Three Rivers District Council & Ors v Bank Of England [2005] EWCA Civ 889 (14 July 2005)

Neutral Citation Number: [2005] EWCA Civ 889 Case No: A3/2005/1375 IN THE SUPREME COURT OF JUDICATURE COURT OF APPEAL (CIVIL DIVISION) ON APPEAL FROM QUEEN'S BENCH DIVISION, COMMERCIAL COURT The Honourable Mr Justice Tomlinson Royal Courts of Justice Strand, London, WC2A 2LL 14 July 2005 B e f o r e : LORD JUSTICE PILL LORD JUSTICE RIX and MR JUSTICE RIMER ____________________ Between: (1) Three Rivers District Council and others (2) Bank of Credit and Commerce International SA (in liquidation) Appellants/ Claimants - and - The Governor and Company of the Bank of England Respondent/ Defendant ____________________ Mr Gordon Pollock QC, Mr Barry Isaacs & Mr Nathan Pillow (instructed by Messrs Lovells) for the appellants Mr Nicholas Stadlen QC, Mr Bankim Thanki QC, Mr Ben Valentin & Mr Tom Smith (instructed by Messrs Freshfields Bruckhaus Deringer) for the respondent ____________________ HTML VERSION OF JUDGMENT ____________________ Crown Copyright © Lord Justice Rix : This is the judgment of the court. CPR 32.1(3) provides: "The court may limit cross-examination". In exercising that power, or declining to do so, the court is required to give effect to the overriding objective of dealing with cases justly (CPR 1.1 and 1.2). In this case the trial judge, Tomlinson J, has exercised that power by ordering that a cross-examination which was projected to last twelve weeks should be limited to seven weeks. The party conducting that cross-examination seeks permission to appeal against that ruling. It is well recognised that the applicant is therefore challenging the exercise of the judge's discretion in the case management of the trial. Nevertheless, the application is made on the essential ground that the judge's decision is unjust, and therefore plainly wrong. Errors in reasoning are relied on incidentally as explaining how the judge arrived at that unjust result, but the essential ground of complaint remains that the judge's decision will work injustice. The parties and the claim The claimants are the liquidators of Bank of Credit and Commerce SA ("BCCI") a Luxembourg company with branches in the United Kingdom. Behind the liquidators stand some 6,000 depositors at those branches. BCCI was incorporated in 1972 and opened its first UK branch later in that year. In 1980 it was granted "licensed deposit taker" status under the Banking Act 1979 by the Bank of England, who is the defendant at trial (the "Bank"). In July 1991 the Bank petitioned to wind it up. Unsecured creditors like the depositors lost their money. Criticisms of the Bank's regulatory and supervisory role were made which were investigated by Lord Justice Bingham and led to the publication of the Bingham Report in October 1992. These proceedings were issued against the Bank in May 1993. In October 1997 Clarke J, having previously acknowledged the existence of a possible cause of action in misfeasance in public office, nevertheless held that there was no prospect of BCCI making good such a claim against the Bank. He therefore struck out BCCI's claim and dismissed the action. In December 1998 the court of appeal dismissed BCCI's appeal, by a majority. In March 2001, however, the House of Lords, itself by a majority, allowed BCCI's further appeal, permitted it to reformulate its pleadings and said that its claim had to be investigated at trial: ( sub nom ) Three Rivers District Council v. Governor and Company of the Bank of England (No 3) [1996] 3 All ER 558 (Clarke J), [2003] 2 AC 1 , 237 (CA and HL). Lords Steyn, Hope and Hutton recognised the importance of the processes of trial, in particular disclosure and cross-examination. For instance, Lord Steyn said (at 238F, para 6): "Moreover, I do not share the confidence of the judge and the majority in the Court of Appeal that discovery and cross examination will not produce significant materials assisting the claimants. It is a case which should be examined and tested with the procedural advantages of a fair and public trial." See also Lord Hope at 263B ("the documents alone do not tell the full story", at para 105) and Lord Hutton at 279 (paras 147, 149). The issues It is dangerous, particularly for this court, to attempt even to summarise the issues at trial, particularly where the pleadings, which are voluminous, are not before us and the parties in their submissions have not reached wholly common ground as to their effect. We cannot do better therefore than to quote Tomlinson J's summary taken from his judgment under appeal, a summary which has not in itself been criticised in BCCI's grounds of appeal or skeleton argument. Thus the judge said this: "It is true that this litigation is concerned with events starting in the 1970s and continuing until the collapse of BCCI in 1991. In many ways, the most important of those events in terms of the claimants' case is the licensing of BCCI SA in 1980 and the process which led thereto. It is said by the claimants that the defendants acted deliberately unlawfully in licensing BCCI SA in that they relied on assurances from the Luxembourg supervisory authority in circumstances where they knew that the statute did not permit such reliance. It is said that they did so either knowing that, in consequence of their unlawful action, depositors in BCCI SA would probably suffer loss, or recklessly knowing that there was a serious risk of such a consequence. I should emphasise that I am only summarising. The precise formulation of the tort is a matter of controversy and I shall need, in due course, to address the issue in detail and with care. The foregoing will suffice for present circumstances and is not intended to be definitive. It is the need to conceal the unlawfulness of that initial exercise which is said to have informed, in large part, the conduct of Bank officials thereafter right through until ultimate closure of BCCI in 1991. The liquidators do, quite independently, assert that the Bank's supervision of BCCI SA was itself conducted in a knowingly unlawful manner. Put broadly, it is said that the Bank should have regarded itself as the primary, parent supervisor of BCCI SA, rather than simply the host supervisor of branches of an overseas