is on the claimant to show that it is equitable for me to make the order where she has failed to commence her proceedings against Medway in time. I have to consider the degree of prejudice to either side and I must have regard to all the circumstances in particular those listed in subsection (3) which are relevant.
I have concluded that the claimant is not responsible for the delay in commencing the proceedings in time or thereafter until 28th August 2014. In this case what particularly exercises me is the question whether Medway's ability to defend the claim is so handicapped by the passage of time since the expiration of the time limit that the claimant is unable to establish that it would be equitable to permit her now to pursue her claim.
In my judgment, whilst there must inevitably be some prejudice because of its likely inability to call as witnesses those who were in attendance, I also have regard to the fact that their contemporaneous accounts are already on record. I find that, given the nature of the claim, they would have been highly unlikely to be able to add anything to their notes which goes to the issue of negligence. The claimant's case is that contamination occurred unknown to those present and involved. Medway can adduce evidence, if it so wishes, of systems, procedures and protocols, to answer the contention that contamination must have occurred by way of negligence. Medway is not handicapped in adducing expert evidence, if it sees fit, to call into question the conclusions of Dr Bogod in his second report. Medway had the opportunity, if it saw fit, to obtain evidence from those who were present and involved on 5th January 2004 but chose not to do so, though it did obtain evidence from others who were in a supervisory position or were involved at a later stage.
The burden of proof is on the claimant. She is seeking an indulgence having not commenced the proceedings in time. I have to reach a conclusion which is fair both to the claimant and the defendant, not just to the claimant.
In my judgment, having had regard to all the circumstances and, in particular, those listed in section 33 (3), it is equitable to allow this action to proceed by directing that section 11 of the Limitation Act 1980 shall not apply to this claim brought against Medway.
The claimant is and has been assiduous in investigating and pursuing her claim. The precise mechanism which the claimant contends gave rise to her injuries, arising out of the administering of the epidural in circumstances pointing to the defendant's negligence, did not become apparent until April 2012. There is no appropriate alternative remedy for the claimant by proceeding against Wolferstans. The way the claimant now puts her case, based on the doctrine of "Res Ipsa Loquitur," means that main burden of the debate before the court will be undertaken by medical experts. There is already sufficient contemporaneous written material from witnesses on both sides which will enable the court to make findings on what occurred on 5th January 2004. The nature of the claim is that negligence was inadvertent and that none of the participants in the procedure would have realised that contamination had occurred. Thus it is highly unlikely that any of those directly present would be in a position to add materially to what they noted at the time. In any event, Medway had the opportunity to obtain comments from those directly present at the time and chose not to do so, though it did take the opportunity to obtain from others. Medway can still adduce evidence of systems, procedures and protocols and from its own expert witnesses to seek to answer the claimant's case. Thus, the prejudice to Medway by now having to defend this claim is substantially outweighed by the prejudice to the claimant if she were now unable to pursue her claim. In my judgment she has discharged the burden upon her to demonstrate that it is equitable to allow her action against Medway to proceed by my exercising the discretion under section 33 to direct that section 11 of the Limitation Act 1980 shall not apply to the action brought by the claimant against Medway.
Pursuant to section 33 of the Limitation Act 1980, I direct that section 11 of the Limitation Act 1980 shall not apply to the action brought by the claimant against Medway.
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The Hon. Mr Justice Coulson:
1. INTRODUCTION
These proceedings arise out of the tragic death of Mrs Frances Cappuccini on 9 October 2012 at Pembury Hospital in Tunbridge Wells. Earlier that day her second son Giacomo was safely delivered by Caesarean section. Thereafter Mrs Cappuccini suffered extensive bleeding and was transferred to theatre for an examination under anaesthetic. It is the Crown's case that, from this point on, grave errors were made by the anaesthetists who were caring for Mrs Cappuccini, with the result that she fell into cardiac arrest. She died at 4:20pm that afternoon.
Two anaesthetists are identified in these proceedings. The first to treat Mrs Cappuccini was Dr Nadeem Azeez. He returned to Pakistan during the investigation into Mrs Cappuccini's death and has not returned. He has not been charged. The second anaesthetist was Dr Errol Cornish, the first defendant in these proceedings, who is charged with the manslaughter of Mrs Cappuccini by gross negligence.
Both anaesthetists were employed by the Maidstone and Tunbridge Wells NHS Trust ("the Trust"). They are charged with corporate manslaughter contrary to Section 1(1) of the Corporate Manslaughter and Corporate Homicide Act 2007 ("the 2007 Act"). There is a suggestion in the papers that this is the first time that an NHS Trust has been the subject of such a charge. The particulars of the offence are in these terms:
"MAIDSTONE AND TUNBRIDGE WELLS NHS TRUST being a body corporate, on the 9th day of October 2012 caused the death of Frances Cappuccini by a gross breach of its duty of care owed to the said Frances Cappuccini, of which breach the management and organisation of its activities by the senior management of the said NHS Trust was a substantial element, in that it failed to take reasonable care to ensure that the anaesthetists involved in the care of Mrs Cappuccini held the appropriate qualifications and training for their role and further failed to take reasonable care to ensure that there was the appropriate level of supervision for the anaesthetic treatment of Mrs Cappuccini."
At a hearing on 4 August 2015, Singh J transferred the hearing of the trial in this case from Maidstone Crown Court to Inner London Crown Court. The trial is fixed to start on 12 January 2016. I have been designated as the trial judge.
At the same hearing, Singh J fixed this hearing in order that I could "hear legal arguments on two applications" by the Trust. These two applications are:
(a) That the Crown should be ordered to abandon those aspects of their case that relate to events before the 2007 Act came into force, or prosecute for manslaughter by gross negligence at common law instead of corporate manslaughter;
(b) That the Crown provide "proper particulars of the allegations that the way in which the Trust's activities were managed or organised by senior management was a substantial element in the alleged gross breach of duty".
In addition, there is a third issue which I am asked to decide, which relates to the precise label to be attached to today's hearing. This goes only to the question of any appeal from my ruling on the issue at paragraph 5(a) of above.
I am very grateful to all the counsel for their efficient and concise written and oral submissions. The issues between them were, as they emerged, relatively straightforward. However, in order for me to deal with them satisfactorily, it is, I am afraid, necessary to set out rather a lot of background material.
2. THE APPLICATION IN RESPECT OF THE 2007 ACT
2.1 The Issue
The Trust's submission is that, because the 2007 Act came into force on 6 April 2008, the Crown cannot rely on any events which took place before that date in support of the charge of corporate manslaughter. In particular, they say that the references in the Case Summary to the appointment of Dr Azeez in 2007, and the upgrading of his rank on 1 April 2008 to that of speciality doctor, cannot form part of the charge under Section 1(1) of the 2007 Act. The Trust would like the Court to order, either that such allegations (and the evidence relating to them) be abandoned; or that instead there should be a prosecution for gross negligence manslaughter.
The relevant parts of the 2007 Act are as follows:
(a) Section 1 sets out the offence:
"The Offence
(1) An organisation to which this section applies is guilty of an offence if the way in which its activities are managed or organised—
(a) causes a person's death, and
(b) amounts to a gross breach of a relevant duty of care owed by the organisation to the deceased.
(2) The organisations to which this section applies are—
(a) a corporation;
(b) a department or other body listed in Schedule 1;
(c) a police force;
(d) a partnership, or a trade union or employers' association, that is an employer.
(3) An organisation is guilty of an offence under this section only if the way in which its activities are managed or organised by its senior management is a substantial element in the breach referred to in subsection (1).
(4) For the purposes of this Act—
(a) "relevant duty of care" has the meaning given by section 2, read with sections 3 to 7;
(b) a breach of a duty of care by an organisation is a "gross" breach if the conduct alleged to amount to a breach of that duty falls far below what can reasonably be expected of the organisation in the circumstances;
(c) "senior management", in relation to an organisation, means the persons who play significant roles in—
(i) the making of decisions about how the whole or a substantial part of its activities are to be managed or organised, or
(ii) the actual managing or organising of the whole or a substantial part of those activities."
(b) Section 20 abolishes the offence of gross negligence manslaughter in so far as it relates to companies:
"20. Abolition of liability of corporations for manslaughter at common law
The common law offence of manslaughter by gross negligence is abolished in its application to corporations, and in any application it has to other organisations to which section 1 applies."
(c) Section 27 sets out various transitional provisions:
"27 Commencement and savings
(1) The preceding provisions of this Act come into force in accordance with provision made by order by the Secretary of State.
(2) An order bringing into force paragraph (d) of section 2(1) is subject to affirmative resolution procedure.
(3) Section 1 does not apply in relation to anything done or omitted before the commencement of that section.
(4) Section 20 does not affect any liability, investigation, legal proceeding or penalty for or in respect of an offence committed wholly or partly before the commencement of that section.
(5) For the purposes of subsection (4) an offence is committed wholly or partly before the commencement of section 20 if any of the conduct or events alleged to constitute the offence occurred before that commencement."
Reference was also made to paragraph 66 of the Explanatory Notes that went with the Act. This made it clear that the 2007 Act was not retrospective, and referred to the common law offence of manslaughter by gross negligence remaining in place. In addition, the guidance issued by the Ministry of Justice in October 2007 also made plain that the reform was not retrospective, but reiterated that it would no longer be possible to bring proceedings for gross negligence manslaughter against a company. It referred to Section 27(4) as dealing with cases that occurred wholly or partly before the new offence came into force, and said that prosecutions in those cases would continue to be possible, even after 6 April, on the basis of the existing common law. The legal guidance issued by the CPS to their prosecutors repeated many of the same points.
The possible difficulties with the operation of the transitional provisions were discussed, albeit briefly, at the end of an article on the 2007 Act by Peter Ferguson, at [2007] S.L.T 251. The thrust of that article was unsurprisingly concerned with the particular consequences for the law in Scotland, although it does provide some useful background.
In my judgment, much the greatest assistance could be found in the judgment of HHJ Gilbart QC (as he then was) in R v Lion Steel Equipment Limited and others 4 May 2012 (unreported). There, count 1 was a charge of corporate manslaughter against Lion Steel following the death of an employee who fell through the roof when repairing a leak. That happened just seven weeks after the 2007 Act came into force. Count 2 was a charge of manslaughter against three named directors. Lion Steel argued that count 1 could not be proceeded with because it was based entirely on the failure of the company to act on warnings which had been given over the previous years (to the effect that the roof was unsafe), all of which predated the coming into force of the 2007 Act.
The learned judge concluded that, before Lion Steel had alerted the Crown to the commencement date point, it was (wrongly) approaching the case on the basis that it could rely on all of the preceding management failures, regardless of when they occurred. The judge ruled that the Crown could not look to evidence of "activities", or whether they involved a "breach" or a "gross breach" of duty, where such activities, breach or gross breach occurred before the date of commencement, "save in so far as they are relevant to the exercise of a duty on and after that date, or whether a breach after that date was a gross breach": see paragraph 27 of the judgment.
The judge did not agree with Lion Steel's submission that the evidence about the pre-commencement events should be excluded altogether. He said that such a submission was "wrong and indeed entirely unrealistic"; and that Section 27 was "not an exercise in amnesia". The judge concluded that count 1 could proceed, provided the jury was only asked to consider events before the commencement date in the context of "(i) informing their decision as to whether the senior management knew of facts as at 6 April 2008 or later, or (ii) whether their knowledge of past events rendered their conduct as at 6 April 2008 or afterwards as amounting to a gross breach of the duty upon them" (paragraph 46 of the judgment).
2.2 Submissions
On behalf of the Trust, Mr Cooper QC submitted that:
(a) The offence of corporate manslaughter does not apply to anything done or omitted before 6 April 2008;
(b) A case which relies upon evidence of acts or omissions prior to 6 April 2008 cannot be brought under the 2007 Act;
(c) The transitional provisions expressly envisage liability for offences committed partly before that date being pursued under the common law, not the 2007 Act; and
(d) The references in the case summary, to the effect that Dr Azeez should not have been appointed as a locum staff grade doctor (16 July 2007), or a substantive staff grade doctor (1 October 2007), or that that he was inappropriately assimilated into the speciality doctor grade (1 April 2008), cannot form part of a charge under Section 1 of the 2007 Act.
On behalf of the Crown, Mr Price QC submitted that:
(a) The indictment makes clear that the offence of which the Trust is accused was committed on 9 October 2012, and the particulars indicate what breaches had occurred, or were occurring , on that date;
(b) Section 27 is concerned only with retrospectivity of criminal liability. It is not concerned with the relevance or admissibility of evidence which is not, and need not, be confined to events occurring on 9 October 2012, or indeed the period after 6 April 2008.
(c) Evidence concerning the appointment of Dr Azeez in 2007/2008 is relevant to the alleged breaches on 9 October 2012 because, for example, that may go to what the Trust knew or ought to have known about his training and qualifications as at 9 October 2012.
2.3 Analysis
In my view, it would not be appropriate either to order the Crown to abandon their reliance on any events in 2007 or early 2008, or to order them instead to prosecute for manslaughter by gross negligence at common law. Subject to the particular caveat that I address in paragraph 20 below, the Crown's case, as currently set out in the case summary, does not offend against the 2007 Act. There are a number of reasons for that conclusion.
Firstly, as a matter of commonsense, it would, I think, be wrong to suggest that any prosecution for corporate manslaughter would have to be abandoned simply because it referred to an event that occurred before 6th April 2008, even if there was no suggestion of any criminal liability until four and a half years after that date. I think that would be contrary to the purpose of the 2007 Act.
Secondly, I consider that what matters in this case is the run up to and the events on 9 October 2012, not events which occurred five years before Mrs Cappuccini was even admitted to hospital. In that respect, it is not dissimilar to the situation where a defendant is charged with offences under the Sexual Offences Act 2003. Whilst that defendant cannot be charged with offences under that Act that were committed before it came into force, that does not preclude the Crown from addressing, in evidence (whether by way of background or bad character or howsoever), any events that might be relevant to the offences with which he is charged, even if those events occurred before the Act came into force.
There can be no doubt that the pre-commencement events in 2007 and early 2008 cannot be activities to found the charge of corporate manslaughter. So for example, Dr Azeez's appointment in 2007 cannot, of itself, be an activity that goes to that charge. But that and other pre-commencement events could be relevant to the charges which are brought under the 2007 Act, in the way outlined by HHJ Gilbart QC in Lion Steel, which I have cited at paragraph 14 above. They do not found the charge, but they may be relevant to it.
It was not my understanding that Mr Price QC disagreed with that analysis. In addition, I note that paragraph 112 of the Case Summary puts the corporate and gross negligence manslaughter allegations in this way:
"Summary
112. In summary the allegations against the three defendants are as follows:
Dr Azeez: that he breached the duty of care he owed Mrs Cappuccini by failing, between 12:35 and 14:10, to re-intubate Mrs Cappuccini when it was apparent to him that she was unable to adequately breathe independently. It is alleged that this was a gross breach of duty because the failure was "a failure of fundamental anaesthetic practice" and a failure to perform "actions that would have been expected of the most junior doctor let alone an anaesthetist".
Dr Cornish: that he breached the duty of care he owed to Mrs Cappuccini by failing, between 13:00 and 14:10, to re-intubate Mrs Cappuccini when it was apparent to him that she was unable to adequately breathe independently. It is alleged that this was a gross breach of duty because the failure was "a failure of fundamental anaesthetic practice" and a failure to perform "actions that would have been expected of the most junior doctor let alone an anaesthetist".
Maidstone and Tonbridge Wells NHS Trust: that the way the Trust's activities were managed or organised by its senior management breached the duty of care it owed to Mrs Cappuccini by:
Appointing Dr Azeez to perform a role he was not qualified to do;
failing to assess and supervise Dr Azeez in accordance with National Guidance;
failing to ensure a process for the identification and recording of the consultant anaesthetist responsible for Mrs Cappucini's care; and failing to comply with the Code of Practice when appointing Dr Cornish as locum consultant
and that these failures amount 'to a gross breach of that duty and that they caused the death of Mrs Cappuccini."
The first bullet point relating to the Trust refers to the appointment of Dr Azeez. For the reasons I have given, that cannot be a constituent element of the charge of corporate manslaughter. Mr Price QC accepted that, saying that this was a mistake, and that the word appointing should be replaced by the word employing. On that basis, I am satisfied that the allegations set out in the Case Summary do not offend against the 2007 Act.
Thirdly, I consider that s.27(3) of the 2007 Act is dealing with single acts or omissions. It is not dealing with what might be called a continuing omission which existed both before and after the relevant commencement date. Assume for this purpose that Dr Azeez should not have been employed by the Trust in October 2007, because his qualifications and training were inadequate. That cannot form a constituent element of the charge under the 2007 Act, for the reasons that I have given. But if he received no subsequent training, and his qualifications remained inadequate, then it may be said that the Trust should not have continued to employ him after 6 April 2008, and should not have been employing him on 9 October 2012. On that analysis, the material omission was on or around 9 October 2012, and the fact that it can be traced back to 2007 is, in my view, immaterial.
I consider that this analysis reflects real life. It also works the other way. Assume that the Trust should not have appointed Dr Azeez in 2007, but that thereafter he did a number of training courses, enhanced his qualifications, and satisfied a rigorous appraisal process, so that by 2012 no criticism could be made of his continuing employment. On that basis, of course, there would be no relevant act or omission by the Trust and no breach of s.1.
Although Mr Cooper QC argued that it was not possible to bring pre-commencement acts or omissions within the scope of the 2007 Act merely by 'relying on corresponding post-commencement failures to reverse them', I do not think that that is what the Crown are doing. As I have said, it seems to me that the Crown's case is based entirely on a consideration of the position as at 9 October 2012. Moreover, I do not think that the Crown's case (or my analysis of it) is particularly radical or novel. Indeed I think it is what HHJ Gilbart QC had in mind when he said, at paragraph 27 of his judgment in Lion Steel, that events prior to commencement can be relevant to the existence of a duty after commencement.
Of course, depending on the evidence, it may be more difficult for the Crown to prove that the Trust should have done something positive about Dr Azeez in 2012 (once he was an employee), than it would be to prove they should not have offered him a post in the first place. But that is an evidential matter, and is far down the line, a matter for the trial itself. It does not go to whether or not the Trust is properly charged with corporate manslaughter.
Finally, I note that at paragraph 39 of his judgment, HHJ Gilbart QC said:
"…I do not accept the common view of the Crown and of LSEL that, in the circumstances of this case, LSEL could be prosecuted at common law for manslaughter where the death only occurred after the common law offence had been abolished. (And it should be noted that section 20 does not just prevent prosecution; it abolishes the offence in its application to corporations). In my judgement nothing in section 27 enables a prosecution to be brought against a company in the circumstances of this case for the common law offence of manslaughter by gross negligence, where the death occurred after the commencement date.
Judge Gilbart QC's observations seem to me to have some force. They obviously run counter to Mr Cooper QC's submission to me. However, since I have decided the application under the 2007 Act on other grounds, it is unnecessary for me to comment further on the judge's approach.
Accordingly, for all those reasons, I do not accede to the Trust's first application.
3. THE PARTICULARS OF THE ALLEGATIONS
3.1 The Issue
The particulars of the corporate manslaughter count I have set out in paragraph 3 above. The Trust complains that this is wholly inadequate for them to understand and prepare for the trial. The Crown on the other hand, refers to the lengthy Case Summary and says no further particulars can or will be given. The Trust's principal complaint is that the relevant senior management (referred to in Section 1(4) of the 2007 Act) have not been identified. There is also a suggestion that the claim should and could be better particularised as to the breaches alleged.
On the identification issue, I notice that Mr Ferguson's article (paragraph 11 above), on which the Trust relied for other purposes, said that the 2007 Act:
"…arises out of widespread concern at the general inability of the criminal law to fix complains with liability for the deaths caused by their actings. Both Scotland and England and Wales apply the identification principle as the only means of ascribing liability to limited companies. Both jurisdictions have found that the successful prosecution of companies other than one man organisations, is therefore virtually impossible."
Cases in which the identification procedure precluded or significantly hampered the prosecution of a company for manslaughter include Transco PLC v HM Advocate [2004] JC 29 and R v HM Coroner for East Kent [1989] 88 Crim App R 10 (the case arising out of the Herald of Free Enterprise disaster).
As to the provision of particulars more generally, I have been referred to the case of R v Chargot Limited [2008] UKHL 73, where the House of Lords said that the overriding test is one of "fair notice". Their lordships made clear that, although fairness required giving notice of the relevant allegations, if they were not ingredients of the offence, it did not necessarily mean that each of them had to be proved.
3.2 The Submissions
On behalf of the Trust, Mr Cooper QC submitted that:
(a) The Crown must prove that the way in which the Trust's activities were managed or organised, by its senior management, was a substantial element in any gross breach of a relevant duty of care;
(b) The Crown had failed to identify either the person or persons responsible for the breaches or the relevant tier of management, or even to show that there was any senior management involvement;
(c) The Crown should provide proper particulars identifying the senior managers or at least the tier of management said to be responsible for any gross breach, and explaining how their conduct is said to have been a substantial element in any such breach.
On behalf of the Crown, Mr Price QC submitted that:
(a) The Case Summary for the PCMH was very detailed and provided proper particulars of the case against the Trust;
(b) The identities of those performing senior management roles were something best known to the Trust itself;
(c) It was not necessary to identify by name the senior management, because here what mattered was the nature of the relevant activity, namely "the employment/assignment/supervision of senior doctors". The jury would be entitled to infer that such an activity would necessarily have been the responsibility of senior Trust management, and if not, that was itself a breach;
(d) One of the purposes of the 2007 Act was to do away with the identification doctrine which had caused the failure of a number of significant prosecutions in the past.
3.3 Analysis
(i) Identification
Taking the issues in stages, I am no doubt that the Crown does not have to name the individuals whom, they say, failed to carry out their management functions properly. That would, I think, be unnecessarily onerous. It would also be artificial, because the names of those involved will be much more likely to be known to the Trust rather than to the Crown. It would be a return to precisely the difficulties of identifying the 'controlling mind' which bedevilled the common law position before the 2007 Act.
I have not found the alternative suggestion, namely that the Crown should at least identify the relevant tier of management where the default occurred, very easy to decide. On the one hand, I recognise that Section 1(3) of the 2007 Act makes the organisation of the relevant activities by senior management an ingredient of the s.1 offence. I also note that the CPS guide to its own prosecutors on the subject of corporate manslaughter seems to suggest that some detail must be provided. Indeed one paragraph says this:
"Neither 'significant' nor 'substantial' are defined but the former is likely to be limited to those whose involvement is influential and will not include those who simply carry out the activity. When considering a prosecution under the Act it is essential to obtain an organogram of the organisation in order to identify the senior management and to use that information to determine whether a substantial element of the breach was at a senior management level."
On the other hand it is not, I think, helpful or an appropriate use of resources, to expect the CPS to delve deep into the labyrinthine management structures of any large NHS Trust like this one. It is not for them to identify precisely who should have been doing what on 9 October 2012. Not only would that be a difficult exercise for the CPS, it might also be impossible to obtain a precise answer: I note that, in this case, there appears to be an argument between those working for the Trust as to who was actually supervising the anaesthetists on the day of Mrs Cappuccini's death. If the Trust is unclear about this aspect of their hierarchy, how can the Crown be expected to know better?
I have to stand back from this debate and try to be realistic. I am sure that the Trust must have some idea of who (in terms of their senior management) may be thought to bear some managerial responsibility for what happened. On the other hand, I do recognise the need for the Crown to do more than simply assume that this was a matter for senior management and that, if somehow it was not, the breach and/or the gross breach prove themselves.
Trying to find a balance between those competing positions, I have come to this conclusion. I think the right answer is to require the Crown to identify the tier of management that it considers to be the lowest level of the senior management team within the Trust that is culpable of this offence. It may well be that, subsequently, it will be demonstrated that the relevant tier of senior management was above the level identified by the Crown. But that will not be a difficulty, because any higher tier will be caught by the Crown's identification of the lowest level of senior management with a responsibility for these events.
The effect of this order will be to allow the Trust to know that the management tiers below that tier identified by the Crown are irrelevant to the Crown's case, and that therefore those particular witnesses would not need to be interviewed, proofs taken etc. It will also require the Crown to particularise the case against that tier of senior management by reference to the ingredients in s.1 of the 2007 Act, so that it is clear how and why the management and organisation of the Trust's activities by that level of senior management caused or was a substantial element in Mrs Cappuccini's death and amounted to a gross breach of its duty of care.
Beyond that, I am not prepared to order, because to do so would, I think, place an impossible burden on the Crown. I also think it would be contrary to the 2007 Act, which was designed to provide a way round the identification issues created by the charging of a company with manslaughter at common law.
(ii) Acts and Omissions
I discussed with leading counsel for the Crown and both defendants the issue of particulars more generally. This was fairly raised by the Trust's application and it was also something which, independently, I considered to be of some importance. I concluded that the Crown should provide particulars of the acts and omissions relied on against the anaesthetists, and the breaches or gross breaches of duty that they allege against the second defendant. I think that is in accordance with the 'fair notice' principle. In the present case, whilst those particulars may largely be taken from the existing Case Summary, they are capable of being stripped down into essentially two lists. First, the acts and omissions on the part of the anaesthetists, which they say caused Mrs Cappuccini's death; and secondly, the management or organisation failures by the Trust which (so it is said) created the circumstances in which the anaesthetists' acts and omissions occurred and amounted to a gross breach of duty by the Trust. This second list is likely to comprise exactly the same information which I have already required the Crown to provide in paragraph 38 above.
The conclusion that those two lists (or something like them) should be prepared by the Crown, is not intended to be a criticism of the current Case Summary. But that document is endeavouring to do rather more than simply identifying the kernel of the case against the defendants, and is an unwieldy instrument for that purpose. Furthermore, as I pointed out to Mr Price QC, the Case Summary contained the usual caveat that the Crown was not bound by its contents, whilst what I have in mind is some form of document by which the Crown is bound, certainly in terms of the proper notice of the allegations on which they rely at trial.
Thus, the provision of particulars in the form that I have in mind would allow both defendants to know the case they have to meet. Perhaps even more importantly, as I also discussed with leading counsel, it will provide a proper agenda for the experts. It will be important at the trial to ensure that the expert evidence is properly controlled. In my view, the best way of ensuring that that will happen is for the experts to meet 'without prejudice', to go through the two lists which I have indicated, identifying what they agree and what they disagree on, and setting out brief reasons for their disagreement. That will then form clear parameters for their oral evidence.
For those reasons, therefore, I consider that particulars of these two parts of its case should be provided by the Crown as soon as possible. I do not make a specific order to that effect because all counsel agreed that it was a good idea, and Mr Price QC indicated that the particulars would be provided. As I have already said, the management information which I have said is required anyway (paragraphs 37 and 38 above) will probably form the second part of the particulars of its case to be provided by the Crown.
4. THE NATURE OF THIS HEARING
4.1 The Issue
The Trust ask that I designate this hearing as a preparatory hearing under Section 29(1) of the Criminal Procedure and Investigations Act 1996 ("the 1996 Act"). The Crown say that I should not. This designation is relevant to the Trust's right of appeal. If it is a preparatory hearing, they can appeal; if it is not, they cannot.
Section 29 of the 1996 Act provides as follows:
"29. Power to order preparatory hearing.
(1) Where it appears to a judge of the Crown Court that an indictment reveals a case of such complexity, [a case of such seriousness] or a case whose trial is likely to be of such length, that substantial benefits are likely to accrue from a hearing—
(a) before [the time when the jury are sworn], and
(b) for any of the purposes mentioned in subsection (2),
he may order that such a hearing (in this Part referred to as a preparatory hearing) shall be held…
(2) The purposes are those of—
(a) identifying issues which are likely to be material to the determinations and findings which are likely to be required during the trial,
(b) if there is to be a jury, assisting their comprehension of those issues and expediting the proceedings before them,
(c) determining an application to which section 45 of the Criminal Justice Act 2003 applies,
(d) assisting the judge's management of the trial,
(e) considering questions as to the severance or joinder of charges,
(3) In a case in which it appears to a judge of the Crown Court that evidence on an indictment reveals a case of fraud of such seriousness or complexity as is mentioned in section 7 of the Criminal Justice Act 1987 (preparatory hearings in cases of serious or complex fraud)—
(a) the judge may make an order for a preparatory hearing under this section only if he is required to do so by subsection (1B) or (1C);
(b) before making an order in pursuance of either of those subsections, he must determine whether to make an order for a preparatory hearing under that section; and
(c) he is not required by either of those subsections to make an order for a preparatory hearing under this section if he determines that an order should be made for a preparatory hearing under that section;
and, in a case in which an order is made for a preparatory hearing under that section, requirements imposed by those subsections apply only if that order ceases to have effect.
(4) An order that a preparatory hearing shall be held may be made—
(a) on the application of the prosecutor,
(b) on the application of the accused or, if there is more than one, any of them, or
(c) of the judge's own motion.
Section 31 of the 1996 Act provides as follows:
"31. The preparatory hearing.
(1) At the preparatory hearing the judge may exercise any of the powers specified in this section.
(2) The judge may adjourn a preparatory hearing from time to time.
(3) He may make a ruling as to—
(a) any question as to the admissibility of evidence;
(b) any other question of law relating to the case.
(c) any question as to the severance or joinder of charges.
(4) He may order the prosecutor—
(a) to give the court and the accused or, if there is more than one, each of them a written statement (a case statement) of the matters falling within subsection (5);
(b) to prepare the prosecution evidence and any explanatory material in such a form as appears to the judge to be likely to aid comprehension by [a jury]and to give it in that form to the court and to the accused or, if there is more than one, to each of them;
(c) to give the court and the accused or, if there is more than one, each of them written notice of documents the truth of the contents of which ought in the prosecutor's view to be admitted and of any other matters which in his view ought to be agreed;
(d) to make any amendments of any case statement given in pursuance of an order under paragraph (a) that appear to the judge to be appropriate, having regard to objections made by the accused or, if there is more than one, by any of them.
(5) The matters referred to in subsection (4)(a) are—
(a) the principal facts of the case for the prosecution;
(b) the witnesses who will speak to those facts;
(c) any exhibits relevant to those facts;
(d) any proposition of law on which the prosecutor proposes to rely;
(e) the consequences in relation to any of the counts in the indictment that appear to the prosecutor to flow from the matters falling within paragraphs (a) to (d)."
I was referred in the written submissions to a number of authorities on this topic, including R v H [2007] 2 AC 270; R v I [2010] 1 WLR 1125; and R v R, M and L [2013] EWCA Crim 708. However, the modern law and practice seems to me to be neatly summarised by the Lord Chief Justice in R v Gary Quillan and others [2015] EWCA Crim 538. In that case, the Lord Chief Justice said this:
"9. This court has given guidance in a number of cases particularly in R v I [2010] 1 WLR 1125, [2010] 1 Cr App R 10 as to the circumstances in which a preparatory hearing under Part III of the 1996 Act should be conducted. In giving the judgment of the court in R v I, the then Vice-President, Hughes LJ, said at paragraph 21:
"Virtually the only reason for directing such a hearing nowadays is if the judge is going to have to give a ruling which ought to be the subject of an interlocutory appeal. Such rulings are few and far between and do not extend to most rulings of law."
10. Whilst that is almost invariably the position, there may be special circumstances where a trial will be very long and very costly and where a ruling on a point of law in relation to the legal basis on which a count in the indictment is founded may determine whether or not a trial is required at all. In such a case such a point of law should be determined well before any trial starts. That is not the same thing as saying that it must be resolved in a preparatory hearing. There is a power in any case under s.40 of the 1996 Act to hold a pre-trial hearing and to decide any question of law relating to the case concerned. This procedure does not involve any of the technicalities which have caused some difficulty in relation to preparatory hearings and there is no interlocutory right of appeal (except where the prosecution treats any ruling as a terminating ruling)."
4.2 The Submissions
On behalf of the Trust, Mr Cooper QC submitted that the test in Sections 29 and 31 had been met because:
(a) This was a serious and complex case in which there will be a lengthy trial;
(b) The decision on the interpretation of the 2007 Act would identify the relevant issues for the benefit of the court and the jury and assist the management of the trial;
(c) The decision on the interpretation of the 2007 Act was also a question of law relating to the case and therefore met the test under Section 31.
On behalf of the Crown, Mr Price QC submitted that the test in Section 29 and 31 had not been met because:
(a) The Crown had been right as to its approach so no relevant issue arose;
(b) The case was serious but not particularly complex and the length of trial of four weeks was not particularly long;
(c) R v I made clear that a preparatory hearing would be beneficial in a few very limited circumstances and R v R stated that it would only arise in the case of "a very high degree of gravity";
(d) That this case in this hearing did not meet that high test.
4.3 Analysis
For a variety of reasons, I am not going to designate this hearing as a preparatory hearing within the meaning of the 1996 Act. First I note that it was not designated as a preparatory hearing by Singh J when he made the order to fix it. That is of course far from determinative, but it is a useful starting point.
Secondly, I have not decided any issue of law. I have simply demonstrated the relatively limited effect which the 2007 Act might have in this case on the presentation of any events prior to 6 April 2008. That goes, as I have said, to the evidence which the Crown may call and the way in which they deploy it. That is not an issue of law. Accordingly, Section 31 seems to me to be irrelevant.
Thirdly, I have not determined any issues, either for myself or the jury. I have simply indicated a way in which the evidence might come out in relation to the events prior to (and indeed after) the commencement date of 6 April 2008. That does not seem to me to be anything other than the typical sort of case management discussion held in advance of any criminal trial. It is a long way from being a preparatory hearing.
As I said at the outset, this is a very sad case. It is obviously serious, because it involves the unexpected death of Mrs Cappuccini. But I do not consider that the case itself is particularly complex. The medical evidence is, I think, no more difficult to assimilate than the medical evidence in, say, a baby shaking case. A trial of four weeks is not, sadly, particularly long, certainly not for a case like this.
In those circumstances, I do not consider that Section 29 applies either.
Thus, for the reasons that I have set out, I do not designate this as a preparatory hearing under the 1996 Act. I do, however, consider that it has been extremely useful.
|
HHJ Simpkiss :
Introduction
The Claimant is the widow of the late Paul Sims who died of a stroke on 7th September 2011. The Claimant brings this claim against the Defendant to recover damages on behalf of the estate under the Law Reform (Miscellaneous Provisions) Act 1934 and in her own right as a dependent under the Fatal Accidents Act 1976.
The Defendant was a general practitioner but is now retired. On 21st November 2002 the Defendant, who was not Mr Sims' regular GP, carried out a medical examination of Mr Sims. Mr Sims had previously been disqualified from driving for 24 months having failed a breath test with 2½ times the permitted level of alcohol. The examination was a pre-condition of the renewal of his driving licence. During that examination the Defendant took his blood pressure which was recorded in the DVLA form DR3 as 182/105. This is regarded as raised, the upper normal limit being 140/90.
The Claimant alleges that the Defendant failed to advise Mr Sims to make an appointment with his regular GP in order to have his blood pressure checked out. The GP experts appointed by each side agree that if such advice was not given then this would have fallen below the necessary standard and the Defendant would be liable for any loss proved to have been caused by it.
The Defendant's case is that although he has no specific recollection of the examination and there is no relevant note of his having given this advice, he would normally have advised the patient in similar circumstances that he may have hypertension and should make an appointment with his GP.
Quantum has been agreed at £40,000 subject to the issues of liability and causation.
The issues
It is agreed between counsel that the following central issues arise:
i) did the Defendant advise Mr Sims on 21st December 2002 to see his GP about the blood pressure reading?
ii) did Dr Fleminger, Mr Sims' regular GP, advise him when he saw him in September 2007 that he should have his blood pressure taken by the practice nurse?
iii) if the court finds that Mr Sims was not given the alleged advice in 2002, would he have attended his GP had been so advised and, if so, would his blood pressure have been elevated?
iv) if he had been advised to take measures to deal with any hypertension – medication and lifestyle changes – would he have taken the medication and made the lifestyle modifications?
v) assuming that Mr Sims had followed any advice to deal with hypertension, would this have prevented his strokes in 2011?
vi) if he had not been advised about any hypertension until September 2007, and not therefore started any remedial action until then, would that have prevented the strokes if he had followed the advice?
vii) there are issues of law about the burden of proving causation which I will deal with when I set out my decision on the law.
The witnesses
For the Claimant I heard evidence from the Claimant and from her sister, Katrina Robinson. The Defendant gave evidence and called Dr Fleminger under a witness summons (a gist statement having been served), although this was for various technical reasons and casts no reflection on him or on the parties.
There were 4 experts: a GP and a neurologist for each side. There was nothing relevant in issue between the GP experts but significant differences between the neurologists.
Liability - the facts
The Claimant was born on 17th April 1950 and married the Claimant on 20th April 1974. Between 1985 and 2004 the Claimant and her husband were in partnership together in a hand/processing/printing photographic business.
On 12th April 2001 Mr Sims was disqualified from driving for 24 months which was reduced to 18 months after attendance at an approved course. The Claimant says that this was out of character and that he felt disappointed with himself. She explained that it had occurred only because of emergency during his daughter's 16th birthday party because he did not wish the Claimant and his daughter to drive to an area of Oxford which had a reputation for public order problems.
In order to obtain the re-instatement of his licence, the Claimant was required to undertake a medical examination. The Defendant was a GP at the time. He is now retired but had been in practice as a GP in Oxford since 1973. He retired in 2009 as senior partner in the same practice. In 1974 he had taken over carrying out DVLA assessments from a colleague in the practice and would also do insurance assessments. His evidence was that he would usually do a session each week, seeing three or four patients each session with 30 minutes allocated to each patient.
On 21st November 2002 the Claimant drove Mr Sims for the independent medical examination by the Defendant although she was not present during it. She appears to have remained in the car while the examination took place. The only direct evidence of what took place at this examination is from the Defendant and he says that he has no specific recollection of it since it occurred 12 years ago. His recollection is based on the contemporary notes which he made at the time and from his "habitual practice". There is secondary evidence from the Claimant and from Ms Robinson who made statements of what they say Mr Sims said to them following the examination.
The Claimant's evidence was that she remembered the appointment with the Defendant clearly because Mr Sims "was quite worried [about it] as his licence was important to him and he was keen to drive again". She drove him to the Defendant's surgery and waited in the car while he went inside for the examination. She said in her witness statement that when he came out he appeared relaxed and his first words to her when he got into the car were "I've got white coat hypertension you know". They had a quick chat about this in the course of which he said he had a high blood pressure reading because of his "fight and flight" anxiety about the appointment (words which she said were Mr Sims interpretation of what he had been told). The witness statement does not mention any further discussion about the examination but the Claimant says that if Mr Sims had been given any advice to do anything about his blood pressure, then she would have expected him to have mentioned it to her.
There is not dispute about the length of the examination (which was at 9.45 am). The Claimant says she waited in the car for about 30 minutes which ties in with the time allocated to each patient by the Defendant.
In cross-examination the Claimant said that Mr Sims had been worried before the examination and had no idea what it would entail. She was asked why, if he had been anxious about getting his licence back, he had not mentioned this first when he returned to the car. She said he had done, at the same time, but although she was sure that he had mentioned white coat hypertension, she was not that clear in her recollection of the conversation. She was asked why she had any recollection of this and said that it was because the death certificate had stated the cause of death as "stroke caused by hypertension" and this led her to recall the conversation in the car.
The Claimant was also asked about a meeting she had on 11th November 2011 with Dr Singh and Dr Reckless (treating clinicians who were involved with the treatment of Mr Sims following his stroke in 2011)) after Mr Sims' death. She wrote a letter to them after the meeting in which she said this: "I don't remember whether I explained my question i.e. that Paul had never been medicated for hypertension despite the fact that he was told that his BP was "high" but probably due to white coat hypertension (Dr MacLennan, November 2002)". Mr Peacock for the Defendant, put to her three possibilities as to what Mr Sims had said to her in the car: (1) that "he had white coat hypertension"; (2) that "he probably had white coat hypertension"; or (3) that "he could have white coat hypertension". He asked her which of these was what Mr Sims had said to her. In particular it was put to her that in the letter to Mr Singh she had used the word "probably". Her explanation was that this was the grammar she used after Mr Sims' death but I am not satisfied that her recollection of exactly what was said in the car can be relied on to answer the question put by Mr Peacock with any degree of reliability.
The Defendant explained that for an examination such as this one, the DVLA supplied a printed form which the examiner needs to complete during the examination. It is not the same as a GP's notes and the contents are not placed on the patient's medical notes. It is for the purpose of the DVLA alone. The blood pressure is recorded at 182/105. It is not the sort of document which invites any comments and there is no room for individual observations or notes by the examiner – nor is this the place for them. It was not suggested that the Defendant should have made any other notes recording any advice that he gave or any thoughts about the examinee's health outside the ambit of the DVLA examination. Following the examination, the final outcome was dependent upon the results of a blood test taken at the time.
The Defendant's witness statement described his normal routine when dealing with this type of examination – which he said was very similar to the examinations he did for MOT or insurers. After completing the questionnaire, he would examine the patient in order to assess his ability to drive. This would include a cognitive assessment.
Having taken the blood pressure, the Defendant said that as it was higher than it should have been, he would have taken it again twice – once with Mr Sims sitting in a chair and then, if it was still raised, a third reading five minutes later with Mr Sims resting on a couch. His note of the blood pressure would be the average of these three readings.
Having established that the readings were not normal, he would have asked the patient about his history of blood pressure readings (there was no evidence of any previous abnormal readings) and family hypertension. He would then have explained that a diagnosis cannot be obtained from blood pressure readings taken on a single occasion and people tend to have a higher reading when attending a medical examination. The Defendant says that he may well have used the expression "white coat hypertension".
Finally, the Defendant was confident that he would not have made a diagnosis of white coat hypertension following blood pressure readings taken at one examination. He would have advised the patient to consult his GP and explained that if he or she did have hypertension this would need treatment.
The Defendant was cross-examined about his "habitual practice" and conceded that it would change over the years and that he would use different words when explaining the consequences of a high reading. It was then put to him that it would be important that a patient with a high blood pressure reading was left in no doubt that he should see his GP. His answer was revealing and firm: "it is inconceivable that I would not have. It is not possible that I made a mistake [about this]. It is unthinkable". "You always say that it has to be checked and I'd have said it not once but twice".
He was also asked whether there might not have been some room for misunderstanding. Here is answer also rung true: "it is very hard to know. Patients don't take in obvious things that are said to them for all sorts of reasons."
The Defendant was also challenged as to why he had not made a note of the advice he gave. In final submissions it was suggested that this might act as a check list or reminder. This does not hold water and overlooks the nature of this examination. This was not an examination by a locum GP (where a note in the medical notes would be essential). This was a "one off" examination with no duty to report directly to the GP and the GP would have no access to the report given to the DVLA and no contact with the examiner.
In the end the evidence of Ms Robinson on this issue did not add very much. She said that she had a good recollection of the DVLA medical assessment in 2002 because she knew how important it was to Mr Sims to regain his driving licence. She rang the Claimant and Mr Sims that evening and in her witness statement she says that Mr Sims said that he had something called "white coat hypertension – that his blood pressure was higher than normal, probably because of anxiety triggered by this important appointment". She then said that the Claimant told her that Mr Sims had said this to her while they were in the car. I find it rather hard to believe that the Claimant relayed where the information had been imparted to her by Mr Sims since it was, at that stage, very unimportant. Ms Robinson clearly felt very strongly that she should support her sister and her apparently detailed recollection of this conversation appears to be her trying a bit too hard to assist her sister's case rather than to give an accurate evidence of what she actually recollects that she was told in the phone call. The first time that she was asked to remember the events of 2002 was in about 2012, 10 years later. In my judgment she is doing no more than guessing what she was told, influenced by conversations with her sister after Mr Sims' death. In the end she accepted that her only memory was a mention of white coat hypertension, which Mr Sims may well have mentioned. Ms Robinson said that he appeared not to have heard the expression before and liked quirky phrases.
I am not satisfied that Ms Robinson is able to give reliable evidence of what exactly Mr Sims said to her other than that white coat hypertension was mentioned as an expression. Her evidence does not therefore assist in determining whether Mr Sims was told that he probably had it, might have it or did not have it.
Mr Sims' medical notes show that he was not a regular attendee at the GP surgery. He attended in November 1998 for a persistent respiratory infection and was prescribed penicillin tablets. In November 2000 he injured himself with a drill and then attended with pain from varicose veins in April 2001. Next, in May 2001 he had bad sore throat and in June 2001 he injured his little finger in a door which was causing him problems with his music and photographic work. He did not return to the surgery until May 2007 when he saw Dr Fleminger complaining of lower back pain radiating to the top of his legs. He was referred to a physiotherapist and for x-ray and then this was followed up in June when he saw Dr Fleminger again, who recorded that the pain in the leg had eased.
In September 2007 Mr Sims saw Dr Fleminger because he was worried about some warts and had been advised by a physiotherapist that he should get them checked out. Photographs were taken and sent for specialist consideration. Dr Fleminger recorded that there was increased swelling in the lower legs. The medical notes for this consultation record "for PN BP rev". Dr Fleminger explained that this note was made by him during the consultation (but before he saw the next patient) and that it meant that he had advised Mr Sims to see the practice nurse to have his blood pressure checked. Mr Sims never did have his blood pressure checked in accordance with this advice and there is no evidence of the level of his blood pressure between the readings taken by the Defendant in 2002 and his next attendance at the surgery on 26th August 2011, when Dr Fleminger recorded it at 207/102. The note of that consultation also records: "says he has white coat hypertension". While Dr Fleminger could not recollect this, nor that there is a reference in a hospital history note dated 5th October 2011 in similar terms, it is probable that Mr Sims told him that he believed he was suffering from white coat hypertension and Dr Fleminger accepted this. There is no similar reference in the notes of the consultation in 2007 – even though he was advised to have his blood pressure checked – and I accept Dr Fleminger's evidence that it would have been noted if he had mentioned white coat hypertension.
It was suggested to Dr Fleminger that the reason for advising a blood pressure reading in 2007 would have been connected with targets set by the Government. He said he was not aware of any but Dr McCarthy (the Claimant's GP expert) referred to targets set in 2004 for taking blood pressure of adult patients and for managing high blood pressure. Dr Fleminger did not give an explanation as to why he suggested the blood pressure be taken, and this may well have been routine.
Liability – decision
The starting point is that all the relevant witnesses mention white coat hypertension. Ms Robinson also said that Mr Sims was aware that his blood pressure readings were high but did not know the figures. The Defendant says that he might well have mentioned white coat hypertension. Dr Fleminger's note in August 2011 also refers. It is therefore probable that the Defendant told Mr Sims that his blood pressure was high and used the expression "white coat hypertension" in some context or other. There is no direct evidence that the Defendant told Mr Sims that he had white coat hypertension (as opposed to the other two options) and I am not satisfied that the evidence of the Claimant or of Ms Robinson supports a case that he was told that this may explain his high blood pressure.
Mr de Bono submits that the court should make a finding that the Defendant told Mr Sims that he had a high blood pressure but did not tell him that he should see his GP to have it checked out. Alternatively, he says that the Defendant did not adequately explain to Mr Sims the importance of having his blood pressure checked and, in particular, the dangers of hypertension and the consequences if it was not treated or managed. The main basis of this submission is that the court should find that it was probable that Mr Sims would have taken the advice and gone to his GP if he had been advised to do so. The fact that he did not leads to the inference that he cannot have been given this advice.
In the context of a medical negligence case, this submission is a bold one. On the one hand the Defendant is adamant that it would be unthinkable for him to find that the blood pressure of a patient was abnormally high and not to give advice to have it checked, and a thoroughly basic error to tell the patient that he had white coat hypertension. On the other it is argued that it is improbable that a patient (and in this case Mr Sims) would ignore a doctor's advice. If, as I find, there is no direct evidence that the advice was not given or that Mr Sims was told that he did have white coat hypertension (with the implication that no further investigation was necessary) the court should be cautious about reaching a conclusion unless there is some evidential basis for doing so.
I do not agree with Mr de Bono's submission that the fact that Mr Sims did not go to his GP following the DVLA examination is strong evidence that the Defendant cannot have advised him to do so. Mr de Bono submitted that the starting point was that most patients will follow a doctor's advice. In many cases that will be an obvious thing to do. If a patient is feeling very unwell and is told to go to bed for a few days the advice coincides with his inclination. If he is advised that he is suffering or might be suffering from cancer (or needs to have this diagnosis eliminated) then most people will follow advice to attend a hospital in order to undergo further tests. There are other examples where a doctor's advice is regularly ignored. Not everyone responds to advice to give up smoking or drinking or to modify their lifestyle if they feel no symptoms and the prospect of serious consequences are not imminent. Advice that a patient might have a high blood pressure might well fall into this category.
Is there any positive evidence leading the court to conclude that Mr Sims would have followed advice to have his blood pressure checked by his GP? When he was told to see his GP by the physiotherapist (to check whether the warts were malignant) he did but most people would have been very concerned until malignancy was ruled out.
I am satisfied that the Defendant did tell Mr Sims that his blood pressure was raised and probably also mentioned the phenomenon known as white coat hypertension. It is most unlikely that he would have made a diagnosis of white coat hypertension or that he told Mr Sims that the raised blood pressure was due to this condition as he well understood that this was not medically possible on one visit. I am satisfied that he told Mr Sims that the raised blood pressure might be explained by white coat hypertension (with an explanation as to what that amounted to) but that he would need to see his GP to get it checked out.
As Mr Peacock put it, there are all sorts of reasons why a patient might ignore advice when there are no symptoms and no apparent imminent risk, particularly when the diagnosis of hypertension would probably lead to a need for a lifestyle change. There is a major difference between being told on the one hand that if a certain step is not taken there is a high risk of serious injury or death in a few months or even a year on the one hand, and on the other, that there is an increased risk of something happening in 10 or 20 years' time. Mr Peacock relied on the fact that Mr Sims did not follow Dr Fleminger's instruction to attend the practice nurse to have his blood pressure taken in September 2007. I agree with Mr de Bono that this is not quite the same thing as being told that there are raised levels which need to be checked out, but it does provide some evidence that Mr Sims was not assiduous in complying with all advice given to him by a doctor.
I therefore find that the Defendant did advise Mr Sims that his blood pressure was higher than it should have been and that he should attend his GP in order to have it checked out.
The pleaded case against the Defendant particularises 4 items of negligence:
i) failing to advise Mr Sims that his blood pressure was high and needed to be re-checked;
ii) failing to inform Mr Sims' GP of the raised blood pressure;
iii) causing him to believe that the raised blood pressure was probably a result of anxiety or "white coat hypertension";
iv) failing to make a note that he had advised Mr Sims to seek further medical attention.
It follows from my findings of fact that (i) and (ii) have not been made out on the facts. Nor do I accept that the Defendant gave Mr Sims that the raised blood pressure was probably the result of anxiety or white coat hypertension and that it was not therefore a matter of concern. There is nothing wrong, in my judgment, with a doctor trying to re-assure a patient that there may well be a benign explanation provided he also makes it clear that further investigation is required. The Defendant fulfilled that duty. In my judgment there was no duty upon the Defendant or any other GP in these circumstances to inform the patient's GP, that was not within the remit of this examination and it was quite sufficient to inform the patient that he should consult his GP. I have also dealt with point (iv) earlier in the this judgment. It was not a breach of duty to fail to make a note that advice to attend the GP had been given, the note would have served no purpose and no loss would flow from this if it was a breach.
The liability experts Drs. Gavin Young and Nicholas McCarthy, both of whom were GPs, made a joint statement in February 2015. In it they agreed that if the Defendant's account of the advice he would have given Mr Sims in 2001 was correct, then this would be supported by a responsible body of GPs. The only point upon which they differed was that Dr McCarthy considered that there was an overall obligation "to ensure that Mr Sims was aware of the requirement to recheck the blood pressure and also aware of the potential risks". This was not part of the pleaded case, which disposes of this point. In any case I do not consider that it gets the Claimant anywhere in this case.
The statement was not explained and Dr McCarthy was not cross-examined about it. It was not put to Dr Young. As it stands, it could cover a wide range of duties. In some cases it would be sufficient to inform the patient that he had a high blood pressure and in other cases a much more detailed explanation would be required. It very much depends on the patient and the nature of the matter which he needs to be warned about. In this case Mr Sims was highly intelligent and able. His sister-in-law made it quite plain in her evidence that she well understood high blood pressure issues. She said that in the conversation she had with Mr Sims he had understood that his blood pressure was high but thought it was "benign" because of the reference to "white coat hypertension".
In my judgment, the Defendant carried out his duties by telling Mr Sims that he had a raised blood pressure and that he should have it checked out by his GP to establish if he had true hypertension. The Defendant's account of his normal practice, which I accept he would have applied in this case (even if the precise wording cannot be established), was to explain the potential significance of hypertension and that if the GP found that it was still raised he would need treatment. I also accept the Defendant's evidence that there was nothing to suggest that Mr Sims did not understand what he was being told to do and why it was necessary. It has not been proved that this was an unreasonable approach by the Defendant in this case.
As a result of the above findings, the Claimant's claim fails. I will nevertheless set out my judgment on a number of the causation issues – largely because I have heard expert evidence in relation to them.
Causation
Factual causation does not now arise. Mr Sims was given the advice to attend his GP in order to have his blood pressure checked and did not do so.
The issues which do arise are whether his blood pressure would have been raised if he had attended his GP in 2002, would he have followed advice if he had been prescribed treatment and lifestyle changes in 2002, and would his stroke in 2011 have been prevented. There is a further issue of contributory negligence and the effect of treatment from 2007 onwards.
Counsel disagreed about the legal test of medical causation to be applied (i.e. the degree of proof required in order to show that a delay in treating hypertension caused the strokes and death or made them more severe than they otherwise might have been). In my judgment the claimant doesn't get into medical causation until she has proved that Mr Sims' blood pressure would have been raised in 2002 if it had been checked by his GP and that a diagnosis of hypertension would probably have been made. Unless he had hypertension he would not have received any treatment and the issues of whether the delay in treatment does not arise. Similarly, with the issue of whether he would have agreed to the treatment which would have been recommended and the lifestyle changes. All these matters are, in my judgment, subject to the usual standard of proof and the claimant must satisfy them on the standard of probability. It is only once that hurdle has been surmounted that it is necessary to decide whether, medically, earlier treatment would have improved Mr Sims' position and it is this issue which gives rise to the legal argument.
I can dispose of the first two issues shortly.
Hypertension in 2002
Since Mr Sims did not see his GP until 2007 (and his blood pressure was not in fact taken until 2011) there is no direct evidence of his blood pressure in 2002 save for the readings taken by the Defendant during that one examination. If he had gone to see his GP then there are a number of realistic possibilities: (a) the readings would have been normal with Mr Sims blood pressure having returned to normal once the anxiety had reduced; (b) it would have been raised but the necessary further investigations did not lead to a diagnosis of hypertension; or (c) raised blood pressure leading to a diagnosis of hypertension. I am satisfied that if there had been a diagnosis of hypertension then any competent GP would have given advice about lifestyle changes and treatment. Various steps would have been taken to manage Mr Sims' blood pressure including advice about giving up smoking, reducing alcohol consumption and about diet. He would also have been given treatment to reduce the blood pressure to acceptable levels.
Dr McCarthy (the Claimant's GP expert) gave evidence that Mr Sims' blood pressure would have been raised in 2002 if he had seen his GP. Dr Young said that it was impossible for him to say whether or not it would have been raised. I prefer Dr Young's evidence because it makes no sense for any expert to say what the blood pressure readings would have been. There is no evidence or learning from which one could extrapolate a probability that if Mr Sims' blood pressure was at the level measured in August 2011 it must have been raised in 2002. Dr McCarthy did not consider the possibility of white coat hypertension in reaching his conclusion (even though there are articles suggesting that up to 10% of raised blood pressure readings are caused by it). The neurological experts were unable to say one way or the other whether the blood pressure would have been raised in 2002 as a result of hypertension. In the end Dr McCarthy was driven to stating that "it was his experience" that the pressure readings would not reduce and "hunch" but admitted that there was no scientific basis for his view. I am unable to find that the Claimant has proved that the blood pressure reading would have been raised had Mr Sims followed up the advice to visit his GP or that a diagnosis of hypertension would have followed. I appreciate that it is, superficially, neat to say with the benefit of hindsight that he must have had hypertension in 2002, but this is not sufficient to prove the case. Furthermore, the neurologists were not able to extrapolate back to 2002 and draw any conclusions.
Co-operation with any treatment plan
Mr Peacock submitted that there was evidence that Mr Sims would have ignored any advice given to him in 2002 in relation to the management of hypertension. This was based on a number of matters. His failure to attend the surgery in 2007 to have his blood pressure checked was, as I have already said, in a different context and not of much weight. Next, that he had not given up either smoking or alcohol following the first of his strokes in August 2011. He was given advice at this stage about smoking and the medical notes said that he was trying to give up smoking – although the Claimant accepts that he had not yet succeeded. She disputed whether he still drank alcohol.
These were early days after the stroke. Mr Sims had been a heavy drinker and smoker. It is not easy to change your lifestyle overnight and I can't draw any real inferences from this.
Mr Peacock also relied on references to a meeting after Mr Sims' death from which it can be inferred that he has been told by the Claimant that Mr Sims was reluctant to see doctors or to take their advice. She disputes this and Dr Singh (who wrote the letter) was not called to give evidence. In these circumstances I cannot find that the statements have been proved to have been made by the Claimant. Although Mr Sims did not attend the GP surgery very often, there is nothing in his medical records to suggest that he was averse to consulting his GP if he had concerns or that he wouldn't take advice. It would have been difficult for him to change his lifestyle, but if he had been diagnosed with hypertension in 2002 he would have been under the management of his GP. This would have meant regular blood pressure checks and treatment. Unless I were find that he would have ignored his GP's advice completely and had refused to attend for check-ups, it is likely that he would, gradually, have complied with the advice and accepted the treatment – because that would lead to an improvement in his blood pressure readings and a tangible result.
Having found that Mr Sims ignored the Defendant's advice in 2002, it might be said that this is consistent with Mr Peacock's submission that he would have ignored other advice. In the event, this is only of relevance if my finding on liability is wrong, in which case the Defendant would not be able to make this point. There is however a significant difference between being given advice by a doctor in the circumstances which arose in 2002 and being given a diagnosis and advice by one's regular GP following a proper investigation of the condition.
Medical causation
Mr de Bono submitted that there are two routes to proving causation as a result of a breach of duty in this type of case:
i) "but for" causation if the court finds that " but for" the breach of duty an injury would probably have been avoided.
ii) Modified "material contribution" causation, where, unless an injury would probably have occurred in any event, causation will be established were it probable that the breach has made a material (i.e. more than negligible) contribution. In appropriate circumstances a material contribution can be inferred from proof of a material increase in risk.
Mr Peacock submitted that this is not a case where it is sufficient for the Claimant to prove that the failure to refer was a "material contribution" towards his injuries. He has to prove, on a balance of probabilities, that the injuries (or some of them) would have been avoided. He referred to Bailey v MOD [2008] EWCA Civ 883 in which the court explained the circumstances in which the "but for" test could be relaxed. One exception arises in the mesothelioma cases, where the Claimant was exposed to the asbestos dust the exposure while working for a particular employer the injury would not have occurred. Cumulative cause cases are similar. In McGhee v The National Coal Board [1973] 1 WLR 1 the House of Lords departed from the "but for" test because medical opinion was not, at that stage, able to say how the dermatitis had begun and therefore it was not possible to prove a causal connection on the expert evidence because there had been little medical research into the issue. The court therefore took a broad view of causation.
Waller LJ (which whom Sedley and Smith LJJ agreed) summarised the position as follows at paragraph 46:
"In my view one cannot draw a distinction between medical negligence cases and others. I would summarise the position in relation to cumulative cases as follows. If the evidence demonstrates on a balance of probabilities that the injury would have occurred as a result of the non-tortious cause or causes in any event, the claimant will have failed to establish that the tortious cause contributed. Hotson exemplifies such a situation. If the evidence demonstrates that "but for" the contribution of the tortious cause the injury would probably not have occurred, the claimant will (obviously) have discharged the burden. In a case where medical science cannot establish the probability that "but for" the act of negligence the injury would not have happened but can establish that the contribution of the negligent cause was more than negligible, the "but for" test is modified, and the claimant can succeed".
Mr de Bono submitted that the exceptions of "modified "material contribution causation" as set out in Bonnington v Wardlow ( [1956] AC 618) and Bailey v MOD applied. Bonnington v Wardlow was a claim by a claimant who had developed pneumoconiosis as a result of inhalation of silica dust in the course of work. The dust came from two sources – from working on hammers and on grinders. It was impossible to prove that the work on the grinders had probably caused the pneumoconiosis but the House of Lords decided that it was possible to infer that this work had made a more than negligible contribution towards it.
In Bonnington, the cause of the lung disease was the build-up of silica dust in the lining of the claimant's lungs. Although it was not disputed that this occurred while the claimant was employed by the defendant, the breach of duty related to the use of the grinders and it was not possible to prove which source of silica dust caused the disease. The most helpful passage is in Lord Keith of Avonholme's judgment (p.626):
"Small though the contribution of pollution may be for which the defenders are to blame, it was continuous over a long period. In cumulo it must have been substantial, though it might remain small in proportion. It was the atmosphere inhaled by the pursuer that caused his illness and it is impossible, in my opinion, to resolve the components of that atmosphere into particles caused by the fault of the defenders and the particles not caused by the fault of the defenders, as if they were separate and independent factors in this illness. Prima facie the particles inhaled are acting cumulatively, and I think the natural inference is that had it not been for the cumulative effect the pursuer would not have developed pneumoconiosis when he did and might not have developed pneumoconiosis at all".
Mr Peacock referred to the dictum of Lord Brown in Sienkiewicz v Greif (UK) Ltd [2011] AC 229 at 294H:
"187 There is a rough justice about the law of personal injury liability as a whole. …..
Save only for mesothelioma cases, claimants should henceforth expect little flexibility from the courts in their approach to causation. Since Fairchild and Barker there has been much academic focus on a supposedly critical distinction between so-called "single agent" and "multiple agent" cases, the suggestion being that the former more readily lend themselves to special rules of causation than the latter. For my part I have difficulty even in recognising the distinction between these categories, at any rate in some cases. But I have greater difficulty still in accepting that the courts should now, whether on this or any other basis, be thinking of creating any further special rules regarding the principles governing compensation for personal injury. The same logic which requires that the claims of those claimants succeed to mind requires also that the courts should in future be wary indeed before adding yet further anomalies in an area of law which benefits perhaps above all from clarity, consistency and certainty in its application".
In MOD v AB [2010] EWCA Civ Smith LJ explained that the exception in "divisible injury" cases such as Bonnington and Bailey would not arise, for example, in cancer cases. This was because the exposure to the causative agent did not make the condition worse because one either got cancer or did not. In divisible cases an increased dose worsens the disease – the tortious act did not increase the risk of harm but the actual harm and although it was not possible to say how great was the contribution to this which agent had made, each was material.
Mr de Bono submits that a stroke is an "indivisible injury" but that the "material contribution" causation test nevertheless applies. Mr de Bono's argument is that the principle established from Bonnington applies in this case because:
i) It is not possible to say that the stroke would have happened anyway, or that it would have occurred at some other time or that it would not have been as severe or led to Mr Sims' death;
ii) All the literature suggests that there is a causal/close relationship between high blood pressure and the stroke; the untreated hypertension was the single most significant "agent" in the aetiology of Mr Sims' stroke and it contributed to the development of the strokes even if it is not possible to identify the extent of the contribution;
iii) It is not a bar to causation that other factors were at play;
Mr de Bono said that the cases of Bonnington, Boustead v North West Strategic Health Authority [2008] LS Law Medical 471, and Telles v South West Strategic Health Authority [2008] EWHC 292 were all examples of cases where the exception was applied. The first two cases being indivisible injury cases and the third a divisible injury case where it was impossible to apportion damages between the non-negligent and negligent causative agents.
Bailey was a case where medical opinion could not establish, on a balance of probability, which of two causes was the dominant one.
In my judgment, none of these cases falls within the exceptions contemplated by Smith LJ in MOD v AB. The more recent decisions show that the courts are tending towards giving a narrow interpretation of the principles set out in Fairchild and the mesothelioma cases. As Smith LJ said, there were considerable public policy reasons for those decisions. I agree with the dicta by her and by Lord Brown that the exceptions should be extended sparingly. This exception applies where there are two different agents causing the disease (as opposed to causing an increase in the risk of it occurring) but it is not possible for medical science to apportion the loss between the two causes. If it had been, then an apportionment would have been made.
If it is proved, on a balance of probabilities, that Mr Sims would not have suffered a stroke if he had been treated from 2002 then there isn't a problem. Medical causation has been satisfied. There was no disagreement between counsel that if it is proved that the breach has at least doubled the risk of the stroke then the Claimant will have proved that it was probably the cause of the injury (Novartis Grimsby Ltd v Cookson [2007] EWCA Civ 1261).
I now turn to the expert evidence.
Dr Venables and Dr Cockerell disagreed whether the cause of the stroke was "haemorrhagic" or "ischaemic". Dr Cockerell explained that a haemorrhagic stroke arose when the small arteries and arterioles in the middle of the brain (which have a different wall composition to the larger arteries) got thinner and bled into the brain. He said that it was thought that these small arteries and arterioles were particularly susceptible to diabetes and hypertension. His view was that the most likely cause of Mr Sims' stroke was a ruptured microaneurysm. This type of stroke, he said, had a very high association with high blood pressure.
Dr Venables' opinion in his report was that elevated blood pressure was a highly significant factor for both ischaemic and haemorrhagic strokes. He thought that, on balance, Mr Sims suffered from an ischaemic stroke and not a rupture of a Charcot Bouchard aneurysm. The clinicians described Mr Sims' second stroke as "haemorrhagic" but referred to the MRI scan taken after the first stroke, which was reported on by Professor Byrne as showing an infarct with some haemorrhage. He agreed with Professor Byrne's conclusions having seen the scan and said that it was inconsistent with a Charcot Bouchard aneurysm. If the first stroke showed an infarct with a mild degree of asymptomatic haemorrhage transformation, then the second stroke would most likely be due to a further catastrophic haemorrhage transformation. In other words – a thromboembolic stroke. I prefer Dr Venables' view but as explained below, it is not in fact necessary to decide which type of stroke Mr Sims' suffered.
Mr Peacock conceded that there was a significant chance that Mr Sims would not have suffered a stroke if, having been diagnosed with hypertension in 2003 he had been treated. His case was that the risk of a stroke was not reduced by 50% or more, in which case "but for" causation is not proved.
Mr de Bono submitted that Dr Venables had agreed in the joint statement and in his oral evidence that hypertension doubles the risk of a stroke. He then constructed an argument that this satisfied the test of causation set out by Lord Phillips in Sienkiewicz. He referred to Lord Phillips' comments on the Novatis case where Smith LJ had said that the "but for" test was satisfied "in terms of risk, if occupational exposure more than doubles the risk due to smoking, it must, as a matter of logic, be probable that the disease was caused by the former".
With respect, this is an attempt to elide 2 different situations. The comparison in Novartis was between exposure to smoking and non-exposure. Thus the exposure to smoking more than doubled the risk. In the present case, the comparison should be between the risk of untreated hypertension and treated hypertension. Therefore I do not agree with Mr de Bono's submission that there is evidence here of an increase in risk which exceeds 50%. What he is referring to is the increase in risk between someone not suffering from hypertension and someone who does suffer from it. That in my judgment is irrelevant because the issue of causation simply doesn't arise unless it is proved that Mr Sims suffered from hypertension in 2003. It should be the increase in risk as a result of untreated hypertension that is the relevant factor here.
In their joint statement, the experts agreed ("broadly") that it is reasonable at the age of 53 (Mr Sims' age in 2003) there would be an 11% risk of stroke based on his risk factors. Adequate control of his blood pressure would have reduced this risk by 38% too 7%. Dr Cockerell did not agree that this showed that this led to the conclusion that relative risk reduction was reduced by less than 50%. His view was that the stroke would have been prevented on a balance of probabilities. He was challenged on this view in cross-examination and was quite unable to come up with any logical explanation for this view. He also agreed that his view may have been "mathematically wrong". He argued that the 38% figure was a minimum, but this holds no water as it is clear that the figure is a mean one.
Dr Cockerell also sought to resile from his agreement of the 38% reduction of risk with Dr Venables by stating in court that his agreement was "qualified". He had not mentioned anything in the joint statement which appears to be unequivocal. He agreed that there were no papers which concluded that a reduction in risk of 50% would be achieved.
Dr Cockerell had not looked at the papers which Dr Venables referred to until they were produced by the latter for the trial. He based his opinion on his experience and went to the literature just before the meeting with Dr Venables. This is vital for a clinician, but not sufficient for a lawyer unless there is some statistical evidence from his own experience.
Dr Cockerell also said that he had been comparing the risks of untreated hypertension as against someone who did not suffer from hypertension at all and agreed that, for the purpose of the exercise of establishing causation in this case, he had been wrong.
Dr Cockerell's opinion that there was a 50% reduction in the risk also drew some support from a paper by Daniel Woo and others. This was a paper produced by Dr Venables which dates from 2004. It was a study of 549 cases of haemorrhagic stroke and assessed the increased risk of untreated hypertension. The paper estimated that between 17 and 28% of patients of haemorrhagic stroke amongst hypertension sufferers would have avoided stroke if they had been treated. The paper did not examine the effectiveness of blood pressure reduction treatment but stated "one assumes that greater the control of blood pressure would lead to a greater reduction in risk of stroke".
The Woo paper cannot be regarded as definitive evidence of the percentage reduction in risk for two reasons. Firstly, it only dealt with cases of stroke which arose within five years and secondly, it dealt the cases of diagnosed hypertension but not blood pressure measurements. It does not support a case that there is a 50% reduction in risk where there is a haemorrhagic stroke.
Dr Venables' reliance on the papers as showing a mean reduction of 38% was also challenged. He cited R Collins and S MacMahon dating from 1994 about the effects of blood pressure on cardiovascular disease. This paper was an analysis other papers and not original research, although this does not affect it's legitimacy. The study looked at the relationship between blood pressure reduction and the risk of stroke. The study suggested that there was a 5mmHg lowering of blood pressure was associated with a one third reduction in risk whereas a 10mmHg reduction would give a 50% reduction in risk. This and other points led Dr Venables to agree that it would have been more accurate for him to have concluded that a reduction of diastolic blood pressure by a mean 5mm would reduce the risk of stroke by 5% over five years.
I find that there is no proper basis for finding that it is probable that the stroke was not caused by the failure to treat the hypertension but, equally, it is not possible to find that it was probable that it was caused by the failure to treat.
In these circumstances, Mr de Bono submits that this is a case where there are multiple potential causes of the stroke but it is not possible to say more than that the breach probably contributed to it, along with several other factors. This is not, however, a case like McGhee where the longer the claimant was exposed to the brick dust the greater the risk of dermatitis, so that, as a matter of common sense, one can infer that exposure to the bad dust probably contributed, cumulatively, to the cause of the dermatitis.
In Wilsher v Essex Area Health Authority [1988] 1 AC 1074 the House of Lords approved Browne-Wilkinson VC's judgment in the Court of Appeal where he says:
"To apply the principle of McGhee v National Coal Board [1973] 1 WLR 1 to the present case would constitute an extension of that principle. In the McGhee case there was no doubt that the pursuer's dermatitis was physically caused by brick dust: the only question was whether the continued presence of such brick dust on the pursuer's skin after the time when he should have been provided with a shower caused or materially contributed to the dermatitis which he contracted. There was only one possible agent which could have caused the dermatitis, viz, brick dust and there was no doubt that the dermatitis from this he suffered was caused by that brick dust".
He then distinguished Wilsher by stating that the excess of oxygen (caused by the breach of duty) was only one of the agents which could have caused the injury "but no-one can tell in this case whether excess oxygen did or did not cause or contribute to the RLF suffered by the plaintiff".
You can't say in this case that the increased blood pressure contributed to the injury, the best that can be said is that it increased the risk of the injury occurring. That is very different from McGhee and Bonnington. AB v MOD is the current state of the law and it would be extending the principle which I am not prepared to make in this type of case for the reasons given earlier.
I therefore conclude that "but for" causation would not have been established even if the Claimant had surmounted the other difficulties in relation to which I have found against her.
Contributory negligence/break in the chain of causation
I will deal with this very briefly, since it is academic in the light of my finding that the Defendant is not in breach of duty.
Mr Peacock submits that the failure of Mr Sims to follow up his GP's advice to have his blood pressure checked in 2007 was negligent and broke the chain of causation. It would be difficult to apportion responsibility in the academic circumstances which arise, because I have found that Mr Sims ignored advice in stronger circumstances in 2002 when he had the evidence of a high blood pressure reading and the risks of stroke in his mind.
Clearly, the omission to attend the practice nurse for his blood pressure to be checked was negligent, particularly as Mr Sims knew that his blood pressure had been high in 2002 and might have been concerned to see whether it had remained high. He is not a professional medical practitioner and the premise under which this issue become relevant is that he was not told to go to see his GP in 2002 to have it checked. This is far removed from the situation that arises in cases such as Webb v Barclays Bank plc [2002] PIQR 61.
I would have had no hesitation in finding that there had not been a break in the chain of causation.
As Mr Peacock submits, the neurological experts agree that the causative effect of his omission is the same as the failure to visit his GP in 2007.
There would have been a balance to be struck in assessing the amount of any contributory negligence, between the respective blameworthiness and causative potency of the Defendant and Mr Sims as a medical practitioner who had made a basic error (in the circumstances under which this would arise) the Defendant would be much more to blame than Mr Sims. The causative potency is neutral because of the expert causation advice, although the condition would have been identified and treated earlier which is in medicine always preferable.
I would have made an apportionment by reducing any damages recoverable through Mr Sims by 25%.
Conclusion
I find that the Defendant was not in breach of his duty of care to Mr Sims and therefore that the claim is dismissed.
Had this not been the case, then I would have found that factual and medical causation have not been proved and that the "but for" test was the appropriate test to apply.
If I had found the Defendant liable, then I would have reduced any damages claimed by 25% on account of contributory negligence on the part of Mr Sims in failing to attend in 2007 to have his blood pressure checked.
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Mr Justice Hickinbottom :
Introduction
The Claimant was born on 20 December 1944. From leaving school in 1959 to the date of his early retirement in 1996, he had a wide variety of jobs, including work as an apprentice painter and decorator (1959-62), and work for the Defendant Council's predecessor, Cardiff Corporation, as a playing fields groundsman (1963-65), a boilerman at the Schools Meals Department, Clydesmuir Road, Tremorfa (which cooked and delivered meals for children at schools which did not have a kitchen) (1966-68) and a school caretaker (1971-73). As a boilerman at the School Meals Department, for about 18 months, he spent a good deal of time in a boilerhouse, which housed boilers with asbestos lagging in very poor condition which gave rise to asbestos dust. That was the only period during which the Claimant was exposed to asbestos. He retired at the age of 52, due to ill-health caused by kidney stones.
The Claimant now suffers from a number of medical conditions, including (i) a condition of the pleura caused by asbestos, and (ii) chronic obstructive pulmonary disease ("COPD") caused by smoking. As a result of those two conditions, he has an overall cardiorespiratory disability of about 50%, of which each condition has contributed about half.
In this action, the Claimant claims damages from the Defendant ("the Council") for the respiratory injuries he has suffered as a result of exposure to asbestos during the course of his employment which was itself a result of the Council's negligence and breach of statutory duty.
The Council accepts that it is not in a position to deny the Claimant's alleged asbestos exposure, nor does it dispute that such exposure was in breach of duty.
Proceedings were issued on 18 August 2014. In paragraph 5 of its Defence, the Council contends that the claim is statute-barred by operation of the Limitation Act 1980 because, prior to 18 August 2011, the Claimant knew that he suffered from a significant injury that was likely to have been caused as a consequence of asbestos exposure whilst he was employed by the Council. In paragraph 1 of his Reply, the Claimant expressly denied that he had acquired the relevant knowledge prior to 18 August 2011, and thus denied that the claim was statute-barred. He indicated that, if the date of knowledge was prior, he did not intend to apply for an extension of time pursuant to section 33 of the Limitation Act 1980. Although Mr Phillips for the Claimant before me attempted to pursue a section 33 application in the alternative, it had not been pleaded, was not raised at all until Mr Phillips' skeleton argument was served a few days before the hearing and, understandably, the Council had not lodged evidence in relation to that issue nor was Mr Turton for the Council prepared to argue such an application. I accordingly refused to extend the scope of this hearing.
The only issue before me is therefore whether the Claimant had the requisite knowledge only after August 2011.
At the trial, Matthew Phillips appeared for the Claimant, and Philip Turton for the Defendant. The Claimant gave evidence. His was the only live evidence; but I also had the benefit of written expert evidence from two expert consultant physicians, Dr D G Sinclair and Dr John Moore-Gillon, instructed on behalf of the Claimant and the Defendant respectively.
The Law
Section 11 of the Limitation Act 1980 applies a special time limit for the commencement of any action in respect of personal injuries, such as this. It provides, so far as relevant to this claim:
"(3) An action to which this section applies shall not be brought after the expiry of the period applicable in accordance with sub-section (4)….
(4) ... [T]he period applicable is three years from –
(a) the date on which the cause of action accrued; or
(b) the date of knowledge (if later) of the person injured."
Section 14 provides, again so far as relevant to this claim:
"(1) … [I]n section 11… references to a person's date of knowledge are references to the date in which he first had knowledge of the following facts –
(a) that the injury in question was significant; and
(b) that the injury was attributable in whole or in part to the act or omission which is alleged to constitute negligence… or breach of duty; and
(c) the identity of the defendant; …
(2) For the purposes of this section an injury is significant if the person whose date of knowledge is in question would reasonably have considered it sufficiently serious to justify his instituting proceedings for damages against a defendant who did not dispute liability and was able to satisfy a judgment."
In relation to these provisions, the following propositions were common ground before me, and are uncontroversial.
i) The effect of section 11(4)(a) and (b) is that, where proceedings are not commenced within three years of the cause of action arising, generally the claimant has the burden of proving that he did not have the requisite knowledge until a date within the three years preceding the date of issue of proceedings (Nash v Eli Lilly & Co [1993] 1 WLR 782 at page 793H, paragraph 6).
ii) "Knowledge" in the context of section 14 does not mean know for certain: it means know with sufficient confidence reasonably to justify embarking upon steps preliminary to the institution of proceedings against those whose act or omission has caused the significant injury concerned, such as submitting a claim to the proposed defendant, taking legal and other advice and collecting evidence (Halford v Brookes [1991] 1 WLR 428 at page 443, approved in Dobbie v Medway Health Authority [1994] 1 WLR 1234 at page 1240B; and Nash at page 793C-D, paragraph 3). Of course, even where a particular individual has that level of confidence, he may have perfectly good reasons for not pursuing a claim and may quite reasonably decide not take steps to do so (see A v Hoare [2008] UKHL 6; [2008] 2 WLR 311 at [38] per Lord Hoffmann); but whether or not steps are in fact taken does not affect the date of knowledge.
iii) The test for "significance" of injury is one of quantum alone, and does not invite consideration of the cause or nature of the injury (Dobbie at page 1241H). But, for an injury to be "significant" for these purposes, the quantum level is low: it has been said that the test comes close to the test of seriousness of an injury for which the courts could properly award damages and thus in respect of which a cause of action in negligence accrues (Cartledge v E Jopling & Sons Limited [1963] AC 758 at 781; Rothwell v Chemical & Insulating Company Limited [2006] EWCA Civ 27; [2006] ICR 1458 at [21]). That test is essentially an illustration of the principle "de minimis non curat lex". Thus, where an injury is any more than very minor, it will generally satisfy the test for "significance" in section 14(2).
iv) However, the House of Lords in Rothwell held that, where a breach of duty has given rise to physiological changes but the condition is symptomless, and does not presage or threaten a more serious condition, that will not satisfy the test for bringing a negligence action; nor will it, even if known, be sufficient to satisfy the knowledge test in section 14(2). The opinions were handed down in Rothwell on 26 January 2006. Prior to that, it was at least arguable that an asymptomatic condition which does not presage or threaten a more serious condition could nevertheless found a suit in negligence.
Asbestos-Related Conditions
It is well-established that exposure to asbestos dust or fibres carries with it the risk of a variety of medical conditions including, at their most serious, lung cancer and mesothelioma. Notably, for the purposes of this claim, such exposure may result in physiological changes to the pleura, a lubricated membrane which facilitates movement of the lung. Whilst being morphologically distinct, the pleura envelops the lungs and lines the walls of the chest cavity. It comprises two distinct layers of an essentially single membrane: the parietal pleura lines the inside of the rib cage, whilst the visceral pleura covers the lungs.
The way in which asbestos fibres arrive at the pleura (and, particularly, how they reach the parietal pleura) is not fully understood; but it is well-recognised that exposure to asbestos may cause pleural abnormalities. Two such diseases are described in the chapter on "Asbestos-related Diseases" contributed by Dr Robin Rudd, recognised as a particular expert in the area, in the textbook "Respiratory Medicine" (3rd edition) (2003), to which I was referred.
"Pleural plaques" are defined thus:
"Plaques are circumscribed areas of thickening of the parietal pleura of the chest wall, mediastinium and diaphragm. Occasionally they affect the visceral pleura…".
Plaques (it is said) are composed of fibrous tissue, and there is no treatment for them. They are not in themselves precursors of malignant change; but, because they reflect asbestos exposure, they are associated with an increased risk of other asbestos-related diseases, benign and malignant. With regard to clinical features, Dr Rudd says:
"Usually, pleural plaques are an incidental finding on the chest radiograph, whether this is performed for routine employment health screening or some other purpose. In the unusual case where the plaques are very extensive and fused to form a cuirass-like structure, or where there are adhesions, they may give rise to shortness of breath on exertion. Rarely, pleuritic pain occurs, probably caused by adhesions, and occasionally extensively calcified plaques may give rise to an uncomfortable grating sensation during breathing, which may be audible on auscultation."
The second condition is "diffuse pleural thickening", defined by Dr Rudd as:
"… pleural fibrosis that extends continuously over a variable proportion of the thoracic cavity without well-circumscribed margins. It principally involves the visceral pleura, although this is often adherent to the parietal pleura."
With regard to clinical features of this condition, he says:
"The principal symptom is shortness of breath on exertion. There may have been a history of episodes of pleurisy in the past and there may also be pleuritic pain due to adhesions. Occasionally, pain is a persistent feature and may be disabling.
On examination there is usually little to find…".
Once established, pleural thickening tends to progress, mainly in the first 15 years of onset. In most cases, no treatment is advised.
