Akkurate Ltd ((in Liquidation)) v John Christopher Richmond
| Jurisdiction | England & Wales |
| Judge | Mr Justice Freedman |
| Judgment Date | 28 September 2023 |
| Neutral Citation | [2023] EWHC 2392 (Ch) |
| Court | Chancery Division |
| Docket Number | Case No: BL-2021-001907 |
[2023] EWHC 2392 (Ch)
Mr Justice Freedman
Case No: BL-2021-001907
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
BUSINESS AND PROPERTY COURTS
Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL
James Pickering KC and Samuel Hodge (instructed by Spring Law) for the Claimants/Respondents
Claire Bunbury ((instructed by TLT LLP) for the First Defendant/First Applicant
Jamie Riley KC (instructed by Addleshaw Goddard LLP) for the Second Defendant/Second Applicant
Hearing dates: 16–19 and 22 May 2023
Post-reply written submissions: 23 May 2023
Judgment handed down in draft: 19 September 2023
Approved Judgment
This judgment was handed down remotely at 10.30am on Thursday 28 September 2023 by circulation to the parties or their representatives by e-mail and by release to the National Archives.
| SUBJECT | PARAGRAPH NUMBERS | |
| I | Introduction | 1 – 4 |
| II | The parties | 5 – 11 |
| III | Summary judgment/strike out: legal principles | 12 – 18 |
| IV | Unusual features of the applications | 19 – 25 |
| V | Abuse of process/res judicata | 26–29 |
| VI | Has the claim against Mr Richmond been discharged by compromise of an earlier claim? | |
| (a) The case of Mr Richmond | 35 – 37 | |
| (b) The case of the Claimants | 38 – 39 | |
| (c) Discussion | ||
| (i) The law | 40–48 | |
| (ii) Applying the law | 49 – 65 | |
| VII | Claim for breach of fiduciary duty in connection with the sale of the Trademarks and the subsequent exploitation | |
| (a) Introduction | 66 – 67 | |
| (b) The factual case | 68 – 79 | |
| (c) Was Mr Richmond a purchaser of the Trademarks? | 80 – 110 | |
| (d) Did Mr Richmond owe fiduciary obligations as regards the Trademarks to the Company? | 111 | |
| (e) The conduct of Mr Richmond relied upon as giving rise to a fiduciary duty | 113 – 117 | |
| (f) The case of the Defendants | 118 – 124 | |
| (g) The case of the Claimants | 125 – 131 | |
| (h) The law relating to fiduciary duties | 132 – 135 | |
| (i) The extent to which duties of directors of a company were capable of continuing following a compulsory liquidation. | 136 – 151 | |
| (j) Discussion | 152 – 168 | |
| VIII | Claim in respect of stock | 169 – 171 |
| (a) The case of the Defendants | 172 – 173 | |
| (b) The case of the Claimants | 174 – 177 | |
| (c) Discussion | 178 – 184 | |
| IX | Claim about representations in respect of the 2019 Settlement | |
| (a) The nature of the claim | 185 – 191 | |
| (b) The case of the Claimants | 192 – 193 | |
| (c) The case of the Defendants | 194 – 198 | |
| (d) Discussion | 199 – 206 | |
| (e) Various matters raised in argument | 207 – 212 | |
| X | Dishonest assistance | 213 |
| (a) The law | 214 – 218 | |
| (b) Application of the law to the facts | 219 – 223 | |
| (c) The liability of Mr Schofield for the 2019 Settlement | 224 – 226 | |
| XI | Conspiracy to injure | 227 – 236 |
| XII | Conclusion | 237 – 241 |
I Introduction
There are before the Court applications by the First Defendant Mr John Richmond (“Mr Richmond”), a former director of the First Claimant (“the Company”) and by the Second Defendant Mr Mark Schofield (“Mr Schofield”) for reverse summary judgment and/or strike out against the Claimants. It will be necessary to consider first who the parties are, the applicable principles and the issues to be determined.
There are various claims against Mr Richmond in this action which are said to be barred by Mr Richmond to be barred on the basis of a settlement agreement made in 2019 by Mr Richmond and the Claimants which is said to have settled and/or extinguished certain claims which are now pursued in this action against Mr Richmond. The claims made against Mr Richmond comprise:
(i) a claim for breach of fiduciary duty that he acquired secretly interests in Trademarks which were sold by the Claimants. Mr Richmond denies that he had any such interest in the acquiring vehicles or that he owed any fiduciary obligations to the Company;
(ii) a claim in respect of stock of the Claimants and the failure of Mr Richmond to protect the interests of the Company in respect of the stock. Mr Richmond denies that the stock was owned by the Claimants or that he was involved in the acquisition of the stock;
(iii) a claim about representations on the part of Mr Richmond made in order to enter into a settlement agreement in 2019. This is denied in particular on the basis that it is denied that the representations were made or that they induced the settlement agreement made on 23 May 2019 (“the 2019 Settlement”) or that the Claimants relied on the representations (if they were made).