bank, and that, in conducting the supervision of BCCI SA, the Bank should have taken greater steps to satisfy itself as to the soundness of the BCCI Group as a whole, of which BCCI SA and its branches in the UK formed an interdependent part. Again, I stress that this is intended only as a broad, non-definitive summary. It is the desire to avoid the responsibility for conducting this supervisory exercise which is said to have provided a, and perhaps the principal motive for dishonestly expressing satisfaction with the nature and scope of Luxembourg supervision of BCCI SA, rather than acknowledging that, as is alleged, its principal place of business was in London, or not in Luxembourg, and acknowledging that the Bank for that reason, as is alleged, bore a statutory responsibility for assuming the primary supervisory role. Again I summarise. It can be seen, therefore, that it is of the utmost importance to the liquidators to establish that the licensing exercise in 1980 was conducted in a knowingly unlawful manner. So far as concerns the post-licensing claim, the unlawfulness lies in part in the failure properly or adequately to include the group as a whole within the supervisory purview of the Bank, but it is the reluctance ever to undertake that task which is said to have induced Bank officials to act unlawfully in the first place. Whilst that reluctance is said also to have informed the Bank's post-licensing conduct, much of what Bank officials did throughout the post-licensing period has been attacked as motivated by a desire to conceal from those outside the Bank's Banking Supervision Division the known unlawfulness of the licensing exercise; in the jargon of the case, the guilty secret." BCCI's skeleton contains its own even more condensed summary, thus: "The Claimants allege that the Bank committed misfeasance in public office. They allege that seven named senior officials of the Banking Supervision Department of the Bank, but not two successive Governors of the Bank, acted in bad faith (i) in licensing BCCI in 1979 [sic], when they knew that it was unlawful to do so; (ii) in shutting their eyes to what was happening to BCCI after the licence was granted; and (iii) in failing to take steps to close BCCI when the known facts cried out for action at least by the mid-1980s." It will be noted that BCCI's own summary speaks of "bad faith". The particular elements of the mental element in the cause of action for misfeasance in public office may be disputed, but it appears to be accepted that bad faith is at the root of BCCI's claim. Thus the judge said this in his judgment: "The allegations in this case are of dereliction of duty of a high order. Whilst there is scope for argument concerning the role played by bad faith and dishonesty in the formulation of the tort, the claimants have pulled no punches in the breadth of the allegations of misconduct which they have made. In addition to acting in conscious breach of the statutory provisions, knowing that depositors would probably in consequence suffer loss, or reckless to that prospect, Bank officials, including specifically Mr Quinn, are accused of dishonestly misleading the Governors, dishonestly misleading other overseas banking supervisors, dishonestly misleading the independent Board of Banking Supervision, dishonestly misleading Her Majesty's Treasury, dishonestly misleading Parliament by means of providing ministers – including the Chancellor of the Exchequer – with misleading briefings to which to speak in the House of Commons, of dishonestly misleading the Treasury Select Committee, dishonestly misleading Lord Justice Bingham, and now, in the shape of the evidence which they will give, dishonestly misleading the court." Mr Quinn, referred to by the judge in that passage by name, is the witness from the Bank whose cross-examination has been limited. The trial It is quite clear that these proceedings constitute litigation on a huge scale. We have been pressed with some of the statistics. In March 2001 Lord Hope described the proceedings as having "a quite exceptional character" ( ibid at para 98). Since then, as we have been told, the scope and complexity have increased still further, and "dramatically" so. The trial judge was assigned to the case on 30 October 2001. He presided over his first case management conference in November 2001. That lasted three days. Between then and February 2003 there were a total of seventeen case management conferences. The current points of claim, together with schedules, run to some 1,100 pages, the points of defence to some 2,100 pages. The Bank has disclosed some 6,000 files of documents, and has served some 5,600 pages of witness statements. The trial bundles approach 200, of which 94 are chronologically ordered and others contain material from the Bingham Inquiry etc. The trial started on 13 January 2004. Opening speeches lasted for 205 days: Mr Gordon Pollock QC opened for BCCI for 86 days and Mr Nicholas Stadlen QC opened for the Bank for 119 days. Both parties supplemented those oral openings by written submissions, which in the Bank's case we are told numbered some 4,500 pages. Those oral openings were, we suppose, designed to present the documentary materials to the judge in detail. Thus on 23 June 2004 (day 74) Mr Pollock told the judge: "…we are not opening our case in the sense of giving your Lordship an outline; we are actually presenting our evidence, and the documents are evidence, and this is our only opportunity to present that evidence to your Lordship for the purpose of discharging what will undoubtedly be said to your Lordship on a number of occasions as a very considerable burden which lies on us…although your Lordship has had the opportunity to read and has read the documents before the case began, and although your Lordship has seen many of them during the short opening, it becomes apparent that it is only when one manages to go through them with your Lordship carefully and in context, that many of the points which we wish to make on those documents, so to speak, fully emerge for your Lordship's comprehension…As I say, this is our presentation of evidence…" BCCI had no witnesses, either of fact or of expert opinion, indeed it was in the nature of the structure of