England and Wales High Court (Chancery Division) Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
COMPANIES COURT

		Rolls Building Royal Courts of Justice
		30th October 2013

MR. JUSTICE MANN:

1. This is an application for a variation of a prior order of this Court and relief from sanctions arising out of circumstances which are somewhat complex. The context is a litigation involving HRH Prince Abdulaziz Bin Mishal bin Abdulaziz Al Saud, one of the Saudi royal princes. It is a commercial dispute, ultimately about money; I will not go into the details of it at all save to say that in the proceedings there is a claim against His Royal Highness.
2. At a previous stage in these proceedings the parties had to consider, and the Court had to rule on, certain aspects of electronic disclosure. In the context of that issue Vos J., who heard the matter, determined that there should be a disclosure statement and determined that it should be signed personally by each individual party, that is to say the parties were not entitled to serve the disclosure statement signed by their solicitors or some other agent. He so ordered.
3. His Royal Highness, who is the Third Respondent in one of the petitions, did not sign such a statement. He did not sign it because he claims that under a protocol in force within the Saudi Royal Family Saudi princes do not, are not entitled to or should not participate in legal proceedings by signing such documents and, as I understand what is now said about the protocol, giving evidence. When he did not sign it the counterparties sought relief. They applied for an unless order and on 9th September Norris J. heard that application and ordered that unless the Third Respondent, by4 p.m. on 18th September, complied with Vos J.'s order by making a witness statement or witness statements, "(which must, for the avoidance of doubt, be certified by a statement of truth signed by Prince Abdulaziz personally)" and provide the information which Vos J.'s order required, then no Particulars of Defence be struck out and he be debarred from defending. The relevant order of Vos J. was made on 31st July 2013. Prince Abdulaziz did not comply with that order and on 14th October the counter parties entered a default judgment under certain paragraphs of the prayer in the sum of US$7.7 million.
4. That judgment having been entered, Prince Abdulaziz through his lawyers launched this application. It is, in essence, an application for a variation of the order of Vos J. and for relief from sanctions. The thrust of it is that there should never have been an order that Prince Abdulaziz should personally sign the disclosure statement because of the protocol and because it was not required by any rules and that the unless order of Norris J. was therefore inappropriate and ought to be unwound. It is coupled with various applications for a stay.
5. The application was served short in the sense that the full three days' notice was not given; as far as I can see, one clear day's notice was given. The respondents to the application complained about that and in my view with some justification. Mr. Justin Fenwick QC, who appears for the Prince today, seemed, by his skeleton argument, to be insisting that the whole of this application be dealt with today, notwithstanding short service, and he maintained that it could be dealt with within the two hours appropriate for such applications. The latter point was, in my view, always completely hopeless. Arguing just one point this afternoon, upon which I shall give judgment, relating to whether variation is an appropriate response (as opposed to an appeal as to what Vos J. did) has itself taken over two hours of court time as I deliver this judgment now. That is without adding on the significant pre-reading which I had to do in order to understand firstly the skeletons (which were lengthy and detailed) and certain aspects of the documents. I had not anticipated that this point would take so long to deal with, otherwise I would probably not have embarked upon it, but I have and, since I started, I shall finish.
