The Court of Appeal has held that the refusal by the court to
allow a litigant in person to adduce additional evidence at trial
rendered the trial unfair.
In Barons Bridging Finance 1 Ltd (1) Reddy Corp
Ltd (2) and Gopee (3) v Barons Finance Ltd (in
liquidation), the liquidators of Barons Finance Ltd
(Barons) sought to set aside an assignment of Barons' book
debts valued at £250,000 to Barons Bridging Finance 1 Ltd
(BBF) and Reddy Corp Ltd (Reddy), who in return paid off a
£76,500 judgment debt. The liquidators alleged there had been
a transaction at an undervalue, a fraud on the creditors and that
the deed of assignment had been entered into and fraudulently
backdated from immediately before the company's liquidation to
nine months beforehand.
Gopee, who had been a director of Barons, represented BBF and
Reddy and was a litigant in person (LIP). He alleged that the book
debts were worth less than the £76,500 judgment debt as most
of the loans to which it related were unenforceable under the
Consumer Credit Act 1974.
At the trial, the judge refused to allow Gopee to rely on a
fresh witness statement with 104 pages of exhibits or to entertain
an application for specific disclosure. The trial took place and in
the absence of evidence from Gopee, the judge made adverse findings
including that the assignment had been fraudulently backdated and
had been at a significant undervalue with the aim of defrauding
Gopee appealed arguing he had not had a fair trial.
The Court of Appeal agreed with Gopee. It held that as he was a
litigant in person, the trial judge should have given him the
opportunity to either give evidence in chief and be cross-examined
or adduce his new witness statement and be cross-examined on it.
The evidence in Gopee's witness statement had indicated he had
a strong prima facie case that the book debt was overvalued. The
judge's decision had robbed Gopee, BF and Reddy of the
opportunity to present their case and so of a fair trial. The judge
had relied upon other reported judgments indicating Gopee had a
chequered career in the conduct of his companies and had drawn
adverse inference without allowing Gopee to give evidence and
assess his credibility. The judge's approach had been unduly
favourable to the liquidator and the appeal was allowed.
Things to consider
The fact that Gopee was a LIP was a relevant factor considered
by the court in this case, whereas in other cases, the courts have
taken a much firmer line in that LIPs have received no additional
leeway when failing to comply with court orders and rules.
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