Neutral Citation Number: [2007] EWHC 1814 (Ch)
Case No: HC05C00244
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

Royal Courts of Justice
Strand, London, WC2A 2LL

Date: 26 July 2007

Before :

SARAH ASPLIN QC 
(Sitting as a Deputy High Court Judge)
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Between :

	MARTIN WALSH 	Claimant	
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	(1) PAUL STAINES
(2) SPRECHER GRIER HALBERSTAM LLP
(3) EDWARD JUDGE	Defendants	

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Mr Peter Irvin (instructed by Needleman Treon) for the Claimant
Mr Jonathan Mark Phillips (instructed by Barlow Lyde & Gilbert LLP) for the Second and Third Defendants

Hearing date: 16th July 2007
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Judgment

Application and relevant background
1.	This is an application by the Second and Third Defendants, Sprecher Grier Halberstam LLP, (“SGH”), and Edward Judge, (“Mr Judge”), respectively, to strike out the claim made against them by the Claimant, Mr Walsh, pursuant to CPR 3.4, or alternatively for summary judgment pursuant to CPR 24, on the grounds (i) that it fails to disclose any proper case of deceit or conspiracy or of any reliance; and /or (ii) upon the evidence, it stands no real prospect of success; and/or (iii) the claim, or alternatively paragraphs 6 and 7, (by which I assume reference is intended to be made to paragraphs 4 and 5), of the Particulars of Claim are contrary to public policy and/or infringe the privilege attaching to the evidence of witnesses. 

2.	The action was commenced by Mr Walsh on 7 February 2005. As will be apparent from the terms of the application, it is an action for fraudulent deceit and conspiracy to commit the tort of deceit on the part of the First Defendant, Mr Staines, a bankrupt who has taken no part in the hearing of this application, SGH, the firm of solicitors which was instructed by Mr Staines in the earlier set of proceedings to which this action relates and to which I will refer below, and Mr Judge, a partner in that firm, who had conduct of the previous proceedings, on behalf of Mr Staines.

3.	The previous proceedings commenced by Mr Staines against Mr Walsh began with the grant of a freezing order without notice, on 23 April 2002. The subject matter of those proceedings is not directly relevant here. The crux of the proceedings with which I am now concerned, however, is the affidavit evidence as to means provided to the court in order to support the cross undertaking in damages necessary to obtain the freezing order in the previous proceedings, a subsequent letter dated 13 August 2002, written by Mr Judge of SGH on Mr Staines’ behalf to Mr Walsh’s solicitors, relating to monies in SGH’s client account and the alleged failure by Mr Staines, Mr Judge and SGH to disclose to the court and to Mr Walsh and his advisers, Richards Butler, changes in Mr Staines’ financial position which occurred during the course of those previous proceedings. I will return to the precise allegations made below.

4.	It is also relevant to this application to explain that the previous proceedings were hard fought at every turn and that there appears to have been a high level of animosity between the parties. The freezing order having been obtained without notice was continued at a hearing on 1 May 2002. Throughout the period from 23 April 2002 when the freezing order was made until the payment into court of £180,000 by Mr Walsh on 14 May 2003, the financial position of Mr Staines was rigorously questioned both in correspondence between solicitors and by e-mail and text messages between Mr Staines and Mr Walsh themselves. An application to discharge the freezing order was made on 28 November 2002. 

5.	On 19 May 2003, the payment into court having been made by Mr Walsh on 14 May, Mr Staines applied to increase the financial level of the freezing order which had been made in his favour, to £370,000. This was refused by Laddie J in a judgment of 10 June 2003, in which he characterised the evidence before the court by that time, in relation to Mr Staines’ means, as “grossly misleading” and concluded at paragraph 36 that “there is a continuing obligation on a claimant, not only to be willing to honour the cross-undertaking in damages, but to draw at least the defendant’s attention to any material change for the worse in his financial position.” 

6.	Almost immediately thereafter, on 30 June 2003, the application to increase the financial level of the freezing order having been refused, the previous proceedings were discontinued and in October of that year, Mr Staines became bankrupt.

