knowledge 4 November 2016 |

A Genuine Claim can be Dismissed for Dishonest Evidence

The case involved a dispute about a building contract. The plaintiff company’s main witnesses were its principal and a quantity surveyor. Several different, often conflicting, versions of the claim were advanced both before and during the trial. At the end of the plaintiff ’s case, the defendants applied to dismiss the claim on the grounds that (1) the plaintiff ’s misconduct of the litigation amounted to an abuse of process and/or (2) the plaintiff had not established a prima facie case (so the defendant should not be required to go into evidence).

Court Criticism of Evidence

In considering the application, the court was highly critical of the evidence of both principal and quantity surveyor. The principal had not credibly explained how falsified invoices were included in the claim documents. The quantity surveyor had persisted in advancing particular claims although they had been agreed; had not independently verified the claims, and constantly amended the plaintiff ’s claim, such that on day 25 of trial, he was unable to say definitively what the plaintiff ’s claim was. The court found the principal’s evidence “tainted by lies and dishonesty” and the quantity surveyor’s “confused… confusing and… quite unreliable”.

Submissions of the Parties

On the abuse of process ground, the defendants relied on the decision of the English Supreme Court in Fairclough Homes Ltd v Summers² to argue that the court has an inherent jurisdiction to dismiss a claim for abuse of process, even where a damages claim has been established. On the “no case to answer” ground, they accepted that the test is whether at the conclusion of the plaintiff ’s evidence, the plaintiff has made out a prima facie case.³ The plaintiff argued that Fairclough is not law in Ireland; that because the plaintiff ’s evidence established at least some loss, the court could not dismiss the claim, and that the proper course was to defer any decision on the application until all the evidence, including the defendants’, had been heard.⁴

Court’s Consideration of Abuse of Process

The court noted that in Fairclough, a personal injuries action, the trial court accepted the defendants’ submission that the plaintiff had fraudulently exaggerated his injuries to a very significant extent. The English Supreme Court held that the trial court had jurisdiction to strike out a claim during trial as an abuse of process, even where the court has concluded that  the defendant is liable in damages in some amount, though Lord Hope held that “that power should in principle only be exercised where it is just and proportionate to do so, which is likely to be only in very exceptional circumstances” and that Fairclough itself was not such a case.

The court also referred to Irish authorities on exaggeration of loss, in particular, Vesey v Bus Éireann,⁵ where the plaintiff had misled his own and the defendant’s doctors about the severity of his injury. In the Supreme Court, Hardiman J said:

“I cannot agree, either, that it is the responsibility of a trial judge to ‘disentangle’ the plaintiff ’s case when it has become entangled as a result of lies and misrepresentations systematically made by the plaintiff himself. The procedure in our courts is an adversarial one and the defendant is entitled to have the plaintiff’s case presented by him and accepted on its merits or otherwise, as these appear from the plaintiff’s presentation and cross-examination. For the trial judge to make on behalf of the plaintiff the best case he can in such circumstances would risk the loss of the appearance of impartiality…

It is interesting … that in the United States there is a well established jurisprudence on the inherent power of a court to dismiss an action for ‘flagrant bad faith’: see National Hockey League v. Met. Hockey Club (1976) 427 US 639.

The power will be exercised in circumstances such as dishonest conduct by a litigant, obstruction of the discovery process, abuse of the judicial process or otherwise seeking to perpetrate a fraud on the court: see Link v. Wabash Railroad Co. (1962) 370 U.S. 626.

The American context is of course rather different from that prevailing here. In particular, the American courts usually lack the power to penalise conduct of the relevant sort by an appropriate order as to costs. But there is plainly a point where dishonesty in the prosecution of a claim can amount to an abuse of the judicial process as well as an attempt to impose upon the other party.”

The court noted that though there was some divergence between the English and Irish cases, the Irish cases recognised that a plaintiff’s dishonesty might reach a point where the abuse of process requires the ultimate sanction of striking out the claim, to prevent further abuse and oppression of the defendants. The court has a power and a duty to protect its own process from such abuse. It will be only rare and exceptional cases that will require the ultimate step of striking out or dismissing the claim, but this was such a case. It had become impossible for the defendants to know what case they had to answer, with new claims being constantly presented: this was “the clearest abuse of the court’s process”. The constitutional right of access to the courts is not absolute and the resource of access must be protected for the benefit of all litigants.⁶ The Supreme Court recently ruled in a different context that misconduct of litigation could justify a strike out:

“In all legal proceedings,... a point may be reached where the conduct of such litigation  is so dilatory, or so vexatious, or proceeds in a manner which either breaks or ignores rules of procedure, or where there is such egregious misconduct either before court, or in court itself, as to raise questions as to whether the right of access to the court should be limited, or, in extreme cases, whether a case should actually be struck out”.⁷

Prima Facie Case Not Made Out

On the “no case to answer” ground, the case stood or fell on the evidence of the principal and the quantity surveyor. While the court was obliged to take that evidence at its height to assess whether the plaintiff had established a prima facie case, this should not be equated with accepting that evidence. The court was entitled to assess the credibility of the plaintiff’s evidence and the weight to be attached to it, even at the close of the plaintiff’s case. The evidence of both key witnesses was completely undermined; the principal’s was grossly dishonest and much of the quantity surveyor’s was predicated on the principal’s uncorroborated (and dishonest) evidence and was ultimately so hopelessly confused and contradictory that it was incapable of being relied on.

On that basis, the court concluded that the plaintiff had not made out a prima facie case and that, were it necessary to do so, the court would hold that the justice of the case required that the defendants should not have to proceed further with the trial. Accordingly, the plaintiff’s claim was dismissed.

Comment

This judgment reflects an increasing intolerance by the Irish courts of misconduct in litigation and serves as a salutary warning against any inclination to gild the lily in evidence.