Mengiste v Endowment Fund for the Rehabilitation of Tigray & Ors [2013] EWHC 856 (Ch)

Case No HC10C01299[2013] EWHC 856 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Venue The Rolls Building, Royal Courts of JusticeDate Monday, 25 th March 2013
Before
MR. JUSTICE PETER SMITH
Between
MengisteClaimantEndowment Fund for the Rehabilitation of Tigray & OrsDefendant
B E T W E E N:
(1) MULUGETA GUADIE MENGISTE
(2) ADDIS INTERNATIONAL TRADING SHARE COMPANY Claimants
- and -
(1) ENDOWMENT FUND FOR THE REHABILITATION OF TIGRAY
(2) ADDIS PHARMACEUTICAL FACTORY PLC
(3) MESFIN INDUSTRIAL ENGINEERING Defendants
Transcribed by BEVERLEY F NUNNERY & CO
Official Shorthand Writers and Audio Transcribers
Quality House, Quality Court, Chancery Lane, London WC2A 1HP
Tel: 020 7831 5627 Fax: 020 7831 7737
info@beverleynunnery.com
MISS V. RYLATT (Solicitor, Rylatt Chubb) appeared on behalf of the Claimants.
MR. A. SPINK QC and MR. O. ASSERSOHN (instructed by MS-Legal) appeared on behalf of the Defendants.
MR. G. McPHERSON QC (instructed by RPC) appeared on behalf of the Respondent.

J U D G M E N T S

[1]The next stage of this lengthy saga is the claimants’ application for permission to appeal. The application was made by Miss Rylatt on behalf of the claimants. Mr. Ashworth, who lodged the detailed skeleton argument in closing speeches, felt in a matter of conflict and was no longer able to represent the claimants.[2]The entirety of the basis for the application for permission to appeal is set out in para.15 of Miss Rylatt’s skeleton argument. I set it out today so that the Court of Appeal can understand the paucity of material in support of the application. It says this:
“The claimants also request leave to appeal. The court having found fault that the previous proceedings in Ethiopia were wrong, not to have found that there is a real risk that justice could not be obtained in future proceedings in Ethiopia and should not have stayed these proceedings. In addition, the claimants seek leave to appeal because of procedural and other irregularities set out in the skeleton argument of the claimants at paras.4 to 21 and 30 to 33.”
[3]The complaints fall into two categories. The first is on the merits, but merely asserting that I was wrong is not sufficient for the purposes of challenging the fact finding I made. That has long been established and superior courts have established that in a number of cases to which I made reference in the judgment, which show that the courts have regularly heard factual findings in these cases, but very rarely interfere. 4` So the appellants must show something exceptional, but in that paragraph they simply do not say in what way the judgment I gave is alleged to be wrong. There is no material for me to consider as to whether they have an appeal which has real prospects of success. I gave Miss Rylatt a number of opportunities in argument either to clarify, which she was unwilling or unable to do, or an opportunity to present a properly formulated case tomorrow. She also declined that opportunity.[5]The second point in this area is the reference to the paragraphs in the judgment where I deal with the possibility of them obtaining an unfair hearing if and when they go back to Ethiopia. Miss Rylatt’s submissions are based on a complete misunderstanding of those two paragraphs, paras.262 and 263. Paragraph 262 says this:
“If the Claimants are successful then they will have their fair trial in Ethiopia based on the new material and if accepted a panel of Judges which does not involve Judge Mehretab and an independent judiciary. Paragraph 263: “On the other hand if that application fails depending on the reasons for its failure that may provide more compelling evidence that the Claimants will not obtain a fair hearing in Ethiopia.”
I apprehend Miss Rylatt to be assuming that the word “more” or the words “more compelling” means “additional”. It does not, it means more than the inadequate evidence which I heard and ruled upon at the trial. I stress that as at the trial, on the evidence, I had no evidence which showed that there was any real prospect of the claimants establishing there was cogent evidence that they would not obtain a fair hearing in Ethiopia.[6]The going back to the Ethiopian courts arises out of the presence of Judge Mehretrab and the complaint that her presence contaminated the proceedings. That is a point which they have never taken to the Ethiopian courts, as I stressed in the judgment.[7]The second point that they rely upon of course is the now infamous Inventory, which had a high watermark of being binding, conclusive and leading inexorably to the conclusion that the defendants’ officers perjured themselves. That document has also not been put before an Ethiopian court, self-evidently because it came into existence after the proceedings in Ethiopia had finished.[8]I then say in 263:
“I must stress that I am not saying that a failure to obtain relief necessarily leads to the conclusion that the hearings were unfair. It depends entirely on how the hearings were disposed of.”
