England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT, CHANCERY DIVISION
(HIS HONOUR JUDGE HODGE QC)

		Royal Courts of Justice Strand, London, WC2A 2LL
		3rd April 2008

Mr Justice Patten:

1. These are two applications for permission to appeal from the judgment of HHJ Hodge QC, sitting as a Deputy High Court Judge of the Chancery Division, given at the conclusion of the trial of two actions which are linked and which were directed to be heard together by an order of Underhill J dated 5 February 2007. The applications were adjourned to an oral hearing following their consideration on paper by Sir John Chadwick.
2. In the way in which the matters have turned out this morning I propose to deal first with Mr Chawla's application, but before I turn to the grounds of appeal it is convenient to summarise the issues in the litigation and the conclusions reached by the judge.
3. The first action, which I shall refer to as "the debt action", was commenced in the Queen's Bench division by a claim form issued on 10 December 2004. In that action the claimant, Kali Limited -- a Delaware corporation owned by what is described as the Saraff family Trust, sought payment from Mr Ashok Chawla and Mrs Anu Chawla of a loan of US $110,000 plus interest and, against Mr Chawla alone, payment of a commission alleged to be due under a commission sharing agreement entered into at the same time as the loan. The loan and the commission sharing arrangements were linked. The claimant's case was that Mr Saraff -- a wealthy Indian businessman and one of the beneficiaries under the Saraff Family Trust -- was offered an opportunity to share in commission, which he was told could be made on a contract if he was willing to lend $110,000 to Mr Chawla, who was said to be experiencing cashflow difficulties and needed the loan in order to participate in the commission opportunity. The loan was advanced to Mr and Mrs Chawla under the terms of a deed dated 4 December 1998, which they charged a residential property they owned, known as 27 Waterside Gardens, Reading, as security for the loan. The shared commission arose from a contract between FN Herstal Societe Anonyme, a Belgian company ("FNH") and an Indian company Hindustan Aeronautics ("HAL") and was to be taken by Mr Chawla and the Saraff family Trust through a separate Bahamian company, Burlay Trading Limited, which was set up for this purpose. Mr Chawla and the trust were each allotted 50% of the issued shares. On 26 April 1999 Mr Chawla, acting, it is said, as a de facto director of the company, caused Burlay to enter into a contract with FNH under which that company would pay Burlay a 15% commission in the event that it concluded a contract with HAL. The claimant's case was that a total of some €1.131 million became payable to Burlay under this contract but that Mr Chawla wrote to FNH directing the money to be paid into various accounts owned by him, and so misappropriated the commission. Burlay was added as the second defendant in the debt action by Underhill J's order of 5 February 2007 on the basis of an assertion by the claimants that on 20 September 2004 it had assigned its claim to the commission to Kali. The amount of commission allegedly due to the claimants after deduction of certain expenses, amounted to €444,678.50 plus interest. Before the judge, Kali contended that both the loan and Mr Chawla's liability for commission were secured by the charge. Mr Chawla's defence was that any sums due either by way of loan or commission had already been paid and discharged and that, in any event, his liability for commission was not secured by the charge. Mrs Chawla asserted that her signature on the charge had been forged and that she was not liable for the repayment of the loan. As a consequence, she also contended that the charge was ineffective to bind her beneficial interest in the property.
4. Earlier, on 19 July 2006, an order was made on the application of Mrs Shashi Advani, joining her as a defendant to the debt action. This was done to enable Mrs Advani -- who claims to have purchased the property from Mr and Mrs Chawla on 19 February 2004, and who is the registered owner of the property -- to assert her title in the proceedings and to seek an order vacating the registration of Kali's charge. As a consequence of her intervention, the claimants amended the proceedings to seek a declaration that the sale to Mrs Advani was a sham and a pretence and of no effect; or in the alternative that it constituted a fraud on Mr Chawla's creditors within the meaning of section 423 of the Insolvency Act 1986. Pursuant to one or other of these contentions, they sought an order requiring Mrs Advani to re-vest the legal and beneficial ownership of the property in Mr and Mrs Chawla.
