B1/2001/1047/A

Neutral Citation Number: [2001] EWCA Civ 1149
IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE CROYDON CROWN COURT
(JUDGE ELLIS)
						Royal Courts of Justice
						Strand
						London WC2

						Tuesday, 3rd July 2001
B e f o r e:

LORD JUSTICE JUDGE

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HUSSEIN MEHDI
Applicant

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PAUL BATES (aka MUHUMMAD RAFIQ)
Respondent

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THE APPLICANT appeared in Person.

THE RESPONDENT did not appear and was not represented.

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J U D G M E N T
Tuesday, 3rd July 2001
1.	LORD JUSTICE JUDGE: This is an application for permission to appeal against an order made at Croydon County Court on 26th March this year by his Honour Judge Ellis. The judge was hearing an appeal from a decision of District Judge Tennant who, on 21st November 2000, had dismissed an application by Paul Bates (otherwise known as Mr. Muhummad Rafiq) for summary judgment against Mr. Hussein Mehdi. 
2.	The claim by Mr. Mehdi was very simple. He asserted that: 
“The Defendant had failed to pay an outstanding sum of £3850 for systems and services delivered to him, despite repeated requests to settle this. This relates to invoice no. 6235 dated 7th January 2000. I am seeking the full payment of the outstanding sum and all recovery and administrative delay costs.” 
3.	Attached to that document were particulars of claim. The particulars of claim included this passage: 
“I supplied the goods and services to Mr. Bates through my company ContinuNet Ltd (of which I am the sole director). Mr. Bates has used his company Eight Gates Inc, an overseas registered company, as the medium for the business transaction and payments.” 
4.	Mr. Bates (as I shall call him throughout this judgment) entered a defence asserting in paragraph 2 that: 
“... the contract relating to the goods and services, the subject of the claim, was made between ContinuNet Limited and Eight Gates Incorporated.” 
5.	In paragraph 4 the defence pleaded that he relied on the fact that: 
“...the invoice number 6235 dated 7th January 2000 referred to in the claim form in respect of the goods and services was raised by ContinuNet Limited (not the Claimant) and rendered to Eight Gates Incorporated (not to the Defendant).” 
6.	It was Mr. Bates who in paragraph 6 of his pleaded case asserted that he and Mr. Mehdi were of the Muslim faith and referred to the fact that: 
“On 20th December 1999 the Claimant and the Defendant entered into an Is-tisna'a agreement. An Is-tisna'a agreement is an agreement between members of the Muslim faith under which the parties to the agreement undertake to God and to each other that they will conduct their business in accordance with Islamic principles.” 
7.	The dispute arose in connection with a contract made in December 1999 for the supply of computer equipment to a hospital in Sudan. The terms of this contract were apparently discussed by telephone between 13th and 15th December. Mr. Bates' case was that the discussions ended in an agreement which is best exemplified in a document dated 14th December 1999 from Mr. Mehdi to him. The letter is written on Continunet paper and is sent to Mr. P. Bates of Eight Gates Inc. It reads:
“Dear Paul, 
Please find enclosed a quotation for the hardware and software requirements for your project. I suggest that we check out the supplier of the hardware before we place the order on them. I will be seeing them later this afternoon. 
“If you require further details then please do not hesitate to contact me.” 
8.	In due course the agreement was concluded. 
9.	On 20th December the parties signed the is-tisna'a agreement. That, Mr. Mehdi says, was the true contract between the parties. It is signed by both of them personally. The document reads that the contract is drawn up between the requester of the agreement, Muhammad Rafiq (that is, Mr. Bates) and Hussein Mehdi. Without attempting to set it all out in detail, it acknowledges to the Most High, Allah, that it is an is-tisna'a Islamic request for production agreement drawn up with “the sole intention of pleasing the Most High, Allah, glory be to Him”. 
10.	More mundanely, however, the nature of the request is directly concerned with the same equipment with which the terms of the contract for the supply of computer equipment was concerned: 20 network clients with 17-inch screens and 10 PCs with 19-inch screens. The sums to be paid are set out in meticulous detail: £10,000 on completion of the agreement, £10,000 between the completion of the agreement and delivery, and the balance, £13,500, after delivery. Finally, for present purposes, both parties agreed that they were at liberty 
