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You are here: BAILII >> Databases >> England and Wales High Court (Queen's Bench Division) Decisions >> Sir John Fitzgerald Ltd v Macarthur [2009] EWHC 2659 (QB) (28 October 2009) URL: https://www.bailii.org/ew/cases/EWHC/QB/2009/2659.html Cite as: [2009] EWHC 2659 (QB) |
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QUEEN'S BENCH DIVISION
Strand, London, WC2A 2LL |
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B e f o r e :
____________________
SIR JOHN FITZGERALD LIMITED |
Claimant |
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- and - |
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HUGH MAXWELL MACARTHUR |
Defendant |
____________________
DANIEL HUBBARD (instructed by FIELD SEYMOUR PARKES) for the DEFENDANT
Hearing dates: 3, 6 and 8 July 2009
____________________
Crown Copyright ©
The Honourable Mr Justice Stadlen:
The Claim
Procedural history: events leading up to the County Court judgment
"I have emigrated from the UK and now live on the other side of the world and therefore making arrangements to attend this court hearing and managing to pay for the trip are extremely difficult for me at the best of times. I do feel that this is an intolerable situation for both me and your Honourable Court and I do not see how this case can proceed. (at least, not on the 3 September). I would be most grateful if the court could write to me care of the above postal address, it will then be forwarded to me by email. As I explained in my letter of the 9 July I can not disclose my current address but I will receive correspondence via Hodmore Farm as above. I look forward to hearing from you." (emphasis added).
"(i) An unless order against the second defendant debarring him from filing his witness statement unless it is filed by a date to be agreed
(ii) An order that the trial will proceed in any event irrespective of any further communication that the court or claimants may receive from the second defendant
(iii) Orders relating to the trial bundle
(iv) Vacate the trial and issue fresh directions.
It would be most helpful if this application could be listed as a telephone hearing as the claimant and their solicitors are based in Newcastle-upon-tyne we have no operable telephone number for Mr Macarthur, so it would seem that the hearing of this application can only go ahead without his participation."
It is not clear what submissions Mr Winter was referring to unless it was the request for the pre-trial review to be listed as a telephone hearing without the participation of Mr Macarthur. It is to be noted that the suggestion that at a pre-trial review the court might make orders relating to the trial bundles was, no doubt unintentionally, misleading in that it gave the impression that no such order had as yet been made which as already mentioned was incorrect.
"I note the advice that Messrs Samuel Phillips seem to be giving to the Judge in their application for this review (paragraph 10, (i) (ii) (iii) and (iv)).
(i) Is it fair that I should be debarred from filing my witness statement when the claimant has yet to file his own?
(ii) Is it fair that the trial should proceed irrespective of any further communication from me when the claimant has had ample time since 9 July to communicate with me or the court but until now has failed to do so?
(iii) I am not sure what this entails.
(iv) If the trial is to be vacated and fresh directions issued which seems to me to be the only realistic and fair option within those mentioned by Samuel Phillips then I trust that any costs involved in this process would be borne by each side at least, as I do not consider it fair for me to be liable, should there be a cost involved.
I most certainly do not think that it would be fair or reasonable for the claimant to expect or be granted an "urgent pre-trial review" during the coming week and citing the fact that my solicitors have come off the record that I'm a litigant in person and that I have emigrated to Australia as the reason why they want the said review. They were notified of the change of solicitor on 9 July and of my immigration on 20 June so why leave it until 23 August to apply for such a review or indeed anything to do with this case.
As I explained in my letter of 9 July and reiterated on 17 August and by telephone to the Court on 24 August I am unable to disclose my new address for fear of reprisal against my family. The UK correspondence address above will function thanks to the assistance of a friend and if so desired I can be contacted by email at [ he then gave a hotmail email address]. May I take this opportunity of thanking the Judge and the court of their consideration in this matter and I look forward to your reply" (emphasis added).
"In view of the situation and bearing in mind that I now live in Australia and it would be virtually impossible for me to be in Reading next Monday, may I request that the matter be discussed via the telephone at least to establish where the case is going. For reasons that I have previously mentioned I'm not able to disclose my whereabouts exactly, however I am quite prepared to telephone the court at a predetermined time to attempt to reach a conclusion."
