1. Pace Europe Ltd and Others v Paul Alan Dunham Sandra Jane Dunham
| Jurisdiction | England & Wales |
| Judge | Judge Purle |
| Judgment Date | 22 March 2012 |
| Neutral Citation | [2012] EWHC 852 (Ch) |
| Court | Chancery Division |
| Date | 22 March 2012 |
| Docket Number | Case No: BM20031CH |
[2012] EWHC 852 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
BIRMINGHAM DISTRICT REGISTRY
Civil Justice Centre
The Priory Courts
33 Bull Street
Birmingham B4 6DS
His Honour Judge Purle, Qc (Sitting as a Judge of the High Court)
Case No: BM20031CH
and
MR. SIMON PASSFIELD of counsel instructed by Eversheds appeared for the Appellants
MR. THOMAS ELIAS of counsel instructed by Premier Solicitors appeared for the Respondents
Judge Purle, QC:
This is an appeal from the decision of the district judge who set aside on 11 th January of this year statutory demands served by the Appellants on the Respondents.
The statutory demands were served on behalf of three companies within the Pace group of companies (I shall call them "Pace") against Mr. and Mrs. Paul and Sandra Dunham who were formerly employed by Pace in the United States. Following the termination of their employments, which, I understand, was somewhat sudden, proceedings were brought against them by Pace in North Carolina resulting ultimately in a judgment which as to part forms the basis of the statutory demands.
The judgment itself was obtained following a hearing which the Dunhams did not attend. The judgment is dated 12 th July 2010, following a hearing between 28 th and 30 th June. Before that, evidence was given on deposition in England, though not by the Dunhams, who did not attend, though ordered to do so. The judgment identified in paragraph 94 what were said to be misappropriations of corporate funds by the Defendants acting in concert in the amount of $2,112,771.75.
A number of causes of action were pursued and the order of the court at the end of the judgment reads as follows:
"Based on the foregoing findings of fact and conclusions of law, therefore, it is hereby ordered, adjudged and decreed that:
1. The Plaintiffs are awarded $2,112,771.75 in damages against Defendants jointly and severally on Plaintiffs' claims of breach of contract, fraud, breach of fiduciary duty and constructive fraud."
I interpose to say that "constructive fraud" is a label used to describe what I think in this country would called breach of fiduciary duty, consisting of the failure on Mr. Dunham's part to reveal his and his wife's wrongdoing.
Paragraph 2 of the judgment goes on to grant Mr. Dunham a set off or credit against that sum, pursuant to a promissory note in his favour, reducing the damages to $1,794,260.30.
Paragraph 3 reads as follows:
"The actions of Defendants constituted unfair and deceptive trade practices and that the aforementioned damages are trebled and the total amount of damages against the Defendants jointly and severally is $5,382,780.90."
What is trebled, it can be seen, is the reduced amount in paragraph 2 so that, in effect, there is a treble crediting of the promissory note, not just in Mr. Denham's favour but in Mrs. Denham's favour as well.
Paragraphs 4 and 5 dismiss counterclaims for unfair or constructive dismissal. Paragraphs 6 and 7 provide as follows:
"6. The court also in its discretion awards Plaintiffs their attorneys' fees in an amount to be supported by an affidavit from Plaintiffs' counsel pursuant to… (and then the local law is identified)."
"7. That Plaintiffs be awarded $132,073.25 … which represents Plaintifs' reasonable attorneys' fees and expenses in this matter"
That also is expressed by paragraph 8 to be a joint and several award.
There has been no appeal from that judgment and it is now final.
It will be noticed that the trebling of the damages award in paragraph 3 is said to arise out of the actions of the Defendants constituting unfair and deceptive trade practices. Under a local statute in North Carolina, treble damages can be awarded in respect of such practices. However, the award under paragraph 1 is not an award under the local legislation relating to unfair and deceptive trade practices but relates to claims for breach of contract, fraud, breach of fiduciary duty and constructive fraud in the sense which I have explained.
Accordingly, it seems to me that this judgment recognises five distinct causes of action: the four mentioned in paragraph 1, and the one mentioned in paragraph 3. In addition, there is the costs award.
The significance of that analysis is that, under the Protection of Trading Interests Act 1980, in this country a judgment for multiple damages cannot be registered and, as subsection (1) provides:
"No court in the United Kingdom shall entertain proceedings at common law for the recovery of any sum payable under such a judgment."
Read literally that would appear to preclude recovery of any sum, even in respect of a separate cause of action not susceptible to multiple damages, where some other part of the judgment awards multiple damages.
However, the Court of Appeal in Lewis v Eliades [2004] 1 WLR 692 held that a purposive approach to construction of the 1980 Act was appropriate. The Act (see Potter LJ at paragraph 48) represented a statutory exception to the broad principle of recognition and enforcement of judgments observed for several centuries in this country under the common law. It was open to the court upon examination of a judgment to conclude that an unexceptionable part could readily be distinguished, separated and quantified for the purposes of enforcement.
Potter LJ's judgment also supports the proposition that, where there is a multiple award, even the basic compensatory award cannot be recovered. That was in the context of the United States racketeering legislation (RICO, as it is known for short) which, as in the case of the local North Carolinian statute here, enables treble damages to be awarded. But the cause of action was exclusively under RICO. Both the compensatory and the punitive elements were referable to that cause of action. There was no other recognisable cause of action attracting compensatory damages alone.
This case is different. There is first a compensatory award for breach of contract, fraud, breach of fiduciary duty and constructive fraud. There is then a separate award for treble damages under the local statute for unfair and deceptive trade practices. It is that separate judgment which cannot be enforced here. I shall assume that even the compensatory element of that separate judgment cannot be enforced here, though I have some doubts about that. That point was not actually decided by Lewis v Eliades. Be that as it may, the separate compensatory award under paragraph 1 of the North Carolina judgment is, on the authority of Lewis v Eliades, to be recognised and enforced here.
It would be wrong to regard paragraph 1 of the North Carolina judgment as just a step towards an award which is subsumed entirely by the treble damages award in paragraph 3. Paragraph 1 is a freestanding award, albeit that the total damages cannot exceed the trebled amount. That, however, is not because of the application of the local statute but because of the rule against double recovery which, no doubt, applies (as regards the compensatory award) as much in North Carolina as it does here.
In those circumstances, whilst the district judge was persuaded by the argument that the appellant was at least arguably attempting to...
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Paul Dunham and Another v Government of the United States
...in this jurisdiction: a sum $1,794,260.30 (the amount of the judgment before the trebling of the damages), see Pace Europe and others v. Paul Alan Dunham and Sandra Jane Dunham [2012] EWHC 852 (Ch). 27 In the meantime criminal proceedings had begun in the State of Maryland. On 7 December 20......