I therefore stayed the proceedings, not because I had any doubts that it was right to stay them, but the claimants had a procedural opportunity to go back to Ethiopia and either obtain justice in Ethiopia, which is, as the parties all agree, the natural forum for this dispute but for the alleged unfairness, or show that the Ethiopian courts have not treated them fairly because of the way in which those applications have been dealt with.[9]So that part of the appeal grounds put before me is entirely nothing more than a re-run of the evidence to seek to obtain a judgment somewhere else. That has no real prospect of success and I refuse permission to appeal on that.[10]The second one is a number of alleged procedural irregularities. It is true that Mr. Ashworth QC in his closing submissions spent the first quarter of his closing submissions attacking the way in which the procedures went on. Given that almost unique experience in my judicial period, sitting for 11 years, of having to defend myself when delivering a judgment against attacks which have never been particularised or even ventilated before, I dealt with them comprehensively in the judgment. Miss Rylatt refused, and that is the right word, to tell me in which way I was wrong in the way I dealt with them. I am therefore being required to consider permission to appeal on the basis of allegations which I answered where not one piece of material is put before me to explain why I went wrong.[11]Take, for example, the complaint that the procedure went on for a long time. True it did, but there were a number of reasons for that. The major one was, in fact, that from May the proceedings were then prolonged at the request of, and for the benefit of the claimants, to enable them, first, to reconstruct their evidence of experts, of the expert, Mr. Jones, in the light of the factual evidence given by Mr. Mengiste and to base their case on an entire rewrite of his expert evidence; and second, to reverse a decision to require Mr. Teferie, one of the defendants’ witnesses, to be cross-examined by Mr. Ashworth, after Mr. Hollington in May had indicated that his presence was not required. For the claimants to have the benefit of those to save their case and then submit the whole procedure was wrong baffles me.[12]Equally, complaint that the normal case as set out by Lord Templeman in Spiliada should have been followed, and that this should have been dealt with in my room in half an hour, as Lord Templeman says on the basis of expert evidence, as is known and trusted, is, to adopt a phrase which has been bandied around in this case, quite Alice in Wonderland. First, for Mr. Jones to be categorised as the kind of expert that Lord Templeman referred to is fanciful. I remind everybody, if they need reminding, that when the case came on in February the claimants had an order which prevented the defendants even knowing who Mr. Jones was, let alone his expertise, and yet the court was being required to decide a case without knowing whether Mr. Jones was a lawyer, a dustman, a builder or anything else, or whether he had any political axe to grind. That was something which was unacceptable and a procedure was put in place. Did the claimants object to that procedure? No, they did not. The only person who objected to the procedure, quite rightly, was Mr. Spink, who felt, quite rightly, that his hands were being somewhat fettered because he could not discuss the expert evidence that was being given by Mr. Jones with his solicitor and his clients.[13]Unlike the claimants, Mr. Spink reserved his position but did his best and he won. Had he lost, he might well, of course, quite properly been able to raise the argument that the trial was procedurally unfair and he did not get a fair hearing for that reason. Once again, the claimants benefited from this exercise. Had I acceded to the defendants’ application that the identity of Mr. Jones would be produced, it was made quite clear to me that on that basis alone Mr. Jones would refuse to give evidence. The machinery I put in place enabled Mr. Jones to give evidence and thus the claimants to have expert evidence at the trial.[14]Miss Rylatt has not explained to me why there is a case which has real prospect of success or that was a procedural irregularity. Indeed, she simply does not deal with it.[15]In other parts of Mr. Ashworth’s skeleton argument criticisms are made of the fact that I drew to Mr. Jones’ attention the fact that, as an expert, certain costs consequences would flow if he gave evidence that was reckless or negligent to a high degree. Mr. Jones told me he did not know that. Miss Rylatt does not or could not or would not argue as to whether or not a warning should have been given.[16]These are matters which, if there is to be a serious application for permission to appeal, must be set out in full. To my mind, I have not received any credible basis which says that there is an arguable case that I fell into error both as regards the facts and as regards the procedure of analysis. I will therefore refuse permission to appeal.[17]I will also direct that if the claimants wish to seek permission to appeal from the Court of Appeal, they must, as part of their documents, provide to the Court of Appeal a transcript of today’s application in respect of permission to appeal so, as Mr. Spink rightly says, the Court of Appeal can understand precisely what is going on in this case.

