Ali Meerza & Ors v Al Baho & Ors [2015] EWHC 3154 (Ch)

Case No HC201100065Case No HC2015000031[2015] EWHC 3154 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Venue Royal Courts of Justice, Rolls Building, Fetter Lane, London, EC4A 1NLDate 03/11/2015
Before
THE HONOURABLE MR JUSTICE PETER SMITH
Between
(1) Asad Ali MeerzaClaimants(2) Mohsen MehraClaimant(2) Sheikha Hind Salem Homoud Al-Jaber Al-SabahClaimant(1) Tareq Al BahoDefendants(2) Sheikha Salem Homoud Al-Jaber Al-SabahDefendant(3) Andrew PinnellDefendant(4) BC Penthouse LtdDefendant(5) Gulf Heritage Properties LtdDefendant(6) Hussain SajwaniDefendant
Romie Tager QC & Ian Clarke (instructed by Hughmans) for ClaimantsAdrian Davies (instructed by Wilson Barca LLP) for First, Second and Third DefendantsJawdat Khurshid (instructed by SC Andrew LLP) for Fifth and Sixth DefendantsHearing Hearing dates: 19th and 20th October 2015
JudgmentPeter Smith J:INTRODUCTION
[1]This is the hearing of a Case Management Conference (“CMC”) in the above actions.[2]In addition there was an application issued on 21st September 2015 by the Claimants. By that application they sought the following relief:- 1) Permission to amend the Particulars of Claim in claim no. HC2011000065 (“the First Action”) in the form of the draft Amended Consolidated Particulars of Claim in claim no. HC2015002330 (“the Third Action”); 2) Further or alternatively for an order that those draft Amended Consolidated Particulars of Claim in the Third Action stand as the Amended Consolidated Particulars of Claim in the First and Third Actions and in claim no. HC201500031 (“the Second Action”); and 3) Summary judgment in those actions in respect of the claims by the Third Claimant (“Sheikha Hind”) against the First Defendant (“Mr Al Baho”) the Second Defendant (“Mr Pinnell”) and/or the Fourth Defendant (“BCP”) including to the extent necessary permission to make this application pursuant to CPR 24.4 (1); 4) Alternatively Default Judgment pursuant to CPR 12 against BCP and/or Mr Al Baho in claim no. HC2015002330: 5) Payment out of the court of the sum of £78,418 lodged in Court by Sheikha Hind on 19th March 2015 as security for costs of Mr Al Baho, Mr Pinnell and BCP; and 6) Dismissal of the applications brought (variously) by Mr Al Baho the Second Defendant (“Sheikha Salem”) Mr Pinnell and BCP.[3]Not to be outdone the following applications on behalf of various of the Defendants were before me:- 1) Application by Mr Al Baho and Sheikha Saleem dated 1st July 2011 to strike out Sheikha Hind’s claim for non compliance with CPR Part 19 (3); 2) By Mr Al Baho, Sheikha Salem and Mr Pinnell dated 7th September 2011 seeking declaration that Sheikha Hind is not entitled to represent the Estate of the late Sheikh Salem Hamoud Al-Jaber Al-Sabah (“Sheikh Salem”); 3) By the Third Claimant dated 7th September 2011 that if CPR 19 (7) applied she should be appointed to represent Sheikh Salem’s estate (“the Estate”). 4) By Sheikha Salem dated 8th December 2011 to strike out Sheikha Hind’s claim under CPR Part 3.4 or for reverse Summary Judgment under CPR Part 24 for permission to bring contempt proceedings against all Claimants; 5) By Mr Al Baho and Sheikha Salem dated 14th February 2012 for permission to amend their Defence and to strike out Sheikha Hind’s claim under CPR 3.3 or reverse Summary Judgment under CPR Part 24; and 6) By Mr Al Baho dated 20th May 2014 to strike out Sheikha Hind’s claim.[4]In addition the Defendants sought to raise matters as regards further consideration of whatever was left after the numerous actions.