There are claims of dishonest assistance made against Mr Schofield, which are denied. There are claims for unlawful means conspiracy which are denied by the Defendants.
Before considering the above, there will be an outline as to who are the parties. Then the principles applicable to summary judgment/strike out applications will be set out. There will be highlighted unusual aspects of the applications. It will also be pointed out that whilst abuse of process arguments/res judicata may arise for the purpose of trial, it is accepted that this does not arise for the purpose of this application.
II The parties
The Company went into compulsory liquidation on 18 May 2015. It was on a petition of HMRC with a claim for unpaid taxes and penalties of about £1.6 million. There were creditor claims notified to the Company in liquidation of approximately £17 million.
The Second Claimants are liquidators of the Company. There have been changes in the officeholders from time to time. As at the time of the commencement of this action, Mr Short and Mr Wolloff were in office. Mr Illes later replaced Mr Wolloff as joint liquidator and became a Second Claimant in these proceeding by order on 18 January 2023. The term “the Liquidators” is used to refer to the Liquidators from time to time.
Mr Richmond is a fashion designer who created his eponymous brand “John Richmond” in the 1980s. Since then, he has created other related brands and labels which became the subject of various registered trademarks (“the Trademarks”).
The Company was incorporated on 2 April 1998 and operated as the owner of the Trademarks. Pursuant to various licence agreements, it licensed the Trademarks to manufacturers in the fashion industry. The company had two 50% shareholders, namely (i) Hamptons Services Limited, a BVI registered company controlled by Saverio Moschillo (“Mr Moschillo”), and (ii) Word Cloths Holdings Limited an English company (“WCHL”) jointly owned and controlled by Mr Richmond and Mr Tony Yusuf (“Mr Yusuf”).
On 26 March 1999, Mr Richmond was appointed a director of the Company which office he retained until the Company entered liquidation. Mr Richmond held 70% of the shares of WCHL, and therefore indirectly held a 35% stake in the Company. Mr Moschillo became a director of the Company in 2001. At the time of its liquidation, Mr Richmond and Mr Moschillo were directors of the Company. There are issues regarding the status of Mr Richmond after the liquidation, to which reference will be made below.
Mr Schofield and Mr Richmond first met in 1988 and have had at least intermittent contact since then including in 2014, discussing an attempt to acquire on a 50/50 basis the ‘Destroy’ fashion label then owned by WCHL. By the time of the events in question, according to the Claimants, they were very well acquainted, communicating with each other sometimes very frequently on personal and business matters, and going on a family holiday together in 2015.
Mr Schofield is a beneficiary together with other members of his family of a Guernsey based discretionary trust called The Toco Trust of which the sole trustee is a Guernsey fiduciary company, namely Liberation Management Limited (“LML”). Mr Schofield has provided consultancy services to The Toco Trust as a representative of an English company called UCommunications Limited of which he has been the sole shareholder.
III Summary judgment/strike out: the legal principles
There are before the Court applications on behalf of both Defendants respectively for reverse summary judgment and/or strike out. The threshold and the applicable principles are so similar that it is very frequent for applications to be made in the alternative for summary judgment or strike out.
CPR 24.2 provides as follows:
“The court may give summary judgment against a claimant or defendant on the whole of a claim or on a particular issue if —
(a) it considers that —
(i) that claimant has no real prospect of succeeding on the claim or issue; or
(ii) that defendant has no real prospect of successfully defending the claim or issue; and
(b) there is no other compelling reason why the case or issue should be disposed of at a trial.
(Rule 3.4 makes provision for the court to strike out) a statement of case or part of a statement of case if it appears that it discloses no reasonable grounds for bringing or defending a claim)”
CPR 3.4 provides as follows:
“(2) The court may strike out a statement of case if it appears to the court —
(a) that the statement of case discloses no reasonable grounds for bringing or defending the claim;
(b) that the statement of case is an abuse of the court's process or is otherwise likely to obstruct the just disposal of the proceedings; or
(c) that there has...
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