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The Arab Monetary Fund v Jawad Mahmoud Hashim and Others


In the Supreme Court of Judicature Court of Appeal (Civil Division) On Appeal from the High Court of Justice Chancery Division 4 March 1993

1993 WL 13725794
Lord Justice Balcombe Lord Justice Simon Brown and Mr. Justice Peter Gibson Thursday, 4th March 1993

Representation
MR. PAGE (instructed by Messrs Landau and Scanlan) appeared on behalf of the Applicants(Defendants). MR. CHARLES FLINT (instructed by Messrs Freshfields) appeared on behalf of the Respondent (Plaintiff).

JUDGMENT (Approved)
LORD JUSTICE BALCOMBE: I will ask Lord Justice Simon Brown to deliver the first judgment. LORD JUSTICE BROWN: This is an application by the first, second and eleventh defendants (hereafter the defendants ) for leave to appeal to argue a highly technical point under Order 27, rule 4 of the Rules of the Supreme Court. The decision sought to be appealed is an interlocutory ruling of Mr. Justice Chadwick given on 21st January 1993, the seventh working day of a very substantial action which is still continuing and is, we understand, expected to last until after Easter. In a sentence the defendants seek to argue that the judge was wrong to have held the plaintiffs in time with regard to serving a notice under Order 27, rule 4(2) , not admitting the authenticity of certain specified documents which the defendants have disclosed and desire to use in evidence at the trial. The defendants would then, presumably seek to contend that these disputed documents must, in the result, be treated for all purposes as authentic despite the plaintiffs having long since plainly indicated that this was in issue and, indeed, despite both sides experts having agreed too that some at least of the documents have been forged. This application can, I believe, be dealt with very shortly and without delving deeply into this highly complicated dispute. The plaintiffs' claim in a nutshell is that the first defendant, who held office as their first Director General between 1979 and 1982, used that position to engage in large scale fraud, in particular by misappropriating their funds. For present purposes it is unnecessary to elaborate upon that or indeed describe the various categories of documents whose authenticity the plaintiffs seek to challenge and their particular significance in the action. Instead I come directly to the point at issue and at once read Order 27, rule 4 , which is in these terms: (1) Subject to paragraph (2) and without prejudice to the right of a party to object to the admission in evidence of any document, a party on whom a list of documents is served in pursuance of any provision of Order 24 shall, unless the Court otherwise orders, be deemed to admit -

(a) that any document described in the list as an original document is such a document and was printed, written, signed or executed as it purports respectively to have been, and (b) that any document described therein as a copy is a true copy. This paragraph does not apply to a document the authenticity of which the party has denied in his pleading. (2) If before the expiration of 21 days after inspection of the documents specified in a list of documents or after the time limited for inspection of those documents expires, whichever is the later, the party on whom the list is served serves on the party whose list it is a notice stating, in relation to any document specified therein, that he does not admit the authenticity of that document and requires it to be proved at the trial, he shall not be deemed to make any admission in relation to that document under paragraph (1). As the commentary to the rule in the Annual Practice points out, its object is to achieve where possible the effect of a notice to admit documents without putting the parties to the trouble and expense of serving such a notice and also to encourage admission. The draftsman would, I suspect, have been astonished to discover the sort of trouble and expense involved in determining the application of the rule in the present circumstances. I come briefly to the history and circumstances of the present application. The documents in question were disclosed in various supplemental lists served by the appellant defendants on 1st July 1992. The great majority, at least, of these documents were inspected by the plaintiffs' solicitors on 9th July. The following day those solicitors wrote to the solicitors for the first defendant pointing out that although many of the documents had been listed as originals, they had in fact turned out to be copies. A good deal of correspondence followed, and I touch on a very small part of it only. On 11th August 1992 the plaintiffs' solicitors carried out a further inspection of the documents. By letter dated 19th August 1992 the defendants' solicitors wrote: We will prepare a revised supplementary list of documents properly describing the disclosed documents as originals or copies. Throughout this period the plaintiffs' solicitors were expressly reserving their rights Order 27, rule 4 , making clear their view that inspection had not been completed and that time for serving a notice under Order 27, rule 4(2) had not started to run. The defendants' solicitors for their part were contending the contrary. On 11th September the plaintiffs issued a summons for the production of a revised list. On 28th September that summons, together with a number of other applications, came before Mr. Justice Hoffmann (as he then was). His decision on the application was this: I think that an order in terms of paragraph 1, despite what has happened and despite Landau & Scanlon's letter - They, I interpolate, are the solicitors acting for these defendants is taking a sledgehammer to crack a nut, to require Dr. Hashim to go through the whole list and say which of them are originals and which of them are copies. I do not think that it really prejudices the AMF in deciding which documents they are going to challenge as to authenticity to be given such an affidavit in advance. If they are in any doubt about the matter, then they can challenge. When that has been done, then it will be possible to go into the question of whether the documents are original or copies, because obviously once authenticity is in issue, then the question of which is the original will become relevant. But if authenticity is not in issue, then it really does not matter whether the document before the court is a copy or an original.

