England and Wales Court of Appeal (Civil Division) Decisions

IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT, CHANCERY DIVISION
(Companies Court)
Vos, Norris and Mann JJ
10850OF2011

		Royal Courts of Justice Strand, London, WC2A 2LL
		31st July 2014

Lady Justice Arden :

Nature of these appeals and proceedings

1. This judgment states my conclusions on consolidated appeals by HRH Prince Abdulaziz Bin Mishal bin Abdulaziz Al Saud (referred to below as Prince Abdulaziz) against a series of related interim orders made in the course of these proceedings by Vos, Norris and Mann JJ in the period July to November 2013. In a nutshell, these orders - requiring the Prince's personal signature to two witness statements concerning disclosure, rejecting an application to vary that order, imposing an unless order for non-compliance, entering judgment and refusing relief against sanctions - have resulted in a judgment against the Prince for some $7m (I will use the round figure of $7m below). The Prince complains that these orders were wrongly made.
2. A brief description of the proceedings will suffice to give the context. Apex Global Management Limited ("Apex") and Global Torch Limited ("Global Torch") (Seychelles and British Virgin Islands companies respectively) set up an English company, Fi Call Limited ("Fi Call"), to develop and market internet telecommunications technology. Mr Almhairat, the second respondent, a Jordanian, is Apex's sole shareholder. Global Torch is owned by Prince Abdulaziz, Mr Abu-Ayshih and a Mr Sabha, who is not a party to these proceedings. The joint venturers have fallen out and have launched cross-petitions under the court's statutory jurisdiction to give relief against the unfairly prejudicial conduct of a company's affairs in sections 994 to 996 of the Companies Act 2006 ("CA 2006"). Both seek share purchase orders as well as pecuniary and declaratory relief. The respondents to Global Torch's petition are Apex and Mr Almhairat ("the Apex parties"). The respondents to Apex's petition are Global Torch, Prince Abdulaziz, Mr Abu-Ayshih and HRH Prince Mishal bin Abdulaziz Al Saud ("Prince Mishal") ("the Global Torch parties"). Fi Call is joined as a nominal respondent in both cases.
3. Both joint venturers make allegations of serious misconduct of the affairs of Fi Call. For the purposes of this judgment, only the general flavour is needed. The Apex parties contend that the Global Torch Parties have caused Fi Call to be involved in money laundering and of having run a campaign of threats and other unlawful conduct against them. The Global Torch parties have alleged that Mr Almhairat misappropriated monies belonging to Fi Call. The Global Torch parties challenge the authenticity of various emails and conversation tapes, which it says have been forged.
4. The Apex parties say that Global Torch is a corporate vehicle of Prince Abdulaziz. Prince Abdulaziz has also acted as Chairman of Fi Call but he is said not to be a lawfully appointed director of Fi Call. The Apex parties say that Prince Abdulaziz has acted as a de facto and/or shadow director of Fi Call. Mr Abu-Ayshih is an adviser to Prince Abdulaziz and is a director of and a shareholder in Global Torch, and a lawfully appointed director of Fi Call. Prince Mishal is the father of Prince Abdulaziz, and both Princes are members of the House of Saud.

Order of Vos J made on 31 July 2013

5. The cause of the Prince's difficulties is the order of Vos J on 31 July 2013. It led to a domino effect on his defence. The two relevant paragraphs of the order (I shall refer to these paragraphs as "the personal signature order") provided that the parties, excluding Fi Call but including Prince Abdulaziz, should personally sign certain statements required to be made in connection with disclosure in these proceedings. Under paragraph 14 of the order, the statement had to provide details about Fi Call's servers, relevant email accounts and mobile devices provided by Fi Call to the best of their knowledge, information and belief. Paragraph 15 required the statement to provide details of email accounts and mobile devices not provided by Fi Call which relevant to the proceedings. Vos J indicated that he would make this order on the first day of a case management conference held on 30 to 31 July 2013.
6. A major plank of Prince Abdulaziz's case on these appeals is that, as a member of the Saudi Royal Family, he is bound by a "protocol" or social convention binding on all such members, under which he is prevented from taking part in litigation personally or from signing court documents.
7. On the day following Vos J's ruling, the Prince's representatives asked Vos J to reconsider his order (which had not then been drawn) but Vos J declined to do so. Vos J asked whether the Prince would be a witness. He was told that he might be. He held that Prince Abdulaziz must be treated like every other party. Vos J did not give a judgment on this point but he stated in the course of argument:

"I am afraid that they are a party to these proceedings and I am afraid their protocols are valid in Saudi Arabia but not here. I cannot have this as a precedent for the future of this litigation. Prince Abdulaziz is a party to this litigation. He must be treated like every other party. The rules of the court must apply to him as to any other party. If he chooses not to make them applicable, then whatever consequences are appropriate will follow. I am sure that the matter will be carefully considered and I am sure that common sense will be exercised by the other parties to these proceedings. But the order must be in the form that would usually be made."

