Nageh v David Game College Ltd & Anor [2013] EWCA Civ 1340

Case No A2/2013/0184/QBENF[2013] EWCA Civ 1340
IN THE COURT OF APPEAL (CIVIL DIVISION)
[2012] EWHC 3845 (QB)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN’S BENCH DIVISION
His Honour Judge Shaun Spencer Q.C.
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate Monday 4 th November 2013
Before
LORD JUSTICE MOORE-BICKLORD JUSTICE AIKENSLORD JUSTICE VOS
Between
LAMYA NAGEHClaimant/DAVID GAME COLLEGE LTDDefendants/DAVID GAMERespondents
(Transcript of the Handed Down Judgment ofWordWave International LimitedA Merrill Communications Company165 Fleet Street, London EC4A 2DYTel No: 020 7404 1400, Fax No: 020 7831 8838Official Shorthand Writers to the Court)
Mr. Jason Evans-Tovey (instructed by Cubism Law) for appellantMr. Simon Gorton Q.C.(instructed by Brodie & Co.) for respondents
JudgmentLord Justice Moore-Bick :
[1]This is an appeal against the order of His Honour Judge Shaun Spencer Q.C. sitting as a judge of the High Court by which he dismissed the appellant’s claim against the respondents for damages for failing to pay various sums which she claimed to be due to her under an agreement in writing made in April 2005. There is also before the court a cross-appeal by the respondents against the judge’s refusal to grant them permission to amend their defence, which is contingent on the success of the appeal.[2]The first respondent, David Game College Ltd, is a tutorial college which provides educational courses for young people from this country and abroad. It was founded by the second respondent, David Game, in 1974. Mr. Game is the principal of the college and primarily responsible for its business. The appellant, Lamya Nageh, was herself a student at the college and was subsequently employed by it in various capacities between 1997 and January 2010. By late 2004 her responsibilities included developing contacts with potential students and managing the letting of college rooms to commercial organisations for meetings. She said that she had been promised a bonus for every student she enrolled at the college (other than students from China) and a commission on all lettings of college rooms. The April 2005 document[3]The appeal in this case revolves around the authenticity of a document which has been called for convenience the April 2005 document. In order to understand the issue giving rise to this appeal it is necessary to summarise briefly Ms. Nageh’s account of how that document came into existence. She said that, following discussions between herself and Mr. Game on various occasions in late 2004 and early 2005, in the course of which she raised the question of her remuneration, she told him in the spring of 2005 that she was not prepared to continue developing contacts with students and managing lettings of college rooms unless he was willing to agree terms for bonus and commission and record them in writing. She said that in April 2005 Mr. Game had come to her office and presented her with a document on plain paper containing the terms on which she would receive bonuses and commissions. They both signed it. She then made copies on the photocopier in the reception area using the college’s headed writing paper in order to give it a degree of formality. Her first attempt was not wholly successful, because the headed paper on which the copy was made was poorly aligned, almost causing the text of the document to touch the printed heading. She therefore made a second copy, again on headed paper, allowing more room between the text and the heading. That was successful. She then made another copy of that second, successful, copy, gave the original and one good copy to Mr. Game and kept the other copies for her own use. The course of the proceedings[4]In April 2011 Ms. Nageh began proceedings against the college (to which at an early stage Mr. Game was added as a defendant) claiming damages for its failure to pay her the commissions and bonuses which she alleged had become due to her under the written agreement signed by Mr. Game in April 2005. In her particulars of claim Ms. Nageh described the circumstances leading up to the agreement and specifically alleged that a document had been signed by herself and Mr. Game in April 2005. She then set out its provisions and annexed a copy to the pleading. There followed various allegations about the meaning and effect of the agreement, the steps she had taken pursuant to it and an allegation that various amounts which had become due to her under it had not been paid.[5]In their defence the college and Mr. Game said: “14. The Defendants admit that a document bearing the signatures of the Second Defendant and of the Claimant and dated April 2005 was completed in or about April 2005. The Defendants make no admissions as to the circumstances of the creation and/or execution of the same. . . . 