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Cite as: [2001] EWCA Civ 1454

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Nasser v United Bank of Kuwait [2001] EWCA Civ 1454 (21st December, 2001)

		Neutral Citation Number: [2001] EWCA Civ 1454
		Case No: A2/2000/0480

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE QUEENS BENCH DIVISION
(Mr Justice Ian Kennedy)

Royal Courts of Justice
Strand,
London, WC2A 2LL

21st December 2001

B e f o r e :

LORD JUSTICE HENRY
and
SIR CHRISTOPHER SLADE
____________________

AMY NASSER
Appellant

- and -

THE UNITED BANK OF KUWAIT
Respondent

____________________

(Transcript of the Handed Down Judgment of
Smith Bernal Reporting Limited, 190 Fleet Street
London EC4A 2AG
Tel No: 020 7421 4040, Fax No: 020 7831 8838
Official Shorthand Writers to the Court)

____________________

Simon Edwards Esq (instructed by Messrs Charles Khan for the appellant)
Peter Irvin Esq (instructed by Messrs Wedlake Bell for the respondent)
____________________

HTML VERSION OF JUDGMENT
AS APPROVED BY THE COURT
____________________

Sir Christopher Slade:

The claimant in these proceedings, Mrs Nasser, with permission of Lord Justice Latham, appeals from an order of Mr Justice Ian Kennedy dated 26^th October 1999, whereby he struck out her claim for want of prosecution pursuant to Part 3.4 of the Civil Procedure Rules 1998 (“the CPR”).

The Facts

The Judge aptly described it as a curious case. In 1985, the claimant hired a safe deposit box at the premises of the defendant, The United Bank of Kuwait plc (“the Bank”), at 15 Baker Street, London, to keep some jewellery and other things. On two occasions thereafter, her boxes were changed, once because she wanted a bigger box and once because the then existing box was defective. She asserted that, after a previous visit on 12^th January 1993, on 14^th or 15^th January 1993 she had visited the premises with her sister Rima Nasser to obtain a ring and watch from the box and to deposit various items of jewellery in it, at which time the contents were intact and complete. However, she asserted, when she again visited the premises on 8^th February 1993, she found that her key did not fit the padlock on the box which was brought to her, and when the padlock was removed by means of a hacksaw, she found the box was empty. She said that all three boxes had the same set of padlocks and the same keys.

Promptly, on 15^th April 1993 she issued a writ against the Bank claiming that she was entitled to delivery up by the Bank of the contents of the safe deposit box as bailee and/or by virtue of her contract, and damages. The alleged contents of the safe deposit box, consisting of some 86 items, were set out in a schedule to the statement of claim. Of these items, about 75 consisted of jewellery.

On 27^th May 1993 a defence to the action was delivered, followed by an amended defence of 28^th July 1993. On 20^th August 1993 an order for discovery, inspection and other matters was made.

In September 1993, the claimant’s sister Rima Nasser, who is said to be the owner of some of the jewellery, visited Palm Beach Casino and saw a Mr Balawi wearing a ring said to be one of the items of the missing jewellery which belonged to her. He told her that this item and several other items of jewellery had been purchased by him from a Hatton Garden jeweller called Mr Shaikh. The claimant informed the police. Mr Shaikh was arrested on suspicion of handling stolen goods. He had been found in possession of jewellery which the claimant said came from her safe deposit box. A few days later he produced some documents which purported to show he had bought a part of the jewellery from a man called Mr Gomez. Mr Gomez himself has not been traced.

At some unknown date between August 1993 and 18^th February 1994 an application for summary judgment in the present action was made by the claimant. On 18^th February 1994 Master Prebble made two orders. By the first order he gave the Bank permission to defend the action and gave various further directions in regard to the exchange of lists of documents and other matters. Secondly, he ordered the claimant to provide security for costs in the sum of Ł10,000 within 14 days. There is no evidence to suggest that these two orders were not complied with.

On 10^th October 1994, the claimant and her mother, who was also said to be the owner of some of the jewellery, issued a writ against the Commissioner of Police of the Metropolis in respect of the jewellery found in Mr Shaikh’s possession. I will call this the “interpleader action”. The Commissioner having interpleaded, it was ordered by consent on 5^th November 1994 that an issue be tried as between the claimant and her mother on the one hand and Mr Shaikh on the other as to who was entitled to the jewellery.

On 30^th November 1994 the claimant amended her statement of claim in the action against the Bank. On 20^th December 1994 the Bank re-amended its defence. There was then a delay of about two and half months, after which there was an order for exchange of evidence and setting down. It is common ground that the trial date for April 1996 was fixed, although it is not clear when that happened.