He then stated that he could be contacted at the email address which he had given in his letter dated 26 August 2007 or by fax by a telephone number in the United Kingdom which he gave or by mail at Hodmore Farm. The reference to the two telephone conversations appears to include a reference to the telephone conversation on 24 August 2007 referred to in his letter of 26 August 2007.
"Mr Macarthur has made it quite clear that he has left the country and that he does not intend to come back for the hearing. There is no suggestion in his letter that if the matter were adjourned he would be able to attend. As far as I can see his actions are just designed to try to ensure that he is beyond the reach of the court and the claimants. His failure to disclose his address in Australia only confirms my view as to what he is attempting to do. Again, apart from raising the question as to whether the case is ready for trial he does not specifically suggest that he would be available to attend trial, even in this latest letter of 1 September. So I'm afraid that I do not take the view that an adjournment is necessary in the interest of justice to enable him to attend to put his case."
"The only issue it seemed to me that was a live issue was the question raised by the defence as to whether or not this induced the claimant to enter into the contract. It seems to me that on the face of it they have a good point to make as to that, but that does not seem to me to answer the point that so far as the payment of money is concerned (albeit that there was a contract between the claimant and the first defendant) nevertheless the fraudulent representation made by the second defendant to the effect that the first defendant needed the money to pay the deposit of 30% and also needed the money to pay the balance that was due, leading to the immediate collection of the car (all of which was clearly untrue and must have been known by the second defendant to have been untrue) seems to me to prove the case. This man has acted by means of a fraudulent misrepresentation in this particular case. So I am quite satisfied on the evidence that had been produced and the submissions that have been made. In those circumstances then I will, as requested, strike out the defence on failure of the second defendant to attend. Secondly I will enter judgment for the claimant in the sum of £85,744 plus interest."
Procedural history: events after judgment was entered for the claimant on 3 September 2007
Analysis
(i) "The failure of the court at first instance to have allowed the appellant to make representations by telephone and/or to have accommodated his request that he be allowed to do so, amounted to a serious procedural irregularity. This meant that the decision of the lower court was unjust within the meaning of Rule 52.11 (3)(b).
(ii) In all the circumstances HHJ Elly was wrong to have exercised his discretion so as to have struck out the Appellant's Defence and allowed the trial to go ahead in his absence and/or the judgment should be set aside pursuant to Rule 39.3(3)
(iii) HHJ Elly was wrong to have given judgment for the respondent in any event."
"It is an abuse of the court's procedures for a defendant to appeal against the refusal of an adjournment in a situation where he also has the opportunity to apply under CPR 39.3(3). I think that it is the better view that he does not have a choice because a specific provision of the Rules, CPR 39.3(5) provides for the appropriate course of action in the circumstances: that should override the general right of appeal. Further CPR 39.3(5) enables the court to reconsider the question whether the party has a good reason for not attending with him present and having had the opportunity to put in further evidence. To appeal the decision to adjourn could be a way of side stepping that process, a process which the Rules Committee has considered appropriate." (paragraph 17).
"39.3
(1) The court may proceed with a trial in the absence of a party but - …
(c) if a defendant does not attend, it may strike out his defence or counter claim (or both).
(2) Where the court strikes out proceedings, or any part of them, under this rule, it may subsequently restore the proceedings, or that part.
(3) Where a party does not attend and the court gives judgment or makes an order against him, the party who failed to attend may apply for the judgment or order to be set aside.
(4) An application under paragraph (2) or paragraph (3) must be supported by evidence.
(5) Where an application is made under paragraph 2 or 3 by a party who failed to attend the trial, the court may grant the application only if the applicant –
(a) acted promptly when he found out that the court had exercised its power to strike out or to enter judgment or make an order against him;
(b) had a good reason for not attending the trial;and
(c) has a reasonable prospect of success at the trial."
"Mr Macarthur has made is quite clear that he has left the country and that he does not intend to come back for the hearing. There is no suggestion in his letter that if the matter were adjourned he would be able to attend. As far as I can see, his actions are just designed to try to ensure that he is beyond the reach of the court and the claimants. His failure to disclose his address in Australia only confirms my view as to what he is attempting to do. Again, apart from raising the question as to whether the case is ready for trial he does not specifically suggest that he would be available to attend trial, even in this latest letter of 1 September. So I am afraid I do not take the view that an adjournment is necessary in the interests of justice to enable him to attend to put his case."