SURPRISE APPLICATION OF MR AL BAHO

[5]On the second day of the hearing before me Mr Al Baho made a further application which he wished to be considered immediately at the hearing. He provided a draft of an application to the Claimants’ Counsel late in the evening of the first day. That was supported by a skeleton argument prepared by Mr Davies who appears for Mr Al Baho, Sheikha Salem and Mr Pinnell. In both those documents Mr Al Baho sought an order that Sheikha Hind be required to be put to her election whether to proceed with her proceedings against the First Defendant in England or in Kuwait. He also sought an order that she should pay Mr Al Baho’s costs of the application.[6]That arose in the following circumstances. During the course of the hearing on day one it emerged that Sheikha Hind had commenced proceedings in May 2015 against Mr Al Baho in Kuwait. Those proceedings at the very least duplicated some of the relief being sought against him in actions 1-3 in this Division. Mr Al Baho had issued his own proceedings in Kuwait against Sheikha Hind for defamation. I was informed by Mr Tager QC (who with Mr Clarke appears for the Claimants) during the hearing that the Kuwaiti Court had struck those proceedings out. Similar proceedings in this jurisdiction had been discontinued by Mr Al Baho in 2013.[7]Nevertheless during day one of the hearing before me there was a debate about the fact that it would be quite wrong for Sheikha Hind to pursue Mr Al Baho simultaneously in both jurisdictions. I suggested to Mr Tager QC that she should be put to her election and if she chose to continue in this jurisdiction she should undertake to stay the proceedings in Kuwait or have them dismissed. Quite reasonably Mr Tager QC asked for time to obtain instructions from her overnight. Overnight a draft application notice and supporting skeleton was prepared as I have said. Mr Tager QC told me at the start of the hearing on day 2 that he had obtained instructions and was able to undertake either to have the Kuwaiti proceedings stayed or dismissed and was willing to submit to such an undertaking being included in an order in this action.[8]That ought to have been the end of the matter. However shortly before the Court sat on the second day Mr Al Baho issued an application and served it on the Third Claimant shortly before the day’s proceedings began. At the time it was treated by her legal team as a sealed version of the earlier draft application. It was only during Mr Davies’ submissions that it became apparent to them that it sought an entirely different form of relief. It sought an order “pursuant to CPR 11.1 (1) the First Defendant disputes jurisdiction to bring the 2015 proceedings in England which had been issued by Sheikha Hind as there were parallel proceedings already on foot in Kuwait”. It also sought an order that the earlier proceedings (i.e. the Third action) should be stayed pending the outcome of the proceedings in Kuwait.[9]This had not been foreshadowed in any part of the hearing or in any prior correspondence.[10]This application Mr Tager QC submitted was an abuse of the process and was opportunistic. It was he said a tactical move (one of the many he submitted) by Mr Al Baho to avoid liability in this action.[11]It is fair to say that Mr Davies in the light of his prior brief submissions on day 2 in respect of Sheikha Hind’s application against Mr Al Baho for Summary Judgment (which had begun on the first day of he hearing and resumed on the second day) would have expected that she would succeed on that application. The above application was an attempt to forestall such a judgment. The Third Action had been issued on 5th June 2015 and the document called the Revised (July 2015) Draft/Amended/Consolidated Particulars of Claim was dated 30th July. Mr Al Baho provided Hughmans the Claimants’ solicitors with a purported acknowledgement of intention to defend the day before the hearing. That was substantially out of time and therefore Mr Al Baho required permission to file that acknowledgment. He gave no explanation for the delay.[12]The acknowledgment had two boxes completed namely that they intended to defend the action and dispute the jurisdiction. The purpose of this tactical charade was so that it could be said that the application was based on the contention that the Kuwaiti action and the proceedings in Kuwait were earlier and the suitable forum conveniens for the resolution of the disputes between the parties. I pause to point out that the location in Kuwait would not be very convenient for Mr Pinnell or BCP. There is also a doubt about whether Mr Al Baho was resident in Kuwait or England or both. This could only be a successful plea if(1) Mr Al Baho had contested the jurisdiction in this country and(2) the Kuwaiti proceedings were the first proceedings. It is true that the Kuwaiti proceedings pre dated the Third Action which sought to be the consolidated action in this case.[13]However the position before that is somewhat different. In the earlier sets of proceedings Mr Al Baho filed acknowledgments to defend and sought to defend with no reservation as to jurisdiction. He plainly waived jurisdiction as regards those previous actions. Yet by his unannounced application he sought a stay of those proceedings. There is in my view no basis for staying those proceedings.[14]In my judgment Mr Tager QC is right when he submit that this application by Mr Al Baho is an abuse of the process and is purely tactical. He has been content to submit to the jurisdiction in this Court prior to his Counsel’s undoubted perception in the morning of day 2 that he was likely to have a judgment against him under CPR 24.[15]Further he participated in the action before serving the acknowledgement and in particular responded to the Summary Judgment application. In such actions in my view he submitted to the jurisdiction. Mr Tager QC provided me with a decision of Sir Andrew Morritt the then Chancellor in Global Media International Ltd v ARA Media Services & Ors [2006] EWHC 3612 (Ch) in that judgment Sir Andrew Morrit said this at paragraphs [26] and [27]:- “Submission to the jurisdiction. 26 Civil Procedure Rule 11, so far as material, provides as follows:
"Procedure for Dispute in the Court's Jurisdiction" 11(1) A defendant who wishes to (a) dispute the court's jurisdiction to try the claim, or (b) argue that the court should not exercise its jurisdiction may apply to the court for an order declaring that it has no such jurisdiction or should not exercise any jurisdiction which it may have. 11(2) A defendant who wishes to make such an application must first file an acknowledgement of service in accordance with Part 10. 11(3) A defendant who files an acknowledgement of service does not, by doing so, lose any right that he may have to dispute the court's jurisdiction. 11(4) An application under this rule must - (a) be made within 14 days after filing an acknowledgement of service; and (b) be supported by evidence. 11(5) If the defendant - (a) files an acknowledgement of service; and (b) does not make such an application within the period specified in paragraph (4) he is to be treated as having accepted that the court has jurisdiction to try the claim."
Thus, mere failure to make the appropriate application within the period of 14 days gives rise to a deemed submission to the jurisdiction by virtue of 11(5). But subject to the power of the court under CPR Rule 3.1(2)(a) to extend the time for a challenge to the jurisdiction (see Sawyer v Atari Interactive Inc. [2005] EWHC 2351) If time is extended then the defendant is able to challenge the jurisdiction of the court over him on any grounds otherwise available to him. But if by conduct he has affirmatively submitted to the jurisdiction then there is no point in granting an extension of time to make an application for that purpose which is bound to fail. 27 The test to be applied in determining whether any particular conduct amounts to a submission to the jurisdiction was considered by Colman J. in Spargos Mining NL v Atlantic Capital Corporation [1995] reported only in "The Times" for 11th December, but quoted in full by Patten J. in SMAY Investments Ltd. v Sachdev [2003] 1WLR 1973 at p.1976. I reproduce the whole of the quote as set out in that paragraph 41 from the Judgment of Patten J: ""In approaching the question of submission, I have in mind the following authorities. In Astro Exito Navagacion S.A. v. W.T. Hsu, otherwise know, more pronounceably, as The 'Messiniaki Tolmi' , [1984] 1 Lloyds Reports, 266, Lord Justice Goff (as he then was) at page 270, said this: 'Now a person voluntarily submits to the jurisdiction of the Court if he voluntarily recognizes, or has voluntarily recognized, that the Court has jurisdiction to hear and determine the claim which is the subject matter of the relevant proceedings. In particular, he makes a voluntary submission to the jurisdiction if he takes a step in the proceedings which in all the circumstances amounts to a recognition of the Court's jurisdiction in respect of the claim which is the subject matter of those proceedings. The effect of a party's submission to the jurisdiction is that he is precluded thereafter from objecting to the Court exercising its jurisdiction in respect of such claim. Whether any particular matter, for example an application to the Court, amounts to a voluntary submission to the jurisdiction must depend upon the circumstances of the particular case.' In Sage v. Double A Hydraulics Ltd, [1992] Times Law Reports, 165, Lord Justice Farquharson said (and this is a report of the judgment which is not reported in oratio recta): 'A useful test was whether a disinterested bystander with knowledge of the case would have regarded the acts of the Defendant, or his solicitors, as inconsistent with the making and maintaining of his challenge.' In arriving at the view to be imputed to the disinterested bystander, it seems to me that one has to bear in mind that there will be an effective waiver, or a submission to the jurisdiction, only where the step relied upon as a waiver, or a submission to the jurisdiction, cannot be explained, except on the assumption that the party in question accepts that the court should be given jurisdiction. If the step relied upon, although consistent with the acceptance of jurisdiction, is a step which can be explained also because it was necessary or useful for some purpose other than acceptance of the jurisdiction, there will, on the authorities, be no submission. If the well-informed bystander had been left in doubt because what the defendants had done was equivocal, in the sense that it was explicable on other grounds in addition to agreement to accept the jurisdiction of the court, then the conclusion must be, on the authorities, that there would have been no submission to the jurisdiction. The representation derived from the conduct of the party said to have submitted must be capable of only one meaning." 28 Thus the test to be applied is an objective one and what must be determined is whether the only possible explanation for the conduct relied on is an intention on the part of the defendant to have the case tried in England.”[16]It seems to me clear that I should not entertain this application but dismiss it. The reasons are as follows. First it is an abuse of the process and is simply designed tactically to avoid liability in response to the Part 24 application against him. Second Mr Al Baho waived any jurisdiction point when he submitted to the jurisdiction in the earlier actions and further more when he conducted a defence in this case in response to the Third Claimants’ Part 24 application issued on 21st September 2015. He continued that waiver by not raising the issue either in the skeleton argument or position statement provided on his behalf prior to the commencement of the hearing before me and the way in which the case was conducted until the afternoon of the second day. Third the draft application issued and served on the Third Claimant itself was a waiver of the jurisdiction because it did not seek a stay of the proceedings here but merely required the Third Claimant (in accordance with the debate on day one) to elect between the two proceedings. The Third Claimant has elected between the two proceedings and thus given Mr Al Baho everything he sought in the draft application. Fourth he had not in my view served a valid acknowledgment of his intention to defend as he needed an extension of time so to do and I refuse to grant him any such extension as no explanation has been given and no justification has been provided. Once again the late service on the Claimants of this acknowledgment of intention to defend was in my view tactical to forestall an application by the Third Claimant against Mr Al Baho for judgment in default of filing such acknowledgment under CPR 12.[17]For all of those reasons I decline to accede to that application and dismiss it. I do however accept the undertaking proffered by the Third Claimant to stay or dismiss the Kuwaiti action in so far as it reflects the relief sought in this action which was offered by Mr Tager QC in response to the unissued draft application served overnight.[18]Finally if there is any doubt as will be seen further in this judgment I intend to consolidate the proceedings which brings in the unchallenged submissions to the jurisdiction by Mr Al Baho in the earlier proceedings.