It can therefore be seen that there is some degree of overlap – or, perhaps more accurately, an uncertain diagnostic boundary – between these two conditions. The former usually affects the parietal pleura, but may affect the visceral pleura; the latter, vice versa. The former usually comprises well-defined thickened discs, but these may fuse to cover a substantial area; the latter is diffuse and extends continuously over an extensive area. The former is usually asymptomatic, but in a small percentage of cases it may be symptomatic; whilst the latter is usually symptomatic. Clinically, it seems to me that the distinction is of modest importance – because, as I understand it, there is no treatment for either condition.
Before I leave the definitions of asbestos-related conditions, I should briefly refer to "asbestosis". This was a term widely used to describe any and all asbestos-related diseases; but, as defined in 1979 by the Advisory Committee on Asbestos, "asbestosis" has a particular restricted meaning, namely "fibrosis of the lungs caused by asbestos dusts which may or may not be associated with fibrosis of the parietal or pulmonary layer of the pleura". By that definition, asbestosis is a condition distinct from pleural plaques and diffuse pleural thickening; but the term continued to be used in a more generalised way well after 1979.
The Claimant's Medical Condition
The Claimant appears to have complained of shortness of breath in 1994 and had two chest x-rays which identified some atelectasis (i.e. an area of less than fully inflated lung) and pleural fluid, which improved over the week between the two x-rays. No abnormality of the pleura was identified, and it is not suggested that this episode is of any significance in the context of this claim.
However, in 2000, the Claimant started to suffer from breathlessness and pain in his chest. He said that, at first, it was intermittent and not severe; but there came a point when he realised that, on exertion, he was more breathless than he ought to have been, and he began suffering from intermittent pain in his chest, usually when he was breathless. Although the breathlessness and pain has been progressive – over time, gradually worsening in terms of both frequency and severity – the type and nature of the symptoms have not altered since 2000.
In October 2000, the Claimant had a chest infection. However, once that had cleared, he attended his GP on 18 October 2000 complaining of breathlessness and "tight band round chest" on mild exertion. He was given an immediate x-ray in the doctor's surgery, which the notes record as follows:
"Chest: There is a large pulmonary mass present in the left mid zone. This mass has a rather irregular border and there appear to be spicules extending towards the pleural surface. There is also possibly a little loss of volume in the right upper lobe. Further evaluation of this lesion is required. A CT examination [i.e. an x-ray computed tomography, or 'CT scan'] is recommended in the first instance. The lungs elsewhere appear clear. The heart is a little enlarged."
The Claimant said that, at the time, he was told he had a lump in his lung together with what were described to him as "tiny Christmas tree-like" projections from the lump. The lump, he was told, would require further investigation.
By letter dated 10 November 2000, the Claimant was referred to Dr David Jones at Withybush Hospital, Haverfordwest. Dr Jones saw him at his clinic on 22 November 2000. He reported to the Claimant's GP by letter of 24 November 2000:
"Seen 22 11 00. For the last 3-4 weeks he has had episodes of tightness on both sides of the front of his chest. It will last for between half an hour and all day. Not typically pleuritic. No cough or phlegm. Appetite and weight are fine. He smokes 20 cigarettes a day (30 pack years). In the past he worked as an industrial painter on large sites such as chemical works for 3 years soon after leaving school i.e. almost 40 years ago. Thereafter he was a labourer on domestic building sites and a gardener. He was a boilerman in the schools in Cardiff but was not exposed to asbestos other than probably as an industrial painter….
I had previously looked at the chest x-ray and thought it was suspicious of pleural plaques. He had a CT scan which confirms a large area of pleural thickening in the left anterior chest and one small plaque posteriorly on the left side with another one on the diaphragm. These are almost certainly related to his previous work as an industrial painter 40 years ago.
The lesion looks benign but we may have to consider a biopsy of the large one in the anterior chest…".
The Claimant could not recall any discussions with the consultant over and above those recorded by Dr Jones himself; but he denied telling the consultant that he had been exposed to asbestos as a painter, and had not been exposed as a boilerman – and there are no notes of his possible exposure to asbestos in the contemporaneous notes taken by Dr Jones. In any event, it now appears uncontroversial that the Claimant's only exposure to asbestos was as a boilerman as I have described.
Dr Jones' letter of 24 November must have reached Dr Cooke a couple of days after it is dated; because, on 28 November 2000, Dr Cooke saw the Claimant at the surgery to discuss it. The Claimant remembers being called in. It was quite an important consultation, because a lump had been found in the Claimant's lung and a biopsy was required to ascertain whether it was malignant or not. There was a chance that the lump was cancerous. The GP record of this consultation refers to "asbestosis", but the Claimant (rightly) understood this to be used as an umbrella-term to include all forms of asbestos-related disease. The note says that a biopsy and ECG was awaited. It also says:
"Considering claim now against employer from when he was a boilerman in Cardiff."
In paragraph 88 of his statement dated 31 March 2015, the Claimant said that, until he was told in 2012 that he had "pleural thickening", he had always assumed that his shortness of breath was due to his smoking and the associated COPD. However, he frankly accepted in cross-examination that, although he thought that his heavy smoking might have contributed to his condition, he was not diagnosed with COPD until 2007; and, from 2000 onwards, he believed that his breathlessness and chest pain resulted from exposure to asbestos while he was working for the Council as a boilerman.
Following his consultation with Dr Cooke, the Claimant telephoned Gee & Edwards, solicitors in Swansea who specialised in personal injury claims. On 5 December 2000, a Mr Owen of that firm attended the Claimant at his home. He told Mr Owen that he had been told by Dr Jones that he had "asbestosis". Mr Owen's note records that he explained the three year limitation period to the Claimant; but that did not appear to be an immediate problem as no one had before raised with him the possibility that he had a chest condition let alone an asbestos-related condition related to his work.
Although the Claimant appears to have been confused about dates of exposure, he made clear to Mr Owen that he considered he had been exposed to asbestos when, and only when, he was a boilerman at the schools meal service kitchen building in Tremorfa. In the event, the Claimant's employment history occupied the solicitors a good deal over the next few weeks. However, on 6 February 2001, Mr Owen sent the Council a letter before action (with some follow-up correspondence responding to particular queries), identifying "asbestosis" as the injury complained and the correct building in Tremorfa as the source. The dates suggested were, however, incorrect, the letter suggesting that he was employed there in the period 1971-4. Nothing now turns on that error.
The Claimant was made well aware that the changes to his pleura that required further investigation were attributable to exposure to asbestos; and he knew that his only exposure to asbestos was as a boilerman at the school meals service premises in Tremorfa. Attribution in that sense has always been clear. Of course, this was pre-Rothwell; and, in 2001, it was generally thought that a symptomless asbestos-related condition was actionable. Therefore, at an early stage of investigation, solicitors might reasonably not have been focusing on whether and what symptoms resulted from the condition. However, in his evidence, the Claimant was clear: at that stage and ever since, he considered that, whilst his heavy smoking may also have made a contribution, his breathlessness and pain in the chest resulted from an asbestos-related condition caused by exposure to asbestos when he was employed by the Council as a boilerman.
In the meantime, Dr Jones had sent a second letter to the Claimant's GP on 6 December 2000, but only in relation to matters arising from the first consultation, as follows:
"This patient's CT scan confirms that the lesion on the x-ray in the left upper lobe is actually pleural in origin. It is sharply defined and has a few flecks of calcification so probably represents a large innocent pleural plaque. There is also another calcified pleural plaque on the right hemi-diaphragm. These changes are related to occupational exposure to asbestos. Because the lesion on the left upper chest is so large we will attempt a biopsy to exclude malignancy but this seems unlikely. CT scan also shows a large fat pad around the heart and a small pericardial effusion. Arrangements have been made for him to have a CT guided biopsy in the next week or so and he has an exercise stress test booked for 13th December. Further information will follow later."
Things were therefore still worrying, as malignancy could not be ruled out before the biopsy on the large "plaque" had been performed.
The biopsy was duly performed on 12 December 2000, again at Withybush Hospital. The histopathological report read as follows:
"Sections show a fragment of markedly fibrous pleura, with some attached and lightly inflamed fibro-fatty connective tissue. The appearances would be consistent with your clinical suggestion of a simple pleural plaque, and there is certainly no evidence of dysplasia or malignancy in this specimen".
The letter from the hospital back to Dr Cooke was in similar terms:
"This gentleman underwent CT guided biopsy of the anterior pleural mass, histology from which showed markedly fibrous pleura and inflamed fibro-fatty connective tissue with no evidence of dysplasia or of malignancy. I will write to you again when the results of the stress test are available."
The Claimant said that he remembered being given that news – especially the good news about the absence of any malignancy – by his GP.
Thereafter, the Claimant lost interest in matters somewhat. He failed to attend appointments with Dr Jones at Withybush in June and August 2001, resulting in the hospital saying that they would not book another appointment unless requested by the GP to do so. The possible claim against the Council through Gee & Edwards was also not pursued. Although the Claimant was critical of the solicitors for simply letting the matter drop, in cross-examination, again very frankly and openly, the Claimant said that he was not particularly taking an interest in pursuing a claim and, he said: "Quite possibly, I thought I would knock it on the head." He said that he took this view because, although he was still breathless and sometimes had chest pain – and, indeed, over time these were worsening – his condition "was not bothering [him]" and it did not really prevent him from doing the things that he wished to do. For example, he could still without difficulty get to the shops and climb the stairs.
Nevertheless, on 28 September 2001, Dr King at the Claimant's GP Surgery wrote to the hospital saying that the Claimant had a "history of asbestosis" and his symptoms were becoming progressively worse, with increasing chest pain and breathlessness, and some light-headedness (possibly due to a chest infection). He appears to have been seen at the hospital, and x-rayed, in March 2002. There he admitted to heavy smoking – more than 30 cigarettes per day and to breathlessness on moderate exertion which had been going on for some time but which had not worsened recently. He had no chest pain. He said that he was fine going round the shops at walking pace, and slowly climbing stairs – but he had to stop for breaks when climbing steep hills. The consultant wrote back to Dr King in a letter dated 16 April 2002. That records the diagnosis as:
"… large pleural plaque left lung – histology confirmed as benign December 2000… The pleural plaque on the left is unchanged from previous films. The one on the right is possibly slightly larger… No further investigation or follow up is required at this time.
The staff grade also wrote an undated letter, essentially repeating those findings and saying:
"As far as his chest problems are concerned…, he does not feel his level of breathlessness has changed particularly over the last year to 18 months and was reassured of the unchanged [x-ray]."
In 2003, the Claimant was admitted again with chest pains, and increasing breathlessness for a month which (it is recorded) improved after admission. He had new x-rays and a CT scan, which showed no new findings. A letter from the consultant to the Claimant's GP surgery said:
"His symptoms are of chronic breathlessness which would appear to be related to his heavy smoking."
His discharge summary gave his diagnosis as "pleural plaque". No review was planned.
The Claimant does not appear to have attended the chest clinic again for several years, until 2011. However, in about September 2007, in circumstances not entirely clear, he was diagnosed with COPD and given an inhaler and antibiotics from time to time; and, oddly (given the earlier diagnosis of COPD for which he continued medication), on 10 June 2008, a letter from his GP confirmed he was suffering from "asbestos plaques on the lungs, renal stones, hypertension" (with no mention of COPD), and "the lung disease does result in him being breathless when walking long distances".
In October 2011, the Claimant was again referred to the chest clinic at the Withybush Hospital, under Dr Tim Lewis, because his breathlessness was worse and thought not optimally managed by his medication. The Claimant told the hospital that he had had shortness of breath for 10-12 years, but it had increased in the last year. At the consultation on 14 October, that medication was changed. Further CT scans performed – the first confirming the "calcified pleural mass and pleura lesions", and a second in January 2012 identifying "pleural plaques with pleural thickening" – and a video-assisted thoracic scan (or "VAT scan") also performed. A further biopsy was arranged, which showed no malignancy.
At a multidisciplinary ("MDT") team meeting (recorded in a letter from Dr Lewis to the Claimant's GP dated 20 January 2012), it was agreed:
"Diagnosis: Benign neoplasm of bronchus and lung.
MDT meeting discussion: Pleural plaques only, no malignancy….
The patient may not yet be fully aware of this information but it will be discussed at their next clinic appointment."
The conclusion of Dr Lewis, set out in a letter to the Claimant's GP dated 16 February 2012, was that:
"He has diffuse pleural thickening so he may be eligible for both State and Civil compensation for asbestos related disease.
Mr Summers' dyspnoea [i.e. shortness of breath] is, I suspect, due to his smoking history despite the lack of any obvious obstructive element to his spirometry and there may also be an element of lack of physical conditioning."
Dr Lewis wrote to the Claimant directly the same day, as follows:
"Following your recent visit to the clinic we can confirm that the specimens taken at Swansea are all benign with no evidence of cancer.
No compensation is available from the State or previous employers or insurance companies for asbestos pleural plaques but you do appear to have what is known as diffuse pleural thickening and you may be able to make a claim for this. (I cannot guarantee this as I am not the person who makes the decision.)
We would advise you to make both State and Civil compensation claim as you have nothing to lose apart from a little time by doing this.
Some details of how to go about this are enclosed for your convenience."
The Claimant was discharged from the hospital, on the basis that nothing could be done for his respiratory condition, other than the revised medication for his COPD with which he was already being provided.
No doubt encouraged by Dr Lewis's letter, the Claimant made a claim for Industrial Injuries Disablement Benefit on 16 February 2012, in which he stated:
"About 13 years ago I was complaining about my breathing. I had an x-ray and then a lump was found and I had a biopsy but was told it was fine. My chest was getting worse and I had an x-ray last year and in January 2011 I went into Morriston and they tried to take a lump again. I've had scans and I've been told I have pleural thickening."
The implication there is that the Claimant's problems with his breathing and chest pains, since about 2000, were caused by his exposure to asbestos in the course of his work – an unsurprising suggestion by the Claimant, given that he has always believed that they were. That claim was rejected on 15 May 2012, on the basis that the Claimant does not suffer (and has never suffered) from Prescribed Disease D9 (pleural thickening, as defined for the purposes of the benefit), a decision confirmed on appeal to the First-tier Tribunal (Social Entitlement Chamber) on 28 November 2012.
In respect of the Claimant's current condition, Dr Sinclair and Dr Moore-Gillon were all but agreed. Their joint memorandum dated 20 February 2015 stated as follows:
"(1) Mr Summers has pleural plaques, the appearances of which are typical of those due to asbestos exposure.
(2) Responsibility for causation of his asbestos-related pleural plaques may be apportioned between those periods of employment in which there was asbestos exposure according to the proportion which each contributed to the totality of his asbestos exposure.
(3) Pleural plaques are usually regarded as not causing respiratory disability whilst asbestos-related diffuse pleural thickening is generally regarded as being capable of causing disability. There appears to be some debate in the case of Mr Summers as to whether he has diffuse pleural thickening and, indeed, we note that he has been turned down in his application for Industrial Injuries Disablement Benefit for that condition.
We state that it is well recognised that pleural plaques may rarely – if sufficiently extensive and confluent – give rise to disability.
In the particular case of Mr Summers we believe that whatever the label applied to his pleural condition we consider that it has both been caused by asbestos and is giving rise to disability. We consider that he should be eligible for Industrial Injuries Disablement Benefit.
(4) Mr Summers does not have asbestosis, i.e. he does not have diffuse interstitial pulmonary fibrosis caused by exposure to asbestos.
(5) Mr Summers has chronic obstructive pulmonary disease, including in particular emphysema and small airways disease. We attribute this to smoking and not to asbestos exposure.
(6) …
(7) We estimate Mr Summers' overall cardiorespiratory disability at around 50%. Contributing to this are his asbestos-related pleural condition, COPD, obesity and general physical deconditioning.
(8) Of this 50%, Dr Moore-Gillon considers that 20% (i.e. two fifths of the total) is due to the consequences of asbestos exposure, while Dr Sinclair estimates this proportion at 30%.
(9) …".
For the purposes of this trial, the minor disagreement between the experts in paragraph (8) is immaterial. I shall proceed on the basis that about half of the Claimant's respiratory symptoms is due to asbestos-related disease, and half due to other causes.
The Date of Knowledge: Discussion and Conclusion
On the basis of the evidence, Mr Phillips conceded – rightly – that he must accept that, from late 2000, the Claimant considered that exposure to asbestos whilst he worked at the Council's premises as a boilerman at least materially contributed to the breathlessness and chest pains from which he suffered at that time and since. However, I could not properly conclude that he had the requisite knowledge for the purposes of sections 11 and 14 of the Limitation Act 1980 until he was told in February 2012 that he suffered from "diffuse pleural thickening". Whatever the Claimant thought, he submitted there is no evidence that he suffered from anything more than symptomless pleural plaques in 2000 – or, indeed, at any time before 2011-2. The Claimant's belief that he was suffering from symptoms of breathlessness and chest pain as a result of an asbestos-related condition from 2000 was simply wrong. The symptoms from which he suffered in 2000 arose from other causes, notably his smoking.
That was a bold submission, ably put – but I am unpersuaded by it. In my judgment, the Claimant suffered from a symptomatic asbestos-related condition from 2000 – that is when his cause of action arose – and he first had knowledge that his injury was significant then. Consequently, the limitation period applicable under section 11(4) expired well before 2011.
In coming to that conclusion, I have particularly taken into account the following.
i) In respect of the facts about a prospective claim of which an individual must have knowledge under section 14(1), in 2000 the Claimant knew that he had been injured, in the sense that he had suffered pleural abnormalities; and that that injury was attributable to exposure to asbestos dust whilst in the employ of the Council and as a result of its act or omission. It is therefore not in dispute that the Claimant had knowledge of all relevant facts, except (the Claimant contends) knowledge that his injury was "significant".
ii) I respectfully agree with the joint memorandum of the experts which concluded that it would be an arid exercise to attempt to categorise the Claimant's condition as "pleural plaques" or "diffuse pleural thickening". Whatever label might be attached to the condition, as an injury it would be "significant" if it was (or as soon as it became) symptomatic (i.e. there were more than very minor symptoms) and would not be "significant" if it were asymptomatic.
iii) The use of medical terms in this area has changed, and become more specific, over time. In this case, the terms used by the medics contemporaneously are inconsistent and of limited value in determining whether they considered the asbestos-related condition to be symptomatic. After the 22 November 2000 consultation, Dr Jones used both of the terms "large area of pleural thickening" (letter to Dr Cooke of 24 November 2000) "sharply defined… large innocent pleural plaque" (letter to Dr Cooke of 6 December 2000). Even as late as the January 2012 MDT, the condition was talked of in terms of "pleural plaques only…"; although, by then, of course it was understood that the Claimant's symptoms arose from something more than simple, asymptomatic pleural plaques. The position is made more complicated by the following:
a) From a clinical point of view whether a patient is suffering from pleural plaques or diffuse pleural thickening is of limited value, because neither is treatable. What matters from a clinical point of view is whether the condition is malignant (cancerous) or benign (non-cancerous). Thus, in 2012, once the Claimant's condition was confirmed as being benign, the hospital simply discharged him – although giving him advice as to how he might pursue a claim for the symptoms that they considered resulted from the condition. "Simple" pleural plaques may therefore be used, not to differentiate the condition from diffuse pleural plaques, but rather from a malign condition.
b) Until Rothwell in 2006, asbestos-related conditions were thought to be actionable whether symptomatic or not.
c) Pleural plaques can, occasionally, be symptomatic.
iv) I accept that the medical records do not point consistently one way: for example, there is reference in the Dr Jones' 6 December 2000 letter to the lesions being "sharply defined", and the consultant in 2003 reported to the Claimant's GP that he thought the symptoms of chronic breathlessness appeared to be related to his heavy smoking. Nevertheless, the contemporaneous medical records from 2000 regularly refer to something more than "pleural plaques"; and they suggest that the clinicians considered that, whilst the pleural condition was benign, there was something more than straightforward pleural plaques present. This makes it more likely that the pleural condition was symptomatic.
v) Although parts of the expert evidence suggest the Claimant might be regarded as suffering from two conditions – asymptomatic pleural plaques and symptomatic diffuse pleural thickening – their joint memorandum appears to postulate a single condition of uncertain label. The contemporaneous medical records do not suggest more than one condition. Although the thickened area of the pleura may have altered over time – for example, by engaging more with the underlying morphological structures – the physiology appears to have changed little in nature. The Claimant was told of "Christmas tree-like" projections from the "lump" at a very early stage. Furthermore, although the frequency and severity of the breathlessness and chest pains has increased over time, the nature and type of symptoms was described by the Claimant in consistent terms over the whole period. The Claimant's condition is best considered as a single progressing condition, rather than one (symptomless) condition being overlain by a second (symptomatic) condition.
vi) In their joint memorandum, the experts do not deal with the question as to when the asbestos-related condition became symptomatic. However, in paragraph 9.10 of his report dated 17 February 2013, Dr Sinclair says;
"There is evidence of progression of Mr Summers' diffuse pleural thickening, as demonstrated by him having a forced vital capacity of 2.95l in 2007, which by 2012 had reduced to 2.46, a reduction of approximately 500ml whilst forced expiratory volume in 1 second has reduced from 1.97l to 1.76l. The greater reduction in forced vital capacity confirms progression of diffuse pleural thickening as opposed to COPD…".
That suggests that Dr Sinclair is of the view that the Claimant first suffered from diffuse pleural thickening by 2007 at the latest. Dr Moore-Gillon, on page 16 of his report dated 20 February 2015, did consider the onset of symptoms:
"Dating the onset of disability due to asbestos-related problems (and their associated parenchymal lung changes) is very difficult…. My general feeling is that the asbestos-related pleural change has probably progressed only extremely slowly if at all and that Mr Summers became aware of progressively worsening symptoms because of progression of his airways disease with continued smoking."
That is far from a firm or confident view. However, the experts are agreed that the Claimant has parallel conditions involving his chest, those involving the pleura being asbestos-related and others not being caused by exposure to asbestos but rather tobacco smoke. It is common ground between the experts that the latter has progressed (and continues to progress) more quickly than the former. Dr Moore-Gillon appears to suggest the early respiratory symptoms suffered by the Claimant were a result of his asbestos-related disease, and his COPD has been responsible for a higher proportion of the more recent symptoms.
vii) Although an increase in the Claimant's asbestos-related chest symptoms has been masked by an even greater increase in COPD-derived chest symptoms, the symptoms from which he was suffering in 2000 are characteristic of pleural thickening, they have not changed in their essential nature, and one characteristic of pleural thickening is that it is progressive.
viii) The Claimant's own evidence is also noteworthy. As I have described, although he thought that his heavy smoking may have contributed, he considered that, from 2000, his breathlessness and chest pains were due to the asbestos-related changes to his pleura. I accept that there is no direct evidence from the Claimant, or anyone else, to the effect that he was told by the medics in 2000 that his asbestos-related condition was symptomatic – and I have explained why that may not have been at the forefront of their minds – but it is clear that, after his various consultations, the Claimant was left with the impression that his breathlessness and chest pains did derive from his pleural condition. Of course, in 2000-1 it would have been thought open to him to pursue a claim for his pleural condition even if it were symptomless. However, he said that he did not pursue a claim (and did not attend chest clinic appointments) after the negative biopsy in 2001, not because he thought that he had no asbestos-related symptoms, but because those symptoms he believed were asbestos-related did not bother him and he did not consider those symptoms (although worsening) were sufficiently debilitating to make pursuit of a claim worthwhile.
ix) In my judgment, on all the evidence, it is therefore far more likely that some of the Claimant's breathlessness and chest pains in 2000 were caused by his pleural condition; and the Claimant's understanding then that they were so caused was true.
Conclusion
I therefore conclude that the Claimant's date of knowledge for the purposes of sections 11 and 14 of the Limitation Act 1980 was well before 18 August 2011.
This claim thus fails; and I shall direct judgment be entered for the Defendant.
|
HH Judge Anthony Thornton QC:
Introduction
The claimant, Zia Ul Haque Tarakhil claims damages for false imprisonment and wrongful detention and for the psychiatric consequences of that detention and aggravated damages for the high handed way that he was detained and in which his claim has been dealt with throughout by the defendant. He is an Afghan national who was detained in Immigration Detention at Dover Immigration Centre between 19 January 2012 and 9 February 2012, a total of 21 days. The defendant is the Home Office which is the Government Department responsible for the conduct of Immigration Officers and others working for it in the United Kingdom Border Agency ("UKBA") and any third party contractor undertaking immigration functions involving the claimant. In summary, the claimant contends that his detention was unlawful because there were no lawful and reasonable grounds for detaining him.
Factual background
The lawfulness of the decisions taken in connection with the claimant's detention must be tested by reference to what was known to or should have been known by each decision-maker. The following summary only refers to such objectively known facts.
The claimant arrived in the United Kingdom on 19 May 2008 as an unaccompanied minor, was apprehended on arrival and immediately claimed asylum and that he was 13. He was age assessed by Kent County Council as being 15. The defendant refused his asylum claim because it refused to recognise him as a refugee but granted him discretionary leave to remain until 1 July 2010 when he would be 17½. He initially lived in Folkestone with foster parents but after nine months moved to an immigration hostel there to make room for others in greater need of fostering.
On 12 June 2010, he made an in-time application for an extension of his discretionary leave to remain through Refugee and Migrant Justice who where his legal representatives. That application had not been determined when, on 14 January 2011, he witnessed the homicide of someone who he knew who had died during an affray in his hostel that he was not involved in between two groups of Afghan young men. Soon afterwards, on 19 February 2011, his application for an extension of his discretionary leave to remain was refused which took effect on 19 March 2011. No notice of appeal was lodged against that refusal because the claimant had neither the knowledge nor the resources to obtain alternative representation or to represent himself as a result of Refugee and Migrant Justice's previous closure due to its financial difficulties. He therefore became appeal rights exhausted and his leave to remain expired on 31 March 2011.
The defendant's CID Calendar of Events contained a note dated 5 April 2011 that was booked by the Kent Local Immigration Team ("KLIT") which stated that the claimant could not be detained until "HMI/Kent Police" gave the go-ahead because he was subject to Operation Barnham as a witness to a murder incident. He was in fact to be a significant witness in the trial of the man who was to be tried for the death of his friend that he had witnessed. The defendant did not give any evidence about Operation Barnham but it was clear from other evidence that it was concerned with immigrants who were subject to removal from the United Kingdom but whose continued presence was needed in the United Kingdom to assist Kent Police in the investigation and prosecution of serious crime. As a result, agreement had been reached between the KLIT and Kent Police that such immigrants would neither be detained nor deported until their assistance was no longer required by Kent Police. As a result, KLIT gave such immigrants temporary admission or a 6-month period of discretionary leave to remain and required them to report regularly to an Immigration Reporting Centre. The agreement apparently provided that these restrictions on detention and removal were to remain in place until Kent Police no longer required the relevant immigrants' assistance and gave KLIT the go-ahead for their detention and removal.
On 19 April 2011, KLIT recorded in an internal note on the GCID Case Record Sheet that the claimant's further application for leave to remain had been refused and that he was appeal rights exhausted. AO Lingwood-Evans placed a note on the claimant's file which read in part:
"The [claimant] was granted DL until 01.07.2010 which has now expired. His FLTR app was received on 12.06.2010 was refused on 18.03.2011. He has no appeals o/s and the deadline has passed. The above was referred to HEO [redacted][a member of the KCT] who authorised service of form IS151A [Notice to a Person Liable to Removal] as the subject is an overstayer, committing an offence …
The [claimant] is also on the Op Barnham list as a significant witness to murder so should not be detained until checks made with HMI & Kent Police. However EO [redacted] has confirmed we should still set him up to report.
…
ACTION:
…
04.2011 Did [the claimant] report? [The claimant] is murder witness (Op Barnham) so cannot be detained until given go ahead by HMI/Kent Police. File AFG Hold 1st Report."
It was decided by the HEO at KCT that he should be served with a notice of being liable to be removed even though he could not be detained or removed at that time since he was subject to Operation Barnham. The notice stated that he had overstayed his leave and had in consequence committed an offence and that he was liable to be detained. None of these statements were accurate since he was subject to Operation Barnham, had only become appeal rights exhausted 16 days earlier and, in separate documents also dated 19 April 2011, was simultaneously granted temporary admission and made subject to a regular reporting requirement at Kent Reporting Centre. That HEO did not give evidence and the defendant did not disclose any contemporaneous note that that officer had made that explained why he had authorised the service of this notice despite the claimant's witness involvement in Operation Barnham as a significant prosecution witness in a murder trial.
On 20 July 2011, the claimant's new solicitors sent the defendant a fresh claim supported by further representations. These were based on contentions that the claimant was two years younger than he had been assessed as being by Kent County Council, that he would be persecuted on his return and that his removal would disproportionately interfere with his private and family life. Each of these contentions was supported by what was contended to be fresh evidence. These representations were initially forwarded to the KLIT who arranged for Kent Barrier Casework Team ("KCT") to determine them. On 4 October 2011, KLIT noted on the GCID Case Record Sheet that the claimant's representations were currently with KCT for consideration and that he was a witness in a murder case within Operation Barnham.
KCT refused these representations in a decision dated 18 October 2011. However, as is clear from the file note made by the Immigration Officer making the decision, the claimant was granted a right of appeal because that officer considered that there was fresh evidence that was unavailable at the time of his appeal which supported his contention that he was two years younger than had been concluded by those conducting his age assessment after his arrival and because he was subject to Operation Barnham as a live witness in a murder trial. He was granted this right of appeal because the determining officer considered that in the light of the fresh evidence, the claimant's appeal had a realistic prospect of success.
Meanwhile, the claimant gave extensive evidence for the prosecution at the criminal trial of the alleged killer of his friend at Maidstone Crown Court for about four days during October 2011. The jury accepted his evidence and the defendant was convicted and received a five-year sentence.
On 3 November 2011, the officer who had refused the claimant's fresh claim placed a notice on the claimant's file that he had given notice of appeal. This notice was accompanied by all the relevant documents relevant to his representations and their refusal. The First-tier Tribunal ("FtT") heard his appeal on 30 November 2011. The claimant was represented by counsel and the defendant was unrepresented. The FtT dismissed his appeal in a Determination sent out on 19 December 2011. The claimant's legal representative served a notice of appeal seeking permission to appeal to the Upper Tribunal ("UT") on the FtT on 5 January 2012 which, given the Christmas period, was the last day for the service of this in-time notice. The claimant would only have become appeal rights exhausted ("ARE") following the ultimate conclusion of the appeal process.
KLIT was notified by the relevant UKBA's ADMU Asylum Team who had previously been notified by the FtT, that the claimant's appeal had been dismissed by the FtT and placed an entry on the GCID dated 6 January 2012 that it would be linking with KCT once it had received the claimant's file back from KCT. On 9 January 2012, KLIT placed an entry on the CGID which read:
"[The claimant] referred for OP DICKENS on 31.01.12 see [redacted] for detention details."
No document or details of the redacted passage were disclosed and no evidence was given about their contents. It would appear that the redacted passage gave details of the arrangements for the claimant to be detained to await his removal on the charter flight to Afghanistan that had been arranged under Operation Dickens for 31 January 2012. No details were given of this Operation but it is clear from documents that have been disclosed that Operation Dickens was set up to organise and arrange charter flights to return Afghan nationals who were being deported to Afghanistan. That was the only way that such removal could be carried out and such flights only occurred infrequently. It is clear that one had been arranged for 31 January 2012 and it would seem that KLIT had been notified on about 9 January 2012 that the UKBA had referred the claimant to that flight pursuant to Operation Dickens.
The claimant was not the only Afghan who the defendant was seeking to return to Afghanistan who had been involved in the murder trial in which the claimant had given evidence. It was stated on the claimant's draft IS91 and 91RA notices prepared by KLIT on about 12 January 2012 that he had been a witness in a murder trial and that "the witness will be detained with 8 others involved in the trial". It was not stated what role these other 8 individuals had played in the affray in which the victim had been killed or in the subsequent criminal trial but the wording of the notice suggests that these other 8 individuals had not been prosecution witnesses.
KLIT appears to have started to take the decision to detain the claimant on 12 January 2012 following its receipt of instructions to include him in Operation Dickens. Three documents that were dated 12 January 2012 were prepared in draft. They were an IS91 Authority to Detain, an IS91R Reasons for Detention and an IS91RA Risk Assessment of the claimant in detention. None were signed but the name Tammy Hayes, who was an Executive Officer, was printed in capitals beneath the box that had been left blank for signature on each of them.
The unsigned Notice to Detain stated that the claimant should remain in detention because his removal from the United Kingdom was imminent – an obvious albeit unstated reference to the intention to remove him to Afghanistan on a charter flight which Operation Dickens had been planned for 31 January 2012 – and that the only factor relied on in deciding to detain him was that he had previously failed or refused to leave the UK when required to do so. It is not possible to say what that conclusion was based on since the claimant was arrested and claimed asylum on arrival. He had therefore been entitled to be in the UK from his arrival on 19 May 2008 until he became appeal rights exhausted on 31 March 2011. He had been granted temporary permission to remain in the UK from 19 April 2012 and, in the 19 days starting on 1 April 2012 during which he had no permission to remain, he could neither be detained nor removed since he was subject to Operation Barnham.
There was no evidence that Kent Police had, by 12 January 2012, granted KLIT its approval for the claimant to be detained. It is unlikely that Kent Police had approved the claimant's detention since it is likely that it would have waited until the defendant in the criminal trial had been sentenced and he had become ARE and that he did not become ARE prior to 12 January 2012.
I infer that EO Hayes on 12 January 2012 postponed taking a decision to detain the claimant because he was not ARE and was also subject to Operation Barnham. He would have been aware that KLIT was very conscious that the claimant was subject to Operation Barnham since it had confirmed this in its GCID entries dated 5 April 2011 and 4 and 18 October 2011 that he was still subject to Operation Barnham.
The FtT dismissed the claimant's application for permission to appeal on 17 January 2012 and sent a copy of this decision to the ADMU asylum team who, during the morning of 19 January 2012, notified KLIT that this application had been dismissed. What happened next is explained in this note placed by EO Hayes of KLIT on the GCID and on an unsigned Reasons for Detention Form later that day:
"OP BARNHAM …
Permission to appeal to 1st Tier has been refused on 17/01/12. SCW [redacted] advised that we can maintain detention. HEO [redacted] made a call is to Senior PO [redacted] who confirm that we can maintain detention pending whether Upper Tier [application for permission to appeal] is submitted and whether this is on paper or oral hearing. If this does happen then we can consider bail at the time of submission.
HEO [redacted] advised."
The Reasons for Detention form identified that the claimant's detention had been authorised by SEO Marshall-Redding.
It can be seen that a Senior Case-Worker, a Senior PO and an HEO had all stated that the defendant could detain the claimant until it was known whether he had lodged with the UT his application for permission to appeal at which point his detention could be reconsidered prior to SEO Marshall-Redding's decision to authorise the claimant's detention. It can also be seen that the decision-maker, SEO Marshall-Redding, was aware that the claimant remained subject to Operation Barnham since this GCID note is headed "OP BARNHAM". SEO Marshall-Redding then verbally authorised the claimant's detention,
In a subsequent telephone call to an unidentified officer in KLIT, the claimant's legal representative was informed that the claimant had been detained because his application for permission to appeal had been refused and that he would remain in detention until the UT reached a decision.
Just before the detention team set out, its team leader contacted Kent Police to obtain the claimant's current address because KLIT did not know or could not find the claimant' current address. The detention team then set out to detain the claimant who was detained at about 13.15 hours on 19 April 2012. He explained what happened when he was detained in his witness statement which the parties had agreed and the court had ordered should stand as his evidence.
"22. On 19 January 2012 at about midday I answered my front door to a female police officer who I recognised from the criminal trial. She gave me the clothes that were taken when the homicide incident happened. A few minutes later, three immigration officers came; there was one woman and two men. They said I was to be deported.
I was transported in a van with two of the immigration officers (one male, one female); the police officer had left. They locked the door behind us. My neighbours were looking and they looked upset; they told the immigration officers to look after me. They were English people who were about 60.
I was transported to Dover Immigration Removal Centre; we stopped once en route for 15 or 20 minutes. I felt awful and I was scared about what might happen to me in the detention centre.
I remained in Dover IRC until 9 February 2012. First we were booked into the centre and then taken into a room. I realised I was powerless to do anything in detention.
I eventually telephoned my solicitor. She was shocked that I had been detained. She said that she had lodged the appeal at court but had not received any papers back yet.
I was in the same cell at Dover for the whole time. I was with my friend Salwar. I helped interpret for my other friends whilst I was there. I spent most of my time watching cricket. I did not ask anyone in Dover what was happening. I talked to my solicitor a few times. I felt fed up and like I wanted to go back to Afghanistan but my solicitor reassured me that I would be released from detention. I was not told any information by anyone else whilst I was there. I felt hopeless about the lack of information.
There was an incident whilst I was detained at Dover where another detainee threatened me with a snooker cue because I beat him at pool a few times. I was scared of him and he was older than me.
I did not sleep well in detention. It was noisy, people would shout and make noise. Before detention I would sleep for 8 or 9 hours night, after I was released from detention I found it difficult to sleep.
…
After my release from detention my friends said I was different. I would get angry quickly. I did not sleep well at night. I would lie awake until at least 3am. I had frightening nightmares about being caught and deported to Afghanistan. My flat-mate in Folkestone said that on one occasion he came into my room one night because he heard me screaming loudly. I felt frightened when I saw uniformed police officers. I was terrified when I had to report to the Home Office twice each week but I still went."
The WPC had left just before the arresting team arrived and she took no part in the claimant's detention. It is clear that the WPC was not part of that team and was not involved in the detention but it is equally clear that her arrival in the manner she arrived just before the arresting team would have caused the claimant considerable upset and that he must have thought that he was being arrested by or on behalf of the police. The defendant called no evidence to challenge this evidence despite being ordered by the Master at two pre-hearing conference that it should serve a witness statement or statements it intended to rely on in relation to any issues of fact to be decided on at the trial. The claimant's witness statement was credible particularly since it remained unchallenged despite it being served well before trial. I conclude that this evidence should be accepted and that the claimant's detention was carried out in the manner described by him.
There were three pieces of evidence which suggested that Kent Police never agreed to the claimant being detained and that KLIT was in breach of the requirements of Operation Barnham that KLIT was required to adhere to that he should not be detained without Kent Police's agreement. Firstly, KLIT did not know the claimant's current address and Kent Police at a low operational level provided it without any suggestion that he was now free to be detained. Secondly, Kent Police had not attempted to return the claimant's clothing that it had detained until one of the officers in the criminal case learnt that he was about to be detained by KLIT and went round immediately with his clothing so that he would not be without it. That officer was not part of the detention team and her lack of involvement in the detention indicated that Kent Police had only been aware that he was to be detained on being telephoned by KLIT and were only returning his clothing because he was about to be detained and removed. Thirdly, EO Hayes's GCID posting on 19 January 2012 was headed "Op Barnham" which suggested that the claimant was still within that Operation on 19 January 2012. Had Kent Police previously agreed to the claimant's detention, KLIT would have known or have been provided with the claimant's current address long before it went round to detain him, it would already have returned his clothing prior to the day of his detention and EO Hayes would not have referred to Operation Burnham in the GCID note dated 19 January 2012 as if that Operation was both on-going and still relevant to the claimant's current circumstances.
On 20 January 2012, EO Hayes posted this significant entry on the GCID Case Record Sheet:
"As [the claimant] still has appeal rights until 31/01/12 we cannot set [removal directions] until [appeal rights exhausted] date of 31/01/12 (if [he] does not [obtain permission to appeal] to Upper Tier).
Email sent to CROS Operations to inform them to remove from this charter and place on next."
On the same day, another Immigration Officer undertook a 24-hour detention review and maintained the detention. The review decision stated:
"Refer [the claimant] for Op Dickens once [the claimant] becomes ARE [which] are dependent on if the Upper Tier app is submitted (sic)."
Given their factual background, the meaning of these hastily drafted and ungrammatical reasons was as follows:
"The claimant's detention was maintained so that he could be placed in the Operation Dickens removal programme once he became ARE. This intention to remove him on the forthcoming charter flight was liable to change if he submitted an application for permission to appeal to the UT, particularly if he was granted permission to appeal. He would be placed in Operation Dickens the moment his time for lodging an appeal had passed without him lodging one or, if one was lodged, the moment he subsequently became ARE."
The decision did not consider whether detention conformed to the defendant's detention policy, whether EO Hayes was correct to point out that removal directions could not currently be set, whether the claimant should be released from detention because his removal was not imminent or the contents of the email EO Hayes had already sent to CROS informing it to remove the claimant's name from the forthcoming charter flight.
The defendant did not disclose a copy of this email nor any documents relating to the claimant's potential placement on the charter flight of 31/01/12 nor to the date and arrangements of the next charter flight which was not due for several weeks. Moreover, there was no evidence as to why that 24-hour decision was taken in those terms given the directly contrary view that had been reached by EO Hayes earlier that day.
Later that day, an officer whose name was redacted from the disclosed GCID Case Record Sheet explained "the case" to the claimant according to the note on the GCID. The contents of that explanation were not disclosed.
On 22 January 2012, the three-day detention review took place. This merely affirmed the claimant's detention without any explanation or reasons. On 23 January 2012, the claimant's solicitors sent the UT a renewed notice applying for permission to appeal and informed the defendant by telephone that it had done so. The representative that the legal representative spoke to stated that the claimant would remain in detention until that renewed application had been decided.
On 26 January 2012, the seven-day detention review took place. An unidentified officer whose name was redacted from the disclosed detention review document stated that detention should be maintained because KLIT was waiting to see if the claimant appealed to Upper Tribunal. On a different Detention Review sheet in a different handwriting but with a redacted name, the decision was also to confirm the claimant's detention but in these slightly different words:
"Maintain detention as [the claimant] needs to be referred for Op Dickens when/if [he] becomes ARE."
There was no explanation as to why there were two differently worded decisions. One based it on the KLIT waiting to see whether an appeal would take place before deciding on his release and the other on waiting to see whether he became ARE.
On 2 February 2012, a 14-day review was undertaken by an IO whose name was redacted from the decision. This was to maintain the claimant's detention because he had submitted an application for permission to appeal to the UT which was now being considered by the UT judge. It followed that the claimant should remain in detention to await its outcome.
On 3 February 2012, the UT faxed its decision granting permission to appeal to the UKBA with a request that a copy should be forwarded to the claimant. For unexplained reasons, the UKBA did not forward a copy to KLIT until 8 February 2012 following chasing telephone calls from the claimant's legal representative on 6, 7 and 8 February 2012. The claimant was released from detention on 9 February 2012 having been granted temporary admission and made subject to a condition that he reported every Tuesday and Thursday.
The Law
The law relating to an immigrant's administrative detention has become unnecessarily complex. However, it may be shortly stated as it applies to this case as follows:
(1) An immigrant, even if he has overstayed and remains in the United Kingdom unlawfully, may only be detained for the purpose of being deported if the period of detention is no longer than is reasonable in the circumstances. The power to detain should not be used if it is impossible, or it becomes impossible, to effect removal within a reasonable time and the Secretary of State should act with reasonable diligence and expedition to effect removal (R(Lumba) v SSHD[1] explaining the Hardial Singh principles).
(2) Detention should be used sparingly and for the shortest period necessary. If a person has lodged a suspensive appeal that needs to be resolved before removal can proceed, that must be taken into account in deciding whether continued detention is appropriate (Paragraphs 55.1.3. and 55.14. of the defendant's Policy[2]).
(3) There is a presumption in favour of temporary release and strong grounds are needed to detain on the basis that the individual will not comply with the conditions of temporary release. All reasonable alternatives to detention must be considered before detention is authorised and each case must be considered on its merits (Paragraphs 55.3.1. – 55.3.3 - EIG).
(4) The reasons for detention should be justified and correctly stated (Paragraph 55.6.3 - EIG).
Procedure
The defendant called no evidence and served one witness statement which was of no value since it was provided by a witness who had no personal knowledge of the case and merely exhibited documents and summarised their contents. This summary did not comply with the requirements of the Civil Evidence Act or the CPR regarding hearsay evidence so that the contents of the documents as summarised was not admissible as evidence. Furthermore, the defendant did not disclose many disclosable documents which were potentially helpful to the claimant. All these failings meant that the defendant essentially had no case save by way of comment and inference about the claimant's case.
Findings of fact related to the claimant's detention
The claimant was never, between his arrival in the UK 19 May 2008 and his detention on 19 January 2012, under any obligation to leave the UK and was not capable of being lawfully removed. He was subject to Operation Barnham following his witnessing an affray in which someone he knew was killed and a young Afghan was tried for and convicted of manslaughter as a result of his giving evidence over four days in October 2011 on behalf of the Crown. He was inexplicably served with a Notice of being Liable to Removal even though he was not liable to being removed when this notice was issued and had never been liable to be removed since his arrival on 19 May 2008.
His fresh claim submitted in July 2011 had been refused by the defendant but, unusually, he had been granted the right to appeal this refusal by the defendant because his potential appeal had prospects of success. KLIT was instructed in early January 2012 to place the claimant within Operation Dickens along with 8 other Afghans who had not given prosecution evidence at the trial but who were otherwise, and it would appear, unmeritoriously involved in the death of the victim and in the affray that had led to that death. At the time it received those instructions, KLIT had not been given the go-ahead by Kent Police that the claimant's part in Operation Barnham had ceased and he could be detained and removed. Moreover, he had embarked on an appeal against the dismissal of his fresh claim appeal and was not ARE.
EO Hayes of KLIT was fully aware of his involvement in Operation Barnham and its consequence that he was not able to be detained or removed. The purpose of involving him in Operation Dickens was to ensure that he was placed on a charter flight to Afghanistan that was due to leave on 31 January 2012. These charter flights were the only means of ensuring his removal to Afghanistan and they were few and far between. Thus, if he could not be placed on this particular flight, he would not be able to be removed for some weeks.
The claimant was detained on 19 January 2012. The relevant decision-makers appear to have ignored or not been aware of various significant matters which each should have taken into account in deciding that the claimant should be detained. That detention was maintained in a series of decisions taken subsequently. The first was the 24-hour detention review decision that was taken on 20 January 2012. This was followed by the 3-day detention review decision taken on 22 January 2012, the 7-day review decision taken on 26 January 2012 and the 14-day review decision taken on 2 February 2012. The defendant also failed to release the claimant from detention for a period of 5 days between 3 February 2012 and 8 February 2012 despite the UT decision dated 3 February 2012 that his application for permission to appeal to the UT should be allowed and his substantive appeal should proceed in the UT.
There was evidence that many significant matters had not been taken into account in reaching these decisions and several matters of policy relating to detention were never considered. Moreover, the various anonymous decision-makers taking these various decisions ignored and failed to adhere to EO Hayes's seemingly correct advice that she had posted on GCID on 20 January 2012 that removal directions could not be set for the claimant in the foreseeable future and that the claimant could not be removed on the flight scheduled for departure on 31 January 2012 so he should be removed forthwith from that flight.
Discussion
Introduction. The seeds of difficulty in this case were sown on 14 January 2011 when the claimant witnessed but did not participate in a serious affray involving two gangs of Afghani men that led to the death of his friend and, given his preparedness to work with the police, to his becoming part of Operation Barnham. Soon afterwards, on 19 February 2011, his in-time application for an extension of his discretionary leave to remain was refused. This did not take effect until 19 March 2011 during which time he was an unfortunate casualty of the financial collapse of his solicitors that gave rise to his consequent inability to obtain alternative solicitors and serve a notice of appeal. This in turn led to his being served with a notice of his being liable to be removed on 19 April 2011 despite his being part of Operation Barnham. However, he had no liability to be removed or detained whilst part of Operation Barnham since the police required him to play a prominent part as a significant prosecution witness at a forthcoming major criminal trial in Maidstone Crown Court. Finally, on 20 July 2012, having finally found new solicitors, he served a fresh claim on the defendant which had sufficient credibility to provide him with a right of appeal despite it being refused.
In the light of the claimant's involvement with Operation Barnham, the refusal of his application to extend his discretionary leave to remain, his becoming ARE largely due to the misfortune of his solicitors' financial difficulties and consequent administration and his having been entitled to be present in the UK since his arrival nearly four years previously, it would seem that a more appropriate decision by KCT in April 2011 would have been to grant him six months discretionary leave to remain and not to serve him at that time with a Notice of being Liable to Removal. The particular significance of this decision was that it led the UKBA to direct him to be subject to Operation Dickens before he had been cleared for detention or removal because it had been notified on GCID that he was subject to an IS151A and to temporary admission. No formal notification of his involvement in Operation Barnham was notified so he was treated in January 2012 as someone who could be removed without any prior notification and at short notice.
Decision to detain taken on 19 January 2012. The signed IS91R was not provided in evidence. I find that this document was signed or authorised by SEO Marshall-Redding and that it was identical to the draft dated 12 January 2012 with only the date changed. Thus, the decision-maker took account of the draft which provided as the reason to detain the claimant that his removal was imminent and had previously failed or refused to leave the UK and of the reported views of the three Immigration Officers who were reported to have advised that detention could be justified since the claimant's application for permission to appeal had been refused and that detention could be maintained until the outcome of any further application to the UT was known when his detention could be reconsidered in the light of the situation following that outcome. Indeed, given that the claimant was already subject to an IS151A and given these various views, SEO Marshall-Redding's decision would appear at first blush to be both sustainable and impregnable.
However, the decision is fatally flawed for the following reasons:
(1) It did not consider the claimant's apparent on-going involvement with Operation Banham. There were good reasons for the Police not wanting the claimant released from that Operation despite the forthcoming charter flight. For example, it might well be considered unsafe for him to be removed on the same charter flight as the other 8 Afghanis who had been involved in the incident and subsequent trial since they might be extremely hostile to him. Moreover, the convicted defendant might not have been ARE and there was no evidence that the Police had approved his release from Operation Banham or his detention and immediate removal.
(2) The decision was in part based on the entirely erroneous belief that the claimant had refused or failed to leave the UK previously but, in fact, there had been no such failure or refusal. Moreover, he was not considered to be an abscond risk and there was no objective evidence that he was one.
(3) The claimant was not ARE. All KLIT members who considered his case asked and answered the wrong question when considering the position that he was in given that he was not ARE. All appear to have considered that he could be detained without considering the corollary of that position which was that he could be detained but only if his removal was imminent. Given his position at that time, his removal was not imminent. It was, or should have been, clear that he could not take the charter flight leaving on 31 January 2012 since there was no realistic prospect of his being cleared for removal on 31 January 2012 which was only 12 days away and the next charter flight would not take place for some weeks thereafter.
(4) No thought was given as to whether, in fairness to him in the light of the considerable help he had provided to the police and the prosecution in what must have been trying circumstances, he should be allowed some notice and more time to prepare himself for both his return journey and his homecoming.
(5) He could not have had a hopeless case for obtaining permission since his was one of those rare cases where the defendant had refused representations although accepting that they amounted to a fresh claim and then granting him a right of appeal.
(6) Given that his case was that he in need of protection from persecution, the question of whether he should be returned or detained at that point should have been, but was not, considered with anxious scrutiny.
(7) No consideration appears to have been given as to whether his detention would be longer than was reasonable, whether in any event detention was necessary given it should be used sparingly and whether the presumption in favour of continued temporary release was applicable.
(8) Finally, no – or wholly inadequate – reasons were provided to explain why he was being detained. At best, the only reason that was given to the claimant via his legal representative was that his FtT application for permission to appeal had been refused. If that was the only reason, it was wholly inadequate. If there were other reasons, these should have been provided.
In short, detention was unjustified and unlawful since it contravened several policies set out by the defendant, removal was not imminent and the reasoning was fatally flawed since it took account of erroneous matters and failed to take account of several highly material matters. These errors were compounded by the provision, only informally, of wholly inadequate reasons.
24-hour review decision taken on 20 January 2012. The 24-hour detention review decision that was taken on 20 January 2012 by an anonymous Immigration Officer whose name was redacted and was not printed on the relevant form. The decision has three overriding errors. Firstly, it both ignores and fails to give effect to the views of EO Hayes posted on the GCID on 20 January 2012. EO Hayes demonstrated conclusively that removal directions could not be set until a date then after the last date for setting them had passed if the claimant was to be placed on the flight on 31 January 2012. Secondly, EO Hayes had emailed the flight organiser to inform them to remove the claimant from that flight already. Thirdly, it envisaged referring the claimant to Operation Dickens once he became ARE even though it was impossible for him to be removed on the 31 January 2012 flight and no subsequent flight had been announced and would, in any event, be some weeks after 31 January 2012. It was also both unjustified and unlawful.
The decision also suffers from all the flaws and deficiencies of the initial decision.
3-day detention review decision taken on 22 January 2012. No decision was disclosed. The only evidence of the decision and the reasons for that decision was contained in the GCID which stated in a note dated 22 January 2012 that detention was to be maintained because of the claimant's possible appeal to the UT and his then subsequently becoming ARE. No thought was given to the by then obvious fact that it would not be possible for the claimant to be placed on the flight on 31 January 2012 since he would not become ARE in time. The decision, or more accurately the lack of a decision, was unjustified and unlawful.
7-day review decision taken on 26 January 2012. Two separate reviews appear to have been carried out, both concluded that detention should be maintained. This decision was also unjustified and unlawful.
14-day review decision taken on 2 February 2012. This decision was similar to the 7-day review decision and was similarly unjustified and unlawful.
Failure to release the claimant from detention for a period of 5 days between 3 February 2012 and 8 February 2012. The defendant's explanation for this delay was that it was awaiting a copy of the decision. It provided no explanation to the obvious fact that, whatever the decision, the claimant could not be placed on the flight on 31 January 2012 and that his removal was not in consequence imminent since the next flight was some weeks off. Thus, he should have been released in any event. This period of detention was additionally unlawful on that ground.
Conclusion - Detention
The claimant should not have been detained and the entire period of 21 days during which he was detained is a period for which he is entitled to damages for unlawful detention and false imprisonment.
Damages
The claimant cited a number of relevant cases from which the following principles can be drawn:
(1) The detention was unlawful from the outset with a sum of £4975 awarded for the first day, allowing for inflation since the original decision was promulgated in 1998[3].
(2) It would not be surprising if a detention of less than three days but more than two days would lead to an award, allowing for inflation since this judicial view was promulgated in 2006, of £6,000[4].
(3) A basic award for 24 days of unlawful detention of the spouse of an EEA national was set at £14,420, allowing for inflation since the original decision was promulgated in 2010[5].
(4) A global award should be made which awards an amount which, broadly, tapers so as to reduce the notional daily rate awarded the longer the unlawful detention lasts[6].
The claimant was, from the outset in this case very conscious that his detention was unlawful and the shock clearly profoundly affected him. The claimant's counsel submitted that, taking the authorities and the claimant's factual situation into account, that an award of £15,000 would be appropriate. I consider that to be marginally too high and I award £14,250.
Personal injury
The claimant was profoundly affected by his detention as his own evidence shows. He was examined by a psychiatrist who concluded that his pre-detention health was normal other than occasional nightmares and mood swings. However, he was clearly deeply shocked by his initial detention with symptoms of anxiety and fear of both detention and deportation and displayed clear signs of Adjustment Disorder with anxiety features as classified under the DSM in 5 Code 309.24. The report advised that his symptoms would place him approximately in the middle of the appropriate award range. The defendant neither called expert evidence nor challenged the claimant's expert evidence.
The appropriate award range published by the Judicial College Guidelines is such that the type of injury described by the claimant's psychiatrist, whose evidence I accept, warrants an award of £3,000.
Aggravated damages
In this case, the defendant repeatedly failed to address the legal constraints to detaining the claimant, persistently failed to explain why it was detaining him despite his on-going appeal process and failed to address his status as a prosecution witness, his Barnham status or the fact that the first available charter flight was several weeks ahead since he could not be placed on the flight due on 31 January 2012. Furthermore, the defendant did not serve any admissible evidence in either witness statement or documentary form and its records of the reasons for detention and continued detention were sparsely and wholly inadequately documented.
In consequence, I award a sum of £2,000 for aggravated damages.
Overall conclusion
The claimant's claim succeeds. He is awarded a total of £19,250 damages. To this sum, a 10% uplift should be added for all heads of damage following Simmons v Castle[7]
Note 1 [2011] UKSC 12, 1 AC 245. [Back]
Note 2 Enforcement Instructions and Guidance (“EIG”). [Back]
Note 3 Thompson v Commissioner of Police of the Metropolis [1998] QB 498, CA. [Back]
Note 4 R(E) v SSHD [2006] EWHC 2500(Amin), Mitting J. [Back]
Note 5 MK (Algeria) v SSHD [2010] EWC Civ 980, Laws LJ, CA. [Back]
Note 6 Ibid., 515 D - F [Back]
Note 7 Practice Note [2012] EWCA Civ 1288, [2013] 1 WLR 1239. [Back]
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Mr Justice Warby:
Introduction
This is an application for the Court's approval of an agreed settlement of a claim for personal injuries arising from clinical negligence in 2001.
The claimant is a woman of 28, born in December 1986. The defendant is the NHS Trust responsible for the very well-known children's hospital at Great Ormond Street, London (GOS).
The parties have agreed on the sums that should be paid, and on the structure which the settlement should take, but the settlement requires the court's approval. That is because, and only because, the claimant is a protected party. She is protected because, although she is an adult, she lacks capacity to conduct the proceedings. For that reason she has a litigation friend, who is her mother. For the same reason, the rules provide that no settlement shall be valid without the court's approval.
Reporting restrictions and anonymity
There is a standard practice in cases of this kind, which come before the court only for its approval and not for any other decision. The practice is to hold the hearing in public so that all the normally reportable details are available for publication; but to make an order prohibiting the identification of the claimant and her parents. This is because the public interest in open justice in cases of this kind is not strong enough to justify the degree of intrusion into privacy which identification would cause: see JX MX v Dartford & Gravesham NHS Trust [2015] EWCA Civ 96.
Mr Hough for the claimant invited me to follow that practice in this case, and I have done so. Before doing so I invited submissions. The defendant made no representations. The media were present at the hearing and I heard representations on behalf of the Press Association. It was pointed out that no notice had been given of an application for reporting restrictions. It was also said that it is difficult for the media to formulate meaningful arguments in the absence of any significant amount of information about the case, which might, for instance, relate to a public figure. These are issues that may deserve consideration for the future.
In this case however the claimant and her family are ordinary private individuals and I am satisfied that there is no such public interest in their identification as would override the general rule in favour of anonymity. I make an order prohibiting the identification of the claimant and her parents as being the claimant and the parents of the claimant, in this case. The claimant is to be referred to as TUV. Her mother and litigation friend is to be referred to as SIV. The final form of the order remains to be settled but in response to concerns expressed by the Press Association I have made it clear that the prohibition on identification is to be qualified so that it will not be a breach to report anything contained in this public judgment.
The facts
The claimant was born on 17 December 1989. She had already suffered substantial injury before her birth. She was one of twins. Her twin died in the womb, when the two were about 29 weeks gestation. This caused circulatory disturbance to the claimant, who was born at about 37 weeks gestation with cerebral palsy.
The claimant was later described as suffering from spastic quadriplegia with a strong dystonic element. She was wheelchair dependent, with significant and persistent movement disorder, and intermittent spasms, which were painful to her and her family. She had no speech, though she was able to communicate with her eyes, using a computer. None of this was the fault of the defendant, and indeed it is not attributable to any negligence by anyone.
The claim arises from events nearly 12 years later, in late 2001. In October 2001 the claimant became unwell, and she was taken to Northwick Park Hospital with suspected fitting. From there, on 3 December 2001, she was taken to GOS for an EEG, accompanied by her parents. About 2 hours after her arrival she was in a state described by a technician as "unrousable but breathing".
The technician brought in two consultants, but within 5-10 minutes of their arrival the claimant suffered a heart attack. The cardiac arrest team arrived some minutes later. The result of this sequence of events was that the claimant suffered significant brain damage.
The claim
The claim is that upon a patient being diagnosed as "unrousable" it was mandatory for the consultants to give oxygen and suction and, at the same time, to make a crash call. This should have happened within 1 minute. If oxygen and suction failed, the consultants should attempt bag and mask ventilation whilst awaiting the crash team. The crash team should have arrived within 3-5 minutes of the call, and on arrival should have intubated the patient.
In fact, it was impossible for the doctors to put in place the appropriate steps at the appropriate time. If the sequence of actions I have described is to be undertaken in an EEG department, the department needs to have access to an oxygen gas supply, and a crash trolley with suitable emergency resuscitation equipment. In this case the equipment was not available to the doctors.
An audit stated "Lack of O2 and suction in area where child was. No trolley for O2 cylinder found behind door of another room: no portable suction location. No face shields." It appears that attempts were made to borrow the essential equipment from nearby wards but there was delay.
Evidently, the cause of the heart attack was that the claimant had inhaled gastric contents. Swift administration of oxygen and suction might have prevented the heart attack. It is highly probable that it would have prevented the brain damage.
The fact that the necessary equipment was not available was an institutional failure of the defendant, which admitted liability and causation in pre-action correspondence.
The settlement
The details of the agreed settlement will be available in the formal order that has been agreed, and which I have approved, which will be a public document. In outline, however, it includes:-
(1) agreed sums for pain, suffering and loss of amenity, for past losses, and future losses, the majority of which will be paid by way of a lump sum;
(2) periodical payments to cover care and case management for the future.
Approval
In deciding whether to approve a settlement the court's purposes are to safeguard the interests of protected parties; to ensure that defendants are able to obtain a valid discharge from such a claim; to make sure that money recovered is properly looked after and wisely applied; and to protection the interests of all dependants.
I have had the benefit of reading a detailed and careful advice from Counsel for the claimant, and a draft order. I have approved the figures and the form of the draft order, which follows the model order which is recommended in these cases. I am satisfied that the settlement figures, and the structure of the settlement, are such as best meet the claimant's needs. I should make some observations.
First, as I have mentioned, the draft order includes an order for periodical payments under s 2 of the Damages Act 1996. When deciding whether to make such an order I have to be satisfied, first of all, that the parties have considered the relative advantages of a lump sum or periodical payments order. I am quite satisfied that they have done so.
I also have to consider all the circumstances of the case, and in particular whether this is the form of award which best meets the claimant's needs: CPR 41.7. I am required to have regard to the scale of the annual payments, and to the preferences of the parties: PD 41B para 1.
The parties are clearly right to have opted for a periodical payments order in this case. Such an order has two significant advantages over an order for a lump sum payment. The first is that it ensures that there will be security for the necessary payments for care, throughout the claimant's life. Secondly, a capital sum would be calculated on the assumption of a 2.5% annual return, and that is a level of return that is not available at present and may not be available for a considerable time to come.
Secondly, I note that the fact that this claimant was already injured when the brain damage took place in 2001 raised particular difficulties for the parties. It is common ground that as a result of the cardiac arrest and consequent damage, the claimant's condition deteriorated significantly. Before the cardiac arrest, and despite her ante-natal injuries, she was a lively and evidently intelligent young woman, making progress – no doubt as a result of the efforts of her parents. It is now very difficult to communicate with her. She has significant visual impairment and is registered blind. She now has no voluntary movement of her limbs. She cannot take food orally, and is liable to cough and choke. These are just examples of changes for the worse following the events of 2001.
There is room for debate about the right approach in law to compensating a claimant who is already injured at the time of the events that lead to the claim, and which cause additional harm: see Reaney v University Hospital of North Staffordshire Trust [2014] EWHC 3016 (QB) [70]-[75], and Murrell v Healy [2001] EWCA Civ 486 per Waller LJ. The issue is an important one. In this action the parties have been able to reach a compromise position which, I am satisfied, is a reasonable one, and ensures that the claimant is provided with sufficient funds to meet her reasonable needs, without having to test the legal issue.
That compromise position involves payments by the defendant which will allow a significant element of privately funded care and case management. In addition, the compromise arrived at envisages continued care from the claimant's parents, with an element of state provision through the benefit system. This is a reasonable arrangement, and the parties' representatives are to be congratulated on achieving this beneficial settlement.
Finally, I must mention the family. The claimant's parents have devoted an enormous amount of love and care to looking after their injured child for the past 28 years. Their work has been rightly described by Ms Bowron QC for the defendant as "extraordinary". Particular tribute is due to the claimant's mother. She has overcome the initial trauma in 1986 of losing one twin and finding the other severely impaired, followed by what must have been the dreadful shock of the brain injury of 2001. This settlement is not the end for the family, but it is the end of one phase and beginning of a new one. The whole family has the court's best wishes for the future.
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MR JUSTICE JAY:
Introduction
In this action Mr Bartholomew Umeyor ("the Claimant") claims damages for defamation against Mr Felix Nwakamma ("the Defendant") based on an allegedly libellous publication made on or about 14th March 2014.
The background circumstances to the claim are that at all material times the parties were members of Mbaise Union UK ("the Union"), an unincorporated association of 50-60 members dedicated to the interests and welfare of the Mbaise community in what I take to be the London area (I understand that there are other Mbaise unions in this country). Between 2008 and 27th October 2013 the Claimant was the President of the Union, and since 2010 the Defendant has been its Treasurer. In April 2012 the Claimant travelled to Mbaise State in Eastern Nigeria to support a medical mission run by Mbaise Union USA. He had been given £2,500 by the Union to donate to its American counterpart. A dispute arose when the Claimant allegedly failed to provide adequate documentary proof of the payment of the donation. The Claimant was removed by the Union as its President for reasons ostensibly unrelated to that dispute. He then petitioned the Union against his removal, seeking reinstatement. Some months later, the Defendant replied to that petition, and the alleged defamation arises in that context.
The Defamation Act 2013 applies to these proceedings. In my view, the law governing this case is relatively straightforward and uncontroversial, but there are a number of factual disputes which I need to resolve. Given the level of animosity between the main protagonists to these proceedings, these disputes were bitterly contested but not all of them are directly relevant to the issues I have to resolve.
The first day of the trial was dedicated to resolving a disclosure issue and disputes concerning the content and ambit of the pleadings. The disclosure issue arose extremely late in the day, and required resolution by me, but it is unfortunate that the pleading points were not taken at the pre-trial review which took place before HHJ Moloney QC in July 2015. In advance of that hearing, he had helpfully prepared a detailed list of the issues he believed arose on the parties' respective pleaded cases. However, it is clear from Mr Mohammed Bashir's skeleton argument for this trial that the Claimant's position was that the Defence failed to comply with PD53 and did not properly lay the ground for many of the defences sought to be relied on in Mr Darryl Balroop's skeleton argument.
I ruled against Mr Bashir on this issue. The pleadings in this case are far from ideal, neither party having gone to Counsel to set out their respective positions. Indeed, the Defence was prepared by the Defendant himself, without it seems any formal legal input, and Counsel (including Mr Balroop's predecessor) did not see fit to apply to amend it. Given, however, that the evidence adduced by both parties covers the entirety of the ground, and given too that no objection was taken to HHJ Moloney QC's written characterisation of the issues arising, I decided to follow an approach which was not predicated on overly strict compliance with the terms of the Practice Direction. The defences relied on, namely truth, honest opinion and qualified privilege, emerge with just about sufficient clarity from the Defendant's home-made document. I also permitted the Claimant to allege malice whereas that too has not been averred with crystalline precision.
I should add that after the close of the hearing, I received an Application Notice filed by the Reverend Innocent Ibe, described as a public interest intervener. He asked me to consider certain correspondence, and to hear him orally. I recognise Rev. Ibe from a photograph he has supplied as being one of the individuals sitting behind the Defendant in court. He has no standing in these proceedings, I refuse his application, and I propose to ignore the evidence he has submitted.
Before turning to the issues, and resolving the evidential conflicts which have arisen, I need to set the scene more fully.
Essential Factual Background
At a General Meeting of the Union held in Camden Street on 22nd January 2012, consideration was given to the possibility of giving financial support to a medical mission in Mbaise State, Nigeria, being organised by Mbaise Union USA. The Claimant said that a decision should be deferred to the next meeting.
At the next General Meeting of the Union held on 26th February 2012, the Claimant informed members that it would be difficult to support the medical mission by providing anti-malarial medicines. After some discussion about the amount of the proposed donation and the need properly to account for it, it was unanimously agreed by the Union to give the Claimant the sum of £2,500 for the medical mission. The Claimant had told the meeting that "members should be able to trust the President of the Union and anyone in Mbaise between 16th and 21st April 2012 could check what was happening".
At the next General Meeting of the Union held on 25th March 2012 it was agreed that Mrs Hilda Chinyere Amadi, a trained nurse, would accompany the Claimant. Probably on the next day, the Claimant was given a cheque drawn by the Union in his favour in the sum of £2,500, and this was paid into his personal account at HSBC, Clapham Junction.
The Claimant told me that he withdrew the sum of £2,500 in cash from his bank on 4th April 2012, and went to the premises of Dolphin Global Services Ltd in Tower Bridge Street. Dolphin was his foreign exchange dealer and the staff there knew him well. The clerk who dealt with him on that occasion was a man named Matthew. The Money Transfer document records the following information:
"AMOUNT TRANSFER (£): £2420 [i.e. £2,500 less £80 commission and bank charges]
AMOUNT IN NAIRA: 612,260 [at a rate of exchange of 253 Naira/Sterling]
BENEFICIARY IDENTIFICATION: Passport
SENDER FULL NAME: Mbaise Union (UK)
BENEFICIARY FULL NAME: Barry Grandom [mobile phone number given]
BENEFICIARY PICKUP POINT: FINBANK
SENDER'S SIGNATURE: [NONE]
DATE: 19/4/11"
The claimant told me that the money was being transferred to his own bank account at Finbank, Mbaise State. Although no relevant information is contained on the Money Transfer document, Dolphin had all the details on their computer system. "Barry" is a contraction of Bartholomew, but "Grandom" is not the Claimant's pseudonym. However, the mobile phone number set out on the document is one of the Claimant's Nigerian mobile phones. The date set out on the form was an error, both as to the date in the month, and the year. It is not altogether clear to me why the sender was described as "Mbaise Union (UK)" when, as the Claimant says at paragraph 13 of his witness statement, he was making a personal transaction. The Claimant said that he was on his mobile phone when the transaction was being conducted, and that he did not notice these mistakes. Indeed, in his witness statement the Claimant perpetuated one of these mistakes by asserting that the document was in fact dated 4th April 2012.
According to his witness statement, the Claimant travelled to Nigeria shortly after sending the money, and upon arrival he picked it up from Finbank in cash. The precise chronology is not wholly clear, because the Claimant said in evidence that he had the money on "Friday 15th April 2012". In fact, the mission started on Monday 16th and ended at 4pm on Friday 20th April. Ultimately, though, little turns on this confusion as to the dates. It seems clear (assuming that I come to accept this part of his account) that the Claimant was holding the money in cash for a number of days, because the Americans did not want it at that stage. I was not told where the money was placed for safekeeping, but I was informed about concerns in Nigeria about robbery.
The Claimant told me that a day before the end of the mission the US team, led by Mr Chamberlin, informed him that the donation was needed to help settle the mission's outstanding bill with Bench Mark Hotel. The Claimant was asked to pay the money into the hotel's account at Finbank, and that he should supply the payment slip as proof.
On 20th April 2012 – assuming that I can take the document at its face value - the sum of 612,260 Naira was paid to the account of Bench Mark Hotel Ltd at Finbank. It appears that the bank generated two copies of the deposit slip: the yellow copy was retained by the bank; the white copy went to the depositor. A photocopy of the white copy is available. It describes the depositor as the Claimant, specifies the amount of the deposit, and – just about legibly – identifies it as a cash deposit. A different mobile phone number is given for the Claimant (he told me that he uses at least two mobile phones in Nigeria). The deposit slip also possesses a bank stamp and a teller's signature.
The Claimant told me that he gave the deposit slip to Mr Chamberlin in the presence of Mrs Amadi. He has no direct knowledge of what happened to it subsequently.
On my understanding of his evidence, the Claimant did not return to the UK until July 2012. He said that he gave the original Money Transfer document and a copy of the deposit slip to the Financial Secretary of the Union, Mr Paulinus Ihenakaram. This was on the same occasion that the Claimant gave an oral account of the medical mission to the General Meeting of the Union. There is no dispute about this evidence, although I note that the relevant minutes of the meeting are not available.
It was put to the Defendant that he must have received these two documents from the Financial Secretary shortly after July 2012. The Defendant disputed this, and although his evidence was not ideally clear hereabouts I accept his account that it was not until much later that he came to read, and properly to analyse, the Money Transfer document and the copy of the deposit slip. Mr Ihenakaram's witness statement also suggests that it was not until "a later date" (unspecified) that the Defendant inspected these documents.
On 11th February 2013 the Defendant emailed the Claimant requesting a written breakdown of the sum of £2,500 including any receipt. His email stated that he could not remember if the Claimant had already provided a note. He said that he knew "it was a bulk expenditure so it will just be a receipt or note for that purpose". On 21st February 2013 the Claimant emailed the Defendant stating that on the day he gave his report of the medical mission, he handed the Defendant the two documents to which I have already referred. In fact, it is common ground in these proceedings that the documents were handed to the Financial Secretary. The Claimant did not offer to provide anything else.
On 16th March 2013 there was a meeting of the Executive Committee attended by the Claimant (as President), Mr Ihenakaram (as Financial Secretary), the Defendant (as Treasurer), the Publicity Secretary (unnamed), and (possibly) others. Only extracts of the minutes are available. The Defendant raised a number of issues regarding the Claimant's documentation, and stated that he expected a receipt from the American counterparts. The Defendant also said that the purpose of the donation was not to pay hotel bills. The Claimant said that "he would be happy to get evidence for what happened to the money".
The Claimant was pressed in cross-examination as to what occurred at this meeting. At one stage, he agreed that valid queries were being raised, and that he agreed to obtain more evidence. He also agreed with the proposition that the receipts were not genuine was "fair comment". However, he denied that the receipts were forged. At another stage, the Claimant said that his interlocutors had not made a reasonable request for further information, and that he wanted to see if they had contrary evidence. The Claimant also said that in March 2013 (and, therefore, presumably on the occasion of or shortly after this meeting) he provided a copy of a report of the medical mission written by Mbaise USA Inc and available on its website. He did not specify to whom.
At all events, the Claimant did not provide any further evidence relating to the £2,500 donation. He was in Nigeria between April and November 2013. On 27th October 2013 the General Meeting removed him as President of the Union on account of his extended absence. He was replaced by Mr Gerry O'Nwere.
On 17th November 2013 the Defendant, who was still Treasurer of the Union, emailed the Trustees – who were also members of the Executive Committee – raising 17 separate concerns about the receipts the Claimant had provided to the Financial Secretary. The Defendant concluded his email with the following comment:
"It is therefore not specified or clear who benefitted from the alleged deposit in an untidy ripped bank teller [sic], no receipts from hotel, nothing about the receipts given were authentic and neither did the President of Mbaise Union make effort to elaborate on these matters. An officer with proper regard would have speedily rendered account even whilst in Nigeria and not wait 3-4 months later. I therefore recommend that this account is rejected and [the Claimant] is mandated to render proper account or refund the Union".
At 13:07 on Sunday 23rd November 2013 the Claimant petitioned all the members of the Union (or, at least, those members on email) seeking his reinstatement as President. He claimed that his removal was unconstitutional, and was motivated by personal animosity on the part of the Defendant. The Petition included a personal attack against the Defendant, claiming that "if not properly contained" his conduct had "a tendency to destroy any good Union". In his evidence in chief, the Claimant asserted that the Petition was emailed solely to the President and the Secretary, but he later had to accept that it was more widely circulated.
At 14.22 on the same day (i.e. some 75 minutes later), the Defendant emailed all members of the Union with the identical concerns about the Claimant's documentation which he had previously only shared with the Trustees.
The timing appears less than coincidental, but I did not understand Mr Bashir to be suggesting that the email to members was only sent in retaliation for the Claimant's removal petition. Furthermore, I do not believe that this was so. The Defendant only sent the email to members after he had run it past the Trustees, and the timing (in the sense of its close temporal juxtaposition with the sending of the Claimant's Petition) was fortuitous.
The Claimant told me that after he received the Defendant's email to the members on 23rd November he telephoned the President. He said that he explained to the President that these issues had been answered to everyone's satisfaction on 16th March 2013; and that had they been dissatisfied, the Executive Committee should have brought the matter to the attention of the General Meeting. The Defendant also said that during the course of this telephone conversation with the President he stated that he had explained to the Executive Committee who "Barry Grandom" was (i.e. it was himself, or an error), and that he was asked by the Union's US counterparts to make a contribution towards the hotel bill.
Mr O'Nwere gave evidence and was not asked about this conversation, nor is it covered in his witness statement. In the circumstances, I am unwilling to make a finding of fact as to whether such a conversation took place on the stated date. However, I do find that, if there was such a conversation, its content is unlikely to have been as stated by the Claimant. At the very least, the extracted minutes of the Executive Committee meeting held on 16th March 2013 do not establish that the Defendant and others were satisfied with the Claimant's explanations, such as they were. On the other hand, the Claimant may well be correct in his assertion that, if the Executive Committee were dissatisfied, the next step – in constitutional terms – was to involve the "General House", i.e. the General Meeting.
On 26th January 2014 the Executive Committee met. The minutes of the meeting were typed up on headed notepaper giving an address in St Michael's Close, Camden Town. This was the address of a previous General Secretary, and it is accepted by the Defendant that the committee did not in fact meet at St Martin's Close. The Claimant maintained in evidence that the authenticity of these minutes is highly questionable, and he was supported to some extent by Mr Christian Obasi who also doubted the genuineness of the minutes of a later meeting held on 4th July 2014. However, I am satisfied that these meetings took place, albeit not at the stated address, and conclude that the General Secretary appears to have used out-of-date headed paper. The minutes may not be entirely accurate, but I cannot accept that they were forged. If they had been, that would surely have been done in a manner which provided much better support for the Defendant's case than is in fact the position.
The minutes are not altogether easy to interpret. Although the Defendant was robustly maintaining his position that the Claimant had failed to give a proper account, others were saying that the matter was now closed, and that Members had made their decision. It is unclear what decision was reached at the conclusion of the discussion about this agenda item. The minutes conclude with the Defendant's statement that they should continue to press the Claimant for the accounts and receipts, failing the provision of which the issue should go back to the Members. According to the Further Information given by the Defendant in these proceedings, the Claimant's documents were in fact "rejected" by the Executive Committee at this meeting. In my judgment, the minutes do not bear out this claim.
Nothing then happened for two months until March 2014. By that stage, this issue had been simmering for the better part of two years.
The Defendant's evidence was that on 13th March 2014 he emailed a draft response to the Claimant's Petition to all Members of the Executive Committee who held an email account. His evidence in re-examination was that the President replied by email and said it was "excellent". The Financial Secretary telephoned and gave his support. On this basis, the Defendant said that he thought that he would and should send the response to "relevant people". He did so – to 15 Members, by email; and to a selected number of elders of the Union, by printed copy.
A copy of the President's email was not disclosed to the Claimant's solicitors until 8th October 2015, and at the outset of the hearing I ruled that the Defendant could not rely on it in evidence. In the event, had the email been admitted in evidence I highly doubt whether it would have made any difference to the outcome of this case.
Mr Gerry O'Nwere was called by the Defendant to give evidence. According to his witness statement, his evidence was "in support of the Defendant's court case", but in the result this proved not to be so. On my understanding of his oral evidence (the issue, like so many other issues in this case, is not mentioned in any witness statement), he had a conversation with the Defendant after seeing the latter's draft reply. Whether this was the only communication which took place, or was in addition to an email, is unclear, but nothing turns on that. I accept Mr O'Nwere's evidence as to what occurred.
The gist of Mr O'Nwere's advice to the Defendant was that he had every right, in his capacity as Member of the Union, to send a reply to the Claimant's Petition, particularly in the circumstances where two pages of it contained a personal attack. The Defendant was responding in his own capacity as "Member and Treasurer", as Mr O'Nwere put it. Mr O'Nwere was well aware that the Defendant would copy Members into his reply, because this was "obvious". At no stage during his cross- and re-examination did Mr O'Nwere contend that the Executive Committee authorised the Defendant to reply to the Petition on their behalf, and there is no evidence to that effect. Even the Defendant's oral evidence did not go that far.
The Defendant's reply, containing the allegedly defamatory statements, was sent to the Claimant and to the other individuals the Defendant told me about in oral evidence, probably on 14th March 2014. There is no direct evidence as to the date, and the Defendant's email to the Claimant (copied into the 15 other Members) has not been disclosed.
The relevant parts of the Defendant's reply are as follows:
"The dodgy receipts and account of £2,500 medical mission expenses is a serious allegation that you should be defending rather than your removal from office (Your [sic] were not paid and you did not lose any benefits although the use of Mbaise platform to further your personal and political ambitions may have suffered setbacks.) [in italics in original]
…
I have been compelled to write in response to your petition in which you dedicated about two pages of criticism, twaddle and lies against me. I was hoping that this matter would have gone away but your verbal rhetoric in the last meeting has necessitated my written response. I have highlighted your allegations in bold/italics with my responses underneath.
…
10. Mbaise Union UK is too precious to most of us here especially our founding fathers to whom I am making my humble request to advice [sic] Sir Felix Nwakama [sic] to let the Union progress
Finally: you were given £2,500 by the Union to go on medical mission 2012. Your remittance receipt was a forgery and read 2011; your bank teller for payment of over 612,000 naira was a forgery the Bank Stamp not legible and no hotel bills or receipts were submitted. I challenge you to prove otherwise. The Executive rejected your accounts submission because all receipts were forged. What do you have to say Mr Bartholomew Umeyor (I am not sure why you address yourself as Sir (or me)? Were you knighted by the Queen?
…
If you are a true and transparent leader; why did you give us a copy (not original) 2011 receipt for 2012 money transfer? Why did you not obtain acknowledgement receipt from the Hotel in Owerri evidencing that you paid into their account? Why did you use the copy of a teller to pay money into an account stamp was not even visible? Everyone who remits over two thousand pounds must give their name. Mr Umeyor; so who remitted the money you charged Mbaise £80 for with a dude [sic] receipt?"
A General Meeting of the Association took place on 23rd March 2014. Paragraph 4.2 of the minutes reads as follows:
"The Treasurer (TT) said he was answering the allegations against him in the reply he had sent to [the Claimant]. The President said the Executive was not part of the Reply. The Vice-President said it was right to query the use by the Treasurer of the Union's documents; she assured Members that the Executive did not authorise the reply."
These minutes were debated and scrutinised in evidence. In my judgment, they may bear only one sensible interpretation, namely that the Defendant's reply was not authorised by the Executive. As I have pointed out, Mr O'Nwere agreed with that interpretation.
What happened subsequently is of no real relevance to the issues I have to decide. I do note that attempts were made within the Union to settle this litigation.
Synopsis of the Issues Arising
Despite the greater breadth of the Particulars of Claim, in Opening his case to me Mr Bashir confined his client's complaint to that section of the Defendant's reply which asserted that the documents he had provided were forgeries. In my view, Mr Bashir's approach was entirely realistic, because the defence of truth would have succeeded in relation to the assertion that the Claimant had provided "dodgy receipts" (in the context of this being a serious allegation which he should have been defending).
