Fairness and Adjournments: Guidance from the Court of Appeal

Thu, 04 Mar 2021

In Bilta (UK) Ltd (in liquidation) & Others v Tradition Financial Services Ltd [2021] EWCA Civ 221 the Court of Appeal examined the principles to be applied when a party seeks an adjournment because a witness is unable to attend the trial due to ill-health.

In allowing the appeal, the Court of Appeal highlighted that the key principle to be applied was whether the refusal to grant an adjournment will lead to an unfair trial.

Factual Background

The claim concerned a type of VAT fraud known as “missing trader intra-community” fraud. The Claimants alleged that the Defendant had either: (1) dishonestly assisted in this fraud; or (2) had committed fraudulent trading pursuant to section 213 of the Insolvency Act 1986.

A substantial part of the Defendant’s defence was that it had not been dishonest throughout the course of its dealings with the Claimants. The Defendant intended to call four of its senior employees to give oral evidence at the trial.

One of these witnesses, Ms Mortimer, who was head of the desk responsible for the relevant trades, became ill in August 2020 and by November 2020 it became clear that she would not be able to give her evidence orally at the trial in January 2021. At this stage, the prognosis for her health was not good. On this basis, the Defendant served a hearsay notice in respect of Ms Mortimer’s evidence.

It transpired that shortly before Christmas 2020, Ms Mortimer received a more positive prognosis, and it was believed that she would be in a position to be able to give oral evidence at a trial if it were to take place after September 2021.

Against this backdrop, the Defendant made an application to adjourn the trial on 6^th January 2021 (the trial was meant to commence on 25^th January 2021) on the basis of Ms Mortimer’s ill-health and the fact that the other three of its witnesses were concerned about travelling to court in light of the COVID pandemic.

Mr Justice Marcus Smith refused the application to adjourn.

The Defendant appealed this decision solely in relation to Ms Mortimer’s ill-health. The position of the other three witnesses did not form part of the appeal.

The Decision of the Court of Appeal

The appeal was allowed.

Lord Justice Nugee gave the leading judgment which was endorsed by Lord Justice Peter Jackson and Lord Justice David Richards.

Legal Principles to be Applied

After considering numerous authorities at length, at [31] to [47], Lord Justice Nugee arrived at the following principles to be applied in cases such as these:

1. Whether the question is framed in terms of the requirements of Article 6 (ECHR) or the application of the overriding objective (CPR), “the test is the same, namely whether a refusal of an adjournment will lead to an unfair trial”; [49(1)] (Emphasis my own).
2. The Court will not adopt a “non-Wednesbury” review of the lower court’s decision. The question as to whether the trial will be ‘unfair’ is an evaluative one and as such the appeal court will simply assess “whether the lower court was entitled to reach the decision it did” in relation to the first question identified above; [49(2)].
3. “When considering whether a particular outcome is fair, it should not be assumed that only one outcome is fair”; [49(3)].
4. “Fairness involves fairness to both parties. But inconvenience to the other party (or other court users) is not a relevant countervailing factor and is usually not a reason to refuse an adjournment”; [49(4)]. The qualification to this principle is set out by Nugee LJ at [30], where he stated, “unless this [the unfairness] were outweighed by injustice to the other party that could not be compensated for.”
5. A “sharp distinction” cannot be drawn between the non-attendance of a party and the non-attendance of a witness; [50] to [52].
6. “What fairness requires will depend on all the circumstances of the case”; [52]. Further, at [54], “the importance of a particular witness’s oral evidence to the fairness of the trial will all depend on the facts, and the question cannot be approached in a mechanistic or box-ticking manner.”
7. Having acknowledged that CPR Pt. 1.1(2) requires consideration of matters in addition to the need to deal with a matter expeditiously and fairly, Nugee LJ stated, “but in the ordinary case if a judge concludes that the unavailability of an important witness would make the resulting trial unfair, it is difficult to see how an adjournment could properly be refused”; [55].

Application to the Present Case

The Court found that it would be unfair for a trial to proceed in the absence of Ms Mortimer’s oral evidence for the following reasons:

1. She would be an important witness for the Defendant at trial.
2. The Claimants allege that she was dishonest; in this regard Nugee LJ commented, “cases where an individual is accused of dishonesty are paradigm examples where the trial judge will benefit from seeing the witness being cross-examined”; [62].
3. There would not be any uncompensatable prejudice to the Claimants. The Claimants’ case “does not rely on recollections of witnesses which would be liable to fade, and there seems no reason to think that the presentation of its case will be adversely affected.” It was also noted that the Defendant had offered to pay the costs related to the adjournment; [63].

Two Final Comments

The Court made two other observations which are noteworthy:

1. The Court noted that a finding of dishonesty against Ms Mortimer could have serious personal and professional consequences. Whilst the Court did not explicitly address the relevance of this issue, Nugee LJ at [66] stated that he wanted to leave the matter open for future courts to address but did add that “to my mind there is considerable force in the suggestion that the Court can, and should, have regard to fairness to witnesses as well.”
2. In the course of this appeal there was no question as to the legitimacy and/or truthfulness of Ms Mortimer’s complaints of ill-health (the reason for seeking an adjournment). Nugee LJ, at [39], explicitly endorsed by Peter Jackson LJ at [67], highlighted that in cases where the genuineness or sufficiency of the reason for the adjournment is questionable, the Court should apply the guidance set out by Norris J in Levy v Ellis-Carr [2012] EWHC 63 (Ch). In this regard, Peter Jackson LJ, at [67], provided this guidance, “in every case, the court will first need to assess the facts behind the application, and where a litigant fails to substantiate the reason for an adjournment, the outcome of the exercise of discretion will scarcely be in doubt.”

Thomas Beasley, Pupil at No5 Barristers' Chambers

Thomas Beasley View Profile