Deutsche Leasing (UK) Ltd v Zaskin College Ltd & Ors

On behalf of the Appellants, Mr Khan submits that the Appellants instructed his former solicitors to appeal, but they failed to do so because of an understanding of the relevant time limits, and so the Appellants themselves were not at fault. Mr Khan submits that time started to run from 19 January 2018 when the order was issued and so the Appellant’s Notice was only slightly out of time. In support of that date being the relevant date (as opposed to 20 December 2017, the date of the hand down of the judgment) Mr Khan relies on Iraqi Civilians v Ministry of Defence [2018] EWHC 690 (QB), para 31; B & H (Children) [2009] EWCA Civ 228, para 5. He says the contrary statement as to when time starts to run for the purposes of an Appellant’s Notice in R (Haysaj) v. Secretary of State for the Home Department [2015] 1 WLR 2472, para 22, was obiter.

Mr Khan says this is an exceptional case in which the merits of the appeal ought to be taken into account on the basis that the judge made serious findings of dishonesty on an unpleaded basis. If these findings stand, they will affect Mr Kazmi’s ability to do business and/or secure employment. He says that applying the Mitchell/Denton principles (Mitchell v News Group Newspapers Ltd (Practice Note) [2014] 1 WLR 795and Denton v TH White Ltd (Practice Note) [2014] 1 WLR 3926) I should grant an extension of time.

The other two applications run together. Mr Khan seeks to amend the Grounds of Appeal to add grounds of appeal based upon what is said to be fresh evidence, and he also seeks leave to rely on that evidence in support of the application for permission to appeal. It is said that Mr Kazmi is having to produce this fresh evidence at this stage because the dishonesty allegation was not put to him with any, or any sufficient, clarity before or during the course of the hearing. It also said on behalf of the Appellants that they were unfairly denied the opportunity to see all of the material disclosed, due to a failure by the former solicitor to provide them with all of those materials. This meant that Mr Kazmi was cross-examined on documents which he was being shown for the first time in the witness box, and his oral evidence in various respects was as a result unreliable in some respects through no fault of his own. If the application for an extension is granted, and permission granted to pursue the appeal, the fresh evidence ought to be admitted for the purpose of considering whether the appeal ought to be allowed and the matter ought to be then remitted for retrial.

The evidence in question is summarized at para 19 of the Amended Grounds of Appeal. It is said to comprise fresh evidence which establishes that:

On behalf of Deutsche, Mr O’Sullivan submits that the rules in CPR Part 52 have been flouted by the Appellants in a way which has prejudiced his client. He says that even though six months have passed since judgment was handed down, finality has not yet been reached. Deutsche expected that matters would have reached a conclusion upon expiry of the 21 days from 20 December 2017 prescribed by CPR r. 52.12. He says the Application Notice of 31 May 2018 was issued 161 days after judgment was handed down and if granted, will vastly increase the parameters of the application for permission to appeal, which is currently limited to a challenge of the February order (that being the date of the order being challenged according to the Appellants’ Notice of 23 February 2018).

He submits that where a party seeks permission to appeal it must file an Appellant’s notice within 21 days of the 'date of the decision' of the lower court (CPR r. 52.12 (2) (b)). He says that the 'date of the decision' means the date of the lower court’s judgment, and not the order giving effect to the judgment. Hence, he says the relevant date in this case was 20 December 2017.

He says that by the time the Appellant’s Notice was filed on 23 February 2018, the relevant deadline had long passed. He submits that contrary to CPR PD52B 4.2 (d), the grounds of appeal do not set out why it was being said that the judgment was wrong or unjust.

Mr O’Sullivan also submits that the Skeleton Argument in support of the application for permission to appeal that has been filed does not develop many of the grounds of appeal in the Appellant’s Notice, and that if I grant an extension of time I should strike out those grounds of appeal.

Therefore Mr O’Sullivan submits that on Mitchell/Denton principles I shouldrefuse an extension of time.

If I am with him on that, then Mr O’ Sullivan says that the second and third applications fall away. As to the proposed fresh evidence, he accepts that in deciding whether to give leave to rely upon it I must exercise my discretion in accordance with the overriding objective, but says that the criteria in Ladd v Marshall [1954] 1 WLR 1489remain of importance in deciding how the discretion is to be exercised (see CPR r 52.21.3). He says the proposed evidence does not meet these criteria and that I should therefore refuse the applications.

The Appellants accept that their Appellants’ Notice was out of time and that they require an extension of time. However, as I have said, they submit that time only started to run on 19 January 2018 and thus that they are only out of time by a small margin. Mr O’Sullivan on the other hand maintains that time started to run on the day the judgment was handed down, namely 20 December 2017. The first question therefore is: How far out of time was the Notice issued ?

CPR r 52.12(1) provides that where an appellant seeks permission to appeal from the appeal court, it must be requested in an appellant’s notice. CPR r 52.12(2)(b) as it applies in this case provides that the appellant must file the appellant’s notice at the appeal court within 21 days after ‘the date of the decision of the lower court’ which the appellant wishes to appeal.

