Scottish Court of Session Decisions

OUTER HOUSE, COURT OF SESSION

[2015] CSOH 124

A534/15

NOTE BY LORD GLENNIE

In the cause

ADEL BEN-AROUS AND ANOTHER

Pursuers;

against

LEILA MOUNIRA MEDIOUNI AND OTHERS

Defenders:

Pursuers:  Sanders;  Drummond Miller LLP

First Defender:  Party

9 September 2015

Introduction

[1]        On 27 July 2015, at a hearing in the Civil Vacation Court, I pronounced an interlocutor recalling both the arrestment on the dependence and the interim interdicts which had been granted against the defenders on 10 and 21 July 2015.  I found the pursuers liable to the defenders in the expenses of the action to date and remitted an account to the Auditor of Court to tax.

[2]        The pursuer has now lodged a reclaiming motion against my interlocutor.  I have been asked to prepare a Note explaining my decision and the reasons for it. 

The pursuers’ case

[3]        Details of the pursuers’ claim appear from the summons.  In summary, the first pursuer avers that he was engaged to be married to the first defender and, in anticipation of that marriage and at the request of the first defender, he (and the second pursuer, his sister) transferred money, shares and gold to the first defender.  The wedding was due to take place in January 2015 but was put off until March and then until May of that year.  In late April 2015 he discovered that earlier that month the first defender had married someone else to whom she had been engaged since 2013.  He concludes that the first defender never intended to marry him; and that she fraudulently induced him to make the payments and transfer the gold and shares to him by pretending that she intended to do so.  His claim is put primarily in fraud, with an alternative claim for unjustified enrichment.

[4]        I should mention certain averments in a little more detail because they featured in the argument before me.

[5]        In article 9 the pursuer avers that he transferred £24,000 to the first defender for the purpose of purchasing a taxi which they were to operate in business together after their marriage.  The taxi was purchased by the first defender for £48,000.  She transferred it to the third defender, a taxi business company which she controlled and which was managed by her together with the fourth and fifth defenders.  The company holds a City of Edinburgh Council taxi licence.

[6]        In article 10 he avers that, at his request, the second pursuer transferred her shareholding in the second defender (another taxi business owning a taxi cab worth around £40,000 and holding a City of Edinburgh Council taxi licence) to the first defender.  As a result, that company too is now controlled by the first defender.

Orders for diligence on the dependence and interim interdict

[7]        On 10 July 2015 the pursuers applied ex parte for the following order, which was granted by Lord Doherty: interim interdict against the first defender preventing her transferring, burdening or alienating her shares in either the second or third defenders (the two taxi business companies); interim interdict against the first, second, fourth and fifth defenders preventing them from transferring, burdening or alienating either of the two taxi cabs; and warrant for arrestment against all defenders on the dependence of the action.

[8]        On 21 July 2015 I granted ex parte a further motion by the pursuers, in effect extending to the third defender the interim interdict already granted against the first, second, fourth and fifth defenders in respect of one of the taxis.  It was explained that some error had occurred resulting in the third defender being omitted from the previous grant of interdict.

The hearing on 24 July 2015

[9]        The interlocutor of 10 July 2015 had assigned 24 July 2015 as the date for the hearing of the application under s.15K of the Debtors (Scotland) Act 1987.  At that hearing Mr Sanders appeared for the pursuers.  The first defender appeared personally.  The other defenders were not represented (the first defender being unable to speak for them) though the fourth and fifth defenders were personally present.

[10]      At that hearing, Mr Sanders accepted that on a s.15K hearing the burden lay on the pursuers to justify maintaining the arrestment on the dependence, not for the defenders to show that it should be recalled.  He took me through the averments in the summons.  He argued that the pursuers had shown a prima facie case and that, in all the circumstances, it was right that the protective diligence should remain in place.  He informed me that the arrestment was thought to have “caught” about £7,800 in a Bank of Scotland account.

[11]      The first defender then addressed the court.  She was nervous but highly articulate.  Reading, I think, from a prepared script, she presented an account of events quite different from that advanced by the pursuers.  I do not have a detailed note of precisely what was said – if my record is inadequate then no doubt a copy of the prepared script can be obtained from the first defender, or a note of it from counsel or solicitors for the pursuers – but the gist of it was that the first pursuer had been known to her family for some time.  She had first met the first pursuer in 2013.  After – and she emphasised that it happened after she had bought the taxis – after she had bought the taxis their relationship developed.  They contemplated marriage.  However she came to regard him as controlling and aggressive.  She discovered that he was older than she had been led to believe.  She discovered that he had been married twice before.  Her feelings towards him changed.  They were never engaged and there were no gifts.  That was all fantasy. 

[12]      I was persuaded that, although I obviously could not decide who was right and who was wrong at a hearing of this sort, there was at least a potentially credible alternative to the pursuers’ account.  It was not a case where I could say that the potential defence appeared shadowy or lacking in substance.

[13]      That, of course, would not in itself be sufficient to dispose of the motion.  It would still be possible for the pursuer in those circumstances to say that, whatever might be the ultimate outcome, he had shown at this stage a sufficiently arguable case to justify the grant of diligence on the dependence of the action and/or interim interdict.

