“The money needs to come from my account as I have just spoken to her: [Account Details] Please let me know once you have transferred the amount requested.” [Account Details] Please let me know once you have transferred the amount requested.”
“7.1 The version of the email relied upon by the Defendant has been altered. 7.2 Given that (i) the Defendant’s Mr Chohan was a party to the email, and (ii) the effect of the alteration is to render a document which in its original form is damaging to the Defendant’s case less damaging to that case, the obvious inference is that the email was altered by or on behalf of the Defendant and that knowledge of the alteration is to be attributed to the Defendant. 7.3 The Defendant’s actions in knowingly putting forward an altered email in support of it’s position are dishonest, and amount to an abuse of process, with the consequence that the Defence should be struck out.”
“An Order pursuant to CPR42.3 that Solomon Taylor & Shaw has ceased to act for the Claimant and that the name of Solomon Taylor & Shaw be removed from the Court record, because the Claimant has failed to give instructions for over 4 weeks, to pay fees and disbursements and is no longer responding to telephone calls or emails. The trial is due to begin on March 22nd.”
“[11.] ……. Without the defendant’s witness evidence being challenged I have no reason to doubt that the defendant’s witnesses were honest witnesses doing their best to assist the court. [12.] Central to the claimant’s case is its version of the disputed email dated15 December 2017 . On balance, I find that version of the email is not genuine and was manipulated. I make that finding for the following primary reasons. [13.] Firstly, that is the conclusion reached by the defendant’s expert, Mr Rashid, who has over thirty years of expertise in the software and technology industry. His expertise spans the design integration and implementation of comprehensive solutions, and design and development of software products. He holds a Bachelor’s degree in Computer Science and a Master’s degree in Scientific computing. I find that he is a competent and respectable expert. The opinion he expresses is both reasonable and logical. Indeed, I would say that his report overall is an impressive document and the conclusions he reaches, which I accept, are based on comprehensive inspections and investigations. He gives the following detailed reasons for reaching the conclusion that he does:- “All variations of the Ventures email have one or more issues with the coding of the message Body and/or Attachment. All variation of the Ventures email contain lines exceeding 78 characters in Plaintext or HTML. Yet all these emails do not fully implement the IETF, RFC, 2822 and 2821 standards regarding long lines in emails. These standards dictate that long lines in excess of 78 characters should be terminated at 75 characters with an equal sign (=) present on the 76th character position, followed by a CRLF (Carriage-Return-Linefeed). The remaining part of the line should be presented on the following line. Some of these variations of the email contain Plaintext where the user, and not the email system, has manually inserted a new line (CRLF) in the incorrect place. Test Document [999] provides a baseline of what an email’s Plaintext and HTML body should look like if it had originated from LDS’ Microsoft 365 email system. Document [999] contains the correct implementation of the RFC 2822 and RFC 2821 standards regarding long lines. No variation of the Ventures email matches both the Plaintext and HTML formatting of Document [999]. The disputed email, as provided by Ventures’ solicitors on10 November 2020 is malformed and corrupt. This corruption cannot originate within the email system. The image of the email, as provided by Ventures solicitors on10 November 2020 has been altered from the original source. The disputed email Document found within the Inbox email folder of karam@centurion.co.uk is located in the wrong position. It should exist surrounded by existing emails dated14 December 2017 and19 December 2017 . Instead, this email is located between emails dated18 September 2020 and4 July 2021 . Seventeen months of emails are missing from the “Sent” email folder of karam@centurion.co.uk. This missing period between25 July 2016 to7 January 2018 overlaps with the time-period of the disputed email. From this missing period, we cannot see how the original disputed email received on17 December 2017 was forwarded or discussed internally. Twenty-three months of email relating to “Chohan”
“It is, I consider, important to remember that section 51(1) of the Act of 1981 is concerned with the jurisdiction of the court to make orders as to costs. Furthermore, it is not to be forgotten that the jurisdiction conferred by the subsection is expressed to be subject to rules of court, as was the power conferred by section 5 of the Act of 1890. It is therefore open to the rule-making authority (now the Supreme Court Rule Committee) to make rules which control the exercise of the court's jurisdiction under section 51(1). In these circumstances, it is not surprising to find the jurisdiction conferred under section 51(1), like its predecessors, to be expressed in wide terms. The subsection simply provides that "the court shall have full power to determine by whom . . . the costs are to be paid." Such a provision is consistent with a policy under which jurisdiction to exercise the relevant discretionary power is expressed in wide terms, thus ensuring that the court has, so far as possible, freedom of action, leaving it to the rule-making authority to control the exercise of discretion (if it thinks it right to do so) by the making of rules of court, and to the appellate courts to a establish principles upon which the discretionary power may, within the framework of the statute and the applicable rules of court, be exercised. Such a policy appears to me, I must confess, to be entirely sensible. It comes therefore as something of a surprise to discover that it has been suggested that any limitation should be held to be implied into the statutory provision which confers the relevant jurisdiction.”
