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 A STAY OF EXECUTION
AND TO RELY ON FURTHER EVIDENCE

		Royal Courts of Justice Strand London WC2 Thursday, 7th May 2002

1. LORD JUSTICE CHADWICK: This is an application for permission to appeal against an order made on 7th March 2002 by Mr Justice Gray at a hearing of a preliminary issue in proceedings by the applicants, Mr Howard Daly and his wife Mrs Linda Daly, against Mr Sheikh. The claim in the proceedings is for damages and repayment of money under a building contract. The defence - or the primary defence - is that the relevant contract was made with a company, Middlesex Design and Build Ltd, of which Mr Sheikh is a director; so that the claim should be against that company and not against Mr Sheikh personally.
2. On 13th November 2001 Master Leslie ordered the trial of a preliminary issue in these terms:

"whether or not the contract subject matter of the claim is entered into between the claimants or either of them and the defendant or between the claimants or either of them and Middlesex Design and Build Ltd and or whether at any stage the defendant became a party by novation or otherwise to such contract."

3. As the judge pointed out, the first part of that issue was uncontentious. It was common ground that the initial contract was made between the applicants and the company. The question that he had to decide was a question of fact. Was there a subsequent agreement to substitute Mr Sheikh for his company as the contracting party? If that were so, then the contract would have been novated. That question required a consideration of events at the end of May 2000. The judge's examination of those events was, necessarily, influenced by the fact that the contract which was before him was dated 30th May 2000; whereas Mr Daly was asserting that he had signed a contract with the company on 25th May 2000.
4. The judge was not impressed by Mr Sheikh. In paragraph 31 of his judgment he described Mr Sheikh's conduct in accepting money in cash into his own bank account - or at least not into the bank account of the company - as explicable by the fact that Mr Sheikh was -

"as I find, someone who was intent in evading tax and VAT. That conduct is disreputable and dishonest."

5. But the judge took the view that, although disreputable and dishonest, that conduct did not lead to the conclusion that Mr Sheikh was the contracting party. The judge thought that he simply wished to reduce to a minimum the documenetation evidencing payment of money to the company. At the end of his judgment the conclusion which the judge reached was that there had been no novation. The judge said:

"The conclusion is buttressed by the evidence of Mr Daly that the written contract with MDB was signed by both himself and Mr Sheikh on the same occasion. I cannot see any reason why both parties should sign a contract on the same occasion and then waited five days before dating it. That is the reason for my finding that the contract was signed on 30th May. That finding is fatal to the claimant's case."

6. The application for permission to appeal is made in tandem with an application to rely on the report of an expert document examiner, Miss Fiona Marsh, which was obtained shortly after the trial in circumstances to which I shall refer. Miss Marsh's report, dated 15th March 2002, concludes, in unequivocal terms, that there is absolutely no evidence to suggest that Mr Daly either signed or dated the document which has been produced as a contract dated 30th May. The document is not authentic. If that evidence is accepted it leads to the conclusion that someone else signed that document in Mr Daly's name and dated it. The inference which the court would be invited to draw would be that that person was Mr Sheikh. If the document dated 30th May is not authentic then there must be, at least, a serious question whether the judge's conclusion, insofar as it was based upon that document, can be regarded as safe.
7. The difficulty for the applicants, of course, is that the challenge to the authenticity of the document was not made before or at the trial. The position is explained in a witness statement made by Mr Daly on 14th April 2002. He states that he had not seen the original of the contract at any time before the trial; or, indeed, until after the hearing had been completed. During the weekend between the conclusion of evidence and speeches and the judgment, Mr Daly examined the document and appeciated that the signature was not his. He informed his solicitors who informed counsel. But the decision was taken by his advisors that, in the absence of any forensic evidence, there was nothing that could be done on that point at that stage.
8. Mr Daly's late appreciation of the position is perhaps understandable in the circumstances that it was never his case that he had not signed a contract. The question was; when had he signed a contract? In the context of that issue it is understandable that, when being examined about the document in the course of the trial, he would be concentrating on the date rather than on the authenticity of the signature. Be that as it may, this is a case in which the suggestion that the signature is not authentic could have been, but was not, raised either at the trial or before judgment.
9. In those circumstances this court is faced with the difficult question whether that evidence should be admitted. It is necessary to consider whether, if that evidence had been before the judge, it might have made a real difference to his determination. In my view that is a question which should be considered by a full court with the benefit of submissions on behalf of the defendant, Mr Sheikh, and with more time to consider the matter fully than is available on an application of this nature.
10. The order I make is that the application for permission to appeal be adjourned to a hearing before a full court of two Lord Justices, with a time estimate of 2½ hours, on notice to the defendant Mr Sheikh and with a direction that the appeal is to follow immediately if permission is granted. This, as it seems to me, is a case in which, if the court is persuaded that the new evidence should be admitted, the likely result is that there will have to be an order for a new trial.
Order: Application adjourned