the claim that BCCI set out to prove its case of bad faith entirely from the Bank's disclosure and the cross-examination of its witnesses. As to the latter, by December 2003 the Bank had served statements in relation to 24 potential witnesses. In September 2003 it had stated it intended to call 9 named witnesses, one of whom was Mr Quinn. The judge was invited to read those nine witness statements, and much else, in advance of trial. On 23 June 2004, on the same occasion as Mr Pollock was explaining the purpose of his lengthy oral opening to the judge (day 74, see above), there was also a discussion of the likely length of cross-examination. When Mr Pollock said that, depending on the number of witnesses called, BCCI's estimate was that the evidence would take "between 8 and 12 months", the judge said: "That does not surprise me at all." At that time, the Bank's intention was to call 9 witnesses. The Bank's opening speech started on 19 July 2004, when Mr Stadlen said that the Bank intended to call a further two witnesses. We are told that in the course of his opening he quoted extensively from the Bank's witness statements. In September 2004, a further two witnesses were added to the list, making 13 in all. On 4 May 2005, however, towards the end of the Bank's opening, he announced that the Bank had revised its intentions and would call only two witnesses, Mr Quinn and Mr Cooke. On 5 May the judge fixed 13 June 2005 as the day on which Mr Quinn's evidence would start. The Bank had indicated as long ago as September 2003 that Mr Quinn would be its first witness. Mr Quinn's witness statement ran to 1,008 pages, Mr Cooke's to some 300 pages. Mr Quinn's was the second longest witness statement of all those served by the Bank. On 10 May 2005 BCCI indicated that it expected the cross-examinations of Mr Quinn and Mr Cooke to take not less than 12 weeks each. On the following day, Mr Stadlen said that the Bank might wish to make an application to limit the period for which the witnesses were to be cross-examined, on the broad grounds that cross-examination of such length would be disproportionate, unreasonable and unnecessary. The judge said that he thought that an application at that stage would be premature, but that he would keep the matter under review in the light of developments. The transcript shows that he said this: "The twelve weeks surprises me, I have to tell you, but I am not conducting the cross-examination, and there are all those imponderables. All I propose to say about it at the moment is that obviously we can and must review the position at the end of July and see how we are going and see how progress is…As I say, I keep an open mind about it. We shall wait and see. It is a broad estimate and we will wait and see." "Those imponderables" were matters such as how quick and responsive the witness would turn out to be, the effect of the witness's age, the need to question Mr Quinn and Mr Cooke about what BCCI might have preferred to put to other potential witnesses who would not be called. In his judgment under appeal, the judge said this about that discussion: "I also indicated my own view that, whatever the liquidators' public stance, it was unlikely that they would find it either necessary or desirable to cross-examine for a period as long as twelve weeks." However, Mr Pollock pointed out, correctly, that the judge had not used the expression "public stance" on that occasion. He complained that the expression meant that the judge was impugning the honesty of the estimate. He said that such an expression was first used by the judge at a discussion on 20 June (see below). On 25 May 2005 Mr Stadlen completed his opening on behalf of the Bank. The trial then adjourned for the Whitsun vacation, with Mr Quinn's evidence due to begin on 13 June. On the previous day, 24 May, there had been some discussion as to court arrangements for the hearing of Mr Quinn's evidence: it was resolved to take a 15 minute break in mid-morning and mid-afternoon: that would leave a court day of 4 hours and 15 minutes. Mr Quinn Mr Brian Quinn will be 69 in November. He has been retired from the Bank for some nine years. He joined its Banking Supervision Division in 1982. Prior to that he had worked in its media department. Thus he was not concerned with BCCI in 1980 at the time of its licensing. From September 1982 to January 1984 he was heavily involved in a Latin American debt crisis, during which period he was copied in on some but not all BCCI related matters. After some leave, he returned full-time to supervision matters in April 1984. At that time Mr Cooke was the senior decision maker with regard to BCCI. It was not until May 1986 that Mr Quinn's involvement with BCCI became close: the judge described this as a "watershed". In April 1990 it became obvious to the Bank, as a result of Price Waterhouse's report of that month, that BCCI was in imminent danger of collapse with inevitable loss to depositors unless there was a real prospect of an effective rescue. It was the changed situation post April 1990, which, as the judge pointed out, was "a powerful, if not decisive, factor in informing their Lordships' decision to permit this action to proceed to trial". No doubt it was for this reason that the last 450 pages of Mr Quinn's statement dealt with events of that period. On 3 June 2005, during the adjournment of the trial between the end of the Bank's opening and the date fixed for the commencement of his evidence, Mr Quinn went to see his consultant cardiologist, Dr David Hackett. He had done so as a precautionary measure, on the advice of the Bank's solicitors, Messrs Freshfields Bruckhaus Deringer, in case any issues relating to his health were relevant to the manner in which he gave evidence. The judge was told of this intention in general terms on 24 May 2005. As a result of his consultation with Dr Hackett, Mr Quinn was surprised and concerned to learn that his condition of aortic stenosis had deteriorated and was likely to continue to deteriorate so as to make it likely that he would need an operation for an aortic valve replacement in the autumn of this year. A narrowed aortic valve is usually not dangerous until the obstruction becomes severe, but if it does become severe an