Choudhury & Ors v Ahmed

J U D G M E N T

1. LORD JUSTICE CLARKE: This is an appeal brought, with the permission of Dyson LJ, against an order made by His Honour Judge Medawar QC on 8th September 2004 after the trial of an action by which he dismissed the claimants' claim and ordered the claimants to pay the defendant's costs.

2. The claimants' claim at the trial was for £55,000 in respect of what was said to be unpaid rent. The claim arose out of a dispute in respect of the management and letting of an Indian restaurant known as the "Haweli of Epsom" Indian takeaway at 7 Pound Lane, Epsom. We have been told this morning that it is in truth a takeaway rather than a restaurant. Moreover, although it is called an "Indian restaurant", all parties are in fact of Bangladeshi or East Pakistan origin.

3. The judge commented at the outset of his judgment on the lack of documentary material and formality in their business dealings. He said this:

"These people have, for the most part, conducted themselves in the same way as many from Bangladesh do in a less formal way than might be expected as being usual amongst business people in this country because of the degree of trust that they have in each other as fellow Muslims but more significantly fellow countrymen and even more significantly coming from Sellitt, and therefore they conduct their affairs on this occasion, as on many others, in a way that starts off, as I say, with trust and a lack of formality. In this case there has been almost no formality. There are few, if any, relevant documents about the setting up of the arrangement that led to the defendant Fahim Ahmed running a restaurant at 7 Pound Lane, Epsom and in the running of that restaurant he was paying rent to the brothers. There were varying stages, varying partnerships between the brothers and others including this defendant."

It is right to say that although there was undoubtedly a lack of formality, there are a number of statements, including bank documents, from which certain inferences can be drawn.

4. The only witness who gave oral evidence on behalf of the claimants was Monzu Zzaman Choudhury ("Monzu") and only two witnesses gave oral evidence on behalf of the defendants. The first was the defendant himself, Fahim Ahmed, and the second was his accountant, Sheik Rahman. The defendant's case was that he did not owe any rent to the claimants because it had all been paid.

5. The basic reason why the judge dismissed the claim was that he did not believe the evidence of Monzu but did believe that of the defendant. He said this in paragraph 9 of his judgment:

"Essentially, I have to weigh up who is telling the truth here and I regret to say that I am wholly unable to accept Monzu Choudhury's evidence. Internally in the way he gave his evidence it was neither satisfactory nor complete. I did not believe him. I believe the defendant and accept his evidence. Where the evidence differed between them I preferred the evidence of the defendant. I have no doubt that, he being younger, coming from the same area as the three brothers, I believe him when he says he looked upon the other brothers as his brothers, not literally, but his brothers, that he trusted them, that he was in a more junior business capacity to them. At the beginning of all this he was probably only in his early twenties, he says, when he came here. They had been here longer, certainly the second claimant had been educated here from the age of thirteen and they were probably much more familiar with the business scene in this country than Fahim Ahmed was coming from Bangladesh at a later time."

6. An important factor which the judge had in mind in rejecting the evidence of Monzu was that the claimant's case had not been entirely consistent throughout. It was common ground at the trial, as I understand it, that a tenancy was granted to the defendant by the claimants in about July 1996 at the weekly rent of £300, and that in March 1995 the weekly rent was increased to £400.

7. The claimants' first letter before action, dated 5th August 2003, claimed £36,900 as a management fee based upon an alleged management agreement made in 1995 at a weekly management fee of £400. In a subsequent letter dated 28th October 2003, the claimants' claim was put at £15,400 as outstanding fees. In December 2003, which was some time after the defendant's solicitors had made a number of observations about the quantum of the claim, the original particulars of claim were served and they put the claim at £15,400. The particulars of claim were subsequently amended, increasing the claim to £55,000 based upon a finalised schedule. That was about a month before the trial on 5th August 2004.

8. There were two central issues at the trial: (1) whether the rent was reduced by agreement to £200 on about 7th June 2001; and (2) whether it was agreed that the sum of £22,100, represented by a total of twelve cheques identified in Attachment 3 to Sheik Rahman's statement, were to be credited against the rent. The defendant's case was that the answer to both of those questions was "Yes" and that there was accordingly nothing due to the claimants. It is not, as I understand it, in dispute that if the answer to those questions is indeed "Yes", it would follow that no rent was due.