On 3^rd January 1996 Master Foster ordered that the claimant’s original solicitors should cease to act for her in the interpleader action, apparently on the grounds that they had not been properly instructed. On 13^th January 1996 she returned to England from the USA where she had been living and learnt for the first time that her solicitors had taken themselves off the record. On 15^th January 1996 she instructed new solicitors, Messrs Russell Clayton & Co. On 16^th January 1996 the trial date which had been fixed for the hearing of the interpleader action arrived, but the case was not ready for trial. When the action came on for hearing before Master Topley, counsel for the claimant applied for an adjournment but, after refusal of his application, withdrew because he could not proceed without evidence. Master Topley then gave judgment for the defendants in the interpleader action. On 12^th February 1996 Wood J dismissed an appeal by the claimant in those proceedings.

Meantime no further progress had been made in the action against the Bank. On 13^th February 1996 the claimant received an Emergency Legal Aid Certificate in that action. On 14^th February 1996, some two months before the date fixed for trial, the Bank re-reamended its defence to include for the first time an allegation of fraud against the claimant. This substantially rested on the assertion that she had taken away all the jewellery on or before 12^th or alternatively 14^th/15^th January 1993. It depended heavily on the evidence of a Bank clerk, Lena Sabbagh, who had accompanied the claimant when she went to see her box on 12^th January 1993 and said that she remembered the occasion, because, whereas the box was so heavy when it was brought to the claimant that the clerk had got one of the messengers to carry it, the clerk was able to carry it in comfort when the time came for it go back into the vault. The allegation made by the re-reamendment was that, if which was not admitted, any of the relevant items were ever in the safe deposit box, the claimant removed them on or before 12^th, 14th or 15^th January and her claim was fraudulent. The defendants also relied on the evidence of Mr Shaikh, supported by two jewellers called Burridge, who would say that some of the items were delivered to them for display in their shop in Fleet, on a commission basis, and before the date of the alleged disappearance of the jewellery.

On 26^th February 1996, Master Foster ordered the claimant to give further security for costs, she being resident abroad, in the sum of Ł25,000 within 21 days, on the basis that the proceedings were to be stayed if she did not comply with the order. By this time, however as has already been mentioned, she was legally aided. Unfortunately neither side referred Master Foster to the authorities showing that security for costs should not generally be ordered against impecunious persons in such a sum as would stifle a genuine claim. The claimant failed and was apparently unable to raise the Ł25,000 or any part of it, so the proceedings were stayed.

On 12^th August 1996, the claimant obtained a Legal Aid Certificate with a stated monthly contribution. In July 1997, Messrs Russell Clayton & Co ceased to practice and the claimant’s case was transferred to another firm of solicitors. The following month her Legal Aid certificate was likewise transferred. On 26^th August 1997 leading counsel advised the claimant to appeal out of time against Master Foster’s order. At first the Legal Aid Committee were not minded to support the appeal, but they finally did so and on 8^th October 1997 the claimant issued her application for leave to appeal. On 14^th November 1997 Mrs Justice Ebsworth gave permission to appeal and gave certain further directions in regard to the filing of evidence.

On 23^rd January 1998 the Bank’s solicitors wrote to the Legal Aid Board to tell them that in the course of the evidence on the appeal the claimant had disclosed that she had a bank account that contained Ł50,000. On 18^th April 1998, not surprisingly, the Legal Aid Board placed an embargo on further work on behalf of the claimant, though it seems that they were eventually persuaded that she was merely the custodian for her sister of the Ł50,000, which had been transferred to a bank account of her sister in Luxembourg. The Legal Aid Certificate was reinstated on 22^nd May 1998.

Eventually, on 22^nd June 1998 the hearing of the appeal from Master Foster’s order directing the giving of security in the sum of Ł25,000 was heard by Curtis J, who allowed the appeal. The stay was thus removed. But the Legal Aid Board were still not satisfied, because on 1^st July 1998 they re-imposed the embargo.

