May 13, 2022 court of first instance - Judgments
Claim No: CFI 054/2018
THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS
IN THE COURT OF FIRST INSTANCE
SBM BANK (MAURITIUS) LTD
(1) RENISH PETROCHEM FZE
(2) MR HITESHKUMAR CHINUBHAI MEHTA
(3) PRIME ENERGY FZE
(4) NATIONAL BANK OF KUWAIT S.A.K.P
JUDGMENT OF JUSTICE LORD ANGUS GLENNIE
UPON the Rules of the DIFC Courts (“RDC”)
AND UPON reviewing the Set Aside Application No. CFI-054-2018/21, filed by the First and Second Defendants (the “Defendants”) on 20 January 2022 (the “Set Aside Application”)
AND UPON considering the Appeal Notice for permission to appeal (the “Permission Application”) filed by the Defendants on 19 January 2022 against the Order of Justice Lord Angus Glennie issued on 7 January 2022
AND UPON hearing the Set Aside Application and the Permission Application together at a hearing (the “Joint Hearing”).
AND UPON hearing counsel for the Claimant and counsel for the Defendants at the Joint Hearing on 28 April 2022.
IT IS HEREBY ORDERED THAT:
1. The Set Aside Application is refused.
2. The Permission Application is refused.
3. The Defendants shall pay the Claimant’s costs of the Permission Application and the Set Aside Application, to be assessed by the Registrar on the standard basis if not agreed.
Date of issue: 13 May 2022
1. The trial of this matter was listed before me for 3 October 2021. It was set down for 10 days. Parties duly appeared before me at the appointed time on 3 October. The Claimant (the “Bank”) and the third Defendant (“Prime”) appeared by solicitors and counsel. The first and second Defendants (respectively “Renish” and “Mr Mehta”) were not legally represented but appeared by Mr Mehta. It was then discovered that the Bank had only minutes beforehand concluded a settlement with Prime. That released Prime from the action. In light of this, I adjourned the case until 6 October, so that the Bank could revise its skeleton argument to exclude matters relating only to Prime, thereby focusing it on the claim against Renish and Mr Mehta. The case resumed on 6 October. Mr Mehta had already requested several times that the case be adjourned for some months. Those applications had been refused. He lodged a further adjournment application by email on 5 October, but did not appear in person on the resumption of the trial on 6 October. Enquiries through the Registry established that he did not intend to take any part in the trial. I refused his most recent adjournment application. The trial thereafter proceeded in his absence. In the absence of any Defendant and in the absence of any potential for witnesses to be cross-examined, the trial re-started on 6 October and finished on 7 October. In my judgment issued on 29 December (the “Judgment”) I rejected the Bank’s claim based on the Facility Agreement Representations but accepted it in part (limited to the Fifth and Sixth Advances) based on the Payment Representations. In consequence, I gave judgment for the Bank for an amount of just over US$21 million.
2. Mr Mehta and Renish (henceforward referred to as the “Applicants”) now apply to set aside the Judgment in accordance with RDC 35.16. In the alternative, they apply for permission to appeal against the Judgment in accordance with RDC 44.5. In accordance with the trend of the authorities, I propose to deal with the Set Aside Application first: c.f. Bank of Scotland v Pereira  1 WLR 2391.
3. I should make it clear that I have read carefully the very lengthy skeleton arguments submitted by both parties and I heard oral submissions amplifying those arguments. In this short judgment, I do not propose to refer to every point made by the parties. The fact that I omit reference to some argument or authority does not mean that I have overlooked it.
4. It should be noted that the Applicants have filed two skeleton arguments. One (at ZZC/3/12-62) was filed in support of the Permission Application (the “PTA skeleton”). The other (at ZZE/4/111-145) was filed in support of both applications (the “combined skeleton”). Unless otherwise indicated, when I refer to the Applicants’ skeleton argument I should be taken as referring to the combined skeleton.
