Wards Solicitors v Sharif Adel Taha Hendawi

JurisdictionEngland & Wales
JudgePaul Matthews,HHJ
Judgment Date26 July 2018
Neutral Citation[2018] EWHC 1907 (Ch)
CourtChancery Division
Docket NumberCase No: 6BS13526
Date26 July 2018
Between:
Wards Solicitors
Claimant
and
Sharif Adel Taha Hendawi
Defendant

[2018] EWHC 1907 (Ch)

Before:

HHJ Paul Matthews

(sitting as a Judge of the High Court)

Case No: 6BS13526

IN THE HIGH COURT OF JUSTICE

CHANCERY DIVISION

BRISTOL DISTRICT REGISTRY

Bristol Civil Justice Centre

2 Redcliff Street, Bristol, BS1 6GR

Samuel Parsons (instructed by Wards Solicitors) for the Claimant

Thomas Steward (instructed by Temple Bright LLP) for the Defendant

Hearing dates: 3 July 2018

Judgment Approved

Paul Matthews HHJ

Introduction

1

This is my judgment on an application by the defendant by notice dated 27 March 2018 to set aside a judgment in default dated 8 January 2007, in the sum of £35,884.75 together with £530 costs, totalling £36,414.75. The judgment was given in relation to a claim, in respect of which the claim form had been issued on 5 December 2006, for the repayment of monies paid by mistake by the claimant to the defendant. The particulars of claim made a claim in the sum of £33,050, together with interest of £2581. On 3 April 2018 District Judge Rowe ordered that the application be listed before me.

2

The application notice is supported by a witness statement made by the defendant dated 28 March 2018. I interpolate that the defendant had also made an earlier witness statement in related bankruptcy proceedings, to which I will also refer in due course. The application to set aside was opposed by the witness statement dated 25 June 2018 of Charlotte Anne Gage, but further supported by the witness statements of the defendant dated 29 June 2018 and of Herold Buddington dated 29 June 2018.

3

This latter evidence was served very much at the last minute. But the claimant did not seek an adjournment in order to respond to it. I also record here that I was not asked to order cross-examination of any witness, and none was tendered for cross-examination. In the absence of cross-examination, the court is not entitled to reject any written evidence as being untrue, unless on the basis of all the evidence before the court it considers that that written evidence is simply incredible: see egLong v Farrer & Co [2004] BPIR 1218, [57]–[61], applied in Shierson v Vlieland-Boddy [2005] 1 WLR 3966, CA, [56], Coyne v DRC Distribution Ltd [2008] EWCA Civ 488, [58]. I was not invited to disregard any of the written evidence on that basis, and do not do so.

4

The application was heard by me on 3 July 2018. The defendant/applicant was represented by Thomas Steward of counsel, and the claimant/respondent by Samuel Parsons of counsel. I am grateful to them both for their cogent and interesting arguments. One point which arose during the hearing, concerning the phrase “other good reason” in CPR 13.3 (1) (b) was left over for short written submissions. I received these from both sides on 4 July 2018, and I have taken them into account in preparing this judgment. Finally, I record that, although this claim was originally brought in the County Court, because of the legal issues raised for decision, I decided, without objection from the parties, to transfer it to the High Court.

Background

5

This claim arises from a payment made by the claimant to the defendant on 8 December 2005 in the sum of £177,000. It is common ground that the payment was made to the defendant by mistake. Exactly how the mistake occurred has not been explained, but it is also common ground that the claimant was at the time acting as solicitor for the defendant's company. On 12 December 2005 the claimant notified the defendant that the payment had been made by mistake. On 14 December 2005 the defendant repaid to the claimant the sum of £143,975. That therefore left a shortfall of £33,025. The defendant's case is that this sum is accounted for by a payment on a cheque in the sum of £25,000 to Herold Buddington, which was cleared on 13 December 2005, the repayment (by way of automatic set-off) of an overdraft to the defendant's bank of £8000 and the sum of £25 as a transaction fee required by the defendant's bank to send the sum of £143,975 back to the claimant.

6

The defendant's evidence is that at the time of the mistaken payment he had a temporary overdraft facility from his bank with a limit of £8000. This facility was temporary because the defendant was expecting to receive £120,000 from a transaction involving the sale of land. (This is not in fact supported by any contractual or other documents to show that that sum was due to the defendant at about that time, or indeed that that sum ever arrived in his bank account). The bank allowed the facility on condition that when the funds arrived they would first be used to clear the overdraft in full, and the facility would then be withdrawn.