[14]      What concerned me, however, was that it emerged from what the first defender told the court that the pursuer had in fact taken the law into his own hands in April of this year.  Without any pretence of justification, he had taken the taxi referred to in article 10 (Registration SF03 OFS) belonging to the second defender.  Its whereabouts were unknown to the defenders.  He had done this in April 2015, well before the application to the court in July 2015 for relief, an application which nonetheless included a claim for interdict to prevent the defenders transferring, burdening or alienating that taxi.  When I asked Mr Sanders about this, he told me, after taking instructions from his client, that this was true.  He could offer no good explanation for this behaviour, it being accepted by his client that the taxi belonged to the second defender.  It was unclear whether the first pursuer personally had been operating the taxi, but his conduct had certainly deprived the second defender of its opportunity of doing so.

[15]      It further emerged from the first defender’s submissions that the first pursuer had not only taken the taxi but had also, by whatever means, procured that the records for the second defender in Companies House had been altered so as to show that he was a director of that company (when in fact he was not) and that the other directors had resigned (which they had not).  He had also signed a false declaration as part of an attempt to become a licensed taxi operator for that taxi.  After taking instructions, Mr Sanders accepted that the first pursuer had indeed acted in these ways, though the entries had later been reversed.  No justification was advanced.

[16]      I expressed my concern to Mr Sanders both as to the fact of the first pursuer’s behaviour and as to the fact that his conduct had not been revealed to the court at the time of applying for the orders ex parte, having regard to the duty of candour placed upon an applicant for interim relief, especially when the other side was neither present nor represented.

[17]      After some discussion, Mr Sanders asked me to continue the case for a week to enable him to obtain full instructions.  I agreed to continue it only until the following Monday, 27 July 2015.  I agreed to do so on terms that I would meanwhile ordain the pursuers to return forthwith the taxi which they had taken and that I would recall the warrant of arrestment to the extent of releasing £5,000 to the first defender to enable her to obtain legal representation in connection with the defence of the action.  I pronounced an interlocutor in those terms.

The hearing on 27 July 2015

[18]      The case called before me again mid-morning on Monday 27 July 2015.  Mr Sanders informed me that the taxi had been returned on the previous Friday evening at about 6.30pm – the first defender said that it had been returned in bad condition and was not functional but clearly I could not resolve that matter. 

[19]      Mr Sanders suggested that the appropriate course might be for the pursuers not to press their s.15K application for arrestment on the dependence of the action on the basis that the interim interdicts remained in place.  He accepted, candidly, that although the present hearing was fixed as a s.15K hearing, it would be unrealistic to contend that the court could not deal with the interdicts on the basis of the submissions it had heard.

[20]      I formed the view that in light both of what had emerged about the conduct of the first pursuer and of the fact that the court had not been told about this at the time he applied ex parte for warrant for arrestment on the dependence and for interim interdict, the orders granted by the court on 10 and 21 July should be recalled. 

[21]      As I explained to Mr Sanders, these matters impacted upon my decision in three quite separate ways.  First, the substance of the first pursuer’s conduct – which not only involved taking the taxi belonging to the second defender but also involved the making of false representations to alter the records that Companies House – seemed to me to cast significant doubt upon his credibility and reliability; so much so that, having regard to the account given to me by the first defender in her submissions, I could not accept that the pursuers had demonstrated any good arguable case sufficient to warrant the continuation of those interim orders.  Secondly, the grant of interim orders is discretionary.  The applicant must come to court with “clean hands”.  It seemed to me that I was entitled to take into account the first pursuer’s conduct, which was certainly unlawful if not downright dishonest, as a reason for refusing the interim relief he sought.  Thirdly, it is well-established that a party applying ex parte for interim relief, whether in the form of diligence on the dependence or by way of interim interdict, is a duty of candour.  He must disclose everything which might be relevant to the exercise of the discretion in his favour.  While non-disclosure will not necessarily result in the orders which he has obtained being set aside, that is certainly one possibility.  Combined with the other matters to which I have referred – both the doubts as to the first pursuer’s credibility and reliability and the fact that he did not come to court with clean hands – it seemed to me sufficient in this case to justify recalling the orders granted on 10 and 21 July 2015.

[22]      I explained this orally to Mr Sanders.  He sought an opportunity to take instructions, which I granted.  When he returned to court he told me that he was no longer instructed in the case – he emphasised that he had not refused to act but that his instructions had been withdrawn.  Since I had finished hearing submissions it did not seem necessary for me to do anything further other than formally to indicate my decision.

Disposal

[23]      My interlocutor of 27 July 2015 is, I think, self-explanatory.  So far as concerns the recall of the warrant for arrestment against each of the defenders, there is no requirement for any motion to be made on behalf of the defenders.  Since the onus lay on the pursuers to justify continuation of the warrant for arrestment on the dependence, and they had failed to satisfy me that it was appropriate to continue it, I recalled the warrant for arrestment in respect of all the defenders.  So far as concerns the interim interdicts, the first defender, at my invitation, moved the court to recall the interim interdicts granted against her.  I granted that motion.  She had no locus to make a similar motion on behalf of the other defenders, but since the points that arose in respect of the other defenders were identical to those that arose in respect of her, it seemed to me that I ought ex proprio motu to recall the interim interdicts granted against them, and I did so.

[24]      So far as concerns expenses, the only activity in this action to date, apart from the drafting of the Summons, had been the hearings of 10, 21, 24 and 27 July 2015.  In those circumstances it seemed to me that the appropriate order was to award the whole of the expenses of the action to date to the defenders.

[25]      I should acknowledge with gratitude the candour with which Mr Sanders made his submissions and the courtesy and assistance which he extended to the first defender.  It is not clear to me where the fault lies for the failure on the part of the pursuer to display the openness expected of a litigant moving the court to make an order in the absence of the other party, but I should note that Mr Sanders did not appear before the court on the occasions on which the ex parte orders were granted.