Where are you? The “missing” witnesses and drawing an adverse inference

The issue – adverse inferences

In June I wrote an article on a sub-letting trial which I had recently concluded, and one of the points raised was the importance to a party of their putting forward the best, and at times most obvious, evidence. I said:

Lastly, often one of the most compelling features of a case is what is not there more than what is. Why was there nothing (email, letter, statement, etc) from those persons found at the premises? Why was there nothing from the defendant’s adult children who apparently sometimes stayed there? Why was there nothing from the husband (not least to refute the notion that his wife lived with him)? Why was there nothing from the neighbours who surely after 26 years of the defendant apparently living at the premises could have confirmed as much? Don’t forget to consider and use authorities such as Wisniewski v Central Manchester Health Authority [1998] PIQR P324 where Brooke LJ considered the court’s ability to draw adverse inferences from the absence or silence of a witness (that can of course go both ways).

Last month I was in trial dealing with an “only or principal home” possession claim and my skeleton argument highlighted this same issue, and indeed the same authority, in a case where the defendant called no other witnesses than themselves:

Conversely, the Defendant’s evidence in support of her case is limited in the extreme.  She has further not called her husband, Mr……. or any person from the neighbouring flats and houses to the Property to give evidence.  Such absence is telling.  In Wisniewski v Central Manchester Health Authority [1998] PIQR P324 at [340] Brooke LJ considered the issue of “missing” witnesses and summarised the relevant principles:

“(1) In certain circumstances a court may be entitled to draw adverse inferences from the absence or silence of a witness who might be expected to have material evidence to give on an issue in an action.

(2) If a court is willing to draw such inferences, they may go to strengthen the evidence adduced on that issue by the other party or to weaken the evidence, if any, adduced by the party who might reasonably have been expected to call the witness.

(3) There must, however, have been some evidence, however weak, adduced by the former on the matter in question before the court is entitled to draw the desired inference: in other words, there must be a case to answer on that issue.

(4) If the reason for the witness’s absence or silence satisfies the court, then no such adverse inference may be drawn. If, on the other hand, there is some credible explanation given, even if it is not wholly satisfactory, the potentially detrimental effect of his/her absence or silence may be reduced or nullified.”

Caution

Against that background it is important to note that Sir Ernest Ryder SPT cautioned in Manzi v King’s College Hospital NHS Foundation Trust [2018] EWCA Civ 1882 at [30]:

Wisniewski is not authority for the proposition that there is an obligation to draw an adverse inference where the four principles are engaged. As the first principle adequately makes plain, there is a discretion i.e. “the court is entitled [emphasis added] to draw adverse inferences”.”

Current jurisprudence

The brilliant blog – Civil Litigation Brief – recently reported on a High Court judgment by DHCJ Hodge QC in Ahuja Investments Ltd v Victorygame Ltd & Anor [2021] EWHC 2382 (Ch) in which the opening paragraph gave a flavour of what was to come:

In his farewell speech from the Delhi High Court, Justice J.R. Midha is reputed to have said that: “In the Court of Justice, both the parties know the truth; it is the judge who is on trial.” Never has that perceptive observation resonated more fully with me than in the present case, where both parties have signally failed to assist the court by calling evidence from three highly relevant potential witnesses, in breach of their duty under CPR 1.3 to help the court to further the overriding objective to deal with the case justly and at proportionate cost. As a result, this is not so much a case of “Hamlet without the Prince” as one of Hamlet without any of Polonius, Gertrude or Laertes (or Rosencrantz and Guildenstern without Hamlet, Claudius or the Player).

The facts of the case are unimportant for current purposes but rather the Judge’s consideration of Wisniewski and a Court of Appeal “warning” not to over-use the principles raised therein – in Magdeev v Tsvetkov [2020] EWHC 887 (Comm) at [150]-[154] – is of some interest and instruction:

65. In my judgment, before the discretion to draw an adverse inference or inferences can arise at all, the party inviting the court to exercise that discretion must first:

1.establish (a) that the counter-party might have called a particular person as a witness and (b) that that person had material evidence to give on that issue;

2.identify the particular inference which the court is invited to draw; and

3.explain why such inference is justified on the basis of other evidence that is before the court.

