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England and Wales High Court (Commercial Court) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Commercial Court) Decisions >> Mad Atelier International BV v Manes  EWHC 1899 (Comm) (08 July 2021)
Cite as:  EWHC 1899 (Comm),  WLR(D) 378,  WLR 5294,  1 WLR 5294
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QUEEN'S BENCH DIVISION
Fetter Lane, London, EC4A 1NL
B e f o r e :
Sitting as a Judge of the High Court
| MAD ATELIER INTERNATIONAL BV
|- and -
|MR AXEL MANES
George Hayman QC and Watson Pringle (instructed by Macfarlanes LLP ) for the Defendants
Hearing date: Friday July 2 2021
Crown Copyright ©
Sir Michael Burton GBE :
"3.1 A trial witness statement must contain only –
(1) evidence as to matters of fact that need to be proved at trial by the evidence of witnesses in relation to one or more of the issues of fact to be decided at trial, and
(2) the evidence as to such matters that the witness would be asked by the relevant party to give, and the witness would be allowed to give in evidence in chief if they were called to give oral evidence at trial…
3.4 Trial witness statements should be prepared in accordance with –
(1) the Statement of Best Practice contained in the Appendix to this Practice Direction…
4.1 A trial witness statement must be verified by a statement of truth… and… must also include the following confirmation signed by the witness:
… I understand that it is not my function to argue the case, either generally or on particular points, or to take the court through the documents in the case.…"
The relevant part of the Appendix referred to in paragraph 3.4 (1) reads as follows:
" 3.6 Trial witness statements should not – …
(4) include commentary on other evidence in the case (either documents or the evidence of other witnesses)…"
"If a party fails to comply with any part of this Practice Direction, the court may, upon application by any other party or of its own motion, do one or more of the following –
(1) refuse to give or withdraw permission to rely on, or strike out, part or all of a trial witness statement…"
" 39. Mr Goldberger would not be allowed at trial to give oral evidence which merely recites the relevant events, of which he does not have direct knowledge, by reference to documents he has read. Nor would he be permitted at trial to advance arguments and make submissions which might be expected of an advocate rather than a witness of fact. These points are made clear in paragraph 7 of Appendix 9 to the Chancery Guide 7th ed (2013)…
40 Nor would Mr Goldberger be permitted to give expert opinion evidence at the trial. A witness of fact may sometimes be able to give opinion evidence as part of his or her account of admissible factual evidence in order to provide a full and coherent explanation and account…..Mr Goldberger, however, has expressed his opinions on market practice by way of commentary on facts of which he has no direct knowledge and in which he cannot give direct evidence. In that respect he is purporting to act exactly like an expert witness giving opinion evidence. Permission for such expert evidence has, however, been expressly refused.
41 I recognise, of course, that these rules as to witness statements and their contents are not rigid statutes. It is conceivable that in particular circumstances they may properly be relaxed in order to achieve the overriding objective in CPR r 1 of dealing with cases justly. I can see no good reason, however, why they should not apply to Mr Goldberger's witness statement in the present proceedings."
i) There is support in those authorities, as will be seen, for such hypothetical evidence as to what would or could have happened itself being evidence as to matters of fact, and hence falling within paragraph 3.1(1) of the Practice Direction;
ii) Mr Hayman did not refer to paragraph 3.1(2), which I have included in my citation above and upon which Mr Dhillon relied, which itself makes it clear that in addition to matters of fact the witness statement may include evidence which a witness "would be allowed to give in evidence in chief if they were called to give oral evidence at trial". Hence the test is one of admissibility at trial.
iii) Reference in witness statements to documents does not necessarily amount to "commentary", because paragraph 3.2 of the Practice Direction requires identification of documents to which the witness has been referred for the purpose of giving his statement.
iv) The 'sanction' in paragraph 5.2 is in any event discretionary.
i) S3(2) of the Civil Evidence Act 1972 confirms that there is no blanket rule that witnesses who are not independent experts cannot give opinion evidence:
"(1) subject to any rules of court made in pursuance of… this Act, where a person is called as a witness in any civil proceedings, his opinion on any relevant matter on which he is qualified to give expert evidence shall be admissible in evidence.
(2) It is hereby declared that where a person is called as a witness in any civil proceedings, a statement of opinion by him on any relevant matter on which he is not qualified to give expert evidence, if made as a way of conveying relevant facts personally perceived by him, is admissible as evidence of what he perceived."
