Dexter Ltd v Vlieland-Boddy
| Jurisdiction | England & Wales |
| Judge | Mr.R.Kaye QC.:,Mr Justice Lloyd |
| Judgment Date | 24 October 2003 |
| Neutral Citation | [2003] EWHC 2592 (Ch),[2002] EWHC 1561 (Ch) |
| Date | 24 October 2003 |
| Docket Number | Case No: HC02CO0356 |
| Court | Chancery Division |
[2002] EWHC 1561 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
The Honourable Mr Justice Lloyd
Case No: HC02CO0356
John C. Taylor (instructed by Lester Aldridge for the First Defendant)
Linden Ife (instructed by Lester Aldridge for the Fourth Defendant)
Andrew Sutcliffe Q.C. (instructed by DLA for the Claimant)
Hearing date: 11 June 2002
JUDGMENT: APPROVED BY THE COURT FOR
HANDING DOWN (SUBJECT TO EDITORIAL
CORRECTIONS)
Mr Justice Lloyd
This claim is the third brought by the Claimant concerned with allegations arising from the same events. The first was brought against Martin Vlieland-Boddy. It came to a contested trial in November and December 2000, but the Defendant left the jurisdiction while he was being cross-examined, and judgment was given against him in default. No recovery has been made under that judgment. The second was brought against the Fourth Defendant alone. That claim was struck out as having been brought in the wrong jurisdiction, she being a resident of Spain. There was an appeal, but it was eventually abandoned. In the meantime, this claim was brought against the five Defendants named. The First and Fourth Defendants have applied to strike the proceedings out as against them on the grounds that it is an abuse of the process of the court to have brought it. The Fourth Defendant has an additional point, but essentially the point taken by both is that, if the Claimant was to sue them, it should have done so by joining them as Defendants to the first claim.
The Claimant was incorporated on 20 May 1997. The Fifth Defendant was then its sole director, with Martin Vlieland-Boddy as its company secretary. He was appointed as a director formally on 30 September 1997. The First Defendant is his twin brother. The Fourth Defendant is their mother. The First Defendant arid the Second Defendant are, or were at the material times, partners in a firm which was once known as Marshalls, but is now known as Fortune Peat, the Third Defendant. Martin Vlieland-Boddy was a consultant to Marshalls.
The facts alleged by the Claimant which give rise to the successive claims, in essence, are as follows. (Many of them are disputed by the Defendants, who deny liability, but what matters at present is what is alleged.) In late September 1997 the Co-operative Bank agreed to provide the Claimant with a £5 million facility. On 2 October the Bank agreed to £2 million being drawn down against copy invoices for the purchase of an aircraft engine. It was provided with a faxed invoice from Guest Aviation Corporation to the Claimant relating to a Concorde engine and components for £2 million plus VAT, the payment to be made to a UK account. This was pursuant to an agreement dated 1 October between Guest, acting by Cliven Airways and Cliven Airparts, as seller and the Claimant as buyer. It is alleged in the claim that the signature on behalf of Guest was forged by the First Defendant or by an employee of the Third Defendant. There is or may be also a separate agreement dated 2 October for the sale of the same subject matter by the Fifth Defendant to Guest for £1.95 million. It is alleged that the purported engine was not in fact an engine at all and was worthless, and that the components were also worthless.
The Bank released £2 million to the Claimant on 3 October. This was paid into an account (in the name of Marshalls) at National Westminster Bank, Blandford Forum. On the instructions of the Second Defendant the payment was made to account number 77161696 instead of account number 77161815. Thence the money was paid out as follows.
i) £864,104 was paid on 6 October to an account of a third party in Jersey, apparently in repayment of a personal liability of the Fifth Defendant.
ii) £60,000 was paid in cash on 9 October to one or other of Martin Vlieland-Boddy and the First Defendant.
iii) £261,226 was paid on 6 October to an account of Marshalls, number 77133145, described as a client account re the Fifth Defendant.
iv) £350,000 was paid on 6 October to an account of the First Defendant at Barclays, 80909807, of which £250,000 was paid on to Martin Vlieland- Boddy and £100,000 to HM Customs and Excise.
v) £464,250 was paid on 3 October to a client account of a firm called Martin Vlieland-Boddy & Co, account 77145062. This sum was further distributed as follows:
a) £150,000 was paid to Martin Vlieland-Boddy.
b) £314,250 was paid on 6 October to an account of the Portman Building Society's Channel Islands subsidiary at Lloyds Bank in the Channel Islands, initially to be held on behalf of one Michael Hughes, the father-in-law of Martin Vlieland-Boddy. On 8 October it was placed on a 12 month deposit, still in the name of Mr Hughes.
c) On 8 October 1998 the then balance of £315,422.88 was transferred to another Portman account at Lloyds, 19010002798, in the name of the Fourth Defendant.
d) Withdrawals between then and 12 July 1999 reduced the balance to £291,870.55. On 12 July this was transferred to another Portman account in the name of Martin Vlieland-Boddy, 16010022110. On 23 August 1999 this was transferred on to another account in the name of the Fourth Defendant.
