Dubai Bank Ltd v Abbas & Anor [1996] EWCA Civ 1342 (17 July 1996)

IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE QUEEN’S BENCH DIVISION
(MR JUSTICE POTTER)

Royal Courts of Justice
Strand
London WC2
Wednesday 17 July 1996

B e f o r e :

LORD JUSTICE SIMON BROWN
LORD JUSTICE SAVILLE
LORD JUSTICE ALDOUS

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DUBAI BANK LIMITED
Plaintiff/Respondent
– v –
FOUAD HAJI ABBAS
PENINNSULAR INTERNATIONAL INC
First Defendant/Appellant

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(Transcript of Handed-down Judgment of
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____________________MR M PICKERING QC (Instructed by Zaiwalla & Co, London WC2A 1ZZ) appeared on behalf of the Appellant.
MR N ELLIOT QC and MISS A GREEN (Instructed by Kennedy’s, London EC1Y 4TY) appeared on behalf of the Respondent

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LORD JUSTICE SAVILLE: These proceedings, as they now stand, concern a claim brought by the Dubai Bank Limited against Fouad Haji Abbas for money allegedly owing on accounts which the latter held with the former in Dubai. The Bank obtained leave ex parte to serve the proceedings out of the jurisdiction and Mr Abbas then applied under Order 12 Rule 8 to set aside this service.

The matter came before Potter J (as he then was) who in a judgment dated 24th December 1994, dismissed this application on the grounds that the Bank had made out a good arguable case that Mr Abbas was domiciled within the jurisdiction, so that the matter came within Order 11 Rule 1(1)(a) of the Rules of the Supreme Court. I should note that the Bank also sought to rely on the fact that they had obtained a judgment in Dubai against Mr Abbas and had included a claim based on this judgment in their Writ, so that the matter came within sub-Rule (1)(m). The Judge, however, concluded that the Bank had failed to establish a good arguable case that the judgment of the Dubai Court was valid and enforceable under English law and set aside the writ so far as it concerned a claim on that judgment. Since there is no challenge to this holding, the subject matter of this appeal (brought by Mr Abbas with the leave of the Full Court) is whether the Judge was right on the question of domicile.

I am firmly of the view that appeals to this Court in interlocutory cases concerning jurisdiction should be rare, for the reasons I gave in IP Metal v Ruote OZ SpA (No.2) [1994] 2 Lloyd’s Rep. 560. In the present case, however, there is an exceptional feature.

Under Order 11 Rule (1) (4) domicile is to be determined in accordance with the provisions of Sections 41 to 46 of the Civil Jurisdiction and Judgments Act 1982. The relevant provision in the present case is Section 41, sub-sections (3) and (6) of which provide as follows:-

“(3) Subject to subsection (5), an individual is domiciled in a particular part of the United Kingdom if and only if-

(a) he is a resident in that part; and

(b) the nature and circumstances of his residence indicate that he has a substantial connection with that part.

(6) In the case of an individual who-

(a) is resident in the United Kingdom, or in a particular part of the United Kingdom; and

(b) has been so resident for the last three months or,

the requirements of subsection (2)(b) or, as the case may be, subsection (3)(b) shall be presumed to be fulfilled unless the contrary is proved.”

In the present case sub-section 5 is of no relevance.

The case made by the Bank was that Mr Abbas was resident at Flat 2, York House, York House Place, London W8. In his judgment the Judge set out in numbered paragraphs the matters relied upon by the Bank. They were these:-

“(1) Since 1991 Mr Abbas’ name has appeared on the local Community Charge Register as the occupier of the flat. Although Mr. Abbas has asserted through his solicitor that he has no knowledge of that fact and that he did not complete any forms, he has given no explanation and made no suggestion as to how the entry could have been registered without his knowledge or authority, nor who has since received the demand and paid the charge.

(2) The registered owner of the flat is Peninsular, which the Bank asserts is plainly a nominee company of Mr. Abbas, acting in his interests or, at least, dancing to his tune. The indications for that are as follows:

(a) Peninsular make the flat available to be used by no one other than the family of Mr. Abbas.

Despite Mr. Abbas’ assertion that he is parted from his wife (who lives in Dubai) and his denial that he resides or stays at the flat and despite his case that, when in England, he always stays at a hotel or with a friend, he was, on Mr. Ellison’s visit to the flat on 1st September 1993 without prior arrangement, to be found sleeping there. Mr. Abbas has not identified the hotel or hotels at which it is said he stays, nor the names or addresses of the friends referred to.

(c) When the flat was first purchased and fitted out, Mr. Abbas was concerned in the arrangements and apparently authorised payments in respect of such work.

(d) Despite the denial of Mr. Abbas of any connection with Peninnsular, documents relating to that company (and Mr. Malik Noor) were found at the premises of a Belgian company, TTS Diamonds NV, of which Mr. Abbas is, or was, Managing Director and in which he and his wife own all the shares.

