Berezovsky v Hine and Others
| Jurisdiction | England & Wales |
| Judge | Lord Justice Moses,Lord Justice Aikens,The Master of the Rolls |
| Judgment Date | 07 October 2011 |
| Neutral Citation | [2011] EWCA Civ 1089 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: A3/2011/2406 |
| Date | 07 October 2011 |
[2011] EWCA Civ 1089
Master of the Rolls
Lord Justice Moses
and
Lord Justice Aikens
Case No: A3/2011/2406
Claims No. HC08C03549, HC09C00494, HC09C00711
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
The Hon Mr Justice Mann
Royal Courts of Justice
Strand, London, WC2A 2LL
Richard Gillis QC and Paul Casey (instructed by Addleshaw Goddard LLP) for the Claimant (the appellant)
William Henderson (instructed by Hogan Lovells International LLP) for the Family Defendants (the respondents)
Hearing date: 30 September 2011
The Master of the Rolls:
This is an appeal which has been brought with the permission of the Judge, Mann J, against his decision that certain documents, for which the appellant, Boris Berezovsky, claims privilege, have to be disclosed to the respondents. More accurately, as the Judge pointed out, he decided that the respondents should not be restrained from using the documents in connection with the pursuit of their case in proceedings brought against them by Mr Berezovsky.
The appeal was argued, very well on both sides, on 30 September, when we reserved judgment. Because the appeal needed to be determined with some expedition, we gave our decision that the appeal would be allowed on 4 October, stating that our reasons would follow in a few days. These are our reasons for allowing Mr Berezovsky's appeal.
The background to this appeal
The full background to this appeal is very complex, but, fortunately, the relevant facts can be relatively briefly set out. The respondents have been referred to throughout these proceedings as "the Family Defendants", and I will adhere to that term. They are the surviving family, and principal beneficiaries of the estate, of the late Arkadi "Badri" Patarkatsishvili, who died on 12 February 2008.
Mr Berezovsky is a Russian, and Mr Patarkatsishvili is a Georgina. They built up very large investments in Russia during the end of the last century. Mr Berezovsky says that he was forced to flee from Russia in 2000 as a result of a threat of political persecution, and he has been living in the United Kingdom since October 2001. Mr Beresovsky also says that Mr Patarkatsishvili was forced to flee Russia for similar reasons in 2001, and that he came to the United Kingdom in 2006, where he lived until his death in February 2008.
In December 2008, some ten months after Mr Patarkatsishvili's death, Mr Berezovsky brought proceedings in the Chancery Division ("the main Chancery action") against the Family Defendants and various other individuals and entities who, he claims, in their capacity as successors to Mr Patarkatsishvili, own assets ("the JV assets") in which he has an interest. In that action, Mr Berezovsky claims that he and Mr Patarkatsishvili made an oral agreement in Russia in 1995 that all commercial investments made by either of them would be shared between them equally. This has been referred to as "the joint venture agreement", which, in a judgment given on 14 May 2010, the Judge described as "some form of overriding business super-partnership".
As an alternative to this "overriding business super-partnership", Mr Berezovsky asserts in the main Chancery action a number of individual agreements, pursuant to which he says he acquired an interest in various assets. One such agreement is said to have been made at the Dorchester Hotel in March 2000 ("the Dorchester Hotel meeting"), at which Mr Berezovsky claims that he and Mr Patarkatsishvili obtained a 25% interest in a Russian aluminium company known as "Rusal". Mr Berezovsky says that he is entitled to trace into the assets acquired with the proceeds of sale of that interest, and, to the extent he is unable to recover those assets, he seeks damages from Mr Patarkatsishvili's estate for failing properly to secure them.
In another action brought in the Chancery Division against the Family Defendants, and against Vasily Anisimov and a number of entities controlled by him, Mr Berezovsky claims an interest in a stake held by Mr Anisimov in a company known as Metalloinvest, a Russian ore and mining company, on the basis that it represents monies deriving from the sale of a 25% interest in Rusal in July 2004. Mr Berezovsky claims to have acquired an interest in those monies in a number of ways, including by reason of the bilateral joint venture and as a result of the alleged agreement at the Dorchester Hotel meeting.
The Family Defendants either do not admit or deny Mr Berezovsky's claims in these two actions ("the Chancery actions") for various reasons which it is not necessary to describe for present purposes.
