Alpha Rocks Solicitors (Claimants/Appellants) v Benjamin Oluwadare Alade
| Jurisdiction | England & Wales |
| Judge | Lord Justice Vos,Lord Justice Fulford,Lord Justice Moore-Bick |
| Judgment Date | 09 July 2015 |
| Neutral Citation | [2015] EWCA Civ 685 |
| Docket Number | Case No: A3/2014/3971 |
| Court | Court of Appeal (Civil Division) |
| Date | 09 July 2015 |
[2015] EWCA Civ 685
Lord Justice Moore-Bick
Lord Justice Fulford
and
Lord Justice Vos
Case No: A3/2014/3971
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Mr Kevin Prosser QC
HC13B00617
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Oluwole Afolabi Ogunbiyi (instructed by Alpha Rocks Solicitors) for the Appellants
Mr Robert-Jan Temmink (instructed by Teacher Stern LLP) for the Respondent
Hearing date: 25 th June 2015
This case raises the question of when it is appropriate to strike out a claim on the grounds that the claimant has abused the process of the court. It arises in the context of a claim by a firm of solicitors to recover their costs and expenses from their client in circumstances in which the client alleges that the bills were fraudulently exaggerated or misstated.
Mr Kevin Prosser QC, sitting as a deputy judge of the Chancery Division, found that two of the bills presented by Alpha Rocks Solicitors, the claimants and appellants (the "solicitors"), to Mr Benjamin Oluwadare Alade, the defendant and respondent (the "client"), were, in the first case, partly false and deliberately exaggerated, and in the second case, brought on the basis of fabricated documents and of a bill of costs that was known to be inaccurate. The judge made these findings on a strike out application brought under CPR Part 3.4(2)(b) and under the inherent jurisdiction of the court, at which no oral evidence was called, on the basis only of written evidence and the documents.
The two bills were in respect of separate pieces of litigation in respect of which the solicitors had acted for the client. The first was a claim in the Central London County Court brought against the client by his brother, Mr Rufus Alade, concerning property in London (the "Rufus claim"), and the second was a claim before the Adjudicator to HM Land Registry brought against the client by his wife, Mrs Catherine Alade, concerning registration of the wife's home rights notice against the title to a London property (the "Catherine claim"). The fees in issue in the bills were £131,514.56 in respect of the Rufus claim (the "Rufus fees" and the "Rufus bill"), and £43,732.50 in respect of the Catherine claim (the "Catherine fees" and the "Catherine bill").
Mr Prosser struck out the solicitors' claims for the entirety of the Rufus fees and the Catherine fees, though he left in place two other claims for smaller amounts of fees. He acknowledged that the step he was taking was draconian, but held that the abuses which he had identified both involved a serious misuse of the court's procedure, rendered further proceedings thoroughly unsatisfactory, and created a serious risk that a fair trial of the claims would be impossible.
The solicitors appeal on essentially 5 grounds. First, they submit that the application to strike out was itself an abuse of process. Secondly, they say that the judge ought not to have conducted a mini-trial. Thirdly, in relation to the Rufus bill, the judge was wrong to find that the solicitors had not prepared the trial bundles for which they charged, and the order was anyway disproportionate. Fourthly, the Catherine bill should not have been struck out when the judge could not conclude that it was exaggerated, and when he had misunderstood "paid counsel" as meaning counsel had been paid rather than "not pro bono counsel". Finally, the solicitors appeal the costs and other orders made by the judge on a number of grounds.
The judge's judgment
The judge set out the lengthy history of the relationship between the solicitors and the client. Little of that background is relevant to the appeal which is now advanced. The judge then rejected the solicitors' contention that the strike out application itself was an abuse of process or vexatious, drawing attention to the difference between the function of the Senior Court Costs Office to decide what sums are properly due to the Solicitors for services rendered, and his own task which was to decide whether the claim should be struck out.
The judge then reminded himself at paragraph 21 that he should avoid undertaking a "mini-trial or a lengthy and detailed examination of the facts", and that he was aware of the "dangers of coming to factual conclusions without the benefit of disclosure and oral evidence where the credibility of witnesses is at stake". He then rejected the argument that the claim should be struck out for non-service of the bills in compliance with section 69 of the Solicitors Act 1974. There is no Respondent's Notice re-instating this or any other point.
