Chan Mok Park v Hassan Hadi
| Jurisdiction | England & Wales |
| Judge | Lord Justice Warby,Lord Justice Stuart-Smith,Lord Justice Holroyde |
| Judgment Date | 29 April 2022 |
| Neutral Citation | [2022] EWCA Civ 581 |
| Docket Number | Case No: QB 2019 002602 |
| Year | 2022 |
| Court | Court of Appeal (Civil Division) |
[2022] EWCA Civ 581
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
FREEDMAN J
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Holroyde
Lord Justice Stuart-Smith
and
Lord Justice Warby
Case No: QB 2019 002602
George Bompas QC and Elizabeth Walsh (instructed by Sterling Winshaw Solicitors) for the Appellants
Ryan Ross ( instructed pro bono through Advocate) for the Respondent
Hearing date: 1 February 2022
Judgment Approved
This judgment will be handed down by the Judge remotely by circulation to the parties' representatives by email and release to The National Archives. The date and time for hand-down is deemed to be 11:00 on Friday 29 April 2022.
Lord Justice Holroyde, Lord Justice Stuart-Smith and
The Claimant Chan Mok Park (“Mr Park”) seeks damages for breach of a contract for the sale of the business of a public house (“the pub”). The Appellants Hassan Hadi and Haider Jaleel Abed (collectively, “the Appellants”) applied to strike out his claim. On 4 June 2020 Lavender J adjourned that application and made an “unless” order (“the 4 June order”) requiring Mr Park to take various steps by 18 June 2020. The adjourned hearing came before Freedman J (“the judge”) on 28 July 2020. In his reserved judgment handed down on 12 October 2020, the judge granted Mr Park relief from sanctions for breach of the 4 June order and dismissed the Appellants' application. By permission of Coulson LJ, the Appellants appealed against that order. Their appeal was heard on 1 February 2022. At the conclusion of the hearing we dismissed the appeal, reserving our reasons. This is the judgment of the court explaining the reasons for our decision.
The facts:
It is sufficient for present purposes to give a brief outline of the relevant facts. In 2019, Mr Park was the sole shareholder and director of two companies: Montscot Pubs Limited (“MPL”), which held a lease of the pub premises from the relevant brewery; and The Hand Flower Kitchen Limited (“HFKL”) which carried on the business. He offered the pub and the business for sale for £179,000. MPL was at the time in arrears of rent.
In early May 2019 there was a meeting between Mr Park and Mr Hadi. Mr Park's case is that they agreed to sell and buy the business for £170,000, with Mr Hadi paying a deposit of £30,000, paying the arrears of rent and paying the balance on completion of an assignment of the lease to Mr Hadi's company. In striking contrast, the appellants' case is that Mr Park agreed to sell the business for £40,000.
The two men met again in early June 2019 at the offices of Mr Park's solicitors. They have given conflicting accounts of what was agreed. There was however an exchange of correspondence on 6 and 7 June in which Mr Hadi's solicitors asked for confirmation of an agreement to the effect that Mr Hadi would take over MPL, the company which held the lease; Mr Hadi would provide his solicitors with £30,000, which the solicitors would pay to the freeholder in settlement of the outstanding rent; Mr Hadi would then apply for the lease to be assigned by the freeholder to his company, and would settle any debts owed to third parties by Mr Park's company; all debts owed by MPL, and all associated costs, “will be deducted from the previously agreed premium of £170,000”; and the net amount would be transferred to Mr Park's solicitors at the point of assignment of the lease. Mr Park's solicitors replied confirming that Mr Hadi would pay off the arrears owed to the landlord, and that sum, together with any other debts of Mr Park's company, “will be deducted from the agreed sale price (£170,000)”. They required the balance to be transferred to them upon completion, without waiting until the assignment of the lease.
Over the following days, to put matters neutrally, Mr Abed became the sole director and shareholder of MPL and Mr Hadi made a payment to the landlord of either £36,664.59 (Mr Park's account) or £37,910.59 (Mr Hadi's account) to discharge the arrears of rent. The circumstances and details of these events are the subject of much dispute. There may also be a dispute as to whether (as the Appellants contend) Mr Abed was the purchaser, with Mr Hadi merely acting on his behalf. It suffices for present purposes to note that, save for the discharging of the arrears of rent, neither of the Appellants made any other payment to or for the benefit of Mr Park.