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It seems plain to me, from the terms of that ruling, that Mr. Justice Hoffmann himself clearly regarded it as still open to the plaintiffs to challenge the authenticity of whatever documents they chose to dispute, and consistent with such an understanding, they duly on 7th October served an Order 27, rule 4(2) , notice specifying a total of 31 documents. Although the defendants immediately then contended that the notice was out of time, when a month or so later there was a pre-trial review of this action before Mr. Justice Chadwick, no objection was raised by them nor any ruling sought upon the point. True, the matter was not raised by the plaintiffs either. But, as it seems to me, the defendants at that date cannot have failed to realise that the plaintiffs remained intent upon challenging these documents. In the event no point was raised by the defendants as to the plaintiffs' right to maintain their challenge until, as stated, the trial itself was under way and the case was being opened. Mr. Justice Chadwick ruled the notice in time, essentially on this basis, and I cite only a short paragraph from his judgment: In my view, the true effect of Order 24, rule 9 , and Order 27, rule 4(2) is that the time limited for inspection of documents specified in a list which is acknowledged to be a defective list does not start to run until defects in the list have been remedied or the court has decided that no remedy is to be ordered. On that approach, the judge concluded that time began to run only at the date of Mr. Justice Hoffmann's decision on 28th September so that the 7th October notice was well within the three week period provided for under rule 4(2) . Against that ruling that the notice had been served within the time limit specified, Mr. Justice Chadwick refused the defendants leave to appeal. Should we ourselves grant such leave? In my judgment, we should not. Not, let me say at once, because I am convinced that Mr. Justice Chadwick necessarily came to the right conclusion, at any rate for the right reason, on the particular point of construction in issue before him. Indeed, as I understand it from the plaintiffs' skeleton argument, as I understand it the decision is sought to be upheld on essentially different grounds and by reference to a different process of reasoning. Rather in my judgment this application should be refused because this whole exercise is to be seen as essentially barren. The proper construction and application of the rule in the particular circumstances of this case seems to me to involve no more than arid debate which, even if the defendants prove to be right in their contentions, could not, as I believe, achieve their ultimate purpose. I repeat, the real issue in regard to these disputed documents is whether the defendants now can be required to prove them, or whether instead the plaintiffs must at this date be deemed to have accepted their authenticity. There is, of course, ample power in the court either to extend time for the service of the Order 27, rule 4(2) notice - invoking for the purpose the court's general power under Order 3, rule 5 - or under the express language of rule 27(4)(1) . The phrase unless the court otherwise orders allows the court to do just that and order that, in any event, the plaintiffs shall not be deemed to admit the authenticity of these documents. Given that ample power, and given too the other circumstances of the case (to which I have already briefly alluded), most particularly the fact that the defendants have known for months past that the plaintiffs do indeed seek to dispute the authenticity of these documents (in regard to some of which at least the forensic experts have already exchanged reports) and that the whole basis of Mr. Justice Hoffmann's refusal to order service of a fresh list of documents was, as I believe, his clear assumption that the plaintiffs did not need to succeed upon that application in order to mount their challenge by service of an appropriate notice, unless the defendants can suggest compelling reason to the contrary, it would seem to me plainly wrong to prevent the plaintiffs from challenging these documents. What reasons then are advanced by the defendants for refusing to allow such a challenge? First, Mr. Page stresses (and indeed he has made the point a number of times) the very late stage of proceedings at which he asserts the plaintiffs have indicated their intention of challenging the documents, namely during the course of the trial itself. In my judgment, however, that overlooks the reality of the position which is that the plaintiffs served their notice, whether in time or not, as long ago as 7th October - indeed for some three months even before that had expressly reserved their position under Order 27 . Second, Mr. Page points out that in regard to 25 of the 31 challenged documents the plaintiffs have thus far indicated no specific basis for challenging their authenticity; no forensic evidence has been exchanged in regard to these. So be it. In my judgment, however, nothing in the