The ‘date of the decision of the lower court’ is the date of the lower court’s judgment and not the date of the order, and I reject Mr Khan’s submissions to the contrary. This is unambiguously stated in para 52.12.3 of the White Book 2018:

“The background to para (2) of r 52.12 was explained by Brooke LJ in Sayers v Clarke Walker [2002] EWCA Civ 645 at [12]–[16]; [2002] 1 WLR 3095, CA. In that case the Court stressed (at para 5) that time runs, not from the date on which the judgment or order of the court below was sealed or otherwise perfected, which was previously the case, but from the date of the decision of the lower court.”

In Sayers Brooke LJ said at paras 5 – 7:

“5.

CPR 52.4(2) [the predecessor to CPR r 52.12(2)] states, uncompromisingly, so far as is material:

“The appellant must file the appellant’s notice at the appeal court within (b) …14 days after the date of the decision of the lower court that the appellant wishes to appeal.” (Emphasis added)

This marks a change of practice from RSC O59 r 4(1), which provided:

“Except as otherwise provided by this Order, every notice of appeal must be served under rule 3(5) not later than 4 weeks after the date on which the judgment or order of the court below was sealed or otherwise perfected.” (Emphasis added)

6.

The defendant’s solicitor, Mr Gildener, seems to have been not wholly familiar with the effect of this change of practice. He was later to complain that the CPR gave him no guidance as to how parties were to deal with a situation whereby the “decision” of the court was established in a piecemeal fashion over the course of a number of hearing dates, where the order was not yet perfected, and where there were still issues to be concluded.  He therefore spoke to counsel, and on counsel’s recommendation he telephoned the Civil Appeals Office on 22nd October to clarify the situation.  We do not know exactly how he described the position to the member of that office’s staff to whom he spoke.  He has, however, produced a contemporary attendance notice recording that she “confirmed” that the 14-day time limit for appealing a decision ran from the date the order was sealed.  Mr Anderson, who appears for the defendants, rightly accepted that lawyers must do their work themselves and that they should not be able to depend on advice given to them by whoever is at the end of a telephone when they ring up an appeal court office.  On the other hand, he said that this was an incident which we should take into account when we decided how we should exercise our discretion on the application by his clients for an extension of time.

7.

In the mistaken belief that time for appealing did not start to run until the order was drawn up and sealed on 16th November, Mr Gildener’s firm did not attempt to file the appellants’ notice until 26th November …”

In R (Hysaj) v Secretary of State for the Home Department [2015] 1 WLR 2472 three cases were heard together by the Court of Appeal to enable it to give guidance on the approach that should be taken to applications for extensions of time for filing an appellant’s notice, following the decisions in Mitchell and Denton.In each case the applicant had failed to file a notice of appeal within the time prescribed by the then rule, CPR r 52.4(2). I will return to Hysaj later, but for now it is sufficient to note what the court said at para 22 after it had set out the relevant rule:

“22 The important words for present purposes are “the date of the decision”. Time runs from the date on which the court pronounces its decision, not from the date on which the order is drawn up or the date on which it is sealed, either of which may be some days after the decision has been given. Nor does time run from the determination of the lower court of an application for permission to appeal and an order adjourning an application for permission to appeal does not operate to extend time. Mr Knafler QC described rule 52.4(2) as a trap for the unwary, but in my view the position is clear and in that respect has remained the same since the Civil Procedure Rules came into effect in April 1999. If, as Mr Knafler suggested, it is not widely known among practitioners in the Administrative Court, that is hardly the fault of those who drafted the Rules. It is the responsibility of practitioners to make themselves familiar with the provisions of the CPR and to comply with them.”

Not only was this passage not obiter, as Mr Khan submitted it was, but it was a core part of the Court of Appeal’s essential reasoning as to how the Mitchell/Denton principles are to be applied in this context. At para 52, dealing with the merits of Mr Hysaj’s application, Moore-Bick LJ said:

“52 The notice of appeal was filed out of time because the parties did not realise that the order adjourning the application for permission to appeal for consideration on the papers did not have the effect of extending time. CPR r 52.4(2) makes it clear that the 21 days allowed for filing a notice of appeal runs from the date of the decision under appeal, not from the date on which the application to the court below for permission to appeal is determined. I do not think that rule 52.4(2) is a trap for the unwary and the parties’ solicitors should have had it in mind …”

There is nothing in either Iraqi Civilians v Ministry of Defence, para 31 or B & H (Children), para 5, relied on by the Appellants, which contradicts this or supports the proposition that time starts to run under CPR r 52.12(2)(b) from the date of the order. In the former case Leggatt J gave judgment for the claimants for a sum of damages. Neither the claimants nor the defendant sought permission to appeal. However, the defendant sought permission to appeal from certain conclusions in the judgment about the act of state doctrine. Leggatt J said at paras 31-32:

“31.

I mean no discourtesy to the defendant's representatives in expressing my view that this application suffers from a fundamental flaw. Under section 16 of the Senior Courts Act 1981, the Court of Appeal has jurisdiction to hear and determine appeals from any judgment or order of the High Court. However, the defendant is not seeking to appeal from the court's judgment or order in these cases. The term “judgment” in section 16 refers to a final order made by the court after a trial and not to a judgment in the wider sense of a document which gives the reasons for the court's order.

32.