“In my judgment the following are material considerations to be taken into account, although I do not suggest that there may not be others which are relevant. (1) An order for the payment of costs by a non-party will always be exceptional: see per Lord Goff in Aiden Shipping Co. Ltd. v. Interbulk Ltd. [1986] A.C. 965, 980F. The judge should treat any application for such an order with considerable caution. (2) It will be even more exceptional for an order for the payment of costs to be made against a non-party, where the applicant has a cause of action against the non-party and could have joined him as a party to the original proceedings. Joinder as a party to the proceedings gives the person concerned all the protection conferred by the rules, as to e.g. the framing of the issues by pleadings; discovery of documents and the opportunity to pay into court or to make a Calderbank offer (Calderbank v. Calderbank [1976] Fam. 93); and the knowledge of what the issues are before giving evidence. (3) Even if the applicant can provide a good reason for not joining the non-party against whom he has a valid cause of action, he should warn the non-party at the earliest opportunity of the possibility that he may seek to apply for costs against him. At the very least this will give the non-party an opportunity to apply to be joined as a party to the action under Ord. 15, r. 6(2)(b)(i) or (ii). Principles (2) and (3) require no further justification on my part; they are an obvious application of the basic principles of natural justice. (4) An application for payment of costs by a non-party should normally be determined by the trial judge: see Bahai v. Rashidian [1985] 1 W.L.R. 1337. (5) The fact that the trial judge may in the course of his judgment in the action have expressed views on the conduct of the non-party constitutes neither bias nor the appearance of bias. Bias is the antithesis of the proper exercise of a judicial function: see Bahai v. Rashidian [1985] 1 W.L.R. 1337, 1342H, 1346F. (6) The procedure for the determination of costs is a summary procedure, not necessarily subject to all the rules that would apply in an action. Thus, subject to any relevant statutory exceptions, judicial findings are inadmissible as evidence of the facts upon which they were based in proceedings between one of the parties to the original proceedings and a stranger: see Hollington v. F. Hewthorn & Co. Ltd. [1943] K.B. 587; Cross on Evidence, 7th ed. (1990), pp. 100–101. Yet in the summary procedure for the determination of the liability of a solicitor to pay the costs of an action to which he was not a party, the judge's findings of fact may be admissible: see Brendon v. Spiro [1938] 1 K.B. 176, 192, cited with approval by this court in Bahai v. Rashidian [1985] 1 W.L.R. 1337 1343D, 1345H. This departure from basic principles can only be justified if the connection of the non-party with the original proceedings was so close that he will not suffer any injustice by allowing this exception to the general rule. (7) Again, the normal rule is that witnesses in either civil or criminal proceedings enjoy immunity from any form of civil action in respect of evidence given during those proceedings. One reason for this immunity is so that witnesses may give their evidence fearlessly: see Palmer v. Durnford Ford (a firm) [1992] Q.B. 483, 487. In so far as the evidence of a witness in proceedings may lead to an application for the costs of those proceedings against him or his company, it introduces yet another exception to a valuable general principle. (8) The fact that an employee, or even a director or the managing director, of a company gives evidence in an action does not normally mean that the company is taking part in that action, in so far as that is an allegation relied upon by the party who applies for an order for costs against a non-party company: see Gleeson v. J. Wippell & Co. Ltd. [1977] 1 W.L.R. 510, 513. (9) The judge should be alert to the possibility that an application