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	England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Black Arrow Finance Ltd v Orderdaily Co Ltd & Ors [2001] EWCA Civ 1188 (9 July 2001) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2001/1188.html Cite as: [2001] EWCA Civ 1188

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IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM HIGH COURT OF JUSTICE
(LORD CARLILE OF BERRIEW QC)

		Royal Courts of Justice Strand London WC2 Monday, 9th July 2001

Monday, July 9th 2001

1. LORD JUSTICE ROBERT WALKER: Lord Justice Rix will give a short judgment explaining the course that we are proposing to take.
2. LORD JUSTICE RIX: This is an application for permission to appeal from the judgment of Lord Carlile of Berriew QC, sitting as a Deputy High Court Judge on 5th April 2001. He had to consider the application of the 6th defendant, Mr Wilkinson, to set aside a judgment given in default of acknowledgment of service and in connection with that to set aside a freezing order. I can leave the matter of the freezing order on one side because that is clearly entitled to be there if the judgment stands, and thus does not need separate consideration. I shall give a short judgment to explain my decision why this matter should be adjourned to be heard on notice to the claimant with appeal to follow immediately were permission then to be given.
3. The default judgment with which the Court is concerned is dated 17th November 2000. That judgment was given on the basis of an amended claim form and particulars of claim which brought Mr Wilkinson for the first time into this litigation on the 19th May 2000. The case against Mr Wilkinson is made essentially in two paragraphs of those amended particulars of claim. Paragraph 14A reads:

"On 28th November 1997 the sixth Defendant, being a signatory on the first Defendant's account with the National Westminster Bank plc, drew a cheque on the said account in favour of the Claimant in payment of the first instalment of the rental due under the lease. The sixth Defendant thereby represented to the Claimant that the goods had been delivered to the first Defendant."

4. Paragraph 17A reads:

"If, which is not admitted by the Claimant, the signatures on the said documents were forged, the same were forged by the sixth Defendant and/or with the knowledge and consent of the second and/or sixth Defendant and in the further knowledge of both that the goods did not exist. In the premises the sixth and second Defendants conspired with each other to defraud the Claimant of the monies paid by the Claimant under the lease, by reason whereof the Claimant has suffered loss and damage."

5. The prayer of the pleading goes on to make it clear that the cause of action and remedy claimed against Mr Wilkinson is that of damages under paragraph 17A. That paragraph alleges a conspiracy to defraud the claimant, being a conspiracy of Mr Wilkinson together with the second defendant, who was his wife, albeit by the time of this pleading they had separated and divorce proceedings had already commenced.
6. The essential case made in the particulars of claim against the various defendants was that the third defendant, Total Technologies, had purported to sell some refrigerating equipment to the first defendant, Orderdaily Limited, which was to be financed by the claimant. The claimant in effect says this was all a fraud. There was no refrigerating equipment; none was sold; none was supplied; none was delivered. Everyone but the claimant knew that. The monies paid by the claimant to the purported supplier, Total Technologies, were the product of that fraud and represented the claimant's loss.
7. The significance of the cheque pleaded against Mr Wilkinson in paragraph 14A was that this was a cheque representing the first instalment of the rental due under the lease entered into with the claimant by the purported purchaser of this equipment, at a time when the first defendant and those concerned with it, namely Mr and Mrs Wilkinson, must have known that there was no such refrigerating equipment at all.
8. For some reason or other, which is obscure, the judge below appears to have concentrated on the pleaded representation to be implied from Mr Wilkinson's signature on the cheque, a signature which he says is not his but is a forgery, when the real cause of action, as I would understand the pleading against Mr Wilkinson, is that of conspiracy to defraud with his then wife under paragraph 17A. That cause of action, however, is not really considered in the judgment below.
9. There is a further difficulty which concerns me and which it would be useful to have help on when the matter comes back before the Court. Paragraph 17A, the terms of which I have read, is pleaded only as a contingent claim. It begins "If, which is not admitted by the claimant, the signatures on the said documents were forged". The said documents there referred to are the lease and guarantee which the first defendant Orderdaily purported to enter into under the purported signature of the second defendant, Mrs Wilkinson. She denied, however, that those documents were signed by her. She said they were forged. Paragraph 17A expressly makes clear that that defence of the second defendant is not admitted by the claimant and the claim in conspiracy to defraud, expressed as it is in this pleading, appears only to be put forward on a contingency, and it was not at the time of that pleading admitted by the claimant that those documents, the lease and the guarantee, were forged.
10. At the time when the default judgment was obtained on 17th November 2000 that matter was still in issue. The copy of the judgment in the file before the Court reads as follows:

"No acknowledgment of service having been filed, it is ordered that the sixth defendant must pay to the claimant an amount which the Court will decide and costs to prepare for the hearing."

