Albon (t/a NA Carriage Co) v Naza Motor Trading SDN BHD

At issue in this action is whether the Defendant Naza Motor Trading Shd a Malaysian Company substantially owned and controlled by Tan Sri Dato Nasimmudin Amin (“Mr Nasim”) is indebted to the Claimant Mr Albon (a resident of England) in respect of transactions between them relating to the export of cars by the Defendant from Malaysia to the Claimant in England and the export of cars by the Claimant from England to the Defendant in Malaysia.

The background facts to this dispute are set out in four judgments which I have given in this action and to which I shall subsequently refer. In short the Claimant claims that pursuant to an oral agreement with the Defendant there were dealings between the parties relating to the import into England of cars from Malaysia and the export of cars from England to Malaysia and that in respect of those dealings there is a substantial sum due from the Defendant to the Claimant. The larger part of that sum relates to the export of cars from England. The Defendant admits that there was an oral agreement for the import of cars into England, but denies that it covered the export of cars from England to Malaysia and the Defendant also disputes the terms of the oral agreement alleged by the Claimant. Going beyond this the Defendant contends that the parties entered in Malaysia into a Joint Venture Agreement (“the JVA”) which provided for arbitration of all disputes between the parties in Malaysia. The Claimant contends that the JVA is a forgery.

By the first of my four judgments dated the 23^rd January 2007 (“the First Judgment”) I dismissed an application by the Defendant to set aside the grant of permission to the Claimant to serve these proceedings on the Defendant in Malaysia. By the second judgment dated the 9^th March 2007 (“the Second Judgment”) I dismissed the Defendant’s challenge to an order authorising service of these proceedings by the Claimant on the Defendant by a method not permitted by the CPR. By the third judgment dated the 29^th March 2007 (“the Third Judgment”) I held that the English court rather than the persons purportedly appointed arbitrators under the JVA (“the Arbitrators”) should determine the authenticity of the JVA. The court orders in respect of the three judgments have not yet been drawn up. By the fourth judgment dated the 31^st July 2007 (“the Fourth Judgment”), in the face of a refusal by the Defendant to agree that the Arbitrators should have no jurisdiction to determine the authenticity of the JVA unless and until the Third Judgment was reversed, I granted an injunction restraining the Defendant from pursuing the arbitration proceedings pending determination by the court of the authenticity of the JVA. On Wednesday the 24^th October 2007 the Court of Appeal heard an appeal against the Fourth Judgment and reserved judgment and on the 6^th November dismissed the appeal.

The present application (“the Application”) issued on the 24^th April 2007 is a form of application commonly referred to as a “Barrell Application” whereby in exceptional circumstances a party may apply for an order setting aside a judgment before the order giving effect to that judgment has been entered. The Application in this case seeks an order setting aside the First, Second and Third Judgments on the grounds that there have come to light: (a) certain documents and in particular a contract in writing between the parties dated the 3^rd November 2000 (“the CSA Agreement”) which governed the export of cars by the Claimant to the Defendant and that the Claimant wrongly failed to disclose the CSA Agreement to the court on the application for permission to serve in Malaysia or thereafter; and (b) certain written communications between the parties which (the Defendant contends) do not accord with the Claimant’s case as to the terms of the oral contract between the parties. The Claimant contends that the CSA (like the JVA) is a forgery.

The Defendant has contended since the date of the Application that this court could not and should not determine the issue of the authenticity of the JVA until the outcome of the Application is known for, if the Defendant succeeds on the Application, these proceedings and the grant of permission to the Claimant to serve these proceedings in Malaysia will be set aside, these proceedings will be brought to a close and there will be no occasion for this court to decide the issue. There is force in this contention, but it underlines the need for a speedy trial of the Application. The continued existence of the Application bars the Claimant from prosecuting his claim in these proceedings, but has left the Defendant free (unless and until restrained by this court) to continue to proceed before the Arbitrators.