Where those pre-conditions are satisfied, a party who has failed to call a witness whom it might reasonably have called, and who clearly has material evidence to give, may have no good reason to complain if the court decides to exercise its discretion to draw appropriate adverse inferences from such failure. A good illustration of this, in the context of the present case, may be afforded by what passed between Mr Singh and Mr Jandu over the phone in the few minutes before exchange of contracts for the sale of the property at 15.11 (GMT) on 1 March 2016.

To add to the Manzi, Magdeev and Ahuja line of authorities we also have Lord Leggatt’s lead judgment in the recent Supreme Court case of Royal Mail Group Ltd v Efobi [2021] UKSC 33 – referred to in Ahuja at [31] – at [41]:

The question whether an adverse inference may be drawn from the absence of a witness is sometimes treated as a matter governed by legal criteria, for which the decision of the Court of Appeal in Wisniewski v Central Manchester Health Authority [1998] PIQR P324 is often cited as authority. Without intending to disparage the sensible statements made in that case, I think there is a risk of making overly legal and technical what really is or ought to be just a matter of ordinary rationality. So far as possible, tribunals should be free to draw, or to decline to draw, inferences from the facts of the case before them using their common sense without the need to consult law books when doing so. Whether any positive significance should be attached to the fact that a person has not given evidence depends entirely on the context and particular circumstances. Relevant considerations will naturally include such matters as whether the witness was available to give evidence, what relevant evidence it is reasonable to expect that the witness would have been able to give, what other relevant evidence there was bearing on the point(s) on which the witness could potentially have given relevant evidence, and the significance of those points in the context of the case as a whole. All these matters are inter-related and how these and any other relevant considerations should be assessed cannot be encapsulated in a set of legal rules.

Impact beyond adverse inferences

Finally, it is worth noting what DHCJ Hodge QC said in Ahuja at [32]-[33] (the “third aspect” concerned rectification):

“32.The omission to call a material witness or witnesses without reasonable explanation may have a significance that goes beyond the drawing of appropriate adverse inferences. Three particular aspects are of particular relevance to the present case. First, in a case where there are contemporary documents which appear on their face to provide cogent evidence on an issue which is contrary to the evidence of one of the parties to the litigation, the court may decide to take the documents at their face value, and decline to accept that party’s evidence to the contrary, where this is unsupported by the evidence of a non-party witness who clearly could have given evidence material to that issue and who might have, but has not, been called by that party as a witness. The same may apply where the evidence of one of the parties to the litigation is contrary to the known or probable facts.

33.Second, the failure to call a witness who might have been able to give evidence on a material issue may mean that the court is left with no direct evidence at all on that issue. In that situation, the party who might be expected to have called that witness cannot complain if the court rejects that party’s case on that issue and either makes a finding based on the inherent probabilities presented by the limited evidence that is before the court, or simply concludes that it is unable to make any finding of fact at all on that issue. This is an alternative way of analysing my conclusion as to what was said during the telephone conversation between Mr Jandu and Mr Singh between 15.02 and 15.06 GMT on 1 March 2016 (if Ahuja can be taken to have been advancing a positive case on that issue notwithstanding the paucity of Mr Singh’s evidence on the point).

Conclusion

It is clear that simply not calling a witness without apparent reason is not, in itself, necessarily sufficient to enable a court to draw adverse inferences (or indeed reach other negative determinations). However the “Wisniewski principle” remains sound and requires consideration as to its possible application in housing fraud/misuse cases.

Cornerstone on Social Housing Fraud – 2nd Edition now published

“A serious abuse of public housing resources for personal gain”

These were the words of a district judge concluding his judgment yesterday (3 June 2021) in a sub-letting possession case brought by a housing association. Regrettably such cases are not unusual and this blog has considered sub-letting matters previously.

However, I thought it might be helpful to highlight a few issues that stood out in this case which may assist and inform those dealing with similar cases.

Firstly, significant evidence requires, in most instances, a rebuttal / explanation. For example here, why were there padlocks on the internal room doors? Why did one of the occupants found at the property by the association describe the defendant’s claimed bedroom as a storage room? Why did the electoral roll evidence obtained by way of the credit reference report show multiple people registered there in the last 10 years or so, and often for long periods? Who were they? Why did the defendant’s bank accounts show so many cash payments into her account over the years?

The absence of clear (or any) answers to these matters in the pleaded case or witness evidence is significant. The attempt to “fill the gap” during cross examination may make matters even worse (and did here).