operation for its replacement becomes necessary promptly. Dr Hackett's prognosis is that on current trend lines, Mr Quinn's stenosis, at present still moderate, will become severe by September. He recommends a further consultation in September, and then, if, as he expects, his prognosis is confirmed, a prompt operation. Fortunately, such an operation is the commonest valvular operation performed, with low risks and usually excellent results, namely complete correction of symptoms and considerable improvement in life expectancy. All this is common ground, as is the diagnosis that Mr Quinn currently remains fit to withstand a stressful cross-examination, subject to the caveat that if he were to develop symptoms of chest pain or discomfort while in the witness-box, he would require a break of from one to several hours. However, following an operation and even on the assumption that all goes as well as it should, Mr Quinn would not be fit to resume being cross-examined until January 2006. As the judge said, this came as a surprise to Mr Quinn and thus to the Bank and Freshfields. Dr Hackett's written report dated 6 June 2005, together with a letter from Mr Quinn's general practitioner, Dr Allen, dated 8 June, was sent on promptly by Freshfields to the judge and BCCI on 9 June. The trial resumed on Monday, 13 June with the evidence of Mr Quinn. Miss Clare Montgomery QC was conducting the cross-examination on behalf of BCCI. On 14 June the judge wrote to the parties to make arrangements for an informal meeting of counsel to take place to discuss the implications of the medical evidence. His letter read as follows: "Mr Goddard's letter of 9 June 2005 addressed to my clerk points out, rightly, that there are issues relating to the length of Mr Quinn's oral evidence which we all need to consider sooner rather than later. For my part I remain hopeful that Mr Quinn's evidence would in the ordinary course in any event be completed before the Long Vacation. My clerk has suggested to the clerks to Nicholas Stadlen QC and Clare Montgomery QC that we should aim to meet informally in my room on Friday morning [17 June]. I do not envisage anything more than a general discussion at this stage and I certainly do not envisage entertaining any application or giving any ruling although it might well be useful to indicate how I see things at present – it may well be that we all see matters in the same way. If it does emerge that there is a serious difference of opinion as to the appropriate way forward we may of course have to consider convening a formal hearing…" In the event, the parties were unable to meet until 4.30 pm on Monday, 20 June. The judge wished to avoid the use of any normal court time. In his judgment, the judge said this about that meeting: "…I repeated that sentiment [that he remained hopeful that Mr Quinn's evidence would be completed before the long vacation, as expressed in his letter of 14 June] and indicated that presumably everyone would now sensibly plan upon the basis that Mr Quinn may simply be unfit to return within a reasonable timescale. I went on to say that unless the claimants were able to tell me, on reflection, that they were realistically aiming to conclude their cross-examination by the beginning of the long vacation, I would be likely to look favourably upon any application which the defendants might make for an order limiting the duration of cross-examination." The judge also had in mind at that time (as he subsequently was to observe in his judgment) that, if any order was to be made restricting the length of cross-examination, then it should be made at the earliest possible time, so as to enable BCCI to plan for the use of the remaining time; and further, that a recent decision of the court of appeal in Hayes v. Transco [2003] EWCA Civ 1261 had stressed the importance of giving reasonable notice of an intention to curtail cross-examination. In the event, on 22 June the Bank issued an application that Mr Quinn's cross-examination be completed before the long vacation on the grounds that it would not be reasonable to require him to give evidence after the long vacation, and that his evidence could reasonably be completed before the long vacation's commencement at the end of July. Perhaps we should state for complete clarity, although it will be a matter well known to all who practise in the High Court, that in the ordinary way its courts rise during August and September for the summer vacation, known as the long vacation. The decision below The judge heard argument on the Bank's application on 23 June. By then, he had heard Mr Quinn being cross-examined by Miss Montgomery for 7 ½ days, that is to say for all but two weeks. We should explain that in the commercial court it is normal for trials to be heard Monday to Thursday, four days a week. The court then adjourns and hears applications in other cases on Fridays. The judge rendered his decision on the same day as hearing argument, but reserved his reasoned judgment: his ruling required Mr Quinn's cross-examination to be completed by 28 July, so as to allow any re-examination to be completed by 29 July, the last day of term before the court adjourned. His reasons were given on 27 June. The judge had two separate bases for his decision. The first was that, irrespective of Mr Quinn's illness and the difficulties created by that, it was unnecessary for his cross-examination to last longer than the end of term. That would still allow a total period for his cross-examination of 27 ½ days, or all but seven weeks. It will be recalled that BCCI's original estimate for his cross-examination was twelve weeks, that is to say commercial court weeks. The judge considered that a cross-examination of that length, crossing over the long vacation and resuming in the autumn, was disproportionate and unreasonable. Seven weeks would give BCCI all that it needed, and it would suffer no prejudice in being limited to that period. The second and independent, but cumulative, ground of his decision was that even if BCCI might suffer some, albeit in his view modest prejudice, it was outweighed by the prejudice to Mr Quinn of being required to live with the prospect of returning to complete the balance of his cross-examination at some time