against a non-party is motivated by resentment of an inability to obtain an effective order for costs against a legally aided litigant. The courts are well aware of the financial difficulties faced by parties who are facing legally aided litigants at first instance, where the opportunity of a claim against the Legal Aid Board undersection 18 of the Legal Aid Act 1988 is very limited.Nevertheless the Civil Legal Aid (General) Regulations 1989 (S.I. 1989 No. 339/89), and in particular regulations 67, 69, and 70, lay down conditions designed to ensure that there is no abuse of legal aid by a legally assisted person and these are designed to protect the other party to the litigation as well as the Legal Aid Fund. The court will be very reluctant to infer that solicitors to a legally aided party have failed to discharge their duties under the regulations — see Orchard v. South[1993] 3 WLR 830 at 843 Eastern Electricity Board [1987] Q.B. 565 — and in my judgment this principle extends to a reluctance to infer that any maintenance by a non-party has occurred.”
“First, we think it is clear that all three members of the court assumed that the procedure to be adopted for deciding whether a third party should bear all or part of the costs of the litigation should be summary in nature, in the sense that the judge would make an order based on the evidence given and the facts found at trial, together with his assessment of the behaviour of those involved in the proceedings. Second, in order to justify the adoption of a summary procedure the third party must have had a close connection of some kind with the proceedings. Staughton and Balcombe LJJ both emphasised that the court should not make an order for costs against a third party unless it is just and fair that he should be bound by the evidence given at trial and the judge's findings of fact. Whether that is so in any given case will depend on the nature and degree of his connection with the proceedings.”
“(2) It will be even more exceptional for an order for the payment of costs to be made against a non-party, where the applicant has a cause of action against the non-party and could have joined him as a party to the original proceedings. Joinder as a party to the proceedings gives the person concerned all the protection conferred by the rules, as to e.g. the framing of the issues by pleadings; discovery of documents and the opportunity to pay into court or to make a Calderbank offer (Calderbank v. Calderbank [1976] Fam. 93); and the knowledge of what the issues are before giving evidence.”
“[21] When asked why notice was not given directly to Mr Khan and earlier, Mr Laughland said it was so as not to be intimidatory. But indirect notice would be just as intimidatory as direct notice, if not more so because of its insidious nature. And whilst there are cases where the giving of notice is not necessary or can fairly be said to be unjustly intimidatory, in a case where the intention is to allege fair and square that a man is a liar, a perjurer, and a dishonest conspirator and fraudster, there is every reason in fairness to warn him (Balcombe LJ's third proposition).”
“A number of the decided cases have sought to catalogue the main principles governing the proper exercise of this discretion and their Lordships, rather than undertake an exhaustive further survey of the many relevant cases, would seek to summarise the position as follows: (1) Although costs orders against non-parties are to be regarded as 'exceptional', exceptional in this context means no more than outside the ordinary run of cases where parties pursue or defend claims for their own benefit and at their own expense. The ultimate question in any such 'exceptional' case is whether in all the circumstances it is just to make the order. It must be recognised that this is inevitably to some extent a fact-specific jurisdiction and that there will often be a number of different considerations in play, some militating in favour of an order, some against.”
