The Dekagram: 14th October 2024

Last week we brought you news of two cases in which the jurisdiction of the court was challenged – one a ‘pure’ jurisdictional challenge, the other on the basis of failure to serve originating proceedings. And such cases seem to come along with distressing regularity; this week Lucy Lodewyke considers a case in which the claimant’s solicitors very nearly effected service – but a miss is as good as a mile in these circumstances. Meanwhile, in Magomedov v Kuzovkov [2024] EWHC 2527 (Comm) the court set aside orders allowing for service abroad by a method unlawful in the country of service. You have been warned! In other news, Cockerill J, who seems to be exceptionally busy at the moment, has given guidance on how to approach the reliability of witness evidence given nearly eight years after the events in question – sadly not an unusual situation, in our experience.

Lynda Maxine Franka Joseph v Mcfaddens LLP [2024] EWHC 2447 (Ch) – another recent opportunity to consider the strict rules of service

A summary of the legal arguments:

The matter came before Deputy Master Raeburn for determination of the Defendant’s application and Claimant’s cross application.

In short, the Defendant’s application requested that the Court decline to exercise jurisdiction in relation to the underlying claim (pursuant to CPR rule 11(1) ) and/or strike out the claim (pursuant to CPR rule 3.4(2)(c) on the basis that the Claimant served her Particulars of Claim on the Defendant after the latest time for service of the Claim Form.

The Claimant’s cross-application was for retrospective permission to serve its Particulars of Claim and if so required, relief from sanctions.

The rival contentions centred upon whether the Claimant’s service of the Particulars of Claim was within the period of validity of service of the Claim Form and if not, whether it was appropriate to grant retrospective permission for an extension of time and relief from sanctions.

The Claimant submitted that service of the Particulars of Claim was in time on the basis that the relevant deadline (i.e. the latest time to serve the Claim Form) includes the additional two business days for deemed service of the Claim Form.

The Defendant argued to the contrary that the latest time to serve the Claim Form should be approached with reference to “taking the relevant step” as prescribed by the CPR. Therefore, the key when considering the service of the Particulars of Claim was not the “deemed date” of service of the Claim Form, but the latest point at which the relevant step can be taken. The Defendant also argued, as a secondary case, that the deemed service date of the Particulars of Claim was in any event outside of the latest deemed service date of the Claim Form.

Back to basics:

The starting point in the context of the Defendant’s application is CPR rule 7.4(2) which states that Particulars of Claim must be served no later than the latest time for serving the claim form .

CPR rule 7.5(1): “Where the claim form is served within the jurisdiction, the Claimant must complete the step required by the following table in relation to the particular method of service chosen, before 12.00 midnight on the calendar day four months after the date of issue of the claim form.

Pursuant to CPR rule 6.14 : “A claim form served within the United Kingdom in accordance with this Part is deemed to be served on the second business day after completion of the relevant step under rule 7.5(1)”

Pursuant to CPR 6.26 A document, other than a claim form, served within the United Kingdom in accordance with these Rules or any relevant practice direction is deemed to be served on the day shown in the following table –

Application to the facts and Judgment:

Whether the Court should decline to exercise jurisdiction in relation to the present claim, or otherwise strike out the same

As set out above, the Defendant’s position was that the Claimant served her Particulars of Claim on the Defendant after the latest time for the service of the Claim Form. It was said that the latest time to serve the claim form was 28 October 2023 and that accordingly, the relevant point for service of the Particulars of Claim was not the deemed date of service of the Claim Form, but the latest point where service could actually have been effected, which was on 28 October 2023.

On behalf of the Claimant it was averred that the combined effect of the rules is such that the latest time within CPR rule 7.4(2) for the separate service of the Particulars of Claim is the deemed service date following the completion of the relevant step.

The Claimant relied upon the following passage of the White Book, [7.4.2, page 368] as supporting that proposition: The calculation of the “latest time for serving the claim form” within 7.4(2) requires reference to r7.5 although in fact unlike r7.4(2) that rule…says nothing about “serving” a claim form within a particular time, but about completing “a step required” by the rule within the set time. Where service is to be effected within the jurisdiction, a claim form served in accordance with Pt 6 is deemed to be served on the second business day after “completion of the relevant step under 7.5(1) (see r6.14). Presumably in such circumstances it is intended that the “latest time” within 7.4(2) for the separate service of the particulars of claim is that deemed date.