Summary of my conclusion on the appeals

8. In my judgment, for the reasons giving below, Vos J made no reviewable error in making the personal signature order as vigorously submitted to us on Prince Abdulaziz's behalf. The principal challenge made on these appeals, therefore, in my judgment fails, though I will need to deal with a number of other arguments as I set out my reasons below. Before that, I will continue with the narrative of the essential facts before taking each order which is challenged in turn.

Events and orders following the order of Vos J

9. The dates for compliance with paragraphs 14 and 15 of the order of Vos J were 6 and 12 August 2013 respectively. A witness statement was then served on Prince Abdulaziz's behalf but was signed not by him but by Mr Abu-Ayshih, Prince Abdulaziz's trusted adviser. In addition it did not deal with mobile devices.
10. Apex then applied for an "unless" order against Prince Abdulaziz on the grounds of his non-compliance with Vos J's order in the form of an order striking out his defence unless he complied with it within a set period. On 9 September 2013 Norris J made an order ("the unless order") giving Prince Abdulaziz until 4 p.m. on 18 September 2013 to comply and directing that, in default, his defence be struck out and that he be debarred from defending the Apex petition. Norris J refused permission to appeal. This is the second order which Prince Abdulaziz appeals and he was disbarred from defending Apex's section 994 petition.
11. Prince Abdulaziz did not submit a witness statement signed by him personally and as a consequence on 18 September 2013 his defence was struck out.
12. On 4 October 2013 Apex applied for the court to enter judgment under CPR 3.5 against Prince Abdulaziz in the sum of $5.984 million plus interest. Apex's amended statement of case in the proceedings contained two prayers: (1) a counterclaim made in response to the Global Torch section 994 petition, and (2) relief sought on Apex's own section 994 petition. The judgment in default was part of the relief sought in (1). In order to make its application, Apex abandoned certain heads of relief without prejudice to the relief which it sought under (1).
13. CPR 3.5 provides:

"(1) This rule applies where-

(a) the court makes an order which includes a term that the statement of case of a party shall be struck out if the party does not comply with the order; and

(b) the party against whom the order was made does not comply with it.

(2) A party may obtain judgment with costs by filing a request for judgment if-

(a) the order referred to in paragraph (1)(a) relates to the whole of a statement of case; and

(b) where the party wishing to obtain judgment is the claimant, the claim is for-

(i) a specified amount of money; ..."

14. By order dated 14 October 2013 ("the judgment"), Norris J entered judgment for Apex against Prince Abdulaziz for $7,734,934.79 plus costs pursuant to CPR 3.5(2). This is the third order which Prince Abdulaziz appeals.
15. Prince Abdulaziz then applied to Mann J to vary the personal signature order. (He also applied for relief from sanctions but there was no time to deal with that application at the same time and Mann J adjourned it and dealt with it on 29 November 2013). He sought the permission of Mann J to file the statements required by paragraphs 14 and 15 of the personal signature order by providing the requisite information in a witness statement signed by his solicitor, Mr Jeremy Marshall, partner in the firm of Irwin Mitchell on his instructions.
16. On 28 October 2013, Mr Marshall filed a witness statement setting out verbatim the Prince's instructions on the various matters required to be in the statements.
17. By order dated 30 October 2013 ("the no-variation order"), Mann J determined that there had been no misstatement of fact or material change of circumstances to justify varying the order of Vos J pursuant to CPR 3.1(7), and that Prince Abdulaziz would have to appeal. This is the fourth order which Prince Abdulaziz appeals.
18. By a further order dated 29 November 2013 ("the no-stay order") Mann J dismissed Prince Abdulaziz's applications to stay the judgment pending trial of the Apex and Global Torch petitions and for relief from sanctions. Mann J held that the judgment had been entered in compliance with CPR 3.5 and therefore could not be set aside as irregular. He regarded a stay as unrealistic: he refused it principally on the ground that it was "merely a disguised and postponed application to set the judgment aside". In relation to relief from sanctions, the judge rejected the submission that the filing of Mr Marshall's witness statement was substantial compliance. In his judgment, this would still leave a substantial disparity between the position of Prince Abdulaziz and the other parties. In his thorough judgment, Mann J gave other reasons, including the piecemeal manner in which evidence of the protocol had been produced. This is the fifth and final order which Prince Abdulaziz appeals.

DISCUSSION

19. On these appeals, Mr Justin Fenwick QC, with Daniel Saoul, appears for Prince Abdulaziz. Mr Daniel Lightman appears for the Apex parties.
20. I shall now take each of the orders which Prince Abdulaziz seeks to set aside on these appeals and explain my reasons for concluding that the appeals should be dismissed.

