England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM QUEEN'S BENCH DIVISION
(MR WALTER AYLEN QC)

		Royal Courts of Justice Strand London WC2
		Monday 22nd October 2001

1. LORD JUSTICE BUXTON: This is a renewed application for permission to appeal a decision of Mr Aylen QC sitting as a Deputy Judge of the Queen's Bench division on 21st June 2001. Mr Aylen himself refused permission because he took the view that only questions of fact were involved.
2. The application is renewed by Mr Godfrey, who was, with his wife, claimant in the action against Mr Jerrett. At the trial Mr Godfrey was represented by counsel as was Mr Jerrett.
3. I do not intend, for the purpose of this judgment, to set out the basic facts in the case, because they are available in the judgment of Mr Aylen and, to a large part, but I accept not wholly, are not in contention.
4. The issue before Mr Aylen was seen by him as turning on a question of fact, that is to say, who was the client of Mr Jerrett when he was dealing with the £60,000 that was transferred to his client account on the instructions of Mr Godfrey. It has never been suggested, indeed it is positively denied, that Mr Jerrett was ever Mr Godfrey's solicitor. The question, in the judge's view, was to determine who Mr Jerrett was acting for when he transferred monies out of the client account, in a way that Mr Godfrey says was inconsistent with his obligations.
5. I should point out before going further that Mr Aylen recorded that the claim was based on constructive trust and claims in tort based on negligence had been agreed by counsel not to be pursued, although they were claims in those terms to be found in the original statement of claim filed on behalf of Mr Godfrey.
6. The judge formulated the issue as follows at page 9A:

"The issue... is the basis upon which the £60,000 came into the client account, and it can be encapsulated really in the short question: who was the client of Mr Jerrett his capacity as a partner at that stage in E P Rugg?"

7. Mr Godfrey says that that was the wrong question or at least not necessarily the exclusive question. The judge should have considered whether what he describes as the ownership of the money or the obligation of the solicitor was to be determined according to the instructions that Mr Godfrey himself intended to give to him. That is on the basis that the £60,000 was intended by Mr Godfrey and should have been known by Mr Jerrett to have been intended by Mr Godfrey, as a loan to a Princess Khalil. Because of the dissipation of the £60,000 she never received the loan, and Mr Godfrey has not succeeded in recovering more than a small percentage of it from her. The judge did not accept that approach to the case. He went in some detail through the financial relations between the various parties and then recorded a submission by Mr Picton, acting on behalf of the defendant, in respect of the particular documents, page 28F:

"He prays it in aid of his overall contention that, far from this being a simple loan to Princess Khalil in the sum of £60,000, the transaction has all the hallmarks of an investment enterprise on the part of Mr Godfrey for whatever purpose, about which he has not told us.

I am bound to say that I think that submission is correct."

8. Then the judge went on to give other circumstantial reasons why he thought the submission was correct.
9. It is important to note that the judge reached that basic conclusion after hearing Mr Godfrey's evidence and looking very closely at the documents. It was therefore a finding which, in my judgement, this Court is not in a position to go behind: that the basis of this transaction was not a loan to Princess Khalil at all.
10. Secondly, the judge investigated in very great detail the circumstances and documents attaching to this money; or rather, as it had by then become, this chose in action in the solicitor's books. A document was produced which, it was argued, demonstrated that the money had in fact been the money of, and was known by Mr Jerrett to be an obligation to Princess Khalil. She had control over that part of the client account and therefore Mr Jerrett had acted wrongly in paying away the money on the basis of instructions he received from Mr Durani.
11. The judge, however, had to decide whether it had been brought home or not to Mr Durani, that his client was to be Princess Khalil, she having been, as it were, conferred on him by Mr Godfrey. He recorded this evidence by Mr Jerrett:

"'My client, Mr Durani, instructed me that he had arranged for a payment of £60,000 into E P Rugg & Co client account and that the payment related to his mother in law, HH Khalil, and that he would instruct me further on payment out of the money once received.'

At the resumption of his cross-examination this morning he told me 'I was to receive money for Durani any that he wished it recorded that it related to Khalil.'"

12. The judge accepted that evidence. He said there was no reason why he should disbelieve Mr Jerrett on his account. He said this, at page 32B:

"Is there any reason why I should say he may be mistaken, or that he must be mistaken by virtue of the passage of time? In my judgment there plainly is no such reason. He [Mr Jerrett] was described by

Mr Godfrey in general terms as an honourable and straightforward solicitor. I believe him to be so. He has accepted the bad bits of this document. He has accepted that it is inaccurate.