The Court found that the correct approach in the circumstances was to determine whether the Claimant had in fact carried out the “step required” by CPR rule 7.5(1) within the 4 month period of validity.

The Judge concluded that the concept of “serving” the Particulars of Claim pursuant to CPR rule 7.4(2) necessarily refers to the Claimant taking the “step required” under CPR rule 7.5(1).

It was stated that “the purpose of the concept of “deemed” service in these circumstances does not, in my view, operate so as to determine the date by which the Claimant must take the steps required by CPR 7.5(1). The “deemed” service construct is relevant for other purposes in the course of the proceedings, including the calculation of subsequent procedural steps.”

Therefore, the Court determined that the Claimant’s service of the Particulars of Claim was late; “the relevant step” having been taken on 30 October 2023, which was after the latest time for the service of the Claim Form.

For completeness, the Judge dismissed the alternative argument run on behalf of the Claimant finding that, the Claimant’s service of the Particulars of Claim was late even if the correct approach in this context is to apply the fiction of the deeming provisions as having a central role for the purposes of regulating the date by which the Particulars of Claim are to be served.

Whether the Court should grant the Claimant’s Application for a retrospective extension of time

The Claimant put forward understandable arguments seeking retrospective extension. It was argued that the delay was minimal, the Defendant was not prejudiced, the Claim Form was served on time and a letter before action inviting conciliation and pre-action exchanges together with a standstill offer was also sent at an earlier stage of the proceedings, which was impermissibly ignored and the personal circumstances of the Claimant were such that there should be consideration of the difficulties faced by the Claimant at the material time (in the form of work related time pressures). Also noting that the Claimant was a litigant in person, instructing her Counsel via direct access.

The Court considered the well-known three-part Denton test (Seriousness of the breach, reason for the breach and all of the circumstances of the case)

The Court found there should not be permission for retrospective extension of time nor any relief from sanctions.

The Judge concluded that it was appropriate to make a declaration in favour of the Defendant that the Court had no jurisdiction in this claim as a result of the failure to serve the Particulars of Claim within the period of validity of the Claim Form.

Comment

Another useful case for both Defendants and Claimants alike when considering compliance with CPR service rules and the interpretation of the wording of CPR 7.5.

About the Author

Lucy Lodewyke was called in 2018 and undertakes work across all of chambers’ practice areas. Prior to coming to the Bar she worked as a paralegal at Stewarts in the Personal Injury Department, and then as a paralegal to a barrister specialising in personal injury and clinical negligence work. This invaluable experience has given her an insight into the profession from another perspective, with knowledge beyond her call.

Jaffe v GreyBull Capital LLP [2024] EWHC 2534 (Comm): The Courts’ Approach to Stale Witness Evidence

Litigators will be familiar with the issues arising as a result of the delays now regrettably commonplace in the progression of claims. It is not at all uncommon for witnesses to be requested to remember with pinpoint accuracy events occurring some considerable time in the past; and where their recollection is imperfect, to be challenged by smug barristers, whereas if they profess a flawless recall, to be taken to task for reconstructing their memories after the event.

Cockerill J recently had occasion to consider how the court should approach witness evidence given some eight years after the subject of the evidence.

The claimants sought damages for fraudulent misrepresentations made by the first and fourth defendants.

The claimants were a German company and a German bank. The first defendant was an investment advisor and turnaround specialist. It was alleged that, at a meeting in Germany in October 2016, the first defendant, via the fourth defendant, had made fraudulent oral misrepresentations about the source of funds being injected into an airline company. The claimants asserted that, based on those misrepresentations, they extended credit to the airline and lost money when Monarch became insolvent in October 2017 (didn’t we all, didn’t we all). The claim was issued in December 2020, with the claim forms being deemed served on 14^th January 2021, and it came to trial in June and July 2024.

The judgment sets out the woebegone history of the relationship between the parties and the tragic end met by the airline. At paragraphs 195 to 202 Cockerill J falls to musing on the nature of memory and certainty, giving as she does some useful guidance as to how the courts should approach witness evidence, particularly in commercial cases (but we daresay her comments are equally valid outside this context). The author can do no better than to quote the passage in full:

“195.  Nearly eight years had passed since the [crucial] Meeting by the time this dispute came to trial. Against that background there is an obvious point as to the reliability of recollection – and as I have indicated the witnesses realistically accepted that their “unrefreshed” memories were either non-existent or unreliable. The parties are agreed that recollections can be fallible and that the court must have regard in particular to contemporaneous documentation, the parties’ motives and the inherent probabilities.

