Sharaz Ahmed v Shamran Rehman
| Jurisdiction | England & Wales |
| Judge | Lord Justice Baker,Lord Justice Warby |
| Judgment Date | 21 December 2023 |
| Neutral Citation | [2023] EWCA Civ 1504 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: CA-2023-002368 |
[2023] EWCA Civ 1504
Lord Justice Baker
and
Lord Justice Warby
Case No: CA-2023-002368
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE GUILDFORD COUNTY COURT
HH Judge George
E00GU138; E00GU191
Royal Courts of Justice
Strand, London, WC2A 2LL
Fiona Horlick KC (instructed by AHZ Solicitors) for the Appellant
Nicholas Isaac KC and Matthew Winn-Smith (instructed by Fulchers) for the Respondent
Hearing date: 12 December 2023
Approved Judgment
This judgment was handed down by the judges remotely by circulation to the parties' representatives by email and release to The National Archives. The date and time for hand-down is deemed to be 10:30am on 21 December 2023.
Sharaz Ahmed, a barrister called to the Bar in 2000, appeals against an order made on 24 November 2023 committing him to prison for six weeks (of which three were to take effect immediately) and fining him £9,000 for breach of an undertaking to the court. His appeal was listed before us on 12 December 2023. At the end of the hearing, we allowed the appeal and directed his release from prison, for reasons to be given at a later date. This judgment sets out my reasons for agreeing with that decision.
Background
In 2012, the appellant was appointed as a designated member of Landmark Legal LLP (“Landmark”). He worked in a branch office of the partnership where it traded as 12 Bridge Solicitors. It is his case that his role was to conduct advocacy only and that he had no administrative responsibilities and was not a signatory to the banking facilities.
In 2019, Landmark were engaged to represent Mr Zahir Ahmed (who is no relation of the appellant and is hereafter referred to as “the defendant”) in defending a claim for possession in proceedings in the Guildford County Court brought by Mr Shamran Rehman. The claim was listed for five days before HH Judge Evans-Gordon in November 2019 at a hearing at which the appellant appeared on behalf of the defendant. In the event, for reasons which are not relevant to this appeal, the hearing was adjourned on the defendant's application to a later date. Under the terms of the adjournment, the defendant was ordered to pay the costs thrown away by reason of the application and further ordered to pay to his solicitor the sum of £1,600 every month, representing the sum which the claimant contended was rent due to him. The order made at the conclusion of the hearing contained the following undertaking:
“UPON the Defendant's solicitors providing their undertaking that they will hold any payments made by the Defendant pursuant to paragraph 5 below in their client account pending order of the court.”
The order further provided that, unless the defendant paid the costs and the monthly sums as ordered, he would be debarred from defending the claim.
At the hearing, the appellant had confirmed to the court that he had authority to give the undertaking. He did not, however, tell the judge that he was a designated member of Landmark.
After a number of further hearings, concerning issues which are not relevant to this appeal, the defendant's defence was struck out. On 7 December 2022, the matter finally came before HHJ George as an undefended possession action. By this time, Landmark was no longer on the court record, having been replaced as the defendant's legal representative by an entity called No 12 Chambers Ltd of which the appellant is the sole director and majority shareholder. At the hearing on 7 December 2022, he again appeared on behalf of the defendant. At the conclusion of that hearing, the judge granted possession of the property to the claimant together with rent arrears plus interest in the sum of £111,342 and ordered the defendant to authorise Landmark to release the sum of £57,600 held by them to the claimant's solicitors by 4pm on 12 December 2022, such payment to be applied to the rent arrears.
On 12 December 2022, the claimant's solicitors wrote to 12 Bridge Solicitors enclosing a copy of the order of 7 December and giving details of the account into which the expected payment of £57,600 should be paid. The next day, the claimant's solicitors wrote by email to Landmark (copied to No 12 Chambers Ltd and to the appellant) seeking release of the funds. Twenty minutes later, they received the following reply from Landmark:
“We thank you for your email, we are not party to the proceedings and have given no undertakings to anyone in respect of the monies we currently hold.”
It transpired that this email, which was unsigned, had been sent by or on behalf of a Ms Naseem Kadri, who described herself as a partner of Landmark. Inquiries later revealed that Ms Kadri had become a designated member of the LLP in May 2022.