The defendant recognises that, if the conclusions on the question of Crown act of state which it wishes to challenge were found to be wrong, that would have no effect on the judgment or order of the court in any of the four cases. That is because Crown act of state was relied on by the defendant as a defence to the claims made by the claimants in tort, and those claims were all entirely defeated in any event, as they were held to be time barred. The claims on which each claimant succeeded and obtained a judgment for damages were claims under the Human Rights Act, to which it is common ground that the doctrine of Crown act of state does not apply. As the appeal which the defendant seeks permission to bring is therefore not an appeal from any judgment or order of the court, the Court of Appeal would have no jurisdiction to hear it.”

If I may respectfully say so, these paragraphs do no more than re-state the general principle which has been well-understood since at least Lake v Lake [1955] P 336 that, as a generality, the Court of Appeal’s function is to deal with ‘judgments’, ‘orders’ or ‘determinations’, that is to say, to deal with the ‘result’ or ‘outcome’ (to use non-technical terms) of the hearing in the lower court, and not with ‘findings’ or ‘reasons’ given by the judge in his judgment. Hence, in reliance on that distinction, the court in Lake v Lake and in other decisions up to and including Iraqi Civilians haveheld that putative appellants seeking to challenge ‘findings’ or ‘reasons’ had no appealable issue and has dismissed their appeals (or applications for permission to appeal) accordingly. B&H (Children), para 5, is to like effect.

In this case time started to run on 20 December 2017, when the judge handed down her judgment. The 21 day period in CPR r 52.12(b) therefore expired on 10 January 2018 (see CPR r 2.8(2), (3)). The Appellant’s Notice was filed on 23 February 2018, meaning that it was 44 days out of time.

I note that Lavender J’s order refers to the Appellants’ Notice not having been filed within 21 days of 19 January 2018. However, for the reasons I have given, with respect, that is not the correct date.

I turn to whether I should grant the extension of time. That means returning to the decision in Hysaj. In that case at para 24 Moore-Bick LJaccepted thatall the applications before the Court were applications for extensions of time under CPR r 3.1(2)(a) and not formally applications for relief from sanctions under CPR r 3.9. However, having considered the various authorities on the topic, he said at para 36:

“36 … As the authorities demonstrate, for the past 12 years it has been consistently understood that in the Sayers case [2002] 1 WLR 3095 this court deliberately equated applications for extensions of time for filing a notice of appeal with applications for relief from sanctions because in its view the implied sanction of the loss of the right to pursue an appeal meant that the two were analogous. Following the decision in the Mitchell case [2014] 1 WLR 795 the courts have continued to proceed on the basis that applications for extensions of time for filing a notice of appeal should be approached in the same way as applications for relief from sanctions under CPR r 3.9 and should attract the same rigorous approach … It follows that in my view the principles to be derived from the Mitchell case and the Denton case [2014] 1 WLR 3926 do apply to these applications.” 

Moore-Bick LJ then helpfully summarised Mitchell and Denton in paras 37 and 38 of his judgment. He said that in paras 40–41 of its judgment in Mitchell the court provided guidance on the approach to be adopted to applications for relief from sanctions, which can be summarised as follows:

In Denton the court affirmed the guidance given in paras 40–41 of Mitchell, but explained the approach in more detail as follows, at para 24:

“A judge should address an application for relief from sanctions in three stages. The first stage is to identify and assess the seriousness and significance of the ‘failure to comply with any rule, practice direction or court order’ which engages rule 3.9(1). If the breach is neither serious nor significant, the court is unlikely to need to spend much time on the second and third stages. The second stage is to consider why the default occurred. The third stage is to evaluate ‘all the circumstances of the case, so as to enable [the court] to deal justly with the application including [factors (a) and (b) in CPR r 3.9]’.”

It is this more detailed guidance to which judges should now look when considering applications under CPR r 3.9 and applications for extensions of time for filing a notice of appeal made after the time for doing so has expired: Hysaj, para 38.

The change of approach by the courts to non-compliance with the rules brought about by the decisions in Mitchell and Denton was described by the Master of the Rolls in in Clearway Drainage Systems Ltd v Miles Smith Ltd [2016] EWCA Civ 1258, para 56:

“It is important in this area that there is consistency in the application of the legal principles which have been clearly laid down. It was made plain in Mitchell (at [1]) that the traditional approach of our civil courts used to be on the whole to excuse non-compliance if any prejudice caused to the other party could be remedied (usually by an appropriate order for costs) but that is no longer the correct approach. The new approach was stated in paragraph [37] of Mitchell as follows:

‘We recognise that CPR 3.9 requires the court to consider "all the circumstances of the case, so as to enable it to deal justly with the application". The reference to dealing with the application "justly" is a reference back to the definition of the "overriding objective". This definition includes ensuring that the parties are on an equal footing and that a case is dealt with expeditiously and fairly as well as enforcing compliance with rules, practice directions and orders. The reference to "all the circumstances of the case" in CPR 3.9 might suggest that a broad approach should be adopted. We accept that regard should be had to all the circumstances of the case. That is what the rule says. But (subject to the guidance that we give below) the other circumstances should be given less weight than the two considerations which are specifically mentioned.’”

