David Tyler Moss v Brian Martin
| Jurisdiction | England & Wales |
| Judge | Russen |
| Judgment Date | 22 December 2022 |
| Neutral Citation | [2022] EWHC 3258 (Comm) |
| Docket Number | Case No: LM-2022-000197 |
| Court | Queen's Bench Division (Commercial Court) |
[2022] EWHC 3258 (Comm)
HHJ Russen KC
Case No: LM-2022-000197
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
LONDON CIRCUIT COMMERCIAL COURT (KBD)
Royal Courts of Justice
Rolls Building
Fetter Lane
London EC4A 1NL
Roger Laville (instructed by Kelly Owen Ltd) for the Claimants
James McWilliams (instructed by Birketts LLP) for the Defendants
Hearing date: 12 December 2022
Approved Judgment
This judgment (a draft of which was circulated to the parties' legal representatives on 17 th December 2022) was handed down remotely at 10.00am on 22 nd December 2022 by circulation to the parties' legal representatives by e-mail and by its release to The National Archives
HHJ Russen KC
HHJ Russen KC:
Introduction
This is my judgment on those matters on which I reserved judgment following the hearing on 12 December 2022. The matters which came to be argued at that hearing are identified towards the end of this Introduction. I am grateful to Mr Laville and Mr McWilliams for their clear and helpful submissions on the points for my decision made both at the hearing and (as I explain below) subsequently.
The claimants commenced these proceedings on 14 April 2022 seeking the enforcement of two judgments obtained in each case by two of them against either or both defendants (and in each case one other person) in proceedings in the United States. The defendants are husband and wife.
The first of the foreign judgments (“ the 2016 Judgment”) was entered in favour of the First and Second Claimants (“ Mr Moss” and “ Mr Keating”) by the District Court for the Northern District of Texas on 15 April 2016. Under the terms of the 2016 Judgment the First Defendant (“ Mr Martin”) and a Mr Marko Princip are jointly and severally liable to pay each of Mr Moss and Mr Keating the sum of US$2,100,000 in compensatory damages. The 2016 Judgment, which followed a jury trial, also included an order for payment of exemplary damages of US 4,200,000 to each of Mr Moss and Mr Keating but that element of the judgment forms no part of the present enforcement proceedings.
The second of the foreign judgments (“ the 2022 Judgment”) was entered in separate US proceedings brought by Mr Moss and, as assignee of Mr Keating's rights under the 2016 Judgment, by the Third Defendant (“ Fidelissimus”) in the District Court of the 68 th Judicial District of Dallas County, Texas. The 2022 Judgment ordered Mr Martin and Ms Bone each to pay Mr Moss and Fidelissimus compensatory damages. In addition, the 2022 Judgment included orders for the payment of exemplary damages to each of them (approximately US$9.1m in the case of Mr Martin and US$2.8m in the case of Ms Bone) but, again, those parts of the 2022 Judgment are irrelevant to the present proceedings.
Mr Martin and Mr Princip appealed the 2016 Judgment to the United States Court of Appeals for the 5th Circuit on jurisdictional grounds. That appeal was dismissed on 7 February 2019. Mr Keating assigned his rights under the 2016 Judgment to Fidelissimus on 20 November 2019. Mr Martin and Ms Bone have appealed the 2022 Judgment pursuant to a Notice of Appeal filed at the Dallas County Court in Texas on 9 May 2022. That appeal has not yet been determined.
The Particulars of Claim in these proceedings quantified the relevant judgment liability of Mr Martin and Ms Bone to each of Mr Moss and Fidelissimus, including interest, at US$6,665,244 (or £5,098,111) and US$2,809,926 (or £2,149,256) respectively.
The background to the entry of the 2016 Judgment and the 2022 Judgment, with a summary of the claimants' respective causes of action in the US proceedings, is set out in the Judgment of Mr Philip Marshall KC, dated 4 November 2022, to which I turn in paragraph 12 below.
On 6 May 2022, the claimants obtained a without notice freezing injunction in this jurisdiction against the defendants. The injunction was granted by Mr Justice Andrew Baker and subsequently varied (on paper) by the judge on 12 May 2022, and on 20 May 2022 it was continued by Mr Justice Butcher to today's date (“ the Freezing Order”). The Order of Butcher J dated 20 May 2022 contained an exception for the defendants between them to spend a reasonable sum up to £175,000 on legal costs. Further orders made by consent on 26 August 2022 and 18 October 2022 increased the cap upon the expenditure on legal costs that might reasonably be made to £200,000 and then £230,000.