16. In so far as it is, or may be, contended that the said document constitutes or evidences any new agreement, the same is denied. At most the same evidences a previous, or more than one, previous oral agreements between the Claimant and the Second Defendant.” and in paragraph 27 they set out their case in relation to the contractual position between the parties, namely, that any agreements were oral and contained certain terms which were then identified. . . .[6]As can be seen, therefore, the defendants at that stage formally admitted that a document dated April 2005 had been brought into being in April 2005 and that it bore the signatures of Ms. Nageh and Mr. Game, although they denied that it had the effect which she attributed to it. In the absence of a positive averment that Mr. Game had not himself signed it, that can only be understood as an admission that he had indeed done so. The fact that in subsequent paragraphs the defendants made it clear that they denied that it contained any agreement between the parties cannot detract from that.[7]A copy of the April 2005 document was disclosed to the defendants in September 2010. Mr. Game’s position at that time was that he did not remember having signed it, but accepted that his signature might be on it. A few months before the trial was due to start it became apparent that there were two versions of the copy document which differed in the respects I have described. That led the respondents to instruct an expert forensic scientist whose opinion was sought on whether the copies could all be traced back to one and the same original. It also prompted Ms. Nageh to serve a second witness statement explaining how the different copies had been created. The expert concluded that the text and signatures shown in all the copies he examined had been produced from the same original. Finally, only a few days before the trial Mr. Game made a second witness statement, in which he sought to put in issue the authenticity of the document by making a positive assertion that he had not signed it. He did not accuse Ms. Nageh in terms of having forged it, but he suggested a way in which she might have done so and by implication suggested that she had. That was inevitable, because in truth there were only two possibilities: either Mr. Game had signed the document or Ms. Nageh (or someone acting on her behalf) had forged it.[8]Not surprisingly in the light of Mr. Game’s second witness statement, Mr. Evans-Tovey, who was representing Ms. Nageh, was keen to force the defendants to make their position clear. Having attempted to persuade the judge that he could simply put Ms. Nageh to proof that the document had indeed been signed by Mr. Game, Mr. Gorton Q.C. eventually made an application on behalf of both defendants for permission to amend their defence. The proposed amendment was to the effect that:(i) there had never been any written agreement between the parties;(ii) Mr. Game did not sign the document; and (if necessary)(iii) Ms. Nageh or others on her behalf had created the document with a view to gain.[9]The judge refused the defendants permission to amend. He also refused permission to appeal and a separate application for an adjournment. The trial then proceeded.[10]Mr. Evans-Tovey included in his written opening note a section dealing with the authenticity of the April 2005 document. In it he made two important points: that the defendants were not alleging that the document had been forged (because the effect of the judge’s ruling was that they could not advance that case) and that they had admitted in their defence that the document bore Mr. Game’s signature. He also drew the judge’s attention to the fact that no notice had been given by the defendants pursuant to CPR rule 32.19(2) challenging the authenticity of the document.[11]Mr. Gorton appears to have been under the impression that it was open to the defendants to deny the authenticity of the April 2005 document and thus require the claimant to prove that it bore Mr. Game’s signature. At all events, several days were then taken up with hearing evidence about the circumstances in which the document had come into existence and in investigating matters tending to support the rival accounts of Ms. Nageh and Mr. Game. In retrospect it is, perhaps, unfortunate that Mr. Evans-Tovey did not ask the judge for a ruling on whether the defendants were entitled to challenge the authenticity of the document, but he was in a difficult position because, as things then stood, some of the evidence relating to the circumstances in which it had been brought into existence might have been said to be relevant to its meaning and effect.