Skip to Content

CFI 019/2013 (1) Roberto’s Club LLC (2) Emain Kadrie v Paolo Roberto Rella

CFI 019/2013 (1) Roberto’s Club LLC (2) Emain Kadrie v Paolo Roberto Rella

February 26, 2015

image_pdfimage_print

Claim No: CFI-019-2013

THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

 

IN THE COURT OF APPEAL

BETWEEN

(1)  ROBERTO’S CLUB LLC

(2)  EMAIN KADRIE

Claimants/Respondents

and

 

PAOLO ROBERTO RELLA

Defendant/Appellant


 ORDER WITH REASONS OF JUSTICE SIR DAVID STEEL


UPON reviewing the Appellant’s Appeal Notice and Grounds of Appeal dated 11 November 2014 and its Skeleton Argument in support dated 12 February 2015, seeking permission to appeal against the judgment of the Deputy Chief Justice Sir John Chadwick dated 29 October 2014.

AND UPON reviewing the Respondents’ Skeleton Argument dated 20 December 2014

AND UPON hearing Counsel for the Appellant and Counsel for the Respondents on 17 February 2015

IT IS HEREBY ORDERED THAT:

1. The Defendant’s application for leave to appeal (together with the application for a stay pending the appeal) is dismissed.

2. No order as to costs.

 

Issued by:

Mark Beer

Registrar

Date of issue: 26 February 2015

At: 4pm


SCHEDULE OF REASONS

1. This is an application for leave to appeal against the judgment of the Deputy Chief Justice Sir John Chadwick (the “DCJ”) dated 29 October 2014. In the event that leave were to be granted the Appellant seeks a stay. The judgment is a lengthy one running to 123 paragraphs over 57 pages. It follows a relatively short trial over 3 days in May 2014.

2. It is a matter of some comment and dismay that the “skeleton” argument served in support of the application for leave is over 60 pages long with 174 paragraphs.  In that context I would quote the last paragraph of my judgment in Taaleem PJSC v. National Bonds Corporation et al dated 19 February 2014 (Claim No. CFI 014/2010).

“It is of the utmost importance to the efficient and economic conduct of litigation in the DIFC Courts that skeleton arguments (as well as, I would add, pleadings and witness statements) are kept within manageable bounds.  They should concentrate on the issues without quoting extensively from the documentation.  The skeletons should identify the essential elements of the party’s submissions so as to help the court understand the arguments.  Long and complex skeletons impose an unacceptable burden on the court which is already expected to pre-read a large amount of material.  In any event, the shorter the skeleton, I would hazard the view that the more persuasive it is likely to be”:  Midgulf Int. Ltd v. Groupe Chimique Tunisien [2010] EWCA Civ. 66; Khader v. Aziz [2010] I W.L.R 2675; Standard Bank PLC v. Via Mat Int. Ltd [2013] EWCA Civ. 490.

3. The principal ground relied upon in support of the application for leave to appeal (with a view notably to obtaining an order for a retrial) is that the judgment was subject to a serious procedural irregularity in the form of substantial delay in delivering judgment which “resulted” in a material adverse effect in the Judge’s recollection of the issues, the oral evidence and the oral submissions.

Delay

4. The first difficulty with this submission is that the length of time between the end of the trial and the date on which the judgment was handed down was not in any sense excessive or inordinate. The overall period may be 5 months. But a significant proportion of that time was made up by the usual holiday period in July and August.  It is suggested the “Judge wrote the judgment in or around the week commencing 20 October 2014.” Presumably this is based on the fact that the judge requested further detail in regard to the witness statements during that week but there is no reason to assume that it was all prepared in one continuous session immediately prior to that stage. The judge no doubt had a wide range of other work commitments. (He is not a full time judge within the DIFC). He would be likely to prepare the judgment as time permitted, its scale suggesting that it was drafted over a considerable period of time and legitimately so.

5. In any event it is accepted that delay of itself is not a basis upon which an appeal can be justified. Some 38 pages of the skeleton argument are devoted to arguing that the judge failed to deal with various issues, resolved issues that were no longer live and provided inadequate reasoning for some of the conclusions he reached. I will deal with some of those individual points hereafter but for the moment will focus on the general conclusion from those submissions that is tendered as the primary ground of appeal as follows:

“Ground 1: Conclusion

143. The overwhelming impression gained is that the Judge wrote the Judgment based on the contents of the trial bundle without reference to his notes, such as they existed, or the transcript, which was available and had been provided to him.  This would explain the omissions with regard to developments at the trial.

144. What is more regrettable is that the Judge seems to have not had access to the Appellant’s written submissions and oral submissions.