The issues arising in this respect are (i) the defamatory meaning of the words complained of, and (ii) whether the publication caused or was likely to cause serious harm to the Claimant's reputation.
In the event that the Claimant surmounts these hurdles, the various defences arise for consideration. I shall deal with these in what I consider to be their logical and sensible sequence.
The first defence is that of truth. The burden is on the Defendant to prove that the imputation conveyed by the statement complained of is substantially true.
The second defence is that of honest opinion. Under section 3 of the Defamation Act 2013, three conditions must be satisfied, and the burden of proof in relation to each of them resides on the Defendant. Thus, for the defence of honest opinion to succeed, the Defendant must establish that: (i) the statement complained of was a matter of opinion; (ii) the statement complained of indicated, whether in general or in specific terms, the basis of the opinion, and (iii) an honest person could have held the opinion on the basis of any fact which existed at the time of publication. The defence may be defeated if the Claimant shows that the Defendant did not hold the opinion.
The third defence is that of qualified privilege. Here, the principal issues are whether the words were published on an occasion of common law qualified privilege – based on the duty of the Defendant as Treasurer to publish them, or pursuant to the Executive Committee's express or implied authorisation. As necessary the Claimant seeks to rebut this defence by alleging malice.
Subject to all of the above, issues arise as to quantification of general damages for damage to reputation and consequent injury to feelings.
Meaning, Imputation and Serious Harm
During the course of the trial, no doubt laying the ground for his extremely helpful closing argument, Mr Balroop drew attention to paragraph 11.13 of Gatley on Libel and Slander, 12th Edition, and the decision of the Court of Appeal in Chase v NGN [2002] EWCA Civ 1772. In that case, three distinct levels of meaning were offered: (i) that the Claimant is guilty of some impugned behaviour; (ii) that there are grounds to suspect that the Claimant is guilty of the impugned behaviour; and (iii) that there are grounds for investigating whether the Claimant is guilty of the impugned behaviour.
Mr Balroop adhered to the submission that the words complained of fall into Chase level 2: in other words, viewing them in context, all that the Defendant was saying was that there are reasonable grounds to suspect that the Claimant forged these two documents, or had submitted them knowing them to have been forged.
I agree that in all the pre-publication communications, if I may formulate the matter in that way, the Defendant did not go so far as to allege that these were forged documents. Indeed, elsewhere in the impugned publication the Defendant adhered to that more restrained level of utterance. Although the words complained of must be read in context, their clear and obvious meaning cannot be diluted or attenuated by the use of more appropriate language deployed elsewhere – or, at the very least, it cannot in the circumstances of the present case.
In my judgment, the Defendant was quite clearly stating that the Claimant had submitted documents which he had either forged himself or had procured others to forge. The imputation was that the Claimant had done so dishonestly, with a view to personal gain.
I am also satisfied that the words complained of were likely at the very least to cause the Claimant serious harm to his reputation. An allegation of forgery is almost always serious, and is particularly so in the context of a man who recently held the highest office in the Union. Publishing the allegation to the 15 Members and to the selected elders was bound to lower the Claimant's esteem and reputation in their eyes; and was also bound to do so to an extent which was serious. I cannot accept Mr Balroop's sterling attempts to persuade me to a contrary view. I should add that in a community welfare organisation of this sort, personal reputation and integrity will be regarded by all as a precious commodity.
Truth
The burden is on the Defendant to prove that the impugned documents are forgeries. In my judgment, he could discharge that burden by proving that the documents are not genuine in the sense that they fail to vouch (i) the transfer of 612,260 Naira from the UK to the Claimant's bank in Mbaise State, Nigeria in early April 2012; and/or (ii) the payment by the Claimant of the sum of 612,260 Naira to the account of Bench Mark Hotel Ltd on 20th April 2012. If, having considered all the available evidence, drawing inferences where appropriate, I were to conclude that either or both of these events did not occur (mindful always that the burden is on the Defendant), I would be concluding that one or both of the documents were not genuine.
My assessment of the parties as witnesses is as follows. Both men gave somewhat wordy and argumentative answers to many of Counsel's questions. In the Defendant's case, I felt that this was partly due to the fact that Mr Bashir's cross-examination style does not always eschew an aggressive tenor, although I accept that Counsel was seeking to prove malice. The Claimant's evidence was not always accurate: he was wrong, for example, about the number of Members to whom he sent his Petition, and he was also incorrect as to the content of any conversation he might have had with Mr O'Nwere in March 2013. During the course of his cross-examination, I felt that, at times, he was not giving particularly convincing answers to Mr Balroop's questions about the impugned documentation. On the other hand, at that stage, I was unsure in my mind as to whether my instinctive response to his evidence was based on properly-formulated doubts about its substance, or was a reaction to something else, namely that the Claimant was evincing such outrage about the allegations being made against him, that he was not coming across as wholly reliable. As I shall be making clear, my opinions solidified during the course of my questioning of the Claimant at the close of the parties' examinations.
In my view, the Defendant was generally speaking a sound, if rather dogmatic and opinionated, witness who only became ruffled when he was asked about the circumstances surrounding the publication of the impugned documents. This was because, when confronted with the facts, the Defendant well knew that he had gone too far, and had not been authorised by the Executive Committee to call the Claimant a forger. To the extent that the Defendant sought to persuade me that he acted with the authority of the Executive Committee, I reject his evidence.
Before addressing the core documentation, I need to touch on less critical matters. There was some discussion as to whether the Claimant acted beyond his brief: if that is what indeed occurred, by purporting to settle the American's hotel bill rather than by contributing towards the cost of medication. I have already pointed out that it was not agreed by the General Meeting that the donation was specifically earmarked for medicines, in particular anti-malarial drugs, and there was no reason why it should have been. The Union was supporting their American counterparts who had a global budget for the whole venture. If the Union made a contribution towards medicines, then the hotel bill would have needed to be discharged by other means; and vice-versa. It was unnecessary to be precise as to exactly how the £2,500 would or might be used, as Mr Osundu made clear, and I accept.
The Defendant disputed the genuineness of the Americans' "Mbaise Medical Mission 2012 Report" which the Claimant included in the trial bundle. On the last day of the trial, I ruled that the Claimant had included this document in breach of his disclosure obligations and in default of identifying to the Defendant precisely what it was, or purported to be. Mr Bashir had not referred to this report in opening, and no oral evidence relating to it was given until the second day of the trial, namely the day before my ruling. As I have already said, the Claimant told me that this document was on the website of Mbaise Union USA. Mr Osundu also told me that this had been so, although he doubted that it was still there. The report stated that the Claimant and Mrs Amadi had attended the mission and had made a financial contribution, which was not specified.
The Defendant's solicitor then went online and discovered the existence of a different report on the website of Mbaise USA Inc. There can be no doubt but that this is the correct website because on the home page we may see a photograph of the President, Mr Osundu. The report of the 2012 medical mission is on headed paper, is much shorter, and refers more generally than the version in the trial bundle to donations from Mbaise organisations in the United Kingdom and elsewhere.
Given the circumstances surrounding its inclusion in the trial bundle, I gave the Defendant permission to rely on the report currently available on the website of Mbaise USA Inc. However, this ruling has meant, as I was well aware at the time, that relevant witnesses could not deal with the current version.
I entirely agree that the current report is not the same as the report in the trial bundle. However, there is nothing in either report which contradicts the other. Indeed, both reports are consistent with the Claimant's case, although the version in the trial bundle is more strongly supportive of it. Having reflected carefully on the issue, I cannot conclude on the available evidence that the report in the trial bundle is not genuine. Mr Osundu could not be cross-examined about the version currently available on the website, but he did tell me that the version in the trial bundle was, in effect, a Mbaise Union USA document. Had it been a forgery, it probably would have been a much better one, and it probably would have contained some mistakes, and there appear to be none.
On the other hand, I also cannot place any reliance on the version included in the trial bundle in support of the Claimant's case. I say that for two reasons. First, it was remiss of the Claimant to fail to obtain more cogent evidence from the USA, both documentary and oral, vouching the £2,500 donation. Mr Osundu's evidence on the key issue was all hearsay. The Claimant told the Executive Committee that he would obtain further evidence from the USA, and he failed to do so. Such evidence would have included accounts and receipts evidencing the use of the £2,500 donation. Secondly, knowing that there is another, different report in existence, it would be wrong for me to place any reliance on the version in the trial bundle, which is hearsay evidence in any event. The Claimant is at fault in failing to give proper disclosure of the version in the trial bundle, which failure has had the consequence that it has not been properly tested in cross-examination. Furthermore, my conclusion that this version has not been shown to be a forgery is not tantamount to a conclusion that I am satisfied on the balance of probabilities that its contents are true. This is one of those rare instances where I am entitled to be left in a state of genuine agnosticism.
On a separate but related matter, I cannot accept that the version of the report currently on the website constitutes significant material support of the Claimant's case, beyond observing, as I have already done, that it is consistent with it.
I need to deal with the Claimant's assertion that he provided a copy of the American report to the Union in March 2013. He did not say this in his witness statement, and did not specify to whom (although, if this occurred, it must have been to an officer of the Union). This issue was not properly explored with the Defendant and his witnesses. In my judgment, the Claimant is mistaken about this. If it occurred, someone would have remembered.
I retain significant concerns about the documents the Claimant submitted to the Financial Secretary in July 2012. In my judgment, to borrow the Defendant's terminology, they are "dodgy". Whereas I can accept that Dolphin retained the Claimant's details on their system, the Claimant has never provided any satisfactory explanation for the surname "Grandom". The first name, "Barry", is probably a reference to him, as indeed is the mobile phone number, but "Grandom" remains a mystery. Equally mysterious is the erroneous dating of the document. It is difficult to accept that anyone in this line of work could have got both the day and the year wrong. Two possible inferences, amongst others, are capable of arising: first, that Dolphin habitually uses "Grandom" (presumably with the Claimant's full knowledge) for money-laundering or similar purposes; secondly, that the document was created some time after the transfer was made, but before the General Meeting in July 2012. These possible inferences are fortified by the Claimant's failure to call relevant evidence from Dolphin: instead, the trial bundle contains a letter from the company which is both inconclusive and unsatisfactory.
There are no similar concerns about the deposit slip, notwithstanding that the sole available photocopy is now somewhat ragged. The issue with the deposit slip is that, without further explanation, its relevance cannot be deduced. This document shows that the Claimant, on the last day of the mission, made a cash deposit in the sum of 612,260 Naira to the account of Bench Mark Hotel Ltd. The Claimant and Mrs Amadi could not have run up a bill in anything like that amount, and it was not put to them in cross-examination that they had done so. It follows that the Claimant's version of events – that he had made this payment at Mr Chamberlin's request in partial discharge of the mission's liability to the hotel – is wholly plausible. It seems highly unlikely that the Claimant was making some sort of gift to the hotel, or that he was paying money into its account pursuant to some sort of unlawful or dishonest arrangement with the hotel. Furthermore, this transfer occurred on the last day of the mission, which tallies with the circumstances surrounding the making of the payment as narrated by the Claimant.
The plausibility of the Claimant's account is fortified by Mrs Amadi's evidence, which I accept. According to paragraph 4 of her witness statement:
"I had wanted to go to the bank with [the Claimant] but I was busy and told him to go on his own. I am aware that he paid in the money into the hotel's bank account, and I was present when he gave the receipt to the mission leaders and they thanked him. They eventually gave him a copy of the payment slip. The original of the payment slip was given to the hotel management as they would not accept a photocopy as evidence of payment."
This, in my judgment, is reliable evidence which (i) Mr Balroop did not seek to impugn in cross-examination (save by pointing out that the witness is a childhood friend of the Claimant), and (ii) could not realistically have been made up by Mrs Amadi. Further, although I have said that Mr Osundu could only give hearsay evidence that the donation was made to Mbaise USA, I am entitled to look at the matter more broadly. He is Mrs Amadi's brother and is not, therefore, entirely impartial. However, regardless of the admissibility and quality of any evidence he can give, he must know whether the Claimant made a donation to Mbaise US, and I am entitled to ask myself whether he is the sort of person who would fly 11 hours from Texas in order to give perjured evidence. In my judgment, he came across as a man of dignity and distinction.
In the light of my clear findings on this issue, it seems to me that the Money Transfer slip needs to be considered in its proper context. There will always be doubts about it, even strong doubts, but it must be relevant that the amount in Naira is exactly the same amount as we see on the deposit slip, being the then Naira equivalent of £2,500 less £80. This is unlikely to be a coincidence, particularly given the Claimant's evidence that no donation had been made in 2011. That said, the erroneous date and the reference to "Grandom" will always remain unexplained.
I return to the Claimant's answers to my questions at the end of his evidence. I posed a series of precise, non-leading questions. I observed the Claimant very closely indeed, and made a careful note of his answers. In my judgment, in this context and outside the more combative zone of cross-examination, aspects of the Claimant's true character emerged. I have concluded that he was an honest witness who would not have defrauded, and did not defraud, the Union of £2,500. What happened to the money, and the related issue of motive, are highly relevant to the issue of forgery.
I said at the outset that this issue needs to be considered in the light of all the available evidence. This includes the inferences which may be drawn from the Claimant's failure to disclose, or adduce, potentially relevant evidence, including in particular (i) better evidence from the USA, and (ii) evidence relating to the Claimant's bank statements both here and in Nigeria. Further, inferences might be drawn from the Claimant's failure to furnish additional evidence to the Financial Secretary and/or the Defendant, despite his undertaking to do so in March 2013. In this last regard I reject Mr Bashir's submission that the onus lay on the Defendant to undertake proper inquiry.
I am not bound to draw adverse inferences from the Claimant's failures; I may do so only if it is right in all the circumstances. I do criticise the Claimant for failing to submit further and better evidence to the Financial Secretary and/or the Defendant in and after March 2013, but I do not accept that this is evidence of shiftiness or prevarication on his part. Rather, it is evidence of a somewhat stubborn, sometimes self-important individual who does not appreciate having his integrity impugned.
It was not properly explored in cross-examination why the Claimant did not adduce evidence from Mr Chamberlin. As for the Claimant's bank statements, they would have supported (or contradicted) his case as to the exact dates of the cash withdrawals, but they would not have taken the matter very much further. It can hardly be doubted that the Claimant made cash withdrawals; the issue is as to what purpose.
In my judgment, the Defendant has failed to prove that the disputed documents were, or are, forgeries, with the imputation that the Claimant has acted dishonestly.
Honest Opinion
It should be sufficiently apparent from what I have already said that the Defendant, in my view, had reasonable grounds for believing that these were forged documents, and that he was honest in that belief. The Claimant has failed to satisfy me that the Defendant did not hold the relevant opinion, assuming that it was an opinion.
In the impugned statement the Defendant did not say that he believed, or suspected, that these were forged documents. On any natural and fair reading of the critical tenth paragraph of his reply to the petition, the Defendant stated that these were forgeries.
For the defence of honest opinion to succeed, the Defendant must show first of all that the statement complained of was a statement of opinion, not a statement of fact. Mr Balroop drew my attention to the discussion of this issue in Collins on Defamation, November 2013 edition. The fact/opinion dichotomy gives rise to difficult issues at the borderline, and I note the terms of Mr Collins' discussion at paragraphs 9.11 and 9.12.
In Joseph v Spiller [2011] 1 AC 852, an authority on the common law rather than on section 3 of the Defamation Act 2013, Lord Phillips PSC said this, at paragraph 114:
"Careful consideration needs to be given to Mr Caldecott's first proposition that the defence of fair comment should extend to inferences of fact. Jurisprudence both in this jurisdiction and at Strasbourg – see Nilsen and Johnsen v Norway 30 EHRR 878, para 50 – has held that allegations of motive, which is inherently incapable of verification, can constitute comment. Some decisions have gone further and treated allegations of verifiable fact as comment: see for instance the Privy Council in Jeyaretnam v Goh Chok Tong [1989] 1 WLR 1109. It is questionable whether this is satisfactory. Prejudiced commentators can draw honest inferences of fact, such as that a man charged with fraud is guilty of fraud. Should the defence of fair comment apply to such inferences? Allegations of fact can be far more damaging, even if plainly based on inference, than comments on true facts. Eady J has twice held that the defence of fair comment cannot apply where the defamatory sting is a matter of verifiable fact: Hamilton v Clifford [2004] EWHC 1542 (QB) and British Chiropractic Association v Singh [2009] EWHC 1101 (QB) (subsequently reversed by the Court of Appeal [2011] 1 WLR 133)."
Although the Defendant would not choose to use the term, his statement that the impugned documents were forgeries was based on the inferences he drew from his analysis of the materials viewed in their proper context, on what we lawyers used to call "secondary facts". Maybe the terminology deployed is not entirely helpful, but in my judgment it is clear in the instant case that (i) the Defendant could not "know" whether these documents were forged (he said precisely that in the witness box), and (ii) the genuineness of the documents was capable of being verified. The Defendant was not purporting to give expert handwriting evidence about the documents; he was drawing his own deductions about their authenticity, without any special knowledge or expertise. Whatever the exact state of the Defendant's mind, and contrasting the sort of case where an expert expresses an opinion about the authenticity of a painting, for example, I consider that the Defendant was making a statement of fact, not of opinion. My conclusion is naturally fortified by the Defendant's choice of language, which in circumstances such as the present is highly germane. The Defendant did not say words to the effect that he believed the documents to be forgeries, explaining why. He said that they were forgeries.
In my judgment, the Defendant fails to satisfy the first condition of the defence of honest opinion. Although his choice of words was intemperate, I conclude that he would have satisfied the second and third of the conditions, because his opinion (assuming, contrary to my primary finding, that this was an opinion) would have been honestly held and sufficiently grounded on stated facts, viewing the document as a whole.
Qualified Privilege
In his written argument Mr Balroop drew attention to the classic statement of principle by Lord Atkinson in Adam v Ward [1917] AC 309. Qualified privilege in this respect depends on the existence of a common interest, which in turn depends on reciprocity of duty to publish and duty to receive.
To this extent, qualified privilege depends principally on an examination of the relevant circumstances surrounding the publication, not on the terms used. However, a subsidiary issue does arise in this latter context.
The defamatory statements were not published during the course of any meeting of the Union; they were communicated by email. Although Mr Bashir did not advance his objection in precisely this way, it seems to me that I must examine the circumstances in order to ascertain whether they might properly be said to form part of the legitimate business of the Union. If not, the conclusion must be that the Defendant was acting in his personal capacity and/or was indulging in a form of frolic of this own.
If, for example, the Defendant acted with the express authority of the Executive Committee, I could readily conclude that his publication did constitute part of the legitimate business of the Union. A similar conclusion might be drawn if the Defendant's role as Treasurer expressly or impliedly mandated such a publication. Whereas proof of these matters may not be sufficient for the defence to be made out, they certainly are necessary.
In my judgment, it is plain that the Defendant did not act under the auspices, or with the authority, of the Executive Committee when he published the impugned document on or about 14th March 2014. The evidence of Mr O'Nwere, and the minutes of the General Meeting held on 23rd March 2014, prove otherwise. Mr Balroop did not press this point in his closing submissions.
Instead, Mr Balroop argued that the publication fell within the ambit of the Defendant's duties as Treasurer. In the absence of any substantive response by the Claimant to the 17 questions posed, or indeed any proper engagement by the Claimant with the concerns which had been raised in March 2013, the Defendant was quite entitled to express himself as he did.
The difficulty with this submission is that the Defendant was clearly acting in his personal capacity: see the opening paragraph of the impugned publication. The Claimant's Petition did not touch on the events of April 2012. Further, upon closer examination of the Treasurer's duties under the Constitution, whereas it is clear that the Defendant was entitled to raise concerns and pursue the Claimant for an explanation, it was no part of his responsibilities to call him a forger. The Defendant clearly acted under the misapprehension that it was his duty to reach a conclusion on the issue. It was not; this was for the General Meeting of the Union. In any event, I consider that there has to be some relationship of proportionality between the Defendant's duties, the common interest in play, and the nature of the publication made. Put another way, according to Gatley paragraph 14.1, the Defendant has to prove that the statement was "fairly warranted by the occasion". In my judgment, it plainly was not. By asserting that the Claimant was guilty of forgery, the Defendant exceeded the bounds of what was fairly warranted. The Defendant may have been entitled to inform Members that the Claimant had been given every opportunity to explain himself, and provide further evidence, but he had failed to avail himself of it; yet the Defendant went considerably further than that.
In his written argument, but not orally, Mr Balroop relied on that limb or sub-set of qualified privilege which is "reply to attack" (see Gatley, paragraph 14.51). However, this line of defence fails because, as I have already observed, the Defendant's publication did not relate in any material respect to the terms of the Claimant's Petition. I do note that the Claimant accused the Defendant of wasting £400 of Union money, but this had nothing to do with the £2,500 donation. I would characterise the Defendant's publication as retaliation rather than as reply properly so called.
Accordingly, all the defences fail, and I must now consider the issue of damages.
Damages
Mr Bashir submitted that this was a serious case of defamation and that the Claimant's reputation had been significantly harmed. Although the publication may have been confined to members of the Union, there had been a percolating effect, which was clearly foreseeable. The Claimant had lost a contract, there had been no proper investigation by the Defendant, and no retraction or apology.
The Claimant falls to be compensated for damage to his reputation and any accompanying distress. There is no pleaded case in support of a claim for financial loss. That rumours have abounded, and that the Defendant's defamatory remarks have become more widely known, cannot be laid at the Defendant's door. The Defendant has given no apology, and has not retracted his defamatory statement. In my judgment, he was not under any investigatory obligation (contrary to Mr Bashir's submission that he was), and the Claimant himself was remiss in failing to provide a proper explanation, with evidence in support of it, at all material times in and after March 2013. Moreover, these were suspicious documents, even if they were not forgeries. The Claimant's failure to explain "Grandom" gives rise to the strong suspicion that he may have been involved in money-laundering activities, or something similar.
The defamatory statement was extremely unwisely worded, and I am sure that the Defendant now regrets that. It would have taken little adjustment to it to keep the Defendant the correct side of the line.
Mr Balroop submitted that I should consider an award of only nominal damages. In my view, that would not reflect the overall justice of the case, because the attribution of forgery to the Claimant's is not something which may lightly be disregarded. On the other hand, I entirely reject Mr Bashir's submission that his client is entitled to a five-figure sum.
My award of general damages in this case is in the amount of £2,000.
There must be judgment for the Claimant accordingly.
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MR JUSTICE HICKINBOTTOM:
On 1 February 2010, the Claimant Julian Watson issued proceedings in the Watford County Court against the Defendant brothers, Tariq and Khalid Sadiq, claiming monies alleged to be owed by them to him in respect of the sale and purchase of an interest in a property known as 25 Goldcroft, Bennetts End, Hemel Hempstead, Hertfordshire, which had, since 31 August 2007, been jointly owned by the Claimant and the First and/or Second Defendant. In the claim, it was alleged that the Defendants had agreed to buy out the Claimant's interest; and the Claimant claimed various sums which, he said, were due to him as compensation when that deal went wrong.
The trial of the action was listed before Mr Recorder Bueno QC sitting at Luton County Court on 26 March 2012. On the fourth day of the trial, 29 March 2012, the action was compromised and formally concluded by a consent order in Tomlin form. Under the agreed terms, the First Defendant was required to pay the Claimant £67,000-odd and the Defendants were ordered to pay 60 per cent of the Claimant's costs. The substantive sum was paid. However, the Claimant did not take the appropriate action to get the costs assessed, and it is now too late to do so.
Despite the compromise being set out in a consent order, the Claimant sought to appeal. The appeal proceedings did not run an entirely even course. The Defendants made various applications to the Court of Appeal which failed, and for which they were ordered to pay the Claimant's costs; although, as with the costs of the substantive action, the Claimant in the event took no timely action to have those costs assessed and it is, again, now too late for him to do so. The Claimant's application for permission to appeal was granted by the Court of Appeal; but the appeal itself was dismissed on 16 July 2013. It was ordered that the Claimant should pay the Defendants' costs of the appeal to be assessed, if not agreed; and he should pay them £5,000 on account of those costs by 6 August 2013. Undaunted, the Claimant sought to appeal to the Supreme Court; but permission was refused by the Supreme Court on 4 February 2014. Under that order, the Claimant was required to pay the Defendants' costs of the appeal to the Supreme Court. On any view, the Supreme Court order brought the substantive proceedings to an end.
The Court of Appeal costs were, in due course, assessed by the Senior Courts Costs Office at £47,448.90; and the Defendants have the benefit of a costs certificate in that sum, plus £140 fixed costs. That certificate is, of course, the equivalent of a judgment which can be enforced as such.
In addition, the Defendants have the benefit of a number of other costs orders, namely:
(i) an order of Deputy District Judge Gaunt in the Watford County Court dated 28 November 2013, for costs assessed in the sum of £1,580;
(ii) an order of Judge Stevens-Hoare sitting in the Property Chamber (Land Registration) of the First-tier Tribunal dated 17 December 2013, for costs assessed in the sum of £217.77;
(iii) an order of Deputy District Judge Grayson in the Watford County Court, dated 21 May 2014, for costs assessed in the sum of £243.10; and
(iv) an order of Deputy District Judge Shah in the Watford County Court dated 1 May 2015, for costs assessed in the sum of £3,510.26.
In addition, as I have indicated, the Claimant is responsible for the Defendants' costs of the Supreme Court application, but those have not yet been assessed. They are claimed in the sum of £1,137.75.
Excluding those unassessed costs, the Claimant thus now owes the Defendants costs plus interest in the sum of £62,163.07. The Defendants, by virtue of their previous dealings with the Claimant, were and are convinced that he has sufficient assets to satisfy the outstanding costs orders.
In respect of the costs certificate for the Court of Appeal costs, the Defendants applied to the Watford County Court, under CPR rule 71.2, for an order requiring the Claimant, as a judgment debtor, to provide information about his means. In accordance with paragraph 1.2(6) and (7) of CPR PD 71 - the practice direction accompanying CPR Part 71 – the application set out specific documents sought and, in particular, questions the Defendants wished the Claimant to answer. Additional documents and questions were added later.
At a hearing on 11 August 2014, District Judge Chesterfield ordered the Claimant to attend an oral examination on the next available date, with a time estimate of four hours; and the order identified the written questions to be put to the Claimant initially, and the documents he was required to produce at the oral examination. The order contained the rubric required by CPR rule 71.2(7) to the effect that, if the Claimant did not comply with the order, he might be held to be in contempt of court and imprisoned or fined or his assets seized.
The oral examination was set down for hearing on 1 May 2015 at Watford County Court. The hearing was assigned to Deputy District Judge Shah. A transcript of the proceedings is available.
At that hearing, the First Defendant Tariq Sadiq appeared, and applied to make two further individuals parties to the oral examination, namely the Claimant's son (Lawrence Watson) and a Kay Fraser. Lawrence Watson, in fact, accompanied the Claimant to the hearing, and he sat at the back of the court. That application appears to have been made during the course of the hearing. Insofar as it was informal and thus arguably dealt with on the court's own motion, the Defendants certainly encouraged the Deputy District Judge to make such an order. When the judge was considering it, he asked the Defendant for details of his son, such as his address and his age. The Claimant refused to tell him, saying that, if the judge wished to ask Lawrence Watson about his address and age, he (the judge) should simply ask him. The judge did so; but Lawrence Watson did not give the information sought, simply saying that he was "not a part of this" and he was just there to "sit in and view this". The judge then asked him (Lawrence Watson) to step outside the court, which he apparently agreed to do so. However, the Claimant objected, saying that his son was there as his carer, and he did not think that the judge had any authority to send him from the court. He said that, if the judge did exclude Lawrence Watson, then the Claimant himself would leave because, he said, he was not prepared to be there without his carer. Laurence Watson then left the court, and the Claimant immediately followed. The judge indicated at once that he considered that this was a contempt of court.
Following further discussion with the Defendant, the judge ordered as follows:
(i) Laurence Watson and Kay Fraser be joined to the proceedings, and the First Defendant serve a list of questions and documents required from each of them.
(ii) The matter be transferred to the High Court for an oral examination of the Claimant, Lawrence Watson and Kay Fraser.
(iii) The Claimant, having walked out of court, and thereby refused to answer any questions, had showed contempt of court and contempt of the order of 11 August 2014; and, consequently, the matter should be listed for a hearing for the Claimant to show cause why he should not be committed for contempt of court, pursuant to CPR rule 71.8; that application to show cause to be heard by the High Court.
(iv) The Claimant was ordered to pay the costs of the Defendants, summarily assessed in the amount I have already indicated.
At the 11 August 2014 hearing, before he left, the Claimant gave his address as 55 Baccara Grove. That his address was 55 Baccara Grove was set out in his application dated 19 May 2014, and repeated in court at the August 2014 hearing. The Defendants believe that address to be false, because they have evidence that the Claimant was evicted from that address in November 2013. The Defendants told the judge that the Claimant had a history of providing false addresses in court proceedings, in the form of addresses of properties which he does not occupy or no longer occupies. By giving a false address to the court in the course of the oral examination, that too, it was submitted, was a contempt of court. The Defendants say they have evidence that 55 Baccara Grove was sold by Ms Fraser on 11 July 2014 and, although the Claimant had lived at that address much earlier, he had not lived there for some considerable time.
In accordance with the order of 1 May 2015, the matter was consequently transferred to the Royal Courts of Justice. In this court, it came before Knowles J on the papers, on 25 June 2015. He gave various directions, including that a hearing be fixed before a High Court judge, with a time estimate of two hours, for consideration of:
(i) the examination of Lawrence Watson and Ms Fraser as to their means;
(ii) the future conduct of an examination of the Claimant as to his means; and
(iii) the possible contempt of court by the Claimant, and his possible committal therefor.
Knowles J required the Claimant to attend the High Court hearing personally, and strongly encouraged him to seek legal advice. He gave various other case management directions, including permission to any party, including Lawrence Watson and/or Ms Fraser, to apply for further or amended directions. Neither Lawrence Watson nor Kay Fraser have made any such application. Lawrence Watson has not played any part in the matter: he has not, so far as I am aware, contacted either the court or the Defendants and although present, he has not formally appeared before me today. Ms Fraser, on the other hand, has instructed solicitors who have themselves instructed Mr Sinclair of Counsel. Written submissions on her behalf have therefore been lodged, and Mr Sinclair has appeared for her today. The Claimant has attended in person, and has lodged documents in response to the "show cause" order.
Before I deal with the extant matters before me, may I say that, although, for the reasons I shall give, I am afraid I do not consider the Deputy District Judge got everything right, I have some considerable sympathy for him. On any view, reading the transcript, the Claimant was less than fully cooperative and the hearing before the Deputy District Judge was difficult.
Turning to the matters now before me, and dealing with the most straightforward matter first, it is submitted on Ms Fraser's behalf that the judge had no power to order her to be the subject of an oral examination. There is no judgment against her and, says Mr Sinclair in his skeleton argument, Ms Fraser is at a loss as to why the Defendants sought to join her to the present proceedings, and as to why the judge did so. Mr Isaac for the Defendants readily and abjectly concedes – correctly – that the judge had no such power. CPR rule 71.2 gives the court a power to require a judgment debtor, but no-one else, to attend the court. Ms Sinclair is not a judgment debtor of the Defendants.
For those reasons, I shall, as indicated during the course of debate, vary the order of Deputy District Judge Shah dated 1 May 2015, by striking out paragraphs 1, 3 and 4 of that order, together with the references to the individuals in paragraphs 5 and 6. Insofar as necessary, I make that variation of that order of the County Court as a County Court judge.
Mr Sinclair submits that Ms Fraser is entitled to her costs of being put to the inconvenience of responding to the 1 May 2015 Order. Although her primary response has been that the court had no jurisdiction to make the order, the order was not made entirely on the court's own motion, but as a result of an application by the Defendants or at least after their encouragement. The initial response of the Defendants, Mr Sinclair submits, was made on 11 June; and that response was to insist on Ms Fraser's attendance at the hearing today. The Defendants were litigants in person. The first indication of acceptance by them that Ms Fraser should be removed from these proceedings was by way of a letter on 5 October, by which time no doubt they had obtained some legal advice. However, Mr Sinclair submits with some force that, even then, the Defendants did not accept that they should pay the costs of Ms Fraser's involvement. Ms Fraser made no formal application to remove herself from the proceedings, he says, because that would have simply added to the costs burden. He has had to attend today, he submits, to protect the position of Ms Fraser in relation to costs. In the event, he has relied upon a statement of costs in the sum of £2,189.76.
For the Defendants, Mr Isaac submits that no costs order should be made. The court had not power to bring in Ms Fraser into the oral examination proceedings, and that has been accepted by the Defendants themselves, upon receipt of legal advice.
Although I have sympathy with the Defendants as litigants-in-person (as they were at the relevant time), they clearly either applied for or encouraged the bringing of Lawrence Watson and Ms Fraser into the oral examination proceedings, wholly wrongly. Unfortunately, the Deputy District Judge did not appreciate that he had no jurisdiction to make the order for which they pressed.
In all of the circumstances, I consider that it is appropriate to make an order that the Defendants pay her proportionate and reasonable costs. In looking at the statement of costs provided, I am satisfied that the bottom line to which I have already referred is proportionate; and, looking at the individual items claimed, I am satisfied that each is both reasonable and proportionate, in terms of the time spent. The hourly rate claim for the grade B fee earner is not challenged. The only disbursement is in respect of Mr Sinclair's fees, which relate to the hearing but which also include his written submissions. I accept his submission that he is here reasonably and out of necessity, properly to protect Ms Fraser's position with regard to the costs she has incurred.
For those reasons, I shall order the Defendants to pay Ms Fraser's costs in relation to this matter, which I will summarily assess in the sum of £2,189.86.
I therefore turn to the position of the Claimant. He has submitted two written documents in relation to the order, effectively to show cause why he did not commit any contempt of court. Both are dated 20 July 2015. The longer document sets out a response to the requests and orders for information and documents. The shorter document sets out why he felt moved to leave the proceedings on 1 May, in the circumstances that I have described.
I will consider the question of whether a contempt of court was committed in a moment. However, it is clear from the documents and the Claimant's submissions to me today that he has indicated that he is prepared to engage constructively and fully with the oral examination process set out in CPR Part 71; and, indeed, he has now purported to answer all of the written questions put to him and disclose all documents requested of him, "truly and completely". He has endorsed his answers in writing to that effect.
The Defendants, through Mr Isaac, have doubted whether the answers and disclosure are complete. For my own part, I see the force of some of the submissions which Mr Isaac has made. They are matters which the Claimant will wish to consider.
However, CPR Part 71 sets out what is, in effect, a comprehensive scheme in relation to orders to obtain information from a judgment debtor, which includes an oral examination before an officer of the court or a judge, following provision of written answers and disclosure. Rule 71.8 sets out what happens in the event of a failure to comply with an order, namely that, if a person against whom an order has been made under Rule 71.2 (a) fails to attend court, (b) refuses at the hearing to take the oath or to answer any question, or (c) otherwise fails to comply with the order, the court will refer the matter to a High Court judge or a circuit judge. Under rule 71.8(2), that judge may make a committal order against that person. But, if a committal order is made, by virtue of rule 71.8(4), the judge will direct that the order shall be suspended, provided that the person attends court at the time that they specify in the order and complies with all the terms of that order and the original order. I emphasise the mandatory nature of that provision.
Those provisions are regularly and well trodden in county courts up and down the country. What they mean in practice is that, if a judgment debtor fails to attend an oral examination or, having attended, refuses to answer any proper questions put to him at the hearing, the matter is referred, usually, to a circuit judge to make a suspended committal order, the condition of which is the judgment debtor's attendance at a second hearing.
In the circumstances of this particular case, it seems to me that, given the Claimant's indication that he is now prepared to engage constructively and fully with the oral examination, the matter should return to Watford County Court to enable that court to send out a further rule 71.2 notice, with a new date for the Claimant's oral examination in it, at which the answers that the Claimant has given in writing can be tested – if necessary, vigorously – by cross-examination. As the Claimant well knows, it is a contempt of court not to obey a summons for an oral examination or not to answer proper questions put at such examination or not to disclose documents in his possession for which an order has been made.
Although it is a matter for those who assign judges in Watford County Court, given the historical difficulties in this case, it may well be that they will consider it appropriate to assign an experienced District Judge to deal with that application hearing. As with the original notice, the new notice should give the oral examination a time estimate of half-a-day.
Turning to the contempt which the Deputy District Judge considered had been, or may have been, committed, I accept that, where a judgment debtor absents himself from an oral examination part-way through, that may conceptually amount to a contempt in the face of the court. However, more pertinently, as I have described, the situation is specifically covered by CPR rule 71.8. In this case, although the Claimant attended the hearing, he left without answering proper questions which were put to him. He left knowing that, by leaving, he would frustrate the examination. It is no answer for him to say, as he does, that he made his intentions clear by saying that, if his son were excluded from the court, he would leave. I am bound to say that I am unsure of the jurisdiction under which the Deputy District Judge was acting when she purported to exclude the Claimant's son from the hearing. Although oral examinations are conventionally heard "in private", in the sense of without attendance of the public, I do not see why Lawrence Watson should have been excluded from that hearing, although clearly he was, with some justification, not willing to answer questions put to him by the judge. Turning to the Claimant, he says that he suffers from an anxiety condition which makes it helpful to have someone with him when he finds himself in anxiogenic circumstances, such as a court hearing. I have not seen any medical evidence to support that proposition, but nor have I sought it. In all the circumstances, I am far from persuaded that the Claimant himself could properly and appropriately absent himself from the hearing.
Turning to the second limb of the application, i.e. the alleged contempt by the Claimant in misleading the court as to his current residential address, before me today, the Claimant has given his residential address as 4 Roveley Court, Stony Stratford, Milton Keynes; and, indeed, that address is on some of the documents which he has disclosed. He says that he had understood the address required was the address for service, which was the address I have already referred to; and, consequently, he says, it was something of a misunderstanding – although he also says that he has been reluctant to give his residential address to the Defendants, for fear of adverse consequences of so doing. He considers that there is a risk that the Defendants will create at least a nuisance, if they are aware of his address. However, I have seen no evidence of that risk; and, in any event, if they were to create such a nuisance, then that is a matter which the Claimant could bring back to the court
I do not think it would be fruitful or helpful to investigate further whether an act of contempt was committed by the Claimant at the earlier hearing. If the Claimant fully complies with his obligations under CPR Part 71, in writing and at the new hearing, then there will be no need to consider committal again at all. If he fails to comply with his obligations, then the mechanism in Part 71 will roll forward, including, if the judge dealing with the oral examination considers it appropriate, a reference to a circuit judge who may make a committal order under those provisions, of course taking fully into account the guidance in relation to such matters that has been given by the higher courts.
Today, the Claimant has clearly said that he intends fully to cooperate and engage with the oral examination procedure; and, despite Mr Isaac's scepticism, for the reasons I have given, I consider he should be given every opportunity to do so. In those circumstances, a further CPR rule 71.2 notice should be sent to the Claimant and the Defendants, giving a further appointment date for the oral examination. That notice should be sent out by the Watford County Court. Insofar as this matter has been transferred to this court, I consequently transfer it back to Watford County Court.
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Is there anything else, Mr Isaac?
MR ISAAC: My Lord, you said that it was provided -- well, you said you would deal with the question of his address in relation to that being a contempt. You mentioned what he has submitted today in relation to that, but you did not refer to the relevant part of the transcript which makes it clear that that information cannot possibly be correct.
MR JUSTICE HICKINBOTTOM: What I propose is this. I do not propose to do anything further, including making findings, in relation to CPR rule 71.8 today. However, if the Claimant fails to comply with his obligations under Part 71 in the future, then those matters have not been dealt with – and they can be relied upon in any future application under rule 71.8.
MR ISAAC: Very well, my Lord.
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H.H. Judge Keyser Q.C. :
In January 2007 the claimants, Mr and Mrs Worthing, invested £700,000 in an investment portfolio ("the Portfolio") provided by Lloyds TSB Private Banking Limited (which is now Lloyds Bank Plc, the defendant; I shall refer simply to "the defendant" without distinction) through its Mayfair Asset Management Service. In July 2008 the claimants surrendered their investment in the Portfolio and received back only £657,388.21. They say that the losses they suffered on the investment were due to bad advice given to them by the defendant, initially in January 2007 to invest in the Portfolio and subsequently in a review meeting on 13 March 2008 to retain the investment. In a nutshell, they say that they ought to have been advised at the outset that the Portfolio, as a medium-risk investment, was inappropriate for them as investors wanting only low risk, and that subsequently the defendant ought to have corrected its initial mistake and advised them to disinvest from the Portfolio. In these proceedings, which were commenced on 16 March 2013, they seek to recover compensation for their losses on the basis that, in giving them that advice, the defendant acted negligently, in breach of contract, and in breach of its statutory duties under the Financial Services and Markets Act 2000 (FSMA) and the Conduct of Business Sourcebook Rules (the COBS Rules).
At a hearing on 13 August 2014 the claimants conceded that their causes of action were statute-barred in so far as they related to alleged breaches of duty that occurred before 16 March 2007. Accordingly the claim that is pursued relates not directly to the original advice to invest but to a failure to correct that advice and to subsequent advice to retain the investment. The facts concerning the original advice and events before 16 March 2007 are however relevant as providing both the context for the later advice and the foundation of part of the claimants' case regarding the defendant's continuing contractual obligations; this judgment will deal with them in some detail.
At trial, evidence of fact was given by the claimants and by Mr Aidan Doyle, the defendant's employee who conducted the review in March 2008.
I also received expert evidence as to the standard of advice given by the defendant from Mr Charles Levett-Scrivener and Ms Louise Claro as expert witnesses. Parts of the expert evidence were of some assistance; if I do not make extensive reference to it, however, it is because for the most part I did not think that it added much to a consideration of the pleaded issues that arose on the facts and were pursued at trial.
In what follows, I shall set out most of the material facts, referring extensively to the contemporaneous documentation. Then I shall summarise the relevant law. Finally I shall explain and discuss the various complaints made by the claimants and state my conclusions with respect to them. My conclusions are summarised very shortly at the end of the judgment.
I am grateful to Mr Mantle and Mr McMeel for their helpful written and oral submissions.
The relevant facts
In January 2007 Mr Worthing was 54 years old and Mrs Worthing was 51 years old. After a long career as a golf professional, in 1997 he had become the sales director of a recruitment company. She meanwhile had been a housewife and had also had some employment in clerical roles. In 1999 Mr Worthing's employment was terminated and the claimants put £20,000 into setting up a business of their own called Abacus Recruitment and Training ("Abacus"). By 2006 Abacus was generating annual profits of about £1 million. In September that year the claimants sold the business for about £5 million. Mr Worthing retained a part-time role with Abacus, for which he was to receive an annual salary of about £80,000. The claimants also jointly received an income of about £100,000 p.a. from a property portfolio.
The claimants had been customers of the defendant bank since about 2000. After the sale of the business, their bank manager arranged an introduction to the defendant's Mayfair Banking Service, which was the division providing private banking services to "ultra-high-net-worth" individuals (that is, those with assets available for investment in excess of £1 million), for the purpose of receiving advice regarding the investment of part of the proceeds of sale.
The initial meeting took place on 29 September 2006 at the claimants' business premises in Pontypool. Those present were Mr Worthing, Mr Richard Boanas, Mr Aidan Doyle and Mr Nigel Kilborn; Mrs Worthing was not present. Mr Boanas was the Relationship Manager with whom the claimants dealt at their local branch of the defendant bank. Mr Doyle was employed by the defendant as a Private Banking Manager in the Mayfair Banking Service. Mr Kilborn was an independent financial adviser working out of the defendant's Private Banking offices in Cardiff. The defendant's internal rules did not permit Mr Doyle to provide initial investment advice, though he was permitted to conduct subsequent reviews. Accordingly, at all stages up to and including the making of the initial investment, the lead in the discussions and in completing the necessary paperwork was taken by Mr Kilborn. As an independent financial adviser, he was not limited to recommending the defendant's financial products, though in fact the advice he gave did relate to such products.
This first meeting took place nine years ago. Even the review meeting, to which I shall turn later in this judgment, took place seven-and-a-half years ago. It is inevitable that the recollections of those present will have faded badly over this time; they are also liable to have become overlain with later thoughts and interpretations. There exists, however, a file note in respect of each meeting; I am satisfied that these were dictated by Mr Doyle very shortly after the meetings to which they respectively relate. Although I shall consider the oral evidence regarding the meetings, the file notes, in conjunction with other contemporaneous documentation, seem to me to be the best starting-point when considering what happened at them, and I shall accordingly refer to them at some length.
The file note for the first meeting shows that the purpose of the meeting was to explain to the claimants the services that the defendant's Private Banking division, and in particular the Mayfair Banking Service, could provide. Mr Worthing's personal and financial circumstances were then summarised; these were documented in a "Personal Fact Find", and there was also what I shall call a "Risk and Planning" document that assessed the customer's appetite and capacity for investment risk. I shall say more about those documents below. The key point recorded in the file note was that Mr Worthing had "approximately £3.9m in cash sitting on a fixed term deposit which is due to mature shortly". The file note concluded:
"Planned expenditure is £650,000 in relation to his boat, and other issues, approximate[ly] £1.5m on property, £400,000 for Capital Gains Tax.
We have identified that there is approximately £1m of surplus income [this should read 'capital'] and having explained our services to him, he is happy for us to present a report to him for a £1m IPS [Investment Portfolio Service] portfolio. We will look at a range of options for Philip as he does come out [that is, on the risk assessment] as progressive but he has indicated he wants relatively low risk, but I think we need to present him with the various options as he is fairly shrewd and will be looking for real returns.
…
Nigel Kilburn (sic) is now preparing a report and will liaise with me regarding a second meeting."
The services being offered by the defendant may, so far as relevant to this case, be indicated by reference to its brochure, "Asset Management Service[:] a guide to our Investment Portfolio Service and Portfolio Administration Service". It contained the following passages:
"The Asset Management Service helps you conserve and build your wealth by offering a managed investment portfolio together with a facility for holding equities and other investments that you prefer to look after yourself."
"Your investment strategy is built around you. It aims to match your circumstances and investment objectives, plus attitude to risk—creating a portfolio of investments designed to meet your needs. ...
We will identify your investment objectives and assess your attitude to risk. Do you want minimum risk or maximum growth? A balance between the two perhaps? What about overseas investment? Or a combination of bond, equity and property funds in a single portfolio? ...
It all depends on your situation and how long you intend to invest for. Bear in mind though that the portfolios created by the Investment Portfolio Service are intended to perform over at least five years, and ideally longer."
"Our Investment Portfolio Service is a discretionary managed portfolio service, meaning we make the day to day decisions. It consists of different combinations of collective funds investing in bonds, equities and property."
Pages 12 and 13 of the Guide dealt with the choice of investment Profile, indicating the level of risk appropriate to the particular customer. The introductory section stated:
"Deciding on the Profile that best suits you will depend on what you see as the most acceptable trade-off between risk and reward. As a general rule, the greater the proportion of equities, the stronger the potential for growth, but the higher the possible risks."
Four categories of Profile were identified, in ascending order of risk:
"CAUTIOUS – For those who are prepared to take only modest risks, we offer Profiles with asset allocations that give precedence to bond funds over, or instead of, property and equity funds. Bond funds suit cautious investors because they are generally less susceptible to market volatility, although also less likely to provide such pronounced growth potential.
BALANCED – Balanced Profiles attempt to distribute your money more evenly between lower risk asset classes such as bonds and property and higher risk asset classes such as equities. Balanced Profiles carry greater growth potential while aiming to moderate risk. These types of Profiles suit investors who, while keen to enjoy the advantages offered by equity market investment, don't want to expose their capital too much.
PROGRESSIVE – Progressive category Profiles often put the majority of your money into equity funds yet maintain an element of lower risk asses for risk moderation. As such, they are well suited to investors who are prepared to expose their money to relatively significant risk in return for better growth potential, but want some reassurance in the event of stockmarket volatility.
ADVENTUROUS – Profiles that consist of funds investing mainly or wholly in equities are structured for optimum growth potential. Some include funds investing in overseas assets which, although susceptible to volatility and currency risk, can, in certain conditions, provide greater potential for growth than the domestic market. Such Profiles are designed for those who are willing to accept extra risk in return for higher growth potential."
During the first meeting, on 29 September 2006, Mr Kilborn completed a "Personal Fact Find" document, which recorded the information given by the claimants as to their financial position and intentions. It was recorded that the claimants had approximately £3.75 million in secure investments, nearly all of it in a Treasury Deposit, and that they had no other investments in financial products. They jointly owned a property portfolio valued at £3 million and the matrimonial home, and Mr Worthing owned a motor-boat valued at about £500,000. (The document also records "50% ownership of Share Links Healthcare Ltd ... £210,000", described as a psychiatric business, although the claimants' evidence was that they had never owned such a shareholding and knew nothing about that company.) Section 5 of the document dealt with anticipated expenditure: the claimants had a liability of £400,000 in respect of Capital Gains Tax; and Mr Worthing intended to increase the value of the property portfolio to £6 million, with investment of £1.5 million and borrowing from the bank of a similar amount; he also intended to buy a new boat for £250,000. Section 6 was the "Summary of needs & objectives". It identified "investments" as the area of need, and the objective as follows:
"Appoint a single independent advisor/company to manage surplus capital with a view of outperforming cash-based deposits after charges & costs. Objective to provide diversification via both a no. of different companies & funds to ensure no reliance on any one asset class. All admin and paperwork to be looked after & the facility for an annual face-to-face review to monitor both performance & personal objectives considered important."
A second version of the "Personal Fact Find" document is signed by the claimants. It is the same as the first version, save that some additional information has been added in manuscript, regarding in particular sufficiency of income. The claimants' signatures are both dated 29 September 2006, though it may be that either the signatures or the additional information or both were placed on the document after that date. A third version of the document was signed by the claimants on 18 January 2007; it is materially identical to the second version, save that a final page confirms acceptance of the defendant's investment recommendations.
Mr Kilborn also completed an initial version of the "Risk and Planning" document, which at that stage was limited to Mr Worthing. A later version, dealing with both claimants, was signed by them on 18 January 2007; I shall say more about the document in the context of the final meeting.
Following the meeting on 29 September 2006, Mr Kilborn prepared an initial Financial Planning Report for the claimants. A final version of the Financial Planning Report was prepared and sent to the claimants in January 2007, and I shall describe the document fully with respect to that final version. At this stage it suffices to note that it recommended investment in a medium-risk portfolio ("Balanced Profile").
On 7 November 2006 Mr Doyle and Mr Kilborn met again with Mr Worthing. Mr Doyle's file note, which was probably dictated on the following day, reads in part:
"The purpose of the meeting was to deliver the Mayfair Investment Portfolio Service report and recommendations.
We have gone through the report and recommendations in detail with Philip Worthing and he seemed generally happy with the proposals we were putting to him. However he does want to discuss the matter in detail with his wife and has therefore asked that we give him 10 days to resolve this issue at this time[.] Nigel Kilbourne (sic) will get back to him to arrange a hopefully final meeting to complete the paperwork."
A third meeting took place on 9 January 2007. At the last minute Mrs Worthing became unavailable to attend, and therefore it could not be the final meeting as had been envisaged; a further meeting was arranged for completion of the paperwork. Mr Worthing confirmed that he wanted to proceed with the investment but only at a reduced figure of £600,000. At the end of his file note, Mr Doyle added a memo for his assistant:
"Can you ... do two fresh [Financial Planning] reports and email these to Nigel Kilhorn (sic) for £600k for balanced profile option 2 and the progressive profile option 2 for the £600k.
On second thoughts you can't do that as it has to be option 1 when it is less than £700,000. Can I therefore suggest that you do profiles one for £600,000 for balance of progressive and do a report for £700,000 for balance on progressive option 2."
In his oral evidence, Mr Doyle explained that he wanted to provide the claimants with alternative reports in order to illustrate the difference between the two levels of risk: "balanced" being a medium-risk and "progressive" being a higher-risk investment profile. He said that the reason for illustrating an investment of £700,000 rather than only £600,000 was that the higher figure was the threshold for investment directly in equities rather than in a managed fund. He denied that either he or the bank had been trying to push the claimants into a higher-risk investment.
A further meeting took place on 18 January 2007. On this occasion, both claimants were present, as were Mr Doyle and Mr Kilborne. This is the meeting at which the initial investment advice was confirmed and accepted. Three documents are relevant to considering that advice: first, the final version of the Risk and Planning document; second, the Financial Planning Report; third, the revised Personal Fact Find document.
The Risk and Planning document was primarily designed to enable the defendant to assess both its customers' appetite for risk and their capacity for risk. For the claimants it exists in an original version and a revised version. The original version dealt mainly with Mr Worthing; there were some limited entries for Mrs Worthing. The revised version added further information regarding Mrs Worthing and made some alterations regarding Mr Worthing. The following matters are relevant.
20.1 Section 2.4 identified the funds for which advice was sought as £1.12 million currently held in secure investments. The notes indicated the intention: "Utilise surplus cash reserves to provide potential for a better return than existing cash deposits."
20.2 Section 2.6, headed "Likely patterns of activity", stated: "Capital likely to be invested for growth + no withdrawals anticipated for next 5 years +".
20.3 Section 3.2 was in two parts. The first part was headed, "Understanding your capacity for risk". The second part was headed, "Understanding your appetite for risk". The basic distinction is clear: capacity relates to objective ability to bear risk, whereas appetite relates to subjective willingness to take risk. In each part, there were a number of multiple-choice questions, and a score was given for each answer. The total score would indicate the defendant's assessment, with reference to different levels of risk: Secure, Cautious, Balanced, Progressive, Adventurous, and Specialist. Next to the defendant's assessment was a space for the customers to indicate whether or not they agreed with the assessment. The ascending scale of risk is fairly obvious; it suffices to set out the description of the three central ones:
"Cautious – These investments are expected to have a relatively modest risk to the capital value and/or income. They have the potential for relatively modest capital growth and/or income over the medium to long term. Some products may offer some guarantee of capital protection while some will not.
Balanced – These investments carry a risk of loss to capital value but have the potential for capital growth and/or income over the medium to long term. Typically they do not have any guarantees and will fluctuate in capital value.
Progressive – These investments are expected to have relatively significant risk of loss to capital value but with the potential of relatively more capital growth over the medium to long term. They do not offer any guarantees and will fluctuate in capital value."
Mr Doyle's evidence, which I accept, was that, if a customer's capacity for risk and appetite for risk differed, the defendant's recommendation would be based on the lower-risk assessment, although the option for a higher-risk investment might be presented for consideration. This is consistent with the terms of the Risk and Planning document itself.
20.4 The four questions used for the assessment of capacity for risk were as to the timeframe for the investment, the age of the investor, whether the investor was a first-time investor, and the proportion of investable assets that would be accounted for by the investment. On the basis of the answers given to these questions, the defendant assessed Mr Worthing's capacity for risk as Progressive and Mrs Worthing's as Balanced; she agreed with her assessment, but he disagreed with his. In fact, it is hard to follow the reasoning behind the assessments. Mrs Worthing was assessed as having a lower capacity for risk, because no answer was attributed to her in respect of the final question (proportion of assets); as the relevant assets were jointly owned, the claimants should have been treated in the same way. On the other hand, it might be noted that the assessment proceeded on the basis that the proposed investment would account for 61-85% of the actual investable assets. That was correct only on the basis that an investment of £1.12 million comprised more than 61% of net investable assets remaining after the use of £1.5 million to increase the property portfolio. By the time of the revised version of the Risk and Planning Document, the investment was only £700,000, which was only 47% of the net investable assets. This indicates that the final assessment of capacity for risk was performed conservatively.
20.5 The assessment of appetite for risk was based on the responses given to ten propositions. For each proposition there were four possible responses: strongly agree; tend to agree; tend to disagree; strongly disagree. The exercise was designed to test willingness to take risk by putting broadly similar propositions in different words. The most striking similarity is between proposition no. 1 ("The stability of my capital is more important to me than the return that I may obtain") and proposition no. 9 ("Maintaining the money I have is more important to me than making it grow"). Interestingly, when Mr Worthing first gave his responses in September 2006 he gave diametrically opposed responses to those propositions: he strongly agreed with no. 1 and strongly disagreed with no. 9. In January 2007 he altered his response to no. 1 to "tend to agree" but maintained his response to no. 9. (Mrs Worthing's responses in January 2007 were identical to Mr Worthing's revised responses.)
20.6 Further, the document gave an opportunity to the customer to express agreement or disagreement with the bank's assessment. On the basis of their responses, both claimants were assessed as having a Progressive appetite for risk. However, they both expressed disagreement with that assessment.
20.7 The summary of the overall risk-level assessment on the revised document showed that the maximum overall joint risk level was Balanced. A tick showed that the claimants expressed agreement with that joint assessment, though Mr Worthing had expressed disagreement with his own personal assessment as Progressive risk.
20.8 On the original version of the document, which did not contain a fully completed risk assessment, the Notes read: "Customer [i.e. Mr Worthing] wishes to consider either the Balanced or Progressive IPS profiles." However, on the fully completed revised version, the Notes read:
"After reference to the Profile Summary, Philip + Liz have selected the Balanced profile as they believe this will offer the right blend between equities for potential growth but fairly high risk and bonds to provide relative security and lower risk."
The Financial Planning Report went through a number of revisions; I shall refer only to the final version, dated 15 January 2007, which formed the basis of the investment made by the claimants. Under the heading "Your objectives and needs", the report included the following observations:
"• [Y]ou now seek ongoing investment advice for a capital sum of £700,000 to provide potential for capital growth over the medium to long term. …
• You wish to provide maximum flexibility for your capital, including the opportunity to change your investment strategy in response to your changing needs and circumstances. …
• As you regard this investment as a medium to long term commitment you do not anticipate needing access to the invested capital during the minimum investment term of 5 years.
• You have not stated any investment preferences or objections to any future investments.
• As you have been retained by the company and already enjoy a substantial income from your property portfolio, you do not require an income from your investment for the time being.
• You recognise that inflation will potentially erode your capital and you therefore recognise the need to provide the opportunity for real capital growth, to help provide financial security into your retirement.
• With this in mind you are prepared to accept a risk to your capital.
• Having completed the Risk and Reward Scorecard you have agreed that Balanced investments are most appropriate and you are prepared to accept the risks associated within this category. Having reviewed the investment profiles you have selected the Balanced Equity profile as the most appropriate choice. ...
• You also wish to set aside £2,150,000 to meet the following commitments:
1. Purchase of additional buy-to-let & Commercial Properties £1,500,000 ...
2. Capital gains tax liability £400,000
3. £250,000 towards the purchase of a new motor boat. ...
• We have discussed the benefits of investing via National Savings[;] however you have declined to consider these asset classes as you do not believe there is sufficient potential for capital growth."
The recommendation in the Report was that the claimants invest £700,000 into the Investment Portfolio Service ("IPS") described in the Report. The aims and objectives of the IPS were stated as follows:
"Seeks to provide a positive total return with a medium risk of capital loss in the short to medium term. This will be achieved through broadly balanced proportions of low risk investments, including UK Government fixed interest bonds (gilts), other Sterling-denominated bonds and overseas bonds, and medium risk investments. These will include UK equities and possibly some property funds. There may also be a small exposure to higher risk overseas equity markets to improve diversification. There may also be investment in Funds of Hedge Funds when it is considered to be appropriate. Investments in the profile will be through either collective investment schemes or direct investment."
The Recommendation section of the Report contained a warning in bold print:
"Please note that adopting the IPS profile below will significantly increase the overall risk profile of your total investible assets. We agreed that the reason why it is appropriate to undertake this change was because you seek to provide a better return than conventional bank or building society accounts."
Below, the section showed that the Balanced Profile involved a portfolio comprising 45% bonds, 40% UK equities, 5% overseas equities, 5% hedge funds, and 5% commercial property. The following text appeared underneath:
"Risk factors you need to know about
…
• Investing in equities generally has the potential for higher capital growth over the longer term than investing in, for example, fixed income securities. However, there might be considerable fluctuations in equity prices and there is a greater risk that you might not get all your money back.
• Exchange rate changes might cause the value of any overseas investments held by the portfolio to go up or down."
I have already described the various versions of the Personal Fact Find document; see paragraphs 13 and 14 above. The difference from the earlier versions was the inclusion of a page dealing with the recommendations that had been accepted. This recorded that the claimants had accepted a recommendation for an investment of £700,000 in the Investment Portfolio Service provided by the defendant: "balanced profile[,] option 2". Underneath that entry was written: "Customers have amended their decision to invest from £1,120,000 to above [i.e. to £700,000] by phone. As they have decided to reduce the inv[estment] they have decided against National Savings." Below, Mr Kilborn had signed on 17 January 2007. At the foot of the page the claimants signed on 18 January 2007. Immediately above the claimants' signature was a declaration:
"You confirm that you understand the advice which will be provided by the above named Adviser is based on the information included in this document, any Supplementary Planning Questionnaires, any written report and the Key Features Documentation provided in support of the recommendation. Where recommendations have been made and not accepted by you, you understand that this is your decision and that Lloyds TSB Independent Financial Advisers Limited or its Adviser will not be held liable for this. You confirm that you have been given the opportunity to read these documents in full before signing."
Mr Doyle's file note of the meeting on 18 January 2007 contains the following relevant passages.
"Following our previous meeting Philip [Worthing] had scaled down the initial sum he was looking at from £1m to £600k but I have explained to him that I have done a report also for £700k so as to give him flexibility if he so wished to have direct gilts and corporate bonds as opposed to collectives. I explained the differences between the two approaches.
We have gone through the report in detail[,] describing each asset class and the benefits of multi manager approach to UK and International equities, the benefits of commercial property trusts, they are very familiar with commercial property owning a number of commercial properties themselves[,] and also the hedge funds explaining how these work.
I discussed in detail costs and terms and conditions and they have been provided with full details of the guide to charges and terms and conditions. ...
They have declared themselves happy with the report and have opted to go from the £700k on the balanced profile option 2 and the necessary paperwork was completed and signed. ...
I have also explained to them in detail what happens regarding the opening of their portfolio and they fully understand this. Nigel Kilbourne (sic) will be dealing with the papers and passing these to their location."
The claimants signed an application form for the Investment Portfolio Service and the following month they invested £700,000 in the Portfolio with a Balanced profile. At trial, Mr McMeel expressly and correctly accepted that the investment fell within the industry standard for a medium-risk investment and was properly described as such. The claimants' case as to the initial investment is, in summary, that the defendant was in breach of duty in recommending a medium-risk investment in a portfolio with a Balanced profile; it ought to have recommended a low-risk investment in a portfolio with a Cautious profile. I shall consider this case later. At this stage it is convenient to set out some of the witness evidence that has a bearing on it.
In his witness statement, Mr Worthing said that he and his wife had no investments in financial products or equities. He had never liked shares, because one had no control over the investment and because his father had lost money by investing in shares. Accordingly he kept his money in "bricks and mortar" and in deposit accounts. He said that he had told Mr Doyle and Mr Kilborn that he had no understanding of equities or of investment risk.
"Mr Doyle and Mr Kilborn were well aware that I was not comfortable with anything higher than low risk. ... There was some discussion regarding our risk tolerance and I recall answering some questions regarding this. I told them that I wanted a low risk. Mr Doyle and Mr Kilborn explained that to make a better return than a deposit account a certain amount of risk had to be taken but reassured me that the risk was low and calculated.
"I made it explicitly clear to Mr Doyle and Mr Kilborn that I was only prepared to accept a low risk. ... We were not looking to make big returns, just a modest amount of interest. To me low risk meant that we could not lose a lot of money and also that we would not make huge gains. Had I known that there was even a small risk of substantial losses, I would not have agreed to invest. ...
"I understand that Mr Doyle/Mr Kilborn recommended what was termed a 'balanced' risk portfolio. I honestly do not remember 'balanced' being mentioned, although I do concede that this is in the defendant's documents. In my mind it was clear that I had told them low risk and that is what I thought we had been recommended."
Mrs Worthing's statement (which can be seen to be partly textually dependent on that of her husband) was to similar effect. She stated:
"I do not recall the defendant assessing my attitude to investment risk at any time. If they had done so, they would have ascertained that I had no interest in taking any risks. ... I do not remember either Mr Kilborn or Mr Doyle ever going through my attitude to risk with me. I truly did not think they had scored me. I do not remember ever being presented with a description of what the different categories were. I do not remember agreeing to 'balanced' or it ever being explained to me what this meant. We were always cautious and believed that we had selected the lowest risk option available."
In cross-examination Mr Worthing candidly accepted a number of important matters. His objective had been to achieve a medium-term investment giving capital growth that outdid inflation, and he had not been overly concerned about short-term fluctuations in the stock market. He had been given a proper opportunity to read the Risk and Planning document (cf. paragraph 20 above) and had understood the importance of providing accurate responses. His responses "strongly agree" to proposition no. 8 ("My first priority is to maximise the return on my investments, so I am prepared to accept the risk of the value of my investment falling") and "strongly disagree" to proposition no. 9 ("Maintaining the money I have is more important to me than making it grow") indicated that he was prepared to accept the risk of capital loss in the interests of achieving growth; he said, however, that it was difficult to give accurate answers when presented with repeated questions and that his responses had been inconsistent. On 7 November 2006 Mr Doyle had given him the Financial Planning Report (paragraphs 16 and 17 above) and had taken him through it. The Report was substantially similar to the final version, though it was prepared in respect of a proposed investment of £1,120,000 rather than the eventual figure of £700,000; in particular, it was for a Balanced profile. By the time of the meeting on 18 January 2007 the claimants had been in possession of the Report for more than two months, but they did not question the use of a Balanced profile; they only decided to reduce the amount of the investment. The Notes on the final version of the Risk and Planning document (paragraph 20.8 above) correctly indicated that the Balanced profile was the claimants' own choice. It was put to Mr Worthing that he chose a Balanced profile because he was happy with it, and he accepted that that was correct. He did, however, say that to him a Balanced profile meant a "relatively low risk".
In cross-examination, Mrs Worthing confirmed that, although her husband took the lead in the discussions with the defendant, he always "brought [her] up to speed" after meetings and the decision to invest was made jointly. She accepted that Mr Doyle and Mr Kilborn had performed the risk-assessment exercise with her, but she said that she had done so in a very casual way, with no apparent concern that she should understand the process. At first she said that she had not understood the Financial Planning Report. However, when it was put to her, with reference to Mr Doyle's file note of the meeting on 18 January 2007, that she and her husband had declared themselves happy with the Report, she replied: "Yes, I suppose we were." She accepted that they could not have been happy with the report if they had indeed specified "low risk", though she said that the understanding they took away from the meeting was that the investment was low risk. She said: "I thought 'Balanced' meant safe." However, she also confirmed Mr Worthing's evidence that, after making the investment, they largely "forgot about" the money. When asked about this, she accepted that the reason for this was that they both knew that in the short to medium term the value of the investment might fall.
Mr Doyle's evidence was, naturally enough, largely reliant on his contemporaneous file notes. Mr Worthing had described Mr Doyle as an impressive man; he was also an impressive witness, giving answers thoughtfully and intelligently and with conviction. The impression of scrupulous honesty he conveyed tends to be confirmed by testing his evidence against the documentation. Mr Doyle strongly disagreed with the suggestion that there was a casual approach to the defendant's dealings with the claimants. (The specific evidence was given with direct reference to the later meeting in March 2008, but the terms in which it was given indicated its general application.) He said that the risk-assessment had been completed by Mr Kilborn, though in his presence. That a customer gave apparently inconsistent answers in respect of "appetite for risk" was not a matter of concern; the process involved discussion and probing and the answers had to be viewed in combination. Based on the claimants' risk-assessments, he (Mr Doyle) would not have accepted them for a higher-risk profile than Balanced, unless they had insisted on the Progressive profile and that had been sanctioned by the defendant's compliance department.
The terms of the contract formed between the claimants and the defendant after the meeting on 18 January 2007 were contained in the "Asset Management Service—Investment Portfolio Service and Portfolio Administration Service—Terms and Conditions". The following provisions are potentially relevant to a consideration of the subsequent relations between the parties:
"1. Your Rights
a. We undertake to use all reasonable care and skill in the performance of this agreement. We are authorised and regulated by the Financial Services Authority. ... We are therefore bound by the rules which it has made for your protection.
...
c. We will treat you as a private customer for the purposes of the applicable regulations ..."
"2. Your Portfolio
a. The investment range for the securities in your portfolio under the Investment Portfolio Service (IPS) (see paragraph 3.a) will comprise collective investment schemes of which the provider is normally a Lloyds TSB group company. ..."
"3. The Service
3a. Investment Portfolio Service (IPS)
i. Under this form of the service (IPS), we will provide management and administration of securities in your portfolio on a fully discretionary footing within your investment objective.
ii. We are responsible on a continuing basis for managing the securities in your portfolio, in accordance with the investment objective and risk category that you have chosen for your portfolio.
iii. We will contact you from time to time to check whether there have been any changes in your circumstances and requirements that could affect the way in which we act on your behalf. You should inform us then or at any time if there are or have been any material changes that may affect your investment objective or attitude to risk for your portfolio, so that we can discuss with you how best to meet your future needs and objectives."
"5. Custody
a. We will provide custody of the securities in your portfolio and our service will include safekeeping of documents of title (if any) and registration of the securities concerned ...
"11. Fees and Expenses
a. You agree to pay the fees, charges and interest payable under this agreement ... Where holdings in a collective investment scheme are held in your portfolio, you should be aware that in addition to the fees and charges mentioned above, the fund managers controlling those investments will impose further charges which affect the price of those holdings. These include initial charges made on the purchase, annual charges for investment management and certain other charges that may be charged to the fund in which the investment is made."
"13. Limits of Responsibility
a. No warranty is given as to the performance or profitability of any securities or moneys held or acquired for the account of your portfolio nor can responsibility be accepted for any decrease in, or loss of opportunity to increase, its value except in cases of our wilful default or our negligence. Liability will be accepted for errors of fact or judgement or lawful acts or omissions only in cases of such wilful default or negligence. This paragraph will not exclude or restrict any duty or liability which we may have or owe to you under the applicable regulations."
Appendix A to the Terms and Conditions was headed "Risk Warnings"; it commenced:
"Past performance of investments should not be seen as an indication of future performance. The value of investments and the income from them may fall as well as rise and you may not get back the amount you invested."
The fees and charges payable in accordance with paragraph 11 of the Terms and Conditions were summarised in a separate document. There was an initial charge of 1.5% of the amount of any capital investment. There was an annual service charge of 1% of the value of the Portfolio, subject to a minimum charge of £1000 p.a. after the first year, for the management and administration of the securities in the Portfolio. In addition, there were ongoing fund management charges in respect of particular funds within the portfolio. Dealing fees were chargeable on sales of equities, gilts and bonds within the portfolio for the purpose of reinvestment within the Portfolio; these did not arise in the claimants' case.
The defendant's internal documentation shows that it diarised 26 January 2008 as the "Ongoing KYC [Know Your Client] Due Date", that is, the date for an annual review of the claimants' needs and requirements. On 15 January 2008 Mr Doyle wrote to the claimants. The letter read as follows:
"As you know, the way we manage your investments reflects your personal circumstances and requirements, based on the most recent information you provided to us. It's important that we give you the opportunity to update us if there have been any changes that may affect the way we act on your behalf. These changes could include:
• Your income needs
...
• Your attitude to investment risk
• Significant changes to your overall asset position
Regarding your attitude to investment risk, last time we assessed the approach you required for this portfolio we agreed that you wanted a balanced approach (see attached for full description).
Based on the information you provided at the time, we recommended that you invest in the Balanced portfolio. ... This profile seeks to provide a positive total return with a medium risk of capital loss in the short to medium term. ...
If your circumstances or requirements have not changed significantly, and your attitude to risk and description of your current portfolio still meets your requirements[,] you don't need to respond to this letter or take any action. We will continue to manage your portfolio as we do now.
If your circumstances and requirements have changed significantly—or are likely to in the near future—please complete the Notification of Changes Form attached and post it back to me. ..."
Enclosed with the letter were a Notification of Changes Form and a document summarising the different investment Profiles.
The claimants did not return the Notification of Changes Form. Despite this, a review meeting was arranged; it could not be held in January, as the claimants were out of the country, and was instead arranged for 13 March. The contemporaneous documents (Mr Doyle's agenda for the meeting and his file note of the meeting, and the defendant's internal communications) and the witness evidence show that the position at the date of the meeting was as follows:
The £400,000 that the claimants had earmarked for the discharge of their capital gains tax liability had instead been used to make family gifts.
The tax of £437,407 had instead been paid by means of an overdraft facility on the claimants' High Interest Cheque Account with the defendant. At the date of the meeting the overdrawn balance was £356,716. The overdraft facility of £360,000 was due for review on 1 April 2008. The applicable rate of interest was 1.5% over the defendant's base lending rate. The claimants told Mr Doyle that they were "uncomfortable" with the level of debt and wanted to explore means of reducing it.
When the overdraft was arranged in January 2008, the claimants intended to clear it by the end of March out of the proceeds of sale of business premises. The expected sale price was £1.9 million. However, by 13 March the properties had not been sold. An offer had been received for £1.6 million but Mr Worthing had been advised that he ought to expect to achieve a price of around £1.9 million. It was believed that there was at least some prospect of achieving a sale at a price around that figure before 6 April, when the tax consequences of the sale would alter. As Mr Worthing confirmed in cross-examination, as at 13 March 2008 the preferred plan remained to clear the overdraft from the proceeds of sale, with alternative sources of repayment being considered if the properties could not be sold for an acceptable price.
The value of the portfolio had dropped to £675,712. This was a reduction of 3.5% from the value of the initial investment. In the same period the FTSE 100 index had dropped by 10.5%.
The annual rental income received by the claimants from their property portfolio had fallen from £100,000 to £20,000.
There is some issue, though relatively small, as to what was said at the meeting regarding the Portfolio. Mr Doyle went through the claimants' financial affairs with them in a similar fashion to the fact-finding exercise in the earlier meetings. In the file note that he dictated on the same day or the following day Mr Doyle recorded the following:
"The options regarding reducing or managing the [overdraft] debt are as follows:
1. If the commercial properties sell in the near term, this will take care of the position.
2. Strip out some of the fixed interest holdings in the portfolio to reduce the debt.
3. Speak to their accountant about switching the debt against the commercial and domestic let property to at least get tax relief on the interest payments. I am not sure if this is possible but they will speak to their accountant about that. That idea certainly appealed to Phil Worthing."
We had a lengthy discussion about the portfolio performance and the state of the market. I confirmed my views that the current market is certainly volatile. I could not give them comfort in that we may not see a lower market from where we are now but are (sic) expectations are of a recovery towards the end of this year. I explained my views were that this was not a market to be selling equity funds or commercial property funds. I further confirmed that the fixed interest out of the portfolio had clearly offered a significant buffer against market volatility in recent months. They appear to have accepted my recommendations to stick with the portfolio at this stage and will give some thought as to what they want to do about reducing the debt.
...
We may need to explore as a short term measure increasing the facility on the account to £400,000. There is no way that Philip Worthing will countenance arrangement fees to revisit that and they would not want to pay more than 1.5% over base. It has to be accepted that the portfolio is at risk due to performance.
If they do decide to reduce the fixed interest holdings I have agreed with them that we would not be looking to rebalance to increase the fixed interest holdings at the expense of selling equities in a depressed equity market. They believe that is a sensible approach."
After the meeting, an extension of the overdraft was arranged until 30 June 2008; at the claimants' request the facility was limited to £370,000.
Eventually the anticipated sale of the commercial properties fell through. The overdraft remained in place. On 18 July 2008 Mr Worthing spoke by telephone to Mr Doyle and also to Mr Tony Hollingbery, a Private Banking Manager with the defendant, and instructed them to sell the Portfolio. He confirmed the instruction in writing on the same day. There are two contemporaneous records of the oral instruction on the defendant's file. In an internal memo, Mr Hollingbery wrote:
"The client has been considering his position for some time and due to an overdraft facility with us of £360k he wishes to distance himself from stock market investments."
A file note made by Mr Doyle records:
"Phil and Wendy have an overdraft with us, which currently stands at £364,000.
They have been struggling to accept this position, as they were hoping some external funds would arrive to clear the debt. This is no longer happening and they have had to make a difficult decision about the portfolio.
Phil has requested the portfolio be sold in full and the proceeds paid to his bank account. ...
I talked through the option of selling the Fixed Interest worth £300k and holding the equity to allow some longer term recovery but Phil would prefer to have the remaining cash in his bank account.
...
Phil is disappointed to sell but circumstances with the borrowing have controlled this situation."
The Portfolio was duly sold. The proceeds received by the claimants were £657,388. If the Portfolio had been sold immediately after the meeting on 13 March 2008, the claimants would have received £676,153; that is £18,765 more than they received four months later.
It is, again, convenient to summarise the witness evidence relating to the annual review, the meeting on 13 March 2008 and the eventual decision to sell the Portfolio.
In his witness statement, Mr Worthing stated that he and his wife had told Mr Doyle that, as their money was tied up in investments, they had little available money; this was why they had such a large overdraft, and they were uncomfortable with that level of debt. "We were trying to sell the 4 properties but we were struggling to find an offer that was acceptable." They told Mr Doyle that they were disappointed and surprised at the performance of the Portfolio: they told him that they understood that "the stock market goes up and down, but at the moment it appears to just be going down"; they could see the entire investment disappearing in front of their eyes and "could not afford to risk losing any more money." He stated:
"We told Mr Doyle that we were strongly considering pulling out of the Portfolio to prevent any more loss. In particular we felt that it may be better to pay off the overdraft with the money received from the investment. ... Mr Doyle advised us that the cause of the loss was down to the almost unprecedented global financial crisis ... and that, although he could not guarantee it would not fall further, he was sure that there would be a recovery soon. ... Mr Doyle was adamant in his advice that we should remain invested and not pull out of the Portfolio. Mr Doyle alleviated my concerns about the Portfolio. We were uneasy about his recommendation to stay invested but we thought that as he was the expert we should follow his advice."
"At no time in this meeting did Mr Doyle attempt to undertake our attitude to investment risk."
When he was cross-examined, Mr Worthing accepted that he had not responded to the defendant's letter of 15 January 2008, which was sent with a further explanation of the various risk profiles, by saying that a Balanced profile and a medium risk were wrong for him; he had not returned the Notification of Changes form, and he had not queried the risk profile with Mr Doyle. About a week before the review meeting, he had spoken to Mr Doyle by telephone to complain about the withdrawal of fees from the claimants' account, but he had not said anything about the risk profile. He was asked whether it could therefore be taken that he was happy with medium risk and a Balanced profile, and he responded that it could. Mr Worthing accepted that in early 2008 he was looking to the sale proceeds of the commercial properties to repay the overdraft. At the date of the meeting with Mr Doyle, he remained optimistic of achieving a sale of the properties at an acceptable price within a reasonable time, and there was some prospect of achieving a sale before 5 April. Mr Worthing accepted that his preference remained to pay off the overdraft from the proceeds of sale and to look to another source of funds only if a sale were not achieved. The decision to sell the Portfolio was taken after the sale of the properties fell through. However, the defendant's file note was incorrect in recording that the claimants took the decision to sell reluctantly. The claimants felt that they had lost too much money already and that, if they left their investment in the Portfolio, they would only lose more.
Mrs Worthing's statement was to similar effect to that of her husband. She stated: "I recall Mr Doyle stating that we should definitely remain invested in the Portfolio, in equities and property, as this was not the time to disinvest. I recall that he was very bullish about this. ... I did not feel as though Mr Doyle was interested in seeing if the original investment was suitable or not."
When she was cross-examined, Mrs Worthing said that the attitude of herself and her husband to risk had not changed between January 2007 and March 2008. She denied that the reason she had not challenged the Balanced profile after receipt of the letter of 15 January 2008 was that she was happy with medium risk; "I thought Balanced meant safe." However, Mrs Worthing accepted that she had known that the value of the Portfolio might fall in the short to medium term; it was because they knew that this might happen that they were not too concerned when they saw the quarterly reports for the Portfolio. Regarding the meeting on 13 March 2008, she said that she had not wanted to keep the Portfolio, and she felt it pointless to have both an overdraft and an investment that was losing money, but she felt embarrassed to say so; Mr Doyle was "desperate" that they keep it, and the fact that he was meeting them in their own home made it more awkward to insist. In the end, she felt that they should perhaps "give it another month".
Mr Doyle's evidence was, again, based largely on his file note and his usual practice, though he did have some recollection of the meeting on 13 March 2008. His witness statement said that there had been a lengthy discussion about the performance of the Portfolio. The claimants "were clearly contemplating liquidating the investment". He believed that he would have told them that he did not think it was a good idea to do so at that time. The Portfolio was intended as a medium- to long-term commitment of at least five years; to sell after only fourteen months would have been a mistake. He told the claimants that, on the basis of his experience, he would expect markets to improve. He stated:
"Mr Worthing has, I understand, raised the issue of why I did not undertake an assessment of the claimants' attitude towards risk at our meeting. The fact was that this was unnecessary as it had previously been undertaken and agreed with the claimants in October/November 2007 [scil. 2006] when the IPS was first recommended[,] and on 15 January 2008 (less than 3 months previously) I had written to the claimants to enquire as to whether their attitude towards investment risk remained as balanced. Accordingly a further assessment was unnecessary as at March 2008."
In cross-examination, Mr Doyle said that, although the claimants had shown natural concern at the fall in the value of the Portfolio, they had not been greatly concerned about it. He was challenged about this and was asked about a memo that he sent to a member of the Credit & Risk Team on the day after the meeting, which said: "The client is not happy with portfolio performance and is considering closing." His reply was that the claimants were indeed thinking of selling the Portfolio; that, however, was not because of major concerns about risk but because they wanted to address the overdraft. The memo was intended to add weight to his request to the Credit & Risk Team to extend the overdraft in order to give time for the commercial properties to be sold. Mr Doyle confirmed that he did not think it sensible to make strategic alterations to a medium- to long-term investment strategy after less than 18 months or to sell equities in a depressed market. If resort were to be had to the Portfolio to pay off a debt, it was better to sell the bonds within the Portfolio than to crystallise existing short-term losses by selling equities.
The law
In view of the large measure of agreement as to the applicable regulatory framework, it is only necessary for the purposes of this judgment to set out the main points.
In connection with the initial investment in early 2007, the defendant was giving investment advice, which was a regulated activity under Part 1 of Schedule 2 to FSMA. At all relevant times until the making of the initial investment, the giving of investment advice was subject to the Financial Service Authority's Conduct of Business Rules ("COB"), which were made by the FSA under the rule-making power conferred by section 138 of FSMA. The provisions of COB comprised Rules and Guidance. At the time, section 150 of FSMA conferred a right of action for breach of a Rule; the relevant provisions are now in section 138D. Section 150(1) provided:
"(1) A contravention by an authorised person of a rule is actionable at the suit of private person who suffers loss as a result of the contravention, subject to the defences and other incidents applying to actions for breach of statutory duty."