[12]At the forefront of his written closing submissions Mr. Evans-Tovey dealt with the question of authenticity. He submitted that it was established by the (admitted) signature of Mr. Game, by the terms of CPR 32.19 (no notice challenging authenticity having been served) and by the respondents’ failure to plead that it was a forgery. The respondents’ submissions did not deal with any of these points; they submitted that the first issue to be determined was whether Ms. Nageh had proved on the balance of probabilities that the parties had entered into what they described as “the April 2005 Agreement.” No distinction was drawn in either of their skeleton arguments between the authenticity of the document and its effect. The judgment[13]The judge took time to consider his judgment, which he delivered orally on 7th December 2013, almost two months after the conclusion of the trial. Unfortunately, it is not a model of clarity. He began by summarising at some length Ms. Nageh’s case as set out in the particulars of claim before turning to summarise her evidence in chief as contained in her witness statements. Next, he summarised the defence and the evidence in chief of Mr. Game as set out in his witness statements. At that stage there was no reference to what either of them had said in cross-examination.[14]In a passage in paragraph 19 of his second witness statement, to which the judge drew attention, Mr. Game had said that when he travelled abroad it was his practice to sign blank sheets of college writing paper which he left with senior administrators to enable them to write letters on his behalf while he was away. He suggested that Ms. Nageh might have obtained one of those signed sheets of paper, to which she had added the necessary words to produce the April 2005 document. The judge observed that any allegation of forgery would have had to be specifically pleaded and proved and noted that he had refused an application to make just such an amendment at an earlier stage. Nonetheless, he held that the defendants were at liberty to submit that the evidence produced by Ms. Nageh was insufficient to satisfy him on the balance of probabilities that her case was well-founded. He then proceeded to identify the issues in the case, the critical one being whether Ms. Nageh’s account of how the April document had been brought into existence was probably true.[15]The judge then considered the way in which Ms. Nageh and Mr. Game had dealt with that critical issue in evidence. He summarised their accounts and found each of them to be a reliable witness, saying in terms that he did not form the impression that either of them was trying to mislead him in any way. In fact, however, their accounts were completely at odds, which meant that they could not both be telling the truth on a matter of which they had personal knowledge: Ms. Nageh said that Mr. Game had presented her with the document, which she signed and then copied; he said that nothing of the kind had happened. In the end the judge rejected Ms. Nageh’s account on the grounds that Mr. Game would have remembered the events she had described if they had occurred. He thought Mr. Game was telling the truth and so he found that “the documents [sic] are not proved to be his document”, by which I take him to mean that Mr. Game did not sign any piece of paper containing the words on which Ms. Nageh relied. In short, the April 2005 document was not authentic. He did not deal with Mr. Evans-Tovey’s submissions on authenticity, nor did he advert to the implication for Ms. Nageh’s credibility of finding that Mr. Game had not signed the document.[16]Unfortunately, the judge’s handling of the evidence was most unsatisfactory. Although it was obvious that the accounts given by Ms. Nageh and Mr. Game were completely irreconcilable, he failed to face up to that fact and found that they were both honest witnesses. If Mr. Game had maintained the position he had adopted in his first witness statement, in which he said that he could not remember signing the document, it might have been possible for the judge to hold that both witnesses were telling the truth, but once he denied the truth of Ms. Nageh’s account that was no longer possible. Ms. Nageh could not have been mistaken; if Mr. Game did not sign the document it must have been a forgery and she cannot have been telling the truth. However, that case was not open to the defendants. The appeal[17]Mr. Evans-Tovey submitted that, in the light of the admission in paragraph 14 of the defence, the failure of the defendants to challenge the authenticity of the document pursuant to CPR rule 32.19 and the rejection of their application to amend the defence to allege forgery, it was not open to the judge to find that the document was not what it purported to be. He submitted that in those circumstances Mr. Game’s signature on the document was sufficient to authenticate it and bind him to its contents, whatever their meaning and effect might be: see Parker v The South Eastern Railway Company (1877) 2 C.P.D. 416, in which Mellish L.J. said at page 421:
“In an ordinary case, where an action is brought on a written agreement which is signed by the defendant, the agreement is proved by proving his signature, and, in the absence of fraud, it is wholly immaterial that he has not read the agreement and does not know its contents.”