7.	I should mention that I was informed at the beginning of the hearing that there are also proceedings on foot for a wasted costs order, presumably against both Mr Judge and SGH, in relation to their conduct of the previous proceedings. The wasted costs proceedings were commenced in May 2005 and were adjourned pending the outcome of these proceedings. 

Application to Strike out
8.	When determining the first issue, namely whether the Particulars of Claim fail to disclose a proper case of deceit or conspiracy and/or any reliance and therefore, ought to be struck out because they disclose no reasonable grounds for bringing such a claim, I bear in mind that such an application must be tested upon the basis that it is assumed that the facts alleged are true. I also take into account the factors set out in the overriding objective.

9.	It is also relevant both for this purpose and in relation to the application for summary judgment to take account of the fact that I was informed by Mr Phillips on behalf of Mr Judge and SGH, that Mr Walsh has had access to the entirety of the second and third defendants’ files and that therefore, disclosure on their part at least, has in effect, already taken place.  

10.	There was no dispute between the parties as to the elements of the tort of deceit. Neither did Mr Irvin on behalf of Mr Walsh dissent from Mr Phillips’ assertion that the claim in conspiracy adds nothing to the pleaded claim, being based entirely on the alleged deceit itself. The elements identified therefore, were a false representation, made knowing it to be untrue, or being reckless as to its truth and made with the intention that the claimant should rely upon it, reliance by the claimant upon the representation and loss suffered as a result.  I was referred to an extract from Clerk & Lindsell on Torts, 19th ed at paragraph 18.32 which is headed, “Claimant must have been influenced by misrepresentation.” In that section it makes clear that the representation need not be the sole cause of the claimant acting as he did, provided it contributed substantially to deceiving him. 

11.	Mr Phillips on behalf Mr Judge and SGH contended that the relevant pleadings which comprise the Particulars of Claim dated 7 February 2005, the Reply and the Reply to the Request for Further Information of the Particulars of Claim both dated 8 July 2005, when read together, do not  reveal the necessary elements of a claim in fraudulent deceit. It is convenient to deal with each alleged representation in the Particulars of Claim in turn. 

(i) The First Representation 
12.	The first alleged fraudulent representation is set out at paragraph 4 of the Particulars of Claim and refers to the affidavit sworn by Mr Staines as to his means for the purposes of the freezing order and cross undertaking in damages.  The pleaded representation is that Mr Staines stated in the affidavit that he owned a flat which he believed to be worth £750,000 and that he had an outstanding mortgage liability in respect of it of £350,000: (“the First Representation”). Paragraph 5 contains the assertion that Mr Judge and SGH had knowledge of the falsity or misleading nature of the representation which they either “possessed at the time  . . . or alternatively acquired soon thereafter”. There are two particulars of falsity at sub-paragraphs 5(a) and (b), one of which relates to the value of the flat and the other to Mr Staines’ “substantial unsettled tax liability”.  The intent to deceive is pleaded at paragraph 14 and the assertion that Mr Walsh was induced to alter his position as a result is at paragraph 14.2 of the Particulars of Claim. 

13.	In relation to the value of the flat, Mr Phillips asserts that there is nothing in the pleading to support falsity or knowledge of falsity by Mr Judge and SGH. However, paragraph 5a of the Particulars of Claim itself does contain reference to attendance by Mr Judge at a conference with counsel some four days before the affidavit was sworn, at which the value of the flat was stated to be £600,000, rather than £750,000 and this is recorded in an attendance note. I also take into account the actual terms of the First Representation which was that Mr Staines “believed” the flat to be worth £750,000. Nevertheless, in the light of the matters pleaded, to which I have referred, I cannot strike out the allegations in relation to the First Representation on the basis that there is nothing to support the allegations of falsity and knowledge of falsity and accordingly, that this part of the claim is bound fail.   