6. When I saw the application it was apparent to me that it would have to go over to an application by order if everything was to be heard together because it was going to take a long time, in the region of the one day that was suggested by the respondents, who appear by Mr. Howe QC. I decided that there was conceivably one point which would put an end to the rest of the application if it went one particular way and the most expeditious way of dealing with this application was not to adjourn the whole thing but to take that point and see where it led. That one point is the point which I have previously referred to, that is to say whether or not this is an appropriate case for a variation of Vos J.'s order. If it is not an appropriate case then that part of the application fails and it must follow that the unless order falls with it. Mr. Fenwick may have a separate application for a stay judging by the way he outlined the applications to me when he was on his feet today, but I did not detect that it had been previously advanced and I shall not deal with it at this stage; I will have to return to it after I have delivered judgment.
7. It seemed to me, when I first considered this matter, that there was a case for saying that this was indeed not an appropriate case for a variation and that if the Prince did not like Vos J.'s order the appropriate course would be to seek to appeal it. He is of course out of time, but if it is appropriate for an appeal and not a variation and he is out of time and does not get permission to appeal out of time, then he will be in the same position as any litigant who lets an appeal opportunity go. If I decide the point against Mr.Fenwick then effectively the whole application goes. If I decided that the point were capable of being taken as a variation point, then it would or might be necessary to consider at a further date whether in fact a variation is appropriate. The point is, therefore, a sort of one-way trap door but nonetheless it is a point which I can usefully take.
8. In order to understand the point it is necessary for me to consider in a little more detail what happened before Vos J. On 30th July the judge heard argument about how electronic disclosure should be achieved. He made his ruling on techniques and the contents of disclosure statements. Draft orders had been previously prepared and further drafts, on the basis of his judgment, were prepared for the debate the next day, 31st July. By way of amendment to those orders to introduce a qualification which removed from the Prince the need to sign disclosure statements personally, the Prince's counsel introduced argument on the point. Thus the point arrived before Vos J. He did not deliver a formal judgment on the point but his determination appears in the course of two or three interlocutory observations at pages 4 to 6 of the transcript. It starts at page 4 line 14 where Mr. Wardell QC (who led for the Prince) introduced paragraph 14, which was the paragraph of the order which raised the point. He suggested that Prince Abdulaziz should not have to sign the document. Vos J. then asked whether he had any indication as to whether it was his intention to give evidence in the proceedings if they go to trial, to which Mr. Wardell commented, "I do have a current understanding that it is being considered." The point was then taken by Mr. Lightman (who appeared for the respondents) that the Rules and the operation of the Rules required that a disclosure statement, such as that under debate, had to be signed by an individual (as distinguished from a corporate) litigant personally and he drew the court's attention to notes in the White Book about this and to the case of the Edwardian Group (the full reference of which is Arrow Trading and Investments Establishment 1920 and Edwardian Group Limited [2004] EWHC 1319, a decision of Blackburne J, also reported in [2004] British Company Cases at page 955). The statement in question was not a disclosure statement within that case but Vos J. indicated that his view was that it was analogous. Mr. Wardell's comments were invited on the point and he said it was not a disclosure statement, impliedly saying that a signature by an individual was not necessary. He said that an agent (Mr Abu Ayshih) would sign the statement of truth and would "obviously" be a legal witness, to which Vos J. observed this,

