Dyson Technology Ltd and Others v Keith Curtis and Another
| Jurisdiction | England & Wales |
| Judge | His Honour Judge David Grant |
| Judgment Date | 09 December 2010 |
| Neutral Citation | [2010] EWHC 3289 (Ch) |
| Court | Chancery Division |
| Date | 09 December 2010 |
| Docket Number | Claim No: 9BM30297 |
Neutral Citation Number: [2010] EWHC 3289 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
BIRMINGHAM DISTRICT REGISTRY
Birmingham Civil Justice Centre
His Honour Judge David Grant
Claim No: 9BM30297
INDEX
| PARAGRAPH NUMBER. | SUBJECT |
| 1 | Introduction. |
| 2–3 | Relevant Interlocutory History. |
| 4 | Representation at Trial. |
| 5 | The Background. |
| 6–26 | The Issues to be Determined at Trial. |
| 27–41 | The Accountancy Evidence and the Financial Background of the Defendants. |
| 42–75 | The Case against the First Defendant as regards the Far Eastern Monies. |
| 76–86 | The Case against the Second Defendant. |
| 87–88 | General Assessment of the Second Defendant. |
| 89–123 | Specific Aspects of the Evidence Regarding the Second Defendant. |
| 124–127 | Summary of the Claimants' case against the Second Defendant in Knowing Receipt. |
| 128–133 | Defences raised by the Second Defendant. |
| 134–142 | In respect of what sums was the Second Defendant a Knowing Recipient? |
| 143–145 | The Separate Personal and Proprietary Claims as regards the Second Defendant. |
| 146–147 | The Separate Personal and Proprietary Claim as regards the First Defendant. |
| 148–156 | Interest. |
| 157 | Appendix. |
Introduction
In this case four Dyson companies (to whom I shall refer collectively either as "the Claimants" or as "Dyson") make claims against both Mr Keith Curtis, the First Defendant, and his wife Mrs Diane Curtis, the Second Defendant. Dyson's claims against the First Defendant arise out of his alleged dishonest conduct whilst employed as Tooling Manager for various of the Dyson companies, initially in connection with Portuguese suppliers called Lismolde, and thereafter, in connection with a number of Dyson suppliers in the Far East, particularly in Malaysia. Dyson's claims against the Second Defendant arise out of her alleged knowing receipt of monies which the Defendant alleges were the fruit of bribes, either carried out or conducted by the First Defendant as regards Lismolde, or with his knowledge and/or under his direction as regards the Far Eastern suppliers.
Relevant Interlocutory History
The first Freezing Order was made on 18 June 2009 (page A/41–57); it was varied and renewed on a number of subsequent occasions and continued through the trial.
On 24 September 2009 in default of the First Defendant filing a defence, an order was made (pages A/95–98) declaring that the Claimants were entitled as against the First Defendant, at their election (for the avoidance of doubt the Claimants' right to elect being expressly reserved) to:
(a) An account for monies having been received by the First Defendant and interest thereon …; or
(b) An account for profits and interest thereon.…; or
(c) Damages and interest thereon; and/or
(d) Such further or other relief as may be necessary or that is in accordance with the equities …
By paragraph 3 of that order, a detailed order for disclosure was made against the First Defendant. By paragraph 7 of that order it was ordered that the First Defendant should make an interim payment to the Claimants in the sum of £615,903.65. By paragraph 8 of that order it was ordered that the First Defendant should pay the Claimants' costs of the proceedings incurred to date, and by paragraph 9 an order for payment of the sum of £70,000 on account of those costs was made.
Representation at Trial
At the trial, the Claimants were represented by Lance Ashworth QC; the First Defendant represented himself, and the Second Defendant was represented by Peter Dodge of Counsel. At the outset of the trial I made the following directions as regards the First Defendant's participation at the trial:
(1) That he was entitled to cross-examine any witness called in the course of the trial;
(2) That he was not entitled to advance any positive case on his own behalf; and
(3) That he was not permitted to give evidence on behalf of himself. However as the Second Defendant had filed and served a short witness statement of Mr Curtis (page B/70–71), in which, absent 3 short points made in paragraphs 5 to 7, he simply confirmed what the Second Defendant said in her witness statement, it would be possible for the Second Defendant to call Mr Curtis as a witness on her behalf, if so advised. In the event Mr Dodge decided not to call Mr Curtis as a witness on behalf of the Second Defendant.
