Hilden Developments Ltd v Phillips Auctioneers Ltd
| Jurisdiction | England & Wales |
| Judge | Geraint Webb |
| Judgment Date | 21 June 2023 |
| Neutral Citation | [2023] EWHC 1506 (KB) |
| Court | King's Bench Division |
| Docket Number | Case No: QB-2020-002644 |
and
[2023] EWHC 1506 (KB)
Geraint Webb KC
sitting as a Deputy High Court Judge
Case No: QB-2020-002644
IN THE HIGH COURT OF JUSTICE
KING'S BENCH DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
Jonathan Chew (instructed by Stewarts Law LLP) for the Second Defendant/Applicant
Bobby Friedman (instructed by Charles Russell Speechlys LLP) for the Fourth Defendant/Respondent
Hearing date: 17 May 2023
Approved Judgment
This judgment was handed down by the Judge remotely by circulation to the parties' representatives by email and release to The National Archives. The date and time for hand-down is deemed to be 10:30 on Wednesday 21 June.
Geraint Webb KC sitting as a Deputy High Court Judge:
A. Overview
This judgment concerns an application by the Second Defendant, Mr Robert Tibbles, for a non-party costs order against his twin brother, Mr Sebastian Tibbles.
Hilden Developments Limited (“ HDL”), the claimant to the original litigation, was incorporated in the British Virgin Islands (“ BVI”) in December 1990 by Mr Nigel Tibbles, then a solicitor. HDL is one of several companies which Nigel Tibbles incorporated for family-related purposes. Other such companies include Jimson International Limited (“ Jimson”) and French companies referred to as “SCI Roc” and “SCI Roc ii”.
Nigel Tibbles had four sons, Oliver, James, and twins Sebastian and Robert.
Robert Tibbles, the Second Defendant, established a significant collection of contemporary art between the mid-1980s and about 2020.
The litigation concerned title to a painting by Damien Hirst entitled “ beautiful tropical, jungle painting (with pink snot)” (“ the Painting”).
On 13 February 2020 the First Defendant auction house (“ Phillips”) sold approximately 40 works of art, including the Painting, which had been consigned to it by Robert Tibbles (“ the Auction”). The sales totalled several million pounds. The Painting sold for £350,000 inclusive of buyer's premium.
HDL intervened to stop the release of the Painting following the Auction and commenced proceedings against Phillips and Robert Tibbles, seeking a declaration that it had legal title to the Painting and claiming damages.
Following a three-day trial in January 2022 I found that Robert Tibbles was the legal owner of the Painting and that HDL's claim failed: [2022] EWHC 541 (QB) (“ the Judgment”). Phillips played no party in the trial as the claim against it had been stayed pursuant to a consent order.
The litigation concerning the Painting was one of multiple proceedings involving a combination of family members and various companies set up by Nigel Tibbles. In the Judgment, at [12], I said this:
“The claim is part of a much larger ongoing dispute between members of the Tibbles family. According to HDL's Reply there have been multiple claims issued in various courts (including in France, Monaco and England) between Robert Tibbles on the one hand and other family members and/or companies operated by those family members. Most of those other claims have concerned a property in the south of France (“ the French villa”). The multiple legal disputes were described as a “family feud” by Mr Brier, HDL's counsel, and as “litigation warfare” by Mr Chew, Robert Tibbles's counsel; both descriptions appear to be accurate.”
The details of the original claim are set out in the Judgment. For present purposes it is sufficient to summarise the following background facts and matters:
(1) HDL was originally incorporated for the purpose of holding land in Kent, extending to about 30 acres, in close proximity to the Tibbles's family home. Nigel Tibbles's evidence was that HDL was set up to hold the land and to minimise any capital gains tax in the event of a future sale of the land.
(2) Mr Oliver Tibbles was appointed as HDL's first Director and sole shareholder. A minute dated 6 February 1991 recorded that Oliver Tibbles resolved to purchase the land in Kent for £45,000 [24] and the land was duly acquired. Leaving aside its claim to own the Painting, HDL owned no other assets.
(3) HDL has never had a bank account and appears not to have produced any accounts at any material time.
(4) As to the purchase of the Painting, a deposit of £10,000 against the sale price of £68,000 was initially paid to the selling gallery, White Cube, to secure the Painting in October 1998; both Nigel Tibbles and Robert Tibbles claimed to have paid this deposit. It was common ground that Jimson then paid the balance of £58,000 to the gallery in February 1999. It was also common ground that Robert Tibbles paid Jimson £40,000 immediately before Jimson paid the gallery. It was common ground that the invoice for the Painting was addressed to HDL at its BVI address.