The first question for me is whether the Appellants’ defaults were a serious and significant breach of the rules or practice directions. Those defaults included the following:

As to this last matter, whether 2 February 2018 was entered in a mendacious attempt by someone to portray the Appellants’ Notice as being in time, I am not in a position to say. On any view that was not the date of the decision under appeal, and no-one could reasonably have thought otherwise. But it does mean that the Notice was defective, as the Appellants now recognise; one of the amendments that is sought is to add the date of 19 January 2018 although, as I have already explained, that also is not the right date.

Mr O’Sullivan also submitted that the Grounds of Appeal in their original form which accompanied the Appellant’s Notice failed to comply with CPR 52BPD 4.2(d), which provides that an appellant’s notice, ‘must set out, in simple language, clearly and concisely, why the order of the lower court was wrong or unjust because of a serious procedural or other irregularity (Rule 52.21(3))’. He said that the grounds were so brief, limited as they were to bare assertions that the judge had got various findings of fact wrong, as not to comply with the Practice Direction. I have some sympathy with that submission. The grounds should have elaborated why the judge was wrong in the various findings complained of. I note that the grounds state, ‘The reasons As contend that the judge was wrong will, in accordance with 52CPD.5(2), be contained in in the skeleton argument to be filed on behalf of As rather than in these Grounds of Appeal.’ However, CPR 52CPD deals with appeals to the Court of Appeal, and the wording of CPR 52B 4.2(d), which deals with appeals to the High Court, is different to 52C 5.2. But a Skeleton Argument has now been filed addressing at least some of the grounds of appeal in more detail, so I need say no more in relation to this complaint.

I turn to the question of whether the defaults I have identified were serious and significant. I have no hesitation in concluding that they were. The 44 day default in serving the Appellants’ Notice was, by itself, serious cf. Hysaj, para 51 (42 days a ‘serious’ default). As to the significance of the defaults, had the only failure been the late service of the Appellant’s Notice, and had matters had proceeded promptly thereafter, then I may have been able to conclude that it was not significant. But all of the defaults that I have identified have had the consequence that the matter came on for hearing before me in mid-June 2018, nearly six months after the judge gave judgment. Deutsche have been denied the finality to this litigation which ordinarily it is to be hoped would have been achieved had the Appellants complied with the rules. I accept Mr O’ Sullivan’s submission that once the time limits for filing the Appellants’ Notice had expired Deutsche rightly expected matters to have reached a conclusion and took steps in relation to enforcement, and the Part 20 proceedings involving DMG.

In these circumstances, I regard the various defaults by the Appellants as being a serious and significant breach of the relevant rules.

I then turn to the question of why these defaults occurred. Mr Khan focused on the late filing of the Appellants’ notice and invited me to conclude that it was due to the negligence of his former solicitors and that the Appellants were not personally at fault. Paragraph 7 of the Appellants’ Skeleton Argument states:

“The Appellants instructed the former solicitors to appeal, but the former solicitors failed to do so on the erroneous basis that the deadline for appealing ran from a later date. The Appellants were not at fault.”

In my judgment there are a number of difficulties standing in Mr Khan’s way in relation to this submission. First, there is no clear evidence about when Mr Kazmi instructed his solicitors to appeal. Neither of Mr Kazmi’s witness statements addresses this important issue. But the emails I have set out suggest that it was not until late February, after Mr Lakhani had told Mr Kazmi that an appeal had little prospect of success. Second, there is no evidence that Mr Kazmi gave these instructions prior to the expiry of the 21 day deadline on 10 January 2018. In fact, such evidence as there is points the other way. I have set out Mr Kazmi’s emails of 29 January 2018, when he asked for a consultation with his leading counsel, and 30 January 2018, when he enquired of Mr Lakhani what the last day was for filing an appeal. But by then it was too late; any appeal was already out of time. Further, the letter of complaint from Freeths LLP to Mr Lakhani suggests that it was not until some time after 2 February 2018 that Mr Lakhani told Mr Kazmi that the date for appealing was the end of February. Hence, the evidence does not support the Appellants’ case that the Appellants’ Notice was out of time only because of the failure to follow his client’s instructions given timeously.

In his Skeleton Argument Mr Khan relies on what the Appellant’s Notice stated in section 11, namely:

“The judgment is dated 20/12/17. The Judge put the matter over to 2/2/18 for consequential orders including costs. this appellant’s notice is within 21 days of 2/2/18. It was thought proportionate to wait for the ‘final’ decision of the lower Court before appealing.”

It is difficult to reconcile this paragraph with the contemporaneous emails. They do not suggest that a deliberate decision was taken to await the decision of 2 February 2018. It does not amount to evidence that the Appellants’ instructed their solicitors before 10 January 2018 to pursue an appeal and that the solicitors failed to follow those instructions but instead waited until 23 February.

It follows that I decline to infer that the Appellants’ Notice was out of time because of fault on the part of the solicitors. The evidence which the Appellants have adduced supports the alternative conclusion that Mr Kazmi first raised the question of an appeal in late January, after the appeal deadline had already passed; that some time in February he was told that any appeal only had a ‘slim’ chance of success; and that it was shortly after that he gave instructions to appeal, with the Appellants’ Notice being filed on 23 February 2018.