The Set Aside Application
5. RDC Part 35 deals with various matters relating to hearings. Rules 35.14 - 35.18 make provision for the situation where one party fails to attend the trial. The court may proceed with a trial in the absence of a party: Rule 35.14. If a Defendant does not attend, the court may strike out his defence, but the Claimant may proceed to prove his claim at trial and obtain judgment on that claim: Rule 35.14(3). Where a party does not attend the trial and the court gives judgment or makes an order against him, the party who failed to attend the trial may apply for the judgment or order to be set aside: Rule 35.16. That application must be supported by evidence: Rule 35.17. The important provision for present purposes is Rule 35.18. This provides that an application made under Rule 35.16 by a party who failed to attend the trial can only succeed if the applicant: (1) acted promptly when he found out that the court had exercised its power to enter judgment or make an order against him; (2) had a good reason for not attending the trial; and (3) has a reasonable prospect of success at the trial.
6. On behalf of the Bank, it was argued that these Rules had no application to this case, where the Applicants had attended on the first day of the trial (3 October) and had only ceased to take part when their adjournment application had been refused. Could it really be the case that a Defendant who attended the trial for several days but then, anticipating an adverse decision on the merits, withdrew altogether from it, was “a party who failed to attend” the trial and was therefore entitled to make an application to set aside the judgment under Rule 35.16? I see some force in this argument. In the extreme case posited by the Bank, it would indeed be difficult to argue that a Defendant who had attended the trial for several days, cross-examined the Claimant’s witnesses and called witnesses of his own before withdrawing from the proceedings at some stage before judgment, was really a Defendant “who [had] failed to attend the trial”. But at the other extreme, a party that appears on day one only to argue an adjournment application and who then withdraws if that application is unsuccessful, may well be regarded as having failed to attend the trial. In Mohun-Smith v TBO Investments Ltd  1 WLR 2919 the Defendant applied in writing for an adjournment on the morning of the first day of the trial. When his adjournment application was refused, he took no part in the trial. His application to set aside the judgment succeeded - the point does not appear to have been argued, but it was not suggested that by applying for an adjournment on the morning of the first day of the trial he had attended the trial and was therefore barred from seeking to have the judgment against him set aside under the English equivalent of Rule 35.16. This case is somewhat similar, albeit that the Applicant’s appearance on 3 October, which was clearly the first day of the trial, and his participation in the discussion on that day gave no forewarning that he would not attend when the trial resumed. I do not think it desirable to seek to define the expression “failed to attend” with more precision. The issue of whether a party did or did not fail to attend is, in some cases, highly fact sensitive. Much will depend on what the relevant party did, how long he was involved in the proceedings, and whether his involvement went beyond seeking an adjournment. I regard the present case as marginal, but I am not disposed to hold that the Applicants did attend the trial so as to disqualify them from making an application under Rule 35.16. Having said that, however, I am in no doubt that this Set Aside Application must be refused, for the reasons set out below.
7. There are three criteria which have to be satisfied before the court can grant a Set Aside Application. The first is that the applicant must have acted promptly when he found out that the court had made an order against him. I need not take time over this. Judgment was issued on 29 December 2021. The Set Aside Application was filed approximately three weeks later, on 20 January 2022. During this time, which overlapped with Christmas and New Year holidays, Mr Mehta had to find and instruct legal counsel; and they in turn had to prepare both the Set Aside Application and the Permission Application. In all the circumstances I do not think that the Applicants can properly be criticised for delay. The other criteria, however, require more careful consideration.
8. Good reason for not attending the trial? The Appellants next have to satisfy me that they had a good reason for not attending the trial. In this context I was referred by the Applicants to two cases in the Court of Appeal in England on the equivalent provisions in the CPR, viz. Bank of Scotland v Pereira  1 WLR 2391, Mohun-Smith v TBO Investments Ltd (supra). These cases were cited, as I understood it, in support of two propositions: first, that there is “a general requirement not to adopt a very rigorous approach”, as part of the overriding objective of dealing with a case justly (c.f. RDC Rule 1.6); and, second, because the consequences of a failure to set aside a judgment are very serious indeed. I accept that approach, and will follow it (though for my part, and with respect to Lord Dyson MR in Mohun-Singh at para 26, I cannot understand why the consequences of a failure to set aside a judgment obtained in absence of the complaining party are said to be more serious than the consequences of refusing his application to adjourn and his decision, in light of that refusal, not to take part in the trial - in the latter case, the applicant will have had an opportunity to have an adjudication by the court on the merits of his case but will have decided not to take advantage of that opportunity).
