First Subsea Ltd v Balltec Ltd
| Jurisdiction | England & Wales |
| Judge | Mr Justice Norris |
| Judgment Date | 15 March 2013 |
| Neutral Citation | [2013] EWHC 1033 (Pat) |
| Docket Number | Case No: HC10C04594 |
| Date | 15 March 2013 |
| Court | Chancery Division (Patents Court) |
[2013] EWHC 1033 (Pat)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
PATENTS COURT
Royal Courts of Justice
The Rolls Building
Fetter Lane
London, EC4A 1NL
Mr Justice Norris
Case No: HC10C04594
Philip Marshall QC, Michael EdenboroughQC andAndrew Moran (instructed by Boodle Hatfield) for the Claimant
David Cavender QC, James St. VilleandTamara Kagan (instructed by Oglethorpe, Sturton & Gillibrand) for the Defendant
Hearing dates: Hearing dates: 5, 6, 7, 8, 11, 12, 13, 14, 15, 18, 19, 20, 25, 26, 27 March, 10, 11, 12, 15, 16, 22, 23,24 April 2013
I must now deal with two applications, one relating to the claimant's evidence and the other to the defendants' statement of case.
The barest background for someone not actually involved in the case itself is this: BSW was formerly the employer of Mr Emmett. When Mr Emmett ceased to be an employee, he founded another company called Balltec, in which process a Mr Halstead assisted.
Mr Lang was also formerly an employee of BSW, and he became an employee of Balltec. Mr Emmett and BSW fell out. That led to proceedings in Manchester in which Mr Lang gave a witness statement in support of Mr Emmett and Balltec.
The present proceedings are between (a) BSW and (b) Mr Emmett and Balltec and others. They were opened as a claim for damages for conspiracy to injure by unlawful means. The unlawful means are breaches of obligation by defendants and by others. The claim began in 2010. As part of an extensive amendment of the claim on 3 December 2012, three months before trial, BSW pleaded that amongst the unlawful means were breaches of obligation by Mr Lang (who is not a party to the action).
It is sufficient to give two examples of the way the case is put. In paragraph 9 it is said that in November 2003, Mr Emmett solicited others, including Mr Lang, to assist him in setting up and thereafter promoting a competing business. In doing so, it is said Mr Emmett induced others, including Mr Lang, to breach their fiduciary duties or their contracts of employment.
In paragraph 19.1, there are alleged breaches of duty by Mr Emmett. Amongst the breaches of duty alleged are "concealment". The acts of concealment alleged include leading BSW to believe that Mr Lang was not acting in breach of contract, when in fact he was so acting.
It is accordingly incumbent on the claimant, BSW, to establish those breaches of obligation by Mr Lang.
As I have indicated from my short citation from the BSW statement of case, there are no particulars of the breaches of obligation alleged to have been committed by Mr Lang. They are referred to in general terms. In relation to others who are alleged to have been in breach of obligation, the statement of case refers to the evidence on which reliance will be placed, including reliance upon evidence that was given in the Manchester proceedings. In Mr Lang's case, the statement of case does not plead any reliance on the evidence which he gave in Manchester. The case against Mr Lang therefore has to be grounded on what other people who are going to be witnesses say about what Mr Lang did. Witness statements were exchanged. BSW did not call Mr Lang, for they were unlikely to get anything helpful out of him, since he was in the opposing camp. The defendants did not call Mr Lang for the very sound reason that they had no wish to assist BSW's case by providing a witness for the claimant to cross-examine, when the claimant had led no direct evidence against Mr Lang. So the matter rested until an application was made in the course of the trial.
The application is for a ruling, a declaration, that there is no need for BSW to give any notice of its intention to rely on the evidence which Mr Lang gave in the Manchester proceedings. In the alternative, if some notice is necessary, there is an application for an extension of time within which to serve a Civil Evidence Act notice identifying the relevant passages in Mr Lang's Manchester evidence.
The relevant passages are four passages from the witness statement which Mr Lang gave to the Balltec/Emmett camp in the Manchester proceedings, and which are said to constitute admissions by him of his wrongdoing, by reference to what he said he did at particular dates.
