Greig William Alexander Mitchell v Sheikh Mohamed Bin Issa Al Jaber
| Jurisdiction | England & Wales |
| Judge | Mrs Justice Joanna Smith |
| Judgment Date | 21 April 2021 |
| Neutral Citation | [2021] EWHC 912 (Ch) |
| Court | Chancery Division |
| Docket Number | Case No: CR-2017-003513 |
| Date | 21 April 2021 |
[2021] EWHC 912 (Ch)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
Rolls Building
Fetter Lane
London, EC4A 1NL
Mrs Justice Joanna Smith
Case No: CR-2017-003513
Reuben Comiskey (instructed by Clyde and Co LLP) for the Applicants
Clare Stanley QC and Lemuel Lucan-Wilson (instructed by Baker & McKenzie LLP) for the Respondents 1,2 and 4
Hearing dates: 30.3.21–31.3.21
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.
Introduction
This judgment should be read together with my judgment of Friday 12 February 2021 in which I dealt with an application by the Joint Liquidators (“ the Liquidators”) of a BVI company, MBI International & Partners Inc., (in liquidation) (“ the Company”), to amend the Re-Amended Points of Claim in the form of a Re-Re-Amended Points of Claim provided on the fifth sitting day of the ten day trial of the action (“ the Original Application”). The background to the Original Application is fully set out in paragraphs 6–40 of that judgment.
I heard full argument on the Original Application, including submissions from the first, second and fourth Respondents (“ the MBI Respondents”) that the new pleading had no real prospect of success owing to the fact that it fell foul of the reflective loss principle. I rejected that argument and I held that, for the reasons set out in my judgment, the balancing exercise that I was required to undertake in the exercise of my discretion plainly weighed in favour of permitting the amendments. However, I accepted submissions from the MBI Respondents that the draft pleading as it stood was insufficiently particularised. Accordingly (and in light of the circumstances as described in the judgment), I permitted the Liquidators some additional time in which to serve a further version of the Re-Re-Amended Points of Claim and I made it clear that I then envisaged that I would hear submissions from the MBI Respondents directed only at whether the revised version of the pleading was now adequately particularised and, if necessary, on the existence of a real prospect of success. I hoped and anticipated at this point that once the amendment issue had been dealt with, it would be possible to continue with the trial.
The Liquidators duly produced a further Re-Re-Amended Points of Claim on the morning of Monday 15 February 2021, which very substantially revised and expanded upon the original proposed amendments. In a note produced on that same morning, the MBI Respondents then raised an entirely new and previously unheralded ground of objection (which it was accepted should have been identified in opposition to the original application), namely that the proposed amendments have no real prospect of success and should not be permitted because the claim advanced by them contravenes the rule, set out in Darker v Chief Constable of West Midlands [2001] 1 AC 435 (“ Darker”), that a witness of fact giving evidence in court has immunity from all claims, even where his or her evidence is dishonest.
Faced with this entirely new argument and in circumstances where the Liquidators had not had an opportunity properly to consider the point, or to research the authorities, I decided that I had little choice in the interests of justice other than to adjourn the trial yet again so as to permit the parties properly to prepare for a further contested hearing on the proposed amendments centred on the issue of whether they had any real prospect of success in light of the principle of witness immunity (“ the Amendment Application”).
By this stage it was clear that it would now be impossible to complete the trial within its allotted timescale, but it was my hope that it would at least be possible to resolve the dispute concerning the amendments and so I gave directions for a hearing on the Amendment Application to take place on Thursday 18 February 2021. At the Liquidators' request, I also permitted them a very short space of time in which to make any final further tweaks to the Re-Re-Amended Points of Claim that they considered necessary in light of the new grounds of opposition. This resulted in service by the Liquidators of a final version of their proposed amendments on the evening of 15 February 2021. I shall refer to this version as “ the Final Proposed Amendments”.
Unfortunately, before the hearing fixed for Thursday 18 February 2021 could take place, circumstances arose which made it impossible for the Liquidators to have proper representation and so, with the consent of all parties, I therefore ordered on 17 February 2021 that the Amendment Application and the trial should be adjourned.
