Harb v HRC Prince Abdul Aziz Bin Fahd Bin Abdul Aziz

An oral agreement is not void for uncertainty merely because it refers to “certain allegations” or similar language. The surrounding documents and circumstances may identify the matters sufficiently, particularly where the agreement has been partly performed.

A person who contracts with another is presumed to be personally liable unless the alleged agent proves that personal liability was expressly or impliedly excluded. An undisclosed agent may generally be sued on the contract. A statutory declaration creates no illegality or perjury unless the statutory conditions are met and an untruth is established.

The claimant sought enforcement of an alleged oral agreement made with the defendant in June 2003. The defendant was said to have agreed to pay £12m and procure the transfer of two London properties in return for the claimant withdrawing allegations concerning the late King Fahd and providing related documents.

The claim had previously been assigned to the claimant following her bankruptcy. The defendant also raised sovereign-immunity and agency issues. The immunity issue had been rejected at first instance and on appeal, but the trial concerned whether the defendant personally contracted with the claimant, whether the agreement was void for uncertainty or illegality, and whether an alternative agreement arose when original documents were supplied.

1. Agreement. The claimant proved the primary oral agreement and, alternatively, an agreement arising from the defendant’s request for and receipt of the original documents. The evidence of the claimant and Mrs Mustafa-Hasan, together with contemporaneous documents and the lawyers’ evidence, was preferred to the defendant’s untested evidence.
2. Uncertainty. The references to “certain allegations” in the Statutory Declaration and draft contractual agreement referred back to the matters identified in the solicitor’s letter of 4 March 2003 and the affidavit of 7 May 2003. The agreement was therefore sufficiently certain. Courts are generally reluctant to invalidate partly performed agreements for uncertainty, and intrinsic evidence may explain contractual language.
3. Illegality. The Statutory Declaration was not made as required or authorised by law and was not caught by section 2 of the Perjury Act 1911. More importantly, the defendant had not established that any statement was untrue. The claimant’s belief about the allegations did not itself prove falsity. The illegality defence failed.
4. Agency. The burden lay on the defendant to establish that he contracted as agent for the late King and had excluded personal liability. Applying the principles summarised in Innovatis Investment Fund Ltd v Ejder Group Ltd [2010] EWHC 1850 (Ch), including the rule stated in Yeung Kai Young & Anr v The Hong Kong and Shanghai Banking Corporation [1981] 1 AC 787, the defendant failed to prove either the agency or any exclusion of personal liability. The agreement was therefore made between the claimant and defendant as principals. An undisclosed agency would not in any event have prevented the claimant suing the defendant.
5. Remedy. The claimant succeeded on both contractual bases. The court ordered payment of £12m and specific performance concerning the properties, with liberty to apply for damages if the defendant could establish by credible evidence that specific performance was impossible.

The judgment itself records earlier procedural steps, including the assignment of the claim from the trustee in bankruptcy and the dismissal of the defendant’s sovereign-immunity appeal. This was the first-instance trial of the contractual claim.