THE RULES OF LITIGATION ARE DETAILED AND IMPORTANT: COURT REFUSES APPEAL – DEFENDANT’S ATTEMPT TO RE-LITIGATE HEARING WAS AN ABUSE OF PROCESS

The judgment of Collins Rice J in  Vafa v Patel [2021] EWHC 198 (QB) shows the importance of knowing and complying with the rules.  The judge dismissed an appeal where it had been held that a defendant’s attempt to re-litigate a hearing was an abuse of process.

“Fairness in litigation is guaranteed not just by judges listening carefully to both sides of a case and applying the relevant law, but by judges, and all the parties involved, observing the rules that keep a balance of fairness between the two sides of any argument while a case is under way. The rules of litigation are detailed, and they are important. They allow for both sides to understand what is being said against them and to have a fair opportunity to respond. They also make very careful provision indeed for when matters can be looked at again and when decisions are final. It is important that if a court has gone wrong matters can be put right. But it is also important that if a court has not gone wrong, that is respected. A successful party who has complied with the rules is ultimately entitled to rely on the decision of a court without that being constantly questioned. A disappointed party is ultimately required to accept that, however strongly they may continue to feel entitled to the result they wanted, the rules of litigation and any discretion judges are entitled to exercise in the interests of fairness to both sides have given a different result.”

THE CASE

The applicant had been a defendant in proceedings brought by the defendant. The matter was listed for trial, the defendant did not attend that trial.  Judgment was given against the defendant. The applicant did not appeal against that judgment.  However the applicant later applied to set aside the appeal under CPR 39.3(3) on the grounds that it was a default judgment.  That application was dismissed.

The applicant then issued a further application to set aside the judgement, asking for a further oral hearing.  That application was dismissed without a hearing on the grounds that it was seeking to re-litigate the earlier application and was an abuse of process.

The applicant appealed that decision not to re-list or re-hear her second application.

THE JUDGMENT ON APPEAL

The judge dismissed the appeal. She held that the second application was clearly an abuse of process.

The Grounds of Appeal

1. 1. Permission was given for this appeal to be argued on two grounds:

(1) HHJ Simpkiss was wrong to strike out the application notice on the basis that there was an abuse of process; and

(2) he was wrong to strike out the application notice ‘through an inadequate order on the basis that there was an abuse of process when it was procedurally irregular to do so without an oral hearing’.

Analysis

Ground (1) – Error in finding abuse of process

1. 1. Counsel before me agreed about what the relevant law says is the correct approach a judge should take when considering if an application is an abuse of process. It is a broad, merits-based approach. There is a quantity of case law refining that test, including in its application to interlocutory decisions, to some of which I was taken. But the parties agreed that the essence of what I have to do is to consider as much of the account of this litigation, set out above, as appears relevant, and decide whether I agree with HHJ Simpkiss that Ms Vafa’s application of 20^th December 2019 was an abuse of process or not.

   2. What Mr Khan, Counsel for Ms Vafa, who did not appear in the proceedings below, says is that this is exactly what HHJ Simpkiss did not do. He did not take a broad, merits-based approach and he did not apply the correct test. He simply assumed, just by looking at DJ McCloskey’s order, that this was the same application all over again – or, to the extent that it was any different, it contained only matters that could and should have been raised before. He did not properly consider the points made in the application and give Ms Vafa a chance to expand on them. There was material there, not previously before a court, suggesting that DJ Lightman’s decision was defective. He had entered a judgment against Ms Vafa in default of her appearance and therefore did so in the absence of key evidence she could have provided. That made the judgment unfair, unsafe, and, Mr Khan argued before me, susceptible to being set aside. Mr Vafa should have had the merits of that argument properly considered by HHJ Simpkiss, and it was not.

   3. I have read Ms Vafa’s application of 20^th December 2019 and Mr Vafa’s witness statement of 6^th December 2019 with care. I have listened to what Mr Khan says about them, and reflected since, with equal care. I take his points in turn.

(i) The status of DDJ Lightman’s judgment

1. 1. First, he says that, as a matter of law, Ms Vafa was right to say in her last application that DJ Lightman’s decision had the character of a default ruling, made without the benefit of Ms Vafa’s evidence and without cross-examination, and that he simply did not have a proper evidential for reaching a decision which should be considered final and unsusceptible to being set aside in the present circumstances. He drew my attention to the authorities on setting aside, and on the higher threshold for finding abuse of process, in cases involving interlocutory rulings. He said that this was the right characterisation of DJ Lightman’s decision – it had the character of default, was therefore interlocutory in nature, and it was susceptible to being set aside as such. And that characterisation should be followed through by applying the higher threshold for considering abuse of process in a second application.

