Samara v MBI & Partners UK Ltd (t/a M.B.I. International & Partners Co) & Ors

MBI & Partners UK Ltd (MBI) are applying, pursuant to CPR 13.3, to set aside the default judgment entered against them in these proceedings as long ago as 13 February 2012. Much has happened in the four years since Master Fontaine entered judgment in default. Michael Beloff QC, who now represents MBI, describes the circumstances surrounding this application as unique. I agree. Their uniqueness seems to me to arise from the amount of litigation generated by an apparently straightforward claim by Mr Samara for unpaid salary, in the form of a claim for damages for breach of his employment contract.

This is in fact the second application by MBI to set aside the judgment entered in default. The procedural history, in summary, is that Master Fontaine dismissed the first such application and Mr Justice Silber dismissed MBI’s appeal against her judgment. No appeal was brought against the decision of Mr Justice Silber. There was then, in late 2014, a four day trial in the High Court to determine MBI’s allegation that Mr Samara’s claim was fraudulent. The judge found against MBI and the Court of Appeal has refused MBI’s renewed application for permission to appeal against that judgment. It is against that background that MBI have now issued this second application to set the default judgment aside.

The questions arising before me are whether there is jurisdiction to consider a second application under CPR 13.3; if so whether, as Mr Devonshire QC contends, this further application, in respect of issues already litigated and determined against MBI, is an abuse of process; whether, as Mr Beloff contends, there has been a material change of circumstances since MBI’s first application was dismissed; and, if I accept that there has been such a change, whether I should now grant this application and set aside the judgment in default. If the judgment is set aside, Mr Beloff submits either that summary judgment should be entered in MBI’s favour, or that I should give directions for a further trial in this matter.

It is necessary to set out the background and procedural history in some detail, so that the issues arising for determination on this second application may be properly understood.

The relevant background appears from the judgment of Mr Justice Silber, handed down on 4 March 2014. Mr Samara, who is a US national, entered into two written employment contracts with the Defendant companies, each dated 8 December 2001. Under the first “AJWA contract” Mr Samara would be employed by AJWA as General Manager in Saudi Arabia. The second “MBI contract” was a tri-partite contract between Mr Samara, AJWA and MBI, under which AJWA would lend Mr Samara’s services to MBI.

The Defendants are separate companies but Sheikh Mohamed Bin Issa Al Jaber is the Chairman of AJWA, as well as being the controlling agent of the MBI group of companies, of which the First named Defendant is a subsidiary. Mr Samara’s case is that Sheikh Mohamed personally offered him employment under both these contracts at a meeting in Paris, after several previous meetings between Mr Samara and the accounting firm Arthur Andersen about the nature of his anticipated role as General Manager.

Mr Samara then commenced work under those contracts. In proceedings issued on 29 March 2011 he alleged that he had not been paid sums which were due to him under the MBI contract. He claimed from the First Defendant the sterling equivalent of the sums due and owing, amounting to £235,376.60 excluding interest.

The pleaded dates of Mr Samara’s employment under the MBI contract were from January 2002 to 31 March 2005, when Mr Samara claims that he accepted MBI’s repudiation of the contract, with effect from that date. The Claim Form was not issued until 29 March 2011 and the Particulars of Claim were only filed and served on 27 July 2011. It appears that before issuing the claim in this country Mr Samara had instructed lawyers and pursued proceedings in the labour courts in Saudi Arabia, which were ultimately unsuccessful.

At paragraph 2 of his Particulars of Claim Mr Samara identified the First Defendant as “…a large conglomerate of companies (‘the MBI group’) operating across Europe, the Middle East and the United States. Its registered office is at 78-80 Wigmore Street, London W1U 2SJ.” His case has always been that he named MBI & Partners UK Ltd as the First Defendant because he had discovered that the party named in the MBI Contract, namely “M.B.I. International & Partners Co.”, was the trading name of the company registered in the UK.

MBI were served with the Claim Form, the Particulars of Claim and a copy of the MBI Contract on 27 July 2011. On 28 July 2011 Theodosia Petropanagiotaki of MBI responded to Mr Samara’s solicitors by email alleging that “…there is no link between MBI & Partners UK Limited (“MBI UK”) and your Client. We suspect that your Client’s alleged claim is aimed against other legal entities for which MBI UK is certainly not the agent for service of legal process and does not even share the same registered address.” Ms Petropanagiotaki wrote a further letter, dated 3 August 2011, in which she stated that “…the documents you sent were to the office address of MBI & Partners Limited, this company is not trading as MBI International & Partners Co and is not the agent for service of legal process for any such trading company.” Ms Petropanagiotaki’s signature on both of these communications identified her as “Corporate Lawyer, MBI International & Partners”.

MBI did not file an Acknowledgment of Service and so the last date on which a Defence had to be served was 11 August 2011. Neither an Acknowledgment of Service nor a Defence was filed within the time limits prescribed by the CPR or indeed at all.

On 24 August 2011 Mr Samara’s solicitor, Ms Randall, applied for default judgment and on 20 September Master Fontaine gave permission to enter judgment against MBI in default. On 19 December 2011 Ms Randall requested a short hearing for the purposes of summary assessment of their costs. That hearing was fixed for 13 February 2012 and notice of the hearing was sent to MBI on 20 January 2012. Before the hearing Mr Salfiti, MBI’s in-house lawyer, telephoned Ms Randall and invited her to agree to MBI filing a Defence out of time. Ms Randall declined that invitation.

At the hearing on 13 February both parties were represented and Mr Salfiti made submissions as to costs on MBI’s behalf. Default judgment was entered in favour of Mr Samara in the sum of £363,442.47, inclusive of interest, and his costs were summarily assessed in the sum of £12,530.20.

A copy of Master Fontaine’s Order was sent to Mr Salfiti on 14 February 2012 with a notice saying that, if MBI failed to make payment within 14 days, enforcement proceedings would follow. On 1 March 2012 Mr Salfiti telephoned Ms Randall and stated that MBI intended to apply to set aside the default judgment. In a follow-up email he invited Ms Randall to agree to such an application, failing which he would invite the court to consider wasted costs. Ms Randall was absent from the firm through illness at this time and on her return she wanted to take instructions from her client before responding. She told Mr Salfiti this on 27 March 2012, when they spoke once more on the phone. She made it clear to him in that conversation that, although she would endeavour to speak to her client, it was a matter for him whether or not he made the application to set aside and, if so, when.

In fact, MBI did not make an application to have the default judgment set aside until 21 May 2013, almost 16 months after they were first aware of the judgment in default entered against them. It appears that it was the arrival of High Court Enforcement Officers at MBI’s offices on 16 May 2013 that prompted them to take action. Mr Salfiti telephoned Mr Ferguson, a senior partner with Mr Samara’s solicitors, and it was agreed that the Officers would be instructed to take no further enforcement action, on the understanding that an application to set aside the judgment would be made and served by 4 pm on 21 May.

Mr Ferguson gave those instructions but surprisingly, notwithstanding that agreement and without informing Mr Ferguson, MBI made an ex parte application to this court on that same day for a stay of enforcement and for a stay of the default judgment. This application came before Mr Justice Singh in the interim applications court, who granted the injunctive relief sought.

