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	England and Wales High Court (Administrative Court) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Administrative Court) Decisions >> Karim v Charkham & Ors [2014] EWHC 497 (Admin) (26 February 2014) URL: http://www.bailii.org/ew/cases/EWHC/Admin/2014/497.html Cite as: [2014] EWHC 497 (Admin)

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IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT

		Royal Courts of Justice Strand, London, WC2A 2LL
		26 February 2014

Mr Justice Griffith Williams :

Introduction

1. On 18 December 2013, Shamim Akhtar Karim ("the Claimant") issued and served a Claim Form, HQ13X60629 ("the third claim") against Samuel Maurice Charkham, Waterside Finance Limited, Benjamin Tobin, Simon Eric Daniel Tilsiter, Terry Newman and Mogul International Management Consultants Limited ("the first - sixth defendants"). The first defendant is a solicitor in the firm Michael Simkins LLP who act for the second defendant. The Brief details of claim are as follows:

"The Claimant's (sic) arises out of the fraudulent acts/omissions of the defendants whereby each and every one of them knew or were reckless as to the substantive acts of dishonesty and/or fraud and misappropriation of funds and the claimant seeks:

(1) Declarations that each and every transaction since 24 October 2012 arose out of dishonesty and/or fraud committed or condoned by all of the defendants.

(2) The Aunction (sic) Contract having been rescinded the assignment and the TR.2 are void.

(3) The first and third defendants provide an account of the monies received by them and an enuiry (sic) as to what has become of the said amounts and order for restitution.

(4) Damages of Costs.

(5) Interest.^"

2. By an Application Notice dated 20 January 2014, the first and fifth defendants and each of them applied to strike out the Claim under CPR 3.4(2) as an abuse of the process of the court and/or as disclosing no reasonable grounds for bringing the Claim. The sixth defendant issued its own application for similar relief and on a similar basis on 6 February 2014. Consequent upon the determination of that application, there is a claim for an Extended Civil Restraint Order against the claimant. In the alternative, the defendants seek an order staying the Claim until such time as the claimant has discharged outstanding costs orders totalling some £75,000 made against her in proceedings HC12AO3391 and HQ13X02379 (see below).
3. At the conclusion of submissions at the hearing on 12 February 2014, the Court stated that the application to strike out the claims was allowed, that there would be an order striking out the action and that there would be an extended civil restraint order for reasons to be given later. The reasons are set out in this Judgment.

Background

4. In 2011, the claimant, a former solicitor, and her husband Ashraf Remtulla Karim were in considerable debt to numerous creditors who included Furness Mortgages and the Solicitors Indemnity Fund. Many debts were secured by charges on their home, Courtlands, Courtlands Avenue, Esher ("the property").
5. Furness Mortgages obtained a possession order. Subsequently the Claimant and her husband raised additional money, accepting the offer from the second defendant of a loan of £580,000 for a period of 6 months secured by a first legal charge on the property. By Clause 4.4 of the Facility Letter, it was provided that until the loan (including any accrued interest and costs) had been repaid in full, the claimant and her husband or their agents were expressly prohibited from occupying the property. Their address for service was expressed to be 8, Mepham Crescent, Harrow. The claimant and her husband executed a first legal charge over the property on 20 September 2011.
6. All their debts were settled with the completion monies and so the second defendant stood alone with the benefit of the first charge.
7. On 15 November 2011, the claimant and her husband borrowed a further £15,000 from the second defendant and so they were indebted to the second defendant in the sum of £598,000.
8. The claimant and her husband made no payments in respect of the loans and subsequent to their default the second defendant appointed the third and fourth defendants as Law of Property Act receivers on 26 June 2012.
9. In July 2012, the property was sold at auction to the sixth defendant for £746,000, subject to such rights of occupation as the claimant and her husband might have, with completion fixed for 21 August 2012 ("the Auction Contract").
10. The claimant and her husband tried to prevent completion from taking place by lodging various application with the Land Registry to remove the second defendant's first charge.
11. On 3 September 2012, the second, third and fourth defendants issued a claim in the High Court of Justice, Chancery Division for declarations relating to the registered title of the property and the validity of the legal charge ("the existing proceedings")^[1]. They claimed:

i) a declaration that the second defendant made the loan and further advance to the claimant and her husband.

ii) a declaration that the charge is valid and enforceable against them.

iii) an injunction restraining them and each of them from making or procuring others to make further applications to the Land Registry to register any interest or change an entry or to rectify the registers relating to the property which would have the effect of inhibiting or preventing the powers under the charge of the claimant and her husband in those proceedings being exercised.