Thereafter, to use the Judge’s words, “over a period of some nine months until April 1999, they lifted it and put it back, lifted it and put it back, lifted it and put it back, something in the order of ten times, so that for about two thirds of that period the claimant’s solicitors hands were tied”. I take the following particulars from the Chronology with our papers, which I do not think are in dispute:- “1.7.98 Legal Aid embargo re-instated. 21.7.98 “Embargo” lifted but only urgent work to be carried until the Legal Aid investigation was completed. 2.9.98 Legal Aid “Embargo” re-instated. 5.10.98 “Embargo” lifted. 16.10.98 “Embargo” re-instated. 26.10.98 Claimant’s solicitors told orally by the Legal Aid Board that they may carry on working. 11.12.98 “Embargo” re-instated. 30.12.98 “Embargo” lifted. 5.2.99 “Embargo” re-instated – no further work allowed without prior authority. 8.3.99 “Embargo” re-instated. 16.4.99 Legal Aid Board serve a Notice to Show cause. 19.4.99 “Embargo” lifted (notification received 21.4.99). 23.4.99 “Embargo” re-instated because the claimant was one month in arrears with her legal aid payment. 29.5.99 letter from Legal Aid Board confirming that the Legal Aid Certificate was in force.”

On 11^th June 1999, having received this confirmation, the claimant’s solicitors wrote to the Bank’s solicitors saying that they had made an application for a new trial date and were waiting to hear from the court about proposed dates. They asked for clarification of various other matters. On 22^nd June 1999 the Bank’s solicitors responded with a well justified protest saying, among other things: “To say the least of it, it is inappropriate for you to take unilateral action of this kind particularly given your silence over the last year. Whilst our clients reserve all their rights in relation to the delays on your client’s part, it seems to us the correct way of proceeding is not for you and your client to take the unilateral steps you mention but for a case management conference to be appointed.” An appointment was made for a case management hearing to be held on 30^th October 1999. A reply and defence to counterclaim had been served on 10^th September 1999.

The Bank responded by issuing on 20th October 1999 an application that the action be struck out or dismissed for want of prosecution under CPR 3.4 and/or the inherent jurisdiction of the court because “1. of the claimant’s inordinate and inexcusable delay, prejudicing the defendant and a fair trial; and/or 2. the claimant’s claim and the conduct of it is an abuse of the process of the court”.

The Judgment

It appears that, in the submissions made to the Judge, no express reference was made to the CPR and that neither side argued that any particular part of the CPR needed to be taken into account in the exercise of his discretion. It appears that he proceeded on the traditional principles established by Birkett v James [1978] AC 297, namely that the action could be struck out for want of prosecution if, but only if, the court was satisfied (a) that there had been inordinate and inexcusable delay on the part of the claimant or her lawyers; and (b) that such delay would give rise to a substantial risk that it was not possible to have a fair trial on the issues in the action or was such that it was likely to cause, or have caused, serious prejudice to the Bank.

Following these conventional steps, the Judge first considered the length of the delay. He described the delay as having been “at the very minimum” two years and expressed the view that, in a case of this sort, such delay was inordinate and inexcusable. In assessing this period of two years, he apparently took account of the period of about 15 months between August 1993 and November 1994, during which he said “nothing happened”, and the period of about 9 months between 1^st July 1998 when the Legal Aid Board again re-imposed the embargo and 29^th May 1999 when the Board finally confirmed that the Legal Aid Certificate was still in force.

The Judge then turned to the question of prejudice. Because the police had been involved, there were contemporaneous statements from all the crucially important witnesses. One of them, who would still be available to give evidence, was a Mr Allen the manager of the branch, who was involved once the claimant made her complaint on 8^th February 1993 and would describe a system relating to the safe deposit boxes and an interview he had with the claimant that day. Another of the witnesses who again would be available to give evidence was the Bank’s security officer, Mr Callan, a retired police officer. All of his evidence was disputed by the claimant, but he had stated that, on the day after the alleged disappearance of the jewellery was discovered, a gentleman who had accompanied the claimant the day before, when she visited the box, invited him out to dinner. According to Mr Callan, this gentleman, gave an estimate of the legal costs which the Bank might incur in defending the case and suggested that the Bank might find this a “suitable settlement value”; he also proposed a fee which Mr Callan could employ for his own benefit.

A third witness who had given a statement, but whose availability to give evidence was in some doubt, was a Mr Mond who had been a junior manager at the branch of the Bank. He had stated that the key which the claimant presented on 8^th February 1993 was an out of date one. The Judge thought this important because, if accepted, this evidence might tend to show that the claimant had deliberately arrived with the wrong key. But the Judge said that his evidence should be capable of being replaced by someone who could speak to the time at which the Bank moved from one particular padlock to another.

