Anthony Douglas King v Barry Stiefel

JurisdictionEngland & Wales
JudgeMrs Justice Cockerill,Mrs Justice Cockeril
Judgment Date26 April 2021
Neutral Citation[2021] EWHC 1045 (Comm)
Date26 April 2021
Docket NumberCase No: CL-2020-000066
CourtQueen's Bench Division (Commercial Court)
Between:
(1) Anthony Douglas King
(2) James Patrick King
(3) Susan May King
Claimants
and
(1) Barry Stiefel
(2) Robin Fisher
(3) Peter Swain
(4) Primekings Holding Limited
(5) Clare Victoria Toomer
(6) Roderick John Cowper
(7) Peter David Levinger
(8) Teacher Stern LLP
(9) Paul Downes QC
(10) Jacob Isaac Rabinowicz
Defendants

[2021] EWHC 1045 (Comm)

Before:

The Honourable Mrs Justice Cockerill DBE

Case No: CL-2020-000066

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

COMMERCIAL COURT

Royal Courts of Justice

Strand, London, WC2A 2LL

Christopher Newman (instructed by Metis Law Limited) for the Claimants

Catherine Addy QC and Joseph Sullivan (instructed by Macfarlanes LLP) for the First to Fourth Defendants

Daniel Lightman QC and Charlotte Beynon (instructed by Kennedys Law LLP) for the Fifth to Eighth and Tenth Defendants

Charles Hollander QC (instructed by DAC Beachcroft LLP) for the Ninth Defendant

Hearing dates: 15, 16, 17, 18, 22 and 23 February 2021

Draft sent t0 Parties: 19 April 2021

Approved Judgment

I direct that no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.

THE HONOURABLE Mrs Justice Cockeril

Mrs Justice Cockeril Mrs Justice Cockerill

Introduction

1

On 28 April 2017 a claim in fraudulent misrepresentation brought by the Claimants (“the Kings”) against the Second to Fourth Defendants to this claim commenced in the Chancery Division before Marcus Smith J. The claim is referred to below as “the Misrepresentation Claim”. The misrepresentations alleged arose out of the negotiations for the sale of a company founded by Mr James King, Kings Solutions Group Limited (“KSGL”) to the Fourth Defendant, Primekings. The trial was listed for 20 days.

2

It is fair to say that the case did not go as the Kings hoped. On Day 10 of that action the Kings discontinued that claim, apologised to those Defendants, and consented to pay the costs of the action on the indemnity basis. After short argument, Marcus Smith J ordered a payment on account of £1.7 million to be made in relation to that costs liability (“the Payment on Account Order”).

3

From these basic facts has sprung a multiplicity of litigation which must inevitably put any observer with a taste for nineteenth century fiction in mind of the infamous Jarndyce case. The current claim is but one outcropping of that litigation.

4

In this action the Kings bring a claim in unlawful means conspiracy against the First to Fourth Defendants (“the Primekings Defendants”), and those Defendants' legal representatives in the Misrepresentation Claim: the Fifth to Eighth and Tenth Defendants, Teacher Stern LLP and certain partners, a former partner and an employee of that firm (“the Teacher Stern Defendants”) as well as Primekings' leading counsel Mr Paul Downes QC. The conspiracy is dealt with further below, not least because it defies any powers of precis.

5

The Kings claim substantial damages on the basis that but for this conspiracy they would have won the Misrepresentation Claim, or that they would now be owners of a 40% stake in KSGL, or that they would not have had to pay costs arising out of the Misrepresentation Claim. They also claim damages for a variety of other more unusual heads of loss.

6

The three groups of Defendants each apply to strike out those claims.

7

The principal other proceedings to which reference will be made are:

i) The Detailed Assessment Proceedings: the proceedings before the Senior Courts Costs Office wherein the costs ordered to be paid pursuant to the Payment on Account Order were assessed. Those proceedings closed late last year with a certificate being issued in the sum of £2,726,154.87, including £337,309.14 for interest as at 17 November 2020 and £168,664.00 for the costs of assessment.

ii) The Professional Negligence Action: the proceedings in this court whereby the Kings seek damages against their own legal team in the Misrepresentation Claim (“the Misrepresentation Team” collectively and also “the Misrepresentation Solicitors” and “the Misrepresentation Counsel”) for breaches of duties of care and fiduciary duties. That case remains live;

iii) The s. 994 Proceedings: the proceedings in the Companies Court in which it is alleged that Primekings and a number of other Respondents acted in a manner unfairly prejudicial to the interests of the Kings as shareholders in KSGL. Parts of the Kings' points of claim have now been struck out by Mr Tom Leech QC (sitting as a Deputy High Court Judge) in a judgment [2020] EWHC 2861 (Ch), but some aspects of the dispute remain live.