PRIOR DISPOSAL

[19]On 6th June 2014 Proudman J dismissed an application by Mr Al Baho for permission to issue contempt proceedings against Sheikha Hind. In view of that judgment Mr Pinnell Hind abandoned his application above in so far as it sought permission to bring contempt proceedings.[20]Before me it was agreed that the claim against Mr Pinnell could at this stage be resolved by an order that he make and submit to an interim order for an account in respect of his dealings whether as trustee or fiduciary or as an agent in respect of the Estate of Sheikh Salem.[21]This plethora of applications threatens to affect the cost effectiveness of these actions in relation to the matters sought to be recovered. It is essential in my view that this CMC addresses the further progress of these actions so as to bring the matter on expeditiously and to minimise the costs that are expended in so bringing the actions on.[22]Although there appears to be a multiplicity of actions in fact the number of issues before me was relatively short.

STOCK TAKE

[23]With the clearance of those above matters there remains(1) the Third Claimant’s applications under CPR Part 12/24 against Mr Al Baho and BCP and(2) Mr Al Baho and Mr Pinnell’s applications to dismiss the first 3 actions brought as against them by the Third Claimant. The basis for the latter is quite straightforward.

MR AL BAHO AND MR PINNELL’S APPLICATIONS

[24]Sheikh Salem died intestate domiciled in Kuwait.[25]His Estate devolves according to Kuwaiti law. The Law of Kuwait requires the Estate of someone dying intestate to be divided into shares between any widows and his issue. The share attributed to each beneficiary depends on the degree of proximity to the deceased and the sex (male beneficiaries take twice as much as female ones apparently).[26]I have a statement with an affidavit sworn by Abdullah Khalid Al-Ayoub on 30th April 2008. Mr Al-Ayoub has been admitted to the Kuwaiti Bar since 1978 and has practiced in Kuwait for 30 years. In paragraph 4 of his affidavit he says:- “Furthermore, and in accordance with the laws of the State of Kuwait, the heirs of the Deceased, who own at least 75% of the Deceased’s estate, as calculated on the basis of the value of their respective shares in the Deceased’s estate as set out in the above mentioned Succession Certificate, shall be entitled to carry out the ordinary acts of management of the Deceased’s estate, or to dispose of any of the assets forming part of the Deceased’s estate, may appoint one of them or any other person as a manager to perform such activities on their behalf.”[27]Therefore unlike the law in England and Wales a beneficiary in appropriate circumstances has a right to bring a direct cause of action in respect of any matters affecting the Estate (Commissioner of Stamp Duties v Livingston [1965] AC 694). Sheikha Hind brings an application in these proceedings in her own right as a beneficiary and also on behalf of the Estate.[28]However that in my view is not the end of the matter. Mr Clarke who appears for the Claimants as junior to Mr Tager QC accepted that for the purposes of proceedings within England and Wales in either capacity Sheikha Hind would need to obtain a grant of letters of administration (if only ad colligenda bona). Without that she would have no title to sue.[29]She did not have any letters of administration in England and Wales until 8th March 2012 when she obtained a grant for the use and benefit of Shamma Brika Abu-Ilhawaia. She was a widow of Sheikh Salem and the mother of Sheikha Hind and Sheikha Salem.[30]No objection to her title to sue before this grant was taken by the Defendants in the earlier actions. Indeed their defences only took issue with her representative capacity on behalf of the other beneficiaries and admitted the summary of the position set out in the Particulars of Claim namely that Sheikha Hind had power to sue by reason of her beneficial interest only. That position was maintained by the Defendants until they obtained permission from HHJ Cooke on 26th April 2012 to amend their defences. By that amendment they put in issue the title of Sheikha Hind to sue. In fact the Amended Defence was never served.[31]It follows therefore for a substantial period the Defendants acquiesced in Sheikha Hind’s title to sue despite the lack of any grant of letters of administration within this jurisdiction. That is clearly a significant factor when I consider the issues arising on the First and Third Defendants’ application to strike out the proceedings on the basis of a lack of title to sue by Sheikha Hind. I should at this stage say that the First and Third Defendants represented by Mr Davies adopted a sensible approach as regards the earlier proceedings. In accordance with the orders made by the Court of Appeal in Millburn-Snell v Evans [2012] 1 WLR 41(C.A) paragraphs 36 and 41) the costs in the earlier actions which could be saved by utilisation in the Third Action (which does not suffer from the vice of lack of title) were agreed should be costs in the case in the Third Action. What Mr Davies is seeking on behalf of the First and Third Defendants in effect are the costs that have been incurred in the earlier actions that cannot be saved and are thus wasted. He did not proceed with an application to strike out the earlier proceedings because he realistically accepted that the Third Action was safe from such a challenge and it was inevitable that those earlier proceedings would be directed to be stayed or consolidated in the Third Action which cannot be challenged as I have said on that basis.