As Master Fontaine pointed out, in her judgment dismissing the first application to set aside judgment in default, this was not the correct procedure. Further, the relief sought was not simply an order for a stay of execution, but an order for an injunction prohibiting Mr Samara from enforcing the judgment under penalty of imprisonment. The order was served on the following day, but no attendance note of the hearing was attached and nor were Mr Salfiti’s witness statement and exhibits provided initially. Ms Randall disputed a number of the assertions set out in Mr Salfiti’s statement. Master Fontaine found that it was clear to her on the evidence that Mr Justice Singh, “…was not given all the correct information and there was not full and frank disclosure.”

On 21 May 2013 the solicitors then acting for MBI, LZW Law Limited, issued an Application Notice seeking an order that the default judgment be set aside, on the basis that “…the Defendants have a legal defence to the claim, namely one of limitation and jurisdiction.” A draft Defence was attached and the statement of Carmine Procaccini of LZW Law described these as the two main arguments showing that MBI had real prospects of success. Both contracts of employment were said to contain jurisdictional clauses stating that they were subject to the laws and the jurisdiction of the courts of the Kingdom of Saudi Arabia. Further, since Mr Samara was said to have resigned from his employment with AJWA on 30 September 2004 and with MBI on 29 January 2005, the claims were now statute barred, as a matter of both Saudi law and English law, the Claim Form having not having been issued until 29 March 2011.

The application was heard by Master Fontaine on 23 July 2013. At that hearing although there had been no reference to MBI being the wrong Defendant, either in the Application Notice or in Mr Procaccini’s statement in support, counsel then appearing for MBI, Mr Gloag, sought to raise it as a third ground for defending the claim, in addition to limitation and jurisdiction.

In rejecting the jurisdiction defence, Master Fontaine found that MBI had already submitted to the jurisdiction by making the application before her and requesting permission to defend the claim. No application had been made under CPR Part 11 and no application had been made to extend time for filing an Acknowledgment of Service. The Defendants had therefore not retained the right to dispute jurisdiction.

In relation to the ‘wrong Defendant’ defence the Master found as follows, at paragraphs 15-16 of her judgment:

“15.

First, it is said that the first defendant, MBI & Partners UK Ltd., is, in fact, the wrong defendant, I have been referred to a copy of the contract which is sued upon by the claimant, to which the parties are the second defendant, MBI International & Partners Co., and the claimant. The claim is brought against MBI & Partners UK Ltd. trading as MBI International & Partners Co. In para.2 of the defence it simply states:

‘It is denied that the First Defendant trades as MBI International & Partners Co.’.

Although this is not a ground relied on in Mr. Procaccini’s witness statement or in the application notice, it is relied on in Mr. Salfiti’s witness statement in support of the injunction application to stay enforcement and in emails between the parties. There is no further information provided about that issue. It appears from submissions made today on behalf of the first defendant that MBI & Partners UK Ltd. are part of a group of companies that are run or controlled by Sheikh Mohamed Bin Issa Al Jaber.

16.

The details of the draft defence, which engage with the merits of the claim, in particular the contract of employment that is sued upon, suggests in my judgment, that the first defendant is aware of the details of the contract; it is able to put forward a defence in response to it, even though it says it is not the correct defendant, but there is no attempt to explain who is the correct defendant. Presumably, as the defence engages with the claim in some degree of detail and as it seems to be the case that the first defendant takes its instructions from Sheikh Mohamed, who is named as the chairman of the second defendant, Sheikh Mohamed is aware of which company trades as MBI International & Partners Co. It does appear from the copy contracts that I have been provided with that those two companies, MBI International & Partners Co. and the second defendant, are related parties and possibly both controlled by Sheikh Mohamed. I say that with some uncertainty because the employment contract is not exhibited to either of the witness statements filed on behalf of the first defendant, nor is any explanation given as to how the first defendant, despite being said not to be a correct defendant, knows the details of all this and, if it does know the details, why it cannot state who is the correct defendant. There is simply a bald assertion, both in the defence and in Mr Salfiti’s witness statements and the emails that I have been taken to. So I cannot conclude, without some further information, that this ground would provide a real prospect of success given that the burden is on the first defendant to show a real prospect of success in this application.”

The limitation defence was, however, found to be a defence which had a real prospect of success. Although Mr Samara was arguing that time only started to run in April 2005, when Sheikh Mohamed agreed at a meeting that he would pay the sums due as soon as possible, at paragraph 23 the Master held:

“23.

If I were minded to exercise the court’s discretion to grant the application to set aside judgment, I accept that the issue of limitation would provide a defence with a real prospect of success because the claim, it seems to me, in respect of the agreed for payment, does not plead that there was a variation of the original contract by reason of that alleged agreement with the Sheikh but simply states an acceptance that money was due and a promise to pay.”

However, Master Fontaine refused to set aside the default judgment on the basis of delay, which she found on the evidence before her to be excessive and unexplained. There was no explanation in the witness statements as to why no action was taken between August 2011 and January 2012, when contact was first made with Mr Samara’s solicitors and the default judgment had yet to be entered. No application was made either before or at the hearing on 13 February 2012, and the court was not even asked to adjourn that hearing to enable an application to be made. No explanation was provided for the delay after that hearing until the telephone conversation between the parties on 27 March 2012.

There was then a delay of more than a year until the application was eventually made on 21 May 2013. The suggestion that MBI’s solicitors were waiting to see if the other side would agree to set aside the judgment was found to be “not credible”. At paragraph 27 the Master said that “…All solicitors are expected to know the terms of the rule which requires an application to set aside a default judgment to be made promptly. In circumstances where there had already been over a year’s delay, it was incumbent upon the first defendant, if it stood any chance of being successful on an application, to make such application immediately without waiting further to find out whether the claimant would agree to set aside judgment.”

Directing herself to the authorities relating to the need to act promptly, and reminding herself of the overriding objective, the Master’s decision, at paragraphs 30-31, was as follows:

“30.

… It will readily be apparent from the chronology that I have described that the way in which the first defendants have dealt with these proceedings has not been in accordance with the overriding objective. I do not consider that it would be in accordance with the overriding objective to grant an application made at least 16 months after the first defendant became aware of the judgment against it, with the most part of that period of delay unexplained.

31.

The delay in this case is so long and so unexplained, in particular where there was an attendance at the hearing in February 2012 but no action taken at all, that I do not consider that it would be appropriate to exercise the court’s discretion to set aside judgment. That is the case even where I have concluded that one ground of defence has a real prospect of success. The first defendant had every opportunity from at least 20th January 2012 to make an application, so there is no denial of access to justice. Accordingly, I will not set aside the default judgment.”

In refusing permission to appeal the Master indicated (page 26 of the transcript, lines 23-31) that, were it not for the long and unexplained delay, she would have been likely to grant the application on the basis of real prospects of success. Those prospects could have included the ‘wrong Defendant’ defence, but in respect of that matter the First Defendant had not advanced sufficient evidence, the burden being upon them to do so. “…The matter was in their hands as from at least 13^th February 2012 if not before and they could have taken action and probably obtained judgment being set aside.”

MBI then instructed new solicitors and counsel and applied, on 2 August 2013, for permission to appeal against Master Fontaine’s refusal to set aside the judgment. At the same time they applied for the claim to be struck out as an abuse of process on the basis, it was now said, that it was a fraudulent claim. This allegation, not advanced at the hearing before Master Fontaine, was referred to in fresh evidence, none of which was before the Master on 23 July.