PERSONAL SIGNATURE ORDER (Vos J - 31 July 2013)

21. Mr Lightman correctly identified the starting point. In reviewing the personal signature order, this court should not lightly interfere with it for the reason that it was a case management decision. In the absence of a misdirection in law, the appellate court accords a generous margin of discretion to a judge making a case management decision: see, for example, Broughton v Kop Football (Cayman) Ltd [2012] EWCA Civ 1743 at [51] to [52] per Lewison LJ. The question is whether Vos J either misdirected himself or reached a decision that was perverse.
22.   Mr Fenwick does not of course challenge the first two reasons given by Vos J in the passage cited in paragraph 7 above (that the protocol was not binding in England and that Prince Abdulaziz was a party to the proceedings). His principal submissions focus on Vos J's three further reasons. I shall call these (i) equivalence: that the same rules must apply to Prince Abdulaziz as to the other parties; (ii) common sense: that the other parties will use their common sense and (iii) common practice: that an order in the terms of the personal signature order would usually be made. He adds a further mistake: Vos J was mistaken in thinking Prince Abdulaziz might be a witness at the trial because the Prince had made a decision subsequently that he was not after all going to give evidence at the trial.
23. As to equivalence, Mr Fenwick submits that the personal signature order was unfair to Prince Abdulaziz because he could never comply with it because of the protocol, and that the protocol was a relevant factor to be taken into account in deciding who should make the witness statement, to which Vos J gave insufficient weight. In this regard he submits that Prince Abdulaziz's defence to the $7m claim has merit. He draws attention to the fact that there is documentary evidence that the sums which Apex contends the Prince misappropriated were indeed paid into Fi Call's bank accounts.
24. Mr Fenwick also relies on Article 6 of the European Convention on Human Rights (right to a fair trial) and sections 19 and 29 of the Equality Act 2010, which forbid indirect discrimination on grounds of ethnicity. Mr Fenwick relies on this by virtue of Prince Abdulaziz being a member of the Saudi Royal Family.
25. As to common sense, Mr Fenwick submits that Vos J was wrong to trust to the other parties' common sense as events have shown. They have not agreed to what he submits would be a sensible alternative to signature of the witness statement by Prince Abdulaziz.
26. As to common practice, Mr Fenwick submits that the statement required by the personal signature order was in reality an electronic document questionnaire. The form of electronic document questionnaire scheduled to CPR 31B PD suggests that an agent can sign. In any event, he submits, Vos J was wrong to say that the personal signature order entailed a disclosure statement in the usual form: it was not a usual form of disclosure statement since in practice they are commonly signed by solicitors on behalf of their clients. Moreover, Vos J understood from an earlier application that the protocol did not prohibit such instructions and should therefore have permitted this form to be used.
27. Mr Fenwick also relies on the fact that for some purposes (but not including disclosure statements) the CPR requires a party to make a statement of truth (CPR 22.1) but it provides that a legal representative may sign it, referring to the party's belief (CPR22 PD3.7). If the legal representative signs it, he is taken to have explained to the client that in signing the statement of truth he would be confirming the client's belief that the facts stated in the document were true and that there might be consequences for the client if the statement turned out not to be true. Mr Fenwick submits that it was open to Vos J to take the course of requiring a witness statement on the same basis. However it does not appear from the transcript that anyone suggested that to him, and Vos J was concerned that the parties should personally state that they had given full and complete disclosure of email accounts and mobiles.
28. Moreover, submits Mr Fenwick, it is clear from the course of exchanges with counsel, that Vos J had in mind that Prince Abdulaziz might be a witness, which is not now the case. He was thus mistaken about that.
29. In my judgment, none of the points which Mr Fenwick makes undermines the personal signature order. It is evident from reading the transcript of the proceedings on 30 July 2013 and the Vos J's judgment on 31 July 2013 that Vos J was very familiar with the allegations in these proceedings and that he had a clear view of the course that the trial would be likely to take. He saw that a key issue at trial would be whether certain emails had been sent or conversations had taken place. He considered it of the utmost importance having regard to the gravity of the allegations that there should be proper pleadings and full disclosure. As he put it:

"The Apex parties have made what have been variously described by the Global Torch parties as "startling" or "outrageous" allegations. Those allegations include matters relating to the Nairobi transaction, matters relating to the Beirut transaction, matters relating to the allegedly forged share sale agreements to Al Shehri, and matters relating to the effective demand to purchase Apex's shares for no money payable to Apex. Those serious allegations made by Apex and Mr. Almhairat are all based upon a series of recordings of conversations with Prince Abdulaziz, Mr. Abu-Ayshih and Prince Mishal and upon emails which are relied upon by Apex and Mr. Almhairat. The defence of the Global Torch parties is that those emails were forged, that the conversations never took place, and that the transcripts of the conversations are simply false. There is therefore a great deal of technical evidence which the Apex parties will need to adduce in order to persuade the court that those matters are genuine. If those matters were genuine and were held to be genuine, then even Mr. Wardell accepted that the Apex parties would be some way forward in the pursuit of their case…

I shall not set out, for want of time, the detail of the allegations made against Mr. Almhairat but they are of a very serious nature; they allege that he is a dishonest man with a history of failing to comply with his commercial and business obligations. In addition, there are unparticularised allegations contending that Mr. Almhairat misappropriated "considerable sums", "falsified documents", "issued several company cheques for personal expenses", "attempted to misappropriate all the IP rights and the telecommunications licence", "arrogated control to himself over the venture's books and records and equipment" and "changed the locks at the venture's offices" and, finally, "wrongly attempted to dismiss a fellow director…

The reason why those kinds of allegations are pleaded, according to Mr. Wardell, is that they respond to the petition, which alleges that this Fi Call was a quasi-partnership in which trust and confidence was important, and the allegations culminate in the pleading that:

"Had the above facts or any of them been disclosed to Global Torch, it would not have entered into the business relationship with [Fi Call] or Apex or Mr. Almhairat."

