Dmitry Lazarichev v Tsimafei Lyndou
| Jurisdiction | England & Wales |
| Judge | Keyser |
| Judgment Date | 09 January 2024 |
| Neutral Citation | [2024] EWHC 8 (Ch) |
| Court | Chancery Division |
| Docket Number | Case No: CH-2023-000170 |
[2024] EWHC 8 (Ch)
HIS HONOUR JUDGE Keyser KC
sitting as a Judge of the High Court
Case No: CH-2023-000170
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
CHANCERY APPEALS (ChD)
On appeal from the Orders of Master Pester dated 16 June 2023 and 18 July 2023
Business and Property Courts of England and Wales
Business List (ChD)
Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL
Ian Mill KC and Tom Cleaver (instructed by Morrison Foerster LLP) for the Appellants
Max Mallin KC and Lee Jia Wei (instructed by Harcus Parker Limited) for the Respondent
Hearing date: 23 November 2023
Approved Judgment
This judgment was handed down remotely at 10.30am on 9 January 2024 by circulation to the parties or their representatives by e-mail and by release to the National Archives.
HIS HONOUR JUDGE Keyser KC
Judge Keyser KC:
Introduction
By an order dated 16 June 2023 Master Pester dismissed the defendants' application dated 28 April 2022 for security for costs from the claimant. By a further order dated 18 July 2023 he ordered the defendants to pay the claimant's costs of the application but gave them permission to appeal against the order dated 16 June 2023 and the order for costs. This is my judgment on the appeal.
In brief summary, the relevant background is as follows. The proceedings were commenced by the issue of a claim form on 28 May 2021. The claimant 1, a Belarusian national, alleges that, having conceived a business idea, he shared it in confidence with the defendants and entered into a joint venture or partnership with them with a view to developing a business based on the idea, and that the defendants later excluded him from the business. He advances various grounds of claim, including breach of confidence and unlawful means conspiracy, and seeks a declaration that shares in the business are held on trust for him. The allegations and claims are disputed by the defendants. Although the proceedings were commenced some two and a half years ago, a costs and case management conference took place only in October 2023. The parties agree that the likely length of the trial will be about ten days. The defendants estimate that their legal costs of the proceedings will exceed £2,000,000. On the claim form as originally issued, the claimant gave as his address an address in Belarus. By letter dated 28 March 2022 the solicitors then acting for the defendants gave notice of their intention to apply for an order that he give security for costs. By their response dated 11 April 2022 the claimant's solicitors stated that the claimant intended to emigrate to Poland on account of the political climate in Belarus. Nevertheless, the defendants made their application for security for costs on 28 April 2022. On 4 July 2022 the claimant amended the claim form to show as his address an address in Poland. (He subsequently sought further to amend the claim form to show his address as from October 2022 as a different address in Poland. Permission for that amendment was given by Master Pester in the order dated 18 July 2023.) The defendants did not accept that the claimant's move to Poland was either genuine or lawful and they filed evidence in support of their position. After a protracted process of the exchange of evidence, the application for security for costs came on for hearing before Master Pester on 22 March 2023.
The application for security for costs was advanced on the basis of the following provisions of CPR r. 25.13:
“(1) The court may make an order for security for costs under rule 25.12 if –
(a) it is satisfied, having regard to all the circumstances of the case, that it is just to make such an order; and
(b) (i) one or more of the conditions in paragraph (2) applies, or …
(2) The conditions are –
(a) the claimant is – (i) resident out of the jurisdiction; but (ii) not resident in a State bound by the 2005 Hague Convention, as defined in section 1(3) of the Civil Jurisdiction and Judgments Act 1982;
…
(e) the claimant failed to give his address in the claim form, or gave an incorrect address in that form; …”
As to the condition in r. 25.13(2)(a), the defendants contended that the claimant was resident out of the jurisdiction and in a State not bound by the Hague Convention, namely Belarus. This contention was put in two ways: first, that as a simple question of fact the claimant was resident in Belarus; second, that, even if on a purely factual level the claimant was resident (as he claimed) in Poland, his residence there was unlawful, because he had obtained permission to reside there on a false basis, and condition (a) required lawful residence. As to condition (e), they contended that the Polish address shown by amendment on the claim form was not the claimant's correct address.
