England and Wales High Court (Queen's Bench Division) Decisions

“For the avoidance of doubt the [Trust] does not seek, by way of remedy, to have the Notice of Acceptance set aside and/or to withdraw its Part 36 Offer. The [Trust] seeks damages in the tort of deceit, including on an exemplary basis, on account of the fraudulent misrepresentation.”

i)                    error in finding that the principle of affirmation did not apply to Part 36 settlements having found that the test for affirmation was satisfied;

ii)                  error in finding that the Part 36 settlement could not be affirmed in a claim which contended fraud, on the basis that fraud “unravels all”;

iii)                having found that there was an abuse of process, error in holding the Trust should be permitted, in the absence of any explanation, to amend its claim. Further, the decision to permit the claim to continue having determined it as an abuse of process sufficient to strike it out was irrational and/or one which no reasonable judge could have made; and

iv)                error in concluding that the claim in deceit was properly particularised.

    II.            The Facts

24 November 2017  Trust’s Part 36 offer of £75,000.00.

26 March 2018         Mr. Kasem’s Solicitors confirmed, with service of their client’s updated Schedule of Special Damages, that their client’s ‘…condition has not altered from that which was set out in the report served with his Particulars of Claim’.

3 April 2018             Mr. Kasem’s Part 36 offer of £250,000.00.

11 May 2018                     The Trust requested release of DWP records, together with personnel papers from Dial A Flight (Mr. Kasem’s employer).

14 May 2018                     The Trust requested that Mr. Kasem disclose full and un-redacted bank statements, only partial disclosure having been provided.

16 May 2018                     The Trust’s Solicitors repeated its request for disclosure of bank statements, with the comment that - ‘on the basis of the evidence as it currently stands, my client is unable to properly consider its position on the issue of quantum or indeed, the Claimant’s recent Part 36 offer of £250,000.00.  Please provide all items sought within 28 days hence - i.e. by 13 June 2018.  In the event that you have not complied with the Defendant’s request by that date I will take instructions on an application for specific disclosure’.

24 May 2018                     Mr. Kasem provided authority for release of Dial A Flight records.

30 May 2018                     The Trust learned for the first time of a successful claim against his former employers by Mr. Kasem. This was in light of clarification being sought from Dial A Flight as to whether the papers for disclosure should include those relating to a claim against them.

20 June 2018                     The Trust’s Counter Schedule of Loss and condition and prognosis evidence was served.

28 June 2018                     Mr. Kasem’s Solicitors confirmed that their client, would provide a form of authority for release of papers relating to the claim against Dial A Flight.

28 June 2018                     Partial disclosure of bank statements was provided by Mr Kasem.

4 July 2018                        The Trust confirmed that it would pursue an application for specific disclosure in the absence of full disclosure. 

4 July 2018                        Mr. Kasem’s Solicitors requested further time in relation to disclosure, his solicitors confirming that they were reviewing PDF documents from their client.

4 July 2018                        Mr. Kasem accepted Part 36 offer of £75,000.00 out of time, no further disclosure having been effected.

20 November 2018 The present fraud claim was issued by the Trust, it having not paid settlement sum.

21 January 2019       The original claim was stayed until further order pending resolution of the fraud claim.

21 March 2019         Defence.

23 May 2019            Reply to Defence.

“3.         In paragraph 4 of the particulars of claim in these proceedings, the claimant pleaded that it was not seeking to set aside the Part 36 offer in the Original Action. On 17 October 2019, I heard the defendant’s application to strike-out the claimant’s claim on the basis that the particulars of claim disclosed no reasonable grounds for bringing the claim and/or that the particulars of claim were an abuse. Without rehearsing the arguments advanced by Mr Roberts for the claimant and Mr Daniels, who appeared for the defendant on that date, I was satisfied that, on the pleaded case, the case should be struck-out pending any further application by the claimant. I, accordingly, ordered: (1) the claim is struck-out subject to any application by the claimant to amend its claim, such application to be made no later than 4.00pm on 15 November 2019, with a copy of the proposed amended particulars of claim, and be reserved for Her Honour Judge Baucher; (2) any consequential application made in claim C74YJ879 is also to be made no later than 4.00pm on 15 November 2019; (3) the defendant has liberty to file and serve a draft amended defence by 4.00pm on 29 November 2019.