9. I have read and considered Mr Mehta’s eighth and ninth witness statements in support of the Set Aside Application explaining his decision not to attend the trial. I have also read the summary of the Applicants’ position in the Applicants’ combined skeleton. In considering whether the Applicants had a good reason for not attending the trial, it is relevant to consider their involvement in the procedure leading up to the trial and to their various applications to adjourn (or defer) the trial. These matters are summarised in paras 13-17 of my Judgment. Applications to adjourn the trial made by the Applicants on 25 August and 19 September 2021 were refused by me for reasons set out in those paragraphs - it was the 19 September application which was refused by me on 3 October after oral submissions from Mr Mehta and Mr Reed QC (who appeared for the Bank). No criticism has been made of my reasons for refusing those applications, nor has there been any attempt to appeal my decisions. When Mr Mehta attended the hearing on 3 October he gave no indication that he did not intend to take part in the trial if his adjournment application was refused, notwithstanding that he had no legal representation. He had filed a skeleton argument in advance of the trial date. His case now appears to be that it was only when on 3 October he learned that the Bank had settled with Prime that he came to the view that he was unable to present his case properly without legal representation: see paras 34 and following of the combined skeleton. His written adjournment application of 6 October included, as a ground for seeking the adjournment, reference to the settlement between the Bank and Prime and (as he saw it) the change in the nature of the case against him - but it still sought an adjournment (or deferment) measured in months, not days. My reasons for refusing the application are set out in my Judgment at para 20. There has been no appeal against my decision to refuse an adjournment on 6 October. Nor has there been any appeal against earlier refusals to grant an adjournment or deferral.
10. The Applicant’s case on “good reason for not attending trial” appears in summary at paras 36 - 57 of the combined skeleton. I do not propose to deal with each point individually. I would just make the following points:
(1) I do not know what languages Mr Mehta speaks. I am sure he uses the English language for business transactions. In addition, in this action he has filed nine witness statements, all in English, without any suggestion that they have had to be translated for him; and some of them have been filed at a time when he had no legal representation. He filed a skeleton argument for use at the trial, again when he had no legal representation. Having had the opportunity to hear Mr Mehta and speak to him at the hearing on 3 October, I formed the view that he was fully able to understand what was said to him - with help and further explanation when necessary - and to explain his point of view. I do not accept the suggestion that a lack of understanding on the part of Mr Mehta appears from the transcript of proceedings on 3 October.
(2) I have no knowledge of Mr Mehta’s skills with the computer. I tried to persuade him at the hearing on 3 October to check (during the hearing) that he was able to find documents on the court system. He declined the offer, saying that he would get assistance and it would not be a problem.
(3) It goes without saying that the court would have been alert to the need to ensure Mr Mehta understood throughout what was going on, and would have taken all appropriate steps to ensure that he could present his case and challenge the Bank’s case. Judges are used to dealing with party litigants and helping them with matters of understanding, procedure, and presentation. I am familiar with the Equal Treatment Bench Book (or its Scottish equivalent). I believe I gave appropriate assistance and guidance and, what is more, would have continued to do so if Mr Mehta had continued to participate in the trial.
(4) Much is made of the way in which the settlement between the Bank and Prime changed the nature of the case Mr Mehta had to deal with, not in legal terms but in terms of the nature of the burden on Mr Mehta. He would have expected Prime to have made the running in defence to the claim by the Bank. I accept that point to some extent at least, as noted in para 18 of my Judgment, but it can be over-stated. Mr Mehta’s skeleton argument filed in advance of the trial (A/9/113-141) made it clear that he rejected Mr Sadr’s evidence in its entirety - it should, he submitted, be considered “null and void”: see para 32. He made much the same point about Prime’s expert, Mr Drewe: see para 41. The idea that he was disadvantaged by the settlement between the Bank and Prime is, I think, somewhat far-fetched. The settlement with Prime meant that he did not have to cross-examine any Prime witnesses - their evidence was not adduced by the Bank and he was therefore better off in this respect rather than prejudiced by the settlement. To assist him I suggested that he might like to consider - and tell the court - what parts of Prime’s witness statements he wanted to rely on and what parts of Prime’s witness statements he challenged. He appeared to understand that, and when we completed the hearing on 3 October I was left with the impression that he was going to do this. But he did not appear on 6 October, so I have no way of knowing whether he went through that exercise or not. His current skeleton sheds no light on this matter.