Ones comes back to that which is first for consideration in this case. That is what was the retainer? He or she who gives the retainer is the client, and the solicitor is the agent of that person. The evidence is that it was Durani, not only in relation to the inception but in relation to the conduct of the account in the days and months that followed. There is no reason why I should reject that evidence."

13. The document referred to was, on its face, an ambiguous ledger account which could be read, on one view, and Mr Godfrey strongly says should be read as indicating Princess Khalil was seen to be the client.
14. In this case, however, the judge below did not have to rely solely on the documents, and on what he could make of them. He had evidence from Mr Jerrett as to what the implications of them were.
15. Mr Godfrey criticises the reliance on Mr Jerrett's evidence for two reasons. One, he says he is giving evidence about events that occurred many years ago, and secondly, as a solicitor, he has failed to comply with the requirements of various of the solicitors accounting rules and general practice, first of all, by not taking sufficient attendance notes, at least not ones that he now has, and secondly, by ambiguity of the records.
16. I have to say two things about that. First of all, the judge was well aware, and indeed said in terms, that he had to look at the evidence with caution, because it was evidence of Mr Jerrett trying honestly, as the judge found, to remember what had happened many years ago. Therefore he approached the evidence on that basis.
17. I also perhaps should comment, although this is not in any way decisive, that a good deal of the delay in this case, and thus the fact that Mr Jerrett had to remember over a long period of time, sprung from the fact that the writ does not appear to have been issued for 3 years after the events complained of, and thereafter there were substantial delays which may or may not be justified in the conduct of the action. Be that as it may, the fact of the delay remains, and the judge was well aware of it.
18. Secondly, so far as the solicitor's conduct is concerned, the judge also was well aware of those criticisms. The mere fact that the witness has behaved in a way that, according to Mr Godfrey, he should not have done as a solicitor does not in any way lead to a decision in Mr Godfrey's favour in this case, nor does it compel the judge to a conclusion on that he should disbelieve Mr Jerrett. Therefore, though I understand Mr Godfrey's complaint in this matter, it is not a matter that could coerce the judge to a conclusion different from that which otherwise he would reach.
19. Also on this point, there is the further difficulty that there was a conflict, a severe conflict, about a telephone conversation in November 1991, in which different accounts were given of whether Mr Godfrey had said that Mr Durani was the person who was effectively in charge of the matter. On page 33, he said this:

"I accept Mr Jerrett's account. I accept that Mr Godfrey did tell him that effectively Durani was in charge and that the arrangement was with Durani and that Durani ran the account - I summarise the account of the conversation."

20. Given the question that the judge posed himself, his answer cannot be gone behind in this Court because it was a conclusion of fact which he had ample reason to come on the basis of evidence that he saw and heard in court. The argument that he asked himself the wrong question is, in my judgment, misplaced because of the finding that he made, amongst other things, again having heard evidence, as to the underlying nature of the transaction.
21. For those reasons, therefore, I am satisfied that the Court of Appeal would not pursue any further appeal into this action and I would not grant permission for it.
22. I should say one further thing. I have had a great deal of difficulty as to the constitution of this action in the first place. It has been agreed that any claim in negligence should disappear. The basis of the law that was accepted before the judge is set out at page 9 of his judgment, from Article 113 of Bowstead as to the duty of the agent to repay money received for use of the principal. Bowstead sets out certain circumstances where an agent is personally liable to repay money to a person who has given it to him on behalf of his principal. I do not see how the circumstances of this case, even if every assumption is made against Mr Jerrett, fall within that category. Further, I do not see any other ground on which what was described as an action for money having received could be pursued. If the money was, as Mr Godfrey says but the judge did not accept, handed to EP Rugg & Co, as agents for their client, Princess Khalil, and as a loan to her, they were liable to account to her for that money. If, as in the event, they did not pay it over to her, she has a complaint against them. But Mr Godfrey's claim for the recovery of his money is a claim against Princess Khalil and not against her agent.
23. It is not necessary to pursue this issue, for the reasons that I have already given, in dismissing the appeal. I mention it only because it seems to me, even if the judge's findings had been greatly different from what they were, they were still very substantial difficulties in Mr Godfrey's way in recovering the sum of money.
24. Like the judge, I regret that he has lost his money in whichever circumstances that has arisen, but I fear that the mode he has chosen to seek to recover it is not one he is able to pursue.