But even if the Appellants had shown that the fault was that of their solicitors, that would not of itself have provided a good reason for the defaults I have identified, although obviously it would be a factor to be taken into account in the exercise of the court’s discretion to grant an extension of time. That was made clear in Mitchell, para 41 (the facts of which involved a default by Mr Mitchell’s solicitors and not him personally):

“But mere overlooking a deadline, whether on account of overwork or otherwise, is unlikely to be a good reason. We understand that solicitors may be under pressure and have too much work. It may be that this is what occurred in the present case. But that will rarely be a good reason. Solicitors cannot take on too much work and expect to be able to persuade a court that this is a good reason for their failure to meet deadlines. They should either delegate the work to others in their firm or, if they are unable to do this, they should not take on the work at all. This may seem harsh especially at a time when some solicitors are facing serious financial pressures. But the need to comply with rules, practice directions and court orders is essential if litigation is to be conducted in an efficient manner.”

This is consistent with what Peter Gibson LJ said in Training in Compliance Limited v Dewse [2000] EWCA Civ B525, para 66:

I therefore conclude that there was no good reason for the defaults which I have identified.

I turn to the third stage of the test which I have to apply, which requires me to evaluate all the circumstances of the case so as to enable me to deal justly with the Appellants’ application, including the factors in CPR r 3.9(1)(a) and (b), namely (a) the need for litigation to be conducted efficiently and at proportionate cost; and (b) the need to enforce compliance with rules, practice directions and orders. In Denton, paras 34 and 35 the Court said:

“34.

Factor (a) makes it clear that the court must consider the effect of the breach in every case. If the breach has prevented the court or the parties from conducting the litigation (or other litigation) efficiently and at proportionate cost, that will be a factor weighing in favour of refusing relief. Factor (b) emphasises the importance of complying with rules, practice directions and orders. This aspect received insufficient attention in the past. The court must always bear in mind the need for compliance with rules, practice directions and orders, because the old lax culture of non-compliance is no longer tolerated.

35.

Thus, the court must, in considering all the circumstances of the case so as to enable it to deal with the application justly, give particular weight to these two important factors. In doing so, it will take account of the seriousness and significance of the breach (which has been assessed at the first stage) and any explanation (which has been considered at the second stage). The more serious or significant the breach the less likely it is that relief will be granted unless there is a good reason for it. Where there is a good reason for a serious or significant breach, relief is likely to be granted. Where the breach is not serious or significant, relief is also likely to be granted.”

It seems to me that the relevant circumstances are the following:

Taking these reasons together, in my judgment the balance comes down resoundingly against granting the Appellants’ application for an extension of time. The Appellants’ behaviour has prevented this litigation from being conducted efficiently and has increased costs. The absence of any proper explanation from the Appellants for their breaches of the rules (when that explanation must lie within their knowledge) underscores the need for this court to enforce compliance. Parties to litigation must not be encouraged to think serious breaches of the rules which are not explained will readily be forgiven by way of an extension of time or other relief from sanction. Deutsche have been prejudiced by the Appellants’ behaviour and would be further prejudiced if the appeal proceeded.

I therefore refuse the Appellants’ application for an extension of time for seeking permission to appeal against the judge’s findings on liability.

That means it is unnecessary for me to address the other two applications that are before me. But in case I should be held to be wrong in relation to the extension of time, I will consider them. It is convenient to take them together as they are inter-related.

The Appellants seek permission to amend their Grounds of Appeal to add the following grounds and to rely upon the evidence said to support them:

It is logical to consider the application to rely on this evidence first, because if that fails then the application to amend the Grounds of Appeal falls away.

CPR r 52.21(2) provides:

“(2)

Unless it orders otherwise, the appeal court will not receive-

(a)

oral evidence; or

(b)

evidence which was not before the lower court.”

Prior to May 2000, after there had been a trial on the merits, by rule the Court of Appeal had power to receive ‘further evidence’, but could admit such evidence only on ‘on special grounds’ (RSC Ord 59 r10(2)). In Hertfordshire Investments Ltd v Bubb [2000] 1 WLR 2318the Court of Appeal noted that r.52.21(2) did not retain the former requirement for ‘special grounds’. Nevertheless the principles reflected in Ladd v Marshall remain relevant. They are matters which the Court of Appeal must consider in the exercise of its discretion, when deciding whether to receive fresh evidence. At p2324 Hale LJ said:

“Special grounds, as we all know, meant that the fresh evidence satisfied the principles in Ladd v Marshall [1954] 1 WLR 1489: i.e. that it could not have been obtained with reasonable diligence for use at trial; if given it would probably have had an important influence on the result of the case; and it is apparently credible although not incontrovertible; although there are exceptional cases in which those principles do not apply, for example those involving the welfare of children.

There are, of course, strong reasons for this approach which has a long pedigree. It is in the interests of every litigant and the system as a whole that there should be an end to litigation. People should put their full case before the court at trial and should not be allowed to have a second bite at the cherry without a very good reason indeed.”

In Sharab v Al-Saud [2009] 2 Lloyd’s Rep 160, para 52, Richards LJ said:

“The court must of course seek to give effect to the overriding objective of doing justice, but in that respect the pre-CPR cases, including Ladd v Marshall, remain of relevance and indeed of powerful persuasive authority.”