I am warned by the decision of the Court of Appeal in Favor Easy Management v Wu [2010] EWCA Civ 163 about the dangers of making interlocutory rulings concerning evidence outside the context of a specific application. It is unusual to be asked to make a declaration as to a particular evidential matter in the course of the hearing, and I approach the invitation with a great deal of caution.
It is, however, in this case, coupled with an application for an extension of time in relation to the service of a Civil Evidence Act notice. Whilst I think that must be the focus of any ruling that I make, it is only right to address the arguments which have arisen which suggest that the Civil Evidence Act notice is itself unnecessary (in respect of which the declaratory relief is sought.
The basis for the argument is the terms of the Practice Direction to Part 32. Paragraph 27 is headed "Agreed Bundles for Hearings", and paragraph 27.1 says that the court may give directions requiring the parties to use best endeavours to agree a bundle of documents for use at the hearing. The heart of the argument lies in paragraph 27.2. This says:
"All documents contained in bundles which have been agreed for use at the hearing shall be admissible at that hearing as evidence of their contents, unless (a) the court orders otherwise, or (b) a party gives written notice of objection to the admissibility of particular documents."
The key words of course are:
"…shall be admissible at that hearing as evidence of their contents…"
It is common ground that whatever this rule literally says, referring as it does to "all documents contained in bundles which have been agreed", it has no application to witness statements and expert reports tendered in the proceedings themselves, even if they are included in the agreed bundle. The Maker's must still be called. What this paragraph is referring to is the documents which have emerged as the result of the disclosure process, or which have subsequently been agreed between the parties, should be included in the trial bundle for the assistance of the judge.
BSW's point is that Mr Lang's witness statement in the Manchester proceedings was disclosed and is included by agreement in the bundle. BSW therefore says that the statement is evidence of its contents i.e. the events which it recounts, even if Mr Lang is not going to be called to give live evidence at this hearing by anybody.
In effect, what the claimant says is that the provisions of PD 32, paragraphs 27.2 override the requirements of the Civil Evidence Act and in effect "trump" CPR 33.2, (which deals with the giving of notice in relation to hearsay evidence to be adduced at trial).
Mr Marshall QC for BSW says that he has two persuasive authorities from the Court of Appeal to the effect that indeed PD 32 paragraph 27.2 does override the statute.
The first is Sunley v Gowland White [2003] EWCA (Civil) 240. This was a professional negligence claim against surveyors and valuers relating to the failure to give advice to the purchaser of a petrol filling station, which was later discovered to be subject to underground contamination. As part of their evidence, the claimants sought to adduce a draft soil report from experts in soil contamination, which draft had been prepared shortly after completion took place. That report stated that there was underground contamination and that it would cost some £30,000 to eliminate.
A question arose as to whether that report could be relied on in the negligent proceedings, and if so, in what way. The trial judge said the report was admissible.
The Court of Appeal identified two ways in which the report might be relied on. First, the claimants could have relied on the fact that the report had been made and the fact that it expressed the view that the land was contaminated and that the cost of the remedial work would have been £30,000. In the light of that, the claimants could argue that if the surveyors had not been negligent, then the soil contamination experts would have been instructed earlier, would have reported as they did, and the existence and contents of the report (whether in fact right or wrong) would have affected the view formed by valuers. That was the first way in which the report could be relied on.
Second, the report could have been relied on was reliance by the claimants as evidence of opinion (and perhaps of fact) as to what the true state of the petrol filling station was at the date of completion i.e. to rely on the report as hearsay evidence of its contents.
The Court of Appeal grounded its decision upon the holding that there was no reason why the report was not admissible on the first of those bases. There was no reason why the claimant should not be entitled to rely on the facts that the soil contamination report had been made and that its contents were such as were set out in the report, and to allege that that might have affected a valuation tendered by a valuer. In this circumstance, the question was not whether the contents of the report were objectively true, but how professional valuers would have reacted to such report in forming a view as to the valuation of the property.
So that was the ground of the decision. But the court went on to consider the second basis and to express two alternative ways in which the report could have been deployed. The first of those alternative grounds was that it could have been deployed as hearsay evidence under the Civil Evidence Act 1995, and...
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