Mr Aiyub Karbhari and Another v Mr Ilyas Ahmed
| Jurisdiction | England & Wales |
| Judge | Mr Justice Turner,Mr Justice Turner : |
| Judgment Date | 17 December 2013 |
| Neutral Citation | [2013] EWHC 4042 (QB) |
| Docket Number | Case No: PR290232 |
| Date | 17 December 2013 |
| Court | Queen's Bench Division |
[2013] EWHC 4042 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
PRESTON DISTRICT REGISTRY
Preston Combined Court
Mr Justice Turner
Case No: PR290232
Mr Charles Miskin QC and Riswan Ashique (instructed by Dakers Marriot Dugdale) for the Claimants
Mr Peter Brunner (instructed by Mohamed & Co) for the Defendant
Hearing dates: 12 th and 13 th December 2013
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
INTRODUCTION
The claimants in this case, father and son, claim the repayment of monies, together with interest thereon, which they say they advanced to the defendant in a series of transactions alleged to have taken place between 15 February 2007 and 23 June 2008.
The trial was listed to start on 12 December 2013 with an estimated length of hearing of seven days.
On the morning of the first day of the trial, the defendant's counsel informed the court that he had received an email from his client on the evening before and that the contents would necessitate an application to amend the Defence and to adduce a supplementary witness statement. He waived privilege on the email a copy of which was provided to the claimants and to the court.
In the light of this development, the matter was adjourned until the morning of the following day to give the defendant time to make, sign and serve a proposed supplementary witness statement and for a proposed Amended Defence to be drafted. There also fell to be determined the status of two other proposed witness statements served on behalf of the defendant from a Mr Vorajee and a Mr Debar, dated 10 and 12 December 2013 respectively.
On 13 December 2013, counsel for the defendant sought to persuade me to accede to the applications to amend the Defence and allow oral evidence to be given by the authors of the new witness statements. The claimants invited me, in response to these recent procedural developments, to strike out the Defence in its entirety. My adjudication on these issues forms the subject matter of this judgment.
BACKGROUND
It is not necessary for the purposes of this judgment to set out the factual background in a narrative of any great detail save in those respects which are most salient to the resolution of the specific issues which I am required to address.
In summary, the claimants allege that, in the context of more than 20 transactions taking place over a period of nearly 18 months, they handed over to the defendant millions of pounds in cash and cheques pursuant to an agreement that the defendant would repay the monies after a fixed period together with a guaranteed return. A typical transaction would involve the payment of a sum of tens of thousands of pounds to be repaid in 18 months together with an uplift of 100%.
Some of these transactions involved monies allegedly provided directly by the claimants. Others involved third parties who, it is said, provided the first claimant with monies upon the promise of a return lower than that which had been offered by the defendant to the first claimant thus leading the latter to expect to earn a substantial commission on these deals.
The sceptical observer might readily have formed the conclusion that all this was far too good to be true. He would have been right.
The investors, it is said, understood that the returns were being generated by seemingly inexhaustible profits generated in the Dubai property market through a company by the name of Profile FZ LLC ("Profile"). The vehicle through which investment monies were channelled into "Profile" was an undertaking called Property Network.
By September 2008, rumours were beginning to circulate that the defendant was no longer good for the money. They proved to be well founded. In the vast majority, if not all, cases neither the original investments nor any return was recovered. Eventually, the claimants commenced these proceedings.
THE ORIGINAL DEFENCE
In his Defence, the defendant denied entering into the transactions which were the subject matter of the claim or having anything to do with transferring payments to Property Network. Paragraph 5 stated:
"The defendant denies paragraphs 9, 10, 11, 12, 13, 14 and 15 of the claimants' Particulars of Claim. He denies that he received any of the sums as claimed either payable to himself or to the company described as Property Network, either by way of cheque, cash or telegraphic transfer…"
A statement of truth signed by the defendant was appended to this Defence.
THE DRAFT AMENDED DEFENCE
A draft Amended Defence was produced to the court on the morning of the second day of the period over which the matter had been listed for trial. It purported to strike out the original Defence almost in its entirety. The original paragraph 5 was swept away. A new paragraph 4 (d) admitted that the defendant received four cheques from four different investors which he passed on to a representative of Profile.
A "supplementary witness statement" from the defendant was also drafted in support of the Amended Defence. Its contents were wholly at odds with the Defence as originally pleaded. It, too, admitted that the defendant did indeed receive cheques for onward transmission and investment. Paragraph 19 concedes that "…Mr Mohammed Hanif Patel in Dubai had authorised me to sign receipts on Profile's behalf."
THE DEFENDANT'S EXPLANATION
In paragraphs 3 and 4 of his supplementary witness statement the defendant says:
"3. I should explain to the court why I am making this further statement. The reason that my statement dated 29 April 2013 was so short of facts and detail was that I was concerned that if I told the full story I could get a number of other people in trouble in connection with money laundering. As far as I am concerned I am personally not at risk should any investigation take place.
4. Now that it is clear to me that the trial is going to go ahead I have decided that I must tell the whole story."
Counsel for the Defendant realistically admitted that the supplementary witness statement did not simply provide additional evidence but evidence which, at least in part, contradicted the content of the Defence as originally pleaded. He further volunteered the unavoidable concession that his applications were "extraordinarily late."
THE LAW
CPR Rule 32.10 provides:
" 32.10 Consequence of failure to serve witness statement or summary
If a witness statement or a witness summary for use at trial is not served in respect of an intended witness within the time specified by the court, then the witness may not be called to give oral evidence unless the court gives permission."
In this case the court ordered witness statements to be served by 29 April 2013. The supplementary witness statement of the defendant was, therefore, proffered over seven months late and, even more importantly, on the second day of the period over which the matter had been listed for trial.
Boyle v The Commissioner of Police of the Metropolis [2013] EWCA Civ 1477 was a decision of the Court of Appeal with respect to a case arising before the commencement of the more stringent regime introduced by way of the reforms recommended by Sir Rupert Jackson which came into force on 1 April 2013.
In that case, the claimant sought my permission as trial judge to introduce an expert's report which had been served upon the defendant one working day before the trial was due to start. I refused permission. The claimant appealed to the Court of Appeal. Longmore L.J. held:
"As I say, the report had been served on Friday of the week before the trial was due to begin. This was absurdly late, especially since the trial was originally due to start on Monday 25 February. The judge of course had a discretion in the matter, and whether one calls his decision a case management decision or not, which is what Mr Bishop submitted it was, does not seem to me to matter very greatly. In fact, the judge considered the matter carefully. He followed the notes to part 35 in the White Book which said that a late application to call expert evidence was effectively an application for relief from the sanction of being unable to call expert evidence which had not previously been served. The judge considered all the matters he was required to consider under the then current version of CPR 3.9 (it has since April of this year been considerably simplified). It is, in my judgment, impossible to see that the judge has gone wrong in his assessment of those factors in any way, especially in the light of the fact that the claimant's solicitors had been expressly invited, in correspondence from the defendant's solicitors, to serve the necessary evidence. There was not before the judge, and there still is not, any explanation of how the matter came to be ignored or overlooked."
Rule 35.13 relating to the consequences of failing to serve an expert's report is drafted in similar terms to Rule 32.10 relating to the service of witness statements:
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