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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.

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