14.	Although, it does not alter my decision in relation to the First Representation, I ought also to mention that in relation to the second particular of falsity, namely the tax liability, Mr Phillips points out that evidence of any knowledge of a tax liability post dates the swearing of the affidavit and arises as a result of the issue having been raised by Mr Walsh himself. If one turns to paragraph 5 of the Reply and response 5 in the Reply to the Request for Further Information, the particulars of knowledge relied upon all post date the making of the affidavit. Had this been the only matter relied upon therefore, it may have been appropriate to strike out the First Representation on the basis advanced by Mr Phillips.   

(ii)	The Second Representation 
15.	The second representation relied upon is contained in paragraphs 7 and 8 of the Particulars of Claim. It is contained in a letter from SGH dated 13 August 2002 which was addressed to Mr Walsh’s solicitors. The passage relied upon is as follows and states that SGH had received:
“in excess of £230,000 on account with which to pursue firstly the fraud against MGI committed by your clients, and secondly the claim for monies owed to our client (ie. the First Defendant) by Mr Walsh and Mr Howard.”    (“the Second Representation”)    
At paragraph 8, it is alleged that by the Second Representation, by implication, Mr Judge and SGH were representing that SGH held substantial sums for the purposes of the proceedings and that Mr Staines was a man of financial substance who would have the means to satisfy his cross-undertaking in damages if called upon to do so. At paragraph 9, it is pleaded that to Mr Judge and SGH’s knowledge, the Second Representation was grossly misleading and materially untrue as a result of Mr Staines’ outstanding tax liability, the re-mortgage of his flat, the fact that the monies were largely derived from the proceeds of the re-mortgage and were not intended by Mr Staines to remain in the account for long and were in fact, substantially paid away by 20 August. 

16.	Mr Phillips contends that the letter contains no deceit but was true. He also adds that it was not understood in the manner now pleaded at paragraph 8 of the Particulars of Claim and as explained by Mr Kirkpatrick of Richards Butler, Mr Walsh’s then solicitor, in his witness statement. He draws attention to Richards Butler’s response to the 13 August letter. They responded the next day in the following terms: 
“ . . . . the fact that unnamed person(s) have given you authority to state that you have received money on account (from persons undisclosed) to pursue various alleged claims is of no comfort whatsoever to our clients in relation to Mr Staines’ undertaking in damages. On the contrary, it gives no information whatsoever as to his financial status or his ability to meet his undertaking and reinforces our client’s view that Mr Staines’ true financial worth has been misrepresented to the court.
Could you kindly therefore respond by return to the specific points previously raised and repeated and so far unanswered, concerning Mr Staines’ net financial position.”  
Accordingly, it is said that the letter contains no deceit, nor was it understood to do so at the time, nor was it any inducement to Mr Walsh.  

17.	My attention was also drawn to a further relevant passage in Clerk & Lindsell on Torts at 18.33 which included a reference to the judgment of Cotton LJ in Arkwright v Newbold (1881) 17 Ch D 301 at 325, in the following form: 
“In my opinion, it would not be right in an action of deceit to give a plaintiff relief on the ground that a particular statement, according to the construction put on it by the court, is false, when the plaintiff does not venture to swear that he understood the statement in the sense which the court puts on it.” 

18.	However, although these matters are relevant in relation to summary judgment, for the purposes of the application to strike out, I must assume that the allegations as pleaded are true. If one reads paragraphs 7, 8 and 9 together with paragraphs 14 and 14.2 of the Particulars of Claim and the responses to requests in the Reply to the Request for Further Information in relation to sub-paragraphs 9(a)–(d) of the Particulars of Claim, to my mind, save in one respect, it cannot be said that it is sufficiently clear that the pleading does not contain the requisite allegations, including that of deceit by implication, knowledge of falsity by Mr Judge and SGH, inducement and reliance to warrant a strike out. As I have mentioned, however, it is clear from response (j) under paragraph 9 and response 12, that the claimant is unable to substantiate the allegation of knowledge by Mr Judge and SGH, at the time of the Second Representation that the monies referred to in the letter of 13 August 2002 were not intended to remain in the client account for other than a short time. I shall deal with the submission made, in more detail under the summary judgment heading below. 

