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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 >> Customs & Excise v D'Souza & Ors [2001] EWCA Civ 901 (7 June 2001) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2001/901.html Cite as: [2001] EWCA Civ 901

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IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
(Mr Justice Turner)

		Royal Courts of Justice Strand London WC2 Thursday, 7th June 2001

1. LORD JUSTICE LATHAM: This is a renewed application for permission to appeal a decision of Turner J whereby he allowed, but only in part, an appeal from Master Rose. The decision of Master Rose was that the claimant should have judgment against the second defendants, who are the applicants today, to the effect that a property, known as 2 Alpine Copse, Bickley, and all moneys in an investment account at Lloyds Bank were in truth held by the second defendant on trust for the first defendant in the action, his son. The judge allowed the appeal to the extent that the applicant was given permission to defend the claim as to £34,590 plus interest.
2. This matter comes before this court therefore as a second appeal, and accordingly we can only grant permission to appeal if we are satisfied that the appeal would raise an important point of principle or practice or there is some other compelling reason for the Court of Appeal to hear it.
3. The background facts need to be shortly stated to understand the arguments of Mr. Clay on behalf of the applicants. They are these. The first defendant to the action, the applicant's son, had defrauded the Customs and Excise of very substantial amounts of money in the course of trading in relation to computers and associated equipment, essentially by use of fraudulent invoices which failed to disclose the full value of the goods which were being imported into this country. The first defendant was convicted of offences relating to that fraud and was sentenced to a period of imprisonment. The claimant's case against this applicant was that the account in relation to which the claim was made and the property to which I have referred were both, in effect, the proceeds of the fraud and had been put in the father's name, the applicant's name, in order to hide their provenance.
4. The matter, when it appeared before Master Rose, was dealt with without any substantial evidence produced on behalf of the applicant to support his assertion that the proceeds in the bank were in fact nothing to do with his son but were the proceeds of his own trading activities. Not surprisingly in view of that bare assertion, bearing in mind the extent of the use made of the accounts and the fact that the applicant was an old man, the Master found no answer provided to the inference which he considered to be inescapable, that the property was indeed the proceeds of the son's fraud.
5. Before Turner J there were, however, three substantial affidavits in addition to other evidence supported by documents, which purported to establish that there had indeed been significant trading activity by the deponents to the affidavits and the applicant, albeit that those activities could not entirely account for the sums of money which were seen to move in and out of the applicant's accounts. The judge considered those affidavits and came to the conclusion that they did not raise any doubt which justified trial as to the true provenance of the moneys in the accounts, save as to two payments, one of £19,170 and another of £15,400, which were payments which went directly into the account from a company of Mr. Hili and were supported by documents which suggested that they did indeed relate to trading activity between Mr. Hili and the applicant. Those two cheques totalled the sum of £34,570, which was the sum as to which the judge gave the applicant permission to defend.
6. Mr. Clay on behalf of the applicant today submits that the judge went wrong as a matter of principle in his approach to the issues before him and came to a conclusion at the end of the day which, in a sense, fundamentally undermined the conclusion that he had reached. As far as the issue of principle was concerned, Mr. Clay submits that the judge did that which he was not entitled to do in an application under Part 24 for summary judgment. He conducted a mini trial. He purported to consider, simply on the affidavit evidence before him, the credibility of the deponents in circumstances where that was an improper exercise of the judge's task, there being clear assertions as to fact which could only, in Mr. Clay's submissions, be properly dealt with, if there was doubt about their truthfulness, by a full trial of the case and therefore the calling of the witnesses themselves to be orally examined and cross-examined.
7. The second part of Mr. Clay's submission is that the conclusion that he came to as to the £34,570 undermines the whole basis upon which the claim was made. The claim was made, it is said, on the basis that the only inference that could be properly drawn from the existence of these large sums of money, and the large movements of money in the account to which the court was directed, could have been that the money was the result of the fraudulent activities of the son, because the applicant was not engaged at any material time in any business activity which could have provided an answer to the provenance of the moneys in question. By accepting, in the sense of giving permission to defend in relation to the £34,570, the judge was implicitly accepting that there was at least an argument for saying that there was trading activity at the time of those particular payments into the account.
8. Mr. Clay has put forward those arguments persuasively. However, it seems to me that the judge was entitled to approach the evidence put forward by the applicant in this case with a considerable degree of scepticism. The evidence was not made available to the court at the hearing before Master Rose. There was no adequate explanation as to why that was the case. Indeed, the material before the judge suggested that, if the material had indeed been genuine, then it could have been made available significantly earlier than it was. The evidence itself did not in any way establish or give an answer to the assertions by the claimant as to the majority of the moneys which existed in the accounts to which the judge was directed. If the evidence which was before the judge had the indicia of a partial ex post facto attempt to provide some explanation in order to establish that the defendant had a defence, a rather more secure basis would have been expected. The judge looked therefore at the documents and at the evidence given in the affidavits, and in my judgment was entitled to do so in order to see whether or not in truth he felt that there was anything that could properly be described as a genuine answer to the claimant's claim. We have not in fact had the opportunity to look at all the material which was put before the judge. We have been taken through the judgment of the judge where he deals with it. Speaking for myself, it seems to me that the judge's expressions of scepticism about the value of the material that was before him were fully justified on the basis that he sets out in his judgment. It seems to me that this was quintessentially a case where the production of late evidence justified the judge in looking with some care at the material before him, so as to determine whether there was any defence, however shadowy, to the claim being made on behalf of the claimant. The judge was entitled to approach it on that basis. No issue of principle arises in relation to the way in which he dealt with the issues before him. He came to a conclusion which seems to me to have been justified in so far as he has given proper reasons for concluding that there was only one part of the case as to which there was any arguable defence. I do not accept that, by accepting that in relation to one transaction there was material to justify the conclusion that it was a transaction of substance, that that in any way undermined the claimant's overwhelming case otherwise. I take the view that in those circumstances there is nothing in the arguments that Mr. Clay has put before us which could justify this court in hearing a substantive appeal. Applying the test that I have indicated this court has to apply in granting permission, it seems to me that no important point of principle or practice arises, and there is no other compelling reason for this court to hear this appeal. I would therefore refuse the application.
9. LADY JUSTICE ARDEN: I agree. Mr. Clay has argued that although this is a second appeal, in fact in this case the judgment of the judge turned on new evidence that was filed only after the first hearing before Master Rose. The reason for that filing of evidence was that the defendants had not taken the obvious step of putting that evidence in before the Master. The judge was then in the position of having to be the first tribunal to deal with that evidence and there was no explanation for its not having been filed before the Master.
10. As it is a second appeal, it has to meet the test laid down in CPR 52.13. In so far as Mr Clay has been able to identify a point of principle, it is that the judge should not have assumed the veracity of evidence from the defendants' witnesses. But that is putting it far too high. There can be no real prospect of success in submitting that the judge is always bound to accept the evidence put in in opposition to an application under Part 24. The judge's approach was justified by the special circumstances of the case as explained by my Lord, Lord Justice Latham. Accordingly, despite the persuasive submissions by Mr. Clay, I agree that the application should be dismissed.
Order: Application refused.