196.  I was of course reminded by the Defendants that in a fraud case a claimant bears a heightened burden of proof in the sense that cogent evidence is required to overcome the inherent unlikelihood of what is alleged: see e.g. Rix LJ in The Kriti Palm at [259].

197.  Reference was equally predictably made to the now classical passage in Gestmin SGPS SA v Credit Suisse (UK) Limited [2013] EWHC 3560 (Comm), [2020] 1 CLC 428, at [22] :

“… the best approach for a judge to adopt in the trial of a commercial case is, in my view, to place little if any reliance at all on witnesses’ recollections of what was said in meetings and conversations, and to base factual findings on inferences drawn from the documentary evidence and known or probable facts. This does not mean that oral testimony serves no useful purpose – though its utility is often disproportionate to its length. But its value lies largely, as I see it, in the opportunity which cross-examination affords to subject the documentary record to critical scrutiny and to gauge the personality, motivations and working practices of a witness, rather than in testimony of what the witness recalls of particular conversations and events. Above all, it is important to avoid the fallacy of supposing that, because a witness has confidence in his or her recollection and is honest, evidence based on that recollection provides any reliable guide to the truth.”

198.  The Claimants prayed in aid the following passage from Simetra Global Assets Ltd v Ikon Finance Ltd [2019] EWCA Civ 1413 [2019] 4 WLR 112 at [48] :

“In this regard I would say something about the importance of contemporary documents as a means of getting at the truth, not only of what was going on, but also as to the motivation and state of mind of those concerned. That applies to documents passing between the parties, but with even greater force to a party’s internal documents including e-mails and instant messaging. Those tend to be the documents where a witness’s guard is down and their true thoughts are plain to see. Indeed, it has become a commonplace of judgments in commercial cases where there is often extensive disclosure to emphasise the importance of the contemporary documents. Although this cannot be regarded as a rule of law, those documents are generally regarded as far more reliable than the oral evidence of witnesses, still less their demeanour while giving evidence….”

199.  Reliance was also placed on Avonwick Holdings Ltd v Azitio Holdings Ltd [2020] EWHC 1844 (Comm) at [102] – [103] , where the judge noted that a further reason to ” attach particular weight to the documentary evidence ” is where the factual evidence is given by persons not in their first language or through an interpreter, which can lead to difficulties in making any assessment of demeanour and which can give rise to issues where a witness looks evasive because of miscommunications.

200.  Finally I drew the parties’ attention to the important lecture given by Popplewell LJ to COMBAR last year: ” Judging Truth from Memory” . The Popplewell Lecture updates and expands upon the matters considered by the then Leggatt J in Gestmin . It deals with the value of recollection, the nature of the fact-finding exercise in commercial litigation, the science of memory and the problems which result from faulty encoding of memories.

201.  Passages of particular interest (either to myself or the parties) include the following:

“10  …determining what happened is not the only task. Commercial litigation often involves an inquiry into a witness’ state of mind. That state of mind may be an essential ingredient of the cause of action, as for example where claims are framed in constructive trust. But more generally, it matters what the witness knew, or believed, or was thinking or intended at a particular point in the narrative of events because that casts light on the events themselves. Fact-finding is concerned not only with what happened, but just as much with why it happened….

36.  …When we encode our memories we don’t photograph what is happening; we interpret what is happening, and that interpretation uses our schema. … So experience and expertise can make a big difference to what goes into our memory…. “We don’t see things as they are, but as we are”….

40.  The semantic memory can also corrupt a recollection by affecting it at the retrieval stage. Our beliefs, attitudes and approach, our worldview, our schema, changes over time. The recollection is affected by the schema at the time of retrieval, which may be different from that which applied at the time of the events in question…. As Leggatt J said in Gestmin “Memory is especially unreliable when it comes to recalling past beliefs. Our memories of past beliefs are revised to make them more consistent with our present beliefs.”…

52.  Further, encoding is often influenced by pride or wishful thinking. It is a common, although not universal, human tendency to want to portray our participation in events in a way which paints us in the best light. … it can also infect how witnesses pictures events to themselves when first encoding the memory…

55.  … contemporaneous documents… may be produced near the time, but they are produced after the memory has been encoded, and if there is an encoding fallibility, which there may be for all these different reasons, it infects the so called contemporaneous record every bit as much as other reasons for the fallibility of recollection which affect it at the storage and retrieval stage.

