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CHARLES SAMEK QC AND JAMES MCWILLIAMS SUCCESSFULLY OPPOSE APPLICATION TO OVERTURN JUDGEMENT AND W.F.O

Charles Samek QC and James McWilliams have been successful in resisting an application to overturn a default judgment and worldwide freezing order.

Sheikh Saoud Bin Abdullah M. Al-Thani v Ayad Najib Affat & Ors [2015] EWHC Ch

Charles Samek QC and James McWilliams, acting for a member of the Qatari Royal Family, successfully resisted an application by a defendant in a substantial fraud claim to set aside orders made against him over the course of more than a year including a worldwide freezing order, bench warrant and judgment in default. Charles Samek QC and James McWilliams were instructed by Mark Brassey of Child & Child (formally of Blake Morgan).

Facts

The Claimant, a member of the ruling family of Qatar, fell victim to a fraud in 2011 whereby he was convinced by the Defendant that it would be advantageous to him to transfer his valuable property in London to a company incorporated in the BVI that would be owned and controlled by him and his children. Unbeknownst to the Claimant, however, the property was in fact transferred to a company with the same name in this jurisdiction wholly owned and controlled by the Defendant. Having successfully obtained title to the Claimant’s property, the Defendant without the Claimant’s knowledge then obtained a substantial loan secured on the Claimant’s property and disappeared with the proceeds. The Claimant only discovered what had happened when, in 2014, the Defendant defaulted on the loan and the lender sought to enforce its security against the Claimant’s property.

Over the course of 2014, the Claimant sought and obtained a series of orders against the Defendant in the Chancery Division including a worldwide freezing order, a proprietary injunction, a passport and tipstaff order, and the issue of a bench warrant. The Defendant’s only response to the proceedings was an email in February 2014 following service of the freezing order asserting that he was stuck in Iraq and unable to comply. Absent a defence or acknowledgment of service from the Defendant, the Claimant sought and obtained judgment in default in June 2014.

Nothing more was heard from the Defendant until, in May 2015, he was arrested pursuant to the bench warrant at Gatwick Airport returning from a trip to Spain. Shortly after his apprehension, the Defendant made an application to set aside all of the orders that had been made against him in the proceedings and, in particular, the judgment in default.

The application was made on the basis that he had been unaware of the proceedings and that he had a real prospect of successfully defending the claim. His defence was, essentially, that all of the steps he had taken had been with the Claimant’s full knowledge and consent. He relied on a series of conversations and meetings said to have taken place with the Claimant and documents said to evidence a longstanding business relationship with the Claimant.

Judgment

Snowden J dismissed the Defendant’s application, holding that:

  • The Defendant’s evidence that he had had no knowledge of the proceedings could not be accepted. The Defendant had plainly known of the proceedings in February 2014 but had done nothing to set aside the judgment in default until June 2015 and even then, only after he had been arrested. In the circumstances, the delay in making the application was such the prospects of the Defendant’s defence would have to be very strong for the court to exercise its discretion and set aside the judgment.
  • The defence which the Defendant sought to advance at the hearing, however, was not one with any real prospect of success. That was a finding the Court was entitled to make on the material before it even in circumstances where the claim was in fraud and the Defendant had raised numerous disputes of fact: ED&F Man Liquid Products Ltd v Patel [2003] EWCA Civ 472 and Wrexham Associated Football Club v Crucialmove Ltd [2007] BCC 139 considered.
  • The Defendant’s defence was wholly inconsistent with the contemporaneous documents available to the Court and, in material respects, the Defendant’s own previous assertions. It could not be believed. The evidence and documentation pointed to the inference that the Defendant was engaged in a dishonest scheme to defraud the Claimant.

Comment

The case is a useful reminder that the Court will not always accede to an application to set aside default judgment (or refuse to enter summary judgment) simply because the defendant raises disputes of fact on a claim in fraud which, ordinarily, the Court would wish to test by means of oral evidence at a trial.

The Court will look at the totality of the material before it and, if what is said by the defendant cannot be accepted, whether because of its inherent implausibility or its inconsistency with the contemporaneous documents, then the Court can and will find that a defendant has no real prospect of defending the claim.

Posted: 11.12.2015 at 12:12
Tags:  Cases  Commercial Law
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