Court of Appeal judgment handed down in Water Plus Limited and another v Brendon International Limited
James McCreath has been successful in an appeal against a High Court judgment in a case claiming restitution of alleged overcharges for sewerage services. The judgment clarifies the operation of the burden of proof in such circumstances, and provides guidance about the ability of factual witnesses to give expert evidence without the Court’s permission which will be of interest to practitioners more generally.
James was instructed by JMW Solicitors.
Lim and others v Ong
The Defendant was sentenced yesterday to 22 months immediate imprisonment in respect of a vast array of contempts of court, including dealing and dissipating assets in breach of a worldwide freezing order, providing inaccurate ancillary asset disclosure inflating his true asset position, providing false affidavit evidence seeking to justify dissipation, and 59 breaches of the standard form weekly living allowance.
The underlying claim pertained to a property investment fraud perpetrated by the first defendant, and orchestrated through a group of companies (some, but not all of which, were defendants to the proceedings). The defendants were the subject of a wide ranging worldwide freezing order and other injunctions including a quia timet injunction with respect to directorships of certain SPVs. Aspects of those injunctions were themselves the subject of dispute and were challenged unsuccessfully (Lim v Ong [2021] EWHC 3414 (Ch)).
The claimants were successful at trial (Lim v Ong [2023] EWHC 321 (Ch)) and thereafter sought to enforce their judgment in England and Singapore. Significant asset dissipation was discovered, and untruthful affidavit evidence was filed by the defendant designed to mislead the claimants. In particular, it became apparent that the defendant had both substantially overstated his assets at the outset of the litigation, and dissipated some of what remained.
The contempt application to commit the defendant alleged 83 separate contempts (falling into 7 broad categories), the sheer scale of the disregard for court orders being highly material (and justifying, in this particular case, extensive and detailed pleadings). A late admission by the defendant resulted in a 2 month reduction from what would otherwise have been a 24 month custodial sentence.
James Bailey KC and James Goodwin were instructed by Withers and acted for the four successful claimants.
Judgment handed down in Transwaste Recycling and Aggregates Ltd
Judgment was today handed down by Adam Johnson J in the case of Transwaste Recycling and Aggregates Ltd [2024] EWHC 330 (Ch) after a three-week trial of an unfair prejudice petition concerning a waste management company. The judgment addresses in detail issues of perennial interest to the company lawyer: the meaning of unfair prejudice; the interaction between the s.994 jurisdiction and shareholders’ agreements; the appropriate relief to a minority shareholder; the date of valuation; and whether the shareholding should be valued taking into account a minority discount.
Thomas Grant KC and Gabriella McNicholas (Maitland Chambers) acted for the Respondents, and were instructed by Milners Solicitors.
JSC BTA Bank v Sabyrbaev and others
Judgment has been handed down by the BVI Commercial Court in what is the latest episode in the global Ablyazov litigation; in this claim against 54 defendants, Kazakhstan’s BTA Bank alleges it has been the victim of a fraudulent scheme involving the issue of high letters of credit resulting in losses of approximately US$230 million. In May 2022 BTA issued ex parte applications seeking, inter alia, permission to serve the non-resident defendants out of the jurisdiction. Those defendants applied successfully to set aside the orders giving permission to serve out, including on the basis that the test for the relevant jurisdictional gateways under the BVI Civil Procedure Rules had not been met.
The judgment provides a comprehensive survey of the law applicable to service out of the jurisdiction in the BVI, including the duty of full and frank disclosure, and provides a salutary warning to litigants seeking to use BVI incorporated ‘Anchor Defendants’ as a hook through which to bring their real targets within the jurisdiction of the BVI courts.
Thomas Grant KC and Tara Taylor were instructed by Maples Group and acted for two of the successful defendants.
Judgment handed down in Newell Trustees Ltd v Newell Rubbermaid UK Services Ltd
In Newell Trustees Ltd v Newell Rubbermaid UK Services Ltd, the High Court upheld the validity of the conversion of certain scheme members’ final salary benefits to money purchase benefits following their transfer to a newly-created money purchase section of the scheme, subject to the imposition of a final salary underpin. The judgment contains an analysis of a number of important pensions law topics, including the construction of interim deeds, the validity of extrinsic contracts, the construction of Courage provisos and how to calculate final salary underpins. The judgment also considered, and rejected, a claim that the method by which members were selected for the transfer and conversion process constituted unlawful age discrimination.
Paul Newman KC, Claire Darwin KC (Matrix Chambers) and Thomas Robinson acted for the successful employer, instructed by DLA Piper.
Judgment handed down in Avon Cosmetics v Dalriada Trustees and ors
The Avon Cosmetics case is the latest word from the High Court on the conditions required for saving a pension scheme amendment that is partially invalid due to failing to comply with the scheme’s amendment power. It confirms the requirement to consider whether the parties to the amendment would have entered into it had they known of the true scope of the amendment power, but emphasises that that involves an objective rather than a subjective investigation.
Paul Newman KC acted for the trustees, instructed by Blake Morgan.
Judgment handed down in Lazarichev & Ors v Lyndou [2024] EWHC 8 (Ch)
There is a rich strain of jurisprudence as to whether the term “residence” in various contexts necessarily connotes “lawful residence”. However, this question has rarely, if ever, been tested in the context of an application for security for costs.
On 9 January 2024, HHJ Keyser KC (sitting as a Judge of the High Court) handed down judgment in Lazarichev & ors v Lyndou [2024] EWHC 8 (Ch). Max Mallin KC and Jia Wei Lee, instructed by Harcus Parker Limited, acted for the successful respondent, Mr Tsifamei Lyndou. This case presented what is believed to be the first opportunity to consider the question of whether “resident” within the meaning of r25.13(2)(a) means “lawfully resident”.
