In-house Insights: Property Disputes
Mar 1 2024
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On 22 May 2015 an interesting and unusual judgment was handed down by Mr Justice Coulson of the Technology & Construction Court in the case of GB Minerals v Michael Short – unusual because the judgement concerned an application for permission to commence contempt proceedings arising out of false documents which had been placed in evidence in a construction case. The underlying dispute concerned claims of £500,000 due under a contract between GBM Minerals Engineering Contracts Ltd (the claimant) (referred to as "GBMMEC") and GB Minerals Holdings Limited (the defendant and applicant in the contempt of court proceedings) (referred to as "GB") and a counterclaim of £4 million for overpaid work.
GB claimed that a representative of GBMMEC, Mr Michael Short, had created documents after the event that purported to justify invoices from and payments to GBMMEC for sums in excess of £10 million when the estimated value of the services was £1.9 million. The documents which purported to justify the increase in cost were seventeen Variation Orders, the authenticity of which was disputed by GB. A Reply and Defence to Counterclaim, supported by a statement of truth, was served which relied on the authenticity of the signed Variation Orders (the Statement of Claim was not included in the application because Mr Short suggested that it had been served without his approval albeit this assertion was not confirmed one way or the other by GB's solicitors). It was following standard disclosure that it became apparent that GB's suspicions were well-founded and that the variation orders had indeed been created after the date indicated on each document. That meant that the statement of truth in GB's pleadings was false.
As a result of this GB issued an application for permission to bring contempt proceedings against Mr Short arising out of the statements of truth attached to GBMMEC's pleadings. It should be noted that the statement of truth was signed on behalf of GB by GB's solicitors at the time McClure Naismith and authorised by Mr Short. The Judge had to determine whether there was a strong prima facie case of falsity and dishonesty, taking into account the "public interest" in contempt proceedings being brought. It was in his consideration of the public interest that the Judge made comments that are of particular interest to the legal profession. He said: "[t]he dangers of making false statements need to be drawn to the attention of all those who confirm to their solicitors that a pleading is true and can properly be supported by a statement of truth". He added that he did not distinguish between witness statements and pleadings supported by a statement of truth: "it is equally important that both are truthful". The Judge also wrote in a footnote of his judgment that "I find it surprising that, in modern litigation, a firm of solicitors can still take a statement of truth so lightly".
Often the statement of truth is the very last consideration when solicitors, barristers and clients are trying to finalise and file and serve pleadings on time. It may seem obvious but this case is a useful reminder to all practitioners to take care when signing the statement of truth and to ensure that they advise their clients about its significance not least because the damage caused by making a false statement could be considerable.