John Edmund Paylor (as Trustee in Bankruptcy for Junie Omari Bowers) and Others v Junie Conrad Omari Bowers
| Jurisdiction | England & Wales |
| Judge | Kramer |
| Judgment Date | 18 February 2020 |
| Neutral Citation | [2020] EWHC 3900 (Ch) |
| Docket Number | Case No: CR-2017-009616 |
| Year | 2020 |
| Court | Chancery Division |
[2020] EWHC 3900 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
COMPANIES COURT
7 Rolls Building
Fetter Lane
London EC4A 1NL
HIS HONOUR JUDGE Kramer
(Sitting as a Judge of the High Court)
Case No: CR-2017-009616
Mr Harty appeared on behalf of the Claimants
MR J BOWERS appeared in person
MR A SKEENE appeared in person
Mr B Gallop appeared on behalf of the SFO
Judge This is an extemporary judgment and it is given after I have dealt with a judgment this morning refusing to adjourn the nine applications I have before me and having already given a judgment in relation to one of those applications which was to join the Serious Fraud Office into these proceedings as party, which I have refused for reasons given in my judgment at the time.
As regards the application to stay the proceedings generally, I have heard argument on and refused that application for which I gave brief reasons but said that I would give fuller reasons within my judgment. First, although this is somewhat repetitive given that I have covered some of this grounds in my earlier judgments, this is the substantial judgment which deals with the bulk of the other applications and therefore I give rather more background than I did when I dealt with the other applications.
Let us deal with the parties. The applicant, John Paylor, is the Trustee in Bankruptcy of Mr Bowers, one of the defendants, and Mr Skeene, another of the defendants. He is also the liquidator of Proximity Ventures Limited (“Proximity”) and brings the action in that capacity and also on behalf of the company. The applicant, Stephen Penn, is the liquidator of GFI Consultants Limited (“GFI”) and brings the action in that capacity and also on behalf of the company. They have been represented by Patrick Harty of Counsel. Junie Bowers and Andrew Skeene were each 50 per cent shareholders and Directors of Proximity and GFI. Michelle Windebank is the wife of Mr Bowers. Mr Bowers and Mr Skeene appear today to represent themselves, Ms Windebank although served has not taken part in today's application. Indeed, so far as there are applications by the defendants, they have been brought in the name of Mr Bowers and Mr Skeene only.
The evidence in this case is as follows. I have seen witness statements from Mr Junie Bowers dated 14 August 2019, 16 August 2019, 4 September 2019 and 17 December 2019 and then there was his additional statement from yesterday, or today, in support of the application to adjourn. In addition, there have been affidavits from Mr Paylor dated 23 August 2019 and 3 December 2019, a statement from Mr John Hughes, solicitor for Mr Paylor, dated 28 August 2019 and affidavits from Richard Stephen Penn dated 2 September 2019 and 9 December 2019. Also, Mr Hughes has made a second affidavit dated 26 September 2019 and I have read those affidavits.
There was also a witness statement from Ms Gleeson for the Serious Fraud Office which was provided in resistance to the application for the joinder of the Serious Fraud Office. I do not need to say much more about that since I refused joinder, although it did flush out one interesting fact in this case which possibly did not assist the defendants terribly as to the date upon which the SFO decided to charge the first and second defendants.
GFI was wound up by the High Court on 3 March 2014, Proximity on 15 October 2014 and Mr Paylor calculated that the deficit at the date of liquidation was £10,060,435.47. That was based on the proofs he has received. Mr Bowers and Mr Skeene were made bankrupt on 29 July 2014 and discharged on 4 January 2016.
On 18 December 2017 the claimants issues claims against the defendants seeking, amongst other relief, recovery of the £10,060,435.47. They alleged against Mr Bowers and Mr Skeene known participation in fraudulent trading, fraudulent breach of fiduciary duties, a dishonest assistance in such frauds, known receipt of fraudulently obtained money and conspiracy. The claim against Ms Windebank was in respect of a transaction at an under-value and for the known receipt of the illicitly obtained monies. In the this action, worldwide freezing orders have been made against the defendants which are still in force.
The skeleton arguments bear a large number of case numbers and it is as well that I just identify what they are. There is a Part 7 application, BL-2017-00641. That seems to have been issued when the original without notice freezing order was applied for. The proceedings themselves, that is to say the claim form and Particulars of Claim, carry the number CR-2017-009616, so the main proceedings are the 9616 proceedings and nothing further has been produced, such as orders, under the 641 number.
There are then four sets of insolvency applications. BR-2014-004985 is the insolvency proceedings affecting Mr Bowers and also his wife, Ms Windebank. CR-2013-009371 are the proceedings relating to the liquidation of GFI Consultants Limited. CR-2013-011296 are the proceedings relating to the liquidation of Proximity Ventures Limited and BR-2014-004995 is an application under section 366 of the Insolvency Act 1986 against Mr Skeene. So, there were five applications and cases going on in total. This has relevance later on.
The claim issued on 18 December 2017 was settled by deed of settlement and release dated 12 November 2018 which was subsequently varied by deed of variation on 18 April 2019. The claimants and defendants were all parties to these deeds. That includes Ms Windebank.
The original settlement agreement provided for the defendants to pay the applicants £6 million by instalments payments, upon payment of which they were to be discharged from any liabilities arising from the claims against them, the freezing orders to be discharged and given protection against claims which may have been brought against various family members and associated parties who were identified in the settlement agreement by type.
The agreement further provided for the defendants to give disclosure in relation to their assets to an independent solicitor jointly instructed by the parties who was to provide a report as to whether proper disclosure had been given. They also agreed that the decision of the independent solicitor would be final and binding as between them.
There were default provisions within the agreement which provided that if the defendants failed to pay the agreed sums when due or they were in default of their disclosure obligations they would consent to judgment being entered against them in the full sum of £10,060,435 less any sums that had already been paid and interest at an agreed rate. A draft of the order that was to be made was appended to the settlement agreement. It provided, apart from the judgment, for there to be costs of the application alone, so on judgment no costs of the action were to be recovered.
There was a carve-out for Ms Windebank in the original agreement in that her liability was to be released following payment of the first £1 million and confirmation from the independent solicitor that she complied with her disclosure obligations. Tomlin orders were entered into on 21, 22 November 2018 and 4 January 2019, that was two on the 21st, two on the 22nd and one on 4 January, staying the five proceedings which I have identified with liberty to apply to enforce.
The defendants made payments of £1.45 million under the original settlement agreement, whereafter the terms of payment were the subject of a deed of variation, so that instead of paying by instalments they were to repay the remaining £4.55 million by 31 July 2019 and the claimants were to be entitled to the documents lodged with the independent solicitor upon request, ie without default. The carve-out for Ms Windebank was removed. I shall refer in greater detail to the specific terms of the deed when this becomes relevant to the applications with which I have to deal.
It is unnecessary to set out the detail of the defendants' alleged behaviour which gave rise to the claim in view of the settlement. In essence, the claimants allege that Mr Bowers and Mr Skeene were operating a Ponzi scheme. The first which I shall refer to, and have referred to elsewhere as “the ForEx Scheme” operated from 2009 to 2012. They invited investors to subscribe to a fund which it was said...
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