Seeking more information – Part 18

One of my frequently-used tools for “fleshing out” a defendant’s case in a possession claim concerning allegations of sub-letting, false representation, no longer living at the demised premises, only or principal home, ‘false succession’ etc is by use of the CPR Part 18 procedure:

The Practice Direction to Part 18 effectively requires, first, an attempt at pre-litigation information request:

The litigation use of the Part 18 process was considered in the recent High Court case of (1) HRH Prince Khaled Bin Sultan Bin Abdulaziz Al Saud (2) HRH Princess Deema Bint Sultan Bin Abdulaziz Al Saud v (1) Ronald William Gibbs (2) Sunnydale Services Ltd [2022] EWHC 706 (Comm) where Mr Richard Salter QC, sitting as a Deputy Judge of the High Court, said (Emphasis in underlining):

“27. In support of his submission that the court should take a liberal approach to the scope of CPR Pt 18, Mr Atrill relied upon Harcourt v Griffin[2007] EWHC 1500 (QB), [2008] Lloyd’s Rep IR 386. In that case, Irwin J granted an application by a personal injury claimant for an order under CPR Pt 18 for further information to establish the full nature and extent of the insurance cover enjoyed by the respondents who were liable for his injuries. Mr Atrill particularly drew my attention to Irwin J’s observation (at [10]) that:

The nature and extent of the Defendants’ insurance cover is not in itself a ‘matter .. in dispute in the proceedings’ between the Parties, in the sense that the proper quantum of damages payable to the Claimant could be determined without determining whether the Defendants can actually pay those damages. However, it appears to me that the wording of CPR. r. 18 requires to be interpreted reasonably liberally. The purpose of the jurisdiction must be taken to be to ensure that the Parties have all the information they need to deal efficiently and justly with the matters which are in dispute between them. Moreover, the wording need not be taken to imply that there must be a live disagreement about the relevant issue, since on very many occasions parties are properly required to furnish information pursuant to CPR r. 18 precisely to discover whether there is or is not a live disagreement between the parties on a given point. The whole thrust of the new approach to civil litigation enshrined in the Civil Procedure Rules is to avoid waste of time and cost and to ensure swift and, as far as possible, proportionate and economical litigation. Therefore, I have no hesitation in finding that if there is no rule of law or significant rule of practice to the contrary, then the wording of CPR r. 18 is broad enough to cover information of this kind…”

32. With great respect to Irwin J, it seems to me that his more liberal and pragmatic approach to CPR Pt 18 risks stretching the scope of the rule beyond that which can reasonably be thought to be contemplated by its terms. The rule expressly says that the matter about which clarification or further information can be sought must be one “which is in dispute in the proceedings”. That wording, in my judgment, makes it clear that there are two cumulative aspects to this restriction: the matter must be “in dispute”, and that dispute must be “in the proceedings”.

33. That means (for example) that requests under Pt 18 cannot be used for the purpose of obtaining material for cross-examination as to credit (Thorpe v Chief Constable of Greater Manchester [1989] 1 WLR 665), or to obtain material to support different claims between the same parties or claims against different parties (Trader Publishing Ltd v Inc [2010] EWHC 142 (Ch)). As Morgan J observed in Barness v Formation Group Plc [2018] EWHC 1228 (Ch) at [10]:

34. The terms of the Practice Direction also make it clear that requests and orders under CPR Pt 18 must be strictly confined to matters which are reasonably necessary and proportionate for the stated purposes. In Hall v Sevalco Ltd [1996] PIQR 344 at 349 (a case about interrogatories under the RSC) Lord Woolf MR observed that “necessity is a stringent test”: and in King v Telegraph Group Ltd [2004] EWCA Civ 613, [2005] 1 WLR 2282  at [63], Brooke LJ laid particular stress on the strictness required by the terms of the Practice Direction:

35. In my judgment, the requirement of the rule that the information sought must relate to a “matter which is in dispute in the proceedings”, and the requirement of the practice direction that any request must be strictly confined to matters which are reasonably necessary and proportionate for one or other of the stated purposes, are threshold conditions. If those conditions are not satisfied, then the court simply has no jurisdiction to make any order under CPR Pt 18 (though, as Thirlwall J has pointed out, there may be other powers available to the court to assist in avoiding the waste of time and costs and in achieving the “swift and .. proportionate and economical litigation” referred to by Irwin J).

