Sheida Oraki and Another v Dean & Dean (A Firm)and Another
| Jurisdiction | England & Wales |
| Judge | Robert Ham, QC,Mr Robert Ham, Qc |
| Judgment Date | 23 October 2012 |
| Neutral Citation | [2012] EWHC 2885 (Ch) |
| Court | Chancery Division |
| Date | 23 October 2012 |
| Docket Number | App. Nos. CC/2010/PTA/0164 & CH/2010/0219 |
[2012] EWHC 2885 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
IN BANKRUPTCY
Royal Courts of Justice,
7 Rolls Building,
Fetter Lane,
London EC4A 1NL
Mr Robert Ham, Qc (sitting As A Deputy Judge)
App. Nos. CC/2010/PTA/0164 & CH/2010/0219
In The Matter of Sheida Oraki
And In The Matter of Ardeshir Oraki
And In The Matter of The Insolvency Act 1986
Mr Leon Hines (Hines & Co) solicitor advocate for the appellants
Mr David Nicholls (instructed by Locke Lord (UK) LLP) for the respondent trustee in bankruptcy
The first respondent did not appear
Hearing date: 11 July 2012
APPROVED JUDGMENT
I direct pursuant to CPR PD 39A para 6.1 that 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
1. This is the latest stage in protracted litigation, with a complex procedural history. It is unnecessary to set out the history in full, but counsel for the trustee in bankruptcy – who has very properly adopted a position of helpful neutrality – usefully summarised it in a chronology, which is appended to this judgment.
2. There were three matters before me:–
(1) the Appellants' application to rely on fresh evidence;
(2) their application for permission to appeal out of time the order of His Honour Judge Oppenheimer dated 11 January 2010; and
(3) their appeal from the order dated 9 April 2010 of Deputy Registrar Cheryl Jones refusing to annul the bankruptcies of the Appellants on ground (a) of section 282(1) of the Insolvency Act 1986.
3. Before dealing with the substance of the matter, I should say that it is quite clear that the assets of the bankrupt estates are more than sufficient to discharge all possible claims and all costs that may fall on them. Other things being equal, the sooner the bankruptcies are brought to an end the better. Too much judicial time has already been devoted to this matter.
Background
4. The history can be summarised as follows:–
(1) In 2002, the Appellants instructed Dean & Dean, a firm of solicitors. Dr Sharokh Mireskandari, who was at the time on the roll of solicitors, dealt with their matter. There was a dispute about fees. Dean & Dean issued proceedings, followed by an application for summary judgment.
(2) Deputy District Judge Shelton heard the summary judgment application on 16 February 2004. He gave judgment for Dean & Dean for damages to be assessed and directed an interim payment of £5,000. The Deputy District Judge ordered Dean & Dean to file and serve a fully itemised bill of costs in a form suitable for a solicitor and own client detailed assessment, and also ordered the Appellants to pay Dean & Dean's costs of £3,858.75.
(3) The Appellants have exhausted every avenue for appealing the order of the Deputy District Judge. Her Honour Judge Wakefield dismissed their application for permission to appeal, and so did Bean J (on paper) and Bell J (after an oral hearing) when they sought permission to appeal to the Queen's Bench Division. Their latest attempt to appeal the Deputy District Judge's order failed when Peter Smith J rejected their application.
(4) Dean & Dean have never complied with the direction to file and serve a fully itemised bill of costs. Furthermore they refused to accept payment of the full amount of the judgment debt unless the Appellants withdrew a complaint to the Law Society. Instead, they petitioned to make the Appellants bankrupt on the basis of their failure to comply with the order for an interim payment and the cost orders made against them. The 2nd Appellant was adjudicated bankrupt on 1 September 2005 and the 1st Appellant on 10 January 2006.
(5) In March 2009, the trustee in bankruptcy assigned to the Appellants the right to apply to have the order of the Deputy District Judge set aside, and they then made that application. Judge Oppenheimer eventually heard it on 9 November 2009 and made an order setting aside the order of the Deputy District Judge unless any person with standing to represent Dean & Dean applied for relief from sanctions by 23 November 2009.
(6) Jami Tehrani, the former principal of Dean & Dean, applied to set aside that order or for relief from sanctions. The judge recognised that Mr Tehrani might not have standing to do so (because he had been adjudicated bankrupt on 5 November 2009) but considered that his evidence was material because it set out fully the convoluted procedural history in these proceedings, which had not been done by the Appellants on 9 November 2009. Judge Oppenheimer therefore set aside his order of 9 November 2009 and dismissed the Appellants' application to set aside the order of the District Judge.