4.  Pursuant to that order, the claimant issued its application dated 15 November 2019 which reads: ‘What order are you seeking? An order in the attached form to reinstate the claim, amend the particulars of claim and for the proceedings to be case managed together with claim C74YJ879.’ and in the C74YJ879 action; ‘An application that an order for these proceedings to be case managed together with claim E03CL370 and preventing the claimant from entering judgment against the defendant pending the outcome of claim E03CL370.’.

5.  The claimant now seeks to amend its particulars of claim and within the embodiment of the revised pleading, seeks to set aside the Part 36 compromise; to have the original action case managed and tried thereafter; and seeks damages in the tort of deceit.”

 III.            The Particularisation Issue

“16. It is the position of the Claimant [the Trust] that:

a.       Substantively the Defendant [Mr Kasem] contrived to present fabricated and/or exaggerated heads of damage and accordingly fraudulently misrepresented the true level of his claim. Specifically it is alleged that the Defendant has fundamentally sought to mislead the Claimant and/or the Court in relation to his claim for personal injury and/or associated special damages in particular alleged lost income, credit card interest and loss of rental income; and

b.      Procedurally the Defendant has:

                                                                                i.            Failed to effect disclosure and/or deliberately effected misleading and/or incomplete disclosure of relevant documentation which he must have known was harmful to his case;"

                                                                              ii.            Endorsed his statement with a Statement of Truth seeking to support claims which he knew were fabricated and/or exaggerated.

Particulars of the Claimant's position

17. The Claimant is now in receipt of evidence which confirms:

a.       The Defendant is not in truth suffering from physical symptoms to the extent alleged, for example:

                                                                                i.            On one occasion, whilst working at Virgin Gyms, social media confirms he assisted in the lifting of an individual into a swimming pool.

                                                                              ii.            It has also been confirmed that the Defendant has, on at least one occasion, participated in boxing sparring, featuring on Youtube as part of, it seems, a promotional campaign.

b.      The Defendant has misled the Court about his social life. In addition to enjoying nine foreign holidays over a four year period from 2013, he also attended the Coachella Music Festival in July 2016.

c.       The Defendant is not impecunious. In addition to his foreign holidays, it is equally clear from the partial disclosure of bank statements that there are other accounts in the name of the Defendant. Specifically, they make reference to a transfer of £120,000.00 on 30 September 2014 to a separate account which remains undisclosed. The Defendant's accounts also reveal that between February 2015 and February 2017 he paid £650 per month for rent on a property at WA11 1AR. It is inconceivable that this rent was for the sofa at his friend's residence as he has alleged”.

“50. This then leaves the outstanding aspect of the pleadings. The central thrust of Mr Daniels’ attack related to the inadequacy of the pleadings. He submitted that there are only two particularised allegations which, on their face, were insufficient to establish fraud and the other paragraphs were of a generic nature. Indeed, he went so far as to invite me to strike-out the proceedings, presumably under CPR 3.4, or to give summary judgment.

51. In contrast, Mr Roberts submitted that the pleadings set out a clear case that the defendant fabricated or exaggerated the nature and extent of his claim for damages. He submitted the examples cited provide strong evidence to support the claimant’s case that it was induced to make the Part 36 offer.

52. I have given careful consideration to the respective arguments and in so doing, I have considered the statements of Mr Navsaria, Ms Bagnall and, in fairness to Mr Daniels, given the absence of any further oral submissions, the proposed draft amended defence. Mr Navsaria attacks the focus of the pleadings on paragraph 22 onwards of his statement. In the main, the perceived deficiencies are maintained in the proposed amended pleading. Whilst there is a robust assault on the particulars of claim, I do not consider the claimant is required to set out each and every aspect, but such particulars so that the defendant knows the case it is expected to meet.

53. I am satisfied that, in the words of May LJ in Lipkin Gorman v Karpnale Ltd [1998] 1 WLR 1340, that, ‘Where fraud or dishonesty is material, this must be clearly pleaded, if not explicitly, then in such terms that the reader of the pleadings can be left in no reasonable doubt that this is being alleged.’.