In addition to the Freezing Order, on 20 May 2022 Butcher J also made a further Order (“ the Directions Order”) containing directions which reflected the defendants' intention to seek the discharge of the Freezing Order and/or to oppose its continuation. This was also something contemplated by the Order dated 4 November 2022 mentioned in paragraph 14 below.
The Directions Order also addressed an application for summary judgment on the claim which the claimants had issued the day before. It gave retrospective permission to issue it even though the defendants had not yet filed an Acknowledgment of Service and the time for them to do so had not yet expired.
The claimants' summary judgment application came before HHJ Pelling KC on 15 July 2022 but was adjourned for further hearing in circumstances where the court considered the time allotted to it was insufficient. It was adjourned with a time estimate of 2 days. The application was heard before Mr Philip Marshall KC, sitting as a Deputy High Court Judge, who heard it during the morning of 26 October 2022. The deputy judge reserved judgment on the application.
By his judgment dated 4 November 2022 (“ the English Judgment”) Mr Marshall KC granted summary judgment in favour of the claimants. For the reasons comprehensively given in the English Judgment the deputy judge concluded that Mr Martin had no defence carrying a real prospect of success to the enforcement of the 2016 Judgment or the 2022 Judgment and that Ms Bone had no such defence to the enforcement of the 2022 Judgment. At the conclusion of the English Judgment the judge noted that he had not seen any application for a stay but said that he would hear submissions on any stay application alongside other consequential matters.
The English Judgment recognised that the 2022 Judgment was under appeal but noted, as was common ground between the parties, that it did not follow that the judgment was not “final and conclusive” for the purpose of being enforced in England and Wales by way of action at common law.
The Order of Mr Marshall KC dated 4 November 2022 (“ the November Order”) provided for Mr Martin and Ms Bone to pay the sums respectively due from each of them to each of Mr Moss and Fidelissimus under the 2016 Judgment and/or the 2022 Judgment with interest calculated from the respective dates of those judgments.
The hearing before me on 12 December 2022 had been listed as the “Adjourned Return Date” which the Directions Order identified as the hearing at which the claimants' entitlement to the Freezing Order would be reviewed. The November Order also recited that this was the purpose of the hearing on 12 December. The costs reserved by the Orders dated 6 May, 12 May and 20 May 2022 were also to be addressed at the hearing.
In the event, there was no contest at the hearing over the claimants' entitlement to continuing injunctive relief. Mr McWilliams for the defendants explained that the decision not to pursue their application to discharge the Freezing Order had not been prompted by any change in their views as to the claimants' conduct in obtaining it. Rather, it was based upon them recognising that, after the grant of summary judgment on the claim, the court would be less likely to countenance the discharge of the Freezing Order. In addition, the continuation of the Freezing Injunction was a factor which, Mr McWilliams submitted, went in his clients' favour when it came to the exercise of the court's discretion to grant or a refuse a stay of execution on the application mentioned next.
The hearing before me instead concerned two principal matters:
i) the defendants' Application Notice dated 14 November 2022 seeking a stay of the November Order (“ the Stay Application”); and
ii) the defendants' Application Notice dated 5 December 2022 seeking an increase from £230,000 to £260,000 for the capped sum that they are permitted under the Freezing Order for reasonable expenditure on legal costs (“ the Legal Expenses Application”).
The defendants' non-opposition to the continuation of the Freezing Order (save in relation to its current cap on permitting expenditure on legal expenses) did not mean that consideration of its terms was otherwise unnecessary. That is because Mr McWilliams raised a number of other points about the effect of the Freezing Order going forward.
The first was that the defendants said that any order continuing the injunction should contain an express liberty for the defendants to apply for its discharge or variation in the event of their appeal in the United States against the 2022 Judgment being successful. The second was that they should also benefit from an express liberty to apply in respect of the ordinary living expenses and the reasonable legal costs (beyond the £260,000 cap sought on the Legal Expenses Application) permitted under the Freezing Order. Mr McWilliams was concerned that, without these express provisions, the defendants might be met with the argument that there had been no change of circumstances to justify the court re-visiting the terms of the Freezing Order as continued by me. My instinctive reaction to that was to say that the defendants' success on the appeal in the United States or them reasonably incurring further legal...
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