Razzaq v Ageas Insurance Ltd [2015] EWCA Civ 752

Case No B2/2014/0648[2015] EWCA Civ 752
IN THE COURT OF APPEAL (CIVIL DIVISION)
Venue ON APPEAL FROM BIRMINGHAM
(HHJ MITHANI QC)
Venue Royal Courts of JusticeDate Wednesday, 10 June 2015
Strand
London, WC2A 2LL
B E F O R E:
MRS JUSTICE GLOSTER
Between
RAZZAQAppellant-v-
Between
AGEAS INSURANCE LIMITEDRespondent
(Computer-Aided Transcript of the Stenograph Notes 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 S Flynn (instructed by Direct Access) appeared for Applicant for The Respondent did not attend and was not represented
J U D G M E N T

LADY JUSTICE GLOSTER:

[1]By two separate appellant notices sealed on 26 February 2014, the applicant, Mr Abdul Razzaq, seeks permission to appeal against the orders of HHJ Mithani QC dated 10 October 2013 and 6 February 2014.[2]On 10 October 2013, in Mr Razzaq's absence, the judge dismissed the applicant's claim against Ageas Insurance Limited, the defendants, whom I will refer to as "the insurers". In that claim Mr Razzaq sought to set aside a settlement agreement which he had entered into with the insurers following a flood at the business premises.[3]Mr Razzaq did not attend court on 10 October 2013 for the trial of his claim. He had made an application for an adjournment of the trial on medical grounds on 1 October 2013, and that application was listed for Day 1 of the trial. The applicant did not attend to make the application and the judge refused it and, as I said, determined the claim in his absence.[4]The applicant then sought to set aside the judge's order dated 10 October 2013, pursuant to CPR 39(3). On 6 February 2014, the same judge dismissed Mr Razzaq's application to set aside the judgment.[5]The factual background is that Mr Razzaq took out an insurance policy with the insurers in respect of his business premises. On 5 January 2009, the premises were damaged by a flood. He made a claim on the insurance in the sum of £37,216, together with a claim for loss of business of £15,000.[6]He states that he informed the insurers and loss adjustor, that he had suffered mental shock and mental lapse upon discovering the damage. The loss assessors from the insurers offered to pay £12,800 net,(£100 excess). Critically, Mr Razzaq accepted that offer.[7]Subsequently, however, in the proceedings which he issued in the Birmingham County Court in December 2011, he sought to set aside the settlement on various grounds set out in his particulars of claim which had been drafted by him, or by a member of his family on his behalf.[8]He sought to argue that he had suffered from a mental condition at the time the settlement was completed and that he had entered into the settlement agreement under economic duress from the insurers. He then went on to claim a far greater sum than the sum in respect of which he had settled the claim.[9]The particulars of claim set out the damages that he had originally claimed and then asserted that:
"The defendant's loss assessor placed claimant under pressure to accept offer of £12,800 net, of £100 excess, so-called 'offer on the table.' It was indicated to the claimant if a settlement offer is rejected, the claim will linger on for months. 21. Defendant's loss assessor was not fair or independent, he placed offer to claimant in such a mode claimant was stunned and had found himself under further stress and anxiety. 22. Under no circumstances claimant could have accepted 25 per cent of the claim of damages, if claimant had not been pressed to accept 'on the table' by the loss assessor."
[10]A single joint expert consultant psychiatrist was instructed to report on Mr Razzaq's capacity at the time at which the settlement was reached. The psychiatrist, Dr Brownwell, concluded that Mr Razzaq did have capacity at the time the settlement was reached; and, furthermore, even if he had not had capacity, it was unlikely that this would have been obvious to a loss adjustor (see paragraph 6 of the judge's judgment).[11]Dr Brownwell, in giving her opinion in her written report, said:
"It is impossible to state with certainty what his mental capacity was between the period 5 January 2009 and the end of February 2009, particularly as he did not consult his general practitioner. So there is no objective record, and I therefore have to rely on Mr Razzaq's personal account which may be subject to recall bias after 4 years. "
From his account, and from my experience and working with individuals with adjustment order on the balance of probabilities, Mr Razzaq would have had sufficient mental capacity and understanding of the fact that he was making an insurance claim and would have had sufficient mental capacity and understanding of the fact and of the implications of agreeing a settlement of the insurance claim. 5.14 It is probable, however, that the subjective distress experienced by Mr Razzaq, including his reported poor sleep, anxiety and worry for his financial future would have affected his judgment and decision to reach a settlement. 5.15 It is unlikely that the level of Mr Razzaq's distress at that time would have been obvious to a loss adjustor."[12]On 1 October 2013, Mr Razzaq submitted an application to court to adjourn the trial listed for 10 October 2013, and also sought the other side's consent to adjourning the trial. Their consent was not forthcoming.[13]The medical evidence in support of that application confirmed that Mr Razzaq suffered from anxiety and depression and that he has frequent epileptic fits. His doctor recommended that he had needed a period of 3 months:
"To stabilise his health difficulties before he can function properly to deal with the stress a of court appearance."