The application for permission to appeal was refused on the papers. The application was then renewed at an oral hearing and Mr Justice Bean granted permission on 22 October 2013, on condition that MBI provided appropriate security by payment into court of £376,000. The money was paid into court.

After receipt of the proposed appeal bundle Mr Samara’s solicitors applied for the fresh evidence to be excluded from the hearing of the appeal. This application was heard by Mr Justice Cooke on 30 January 2014. There was now a second draft Defence before the court, in which MBI stated at paragraph 14.5 that “…whilst MBI International & Partners is a trading name for the First Defendant, MBI International & Partners Co (emphasis added) is not a trading name which has ever been used by the First Defendant.” It was expressly pleaded in this Defence that the written MBI contract had been fabricated by Mr Samara, that it had not been seen or authorised by MBI prior to the issue of these proceedings, and that Mr Samara had never had any involvement with MBI.

Unsurprisingly, Cooke J decided that the fraud issue would have to go to trial. He dismissed the strike out application but gave directions for the determination of the fraud allegation. In relation to the appeal he considered that MBI could not “…justify a Ladd v Marshall application to get this material in,” so that none of the evidence relating to the fraud claim would be considered as part of the appeal against the refusal to set aside the default judgment.

The transcript of this hearing before Cooke J shows that, during the general case management discussion with both parties, the judge raised with Derrick Dale QC, leading counsel then instructed on behalf of MBI, the need for the issues raised on the appeal to be determined, unless MBI were now prepared to concede the appeal and “hang their hat” entirely on the fraud claim. Mr Dale accepted, in relation to the appeal, that the jurisdiction defence was a problem for him, but he submitted that he clearly had a limitation defence, which was all he needed for the purposes of the appeal. Nothing was said at this hearing as to the ‘wrong Defendant’ defence. In general terms, now that fraud and forgery were being alleged, Mr Dale accepted that the appeal against Master Fontaine’s decision “pales into insignificance.”

On behalf of Mr Samara Mr Devonshire QC relies upon the approach adopted by MBI at this hearing; upon the views expressed by Cooke J as to the merits and likely prospects of success for the appeal, absent the allegation that the default judgment had been obtained by fraud; and upon the judge’s invitation, through Mr Dale, for MBI to consider their position regarding the appeal.

In my view, given the fraud allegations now being pursued, it is clear that the judge was seeking at this hearing to ensure finality. Addressing Mr Dale he observed that if the appeal were “... not determined and there is then a fraud trial which you lose, I do not want to have a yet further hearing dealing with the original matters raised in your appeal that have not been dealt with.” He agreed with the proposition advanced by counsel for Mr Samara that, if the fraud claim failed and the appeal also failed, “…the claimant clearly should have his judgment,” which in fact he already had. He went on to state that “…everything hangs fire in terms of execution until such time as the fraud issue is determined.”

Mr Dale was not in a position at this hearing to receive any instructions in relation to the appeal, and both counsel agreed that directions should be given for the fraud trial to take place. A comprehensive order was made in this respect for a trial with a time estimate of 3-4 days.

In the event MBI decided to pursue the appeal against Master Fontaine’s order, which was heard by Mr Justice Silber on 7 February 2014. The appeal was dismissed. At the hearing, in terms of showing real prospects of successfully defending the claim, Silber J noted that of the three grounds advanced in the draft Defence two of them (the jurisdiction and ‘wrong Defendant’ points) were no longer pursued. The only defence relied on at the appeal was limitation, in respect of which there was no challenge to the Master’s decision that this was a defence which had real prospects of success.

It was unclear before me why the ‘wrong Defendant’ defence was not pursued on appeal. Mr Devonshire suggests that this was a tactical decision, there being an obvious tension between the defence as it is now being advanced and the allegations of fraud and forgery then being pursued. Mr Beloff suggests that it may have been thought that the limitation point was a stronger one, and he points out that the material being relied upon in support of this second application was not then available.

In his judgment handed down on 4 March 2014, Mr Justice Silber considered the Master’s decision on delay in the light of both the “Old Regime” and the “New Regime”, implementing the proposals of Sir Rupert Jackson, which came into force on 1 April 2013. There was no express statement that CPR Part 13 or any part of it was excluded from the changes to the overriding objectives in CPR 1.1. Having regard to Mitchell v News Group [2013] EWCA Civ 1537, the judge decided that the new, more robust approach applied to the application to set aside the default judgment under CPR 13.3.

He concluded, in respect of the nature and extent of the delay, that,

“50.

In my view, the Master was entitled to accept the evidence of Miss Randall that she had made it clear to Mr Salfiti that he should not wait for a consensus because that was not the way forward. It is noteworthy that Ms Randall made it very clear when she said in the conversation ‘you don’t need to wait for my response if you want to make the application [to set aside the default judgment] you can’ and that Mr Salfiti then also said ‘ok we will make the application anyway’. This was a clear case of a serious, sustained and inexcusable failure by the First Defendant and its legal adviser Mr Salfiti to comply with the well-known and important obligations to make a prompt application to set aside judgment entered in default, probably as a result of inefficiency on the first Defendant’s part.”

He rejected the argument that the Master erred in finding that there was excessive delay and considered, applying the new regime, that the Master “…was entitled, if not obliged, to reach the decision to refuse to set aside the judgment for the reasons which she gave.” The default was not trivial and there was no good reason for the failure to apply promptly, which he considered was a consequence of inefficiency. Even if he were wrong in finding that the new regime applied, the answer was the same under the old regime, since “…The totally unexplained and lengthy delay would trump by a substantial margin the countervailing factors relied on by Mr Dale…” And to allow the appeal would be “…to fail to give adequate weight to the need for the application to set aside the judgment to be made promptly.”

MBI did not seek permission to appeal against this judgment.

The parties continued to prepare for the fraud trial, which took place eight months later between 27 November and 2 December 2014, before HHJ Graham Wood QC sitting as a Judge of the High Court. New solicitors and counsel had been instructed by MBI shortly after their appeal was dismissed by Silber J but then, on 18 November 2014, different solicitors and new leading counsel, Michael Booth QC, were instructed for the fraud trial.

The fraud claim was advanced in two ways. MBI’s primary allegation was that Mr Samara had fabricated the written MBI contract. The subsidiary allegation was that, even if the contract were genuine, Mr Samara had fraudulently misrepresented the position in various ways when he pleaded that the relationship between the parties was governed by that contract. Both Mr Samara and Sheikh Mohamed gave evidence at trial.

After careful consideration of the oral and documentary evidence the judge rejected both allegations. He concluded, in relation to the primary allegation, that MBI had failed to establish that the MBI contract was fraudulently formulated or forged, either by Mr Samara himself or by others acting on his instructions.

The judge also rejected the subsidiary allegation that Mr Samara had set out to deceive the court by claiming that MBI was the corporate entity liable to him under the MBI contract. On the balance of probabilities he said that he would have no difficulty in coming to the conclusion that “…the Claimant, who otherwise bears no burden of proof, had entered into what he perceived as a genuine and enforceable arrangement for the payment of his remuneration.” The representation that he had worked pursuant to the MBI contract until 31 March 2005 “…was not a false assertion, or one made by the Claimant in which he did not have a genuine and honest belief, that he was working for MBI throughout this period in one form or another, and that the Defendant was properly expressed to be the legal entity contractually responsible to him.”