It is common ground that, for the purposes of section 150(1) the defendant was an authorised person, the claimants were private persons, and the COB Rules were rules within the meaning of the subsection.
As I have already made clear, on account of a limitation defence the claimants cannot advance any claim in respect of the initial investment. Nevertheless, because of the reliance placed by Mr McMeel, in developing his argument that the defendant was in breach of duty in 2008, on what is said to have been the bank's breach of duty in connection with the initial investment, it is relevant to refer to some of the COB Rules applicable at that earlier time; it is unnecessary for my purposes to refer expressly to the applicable Guidance.
"COB 2.1.3 R
When a firm communicates information to a customer, the firm must take reasonable steps to communicate in a way which is clear, fair and not misleading."
"COB 5.2.5 R
Before a firm gives a personal recommendation concerning a designated investment to a private customer ... it must take reasonable steps to ensure that it is in possession of sufficient personal and financial information about that customer relevant to the services that the firm has agreed to provide."
"COB 5.3.5 R
(1) A firm must take reasonable steps to ensure that, if in the course of a designated investment business ... it makes any personal recommendation to a private customer to ... buy ... a designated investment ... the advice on investments ... is suitable for the client."
"COB 5.4.3 R
"A firm must not (1) make a personal recommendation of a transaction ... with, to or for a private customer unless it has taken reasonable steps to ensure that the private customer understands the nature of the risks involved."
It is also common ground that the defendant owed to the claimants a duty of care at common law to exercise reasonable care and skill in and about advising them in relation to the initial investment, and that discharge of that duty required compliance with the applicable COB Rules.
On 1 November 2007 the COB Rules were replaced by the Conduct of Business Sourcebook ("COBS"), which implemented the requirements of European Directive 2004/39/EC, the Markets in Financial Instruments Directive ("MiFID"). The structure of COBS is similar to that of COB, with a distinction between mandatory Rules and advisory Guidance. In 2008 section 150 of FSMA continued to apply so as to give to a private person a right of action for breach of a COBS Rule. In respect of the advice given to them by Mr Doyle in March 2008, the following COBS Rules are either specifically relied on by the claimants or otherwise relevant to consideration of the issues:
"COBS 2.1.1 R
(1) A firm must act honestly, fairly and professionally in accordance with the best interests of its client (the client's best interests rule)."
"COBS 2.2.1 R
(1) A firm must provide appropriate information in a comprehensible form to a client about ... (b) designated investments and proposed investment strategies; including appropriate guidance on and warnings of the risks associated with investments in those designated investments or in respect of particular investment strategies; ... so that the client is reasonably able to understand the nature and risks of the service and of the specific type of designated investment that is being offered and, consequently, to take investment decisions on an informed basis.
(2) That information maybe provided in a standardised format."
"COBS 9.2.1 R
(1) A firm must take reasonable steps to ensure that a personal recommendation, or a decision to trade, is suitable for its client.
(2) When making the personal recommendation or managing his investments, the firm must obtain the necessary information regarding the client's:
(a) knowledge and experience in the investment field relevant to the specific type of designated investment or service;
(b) financial situation; and
(c) investment objectives;
so as to enable the firm to make the recommendation, or take the decision, which is suitable for him."
"COBS 9.2.2 R
(1) A firm must obtain from the client such information as is necessary for the firm to understand the essential facts about him and have a reasonable basis for believing, giving due consideration to the nature and extent of the service provided, that the specific transaction to be recommended, or entered into in the course of managing:
(a) meets his investment objectives;
(b) is such that he is able financially to bear any related investment risks consistent with his investment objectives; and
(c) is such that he has the necessary experience and knowledge in order to understand the risks involved in the transaction or in the management of his portfolio.
(2) The information regarding the investment objectives of a client must include, where relevant, information on the length of time for which he wishes to hold the investment, his preferences regarding risk taking, his risk profile, and the purposes of the investment.
(3) The information regarding the financial situation of a client must include, where relevant, information on the source and extent of his regular income, his assets, including liquid assets, investments and real property, and his regular financial commitments."
"COBS 9.2.3 R
The information regarding a client's knowledge and experience in the investment field includes, to the extent appropriate to the nature of the client, the nature and extent of the service to be provided and the type of product or transaction envisaged, including their complexity and the risks involved, information on:
(1) the types of service, transaction and designated investment with which the client is familiar;
(2) the nature, volume, frequency of the client's transactions in designated investments and the period over which they have been carried out;
(3) the level of education, profession or relevant former profession of the client."
"COBS 9.2.6 R
If a firm does not obtain the necessary information to assess suitability, it must not make a personal recommendation to the client or take a decision to trade for him."
It is common ground that the defendant owed to the claimants a duty of care at common law to exercise reasonable care and skill in and about advising them regarding the retention or disposal of the Portfolio in 2008, and that discharge of that duty required compliance with the applicable COBS Rules.
I have set out passages from the Terms and Conditions applicable to the ongoing relationship between the claimants and the defendant (paragraphs 32-34 above). I shall deal later in this judgment with Mr McMeel's submissions concerning the scope of the defendant's continuing contractual obligations.
Summary of the claimants' case
The case advanced by Mr McMeel on behalf of the claimants at trial was based on breach of statutory duty, breach of contract and negligence. His careful argument may be summarised as follows.
55.1 At the time of the original investment advice in 2006 and early 2007, the defendant failed to ensure that the claimants genuinely understood the nature and risks of the investment they were making. The claimants were first-time investors in financial products; their investment history was confined to commercial property, money in the bank, and Treasury Deposits. Although the claimants expressed agreement with a Balanced profile, this is not determinative of the adequacy of their understanding. The standard documentation used by the defendant was insufficient to bring home the realities to inexperienced investors. Mr Worthing's "authentic voice" is heard in his desire for an investment with "relatively low risk" (see the file note of the meeting on 29 September 2006: paragraph 11 above) and in his very cautious response to the first proposition in the "appetite for risk" section of the Risk and Planning document (paragraph 20.5 above). Mrs Worthing's evidence was that she believed that "balanced" meant "safe"; clearly she lacked proper appreciation of the risks involved in exposure to the market.
55.2 This initial failure on the part of the defendant constituted breaches of COB 2.1.3 R, COB 5.3.5 R, and COB 5.4.3 R (paragraph 50 above). More importantly for present purposes, it resulted in the claimants' investment profile being identified as Balanced (i.e. medium risk), whereas it should have been identified as Cautious (i.e. low risk).
55.3 At all times after the initial investment and until the Portfolio was sold in July 2008, the defendant was under a continuing contractual duty to correct its initial default by either advising that the investment be transferred into a Cautious profile or advising that it be sold.
55.4 Further, when Mr Doyle on behalf of the defendant carried out the yearly review in March 2008, he failed either (i) to correct the original incorrect risk assessment or (ii) to ascertain that the original assessment, whether or not incorrect when it was made, was no longer appropriate for the claimants. He ought to have done the former, because the defendant was obliged to do so by COBS 9.2.1(1) R and by its continuing contractual obligations. He ought to have done the latter, because the information available to him indicated both that the claimants' investment objectives had changed and that their reaction to the drop in value of the Portfolio was inconsistent with a Balanced profile.
55.5 If the defendant had complied with its continuing duties: (a) it would have advised the claimants to disinvest, or to convert the investment into one with a Cautious profile, and they would have done so; the ongoing nature of this duty means that there was a breach as at 16 March 2007, which is the earliest date on which any cause of action that is not statute-barred can have accrued, and the claimants are entitled to recover the damages equal to the difference between the value of the Portfolio at that date and the value upon eventual sale; alternatively, (b) it would have advised them at the annual review in March 2008 that they should disinvest, and they would have done so; accordingly the claimants are entitled to recover damages equal to the difference between the value of the Portfolio on 13 March 2008 and its value upon eventual sale. (In connection with this second way of putting the case, a half-hearted attempt was made to suggest that the review ought to have taken place before 13 March 2008. However, in my judgment no adequate basis has been shown for holding that the defendant was in breach of any duty by reason of the fact that the review meeting was held on 13 March and I reject this attempt to push the relevant date back in time.)
Consideration of the case summarised above requires some further observations and findings on the facts and evidence set out above.
Discussion
At the heart of the claimants' case is the contention that the defendant acted in breach of duty in 2007 in recommending a Balanced profile for the claimants' investment. I reject that contention.
The initial investment
It is clear and I find that the claimants expressed a desire to invest in a portfolio with a Balanced profile, rather than a Cautious or a Progressive profile. It is accepted that they had the capacity to invest with a Balanced profile; the contention is that the defendant failed to take adequate steps to explain to them the meaning and implications of such a profile or to ascertain that their appetite for risk was properly to be understood as cautious. The evidence set out above is against these contentions and I reject them.
It is wrong to suppose that the beginning and end of the enquiry is provided by Mr Worthing's mention on 29 September 2006 of wanting "relatively low risk" (paragraph 11 above) and his very cautious response to the first proposition in the "appetite for risk" section of the Risk and Planning document (paragraph 20.5 above). As for the former, the relevant question for exploration was what "relatively low risk" meant, having regard to the implications of different investment strategies for capital security and capital growth. Mr Doyle expressed the view that a Balanced profile was properly to be considered as relatively low risk. At all events, the need was to tease out the meaning and implications of such expressions of desire, and to test the wishes and aspirations of the clients, by a process of risk assessment. That is what the defendant did; it is no more to be criticised for doing so than it would have been if a client had expressed a wish to "go for growth" and it had nevertheless declined to recommend a Progressive profile before it had carried out a risk assessment.
As for the assessment of appetite for risk, Mr McMeel suggested that the inconsistencies of the responses given by the claimants to propositions nos. 1 and 9 and to other propositions indicated that the exercise provided an unreliable basis for an assessment of appetite to risk. He submitted that the response to proposition no. 1 showed clearly that the claimants were cautious investors; that should have been the end of the matter. I disagree. As Mr Doyle and Ms Claro explained, the exercise is designed to avoid reliance on single, unreflective responses; rather it probes the customer's attitudes and provokes thought and discussion. Focus on one particular response, be it to proposition no. 1 or to propositions nos. 8 and 9 or to any other proposition is itself unreliable, because it risks attribution of attitudes that are not genuinely those of the customer and evades the process of reflection that is integral to the assessment.
Mr McMeel accepted that on one level the claimants understood that they were investing with a Balanced profile and what that meant. But he submitted that the steps taken by the defendant and the "stock phrases" used in its standardised documentation were inadequate to bring home to the claimants, first-time investors with no experience of the world of equities or bonds, what the risks of investment were in practical terms. The defendant ought to have been more concrete and direct in its approach; it should have asked questions to the effect: "Are you comfortable if the value of the investment falls by 10%? What about 20%? Or 30%?"
It is right to bear in mind that the claimants had not previously invested in financial products, other than the practically risk-free kind such as deposit accounts and Treasury Deposits. But it will not do to paint them as naïve, unsophisticated or timid. Both of them are obviously intelligent. Mr Worthing has been a remarkably successful businessman. They are clearly a close couple, who had joint finances and made their investment decisions on a genuinely joint basis. They were not ignorant about the implications of exposure to the financial markets, at least in general terms; Mr Worthing's evidence concerning his father's unhappy experience confirms that point, if it were not otherwise likely. Their approach to life was not one of putting money safely on deposit. They had a substantial property portfolio and were intending to expand it significantly with the use of a high level of borrowing; it is not credible to suppose that they believed investment in commercial property to be risk-free, though they clearly believed that it provided the opportunity for substantial capital growth. They had spent a very large amount of money on the purchase of a motorboat; though it might properly be said that that was for pleasure rather than investment, the purchase casts some light on their attitude to retention of money. The very cautious nature of the investment of the surplus of the proceeds of sale of the business before the investment in the Portfolio does not demonstrate a propensity to caution; it was by way of a short-term arrangement, while decisions were made as to what to do with the money in the longer term, and a reason for seeking the defendant's advice on investment was to achieve greater returns in the mid- to long-term.
The defendant was entitled to use standardised documentation for the purpose of explaining to its customers the nature of its products and the risks attendant on them; that entitlement is now expressly recognised by COBS 2.2.1 R. There is a clear advantage in using such documentation, because it avoids the vagaries of inconsistent and perhaps unclear explanations and information and provides a clear reference for assessment and approval by the regulatory authorities. The documentation used by the defendant with respect to the claimants was clear and straightforward in its explanations of the risks involved in a Balanced, as distinct from a Cautious, profile. Indeed, Mr McMeel did not identify any respect in which it could be said to be unfair, unclear or misleading (cf. COB 2.1.3 R). Moreover, although the investment strategy was ultimately a choice for the customer, that choice came after a process of assessment that was designed to probe the customer's understanding and attitudes. Once it is accepted that no individual response, whether to proposition no. 1 or otherwise, can properly be accepted as determinative and that the claimants' responses taken as a whole indicate a Balanced profile, the remaining complaint is that the risk-assessment ought to have involved more specific and concrete questions (cf. paragraph 61 above). I reject that complaint. The risk-assessment was a robust method of probing and assessing attitude to risk and was properly applied. (I reject Mrs Worthing's evidence that the defendant's approach to the meetings on 18 January 2007 and 13 March 2008 was casual, and I accept Mr Doyle's contrary evidence, which is consistent with the contemporaneous documentation, with Mr Worthing's view that Mr Kilborn and Mr Doyle were impressive and with my impression of Mr Doyle's professionalism.) The risk-assessment was not an exercise in prediction of possible gains, possible losses or the relationship between the two. Questions such as those proposed by Mr McMeel involve artificiality and abstraction, the more so the more potentially meaningful they become ("Would you accept a w% risk of a x% loss in return for a y% chance of a z% gain?", and so on) and I see no reason to suppose that they would provide a better understanding of a customer's attitude to risk, far less that they should be mandatory for first-time investors. Mr Doyle said simply: "It is neither possible nor helpful to put this in terms of percentages. Markets go up and down." I agree. It might also be observed that the contention that the defendant ought to have asked different questions was not pleaded in either the original or the amended particulars of claim and was not supported by expert evidence.
Further, and more importantly, the evidence shows clearly that the claimants understood what they were getting and got what they wanted. This is demonstrated by the documentation and the witness evidence summarised above. The claimants' full involvement in the process is shown in particular by their only qualified agreement with the results of the risk-assessment and by their decision to reduce the amount of their investment from £1,120,000 to £700,000. Their desire for a medium-risk investment with a Balanced profile is shown in particular by their stated investment objectives, their responses on the risk-assessment, their decision in the light of the reduced investment to eliminate the component of low-risk National Savings (paragraph 24 above), their instructions to proceed as recorded by Mr Doyle and on the Risk and Planning document (paragraph 20.8 above), and their contentedness to "forget about" the investment after it had been made because fluctuations were to be expected. It is also shown by what happened in 2008. Even if, contrary to my view, the defendant ought to have asked different questions for the purpose of ascertaining the claimants' attitude to and understanding of risk, the evidence does not support the conclusion that such different questions would have resulted in a different investment strategy.
I shall mention briefly one aspect of the case that was raised in the amended particulars of claim and discussed in Mr Levett-Scrivener's evidence. The complaint was made that, in view of the claimants' existing commercial property portfolio, it was inappropriate and unsuitable to recommend that the claimants invest in a Portfolio containing a 5% component of commercial property (paragraph 23 above). This complaint does not advance the case. First, it was ultimately not pursued as a substantive allegation. Second, it is unpersuasive as an allegation of unsuitability. The Balanced Portfolio was, so to speak, an "off-the-peg" investment package. The element of commercial property contained in it was very small as a proportion of the Portfolio and negligible as a proportion of the claimants' total investments and cannot in my view justify treating the Portfolio as unsuitable. In fairness, Mr Levett-Scrivener viewed the 5% component and the existing commercial property portfolio together; he considered that the defendant ought to have advised the claimants that they already had an imbalanced portfolio. That, however, is not the pleaded case; the pleaded case is that the 5% component represented lack of diversification. Third, Mr Levett-Scrivener made clear that the 5% component was material to diversification, not to risk. Fourth, there is no evidence that removal of the 5% component would have improved the claimants' ultimate financial position.
The continuing contractual obligation
The discussion and conclusions in paragraphs 57 to 64 above are sufficient to dispose of all aspects of the claimants' claim, except their allegation that Mr Doyle gave them incorrect advice in March 2008. However, I shall consider the case that was advanced in respect of continuing contractual obligations; see paragraph 55.3 and alternative (i) in paragraph 55.4 above.
There are at least three different ways in which it might be open to the claimants to contend that the defendant was under continuing contractual obligations in respect of the initial investment advice.
1) The original investment advice was given under a contract, but the advice, being incorrectly given, did not discharge the defendant's duty under the contract and the defendant remained contractually bound to perform that duty; such performance required the defendant to correct its original advice.
2) After the initial investment advice was given, a new contract came into existence, under which the defendant was under an absolute obligation to correct any incorrect advice it had originally given.
3) Whether under the contract pursuant to which the initial investment advice was given or under a new contract that came into existence thereafter, the defendant was required to conduct periodic reviews; and in conducting those reviews the defendant was required to exercise reasonable care and skill and to comply with the COBS Rules.
I shall refer to these as Alternative 1, Alternative 2 and Alternative 3 respectively. In his submissions, Mr McMeel did not distinguish between Alternative 1 and Alternative 2, because he treated everything done by the defendant as having been done under a single contract. His primary submission, accordingly, was that, having given incorrect investment advice in January 2007, the defendant was at all times thereafter under an absolute contractual obligation to correct that advice by recommending that the claimants either reinvest in a portfolio with a Cautious profile or disinvest; this has the same effect as saying that at each moment after the giving of the incorrect investment advice there is a new breach by way of a failure to rectify the earlier breach. His secondary submission, if there was no such obligation, was that Alternative 3 obtained.
The earlier parts of this judgment dispose of Alternative 1 and Alternative 2 on the facts and also of Alternative 3 insofar as it relates to the correction of earlier advice. However, and in any event, in my judgment:
1) Alternative 1 cannot apply, because (a) the original investment advice was not given under any, or alternatively any pleaded, contract and (b) if there were such a contract it would not generate any relevant continuing obligations;
2) Alternative 2 cannot apply, because the contract that came into existence after the original investment advice was given did not impose any relevant obligation (that is, any obligation such that, for each moment when the defendant had not corrected its earlier advice, there was a continuing breach consisting of the failure to correct it);
3) Alternative 3 does apply, because a new contract came into existence after the original investment advice. However, the obligations under it did not impose an absolute duty to correct any earlier error in the original investment advice; they required the defendant to conduct reviews with reasonable care and skill and in accordance with the COBS Rules. I shall discuss Alternative 3 below under the heading "The 2008 Review".
The particular contractual terms that Mr McMeel relied on in argument at trial as creating continuing contractual obligations were those in the Terms and Conditions: see paragraphs 32 to 34 above. There was little attention at trial to questions of contract formation. In my judgment, the documentation indicates that the Terms and Conditions governed the parties' relationship only after the meeting on 18 January 2007. It was as a result of the investment decision taken at that meeting that the claimants made an application for the Investment Portfolio Service and Portfolio Administration Service. Their application form was signed by the claimants on 18 January 2007 and in acceptance on behalf of the defendant on 26 January 2007. It is clear that the Terms and Conditions governed the relationship between the parties from the date of acceptance. However, there is no evidence that the Terms and Conditions formed part of any contract between the parties before that date, and as the claimants did not sign up to the Asset Management Service before they applied to do so on 18 January 2007 it would be for them to discharge the burden of showing how the Terms and Conditions could have applied at that date.
In the amended particulars of claim, paragraph 5, it is alleged that the defendant's retainer to give investment advice to the claimants came into existence in or about September 2006. Various documents are said in paragraph 6 to evidence the retainer; these include the Terms and Conditions and the application form dated 18 January 2007, although I do not see that either of those documents evidences a contract made several months earlier. The amended defence, paragraphs 7 and 8, expressly denied that there was a retainer for the giving of investment advice. The defendant did not resile from that denial at trial, though Mr Mantle did not devote much attention to contractual issues in submissions that were primarily directed to the facts. I should note that no case was pleaded or advanced that the initial investment advice was provided under some general contract of banker and customer made before September 2006.
None of this has any bearing on the application of the COB Rules or the existence of a common-law duty of care in the giving of investment advice between September 2006 and January 2007. However, it does have relevance to Mr McMeel's argument that the original investment advice was given in purported performance of a contractual obligation but that the giving of the advice did not discharge that obligation, which accordingly subsisted and continued to bind the defendant at each moment thereafter. In the absence of proof that there was such a contractual obligation at the outset, the argument falls at the first hurdle.
Even if this last conclusion were wrong, the case advanced at trial regarding a continuing contractual obligation would remain untenable. The amended particulars of claim, at paragraph 9.1, relied on only one contractual obligation, namely the implied obligation under section 13 of the Supply of Goods and Services Act 1982 to exercise reasonable care and skill in and about giving investment advice. If indeed the original investment advice was given pursuant to a contract, the implied obligation under section 13 did apply. But that would support nothing more than a contention that incorrect investment advice had been given in breach of contract. Because of the limitation bar to a claim based directly on the original advice, the claimants' argument based on continuing breach of contract requires them to identify the particular contractual obligation that remains unperformed. This in turn requires that they identify the underlying contractual obligation to which the duty of care in section 13 applies. The mere fact (if it be such) that advice is given without the exercise of reasonable care and skill cannot suffice to establish that there is a continuing breach of duty.
Mr McMeel relied on a line of authorities beginning with Midland Bank Trust Co. Ltd v Hett, Stubbs & Kemp [1979] 1 Ch. 384. In view of my findings on the facts concerning the original investment advice, I shall not try to deal with them comprehensively; consideration of the main points will suffice. In Hett, Stubbs & Kemp, the defendant solicitors failed to register an option as an estate contract under the Land Charges Act 1925. The land to which the option related was sold, and the unregistered option did not bind the purchaser. Approximately five years after the sale of the land and eleven years after the defendants had been instructed to register the option, the plaintiff brought a claim for damages for professional negligence in respect of the losses caused by the failure to register the option. Oliver J held that neither in contract nor in tort was the claim statute-barred. His preliminary remarks regarding the contractual claim are important both generally and for the claimants' arguments in this case:
"It is perhaps a truism to say that what those facts are [that is, the facts necessary to be proved for the claim to succeed] can be ascertained only by reference to the right asserted, or, to put it another way, in the case of an action for breach of contract, by reference to the particular contractual duty the breach of which is asserted as the ground for the claim."
In a long passage commencing at 434, Oliver J said that the complaint in the case before him was not that the option had not been registered within a reasonable time but that it had not been registered at all before the land was sold. At 435 he said:
"It is, I think, important in the instant case to note that it is not a case of the giving of wrong and negligent advice—where the breach of contract necessarily occurs at a fixed point of time—but of simple non-feasance. ... [The solicitor] has, no doubt, exhibited a failure to show the normal competence and care for his client's affairs by carelessly allowing a period to elapse during which a third party might have, but has not in fact, acquired an interest. But such a failure cannot, I should have thought, affect, much less discharge, the primary obligation to effect registration timeously, which continues until it is performed or becomes impossible of performance or until the client elects to treat the continued non-performance as a repudiation of the contract."
Oliver J considered that previous authorities did not dictate a contrary view. At 438 he observed that the defendant solicitors had "never treated themselves as functi officio in relation to the option" and he held that "the obligation to register which they assumed when they were first consulted continued to bind them."
Hett, Stubbs & Kemp was distinguished by the Court of Appeal in Bell v Peter Browne & Co. [1990] 2 QB 495. The claimant reached an agreement with his estranged wife: he would transfer to her his interest in the matrimonial home in return for a mortgage or declaration of trust to secure payment to him of a proportion of the proceeds of any future sale. The defendant solicitors acted for the claimant in the transaction; they effected the transfer but failed to procure the mortgage or declaration of trust or to lodge a caution against dealings. Eight years later the wife sold the house and spent the proceeds. The Court of Appeal held that the claim in contract was statute-barred; there was no continuing duty; the breach of contract had occurred more than six years before the commencement of proceedings. Nicholls and Mustill LJJ considered that the breach was committed when the transfer was effected (or, in the case of failure to lodge the caution, as soon thereafter as reasonably practicable); this remained the case even though the breach was remediable for several years thereafter. "Failure thereafter to make good the omission did not constitute a further breach. ... A remediable breach is just as much a breach of contract when it occurs as an irremediable breach, although the practical consequences are likely to be less serious if the breach comes to light in time to take remedial action": per Nicholls LJ at 500-1. Nicholls LJ emphasised that the case was different if the contractual obligation, on its true construction, was a continuing obligation, such as the common form of leasehold repairing covenant. He said that Hett, Stubbs & Kemp "may be distinguishable" on the basis that the defendants in that case had never treated themselves as functus officio in relation to the option but had continued to have dealings with their client in respect of it. Beldam LJ's reasoning was essentially the same as that of Nicholls LJ, though he was unpersuaded by the proposed ground of distinction between the cases and implied strongly that Oliver J's decision was simply wrong: see 508. Mustill LJ, who expressed agreement with both Nicholls LJ and Beldam LJ, found it impossible, on the facts of the case before him, to imply "such a strange obligation" as one to exercise continuing vigilance to discover any mistake which [the defendants], themselves, might have made, and then to busy themselves in putting it right": 511-2.
The matter of continuing contractual duties has recently been considered by the Judicial Board of the Privy Council in Maharaj and another v Johnson and others [2015] UKPC 28. In 1986 the defendants acted for the claimants in their purchase of some land; the purchase was completed and the defendants, having been paid for their services, closed their file. In 2008 the claimants discovered that their title to the land was questionable, because the conveyance had been made by an attorney lacking authority to act for the vendor. They sued the defendants, and one of the claims that they proposed to advance was that the defendants were in breach of contract. In order to defeat a limitation defence, they needed to show "that every day until after 26 February 2008 the defendants continued to be under a contractual duty to secure for them the legal interest in the land and that, on each of those days ... they breached it and so generated a fresh cause of action." The question for the Board was whether it was arguable that the claim in contract was not statute-barred. Lord Clarke, dissenting, thought that it was indeed arguable that the claim in contract was not statute-barred. His judgment considered the reasoning in Hett, Stubbs & Kemp and in Bell; it may fairly be said to indicate a preference for that of Oliver J, but the critical point was that even in Bell the Court of Appeal had accepted that it was possible for parties by agreement to create continuing contractual obligations, and Lord Clarke thought it arguable that Maharaj was such a case: see [58-60]. However, the majority of the Board considered that the claim in contract was not arguable. At [34] Lord Wilson explained why:
"The claim is that for 22 years ... the defendants were under a continuing contractual duty to procure execution of a Deed of Rectification. But their fees had been promptly paid. Their file had been closed. There is no evidence of any communications between the claimant and the first defendant (or any of the other defendants) [until] February 2008. The Midland Bank case was, as Oliver J stressed, one of non-feasance: the contract obliged the solicitors to register the option and the obligation remained outstanding for six years. The Board recognises that the Bell case could be subject to a similar analysis, namely that the contract obliged the solicitors to register the caution and that the obligation remained outstanding for eight years. Beldam LJ may have been correct to accept that, in relation to the continuing duty, the two cases were indistinguishable. Mr Casey [counsel for the claimants/appellants] argues forcefully that, on this point, it was the Bell case, rather than the Midland Bank case, which was wrongly decided. In any event, however, the present case is different. the complaint is not that the defendants failed to take action pursuant to their contract with the claimants; it is that, in proceeding on the basis that [the vendor's purported attorney] had validly executed the Deed of Conveyance on behalf of [the vendor], the action by which they purportedly performed their contract was negligently wrong. At the point when they paid the purchase price, the claimants did not receive the marketable title which they had contracted to receive. There was no reference in the contract, express or implied, to an obligation to procure execution of a deed of rectification and, unlike the facility of solicitors to secure registration of an option or a caution, the defendants could not have procured execution of a deed of rectification without the participation of a third party, namely [the vendor]. The proposed claim in contract is, in a word, factitious."
I do not think that Hett, Stubbs & Kemp provides any support to Mr McMeel's argument. The claimants' case is not that the defendant, being contractually obliged to give them investment advice, failed to do so. It is that the defendant gave wrong and negligent advice in January 2007. As Oliver J made clear, in such a case the cause of action accrues when the advice is given; there is no question of a continuing unperformed obligation. Nothing in Maharaj casts doubt on that point.
It is of course the case that, in the present case, there was a contractual relationship between the parties at all times after 15 March 2007 (the relevant date for limitation) and the parties had ongoing relevant communications. But that is because the claimants had signed up to the Asset Management Service and, perhaps, because they were customers of the defendant bank under some other contract (this latter point was not explored at trial). It is not because of any contract, pleaded and proved, under which the investment advice was given. More importantly, none of this has anything to do with a contractual obligation that ought to have been performed by the defendant in January 2007 but was not performed and thus remained a subsisting unperformed obligation. No relevant contractual provision has been identified, nor does the claimants' case as to breach of contract fall within the scope of the decision in Hett, Stubbs & Kemp: see the two citations from Oliver J's judgment in paragraph 73 above.
A different point remains, namely that at all times after 15 March 2007 the bank was contractually bound by the provisions of the Terms and Conditions of the Asset Management Service. Section 13 of the 1982 Act applied to any functions that it performed under the Asset Management Service. But more than that is required to establish that the defendant was under a continuing duty at all times since the original investment advice, in the sense of a duty that had not been discharged by the giving of incorrect advice in January 2007 and that remained open for performance only by the correction of that initial advice. I have already explained why the Terms and Conditions cannot provide that something more. Even if they could in principle do so, none of the Terms and Conditions are pleaded in the amended particulars of claim.
Regardless of any pleading point, the Terms and Conditions relied on by Mr McMeel (paragraphs 32-34 above) do not assist in establishing the case that at all times after 15 March 2007 until the sale of the Portfolio the defendant was in breach of contract by reason of the existence of a continuing contractual obligation such that, for each moment when the defendant had not corrected its earlier advice, there was a continuing breach consisting of the failure to correct it. (It is a different question whether the Terms and Conditions assist in establishing a case that the defendant was in breach of contract by reason of the advice it gave in March 2008; I turn to that question below.) Mr McMeel submitted that the Terms and Conditions gave rise to continuing contractual obligations on the part of the defendant. That is correct, but it is necessary to be clear what one means. The terms set out the contractual obligations that the defendant owed to the claimants at all material times from March 2007 until the Portfolio was sold. They did not, however, purport to do anything that had the effect of making each moment when any incorrect investment advice originally given was not corrected the occasion of a new breach under a continuing obligation; there was nothing in them to impose on the defendant strict liability for the continued subsistence of a state of affairs whereby the claimants' money remained invested in a Portfolio with an unsuitable risk profile (if it were in such an investment). Clause 1 was an express term to the same effect as the implied term in section 13 of the 1982 Act. Clause 3(i) and 3(ii) related to management and administration of the Portfolio in accordance with its terms and risk profile; no complaint is made regarding management and administration. Clause 3(iii) related to periodic reviews and changed circumstances; it is relevant to the 2008 advice but does not purport to impose an obligation at each succeeding moment after the initial investment to rectify any error in the original investment advice. Clause 5 related to custody and safeguarding of securities; that indicates a continuing relationship but is not a matter of complaint. None of these provisions or any of the other provisions of the Terms and Conditions have anything to do with the primary obligation alleged by Mr McMeel, namely a strict obligation, continuing from moment to moment, to correct any initial mistake in the original investment advice. Such an obligation is supported neither by the law nor by the evidence.
The 2008 review
The defendant had an obligation to conduct periodic reviews of the claimants' circumstances and requirements in accordance with clause 3(iii) of the Terms and Conditions. In performing that obligation, it was required to exercise reasonable care and skill in accordance with clause 1(a) and section 13 of the 1982 Act and to comply with the requirements of the COBS Rules.
Mr McMeel's first main complaint in respect of the March 2008 meeting is that Mr Doyle failed to carry out an assessment of the claimants' risk profile and to correct the original incorrect risk assessment. I reject that complaint.
81.1 The original risk assessment was not incorrect: see above.
81.2 There was no contractual obligation to carry out a new risk assessment in the sense of going over the ground covered at the time of the original investment. The obligation under clauses 1(a) and 3(a)(iii) of the Terms and Conditions was to carry out a periodic review and to exercise reasonable care and skill in identifying and responding to changed circumstances or investment objectives. Mr McMeel's argument sought to impose on the defendant an obligation to repeat the process undergone at the time of the original investment; the purpose of this argument was to make of the original breach of duty a repeated breach of duty within the limitation period. There is no justification for that. Mr Doyle was correct to say that the risk assessment had been carried out at the time of the original investment; his task was to find out what if anything had changed and to give any appropriate advice.
81.3 There was no obligation under the COBS Rules to carry out a fresh risk assessment in the sense already explained. Mr McMeel submitted that there was, and he relied on COBS 9.2.1 R. That Rule did apply, because advice on the merits of selling a designated investment is a personal recommendation for the purposes of Chapter 9 of COBS (though see further below). However, the defendant had examined suitability at the time of the original investment. All that was required in March 2008 was to see whether the claimants' objective circumstances or subjective objectives or the material facts regarding the Portfolio had altered in any way that made the investment no longer suitable for them. Neither the wording of COBS 9.2.1 R nor any good reason requires that the original exercise be repeated de novo.
81.4 Mr Doyle did what was appropriate in the circumstances. See below.
81.5 There is no evidence and it was not submitted that the claimants' capacity for risk now made the retention of the Portfolio unsuitable for them, and it is their own evidence that their appetite for risk had not altered. See below.
Mr McMeel's second main complaint is that Mr Doyle ought to have ascertained that the original assessment, whether or not incorrect when it was made, was no longer appropriate for the claimants and that he ought to have advised them to disinvest from the Portfolio as being unsuitable for their present circumstances. He ought to have done this because the information available to him indicated both that the claimants' investment objectives had changed and that their reaction to the drop in value of the Portfolio was inconsistent with a Balanced profile. I reject this complaint.
82.1 Mr McMeel submitted that the fact that the claimants were thinking about selling the Portfolio indicated that their investment objectives had changed and their attitude to risk was not now (if it had ever been) reflected by a Balanced profile—either the original assessment was wrong, or the risk profile had changed. So far was Mr Doyle from taking this on board that he actually suggested stripping out the low-risk investments (bonds) and leaving in place the high-risk investments (equities).
82.2 The element of truth in this last-mentioned observation, concerning Mr Doyle's suggestion that bonds be sold and equities retained, only serves to highlight the problem with the underlying premiss of the submission. The suggestion had nothing to do with allaying concerns about risk; it was directed to the question how best to proceed if the claimants decided to have recourse to the Portfolio to discharge the overdraft. Mr McMeel says that this is because Mr Doyle "was not listening". I do not accept that. It was because the issue raised at the meeting did not concern the claimants' attitude to risk.
82.3 The position, as I find, was relatively simple. The claimants' immediate concern was about their overdraft; they had expected to clear it from the proceeds of the property sale, but this had not yet been achieved. Their primary intention was still to pay it with the proceeds of sale, as Mr Worthing acknowledged. But they were unwilling to allow the overdraft to remain in place for much longer—they felt "uncomfortable" with it—and they needed to consider alternatives. They were as unhappy as anyone would be at a fall of nearly £25,000 in the value of the Portfolio. They also knew that there was a global financial crisis. But they had always known that the investment was a medium-risk investment and that falls in its value were liable to occur. There had been no change in their attitude to risk, as they both acknowledged. The question was whether, if they could not sell the commercial properties quickly, they should sell the Portfolio and use the money to clear their debt. Mr Doyle's suggestion that it was an option to sell the bonds and retain the equities, so far from "talking past" the claimants (as Mr McMeel would have it) was directly in point. If recourse were to be had to the Portfolio, the better course would be to use what I may term the cash equivalent for that purpose and to retain the equities; otherwise losses would be crystallised on a low market and the opportunity of future recovery would be foreclosed.
82.4 Accordingly I do not agree with Mr Levett-Scrivener's belief that "Mr and Mrs Worthing's concern about this performance [of the Portfolio since January 2007] was indicative of their lack of understanding of investments and a further indication of their unwillingness to accept investment risk." In those circumstances I disagree with his conclusion that a competent financial adviser would therefore have re-categorised the claimants as either Secure or Cautious.
82.5 Mr Doyle did what was appropriate for the purposes of Chapter 9 of COBS. He discussed the claimants' circumstances with them in detail; it has not been suggested or demonstrated that he failed to ascertain relevant matters. And he discussed with the claimants the performance of the Portfolio, the reasons for the fall in its value and the reasonable hopes of recovery over the longer term.
82.6 For the defendant, Mr Mantle submitted that at the meeting Mr Doyle did not make any personal recommendation and could not properly have made any personal recommendation because he lacked the necessary information to assess its suitability. I partially agree with this submission. Mr Doyle did two relevant things. First, he advised against any immediate sale of the Portfolio. Second, he suggested that, if any recourse were to be had to the Portfolio, it would better be to the bonds than to the equities; but he did not recommend such recourse. The advice not to sell immediately was, in my judgment, a personal recommendation, because it was advice as to the merits of sale of a designated investment. However, it was limited advice as to its scope, because the position was as yet uncertain regarding both the sale of the commercial properties and the tax position mentioned in the file note of the meeting. Given the position that obtained, it seems to me that Mr Doyle was perfectly entitled to advise against immediate liquidation of the investment; the only possible alternatives were to advise immediate sale or to sit on the fence. The suggestion concerning rebalancing of the Portfolio was not a recommendation, because no decisions were being made or counselled; as the file note correctly states, it was an option to be considered if recourse were had to the Portfolio.
82.7 In agreement with the submissions of Mr Mantle and the evidence of Ms Claro, I consider that it would have been inappropriate for Mr Doyle to make a personal recommendation for the sale of all or part of the Portfolio. Chapter 9 of COBS and, in particular, COBS 9.2.6 R are directly in point. The critical question was whether the claimants' investment objectives made the Portfolio an unsuitable investment for them. That question could not be answered until the parties knew the position regarding the sale of the commercial properties and the tax issues raised at the meeting. As Mr Mantle submitted, those affairs were in something of a state of flux in mid March. In particular, it was not known whether the properties, which remained the preferred source of funds for repayment of the overdraft, could be sold for an acceptable price within a reasonable time. Therefore it was not possible to know what the investment objectives with regard to the Portfolio were to be in the future. In those circumstances, Mr Levett-Scrivener accepted in his oral evidence that the approach of "wait and see" with regard to the sale of the properties before reviewing the position was one that a reasonably competent financial adviser could have adopted, provided that steps were taken to ensure that immediate repayment of the overdraft were not suddenly demanded. That accords with Mr Doyle's approach in the present case, namely to advise against immediate sale of the Portfolio and to take steps to ensure that the overdraft facility remained in place.
82.8 Mr McMeel submitted that Mr Doyle was nevertheless open to criticism for failing to revert to the claimants after the meeting in March 2008. There was a need to review the position and decide whether the Portfolio remained suitable for the claimants; "the ball was in Mr Doyle's court"; while the Portfolio and the overdraft both remained in place, time was of the essence and Mr Doyle ought to have pressed for a quick review rather than leave matters in the air until the claimants gave the instruction to sell some four months later. Mr McMeel described this line of argument as a "sideshow" to the main point of the incorrect risk profile; that may explain why it is not reflected in the amended particulars of claim. At all events, I reject the submission. Ms Claro's opinion was that, where a review of the investment objective of this relatively long-term investment was dependent on the outcome of the proposed commercial property transaction, it was reasonable to wait for up to six months before advising the claimants that they should review their position rather than waiting indefinitely for the properties to sell. I accept that opinion; it is the best available evidence of what falls within the range of conduct to be expected of a competent financial adviser and, having regard to the facts of this case, it appears to me to be a reasonable opinion.
82.9 The ultimate decision to sell the Portfolio was that of the claimants. Mr Doyle's file note, set out above, correctly records: "Phil is disappointed to sell but circumstances with the borrowing have controlled this situation." I reject Mr Worthing's oral evidence that the decision was not made reluctantly and was simply because the claimants did not want to lose any more money. It may be noted that in his first witness statement (where a witness's first statement has been superseded by a later version, I have generally referred only to the latest version) Mr Worthing stated: "If it had not been for the overdraft problem we would have retained the Portfolio as advised by the defendant." That was correct. The claimants did not want to sell and did not do so because they thought the Portfolio unsuitable for them; they sold because they reluctantly needed to have access to the money to pay off an overdraft that had neither existed nor been envisaged when the original investment was made. Mr Worthing's departure from his original statement on this point is, I think, illustrative of the process of interpretation undergone by the claimants' evidence by reason of a combination of the lapse of time and the work on their minds of their disappointments and the benefit of hindsight.
Summary and Conclusion
The Balanced Portfolio was a suitable investment for the claimants when they took it out in early 2007. They understood that it was a medium-risk investment, they knew what that meant and they knew what they were getting. There was accordingly no error for the defendant to correct in the period until the review that took place in March 2008. Even if the original advice had been wrong, the defendant was not under a continuing duty with regard to the original advice; the claimants are not able to avoid the limitation bar to a claim based on the original advice by casting the omission of a later correction as a continuing breach of duty. The defendant was under a duty to conduct the review in March 2008 with reasonable care and skill and in accordance with the COBS Rules. It did so. The contention that it was in breach of a strict obligation to correct the error in its original investment advice fails because the original advice was not given in error and because there was no such strict contractual obligation. The contention that it nevertheless failed to advise the claimants that the Portfolio was not now suitable for them fails because their attitude to risk had not changed, because it was reasonable to give advice that no immediate decision should be taken to sell the Portfolio, and because the future investment objectives of the claimants with regard to the Portfolio could not at the time be properly assessed.
Accordingly the claim fails and will be dismissed.
This judgment is being handed down in the absence of the parties. As they have not been able to reach agreement on consequential matters, including costs, I shall adjourn consideration of those matters to a later hearing.
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Sir Michael Tugendhat:
PARTIES
In this action for misuse of private information and libel the Defendants apply to the court for orders setting aside the order dated 31 March 2015, by which Master Roberts gave permission for service out of the jurisdiction in Serbia; and/or a declaration that the court has no jurisdiction to hear the claim and; and/or in the alternative, a declaration that the court should not exercise any jurisdiction it may have to hear the claim. The application was made on 22 July 2015.
The First Defendant is the publisher of 'Politika', a daily newspaper in the Serbian language, circulated in Serbia and neighbouring countries in hard copy, and on the internet to anyone anywhere in the world who chooses to access its website. In their letter of complaint dated 23 February 2015 the Claimant's English solicitors wrote that 'We understand that Politika is Serbia's oldest and highest regarded national broadsheet'. In the issues of Politika dated on 12 and 13 February 2015, respectively ('the Articles' and 'the First Article, and 'the Second Article') there appeared two articles naming the Claimant. The Second Defendant is the Editor of Politika. The Third Defendant is a journalist living and working in Serbia who wrote the text of the words complained of.
The Claimant is a businessman. In his first witness statement, made in support of the application to the Master, and the letter dated 23 February 2015 (requesting the immediate removal of the words complained of) the Claimant's English solicitors described him as follows. He has 'an international/global purview for investing my family's and my own funds'. The nature of his work means that he has to travel very frequently, over 200 flights per year over the past five years. He is rarely in one country very long, but his closest ties are in London. He came to London to study in 1992. He has been resident here since 1995, with his Swedish wife, who he married in 2014. She has been resident here since 1998 and owns and runs a successful UK based company. He regards London as his home and the 'centre point' of his life, and describes 'the UK as feeling more like my home than any other country'. He is an Indian citizen with indefinite leave to remain in the UK. He achieved high academic qualifications in London, and was employed in London by Merrill Lynch as a Senior Banker in the Wealth Management Division for about 12 years to 2011. He spends most time in the UK, India and Austria, where his parents live. He is a member of the Supervisory Board of a large commercial enterprise in Serbia known as the Victoria Group, in the agro-industrial sector. He is the part owner of this business. In addition he and his family 'are significant and constructive foreign direct investors into Serbia'. He has an account with a Serbian bank.
Further information about him was disclosed subsequently, and its non-disclosure to the Master is one of the bases on which the Defendants rely in this case. He is also of Serbian nationality, and travels to Serbia using his Serbian passport. His mother is Serbian, he was raised in Serbia until he was aged nine. His foreign residences include a substantial apartment in Belgrade. He owns, or co-owns, properties in the USA. He also owns or rents properties in India and Austria. He speaks English fluently, and Hindi, German and Serbian (in order of proficiency, and not to the same standard as English). In his second witness statement sworn on 22 October 2015 he summarised his position as follows: 'I do have links to Serbia through my current involvement as an investor and member of the Supervisory Board of Victoria Group… through my Serbian passport which I am in the process of relinquishing, through two adjoining apartments I have in Belgrade and my early childhood growing up in Yugoslavia and my half Serbian mother (who has dual nationality).'
WORDS COMPLAINED OF
Since the primary claim in this action is for misuse of private information, it would be inappropriate to set out the words complained of, although I should note that the Claimant states that the figure mentioned in the First Article is inaccurate. A description will suffice. The First Article, as published in Serbian on the internet, consists of text illustrated by two prominent photographs. One photograph is of the name and logo of HSBC and the other is of bundles of euro bank notes, including one of 500 euro notes. The gist of the article is that the Claimant transferred a large sum of money from a Serbian bank to a Swiss one. The article includes a disclaimer ('the Disclaimer'): 'The hero of our story from India is certainly not the Serbian tycoon who tried to launder Euros 20 million in a Swiss branch of the British bank HSBC, about which our newspaper informed readers two days ago. While researching which Serbian businessman is in question, Politika discovered this unusually big transaction'. It also includes the statement: 'This businessman's move shocked bankers and caused a weakening of the Dinar, but there were no grounds for the state authorities to stop that transfer of money from an account in our bank to an account in a Swiss bank'.
The Second Article is headed (in its English translation) 'The state knows who was taking millions to Switzerland'. It again refers to the unnamed 'tycoon' who is distinguished from the Claimant in the Disclaimer. The Second Article repeats the Disclaimer, and states that he did not transfer the money in cash, but transferred it from one account to another. The Second Article refers to remarks said to have been spoken by the Prime Minister of Serbia at a press conference. In relation to transfers out of Serbia generally, he is quoted as saying that 'this is something the Tax Administrator should deal with…' As to the money transferred by the Claimant, the Prime Minister is reported as saying: 'I know of all these cases of taking money out… The man in question is Indian, Nandi Ahuja, a member of Victoria Group's Supervisory Board…'
The Claimant complains that the disclosure of bank transfers made by him is an infringement of his right to privacy, and this is so whether or not the figure reported is accurate (he says it is not accurate). He also contends that the words he complains of in each article are defamatory. The meanings attributed to these words in his letter of 23 February 2015 is that he 'knowingly or recklessly undermined and weakened the dinar currency of Serbia… [and] there are grounds to suspect [he] is guilty of unlawful tax evasion'.
While the words published by the Defendants were all written in the Serbian language, what the Claimant complains of is the publication to readers in the English language. He contends that the words in English can be easily read by persons who are using a search engine to search for references to the Claimant and who, when they see results in Serbian, click on the icon which sets in motion Google Translate, or an equivalent application, to produce an immediate translation.
THE NUMBER OF READERS OF THE WORDS COMPLAINED OF
In her written submissions put before the Master, counsel referred to the first witness statement of Mr Rupert Cowper-Coles, the Claimant's solicitor, who referred to what appears to have been an oral report from the well-known IT expert Dr Godfrey. The solicitor stated that Dr Godfrey did not have access to the most accurate data source, namely the server hosting the words complained of, which would allow with approximately 80% accuracy a determination of the geographic location of the internet device or server from which the words complained of had been accessed. Instead he used a service known as Alexa which provides commercial web traffic data. Using this source, he said, 'Dr Godfrey was able to provide me with very approximate web traffic from the UK to the Articles and other websites that republish the substance of the Articles. Dr Godfrey discussed with me by telephone on … 28 March this process… Dr Godfrey was able to estimate daily access to the Blic website from the UK at 11,000 and Politika at 1,000…' Dr Godfrey had made clear that his figures related to the website of these publications, not to any specific article.
The Claimant does not rely on the republications in Blic as publications for which the Defendants are liable. He relies on them as showing the damage he has suffered.
However, the Defendants challenged this evidence, and it is now accepted that it gives an inaccurate impression of the number of hits on the Articles. The witness statement of Natasa Sevic dated 22 July 2015 includes a table showing hits on the Politika website derived from Google Analytics, which is again approximate. This table includes hits for the period 12 February to 15 July 2015. This table lists 19 countries, including Serbia, from which there are shown by far the largest number, nearly 7000 hits for the First Article and nearly 3000 hits for the Second Article. Countries from each of which between 200 and 500 hits on the Second Article are recorded include Austria, USA, Canada, Bosnia and Herzegovina and Switzerland. There are seven countries from each of which between 100 and 200 hits are recorded, including Australia, Germany and Italy. The remaining six countries, including France and the UK, are each shown to have produced 70 hits. For the First Article the hits from the UK are between 46 and 70. India does not appear on this list. At the hearing the Claimant accepted that the number of individuals who had identified themselves to him as readers of the Articles, and who accessed them in England, was about 35. Mr Tomlinson submitted, and I accept, that there are likely to have a number of people who accessed the Politika website in England in the course of doing searches on the Claimant who have not identified themselves to him. So the numbers are not inconsistent. These figures are for the internet. The hard copies of Politika numbered nearly 42,000 for 12 February and over 73,000 for 13 February.
The Claimant challenges the figure of 70 hits from the UK on a number of grounds. It is not necessary to set these out. It seems to me that to the extent that these grounds apply to the hits from the UK, they apply also to the hits from other countries, such as Austria and the USA. So the criticisms affect the absolute, not the relative, number of hits. They thus do not materially affect the question whether England is clearly the most appropriate forum.
The state of the evidence on the number of readers strongly suggests that the evidence of Dr Godfrey ought to have been adduced in a written report from him, which would have made clear what his instructions had been, and depending upon them, how many hits on the Articles there were in jurisdictions other than England.
HARM SUFFERED
The harm which the Claimant alleges includes, as he stated in the letter of 23 February 2015, harm to his reputation in England, in Serbia and internationally, since he has 'lived and worked on three continents'. He there added that the Articles are likely to cause further serious harm not only to him, but also to his family 'and have a significant impact on his and their international business interests, his and their reputations in the UK, as well as in Serbia, Austria, the USA where he/they have business associates and significant business interests, and, of course, in India where his family's core business activities are based and where most family members reside, not to mention other parts of the globe too'. He stated that he had 'received many calls and messages (as have other members of the family), including from the UK, USA, Austria, Sweden, Switzerland, Greece, Kazakhstan, India, and Serbia, to mention just some of the countries, expressing concern. The words complained of have caused unpleasant conversations to take place with the creditors of Victoria Group who have formed the belief that the shareholders have liquid funds which, he says, they do not have.
Since a claimant who needs leave to serve a claim form out of the jurisdiction of the English court in respect of a tort may only include in his English claim damage suffered in England, he recognises that he must confine this claim to damage suffered by publications to publishees in England. But in his second witness statement dated 22 October 2015 the Claimant included a list of 31 individuals who had contacted him. After I asked what the places of publication were in respect of these individuals he made a third witness statement dated 6 November, in which he was able to state that most of these either did, or seemed likely to have, read the words complained of in England.
For the purposes of the claim in misuse of private information the Claimant relies on the severe distress and serious concern he has suffered in respect of his family's safety, which has made him feel compelled to hire security personnel for himself and his wife during their intermittent visits to Serbia. This is because another member of the Supervisory Board of Victoria Group who is known to be wealthy was kidnapped and held hostage for ransom. He also relies on the injury to his feelings caused by the failure of the Defendants to contact him about the Articles before the First Article was published, and that they published the Second Article in spite of the protests made by and on behalf of himself. He also relies on the falsity of the information disclosed. In particular there was not alleged to be, nor was there in fact, any related exchange transaction with Dinars, so it could not be correct to say that the transaction affected the value of the Dinar. Nor was there any weakening of the Dinar recorded on the published information on Dinar exchange rates at the time of the alleged transfer.
The Defendants did not respond to the letter of 23 February 2015, nor to other attempts made by the Claimant to resolve this matter without recourse to litigation. Further, they continue to publish, and threaten to continue to publish, the words complained of without any retraction or correction.
For the purposes of the claim in defamation a claimant now has to satisfy the test in s.1 of the 2013 Act, namely to show that the publication of the words complained of 'has caused or is likely to cause serious harm to the reputation of the claimant'. The harm relied on for this purpose includes the following: the seriousness of the meanings which he attributes to the words complained (in particular in the world of finance and wealth management in which he works), that he has a distinctive name (important for the internet searches which business people now commonly carry out on others with whom they deal, or might consider dealing with), that he has a large circle of friends in England, that the Articles appear in the first few s of a search of his name on google.co.uk, that he has already had to explain himself to numerous individuals who have contacted him about the Articles, that the allegations in the words complained of have been extensively republished in particular on other media websites, in particular that of the newspaper Blic.
LAW ON SERVICE OUT OF THE JURISDICTION
There is no dispute as to the law on this topic. CPR Part 6.36, and Practice Direction 6B para 3.1, provide that a claimant seeking permission to serve proceedings out of the jurisdiction in Serbia must satisfy the court that one of a number of conditions, or gateways, are fulfilled. The gateways the Claimant relies on are: '(2) A claim is made for an injunction ordering the defendant to do or refrain from doing an act within the jurisdiction' and '(9) A claim is made in tort where – (a) damage was sustained, or will be sustained, within the jurisdiction; or (b) damage which has been or will be sustained results from an act committed, or likely to be committed, within the jurisdiction'. Claims for damages for misuse of private information and defamation are both claims in tort for this purpose. CPR 6.37(3) provides that: 'The court will not give permission unless satisfied that England and Wales is the proper place in which to bring the claim.'
A recent summary of the law was given in AK Investment CJSC v Kyrgyz Mobil Tel Ltd [2011] UKPC 7 by the Privy Council in relation to the Isle of Man (which I set out substituting England and Wales for the Isle of Man) as follows:
'71. On an application for permission to serve a foreign defendant … out of the jurisdiction, the claimant … has to satisfy three requirements: …. First, the claimant must satisfy the court that in relation to the foreign defendant there is a serious issue to be tried on the merits, i.e. a substantial question of fact or law, or both. The current practice in England is that this is the same test as for summary judgment, namely whether there is a real (as opposed to a fanciful) prospect of success: …. Second, the claimant must satisfy the court that there is a good arguable case that the claim falls within one or more classes of case in which permission to serve out may be given. In this context "good arguable case" connotes that one side has a much better argument than the other: ... Third, the claimant must satisfy the court that in all the circumstances [England] is clearly or distinctly the appropriate forum for the trial of the dispute, and that in all the circumstances the court ought to exercise its discretion to permit service of the proceedings out of the jurisdiction…
88. The principles governing the exercise of discretion… are familiar, and it is only necessary to re-state these points: first, in both stay cases and in service out of the jurisdiction cases, the task of the court is to identify the forum in which the case can be suitably tried for the interests of all the parties and for the ends of justice; second, in service out of the jurisdiction cases the burden is on the claimant to persuade the court that England … is clearly the appropriate forum; third, where the claim is time-barred in the foreign jurisdiction and the claimant's claim would undoubtedly be defeated if it were brought there, practical justice should be done, so that if the claimant acted reasonably in commencing proceedings in England, and did not act unreasonably in not commencing proceedings in the foreign country, it may not be just to deprive the claimant of the benefit of the English proceedings….'
There is a further point, mentioned, but not in issue, in that case. The court should consider what is the natural forum for the pursuit of the claims, in the sense of being the jurisdiction with which the claims have their most real and substantial connection: Spiliada Maritime Corp v Cansulex Ltd [1987] AC 460, at 478. The jurisdiction in which a tort has been committed is prima facie the natural forum for the determination of the dispute: Berezovsky v Michaels [2000] 1 WLR 1004, 1013D and 1014E.
Where there is an issue as to whether there could be a fair trial in another jurisdiction the Privy Council said in the same case:
'95. The better view is that, depending on the circumstances as a whole, the [claimant's] burden can be satisfied by showing that there is a real risk that justice will not be obtained in the foreign court by reason of incompetence or lack of independence or corruption. ….
97. Comity requires that the court be extremely cautious before deciding that there is a risk that justice will not be done in the foreign country by the foreign court, and that is why cogent evidence is required. But, contrary to the Appellants' submission, even in what they describe as endemic corruption cases (i.e. where the court system itself is criticised) there is no principle that the court may not rule….
101. The true position is that there is no rule that the English court … will not examine the question whether the foreign court or the foreign court system is corrupt or lacking in independence. The rule is that considerations of international comity will militate against any such finding in the absence of cogent evidence….'
In relation to PD6B 3.1(2) the discretion to grant permission will not be exercised unless an injunction is a genuine part of the substantive relief sought and there is a reasonable prospect of an injunction being granted.
In relation to PD6B 3.1(9)(a) it is enough that some significant damage has been sustained in England. In relation to PD6B 3.1(9)(b) the court has to ask whether damage has resulted from substantial and efficacious acts committed in England, regardless (save in a case to which the Defamation Act 2013 s.9 applies) of whether or not such acts have also been committed elsewhere. But as Lord Hope said in Berezovsky v Michaels [2000] 1 WLR 1004 at 1032:
'In a defamation case the judge is not required to disregard evidence that publication has taken place elsewhere as well as in England. On the contrary, this feature of the case, if present, will always be a relevant factor. The weight to be given to it will vary from case to case, having regard to the plaintiff's connection with this country in which he wishes to raise his action. The rule which applies to these cases is that the plaintiff must limit his claim to the effects of the publication in England: Diamond v. Sutton (1866) L.R. 1 Ex. 130; Schapira v. Ahronson [1999] E.M.L.R. 735; see also Eyre v. Nationwide News Pty. Ltd. [1967] N.Z.L.R. 851. Common sense suggests that the more tenuous the connection with this country the harder it will be for the claim to survive the application of this rule'.
DEFAMATION ACT 2013 S.9
The Defamation Act 2013 s.9 provides:
'Action against a person not domiciled in the UK or a Member State etc
(1) This section applies to an action for defamation against a person who is not domiciled — (a) in the United Kingdom; (b) in another Member State; or (c) in a state which is for the time being a contracting party to the Lugano Convention.
(2) A court does not have jurisdiction to hear and determine an action to which this section applies unless the court is satisfied that, of all the places in which the statement complained of has been published, England and Wales is clearly the most appropriate place in which to bring an action in respect of the statement.
(3) The references in subsection (2) to the statement complained of include references to any statement which conveys the same, or substantially the same, imputation as the statement complained of.
(4) For the purposes of this section — (a) a person is domiciled in the United Kingdom or in another Member State if the person is domiciled there for the purposes of the Brussels Regulation; (b) a person is domiciled in a state which is a contracting party to the Lugano Convention if the person is domiciled in the state for the purposes of that Convention.
(5) In this section — "the Brussels Regulation" means Council Regulation (EC) No 44/2001 ...'
The Explanatory Notes record that 'this section aims to address the issue of "libel tourism" (a term which is used to apply where cases with a tenuous link to England and Wales are brought in this jurisdiction)'. But those words do not identify the mischief which the section is to remedy. It is not suggested in the present case that the Claimant is in any sense a 'tourist', nor that his links to England and Wales are tenuous, and yet the section applies to him. The section makes no reference to different categories of claimant, or to any specific link to England that a claimant might have or lack. It applies as much to a claimant who has never resided in England as to one who is resident or domiciled here. This form of drafting has been the subject of discussion in a number of text books: Gatley on Libel and Slander 12th ed para 24.29, Collins on Defamation paras 25.51 to 25.89, James Price QC and Felicity McMahon Blackstone's Guide to the Defamation Act 2013 10 01 to 10.31, and Duncan and Neill on Defamation 4th ed 9.03 to 9.09.
Price and McMahon identify the mischief as 'a suggested chilling effect, in which articles in journals published internationally had to be edited or withdrawn because of the risk of legal action in England and Wales' (para 10.11). Identifying the mischief at which an enactment is directed can support an argument under the principle of Pepper v Hart [1993] AC 593, but none has been advanced in this case. The editors cite from the speech of the Lord Chancellor, the Rt Hon Kenneth Clarke MP introducing the Bill on Second Reading in the House of Commons (para 10.15). He said:
'Relatively few foreign libel cases ultimately end up in a British court room, but I am concerned by the use of threatened proceedings by wealthy foreigners and public figures to stifle investigation and reporting… using the nature of British law to threaten a publication in an entirely different jurisdiction. That is the evil we are trying to address. We are not trying to stop British publications being sued by anybody who can come here and show that we are the right jurisdiction' (Hansard, HC Deb, 12 June 2012, cols 182 and 183).
The law in the USA is, in its broad outline, very well known to English libel lawyers and others: Adelson v Anderson [2011] EWHC 2497 (QB) paras [73]-[86]. It may be that it was to the difference between American and English law, as it was before the passing of the Defamation Act 2013, that the Lord Chancellor was referring when he spoke of 'the nature of British law' (the differences have been narrowed by the 2013 Act). It has not been suggested in the present case that 'the nature of British law', compared to Serbian law, could be a factor on which either party might rely. The Claimant contends that he is at risk of not receiving a fair trial in Serbia, and the Defendants deny that. But the Claimant's contention on this point is not based on any alleged difference between English law of defamation and Serbian law. No evidence of Serbian law has been put before the court. The reasons the Defendants adduce for objecting to the jurisdiction relate to the closeness of the connection of the events in question to Serbia, to the cost and inconvenience of having to defend themselves in London, and similar matters. If there is any case (other than one relating to the USA) in which 'the nature of British law' has been a factor relied on by a claimant in support of an application for permission to sue a foreign defendant in London, I have not been referred to it. What the reported cases illustrate is that (save in relation to the USA) it is the fairness and other standards of the administration of justice in the foreign jurisdiction which claimants rely on to support their applications (as the Claimant does in this case).
The Claimant relies on Sloutsker v Romanova [2015] EWHC 545 (QB) for this purpose (the Defendants' response on this point is considered below, under Justice in Serbia). In that case the rival jurisdiction proposed by the defendant was the Russian Federation, but no point was taken in respect of any difference between the law of defamation in England and Russia. In a para [71], which counsel cited to the Master, Warby J said:
'[Counsel for the claimant] submitted that the defendant is in substance maintaining her refusal to recognise the legitimacy of the Russian judicial system, which is an insuperable obstacle to the defendant's present application. I would not go quite so far. However, this statement does not appear to me to be in any way a satisfactory response to the claimant's concerns. It clearly leaves it open to the defendant to denounce any unfavourable outcome as not, or not sufficiently, legitimate. This is a factor which arose in Berezovsky (see p1024D, Lord Hoffmann), and it is clear that the majority took into account as an important factor evidence which satisfied them that a favourable result in Russia "will not be seen to redress the damage to the reputations of the plaintiffs in England. Russia cannot therefore realistically be treated as an appropriate forum where the ends of justice can be achieved" (1014H, Lord Steyn). The defendant's stance seems to me to be a very powerful factor in favour of treating England as the appropriate jurisdiction in which to litigate a claim by this claimant for alleged libel published here by this defendant.'
But whatever the mischief addressed by the section, Mr Price submits that the effect of s.9 is clear. An applicant is required to put before the court the fullest reasonably available evidence as to publication in all places in which the words complained of have been published.
The editors of Gatley state at para 24.29: '…the effect of s.9 will be to oblige the court to consider all the jurisdictions where the defamatory statement has been published, in order to determine whether the domestic jurisdiction is clearly the most appropriate place in which to bring the action. As the Explanatory Notes to the Act make clear, " … if a statement was published 100,000 times in Australia and only 5,000 times in England that would be a good basis on which to conclude that the most appropriate jurisdiction in which to bring an action … was Australia rather than England". However, the extent of publication in different jurisdictions may have little bearing on where the claimant's reputation mainly lies and on where that reputation has been most seriously damaged, and the Explanatory Notes rightly suggest that the court would wish to take into account such matters as the amount of damage to the claimant's reputation in England and Wales compared with elsewhere, the extent to which publication was targeted at a readership in England and Wales compared with elsewhere, and whether there was reason to think that the claimant would not receive a fair hearing elsewhere. No doubt the court will also wish to consider such factors as the convenience of witnesses and the relative expense of suing in different jurisdictions. It would be unsurprising if claimants resident in England and Wales were to surmount the new threshold more readily than foreign claimants'.
Collins at paras 25.56 and 25.77 to 25.79, and Price and McMahon at paras 10.13 to 10.18 and 10.24 to 10.28, consider the position of claimants who are resident or domiciled in England in more detail than the last sentence of this citation from Gatley. They each favour the view that, if the claimant is resident or domiciled within the jurisdiction, that will be likely to lead the court to the view that England is the appropriate place to bring the action. But the only reason they suggest for this relates to cases where the main harm to reputation will have been done in England: paras 25.56 and 10.17. There appears to have been no specific reference to those residents of the UK who spend much of their working lives abroad, and enjoy reputations in one or more countries abroad as significant as their reputations in England and Wales. There are many such people in business, finance, government and academic life, media and entertainment, sport and no doubt other fields of activity: compare Ames v Spamhaus Project Ltd [2015] EWHC 127 (QB); [2015] 1 WLR 3409 paras [44]-[47]. And it is amongst such people, rather than those whose reputation is mainly in England, that there is likely to be found those wishing to sue foreign publishers in defamation. As Price and McMahon also note at paras 10.25 to 10.27, there may be cases where the court would be in great difficulty in being satisfied that any one place was clearly more appropriate than another for bringing an a libel action.
Mr Tomlinson submits that an obligation on the court to consider all the jurisdictions where the defamatory statement has been published, in order to determine whether the domestic jurisdiction is clearly the most appropriate place in which to bring the action, places an unreasonable and disproportionate restriction on the Claimant's right of access to the Court, at least in the case of a defamation on the internet. The task of collecting such information in respect of all the jurisdictions in the world would be immense and complex. In the case of a defamation in hard copy the task would be impossible for a claimant, since the information would be likely to be available only to the publisher who put the material into circulation. (I would add that even the publisher may not know, because hard copies may be resold and circulated abroad by a domestic wholesaler to whom the publisher has sold copies).
Mr Tomlinson submits that s.9 must therefore be read and given effect in a way that is compatible with a claimant's right of access to a court under ECHR Art 6 ('everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law'). To achieve this he submits that s.9(2) must be read as if it contained additional words '…of all the places in which the statement complained of has been published, which may reasonably be considered appropriate …'
This submission based on Art 6 was made for the first time in a note handed up on the morning of the second day of the hearing, in response to a request from the bench that there be submitted to the court the academic commentaries on s.9. Mr Tomlinson further submitted that s.9(2) purports to oust the jurisdiction of the court. It is the public policy of the common law to interpret restrictively statutory provisions which appear to interfere with fundamental rights. I understood him to be referring to dicta such as that of Lord Hoffmann in R v Secretary of State for the Home Department, Ex p Simms [2000] 2 AC 115, 131E-F, where he said:
'[T]he principle of legality means that Parliament must squarely confront what it is doing and accept the political cost. Fundamental rights cannot be overridden by general or ambiguous words. This is because there is too great a risk that the full implications of their unqualified meaning may have passed unnoticed in the democratic process. In the absence of express language or necessary implication to the contrary, the courts therefore presume that even the most general words were intended to be subject to the basic rights of the individual. In this way the courts of the United Kingdom, though acknowledging the sovereignty of Parliament, apply principles of constitutionality little different from those which exist in countries where the power of the legislature is expressly limited by a constitutional document'.
Mr Price recalled that access to the court based on service on a defendant who is out of the jurisdiction is in any event not a right, because the jurisdiction of national courts is normally territorial. As Lord Diplock said in Amin Rashid Corpn v Kuwait Insurance [1984] 1 AC 50 at 65G:
'... the jurisdiction exercised by an English court over a foreign corporation which has no place of business in this country, as a result of granting leave under R.S.C., Ord. 11, r.l(l)(f) for service out of the jurisdiction of a writ on that corporation, is an exorbitant jurisdiction, i.e., it is one which, under general English conflict rules, an English court would not recognise as possessed by any foreign court in the absence of some treaty providing for such recognition. Comity thus dictates that the judicial discretion to grant leave under this paragraph of R.S.C., Ord. 11, r.l(l) should be exercised with circumspection in cases where there exists an alternative forum, viz. the courts of the foreign country where the proposed defendant does carry on business, and whose jurisdiction would be recognised under the English conflict rules.'
Transposing Lord Diplock's words into the language of rights, for an English court to permit service on a defendant out of the jurisdiction may be an interference with the rights of the foreign defendant, including in particular to that defendant's right of access to her national court, and to respect for her private life. And in a case of defamation, there may also be an interference with the right to freedom of expression, either because English law is more favourable to the claimant, or because the burden of defending the proceedings, and the risk of unaffordable orders for damages and costs, would inhibit the defendant from publishing what is lawful in his own country. The rules of court have always recognised this factor, by requiring the court to have regard to the need to do justice to the defendant as much as to the claimant. The right of access to the court encompasses the considerations which the editors of Gatley refer to in the words: 'whether there was reason to think that the claimant would not receive a fair hearing elsewhere… the convenience of witnesses and the relative expense of suing in different jurisdictions.'
In my judgment Art 6 and HRA s.3 add nothing to the common law, under which access to justice has long been a right. The common law principle of legality, explained in Simms, always required that, so far as possible, statutes be interpreted in a manner consistent with the rights, such as access to a court, which it is the general duty of the law to uphold. And the court is required to consider first domestic law (that is statute law other than the Human Rights Act and the common law): Kennedy v The Charity Commission [2014] UKSC 20 para [46].
The internet has had the effect that many ordinary people are defamed in publications accessible to readers all over the world. And some ordinary (and otherwise very private) people are the subject of defamations which, for one reason or another, are in fact read or viewed (on media such as YouTube) by thousands or even millions of people abroad. And I would not exclude the possibility that there could be cases where, to require a claimant to put before the court evidence relating to all the jurisdictions where the defamatory statement has been published, might interfere with the claimant's right of access to the court. But that is not this case.
In the present case, as in many cases on service out of the jurisdiction in respect of defamation, the claimant is a man of substantial means. He has access to legal and technical professional advice in many different parts of the world, including the benefit of Dr Godfrey's expert advice. I do not accept that it would be an interference with this Claimant's right of access to a court to be required to put before the Master evidence of hits from countries other than the UK, such as that which has been put before the court by Ms Sevic for the Defendants (para 11 above), together with detailed evidence of his own links with the other jurisdictions where he spends a significant part of his time, and in which he owns properties. And if I had thought that there was any undue or impossible requirement being imposed on the Claimant in this case, I would have taken into consideration, in deciding whether England and Wales is clearly the most appropriate place in which to bring an action, the Claimant's right of access to the court.
For these reasons, in the circumstances of this case, I reject Mr Tomlinson's submission based on the right of access to a court. I accept that the law is correctly stated in Gatley.
LAW ON NON-DISCLOSURE
Mr Tomlinson invites me to take the law to be as recently summarised by Warby J in Sloutsker v Romanova [2015] EWHC 545 (QB) para [51]:
'i) An applicant for permission to serve proceedings outside the jurisdiction is under the duty of full and frank disclosure which applies on all applications without notice.
ii) The duty requires the applicant to make a full and fair disclosure of those facts which it is material for the court to know: Brinks Mat v Elcombe [1988] 1 WLR 1350, 1356 (1) and (2) (Ralph Gibson LJ). Put another way, disclosure should be made of "any matter, which, if the other party were represented, that party would wish the court to be aware of": ABCI v Banque Franco-Tunisienne [1996] 1 Lloyd's Rep 485, 489 (Waller J).
iii) Non-disclosure of material facts on an application made without notice may lead to the setting aside of the order obtained, without examination of the merits. It is important to uphold the requirement of full and frank disclosure.
iv) But the court has a discretion to set aside or to continue the order. Whether the fact not disclosed is of sufficient materiality to justify or require immediate discharge of the order without examination of the merits depends on the importance of the fact to the issues that were to be decided. The answer to the question whether the non-disclosure was innocent is an important, though not decisive, consideration. See Brinks Mat at pp1357 (6) and (7) and 1358 (Balcombe LJ).
v) In the context of permission for service outside the jurisdiction the court has a discretion to set aside the order for service and require a fresh application, or to treat the claim form as validly served and deal with the non-disclosure by a costs order: NML Capital Ltd v Republic of Argentina [2011] UKSC 31, [2011] 2 AC 495, [136] (Lord Collins).
Mr Tomlinson further submitted that in deciding what is or is not material, the court was not concerned with the merits of the dispute, save to the extent that it had to be satisfied that there is a serious issue to be tried. It followed that the applicant was not required to disclose everything that might be relevant to the merits of the dispute: MRG (Japan) Ltd v Engelhard Metals Japan Ltd [2004] 1 Lloyd's Law Reports 731 paras 26, 30 and 31.
Mr Price directs me to the words of Jay J in Shaw & Anor v Logue [2014] EWHC 5 (Admin):
'35. …. the duty requires a party to '… disclose all facts which reasonably could or would be taken into account by the Judge in deciding whether to grant the injunction. It is no excuse to say that he was not aware of the importance of matters he has omitted to state'….. 37. Even more axiomatically, there is a separate duty arising at all times not to mislead the Court and, should the Court have been inadvertently misled, to correct that as soon as possible. These duties are prominent in the Solicitor's Code of Conduct'. (emphasis original)
Mr Price added submissions on cases where there has been deliberate non-disclosure or misrepresentation. In such circumstances, it will only be in exceptional cases that a court will not set aside an order, having regard to the public interest in applicants making full disclosure: Behbehani v Salem [1987] 1 WLR 723, 729 D-E, 734G-H; Congentra AG v Sixteen Thirteen Marine SA ('The Nicholas M') [2008] EWHC 1615 (Comm); [2008] 2 Lloyd's Law Reports 602.
THE HEARING ON 31 MARCH 2015
Applications for permission to serve proceedings out of the jurisdiction are normally made on paper. But on this occasion the Claimant was represented by experienced junior counsel. This was thought appropriate largely because the case is governed by the Defamation Act 2013 s.9.
In addition to the application notice and the draft Claim Form, there was evidence before the court. This was the two first witness statements of the Claimant and of his solicitor respectively. There is no requirement in the CPR that there be draft Particulars of Claim available to the court at that stage, but it is desirable that there should be. It focusses the minds of the applicant and of the court on what the claim is, and so on what is material to be disclosed to the court.
Counsel submitted a nine page written submission. The pages of that submission which might have been of particular assistance to the Master were the four related to the Defamation Act 2013 ss 1 and 9. This case may be the first case under s.9 to have come before the court.
The reasons advanced for the submission that England is clearly the most appropriate place to bring the action are included in a list of 12 sub-paragraphs, in addition to the submission that there is a substantial risk that the Claimant would not receive a fair hearing in Serbia. Of the 12 matters listed (all of which are referred to in one form or another elsewhere in this judgment) the following three are of particular significance to the issues that I have to decide:
'(f) According to Lawrence Godfrey, an IT expert, the Politika website and the Blic website together ordinarily receive a very rough and approximate 12,000 daily views [para 24 of the solicitor's witness statement]; (g) The Article on the Politika website and the Blic republication appear on the first page of a www.google.co.uk search result under "Nandi Ahuja"… (h) The Claimant has been contacted by a significant number of friends and associates from within this jurisdiction and by others with substantial links to England and Wales who have accessed the Articles or their reasonably foreseeable republications online…'
THE ISSUES
In addition to the issue of whether the Claimant failed in his duty to give full and frank disclosure to the Master, the main issues that arise, in respect of each of the claims in misuse of private information and defamation, are: whether there is a serious issue to be tried, and whether the Claimant has satisfied the court that there is a good arguable case that the claims fall within one or both of the sub-paras of PD6B relied on. In relation to the claim in misuse of private information there is the issue of whether in all the circumstances England is clearly or distinctly the appropriate forum for the trial and that in all the circumstances the court ought to exercise its discretion to permit service out of the jurisdiction. In relation to the claim in defamation there is the issue whether I am satisfied that, of all the places in which the statement complained of has been published, England and Wales is clearly the most appropriate place in which to bring an action in respect of the statement.
The main points taken for the Defendants on non-disclosure are that the Claimant failed in his duty of full and frank disclosure in a number of respects, that his solicitor did so deliberately in failing to disclose his Serbian nationality and upbringing, and that the Claimant did so in the extent of his interests in, and family connections to, Serbia. In relation to the defamation claim the main points are that the words complained of were not defamatory within the meaning of s.1 of the Defamation Act 2013 or at all, and that the Claimant has failed to satisfy the test in s.9. In relation to both the defamation claim and the misuse of private information claim the Defendants' case is that the Claimant has failed to demonstrate that real or substantial damage occurred in this jurisdiction, or from an act committed within this jurisdiction. In relation to the misuse of private information claim, the Defendants further contend that England is not clearly the appropriate forum for the trial because Serbia is the natural forum (in that the action has the most real and substantial connection to that jurisdiction), and justice does not require that permission should nevertheless be granted to proceed in England.
NON-DISCLOSURE
The main failures which Mr Price relies on relate to the Claimant having Serbian nationality and a Serbian passport, and property and other connections with Serbia not referred to in the evidence before the Master, the overstatement of the numbers of publishees in England (12,000 hits per day, of which 1000 were on Politika, whereas a realistic figure for the Articles in Politika is of the order of 70 in all by 15 July, and the publications of Blic are not sued on), the omission to adduce the evidence of publications in, and his connections with, places other than England and Serbia (being information which I have held could reasonably have been obtained by the Claimant), the failure to identify which of the people whom he named as having approached him had read the words complained of in England, and the failure to disclose evidence of the cogent kind required if a court is to decide that there is a risk that the Claimant would not receive a fair trial in Serbia.
In relation to all of these matters, save the first, Mr Price accepted that the failure was not the result of any intention to deceive, but rather of misjudgement. In relation to the Serbian nationality, passport and properties he alleged that it was deliberate.
There is no dispute that the failure to disclose the Claimant's nationality was a serious one. Mr Tomlinson accepted that and extended the Claimant's apologies. The matter is the more serious because at the start of the hearing the Master asked 'What nationality is the claimant?' and counsel replied 'He is an Indian national. He has been resident in this jurisdiction….' The Claimant's solicitor, who was present, did not intervene to ensure that the Master was told that the Claimant was also of Serbian nationality. The misleading information given to the court on 31 March was not corrected until after the Defendants had raised the issue. Ms Georgian made a witness statement on 22 July in which she reported that the Claimant is referred to as having joint Indian and Serbian nationality. This is in a brochure from the London Business School, which he once attended. The Defendants' application to set aside service was issued on the same day. It identified the non-disclosure of the Claimant's Serbian nationality, and his upbringing, interests and family connections with Serbia, as the first ground relied on. On 22 October 2015 the Claimant made his second witness statement. In that he accepted that he did have Serbian nationality and a passport, which he used for travel to Serbia, but said that he had begun the process of formally relinquishing Serbian citizenship. He explained his failure to mention those matters which he accepted to be true about his connections with Serbia on the basis that he did not believe them to be important, and that he considered the core of his life to be in London.
The Defendant's legal representatives interpreted this evidence as meaning that the Claimant had not disclosed these matters to his own solicitors. If he had disclosed them to his own solicitors, Mr Price submitted, then the court should infer that the solicitors would have informed the court. As a result of the submissions advanced by Mr Price, further evidence was filed in the form of a third witness statement by the Claimant's solicitor dated 4 November 2015. He stated that the day before the application to the Master the Claimant had informed his solicitors that he had a Serbian passport. Mr Cowper-Coles, who received the call, said he discussed with a partner, and, he says, with counsel, whether this should be disclosed to the court, and that they all took the view that it was not material. Counsel has explained that she did not recall having been told of the Claimant's Serbian passport the day before she gave the misleading answer to the Master, and that is why she gave the answer to the Master that she did.
At the start of the hearing before me Mr Price applied for an adjournment to consider, and if possible investigate further, whether this non-disclosure was deliberate, and whether privilege had been waived. I refused the adjournment for reasons I gave at the time. Mr Cowper-Coles' witness statement of 4 November 2015 makes clear that the decision not to disclose was deliberate in the sense that it was a considered decision, although he says it was not with intent to deceive. Further notes have been submitted to me on this topic in writing after the end of the hearing. It is accepted for the Defendants that counsel's failure to disclose the Claimant's Serbian nationality was not intentional. But the Defendants remain critical of the conduct of his solicitors. In this context, it is common ground that the court should draw no distinction between the Claimant and his legal representatives.
I accept that it is a matter of concern that, in the context of this case, the materiality of the Claimant's Serbian nationality was not recognised by the Claimant's solicitors. The difference in recollection between solicitor and counsel is a further cause for concern, as is the omission by the solicitors to inform the court that the Master had been misled at the hearing in March. The Master's question related to objective facts, not to the Claimant's subjective view of his nationality. But these proceedings are not an appropriate occasion for investigating this matter further, assuming (which I doubt) that any further investigation in the course of these proceedings could be conducted consistently with the requirements of justice to all concerned and the overriding objective for the conduct of this case (which includes proportionality). Any investigation would be a matter for the regulatory authority. I make no adverse finding against any individual.
Although Mr Tomlinson accepts that the Claimant's Serbian nationality should have been disclosed, he submits that a claimant's nationality is, at most, only of limited relevance to the question as to what is the most appropriate place for an action to be tried. He submits that in this case the evidence weighed heavily in favour of granting the application. The other matters disclosed in the evidence before the Master, and in the words complained of themselves, made clear that he has substantial links to Serbia. He submits that the court should not discharge the order made by the Master in any event.
In my judgment the order must be set aside. This conclusion would follow in any event, in my view, from what I have found to be the requirements of s.9, and the absence of any quantitative evidence of publication in countries other than England and Serbia (the fact of global publication was disclosed in the letter of 23 February). The same conclusion would also follow independently, in my view, from the large difference between the figures for publication in England put before the Master and the figures as they have been put before me. But independently of these, in my judgment the non-disclosure of the Claimant's Serbian nationality, and the fact that the court was misled as it was, taken by itself, would have required the order to be set aside.
Before deciding what other order should be made, I shall consider the other issues, the answers to which may assist in deciding what should follow.
ISSUES IN THE DEFAMATION CLAIM
Because s.9 of the Defamation Act sets a higher threshold for the Claimant to surmount, I shall consider this claim first. Mr Price submits that there is no serious issue to be tried because the words complained of are not defamatory within the meaning of s1(1). of the Defamation Act. That reads: 'A statement is not defamatory unless its publication has caused or is likely to cause serious harm to the reputation of the claimant'. He submits that the Claimant has failed to establish a sufficiently strong case on harm.
