England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
(Mr Justice Jacob)

		The Royal Courts of Justice Strand London WC2 Wednesday 17th July, 2002

1. LORD JUSTICE KEENE: This is an application for permission to appeal against the decision of Jacob J dated 30th May 2002. By that decision the judge struck out the applicant's claim against the defendants, Hammond Suddards, who are a firm of solicitors. The claim arose out of proceedings in which the defendant firm had acted for the other party in a claim brought against the applicant, Mr Abbas. That other party was an American company known as Seer Technologies.
2. The Seer proceedings arose from a transaction whereby Mr Abbas granted Seer a licence to use a particular software package. Subsequently Mr Abbas became an employee of the company. Seer wrongly came to the view that Mr Abbas had misappropriated funds from Seer during the course of certain financial transactions between Mr Abbas and Citibank. As a result Seer dismissed Mr Abbas and commenced proceedings against him for fraud and breach of the licensing agreement. Mr Abbas denied the allegation of fraud and he counterclaimed for damages for wrongful dismissal.
3. In the course of those proceedings Seer sought and obtained on 15th December 1997 an injunction and a freezing order against Mr Abbas. The freezing order was based on an affidavit sworn by a Mr Dennis McKinnie, Vice-President and General Counsel to one of the Seer companies. In it Mr McKinnie dealt, amongst other things, with Seer's claim for some $68,000, said to be due to Seer from Mr Abbas. This amount was the total of three cheques paid to Mr Abbas' company, CBS, by Citibank for services rendered in August, September and October 1996. According to Mr McKinnie's affidavit CBS should have remitted this money to Seer because the licence agreement so provided and because, at least in respect of the September and October amounts, the services were provided by Seer employees, since that is what CBS employees had become under the terms of the licence agreement of 9th September 1996.
4. It later transpired that that part of the affidavit was wrong and the freezing order was lifted. Indeed, it was conceded that the order should never have been made and, given Seer's undertaking in damages, the court directed an inquiry as to the loss which had been suffered by Mr Abbas.
5. In due course, however, Mr Abbas, having failed to comply with successive orders of the court, found his claim struck out. The striking out of his claim took place on 24th July 2001. It was struck out save to the extent of £135,350.39 which was admitted by Seer. An application by Mr Abbas for permission to appeal against that decision to the Court of Appeal was dismissed by Chadwick LJ.
6. In the meantime Mr Abbas had begun these proceedings against Hammond Suddards, who had been Seer's solicitors, claiming over £3 million in damages. That claim had been stayed initially pending the conclusion of the Seer proceedings. But once those had been concluded, the action against Hammond Suddards was reinstated. Hammond Suddards then applied to strike out the claim on various bases, and it was that application which was granted by the judge on 30th May 2002.
7. The essence of Mr Abbas' claim against Hammond Suddards is that they knew at the time of the freezing order, or shortly thereafter, that the affidavit of Mr McKinnie was false in part and that the freezing order had been obtained on a false basis. It is not entirely clear from the particulars of claim what cause of action is being alleged, but certainly it is said to be based on fraud. It cannot realistically be founded on mere negligence, since it cannot be argued that Hammond Suddards owed a duty of care to Mr Abbas who was not their client.
8. Inevitably, a heavy burden of proof rests upon any party alleging fraud. Mr Abbas' case is that Hammond Suddards must have known that the part of Mr McKinnie's affidavit dealing with the $68,000 was wrong. He relies first and foremost on a letter dated 23rd December 1997 from his then solicitors to Hammond Suddards, a letter which said that it had been arranged at a meeting on 29th October 1996 that CBS, Mr Abbas' company, should continue to invoice Citibank for the services provided. Reference was made in the letter to a memo of that meeting of October 1996 confirming this. Therefore, said the letter, it was proper for CBS to invoice Citibank.
9. The memo does indeed indicate that CBS would invoice Citibank, but also that Seer would be entitled to the amounts received by CBS less 20 per cent. Apparently CBS were to be billed by Seer. However, the memo and the letter do not seem to dispute that the money -- or at least the great bulk of it -- was to be remitted to Seer by CBS. That was the principal allegation made on this topic in Mr McKinnie's affidavit at paragraphs 21 to 23 inclusive. He says for example in paragraph 21, referring to the August payment by Citibank:

"... those funds should have been remitted to Seer US. This did not happen ..."

10. There was to my mind nothing obviously false about that statement, certainly not to a solicitor having sight of the licence agreement, the letter of 23rd December 1997 and the memo of 29th October 1996. Whether the solicitor's conduct could be castigated as negligent is neither here nor there. It is enough that these documents did not begin to establish knowledge on the part of Hammond Suddards that the McKinnie affidavit was wrong in these respects. I therefore see no force in this principal argument which is being advanced by Mr Abbas.
11. Mr Abbas raises a number of other points in his skeleton argument which he has not sought to elaborate this morning. He complains that he did not receive a fair hearing before Jacob J. Largely this comes down to an allegation of bias on the part of the judge. It is said that Jacob J was for many years the leading counsel representing Hammond Suddards before he became a judge. Secondly, it is said that he has not denied that he is a Zionist, whereas he, Mr Abbas, was born in Baghdad. Thirdly, it is said that Jacob J suggested on an earlier occasion as a result of a judgment in their favour that Hammond Suddards and their counsel should treat themselves to some champagne in celebration of his judgment in their favour.
12. I am bound to say that no evidence is produced to support any of these allegations, and I consequently need say no more about the third of them. There is no transcript recording those remarks which are being alleged. Moreover, it is established that the fact that a judge was while at the Bar instructed by a firm of solicitors is no basis for an allegation of bias. Most judges will have instructed by a large number of solicitors, some regularly, and there is no reason to believe that this in any way affects their impartiality in dealing with a case involving such a firm.
13. As for the complaint that the judge is a Zionist, not only is there no evidence to that effect, but it is a suggestion which I find thoroughly distasteful and I am surprised that Mr Abbas should have seen fit to raise it. At the end of his judgment Jacob J referred to the fact that he is not Jewish. It is, in my judgment, regrettable that he was put in a position where he felt it necessary to say that. Judges in this country administer justice having taken an oath to carry out their functions without fear or favour, and the religion or race of a judge -- or, for that matter, even his political outlook -- provides no basis whatsoever for a suggestion that he or she would be untrue to that judicial oath. It is a wholly irrelevant consideration.
14. Then Mr Abbas criticises a number of passages in the judgment below as being inaccurate. These relate to the judge's brief summary of the Seer's proceedings, something which the judge provided quite patently as background to the present proceedings. Whether there were any such factual inaccuracies in that background account is of no relevance to the present matter, and I do not need to determine whether these submissions are soundly based or not. They did not go to the crucial matters which are in issue in this proposed appeal.
15. Like Jacob J, I can see that Mr Abbas suffered substantially as a result of the freezing order obtained by Seer and the injunction, but that was subject of the Seer proceedings. The outcome of those provides no basis that I can see for the present claim against the solicitors Hammond Suddards.
16. An appeal against the decision of Jacob J has no real prospect of success. In those circumstances, it must follow that this application is dismissed.
ORDER: Application for permission to appeal refused. (Order not part of approved judgment)