Nor was the representation that he had a legitimate claim to monies from MBI, over and above settlement monies paid to him by AJWA, a false representation. The judge said he had little doubt “…that the Claimant has always pursued what he perceived to be a legitimate claim against MBI and pursuant to the MBI contract, and in this regard...the Defendant has not established the lack of an honest and genuine belief.”

In relation, more generally, to the credibility and reliability of the evidence given by Mr Samara, the judge found that he was “…a thoroughly sincere and honest witness without guile, who is highly unlikely to have contrived the tapestry of fabricated documentation and lying statements which is suggested of him.”

MBI sought permission to appeal against this judgment. Permission was refused, first by HHJ Wood QC and then by Christopher Clarke LJ on the papers. MBI then changed solicitors and counsel once again and now applied to amend their grounds of appeal and to add further grounds. These focussed on the fraudulent representation claims and attacked the judge’s findings on the subsidiary allegation. Essentially, relying, at paragraph 7 of the appellant’s written statement, on a number of extracts from the oral evidence given by Mr Samara at trial, it was said that he had made concessions which were inconsistent with his pleaded case and inconsistent with an honest and genuine belief that he had a contractual relationship with MBI as his employer, and that the judge was wrong to dismiss those claims.

Michael Brindle QC appeared for MBI on the renewed application for permission, heard on 28 October 2015 before Sir Stanley Burnton, who refused permission to appeal. In a short judgment, referring to the extracts from Mr Samara’s evidence which were being relied upon, Sir Stanley described them as “…a quite honest appreciation of the facts relating to the identity of the defendant.” However, the substance of the claim against Mr Samara was that his claim was dishonest. At paragraphs 7-9 the judge said as follows:

“7.

… The question is not whether he had reasonable grounds or did not have reasonable grounds for identifying this particular company, MBI & Partners UK Limited, as the defendant. If this were simply an application to set aside the default judgment, I unhesitatingly would allow it because clearly there was, or could have been, an issue as to its identity. But the question now is whether there is an arguable case that he dishonestly identified the defendant as the entity which was his employer and which was liable to him.

8.

When I read the judgment as a whole, it is quite clear that the allegation of his dishonesty was substantially rejected. In my judgment, it is not enough to point to passages in Mr Samara’s evidence where he effectively admits that he had no evidence against MBI & Partners UK Limited. What must be shown is that he dishonestly alleged that MBI & Partners UK Limited was the party liable to him, and the judgment as a whole, in which Mr Samara’s evidence was extensively addressed, is quite inconsistent with that; as, it seems to me, is his frankness and candour in accepting that there was nothing that he knew to identify MBI & Partners UK Limited.

9.

In my judgment, given the importance of an allegation of fraud raised at this stage and one which accepts the finding that the contract itself was a genuine contract, it would not be right to grant permission to appeal to raise the subsidiary case on what would have to be a new trial.”

Mr Samara’s solicitor then applied on 6 November 2015 for payment out of the funds in court. In response, and relying on the observations of Sir Stanley Burnton at paragraph 7, to the effect that he would have allowed the application if it had been an application to set aside the default judgment, MBI’s solicitors stated that MBI now intended to make a further application to set aside the default judgment and sought a stay of execution until that application was determined.

Considering the correspondence between the parties and the court, and the competing contentions as to the permissible route, if any, for such a challenge, Master Fontaine stayed Mr Samara’s application for payment out, on condition that MBI paid a further sum of money into court to reflect the likely costs of whatever application was made by MBI. In her email of 11 November the Master observed, referring to CPR 13.3, that “…it is moot whether or not a further application can be made on fresh evidence. I have not been able to find anything in the Rules which permit this, although Rule 52.17 does provide a mechanism whereby the determination of a final appeal can be reopened, but I note that this is not the course proposed.”

By Order dated 2 December the Master ordered a stay on condition that, by 16 December 2015, MBI lodged “…an application either to set aside the Default Judgment entered on 13 February 2012 under CPR Part13.2 and/or CPR Part 13.3, and/or CPR Part 3.1, and/or CPR Part 24 and/or for permission to appeal the judgment of Silber J dated 4^th March 2014.” In fact, in their Application Notice issued on 16 December, MBI have advanced a fresh application under CPR 13.3 for the default judgment to be set aside, and for summary judgment be entered in their favour under CPR 24.

In their accompanying Statement of Remedies and Grounds, MBI advance the following grounds for this application, which I summarise as follows: (i) relying on the extracts from Mr Samara’s oral evidence at the fraud trial and on the observations of Sir Stanley Burnton when refusing permission to appeal, it is said that MBI have a real prospect of successfully defending the claim on the basis that MBI was not the actual party to the contract and was therefore the wrong defendant, and Mr Samara had effectively admitted that he had no evidence against MBI; (ii) that Mr Samara “…did not inform the Court” of those matters contained in the extracts from his evidence, either at the hearing to enter the default judgment on 13 February 2012, or at the hearing of the application to set it aside on 23 July 2013; (iii) MBI only learned what Mr Samara’s evidence was about this when they saw his witness statement dated 11 November 2014 and cross-examined him at trial, so they could not rely on these matters before then, and this application, made after first seeking permission to appeal against the fraud judgment, cannot be said to be an abuse of process; and (iv) MBI made this application promptly after permission to appeal was refused and the transcript of Sir Stanley Burnton’s remarks was available.

CPR 13.3 provides, so far as is relevant:

“Cases where the court may set aside or vary judgment entered under Part 12

13.3

(1) In any other case, the court may set aside or vary a judgment entered under Part 12 if -

(a)

the defendant has a real prospect of successfully defending the claim; or

(b)

it appears to the court that there is some other good reason why-

(i)

the judgment should be set aside or varied; or

(ii)

the defendant should be allowed to defend the claim.

(2)

In considering whether to set aside or vary a judgment entered under Part 12, the matters to which the court must have regard include whether the person seeking to set aside the judgment made an application to do so promptly.

(Rule 3.1(3) provides that the court may attach conditions when it makes an order.) ….”

Mr Beloff relies upon CPR 13.3(1) (a) or (b)(ii) in making this application and the issues to be determined are these: (1) Whether the court has jurisdiction to consider a further application under CPR 13.3. (2) If so, whether the application is an abuse of process. (3) Whether, in the light of the allegedly new material now relied on, there has been a material change of circumstances since the first application, showing real prospects of successfully defending the claim or a good reason for MBI to be allowed to defend it. (4) If so, whether in the exercise of my discretion I should now set aside the judgment in default. (5) If the judgment is set aside, whether there should be summary judgment entered in favour of MBI or directions given for a further trial.

MBI’s Statement of Remedies and Grounds was silent on the juridical basis for the asserted entitlement to bring a second application under CPR 13.3. In the skeleton argument served on behalf of MBI that basis is identified in the following terms. Relying on Tibbles v SIG Plc [2012] 1 WLR 2591 and Thevarajah v Riordan [2016] 1 WLR 76 it is said that MBI may bring this second application to set aside the default judgment if they can show, as they now allege, that there has been a significant change in circumstances since the default judgment was entered, or that they have become aware of facts that they could not reasonably have known, or found out, before the default judgment was entered, or where the facts on which the original decision was made were misstated.