8

There is also one separate piece of litigation in the other direction. In a claim in the Chancery Division Kings Security Systems Limited (“KSSL”) claimed against Mr Anthony King (“Mr King”) for breach of fiduciary duty, the central allegation being that he took a bribe from KSSL's company car provider. In a judgment [2021] EWHC 325 (Ch) Mr Andrew Lenon QC (sitting as a Deputy High Court Judge) has found in favour of KSSL.

9

Regrettably this judgment can be neither short nor user friendly because there are a number of complications, principally:

i) Each set of Defendants seeks the strike out on a different basis, and each application itself contains a number of different components;

ii) The nature of the claim necessarily involves some consideration of the other proceedings; and

iii) That necessary overlap has been intensified by the fact that Mr Newman, acting for the Kings, has defended the claim very much by reference to what one might term the wider field of battle, rather than focussing only or mainly on the arguments advanced by the Defendants.

10

I have structured this judgment as follows:

i) Introduction

ii) The Law

a) The Legal Principles on Strike out and summary judgment

b) The relevance of the absence of a defence

c) Is there a need for an applicant for summary judgment to swear to the absence of real prospect of success?

iii) The Facts

a) The Misrepresentation Claim

b) Further Litigation

c) Enforcement of the Payment on Account Order

d) The s. 994 Proceedings

e) The Professional Negligence Action

f) The Detailed Assessment Proceedings

g) The current proceedings

iv) The Particulars of Claim

v) Clarifying what is in issue

a) The Claim for the Value of the Misrepresentation Claim

i) Iteration 1: The Pleaded Threats

ii) Iteration 2: The Inferential/Unpleaded Threats

b) The Costs Claim

c) Analysis of the Claim: result

vi) The Costs Allegations: the Effect of the Final Costs Certificate

a) The law

b) The issue and submissions here

c) Discussion

vii) CPR 38.7 and abuse of process

viii) Discrete Issues

a) Immunity from Suit (Mr Downes only)

b) Mr Rabinowicz (Mr Rabinowicz only)

c) Without prejudice Privilege

d) The status of the unpleaded case

ix) The substance of the pleaded claims

a) Inferences of fraud and pleading fraud

b) The Pleaded Threats

c) The “Hidden Contingency Fee”

d) The Accounts Evidence

e) The £3 million costs figure

f) Shadow ledger

g) The Smith and Williamson evidence

h) The 577 hours issue

i) Conclusion

x) The Inferred Threats

a) The conflict of interest

b) The extraordinary events

c) Mr Downes' failure to exploit the B share error

d) The absence of Howard Smith

e) Conclusion

xi) Post-script: The conduct of the Kings' case

a) Specific allegations which lack basis

b) The leap from thinking the worst to accusation

c) Full and Frank disclosure

d) Routine accusations of impropriety

The Law

The Legal Principles on Strike out and summary judgment

11

The most often cited summary of the law in this area is in Easyair Ltd v Opal Telecom [2009] EWHC 339 (Ch) [15]. It has been applied by the Court of Appeal more than once, and on innumerable occasions at first instance. No-one overtly suggested that there was any fault to be found with it. I shall revert to it further below.

12

There is one aspect of the law on summary determination to which I should give particular attention, though in practical terms it has little impact on my decision. The Kings were emphatic that there is binding Court of Appeal authority stating that where a defence has not been filed, the facts pleaded in the Particulars of Claim have to be assumed to be true. This point was made by reference to Thomas v News Group Newspapers [2001] EWCA Civ 1233 and to what Mr Newman referred as “the Thomas Principle”.

13

This so-called principle was derived from the passage at [3] where Lord Phillips M.R. said:

“In this case the appellants had taken out their strike-out application before filing a defence. In such circumstances … The court proceeds on the assumption that the facts alleged by the claimants will be proved at the trial and considers whether, on that premise, the claim has any realistic prospect of success. If it does, it is permitted to proceed to trial; if it does not it is struck out unless there is some other compelling reason why the case should go to trial.”

14

This authority is not one which has attracted much attention from the textbook writers, save in the context of the offence or tort of harassment. It does not, contrary to Mr Newman's submissions, set out any statement of principle as regards the approach to summary judgment. On closer examination it transpired that it was a case which was all about the definition of “harassment”. There appears to be no reference to any evidence at all in the case. There was no question about whether the court had to assume all the facts alleged to be true. The reliance placed upon it was therefore thoroughly misplaced and evidences an apparent misunderstanding of the proper use of precedent, and what...

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