in the future. The judge regarded such delay as being oppressive, unreasonable and inhumane. The judge reasoned and expressed these two conclusions as follows. As to the first, he reminded himself that Mr Quinn's supervisory role in relation to BCCI only became close after May 1986; that BCCI's claim, so prominent before the House of Lords, in relation to the post April 1990 period, had effectively been discounted in the course of Mr Pollock's opening, if no earlier misfeasance or misconduct could be proved to have occurred; and yet that Mr Quinn's most intense period of activity in relation to BCCI was precisely that period from April 1990 onwards. Therefore the judge regarded the scope of cross-examination so far as it concerned Mr Quinn to be narrower and less intense than might have appeared at one time to be the case. Nevertheless, he expressly recognised that BCCI would want to put its case that Mr Quinn's conduct was still informed by his desire in bad faith to keep BCCI alive for as long as possible to avoid the need for public inquiry into the Bank's earlier misconduct; and that he would be closely cross-examined on the period from 1986 to 1990 when he was intimately involved, as well as with the earlier period when others had prime responsibility. The judge next considered the two weeks of cross-examination which had already taken place before him as a yard-stick by which to judge its progress and prognosis. He was plainly not impressed. He said this: "…Mr Quinn has been cross-examined extensively on many documents in respect of which there is no evidence that he ever saw them when they were produced, and indeed no reason to suppose that they would be copied to him since they concerned matters which were not then his responsibility. Then there are documents which might conceivably have been seen by Mr Quinn, even though they dealt with matters which were not his primary responsibility at the time. In respect of such documents, Mr Quinn has been invited to speculate as to their meaning, where it is unclear or ambiguous, in a manner which seems to me, with all respect, calculated to produce answers which are almost certainly inadmissible but are certainly unhelpful." Even so, the judge was alive to the concern that, in the light of the Bank's decision to call only two witnesses, BCCI might feel obliged to explore with Mr Quinn matters which they would otherwise have raised with a more appropriate witness. As to that consideration, however, he observed: "There are, however, limits to how far down that road the claimants can usefully go. A witness does not become competent to give evidence in areas about which he has no personal knowledge simply because the party chooses not to call a witness with the relevant firsthand knowledge." In sum, the judge concluded as follows with regard to this first basis of his decision: "For the reasons which I have set out, I would feel justified in imposing the limit which I have on grounds of proportionality and general reasonableness alone. The claimants will, in my judgment, have no difficulty in, within the space of 27 and a half days, putting fully and fairly to Mr Quinn such parts of their case as can properly and usefully be put to him. Some might say that it is my duty, pursuant to my case management role, to impose such a limit. I regard that period as a more than generous allowance. I also consider that it is wholly disproportionate and unreasonable to expect Mr Quinn, regardless of his state of health, to attend court to be cross-examined for a period in excess of seven weeks and, in particular, disproportionate and unreasonable to expect him to attend for an initial seven weeks' cross-examination only to be required to return at a later date, after an extended interval, to be cross-examined yet further." The judge then turned to consider his second ground of decision, and said this: "The medical evidence, in my judgment, renders this an a fortiori conclusion. If it is wholly unnecessary for the ends of justice to require Mr Quinn to attend for cross-examination beyond the end of July, how can it possibly be justified to impose upon him, and, I might add, his wife and close family, in the run-up to open heart surgery, the sort of strain and anxiety which cross-examination beyond that date would inevitably involve?…A reasonable and humane approach requires that there should be a terminus ad quem which allows a reasonable period for rest and normalisation after the period of prolonged and intense concentration involved in giving evidence for seven weeks and which means that Mr Quinn will not have to undergo surgery and recuperation knowing that the first thing which awaits him on his recovery is a return to court for an anticipated further five weeks or more cross-examination…" The judge reminded himself that the nature of BCCI's case was to prove dishonesty and not mere errors of judgment and observed that if BCCI could not establish dishonesty in seven weeks it would be unlikely to do so in twelve. He concluded: "For all the reasons I have set out, I regard it as most unlikely that the claimants will be prejudiced by the need to confine their cross-examination in this way. The prospect of such prejudice and its likely nature is, in my judgment, outweighed by the need to treat Mr Quinn in a reasonable and humane manner." The appeal This hearing has been expedited. BCCI's notice of appeal was filed on 28 June. On 29 June, I adjourned its paper application for permission to appeal to be heard on notice to the Bank with an appeal to follow if permission were granted. Two hours were allotted for the adjourned hearing, but in the event the argument has taken a very full day. The notice of appeal came forward with a full skeleton argument which submitted that the judge had erred in a number of respects: for instance in doubting the genuineness of BCCI's twelve week estimate for Mr Quinn's cross-examination; in failing to give any proper weight to the importance of oral evidence as stressed by the House of Lords; in failing to take account of the need to test Mr Quinn's voluminous evidence in chief or of the difficulties caused by the Bank's conduct in opening its case at such length and then in reducing its witnesses from the