66.  One [other issue] is reconstruction from semantic memory. We assume that something happened because that is what we would expect to have happened. … our memories fill in gaps by reference to what we assume we would have done or would not have done. The witness will respond in cross-examination that they are sure that something did not occur because “I would never have done that”, or vice versa.

67.  The dangers here are several: things do not always happen as we expect them to, and may not have done so on this occasion. We are also applying our present semantic memory schema to our attitudes at a different time. A third is another common source of erroneous recollection, in my experience, which is, again, pride or wishful thinking. We like to suppose that we did or thought that which we now consider we ought to have done or thought.”

202.  The resonances between this paper and the parties’ arguments were considerable.”

Readers will appreciate that these comments land in the interplay between law, psychology, pragmatism and – perhaps – even philosophy. What is memory? How does it work? Is it reliable? Do I see the world as it is, or as I wish it to be? I think, therefore I am. At least, I think I think. Am I?

Whilst acknowledging that there are some members of the judiciary who would rather not dwell on the putative link between thought and existence, this passage in the judgment is a useful tool for any practitioner approaching a stale claim; it not only sets out the current position on the authorities, but supplements this with reference to the current judicial thinking on the subject at a high level, and it is not unreasonable to expect that other judges are likely to have regard to what is said. At the very least, considerable caution must be exercised when considering the uncorroborated evidence of witnesses striving to recall events occurring many years ago, particularly when these did not directly affect them at the time.

Applying this cautious approach to the facts, the court found that the claimants had not proven that the alleged representations had been made, and the claim therefore failed.

In doing so, Cockerill made the following comments, which will resonate all too well with many experienced practitioners:

“208. [Mr Ley] was the least satisfactory of the witnesses called. Even the Claimants conceded that he had a tendency not to listen carefully to the questions put. I found him very much focussed on his own vision and keen to give lengthy answers which did not answer the questions asked. Some of this appeared to be down to linguistic confusions (of the type alluded to in Avonwick ) which ironically arose from a situation where Mr Ley was listening to both German and English versions of the question or where translations were slightly imperfect; but that was by no means always the case.

209.  Often it was clear that he was simply determined to go where he would go and (as the Claimants again conceded) he did not focus on the questions as much as he should have done, giving the impression he preferred talking to listening. A simple example of his selective focus was his lack of clarity about whether or not he had been CFO of Wirecard Bank or only of Wirecard AG. His statement said he was CFO of Wirecard Bank; his opening salvo in cross-examination was to deny it. Whether or not he was, was immaterial. But it was revelatory that his first instinct was to blame the (non-existent) translator of his statement and that (one way or the other) he had not read all of his statement thoroughly.”

That old chestnut…By contrast:

“211.  Mr Hilz was an excellent witness. He was a quietly spoken, thoughtful person who consistently gave the impression that he was trying to assist the court – and the mark of the extent to which this was the case was that not the slightest attempt was made by the Defendants to suggest otherwise. He was described by his opposite number, Mr Christopher Bennett, as being precise and ” particularly careful and meticulous “, and that seemed very apt to describe him as a witness also. He listened carefully to questions and gave reflective, balanced answers. He was not shy of accepting appropriate assumptions. He was the antithesis of a partisan witness – notably in re-examination saying: ” Let me try and word …my answer in such a way that it can be acceptable to both parties. “. I have no hesitation in accepting the truthfulness of his evidence and his desire to help the Court, though I still have to evaluate its accuracy.”

Notwithstanding her favourable impression of him, Cockerill J went on to find that Mr Hilz’ recollection was inaccurate, albeit innocently so.

Comment

As well as being of interest to those of us who were personally affected by Monarch’s demise, the case is a useful reminder of the variability of the human memory, and of its unreliability over the course of time. It may also be of assistance in persuading a recalcitrant judge of the fallibility of recollection after the lapse of some years.

About the Author

Called to the Bar in 1997, Sarah Prager KC has been listed in the legal directories as a Band 1 practitioner in travel law for many years, and, more recently, listed in aviation as well. Together with her colleagues at Deka Chambers, Matthew Chapman KC, Jack Harding, Dominique Smith, Tom Yarrow and Henk Soede, she co-writes the leading legal textbook in the area, and has been involved in most of the leading cases in the field in the last decade. She undertakes purely domestic high value personal injury work as well as cross border work and has a wealth of experience of difficult and sensitive cases.