Lewis v Eliades
| Jurisdiction | England & Wales |
| Judge | Lord Justice Potter,Lord Justice Carnwath,Lord Justice Jacob |
| Judgment Date | 08 December 2003 |
| Neutral Citation | [2003] EWCA Civ 1758 |
| Docket Number | Case No: A2/2003/0475/A |
| Court | Court of Appeal (Civil Division) |
| Date | 08 December 2003 |
[2003] EWCA Civ 1758
lord Justice Potter
Lord Justice Carnwath and Lord Justice Jacob
Case No: A2/2003/0475/A
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
(NELSON J)
QUEEN'S BENCH DIVISION
(Transcript of the Handed Down Judgment of Smith Bernal Wordwave Limited, 190 Fleet Street London EC4A 2AG Tel No: 020 7421 4040, Fax No: 020 7831 8838 Official Shorthand Writers to the Court)
Introduction
This is an appeal by the defendants against the judgment and order of Nelson J dated 28 February 2003 whereby he dismissed the defendants' appeal against an order of Master Whitaker dated 1 August 2002 awarding the claimant judgment against each of the defendants under CPR Part 24 in the sum of US $6,273,641 together with interest and costs to be assessed.
That summary judgment was entered by way of enforcement of a judgment obtained by the claimant against the defendants in proceedings in the United States District Court South District of New York which included a claim for treble damages under the United States Act entitled The Racketeer Influenced and Corrupt Organisations ("RICO") Act. The appeal concerns the scope and application of the Protection of Trading Interests Act 1980 ("the 1980 Act").
The procedural history
The claimant, who is the undisputed world heavyweight boxing champion and a resident of the United Kingdom was the defendant in the New York proceedings, having been sued by the defendants following the breakdown of their relationship with the claimant as his managers and promoters. Damages in the sum of US $7,273,641 were awarded to the claimant on his counterclaim for fraud, breach of fiduciary duty, breach of contract and racketeering contrary to the RICO Act.
The counterclaim was made under 12 different heads, six of which alleged racketeering under the RICO Act, the relevant section of which provides that:
"Any person injured in his business or property by reason of a violation of section 1962 of this chapter may sue therefore in any appropriate United States district court and shall recover threefold the damages he sustains and the cost of the suit, including a reasonable attorney's fee … "(18 U.S.C. 1964(c))
The RICO Act claims as pleaded in the New York action asserted that the claimant had been damaged "in an amount to be determined at trial and then trebled" and, under the heads of counterclaim alleging fraud and breach of fiduciary duty, damages and punitive damages were sought.
The trial of the action took place between 1 and 14 February 2002 before His Honour Judge Baer and a jury. The jury rendered their verdict in the form of answers to written questions posed for them by the judge following discussions with the parties. Their findings in favour of the claimant were that each of the defendants was liable for (i) US $6,821,159 as damages for breach of fiduciary duty, (ii) US $56,400 as damages for fraud, (iii) US $396,082 as damages for violation of the RICO Act. No punitive damages were awarded. The sum in respect of the RICO Act violations constituted the basic compensatory award under that Act, with no "threefold" multiplication applied.
On 15 March 2002 the trial judge issued his judgment awarding "Lennox Lewis judgment in the amount of US $7,273,641 as against Panix Promotions Ltd, Panix of the US Inc and Panos Eliades". That was the aggregate of the sums in (i)-(iii) above and contained no multiple element.
On 18 March 2002 the claimant commenced these proceedings to enforce the 15 March judgment against the defendants, applying for summary judgment on 22 March 2002.
On 25 March 2002 the claimant filed a motion in the New York court requesting the trebling of the US $396,082 figure for RICO Act damages so as to increase it to US $1,188,246 and for consequential amendment of the overall verdict to US $8,065,805.
On 17 April 2002 the defendants filed a cross-motion opposing the claimant's motion and seeking an order reducing the amount of the New York judgment to US $6,821,15They also filed a motion for judgment or a new trial. These motions were rejected by Judge Baer on 3 June 2002.