145. This is also consistent with the failure to make reference to many important extracts of the live evidence or an assessment of the performance of the witnesses in the witness box.

146. The Judgment’s inadequacies in terms of the errors and inaccuracies and also the absence of reasoning all point to the conclusion that the substantial delay of five months adversely affected the Judge’s ability to deliver a properly reasoned judgment.”

6. First of all it has to be said that it is serious complaint that a judge has made such a host of errors and omissions because of the passage of time that retrial is required. But it must be borne in mind that the DCJ is a former judge of the High Court Chancery Division (and was a member of the English Court of Appeal for many years).  He has been a judge of this court for a considerable time (as well as the Dubai World Tribunal).  He is also a judge in the Cayman Islands. In short he has had an enormous experience of writing judgments in witness actions. The detail and reasoning in the judgment is a reflection of that. It is wholly improbable that he would lose sight of the primary issues, the relevant evidence and the arguments in the manner suggested merely because of the passage of matter of a few months.

7. The appellant’s argument starts badly in the form of the suggestion that the judge denied himself access to the written or oral submissions. This can be dismissed out of hand.  Both are expressly referred and cited in the judgment. Likewise, the complaint that the judge wrote his judgment based on the trial bundle without citation from the transcript is simply untrue. There are express references to passages from the transcript. These wild and unjustified points should not have been made.

8. The further complaint that the judge failed to make an assessment of the “performance” of the witnesses demonstrates a complete misapprehension of the task facing a judge where there is conflict of testimony. Demeanour or performance is not a reliable indicator of honesty and reliability. As Lord Devlin neatly put it in ‘The Judge’:

“The great virtue of the English trial is usually said to be the opportunity it gives to the judge to tell from the demeanour of the witness whether or not he is telling the truth.  I think that is rather overrated.  It is the tableau that constitutes the big advantage, the text with illustrations, rather than the demeanour of a particular witness.”

This is all the more so if a witness is not speaking in his first language.

9. It is the contemporary documents which form the backbone of any judgment in a commercial dispute. In this regard, I cite a passage from Grace Shipping v. Sharp & Co [1987] 1 Lloyd’s Rep. 207:

“In this connection, their Lordships wish to endorse a passage from a judgment of one of their number in Armagas Ltd. v. Mundogas S A (The Ocean Frost) [1985] 1 Lloyd’s Rep. 1 when he said at p. 57:

“Speaking from my own experience, I have found it essential in cases of fraud, when considering the credibility of witnesses, always to test their veracity by reference to the objective facts proved independently of their testimony, in particular by reference to the documents in the case, and also to pay particular regard to their motives and to the overall probabilities.  It is frequently very difficult to tell whether a witness is telling the truth or not; and where there is a conflict of evidence such as there was in the present case, reference to the objective facts and documents, to the witnesses’ motives, and to the overall probabilities, can be of very great assistance to a Judge in ascertaining the truth.”

That observation is, in their Lordship’s opinion, equally apposite in a case where the evidence of the witnesses is likely to be unreliable; and it is to be remembered that in commercial cases, such as the present, there is usually a substantial body of contemporary documentary evidence.”

10. Against that background I turn to consider the individual criticisms but in doing so bear very much in mind that a judgment needs to be read as a whole. The judge is not required to resolve every issue or respond to every submission. I have read the entire judgment. As might be expected it is detailed and thorough. It instils confidence in the outcome. If there are any matters which require resolution or remain unresolved, then it will have to be shown that they have some material bearing on the conclusions. But as I have indicated the thrust of the Appellant’s submission is more fundamental: that such are the errors, inaccuracies and absence of reasoning it is possible to conclude by inference that they are attributable to the “delay” and by parity of reasoning can only be corrected by a retrial. 

INACCURATE RECOLLECTION

Equitable relief from forfeiture

11. It is ironic that whilst now put at the forefront of the application for leave to appeal, this was a proposition that was expressly disclaimed at the time the trial opened.  It was only at a very late stage (on 22 May) that an application to amend was made. In one sense it was merely a variation of the argument that Clause 3.9 of the Shareholders Agreement was a penalty clause. But a crucial ingredient of the proposed amendment was the proposition that there was a disparity between the value of the property of which forfeiture was claimed (the appellant’s shareholding) compared with the damage caused by the breach. The judge refused leave to plead any such disparity as being far too late and prejudicial: see the Transcript at Day 4 p.83 line 21 to p.84 line 13. In the circumstances it is not remotely surprising that the topic does not feature in the judgment. I revert later to consider whether even assuming it was open to argument there would have been anything in the point.