Hence, in considering the Appellant’s application under CPR r 52.21(2), I must exercise my discretion in accordance with the overriding objective, however the criteria in Ladd v Marshall remain of importance. These are:

I will take each piece of evidence in turn and consider the application to rely upon it in light of the Ladd v Marshall criteria.

Mr Kazmi says in his 31 May 2018 witness statement that he brought this letter to the attention of his solicitor as early as 7 June 2016. In July 2017 he says Mr Lakhani asked him for a copy for the purposes of disclosure but he could not locate it. The letter was not included on the Appellants’ N265 List of Documents nor was it ever pleaded. He says that when witness statements were completed in September 2015 (he must mean 2017) Mr Lakhani did not ask him again about the letter and ‘it did not appear that this was an important point for the purposes of my statement’. He says that after judgment was given he realised how important the letter was and spoke to Tanvir Huda, who suggested where he look for it, and it was then located a few days later having been misfiled. The letter is produced as an exhibit to a witness statement dated 29 May 2018 from Mr Huda, who was an administration officer at the College from 2010 to 2015. He says that he prepared the letter on Mr Kazmi’s instructions and posted it to Deutsche. He does not say anything in his witness statement about how the letter was located, even though on Mr Kazmi’s account he was instrumental in finding it.

I accept Mr O’Sullivan’s submission that the letter could easily – or at least with reasonable diligence - have been obtained for use at trial if, indeed, it did exist then. If Mr Kazmi is being truthful, then the letter was found with relative ease after a conversation with Mr Huda. There is no reason why this conversation could not have taken place prior to trial and the letter located then. Mr Kazmi is an experienced and intelligent businessman and the importance of this letter to the Appellants’ case would have been obvious to him.

I turn to the second of the Ladd v Marshall criteria. In my judgment it would not have made any difference to the outcome of the case. As I have set out, the Appellants lost on every single issue, including whether the machines were in an unusable condition so that there was a breach the implied term of useability such that it was open to the Appellant to reject them. The judge said that the Appellants continued to seek parts and attended training even after 5 January, which was inconsistent with rejection (see her judgment at para 53). There was no hint of any intention to reject the machines in any of the Appellants’ other communications that he intended or had actually rejected the machines (para 52) Further, all of Deutsche’s witnesses denied receiving any such communication.

Thirdly, I have to consider whether the letter is apparently credible. Mr O’Sullivan expressly did not concede that the letter exhibited to Mr Huda’s statement was genuine and was in existence on 5 January 2015.

In my judgment, there are a number of obvious problems with the letter and the evidence about its finding, so that its credibility as a genuine letter is seriously undermined. Deutsche requested the meta-data for the letter but received the reply that it cannot be provided (Supplementary Bundle, Tab 11, p189).

The first difficulty for the Appellants is that, as the judge noted, the first time the letter was mentioned by Mr Kazmi was in the witness box under cross-examination. It had not been pleaded nor, as I have said, was it included on the Appellants’ N265 List of Documents nor was it mentioned in his witness statement. I find it difficult to accept that if the letter existed and if it had been brought to the attention of Mr Lakhani, as Mr Kazmi says it was, that it would not have been mentioned at any stage before cross-examination. I also find it difficult to imagine that such a letter would not have been drawn to counsel's attention by the Appellants’ solicitors. I also consider that it is inconceivable that leading counsel Mr Berkley QC would have omitted to plead such a letter, even if it could not be located, had it been drawn to his attention.

The next difficulty is the absence of any corroboration for Mr Kazmi’s account in his 31 May 2018 witness statement as to why the letter was not mentioned prior to cross-examination and how it came to be found after the trial. His account has not been confirmed either by Mr Lakhani or by Mr Berkley QC or even by Mr Huda. I have already noted that, save in certain limited respects, the Appellants have not waived privilege. However, Mr Kazmi’s witness statement of 31 May 2018 contains numerous complaints about Mr Lakhani’s conduct of the case.

In these circumstances, I would have expected privilege to have been waived and that Mr Lakhani and Mr Berkley QC would have been asked to respond to the various matters raised in Mr Kazmi’s witness statement, including, in particular, the 5 January 2015 letter. In criminal cases, where competence of trial representatives is raised as a ground of appeal, then this step is mandatory before the Court of Appeal (Criminal Division) will consider such an appeal: R v A(EO) [2014] 2 Cr App R 7. Whilst there is the letter of complaint to Mr Lakhani, this only deals with the question of the filing of the Appellants’ Notice and does not criticise Mr Lakhani otherwise, notwithstanding the numerous criticisms of him that Mr Kazmi has made in his witness statement. In these circumstances, Mr Kazmi’s account is unsupported by any other evidence.

The next problem for the Appellants is that the letter is, in many ways, at odds with the evidence that Mr Kazmi gave about it at trial. As I have said, his evidence now is that the letter was typed and sent by Mr Huda, who also signed it. However, Mr Kazmi’s evidence at trial during cross-examination was that he asked a Miss Clarke to send the letter (Bundle Tab 4/p121). He said he signed it, but he did not know who it was sent to (beyond that it was to Deutsche Leasing) because his staff sent it (Ibid, p124). Then, in re-examination, Mr Kazmi said that a member of staff called Emily Fernandez sent the letter on his instructions (Ibid, p157). It follows that there are now three different versions of who sent the letter in evidence.