[18]In response Mr. Gorton pointed to paragraph 27 of the defence, in which the existence of an agreement had been put in issue, and submitted that that was sufficient to entitle the defendants to put Ms. Nageh to proof of her case as a whole. He also submitted that, if the defendants could not require Ms. Nageh to prove her case as to the circumstances in which the document had come into existence, they would be prevented from contesting the existence of an agreement altogether.[19]In my view Mr. Evans-Tovey’s submission was clearly correct. The authenticity of the April 2005 document was not in issue. The defendants had admitted in their defence that Mr. Game had signed it and had not attempted to withdraw that admission or challenge the authenticity of the document until they made their application for permission to amend. They were, of course, entitled to dispute its meaning and effect, which they did in paragraph 27 of the defence, but that is as far as it went. To deny that a document contains or evidences a legally binding agreement is quite different from disputing the authenticity of the document itself. Unless and until the defendants withdrew the admission in paragraph 14 of the defence they were not entitled to deny Mr. Game’s signature. Nor were they entitled to say that the document was not his, in the sense that he had not signed it and was not bound by its contents. In the ordinary way a person adopts and is bound by the contents of a document to which he puts his signature. Of course, the defendants would not be bound by the document if the words had been added after Mr. Game had signed it and without his authority, but in that case it would be a forgery and not authentic. That is exactly the case that the judge had refused the defendants permission to make.[20]For reasons which are unclear to me the judge failed to deal in his judgment with Mr. Evans-Tovey’s submissions about the authenticity of the April 2005 document and, moreover, failed to face up to the consequences of finding that Mr. Game had not signed it. If he had done either of those things he would, or at any rate should, have realised that the defendants were not entitled to dispute the authenticity of the document or contend that they were not bound by it. Contrary to Mr. Gorton’s submission, it would still have been open to them to contend that the document was of no contractual effect or did not bear the meaning which Ms. Nageh attributed to it, but that is a different matter.[21]Mr. Gorton drew our attention to the judgment of this court in Eco 3 Capital Ltd v Ludsin Overseas Ltd [2013] EWCA Civ 413 and submitted that by allowing the issues surrounding the creation of the document to be fought out at trial Ms. Nageh had waived any right to rely on rule 32.19. However, I am unable to accept that argument, any more than I could accept any suggestion that Ms. Nageh had acquiesced in the defendants’ challenge to the authenticity of the document. It is clear from the written and oral submissions made at the trial that Mr. Evans-Tovey’s submissions on authenticity were placed squarely before the judge, both in opening and closing, but he could not afford to allow the defendants’ case on the facts to go unchallenged. The circumstances in which the document had come into being had been covered extensively in the witness statements and might conceivably have been relevant to questions concerning its meaning and effect, if not to its authenticity. In any event, however, I do not think that the defendants’ failure to give a notice pursuant to CPR 32.19 adds anything of significance in the light of the admission in the pleading and the judge’s refusal to allow them to pursue a case of forgery.[22]Mr. Evans-Tovey submitted that there was a considerable body of evidence (including expert evidence) tending to support Ms. Nageh’s account which the judge failed to deal with and that his decision could not stand as a result. In my view the judge should have dealt with that evidence given its potential significance, but it is unnecessary to consider whether the omission to do so fatally undermines the judge’s decision. For the reasons I have given I am satisfied that it was not open to the judge on the pleadings to find that the April 2005 document had not been signed by Mr. Game and was therefore not his document. That makes it necessary to consider the cross-appeal against the judge’s refusal of permission to amend the defence. The cross-appeal[23]Although he recognised that the decision involved an exercise of discretion, Mr. Gorton submitted that when refusing his clients permission to amend the judge had acted under a misapprehension as to its effect, since he wrongly assumed that the defendants would still be entitled to put Ms. Nageh to proof that the April 2005 document had been signed by Mr. Game. Accordingly, he submitted, the judge’s exercise of discretion was flawed and could not stand.