On the 23^rd April 2007 I gave directions for the hearing of the Application with a hearing date in June or July 2007. The date was subsequently fixed through the normal channels for the 9^th July 2007. The Claimant has at all times been in some financial difficulties and these difficulties were particularly acute around that time. These difficulties led to the non-payment of fees due to the Claimant’s solicitors and for this reason they ceased to act. At a hearing on the 29^th June 2007, by reason of the loss to the Claimant of the services of their solicitors I vacated the hearing date of the 9^th July 2007. A further directions hearing took place on the 9^th July 2007 when I directed that the Application should be re-fixed with an estimate of five days and that witnesses attend for cross-examination. In the course of the hearing I stated to Mr Nathan QC, counsel for the Defendant, that I had provisionally fixed the hearing for five days on the 15^th October 2007 and the directions which I should give would include that I must get the skeleton arguments and documents by the first day of the next term (i.e. by the 1^st October 2007, fourteen days before the date of trial). I explained that I wanted to do the bulk of the pre-reading during the first week because I would be abroad for the bulk of the second week. Mr Nathan assented to that course. The court order (quite properly) accordingly directed that skeleton arguments should be exchanged and lodged fourteen days before the date of hearing. Later in the course of the hearing it became apparent that the hearing could not proceed on the 15^th October 2007, and through the usual channels the date of commencement was fixed at the 29^th October 2007.

Both parties proceeded to prepare for trial and trial bundles were prepared and lodged with the court and agreed. A dispute arose regarding disclosure by the Defendant of Malaysian customs declarations relating to the import of cars into Malaysia made by the Defendant to the Malaysian Customs Authorities. The relationship between the prices of the cars exported to Malaysia as shown in the CSA and in such declarations appeared to be relevant to the issue whether the CSA was a genuine document. I ordered their disclosure, but later on the application of the Defendant stayed that order pending the service by the Claimant of further information of the relevant Malaysian customs law and practice relied on by the Claimant. After service of that further information the Claimant made an application for the lifting of the stay, but when this application was opposed on the 18^th October 2007 (most particularly to save the trial date which might otherwise be placed in peril) the Claimant notified the Defendant that it would not proceed with the application. When at this hearing the relevance of the declarations was being debated I asked whether the Defendant would confirm that the prices shown in the declarations were the same as those shown in the CSA. The Defendant declined to do so. Any divergences are of considerable potential significance.

On the 12^th October 2007 the Claimant’s solicitors wrote to the court requesting an extension of time for filing skeleton arguments until 4 p.m. on the 24^th October 2007. The Claimant in fact lodged his skeleton on the 22^nd October 2007. The Defendant failed to lodge a skeleton at any time, in disregard of the order to do so.

On the 18^th October 2007 the Defendant emailed the Claimant’s solicitors stating that the Defendant’s witnesses were already booked to attend in London for the hearing of the Application.

According to the Fourth Witness Statement of Ms Amin, the Defendant’s representative in London, on the 19^th October 2007 whilst endeavouring to finalise arrangements for the attendance of witnesses in London for the hearing of the Application, she learnt that one of the Defendant’s witnesses, Ms Yatimah, had been and was away from work and was very ill, and on the 22^nd October 2007, having pursued inquiries learnt that Ms Yatimah was incapacitated from work and was being committed for surgery as soon as practicable. She went on to say that she instructed the Defendant’s solicitors in London to approach the Claimant’s solicitors about the problem and “to foreshadow” that the hearing of the Application could not proceed on the 29^th October 2007 and that the Defendant would need an adjournment. She concluded:

“14.

It remains Naza’s intention to pursue the Barrell Application as soon as Ms [Yatimah] is fit. We have hope and faith for her full recovery in due course, however we are unable presently to confirm when that date may be, but it would certainly require an adjournment of a minimum of perhaps three months.”

A medical certificate in respect of Ms Yatimah was received by Ms Amin on the 24^th October 2007. This certificate was exhibited to Ms Amin’s witness statement. The same day the Defendant directed its legal team and witnesses to stand down and take no further action in respect of the Application. The instructions extended to preparation of the skeleton argument. The legal team and witnesses complied.

