Abdulrida & Ors v Al-Najar & Ors

A trial judge may admit an absent party’s witness statement as hearsay, but may exclude it where the party’s failure to submit to cross-examination makes exclusion necessary in the interests of justice. The evidence’s weight depends materially on the reason for the absence and the absence of cross-examination.

In adversarial litigation, the default position is that the judge need not put an absent party’s case to witnesses. Case management powers concerning litigants in person do not require the judge to descend into the arena.

A false representation of a person’s present intention may justify rescission where it induced the contract. Proprietary estoppel may arise from an oral promise concerning land notwithstanding statutory formalities, and relief may include an equitable charge securing repayment where that is necessary to avoid the claimant’s detriment.

The claimants, Kuwaiti investors and companies controlled by them, brought proceedings against Mr Al-Najar and companies associated with him concerning investments in property and development projects. They alleged fraud, breach of trust, misrepresentation, breach of contract, deceit and proprietary claims.

Mr Al-Najar did not participate in the trial but asked the court to consider his lengthy witness statement. The court also considered the admissibility and weight of evidence from other absent witnesses, the effect of Mr Al-Najar’s bankruptcy, claims for rescission and restitution, and Mr Al-Habib’s claim concerning a partially built house at Monkston Park.

The central issues were how the court should conduct an adversarial trial involving an absent party, whether the investments were induced by actionable misrepresentations, and what equitable relief was appropriate for the Monkston Park property.

1. Procedure and hearsay. The court admitted Mr Al-Najar’s witness statement as hearsay, giving him the benefit of considerable doubt about his inability to participate. Under [2005] 1 WLR 637, the court had power to exclude evidence from a party unavailable for cross-examination, but exclusion was required only if justice exceptionally demanded it. The absence of cross-examination substantially reduced the weight of evidence contradicting the claimants’ sworn evidence.

2. The judge’s role remained adversarial and impartial. CPR rule 3.1A did not require the court to cross-examine witnesses on behalf of an absent party. The default position was that the court did not have to put the absent party’s pleaded or evidential case to the opposing witnesses, although it could ask questions to clarify evidence.

3. Investments and rescission. The claimants established actionable misrepresentations, including representations that investments would be retained and used for specified projects, that Mr Al-Najar would invest his own money, and that Prestige Homes Ltd had a 2010 turnover of £20 million. A representation as to present intention includes an implied representation that the intention is genuinely held. The misrepresentations induced the relevant contracts and justified rescission, restitution and, where established, damages for deceit and conspiracy.

4. Knowledge and conduct of Mr Al-Najar, as managing director, could be attributed to Broughton for the purpose of rescission. The court declined to decide unnecessary and wider allegations concerning the prospects of projects where an established misrepresentation already determined the claim.

5. Monkston Park. The oral arrangement concerning Plot 4 was not a binding contract for the sale of land under section 2 of the Law of Property (Miscellaneous Provisions) Act 1989. Nevertheless, the promise to build and transfer the house could support proprietary estoppel. Mr Al-Habib relied on the promise and suffered detriment by paying £400,000. The appropriate relief was repayment of £400,000 plus interest, secured by an equitable charge or lien over Plot 4, rather than the entire beneficial interest.

6. The court rejected the contention that the payment of £1.3 million for the Ashlands plots was subject to a Quistclose trust. A sub-sale arrangement alone did not impress the payment with such a trust. Orders were to be prepared to give effect to the findings.

First-instance judgment. No prior appellate decision concerning this claim is stated in the judgment.