(5) The idea of getting the Bank to revise its skeleton argument to focus on its case against the Applicants, whoever it first came from - I had thought it was my idea but it may have come from Mr Reed - was calculated, at least so far as I was concerned, to assist Mr Mehta in dealing with the Bank’s case against him without him having to be distracted by points made against Prime and no longer relevant. This is now used by the Applicants as a further argument for saying that the changed situation resulted in unfair pressure on Mr Mehta. I reject that suggestion.
(6) In para 48 of the Applicants’ skeleton it is said that I “only” allowed a two day adjournment to allow the Bank’s case to be re-calibrated and for its skeleton argument to be revised; and that, despite the fact that this was “quite tight”, I rejected Mr Mehta’s adjournment application. But the adjournment application rejected on 3 October had nothing to do with the settlement with Prime (it was filed in September, before the settlement with Prime occurred); and the application rejected on 6 October, although it relied on the settlement with Prime amongst other matters, sought an adjournment into January 2022 or beyond (see the Draft Order filed at Y/247). There was no submission made by or on behalf of the Applicants that two days was not long enough to deal with the revised skeleton prepared by the Bank, but that a bit longer (say, 5 days) would be of assistance.
(7) On the question of Mr Mehta seeking funding to enable him to be legally represented at the trial, I adhere to what I set out in my Judgment in the context of refusing earlier adjournment applications. The evidence relied on by Mr Mehta fell far short of what would be required for an adjournment to be granted on these grounds. That conclusion does not appear to be challenged.
11. In all the circumstances I reject the suggestion that the Applicants could not have had a fair trial of the Bank’s case against them or that they had good reason for failing to attend the trial. My assessment is that, through Mr Mehta, the Applicants simply took a tactical decision not to take any further part in the trial. That is not a “good reason” for failing to attend. It follows that the Set Aside Application must fail.
12. Reasonable prospect of success at trial? However, I should go on to deal with the third limb of Rule 35.18, namely that the Applicants must show that they have a “reasonable prospect of success at the trial”. In doing so I accept the Applicants’ submission that this is a low hurdle to overcome. The defence needs only to carry some degree of conviction. It seems to me that this is similar in effect to the “real prospect of success” test for the grant of permission to appeal in rule 44.19, which has been interpreted as meaning a realistic as opposed to a merely fanciful prospect of success.
13. At paragraphs 60–65 of their combined skeleton, the Applicants set out six reasons why, in their submission, they have good prospects of defending the claim against them were the Judgment to be set aside. I consider them in turn below.
14. First, it is said that the finding of fraud in the Judgment was “exceptionally narrow”. The claim that there was an overall fraudulent scheme was rejected. The underlying oil trades with Lanka were genuine. Evidence from Prime’s witnesses, which was not admitted, would have shown substantial payments passing between Prime and Renish in the ordinary course of their business, which undermines the primary finding of fact relied on to infer fraud. And there is no obvious difference between the Fifth and Sixth Advances and the Fourth, which was not found to be fraudulent.
15. It seems to me that this misses the point. The fact that the basis of the fraud finding was “narrow” is not of any materiality. The critical difference between the Fifth and Sixth Advances, which I found to have been procured by fraud, and the other Advances, lies in the fact that on receipt of the Fifth and Sixth Advances Prime made transfers almost immediately back to Renish or companies associated with Renish: see paras 50-51 of the Judgment. There was no obvious business reason for these transfers. The timing speaks for itself - to move the funds so quickly after receipt of the Advances from the Bank gives rise, absent any proper explanation, to the inference that the intention to act in this way had already been formed at the time of requesting the Advances. It may be that a finding of fraud could also have been made in respect of the Fourth Advance, but, as explained in para 55 of the Judgment, I did not find the circumstances of this transaction similarly compelling. In any event, a finding of fraud in respect of the Fourth Advance would not assist the Applicants.
