Bank Of Credit & Commerce International SA & Anor v Zafar

Time limits for appealing should not ordinarily be extended where the applicant deliberately chose to pursue an unsuccessful application under CPR 39.3 instead of appealing. That rule provides a complete and cumulative route for reopening a judgment entered in a party’s absence. The applicant must act promptly, show a good reason for failing to attend, and demonstrate reasonable prospects of success at a retrial. Failure on any one requirement removes the jurisdiction to reopen.

The discretion to extend appeal time must not become a means of circumventing that statutory procedural scheme. New evidence is admissible only where it satisfies the principles in [1954] 1 WLR 1489, including that it would probably have had an important influence on the result. Evidence relating to an incidental aspect of one transaction will not satisfy that test.

Rimer J entered judgment for the respondent banks against Mr Zafar in a substantial claim concerning allegedly dishonest payments to Transect Ltd. Mr Zafar had not attended the trial and later applied under CPR 39.3 to set aside the judgment. That application failed because, although he had reasonable prospects of defending the claim, he had no good reason for failing to attend.

Mr Zafar then sought permission to appeal the original judgment, applying more than nine months out of time, and sought to adduce a clean copy of a customer instruction concerning one of 16 payments. The central issues were whether time should be extended and whether the new document should be admitted.

1. Extension of time. The application to extend time was refused. The relevant considerations included the interests of justice, promptness, whether the default was intentional, the explanation for it, compliance with procedural requirements, responsibility for the default, prejudice, and the overriding objective under CPR 3.9 and CPR 1.1. [2002] 1 WLR 3095 provided a useful checklist.
2. Mr Zafar’s delay was substantial and unexplained. He had known of the judgment and had been told that the appeal period had expired. The Court accepted that his failure was deliberate and that his application to set aside the judgment had relied on disingenuous and untruthful explanations.
3. CPR 39.3 requires an applicant seeking to reopen a judgment entered in his absence to satisfy all three requirements: promptness, a good reason for failing to attend, and reasonable prospects of success. The rule leaves no residual discretion once one requirement is not met. The appeal-time discretion should not be used to achieve indirectly what the applicant could not achieve under rule 39.3.
4. New evidence. The application to admit the clean copy of the customer instruction was also refused. Applying [1954] 1 WLR 1489, the question was whether the trial judge would probably have reached a different conclusion if the clean copy had been available. The smudging was only incidental; other irregularities remained, and the document concerned one of 16 transactions. It was therefore unlikely to have materially influenced the judgment.
5. The applications for an extension of time and to admit new evidence were dismissed. The application for permission to appeal consequently did not arise. Costs were to be determined in accordance with section 11(1) of the Access to Justice Act 1999.

• Court of Appeal (Civil Division): dismissed the applications for an extension of time and admission of new evidence. The application for permission to appeal therefore did not arise.
• Chancery Division, Companies Court: Rimer J entered judgment against Mr Zafar and subsequently refused his application under CPR 39.3 to set aside the judgment.