5. On 10 August 2006 Mrs Advani commenced her own proceedings against Mrs Chawla and her adult daughter, Miss Anisha Chawla, seeking possession of the property which, she contended, that Mrs and Miss Chawla had entered without her permission in May 2006. Mrs Chawla and her daughter denied that the property was ever sold to Mrs Advani, and asserted that Mrs Chawla's signatures on the contract and the transfer had been forged. Mrs Chawla therefore contended that she retained a one half beneficial interest in the property and with it a right of occupation.
6. Mrs Advani had financed her purchase of the property with a loan from the Bank of Scotland in the sum of £102,000 secured on the property by way of mortgage. The loan from the Bank of Scotland was used in part to discharge an existing mortgage loan from Lloyds Bank, taken out by Mr and Mrs Chawla when they purchased the property in 1989. Mrs Chawla sought rectification of the register against the Bank of Scotland to remove the bank's charge over her beneficial interest. The bank put her to proof of the allegations of forgery and contended that it was, in any event, entitled to be subrogated to the Lloyds Bank charge to the extent that its loan was used to redeem that earlier mortgage.
7. After a trial lasting some eight days, the judge produced a reserved judgment setting out his detailed findings of fact. He then invited submissions on the legal consequences and gave a further ex tempore judgment which was given effect to in his order of 13 September 2007, which is the subject of these applications for permission to appeal. The judge rejected Mr Chawla's principal defence that he had repaid the loan and commission. He described Mr Chawla as hostile, angry and aggressive, hot-tempered, emotional and shifty. He found him to be dishonest in both his written and oral evidence and in a number of matters going to the heart of the case. This evidence, the judge said, was motivated by a clear and deliberate desire to mislead the court on matters directly relevant to the determination of the case, and he gave a number of examples, some of which I shall come to later.
8. In the light of this evidence he was unable to accept Mr Chawla's assertions that he had repaid the loan and accounted for the commission, and he preferred the evidence of Mr Saraff and other witnesses that the monies remained outstanding. He did, however, accept Mr Chawla's case that, as a matter of construction, the unpaid commission (as opposed to the loan) was not secured by the charge.
9. The judge also rejected much of Mrs Chawla's evidence, including her allegation that her signature on the charge in favour of Kali was also a forgery. He therefore ordered Mr and Mrs Chawla to pay to Kali US $202,943 in respect of the loan secured on the property, and ordered Mr Chawla to pay €533,489 in respect of the unpaid commission and interest. He also rejected Mrs Chawla's claim to a beneficial interest in the property and held that she had not retained any beneficial interest after her divorce from Mr Chawla in February 2001. But he did accept that she had not signed either the transfer or the contract of sale to Mrs Advani and that her signature on these documents had been forged -- in all probability, he found, by Mr Chawla.
10. The judge then turned more generally to the question of that sale. He held that the sole reason for the transfer of the property to Mrs Advani was that Mr Chawla was using her as a vehicle for holding his assets in the UK and that there never was a genuine intention between them to effect a sale and purchase of the property. He therefore declared that the purported sale, pursuant to the contract dated 19 February 2004, was a sham and was of no effect. So far as necessary, he also made a declaration that the transaction was a fraud on Mr Chawla's creditors under section 423 of the Insolvency Act. The judge ordered that nothing in these declarations should affect the Bank of Scotland's charge over the property, and that, in relation to the sums expended to discharge the Lloyds Bank mortgage, it was entitled to be subrogated to the rights of Lloyds Bank under that charge and therefore to enjoy priority over the Kali charge.
11. Mrs Advani's claim to possession of the property and Mrs Chawla's claim to have the register rectified by the removal of the Bank of Scotland's charge were dismissed. The judge ordered Mr and Mrs Chawla to pay two thirds of the claimants' costs of the debt action, and Mrs Advani was ordered to pay one third of those costs and to pay £30,000 on account of her costs liability. The judge refused the request by Mrs Advani and Mr Chawla for permission to appeal.
