At the end of a much-cited passage about witness’ memory Leggatt J. suggested that the best approach for a judge in a commercial case was, “to place little if any reliance at all on witnesses’ recollections of what was said in meetings and conversations, and to base factual findings on inferences drawn from the documentary evidence and known or probable facts” (Gestmin SPA SA v Credit Suisse (UK) Ltd  EWHC 3560 (Comm) at para 22).
If the court places little reliance on witness recollection a party contemplating litigation based on an oral agreement will wish to obtain as much documentation as possible from the other side before issuing its claim. Such documents are not only useful to assess the merits of the proposed case but enable the proposed claimant to ensure that the terms of the oral agreement it alleges chime with the contemporaneous documents held by the proposed defendant.
The Practice Direction – Pre-Action Conduct and Protocols only requires the pre-action exchange of “key documents” relevant to the issues in dispute (para 6(c)). Where an oral agreement is alleged there may not be a “key document” at all.
To what extent can a proposed claimant apply for pre-action disclosure under COR 31.16 to get copies of documents created contemporaneously to the alleged oral agreement? That was the issue before Master Sullivan in Corbyn v Evans  EWHC 130 (QB). The applicant, a member of an unincorporated association represented by the respondent, claims that there was an oral agreement made between his representatives and those of the officers of the unincorporated association concerning the outcome of disciplinary action taken against him. The applicant alleges the agreement had been breached and issued an application for pre-action disclosure of various classes of documents relating to the disciplinary action and the oral agreement. The respondent denies that an oral agreement was reached. The applicant has an alternative case that improper considerations had been taken into account in decisions concerning him. It is well-established that the court will often imply a term as to the manner in which a decision-making power can be used if it is exercisable by one party and affects the rights of both parties (see Braganza v BP Shipping Ltd  UKSC 17).
In considering the application Master Sullivan identified that there was a jurisdictional hurdle as well as a question of discretion to consider. The part of the jurisdictional test at issue in Corbyn was CPR 31.16(3)(d) which required a finding that disclosure before proceedings started was desirable in order to:
“(i) dispose fairly of the anticipated proceedings;
(ii) assist the dispute to be resolved without proceedings; or
(iii) save costs”
The jurisdictional threshold is relatively low; the applicant had to show a “real prospect” of one of the matters set out in CPR 31.16(3)(b) being satisfied.
Despite the low threshold the Master considered that the jurisdictional threshold was not met in relation to the allegation of an oral agreement. Fairness did not require disclosure because the applicant had access to witnesses who were party to the oral agreement and knew the terms of the agreement he alleged. The only way that proceedings would be avoided or costs would be saved was if the documents showed that there was an agreement as alleged, but the Master could not take a view as to what the documents might show and took at face value the respondent’s case that there was no oral agreement.
The jurisdictional threshold was met in relation to the improper consideration argument. There was a real prospect that pre-action disclosure could avoid the costs of amendments to statements of case. However, the Master declined to exercise the discretion to grant pre-action disclosure. The costs were unlikely to be significant and if only a suspicion of an improper consideration was required to trigger pre-action disclosure then it would be available for every allegation of a breach of a Braganza type clause.
Whilst every case for pre-action disclosure is determined on its own facts the Master’s approach in Corbyn teaches the following lessons for commercial litigators:
- Where a party has access to witnesses to the alleged agreement it will be difficult to obtain pre-action disclosure of documents relevant to the existence or terms of an oral agreement. If the applicant can plead its case the court will be unwilling to look behind a respondent’s assertion that documents do not establish the applicant’s case. There is little incentive for a party alleged to have breached a disputed oral agreement not to keep their cards close to their chest, if they wish to do so.
- An allegation relating to the internal decision making of a respondent has better prospects of crossing the jurisdictional threshold but to get across the discretionary hurdle an applicant needs to show that there is more than a suspicion that a Braganza type clause has been breached and should frame their application to explain why circumstances particular to their case require pre-action disclosure.