JD Wetherspoon Plc v Harris & Ors

Summary judgment is inappropriate where determining whether a claim has a realistic prospect of success would require a mini-trial of disputed facts, extensive documents or fact-sensitive inferences. Allegations of fraud may require cogent evidence, but that requirement does not justify deciding contested evidence without a trial.

A witness statement must contain evidence which its maker could give orally. It should not recite documents or events outside the witness’s direct knowledge, present advocacy, or offer unauthorised expert opinion. Although these requirements may be relaxed to achieve the overriding objective, departure requires a good reason arising from the particular circumstances.

The claimant alleged that a property consultant had acted fraudulently and in breach of fiduciary duty when two freeholds were acquired by companies associated with the first defendant while leasehold interests were granted to the claimant. It alleged dishonest assistance and the payment of secret commissions or bribes, and sought damages, equitable compensation and an account of profits.

The defendants applied for summary judgment, contending that the claimant could not establish knowledge, dishonesty or payment of a bribe. The second to fourth defendants also sought permission to amend their defence. The claimant applied to strike out most of a director’s witness statement because the director had no contemporaneous involvement and the statement contained documentary narrative, argument and opinion.

The central questions were whether the evidential disputes could properly be resolved summarily and whether the challenged statement contained evidence which its maker could give orally.

1. The defendants’ applications for summary judgment were dismissed. Under Part 24 of the Civil Procedure Rules 1998, the defendants had to establish that the claimant had no real, rather than merely fanciful, prospect of success and that there was no other compelling reason for trial. The applications depended upon resolving disputed facts and drawing inferences from extensive documentary and witness evidence. Doing so would constitute the very type of mini-trial for which summary judgment was unsuitable: Swain v Hillman [2001] 1 All ER 91 and Three Rivers DC v Bank of England (No. 3) [2003] 1 AC 1 applied (paras [10]–[17]).

2. The principle that a serious allegation requires cogent evidence did not make summary determination appropriate. Testing the defendants’ contention that the claimant’s evidence was insufficient required examination of disputed evidence and the inferences fairly available from the documents. That exercise belonged at trial (para [15]).

3. The claimant had a realistic prospect of proving dishonest assistance and the payment of secret commissions or bribes. Relevant matters included the property consultant’s potential conflict of interest, its involvement in negotiations, the requested commissions and confidentiality, the alleged disguised payment relating to the Rotherham transaction, and the need to test the first defendant’s explanations by cross-examination. The court made no final findings upon those matters (paras [21]–[30]).

4. The claimant’s application concerning the director’s witness statement was granted, subject to reconsideration of particular passages. Rule 32.4 of the Civil Procedure Rules 1998 confines a witness statement to evidence which its maker could give orally. A witness without direct knowledge could not recite events from documents, comment on those documents, or advance argument and submissions appropriate to an advocate. Those parts were an abuse and were to be struck out (paras [32]–[39]).

5. A factual witness may sometimes express an opinion where necessary to give a full and coherent account of admissible facts. That principle did not permit the director to offer opinions on market practice by commenting upon matters outside his direct knowledge, particularly where permission for expert evidence had been refused. Although witness-statement requirements may be relaxed to achieve the overriding objective, there was no good reason to do so here. The parties were given limited time to identify any further passages which could properly remain, with unresolved disputes reserved to the court (paras [40]–[42]).

• High Court (Chancery Division): Master Bowles had refused permission to adduce expert valuation evidence at a hearing on 22 February 2013. The present court dismissed the defendants’ summary judgment applications, permitted amendment of the defence, and granted the claimant’s application concerning the witness statement subject to reconsideration of particular passages.

• Separate earlier proceedings: In proceedings brought by the claimant against its property consultant, to which the present defendants were not parties, the consultant had been found to have acted fraudulently in relation to the two transactions.