Compagnie Des Grands Hôtels D'Afrique S.A. v Sarah Purdy
| Jurisdiction | England & Wales |
| Judge | Mr Justice Freedman |
| Judgment Date | 23 April 2021 |
| Neutral Citation | [2021] EWHC 1031 (QB) |
| Date | 23 April 2021 |
| Docket Number | Case No: QA-2020-000237/QA-2020-000235 |
| Court | Queen's Bench Division |
[2021] EWHC 1031 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ON APPEAL FROM THE SENIOR MASTER
IN THE MATTER OF THE EVIDENCE
(PROCEEDINGS IN OTHER JURISDICTIONS) ACT 1975
AND IN THE MATTER OF THE HAGUE CONVENTION OF 18 MARCH 1970 ON THE TAKING OF EVIDENCE ABROAD IN CIVIL OR COMMERCIAL MATTERS
AND IN THE MATTER OF RULES 34.17 TO 34.21 OF THE CIVIL PROCEDURE RULES 1998
AND IN THE MATTER OF PROCEEDINGS NOW PENDING BEFORE THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Justice Freedman
Case No: QA-2020-000237/QA-2020-000235
David Edwards QC and Julia Gibbon (instructed by Humphries Kerstetter) for the Respondent / Appellant and Cross-Appellant / Applicant
Michael Todd QC and Jack Rivett (instructed by Michelmores LLP) for the Appellant and Respondent to Cross Appeal / Respondent
Hearing date: 17 March 2021
Approved Judgment
I Contents
| CHAPTER NUMBER | SUBJECT | PARAGRAPH NUMBER |
| I | Contents | |
| II | Introduction | 1–8 |
| III | Factual background | 9 – 23 |
| IV | The Delaware proceedings | 24 – 32 |
| V | The applications to the Senior Master | 33 – 43 |
| VI | The appeal of Ms Purdy: Grounds of Appeal | 44 – 46 |
| VII | The appeal of Ms Purdy: the legislative background and the relevant legal principles | 47 – 58 |
| VIII | The appeal of the Ms Purdy: the approach to discretion | 59 – 60 |
| IX | The appeal of Ms Purdy: Ms Purdy's submissions | 61 – 71 |
| X | The appeal of Ms Purdy: Submissions on behalf of CGHA | 72 – 77 |
| XI | The appeal of Ms Purdy: Discussion and disposal | 78 – 88 |
| XII | The cross appeal of CGHA: Introduction | 89 – 89 |
| XIII | The cross appeal of CGHA: the Senior Master's decision | 91 – 97 |
| XIV | The cross appeal of CGHA: approach to costs appeal | 98 – 101 |
| XV | The cross appeal of CGHA: the submissions of CGHA | 102 – 109 |
| XVI | The cross appeal of CGHA: The submissions of Ms Purdy | 110 – 112 |
| XVII | The cross appeal of CGHA: discussion and disposal | 113 – 128 |
| XVIII | Conclusion | 129 |
II Introduction
This is an appeal against an order of Senior Master Fontaine in connection with an order made against the Appellant (“Ms Purdy”) under section 2 of the Evidence (Proceedings in Other Jurisdictions) Act 1975 (the “1975 Act”) and CPR, rr. 34.17 to 34.21 (the “Deposition Order”). The Deposition Order was made by the Senior Master on 13 September 2019 on the without notice application of the Respondent (“CGHA”). It was made pursuant to a Letter of Request issued by the United States District Court for the District of Delaware in connection with proceedings currently pending before that court (the “Delaware Proceedings”) between CGHA and a U.S. corporation, Starman Hotel Holdings LLC (“Starman”), which were commenced by CGHA on 30 April 2018.
The Deposition Order requires Ms Purdy to attend an examination to give evidence on the topics set out in Attachment A to the letter of request for use in the Delaware Proceedings. The matters on which Ms Purdy is required to give evidence are also the subject of a criminal complaint which was filed by CGHA (through its Moroccan lawyers) with the Public Prosecutor of the Casablanca Criminal Court (the “Moroccan Criminal Complaint”) on 7 March 2018. There was also an order on 13 September 2019 for disclosure (the “Disclosure Order”) against a related entity, Maquay Investments Limited (“Maquay”), pursuant to a Letter of Request issued in connection with the Delaware proceedings.