BASIS OF MR AL BAHO’S APPLICATION

[32]Mr Davies makes a simple point. Sheikha Hind ought to act as an administrator in the earlier actions in respect of the Estate of Sheikh Salem. However at the time she instituted them she did not have a grant of letter of administration in England and Wales. The claims are in respect of property in the jurisdiction of this Court or the proceeds of sale of property. Thus Mr Davies submits that as she purports to be an administrator she must have a grant in order to be able to represent the Estate. This is a well known position and contrasts with that of an Executor who always had power under the will to act before a grant.[33]He referred me to Millburn-Snell. That was a case where proceedings were commenced purportedly as administrators of an intestate estate without a grant of letter of administration. The Judge at first instance struck out the proceedings as a nullity and the Court of Appeal affirmed that decision. In giving judgment Rimer LJ said this:- “First paragraph 14 noted that it was agreed between the parties that the decision of Judge Langan QC was correct and subject only to any help the Claimant might derive from CPR 19.8 (1) their claim was a nullity and must be struck out and could not be retrospectively validated by the subsequent grant of letter of administration.”[34]He then drew in contrast with a position of an Executor.[35]He then said this:- “15 The latter point is well illustrated by this court's decision in Ingall v Moran [1944] KB 160. There the plaintiff issued his writ in September 1942 purportedly as the administrator of the intestate's estate, but did not obtain a grant of administration until November 1942. This court, allowing the defendant's appeal against the judgment the judge had entered against him, held that the grant did not retrospectively validate the writ, nor could the writ be the subject of an amendment validating the plaintiff's claim to sue as administrator. The grant enabled the plaintiff to issue a new writ, but that was all. Scott LJ, at 165, described the original writ as 'incurably a nullity. It was born dead, and could not be revived.' Luxmoore LJ, at 169, said that the plaintiff's action:
'… was incompetent at the date when the writ was issued, and that the doctrine of the relation back of an administrator's title to his intestate's property to the date of the intestate's death when the grant has been obtained cannot be invoked so as to render an action competent which was incompetent when the writ was issued.'
Goddard LJ, at 172, said that 'this action was, and always remained, incompetent, and judgment ought to have been entered for the defendant.' 16 I regard it as clear law, at least since Ingall, that an action commenced by a claimant purportedly as an administrator, when the claimant does not have that capacity, is a nullity. That principle was recognised and applied by this court in Hilton v Sutton Steam Laundry [1946] KB 65 (per Lord Greene MR, at 71) and Burns v Campbell [1952] 1 KB 15 (per Denning LJ, at 17, and Hodson LJ, at 18). In Finnegan v Cementation Co. Ltd [1953] 1 QB 688, Jenkins LJ said, at 700:
'As to the law, so far as this court is concerned it seems to me to be settled by Ingall v Moran and Hilton v Sutton Steam Laundry and, I may add, by Burns v Campbell, that an action commenced by a plaintiff in a representative capacity which the plaintiff does not in fact possess is a nullity, and, further, that it makes no difference that the claim made in such an action is a claim under the Fatal Accidents Acts which the plaintiff could have supported in a personal capacity as being one of the dependants to whom the benefit of the Acts extends.' 17 Before coming to Part 19.8(1), I should refer to what this court said about Ingall in Haq v Singh and another [2001] EWCA Civ 957; [2001] 1 WLR 1594. The point there in issue arose under CPR Part 17.4, a rule made under the provisions of section 35 of the Limitation Act 1980 and which, by its own terms, expressly applies only to cases where a period of limitation has expired. Part 17.4 provides, so far as material, that: '(1) This rule applies where – (a) a party applies to amend his statement of case in one of the ways mentioned in this rule; and (b) a period of limitation has expired … (4) The court may allow an amendment to alter the capacity in which a party claims if the new capacity is one which that party had when the proceedings started or has since acquired.' 18 In Haq a discharged bankrupt brought in 1993 a claim for damages, whereas the relevant cause of action had upon her bankruptcy vested and remained in her trustee. An amended defence served in 2000 asserted her lack of capacity to sue, whereupon she obtained an assignment from her trustee of the cause of action. The issue was whether the judge was right to permit her to amend to plead the assignment. He had so held on the basis that before the assignment she had no capacity to sue, whereas after the assignment she had the capacity to sue as the trustee's assignee and therefore the case was within Part 17.4(4). This court allowed the defendants' appeal, holding that since both before and after the assignment the claimant was suing in a personal capacity, her capacity had not altered and so she was not entitled to amend. Arden LJ, however, also expressed the obiter view, at paragraph [22], that: '
The effect of CPR r 17.4(4) is therefore to remove the effect of Ingall v Moran [1944] 1 KB 160, the technicalities of which Singleton LJ in Finnegan v Cementation Co Ltd [1953] 1 QB 688, 699 described as a "blot upon the administration of the law." Pill LJ expressed like obiter views at paragraphs [29] to [32]. 19 For myself, I respectfully question the correctness of that assessment of the effect of Part 17.4(4). First, it is not easy to see how a claim which, as Ingall explained, is born dead and is a nullity can be given life by an amendment. Second, I am not confident that it was the Ingall principle pure and simple that was the 'blot' to which Singleton LJ was referring. He was, as I read Finnegan (see [1953] 1 QB 688, at 699), referring rather to the apparent injustice of the instant case (like Hilton, supra) in which a plaintiff who could have sued in her personal capacity under the Fatal Accidents Acts found herself barred by time from suing at all because she had mistakenly sued in time exclusively as administratrix when she had no capacity to do so. Third, as is pointed out in Executors, Administrators and Probate, Williams, Mortimer and Sunnucks, 19th Edition, 2008, in Note 68 to paragraph 8-10, Part 17.4 applies only where a period of limitation has expired and: 'Clearly, it would be an extraordinary result if proceedings could be saved by amendment where a limitation period has expired, but not where such a period had not expired. However, it is not clear on what statutory authority an amendment in the latter case is permitted and, without such authority, it is difficult to see how the earlier authorities (see fn. 65 above [which includes Ingall, Hilton and Finnegan]) can be ignored particularly as they deal with substantive rather than procedural law. Certainly the somewhat ambiguous words at the end of s. 35(7) of the Limitation Act 1980 would not seem sufficient for this purpose. … It may be, therefore, that the true effect of CPR r. 17.4(4) is much more limited than the Court of Appeal in Haq suggests…' 20 Having expressed my doubts about those observations in Haq, I regard it as unnecessary to say more about them. The judge was, I consider, right to regard Haq as providing no guidance for the purposes of the application before him. First, at the time of the application, the claimants had not obtained a grant and so no amendment application was before him. Second, no limitation period had expired and Part 17.4(4) applies only where one has. Mr Oakley expressly disavowed any reliance on Haq”.

