Aeroflot v Berezovsky

JurisdictionEngland & Wales
JudgeMr Justice Morgan
Judgment Date17 December 2013
Neutral Citation[2013] EWHC 4348 (Ch)
CourtChancery Division
Docket NumberCase No: HC10C04393
Date17 December 2013

[2013] EWHC 4348 (Ch)



Courtroom No. 2

7 Rolls Building

Fetter Lane




The Honourable Mr Justice Morgan

Case No: HC10C04393


Mr Atherton, QC & Miss Weaver appeared on behalf of the RECEIVERS

Miss Ford appeared on behalf of MISS BEREZOVSKAYA

Mr Sinclair appeared on behalf of STREATHERS LLP

Mr Cotlick appeared IN PERSON

Mr Justice Morgan

I have before me two applications which were made in relation to the estate of the late Mr Boris Berezovsky. Before I describe what is involved in those applications, it is necessary to go back in the history of these proceedings to explain what earlier orders were made and the reasons for those orders. Mr Berezovsky died on the 13 th March 2013. He left a Will and he appointed executors. To date, no one has applied for probate of the Will and become an executor with probate. Not very long after his death, by April 2013, concerns were expressed as to the preservation of the assets in Mr Berezovsky's estate. So far as I am aware, those concerns were first expressed by a company called Joint Stock Company Aeroflot-Russian Airlines, to which I will refer as Aeroflot.


Aeroflot had issued proceedings against Mr Berezovsky in his lifetime. In those proceedings, Aeroflot claim substantial damages for alleged wrongdoing by Mr Berezovsky. Aeroflot had contended in April 2013, that it was a creditor of the estate of Mr Berezovsky. On the 29 th April 2013, I appointed two members of Grant Thornton LLP to be court appointed receivers in relation to the estate. I gave my reasons for that appointment in a judgment given on that day. In short, I was persuaded that in the absence of anyone else acting to represent the estate of the deceased, it was appropriate to have court appointed receivers to receive, collect and get in the assets of the estate. That was intended to preserve the assets of the estate, against a background where it was being alleged that the assets were in danger of being dissipated and forever lost.


Later, on the 19 th June 2013, I made a further order giving the receiver certain express powers. The terms of that order had been the subject of considerable discussion between the parties. As I recollect it, that order was made as the result of a negotiated compromise between the various interested parties. The order I made contained two provisos. The second proviso was in these terms;

'No power conferred by this order shall give the receivers power to do any act or obtain any property, document or information which the duly constituted personal representatives of the estate, could not have done or obtained, nor obtain any document or information that is subject to any legal professional privilege, including that of the estate, which has not been waived.'


In due course, a daughter of the late Mr Berezovsky, a Miss Ekaterina Berezovskaya, applied to be appointed as an administrator of the estate ad colligenda bona. That application came before me on the 4 th September 2013. The application was strenuously opposed by Aeroflot. Indeed, two days earlier on the 2 nd September 2013, Aeroflot had brought proceedings which have since been described as the Part 8 claim, and in those proceedings they sought an order determining that Miss Berezovskaya should not be allowed to be a representative of the estate, whether as executrix or as administratrix, and certainly not ad colligenda bona.


The hearing on 4 th September 2013 came hot on the heels of the issue of the Part 8 claim form. I was not asked at that hearing to rule on Part 8 claim form, either by acceding to it or by dismissing it. What I did on the 4 th September 2013 in that respect appears in paragraph 12 of the order made on that day. I directed that, both in relation to Miss Berezovskaya's application for a grant of administration, and in relation to the Part 8 claim the following :

'The applicant's application for a grant ad colligenda bona in respect of the full administration of the estate is adjourned. A CMC in respect of both the applicant's application for a grant ad colligenda bona and the claimant's Part 8 claim, …, shall be fixed through the usual channels to be listed before Mr Justice Morgan with a time estimate of half a day and pre-reading. The CMC has been certified as fit for expedition. The parties shall provide skeleton arguments in advance of the CMC and shall notify the court if the time estimate should change.'


