Do you have a Witness Statement to file?
In the case of In Bank of Scotland Plc v Hoskins [2023] EWHC 306 (Ch) In 2006 the claimant had granted a mortgage to the defendant to a property said to have a value between £3.5 million and £5 million. In September 2018 the defendant stopped making payments under the mortgage. The Claimant agreed an initial holiday for the mortgage. The Defendants arrears stood at £689,726.68 and the amount required to pay in full was £3.4 million. The defendant had a counterclaim which was struck out at an earlier hearing. The court had made directions for a disposal hearing to take place. Part of those directions were for witness evidence to be filed 14 days before the hearing. In this case the Defendant filed their witness evidence the last working day before the hearing.
The defendant made an application for relief from sanctions and raised arguments based upon article 1 (Obligation to respect Human Rights) and article 8 (Right to respect for private and family life) of the European Convention on Human Rights.
The Judge made the following comments:-
- And, after hearing counsel, I refused the application. These are my reasons. As I have also said, my order of 17 November 2021 required the defendant to file any evidence to be relied on at the disposal hearing at least 14 days before the date for which that hearing was directed to be listed. In September 2022, it was listed for 5 December 2022. (So far as that evidence related to the application to amend the defence, it was not in breach of any order. I was not therefore concerned with that. My concern was with that part of the evidence relating to the disposal hearing itself.)
- The defendant served his evidence only on 2 December 2022. Any exclusion of evidence for failure to comply with a court direction to file and serve by a particular date would be a procedural sanction, bringing CPR rules 3.8 and 3.9 and the case law surrounding those provisions into play. In particular I had to consider the so-called Dentoncriteria: see Denton v TH White Ltd[2014] 1 WLR 3926, CA. There are three stages to these. First of all, how serious and significant is the failure? Secondly, is there a good explanation for the failure? Thirdly, looking at the matter and the circumstances overall, is it in the interests of justice to allow the disputed evidence to be admitted?
- The first stage: In my judgment, this was a serious failure, as the defendant accepted at the hearing. This was a claim which had been on foot since May 2019, and in which the defendant’s counterclaim was struck out in November 2021. At the same time, I directed the disposal hearing. The defendant had 2½ years between issue and strike out to decide what his defence was and what evidence he would need. After the strike out, he knew that there would be a disposal hearing within a relatively short time, although in fact the date fixed turned out to be just over a year later. The defendant could have prepared his evidence then. Next, the defendant had 2½ months’ notice of the date of the hearing. But he still left it to the business day before to put in evidence to defend the possession claim. I am afraid that this is all of a piece with the history of this litigation. The defendant was simply stringing out the proceedings for as long as possible, so as to be able to continue to live with his family in this very expensive Grade 1 listed country manor house without paying anything now for the privilege.
- The second stage: Secondly, there was no good explanation for this failure. In his second witness statement, the defendant referred to the order of 17 November 2021, and then said simply: “5. It has not been possible to comply with that order as the issues that have needed to be addressed to respond in full have been substantial and have taken time to collate”.
- I have already referred to the letter from his solicitors to the claimant’s solicitors of 11 November 2022, which sought an adjournment of the disposal hearing. This said that the solicitors did not believe that a one-hour hearing would be sufficient to deal with the submissions that the defendant intended to make. Apart from a reference to claims intended to be made by Mrs Hoskins against the property and her husband (which obviously did not fall to be made by the defendant, and of which at that stage the claimant had no idea), those matters referred to the defendant’s elderly mother and three young children, resident at the property, as well as to ongoing interest from third parties and purchasing the property. So far, there was nothing of any substance that could not have been put in a short witness statement and filed and served well before the 14 days before the hearing.
- I then referred to the short paragraph in the solicitors’ letter, complaining of a refusal by the claimant to allow the defendant to sell part of the property some years earlier. Despite relating to matters which were alleged to have happened years ago, the defendant had waited until less than a month before the listed disposal hearing to raise them in correspondence for the first time.