anticipated thirteen to only two; in discounting the relevance of cross-examining Mr Quinn on documents which he had neither made nor seen; and in finding in the medical evidence any justification for the judge's order, in as much as Mr Quinn was presently fit to be cross-examined so that the time for decision on the length of his evidence had not yet come. However, these detailed criticisms of matters which were elements in the judge's assessment of the parties' conduct of the trial and of the impact they had for the case management decision which he was called upon to make were overshadowed by the general submission that his decision was plainly wrong, because unjust. Indeed, Mr Pollock accepted that on the applicable legal test to be applied, he had to show that that was so. He was unable to demonstrate that there was any relevant matter which the judge, who after all had such huge experience of this trial and its issues, had failed to take into account, or any irrelevant matter which had influenced his judgment. Ultimately, therefore, the structure of Mr Pollock's oral submissions to this court went well beyond his skeleton argument, and amounted to an assault on the fundamental rationality of the judge's judgment. The argument went like this. The BCCI estimate of twelve weeks was carefully calculated and related to the number of documents which needed to be put to the witness. It was an honest, professional, estimate which the judge had no business to challenge. At an earlier stage of the trial (day 74, see above), the judge had accepted that cross-examination would be a seriously lengthy matter. When the estimate was first made, in May, the judge, despite some scepticism, had accepted that it was necessary to wait and see how matters progressed and that an application to curtail cross-examination, already threatened by the Bank, was premature. When, however, the medical evidence came forward, the judge was immediately predisposed to limit cross-examination to the amount of time left before the long vacation began: his mind was "made up", and he encouraged the Bank to make its application. What had changed? The cross-examination still lay in the future, and a wait and see philosophy would still have dictated that such an application was premature. The only thing that had changed was the new information about Mr Quinn's medical condition: but it was not on that ground that the judge determined the primary basis of his judgment. Instead, the judge found that, irrespective of Mr Quinn's health, it was unnecessary for his cross-examination to extend past July. Any prejudice to BCCI was wholly discounted. Such a decision wholly failed to do justice to the importance of this complex litigation and the need to test the Bank's defence by oral cross-examination. In the circumstances, the judge's alternative ground, premised on Mr Quinn's health, was equally undermined, for the judge had already determined that any cross-examination after July was unnecessary and that there was therefore no prejudice suffered by BCCI to weigh in the scales. As it was, Mr Quinn was presently fit and would, even if he required an operation, be fit again in January. It was not his health that the judge had had regard to, but his feelings or state of mind. This was an insubstantial basis on which to undermine a fair trial of BCCI's claim. In the circumstances, the hearing proceeded as if permission to appeal had already been granted. Seeing the importance of this litigation, and the seriousness of Mr Pollock's challenge to the rationality of the judge's ruling, the court announced, albeit in retrospect, that permission would be granted and the hearing treated as an appeal. The law There was no dispute as to the relevant law. There was express power in the civil procedure rules to limit cross-examination. In the circumstances, the judge was called upon to make a case management decision in the course of trial. Such a decision was peculiarly a matter for the judge's discretion. As such, it would only be disturbed on appeal, in the absence of some irrelevant consideration taken into account or some relevant matter left out of account, if it was outside the generous range allowed for such decisions, in other words if it was plainly wrong. The test was justice. See Borealis AB v. Stargas [2002] EWCA Civ 757 (9 May 2002) at para 45, Royal & Sun Alliance v. T&N Ltd [2002] EWCA Civ 1964 (30 December 2002) at paras 37/38. Mr Stadlen also referred to observations by Lord Roskill and Lord Templeman, with which Lord Keith of Kinkel, Lord Bridge of Harwich and Lord Goff of Chieveley agreed, in Ashmore v. Corporation of Lloyd's [1992] 1 WLR 446. The order of the trial judge was there restored. Lord Roskill said (at 448H/449A): "In the Commercial Court and indeed in any trial court it is the trial judge who has control of the proceedings. It is part of his duty to identify the crucial issues and to see that they are tried as expeditiously and inexpensively as possible. It is the duty of the advisers of the parties to assist the trial judge in carrying out his duty. Litigants are not entitled to the uncontrolled use of a trial judge's time. Other litigants wait their turn. Litigants are only entitled to so much of the trial judge's time as is necessary for the proper determination of the relevant issues." Lord Templeman said (at 453H/454A): "In Banque Keyser Ullmann S. A. v. Skandia (U. K.) Insurance Co. Ltd. [1991] 2 A. C. 249, 280, …I also said that the appellate court should be reluctant to entertain complaints about a judge who controls the conduct of proceedings and limits the time and scope of evidence and argument. So too, where a judge for reasons which are not plainly wrong makes an interlocutory decision or makes a decision in the course of trial the decision should be respected by the parties and if not respected should be upheld by an appellate court unless the judge was plainly wrong." Discussion Mr Pollock's essential complaint was that the judge had predetermined his decision, purporting to find that a longer cross-examination than July allowed was unnecessary, but in reality basing his decision on the only new event to have occurred, which was Mr Quinn's medical condition. Woven into that submission