(iii)	The Third Representation 
19.	The third representation relied upon is one of omission. It is set out at paragraphs 10 - 12 of the Particulars of Claim. It is alleged that by failing to disclose that Mr Staines had re-mortgaged his flat until March 2003, that the sums referred to in the letter of 13 August 2002, which is the subject of the Second Representation, were largely derived from that re-mortgage, that a significant portion had been paid away and that there was little or no money left in the client account, in breach of their continuing obligation to Mr Walsh and the court in the injunction proceedings, Mr Judge and SGH impliedly, but nevertheless deliberately  and continuously, represented that there had been no material change in Mr Staines’ financial circumstances since April 2002, (“the Third Representation”)   

20.	In that regard, Mr Phillips says that a duty to disclose changes in Mr Staines’ financial position is being elevated into fraudulent deceit. He also submits that the pleadings reveal no inducement or assertion that Mr Walsh was, in fact deceived by the Third Representation. To put the matter shortly, he says that one does not have to correct a misapprehension which the other party does not have. In this regard, he points to the assertion made repeatedly in the Response to the Request for Further Information, for example, at responses 11 and 12, in response to the request, “Is it alleged that the Claimant at any time believed that the First Defendant’s financial position was that “which it had been alleged to be in April 2002?” The responses are that Mr Walsh “ . . . had no way of knowing or proving with any certainty the extent to which the First Defendant’s [Mr Staines’] financial position was not as alleged in April 2002 . . . .” and “The first time the Claimant [Mr Walsh] became conclusively aware of a change in the First Defendant’s financial position was on the 13th March 2003 . . .”, (emphasis added). 

21.	It is said therefore, that there is no pleading of deceit and no reliance. Although the formula of “no way of knowing or proving . . .” is possibly ambiguous, I cannot conclude that they are not capable of amounting to reliance by Mr Walsh. Equally, although the use of the omission to disclose to support a claim in fraudulent deceit, is so far as I am aware, novel, I do not consider the position clear enough to invoke the serious consequence of striking out the claim or this aspect of it. It can neither be said that the allegations in relation to the Third Representation or the claim as a whole are bound to fail.    

Summary Judgment
 	(a)	No real prospect of success 
22.	Secondly, it is necessary to consider whether there is no real prospect of success of the claim and that there is no other compelling reason why the case should be disposed of at trial: CPR 24.2. The test to be applied is not one of probability but absence of reality and must be exercised in the light of the overriding objective: Three Rivers DC v Bank of England (No 3) [2001] 2 All ER 513, in particular, per Lord Hope at paragraph 95. Can the claim, in the light of the documentation and evidence before me, be said to be fanciful because it is entirely without substance?  I shall consider each representation and then the claim as a whole. 

23.	In relation to the First Representation, although there is evidence as to a range of values for Mr Staines’ flat, in the light of the attendance note of the conference with counsel which took place on the day on which the affidavit of means was sworn, I cannot conclude that the relevant allegations including those of falsity and knowledge of falsity are fanciful.  In relation to the alleged tax liability, I repeat the matters set out at paragraph 14 above. However, knowledge in relation to the alleged tax issue is relied upon in relation to the Second and Third Representations also. Therefore, I consider that it would be inappropriate to strike out that part of the pleading on the grounds that it has no prospect of success in relation to the First Representation.

24.	For the purposes of summary judgment, the claim in relation to the Second Representation should be seen in the light of the fact that the letter of 13 August 2002 was written in the context of numerous enquiries by Mr Walsh’s solicitors as to Mr Staines’ financial position. Furthermore, the first paragraph is in the following form: 
“We refer to the recent correspondence from you and your client in relation to the concerns that you have in relation to our client’s undertaking as to damages. We confirm that we have taken our client’s instructions on the same and in order to allay your client’s fears we have been authorised by Mondial Global Investors Limited’s board of directors to confirm the following.”