Following the assignment of the auction contract to the fifth defendant (see paragraph 14 below ) he was added by amendment as the fourth claimant in the existing procedings and the claim was amended to add the following claims:

iv) an order that the claimant and her husband's objections made to the Land Registry in respect of the fourth defendant's application to be registered as proprietor of the property be withdrawn and that the registrar be directed to give effect to the application of the fourth defendant.

v) a declaration that the contract entered into at auction on 24 July 2012 is valid and enforceable and has been validly assigned to the fifth defendant pursuant to the assignment.

vi) a declaration that the claimant and her husband and each of them are trespassers and/or have no rights as against the defendants to remain in possession of the property.

vii) an order that the claimant, her husband and each of them do give up possession to the property to the fifth defendant.

12. This claim (HC12A03391) was subsequently transferred to the Central London County Court under Claim No. 3CL10165 but not before the claimant and her husband filed and served an amended defence and counterclaim dated 28 June 2013. The defence in summary is that the property was and continues to be used by the claimant and her husband as a dwelling and that the loan was a regulated mortgage contract for the purposes of paragraph 61 of the Financial Services and Markets Act 2000 (Regulated Activities Order 2001), that the second defendant was not an authorised or exempt person for the purposes of section 19(1) of the Financial Services and Markets Act 2000 and so the loan is unenforceable. The counterclaim in summary was for a declaration that the loan and the charge are unenforceable; a declaration that the purported appointment of the third and fourth defendants as receivers conferred no power over the property pursuant to the Law of Property Act 1925 and/or the charge; a declaration that the third and fourth defendants had no power to sell the property at auction; a declaration that the purported acts of the third and fourth defendants are not acts of the claimant and her husband; an order pursuant to sections 137-140 of the Consumer Credit Act 1974 that the purported "Deed of Assignment" dated 5 December 2012 be declared null and void; that the purported transfer of 5 December 2012 be declared null and void; that all actions taken by the third and fourth defendants since 24 September 2012 be declared null and void; that the auction contract to Mogul is aborted.
13. On 24 September 2012, in those proceedings, Norris J ordered the claimant and her husband to withdraw their Land Registry Applications and restrained them from making further applications save on notice to the claimants in those proceedings. The learned judge also dismissed the applications of the claimant and her husband to restrain completion of the Auction Contract.
14. By a Deed of Assignment dated 5 December 2012, Mogul (the sixth defendant) assigned the auction contract to Terrence Michael Newman (the fifth defendant) who was subsequently joined as the fourth claimant in the existing proceedings (see paragraph 11 above). Completion took place on 11 December 2012 and the fifth defendant applied to register his title. The claimant and her husband again made representations to the Land Registry, this time objecting to the fifth defendant's registration. The four claimants in the existing proceedings then made a further application, heard by Asplin J, who on 14 February 2013 ordered the claimant and her husband to withdraw their objections and ordered the Land Registry to complete the fifth defendant's registration.
15. The claimant and her husband then applied for permission to appeal the order of Asplin J. Their application, refused on paper by Lewison LJ on 1 May 2013, was renewed at an oral hearing which eventually took place on 30 October 2013 when permission was refused by Briggs LJ.
16. In the meantime, the Land Registry had failed to comply with the order dated 14 February 2013 of Asplin J – because of the outstanding appeal. The Fifth Defendant issued an application against the Chief Registrar of the Land Registry; it was heard by Aikens LJ on 25 September 2013, who ordered that the application be heard as a matter of urgency in the Chancery Division; he observed the Land Registry's arguments were "unattractive" and ordered the Registry to pay the Claimant's cost summarily assessed in the sum of £8,146.30. The Registry subsequently completed the registration of the fifth defendant.
17. On 17 April 2013, the claimant issued a claim form in the Queens Bench Division [HQ13X02379] against the second, third and fourth defendants ["The second claim"]. The brief details of her claim were:

"The Claimant's claim arises out of a purported unenforceable charge by the first defendant; the unlawful appointment by the first Defendant of the second and third Defendants as LPA receivers and their acts/commissions and the Claimant seeks:

(1) declarations for the second and third Defendants to forthwith seize acting as Receivers and the Defendant's be banned from providing financial services and to provide an account of the monies received by them and an enquiry as to what has become of any and all monies received by them together with an order for restitution of any and/or monies received by them taking such account and making such inquiries presently estimated to be Minium (sic) of £500,000 and for consequential relief including the delivery up of documents;

(2) damages for the unlawful sale of the Claimant's property and costs."

18. On 30 April 2013, Master McCloud transferred the second claim to the Chancery Division where on 23 July 2013, Deputy Master Cousins struck out the claim as an abuse of process and ordered the Claimant to pay costs of £13,470. There has been no appeal against that Order.
19. By an application dated 1 December 2013 and issued on 17 December 2013, the claimant applied, pursuant to CPR 3.1(7) for an order deleting that part of the order of Asplin J (see above) ordering the Claimant and her husband to withdraw their objections to the fourth defendant's registration and the Registrar of the Land Registry to give effect to the fourth defendant's application to be registered as proprietor of the property and the order that the claimant and her husband pay the applicant's costs summarily assessed at £18,000. That application was supported by a witness statement of the claimant dated 9 December 2013 together with a supplemental witness statement dated 22 January 2014. It suffices to say that the factual allegations in those statements mirror to a very large extent the issues in this claim.
20. By an application dated 5 January 2014, the claimant sought specific disclosure pursuant to CPR.31.12.
21. On 31 January 2014, HHJ Walden-Smith dismissed the application seeking to vary the order of Asplin J as being totally without merit. She similarly dismissed the applications for specific disclosure as being totally without merit. The learned judge also made a limited civil restraint order against the claimant.
22. Following the order of HHJ Walden-Smith, the Claimant has applied to re-open her appeal pursuant to CPR 52.17 effectively so that the order dated 30 October 2013 of Briggs LJ be varied to allow permission to appeal the order of Asplin J. That application is yet to be considered on paper by the Court of Appeal.

The Defendants' Submissions

23. The defendants and each of them submitted that the third claim is vexatious and an abuse of the process of the court. They rely on the provisions of CPR3.4(2):

"(2) The court may strike out a statement of case if it appears to the court –

(a) that the statement of the case discloses no reasonable grounds for bringing or defending the claim;

b) that the statement of case is an abuse of the court's process or is otherwise likely to obstruct the just disposal of the proceedings …"

24. On behalf of the defendants it was submitted primarily by Mr Stone and Mr Wigley that all the claims made in the third claim are included within the existing proceedings in the Central London County Court and can and should be determined in those proceedings rather than by way of a new claim. They submitted the fact that the third action is brought against two additional defendants (the first and sixth defendants) does not affect the primary submission because the allegations against them need to be considered in the factual context of the existing proceedings. Mr Stone conducted an analysis of the allegations in the counterclaim in the existing proceedings, the second claim and the third claim, an analysis which revealed that common to each proceedings are the following allegations:

i) breaches of sections 19 and 22 (1) of the Financial Services and Markets Act 2000;

ii) the sixth defendant has no assets and no intention to complete the auction contract;

iii) the receivers (the third and fourth defendants) were unlawfully appointed in breach of the Consumer Credit Act 1974;

iv) the receivers have acted without lawful authority;

v) the auction sale was at an undervalue;

vi) the contract was not completed by the sixth defendant;

vii) the assignment of the Auction Contract was unlawful or void;

viii) completion of the auction contract and the transfer to the fifth defendant was unlawful;

ix) the contract was assigned fraudulently.

They submitted that these allegations have yet to be determined in the existing action in the Central London County Court.