- The defendant put forward this explanation for the delay:”7. … The threat of losing my house and my young family, and elderly mother (who has had serious health issues in recent weeks and who is in hospital at the date of this statement), being without a property is a very serious issue which justifies me taking time over the response and collating the evidence I need to support my position. Those details are set out below and in the attached exhibit. So far as concerned the defendant’s mother, his evidence was that she had been taken ill on 22 November 2022. But the deadline for the evidence to be filed and served was 21 November 2022, and so had already passed. As to the remainder of the evidence which the defendant then put forward, it was evidence which he had had since the events concerned in 2019 and following. And he lived through it and must have known all about it at the time. None of this was a good explanation for the delay in filing his evidence in opposition to the possession claim.
- The third stage: The final stage of the process was to consider whether, overall and taking everything into account, it was in the interests of justice to allow the late evidence to be admitted. I bore in mind the matters mentioned in CPR rule 3.9, namely the need for efficiently conducted litigation at proportionate cost, and enforcement of rules, practice directions and orders. The defendant was and had been throughout represented by experienced solicitors and counsel (now leading counsel). He had had more than sufficient notice of the disposal hearing, being aware in November 2021 that it would be listed, and receiving the actual listing in September 2022 for December 2022. Yet he waited until the business day before the hearing before serving his evidence. No good reason had been given for this. Given the attempts made by the defendant in correspondence to obtain an adjournment of the disposal hearing, it was hard to escape the conclusion that it was tactical, so as to make it impossible for the claimant to deal with, and so force an adjournment, as indeed was achieved.
- The defendant said that the order of District Judge Markland of 5 December 2022 had superseded my previous order regarding the service of evidence for the disposal hearing. I did not so read the order of 5 December 2022. It directed the filing and service of evidence in relation to the two applications, but said nothing about evidence in relation to the disposal of the possession claim.
- The defendant further said that, whatever the position might have been at the time of the hearing of 5 December 2022, the claimant would not now be prejudiced by the admission of the late evidence. I disagreed. This latest episode showed exactly how the claimant was being prejudiced by the defendant’s dragging out the proceedings, so that an order for possession (if otherwise appropriate) would never actually be made.
- Human rights: Finally, the defendant invoked article 8 (the right to respect for the home) and article 1 of protocol 1 (the entitlement to the peaceful enjoyment of possessions) of the European Convention on Human Rights. These read as follows: “Article 8
- Everyone has the right to respect for his private and family life, his home and his correspondence.
- There shall be no interference by a public authority with the exercise of this right except such as is in accordance with the law and is necessary in a democratic society in the interests of national security, public safety or the economic well-being of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights and freedoms of others.
[ … ] Protocol 1, Article 1. Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law. The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.”
84. Conclusion: Overall, I was clear that it was not in the interests of justice to allow this evidence to be admitted. This kind of behaviour has no place in our system. Therefore, the evidence in the witness statements of 2 December 2022 and 1 February 2023 relating to the disposal of the possession claim (rather than the applications for relief against sanctions and the permission to amend) was and is strictly inadmissible. However, in case I should prove to have been wrong in my decision, I will look at the further evidence de bene esse, so that it may not be necessary in that case to remit the matter to this court.
In this case the Claimant was successful, and the Defendant was ordered to leave the home and from there it would be decided whether the sale of the house would cover the debts. What can we take away from this case? This means in a case where a witness statement is served out of time, there are grounds to have the same struck out. However, the same could apply for a witness statement served by the Claimant, therefore if it is detrimental to the case then we urge you to prioritise where possible and ensure you file on time. If you do file a witness statement out of time and plan on making a relief from sanctions, then you should consider the chances of the application being refused and how that may affect the overall claim.
How can PIC help?
If you realise you have filed a witness statement out of time, speak to your point of contact at PIC and we can consider whether there is good reason for the same and assist with making an application for relief.
Samantha Fretwell, Legal Costs Negotiator
20.07.2023