   2. I disagree. We spent a lot of time at the hearing of this appeal in the White Book. I see no basis for questioning DJ Lightman’s characterisation of his own decision as a final judgment on the merits of Mr Patel’s case. It was not a default judgment as defined in CPR12.1. That is a judgment without trial where a defendant has failed to file a defence. Here, Ms Vafa filed an amended defence in accordance with the case management directions and the case proceeded to trial. Part 12 of the CPR is irrelevant to this case. Part 13, which deals with setting aside judgments entered under Part 12 is also irrelevant.

   3. The power to set aside under CPR 3.3(5) is irrelevant. That applies to the making of (interlocutory) orders by a court on its own initiative, not to judgments determining the outcome of a trial.

   4. Nor was DJ Lightman’s decision a summary judgment under part 24 of the CPR. Summary judgment is a decision on a claim or issue without a trial. It is available where a court considers a party has no real prospect of succeeding on, or defending, a claim and there is no other compelling reason for it to go forward to trial. Mr Patel’s claim went to trial. DJ Lightman made a decision based on the evidence before him. He had at least two pieces of evidence before him which persuaded him to do that – the witness statements of Mr Patel and his solicitor. It seems that he also had before him Counsel for Ms Vafa’s guarantor who had an opportunity to challenge the evidence. In any event, he decided on the merits of the whole case, on the evidence put before him.

   5. Of course, what he did not have before him was any further evidence that Ms Vafa might have been able to give him. There are two reasons for that. First, Ms Vafa did not file any, notwithstanding the case management order. Second, she did not attend. Neither is necessarily the end of the matter, but it all depends on the reasons why. The CPR make specific and careful provision for the handling of such circumstances so as to maintain fairness between the parties.

(ii) Absence of a witness or party from trial

1. 1. First, CPR 32.10 provides that a court must not rule out the prospect of a witness being allowed to give oral evidence even if they have not given a court the trial evidence they have been directed to provide. DJ Lightman was clearly aware of that. He could have adjourned the trial if he had concerns about the fairness of proceeding without Ms Vafa’s evidence. He apparently decided not to do so.

   2. Of course, Ms Vafa was not before the court to give oral evidence in any event. But CPR 39.3 provides for that. It is the court’s decision in the first place whether or not to proceed with a trial in the absence of a party. DJ Lightman decided to do so. CPR 39.3 recognises that, sometimes but not always, that may lead to injustice. The rule provides that the balance is in favour of accepting the trial judge’s decision, unless the absent party can later establish each of three things: a good reason for not attending trial, prompt action on discovering about the judgment, and a reasonable prospect of success should the trial judgment be set aside and the proceedings restored.

   3. Other than pursuing an appeal, that is the route Ms Vafa entirely properly went down, in her application before DDJ McCloskey. She had a full opportunity to explain to him why she had missed the trial. It appears that she did not persuade him in all the circumstances that she had a good reason for not attending. DDJ McCloskey’s decision has not itself been directly challenged.

   4. Where an absent party can show that they were not aware of a trial date, that may be a ‘good reason’ or it may not; it all depends on the facts and circumstances. It appears that Ms Vafa was aware of the trial window. It was not suggested before me that she was not. It does not appear to have been convincingly explained at any stage in these proceedings why she left the country for the entire period of the trial window without telling the court and Mr Patel, and without arranging to be represented. It was not explained before me either. At no stage therefore has sufficient ‘good reason’ been put forward for failure to attend the trial, or to notify either Mr Patel or the court, of intended or actual absence. No good reason appears in the materials before HHJ Simpkiss. No good reason was before me.

   5. That would have been the end of the matter, in so far as the law provides for challenge to a judgment after trial where a party and their evidence did not appear. Ms Vafa does not agree with the account of the money owed set out in Mr Patel’s claim, and does not agree with the judgment of DJ Lightman. Detailed arrangements were made to enable her to put her side of the story at trial. She did not take the opportunities she was given at the time, and has not met the tests established in law for setting aside an unappealed judgment made on the evidence before the judge at trial.

   6. That would also have been the end of the matter before me on Ground (1) of this appeal. A broad merits-based approach to the question of whether the application before HHJ Simpkiss was an abuse of process, given the decision of DDJ McCloskey, would have started with the fact that – ignoring the irrelevant material relating to the setting aside of default judgments, interlocutory orders and orders made of a court’s own initiative – the application was making a case based on the argument that had Ms Vafa been present at the trial before DJ Lightman she would have had a good prospect of defending the claim (in law and evidence). Without a good reason for failure to attend, an application to set aside on that basis is bound to fail (CPR 39.3(5)). No good reason was before HHJ Simpkiss, and no explanation was given for raising that matter a second time, when it had been considered before DDJ McColskey. To that extent the application was a clear abuse of process, not only by raising the same issue but by not advancing it in any way.

