Fen & Ors v D'Cruz & Ors

The issue in this case which Dobbs J decided in favour of the claimants on 31 July 2006, was whether at a meeting in London on 16 or possibly 15 December 2004 between the claimants and Mr Lim and the first and second defendants, the second defendant, Mr Low, a solicitor and partner in the third defendant firm, held out the first defendant, Mr D’Cruz, as a partner or solicitor in the firm. There is no dispute but that there was such a meeting at which these people were present. Indeed, there were video clips taken on a mobile telephone showing his presence, but the claimants -- mainly in the evidence of the second claimant Miss Ping -- and Mr Low gave materially different evidential versions of what was said. According to the claimants’ version, Mr Low held out Mr D’Cruz as a member of the firm; according to Mr Low, he did not.

The judge accepted the claimants’ account and rejected that of Mr Low in a very detailed judgment comprising 110 paragraphs. Her judgment may be found at 2006 EWHC 244 1QB. She accordingly gave judgment for the claimants for £23,500 plus interest, which was the total of sums they said they had paid to Mr D’Cruz on account of legal services in connection with visas when no such services were provided.

The judge said, at paragraph 66 of her judgment, this:

“The issue to be decided is a narrow one, although it involves consideration of all the evidence in the case. The question to be answered is: have the claimants proved that Mr Low held out Mr D’Cruz as a fellow solicitor and partner in the firm of Whitehead and Low on or about 16 December 2004? The case, as has been emphasised by both parties, rests on the credibility of the witnesses. Because of this I have set out the evidence and submissions in some detail. In approaching the issue I have read all the evidence in the case, I have considered the skeleton arguments, including the matters of law contained therein, and the final submissions of counsel. I approach the task conscious of the heavy burden placed on the claimants, given that this is an allegation of dishonesty against a solicitor. I start from the basis of the inherent improbability of such an allegation, looking for cogent evidence that such dishonesty as alleged has taken place.”

It was not necessary for the claimants to plead fraud or dishonesty and they did not do so. Their simple case was as I have indicated. But conflicts of evidence, not least in relation to a letter of 18 January 2005, of which there were in evidence two different versions, could only be rationalised, if the claimants’ evidence was correct, on the basis that Mr Low had produced a second longer version of this letter after he had sent the first, and that he was dishonestly deploying this as the version he had sent. The only realistic alternative was that the claimants had forged the version they said they had received, since the opportunity for Mr D’Cruz to do so was more or less ruled out on the evidence.

As to the first of these possibilities, a computer expert who examined the hard disk of the computer in the third defendant’s firm used by Mr Low was inconclusive. Mr Low’s longer version of the letter was there on the hard disk. It had been edited two days after it had been sent, but the extent of the editing could not be established. Neither could the examination establish whether, or if so when, either version of the letter had been printed from that computer. But it did not exclude either of those possibilities.

As to the judge’s judgment of the parties’ respective credibility, there were numerous points to be said on either side. The judge considered these with great care and is, I think, only shown to have made one possible error of factual detail. She gave, to my mind, persuasive reasons for rejecting the evidence of Mr Low on the central issue. The grounds of appeal do not attempt to dislodge this part of the judge’s analysis, rather, in the round, the grounds of appeal say:

Longmore LJ gave permission to appeal. He did not say why he did so. He may have had in mind that findings of dishonesty have serious consequences, and that, before the Civil Procedure Rules, you did not need permission to appeal in any jurisdiction where there was a finding of fraud. It goes without saying that this court does not often allow an appeal which depends on showing that findings of pure fact of a trial judge are wrong, when the judge has heard the witness’s oral evidence and given an extended, careful and comprehensive judgment and when the findings turn on assessments of competing credibility. The appellant, nevertheless, seeks a retrial because it is said that the judge’s analysis and assessments are so unfair or wrong that her judgment should not stand.

The three claimants, respondents to this appeal, are all Malaysian nationals who arrived in the United Kingdom on or about 17 November 2004 wanting to begin to study at Bradford College at the beginning of 2005. Mr Low, the second defendant and the appellant, is a partner in the second appellant firm, Whitehead and Low. He also is Malaysian and speaks the first same language as the respondents. The respondents were refused student visas on entry on the ground that they should have sought entry clearance before entering the United Kingdom. They accordingly contacted the Malaysian High Commission and the Malaysian High Commission referred them to Mr D’Cruz. He, it turns out, is a fraudster who has disappeared and summary judgment has been entered against him in default.