This judgment is my decision on the Amendment Application which was argued before me on 30 and 31 March 2021 by Mr Comiskey on behalf of the Liquidators (replacing Mr Curl who was instructed for the trial) and by Ms Stanley QC on behalf of the Respondents. I am grateful to both counsel for their detailed and skilful arguments.
The Final Proposed Amendments
As more particularly explained in my previous judgment, the Liquidators seek to amend their Re-Amended Points of Claim in circumstances where it became clear during the course of the trial that statements made by the First Respondent (“ the Sheikh”) (both during the course of section 236 examinations under the Insolvency Act 1986 (“ IA1986”) and in witness statements filed in these proceedings) as to the ownership and transfer of shares (“ the Holding BVI Shares”) held by the Company in JJW Hotels & Resorts Holding Inc (“ Holding BVI”) were untrue. This much was confirmed by the provision (on the morning of the fourth day of the trial) of a “list of corrections and additions” which the Sheikh intended would be made to his first and fourth witness statements when he entered the witness box. No explanation was provided at the time by the Sheikh for the change in his evidence, although he has since served a fifth witness statement dated 15 February 2021 acknowledging that his earlier statements were incorrect and apologising to the court. When the trial resumes, the Sheikh will undoubtedly have a considerable amount of explaining to do.
In brief summary, the Final Proposed Amendments:
a. delete paragraphs which are now unsustainable in light of the Sheikh's change of case;
b. plead that the Sheikh was under continuing fiduciary duties to the Company (including post liquidation) to account to the Company acting by its Liquidators for his stewardship of the Company and its assets (“ the New Fiduciary Duties”);
c. plead that the Sheikh gave false information as to the ownership and movement of the Holding BVI Shares during two section 236 examinations held on 26 April 2018 and 1 November 2018 respectively and in a witness statement dated 4 May 2018 (provided pursuant to an order of Registrar Barber dated 26 April 2018), thereby breaching the New Fiduciary Duties;
d. allege that those breaches have caused loss and damage;
e. in an entirely new paragraph added after it became clear that an objection would be taken on the grounds of the principle of witness immunity, plead that, in breach of the New Fiduciary Duties, the Sheikh failed to disclose to the Liquidators correct information about the ownership and movement of the Holding BVI Shares, thereby causing damage;
f. allege that the breach of the New Fiduciary Duties was caused or allowed or participated in by one or more of the Sheikh, the Fourth Respondent (“ Holdings UK”) and the Fifth Respondent (“ JJW Guernsey”) pursuant to an unlawful means conspiracy already pleaded.
Owing to the fact that the submissions on the Amendment Application covered not only the issue of witness immunity, but also a number of other detailed issues arising in respect of individual paragraphs in the Final Proposed Amendments, I set out below in their entirety the new paragraphs in respect of which the Liquidators seek permission to amend from the court.
The bulk of the amendments are to be found in paragraphs 55A-55Q of the Final Proposed Amendments as follows:
“55A. The Sheikh first referred to the 2017 Resolution by an email sent on his instructions on behalf of Dr Alexander Petsche (the Sheikh's Austrian lawyer and a partner in Baker McKenzie) to the Former Liquidator's solicitors dated 12 December 2017. By that email, the Sheikh caused the Former Liquidator inter alia to be told:
“Thus, by Resolution of 27 July 2017 it was resolved that a 100% of JJW Hotels & Resorts Holdings Inc [i.e. Holding BVI] will be acquired by JJW Hotels & Resorts UK Holdings Limited [i.e. Holdings UK] (MBI International Holdings Inc had assigned its debt to JJW Hotels & Resorts UK Holdings Limited). This company is fully owned by MBI International Holdings Inc.”
55B. At all times following the commencement of the liquidation of the Company on 10 October 2011, the Sheikh owed the following duties to the Company acting by its liquidator in his capacity as a director of the Company:
55B.a to account to the Company acting by its liquidator for his stewardship of the Company and its assets prior to the commencement of the liquidation (this duty is an incident...
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