[14]It also confirmed that he had suffered 3 epileptic fits:
"In the last weeks."
[15]Mr Razzaq produced additional documentation in support of his application which are in the appeal bundle, including photographs and a statement from his GP that on 30 September he was not fit for work for 4 weeks because of his epilepsy. The doctor's report also stated that he was currently taking medications for his anxiety, depression and epilepsy and, as I have said, gave the recommendation of 3 months.[16]Mr Razzaq's application for an adjournment was listed for a hearing at 10.30 on the morning of the trial. He did not attend. The judge refused his application for an adjournment and dismissed the claim. In considering the claim, the judge heard evidence from Dr Brownwell, which confirmed the contents of the report which he filed.[17]The judge also examined Mr Razzaq's second ground, which was that the agreement was reached under economic duress. The judge rejected both arguments. He accepted Dr Brownwell's evidence that he did have capacity to make the settlement agreement at the time.[18]I comment it was incumbent upon Mr Razzaq as claimant to prove that he did not have extract capacity and the judge rejected the argument based on economic duress. The judge considered that it was open to Mr Razzaq to reject the offer from the insurers and even if he had, for financial reasons, found it difficult to litigate, having done so, that did not constitute a reason for setting aside the agreement reached.[19]The judge also examined two additional grounds (not formally advanced by Mr Razzaq, but foreshadowed in his skeleton argument) that the settlement was reached as a product of undue influence from the insurers, and that there was no consideration to support the existence of the agreement.[20]The judge rejected those two additional arguments and therefore dismissed the claim. He noted that the insurers could have applied for summary judgment against Mr Razzaq rather than defending the matter to trial.[21]The judge considered Mr Razzaq's adjournment application in his judgment, as appears from the order dated 17 October 2013, to be totally without merit.[22]On 30 October 2013, Mr Razzaq applied to set aside the judge's order of 10 October under CPR 39(3), stating that he had received the judgment on 25 October. On 6 February, the judge dismissed Mr Razzaq's application under CPR 39(3) to set aside the order of 10 October 2013.[23]The judge said that Mr Razzaq had not satisfied the three limbs of CPR 39.35. The application had been made too late, he did not have a good reason for not attending trial and the claim did not, in any event, have a reasonable prospect of success at trial: all matters which he was obliged to take into account under the rules.[24]The 6 February judgment also gives reasons based, apparently on the judge's notes, as to why the judge had refused to adjourn the trial on Mr Razzaq's application.[25]The judge said in paragraph 19 that he would have been prepared to have adjourned the application to set aside the judgment for Mr Razzaq to provide additional evidence about his medical condition and the reasons why he was unable to attend the trial, had it not been for the fact:
"That it was plain to me [ie the judge] that the third limb of CPR 39.35 simply cannot be satisfied."
In other words, the judge was clearly of the view, as the following paragraphs of his judgment of 6 February 2014 demonstrate, that the claimant had failed to demonstrate that he had a reasonable prospect of success at the trial.[26]Mr Flynn, who appears for Mr Razzaq, and has submitted a very helpful skeleton argument, points out that in accordance with the decision of this court in Terluk v Berezovsky [2010] EWCA Civ 1345 the test to be applied to a decision on the adjournment of proceedings is not whether it lay within the broad band of judicial discretion but whether in the judgment of the appellate court it was unfair.[27]Mr Flynn submits that it was not fair. He points to the following persuasive factors. The appellant was acting as a litigant in person and the claim was for almost £39,416. The trial was listed to be heard on 10 October, so it was made a number of days before the hearing. There had been no prior adjournments and the evidence clearly showed that the adjournment was being sought on the grounds of ill health.[28]Mr Flynn submitted that even if the evidence was inadequate, it clearly demonstrated that the appellant was suffering from anxiety and depression and had suffered from epilepsy and had had three fits in the last weeks, and other matters.[29]Mr Flynn also referred to the statement of fitness to work, to which I have already referred, which identified that he was unfit to work because of epilepsy, and that the appellant had also produced a note from the hospital detailing his attendance at hospital due to difficulties he was suffering with his eyes, and the fact that the appellant had also informed the defendants by email, the insurers by email on 1 October 2013, of his ill health. The application to adjourn was listed for the first morning of trial, but the fact was the appellant was unable to attend the application due to him being too unwell to attend trial.[30]He submits that what the judge should have done, if he regarded the health evidence as unsatisfactory (which Mr Flynn submits it was not) was to have given the applicant the opportunity of supplementing the evidence, rather than them simply over-riding it and getting on with the trial in circumstances where the doctor identified anxiety and depression.[31]Mr Flynn submits that the order made on 10 October dismissing the application for the adjournment failed to ensure that the parties were on an equal footing, failed to deal with the case in a way which was proportionate having regard to the amount of money involved; the importance of the case; the complexity of the issues and the financial position of the party, and that accordingly, in all the circumstances, the decision to refuse the application of an epileptic man who had suffered three fits in recent weeks was unfair.