Appeal judges reject Saudi prince’s bid to halt claim due to unpaid costs order

Saudi Arabia: Prince failed to provide evidence of claimant’s means

The Court of Appeal has rejected an application by a son of the late King Fahd of Saudi Arabia that one of his father’s former wives pay an outstanding £250,000 costs order or have her £15m claim stayed or struck out.

Janan Harb is locked in a legal battle with Prince Abdul Aziz Bin Fahd Bin Abdul Aziz over what she claims was an oral contract to transfer two flats in Chelsea to her, along with the sum of £12m.

In 2015, the High Court awarded her £15.45m (including interest) and granted specific performance of the agreement to procure the transfer of the properties.

The following year, the prince successfully appealed the decision, on the grounds of deficiencies in the judgment. The case was remitted to the High Court for a re-trial.

The appeal court order also provided that Mrs Harb pay 75% of the costs of the appeal, and pay £250,000 on account of those costs within 28 days. It became payable after the Supreme Court dismissed an application to appeal in December 2016.

Mrs Harb has not paid any part of it, claiming she has no money, and argued that the order sought by the prince would stifle her claim.

At first instance, Mr Justice Arnold rejected the prince’s application, concluding that if such an order were made, Mrs Harb would be unable to comply with it and her claim would either be struck out or stayed indefinitely.

On appeal, Lord Justice David Richards said “none of the factors relied on by the prince, whether alone or in combination” outweighed the loss to Mrs Harb of a fair trial or suggested that the judge was wrong in his conclusion that the orders sought by the prince would be a “disproportionate interference” with her right to a fair trial.

He said the order “put at the forefront of his case” by counsel for the prince, Ian Mill QC, was a stay rather than strike-out.

“In the absence of any evidence suggesting that Mrs Harb will in the foreseeable future come into sufficient funds to pay the interim costs – and there is none – there is no practical difference between staying and striking out the claim.”

Delivering judgment in Prince Fahd Bin Abdul Aziz v Harb [2017] EWCA Civ 2215, David Richards LJ said that counsel for the prince argued that the judge’s findings could not stand, since he had omitted to mention a number of matters which should have been taken into account.

Before considering the criticisms, the lord justice said it was appropriate to draw attention to “other relevant features” of the case.

“First, and above all, there was before the court no evidence that Mrs Harb had assets or income other than as disclosed by her. The prince adduced no evidence to counter or undermine the evidence given by Mrs Harb in her witness statements.

“Nor did the prince adduce any evidence to suggest that she could raise the necessary funds from family members or third parties. The absence of any such evidence was a factor of considerable significance, given in particular that there was nothing intrinsically improbable about her evidence.”

David Richards LJ said that Mrs Harb was made bankrupt in 2008, with debts of over £1.5m, and there was no evidence that she had acquired significant assets since then.

David Richards LJ said Arnold J was “clearly alive to the adverse comments” on Mrs Harb’s evidence by the earlier Court of Appeal, but there needed to be “objections of substance” before it could be rejected.

The lord justice said that, given Mrs Harb’s lack of significant assets or substantial income, it was “highly improbable” that any third-party lender would advance £250,000 to her “or any sum approaching that amount”.

David Richards LJ dismissed the appeal. Lord Justice Newey agreed.

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