Ahmad v Wood & Anor, Court of Appeal - Queen's Bench Division, May 11, 2018, [2018] EWHC 996 (QB)

Resolution Date:May 11, 2018
Issuing Organization:Queen's Bench Division
Actores:Ahmad v Wood & Anor
 
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Neutral Citation Number: [2018] EWHC 996 (QB)

Case No: C40MA070

IN THE HIGH COURT OF JUSTICE

THE BUSINESS AND PROPERTY COURTS IN MANCHESTER

CIRCUIT COMMERCIAL COURT (QBD)

Manchester Civil Justice Centre

1 Bridge Street West

Manchester M60 9DJ

Date: 11th May 2018

Before:

HIS HONOUR JUDGE EYRE QC

(sitting as a Judge of the High Court)

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Between:

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Mr. Daniel Metcalfe (instructed by Schofield Sweeney LLP) for the Claimant

Miss. Siân Mirchandani (instructed by Mills & Reeve LLP) for the Defendants

Hearing dates: 26th March 2018

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Handed down: 11th May 2018 Page 14

HH Judge Eyre QC:

Introduction.

  1. In 2010 the Claimant was engaged in matrimonial proceedings with his former wife, Farzana Riaz. The Claimant was resisting the claims for financial and ancillary relief being made by Mrs. Riaz. The First Defendant is a solicitor and the Second Defendant was a solicitors' firm consisting of the First Defendant and Mark Higgins. From May 2010 the First Defendant and, potentially the Second Defendant, acted for the Claimant in the matrimonial proceedings. Those proceedings concluded with a hearing before District Judge Khan on 5th - 7th October 2010. District Judge Khan handed down judgment on 1st November 2010 and on that date he ordered, inter alia, that the Claimant pay Mrs. Riaz a lump sum of £465,000.

  2. The Claimant says that the Defendants' conduct of those proceedings and their advice to him in respect of them were negligent and/or in breach of the terms of their engagement. He says this negligence and/or breach caused District Judge Khan to award the lump sum of £465,000 and that but for the Defendants' default the lump sum award would have been no more than £150,000 (the amount which the Claimant had offered to pay Mrs. Riaz). The Claimant seeks damages of £1,174,204.71 being the difference between £150,000 and £465,000 together with various amounts which the Claimant seeks to recover as consequential losses caused by the Defendants' failings.

  3. The Defendants have applied for the striking out of the claim pursuant to CPR Pt 3.4 (2)(b) on the footing that it is an abuse of process by reason of being a collateral attack on the decision of District Judge Khan or (in respect of the damages claim) as not disclosing reasonable grounds for bringing the claim. Alternatively, they seek summary judgment pursuant to CPR Pt 24.2 on the footing that the Claimant has no real prospect of success.

    The Matrimonial Proceedings and the Claim now made by the Claimant.

  4. The proceedings between the Claimant and Mrs. Riaz were acrimonious and vigorously contested. In the course of the marriage a portfolio of over 30 properties had been acquired. District Judge Khan had to decide issues such as the ownership of shares in a company; whether the Claimant was in a partnership with his brother; the assets of any such partnership; and the ownership (as between the Claimant and his brothers) of two further properties. There were further questions and the Claimant says that it was these which were ultimately the most important ones. In that regard the District Judge had to determine the level of equity in the property portfolio; the income generated by that portfolio; and the funds available to the Claimant from which provision could be made for Mrs. Riaz.

  5. The Claimant and Mrs. Riaz were both cross-examined at the hearing in front of District Judge Khan. In his judgment the District Judge explained that he had found Mrs. Riaz to be ``an honest and straightforward woman doing her best to assist the court''. His conclusions in respect the Claimant's evidence were rather different. At [13] District Judge Khan said that:

    ``...When giving his evidence [the Claimant] was evasive [and] argumentative. His evidence was inconsistent and contradictory and sometimes simply improbable and, at other times, incoherent. His litigation conduct was consistent with a litigant who wished to hide his assets, to obfuscate and attempt to confuse. In terms of his relationship with Mrs. Riaz the impression that I informed (sic) of [the Claimant] was that he is, frankly, a bully seeking to control or dominate Mrs. Riaz....''