Mr Park complains that his business worth £170,000 has been acquired for only £36,664.59. The Appellants contend that the agreed price was only £40,000, later reduced by agreement to the sum necessary to discharge the arrears. Matters are complicated by the fact that Mr Park had at all material times resided in a flat above the pub.
It will be apparent, even from that brief outline, that there are a number of important factual disputes between the parties.
Relevant features of the procedural history:
The claim was issued on a date which has not been identified. On 5 July 2019 Mr Park obtained a without notice injunction by which Mr Abed was restrained from interfering with Mr Park's residence. On 12 July the injunction was discharged pursuant to a consent order involving mutual undertakings. Mr Park was ordered to pay costs of £7,000 to Mr Abed, and to serve his Particulars of Claim by 19 July. The costs order has not been satisfied.
Particulars of Claim were served, and the Appellants filed a Defence and Counterclaim. No Defence to Counterclaim has been served. The Appellants applied to strike out the claim and/or for summary judgment. At the hearing of their application on 4 June 2020, Mr Park appeared in person, with the assistance of a McKenzie friend Mr Syed, to whom Lavender J gave limited permission to speak on Mr Park's behalf.
Lavender J adjourned the application to a hearing on 29 July 2020, and made an order which included the following recital:
“AND UPON the Claimant being informed that, henceforth, there will be no further toleration of any failure on the part of the Claimant to comply with the court's order and/or the Civil Procedure Rules, which must be fully complied with.”
The provisions of the order included the following:
“2. Unless by 4.00pm on 18 June 2020, the Claimant:
(i) Issues an application notice by Form N244 to amend his Claim Form and the Particulars of Claim and includes with the application a copy of the proposed amended Claim Form and Particulars of Claim;
(ii) Files and serves a witness statement providing an explanation as to why he did not:
a) file and serve a Reply and Defence to Counterclaim;
b) issue an application before today's hearing to amend his Particulars of Claim;
c) file and serve any evidence in response to the Appellants' application before 4 June 2020;
(iii) files and serves a further witness statement giving evidence of his financial means and exhibits to this witness statement the following documentation:
a) a fully completed Form EX140 (Record of Examination) form;
b) copies of all statements for all and any bank or building society account to which the Claimant is a signatory as at the date of this order and for the period 17 April 2020 to 17 June 2020;
the Particulars of Claim be dismissed and he shall pay the Appellants' costs of the Claim (to be assessed if not agreed).
…
7. The Claimant do pay the Appellants' costs of the Appellants' application summarily assessed in the sum of £20,805.”
In response to that order, Mr Park sent an email to the court at 3.55pm on 18 June 2020, to which he attached his application to amend the Claim Form and Particulars of Claim, two witness statements (one of which was unsigned, and neither of which contained a statement of truth in the terms required since 6 April 2020), a form EX140 relating to his means, and bank statements for one relevant account. The attachments did not include any bank statements relating to a relevant account held by HFKL.
Unfortunately, for technical reasons which are not said to reflect any fault on the part of Mr Park, one of the attachments could not be opened in the court office. Once that problem had been resolved, the documents were sent by email to the Appellants' solicitors at 4.33pm on 22 June.
By a letter dated 17 July 2020, the Appellants' solicitors asserted that service was defective because the email was sent days after the date specified in the 4 June order; it was sent outside court hours and was therefore deemed to have been served on 23 June, five days late; and in any event, service by email was not accepted by them, and was therefore not effective. On that basis, they contended that the Particulars of Claim stood dismissed and Mr Park must pay the costs of the claim.
The hearing before the judge:
The adjourned hearing came before the judge on 28 July 2020. As matters stood at the start of that hearing, there had been no application by Mr Park for relief from sanctions. Nor had he filed a witness statement explaining why he had not complied with the 4 June order. His McKenzie friend Mr Syed explained that he was working from home without appropriate office equipment and that Mr Park could not afford legal representation.
The judge identified the issues which he had to determine as follows:
i) Had the Particulars of Claim been dismissed due to the failure to obey the 4 June order?
ii) If Mr Park was able to proceed, should he be permitted to amend his claim form and Particulars of Claim?
iii) Should the Appellants be given judgment on the Counterclaim?
iv) Should permission to amend be made subject to a condition that Mr Park must satisfy the outstanding costs order (a sum in excess of £27,000) and pay £50,000 into court...
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