(7) The Appellants have made several annulment applications, none of which has succeeded. Most recently, on 9 April 2010, Deputy Registrar Cheryl Jones dismissed an annulment application founded on the allegation made in pending proceedings for professional conduct against Dr Mireskandari. She dismissed the application, essentially on the ground that it was premature until those proceedings had been determined.
(8) On 21 June 2012 the Solicitors Disciplinary Tribunal ordered that Dr Mireskandari be struck off the roll of solicitors and ordered him to pay costs in the sum of £1.4 million. Many findings of serious misconduct were made against him, including findings of dishonest misrepresentations as to his professional status, academic qualifications and experience whereby he gained admission to the roll. Moreover, it appears that Dr Mireskandari had not disclosed that he had been convicted of fraud in California in 1993, before he applied to the Law Society.
The fresh evidence
5. The fresh evidence relates to the professional misconduct proceedings. I decided to admit it. My reasons were as follows.
6. Although the rules laid down in Ladd v Marshall [1954] 1 WLR 1489 point to relevant criteria in deciding whether or not to admit fresh evidence, they are no longer legal requirements. The power to admit fresh evidence is given by CPR 52.11(2)(b) and is not fettered by the Ladd v Marshall rules, but must be exercised in accordance with the overriding objective. In a case such as the present where the Appellants could make a renewed annulment application it seemed to me that the overriding objective required the admission of the fresh evidence which was clearly relevant. It would not be in accordance with that objective to demand such an application: it would cause delay and additional expense and add to the demands on court time while serving no useful purpose.
7. Once the evidence was admitted, it seemed to me that it should be considered in relation to both aspects of the matter.
Permission to appeal (and permission to appeal out of time) against Judge Oppenheimer's order
8. On behalf of the trustee in bankruptcy Mr Nicholls has – without departing from the position of neutrality to which I have referred – made a number of points:–
(1) The Appellant's Notice was not filed until 1 April 2010 so it is some two months late. This is ostensibly explained by the fact that the Appellants wrote to the court on 1 February 2010 seeking permission to appeal but the outcome of that letter was not clarified until 6 March 2010. Although they were at that stage litigants in person, given that the Appellants have appealed other orders in these proceedings on at least 3 occasions and each has been on time, this is (it is said) surprising.
(2) It is not clear what power Judge Oppenheimer was exercising when he made the order of 11 November 2009. Power to set aside an order is limited: it may arise following a strike out order ( CPR 3.6), following judgment in default ( CPR Part 13), where a party does not attend trial ( CPR 39.3(3)), and where a third party is affected by an order ( CPR 40.9). Potentially, Mr Nicholls said it might also arise under the court's general case management powers in CPR Part 3. But he suggested that must be doubtful that there is any proper basis to set aside a judgment once all avenues appealing that judgment have been exhausted, as was the position in this case in November 2009, even on an unless order basis.
(3) According to Mr Nicholls the transcript of the hearing on 9 November 2009, the evidence of Jami Tehrani filed following that hearing and the transcript of the hearing on 11 November 2010 show that the order of Judge Oppenheimer setting aside his earlier order was made because he had not been fully appraised of the relevant background on the earlier occasion. In particular, he was not aware of the order of His Honour Judge Marcus Edwards of 17 June 2005 declaring the proceedings to be an end or the fact that the trustee in bankruptcy had accepted the debt claimed by Dean & Dean.
(4) On 9 November 2009, Judge Oppenheimer had been made fully aware of the fact that the Solicitors Regulation Authority had intervened in the practice of Dean & Dean and that Mr Tehrani had been made bankrupt. He was also told that Dr Mireskandari was not a solicitor but a convicted criminal. Thus, the judge was (said Mr Nicholls) aware of the main assertion now advanced by the Appellants.
9. While recognising the considerable force in those points, I have concluded that I should give permission to appeal out of time. As Peter Smith J has pointed out there were serious procedural irregularities in relation to the order of the District Judge. In particular, an order for damages to be assessed was simply not an appropriate order on a claim by solicitors for unpaid fees: it was a claim in debt not damages. Furthermore, Dean & Dean had not delivered a properly...
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