'(1) This rule applies where –

[36]It will be seen that the Claimants in that case placed no reliance on the Haq case [2001] 1WLR 1594 where a discharged bankrupt brought a claim for damages, then went bankrupt but subsequently obtained an assignment from her trustee of the cause of action. The Defendant at first instance successfully struck out her claim on the basis there was no title to sue. The Court of Appeal reversed that on the basis that the Claimant always had an action and therefore fell within CPR 17.4 (4) which is summarised in paragraph 17 of the Millburn-Snell judgment above. The situation is not the same in the present case. However it is interesting to note the observations on the technical effect of Ingal expressed by Singleton LJ referred to in paragraph 19 of Millburn-Snell above.[37]Further in the judgment Rimer LJ said this:- “29 Accepting all this, where I have difficulty is in seeing how any of it helps the appellants. In my judgment the flaw in their case is exposed by the decision in Ingall. What that case decided, by a decision binding upon us, is that a claim purportedly brought on behalf of an intestate's estate by a claimant without a grant is an incurable nullity. Subject only to whatever Part 19.8(1) may empower, it follows that the claim the appellants issued was equally an incurable nullity. The logic of Mr Oakley's submission is however that the force of Part 19.8(1) is to confer a jurisdiction upon the court to turn such a nullity into valid proceedings which may be pursued to judgment. ” 30 I am unable to accept that and, in agreement with the judge, consider that Part 19.8(1) has no application to the present case. The appellants' invocation of Part 19.8(1) was responsive to the defendant's strike out application. Logically, however, if they are right about Part 19.8(1), they could (indeed should) promptly after issuing their claim form have applied to the court for an order that the nullity they had thereby conceived should have life breathed into it by way of an order that they be appointed to represent the estate of the deceased intestate and the claim permitted to proceed to trial. The reason that any such application should and would have failed is because Part 19.8(1) does not, in my view, have any role to play in the way of correcting deficiencies in the manner in which proceedings have been instituted. It certainly says nothing express to that effect and I see no reason to read it as implicitly creating any such jurisdiction. It is, I consider, concerned exclusively with giving directions for the forward prosecution towards trial of validly instituted proceedings when a relevant death requires their giving. In the typical case, that death will occur during their currency and will usually be of a party. More unusually, it may have preceded them. But on any basis it appears to me clear that it is no part of the function of Part 19.8(1) to cure nullities and give life to proceedings such as the present which were born dead and incapable of being revived. In ordinary circumstances there is no reason why anyone with a legitimate interest in bringing a claim on behalf of an intestate's estate should not first obtain a grant of administration and so clothe himself with a title to sue. I am unable to interpret Part 19.8(1) as providing an optional alternative to such ordinary course. I would dismiss the appeal on the Part 19.8(1) issue.[38]Hooper LJ and Lord Neuberger of Abbotsbury MR concurred.[39]Mr Davies referred me to a further Court of Appeal decision of Hussain & Ors v Bank of Scotland Plc [2012] EWCA Civ 264. The facts in that case were somewhat surprising. Mr Azam had commenced proceedings in his mother’s name on the basis that he was her litigation friend. She died on 1st January 2010. As set out above CPR 19.8 (1) makes provisions following the death of a party for the appointment of a person to represent the estate of the deceased. No application was made. The following events happened as summarised in the judgment:- “39 Neither at trial nor when he obtained permission to appeal did Azam have any standing to conduct litigation on behalf of his mother's estate. He has no legal standing to conduct this appeal on the basis of that permission, even though he has now obtained a grant of letters of administration to his mother's estate. The grant on 31 January 2012 has not retrospectively given him a capacity that he did not have to issue an appeal notice or to apply for and obtain the permission to appeal from Arden LJ on 20 April 2011: see Millburn-Snell & Ors v Evans [2011] EWCA Civ 577; [2012]1 WLR 41, a decision on the nullity of proceedings commenced on behalf of an estate without first obtaining a grant of letters of administration. An administrator's title is derived solely from the grant of letters of administration, which does not retrospectively validate antecedent suits. 40 Azam should have informed the court, the Court of Protection and the parties of his mother's death, instead of carrying on with the litigation while positively asserting that his mother was alive. He actively and intentionally misled the court and the Bank and his pro bono advisers that his mother was alive. He did so in witness statements in February and July 2010; in evidence on oath at the trial in September 2010 saying that his mother was living in the USA, and in relation to obtaining permission for this appeal. 41 I would set aside the order granting permission to appeal on the basis that there is a compelling reason for so doing: CPR 52.9(2). Arden LJ would not have granted Azam permission to appeal, had she been informed, as she should have been, that Mrs Qutb had died and that Azam had no legal standing to act for her or for her estate. 42 I would strike out the appeal notice for the same reason. See CPR 52.9 (1)(a). 43 That does not mean that the order of Newey J is a nullity. Like all orders of the court, it stands and has effect, unless and until it is set aside on an application to the Chancery Division, which may impose conditions on granting such an order, or on an appeal to this court. So far as this court is concerned, the permission to appeal was obtained by the deception of a person without standing to launch an appeal or to obtain permission to appeal and, on the permission being set aside for those reasons, there is no appeal to be decided and so it must be dismissed.”[40]The Court of Appeal clearly felt strongly about Mr Azam deceiving everybody as to the death of his mother. Nevertheless they followed (without any argument) the Millburn-Snell decision.[41]Mr Davies submits strongly that those two decisions inexorably lead to a conclusion that Sheikha Hind is in the same position as the Claimants in those cases as regards the earlier actions. Consequently he submits those proceedings would have been struck out had he proceeded with the application and that the costs that are thrown away should be payable by her because she had no jurisdiction to initiate those proceedings.[42]Mr Clarke does not accept that position. He points out that in neither of the cases was any reference made to the wide ranging powers given to a Judge under CPR to cure defects in proceedings. He referred me first to Maridrive and Oil Services v CAN Insurance Co (Europe) Ltd [2002] EWCA Civ 369. It will be observed that that case was not cited to the Court of Appeal in the two cases relied upon by Mr Davies.[43]The dispute was over an amendment proposed. The difficulty was that the amendment sought to introduce a cause of action arising out of facts occurring subsequent to the commencement of the proceedings when no cause of action existed so that the claim as originally issued was incurably bad. That was the position under the RSC see for example Halliard Property Co Ltd v Jack Segal Ltd [1978] 1 All ER 1219 where Goulding J declined an application to amend to rely upon a fresh ground of forfeiture in the proceedings when no notice of forfeiture relying on that breach under section 146 of the Law of Property 1925 had been served before the commencement of the proceedings.[44]The arguments against amendments in respect of causes of action which accrue after the commencement of the proceedings were rejected as set out in the following parts of the judgment of Mance LJ:
“20 Mr Millett’s primary proposition remains, however, that no amendment can be made to introduce a cause of action arising out of facts occurring subsequent to the commencement of proceedings, where at the date of their commencement no cause of action existed so that the claim as originally issue was “incurably bad”
. He relied upon Roban Jig & Tool Co. Ltd. and Elkadart Ltd. v Taylor [1979] 1 FSR 130. There the plaintiffs commenced proceedings in August 1995 as owners of the copyright in certain drawings, in which the judge held (on a summons to strike out the claim) that the pleadings contained no shadow of a suggestion that the plaintiffs had either a legal or any equitable title. Before striking out the claim relating to these drawings, the judge considered whether the defect was one which could be cured if the plaintiffs took an assignment of the copyright from the individuals owning the copyright, and then sought to amend. He concluded that it could not beso cured, after referring to Eshelby v Federated European Bank [1932] KB 254 and 423. On appeal, his decision was upheld. Before the Court of Appeal, reference was evidently made to specific assignments in 1977, on which it was now suggested that the plaintiffs could and should be allowed to rely by way of amendment: see per Bridge LJ at p.143. Bridge LJ referred to Lord Denning MR’s statement in Alfred C. Toepfer v Peter Cremer [1975] 2 LL.R. 118, 125, that the rule against allowing amendments to a claim to plead a subsequently arising claim is one of practice, not law, and can be departed from when the justice of the case required. Lord Denning went on to refer to the everyday practice of giving judgment for mesne profits, interest or loss of earnings arising post-writ. Bridge LJ recognised that “those departures in practice from the absolute rigour of the rule that a plaintiff cannot recover on a cause of action which accrued only after the writ was issued were the daily practice of the court”. But he went on to say that nothing “could possibly lead to the conclusion that it was appropriate to allow a plaintiff to amend so as to introduce a fact giving him a cause of action when at the time when the writ was issued he had no cause of action at all”. 