Summary

When considering whether to strike out a claim by reason of the claimant's forgeries and fraudulent evidence, the sole question was whether the claimants had forfeited the right to have an adjudication of their claims; the defendant's conduct was irrelevant.

Facts

The first appellant (Z) appealed against a decision (Masood v Zahoor (2008) EWHC 1034 (Ch)) refusing his application to strike out for abuse of process claims made by the first respondent (S). S's main claims were for unpaid salary as a result of his summary dismissal and for an entitlement to a percentage of the shares in the third appellant company as compensation for services rendered. The judge found that S and Z had been guilty of forgery and perjury in their conduct of the proceedings. In response to Z's application to strike out the claims for abuse of process, he indicated that he would have granted the application if he had been dealing solely with S's misconduct, but that Z had also been guilty of misconduct. He went on to decide the main issues in S's favour. Z argued that (1) the judge had erred in not striking out all of S's claims as an abuse of process on the grounds that some, at least, were based on forged documents and false evidence; (2) the judge had based his decision on S's claim for entitlement to the shares on a basis not put forward in the pleadings, evidence or submissions; (3) the judge had been wrong to conclude that there was no justification for S's summary dismissal.

Held

(1) Where a claimant was guilty of misconduct in relation to proceedings which was so serious that it would be an affront to the court to permit him to continue to prosecute his claim, then the claim could be struck out for that reason, Arrow Nominees Inc v Blackledge (2000) CP Rep 59 CA (Civ Div) applied. In theory, it would have been open to the judge in the instant case, even at the conclusion of the hearing, to find that S had forged documents and given fraudulent evidence, to hold that he had thereby forfeited the right to have the claims determined and to refuse to adjudicate on them, but it would be a very rare case where it was appropriate to do so. Once the proceedings had run their course, striking out would not prevent the further waste of costs and it was difficult to see what purpose would be served by striking out rather than making findings in the usual way. In the instant case, it had been too late to strike out the claims at the end of the trial, but the judge had been wrong to hold that the fact that Z had also been guilty of misconduct was a reason for him not to exercise the power to strike out. The sole question was whether, by reason of S's forgeries and fraudulent evidence, the claimants had forfeited the right to have an adjudication of their claims; the defendant's conduct was irrelevant. The answer to that question did not involve an exercise of weighing the claimant's misconduct against that of the defendants. (2) S had pleaded a contractual claim for the shares that he had failed to establish because the alleged contract had been forged. The judge had not been entitled to find the claim proved on another, unpleaded and unproved ground. (3) Z had been entitled to dismiss S summarily for procuring forged documents whilst still employed.

Appeal allowed