(1) ORB a.r.l.; (2) Roger James Taylor; and Another (First to Third Applicants/Claimants) Andrew Joseph Ruhan (Defendant)
| Jurisdiction | England & Wales |
| Judge | Mr Justice Walker,MR JUSTICE WALKER |
| Judgment Date | 14 December 2015 |
| Neutral Citation | [2015] EWHC 3638 (Comm) |
| Court | Queen's Bench Division (Commercial Court) |
| Docket Number | Case No: CL-2012-000625 |
| Date | 14 December 2015 |
[2015] EWHC 3638 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice
Rolls Building
Fetter Lane
London EC4A 1NL
Mr Justice Walker
Case No: CL-2012-000625
Mr James Drake QC (instructed by Stewarts Law LLP, with junior counsel as set out below) appeared for the applicants
The defendant, who was not informed of the application, was neither present nor represented
Hearing dates: 25 September (junior counsel: Mr Nicholas Gibson and Ms Sarah Martin), 27 November (junior counsel: Ms Sarah Martin), 30 November (junior counsel: Ms Sarah Martin and Mr James Goudkamp) and 10 and 14 December 2015 (junior counsel: Ms Sarah Martin)
Approved Judgment
During the period prior to 26 February 2016 this judgment was confidential to the claimants and to the parties in CL-2015–876.
I direct that from 26 February 2016 onwards this judgment shall be made public, that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this judgment, and that copies of this version may be treated as authentic.
Paul Walker, 26 February 2016.
| A. Introduction | 3 | ||
| B. The main action | 3 | ||
| C. Dr Smith, Dr Cochrane, Pro Vinci and Ms Irving | 5 | ||
| D. The September 2015 application | 8 | ||
| D1. The September 2015 application: general | 8 | ||
| D2. September 2015 application: the allegations | 8 | ||
| D3. September 2015 application: some key features | 11 | ||
| D3.1 Features of the application: general | 11 | ||
| D3.2 What the applicants proposed to do | 11 | ||
| D3.3 Why a court order was sought | 13 | ||
| D3.4 Extent of knowledge about Oscar | 16 | ||
| D3.5 Interaction with the police | 16 | ||
| D3.6 Criticisms of, and allegations against, Mr Ruhan | 20 | ||
| D3.7 Full and frank disclosure | 23 | ||
| D4. September 2015 application: order & reasons | 28 | ||
| D4.1 The September 2015 order: general | 28 | ||
| D4.2 The content of the September 2015 order | 28 | ||
| D4.3 The broad reasons for the September 2015 order | 30 | ||
| E. Events after 25 September 2015 | 32 | ||
| E1. Events after 25 September 2015: general | 32 | ||
| E2. The 23 October letter, Mr Oslov, and the 26 October order | 32 | ||
| E3. Hearing on 27 November 2015 | 33 | ||
| E3.1 Hearing on 27 November 2015: general | 33 | E3.2 Proposed directions/no "useful purpose" | 34 |
| E3.3 The 18 November directions | 35 | ||
| E3.4 Irving 2: Dr Hunton; Mr Oslov; partial update on the police | 35 | ||
| E3.5 Skeleton arguments in November 2015, and Mr Fiddler | 39 | ||
| E3.6 Irving 3: Mr Fiddler and Oscar's video | 45 | ||
| E3.7 Irving 3's account of interaction with the police | 52 | ||
| E3.8 What happened at the 27 November hearing | 55 | ||
| E4. Hearing on 30 November 2015 | 56 | ||
| E4.1 The 30 November hearing: general | 56 | ||
| E4.2 The 30 November skeleton argument | 56 | ||
| E4.3 Irving 4: further interaction with the police | 61 | ||
| E4.4 What happened at the 30 November hearing | 63 | ||
| E5. Hearing on 10 December 2015 | 64 | ||
| E5.1 The 10 December hearing: general | 64 | ||
| E5.2 Irving 5 | 64 | ||
| E5.3 The hearing on 10 December 2015 | 66 | ||
| E6. Hearing on 14 December 2015 | 68 | ||
| F. Analysis and conclusion | 70 | ||
| F1. Analysis and conclusion: general | 70 | ||
| F2. The stage now reached | 70 | ||
| F3. What lies ahead | 70 | ||
| F4. Conclusion | 71 | ||
| Annex 1: The 18 November directions | 72 |
A. Introduction
Note: this judgment, released publicly on 26 February 2016, sets out unchanged what was said in the "In Private" judgment giving reasons for orders made by me during the period up to and including 14 December 2015.
