JEB Recoveries Llp v Judah Eleazar Binstock (Defendant/Applicant)
| Jurisdiction | England & Wales |
| Judge | HHJ Simon Barker |
| Judgment Date | 21 April 2015 |
| Neutral Citation | [2015] EWHC 1063 (Ch) |
| Court | Chancery Division |
| Docket Number | Case No. HC 2014 000946 |
| Date | 21 April 2015 |
[2015] EWHC 1063 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
His Honour Judge Simon Barker QC (sitting as a Judge of the High Court)
Case No. HC 2014 000946
Representation:
Mr Mark Hardy, a limited partner in the Claimant, with the permission of the Court for the Claimant / Respondent
Mr Nicholas Vineall QC and Mr Caley Wright instructed by Harcus Sinclair for the Defendant / Applicant
Hearing Date: 25 March 2015
JUDGMENT (No. 2)
HHJ Simon Barker QC:
This Application
This application concerns the surviving claim of JEB Recoveries LLP (respectively 'the Claim' and 'JEB') against Mr Judah Eleazar Binstock. On 18 March 2015, I upheld Mr Binstock's jurisdictional challenge to three other claims raised within the same action, which had been commenced on 28 October 2014, and declared that the court has no jurisdiction to try those claims. I also held that the Claim is justiciable in this jurisdiction.
The Claim concerns an alleged debt said to be due under an alleged contract for services said to have been made in late February 2010, as part of Mr Binstock's arrangements to put his affairs in order in view of his age (then 81 years), and performed, at least in part and in so far as possible, over the period March to October 2010. The essence of the alleged contract is that Mr Binstock engaged Mr Peter Frederick Wilson to identify and acquire a listed company with no trading history but with cash into which Mr Binstock could transfer his business interests by way of reverse takeover. Work is said to have been done by Mr Wilson pursuant to the contract but, through no failure on Mr Wilson's part, no reverse takeover occurred.
The consideration is alleged to have been agreed and quantified in part by acknowledgment of an alleged existing debt of £10million said to have been due under a different alleged contract (which I have held is not justiciable in this jurisdiction) and in part as a monthly retainer of €10,000 plus reimbursement of expenses. There is also a claim for £2million or such sum as the court thinks just as aggravated damages; as to this, and contrary to CPR 16.4(1)(c), there is no particularisation of the grounds on which such damages are claimed. By the Particulars of Claim, JEB alleges and acknowledges that €50,000 and a further €7,000 has been paid to Mr Wilson, whether relating to the retainer or to expenses is not stated. The relief sought under the Particulars of Claim is damages of £10million plus €131,513.90 (presumably after giving credit for €57,000) as allegedly invoiced plus aggravated damages of up to £2million.
The Claim is or, in the events which have happened, was actionable at the suit of Mr Wilson.
In March 2014, Mr Wilson, Mr Mark Gregory Hardy and Mr Michael Richard Stannard formed JEB. On 30 April 2014, Mr Wilson, Mr Hardy and Mr Stannard executed individual assignments of rights as defined therein ('the Rights') for £1. The assignments are in common form. Focussing on the assignment executed by Mr Wilson as assignor ('the Assignment'), the Rights are defined as meaning:
"… any and all causes of action, whether previously asserted or not, debts claimed or unclaimed, and any and all other rights which the Assignor may have
(a) generally against [Mr Binstock] … and any company, trust or other separate legal personae with which [Mr Binstock] has at any time represented to the Assignor, his agents and assigns, that he is and/or was connected to, in relation to any and all matters that involved or may have involved dealings directly or indirectly.
(b) generally against Josianne Rinaldo Binstock 1… and any company, trust or other separate legal personae with which [Mr Binstock] has at any time represented to the Assignor, his agents and assigns, that she is and/or was connected to, in relation to any and all matters that involved or may have involved dealings directly or indirectly, with the Assignor".
As is apparent, the Assignment includes debts of Mr Binstock and his wife to Mr Wilson.
As with the other assignors, Mr Wilson undertook to pass any monies received directly or indirectly from Mr Binstock or his wife to JEB. He also undertook to assist JEB in pursuing recovery of monies due in respect of the Rights by providing information upon request. JEB's sole obligation is an undertaking:
" …to report at reasonable intervals to [Mr Wilson] as to the progress of [JEB's] attempts to claim in respect of the Rights in such reasonable form as may be agreed between [Mr Wilson and JEB]".
In a witness statement dated 19 March 2015, Mr Hardy states that Mr Wilson asked for his help in relation to Mr Binstock's failure to pay invoices and other breaches of contract; that Mr Stannard had approached him in relation to challenging the fees of insolvency practitioners and interference by Mr Binstock in his, Mr Stannard's, family's interest under a trust; and, that they had agreed that joint or collaborative action was:
"the only way that we could see to protect ourselves against [Mr Binstock's] further threats against us and members of our families if any one of us tried to 'go it alone'.
Agreement was reached that we should form a UK llp and assign to it the unpaid debts that had been invoiced to [Mr Binstock], and all other claims for damage he had caused us …".
By this application, Mr Binstock contends that the Claim should be struck out as an abuse of the process on the grounds that it is champertous.
Champerty
Champerty is the support of litigation by a stranger to the litigation for a financial interest in the outcome, usually a share thereof. The financial interest results in champerty being referred to as an aggravated form of maintenance.