"I agree with Hart J that, although the court must be satisfied that the reason is an honest or genuine one, that by itself is not sufficient to make a reason for non-attendance a 'good reason'. The court has to examine all the evidence relevant to the defendant's non-attendance, ascertain from the evidence what, as a matter of fact, was the true 'reason' for non-attendance, and, looking at the matter in the round, ask whether that reason is sufficient to entitle the applicant to invoke the discretion of the court to set aside the order. An over analytical approach to the issue is not appropriate, bearing in mind the duty of the court, when interpreting the rules and exercising any power given to it by the rules, to give affect to the overriding objective of enabling it to deal with cases justly. The perfectly ordinary English phase 'good reason' as used in CPR 39.3(5) is a sufficiently clear expression of the standard of acceptability to be applied to enable a court to determine whether or not there is a good reason for non-attendance." (paragraph 12).
(i) He had not explained how the first representation "unfortunately we have to put down a 30% deposit" was anything other than deliberately untrue in circumstances where he confirmed that Mercedes did not require a deposit;
(ii) Mr Macarthur had not explained what happened to the £33,823 deposit paid save that it was not paid to Mercedes;
(iii) Mr Macarthur accepted that he lied when saying that the vehicle was on its way and was to be delivered;
(iv) Mr Macarthur failed to explain in relation to the third representation which was an invoice for the balance of £51,921 how payment of the balance was required in order to arrange delivery within 10 working days in circumstances when, at the time he made the statement, he knew full well that Mercedes had not been paid anything and that he had used the deposit for some other unexplained purpose;
(v) Mr Macarthur had failed to explain what the registration date of 1 March 2006 meant and why it was true that the car had been registered when Mercedes had not been paid in full.
"26. Similarly it is not to be thought that an order for security for costs will be appropriate in every case where a party appears to have a somewhat weak claim or defence. The last thing this judgment should be seen as encouraging is the making by either side of exorbitant applications for summary judgment under Rule 24.2 in a misguided attempt to obtain conditional orders providing security for costs. On the contrary, the court will be reluctant to be drawn into an assessment of the merits beyond what is necessary to establish whether the person concerned has "no real prospect of succeeding" and the occasions when security for costs is ordered solely because the case appears weak may be expected to be few and far between".
"The correct general approach may be summarised as follows:
(i) It would only be in an exceptional case (if ever) that a court would order security for costs if the order would stifle a claim or an appeal;
(ii) In any event
(a) An order should not ordinarily be made unless the party concerned can be shown to be regularly flouting proper court procedures or otherwise to be demonstrating a want of good faith; good faith being understood to consist (as Simon Brown LJ put it) of a will to litigate a genuine claim or defence or appeal as economically and expeditiously as reasonably possible in accordance with the overriding objective; and
(b) An order will not be appropriate in every case where a party has a weak case. The weakness of a party's case will ordinarily be relevant only where he has no real prospect of succeeding."
(a) Make it subject to conditions, including a condition to pay a sum of money into court;…
Part 3.1 (5) provides that the court will order a party to pay a sum of money into court if that party has, without good reason, failed to comply with a rule, practice direction or a relevant pre-action protocol.
Part 3.1 (6) provides that when exercising its power under paragraph (5) the court must have regard to –
(a) the amount in dispute; and
(b) the costs which the parties have incurred or which they may incur.
It is to be noted that, in contrast to the form of Rule 3(3) and (5) as set out in Clarke LJ's judgment where the operative word was "may", the operative word in the version of the CPR as set out in the White Book is "will". It was not, however suggested by Mr Murphy that this is indicative of a mandatory obligation on the part of the court under Rule 3(3) to make every order it makes subject to conditions including a condition to pay a sum of money into court or under Rule 3(5) to order a party to pay a sum of money into court on every occasion when that party has been held without good reason to have failed to comply with a rule, practice direction or relevant pre-action protocol. Mr Murphy was, in my judgment, correct to make no such suggestion. Rule 3.1(1) describes the content of Rule 3 as a "list of powers". It would appear from a comparison of the version set out in the White Book with the versions set out in the Green Book and the Ministry of Justice website in both of which the operative word is "may" that the word "will" in the White Book is a mistake.