36. If, however, those threshold conditions are satisfied, then the question becomes a matter for the court’s discretion. The power under CPR Pt 18 is one of the court’s case management powers, and its exercise should be considered in the context of the overall case management of the action: see Toussaint v Mattis [2001] CP Rep 61, CA, at [16], per Schiemann LJ.”

The Judge importantly concluded:

“46. One of the complaints made by the claimants about Mr Gibbs’ responses to the RFI is that they show that he has failed to exercise reasonable diligence in examining relevant documents and undertaking reasonable enquiries. Mr Atrill invited my attention to the following passage in paragraphs [20.96], [20.98] and [20.101] of Matthews and Malek, Disclosure (5th edn, Sweet & Maxwell 2017):

.. It is incumbent upon a party responding to a Request to a Pt 18 order to exercise reasonable diligence in formulating a response ..
.. [T]he court is likely to regard a party [as] being under a duty to undertake reasonable enquiries, but what constitutes reasonable enquiries will depend on the circumstances .. [A] party is not bound to make enquiries to the extent that such enquiries place an unfair or oppressive burden on him ..
.. If it is necessary for the purposes of responding to a Request, the party must examine the documents in his control .. or that of his servants or agents held in that capacity. If a such search would be unduly burdensome, then that may be a ground for objecting to the Request ..

47. In my judgment, those passages accurately state the law in this area. I would, however, add this rider. Where, as in the present case, a request under Pt 18 has already been answered, and the objection is that the answer given is inadequate because reasonable diligence has not been exercised, the proper way forward will not usually be to ask the court (as the claimants in the present case have done) simply to order that the original generally worded request should be answered again. Such a course will often just postpone until an application for sanctions for non-compliance or for relief from such sanctions is made the inevitable issue of what reasonable diligence in formulating a response to that request – and thus compliance with the order – actually requires. By that time it is likely to be too late to consider the appropriateness of the scope of the original order: see eg Griffith v Gourgey [2015] EWHC 1080 (Ch) at [40] and [54(1)]. 

48. The better course will usually be, wherever possible, to ask the court to specify in its order precisely what further enquiries the party responding to the Pt 18 request should carry out, so that the issue of what proper compliance requires is plainly defined from the outset. 

49. A related issue (which similarly arises on the facts of the present application) is how the court should approach assertions by the party responding to a Pt 18 that that party is not able to recall and/or to provide the requested information, either at all or in the detail requested. 

50. On an application under Pt 18, the court is not required to take at face value and without analysis everything that a party says in its response or its witness statements. In some cases it may be clear that there is no real substance in the assertions made: see eg (in the context of CPR Pt 24) ED & F Man Liquid Products v Patel [2003] EWCA Civ 472 at [10], per Potter LJ. However, it is also clear that the court should not, on such an interim application, conduct a “mini-trial”. In most cases, it will neither be possible nor appropriate (having regard to the overriding objective) to go behind what is said in answers to Pt 18 requests: cf the guidance given by Beatson J in West London Pipeline and Storage Ltd v Total UK Ltd [2008] EWHC 1729 (Comm) at [80], in relation to challenges to claims to privilege. To reject a statement contained in a document verified by a statement of truth will, in many cases, involve the implicit conclusion that the person making the statement has lied. That is a conclusion which a court will understandably be reluctant to reach on an interim application where the statement has not been tested in cross-examination.”