21 In Vax Appliances Ltd. v Hoover plc [1990] RPC 656, the claim was for infringement of a patent relating to a cleaning head. The defendants counter-claimed for revocation of the patent. Later, they sought to amend to seek a declaration that a new cleaning head that they had by now developed did not infringe the patent. This represented a cause of action that did not exist at the date when the original counter-claim was made. Mummery J allowed the amendment. He distinguished Roban Jig as a case where the original claim was “incurably bad”, and pointed out that, since the decision in Eshelby, there had been two changes: first, the doctrine of “relation back” has been disapproved in Liff v Peasley [1980] 1 WLR 781 and Ketteman v Hansel Properties Ltd. [1987] AC 189; second, RSC O.18 r.9 gave a more general power to amend to include in a pleading matters arising since the date of the pleading. I interpose to say that that power was however subject to RSC O.18.r.15(2), precluding a plaintiff from raising in his statement of claim any cause of action which was not mentioned in the writ or did not arise from the same or related facts. Mummery J. pointed out that the matters sought to be introduced were “not a wholly new cause of action”. 22 In Bastone & Firminger Ltd. v Nasima Enterprises (Nigeria) Ltd. [1996] CLC 1,902 Rix J again took a general view of the court’s discretion to allow the addition (within the limitation period) of causes of action based on assignments subsequent to the writ, but was also able to distinguish Roban Jig on the facts. Finally, in Hendry v Chartsearch Ltd. [1998] CLC 1,382, this court was concerned with proceedings begun in April 1994 claiming breach of an agreement for data processing and computer services, entered into with the defendants by a company Interface of which the plaintiff was chairman and with his wife owner. The defendants applied to strike out the claim on the ground that the plaintiff was not party to the agreement. The plaintiff maintained that, shortly before the hearing of the application, he had taken an assignment from his company of its claims against the defendants under the agreement. The defendants resisted leave to amend on the ground that it was not appropriate to add a fresh cause of action, unless the plaintiff had some valid cause of action at the date of the writ or counterclaim. Evans LJ (with whose judgment Henry and Millett LJJ agreed) said that scope of the Rules had changed since Eshelby, and that “in accordance with modern practice generally, the court has a general discretion which should not be restricted by hard-and-fast rules of practice, if not of law, such as that suggested here”. Evans LJ went on to say that the general discretion should be “exercised in accordance with the justice of the case”. He granted leave to amend, saying that the cause of action (breach of contract) remained the same, and that the amendment merely specified the reason why the plaintiff was entitled to pursue it. 23 We are in my view bound by Hendry v . Chartsearch Ltd., which appears to me also to reflect the appropriate modern approach. Further, if and so far as it may be material, I do not regard the present case as one where, as at the date when Moore-Bick J. made his order allowing an amendment, the original claim could be said to be “incurably bad”. The validity or otherwise of the first demand was a properly arguable point, which was only decided after a preliminary issue (issue (i)) leading to full argument first before HHJ Hallgarten and now before this court. 24 I therefore consider that, if the appellants had prior to 20th August 2000, sought permission to amend their particulars of claim to rely on the second demand, the court would have had power to grant and could properly have granted such permission. Although this is a matter which is probably anyway concluded in the appellants’ favour by Moore-Bick J’s order, I also consider that the court would have done so. It would not have been sensible to insist on separate proceedings being begun.”[45]I followed these decisions in Midtown Ltd v City of London Real Property Co Ltd [2005] EWHC 33 (Ch) as follows:- “21 In the light of those documents Mr McGhee QC applied to amend the Kendall Freeman action to claim in the alternative a right to light based on this deed. That would be retrospective if granted to the date of the commencement of the action. At the date of the commencement of the action of course Kendall Freeman would have no such right by the deed as it did not then exist. Notwithstanding that Mr McGhee QC cited a number of authorities (summarised in the Supreme Court Practice at paragraph 17.3.5), which showed that under the Civil Procedure Rules the Courts have allowed an amendment to introduce a cause of action arising out of facts occurring subsequent to the commencement of the proceedings. In Maridive & Oil Service (SAE) –v- CNA Insurance Co. Ltd. [2002] EWCA Civ 369 the Court of Appeal allowed such an amendment. In so doing they followed an earlier Court of Appeal decision Hendry –v- Chartsearch [1998] CLC 1, 382 where Evans LJ had said, that the modern practice was that the court had a general discretion and should not be restricted by hard and fast rules of practice or of law. In the same case, Chadwick LJ (paragraph 54) said:- "There is no absolute rule of law or practice which precludes an amendment to rely on a cause of action which has arisen after the commencement of the proceedings in circumstances where (but for the amendment) the claim would fail. The court has a discretion whether or not to allow the amendment in such a case; a discretion which is to be exercised as justice requires. …" 22 Faced with those observations Mr Morgan QC did not feel able to oppose the amendment, not submitting that there was any prejudice nor any other disadvantage, which could not be dealt with in respect of these amendments. This was a realistic stance given the fact that the Claimants could have issued fresh proceedings based on the grant and then would be in an incontestable position of showing that they had established a right to light. I allowed the amendment given Mr Morgan QC's acceptance of these authorities, which are binding on me, although I have some difficulty in dealing with the cases in the light of the retrospective effect of the amendment. This was a point which Goulding J proceeded on in the case of Halliard Property Co. Ltd. –v- Jack Segal Ltd. [1978] 1 All ER 1219 where he declined an application to amend to rely upon a fresh ground of forfeiture (namely bankruptcy) when no notice under section 146 Law of Property Act 1925 had been served before the commencement of the proceedings. It is fair to say that the arguments proceeded on an assumption that the amendment would not be granted if such a notice was required, because of the retrospective effect of the amendment. This authority used to be in the White Book under the Rules of the Supreme Court, but has since disappeared following the CPR. It was not cited in the case to which I have made reference, but nevertheless it does seem to me that the modern procedure should not allow a technical objection to deprive the court and one of the parties of an opportunity to have a merits based decision on an issue. The objection to the amendment could only have been technicalities and would not have prevented, as I have said the Claimant bringing a fresh action based on the deed. It would be a waste of the parties' time and the court's time to require that procedural technicality to be gone through when the court is already seized of the real issue between the parties, namely the infringement of the claimants' rights.”[46]It seems to me that based on those authorities (which were not cited in the cases relied upon by Mr Davies) I have a discretion under CPR 3 to apply the overriding objective to enable cases to be dealt with justly. In particular based on Chadwick LJ’s observations above it seems to me clear that that power can be used to ensure that any technical objections whether procedurally or a matter of law can be overcome provided it is just so to do. In the present case it is clearly just to accede to an application to amend to perfect the claim by reason of the grant of the letters of administration if that were necessary. The following reasons justify in my view that decision. First the Defendants in the earlier actions as I have set out above did not until 25th April 2012 make any challenge to the jurisdiction of Sheikha Hind to bring any proceedings; they admitted she had. Second significant costs in the actions sought to be struck out will be carried forward in to the fourth action. Third there is no prejudice as the fourth action will still proceed. If I make an order that all of the costs are costs in the case in the Third Action that will be easier. First it will avoid giving the taxing judge the difficult task of identifying which part of the costs are capable of being saved in the Third Action which were not. Second the putting of the costs in the case of course means that Mr Al Baho will if his defence is successful obtain the costs in any event.[47]I therefore reject Mr Al Baho’s claim that the earlier proceedings are bound to fail by reason of the failure of Sheikha Hind to obtain the grant of letter of administration until 2012.[48]Even if Millburn-Snell applied given the difficulties of identifying out the costs it seems to me that the right order following Millburn-Snell would be to direct the entirety of the costs in the struck out actions should form costs in the case in Action 4 in any event.[49]That leaves outstanding the Third Claimant’s applications for judgment under CPR 12/24. In order to consider those applications I must set out the background to the present dispute.