The Claimant's case is that the transaction concerning the engine was a fraud on the Claimant and on the Bank, designed to extract £2 million which could then be used for the benefit of the Fifth Defendant, the Vlieland-Boddy brothers, and others, but not at all for the Claimant itself.
In the first claim, against Martin Vlieland-Boddy, the Claimant alleged most of the facts set out above. It did not allege the forgery of the signature on behalf of Guest, nor did it allege the full details of the fate of the money, especially the ultimat fate of the £464,250. But it alleged that Martin Vlieland-Boddy, the First Defendant and the Fifth Defendant misappropriated £2 million of the company's money, it alleged breach of fiduciary duty on the part of Martin Vlieland-Boddy and the Fifth Defendant, and it alleged a conspiracy between the three of them. Martin Vlieland-Boddy was sought to be made liable as a constructive trustee in respect of the whole £2 million, or the sums of £464,250 and £250,000 mentioned above which he received.
The First Defendant's case on this application is based on the proposition that the Claimant could already have brought proceedings against the present First Defendant as well as against his brother. To make this good, he points to the similarity between the allegations in the respective statements of case. Undoubtedly the allegations are similar, though the new claim has some more detail. Breach of fiduciary duty is alleged against Martin Vlieland-Boddy and the Fifth Defendant. Dishonest assistance by the First Defendant in the fraudulent scheme is alleged. There is more by way of particulars of this, including of knowledge, than was in the previous claim. He is alleged to be a constructive trustee both on this basis and also in respect of his receipt of the £60,000 and of the £350,000. A case is also made out against the Fourth Defendant which was not in the first claim. In turn a claim is made against the Fifth Defendant as constructive trustee. Conspiracy is alleged against the Vlieland-Boddy brothers and the Fifth Defendant (and the Fourth Defendant as well). An additional claim is also made against the Second and Third Defendants, on the basis that the First Defendant was acting in the course of his business as a partner in the firm in doing the relevant things, so that the Second Defendant is vicariously liable as his partner.
The previous claim against the Fourth Defendant was similar, though limited to £315,422.88.
The Fifth Defendant is the subject of an individual voluntary arrangement, approved at a creditors' meeting on 27 July 1998. The Bank is a party to the i.v.a. as creditor, but the Claimant is not.
The Claimant went into administrative receivership on 23 April 1998. The first claim was commenced in August 1999. Shortly after that, on 7 September 1999, Mr Shierson, one of the joint administrative receivers, had a meeting with the First Defendant, attended also by the solicitor acting for Martin Vlieland-Boddy in the first claim. The First Defendant was asked questions about his role in the whole transaction. He was told that proceedings would be issued against the First Defendant within a short time. There had been no attempt to contact him before the issue of the proceedings, nor was there further contact thereafter. No proceedings were in fact issued against the First Defendant until the current claim but, apparently, it was said in the course of the first claim that such proceedings would be issued. The First Defendant made a witness statement which was served in the first claim, but he was not called to give evidence on behalf of his brother, because the latter abandoned his defence during the trial.
Judgment was given against Martin Vlieland-Boddy on 11 December 2000. On the same day an application was made to the trial judge for an injunction without notice against the Fourth Defendant, information having, it was said, come to hand only recently showing dispositions of some of the money which was then said to have been paid to the Fourth Defendant in circumstances in which she was alleged to be accountable for those sums. The claim against her was issued immediately afterwards. The allegations made were similar to those made in the first claim, though with special reference to the money which found its way to accounts in her name.
So far as the second claim is concerned, on 8 March 2001 I ordered that the claim form and...
To continue reading
Request your trial
- Dexter Ltd v Vlieland-Boddy
-
Narandas-Girdhar and Anr v Bradstock
...the failure to obtain an interim order meant that the meeting actually summoned had not been summoned under s.257 at all. 42 Vlieland Boddy v Dexter Ltd [2003] EWHC 2592 (Ch) was another case where the creditors' meeting took place before there was an interim order or a direction to summ......
-
Otkritie Capital International Ltd and Another v Threadneedle Asset Management Ltd and Another
...take things very far in the present case, which involves more. Lloyd J (as he then was) sitting at first instance in Dexter showed ( [2002] EWHC Ch 1561 at [18]) that there are circumstances it which "it could have been rational" to hold back from suing someone liable only on a secondary b......
-
Bank of Ireland Mortgage Bank v Sheridan (Brenda Mary) and Sheridan (Patrick Andrew Eoin)
...departure invalid. In England and Wales the procedure is different but this principle applies equally. Vlieland Boddy v Dexter 7 Ltd [2003] EWHC 2592 Ch is authority for the proposition that non-compliance with the statute renders a purported IVA a nullity and there is no general equity to ......