Brink's Mat Ltd v Elcombe
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE RALPH GIBSON,LORD JUSTICE BALCOMBE,LORD JUSTICE SLADE |
| Judgment Date | 12 June 1987 |
| Judgment citation (vLex) | [1987] EWCA Civ J0612-7 |
| Docket Number | 87/0609 |
| Court | Court of Appeal (Civil Division) |
| Date | 12 June 1987 |
[1987] EWCA Civ J0612-7
Lord Justice Slade
Lord Justice Balcombe
Lord Justice Ralph Gibson
87/0609
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
(MR. JUSTICE ALLIOTT)
Royal Courts of Justice
MR. M. G. TUGENDHAT Q.C. and MR. D. PARSONS (instructed by Messrs. Shaw & Croft) appeared for the Appellants (Plaintiffs).
MR. P. L. O. LEAVER Q.C. and MR. J. P. ONIONS (instructed by Messrs. Roscoe-Phillips) appeared for the Respondents (Defendants).
This is an appeal by the plaintiffs Brinks Mat Ltd. from the order of Alliott J. of 15th April 1987 whereby an interlocutory injunction made by Roch J. on 9th December 1986 was discharged as against the ninth defendant Boinco and the tenth defendant Mr. Stephen Philip Kay. Roch J. had on 9th December 1985 on an ex parte application by the plaintiffs ordered that nine out of the eleven defendants in this action be restrained until trial or further order from disposing of the assets listed against their names in a schedule to the order. So far as concerns Boinco and Mr. Kay the assets so listed are described as the proceeds of sale of Cyclops Wharf, a dockland property in West Ferry Road, E.14. The order was made, of course, upon the usual undertakings, including undertakings as to damages, given by the plaintiffs. The plaintiffs seek an order continuing the injunction until trial.
The action in which this interlocutory appeal is brought is but one of a number of separate actions in which Brinks Mat Ltd. claim various forms of relief against a number of men and women and corporations. All the claims arise, directly or indirectly, out of the Brinks Mat robbery at Heathrow in November 1983 when valuables, including gold bullion worth then some £25m, were stolen. The main grounds of claim made against the first nine defendants in this case are three: firstly, damages for wrongful interference with the stolen gold: next, damages for conspiracy to injure the plaintiffs and for procuring the breach of duty of a servant of the plaintiffs who was involved in the robbery; and, thirdly, for declarations that certain assets are the proceeds of sale of, or profits made from the use of, the stolen gold and are held on trust for the plaintiffs. The parties to this appeal are Boinco and Mr. Kay. The plaintiffs' claim against Boinco is advanced on all three grounds but as against Mr. Kay it is made only on the third ground of constructive trust. Mr. Kay appears to have been caught up in this litigation because he is and has long been the close personal friend of Mr. Relton, a solicitor. Mr. Relton acted for Mr. Parry, the seventh defendant, who on the evidence before the court got hold of some £2.7m in cash in sterling and paid it into an account, code-named "Burton", in a bank in Zurich. That fund was the source of finance for a large number of property deals in this country, and for one in Spain, by which large profits were made by companies formed, or acquired, and operated, for Mr. Parry by Mr. Relton. Mr. Relton has admitted that the money in the Burton account was the proceeds of the stolen gold and that he knew that fact from about December 1985.
In January 1986 the eighth defendant Selective, a Jersey company, owned and controlled by Mr. Parry, or by Mr. Parry and Mr. Relton, contracted to buy Cyclops Wharf from Durable Warehousing Co. Ltd. for £2.7m. Only £135,000 was paid as deposit by Selective. The rest of the purchase price was payable as to £135,000 on 31st July and the balance on 1st May 1987. On 29th July 1986 Selective contracted to sell Cyclops Wharf to Chrysalis PLC for £4.25m, to be paid by instalments with completion on 1st May 1987 and to yield a gross profit of £1.55m. Thus Selective did not have to find any further funds from its own resources. Under the resale contract to Chrysalis Selective received £600,000 on 29th July 1986; £400,000 was to be paid on 15th December 1986; £300,000 on 2nd March 1987; and the balance of £2.95m on completion on 1st May 1987.