L A T E R :

[18]I have, in effect, an application now by Rylatt Chubb, having indicated that I would not recuse myself, to adjourn these defendants’ application for a wasted costs order against them. Mr. Spink, as ever, appears for the defendants. He accepts that the only thing that can be considered this term is whether or not stage one has been satisfied, and I intend to deal with that tomorrow, because I am not minded to accede to Mr. McPherson’s application for the reasons I will give.[19]Mr. McPherson seeks an adjournment until two events: one is until the claimants’ appeal to the Court of Appeal is finally determined, in effect; and the other is until the proceedings, if any, that might be brought in Ethiopia might be finally disposed of.[20]Let us analyse that situation in the context of the judgment I have delivered and the subsequent applications. I have delivered judgment in effect comprehensively dismissing the claimants’ claim in this case. Their action is stayed. Their application to serve out of the jurisdiction is not dismissed, it is lying there only capable of reviving if the claimants can come back to this court.[21]How can the claimants come back to this court? They can come back to this court if they utilise the power identified in the judgment of going to Ethiopia, seeking to persuade the Ethiopian courts that the Court of Cassation should hear an application under Article 6 to reverse all the hearings that have taken place. The apparently mandatory requirement is for such application to be made in 30 days. I will not set out in the judgment how the claimants’ expert, Mr. Jones, shows a possibility of going beyond that. Both sides’ experts actually agreed on that, though I think it is fair to say Mr. Jones was somewhat more confident of the outcome than Dr. Haile was.[22]If they go to Ethiopia and actually obtain an Article 6 review successfully, we will never see them again in this jurisdiction, because they will have their retrial and they will then litigate in what everybody agrees is a natural place for this litigation to take place. If they fail in their Article 6 application because the Ethiopian courts considered it on its merits and dismissed it fairly on its merits, we will not see them again either because they have had a fair hearing and have simply lost, which is not a basis for commencing proceedings or reviving proceedings here. They will only come back if their Article 6 application is dealt with so badly by the Ethiopian courts that it is a demonstrable fact that they did not get a fair hearing in Ethiopia then.[23]They have liberty to apply to lift the stay but, as Mr. Spink succinctly put it now, that is in effect a fresh application based on the fresh evidence obtained because on the evidence they put before me they failed to establish that they had any cogent evidence that they would not obtain a fair hearing.[24]Why should the present application be adjourned until after that? I can see no justification for adjourning it. I set a timetable on Friday, 22nd March 2013 for that to take place. That had a long-stop date of 22nd March 2014. When I call it a “long-stop”, it was not a final long-stop because I cannot control the Ethiopian courts, and I accepted, and Mr. Spink accepted, that if the claimants could show with proper credible testimony that the exhaustion of the Article 6 procedure for reasons beyond them would not be concluded by March next year, they would be able to obtain an extension of time. That might even stretch this application even further.[25]Applications like this - and I suppose Mr. McPherson might say that he is grateful for my consideration, but not really - have to be dealt with expeditiously in my view. It is quite wrong, like committals, that this should be hanging Damoclean like over a firm of solicitors for a length of time. I do not see that the question of how this action has gone can possibly be affected by a later application that might be made in respect of evidence which is post-trial and would never been relevant to the trial. I have decided this case on this evidence.[26]So I do not see the fact that the claimants might have a possibility of going off to Ethiopia to follow the suggested course is relevant to the present issue.[27]Next is the question of whether or not I should stay pending an appeal. I think it is important to set out what has happened as opposed to what might have happened. The claimants, faced with the stay of their action, could have presented, if there were any cogent grounds, detailed submissions to me today to show that they had an argument in the Court of Appeal which was more than fanciful and had a real prospect of success, which is the only test for permission to appeal. They failed comprehensively so to do for the reasons I have already set out in the judgment I delivered this morning. So I am faced with a situation where I have delivered the judgment, and I have no material, in my view, to suggest there is any basis for the claimants challenging that judgment on appeal. That is why I refused permission to appeal.