(e) Despite questions being raised in these proceedings as to the ownership of Peninnsular and his relationship with it, the evidence for Mr. Abbas, through his solicitor, fails to give any convincing explanation of the matters mentioned above and specifically refuses to name the third party alleged to be the beneficial owner of Peninnsular upon the stated grounds that Mr. Abbas does not wish to involve him for fear of reprisals in Dubai.

(f) Peninnsular, as a party to these proceedings and the subject of a Mareva injunction against it in respect of, inter alia the flat, has taken no separate steps to have the injunction lifted in circumstances where, upon Mr. Abbas’ account, such relief is entirely unwarranted.

(3) There is evidence from Mr. Ellison to the effect that, Mr. Abbas, by gesture, indicated that he owned the flat.

(4) There is evidence to the effect that persons acquainted with the occupation of the flat believe it to be used only by Mr. Abbas and his family.”

The first of these points seems on the face of it to be particularly telling. However, it is now clear from investigations made on behalf of Mr Abbas after the hearing that it is wholly inaccurate and that Mr Abbas has never been registered as an occupier of the flat for Community charge. Those acting on behalf of Mr Abbas have explained that the reason they had not investigated the matter before the hearing was that they assumed (to my mind with some justification) that this point had been carefully checked by those acting on behalf of the Bank and that accordingly there seemed little point in spending time and money cross-checking such a matter.

The allegation that Mr Abbas was registered for Community Charge is contained in an affidavit dated 11th August 1994 sworn by Mr Ellison , who described himself as a consultant to the Bank and who deposed that enquiries regarding the flat that had been made by enquiry agents revealed that the Community Charge Register for the flat showed that the property was subject to a standard charge registered in the name of Mr Abbas and Peninsular International Inc., and had been so registered since 1st April 1991.

No explanation has been forthcoming from the Bank as to how the enquiry agents they had employed had come to supply them with this false information, which was not only used before Potter J , but also in support of the original ex parte application for leave to serve out of the jurisdiction, which came before Rougier J in August 1994.

On behalf of the Bank Mr Elliott QC, in my view wholly correctly and properly, accepted that had the falsity of this point come directly to his clients’ attention after the hearing, rather than that of the Appellants, it would have been incumbent on his clients to inform this Court; and that in any event his clients could not seek to rely on this false point on the hearing of the appeal. In these circumstances, it is clear that this is not a case where this Court is being asked simply to review the material considered by the Judge and to come to a different conclusion, but a case where both the Judge granting the ex parte application and the Judge considering the inter partes application to set aside service, had put before them what was on the face of it a highly material matter, on which the Bank clearly placed great reliance, but which turns out to be false. In such circumstances it is to my mind obvious that this Court must now consider the matter afresh.

Although there was some discussion before us on what is meant by the word “resident” in Section 41 of the Civil Jurisdiction and Judgments Act 1982, it seemed to me that the parties were really little apart on this aspect of the case.. The leading case is Levene v Commissioners of Inland Revenue [1928] AC 217. Although this was a tax case, it is clear that the meaning given to the word in that case was its ordinary meaning, uncoloured by the fact that it was used in a revenue context: see the case itself and R v Barnet London Borough Council.[1983] 2 AC 309 at 341. Mr Pickering QC for Mr Abbas suggested that although the present case is not a Convention case, since Section 41 was applicable to Convention cases, it would be correct to have regard to European sources in ascertaining the meaning of the word in this section. I would not necessarily dissent from this, but since there appears to be nothing in these sources to suggest that the ordinary English meaning of the word should be displaced or modified, the suggestion carries the matter no further. On the basis of Levene it seems to me that a person is resident for the purposes of Section 41 (3) in a particular part of the United Kingdom if that part is for him a settled or usual place of abode.

A settled or usual place of abode of course connotes some degree of permanence or continuity. In his judgment Potter J said that section 41(6) suggested that the threshold for residence under the 1982 Act was low. With respect, I do not find any such suggestion in this sub-section. It is true that the sub-section provides a rebuttable presumption of “substantial connection” if the residence has lasted for the last three months or more, but it provides no guidance on the question whether or not the person has become resident. Depending on the circumstances of the particular case time may or may not play an important part in determining residence. For example, a person who comes to this country to retire and who buys a house for that purpose and moves into it, selling all his foreign possessions and cutting all his foreign ties, would to my mind be likely to be held to have become immediately resident here. In other cases it may be necessary to look at how long the person concerned has been here and to balance that factor with his connections abroad. Since the answer to the question depends on the circumstances of each case, I did not find the other authorities cited to us of any real assistance.