25.	In this regard, I repeat the matters set out at paragraphs 16 and 17 above and note in particular, the content of Richards Butler’s letter of 14 August 2002 in response to that of 13 August. Mr Walsh’s evidence does not go directly to his understanding of the letter but despite the content of the letter of 14 August from Richards Butler, Mr Kirkpatrick clearly states in his witness statement that he understood the 13 August 2002 letter in the manner which is now pleaded. In the circumstances, it is impossible to say that as a result of lack of reliance, this aspect of the claim has no prospect of success. The circumstances are different from those in Arkwright v Newbold because there is evidence albeit not particularly strong, that the reliance pleaded, was in fact placed upon the Second Representation. 

26.	The Third Representation being one of omission, is best dealt with together with the general submissions made by Mr Phillips in relation to summary judgment as a whole. In essence, he asserts that the evidence shows that from the outset Mr Walsh himself questioned Mr Staines’ financial position and his ability to pay his advisers. By 29 April 2002, some six days after the freezing order was obtained, Mr Walsh was alluding to Mr Staines’ possible bankruptcy and in their letter of 10 May 2002, Richards Butler refer to a “very considerable debt owed to the Revenue” and their client was very concerned “that your client’s worth may not therefore be accurately represented in his affidavit.” 

27.	References to the question of solvency and the accuracy of the financial information provided continued to be made by Mr Walsh both direct to Mr Staines and to Mr Judge. Richards Butler also continued to request clarification in correspondence. In a witness statement of 28 June 2002, Mr Walsh stated, “ . . .it is my view that the claimant has misrepresented his true worth to this Court in the context of his ex parte application.”  In a further e-mail of 26 July 2002 to Mr Judge, written in colourful and threatening style, Mr Walsh stated, “this person is insolvent and will be going bankrupt . . . I suspect he has little or no personal funds . . .” Many of the further documents to which I was referred relate to the period after application was made to discharge the freezing order and therefore, are not directly relevant to the pleaded period of reliance.  I was also referred by Mr Phillips to the witness statement of Mr Walsh and in particular, at paragraphs 4, 6, 9, 10, 12, 31-33 and 55.   

28.	Overall, despite the colourful language in the e-mails sent by Mr Walsh, the only explanation for which is that he was trying to call Mr Judge and SGH’s bluff, or that the assertions were posturing, and the references in Mr Walsh’s witness statement to his reluctance to believe the financial statements and his doubts and suspicions, I am not able to conclude that there is no prospect of showing that Mr Walsh was deceived by the financial information provided by Mr Staines, or that it contributed substantially to deceiving him. Mr Walsh asserts in his witness statement that albeit reluctantly, he took the statements at face value. When this is taken together with Mr Kirkpatrick’s assertions in his witness statement as to his understanding of the letter of 13 August 2002, it would be wrong to grant summary judgment on the basis of lack of reliance. For this reason and in the light of the matters pointed out to me by Mr Irvin in particular, concerning the value of the flat to which I have already referred, the letter of 13 August 2002 in the light of the re-mortgage monies received by SGH and paid out shortly thereafter, I am not able to conclude that the claim as a whole is fanciful and that there is no reasonable prospect of success.  

(b)	No other compelling reason why the matter should be disposed of at trial
29.	Under this head, it is necessary to consider CPR 24.2(b) and I do so for the sake of completeness. In this regard, Mr Irvin drew my attention to the reference at paragraph 24.2.4 of the White Book to Miles v Bull [1969] 1 QB 258, a decision of Megarry J in relation to RSC Order 14. In that case, a husband and wife separated and the husband sold the property in which the wife was living. He then brought an action for possession of the property against her and sought summary judgment. Megarry J held as follow at 265 F – 266B and F
“. . . the defendant can obtain leave to defend if  . . . . . [he] satisfied the court “that there is an issue or question in dispute which ought to be tried or that there ought for some other reason to be a trial”. These last words seem to me to be very wide. They also seem to me to have special significance where, as here, most or all of the relevant facts are under the control of the plaintiff and the defendant would have to seek to elicit by discovery, interrogatories and cross-examination those which will aid her. If the defendant cannot point to a specific issue which ought to be tried but nevertheless satisfied the court that there are circumstances that ought to be investigated, then I think that those concluding words are invoked.  . . .Order 14 is for the plain and straightforward, not for the devious and crafty.  . . . “
Mr Irvin submitted therefore, that the serious questions of professional conduct which may be alleged in relation to Mr Judge and SGH alone may constitute another compelling reason for a trial. 