16. I should add two more comments regarding this first submission. The first is by way of correction of a point made by the Applicants. I did not find the Fourth Advance not to be fraudulent - I simply declined on the evidence to infer that it was fraudulent. The difference is important. Any argument based upon the proposition that I found the Fourth Advance not to be fraudulent is misconceived. Secondly, reliance is placed by the Applicants on the witness statements of various Prime witnesses. These statements were not adduced in evidence. They could have been adduced by the Applicants had they chosen to attend the trial but, as noted at para 10(5) above, it is at least questionable whether they would have done so. In their skeleton argument for trial the Applicants sought to argue that Prime’s evidence was worthless and should be considered “null and void” - the present submission marks a dramatic change of tack from the submissions made in the skeleton argument for trial.
17. Second, it is said that the inherent probabilities do not support the conclusion that Mr Mehta and Renish were involved in a fraud. The problem with that argument is that no explanation was volunteered - either in their pleadings or their skeleton argument, still less in evidence - for the remarkable transfers between Prime and Renish (or related companies) which occurred immediately after drawdown of the Fifth and Sixth Advances (see above).
18. Third, it is argued that I did not apply the correct tests when determining whether there was an actionable implied misrepresentation and, further, did not consider what representation is alleged to have induced the Fifth and Sixth Advances. It is said that I “assumed an actionable representation” and considered whether there were any grounds for inferring dishonesty. That submission is not quite correct. I did not assume an actionable representation. I accepted the Bank’s case that, at each request for funds to be transferred under the Facility, the Applicants (i.e. Renish and Mr Mehta) represented to the Bank that the payments were required to fulfil genuine bona fide commercial arrangements for the purchase, sale, and shipment of oil to Lanka, i.e. the arrangements in respect of which the drawdowns were requested. The Corinth Pipeworks case  DIFC CFI 024, referred to in para 27 of the Judgment, makes it clear (at paras 84-86) that in trade finance there is commonly an implied representation to that effect. This takes into account the relevant principles summarised in the Applicants’ skeleton at para 73. Those principles do not need to be set out formulaically in every judgment on the issue of fraudulent misrepresentation. Although I did say in that paragraph of my Judgment that all depended on the particular facts and circumstances, and I did not come back to give any further explanation, I should say that I regarded the existence of such an implied representation in this case as obvious. Indeed it was hardly disputed by the Applicants in their Defence (B/23/192-201): the Payment Representation is pleaded in para 12 of the Particulars of Claim and the Applicants’ response in para 6 of the Defence is: “Save that no admissions are made as to the nature of the alleged ‘payment representation’, and subject to the next paragraph below, paragraph 12 of the Particulars is a broadly accurate account of discussions that took place from time to time between Renish and/or Mr Mehta and the Bank.” This is curiously equivocal, as discussed with Mr Reed QC at the trial, but I did not (and do not) take this to be a blanket denial of the Bank’s case on Payment Representations. Having accepted that the Payment Representations were made, by necessary implication from the act of presenting the relevant documents to the Bank (i.e. contracts of sale and pro-forma invoices - see para 6 of the Judgment), it was but a small step to find that in respect of the Fifth and Sixth Advances those representations were false to the knowledge of the Applicants - the timing of the transfers from Prime to various accounts connected with Renish and for no discernible business reason (see paras 50-51 of the Judgment) gave rise, if unexplained, to the obvious inference that this was planned before presentation of the documents to the Bank.
19. Fourth, Fifth, and Sixth; I group these points together because they effectively make the same point. It is said that Mr Mehta’s circumstances were not such as to make a fraudulent activity of any value to him. Similarly, it is said that Renish’s earlier non-fraudulent operation of the Facility Agreement was inconsistent with the acts of a fraudulent party. And it is said that it was Prime, not Renish, that was the recipient of the Advances from the Bank, and Prime “has been found by virtue of the settlement not to be liable for fraud”.
