Joseph Ackerman v Naomi Ackerman and Others

JurisdictionEngland & Wales
CourtChancery Division
JudgeMr Justice Roth
Judgment Date12 Aug 2011
Neutral Citation[2011] EWHC 2183 (Ch)
Docket NumberCase No: HC11C01361

[2011] EWHC 2183 (Ch)



Royal Courts of Justice

Strand, London, WC2A 2LL


Mr Justice Roth

Case No: HC11C01361

Joseph Ackerman
(1) Naomi Ackerman
(2) Barry Ackerman
(3) Andrew Thornhill
(4) Bana One Limited

Mr C Orr QC (instructed by Enyo Law LLP) for the Claimant.

Mr J Wardell QC and Ms E Murphy (instructed by Berwin Leighton Paisner LLP) for the 1 st, 2 nd and 4 th Defendants.

3 rd Defendant was not present and was not represented.

Hearing dates: 28 & 29 July, 1 August 2011

Mr Justice Roth

This is an application for security for costs. It is made in litigation between, in effect, two camps of the Ackerman family and is one of several applications that I have heard in those proceedings. The litigation is being conducted with all the acrimony, mistrust and intransigence that can sadly be a feature of proceedings of that kind.



The claimant, Mr Joseph Ackerman ("JA"), and his brother, Mr Jack Ackerman, together built up a very successful business of property investment and development. The properties were largely held through a series of companies, but a few were owned personally. The business as a whole has been referred to as "the Ackerman Group" ("the Group"). The brothers also established a charity, Delapage Ltd ("Delapage"), which made substantial charitable donations over the years and which has two non-charitable subsidiaries, Haysport Ltd and Twinsectra Ltd, that have engaged in property investments. It is not in dispute that until the crash in the property market a few years ago, JA was a very wealthy man. JA has four children (all daughters) and his brother had five children.


In 1989, Mr Jack Ackerman died and his interests passed to his widow, Mrs Naomi Ackerman ("NA"). In the following years, the affairs of the Group were managed by JA with little involvement by NA. In 1997, JA and NA together established the Superetto group, which comprises a holding company (Superetto Ltd) and nine subsidiaries, one for the benefit of each of their children. In 2003, NA's uncle established the NOF trust, which is a Gibraltar trust and which, it is now accepted by JA, is for the benefit of NA and her children as well as for himself and his children. As well as the Group itself, JA effectively managed the Superetto group and Delapage. The extent of his involvement with the trustees in the management of the affairs of the NOF trust is disputed.


By 2006 it was clear that NA no longer wished her interests and those of her children to be managed by JA. Accordingly, there needed to be a parting of the ways. By this stage, relations between JA, closely supported by his son-in-law Mr Danny Wulwick ("DW"), and NA, supported by her son, Mr Barry Ackerman ("BA"), had severely deteriorated. It is neither necessary nor appropriate in this judgment to give a full account of what then happened, and many of the details are in any event disputed. What follows is therefore a simplified summary. It is sufficient to say that the parties eventually reached agreement that Mr Andrew Thornhill QC, a tax barrister, should be engaged to give effect to a division of the Group between them so as to achieve a demerger of their interests. It appears that negotiation of the terms of the agreement were prolonged and contentious. NA and her side claimed that JA was removing assets for his own benefit, while JA contended that NA was also removing assets; and there were disputes as to the way various companies had been managed (at least since 2002) by JA. An initial agreement, entitled "An Agreed Way Forward" was signed in 2008, but was then replaced by a document called "A Revised Further Agreed Way Forward" dated 25 June 2009 which is now the governing agreement ("the Agreement"). Mr Thornhill is a party to the Agreement along with JA, NA, DW, BA and various jointly owned and Group companies.


The Agreement is detailed and gives extensive authority to Mr Thornhill to determine a lottery, allocating various companies and properties as between JA and NA so as to provide for a fair division of their "Respective Interests" (as defined), including the making of adjustment for so-called "Removed Assets." He was also given a power of attorney by the Ackerman parties to act in their names as he "may in his absolute discretion think fit to secure the purposes" of the Agreement. Under the Agreement, Mr Thornhill was to issue a "Provisional Adjustment Report" setting out how he had decided to divide the Respective Interests as between JA and NA, making provisional adjustments in terms of cash payments, property or share transfers. However, for a period of up to a year after the Provisional Adjustment Report, Mr Thornhill could make revised or fresh adjustments that he would set out in his "Final Adjustment Report" that would take effect on the so-called "End Date". The position thus arrived at as at the End Date was (subject to certain exceptions) expressed to be final and binding on the Ackerman parties in full and final settlement of their disputes concerning Removed Assets and other depletion of assets through the conduct of the affairs of the Group, the Superetto group.