It should be absolutely clear, from this judgment, that if Global Torch is going to persist in allegations of dishonesty or misconduct by Mr. Almhairat as being relevant to the trust and confidence which they had in him, then they must particularise the allegations upon which they rely. Disclosure will indeed have to be given in relation to those matters, on both sides." (judgment, [5], [24], [25] and [29])

30. So Vos J attached considerable significance to locating and preserving the evidence of the parties' electronic communications. The information disclosed would then be passed to experts. One of the concerns was that the servers on which some of these communications had taken place were no longer functioning and so the work of the experts had to start as soon as possible. Any delay in their starting work might lead to a loss of evidence or to delay in the trial process.
31. When it comes to such matters as delays in the trial process, the judge managing a case is entitled and bound to take into account the interests of the litigants: see generally Marcan Shipping London v Kefalas [2007] 1 WLR 1864 at [16], per Moore-Bick LJ. He also has to take into account the public interest, since an undue amount of resources might be used if a trial takes longer than it ought to have done if the pre-trial processes including disclosure had been properly carried out.
32. The personal signature order was, as Mr Lightman put it, a bespoke order designed to meet the particular features of these proceedings. If it bore more heavily on Prince Abdulaziz than the other parties, that was because Vos J took the view that severe measures were required to be addressed to all parties to enable a fair trial to take place and that nothing less would do. So there is nothing in Mr Fenwick's equivalence point. Parties who bring their disputes to the court are bound to follow the court's rules and entitled to expect that everyone else will also be required to follow the rules. A person who is in a privileged position so far as litigation was concerned in his own country cannot simply assume that he will have similar privileges in the courts of this country too. There is no violation of the Convention right to a fair trial in those circumstances.
33. The fact that statements of truth, which may also be required when there is an issue of credibility at stake, show that other means are available does not show that the course which Vos J adopted was not appropriate in this context or that it was not one which it was within his discretion to direct.
34. Mr Fenwick advanced the further argument that Vos J had failed to give proper weight to the protocol in making the personal signature order. I accept that the protocol was a material matter to be taken into account in deciding whether to require parties personally to sign statements relating to disclosure. However, Vos J was well aware from earlier hearings in these proceedings of the existence of a protocol, and he took it into consideration. However, he took the view that little weight should be attached to it. In my judgment, he gave it little weight because it was not binding in the United Kingdom and because of the nature of the allegations in the proceedings.
35. There was, and is, also considerable uncertainty about the protocol. Mr Lightman submits that the evidence does not support the existence of the protocol. Prince Abdulaziz did not mention it in these proceedings until 22 January 2013 and neither of the Princes mentioned it when they applied to stay the proceedings on the grounds of sovereign immunity. The evidence comes only from the Princes themselves, their employees or their expert: see, for example, the third witness statement of Ms Santos 11 March 2013.
36. There was no evidence on the protocol before Vos J at the hearing on 30 and 31 July 2013. On 4 November 2013, Mr Hassan A Al Ghatani, a practising lawyer filed a witness statement containing expert evidence as to Saudi law on behalf of Prince Abdulaziz, but even he only referred to the protocol in his third witness statement. He described the protocol as follows: members of the Saudi Royal family do not directly participate in a court case, whether through personally signed statements or testifying before a Saudi court. He did not explain why he did not previously mention the protocol in his two earlier statements. He produced no objective written document to substantiate the existence of this protocol.
37. Moreover, Mr Ghatani failed satisfactorily explain to how HRH Prince Al-Waleed had come to give evidence in the recent case of Sharab v Al-Waleed [2013] EWHC 2324 (Ch) before Peter Smith J without any apparent sanction, even though he is also a member of the Saudi Royal Family. Peter Smith J declined an application for him to give evidence by video-link so he attended the trial in person. The trial was well-publicised and took place about a month before the hearing before Vos J.
38. These are further reasons why Vos J was not in a position to give the protocol any great weight. The view which Vos J took cannot be said to be perverse or the result of a misdirection.
39. Nor can it, in my judgment, be suggested, as Mr Fenwick at one point submitted, that Vos J, with his experience, would not have appreciated that unless the order was varied it might lead to judgment in default being entered against Prince Abdulaziz.
40. As to Vos J's mistake in thinking that Prince Abdulaziz would give evidence, when these proceedings were before Vos J it seemed possible (but not definite) from what those then appearing for the Prince told the court that he would give evidence in the normal way. On that basis there could be no objection to his signing the witness statement as well. If he decided not to give evidence, that might be a reason why he ought to sign the witness statement. I do not accept Mr Fenwick's submission that the fact that he was no longer going to be a witness is automatically a good reason why he should not be required to sign the disclosure statement.
41. The true position is that Prince Abdulaziz reacted too little and too late. The solicitors to the Apex parties sent a draft order containing the personal signature order to Prince Abdulaziz's solicitors a few days ahead of the hearing. His representatives did make their objections to Vos J about the making of the personal signature order on 31 July 2013. However the Prince did not appeal it until he did so (out of time) some three months later. By that stage the Apex parties had complied with the order. They had grounds for insisting on the Prince complying with it. He continued to delay. He did not file a statement by his solicitors attesting to his answers to the questions raised by the personal signature order for some months. Instead, he filed a statement signed by Mr Abu-Ayshih attesting to the statements required by the order instead which, given that he was not a lawyer and did not answer all the questions, was hardly a good substitute for a statement signed by the Prince personally.
42. As the witness statement of Mr Marshall was not available when the personal signature order was made, it cannot be said that Vos J was wrong to make an order without taking that statement into account. (That statement was available when Mann J heard the application to vary the order but he clearly did not consider that this witness statement made any material difference by that stage).
43. Common practice: Mr Fenwick submits that the judge was mistaken in thinking that it was usual for the court to make an order requiring personal signature to a witness statement, and thereby misdirected himself.
44. In my judgment, Vos J made no mistake about the usual form of order. In Arrow Trading v Edwardian Group [2005] 1 BCLC 696, cited by Mr Lightman to us and to Vos J, Blackburne J held that CPR 31.10 requires each party personally to sign the disclosure statement as that rule makes special provision for agents to sign where the party is a company, firm, association or other organisation. He further held that a disclosure statement signed by one respondent on behalf of himself and other respondents did not comply with the CPR, and that non-compliance with this requirement was not a mere technicality. I agree with those holdings. I further note that CPR 31.10(9) contemplates the possibility that a practice direction might be issued allowing a non-party to sign a disclosure statement. It follows that the order should require personal signature to a disclosure statement if it is to reflect the CPR. In the context of the exchanges with counsel on 30 July, it is that form of order Vos J must have had in mind. He treated the witness statements required by the personal signature order analogous to disclosure statements. No doubt it is common in practice for solicitors or other agents to sign disclosure statements in cases where no specific order has been made and there is not likely to be any dispute about the integrity of the disclosure. However this was not that sort of case.
45. For all these reasons, the personal signature order should in my judgment stand. To some extent Mr Fenwick repeated his arguments about Vos J's order when making his submissions about the subsequent orders on the basis that they were wrong because the underlying order of Vos J was wrong. In the light of my conclusion that the order of Vos J was not wrong, I need not deal with those submissions.

