Janan George Harb v Hrh Prince Abdul Aziz Bin Fahd Bin Abdul Aziz
| Jurisdiction | England & Wales |
| Judge | Mr Justice Arnold |
| Judgment Date | 21 February 2017 |
| Neutral Citation | [2017] EWHC 258 (Ch) |
| Docket Number | Case No: HC09C01992 |
| Court | Chancery Division |
| Date | 21 February 2017 |
[2017] EWHC 258 (Ch)
Mr Justice Arnold
Case No: HC09C01992
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Rolls Building
Fetter Lane, London, EC4A 1NL
Ian Clarke QC (instructed by Hughmans) for the Claimant
Ian Mill QC and Shaheed FatimaQC (instructed by Howard Kennedy LLP) for the Defendant
Hearing date: 6 February 2017
Introduction
There are two applications before the Court:
i) an application by the Claimant ("Mrs Harb") for directions for the re-trial of her claim against the Defendant ("the Prince"); and
ii) an application by the Prince for an order that, unless Mrs Harb complies with an order made by the Court of Appeal to pay the Prince £250,000 as an interim payment in respect of costs within 14 days, her claim be struck out alternatively stayed.
Background
Mrs Harb was born in 1947. Her claim in these proceedings arises out of an alleged oral agreement between herself and the Prince in June 2003 whereby the Prince agreed to pay Mrs Harb £12 million and to procure the transfer to her of two properties in Cheyne Walk. The Prince denies that he made any such agreement. In the alternative the Prince contends that any agreement was made on behalf of his father, the late King Fahd, and was not binding upon the Prince.
On 1 May 2008 Mrs Harb was declared bankrupt with creditors exceeding £3 million.
The claim was initially brought by Mrs Harb's trustee in bankruptcy shortly before the expiry of the limitation period in June 2009, but in June 2010 the trustee obtained permission to discontinue. Following hearings before Kevin Prosser QC sitting as a Deputy High Court Judge and the Court of Appeal in 2011, the notice of discontinuance was set aside. In August 2012 the trustee assigned the cause of action to Mrs Harb for £1,000.
The Prince then pursued an application originally made in January 2010 to strike out the claim on the ground of state immunity, but that application was unsuccessful before both Rose J and the Court of Appeal: see Harb v Aziz [2015] EWCA Civ 481, [2016] Ch 308.
The claim was tried by Peter Smith J over seven days in July 2015. On 3 November 2015 he handed down judgment ( [2015] EWHC 3155 (Ch)) finding in favour of Mrs Harb. By his order of the same date, Peter Smith J entered judgment for Mrs Harb in the sum of £15.45 million including interest and granted specific performance of the agreement to transfer the two properties.
The Prince appealed on a number of different grounds. Four of these related to the substance of the judgment, while the fifth raised an allegation of apparent bias on the part of the judge. The Court of Appeal rejected the fifth ground of appeal, but allowed the appeal on grounds one to four: see Harb v Aziz [2016] EWCA Civ 556, [2016] 3 FCR 194. The Court of Appeal did not feel able to say that the judge should have found that there was no agreement or that any agreement was not binding upon the Prince, but it concluded at [48] that "the deficiencies in the judgment are so serious that it cannot be allowed to stand and … the matter must be remitted to the High Court for re-trial".
By its order dated 16 June 2016 (sealed 5 July 2016) the Court of Appeal ordered Mrs Harb to pay 75% of the Prince's costs of the appeal to be subject to detailed assessment on the standard basis if not agreed and to make a payment of £250,000 on account of those costs within 28 days. This order was stayed pending any application to the Supreme Court.
Mrs Harb applied to the Supreme Court for permission to appeal. That application was dismissed on 21 December 2016.
On 11 January 2017 Mrs Harb applied for directions for the re-trial of her claim. On 30 January 2017 the Prince applied for an order in the terms set out above.
Mrs Harb has not paid any part of the £250,000 she was ordered to pay on account. Her evidence is that she is unable to do so. I shall consider that evidence in more detail below.