At the outset of the hearing before us we acceded to an application made by the Bank to adduce further evidence. In part this application was not resisted by Mr Abbas; but as to the part to which objection was made it seemed to us that since we were hearing the matter afresh, and since there was material to suggest that the evidence could not with the exercise of due diligence have been made available to put before the judge, it would be proper to consider it, since on one view at least it could be said to be of significance to the case made by the Bank.

In more detail that case is that in 1989 Mr Abbas consulted London Estate agents with a view to acquiring a luxury flat in London for himself and his family; that in February 1991 he acquired the flat, using Peninsular Inc., a company that he owned or controlled and on whose behalf he signed the lease; that thereafter for some two years he was involved with the refurbishment of the flat, dealing personally with a London firm of interior design consultants and with the licence that had to be obtained from the landlord for the alterations (which he also signed on behalf of Peninsular); that his wife and family have lived in the flat since it was completed in about October 1991; that in September 1993 Mr Ellison, visiting the flat without prior arrangement found Mr and Mrs Abbas there, on which occasion Mr Abbas indicated by gesture that he owned the flat; and that (according to enquiry agents) the porter or housekeeper of the block had said that the flat was only used by Mr Abbas and his family. The Bank also call in aid that Mr Abbas has accepted that he spends some two months a year in England. Based on this material, the submission is that the Bank have shown a good arguable case that in August 1994, when the Writ was issued and leave obtained to serve Mr Abbas out of the jurisdiction, Mr Abbas was resident in London, in essence because he had established a home here in the form of the flat.

This is not, however, the whole story. The Bank have only found Mr Abbas actually here on two occasions, one of which was at the flat and the other at a London hotel. Indeed, there is little doubt that Mr Abbas spent a great deal of time in Belgium, where he was conducting a business. Furthermore, though the interior decorators of the flat wrote a large number of letters to Mr Abbas about details of the refurbishment and requesting payment, almost all of this was by fax to Belgium. They never met him at the flat though on frequent occasions they met, consulted and took instructions from Mrs Abbas there. Furthermore, the enquiry agents employed by the Bank reported in May 1994 that they had made a number of calls at the flat between March and May 1994, only to be told by Mr Abbas’ son or the porter that Mr Abbas was not there and that it was not known when he would next be in London. These agents also reported that they had spoken by telephone to the porter on 11th May 1994, who had told them that Mr Abbas had been at the flat a few days earlier, but had stayed for only about an hour and not overnight.

Mr Abbas himself has said through his solicitors that he resides in Pakistan with his brother and that he does not reside in London. He says that he does not own or control Peninsular, which is beneficially owned by a third party he is reluctant to name, nor does he own or have any beneficial interest in the flat. He says that he lives separately from his wife, who is a member of a rich and powerful Dubai family and who spends most of her time there, where he dare not go because he fears being arrested and held until he pays the alleged indebtedness. He accepts that he was involved in the acquisition and refurbishment of the flat on behalf of this third party and that he has made payments in respect of that refurbishment, though not with his own money. He says that his wife does use the flat when in London, as does one of his sons who has been studying here. He says that he has stayed on a few occasions at the flat, but usually with friends or at hotels during his time in England, which is on holiday for up to about two months a year. He denies that by gesture or otherwise he ever indicated to Mr Ellison that he owned the flat.

It is obvious from his judgment that the Judge thought little of the credibility of the assertions made by Mr Abbas through his solicitor. These, of course, included the assertion that Mr Abbas knew nothing of the registration for Community charge in his name and had not authorized it. This assertion would indeed, apart from anything else, cast great doubt on Mr Abbas’ denial that he resided here (and indeed on his credibility generally) if there was such a registration, but as matters now stand it is a wholly acceptable assertion and indeed obviously true. To my mind, having subtracted this element from the available material, the case made by the Bank and the materials upon which they rely are insufficient to raise such doubts about the credibility of Mr Abbas that what he says can be wholly or largely discounted. Indeed, to a large degree the basic facts upon which the Bank rely are consistent with what Mr Abbas says. It is true that Mr Abbas has been reticent about identifying the owner of the flat, but I can find nothing to contradict his explanation that to do so would prejudice the position of his wife and the person concerned, both of whom still have close connections with Dubai.

In conclusion, having weighed these matters, I am unpersuaded that there is a good arguable case that in August 1994 Mr Abbas was resident in this country, since I am not persuaded on the available material that it is well arguable that the flat can properly be described, so far as Mr Abbas is concerned, as a settled place of abode or, as the Bank put it, a home. Since the case made by the Bank for domicile here depended on this, it follows that I would allow this appeal.

LORD JUSTICE ALDOUS: I agree

LORD JUSTICE SIMON BROWN: I also agree

Order: Appeal allowed with costs here and all outstanding costs matters below. Orders for substituted service and service out of jurisdiction to be discharged. Ancillary Mareva order against both defendants to be discharged. Minute of Order to be provided by counsel.

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