   7. For the avoidance of doubt, there is no arguable basis on the materials before HHJ Simpkiss or me for challenging DJ Lightman’s judgment on jurisdictional grounds. However the application – and before me Mr Khan – put two other issues in the frame. The first was new material. The second was alleged fraud. I turn to them next.

(iii) Evidential issues and fraud

1. 1. Some weight is placed on Mr Vafa’s witness statement of 6^th December 2019 being important new evidence. This was not the principal argument before me. But I consider it on its merits, from the point of view of reflecting on whether it means that the second application was not, after all, an abuse of process.

   2. There are a number of problems with this argument. The first is that Mr Vafa’s witness statement predates, and was prepared for, the hearing before DDJ McCloskey. If it was before DDJ McCloskey, it was not new at all. I had a second witness statement from Mr Vafa, dated 25^th January 2021, suggesting that it was not, because his solicitors forgot to include it with the papers before DDJ McCloskey. That was of course an oral hearing, where any omission could have been dealt with had the material appeared relevant. Mr Vafa’s explanation does not appear in the papers put to HHJ Simpkiss. In any event, the judge would have been entitled to consider it a matter which ought to have been dealt with earlier in the absence of any better explanation than that which is now before me. It appears to me from all the materials I have that either this material was before DDJ McCloskey or it should have been.

   3. The second is that Mr Vafa’s evidence is substantially taken up with setting out Ms Vafa’s side of the money issues – what she would have said had she been before DJ Lightman. But no explanation appears as to why this evidence was not prepared and served in accordance with the case management decisions, and therefore made available for trial. It could have been relevant even in Ms Vafa’s absence. That explanation is an important missing piece of the puzzle, since much of the witness statement relates matters which happened before the trial – in some cases long before. That would suggest this is not ‘new’ evidence, it is simply late evidence with no explanation for its lateness.

   4. There seems to have been some debate about whether this is the first time the handwritten notes (referred to above) had been drawn to the attention of a court. Mr Vafa’s second witness statement suggests they were not before DDJ McCloskey but the explanation he gives leaves room for doubt about that. Even if the handwritten notes were completely new at this stage, they appear on their face to date from 2013. Their precise significance is not clear either. Mr Vafa’s statement sets out a side of the story which is different from that put to DJ Lightman by Mr Patel. But it is just that – a different account of the chronology and the calculation of the amount owed. Whether it would have prevailed against Mr Patel’s evidence at trial, and what role if any the handwritten notes would have played, is unclear. They appear to be acknowledgments of indebtedness by Mr Patel, but they do not speak for themselves, and no doubt Mr Patel would have had his own version of their significance. This is not the sort of evidence which reframes the judgment and deprives it of the sustainability of its evidence base. The trial judge would simply have had to decide which account was the more plausible.

   5. The third point is that, on its face, Mr Vafa’s statement of 6^th December 2019 is rather startling evidence. It says that he, rather than Ms Vafa, was the one directly responsible for the negotiations and the conclusion of the transfer of the business from Mr Patel to Ms Vafa. He says she had been nominated as the owner of the business in support of an immigration application and to show she would not need recourse to public funds. This account is now amplified in Mr Vafa’s 25^th January 2021 witness statement. He says he has been dealing with Ms Vafa’s legal and financial affairs throughout the course of this litigation. He says this is because she does not speak fluent English and because she ‘is a strict Muslim, who relies on me, as her husband, to conduct her daily affairs’. This account of course raises many questions of potential relevance to this appeal, not the least of which goes to the part Ms Vafa would have played in the proceedings before DJ Lightman even if she had attended. How far was she in fact engaged with the entire transaction in dispute at all? What evidence could she have given as a mere nominee? What was Mr Vafa’s part in the course of events this litigation has taken and the issues which are now before me on appeal (including Ms Vafa’s absence from the trial and failure to file evidence)? If there is some explanation in Mr Vafa’s role in the story for the questions successive courts have been addressing in these proceedings it is entirely opaque, and his evidence creates a great many more questions than answers.

   6. The final point which Mr Khan suggests should be taken into account on the issue of abuse of process is the possibility of fraud. The only material before me about this is a bare assertion by Mr Vafa at the end of his first witness statement. Fraud is neither pleaded nor evidenced. The most that is set out, even taking Mr Vafa’s evidence at face value, is some discrepancy between the Vafas’ side of the story and Mr Patel’s. That could and should have been sorted out at trial. It does not begin to rescue Ms Vafa’s second application from a finding of abuse of process.

