McGlinn v Waltham Contractors Ltd & Ors

Under CPR 32.3, the court has a broad discretion to permit evidence by video link. Physical attendance is generally preferable, but the court must assess whether video evidence will assist the efficient, fair and economic disposal of the proceedings. On an interlocutory application, the court need not determine a complex underlying tax liability. It is sufficient to establish a real, rather than fanciful, risk of liability. Relevant considerations include prejudice to the parties, the importance of the witness’s evidence, the practical difficulties of cross-examination, the applicant’s potential prejudice, cost savings and the timing of the application.

The claimant brought a substantial defects claim concerning a house built in Jersey. He applied under CPR 32.3 for permission to give evidence from abroad by video link rather than attending the trial in London. He said that attendance created a real risk of a substantial Capital Gains Tax liability arising from the sale of shareholdings.

The defendants opposed the application, disputing the tax risk, alleging possible forensic and logistical prejudice, and arguing that the application was late. The central issue was how the court should exercise its discretion under CPR 32.3.

1. Application granted. The claimant was permitted under CPR 32.3 to give evidence by video link.
2. The discretion under CPR 32.3 was wide. The guidance in Annexe 3 to the Practice Direction accompanying Part 32 required the court to consider overall costs, and the efficient, fair and economic disposal of the litigation. Video evidence was less ideal than physical attendance, but convenience alone was not determinative.
3. The judge was bound by Polanski v Conde Nast Publications Ltd [2005] 1 WLR 637. That decision supported the conclusion that a claimant’s use of the court’s civil procedures should not ordinarily be refused merely because attendance in person would expose him to a personal disadvantage. The defendants’ ability to cross-examine effectively by video link meant that no significant prejudice had been shown.
4. The court declined to determine the claimant’s detailed potential tax liability on this interlocutory application. The proper question was whether, on the evidence, there was a real rather than fanciful risk of liability. That threshold was satisfied by the specialist advice, the consequences of attending in the United Kingdom, the likely interest of HMRC and the possible liability of approximately £50 million.
5. The claimant’s evidence was not likely to be critical on the central expert issues, including the reasonableness of demolishing the house. Any reduced stress associated with giving evidence remotely could be taken into account when evaluating his evidence. Logistical difficulties concerning documents, photographs and recordings were common and could be managed.
6. The potential saving in travel and accommodation costs was a relevant, although relatively minor, factor. The application was not late because the possibility of video evidence had been raised before the pre-trial review, consistently with the TCC Guide.

Not an appellate decision. The judgment determined an interlocutory application in the High Court.