30.	It appears to me that the “craftiness” which was considered in Miles v Bull related to the conduct of the action itself. In this case, although they arise from the same facts, they relate to the previous proceedings. This is a difficult distinction to draw but nevertheless, seems to me to be a good one. Furthermore, such conduct issues can be dealt with elsewhere and to some extent will be considered in the wasted costs proceedings, if they are re-awakened. Accordingly, I do not consider that professional conduct issues can be relied upon in order to render a trial necessary.     

Strike out/Summary judgment on grounds of Public Policy 
31.	Lastly, Mr Phillips contends that in any event, Mr Walsh’s action cannot succeed and therefore, ought to be struck out/the subject of summary judgment, because it falls foul of an element of public policy. He refers to the principle of witness immunity. It is described by Lord Hope in Darker v Chief Constable of West Midlands [2001] 1 AC 435 at 445-6 as extending to anything said or done by a witness “in the ordinary course of proceedings in a court of justice.” It is not disputed that the principle extends to the proof of a witness’s evidence given before trial, witness statements, affidavits and statements made out of court in the course of preparation for evidence to be given in court. It also extends to solicitors and debars an action against witnesses alleging conspiracy by them to make false statements in court: Arthur JS Hall & Co v Simons [2002] 1 AC 615 at 687 per Lord Hoffmann and Darker v Chief Constable of West Midlands per Lord Hutton at 461-465. 

32.	It is equally undisputed that the rationale for the policy is that witnesses should not be deterred from giving evidence by a fear that they might be sued by a disappointed party and that it is intended to protect the integrity of the judicial process. In a civil context, the relevant principles are succinctly set out in Surzur v Koros [1999] 2 LlR 611 per Waller LJ at 618 -619, at which he quotes a passage from the judgment of Simon Brown LJ in Silcott v Commissioner of Police for the Metropolis 8 ALR 633 at 636G. In addition to the factors already mentioned, the further relevant principles highlighted are that the immunity rule: 
(i)	is imposed to avoid a multiplicity of actions in which the value or truth of their [the witness’] evidence would be tried over again; per Waller LJ at 618 quoting Lord Wilberforce in Roy v Prior [1971] AC 470 at 480; and 
(ii) 	should extend only so far as is strictly necessary; per Devlin LJ in Lincoln v Daniels at 263. 

33.	Surzur v Koros itself was a case in which a defendant to a worldwide mareva injunction had failed to give full disclosure of all his assets in an affidavit filed with the court. False evidence as to sale of the assets in question was later manufactured and placed before the court. The plaintiffs claimed damages against the defendants and others. In the Court of Appeal, the claim was characterised as a conspiracy to injure the plaintiffs by a number of unlawful means, those unlawful means including the giving of false evidence before the court. Waller LJ at 619, referred to an extract from the speech of Lord Morris in Roy v Prior, referred to above and in particular to its conclusion in relation to witness immunity, in the following form:
“This however, does not involve that an action which is not brought in respect of evidence given in court but is brought in respect of an alleged abuse of process of court must be defeated if one step in the course of the abuse of the process of the court involved or necessitated the giving of evidence.”
He also added
“ . . . . . . . . It also seems to me that what the above demonstrates is that it is not permissible to divide allegations up as Mr Schaff sought to do into those that involve giving evidence and those which do not.”   
It was held that the conspiracy had a broader objective and was not brought simply in respect of evidence given. Accordingly, the appeal was allowed. 

34.	Mr Phillips contends that the immunity is a complete bar to the claim because the cause of action depends wholly upon the alleged falsity of the evidence given by Mr Staines in his witness statement, on Mr Staines’ breach of his duty to the court to correct his earlier evidence and Mr Walsh’s attempts to elicit further information in that regard.
 
