C. Christo & Company Ltd v Nicholas Christoforou
| Jurisdiction | England & Wales |
| Judge | Auerbach |
| Judgment Date | 12 May 2023 |
| Neutral Citation | [2023] EWHC 1094 (KB) |
| Docket Number | Case No: QB-2020-003598 |
| Court | King's Bench Division |
[2023] EWHC 1094 (KB)
HIS HONOUR JUDGE Auerbach
(sitting as a Judge of the High Court)
Case No: QB-2020-003598
IN THE HIGH COURT OF JUSTICE
KING'S BENCH DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
Victoria Windle KC (instructed by Pinsent Masons LLP) for the Claimant
Dan McCourt Fritz and Andrew Gurr (instructed by Herrington Carmichael LLP) for the Defendants
Hearing dates: 20 and 21 February 2023
Approved Judgment
This judgment was handed down by the Judge remotely on 12 May 2023 by circulation to the parties or their representatives by email and release to The National Archives.
Introduction
The claimant is a limited company which for many years owned and ran a business of estate agents, valuers, surveyors, and property managers, under the style of Christo & Co (“the business”). Part, at least, of the business was sold in August 2020. The claimant's sole shareholder at all material times was and is Christofer Christoforou, known as Chris. The defendants are his sons, known as Nicholas and Alex. Where appropriate, to avoid confusion, I will refer to them by those names.
The claim was issued on 13 October 2020. It is claimed that the defendants have wrongly appropriated and/or used copies of documents containing confidential information held by the claimant, and that there is a real threat that, if not restrained, they will misuse its confidential information in the future. The relief sought includes an injunction and an order for delivery-up of certain devices. Particulars of claim and a defence have been served, and a reply to a part 18 request relating to the defence.
This is my judgment on an application by the defendants, made by a notice of 31 October 2022, for an order striking out the whole claim pursuant to CPR 3.4(2)(b). The application is supported by a statement of Stephen Nicholas Baker, the solicitor with conduct of the defence. This identifies that the specific basis on which it is contended that the claim is an abuse of process is on the grounds that it is:
(1) vexatious, brought for the collateral purpose of harassing the defendants by forcing them to re-litigate stale allegations, and/or Henderson v Henderson abusive; further or alternatively
(2) out of all proportion to any substantial relief which Christo & Co might hope to obtain if successful (i.e. Jameel abusive).
The same application notice seeks, in the alternative, a cost-capping order and, associated with it, an order for security for costs. But pursuant to a case management order made by Master Thornett at a hearing on 24 November 2022, and sealed on 29 November, I have only heard, and am only adjudicating, the strike-out application. As contemplated by the master's order there is a statement from Chris, dated 20 January 2023, in opposition to the strike-out application, and a short reply statement from Mr Baker of 2 February 2023. Chris' statement was filed and served a day late, but at the start of the hearing I extended time by consent, with no order for costs.
It is common ground that in 2014 the marriage of Chris to the mother of Nicholas and Alex, known as Betty, broke down. Divorce proceedings began in October 2014. Around this time, and stating the matter neutrally, relations between Chris, on the one hand, and Nicholas and Alex, on the other, also completely broke down. It is common ground that Nicholas worked for some years for the business, and was a director of the claimant, until a date in December 2014. Alex for some years assisted the business on IT matters, although there is a dispute as to whether he was for all that time an employee, or in later years did so gratuitously. It is common ground that he ceased to work for the business at the end of October 2014.
Since 2014, apart from the divorce proceedings between Betty and Chris, there have been a number of other pieces of litigation involving Chris, Nicholas, Alex, the claimant, and/or one or more other companies associated with one or more of them. I will say something more about two of these pieces of litigation at the outset.
The first was a High Court claim begun by Chris in 2014, to which the defendants were Nicholas and Alex, alleging, among other things, harassment and misuse of private information. Those proceedings were defended and there was a counterclaim. Those are the Harassment Proceedings. Among other matters, they raised issues concerning a lap-top and hard drive, which Nicholas and Alex admitted to having in their possession, but ownership of which was disputed. In 2015 those devices were delivered up to their then solicitors, Mr Baker's former firm Boyes Turner, for safekeeping pending some final determination or agreement about them.
