DIFC Court of Appeal explains the circumstances in which an appeal may be reopened

17 February 2015

DIFC Court of Appeal explains the circumstances in which an appeal may be reopened

The DIFC Court of Appeal has recently published an important judgment on the circumstances in which an appeal may be reopened after it has been decided.

In Silva v United Investment Bank, the CEO of a DIFC financial services provider brought a claim for wrongful dismissal. The claim was defended, principally on the basis that the Claimant’s dismissal was justified as a result of an expenses claim. It was argued that the claim was dishonest or, alternatively, that the Claimant owed fiduciary duties in respect of the expenses claim which obliged him to disclose certain facts when making the claim.

At first instance (CFI, 6 Nov 2013), H.E. Justice Ali Al Madhani found that the Claimant’s failure to disclose certain facts when making the expenses claim amounted to breach of fiduciary duty justifying his dismissal.

This decision was reversed on appeal. The Court of Appeal found (CoA, 21 Aug 2014) that there was no breach of fiduciary duty.

In doing so, the Court of Appeal declined to decide whether, in making an expenses claim, a director owes fiduciary duties at all. The Claimant’s position was that, as the director is not himself in control of whether the company pays the expense, he is not a fiduciary in respect of the claim. The Chief Justice recorded the Claimant’s arguments in the Judgment as being worthy of future consideration, should a similar case arise.

Shortly after the Court of Appeal’s judgment was circulated, the Defendant applied to reopen the appeal and to introduce fresh evidence. The Defendant argued that the new evidence had a bearing on whether the expenses claim related to a genuine business event or, as the Defendant argued, was personal.

The circumstances in which the DIFC Courts may re-open an appeal are set out in RDC Rules 44.179 – 44.189. These mirror the equivalent provisions of the English CPR. The DIFC Court of Appeal confirmed (Order, 13 Nov 2014) that, when considering such an application, the DIFC Court will follow the English approach, set out in Taylor v Lawrence [2002] EWCA Civ 90. It must generally be shown that “the integrity of the litigation process… has been critically undermined” and that “the process itself has been corrupted”.

Justice Giles said:

“Generally [the jurisdiction to reopen an appeal] will not be exercised unless the applicant can show that by accident and without fault on his part he has not been heard or his appeal has not been fully considered…”

In order to justify the submission of new evidence in such circumstances, it is necessary, but not sufficient to satisfy the test in Ladd v Marshall [1954] 1 WLR 1489: the evidence could not have been obtained with reasonable diligence for use at trial and would have an important influence on the result of the case. However, the applicant must go further: “the evidence must demonstrate a powerful probability that a wrong result was earlier arrived at.”

In the present case, the Court of Appeal dismissed the application. The question of whether the expenses were personal or corporate had been conceded during the appeal. The fresh evidence could have been obtained earlier and came nowhere near satisfying the powerful probability test. The Defendant’s other arguments had been advanced in the appeal and rejected.

This is a welcome decision which demonstrates that the DIFC Courts will take a robust approach to re-opening appeals, in line with English case-law.