This is not an application for a determination on meaning, although it is necessary to consider issues of meaning. The words complained of refer to the Claimant. So the first stage in this case is to determine the strength of the Claimant's case on whether the words are defamatory. For this purpose the principles applicable are those at common law. Well-known guidance is given in Jeynes v News Magazines Ltd [2008] EWCA Civ 130. The second stage is to consider whether the harm test under s.1 has been satisfied. See Lachaux v Independent Print Ltd [2015] EWHC 2242 (QB); [2015] EMLR 28 paras [13]-[14, [144]-[145] and [151]-[152]
In my judgment the Claimant has raised a serious issue to be tried against the First and Second Defendants that the words complained of do bear a meaning at least as serious as that there are grounds to suspect he was involved in the evasion of tax which he or others should have paid in Serbia. And I accept that he has raised a serious issue to be tried that an allegation of suspected involvement in tax evasion is a serious one for a person in the Claimant's business. The Articles are meant to be taken seriously, and come from a publisher of high standing in Serbia. The Claimant has adduced evidence which also satisfies me that he has raised a serious issue to be tried that the words complained have come to the attention of a significant number of people who read them in England. I am satisfied to the same extent that the court should infer that the words have been read in England by a further significant number of people who have not contacted him about them, and that so long as the words remain accessible on the Politika website, it is likely that he will suffer further harm to his reputation in England.
The claim against the Third Defendant is different because the tax evasion meaning arises from the photographs and the title, whereas the Third Defendant's evidence is that, as a journalist, she was the author of the text alone. This is what anyone experienced in defamation proceedings would expect. I need say little about the strength of the claim against the Third Defendant. If she is not responsible for the images published with her text, the question whether there is a case against her depends upon whether any meaning relating to the Serbian Dinar is a separate defamatory meaning (she does mention the effect on the Dinar). While I reach no conclusion on this, I do say that I would require some persuasion to find that a report of transfer of funds by a businessman from one country to another becomes discreditable in the mind of a reasonable reader simply by reason of the adverse impact the transfer is said to have had on the exchange value of the currency of the country from which the transfer is made. Compare Modi v Clarke [2011] EWCA 937, paras [12] and [30]-[36].
There is a similar consideration in relation to the claims against all the Defendants based on the Google Translate text. First, that too appears without the images, although in order to get to the translated text it may be that some or all readers will have first looked at the Serbian webpage. Further, as Mr Price submits, the Google Translate application can garble the original (and in fact did so in this case in relation to the Disclaimer), and there may be differences in the translations produced for each individual reader. This was a factor considered by Sharp J (as she then was) in El Diwany v Hansen [2011] EWHC 2077 (QB). However, the present case is different, in that there is a direct link to the translation application from the Politika website, and the evidence is that the translations into English are better, and more consistent with one another, than appears to have been the case in El Diwany. So I find that the Claimant has raised a serious issue to be tried on this point.
I am also satisfied that the Claimant has brought himself within both the sub-paras of Practice Direction 6B para 3.1 upon which he relies. An injunction is a normal remedy to give to a successful libel claimant. As the editors of the above-mentioned text books remark, an English court is the only court that would grant an injunction specifically restraining publication in England.
However, and independently of the question of whether the Claimant is at risk of not receiving a fair trial in Serbia, I am not satisfied that, of all the places in which the statement complained of has been published, England and Wales is clearly the most appropriate place in which to bring an action in respect of the statement. As the letter of 23 February 2015, and the witness statements of the Claimant make clear, his case is that he has suffered damage in many countries in which he has important business interests, and in which he deals with important counter-parties. Serbia is one of these countries, but by no means the only one. The letter of 23 February 2015 gives no threat to take legal action in an identified country.
The only specific evidence (other than the Claimant's statements) about the number of hits on the Articles suggests that he has suffered, and is likely to continue to suffer, damage to his reputation in other countries at least as great as that he complains of in England. I refer to the hits from Austria and the USA (in each case many times the number from the UK), and to the Claimant's evidence that he spends time and owns properties in both of these places. But he has not provided the court with material upon which the court can assess whether any of Serbia, Austria or the USA (or any other place) might be more appropriate.
In the letter of 23 February the Claimant's solicitors wrote that he 'and his family … are very private individuals guarding their privacy closely', and alleged that the Defendants have been 'reckless'. So I cannot assume that a claim for defamation in a country whose laws are favourable to the Claimant (if such there be) would have any less strength than a claim in England under English law.
I also bear in mind the statement in Gatley, which is in my view correct, that the court will also wish to consider such factors as the convenience of witnesses and the relative expense of suing in different jurisdictions. As to the statements by the text book writers that it would be unsurprising if claimants resident in England and Wales were to surmount the new threshold more readily than foreign claimants, I can see the force of that in respect of a claimant who can satisfy the court that the main harm to his reputation will have been done in England. But in my judgment this Court is no position to reach that conclusion in relation to the Claimant on the limited evidence he has chosen to put before the court. This is because he states that his reputation is global, but his specific evidence relates only to England and Serbia.
The Claimant is not alone in facing a difficulty with s.9 as a result of his global reputation. In one sense his professional achievements and family wealth make him a rare member of a small elite in the world of business. But members of this elite class are attracted to London, and many of them own properties in London, and spend as much time in London as the Claimant says that he does. And it is in the public interest that the reputation of such people should not be unlawfully damaged. Their business activities are of importance to the economic well-being of this country. It may be that in addressing the complaint that non-residents with a tenuous connection to London have sought to vindicate their reputations in England, Parliament has so framed s.9 as to make it unduly difficult for some people who are resident or domiciled here to vindicate their reputations. If so, Parliament was well aware of what it was doing, because the issue was discussed during the passage of the Bill. And whether Parliament intended this consequence or not, the court can only do anything about it if, and to the extent that, claimants put before the court the evidence of the harm to their global reputations which enables the court to be satisfied that, of all the places in which the statement complained of has been published, England and Wales is clearly the most appropriate place in which to bring an action in respect of the statement.
It follows that, independently of the issue of non-disclosure, s.9 of the 2013 Act requires that I set aside the Master's order giving permission to serve the claim form out of the jurisdiction, in so far as it includes claims in defamation. I shall invite further submissions as to whether or not I should also make a declaration that the court does not have jurisdiction to hear and determine this claim in defamation against the Defendants.
ISSUES IN THE MISUSE OF INFORMATION CLAIM
There is little dispute that there is a serious issue to be tried on the claim for misuse of private information. Financial information of the kind in question in the words complained of is private information. In so far as it is commercially confidential, then it might be said that the disclosures in England were most likely to have occurred only after the information had entered the public domain. Although he refers to his claim as relating to private information (which usually connotes personal information) the Claimant does complain of the commercial quality of the information. For example, he refers to the difficulties he has encountered with the creditors of Victoria Group. But it is not only about that which the Claimant complains. He also complains of the impact on his private life and that of his family of the information being disclosed. The worst impact of that on his private life is the fears which he states that he now has for the safety of himself and his family when they are in Serbia.
Nevertheless, for the purposes of the present application I accept that he has a good arguable case that his private information has been misused by publication on the internet in the UK and for that matter in the other countries from which there were hits on the Politika website. There is a good arguable case that that damage is to be taken to have been suffered in England, where he resides. I take into account that there may be a defence raising the public interest, but on the information at present available to the court, that prospect does not affect my decision that the Claimant has the necessary serious issue to be tried.
As to the prospect of the Claimant obtaining an injunction, an English court might need some persuasion to grant such an injunction in respect of this cause of action, if the words complained of remain accessible to those conducting searches on the Claimant in the USA, and the other countries which the Claimant has referred to. Compare the Spycatcher litigation. But I am satisfied that the publication of private information in England is a tort within the sub-paragraph of PD6B para 3.1(9). I am satisfied to the necessary extent that damage has been sustained, and will be sustained, within the jurisdiction and that damage which has been or will be sustained results from an act committed, or likely to be committed, within the jurisdiction.
The main issue in respect of this claim is whether in all the circumstances England is clearly or distinctly the appropriate forum for the trial, and that in all the circumstances the court ought to exercise its discretion to permit service out of the jurisdiction. To answer this question the court must consider whether the Claimant is at risk of not receiving a fair trial in Serbia (as to which see below), and other factors. I consider first what is the natural forum for the pursuit of the claim, in the sense of being the jurisdiction with which the claim has the most real and substantial connection.
The Claimant lists factors which he submits make England that jurisdiction. These include his connections with this jurisdiction, and that the disclosure occurred (that is, the tort was committed) in this jurisdiction. The Defendants submit that Serbia is the natural forum for the pursuit of the claim. They list the following factors. The words complained of were part of an investigation into financial matters of public interest in Serbia, and a defence of what is in the public interest in Serbia is most suitably tried in Serbia. The original disclosures, both to, and by, the Defendants were in Serbia, and that is where disclosure has been made to much the greatest number of people. Much of the damage of which the Claimant complains relates to Serbia, both his difficulties with Victoria Group creditors, and his concerns for his and his family's safety in Serbia. Further, the conduct of the Defendants is to be judged by the law and professional standards applicable in Serbia.
In my judgment Serbia is the place with which the claim for misuse of private information has its most real and substantial connection, notwithstanding that the disclosure complained of in this action is the disclosure in England. The words complained of refer to the Claimant because he had substantial connections with Serbia. He had a bank account in Serbia, and was a member of the Supervisory Board of a Serbian enterprise. In the words complained of the Defendants contend that disclosure was in the public interest in Serbia. The harm complained of is closely connected with Serbia. A Serbian court would (if conducting a fair trial) be better placed to assess the strength of the Defendants' public interest defence, the propriety of the conduct of Serbian journalists, and the Claimants' concerns about his and his family's safety.
I turn then to the other circumstances to which the court must have regard. The Claimant relies on the following. He contends that the Defendants have demonstrated that they are able to engage in litigation here, the issues of fact are likely to be limited, the Second Defendant is familiar with London and can speak English, and the difficulties in travelling to which the Third Defendant refers can be overcome by receiving her evidence over a video link, or in some other way.
The Defendants contend that all the parties, including the Claimant have Serbian nationality and residences in Belgrade (it is at this stage of what the court has to consider that the Claimant's Serbian nationality and passport are most clearly facts which are highly material to what the court has to decide). They also all speak Serbian. Serbian is the language, and Serbia is the place, in which all but a small part of the disclosures have been made. The undisputed evidence of the Defendants is that the cost of living in Serbia is a fraction of that in London, and that earnings are proportionately lower. The cost of a trial in England, including bringing witnesses here, would clearly be very expensive indeed by Serbian standards (they would be expensive enough by English standards). On the other hand, unlike the Serbian witnesses, who would need visas and accommodation in London, the Claimant, as the holder of a Serbian passport, and the owner of an apartment in Belgrade, would suffer no significant cost or inconvenience in bringing proceedings in Serbia.
Independently of the issue of whether the Claimant is at risk of not receiving a fair trial in Serbia, it is my judgment that, in all the circumstances, Serbia, not England, is clearly and distinctly the appropriate forum for any trial of this claim for misuse of private information.
JUSTICE IN SERBIA
In support of the submission that the Claimant is at risk of not receiving a fair trial in Serbia the Claimant relies on two types of evidence: general evidence about the administration of justice in Serbia, and specific evidence about this case.
The specific evidence is that the words complained of include a quotation attributed to the Prime Minister of Serbia, set out in para 6 above. The Claimant also refers to the part ownership of the First Defendant by the state of Serbia. The Claimant's solicitor referred to a summary of several reports on the state of Serbia's judiciary and media conducted by various international and supranational bodies including the European Commission, the World Economic Forum, the United Nations Development Programme and the United States Department of State. He exhibited an extract from the European Commission's report of October 2014. He summarises these reports as concluding that, despite the recent adoption of legislation to improve its independence, the Serbian judiciary falls short of the standards that would be expected for parties to receive a fair and independent trial in accordance with Art 6 of the ECHR.
Passages of the Report which seem to me to be of most relevance are the following:
'Regarding the independence of the judiciary…. The constitutional and legislative framework still leaves room for undue political influence affecting the independence of the judiciary, particularly in relation to the career of magistrates… Some judges from higher and appellate courts were confronted with direct attempts to exert political influence over their daily activities without the High Judicial Council properly defending their independence…. The impartiality of judges is ensured through the constitutional and legal framework. However practical implementation is hampered by the fact that the system of random allocation of cases is not yet automated in all courts, which provides scope for circumventing the system … Fundamental rights – Serbia has ratified all the main international human rights instruments and is on track with reporting to the UN human rights mechanisms. Nevertheless, implementation needs to be more consistent. During the reporting period, the European Court of Human Rights delivered 29 judgments on 73 applications against Serbia. In 27 judgments the Court found that Serbia had violated the European Convention on Human Rights and Fundamental Freedoms. The majority of the judgments refer either to violation of the right to a fair trial due to the length of the procedure or to the non-enforcement of domestic judgments…'
The Claimant's solicitor expresses the fear that the highly influential position of the First Defendant as a media organisation gives rise to a real risk that Serbian proceedings against it could be influenced by the media. He also expresses 'substantial concern' that the fact that the First Defendant is owned as to 50% by the Government of Serbia suggests overt political influence.
The Defendants' evidence includes other reports, and specific evidence relating to 500 proceedings brought against it in Serbia between 2011 and 2015. Most of these were employment disputes. But 45 related to media law, of which it lost 16. It contends that this evidence undermines the Claimant's case on this point. The Defendants also note that, although the Claimant's solicitor's letter of 23 February includes a statement that he has retained counsel in Serbia, no Serbian lawyer has given evidence to support the Claimant's contentions as to the administration of justice in Serbia. They are no more than the views expressed by his solicitor.
Further, Mr Price submits that the Claimant's reliance on Sloutsker is misconceived. In that case the concern was that, whether the claimant won or lost any proceedings in Russia, no vindication could be achieved, because the result would be understood by the public to have been achieved by corruption: Sloutsker paras [53] and [56], and see Berezovsky at 1024B. That is not the Claimant's case in relation to Serbia.
It is not necessary for me to consider in detail the evidence adduced by the Defendants. In my judgment the evidence relied on by the Claimant falls well short of the 'cogent evidence' that the court must have before it can find that 'there is a real risk that justice will not be obtained in the foreign court by reason of incompetence or lack of independence or corruption' (para 22 above). I see nothing in the remarks attributed to the Prime Minister of Serbia which has prejudiced the Claimant's right to a fair trial, or that raises a real risk that any trial would be unfair.
It follows that, independently of the issue of non-disclosure, I would set aside the Master's order in relation to the claim in misuse of private information, as well as in relation to defamation.
CONCLUSION
For these reasons the order giving permission to the Claimant to serve these proceedings on the Defendants out of the jurisdiction will be set aside. I invite further submissions from the parties, if so advised, as to any further order that I should make.
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Mr Justice Foskett:
This is an appeal from an order of Master Gidden given on 3 June 2015. The appeal is brought by permission of Green J given on 30 September 2015.
It arises from a decision made by Master Gidden under the 'Show Cause' procedure relating to mesothelioma claims provided for in part 6 of Practice Direction 3D. The note at 3DPD.6.1 states this of the 'Show Cause' procedure:
"This is defined as a requirement by the court, of its own initiative and usually on a costs in the case basis, for the defendant to identify the evidence and legal arguments that give the defendant a real prospect of success. Applying the test for summary judgment, the burden of showing that the defendant has no real prospect of success remains on the claimant. Further, at a show cause hearing it is for the claimant to adduce credible evidence in support of their case, and it is only if they do so that the defendant becomes subject to an evidential burden to show cause: Silcock v H M Revenue and Customs [2009] EWHC 3025 (QB). The justification for the court imposing this filter rather that requiring a full blown application under Pt 24 to be initiated by the claimant, is the fact that the RCJ experience has shown that in about 95 per cent of claims there is no such defence and a summary judgment application simply duplicates work and increases costs unnecessarily. The requirement to show cause may be imposed at any stage of the interlocutory process and may be imposed on successive occasions, for example, at the first CMC and then at a later show cause hearing if the defendant is able to persuade the court to allow more time. The courts order is to show cause not only as to liability but also as to why the usual standard interim payment should not be made."
In the Silcock case Sweeney J recorded at [9] what was common ground between the parties:
"… at a show cause hearing it is for the Claimant to adduce credible evidence in support of his case, and it is only if he does so that the Defendant becomes subject to an evidential burden to show cause. It is further agreed that the correct test is not whether the Defendant's case is likely to succeed at trial, but only whether it has some chance of success, and that the prospects are not fanciful."
The overall "case" that a claimant has to establish in this context in order to secure compensation against an employer is that he was exposed to asbestos during the course of his employment in breach of duty. Any such employer is liable for the whole of the damage caused irrespective of whether wrongfully exposed to asbestos by others: see section 3, Compensation Act 2006.
The hearing before the Master was, as is usual, conducted by telephone (with 1 hour allowed) with Mr William Evans making submissions on behalf of the Defendant and Mr Christopher Makey making submissions on behalf of the Claimant. Mr Makey had put in an up-dated Skeleton Argument shortly before the hearing and the Defendant had submitted written representations prior thereto. Mr Evans and Mr Makey have both appeared before me and I am grateful for their helpful submissions.
I am told that the Master had not had an opportunity to read the evidence before the hearing, but it is quite plain that he did read it from the decision he gave (see paragraph 17 below) and that he reflected upon its implications. He concluded on the evidence deployed before him that the Defendant, a company of mechanical building engineers, did not have a realistic prospect of success in its defence and that, accordingly, he should enter judgment on the issues of liability and causation in favour of the Claimant and ordered the Defendant to make the usual payment on account of damages and costs, namely, £50,000 and £5000 respectively.
The Defendant contends that the Master should not have so concluded. It is argued that the evidence presented by the Defendant, if accepted, amounts to a full defence to the Claimant's claim and that it was wrong of the Master to enter judgment on the basis that the Claimant's evidence proves his case at this stage. It would only be possible to reach such a conclusion, it is said, by considering the competing evidence and rejecting the Defendant's evidence. Mr Evans submits that a trial should take place at which the witnesses for both parties should be heard and tested. Mr Makey says that the Master was entitled to reach the conclusion he did on the material before him.
The appeal is a review, not a re-hearing, although inevitably a substantial part of such a review involves an appraisal of the evidence considered by the Master. In Austin v Plumb Furniture Systems Ltd, HHJ Mackenna, sitting as a High Court Judge, on an appeal heard in July 2013 from the then Senior Master, Master Whittaker, against a 'Show Cause' decision in a mesothelioma case, said this of the parameters at the appellate stage:
"6. There is no issue between the parties as to the applicable legal principles in this case. An appeal will be allowed where the decision of the lower court was wrong and wrong for these purposes means either because the learned senior master erred in law or erred in the exercise of his discretion. I have been referred to the well known decision in Tanfern v Cameron-McDonald as to what constitutes a sufficient error in the exercise of discretion to warrant an interference by the Appeal Court, where Brooke LJ suggested that guidance might be gained from the speech of Lord Fraser in G v G where Lord Fraser said: "...the appellate court should only interfere when they consider that the judge of first instance has not merely preferred an imperfect solution which is different from an alternative imperfect solution which the Court of Appeal might or would have adopted, but has exceeded the generous ambit within which a reasonable disagreement is possible."
7. In addition, I have also been referred to the alternative formulation of Lord Woolf in Phonographic Performance Ltd v AEl Redifussion Music Ltd [1999] I WLR 1507 at 1523:
"Before the court can interfere it must be shown that the judge has either erred in principle in his approach, or has left out of account, or taken into account, some feature that he should, or should not, have considered, or that his decision is wholly wrong because the Court is forced to the conclusion that he has not balanced the various factors fairly in the scale.""
It is, perhaps, more accurate to say that the decision which is the subject of an appeal in this context is an appeal from an exercise of judgment (rather than discretion) on the part of the Master, but the principles at the appellate stage are unchanged. It is not open to the judge at the appellate stage to set aside the Master's decision simply because he or she might have reached a different judgment on the available material. The decision under appeal must be shown to have been wrong in the sense that it has gone beyond the generous limits of reasonable disagreement.
The Claimant was born on 28 August 1930 and is thus 85 years of age. He was diagnosed as suffering from epithelioid malignant mesothelioma in July 2014. His life expectancy was assessed by Dr H.W. Clague, the Consultant Physician instructed by his solicitors, in September 2014 to be between 9 and 15 months. Happily, he still survives at the moment, but undoubtedly is seriously ill.
Shortly after the diagnosis to which I have referred the Claimant gave his solicitors a lengthy witness statement concerning his work history since 1944 when he was 14, a statement he appears to have repeated in substance with some additions in another statement dated 5 February 2015. He was essentially a plumber and heating engineer throughout his working life, starting as an apprentice plumber in 1944 and retiring as a heating engineer in 1995 having spent the last 14 years of his working life with the Defendant.
The statements to which I have referred indicate that he had been exposed to asbestos dust to varying degrees of intensity throughout his working life with different employers. I will mention salient aspects below (see paragraph 20).
After receiving a synopsis of the witness evidence to be deployed at the 'Show Cause' hearing by the Defendant, he prepared a further statement dated 18 May 2015 commenting on the synopsis, though not directly on the witness statements themselves which he had not then seen.
His account of the history is supported in relevant respects by witness statements from two others who had worked for the Defendant at the same time as him, Mr David Reeve and Mr Andrew Prior. Mr Reeve's statement was dated 12 May 2015 and Mr Prior's was dated 20 May 2015. I will refer to those statements below.
In relation to the evidence advanced by the Defendant, Mr Geoffrey Robinson, its proprietor, prepared a witness statement dated 7 May 2015 which challenged a good deal of what the Claimant had said in his earlier statements. At that stage there were other statements prepared on behalf of the Defendant: one from Mr Walter Dinsdale dated 17 April 2015, another of the same date from Mr Tony Heywood and again two others of that date from Mr Brian Stephenson and Mr Mick Cross. I will refer to those statements below.
That was the evidential material available to Master Gidden together with the expert medical report of Dr Clague dated 27 September 2014. He had, of course, the advantage of the competing submissions of Mr Makey and Mr Evans.
The Master's decision was briefly expressed as follows:
"1. This is the case of a man who worked as a heating engineer employed by the Defendant in the period 1981-1995. It is a case where liability is not admitted and I have been referred to a significant body of evidence that has been prepared and served in this case; two statements from the Claimant supported by further evidence on behalf of the Claimant from Mr Reeve and Mr Prior; and then a further five witnesses whose statements are served on behalf of the Defendant. I have been referred to various passages in a number – not all – of these statements. The Claimant describes his work with the Defendant. He describes being exposed to asbestos dust in work which involved repairs to boilers, replacing them, replacing pipework, and removing asbestos lagging, and indeed in installing new pipework and new boilers. He describes removing old asbestos lagging from boilers and a practice of simply smashing the lagging off and then indeed re-lagging boilers using a paste that was mixed up by tipping asbestos dust and fibres from a bag and into a bucket, obviously causing a good deal of dust. He describes being exposed to asbestos dust during his employment and indeed no precautions to that exposure being taken. That is supported by evidence from Mr Atkinson (sic). He also describes smashing off asbestos lagging in work at Catterick and indeed there is evidence from Mr Reeve, who describes working with the Claimant stripping out boiler houses and the job involved tidying up old asbestos lagging. These descriptions are vivid and graphic and in my estimation not inconsistent, and not unfamiliar in cases like this in this court. These statements on behalf of and from the Claimant describe substantial and prolonged exposure to asbestos on any basis.
2. The medical evidence is also present in the bundle before me and provides the diagnosis that the Claimant is suffering from malignant mesothelioma, a diagnosis that it appears to me is uncontroversial, which has been confirmed as described in the report, a diagnosis which it seems to me there is little prospect of it being challenged and as far as I understand that is not envisaged as matters stand.
3. On balance I am not persuaded that the Defendant has a realistic prospect of success in this case. I am satisfied that the Claimant has adduced sufficient credible evidence of significant exposure and breach of duty on the part of the Defendant. The Claimant in addressing the Defendant's evidence points out that there are instances in which the witnesses in question are unable to state that they knew the Claimant particularly well or that they had worked on particular contracts with the Claimant. They do state however – and this in fact is the evidence I believe from the [witness Mick Cross] who accepts that employees could be exposed to asbestos accidentally. Another, Mr Haywood, accepts that in the period 1981-1995 it is possible that he might have come across asbestos. On balance it seems to me that the Claimant is in a position to prove material exposure whilst employed with this Defendant and indeed a level of exposure of which the Defendant should have taken steps to protect the Claimant having regard to the standards and practices at the time …."
It was, of course, an ex tempore ruling given at the conclusion of a telephone hearing. As will appear below (see paragraph 35), Mr Evans subjected some aspects of it to a close textual and contextual analysis in his criticisms of its conclusions. I do not, with respect, think it fair or appropriate to do so. There has been no opportunity to refine it and the Master was simply doing his best in not ideal circumstances to give the gist of his reasoning that led to his decision. He was doing so, however, to an audience that was very experienced in this field, as doubtless was the Master himself. There are many cases of this nature passing before certain QB Masters (including Master Gidden) on a very regular basis.
I will turn to the evidence and to Mr Evans' submissions about it.
As I have indicated, the Claimant's first witness statement sets out his working history which, on his account, had resulted in fairly consistent exposure to asbestos over the years. Prior to his period with the Defendant, he had worked for about 22 years with one company in Darlington during the course of which he says he was significantly exposed to asbestos dust and fibres, much of the work involving contact with asbestos lagging when working at various sites of clients of the company. It involved both the removal of old lagging by smashing it off with chisels or hammers and its replacement by the preparation of an asbestos paste made by tipping asbestos dust and fibres from a bag into a bucket and mixing it with water. He worked for another firm for about seven years between 1968 and 1975 when there was similar asbestos exposure. In the five years before he joined the Defendant he worked for an electrical and mechanical engineering firm on behalf of which he would carry out plumbing work which again involved exposure to asbestos, mostly as a result of similar work on lagging to that which he had been involved previously.
During his time with the Defendant the Claimant says that "on nearly every job [for the Defendant] I was exposed to asbestos dust". He said that the work involved carrying out work to boilers with a considerable amount of removal of asbestos lagging and then its replacement following the production of the type of paste to which I have already referred. When the paste was prepared it was sometimes prepared by him and his colleagues and sometimes by contractors. When done by the latter, he was again exposed to asbestos dust when it was tipped out of the bag before being converted into a paste. He also described work that he performed on calorifiers at various defined places. He mentions specific locations where work that brought him into contact with asbestos took place, a number of which (e.g. Albemarle Barracks, RAF Catterick and Latermarne Barracks) were government-run military institutions.
He indicated that there did come a time during his employment by the Defendant when there was what he described as a "national acknowledgement with regards to asbestos and the dangers of it" and that by the end of his employment the Defendants were using an asbestos alternative to lag the pipes. In his statement of 5 April 2015 he said this:
"I am told that Geoffrey Robinson have denied that I was exposed to asbestos dust during the course of my employment with them. Whilst I understand they accept that the work that I did for them would have brought me into contact with insulation, they dispute that it would have contained asbestos and maintain that the insulation that I encountered during my employment with them would have been predominately calcium silicate and Rockwool based. This is incorrect. I was exposed to asbestos dust during my employment with them, as I have indicated above. It was only after I had been employed by the firm for a number of years that we became more aware of the dangers of working with asbestos and alternatives to asbestos based insulation were introduced. In the years during my employment with Geoffrey Robinson, before we became aware of the risks associated with asbestos dust I frequently worked on jobs which involved the stripping and removal of lagging that had been in place for many years and would certainly have contained asbestos. No precaution was taken."
Mr Reeve's statement indicates that he worked with the Defendant as a pipe fitter/welder from about 1981 to 1992 and that he worked closely on many jobs with the Claimant. Putting it shortly, he largely corroborated the Claimant's account of the kind of work undertaken (including the work involving the lagging) and the sites that the Claimant had identified. He recalled the boiler suit that was issued by the company which was, he said, always covered in dust and fibres by the end of the day. He said that during the early years at the company they were not aware of the dangers of asbestos, but that there came a time when there was greater awareness and the sub-contractors who re-lagged the pipes at that stage used glass fibre rather than asbestos dust and fibres to make the paste.
Mr Prior, who is considerably younger than the Claimant, worked for the Defendant from about 1985 to 1988 and he and the Claimant worked regularly together during that period. He also identified places where they worked together including those mentioned by the Claimant. He describes breaking up old asbestos lagging as had the Claimant. He also described being in the vicinity of specialist contractors who used asbestos fibres to re-lag the pipe work.
Mr Evans concedes that if one stopped at that point and that evidence was accepted, the Claimant would have established his case against the Defendant. However, he says that the evidence submitted by the Defendant puts a different perspective on that evidence and is sufficient to require further investigation at trial. I will turn to that evidence.
Mr Robinson's witness statement describes how he started the business in 1971 and states that its clients during the time the Claimant worked for it were the Government's then Property Services Agency, local authorities, British Gas, ICI and British Steel. He says that the company's clients were aware of the risks posed by asbestos and "even in the 1970s" carried out asbestos surveys and, accordingly, were often aware of its presence before his employees arrived at a job and had often removed it. However, he says that in November 1981 he set up another business called Industrial and Commercial Insulation Limited which carried on business until January 1993 removing asbestos insulation. In the period before the formation of that "asbestos removal company" he said that the instructions to employees ("as confirmed in our health and safety manual") were that if they came across anything they suspected was asbestos they should not disturb it and report it to "the relevant person". If the suspicious items were found to be asbestos, either the client would have it removed or he (Mr Robinson) would subcontract removal to a specialist contractor, which might be his own company after it was set up. He said the Claimant was wrong to say he mixed wet asbestos paste since the Defendant never used any form of wet material. He also made observations about certain specific places identified by the Claimant as places where he was exposed to asbestos.
I will endeavour to summarise what the other witness statements advanced on behalf of the Defendant say. Mr Dinsdale has worked for (and, it seems, continues to work for) the Defendants since 1989 as a pipe fitter and heating engineer. During the first six years of his employment he says that his work involve insulation of heating pipes and taking out redundant pipe work – in other words, work similar to that carried out by the Claimant. He said that he was occasionally on site with the Claimant, but did not know him that well. He says that during that period "I do not think I came across asbestos at all." He says that the company would not allow anyone to go to premises where asbestos removal was taking place. He said that he had never seen asbestos paste being used. On the issue of the procedure adopted if asbestos was suspected, he said this:
"If we were working in a plant room and we had reason to suspect that the lagging that we saw contained asbestos, our instructors were to notify Geoffrey Robinson Limited and they would investigate. That was the procedure that was laid down and it was the procedure which was followed. I knew that I had to report it."
Mr Heywood, who has worked for the Defendants since the mid-1970s, initially as a heating engineer, but more recently as contracts manager, said that he thought that he "did a little work" with the Claimant. Looking back to the period when the Claimant worked for the Defendant, Mr Heywood said that he "personally [could not] recall coming across asbestos, but it is possible that [he] did". He said that the rules were that if it was discovered, it should be reported. He did accept that it was "possible" that asbestos insulation was used in addition to calcium silicate and fibre glass, but said that the company never got involved in lagging.
Mr Stephenson, who joined the Defendant in 1990 as a heating engineer, gave a short statement that, when read, appears to be in somewhat guarded terms. However, he said that he had never seen asbestos paste being prepared during the time he worked there and said that if asbestos was suspected, it would have to be reported. He said that he could recall asbestos gaskets, but not asbestos insulation. He does not suggest that he knew or ever worked with the Claimant.
Mr Cross is a heating engineer who has worked for the Defendant for forty years. He says that he knew the Claimant, but not well. He said that if he found asbestos, he would never remove it, but always report it. He says that the "guidance" from the company was not to disturb asbestos and that if asbestos was suspected, it had to be reported. He says that "we did not do the lagging ourselves". He did, however, say that "if [we] discovered lagging and it was a small quantity, we would take it off but if it was a large quantity, then a lagging firm would be instructed to remove it." He said that he had never mixed paste or seen paste being used in any of the work carried out by the Defendant. He did accept that "you could be exposed to asbestos accidentally". He said that he could recall "something of that nature even within the last couple of years", but added that this was "exceptional".
The Claimant prepared a further witness statement, as I have indicated above (paragraph 13), which sought to reinforce the position taken in his first witness statement.
The essential thrust of Mr Evans' argument is that the Claimant's fundamental case is that he was exposed to asbestos as a matter of course throughout his employment and as part of his ordinary routine work tasks he removed old asbestos insulation before carrying out work on boilers, pipe work or associated heating equipment. Mr Evans said that the Claimant claims that he personally mixed asbestos powder material to a paste to apply as new lagging. All this, he contends, is contradicted by the Defendant's evidence and, as he put it in his Skeleton Argument, if accepted this evidence "casts serious doubt on the entire edifice of the Claimant's case." At all events, it is, he says, sufficient to warrant investigation at a trial.
Mr Makey's response, which essentially mirrors the submissions he put to the Master in the Skeleton Argument he put forward at that stage, was in essence that on closer examination the Defendant's evidence is not as compelling as suggested in undermining the Claimant's case and that the Master was entitled to reach the conclusion he did. For example, he says that the health and safety manual mentioned by Mr Robinson has not been put in evidence and, accordingly, its date and contents are unknown. In relation to Mr Dinsdale, Mr Makey draws attention to the fact that he does not give any example of any job on which he and the Claimant worked together and also that, since he did not join the company until 1989, he could not speak about what happened in the earlier years of the Claimant's employment. In relation to Mr Heywood, Mr Makey notes that he accepts that during the period 1981-1995 it is "possible" that he might have come across asbestos, something that finds echoes in the statement of Mr Cross. He submits that Mr Stephenson's statement does not take matters very far on behalf of the Defendant. He contrasts this evidence with the corroborative evidence of Mr Reeves and Mr Prior who, unlike these witnesses, did work regularly with the Claimant.
The essential question at this stage is whether the decision of the Master that the Defendant had no real prospect of success in defending the claim was a judgment that fell within or outwith the spectrum of decisions where reasonable disagreement is possible. If it fell within it, even if I or another judge or Master might have reached a different conclusion, there is no scope for interference at this level. If it falls outside it, I must set aside the decision.
I have already indicated that, in my view, it is wrong to evaluate the Master's ruling by reference to a close textual analysis of the words used. This was an ex tempore ruling given by what, in essence, is a specialist tribunal (with a natural "feel" for the kind of issues involved) to parties represented by specialist advisers. Of course, it is necessary to see that the essential parameters have been observed, but to expect a ruling from any tribunal, no matter how experienced, that dots every 'i' and crosses every 't' is a step too far. It is quite plain that the Master considered carefully the Claimant's evidence and evaluated how, if it did, it withstood the evidence of the Defendant. Although Mr Evans sought to suggest that the first two sentences of paragraph 3 of the ruling (see paragraph 17 above) showed that the Master focused only the Claimant's evidence, I do not think that that contention is justified. The next few sentences show that he addressed the Defendant's evidence, but considered that the submissions made about it by Mr Makey were justified and on that basis did not consider that the evidence, even taken as it stood, undermined the Claimant's case sufficiently to warrant further investigation at a trial.
On the question of exposure to asbestosis itself, the Master's conclusion, in my view, was entirely justified. Whilst I accept Mr Evans' point that the Claimant's case is apparently advanced on the basis that there was continuing exposure to asbestos throughout his employment, that case does not have to succeed in precisely that form to bring home his claim. If the court were satisfied that at some stage during the whole period of his employment by the Defendant the Claimant had been significantly exposed to asbestos fibres, then sufficient factual exposure will have been established. Quite often the truth on a matter of fact lies some where between the extremes of both parties – here between the Claimant's "daily exposure" case and the Defendant's "no or minimal exposure" case. I can see nothing wrong with the Master's decision that the Claimant's evidence supported a conclusion of "significant exposure" (see paragraph 3 of his ruling). Had I been expressing my own conclusion on the evidence, I might have added that the exposure was sufficiently regular to amount to "significant exposure" albeit not such that without further examination of the evidence it could be said to have been on a more or less daily basis. Indeed the Master himself simply referred to "prolonged" exposure. However, that conclusion is sufficient for 'Show Cause' purposes.
The next question is whether the Defendant had raised sufficient evidence to suggest that any such exposure was not in breach of duty. Where there has been significant exposure over a significant period, it would require some fairly strong prima facie evidence to defeat the proposition that at least some of that exposure was wrongful. What is largely sought to be relied upon here is the "standing instruction" to all employees that they should not become involved with asbestos.
In the first place, if there was significant continuing exposure to asbestos over a lengthy period towards the Claimant and his witnesses, it suggests that any such standing instruction was ineffective and that the message had not been brought home to all employees. The evidence of the Defendant's witnesses, whilst referring to the "guidance" given by the Defendant, is very unspecific about when and in what circumstances the cautionary message was conveyed and, as Mr Makey observed, the Health and Safety Manual has not been exhibited to Mr Robinson's statement or deployed elsewhere in the evidence.
It seems to me that this analysis would be sufficient to conclude that it would be fanciful to think that the Defendant could establish that the exposure was other than in breach of duty. The Master did not express himself in detail about this and did not mention specifically the "standing instruction", but (a) the mere fact that he did not mention it does not mean that he did not consider it and (b) he did say that the level of exposure was such that the Defendant should have taken steps to protect the Claimant and thus clearly concluded that the evidence did not suggest that they did.
As it seems to me, the Master was entitled to reach this conclusion on the evidence presented to him and also in the light of his experience in dealing with cases of this nature. It is, of course, possible that another Master would have permitted the case to go to trial, but that is not the test. The test is as I have set out in paragraph 34 above.
Nothing I have said should be taken as militating against the need to examine each case on its merits at a 'Show Cause' hearing. Merely because 95% of cases are shown to be without an arguable defence does not, even arithmetically, mean that the Claimant will succeed at every such hearing. However, there is no warrant for thinking that the Master approached this case other than on the basis of a conscientious consideration of the evidence and, in my view, he reached a sustainable view having regard to the evidence and argument. In those circumstances, this appeal must be dismissed.
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The Honourable Mr Justice Blake:
This is an appeal from a decision of Master Eastman given on 6 July 2015 striking out the appellant's Defence and Counter claim and giving summary judgment to the bank on its claim for payment of money due under a guarantee signed by the defendant personally for debts owed by one of his companies.
The relevant background is that the defendant traded for a number of years in expensive motor vehicles. He had two companies that for the purposes of this judgment I will call CSF and PFL. CSF had a poor trading year for various reasons and had an overdraft facility with the bank in the sum of £250,000. That overdraft was subject to a personal guarantee offered by the defendant. In August 2012 the defendant decided that he would wind up CSF with its various debts including £250,000 to the bank. He wanted to continue trading with PFL, however, as this company was solvent and had no overdraft facility or liability.
It is common ground that on the 15 August 2012 there was a meeting to discuss future banking facilities and the CSF overdraft in the light of these circumstances. On the 15 August 2012 the defendant was unwell and unable to attend personally but Aaron Jameson, the newly appointed finance manager for PFL did so. He met with Paul Hicking the relationship manager employed by the bank at Canary Wharf. Following the meeting at 18:16 Mr Hicking sent Mr Jameson an e-mail in the following terms:
"Following on from our conversation earlier today I am writing to confirm that agreement has been given to switch the overdraft facility from (CSF) to (PFL) subject to the following terms and conditions:
1. Interest will be charged at 8% above the bank's base rate with an annual 2% rate fee payable quarterly;
2. Security required is a) Personal guarantee from Clive Sutton Ltd to £250,000; b) Debenture; c) 2nd legal charge over Flat 3, Admiral Walk, Bournemouth:
3. Security to be in place prior to switching of facility;
4. Please provide a copy of Begbies Traynor pre-liquidation report together with a list of creditors in (CSF);
5. From October we will be looking to convert the overdraft to an on demand loan being repaid over a maximum 4 year term;
6. To aid this could you please provide a copy of the 2011 audited accounts, standalone management accounts up to June 2012 and forecasts for the remainder of 2012 and for 2013.
7. Going forward there will be a requirement to provide monthly managements accounts to be received within 30 days of each month end.
I trust you find this acceptable and I look forward to hearing from you shortly."
The defendant was copied into the e-mail. There was no response to it contained in the evidence bundle.
The following day Mr Hicking sent two documents to the defendant. The first was the overdraft facility Commercial Terms stating in its first paragraph that 'the bank is pleased to offer the borrower an overdraft facility' on the terms contained in that document (the Commercial Terms) and its Standard Terms. The borrower was identified as PFL. The limit was £250,000 and the purpose was for working capital. The additional security required in the e-mail was set out in this document. Under the heading Special Conditions it was stated:
"On the marking of this facility the overdraft in the name of CSF shall be cancelled."
Under the heading Conditions Precedent is stated:
"Any evidence required by the Bank for the purposes of any 'know your customer' and 'know your business' or other similar checks, the new security required together with such other related documents as the bank required."
The Standard Terms document contained under the heading Conditions Precedent the following:
"The borrower may not utilise the facility until the Bank has received, in form and substance satisfactory to it, the Conditions Precedent."
There were then a number of months delay before any further significant events occurred. On the 21 December 2012 the defendant signed a personal guarantee in respect of any debt owed by PFL to the bank up to a limit of £250,000. The terms of the guarantee document state amongst other things:
"8.1 You will be bound by this Guarantee from the time that you sign it even if
someone else was supposed to sign it or
other arrangements to secure Customer liabilities are never actually put in place."
There was an accompanying declaration that the defendant had taken legal advice before it was signed.
Although the guarantee was signed, other aspects of the security mentioned in the e-mail of the 15 August 2012 and the Commercial Terms of the 16 August were never complied with; notably that Mr Sutton never executed a legal charge over his house in Bournemouth that was his home.
Nothing further was done to transfer the overdraft liability of CSF to PFL until February 2013. By this stage the CSF overdraft had increased to £266,665 as a result of interest accruing that had not been paid in the interim. Without any further formality this debt was transferred to PFL on the 21 February 2013. At 17:30hrs that day Mr Jameson e-mailed Mr Hicking in the following terms:
"I have just noticed that the overdraft has been transferred over to us now -£266,665.23. This has engulfed £6272.65 of working capital that we are needing to use. It is my understanding that the balance will eventually become a loan repayable and can I suggest that in order to allow us to use the monies we had in this account, the overdraft is increased to the amount transferred (-£266,665.23). And until such point as a loan agreement is set up that charges are frozen on it?"
Mr Hicking replied to this explaining that the increase was due to the accrual of interest and:
"when the loan account is eventually drawn down this will be limited to a amount of £250,000 (although the fee can be added to the loan) in line with the security limitation – personal guarantee from Clive limited to £250,000. Consequently it would not be possible to add this figure to the loan and it will need to be covered from general cash flow."
The e-mail continued that Mr Hicking was still waiting for the financial forecast and management figures that he sought as a matter of urgency and the legal charge on the Bournemouth flat was still outstanding which:
'seven months on from when first commenced was disappointing'.
Mr Sutton e-mailed Mr Hicking on the 25 February saying amongst other things:
"The timing of this transfer onto the PFL account is not helpful for us as we are in a build up phase of ordering for cars to be exported in March and April. Hence the income has been sparse since Jan. Accepting that the balance transferred is all due please enable the account to function without this effective neutering. If we had 6/7 K headroom and need it for the month end and there will be some DD's presented from time to time. Perhaps you could temporarily mark the limit up to the amount transferred thus enabling us to use the head room and ensure that income due will be able to be used to pay for regular payments. The Bournemouth charge is being sorted out…. Apologies for the delay. In due course I will come in for a general update with you."
Following a further exchange of e-mails Mr Hicking sent one on the 28 February that included the following:
"Your understanding that the debit balance (which at the time was £250,000) in September would be financed to loan was correct. This was always subject to security being in place and forecasts demonstrating repayment of loan over a 3 or 4 year term. Any facility to be agreed was always on a secured only basis and the sum of £250,000 was agreed hence that amount was proposed guaranteed. These requirements should have been met by October the latest. The delays in getting security in place were through no fault of the bank and the documentation was sent out at least three times. Consequently due to the delays interest has continued to accrue – if the balance had been re-financed in October the additional interest would not have occurred and you would have had to have covered ongoing interest in the normal course of business."
Thereafter the defendant was unable to secure any further credit for PFL and that company had to stop trading. In due course the bank issued a claim for a principal sum due under the guarantee of £249,715 and interest accruing since the date of its demand. The Particulars of Claim state that:
"On the 16 August 2012 the bank offered an overdraft facility to (PFL) for working capital purposes subject to the banks commercial terms and standard terms."
In response to this claim the defendant drafted his own Defence. Paragraph 9 of that Defence is in the following terms:-
"The bank's relationship manager Mr Paul Hicking was well aware of (CSF)'s problems. In order to enable the group business as a whole to continue, it was agreed between Mr Sutton and Mr Hicking on or around 15 August 2012 that the overdraft limited to £250,000 which was provided to CSF by the bank would be moved to PFL and would be entered into as a term loan by PFL".
Paragraph 10 of the Defence states that it was agreed on the 15 August that the overdraft would be moved from CSF to PFL and would be turned into a term loan lasting for and least four and potentially five years and continues:
"Mr Hicking explained over the phone in early August 2012 that the process of transferring and borrowing from CSF to PFL would be by first transferring the overdraft from CSF to PFL and then the term loan drawdown would be credited to the account of PFL."
Paragraphs 30 and 31 of the Defence state that it was agreed that the overdraft balance from CSF would be transferred to PFL as a term loan and that the overdraft documentation was provided as a step in the process of transferring the balance to a termed loan. Mr Sutton counter-claimed for the losses incurred by PFL as a result of the unexpected saddling of its accounts with the transferred debt on the 21 February 2013 as a result:
"of the improper application of an overdraft without provision of a termed loan and the security package agreement was breached."
The bank in its Reply and Defence to the Counterclaim admitted the agreement for transfer of the overdraft facility from CSF to PFL and that the possibility of converting that facility into a term loan was considered but denied that any concluded agreement to do so was reached.
In due course, the bank sought summary judgment pursuant to CPR 24. The issue is whether on the state of the pleading and supporting evidence the defendant has no real prospect of successfully defending a claim in issue. The transcript of the hearing shows that at the outset Master Eastman was inclined to the view that there was a dispute of fact at to whether there was a concluded agreement for a term loan, but having heard the advocate for the claimant and Mr Sutton in response reached the conclusion that;
"Regrettably there is nothing by way of documents, so far as I can see or I have been shown, to support the existence of any legally binding security package agreement such as is suggested."
It was Mr Sutton who had relied upon the 15 August e-mail to which reference has earlier been made but it is apparent from its terms that what was said to be agreed at point 5 was a 'looking to convert' the overdraft to a term loan rather than a concluded agreement to that effect. The Master noted:
"Mr Sutton argued, with some force, that there was a lot of other surrounding circumstances in the way in which the future was planned. That maybe so but the fact of the matter is that, and the inescapable fact of the matter is, as far as I'm concerned, that he entered into this guarantee, which is set out in my bundle and there is no impediment to, as things have evolved Barclays Bank seeking to enforce it as the do by this action."
Permission to appeal was granted by Dove J on the 5 October 2015 and the appeal came before me on the 26 October 2015.
In his written and oral submissions Mr Granville Stafford (for the defendant) makes two points. First, the bank's claim has pleaded an offer but there is nowhere pleaded an acceptance of the offer of a overdraft facility made in August 2012. Without evidence of such an acceptance there was no concluded agreement upon which the bank could rely to debit PFL's account in the way that it did in February 2013. Second, if there was a concluded agreement it was subject to a collateral contract or warranty that when PFL took on the debts of CSF it would be on the basis of a loan or alternatively a wider agreement, of which the guarantee was only a part, and accordingly the guarantee can not be relied upon in isolation.
I fully accept the principle that a written contract may need to be construed in the light of other oral agreements that are binding and operate to restrain the manner in which the written agreement is carried out. However, in my judgment, the Master was correct to focus upon whether there was a real prospect of the defendant showing at trial that there was a concluded agreement for a fixed term loan as opposed to a contingent aspiration.
Although the Particulars of Claim drafted by the bank are peculiar in not identifying when the contract for a transfer of the overdraft was in fact made, I consider there is force in the submissions of Mr Patel (for the claimant) that on the state of pleadings before the Master it was common ground between the parties that there had been agreement to that effect in August 2015. It is true that this agreement could not then be put into effect until the bank had first received Mr Sutton's guarantee in respect to the PFL overdraft, which was eventually received in December 2012. It is also true that there are other provisions relating to the bank's security, notably the grant of the charge over Mr Sutton's house, which had not been complied with by February 2013.
It is contended by the defendant that there was a condition precedent to the enforceability of the contract and it is a condition which binds the bank as much the defendant. The Standard Terms quoted at [4] above refer to the borrower not being able to use the facility until the Conditions Precedent are satisfied. The bank successfully argued before the Master that a condition designed to protect its position could be waived at its request, although not the reverse. The reality of the position was that the bank had stayed its hand in enforcing the guarantee in respect of the CSF overdraft in the expectation that the relevant security would be in place in respect for the PFL loan to enable the liability to be switched. It was only in December that any security was granted that would enable the bank to make the switch from an account where interest had been accruing. The terms of the guarantee in December 2012 make it plain that it came into effect forthwith even if other provisions relating to security had not been brought into effect. The unexecuted charge over the house was another such security. The contract cannot reasonably be construed as preventing the bank moving the overdraft to PFL because of the defendant's failure to provide the security envisaged in the August agreement. This along with the other failures was relevant to whether it was obliged to forthwith convert the overdraft into a loan.
The defendant contends that it is not the enforceability of the guarantee that is in dispute in these proceedings but whether there was any debt owed by PFL to the bank to which the guarantee could attach.
Conclusions
Mr Patel points out by way of back-ground that it is apparent that Mr Sutton owed the bank the full limit of the guarantee he entered into either for the over draft of CSF or for that of PFL on transfer from CSF. Whilst that is correct although it does not answer the question whether the defendant was liable under the PFL guarantee which is the basis of the bank's claim in the present proceedings. The bank could have brought proceedings on the CSF overdraft at any time from August 2012 although it did not so; it says that that this was to enable PFL to trade without Mr Sutton being saddled with a judgment debt for £250,000.
I confess to surprise that the PFL account was charged with the CSF overdraft in February 2013 without any further notice that this would occur. I do not doubt that Mr Sutton was himself surprised by this development but the question is not whether he expected it then but whether the bank had the right to do so.
I have given careful consideration to the defendant's submissions in the light of the pleadings, the witness statements, the terms of the e-mails and the commercial context of these transactions. In the end I conclude that the Master was not wrong in the decision that he reached.
There was abundant evidence before him that there was a concluded agreement for the transfer of an overdraft from CSF to PFL made in August 2015 but dependent for its efficacy upon the bank being satisfied that it had sufficient security for the new agreement. The bank was sufficiently satisfied of the latter after the signing of the guarantee for PFL in December. It would be unreal if the bank were not permitted to act on the August agreement in the light of this guarantee because Mr Sutton had failed to provide the additional security required. The terms of the security that he signed alerted him to this.
By contrast there is no evidence of a concluded agreement for a fixed term loan at the time of the transfer. Mr Sutton's witness statement to the effect that that was the arrangement encounters the following difficulties:
i) he was not at the 15 August meeting when the agreement was reached;
ii) he never contradicted the terms of the e-mail indicating that there was an agreement for the transfer of the overdraft to PFL although he was copied into that e-mail;
iii) he himself relied upon that e-mail as evidence of an agreement for a loan when it is plain that it referred to an expectation of a future agreement contingent upon management accounts and the like being made available;
iv) his pleaded case was that there was to be a transfer of the overdraft first and then the loan was to follow;
v) he never met the remainder of the bank's requirements for security in order to be able to progress to conversion into a term loan.
There is also substance in the claimant's point that the reaction of Mr Sutton and his Finance Director to the February 2013 transfer of the overdraft is revealing as to the nature of the terms of the agreement with the bank.
In both cases, their first reaction was not to contend that the transfer was a breach of the agreement but simply to ask for an extension in the credit limit to enable trading to continue. Mr Jameson's e-mail is particularly revealing in referring to an understanding that the balance will eventually become a loan repayable. That is precisely the claimant's case.
Accordingly, despite Mr Sutton's protestations to the contrary, I conclude that there are no real prospects of him successfully defending the claim or establishing his counter-claim. This appeal is accordingly dismissed.
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Mr. Justice Teare :
This is the trial of a preliminary issue in an action in which a commercial agent has sought compensation from his principal on the termination of his agency. The issue to be tried is as follows:
"Whether the Claimant is entitled to compensation (as opposed to an indemnity) pursuant to clause 6.3(a) of the EU Agency Agreement executed by the Claimant and the Defendant on or about 9-14 December 2009, referred to in the statement of case as the "EU Agreement", (as defined in the Amended Particulars of Claim dated 6 March 2015) and pursuant to Regulation 17 of the Commercial Agents (Council Directive) Regulations 1993 (as amended)."
The background
The Defendant is a Californian fashion company designing, manufacturing and retailing luxury women's clothing. The Claimant is a UK sales agency. Between 2009 and 2014 the parties were in a contractual relationship whereby the Claimant sold the Defendant's clothing to retailers in the EU and elsewhere for commission. The "EU Agreement" between the parties is governed by English law.
Pursuant to the Commercial Agents Regulation a commercial agent is entitled to an indemnity or compensation on termination of the agency. Unless otherwise agreed the agent is entitled to be compensated rather than to be indemnified. Regulations 17 and 19, so far as material, provide as follows:
"17(1) This regulation has effect for the purpose of ensuring that the commercial agent is, after termination of the agency contract, indemnified in accordance with paragraphs (3) to (5) below or compensated for damage in accordance with paragraphs (6) and (7) below.
17(2) Except where the agency contract otherwise provides, the commercial agent shall be entitled to be compensated rather than indemnified.
………..
19. The parties may not derogate from regulations 17 and 18 to the detriment of the commercial agent before the agency contract expires."
The agreement between the parties provides as follows, so far as material:
"6.3(a) Upon expiry or termination of this Agreement for any reason:
(a) If and to the extent that the ….Regulations apply, [the Claimant] shall (if and to the extent so entitled in accordance with the provisions of the Regulations) have the right to be indemnified as provided for in regulation 17 of those Regulations. For the avoidance of doubt, [the Claimant] shall have no right to any compensation under those Regulations upon termination or expiry of this Agreement provided that if the amount payable by way of indemnity under this Clause would be greater than the amount payable by way of compensation, [the Claimant] shall ….have the right to receive compensation instead of an indemnity under the regulations ….
7.5 In the event that any provision of this Agreement is held to be invalid or unenforceable, such provision will be deemed to have been severed from the Agreement, while the remained of the Agreement will remain in full force and effect."
In Shearman v Hunter Boot Ltd [2014] EWHC 47 (QB) HHJ Mackie held that similar provisions in the agency contract before him did not amount to a valid "agreement otherwise" and so was unenforceable. At paragraph 35 he said:
"I recognise that the right to choose may permit not only choice between the systems but also election of one where the termination is for one reason and the other where it is for another. Clause 14 does not provide for different systems in different situations, visible at the time of the agreement such as death or bankruptcy (as envisaged by, for example, the DTI guidance). It provides for different systems to apply in an eventuality not capable of being specified at the time of the Agreement, namely whichever system turns out at termination to be cheapest for the Principal. This does not seem to me to give effect to the choice which the Directive and the Regulations permit. The Clause does not give the Agent, in a real sense, the 'Entitlement' (as it is described in the heading to the Regulation) to either compensation or, alternatively, indemnity."
It is common ground that that analysis applies to clause 6.3(a) of the agreement between the parties in the present case.
Mr. Segal QC, on behalf of the Claimant, submits that there being no valid "agreement otherwise" the Claimant is entitled to compensation pursuant to Regulation 17. Mr. Moser QC, on behalf of the Defendant, submits that the offending proviso in clause 6.3(a) can be severed leaving the rest of the clause in place with the result that the Claimant is entitled to an indemnity, not compensation. The question of severance was left open in Shearman because, although the judge raised the point, it was not argued. It now falls to this court to determine the question.
Mr. Segal submits that the severance argument is misconceived for two reasons. First, it is said that the question does not arise. Lest I misrepresent this argument I shall set it out as it appears in Mr. Segal's skeleton argument:
"The question must first be answered whether the EU Agreement "otherwise provides", within the meaning of the regulations, for an entitlement to an indemnity. Only if the answer to that question is Yes does it become material whether the second sentence of clause 6.3(a) can be severed as a matter of English common law. The answer to that question in this case is No; therefore the issue of severance is a red herring."
The second argument is that, if it is relevant to consider severance, it is not permissible to sever the offending proviso pursuant to the common law rules on severance which it is common ground are the relevant rules to apply.
Mr. Moser submits that the proviso can be severed, leaving the lawful choice of an indemnity in the first part of the clause.
Does severance arise at all ?
Mr. Segal's submission is that since, for the reasons given by HHJ Mackie, clause 6.3(a) does not "otherwise provide", the Claimant is entitled to compensation upon termination of the agency agreement pursuant to Regulation 17 and no question of severance can arise. I was not persuaded that this is the correct approach. The assumption underlying the submission is that when determining whether the agency agreement "otherwise provides" the court construes the agreement and does not consider, in the event that it determines that a clause, or part thereof, is invalid and unenforceable, whether it can properly be severed. I consider that the court should consider the question of severance before finally determining whether the agreement "otherwise provides", particularly in this case where clause 7.5 of the agreement itself expressly contemplates severance in the event that any provision of the agreement is held to be invalid. If the court considers that the invalid clause can be severed then the court can finally determine whether the agreement "otherwise provides".
Severance
In Beckett Investment Management Group v Hall [2007] 1 ICR 1539 Maurice Kay LJ, with whom Sir Anthony Clarke MR and Carnwath LJ agreed, said that the threefold test formulated in Sadler v Imperial Life Assurance [1988] IRLR 388 "should be adopted". I must therefore adopt that test when considering the question of severance. That test is a follows:
"… a contract which contains an unenforceable provision nevertheless remains effective after the removal or severance of that provision if the following conditions are satisfied:
(1) the unenforceable provision is capable of being removed without the necessity of adding to or modifying the wording of what remains;
(2) the remaining terms continue to be supported by adequate consideration;
(3) the removal of the unenforceable provision does not so change the character of the contract that it becomes 'not the sort of contract that the parties entered into at all'."
In the present case it is common ground that tests (1) and (2) are satisfied. The dispute concerns the third test.
The removal of an unenforceable provision will inevitably change the agreement which the parties purported to make. The mere fact that the removal will change the agreement is not enough to bar severance. The removal of the unenforceable provision must "so change the character of the contract that it becomes not the sort of contract that the parties entered into at all" (emphasis added). So the court must exercise its judgment as to the extent of the change and its effect.
Mr. Moser submitted that the first part of clause 6.3(a) contained a valid election by the agent to accept an indemnity rather than compensation. The proviso was invalid in that the agent nevertheless agreed to accept compensation when the amount payable by way of an indemnity would be greater than the amount payable by way of compensation. Removal of the invalid proviso would have the effect that the valid election to accept an indemnity remained such that the character of the agreement had not changed. It remained the sort of contract that the parties entered into.
Mr. Segal submitted that the two parts of clause 6.3(a) are, in substance, interwoven: the agent gets an indemnity subject to compensation being less valuable; it gets compensation subject to an indemnity being less valuable. He said that where two parts in fact constitute one covenant or two interdependent covenants (or, as he put it orally) two covenants one of which is dependent upon the other, no severance is permissible, even though one part, viewed in isolation, is unobjectionable. He said that the court should have regard to substance rather than to form (or, he said, to the syntax) of the clause. He relied in particular on Kenyon v Darwen Cotton Manufacturing Company [1936] 2 KB 193 and Marshall v NM Management [1997] 1 WLR 1527.
There is undoubted force in Mr. Segal's submission that in substance the effect of clause 6.3(a) is that the agent gets an indemnity provided that compensation is not less, in which case he gets compensation. I further accept, as was stated by Millet LJ in Marshall v NM Management at p.1532 that one must have regard to substance rather than form, though Millett LJ added that the structure and language of the contract are of prime importance. However, when considering the substance or "character" of the clause it does seem to me important to bear in mind that the Regulation permits an agent to agree to accept an indemnity. That is what the first part of clause 6.3(a) purports to do. It is a concession by the agent who would otherwise be entitled to compensation. The proviso amounts to a further concession by the agent, namely, that where compensation proves to be less than an indemnity he will be entitled to compensation only. That is an invalid and unenforceable concession. It is true that it affects the operation of the otherwise enforceable concession so that one is dependent upon the other. But the question for the court is not whether the enforceable part of the clause is dependent upon the unenforceable part of the clause. The question for the court is whether the removal of the unenforceable part so changes the character of the contract that it becomes "not the sort of contract that the parties entered into." The sort of contract into which the parties entered into was one in which the agent purported to accept an indemnity rather than compensation in the event that the agency was terminated. Had that been the effect of the clause as a whole the agent's acceptance of an indemnity would have been valid and enforceable. However, because of the proviso, that was not the effect of the clause as a whole. The proviso had the effect that the agent only agreed to accept an indemnity so long as the measure of an indemnity was less than the measure of compensation. If it was greater then he had to accept the lesser amount of compensation. To remove the proviso certainly changes the meaning of the clause as a whole but I am not persuaded that it so changes the character of the contract that it becomes not the sort of contract that the parties entered into. Before severance of the proviso it was an agency contract in which the agent had purported to accept an indemnity but had in addition agreed to accept compensation if that was a lesser sum. After severance it is an agency contract in which the agency has agreed to accept an indemnity whether or not compensation would be a lesser sum. In my judgment the contract remains, after severance, "the sort of contract that the parties had entered into".
I have considered the decision in Kenyon v Darwen Cotton Manufacturing Company upon which Mr. Segal relied in support of his submission that where two parts of a contract were one covenant or two interdependent covenants no severance is permissible. In that case there was an arrangement between a company and an employee whereby the employee subscribed for shares in the company and paid for them out of the employee's wages so that the employee received only the net amount of her wages. She signed two documents; the one requesting the allotment of shares and the other agreeing that the shares should be paid out her wages. The Truck Act 1831 provided that wages must be paid in the current coin of the Realm. Section 1 provided that if a contract contravened its provisions "the contract shall be and is hereby declared illegal null and void." Section 25 provided that "contract" was to be given a wide definition to include "any agreement understanding, device, contrivance, collusion or arrangement whatsoever on the subject of wages." The employee's wages had not been paid in full in coin of the Realm and so she claimed for what had not been so paid to her. The court of appeal held that there had been a violation of the Truck Act and that the employee was entitled to recover so much of her wages as had not been paid in the coin of the Realm. The court of appeal further held that the company's counterclaim for payment of the shares failed. The county court judge had held that the contract to purchase the shares was severable from the illegal contract. The court of appeal disagreed. Slesser LJ said that the two documents signed by the employee were the terms of one contract and not to regard them as such would be entirely artificial. To enforce the obligation to purchase shares would be enforcement of an illegal and void contract. He referred to the wide definition of "contract" and said that it was clearly wide enough to cover the whole of the arrangements which had been made. Scott LJ referred to the "extraordinarily wide and all embracing" definition and noted that it was "whole network of agreements, understandings, devices, contrivances, collusions whatsoever on the subject of wages" which was made illegal. He concluded that the agreement to take and pay for shares was avoided by the wide operation of the Act. It is therefore clear that no question of common law severance of the agreement to buy shares from the agreement to receive only the employee's net wages could arise. I therefore do not consider that this case assists or supports Mr. Segal's submission.
Conclusion
Once the proviso is severed from clause 6.3(a), as I consider it should be, the clause contains only the valid concession by the agent that in the event of termination of the agency agreement the agent will be entitled to an indemnity rather than compensation. For the purposes Regulation 17 the agency contract therefore "otherwise provides."
For the reasons I have given the answer to the preliminary issue is No.
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HHJ Burrell QC :
There are two applications before the court which are intertwined and closely related. There is the claimant's application dated 21st September 2015 for an order debarring the defendant from relying on the second report from their expert, Mr Kambourolgou, (consultant orthopaedic surgeon) dated 4.8.15 and the defendant's application dated 18.9.15 to withdraw its "admission" in relation to breach of duty in para 5 of their defence.
I deal first with the defendant's application to withdraw the "admission".
The claimant's pleaded case is in negligence and relates to arthroscopic shoulder surgery carried out at the defendant's hospital on 12.8.11. In the post operative instructions the surgeon directed that physiotherapy should commence "asap". However no physiotherapy started until 14.9.11 by which time the shoulder was stiff and painful. The claimant has now been left with a poor result from what should have been a straightforward procedure.
In a rather unusual pleading in the defence the defendant pleaded as follows;
"if the facts alleged in the Particulars of Claim and in particular the allegations that Mr Al-Sabti intended to refer the claimant for physiotherapy as soon as possible but that the claimant was offered no such physiotherapy until October 2010 [NB this date does not come from the claimant] are correct then breach of duty as alleged in paragraph 21 of the particulars of claim will be admitted unless the records reveal some good reason why such physiotherapy was not offered. As hereinbefore appears the defendant has yet to verify those allegations or identify whether there is some good reason why physiotherapy was not offered (if it was not)."
Is this an admission of breach from which the defendant requires permission to withdraw? In my judgment, this is a qualified admission of breach i.e. conditional upon the claimant proving the matters contended for. In particular, it was not pleaded that physiotherapy was in fact provided within a reasonable time frame nor that that any failure to provide physiotherapy was in accordance with and supported by a responsible body of medical opinion.
It is difficult to understand how and why the defendant put it's case in this way at this stage. Mr Lemmy, for the defendant says it was probably because no or no sufficient medical records were provided to the defendant at the time the pleading was settled however the medical records appear to have been provided to the defendant on 18.8.14, before the defence was settled. In any event, the defendant could have applied for an extension of time for service, if the notes were needed before drafting.
In my judgment the pleading is an admission of breach albeit a heavily qualified one and despite the conditional nature of this admission, the defendant does require permission to withdraw it in these circumstances. The defendant is now in possession of the report from Mr Kambourolgou of 4.8.15 but has no permission to rely on the same if that report can be said to deal with breach. There is no question but that the report does purport to provide an opinion on breach – see paras 4.4, 4.5, 4.6, 4.7, 4.8, 4.9, 4.10, 4.12 and 4.13.
CPR Part 14 and Woodland v Stopford [2011] EWCA Civ 266 are relevant. See The White Book, Vol. 1 at page 451- the following matters are relevant to the exercise of my discretion namely:
i) The parties' conduct. The claimant's solicitors have clearly proceeded on the basis that there was a conditional admission of breach of duty- see their letter of 4.6.15.
ii) It is difficult to accept that the defendant's solicitors were proceeding on the basis that breach of duty was really in issue given that the contents of their expert's report of 10.2.15 did not address breach at all but dealt only with causation.
iii) There was no prompt application to withdraw the "admission"
iv) In granting permission to withdraw, there will be inevitable prejudice to the claimant in that breach of duty will become an issue in the trial; additional costs will be incurred through a requirement to seek a further report from Mr Bayley (claimant's expert), there is likely to be a lengthening of the trial hearing from a causation only hearing to a breach and causation hearing; and of course, the claimant's liability report will not have been simultaneously exchanged as ordered by the Master.
v) There is no significant prejudice to the defendant as their expert appears to have,... at least in part ) changed his view on breach to that as expressed in the joint experts' meeting. On any view, he seems to have withdrawn from opinions expressed in his report of 4.8.15. If there is no express withdrawal, there is certainly major inconsistency. This obviously deleteriously affects the defendants' prospects of success in any contest on breach.
vi) If I allowed withdrawal, the defence would require amendment.
If I allowed withdrawal, it would be inconsistent if I did not also allow the defendant to rely on the second report from Mr Kambourolgou. If that were to happen then the requirement for simultaneous exchange of liability reports will have been avoided.
The essence of the problem seems to have stemmed at least in part from a lack of understanding of the issues by Mr Kambourolgou, and/or possibly by his change of mind on liability compounded by an enigmatic defence pleading.
In all the circumstances, it is not in the interest of the good administration of justice to allow the defendant to withdraw the matters pleaded at para 5 of the defence. Pleadings still mean something and must be carefully drafted before service, setting out in clear unambiguous terms the nature of the relevant parties' case. This is with a view to narrowing any issues between the parties, keeping litigation within manageable means, and helping the court in its subsequent resolution of issues which is entirely in line with the overriding objective.
Permission to withdraw the admission is therefore refused.
I deal next with the claimant's application. It would obviously be inconsistent if I refused permission to withdraw the admission as I have and yet allow the defendant to rely on the second report from Mr Kambourologou. Hence my decision to refuse the defendant's permission to withdraw their " admission" necessarily informs my discretion as to whether to grant the claimant's application.
As I have already referred to, there is no doubt in my mind that the 4.8.15 report from Mr Kambourolgou is a report commenting on breach i.e. a report on liability. He states in that report that a responsible body of opinion would consider physiotherapy not to be necessary. This contrasts with the joint opinion he later expresses with Mr Bayley to the effect that he agrees there is no reasonable body of orthopaedic surgeons that would consider physiotherapy unnecessary following routine arthroscopic decompression of the type performed on the claimant. The two views are diametrically opposed. This joint statement is dated 17.9.15. it is right to note he does however also say that a reasonable period within which to start physiotherapy would be 3-6 weeks hence, in his view the claimant's physiotherapy started within a reasonable time frame notwithstanding postoperative instruction to the effect that it should start as soon as possible.
It follows that the report of 4.8.15 being in essence, a liability report albeit with some views also expressed on causation was not served in accordance with the Master's directions. The criteria to apply which must inform my discretion is the same criteria for relief against sanction as out of time applications see Altomart Ltd v Salford Estates(No2) [2014] EWCA Civ 1408.-the defendant cannot rely on this report without permission and it has not actually made such an application – hence the claimant's application. I bear in mind the criteria set out in Denton v TH White Ltd [2014] EWCA Civ 906. The following matters are relevant.
i) The issue on breach now raised in the second report from the defendant's expert is inconsistent with the admission pleaded in the defence.
ii) That second report has the appearance of having been drafted after sight of the claimant's expert report from Mr Bayley in the sense that it has been informed by it- this is of course in consequence of the fact that liability reports were not exchanged in accordance with the Master's order. If this were the case, then it would be plainly unfair to the claimant to allow the defendant to rely on it.
iii) The second report from the defendant's expert was served one and a half months after the time for report exchange had expired. That breach of a court order is serious and significant.
iv) No credible explanation has been put forward by the defendant's solicitors as to why this all came about. As I have previously referred to, on the face of it,it seems to result from a failure on the part of Mr Kambourolgou to initially address the relevant issues in his first report then to try to redeem the matter in his second. The matter may have been compounded by a prematurely pleaded defence or possibly one not based on a proper consideration of the defendant's own case. It is difficult to know. To delve further would be unduly speculative. I note the claimant argues that the second report from Mr Kambourologou was prompted following a decision by the defendant to reconsider its position on breach. I do not think enough is known to come to that conclusion but it is a feasible explanation which is consistent with what appears to have happened. On any view, Mr Kambourolgou has provided two inconsistent liability reports.
v) All matters I have set out above in relation to the defendant's application to withdraw the admission. See para 8 (a) to(f).
In all the circumstances of the case and bearing in mind the above, in my judgment it would not be in the interests of justice nor consistent with the overriding objective to allow the defendant to rely on the report from Mr Kambourologou dated 4.8.15 save for those parts of the report which deal with causation and prognosis only.
It follows that the claimant's application is successful and the defendant's application fails in that [the following in italics is added by way of addendum] I am refusing them permission to rely on those parts of the second report from Mr Kamourologou' dated 4.8.15 which deal with breach of duty. For the avoidance of doubt, the defendant has permission to rely on those parts of his report which deal with condition and prognosis including any from his first report and any from the joint report with Mr Bayley.
I will leave counsel to agree the order and I will deal with any consequential matters that cannot be agreed at another hearing if necessary.
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Mr Justice Supperstone :
Introduction
IG Index Ltd, the Claimant, is a spread-betting company authorised and regulated by the Financial Services Authority ("FSA"). Mr Ehrentreu, the Defendant, had been a customer of the Claimant since 2001. The written agreement that the Claimant had entered into with the Defendant that governed the relationship between the parties at all material times took effect on 15 December 2007 ("the Customer Agreement"). Over the years he had placed various spread bets upon the movement of the market. One of the bets, placed in the summer of 2008, on the movement of the share price of Royal Bank of Scotland ("RBS"), went, as Lewison LJ has observed, "disastrously wrong" ([2013] EWCA Civ 95 at para 1). The result of this bet was that by 14 October 2008 the Claimant's account was over £1.2 million in debit.
On 30 April 2009 the parties entered into an agreement for the payment of the debt ("the Settlement Agreement"). The Defendant made some payment pursuant to its terms, but he did not maintain the payments, and on 4 January 2011 the Claimant issued proceedings for the sum of £1,070,350.75 under the Settlement Agreement. On 10 February 2011 a Defence and Counterclaim was filed and served by the Defendant. In summary the Defendant alleged that the Claimant was in breach of the Customer Agreement in failing to close out his position on the RBS bet sooner and hence causing his loss. In addition he claims damages for breach of statutory duty, relying on the FSA Conduct of Business Rules.
On 20 July 2011 Master Fontaine gave judgment for the Claimant on most of its claim and allowed the Defendant to defend the balance. On appeal from Master Fontaine on 29 June 2012 Macduff J gave summary judgment for the Claimant for the whole of its claim. On 22 February 2013 the Court of Appeal dismissed the appeal from the decision of Macduff J. However Lewison LJ (at para 48) noted that there is no order dismissing the Defendant's counterclaim. Accordingly the effect of dismissing the Defendant's appeal against Macduff J's order is that while the Claimant is entitled to the judgment sum, the Defendant is free to pursue his counterclaim. Lewison LJ added that if the Defendant does pursue it, "it will be open to [the Claimant] (after proper amendment of its statement of case) to advance the argument on the interpretation of the Customer Agreement that Mr Mayall sought to develop; and to argue that the counterclaim is incompatible with the judgment in favour of [the Claimant]".
This is the hearing of the Defendant's counterclaim.
Mr David Mayall appeared for the Claimant and Mr Alan Gourgey QC appeared for the Defendant.
Spread Betting
A very helpful account of the nature of spread betting is given by Rix LJ in his judgment in Spreadex Ltd v Battu [2005] EWCA Civ 855 at paragraphs 2-6:
"2. Spread betting is not so much or not merely a bet, although it can be described as such, as a form of contract for differences. It enables a customer to take a position on a market (or an event) for a very small stake. Thus if the Dow Jones index is, say, at 10,000, one can "buy" or "sell" the market at a spread around the index of, for the sake of example, 10 points either way, 9990 to 10010. If one buys, one is betting that the market will rise above 10010. If one sells, one is betting that the market will fall below 9990. If one buys and the market rises, one stands to gain £1 for every point that the index exceeds 10010. If one sells and the market falls, one stands to gain £1 for every point that the index drops below 9990. If, however, one calls the market wrong, then one will stand to lose £1 for every point that the index exceeds the spread point in the wrong direction. Thus if one sells at 10,000 with a sell spread point at 9990, one will make £1 for every point the market falls below 9990 and lose £1 for every point the market rises above 9990. Until the bet or "trade" is closed, the gains and losses are merely "running" gains or losses. They are real enough, but constantly changing with every change in the index, and have not yet been fixed. Closing the bet will fix the position, win or lose. Unlike a classic bet, the customer can of course lose more than his stake. Indeed, on the example given, of a sale spread point of 9990 when the market is at 10,000, if the market does not move an inch, the customer will lose £10 for every £1 staked. Nor, again unlike a classic bet, are his winnings fixed at the outset by an agreement on odds. In theory winnings based on rising markets are infinite (in practice of course they are not) and losses based on falling markets are limited only in so far as they cannot exceed the consequences of a fall in the index to zero.
3. Normally, of course, to gain by £1 for every rise (or fall) of a single point in a stock market index such as the Dow Jones would take an investment of significantly more than £1. In effect, one's £1 bet commands a position in the market significantly greater than the stake. In other words, there is a large element of gearing in the trade, and the situation is correspondingly volatile. Where the market in question is itself in a volatile phase, the risks become even greater. Thus, if the Dow Jones is capable of moving within a range of 100 or 200 points in a single day, the customer can be £100 to £200 richer or poorer per £1 stake within a matter of hours of his trade. On a trade of £100, those figures become £10,000 to £20,000.
4. The spread betting operator who accepts these trades does not bet against the customer, but lays off the trade elsewhere. Ultimately, I suspect, the trade is accumulated in some form of derivative transaction on a futures exchange, but I do not know. The operator, however, by laying off the bet elsewhere seeks to profit by means of the spread. The means by which it does that, and the terms on which it does that, however, are not a matter for the operator's customer: nor, in the present case, have the applicable terms been disclosed.
The credit risk, margin and security
5. If the customer's trade is efficiently laid off, the spread betting operator does not retain a market risk, but, since its customer is open to volatile swings and losses which are potentially out of all proportion to his initial stake, it does retain a credit risk, which it has to be able to monitor closely. Typically, it seeks to limit that risk by controlling the level of its customers' trading and by taking security for its customers' exposure.
6. Such security, or margin arrangements, may take two forms, responding to two kinds of risk. Even at the outset of a trade, indeed at the outset of a relationship, the operator may require funds to be deposited with it as security for the customer's potential losses. The size of such a deposit may reflect, of course, the level of the customer's trading and also the volatility of a market in which that trading takes place. The more volatile the market, the greater can be the potential losses. Secondly, security for running losses already incurred in open trades may be required."
The Customer Agreement
Term 1(3) provides that:
"Nothing in this Agreement will exclude or restrict any duty or liability owed by us to you under the Financial Services and Markets Act 2000 ['the 2000 Act'] or the FSA Rules and if there is any conflict between this Agreement and the FSA Rules, the FSA Rules will prevail."
Term 2 of the Customer Agreement warns the customer that "Entering into Bets with us carries a high level of risk and can result in losses that exceed your initial deposit".
Term 6 explains how a customer can open a bet. Term 6(1) states:
"You will open a Bet by 'buying' (wagering that a specified Index will go up within a specified period) or 'selling' (wagering that a specified Index will go down within a specified period). In this Agreement, a Bet that is opened by 'buying' is referred to as an 'Up Bet' and a Bet which is opened by 'selling' is referred to as a 'Down Bet'…"
Term 8 explains how he can close a bet.
Term 8(1)
"Subject to this Agreement and any requirement we may specify in relation to Linked Bets, you may close an open Bet or any part of such open Bet at any time prior to the Determination Date for the Index in respect of which the Bet is made by entering into a further Bet in respect of the same Index and Determination Date, but in the opposite direction. For the purposes of this Agreement references to closing a Bet (other than in the case of Controlled Risk Bets) may be taken as meaning the crystallization of winnings or losses in the manner set out in Term 7".
Term 8(9)
"Upon closing a Bet:
(a) you will pay us the difference between the Opening Level of the Bet and the Closing Level of the Bet multiplied by the Stake if the Bet is:
(i) a Down Bet and the Closing Level of the Bet is higher than the Opening Level of the Bet; or
(ii) an Up Bet and the Closing Level of the Bet is lower than the Opening Level of the Bet; and
(b) we will pay you the difference between the Opening Level of the Bet and the Closing Level of the Bet multiplied by the Stake if the Bet is:
(i) a Down Bet and the Closing Level of the Bet is lower than the Opening Level of the Bet; or
(ii) an Up Bet and the Closing Level of the Bet is higher than the Opening Level of the Bet.
Unless we agree otherwise, all sums payable by you pursuant to Term 8(9)(a) are due and payable immediately upon the Closing Level of your Bet being determined by us and will be paid in accordance with Term 15. Sums payable by us pursuant to Term 8(9)(b) will be settled in accordance with Term 15(3)."
Term 14 enables the Claimant to require a customer to provide deposits and margin in cleared funds.
Term 1
"From time to time we may require you to provide deposits and margin which may only be provided in the form of cleared funds in our bank account…"
Term 14(2)
"In making any calculation of the deposit or margin that we require from you under this Term 14, we may, at our absolute discretion, have regard to your overall position with us including any of your net unrealised losses (i.e. losses on open positions)."
Term 14(8) and (9)
"(8) Unless otherwise agreed by us on the business day on which you open a Bet, you will immediately, make margin payments sufficient to provide us with an amount which, when a movement adverse to your Bet has taken place, you would lose on the Bet if it was closed on the basis of our current quotation for the Index concerned.
(9) Where, following margin payment becoming due and/or a margin call being made, positive movements in your open Bets result in you no longer being marginable, we may, at our absolute discretion, deem that the margin payment is no longer due or the margin call to have been satisfied."
Term 15 is concerned with payments and set-off. Term 15(1) provides:
"All payments to be made under this Agreement (other than payments under Terms 14(6) and 14(8) that are due and payable in accordance with those Terms respectively) are due immediately on our Communicating a demand. All payments must be paid by you, and must be received in full by us for value, by (a) where the demand is Communicated before 12 noon on any day, not later than 12 midday on the business day following the day on which our demand (including our deemed demand in accordance with Terms 14(6) and 14(8)) is Communicated; or (b) where the demand is Communicated after 12 midday on any day, not later than 4pm on the business day following the day on which our demand (including our deemed demand in accordance with Terms 14(6) and 14(8)) is Communicated. These timeframes are subject to the rules of any Underlying Market that have been advised to you by us in the event that the Underlying Market requires payment of margin to be made sooner."
Term 16 concerns default and default remedies. The material parts of Term 16 provide:
"(1) Each of the following constitutes an 'Event of Default':
(a) your failure to make any payment (including any deposit or margin payment) to us or to an Associated Company of ours in accordance with Term 15;
(b) your failure to perform any obligation due to us;
…
(2) If an Event of Default occurs in relation to your account(s) with us or in relation to any account(s) held by you with any Associated Company of ours, we may at our absolute discretion at any time and without prior notice:
(a) close all or any of your Bets at a Closing Level based on the then prevailing quotations or prices in the relevant Underlying Markets or, if none, at such levels as we consider fair and reasonable;
(e) close any or all of your accounts held with us of whatever nature and refuse to accept further Bets from you.
…
(4) You acknowledge that:
(a) where you have failed to pay a deposit or margin call in respect of one or more Bets five business days after such payment becomes due, we are (except as provided in Term 16(5) below) obliged to close out such Bets; …
(5) Subject to the FSA Rules, in the event of your failing to meet a demand for deposit or margin or your being in excess of any credit limit placed on your account, we may exercise our reasonable discretion to allow you to continue to place Bets with us, or allow your open Bets to remain open, but this will depend on our assessment of your financial circumstances.