Court reject challenge to fraud conviction

A. Introduction

Mr Zeroual (the applicant), a (now former) secure tenant of the London Borough of Hammersmith & Fulham, was convicted on 18 December 2018 of two counts of fraud, contrary to section 1 of the Fraud Act 2006:

  1. Count one – dishonestly failing to disclose information that he was under a legal duty to disclose “namely that he had sub-let part of the premises” of the flat in breach of the tenancy conditions.
  2. Count three – dishonestly failing to disclose that his wife was living with him between 2010 and 2013 (before their later separation), which meant that he was no longer eligible for the single person’s discount in respect of council tax payable for the flat.

He was acquitted on count two which alleged that he had dishonestly failed to disclose a change in circumstances (i.e. that he no longer lived at his flat as his only or principal home) in relation to his application to purchase the flat under the Right to Buy.

The sentence passed down on 23 January 2019 was:

  • 18 months imprisonment suspended for 18 months,
  • with a 30 day Rehabilitation Activity requirement;
  • in July 2020 he was ordered to pay £89,074 (of which £17,500 was to be paid as compensation to the council) pursuant to the Proceeds of Crime Act 2002.

B. The Appeal

The ground of appeal on count one focused on the directions given in relation to sub-letting and whether they were sufficient to deal with the issue of exclusive possession and whether any persons staying in the flat were rather and ’merely’ lodgers.

With respect to count three, which wasn’t originally appealed, it was argued both that the Judge failed to properly direct the jury as to the elements required to convict him and that it should not have been left to the jury because the failure to disclose information charged under this count was not a failure to disclose information which he was under a legal duty to disclose for the purposes of the Fraud Act 2006.

C. The decision

In R v Zeroual [2022] EWCA Crim 288 the Court of Appeal (Criminal Division):

(a) refused an application for an extension of time to appeal in light of the merits of the substantive appeal;

(b) refused permission to appeal on count 1;

(c) refused the application to vary the grounds of appeal to challenge the conviction on count 3 because the judge’s directions were sufficient and the evidence showed that there was a case to answer;

(d) refused the new applications for permission to appeal against sentence, the confiscation order and the costs order because there were no arguable grounds of appeal.

D. Reasons

The applicant’s case at trial on count one had been that he had always lived at the relevant flat but from time to time had lodgers. However, the jury clearly rejected his evidence that he was living at the flat, which had been a central blank of the prosecution’s case. It therefore followed that if he had been found to have moved out of the flat the occupants remaining had exclusive possession and there had been a clear sub-letting of part.

Complaint as to the failure of the judge to explain the terms dishonesty and gain was not made out given that it had been common ground that if sub-letting was made out then the applicant was intending to make a gain and was acting dishonestly.

As for count three, it was the applicant’s case that he had made an application to the local authority for a 2-bedroom property (rather than his 1-bedroom demised premises) because his wife was pregnant and that should have been sufficient notification that she was living with him. He hadn’t realised, he said, that he needed specifically to inform the Council Tax department and he was not acting dishonestly.

However, it was common ground that there was a legal duty to inform the local authority of any relevant change of circumstances, as confirmed by regulation 16 of the Council Tax (Administration and Enforcement) Regulations 1992, and there was therefore no basis for allowing a late variation to the grounds of appeal to allow this issue to be raised.

Interestingly the applicant had been acquitted on count two (see above) following the trial judge’s direction to the jury that they had to be sure he no longer had the intention to use the flat as his only or principal home against the backdrop of his intention to exercise the right to buy (remembering that the allegation was of sub-letting of part not all of the flat).

E. Conclusion

You often hear the comment that fraud is not a victimless crime but it would seem in this case that this would extend to the applicant himself, albeit the consequences follow on from his actions. As Lord Justice Dingemans explained at paragraph 9 of the judgment:

“He has been evicted from the flat, which he had intended to purchase under the right to buy scheme. He has lost his job with the civil service. His family circumstances have deteriorated. His savings have been confiscated. The applicant has suffered mental health problems being severe reactive depression, requiring treatment.”