Michael Ashley v Tony Michael Jimenez
| Jurisdiction | England & Wales |
| Judge | Chief Master Marsh |
| Judgment Date | 16 January 2019 |
| Neutral Citation | [2019] EWHC 17 (Ch) |
| Docket Number | Case No: HC-2017-000156 |
| Court | Chancery Division |
| Date | 16 January 2019 |
[2019] EWHC 17 (Ch)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS
OF ENGLAND AND WALES
BUSINESS LIST (ChD)
Rolls Building, Fetter Lane,
London EC4A 1NL
Chief Master Marsh
Case No: HC-2017-000156
Richard Lissack QC, James Cutress QC and Joseph Farmer (instructed by Lawrence Stephens Solicitors) for the Claimants
Adam Johnson QC (of Herbert Smith Freehills LLP) for the Defendants
Hearing dates: 2 and 3 October 2018
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
This is my judgment dealing with three applications issued by the defendants that were heard together on 2 and 3 October 2018. They concern whether service of the claim has been validly effected on the defendants and whether this court has jurisdiction to hear the claim.
The claimants (“Mr Ashley” and “St James”) allege that £3 million has been misappropriated by the defendants (“Mr Jimenez” and “South Horizon”). In summary the claimants say that:
(1) Mr Ashley and Mr Jimenez orally agreed in early 2008 that upon payment of the euro equivalent of £3 million, Mr Ashley would acquire, via a shareholding in Les Bordes (Cyprus) Limited, a holding of approximately 5% in the ownership of a golf course in France called Les Bordes and that the shares would be registered in the name of St James.
(2) On 13 May 2008, Mr Ashley instructed his bank to transfer the requisite sum to the bank account specified by Mr Jimenez and the transfer was made. In breach of the agreement, the shares were never registered in the name of St James.
(3) The agreement and/or the payment were induced by fraudulent misrepresentations made by Mr Jimenez. The claimants say that Mr Jimenez knew South Horizon did not hold the shares and was not in a position to transfer, or procure transfer, upon payment of the agreed sum and that, in representing that South Horizon held the shares, or could procure transfer, Mr Jimenez acted dishonestly.
(4) In the alternative, the payment of £3 million gave rise to a Quistclose trust because the payment was made for an agreed purpose that only permitted use of the money for securing transfer of the shares.
The claimants seek remedies that include:
(1) Recission of the agreement and/or restitution of the £3 million.
(2) Damages in the sum of £3 million for breach of contract and/or in deceit and/or under the Misrepresentation Act 1967 and/or equitable relief for dishonest assistance or knowing receipt.
(3) Repayment of the £3 million in vindication of their rights under the Quistclose trust or equitable compensation for breach of trust.
The claim was issued on 19 January 2017. Service was effected on South Horizon on 22 February 2017. The claimants initially relied upon service of the claim on Mr Jimenez at an address in Oxfordshire in early 2017. However, they obtained an order on 26 May 2017 extending the time for service and giving permission to serve Mr Jimenez out of the jurisdiction. He was served in the UAE on 14 July 2017.
The three applications comprise:
(1) An application by South Horizon issued on 24 March 2017 to set aside the claim form and service and for a declaration that the court has no jurisdiction to hear the claim. South Horizon is domiciled in Cyprus and therefore Regulation (EU) No.1215/2012 (“BRR”) applies.
(2) An application by Mr Jimenez issued on 18 August 2017 to set aside the claim form and service and for a declaration that the court has no jurisdiction to hear the claim on the ground that he is not resident in the jurisdiction and the claimants are unable to show that permission to serve out of the jurisdiction should be granted.
(3) An application made by both defendants issued on 12 April 2018 for similar relief relying, for the first time, upon clause 18 of an agreement dated 17 September 2008 (“the 17 September Agreement”) under which the defendants say disputes concerning the payment of £3 million are to be referred to the exclusive jurisdiction of the UAE courts.