After a further exchange of emails with Landmark, the claimant issued an application for a statement of account of the monies held pursuant to the undertaking. The application was listed but adjourned on two occasions. On 9 June 2023, three days before the adjourned hearing date, the claimant's solicitors received an email from Ms Kadri informing them that Landmark had transferred £57,600 to the defendant on 14 December 2022.
At the hearing before HH Judge George on 12 June 2023, the appellant again appeared on behalf of the defendant. He told the judge that No 12 Chambers was able to conduct litigation “under the Bar Standards conditions of trade” and that it was “a branch office” of Landmark. Landmark was separately represented at the hearing by counsel who in the course of submissions (which have been transcribed but are difficult to follow) appeared to deny that Landmark had given the undertaking and argued in the alternative that, if Landmark had given the undertaking, the release of the monies to their former client at the end of proceedings was not in breach of the same. In her judgment delivered at the end of the hearing, which additionally dealt with unrelated matters, the judge noted there was a dispute about whether the undertaking had been given and, if so, whether it was still in force in December 2022, adding that she was unable to resolve that dispute at that hearing.
Following that hearing, the claimant applied for a freezing injunction against the defendant which was granted on a without notice basis on 23 June 2023 and extended at a hearing on notice on 12 July 2023 at which the defendant was ordered to file an affidavit setting out inter alia details of how he had used the £57,600 transferred by Landmark. In his affidavit sworn in compliance with that direction, the defendant said that he had retained some of the money in cash, used part of it to repay creditors, and paid £9,000 to his current legal representatives, No 12 Chambers.
The committal proceedings
On 11 July 2023, the claimant's solicitors issued proceedings for contempt of court. The notice of application was in Form N600. The defendant to the application was named as Landmark. The application gave notice to Landmark of its rights and other matters relating to the application in accordance with CPR rule 81.4(2)(i) to (s). The nature of the contempt was described as breach of the undertaking provided by Landmark to HH Judge Evans-Gordon on 25 November 2019 “that they will hold any payments made by the defendant pursuant to paragraph 5 below in their client account pending order of the court.” The summary of facts alleged to constitute the contempt was set out in the following terms:
“1. Following the provision of the undertaking on 25 November 2019 referred to above (“the Undertaking”) the Defendant paid £1,600 per month to Landmark Legal LLP (“Landmark”).
2. On 5 January 2022 the Defendant's Defence was struck out as disclosing no reasonable grounds for defending the claim, pursuant to the order of HHJ George.
3. On 7 December 2022 the matter came before the Court as an undefended possession action. The Defendant confirmed that at this date he had paid £57,600 to Landmark.
4. By order of HHJ George on 7 December 2022 the Defendant was required to give possession of 141 Maybury Road, judgment was given for £111,342.14 rent arrears (plus £52.60 per day until possession) and costs. Further, the Defendant was ordered to “forthwith authorise Landmark Legal LLP to release the £57,600 currently held by them to the Claimant's solicitors by 4pm on 12 December 2022 which sum shall be applied to the above mentioned rent arrears.”
5. The Claimant's solicitors wrote to 12 Bridge Solicitors (the Defendant's new solicitors) on 12 December 2022 attaching a copy of HHJ George's 7 December 2022 order and providing account details for receipt of the expected payment of the £57,600.
6. On 13 December 2022 the Claimant's solicitors sent an email timed at 15.42 to Landmark, 12 Bridge Solicitors and to Sharaz Ahmed. It was noted that the £57,600 had still not been received.
7. Landmark responded by email at 16.01 on the same day. They wrote: “We thank you for your email, we are not party to the proceedings and have given no undertakings to anyone in respect of the monies we currently hold.”
8. On 14 December 2022 Landmark transferred the £57,600 to the Defendant. It did so without notifying the Court, the Claimant or his solicitors.
9. At no time did Landmark seek an order from the Court discharging or varying the terms of the Undertaking.
10. On Friday 9 June 2023 the Claimant's solicitors received an email timed at 14:04 from Naseem Kadri, a partner of Landmark enclosing a letter which informed the Claimant's solicitors, for the first time, that Landmark had transferred £57,600 to the Defendant on 14 December 2022.
11. On 12 June 2023 in open court the fact of the transfer of the £57,600 previously held in Landmark's client account to the Defendant was confirmed by Sharaz Ahmed (and Ms Robina Omar, counsel for Landmark).”
In a skeleton...
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