The respondents, nevertheless, contacted and met with Mr D’Cruz. A first meeting took place, they said, at the Hilton Hotel on about 9 December 2004. Mr D’Cruz told them that he would apply for residence visas on their behalf for a fee of £10,000 for each application, 50 per cent of each such fee being payable in advance. A second meeting took place at his flat on 16 December 2004 or possibly 15 December 2004. The date may have come from that shown on a telephone video clip of the meeting when the telephone may still have been on Malaysian time. That is one of the evidential discrepancies relied on by Mr Low. As the judge said, however, there was no dispute but that this meeting which Mr Low attended took place in December 2004.

The respondents said that they gave Mr D’Cruz £5,000, their passports and photographs. Mr Low was, as I say, at the meeting and the respondents said that during the meeting he confirmed that Mr D’Cruz was also a partner or member of Whitehead and Low. They told him that they had given payment and documents to Mr D’Cruz and he confirmed that all would be accounted for later on. Mr Low denied that he had held out Mr D’Cruz as a partner or a solicitor in the firm. He had attended the meeting on the basis that the respondents might ask him to act as their solicitor. He outlined the possible visas which might be obtained and the firm’s approximate costs for dealing with the application. He gave a cost of £1,800 each, plus a processing fee of £155; no mention of any immediate payments was made. Mr Low said that following this meeting, Mr D’Cruz visited him at his office. Mr D’Cruz told him that the respondents wished to retain him as their solicitor and Mr D’Cruz handed over to him their passports.

The respondents’ evidence was that they paid Mr D’Cruz £23,500 in all and this with interest was the amount of their claim in the action. They said that the payments were on dates in December 2004 and January 2005, mainly in cash. There was produced a banker’s draft for £2,250 on 28 January 2005. This and cash withdrawals from cash machines amounted to £21,630 and Miss Ping, the second claimant, said that she had a further £3,500 when she came to the United Kingdom. There was a question what money the claimants were living on at this time if all their cash withdrawals went to Mr D’Cruz.

The two versions of the disputed letter of 18 January 2005 are reproduced in paragraphs 7 and 9 of the judge’s judgment. Those which each of the claimants said that they received in a single envelope each had different references. The version which Mr Low says that he sent all have a single reference, referring only to the second claimant. This is, to my mind, odd, and is a point in favour of the authenticity of the shorter versions. The shorter versions acknowledge instructions from the firm to act on the claimants’ application for residency status, acknowledge receipt of their passports and photographs and confirm that the firm is preparing forms to submit to the Home Office, gives a timescale and says that the firm will inform the claimants when the Home Office has acknowledged the applications.

The longer version, which contains much of the same material as the shorter version, begins, however, by saying that the firm understands from Mr D’Cruz that the claimants may wish to instruct the firm. The application to the Home Office is here subject to receiving instructions. There is then the additional passage:

“In order for us to proceed in your application, kindly provide us the following:

It was Mr Low’s evidence that the claimants did not respond to this letter so he sent the passports back to Mr D’Cruz. He produced a copy of a letter dated 2 February 2005 to Mr D’Cruz, said to evidence this. Mr D’Cruz absconded and was not heard of again. The claimants said that they contacted Mr Low on various occasions in March 2005 when they could not get a reply from Mr D’Cruz. Mr Low told them not to go to the police and said that he would let them know the progress of their applications. He disputed this account of the telephone call. After failing to find Mr D’Cruz or their passports at his flat in early April 2005 when they did meet his brother and were told that he had left the country, the claimants contacted Mr Low, who confirmed that Mr D’Cruz had indeed left the country. He asked for a week and asked not to be disturbed. The claimants instructed other solicitors in early May 2005, who wrote on 6 May 2005 in anticipation of what became this claim. For what it is worth, these solicitors appear to have sent Mr Low a copy of the claimants’ shorter version of the letters of 18 January 2005 before he sent them a copy of his version.