  6. The District Judge set out, at [14] - [26], a ``number of examples'' which had led him to that conclusion in respect of the Claimant's credibility stating that the examples were ``illustrative and not exhaustive''. At [15] - [22] District Judge Khan identified a number of apparent inconsistencies or improbabilities in the account given by the Claimant. At [23] he referred to the absence of supporting evidence from those family members and friends to whom the Claimant had asserted that he owed money. At [24] the District Judge listed seven aspects of the way in which the Claimant had given his evidence which caused him to form the view that the Claimant was being evasive in that evidence. At [25] he listed five matters which he regarded as ``litigation conduct'' indicative of such evasiveness. Finally, at [26] the District Judge listed seven matters on which he relied in reaching his conclusion that the Claimant was a bully seeking to control Mrs. Riaz.

  7. It was in the light of those findings as to the credibility of the respective parties that the District Judge made further findings as to the assets available and their value. He concluded, at [37], that the portfolio had a net equity of £369,732. At [42] the District Judge found that a surplus annual income of £142,325 available to the Claimant was generated by the portfolio. That finding followed from his acceptance of the submission from Mrs. Riaz's counsel that the annual rent receivable was £272,000 (with some further expenses to be deducted) with an annual cost by way of mortgage payments of £115,200. At [46], District Judge Khan found that the Claimant had further resources available to him which had not been disclosed to the court. The District Judge based that finding in part on his conclusion that the Claimant had been obstructive in his approach to the court and also by reference to the discovery of a bank account which had not been disclosed by the Claimant. The finding appears, however, to have been substantially based on the District Judge's prior finding that the property portfolio generated a substantial income surplus. Thus he said ``I infer, therefore, that the surplus I have identified above [a reference to the finding at [42]] has been available to him for some time and I infer that he will have deposited that surplus somewhere''.

  8. Earlier in his judgment the District Judge had recited his analysis of the matters set out in Section 25 of the Matrimonial Causes Act 1973. It was in the light of that analysis and his conclusions as to the parties' assets that District Judge Khan concluded that the Claimant should pay a lump sum of £465,000 together with paying the school fees and reasonable expenses of the parties' three children until each child concluded his or her secondary education.

  9. The Claimant's case in the current proceedings is that the true financial position is that there was no equity (or at least no significant equity) in the property portfolio nor any significant surplus income let alone any hidden resources. He says that in those circumstances his offer of a payment of £150,000 to Mrs. Riaz was an appropriate, indeed a generous, one and that but for the negligence of the Defendants that was the sum which would have been awarded.

  10. The Particulars of Breach on which the Claimant relies are set out at paragraph 32 of the Particulars of Claim. There are sixteen respects in which the First Defendant and/or the Second Defendant (acting by the First Defendant) are said to have been negligent and/or in breach of the terms of the engagement. Those particulars can be grouped into three broad categories although there is considerable overlap between those categories. First, there are alleged failures of advice with the First Defendant negligently having stated that the matter was straightforward; that a lump sum was unlikely to be awarded because the Claimant's liabilities exceeded his assets; that a witness statement was not needed; and that there was no need to engage counsel to represent the Claimant. Second, there are failures of preparation with the First Defendant being alleged to have been at fault in failing to cause the Claimant to obtain further detailed evidence of his assets and liabilities and supporting evidence from his creditors. Additionally, in this regard, the witness statement prepared by the First Defendant is said to have included inaccuracies originating from the First Defendant and not from the Claimant. Third, the First Defendant's advocacy on behalf of the Claimant is said to have been negligent. It is alleged that he failed to explain to the District Judge that the procedural breaches were the result of his inaction and/or advice to the Claimant rather than being the responsibility of the Claimant. The Claimant's case is that the ``litigation conduct'' which had been a factor in the District Judge's conclusions as to the Claimant's credibility had been the result of the First Defendant's actions and not voluntary conduct on the part of the Claimant. It is also said that at the hearing the First Defendant failed to ensure that the District Judge appreciated the true reason for the reduction in...

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