I do not regard subsection (2) as qualifying or restricting the effect of (1).
ii) There are authorities which exemplify that witnesses of fact may be able to give opinion evidence which relates to the factual evidence which they give, particularly if they have relevant experience or knowledge. Such witnesses are not independent, and to that extent such evidence would need to be tested by reference to cogency and weight: ES (By her mother and litigation friend DS) v Chesterfield and North Derbyshire Royal Hospital NHS Trust  EWCA Civ 1284 esp at –,  and DN (By his father and litigation friend RN) v London Borough of Greenwich  EWCA Civ 1659 esp at -.
iii) This is particularly so where the evidence given is as to a hypothetical situation as to what would or could have happened: Kirkman v Euro Exide Corporation (CMP Batteries Ltd)  EWCA Civ 66 esp at , – and Rogers v Hoyle  QB 265 esp at – per Leggatt J (upheld in the CA). This is well illustrated in Globe Motors Inc v TRW Lucas Varity Electric Steering Ltd  1 CLC 712 CA at .
iv) Smith LJ in Kirkman at  considers that such hypothetical evidence is evidence of fact. Mr Hayman submits that this is limited to evidence as to what the person giving evidence himself, or possibly his company, could or would have done, but in my judgment it is not so limited and extends, provided that the witness can give evidence by reference to personal knowledge and involvement, to what would or could have happened in the counterfactual or hypothetical circumstances. This is particularly so in relation to quantum, where the Court is trying to "do its best on the material before it" (Capita Alternative Fund Services (Guernsey) Ltd v Drivers Jonas  EWCA Civ 1417 at  per Moore-Bick LJ) (and this Mr Dhillon submits must apply a fortiori in relation to a fraud claim, such as this). Thus Jackson J in Multiplex Constructions (UK) Ltd v Cleveland Bridge UK Ltd  EWHC 2220 (TCC) at  stated: "As a matter of practice in the TCC, technical and expert opinions are frequently expressed by factual witnesses in the course of their narrative evidence without objection being taken. Such opinion evidence does not have the same standing as the evidence of independent experts… However such evidence is usually valuable and it often leads to considerable saving of costs": and at  "Having regard to the guidance of the Court of Appeal and the established practice in TCC cases, I conclude that in construction litigation an engineer who is giving factual evidence may also proffer (a) statements of opinion which are reasonably related to the facts within his knowledge and (b) relevant comments based upon his own experience". This was approved by Beatson LJ in Globe at  as not confined to TCC cases, and also in Rogers by Christopher Clarke LJ in the Court of Appeal at . This is clearly illustrated in Parabola investments Ltd v Browallia Cal Ltd  QB 477 CA at  per Toulson LJ, where the evidence related to the amount by which a trading fund had been depleted as a consequence of a fraud and a sum reflecting the lost opportunity to trade: "The next task is to quantify the loss. Where that involves a hypothetical exercise, the court does not apply the same balance of probability approach as it would to the proof of past facts. Rather it estimates the loss by making the best attempt it can to evaluate the chances, great or small… taking all significant factors into account."
i) The Claimant would inevitably, in my judgment, have given instructions to its expert as to what it considers would have happened. Those instructions would have been incorporated into and addressed by the expert in his report; but by setting out that same information in witness statements there is not only much greater transparency but it enables the Defendant's Counsel to cross-examine the witnesses and seek to challenge or destroy their reliability, rather than getting at it indirectly through the expert. In Parabola, a non-independent witness as to the profit which the claimant would have made was strongly challenged in cross-examination, though in the event his evidence was accepted by the claimant's expert and the Judge– see per Toulson LJ at  and .
ii) For the same reason, whether or not Mr Hayman's challenge is properly made to an expert's report under this Practice Direction relating to witness statements, even if the passages in the witness statements were struck out, the Claimant's instructions to the same effect would still be before the experts, to be tested by them.
iii) It was common ground before me that if there had been documents setting out projections or forecasts they would have been admissible. They could be challenged as unreliable, but they would be before the experts and the judge. Subject only to the inevitable criticism that oral evidence to the same effect may be less reliable, I see no difference.
iv) It is clear that the experts would have looked at comparables by way of what the Defendant subsequently did in Dubai (or might have done) had they been available (Caldwell 10.43), but they are not.