"But, unfortunately, the Prince is also going to be a witness and he is a party to these proceedings, for good or bad, so it seems to me that heshould be required to behave like any other party, and if he chooses not to, then you will have to explain why."

9. The transcript provides that there is a pause, after which Mr. Wardell said,

"I am told that in Ms Santos' statement – I am reminded that she deals with the fact that there is a protocol where they do not sign, someone signs on their behalf and that –"

To which Vos J. responded,

"I know, but I am afraid their protocols are valid in Saudi Arabia but not here. I cannot have this as a precedent for the future conduct 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. 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."

Mr. Wardell then acknowledged that that would be the order. That is the extent of the decision on the point.

10. The protocol which was referred to in that exchange is the protocol to which I have referred, that is to say a protocol which it is said is subscribed to by the Saudi princes as a matter of "cultural and social norms", (I take that phrase from a description in one of the witness statements before me today), pursuant to which they do not participate in legal proceedings to the extent of signing such documents or apparently giving evidence; contrary to the indications that were given by Mr. Wardell that the Prince was considering giving evidence in the case.
11. Mr. Fenwick seeks to challenge that decision in the sense of seeking a variation of it. He submits that there should be a variation because the judge was misled as to what the position was in relation to the giving of evidence and misled as to the strictness of the requirement that individuals should not provide witness statements. He was proceeding on false information or on false material. He submits that had the judge been aware of the current position, as it now appears clearly to be, he would not have made the order that he made. The current position to which he refers is a re-invocation of the protocol and what he would say is clear evidence that the Prince can supply information which would be the equivalent of that which would beprovided in a disclosure statement. He would provide his verification of relevant facts to the solicitor and the solicitor would go on record – and indeed has gone on record in a witness statement – as to what the Prince has said. The Prince would thereby be bound by what the solicitor has said on his behalf. He complains that the analysis of the judge as to what the proper position was was not correct and there are adequate alternative means to achieve the entirely legitimate objective of having the Prince subscribe, closely enough, to the disclosure information which is provided on his behalf. He also draws attention to what he says is the fact that the judge relied on common sense to get people out of unnecessary difficulties, but common sense, he says, does not seem to have prevailed because the order has been taken at face value and an unless order was subsequently made and a judgment in a significant sum has now been obtained.
12. As a result of those events the Prince is now the subject of a very significant judgment when his co-defendants are not and it may be at the trial that the co-defendants will be entirely vindicated and it would turn out that they are not obliged to pay sums of money which it turns out that the Prince has in fact been obliged to pay under the judgment. He also points out, as I have indicated, the protocol. Based on that Mr. Fenwick says he has a good case for seeking a variation. He submits that it is appropriate to come back to court for a variation in a matter of this kind, and in this matter in particular, rather than appealing because the matter has to be dealt with quickly because there is – as indeed there is – to be a trial of this matter in February and an appeal would get in the way of that. Coming for a variation is the quicker and easier way of dealing with the problem.
13. Mr. Howe, for his part, submits that this is not a case for a variation. The requirements for a variation – to which I shall come in due course – have not been fulfilled and there are other problems. The judge was entitled to reach the decision that he did insofar as he determined that a disclosure statement of this nature had to be signed by the party in question and in deciding, so far as discretion might be involved, that the Prince should sign the disclosure statement. So far as the protocol is concerned, Mr. Howe pointed to what he said was the weakness in relation to the evidence of the protocol. It has never been described in any document other than a witness statement of the Prince's solicitors or statements provided by people who are effectively the Prince's employees. There is no source which Mr. Howe would regard as more respectable for the existence of the protocol. Furthermore he points out that another prince of the same rank as Prince Abdulaziz, that is to say Prince Mishal, has himself recently actually given evidence in a court of this Division. That being the case, the protocol cannot be as rigid as Prince Abdulaziz would say. Mr. Howe would nodoubt say that the protocol at that point becomes a matter of convenience rather than a matter of principle, although he did not put the point in that way. Submissions made by Mr. Fenwick about the unintended consequences of the judge's order were wide of the mark. All judges who made orders in this case – that is to say, Vos J. and Norris J. – were or must be taken to have been fully aware of the consequences of the orders that they were making.
14. The starting point for a consideration of this narrower single point arising in this application is whether this is indeed a matter which is appropriate for a variation by this Court of commensurate jurisdiction to that of Vos J. to vary or whether the decision of Vos J. should be attacked on an appeal. It is in substance necessary for Fenwick to attack successfully Vos J.'s order first because otherwise he does not have an attack on Norris J.'s unless order and the judgment thereafter.
15. I turn therefore to the requirements of variation. The existence of a jurisdiction to vary under the CPR is not disputed. The jurisdiction exists under CPR3.1(7) which says as follows:

"(vii) A power of the court under these rules to make an order includes a power to vary or revoke the order."

