Court of Appeal

Published July 14, 2009

Ul-Haq and Another v Shah

Before Lady Justice Smith, Lord Justice Moses and Lord Justice Toulson

Judgment June 9, 2009

It was not possible to strike out a genuine claim on the ground that the claimant had been involved in a fraud upon the court in respect of an associated claim.

The Court of Appeal so stated in a reserved judgment when dismissing the appeal of Anita Shah against Mr Justice Walker who, on July 31, 2008, in Birmingham District Registry upheld a decision of Mr Recorder Parkes, QC, in Birmingham County Court on February 4, 2008, not to strike out genuine claims by Wasim Ul-Haq and Zahida Parveen for personal injuries suffered in a traffic accident caused by Mrs Shah.

Mrs Shah admitted liability for colliding with the claimants’ vehicle. The claimants sought compensation for damage to the vehicle and for whiplash injuries to themselves and to Mr Ul-Haq’s mother, Samara Khartoon. Mrs Shah denied that Mrs Khartoon was in the car or was injured and disputed any personal injury claim.

At conclusion of the trial of the disputed issues, the recorder, and the judge on appeal, found that there had been a fraudulent claim in respect of Mrs Khartoon but refused to strike out the personal injury claims of Mr Ul-Haq and Mr Parveen.

Mr Ralph Lewis, QC and Mr Alasdair Brough for Mrs Shah; the claimants did not appear and were not represented.

LADY JUSTICE SMITH said that there was no general rule of law, whether in contract or tort, that the dishonest exaggeration of a genuine claim would result in the dismissal of the whole claim. The invariable rule was where the judge found that a claim was dishonestly exaggerated, he would award limited damages appropriate to his findings. It was well established that a claimant would not be deprived of damages to which he was entitled because he had fraudlently attempted to obtain more than his entitlement.

Should the position be different where the claimant’s attempted fraud consisted of lying to support the claim of another person rather than lying to enhance his own claim?

There was no logical justification for suggesting that the claimant who lied about another person’s claim should be treated more severely than the claimant who lied about his own claim. The policy of the law had not been to shut them out from justice altogether, save where the claim related to an insurance contract: see Axa General Insurance Ltd v Gottlieb (The Times March 3, 2005; \[2005\] 1 All ER (Comm) 445).

In the light of that, consideration of rule 3.4(2) of the Civil Procedure Rules was a side issue. However, as the lower courts had held that the rule provided a discretionary power to strike out a genuine claim at the end of a hearing, based on the Court of Appeal decision in Arrow Nominees Inc v Blackledge (The Times July 7, 2000; \[2001\] BCLC 167), her Ladyship had to record that that view was mistaken. Where, as here, the trial had taken place and the recorder had been able to reach reliable findings, it was not open to him to strike out a genuine claim. The judge must give effect to his findings.

The judge could make his disapproval of the way in which the court’s time and the parties’ money had been wasted by an order for costs. But he could not mark his disapproval by depriving the claimant of what he had proved to be his entitlement.

The expression “strike out” had a timehonoured use and it was not apt to describe a decision that a judge made at the end of the trial. At that stage, the judge either upheld the claim or dismissed it. He did not strike it out. The rule was primarily designed to permit a judge to strike out a claim before or at the beginning of the trial.

Lord Justice Moses and Lord Justice Toulson agreed.

Solicitors: Morris Orman Hearle, Cheltenham.

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