The judge then considered various allegations of "recent creation of documents", which were really allegations that new documents were being put forward by the solicitors as if they had been created and relied upon at an earlier date. He rejected this allegation in respect of certain documents relating to the Rufus bill and another bill, but accepted it in relation to a letter from the solicitors dated 16 th January 2012 (the "16 th January letter") and the 6-page bill of costs (the "6-page bill") supposedly enclosed with it relating to the Catherine fees. He found that these documents were created by the solicitors after the event, and that a witness statement of a Mr Abimbola Adetoye (a partner in the solicitors' firm) dated 4 th October 2013 stating that these documents had been served on the client on 16 th January 2012 was untrue. He made these findings primarily on the basis that the Catherine litigation was not concluded before 16 th January 2012 and that the 16 th January letter referred to the court dismissing the application on 28 th February 2012, and the 6-page bill itself charged in respect of several items of work that post-dated 16 th January 2012.
The judge then found that the Rufus bill but not the Catherine bill included deliberate exaggeration of the fees. The Catherine bill was, however, produced by the solicitors knowing it to be inaccurate. The deliberate exaggeration of the Rufus bill was found to be the charging for 8 hours work on 22 nd March 2010 for preparing trial bundles and for 107.5 hours work (which I note totals nearly 3 weeks work) between 23 rd March and 7 th April 2010 on perusal and preparation of trial bundles. The judge's decision was founded on the findings that (i) the opposing party in the Rufus litigation had prepared the trial bundles in accordance with an order of the court, (ii) that had been confirmed by the opposing party's solicitors to the client's solicitors in emails and a witness statement during this litigation, and (iii) the contemporaneous correspondence between the solicitors and the opposing party's solicitors showed that the solicitors knew they were not preparing the bundles. The judge rejected the argument and the evidence of Mr Adetoye that the solicitors had indeed prepared parallel bundles on the grounds that it was "wholly unconvincing" for seven forensic reasons concerned with the quality of Mr Adetoye's knowledge and the contemporaneous documents. The judge was shown a number of files that were said to be the parallel bundles, but he said they were just unpaginated documents collated from the other side's draft index. The judge also rejected the suggestion that the Rufus bill was referring to searching for documents for inclusion in the other side's bundles. He concluded that the entries in the Rufus bill to the effect that the solicitors had spent 115 hours preparing bundles was simply false.
In relation to the Catherine bill, the judge found that it was drawn up knowing it to be inaccurate in a number of respects as to the work done and the fee earners in respect of whom charges were made, relying on the evidence adduced by the solicitors themselves from Mr Wasui Abiola Otunga, the solicitors' costs consultant. He also found that it was inaccurate in stating that the solicitors had paid Mr Holland QC's fees of £8,750 plus VAT, when there was in fact £5,000 plus VAT outstanding.
Mr Prosser's conclusion on the strike out was expressed as follows:-
"74. In my opinion, [the solicitors] are guilty of abuse of process in bringing the Rufus claim in reliance on deliberately exaggerated fees, and in bringing the Catherine claim in reliance on fabricated documents and on a bill of costs which was drawn up knowing it to be inaccurate.
75. In these circumstances I have power to strike out those claims. In considering whether or not to do so, I bear in mind that it is a draconian step because it would extinguish substantive rights. However, the abuses which I have identified both involve a serious misuse of the court's procedure. Moreover they render further proceedings thoroughly unsatisfactory and create a serious risk that a fair trial of the claims would be impossible. In addition, it would be unfair on [the client] to subject him to the time and cost involved in a detailed assessment of the claims. In these circumstances I have no hesitation in refusing to allow [the solicitors] to take further part in the proceedings so far as those claims are concerned, and I shall strike them out accordingly".
On 12 th December 2014, the judge therefore ordered that the claims for the Rufus and Catherine fees be struck out and that the solicitors should pay 75% of the client's costs of the strike out on the indemnity basis, with £20,000 on account pending assessment. He ordered the solicitors to pay 75% of the costs because the client had failed on...
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