England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
APPLICATION FOR PERMISSION TO APPEAL
AND A STAY OF EXECUTION

		Royal Courts of Justice Strand London WC2 Tuesday, 30th April 2002

1. LORD JUSTICE JONATHAN PARKER: This is an application by Mr Kamel Balal, the defendant in the action, for permission to appeal against an order made by His Honour Judge Wakefield, sitting at the Central London County Court, on 26 October 2001. By his order the judge dismissed the applicant's counterclaim in the action and ordered that the net proceeds of sale of a property of which the claimant, Mrs Elham Abood, is the registered proprietor, known as 18 Green Lanes, Hillingdon, be paid out of court to the claimant's solicitors. Permission to appeal was refused by the judge. Mr Balal has appeared in person this morning to make his application.
2. The background to the application is, in summary, as follows. In June 1993 Bassim Balal ("Bassim"), who subsequently became the claimant's husband, was convicted of an offence in Morocco and fined a sum equivalent to £136,500 with a sentence of 2 years' imprisonment in default. Bassim was unable to pay the fine so he was imprisoned in Morocco. Bassim had two brothers, Nabil and Muaed, and a sister Bassima. When the claimant heard of Bassim's plight she set about finding the money necessary to procure his release from prison. To that end she approached his brothers and sister. Bassima, the sister, is married to the applicant. The applicant agreed to assist by making a loan but he required security for its repayment. The claimant was the registered proprietor of 18 Green Lanes and was prepared to offer that property by way of security. Discussions accordingly took place between the claimant and Muaed, on the one hand, and the applicant and Bassima, on the other.
3. It is common ground that on 1 October 1993 a meeting took place at which the claimant and the applicant were present, in the course of which they signed a written agreement in Arabic script. The agreement was witnessed by Muaed and Nabil who were also present at the meeting. Bassima was also in attendance. The meeting took place at the then home of the applicant and Bassima at 257 Westway, White City. By that written agreement the claimant acknowledged receipt of a sum of £62,000 and she agreed to execute a legal charge on 18 Green Lanes to secure repayment of that sum. There was also a provision for interest.
4. It is also common ground that no money changed hands at the meeting when that form of agreement was signed. It is in this connection that the dispute between the claimant and the applicant arises. The applicant's case is that £62,000 was handed to the claimant in cash at the meeting earlier that day which also took place at the applicant's home. The applicant alleges that the claimant returned later to sign the agreement. The applicant concedes that he took no receipt from the claimant at the earlier meeting when he handed over the cash, and that nothing was written down on that occasion to record the transaction. He does say however that the cash was handed over in the presence of his wife Bassima and of two independent witnesses who happened to be present at the time, namely Mr Al-Khalili and Mr Yousif.
5. The claimant, on the other hand, asserts that there was no such earlier meeting as is contended for by the applicant, and that no part of the agreed sum of £62,000 was in the event paid over to her.
6. Following the signing of an agreement the claimant and the applicant attended at the offices of solicitors, William Sturges & Co, to deal with the matter of the legal charge. They were seen by an assistant solicitor, a Mrs Uppal. In the course of that meeting the claimant told Mrs Uppal that she had received the sum of £62,000 in cash. This is confirmed by an attendance note which Mrs Uppal made. The solicitors accordingly prepared a form of legal charge which was executed on 2 November 1993 (albeit it was backdated to 1 October 1993) and which was in due course registered at HM Land Registry. As one would expect, the legal charge contained an acknowledgement by the claimant that she had received the agreed sum of £62,000.
7. In June 1994 Bassim was released from prison, and shortly thereafter he and the claimant were married in a Muslim ceremony.
8. In May 1995 the claimant's solicitors, Messrs Hecht & Co, wrote to the applicant requesting (in effect) that the legal charge be cancelled on the footing that no part of the agreed loan had been made. Accordingly, at that point, if not before, the dispute between the claimant and the applicant came to the surface.
9. In January 1996 the claimant issued the writ in the present action accompanied by a Statement of Claim. By her Statement of Claim the claimant alleged that no part of the loan of £62,000 had been made and on that footing she claimed rescission of the loan agreement, rectification of the Register by the deletion of the entry in relation to the legal charge or, alternatively, damages. By his Defence, the applicant contended he had paid £62,000 in cash to the claimant. Subsequently, the applicant added a counterclaim for the repayment of that sum.
10. The property was at some stage sold and the net proceeds paid into court. Accordingly, the dispute is as to who is entitled to those proceeds.
11. At the trial the claimant and the applicant both gave oral evidence. Oral evidence was also given on behalf of the claimant by Nabil, Muaed and Bassim. No other witnesses were called on behalf of the applicant. The applicant did, however, seek to rely on witness statements made earlier in the proceedings by Bassima and Mr Al-Khalili in support of the applicant's contention that he paid the £62,000 to the claimant at an earlier meeting to which I have referred. The applicant also relied on the fact that the legal charge contained an acknowledgement by the claimant that she had received the £62,000.
12. By the date of the trial, however, a most confusing situation had arisen in relation to the witness statements which had earlier been exchanged. I take Bassim first. In his first statement he asserted that the only money he had received from the claimant at the material time was a sum of £8,000 representing the proceeds of the salel of her jewellery. That statement was dated 19 June 1997. In a second statement, dated 20 January 2001 Bassim asserted that the claimant had told him that she had received £18,000 from the applicant as part payment of the agreed sum of £62,000. Bassim described himself in his second statement as being "very shocked and surprised" by that revelation, and he said that he was currently in the process of taking divorce proceedings. However in a third statement dated 8 August 2001 Bassim confirmed his first statement and asserted that his second statement was untrue. He asserted that he had made his second statement in the course of a matrimonial dispute with the claimant.
13. I turn to Nabil and Muaed. They both made statements setting out what transpired at the meeting when the loan agreement was signed, and corroborating the claimant's evidence that the agreed sum of £62,000 was never in fact paid by the applicant. However by a document addressed to Miss Barbara Hecht of Messrs Hecht & Co, which was signed by Muaed on 3 February 2001 and by Nabil on 9th February 2001, they withdrew their earlier statements in the light of Bassim's assertion that the claimant had received £18,000 by way of part payment of the £62,000. In that document Muaed and Nabil asserted that they did not wish to be present in court during the trial, and that in the light of this further information provided by Bassim they were unable to decide who was telling the truth and who was telling lies.
14. I turn to Bassima. By her first statement she corroborated the applicant's account of what happened at the earlier meeting on 1 October 1993, when, as she stated, the £62,000 was handed over in cash. That statement was dated 10 December 1998. However in a second statement, dated 21 September 2001, she stated that she was by that time separated from the applicant and that she had been under pressure when she made her first statement. She went on to say that as far as she was concerned "it should be as if the statement had never existed."
15. Lastly, I turn to Mr Al-Khalili. In his first statement, which is undated, he corroborated the account given by the applicant and Bassima on the earlier meeting of 1 October 1993. However by a second statement dated 20 October 2000 Mr Al-Khalili asserted that his first statement was not true and that he had never been to the applicant's house. He asserts in his second statement that he made his earlier statement because he was put under pressure to do so by the applicant. The applicant, for his part, asserts that Bassima and Mr Al-Khalili were pressured into withdrawing their statements by Bassim who had harassed and threatened them.
16. Before turning to the judgment, it is convenient at this point to refer to a statement purportedly made by a Dr Abdulla Al-Rashied which was also relied on by the applicant. By that statement, dated 31 May 1997, Dr Al-Rashied (if she was, indeed, the signatory) stated that she was currently retired but had previously been an Assistant Under-Secretary in the Ministry of Health in Kuwait and President of the Kuwait Medical Association. Paragraphs 4 and 5 of the statement read:

