Sprecher Grier Halberstam Llp & Anor v Walsh

A claim in deceit should not be struck out where the pleading identifies the representations, their alleged falsity, the defendants’ knowledge, and inducement and reliance. But the claimant must have a real prospect of proving that the representation operated on his mind as a cause of his detrimental action. A person who knew the truth cannot establish deception.

Witness immunity is absolute and applies to civil claims founded on evidence given in court, including allegations of false or dishonest evidence. It also extends to instructions given to solicitors and correspondence repeating those instructions in preparation for evidence. Distinct claims based on abuse of process may fall outside the immunity, but that exception did not apply here.

This was an appeal by Sprecher Grier Halberstam LLP and Edward Judge, the second and third defendants, from an order of Miss Sarah Asplin QC, sitting as a deputy judge of the High Court, dated 26 July 2007. The deputy judge had refused to strike out or summarily determine Martin Walsh’s claim for deceit and conspiracy.

The claim arose from a freezing order obtained by Paul Staines in earlier litigation. Walsh alleged that Staines’s affidavit and a later solicitors’ letter misrepresented Staines’s financial position, and that subsequent omissions concealed material changes. He alleged that the representations induced him not to seek discharge of the freezing order earlier. The appeal concerned the adequacy of the pleading, the prospect of proving reliance, and witness immunity.

Appeal allowed. Ward LJ gave the judgment, with which Moore-Bick LJ and Rimer LJ agreed.

1. The pleading was adequate. It identified the representations, alleged that they were false to the knowledge of the defendants, and pleaded an intention to induce reliance together with actual inducement and reliance. The claim therefore disclosed a proper case in deceit and conspiracy for pleading purposes.
2. Under Civil Procedure Rules 1998 Pt 24, the relevant criterion was absence of reality rather than probability. The court should not conduct a mini-trial, particularly in a complex case before discovery and oral evidence. Summary judgment was nevertheless appropriate where the claim was shown to be doomed.
3. Reliance was essential to the deceit claim. The representations had to operate on Walsh’s mind as a cause, though not necessarily the sole cause, of his detrimental conduct. His own contemporaneous communications showed that he believed Staines had concealed substantial tax liabilities and was insolvent. He had never said that he believed the assurances about Staines’s ability to meet the undertaking. He therefore had no realistic prospect of proving that he relied on the alleged misrepresentations.
4. The affidavit evidence was protected by the settled rule of absolute witness immunity. The immunity applied to any civil action founded on evidence given in judicial proceedings, including deceit and conspiracy, and was not lost because the evidence was alleged to be malicious or dishonest: Watson v M’Ewan [1905] A.C. 480, Darker v Chief Constable of the West Midlands Police [2001] 1 A.C. 435 and Marrinan v Vibart [1963] 1 Q.B. 234.
5. The immunity extended to instructions given to solicitors and to correspondence repeating those instructions where the material was prepared for use in evidence: Watson v M’Ewan [1905] A.C. 480 and Arthur J.S. Hall and Co v Simons [2002] 1 A.C. 615. The alleged second representation was therefore also protected.
6. The claim was not an independent conspiracy to abuse the process of the court, such as the claims considered in Roy v Prior [1971] A.C. 470 and Surzur Overseas Ltd v Koros [1999] 2 Lloyds L.R. 611. It was a claim founded on evidence and related assertions. Since the primary representations could not be pursued against Staines, the conspiracy claim could not survive against the solicitors. The question of any free-standing duty owed to the opposing party was left open. Wasted-costs proceedings and professional disciplinary measures remained available to address misconduct.

• Court of Appeal (Civil Division): On 3 December 2008 the appeal was allowed. The deceit and conspiracy claim could not proceed on the pleaded representations.
• Chancery Division, High Court: On 26 July 2007 the deputy judge refused the appellants’ applications to strike out the claim or obtain summary judgment, holding that the pleading was adequate, reliance remained arguable, and witness immunity could not be determined conclusively at that stage.