American Express Services Europe Ltd v Al-Shabrakah

A trial should not ordinarily be vacated where the application is made at the last moment, the relevant circumstances were known earlier, and adjournment would waste court and party resources or create further uncertainty. Contractual notification requirements governing disputed card transactions are enforceable. A customer who fails to raise concerns within the agreed period, absent exceptional circumstances, remains liable for the charges. Failure to provide a contractually required fraud declaration may also forfeit contractual protection against liability. Written confirmation of substantial charges may amount to express acceptance of them. Where hearsay notices comply with the Civil Evidence Act 1995 and the witnesses cannot be secured, the evidence may be admitted, although its weight may be reduced by the absence of cross-examination.

American Express Services Europe Ltd claimed unpaid balances and interest under two credit-card accounts. The defendant disputed liability for charges, alleging fraud and denying that he had conducted transactions with the relevant merchant. Before trial he applied to vacate the hearing because of his ill health. He also opposed the claimant’s reliance on hearsay statements from witnesses in Saudi Arabia and sought permission to cross-examine them. The central issues were whether the trial should be adjourned, whether the hearsay evidence could be admitted, and whether the contractual terms made the defendant liable for the disputed transactions.

1. The application to vacate the trial was dismissed. The power under CPR 3.1 had to be exercised consistently with the overriding objective. The application was made far too late, without adequate explanation, despite the defendant’s health problems having existed for a considerable period. Vacating the trial would waste court time, incur unnecessary costs and cause further delay. The defendant had also failed to serve a witness statement or participate properly in trial preparation. The possibility that his representative might have difficulty obtaining instructions did not justify adjournment.
2. The claimant was entitled to rely on the Saudi witnesses’ statements as hearsay. The notices complied with CPR 33.2 and Civil Evidence Act 1995, section 2. CPR 33.4 could not usefully require cross-examination where the witnesses were unwilling to attend court. The statements were admitted, with their weight to be assessed in light of the absence of cross-examination.
3. The defendant was contractually liable for the Gold Account balance. His allegation that the claimant had accepted the alleged fraud was rejected on the evidence.
4. The defendant was liable for the disputed Centurion transactions. He had expressly confirmed two substantial transactions in writing, and clauses 2.1.5 and 2.2 fixed him with liability for them. The defence based on ex turpi causa non oritur actio had no evidential foundation.
5. The contractual requirement to check statements and raise concerns within one month, extendable to 13 months only in exceptional circumstances, applied to the earlier transactions. No exceptional circumstances existed. The defendant’s delay therefore made him liable under the Contract.
6. The failure to complete the requested fraud declaration was a breach of clause 20.5. It meant that the defendant forfeited any right to be indemnified for the disputed losses. The claimant therefore had an unanswerable contractual claim for the Centurion balance and contractual interest. Judgment was entered for the claimant in the amount sought, with further submissions on the appropriate order.