Greenwich Inc. Ltd (in Adminstration) (Acting by its Administrators Stephen John Hunt and Timothy James Bramston) v Frank Nugent Dowling and Others
| Jurisdiction | England & Wales |
| Judge | Mr Justice Peter Smith |
| Judgment Date | 15 July 2014 |
| Neutral Citation | [2014] EWHC 2451 (Ch) |
| Docket Number | Case No: HC13C05285 |
| Court | Chancery Division |
| Date | 15 July 2014 |
[2014] EWHC 2451 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
The Hon. Mr Justice Peter Smith
Case No: HC13C05285
Case No: HC13DO5286
Martin Pascoe QC and Hilary Stonefrost (instructed by Messrs Moon Beever) for the Claimants
Neil Kitchener QC and Matthew Cook (instructed by Messrs Mishcon de Reya) for the Defendants
Hearing dates: 7, 8 and 16 April 2014
INTRODUCTION
This judgment arises out of a freezing order on a worldwide and domestic basis together with other orders which I granted ex-parte on 4 December 2013. The return date was scheduled for 16 December 2013 (before the Interims Judge). The Defendants resisted the Claimants' application and sought a discharge of the order I made on the basis:
(a) That I had been misled into giving the orders and/or there was a failure to disclose important matters in breach of the Claimants' duty of full and frank disclosure and
(b) Some of the claims were contended to be unarguable.
There was of course limited time on an interims return date to hear such an application. There was a Deputy High Court Judge available but he was in the same chambers as Mr Kitchener QC who appears for the Defendants and the Claimants refused to consent to him (Mr Nicholas Strauss QC) hearing the case.
Apparently the Claimants attended court on 16 December armed with a letter from Counsel accepting that I had been misled in one critical aspect and offering an apology. That letter was not shown to the Court or the Defendants at the hearing.
Given the lack of court time, the parties agreed on the basis of undertakings given by Mr Dowling (the First Defendant), Madison Lease Limited (Third Defendant), Craig O'Brien, the Scottish Corporate Defendants (American Bar & Grill Trading Ltd, Union Square Trading Ltd, Madison New Trading Limited, and Spread Eagle Trading Limited) that preserved the assets of the various individuals and companies pending the hearing of the present application.
Against that the Claimants gave the usual cross undertaking in damages together with other undertakings which are of no concern.
That regime still remains in place. It is those undertakings that the Defendants seem to have discharged.
The matter was then re-listed to be heard before Mr Richard Spearman QC sitting as a Deputy Judge of the High Court. He correctly, in my view, concluded that in view of the nature of the Defendants' allegations the case ought to be referred back to me. I concurred in that view and the case was re-listed and came on before me on 7–8 April and 16 April 2014. At the conclusion of the hearings, I indicated that I would discharge the undertakings for the reasons given in a judgment to be provided later. The question will still also remain as to whether they should be restored in an order if the Defendants are unlikely to renew them.
Subject to paragraph 119 if the Defendants no longer had been willing to give the undertakings that they gave on 16 December 2013, I would have heard submissions from the parties as to whether the Claimants should be granted any further relief and if so, what relief.
BACKGROUND
The background to this case can be discerned from the first affidavit of Stephen John Hunt sworn on behalf of the Claimants in both actions on 4 December 2013. I had seen a draft of this with various incomplete parts of it on 2 December 2013.
Mr Hunt together with Timothy James Bramston, was joint administrator of Greenwich Inc Ltd ("Inc"). Mr Bramston was also the liquidator of Greenwich Trading Limited ("Trading").
As such joint administrator and liquidator he sought a freezing injunction against Mr Dowling, who was the sole de jure director of both Inc and Trading, and a Ms McCracken who was alleged to be a de facto director of Inc and Trading.
Injunctions were also sought against the large number of companies referred to above (together the "Scottish Companies") and Mr O'Brien is said to be the de jure director of the Scottish Companies. All of the Scottish Companies were registered in Scotland. In addition, injunctions were sought against Madison Lease Limited.