Next, there is the point that if the letter had been sent, it is inconceivable that it would not have been produced as part of Deutsche’s disclosure and/or DMG’s disclosure. Mr O’ Sullivan is also right to point out that on Mr Kazmi’s case now, it would have been open to the Appellants pre-trial to seek disclosure of the letter from Deutsche.

There is also the point that the letter concludes by asking Deutsche to come and collect the machines. This is at odds with Mr Kazmi’s evidence at trial that in January 2015 he still wanted the machines (Ibid, p118).

For all of these reasons, and notwithstanding Mr Huda’s evidence, I conclude that the January letter and the evidence about its finding lacks the necessary credibility.

In my judgment, consideration of all three Ladd v Marshall factors, together with the strong public interest in the finality of litigation, means that (if I had allowed the extension time for filing the Appellant’s Notice) I would have exercised my discretion and declined to allow the Appellants to rely on this evidence, and would have refused to give leave to amend to add a ground of appeal based upon it. All of the relevant factors point away from allowing this evidence to be deployed. It is relevant to note that this application is being brought in the context of an application for permission to appeal that is out of time. It therefore seems to me that the words of Hale LJ in Hertfordshire Investments Limited v Bubb at p2326, overturning the judge’s decision, are relevant:

“He did not properly address his mind to the fact that this was a final judgment obtained after trial at which both parties had been represented. He did not consider the public policy in there being an end to litigation. In this particular case there was no excuse at all for not producing the proper evidence at the trial: it could have been obtained. There is also no excuse at all for the delay in applying to set aside the order: solicitors should know the rules. It is simply not good enough for professional litigators with legal representation to ask for a double indulgence when there has been no excuse for either default. If this was granted in this case, it is difficult to see a case in which it would not be granted.”

The second piece of evidence which the Appellants seek to rely upon in support of their appeal is a witness statement of Syed Hussain Kazmi, Mr Kazmi’s brother, dated 31 May 2018 concerning training on the machines. He says that the reference in the training record to Mr Syed Kazmi being in attendance at the training in the training record is a reference to him and not to his brother (the Second Appellant). He also says that tools and parts were missing for the CTX510 which were fundamental to their operation, and that on the first day when the machine was turned on it made a terrible noise.

The significance of the evidence about training is said to relate to paras 16(i) and (iii) of the judge’s judgment, where she highlighted inconsistencies in Mr Kazmi’s evidence about what training Deutsche/DMG had provided. The Appellants’ pleaded case was that no training at all was provided. In evidence Mr Kazmi accepted that he received three days training from a Mr Pooni of DMG, but said he was not the only person to attend it. Upon being shown Mr Pooni’s report, which showed the only named trainee as Syed Kazmi, he said he could not explain it, as he was not the only person there. He then changed his evidence and said it was not him but his brother who attended the training. When he was asked why in his witness statement and earlier in his oral evidence he had said that he had attended the training, he said that he had been referring to the College being provided with training, and not him personally. The judge concluded that Mr Kazmi’s evidence ‘about how much training had been given and who had received it’ was not honestly given.

Applying the Ladd v Marshall principles to the evidence from Mr Kazmi’s brother which the Appellant now wishes to rely on leads me to the following conclusions.

First, it was obviously available to be deployed at trial. The Appellants could, with ease, have obtained and adduced evidence from Mr Kazmi’s brother as to the delivery of training on the machines.

Second, I cannot see that this evidence would have had any effect at all on the outcome of the case. First, the evidence undermines the Appellants’ pleaded case that no training at all had been given. Second, this passage of the judge’s judgment was a discussion of the numerous reasons why she found Mr Kazmi an unsatisfactory witness. Even with the brother’s evidence there were ample other reasons which would have led the judge to reach the same conclusion.

Thirdly, there are obvious credibility problems with the evidence. It is contrary to the Appellants’ pleaded case and contrary to what Mr Kazmi initially said in his evidence that it was him who attended the training.

Once again, consideration of these matters, together with the public interest in the finality of litigation, leads me to conclude that, had it been necessary to do so, I would not have allowed the Appellants’ application to rely on this evidence and would have refused leave to amend in relation to it.

The Appellants also seek permission to rely on Mr Kazmi’s witness statement of 31 May 2018 and many hundreds of pages of supporting exhibits, and to add a ground of appeal that there should be a re-trial because of this ‘new evidence’. It is said that:

“The evidence of the Second Appellant dated 31 May 2018, which was not available in the proceedings below. This evidence confirms the Second Respondent’s subjective belief on relevant facts, which if available to the judge, may have led the judge not to find the Second Appellant dishonest.”

As well as giving an account of how he says the 5 January letter was found, in this witness statement Mr Kazmi takes issues with various of the judge’s findings. He also gives an explanation of why he changed his evidence about training; why the Appellants’ pleadings were drafted as they were, and discussions he had had with Mr Lakhani about them; why documents were not disclosed; and how he had not been properly prepared to give evidence (eg, by not being shown documents disclosed by DMG).

