Gray v Boreh and Others

Hearing date: 3 February 2016

Further submissions received on 7 December 2016, on 21 December 2016 and on 7 January 2017.

Approved Judgment

Introduction

This is an application for permission to appeal by a non-party to the proceedings, a Mr Peter Gray ("the applicant" or "Mr Gray"), against certain findings of fact made by Flaux J in the course of a successful application made by the defendant, Mr Boreh, in a Commercial Court action, to set aside a freezing order which had been made against him and for an order for wasted costs against Gibson Dunn & Crutcher LLP ("Gibson Dunn"). The application was made on the ground, amongst others, that the claimants in the action, the Republic of Djibouti and others ("the claimants"), had dishonestly misled the court through their solicitor, Mr Gray, a partner in the Dubai office of Gibson Dunn at the material time, in connection with the application for the freezing order.

Mr Gray was not himself personally a party to the application made by Mr Boreh to set aside the freezing order, and no relief was sought against him. He served factual evidence — initially on behalf of the claimants, and later on behalf of Gibson Dunn — concerning the circumstances in which the court had been misled. Counsel for Mr Boreh applied for an order for Mr Gray's cross-examination, as neither the claimants, nor Gibson Dunn, proposed to tender him for cross-examination. An order for his cross-examination was made by Flaux J, expressly pursuant to CPR r. 32.7. At the hearing of the application, which lasted for five days, Mr Gray was called to give evidence by the court, but not by virtue of any exercise of the court's compulsive powers, but "since he was an officer of the court" and because neither the claimants nor Gibson Dunn were calling him as their witness.

Mr Gray was permitted to make representations through his own leading counsel at the hearing of Mr Boreh's set aside application. However, he was only formally joined to the proceedings following the hand down of Flaux J's judgment on the application, and following a successful application by Mr Boreh for wasted costs against Gibson Dunn. Even then, he was joined "only for the purposes of applying for permission to appeal"; see paragraph 11 of the order dated 31 March 2015.

The issues on the application are: (i) has this court jurisdiction to entertain an appeal by Mr Gray; and (ii) if so, should permission to appeal be granted.

Procedural background

The detailed chronology is as follows.

On 11 September 2013, on the application of the claimants, Flaux J granted a freezing order, proprietary injunctions and other relief against Mr Boreh after a two day inter partes hearing. The principal affidavits in support of the freezing order application had been sworn by Mr Gray, who was the principal partner with the conduct of the action on the claimants' behalf, and who was involved at all material times on their behalf, until shortly before the hearing of the set aside application.

In a judgment dated 13 November 2014, Flaux J determined that he had been misled at the time of the application for the freezing injunction. Subsequent to service of Mr Gray's fifth affidavit on 29 December 2014, Mr Boreh applied by notice dated 9 January 2015 to set aside the freezing injunction and other relief which had been granted on 11 September 2013. The basis for the set aside application was that the claimants and their legal representatives had deliberately and/or recklessly misled the court in the application for the freezing order and subsequently. The application was supported by a fourth affidavit of 9 January 2015 by a Ms Jefferies on behalf of Mr Boreh which, as recognised by Mr Gray in his counsel's skeleton argument for the set aside hearing dated 27 February 2015, made "numerous allegations of deliberate dishonesty against Mr Gray". The underlying allegation by Mr Boreh was that the criminal charges of terrorism against Mr Boreh had been used by the claimants and by Gibson Dunn "as part of a strategy to force a settlement of the civil proceedings and the civil proceedings have been used to lend credibility to the criminal charges."

In the light of the extremely serious allegations made against him, Mr Gray chose to instruct a separate counsel team from that instructed by Gibson Dunn, namely Mr Mark Simpson QC, Mr Nico Leslie and Mr James Hart of counsel. They submitted a skeleton argument dated 27 February 2015, although they had clearly been instructed some time before that date. In addition, Mr Gray served a sixth affidavit dated 17 February 2000 and a seventh affidavit dated 26 February 2015 which his skeleton argument described as "putting a very substantial amount of privileged material before the court ……intended to give, so far as possible given the volume of documents reviewed, a fair picture of Mr Gray's conduct and state of mind." Those affidavits recognised, again according to Mr Gray's skeleton, that he had "made serious errors of judgment, for which he profoundly apologises to this court."

By a letter dated 25 February 2015, Mr Gray and Gibson Dunn together reported the allegations made by Mr Boreh in the proceedings to the Solicitors' Regulation Authority.

The issues for determination at the hearing which took place over five days on 2 to 5 March and 9 March 2015 were thus: (i) whether Mr Gray had deliberately and/or recklessly misled the court; and (ii) whether the freezing injunction, proprietary injunction and other relief granted on 11 September 2013 should be set aside or some other order made by the court.

Because of the seriousness of the allegations of dishonesty being made against Mr Gray and the implications for him of a finding that he had deliberately misled the court, the hearing was conducted on a fully robed basis. At the hearing Mr Gray was represented by the three counsel who had signed his skeleton argument. The legal test applied by Flaux J in determining whether Mr Gray had deliberately misled the court and had thus been guilty, not just of professional misconduct but also of dishonesty was that stated by the Divisional Court (Richards LJ and Aikens J) in Bryant v Law Society [2007] EWHC 3043 (Admin); [2009] 1 WLR 163, namely, first, whether Mr Gray acted dishonestly by the ordinary standards of reasonable and honest people; and, secondly, whether he was aware that by those standards he was acting dishonestly.

In his judgment delivered on 23 March 2015, Flaux J found that Mr Gray had deliberately and dishonestly misled the court in the application for the freezing order in September 2013 and that, subsequently, in September to November 2014, he had dishonestly sought to cover up that fact. His judgment is to be found at [2015] EWHC 769 (Comm) and runs to 83 pages, dealing in detail with the allegations made against Mr Gray. As a result, by his order dated 23 March 2015 Flaux J set aside the freezing order. That order, against which Mr Gray seeks permission to appeal, did not include any declaration of fact relating to Mr Gray's conduct, nor did it include any provision directed at him personally. Mr Gray is not seeking to set aside any of the express provisions of the order, none of which were made against him personally; he is merely seeking to set aside the findings of dishonesty made against him by Flaux J.

By a further consequential order dated 31 March 2015 (sealed on 22 April 2015), Flaux J made certain costs orders against the claimants and a wasted costs order against Gibson Dunn. The consequential costs order dated 31 March 2015 referred, by way of description of certain costs, to "the costs of investigating and redressing the misleading evidence given by Mr Gray" (para 2c) and "the costs incurred …as a result of the improper and/or unreasonable acts or omissions of Mr Peter Gray (as identified in the judgment)". Again, Mr Gray does not seek to appeal against those costs orders. As I have already said, paragraph 11 of the 31 March 2015 order joined Mr Gray as an additional respondent to the proceedings, for the purposes of applying for permission to appeal.

Both the claimants and Gibson Dunn were represented by leading counsel at the set aside hearing and the consequential hearings. Neither sought permission to appeal.

At a case management hearing, which took place on 14 April 2015, Flaux J refused Mr Gray's application for permission to appeal the order dated 23 March 2015 setting aside the freezing order; see paragraph 1 of the order dated 14 April 2015 (sealed on 6 May 2015). The reasons which he gave were that, first, he had doubts as to whether the Court of Appeal had jurisdiction to entertain an appeal in such circumstances; he considered that this was a matter for this court itself to determine. Second, in any event, Flaux J did not consider that Mr Gray had any real prospect of successfully challenging his findings of fact on an...