When should you challenge the authenticity of a photocopy in a court action?

Introduction

The Inner House of the Court of Session has recently handed down judgment in a reclaiming motion (appeal) that concerned the defender’s liability to make payment of £800,000 in terms of a personal guarantee. The judgment in Promontoria (Henrico) Ltd v James Friel is available here. The judgment at first instance is available here.

The case discusses the test in Scots law for proving the tenor of a document. This means to prove the wording and existence of a document. This is required when the original has been lost or destroyed, accidentally or otherwise. But this blog post will not address these technical issues. Instead it will focus on the timing of the challenge that was made by Mr Friel to the authenticity of documents that Promontoria sought to rely upon.

Mr Friel raised his challenge during the evidential hearing; he had not raised the issue during any of the procedural hearings. The question for the court was when is the correct stage of a case to make such a challenge?

Facts of the case

The facts of the case can be briefly stated. In November 2008, Mr Friel and his daughter were directors and shareholders of Glen TV. On 23 March 2007, Glen TV entered into a loan agreement with a bank. On 28 November 2008, Mr Friel executed a written personal guarantee promising to pay the bank all sums due to them by Glen TV up to a maximum of £800,000 (the “guarantee”). At some point thereafter, the bank lost the principal guarantee.

On 29 July 2011, Glen TV and the bank entered into an overdraft facility arrangement. By 7 November 2014, an ‘Event of Default’ occurred and the bank demanded repayment of all sums due. On 2 April 2015, Glen TV went into administration. Shortly thereafter, Promontoria acquired Glen TV’s debts from the bank and demanded payment from Mr Friel for the full £800,000. Mr Friel did not pay and a court action was raised to recover this sum.

Documents used as evidence

As a general rule, the party seeking something from the court must prove their case. In order to do so, that party will usually lead oral evidence from witnesses; and lodge supporting documents or other items of evidence with the court. Unless agreed with the other side in advance, a party has to establish the authenticity and provenance of any documents that it seeks to rely upon. In a criminal context, this is sometimes known as the ‘chain of custody’ – the paper trail that records the sequence of custody, control, transfer, analysis, and disposition of evidence.

In the present case, Promontoria were unable to produce either an original copy of the guarantee or an original copy of the document that transferred the obligation for Mr Friel to pay them instead of the bank. Mr Friel took exception to this.

Timing of a challenge

As the court explained, the commercial procedure is designed to be more efficient and speedy than using the ordinary court procedure,

“The commercial court is a specialist forum for the efficient disposal of mercantile disputes. The progress of each case is managed by the same judge, whose task is, in part, to see that the real issues in the case are fully and clearly identified and matters proceed to a substantive hearing as speedily and efficiently as possible.”

Paragraph 36

Before the preliminary hearing, a concise statement of issues setting out the issues in dispute should be lodged for the judge. But as indicated above, Mr Friel did not challenge the authenticity of the transfer document until the evidential hearing. The court was critical of this approach:

“…if a photocopy of what is alleged to be the original is to be challenged, the court would expect that to be clearly flagged as an issue at the stage of the preliminary and procedural hearings. In this case, the opposite is the case. The defender’s [written defences] did not challenge the authenticity of the copy guarantee.”

Paragraph 36.

The court also explained that if a technical point was to be raised that the certification of a document was defective (for example, where a Notary Public has certified a document as a true copy of the original),

“the court would expect such a fundamental, if technical, point to be raised clearly in advance of [the evidential hearing] in a commercial action.”

Paragraph 37.

But that was not done by Mr Friel. Instead, Mr Friel’s written defences indicated that he accepted the authenticity of the document but not Promontoria’s interpretation of what it meant.

Written position v. Oral argument

As a broad rule, in Scots law a party’s written statements of its case are fundamental. Their importance cannot be overstated. The court appears to have been critical of the conflict between Mr Friel’s previously stated written position and the argument that was being made orally at the evidential hearing:

“In relation to what became challenges to both the copy guarantee and the assignation, the commercial judge ought to have determined that such challenges were not open to the defender, given the state of his written [defences] and his position at the preliminary and procedural hearings.”

Paragraph 37.

Comment

Whilst this was a commercial case, the principles are equally applicable to the ordinary court procedure. So we expect that a court faced with such a challenge would apply the reasoning of this judgment if a similar situation arose.

The importance of this case is to highlight that careful thought and consideration should be given to a party’s written statements of their case from the outset. The position that they advance in oral argument, at any hearing before the court, must be grounded in the content of a party’s written statement of case, as opposed to advancing new or contradictory arguments.

Additionally, the court makes clear that any challenge that a party wishes to make to the provenance or authenticity of a document relied upon by the other party, should be made as early as possible in the life of the case. Fair notice of such a challenge must be given to both the other side and the court. This is so that an efficient resolution to this preliminary issue can be reached before dealing with the substance of the dispute.

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