"I confirm that I did lend him the sum of £62,000 to Mr Balal as requested. I gave the money to Mr Mishan who gave it to Mr Balal on my behalf around 1st of October 1993.

To date I have not received repayment of £62,000 from Mr Balal. I understand that he has financial difficulties at present and that he will repay me with interest as soon as he is able to do so."

17. In addressing the single issue of fact which called for his decision, namely whether the loan of £62,000 was ever made, the judge was thus faced with a most confusing evidential picture. As to Bassima and Mr Al-Khalili, neither of whom gave oral evidence, the judge concluded that since they had subsequently withdrawn their earlier statements he could attach no weight to their statements. So far as the statement purporting to be from Dr Al-Rashied was concerned, the judge concluded that it stretched credulity too far to suppose that Dr Al-Rashied, having lent the applicant £62,000, would not, in the 9 years since that loan was supposedly made, have taken any steps to seek repayment or to recover any interest. The judge also said that he could not be sure that the signature at the foot of the statement was in fact that of Dr Al-Rashied. In the circumstances the judge disregarded that statement, the authenticity of which was not proved. The result, as the judge noted at page 7 line 22 of the transcript of his judgment, was that the evidence of the applicant was not corroborated by any other acceptable evidence other than the fact that the claimant signed the loan agreement which contained an express acknowledgement of receipt by her of the £62,000, and that she had also signed a legal charge which contained a similar acknowledgement. The judge concluded that those two factors placed the evidential burden on the claimant to prove that she did not receive the £62,000.
18. The judge turned to consider the evidence of the claimant's witnesses, namely Nabil, Muaed and Bassima. The judge regarded their evidence as being undermined by the fact that they had withdrawn their earlier statements although Bassim had by his third statement purported to reinstate his original statement. At page 9 line 11 of the transcript the judge said:

"What am I to make of all this? I am prepared to attach weight to Muaed's and Nabil's evidence. But I must search elsewhere if I am to decide, on a balance of probabilities, that £62,000 was not paid to the claimant."