Mr Beloff developed this submission in oral argument. He accepts, in light of the authorities, that the provisions of CPR Parts 12 and 13 are a “self-contained regime” governing default judgments. He also accepts that the order made by Master Fontaine on 13 February 2012 was a final order. He submits that such an order is sui generis. His primary submission is that it is therefore unnecessary for a party seeking to set aside a default judgment to invoke the criteria which attach to the exercise of the court’s power to vary or revoke an order under the case management provisions of CPR 3.1(7).

He submits that there is no bar to making a second application under CPR 13.3. The rule does not say that an application can only be made once and there is no reason in principle why a second application should not be permitted. The principle of finality must be tempered by the need to ensure justice and a second application should be considered on its merits. Mr Justice Silber’s decision on the appeal was arrived at on the basis of the facts that were then before him, but the position has now changed.

To the extent that it is necessary, in making this second application, to incorporate the criteria applicable to the exercise of the court’s powers contained in CPR 3.1(7), Mr Beloff submits that these criteria are met in this case, in that there has been a material change of circumstances showing that the court was misled on the first occasion as to the correct factual position. Relying in this respect upon Thevarajah and Tibbles he submits that this court has jurisdiction to consider a second application under CPR 13.3.

Mr Devonshire submits that this court has no jurisdiction to determine a second application under CPR 13.3, where an application to set aside under that rule has already been made, determined and dismissed, and where an appeal against that dismissal was pursued and lost. The order of Silber J on 4 March 2014, following full argument at a hearing when MBI were represented by leading and junior counsel, is a final order binding on both parties, which is determinative of the issue whether the default judgment entered against MBI should be set aside. The only possible routes open to MBI to challenge this order would have been to seek to appeal out of time against the order of Mr Justice Silber, under CPR 52.13, or to seek to re-open the final determination of the appeal in the highly restrictive circumstances allowed for by CPR 52.17. Mr Devonshire suggests that MBI are aware that neither application would have stood any real chance of success, and that the attempt to circumvent the high threshold under CPR 52.17 by making the present application under CPR 13.3 is itself an abuse.

In considering the competing submissions the starting point, as it seems to me, is the undisputed fact that the order of Mr Justice Silber on 4 March 2014 was a final order, thereby finally determining between Mr Samara and MBI the question whether the default judgment entered on 13 February 2012 should be set aside. MBI did not appeal against that order. It is a long and well-established principle that once a final order has been sealed by the court the judge is functus officio and the only way forward is for a dissatisfied party to appeal (see Carleton (Earl of Malmesbury) v Strutt & Parker [2007] EWHC 2199 QB.)

Putting to one side the arguments as to the applicability of CPR 3.1(7) in this context, I do not accept Mr Beloff’s submission that a party may have a second bite at the CPR 13.3 cherry if the position has changed since the issue was determined on appeal. While that rule does not expressly prohibit a second application, the principle of finality requires, in the interests both of justice and of litigants generally, that a final order between the parties remains a final order. If there is a perceived injustice in any particular case, arising from subsequently discovered events, I agree with Mr Devonshire that the only potential route open to a party to challenge a final order on appeal would be to seek permission either to bring a second appeal out of time, under CPR 52.13, or to reopen the final appeal under CPR 52.17.

The thresholds to be surmounted under these rules are high, in particular under CPR 52.17, and they contain important procedural safeguards. The final order on appeal in this case was sealed almost two years ago. Under CPR 52.13, it would have been necessary for MBI to show that a second appeal would raise an important point of principle or practice, or that there is some other compelling reason for the Court of Appeal to hear it. Under CPR 52.17 they would have needed to persuade the Court of Appeal that it was necessary to reopen the appeal in order to avoid real injustice; that the circumstances were exceptional and made it appropriate to reopen the appeal; and that there was no alternative effective remedy. There is no right to an oral hearing of an application for permission under this rule unless, exceptionally, the judge so directs, and the application for permission must be served on the other party to the original appeal to give him an opportunity to make representations.

If Mr Beloff’s submissions were correct and it was always open to a party, in the circumstances of this case, to make a second application to set aside a default judgment under CPR 13.3, the protections afforded to litigants by CPR Part 52 would indeed be circumvented and the principle of finality eroded. If MBI considered that the integrity of the original appeal had been undermined, as a result of some answers given by Mr Samara in cross-examination at the fraud trial, they should have applied either to pursue a further appeal out of time, on the basis that there was a compelling reason for the Court of Appeal to entertain a second appeal, or, alternatively, to re-open the appeal under CPR 52.

I also reject the submission that is it is possible to launch a fresh application under CPR 13.3 by reference to CPR 3.1(7), relying upon Thevarajah and Tibbles. Both of those cases were concerned with the exercise of discretionary case management powers under CPR 3.1(7) in relation to interlocutory orders. The court was not addressing a party’s entitlement to make a second application to set aside a default judgment under CPR 13.3, in respect of issues already litigated and decided against it in a final order.

The applicability of CPR 3.1(7) to final orders was addressed in Roult v North West Strategic Health Authority [201] 1 WLR 487, where the Court of Appeal dismissed an appeal against a judge’s refusal to reopen a final order approving a settlement in a personal injury action, found to have been based on a false assumption as to the claimant’s future living arrangements. Hughes LJ, with whom the other members of the court agreed, said this at paragraph 15:

“15 There is scant authority upon rule 3.1(7) but such as exists is unanimous in holding that it cannot constitute a power in a judge to hear an appeal from himself in respect of a final order. Neuberger J said as much in Customs and Excise v Anchor Foods (No 2) The Times, 28 September 1999. So did Patten J in Lloyds Investment (Scandinavia) Ltd v Ager-Hanssen [2003] EWHC 1740 (Ch). His general approach was approved by this court, in the context of case management decisions, in Collier v Williams [2006] 1 WLR 1945. I agree that in its terms the rule is not expressly confined to procedural orders. Like Patten J in the Ager-Hanssen case [2003] EWHC 1740 I would not attempt any exhaustive classification of the circumstances in which it may be proper to invoke it. I am however in no doubt that CPR r 3.1(7) cannot bear the weight which Mr Grime’s argument seeks to place upon it. If it could, it would come close to permitting any party to ask any judge to review his own decision and, in effect, to hear an appeal from himself, on the basis of some subsequent event. It would certainly permit any party to ask the judge to review his own decision when it is not suggested that he made any error. It may well be that, in the context of essentially case management decisions, the grounds for invoking the rule will generally fall into one or other of the two categories of (i) erroneous information at the time of the original order or (ii) subsequent event destroying the basis on which it was made. The exigencies of case management may well call for a variation in planning from time to time in the light of developments. There may possibly be examples of non-procedural but continuing orders which may call for revocation or variation as they continue – an interlocutory injunction may be one. But it does not follow that wherever one or other of the two assertions mentioned (erroneous information and subsequent event) can be made, then any party can return to the trial judge and ask him to reopen any decision. In particular, it does not follow, I have no doubt, where the judge’s order is a final one disposing of the case, whether in whole or in part. And it especially does not apply where the order is founded upon a settlement agreed between the parties after the most detailed and highly skilled advice. The interests of justice, and of litigants generally, require that a final order remains such unless proper grounds for appeal exist.”