The court was first informed of any doubt about the trial taking place on the due date on the 24^th October 2007 after my clerk had pursued in vain efforts to obtain the Defendant’s skeleton argument. My clerk was told (as was the Court of Appeal on the appeal against the Fourth Judgment) that an application for an adjournment would be made on the 29^th October 2007 and that, if the adjournment was not granted, the Application would be abandoned. It is the duty of parties and their legal representatives to inform the court as soon as they become aware of any real prospect that a hearing will not proceed on a fixed hearing date so as to enable the court to ensure that its resources are at all times used to best advantage. Only at 6.15 p.m. on the 25^th October 2007 did the Defendant’s solicitors inform the Claimant’s solicitors that its witnesses had been stood down.

On the 29^th October 2007 the Defendant instructed Mr Kitchener (who until this time had been led by Mr Nathan) to apply for an adjournment. He was not instructed to familiarise himself further with the facts or merits of the Application. The substance of his application was that the Defendant was in no position to proceed with the Application. He was not instructed or able to do so, and all his witnesses had been stood down. In the circumstances he submitted that justice required that he should have an adjournment. The justification he gave for the decision of the Defendant to stand down the legal team and witnesses and for the grant of adjournment was that an important witness Ms Yatimah was too sick to travel to England for the trial, that there would be no prejudice to the Claimant if the adjournment was granted which could not be compensated for in costs, and that the indulgence was fair since the Claimant had obtained the like indulgence of an adjournment of the trial date of the Application on the 9^th July 2007. The Claimant objected to the adjournment. The Claimant’s counsel Mr Anderson described the Defendant’s actions in: (a) failing to prepare for and attend with its witnesses; (b) failing to fully instruct counsel on the 29^th October 2007; and (c) seeking an adjournment as effectively trying to put a gun to the head of the court and compelling the court to accede to the application for an adjournment.

Mr Kitchener referred me to a number of authorities decided prior to the Civil Procedure Rules 1998 providing guidance to the court on how it should approach an application for an adjournment of a trial made on the grounds that the illness of a witness prevents that witness attending the trial, and in particular to the cases of Dick v. Piller [1943] KB 497 and R v. Sevenoaks General Commissioners ex parte Thorne (“Thorne”) [1989] 560. These authorities established that an adjournment should be granted if four conditions were satisfied. The first was that the witness was unable to attend on grounds of ill-health. The second was that the witness’s evidence was reasonably necessary if the party’s case was to be properly presented. The third was that there was a reasonable prospect that the witness would be able to attend an adjourned hearing at a specific reasonable future date. The fourth was that the other party would suffer no injustice which cannot be remedied by an award of costs or otherwise. Mr Kitchener submitted that the law as so stated remained the law and that as four of these conditions were satisfied in this case, he was entitled to the adjournment sought. If the law indeed remained as set out in these authorities, in my view this application for an adjournment must fail.

The first condition is satisfied: a doctor’s certificate establishes Miss Yatimah’s illness and inability to work and travel here. But the other conditions are not. The second condition clearly is not satisfied. The absence of Miss Yatimah does not preclude her evidence from being adduced at the trial (unlike the position in Thorn). Her witness statement is already before the court and can and should stand as evidence on the Application, whether or not she is cross-examined. The absence of cross-examination would go, not to admissibility, but to weight. In any event cross-examination could proceed by video link. The doctor’s certificate does not suggest that she is unfit to be cross-examined. In any event, as it seems to me, her evidence on this application is of very much secondary importance. The Defendant’s case must turn on the evidence of Mr Nasim and Mr Nasira, the Defendant’s primary witnesses. It should be noted that in her evidence Miss Yatimah (who was the personal assistant of Mr Nasim), states how limited was her knowledge and how vague was her recollection of the relevant events referred to in her witness statement.

The third condition is likewise not satisfied. The date when she will (if ever) be able to attend trial is left uncertain and in the circumstances of this case the postponement necessitated by the adjournment sought is unreasonable. The Claimant should not be precluded from proceeding with his claim for a further three months.