Secondly, sometimes you need to step back and see the bigger picture. A 2nd witness statement by the defendant served less than a week before trial is undoubtedly frustrating and should not have been necessary so late but what is to be served by opposing its submission? That is not to say there will never be a good reason – e.g. it raises new matters you would have wished to investigate – but where it largely says more of the same (e.g. my bills always went to the demised premises’ address) opposition to its admission can appear churlish, insecure and unattractive. In this instance it actually helped the association’s case because they could say that the defendant had failed even at that late stage to provide sufficient responses to the evidence seemingly against her.

Thirdly, your evidence may not have a knock-out point but that is not fatal to the case. Indeed my skeleton argument said as much: “It may be argued on behalf of the first defendant that individually none of the pieces of information provide conclusive proof of any sub-letting”. To paraphrase the district judge’s more artistic position on this, “Individually all of the above may not be enough but put all the pieces together and it beats with a single rhythm”. See also Lord Justice Mummery’s remarks in Lambeth LBC v Vandra [2006] H.L.R. 19 at para. 13:

“There was no direct evidence, it is true, but there was sufficient evidence from which a reasonable inference could be made about a state of affairs in which a number of people were paying to live in Miss Vandra’s flat and were in fact living there.”

Fourthly, remember that not every question in cross examination is designed to “catch the witness out”, though you may well be laying the trail. For example, it had been said that one of the occupants found at the premises was the defendant’s sister. A little time was spent at the start of the cross examination of the defendant asking her to explain her family set up. It became clear by that point that the said occupant was not after all her sister, and the other person found with her was not a family member as claimed.

Lastly, often one of the most compelling features of a case is what is not there more than what is. Why was there nothing (email, letter, statement, etc) from those persons found at the premises? Why was there nothing from the defendant’s adult children who apparently sometimes stayed there? Why was there nothing from the husband (not least to refute the notion that his wife lived with him)? Why was there nothing from the neighbours who surely after 26 years of the defendant apparently living at the premises could have confirmed as much? Don’t forget to consider and use authorities such as Wisniewski v Central Manchester Health Authority [1998] PIQR P324 where Brooke LJ considered the court’s ability to draw adverse inferences from the absence or silence of a witness (that can of course go both ways).

Conclusion
The district judge had little hesitation in finding that there had been a sub-letting of the whole of the premises, and that the notice to quit had brought the remaining common law tenancy to an end at its expiry. Even had it have been only of part the district judge indicated that he would have made an outright order – this was not the case for a second chance.

As well as the “usual orders” an unlawful profit order in the sum of £145,177.89 was made against the defendant based on estimated figures of the rents received by her over many years.

Finally, I must pay particular tribute to association’s counter fraud specialist, Raj Vine, and the intelligence officer Magnus Lærke-Hall for their fantastic and crucial work without which there could have been no successful outcome. As always, I was also served by excellent solicitors, this time in the form of Katrina Robinson and, before her, Victoria Smith of Capsticks.

“Cornerstone on Social Housing Fraud” 2nd Edition

Judgment obtained by fraud?

On 24 February 2021 the Court of Appeal handed down judgment in Dale v Banga and others [2021] EWCA Civ 240. The opening paragraph of the (main) judgment of Lady Justice Asplin makes it clear what the issue in the appeal was:

“This appeal raises the question of what the appeal court should do when fresh evidence is adduced after a trial which allegedly shows that the judgment below was obtained by fraud, the conduct relied upon being that of a witness and of a party to the action which took place after the events in issue, and is unrelated to the issues which were before the court. In particular, it raises the following questions: whether the fresh evidence (permission to rely upon it having already been granted) is capable of establishing that the Respondents misled the judge at trial by asserting that a letter of revocation in relation to a will had been duly attested; if so, whether the question of whether the judge was misled (the fraud issue) should be referred to the lower court to be determined or should be the subject of a separate action; and, if it is determined that the lower court was misled by fraud, whether a previous will should be admitted to probate on the basis of the original judge’s obiter dicta.”

This is an issue which this blog has previously dealt with.

The “fresh evidence” concerned the discovery that one of the two attesting witnesses to the letter had been sent to prison for fraud offences, and Mr Banga himself had been indicted with attempting to pervert the course of justice (though no evidence was offered at trial and he was acquitted):

“7…It is alleged, nevertheless, that it is incontrovertible that Mr Banga had sought to pervert the course of justice by the production of false invoices. 