Mr Lyndou, a Belarussian national, had issued proceedings in 2021, alleging that, having conceived a business idea, he shared it in confidence with the defendants and entered into a joint venture or partnership with them with a view to developing a business based on the idea, and that the defendants later excluded him from the business. He advances various grounds of claim, including breach of confidence and unlawful means conspiracy, and seeks a declaration that shares in the business are held on trust for him.
On 28 April 2022, the appellants issued a security for costs application, on the basis that that Mr Lyndou was neither resident in the jurisdiction, nor in a Convention State within the meaning of CPR r25.13(2)(a). At the time of issuing his claim, Mr Lyndou was living in Belarus. But by mid-2022, when the security for costs application was issued, Mr Lyndou had emigrated to Poland. On its face, therefore, he was, in fact, factually resident in a Convention State. The appellants nonetheless persisted with their application, alleging that Mr Lyndou had obtained his residence in Poland by presenting false information on his residency application (which Mr Lyndou denied). It was accordingly said that Mr Lyndou’s residence in Poland was unlawful, and that unlawful residence did not constitute residence within the meaning of r25.13(2)(a).
The application was refused by Master Pester in a judgment dated 16 June 2023, on the basis that residence for the purposes of r25.13(2)(a) was a factual question [link to previous judgment here]. The appellants appealed, advancing six grounds of appeal. HHJ Keyser KC, sitting as a Judge of the High Court, dismissed every ground of appeal.
It is notable that the lawfulness of Mr Lyndou’s residence per se was not actually challenged. Rather, the appellants’ case rested on an allegedly false declaration given by Mr Lyndou in procuring his residence permit. It was therefore not enough simply for the appellants to argue that “resident” meant “lawfully resident”, because Mr Lyndou would have satisfied even that wider test. Rather, the appellants had to, in effect, contend that r25.13(2)(a) effectively provided for residence to be vitiated by any allegedly unlawful means. This construction of r25.13(2)(a) was rejected ([26]).
Importantly, however, the Judge also found that, even if the above difficulties were put aside, “resident” should not be taken to mean “lawfully resident”. He found that, as a matter of construction of r25.13(2)(a), “resident” was a question of fact. The lawfulness of a person’s residence was not of itself relevant, unless there was clear evidence that a person was at immediate risk of deportation. But save in a very clear case, the court should not seek to decide questions of lawfulness of residence, leaving that issue to the immigration authorities of the relevant State. In the present case, the evidence was that Mr Lyndou was habitually and normally residing in Poland, and it was inappropriate to speculate as to whether Mr Lyndou was lawfully resident in Poland.
HHJ Keyser KC’s carefully reasoned judgment rewards close reading. His decision presents welcome clarity on a novel and difficult legal question.
High Court grants specific performance of three leasehold options
The Claimant had served valid notices to exercise valuable options in three leases but had omitted to pay the 10% deposits which were due by midnight on the date the Claimant exercised the options. HHJ Hodge KC (sitting as a High Court Judge) accepted the Claimant’s argument that time was not of the essence for payment of the three deposits. Whilst it is conventional for time to be of the essence for payment of a deposit under a sale and purchase agreement (see Samarenko v Dawn Hill House Ltd [2011] EWCA Civ 1445), the circumstances of this case were sufficient to take it out of the ordinary run of cases. There were two principal reasons: (1) this is not the case of a payment of a deposit on an ordinary contract for the sale and purchase of land, but rather the exercise of a tenant’s option to purchase the landlord’s reversionary interest; and (2) on the true interpretation of the option provisions, time should not be treated as being of the essence for the payment of the deposits.
Alice Hawker was instructed by Freeths and appeared for the successful Claimant.
High Court grants buy-out order in Knell v Van Loo
This case involved a 7-day trial of an unfair prejudice petition, followed by a one-day quantum hearing. The petition was brought by minority shareholders in respect of two substantial property developments; at trial the Deputy Judge found numerous incidents of unfair prejudice, including a failure on behalf of the board to exercise valuable contractual rights held by the Company. Whilst the Company was heavily balance-sheet insolvent, the Deputy Judge granted a buy-out order in the Petitioners’ favour, on the basis that the Company be valued as if the unfairly prejudicial acts had not occurred, and, in addition, that part of the Company’s debt be ignored for the purposes of the buy-out order.
Jessica Brooke was instructed by Clintons and appeared for the successful Petitioners.
Judgment handed down in Asturion Fondation v Alibrahim
The case, one of The Lawyer’s Top 20 Cases of 2023, concerns a multimillion-pound property on The Bishop’s Avenue (sometimes known as “Billionaire’s Row”) in North London.
The judgment, in addition to dealing with questions of Liechtenstein, Swiss and Shari’a Law, addresses a number of principles of English property and trusts law and conflicts of laws. These include the role of ostensible authority in the context of gratuitous dispositions, and the effect of s. 26 / s. 29 of the Land Registration Act 2002 when a former registered proprietor seeks to recover title to land following a disposition alleged to have been made (a) outside the capacity of the transferor and/or (b) in breach of fiduciary duty. The judgment also considers the construction of Rome II and the categorisation of claims in mistake, unjust enrichment and knowing receipt under it, as well as the principles underpinning claims for knowing receipt in the context of the recent decisions of the Court of Appeal and the Supreme Court in Byers.
Simon Atkinson was instructed by Simmons & Simmons LLP, along with Rupert Reed KC (Serle Court), for the successful defendant.
This decision has been widely reported in the media, including in Bloomberg here.
Post script: In addition to today’s High Court judgment, the previous Court of Appeal decision [2020] 1 WLR 1627 in the same proceedings is one of the leading authorities relating to the striking out of proceedings for abuse of process where a party is alleged to have “warehoused” proceedings.