England and Wales High Court (Chancery Division) Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

		Rolls Building
		20th October 2017

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MR JUSTICE HENRY CARR:

Introduction

1. This is an application by the Defendants ("CCFC" and "CAD") to strike out, or alternatively to obtain summary judgment in relation to a claim brought by the Claimant, Mrs Sartipy, which I will call "the new claim".
2. The new claim relates to a flat at Flat 56, Chatsworth Court London ("the Chatsworth Court property"). Litigation brought either by Mrs Sartipy or by her son, Mr Ghassemian in respect of this property has continued for many, many years. As I set out in a judgment given on 3^rd March 2016. At that time, Mr Ghassemian had brought at least eight applications seeking to set aside an order for possession in respect of the Chatsworth Court property, frequently recycling the same arguments in front of different judges who had not seen him before. I considered that this was an abuse of process. In addition, I found that Mr Ghassemian had had a long history of dishonesty and had fabricated documents, including documents which were relied upon during the application before me.
3. This is not the first time that Mrs Sartipy has been before the courts in respect of the Chatsworth Court property. In particular, in Tigris Industries Inc. v Ghassemian (Aka Ghassemian Hamila Sartipy) [2016] EWCA Civ 269 Lewison LJ held that she and Mr Ghassemian had advanced a bogus claim to acquire title to the Chatsworth Court property by adverse possession of land.
4. On that occasion, a fraudulent declaration of trust was relied upon. Lewison LJ held that to advance the argument that Mrs Sartipy sought to rely upon was, in any event, an abuse of process. He said at [25] - [26]:

"25 I have said that, as I see it, the raising of the argument that Mrs Sartipy wished to raise was an abuse of process, because if it was to have been advanced it could and should have been raised before (see Johnson v Gore Wood [2002] 2 AC 1 ). It is not, as the judge thought, a collateral attack on a previous decision of the court; it is a direct attack on the court's jurisdiction to make the order in the first place. Indeed it may well be that Mrs Sartipy is precluded from raising the argument by a cause of action estoppel (see Virgin Atlantic Airways Ltd v Zodiac Seats UK Ltd [2013] UKSC 46, [2014] AC 160 at paragraph [22]).

26 The principle is not simply one of justice between the parties but has a public dimension as well. The public dimension includes not bringing the administration of justice into disrepute, the public interest in the finality of litigation, and that part of the overriding objective which requires the court only to allot to an individual case an appropriate share of the court's resources while taking into account the need to allot resources in other cases (see CPR Rule 1.1(2)(b) )."

5. Lewison LJ also referred to the case of Jameel (Yousef) v Dow Jones & Co. Inc. [2005] EWCA Civ 75; [2005] QB 946 where Lord Phillips MR said at [54]:

"An abuse of process is of concern not merely to the parties but to the court. It is no longer the role of the court simply to provide a level playing field and to referee whatever game the parties choose to play upon it. The court is concerned to ensure that judicial and court resources are appropriately and proportionately used in accordance with the requirements of justice. If Dow Jones have caused potential prejudice to the claimant by failing to raise the points now pursued at the proper time, it does not follow that the court must permit this action to continue."

Lewison LJ concluded at para. 29:

"In these days where there is such a pressure on the courts, a judge faced with an application or defence which he considers to be an abuse of process should at least require the point to be considered and decided."

6. During the many applications in respect of the Chatsworth Court property, Mr Ghassemian has purported to act in various capacities. In particular, from 2010, until the end of April 2012, he purported to act solely on behalf of Mrs Sartipy. From 30^th April 2012 until 30^th September 2015, he purported to act primarily on his own behalf as beneficiary under a discretionary trust which, as I have said, was found to be a sham. Since 30^th September 2015, he has alleged that he is a regulated tenant of the Chatsworth Court property.

Background to the new claim


7. The present application needs to be viewed in the light of the history of disputes in relation to the Chatsworth Court property. Until April 2017, Mrs Sartipy was the registered proprietor of a long lease at Flat 56, Chatsworth Court. CCFC is a lessee owned company which owns the freehold to Chatsworth Court and became the freeholder in 2006 or 2007. The previous freeholder was Dejan Property Limited. CAD is the maintenance trustee under the lease.
8. Under the lease, Mrs Sartipy as lessee was liable to pay service charges. She failed to pay such service charges and in May 2010, CCFC and CAD issued a claim seeking judgment for service charges due from 29^th September 2004 to 28^th September 2010 ("the service charge claim"). Mrs Sartipy filed a defence but this was struck out for failure to comply with an unless order dated 21^st February 2011 and on 9^th June 2011, judgment was entered against Mrs Sartipy in the service charge claim for the sum of £26,870.98.
9. A final charging order was made in relation to the lease on 24^th March 2014 and a writ of possession and control was issued on 28^th September 2015, which was executed on 30^th September 2015. Numerous applications and appeals were then pursued by Mr Ghassemian. I made an extended civil restraint order against him on 3^rd March 2016.
10. The lease was eventually sold pursuant to an order for sale dated 29^th March 2017. On 11^th April 2017, Asplin J, as she then was, dismissed yet more applications by Mr Ghassemian and an appeal against a civil restraint order which had been made by His Honour Judge Mitchell on 18^th August 2015.

The present application

11. By the new claim, Mrs Sartipy seeks to set aside or rescind the judgment of 9^th June 2011 in the service charge claim.
12. The new claim is based on the ground that the judgment was obtained by fraud. There are three reasons why it is alleged by the Defendants that this claim must fail. First it is not based on any new evidence; secondly, it would be an abuse of process to pursue the claim; and thirdly, there is no real prospect of showing the requisite dishonesty to set aside a judgment on the grounds of fraud.

New evidence?

