First Subsea Ltd v Balltec Ltd

Agreed bundles do not automatically dispense with fair notice when a party seeks to rely on hearsay evidence, particularly to prove a central and unparticularised allegation. The relevant Practice Direction must be read with the Civil Procedure Rules 1998 as a whole, the Civil Evidence Act 1995 and the overriding objective. The court retains a case-management power to exclude otherwise admissible evidence, although exclusion of relevant hearsay will be rare and ordinarily concerns unfairness or disproportionate case management. Late evidence may be admitted where it is relevant and its weight left to the court. A late amendment may be allowed where it is legally arguable and delay is attributable to late disclosure, provided the opposing party is not unfairly ambushed.

The claimant sought to rely on a witness statement made by a non-party in earlier proceedings as hearsay evidence of breaches of obligation. The statement had been disclosed and placed in an agreed bundle, but the claimant had not pleaded reliance on it or served a notice under the Civil Evidence Act 1995. The claimant applied for a declaration that notice was unnecessary or, alternatively, for an extension of time.

The defendant also sought to amend its defence during the trial after late disclosure of an email concerning the claimant’s knowledge of the defendant’s confidential tender price. The proposed amendment raised causation, clean hands and knowing wrongful exploitation. The court had to decide whether the evidence should be admitted and whether the amendment should be permitted.

1. Hearsay evidence. Paragraph 27.2 of Practice Direction 32 could not be treated as automatically overriding the hearsay requirements of the Civil Evidence Act 1995 or the wider Civil Procedure Rules 1998. Its operation depended on the circumstances of the individual case and the overriding objective. It would generally be unacceptable to use a statement in a large agreed bundle, without proper notice, to prove a central and unparticularised allegation of liability. (paras 13–30)
2. Power to exclude. CPR 32.1(2) permits the court to exclude evidence which would otherwise be admissible. The power is primarily case-management in nature. Relevant hearsay should rarely be excluded merely because it is hearsay, but exclusion remains available in exceptional cases where admission would be unfair. (paras 31–37)
3. The claimant’s late application was allowed. The evidence was relevant, the claimant had not reversed a conscious tactical decision, and the defendant could comment on its weight and seek to adduce a qualifying statement. The evidence was admitted, subject to such weight as the court considered appropriate. (paras 34–38)
4. Amendment. The proposed amendment was not legally incoherent. On an interlocutory application, the court assumed the alleged facts in the defendant’s favour and asked whether the case was arguable. The proposed clean-hands and causation arguments were capable of succeeding if the facts were proved, and challenges to the evidential basis were matters for closing submissions and trial findings. (paras 45–63)
5. Although amendment after cross-examination carries a real risk of unfairness, late disclosure supplied an exceptionally good explanation here. Notice was given early in the trial and the amendment was formulated before the principal witness on the transaction was cross-examined. Permission to amend was therefore granted. Both applications were allowed. (paras 64–68)

First-instance decision. No appellate history is stated in the judgment.