Heath Sinclair v 1. Louis Glatt and Another 1. Leslie Glatt and Rita Glatt (as executors of the estate of Chaja Glatt) and Others (Interveners)
| Jurisdiction | England & Wales |
| Judge | Blake J |
| Judgment Date | 24 June 2015 |
| Neutral Citation | [2015] EWHC 1673 (Admin) |
| Docket Number | Case No: CJA NO 32 OF 1997 |
| Court | Queen's Bench Division (Administrative Court) |
| Date | 24 June 2015 |
[2015] EWHC 1673 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
The Hon Mr Justice Blake
Case No: CJA NO 32 OF 1997
and
Edmund Cullen QC (instructed by Dentons UKMEA LLP) for the Applicant
Stephen Thompson QC (instructed by Fox Williams LLP) for the 1, 2, 3 and 7 th Interveners
Hearing dates: 3 and 4 June 2015
Introduction
The defendant Louis Glatt was formerly a practising solicitor. In January 2001 he was convicted of an offence of conspiracy to launder the proceeds of crime and sentenced to seven years imprisonment. On 15 February 2001 the applicant was appointed receiver of all his assets (with another who was subsequently discharged). In May 2002 a confiscation order was made against Mr Glatt in the sum of £3.2million. On 17 March 2006 the Court of Appeal Criminal Division quashed the confiscation; as a consequence of this decision the receivership was discharged on 25 April 2006.
The interveners are those beneficially entitled to the residue of Mr Glatt's assets after deduction of the charges properly incurred in the course of the receivership, which, it has been established, includes post discharge expenses properly incurred in the capacity of receiver. There are applications before this court made by the former receiver and the interveners. For convenience in this judgment I will refer to the parties as the receiver and the beneficiaries.
Throughout its duration and subsequently, the receivership has been hotly disputed. There have been numerous decisions of judges of this court given in the last 14 years, and three judgments of the Court of Appeal Civil Division. A summary chronology of some of these disputes reveals the following:
In 2001 there were applications made by the receiver to commit Mr and Mrs Glatt for contempt of court for breach of a freezing order obtained before the receivership and a further application for sale of assets; there was a cross-application to dismiss the receivers. On 23 November 2001 Mr Justice Ouseley gave directions for the payment of receivership costs, provision of receivership accounts and for any objections to be raised by Mr Glatt.
Between August 2002 and November 2008, Mr Justice Munby, as he then was, conducted various hearings concerned with Mrs Glatt's mental capacity, the validity of a deed of variation made in her favour and matrimonial claims made against Mr Glatt, various applications made by other interveners in these proceedings, applications for the release of funds from the receivership property, and from January 2003 an application made by Mr Glatt to discharge the receivership for a number of allegations related to the performance of the receiver's functions (described by the receiver as the 'root and branch attack'). This last matter was dismissed in a judgment dated 25 July 2003 ( [2003] EWHC 1732 (Admin) and an order made that is set out in full in Annex 1 to the present judgment. In summary, directions were given for the continuation of the receivership pending the determination of Mr Glatt's appeal against the confiscation order; the receiver's costs were payable in the receivership and to be paid to the extent of 85% subject to detailed assessment, but no such assessment was to be commenced without leave of the court. Amongst other things Munby J found that the receivers had complied with their obligations to submit accounts under the receivership order. An application for permission to appeal this order was refused.
In November 2008, Munby J declared that the receiver's lien over the assets was effective despite the claims of the beneficiaries. This decision was upheld by the Court of Appeal on 13 March 2009 ( [2009] EWCA Civ 176).
In March 2009, the beneficiaries sought detailed assessment and in December 2009 the receiver applied for permission to enforce his lien over the assets to recover his remuneration costs and expenses. These applications were determined by Mr Justice Mitting on 14 December 2010 ( [2010] EWHC 3619 (Admin)) whose order is set out at Annex 2. He directed payment out of the receivership assets, unless by 31 January 2011 an application was made for determination of those costs by a costs judge and the applicant applied to the Supreme Court Costs Office (SCCO) for directions. By paragraph 3 of that order he also determined that interest should run on unpaid amounts at the rate of 5%.