In his thorough and carefully reasoned judgment, Master Pester rejected these contentions. In short summary, his reasoning was as follows. As a matter of the construction of r. 25.13(2)(a), “resident” should be given its ordinary meaning, signifying “to dwell permanently or for a considerable period of time, to have one's settled or usual abode, to live in or at a particular place”. Therefore the question as to where the claimant was resident was a question of fact. The lawfulness of a person's presence in a particular State was not itself the relevant question. It might be relevant to the factual question, because clear evidence that a person was at immediate risk of deportation from a State could lead to the conclusion that he was not in fact resident there; however, save in a very clear case the court should not determine questions of lawfulness itself but should rely on the determination of the immigration authorities of the relevant State. In the present case, the evidence showed that the claimant was habitually and normally residing in Poland, not in Belarus. Although there were serious questions concerning the basis on which the claimant had obtained his temporary residence permit, it was not appropriate to anticipate the view that the Polish immigration authorities might take. Further, even if the finding were justified that the claimant was not resident in Poland, it would not follow that he was resident in Belarus; therefore the jurisdictional gateway would not be established. As for the condition in r. 25.13(2)(e), the totality of the evidence showed that the claimant had given his proper address on the claim form on 4 July 2022. Accordingly, the defendants had not established that jurisdiction existed to make an order for security for costs.
There is no appeal against the Master's decision in respect of r. 25.13(2)(e). The grounds of appeal are addressed solely to the decision in respect of r. 25.13(2)(a).
Grounds of Appeal
The grounds of appeal may be summarised as follows.
1) The Master ought to have held that in r. 25.13(2)(a) “resident” meant “lawfully resident”.
2) Upon his own direction that lawfulness would be relevant where “there was clear evidence that a respondent was at immediate risk of deportation”, the Master was required on the evidence to find that there was such clear evidence.
3) The Master was wrong to refuse to permit the defendants to rely on a supplemental expert report, filed and served shortly after the hearing, which would have provided further material support for the conclusion in Ground 2. (In the alternative, the defendants apply for the report to be admitted as fresh evidence on the appeal.)
4) On account of Grounds 1 to 3, the Master was wrong to find that the claimant was resident in Poland.
5) The Master ought to have held that the “wrongdoing principle” prevented the claimant from relying on the existence of his residence permit to establish residence for the purposes of r. 25.13(2)(a).
6) The Master ought to have held that, if the claimant was not resident in Poland, he was not resident in any Convention State: “The court was not required to find that the claimant resided in any specific non-Convention State in order for the rule to be engaged; it sufficed that he had failed to establish residence in a Convention State.”
The grounds are all variants on a single theme: that, as the claimant obtained his residence permit to remain in Poland by making a false declaration (which he denies), he cannot satisfy the residence requirement in r. 25.13(2)(a).
In granting permission to appeal, Master Pester wrote:
“The core of the appeal is proposed Grounds 1 and 2. This involves a matter of statutory construction, informed by two decisions of the House of Lords: R v Barnet London Borough Council, ex p. Nilish Shah [1983] 2 AC 309 and Mark v Mark [2006] 1 AC 98. I consider that the proposed grounds of appeal have real prospects of success, given the interrelationship between:
(a) the extent to which (if at all) questions of lawfulness of a claimant's residence are relevant to an application pursuant to CPR Part 25, r. 25.13(2)(a); and
(b) how the answers to those questions apply to the facts of the present case.
See especially at [56] and [67] – [74] of the Judgment.
As to the remaining grounds of appeal, they appear to me to be weaker, but nevertheless I cannot say that the prospects are merely fanciful.”
In his oral submissions to me, Mr Mill KC presented the grounds of appeal in the order 2, 5, 1, 3 and 6; 4 as a compendious ground was given no separate treatment. I shall begin with Ground 1, followed by Ground 5, which is closely related. Then I shall address Grounds 2, 3, 4 and 6 in that order.
Ground 1
Ground 1 is that the Master was wrong to find that “resident” did not mean “lawfully resident”. The question whether “resident” in r. 25.13(a) means “lawfully resident” is one of statutory construction,...
To continue reading
Request your trial