The Judge, however, naturally in view of its content, regarded the evidence of Lena Sabbagh of being of paramount importance. She had left the employment of the Bank some time before and while the bank’s solicitors had written to her at her last known address they had received no reply. The Judge referred to her as the “star witness” and said this:-

“She was only a bank clerk. Tracing where she has gone is necessarily not the quite the same thing as chasing a more senior employee. She was, moreover, a Syrian, and, therefore, there is nothing to suggest that she would remain in the United Kingdom, particularly in the way the atmosphere has changed in the Middle East in recent years. In relation particularly to her and all that has been done in her case is to send a letter to her at her last known address, the steps might still be available and not by means as obvious as they are in some examples. The action is likely then to resolve in essence into the complainant saying that there is not a word of truth in the suggestion that the box had been emptied, and, against that, simply the statement on paper made a month later by a girl clerk to the effect that it was. Some might say that a statement made a month later by a young woman who, on the face of it, had no reason to tell a lie, would, notwithstanding that she was not available for cross examination, carry a great deal of weight. But guessing as to how such a matter is going to be dealt with on the day is a totally different thing. I think there is prejudice. Then suppose she is found. She will of course back up her statement. But it would be almost impossible at this moment in time, and we have no trial date as yet, for her to deal adequately with any circumstantial questions which may be asked of her to test her evidence. So I think there is prejudice there.”

In the circumstances the Judge concluded that there could not be a fair trial of the overall claim, for two reasons. First, quite apart from the possible unavailability of Mr Mond, the Bank had on the face of it lost its best witness, Lena Sabbagh. Secondly, there was a further difficulty:-

“there is going to be argument as to who saw what piece of jewellery in and in what circumstances. It is said that there are photographs showing the claimant, or it may be her sister, wearing some of the jewellery. One would be very fortunate to see the jewellery in any of those photographs. It is really quite idle to put those forward as assisting witnesses in their recollection. There is only one worthwhile photograph, and that is of the necklace which was in the possession of Mr Burridge for a time, which he recognised when the police showed it to him.”

Events since the judgment

The Judge refused permission to appeal from his judgment, but on 4^th May 2000 Lord Justice Latham gave the claimant permission to appeal and further to adduce additional evidence concerning the whereabouts or possible whereabouts of the key witness, Lena Sabbagh. The claimant’s additional evidence consists of a further witness statement of Rima Nasser dated 22^nd December 1999 and two further witness statements of Razi Shah (the claimant’s solicitor) dated 8^th February and 2^nd March 2000. In that evidence it was suggested that inquiry agents instructed on behalf of the claimant had traced Lena Sabbagh to a specified address. On 10^th October 2000 Lord Justice Judge gave the Bank permission to file evidence in reply, which now consists of a second witness statement of Mr R.J. Hewitt, the Bank’s solicitor, dated 24^th October 2000. He exhibits to that statement a copy of a letter written by his firm to Lena Sabbagh at the supposed address, which was returned to his firm with the inscription “I am afraid you have the wrong ‘Lena Sabbagh’”. From correspondence between the respective solicitors in the latter part of this year, it appears that the claimant’s solicitors are unable to take the matter of her availability any further and that the Bank’s solicitors have also drawn a blank in this context. Furthermore Mr Hewitt states that in September 2000 he wrote to all the Bank’s witnesses and had had no response from three of them, including Gary Mond.

On 10^th October 2000 Lord Justice Judge made a further order for security for costs in favour of the Bank in the sum of Ł17,5000. This order was not complied with, so that nothing was done to progress this appeal until 11^th April 2001 when Lord Justices Simon Brown and Mance allowed an appeal from Lord Justice Judge’s order and ordered that the claimant’s previous appeal be reinstated upon security for costs in the appeal of Ł5000. I understand that this security has been duly given.

Two relevant recent decisions

In the light of the decision of this court in Biguzzi v Rank Leisure plc [1999] 1 WLR 1926 it is common ground that, contrary to the Judge’s approach, the relevant principles at the time when he gave his judgment were not those in Birkett v James but those set out in the CPR. Indeed Lord Woolf MR in that case went so far as to say (at p 1934G)

“The whole purpose of making the CPR a self-contained code was to send the message which now generally applies. Earlier authorities are no longer generally of any relevance once the CPR applies.”

I am, however, sure that in saying this, Lord Woolf MR was not intending to suggest that the factors regarded by the court in Birkett v James as crucial, namely the length of the relevant delay, the culpability for it, the resulting prejudice to the defendant and the prospects of a fair trial are no longer relevant considerations when the court has to deal with an application for dismissal for want of prosecution. As he put it (at p 1934 E-F), under the new approach which the CPR requires:

“Judges have to be trusted to exercise the wide discretion which they have fairly and justly in all circumstances, while recognising their responsibility to litigants in general not to allow the same defaults to occur in the future as have occurred in the past. When judges seek to do that, it is important that this court should not interfere unless judges can be shown to have exercised their powers in some way which contravenes the relevant principles.”