Because on the 4 th September 2013, there remained uncertainty as to what was to happen to Miss Berezovskaya's application to be appointed as administratrix and as regards the Part 8 claim, I considered that it was necessary to do something on an interim basis. What I did, as appears from paragraphs 1 to 11 of the order, was to appoint Miss Berezovskaya for certain limited purposes, as an administratix. One of the purposes for which she was appointed was to deal with certain litigation that was then pending. Paragraph 3(a) of the order summarises the litigation referred to. In one action there was considerable time pressure on the parties because there was to be an appeal in the Court of Appeal to be heard in November 2013 and it was desirable that someone represent the estate of Mr Berezovsky in connection with that litigation. I considered that Miss Berezovskaya was an appropriate person to appoint for that purposes and at the same time I extended her appointment to the other litigation, although the time pressure in the case of that litigation was not understood to be so great. I also appointed Miss Berezovskaya to be an administrator with regard to issues concerning the grave of the deceased and his personal effects. The purpose of appointing Miss Berezovskaya in that way was to produce a short-term solution to what were considered to be immediate and pressing problems.


I go from there to the Part 8 claim. As I have described, the claim form was issued on the 2 nd September 2013. It was supported by evidence that was served on behalf of Aeroflot. Aeroflot made a number of criticisms of Miss Berezovskaya's suitability. They also made an important submission that the estate of Mr Berezovsky was insolvent and significantly so. When dealing with the matter on the 4 th September 2013, I indicated that the solvency of the estate may turn out to be a most important consideration, when determining the fate of Miss Berezovskaya's application to be appointed administratix and the Part 8 claim form. If the estate were solvent, the court might think that it was appropriate to have a family member and beneficiary administer the estate. If, on the other hand, the estate was insolvent the court might think that it was appropriate to have an insolvency practitioner whose primary concern would be the creditors, rather than the family members and beneficiaries.


After the hearing on 4 th September 2013, as I understand it, Miss Berezovskaya has put in substantial evidence dealing, amongst other things, with the solvency of the estate. I am told that she has herself signed a witness statement and she also relies on a witness statement of her solicitors, a Mr Hastings of Addelshaw Goddard LLP. I have been shown a lengthy statement described as his third witness statement, which deals with the solvency of the estate. The background to this witness statement is that Aeroflot had obtained copies of the reports made by the receivers that had been appointed. Those reports referred to the assets and liabilities of the estate and Mr Hastings, in a detailed witness statement, addresses many of the points made by the receivers and gives his reasons for fundamentally disagreeing with the opinion arrived at by the receivers.


There has not been a response to Mr Hastings' witness statement or indeed Miss Berezovskaya's witness statement, as I understand it, and there is due to be heard on Friday of this week, the 20 th December 2013, an application by Aeroflot which deals with the way in which the evidence has been served upon Aeroflot. I will say nothing today about those matters, which have yet to be argued and only then will they be decided. It is pertinent to note however that the two protagonists, Aeroflot and Miss Berezovskaya, take radically different positions as to the solvency of the estate. I earlier said that Aeroflot's case is that the estate is insolvent and Miss Berezovskaya's case is that the estate is solvent, that is somewhat of an understatement of the degree of difference. Aeroflot would have it that the estate is massively insolvent and Miss Berezovskaya would have it that the estate is comfortably solvent. Neither side says that this is anything like a borderline case or near a borderline case.


Despite my ambitions on the 4 th September 2013 that the Part 8 claim would be progressed with proper speed and that the appointment of the receiver and the appointment of Miss Berezovskaya would essentially be short-term interim measures, the Part 8 claim has not in fact been progressed. I have referred to the fact that on Friday of this week there is to be an application dealing with evidence. There has not yet been fixed a case management conference, in accordance with the order of the 4 th September 2013. At any rate, if it has been fixed, it is not fixed for any date that is about to arrive but is some way off. So the proceedings which were designed to determine the medium — term position as to representation of the entire estate of Mr Berezovsky had not progressed, but had very badly gone into the doldrums. In the meantime, the short-term initiatives which were designed to be helpful, have given rise to a fair measure of contention of their own and indeed, these two applications today, which have taken the...

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