“to utilise non‑Muslim agents such as lawyers and other legal agents, accountants etc. and to utilise other standard business practices and methods in order for the business to be able to interface with non‑Muslim business partners.”
11.	The dispute that arose between the parties occurred in relation to the third instalment. A cheque for £6,000 in part payment of the last instalment was sent from Eight Gates Limited. It was dishonoured. A cheque for £10,000 was then paid and that left the balance, £3,850, which included £350 for transport. Mr. Bates refused to pay that sum. He claimed in effect that part of the goods supplied by Mr. Mehdi were not to specification, and indeed he accused Mr. Mehdi of deliberately supplying the system as he had in order to increase his profit margin. There was a certain amount of toing and froing and eventually, on 14th July 2000, Mr. Mehdi issued proceedings. 
12.	It is not without some relevance to notice that during the course of the arguments before arrangements finally broke down, on 31st January Mr. Bates wrote, using the name M. Rafiq, wrote to Mr. Mehdi, making his complaint.
“The e-mails received from your company ... clearly and unequivocally state SCSI technology.”
13.	Then he went on to complain of his frustration at the change in specification and went on to add:
“... the entire fax was in contravention of our agreement - an agreement which you have conveniently forgotten and claim that because no agreement had been made at the time of your fax, I was entitled to object to the fax specifications! Unbelievable! From that point forward I ignored the contents of this fax and spent the next few days time forcing you back to the specification... That is why the Is-tisna'a agreement actually states that high performance graphics cards and built in/attachable speakers are part of the specification. They were part of the .. specification which you had agreed to supply and then at the first opportunity attempted not to supply!” 
14.	He then went on:
“According to Islamic (and UK) jurisprudence neither side to an agreement is allowed to unilaterally change their obligation.” 
15.	Later on there were references to Islamic law, for example:
“What 'unfounded and unreasonable accusations' have I thrown against you, along with what 'slanderous remarks'? You now accused me of such a crime, therefore I demand that you produce four witnesses, as it is obligatory for you to do so, after accusing me. For your information when I sought the jurisprudence on grievance procedures last Friday I had the correct Islamic etiquette of not even mentioning the name of the person/company with whom I am in disagreement,” 
	and then later on in paragraph 8: 
“What do you mean by claiming that I have planned and schemed not to meet the payments of the Is-tisna'a agreement from the beginning? Where is your evidence for this? Produce your proof or apologise for your outrageous remarks immediately.”
16.	The significance of that letter, Mr. Mehdi would contend, is that it demonstrates that Mr. Bates himself was plainly approaching their contractual arrangements on the basis that the is-tisna'a agreement underpinned it and was part of the agreement that they had reached in connection with the supply of these materials. 
17.	Mr. Bates applied for summary judgment on the grounds that the claim had been issued by Mr. Mehdi in his own personal name and against Mr. Bates himself personally. He argued that Mr. Mehdi's claim had no prospect of success and that it should be dismissed summarily. Mr. Mehdi argued that the contract was contained within the is-tisna'a agreement and the parties therefore were the individuals. He had claimed as an individual against Mr. Bates personally. He described the use of the companies controlled by the individuals as akin to agents carrying out a contract. 
18.	District Judge Tennant concluded that she could not deal with the issues which arose in this litigation on an application for summary judgment. She was concerned about the need for oral evidence about the telephone calls that had been exchanged when the contract was reaching fruition and in any event she concluded that expert evidence would be required to ascertain the normal practice and effect of an is-tisna'a agreement. She so ordered and paragraph 6 of her order reads: 
“There be a single joint expert in Islamic Law appointed by the parties to provide a written report upon: 
(a) the nature and effect of the 'is-tisna'a agreement' of 20th December 1999 under both religious and secular law. 
(b) the legal requirements specified by the Almighty Allah referred to in the said 'is-tisna'a agreement'.” 
19.	That order was not complied with, on the face of the documents before me, as a result of the failure by Mr. Bates. Thus, for example, on 29th January District Judge Mills ordered that the issue of the expert should require the defendant to provide the name, address and qualification to the claimants in order that a joint report should be prepared. The defendant's solicitors were to prepare draft instructions to the defendant and submit them for approval or amendment. 