9. I will return to those issues in a moment, but should first consider the ground of appeal upon which Dyson LJ was persuaded to give permission to appeal. It is right to say that although at the end of his short judgment Dyson LJ said that he did not intend to deny the claimants the opportunity to advance other grounds of appeal, in the event the only ground of appeal as such which has been advanced before us by Mr Morgan today is the ground upon which permission was expressly granted.

10. As I have already said, of the claimants only Monzu gave evidence. The claimants at no stage sought to adduce evidence from Nasru Zzaman Choudhury ("Nasru"), nor was any attempt initially made to adduce evidence from Masru Zzaman Choudhury ("Masru"). However, after the evidence of both parties had been given, counsel for the claimants applied to the judge for permission to call Masru to give evidence. That application was refused.

11. Mr Morgan, who did not appear at the trial, submits that the judge should have granted the application. He submits that the judge's refusal to do so was wrong in principle and/or a plainly wrong exercise of his discretion, and that as a result the trial was unfair and contrary to Article 6 of the European Convention on Human Rights. He submits that the court should accordingly set aside the judgment and order a new trial, especially since, he submits, there are strong points to be made on behalf of the claimants on the merits.

12. The application for permission to call Masru was put to the judge on the express footing that the claimants only wished to ask Masru four questions, directed to the issue of whether direct payments had been made to Masru. It was submitted that the defendant had not given notice of his case that cheques had been paid to Masru either in his pleading or in his witness statement but only when he gave evidence. Mr Morgan submits that the judge dealt with the application in a peremptory and unfair way. It was this point that Dyson LJ thought gave rise to a real prospect of success on appeal. Dyson LJ said this in paragraphs 5 and 6 of his judgment:

"(5) The principal ground of appeal that is raised is that the learned judge should have acceded to the application to permit the first claimant to give evidence dealing with the alleged direct payments. In my view, the complaint that the judge was unfair in the way that he dealt with the application has a real prospect of success. It seems to me arguable at least that it was highly unsatisfactory that the claimants should in effect be taken by ambush. The allegation that the defendant had made substantial payments to the first claimant in satisfaction of substantial arrears of rent in order to enable him to meet his gambling debts is something which should undoubtedly have been pleaded by the defendant and, even if not pleaded, it should undoubtedly have been mentioned in his witness statement. It appears in neither document. Since the evidence that was given by the defendant on this topic went to the heart of part of his defence, it seems to me, at any rate arguably, that the judge should have given the claimants the opportunity to adduce the evidence in order to deal with that issue.

(6) I find it difficult to understand why the judge rejected the application. It would not have involved an adjournment of the hearing. The first claimant was present. Counsel only wished to ask four questions. I accordingly propose to grant permission to appeal."

13. Dyson LJ had also said in paragraph 4 of his judgment that the judge refused the application in what appeared to him to be "summary terms". He was there referring to these exchanges on pages 115 and 116 of the transcript. As I understand it, these exchanges contain the whole of the application made by Mr Glover on behalf of the claimants and the judge's ruling:

"MR GLOVER : Your Honour, the evidence is closed on behalf of my learned friend and, your Honour, I have an unusual but an application that can nonetheless be made, and it's an application to take evidence out of order. It is an application for you to hear evidence from Mr Masru on the limited points as to whether or not -- literally four questions -- whether or not he did ever receive cheques from the brother as alleged by him now. Now, of course, your Honour, my learned friend has indicated whilst he accepts the principle, he is, of course, going to oppose the application.

JUDGE MEDAWAR: All this should have been done a long time ago.

MR GLOVER: Your --

JUDGE MEDAWAR: You had ample opportunity after the short adjournment to have sought leave to call a witness whose --

MR GLOVER: Your Honour.

JUDGE MEDAWAR: -- whose -- from whom you could have extracted a statement had you wished to do so.

MR GLOVER: Your Honour.

JUDGE MEDAWAR: You didn't choose to do so, you've considered the case -- continued the case without it and I'm not proposing to admit (Inaudible) [sic] at this juncture.

MR GLOVER : Your Honour, if I could, maybe, complete my submissions on the application, your Honour, in case it is relevant for a later date.

JUDGE MEDAWAR: Well, unless you've got some other matter to raise the answer is I've already ruled upon it and you can't.

MR GLOVER: Well, your Honour, I'll simply say this then, your Honour, keeping it as short as I can with an eye on the clock. Those instructing me have been devilling as hard as they can to get clear answers from the defendant as to what he says about cheques, who he says they were paid to and indeed to produce a cheque so that we can trace the payees and give some clear evidence on those points. It's only today that we've received a limited number of those cheques with the payees on them, none of whom seem to be directly to Masru notwithstanding what's said in the accountant's report. Having now heard the evidence of Mr Ahmed, which in my respectful submission should have properly been contained within his witness statement being core and central to the issues before the court, having only now --

JUDGE MEDAWAR: Mr Glover, you're not saying anything else, you're merely repeating yourself in --

MR GLOVER: Your Honour.