“(d) The findings in the primary claim are not admissible against Mr Khan pursuant to Balcombe LJ's sixth point. Where a non-party effectively has controlled the primary litigation (as for instance in Globe or Dymocks) it is, in the language of estoppel, a “privy” and will be bound by the result. But that is not the case here. One cannot say that Mr Khan had such a close connection or “proximity” (to use Morritt LJ's word in Globe) with the primary claim that he must be bound by the result. He neither funded it nor controlled it – it was not his claim even though, if the findings are correct, he stood to benefit from it. True it is that in the primary judgment Mr Khan was found to be a co-conspirator and a liar but neither of these matters taken separately or together are enough to bind him. Mr Khan must be free to contend that he was not a conspirator and adduce evidence to support his own defence.”
“In paragraph 7.3 of the Reply dated23 December 2020 , your clients made an allegation of dishonesty against our clients concerning the disputed e-mail from15 December 2017 . As you are aware in Yuanda (UK) Co Lid v Multiplex Construction Europe Ltdand another[2020] EWHC 468 (TCC) at [31] and [32] the Court dealt with the specific rules concerning fraud, which must be pleaded. A claim alleging fraud may not be made unless the following matters are satisfied: (1) There must have been some material fact that ‘tilts the balance and justifies an inference of dishonesty’: JSC Bank of Moscow v Kekhman[2015] EWHC 3073 (Comm) ,[2015] All ER (D) 273 (Oct) at [20]) per Flaux J (as he then was). (2) The Claimant must have given clear instructions to plead a claim in fraud and there must have been ‘reasonably credible material’ to support the allegation: Medcalf v Mardell[2002] UKHL 27 ,[2002] 3 All ER 721 ,[2003] 1AC 120 (at [22]) per Lord Bingham. (3) The claimant must be able to plead primary facts (‘particulars’) from which a claim involving dishonesty may be proven, as the court will not allow a party to prove a claim in fraud other than on the basis of those primary facts: Three Rivers DC v Bank of England[2000] 3 All ER 1 ,[2003] 2 AC 1 (at [55], [160], [186]). Further in paragraph 32 of Yuanda (UK) it made reference to the specific provisions both in the Bar Standards Board Handbook and the Solicitors Regulation Authority Code of Conduct which govern the professional obligations of both barristers and solicitors so far as pleading fraud is concerned. These substantially reproduce the guidance given in Medcalf. We refer to the expert’s report of Mr Rashid on behalf of our clients which sets out in detail why your client’s version of the e-mail has been fabricated. Your clients expert appeared to have no real answer to the points raised at the Zoom meeting on 17 December between the experts. Since then, he has chosen to disregard his duties as an expert by his failure to agreeing a joint statement pursuant to paragraph 3 of the Order of Judge Murch dated 13 May. Our clients rights are entirely reserved on this point. Our position is that there was no credible material for the allegation of dishonesty being made against our clients and in breach of the requirements set out above. It is difficult to comprehend why your firm and Counsel could make the serious allegation of dishonesty in accordance with your professional obligations. If the dishonesty allegation is not withdrawn on or before the Pre- Trial review on 4 February, our clients reserve the right to seek indemnity costs against your clients and/or an application for costs unders51 of the Supreme Court Act 1981 against Naveed and Khuram Afzal of your clients if the Claimant does not meet its obligation to pay any cost orders. We trust that this will not be necessary.”