25. They submitted that the various allegations of fraud, illegality and misrepresentation in paragraphs 15, 27, 28, 30 and 32 of the Particulars of Claim are not properly or sufficiently pleaded and so do not comply with the Practice Direction 16.8.2.
26. On behalf of the sixth defendant, Mr Wigley submitted also that the third action is an attempt to re-open the decisions of Asplin J and Briggs LJ by adding two new parties. He submitted, correctly in my judgment, that the allegations made against them can be made in the course of these proceedings and that if necessary, the first and sixth defendants can be joined as parties in the existing proceedings.
27. The claimant accepted in the course of her submissions that the underlying factual basis for all her claims is that the property should not have been sold and that the defendants and each of them had been dishonest in one way or another. She said she appreciated that some of the matters she relies upon can be argued in the course of the existing proceedings but she said there had to be a fresh claim because she had been harshly dealt with by HHJ Walden-Smith and she did not expect to get permission to rely on the new evidence because she is now subject to a civil restraint order in the existing proceedings. The fallacy of this reasoning is all too apparent - her complaints about HHJ Walden-Smith and the civil restraint order post-date the issue of the third claim.
28. She submitted there has to be a third claim because she was only aware of the fraud and dishonesty of the defendants and each of them after disclosure. When it was pointed out to her that she had made allegations of fraud and dishonesty in both the existing proceedings and the second claim, she said that the new fraud and dishonesty was of a different type.
29. The claimant in her various witness statements and in her skeleton argument has provided no further and better particulars of the allegations of fraud, dishonesty and misrepresentation made in her particulars of claim (see paragraph 25 above). I consider this to be a very serious omission or failure on her part. Any allegation of fraud or dishonesty is a serious matter but probably the more so when made against a practising solicitor and when, in the absence of particulars, they must be deemed to be unfounded. I observe that the addition of the first defendant in the third action is in no way a new claim because she has previously complained to the Solicitors Regulatory Authority about the allegations raised in paragraphs 13-16 of the Particulars of Claim – complaints which appear to have been rejected. In any event, those allegations are so bound up with the dealings which led to the Auction Contract and the subsequent assignment that they should be considered in the course of the existing proceedings.
30. The claimant submitted that following disclosure on 1 November 2013, she was made aware for the first time of correspondence in October 2012 between the second and the sixth defendants each alleging a repudiatory breach of the Auction Contract by the other and of a letter dated 19 October 2012 from the solicitors acting for the sixth defendant who alleged that the second defendant could not give a good title to the property. This correspondence, she submitted, provided evidence of the fraudulent and dishonest conduct of the defendants. I observe that the terms of the Deed of Assignment dated 5 December 2012 appear to contradict her assertions but that calls for no determination in these proceedings because, in my judgment, there is no reason whatsoever why the Claimant may not deploy this material in support of her defence and counterclaim in the existing proceedings.

Conclusions

31. In JOHNSON –v- GORE WOOD & CO (a firm) [2002] 2 AC 1 at page 31A-F, Lord Bingham of Cornhill said:

"The underlying public interest is the same: that there should be finality in the litigation and that a party should not be twice vexed in the same matter. This public interest is reinforced by the current emphasis on efficiency and economy in the conduct of litigation, in the interests of the parties and the public as a whole. The bringing of a claim or the raising of a defence in later proceedings may, without more, amount to abuse if the court is satisfied (the onus being on the party alleging abuse) that the claim or defence should have been raised in the earlier proceedings if it was to be raised at all. I would not accept that it is necessary, before abuse may be found, to identify any additional element such as a collateral attack on a previous decision or some dishonesty, but where those elements are present the later proceedings will be much more obviously abusive, and there will rarely be a finding of abuse unless the later proceeding involves what the court regards as unjust harassment of a party. It is however, wrong to hold that because a matter could have been raised in earlier proceedings it should have been, so as to render the raising of it in later proceedings necessarily abusive. That is to adopt too dogmatic an approach to what should in my opinion be a broad, merits-based judgment which takes account of the public and private interests involved and also takes account of all the facts of the case, focusing attention on the crucial question whether, in all the circumstances, a party is misusing or abusing the process of the court by seeking to raise before it the issue which could have been raised before …. While the result may often be the same, it is in my view preferable to ask whether in all the circumstances a party's conduct is an abuse than to ask whether the conduct is an abuse and then, if it is, to ask whether the abuse is excused or justified by special circumstances. Properly applied, and whatever the legitimacy of its descent, the rule has in my view a valuable part to play in protecting the interests of justice"