JUDGE MEDAWAR : -- different ways.

MR GLOVER: I'd simply say that now having heard him live the allegations that have been raised for the first time against Mr Masru he should have a right of reply to those issues alone.

JUDGE MEDAWAR: Much of those matters are -- if not most of them arose out of your cross-examination. The way you chose to cross-examine him, that was the result of what he had to say. I'm not admitting any other evidence now."

The judge said that it had gone on far too long already.

14. The judge then heard submissions, first briefly from Mr Jones on behalf of the defendant and then from Mr Glover at greater length on behalf of the claimants. It was clear that the judge was, in principle, with Mr Jones but he heard Mr Glover's submissions almost entirely without interruption. He then gave judgment for the defendant on the basis to which I have already referred; namely that the issue was one of fact depending on whether he believed Monzu or the defendant, and he believed the defendant.

15. It is right to say that when the matter was before Dyson LJ, the claimants were represented by Masru in person and the defendant was not represented. Today we have had the benefit of the assistance of counsel on both sides: Mr Morgan on behalf of the claimants who, as I said, was not present at the trial, and Mr Jones on behalf of the defendant, who was present at the trial.

16. Mr Jones submits that when the judge's refusal to permit the claimants to call Masru is put in its context, it can be seen that it was an entirely proper decision well within the discretion of the judge, that it was not wrong in principle but was a reasonable case management decision and that it was not one with which this court can properly interfere. Moreover, he submits that there was nothing unfair about the trial.

17. As can be seen from the above account, the evidence which has given rise to the ground of appeal is the defendant's evidence that the cheques amounting to some £22,100 were used by agreement to set off against the rent. In these circumstances, in order to consider whether the judge acted fairly in reaching the decision he did and whether his decision was within the proper exercise of his discretion, it is necessary to see how the matter developed.

18. In the statements of case the defendant expressly pleaded the agreement varying the rent from £400 to £200 in June 2001. He did not expressly refer to the cheques in his defence. He merely asserted that all rent due had been paid. In the defendant's statement, which was dated 10th August 2004, he set out in paragraph 28 the amount of rent which he said that he paid, amounting to some £119,200. In paragraph 29 he said that perusal of his bank statements would show that he had made rental payments amounting to £119,711. That included miscellaneous payments, payments made by him to various third parties for, and at the request of, the claimants on the understanding that such payments were to be treated as being on account of his rent.

19. Although he does not expressly refer to the cheques amounting to £22,100 to which I have referred, that was contended to be a reference to those cheques. That is clear from a further witness statement disclosed on behalf of the defendant; namely that of Sheik Rahman, the defendant's accountant. That statement was dated 23rd August 2004. In paragraph 8 of his statement he explained that there were 13 items set out in Attachment 3 to his statement which were described as "rent advance". Attachment 3 to the statement includes two schedules which show cheques amounting to £22,700 paid on various dates. In the schedule they are described as paid to the landlord. The schedules show that there were 13 cheques making the total of £22,700. It was subsequently accepted that one of the cheques was not a payment in respect of rent so that the court was concerned with 12 cheques, amounting in total to £22,100.

20. In the memo column of the first schedule, Masru is referred to in relation to each of those cheques whereas in the memo column of the second schedule, some of those cheques simply say "rent" and do not refer to Masru. However, to my mind there is no inconsistency between them.

21. The only statement produced on behalf of the claimants before the trial was the statement of Monzu, which was dated 9th August (although that was, of course, before Sheik Rahman's statement). In paragraph 27 of Monzu's statement he refers to a list of 13 payments described as "rent advance" on a document which had been disclosed to the defendant on discovery and appears, so far as I can tell, to be substantially the same document as the attachments to Sheik Rahman's statement to which I have referred. In paragraph 28 Monzu said:

"I do not know if the defendant is seeking to show that these cheques, for example, represented payments to us in respect of rent. This is denied. At the time, my brothers and I were running another Haweli outlet in Sutton. For some time, we had been unable to process credit card payments and we used to take a bundle of these periodically to the defendant at Haweli of Epsom, asking him to process them through his account. He then made payments out to us from his account, although I cannot remember for certain whether this was in cash or by cheque."