(6) You acknowledge that, if we agree to allow you to continue to place Bets or to allow your open Bets to remain open under Term 16(5), this may result in your incurring further losses."
Term 19 provides, so far as is material:
"(1) You represent and warrant to us, and agree that each such representation and warranty is deemed repeated each time you open or close a Bet by reference to the circumstances prevailing at such time, that:
(a) the information provided to us in your application form and at any time thereafter is true and accurate in all respects…"
Term 28 states, so far as is material:
"(1) If any Financial Index becomes subject to possible adjustment as the result of any of the events set out in Term 28(2) below (a 'Corporate Event') affecting a related financial instrument, we will determine the appropriate adjustment, if any, to be made to the size and/or value and/or number of the related Bet(s) (and/or to the level of any Order) to account for the diluting or concentrating effect necessary to preserve the economic equivalent of the rights and obligations of the parties in relation to that Bet immediately prior to that Corporate Event, to be effective from the date determined by us.
(2) The events to which Term 28(1) refers are the declaration by the issuer of a financial instrument (or, if the financial instrument is itself a derivative, the issuer of the security underlying that instrument) of the terms of any of the following:
(a) a sub-division, consolidation or reclassification of shares, a share buy-back or cancellation, or a free distribution of shares to existing shareholders by way of a bonus, capitalization or similar issue; …"
Term 31 ("Interpretation") provides that:
"'Business day' means any day other than a Saturday, Sunday and a UK public holiday.
'Closing Level' means the level at which a Bet is closed."
The Statutory Framework
The Claimant is bound by the FSA Conduct of Business Rules ("COBS"). The relevant rule in force at the material time is Rule 2.1.1 which states:
"A firm must act honestly, fairly and professionally in accordance with the best interests of its client. (The client best interests rule)"
Section 5 of the Financial Services and Markets Act 2000 provides:
"(1) The protection of consumers objective is: securing the appropriate degree of protection for consumers.
(2) In considering what degree of protection may be appropriate, the Authority must have regard to—
(a) the differing degrees of risk involved in different kinds of investment or other transaction;
(b) the differing degrees of experience and expertise that different consumers may have in relation to different kinds of regulated activity;
(c) the needs that consumers may have for advice and accurate information; and
(d) the general principle that consumers should take responsibility for their decisions."
Section 150 of the 2000 Act provides:
"A contravention by an authorised person of a rule is actionable at the suit of a private person who suffers loss as a result of the contravention, subject to the defences and other incidents applying to actions for breach of statutory duty."
The Facts
The Defendant and Mr Philip Waters, who is employed by the Claimant as Credit Operations Manager (UK and Australia), gave evidence. Mr Waters was not employed by the Claimant at the time when the events with which we are concerned occurred.
The relevant facts are not materially in dispute. I therefore proceed to set out my findings of fact.
The Defendant is a property developer. He bought residential properties through a company called Grindale Ltd ("Grindale") which he owned jointly with his wife and of which he was managing director. The properties were then rented out through a business called Broadhurst Estates, of which he was a partner. He said that in 2008 he owned about 400 residential properties.
In July 2001 the Defendant was interested in trying margin trading, he says, "purely as a hobby". He had no previous experience of margin trading, contracts for differences or spread betting. He opened a margin trading account with IG Markets Ltd, a company in the same group of companies as the Claimant. Later that year, in November 2001 he opened a spread betting account with the Claimant.
At the time of opening the account with the Claimant the Defendant provided a letter from his accountants, Langstreth & Hunter, dated 8 November 2000 in which it is stated:
"This is to confirm that we act for the above (Mr A Ehrentreu and group of companies) and the total gross assets of the above exceed £10 million with a net value of around £3.5 million."
On 24 September 2001 Langstreth & Hunter stated in a second letter that
"[The Defendant] today largely buys properties for his own companies.
…
The group of companies has made substantial profit recently (in excess of £160,000) and the net value of his investments is increasing steadily."
The Defendant said that the only information as to his financial position he provided on the Claimant's application form was the value of his property, less mortgage, which he stated to be £250,000.
Following the opening of the account with the Claimant, the Defendant conducted substantial trading over the period from December 2001 to October 2008.
The Defendant stated that his activity on the spread betting account varied considerably between 2001 and 2008. He said in his witness statement made on 19 June 2015 that his usual stake was between £10 and £100 (para 34). He said that was his recollection when he made his witness statement. However the statements of account which are now before the court show that whilst the majority of the Defendant's bets during the period 2001-2008 were in the £50 to £100 range, there were a number of bets significantly above those figures, and in the £1,000-plus range during 2007 and 2008. The Defendant said that now he has seen the record of his dealings (Trial Bundle 3/498-594) he accepts that he was betting large amounts on RBS and some other companies during 2007 and 2008.
The Defendant said he placed bets on RBS from December 2007 as a result of a couple of articles he had read in December 2007 which recommended RBS as an investment. He said that "betting on RBS seemed like a sure thing: the opportunity of a lifetime". The relevant history in relation to the bet on RBS that caused the losses to the Defendant's account that are the subject of the present proceedings began on 11 August 2008.
The statement of the Defendant's account dated 11 August 2008 (2.08am) showed that he had two "up" bets on RBS of £5,225 and £2,193.05 respectively, totalling £7,418.05. They were quarterly bets, opened on 17 June 2008, due to expire on 16 September 2008. On 3 September 2008 Mr Tom Gillard of the Claimant sent an e-mail to the Defendant notifying him that there was a margin of £97,000 required. However for reasons I shall explain (see para 69 below) the first margin that requires consideration is that of 15 September 2008.
On 9 September 2008 the Defendant informed the Claimant that he had decided to roll over his two "up" bets on RBS, for which the last dealing day was 16 September 2008, until the end of the next quarter, 16 December 2008. His existing "up" bets were closed and an equivalent up bet for the same total of £7,418.05 was opened for a closing date of 16 December 2008.
On 15 September 2008 there was a Stock Dividend adjustment for RBS. The terms were 2.500% with an adjustment factor of 1.025. The Claimant therefore adjusted the Defendant's positions in RBS to reflect the Stock Dividend; the amendment also incorporated the price dilution in the share price.
On the same day, 15 September 2008, Mr Nabille Helal of the Claimant sent an e-mail to the Defendant requesting payment of the margin of £197,195, on his account.
On 16 September 2008 Mr Helal called the Defendant at his offices and spoke to his secretary, who advised that he was on another call and would return his telephone call. At 16:24 on that day the Defendant e-mailed Mr Helal, apologised for missing his call and said:
"Please note that I have arrange a transfer to your account on Friday
Please confirm."
Friday was 19 September 2008.
On Monday 22 September, the funds not having been received from the Defendant, Mr Helal telephoned the Defendant and left a message on his mobile phone to return his call.
On Tuesday 23 September Mr Helal called the Defendant's mobile and left a message for him to return his call. He also contacted the Defendant's office and left a message asking for the Defendant to call him back. By e-mail timed at 13:17 on 23 September the Defendant wrote:
"Thanks for your phone call
Please note that I have transfer last Friday 2 transfer of £100,000k each
Please advise, it should come from oversee bank…"
With regard to his e-mail on 23 September explaining that he had arranged for two separate transfers of £100,000 from an overseas account on the previous Friday, this was a reference, the Defendant said, (see Defendant's witness statement, para 77) to an account that he had in Turkey where he had approximately £500,000 of savings.
On Friday 26 September 2008 Mr Helal called the Defendant's office and left a message. He was advised that the Defendant was at a meeting.
On Monday 29 September Mr Helal called the Defendant's mobile, and then his office, and left a message for him to return his call.
On Wednesday 1 October Mr Helal called the Defendant's office and left a message asking for the Defendant to call him back.
On Thursday 2 October Mr Helal called the Defendant at his office and was advised that the Defendant would call him back in 5-10 minutes.
On Friday 3 October Mr Helal called the Defendant at 9.43am and spoke to him. The Defendant said:
"… Did you get the money?"
Mr Helal said "No we didn't. Were you able to check with your bank?"
After a break of a few moments the Defendant said:
"Yeah, according to my confirmation it came from called [Gurney] in Turkey, HSBC … I don't know what the date: 22, 24, 26 was sent at—what date was that, or what day, I don't know, I am just trying to remember, got no calendar?"
The Defendant referred to the account details. He then said:
"…I'll send you now, from my account, £100,000 by transfer [OK] and if you don't get it on Monday I'll send you the rest from here. I just don't understand why it didn't happen."
The Defendant continued:
"Yeah, the problem I've got, that happened to me last time as well is that the fact because it is international I sometimes had to tell them send it to me and I'll send it to you, because it's international [yeah] sometimes its gets locked up in the system [yeah] sometimes it goes in one date, shows up on the system and they'll tell me, what they normally do they send it from HSBC Turkey to London and then London due to the BACS system, they BACS it to you, so what I'll do I'll send an e-mail to my bank manager and I'll copy you so that you see the correspondence and hopefully come back to you within 24 hours, but come back to me and I'll send you £100,000 cash at least and if not I'll send you £100,000 every day next week."
Mr Helal advised that the margin is still about the same, about £600,000.
With regard to this conversation with Mr Helal on 3 October when the Defendant said that he would send £100,000 at least within 24 hours and then a further £100,000 each day during the following week, he said in his evidence that he thought that this was "achievable if difficult".
On Tuesday 7 October, at 11.09am and 2.46pm Mr Helal attempted to make contact with the Defendant. They spoke at 4.11pm when Mr Helal phoned again. Mr Helal asked the Defendant if he had checked his account and was advised he had not. He explained that no funds had been received and the amount due was now over £1.2 million. Mr Helal continued:
"Now I have to ask you that we receive at least half of that by tomorrow. Because the original margin call has been due for about three weeks now, so we have been fairly sort of lenient. I know you've had a holiday in the meantime but I can't allow the exposure to remain without receiving any funds because it is quite a bit… I mean the majority of it is a deficit on the account, it's not just a margin or a deposit funding needed, erm, so it needs to be getting its way to be cleared by Friday, but I would require half of it by tomorrow or you need to send a TT and sort of show that those funds are coming in…"
The Defendant replied:
"OK. Leave it to me, I'll sort it out for tomorrow morning. Come back to me and I'll give you a call lunchtime."
In relation to this conversation on 7 October, the Defendant said that he wanted the Claimant to believe he was sorting it out. He thought he had access to funds.
On Wednesday 8 October the Defendant's secretary called and spoke to Mr Helal and said:
"He [the Defendant] said that he wanted me to ring to let you know he'd done the transfer."
Mr Helal asked whether she knew how much he did it for and she replied "£500,000". She said:
"He did it around lunchtime, it would have been about 1, 2 o'clock."
She said the Defendant said that he had given instructions to the bank to make the transfer. The £500,000 was coming in from Turkey.
On Thursday and Friday, 9 and 10 October, Mr Helal attempted to contact the Defendant but was unable to speak to him.
At paragraph 89 of his witness statement the Defendant said:
"Around this time (i.e. 9-10 October 2008) I had ascertained that if I were to bring money in from abroad, the money would be subject to significant taxation at around 30%. Given the circumstances and what was happening in the economy I could ill afford to lose 30% of my money by transferring it into the UK, particularly when it was now such a huge sum. The whole situation was crazy, a mess and had spiralled completely out of control. Accordingly, I intended to refinance some property within the UK, where I had equity. I considered that I could find the £1.2 million needed and hoped that the RBS shares might recover."
On Monday 13 October Mr Helal attempted to contact the Defendant on his mobile and at his office. At 10.40am he spoke to the Defendant's secretary. Mr Helal said:
"I still haven't heard from him [the Defendant], this is the problem. I can't stress the urgency of this now. I mean when I spoke to you on Thursday wasn't it, sorry Wednesday, you passed on some information that he had sent money, erm… we still haven't received that…"
Mr Helal continued:
"Tell him that I need to speak to him before 4pm today and he should understand the reason for that so…"
At 11.19am on 13 October the Defendant called Mr Helal. He said that the money was abroad and that if he brought it into the UK he would have to be taxed, which he wasn't aware of. The Defendant continued:
"I've gone through my bank, I've got a lot of equity in property in the UK. … What I am doing now, I'm going to re-finance and that will leave me equity of about £1.2 million."
The Defendant added:
"… I'm really sorry, please bear, don't close my position… Please leave, you've got to understand one thing… if you close my position, … because it's in my own name, it's not my company, if I've not got the money I could go bankrupt so I will send you the money, please bear with me a couple of days."
Mr Helal advised the Defendant that the problem was the amount due was fluctuating but at present it was at £1.8 million. He asked if the Defendant had equity of £1.2 million where would the Defendant find the additional sum. Mr Helal asked about the £500,000 that had previously been referred to. The Defendant explained that that money was in a bank account in Turkey and that he was told that if he brought the money into the UK he would have to pay tax. The transcript of the conversation continues:
"[Mr Helal] This is the problem, I mean as you say, I mean of course given the circumstances I've kind of allowed a certain amount of time because I didn't think you weren't going to be paying, I mean I just assumed you had complications in transferring the money.
[The Defendant] Yeah, now I realise, now I realise what the complication. Tell you what, let's discuss again on Friday, right. And if I don't get any, I'll let you have a letter from my bank, the money's coming.
[Mr Helal] The problem I'm going to be having, Sir, is that I'm not going to be able to authorise that, I'm going to have to discuss this with my manager anyway, erm, I mean I've already been told that if we can't establish that funds are on their way, we need to basically get on to closing the positions which I know you said is something you don't want to do. Obviously the culprit of this has been the RBS position hasn't it, continued to fall and now it's kind of going up and down but we have to think of it as an exposure point-of-view, you're not purely maintaining a margin here, you're running a deficit on your account which is a, I mean, if you think of it in theory, it's a hole in IG's balance sheet, it's not like we're just letting you open a position without funding it which would be perhaps another scenario, we may have a different view on that, as it's literally a running loss, you know, and if we did close the position at this point of time you would owe IG £1.26 million so I'm not going to be able to give you an answer this second, so I'll speak to my credit director who obviously has already been kind of liaising with me about this, erm, and I need you to sort of say, if you can tell me perhaps, when we can sort of expect to receive this money, a realistic period of time would be what?
[The Defendant] I'll speak to my bank manager and come back to you. I can show you the letter from my bank manager and the e-mail about the re-finance.
…
[Mr Helal] Ok, well if you could check what you say you need to check and if you could ring me back within the next sort of half an hour to an hour, erm, because I struggle to get through to you, I'm sure you're busy but obviously we need to talk… I'll speak with David who is my credit director and if in the meantime you can find out the implications of what you're saying and then we'll speak shortly, yeah.
[The Defendant] Yeah, I appreciate your patience."
The Defendant thought he could have access to £1.2m in a couple of days. In his evidence he said that he should have said ten days; a couple of days may have been an exaggeration. However he thought he could obtain the monies, but he said he misjudged the banking crisis. He said that at the time of the conversation on 13 October he hoped the share price would recover. He said: "I was desperate for the positions to stay open in the hope that the RBS bets might come good" (Defendant's witness statement, para 93).
In answer to questions from Mr Mayall, the Defendant said that whenever he said that he would send money to the Claimant he meant it. He said that he intended the Claimant to believe it. He said:
"It is what I wanted them to believe – we had a good relationship."
In relation to the conversation on 7 October he said that he thought he had access to funds. I accept this evidence of the Defendant, which was not challenged.
At 12.25pm on 13 October Mr Helal called the Defendant's office and asked for the Defendant or his secretary. He was advised the Defendant was out and the secretary at lunch. He left a message for the Defendant to return his call. The Defendant said: "I do not know why I did not call back but it is possible that I could not face the situation" (Defendant's witness statement, para 98).
On 14 October, there having been no call from the Defendant and no funds received, after 12pm the Defendant's positions were closed and the debt was crystallized.
A summary of the margin calls on the Defendant from 15 September 2008 is as follows:
Statements of account Payment required in Statement of account £ Additional demands £
15 September 2008 83,364.40 197,195
16 September 279,138.35
17 September 458,159.19
18 September 627,982.42
19 September 676,202.72
22 September 241,580.56
23 September 211,173.90
24 September 333,714.11
25 September 304,326.02
26 September 239,442.05
29 September 352,893.41
30 September 602,026.88
01 October 594,948.47
02 October 593,244.71
03 October 633,329.56
06 October 549,845.67
07 October 877,680.67
08 October 1,290,905.26
09 October 1,304,224.54
10 October 1,249,660.88
13 October 1,738,717.77
14 October 1,753,520.45
The Defendant was shown abbreviated accounts for Grindale. As at 31 December 2007 the net assets were stated to be just over £25.3 million. The abbreviated accounts dated 31 December 2009 showed net assets for 2008 at a sum in excess of £35.4 million; the net assets for 2009 were £7.82 million. The Defendant explained that the 2008 figure had been calculated on the historical cost convention basis, and in any event by September/October 2008 liquidity was a real problem. The Defendant said that in 2008 he and his wife had £35m assets in Grindale. However in October 2008 they were not liquid assets. He could not say now what his net asset value was in October 2008. He said that when Grindale went into administration it had debts owed to the bank in the sum of £63m.
The Defendant said that in 2008 the property market entered an extremely difficult time which was enormously stressful for him. It was, he said, exceptionally stressful for him in September/October 2008. The Chief Executive's report in the Claimant's 2009 Annual Report refers to the turmoil in the financial markets in 2008, and notes: "During October we saw extreme volatility, the collapse in share price of many banking stocks and a severe market crash". In addition the Defendant pointed out that this was also a time of year when there were a number of Jewish holidays which he observed: 30 September, 1 October, 9 October and 14 October 2008.
The Issues
At the outset of the hearing Mr Mayall and Mr Gourgey identified the following issues for determination:
(1) (a) Is the Claimant able to argue that the effect of the Settlement Agreement, properly construed in the light of all the facts found at trial, precludes the Defendant from succeeding on the counterclaim?
(b) If so, does the effect of the Settlement Agreement, properly construed in the light of all the facts found at trial, preclude the Defendant from succeeding on the counterclaim?
(2) Is the counterclaim compatible with the Judgment in favour of the Claimant?
(3) Whether the Claimant was obliged to close out the Defendant's positions at any time before 14 October 2008, by reason of terms 16(4) and 16(5) of the Customer Agreement, which are to be construed and applied in accordance with applicable FSA Rules ("the breach of contract claim").
(4) Whether the Claimant was obliged to close out the Defendant's positions at any time before 14 October 2008, by reason of the client's best interests rule (COBS 2.1.1 R) ("the breach of statutory duty claim").
(5) If the answer to issue (3) or issue (4) is "yes", when did the obligation to close out first arise?
(6) If the answer to issue (3) or issue (4) is "yes", did the breach of obligation cause loss to the Defendant or was any such loss caused or mainly caused by the Defendant in opening the losing bets, failing to close them, and failing to take care for his interests?
(7) If any breach of contract is found, was there a failure on the part of the Defendant to mitigate any loss?
(8) If any breach of statutory duty is found was the loss caused and/or contributed to by the negligence of the Defendant?
I shall deal with each issue in turn.
Issue 1: Does the effect of the Settlement Agreement preclude the Defendant from succeeding on the counterclaim?
Having regard to the judgment of the Court of Appeal and the transcript of the hearing before the court, Mr Mayall indicated at the outset of his closing submissions that he would no longer pursue this point. I have no doubt that he was correct to adopt that course.
Issue 2: Is the counterclaim compatible with the Judgment in favour of the Claimant?
The Court of Appeal rejected what appeared to be Mr Mayall's submission that a claim which can operate as a set-off cannot also exist as a free-standing claim. At paragraph 18 of his judgment Lewison LJ referred to Mr Mayall's skeleton argument, repeating the submission he had made to the judge to this effect:
"It is not disputed that, had the Claimant been suing on the Customer Agreement, the Defendant would have been entitled to set off such damages as were awarded on his counterclaim (whether the breach of contract or breach of duty)."
Lewison LJ continued (at para 20):
"After some questioning from the court Mr Mayall again appeared to me to accept that the facts asserted by Mr Ehrentreu in the counterclaim could amount to a valid claim (in the sense that it was not demurrable). If, for example, Mr Ehrentreu had immediately paid what IG Index said he owed he could have brought his claim on the following day. What he appears to me to be saying was that a claim which can operate as a set-off cannot also exist as a free standing claim. I reject that submission. The starting point is the existence of a cross-claim. Whether a cross-claim can operate as a set-off is covered by well known principles. But the important point is that cross-claims that can be deployed by way of set-off are a sub-set of cross-claims. They do not cease to be members of the set of cross-claims merely because they are also part of the sub-set of cross-claims capable of being set-off…"
At paragraph 21 of his judgment Lewison LJ noted that "in the course of oral submissions Mr Mayall began to develop an argument based on the construction of the Customer Agreement to the effect that the facts alleged by Mr Ehrentreu did not amount to a counterclaim at all.
The way the Claimant now puts this argument is set out in paragraph 19 of the Reply and Defence to Amended Counterclaim:
"Further and in the alternative it is averred that the breaches of duty alleged (but denied) do not give rise to a counterclaim. They amount to no more than a denial that the Claimant is entitled to recover the difference between the Opening Level of the Bet and the Closing Level pursuant to Clause 8 of the Agreement."
Further information was given in relation to this pleading pursuant to a request by the Defendant. The material part of that information reads as follows:
"(iii) By the Settlement Agreement the Defendant irrevocably acknowledged and agreed that the Debt (i.e. the difference at the time the bets were actually closed) was properly due and owing to IG in its entirety and therefore acknowledged and agreed that the Claimant was entitled to recover the Debt under Clause 8.
(v) The breaches alleged seek to claim that the Claimant was not properly entitled to close the bets out at the time it did and thus recover the Debt. In particular it is alleged that the bets should have been closed at an earlier time when the difference would have been less.
(vi) In all the circumstances the allegations of breach and any claim for damages arising therefrom are wholly incompatible with the Settlement Agreement and the Judgment of the Court of Appeal."
Mr Mayall submits that the Claimant has always acknowledged that, in the absence of the Settlement Agreement, the claim for breach of contract, if proved, would amount to an equitable set-off to a claim based upon the Customer Agreement. This was the position of the Defendant throughout. In the Court of Appeal Lewison LJ stated, "As I have said where equitable set-off applies all that is legally due is the net balance" (para 40). By the Settlement Agreement, however, the Defendant irrevocably acknowledged and agreed that "the Debt" (i.e. the whole of the sum calculated in accordance with the Customer Agreement) was properly due and owing in its entirety. Mr Mayall submits that the counterclaim amounts to no more than a claim that the whole sum calculated in accordance with the Customer Agreement was not properly due and owing in its entirety. This is incompatible with the judgment of the Court of Appeal.
Mr Mayall submits that what the court has to do is to look at the reality of what is being put forward on the Defendant's behalf. If the reality is that the claim amounts to a defence under the Customer Agreement or an equitable set-off that is incompatible with the terms of the Settlement Agreement. In effect if what the Defendant is saying is that the money was not properly due and owing that is incompatible with the terms of the Settlement Agreement. The counterclaim is based on a breach of contractual duty and breach of statutory duty; as such it is a defence, submits Mr Mayall. What is pleaded is the denial of liability.
I do not accept this submission. Mr Mayall's argument appears to be based on Term 8(9) of the Customer Agreement (see para 10 above). This allows the Claimant to recover from customers the difference between the Opening Level of the Bet and its Closing Level. The Claimant contends that because the Defendant is arguing his bets should have been closed at an earlier time than they in fact were, he is seeking to claim that the Claimant was not entitled to close out the bets when it actually did, and thus recover money on the basis of which the bets were in fact closed. However the definition of "Closing Level" is not the level at which a Bet should be closed; "Closing Level" is defined in the Customer Agreement as "the level at which a Bet is closed" (see para 16 above). I accept Mr Gourgey's submission that the Defendant's argument is not a denial of liability under the Customer Agreement, since such liability is triggered by the actual closing of the bets, not a situation when they should have been closed.
Issue 3: The Breach of Contract Claim
It is not in dispute that the Defendant failed to pay margin calls within five business days on numerous occasions during September and October 2008. It follows that the Claimant is prima facie in breach of Term 16(4) of the Customer Agreement. However that term is subject to the proviso in Term 16(5) (see para 13 above).
It is common ground that in order for the Claimant to rely on the proviso in Term 16(5) it must establish on a balance of probabilities that it performed conscious exercises of discretion to keep the Defendant's bets open. Any such exercises of discretion had to be reasonable and made on the basis of the Claimant's assessment of the Defendant's financial circumstances.
The Defendant's primary position was that the margin call made on 3 September 2008 was not met by payment (which is admitted), nor was there any evidence it was deemed met by an exercise of discretion under Term 14(9). However during the course of the hearing Mr Gourgey indicated that he would not pursue that submission. In relation to the margin call made on 3 September, before five full business days would elapse, on 8 September, as a result of movements in his favour, the Defendant came off margin. Further, on 9 September the Defendant himself closed out the losing bets, and opened a further bet on RBS which was due to expire on 16 December 2008 (see para 31 above).
However there was, he submitted, no evidence that there was an exercise of discretion to keep the Defendant's bet open, as required by Term 16(5), within five business days of the margin call of 15 September 2008, or in respect of any other period of five business days starting with the margin calls made almost daily from 16 September 2008.
There is an issue between the parties as to the calculation of five business days (see para 101-106 below). However whether the demand for £197,195 made on 15 September was required to be paid by 23 September, as the Defendant contends, or 24 September on the Claimant's calculation, matters not for present purposes.
The Claimant sent the Defendant statements of account on a daily basis. Mr Mayall accepts, on his calculation, that payment of £279,138.35 required in the statement of account of 16 September was due by 25 September; £458,159.19 required in the statement of account of 17 September by 26 September; £627,982.42 in the statement of account of 18 September by 29 September; £676,202.72 in the statement of account of 19 September by 30 September; £241,580.56 in the statement of account of 22 September by 1 October; £211,173.90 in the statement of account of 23 September by 2 October; £333,714.11 in the statement of account of 24 September by 3 October and £304,326.02 in the statement of account of 25 September by 6 October.
Mr Mayall accepts that there is no express evidence that the Claimant did exercise its discretion pursuant to Term 16(5) in respect of the margin calls before 7 October 2008, but he invites the court to infer from the evidence that it did in fact do so. He submits that it is implicit in the Claimant's request for payment, that if payment is not made it will have to close the Defendant out of the market.
Such an inference, he submits, can properly be drawn in respect of each margin call in issue from all the evidence, in particular (1) the Claimant's knowledge of the Defendant's financial circumstances, (2) the fact that he had always made payments in the past when requested to do so, and (3) his repeated assurances between 16 September and 3 October 2008 that he had transferred or had arranged to transfer £200,000 to the Claimant's account (see paras 34-42 above).
Mr Gourgey cautions me against drawing any such inference in circumstances where no witnesses have been called on the Claimant's behalf to give evidence that the discretion was exercised. Mr Gourgey observes that the only witness to be called, Mr Waters, was not employed by the Claimant at the material time. Mr Helal is still employed by the Claimant and could have been called to give evidence, but he did not. Mr Waters said that he did not speak to Mr Helal.
Mr Gourgey submits that the evidence that has been adduced on the Claimant's behalf, namely the transcripts of telephone conversations between Mr Helal and the Defendant and the e-mail correspondence, for the whole period from 15 September to 13 October 2008, is equally consistent with the Claimant merely pressing for payment of monies that were due and following up when payments were not made into its account when the Defendant said that transfers had been made.
As at the end of 23 September there was a margin call of £333,000-odd, substantially in excess of the £200,000 that the Defendant had promised. The Claimant observes that the Defendant had had a recent history of daily defaults, as high as £676,000 on 19 September. By the time of closure of business on 6 October there was no promise to pay in excess of £600,000, with a margin call of £877,680, against a history of continued default. There is, Mr Gourgey submits, no evidence that the Claimant considered whether to exercise its discretion under Term 16(5) to keep the bets open, having regard to the Defendant's financial circumstances.
I note that during the telephone conversation at 11.19am on 13 October (see paras 50 above) Mr Helal referred to the need to speak to his manager/credit director and that he had "already been told that if we can't establish that funds are on their way we need to basically get on to closing the positions". Whether any exercise of discretion under Term 16(5) could be taken by Mr Helal, or at least would require the involvement of his credit director is unclear. However the fact is there is no evidence from Mr Helal or any other person who was concerned on the Claimant's behalf with the Defendant's account at the material time that there was any exercise of discretion to keep his bets open, having regard to his financial circumstances.
The knowledge of the Defendant's financial circumstances was limited. The only evidence relied upon by the Claimant is contained in the two letters from the Defendant's accountants of 8 November 2000 and 24 September 2001 (see paras 24 and 25 above), which by September 2008 were at least 7 years out of date; and the information the Defendant provided in his application form (see para 26 above).
Further, despite the size of the margin calls that fell to be met by 6 October, the communications between the Claimant and the Defendant before the conversation on 3 October had only concerned the transfer of a sum of £200,000 to the Claimant's account to cover the margin of £197,195 requested on 15 September.
I consider that in all probability any concerns that the Claimant had in relation to the non-payment of the margins on the due dates was allayed by the knowledge that the Defendant had made payments in the past when requested to do so and his repeated assurances between 16 September and 3 October 2008 that he had transferred £200,000 from his accounts, and from 7 October 2008 by his assurances that he would be able in time to make the payments required (see paras 44-50 above).
I am not satisfied on the evidence that the Claimant at any time exercised its discretion under Term 16(5) of the Customer Agreement as it was required to do, and most certainly during the material period not before 7 October 2008.
Accordingly I find that the Claimant was obliged to close out the Defendant's positions by reason of Terms 16(4) and 16(5) of the Customer Agreement, and that it failed to do so.
Issue 4: The Breach of Statutory Duty Claim
It is the Defendant's case that by leaving the Defendant's positions open (and thereby allowing his net overall position to deteriorate) the Claimant did not act in his best interests and therefore acted in breach of its obligation under COBS 2.1.1R, for which the Claimant is liable in damages. (See paragraph 19.3 of the Amended Defence and Counterclaim).
COBS 2.1.1R came into force on 1 November 2007. Before this date COB Rule 7.10.5 was in operation and imposed a requirement on firms such as the Claimant in the following terms:
"A firm must close out a private customer's open position if that customer fails to meet a margin call made for that position for five business days following the date on which the obligation to meet the call accrues, unless:
(1)(a) the firm has received confirmation from a relevant third party that the private customer has given instructions to pay in full; and
(b) the firm has taken reasonable care to establish that the delay in its receipt is owing to circumstances beyond the private customer's control; or
(2) the firm makes a loan or grants credit to the private customer to enable that customer to pay the full amount of the margin call in accordance with the requirements of COB 7.9.3R (Restrictions on lending to private customers)."
The purpose of COB 7.10 (Margin requirements) is explained by COB 7.10.2. The guidance refers to Principle 3, which requires a firm to have adequate risk management systems, and also to Principle 6 which requires a firm to pay due regard to the interests of its customers and treat them fairly. It is stated that COB 7.10 aims to ensure that a firm does not expose itself to unacceptable levels of credit risk, while managing its margin requirements. It also aims to ensure that a firm manages a private customer's exposure to contingent liabilities by diligently monitoring the firm's relevant provision of credit.
Mr Gourgey submits that in deciding how to respond to the failure to meet margin calls in September 2008 the Claimant had to act in the best interests of the Defendant, and was under obligations to implement, maintain and follow credit risk policies. Rules 7.1.9 to 7.1.12 refer expressly to credit and counterparty risks in respect of BIPRU firms; the Claimant failed to do so and thereby breached COBS 2.1.1.
I do not accept that in construing COBS 2.1.1R regard may be had to the position prior to 7 November 2007 when COB Rule 7.10.5 was the operative rule. The evidence, in my view, supports Mr Mayall's submission that the FSA took a deliberate decision to remove the margin requirement regulation when introducing COBS 2.1.
In October 2006 the FSA produced a consultation paper (06/19) titled "Reforming Conduct of Business Regulation (including proposals for implementing relevant provisions of the Markets in Financial Instruments Directive, and related changes to SYSC, DISP, TC, SUP and other Handbook modules)" ("the paper"). The paper noted that the provisions in the current COB set out requirements for firms relating, inter alia, to margin requirements (16.1.22). Paragraph 16.1.26 states that with regard to margin requirements
"MiFID requires firms to disclose a general description of the nature and risks, including those related to margin requirements, of financial instruments to adequately address the potential for consumer detriment. Under MiFID firms are required to make disclosure of such risks in good time before an agreement is entered into."
The proposal in the paper is to delete current COB provisions, including margin requirements, and copy-out the relevant MiFID articles "since they provide for an adequate level of consumer protection" (para 16.1.27). Under the heading "Implications for firms and consumers" the paper continued:
"16.1.28 COB requirements in respect of realisation of a private customer's assets are more prescriptive than MiFID. They are more specific about the information that is to be disclosed and the timing and manner of provision. However we consider that the high level requirements in MiFID provide a similar level of consumer protection. Our proposal to rely on these high-level requirements is also consistent with our policies of reviewing COB and a move towards principles-based regulation.
…
16.1.32 Firms will no longer have a regulatory requirement to obtain from a private customer any margin payable, nor to close out a position to which that margin relates where there is a failure on the part of the private customer to pay. These requirements were designed to prevent firms from allowing a position of a private customer from running up potentially unlimited losses at the customer's risk.
16.1.33 It is not anticipated that this deletion will have any material impact on consumer protection because the requirements relate to execution-only and non-advised transactions. We understand the consumers in these markets to be relatively sophisticated. While it is conceivable that this provision would prevent losses to customers in certain situations, firms do not have commercial incentives to create or encourage such losses on the part of their customers. On the contrary, we understand market practice to be to close margin accounts in deficit in a shorter period than five days, usually one day. We further consider our proposals, in respect of the risk control function in SYSC also provide for adequate credit risk management on the part of the firm and therefore prevent a negative impact on market confidence."
Under the heading "Cost-benefit analysis" there is the following:
"16.1.34 We believe that the costs and benefits arising from the proposals for realisation of a private customer's assets and lending to private customers described in this chapter will be of minimal significance. Therefore no cost-benefit analysis is required.
16.1.35 Although the proposals for margin requirements are deregulatory in nature and therefore do not give rise to increased costs to firms, we believe there will be fall in consumer protection. However we consider this will be of minimal significance because of the sophistication of the clients and current practices of firms and exchanges. Therefore no further cost-benefit analysis is required."
In May 2007 the FSA produced Policy Statement 07/6 "Reforming Conduct of Business Regulations", which included feedback on the consultation paper. At paragraph 14.5.2 it was noted that question 52 in the paper asked: "Are there any aspects of COB 7.10 that in your view should be retained in NEW COB? Would any of these provisions be more appropriately expressed in industry guidance?"
Paragraph 14.5.3 of the Statement records:
"Respondents generally agreed with our proposal to delete these provisions on the grounds that they are provided for by our implementation of the high-level MiFID requirements, as well as it not being in the commercial interests of firms to allow their customers to accumulate unlimited losses. However, some respondents indicated that industry guidance was not appropriate in this area, and that any necessary guidance should be provided by the FSA.
Our response: we propose to delete COB 7.10 on the basis set out in CPO6/19. We do not intend to provide guidance in this area."
The high level MiFID requirements referred to at paragraph 16.1.26 and 16.1.27 of the paper did not include the margin requirement or the requirement under COBS 2.1.1 to act honestly.
I accept Mr Mayall's submission that no assistance can be obtained from the old COB Rule 7.10 when interpreting the new rule. That just leaves the duty as it stands in COBS 2.1.1. All the Defendant is left with is the best interests requirement not informed by a requirement to close down. Mr Mayall observes that the Defendant thought it in his best interests to stay in the market when he could close his bets out (as he could do at any time under Term 8(1) of the Customer Agreement). The Defendant would know that if he did not close his RBS bets down they would continue until the quarter date.
Mr Gourgey submits in circumstances where the Claimant did not have adequate material on which to make an assessment of the Defendant's financial circumstances or in circumstances where promises of payment fell substantially short of margins required during the period from 24 September, any exercise of discretion by the Claimant under Term 16(5) was not in compliance with its obligation under COBS 2.1.1.
Mr Gourgey suggested, in reply, that when it came to the stage of the Defendant's liability under margin calls being significantly higher than the sums he indicated he could pay, that was the point at which the bets should have been closed. That time might have been, he suggested, on 30 September when £602,000 was required on the account and he had only promised to pay £200,000. On the other hand the Defendant had paid £1.1m over a one month period earlier in the year, and made a net payment of £1.3m in the first three months of 2008.
When considering the purpose behind the statutory duty, Mr Mayall submits it is necessary to consider section 5 of the 2000 Act (see para 18 above) as a whole. The Claimant's services to the Defendant were execution only and non-advised (see Term 2(4) and (5) of the Customer Agreement). In November 2007 the FSA made a deliberate decision to de-regulate the margin requirement (see paras 88-93 above). They acknowledged that it may lead to a fall in consumer protection, but nevertheless that was the proposal which was implemented.
The Claimant contends that it was for a sophisticated investor to decide what was in their best interests. The Defendant did not inform the Claimant that his financial circumstances had changed. The Defendant had paid monies due to the Claimant on many occasions (see para 96 above).
In my judgment the Claimant was not in breach of its duty to act in the Defendant's best interests by not closing out his bets in the period from 15 September to 14 October 2008. In reaching this conclusion I have regard to (1) the fact that it is clear from the evidence that after 7 years the Defendant was a sophisticated and experienced trader, (2) he had made payments in the past when requested to do so: (3) he promised to make the payments requested during this period and in making those promises he intended the Claimant to accept them; and (4) the general principle behind the rules is that consumers should take responsibility for their decisions.
I conclude that the Defendant's cause of action for breach of statutory duty is not made out.
Issue 5: When did the contractual obligation to close out first arise?
Mr Gourgey refers to the passages in Chitty on computation of time, and in particular to paragraph 21-025 (Period from a Date or Event):
"Where the time is to be computed from a certain date, or an act to be done on the happening of an event, the mode of calculating the time must depend on the circumstances of the particular contract. The general rule is now well established that where a particular time is given from a certain date, within which an act is to be done, the day of the date is to be excluded, but 'there is no absolute rule with regard to the inclusion or exclusion of the day on which a particular event takes place', and the court has to decide the meaning of the particular contract. The mode of calculation must therefore depend on the wording of the contract, and where the act done is one to which the party against whom time runs is privy the computation may be inclusive as he has had the benefit of some portion of the day included, but where this is not so and the event is foreign to the party against whom time runs, the general rule will be adopted. …"
The Defendant's pleaded case is that, in respect of the margin call for the sum of £197,195 made on 15 September 2008, under Term 16.4(a) the Claimant ought to have closed the bets by 22 September 2008 (see Amended Defence and Counterclaim, para 14A.2). Mr Gourgey, in his oral submissions, was prepared to accept closure by the following day, 23 September.
Mr Mayall submits that the payment demanded by the margin call (as opposed to the sums becoming automatically due) became payable by 4pm on the following business day (Term 15(1)). He submits in relation to the margin call sent out on 15 September that there was an obligation to pay on the following day, the 16th, but an obligation to close down (subject to Term 16(5)) five days hence on 24 September.
It is common ground that the exercise under Term 16(5) needs to be carried out in relation to each margin call that remains unsatisfied after each five day period. Since there were daily margin calls from 15 September which remained unsatisfied, that exercise needed potentially to be carried out on a daily basis from 23/24 September. The provision in relation to margins, Mr Gourgey submits, is paragraph 14(8). In this case the computation of time is one to which the Claimant is privy (see Chitty at para 101 above). On that basis, given the wording of the customer agreement which by para 15(1) requires sums immediately due to be paid by a particular time the following day, the court should calculate the five day period to include the day from which payment becomes due and not to exclude that day. Even if he is wrong about that Mr Gourgey submits the five business days should begin on the day the sum becomes due (i.e. immediately, not on the day payment is to be made, the following day). If Mr Gourgey is correct on both points then the margin call on 15 September would expire on 22 September, but he does not resile from his original submission that 23 September is the material date for present purposes.
Mr Mayall points out that the Agreement distinguishes between monies due and a call. Term 16(4) is dealing with a deposit or margin call. Term 15(1) refers to a demand. What is relied on by the Defendant is an obligation that arises five days after a margin call is made. If at the end of those five days the market has moved in the customer's favour with the result that the customer is no longer marginable the Claimant may, pursuant to paragraph 14(9) deem that the margin payment is no longer due or the margin call to have been satisfied.
I accept Mr Mayall's submissions. In my view the contractual obligation to close out first arose on 24 September, being five business days after 16 September 2008.
Issue 6: Was the Claimant's breach of contract the cause of the loss to the Defendant?
The principles of law are not in dispute. The Defendant may recover damages for a loss only where the breach of contract was the "effective" or "dominant" cause of that loss (see Chitty on Contracts, Vol.1, at para 26-032). In Galoo Ltd v Bright Grahame Murray [1994] 1 WLR 1360, Glidewell LJ stated at 1374G:
"The passages which I have cited from the speeches in Monarch Steamship Co. Ltd v Karlshamns Oljefabriker A/B [1949] AC 196 make it clear that if a breach of contract by a defendant is to be held to entitle the plaintiff to claim damages, it must first be held to have been an 'effective' or 'dominant' cause of his loss. The test in Quinn v Burch Bros. (Builders) Ltd [1966] 2 QB 370 that it is necessary to distinguish between a breach of contract which causes a loss to the plaintiff and one which merely gives the opportunity for him to sustain the loss, is helpful but still leaves the question to be answered 'How does the court decide whether the breach of duty was the cause of the loss or merely the occasion for the loss?'
The answer in my judgment is supplied by the Australian decisions to which I have referred, which I hold to represent the law of England as well as of Australia, in relation to a breach of duty imposed on a defendant whether by contract or in tort in a situation analogous to the breach of contract. The answer in the end is 'By the application of the court's common sense'."
Mr Mayall refers to the observations of HHJ Mackie QC in IG Index plc v Leung-Cheun [2011] EWHC 2212 (QB) at paragraphs 43-46, where he considered both issues of causation and the duty to mitigate. The judge recorded the submissions of Mr Mayall for the Claimant (at para 43) and Mr Mallin for the Defendant (at paras 44 and 45), and concluded at paragraph 46:
"If a breach of contract is assumed and the acts complained of were taken in isolation then it seems to me that Mr Mallin's view of causation might be preferred. If one assumes the breach (and also the absence of 'such bets' issue) then a loss caused because bets were closed out some days later than they should have been would have been caused by the breach. However this involves making assumptions about the facts in circumstances where Mr Leung-Cheun was actively trading each day and would have been forcefully opposed to his positions being closed out five days after the 'margin calls'. I find it difficult to see how he could have successfully recovered damages for a failure to close out which he would have strongly opposed and which he could have remedied by closing out himself."
Mr Gourgey referred to the observations of Lewison LJ in the Court of Appeal judgment at paragraphs 28-30, commenting on an argument that the Defendant had caused the relevant loss by not having closed out his bets: "whether this is a single question of causation or a question of the scope of IG Index's duty is not, to my mind, an easy question. It is a question of construction of the rule, in its regulatory context, whether breach of the rule renders IG Index liable for all such losses" (para 29).
In Environment Agency v Empress Car Co. (Abbertillery) Ltd [1999] 2 AC 22 at 31, Lord Hoffmann said: "One cannot give a common sense answer to a question of causation for the purpose of attributing responsibility under some rule without knowing the purpose and scope of the rule". The Defendant contends that the obligation to close out a debt is to protect the customer. The whole point of the closure of bets rule is, Mr Gourgey submits, to crystallize the Defendant's liability and therefore avoid the liability continuing on an open bet.
Mr Gourgey submits that the purpose and scope of COBS 2.1.1 when engaged by the need to exercise discretion under a clause such as Term 16(5) is to ensure that the client's exposure to contingent liabilities from his or her open spread bets is monitored and managed in his best interests and, as is apparent from Term 16(5), having regard to his financial circumstances. There would seem little point, he submits, in the imposition of this rule on regulated firms (such as the Claimant) if they were easily able to avoid liability for its breach by relying on a customer's failure to close his bets (see Cooper v Carillion plc [2003] EWCA Civ 1811, per Keene LJ at [13]): that was a tortious claim but the same principle, Mr Gourgey submits, applies to a contractual claim.
Mr Gourgey submits that in the present case there was a direct causal link between the failure to close the bet and the loss arising at a later date. The passage on which Mr Mayall relies in Leung-Cheun is, Mr Gourgey observes, obiter.
The problem, it seems to me, with this submission is that for the reasons I have given (see paras 88-93 above) COBS 2.1.1 cannot be interpreted by reference to COB Rule 7.10.5. Accordingly the purpose of COB 7.10 (Margin requirements) is not material.
In the alternative Mr Gourgey submits, following Galoo, regard must be had to the obligation which has been breached. Paragraph 16(4) creates an obligation to close down bets, for the benefit of the Defendant, otherwise there is no need to have the obligation. Mr Gourgey suggests that if the Claimant's contention that even though the Claimant has acted in breach of paragraph 16(4) it is not that breach which caused the Defendant's loss because it was always open to the Defendant to close down his bet, that would emasculate the very obligation the Claimant has accepted under the Agreement.
However statements of his position were produced shortly after midnight on the day in question and they were sent to the Defendant on a daily basis. The statements amount to a margin call. It follows, Mr Mayall submits, that on each day the Defendant made a conscious decision not to close down his bets. At the very least he decided to continue with his trading. This is a classic case, submits Mr Mayall, of breach of contract being the opportunity for, not the cause of, the loss that subsequently resulted.
The Defendant had 7 years' experience of spread betting. He traded on a regular basis. He plainly understood that during 2008, and in particular in September 2008 the market was in a volatile phase and the risks were even greater than usual. However he considered betting on RBS to be "like a sure thing: the opportunity of a lifetime" (see para 29 above). To cover the margin calls he intended to make transfers from his various bank accounts, and subsequently to refinance his assets in property, no doubt, as he said, in the hope that the market would turn in his favour (see para 51 above). In my view it is highly likely that he would have been opposed to his positions being closed out five days after the margin calls between 15 September and 14 October. He was informed of his daily position during that period, but took no steps to close the bets himself despite the improvement in his position between 22 and 29 September and the opportunities to do so. After 19 September the markets were rising in the Defendant's favour (until 30 September). On 13 October (by which time he was heavily in debt) he voiced his opposition when closure of his positions was raised with him. The Defendant said that he could not anticipate that the financial crash would be as serious as it was. However the Defendant accepted that at the time he could have closed his positions if he had wanted to, but he kept them open. It was his decision because he thought share prices would go up.
I recognise that it was a stressful time for the Defendant during 2008 due to the collapse in the property market and in particular by September 2008 when the market in shares was very volatile, exceptionally so in relation to banking shares following the collapse of Lehman Brothers on 15 September 2008, but I am satisfied that he himself decided to remain in the market rather than closing his bids and cutting his losses.
In my judgment the decision by the Defendant to continue with his bets was the cause of his loss. I am not satisfied that the Claimant's breach of contract was the effective or dominant cause of the loss he sustained.
Issue 7: Was there a failure on the part of the Defendant to mitigate any loss?
Chitty on Contracts (31st Edition, Vol.1) states the principles of mitigation at paragraph 26-077:
"There are three rules often referred to under the comprehensive heading of 'mitigation': they will be considered in turn. First, the claimant cannot recover damages for any part of his loss consequent upon the defendant's breach of contract that the claimant could have avoided by taking reasonable steps…"
At paragraph 26-079 Chitty observes that the first rule:
"… imposes on a plaintiff the duty of taking all reasonable steps to mitigate the loss consequent on the breach, and debars him from claiming any part of the damage which is due to his neglect to take such steps."
The commentary continues:
"It is not strictly a 'duty' to mitigate, but rather a restriction on the damages recoverable, which will be calculated as if the claimant had acted reasonably to minimise his loss. Only the claimant's net gain from his mitigating effort will be deducted – he may set off against his substitute profits or earnings the reasonable expenses incurred in obtaining them. The onus of proof is on the defendant, who must show that the claimant ought, as a reasonable man, to have taken certain steps to mitigate his loss and that the claimant could thereby have avoided some part of his loss."
Mr Mayall took Issue 6 (causation) and Issue 7 (mitigation) together. He submits that an alternative route to the conclusion that the dominant or effective cause of any further losses by the fact that the bets were not closed was the decision of the Defendant to keep the bets open is that the Defendant has wholly failed to mitigate his loss. As the basis of the Defendant's claim is that he was caused loss by the failure to close out the bets, it is difficult, Mr Mayall submits, to see how it could not be a reasonable step for him to have closed out the bets himself when he had every opportunity to do so. There is, Mr Mayall submits, no real distinction on the facts between Leung-Cheun and the present case. In both cases the Defendants did not want their bets to be closed out. It was the Defendant's positive decision, says Mr Mayall, to keep his bets open that caused his loss. He could have closed them at any time if he had wished to do so.
In response Mr Gourgey submits that it was not unreasonable for the Defendant to take the view that the RBS price might go up. He had no information that it would continue to go down. It was a volatile market. If a reasonable person as at 28/29 September could properly have taken the view that the price of shares might go up, Mr Gourgey asks why is it unreasonable for the Defendant to keep his bets open.
I reject this submission. The Defendant could, in my view, have avoided any loss by taking reasonable steps. He could have acted in his best interests, if he viewed it as such, and closed himself down.
I consider that the Defendant wholly failed to mitigate his loss for the same reasons that led me to the conclusion I reached on causation (see paras 116-118 above).
Issue 8: If there was any breach of statutory duty was the loss caused and/or contributed to by the negligence of the Defendant?
In the light of my finding that there was no breach of statutory duty (see para 100 above), this issue does not arise for determination.
If I am wrong to find there was no breach of statutory duty or, contrary to my view, this is a category 3 case where the breach of contract is co-extensive with the breach of the tortuous duty (see Chitty on Contracts, 31st Ed., Vol.1 at para 26-075) contributory negligence can be relied upon by the Claimant to reduce the Defendant's damages.
In that event Mr Mayall submits that the Defendant was, by September/October 2008 a very experienced spread-better; he did not have the liquid funds (although he said he did) to meet the margins; and in those circumstances, any reasonable person would have concluded by the time he reached the margin of about £600,000 that he should close his bets.
Mr Gourgey sought to distinguish the facts in Spreadex Ltd v Sekhon from the present case. The purpose of COB 7.10.5R, in issue in that case "was not to prevent Dr Sekhon from engaging in spread betting; it was to prevent him from being given credit in inappropriate circumstances" (para 182). Morgan J was of the view that Spreadex must bear some responsibility for the losses because one part of the purposes of COB 7.10.5R was to require Spreadex to protect Dr Sekhon from himself, at any rate in relation to the giving of credit to Dr Sekhon (para 180). As to relative blameworthiness and responsibilities for the losses in that case, the judge regarded Dr Sekhon as "the principal source of his own misfortunes… He wanted to keep his positions open and it was he who persuaded Spreadex to permit him to do so" (para 177). That is not so, Mr Gourgey submits, in the present case.
I do not accept that the cases can be distinguished as Mr Gourgey suggests. In the present case before 7 October 2008 there was an absence of persuasion on the Defendant's behalf, but the evidence suggests he plainly wished at all material times to keep his bets open and he did not close them down, as he could have done.
The new Rule, COBS 2.1.1, is plainly not to be interpreted by reference to the old rule, COB 7.10 (see para 94 above). However if contrary to my view there is a breach of COBS 2.1.1 (construed without regard to COB 7.10) or this is a category 3 case, I would have concluded that the Defendant was responsible for his loss to the extent of 95%. That would, in my view, give proper regard to the purpose of COBS 2.1.1 to protect the best interests of the customer, whilst at the same time having regard to the terms of s.5(2) of the 2000 Act, in particular the general principle that consumers should take responsibility for their decisions (sub-paragraph (d)), and the deliberate decision by the FSA to remove the margin requirement (see paras 89-93 above).
Conclusion
In summary I have reached the following conclusions on the issues for determination:
i) Issue 1 – not pursued by the Claimant (see para 59 above);
ii) Issue 2 – the counterclaim is compatible with the judgment in favour of the Claimant (see para 66 above)
iii) Issue 3 – the Claimant was obliged to close out the Defendant's positions before 14 October 2008 by reason of Terms 16(4) and 16(5) of the Customer Agreement and failed to do so (see para 83 above);
iv) Issue 4 – the Defendant's cause of action for breach of statutory duty is not made out (see para 100 above);
v) Issue 5 – the contractual obligation to close out first arose on 24 September, being five business days after 16 September 2008 (see para 106 above);
vi) Issue 6 – the decision by the Defendant to continue with his bets was the cause of his loss. I am not satisfied that the Claimant's breach of contract was the effective or dominant cause of the loss he sustained (see para 118 above);
vii) Issue 7 – the Defendant wholly failed to mitigate his loss (see para 124 above);
viii) Issue 8 – in the light of my finding that there was no breach of statutory duty this issue does not arise for determination (see para 125 above). However, if contrary to my view there is a breach of COBS 2.1.1 (construed without regard to COB 7.10) or this is a category 3 case, I would have concluded that the Defendant was responsible for his loss to the extent of 95% (see para 130 above).
For the reasons I have given this counterclaim fails.
|
Mr Justice Stewart:
Preliminary
These are the reasons for my rulings in respect of the Defendant's application notices dated 18 June 2015 and 6 August 2015. The Defendant asks the Court to exclude:
(i) Witness statements by historians.
(ii) Witness statements by Claimants on the Group Register described as "corroborative" witness statements.
(iii) Hearsay statements which fall into two categories, namely:
(a) 25 extracts from an historian's book.
(b) Statements by deceased Claimants on the Group Register, these statements also being described as "corroborative".
Further, the Defendant seeks permission to cross-examine the makers of hearsay statements who are or may be alive today.
The witness evidence before me is as follows:
(i) Witness statements of Samantha Howard on behalf of the Defendant. These statements are dated 6 August 2015 and 16 October 2015.
(ii) A witness statement of Mr Frederick Cosgrove-Gibson dated 18 September 2015 on behalf of the Claimants.
The Historians
The Historians' statements which the Defendant seeks to exclude from evidence are from:
(i) Professor Caroline Elkins, dated 20 February 2011, 1 April 2011 and 25 May 2012.
(ii) Professor David Anderson, dated 23 December 2010, 1 April 2011 and 18 June 2011.
(iii) Dr Huw Bennett, dated 21 February 2011, 25 May 2012 and 11 July 2012 (plus an unsigned and undated statement).
The Historians' statements were prepared for the Mutua litigation. This was the previous claim brought by five Claimants against the FCO based on allegations of very serious physical mistreatment in Kenya between 1954 and 1959. The Mutua case resulted in two reported judgments of McCombe J (as he then was). These are to be found at [2011] EWHC 1913 (QB) and [2012] EWHC 2678 (QB). There had also been previous unreported judgments of Tugendhat J (18 October 2010) and Langstaff J (13 December 2010).
The first rule to consider is CPR 32.12. So far as material it provides:
"(1) Except as provided by this rule, a witness statement may be used only for the purpose of the proceedings in which it is served.
(2) Paragraph (1) does not apply if and to the extent that–
…….
(c) the witness statement has been put in evidence at a hearing held in public."
The statements were provided for the Mutua litigation. Therefore, so far as CPR 32.12 is concerned the only issue is whether they were "Put in evidence at a hearing held in public." This is disputed.
In summary the Defendant says that at the strike out hearing in 2011 the status and admissibility of the Historians' statements in the Mutua case had not been determined: see paragraph 36 of the 2011 decision. In particular McCombe J said:
"I am anxious at this stage to avoid any formal determination of the proper role for expert historians at any trial of this action. That issue has not been argued before me and seems to me to be a matter for later."
By the date of the 2012 limitation hearing in Mutua further statements from historians had been served and there had been no application that their evidence be admitted as experts. At paragraph 49 McCombe J said:
"As I observed in paragraph 36 of the previous judgment, it would be for the Court at the trial of the action to draw its own conclusion from the documents and other evidence presented. Equally, whilst the precise status of the Historians' statements as evidence in the case as a whole and at trial has yet to be decided, it was agreed between the parties at a directions hearing before me on 29 May 2012 that those statements should be treated for present purposes as "akin to published academic articles by learned authors": see paragraph 6 of the order made that day."
I accept from this and from the explanation given by Mr Mansfield QC as to the background to the hearings before McCombe J (not disputed by the Claimants), that the statements were not accepted by the Court in Mutua as admissible evidence of fact at final trial. However I do not accept the Defendant's submission that CPR 32.12(2)(c) has not been complied with. They were witness statements and they were put in evidence at the 2012 hearing which was held in public. That is all the rule requires. It does not require that the statements have the status of witness evidence for the purposes of any final trial. All that Rule 32.12(2) does is remove the prohibition on using statements made in previous proceedings. It does not make the statements admissible if they otherwise would not be.
A second objection was taken by the Defendant on the basis of CPR 32.8 which required "A witness statement must comply with the requirements set out in Practice Direction 32." Paragraph 17 of 32 PD is relied upon, namely that the witness statements should be headed with the title of the proceedings. It is said that this is not mere form since the makers have not adopted them and signed statements of truth in these proceedings. I do not uphold this objection. In my judgment this is a matter of form. The statements are being put in expressly under CPR32.12(1) and (2)(c), namely as witness statements put in evidence at a hearing in other proceedings. That is why the makers have not adopted them and signed statements of truth in these proceedings. As to the witness statements being headed with the title of the present proceedings, this is a matter of form and can (if the evidence is to be admitted) be dealt with by requirement on the Claimants' solicitors to do so within a very short period of time.
Next there is CPR 32.4 which provides: "(1) A witness statement is a written statement signed by a person which contains the evidence which that person would be allowed to give orally."
I am told that there were 10 witness statements from 3 historians together with a large volume of exhibits (12 lever arch files). I have not seen the statements because the Defendant objected to my reading them. It was said that it would be as damaging if I read them as if the Court read the books which the authors have written. This was an unusual position for a Court to be in. Normally either (a) the issues are such that the parties would have confidence that a judge would, if he ruled evidence inadmissible, be able to put the evidence out of his mind or (b) if there was no such confidence, then the application should be dealt with by another judge. The Defendant said that the copies of the indices to the documentary exhibits to the historians' statements demonstrate the documents referred to in the historians' evidence and which the historians analyse and comment upon as to their effect and the inferences to which they give rise. This, in conjunction with a description of the statements in the judgments of the judges in the Mutua litigation is, it was said, sufficient for me to understand and adjudicate fairly upon the objections to admissibility. The Court considered itself to be in a difficult position. The Claimants' stance was that the statements need to be read but since it was the Defendant's application to exclude, they met the case as presented. The problem with this is that I was being asked to determine whether the statements contained relevant admissible evidence. Having raised this matter it was accepted as fair to both sides that the Claimants could refer me to passages in the statements which they say demonstrated why the evidence was admissible. This they did.
There has been much correspondence about the nature and purpose of the historians' evidence. In particular what the Defendant has sought is the relevance of the evidence and whether the evidence is said to be opinion evidence or evidence as to fact. It is fair to say that there has been some confusion in the statements made previously in these proceedings by Counsel on behalf of the Claimants. However, rather than deal with what has or has not been said in the past, I seek to focus on how the Claimants put the case now.
The Claimants set out in correspondence and in their submissions that they said they rely on the historians as witnesses of fact. So for example in the letter of 31 July 2015, Tandem Law said:
"To assist you, and for the avoidance of doubt, the Claimants' position is that the facts stated in the historians' statements (including those describing circumstances in Kenya during the Emergency, events that occurred prior to and during the period of Emergency, and responsibility for those circumstances and events) provides (a) evidence of the context in which the claimants were mistreated, and (b) material from which the court is entitled to reach conclusions and/or draw inferences concerning:
- the role, and knowledge of the British Government
- the role, and knowledge of the British Army, and
- responsibility for the mistreatment of Claimants.
Furthermore, the Claimants contend that the evidence of the historians is relevant to explain the available documentation, to place it in context, and to identify the documentation that ought to be available but is not."
In conjunction with this is the extract from the judgment of Langstaff J [2010] EWHC 3609 (QB) at paragraph 10:
"Tugendhat J dealt with the position of evidence which the Claimant wished to call. That was the evidence of Professor Elkins. She had written one of the seminal texts in 2005. He accepted that her evidence was relevant in identifying documents or other material, but should not be admitted as expert evidence (that is, evidence of opinion) as to what was to be inferred from those documents taken as a whole. Because of her familiarity with documents, she is thus able to identify the documents which are likely to be of greatest use in the arguments of the respective parties. She has a greater facility for doing this than the parties themselves because of her great experience gained over some 10 years of looking through archives in the course of which she researched a text in which she has an interest. Plainly she makes efficient the process of identifying documents and material. It is important that I should remind myself that that is essentially her role. Her evidence has no particular value in this case, other than to identify relevant documents or to identify relevant witnesses who may be able to give effective and important testimony. Her position is very different from that of a witness who has directly seen something happen. It is also very different from the traditional role of an expert witness."
The Claimants say in their skeleton that the facts to which the witnesses testify derive from their examination of the historical records. They are not giving evidence of what they saw or what other people saw. They are giving evidence about what the historical record demonstrates by reference to the documents in the case. As I understood the skeleton argument, the Claimants go on to say that:
(a) How people express themselves in particular environments, the history of particular documents and the role played by particular groups and committees and the concerns of those whose views were being recorded are of relevance to the determination of the issues before me.
(b) That evidence is properly factual. It emerges from the documents themselves, from the wording used, comparison with other situations, and from tracing the history of particular events and individuals who were a part of them.
(c) The Claimants say that the witnesses speak to propositions that underpin the claim such as the system in (for example) paragraphs 9 – 10 of the Generic Particulars of Claim and specific issues set out therein, for example the Colonial Office's cover up of the resignation of the Commissioner of Police on the basis that police investigations were interfered with by the Governor amongst others.
The purposes of this evidence and the purposes set out in Tandem Law's letter of 31 July 2015 appeared to me to go substantially further than that which was referred to by Tugendhat J and Langstaff J. The extracts I have cited from Langstaff J emphasises that the only value of Professor Elkins' evidence was to identify relevant documents or relevant witnesses who may be able to give effective and important testimony. Tugendhat J had earlier said that Professor Elkins "Will be an expert in the sense that in many different cases only an expert can identify relevant factual evidence and obtain access to it in a form that can be put before the Court. For example in the present case, what documents once did exist and what documents still do exist is a matter of fact but only somebody with relevant historical expertise and skills would be able to identify the facts."
In oral argument Mr Myerson QC for the Claimants disavowed any intention of using the historians' evidence for any purpose other than that referred to in paragraph 10 of Mr Justice Langstaff's judgment. He only left open the possibility that if an historian was cross-examined then that may lead the witness into a different area. He also disavowed any intention of the historians giving opinion evidence, saying that when that was included in the statements it could either be excised or, if not capable of excision because otherwise the sense would be lost, the Court would be invited to disregard it. The way he put the case was that there are many thousands of documents. The historians could navigate the Court through the documents so as to assist the Court.[1] In collating and presenting the documentation it will be necessary to put the documents together. Sometimes this is not straightforward. He gave an example that the Kenyan government reported to the Colonial Office and the British Army reported to the War Office. How to present the strands of documentation to demonstrate that the Cabinet was responsible for decisions made in Kenya may be complex. Indeed there may be disputes as to how the documents should be presented together. As an example he referred to the fact that McCombe J in the 2012 Mutua judgment (paragraphs 123 – 124) set out the resignation of Sir Arthur Young as Commissioner of Police in January 1955 and the enquiry conducted by Sir Vincent Glenday in December 1954. This was based on Professor Elkins' statements. This he said demonstrated the point, namely that allowing the historians' evidence facilitates the relevant documents being brought together by somebody with long experience and familiarity of those documents. If a witness gave evidence and there was disagreement about how the documents should be put together then the Defendant could cross-examine.
Ultimately Mr Myerson QC said there were two possible methods of presentation; one would be to allow the historians to facilitate the presentation of documentation, the second would be that the parties themselves did it.
I remind myself of paragraphs 11 and 12 of Tugendhat J's judgment in Mutua. He had not seen a draft report from Professor Elkins and, at that stage, he was deciding the usage of Professor Elkins in relation to a section 33 application. Things have moved on substantially since then. There are more documents and the process is in train for full trial of this action in 2016. In the ordinary way, to the extent that the parties cooperate, then the documents should be presented in an agreed manner; to the extent that the parties disagree the Claimants should present their case on the documents, subject to any objections from the Defendant which I would hear and decide on the merits.
Mr Myerson QC said that adducing the historians' evidence is a question of how best to assist the Court in this very complex litigation. I am not at all persuaded (a) that the evidence is admissible since it is not factual evidence but historians' evidence facilitating the presentation of the Claimants' case. There is no reason why, subject to arguments about costs, the Claimants cannot utilise that expertise of the historians in presenting their case without the historians giving evidence; (b) I do not consider that overall such evidence would assist the Court. It is more likely to give rise to further dispute, arguments about admissibility and problems as to whether the Court was being potentially unduly influenced by three eminent historians whose statements do contain opinion evidence which may not be capable of excision, and who have formed views which are seen to be of assistance to the Claimants.
I cannot see what evidence of fact the historians give so as to make their evidence relevant and admissible. In this regard:
(i) I note what Langstaff J said in relation to the evidence then before him and the very limited role of Professor Elkins.
(ii) I have looked at the indices. If I take for example the documents referred to and exhibited to the witness statements of Professor Elkins, they are divided into 24 headings. The first few of these are:
1. Knowledge of and reaction of the CA and CO to abuses 1953 – 1955.
2. CA and CO's reaction to the allegations of abuses 1953 – 1955.
3. Judicial records 1953 – 1955.
4. Chief Secretary's Complaints Coordinating Committee January 15 1954.
5. Arthur Young and Duncan McPherson allegations of abuse 1954 – 1955.
Under these five headings are over 29 documents. On the face of these indices I cannot see what may be added by way of admissible evidence. Samantha Howard's second witness statement at paragraph 22 says:
"The statements are essentially historical commentary, akin to their books. They produce and exhibit documents and express personal conclusions drawn from those documents as to the history of events and what they consider to have been the knowledge, attitudes and roles of different entities and individuals. …"
This was substantially borne out by the two main examples of evidence which Mr Myerson cited to me.[2] I do not consider such evidence to be relevant and therefore admissible. If I consider the reasons given in Tandem Law's letter of 31 July 2015 set out above, what factual evidence can historians give which is not apparent from the documents themselves? I notice in this regard that the Defendant said to the court as long ago as 10 December 2014 that it foresaw an agreed chronology of relevant events.
In the Claimants' skeleton there was detailed reference to Rogers v Hoyle [2014] EWCA Civ 257. In that case the Court was dealing with the admissibility of an accident investigation branch report in relation to damages claimed arising out of an aircraft accident. The Court of Appeal noted that the report was a mixture of statements of fact and statements of opinion (paragraph 27). Further, there was no realistic possibility of the report being slanted (paragraph 29) and insofar as the report consisted of statements of fact or reported statements of fact it was prima facie admissible, it being immaterial that it constituted hearsay whether primary or secondary (paragraph 31). The remainder of the case deals with the admissibility of the findings of fact by the investigator and evidence of expert opinion. It is not the function of an expert to express opinions on disputed issues of fact which do not require any expert knowledge to evaluate (paragraph 52) and insofar as an expert's report does no more than opine on facts which require no expertise of his to evaluate, it is inadmissible and should be given no weight on that account. Where there is a mixture of inadmissible and admissible opinion evidence, the Court simply ignores that which is inadmissible. (Paragraph 53).
In my judgment Rogers v Hoyle does not take the matter any further since the Claimants wish to adduce the evidence as factual, not expert evidence. The essential question for me is that posed by paragraph 31, namely to what extent does the historians' evidence consist of statements or purported statements of fact? The Claimants accept that although the witnesses express their opinion, this should be discounted if it is not genuinely expert evidence or trespasses upon the Court's fact finding function.
The central reason to reject the historians' evidence is therefore that there is no relevant or admissible evidence which they can give as factual witnesses: (i) they were clearly not involved in the relevant events; (ii) evidence of opinion as to what the documents show or what may be inferred from them is inadmissible and, in any event, is not the basis of the Claimants' submission for the admissibility of this evidence; (iii) it certainly should not be the case, as the Claimants submitted, that if the 3 historians gave evidence that certain documents were the ones relevant to a particular issue and the Defendant disagreed, then if the Defendant did not cross-examine on this point, then they would be barred from disputing it.
I should record that the Claimants were prepared to call the historians for cross-examination if required. I was not persuaded on the argument I heard that, had there been relevant admissible evidence from the historians, it should have been excluded. In this regard the Defendant submitted that it should be for the following reasons:
(i) It would be grossly inefficient and unfair to the Defendant to cross-examine so as to explore the validity of statements made by reference to large quantities of documents. It is interesting that in the Claimants' skeleton argument at paragraph 20, Mr Myerson QC says that the complaint about voluminous witness statements and exhibits is unfounded. The witness statements amount to 320 pages. He then continues "The exhibits comprise the evidence the Court will examine in any event." This reinforces my judgment that the documents should speak for themselves and not be commented upon by historians' evidence; therefore the Defendant's objection on this basis does not arise.
(ii) The Defendant submits that the evidence is out of date because there has been new material since the Mutua litigation; also that the allegations are different. This is not in my judgment a reason for excluding any evidence which would otherwise be relevant and admissible. Nor is the fact that four potential witnesses of significance on behalf of the Defendant died in the Autumn of 2012 or shortly thereafter.
Finally I deal with the Claimants' point in their skeleton that the Defendant is seeking to define the only way in which the Claimants can present their case relying on the proposition in Dombo Beheer v The Netherlands [1993] 18 EHRR 213. In that case Dombo Beheer had sued the bank which objected to a witness being heard on the basis that a party to the proceedings could not himself be heard as a witness (paragraphs 15 and 16). The determination by the ECHR that there was a breach of Article 6 was in the context of one of the two key persons who could prove that there was an oral agreement between Dombo Beheer and the bank to extend certain credit facilities was not allowed to give evidence (paragraphs 34 and 35). This has no relevance to my finding that the historians can give no factual evidence of relevance which should therefore be admitted.
Corroborative Witness Statements
In this GLO there are over 40,000 claimants. The order is that 25 should be test claimants. The Claimants' lawyers wish to call 50 other claimants to give factual evidence. They have provided witness statements which have been served. The Defendant objects to 48 of these witnesses. All these 48 are claimants on the Group Register. The four statements which are not objected to comprise:
(i) Three statements which are directly corroborative of individual test cases. These are statements from Jane Wambui Zakariah, Rebeca Wanjira Mwaura and Eliaph Mutugi.
(ii) Professor Rotberg who gives direct evidence as to document destruction, this being one of the generic issues.
Paragraph 12 of the order of 14 March 2014 provided that the generic issues would be tried in the course of the test cases. Thus the 25 test cases are to be used so as to give judgment in those individual cases on their specific complaints but also to make legal and factual findings on the generic issues; see also Schedule 2 to the order of 14 March 2014.
This proposed evidence could be seen as similar fact evidence in relation to the test Claimants' evidence. On that basis, the two issues I have to decide are:
(i) Whether the evidence is admissible as being relevant.
(ii) Whether there are good grounds to decline to admit it in the course of the Court's case management powers.
(This is the approach to the admission of similar fact evidence: see O'Brien v Chief Constable of South Wales Police [2005] 2 AC 534).
As to admissibility the Defendant says that none of the additional witnesses objected to gives direct evidence of the offence alleged in any of the test cases and there is no example of the same individual perpetrator being identified as in any test case. Nor is there any identified similarity of location or timing as in the test cases. The Defendant adds that the statements potentially prove only:
(i) Elementary facts concerning the Emergency which the Defendant will not contest, these including the fact that people were detained by the Colonial Government at various locations pursuant to the Emergency legislation and ordinary criminal law, people were required by the Colonial Government not to reside in prohibited areas pursuant to the Emergency legislation and there were incidents of violence on both sides including by persons engaged or purportedly engaged by the Colonial Government.
(ii) Details of detention/residence location and in some cases associated activity similar to that alleged by certain test Claimants (e.g. detention at Embakasi Prison associated with work on construction of the airport there), though with no clarity about timing.
(iii) Isolated incidents of misconduct similar to that alleged by certain test Claimants within Kenya and during the Emergency though with no commonality as to perpetrators' locations or time periods.
The Defendant took me to the statement of one witness which they said was typical of the witness statements. It is from a Mr Ndua and is dated 8 May 2015. Apart from the preliminaries and introduction, paragraphs 5 – 11 of his statement deal with his being physically assaulted during the state of Emergency before he was moved to a concentration village. He describes an assault by Home Guards which took place at his house. He then says he was released and ordered to report to Gitaro camp on a daily basis and had to work there by way of forced labour for three months without food or drink. In paragraphs 12 – 21 he then described being detained at Githunguri concentration village from the age of about 17. He describes what went on at that village in terms of forced labour. Finally from paragraphs 22 onwards he says that in about 1955 he was moved to Nairobi and thereafter was not subjected to mistreatment. He says he did not receive medical treatment. Under the heading Other Losses (paragraph 25) he says he was forced out of his education because of the state of Emergency.
At Exhibit SH2/3 to Samantha Howard's second witness statement is a Schedule of the additional witnesses. The penultimate and ultimate columns of this Schedule are formed as a result of Tandem Law's response in respect of each witness as to whether the witness corroborates a specific test Claimant, and then the Defendant's comments on the information so provided. As far as Mr Ndua is concerned it is said that his evidence corroborates the evidence of Mr Munyoike (test Claimant 21) whose place of detention was also Githunguri camp. Ms Howard comments that Mr Ndua was not a direct witness to test case events and that he and the test Claimant described the allegedly common location differently ("camp"/"concentration village").
The Defendant cannot say that the additional witnesses do not give relevant similar fact evidence. For the reasons I have already set out they submit that the statements provide at best limited corroborative evidence of the evidence of test claimants.
I was taken to the entry in relation to witness number 2 on Exhibit SH2/3. This is a Mr Muchiri. The Schedule shows that he was in detention at Embakasi camp/prison, as were four named test claimants. He alleges forced labour in constructing Embakasi Airport, which three of the test claimants allege. (Apart from this his statement alleges detention and abuse at a number of other venues).
The Defendant emphasises that these witnesses do not describe anything above and beyond what happened "on the ground". However, to take Mr Muchiri's statement, it may well be in issue that there was no forced detention and forced labour at Embakasi camp. I do not know. On the face of it that part of Mr Muchiri's statement (and similarly the part of Mr Ndua's statement which deals with Githunguri camp) is relevant evidence in support of those allegations. How probative it is depends on what is in dispute and the significance of it. That is very difficult for me to determine at this stage. Potentially it may be highly probative, potentially not. If for example the Defendant's case was that test claimant, Mr Munyoike was a single example of forced labour at Githunguri camp then Mr Ndua's would be highly significant. This is in the absence of it being direct evidence as to Mr Munyoike's forced labour; further, to the extent that the Defendant may deny any knowledge "higher up the line" then testimony from additional witnesses of similar experiences in the same camps could be highly probative. It could well support systematic longstanding wrongdoing. I note in this regard that I was told in answer to a question which I raised that the Defendant will have factual witness evidence in relation to what happened "on the ground". This may be limited but an example apparently is that there is evidence of a medical officer who visited the camps. I do not know what he is going to say. Nevertheless, it maybe that the evidence of some of the additional witnesses would be highly material to undermine his evidence.
Therefore as witnesses, irrespective of their status as claimants on the Group Register, the evidence which I have identified above may be of substantial probative value. I am not in a position to say at this stage.
The Defendant submits that even if the evidence is admissible the Court should consider whether there are good grounds to decline to admit it in the exercise of the Court's case management powers. They rely on three matters referred to by Lord Bingham in the O'Brien case and a further matter referred to by Lord Phillips. These can be distilled as follows:
(i) It is likely to be said that the admission of the evidence will distort the trial and distract the attention of the decision-maker by focusing attention on issues collateral to the issue to be decided.
(ii) (Particularly when there is a trial by jury), it will be necessary to weigh the potential probative value of the evidence against its potential for causing unfair prejudice: unless the former is judged to outweigh the latter by a considerable margin, the evidence is likely to be excluded.
(iii) Stress will be laid on the burden which admission would lay on the resisting party in terms of time, cost and personnel resources, the lengthening of the trial with the increased cost and stress, the potential prejudice to witnesses called upon to recall matters long closed, or thought to be closed; the loss of documentation; the fading of recollections.
(iv) Whether the evidence is likely to be relatively uncontroversial or whether its admission is likely to create side issues which will unbalance the trial and make it harder to see the wood from the trees.
Lord Phillips says at paragraphs 53 – 54 the test of relevance is the test of admissibility of similar fact evidence in a civil suit. The policy considerations which have given rise to the complex rules of criminal evidence are considerations which the judge in civil litigation should keep in mind having regard to the Overriding Objective which requires the Court to deal with cases justly and in a way which is proportionate, expeditious and fair. In this context Rule 32.1 gives the Court the power to control evidence and to exclude evidence that would otherwise be admissible (see above in relation to the historians' evidence issue).
Finally in terms of authority I refer to:
(i) What Lord Bingham said at paragraph 5 of O'Brien:
"…the importance of doing justice in the particular case is a factor the Court will always respect. The strength of the argument for admitting the evidence will always depend primarily on the judge's assessment of the potential significance of the evidence, assuming it to be true, in the context of the case as a whole."
(ii) Evidence of extraneous matters should be confined to cases of similar fact for the traditional reason that unless the evidence is similar fact evidence it is not probative of the issue to be determined (Laughton v Shalaby [2014] EWCA Civ 1450 at paragraph 22).
The evidence of unfairness is contained in Ms Howard's first statement, paragraphs 29 – 34. Ms Howard says that the test case process was designed to produce a fair cross section of randomly selected test cases and that the Claimants' methodology subverts the test case process. It is common ground that the random selection did not mean that there should be no other evidence supportive of the test claimants. So far I have been dealing with the case on the basis that the additional evidence is that which is similar fact evidence to that of the test claimants. If such evidence is of substantial probative value (which I cannot determine at this stage) then it cannot be excluded on the basis that the additional witnesses were not randomly selected as test claimants. Indeed the Defendant said that had the additional witnesses not been claimants then their submission would essentially have been the same.
Next, Ms Howard says that the additional witnesses' evidence would be adduced without the Defendant having the advantage of pleadings etc and specific medical evidence. Absent properly pleaded cases it will not be possible for the Defendant to investigate the evidence advanced in the way it should bearing in mind those witnesses' position as claimants on the Group Register. As to this the Defendant says that they have not had the advantage of Part 18 questions. The Claimants' response to this was that they would consent to Part 18 questions being put so long as they did not go to issues such as causation and quantum which are entirely specific to the individuals. As regards medical evidence, it may be that when a Claimant is examined some fruitful source of cross-examination arises during the taking of the history. The Defendant gave an example of one test claimant who apparently says that he or she was injured by the Mau Mau. However that is not the purpose of a medical report. Medical reports are there to assess condition, prognosis and causation of injuries. Their primary purpose is not to test veracity.
Thirdly, Ms Howard says that the amount of work involved would be grossly disproportionate. She says that the Defendant is presently investigating 36 test cases with a view to having individual defences filed in December 2015 (there is some slippage on this – this is to be subject to a further application shortly) and trial in 2016. It is said that the Defendant is having to commit extraordinary resources to the task and the work involved is dictated to a large extent by the material provided by the Claimants, notably the Part 18 responses and witness statements from the test claimants received in May and June. She says that the lack of particularity in the material has made the exercise of attempting to research and meet the test allegations extremely onerous, and that for the Defendant to have a fair opportunity to assess and test the evidence of the 48 additional witnesses it would have to investigate them in the same way and this would place "an impossible burden" upon the Defendant. These are matters of some significance. They must be taken into account in giving proper consideration to the overriding objective. Had I been persuaded that the additional witnesses could not give evidence of any real probative value then these issues of proportionate costs would assume substantial importance. However, I must deal with the case justly as well as at proportionate cost. In this regard it would, in my judgment, be wholly wrong to exclude the evidence to which I have referred at this stage. Looking at the four O'Brien factors briefly:
(i) I do not consider that the admission of the evidence will distort the trial or distract my attention by focusing on collateral issues.
(ii) I cannot properly weigh the potential probative value of the evidence in the balance, save to say that it may well be significant.
(iii) There will be a substantial burden in time, cost and personnel resources. As to the potential prejudice to witnesses recalling matters long closed or thought to be closed and the loss of documentation and fading recollections – the evidence of these witnesses is no different from that of the evidence in the case as a whole.
(iv) The evidence is likely to be highly controversial (that in itself possibly an indicator that it may be of real probative value); I do not consider it will unbalance the trial or make it harder to see the wood from the trees.
As regards timing, this will have to be discussed; it may be that the witnesses can be factored into the hearing towards the end of 2016.
So far I have dealt with this application on the basis of the extent to which the witnesses corroborate the evidence of the test claimants. This was not the primary basis upon which the Claimants sought to adduce it. They said that the relevance of the evidence was that the Defendant did not admit that during the state of Emergency large numbers of Kenyans were mistreated contrary to law and, if they were, then the Defendant is not liable for them. The Claimants wish to call the additional witnesses who they say suffered at the hands of (in particular) British Forces but also others for whom they say the Defendant is liable. They say the evidence goes to:
• The conditions in which claimants were kept.
• Their day to day experiences.
• The involvement of the British Army directly in the abuse that took place.
• The scale of the enterprise that the Claimants say marked the conduct of the UK Government throughout the Emergency so that the Court should draw the conclusion that on the balance of probabilities the likelihood is that claimants were subjected to that activity.
• A view from the ground about which the documents also speak.
Given my findings in relation to the parts of the witness statements which are corroborative of the test Claimants' evidence, I do not need to deal with the rest of their evidence. This is because I asked the Defendant about the possibility of excising evidence other than that which was corroborative. They replied that they did not seek any redactions at this stage and both sides reserved their position. Either the evidence should be admitted or it should not. They made reference to the case of JP Morgan Chase Bank and others v Springwell Navigation Corporation [2005] EWCA Civ 1602 where limiting the similar fact evidence was not accepted by the Court of Appeal (see paragraphs 77 – 81). I was not persuaded necessarily that the Defendant would be at any disadvantage if there was excision but, given that it did not seek it, the argument proceeded no further. What I do say is that the potential probative value of the similar fact evidence is such that I am clear that in my discretion I should not exclude this witness evidence. The Defendant's application therefore fails. Having regard to the provisions of Rule 32 CPR and the Overriding Objective it would not be right to exclude the evidence of those witnesses. I take into account what was said by Arden LJ about using the power under Rule 32.1 "With great circumspection for the purpose of achieving the Overriding Objective" – see Great Future International v Sealand Housing Corporation [2002] EWCA Civ 1183 paragraphs 23 and 24.
