Court of Appeal finds trial should be adjourned due to unavailability of important witness

The Court of Appeal has held that a trial should be adjourned due to the unavailability of an important witness, finding that the relevant test is whether refusing to grant the adjournment would lead to an unfair trial. The same test should be applied whether it is a party’s own unavailability or the unavailability of an important witness that is in issue: Bilta (UK) Ltd & Ors v Tradition Financial Services Ltd [2021] EWCA Civ 221.

As the decision recognises, whether a trial can be conducted fairly without the presence of a particular witness will depend on the circumstances of each case. In some cases, contemporaneous documents may be more important than oral evidence and a fair trial can proceed. However, cases where there is an accusation of dishonesty are “paradigm examples” where the trial judge will benefit from seeing the witness being cross-examined, and so the possibility of a fair trial may be less likely.

If a court determines that the trial will be unfair without the relevant oral evidence, it will normally grant the adjournment unless this is outweighed by prejudice suffered by the other party which could not be compensated for. It seems likely to be relatively rare that this will be the case.

While the Court of Appeal’s focus in this case was on unfairness to the party rather than the witness, it expressed the view that a court can and should also consider fairness to the witness, particularly where the outcome of a case could have potentially serious consequences for them personally or professionally.

Background

The underlying litigation concerns claims for damages brought by five companies in liquidation and their joint liquidators against the companies’ broker, arising out of the spot trading of carbon credits known as European Union Emissions Trading Allowances (“EUAs”). It is alleged that the trading of EUAs was part of a large-scale VAT fraud. The defendant is alleged to have dishonestly assisted the directors of the claimant companies in the breach of their fiduciary duties and to have participated in fraudulent trading.

A central part of the defendant’s case is that it did not act dishonestly. It intended to call a number of factual witnesses including Lucy Mortimer, who was the head of the desk responsible for EUA trading at the defendant. A witness statement for Ms Mortimer was served in November 2019 and at that stage it was not anticipated that there would be any issue with her giving evidence at trial.

However, in August 2020 Ms Mortimer was diagnosed with a serious illness and it was clear by November 2020 that it would be impossible for her to give evidence at a trial in January 2021. At that stage, it was doubtful that she would ever be in a position to give evidence and as such the defendant served a hearsay notice in respect of her witness statement and prepared to conduct the trial without her giving live evidence.

At the end of 2020, Ms Mortimer’s prognosis had improved and there was good reason to expect her to be fully recovered by the end of September 2021. In January 2021, therefore, the defendant issued an application to adjourn the trial on this basis. This application was supported by a witness statement from Ms Mortimer stating that she felt strongly that the allegations of dishonesty against her should not be resolved by a judge without hearing her evidence directly.

The judge at first instance dismissed the application, finding that Ms Mortimer’s unavailability was not a sufficient reason for granting an adjournment so close to the trial listing date. The defendant appealed to the Court of Appeal.

Decision

The Court of Appeal allowed the appeal and held that the trial should be adjourned to the first available date after 1 October 2021. Nugee LJ delivered the leading judgment, with which Peter Jackson and David Richards LJJ agreed.

Relevant test

Having reviewed the relevant case law, the Court of Appeal held that the test to be applied when considering an application to adjourn a trial is whether the trial will be fair in all the circumstances if it does go ahead.

This assessment will be fact sensitive, although the inability of a party to attend the trial due to illness will almost always be a highly material consideration, and this principle also extends to important witnesses. The significance to be attached to the unavailability of an important witness will vary from case to case, in particular because the significance of oral evidence will vary. It may be critically important, or alternatively it may be that the contemporaneous documents are critical and the oral evidence is merely ancillary. But the unavailability of an important witness will usually be material and may be decisive.

Having determined that a refusal to grant an adjournment would make the resulting trial unfair, a court should ordinarily grant the adjournment, regardless of the inconvenience to the other party or other court users, unless this is outweighed by an injustice to the other party that could not be compensated for.

Application to the case

The Court of Appeal said that Ms Mortimer was an important witness for the defendant and that cases where an individual is accused of dishonesty are a “paradigm example” of where a trial judge will benefit from viewing witness cross-examination.

The case against Ms Mortimer was heavily based on inferences from transcripts of telephone conversations and the defendant was justified in wanting her to give oral evidence to explain why those inferences were not justified. Although she had given a witness statement, the weight that could attach to it would undoubtedly be limited if it her evidence was not to be tested in cross-examination. The court held that it would be unfair for the trial to proceed in circumstances where it was very likely that Ms Mortimer would be able to give oral evidence at trial in or after October 2021.

Further, it was not suggested that the adjournment would cause prejudice to the claimants which could not be compensated. The defendant had offered to pay the claimants’ reasonable legal costs thrown away by the adjournment and to pay interest until the commencement of the re-listed trial in the event that the claim succeeded.

Fairness to the witness

For the purposes of considering the adjournment application, the court was concerned with fairness of the trial for the defendant rather than for Ms Mortimer. However, the court also expressed the view, in obiter comments, that there was “considerable force” in the argument that a court can and should have regard to the fairness to witnesses as well.

There were significant potential professional and personal consequences for Ms Mortimer if a court were to find that she had been dishonest, and she wanted the opportunity to refute these allegations before a judge. This could be a factor in determining whether to grant an adjournment although it was not necessary to consider it in this case.