(iv) Conclusion on Ground (1)

1. 1. In all of these circumstances, and for the reasons given, I conclude that Ground (1) of this appeal must fail. Ms Vafa’s application of 20^th December 2019 was at its heart an attempt to relitigate the application made under CPR 39.3 and determined by DDJ McCloskey because it relied on Ms Vafa’s absence from the trial and before DJ Lightman, and the evidence she could have given there, without showing a good reason for non-attendance. In such circumstances, it was a collateral attack on DDJ McCloskey’s decision and was in any event bound to fail on its merits. There is no sustainable argument for impugning DJ Lightman’s decisions on the basis of developments or evidence since the trial, and no explanation for the failure of Ms Vafa to submit that (or any) evidence in time for it to be considered at trial. There is a wholly insufficient basis to reopen the matter on grounds of potential fraud. These are the key components of the broad merits-based approach which the relevant law on abuse of process requires to be applied to the facts and circumstances of this case. I have applied that approach and reached the same conclusion as HHJ Simpkiss.

Ground (2) – Unjust because of procedural irregularity in deciding on the papers

1. 1. Mr Khan says that it was fatally irregular for HHJ Simpkiss to have considered Ms Vafa’s application on the papers. He says that this is a distinct ground, independent of the fate of Ground (1). Ms Vafa was denied a right to a fair trial. On a question of abuse, a court must take a broad, merits-based approach and bring an intense focus on the facts of a particular case. That sort of intense focus is impossible on the papers alone.

   2. A number of points arise. It hardly needs saying that the right to a fair trial – even on a question of abuse of process – does not always require an oral hearing. It is accepted that HHJ Simpkiss had a discretion to deal with this application without a hearing if he did not consider that one would be appropriate (CPR 23.8). The question is whether it was fair to do so in this case.

   3. I am satisfied that it was. It was fully discernible from the papers before HHJ Simpkiss first, that whatever Ms Vafa’s prospects of success at any reinstated trial, the application on that basis depended on establishing a good reason for her absence under CPR 39.3; second, that the issue of good reason for absence had been disposed of by DDJ McClosky; third, that the legal arguments about setting aside default and interlocutory decisions and ‘own motion’ orders, and raising jurisdictional issues, were irrelevant; fourth, that the evidential matters raised were directed to material predating the trial without any explanation offered for their failure to be deployed earlier; fifth, that there was nothing in the materials before him capable of vitiating the judgment on grounds of (subsequently discovered) fraud; and sixth, that there was nothing else on the materials before him capable of impugning the judgment of DJ Lightman. That sufficed for a finding of abuse of process. An oral hearing would have been entirely counterproductive in prolonging the abuse of process.

   4. A case based on what, in addition or alternatively to her written application, Ms Vafa might have been able to say at an oral hearing before HHJ Simpkiss will not do. She decided what matters to set out in her application and HHJ Simpkiss was entitled – indeed obliged – to make a decision on her case as she presented it.

   5. In any event, I do not accept that there is anything in this second ground of appeal which survives the hearing and determination of this appeal on the first ground. I have focused intensely on the facts of this case (notwithstanding the absence of any judgments or transcripts) and adopted the broad merits based approach to the entire matter as invited by the parties. I have looked at all the materials put forward on Ms Vafa’s behalf, including some very late materials, and Ms Vafa has had the benefit of Mr Khan’s far-ranging submissions before me, which I have taken fully into account as I have thought relevant, not least where I have in the end disagreed with him. There is no surviving argument from injustice of process. This ground also must fail.

Conclusion

1. For the reasons I have given, this appeal is dismissed.

2. I am not in any doubt that there are two sides to the story of the business transfer and the money owed between Mr Patel and Ms Vafa. Ms Vafa missed the opportunities the law provides for putting forward her side – not just by missing the trial and not giving any of the judges who have been involved in this case a good enough reason, but by not putting in any witness statements to support her case until far too late and not explaining why.

3. There are two sides to this appeal too. The relevant law requires that I focus on Ms Vafa’s side in testing whether to disturb the decisions that other judges have come to. I have noted that there may be reasons why she has found it difficult to engage with this litigation from the outset, and that there is much about the whole story that remains unclear. But for litigation to be fair, it must be fair to both parties.

4. Fairness in litigation is guaranteed not just by judges listening carefully to both sides of a case and applying the relevant law, but by judges, and all the parties involved, observing the rules that keep a balance of fairness between the two sides of any argument while a case is under way. The rules of litigation are detailed, and they are important. They allow for both sides to understand what is being said against them and to have a fair opportunity to respond. They also make very careful provision indeed for when matters can be looked at again and when decisions are final. It is important that if a court has gone wrong matters can be put right. But it is also important that if a court has not gone wrong, that is respected. A successful party who has complied with the rules is ultimately entitled to rely on the decision of a court without that being constantly questioned. A disappointed party is ultimately required to accept that, however strongly they may continue to feel entitled to the result they wanted, the rules of litigation and any discretion judges are entitled to exercise in the interests of fairness to both sides have given a different result.