It is clear from that statement, which was expressly made on behalf of himself and his two brothers, the co-claimants, that he was aware that the defendant was likely to say that those cheques amounted to part payment of the rent. On the morning of the trial, the defendant produced the originals of six cheques. Those cheques were put in evidence and have been produced to us.

22. Mr Morgan has today produced a schedule in relation to the merits of the matter which includes, in schedule 2, an analysis which he says would be available on any retrial to assist the Choudhurys' case in relation to the cheques. However, it is fair to say that although the defendant should have produced the cheques earlier, they were available to the claimants at the trial. No application was made to the judge for an adjournment of the trial based upon the late production of the cheques. The time to make such an application was, of course, at the trial.

23. Monzu then gave oral evidence. He first of all gave evidence in examination-in-chief in relation to the cheques and he was cross-examined in some detail about them. It was put to him that some of them had been written by Masru. His evidence was, in essence, that they did not relate to rent, that they were nothing to do with him, Monzu, and that he did not know whether Masru had written any of them or not. It is not necessary for me to analyse that evidence in any detail. Suffice it to say that it was made quite clear to Monzu, and thus to the claimants and their solicitors, what the defendant's case was in the course of the cross-examination. Indeed, during the course of the cross-examination, at page 43E, after a passage of cross-examination including the suggestion that Masru had written some of the writing on the cheques as the recipient or beneficiary of them, Mr Jones said:

"I mean, to some extent you [that is Monzu] and I are at a disadvantage here, Mr Choudhury, because as you can see from page 84 it's Masru's name that features in relation to all of these debts where --

JUDGE MEDAWAR: Well, where is he, there is no statement filed, is there?

MR JONES: And he's not given - he hasn't made a witness statement.

JUDGE MEDAWAR: Well, why is there no statement?

MR JONES: He's not a witness that I'm able to cross-examine but, sir, we're doing the best we can.

JUDGE MEDAWAR: Well, why is there no statement from your brother? Is he still alive?

A : Yes.

JUDGE MEDAWAR: Where is he?

A: He's here.

JUDGE MEDAWAR: He's here in this room now?

A: Yes.

JUDGE MEDAWAR: Well, there we are. Yes."

24. It is also right to say that when the defendant came to give evidence, he said in cross-examination that one of the reasons he gave for paying money to Masru was that Masru wanted the money in order to use it for gambling. Although Monzu was not cross-examined in great detail about this, on pages 41 and 42 he was cross-examined about Masru's gambling habits. Indeed, that passage is very shortly before the exchange about the absence of a statement from Masru to which I have referred.

25. Monzu was still being cross-examined at the luncheon adjournment. Just before the adjournment, the judge told Monzu that he must not talk to anybody over the luncheon adjournment because he was still giving his evidence. But, in the event, there was no further cross-examination and after the short adjournment Mr Glover, counsel who then appeared on behalf of the claimants, told the judge that there was no further evidence other than a statement from Mr McGrath who, it appears, was unable to come and give oral evidence. Then Mr Glover said at page 51G:

"Your Honour, that being the case there's no further witnesses for the claimant.

JUDGE MEDAWAR: There seriously is no other witness?

MR GLOVER: Your Honour, no."

26. Then the defendant was called to give evidence and he gave detailed evidence about the providence of the cheques and that he had given them to Masru, at his request, in the mail. He was cross-examined in some detail. The positive case that was put to him was the same case relating to the credit card arrangements which Monzu put in paragraph 28 of his statement. One of the curiosities about this is as follows. One can understand why Mr Glover cross-examined the defendant on that basis because the suggestion was made by Monzu in his statement. However, we have been told by Mr Morgan that that explanation for the cheques has now been abandoned and would be abandoned if there were a retrial. That is because, at the very best, even if it were a credible explanation, it could only explain the situation over one month whereas these cheques were made over a very much longer period than that. It is plain from the judge's judgment, and his interventions, that he regarded the whole credit card story as untrue. It appears to me that he was entitled to reach that conclusion.

27. As I have already indicated, at the end of the evidence Mr Glover made the application which forms the basis of this appeal. It will be recalled that Mr Glover told the judge that he wanted to ask "literally four questions". It also appears that the reason that the judge rejected the application was that, as the judge put it, the claimants had had "ample opportunity" after the short adjournment to seek leave to call Masru.