In the Biguzzi case the judge in the court below had in fact sought to apply the CPR principles. In a still more recent decision, Purefuture Ltd v Simmons & Simmons 25^th May 2000 (unreported) the Court of Appeal had to consider the position that arose in a case, similar in this respect to the present, where the judge in the court below had dealt with an application to dismiss an application for want of prosecution on the basis of the Birkett v James principles, without regard to the principles of the CPR. The court was of the unanimous opinion that, if the matter was considered on the basis of those old principles, there would be no basis on which the court could interfere with the exercise of the judge’s discretion to strike out the action for want of prosecution.

However, Lord Justice Clarke, with whom Lord Justice Latham agreed, pointed out that the CPR should have been applied, albeit having regard to the rules of court that were in force at the relevant times. Having referred to a number of earlier decisions including Biguzzi (supra), he accepted (at paragraph 54-57) the following submissions by counsel for the appellant claimant:

“(1) The central issue is whether it would be fair or just to allow the action to go to trial. In deciding this question the court must consider its alternative powers so that a decision may, but need not necessarily be, the same as would have obtained under the old rules.

(2) Although the court no longer needs to consider prejudice in the Birkett v James sense, prejudice remains relevant to the issue of what is just (see Axa Insurance Co Ltd v Swire Fraser [the Times 29 January 2000] at paragraph 19)

(3) In many cases there will be alternatives that will allow the case to be dealt with justly without taking the draconian step of striking out (see Biguzzi at p 940b-c)

(4) In coming to its decision the court should consider:

(a) the overriding objective in Part 1 CPR;

(b) the flexibility to deal with this type of claim as given by the court’s new case management powers;

(c) the rules which allow striking out (in an appropriate case) are to be interpreted in accordance with the overriding objective; and

(d) no single one of the available range of powers is inherently more appropriate than any other so that the court should consider all its relevant powers.

(5) However the considerations continue to include whether the prejudice is so serious that it would be unjust to the defendant to require the case to be tried.”

Subject to these points, Lord Justice Clarke accepted (at paragraph 53) the correctness of the following statement of Lord Lloyd in UCB Corporate Services Ltd v Halifax (SW) Ltd (unreported 6^th December 1999):

“It would indeed be ironic if as a result of the new rules coming into force, and the judgment of this court in the Biguzzi case, judges were required to treat cases of delay with greater leniency than they would have done under the old procedure . I feel sure that that cannot have been the intention of the Master of the Rolls in giving judgment in the Biguzzi case. What he was concerned to point out was that there are now additional powers which the court may and should use in the less serious cases. But in the more serious cases striking out remains the appropriate remedy when that is what justice requires.”

Having set out the factors which he took into consideration Lord Justice Clarke concluded as follows (in paragraph 60 and 61):

“However, even bearing all those factors in mind, if one stands back from the facts of this case and asks whether it is just to allow a claim to proceed to trial over 12 years after the event, where the issues depend to a very significant extent on the judge making findings about the content of conversations at a crucial time in the transaction, in circumstances where there is little or no contemporary written material to assist him, where no proceedings were issued for nearly six years and where, thereafter the claimant was guilty of inordinate and inexcusable delay for nearly 2˝ years under the rules then in force, the answer is in my opinion “no”. .In these circumstances it would not be just, and in accordance with the overriding objective set out in CPR 1.1, to permit the claim to proceed.”

Lord Justice Latham agreed, saying (in paragraph 64) that the judge in the court below had essentially been saying that a fair trial of the matters raised by the claim was no longer possible and (in paragraph 68) that this was clearly the result of the delay of the claimant, both before and after the issue of the writ.

I am, with respect, very content to approach the examination of the exercise of the Judge’s discretion in the present case on the basis of the guidance given in Purefuture.

The arguments

Mr Irvin for the Bank helpfully identified five periods of delay considered by the Judge:-

i) The period between August 1993 and November 1994 during which the Judge said that “nothing happened”. (“the first period”).

ii) The period between November 1994 and February 1996 during which the interpleader action progressed and was finally disposed of (“the interpleader period”).

iii) The period between Master Foster’s order of 26 February 1996 and 22 June 1998 when Curtis J allowed the appeal from that order (“the stay period).

iv) The period from June 1998 to June 1999 when the claimant’s solicitors were corresponding with the Legal Aid Board. (“the post-appeal period”).

v) The period from June 1999 to September 1999 prior to the Bank’s application for dismissal for want of prosecution (“the final period”).