This ruling does not prevent the Defendant from making a further application should it seek to argue that circumstances have changed such that for example it can demonstrate that there is little, if any, probative value in the evidence.
Hearsay Statements
The statements to which objection is taken are set out in full at section C of Exhibit SH1 to Samantha Howard's first witness statement. The Claimants have served 30 Civil Evidence Act notices. 25 of these statements are extracts from a book by Professor Elkins, the relevant dates being between 1998 and 2003. In respect of 24 of these the evidence from Mr Cosgrove-Gibson at paragraph 15 is that Tandem Law have approached this matter proportionately, the database has been examined with a view to establishing if any of the witnesses in respect of whom hearsay notices have been served appear on the database. There were three witnesses who it was thought may be on the database. Attempts were made to contact these individuals using information in Tandem Law's possession. One was too ill to speak to their representative and one had no recollection of speaking to a white woman many years ago. Tandem Law therefore says that further steps would be disproportionate. The Defendant criticises this stance and says that insufficient steps have been taken by Tandem Law. As regards the other witness, Mr Fitz De Souza, the Defendant accepts that he is unable to attend court due to the fact he is too elderly and frail.
The other five witness statements include four dated between 2013 and 2014. These are from Claimants on the Group Register said to be deceased. The Claimants no longer seek to rely upon one of those, the statement by Mr Kaigiri Kuruga dated 27 September 2013. The fifth witness statement is from a Mr Nottingham. It is dated 10 November 2010 and was a witness statement from the Mutua litigation. The Defendant does not object to the admission in evidence of that statement and accepts that Mr Nottingham is unable to attend court.
Before I address the central issue of relevance and Rule 32.1, I deal with the objections that the witnesses in Professor Elkins' book (assuming she does not give evidence)[3] will not be first-hand hearsay and secondly the Defendant's application to cross-examine the makers of hearsay statements who are or may still be living (save for Mr De Souza and Mr Nottingham). In support of this the Defendant's solicitors criticise Tandem Law for the fact that they have merely consulted their own clients' database. They also rely upon the extract from Phipson on Evidence, paragraph 29 – 16 which emphasises the importance of oral evidence and that the admission of hearsay evidence should be the exception to the rule.
Any objection as to admissibility merely on the basis of the degree of hearsay is misplaced. The scheme provided by the Civil Evidence Act 1995 is as follows:
(i) In civil proceedings evidence shall not be excluded on the ground that it is hearsay of whatever degree (section 1(1) and 1(2)).
(ii) The safeguards introduced in relation to hearsay evidence under section 2 of the Act and Rules of court in relation to hearsay notices etc, for failure to comply with section 2 of the rules does not affect the admissibility of the evidence. The Court may take the failure to comply into account in considering the exercise of its powers with respect to the course of proceedings and costs and as matters adversely affecting the weight to be given in accordance with section 4 of the 1995 Act (section 2(4)).
Under section 3 of the 1995 Act and Rule 33.4 CPR the Court may, on the application of the Defendant in this case, permit the Defendant to call the maker of the statement to be cross-examined. There can be no objection to this. However it is up to the Defendant then to call the maker of the statement. The matter is out of the Claimants' hands. There is no requirement in the CPR for the Claimant to call the witness or to make efforts to call the witness.
I return however to the more fundamental issues. As with the application in respect of the additional witnesses the question is whether the Court should exercise its power to exclude evidence that would otherwise be admissible under Rule 32.1(2) CPR. Insofar as the three statements which are those of deceased claimants on the Group Register, their evidence will not be excluded essentially for the same reasons as those of the additional witnesses. They are in the same category save that on the one hand the Defendant cannot cross-examine them (relevant to prejudice), and on the other their evidence will not cause quite the same effect in terms of time/resources. Overall, their evidence should be similarly not excluded.
As regards the witnesses named in Professor Elkins' book, nothing apparently identifies any of the individual Claimants or individual claims. These witnesses are clearly not on the Group Register and therefore some of the factors I have set out above for excluding such Claimants do not apply. Further if the Defendant does not get them to Court in order to cross-examine them then the trial will not be lengthened.
I have read a number of the witness statements. I attach as Appendix A to this judgment an example to which I was specifically taken, namely that of Muthoni Waciuma. It will be seen that the introductory context in italics is that provided by Professor Elkins in her book. The Claimants say that save as to preserve the absolutely necessary context this can be edited/redacted. The section in bold is what is quoted by Professor Elkins as having been told to her by Mr Waciuma. The Defendant says that there is no real record or details of the interviews by Professor Elkins and there is nothing for it to go on nor (probably) any real opportunity to cross-examine.
In my judgment the probative value of the evidence in the hearsay witness statements is extremely limited. I say this for the following reasons:
(i) So far as one can tell the evidence is not clearly focused on incidents which substantiate in any real way the cases put forward by the 25 test claimants or even the other witnesses whose evidence I have permitted.
(ii) Such weight as the evidence may have is in any event substantially diminished by reference to the considerations in section 4 of the Civil Evidence Act 1995. Subsection 4(2) gives a list of particular examples to which regard may be had. Following that list:
(a) It is unknown whether it would be reasonable and practicable for the Claimants to produce the author of the original statement as a witness. What I do know is that the Claimants consider it is not a proportionate expenditure of their resources.
(b) The original statements were not made contemporaneously with the occurrence or existence of the matters stated. They were made decades later.
(c) The evidence does involve multiple hearsay.
(d) Potentially the people involved do have motives to conceal or misrepresent matters. This can be said to be a real possibility though no more than that.
(e) It also appears that the original statement was an edited account and was made in collaboration with the historian for the particular purpose of research.
(f) It cannot be said that the circumstances in which the evidence is adduced as hearsay is such as to suggest an attempt to prevent proper evaluation as to its weight.
(iii) The evidence as presented is accompanied by substantial commentary so as to contextualise it. It is not clear how and to what extent that can be successfully redacted and leave the evidence making any real sense.
In order to exercise my discretion under Rule 32.1 and to take into account the factors in the overriding objective whilst reminding myself of the comments of Arden LJ in the Great Future International case, I have regard to the following matters:
(i) The task for the Defendant of researching the test Claimants' evidence and the further witnesses whose evidence I have allowed is already very substantial. To add potentially to that very significant burden such that the Defendant would have to try to explore, research and have a reasonable opportunity to respond to the evidence in the hearsay statements (given the nature and quality of the evidence as described above) requires the Court to be circumspect in the context of proper, fair and proportionate case management of this litigation.
(ii) In this context I note again that the Claimants' solicitors do not consider it proportionate to do anything other than search their database in order to see if the witnesses are still available. If it is not so proportionate then (a) that perhaps indicates that the probative value of the evidence is indeed low and/or in any event (b) entails that the Defendant will not be able to cross-examine any of the witnesses unless it first spends very substantial resources trying to trace them.
(iii) Even if the Defendant did trace the witnesses it could not compel them to attend. There will be no powers of subpoena which would have any effect in Kenya.
Overall therefore I have come to the clear conclusion that, given the very low probative value of this evidence, there are real risks that the admission of it will distort the trial, focus on issues collateral to the main issues to be decided and cause prejudice to the Defendant as well as increased time and costs, the consequences of which are not proportionate to the value of the evidence.
In summary this evidence will be refused under my powers under Rule 32.1.
Appendix A
Filed on behalf of: Claimants
Witness statement: Hearsay Evidence
Statement no: 1
Date: 4 June 2015
IN THE HIGH COURT OF JUSTICE CLAIM NO: HQ13XO2162
QUEENS BENCH DIVISION
KENYAN EMERGENCY GROUP LITIGATION
ELOISE MUKAMI KIMATHI
AND JAMES KARANJA NYORO
AND OTHERS
Claimants
-And-
THE FOREIGN AND COMMONWEALTH OFFICE
Defendant
STATEMENT OF HEARSAY EVIDENCE
MUTHONI WACIUMA
(As recounted to PROFESSOR CAROLINE MACY ELKINS)
The Claimants will rely on the following account of Muthoni Waciuma. Professor Elkins interviewed Muthoni on 10 August 2003 in Limuru, Kenya. Muthoni Waciuma's evidence, as recounted to Professor Elkins, is as follows (the introductory context is provided by Professor Elkins in italics):
'In the early years of the Emergency two men working for the British government in Fort Hall were renowned for enforcing colonial control. The first was Sam Githu, better known as Sam Speaker… he was a loyalist from Chomo in Fort Hall who had risen through the ranks of the local colonial government. At the start of the Emergency, Speaker was an assistant district officer… Working alongside him was a young British settler nicknamed YY by the local Kikuyu… YY joined the Kenya Police Reserve when the war began… In 1953 Speaker and YY moved through Fort Hall, helping direct massive screening parades and individual interrogation sessions… On one occasion in early 1953 they brought two suspects to the Kandara police station'[4].
"We were standing right next to our fireplace, resting our chins on the bricks and looking directly at the police station; it was just a few feet away. We then saw Kamiraru [YY] pull up with two men. They took the first man and hooked him up to the engine of the Land Rover while it was still running and his body just shook all over. But they weren't finished with him… Kamiraru and some other Kikuyu Home Guard took him over to the generator that was in the back of the police station's garage. They then hooked him up to this generator and electrocuted him. After that, Kamiraru and Speaker turned to the other man, who was still standing there. They tied him to the back of the Land Rover and made him run behind them as they drove off. He was running, and of course he falls. They drove him until he died in pieces. That was being done to really show people that if they didn't confess and give up Mau Mau that that would be their fate. I have never seen anything so cruel. And we were scared stiff, so we did everything we could not to have something like that done to ourselves. You just kept quiet. It was really a traumatic time… There was so much suffering. People will not believe that we have survived such things. A lot of atrocities like this one were done." [5]
Served this day of June 2015
Note 1 The historians’ evidence does not take account of fresh disclosure. For example there are 10,000 pages of documents which the Claimants have received and they expect to receive another 6,000 pages by the end of the year. There is no complaint about this. Given the time constraints any of these new documents which are of importance may not be capable of being reviewed by the historians. [Back]
Note 2 The first example was references from all three historians pre and post the discovery of the Hanslope Park documents. They contained opinion evidence which the Claimants accepted would not be relevant and should if possible be excised. They brought together for example documents said to show the difference between government policy and reality in relation to screening centres and unofficial screening centres and alleged brutality particularly in the unofficial screening centres; also the knowledge of officials at all levels of the abuses and (in Dr Bennett’s case) a primary focus of the role of the British Army and its involvement. The second example was from the three statements of Professor Anderson bringing together documents demonstrating official attitudes towards those running the camps and those detained in the camps said to demonstrate a way in which violence was performed at the behest of and known to and not stopped by those in positions of responsibility. [Back]
Note 3 The hearsay notices say that Professor Elkins is abroad and is unwilling to assist. However, Mr Myerson QC told me that she would attend if a subpoena was issued, albeit served on her in the USA. [Back]
Note 4 Elkins, 79. [Back]
Note 5 Elkins, 80, Muthoni Waciuma, Limuru, Kenya, 10 August 2003
[Back]
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Mr Justice Foskett:
Introduction
This case is a sequel to and arises out of the case of In the matter of K (A Child) [2014] EWCA Civ 905, [2015] 1 FLR 927, [2014] 3 FCR 428 and [2014] Fam. Law 1384. It will be necessary to quote in this judgment parts of the judgments given by Kitchin LJ and McFarlane LJ (with whom Maurice Kay LJ agreed) in that case, but an understanding of the issues that arise for consideration in the present proceedings will best be obtained by considering those judgments in full. Indeed it would be better if this judgment was read alongside the judgments of the Court of Appeal.
The Claimant, 'LL' as he is known in these proceedings, is the father of the child concerned who, despite the title of the earlier proceedings, was referred to as 'M' in those proceedings. M was aged less than 2 at the time of the material events, having been born in July 2012.
On 3 April 2014 Russell J, sitting in Manchester, sentenced the Claimant to an immediate term of imprisonment for a total period of 18 months for contempt of court arising from breaches of certain orders which she found established.
That committal order was set aside by the Court of Appeal with immediate effect following a hearing on 4 June 2014, the reasons for that decision being set out in the reserved judgments handed down on 15 July 2014.
The Claimant seeks compensation from the Lord Chancellor, the appropriate Defendant to these proceedings, for his alleged unlawful detention between 3 April and 4 June 2014 (a total of 63 days).
The proceedings before me have related to liability only. If it is established, there will have to be a further hearing on the level of compensation if agreement is not reached. Compensation is sought pursuant to sections 6, 8, 9 of the Human Rights Act 1998 and Article 5(5) ECHR.
Summary of background
I do not need to extend this judgment by a full recitation of the circumstances of the various hearings before Russell J and the orders she made leading to the order made on 3 April 2014. They are set out fully in paragraphs 1-31 of the judgment of Kitchin LJ.
As I shall indicate in more detail below (see paragraphs 26-50 below), the Court of Appeal allowed the Claimant's appeal against two orders that Russell J made: (i) that part of the order of 21 March 2014 which recited that the court expected the Claimant to make applications to the Singaporean court to ensure M's return to this jurisdiction (see paragraph 27 of Kitchin LJ's judgment) and (ii) the order for committal made on 3 April 2014. In relation to (ii), the Court of Appeal held that the judge should have recused herself from hearing the committal application, that the procedure adopted in relation to deciding whether there was a breach of the order of 21 March 2014 was incorrect, that there was insufficient evidence to justify a finding that the Claimant was in deliberate breach of the order and, finally, that the procedure adopted in the sentencing exercise was flawed.
The issue for consideration is whether those matters, either individually or collectively, are sufficient to justify a finding that the Claimant is entitled to compensation under Article 5. It will be understood that it is a somewhat invidious position for a judge of a co-ordinate jurisdiction to that of a judge whose conduct is under scrutiny to be faced with having to decide whether that judge acted in such a way as to have engaged in a "gross and obvious irregularity of procedure" (which is the essential test: see, e.g., paragraph 18 below). However, the parties have not suggested that there is any alternative procedure and, accordingly, I must endeavour to reach a conclusion conscientiously on the basis of the arguments and material before me. As it is and as I have already indicated (see paragraph 8), the Court of Appeal has indicated clearly the areas where the judge went wrong and my task is to decide whether those areas, either individually or collectively, cross the threshold into the territory encapsulated in the test to which I have referred. The application, though launched initially in the Family Division, has for obvious reasons been transferred to the Queen's Bench Division.
The jurisdiction sought to be invoked by the Claimant in these proceedings
It is common ground that judicial officer holders are immune from civil liability at common law for acts done in a judicial capacity that would otherwise be tortious and that a similar immunity is conferred on the Crown by virtue of section 2(5) of the Crown Proceedings Act 1947. It is also common ground that damages under the Human Rights Act 1998 may not be awarded in relation to judicial acts done in good faith save "to compensate a person to the extent required by Article 5(5) of the Convention": section 9(3) of the 1998 Act.
Article 5 of the ECHR reads as follows:
1. Everyone has the right to liberty and security of person. No one shall be deprived of his liberty save in the following cases and in accordance with a procedure prescribed by law:
(a) the lawful detention of a person after conviction by a competent court;
(b) the lawful arrest or detention of a person for non compliance with the lawful order of a court or in order to secure the fulfilment of any obligation prescribed by law;
(c) the lawful arrest or detention of a person effected for the purpose of bringing him before the competent legal authority on reasonable suspicion of having committed an offence or when it is reasonably considered necessary to prevent his committing an offence or fleeing after having done so;
(d) the detention of a minor by lawful order for the purpose of educational supervision or his lawful detention for the purpose of bringing him before the competent legal authority;
(e) the lawful detention of persons for the prevention of the spreading of infectious diseases, of persons of unsound mind, alcoholics or drug addicts or vagrants;
(f) the lawful arrest or detention of a person to prevent his effecting an unauthorised entry into the country or of a person against whom action is being taken with a view to deportation or extradition.
2. Everyone who is arrested shall be informed promptly, in a language which he understands, of the reasons for his arrest and of any charge against him.
3. Everyone arrested or detained in accordance with the provisions of paragraph 1(c) of this Article shall be brought promptly before a judge or other officer authorised by law to exercise judicial power and shall be entitled to trial within a reasonable time or to release pending trial. Release may be conditioned by guarantees to appear for trial.
4. Everyone who is deprived of his liberty by arrest or detention shall be entitled to take proceedings by which the lawfulness of his detention shall be decided speedily by a court and his release ordered if the detention is not lawful.
5. Everyone who has been the victim of arrest or detention in contravention of the provisions of this Article shall have an enforceable right to compensation.
The jurisdiction to award compensation thus derives from Article 5 and inevitably much of the jurisprudence relating to the exercise of the jurisdiction is to be derived from decisions of the European Court of Human Rights. However, there is a substantial background in English law that has informed the development of the European law. I have been taken through much of the law by Mr Jamie Burton, for the Claimant, and Mr Elliot Gold, for the Defendant. Without, I trust, doing an injustice to their analyses of the authorities, I hope to be able to express the essential question to be asked and answered more shortly and without a detailed analysis of the European jurisprudence - or indeed of the domestic authorities beyond a few.
The jurisdiction relied upon by the Claimant in this case has been sought to be invoked in two other recent cases, albeit unsuccessfully in each: Wright v. the Lord Chancellor [2015] EWHC 1477 (McGowan J) and W v. Lord Chancellor [2015] EWCA Civ 742. Both arose from Crown Court cases, the former concerning an unlawful sentence imposed in the Crown Court (set aside by the Court of Appeal Criminal Division nearly 6 years later when the appellant had served almost 6 years in custody), the latter concerning a conviction (with a consequent 9-year prison sentence) that was set aside on appeal some 2 years later, no re-trial being ordered. It follows that each claimant in those cases spent time in custody that, on the basis of the ultimate conclusion of the appeal process, each should not have spent.
Mr Burton has submitted that there is little to be derived from those cases in relation to the issues arising in this case. The context of each is, of course, different from the context of this case, but it is instructive, though not determinative of the present case, to see how the Court of Appeal assessed the conduct of the trial judge in W when considering whether a "gross and obvious irregularity" arguably occurred. To put that issue itself into the context of that case, the claimant had sought damages in two ways identified in the following paragraph of the judgment of Sir Brian Leveson, President of the Queen's Bench Division (with which Lord Dyson MR and Tomlinson LJ agreed):
"… the appellant commenced civil proceedings seeking damages pursuant to s. 6 of the Human Rights Act 1998 ("the 1998 Act") on the grounds that a public authority (the court) had acted incompatibly with his rights under the European Convention for Human Rights ("the Convention") and was not protected on the grounds that the failures did not constitute judicial acts done in good faith. A further argument was mounted that the claim also fell within Article 5 of the Convention: his detention was not lawful because the judge had failed "to conform to the substantive and procedural rules" of the criminal law of England and Wales."
In that case, therefore, the good faith of the trial judge was put in issue by the claimant. The Court of Appeal held that Mitting J, who heard the defendant's strike out application at first instance, was "entirely right to strike out the claim brought on the basis of the lack of good faith of [the trial judge because it] was doomed to fail": [40]. In this case there has been no suggestion of lack of good faith on the part of Russell J.
Reverting to W, the claim under Article 5 focused on the issue that is truly the central issue in this case as foreshadowed in paragraph 9 above. The President of the Queen's Bench Division summarised the authorities that led to the identification of that issue in that case in paragraphs 42-46 of his judgment having referred in paragraph 41 to the relevant parts of Article 5:
42. This provision has been considered by Strasbourg over the years and is not itself intended to provide compensation for those whose convictions have been quashed on appeal but which had been reached by a lawfully constituted court. In Krzycki v Germany (1978) 13 DR 57, the Commission made it clear:
"Art.5(1)(a) does not require a "lawful conviction" but only speaks of "lawful detention". This detention must be ordered "in accordance with a procedure prescribed by law" as Art. 5(1) lays down. Consequently the Commission has always refused to consider applications of prisoners who have been convicted and sentenced in accordance with a procedure prescribed by law and who complain that their conviction was based on error of law or fact (Decisions on the admissibility of Application Nos. 458/59, Yearbook 3, pp.222, 232; 1140/61, Coll. of Dec. 8, pp.57, 62)."
43. The European Court underlined that proposition in Benham v United Kingdom (1996) 22 EHRR 293 (ECtHR) which concerned the quashed committal of an unrepresented defendant to prison for non-payment of the community charge. Although the tests which permitted committal were found not to have been satisfied, the court concluded that there was no breach of Article 5(1) because the lawfulness of detention was a matter of national, domestic law.
44. The Court went on to adopt the distinction drawn by the House of Lords in Re McC (A Minor) [1985] AC 528 between custody decisions which are, on the one hand, voidable because they are wrong in law by reason of errors within jurisdiction and, on the other hand, those which are void ab initio and ex facie because they are so wrong in law as to be outside or in excess of jurisdiction. These were summarised in Benham in this way (at [25]):
"In its judgment [i.e. that of the House of Lords], a magistrates court acted in excess of jurisdiction in three circumstances only: (1) if it acted without having jurisdiction over the cause; (2) if it exercised its powers in a procedural manner that involved a gross and obvious irregularity, or (3) if it made an order that had no proper foundation in law because of a failure to observe a statutory condition precedent."
45. Benham goes on to make it clear what is meant by lawful detention. It does so in these terms (at [46]):
"A period of detention will in principle be lawful if it is carried out pursuant to a court order. A subsequent finding that the court erred under domestic law in making the order will not necessarily retrospectively affect the validity of the intervening period of detention. For this reason, the Strasbourg organs have consistently refused to uphold applications from persons convicted of criminal offences who complain that their convictions or sentences were found by the appellate courts to have been based on errors of fact or law (see the Bozano v. France judgment of 18 December 1986, Series A no. 111, p. 23, para. 55, and the report of the Commission of 9 March 1978 on application no. 7629/76, Krzycki v. Germany, Decisions and Reports 13, pp. 60-61)."
46. [Counsel for the claimant] alighted upon the phrase "gross and obvious irregularity" on the basis that, in this (as in any) criminal case, the judge is required to spell out clearly to the jury the nature of the defence case and any inconsistency in the prosecution case. He also underlines that the Court of Appeal held that the trial judge failed to put the defence case at all, other than that it amounted to an irrational denial and, after the replaying of the video evidence, did not come close to achieving a fair balance."
In that case the Court of Appeal Criminal Division that had quashed the claimant's conviction did so on 5 grounds relating to the summing up (see [2011] EWCA Crim 1142), the first of which was characterised by the subsequent division of the Court of Appeal as giving rise to "serious criticism". It related to the way in which the date of the alleged sexual offence was dealt with by the judge and had the effect of removing from the jury's consideration the claimant's factual challenge to the credibility of the complainant's account. The next three grounds, characterised by the Court of Appeal Criminal Division as "material errors", related to deficiencies in the summing up of the claimant's own case in response to the allegations made against him by the complainant. The final ground related to the way the judge dealt with a request from the jury during their deliberations to see again the video interview given by the complainant. It is not an unfamiliar request in such a trial and there is a well-established format for dealing with such a request which requires a trial judge to warn the jury not to give disproportionate weight to the evidence because it is repeated after all the other evidence. The Court of Appeal Criminal Division held that "the jurisprudence demonstrates that the achieving of a fair balance is what is necessary and, in particular, in the absence of any warning, we do not consider that the judge came close to achieving that balance in this case."
The Court of Appeal rejected the submission of the claimant in that case as reflected in paragraph 46 of the judgment (see paragraph 16 above) in the following way:
"… to engage this aspect of Benham, it must be the exercise of power in a way that reveals a gross and obvious irregularity: in this case, although there were errors in the summing up, whether considered individually or cumulatively, they fall far short of being so serious and egregious as to amount to gross and obvious irregularities."
I will return to the impact of that case on the present, so far as it exists, in due course, but it is a helpful contemporary indication of what needs to be established for a "gross and obvious irregularity" to be held to have occurred. That expression is derived historically from Re McC (A Minor) (sometimes referred to as MCC v Mullan) to which reference was made in paragraph 44 of the judgment in W. As Mr Burton rightly says, that case was decided over 30 years ago and raised an issue (namely, whether justices in Northern Ireland could be made personally liable in a civil action for false imprisonment and trespass to the person arising from the making of a school training order in respect of a 14-year old when they had no jurisdiction to do so) that would not arise today. He submits that the House of Lords would inevitably have set the bar at a high level to permit such an action to be brought. The passage most frequently quoted in this context is that in the speech of Lord Bridge of Harwich (with which the majority of their Lordships agreed in full) at pp. 546-7:
"… once justices have duly entered upon the summary trial of a matter within their jurisdiction, only something quite exceptional occurring in the course of their proceeding to a determination can oust their jurisdiction so as to deprive them of protection from civil liability for a subsequent trespass. As Johnston v. Meldon, 30 L.R.Ir. 15 shows, an error (whether of law or fact) in deciding a collateral issue on which jurisdiction depends will not do so. Nor will the absence of any evidence to support a conviction: Rex (Martin) v. Mahony [1910] 2 I.R. 695; Rex v. Nat Bell Liquors Ltd. [1922] 2 AC 128. It is clear, in my opinion, that no error of law committed in reaching a finding of guilt would suffice, even if it arose from a misconstruction of the particular legislative provision to be applied, so that it could be said that the justices had asked themselves the wrong question. I take this view because, as I have intimated earlier, I do not believe that the novel test of excess of jurisdiction which emerges from the Anisminic case [1969] 2 AC 147, however valuable it may be in ensuring that the supervisory jurisdiction of the superior courts over inferior tribunals is effective to secure compliance with the law and is not lightly to be ousted by statute, has any application whatever to the construction of section 15 of the Northern Ireland Act of 1964 or section 45 of the Act of 1979.
Justices would, of course, be acting "without jurisdiction or in excess of jurisdiction" within the meaning of section 15 if, in the course of hearing a case within their jurisdiction they were guilty of some gross and obvious irregularity of procedure, as for example if one justice absented himself for part of the hearing and relied on another to tell him what had happened during his absence, or of the rules of natural justice, as for example if the justices refused to allow the defendant to give evidence. But I would leave for determination if and when they arise other more subtle cases one might imagine in which it could successfully be contended in judicial review proceedings that a conviction was vitiated on some narrow technical ground involving a procedural irregularity or even a breach of the rules of natural justice. Such convictions, if followed by a potential trespass to person or goods would not, in my opinion, necessarily expose the justices to liability in damages."
Whilst Mr Burton's observation may have some force in a general sense, I detect nothing in any of the subsequent European authorities that in any way reduces the threshold from the very high threshold thus set. Indeed, in Mooren v Germany (2010) 50 EHRR 23 this approach was re-affirmed by the European Court of Human Rights where the relevant principles were recapitulated at paragraphs 72-81. I will not extend this judgment by reciting all those provisions, but I will quote paragraph 75 (omitting the footnotes) as follows:
"In its more recent case law, the Court, referring to a comparable distinction made under English law, further specified the circumstances under which the detention remained lawful in the said underlying period for the purposes of art.5(1): For the assessment of compliance with art.5(1) of the Convention a basic distinction has to be made between ex facie invalid detention orders— for example, given by a court in excess of jurisdiction or where the interested party did not have proper notice of the hearing—and detention orders which are prima facie valid and effective unless and until they have been overturned by a higher court. A detention order must be considered as ex facie invalid if the flaw in the order amounted to a "gross and obvious irregularity" in the exceptional sense indicated by the Court's case law. Accordingly, unless they constitute a gross and obvious irregularity, defects in a detention order may be remedied by the domestic appeal courts in the course of judicial review proceedings."
Mr Burton's contention is that this re-statement suggests that an order such as that made in this case (namely, one by a judge sitting in a superior court of record in the domestic jurisdiction) could be declared ex facie invalid if made pursuant to a "gross and obvious irregularity" and thus be treated as void ab initio for the purposes of European law irrespective of the fact that the English domestic law is to contrary effect (see, e.g., R v Cain [1985] AC 46). I do not think that I can accept this proposition as it stands given its potential wide-reaching consequences. Mr Gold, whilst not disputing Mr Burton's contention, submits that the distinction between void and voidable orders for detention remains of central importance when applying the "gross and obvious irregularity" test. I am inclined to accept that, but I do not think I need to resolve this apparent dispute because it is, as it seems to me, in any event academic for present purposes. The potential for a claim for compensation under Article 5 was not disputed in, for example, W v. Lord Chancellor if a "gross and obvious irregularity" leading to the detention could be demonstrated. It was not demonstrated in that case. If it can be demonstrated in this case, it would seem that compensation should, in principle, be paid. However, the general principle remains that an order made by a superior court depriving someone of their liberty remains valid and lawful until it is set aside and the distinction continues to be recognised in the European cases: see, e.g., Liu v Russia (2008) 47 EHRR 33 and Khudoyorov v Russia (2007) 45 EHRR 5.
Whilst the use of the expression "serious and egregious" in W was plainly not designed to replace the words "gross and obvious", their use illustrates the nature of what needs to be demonstrated. Whilst the underlying policy that may have led to the use of the expression "gross and obvious" in McC will have changed given the immunity from suit of magistrates that now exists (since 1990), it is not difficult to see that permitting claims for compensation for corrected mistakes in judicial decision-making need to be confined to situations where "only something quite exceptional" has occurred. Mr Gold has so contended and that, in my judgment, must be so. As is often the case in this kind of situation, defining the parameters of what is "quite exceptional" is less easy than identifying a situation that can be so described.
Where someone has not been given proper notice of a hearing at which he is deprived of his liberty, there will plainly have been a "gross and obvious irregularity of procedure": see Lloyd v United Kingdom (29798/96) March 1, 2005, para. 115. However, a failure to afford legal representation to fine defaulters under the age of 21, whilst sufficient to quash the warrants, was not considered by the ECtHR to amount to such an irregularity: para. 114. In Liu v Russia (see paragraph 21 above), it was determined that a failure to give reasons for holding an applicant in custody, whilst sufficient within the domestic law to justify quashing the order thus made, did not meet the "gross and obvious" criterion. In Kolevi v Bulgaria (2014) 59 EHRR 23, however, the applicant was a high-ranking prosecutor who, whilst holding such position, was immune from prosecution according to the domestic law. Notwithstanding this, the Sofia City Court remanded him in custody pending prosecution for a number of alleged offences. That order was subsequently set aside by a superior court. The ECtHR said this at [177]:
"In the present case … the flaw identified in Mr Kolev's detention order can fairly be described as a "gross and obvious irregularity", given that domestic law prohibited in absolute terms the institution of criminal proceedings and the detention of persons enjoying immunity from prosecution. The detention order was therefore issued in excess of jurisdiction and was thus invalid and as such contrary to art.5(1)."
With these illustrations to hand, as well as the illustration afforded, in particular, by W, where do the circumstances of this case stand?
I have summarised the basis for the decision of the Court of Appeal in paragraph 8 above. I need to record in a little more detail precisely what was said about the judge's handling of the case before endeavouring to answer the question.
The Court of Appeal's reasoning for setting aside the committal order
I will refer briefly to each of the grounds relied upon by the Court of Appeal to hold that the committal order could not stand.
First, the recital contained in the order of 21 March 2014 to which a penal notice was added. The inclusion of the recital was said to be inappropriate for the reasons given by Kitchin LJ in paragraphs 49-52. In short, it was not clear enough to bring home to the Claimant what he had to do and it effectively coerced him into taking proceedings against his parents in a foreign jurisdiction which is something the court would not have had the power to order. It was inappropriate, it was held, to found committal proceedings on such an expectation.
Second, the refusal of the judge to recuse herself from the committal proceedings on the grounds of apparent bias. This is dealt with in paragraphs 55-59 and reinforced by McFarlane LJ at paragraphs 77-78. Kitchin LJ said this at [55]:
"… It seems to me that [the Claimant] had substantial grounds to be concerned about her hearing the committal application in the light of the comments she had made at the hearings on 19 and 21 March 2014. I have set out the material parts of the transcripts earlier in this judgment but it will be recalled that on 19 March the judge told him that if he did not secure M's return he knew what the consequences would be; that he had "one last opportunity" to secure M's return to the United Kingdom and "to remain at liberty"; and that he was "likely to be imprisoned" if he failed. Then, on 21 March, he was told that that, in the light of his failure to take action against the grandparents in Singapore it was "likely the period of imprisonment would be lengthy"; that his breach of the order of 14 March was "plain"; that he was responsible for M's return; and that he was required to take action against the grandparents in Singapore and yet he had done "Nothing. Nothing"."
Third, the failure to warn the Claimant that he was not obliged to give evidence and the procedure adopted when he did give evidence. This is dealt with at paragraphs 60-61. There was, it was held, a failure "to keep in mind the important principles applicable to contempt proceedings articulated by this court in Hammerton v Hammerton [2007] EWCA Civ 248, [2007] 2 FLR 1133." I will return to the case of Hammerton below (see paragraphs 32-34 below).
Fourth, the issue of whether the Claimant's "breach" of the order was deliberate was dealt with in paragraphs 62-72. I need not try to summarise those paragraphs save to say that the Court of Appeal was of the view that the judge had failed to apply the right test to the issue of whether it had been "established to the criminal standard that the [Claimant] had deliberately failed to comply with the three orders".
Finally, the sentencing process was pursued in an incorrect manner. Kitchin LJ said that the judge "did so without giving [the Claimant] any further opportunity to secure representation or to make any submissions on his own behalf as to the gravity of the contempts of which he had been found guilty or by way of mitigation." She should, it was said, have given "the parties an opportunity to address her as to the consequences of her findings and the appropriate order to make."
I will deal with each of these matters individually and then consider them collectively, but before doing so I should return briefly to Hammerton (see paragraph 29 above). Mr Burton placed considerable emphasis on the fact that Wall LJ (a judge, of course, with immense experience in the field of family law) said that the judgment of Moses LJ "should … be required reading for every judge hearing or aspiring to hear family proceedings, and in particular an application in such proceedings to commit one of the parties to prison for contempt of court." It was a case involving a litigant in person who was the subject of committal proceedings for alleged breaches of undertakings not to contact his former wife, but who was also seeking contact with his 5 children. It is plain from the judgments of Moses LJ and Wall LJ that some significant errors in procedure had occurred in that case and emphasis was laid on the need to ensure that proper and fair procedures were followed, most particularly where a litigant in person was concerned.
It should, perhaps, be noted that Hammerton was not a case where the question of the recusal of the judge arose.
Mr Burton submitted, in effect, that the judge made two errors in this case that had been made in Hammerton and that she had plainly overlooked the strictures of the Court of Appeal as set out in that case. That lent force, he submitted, to the proposition that these errors were "gross and obvious". I will return to this below, but I will deal with each of the grounds upon which the decision of the Court of Appeal was based. It is, however, necessary to place that analysis in its proper context.
Although it does not ordinarily fall to a Queen's Bench Division judge to deal the with emotional complexities and family dynamics with which all judges exercising the family jurisdiction must deal with on a daily basis, it is not difficult to envisage the problems that can arise. Securing compliance from reluctant parties with the wish of a court, whether expressed in the form of an order or otherwise, is one problem area, particularly where the interests of young children are at the forefront of the court's consideration. Where, as in this case, a very young child is outside the physical jurisdiction of the court, the urgency of dealing with the situation is even greater. Some insight into the processes in operation can be gleaned from the short judgment of McFarlane LJ (another judge with immense experience in this field) where in paragraph 73 he said this:
"The situation that faced Russell J in the various hearings leading up to the final committal hearing not infrequently arises in the context of international children cases before a High Court judge. A judge may be required to deploy the court's considerable powers to compel parties or others to attend court or to bring about the return of the child to this jurisdiction. At a hearing in which pressure is brought to bear on an individual, and injunctive orders are made, the judge may be justified in presenting a very robust demeanour and, in so doing, making reference to the potential consequences if court orders are disobeyed. In the present case the judge did just that, and no criticism has been sustained in relation to her actions."
It should, of course, be noted that, although Russell J was the judge who ultimately had to deal with the problem in this case, two other Family Division judges had played a role in trying to resolve the position about M. However, the observations of McFarlane LJ demonstrate that robust messages to the Claimant were plainly appropriate in this case and no criticism was made of Russell J by the Court of Appeal in that regard. Indeed it is also plain from the judgment of Kitchin LJ that the court was alive to the real concerns that Russell J had self-evidently had about the true motivation of the Claimant. At paragraph 48, when considering the order of 21 March 2014, he said this:
"I recognise that by this time the judge was becoming increasingly frustrated by the father's failure to return M to the jurisdiction and was anxious to bring that about as soon as possible. I am also fully conscious of the findings that the judge had made as to the father's integrity, having deceived the mother as to his intentions on returning to Singapore the previous January. It also seems to me that this court should be very cautious about imposing unnecessary restrictions upon the armoury which judges may properly deploy to prevent the grave harm that is inflicted on children (and other innocent family members) by the wrongful removal and retention of those children abroad."
There is no doubt that there were ample grounds for the judge to believe that the Claimant was being duplicitous and manipulative. The misconceived application to Theis J confirmed it if confirmation were needed.
Furthermore, in relation to the comments made by the judge reflected in paragraph 55 of Kitchin LJ's judgment (see paragraph 28 above), Kitchin LJ made this observation at [56]:
"I have no doubt that these comments and observations were made by the judge in order to bring home to the father just how important it is to comply with orders of the court and out of a deep concern for M's welfare."
That, therefore, was the essential background to the issues confronting the judge. One might add to that the fact that the Claimant had previously been represented by solicitors and Counsel and, by the time of the relevant hearings before the judge, was unrepresented. Given his employment status with a well known banking enterprise, it is understandable that the judge may have wondered why he was unrepresented at this stage.
As to the first ground of criticism referred to by the Court of Appeal, it seems to me that, looked at in isolation, it could not possibly amount to a "gross and obvious procedural irregularity". The approach the judge adopted was obviously wrong for the reasons given by the Court of Appeal, but it was doubtless a bona fide attempt to fashion a requirement that would result in M being returned to the jurisdiction. Whilst, of course, any judge has to take ultimate responsibility for an order that bears his or her name, I do note that the experienced Counsel representing the mother did not alert the judge to any concerns that there may be about the enforceability of this part of the order. A court faced with dealing with a litigant in person is entitled to expect some reminder from a represented party about matters of this nature.
Turning to the recusal issue, in his closing submissions to me Mr Burton appeared to place this feature at the forefront of his submissions that Russell J had been guilty of a "gross and obvious procedural irregularity". It is, of course, clear from the Court of Appeal's decision, that she should have recused herself in the circumstances. However, I have observed that the issue did not arise in Hammerton and my attention has not been drawn to any other authority in the family jurisdiction where anything has been said about this in the present context. In those circumstances, it was incumbent on the judge to apply the well known test set out in authorities such as Porter v Magill [2002] 2 AC 357 and Locabail (UK) Ltd v Bayfield Properties Ltd [2000] QB 451. The approach foreshadowed in those authorities requires, at the end of the day, an exercise of judgment for the judge making the recusal decision subject, of course, to a higher court saying that the decision to proceed in a particular situation was wrong if that view is formed by the higher court.
Recusal and adjournment to another judge will have costs and delay implications in any case. Both must, of course, be countenanced to ensure that no injustice does arise from a judge continuing with a case with which he or she should not continue. But judges at all levels will be concerned to avoid delay and will be alert to the tactic, not infrequently sought to be deployed by litigants in person, to seek the recusal of a judge who has made some adverse order or comment concerning the position of that litigant. Russell J's reasons for not recusing herself were expressed briefly, but there can be no doubt that she saw no need to do so. That has to categorised as a misjudgement in the light of the Court of Appeal's subsequent ruling, but can it be said to amount to a "gross and obvious procedural irregularity"? I do not think so.
Turning to the procedural errors referred to in paragraph 29 above, Mr Burton has submitted, by reference to paragraph 35 of Hammerton, that the Court of Appeal must have taken a view that the errors were sufficiently serious to justify the setting aside of the committal orders without regard to the other areas of criticism. I do not consider that this is the effect of the decision of the Court of Appeal. After reciting the criticisms of the judge, Kitchin LJ simply said that the appeal against those aspects of the order of 3 April 2014 that related to the refusal of the judge to recuse herself and those relating to the allegations and findings of contempt should be allowed. He did not preclude the possibility that a conclusion of deliberate contempt might be made if the correct procedure was followed when the matter was reconsidered.
As it seems to me, these procedural errors, coupled with taking the wrong approach to the evaluation of the question of whether the contempt was deliberate, once rectified, could still result in adverse findings against the Claimant. If these errors had stood collectively, but in isolation from the others, I do not consider that they would amount to "a gross and obvious procedural irregularity" and I do not think that conclusion can be inferred from the reasoning of the Court of Appeal. They would certainly amount to a procedural irregularity, but not one which was "so serious and egregious" as to amount to a "gross and obvious irregularity". The situation here seems to me to have some parallels with the kind of mistakes made by the trial judge in W which the Court of Appeal in that case said were not even arguably within the "gross and obvious" category.
I should, perhaps, also add that Counsel for the mother positively invited the judge to proceed procedurally as she did and this may have distracted her from the correct procedural course.
The final area of criticism (see paragraph 8 above) relates to the failure of the judge to afford the Claimant "the opportunity to which he was entitled to make submissions in his own defence as to the seriousness of the contempts which the judge had found and also by way of mitigation". I think Mr Gold is right to say that the Court of Appeal did not truly criticise the judge for failing to afford the Claimant the opportunity of finding new representation (despite what was said in Hammerton at paragraphs 49-52), but considered that he should have been invited to make submissions in his own defence. That would be consistent with the judge informing the Claimant of his potential entitlement to legal aid, the importance of obtaining representation and inquiring why he was unrepresented. She did not believe his explanations.
Mr Gold submits that the judge's failure to invite him to make submissions in his own defence did not, in any event, bear upon the decision whether or not to impose a term of imprisonment because she considered that the contempt was very serious. The representations may have had an impact on the length of any such term. The Court of Appeal was critical of the judge's reasoning for concluding that the contempt was "serious" (see paragraph 73 of Kitchin LJ's judgment), but the seriousness of the contempt lay in the Claimant having taken insufficient steps to bring M back into the jurisdiction.
As Mr Gold says, the judge did have information about the Claimant's personal circumstances and with that information she attempted to reach an appropriate sentence by reference to the authorities to which she referred. She sought to give reasons for her decision. What occurred did not, he submits, constitute a total failure to follow appropriate procedures, but represented some failure to do so in an otherwise bona fide attempt to follow due process.
Affording someone, particularly someone who is unrepresented, the opportunity to say something before a custodial sentence is imposed is, I apprehend, an almost invariable requirement of fairness and it was not afforded in this case. Again, the Court of Appeal did not indicate that, if it had stood alone, this failure would have been sufficient to justify setting aside the order. I am inclined to think that had all previous steps in the committal proceedings been in accordance with the appropriate procedure, this failure would have been criticised but would not have been held to be sufficiently fundamental to set aside the committal order as such. In that event the Court of Appeal would probably have substituted an appropriate sentence in the light of the information then available.
As it was, this failure, along with the other deficiencies in the procedure adopted, resulted in the remission of the case to the High Court "to consider as soon as reasonably possible what further or different orders should be made against the father in the light of this judgment, such consideration to include the possibility of requiring the father to take particular action in Singapore" (paragraph 75).
Conclusion on the "gross and obvious irregularity" point
My analysis of each of the individual areas of criticism made of the judge's approach in this case has led to the conclusion that none constitutes judicial conduct that merits the description "quite exceptional" or "so serious and egregious" as to amount to a "gross and obvious procedural irregularity". This conclusion seems to me to be consistent with the way the Court of Appeal expressed itself in relation to the various errors. That there were errors cannot be denied, but the context in which they were made needs to be re-emphasised: the judge was dealing with a father who had deceived the mother of a very young child into permitting the child to be taken out of the jurisdiction many thousands of miles from where he was born. Having done so, he (on the judge's not unjustified perception) did everything possible to impede the return of the child to his mother and to the jurisdiction contrary to the legitimate orders of the court. Coercive pressure was required to secure compliance with these orders. The judge perceived, again with probable justification, that the Claimant was seeking to manipulate the whole process to his advantage. It is likely, having formed that view, that the judge inadvertently overlooked some of the relatively basic requirements of dealing with the kind of problem thrown up in such a situation. However, her good faith is not questioned and it is as plain as can be that the focus of the procedure she adopted was upon the interests of the little boy at the heart of the dispute who was effectively trapped in Singapore and unable to be reunited with his mother in the UK. It would, in those circumstances, be a very harsh conclusion to say that she behaved in a fashion that amounted to a "gross and obvious procedural irregularity."
Mr Gold has conceded that the errors involved here were serious, but nonetheless submits that they do not reach the level of exceptionality required to justify a claim for damages under Article 5. I consider that to be a well-founded submission if each error is considered in isolation for the reasons I have endeavoured to set out.
I have also considered whether the same conclusion should be reached when all the various matters are taken together, either simply as a collective unit or as a series of errors with a cumulative impact. Whilst, in principle, one could see that the cumulative impact of a series of errors is greater than each individual component, I remain of the view that the context in which these cumulative errors occurred is such that it would be unfair to categorise what occurred as involving a "gross and obvious procedural irregularity". It is, of course, correct to say that the process that led to the Claimant's incarceration for 63 days has been held to be inadequate for the purpose and flawed for the reasons given by the Court of Appeal. However, given the background, it is at least possible that the outcome would have been the same or similar if the correct procedures had been implemented.
Overall conclusion
As I have observed previously (see paragraphs 20 and 22 above), the bar for establishing a claim for damages in this context is necessarily set at a high level. I do not consider that the circumstances of this case cross the threshold thus established.
Accordingly, I do not find liability established.
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Mr Justice Dingemans:
Introduction
On 19th August 2012 an uninsured Peugeot motor car registered in France driven by Cindy Bivard ("Ms Bivard"), a French national, hit Mr Paul Marshall ("Mr Marshall") and Christopher Pickard ("Mr Pickard"), both British nationals, as they were standing behind a Ford Fiesta motor car and its trailer, while it was being attended to by a breakdown recovery truck on the side of a motorway in Thiais, Paris, France. The Ford Fiesta motor car was registered in the UK and insured by Royal & Sun Alliance ("RSA"), and the recovery truck was registered in France and insured by Generali France Assurances ("Generali"). The Peugeot then collided with the trailer shunting it into the Ford Fiesta which in turn was shunted into the vehicle recovery truck. Mr Pickard was thrown forward and landed clear of the vehicles but suffered serious injuries. Mr Marshall's head hit the windscreen of the Peugeot and he ended up with his leg trapped underneath the trailer, and he died at the scene. This is the hearing of a preliminary issue pursuant to the order of Master Leslie dated 17th February 2015.
This case raises points about: (1) the law applicable to an accident involving a number of persons and vehicles which occurred in Thiais, Paris, France on 19th August 2012. This involves a consideration of article 4 of Regulation 864/2007 ("Rome II"); (2) the application of the Loi Badinter, Loi 85-677, enacted on 5th July 1985, ("the Loi Badinter") to the facts of this case, if French law applies; and (3) the proper interpretation of regulation 13 of the Motor Vehicles (Compulsory Insurance)(Information Centre and Compensation Body) Regulations 2003 SI No. 37/2003, ("the 2003 Regulations").
The actions
Two actions were commenced. The first claim was made by Mrs Marshall against the Motor Insurers' Bureau ("the MIB"), the First Defendant in the first action and the Defendant in the second action. Mrs Marshall relied on the 2003 Regulations. The 2003 Regulations make the MIB liable in respect of liabilities of compensation bodies in other EEA states for losses caused by uninsured drivers. The relevant compensation body in France responsible for such losses is the Fonds de Garantie ("FdG"). The MIB denied liability, contending that the FdG would not be liable to Mrs Marshall because under the Loi Badinter Mr Pickard and RSA, as driver and insurer of the Ford Fiesta, and Generali, as insurers of the recovery truck, were liable. By amendment Mr Pickard was added as Second Defendant, and Generali was added as Third Defendant.
The second action was brought by Mr Pickard against the Motor Insurers' Bureau relying on the 2003 Regulations. The MIB deny liability and contend that Generali, as insurers of the recovery truck, are liable to Mr Pickard. There are also various Part 20 proceedings which have been stayed.
The issues at this hearing
By order dated 17th February 2015 Master Leslie directed that certain preliminary issues should be tried. A statement of agreed facts was lodged.
I am very grateful to counsel and their respective legal teams for the excellence of their submissions and assistance in this case. It became clear from the Skeleton Arguments and the oral submissions before me that the formal preliminary issues give rise to three main areas of dispute. The first main issue is whether French or English law applies to the issue of liability for the claim made by Gillian Marshall ("Mrs Marshall") against Mr Pickard, who is insured by RSA. RSA contend that English law applies to the issue of liability for the claim made by Mrs Marshall against Mr Pickard. I should record that it is common ground that the issue of the governing law for any assessment of damages against the MIB is not to be determined by me. This is because the issue was decided by the Court of Appeal in Jacobs v Motor Insurers' Bureau [2010] EWCA Civ 1208; [2011] 1 All ER 844 which was followed by the Court of Appeal in Bloy & Ireson v Motor Insurers' Bureau [2013] EWCA Civ 1543; [2014] Lloyd's Rep IR 75. Those decisions were followed at first instance in Moreno v Motor Insurers' Bureau [2015] EWHC 1002 (QB); [2015] Lloyds' Rep 535 (QB), but a certificate for a leapfrog appeal to the Supreme Court was allowed and on 28th July 2015 the Supreme Court granted permission to appeal. This means that that separate issue will be determined by the judgment of the Supreme Court in Moreno.
The second main issue is if French law applies, whether the Ford Fiesta motor car and recovery truck are "involved" within the meaning of the Loi Badinter, which it is common ground is the applicable French statute. If those vehicles are "involved" it is common ground that RSA, as insurer of the Ford Fiesta, and Generali, as insurer of the recovery truck, are liable to Mrs Marshall, and that Generali, as insurer of the recovery truck, is liable to Mr Pickard.
The third main issue is whether the MIB is liable under the 2003 Regulations. If neither the Ford Fiesta nor the recovery truck were "involved" in the accident, it is common ground that the MIB would be liable to compensate Mrs Marshall and Mr Pickard. If however the Ford Fiesta and recovery truck were "involved" in the accident the MIB contends that it has no liability to either Mrs Marshall or Mr Pickard. This is because the MIB contends that its liability under the 2003 Regulations is "as if it were" the FdG. It is common ground that the FdG's liability is subsidiary, meaning that if there is any road traffic insurer liable for the claims the FdG has no liability. Mrs Marshall and Mr Pickard contend that, on the proper interpretation of the 2003 Regulations, the MIB is liable because the preconditions set out in regulation 13 have been satisfied and regulation 13 provides that the MIB "shall compensate the injured party".
Governing law
It is common ground that the law applicable to the claims is to be determined by Rome II. This is because the accident occurred after 11th January 2009, see the judgment of the Court of Justice of the European Union ("CJEU") in Homawoo v GMF Assurances SA [2011] ECR I-11603; [2012] I.L. Pr.2.
It is common ground that the recitals are a relevant aid to the proper interpretation of Rome II. Recital 6 emphasised that in order to improve the predictability of the outcome of litigation and certainty as to the applicable law, conflict of law rules needed to designate the same national law irrespective of where the action was brought; recital 11 emphasised that the concept of "non-contractual obligation" was an autonomous concept, under European law; recital 14 explained that in order to provide legal certainty and justice in individual cases the regulation provided for a general rule, a specific rule and an escape clause; recital 15 explained that the principle of lex delicti commissi was the basic solution in virtually all member states, but that the application varied and engendered uncertainty; recitals 16 and 17 explained that a connection with the country where the direct damage occurred (lex loci damni) struck a fair balance and should be applied in cases of personal injury or damage to property; and recital 18 explained the inter-relationship between articles 4(1) providing for the general rule, 4(2) as an exception to the general principle "creating a special connection where the parties have their habitual residence in the same country", and 4(3) as an "escape clause", where it is clear from all the circumstances of the case that the tort/delict is manifestly more closely connected with another country.
Article 4 of Rome II provides:
(1) Unless otherwise provided for in this Regulation, the law applicable to a non-contractual obligation arising out of a tort/delict shall be the law of the country in which the damage occurs irrespective of the country in which the event giving rise to the damage occurred and irrespective of the country or countries in which the indirect consequences of that event occur.
(2) However, where the person claimed to be liable and the person sustaining damage both have their habitual residence in the same country at the time when the damage occurs, the law of that country shall apply.
(3) Where it is clear from all the circumstances of the case that the tort/delict is manifestly more closely connected with a country other than that indicated in paragraphs (1) or (2), the law of that other country shall apply. A manifestly closer connection with another country might be based in particular on a pre-existing relationship between the parties, such as a contract, that is closely connected with the tort/delict in question."
Save for Mrs Marshall's claim for dependency which if English law applies is under the Fatal Accidents Act 1976 ("FAA 1976"), it is common ground that the direct damage occurred in France for all of the claims, including Mrs Marshall's claim on behalf of Mr Marshall's estate. In respect of the FAA 1976 claim, RSA submits that the direct damage occurred in the location where Mrs Marshall has suffered her loss of dependency, which is in England and Wales, and RSA relies on the judgment of Arden LJ in Brownlie v Four Seasons Holdings Incorporated [2015] EWCA Civ 665 in support of that proposition. Mrs Marshall, Generali and the MIB all contend that the damage occurred in France, and they rely in particular on the recent opinion dated 10 September 2015 of the Advocate General in Lazar v Allianz SpA C-350/14.
In Brownlie the issues arose in relation to an application to set aside permission to serve proceedings out of the jurisdiction. It was necessary to show, under the Civil Procedure Rules ("CPR") that "damage was sustained within the jurisdiction". Reference was made to Rome II and Arden LJ held (in paragraph 85) that the CPR "should be interpreted consistently with Rome II". Arden LJ recorded that the FAA 1976 claim was a separate statutory cause of action, for independent loss, which was not a derivative claim and therefore held that the relevant direct damage, for the FAA 1976 claim, had been suffered in England and Wales, see paragraphs 86 and 87.
However in Lazar v Allianz SpA Case C-350/14 the Advocate General, having regard to the relevant principles of consistency, foreseeability and certainty, in his opinion to the Court considered that "the damage occurs" for the purposes of a claim such as an FAA 1976 claim where the relevant death occurs. The Advocate General noted that different EEA states took different approaches to the characterisation of a dependency claim. For example it appears that in both England and Italy it is considered that the damage for a loss of dependency occurs in the country where the dependant is situated, but that this is not a European wide approach. The opinion shows that the Advocate General was influenced by the need to avoid different Courts in different EEA states adopting different solutions to applicable law in fatal accident cases, which would lead to a diversity of approach in different jurisdictions, see paragraph 74 of the opinion. It is not yet known when judgment in Lazar will be delivered.
It was common ground that the judgment of Arden LJ on the interpretation of article 4(1) of Rome II was obiter. This was because Arden LJ was considering the proper interpretation of the CPR. It was also common ground that the opinion of the Advocate General had not yet been followed in a judgment by the CJEU and therefore had no formal status other than being persuasive. Given the points made by the Advocate General about the undesirability of different approaches being taken by EEA states to dependency claims there seems to me to be a very real prospect that the opinion will be adopted by the Court.
It was not suggested that I should adjourn this judgment to await the outcome of the judgment in Lazar, and it is not necessary for me to do so. This is because it is not necessary for me to attempt to decide between the opinion of the Advocate General and the approach taken by Arden LJ (which approach was agreed by Bean and King LJJ). This is because I have reached a clear conclusion on the application of articles 4(2) and 4(3) of Rome II to this case. I appreciate that it is important not to turn first to the exception in article 4(2) to a general rule in article 4(1), and it is important not to use article 4(3) as a starting point, and I have attempted not to do that in this case. However it is necessary to look both at articles 4(2) and 4(3) in any event, and this is because it is common ground that, at the least, the claim made on behalf of the estate by Mrs Marshall is, for the purposes of article 4(1), governed by French law.
In relation to article 4(2) RSA submitted that all of the claims made by Mrs Marshall against Mr Pickard are governed by English law. This is because at the time of the accident the habitual residence of Mr and Mrs Marshall and Mr Pickard was in the same country, namely England. Mrs Marshall, Generali and the MIB submitted that article 4(2) of Rome II was an exception to the governing rule in article 4(1), and that as an exception it was to be construed strictly. It was submitted that article 4(2) only applied where there was one person bringing proceedings against another person, and both were habitually resident in the same EEA state. This was because the wording of "person" in article 4(2) was singular. I was shown a number of text books where writers had supported such a strict approach. I do not accept that this proposed interpretation is either reasonable or right. It is correct that article 4(2) is an exception to the new rule set out in article 4(1) of applying the law where the direct damage occurred, but it is an exception based on the legitimate expectation of the parties, as the relevant travaux preparatoires and other materials show. The proposition that a coach crash involving a number of different Claimants should be excluded from the effect of article 4(2) simply because there is more than one injured person is not sustainable. To read the word "person" as applying only to one party involves adopting a particular approach of English law to the construction of limitation or exception clauses while ignoring the fact that this is a European Regulation and subject to the rules of interpretation relating to such Regulations.
In my judgment article 4(2) applies, on the natural wording of the article, to the claims made by Mrs Marshall against Mr Pickard. Most of the potential problems identified with multi party cases which were relied on to justify a very strict approach to article 4(2) are addressed by a proper approach to article 4(3). This is not to elevate article 4(3) into the starting point for any type of case, including multi party cases, but it is to give proper effect to its terms. This is because it would be an unusual result of choice of laws provisions if at the moment that Mr Marshall was hit by the Peugeot motor car his claims against Ms Bivard and Mr Pickard were subject to two different governing laws.
I turn then to article 4(3). The first question to address when dealing with article 4(3) is whether, as a matter of interpretation, the effect of article 4(3) can be used to return to a governing law which might have been required by article 4(1) or 4(2). There are some textbooks which suggest that such an approach is impermissible, because of the words "other than that indicated in paragraphs 1 or 2". However at the end of the day no one argued that such a construction was right. In my judgment the parties were right to accept that a governing law mandated by article 4(1), but excluded by article 4(2), might be required by article 4(3). This is because the wording is "in paragraphs 1 or 2" and not "in paragraphs 1 and 2" (my underlining), and it is possible for article 4(1) and article 4(2) to provide for different answers. There is also no good reason for the interpretation or approach suggested by the textbooks. In my judgment this case provides an illustration of when French law is provided as the governing law under article 4(1), excluded (for part of the claims) under article 4(2), and then required again under article 4(3).
It is also common ground that article 4(3) imposes a "high hurdle" in the path of a party seeking to displace the law indicated by articles 4(1) or 4(2), and that it is necessary to show that the "centre of gravity" of the case is with the suggested applicable law. In this case there are a number of circumstances which, in my judgment, make it clear that the tort/delict is manifestly more closely connected with France than England and Wales. These are: first that both Mr Marshall and Mr Pickard were hit by the French car driven by Ms Bivard, a national of France, on a French motorway. Any claims made by Mr Marshall and Mr Pickard against Ms Bivard, her insurers (or the FdG as she had no insurers) are governed by the laws of France; secondly the collision by Ms Bivard with Mr Marshall and Mr Pickard was, as a matter of fact and regardless of issues of fault or applicable law, the cause of the accident, the injuries suffered by Mr Marshall and Mr Pickard and the subsequent collisions; and thirdly any claims that Mr Marshall and Mr Pickard have against Generali, as insurers of the vehicle recovery truck, are also governed by the laws of France.
I note that Mr Marshall and Mr Pickard had been working together in France for some 2 and a half months, and this was relied on by the parties other than RSA in support of the case that article 4(3) applied, but in my judgment that factor would not have come close to avoiding the effect of article 4(2) if it had stood alone. I also note that the claim against the MIB is made under the 2003 Regulations, which are governed by English law. However it was common ground that this would not affect the applicable law for the underlying accident.
Mr Janusz submitted that it was wrong to take so much account of the fact that Ms Bivard was a French national, because in some cases the driver of the motor car which caused the accident might drive off without being traced. I accept that may occur. However I am bound to take into account "all the circumstances of the case", and this includes the known facts. The fact that other cases may have different and unknown circumstances cannot assist in determining what is the proper answer to all of the circumstances in this case.
In these circumstances the laws of France apply to the liability parts of the claims arising out of the accident that are made against before me.
My findings on what happened in the accident in France
It is common ground that, whatever system of law applies, matters of evidence and procedure, are governed by English law. However Mr Mercer QC submitted on behalf of the MIB that the standard to which a particular fact might need to be proved (namely whether a motor vehicle which had had a collision was nonetheless not "involved", within the meaning of the Loi Badinter) was governed by French law. I reject that submission. This is because article 1(3) of Rome II provides that "this Regulation shall not apply to evidence and procedure, without prejudice to articles 21 and 22". Article 22 provides that the applicable law to the accident "shall apply to the extent that … it contains rules which raise presumptions of law or determine the burden of proof".
The standard of proof is a matter for the national Courts which are determining the issue of liability, whether they are applying the laws of France or their own national law. Rome II specifically identified the burden of proof as being for the law determining the issue of liability and did not mention the standard of proof. There are very good reasons for that. It is clear that the manner in which matters are proved in civil law jurisdictions and common law jurisdictions can be very different, with a much greater emphasis on oral evidence in common law jurisdictions. Rome II was not intended to deal with the manner in which matters are proved, which remains for national Courts applying their own rules of evidence and procedure. This is different from the question about which party has the burden of proof, which is intimately connected to the law governing the issue of liability.
I turn now to consider the circumstances of the accident. So far as the accident is concerned there was a statement of facts, which was agreed by the parties on the basis that it was not comprehensive, and the witness statement from Mrs Marshall was also agreed. I heard oral evidence from Mr Pickard, the Second Defendant in the first action and the Claimant in the second action. All of the other evidence was hearsay in the form of reports and statements. This included: a statement from Luc Lesage Souchon ("Mr Souchon"), the driver of a recovery vehicle; the police report in France, although the report did not seem to be complete because Mr Pickard confirmed that he had produced a diagram when in hospital after the accident and that has not been located; an expert report produced by an engineer expert in the reconstruction of road traffic accidents, Robert Hazan ("Mr Hazan"), as a report for the Court in France which it was common ground could be relied on before me; and reports from a police officer who attended the post mortem of the injuries suffered by Mr Marshall. There was much common ground between the parties, and I have set out the material matters and (where there was not agreement) my findings of fact in relation to the accident below.
On 19th August 2012 Mr Pickard, who was a UK national habitually resident in England, was driving a Ford Fiesta motor car, registration number YB53 MKP, which was pulling a trailer. He was travelling on a motorway in Thiais, a commune in the southern suburbs of Paris. The Ford Fiesta motor car was insured by Royal & Sun Alliance ("RSA"), who are second third parties in both actions.
Mr Pickard had a passenger, Mr Marshall. Mr Marshall was a UK national habitually resident in England, who was married to Mrs Marshall, another UK national habitually resident in England, the Claimant in the first action ("Mrs Marshall"). Mr Pickard and Mr Marshall had carried out welding work at a winery in Couddes, France. They had been working in France since 14 June 2012, and on the day of the accident (19th August 2012) they were returning to the United Kingdom.
The trailer lost a wheel and Mr Pickard pulled over to the hard shoulder. Mr Pickard and Mr Marshall put on fluorescent tabards and put out a warning triangle and made efforts to contact their breakdown recovery service. As they were doing this two police motorcyclists arrived. The police arranged for a recovery company to attend and Mr Pickard and Mr Marshall waited behind a concrete barrier at the side of the motorway.
A recovery truck, registration number 458 AAF 93, driven by Mr Souchon attended the scene. The recovery truck had flashing lights on and Mr Souchon put further cones and triangles out.
Mr Souchon asked Mr Pickard if he had a spare wheel, which he did, and Mr Pickard retrieved that from the back of the trailer, and assisted Mr Souchon in holding the wheel while Mr Souchon tightened the first nut. Mr Souchon then said that they would be away in a couple of minutes and Mr Souchon continued fitting the wheel. Mr Pickard and Mr Marshall then went to secure the back of the trailer, tightening a strap around the back with a ratchet. Mr Pickard recalled being at the back corner of the trailer.
A Peugeot 106 motor car, registration number YB53 MKP, being driven by Ms Bivard, a French national who was habitually resident in France, drove off the A86 on to the hard shoulder. Ms Bivard was asleep, and she was uninsured. Ms Bivard collided with Mr Pickard and Mr Marshall and then the rear of the trailer.
Mr Pickard was thrown by the force of the impact with the Peugeot motor car into the air and he landed on the hard shoulder next to the motorway. I find that Mr Pickard did not make contact with any other vehicles, and this is because there is no evidence of any contact between Mr Pickard and the trailer, Ford Fiesta or vehicle recovery truck. Mr Pickard suffered fractures to his right lower limb and other neck and head injuries.
It appears, from the impact damage to the windscreen on the Peugeot 106, the photographs, and the position in which he was found after the accident, that Mr Marshall's head struck the windscreen of the Peugeot 106. The Peugeot 106 then struck the rear of the trailer, which struck the rear of the Ford Fiesta, which then struck the rear of the recovery truck. The Ford Fiesta then wedged underneath the rear of the recovery truck, meaning that the trailer could not continue travelling forward, and the trailer then came down on Mr Marshall, who had by this time come off the front of the Peugeot 106, and trapped him by his leg. Mr Dougherty QC suggested that I was unable to make findings about the circumstances in which the trailer had come down on to Mr Marshall's leg. I do not agree. The sequence of events can be determined from the photographs, the descriptions of the injuries, the description of the damage, and the calculations carried out by the expert Mr Hazan. The Peugeot must have forced the trailer forward because it hit it from behind, and because unless it had been forced forward the Ford Fiesta would not have collided with the recovery truck. The expert evidence suggests that the collision between the Ford Fiesta and recovery truck took place at considerable speed. It is apparent that the recovery truck prevented the further forward movement of the Ford Fiesta and the trailer, and this appears from the final position of the Ford Fiesta motor car wedged into the back of the recovery truck. This explains why the trailer was in a position to come down onto Mr Marshall's leg.
The medical evidence shows that Mr Marshall had suffered a haematoma on the leg in the area in which he came into contact with the trailer which suggests, and I find, that Mr Marshall must have been alive at a time when he came into contact with the trailer. Mr Marshall died from multiple injuries.
An issue arose as to whether Mr Marshall would inevitably have died because of the result of the impact with the Peugeot 106. The medical evidence shows only that the cause of death was multiple injuries, and I am not able to make any finding that Mr Marshall would have died even if there had been no collision with the trailer. There was no direct contact between Mr Marshall and the recovery truck.
The relevant French law
I heard expert evidence from Dr Frank Benham ("Dr Benham"). Dr Benham qualified in 1984 and obtained a PhD in Civil law in 1987. He has extensive experience of handling accident cases involving foreigners (to France) in France. I also heard expert evidence from Maitre Jerome Charpentier ("Mr Charpentier"). Mr Charpentier has been registered at the French bar since 1987 as an attorney at law and is a personal injury specialist. Both experts were obviously qualified to provide assistance on the French law relating to road traffic accidents, and both experts did their honest best to provide me with assistance. I should record that there were some limitations with the evidence of both Dr Benham and Mr Charpentier that became apparent in the evidence. Dr Benham modified his evidence on the issue of whether the Ford Fiesta was "involved" because of the report from Mr Hazan, but there was nothing in the report from Mr Hazan which seemed to me to change the essential features of the accident and the issue of whether a vehicle was "involved". On the other hand Mr Charpentier had a tendency to assert what a French court was likely to find, without distinguishing between the content of the law, and what was likely to happen in practice. This was most clearly evident in relation to the decision of the Cour de Cassation dated 6th February 2014 ("the kitesurfer case"). Mr Charpentier relied on the result of the case as showing that the Cour de Cassation would find that a motor vehicle was "involved" once there was any contact, and it is true that the Cour de Cassation did find that there was both contact and involvement of the motor vehicle. However it was clear from the decision itself that the Cour de Cassation contemplated the fact that there would be no involvement in circumstances where it could be shown that the kitesurfer had suffered all the relevant injuries before contact with the car. However, notwithstanding these limitations both experts were very helpful, and there was much common ground between them, and I am very grateful for their assistance.
The compensation of victims of road traffic accidents is now governed by the Loi Badinter. It is apparent that the Loi Badinter was enacted by the legislature in France in order to reduce delays in obtaining compensation for victims of road traffic accidents in France. The general scheme of the Loi Badinter is to impose liability to compensate any person injured in a road traffic accident on the insurer of any motor vehicle which is "involved". Once the victim has been compensated the insurers then resolve matters among themselves by reference to the articles of the Civil Code and the concept of fault. I understood from the evidence that in a case where there was no one at fault the relevant insurers would contribute on an equal basis to the loss.
Article 1 of the Loi Badinter provides: "the provisions of this chapter apply to victims of a road traffic accident in which an earth-bound motor vehicle and its trailers or semi-trailers is involved, excluding trains and trams which run on their own tracks, as well as to victims carried under a contract" (underlining added). The original French text reads "est implique". This means that the issue to determine is whether the Peugeot motor car, Ford Fiesta motor car (including the trailer) and recovery truck were "involved" in the accident, and the issue of "involvement" is central to the Loi Badinter.
There was reference before me to statements made by Monsieur Badinter, then Minister of Justice, when introducing the Loi Badinter to the legislature. It is common ground that these statements are an admissible aid to the construction of the Loi Badinter under French law. However there is no need to refer to these statements, because it was apparent that the Cour de Cassation had given guidance on the Loi Badinter and it was apparent that neither expert considered that the original statements to the legislature had enduring value. This was so even though it is apparent that commentators considered that the jurisprudence of the Cour de Cassation on the very wide application of the Loi Badinter had, in some respects, been modified and limited.
It should be noted that the Cour de Cassation does not re-examine the facts and is responsible for the proper interpretation of the law. The Cour de Cassation does not review past cases to determine the extent of the law, but asserts the relevant principles which are to be applied. Cases which are considered to be most important in establishing the relevant limits of the law are published in a bulletin. The names of the case are not given and so the relevant cases have been identified by me by reference to dates and by descriptions (such as the "kitesurfer case"). I have been referred to a number of different decisions and to an extract from a practitioner's textbook but it is not necessary to refer to all of these cases to give my conclusion on the application of French law to this case and my reasons for the findings that I make.
As appears above the Loi Badinter does not refer to the concept of liability but instead requires only that a motor vehicle be "involved". It is common ground that a motor vehicle will be regarded as involved in the accident if it intervened "in any capacity whatsoever". This goes beyond a causal link, but there are still limits because mere presence of a motor vehicle at the time of an accident is not enough. The difficulties lie in determining the precise limits of when a motor vehicle is "involved".
The expert evidence showed that if there was any contact or collision between a pedestrian and a motor vehicle the motor vehicle would be "involved". This would be so even if the motor vehicle was parked, see the decision dated 30th April 2014, unless it could be shown that the person had suffered all the relevant injuries before the collision, see the kitesurfer case and the decision dated 3rd March 1993. The kitesurfer case and the decision dated 3rd March 1993 establish the substantial evidential requirement to show that a motor vehicle is not "involved" within the meaning of the Loi Badinter once there has been contact between a person and a motor vehicle. However, as noted above, this is a matter of evidence and does not alter the standard of proof which is for English law. There will not be contact or a collision if battery acid is spilled from one damaged car on to another, see the decision dated 13th December 2012.
The expert evidence also showed that if there was a multi vehicle accident, any vehicle which collided with another vehicle is involved, having been treated as colliding at the same time and place irrespective of whether one of the motor vehicles collided with the one in which the victim found himself, see the decision dated 7th July 2011. This is so unless it could be shown that the injury to the victim had occurred before the relevant collision with the relevant motor vehicle, see the decision dated 5th November 1998.
Finally the expert evidence showed that a motor vehicle may be involved even if there has been no collision with it (or collision deemed to have occurred at the same time) if it has been involved in any way with the realisation of the damage, see paragraph 289 of the "Dictionnaire Permanent, Assurances" (a loose-leaf practitioners' text on motor insurance and accidents). The best example of this type of case was the decision dated 11th September 2014, referred to by the parties as the "good Samaritan case". In that case there was a road traffic accident between two cars. A pedestrian crossed the road and was hit by another car. The original cars were "involved" within the meaning of the Loi Badinter. Similarly a car which had broken down was "involved" for the purposes of the Loi Badinter when a recovery truck driver was walking back to render assistance and was hit by an unknown vehicle which continued without stopping, as appears from the decision dated 3rd June 2000. (It should be noted that the recovery truck driver was unable to claim against the insurers of the recovery truck because of the principle of French law which prevents a person bringing proceedings against the insurers of the vehicle which they were driving). However there remain limits to the principle. A car which was driving normally one way was not liable to the driver of a motorcycle who had attempted to drive between two lines of traffic and had collided with another vehicle, see the decision dated 8th July 2004.
It is also common ground that under French law the liability of the FdG is subsidiary, meaning that the FdG will not be liable for an uninsured driver if any other insurer is liable under the Loi Badinter. It might be noted that French law on this point is the same as English law relating to the liability of the MIB for uninsured drivers.
Application of French law to my findings about the accident
Having set out my findings on the relevant French law it is necessary to attempt to apply them to the facts of the case. I need to deal with the claims arising out of Mr Marshall's death and the claim of Mr Pickard separately. This is because it is apparent that there were different collisions involved, and because Mr Pickard, as a driver cannot bring proceedings against his own insurers, RSA.
In my judgment the Peugeot motor car is "involved" in the accident involving both Mr Marshall and Mr Pickard. This is because the car collided with both Mr Marshall and Mr Pickard.
In my judgment the Ford Fiesta motor car is "involved" in the case of Mr Marshall. This is because Mr Marshall ended up trapped underneath the trailer at a time when Mr Marshall was alive.
In my judgment the recovery truck was "involved" in the case of Mr Marshall. This is because it was involved within the mechanism of the accident involving Mr Marshall because, if the recovery truck had not been present, the Ford trailer would have travelled further forward and it was prevented from doing so by reason of the presence of the recovery truck. It is not possible to show that Mr Marshall suffered all his relevant injuries before the trailer came down on him, and the evidence shows that the trailer came down on Mr Marshall because it was prevented from travelling forward by the presence of the recovery truck.
In these circumstances both RSA and Generali are liable to Mrs Marshall under French law. In these circumstances under French law the FdG would have no liability to Mrs Marshall. I will need to decide whether the 2003 Regulations provide for a different result.
So far as Mr Pickard was concerned there was no contact between him and either the Ford Fiesta and its trailer or the vehicle recovery truck. However although there was no contact between Mr Pickard and either the Ford Fiesta motor car and the trailer both would have been "involved" in his accident. This is because the trailer lost a wheel which explains why it was present at the time and the loss of the trailer wheel meant that there was something out of the ordinary so far as the Ford Fiesta was concerned, compare the judgment dated 3rd June 2000. However it is common ground that Mr Pickard is not entitled to make a claim against RSA under French law because they were his insurers.
In my judgment the recovery truck was not "involved" in the accident concerning Mr Pickard. This was because there was no relevant collision or contact between Mr Pickard and the recovery truck. The evidence shows that he was propelled into the air by the Peugeot and he was wholly unaffected by the recovery truck. Further, although the recovery truck was present at the time of the collisions there was nothing out of the ordinary in what the vehicle recovery truck had done so far as Mr Pickard was concerned. In my judgment finding liability on the part of the vehicle recovery truck in such circumstances would be an impermissible extension of the relevant French jurisprudence, compare the judgment dated 5th November 1998.
In these circumstances neither RSA nor Generali are liable to Mr Pickard.
The interpretation of the 2003 Regulations
It is common ground that in such circumstances the FdG would be liable to Mr Pickard, and that the MIB is liable to compensate Mr Pickard under the 2003 Regulations.
This leaves only the question of whether the MIB is liable to Mrs Marshall. Mrs Marshall retains a principled interest in this question, notwithstanding my findings on the liability of both RSA and Generali to her, because on the law as it stands as at the date of this judgment the assessment of damages on the part of the MIB will be governed by English law, and the assessment of damages on the part of RSA and Generali will be governed by French law.
The 2003 Regulations were enacted to give effect to the relevant provisions of Fourth Motor Insurance Directive 2000/26/EC ("the Fourth Motor Insurance Directive").
The relevant history of the First, Second and Fourth Motor Insurance Directives is set out in Jacobs at 848b to 850g. I have also been referred to Travaux Preparatoires and other materials relating to the Fourth Motor Insurance Directive. It is necessary only for me to note that the First Motor Insurance Directive required Member States to take all appropriate steps to ensure that vehicles normally based in the territory of a member state were covered by insurance. The Second Motor Directive required Member States to set up or authorise a body with the task of providing compensation, up to limits, for losses caused by uninsured or unidentified motor vehicles. This is sometimes referred to as a guarantee fund, but the materials showed that there was no uniformity about the names to be used for the various funds which were sometimes called guarantee funds and sometimes compensation funds. The Fourth Motor Insurance Directive provided that Member States should establish a compensation body so that nationals who are the victims of road traffic accidents abroad could recover compensation from that compensation body, which compensation body would have a further right of recovery against the compensation body (for an insured vehicle) or compensation or guarantee fund (for an uninsured vehicle) of the Member State in which the accident had occurred.
The Motor Insurance Directives were consolidated into a codified Motor Insurance Directive, 2009/103/EC of 16 September 2009. However this codification did not make any material changes and post-dated the 2003 Regulations, which continue to refer to the Fourth Motor Insurance Directive. I have therefore referred in this judgment to the relevant provisions of the Fourth Motor Insurance Directive, but they are also set out in the Codified Motor Insurance Directive.
The 2003 Regulations provide at regulation 13:
"(1) This regulation applies where – (a) an accident, caused by or arising out of the use of a vehicle which is normally based in an EEA state, occurs on the territory of- (a) an EEA state other than the United Kingdom … and an injured party resides in the United Kingdom, (b) that injured party made a request for information under regulation 9(2), and (c) it has proved impossible – (ii) within a period of two months after the date of the accident, to identify an insurance undertaking which insures the use of the vehicle;
(2) Where this regulation applies – (a) the injured body may make a claim for compensation from the compensation body, and (b) the compensation body shall compensate the injured party in accordance with the provisions of Article 1 of the second motor insurance directive as if it were the body authorised under paragraph 4 of that article and the accident had occurred in Great Britain".
The Second Motor Insurance Directive, referred to in Regulation 13(2)(b) above, provides at article 1(4) as follows:
"Each Member state shall set up or authorise a body with the task of providing compensation, at least up to the limits of the insurance obligation for damage to property or personal injuries caused by an unidentified vehicle or a vehicle for which the insurance obligations provided for in paragraph 1 has not been satisfied. This provision shall be without prejudice to the right of the Members States to regard compensation by that body as subsidiary or non-subsidiary and the right to make provision for the settlement of claims between that body and the person or persons responsible for the accident and other insurers or social security bodies required to compensate the victim in respect of the same accident.
The evidence shows that Mr and Mrs Marshall resided in the UK; that the accident occurred in France, which is an EEA state other than the UK; that the Peugeot 106 is normally based in France, which is an EEA state; that Mrs Marshall has made an appropriate request for information about insurers to the compensation fund in France; and that it has proved impossible, within the relevant time, to identify an insurer. In these circumstances it is common ground that the provisions of Regulation 13(1) of the 2003 Regulations have been satisfied. In these circumstances Mrs Marshall contends that the MIB is liable to make a payment to her under the 2003 Regulations.
The MIB contends that the FdG is not liable to make payments to Mrs Marshall under French law, and that in these circumstances it is not liable, on a proper construction of regulation 13 to compensate Mrs Marshall. This is because regulation 13(2)(b) of the 2003 Regulations requires the MIB to compensate Mrs Marshall "as if it were the body authorised" under article 1(4) of the second Motor Insurance Directive, which is the FdG, and it is common ground that under French law the FdG has no liability to make a payment in this case. Mrs Marshall, who adopted arguments made by Mr Pickard in this respect, submitted that the issue had been decided by the judgment of the Court of Appeal in Bloy, and that the MIB was liable.
The provisions of the 2003 Regulations have been considered by the Court of Appeal in Jacobs and in Bloy. In Jacobs the Court of Appeal held that the assessment of damages under the 2003 Regulations was governed by English law because of the words in regulation 13(2)(b) "and the accident had occurred in Great Britain". This decision was followed in Bloy which held that a cap on the liability of the Lithuanian equivalent of the FdG did not have any effect on the assessment of damages. This was because the matter was to be decided in accordance with English law, and damages were to be assessed in English law which would not have regard to the cap. Those decisions were followed at first instance in Moreno. In that judgment Gilbart J. set out relevant provisions of the Motor Insurance Directives, the travaux preparatoires and the judgments and I refer to those passages, see paragraphs 13 to 62.
In my judgment the effect of both Jacobs and Bloy is to provide that the law governing the assessment of damages where the MIB is liable shall be English law and that caps on those damages will be of no effect. In that respect the 2003 Regulations simply mirrored the position on the law governing an assessment of damages if an English Claimant was able to bring their claim in the Courts of England and Wales before the coming into force of Rome II. This had become easier to achieve once the proper interpretation of the Judgments Regulation had become known, see FBTO v Odenbreit Case C-463/06; [2008] Lloyd's Rep IR 354. Rome II, once it came into force, changed the applicable law governing the assessment of damages but the wording of the 2003 Regulations remained unaltered, and there is nothing in principle to prevent the English legislature requiring the MIB to make a payment of damages which may be more generous (when comparing English damages with Greek damages, as in the case of Moreno) than other EEA states.
However I do not read Jacobs and Bloy as deciding when the MIB would be liable to the Claimant. This is because in both cases it was common ground that the uninsured driver was liable (as in this case) and that the MIB was liable under the 2003 Regulations (which is not this case).
There was consideration in Jacobs about the circumstances in which the MIB would be liable and at paragraph 32 of Jacobs Moore-Bick LJ said that it was "implicit in the scheme of the directive that the victim must be able to establish that the driver is liable to him in respect of his injuries". This is established, and this is because the MIB becomes liable "as if it were" the FdG. The FdG is not liable if there is no liability on the part of the uninsured driver, and (relevant in this case) the FdG is not liable if there are other insurers of motor vehicles who are liable. Mr Chapman, when arguing this point on behalf of Mr Pickard (although in the event he did not need the point because there was no other insurer liable to Mr Pickard), submitted that the 2003 Regulations would not provide much of an advantage to the victim if it was still necessary to determine whether there were other insurers liable for the accident under the law of the relevant EEA state. I do not accept this submission. This is because it is apparent that the right to bring proceedings in this jurisdiction is valuable to any English victim of an overseas accident. This is because that person can instruct legal representatives in their own language, have matters explained to them in their own language, and attend Courts in their own country. This is quite apart from the advantage of getting English damages which is the position under the 2003 Regulations.