54. I am satisfied that, standing back and considering the pleading as a whole, the defendant can be in no doubt as to the substance of the allegations as per paragraphs 3 and 16-18. I, accordingly, decline to strike-out the pleadings and/or grant summary judgment.”

i)                    Paragraph 16a, whilst suggesting that it is setting out specifics, is in fact generic in terms. Paragraph 16b is not an allegation of fraud, but a complaint about the manner in which the clinical negligence case was progressed.

ii)                  Paragraph 17a refers to two minor incidents which it is suggested contradict the evidence in Mr Kasem’s witness statement but it does not particularise why this means he was fraudulent.

iii)                Paragraph 17b suggests Mr Kasem misled the Trust as to his social life in that he took a number of holidays. It is impossible to understand this in the absence of any explanation as to why this led to the Part 36 offer being made.

iv)                Paragraph 17c is an assertion that Mr Kasem was untruthful about his impecuniosity but again fails to set out how this led to the Part 36 offer being made or made in the sum that was accepted.

v)                  Of particular concern is the use of the phrase “for example” in paragraph 17b which suggests the Trust intends to rely on further allegations which it has not particularised. That this is the intention is confirmed in paragraph 7b of the Trust’s skeleton argument below on the amendment application which stated:

“Further, it is inappropriate, within a Particulars of Claim, to recite each and every piece of evidence upon which the Claimant intends to rely. This would fly in the face of common sense. A pleading is there to set out the framework of the case, not provide a checklist which forewarns the Defendant for cross examination. It is worthy of note that in the substantive action, there would be no obligation on the Defendant NHS to plead fraud at all, per Howlett v Davies [2017] EWCA 1696.”

i)                    A representation of fact made by words or by conduct and mere silence is not enough;

ii)                  The representation was made with knowledge that it was false, i.e. it was wilfully false or at least made in the absence of any genuine belief that it was true or made recklessly, i.e. without caring whether the representation was true or false;

iii)                The representation was made with the intention that it should be acted upon by the claimant, or by a class of persons which will include the claimant, in the manner which resulted in damage to him;

iv)                The claimant acted upon the false statements; and

v)                  The claimant has sustained damage by so doing.

i)                    The precise representations made by Mr Kasem in the course of his civil claim (and whether they were express or implied);

ii)                  The precise respects in which representations made by Mr Kasem were factually false;

iii)                The state of knowledge of the Trust at the point of making the Part 36 offer and how the Trust relied upon the representations;

iv)                The material received by the Trust subsequent to the acceptance of the Part 36 offer which showed that Mr Kasem had provided false information, identifying when such information was received and the precise respects in which the information subsequently received showed the falsity of the representations; and

v)                  The facts relied upon to the effect that Mr Kasem made the representations knowing the same to be false and/or reckless as to the truth of the same.

 IV.            Additional Grounds of Appeal

“As regards the matters relating to affirmation, if that were the only issue, the Court would refuse permission to appeal on the basis that the originally pleaded case appeared to be saying that sufficient relief could be obtained through damages. The Judge understandably said that the appropriate relief was a setting aside, and permitted that to be done. As the case appears presently, the detailed jurisprudence about whether there is an analogy with affirmation does not advance the matter. If a claim in deceit is to proceed, the only question was the form of the relief. It is doubtful that the analysis or analogy of affirmation is probative: if it is, there may be no reason why it could not be withdrawn absent injustice, as an admission can be withdrawn and similarly a court of equity can in an appropriate case in the exercise of its discretion overlook ‘discretionary’ bars to rescission.”

“42.       The instant case is not one where a judgment has been obtained, nor yet where fraud has been established. However, based on the principles expounded by the higher courts in both Hayward and Takhar, I consider that to find that the claimant was not entitled to amend its proceedings and seek to set aside the Part 36 settlement, would be an affront to the administration of justice.

43. I do not consider that the proceedings should remain struck-out as per paragraph 1 of my order of 17 October 2019. I am satisfied that the proceedings are not an abuse of process, as the proceedings no longer maintain that the Part 36 settlement remain and that the settlement was improperly induced, which was clearly inconsistent. I am not persuaded by Mr Daniels’ submission: ‘ that the claimant should not simply be permitted to alter its pleaded case, having wrongly and deliberately chosen to previously plead its claim in an abusive way, for its own advantage and to the defendant’s prejudice.’

…”

    V.            Conclusion