32. Those observations, with which Lord Goff of Chieveley, Lord Cooke of Thorndon and Lord Hutton all agreed apply with equal force to the third claim. In my judgment, there is clear and abundant evidence that the statement of case discloses no reasonable grounds for bringing this fresh action when all the issues which it raises can and should be determined in the existing proceedings. There is also clear evidence of harassment, exemplified by the addition of the first defendant against whom grave allegations have been made unsupported by any evidence. I am satisfied the claimant has misused or abused the process of the court; it follows that the statement of case is an abuse of the court's process and is struck-out.
33. In paragraph 58 of his skeleton argument, Mr Stone identifies seven specific allegations in the Particulars of Claim. None has been addressed satisfactorily by the claimant either in her skeleton argument or in her submissions to the Court but no purpose will be served, in the light of my clear conclusion on the primary submission, in a detailed analysis of Mr Stone's submissions. It suffices to say that I am satisfied each submission was correctly made and there is no prospect that any one of those specific allegations could be maintained at trial.

An extended civil restraint order

34. Paragraph 3.1 of the Practise Direction 3C-Civil Restraint Orders provides that an extended civil restraint order may be made "where a party has persistently issued claims or made applications which are totally without merit". On behalf of the defendants, it is submitted that this is a vexatious claim and/or one made totally without merit. It is submitted that this is the third claim arising out of the same facts and there have been a number of applications made by the claimant which have been struck out, some expressed to have been made wholly without merit.^[2] The second action was struck out and the claimant is presently subject in the existing proceedings to a civil restraint order.
35. The claimant in her submissions said that the making of an extended civil restraint order would be totally unfair and in effect would punish her for seeking to raise issues which only came to light following late discovery. I reject those submissions; in my judgment the third action was started quite deliberately following the striking out of the second claim. The history of these proceedings and the other proceedings demonstrates that the Claimant has used the procedures of the court unsuccessfully and without proper grounds to delay the resolution of the various issues. I consider it significant that her reaction to the Order of HHJ Walden Smith (see paragraphs 21 and 22 above) was to apply out of time for permission to appeal the order of Briggs LJ (see paragraph 15 above). If, as she asserts in her notice, the application is made on the grounds of the fresh evidence (see paragraph 30 above) the application should have been made more promptly.
36. While there is no longer a requirement of "a vexatious proceeding", the observations of Lord Bingham CJ (as he then was) in Attorney General v Barker [2000] FLR 759 at 764 are pertinent:

"The hallmark usually is the plaintiff sues the same party repeatedly in reliance upon essentially the same cause of action, perhaps with minor variations, after it has been ruled upon, thereby imposing on defendants the burden of resisting claim after claim; that the claimant relies on essentially the same cause of action, perhaps with minor variations, after it has been ruled upon… that the claimant automatically challenges every adverse decision on appeal; and that the clamant refuses to take any notice or give effect orders of the court. The essential vice for habitual and persistent litigation is keeping on and on litigating when earlier litigation has been unsuccessful and when on any rational and objective assessment the time has come to stop".

37. In R (Kumar) v. Secretary of State for Constitutional Affairs [2007] 1WLR 536, the Court of Appeal, at paragraph 69, stated that the requirement of "vexatiousness" has gone and it is sufficient under the statutory scheme in force since the 1 October 2007 to establish only that the previous claims and/or applications were totally without merit and that the litigant persisted in making them. To that there must be added the requirement of "persistence" as defined by Lord Bingham (above) and by Lord Phillips MR (as he then was) in Bhamjee v Forstick & Ors[2004] 1WLR 88, at paragraph 2:

"There has to be an element of persistence in the irrational refusal to take "no" for an answer before an order of this type can be made".

38. Applying those criteria, I am satisfied that the conduct of the Claimant amply calls for the making of an extended civil restraint order. I have identified in the course of this judgment a number of matters which establish a history of an indifference to court orders. On any objective assessment, it should have been readily apparent to the claimant (who was a qualified solicitor in practice) that the third claim was no more than a re-working of her earlier claims and raised no issue which would and could not be considered in the existing proceedings.