It is self-evident that it would be totally inconsistent with the principle of the finality of litigation if it were open to an unsuccessful party to seek to appeal on the basis of supposed better quality evidence, which they could and should have given at the trial. Litigants are not entitled to have a ‘dry run’ at a trial and then seek to have another go by way of appeal if they are unsuccessful.

Had it been necessary, I would therefore have refused leave to rely upon this evidence and leave to amend the grounds of appeal.

As I have explained, the judge found some aspects of Mr Kazmi’s evidence not to be credible. Having discussed various of these in para 16, at para 17 she concluded:

“For those reasons I find Mr Kazmi’s credibility materially undermined such that I have little confidence in it. I remind myself that judge because a witness lies about one or more things it does not mean that all his evidence is untruthful. However I am satisfied that his evidence on many of the main issues in the case was untruthful. Accordingly, where the evidence of Mr Kazmi and those of the Claimant’s witnesses conflict, and where there Mr Kazmi’s evidence is not supported by other credible and reliable evidence or the inherent probabilities, I prefer the evidence of the Claimant’s witnesses.”

The clearest example of the judge concluding Mr Kazmi had been untruthful in his evidence is in relation to the January 2015 letter. The judge dealt with that at paras 49 – 51 and concluded that no such letter was sent and that Mr Kazmi’s evidence to the contrary was untruthfully given in order to bolster his case.

To be fair to Mr Kazmi, it is important to make clear that the judge did accept that he was telling the truth in some of his evidence.

The Appellants now seek leave to amend their grounds of appeal to add a ground in the following terms:

“(x)

The decision of the Judge that the Second Appellant was dishonest involved a serious procedural irregularity, namely (i) dishonesty was never pleaded; (ii) was never put with requisite clarity; (iii) the judge did not apply the correct procedure or test in determining the issue of dishonesty or give any warning prior to making such serious findings.”

This ground of appeal is in part dependent on the ‘new’ evidence which I have already dealt with, but not wholly so; to an extent, it is a complaint that Mr Kazmi was treated unfairly along the lines identified in Vogon International Ltd v the Serious Fraud Office [2004] EWCA Civ 104, para 29, where the Court of Appeal said:

“… neither parties to the litigation, their counsel nor judges should make serious imputations or findings in any litigation when the person concerned against whom such imputations or findings are made have not been given a proper opportunity of dealing with the imputations and defending themselves.”

I would have refused leave to add this ground of appeal had I needed to because in my judgment it is hopeless.

First, as a matter of fact, it was put fairly and squarely to Mr Kazmi that he was lying about the January 2015 letter. The judge recorded at para 49 Mr O’Sullivan had put it to Mr Kazmi that he was lying about it, and she also recorded Mr Kazmi’s denial that he was lying. The charge of lying having been put, it was open to the judge to find as she did. No subsequent procedure or warning was required. And the Appellants can hardly be heard to complain about this not having been pleaded, when Mr Kazmi only mentioned the letter for the first time in cross-examination.

More broadly, it was Deutsche’s case that Mr Kazmi was not a credible witness. That means Deutsche’s case was that Mr Kazmi was not telling the truth in at least parts of his evidence. Unlike in the Vogon case, where witnesses were condemned for dishonesty in circumstances where this had never been part of anyone’s case expressly or by necessary implication, in the present case, credibility and honesty were directly in issue. Mr O’Sullivan said this expressly: see eg Bundle Tab 4, p198:

“… I say that Mr Kazmi did not give the impression of being a credible witness. He was at times evasive and changed his account consistently.”

The judge’s findings therefore cannot have taken Mr Kazmi by surprise, even if he does not accept them. He must have known that his credibility was one of the issues which the judge was going to determine, and he must have understood that Deutsche’s case, in part, was that he was not telling the truth in relation to parts of the case. It is important to stress that Deutsche was not alleging fraud throughout. For example, there was a discussion in closing submissions about the Pearson Report, and Mr O’Sullivan disavowed the suggestion that it was fraudulent (Ibid, para 203).

It is striking that in his reply, Mr Berkley QC did take issue with one point Mr O’Sullivan had raised about Mr Kazmi’s evidence, but he did not make the general complaint that is now made that there was some fundamental unfairness to Mr Kazmi in Mr O’Sullivan inviting the judge to reject his evidence as untrue when that had not been put to him.

In vast numbers of cases judges are faced with witnesses giving rival versions of events, and they then have to make findings based on that evidence as to who is telling the truth and who is not. That is all that happened in this case.

Finally, the Appellants complain in one of their grounds of appeal about the judge’s award of costs against them partly on an indemnity basis. They say that the judge was wrong to award costs on an indemnity basis and that she was wrongly influenced by her conclusions on dishonesty. Complaint is also made that the judge gave no reasons.

The Appellant’s Notice is in time so far as this ground of appeal is concerned (although the Appellants’ Notice is defective because the costs order is not specified in Section 5 as part of the order they wish to appeal against). It follows from what I have said above that if the judge was influenced by her decision that Mr Kazmi had not told the truth in parts of his evidence, this course was open to her. However, the question of costs is not formally before me and so I say no more about it.

For these reasons, I refuse the Appellants’ application for an extension of time to file their Appellants’ Notice. That makes it unnecessary for me to give formal decisions on the other two applications, but had it been necessary for me to do so I would also have refused them for the reasons that I have given.