UT (Tax & Chancery) UT-2023-000064 - [2024] UKUT 00394 (TCC)

This application arises as a consequence of paragraph 7 and 8 of directions that Judge Jones made on 20 November 2023 (as amended in January 2024) as follows:

“7.

If any party considers that there are any persons (“potential witnesses”) in addition to those for whom statements of fact have been served pursuant to Directions [4] & [5] above whose evidence would be of substantial assistance to the Tribunal in its determination of the reference, it shall notify the other party by 13 September 2024 of (i) the identity of those potential witnesses, (ii) the reasons why the potential witness would be of substantial assistance in the Tribunal’s determination of the reference(s), (iii) any efforts made by the relevant party to adduce a witness statement from each of the potential witnesses, (iv) the reasons why the relevant party has been unable to adduce a witness statement from each of the potential witnesses, and (v) any order or directions sought in respect of the potential witness.

8.

If any party has notified the other party in accordance with Direction [7] above, there should then be a hearing as soon as possible for the Tribunal to consider whether, and if so what, further directions are required in relation to the potential witnesses identified. Skeleton arguments are to be exchanged a week before any such hearing.”

The Authority had sought the making of these directions in view of the Tribunal’s observations in Seiler and Ors v FCA [2023] UKUT 133 (TCC) at [93] to [114]. In that decision, the Tribunal observed at [94] that the witnesses called by the Authority to support its case had only a peripheral involvement with the arrangements and criticised the Authority for failure to call particular witnesses who might have been expected to have material evidence to give on an issue in the proceedings.

At [112] , relying on observations it had previously made in Frensham v FCA [2021] UKUT 0222 (TCC) at [88] and [89] to the effect that the Authority had a duty to assist the Tribunal with full and accurate explanations of all the facts which are relevant to the issues which the Tribunal must decide, the Tribunal observed that the public interest is served by the Authority calling relevant evidence before the Tribunal even if it might exculpate the individuals which the Authority believes ought to have regulatory action taken against them.

I therefore understand why the Authority felt that it was necessary that the question as to whether there were further potential witnesses that the Tribunal might regard as having relevant evidence to give should be considered by the parties, and if necessary determined after the case management hearing.

In response to these directions, in his application dated 13 September 2024, Mr Staley identified seven further witnesses he asserted the Authority should call in these proceedings. As mentioned above, the application now only relates to four individuals associated with either the Authority or the PRA. Furthermore, Mr Staley is not asking the Tribunal to issue a witness summons in relation to those individuals under its own initiative under Rule 16 of the Tribunal Procedure (Upper Tribunal) Rules 2008 (the “Rules”) or a direction that the Authority should call as its witnesses the individuals concerned, but merely invites the Tribunal to give an indication as to whether those individuals (“the Potential Witnesses”) could give relevant and material evidence that would be of assistance to the Tribunal.

The Authority has responded constructively to this request, indicating to the Tribunal that if the Tribunal indicated that it would be materially assisted by any or all of the Potential Witnesses and that in all the circumstances it should direct that these witnesses give evidence, then it would do all that it reasonably could to assist the Tribunal in its regard. The Authority accepted that in relation to those witnesses who were associated with the Authority or the PRA, that if the Tribunal indicated that it would be assisted if they were called as witnesses, then they would be called as witnesses of the Authority.

As Ms Mulcahy correctly identified, a witness summons will only be issued where the Tribunal considers that there is a real likelihood that the witness will give evidence that will materially assist the Tribunal in its determination of an issue or issues in the proceedings: see Ford and Owen v FCA [2017] UKUT 147 (TCC) at [12].

In determining what is an “issue in proceedings”, as Ms Mulcahy submitted, the starting point is the pleadings. It is now well established, and as Mr Smith accepted in his submissions, the conduct of an investigation is not an issue the Tribunal must determine on a reference so that the Tribunal will not be assisted by the cross-examination of witnesses in respect of that issue: see in this regard Banque Havilland SA and Ors v The Financial Conduct Authority [2024] UKUT 115 (TCC) at [133].

As Ms Mulcahy also submitted, even if the witness is expected to have highly relevant evidence, it does not follow that the Tribunal will direct that witness to give evidence. Relevant evidence is a pre-condition…but it is not itself a sufficient condition: see Barclays v FCA [2024] UKUT 00214 (“Barclays”) at [45]. Factors that the Tribunal may take into account are (i) the fact that the Authority does not consider it essential for the witness to give evidence in order to make good its case on the reference(s), (ii) that evidence relevant to the disputed matters is available from other sources, and (iii) the potential witness’s stance on giving evidence. Each case will, however, turn on its own facts and merits: See Barclays at [44] and [46].

The four potential witnesses are as follows:

With regard to Ms Butler, I cannot see that the Tribunal will be assisted in any material respect by her providing evidence. The note of the telephone call has been provided and I am not aware of any dispute as to its contents.

With regard to Ms Tuckley, the Authority is tendering Mr Jonathan Davidson as a witness. Mr Davidson was a senior official at the Authority and whose approval was necessary to open the investigation. He is therefore ideally suited to provide evidence as to the circumstances of which the decision was taken to open the investigation. In those circumstances, I cannot see that the Tribunal would be assisted by any evidence from Ms Tuckley.

With regard to Ms Rivett, as lead investigator she was responsible for the interview with Mr Staley on 20 December 2019. Mr Smith submitted that Mr Staley was entitled to know why disclosure of email correspondence with legal advisers in that interview was limited in the way it was, particularly in the light of the request made by his legal advisers for adequate pre-interview disclosure. Mr Smith submits that this is a matter of real significance given the Authority’s approach to the accuracy of Mr Staley’s answers in interview.

This appears to me to be a criticism of the manner in which the Authority conducted its investigation, which, as the authorities demonstrate, is not an issue to be determined on the reference. Mr Smith will of course, at the substantive hearing, be entitled to ask the Tribunal to place limited weight on the interview evidence because of the way the interview was conducted and the Tribunal will have regard to any such submissions. However, I do not consider that the Tribunal will be materially assisted by evidence from Ms Rivett as to the manner in which the interview was conducted.

With regard to Mr Woods, what was discussed during the telephone call and meetings referred to above in which he participated are clearly matters which are relevant to these proceedings. Mr Smith says that Mr Staley proposes at the substantive hearing to rely upon a note of the meeting at the Bank of England on 18 December 2019 and that if any issue arises as to the accuracy of the note of that meeting at which persons other than Mr Woods were present the Tribunal may be assisted by his evidence, depending on the nature and extent of any dispute.

In my view, the fact that Mr Woods’s evidence may be of assistance of the Tribunal is not sufficient to invite the Authority to ask him to give evidence. The test is whether the Tribunal will be materially assisted by his evidence. The Authority proposes to call Mr Higgins and Mr Bailey who have relevant evidence to give on these matters. The Authority has taken the view that there is no need to call Mr Woods to corroborate relevant evidence that may be given by Mr Bailey and Mr Higgins in order to assist their case and in those circumstances I see no reason to consider that evidence from Mr Woods will advance matters any further.

Accordingly, the Potential Witnesses Application is dismissed.