13. There is one allegation of fraud in the Amended Particulars of Claim which alleges that Dejan Properties agreed a set-off or compromise in respect of arrears due when it was freeholder. The alleged fraud is that CCFC or CAD, their successors in title, knew of this set-off or compromise but failed to have regard to it when issuing the service charge claim.
14. The recent Court of Appeal authority in Takhar v Gracefield Developments Ltd [2017] EWCA Civ 147 establishes that in order to set aside a judgment on the ground of fraud, it must be shown that there is no new evidence which could not have been discovered with reasonable diligence in the earlier proceedings.
15. Mr Davis who appeared on behalf of Mrs Sartipy on this application and presented her case with a great deal of skill, pointed out that there was at least some controversy concerning the Takhar judgment in that permission to appeal has been granted by the Supreme Court and he submitted that there were other Court of Appeal authorities which suggested to the contrary.
16. Even if this were the case, in my judgment, I would be bound to follow Takhar, but in any event, the appeal in Takhar to the Supreme Court concerns, as I understand it, the requirement as to whether the new evidence could not have been discovered with reasonable diligence where fraud is alleged. Here, the Defendants' allegation is more basic. The Mr Armstrong submitted that there was simply no new evidence at all. There can be no suggestion that a claim to set aside a judgment on the ground of fraud can be based upon evidence which had already been adduced during the proceedings in which the judgment was given.
17. Ms Susan Fritsche, solicitor for the Defendants, has exhibited the documents in which Mrs Sartipy relies upon in support of her claim that there was a set-off or compromise. These comprise an offer made in an email which was allegedly sent on 16^th October 2006, acceptance of that offer in an email allegedly sent by Mr Ghassemian on 19^th October 2006 and a further email, allegedly sent on 26^th October 2007 from an employee of Dejan Properties, which is said to have acknowledged that agreement.These documents had already been relied on by Mrs Sartipy in previous proceedings commenced in 2008. They were exhibited to a witness statement made by Mr Ghassemian on behalf of Mrs Sartipy and therefore, it is not a case of the evidence not having been obtained with reasonable diligence. The evidence already had been obtained and, indeed, relied upon.
18. Mr Davis submitted that because the June 2011 judgment had been obtained as a result of non-compliance with an unless order, rather than a judgment on the merits following a trial, the case law concerning new evidence was not applicable. I disagree. I think it is, if anything, a more extreme case. The reason why Mrs Sartipy's allegations were not tested on that occasion is because she failed to comply with a court order. In these circumstances, I consider that the new claim fails the first hurdle in Takhar and on that ground alone, I would strike it out.

Abuse of process

19. I have also reached the clear conclusion that it is an abuse of process for these issues to be raised in the new claim. In particular, the alleged set-off was raised in the service charge claim in the defence filed by Mrs Sartipy, where those allegations were specifically put forward. Mrs Sartipy failed to comply with an unless order and her defence was struck out. She cannot now decide to have another try, by raising the same issues in further litigation.
20. In reaching this conclusion, I have also taken into account the long history of repeated attempts to re-litigate by Mrs Sartipy and Mr Ghassemian, who is, I have no doubt, the driving force behind all of this litigation. This is just one of many attempts to relitigate claims which have been dismissed. Therefore, to pursue it would be an abuse of process.

No reasonable prospect of success

21. This is the basis on which summary judgment is sought by the Defendants. I approach this ground with caution, bearing in mind that I am not conducting a mini-trial. This is an allegation of fraud and if there is any realistic case to go to trial, I will allow it to do so. I also bear in mind that on the other hand, there must be some basis for the very serious allegation of fraud.
22. In the present case, in order to set aside the judgment on grounds of fraud, Mrs Sartipy would have to show conscious and deliberate dishonesty, as was established by, for example, the case of Royal Bank of Scotland Plc v Highland Financial Partners LP [2012] EWHC 278.
23. The difficulty in the present case is that any dishonesty, insofar as it is alleged at all, arises not from the conduct of the Defendants in this case, but from their predecessors in title. It is not alleged that the Defendants entered into a set-off or compromise. It is not alleged that the Defendants had any personal knowledge of any agreement. Therefore, relevant knowledge would have to have been acquired through inquiries made of Dejan Properties and its solicitors.
24. In this regard, Ms Fritsche has explained in her evidence that she made inquiries and obtained information from Dejan Properties and its solicitors and from a Mr Denny of CAD in order to ascertain whether there was any genuine set-off or compromise. She explains that all the information that she received pointed strongly to the conclusion that there was no genuine compromise and the relevant correspondence had been fabricated by Mr Ghassemian. That, she thought, was particularly likely in the light of her knowledge that Mr Ghassemian had been guilty of dishonesty and fabricating documents in other cases concerning the Chatsworth Court property.
25. Mr Davis did not suggest that he would be able to allege at trial, that Ms Fritsche was dishonest. On the other hand, he suggested there was at least a case to go to trial as to whether she was reckless and if so, whether her recklessness was to be imputed to the Defendants.
26. Even if that were to be established, which is a point that I will come to in a moment, recklessness, in my judgment, is not enough. The test is conscious and deliberate dishonesty and it is conceded that there is no case to go to trial in which that allegation could properly be made.
27. However, having considered the evidence of Ms Fritshce, in particular at paragraphs 47 and 48, I consider that there is no arguable case that she was in any way reckless. On the contrary, it seems to me that on the basis of the evidence she has given, she behaved as a diligent solicitor and made appropriate inquiries, not just reaching her own conclusions on the documents, but also on the basis of information from Dejan Properties.
28. In those circumstances, I consider that I would also have granted the Defendants' application for summary judgment in the new claim, even if it were open to Mrs Sartipy to argue it, which it is not.