UNLESS ORDER (Norris J – 9 September 2013)

46. Mr Fenwick's principal submission is that an unless order was disproportionate and draconian. As the non-compliance could be remedied if his solicitor or an agent was permitted to produce the witness statement on Prince Abdulaziz's instructions, there was a means of substantially complying with the personal signature order. So, Mr Fenwick submits, the non-compliance should have been treated as a matter of form and not substance. Vos J was aware that Prince Abdulaziz would not breach the protocol by giving instructions to his solicitor to enable him to give evidence, so a witness statement signed by his solicitor was a realistic alternative.
47. Mr Fenwick submits that Norris J ignored the fact that Prince Abdulaziz could not comply with the personal signature order. In addition, Mr Fenwick contends that Prince Abdulaziz has a strong defence, which should have been given greater weight. He also contends that, due to Mr Abu-Ayshih's and now Mr Marshall's statement, there has been substantial compliance with the personal signature order and that the Prince would still be liable if the statement of truth was wrong. As to substantial compliance, the requisite information was given by Prince Abdulaziz to Mr Abu-Ayshih and he made a witness statement. However, I note that Prince Abdulaziz did not then apply to the court for any variation of the personal signature order.
48. Mr Fenwick submits that Norris J considered that the order made by Vos J was more serious than it was. The premise of this submission, however, is that Vos J intended the parties to make their witness statements in what Mr Fenwick calls the usual form, namely with the agent's signature rather than that of the party personally. But, as I have rejected this premise, it follows that I do not accept this submission either.
49. Mr Fenwick also submits that Norris J wrongly assumed that Prince Abdulaziz would give evidence at the trial (see judgment, [14] end). This may have had some influence on his order but then he was not told that the Prince had decided not to give evidence.
50. In my judgment, Norris J was conspicuously thorough and fair in the way he approached the application for the unless order. He had an admirable grasp of Vos J's reasoning as can be seen from the following concise summary of the situation:

"Each side accuses the other of profound wrongdoing. The basis on which the Apex parties pursue their allegations of wrongdoing, which include allegations that Prince Abdulaziz has been involved in money laundering in connection with the facilitation of terrorist organisations, is certain e-mails and electronic communications. The Global parties say that these e-mails and electronic communications are forged. Vos J had therefore to consider at the CMC how to preserve the underlying material - both the actual communications and the metadata which surround them - in order to ensure that the allegations of forgery could be properly addressed." (judgment,[2])

51. He expressed with perfect clarity his appreciation of the seriousness of the consequences of the order he was asked to make:

"[T]he striking out of a statement of case is one of the most powerful weapons in the court's case management armoury and should not be deployed unless its consequences can be justified." (judgment, [8])

52. Norris J went on to consider whether an unless order should be made. He concluded that it should be made in the light of the objectives that Vos J had when he made the personal signature order. He did not consider that it was a viable alternative for the statement of Mr Abu-Ayshih to be accepted instead:

"It would seem to me that if [Prince Abdulaziz] does not comply with the Order there is a real risk that the overall fairness of the proceedings will be jeopardised. Everyone else will have put their cards on the table. The Prince will deal through an agent. Everyone else will be exposed to criticism and have their credibility attacked if they are shown to have concealed some relevant account, relevant device, or relevant communication. But, the Prince says that he should be exempt from that criticism."