Not surprisingly the courts have sought to impose some limits on that lest it become a vehicle for constant, frequent and unjustified challenges to orders that have been made. The fulfilment of the whole purpose of making orders and rules relating to estoppel, functus and certainty depends on court orders standing and not being re-litigated time and time again. The most recent case on the point is the case of Tibbles v SIG plc [2012] 1WLR 2591. In that case Rix L.J. at paragraph 39 set out the sort of considerations which apply. He emphasised that discretion has a role to play and sometimes the join between discretion and jurisdiction may be hard to identify, but nonetheless he set out the follow principles:

"39. In my judgment, this jurisprudence permits the following conclusions to be drawn:

(i) Despite occasional references to a possible distinction between jurisdiction and discretion in the operation of CPR 3.1(7), there is in all probability no line to be drawn between the two. The rule is apparently broad and unfettered, but considerations of finality, the undesirability of allowing litigants to have two bites at the cherry, and the need to avoid undermining the concept of appeal, all push towards a principled curtailment of an otherwise apparently open discretion. Whether that curtailment goes even further in the case of a final order does not arise in this appeal.

(ii) The cases all warn against an attempt at an exhaustive definition of the circumstances in which a principled exercise of the discretion may arise. Subject to that, however, the jurisprudence has laid down firm guidance as to the primary circumstances in which the discretion may, as a matter of principle, be appropriately exercised, namely normally only(a) where there has been a material change of circumstances since the order was made, or (b) where the facts on which the original decision was made were (innocently or otherwise) misstated.

(iii) It would be dangerous to treat the statement of these primary circumstances, originating with Patten J and approved in this court, as though it were a statute. That is not how jurisprudence operates, especially where there is a warning against the attempt at exhaustive definition.

(iv) Thus there is room for debate in any particular case as to whether and to what extent, in the context of principle (b) in (ii) above, misstatement may include omission as well as positive misstatement, or concern argument as distinct from facts. In my judgment, this debate is likely ultimately to be a matter for the exercise of discretion in the circumstances of each case.

(v) Similarly, questions may arise as to whether the misstatement (or omission) is conscious or unconscious; and whether the facts (or arguments) were known or unknown, knowable or unknowable. These, as it seems to me, are also factors going to discretion: but where the facts or arguments are known or ought to have been known as at the time of the original order, it is unlikely that the order can be revisited, and that must be still more strongly the case where the decision not to mention them is conscious or deliberate.

(vi) Edwards v. Golding is an example of the operation of the rule in a rather different circumstance, namely that of a manifest mistake on the part of the judge in the formulation of his order. It was plain in that case from the master's judgment itself that he was seeking a disposition which would preserve the limitation point for future debate, but he did not realise that the form which his order took would not permit the realisation of his adjudicated and manifest intention.

(vii) The cases considered above suggest that the successful invocation of the rule is rare. Exceptional is a dangerous and sometimes misleading word: however, such is the interest of justice in the finality of a court's orders that it ought normally to take something out of the ordinary to lead to variation or revocation of an order, especially in the absence of a change of circumstances in an interlocutory situation."