Decision

39. There must be an extended civil restraint order, which should be drawn up by Counsel for the first and fifth defendants and submitted for appeal. It must incorporate the following:-

i) Forbidding the Claimant for a period of two years from the date of the order, whether personally or through any servant or agent from issuing in the High Court of Justice or a County Court any new proceedings against the Defendants or any of them arising out of any of the events or matters which formed the subject matter of the three claims HC12A03391, HQ13X02379 and HQ13X06029 or from issuing any application, appeal or other process in this action or in any other action in any other court concerning any of the above events or matters without first obtaining permission as provided below.

ii) If the Claimant wishes to apply for permission to issue any further application, step, appeal or any act described above then an application must be made in writing to Mr Justice Griffith Williams at the Royal Courts of Justice, Strand, London WC2A 2LL and the application will be dealt with on paper alone. If Mr Justice Griffith Williams is absent or otherwise unavailable any such application shall be passed to another High Court Judge at the Royal Courts of Justice nominated by the President of the Queens Bench Division.

iii) If the Claimant wishes to appeal from any decision of Mr Justice Griffith Williams or another High Court Judge made in accordance with paragraph (ii), she must seek permission to appeal from the same judge adopting the same procedure (i.e. an application in writing to be dealt with on paper alone). For the avoidance of doubt no further appeal shall lie to any judge or to any court from a decision of the High Court Judge refusing permission to appeal.

iv) If any formal proceedings, application notice, appellant's notice, petition or any form of document which is within the scope of this order is purportedly issued or filed or served upon any party without the said permission having first been obtained (which acts or any of them for the avoidance of doubt will constitute a breach of this order and a contempt of court) that party shall not be required to appear and respond and the purported application/proceedings shall stand struck-out without being heard. Further no such application or other process will be issued by the court.

v) In the event of the retirement, indisposition or other unavailability of Mr Justice Griffith Williams another High Court Judge may be assigned to this order by the President to the Queens Bench Division.

vi) NOTE TO THE CLAIMANT:

This order prevents you from making any further application or appeal in this case or in any other case or from issuing any other new case in any court (whether the High Court of Justice or any County Court in England and Wales) against the Defendants or any of them arising out of any of the events or matters which form the subject matter of the three claims without first obtaining permission except as provided in paragraph 8 below.

vii) THIS ORDER does NOT prevent you from taking any one or more of the steps set out below without the prior permission of Mr Justice Griffith Williams or a High Court Judge nominated as above in his place. YOU MAY:

i) apply, without obtaining prior permission, to set aside all or any part of this order. Any such application should be made to Queens Bench Listing at the Royal Courts of Justice, Strand, London W.C.2A 2LL, quoting the case reference number at the head of this order and your application will be heard by a High Court Judge.

ii) apply without obtaining prior permission for permission to appeal against this order by filing an Appellant's Notice in the Court of Appeal (Civil Appeals Office Registry, Room E307, Royal Courts of Justice, Strand, London WC2A 2LL). You should not take this step until you have made an application under 8.1 above.

40. The Order should be drawn up accordingly by counsel for the first-fifth defendants and submitted for approval.

Costs

41. The applications of Mr Stone and Mr Wigley for summary assessments of the defendants' costs (£27,197 for the first to fifth defendants and £6,509.60 for the sixth defendant) on an indemnity basis were supported by Statements of Costs. The claimant objected, submitting that the order should be on a standard basis, complaining about the attendance of two solicitors to instruct counsel (a complaint which was groundless because the cost of attendance of only one solicitor was claimed). She also queried the hourly rate. By reference to CPR48.49, I am satisfied the hourly rates claimed by the fee earners are too high. This was not a complex and/or substantial case justifying higher rates but I have made an allowance for the fact that the Guideline Rates are those fixed in 2009.
42. I am satisfied the conduct of the claimant in bringing the third claim was such as to justify an award of costs on an indemnity basis. I summarily assess the costs of the first-fifth defendants claimed in the sum of £20,000 and the costs of the sixth defendant in the sum of £5,500. The claimant will pay the costs of the defendants as assessed.

Note 1   While the defendants are the claimants and the claimant is the defendant in the existing proceedings, they will be referred to throughout this judgment as defendants and claimant respectively    [Back]

Note 2   The orders of Briggs LJ and Her Honour Judge Walden-Smith.    [Back]