By her application dated 10 January 2020, Ms Purdy applied to set aside the Deposition Order on two grounds, namely:
(1) Non-disclosure: on its without notice application for the Deposition Order, CGHA failed to disclose the existence of:
i. the Moroccan Criminal Complaint and the criminal investigation being carried out by the Moroccan authorities pursuant to that Complaint (“the Moroccan Criminal Investigation”); and
ii. a protective order dated 23 April 2019 issued by the Delaware court concerning the use of information disclosed by parties and non-parties in the Delaware Proceedings (“the Protective Order”); and
(2) Oppression: by reason of the Moroccan Criminal Complaint and the Moroccan Criminal Investigation it would be oppressive for Ms Purdy to be examined and no sufficient protections removing or minimising such oppression had been offered and put in place.
Ms Purdy's application was heard together with an application by Maquay to set aside the Disclosure Order on the same grounds. The Senior Master held in summary:
(1) The material non-disclosure by CGHA on its without notice applications for the orders under section 2 of the 1975 Act was serious (see J/[82]);
(2) The correct sanction for that non-disclosure would be an appropriate costs order (see J/[82]).
(3) The Deposition and Disclosure Orders should not be set aside, but should be varied to include the additional protections offered by CGHA set out in two draft orders sent by CGHA's solicitors, Humphries Kerstetter, on 6 th January 2020 (see J/[126] and J/[133]).
In arriving at that conclusion, the Senior Master held that not every risk of oppression had to be averted: it was sufficient on the facts of this case that the risk of oppression did not have to be avoided provided that it could be alleviated to a sensible and acceptable degree (see J/[132]). The judgment of the Senior Master has a neutral citation number [2020] EWHC 2785 (QB)
There is no appeal about the failure to set aside the order for non-disclosure, nor is there an appeal by Maquay who has given the disclosure ordered. However, the appeal is that the Senior Master erred in principle and/or gave insufficient weight to oppression caused by Ms Purdy being compelled to give evidence which might be used against her by the Moroccan prosecuting authorities for the purposes of their investigation and deployed in evidence against her at a criminal trial. It is therefore said that the Senior Master reached the wrong decision, and that the Deposition Order should be set aside.
There is a cross appeal about costs by CGHA. It is made against Ms Purdy and Maquay (collectively referred to as “the Purdy parties”). The overall costs order of the Senior Master in respect of the application to set aside the Deposition Order and the Disclosure Order was that CGHA pay 75% of the Purdy parties' costs of the two issues on the standard basis. CGHA says that it ought not to have been held liable to pay any part of the Purdy parties' costs, and further as the successful party, the order ought to have been that at least some part of their costs ought to have been ordered to be paid by the Purdy parties to CGHA.
The Senior Master granted permission to Ms Purdy to appeal against the Deposition Order. No order for permission has been made in respect of the costs appeal. The Court indicated that it would not treat the question of permission as a preliminary matter, but instead decided to deal with the questions of permission and, if granted, the appeal at once.
II Factual Background
The following summary of the factual background is derived from the judgment of the Senior Master which in turn was derived from evidence before the court and the agreed chronology.
CGHA is a company incorporated in Morocco. It is the owner of a luxury hotel in Casablanca called the Royal Mansour Hotel (“the Hotel”): see J/[77–78].
On 23 November 1989 CGHA entered into a long-term Management Agreement (“the Management Agreement”) in respect of the Hotel with Trust House Forte Morocco Sarl (“the Manager”), whose obligations were guaranteed by Trust House Forte (UK) Limited (“the Guarantor”). The Manager and Guarantor were both companies within the Trust House Forte hotel group: see J/[77–78].
The obligations of the Manager under the Management Agreement included, inter alia, obligations to:
(1) pay a minimum Annual Fee to CGHA in quarterly instalments; and
(2) maintain and operate the Hotel to the standard and stature of a five-star international hotel: see J/[77–78].
The Management Agreement was governed by Moroccan law. Disputes between the parties were required to be determined by International Chamber of Commerce (“ICC”) arbitration in London.
As a result of a number of corporate acquisitions and restructurings, by 2006 the ownership of the Manager and the Guarantor had been transferred to two unrelated entities. The Manager was owned by Starman, a company formed as a joint venture entity by Starwood Capital Group Global LLC (“Starwood”) and Lehman Brothers in 2006 to acquire certain assets. The Guarantor was owned by an entity unrelated to Starman or its joint venture owners.
The Manager was re-named Woodman Maroc Sarl (“Woodman”): see J/[77–8]. Starman owned Woodman indirectly through a Netherlands entity and a Luxembourg entity.
On 6 August 2013 CGHA commenced arbitration proceedings against Woodman and the Guarantor before the ICC in London (“the Arbitration”) seeking, inter alia, payment of outstanding instalments of the Annual Fee and damages for breach of the obligation to maintain and operate the Hotel to an international five-star standard: see J/[78]. On 16 July 2014 the Arbitral Tribunal issued procedural directions. The...
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