12. I now turn to Mr Chawla's application. He seeks permission to appeal on a number of different grounds. The first of these is that the judge was  wrong  to  exercise his discretion under section 27(2)(c) of the Courts and Legal Services Act 1990, so as to allow Miss Chawla to represent him in the proceedings. This is said to have involved a serious procedural irregularity which caused the trial to be unjust. It is said to have resulted in Mr Chawla being represented by an advocate who had conflicting interests of her own and who advanced what are described as "confused and conflicting versions of Mr Chawla's case" during the trial. She is also alleged to have been allowed by the judge to cross-examine her father.
13. Over and above this, Mr Chawla in his grounds of appeal attacks a number of the judge's findings made against him in the debt action as being against the weight of the evidence. These include the finding that there was a 50/50 commission sharing agreement; his finding that the loan and the commission had not been repaid, and his finding that there had been an assignment of the benefit of the commission agreement to Kali. By way of amendment to the grounds of appeal, Mr Chawla also seeks permission to appeal on the ground that the judge erred in failing to adjourn the hearing so as to allow Mr Chawla to have sight of the trial bundle before being cross-examined and that he failed to give Mr Chawla any appropriate direction about giving evidence which might incriminate him in criminal proceedings which he faces in India.
14. Sir John Chadwick, after considering this application on paper, indicated that he could see no real prospect of success on any of the grounds of appeal challenging the judge's findings of fact if the right view was that the judge's agreement to Miss Chawla representing her father had not led to a trial which was unfair. He therefore refused permission to appeal on what were then grounds 7-17, which deal with the commission sharing agreement, the loan, the non-payment of the loan and commission and the assignment, but adjourned to an oral hearing the grounds of appeal, numbers 1-6, which turn on the decision to allow Miss Chawla to represent her father, and the application to amend the grounds of appeal to raise the two additional grounds about the refusal to adjourn and the failure to protect the privilege against self-incrimination. He also directed that the appeal should follow if permission to appeal is granted.
15. Initially Mr Chawla sought to have the refusal of permission to appeal on grounds 7-17 reconsidered, but that is no longer pursued. He has, however, requested a reconsideration of his application that the hearing should be conducted in private, although that was not seriously pursued this morning; and we refused that application at the start of the hearing on the grounds that no material had been put before the court to justify the making of such an order.
16. I propose, therefore, to start with the principal grounds of appeal (numbers 1-6) which relate to the judge's decision to grant Miss Chawla a right of audience on behalf of her father.
17. At the time of the trial Mr Chawla was in India. He told the judge that he had been deported from the UK in 2000 for travelling on false documents and that he would not be permitted to return to the UK for the purpose of appearing at the trial. The judge expressed some scepticism about this, but he was faced with the practical difficulty that Mr Chawla was not there and was not represented by either solicitors or counsel. He had, much earlier in the proceedings, instructed a firm of solicitors, but they had come off the record in January 2007. In reliance on this, on his alleged ill health and his inability to travel to the UK, Mr Chawla had applied for and obtained an adjournment of the trial of the debt action, which was originally fixed for 5 February 2007.
18. In relation to the new trial, arrangements had been made for Mr Chawla to give evidence from India via a video link. On the first morning of the trial before giving his evidence, he asked the judge to give permission for his daughter to represent him. He said that his daughter was briefed and had his full authority to act for him. None of the other parties objected and the judge gave permission. Both the claimants and the Bank of Scotland were represented at the trial by solicitors and counsel. Mrs Advani also had the benefit of solicitors and counsel. Mrs Chawla and her daughter were present but they were acting in person. The judge was faced with the obvious difficulty of trying to ensure that the trial proceeded as arranged, whilst safeguarding the position of those parties who had no legal representation. Mr Chawla did not seek an adjournment so that he could instruct new solicitors and counsel, and said that he wanted to be represented by Miss Chawla, although she was unqualified and herself a party to the possession action but not, of course, to the debt action. It was also clear that they had already discussed the case and had made preparations for Miss Chawla to act on her father's behalf in the proceedings. Had the judge refused permission, it would have left Mr Chawla both physically absent and unrepresented at the trial. No one else could have cross-examined the claimant's witnesses on his behalf, least of all the judge. In the absence of opposition from any of the other parties, the judge took an essentially pragmatic view that some representation was better than none.
