Seyed Mohammad Ata Shobeiry v Kalpesh Patel
| Jurisdiction | England & Wales |
| Judge | Pearce |
| Judgment Date | 13 October 2023 |
| Neutral Citation | [2023] EWHC 2549 (KB) |
| Court | King's Bench Division |
| Docket Number | CLAIM No. CC-2022-MAN-000048 |
[2023] EWHC 2549 (KB)
His Honour Judge Pearce
CLAIM No. CC-2022-MAN-000048
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS IN MANCHESTER
CIRCUIT COMMERCIAL COURT (KBD)
Manchester Civil Justice Centre
1 Bridge Street West
Manchester
M60 9DJ
Mr Stephen Topping, solicitor advocate (instructed by JMW Solicitors LLP) for the Claimant
Mr Mark Warwick KC (instructed by Judge Sykes Frixou) for the Defendant
Hearing date: 2 October 2023 —-
The application
The Defendant applies to vary the judgment in default of defence entered against him on 23 September 2022. That judgment is in the sum of £1,449,514.34 comprising a principal sum of AED 1 5,000,000, converted to sterling, together with interest and court fees. In short, it is the Defendant's case that:
a. The judgment should have been expressed in AED rather than sterling and/or
b. An error has been made such that the judgment sum contains double interest; and/or
c. The judgment sum applies the wrong exchange rate between sterling and AED.
The underlying claim is a debt claim, arising from two loans from the Claimant to the Defendant: the first of AED 1,800,000 made on 9 March 2014 and repayable on 9 September 2014; and the second of AED 3,200,000 made on 31 March 2014 and repayable on 30 April 2014. It is common ground that no repayment of these loans was made prior to the issue of proceedings. It should be noted that, since the Defendant did not file a Defence in these proceedings, he has not raised the issue that was relied on in the Dubai proceedings referred to below to the effect that the parties agreed that repayment of the loan would take place by the transfer of the Defendant's interest in a property.
The application was listed before me for 2 hours on 2 October 2023. As will be seen, the hearing did not follow the course that either party had anticipated and both advocates had to make submissions beyond that which had been covered in their skeleton arguments. I reserved judgment to enable me to consider more fully the issues that arose.
The Procedural History
I am obliged to Mr Topping for the procedural chronology at paragraph 6 of his skeleton argument. Adopting that with slight changes:
a. On 18 June 2019, the Claimant issued proceedings numbered 983 of 2019 against the Defendant in the Dubai Courts of First Instance.
b. On 30 September 2019, the Dubai Courts of First Instance ordered the Defendant to pay to the Claimant the sum of AED 5,000,000 plus interest at 9% per annum.
c. The Defendant appealed to the Court of Appeal in Dubai, which allowed the appeal to the extent of reducing the interest rate to 5% but upheld the order to pay AED 5,000,000.
d. The Defendant further appealed to Dubai's superior court, the Court of Cassation in Dubai. On 20 May 2020, the Court of Cassation allowed the appeal, revoked the judgment as a nullity, and referred the case back to the Dubai Courts of First Instance.
e. The Claimant issued a second set of proceedings on 9 June 2020 (“the Second Proceedings”).
f. The Defendant defended and counterclaimed in the Second Proceedings, alleging that the Loan Agreements had been repaid, that they were to be set off against the purported transfer of ownership of a property in London and that insofar as the value of the property exceeded the amount due under the Loan Agreements, this surplus is repayable to the Defendant.
g. On 11 April 2021, the Dubai Courts of First Instance gave judgment for the Claimant and dismissed the counterclaim (“the Second Proceedings Judgment”). The Defendant was ordered to pay to the Claimant the sum of AED 5,000,000, interest of 5% per annum from 9 June 2020 until payment, AED 500 as attorney's fees, and the expenses of the Second Proceedings and the counterclaim.
h. The Defendant appealed to the Court of Appeal in Dubai, which dismissed the appeal and ordered the Defendant to pay to the Claimant AED 1,000 by way of attorney's fees and also expenses (“the Second Proceedings Court of Appeal Judgment”).
i. The Defendant further appealed to the Court of Cassation in Dubai. On 12 January 2022, the Court of Cassation dismissed the appeal and ordered the Defendant to pay to the Claimant the sum of AED 2,000 by way of attorney's fees and also the expenses (“the Second Proceedings Court of Cassation Judgment”)
j. The Claimant issued proceedings in England on 13 June 2022, under claim number CC-2022-MAN-000048 in the Business and Property Courts in Manchester (“the CCC proceedings”). The claim sought to enforce the Second Proceedings Judgment, the Second Proceedings Court of Appeal Judgment and the Second Proceedings Court of Cassation Judgment at common law and/or as a debt, in the sum of AED 5,506,239.73 and/or damages in the same sum. The Claimant specifically pleaded his claim in the alternative to recover the sterling equivalent of the AED sum, providing a currency exchange ‘spot rate’ from Barclays Bank Plc as of 10 June 2022. The overall sum claimed was calculated as the judgment sum of AED 5,000,000, interest of AED 502,739.73 and attorney's fees of AED 3,500. The Claimant claimed in the alternative the sterling equivalent, being £1,278,024.26 (inclusive of interest) at the date of the pleading.