Further, as Mr Beloff accepts, default judgments have their own self-contained regime under the CPR. In S v Beach [2015] 1 WLR 2701, the second defendant applied to set aside a judgment entered in default of acknowledgment of service, the court having granted the final injunction sought. The claimant argued that it was not enough for the defendant to satisfy the requirements of CPR 13.3 and that he also had to persuade the court to revoke the order pursuant to its general case management powers in CPR 3.1(7).

Rejecting that submission Warby J held as follows at paragraph 49:

“The submission that it is necessary for a party seeking to set aside a default judgment successfully to invoke CPR r 3.1(7) if there is not merely a default judgment but also an order such as a final injunction is novel and I do not accept it. I can see no good reason for regarding the provisions of CPR Pts 12 and 13 as anything other than a self-contained regime governing the procedure for the grant, variation or setting aside of judgment and all such orders as the court considers the claimant is entitled to where the conditions prescribed by these rules are, or are alleged to be satisfied.”

I respectfully agree with those observations. In my judgment MBI cannot use CPR 3.1(7) in an attempt to support a second application under CPR 13.3 in this case.

Even if there were a discretionary power under CPR 3.1(7) to vary or revoke the final order made by Mr Justice Silber on appeal, or to enable the court to entertain a second application under CPR 13.3 in circumstances such as those described in Theverajah and Tibbles, I have no hesitation in concluding that that the relevant tests are simply not met in this case.

Those tests were identified in Tibbles by Rix LJ, with whom the other members of the court agreed, at paragraph 39 of his judgment as follows (so far as is relevant):

“ (i) Despite occasional references to a possible distinction between jurisdiction and discretion in the operation of CPR r 3.1(7), there is in all probability no line to be drawn between the two. The rule is apparently broad and unfettered, but considerations of finality, the undesirability of allowing litigants to have two bites at the cherry, and the need to avoid undermining the concept of appeal, all push towards a principled curtailment of an otherwise apparently open discretion. Whether that curtailment goes even further in the case of a final order does not arise in this appeal.

(ii)

The cases all warn against an attempt at an exhaustive definition of the circumstances in which a principled exercise of the discretion may arise. Subject to that, however, the jurisprudence has laid down firm guidance as to the primary circumstances in which the discretion may, as a matter of principle, be appropriately exercised, namely normally only (a) where there has been a material change of circumstances since the order was made, or (b) where the fact on which the original decision was made were (innocently or otherwise) misstated.

(iii)

It would be dangerous to treat the statement of these primary circumstances, originating with Patten J and approved in this court, as though it were a statute. That is not how jurisprudence operates, especially where there is a warning against the attempt at exhaustive definition.

(iv)

Thus there is room for debate in any particular case as to whether and to what extent, in the context of principle (b) in (ii) above, misstatement may include omission as well as positive misstatement, or concern argument as distinct from facts. In my judgment, this debate is likely ultimately to be a matter for the exercise of discretion in the circumstances of each case.

(v)

Similarly, questions may arise as to whether the misstatement (or omission) is conscious or unconscious; and whether the facts (or arguments) were known or unknown, knowable or unknowable. These, as it seems to me, are also factors going to discretion: but where the facts or arguments are known or ought to have been known as at the time of the original order, it is unlikely that the order can be revisited, and that must be still more strongly the case where the decision not to mention them is conscious or deliberate.

…

(vii)

The cases considered above suggest that the successful invocation of the rule is rare. Exceptional is a dangerous and sometimes misleading word: however, such is the interest of justice in the finality of the court’s orders that it ought normally to take something out of the ordinary to lead to variation or revocation of an order, especially in the absence of a change of circumstances in an interlocutory situation.”

The curious logic of MBI’s submissions is the suggestion that they are in a better position now, despite losing the fraud trial, to demonstrate that they have real prospects of successfully defending this claim. However, this further application seems to me to cross the line clearly drawn by Cooke J on 30 January 2014, when seeking to achieve finality in this litigation and clarifying with counsel that, if both the appeal and the fraud claim were lost, Mr Samara would be entitled to enforce the judgment. What is now being sought is effectively a third bite at the cherry, having been unsuccessful both on the appeal and at the fraud trial.

The main difficulty with the case now being advanced by MBI is that they have already succeeded in demonstrating real prospects of successfully defending the claim, both when making the first application to set the judgment aside and then on appeal. It is correct that the emphasis was on different defences at different times, MBI choosing to pursue only the limitation defence at the appeal. However, both Master Fontaine and Mr Justice Silber refused to set aside the judgment, notwithstanding the fact that they considered MBI’s defence to have real prospects of success.

The application to set aside was lost because of what Mr Justice Silber described as the trumping effect of the totally unexplained and lengthy delay, which rendered Master Fontaine’s decision to refuse the application one which was well within her discretion and one which on the evidence he considered that she was entitled, if not obliged to reach. The important obligation upon a party to apply promptly for the discharge of a default judgment was held to be clear from the wording of the Rules and was well-known. As he found, MBI had acted in flagrant breach of that obligation and of the Rules.

The suggestion made now is, effectively, that there is new material available to enable MBI to advance a defence, which they previously failed to demonstrate before the Master and then chose not to pursue on appeal. Mr Devonshire disputes the suggestion that the material now being relied upon is new, or that it advances the defence, and disputes also the submission that evidence to advance that defence was previously unavailable, and I shall turn to those matters shortly.

However, even assuming that there was new evidence capable of advancing the ‘wrong defendant’ defence, the suggestion that this would tip the scales in favour of granting this second application to set the judgment aside seems to me to be fanciful.

Mr Beloff submits that there is a qualitative difference between a claimant innocently accepting on oath that he had no basis for identifying a named defendant, and the availability of a limitation defence to that defendant. For the purposes of an application under CPR 13.3 I cannot accept that submission. In terms of successfully defending a claim, and absent any element of fraud, the fact that a claim is statute-barred seems to me to offer prospects of success at least as real as those in which a claimant is said to have identified, albeit innocently, the wrong subsidiary in a large corporate group. Nor do I consider that the existence of two possible defences rather than one would have made any difference in the circumstances of this case.

The reasoned judgments of both Master Fontaine and Mr Justice Silber demonstrate irrefutably, in my view, that even if MBI had been able to show that (a) limitation and (b) an innocent failure to identify the correct MBI defendant provided them with defences having real prospects of success, the outcome would have been exactly the same, due to their inordinate delay and flagrant breach of the Rules.

In any event, however, I do not accept the submission that MBI have in fact demonstrated a material change of circumstances amounting to “something out of the ordinary”, such as to afford them real prospects of successfully defending this claim, or to amount to a good reason for allowing them to defend it.

In relation to the nature and impact of the material now being relied upon, I have examined with care the transcripts of the evidence given at trial by Mr Samara, including all the extracts selected and listed at paragraph 25 of the skeleton argument filed on MBI’s behalf. They include, for example, by way of his acceptance of positive assertions being put to him in cross-examination, the fact that his work under the MBI contract was for the Sheikh, and that MBI meant any company in the MBI Group rather than any particular group; the fact that he was told that the MBI company was a “Saudi company” and that he took no steps to identify the MBI company; and the fact that he considered it was for the Sheikh to determine from where the money owing to him was to be paid.

I note that many of the extracts listed in the skeleton argument were also previously listed in the Appellant’s Written Statement prepared for the permission hearing before Sir Stanley Burnton. Further extracts have now been added to the present list, no doubt after a meticulous trawl through the trial transcripts, which are said to provide still further examples of the “concessions” Mr Samara is said to have made at trial. These extracts were being relied upon before Sir Stanley Burnton in support of MBI’s submission that HHJ Wood QC was wrong to find that Mr Samara had an honest belief in the truth of the facts represented.