“UPON the Pre-Trial Review AND UPON the Defendant’s Application dated28 January 2022 AND UPON hearing Counsel for the Defendant and the Claimant neither attending nor being represented. AND UPON the Court being satisfied that the Claimant was aware of this PTR and no explanation has been received as to why the Claimant is not in attendance. AND UPON the Court noting that should the Claimant fail to attend trial, the Claimant is at risk of its claim being struck out and any defence to counterclaim being struck our pursuant toCPR 39.3 . IT IS ORDERED: 1. The Claimant having failed to give instructions to their expert to prepare a joint statement as required by the Order of DJ Murch dated13 May 2021 , the Claimant does not have permission to adduce expert evidence at trial in the field of forensic computer science. 2. The Claimant shall, by 4pm on18 February 2022 , notify the Defendant’s solicitors as to whether they require the Defendant’s expert to attend trial to be cross-examined on his report. In the event that the Claimant fails to so notify the Defendant’s solicitors, the Defendant’s expert shall not be required to attend trial. If the Claimant requires the Defendant’s expert to attend trial, then the Defendant’s expert shall attend remotely. 3. By 4pm on11 February 2021 , the Claimant shall provide to the Defendant’s solicitors a copy of the lease which is referred to in paragraph 29(2) of Mr Muhammad Khuram Afzal’s statement dated10 September 2021 and / or paragraph 39 of Naveed Afzal’s statement dated10 September 2021 . 4. The Defendant has permission to file and serve a Counterclaim in the form attached to the witness statement of Mohammed Afzal dated28 January 2022 by 4pm on8 February 2022 . The Defendant shall pay the relevant fee for the Counterclaim by the same date. 5. The Claimant may file and serve a Defence to the Counterclaim by 4pm on15 February 2022 , but if the Claimant chooses not to do so, the Claimant shall be deemed to defend the Counterclaim on the basis of the facts and matters pleaded in the Particulars of Claim. 6. The Order of DJ Murch dated13 May 2021 is amended as follows: 6.1. Paragraph 16 is amended such that, at least 3 weeks before trial, it shall be the Defendant who must serve on the Claimant a trial bundle comprising fully functioning, indexed, paginated and externally identified lever arch files not exceeding 300 pages each. 6.2. Paragraph 17 is amended such that, at least 7 clear days before the date fixed for trial, the Defendant must file the trial bundle with the Court. 7. The Defendant’s solicitors shall file and serve an amended trial plan by 4pm on11 February 2022 . The trial plan shall indicate that 8 people will be in attendance at the trial. 8. This Order shall be served by the Court. Upon service by the Court, the Defendant’s solicitors shall promptly send a copy of this Order to the email addresses that it holds for Mr Naveed Afzal and Mr Muhammad Khuram Shahzad Afzal. The Defendant’s solicitors shall also send a copy of this Order to the Claimant at 1 and 1A Bore Street, Staffordshire, WS13 6SJ. 9. Costs in the Case.” IT IS ORDERED: 6.1. Paragraph 16 is amended such that, at least 3 weeks before trial, it shall be the Defendant who must serve on the Claimant a trial bundle comprising fully functioning, indexed, paginated and externally identified lever arch files not exceeding 300 pages each. 6.2. Paragraph 17 is amended such that, at least 7 clear days before the date fixed for trial, the Defendant must file the trial bundle with the Court. order: “UPON the Trial of the Claimant’s Claim and Defendant’s Counterclaim AND UPON the Defendant’s application for relief from sanction dated21 March 2022 AND UPON hearing from Counsel for the Defendant and the Claimant neither appearing nor being represented IT IS ORDERED: 1. The Defendant is granted relief from sanction in relation to the form of the statement of truth on the Defendant’s expert report. 2. The Claim is dismissed. 3. Judgment for the Defendant on the Counterclaim. Accordingly, it is declared that: 3.1. The Claimant occupied the Premises at 1 and 1A Bore Street, Staffordshire WS13 6SJ (“the Premises”) by virtue of a contractual licence granted by the Defendant to the Claimant. 3.2. The Claimant’s right to occupy the Premises has been terminated by the termination of the Franchise Agreement. 4. The Claimant must vacate the Premises no later than 4pm on19 April 2022 . 5. The Claimant shall pay the Defendant’s costs of the Claim and the Counterclaim to be the subject of detailed assessment on the indemnity basis if not agreed. 6. The Claimant shall make an interim payment on account of the Defendant’s costs in the sum of£79,380 . Such payment to be made by 4pm on5 April 2022 .” AND UPON the Defendant’s application for relief from sanction dated21 March 2022 IT IS ORDERED: 3.1. The Claimant occupied the Premises at 1 and 1A Bore Street, Staffordshire WS13 6SJ (“the Premises”) by virtue of a contractual licence granted by the Defendant to the Claimant. 