Ms Francesca Elu v Floorweald Ltd

JurisdictionEngland & Wales
JudgeMr Justice Linden
Judgment Date15 May 2020
Neutral Citation[2020] EWHC 1222 (QB)
CourtQueen's Bench Division
Docket NumberCase No: QB/2018/0333
Date15 May 2020

[2020] EWHC 1222 (QB)

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

ON APPEAL FROM THE LEWES COUNTY COURT (HHJ COLTART)

Royal Courts of Justice

Strand, London, WC2A 2LL

Before:

Mr Justice Linden

Case No: QB/2018/0333

Between:
Ms Francesca Elu
Claimant/ Respondent
and
Floorweald Limited
Defendant/ Appellant

Mr George Mallet (instructed by Girlings Solicitors) for the Claimant

Mr Philip Jones (instructed by Mackrell) for the Defendant

Hearing dates: 24 April 2020

Approved Judgment

Mr Justice Linden Mr Justice Linden

The Honourable

INTRODUCTION.

1

Ms Elu, who I will refer to as “the claimant”, is the former owner of the leasehold on a flat at 8 Burch Road, Gravesend. From 8 August 2014 Floorweald Limited, to which I will refer as “the defendant”, was the owner of the freehold of 8 Burch Road and owed the claimant obligations to keep the building in a reasonable state of repair.

2

On 14 August 2015 and on 27 July 2016, having sold the leasehold in an auction on 22 July 2016, the claimant brought claims in the County Court alleging breaches of its repair obligations by the defendant (“the Claim”). Following a trial before HHJ Coltart at Lewes County Court on 19 and 20 November 2018, she was awarded £62,834.25 plus interest plus costs on an indemnity basis by Order dated 20 November 2018 (“the Order”).

3

In its Notice of Appeal, dated 11 December 2018, the defendant challenges the Order on various bases. However, at the heart of its appeal is an allegation that the Claim was dishonest in that it was based on false evidence given by the claimant and on forged or doctored documents, and that the Order was therefore procured by fraud (“the fraud issue”). Accordingly, pursuant the principles set out by the Court of Appeal in Noble v Owens [2010] EWCA Civ 224; [2010] 3 All ER 830, on 21 May 2019 Andrew Baker J ordered that the appeal be stayed whilst the fraud issue is tried as a preliminary issue in the Queen's Bench Division. To this end, he required the defendant to set out its case on the fraud issue in a statement of case as if it was a fresh claim to set aside the Order. Particulars of the fraud issue (“the Statement of Case”) were therefore served by the defendant on 14 June 2019.

4

The defendant's allegations of fraud are and always have been denied by the claimant, and I am not required to decide this issue one way or the other. By application notice dated 21 November 2019 (“the Application”) she seeks to strike out the Statement of Case on the basis that it raises matters which are res judicata and/or is an abuse of process and/or pursuant to CPR3.4(2)(b). Her position is that the allegations of fraud which are made in the Statement of Case were made in the course of the proceedings before the County Court and were either abandoned by the defendant at or before trial, or adjudicated in her favour in the course of the interlocutory proceedings and/or by HHJ Coltart at trial. She also says that the fraud issue is not based on fresh evidence: virtually all of the evidence on which the defendant wishes to rely was within its knowledge at the time of trial, albeit the defendant had not been permitted to deploy all of that evidence because it had failed to comply with the court's directions as to exchange of witness statements and had then failed to obtain relief against sanctions.

5

For its part, the defendant denies res judicata on the basis, it contends, that the issues which were adjudicated in the course of the County Court proceedings were not the same as those which are pleaded in the Statement of Case. Although the Claim was disputed on the basis that the claimant had not actually incurred the losses for which she claimed to be compensated, and the authenticity of the documents which are said to be fraudulent was challenged, the defendant did not plead a positive case of fraud. Nor, the defendant contends on the basis of the decision of the Supreme Court in Takhar v Gracefield Developments Limited [2019] UKSC 13; [2019] 2 WLR 984, is the Statement of Case abusive given that the allegation is that an order of the court was obtained by fraud and “fraud unravels all”. Although much of the evidence on which the defendant seeks to rely was in its possession at the time of trial, the defendant argues that that evidence is fresh evidence in the sense that it was not deployed at trial.

THE HEARING BEFORE ME

6

I received helpful skeleton arguments together with electronic bundles of evidence and authorities for which I am grateful. I also heard argument using Skype for Business. The hearing lasted a day. It seemed to me that an important issue in this case is as to what constitutes “fresh” or “new” evidence for present purposes and I gave counsel the opportunity to make written submissions on this issue if they wished, as well as on the effect of the case of the decision of the House of Lords in Phosphate Sewage Co Ltd v Molleson (1879) 4 App Cas 801 to which I refer below. They both took this opportunity and I have read their further written submissions carefully before coming to my decision. I am also grateful for the supplemental electronic bundle of authorities which Mr Jones provided.

THE RESULT

7

For the reasons given below, I allow the Application.