Therein lies MBI’s difficulty, as it seems to me. It is no longer open to MBI to contend that Mr Samara had no genuine and honest belief that MBI was the other company in a contractual relationship with him. Mr Beloff submits that, in making this application, MBI do not seek to go behind the findings as to honesty. Nevertheless it is said that Mr Samara’s honest belief does not dispose of the legitimacy of their argument, and that it does not follow from the fact that he honestly believed his claim had validity that, objectively, the claim was valid.

In the circumstances of this case, a high degree of mental gymnastics is required to follow that argument. Mr Samara was found to have an entirely honest and genuine belief that he had worked for MBI pursuant to the MBI contract until 31 March 2005, and that MBI was properly expressed to be the legal entity contractually responsible to him. He was also found to have advanced the claim in the genuine belief that he had identified and sued the right Defendant. The present attempt to demonstrate, from some of the answers Mr Samara gave at trial, that these assertions have been undermined; that the court was misled, albeit not deliberately; and that MBI now have a good ‘wrong defendant’ defence, despite having elected not to run that defence before Silber J on appeal is in my view a hopeless one.

When considering the listed extracts from Mr Samara’s evidence, they should not be viewed in isolation. It is important to have regard to the whole of the evidence he gave. When he was cross-examined Mr Samara was asked a great many questions about his knowledge of MBI and of MBI International & Partners as at the time he entered into the MBI contract. Other relevant extracts from his evidence, not contained in MBI’s list but referred to by Mr Ferguson in his witness statement, seem to me to include the following: his understanding that the MBI company named in the contract was a company within the Sheikh’s group of companies (Day 3, page 47, line 5); the fact that he understood that the company was called MBI International & Partners because that was the name appearing on the written contract he was given (Day 3, page 48, lines 23-25 and page 67, line 18); and the fact that he understood he would be working for the Sheikh and the MBI Group under both the AJWA and the MBI contracts (Day 3, page 46, lines 16-20, page 54, lines 10-14).

I accept Mr Devonshire’s submission that, read as a whole, Mr Samara’s evidence was not inconsistent with his pleaded case and does not establish that either Master Fontaine or Mr Justice Silber were in any sense misled, or that the claim against MBI was objectively invalid. Mr Samara’s case was always that he had accepted an offer to work for Sheikh Mohamed, who had told him that his remuneration package would be split between two contracts. As Silber J recorded in his judgment, while the two defendant companies are separate companies, Sheikh Mohamed is the controlling agent of the MBI companies of which MBI is a subsidiary.

In the world of employment law, as Mr Devonshire correctly observes, it is not at all unusual for people employed in large corporate groups to have a contractual relationship with a particular subsidiary, or with more than one subsidiary within the group, while providing services more widely across the group as a whole, or to the owners and controllers of the group. So long as that employee is paid the sums agreed and owing under the contract, the way that the group structures its affairs and its arrangements for payment of those sums is not a matter that he will inevitably have knowledge of, or be concerned about. If he is not paid and has to bring legal proceedings to recover monies owing he will usually identify the subsidiary by reference to the written contract that was supplied to him. That is what Mr Samara did.

Further, some support for his assertion that he understood MBI to be trading as MBI International & Partners Co was provided by Ms Petropanagiotaki’s email of 28/7/11 and letter of 3/8/11 describing herself as “Corporate Lawyer, MBI International & Partners”. It is also clear from the judgment given on the fraud claim that HHJ Wood QC considered that there was other evidence to support what Mr Samara was saying as to his contractual relationship with MBI. The judge referred, for example, to there being no explanation why MBI UK employees, Mr Brook and Mr Tangri, should have become involved in remuneration issues associated with AJWA, and he considered that the more likely explanation (see paragraph 110) was that “…there was some payment understood to be owing to the Claimant outside his AJWA employment.” The judge also regarded it as relevant that a substantial offshore payment was paid out of a Swiss bank account directly to Mr Samara (paragraph 112), which was difficult to regard as payment solely for travel expenses or sundries and difficult to reconcile with the involvement of Mr Brook in something that was said to have nothing to do with his MBI UK role.

For all these reasons I do not regard the extracts from Mr Samara’s evidence being relied upon by MBI as capable of bearing the weight that is now sought to be attached to them, albeit this time as alleged indicators of innocent rather than fraudulent representations as to the identity of the other party to his contract and to his claim.

As regards the remarks made recently by Sir Stanley Burnton, in the course of his judgment when refusing permission to appeal, MBI’s reliance upon them is misplaced. The judge was saying nothing further than that, on the basis of the material then before him, there was or could be an issue as to the correct defendant and that, if the only issue was whether they had shown an arguable ‘wrong defendant’ defence, he would have held that they had.

The particular observation relied upon by MBI is that “…if this were simply an application to set aside the default judgment, I unhesitatingly would allow it because there was, or is, an issue as to identity.” However, this observation must be read in its proper context. The judge was not here suggesting that a second application to set aside a default judgment, entered in February 2012 and maintained on appeal, could or should now be made. He was not required to consider and did not consider delay; and he did not review, or even refer to the judgments of Master Fontaine or Mr Justice Silber.

In fact the transcript shows that at the start of the hearing, after stating that he had looked at all the listed extracts from Mr Samara’s evidence, the judge indicated (page 3C) that the position might be different “…if this were an application in time to set aside the Judgment…” Those present could have understood from that observation only that the judge was referring to an application to set aside the default judgment made within the time prescribed in the rules. A little later on he referred back to this remark after further submissions on Mr Samara’s evidence, (page 5C) “…that is why I made the remark I did at the beginning, that if – if – if the question before me was: is that an arguable defence, well undoubtedly, but that is not the question.”

The question before the judge was the question he identified in his judgment at paragraph 7, namely whether there was now an arguable case that Mr Samara dishonestly identified MBI as the entity which was his employer and which was liable to him. In refusing permission he clearly concluded that the case was unarguable, and that was all he was determining at this hearing.

It would be obvious to MBI and to the legal representatives then appearing for them that, in the observation now relied upon, the judge was indicating only that he would have granted an application made in time to set aside the judgment in default. In that respect, there seems to me to be no difference in approach from that adopted by Master Fontaine and Mr Justice Silber, both of whom would undoubtedly have granted the application to set the judgment aside if it had been made promptly, given their finding that there were real prospects of MBI successfully defending the claim. Master Fontaine made it clear that those prospects would have included the ‘wrong Defendant’ defence if MBI had placed any evidence before her to demonstrate its viability.

The assertion in MBI’s Statement of Remedies that Mr Samara failed, on either 13 February 2012 or on 23 July 2013, to inform the court about his case in the terms he later advanced at the fraud trial, is, as Mr Devonshire submits, tantamount to an allegation of bad faith. In my judgment it is wholly unfounded.