In these circumstances the MIB is not liable to Mrs Marshall. This is because the FdG is not liable to Mrs Marshall in circumstances where there is liability to Mrs Marshall on the part of both RSA and Generali under the Loi Badinter.
In these circumstances it is not necessary for me to consider whether the MIB are entitled to rely on the words "as if the accident had occurred in Great Britain", and rely on that part of English law which means that the MIB is not liable if there is another insurer liable in respect of the accident, although it might be thought that this is putting too much weight on to the words for the first of the reasons given by Moore-Bick LJ in paragraph 27 of Jacobs.
For these reasons Mrs Marshall does not have a claim against the MIB under the provisions of the 2003 Regulations.
In these circumstances no issue of making a reference to the CJEU arises. In any event there was not much dispute about the scheme of the Motor Insurance Directives and the issue is one of the proper interpretation of the 2003 Regulations, which is a matter for the Courts of England and Wales.
Conclusion
For the reasons given above: (1) French law applies to the issue of liability of the claims made by Mrs Marshall and Mr Pickard; (2) RSA and Generali are liable to Mrs Marshall under French law and the FdG is not liable to Mrs Marshall; (3) neither RSA nor Generali are liable to Mr Pickard under French law and the FdG is liable to Mr Pickard; (4) the MIB is not liable to Mrs Marshall; and (5) the MIB is liable to Mr Pickard.
The preliminary questions ordered to be tried by Master Leslie are answered as follows: "(a) Is the Second and/or Third Defendant liable to compensate Mrs Marshall?" Yes, both the Second and Third Defendants are liable to compensate Mrs Marshall; "(b) would the French Guarantee Fund (Fonds de Garantie) be liable to compensate the Claimants under French law?" The Fonds de Garantie is liable to compensate Mr Pickard, but it is not liable to compensate Mrs Marshall; "(c) if the French Guarantee Fund would not be liable to compensate the Claimants, is MIB liable to compensate them under the 2003 Regulations?" The MIB is liable to compensate Mr Pickard, but is not liable to compensate Mrs Marshall.
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MR. JUSTICE BLAIR:
This is the claimant's application for an anti-suit injunction in support of an exclusive jurisdiction clause in favour of the English Courts.
The background is a contract in a booking note signed on 5th August 2012 by which the claimant, a company which provides tugboat services, agreed to provide services to the first defendant, the registered owner of a vessel called the Conti Cartagena. The second defendant is the charterer of the vessel.
On 7th August 2012 it appears that an incident occurred while the vessel was being manoeuvred by tugs while in port. Since then, there has effectively been a dispute as to jurisdiction as between the courts in England and the courts in Turkey. The incident happened at a port called Yalova in Turkey. However, the contract contains an exclusive English jurisdiction clause. It reads as follows:
"9(a) The agreement between the Tug owner and the Hirer is and shall be governed by English law and the Tug owner and the Hirer hereby accept, subject to the proviso contained in sub-clause (b) hereof, the exclusive jurisdiction of the English Courts…
(b) No suit shall be brought in any jurisdiction other than that provided in sub-clause (a) hereof save that either the Tug owner or the Hirer shall have the option to bring proceedings in rem to obtain the arrest of or other similar remedy against any vessel or property owned by the other party hereto in any jurisdiction where such vessel or property may be found."
Notwithstanding that clause, proceedings on behalf of the owners were commenced before the Istanbul Courts on 1st August 2013. Jurisdiction was challenged by the claimants. On 13th September 2013, proceedings were commenced in the English Courts.
On 27th November 2013 the defendants issued an application contesting the English jurisdiction. This application was dismissed by the Commercial Court on 28th March 2014. Permission to appeal against that ruling was refused by the English Court of Appeal on 6th January 2015.
Meanwhile, on 8th May 2014, the Commercial Court in Istanbul rejected jurisdiction accepting the validity of the agreement between the parties to refer disputes to the English Courts. That decision was subject to an appeal by the defendants. However, it appears that the claimant's lawyers in this country were not aware of this at the time. They became aware in 2015 and asked by letter of 1st June 2015 that the defendants desist with the appeal in Turkey. This request did not receive an answer and, on 30th June 2015, the claimants brought this application for an anti-suit injunction.
Normally, and for obvious reasons, this kind of application is heard by the court quickly. One matter which the English Court takes into account in considering whether or not to grant an anti-suit injunction is the stage which the challenged proceedings have reached. What appears to have happened in this case is that, since the defendants have been represented in the Commercial Court proceedings in England, the date for the hearing was fixed so as to be convenient for both parties. This led to a hearing date being fixed for 30th October 2015. There was communication between the parties and the court in the ensuing months. It is unnecessary to recount the detail. In the circumstances, the court did not accede to the claimant's request for an expedited hearing date nor did the court accede to the defendant's request for an adjournment of the hearing on 30th October 2015. I note that at this point the defendants were represented by different lawyers.
The appeal in the Istanbul Courts was due to be heard on 27th October 2015. By a letter to the court that day, the lawyers acting for the defendants asked for the hearing due on 30th October 2015 to be adjourned. They did not, however, appear at the hearing of 30th October 2015. The matter came before me on that day and the claimant's position was that the matter should go ahead. The claimants appeared to be confident that the appeal against the decision in their favour in Turkey would be dismissed. In that eventuality, and subject to any further appeal in Turkey, these anti-suit proceedings would fall away. Since the court in Istanbul had heard the appeal by then and a decision was awaited, it appeared to me right to stand the matter over for a short time. The evidence was that the court's decision would be forthcoming within three weeks. I therefore stood the matter over until 20th November 2015. That is the hearing which I have before me this morning.
As on the previous occasion the defendants are not represented. They have sent a further letter to the court, dated 19th November 2015. This letter confirms evidence filed on behalf of the claimants to the effect that the appeal had been allowed. No reasons have been forthcoming at this stage and the letter indicates that the reasoning is expected "in the near future". In those circumstances, the defendant's lawyers "suggest any injunction would not be appropriate".
In the fifth witness statement filed in support of this application on behalf of the claimant, dated 18th November 2015, reference is made to the hearing on 30th October 2015. That witness statement ascribes to myself the proposition that I was "untroubled by the idea that the English Court would grant relief after a successful appeal in Turkey". That was not and is not the view of this court at all. It is unfortunate that, for reasons I have explained at some length, the application for an anti-suit injunction did not come before this court until a few days after the hearing of the appeal in Turkey. If there had not been a good explanation for this timing I do not think that this court would have entertained an application for an anti-suit injunction at all. However, unfortunate though it is, I am satisfied that the mis-timing of this hearing is not the claimant's fault. The problem has arisen because the defendants have continued to pursue proceedings in Turkey notwithstanding the exclusive jurisdiction clause in favour of the English Court.
The principles upon which the court acts in this kind of case are well-established. A party has a right to have the terms of an exclusive jurisdiction clause enforced. The authorities make clear that, absent strong reasons, a party in these circumstances is entitled to have the jurisdiction clause enforced by way of injunction. No reasons, in my view, have been advanced by the defendants which justify ignoring the terms of the contract between the parties. Despite the timing, I am satisfied that this is an appropriate case for an anti-suit injunction.
I should make this plain: This court does not purport in any way to interfere with the process of the Turkish Courts. It acts solely in personam to enforce the terms of a contract which the defendants freely entered into. The effect of the anti-suit injunction is to require the defendants to observe the terms of that contract. That is the ruling of the court.
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His Honour Judge Stephen Davies
His Honour Judge Stephen Davies:
Executive summary
In posts on the Blackpool FC section of an internet website for football fans the defendant made serious allegations of a defamatory nature against each of the claimants, Karl Oyston, Owen Oyston and Blackpool Football Club Limited. If he had confined his posts to legitimate criticism of the claimants' management of Blackpool FC, both in footballing and financial terms, they would have had no basis for complaint, and would not have done. However the allegations went far beyond that, being allegations of a sexual nature and of fraud and corruption. The defendant is debarred from seeking to justify those allegations, because of an order striking out his defence and because of a subsequent order in which he consented to judgment against him. This judgment is to assess the damages to which each claimant is entitled.
Having regard to all relevant factors I assess the damages payable to Owen Oyston and Karl Oyston in the sum of £20,000 each, and the damages payable to Blackpool Football Club Limited in the sum of £1,000. My detailed reasons for reaching those figures appears from the judgment below.
The parties to this case
The first claimant in this case is Karl Oyston. He is the chairman of Blackpool Football Club Limited (for short, "the Company"), which is the legal entity which runs Blackpool Football Club (for short "Blackpool FC") and which is also the third claimant in this case.
The second claimant is Owen Oyston. He is the father of Karl Oyston and is also, through his shareholding in an intermediate company, the sole owner of the Company and, hence, Blackpool FC.
The defendant, Mr David Ragozzino, is a dedicated supporter of Blackpool FC. It is clear that he is passionately aggrieved about the manner in which Blackpool FC has been run by the Oystons and the Company, and has protested against them, both in person at matches and the like, and also by way of postings on internet websites.
The claim
Unfortunately, a number of postings on the Blackpool FC section of one particular website, "fansonline.net", have gone well beyond vigorous criticism about the claimants' management of Blackpool FC in footballing and in financial terms.
In short, the postings complained of include lurid allegations of a sexual nature against Owen Oyston and Karl Oyston, and also allegations of fraudulent and corrupt behaviour against Karl Oyston in his running of Blackpool FC.
The claimants fully accept that they are not entitled to be protected from legitimate criticism of their management of Blackpool FC in footballing or in financial terms. They accept that Blackpool FC's supporters are entitled to express opinions about such matters, in vigorous terms if they so wish. It is the claimants' complaint however that these postings cross the boundary between legitimate criticism, no matter how vigorously expressed, and making serious and untrue defamatory statements of the kind mentioned. In these proceedings the claimants all complain that the defendant has been guilty of defamation and the third claimant also complains that the defendant has been guilty of malicious falsehood.
Mr Ragozzino was of course fully entitled to deny that he was responsible for making these postings, or to contend that they were true or not defamatory. Indeed in a document described as a Defence and Request for Better Particulars dated 8 January 2015 he required the claimants to prove that he was responsible for these postings, and said that once they had done so he would provide a full defence alleging that the statements complained of were justified and were truthful publications of opinion.
However Mr Ragozzino is no longer entitled to raise those defences in these proceedings, for the following reasons:
(1) On 19 May 2015 a procedural order was made by District Judge Moss, entering judgment for the claimants against Mr Ragozzino for an amount to be decided by the court because his Defence had been struck out due to his failure to file a directions questionnaire as previously ordered.
(2) On 13 July 2015, at a hearing before Mr Justice Jay of the claimants' application for injunctive relief in separate proceedings, he consented to judgment being entered against him on the claim, with the determination of the amount of damages to be adjourned, and also submitted to an order restraining him from repeating the statements complained about.
On 19 June 2015 District Judge Moss gave directions for damages to be assessed by the Court at a hearing on 22 October 2015, with provision for the claimants to file and serve witness statements.
Owen Oyston and Karl Oyston produced detailed witness statements in accordance with those directions. They attended court to give evidence, and were cross-examined by Mr Ragozzino. The claimants also produced a witness statement from a Mr Dyer, the financial controller of the claimant, but he failed to attend the hearing and I refused to allow that statement to be received in evidence.
On 24 September 2015 Mr Ragozzino produced what was described as a "Supplementary Defence", responding to the witness statement of Owen Oyston. Amongst other things he denied that he was responsible for the postings and also asserted that he had been duped into entering into the consent order at the hearing before Mr Justice Jay. He also produced and sent to the Court an application to set aside the consent order but, despite being informed that the Court would not accept that application for issue and processing without payment of the required fee or a valid application for fee remission, failed to do either of those things.
At the hearing before me Mr Ragozzino invited me to adjourn the assessment of damages on the basis that he intended to make a proper application to set aside the consent order. I refused to do so.
In the circumstances, whatever Mr Ragozzino may now say about his responsibility for the postings or the circumstances in which he entered into the consent order, unless and until he make a successful application to have the default judgment and/or the consent order set aside he is bound by those orders and I must proceed to assess damages on the footing that it has been determined against him, in part by his own agreement, that he was responsible for the statements made in those postings and that they were untrue and defamatory.
The defamatory statements
I turn now to the defamatory statements complained of. They are contained in postings made on 19 April 2014 and on 13 August 2014.
The defamatory statements made against Owen Oyston
I begin with those made against Owen Oyston. In his case there are two principal areas of defamatory statement.
The first is an assertion that Owen Oyston had, whilst in Thailand, contracted a sexually transmitted disease (STD) which, back in the UK, he had passed on to a number of prostitutes who, in turn, had passed it on to a number of identified football players at the Club, those players subsequently being unable to play football whilst taking certain drugs as part of their treatment for that disease. It is, as Mr Shannon described it, a "scandalous, salacious and pernicious" assertion. The assertion did not originate with Mr Ragozzino; it had been made in explicit terms by a previous post by another person, but was expressly adopted in his first post by Mr Ragozzino, who described it as "100% true". Furthermore, although Mr Ragozzino continued to insist in a number of subsequent posts that it was true, and could be proved to be true, and even though he expressly challenged the claimants to take him to court so that he could prove it with evidence, in fact he has never provided any evidence in these proceedings to seek to show that it was true. Moreover, by entering into the consent order, he is to be treated as having admitted that it was untrue and defamatory.
The second is an assertion that Karl Oyston was "probably the result of rape", thereby asserting that Owen Oyston had probably committed an offence of rape against Karl Oyston's mother. Mr Ragozzino has never even attempted to substantiate this assertion, and again is to be treated as having admitted that it was untrue and defamatory.
It is sensible at this stage to refer to the undoubted fact that in May 1996 Owen Oyston was convicted of and sentenced for an offence of rape and an offence of indecent assault. He was sentenced to a total of 6 years imprisonment. Both offences were alleged to have been committed within a short period of time on the same night on a 16 year old girl. The details of the offences are summarised in the decision of the Court of Appeal (Civil Division) in the case brought by Owen Oyston against the Parole Board to which he refers in his witness statement at [§39]: R (ex p Oyston) v the Parole Board [2000] Prison LR 45. Although he has always denied his guilt of these offences, his appeal to the Court of Appeal (Criminal Division) was unsuccessful. As he accepts, therefore, in his witness statement at [§40], in the eyes of the law he is, and must be treated as, guilty of those offences. Because of the length of that sentence, it is not one to which the provisions of the Rehabilitation of Offenders Act 1974 applies. It follows that Owen Oyston is not entitled to complain, and does not complain, about the fact that Mr Ragozzino in these postings has made extensive reference to this aspect of his personal past.
However it is a statement of the obvious that it does not follow that persons such as Mr Ragozzino, who have an obsessive dislike or even hatred of Owen Oyston are entitled to make other allegations of a deeply unpleasant sexual nature against him, such as those referred to above, in the mistaken belief that because of the fact of those previous convictions anything goes so far as he is concerned.
The defamatory statements made against Karl Oyston
In Karl Oyston's case, there are three principal areas of defamatory statement.
The first is an assertion that he had "probably raped also". The fact that it was qualified by the word "probably", and the fact that no details were ever given, are both irrelevant. It is, again, a scandalous and pernicious allegation, seeking to link Karl Oyston with the conviction against his father. Yet again, it has never been suggested by Mr Ragozzino that it was true and, again, by entering into the consent order, he must to taken to have admitted that it was untrue and defamatory.
The second is a series of assertions that he was involved in fraudulent and corrupt behaviour, generally and particularly in connection with the Club. No details of these assertions were ever given. It is important to note that this is not an assertion about Karl Oyston's management of the Club in financial terms, but a very serious, although completely un-particularised, allegation of involvement in criminal behaviour. Again it has never been suggested by the defendant in these proceedings that they were true and, again, by entering into the consent order, he must be taken to have admitted that they were untrue and defamatory.
The third is a series of assertions linking the assertions against Owen Oyston with Karl Oyston's management of Blackpool FC. Blackpool FC was described as "an absolute shambles" and "a joke". It was said that "These are horrible people including the players and the way males and females have been treated with regard to this will astound you". It is the claimants' pleaded case that the "horrible people" referred to include Karl Oyston and those involved with the Company, and that the way in which people had been treated "with regard to this" plainly referred back to the allegation against Owen Oyston set out in paragraph 16 above. It was not, therefore, simply an assertion about Karl Oyston's management of the Club in footballing or financial terms, but an assertion which indirectly implicated Karl Oyston in some, albeit unspecified, way with these scandalous, salacious and pernicious assertions. Yet again it, by entering into the consent order, Mr Ragozzino must be taken to have admitted that they were untrue and defamatory.
The defamatory statements made against the Company
In the Company's case, the assertions are, effectively, the same as the second and third assertions against Karl Oyston, because the assertions are that the Club was involved in the fraudulent and corrupt behaviour by Karl Oyston and that it was also linked or implicated with the assertions of sexual misconduct against Owen Oyston. Again, by entering into the consent order, Mr Ragozzino is taken to have admitted that they were untrue and defamatory.
The assessment of damages for defamation and/or malicious falsehood – some general principles
I have been referred to the general principles as summarised both in Gatley on Libel and Slander (12th edition) chapter 9 and in Duncan and Neil on Defamation (4th edition) chapter 25, and there is no need for me to set them out in detail in this judgment. I have found particularly helpful the observations made by the Court of Appeal in Cairns v Modi [2012] EWCA Civ 1383 as regards: (i) the need for proportionality in libel awards; (ii) the scope of publication; (iii) the approach towards the need for vindication; (iv) the lack of necessity for a detailed breakdown of the award. The need for proportionality includes not awarding damages for defamation which would be out of all proportion to those awarded for damages for serious personal injuries.
Both in his skeleton argument and in his oral submissions Mr Shannon referred me to a number of reported cases as to the level of damages awarded in defamation actions, to which I have had regard, but it appears to me that since all such cases turn on their particular facts there is no need for me to refer to them individually.
Particular factors relevant in this case to the assessment of damages
The nature and extent of the publication
It is necessary to consider not only the nature and extent of the original publication on the website but also the spread of the assertions by other means.
I accept that there is evidence that the original posts would have been read by a significant number of readers, certainly in the hundreds and, possibly, into the low thousands. It is not possible to be more precise since the website records only the number of posts as opposed to the number of views. Although Karl Oyston sought to estimate the number of views by reference to a comparison of similar websites, there was no hard evidence to back up his assertions. However, as Owen Oyston said in his witness statement [§4], the website serves a tightly focused group of hardcore fans / supporters, and has become the central platform for this group, including as it does activists or protesters against the Oystons and their control of Blackpool FC – the "Oystons out" campaigners. Whilst I am prepared to accept that those reading the posts will have included some people who do not share Mr Ragozzino's entrenched views of the Oystons and their running of Blackpool FC, including those whose attention may have been directed to the posts by others, I have no doubt that the vast majority of readers would already have shared those adverse views.
However in his witness statement Owen Oyston claimed that he was aware that the assertions relating to him had "spread far and wide through the Blackpool and Fylde coast area" [§22], and that many people he knew had asked him about them [§32-34]. He claimed that the players had become aware of them [§23]. He said [§27] that at subsequent football matches there were jeers, chants and abuse from a small number of fans the content of which made it clear that they were aware of the assertions. He claimed that people must have believed that the assertions were true because of the confidence displayed by Mr Ragozzino in their truth. None of this was challenged in cross-examination by Mr Ragozzino. If it was simply not true that these assertions had been taken up at football matches I am sure that Mr Ragozzino would have cross-examined to that effect. I am satisfied that in the fairly small world that is the Blackpool and Fylde coast and, in particular, that section of it which is interested in Blackpool FC and in gossip generally, these assertions would have achieved a relatively wide circulation.
Karl Oyston did not suggest, in the same way that Owen Oyston did, that the allegations against him had been taken up outside the Oystons out campaigners or that they had, for example, been the subject of specific chants or abuse at football matches, or comment by friends, workmates or acquaintances. That is not surprising, because the allegations against Owen Oyston have a very specific factual focus, which will inevitably pique interest, whereas the allegations against him do not.
Their impact upon Owen Oyston
In his witness statement Owen Oyston explained [§34] the deeply upsetting and distressing effect all of this had upon him. Again he was not challenged about this in cross-examination and, again, I am prepared to accept what he says. It is plain that an allegation of this nature, so specific and so salacious, and to do not just with Owen Oyston's private life but also connected to his position as owner of Blackpool FC, is bound to have had a very significant impact upon him. However, I must also bear in mind that Owen Oyston has already had had a long and bitter experience of this sort of thing by reason of his previous convictions. I am not suggesting that this makes it any easier, only that he is not someone to whom this sort of adverse publicity comes as a complete and unexpected shock.
Their impact upon Karl Oyston
In his witness statement Karl Oyston confirmed that he was deeply distressed and humiliated by the allegations made against him. Again he was not challenged about this in cross-examination and, again, I am prepared to accept what he says. It is plain that allegations of this nature will have this effect. However for the reasons given above, namely the lack of extensive republication and the absence of detail in the allegations, and for the reasons given below as to the inherent lack of credibility of the maker of the allegations, I do not consider that they had anything like the same impact as the allegations made against Owen Oyston did upon him. I do not seek to minimise the impact of being accused as a probable rapist, or as fraudulent and corrupt, or of being involved in some (unspecified) way with the allegations against Owen Oyston so far as they touched Blackpool FC, only to say that in my view they would have been, and were, easier for him to shrug off.
Their impact upon the Company
The Company has made a claim for defamation and also a claim for malicious falsehood. Both relate to the assertion that it was involved in fraudulent and corrupt behaviour and that it was linked or implicated in some way with the assertions against Owen Oyston. In the context of this case the claim for malicious falsehood simply means that the Company is contending that these assertions were untrue and that they were made maliciously, and Mr Ragozzino must be taken to have admitted that this is the case. The Company does not plead, or seek to establish, a claim for special damages against Mr Ragozzino, but it does contend that its goodwill and good reputation have been damaged by these assertions, and that it is entitled to substantial general damages as a result.
The Company's difficulty is that it is difficult if not impossible to ascertain what if any commercial damage has been sustained as a result of these postings. That is particularly acute in circumstances where:
(1) Blackpool FC has obviously suffered, and is still suffering, commercially through having been relegated from the Premier League some 3 years ago, and having been relegated to League One last year: see Owen Oyston's witness statement at [§9-10]
(2) Blackpool FC is also suffering commercially through the activities of the "Oyston out" campaigners, including through boycott campaigns and match-day protests, which have little or nothing to do with the particular defamatory conduct for which Mr Ragozzino is responsible: see Owen Oyston's witness statement at [§11-14]
Whilst I note that Owen Oyston asserted in his witness statement at [§24-25] that he believed that there was a connection between the posts and players leaving Blackpool FC, and with difficulties in signing new players, as did Karl Oyston in his statement, I am not satisfied that the claimants have made out a sufficient evidential case for this assertion. No details whatsoever are given, whether by way of witness statements from the footballers concerned or their agents, or even by way of a witness reporting what he or she was told directly by such persons. Again, it is difficult to see how it could have been these allegations, as opposed to the other matters referred to above, which caused or even significantly contributed to the players' decisions to leave or the difficulty in recruiting replacements. Still less has any attempt been made to put a financial value on the impact of this upon the Company.
Although Mr Dyer in his witness statement sought to put some figures on the loss suffered by the Company by reference to these posts and their consequences, and although Karl Oyston purported to adopt those details in his evidence, I am unable to place any weight on that evidence given that: (a) I was not prepared to allow Mr Dyer's statement to be adduced in evidence; (b) no application was made by Mr Shannon (and if it had been I would have refused it) for Karl Oyston to expand upon his witness statement by incorporating the content of Mr Dyer's statement into his evidence; (c) even I should treat this evidence as admissible evidence from Karl Oyston, I am not prepared to accept him as someone with any reliable knowledge of these figures, given that they emanated from Mr Dyer as the financial controller.
In my judgment the highest that it could be put is that there may have been some limited financial effect insofar as there may have been some supporters who were so appalled by hearing of the allegations, whether by seeing the original posts or by their repetition, particularly perhaps by their repetition by the Oystons out campaigners at football matches, that they stopped attending matches thus leading to some loss of revenue. I can see for example that it could be said that supporters with young children might have been sufficiently concerned about these allegations to decide not to attend further matches. However in the absence of any direct or hard evidence to this effect, I am unable to conclude that this could have been anything other than a modest financial impact at most.
Mr Shannon referred me to Gatley at [§9.17], discussing the position of corporate claimants, and in particular the reference there made to the decision of HHJ Parkes QC, sitting as a High Court Judge, in Applause Store Productions v Raphael [2008] EWHC 1721, where he held that notwithstanding the lack of any evidence of financial loss an award of substantial (as opposed to nominal) damages may be justified on the basis of the need to vindicate the claimant's reputation. I accept that the same principle should apply here, although the damages awarded should be considered in the context that the defamatory assertions made against the Company were such as to connect it in only the most ill-defined of ways with the allegations made against Owen Oyston. It is also the case that the Company is not entitled to recover damages on the basis of any distress suffered by their players as their then employees (if that is what they were) or indeed any other employees or officers. It follows, I am satisfied, that the starting point is that such damages should be modest.
Mr Ragozzino's malicious conduct and his conduct of these proceedings.
It is well-established (see Gatley at §9.18 onwards) that damages may be aggravated by the conduct of the defendant both as regards the defamatory statements themselves, in particular if he was motivated by malice in making the assertions, and by his conduct of the proceedings. A claim for aggravated damages was pleaded in this case, relying on the fact that the assertions were published maliciously and on Mr Ragozzino's behaviour after complaint was made, including his failure to apologise.
It is however also now established – see the discussion at Gatley at [§9.20], the editors' view being confirmed by the subsequent decision of the Court of Appeal in Eaton Mansions (Westminster) Ltd v Stinger [2013] EWCA Civ 1308, referred to in Duncan & Neil at [§25.07] – that aggravated damages may not be awarded in favour of a corporate claimant.
I am quite satisfied that Mr Ragozzino has been motivated by malice against the Oystons both as regards the initial posts and as regards his subsequent conduct of this case. If he had limited himself in his posts to genuine, even if intemperate, criticism of the Oystons for their management of Blackpool FC in footballing and in financial terms then he would not have found himself in his current invidious position. I am satisfied that he made these most serious and damaging allegations without having any reasonable basis for thinking that they were true, because he was and remains consumed by hatred for them, and that his subsequent conduct shows that he will stop at nothing to exert pressure on them to achieve what he believes is in the best interests of the football club he supports.
Mr Ragozzino has conspicuously refused to take responsibility for the posts or to apologise. In the Defence he asserted that he would plead "justification and truthful publication of opinion". In fact in his Supplementary Defence he did not seek to do so in relation to the pleaded defamatory allegations of a sexual nature, but did include a number of other allegations, including various allegations, both general and specific, of dishonest and discreditable behaviour against all three claimants, and various allegations of generally discreditable conduct in relation to Owen Oyston.
I have also been referred to further correspondence for which he has been responsible, in particular an email which he sent to Karl Oyston's wife on 20 July 2015, in which he made a series of further statements and insinuations along the same lines as, and in some respects even worse than, the original postings. Mr Shannon rightly described its tone as savage, abusive and obscene. This letter is not of course the subject of a separate action for defamation and, Mr Ragozzino pointed out, it had only been sent by him to one person. Nonetheless it is a matter to which I can and should have regard when assessing damages. The same is true in relation to a whole sheaf of similar correspondence from July 2015 to the present day to which I was referred. Much of it appears to emanate from Mr Steven Reed, Mr Ragozzino's McKenzie friend, but it is clear that in many instances Mr Ragozzino expressly associated himself with it: one example is an email sent on 14 September 2015 to the claimants' solicitor repeating the allegations against Owen Oyston.
It is clear to me from reading this documentation and from observing Mr Ragozzino and Mr Reed in court that he has not been at all well-served by the assistance of Mr Reed as his McKenzie friend, since Mr Reed has been responsible for pouring yet more fuel on the flames rather than assisting Mr Ragozzino to present his defence with suitable moderation. However, unfortunately for Mr Ragozzino, he has allowed himself to be used as a mouthpiece by Mr Reed, and cannot disclaim responsibility for what he has allowed himself to be associated with.
In my view it is quite clear that all of these matters amount to seriously aggravating features.
I should however record that at the hearing itself Mr Ragozzino conducted his cross-examination of Karl Oyston and Owen Oyston in relatively moderate and restrained terms.
The lack of credibility of the accuser
I consider that the seriousness of these defamatory statements must be seen in context. It is readily apparent that these posts were being made by someone, hiding under a disguised name, with an obsessive hatred for the Oystons and their running of Blackpool FC. Their nature and their tone are not such as would inspire any confidence in the credibility of the maker or in the content of the posts. That is plainly a important reason for a lower award of damages, for the reasons given by Lord Neuberger when sitting in the Court of Final Appeal of Hong Kong in Oriental Daily Publisher v Ming Pao Holdings [2013] EMLR 7, in a passage cited and followed by Bean J in Appleyard v Wilby [2014 EWHC 2770 (QB) at [§17] and also referred to with approval in Duncan & Neil at [§25.10].
In his witness statement Karl Oyston made the point that the determined insistence in posts that they are true means that it is not quite so easy to discount them as the "ramblings of an obsessed demented person" [§8]. I accept this as true to some extent, and as limiting the reduction which would otherwise have been appropriate.
The general reputation of Owen Oyston
General reputation is dealt with both in Gatley and in Duncan and Neil. It is clear that a defendant is entitled to adduce general evidence as to the bad reputation of a claimant with a view to reducing the damages awarded, so long as it is relevant to the sector of the claimant's reputation in respect of which the defamatory assertions are concerned. However it is equally clear that, subject to exceptions, evidence of specific acts of misconduct is not admissible.
One well-established exception relevant to Owen Oyston is previous criminal convictions insofar as they are relevant and not treated by the law as spent under the Rehabilitation of Offenders Act 1974.
It is plain in my judgment that Owen Oyston's previous criminal convictions are relevant to the allegations which are the subject of his claim for defamation, since both the allegations and the convictions are to do with misconduct of a sexual nature. It is also plain in my judgment that Owen Oyston must be treated by reason of his previous convictions as having a general bad reputation so far as his sexual conduct is concerned.
However it is also true that Owen Oyston is, otherwise, a man of good character in the eyes of the law, and that the offences for which he was convicted occurred in 1992, over 20 years ago. Mr Ragozzino has not sought to adduce evidence of general bad character in relation to Owen Oyston's sexual conduct and, as I have said, he is not entitled to adduce evidence of specific acts of misconduct, even if he had any such evidence to adduce.
It follows in my judgment that although the damages to be awarded to Owen Oyston must be reduced to a significant extent by reason of his general bad reputation in relation to his sexual conduct, it would not be right to reduce them to a nominal amount in the circumstances of this case. To do so would undermine the function of the law of defamation, and ignore his entitlement to be vindicated in relation to the specific allegations of sexual misconduct in respect of which he has been wrongly and unlawfully defamed by Mr Ragozzino.
The general reputation of Karl Oyston
Both in the Supplementary Defence and at the hearing Mr Ragozzino sought to refer to specific allegations of misconduct as against Karl Oyston. These were not allegations of sexual misconduct, but allegations to do with his general behaviour. In the main, they related to his conduct in relation to Blackpool FC and, specifically, his ongoing disputes with the Oystons out campaigners. One such matter was that, as Karl Oyston accepted, earlier this year he had been found guilty of misconduct and fined £40,000 by the Football Association for sending abusive texts to a fan. I should make it clear however that these abusive texts have no connection to the matters the subject of this claim.
I accept that even though a defendant in the position of Mr Ragozzino is not entitled to adduce evidence of specific acts of misconduct he is entitled to adduce evidence of directly relevant background context: see the decision of the Court of Appeal in Burstein v Times Newspapers Ltd [2001] 1 WLR 579 as summarised in Duncan and Neil at [§25.24]. To be admissible that evidence must be directly relevant to the subject matter of the defamation or to the relevant sector of the claimant's reputation, so as to avoid a real risk of damages being assessed on a false basis. Having heard these matters being ventilated by Mr Ragozzino in cross-examination of Karl Oyston, I am satisfied that they come nowhere near establishing either general bad character nor are they directly relevant to the subject matter of the defamation or to the relevant sectors of Karl Oyston's reputation, namely his sexual conduct and his honesty and probity in his business dealings. Accordingly, I disregard them.
Conclusions
I must consider the position of each of the claimants separately.
All of the allegations of sexual misconduct are appalling and must be viewed as extremely serious. The allegations of fraud and corruption against Karl Oyston are also extremely serious to him. The allegations against Karl Oyston and the Company as regards their involvement in Owen Oyston's sexual misconduct are serious, but less so having regard to their non-specific nature. All three of the claimants are entitled to substantial damages by way of vindication.
I consider that the allegations against Owen Oyston achieved a wider publication and interest, and caused him greater distress, than did the allegations against Karl Oyston. However I also consider that his damages must be reduced because of his general bad reputation so far as his sexual conduct his concerned.
Both Owen Oyston and Karl Oyston are entitled to aggravated damages by reference to Mr Ragozzino's malice and conduct of the case.
The Company is entitled to substantial damages, but only modest damages.
The first claimant, Karl Oyston, is entitled to damages assessed in the sum of £20,000.
The second claimant, Owen Oyston, is entitled to damages assessed in the sum of £20,000.
The third claimant, Blackpool Football Club Limited, is entitled to damages assessed in the sum of £1,000.
All remaining matters will be addressed once this judgment has been handed down.
Anonymisation
At the hearing I declined to accede to an order imposing some restriction on the reporting of the allegations the subject of the claim. To do so would have been contrary to principle. I am however satisfied that there is no justification for allowing the names of the two football players referred to in the Particulars of Claim from coming into the public domain, and therefore order that pursuant to CPR 39.2(4) the names of the two players stated in paragraph 9 of the Particulars of Claim are not to be disclosed and, further, that pursuant to CPR 5.4C no person shall be given access to the Particulars of Claim on the court file unless and until it has been anonymised by their being referred to as AB and CD respectively, for which purposes the claimants shall within 7 days file an amended anonymised version of the Particulars of Claim, stating on its face that it has been anonymised pursuant to this order.
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MR JUSTICE SINGH:
After I had delivered my oral judgment this morning on the defendant's applications, an application was made on behalf of the claimant to amend his particulars of claim. As I understand it, no previous notice had been given of that, but in any event those representing the defendant have been given some time and have been able to deal with the application to amend after a short adjournment.
The application to amend would have the following effect. Paragraph 13 of the particulars of the claim would be amended to include a further sentence:
"Furthermore, by reason of the conduct specified in paragraphs 10 and 11 herein, Messrs Nicholls, Bittar and Curtler acted in bad faith and it is properly to be inferred that the process, which was the subject of the misleading and untrue statements was equally carried out in bad faith."
Paragraph 19 would be amended to include a similar passage in relation to the process which related to the 2009 bonus award. It is not necessary to spell out its terms for that reason. Paragraph 20(2) would be amended in subparagraph (b) to add the words at the end in "breach of the document of fair dealing". It would also be amended to include a new subparagraph, given the letter (d):
"It is properly to be inferred from the conduct as set out at paragraphs 10, 11, 16 and 17 above and the inferences properly to be drawn there from as set out in paragraphs 13 and 19 above that the exercise of discretion in awarding the claimant the bonuses set out at paragraphs 9 and 15 above was irrational and/or perverse and/or demonstrated a lack of fair dealing in breach of the implied term of trust and confidence."
The power to amend is contained in CPR 17.1. My attention has fairly been drawn to the provisions of CPR 17.4 also because it is properly recognised on behalf of the claimant that at least part of this claim, that relating to the 2008 award, might be said to be outside the normal six year limitation period. Nevertheless, the court is invited to allow the amendments even and to the extent that they may be outside the limitation period.
Although the application has been made late in the day, it is submitted on behalf of the claimant that the court has power to allow such an amendment even at this late stage, although it is fairly recognised that the matter is within the court's discretion.
An example of where the Court of Appeal was prepared to exercise such a discretion has been drawn to my attention, name its decision in Cook v MSHK Limited [2009] IRLR 838. At first instance in that case, Burton J had struck out paragraphs 32.2 to 32.5 of the claim on the basis that the claimants had affirmed alleged repudiatory breaches of the contract and could not now claim for relief in respect of them. He allowed paragraphs 32.1 to 32.5 and 32.6 to proceed to trial. The defendant appealed against that decision, arguing that the judge should have struck out the entire claim. The claimants applied for permission to cross-appeal in relation to the other matters. The principal judgment was delivered by Rimer LJ.
As I understand it, both from the terms of the judgment and also from what Mr Hochhauser QC has informed me, he having appeared also in that case, what happened was that the Court of Appeal reserved its judgment and in the normal way circulated a draft of its judgment. As appears from paragraph 6 of Rimer LJ's judgment, an issue then arose which appeared not to have been addressed by the court in its draft judgment. Accordingly, there were further submissions, including a short further hearing. There was in that context an application made to amend the particulars of claim.
At paragraph 83 of his judgment, Rimer LJ noted that paragraph 32.6, as he interpreted it, does not allege the case that the judge at first instance and the claimants derived from it. Therefore this raised the rhetorical question "what is to be done?" He noted that no application for permission to amend was made at the hearing, even though the interpretation of paragraph 32.6 was expressly in question. On the other hand, in the course of the exchange of written arguments following the hearing, the claimants did belatedly seek permission to amend that paragraph if, contrary to their submissions, the court should disagree that it bore what was known in the case as the wider interpretation. For that, see in particular Rimer LJ's judgment at paragraph 73, contrast paragraph 74.
At the end of the day, as is clear from paragraph 86 of the judgment, Rimer LJ was not persuaded that it would be unjust to allow an amendment even at this stage. He observed that:
"The trial is some way off and the parties will have plenty of time to prepare for this issue. Whilst the adding of another string to the claimants' bow will obviously be unwelcome to Mr Cook, that by itself is no ground for refusing to permit the proposed amendment."
He continued:
"I do not accept that to allow it would be 'manifestly unjust'. In principle, I consider that, subject to the usual costs consequences of a permitted amendment, the claimants should be allowed to amend paragraph 32.6 so as to expand it to incorporate what I have referred to as the wider interpretation."
As Mr Hochhauser fairly accepts, each case depends on its own facts and the matter is one within the court's discretion.
In the circumstances of the present case, I am not prepared to exercise that discretion to permit this amendment to be made. First, I accept the submission made on behalf of the defendant by Mr Jeans QC that the general principle is that an allegation of bad faith should only be made on clear and cogent evidence. That is generally true with all pleadings, but it is particularly reinforced in the context of applications for late amendments, see the White Book for 2015 at volume 1, page 568 and the commentary at 17.2.6:
"Given the purpose of the statement of truth verifying an amendment ... a party will not be permitted to raise by amendment an allegation which is unsupported by any evidence and is therefore pure speculation or invention."
Reference is made to the decision in Clarke v Marlborough Fine Art (London) Limited [2002] EWHC 11.
It is instructive in my judgment, as Mr Jeans has submitted, to note that, although these amendments have been placed before the court at this late stage in draft form, no further evidence has been filed by the claimant. This leads me on to my second point. Again, I accept the submission of Mr Jeans that not only is there no evidence supporting the allegation of bad faith in relation to the process leading up to the decisions to make the awards for 2008 and 2009, and I stress that that has to be the relevant matter to which the bad faith would go, but the claimant himself has never deposed that he even believes that that process was tainted by bad faith. He certainly gives no such clear statement in the course of his lengthy witness statement dated 16 October 2015. As I have said, he has not deigned to assist the court by filing any further evidence in support of his now application to amend the pleadings expressly to assert bad faith in that process and I again emphasise that it is that process which is material for this purpose. I stress that it is not good enough, in my judgment, to have alleged, as he did in his original pleading and the evidence filed in support of that pleading, that there were misleading statements or even that lies were told to him in relation to post decision events.
I have already, in the context of my substantive judgment in this case, rejected the claimant's arguments, in particular his argument under what I earlier described as issue 2. I do not accept Mr Hochhauser's submission that there is implicit within an allegation of breach of an implied term as to rationality, which was the subject of issue 2, and that there is also embraced within that, an allegation of bad faith.
In accordance with my earlier judgment, if there is such an allegation to be made, it has to be set out in plain terms. That is what one would expect if these were judicial review proceedings and, as I have already said, there is a close analogy which the courts today draw between judicial review proceedings and this sort of case.
Finally for present purposes, I note that Mr Hochhauser has submitted to me that there is no difference in the factual landscape. He asks rhetorically could there have been any objection to allowing this amendment, if it had been at or around the time of the original pleading. I respectfully disagree with that submission. In my judgment there is a fundamental difference in the factual landscape which was invoked to support the original grounds, which I have dealt with at length in my substantive judgment and this late amendment. In particular, as I have stressed, the crucial difference is between alleging that there were lies told, for example, after the event and alleging that there was bad faith on the part of the defendant in the very process prior to and leading up to the relevant decisions to make bonus awards in respect of the years 2008 and 2009.
For all those reasons, this application is refused.
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MR JUSTICE SINGH:
Introduction
These are applications made by the defendant to strike out the claim and/or for summary judgment in favour of the defendant.
The claimant was at all material times employed by the defendant bank. The claimant was initially employed by the defendant between 2001 and 2003 but was made redundant. For present purposes, the claimant started his employment with the defendant in or around February 2006. At all material times he was employed to work in the defendant's money market derivatives desk within its global finance department. He relies in his claim on alleged breaches of his contract of employment. He contends that the defendant breached both an express term and implied terms of that contract in relation to the payment of discretionary bonuses in respect of the years 2008 and 2009.
The pleadings
I turn to the claimant's particulars of claim. At paragraph 3 it is averred that the claimant was employed by the defendant from February 2006 pursuant to a contract of employment contained in: a letter from the defendant to the claimant dated 11 January 2006; the terms and conditions contained in the company and employee handbook dated 1 November 2005; and the compliance manual.
At paragraph 5, it is stated that the claimant claims against the defendant in respect of the defendant's breaches of contract in the award of discretionary bonuses for each of the 2008 and 2009 bonus years, each of which awards was inter alia irrational or perverse in breach of the express term as set out at paragraph 6;in breach of the implied term as set out in paragraph 7(1) and in breach of the implied term of trust and confidence as set out at paragraph 7(2).
As I have mentioned, there is reference in paragraph 5 to an express term of the contract. That is set out at paragraph 6 of the particulars of claim and reads as follows:
"Incentive Awards
All employees are eligible to be considered for an annual Discretionary Incentive Award. Details are specified in the Handbook (page 23). The Company reserves the right to deliver a percentage of the Incentive Awards (whether Guaranteed or Discretionary) under any applicable DB compensation plans that are in effect at the time of the award. The portion of your Incentive Award under DB compensation plans will be determined in a manner broadly consistent with that applied to your peers at similar levels of compensation and taking into account any other factors that the Company determines are relevant in a given year for each business."
As I have said, paragraph 5 of the particulars refer to implied terms which are then set out at paragraph 7 as follows:
"(1) The defendant would not behave arbitrarily, capriciously or inequitably in matters relating to remuneration and, in particular, it would exercise its discretion as to whether to award a bonus to the Claimant and, if so, the amount of that award, in good faith and in a manner which was not irrational or perverse. It was, inter alia, an incident of the said implied term that the Defendant would treat comparable employees in a similar fashion, including as to the amount of their awards, when exercising its discretion.
(2) The Defendant would not, without reasonable and proper cause, act in a manner that was likely to destroy or similarly to damage the relationship of trust and confidence to be expected between the Claimant and the Defendant as employer and employee. It was, inter alia, an incident of the said implied term that the Defendant would give the Claimant proper reasons for his bonus awards, and further that such reasons would be truthful and not misleading."
I will for the sake of convenience during the course of this judgment refer back from time to time to those terms. It is important to recall their full and exact terms even though they may be summarised for ease of exposition more briefly.
The particulars of claim then go on to set out the claimant's case so far as it relates to the 2008 bonus year at paragraphs 8 to 13. It is said at paragraph 8 that, in respect of that year, the claimant generated profits of around £133 million. At paragraph 9 it is said that, on or around 4 February 2009, the claimant was informed by Mr Nicholls (head of global finance and forward foreign exchange) that he was being awarded a total bonus for the relevant year of 1,275,685 euros (in other words around 1 percent of the profits which he had generated that year).
At paragraph 10 it is stated that Mr Nicholls said or around 4 February 2009 to the claimant that:
(1) a material factor in the exercise of the discretion to award him that bonus had been the losses that the bank had made in areas outside the money market derivative desks;
(2) all members of the money market derivatives desk had been treated similarly and that they were all receiving reduced awards because of losses that had been incurred elsewhere;
(3) the claimant was "lucky" that he was not a managing director, because the more senior one was the bigger reduction one suffered in the bonus award. At paragraph 11 it is said that the matters set out at paragraphs 10(1) and (2) were also communicated by a Mr Curtler and a Mr Christian Bittar, to whom there will be more reference later.
At paragraph 12 it is averred that in fact, contrary to the statements made to the claimant, it transpired that for the 2008 year a Mr Carl Maine received a total bonus for the 2008 year of around 38 million euros based upon a profit generated by him of around 479 million euros. It is said that he therefore received a bonus equating to 8 per cent of the profits he generated that year. It is also averred that Mr Bittar received a bonus award of around 84 million euros based upon a profit generated by him for that year of 766 million euros. It is said that he therefore received a bonus equating to 11 per cent of the profits he generated.
Accordingly, at paragraph 13, it is averred that the statements made by the relevant persons were deliberately misleading and untrue, those statements being expressly said to be the ones set out at paragraphs 10 and 11 of the pleading.
Similar averments are made in respect of the 2009 bonus year at paragraphs 14 to 19. It is not necessary for present purposes to rehearse those in detail. They are well-known to the parties and should be read in conjunction with this judgment.
Under the heading "Breaches of contract", at paragraph 20 of the particulars of claim it is alleged that in acting as aforesaid, and in particular in awarding bonuses to the claimant in the sums awarded to him in respect of each of the 2008 and 2009 bonus years, the defendant:
(1) breached the express term of the claimant's contract set out at paragraph 6 and in particular the obligation to treat him in a manner broadly consistent with his peers;
(2) breached the implied terms set out at paragraph 7. In particular:
(a) it was irrational and/or perverse and/or a breach of the implied term of trust of confidence
(i) to award the claimant bonuses in the sums that it did, having regard inter alia to the profits that he generated that year and the bonus awards made to Mr Maine and/or Mr Bittar and/or
(ii) to make those bonus awards without meaningful or rational analysis of the amounts that should be paid and/or
(b) it was a breach of the implied term of trust and confidence to fail to give a proper, complete and accurate explanation and reasons for the awards made to the claimant and to make deliberately misleading and false statements as to the manner in which he and others had been treated and/or
(c) if and insofar as the defendant paid formulaic and/or guaranteed bonus awards to inter alia Mr Maine and/or Mr Bittar, it was a breach of the implied term of trust and confidence to pay such formulaic and/or guaranteed bonus awards (inter alia to Mr Maine and/or Mr Bittar) in such sums as to reduce to a disproportionately small sum the amount available to be paid to other employees, including to the claimant, who was entitled to be considered for discretionary bonus awards in each of those years.
Under the heading "Loss and damage", at paragraph 21 of the particulars of claim, it is alleged that, by reason of the defendant's breaches of contract, the claimant has suffered loss and damage in that he should have received substantially larger bonus awards for each of the 2008 and 2009 bonus years.
The defendant has filed a defence to that claim and the claimant has filed a reply. The claimant has also made a request for further information dated 9 July 2015. A response was made by the defendant on 28 August 2015. On the same date the defendant made the present applications to the court.
Relevant legal principles
The legal principles which govern the two applications before the court are well established. The power to strike out a statement of case is set out in CPR 3.4. At subparagraph (1) it is made clear that reference to a statement of case includes reference to part of a statement of case. Subparagraph (2) states that the court may strike out a statement of case if it appears to the court (a) that the statement of case discloses no reasonable grounds for bringing the claim. That is the provision upon which the defendant relies for present purposes.
The power to award summary judgment is to be found in CPR 24.2, which, so far as material, states that:
"The court may give summary judgment against the claimant ... on the whole of the claim or on a particular issue if-
(a) it considers that:
(i) that the claimant has no real prospect of succeeding on the claim or issue ... and
(b) there is no other compelling reason why the case or issue should be disposed of at a trial."
The relevant principles were summarised by Floyd LJ in TFL Management Services Limited v Lloyds TSB Bank Plc [2014] 1 WLR 2006 at paragraphs 26 to 27. In that passage, Floyd LJ referred to an earlier decision of the High Court in Easy Air Limited (Trading as Open Air) v Opal Telecom Limited [2009] EWHC 339 (Ch) in the judgment of Lewison J, as he then was, at paragraph 15. For present purposes, I would set out the relevant principles which are summarised without citation of the authorities which are referred to. They are familiar to the parties and of course the whole of that passage should be read as if it were set out in this judgment. Those principles were summarised in the following way:
" .. the court must be careful before giving summary judgment on a claim. The correct approach on applications by defendants is, in my judgment, as follows:
i) The court must consider whether the claimant has a 'realistic' as opposed to a 'fanciful' prospect of success ...
ii) A 'realistic' claim is one that carries some degree of conviction. This means a claim that is more than merely arguable ...
iii) In reaching its conclusion the court must not conduct a 'mini-trial'...
iv) This does not mean that the court must take at face value and without analysis everything that a claimant says in his statements before the court. In some cases it may be clear that there is no real substance in factual assertions made, particularly if contradicted by contemporaneous documents ...
v) However, in reaching its conclusion the court must take into account not only the evidence actually placed before it on the application for summary judgment, but also the evidence that can reasonably be expected to be available at trial ...
vi) Although a case may turn out at trial not to be really complicated, it does not follow that it should be decided without a fuller investigation into the facts at trial than is possible or permissible on summary judgment. Thus the court should hesitate about making a final decision without a trial, even where there is no obvious conflict of fact at the time of the application, where reasonable grounds exist for believing that a fuller investigation into the facts of the case would add to or alter the evidence available to a trial judge and so affect the outcome of the case …
vii) On the other hand it is not uncommon for an application under Part 24 to give rise to a short point of law or construction and, if the court is satisfied that it has before it all the evidence necessary for the proper determination of the question and that the parties have had an adequate opportunity to address it in argument, it should grasp the nettle and decide it. The reason is quite simple: if the respondent's case is bad in law, he will in truth have no real prospect of succeeding on his claim or successfully defending the claim against him, as the case may be. Similarly, if the applicant's case is bad in law, the sooner that is determined, the better. If it is possible to show by evidence that although material in the form of documents or oral evidence that would put the documents in another light is not currently before the court, such material is likely to exist and can be expected to be available at trial, it would be wrong to give summary judgment because there would be a real, as opposed to a fanciful, prospect of success. However, it is not enough simply to argue that the case should be allowed to go to trial because something may turn up which would have a bearing on the question of construction ... "
To that summary of principles, Floyd LJ added the following observation at paragraph 27 of his judgment:
"... the court should still consider very carefully before accepting an invitation to deal with single issues in cases where there will need to be a full trial on liability involving evidence and cross examination in any event, or where summary disposal of the single issue may well delay, because of appeals, the ultimate trial of the action ... Removing road blocks to compromise is of course one consideration, but no more than that. Moreover, it does not follow from Lewison J's seventh principle that difficult points of law, particularly those in developing areas, should be grappled with on summary applications; ... Such questions are better decided against actual rather than assumed facts. On the other hand it may be possible to say that the trajectory of the law will never on any view afford a remedy ... "
On behalf of the claimant at the hearing before me, and in a very helpful skeleton argument, I was also reminded of the following principles set out at paragraph 18 of that skeleton argument. First, the criterion "real" is not one of probability, it is the absence of reality; see Lord Hobhouse in Three Rivers District Council v Bank of England (Number 3) [2003] 2 AC 1 at paragraph 158. Secondly, an application for summary judgment is not appropriate to resolve a complex question of law and fact, the determination of which necessitates a trial of the issues having regard to all the evidence; see the notes in the White Book at paragraph 24.2.3 and the decision of the High Court in Apovdedo Nv v Collins [2008] EWHC 775 (Ch). Thirdly, in relation to the burden of proof, the overall burden of proof rests on the applicant to establish that there are grounds to believe the respondent has no real prospect of success and there is no other reason for trial. The standard of proof required of the respondent is not high; it suffices merely to rebut the applicant's statement of belief. Fourthly, the facts must be presumed in the claimant's favour. My attention in that regard was particularly drawn to the recent judgment of Jay J in James Bowen v Commissioner of Police for the Metropolis [2015] EWHC 1249 (QB) at paragraph 3, where he stated:
"In line with well established principles, discussed at great length below, the evidence cannot be tried at this stage and the facts must, unless plainly contradicted by insurmountable material or otherwise wholly fanciful, be assumed in the claimant's favour."
Evidence
The court has before it, in support of the present applications, witness statements filed by Mr David Nicholls and Mr Steven Ward dated 26 and 28 August 2015 respectively.
I will briefly go to the first witness statement of Mr Ward initially. At paragraph 5 he states that he is the bank's global HR (Human Resources) business partner for the corporate banking and securities division and regional head of HR for the UK. He holds the corporate title of managing director. He has been employed by the bank since 1996. During the period to which this claim relates, that is 2008/2009, he was global HR business partner for global markets.
At paragraph 6 he makes it clear that he understands that the claimant worked as a trader within the global finance and foreign exchange (GWFX) business unit. It would appear therefore that he has no personal knowledge of the claimant.
At paragraph 12 he makes it clear that he was not involved in deciding the amounts of variable compensation (VC) to be awarded to the claimant for 2008 and 2009 and therefore he is not in a position to be able to comment on the decision making in this particular case.
At paragraphs 7 and 8, Mr Ward outlines for the benefit of the court the general structure by which compensation was payable at the relevant time. He states that compensation at the bank was made up of fixed pay (largely salary) and variable compensation (cash awards and, in circumstances where awards are significant, restricted cash awards and restricted equity awards, together known as deferred compensation). At paragraph 8 he informs the court that, with a few notable exceptions, to which he refers later in his witness statement, VC awards were discretionary. Accordingly it is clear that he uses the term VC or variable compensation awards to include not only discretionary awards but other types of award to which I will return.
At paragraph 14 of his first witness statement, Mr Ward states that in 2004 the bank commissioned a report from a management consultancy to look at market practice with regard to formula arrangements and he says that this report demonstrated to the bank that similar arrangements existed at other financial institutions. In summary, he states, the report concluded that formula deals were in use at hedge funds and there was a developing practice for their use at competitor banks. The data revealed percentage arrangements of up to 25 per cent of profits, the median being 17 per cent for investment banks and 15 per cent for universal banks and hedge fund.
Mr Ward states at paragraph 13 of the same statement that the majority of employees at the bank were considered for a discretionary VC award but had no contractual right to one. A small number of employees did have contractual VC arrangements. He then goes on to describe the two main types of contractual arrangement in the relevant period which also reflected market practice at the time. The first of those was minimum guarantees. The second, which is relevant to the present proceedings, was formula based contractual arrangements. As he states at paragraph 13(b) of his statement, these were the type of arrangements that were granted to Mr Bittar and Mr Maine in the present case. He states that these were only offered in exceptional circumstances.
I turn briefly to the first witness statement of Mr Nicholls at this stage. At paragraph 4 he states that he worked for the bank for 16 years from April 1996 until January 2013. From December 2006 until July 2008, he held the position of head of global finance Europe. From July 2008 until June 2012, he held the position of global head of what he refers to as "core global finance and FX forwards". From December 2006 to June 2012, and therefore during the relevant time, he reported to a Mr Alan Cloete, who was at the relevant time global head of global finance and foreign exchange.
In paragraph 8 he describes the VC award process in broad terms for the performance years 2008 and 2009 in lettered subparagraphs (a) through to (f), which it is unnecessary to set out, but which are familiar to the parties and should be read with this judgment. At paragraphs 9 to 12, Mr Nicholls sets out his evidence in relation to individual discretionary VC award decisions. At paragraph 9 he says that there were no minimum or maximum values imposed, nor did he apply any fixed formula or mechanism for determining the appropriate level of VC to award to particular individuals. At paragraph 10 he states that individual VC decisions were heavily influenced by the overall performance of the bank, the global markets division and the performance of the GFFX business unit as a whole as this would affect the level of bonus pool available to that unit and to each product group. When considering the level of discretionary award to allocate to a particular employee within each team, he says that he considered a number of different factors, including individual performance. This included both financial and non-financial performance (see paragraph 11 of his statement). At paragraph 12 of his statement he says that he also considered factors such as the strategy of the business going forward and the need to incentivise, and I would emphasise this, or ensure particular traders were retained.
At paragraph 16 he makes it clear that in 2008 and 2009 both Mr Bittar and Mr Maine were not eligible to be considered for a discretionary VC award as they had contractual arrangements under which they were entitled to a VC award based on a formula. I will return later in this judgment to his evidence in relation to those individuals more particularly.
The court has before it, in opposition to the present application, a witness statement filed by the claimant dated 16 October 2015. Finally, it has the second witness statements of both Mr Nicholls and Mr Ward, dated 3 November 2015.
Application of the above principles to the facts of this case
Issue 1: construction of the express cause
The claimant accepts that Mr Bittar was not a "peer" of his, but he contends that Mr Maine was. He contends that there was a breach of the express clause set out at paragraph 6 of his particulars of claim because of what he alleges was the inconsistent way that he and Mr Maine were treated in the relevant years when it came to the payment of bonuses.
The claimant submits that even this issue, which the defendant asserts is one of pure construction, is not one that should be disposed of at this stage and that it should be permitted to proceed to trial. In particular, the claimant submits that the construction of the clause is not straightforward and that further the factual context is relevant to the question of construction. He relies in that regard upon Rainy Sky SA v Kookmin Bank [2011] 1 WLR 2900. In his judgment Lord Clarke JSC said at paragraph 21:
"The language used by the parties will often have more than one potential meaning. I would accept the submission made on behalf of the appellants that the exercise of construction is essentially one unitary exercise in which the court must consider the language used and ascertain what a reasonable person, that is a person who has all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract, would have understood the parties to have meant. In doing so, the court must have regard to all the relevant surrounding circumstances. If there are two possible constructions, the court is entitled to prefer the construction which is consistent with business common sense and to reject the other."
I do not accept those submissions on behalf of the claimant and prefer the submissions made on behalf of the defendant.
The clause and in particular the phrase on which the claimant relies and places emphasis in this case about broad consistency cannot be read in isolation. It needs to be read in the context in which it appears and having regard to the clause as a whole. The crucial phrase is "portion". That is a reference to the defendant's restricted cash plan and its equity plan for the relevant year. I was shown the plans for the relevant years. The documents are in materially the same terms. By way of example, the restricted cash plan, which had the effective date 1 January 2009, at paragraph 4 in particular. Paragraph 4.1, which is headed "General" states:
"The Award represents a contingent right, granted by the legal entity which employs the Participant on Award Date, subject to the terms and conditions in these Plan Rules, to receive a payment of the value of an Award following the Vesting Date."
Paragraph 4.5, which is headed "terms", states that awards are subject to the following terms and that includes, at subparagraph (b), the vesting date. Subject to other provisions, that will be such date or dates as the committee shall determine at the award date and will be stated on the award statement. There are similar provisions in the other documents which it is not necessary to recite for the purposes of this judgment. They are familiar to the parties.
It is also important, returning to the express clause itself, to note that it refers to peers at a similar level of compensation, but that does not mean any peer, for example someone working in the same desk. Furthermore, the express clause itself recognises on its face that there may be some bonuses which are guaranteed in contrast with those which are discretionary. Further, the clause again on its face recognises that the defendant will be entitled to take into account any other factors which it determines are relevant in a given year for each business.
It is also helpful in my view to look at the terms of the handbook, the 2007 version, although it is fairly accepted, and indeed common ground, that in case of conflict the letter of employment takes precedence. The handbook makes clear (for reference this is at page 64 of volume A):
"All employees are eligible to be considered for an annual Discretionary Incentive Award. You will be considered for an award based on a number of factors including but not limited to (in no particular order of importance) the performance of the Bank generally, the specific contribution of its component business units, your individual personal contribution and the need to retain you in employment within the bank."
Furthermore, it is expressly made clear in the handbook that "you do not have a contractual entitlement to receive a discretionary incentive award annually and any such award will be at the absolute discretion of the company".
There is no inconsistency in my view between the handbook and the letter of appointment in the present case. The two can and should be read as a harmonious whole. I therefore accept the defendant's submissions in relation to issue 1.
Issue 2
This raises the allegation that there was a breach of the implied term set out at paragraph 7(1) of the particulars of claim, in particular that the defendant would not breach the obligation to act in good faith and in a manner which was not irrational or perverse.
It is important to note at the outset, before addressing this issue, that the present case is not necessarily on all fours with the authorities which were cited before me. In those case, as will be seen, what has usually been the subject of complaint is the exercise of a discretionary power by an employer, such as to whether to pay a discretionary bonus and, if so, for what amount.
In the present case, the claimant was paid a discretionary bonus in respect of the years 2008 and 2009, whereas Mr Bittar and Mr Maine were not. Each of them was paid according to the formula which had been individually negotiated and agreed with them. In Mr Bittar's case, the agreement reached with him was in fact first entered into in 2004, well before the claimant's contract of employment for the relevant period in this case. In Mr Maine's case, the agreement was reached in 2007. Yet the claimant alleges that it was a breach of his contract of employment for the defendant to pay Mr Bittar and Mr Maine bonuses in accordance with agreements that were made with each of them. Therefore the complaint in this case is about a logically prior question and not about the exercise of a discretionary power to pay bonuses as such. Nevertheless, I did not hear full argument on whether that distinction is legally significant and the parties were content, as I understood them, to proceed for the purpose of the present applications on the basis that the relevant legal principles would be the same.
I turn to the relevant authorities. First, considerable emphasis was placed, in particular by the defendant, on the decision of the Court of Appeal in Keen v Commerzbank AG [2007] ICR 623. The facts can be summarised by reference to the headnote. The claimant was employed as manager of a proprietary trading desk in the defendant bank's global investment banking division on a basic salary of £120,000 per annum. He was entitled in addition to participate in the bank's bonus scheme, any award, its amount and timing being at the bank's discretion, and no bonus was payable if, on the date of payment, the employee was no longer employed by the bank or was under notice to leave. The claimant received a bonus of almost 3 million euros for each of the years 2003 and 2004. He ceased working for the bank in May 2005 when the desk was closed down, being made redundant in June, and he received no bonus for that year.
The claimant brought proceedings for damages for the bank's breach of the implied term not to exercise its discretion, irrationally or perversely, in failing to award him more substantial bonuses for 2003 and 2004 and by failing to award him a bonus for 2005, contending that the contractual provision on which the bank relied in refusing to make an award for 2005 was contrary to section 3 of the Unfair Contract Terms Act 1977.
At first instance, the judge dismissed an application by the bank for summary judgment made on the ground that the claim had no real prospect of success, holding the claim was properly arguable and that the issue whether the 1977 Act applied was better dealt with at trial.
The bank's appeal was allowed. The principal judgment was given by Mummery LJ, whose experience in the field of employment law is well-known. It will be seen from paragraphs 47 and 48 of his judgment that that case was not pleaded, argued or decided on the basis of breach of a implied duty of trust and confidence. Rather, the case was argued on the basis of an alleged breach of the implied term that the bank would not exercise any discretion it had in relation to he claimant's bonus award, irrationally or perversely.
Paragraphs 39 to 41 need to be set out in full:
"39. As to the size of the bonuses which have been paid by the Bank to Mr Keen and the bigger bonuses which he claims should have been paid to him, I must make it clear that it is not the function of the court to usurp the Bank's exercise of its discretion. It is for the Bank to decide whether to pay a bonus and, if so, how much, when and in what amount and form. The court is not entitled to substitute itself for the Bank. The court is not a bank. It does not employ the staff of the Bank or pay them. The court's function is limited to deciding whether the Bank acted in breach of the contractual term relating the discretionary bonus decisions in the years 2003 and 2004.
40. Mr Keen agreed with the Bank that it has a discretion to decide whether he is paid a bonus on top of his basic annual salary and, if so, how much. The only function of the court is to decide on the legal limits to the Bank's contractual discretion and whether the Bank has acted within or outwith the limits. Apart from that consideration, the Bank, not the court, is the judge of what it should pay its staff. If the employee thinks that he has been underpaid, he can make his representations to the Bank on the level of his pay or he can seek a better paid job with another bank, but he can only pursue a claim in court if there has been a breach of contract by the Bank.
41. All of this is obvious, but it needs to be stated and emphasised in order to answer ill-informed criticisms of the decisions under challenge."
At paragraphs 58 to 59, Mummery LJ gave his conclusion on the relevant part of the case:
"58. In my judgment, the claim that the bonus pool decisions for 2003 and 2004 were irrational or perverse faces difficulties which Mr Keen is unable to surmount.
59. First and foremost, the Bank has a very wide contractual discretion. Mr Keen has to show that the discretion has been exercised irrationally. It cannot be said that the decisions of the Bank on bonuses for 2003 and 2004 are irrational on their face. The burden of establishing that no rational bank in the City would have paid him a bonus of less than his line manager recommended is a very high one. It would require an overwhelming case to persuade the court to find that the level of a discretionary bonus payment was irrational or perverse in an area where so much must depend on the discretionary judgment of the Bank in fluctuating market and labour conditions".
Moses LJ gave a concurring judgment, see in particular paragraphs 108 and 109. Jacob LJ agreed with both judgments, see paragraph 107.
In my judgment, turning to the facts of the present case, there were clearly sound reasons for the defendant's decision to award different bonuses to the claimant as compared in particular with Mr Bittar and Mr Maine. There were clearly sound reasons for the defendant's decisions in each of their cases not to include them in the scheme for discretionary bonus awards but to reach agreement with each of them that they would be paid guaranteed bonuses for the relevant years on a formula basis.
In relation to Mr Bittar, first there is the evidence of Mr Nicholls in his first witness statement at paragraphs 17 to 20. I will not set all of that in full, it is familiar to the parties and should be considered with this judgment. In essence it was decided, initially in 2004, that it was important for the bank in order to retain Mr Bittar's services that they should enter into a formula agreement with him. Similar evidence is given in Mr Ward's first witness statement at paragraphs 16 to 20. He also exhibits relevant email correspondence from the time which clearly supports that contention.
It is also important to note in this context what the claimant himself says about Mr Bittar at paragraph 24 of his witness statement. He states that over the course of 2008 Mr Bittar became an:
"... incredibly influential figure in the bank. He made such a profit in 2008 that the rumour was he had 'saved the bank' ... Mr Bittar's influence cannot be underestimated."
He clearly recognised himself the importance of Mr Bittar not only to the bank and its survival but also to all of its other employees including himself.
In relation to Mr Maine, the evidence on behalf of the defendant is set out in the first witness statement of Mr Nicholls at paragraphs 21 to 28. Again, it is not necessary for present purposes to lengthen this judgment by setting out those matters in detail. They are familiar to the parties. In essence, the point made is that in Mr Maine's case it was felt important by the bank at that particular time in its history, in 2007, to reach the individual formula agreement with Mr Maine in order to retain his services so that he would not leave.
If matters stood there, I would have no hesitation in accepting the defendant's submissions that, just as in Keen v Commerzbank, the claimant in this case cannot overcome the hurdle which he must in order to demonstrate with any real prospect of success that the defendant breached the implied term relied upon.
However, on behalf of the claimant, it has been submitted before me that matters have not stood still and that the law has developed and is still developing in this important field of law. In particular, reliance was placed upon the decision of the Supreme Court in Braganza v BP Shipping Limited [2015] ICR 449. The facts can be taken from the summary in the headnote.
The claimant's husband was serving as chief engineer onboard the first defendant's vessel, having been so engaged by the second defendant under a contract of employment that provided for a death in service benefit, save where his death had resulted from his own act. When working on the vessel in the mid Atlantic, he disappeared overnight and after a search was declared to be lost overboard, presumed drowned. The second defendant set up it own investigation team, which discounted foul play. The team reported that the most likely explanation for his disappearance was that he had committed suicide rather than accidentally falling overboard. On the basis of that report, the second defendant's general manager decided for the purposes of the death in service benefit clause the deceased committed suicide and that no benefit was payable to the claimant, who thereupon brought proceedings in the High Court seeking inter alia recovery of that benefit.
At first instance, Teare J held that the decision to refuse the payment of benefit on the ground of suicide was unreasonable because, first, the investigation team had failed to take into account that there was a real possibility that the deceased, who had demonstrated an interest in the weather shortly before his disappearance because of his responsibility for weather sensitive work planned for the ship on the following day, might have gone on deck in order to check the sea conditions and had fallen overboard and, secondly, because the general manager had failed to direct himself that, before the making of a finding of suicide, there should be cogent evidence commensurate with the seriousness of such a point.
The Court of Appeal allowed an appeal by the defendants and reversed the judge's finding as to the team failing to take account of the possibility of the deceased having gone on deck for a work related reason and held that the general manager as a lay person ought not to have been expected to direct himself in the terms stated by the judge at first instance.
The claimant's appeal to the Supreme Court was allowed by a majority. However, for present purposes, as I understand it it is common ground that the relevant legal principles were not the subject of disagreement as between the members of the Supreme Court.
The main judgment for the majority was given by Lady Hale JSC with whom Lord Kerr JSC agreed. At paragraph 19 she stated:
"There is an obvious parallel between cases where a contract assigns a decision-making function to one of the parties and cases where a statute (or the royal prerogative) assigns a decision-making function to a public authority. In neither case is the court the primary decision-maker. The primary decision-maker is the contracting party or the public authority. It is right, therefore, that the standard of review generally adopted by the courts to the decisions of a contracting party should be no more demanding than the standard of review adopted in the judicial review of administrative action. The question is whether it should be any less demanding."
At paragraphs 22 and 23 Lady Hale cited from earlier authorities, in particular the obiter comments of Lord Sumption JSC in Hayes v Willoughby [2013] 1 WLR 935 at paragraph 14. She observed towards the end of paragraph 23 of her judgment that Lord Sumption's comments had an obvious echo of the classic definition given by Lord Diplock when summarising the grounds of judicial review in Council of Civil Service Unions v Minister for the Civil Service (the GCHQ Case) [1985] AC 374 at page 410, where Lord Diplock had stated, in a classic passage which deserves citation again:
"By 'irrationality' I mean what can by now be succinctly referred to as 'Wednesbury unreasonableness'. … It applies to a decision which is so outrageous in its defiance of logic or of accepted moral standards that no sensible person who had applied his mind to the question to be decided could have arrived at it."
Lady Hale went on to say at paragraph 24 of her judgment that the problem with this formulation, which was highlighted in the circumstances of Braganza itself, is that it is not a precise rendition of the test of the reasonableness of an administrative decision which in fact had been adopted by Lord Greene MR in Associated Provincial Pictures Houses Ltd v Wednesbury Corporation [1948] 1 KB 223, pages 233 to 234. As Lady Hale set out, Lord Greene's test has two limbs:
"The court is entitled to investigate the action of the local authority with a view to seeing whether they have taken into account matters which they ought not to take into account, or conversely, have refused to take into account or neglected to take into account matters which they ought to take into account. Once that question is answered in favour of the local authority, it may still be possible to say that, although the local authority have kept within the four corners of the matters which they ought to consider, they have nevertheless come to a conclusion so unreasonable that no reasonable authority could ever have come to it."
As Lady Hale went on to observe in paragraph 24 of her judgment:
"The first limb focuses on the decision-making process – whether the right matters have been taken into account in reaching the decision. The second focuses upon its outcome – whether even though the right things have been taken into account, the result is so outrageous that no reasonable decision-maker could have reached it. The latter is often used as a shorthand for the Wednesbury principle, but without necessarily excluding the former."
At paragraph 30 of her judgment Lady Hale said that it is clear that:
"... unless the court can imply a term that the outcome be objectively reasonable – for example, a reasonable price or a reasonable term – the court will only imply a term that the decision-making process be lawful and rational in the public law sense, that the decision is made rationally (as well as in good faith) and consistently with its contractual purpose."
She stated that for her part, she would include both limbs of the Wednesbury formulation, to which she had earlier referred, in the rationality test. As she observed in the same passage, Lord Neuberger PSC expressed agreement as to the general principle at paragraph 103 in his judgment, albeit that he was in the minority in the circumstances of Braganza.
As I understand the judgment of Lord Hodge JSC, with whom Lord Kerr also agreed, they being part of the majority in the Supreme Court, he took a similar view to Lady Hale, see in particular paragraph 53 of his judgment. At paragraph 57 Lord Hodge added this in a context which is apt for present purposes:
"In cases such as Clark v Nomura International Plc, Keen v Commerzbank AG and Horkulak v Cantor Fitzgerald International [2005] ICR 402 the courts have reviewed contractual decisions on the grant of performance-related bonuses where there were no specific criteria of performance or established formulae for calculating a bonus. In such cases the employee is entitled to a bona fide and rational exercise by the employer of its discretion. The courts are charged with enforcing that entitlement but there is little scope for intensive scrutiny of the decision-making process. The courts are in a much better position to review the good faith and rationality of the decision-making process where the issue is whether or not a state of fact existed, such as whether an employee's wilful act caused his death. The decision of the employer is not a judicial determination and the court cannot expect judicial reasoning. But I see no reason why an employer's decision-making should be subject to scrutiny that is any less intense than that which the court applies to the decision of a public authority which is charged with making a finding of fact …"
For my part, I respectfully find that passage a little difficult to understand insofar as reference to made to the approach which the court takes to judicial review of a decision of an public authority which is charged with making a finding of fact. Generally speaking, as I understand it, although it is not a universal principle, the court in judicial review proceedings does not substitute its own view for that of the public authority in matters of fact, nor does it apply particularly intensive scrutiny. It subjects findings of fact generally speaking to review on the standard of irrationality or perversity. Be that as it may, the general import of the principles which are set out in Braganza is clear and I must of course follow them.
In particular, it is clear that the two limbs of Wednesbury to which Lady Hale referred have been imported into this area of law also. This is an interesting example of the continuing development of the common law and in particular of the potential for cross-fertilisation between concepts of public law and private law, including the law relating to contracts of employment. However, for my part, I would respectfully sound a note of caution. It is to be recalled that the fundamental basis of public law is that public authorities have only those powers which are conferred upon them by law and must act in the public interest. Private actors such as employers and business entities more generally do not necessarily have the same duties. They may do so depending on the context. However, this would appear to be another illustration, if one were needed, of the continuing strength of the common law, in particular its ability to develop in an incremental way so as to meet the needs of a modern society.
However interesting these developments in the law may be, I find it difficult to see how they assist the claimant when one returns to the facts of the present case. In particular, I return to the allegations set out in the claimant's particulars of claim. They have been fully described earlier in this judgment, so it is not necessary to repeat those passages again.
I have scrutinised with care what is alleged in the particulars of claim in relation to issue 2 and the alleged breach of the implied term which is set out of paragraph 7(1); see also in this regard, as I have also mentioned, paragraph 20(2). On a fair reading of the particulars of claim as a whole, I have come to the conclusion that it does not raise any allegation that there was a Wednesbury error in the process adopted by the defendant, for example that an irrelevant consideration was taken into account. It is instructive to recall that in Wednesbury itself, at page 228, Lord Greene MR said:
"What then is the power of the courts? They can only interfere with executive authority if it be shown that the authority has contravened the law. It is for those who assert that the local authority has contravened the law to establish that proposition."
That, of course, is consistent with the general principle of civil litigation that the burden usually lies on the person who asserts a fact to prove it. Accordingly, I accept the defendant's submissions in relation to issue 2. In my judgment, the allegation in relation to issue 2 advanced by the claimant in the particulars of claim was that the defendant acted irrationally in relation to the outcome. There is no real prospect of success in relation to any other matter. There is certainly no real prospect of success in relation to that allegation for the reasons that I have already given, in particular by reference to the evidence filed by Mr Nicholls and Mr Ward. The decision of the bank to pay guaranteed bonuses to Mr Bittar and Mr Maine on a formula basis and for distinguishing their cases from that of the claimant was obviously in my judgment a rational one.
Issue 3
As I have noted earlier, in Keen the claimant had not pleaded breach of the implied duty of trust and confidence. In the present case, this claimant does do so. It is submitted on his behalf that for that reason alone, as well as others, his claim should be permitted to proceed to trial, since it will require evidence to be called and tested by cross-examination and after appropriate disclosure, leading to findings of fact by the trial judge in due course.
Again, I have scrutinised with care what the claimant has actually alleged in his particulars of claim in relation to issue 3 in reliance upon the implied clause set out at paragraph 7(2) of those particulars and the allegations made, for example, at paragraphs 13, 19 and 20(2). The fundamental difficulty in my judgment, accepting the defendant's submission in this context, is that the claimant relies upon a breach of this implied duty in relation to events which occurred after the decisions to grant bonuses in respect of the years 2008 and 2009. I accept the defendant's submission that, even if the facts as pleaded by the claimant were true, which is vigorously denied by the defendant, this does not lead anywhere for relevant purposes because any breach of this duty could not have any causal link to the loss which the claimant claims in this case. The only loss that is pleaded is that set out in paragraph 21 to which I have already referred. Accordingly, I find in the defendant's favour on issue 3 as well.
Other issues raised by the claimant
In the course of argument, both written and oral, reliance was placed on the concept of reasonable expectations. I note, accepting the defendant's submission, that this was not raised in the particulars of claim. Nevertheless, I will address it briefly.
The gist of the claimant's grievance in this regard can be gleaned from paragraph 9 of his witness statement, where he describes an interview which took place in 2006 with Mr Nicholls before he was recruited on this occasion. He states that in that interview Mr Nicholls told him that, in respect of awards, traders including him should expect between 5 per cent and 10 per cent per year of what they generated for the bank, 5 per cent in "bad" years and 10 per cent in "good" years. He states that Mr Nicholls told him that a "good" year was when he and the bank generally performed well and a "bad" year would be when one or both did not perform so well. He concludes paragraph 9 by stating:
"My clear understanding was therefore that I would never receive less than 5 per cent of the monies I generated for the bank."
In essence, he feels a grievance because in both of the relevant years, 2008 and 2009, he did not receive a bonus of that sort of percentage.
Reliance was placed on behalf of the claimant upon the decision of Leggatt J from Brogden v Investec Bank Plc [2014] IRLR 924. I would refer in particular to passages in that judgment at paragraphs 115 to 117, under the heading 'reasonable expectations'. Leggatt J noted that the claimants sought to rely on the principle that, if an employer has acted in such a way as to engender particular expectations in an employee, those expectations are a relevant consideration in assessing whether an employer has acted rationally. In support of that principle, the claimants cited the case of IBM United Kingdom Holdings Limited v Dalgliesh [2014] EWHC 980 (Ch), a case which was also shown to me in material part. That was a decision by Warren J who stated at paragraph 441:
"… it seems to me that breach of expectations is, at root, an aspect of irrationality or perversity. In other words, if expectations have been engendered by an employer, that may have been done in such a way that to disappoint those expectations would, absent some special change in circumstances, involve the employer acting in a way that no reasonable employer would act; in which case, irrationality or perversity, as those concepts are to be understood in this context, is established. …"
Leggatt J observed at paragraph 116 of his judgment that Warren J had drawn a distinction in this regard between "reasonable expectations" which are relevant in judging whether an employer has acted irrationally or perversely and "mere expectations" which are not.
On the facts of the case before him, Leggatt J concluded at paragraph 117 that what was being invoked by the claimants in that case was a mere expectation, it would not be regarded in that case as a reasonable expectation.
Turning to the facts of the present case, in my judgment the claimant here too had no more than a mere expectation. It was not a reasonable expectation, particularly having regard to the contractual provisions which he then proceeded to enter into, see for example the letter of appointment of 11 January 2006 which he signed. At page 63 of volume A on the same page, there appears this:
"For the sake of clarity, this letter supersedes any prior offers or representations, whether verbal or written."
Furthermore, my view in this context is reinforced by the obvious realities of the commercial environment in which the claimant was working and market practice.
Another aspect of the claimant's grievance which has been aired in this case can be found at paragraph 60 of his witness statement, where he draws together his key concerns about the formula provisions. In particular, at paragraph 60.1 he states that over the course of 2008 and 2009, the bank paid over £110 million in awards to Mr Bittar and Mr Maine. He says that even by the bank's standards this is a very material amount of money. He continues that this had a considerable impact on the size of the available award pool for the discretionary awards with the effect that that pool was reduced so as to make it impossible to reward equitably the other traders on the MMD desk and/or GFFX division and/or global markets. Much was made of this impact on the bonus pool on his behalf at the hearing before me.
However, this is not a case on which there was any promise made as to whether there would be a bonus pool or that it would be of any particular size. Contrast the decision of the Court of Appeal in Atrill v Dresdner Kleinwort Limited [2013] IRLR 548, in particular in the judgment of Elias LJ, who gave the only substantive judgment at paragraphs 65 and 135. In the present case it is important to recall what was in fact promised to the claimant. That is to be found in the terms of the contract to which I have already made reference.
The claimant has not pleaded, and in my judgment could not realistically argue, that the defendant was not entitled in its discretion to have the bonus structure which it chose to have. Whether it was right to do so or whether it was wise to do so is not the question for this court. The only issue for the court for present purposes is whether there was any breach of contract with the claimant by reason of its decision to adopt that bonus structure. In my judgment, there is no real prospect of that being established at trial.
Any other compelling reason
In my judgment, there is no other compelling reason why this case should proceed to trial. On behalf of the claimant, it was submitted that the witness statements filed in this case reveal a number of factual disputes between the parties. For example, there is a dispute about what exactly was said by Mr Nicholls or others on the defendant's behalf both in pre-contractual discussions and subsequently after the bonus payments were made in respect of the years 2008 and 2009. However, in my judgment there is no factual dispute which is material to the issues which the claimant has raised in his particulars of claim. This is for reasons I have already set out.
In the course of these proceedings, various complaints have been made by the claimant in particular that there has been inadequate disclosure by the defendant. However, it has to be recalled that disclosure in civil litigation is designed to facilitate a fair resolution of the issues which arise in that litigation. The prior question which has to be decided is what those issues are. For that purpose, I have examined with care the grounds of complaint raised by the claimant in his particulars of claim. As I have said, those ground have no realistic prospect of success in my judgment. Although the claimant may wish to see more disclosure, that is not in my judgment a compelling reason to permit this case to proceed to trial nor in my judgment is there any other compelling reason to do so.
Conclusion
For the reasons I have given, the application by the defendant succeeds in that I will order summary judgment in its favour.
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