53. Norris J may well have had in mind that, even though an agent would be making a statement on behalf of Prince Abdulaziz, it would be open to Prince Abdulaziz to suggest in submissions or cross-examination that the agent had omitted something that he had been told to put in the statement and so on. For that reason, a witness statement from the Prince's agent may be less valuable to Apex than a statement by the Prince personally and put Apex at a disadvantage as compared with the Prince.
54. Norris J also considered whether some lesser sanction was possible, such as a debarring order, but he rightly concluded that that might prejudice the other parties as Prince Abdulaziz had not given proper disclosure.
55. I consider that the judgment of Norris J on the unless order cannot be faulted. He balanced the interests of the parties with conspicuous care. It is too late for Prince Abdulaziz to come along later and say that he would not be giving evidence. Prince Abdulaziz should have made that clear to Norris and Vos JJ. He could not ask for the application to be reheard and an order made on a different footing because he now has a different view about being a witness. As Heraclitus said, you cannot step into the same river twice. It was up to the Prince to ensure that his representatives had proper instructions at the appropriate time.

JUDGMENT (Norris J - 14 October 2013)

56. Mr Fenwick contends that this order was wrongly made for several reasons. In particular he submits that it was wrong because it was made under the informal "request" procedure in CPR 3.5 when the trial of the action still had to proceed against the other three respondents. There would have to be a further hearing to determine whether there should be an order that Prince Abdulaziz should purchase the petitioner's shares. This he submits is outside CPR 3.5.
57. The judgment was entered by Norris J on the papers, and so there was no hearing and no judgment. Later those representing Prince Abdulaziz applied for the judgment to be set aside. Mann J dealt with that application. I shall consider the challenges to the judgment made by Mr Fenwick when I consider the no-stay order made by Mann J.

NO-VARIATION ORDER (Mann J – 30 October 2013)

58. Mr Fenwick submits that Mann J was wrong to conclude that he did not have jurisdiction to vary the personal signature order. On Mr Fenwick's submission, the power to vary is contained in CPR 3.1(7). That rule was considered by this court in Tibbles v SIG Plc [2012] 1 WLR 2591. Rix LJ held that the exercise of the power usually involves (1) a material change in circumstances or (2) a material misrepresentation resulting in the original order being made under a misunderstanding or (3) something else out of the ordinary.
59. Mr Fenwick contends that the judge's interpretation of Tibbles is wrong. Mr Fenwick submits that the conditions identified by Rix LJ were satisfied. There was a material chance in circumstances. Vos J misunderstood the position. A new means of compliance has been devised in the shape of Mr Marshall's witness statement. That means there was substantial compliance, which was a factor which had not been present when the personal signature order was made. Prince Abdulaziz has decided not to give evidence. There were, moreover, exceptional circumstances in this case. In any event, the circumstances are highly exceptional, and there was no prejudice to the Apex parties.
60. Mann J held that there was no relevant change in circumstances because the facts relied on ought to have been clear to Prince Abdulaziz's advisers at the time of Vos J's order. In my judgment, this was correct in law: the variation sought was not to resolve a problem which had arisen due to unforeseen circumstances since the personal signature order was made, but to circumvent a problem which had arisen due to foreseen circumstances because of that order.

NO-STAY ORDER (Mann J – 29 November 2013)

61. The application to Mann J considered here was an attempt to set aside the judgment on the basis that it was irregular and an attempt to stay the judgment pending trial of these proceedings on the basis that there might be inconsistent findings. On irregularity there are several points I need to consider, which I shall take first.

(a) Did Norris J have jurisdiction under sections 994 to 996 of the Companies Act 2006 to enter judgment against the Prince?

62. This point was raised on appeal and not taken before Mann J. As it is logically prior to the issue which he considered, I shall take it first. The issue is whether the basis of the jurisdiction for the judgment was sections 994 to 996 of the CA 2006 and if so whether the claim on which Norris J entered judgment ("the relevant claim") was within that jurisdiction. The order of Norris J is stated to be made by him in the Companies Court in the two petitions.
63. The further background relevant to this issue is this: On 31 July 2013, Vos J directed that the Apex and Global Torch proceedings be managed and heard together: the proceedings were not consolidated. By that stage the Apex parties had raised a defence and counterclaim in the Global Torch petition claiming monies due to Apex rather than Fi Call, including the relevant claim. Vos J dismissed Global Torch's application (with its assent) to strike out the counterclaim and gave permission to Apex to file amended points of claim ("APOC") incorporating all its claims, which it has done.
64. Mr Fenwick submits that it is not open to the Apex parties to add the relevant claim and that the relevant claim fell outside sections 994 to 996 of the CA 2006. Under those sections, there must be unfair prejudice to the petitioner in their capacity as a member (see Gore-Browne on Companies at [19.11] and see Re Coroin Ltd [2013] EWCA Civ 781, [2014] BCC 14). A separate Part 7 claim would have required permission to serve out of the jurisdiction, which Mr Fenwick submits would not have been granted, and so this point is of substance.
65. Moreover, submits Mr Fenwick, the petitions were governed by the Companies (Unfair Prejudice Applications) Proceedings Rules 2009 (SI 2009/2469) (the "Unfair Prejudice Rules"), and by implication any counterclaim in a petition would have similarly to be for relief under sections 994 to 996 of the CA 2006. Moreover, additional parties could not be added without leave of the court (see CPR 20.7, applying to the petitions by virtue of Rule 2(2) of the Unfair Prejudice Rules). CPR 20.7 provides:

"(1) This rule applies to any additional claim except- "

(a) a counterclaim only against an existing party; and

(b) a claim for contribution or indemnity made in accordance with rule 20.6 .

(2) An additional claim is made when the court issues the appropriate claim form. …

(3) A defendant may make an additional claim-

(a) without the court's permission if the additional claim is issued before or at the same time as he files his defence;

(b) at any other time with the court's permission. …"

66. Unfair Prejudice Rule 2 provides:

"Except so far as inconsistent with the Act and these Rules, the Civil Procedure Rules 1998 apply to proceedings under Part 30 of the Act with any necessary modifications."

67. The answer to Mr Fenwick's submission is that Norris J gave judgment on the counterclaim which the Apex parties had brought against the Global Torch parties. This did not have to be for relief under sections 994 to 996 of the CA 2006 because there is nothing in the Unfair Prejudice Rules to prevent such a counterclaim and Unfair Prejudice Rule 2(2) incorporates the CPR. It would have been different if the Apex parties had sought this relief under sections 994 to 996 without also starting proceedings under the general jurisdiction of the High Court.
68. So a claim outside sections 994 to 996 could be made in the APOC. Did it require the permission of the court under CPR 20.7 (Procedure for making additional claims against non-parties), and was that permission given? Mr Lightman submits that Vos J must by implication have given permission to the Apex parties to join the defendants to the counterclaim as respondents to the petition when he gave directions for the APOC. I agree that, if that permission was required (which I doubt because in reality there was no change in the parties as there was no change in the formal constitution of the two sets of proceedings), Vos J must have given that permission by implication. There is no prejudice to Prince Abdulaziz because relief on the additional claim could in any event be given in the proceedings by the judge in his capacity as a Justice of the High Court.
69. Therefore Norris J had jurisdiction to enter judgment subject to a point which was subsequently considered by Mann J and which I shall consider when I consider the no-stay order. Subject to that, the judgment is therefore not irregular. There is no need for this court to take up Mr Lightman's suggestion that it should rectify any non-compliance with the CPR by making an order under CPR 3.10 (General power of the court to rectify matters where there has been an error of procedure).

(b) Under CPR 3.5 the judgment had to be for the whole of the claim against Prince Abdulaziz

70. Mann J held that (1) the APOC contained "two conceptually and procedurally different claims" (judgment, [34]), namely the Apex unfair prejudice petition and the claims which had formerly been the subject of the counterclaim; (2) the non-abandonment of the claim for a share purchase order under sections 994 to 996 of the CA 2006 was therefore not relevant; and that the claims (meaning the claims apart from the claim for £7m derived from the former counterclaim) could be abandoned informally.
71. Mr Fenwick submits, that where a request is made for judgment pursuant to CPR 3.5 (see paragraph 13 above), the reference to "the claim" in CPR 3.5(2) (b) must be to the whole of the claim, and that judgment could only be on the whole of the claim. He contends that this makes good sense since the evident purpose is to permit judgment on request where that will dispose of the whole of the action. But in this case, an unhappy half-way house resulted: Prince Abdulaziz could not defend but the Apex parties had not obtained the whole of the relief that they had sought against him.
72. Mr Fenwick contrasts the wording of CPR 12.4(1) ...Procedure for obtaining default judgment), which specifically refers to obtaining judgment on a claim for specified relief and provides the steps to be taken in other cases.
73. In my judgment, the entry of judgment by Norris J was correct. Apex had more than one claim and the APOC was a way of presenting its various claims but did not destroy their separate provenance. I accept that this leads to the situation where trial must go on even though judgment has been entered against a party, and that CPR 3.5 was in part designed to prevent this. However this will always be a possible outcome where default has occurred in relation to one only of the actions ordered to be heard at the same time. The only complicating factor is that (for good reason) Vos J had directed a single set of pleadings. This made it look as if there were a single set of proceedings when there were not.

(c) Was the judgment irregular because Apex did not abandon a claim for declaratory relief naming Prince Abdulaziz?

74. This is a short point which Mann J considered and rejected. Mr Fenwick contends that he was wrong to do so.
75. The circumstances are these. When Apex sought judgment from Norris J, it did not abandon a claim for declaratory relief in paragraph 4 of the prayer for relief derived from their counterclaim to the Global Torch petition. This sought a declaration relating to the price payable under "the Spring 2010 SPAs" (as defined) that money paid to Fi Call was held for Apex and should not be treated as transferred to Fi Call on behalf of Prince Abdulaziz.
76. Paragraph 4 provides:

"(4) A declaration that the sums referred to at paragraph 84 above and/or the traceable products of those sums are held by the First Respondent in the manner pleaded at paragraphs 85 to 88 above and are not to be treated as having been transferred to the First Respondent on behalf of the Third Respondent or as forming part of a loan from the Third Respondent to the First Respondent."