3.2. The Claimant’s right to occupy the Premises has been terminated by the termination of the Franchise Agreement. order: “The Controlling/Funding Director or Shareholder of an Insolvent Company [29] There have been many authorities dealing with the potential costs liability under s.51 of a director or shareholder of an insolvent company who controls and funds the litigation. Although there are plenty of warnings against the over-citation of authority in a s.51 case (because it is, after all, a matter of broad discretion), in the light of the issues that have arisen on this appeal, I fear that it is necessary to refer to some of the cases, in chronological order, to show the development of the law on this topic. The compensation is that, in my view, an analysis of the caselaw reveals a clear answer to the questions of principle which arise here. ………. Summary as to Directors and Shareholders [To avoid repetition, I will refer only to a director in paras [40] and [41] below, but that is a shorthand intended to encompass both directors and shareholders.] [40] Without in any way suggesting that these authorities give rise to a sort of mandatory checklist applicable to a company director or shareholder against whom a s.51 order is sought, I consider that the relevant guidance can usefully be summarised in this way: (a) An order against a non-party is exceptional and it will only be made if it is just to do so in all the circumstances of the case (Gardiner, Dymocks, Threlfall). (b) The touchstone is whether, despite not being a party to the litigation, the director can fairly be described as “the real party to the litigation” (Dymocks, Goodwood, Threlfall). (c) In the case of an insolvent company involved in litigation which has resulted in a costs liability that the company cannot pay, a director of that company may be made the subject of such an order. Although such instances will necessarily be rare (Taylor v Pace), s 51 orders may be made to avoid the injustice of an individual director hiding behind a corporate identity, so as to engage in risk-free litigation for his own purposes (North West Holdings). Such an order does not impinge on the principle of limited liability (Dymocks, Goodwood, Threlfall). (d) In order to assess whether the director was the real party to the litigation, the court may look to see if the director controlled or funded the company's pursuit or defence of the litigation. But what will probably matter most in such a situation is whether it can be said that the individual director was seeking to benefit personally from the litigation. If the proceedings were pursued for the benefit of the company, then usually the company is the real party (Metalloy). But if the company's stance was dictated by the real or perceived benefit to the individual director (whether financial, reputational or otherwise), then it might be said that the director, not the company, was the “real party”, and could justly be made the subject of a s 51 order (North West Holdings, Dymocks, Goodwood). (e) In this way, matters such as the control and/or funding of the litigation, and particularly the alleged personal benefit to the director of so doing, are helpful indicia as to whether or not a s 51 order would be just. But they remain merely elements of the guidance given by the authorities, not a checklist that needs to be completed in every case (Systemcare). (f) If the litigation was pursued or maintained for the benefit of the company, then common sense dictates that a party seeking a non-party costs order against the director will need to show some other reason why it is just to make such an order. That will commonly be some form of impropriety or bad faith on the part of the director in connection with the litigation (Symphony, Gardiner, Goodwood, Threlfall). (g) Such impropriety or bad faith will need to be of a serious nature (Gardiner, Threlfall) and, I would suggest, would ordinarily have to be causatively linked to the applicant unnecessarily incurring costs in the litigation. [41] Therefore, without being in any way prescriptive, the reality in practice is that, in order to persuade a court to make a non-party costs order against a controlling/funding director, the applicant will usually need to establish, either that the director was seeking to benefit personally from the company's pursuit of or stance in the litigation, or that he or she was guilty of impropriety or bad faith. Without one or the other in a case involving a director, it will be very difficult to persuade the court that a s 51 order is just. Mr Benson identified no authority in which a s 51 order was made against the director of a company in the absence of either personal benefit or bad faith/impropriety. Conversely, there is no practice or principle that requires both individual benefit and bad faith/impropriety on the part of the director in order to justify a non-party costs order. Depending on the facts, as the authorities show, one or the other will often suffice.”