20. The first two points, concerning Mr Mehta and Renish, carry little conviction absent some explanation as to how it can be said that the transfers from Prime to Renish (and Renish related entities), immediately after Prime had received the Advances into its account, were transfers in the ordinary course of business. I have already dealt with this point (see para 17 above). As to the third point, namely that it was Prime, not Renish, who received the Advances from the Bank, the argument seems to proceed upon the assumption that Prime has been found not to have been fraudulent. As pointed out above, this is not the case. The court knows nothing about the settlement between the Bank and Prime. Because Prime dropped out of the picture, the court has made no findings one way or the other as to whether Prime was or was not part of any fraudulent activity. This third point is simply misconceived.
21. For all these reasons I conclude that the Applicants have not shown that they would have a reasonable prospect of success at the trial if this Judgment were to be set aside and a new trial ordered. The Applicants have still not offered any coherent explanation for the transfers from Prime to Renish (and Renish connected entities) immediately after the Advances were made, transfers which cry out for an explanation. Nor have they explained, if they propose at a new trial to rely on evidence from Prime’s witnesses (despite their criticisms of it in their skeleton lodged before trial), which witnesses they would call and how they would compel their attendance; or if written witness statements were to be relied on, which parts of which statements would be relied on and how they would rely on some parts of the witness statements and not on other parts. The arguments in support of the present Set Aside Application fail to grapple with these important points. I am not persuaded that the Applicants can satisfy the requirements of RDC Rule 35.18 (3), and the Set Aside Application must be dismissed for this reason too.
The Permission Application
22. The Permission Application is made in the alternative to the Set Aside Application and must be dealt with on the hypothesis (which in fact reflects my decision) that the Set Aside Application has been refused. The merits of the Applicants’ case feature as one aspect of the argument on the Set Aside Application. They are central to the Permission Application. For the purposes of considering the Permission Application, I must proceed also on the assumption (since the Set Aside Application has been refused) that the Applicants had every opportunity of adducing evidence at the trial and presenting detailed arguments in rebuttal of the claim. Their failure to do so counts against them for the purpose of this application.
23. RDC Part 44 (as amended) deals with Appeals. The Applicants require permission to appeal to the Court of Appeal: Rule 44.5(1). Rule 44.19 provides that permission to appeal may only be given when the court considers that (1) the appeal would have a real prospect of success or (2) there is some other compelling reason why the appeal should be heard. The Applicants rely only upon the first of these grounds, namely that the appeal would have a real prospect of success. There is no suggestion of any other compelling reason why the appeal should be heard.
24. In considering this Permission Application, I remind myself that the word “real” in the expression “real prospect of success” means “realistic” as opposed to “fanciful”. The Applicants do not have to persuade me that they will probably succeed; it is enough that the prospects of success are realistic and not merely fanciful.
25. The Applicants present four discrete grounds of appeal. The argument in support of each of them is set out in some detail in the Applicant’s PTA skeleton. They are summarised conveniently in the Applicants’ combined skeleton at paras 68 ff. I propose to deal with them by reference to that summary in the combined skeleton.
26. Ground of Appeal 1 (combined skeleton paras 69-71). This ground of appeal sets out a number of factors which, it is said, either singly or in combination, counter any inference of fraud and ought to have been taken into account in my consideration of the case. I have already commented on this matter in considering the Set Aside Application (see paras 17-20 above). The Applicant’ commercial profile, the fact that the Facility Agreement was, in its inception at least, opened in respect of genuine commercial transactions, is prayed in aid. But I do not consider that they can possibly outweigh the adverse inference to be drawn from the unexplained transfers made from Prime to Renish almost immediately after receipt of the Fifth and Sixth Advances from the Bank. This is not, as suggested by the Applicants, a case of reversing the burden of proof - the fact of the transfers, their timing, their immediacy, and the identity of the recipients cried out for an explanation. Nor is it legitimate, in my view, for the Applicants to seek to rely in support of this Permission Application on evidence (about the Applicants’ commercial profile) which could have been given by Mr Mehta had he not decided to absent himself from the trial, and on evidence which could have been adduced from Prime (in the form of their witness statements) had Mr Mehta taken part in the trial, and had he decided (contrary to his skeleton argument for trial) that such evidence would have been of assistance to his case. In the absence of such evidence an inference of fraud was, in my view, inevitable, even if such an inference should only be drawn where it is the only reasonable inference.