8. Mr Brennan, on behalf of Mrs Dale, submits that if the fresh evidence had been available to be adduced at trial it would have entirely changed the way in which the judge approached the question of the proper attestation of the Letter and his conclusion in that regard. It is said that the fresh evidence: undermines Mr Arif’s credibility as a witness of fact (as to the attestation of the Letter); supports the conclusion that Mr Arif and Mr Banga are sufficiently dishonest to have attempted to deceive the court about the circumstances in which the Letter was signed by the attesting witnesses and even that it was a forgery and was produced on another occasion; made Mr Arif the obvious person to have been chosen to assist in attempting to deceive the court; and gave Mr Arif an obvious motive to assist Mr Banga and his family.”

Coming back to Asplin LJ’s judgment, she explained what would be necessary to allow for a set aside of the final judgment:

  • It is not sufficient that the evidence given below can now be proved to have been mistaken.
  • It is not sufficient that a witness committed perjury.
  • “It is necessary that the judgment was obtained by fraud and that the fraud was that of a party to the action or was at least suborned by or knowingly relied upon by that party” (27).
  • There are two options then available – a new action to set aside the judgment (as preferred by the Court of Appeal – Salekipour v Parmer [2018] QB 833) or an appeal against the original order as in the present case, alleging that the judgment upon which it is based was obtained by fraud (39-41).

As for the test on appeal:

“42…It seems to me that it is necessary to decide whether the new evidence is capable of showing that the judge was deliberately misled by the Respondents and that the judgment may have been obtained by fraud. It must be sufficient to justify pleading a case of fraud. It must be capable of showing that there was conscious and deliberate dishonesty which was causative of the judgment being obtained in the terms it was. The conscious and deliberate dishonesty must be that of a party to the action, or was at least suborned by or knowingly relied upon by a party.

43. Secondly, if that threshold test is satisfied, the court must determine whether on the facts and in the circumstances of the particular case, it is appropriate that the fraud issue should be remitted or otherwise dealt with within the same proceedings. There is no question but that the appeal court has power to “refer any claim or issue for determination by the lower court”: CPR 52.20(2)(b). The question is whether the discretion to do so should be exercised. It is not possible to list the matters which will be relevant to the exercise of that discretion because they inevitably depend on the circumstances.”

Ultimately, the court declined to remit the issue of fraud to the lower court and dismissed the appeal:

“45. Unlike in Noble v Owens, the new evidence is of allegedly similar fact and bad character. It does not go directly to the central matters of fact before the judge. It requires inferences to be drawn based upon the alleged lack of credibility of the witnesses who gave evidence before him and their alleged propensities. It is tangential. Furthermore, all of the conduct from which it is said that the inferences should be drawn post-dates the alleged attestation of the Letter.”

Cases cited in judgment:

Odyssey Re (London) Ltd & Ors v OIC Run Off Limited & Ors [2000] EWCA Civ 71

Cinpres Gas Injection Ltd v Melea Ltd [2008] EWCA Civ 9

Takhar v Gracefield Developments Ltd & Ors [2020] AC 450

Royal Bank of Scotland plc v Highland Financial Partners lp [2013] 1 CLC 596

Noble v Owens [2010] EWCA Civ 224, [2010] 1 WLR 2491

Salekipour v Parmar [2017] EWCA Civ 2141, [2018] QB 833

The (current) notice periods for “fraud” possession actions under Covid-19

Introduction
This is a short article on the notice provisions for possession actions relying on:

  1. A notice to quit – where sub-letting / parting with possession of the whole is alleged, and/or it is said that the tenant(s) was not living at the demised premises as their only or principal home at the time the notice expired.
  2. A notice seeking possession – where it is alleged that tenant(s) were granted the tenancy because of a false statement (i.e. grounds 5 or 17 of Schedule 2 to the Housing Acts 1985 or 1988 respectively).

Notices to quit
The “easy” part of the explanation is that notices to quit have never been reformed by reason of the pandemic under the Coronavirus Act 2020 or otherwise save so far as concerns Rent Act tenancies. That remains the case.

Notices seeking possession
The notice seeking possession route is more complicated and I have chaired a recent webinar on the subject with four colleagues from Cornerstone Barristers. I have also produced a table of the changes but you can also of course check the amended notice sections of the Housing Acts and/or the Regulations themselves.