was the further strand, on the merits of the issue, that the judge was in any event not entitled to differ from the honest, professional judgment of Miss Montgomery as to the way in which cross-examination was to be carried out. In our judgment, however, this thesis is mistaken. A careful history of events shows that the judge moved with commendable caution. On 10 May BCCI gave its estimate for Mr Quinn's cross-examination. On 11 May the judge said that an application by the Bank to limit cross-examination would be premature, expressed some scepticism as to what BCCI would ultimately see as being in its own interests, but adopted a "wait and see" approach which contemplated that there would be a stock-taking at the end of July. By the time that Mr Quinn's evidence began on 13 June, however, the judge knew about Mr Quinn's medical condition. His immediate reaction is expressed in his letter of 14 June: there were issues which needed to be considered sooner rather than later, he did not envisage entertaining any application when the parties met with him to discuss those issues, but he remained hopeful that "in the ordinary course" Mr Quinn's evidence would be completed by the long vacation. On 20 June the parties and the judge met, the judge repeated the hope that he had expressed in his letter, but had in mind that the issues had to be addressed, if necessary by means of an application by the Bank to curtail cross-examination. By that time, of course, he had heard something like a week of cross-examination. By the time he heard argument and rendered his decision on 23 June, he had listened to nearly two weeks of that cross-examination. All this to my mind demonstrates that while the judge had from the first doubted the eventual necessity of as much as 12 weeks of cross-examination, he was prepared to adopt a benign view of the matter – until news of Mr Quinn's medical condition and the likeliness of surgery in September forced him to grasp the nettle. If Mr Quinn was, as the agreed medical evidence informed the judge, likely to need a heart operation in September and to be unavailable for further cross-examination until January 2006 at the earliest, it was not only desirable but it was his duty as judge in charge of the trial to make a decision as to what was to happen. It was now necessary for him to decide whether he could afford to take a laissez faire attitude, or whether he had already heard enough of the cross-examination to guide his directions as to the future. He had of course to consider all the available alternatives, such as they might be. We reject the submission that the judge's mind was made up, or that he used the medical evidence as an irrational pretext for his decision. Mr Pollock submits that the judge impugned the honesty of Miss Montgomery's estimate, deriding BCCI's "public stance", that he had no business to do that, and that in any event her estimate was soundly based. It was, he explained, a simple function of the number of documents which it was necessary to put to Mr Quinn. Her plan embraced putting to him in excess of 2000 documents, of which some 1100 had been referred to in Mr Quinn's witness statement alone. But the first week of the cross-examination had revealed that the number of documents which could be dealt with on a daily average was only 23. That number had fallen as low as 15 on some days. Moreover, Mr Quinn was proving to be a slow witness: he did not wish to answer a question until he had read the documents being put to him in full. And his answers were full rather than concise. Miss Montgomery had cut her planned use of material again and again. To comply with the judge's order, she would have to limit herself now to a mere 300/350 documents. Given the size and complexity of the case, and the amplitude of the Bank's opening and of Mr Quinn's witness statement which stood as his evidence in chief, and which the judge had been asked to read again prior to his being called, this was simply unjust. Mr Pollock's test was: How long could BCCI's cross-examination properly last? If the answer went beyond the end of July, the judge's decision was flawed. It seems to me, however, that that is the wrong test. The question for the judge, a fortiori in a situation where there was likely to be a break of nearly six months in Mr Quinn's evidence after the end of July, was: How long was it necessary for that cross-examination to last in the interests of justice, for both parties and for Mr Quinn? The question for this court is: Has the judge been shown, again in the interests of justice, to be plainly wrong? It must be remembered that by the time he was called upon to make his decision, this very experienced commercial judge was in an unrivalled position from which to exercise his discretionary assessment. He had read the documents, or had read widely in them, before the trial began. When the trial started, he was treated, first by Mr Pollock and then by Mr Stadlen, to a minute and exhaustive analysis of those documents. Those documents had been refined from the initial disclosure of some 6,000 files into the logical collection of the 200 or so court bundles. Mr Pollock says that without cross-examination this takes the matter no further than the situation before Clarke J which was criticised by the majority of the House of Lords as a basis for summary disposition. We profoundly disagree, for two reasons. First, the process of disclosure, selection, refinement and analysis which had taken place before trial and during the over 200 days of submissions at trial represents the very opposite of summary disposal. It is not all of trial, but it is a very significant part of it. Secondly, by the time Mr Quinn's evidence began, the judge was in the very best of positions to evaluate for himself the nature of the cross-examination which BCCI wished to put to the witness. He knew the documents thoroughly. He knew Mr Quinn's evidence in chief thoroughly. He knew the issues, and how they had metamorphosed during the openings. He was conscious of how BCCI needed to put its case. He knew, in essence, of Mr Quinn's role in the Bank over the relevant years; and he was alive to the important considerations that Mr Quinn played no part in supervision at the time of