The fourth condition is likewise not satisfied. As has been the situation throughout this case, the Claimant is in financial straits, but the Defendant is a substantial wealthy company. The Claimant urgently needs this case to be concluded and with that conclusion the end to the need to incur substantial costs in this action and receipt of the recoveries to which he claims entitlement. No effective further step in this action can be taken so long as the Application remains on foot. I add that his reputation (as is that of Mr Nasim and the Defendant) is at stake. The Defendant is claiming that the Claimant has been guilty of fraud: indeed that is at the root of the Application and the action itself. The Claimant has a need to see the issues between the parties resolved as soon as possible.

In my judgment however the exercise of the court’s discretion whether to grant an adjournment is governed, not by these authorities, but by the terms of the CPR and in particular the overriding objective set out in CPR Rule 1.1. No doubt considerations held critical in the authorities cited are relevant, but not decisive.

As it seems to me, dealing with this case justly requires me to refuse the adjournment. Beyond the considerations pointing to the conclusion set out above applicable prior to the CPR, there are (amongst others) the following further considerations:

I should add that: (1) I do not think the fact the Claimant obtained an adjournment on the 9^th July 2007 in the circumstances that then prevailed afforded the Defendant and its solicitors a “free pass” deliberately to conduct themselves as they have done in respect of the hearing of the 29^th October 2007 immune from the ordinary consequences; and (2) the allegations which rely on the newly disclosed faxes take the Defendant nowhere. They are capable of explanation and have been explained by the Claimant in his skeleton.

In the ordinary case a factor which may be relevant on an application for an adjournment is the court’s view of the merits of the applicant case which he is seeking to adjourn. The Defendant has deliberately disabled me from hearing any submissions by counsel on its behalf on the merits of the Application. So far as the merits may be relevant, I should say that I carefully examined as best I can the merits on the material before me and concluded that the Application, if tried on its merits, would fail. It is sufficient to say: (1) that it would be highly unsatisfactory to try the issues of fraud and forgery on the Application and on the evidence now before the courts. There has been no disclosure. The Defendant has refused to agree that the parties’ experts should exchange reports, prepare a joint report and attend for cross-examination, on the issue of the authenticity of the JVA at the same time as that of the CSA. There are practically identical issues in relation to both documents and in particular whether the Defendant forged them both; (2) it is remarkable that the Defendant (and in particular Mr Nasim) only “remembered” that the CSA had been executed in April 2007. The evidence explaining by whom, how and why instructions were then for the first time given which led to the discovery of the document in 2007 is deficient and unsatisfactory; (3) at the least the parties appear never to have proceeded on the basis that their rights and obligations were governed by the CSA. Mr Nasim apparently never had the document in mind from the moment it was executed; (4) there are grounds supporting the Claimant’s claim that the Claimant’s signature may have been incorporated in the document to mislead the Malaysian Custom Authorities. In this context it is relevant that the Defendant’s “reason” for abandoning the Application appears to be so insubstantial and so disproportionate to the relief sought that it is in my judgment to be categorised as a “pretext” rather than a genuine reason and the inference may be drawn that the Defendant is anxious that the court should not decide (as it otherwise would be free to decide) the authenticity of the CSA Agreement; (5) it would in my view be a complete waste of costs and court time, as well as unfair on the Claimant, that the experts and the court should have to decide the authenticity of the CSA in isolation from consideration of the authenticity of the JVA.

Taking account of all the circumstances, faced with the application for an adjournment, justice requires that the court should refuse an adjournment and dismiss the Application. I should add that to facilitate the court in deciding expeditiously (when the decision comes to be made) whether the CSA and the JVA are authentic, it is appropriate that one or both parties (indeed if necessary the court) immediately write or writes to the Malaysian Customs Authority enclosing a copy of this judgment, a copy of the CSA and a copy of Customs declarations requesting to the authority to assist the court as best it can on the issue of authenticity and the prices declared by the Defendant to the authority. The Defendant has no ground for concern if (as he states) the CSA is authentic.