This judgment is given in private. It is to be treated as having been handed down on 14 December 2015 at the restored hearing of an application ("the September 2015 application") made by the claimants and granted by me on 25 September 2015. I ordered under CPR 39.2 that the hearing that day ("the 25 September hearing") should be in private. I also ordered that the material prepared for the hearing, and the order made in consequence of the hearing, should be treated accordingly. The reason for granting the status of "in private" was that the claimants asserted that publicity would defeat the object of the application. When granting the status of "in private", I added that this status was conferred "for the time being".
The defendant has had no notice of the hearings before me. I stress that the account given below is based on the claimants' allegations only. That account may well be rebutted by the defendant.
Although the September 2015 application was made in private, it was made in an extant and public commercial claim ("the main action"). I describe the main action in section B below. In section C below I record certain aspects of what has been said about the applicants and those who assist them. Section D below describes the September 2015 application, the order that I made on 25 September 2015 ("the September 2015 order"), and the reasons for that order. Section E below describes events after 25 September 2015, including hearings held in private, and attended by the claimants' side only, on 27 November, 30 November and 10 December 2015. In section F below I set out my analysis and my conclusions.
I shall give a separate judgment in relation to a different application ("the November 2015 application"). When first proposed in November 2015 it was suggested that it would be made by the same entity and individuals as constitute the claimants in the main action. The November 2015 application was the subject of a substantial part of the submissions by counsel for the claimants on 27 November, 30 November and 10 December 2015. At the hearing on 10 December 2015 counsel for the claimants stated that the November 2015 application would be the subject of a separate claim form, the parties to which would differ in certain respects from those in the main action.
B. The main action
The main action, when the claim form was issued in 2012, was registered as folio number 1414. A new registration system for commercial court claims is now in place. Under that system the claim has been renumbered as CL-2015–00625. The claimants, who are the applicants in both the September 2015 application and the November 2015 application, comprise Orb A.R.L. ("Orb", a company formed under the law of Jersey), Roger James Taylor ("Mr Taylor") and Nicholas Thomas ("Mr Thomas"). The defendant is Andrew Joseph Ruhan ("Mr Ruhan"). The solicitors currently on the record for the claimants are Stewarts Law LLP ("Stewarts Law"). For Mr Ruhan the solicitors currently on the record are Memery Crystal LLP ("Memery Crystal").
In a skeleton argument prepared by Mr James Drake QC, Mr Nicholas Gibson and Ms Sarah Martin on 25 September 2015 ("the 25 September skeleton argument") the parties and the nature of the case were described in paragraphs 5 to 9 as follows:
5. In these proceedings generally, the Claimants seek damages and other relief for breach of the terms of an agreement, concluded at a meeting on 6 May 2003, constituting a joint venture between Dr Gerald Smith…, …Mr Taylor and … Mr Ruhan … and/or in respect of Mr Ruhan's breach of his fiduciary duties owed to the Claimants in connection with the agreement.
6. The agreement related to valuable assets owned by the First Claimant. In particular, they concerned a portfolio of hotels including three hotels bordering Hyde Park which all parties recognised were likely to realise significant profits if converted into luxury apartments.
7. While the deal struck between the parties was later partially recorded and given effect by complex written commercial transactions, the key facet of their deal was agreed orally: the Claimants would share in the net financial benefits realised from the development and disposal of the assets to be sold by the First Claimant to Mr Ruhan, after making provision to reimburse monies owed by the First Claimant to another party, Izodia Plc.
8. The Claimants allege that Mr Ruhan has failed to account to the Claimants for their respective shares of those profits, placing him in breach of the agreement and in breach of his fiduciary duties to the Claimants.
9. Mr Ruhan, in turn, makes a number of counterclaims arising from the fact that, following the settlement of related proceedings in the Isle of Man between the claimants (and their associates) and certain of Mr Ruhan's former business associates, the Claimants have acquired assets which they say derive from the assets transferred to Mr Ruhan under the 6 May 2003 oral agreement. Mr Ruhan now asserts proprietary claims in respect of those assets and seeks related relief. He also makes personal claims including for dishonest assistance and unconscionable receipt. The Claimants deny any wrongdoing; it has always been their pleaded position that they will account to Mr Ruhan following trial if it transpires that they have recovered assets with a value greater than their claims.
Paragraph 10 of the 25 September skeleton argument set out recent procedural history in the main action:
10. The procedural history to this matter is complex and, for the most part, not relevant to the present application. In summary, however:
10.1 The claim was issued in October 2012 and the original pleadings closed in April 2013.
10.2 The first CMC was heard before Males J in October 2013.
10.3 Following, and as a result of, the settlement of related proceedings in the Isle of Man in March 2014, the parties each made various applications including: to amend their respective pleadings; to join additional parties; and for injunctive relief. The last of those applications was made in September 2014, and they were heard over 4 days before Cooke J in February 2015 with further hearings of related matters...
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