Meanwhile, before Mr Patarkatsishvili's sudden death, Mr Berezovsky had begun an action in the Commercial Court in 2007. In that action ("the Commercial Court action"), Mr Berezovsky raises various claims against Roman Abramovich, including claims in relation to Rusal. Many of his claims in the Commercial Court action in relation to Rusal are based on the assertion that Mr Abramovich agreed to hold an interest in trust for Mr Berezovsky as a result of what was said at the Dorchester Hotel meeting.
That issue and a number of other issues in the Commercial Court action overlap with the similar issues arising in the Chancery actions. Consequently, by an order dated 16 August 2010, made by Mann J and Gloster J sitting together in the Chancery Division and the Commercial Court respectively, it was directed that a number of such overlapping issues ("the overlap issues") be tried as preliminary issues in the Chancery actions, at the same time as the trial of, and by the same Judge who is to decide, the Commercial Court action.
The overlap issues directed to be tried as preliminary issues in the Chancery actions by the Judge hearing the Commercial Court action are, so far as relevant, as follows:
(i) Did [Mr Berezovsky] acquire any interest in any Russian aluminium industry assets by way of [an asset sale] prior to the [Dorchester Hotel meeting] (other than as a result of the joint venture agreement alleged by [him] in the Main Chancery action) and if so, what was the nature and extent of such interest …?
(ii) Was there a [Dorchester Hotel meeting] at which [Mr Berezovsky], Mr Patarkatsishvili, Mr Abramovich and Mr Deripaska agreed to pool their assets in the Russian aluminium industry as [Mr Berezovsky] alleges … ?
(iii) If so [did] Mr Abramovich agree to hold half his 50% interest on trust for [Mr Berezovsky] and Mr Patarkatsishvili? …
(iv) …".
The order relating to the hearing of the overlap issues also provided that documents disclosed in the Chancery actions which are of relevance to the overlap issues must also be disclosed in the Commercial Court action.
The trial of the Commercial Court action and the determination of the overlap issues started on 3 October 2011. The first phase of the subsequent trial of the Chancery actions is due to start in October 2012.
Irrespective of any issue as to the factual existence or legal nature of any understanding or agreement made between them, the relationship between Mr Patarkatsishvili and Mr Berezovsky appears to have been friendly and mutually co-operative right up to Mr Patarkatsishvili's death. In particular, Mr Berezovsky's case in the Commercial Court action appears to have been wholly or mainly supported by Mr Patarkatsishvili. While this state of affairs seems to have continued for a brief period after Mr Patarkatsishvili's sudden death, the Family Defendants began to deny that Mr Berezovsky had any interest in the JV assets. It was, at least in part, as a result of the Family Defendants taking this position that the Chancery actions were started.
The facts relating to this appeal
There have been two recent hearings before Mann J in the Chancery Division relating to the extent of Mr Berezovsky's disclosure obligations for the purpose of the determination of the overlap issues, and they resulted in judgments on 6 July and 6 September 2011. There has been no appeal following the first of those judgments, and this appeal only applies to two of the documents covered by the second judgment. The primary document is a draft witness statement prepared in late 2007 or January 2008 by Cadwaladers, solicitors then acting for Mr Berezovsky in the Commercial Court action, for the purpose of that action.
At that time, another firm of solicitors, Ghersons, were acting for Mr Berezovsky in relation to his tax position and to potential challenges to his asylum claim (although it had been granted). Ghersons were also acting at that time for Mr Patarkatsishvili in connection with his asylum claim (which had not been granted).
On 21 January 2008, Cadwaladers sent to Mr Gherson and Mr Micklethwaite at Ghersons copies of draft witness statements which they had prepared for Mr Berezovsky and for Mr Patarkatsishvili ("the draft statements") in the Commercial Court action. Mr Gherson was acting for Mr Patarkatsishvili as well as for Mr Berezovsky; Mr Micklethwaite was acting for Mr Berezovsky, and not for Mr Patarkatsishvili. The draft statements were sent by way of attachments to an email ("the first email"), which described its "subject" as "Berezovsky witness statements: Privileged and Confidential". We have not seen the substantive text of the first email, as it is either irrelevant or privileged – or both.
A week later on 28 January 2008, Mr Micklethwaite forwarded the first email (with the attached draft statements) to three other solicitors in Ghersons, who were all acting for Mr...
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