FHR European Ventures LLP and Others v Mankarious and Others (No 2)
| Jurisdiction | England & Wales |
| Judge | MR JUSTICE SIMON,Mr Justice Simon |
| Judgment Date | 15 November 2011 |
| Neutral Citation | [2011] EWHC 2999 (Ch) |
| Court | Chancery Division |
| Docket Number | Case No: HC09CO4439 |
| Date | 15 November 2011 |
[2011] EWHC 2999 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
(sitting at)
The Law Courts, Quayside,
Newcastle–upon–Tyne,
NE1 3LA
Mr Justice Simon
Case No: HC09CO4439
Mr Christopher Pymont QC (instructed by Hogan Lovells International LLP) for the Claimants
Mr Ian Mill QC (instructed by Farrer & Co LLP) for the Defendants
Hearing date: 1 November 2011
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Following the delivery of Judgment in this matter on 5 September, the parties have been able to agree the form of the order which should follow, apart from 2 points, relating to costs and the form of the declaration.
The Costs issue
It is common ground that an order for costs should be made in favour of the Claimants. The issue is whether it should be made against the second Defendant alone, or against all Defendants jointly and severally.
For the Defendants, Mr Mill QC submitted that there has been a finding that the second Defendant acted in breach of fiduciary duty, and that only the Second Defendant should be liable to pay the Claimants' costs. He accepted that, if the Claimants were able to show that they were entitled to further equitable relief against the First and/or Third Defendant then each might become liable for the costs of an inquiry. However that point has not yet arisen, and until it did it would be unjust to make the First and Third Defendants liable for costs.
Mr Pymont QC, for the Claimants, argued that all three Defendants resisted the claim together and had pursued the counterclaim together, without raising or proving any material distinction between them. The counterclaim included a claim for an equitable allowance made by all Defendants which had failed. No Defendant had argued that it was improperly joined, or that it (rather than a co-defendant) was entitled to bring the counterclaim. In §26.b of the Defence the three Defendants admitted that they owed fiduciary duties to the Claimants, but averred (in §26.c and §34) that the duty had been discharged. That argument had failed; and it followed that all three Defendants had acted in breach of duty and the Claimants were entitled to proceed against each of them for accounts and enquiries to be taken on the basis that they were parties to the non-disclosure.
The Claimants and Defendants each proceeded on the broad basis that there was no material distinction between the Defendants either for the purposes of the claim or the counterclaim. In these circumstances I have concluded that the proper approach would have been to make all the Claimants and all the Defendants jointly liable for the costs of the counterclaim and the claim respectively. In the event, the parties have sensibly agreed that the Claimants are entitled to 90% of their costs. I therefore consider that the liability for these costs should be a joint and several liability of the three Defendants.
The form of the Declaration
There are two rival versions.
The Defendants'version:
It is declared that the Second Defendant, having failed to obtain the fully informed consent of any of the Claimants to the commission payment made to it by Monte Carlo Grand Hotel Limited ('MCGH') of the sum of €10 million in respect of the sale by MCGH of a long leasehold interest in the Hotel in December 2004 to the First Claimant, is liable to account for that sum to the Claimants (to each of which it owed fiduciary duties) following its receipt by the Second Defendant on or about 7 January 2005.
Mr Mill conceded that there should be liberty to apply for directions in relation to any claim for additional relief.
The Claimants' version is rather shorter,
It is declared that the Second Defendant received the sum of €10 million from Monte Carlo Grand Hotel Limited on or about 7 January 2005 on constructive trust for the Claimants absolutely and is liable to account to the Claimants therefore.
The crucial question is whether the Declaration should refer to the sum of €10 million being held subject to a Constructive Trust.
For the Defendants, Mr Mill accepted that, if the Claimants could show that the money which they paid to the vendors had been the source of the €10 million received by Cedar, then it could be argued that the €10 million was held subject to a Constructive Trust. However, he submitted that the Claimants cannot (at least at this stage) show that it did; and accordingly it is inappropriate to make a Declaration now in the form advanced by the Claimants.
Mr Pymont QC agreed that there had not been any findings as to whether the €10 million paid to Cedar had come from the Claimants' payment of the purchase price for the Hotel. However, he submitted that this did not matter since his clients could rely on a proprietary interest in the €10 million paid to Cedar. Either the €10 million is or had been beneficially the property of the Claimants or Cedar had acquired the sum by taking...
To continue reading
Request your trial
-
FHR European Ventures LLP and Others v Mankarious and Others
...make. 11 It was on the subsequent hearing to decide the form of order that the current battle lines were drawn. On that occasion ( [2011] EWHC 2999 (Ch)) the judge acknowledged that his use of the phrase "Constructive Trust" was unfortunate. Having heard submissions based principally on the......
-
Mr Nopporn Suppipat v Mr Nop Narongdej
...Civ 347, Simon J held that the remedy was purely personal; FHR could not assert a proprietary constructive trust over the €10 million: [2011] EWHC 2999. The Court of Appeal allowed an appeal as to remedy distinguishing the facts from those in Sinclair v Versailles but also casting some doub......
-
FHR European Ventures LLP v Mankarious
...further hearing to determine what order should be made in the light of that judgment, following which Simon J gave a further judgment – [2013] 2 BCLC 1. In that judgment he concluded that he should (i) make a declaration of liability for breach of fiduciary duty on the part of Cedar for ha......