This is a brief outline of the chronology and some highlights of the evidence. The evidence as a whole is set out in great detail in paragraphs 3-53 of the judge’s judgment to which reference may be made. The claimants’ submissions to her are briefly summarised in paragraphs 54-55. The defendant’s submissions are summarised in paragraphs 56-65: these included that the case turned on the credibility of the witnesses; that the computer evidence took the claimants’ case nowhere; that the court could draw adverse inferences from the absence of the first claimant and Mr Lim, her boyfriend; that the court would need compelling reasons for making a finding of dishonesty against Mr Low; that the claimants had given different versions of the events of 16 December 2004; that the letters of 18 January 2005 were difficult to understand; that Mr D’Cruz was a fraudster; that the claimants had introduced new matters of evidence not reflected in the pleadings or witness statements; that some of the evidence and explanations given by the claimants were inherently implausible (see paragraph 63 for the detail of this) and that documentary evidence of withdrawal slips and the video clips contradicted some crucial details of their evidence.

The judge carefully considered the discrepancies in the claimants’ evidence under the heading “Previous Inconsistent Statements” in paragraphs 68-72, noting the points, attributing some of them to solicitors’ misunderstanding of their instructions and making the point that, although there were said to have been references by Mr Lim to figures of £11,000 or £11,500 only, the solicitors had made a claim from the start that the claimants claimed to have paid £23,500.

The judge considered new matters introduced in evidence in paragraphs 73-75, saying that they did not, in her view, give rise to the inference that Miss Ping was lying or unreliable. She considered the alleged inherent implausibility of the claimants’ evidence in paragraphs 76-79, saying that she did not find it inherently implausible. She considered the documentary evidence, said to contradict the claimants’ evidence, in paragraphs 80-83; these included the date and time of cash withdrawals in Leeds on 9 December 2004 when the evidence was that the claimants were meeting Mr D’Cruz in London that day. The judge said that there were enough hours in the day to come down to London and return. There were again cash withdrawals in Leeds on 16 December 2004 when the telephone video had the crucial London meeting on that day. The telephone may still have been on Malaysian time, but importantly there was no dispute but that the meeting did take place in December as alleged.

The judge declined to draw adverse inferences from the fact that Mr Lim did not give evidence. His visa had expired and he had returned to Malaysia. She decided the case on the evidence before her of the second and third claimants and did not take that of the first claimant into account. The judge’s overall assessment is in paragraphs 86-110 of her judgment. She said this at paragraph 87:

“I found both the second and third claimants to be essentially honest (although at times confused and mistaken) witnesses. I have had the opportunity of seeing them both in the witness box and sitting together in court during the proceedings. I do not take the view that they have come to court to lie and mislead the court. Nor do I take the view that such discrepancies as there are in their evidence arise from any dishonest motivation.”

And then in paragraph 88:

“Even starting from the premise of improbability of Mr Low acting in the manner in which they allege, in relation to the central issue in this case about what took place on 16 December 2004 I accept their evidence, not only because I find they have been honest, but also because there is other evidence which supports their evidence generally. These aspects will be referred to when dealing with the evidence of Mr Low.”

It is the judge’s analysis of the evidence of Mr Low which is one of the central parts of her decision and which the grounds of appeal do not, in substance, seek to displace. She did not find him a credible witness for a number of reasons, mainly because his evidence was inherently implausible. The detail of this is in paragraph 90 and the paragraphs which follow.

The bones of it are this: he was a solicitor in a partnership formed some three weeks only before the claimants came on the scene; he was very anxious to get clients. His description of the meeting with the claimants in December 2004 did not withstand close scrutiny. His evidence was that he then told the claimants that the cost of the applications for visas would be essentially that which appears in the longer version of the letter on 18 January 2005, that is £1,800 plus £155 with £500 each on account; yet on this date the claimants had already paid more than the deposits so referred to, totalling £1,500, to Mr D’Cruz who was present. They had paid more than that by 18 January 2005 and would surely have responded in protest at the longer version of that letter if they had received it. Moreover, in the face of Mr Low’s evidence that he was asking for a total payment of about £5,000 as the judge put it -- it was in fact £5,865 -- they continued to pay Mr D’Cruz large sums up to £23,500.

Mr Low had never done visa applications. Looking at the longer version of the letter of 18 January 2005, he did not tell the claimants what documents they needed to send. He accepted that the letter says he was in the process of preparing the necessary forms when he agreed that he had in fact done nothing. His explanation for using the same name reference on all three letters in his version was unpersuasive. The short version of the letter of 18 January made sense in relation to what the claimants did: if Mr Low did not send the short versions who did? Mr D’Cruz was not in a position to do so and the suggestion that the claimants themselves had forged them was only lamely suggested. They must also have been able to manufacture the envelope which they also produced. It did not have a rubber stamp, but the judge concluded that the claimants received the short versions of the letter in that envelope.