19. Mr Hunt QC on behalf of Mr Chawla submits that the conduct of the trial was unfair and unjust to Mr Chawla and that this court should order a new trial. His case is that to have allowed Miss Chawla to represent her father constituted a serious procedural or other irregularity in the proceedings within the meaning of CPR Part 52.11(3)(b), and alone justifies the relief sought. But so far as necessary, he also relies on the two points raised in the amended grounds of appeal which, looked at cumulatively, rendered the decision, he says, of the court unjust.
20. The first point taken by Mr Hunt is that Miss Chawla was unsuitable to act for her father because she ended up wearing two or possibly three hats. Apart from acting for her father, she was a party herself to the possession action and she gave help -- although not of a formal kind -- to her mother, who was also acting in person. The judge recognised this in his judgment, where he refers to Miss Chawla, having addressed him for about fifty minutes, initially on behalf of Mr Chawla and then on behalf of her mother and herself. Over and above this, she was also a witness.
21. The power to grant rights of audience has to be exercised under the statute in order to further the statutory objective of maintaining the proper and efficient administration of justice. The authorities which deal with section 27 of the Courts and Legal Services Act draw a distinction between cases where permission is sought in respect of what is referred to as an "amateur practice advocate" and those referred to as family advocates. In the case of the former, the courts have emphasised the general principle that rights of audience should be limited to those who are properly qualified to undertake such services and that permission to act should only be granted in exceptional circumstances (see, for example, D v S (Rights of Audience) [1997] 1 FLR 724). But in the case of so-called family advocates, the exceptional circumstances principle does not apply. And in Clarkson v Gilbert [2000] 3 FCR 10, Clarke LJ said that the question was, whether in all the circumstances of the case, the court should exercise its discretion under section 27(2)(c) or, to put it another way, was it just to permit the applicant to speak for the party seeking to rely on his services?
22. It goes almost without saying that the duty of the judge, faced with this situation, does not end with the grant or refusal of permission. If permission is granted, the judge must obviously keep the position under review during the trial and ensure that the representative's conduct does not interfere with the process of a fair trial. If necessary, this may require the judge to revoke the permission granted earlier.
23. Mr Hunt criticises both the initial decision of the judge to grant permission and his decision to allow Miss Chawla to continue to act throughout the trial. As already indicated, the judge based his decision to grant permission to act on essentially four factors: 1) that Mr Chawla was not legally represented; 2) that he was in India; 3) that he wished his daughter to act as his representative, and 4) that there were no objections to this. Mr Hunt submits that none of these justified the decision to grant permission. 1) and 2) were simply the necessary factual preconditions for the making of the application; 3) added nothing to this, and 4) was irrelevant.
24. What he says the judge did not ask himself was whether it was appropriate for Mr Chawla to be represented by his daughter and whether this was consistent with the statutory objective. Had he done so, he would, or at least should, have concluded that a number of factors made it inappropriate for her to act. Mr Chawla's case was that his wife had signed both the Kali charge and the transfer to Mrs Advani. Mrs Chawla's case was that her signatures on both documents were forgeries. The issue of whether she had signed the transfer to Mrs Advani was highly material to Mrs Chawla's claim to be entitled to occupy the property at Waterside Gardens and therefore to Miss Chawla's own defence to the possession action, which depended upon her mother's title. This created, he submitted, a clear and irreconcilable conflict between Miss Chawla's personal position and her role as Mr Chawla's advocate. It therefore ipso facto rendered her wholly unsuitable to act. Over and above this, she was obviously torn between her loyalty to her mother and that to her father, as the judge recognised in his judgment.
25. Mr Hunt has, of course, to accept that a refusal of permission would, in the event, have left Mr Chawla unrepresented and that the trial would not have been adjourned on this ground; but that, he says, is immaterial because his reliance on his daughter as his representative did Mr Chawla more harm than it did good.