BACKGROUND TO THE PRESENT DISPUTE

[50]The claims brought in these actions arise out of the sale of 2 adjoining flats numbers 61 and 62 Porchester Gate London NW2 (“the Property”) in June 2009.[51]Those properties were registered in the names of 2 Gibraltar companies namely Rosork Holdings Ltd (“Rosork”) and Fairlann Trading Ltd (“Fairlann”) (together the “vendor companies”).[52]The documented consideration for the sale of the Property was £1.9m.[53]The shares in the companies form part of the Estate of Sheikh Salem who had originally purchased them in his own name transferring them to the vendor companies in October and November 1989.[54]Mr Meerza and Mr Mehra are property brokers and estate agents and claim against Mr Al Baho and Sheikha Salem £300,000 commission due to them upon the sale of the Property which they allege was agreed to be paid to them by Mr Al Baho acting also as an agent of Sheikha Salem herself a qualified lawyer. That is disputed and does not form any part of the proceedings under Part 24. In order to dispose of the Property 12 of the 15 heirs of Sheikh Salem executed a Power of Attorney dated 19th March 2008 appointing Mr Pinnell (then a practising English solicitor) to represent them and the Kuwaiti Estate. Relying on that Power of Attorney Mr Pinnell obtained the grant of letters of administration in Gibraltar. As a result of that grant and the Power of Attorney he assumed control of the vendor companies and ultimately directed the sale of the Property to Gulf Heritage Properties Company Ltd (“Gulf”) (the Fifth Defendant) a company controlled by Mr Sajwani (the Sixth Defendant).[55]The claim by Sheikha Hind is that Mr Al Baho received an extra payment of £600,000. Her claim is that the £600,000 was either a bribe made by the Fifth and Sixth Defendants to obtain the Property at a reduced price; alternatively the claim is that Mr Al Baho procured that the Fifth and Sixth Defendants make the payment of £600,000 to him on the basis that it was authorised by the vendors when it was not. The third claim is that the Property was sold at an undervalue and was worth in the order of £3m or not less than £2.5m (Re Amended Particulars of Claim paragraph 58 C (2) (d)).[56]The claim against Mr Al Baho was that he was retained on the sale of the Property to assist by introducing a buyer.[57]As such the Third Claimant contends that he owed the Estate fiduciary duties and in particular a duty not to make a profit at the expense of the Estate nor to take bribes from third parties to secure a favourable sale of the Property to them.[58]The Third Claimant’s case is summarised in the 14th witness statement of Matthew George Jenkins (a partner in the firm of Hughmans) dated 21st September 2015. He sets out a summary of the claim in paragraph 8. The claim is that the Property was sold at a substantial undervalue and that the evidence shows that Mr Al Baho obtained a bribe/secret profit from or on behalf of the purchaser as well as a fee of £47,500 paid from the proceeds at the direction of Mr Pinnell and Sheikha Salem. This bribe (or at least a substantial part of it) found its way in to a development by BCP (a joint venture vehicle wholly or partly owned by Mr Al Baho) of a penthouse flat (“the Penthouse”) at Bryan Court Seymour Place W1.[59]Mr Jenkins provided more detail in paragraphs 22 and following of his 14th witness statement. It is common ground between the parties that Sheikh Salem either owned the Property beneficially or the shares in the vendors beneficially. The difference is that if he was the beneficial owner of the Property it was an immovable situated in England and evolved under English testacy rules. Thus the proceeds of the sale of the Property would have to be dealt with by an English Administrator who would be entitled to bring the claim. If however the Property was beneficially owned by the vendors the proceeds of sale of the Property should have been paid to these companies by a dividend or by distribution and will be subject to Gibraltar law but the proceeds would then be distributed after extraction from the vendors according to the entitlement in Sheikh Salem’s Estate in Sharia/Kuwaiti law. On that analysis the vendors would have the right to bring the claim.[60]These procedural difficulties led to grants being obtained in England and Gibraltar. Irrespective of the latter the position has now been made clear because Sheikha Hind had obtained assignments of any causes of action that the vendors might have in respect of the proceeds. She can thus sue either as assignee of the vendors’ cause of action or as administrator if the Property vested in Sheikh Salem beneficially. It does not matter for the present purposes, which is the position as it is the Third Claimant’s case that Mr Al Baho was retained to sell the Property and owed the above duties as a result.

SALE OF THE PROPERTY

[61]As set out in paragraph 28 of Mr Jenkins’ 14th witness statement contracts were exchanged for sale of the Property to Gulf on 9th June 2009. The sale was subsequently completed on 23rd June 2009. The completion statement shows a gross price for the Property of £1.9m and deductions leaving a net figure of £1,846,999.70. That was slightly varied by deductions including the 2.5% allegedly payable to Mr Al Baho of £47,500. The transfers were executed on the basis of total consideration of £1.9m and Gulf was the registered proprietor with the same considerations being stated in the Register.

OTHER PAYMENTS

[62]Following the service of the defence by Gulf Heritage and Mr Sajwani it was revealed to the Third Claimant for the first time that an additional £300,000 was payable on completion by way of 2 bankers’ drafts made out in UAE Dirhams which were not accounted for either to Rosork or Fairlann. The Third Claimant’s case as I said however is that even taking those figures into account giving a total purchase price of £2.2m there was a substantial undervalue.[63]There are serious complaints about Mr Pinnell’s performance (paragraphs 31 and following of Mr Jenkins’ 14th witness statement but those are for trial). There is evidence to show that Mr Al Baho instructed Foxtons a well known firm of London Estate Agents to market the property at £2,999,999. The Claimants have been provided by a note of Foxtons dated 9th June 2009 which says “EX EA2.5M 8/06/09”[64]Foxtons have explained that this is a reference to the Property and that it means it was “Exchanged Enemy Agent for 2.5 million”. It is the Third Claimant’s case therefore that Mr Al Baho clearly informed Foxtons on the date contracts were exchanged the sale price was £600,000 more than it actually was. CLONE COMPANIES[65]The Third Claimant has discovered that the two bankers’ drafts in the names of Rosork and Fairlann were obtained by Mr Al Baho. He established on 11 August 2009 two English companies with identical names Rosork Holdings Limited (company no: 06987327) (“Rosork UK”) and Fairlann Trading Limited (company no: 06987065) (“Fairlann UK”).[66]He was appointed sole director of Rosork UK and Fairlann UK on incorporation only to resign 17 days later having been replaced by a South African named Evan Reed. On 17 August 2010 both companies were struck off and dissolved.[67]Mr Al Baho was cross examined on 6 February 2014 about these companies and he said they were created for construction work and never traded and never took any money, paid any money or operated a bank account. This was cross examination in the defamation proceedings he had brought for the purposes of establishing his assets.[68]Mr Al Baho opened accounts with HSBC in the names of Rosork Holdings Limited (no: 31502727) and Fairlann (account: 71502751). Sums totalling approximately £300,000 were credited to those accounts and reflect an internal conversion by HSBC of the bankers’ drafts into sterling. The Rosork account was emptied on 28 September 2009 with a payment out to Tareq Ibrahim J Al. The account was closed on 23 October 2009. The Fairlann trading account had various payments made out of it in October (as to which I will make reference to it below). Some were made to BCP, some were by cheques and that account was closed on 31 December 2009. Mr Jenkins has provided an analysis of payments made out of the account of Fairlann UK in paragraph 69 of his 14th witness statement totalling £116,916.00. £5,000.00 is payable to a clerk to a Michael Hartman but the rest are mostly payable to people involved in the construction of a penthouse at Bryan Court. The penthouse was created out of alterations to Bryan Court. Title to it was vested in BCP ultimately as Mr Jenkins sets out in his witness statement. There is unchallenged evidence put forward by Mr Jenkins in paragraph 82 of his witness statement that the creation of building works carried out to create the penthouse were done at the behest of Mr Al Baho. A Mr Jorge Holtz has asserted that he is the beneficial owner of BCP but he has not (save in respect of an email sent to the court on the second day of the hearing) participated in the proceedings. Nor has he instructed BCP to appear in the proceedings. The Third Claimant lodged Unilateral Notices against the title of both the freeholder Bryan Court and the penthouse pending the outcome of the claim. On 22 August 2012 BCP completed the sale of the penthouse for a total price of £1,572,629.00 pursuant to an undertaking dated 17 August 2012 the net proceeds of sale now in the sum £576,628.34 are being held by MA Law pending the outcome these proceedings.[69]The Third Claimant contends that the money held by MA Law represents Mr Al Baho’s share of the proceeds of sale acquired as a result of the use of the monies that he has received from the Fifth and Sixth Defendants and the other amounts up to £600,000.00 in total. They have obtained an agreement that Mr Al Baho entered into with a firm of private investigators that he had retained to whom he owed money. In that agreement Mr Al Baho stated that he had £600,000.00 lodged with MA Law and that he would pay them on release of those funds. This the Third Claimant contends is a reference to the net proceeds of sale of the penthouse held by MA Law and it was in anticipation of the private investigator’s application for summary judgment which was heard in March 2014 and which was unsuccessful.[70]Mr Jenkins also provided witness statements of various other parties showing the involvement of Mr Al Baho in the acquisition and creation of the penthouse and attempts to hide his involvement in it.[71]Finally the Third Claimant refers to an account in the name of Sheikh Salem with HSBC to the balance of £19,645.31. The account was closed on 17 May 2012 and the monies were paid to Mr Al Baho. The Third Claimant’s solicitors took this up with HSBC who informed them that the monies were paid out to Mr Al Baho on the basis of a production of a written authority from the then named administrator i.e. Sheikha Salem. She denies that she gave permission to Mr Al Baho to receive those monies.[72]The Fifth and Sixth Defendants have admitted making the payments of £300,000 by virtue of the bankers’ drafts in the names of Rosork and Fairlann but they contend that they did not know what Mr Al Baho wold do in relation to the clone companies, deny that they were dishonest and deny that they were paying a bribe by reason of the £300,000. The Third Claimant accepts that that is an issue which must go to trial.[73]In paragraph 116 (b) and (f) of Mr Jenkin’s 14th witness statement he identifies sums of £47,500 and £88,339 paid out of the proceeds of sale of the Property. The former is described as commission and no explanation is given as regards the latter save that it was part of the residue of the proceeds attributable to a share to be distributed to Sheikha Hind’s sister Huthama. Mr Baho has not set out in his response (see below) any justification for retaining either of those sums.