Already by 2009, and following the collapse in the property market, most of the Group's property investments had gone sour and many of the companies were severely indebted. In the course of his review process, in 2009, Mr Thornhill had directed the transfer to NA of the management of most of the properties held in the joint names of JA and NA. Then on 5 January 2011, Mr Thornhill issued his Provisional Adjustment Report ("the Ackerman Report"). Mr Thornhill recorded in his report that "[t]he animosity and lack of cooperation between the two sides has been such as to cause enormous delay." Mr Thornhill determined that £20.33 million was owed by JA to NA and £9 million was owed to the Delapage subsidiaries that must come either from "jointly-owned companies taken by JA or from JA himself." He then concluded that a 50/50 split of jointly-owned assets with adjustments either way, in the manner envisaged by the Agreement, was not possible. He directed that a new company should be formed into which the shares in the jointly owned Group companies and the Superetto subsidiaries should pass, and that JA's interests in the jointly owned properties and certain other companies should be transferred to NA. Mr Thornhill stated: "I fully appreciate that a resolution of matters along these lines was not anticipated in the [Agreement]."


It is no exaggeration to say that JA was horrified by the Ackerman Report and what Mr Thornhill had done. He found that the entirety of the assets of the Group and the Superetto group were passing to NA. It is submitted on his behalf that the consequence of the Ackerman Report and Mr Thornhill's actions have been "to deprive JA of all his interest in the family business to which he had devoted his whole life." He contends that the Ackerman Report goes beyond the terms of what was permitted by the Agreement. Further, he was very concerned to learn that Mr Thornhill had been communicating with NA and her side prior to the issue of his report, and that pursuant to his power of attorney Mr Thornhill had removed assets into a new company established for that purpose prior to 31 December 2010, and thus before the issue of his report.

The proceedings


JA accordingly commenced proceedings on 20 April 2011, alleging a series of breaches of the Agreement as regards the scope of what Mr Thornhill was permitted to do, the procedure required and also a failure by Mr Thornhill to act fairly, impartially and in an unbiased manner. Many allegations of breach are pleaded and for present purposes I refer to only one. By para 47 of the Particulars of Claim, it is alleged:

"On the true construction of the Agreement, Mr Thornhill was not empowered to effectively dispossess JA's children of their beneficial interests in the shares in the Superetto group companies, which were not to be allocated pursuant to the Lottery but which were rather to be allocated in accordance with the trust arrangements already referred to…."


JA contends that by reason of the various breaches and their fundamental nature, the Agreement is discharged and that insofar as NA, BA or the new company makes any profits by reason of the consequential transfers to them, they must account for those profits.


The claim is therefore brought against Mr Thornhill and NA, BA and the new company to which I have referred at paragraph 6 above. NA, BA and the company are jointly represented by Berwin Leighton Paisner and have for convenience been referred to in the present application as "the BLP defendants." Mr Thornhill is separately represented. By their Defence, the BLP defendants deny all the breaches alleged against Mr Thornhill and thus that the Agreement has been discharged or that they are under any duty to account. They admit that Mr Thornhill was under a duty to act fairly, impartially and in an unbiased manner. NA and BA have also issued a Part 20 claim against Mr Thornhill in the event that their defence is unsuccessful.


By order of Newey J made on 4 May 2011, there is to be an expedited trial, which has now been fixed to commence in the week of 21 November 2011. It is therefore not an option on this security application to consider the provision of security up to only a certain stage in the proceedings (e.g. the conclusion of disclosure), as in some other cases. But it is relevant to have regard to the scope of the trial. It is not an appeal from Mr Thornhill's determination in the Ackerman Report as to the Removed Assets or the extent of adjustment owed by one side to the other, and thus does not involve an examination of all that JA (and DW) are alleged by NA (and BA) to have done (or failed to...

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    • 11 Junio 2020 order for costs against him.” Case law 36 This provision has been the subject of a number of decisions. In Ackerman v Ackerman [2011] EWHC 2183 (Ch), the claimant and his late brother had run a successful property business together (“the Group”). He brought proceedings against his broth......

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