The primary claim was that assets belonging to Trading were purportedly transferred to the Scottish Companies and that there was no evidence of any consideration having been paid.
PREVIOUS HEARING
The Claimants appeared before me ex parte on the afternoon of 2 December 2013. In that application the Claimants were seeking not only freezing injunctions but also search orders. However, the application was simply not ready; the main affidavit (that of Mr Hunt) was not only unsworn, it was full of blanks which Counsel had indicated required completion in various respects. The proposed Supervising Solicitors were there but there was no evidence in respect of the suitability of those proposed supervising solicitors although they were well known to me having been involved in search orders in the past.
I declined to make an order on the basis of that material. At the time the concern was in respect of antiques which it was believed that Mr Dowling was improperly removing from the various company premises or had improperly held under his own control even though they belonged to the company. In Greenwich Inc Holdings Ltd's ("Holdings") accounts (the holding company of Trading and Inc) there was a figure of £3,373,000 as at 30 May 2011. Earlier a figure was as high as £6.6m for insurance purposes and the net figure in the evidence from a distressed sale was stated to be £2m. There were suggestions of antiques disappearing in a white van which was being followed by the police.
Despite the enthusiasm of Counsel for the application, I declined to make a Search Order on the basis that it was premature and the evidence was not properly put together. I indicated that I might grant some negative injunctive relief if it was sought because at that stage the Claimants did not want to alert Mr Dowling whilst they were still pursuing assets which it was asserted he was wrongfully removing.
I also indicated (transcript page 11) that as I understood it, the administrators and liquidators had control of all of the pubs. That was not corrected and it was not the true position.
I also indicated (transcript page 3) that I was not convinced that even if I granted a freezing injunction, it should be worldwide.
INTERIMS – AN OVERVIEW
I should say something about the interims procedure that operates in the Chancery Division.
The Chancery Division has available for every day of the week a designated judge who only hears urgent interlocutory applications (both inter-partes and ex parte). By far the largest number of applications is ex parte or return days of ex parte injunctions previously granted. A judge is appointed to sit on a fortnightly basis. During that fortnight the relevant judge hears all the applications that are made in the interim court and the judge is also available on weekdays to hear urgent applications out of court hours. At the weekends a different judge hears the out of hours applications that might arise then.
There is no limit to the number of persons who can apply. There is an overall limit that no application will be entertained if it has an estimated length of hearing in excess of two hours. Those two hours include pre-reading, hearing time and judgment time (a point regularly overlooked by Counsel and Solicitors). It follows that the relevant judge regularly sits very long hours. When the judge hears the cases on the day, the sittings might go as late as between 7pm and 9pm in the evening. There are regularly dozens of applications that are made. When the judge finishes that day he will then have to pre-read the applications that have been notified for the next day. During the day up until 4.15pm, parties can apply by contacting the clerk and asking to be heard.
It is a challenging process both for the judge and the court staff. However, it is considered by the division to be a vital tool of the services that the division offers.
It will be appreciated that when a judge is hearing so many applications, he will be provided with large amounts of material in respect of those applications. Given the limits it is unrealistic to believe that the judge will be able to read all the material that is put before him or her for consideration. Indeed if the interims judge pre-read all the material provided at the start of the day, there would be very little time for the actual hearings (despite often optimistic estimates of the time to read relevant material).
The judges are therefore very dependent on what the advocates tell them. They are dependent first as regards the fleshing out of skeletons and explaining the basis of the case and second, as regards the material that it is necessary to read to be able to understand the case so as to make a decision. For example, in this case on 4 December 2013, I was told by counsel for the Claimants that I did not need to read the exhibits so I did not. They filled three lever arch files. If I had read them the case would have exceeded the two hour limit.
Without that confidence in being able to rely on counsel, the...
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Table of Cases
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