Authenticity of the Shareholders Agreement (SHA)

12. The fact that the dispute on the pleadings had been resolved is of no consequence.  The appellant had contended that the SHA had been forged. In the alternative it was said that the appellant’s signature had been induced by misrepresentation. At the end of the opening submissions for the appellant it was conceded that he had signed the SHA in the form that the respondents contended with legal advice. In the circumstances it is not remotely surprising that the position was confirmed in paragraph 95 of the judgment.  The point adds nothing whatsoever to the proposition that the judge had an insufficiently clear recollection of the case as a whole.

Extent of the Applicant’s Shareholding

13. Likewise, although it was conceded in the course of the hearing, there can be no possible complaint about that part of the judgment which explains why the SHA accurately identified the shareholding in contrast to that contained in the records of the registry.

Claim for Rectification

14. Again the reference to the plea of rectification which was not in the event pursued is of no consequence. The essential issue was that of enforceability. 

Airfares

15. This point was abandoned before me and rightly so. No airfares were incurred. Any entitlement to the cash equivalent was accepted to be dependent on the wrongful dismissal claim. There was no call for the judge to even refer to the issue let alone deal with it as a discrete item.

Reduction in advance

16. The Appellant had not pleaded that all or any part of his advance had been remitted.  This is not surprising since the evidence revealed that the remission was offered not to the appellant but to other employees after the appellant had been suspended. It was not even suggested in closing submissions as it is now that “because the others got remission the appellant was entitled to the same”. There was no call for the judge to deal with the matter.

FAILURE TO DEAL WITH ISSUES

17. The thrust of these points is said to be that they would establish that the suspension and dismissal were in bad faith. In support of this stance, the Appellant’s skeleton runs to 30 pages (of some 60 paragraphs). The extensive citation from the transcript of the oral evidence has no place in such a document.

False statement to Mr Mostert

18. This is a good example of a persistent theme of the submissions made on behalf of the appellant that any inconsistency or inaccuracy in the oral evidence of the respondents’ witnesses can without more be categorised as dishonest. The Appellant accepts that he had been drinking on the relevant occasion. The judge had the benefit of the oral evidence. It is evident that the evidence of Mr Kadrie lacked consistency in some respects. But inconsistency in terms of recollection of the detail of an event which occurred over a year earlier is of little if any consequence. For example whether matters were witnessed on departure or return was of no consequence. The judge had the contemporary documentary material. It is difficult to determine any motive for misleading Mr Mostert. The judge was not persuaded that the Second Respondent was “fabricating material to defame the Appellant”.  On the material relied upon that is not surprising. 

False statement that the Appellant was not following doctor’s instructions

19. This point borders on the trivial. Mr Turgul’s uncertainty as to how much the Appellant was following doctor’s orders cannot begin to support suggestion of the making of false statements. There was no need for the judge to do more than ignore the point.

Veracity of 21 March e-mail

20. The judge held that the e-mail set out the reasonably held views of the Second Respondent as to valid reasons for termination. That in itself resolved the contention advanced by the Appellant that the e-mail was self-serving and untruthful. The conclusion is no open to serious challenge. The email is a lengthy and carefully considered document which contains full consideration of points that could be made on the appellant’s behalf. There is nothing in the email of 7 March written by the appellant which indicates let alone establishes that Mr Kadrie’s email was written in bad faith.

21. As regards the suggestion that adverse inferences should have been drawn from the failure to call Dr Shafey, either side could have done so as the judge pointed out – indeed he was the Appellant’s doctor. For that reason alone, the situation is miles away from the circumstances where an adverse inference could be drawn: see Wizniewski v. Central Manchester Health Authority [1998] Lloyds Rep. Med 223.

Disparity of treatment

22. Notably this point was never raised at the time. Any disparity of treatment between the most senior member of staff on site who is in blatant breach of the alcohol policy he has established on the one hand and his subordinates on the other is of little significance.  The judge was entitled to infer that drinking by a senior employee would encourage subordinates to do the same. Such was consistent with the CCTV pictures. It was certainly not a pointer to bad faith

Other log books

23. It was contended that Mr Salah’s oral evidence in regard to the existence and nature of an additional log book was so muddled as to justify the conclusion that he had been suborned to give false evidence. This in my judgment is a hopeless proposition. The transcript of his evidence on the topic was examined at some length. It was unquestionably confused but manifestly reflected the witness’s limited grasp of English.  This was another example of the submission that evidence which was inconsistent could be categorised without more as demonstrably false. Any confusion in regard to log books – one (or more) to record drinks and another to leave messages – is an order of magnitude short of establishing deliberate concealment. Indeed there was no application for specific disclosure.

