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 CENTRAL LONDON COUNTY COURT
(Mr Recorder Harrod)

		Royal Courts of Justice Strand London WC2 Wednesday 13th March, 2002

1. LORD JUSTICE ALDOUS: Mr Ali seeks permission to appeal against the judgment and order of Mr Recorder Harrod, sitting in the Central London County Court, of 21st November 2001. By that judgment he dismissed Mr Ali's claim against Mr Butt.
2. The history behind this litigation goes back to 1982 but I will start with Mr Ali. He was born in Bangladesh and moved to England in 1962. His ambition was to become a barrister, but ultimately he became a restaurateur. In 1982 he bought a leasehold interest in a restaurant, with a flat above it, in Wandsworth which he ran under the name "Sonchita Tandoori". The contract of purchase included an option, exercisable before June 1986, to buy the freehold for a further sum. Mr Ali exercised that option, but the landlords refused to comply with their obligations. The result was that Mr Ali brought an action for specific performance in the County Court. The landlords initially succeeded, but on appeal this court reversed the judgment and ordered specific performance.
3. The judgment of the Court of Appeal was given after the restaurant had ceased trading in 1987. The purchase was ultimately completed with the aid of a mortgage from the National Westminster Bank of £60,000. That was negotiated with the aid of Mr Butt, who is a financial adviser. The loan, secured by way of mortgage, was repayable over 10 years at £949 per month. Mr Ali never restarted the business because he had insufficient money to refurbish it, and he was unable to make the payments under the loan agreement.
4. The property was repossessed by the National Westminster Bank late in 1995 and ultimately sold for £17,000. The sum clearly incensed Mr Ali because he had previous to that sale entered into a contract of sale for the sale of the premises for £210,000. He therefore started proceedings against the National Westminster Bank. In it he alleged breach of contract for failure to supply additional funds. He also alleged sale at an undervalue. His cause of action for breach of contract was struck out as it was time-barred. The action for sale at an undervalue was ordered by Master Moncaster to be tried.
5. The present action with which I am concerned is an action against Mr Butt. Mr Ali alleges that the reason for the disaster that had befallen him was the negligence, breaches of contract and fraudulent acts of Mr Butt who was the person, as I said, who arranged the mortgage. His allegations were denied by Mr Butt.
6. Mr Ali has told me in his oral submissions that the whole transaction has, in effect, ruined him. The result has been that his family has been disadvantaged and he has been put in a very difficult position.
7. The action came for trial before the judge. One of the allegations made was that Mr Butt conspired with representatives of the National Westminster Bank to lend him too little money. The judge rejected that allegation. He said this:

"He suggested, in his pleadings, that there was some sort of conspiracy between Mr Butt and the bank to lend him less than he really needed, with the result that the bank would be in a position to take possession of the restaurant premises, but he accepted, during the trial, that there was no evidence of any such conspiracy; it was just a suspicion. I have to say that I find it very implausible that they should have been any such conspiracy, and I find that there was none."

8. Mr Ali also complained about the efforts that were made by Mr Butt to obtain further finance to carry out the refurbishment of the restaurant. It was and is Mr Ali's belief that he was in fact promised £90,000, which could be raised, and that he need only pay £500 for a survey. Thereafter Mr Butt would be able to process his application for the money in the normal way. The judge dealt with that at page 11 of his judgment. He accepted the evidence of Mr Butt. He drew attention to the fact that the property had been unused as a restaurant since 1987. It had been neglected and was in a seriously dilapidated state. He said that he did not have any valuations, but concluded that Mr Ali's position in raising further finance was poor, particularly as he had by that time defaulted on the original debt.
9. The judge also had to consider why the £500 was paid by Mr Ali to Mr Butt. He said that he accepted the evidence of Mr Butt that he was only willing to give assistance if £500 was paid to him, and that all he was doing was making enquiries and that all Mr Ali could hope for at the end of those enquiries would be to have the name of a finance company who might be willing to advance the money.
10. The judge held that although he sympathised with Mr Ali's position, it did not seem to him that any blame could be laid at Mr Butt's door. He rejected a claim for £156,000 on the basis of loss of assets on the ground that the claim was totally unsustainable. He went on to reject a claim for loss of earnings as there was no basis for it and no cause of action on which to hang it. He then rejected a claim for damages and compensation and costs because he found that Mr Ali did not have any form of claim against Mr Butt. He dismissed the action.
11. The main ground upon which permission to appeal is sought is that it is said that the judge should have held that Mr Ali was debarred from defending. The judge rejected that. He set out the history of the proceedings from when the original County Court summons was issued in 1997. It seems from the documents that on 5th May 1997 the court of its own motion struck out Mr Ali's pleading, but the case was reinstated upon a further eight-page statement being served. In November 1999 Mr Ali applied for judgment on the basis that no defence had been served. At a hearing on 21st November 2000 Mr Butt was directed to file a defence. The claimant, Mr Ali, was given leave to file amended particulars of claim. Orders for disclosure and inspection were also made. A defence was filed on 12th December 2000 which put Mr Ali to strict proof. On 16th February 2001 a further order was made requiring pleadings in the form prescribed by the rules to be served. On 29th March 2001 Mr Butt put in a defence and counterclaim which on its face appeared to comply with the rules. On 24th May 2001 an order was made rescinding the previous directions and allocating the case to the multi-track. The crucial order relied on by Mr Ali is at page 138 of the bundle. It stated:

"Unless the Defendant return the listing Questionnaire by 4:00pm on 22nd September 2001 the Defendant be debarred from defending the claim."

12. There is no listing questionnaire in the papers that have been put before me. However, the judge held on page 3:

"On 6th September 2001 Judge Medawar ordered that the defendant be barred from defending if he did not lodge a listing questionnaire by 20th September. This was extended to 26th October by a further order and the defendant did, in fact, lodge the listing questionnaire on 10th October. I mention these last two orders because Mr Ali's first application to me, when the case started, was that Mr Butt was debarred from defending. This is clearly not the case; Mr Butt has complied with the orders."

13. I have no reason to doubt the accuracy of the judge's conclusion. In fact, it appears to be correct. In those circumstances, I do not believe permission to appeal upon that ground would serve a useful purpose.
14. Mr Ali has put in amended grounds of appeal. They consist of five pages of closely-typed allegations. They include allegations that small accountants and finance brokers, of which Mr Butt was one, were fiddlers, and also that the judge made serious errors in law and failed to assess what was lies. He had seriously neglected to deal with the mixed gossips and failures of the bank. There was a totally irregular hearing. The judge had failed to spot the conspiracy, deception and fraud, and he had made serious errors and ignored procedural formalities.
15. I can find no basis for the allegations made against the judge. He appears in his judgment to have dealt with the matters that were raised before him. He believed Mr Butt and it followed from that that the case would fail. He decided the matter upon the evidence before him and that was his duty. Once he had decided that Mr Butt was telling the truth, then the allegations of conspiracy, deception and fraud fell away because it depended upon his evidence being disbelieved.
16. There is, in my view, no real prospect of an appeal succeeding and I therefore refuse permission.
ORDER: Application for permission to appeal refused. (Order not part of approved judgment)