The second piece of litigation has been referred to as the Torriano Proceedings, or the Gracestone Proceedings. It concerned the disputed equitable ownership of a property of which the legal owner was Gracestone – a company controlled by Chris. Alex was the claimant. Chris and Gracestone were the defendants. It ran from August 2018 until it was substantively settled in June 2020 on the basis that Alex was the beneficial owner (although further aspects were not settled until January 2023).
Starting when the strike-out application in the present claim was issued, and in the runup to the hearing before me, the parties traded open offers and counter-offers of settlement. At the start of day one, following a request from the claimant, I adjourned for a short time, to allow for further discussions. However, no agreement was reached and the substantive hearing then proceeded. I was copied in to a further open offer made during the course of the two-day hearing. Issues were raised in argument before me as to the bearing, if any, of these exchanges, on this application.
More about all of these matters later.
The Law
It is convenient at this stage to set out an overview of the essential relevant legal principles. I will return to some of the more specific points of legal argument later on.
CPR 3.4(2)(b) gives the court the power to strike out a statement of case, which therefore includes part or all of a claim, if it appears that it is an abuse of the court's process. The power is permissive, not mandatory. It may be exercised if there is an abuse, but the court must decide whether to do so, having regard to the overriding objective, and the fundamental nature of the sanction. In particular the court should consider proportionality, and whether the abuse can be sufficiently addressed by some lesser sanction in the given case. See, for example, the discussion in Walsham Chalet Park Ltd v Tallington Lakes Limited [2014] EWCA Civ 1607 at [44].
Abuse can take a number of distinct forms, which are given different legal names, though some interact or overlap. As Lord Sumption put it in Virgin Atlantic Airways Limited v Zodiac Seat UK Limited [2013] UKSC 46; [2014] AC 160, at [17]: “… the label tends to distract attention from the contents of the bottle.”
In Henderson v Henderson (1843) 3 Hare 100, 115 Wigram VC said:
“… where a given matter becomes the subject of litigation in, and of adjudication by, a Court of competent jurisdiction, the Court requires the parties to that litigation to bring forward their whole case, and will not (except under special circumstances) permit the same parties to open the same subject of litigation in respect of matter which might have been brought forward as part of the subject in contest, but which was not brought forward, only because they have, from negligence, inadvertence, or even accident, omitted part of their case. The plea of res judicata applies, except in special cases, not only to points upon which the Court was actually required by the parties to form an opinion and pronounce a judgment, but to every point which properly belonged to the subject of litigation, and which the parties, exercising reasonable diligence, might have brought forward at the time…”
The modern exposition of this form of abuse is to be found in the following passage in the speech of Lord Bingham of Cornhill in Johnson v Gore-Wood & Co [2000] UKHL 65; [2002] 2 AC 1.
“But Henderson v. Henderson abuse of process, as now understood, although separate and distinct from cause of action estoppel and issue estoppel, has much in common with them. The underlying public interest is the same: that there should be finality in litigation and that a party should not be twice vexed in the same matter. This public interest is reinforced by the current emphasis on efficiency and economy in the conduct of litigation, in the interests of the parties and the public as a whole. The bringing of a claim or the raising of a defence in later proceedings may, without more, amount to abuse if the court is satisfied (the onus being on the party alleging abuse) that the claim or defence should have been raised in the earlier proceedings if it was to be raised at all. I would not accept that it is necessary, before abuse may be found, to identify any additional element such as a collateral attack on a previous decision or some dishonesty, but where those elements are present the later proceedings will be much more obviously abusive, and there will rarely be a finding of abuse unless the later proceeding involves what the court regards as unjust harassment of a party. It is, however, wrong to hold that because a matter could have been raised in early proceedings it should have been, so as to render the raising of it in later proceedings necessarily abusive. That is to adopt too dogmatic an approach to what should in my opinion be a broad, merits-based judgment which takes account of the public and private interests involved and also takes...
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