When assessing the list of respects in which Mr Murphy submitted that Mr Macarthur has flouted court procedures it is in my judgment necessary to remind myself that it is plain from Clarke LJ's statement of general principle that mere breach of or failure to observe court procedures does not of itself amount to "flouting" them. What is required in addition is proof that the failures or breaches were regular and amounted to a want of good faith in the sense of an absence of a will to litigate a genuine defence as economically and expeditiously as reasonably possible in accordance with the overriding objective. That is in my view implicit in the use by Clarke LJ of the words 'or otherwise to be demonstrating a want of good faith.'(emphasis added).
I have considered the list of matters relied on by Mr Murphy very carefully and come to the conclusion that although they demonstrate a failure on the part of Mr Macarthur on a number of occasions and in a number of respects to observe proper court procedures they do not demonstrate an absence of good faith and cannot fairly be characterised as "flouting". It is true that Mr Macarthur did not serve his witness statement by 18 July 2007 as agreed with the claimant's solicitors. However given the context, namely that the claimant had not served its witness statements either or even approached him with a view to suggesting a date for exchange, and given that for over 2 months between 22 June 2007 and 23 August 2007 he had heard nothing either from the court or from the claimant's solicitors, I do not consider that this is evidence of a want of good faith on his part. By the time he received Mr Horgan's witness statement on 30 August there was only one court day before the hearing.
As to the lack of formality of his applications for a telephone hearing or an adjournment, in my judgment given that he made clear the nature of his applications in correspondence to the court nothing material turns on that omission, not least since he was a litigant in person resident in Australia. In relation to the alleged lack of evidence in support of his application under CPR 39.3(3) as required by 39.3(4) this needs to be seen in the context of the fact that the procedure he followed was that of an appeal under part 52 rather than an application to set aside under part 39. The latter is in my view explicable by the fact that he was then a litigant in person resident in Australia. As to the former Mr Macarthur did in fact say in his Appellant's Notice that he was relying on the correspondence identified therein which contained most of the material relied on in support of what became the Part 39 application so far as good reason was concerned. In relation to the issue of promptness, he subsequently adduced a witness statement.
It is true that he did not adduce evidence seeking to demonstrate a reasonable prospect of success on the merits of his defence. However the existence of such a reasonable prospect of success was conceded by Mr Murphy on behalf of the claimant. In addition Mr Hubbard on his behalf relied in relation to the merits on a submission that the Amended Particulars of Claim disclose no cause of action and on the absence in Mr Horgan's witness statement of any evidence of reliance or inducement. This is the omission which has caused me greatest pause for thought.
"2.2 The court may proceed with a trial in the absence of a party. In the absence of:
(1) "the defendant, the claimant may- (a) prove his claim at trial and obtain judgment on his claim and for costs…"
The Notes to part 39.3 state: "The Practice Direction, para 2.2 (see para. 39 PD.1) envisages that even though a defence may be struck out, the claimant will still have to prove his or her claim, although this will normally only entail referring to the statement of case (with statement of truth) or tendering witness statements: see Rule 32.6(2) and Rule 22.1(1)(a).
(a) At trial, by their oral evidence given in public; and
(b) At any other hearing, by their evidence in writing.
(2) This is subject -
(a) to any provision to the contrary contained in these Rules or elsewhere; or
(b) to any order of the court.
"There then moves the question of what you want me to do about it. It seems to me that there are two ways forward. I appreciate that we are only concerned with the second defendant. He having failed to appear, it seems to be that on that basis alone you are entitled to your judgment. If on the other hand you want me to adjudicate on the issues, then obviously I will do so."
"I am satisfied that on the basis of what I have read and on the basis that there is no other evidence produced by the second defendant, or for that matter the first defendant, to gainsay the evidence which has been filed on behalf of the claimant, on the face of it the second defendant has acted fraudulently in this particular matter."
He then proceeded to consider the issue of inducement in the passage to which I have already referred and concluded that
"…..the fraudulent representation made by the second defendant… seems to me to prove the case. This man has acted by means of a fraudulent misrepresentation in this particular case. So I'm quite satisfied on the evidence that has been produced and the submissions that have been made. In the circumstances then I will as requested strike-out the defence on the failure of the second defendant to attend. Secondly I will enter judgment for the claimant in the sum of £85,744 plus interest."