SUMMARY OF CLAIMS AGAINST MR AL BAHO

[74]The Third Claimant at this stage contends that she is entitled to judgment against Mr Al Baho in relation to the sum of £300,000.00. In addition she contends that she is entitled to a declaration that the monies currently held by MA Law belong to the Estate by reason of the misconduct of Mr Al Baho as a fiduciary. The monies which he obtained in breach of his fiduciary duties were used to acquire the penthouse and that figure represents the net profit made from the misuse of the Estate’s monies so that he should be liable to account for that money. Alternatively it is held that upon constructive trust for the estate. It is not necessary the Third Claimant contends to establish that the £300,000.00 was obtained by a bribe because Mr Al Baho would be liable by reason of breach of his fiduciary duty in any event.[75]However there is a difference in that if the money is a bribe the Third Claimant can recover that but they can also seek damages for breach of fiduciary duty and do not have to give credit for the bribe against those damages.[76]It seems to me therefore, that if the Third Claimant sought a final judgment for the £300,000.00 at this stage that would inevitably involve them electing to give up the claim as against Mr Al Baho that the monies was received by him as a bribe. There would be no subsequent hearing at trial against Mr Al Baho to establish that it was a bribe because they would have obtained the full sum by way of a final judgment.[77]I raised this with Mr Tager QC and after consideration he accepted that analysis. On that basis he contended that the £300,000.00 should be payable to the Third Claimant as an interim payment in advance of a determination as to whether or not Mr Al Baho was in breach of fiduciary duty or had received the sum as a bribe.[78]It seems to me that in the absence of an explanation from Mr Baho the two sums of £47,500 and £88,339 are properly claimable by the Claimants as interim payments because there is no basis set out and the criteria set out in CPR 25.7 (c) below are clearly satisfied.

MR AL BAHO’S STANCE

[79]The above evidence shows a very strong case against Mr Al Baho. He has not served a defence putting these matters in issue nor has he filed any evidence.[80]In order to avoid liability either for a default of acknowledgment under CPR 12 or in response to an application under CPR 24 he must show a defence which has real prospects of success. I accept of course that the legal burden is on the Applicant but when the Applicant produces credible evidence in support of their application the Respondent becomes subject to an evidential burden proving some real prospect of success or some other reason for trial (SCP paragraph 24.2.5.). The meaning of real prospect of success is set out in SCP in paragraph 24.2.3 and is well-known to me.[81]The Third Claimant however does not now for the reasons I have set out above seek summary judgment. The requirements for an interim payment are set out in CPR 25.7. Under item (C) the court can make an interim payment only if it is satisfied that if the claim went to trial the Claimant will obtain judgment for a substantial amount of money (other than costs) against the Defendant from whom he is seeking an order of interim payment whether or not that Defendant is the only Defendant or one of a number of Defendants to the claim.[82]That is a lower threshold test than that of summary judgment. Had the Third Claimant sought summary judgment for an account in respect of the £300,000.00 or damages for breach of fiduciary duty I would be satisfied that they passed the requisite standard for CPR 24. Given that I am clearly satisfied that they have satisfied sub rule (c) above.[83]Given the way in which the Third Claimant now approaches the application there is no basis now for applying for judgment in default under CPR 12. If I am wrong however, on this analysis I would have granted judgment in default against Mr Al Baho because he has not yet filed an acknowledgment for service. If he had applied to extend time to file it I would have refused that application because no reason has been given for the non filing of the acknowledgement and non attendance nor his failing to deal with the merits. Equally if the matter proceeded under CPR 24 I would have granted the Third Claimant permission to apply for summary judgment despite the fact that no acknowledgement has been filed pursuant to the discretionary powers under CPR 24.4 (1).

THE CLAIM AGAINST BCP

[84]Mr Al Baho has not sought to make any representations as to the entitlement of the monies held by MA Law. Neither has BCP. I am satisfied on the evidence provided by the Third Claimant that valid service of the application against BCP has been effected. I am further satisfied on the material provided by the Third Claimant that it is clear that Mr Holtz knew about the proceedings. That appears from paragraph 3 of his email that he sent to my Clerk on the second day of the hearing at 3.00pm. In that email he suggests the he only found out about the litigation from another litigant (which must be Mr Al Baho over the weekend. I do not accept that. Second he says that his company has not been served with the new claim (i.e. the Third Action). I do not accept that for the reasons I have set out above. In paragraph 3 of the email he refers to the Claimants relying on the advice of the lawyer in Gibraltar a Mr Bullock. His advice was as to service which shows that Mr Holtz must have known about the application because he could have only discerned that by having the papers.[85]I am therefore satisfied that BCP has been validly served was aware of the proceedings and has not filed an acknowledgment of intention to defend. Accordingly the Third Claimant is entitled to judgment against BCP under CPR 12. Alternatively they are entitled to judgment under CPR 24 as I will give them permission to make the present application despite the fact there has been no acknowledgement for service. As there is no other party seeking entitlement as to those proceeds I can see no reason why they should not be paid out to the Third Claimant for the benefit of the Estate.

FORM OF ORDER

[86]The parties should attempt to agree the form of order in the light of my judgment above.[87]In addition they should attempt to agree further directions for the conduct of these actions.

Cited in 6 later judgments