As against Selective the claim of the plaintiffs to be entitled in equity to the proceeds of sale of Cyclops Wharf appears on the stated facts to be good. According to Mr. Kay and Mr. Relton, however, Selective is no longer entitled to the proceeds of sale of Cyclops Wharf. It is said that by an oral agreement in March 1986 Mr. Kay became entitled to one half of the Cyclops Wharf transaction and therefore to one half of the profit. On or before 4th September 1986 Mr. Relton became joint owner with Mr. Kay of Boinco, a Panamanian corporation, previously wholly owned by Mr. Kay, and on 17th September 1986 it is said that Selective by a written agreement validly passed and assigned the burden and benefits of the purchase and resale contracts for Cyclops Wharf to Boinco. Further, it is said that, while some companies owned and operated by Mr. Parry and Mr. Relton did carry out many property transactions with money derived from the stolen gold, the Cyclops Wharf transaction was different in that no tainted money was used to acquire the property and therefore the plaintiffs have no equitable claim against the proceeds of sale. If they have such a claim it is contended nevertheless that Mr. Kay and Boinco are bona fide purchasers of the rights under the contracts without notice of the equitable rights of the plaintiffs.
The assignment contract of 17th September 1986, if that is what it was, is an important matter in this case. According to the copy provided to the plaintiffs' loss adjusters, Selective by that contract assigned to Boinco all the interest of Selective in the purchase contract for Cyclops Wharf and in the resale contract, together with the right to receive from Chrysalis the outstanding stage payments. The receipt by Selective of £600,000 from Chrysalis, being the first payment under the resale contract, was recited. The consideration for the assignment to Boinco was said to be £800,000 paid by Boinco to Selective and, by the terms of the contract, Selective acknowledged receipt of that sum. In fact, as has become apparent in the course of the proceedings, nothing was paid by Boinco to Selective. The evidence as to the circumstances in which the assignment contract was made and such explanation as there is for the difference between the form of the contract and the facts as they are alleged to have been will be described later in this judgment.
Alliott J. on 15th April 1987 ordered that the injunction be discharged as against Boinco and Mr. Kay and refused in his discretion to make any new order. He directed, however, that the injunction continue pending the hearing of this appeal. The grounds upon which Alliott J. so proceeded were in substance that there had been innocent but material non-disclosure of facts in the information put by the plaintiffs before Roch J., and that new material put before Alliott J. had falsified the basis upon which the plaintiffs had sought to show a ground of claim against Boinco and Mr. Kay. He declined in his discretion to make any new order on the ground that on the evidence the plaintiffs had not made out a sufficiently strong case.
There had been an earlier application by Boinco and Mr. Kay to set aside the order of Roch J. That application was heard by His Honour Judge White, sitting as a Deputy High Court Judge, and on 30th December 1986 was dismissed by him. During the hearing in this court Mr. Leaver applied on behalf of Boinco and Mr. Kay for leave to appeal against that decision of Judge White out of time on the ground that on the evidence before him he was wrong not to set aside the order of Roch J. by reason of material non-disclosure by the plaintiffs. This court gave leave to appeal. The reasons for granting leave will be stated later in this judgment.
Before dealing with the issues raised by these appeals I must refer further to the facts out of which the plaintiff's claims are said to arise and to the course of the proceedings. It must be made clear at the outset that Mr. Kay is not said to have been concerned in any way with the taking of the gold or with the handling of it or its immediate proceeds.
THE ROBBERY AND THE GOLD
On 26th November 1983 the robbery was carried out at premises at Heathrow Airport. Brinks Mat Ltd., the plaintiffs, were entitled to possession of the gold and have settled claims by the owners. The robbers included Michael McEvov and they were assisted by Anthony Black who was an employee of the plaintiffs. McEvoy and Black and a man called Robinson were all convicted of the robbery in 1984.
The proceeds of the robbery had to be turned into money if those who had planned it and carried it out were to get the profit at which they aimed. By one or more criminal conspiracies some of the stolen gold was processed and sold: four men, including K. J. Noye, were convicted in respect of such activity on 24th July 1986.
Investigations were carried out by the police and later by loss adjusters and accountants acting for the plaintiffs. Information was obtained upon which in these and in other proceedings the plaintiffs claim to recover property in various forms which is alleged to represent the proceeds of sale of the stolen gold. All or some of these investigations were carried out on behalf of insurers and the proceedings are being carried on under rights of subrogation but that fact is not relevant to anything which has to be decided in this appeal.
The plaintiffs say that, when they started these proceedings, their information was not complete but it was thought necessary to apply to the court as a matter of urgency...
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