28. It appears to me that the only inference this court can draw is that the claimants, no doubt as a result of the advice of their then legal advisors, made a deliberate decision not to call Masru at the trial. They only called Monzu. They could have sought to call Masru, having regard to Sheik Rahman's statement and to the production of the cheques. It appears that at the outset of the trial they decided not to call Masru. Then they had a further opportunity to apply for permission to call Masru after Monzu had given evidence. During that evidence, as I have indicated, the role which the defendant was saying was played by Masru was clearly spelt out in the cross-examination of Monzu. In the passage to which I have referred at page 43, it is plain that the judge was astonished that the claimants had decided not to call Masru, especially since Masru was present sitting at the back of the court and could have given express instructions to Mr Glover and his instructing solicitors over, for example, the short adjournment. It seems a reasonable inference that there were -- indeed, it would be extraordinary if there had not been -- discussions between Masru and the claimant's legal advisors at that stage. It appears to me that the only inference one can fairly draw is that a further deliberate decision was taken not to call Masru. Indeed, the judge expressed astonishment again because when Mr Glover told the judge that the claimants were going to call no further evidence, the judge expressed his astonishment by saying: "There seriously is no other witness?".

29. The judge plainly thought that the claimants had decided, by way of tactical decision which they were entitled to take, not to call Masru despite the matters of substance which had been pointed out. The judge clearly considered that, having made that decision at the short adjournment, it would not be just to allow them to call Masru after the defendant had given his evidence. The judge plainly had in mind that some of the defendant's evidence had not been pleaded and had not been foreshadowed, but the question for us is whether it was within the ordinary ambit of the discretion of the judge to reach the conclusion that he did.

30. I have reached the clear conclusion that it was within the exercise of his discretion. He had been present at the trial throughout, he had heard the way the case was put to Monzu, he had heard Monzu's replies and he was quite entitled to say that it was too late. Moreover, he had been told that all that Mr Glover wanted to do was to ask four questions, which the judge was bound to accept was what Mr Glover in fact intended to do if Masru was called. The judge could properly have concluded that those four questions, whatever their answers, could not possibly have altered the result of the trial. Indeed, Mr Morgan very frankly and fairly submits to us today that, in truth, Masru's evidence would have had to be much more extensive. The difficulty is that the application was not put to the court on the basis of extensive evidence from Masru, but just those four questions. Unfortunately, nobody has told us what those four questions were. The claimants could have discovered from their previous solicitors and/or counsel what those four questions were and informed this court what they were, but they have not done so.

31. I should also add that we have seen two recent statements of Masru in which he accepts that two of the cheques were for his benefit, although the explanations he gives appear to me to be far from satisfactory. However that might be, I have reached the clear conclusion that the judge was entirely justified in reaching the conclusion that he did, the claimants having made the tactical decisions that they did earlier in the day. Moreover, I am quite unpersuaded that there is any injustice to the claimants in this decision. Essentially, the decision is one which depended upon the credibility of the witnesses. It was suggested, somewhat faintly, that the judge had not given sufficient reasons for his decision. I recognise that judges must give proper reasons for their decisions but, as my Lord pointed out, it all depends upon the circumstances of the case and in this case the judge cannot be faulted for failing to give his reasons at the end of a day's evidence and submissions.

32. Finally, Mr Morgan has produced the schedule to which I referred earlier, identifying a number of points on the merits which he would wish to advance. However, it appears to me that those points should have been made at the trial. Indeed, so far as I can see, they were in fact made at the trial. For example, Mr Morgan points to the fact that the rent paid was reduced from £400 week to £300 a week and not to £200 a week until June 2001. However, in response Mr Jones points out on behalf of the defendant that the amount of £200 was the amount paid as from 7th June 2001, which was the date of the alleged agreement and the difference between the £400 and the £300 in the 18 weeks before that is reflected in the outstanding figure for rent of £55,000. No doubt if there were a retrial, or if Mr Morgan had been representing the claimants at the trial, he would have made some of his other points such as, for example, that the cheques do not fit in with the kind of pattern one might expect a gambler to leave money for. He also has a point based upon the dates of the cheques, but that was a point that was debated with the defendant at the trial and is not one which persuades me that any injustice has been done in this case.

33. For all those reasons, while I am grateful to Mr Morgan for his submissions which have certainly included everything that could be said on behalf of the claimants, having now considered all the materials -- which of course Dyson LJ was not able to do -- with the assistance of counsel, I have reached the conclusion that the judge was entitled to reach the conclusion that he did and that this appeal must be dismissed.

Order: Appeal Dismissed. Costs in favour of the Defendant