Forstater v Dweck and Another
| Jurisdiction | England & Wales |
| Judge | MR JUSTICE LANGSTAFF |
| Judgment Date | 29 June 2007 |
| Neutral Citation | [2007] EWHC 1991 (QB) |
| Court | Queen's Bench Division |
| Date | 29 June 2007 |
[2007] EWHC 1991 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Mr Justice Langstaff
Mr Hayman appeared on behalf of the Claimant
Mr Platford appeared on behalf of the Defendant
This is a claim to be entitled to 15 per cent commission on the monetary benefit received by the defendant, Leslie Dweck, and the estate of his deceased brother, Eliot Dweck, in respect of their exploitation of computerised programs for commodity and futures trading.
So diverse are the positions that each party adopts that on the face of it there are very different accounts of what happened. This descends into allegations of lying, invention and the fabrication of documents. It is plain to me that over some time attitudes have hardened and there is a degree of hostility between the parties.
The evidence available to help to resolve the issues which arise is not helped by the unavailability of documents. It is common ground that the computer systems of all the main parties have to a greater or lesser extent failed, probably by reason of a virus infection, and so it is a matter of chance what electronically generated documents still remain in existence and accessible.
The Basic Rival Cases
It is said by the claimant that he entered into an agreement in August 2000, as a result of which he is entitled to the payment of 15 per cent commission by Eliot and Leslie Dweck (whom I shall call the Dwecks).
The defendant's account begins somewhat earlier. He describes how in 1998 he was seeking to exploit the commercial possibilities to which the computer program gave rise. The computer program had been in development for some very considerable length of time, since the early 1980s, by Leslie Dweck, his brother Eliot Dweck, a mathematician, and to a lesser extent their brother Alan Dweck and Leslie Dweck's wife, a medical doctor. In 1998 Leslie Dweck says that he described to the claimant, Mark Forstater (whom I shall call Mark Forstater), that commission might be available for anyone, such as he, who would introduce investors into a consortium to provide trading capital, which was necessary if the computer programs were to show a market return. He maintains that in 1998 Mr Forstater mentioned two names to him as possible investors, one of whom was a man called Bob Weis.
On 18 or 19 March 1999 that understanding, if it was an understanding, was however replaced, according to the defendant. Bob Weis had come from Australia to London. It was suggested, says Leslie Dweck in evidence, by Mark Forstater that he might be prepared to invest but only if commission terms were available to him. Summarising the evidence, Leslie Dweck says he agreed to this and upon those terms delivered what was called an information pack relating to the program to the place where Mr Weis was staying without in fact meeting him.
On 27 or 28 April 2000 Bob Weis was again in London. There was a meeting at the home of a man called Neil Kaplan QC in order to discuss the potential investment by Neil Kaplan and Justin Kaplan, a relative, in the presence of Bob Weis. It is accepted that such a meeting took place. The parties differ as who was present at it; the claimant says he was and Eliot Dweck was; the defendant denies that Eliot Dweck was present.
According to the claimant, in late July/early August 2000, a date which during the course of the evidence appeared to become firmer as early August 2000, there was a meeting between him, Leslie Dweck and Eliot Dweck at Leslie Dweck's home in London. He maintains an agreement was reached orally there that he would receive 15 per cent of the financial benefits to be received by the Dwecks from the proceeds of the computerised program made possible by the consortium of investors. It was the purpose of Mr Forstater, following his earlier conversations, to see if he could attract such investment. It is common ground that he approached Bob Weis to help him do so and it is equally common ground that Bob Weis was largely successful thereafter in assembling a group of investors, although the claimant says that he personally never stopped trying to add to their number. On one view, therefore, the claimant had been the effective introduction to the finance which became available. On another view it was Bob Weis who had done all the work of assembling finance.