Attack on the reason for suspension

Frivolous case on absenteeism

24. It may well be that the level of absenteeism was not of itself justification for dismissal.  But to assert that it was thus simply a frivolous complaint is not arguable.

Appellant told suspension was for rehabilitation

25. The judge was fully entitled to find as he did that rehabilitation was not the only reason for suspension. Put at its lowest, the judge accepted that the Second Respondent (following consultation with others) was anxious to conduct a further investigation.

Continued reliance on spurious grounds

26. This point is simply a bad point as set out in paragraph 61 of the judgment.

Evidential matters relevant to “Serious Cause”

27. The judge’s approach to “serious” is not arguably wrong. Various points said to “mitigate” the grounds for dismissal but they go nowhere:

(i)  Whether or not he was entertaining VIPs he was persistently violating company policy.

(ii)  The relevance of the evidence of Mr. Ruggeri is not understood.

(iii)  The absence of manifest drunkenness is of no significance.

(iv)  CCTV evidence did not establish that the Appellant was simply staying late with clients.

(v)  Participation of junior staff is not an excuse or even mitigation.

Failure to assess witnesses’ credibility

28. I have already touched on this in terms of the proper approach to assessing the veracity and accuracy of witness testimony and the lack of assistance to be derived from a witness’s “performance”.  It was quite sufficient for the judge to indicate what evidence he preferred against the background of the documents and the probabilities, together with the motives of those concerned.

Evidential matters relating to Trademark Issue

29. The judge dealt with this issue in the context of the Shareholders Agreement thoroughly and convincingly – not least given the legal advice afforded to the Appellant.

Ground 2: Unlawful Dismissal letter

30. The dismissal was not in bad faith or even arguably so. The opinions in the letter were shared by others. The judge was also correct to find that the dismissal was within the band of reasonable reactions of an employer. The decision to dismiss was not arbitrary or capricious. Whatever progress had been made there remained the potential for a relapse. The whole of this section of the skeleton is a rehearsal of points raised before the judge and rejected by him. There is no realistic prospect of disturbing his findings.

Ground 3: Clause 3.9

31. The judge’s conclusion is not realistically challengeable.

Ground 4: Equitable relief from Forfeiture

32. I have already mentioned this issue and held that the point was not open. Even if it was, it faced numerous obstacles:

a. Reliance on the provisions of the Constitution is misconceived: they are concerned with exposure to forfeiture by the state institutions (and for good reason no mention of the point was made at the trial or even in the skeleton argument for this application).

b. As indicated by the judge in argument, there is no basis for incorporating the English law principles of relief against forfeiture into DIFC law.

c. Even if applicable, absent material on the value of the shares and the potential damage to the business the principle could not be applied.

d. Such relief would not in any event be available in circumstances where the default was wilful.

e. The considerations in regard to the enforceability of Clause 3.9 would apply with equal force: “it makes no commercial sense to allow an individual who has been dismissed for serious cause to remain a shareholder with voting rights and access to financial information concerning the company.”

In any event I have doubts whether this is an appropriate ground of appeal.  If it did indeed constitute a live issue which the judge failed to deal with it ought to have taken up with him.  It is clear from the terms of his judgment that if it had been he would have refused relief.

Ground 5: Right to Trademark

33. The findings of the judge were in accord with the Shareholders Agreement. The proposition that “affiliates” could mean anyone was not arguable.

Ground 6: Monetary Claims

34. The points raised have no realistic prospect of success.

X

Privacy Policy

The Dispute Resolution Authority and all its affiliates are committed to preserve the confidentiality, integrity and availability of client data and personal information.

Dispute Resolution Authority and all its affiliates employees, vendors, contract workers, shall follow Information Security Management System in all the processes and technology.

  1. DRA's Top Management is committed to secure information of all our interested parties.
  2. Information security controls the policies, processes, and measures that are implemented by DRA in order to mitigate risks to an acceptable level, and to maximize opportunities in order to achieve its information security objectives.
  3. DRA and all its affiliates shall adopt a systematic approach to risk assessment and risk treatment.
  4. DRA is committed to provide information security awareness among team members and evaluate the competency of all its employees.
  5. DRA and all its affiliates shall protect personal information held by them in all its form.
  6. DRA and all its affiliates shall comply with all regulatory, legal and contractual requirements.
  7. DRA and all its affiliates shall provide a comprehensive Business Continuity Plan encompassing the locations within the scope of the ISMS.
  8. Information shall be made available to authorised persons as and when required.
  9. DRA’s Top Management is committed towards continual improvement in information security in all our processes through regular review of our information security management system.