The applications have some unusual features. As will be clear from the date of issue of the claim, the dates of the applications and the dates of the hearing, the process leading up to the hearing has been lengthy. Between them, the parties have produced thirty witness statements relating to the applications in various phases. 17 witness statements have been filed on behalf of the defendants and 13 witness statements have been filed on behalf of the claimants. More significantly, however, the claimants challenge the authenticity of the 17 September Agreement. They say that Mr Ashley's signature on it is a forgery. They rely upon a report from Mr Robert Radley, an expert handwriting examiner, dated 16 August 2018. Service of Mr Radley's report led the defendants to serve a translation of a report they had obtained previously in February 2018, prior to authenticity being made an issue, from Mr Ahmed Obaid Al Bah, who is registered as an expert at the UAE Ministry of Justice and at the courts in Dubai. Mr Radley has provided observations about Mr Al Bah's report in an addendum report dated 3 September 2018. The approach the court should adopt where the document purporting to provide exclusive jurisdiction to a foreign court is said to be a forgery occupied a significant portion of the hearing.
The parties have, very helpfully, agreed a list of issues the court must determine and a chronology. The issues for the court are:
(1) Have Mr Jimenez and South Horizon shown a sufficient case that the exclusive jurisdiction clause in favour of the UAE courts at paragraph 18 of the 17 September Agreement was executed and is to be given effect, and the proceedings stayed or dismissed as regards Mr Jimenez and/or South Horizon?
(2) If not, then on Mr Ashley and St James' application to serve Mr Jimenez out of the jurisdiction:
(a) Have the claimants shown a serious issue to be tried on the merits of their claims?
(b) Have they shown a good arguable case that:
(i) Under PD 6B 3.1(3) Mr Jimenez is a necessary or proper party to a claim against South Horizon if the court has jurisdiction against South Horizon?
(ii) Under PD 6B 3.1(4A), insofar as any claims against Mr Jimenez are shown to fall within sub-paragraphs 3.1 (6), (9), ( 12), (15) or (16), further claims are made against Mr Jimenez which arise out of the same or closely connected facts?
(iii) Under PD 6B 3.1(6) they have a claim or claims in respect of a contract which was (a) made within the jurisdiction and/or (b) governed by English law?
(iv) Under PD 6B 3.1(9) they have a claim or claims in tort where (a) the damage was sustained within the jurisdiction and/or (b) the damage sustained results from an act committed within the jurisdiction?
(v) Under PD 6B 3.1(12) their claim or claims made in respect of the Quistclose trust is or are in respect of a trust created orally and evidenced in writing, and which is governed by the law of England and Wales?
(vi) Under PD 6B 3.1(15) they have claims against Mr Jimenez as constructive trustee or as trustee of a resulting trust which arise out of acts committed or events occurring within the jurisdiction?
(vii) Under PD 6B 3.1(16) they have a claim for restitution (a) where Mr Jimenez' liability arises out of acts committed within the jurisdiction or (b) the claim or claims are governed by the law of England and Wales?
(c) Have Mr Ashley and St James shown that England is clearly the appropriate forum for the trial of the claim?
(3) As regards South Horizon, have the claimants shown:
(a) Under BRR Art 7(2) a good arguable case as regards their claim for breach of trust that the “… place where the harmful event occurred” (meaning either the place where the damage occurred or the place where the event giving rise to the damage occurred) was England and Wales?
(b) Under BRR Art 7(6) is there a good arguable case that any of their claims relating to the Quistclose trust claims are claims brought against “… the trustee … of a trust … created orally and evidenced in writing” and which is domiciled in England and Wales?
The 17 September Agreement did not surface until long after the first application was made in March 2017 and it will be necessary to summarise the chronology of events that followed service of the claim. As already noted, the application based on that agreement was made more than a year after South Horizon's application was issued in March 2017 and 8 months after Mr Jimenez' application was issued in August 2017.
Mr Ashley is a well-known businessman and investor with interests in Newcastle United Football Club (“NUFC”). St James is his property investment company. Mr Jimenez is also a well-known businessman and property investor and South Horizon is a property consultancy company domiciled in Cyprus that is or was associated with him. South Horizon was incorporated in Cyprus on 31 December 2007. That date is of some importance and only emerged after the evidence was complete. Mr Ashley and Mr Jimenez had business dealings together in 2007 and 2008 and Mr Jimenez became a director and vice-president of NUFC in January 2008. He resigned on 9 October 2008. The date and place of the first occasion when they discussed the possibility of Mr Ashley investing in two property projects being promoted by Mr Jimenez is disputed. Mr Jimenez puts the date at 26 September 2007 and says they met in New York. He says they discussed on that occasion the possibility of Mr Jimenez using his contacts in the Middle East to produce a buyer for NUFC and at the same meeting they discussed two investment opportunities, one being Les...
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