19. The judge identified two such factors. Firstly, that the applicant had never apparently pressed the claimant for repayment of the loan or interest after Bassim's release from prison in June 1994. As to that the judge commented at page 10 of the transcript at line 18:

"Having seen the defendant over three days, I do not regard him as someone who would be easily put off from demanding and seeking to recover, by any means possible, the outstanding loan, particularly if he had placed himself in debt to a close friend in Kuwait. On the contrary, he appears to be someone who would vigorously pursue recovery of the debt, particularly if he was embarrassed by having borrowed the money from a friend."

20. The judge attached considerable weight to the fact that in the loan agreement the amount of the loan had been altered in two places from £54,000 to £62,000. He noted that the applicant had agreed these alterations were made at the meeting at which the agreement was signed. The judge rejected the applicant's evidence that the figure of £54,000 was an error, saying:

"It seems to me to be more likely that, before the meeting took place in the afternoon, the precise sum to be lent had not been agreed. The defendant, prior to the meeting, thought it was to be £54,000, but when the claimant arrived with Muaed and Nabil, the sum finally required had become £62,000. The defendant agreed to lend this sum and changed the draft agreement accordingly. If this is what happened, it is quite inconsistent with the defendant's case that he handed £62,000 to the claimant that very morning. It seems to me that the alterations in the agreement are only sensibly consistent with there having been no payment on 1st October. The money was still to come. The defendant's case is therefore severely damaged by this facet of the evidence, and I find, on a balance of probabilities, that the claimant's case is the more likely. There never was a meeting during the morning of 1st October. There was only one meeting that day; it was in the afternoon, when the claimant attended to sign the agreement in the company of Muaed and Nabil."

21. On the basis, therefore, that there never was a payment of £62,000 or any other sum from the applicant to the claimant, the judge dismissed the counterclaim. It followed that there was nothing due under the legal charge and the judge accordingly directed payment out of court of the net proceeds of sale of the property to the claimant.
22. I turn to the applicant's proposed grounds of appeal. In grounds 1 and 2 the applicant refers to documentary material relating to his assertion that Bassima and Mr Al-Khalili had been persuaded to change their testimony by reason of pressure exerted upon them by Bassim. However the material in question was before the judge, albeit not in the trial bundle which had been prepared earlier; and in the course of the judgment the judge referred to the applicant's case in this respect. Thus at page 5 of the transcript the judge said:

"The defendant says that Bassim has again pressurised his sister, Bassima, into withdrawing her first statement."

23. Similarly, in relation to Mr Al-Khalili the judge said:

"The defendant has asserted that the original witness statement of Mr Al-Khalili is true evidence and that it is Bassim, the claimant's husband, who has pressurised Mr Al-Khalili to retract his original evidence and make a new statement. Bassim denies this."

24. The applicant's assertion that Bassim had exerted pressure on Bassima and on Mr Al-Khalili was a matter of which the judge took account. In his oral submissions this morning Mr Balal has emphasised the fact, as he alleges, that this pressure took place and invites me to conclude that the judge was clearly in error in not giving full weight to that pressure.
25. By his third ground of appeal the applicant refers to the fact that as a litigant in person, whose first language is not English, the proceedings were confusing for him and that he did not feel that the judge was able fully to understand his defence and counterclaim. The judge commented on the fact that the applicant had appeared in person at the trial at the conclusion of his judgment when he said:

"There is one other matter which I will deal with. The defendant has appeared in person. He has lost the benefit of his legal aid. On the first day of the trial he attended and complained that it was only late last week that he obtained the trial bundle prepared by the claimant's solicitors. Mr McCaffrey gave some evidence explaining why the trial bundle was prepared late. The defendant's real complaint was that, when the trial bundle was sent by special delivery, the envelope was addressed wrongly. Instead of being addressed to Flat 1, it was addressed to Flat 4. It therefore did not arrive in the hands of the defendant until a neighbour passed it on to him. However, the defendant has not been prejudiced by this. The trial bundle contained no surprises. It contained merely the documents which had already been disclosed to the defendant or his solicitors well in advance. The defendant, of course, knew, and has known for sometime, of the trial date."

26. Despite the submissions which Mr Balal had made to me this morning, I can for my part see no basis on which an appeal against the judge's order could have any real prospect of success. The judge was faced with a stark issue of fact raised in a thoroughly confusing evidential context. The judge dealt with the situation with care. In my judgment, his finding of fact that no part of the £62,000 was paid is unassailable in this court. Nor can I see any substance in any of the three grounds of appeal which Mr Balal has advanced.
27. In my judgment, the proposed appeal would have no real prospect of success and the application must be refused.
Order: Application refused