77. Prince Abdulaziz contends he is a necessary and proper party to such a claim and relies on the express reference in the APOC to himself. In the event the claim for a purchase order had not been abandoned. It was always part of the same claim as the claim for $7m. The claims had (he submits) been consolidated.
78. Mann J held that the references to the Prince in this paragraph 4 were purely descriptive (judgment, [29]).
79. Mr Fenwick contends that the judge wrongly held that the prayer for declaratory relief was not intended to bind Prince Abdulaziz.
80. I agree with Mann J. Paragraph 4 of the prayer is open to the interpretation which he placed on it. Moreover, in the light of the judgment which Apex obtained, it would not now be open to it to contend that this relief is not merely descriptive and binds Prince Abdulaziz. If necessary, abandonment is achieved by that route.

(d) Instead of entering judgment, Norris J should have "held the ring"

81. Mr Fenwick submits that, even though Prince Abdulaziz had failed to comply with the unless order, Norris J was wrong to enter judgment against him. Mr Fenwick contends that the claim is substantial and that there is a risk of inconsistent outcomes. Because of the impending trial against the other Global Torch parties, Norris J should have "held the ring". He should have simply debarred Prince Abdulaziz from defending the claims until judgment in the action. It would, he submits, be unfair and surprising if the judgment against Prince Abdulaziz stood but Apex failed to establish the basis for the claim as against the other parties who were able to defend the proceedings. There is, submits Mr Fenwick, a real prospect of success on the defence to the $7m claim, namely that Prince Abdulaziz duly accounted to Apex for the sum for which judgment in default has been given against him by paying $8m of the $10m received from Mr Al Masoud for the account of Global Torch and Apex in February 2010 into bank accounts in Fi Call's name. The Apex parties have not denied this payment but merely not admitted it in their pleadings, and have, he submits, confused this transaction with a later transaction with Mr Al Masoud.
82. Mr Fenwick cites no authority for this proposition (other than Chartwell Estate Agents Ltd v Fergies Properties SA [2014] EWCA Civ 506, where the facts were entirely different). Mr Fenwick made the same submission to Mann J who refused both to set aside or to stay the judgment on the basis that the risk of inconsistent findings is what inevitably happens when default occurs and to grant a stay or set aside the judgment at that stage would deprive the unless order of much of its force.
83. In my judgment, Mann J was right. The proposition would inevitably mean that, if the Apex parties failed at trial on an issue which undermined the judgment entered against Prince Abdulaziz, Prince Abdulaziz would be able to take advantage of that in some way. That cannot be correct. Prince Abdulaziz has failed to comply with an order of the court and there is no reason why he should be relieved of the consequences of this in the event that other parties have been able to defend themselves successfully against the claim. In addition, the Prince has not taken any step to pay the amount of the judgment to a third party to be held pending the determination of the trial. Moreover, it is possible that the reasons for their success may be due to the fact that Prince Abdulaziz has not given evidence or disclosure: if he had done so, the claim against the other parties might have succeeded. This is not one of those exceptional cases where a judgment should be capable of being reopened because new factors come to light (see The Ampthill Peerage case [1977] AC 547, 568 per Lord Wilberforce).
84. Mr Fenwick has raised concerns about Apex's solvency. As I do not consider that a stay should be granted, I need not deal with these submissions.
85. Mr Fenwick initially submitted that a party whose defence is struck out and who is debarred from defending may nonetheless challenge the claimant's case at trial, citing Thevarajah v Riordan [2013] EWHC 117(Ch) at [39]-[47]. However, he did not pursue that submission after Mr Lightman pointed out that Richards LJ had disapproved the relevant passages when giving the judgment of this court in those proceedings ([2014] EWCA Civ 14 at [38]).

(d) Other issues considered by Mann J

86. On his application for relief from sanctions before Mann J, Mr Saoul who then appeared for Prince Abdulaziz argued that there had been substantial compliance in the light of Mr Marshall's witness statement. Mann J held that many issues had already been determined by Norris J. Mann J also refused to stay the judgment. In my judgment, this was correct since the point is the same whether Mr Marshall or Mr Abu-Ayshih signs the witness statement on behalf of the Prince.
87. Mr Fenwick submits that Mann J did not take into account the merits of the defence. He cites CIBC Mellon Trust Co v Stolzenberg [2004] EWCA Civ 827 at [30] where I approved a dictum of Etherton J (as he then was) that when granting relief from sanctions the court could and should take into account the merits of the case. However, that does not mean that the merits should be taken into account in every case, especially where, as here, the strength of the case depends on disputed facts.

PROPOSED ORDER

88. For the reasons given above, I would dismiss these appeals.

Lord Justice McFarlane

89. I agree.

Lord Justice McCombe

90. I also agree.