provisions or purpose of Order 27 restricts a party to challenging authenticity only if they themselves are prepared to indicate and mount an affirmative case in that regard. The sanction against needlessly challenging authenticity is to be found in Order 62, rule 6(8) which in terms provides for the costs thrown away as a result of non-admission under Order 27, rule 4(2) to be borne by the party serving an unjustified notice. In so far as Mr. Page further seeks to argue that at this late stage it will be difficult for the defendants, with their lawyers' services already stretched by the demands of the trial, to carry out the necessary investigations abroad to meet this challenge to authenticity, in my judgment, they have only themselves to blame for not having dealt with the position that has been plainly looming up over recent months. In short, whatever view the judge had taken on the technical point of construction raised before him, I conclude that had he been asked to exercise his discretion to allow the plaintiffs, consistently with their notice, to challenge these documents, he must inevitably have acceded to such application. He could not, I believe, properly have done otherwise. Indeed, I for my part feel some measure of surprise that it was thought necessary to argue the technical point of construction to decide when, in the particular circumstances of this case, time should properly have been thought to start running under the order. In the light of these considerations this is not, therefore, in my judgment, an appropriate occasion to attempt some definitive analysis and exegesis of Order 27 . On the contrary, if ever a case fell within the recently expressed, principle that interlocutory decisions should be respected and upheld rather than challenged during the course of trial, then, to my mind, this is it. For my part, therefore, I would unhesitatingly refuse this application. I add just this foot-note. The defendants' skeleton argument draws our attention to what could be read as an unjustifiable threat contained in a letter from the plaintiffs' solicitors dated 24th January 1993, a threat that the plaintiffs would object to the defendants calling authentication evidence on the grounds, in effect, of late service of Civil Evidence Act notices. This was the sole point on which we felt it necessary to ask for Mr. Flint's comments. Suffice to say that Mr. Flint has satisfied me that all that the plaintiffs were in truth seeking to do was generally reserve their rights to object to a particular form of authentication evidence if that seemed inadequate and inappropriate. I accept that the plaintiffs cannot properly be required today to waive in advance any rights to make proper objection to evidence. That said, however, having regard to the history of this dispute as to whether and when the plaintiffs properly indicated their desire to challenge these documents, I would expect the trial judge to be understanding, and perhaps even on occasions indulgent, towards the defendants in regard to such understandable difficulties as they may now encounter regarding the authentication of these documents. Beyond that, however, I am not prepared to go. I repeat that I, for my part, would refuse this application for leave to appeal. LORD JUSTICE PETER GIBSON: I agree. LORD JUSTICE BALCOMBE: I too agree. Order: Application refused, with order for costs not to be enforced without leave of the court otherwise than by way of set off; legal aid taxation of the applicants' costs. MR. FLINT: I would invite your Lordships to dismiss this application for leave to appeal and make an order for the plaintiff's costs. LORD JUSTICE BALCOMBE: Do you wish to say anything about that, Mr. Page? MR. PAGE: I have nothing to say about dismissing the application for leave, obviously, my Lord. Your Lordships have drawn attention to the letter of 24th January and to the fact that your Lordships' minds have been set at rest by what Mr. Flint has said during the course of this hearing. I venture to suggest that, if Mr. Flint had not said that but had maintained the line that Freshfields had taken on 24th January, your Lordships might have been more inclined to grant leave. My Lord, on that basis, in my submission, given what was being said on 24th January, the defendants were right to bring this appeal and to some extent the plaintiffs have brought it on themselves by taking that line at that time,

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even though they did not take it today. On that basis, I would submit it is a case in which your Lordships should make no order as to costs or say that they be costs in cause. I would add that my clients are legally aided, so, if your Lordships do accede to my learned friend's submission, it should be that the costs should not be enforced without leave of the court other than by way of set off. LORD JUSTICE BALCOMBE: No, Mr. Page. This application will be dismissed with costs; however, the costs are not to be enforced without leave of the court otherwise than by way of set-off. And you want legal aid taxation. MR. PAGE: I think I do, my Lord. Yes, thank you very much. Crown copyright
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