27. Ground of Appeal 2 (combined skeleton paras 72-76). This ground of appeal contends that I did not apply the correct test for establishing whether or not there was an implied representation. I have dealt with this matter in para 18 above. I held that in presenting commercial documents (contracts and pro-forma invoices) to the Bank to release Advances under the Facility Agreement, the Applicants represented to the Bank that the payments were required to fulfil genuine bona fide commercial arrangements for the purchase, sale, and shipment of oil evidenced by these documents - in other words, that the documents being presented with the utilisation requests to induce the Bank to make the relevant Advances were genuine documents relating to genuine commercial arrangements. The implication is, to my mind, irresistible. Any court applying the principles to the facts of this case would, I believe, come to the same conclusion. In terms of the principles advanced by the Applicants at paras 73.1 and 73.2 of their combined skeleton, it is surely obvious that the Applicants must have understood that they were making implied representations to that effect; and they must have understood that the Bank would have understood them to be making such representations. Unless the Bank had been given to understand that the documents presented to it represented genuine commercial transactions, it would not have made the Advances under the Facility Agreement.
28. Ground of Appeal 3 (combined skeleton paras 77-83). This ground of appeal asserts that there is “an irreconcilable inconsistency between the Court’s rejection of the bulk of [the Bank’s] pleaded case in fraud, and the conclusion that there was a fraud in respect of the Fifth and Sixth Advances.” I respectfully disagree. I have set out earlier in this Judgment the reasons why I concluded that a fraud was established in respect of the Fifth and Sixth Advances but not in respect of the earlier Advances. I see no benefit in repeating what I have said before. To my mind, the Fifth and Sixth Advances were markedly different from what had gone before. I made my findings on the evidence adduced before me.
29. I should only add that reference to Prime’s evidence and pleaded case and the absence of any finding that Prime was also liable fraud are, to my mind, misconceived. No evidence from Prime’s witnesses was adduced at trial. Such evidence could have been adduced if Mr Mehta had taken part and had reconsidered his earlier hostile view of that evidence. I made no finding of Prime’s position because by the time the trial commenced there was no issue between the Bank and Prime.
30. Ground of Appeal 4 (combined skeleton paras 84-86). It is argued that there was no compliance with the duty of fair presentation and that, accordingly, the trial was not fairly conducted in the absence of the Applicants. I do not accept this criticism. I may not have used the term “fair presentation”, indeed I accept that I did not use that term, but even a brief reading of my Judgment will show that I raised a number of concerns with Mr Reed QC, sought clarification as to what evidence was or was not being adduced, ruled certain aspects of the Bank’s case inadmissible (for want of any relevant pleading) and found against the Bank on a number of its claims. I consider that I took all reasonable steps to ensure that points were taken on behalf of the Applicants that could properly be taken on their behalf.
31. In addition to the duty on the judge, I have always understood it to be the duty of counsel appearing for a party, when the other party is absent, to put before the court all legal points both for and against his client’s case and to identify arguments which have been raised in pleadings, correspondence and/or witness statements by the absent party. I have not heard it suggested, however, that in such circumstances counsel has a duty to lead evidence which contradicts his client’s case on the facts. That would, to my mind, be going much too far. Yet it seems to be assumed in this part of the Applicants’ skeleton that there is such a duty: see e.g. para 85.1, 85.2, 86.3, and 86.4.
32. For all the above reasons, I am not persuaded that the proposed appeal would have a real, i.e. realistic, prospect of success. The Applicants’ Permission Application is refused.
33. I shall refuse the Applicants’ Set Aside Application and their Permission Application.
34. The Applicants shall pay the Bank’s costs of the applications, to be assessed by the Registrar on the standard basis if not agreed.
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