The beneficiaries appealed against the award of interest but the appeal was abandoned with costs to be paid by them on 30 September 2011.
Meanwhile, Mr Glatt was dissatisfied with the price obtained by the receiver on sale of one of his former properties 107 Station Road, Hendon. He sought permission to issue negligence proceedings against the receiver from Mr Justice Parker. The application was refused on 4 November 2010, but allowed in part by the Court of Appeal on 23 November 2011 ( [2011] EWCA Civ 1317). The Court of Appeal held there was an arguable claim that the receiver had been negligent in the marketing of the property despite obtaining a price independently assessed by reputable valuers. A further claim against the receiver that the estate agents had colluded with the purchaser to sell at an under value was dismissed, as it had first been canvassed after expiry of the relevant limitation period. In September 2012 this litigation was settled without admission of liability by acceptance by Mr Glatt of an offer of a lump sum of £132,000 plus costs, money representing both an unspecified capital sum and interest arising from the undervalue alleged. It is pertinent to note that the claim (and accordingly the settlement) was brought by Mr Glatt on behalf of himself and all those beneficially entitled (see particulars of claim paragraph 6A as amended 30.11.2011).
The beneficiaries, supported by Mr Glatt, applied to the SCCO pursuant to the order of Mitting J at Annex 2. On 1 February 2011, Master Gordon-Saker, a costs judge of the SCCO, held a directions hearing for assessment of the costs and remuneration as directed. There were further hearings on 5 December 2011 and between 30 July and 3 August 2012. In the course of these hearings an issue arose as to whether the order for the receiver's remuneration extended to work done after discharge of the receivership order. The matter was remitted to Mitting J who on 29 June 2012, confirmed that it did. An appeal by the beneficiaries against this decision was dismissed by the Court of Appeal with costs against them on 26 March 2013 ( [2013] EWCA Civ 241; [2013] 1 WLR 3602).
On 9 October 2013 a final costs certificate was issued by the SCCO costs judge in the sum of £1,159,562.53 for the legal costs and remuneration of the receiver. These included disbursements in various legal proceedings and some modest administrative disbursements incurred by the receiver in the discharge of his functions. It should be noted that the costs of this assessment of legal costs and remuneration were themselves assessed at £363,700; both sums were to be paid out of receivership assets. These assessments are final and accepted to be binding by all parties.
However, on 21 May 2014, the beneficiaries issued an application for an account to be taken by a Chancery Master of the receipts of receivership property. The receiver issued an application for payment out of all final sums owing relating to the receivership and the outstanding costs of the various appeals and hearings not included within the assessments £1,159,562 and £363,700.
There was a hearing before Mr Justice Mitting on 1 July 2014, of which I have been provided with the transcript. Instead of acceding to or dismissing the account application, he directed that there should be points of claim and a response thereto before the matter returned to him (if available) for hearing. Although there was no formal judgment the transcript reads as follows. In answer to a query from the judge as to precisely what the beneficiaries were seeking Mr Thompson QC (for the beneficiaries) said as follows (460):
" What I seek my lord, is an account of the gross receipts that the receiver has received, less any sums that he says he has taken off, that he says he is entitled to take off, so as to come to his receipt"
After hearing from Mr Cullen QC (for the receiver), the judge said (522):
"As far as ordering an account of gross and net receipts showing the sums deducted is concerned, on the information I have been shown, I am satisfied that, as to either all or virtually all of the receipts, gross and net, that might be in issue, that exercise has already been done and I do not see why the receiver should be made to do it again. If anybody is going to spend money on working it out it should be (the beneficiaries) and not the receiver….Given that there has been in effect full disclosure already, I do not think there is any need for an order for standard disclosure or anything of that kind. The witness statements will no doubt refer to the documents, and one would hope exhibit them…"
These directions have been complied with. The beneficiaries rely on a witness statement by Mr Glatt and the receiver on his twenty first statement in these protracted...
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