Das Holdings AG v Aline Sternberg and Ors

THE JUDGE: This is an application by the first and second defendants for an order, in the terms of the draft attached to the application notice, striking out the claimant's claim on the basis that it is either, (a) an abuse of process, and/or (b) is a cause of action which is not realistically arguable on the facts as they are alleged to be.

The claim is by DAS Holdings AG, which, as I held in a judgment given earlier today, is an annulled Marshall Islands company, which claims, in these proceedings, declarations that the defendants are liable to DAS for dishonest non-disclosure, pursuant, or so it is alleged, to the Fraud Act 2006, and/or perhaps also in the tort of deceit.

I should say that, at a very late stage in this process, documents were filed by or on behalf of DAS, being a set of legal submissions headed, “ Written submissions of DAS Holdings AG for the hearing of the opposition application for a strikeout or summary judgment to be heard on 8/9 March 2023 …” and a witness statement purportedly sworn by Mr Nelson Day, who gives as his address the claimed address of DAS in Ajeltake Road, Ajeltake Island, Majuro, The Republic of the Marshall Islands. He does not exhibit any passport or other evidence of identity to this witness statement, although I should say that Mr Day says at paragraph 1 of that witness statement that he is, “ a natural person, who in all the circumstances identifies by the name stated herein above.”

The underlying claim with which these proceedings are concerned arises out of what are allegedly dishonest non-disclosures, or positive misrepresentations, alleged to have been set out in a listing prospectus in relation to notes issued by the second defendant, which is an SPV issuer in respect of securitisation transactions.

The first defendant, Ms Sternberg, is a director of the second defendant. It was pointed out in the course of submissions, and I accept, that this is the fifth time Ms Sternberg has been sued by what are said to be entities under the ultimate control of Mr Rizwan Hussain. One of the points made in relation to the deceit claim is that there is no money claim advanced in the particulars of claim filed in these proceedings.

The first basis upon which it is alleged that these proceedings are an abuse of process concerns the similarities between this claim and other actions concerning the same subject matter that have been struck out in the period since mid-2022, when claims orchestrated ultimately by Mr Rizwan Hussain first started appearing, issued in this court.

It is this which leads the defendants to submit that the claim is in truth nothing more than the next in a series of claims orchestrated by Mr Hussain, which collectively and individually attempt unlawfully to interfere in the securitisation schemes operated by the various entities with which this litigation has been concerned.

In essence, on this first head on which the strikeout application is advanced, it is said the claim should be struck out as an abuse because it is the fifth claim in a series, where the first was struck out by me in August 2022; the second was struck out by Miles J on 12 January 2023; the administration application was dismissed by an Insolvency and Companies Court Judge on 31 August 2022; and two other claims, referred to expressly and by implication in these proceedings, were struck out today on the basis that they were an abuse of process and/or were not realistically arguable, and were totally without merit.

Taking the points that are relied upon one at a time, the first point which is made is that, this being a tortious money claim, is one which cannot succeed in the absence of an allegation of damage allegedly caused by the tortious acts and omissions complained of. In my judgment, so far as that is concerned, had that been the only point, it might have been difficult to come to the conclusion that the claim can be struck out, since I concede that it is at any rate theoretically possible to claim a declaration of even fraudulent tortious activity, providing at least that loss has been proved even though damages compensating for such are not sought or claimed. However, that is not the end of the matter; it is merely the beginning, and I can safely leave that point to one side, because the other points are much more compelling.

First, it is said that the claim, to the extent it relies on the Fraud Act, is not a claim which can be permitted to continue, because the Fraud Act is concerned, at any rate substantively, with criminal not civil liability, in respect of which this court by definition has no jurisdiction.

The second point which is relied upon is that the claim is in any event abusive by reason of its connection with Mr Rizwan Hussain.

So far as the latter mentioned allegation is concerned, I can take that relatively quickly, and I can do so by reference to the elements of commonality which have been identified by the defendant's skeleton argument. First, these facts and matters, when taken together, lead inexorably to the conclusion that this is yet another in a long line of claims brought to vex, on this occasion, the defendants of these proceedings, but all in relation to the Stratton/Clavis business dealings referred to in so many of the earlier judgments. What are the points of commonality? First, the claimant is a Marshall Islands company that has been annulled. This appears to be now at least common ground – see the footnote to the skeleton submissions – supplied late, supposedly by Mr Day. This is exactly the same as all the corporate vehicles that have been used by Mr Hussain to bring claims that fall within what I have called elsewhere “the cycle of litigation” that culminates with the applications I am hearing today. Thus, the various entities that are featured include Corelli, by way of example, which is subject to a general civil restraint order by me, used in the Business Mortgage Finance 4 Limited v Hussain[2021] EWHC 171 (Ch) litigation, in which a finding of contempt was made against Mr Hussain, and a sentence of two years' imprisonment was imposed upon him, a sanction upheld on appeal by the Court of Appeal. All...