20.	Subsequently, on 13th February the complainant alleged that the defendant had not supplied the appropriate address and qualification of a proposed expert, and his Honour Judge Conigsby Q.C. ordered that the application for an unless order should be listed on 23rd March, following the appeal which subsequently took place on that date. 
21.	Judge Ellis held that the submission that the parties had used their companies as agents of themselves as individuals was fanciful. He did, however, acknowledge the way in which the claimant put the case, which was that the telephone calls were discussions preparatory to an agreement and that the agreement was contained in the is-tisna'a agreement. Mr. Bates' case was that he had instigated the religious agreement and that the effect of the agreement was no more than “a religious blessing .... not a legal agreement”, and that the reason why individuals were named in the document was that corporations could not enter into a religious agreement of this kind. 
22.	The judge concluded that the arguments advanced on behalf of Mr. Mehdi fell into the “fanciful” category, and accepted the point made by the defendant that it made no commercial sense for businessmen to contract personally when they had the privilege of limited liability, which such a contract would dissipate. He concluded that: 
“...there would need to be compelling evidence to demonstrate that for some extraordinary reason the names set out in the final invoice did not truly reflect the contracting parties and in my judgment there is no such evidence.” 
23.	It seems clear from the material which is now available that the is-tisna'a agreement was undoubtedly linked by both Mr. Mehdi personally and Mr. Bates personally with the contract for the supply of equipment. I use the word “linked” neutrally. What I intend to convey is no more than that the entire process by which the is-tisna'a agreement was concluded was at any rate related to the issues which are the subject of the present litigation. 
24.	Mr. Mehdi has now produced a record of telephone conversations between himself and Mr. Bates which he says show that the agreement was indeed a personal one. I shall leave it to the full court to decide whether that evidence should be treated as fresh evidence. He also has produced expert evidence about the effect of the is-tisna'a agreement in Islamic law. That was not before the judge. As I have already explained, the District Judge ordered that such evidence should be available. Mr. Bates appears not to have complied with the District Judge's order. Mr. Mehdi did not think it appropriate to produce the evidence before the judge on appeal because he already had the advantage of a judgment in his favour on this issue from the District Judge. 
25.	Accordingly, it seems to me that it would be right at this stage to order that evidence should be admitted as fresh evidence. 
26.	The questions whether the is-tisna'a agreement was incorporated into the contract between the parties and, if so, its legal effect and consequences, or, if not incorporated, whether it had any legal effect and consequences seems to me, in agreement with the District Judge, to raise issues of some importance which at least arguably should not have been disregarded by the judge or treated as if they were religious considerations only and therefore irrelevant to the legal principles to be applied to this contract. There may indeed be argument as to whether more than one agreement is present. But that involves refinements of consideration which I should not be prepared to embark into without the benefit of argument. 
27.	All this said, I have come to the conclusion that permission to bring this second appeal should be granted in accordance with the appropriate rules. 
28.	An issue was raised about the fact that an extension of time was needed. The notice was seven weeks after the hearing and therefore significantly out of time. What is apparent, however, is that Mr. Mehdi contacted Croydon County Court on 5th April, a few days after Judge Ellis' decision. It is perfectly plain that he indicated that he wished to seek permission to appeal. As a litigant in person, he simply failed to appreciate that he was in the wrong place. The delay was consequent on that ignorance. In the circumstances, it would seem to me that justice requires that time should be extended. 
29.	There will be a stay of enforcement of the costs order against Mr. Mehdi pending the appeal. 
ORDER: Application allowed; extension of time granted; stay of enforcement of the costs order granted.
(ORDER NOT PART OF APPROVED JUDGMENT)