THE PROCEEDINGS IN THE COUNTY COURT

8

In the light of the parties' arguments in the Application it is necessary to summarise the proceedings before the County Court. I will do so with particular reference to the questions whether the issue of fraud was raised by the defendant and/or determined by the Court and whether/when the evidence on which the defendant seeks to rely in relation to the fraud issue was available to it prior to trial.

Outline of the Claim in the County Court and the relevance to that Claim of the oral and documentary evidence which are disputed in the Statement of Case

9

The claimant's case was set out in an Amended Particulars of Claim, dated 7 July 2017, which was drafted by counsel. This dealt with both of her claims as these had, by now, been consolidated. The statement of truth was signed by the claimant.

10

In broad summary the claimant claimed that various items of disrepair of 8 Burch Road, for which the defendant was liable, had led to her flat being very damp. Paragraph 18 of the Amended Particulars of Claim pleaded that:

“damage to the interior of the Claimant's Flat has occurred in the form of water ingress from the exterior, crumbling of sections of the interior wall, mould, condensation and problems with the internal walls, leading to them being constantly damp, damaging the Claimant's fixtures and fittings in the affected areas”.

11

The claimant claimed damages under three heads, which were pleaded at paragraphs 19(a)-(c) of the Amended Particulars of Claim.

Loss of rental income in the sum of £15,306 (paragraph 19(a))

12

This was claimed on the basis that the poor state of the building meant that the claimant's flat could not be rented out between March 2015 and 22 July 2016, when it was sold. At trial, the claimant gave evidence as to the state of the flat. As part of the documentary evidence which, she said, corroborated her evidence she relied on a check-out inventory dated 8 March 2015 (“the check-out inventory”) which was signed by the claimant and outgoing tenants of the flat, and which described the condition of the flat as “poor” and referred to it being in poor decorative order and with significant maintenance and repair issues.

Repair and redecoration costs in the sum of £25,842.73 (paragraph 19(b))

13

This claim was made on the basis that, because of the damage caused to her flat by the damp, the claimant had had to redecorate and repair the interior of the flat. At trial, her evidence was that the works included repairs carried out by a Mr McDonnell on seven occasions between February 2015 and May 2016. The works included re-plastering, decorating, and replacing kitchen base units, carpets and light fittings. She produced seven invoices, each of which also included an acknowledgement of payment (“the McDonnell invoices”), as well as bank statements issued by Santander (“the Santander bank statements”), to support her evidence that the work had been done and that the sums claimed had been paid by her. She also relied on an email from Mr McDonnell, dated 6 October 2015, which referred to some of the works (“the 6 October email”), as further evidence that those works had been carried out.

14

At trial, there was also an open letter from a Mr Babatunde, dated 8 November 2018 (“the Babatunde letter”), which was not in the trial bundle but which HHJ Coltart asked to see when it was mentioned in the course of cross examination. Mr Babatunde was one of the new lessees of the flat and the letter gave evidence in support of the claimant's evidence that the kitchen units had been replaced.

15

The claimant also claimed that she had had to install a new boiler and an extractor fan in late 2014. At trial, she relied on two invoices from Fleetways Plumbing and Engineering Limited, dated 4 and 21 December 2014 (“the Fleetways invoices”), in support of her evidence that this work had been done and that she had paid £1,770 for it.

Loss on resale of leasehold in the sum of £21, 685.52 (paragraph 19(c)).

16

The claimant's case was that she had had to sell the property at auction to mitigate her losses. The sum claimed was said to be the difference between the price which the flat fetched when it was sold at auction on 22 July 2016 and a price which the claimant had previously been offered by a below market value property company.

17

The claimant attached a schedule of loss to the...

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3 cases
  • The Federal Republic of Nigeria v Process & Industrial Developments Ltd
    • United Kingdom
    • Queen's Bench Division (Commercial Court)
    • 4 September 2020
    ...had deliberately decided not to investigate a suspected fraud might be shut out: [63]. 179 In considering Takhar in Elu v Floorweald Ltd [2020] EWHC 1222, Linden J held that it did not apply in situations where a party positively believes that a claim is fraudulent and has evidence to prove......
  • Winston Finzi v Jamaican Redevelopment Foundation Inc. and Others
    • United Kingdom
    • Privy Council
    • 27 July 2023
    ...this question was that the judge failed to follow Takhar and, in so doing, reached the wrong conclusion. 55 In Elu v Floorweald Ltd [2020] EWHC 1222 (QB), [2020] 1 WLR 4369, paras 151–156, Linden J had concluded, based on a careful and thorough analysis of the judgments of Lord Kerr and L......
  • John Andrew Park v CNH Industrial Capital Europe Ltd t/a CNH Capital
    • United Kingdom
    • Court of Appeal (Civil Division)
    • 24 November 2021
    ...reached the wrong conclusion. 54 CNH contended, and the Judge accepted, in reliance on the decision of Linden J in Elu v Floorweald Ltd [2020] EWHC 1222, [2020] 1 WLR 4369, and dicta of Handley JA in Toubia v Schwenke (2002) 54 NSWLR 46, cited by Lord Kerr in Takhar at [49], that the facts......

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