26. This submission leads into the other aspect of the judge's conduct of the trial which is also criticised, i.e. what is characterised as his failure to revoke permission as a result of the manner in which Miss Chawla conducted her father's defence. A number of incidents are relied upon which are referred to in the judgment. During her cross-examination of Mr Saraff, Miss Chawla first stated that her father accepted that the value of FNH's contract with HAL was about €7.542 million and that, by April 2001, Mr Chawla had received a commission equal to about 10% of this sum, but had not mentioned it in his witness statement because the receipt of commission was illegal under Indian law.
27. The next day she withdrew this submission as a mistake and said that her father had never received any commissions from FNH. The judge described the reasons for the retraction of this submission as unconvincing. In relation to her own evidence, the judge described Miss Chawla as highly voluble and excitable, and said that the more her evidence continued the less convincing it became. He could not accept her as a reliable or honest witness.
28. A particular difficulty was that Miss Chawla's role as her father's representative and that as a witness became at times confused. The admission that her father had received the commission was made in a letter from Miss Chawla dated 12 July 2007, written as her father's representative. When she came to give evidence herself, the judge allowed Miss Chawla to be cross-examined by Mr Gillis as to the circumstances in which this letter was written and, as mentioned, did not accept the reasons given for the retraction of the admission. That, Mr Hunt says, was then used as material critical of Mr Chawla. He therefore submits that Miss Chawla was clearly unsuitable to be allowed to act as her father's representative and that, even if the judge on an optimistic but wrong basis had granted permission, he ought very quickly to have realised the difficulties inherent in her position and to have retracted his permission. The decision to grant permission, which remained throughout the trial, therefore created a serious procedural or other irregularity which justifies a new trial. Mr Hunt submits that it is not necessary for him to show that the judge would have reached a different conclusion had no permission been granted, but he does rely on the incidents I have referred to as indicating that her efforts did, on balance, cause his client some harm.
29. The response of Mr Gillis for the claimant and Miss John for the bank (who we have not called on but which are set out in full in their skeleton argument) can be summarised as follows: First: if Miss Chawla had not been allowed to act for her father, his case in the debt action would not have been put to Kali's witnesses, such as Mr Saraff, except to the extent that counsel for the bank herself sought to challenge what remained outstanding of the loan secured by the charge. Secondly, the trial would not have been adjourned. Thirdly, Miss Chawla had prepared herself to act for her father and was, as the judge found, an intelligent woman who was able to put forward her father's case. The incidents, such as the admission of the receipt of commission and its retraction, were exceptions to this. Fourth, Miss Chawla did not cross-examine her father; she did ask him leading questions in re-examination, but these were designed to elicit answers in support of his case and were not hostile. Fifth, neither she nor her mother alleged that Mr Chawla himself was responsible for forging Mrs Chawla's signatures on the charge on the transfer, and neither of them asked Mr Chawla any questions regarding the authenticity of the signatures. Six: in relation to most of the issues in the debt action, Mr and Mrs Chawla were making common cause by contending that Kali was not entitled to commission and that the loan and commission had been repaid. It was these issues which of course were determinative of Mr Chawla's liability in the debt action. Seven: any damage to Mr Chawla's credibility was not caused by Miss Chawla's actions as his representative, but by his own behaviour as a witness and the quality of his own evidence. Eight: any possible impact on his defence of the debt action caused by Mrs Chawla's claim that her signatures had been forged was negated by the judge's finding, in Mr Chawla's favour, that she had no beneficial interest in the property.
30. In my judgment, the decision of the judge to allow Miss Chawla to act for her father was justifiable as a practical measure necessary to give him some means of putting his case to the claimant's witnesses and to the court, provided that the judge took steps to ensure that any potential or actual conflicts between her own position in the possession action, and her father's position about the signature on the transfer, were not allowed to prejudice her conduct of his case. If he had refused the application it would have lead to an injustice. The claimant's evidence would simply have gone unchallenged. The validity of the transfer to Mrs Advani was not relevant to any of the issues in the debt action and was at most relevant to Mr Chawla's credibility. The only question, therefore, was whether Miss Chawla's differing position on the execution of the transfer made it inappropriate for her to be allowed to act for her father in the debt action.