To remind ourselves of the wording of ground 5 / ground 17:

“The tenant is the person, or one of the persons, to whom the tenancy was granted and the landlord was induced to grant the tenancy by a false statement made knowingly or recklessly by —

(a)the tenant, or

(b)a person acting at the tenant’s instigation.”

The Coronavirus Act 2020, Schedule 29 had changed the usual 14-days (assured tenancies) and 28-days (secure tenancies) notice period to 3 months and now this temporary amendment has itself been amended by the Coronavirus Act 2020 (Residential Tenancies: Protection from Eviction) (Amendment) (England) Regulations 2020 from 29 August 2020 to 31 March 2021.

The effect is that:

  1. Ground 5 requires 28-days notice so long as it is not joined by any other grounds other than 1, 2ZA and/or 2A (so long as with 1 at least 6 months rent is unpaid at the date of service). Also Ground 2 (no period) and section 84A (28 days (periodic) / 1 month (fixed term)) Schedule 29 changes have been suspended and these can include any other ground.
  2. Ground 17 requires 14-days notice so long as it is not joined by any other grounds other than 14A and/or 14ZA. Also Ground 7A (28 days (periodic) / 1 month (fixed term)) and Ground 14 (no period) Schedule 29 changes have been suspended and these can include any other ground.

Pre-action conduct and committal – a “practice note”

In Jet 2 Holidays Ltd v Hughes [2020] 1 WLR 844 the Court of Appeal held that:

  1. CPR r 32.14, the provision which provides for committal proceedings against a person if they make, or cause to be made, a false statement in a document verified by a statement of truth without an honest belief in its truth, did not confer jurisdiction to bring committal proceedings in respect of a witness statement that had been made before the commencement of proceedings.
  2. However, if a statement made before the commencement of proceedings interfered with the due administration of justice the court would be able to exercise its inherent power to commit for contempt in respect of it.
  3. Since pre-action protocols were now an integral and highly important part of litigation architecture, a dishonest witness statement made before the commencement of proceedings in purported compliance with a pre-action protocol was capable of interfering with the due administration of justice, even though, following a challenge by the prospective defendant to the truth of the statement, proceedings for substantive relief were never issued.
  4. The witness statements in the present case were closely connected to the administration of justice and, if false, interfered with it, thus giving rise to jurisdiction to commit the defendants for contempt.
  5. However, on a true construction of CPR r 81.13(2) , the witness statements had been made “otherwise than in connection with any proceedings”, which phrase referred to proceedings commenced before the contempt was committed.
  6. Therefore, the application for permission to make a committal application should have been made to the Administrative Court, but that procedural defect would be waived, pursuant to paragraph 16.2 of CPR Practice Direction 81, and permission would be granted.
  7. That, further, since the new witness statements fell within CPR r 32.14 and there was a clear public interest in the bringing of contempt proceedings in respect of them, the claimant would be granted permission to amend its claim form to add the new grounds of contempt.

In the judgment of the court it was said:

“50. It is not satisfactory that false statements made in witness statements served before the commencement of proceedings in purported compliance with a PAP fall outside CPR r 32.14 . Nor is it satisfactory or convenient that any application for permission to bring contempt proceedings for such false statements must always be made to the Administrative Court pursuant to CPR r 81.13(2) . It is highly desirable, therefore, that the possibility of contempt in relation to such statements should be expressly addressed in the Civil Procedure Rules and a practice direction.”

A few months later, on the 16 July 2020, the 122nd amendment to the CPR was produced and included an amendment to the Practice Direction: Pre-Action Conduct and Protocols with effect from 1 October 2020:

“In paragraph 2, at the end insert “A person who knowingly makes a false statement in a pre-action protocol letter or other document prepared in anticipation of legal proceedings may be subject to proceedings for contempt of court.”.”

Pre-action letters are important in sub-letting, allocation fraud, etc cases where a possession claim or other proceedings are being contemplated and are usually expressly made pursuant to Part 3 of the Pre-action Protocol for Possession Claims by Social Landlords.

This may appear to take them outside of the amended Practice Direction, which says at paragraph 2:

“This Practice Direction applies to disputes where no pre-action protocol approved by the Master of the Rolls applies.”

but a proper reading of this practice direction must rather demonstrate that the amendment will apply even if a pre-action protocol operates.

It follows that it would be good practice from 1 October 2020 to include a warning in pre-action correspondence that false statements may lead to contempt proceedings.

Housing fraud in the Courts – 6 recent cases