(5) Nigel Tibbles gave evidence on behalf of HDL and claimed that he instructed Robert Tibbles to buy the Painting for him as an investment and because he “liked the painting” and/or because he intended to hang it at the French villa in which he lived (“ the French villa”). He claimed to have paid the £10,000 deposit personally, with Jimson paying the balance and re-paying him for the deposit. He claimed that he subsequently decided not to hang the Painting in the French villa and allowed Robert Tibbles to hang it in his London flat. There was no convincing explanation provided for the four-month delay between the payment of the deposit in October 1998 and the payment of the balance in February 1999.
(6) Robert Tibbles's position was that he paid the £10,000 deposit and that his father assisted with funding the balance via Jimson. He claimed that the invoice was addressed to HDL at its BVI address as he said that he had been informed that the gallery did not have to charge VAT if the invoice was to an address outside the UK. He said he had acquired some other works of art in a similar manner with the invoice addressed to an individual or company overseas. Robert's Tibbles's position was that he transferred £40,000 to Jimson and received a loan of £18,000 from his father, via Jimson, to help fund the purchase. The delay between the payment of the deposit in October 1998 and the payment of the balance in February 1999 was explained by the fact that he tended to negotiate the purchase of a new artwork in the autumn and then wait until the payment of his bonus in the new year to pay the balance; he gave examples of other purchases structured in this way. On this occasion he was £18,000 short of the balance and so sought assistance from his father. He said that he had received other loans from his father, via Jimson, from time to time to assist with property purchases.
(7) It was common ground that the Painting was delivered to Robert Tibbles and was hung in his London flat together with his significant and growing contemporary art collection.
(8) Unlike the position in relation to the purchase of land in Kent, HDL had no internal documents recording any resolution to purchase the Painting, nor recording the fact that the Painting had been purchased by HDL, nor recording that it was an asset of the company.
(9) In May 2014 Oliver Tibbles resigned as director and transferred his share to Sebastian Tibbles and Sebastian Tibbles took over as sole director of HDL.
(10) Sebastian Tibbles also gave evidence at trial on behalf of HDL. He had no involvement in the purchase of the Painting.
In summary, I found (Judgment, [186]) that Robert Tibbles's account of the facts surrounding the purchase was substantially correct. Following the Judgment, a hearing of consequential matters took place in May 2022. HDL was ordered to pay Robert Tibbles's costs on a standard basis up to 15 October 2021 (being the date of a relevant Part 36 offer by Robert Tibbles) and on an indemnity basis thereafter. HDL was ordered to make a payment on account of costs of approximately £170,000 by 9 June 2022. HDL did not make that payment on account of costs or any other sum.
Robert Tibbles's application for a non-party costs order was issued on 22 August 2022 against Nigel Tibbles and Sebastian Tibbles. By order dated 5 December 2022 both respondents were joined as parties for the purposes of costs only pursuant to CPR r 46.2(1)(a) and directions were made for the service of further evidence and for the hearing of the substantive application. At that stage neither Nigel Tibbles nor Sebastian Tibbles was legally represented.
On 19 December 2022 I was forwarded an email which James Tibbles had sent to the Court concerning the deteriorating health of Nigel Tibbles, who was 92 years of age, and raising issues in respect of his capacity to act in the litigation. I made an order of the court's own motion on the same day staying the proceedings against Nigel Tibbles until further order. Mr Nigel Tibbles sadly passed away on 11 January 2023.
By the time of the substantive hearing, which took place on 17 May 2023, Sebastian Tibbles had confirmed that his understanding, as an executor, is that Nigel Tibbles's estate has no substantial value following inheritance tax planning measures, although probate had not yet been completed. In the circumstances, no application was made to lift the stay and the hearing was therefore limited to the application against Sebastian Tibbles alone.
Sebastian Tibbles has confirmed that HDL disposed of the Kent land to a Singapore company in 2014 and that HDL has no assets. He has also confirmed that he personally funded the legal costs of the proceedings on behalf of HDL.
Robert Tibbles's position, in summary, is that (i) HDL no genuine interest of its own in the litigation in circumstances in which it did not trade (whether in art or otherwise), had no other assets and had no...
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