31. I think that the judge was entitled, in the interests of justice, to allow her to put Mr Chawla's case on the loan commission to Mr Saraff and the claimant's other witnesses, and to have addressed him on those issues in the debt action. Clearly she could not be allowed to cross-examine her father about his allegation that her mother had signed the transfer or the charge, but this did not occur; and there is nothing to indicate that her own position in relation to the transfer in any way influenced her cross-examination of Mr Saraff and the other witnesses about the commission or the loan. On those matters she had no personal interest and those of her parents coincided. Therefore, although the situation was in no sense ideal, as the judge himself recognised, neither was the possibility that Mr Chawla himself should have no representation at all, including representation by his daughter, whom he had clearly asked to act for him, notwithstanding her position in the possession action. I think that these were matters which the judge was clearly entitled to consider and take into account in deciding whether it was just to allow Mr Chawla to have the representative of his choice. That said, the situation clearly called for tight trial management. I think that the judge may be open to some criticism, for example, in allowing Miss Chawla to be cross-examined about the background to the admission about her father receiving commission and its subsequent retraction. But none of that is sufficient to justify the ordering of the new trial unless this court is satisfied that the irregularity was serious and led to a decision which was unjust in the sense that the decision to allow Miss Chawla to act for her father had a significant impact on the outcome of the case. None of the matters referred to and relied on by Mr Hunt is sufficient, in my judgment, to do this. There is no specific criticism of the way in which Miss Chawla handled the issues of liability in the debt action, and it is clear that the judge's rejection of Mr Chawla's evidence about the payment of the commission and the loan was based almost exclusively on the inconsistencies and contradictions in that evidence, rather than the retraction of the admission or another aspect of Miss Chawla's cross-examination of Mr Saraff in which, contrary to her father's evidence, she put it to him that Mr Chawla was known as Monty. The judge refers in his judgment to Mr Chawla giving varying and inconsistent accounts of the commission agreement and the receipt of commission, as to which there was ample material, apart from the admission to justify the findings of fact which he made.
32. Miss Chawla did, of course, give some evidence about her mother's signature on the charge, which was relied on by the judge, but this resulted in a finding by the judge in Mr Chawla's favour that Mrs Chawla had executed the charge.
33. I am not, therefore, satisfied that the decision to allow Miss Chawla to act for her father in the debt action resulted in an unfair trial or caused Mr Chawla an injustice, and I would refuse permission to appeal on grounds 1-6. That leaves the two additional grounds of appeal introduced by way of amendment, which I can deal with more shortly. The first relates to the judge's refusal to adjourn the trial so that Mr Chawla could be provided with the trial bundles prior to being cross-examined. It was, of course, for the claimants to prepare and provide the trial bundles, which was what Master Moncaster ordered on 11 June 2007. This did not happen, because, the claimants say, they were not aware until almost the start of the trial that Mr Chawla would be giving evidence by video from India. But the issue for the judge was whether to postpone this cross-examination so as to allow the bundles to be provided. Mr Chawla gave his evidence and was cross-examined on the first day of the trial; no application was made by or on his behalf for an adjournment to allow him to be provided with the bundles, and before he was cross-examined the judge asked him whether he remembered the contents of his witness statements. He confirmed that he did, and was able to answer any questions about them. Only on one occasion does he appear to have complained, during cross-examination, about documents which he did not have in front of him.
34. Mr Hunt has identified in his skeleton thirty-seven documents, which he says were put to Mr Chawla in cross-examination. Some of these are witness statements; others are correspondence and other documents relating to his departure from the UK. In his skeleton argument Mr Gillis describes the absence of the bundles as simply an administrative inconvenience. I disagree. It seems to me elementary that a witness in a case such as this should have available to him in the witness box copies of the witness statements and other documents which the claimants have been ordered to supply him with and which were to be put to him. The judge was, in my view, in error in not delaying or postponing the cross-examination so as to allow them to be provided. Merely to ask the witness whether he could recall the contents of his witness statement was not enough.