The Background
This section of the Judgment is taken from Mr Ashworth QC's written opening note. While by definition having been drafted on behalf of Dyson, and thus reflecting Dyson's understanding of the matter as at the commencement of the trial, in my judgment paragraphs 6 to 28 of Mr Ashworth QC's written opening are cast in sufficiently neutral terms to enable me to adopt them for the purposes of setting out the essential background to the case. They provide as follows:
"6. Keith Curtis was a long-standing employee of the first 3 Claimants from August, 1996 to 21st May, 2009. Fuller details of his employment are set out in paragraph 4 of the Amended Particulars of Claim [A/2/7]. He was a senior tooling manager responsible for specifying and commissioning from third parties the manufacture of injection moulding tools for the Claimants and other members of the Dyson group of companies to make plastic components for their products. His salary details from October, 1997 onwards are set out at paragraph 1.27 of Appendix 4a [C1/5/39]. In the period between October, 1997 and his dismissal on 21st May, 2009 Keith Curtis received total legitimate net pay of £517,164.64.
"7. In March 2009 Mr Bowen, Dyson's Group Legal Director, learned that there were irregularities occurring in Dyson Technology's tooling department. It was said that Keith Curtis had been receiving payments from tooling manufacturers as an incentive to place Dyson Group's contracts with them. It was suggested that Keith Curtis had been engaged in this practice since he joined Dyson in 1996. It was also suggested that Lea Yuen Pok ("Mr Pok") a tooling manager for Dyson Malaysia, had also been receiving payments.
"8. The Claimants promptly undertook investigations initially by way of instructing commercial and bank investigators, Hogan & Co. International, to investigate the veracity of the claims. In two reports dated 7 May 2009 [D1/205–210] and 14 May 2009 [D1/253–254] respectively, they reported that:
(a) Keith Curtis' wife, Diane Curtis, and a schoolteacher by vocation had set up or acquired a company called Injection Mould Services Limited (IMSL) which had been incorporated on 3rd February 1998. She was the main shareholder (holding 99 of the 100 shares, the other share being held by the Curtis's 16 year old daughter) and sole director for the relevant times, having been appointed as such on 8th June, 1998 [D1/281];
(b) Notes to the statutory accounts of IMSL also disclosed that Diane Curtis was purportedly a sole trader trading as Technical Moulding Services ("TMS");
(c) On 19 October 2003 Keith & Diane Curtis purchased for £511,004 without a mortgage a property called St Mary House at 15 St Mary Street, Chippenham ("the Property"). Their earlier residence had not been sold at the time of such purchase.
"9. There followed a series of meetings from 20 May 2009 to 17 June 2009 [D1/285–295, D1/298–303, D1/312–321, D1/322–323, D1/333–337, D1/343–346, D2/357–360] between senior executives of the Dyson Group and Keith Curtis. Despite initial denials of any wrongdoing, followed by limited admissions, ultimately:
(a) Keith Curtis accepted he had received monies from Lismolde LDA ("Lismolde"), a supplier to the Dyson Group, for placing Dyson contracts with Lismolde. He said that he had received hundreds of thousands of pounds in this way. He also said that as recently as 15th May 2009 he had received payment from Lismolde.
(b) Keith Curtis said that invoices were raised by IMSL or TMS to Lismolde.
(c) Keith Curtis said that Diane Curtis knew what was going on.
(d) Keith Curtis initially cooperated in providing certain documentation including in relation to at least some of his and his wife's bank accounts (although certain bank accounts for TMS were not provided). Keith Curtis provided some documentation in relation to 38 or so bank accounts in his name or those of his wife or IMSL or TMS, together with a few in the name of their daughter Emma Jane.
(e) Keith Curtis was involved in the placing of Dyson contracts for injection mould tooling in Malaysia from the time when Dyson re-sourced its tooling manufacture to that country (which is understood to have commenced in or about 2000); although he denied that he received any bribes in relation to such placements.
"10. In meetings in early June 2009 senior executives of the Dyson Group interviewed Mr Pok. At the first meeting [D1/325–332]:
(a) Mr Pok initially denied having received any income from tooling or moulding suppliers in return for work given by the Dyson group;
(b) Mr Pok then admitted that he had received monies from certain moulding companies, identifying Ecomould, Primeira, Good Fix, Excellence and VSI;
(c) Mr Pok could not recall how much and said that payment had stopped;
(d) Mr Pok said he knew he would have to repay the money;
(e) Mr Pok said that payments had been made in cash, in particular from Mr Chan of VSI.
At the second meeting [D1/338–342], now accompanied by a lawyer (Wong Lock Heng), Mr Pok:
(f) retracted his admission and denied receiving payments;
(g) asserted that he had only made the admission because he "felt trapped and had played along to get out of the meeting quickly".
"11. Mr Pok reported to Keith Curtis. Keith Curtis approved all contracts...
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