The Prince's application
It is common ground that Mrs Harb is in breach of the Court of Appeal's order requiring her to pay the Prince £250,000 on account of costs. In those circumstances, the Prince contends that the court should either make an order striking out Mrs Harb's claim unless she pays that sum within 14 days or make an order staying her claim until she has paid that sum. Mrs Harb does not dispute that the Court has power to make such orders. Mrs Harb says that she is unable to pay that sum, and therefore no such order should be made because it would stifle her claim and thus amount to a disproportionate interference with her right of access to the court under Article 6(1) of the European Convention on Human Rights.
Counsel for the Prince relied not only upon the fact that Mrs Harb had failed to comply with the Court of Appeal's order, but also the circumstances in which that order came to be made. As is usual, when the Court of Appeal sent the parties its judgment in draft, it invited them to file written submissions as to consequential orders, and in particular costs. In the written submissions filed on behalf of Mrs Harb, it was stated that:
"… any order for payment [on account] will be beyond Mrs Harb's means and resources, with the result that she will be unable to make any such payment. If the Court is minded to make such an order, Mrs Harb would ask for a further 48 hours to file evidence confirming her own lack of assets with which to meet any order and her inability to borrow or secure an advance sufficient to do the same."
The Court of Appeal made the order for the payment on account without affording Mrs Harb further time in which to file evidence of her lack of means as she had requested. It did not give any reasons for proceeding in that way. I agree with counsel for the Prince that it may be inferred that the Court of Appeal did not consider that Mrs Harb's alleged lack of means was a reason not to make the order. I do not accept his submission that it is incumbent on Mrs Harb to apply to the Court of Appeal for an extension of time or for relief from sanctions. The Court of Appeal's order does not provide for any sanction for non-payment, nor is any sanction implied. Nor do I accept the submission that, in the absence of any such application by Mrs Harb, the Court of Appeal's order supports the making of the order which the Prince now seeks. The Court of Appeal was not concerned with the question of what the consequences should be if Mrs Harb failed to comply with its order, and in particular what the consequences should be having regard to her Article 6(1) rights. That is a matter for this Court to consider for the first time in the light of the evidence and submissions directed to it.
I did not understand counsel for Mrs Harb to dispute that the onus lay upon her to establish that she was unable to pay the sum of £250,000. Counsel for the Prince submitted that Mrs Harb's evidence did not demonstrate this. I must therefore consider that evidence. In her second witness statement, Mrs Harb states that:
i) She was made bankrupt on 1 May 2008 as noted above.
ii) She has no assets other than (a) her cause of action against the Prince and (b) the right to receive 30% of the net profits of a film based on a memoir she has published, but the film has yet to be made.
iii) She received an upfront payment of £170,000 under the film agreement in early 2015, but that money has been spent on legal costs and other expenses. She has given further details of these payments in her third witness statement.
iv) She lives in a flat which belongs to her daughter.
v) Her only income is her state pension.
vi) None of her family are willing or able to lend her any money.
vii) Her solicitors and counsel at trial acted on a basis which meant that there was no immediate obligation to make payment and are continuing to act on that basis. She has explained in her third witness statement that she paid her lawyers the (unrecovered) costs of resisting the Prince's state immunity application, while at trial they acted pursuant to the terms of an agreement under which she is only required to pay them if she wins the action. In the Court of Appeal and Supreme Court she retained them on an ordinary fee-paying basis, but they recognise that she cannot pay them at present and therefore have extended her credit.
In addition, counsel for Mrs Harb informed me on instructions that Mrs Harb's book had only sold a few copies and hence Mrs Harb had not received any money from that source.
In my judgment Mrs Harb's evidence does establish that she is unable to pay £250,000 from her own resources. It also establishes that she is unable to borrow from members of her family. What it does not do explicitly is state that she is unable to borrow from any other source. Counsel for Mrs Harb confirmed on instructions that this was the case, however. Furthermore, he pointed out that the list of creditors from Mrs...
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