35. That said, we still have to be persuaded that the failure to provide the documents caused Mr Chawla injustice and made the result of the trial unfair. The principal issues in the debt action were whether there had been a commission sharing agreement as alleged, whether the commission had become payable and paid, and whether the loan had been repaid. On the commission issues, the judge preferred the evidence of the claimant's witnesses to that of Mr Chawla, which he found to be inconsistent with documents, such as a fax of 29 October 1998. This and other documents were read out to Mr Chawla during his cross-examination. Otherwise, as I understand it, Mr Gillis read out and put to him passages in his witness statements which were said to be inconsistent with the evidence of the claimant's witnesses and some of his own statements. The judge found that the commission had been paid into accounts belonging to Mr Chawla and that a purported repayment of the Kali loan was also directed to such an account. Of the 37 documents identified by Mr Hunt, only twenty-three appear to have been put to Mr Chawla in connection with his defence of the debt action. The others related to the sale to Mrs Advani, which does not feature in this application for permission to appeal. I have found this, in some ways, to be the most troubling aspect of the judge's conduct of the trial. But in the end I am not persuaded that the disadvantage which Mr Chawla suffered as a result of having the documents read out to him, rather than being able to read them in hard copy himself, caused him to give answers to questions in cross-examination which were either inaccurate or incomplete; and, but for one isolated occasion, Mr Chawla himself made no complaint at the time that he was having difficulty in following what was put to him, or needed to look at other documents in the bundle or at material in his witness statement in order to answer any of the questions. The judge had, in short, to decide the case on the basis of conflicting accounts about the commission agreement and the alleged repayment of the loan, and his preference for the claimant's witnesses does not appear to me to have been due to Mr Chawla's lack of access to the trial bundles.
36. The final issue relates to the judge's failure to give any warning to Mr Chawla about questions which might lead him to give incriminating evidence in connection with charges which he is said to be facing in India. Mr Chawla accepts that he was not entitled to assert any privilege against self-incrimination under section 14(1) of the Civil Evidence Act 1968, which is limited to criminal offences under UK law. But he relies on the statement of Morritt J in Arab Monetary Fund v Hashim [1989] 1 WLR 565, to the effect that section 14 was declaratory of the common law, and that the English court could recognise a form of discretionary privilege in relation to criminal proceedings abroad. In Brannigan v Davison [1997] AC 238, Lord Nicholls left open the question whether a trial judge would have a measure of discretion to excuse a witness from giving self-incriminating evidence in relation to foreign criminal proceedings. In this case the judge did not direct Mr Chawla that he was under no obligation to answer questions about any commission payable by FNH, but on some occasions Mr Chawla in fact declined to answer questions about the commission agreement because of what he described as "privileged information". Mr Hunt submits that the judge should have ruled that Mr Chawla was not required to answer questions which might incriminate him, and that it was not open to the court to draw adverse inferences from his failure to answer such questions.
37. One of the difficulties about this ground of appeal is that at no time before the judge, or before us, has any material been provided to substantiate precisely what, if any, criminal charges Mr Chawla in fact faces in India, and whether they are connected with the commission sharing agreement. There is, therefore, in my judgment, no proper foundation for this ground of appeal; but even it Mr Chawla or the judge had identified relevant criminal proceedings in India and Mr Chawla had been allowed by the judge to invoke privilege, it does not follow that the judge would not have been able to draw adverse inferences from a refusal to answer questions on those grounds. In appropriate circumstances the refusal to answer a question whether an unlawful commission had been paid on grounds that the answer might incriminate the witness is likely to lead a civil court to draw the obvious conclusion.
38. I do not, therefore, accept that the judge was guilty of any serious procedural irregularity in failing to give Mr Chawla a direction about not incriminating himself, and that his failure to do so made the trial unfair. It is not, I think, necessary for us to decide on this application whether and to what extent the discretionary privilege in relation to foreign criminal proceedings exists as a matter of English law. The point does not in the event arise. I would therefore grant permission to amend the grounds of appeal, but refuse permission to appeal on both of the additional grounds relied upon.

Lord Justice Mummery:

39. I agree.

Mr Justice Patten:

40. Mr Chawla's application for permission to appeal is refused.

Order: Application refused