Summary

A public house operator had more than a fanciful chance of establishing at trial that its agent had been dishonest and in breach of fiduciary duty by acting for another party in finding suitable property that it might well have wanted to buy. Further, most of a statement by a defence witness based on facts derived from documents and containing argument and submissions would be struck out as an abuse, as the witness had only indirect knowledge and was not an expert.

Facts

The claimant public house operator (W) applied to strike out the majority of a witness statement given on behalf of the second to fourth defendant companies (D), and the first to fourth defendants applied for summary judgment against W.

W had alleged that in regard to two property transactions D1 had dishonestly assisted a property-finding company (V), engaged by W, in breach of V's fiduciary duties to W, and that D1 had bribed V. The transactions had resulted in D2, D3 or D4 acquiring the freehold of properties in which W had, at the same time, acquired a leasehold interest. W alleged that it would or might have acquired the freehold if V had, in accordance with its fiduciary duties, told W that it was available for W to purchase. D1 was a director of D2, D3 and D4. W claimed damages, equitable compensation, an account of profits, and interest. The issues were whether (i) there should be summary judgment against W; (ii) the majority of the long statement by a director of D2-D4 who had had no involvement with D until eight years after the transactions should be struck out.

Held

(1) The summary judgment applications were based on an interpretation of disputed facts and on inferences derived from them. That, and the many documents submitted, meant that there would be the very type of mini-trial for which the summary judgment procedure was inappropriate. W's claims were more than fanciful. The reasons included the fact that the defendants had conceded for the purposes of the instant applications that W had a real prospect of establishing at trial that V had acted dishonestly and in breach of fiduciary duty to W in relation to both properties; that in addition to acquiring tenancies of properties for its business, W was also interested in acquiring freeholds where that made financial sense and that it had had the funds to do so at the relevant time, a fact known generally in the market; that in relation to the two properties, even if W had known that the freeholds were being acquired by a third party, it had not realised that there was a realistic opportunity for it to acquire the freeholds, and that if it had it would have entered into negotiations to do so; that it was obvious that an agent retained to advise a principal on any acquisition of an interest in property and who had identified a suitable property, potentially placed himself in a position of conflict if he then sought to introduce the property to another potential purchaser; that if the principal sought a leasehold property there could be conflicts regarding terms on the one hand, and capital value on the other. There was evidence that V had been more than a mere introducer of one property to D2 and that it played a role in negotiations over the terms of the freehold purchase, that it had asked for a fee from D2 that was intentionally and misleadingly treated by V and D2 as for work relating to another property. V had made clear to D1 that it wanted a fee for one of the properties and for it to be kept confidential, but D1 did not question that (see paras 21-31 of judgment). (2) The vast majority of the witness statement contained a recitation of facts based on documents, commentary on those documents, argument, submissions and expressions of opinion, all of which amounted to an abuse of process, and those parts should be struck out. Under CPR r.32.4 a witness statement was one containing evidence that the witness would be allowed to give orally, which was not the case with D's witness; he had no direct knowledge of the relevant events and would not be allowed to advance arguments and make submissions, as made clear in the Chancery Guide 7th edn, Appendix 9 para.7. The witness could not give expert evidence at trial, and any opinion evidence he gave would be based on indirect knowledge. Although the rules were subject to the overrriding objective in CPR Pt 1 there was no good reason why they should not apply to that witness (paras 32-33, 38-41).

Judgment accordingly