Another piece of evidence concerned a telephone call to the defendant’s office made in January 2005 by the claimants, asking for Mr D’Cruz. A man told them that neither Mr D’Cruz nor Mr Low was available. The only person who could have answered, from the evidence, was Mr Low, as he was the only person who worked in the office and he had the office calls diverted to his personal telephone when he was not in the office. One point of appeal is that this finding was unfair because it was never put to Mr Low. Nevertheless, in my judgment the main points of this analysis, which I have only summarised, are persuasive.

Miss Carr submits that in a case of such importance to Mr Low the judge’s reasons must be cogent and they were not and that, although there may not be a silver bullet point on this appeal, an accumulation of points is sufficient to sustain the appeal.

The first written ground of appeal is that the judge made inferential findings of dishonesty, fraud and conspiracy when none of these were pleaded as causes of action. The judge failed to rule on the issue when it was raised and so the allegations remained without being particularised. The judge only said that it was quite clear what the allegations were. Miss Carr accepts that this was so and that she, at least, understood the case being made. No notice was given to the defendants of what the findings might be. This is said to raise a question of high principle, but I do not think it does. The claimants did not plead, and did not need to plead fraud, or dishonesty. Their case simply was that Mr Low had held out Mr D’Cruz as a member of the firm. The case was not necessarily that Mr Low was complicit in Mr D’Cruz’s fraud or dishonesty. Dishonesty became an issue evidentially because, for instance, Mr Low relied on the longer version of the letter of 18 January 2005 which, on the claimants’ evidence, had to have been put together after the shorter version was written and sent. This was an evidential issue, not a cause of action issue, no different in principle from any case in which one party says that the other party’s evidence is untrue and where an honest mistake is not realistic.

There is, in my judgment, no force in this ground of appeal. The judge made it clear that she was applying an appropriately high standard of proof to serious allegations. Mr Low cannot but have understood the evidential case he had to deal with. Indeed his own case came close to alleging dishonesty against the claimants without having pleaded dishonesty, although Miss Carr disavows this as the way in which Mr Low’s case was run.

The next ground of appeal, which Miss Carr says can alone carry the appeal, is that the judge invented an unannounced theory of her own about the possibility of the letter of 18 January 2005 in the envelope having been printed from Mr Low’s home computer. An application to admit fresh evidence seeks to show that there is nothing on his home computer to show that this had happened. This, again, is elevated to a point of high principle to the effect that this was a speculative possibility which Mr Low never had the opportunity to deal with. The judge should not have found that expert evidence about the hard disk in the office computer took the matter nowhere. In fact it is said that the evidence supported Mr Low because the claimants failed thereby to prove that he had deliberately manufactured the long version of the letter of 18 January 2005. The judge should also have given weight to the expert evidence that the letter of 2 February 2005 was created at the material time.

In my judgment, this ground is unpersuasive. The judge found that the computer evidence was of some assistance to the claimants but not much (see paragraph 58 of her judgment), so it was not a matter which the judge regarded as of great weight. The expert evidence did not show much about the letter of 18 January 2005, but it did show that the version of it on the hard disk of the office computer was edited on that computer on 20 January 2005 after the date on which the letter, in some form, was sent, although the computer did not show the extent of the editing. It did not show one way or another whether or when the computer had printed either version of the letter, the corollary of which was that it could have printed either or both.

The judge did not, as I say, place great weight on the computer evidence. It seems to me that the proposed fresh evidence takes the appeal nowhere and technically, having considered it, I would refuse to admit it, but that is a technicality. Much the same goes for the debate about the envelope.

The next ground is that the judge should not, in effect, have found that it was Mr Low who answered the telephone in January 2005 saying that neither Mr D’Cruz nor he were in the office when this was not specifically put in cross-examination. This was an allegation of dishonesty and should not have been made. A purist might possibly agree with this, but it cannot have such significance as to carry an appeal against the judge’s decision. In fact, it looks as if the evidence may well have justified the finding and indeed that the general case was sufficiently put (see page 361 of the transcript).