On 5 July 2002, Mr Burstein, the claimant's American attorney, made a witness statement in the English Part 24 proceedings in response to a contention by the first defendant that the judgment relied upon by the claimant was unenforceable by reason of s.5 of the 1980 Act. He stated:
"12. In order to avoid any PTIA [i.e. 1980 Act] problems, I will be obtaining a separate judgment for the statutory damages to which Mr Lewis is entitled on the basic RICO award by the jury, as these are simply not covered by the judgment already given by Judge Baer. I am due to file a formal request with the New York court for this separate judgment shortly."
Accordingly, on 17 July 2002 Mr Burstein filed in New York a further motion seeking amendment of the judgment of the RICO Act award of US $396,082 so as to treble it to US $1,188,246 with a further request that the total resultant award be bifurcated so that
"(1) The trebled portion of Lewis's RICO award is entered in a separate judgment in the amount of US $792,164 and (2) the remaining, non-trebled RICO portion of Lewis's award is entered in a separate judgment in the amount of US $7,273,641."
In those circumstances, on 1 August 2002, upon the hearing of the claimant's application, Master Whitaker gave judgment in the sum of US $6,273,641 with interest to be assessed, being the amount of the 15 March judgment less the sum of US $1million which reflected an agreed set-off in favour of the defendants for that amount.
S.5 of the 1980 Act provides as follows:
"(1) A judgment to which this section applies shall not be registered under Part II of the Administration of Justice Act 1920 or Part I of the Foreign Judgments (Reciprocal Enforcement) Act 1933 and no court in the United Kingdom shall entertain proceedings at common law for the recovery of any sum payable under such a judgment.
(2) This section applies to any judgment given by a court of an overseas country, being –
(a) a judgment for multiple damages within the meaning of subsection (3) below …
(3) In subsection (2)(a) above a judgment for multiple damages means a judgment for an amount arrived at by doubling, trebling or otherwise multiplying a sum assessed as compensation for the loss or damage sustained by the person in whose favour the judgment was given."
S.6 provides that:
"(1) This section applies where a court of an overseas country has given a judgment for multiple damages with the meaning of section 5(3) above against –
(a) a citizen of the United Kingdom …
(b) a body corporate incorporated in the United Kingdom …
(c) a person carrying on business in the United Kingdom,
(in this section referred to as a "qualifying defendant") and an amount on account of the damages has been paid by the qualifying defendant either to the party in whose favour the judgment was given or to another party who is entitled as against that qualifying defendant to contribution in respect of the damages.
(2) Subject to subsections (3) and (4) below the qualifying defendant shall be entitled to recover from the party in whose favour the judgment was given so much of the amount referred to in subsection (1) above as exceeds the part attributable to compensation; and that part shall be taken to be such part of the amount as bears to the whole of it the same proportion as the sum assessed by the court that gave the judgment as compensation for the loss or damage sustained by that party bears to the whole of the damages awarded to that party."
The decision of Master Whitaker
There was no dispute at the hearing before the Master that the 15 March judgment was final and conclusive for the purpose of enforcement, albeit it might be subject to an appeal. It was also conceded by the defendants that no part of that judgment contained any trebling or other multiplication of the basic damages award under each head claimed. However, the defendants argued that because, under the RICO Act claim, the claimant had an automatic entitlement to have his damages trebled, the entire judgment was precluded from registration and enforcement in the United Kingdom under s.5 of the 1980 Act. The Master rejected that argument. He commented upon the draconian effect of such a decision and took the view that s.5 should be construed strictly. He found that as the words in s.5(3) defined a judgment for multiple damages as "a judgment for an amount arrived at by doubling, trebling or otherwise multiplying the sum assessed as compensation", s.5 had no application to the facts of the case because the judgment of 15 March contained no such multiple element.
The decision of Nelson J
When the matter came before the judge, the defendants had changed their U.S. attorneys and retained Coudert Brothers LLP to act in their appeal against the New York decision. There was before Nelson J a letter from Coudert Brothers dated 19 September 2002 expressing the opinion that the motions of 25 March and 27 July affected the finality of the 15 March judgment. The claimant, in answer, served an expert report from a New York lawyer and academic, Steven E. Obus whose opinion was that the authorities relied upon by Coudert Brothers only related to the issue of whether a judgment was final for the purpose of ascertaining whether time had begun to run within which a notice of appeal had to be filed and...
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