11. And then it continues:

"Master Prebble orders that application for directions for the assessment should await the outcome of the trial of liability as between the claimant and the second defendant."

12. That makes clear, or appears to do, that at the time of the default judgment the trial on liability against the second defendant was still going forward. It was only subsequently to that judgment that the claim against the second defendant was stayed, and in the light of that stay the assessment of the amount which Mr Wilkinson had to pay to the claimant in the light of the default judgment, subsequently came on for hearing on 20th December 2000. Therefore one of the matters which will need to be addressed at the adjourned hearing of this application is whether because of those circumstances a judgment by default on a contingent claim of this kind is one that the claimant could properly request.
13. I would also like to mention here that there are some difficulties which arise about service and notice of these proceedings being given to Mr Wilkinson. The judge appears to have been under the impression that the default judgment had already been obtained by 7th September 2000, on which date Mr Wilkinson had a telephone conversation (which he, as it happens, was the person to initiate) with Mr Brooks, the claimant's solicitor. There is an attendance note of that telephone conversation. That attendance note appears to provide a basis upon which it can be said that even if the papers representing the claim against Mr Wilkinson had not reached him, he knew about the existence of the action against him and its basis in an allegation of fraud.
14. Be that as it may, the default judgment did not in fact occur until 17th November 2000. Perhaps because it was stated in the attendance note that Mr Wilkinson had been informed that judgment had already been given against him by that date, 7th September, the judge was under the impression that the delay in moving to set aside that judgment had been one of nearly five months, from 7th September 2000 to 31st January 2001. The latter was the date which the judge regarded as that at which Mr Wilkinson sought to set aside the judgment, albeit his formal application came some weeks later, towards the end of February or the beginning of March. The judge found that there was substantial unexplained delay of nearly five months from 7th September to the end of January 2001.
15. In fact it would seem that Mr Wilkinson only learned of the judgment of 17th November by reason of an e-mail from Mr Cashmore, his accountant, on 19th January 2001, and on that basis there is hardly any delay involved in this case at all. The judge himself acquitted Mr Wilkinson of any delay from 31st January onwards. So there is that factor also to to be considered.
16. I briefly mention some other factors which have concerned me in looking at the papers, and on which the claimant may be able to assist the Court upon the adjourned hearing.
17. One is whether any notice of the default judgment was given by means of alternative service to Mr Wilkinson after 17th November before he received the e-mail from Mr Cashmore. Another is whether any notice was given to Mr Wilkinson of the hearing of 20th December at which damages were assessed against him.
18. There is one final matter which I would mention. The order for alternative service obtained against Mr Wilkinson on 24th July 2000 was obtained on the basis of a witness statement of Mr Brooks which said that service of the claim papers upon Mr Wilkinson's wife's solicitors, then Albion & Co, would render them likely to reach him. That witness statement said nothing about Mrs Wilkinson being estranged from Mr Wilkinson. However, by the time of Mr Brooks' witness statement in question, that of 21st July, Mrs Wilkinson had already served a witness statement in these proceedings dated 28th February 2000 in which, after putting forward her defence to the claim against her, that the documents, which purported to contain her signature, were forged documents and that she had nothing to do with the matter, also concluded with a final paragraph in which she stated that her husband and she had separated and were currently in the process of divorce proceedings. She went on to explain that her husband had previously attempted to seize their daughter which had resulted in her obtaining a Court order against him. She also makes other allegations of a serious nature against her husband.
19. Those circumstances appear not to have brought to the attention of the Court when the application for alternative service was requested in Mr Brooks' witness statement of 21st July. That is a matter which it may be on the adjourned hearing should be considered further, since it is Mr Wilkinson's evidence that, for all that he knew of the existence of the proceedings by reason of his telephone conversation with Mr Brooks on 7th September, he never received any papers in them. It may be that I have somewhat overstated in that last sentence what Mr Wilkinson accepts he knew as a result of the telephone conversation on 7th September, but in any event the central point that I make is still there.
20. Therefore, for consideration of matters such as these, which it is impossible to deal with at this application (which is one without notice) in my judgment this application should be adjourned to a hearing on notice to the claimant with appeal to follow were permission to be granted.
21. LORD JUSTICE WALKER: I agree. So the application will be adjourned to be heard on notice with appeal to follow immediately if permission is granted. Costs of today will be costs in the appeal. The application to adduce fresh evidence will also be adjourned to that hearing.
(Application for permission to appeal adjourned, to be heard on notice with appeal to follow immediately if permission is granted; costs of today to be costs in any appeal; application to adduce further evidence adjourned to next hearing; stay granted until next hearing; tribunal to be three Lord Justices)