Holland and Others v Fast Corporate Solutions Ltd and Others
| Jurisdiction | England & Wales |
| Judge | Mrs Justice Carr |
| Judgment Date | 24 January 2014 |
| Neutral Citation | [2014] EWHC 825 (QB) |
| Docket Number | Case No: ATC/13/0674 |
| Court | Queen's Bench Division |
| Date | 24 January 2014 |
[2014] EWHC 825 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
The Royal Courts of Justice
Strand
London, WC2A 2LL
The Honourable Mrs Justice Carr
Case No: ATC/13/0674
Mr D Caplan (instructed by Mishcon de Reya) appeared on behalf of the Claimants
Mr H O'Donoghue (instructed by Rahman Ravelli) appeared on behalf of the Second Defendant
In this matter I am shortly to deliver what will be a fairly lengthy oral judgment. I would be grateful if at the conclusion of this hearing counsel could assist the transcribers by providing a list of the more difficult words to spell and the names of the parties and entities to which I will refer.
In circumstances where I am delivering a reserved oral judgment, and in the circumstances of this particular case, I state at the outset what my final findings are. I find that Mr Heed acted in contempt of court on the following counts: count 1, in respect of the Japonica Trade pl email account, but not in respect of the Trade Services email account; count 4, in respect of 11 deleted emails relating to Japonica and MDP; counts 6 and 7, in respect of Japonica, accounts related to Japonica and in respect of MDP. Count 8 has been withdrawn and I dismiss the charges on counts 2, 3 and 5.
Introduction
This is an adjourned application for committal brought by the Claimants in this action ("the applicants") against one of the Defendants, Mr Ian Michael Heed ("Mr Heed"). The First and Second Claimants, Guy and Peter respectively, are brothers. The Third Claimant is Peter's wife. The Fourth Claimant is a company associated with Guy and Peter. On 7 March 2013 the applicants commenced proceedings against the Defendants, including Mr Heed, claiming damages for conceit and/or unlawful means conspiracy in relation to an allegedly fraudulent scheme involving purported investments in carbon credits in 2011 and 2012. Further or alternatively, equitable, proprietary or restitutionary claims are advanced. The scheme is said to have been operated through the First Defendant, First Corporate Solutions Limited ("FCS").
One of the bank accounts represented to the applicants as being that of FCS was in fact Mr Heed's personal account. Some £1 million is said to have been washed through that account between December 2011 and June 2012 when that account was closed. Mr Heed was also company secretary of a company called Fast Corporates Solutions Limited (emphasis added) ("Fast Corporates"). Mr Heed's home address was provided as the address for Fast Corporates. An account in the name of Fast Corporates was the recipient of substantial sums transferred by the applicants. Some £460,000 is said to have been washed through the account between early January and 19 March 2012 when that account was closed.
It appears that Mr Heed was disqualified as a company director in 2010, backdated to 2009. By about mid-2012 FCS and those actually or purportedly involved in it had gone underground. The applicants claim to have been defrauded of over £200,000.
Immediately before the commencement of these proceedings, on 5 March 2013, the applicants sought and obtained without notice a search order against Mr Heed ("the search order") and a worldwide freezing order against Mr Heed and each of the other Defendants ("the freezing order"). The orders were made by Foskett J. These committal proceedings relate to alleged intentional breaches of those orders by Mr Heed.
Mr Heed lodged a defence in person to the claim against him, denying any wrong-doing. He said that he did not control FCS or Fast Corporates and was not involved in receiving or paying out funds. As set out in more detail below, summary judgment has now in fact been awarded against him. There is currently an ongoing criminal investigation into the events underlying the claim against the Defendants, as a result of which Mr Heed is on conditional bail. He has not been charged and is due next to report in May of this year.
Mr Heed has referred to those parts of the search order providing for reasonable steps to be taken by the applicants, their solicitor and the independent computer specialist, to ensure no damage was caused to any data or storage device belonging to him. There was provision, as is normal, for compliance with any order made by the court on a finding of loss caused to Mr Heed by the carrying-out of the order.
Mr Heed originally asked for an order for an inquiry into damage, distress and inconvenience following negligent execution of the order by the applicants and those acting on their behalves.