At the hearing on 13 February 2012 there was no discussion about the substantive issues, the hearing being concerned with the assessment of Mr Samara’s costs. At the hearing, on 23 July 2013, of the first application to set judgment aside, the ‘wrong Defendant’ defence was not even identified in MBI’s application or witness statement in support. It was advanced and addressed only on the day of the hearing, in circumstances where the burden of showing the existence and merits of the defence was on MBI and where the Master held they had not discharged that burden. Further, the suggestion that Mr Samara had in some way deliberately misled the court in pursuing his claim against MBI and seeking judgment in default was comprehensively rejected by HHJ Wood QC at the fraud trial. The suggestion that he should have informed the court in, February 2012 or July 2013, of matters he later stated in cross-examination when being accused of fraud, is in my view unarguable.

I do not in any event accept the submission that MBI are only now able to advance this defence, armed with supposedly revelatory extracts from Mr Samara’s evidence at the fraud trial. The suggestion that this is new material, previously unavailable to MBI, is undermined by the fact that the answers given by Mr Samara were essentially in response to positive assertions being put to him when he was cross-examined by MBI’s counsel. I also have regard to Master Fontaine’s observations in her judgment as to the bald assertion being made that MBI was not the correct Defendant. The precise arrangements surrounding the employment of Mr Samara were clearly known to MBI, as Master Fontaine found at paragraphs 15-16 of her judgment (set out above). In their first draft Defence MBI had engaged with the merits of the claim, in terms which indicated that they were aware of the details of this contract and which led her to the view that they knew, but had not attempted to explain who the correct defendant was, if it was not MBI.

Whatever the reasons for not pursuing the ‘wrong Defendant’ defence on appeal, MBI could undoubtedly have adduced evidence in support of this defence long before any evidence given by Mr Samara about his contractual relationship with MBI. In any event, if they had made a prompt application to set aside the default judgment they would have been able to cross-examine Mr Samara about this at the trial of his claim. The assertion that they are only now able to rely upon answers given in cross-examination at the fraud trial is due to their own failure to make that application in the time prescribed by the Rules.

I would add that even if MBI were able to demonstrate a material change of circumstances, in accordance with the tests identified by Lord Justice Rix, this second application would fail as a result of the delay. I do not accept Mr Beloff’s submission that MBI were reasonably pursuing an appeal before embarking upon this second application to set aside, and that the date from which promptitude is to be measured should be 28 October 2015, when Sir Stanley Burnton dismissed the application for permission to appeal.

The need for celerity generally in complying with the CPR is given added emphasis in CPR 13.3, in relation to applications to set aside judgments entered in default. The judgment of HHJ Wood QC was circulated to the parties in draft on 11 December 2014 and handed down on 13 March 2015. Given that the basis for the second application under CPR 13.3 is Mr Samara’s evidence at that trial, all the information was then in the hands of MBI and in my view time would run from that date. The fact that MBI first pursued a misconceived appeal and were ultimately refused permission would not prevent a finding of culpable delay such as to lead to the refusal of relief under CPR 13.3.

For these reasons I reject all the arguments advanced in support of this second application to set aside judgment in default. In my judgment it is an application which is totally without merit.

Mr Devonshire submits in addition that this application is plainly abusive. He relies upon the court’s inherent jurisdiction to prevent its processes from abuse, and upon the provisions of s.49(2) of the Senior Courts Act 1981, providing that every court “shall so exercise its jurisdiction in every cause or matter before it as to secure that, so far as possible, all matters in dispute between the parties are completely and finally determined, and all multiplicity of legal proceedings with respect to any of those matters is avoided”.

He contends that the argument that MBI was not the correct Defendant is not new, having been raised in the course of argument at the hearing of the first application to set aside the judgment in default. It was rejected on its merits. Having then unsuccessfully alleged that Mr Samara acted fraudulently, MBI are now seeking to re-animate the defence previously rejected on its merits, having chosen not to pursue it on appeal. In so doing he submits that they are clearly reneging on the agreed position before Mr Justice Cooke that, if the appeal and the fraud trial were both lost, Mr Samara would be able to enforce the judgment. He submits that MBI’s conduct amounts to unjust harassment of Mr Samara and that the court should put a stop to it.

Mr Beloff submits that MBI are not seeking to reprise arguments they have already advanced. Rather they are seeking to adduce something new and to persuade a judge to take a different view. Relying on his earlier submissions that there has been a significant change of circumstances, in that Mr Samara has admitted that he identified the wrong Defendant, Mr Beloff repeats the submission that that this was not a matter that MBI could have raised before. Inviting me to adopt a broad, merits-based approach, he submits that this application cannot properly be said to amount to an abuse of process.

The relevant principles in considering abuse of process in the context of new claims or new points being advanced which could have been put forward earlier, are those set out in Johnson v Gore Wood & Co. [2002] 2 AC 1 at 31 and 33, per Lord Bingham and there is no dispute about them.

The basic rule is that a party should not be allowed to re-litigate issues which have already been decided by a court of competent jurisdiction. It is in the public interest that there should be finality in litigation and that a party is not twice vexed in the same matter. The rule serves the important purpose of protecting a party against the harassment necessarily involved in repeated actions concerning the same subject matter. In deciding whether a party is misusing or abusing the process of the court, the court should adopt a broad, merits-based judgment, which takes account of the public and private interests involved and of all the facts of the case.

Adopting that approach I have regard to the history of this litigation and, in particular, to the following factors. The first application to set aside was lost because of what Silber J found to be MBI’s serious, sustained and inexcusable failure to comply with the CPR and make the application promptly. The delay was not only excessive, but also unexplained.

Further, the issues raised now are not new, for the reasons I have given, and there has been no material change of circumstances. In relation to the ‘wrong Defendant’ defence, when it was first advanced at the hearing of that application, Master Fontaine found that MBI had engaged with the merits of the claim in terms which indicated that they were aware of the details of this contract and that they knew, but had not attempted to explain who the correct defendant was, if it was not MBI. When MBI applied before Singh J for ex parte injunctive relief, which was in any event the wrong procedure, the Master found it to be clear that the court was not given all the correct information and that there was not full and frank disclosure. Subsequently MBI did not even advance the ‘wrong Defendant’ defence at the hearing of their appeal before Silber J.

Mr Samara was then accused of fraud and his integrity was impeached during a four day trial at this court. In his judgment exonerating Mr Samara and rejecting these allegations HHJ Wood QC found that Sheikh Mohamed was “…driven by a fervent belief that he is being cheated by his former employee, and this could only have been on the basis of a fabricated contract.”

Having lost the fraud trial and having been refused permission to appeal, MBI are now seeking, once again, to set aside the judgment in default by applying a lesser standard than that required to prove that Mr Samara acted fraudulently.

It is correct that, in her judgment of 16 December 2015 granting MBI’s application for a stay of the detailed assessment of Mr Samara’s costs pending determination of this application, Master Fontaine stated that she could not say that this second application to set aside the judgment entered in default was a vexatious application. It is clear from paragraph 24 of her judgment that, in so stating, the Master was relying in part on the judgment of Sir Stanley Burnton and on the observation he made at paragraph 7, upon which MBI now rely and to which MBI no doubt drew her attention. However, for the reasons set out above, I find that the attempt to rely upon this observation is entirely misconceived. It is, in my view, an indicator of the extent of MBI’s continued determination to try and prevent the enforcement of this judgment.

MBI’s conduct of this litigation has been characterised throughout by their adoption of inconsistent positions, advanced at different times by different legal representatives, this latest attempt crossing the line drawn by Cooke J two years ago when seeking to achieve finality in this litigation. In my judgment this further application is clearly an abuse of the process. MBI’s application is dismissed.