the initial licensing of BCCI. He had in mind that even so Mr Quinn was charged, along with the Bank, of dishonestly suppressing the "guilty secret" throughout the years of his involvement. Moreover, the judge had heard two weeks of cross-examination before he made his decision. He was critical of that cross-examination. It was, of course, being conducted at a time when there was no order for its limitation: but the judge had raised his concerns, and the Bank had threatened to apply to curtail it; and the whole of those two weeks had taken place in the knowledge of Mr Quinn's medical condition and of Dr Hackett's prognosis. So, BCCI was on notice of the possibility of just such an order as has occurred. Even so, the judge considered the cross-examination which he had heard to be to some degree inadmissible and in any event unhelpful. It had only got as far as June 1983, still three years before Mr Quinn's close involvement. So far, not a single challenge to Mr Quinn's honesty had been made. We have been shown by Mr Stadlen a bundle of transcript extracts of the judge's criticisms of the conduct of the cross-examination. To my mind such extracts fully justify the generalised comments in his judgment. Mr Pollock is mistaken, moreover, to suggest that the judge was impugning the integrity of Miss Montgomery's estimate; or, as was also implicit in that suggestion, that a judge cannot take an independent view of such matters without his being accused of arrogance or of counsel being thought of as criticised by the court for lack of candour. As their Lordships made clear in Ashmore v. Corporation of Lloyd's , it is the judge's duty to take an independent view of the control and conduct of a trial. The opposing legal teams naturally have their own duties to the court, but they are adversarial parties, whose concerns are to forward the interests of their side of the litigation by all legitimate means. We have no doubt that Miss Montgomery's estimate was an honest one, and we have no doubt that the judge considered it to be honest. But he was entitled to have his own views, and to consider that there might well be a difference, and we mean an honest difference, between an adversarial preferred course and what one might call a bottom line. In any event, where, as here, there was disagreement between the parties as to so many aspects of the decision – the relevance of the lengthy openings, the relevance of the documents, the relevance of Mr Quinn's involvement, the structure of the argument from which it was said that dishonesty was to be inferred, the significance of the Bank's tactical decisions as to which witnesses it would call and in which order, the relevance of the cross-examination so far – it was for the judge, as the independent and impartial holder of the balance of justice, to find in the interests of justice a solution which the parties could not find for themselves. In any event, on Mr Pollock's logic, it would need some 100 days or more (25 weeks) of cross-examination to fulfil Miss Montgomery's plan. As it is, Mr Quinn can be cross-examined for up to some seven weeks or 28 days – an immense period for cross-examination, and one in which the judge was right to suggest that, if Mr Quinn was dishonest, his dishonesty would be revealed. In such circumstances, there would have to be the most plain of lapses of reasoning, or the most obvious of injustices, for this court to prefer its own, comparatively, indeed wholly, untutored view of things to the judge's informed decision making. In my judgment, there is no sign of that irrationality or injustice. Since therefore there is no basis on which this court could properly interfere with the judge's view that a cross-examination of in all seven weeks would be sufficient, this appeal stands to be dismissed on that ground alone. But the evidence and the judge's judgment goes further than that. Mr Quinn, in all likelihood will require a heart operation in September and, even if all goes as well as it can, will be out of action until January 2006. What, in these circumstances, are the alternatives to the judge's decision? If a seven week cross-examination is all that is needed, the question need not arise. But, of course, the question in any event does arise. Mr Pollock has suggested no real alternative save for carrying on without any regard for the likely interruption and then accepting whatever comes next. Perhaps, he suggests, Mr Quinn will after all not need an operation in September. In any event he will be fit again in January 2006. It is still premature to take a decision. In my judgment, this is an abdication of responsibility, and the judge was right to dismiss it. He did consider various alternatives, such as sitting on Fridays and, at Mr Pollock's invitation, continuing to sit throughout August. However, he noted that no-one had suggested that it would be reasonable for the Court to sit on Fridays and he rejected the suggestion that the Court should sit in August. Mr Pollock did not say that he was wrong in so deciding. He also rejected, and of this Mr Pollock does complain, the alternative of doing nothing. He regarded the prospect of Mr Quinn's recuperation, even on the assumption that everything went as well as it possibly could, being dogged by the prospect of a resumption of cross-examination after an interlude of six months as inhumane. We would not disagree. As for the suggestion that no operation might be necessary in September, that is against the undisputed evidence, and, even if Mr Quinn's medical advisors would then defer a decision, the prospect of an imminent operation would be hanging over Mr Quinn perhaps from month to month. As it is, these hypotheses would, on the judge's findings, all be in the interests of unnecessarily prolonging a cross-examination which could be successfully conducted within a total of seven weeks. In sum, it seems to us that the judge was bound to grasp the nettle, and that he has arrived at a solution which cannot be said to be wrong or unjust. Conclusion On 7 July 2005 the court gave its decision, dismissing BCCI's appeal, but reserved its reasons. These are now our reasons for that decision. BAILII: Copyright Policy | Disclaimers | Privacy Policy | Feedback | Donate to BAILII