The next ground is that the judge’s factual findings were based on inadequate or fundamentally flawed reasoning. As I have already indicated, the written submissions address the judge’s analysis of the claimants’ evidence, not her analysis of the defendant’s evidence which, for sound reasons, she held to be intrinsically implausible. The first point here does appear, possibly, to be an error by the judge. She said of the evidence that the claimants had drawn cash in Leeds on the day that they said they were meeting Mr D’Cruz in London on 9 December 2004, that there were enough hours in the day for both to have happened. But some of the withdrawals were just after 5.00pm and Miss Ping’s evidence was that the meeting in London was at about 4.00pm. This was, on one view, an error. But I am not persuaded that by itself it was, as is suggested, fundamental. The date of 9 December 2004 does not, as Auld LJ pointed out, appear from the oral evidence to have been an immovably secure date (see pages 242 and 266 of the transcript). Miss Carr accepts that this is not by itself a silver bullet point and I do not think that it is. I do not, in fact, think that it is much of a point at all.

Next, it is said that the judge was wrong to brush aside the fact that Mr Lim did not give evidence although he played a central role (see, for example what is said in paragraph 11 of the defence and Mr Low’s witness statement to that effect). Not only was Mr Lim not called, but there was no witness statement although he had not returned to Malaysia before June 2006 when the original date for the trial had been fixed in February 2006. The judge should not, it is said, have assumed that his evidence would have supported the claimants. She should, in fact, have drawn an adverse inference to the effect that the evidence, had it been given, would have been adverse to the claimant, especially when he appears to have spoken of £11,000 or £11,500 when the claim was for £23,500. This was explained in evidence at page 287 as being his share of the eventual £30,000 that was spoken of, even though £11,000 is not one-third of £30,000. In fact the judge expressly said that she based her decision on the evidence of the second and third claimants only. It was further said that the judge too readily accepted that discrepancies in the claimants’ evidence, for example as to whether passports were handed over to Mr D’Cruz in Mr Low’s presence, could have been attributed to their solicitors. She failed, it is said, to deal with the important question of what the claimants were living off if they were paying all they withdrew to Mr de Cruz. There was reference to an Australian bank account but this was not substantiated by documents and documents of this kind had previously been asked for. Further, the judge failed to take account of Mr Low’s unchallenged evidence about the stamp on the envelope produced by the claimants as having contained their version of the letter of 18 January 2005.

In my judgment, these were and perhaps are points to be made, or at least some of them are. The judge took account of most of them, and a trial judge is not to be criticised for not mentioning absolutely everything that evidence or submissions have addressed. She seems to have made one possible mistake about the evidence relating to 9 December 2004 but the date there was not a secure date. I do not think this comes anywhere near vitiating her overall judgment. She had compelling reasons for regarding Mr Low’s evidence as implausible and those reasons are not impugned. In the context of the case as a whole, the points made are unpersuasive and repeated use of the word “fundamental” does not make them so.

In the end, this was a contest of credibility to be judged by an assessment of oral evidence. The judge’s judgment was thorough, detailed and persuasive. Such rough edges as there are, which are perhaps to be expected in a case such as this, do not show it to have been wrong or otherwise unsustainable.

For these reasons I would dismiss this appeal.

I agree. In Armagas v Mundogas [1985] 1 Lloyd’s Reports, Goff LJ said:

“Speaking from my own experience I have found it essential in cases of fraud when considering the credibility of witnesses always to test their veracity by reference to objective facts proved independently of their testimony, in particular by reference to the documents in the case and also to pay a particular regard to their motives and to the overall probabilities. It is frequently very difficult to tell whether a witness is telling the truth or not and whether there is a conflict of evidence such as there is in the present case. Reference to the objective facts and documents, the witnesses’ notes and letters(^) can be of very great assistance to the judge in ascertaining the truth.”

In this case the judge examined all the circumstances with great care and methodically, including the two versions of the letter of 18 January 2005 and the cash withdrawal slips and the objective facts such as the presence of Mr Low at the meeting on 16 December 2004. She considered the plausibility of the various individuals composing the short form of letter of 18 January. The appellants have made some points which, in my judgment, do not go to the heart of the judge’s findings for the reasons that my Lord, Lord Justice May has given and therefore, in my opinion, the appeal should be dismissed and the application to adduce fresh evidence also dismissed.

For the reasons given by my Lord, Lord Justice May and my Lady, Lady Justice Arden, I also agree that the appeal should be dismissed and that the associated application should be refused.

The appeal is therefore dismissed.