[24]I am far from persuaded that that was in fact the case. Although Mr. Gorton sought to persuade the judge that the defendants could put Ms. Nageh to proof of the authenticity of the document without pleading forgery, it is clear that the judge was of the view that if the defendants wished to contend that the April 2005 document had been fabricated, that had to be expressly pleaded. In his judgment the judge summarised the pleadings and Ms. Nageh’s witness statements and observed that it was her case that the existence of the document was established by Mr. Game’s signature upon it. He then turned to consider the defence and Mr. Gorton’s submission that in essence it put Ms. Nageh to proof of the existence of the document as constituting a contract between the parties. In other words, he understood, correctly in my view, that the authenticity of the document was admitted, but that its effect was not, and, as he noted, that limited the scope of what could properly be put to Ms. Nageh in cross-examination.[25]The judge then summarised what Mr. Game was saying in his witness statements and pointed out that there were no two ways about it: either the April 2005 document was genuine or it was a forgery. Having made that point, he took the view, again quite correctly, that as the defence stood the defendants would not be entitled to suggest to Ms. Nageh in cross-examination that she had presented false documents in order to make her case. I think it is clear from that passage that the judge was well aware of the limited scope of the defence and took the view that, although the defendants could challenge Ms. Nageh’s case that the document constituted a binding agreement between them and herself, they could not challenge its authenticity, since that would necessarily amount to alleging fraud on her part. He therefore turned to consider whether it would be appropriate to allow the defendants to make the necessary amendment and held that it would not.[26]In those circumstances it remains something of a mystery why when he came to give judgment the judge thought he could find that Mr. Game had not signed the April 2005 document. It may be that returning to the case after an interval of some weeks he lost sight of the fact that the issues surrounding the document were quite limited and was misled by the nature and scope of the evidence he had heard into thinking that Ms. Nageh bore the burden of proving its authenticity. Whatever the reason, however, I am unable to accept that at the time he refused the defendants permission to amend he can have been labouring under any misapprehension about the effect of dismissing their application.[27]Mr. Gorton submitted in the alternative that the judge’s decision was plainly wrong because its effect was to deprive the defendants of any opportunity to contest liability. However, that was clearly not the case. It is true that it prevented them from challenging the authenticity of the document, but it did not prevent them from contesting Ms. Nageh’s case as to its effect. The judge considered a number of the authorities bearing on the late amendment of pleadings and concluded that it would not be right to allow a case of such gravity to be introduced for the first time on the second day of the trial. He took into account the circumstances in which the application came to be made and the consequences for the parties of granting or dismissing it. Other than the suggested misunderstanding of its effect, Mr. Gorton was unable to identify any factor which the judge had overlooked or to which he had given undue weight. The judge was clearly concerned about the enormously disruptive effect an amendment of this kind would have had on the proceedings. Far from being plainly wrong, the judge’s decision was in my view correct and certainly within the ambit of his discretion.[28]The defendants have not sought to appeal against the judge’s refusal to adjourn the trial and it is therefore unnecessary to say any more about that. For the reasons I have given I would allow the appeal and dismiss the cross-appeal. The authenticity of the April 2005 document is not in dispute, but there remain a number of issues between the parties, not least as to its meaning and effect. If my Lords are of the same view, the case will have to be remitted to the High Court for the outstanding matters to be determined, preferably by a High Court Judge. Insofar as the evidence given by the witnesses before Judge Spencer is relevant to any of those matters, transcripts can be obtained. The proceedings will, of course, have to be conducted on the basis that Mr. Game signed the April 2005 document and is bound by its contents, whatever their effect may be. Lord Justice Aikens :[29]I agree with the judgment of Moore-Bick L.J. I agree that the consequence of allowing this appeal and dismissing the cross-appeal must be as set out in paragraph 28 above.

Lord Justice Vos :

[30]I agree.

Cited in 1 later judgment