[32]I see much force in the submissions made by Mr Flynn as to the decision of the judge to refuse to grant an adjournment. I also see force in the submissions made by Mr Flynn that so far as the application to set aside was concerned, where the judge recognised that he might have been prepared to grant an adjournment to supplement the evidence relating to the application to adjourn, the judge was wrong to conclude that the first limb of 39.3.5 had not been satisfied if it was right that the applicant only knew about the judgment, or did not even see the judgment on the 25th, and he clearly had acted promptly in applying to set aside the judgment.[33]I also see the force in Mr Flynn's submission that the judge, at least, appears to have been prepared to consider further whether Mr Razzaq had had a good reason for not attending the trial.[34]The problem which I have about this case is that I am not persuaded that, even if there were a reasonable prospect of success on the argument that the trial date should have been adjourned, the applicant has any reasonable prospect of establishing on appeal that he had any (or a reasonable prospect) of success at the trial.[35]Mr Flynn probably accepts that I, and indeed the judge, were entitled to have regard to that matter - the judge, in setting aside the judgment and I, in considering whether permission to appeal should be granted.[36]I think it is a difficult argument that the judge was acting unfairly in circumstances where he refused an adjournment where nobody had turned up on behalf of Mr Razzaq to apply for an adjournment and where the medical evidence was not satisfactory. I can see no error of principle in the reasons which the judge gave in his later decision for rejecting the medical evidence.[37]The grounds of appeal do not actually raise any issue about the judge's assessment of the merits of the claim as a separate ground of appeal, but Mr Flynn has submitted that if an adjournment had been allowed of the trial, Mr Razzaq would have had a proper opportunity to challenge the evidence of Dr Brownwell and that this could have led at least to the possibility of Mr Razzaq establishing his claim and led to a different conclusion on the part of the judge.[38]Mr Flynn submits that if he had been allowed to attend he could have established evidence of economic duress and could have cross-examined the loss adjustor, which might have led to success. He could have also challenged the medical evidence of the joint expert.[39]I am afraid to say that I consider that the judge's decision in relation to the various claims made by Mr Razzaq to set aside the settlement as clearly correct. On the materials before me there was no prospect whatsoever of Mr Razzaq challenging simply by cross-examination the opinions of Dr Brownwell. I have already referred to certain paragraphs of her report and contrary to Mr Flynn's submissions I see no inconsistency between paragraphs 5.13 and 5.14.[40]It was for Mr Razzaq to prove that he lacked capacity when he concluded the settlement with the the insurers in 2009. He did not consult his general practitioner, and there is no record of him doing so at any time during the relevant period. There is nothing, it is clear in the evidence, to support his assertions that he lacked capacity. The fact that he had suffered distress, as Dr Brownwell points out, which might have affected his judgment and decision to reach a settlement, is not sufficient, as the judge said, to have entitled him to set aside the settlement either on the grounds of incapacity, or economic duress, or undue influence. As the judge points out in his first judgment, the insurers were in a stronger commercial position and that was the reality.[41]For all those reasons, I dismiss this application for permission to appeal. I think in all the circumstances it does not have a real prospect of success.[42]I make one point. It has been brought to my attention that there are three orders of the Walsall County Court.[43]The first, dated 17 October 2013, which dismissed the adjournment application and ordered the claimant to pay the costs of the defendant of the claim to be assessed in detail on the indemnity basis:
"If not agreed, the claimant shall pay the sum of £12,000 on account of such costs by 4pm on 7 November 2013. "3. Any application made by the claimant to set aside or vary the judgment under CPR 39(3) shall be reserved to HHJ Mithani."
[44]There is then the order made on 7 February 2014, in relation to the application to set aside the judgment. That was the application of 30 October 2013, the order dismissing that application and refusing permission to appeal.[45]As I said, it is dated 7 February 2014. There is then what appears to be something of a rogue order which is dated 29 May 2014, which to a certain extent, replicates the order of 17 October 2013, dismissing the application for an adjournment and ordering that the claimant pay the costs of the defendant of the claim.[46]The two additional features if this later order are: one, an order dismissing the claim, which clearly should have been made in the order of 17 October 2013. It is implicit in that order that the judge had dismissed the claim. Indeed, his judgment makes clear and it is implicit from the order because the claimant is ordered to pay the costs of the defendant of the claim. However, the order of 29 May 2014, apart from inserting a new paragraph 2 that the claim be dismissed, inserts an order that the claimant do pay the defendant's costs of the claim to be assessed in detail on the indemnity basis if not agreed:
"The claimant shall pay the sum of £120,000 on account of such costs by 4pm on 7 November 2013."
[47]That figure of £120,000 clearly appears to be a mistake and I am not, myself, clear what business the County Court had to produce the letter and to change the numbers in the earlier order.[48]I have asked Mr Flynn that the matter be looked into, because it is clearly undesirable that such an order should be on the file without, apparently, any explanation for it. However, but in all the circumstances I am afraid I must dismiss this application.