It was agreed at the outset of the hearing before me that any application in this regard would follow on my judgment now. In fact in closing Mr O'Donoghue, on behalf of Mr Heed, indicated that no inquiry would in fact be pursued. In those circumstances, I say no more about it.
The search and freezing orders
Both the search and freezing order contained a penal notice in the following terms:
"If you, Mr Ian Michael Heed, disobey this order you may be held to be in contempt of court and may be imprisoned, fined or have your assets seized."
The freezing order contained the following provision:
"9(1) Unless paragraph (3) below applies, each respondent must by 4.30pm on the day on which this order is served and to the best of his, her or its ability, inform the applicants' solicitors of all of his, her or its assets worldwide, save for domestic chattels worth less than £1,000, whether in his, her or its own name or not, and whether solely or jointly owned, giving the value, location and details of all such assets."
Assets were widely defined and, even then, non-exhaustively. The definition included:
"21(c) Any right or power to deal with any property, whether through nominees, power of attorney, or by instructing another person who habitually obeys instructions; (d) any property held by or in the name of a third party or company who habitually obeys the respondent's instructions in relation to dealings with such property; (e) any bank account, whether in the name of the respondent or not and irrespective of whether its balance is zero, positive or negative, and in respect of which the respondent is an authorised signatory or in respect of which the respondent is a signatory on the mandate, or in respect of which the signatory habitually obeys the instruction of a respondent or over which the respondent exercises de facto control …; (f) any and all interests held, whether legally, beneficially or otherwise, in any company, partnership or joint venture."
The search order contained the following provisions:
"17(1) The respondent must immediately: (a) give the search party effective access to the computer and any other electronic data storage devices on the premises, providing all PIN numbers, user names, combination passwords, codes and any other information which may be necessary to give access to them to enable them to be searched. If they contain any listed items, the respondent must cause the listed items to be displayed so that they can be read and copied. The respondent must provide the applicants' solicitors with copies of all listed items contained in the computers and other electronic data storage devices. All reasonable steps shall be taken by the applicants and the applicants' solicitors to ensure that no damage is done to any computer or other electronic data storage device or data. The applicants and their representatives may not themselves search the respondent's computers or electronic data storage devices unless they have sufficient expertise to do so without damaging the respondent's systems; and (b) give the search party effective access to all computers, other electronic data storage devices, email accounts or secure or password-protected websites to which the respondent has access, including remote access, including without limitation the ianheed@btinternet. com email account. The respondent must provide all PIN numbers, user names, combinations, passwords, codes and any other information which may be necessary to give access to such computers, other electronic storage devices, email accounts and websites.
22. The respondent must immediately give the following information to the applicants' solicitors in the presence of the supervising solicitor so far as he is aware and to the best of his knowledge and belief: (a) the location of all the listed items in the custody of the respondent. This includes all listed items, whether situated on or off the premises and whether within or outside the jurisdiction which are in the respondent's power, possession or control; (b) the location of all computers and other electronic data storage devices on the premises or which are in the possession, power or control of the respondent, and (c) the address or location of any other premises or storage facilities occupied by or owned by the respondent and in respect of which the respondent has a right of access.
25. Until 4.30pm on the return date the respondent must not destroy, tamper with or part with possession, power, custody or control of any listed items, otherwise than in accordance with the terms of this order."
Electronic data storage devices were defined as "computers, mobile telephones or other electronic data storage devices". "Listed items" were defined as items listed in schedule C to the search order. Paragraph 2.7 of Schedule C contained the following:
"Any proprietary interest in any company, (iv) any...
To continue reading
Request your trial
-
(1) Sheikh Abdulrahman Khalid Bin Mahfouz and Others (Applicants/Claimants) v (1) Muhaned Farid Mahmoud El-Rashid (Respondent/First Defendant) (2) Noble Holdings Group Corporation (Second Defendant) (3) Ms Loreta Stakauskaite (Third Defendant)
...International Company SAL [2011] EWHC 1024 (Comm) at paragraphs 150 and 155 (per Christopher Clarke J.) and Holland and others v Fast Corporate Solutions and others [2014] EWHC 825 (QB) at paragraph 24 (per Carr J.) Failure to provide full details of what happened to the money 9 Paragraph 1......