[28]What is more, there was no application to stay the judgment. There is no suggestion at the moment that they will necessarily go to the Court of Appeal to renew it on paper, but I have directed that if they do they must show the Court of Appeal what I have said today. That will also appear in a little checklist that we all fill in as to why we refuse permission to appeal.[29]There was no application for a stay. There is an order for payment of money and there is an order for directions. None of those is stayed. There might be an application to stay the £400,000 which is not due until 18th April, but as I said on Friday that application is not going to be based on a merits based application - i.e. “You should not order us to pay because we have an appeal against you which has real prospects of success”. That submission has not been made to me, although there have been two opportunities to do it, namely on Friday and today. In that kind of scenario, we must not forget the decision of the Court of Appeal in Linotype-Hell Finance and other cases whereby a successful party is not be deprived of the fruits of its victory.[30]What you would do on such an application for a stay is you would look at the position of the defendants, you would look at the position of the claimants, and if the defendants can satisfy me that they can repay any order for an interim payment, the normal order is to order the interim payment on an undertaking to repay it if it is reversed, with interest from the date of payment and safe receipt at the Judgment Act rate. We have not had that debate. All that we have had, which was entirely judge provoked, is when I informed Mr. James, and in effect the claimants as well, that of course it is quite wrong for the court to make an order when it knows the person, the subject of the order, cannot comply, because that is an illusion. I alluded to the authorities and I said that if the claimants present an appeal with a credible basis which they say they will not be able to prosecute because they cannot afford to pay the £400,000 then I accepted that if there is, first, an appeal which has at least a prospect of success or, in the event of refusal by me, a short time to go to the Court of Appeal, then provided - and this is the lynchpin - I had credible testimony which showed that the claimants could not pay the money, if that is the analysis then an order for payment of £400,000 on account would have the effect, if they do not pay, of having their action struck out and their appeal thereby frustrated. That would be a denial of justice. I am not making a ruling, but that is the structure.[31]I see no reason why I should stop determining as far as possible all the first instance parts of these proceedings, because otherwise if I do not make a determination at the moment of whether there is a stage one or stage two satisfaction of a wasted costs procedure that is made out, then the matter will go in limbo. The only possible circumstances I can see in which it would be wrong for me to proceed is if the claimants obtain permission to appeal and the Court of Appeal stays the main orders pending that appeal.[32]If such an application is made and granted, then I will look anxiously at whether or not there should be some part of the procedure, but I do not believe that it is in the interests of anybody that the stage one determination should not be made now. That is relatively small in cost terms. The stage two, both parties accept that there might be a hearing before me, for perhaps a day with perhaps a day’s reading by me. I have already indicated to the parties that if we go to stage two I would expect to hear it in April.[33]The position of the claimants at the moment is that they have 21 days to go to the Court of Appeal. They have not applied to extend it, they have not applied to stay the order, and therefore their decision to go to the Court of Appeal will be well ended before the time for payment falls due, and well before any stage two hearing, if any, is considered. If, however, I stay it now and the claimants decide not to go to the Court of Appeal, the whole premise of the present application falls away and we have wasted time.[34]So I will not consider adjourning or staying this application unless there is some compelling reason so to do. To the contrary, I believe it is in the interests of all parties, including Rylatt Chubb, that once again this matter is determined as expeditiously as possible. Then, depending on my decisions, there might or might not be an appeal to the Court of Appeal, but when cases come on before the Court of Appeal, and absent expedition, it is most unlikely that any application to the Court of Appeal by anybody of substance is going to come on this year, everything will be in front of the Court of Appeal and there will be nothing left …[35]So for all those reasons I reject the application that I should adjourn.