Islamic Investment Company of the Gulf (Bahamas) Ltd v Symphony Gems NV & Ors

CPR r 3.1(7) may be used to vary or revoke an interlocutory order where there has been a material change of circumstances or the facts on which the order was made were materially misstated. The jurisdiction is exceptional and does not provide a substitute for an appeal. Where a solicitor’s serious misconduct prevented a party from presenting its case properly, materially affected the order, and gave good reason to believe that the solicitor acted against the client’s interests, the court may set the order aside. In an extraordinary case involving apparent litigation fraud and serious misconduct at the relevant hearing, justice may require unconditional relief.

The claimant obtained enforcement and committal orders against the second defendant, Rajesh Mehta, in long-running proceedings concerning an unpaid judgment debt. The principal orders challenged were a suspended committal order made by David Steel J. and a later order activating that suspension and issuing a bench warrant.

Mehta’s solicitor, Andrew Benson, subsequently conducted wholly fictitious litigation for more than three years, fabricating hearings, judgments, orders, correspondence and counsel’s involvement. Mehta applied under CPR r 3.1(7) to set aside adverse orders made during Benson’s representation. The central issues were whether the jurisdiction was engaged, whether Benson’s earlier misconduct materially affected the orders, and whether relief should be granted in the court’s discretion.

1. Jurisdiction. The orders challenged were interlocutory or enforcement orders rather than final orders determining the issues in the litigation. CPR r 3.1(7) was therefore available. The authorities, particularly Tibbles v SIG plc [2012] EWCA Civ 518, establish that the power is principled and exceptional. Its primary circumstances include a material change of circumstances or material misstatement of the facts on which the order was made.
2. Suspended committal order. The alleged failures in the preparation and conduct of the earlier hearings did not establish that the order had been materially affected. The contempt arose from a complete failure to produce documents before the relevant misconduct. The findings that the contempt had not been purged were emphatic and had been upheld on appeal. The application to set aside that order, and the other orders challenged, was refused.
3. Activated committal order and bench warrant. The evidence established serious misconduct in the preparation for and conduct of the hearing. Benson failed to follow instructions to seek an adjournment, failed to prepare responsive evidence, delayed important material, failed to instruct counsel, misrepresented the position to the court, and appeared without instructions. The fictitious litigation began within two weeks of the hearing and provided powerful corroborative context.
4. Those failures significantly affected the outcome. The judge who made the order had been given a materially inaccurate picture of Mehta’s instructions, medical position and preparation. There was good reason to believe that Benson was acting against Mehta’s interests. The requirements for exercising CPR r 3.1(7) were therefore satisfied.
5. Although Mehta’s history as an unpaid judgment debtor and enforcement resistor weighed heavily, the case was at the extreme limits of what was out of the ordinary. Justice required the activated committal order to be set aside unconditionally. The application succeeded in relation to that order and failed in all other respects.

The judgment records that the suspended committal order had previously been upheld on appeal by the Court of Appeal in [2010] EWCA Civ 709. That decision concerned the underlying enforcement litigation and was not the decision under appeal in this application.