16. The significant factors in my view are those appearing in paragraphs (ii), (iv) and (v) and in particular (ii). The important parts of that paragraph are the words which indicate that one can normally only get a variation where there has either been a change of circumstances (which does not really apply in this case) or where the facts on which the original decision were (innocently or otherwise) misstated.
17. Pausing there, there is nothing in Mr. Fenwick's submissions, in my view, which indicates that the facts were in any way misstated to Vos J. Vos J. obviously had the Protocol in mind. Although Mr. Wardell did not address him on it in detail it is apparent from his previous decision ([2013] WLHC 587 at paragraph 59) that he had already received and was aware of some form of evidence about the existence of the protocol and knew what the parties were talking about. It is impossible to identify any relevant facts of which Vos J. was unaware, much less any facts which were mis-stated before him.
18. The next most relevant paragraph is paragraph (v) where Rix L.J. referred to fact or arguments that were known or ought to have been known at the time of the original order and said that where there were such facts, "it is unlikely that the order can be revisited." Nothing in the material now placed before me by Mr. Fenwick falls within the category of unknown facts in my view. Everything relevant about the protocol and its operation was known at the time that Vos J. made his order. The matter was referred to Mr. Wardell and the matter was clearly in the judge's mind. Faced with that, the judge nevertheless made the order he made. So far as Vos J.'s decision was one of discretion, he had the relevant material before him.
19. In my view what has happened since is not that further facts have come to light which are relevant; it is that the consequences of the decision and the approach to the litigation adopted by the Prince at the time have come home to the Prince, by a judgment being entered. He has sought to beef up the case that was effectively before Vos J. first by introducing some more evidence about the Protocol which adds nothing material, and second, by proposing an alternative mechanism for satisfying the underlying requirements of the disclosure statement, that is to say a witness statementin which the clearly recorded statements of the Prince appear. Those are not new facts which have come to light and of which Vos J. knew nothing or matters which he misunderstood or anything like that. They are simply attempts by the Prince to avoid the consequences of the order.
20. Accordingly, so far as Vos J.'s decision was one of discretion, it does not seem to me that the requirements for attacking it within the Tibbles catalogue have been fulfilled or, in my view, have come even close to being fulfilled.
21. There remains the possible legal point which Mr. Fenwick relies on which is the extent to which, as a matter of law or principle, a disclosure statement should be signed by an individual litigant rather than an agent on his behalf. It is not wholly clear whether Vos J. was basing his decision on that principle or not. I tend to think he probably was not. If he was not then the point become irrelevant because the point becomes one of discretion which he exercised and which he did not exercise on any false basis or at least on any false basis sufficient to invoke the power of variation. If he did decide it on a false legal basis then the matter is not one which should be re-visited by a court at the same level - that is to say me – but it is something which should be re-visited on an appeal. Mr. Fenwick sought to demonstrate that the decision in the Arrow case did not decide that individuals had to sign disclosure statements personally but instead provided that there had to be separate disclosure statements for each part and that one omnibus statement would not do. There may be a little in Mr. Fenwick's point, although I came to the view that Arrow (which I will not read into my judgment at this late stage of the day) was in fact talking about individual signatures. But in any event, so far as what Mr. Fenwick complains about is a misunderstanding of the law, that is not for this court to deal with as a matter of variation. It is a matter for the Court of Appeal to deal with.
22. In all the circumstances it is clear to me that notwithstanding Mr. Fenwick's eloquence, and notwithstanding Mr. Fenwick's reliance on the serious consequences of what has happened, which were not lost upon me even before his submissions, this is plainly in my view not a case in which this Court should embark on a consideration of a variation of Vos J's order. If the Prince does not like that order – and it is plain that he does not – then an appeal is his route. He is of course out of time for appealing and were he to seek to appeal he would first have to overcome that hurdle. It would be for the Court of Appeal to deal with that particular point and I will say no more about it for that very reason, save to say that if the Prince finds himself out of time and does not get an extension of time for appealing, and if that is the reason that he cannot take the matter further, then that is a consequence ofhis not taking the point within the time limited for appealing. The inability to mount an appeal because it is late is no reason for going back and tackling an interlocutory decision as a matter of variation.
23. In those circumstances I am satisfied that this is not a case for a variation and that it is not appropriate for me to consider the matter further. That being the case then, as I understand the logic of Mr. Fenwick's argument, the invitation to consider further Norris J's order, the effects of it and the judgment which follows upon it are bound to fail because attacking Vos J's order successfully is a prerequisite to that. I will therefore not order any further hearing of those aspects of Mr. Fenwick's application.
24. There is one further matter on which he sought to address me which was the question of whether in any event there should be a stay of the judgment pending a trial of the action so that there will be a stay of the judgment which has been obtained until it has been decided whether the other defendants are or are not successful. As I think I have indicated, I did not detect myself that that was raised as part of his application. If it was not, then no more needs to be said about it on this application. If it can be demonstrated that it is actually part of his present application as it is formulated and developed in the supporting material, then I would be minded to adjourn that to be dealt with on another occasion.