In a lecture entitled "From Barretry, Maitenance and Champerty to Litigation Funding", delivered on 8 May 2013, Lord Neuberger of Abbotsbury traced the history of objections to all forms of maintenance of suit back to ancient times and considered the changing attitude of the state and the courts as third party funding of litigation has evolved in recent times.
Until 50 years ago champerty was a crime and a tort. Since 1967, the prohibition of champerty has survived, as a matter of public policy, in order to aid the protection of the rule of law and the due administration of justice. Lord Neuberger identified as the broad policy rationale for the prohibition of maintenance protection of the integrity of the legal process, a primary ingredient of which is equality before the law.
Equality before the law is a fundamental tenet of the English legal system which, in this century, has been expressly recognised as a procedural obligation of the courts by incorporation as an element of the overriding objective ("ensuring that the parties are on an equal footing", CPR 1.1(2)(a)); in other words, it is at the core of and governs the approach of the courts to civil litigation.
Lord Neuberger observed that public policy, which is the bedrock of maintenance, is never static. He revived a question raised by Jeremy Bentham: why should individuals have to bring claims at their own expense? Lord Neuberger's answer included the observations that one of the fundamental principles underpinning any self-respecting legal system is that rights must be capable of enforcement, and that it is ironic that the original medieval rationale for the prohibition (protecting the weak and the poor from exploitation by the rich and powerful) now has the opposite effect of affording wealth a monopoly of justice against poverty.
Notable developments referred to by Lord Neuberger as making inroads into the prohibition against maintenance include: the introduction and development of legal aid after World War II and over the latter half of the last century, albeit that, in this century, the restrictions to the scope of legal aid have been significant; the advances since the 1990s made by lawyer driven funding arrangements, specifically through conditional fee agreements ('CFAs') which have been subject to curtailment or reform in this century; the impact on access to justice resulting from the adoption, in this century, through statute of the European Convention on Human Rights; and, most recently, by statutory instrument in 2013, damage-based agreements ('DBAs') i.e. contingency fee agreements which enable lawyers to share in the fruits of litigation with their clients as the reward for successful representation.
Lord Neuberger also drew attention to the decision of the Court of Appeal in R (Factortame Ltd) v Secretary of State for Transport, Local Government and the Regions (No 8) [2002] EWCA Civ 932, where, at paragraph 36, giving the judgment of the court, Lord Phillips MR (as he then was) said:
"Where the law expressly restricts the circumstances in which agreements in support of litigation are lawful, this provides a powerful indication of the limits of public policy in analogous situations. Where this is not the case, then we believe one must today look at the facts of the particular case and consider whether those facts suggest that the agreement in question might tempt the allegedly champertous maintainer for his personal gain to inflame the damages, to suppress the evidence, to suborn the witnesses, or otherwise undermine the ends of justice".
Thus, the vice or concern underlying the prohibition of champerty is that the allegedly champertous maintainer might be tempted to corrupt or undermine the legal process.
It is also relevant to bear in mind, as Lord Neuberger pointed out by reference to Arkin v Borchard Lines Ltd [2005] 1 WLR 3055, that a natural consequence of opening the doors to maintenance may be that a professional litigation funder...
To continue reading
Request your trial
-
Ndole Assets Ltd v Designer M&E Services UK Ltd (Defendant/Applicant)
...of a bare cause of action void, and that the assignee had no legitimate interest in the original claim. By contrast, in JEB Recoveries LLP v Judah Binstock [2015] EWHC 1063 (Ch), a special purpose vehicle was set up by four people who had claims against a Mr Binstock. That claim was not dis......
-
Recovery Partners GP Ltd Revoker LLP v Mr Irakli Rukhadze
...of a company set up a company to retain a valuable claim when they sold the rest of the business, in JEB Recoveries LLP v Binstock [2015] EWHC 1063 (Ch) an SPV was set up by four people who had claims against Mr Binstock …. The distinction, and the reason for failure in Trendtex comes down......
-
POA Recovery Pte Ltd v Yau Kwok Seng
...International [2006] 2 CLC 1043 (refd) Jarguh Sawit, The [1997] 3 SLR(R) 829; [1998] 1 SLR 648 (folld) JEB Recoveries LLP v Binstock [2015] EWHC 1063 (Ch) (refd) Law Society of Singapore v Kurubalan s/o Manickam Rengaraju [2013] 4 SLR 91 (refd) Liberty Sky Investments Ltd v Aesthetic Medica......
-
POA Recovery Pte Ltd v Yau Kwok Seng and others and another appeal
...for the purpose of access to the court in respect of a single claim. A similar situation arose in JEB Recoveries LLP v Binstock [2015] EWHC 1063 (Ch). In that case, three individuals, Mr Wilson, Mr Hardy and Mr Stannard, set up JEB Recoveries LLP (“JEB Recoveries”) and assigned to it their ......
-
The Trendtex Principle in Australian Law: Context and Recent Developments
...the support of litigation by a stranger in return for a share of the proceeds.”. See also Jeb Recoveries LLP v Judah Eleazar Binstock [2015] EWHC 1063 (Ch) [9] (Simon Barker QC); Body Corporate 326421 v Auckland Council [2015] NZHC 862 [274] (Gilbert J). 8As was eloquently expressed by coun......