k. On 23 September 2022, the Claimant filed a request for judgment in default of defence in the CCC proceedings for a specified amount pursuant to CPR12.4(1)(a), using form N225. The sum claimed was expressed in sterling as follows:
Amount of claim admitted
£1,291,692.48
(including interest at date of issue))
£129,786.18
Interest since date of claim (if any)
£18,035.68
Court fees shown on claim
£10,000
Amount payable by Defendant
£1,449,514.34
l. On 23 September 2022, judgment in default was entered in the CCC proceedings for this sum.
m. The Claimant then made an application for a Charging Order over the Defendant's solely owned and unencumbered property at 4 Wavel Mews, London. An Interim Charging Order was made on 10 November 2022.
n. The Final Charging Order hearing was listed to take place on 17 January 2023. The Claimant's application and the Interim Order were served on the Defendant on 19 December 2022. The Defendant sent correspondence to the Court opposing the making of a Final Charging Order.
o. The Final Charging Order hearing took place on 17 January 2023. The Defendant did not attend. Following representations made on behalf of the Claimant at the hearing, a Final Charging Order was made in respect of 4 Wavel Mews, based on the judgment that the Claimant had obtained herein together with further interest, the total secured sum being £1,482,414.15.
p. On 28 February 2023, the Claimant issued Part 8 proceedings under Claim No PT-2023-MAN-000020 seeking an order for sale of 4 Wavel Mews pursuant to the Trusts of Land and Appointment of Trustees Act 1996 (“the TOLATA claim”).
q. In May 2023, the Dubai Court made an order for repayment of the judgment sum by five equal instalments to be paid on the first every month from June 2023 until October 2023. The Defendant paid AED 500,000 into the Dubai Court on 2 May 2023, which sum has defrayed certain costs, leaving a sterling sum of £86,398.24 to be credited against the judgment sum herein. However, the instalments order was not otherwise complied with and has been discharged by the Dubai Court 2. The Defendant has not otherwise sought to repay the monies due either pursuant to the Dubai judgments or the judgment herein.
r. On 28 July 2023, the Defendant, (who until this point had been a litigant in person but now instructed Judges Sykes Frixou Limited to act on his behalf 3), issued an application stated to be in cases PT-2023-MAN-000020 and CC-2022-MAN-000048, seeking:
“ An Order under CPR40.2.18 to vary the default judgment obtained by the Claimant dated 22 September 2022 in proceedings number CC-2022-MAN-000048 which is expressed in the sum of sterling £1,449,514.34 to AED the sum of AED5,506,239.73 which is the sum claimed in the Claimant's Particulars of Claim in the Action CC-2022-MAN-000048 interest at 5% pa until payment and fixed costs and/or a stay of execution of the said Judgment including on the application to enforce the charging order obtained or other relief under CPR40.8A.”
Though the Circuit Commercial Court case number was included in the heading, the claim was in fact only issued in the TOLATA claim.
s. On 7 August 2023, District Judge Banks considered this application together with the order sought by the Claimant in the TOLATA claim and vacated a hearing that had been listed in the TOLATA claim on 22 August 2023, listing both applications for hearing on 12 October 2023.
t. The Claimant's solicitors wrote to the court on 11 August 2023 pointing out that the application to vary related not to an order in the TOLATA claim but an order in the Circuit Commercial Court claim. Unless and until the Circuit Commercial Court judgment was varied or set aside, the Claimant was entitled to proceed to enforcement under the 1996 Act.
u. By order dated 14 August 2023, Judge Banks recorded the contents of the Claimant's letter and a finding that the court did not have jurisdiction to vary the order in the Circuit Commercial Court proceedings. He therefore vacated the hearing on 12 October 2023 and relisted the TOLATA claim on 4 September 2023.
v. By application notice dated 23 August 2023, the Defendant applied to set aside that order.
w. On 4 September 2023, Judge Banks dismissed the application to set aside his order of 14 August 2023 and made an Order for Sale of the property at a sum of not less than £950,000.
x. On 7 September 2023, the Defendant issued an application in the Circuit Commercial Court claim, seeking:
“(1) An Order under CPR 13.3(1) to vary the default judgment obtained by the Claimant dated 23 September 2022 in...
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