7

This evidence is in contrast to what is stated on the defendant's bank statement for the period up to 14 December 2005 (at least), which shows an overdraft limit of “nil”. Nevertheless, it is possible that a temporary facility may have been put in place and terminated before the date of this statement. As I have said, it is not possible for me to reject the defendant's evidence on this point unless I consider it ‘incredible’ (which I do not). But the statement also shows that at the date of the mistaken payment on 8 December 2005 the account was overdrawn in the sum of £6998.72. Between that date and the date on which the balance of funds was returned to the claimant on 14 December 2005, further debits to the account were made in the sums of £57.75 (cheque), £53.90 (cheque), £10.21 (direct debit), £500 (cash withdrawal at ATM), £35 (cheque), and £55 (cheque). A further £300 cash withdrawal was debited immediately afterwards, together with a fee for the use of an ATM. These amounted in total to a further £1011.86, which, added to the existing overdraft would have pushed it just over the £8000 limit to £8010.58. (There was an additional debit of £250 for a returned cheque, but this appears to be the counterpart to a cheque paid in for the same amount on 8 December 2005.)

8

On 16 January 2006 the claimant wrote a letter to the defendant by post addressed to him at 46, The Deans, seeking repayment of the outstanding sum. The claimant received no reply to this letter, and sent a further letter as a “chaser” on 30 January 2006. The defendant responded to this letter by email on 6 February 2006, in which he told the claimant that he had not received the letter of 16 January 2006. During the hearing, I was told by the defendant's counsel, on instructions, that the letter of 30 January 2006 was sent to the defendant also by email, and the claimant's counsel did not demur. Although there is no formal evidence to that effect, I see no reason not to accept that statement. On that basis, the claimant would have known that the defendant claimed not to have received the first letter and was responding to the second letter by email, that second letter having been sent to the defendant by email. The claimant responded to the defendant's email later the same morning, attaching a copy of the letter of 16 January 2006, and stating that this was sent to the same address as the letter of the 30 January 2016, and it had not been returned through the post undelivered. The defendant responded with a further email to the claimant, saying that he would contact his solicitor about the matter.

9

In his witness statement of 28 March 2018, the defendant says at paragraph 1.4 that he moved from 46 The Deans in late January 2006, when the property he was renting was repossessed from his landlord, who had not kept up his mortgage payments. A similar statement (though more compressed) appears at paragraph 3 of the witness statement made by the defendant in the bankruptcy proceedings on 26 February 2018. However, despite sending two emails to the claimant on 6 February 2006, and despite stating that he did not receive the first of the two letters sent to him by the claimant, the defendant nowhere mentions in those emails to the claimant that he has moved from the address to which the letters were sent, whether by way of explanation of the failure to receive the letter of 16 January 2007 or otherwise.

Procedure

10

According to the Notice of Issue (N205A), sent to the claimant, and received by it on 13 December 2006, the claim form in this matter was served by the court by first class post on the defendant at the address considered by the claimant to be the last known residence of the defendant, namely 46 The Deans, Portishead, North Somerset. It was sent out on 12 December 2006, so if it was properly served it was deemed to be served on 14 December 2006 (in accordance with the then CPR r 6.7 (1)). However, the defendant was at that date no longer resident at that address, and so the claim form was returned in its envelope undelivered to the court. The notice issued by the court of the return of that document to it is dated 2 January 2007. It too was sent to the claimant.

11

But on the same day, 2 January 2007, the claimant made its request for judgment in default of acknowledgement of service. This request was made in the space provided in the bottom half of the notice of issue of the claim. In response to that request, a default judgment was issued by the court on 8 January 2007, and a copy was sent to the defendant himself at the same address as the claim form. On 16 January 2007, however, the court sent to the claimant a further notice of returned documents saying that the judgment envelope had been returned marked “gone away”. It appears that, thereafter, some enquiries were made by the claimant in relation to tracing the whereabouts of the defendant and enforcing the judgment which had been obtained, but it is a curious feature of this case that nothing further substantive in the matter occurred until 2017, some ten years later.

12

On 4 August 2017 the claimant issued a statutory demand under the Insolvency Act...

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