By early 2001 those who were prepared to put up money to a total of around $1.9 million US had been assembled and were ready to enter into agreements. They did so on 22 or 23 February 2001. By those agreements Alan Dweck and Leslie Dweck's wife, Cynthia, assigned their rights in the intellectual property, which the computer program was, to Eliot and Leslie Dweck. Eliot and Leslie Dweck, now possessed of the sole intellectual property, agreed to sell their rights in it to a company formed for the purpose known as Automated Prophets Limited. Bob Weis, who was himself an investor in an amount which was no less than $200,000 US and may have been as much as $400,000 US, and the other investors were allotted shares in the company. Automated Prophets Limited (which I shall call APL) agreed to make a payment from time to time to Leslie and Eliot Dweck, in recognition no doubt that it was their computer program which made the whole trading program possible.
In April 2001 trading began. At a date which has been variously placed in the evidence between May 2001 and February 2002, 15 per cent of an initial payment made to the Dwecks, in consequence of the signing of the agreement of 2001, the sum of $750 US, was paid to the claimant. He says it was paid in cash. In evidence Leslie Dweck asserted that it had been paid by telegraphic transfer, but it was paid. The significance of that may be important in the light of one matter which I have thus far left out of the chronology. On 21 February, so Leslie Dweck told me, he had a conversation with Mr Weis in the course of which he and Mr Weis agreed that Mr Weis would have compensation by way of commission at 15 per cent and that Mr Weis for his part would pay any sums to Mr Forstater, which he and Mr Forstater would agree between them, in respect of the fact that he, Mr Forstater, had originated the process of investment. But it was, says Mr Dweck, an agreement which he reached and reached only with Mr Weis. There was no agreement to pay the claimant 15 per cent. His case was that the alleged meeting in early August 2000, which I have recounted, simply never happened.
On 2 August 2002 a further 15 per cent by way of commission on payments received by Eliot and Leslie Dweck was paid to the claimant. It was paid in cash. Leslie Dweck says it was paid in cash at the request of the claimant. But he says that before making either the first or the second payment, in the light of the agreement that he had reached with Mr Weis, he sought Mr Weis' approval for the payment. There is a difference as to who phoned whom, but his evidence was that such a conversation took place. So far as the claimant is concerned, he has no knowledge of any such conversation in respect of the first payment of commission, that of $750. He did, however, remember that when he asked for the payment of the second tranche of commission Leslie Dweck insisted first on clearing it with Mr Weis. The claimant says he did not understand why this should be. Mr Weis, who gave evidence, similarly said that he did not understand why that should be since as far as he was concerned Mr Forstater was entitled to the commission. He was going to make whatever money he did out of the venture from two sources; first, he would obtain a return upon his own investment, second, he had the hope that in due course he might come to manage the investments and be able to charge and sustain a management fee in addition.
After 2002 a dispute arose between those who had invested as shareholders in APL and the Dwecks, or at least Leslie Dweck in particular. The rights and wrongs of that dispute are matters with which I am not concerned in this litigation, but it was plainly an acrimonious dispute and it is plain to me that Leslie Dweck felt wronged by the stance which the investors had taken.
On 12 December 2002 Eliot Dweck died. He had suffered lung cancer since at least March 2002, diagnosed in July 2002, which made him progressively more ill throughout the rest of the year. It seems probable to me that attempts at resolution of the dispute were made but they failed.
On 25 March 2004 the claimant wrote to Leslie Dweck. He said this:
“Dear Leslie
“I had a meeting today with my accountant and told him about my involvement in the investment programme. I explained to him that once an agreement was in place that money would flow to the Dweck family and that I would be entitled to a 15% share of the income accruing. He advised me that for tax purposes it would be advisable for us to have a written rather than oral agreement in place.
“Consequently I have drafted a short letter agreement for us to sign. I am sure you will let me know if it needs to be amended in any way.”
Accompanying that letter was an equally short letter which read as follows:
“Dear Leslie
“This letter is to confirm the arrangement made between you, myself and your late brother Eliot in relation to the raising of funds for setting up and investing in the AllZys trading systems.
“You and Eliot agreed that if my attempt to raise money was successful that I would receive 15% of any income, revenue, dividends, profits etc that accrued to you and Eliot (and now his estate)...
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