35.	 Mr Irvin on behalf of the claimants on the other hand, whilst accepting the principle, contends that it should not be applied in the circumstances of this case because
(i)	the application of the rule to evidence of financial circumstances, given without notice to obtain a freezing order is not settled law;
(ii)	there are dicta which emphasise that the immunity must be interpreted narrowly;
(iii)	the rationales for the immunity do not apply in this case; and
(iv)	there is a trend towards the restriction or removal of the immunity in the case law. 
He says that the law is not clear in relation to the application of the immunity in the case of evidence as to financial information in an affidavit filed for the purposes of a cross undertaking in damages. Finally, he adds that even if the immunity applies to the affidavit, it would not apply to the Second and Third Representations. 

36.	When considering this aspect of the application, I bear in mind that where an area of the law is developing, a claim should not be struck out unless the court is certain that the claim is bound to fail: Richards v Hughes [2004] EWCA Civ 266 [2004] PNLR 35. That case concerned claims by parents and their children against a tax adviser for negligence in relation to setting up an offshore trust. There was an application to strike out the children’s claim on the basis that the defendant owed them no duty of care and only the parents could recover. The success of the claim was dependant upon the development of the law in White v Jones. Peter Gibson LJ with whom Jacob LJ and Sir William Aldous agreed, having stated at 713 that the court must be certain that the claim is bound to fail, accepted that in the light of the authorities, there was a strongly arguable case that the children were not owed a duty of care. However, he concluded at 715 as follows: 
“ . . .the present case seems to me plainly one where the relevant area of law is still subject to some uncertainty and developing and where it is highly desirable that the facts should be found so that any development of the law should be on the basis of actual and not hypothetical facts.” 

37.	I should mention that since the hearing, I have received further submissions upon the public policy issue from Mr Irvin which have been commented upon by Mr Phillips. In addition, in the course of the preparation of this judgment I came across the case of Digital Equipment Corporation & Anor v Darkcrest Ltd & Anor [1984] Ch 512, a decision of Falconer J which did not deal with witness immunity but was concerned with a claim arising from an Anton Piller order having been obtained without full disclosure. I gave the parties an opportunity to comment upon it but in any event, have now decided that it is not of direct relevance. 

38.	Is the claim certain to fail as a result of the witness immunity rule? This is a very high hurdle to jump. Essentially, the First, Second and Third Representations all concern disclosure or failure to draw attention to material changes in a party’s financial position in the previous proceedings. My initial reaction therefore, was that the witness immunity rule clearly applied in this case and that following the passage quoted at paragraph 33 above, one should not divide up allegations. Furthermore, I was not convinced that this branch of the law is subject to the kind of uncertainty under consideration in Richards v Hughes. 

39.	However, although there may be a strong case for the application of the immunity, I cannot be certain that the claim will fail on that ground. First, the judgment of Laddie J in Staines v Walsh [2003] EWHC 1486 (Ch), upon which the majority of the claim is based, has injected some uncertainty into the law as to the duties arising in relation to a cross undertaking given in support of a freezing order. Rather than the duty to make full disclosure being owed solely to the court, Laddie J held:
“Certainly, so long as the freezing order is in force, it appears to me that there is a continuing obligation on a claimant not only to be willing to honour the cross undertaking in damages, but to draw at least the defendant’s attention to any material change for the worse in his financial position. . . .”   
In the circumstances, therefore, I accept Mr Irvin’s submission that there is uncertainty as to the position concerning financial statements in a witness statement in support of a cross undertaking in damages. It is appropriate that the question of whether a freestanding duty is owed in such circumstances to the defendant as well as the court and the full nature and consequences of that duty be considered at trial.  

40.	I also take account of the exceptions to the witness immunity rule considered in cases such as Surzur v Koros and Roy v Prior, referred to above. Although the label “abuse of process” is not used in the Particulars of Claim, there must be a reasonable prospect that the facts pleaded albeit under the head of deceit, will be held to amount to such an abuse. To put the matter another way, although I consider that there is a strong case for the application of the principle, I cannot be certain that the claim will fail as a result.  

41.	Therefore, for all the reasons set out above, I dismiss the application.