Murli Mirchandani v Alka Gheewala
| Jurisdiction | England & Wales |
| Judge | Mr Justice Garnham |
| Judgment Date | 02 July 2020 |
| Neutral Citation | [2020] EWHC 1742 (QB) |
| Court | Queen's Bench Division |
| Docket Number | Case No: QB-2020-000982 |
| Date | 02 July 2020 |
[2020] EWHC 1742 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Justice Garnham
Case No: QB-2020-000982
and
Mr Geraint Jones QC (instructed by Rainer Hughes) for the Applicant
Mr Nigel Hood (instructed by Thakrar & Co Solicitors) for the First Respondent
Mr Paul Fisher (instructed by Metis Law) for the 2nd Respondent
Hearing dates: 10th June 2020
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.
Introduction
There are three applications before the Court. First, an application dated 29 April 2020, made by Mr Mirchandani, to discharge a number of freezing orders made by the Court in the summer of 2019 and in March 2020; second, an application by Augusta Ventures Limited, also dated 29 April 2020, seeking to set aside the order of Spencer J, dated 21 April 2020; third an application by Ms Alka Gheewala dated 4 June 2020 which seeks an uplift in the sum set out in the order of 19 August 2019.
The factual history of this case is complicated and needs to be set out in a little detail.
The History
In about 1999 or 2000, Mr Murli Mirchandani, the applicant in the first application, was the victim of a very substantial fraud perpetrated by a man by the name of Ketan Somaia, the former husband of Ms Alka Gheewala, the first respondent to the first application.
In June 2014, Mr Mirchandani brought a private prosecution against Mr Somaia which culminated in Mr Somaia's conviction on 9 counts of fraud. He was sentenced to 8 years imprisonment. On 12 January 2016, in subsequent confiscation proceedings, Mr Mirchandani secured an order (granted by His Honour Judge Hone QC) that Mr Somaia should pay approximately £18 million to Mr Mirchandani by way of compensation (“the Compensation Order”), enforceable against Mr Somaia's assets, and £20 million by way of a confiscation order (“the Confiscation Order”). Those assets included a 50% beneficial interest in Flat 71, 25 Porchester Place, London, W2 2PF (“the PP Flat”).
On 12 October 2016, an Enforcement Receiver (“the Receiver”), Ms Christine Bartlett, was appointed to enforce both the Confiscation Order and Compensation Order.
During 2016 to 2017 Mr Mirchandani pursued civil proceedings against Ms Gheewala claiming that her 50% share in the PP flat was a “tainted gift”, caught by section 74 of the Criminal Justice Act 1988 (“ CJA Proceedings”). It was argued that that share should be available to the Receiver in satisfaction of both the Compensation Order and the Confiscation Order. That action came on before Jefford J, who rejected the claim ( Re Somaia [2017] EWHC 2554 (QB)). On 9 November 2017, she ordered an interim payment on account of costs, in the sum of £125,844, to be paid by Mr Mirchandani to Ms Gheewala by 23 November 2017. That sum was not paid, and Ms Gheewala applied for an unless order.
Choudhury J made that order. Choudhury J's judgment, at Mirchandani v Somaia [2017] EWHC 3766 (QB), included the following passage responding to the contention made by Mr Mirchandani that he simply could not pay:
“30…There are a number of real concerns about that evidence and that assertion, first of all this contention was not made before Mrs Justice Jefford. Had there been any real difficulty anticipated about payments or the ability to pay, Mr Mirchandani would surely have instructed his counsel on that occasion to make those points and to apply for a longer time to pay than the 14 days that was ordered. It does not appear that there were any such submissions. Secondly, if the lack of liquidity has just arisen, since the 9th November, there is no sense of that at all from the evidence. Thirdly, I note the background that Mr Mirchandani has been able to expend very large sums of money on instructing lawyers and leading counsel, these sums appear to have run into the millions. Whilst sums have been recovered from central funds there is no credible evidence before me that there was any substantial difficulty in raising those amounts to pay in the first place.
31. The impression one gets from some of the material before this Court is not just that Mr Mirchandani is a man of means, but he is a man of very substantial means. But most crucially the assertion made by Mr Mirchandani in his statement is not backed up with a shred of evidence. There are no bank statements, no accountant's reports, no accounts of any description of his various companies, not one single document that this Court would expect to see when there is effectively an application to extend time for payment following a Court Order. There are various vague references to attempts to secure litigation funding, once again we see that these are not evidenced, no correspondence is attached, nothing to indicate when these discussions took place or anything of that nature. The test is as I have said, the Court has to be satisfied on the balance of probabilities. Mr Mirchandani's evidence falls short of that by a very considerable margin.”
On 9 January 2018, the outstanding sum was paid to Ms Gheewala's solicitors from the bank account of Sadin Associates Inc, a Panamanian company, apparently owned or controlled by Mr Mirchandani's brother, through a Swiss bank account. Ms Gheewala's solicitors returned that money, not being satisfied that the payment complied with money laundering regulations. Mr Mirchandani made the payment on account through his solicitors on 26 January 2018.
On 25 May 2018, Jefford J determined that both Mr Mirchandani and Ms Gheewala's costs should be paid out of central funds pursuant to section 17 of the Prosecution of Offences Act 1985. However, following an intervention from the Lord Chancellor, on 19 December 2018 Jefford J set aside that costs award.
On 21 August 2018, during the period between the costs award being made and set aside, Mr Mirchandani entered into a Facility Agreement with Augusta Ventures Limited (“Augusta”), pursuant to which Augusta provided a loan of £520,000 which was to be repaid within 12 months. The Facility Agreement was intended to fund the enforcement proceedings. The loan was secured by both the costs award and sums received from the sale of the PP Flat.
On 5 July 2019, Ms Gheewala's solicitors sought Mr Mirchandani's agreement that Mr Somaia's share of the net proceeds of sale of the PP flat should be retained in the jurisdiction to ensure that she could enforce the costs order in her favour against those monies. That was not agreed by Mr Mirchandani.
Mr Mirchandani defaulted on the Facility Agreement by failing to make payment in full by 21 August 2019. (It is said he was also in breach of various representations and warranties including the fact that enforcement proceedings the costs of which the Facility Agreement was intended to cover were never commenced).
On 29 July 2019, Ms Gheewala made an application for a restraint order against Mr Mirchandani, in respect of any monies paid or to be paid to Mr Mirchandani pursuant to the Compensation Order. That application was heard by Phillips J. Mr Mirchandani did not attend the hearing but sent a doctor's letter purporting to excuse his attendance. Phillips J treated that as an application for an adjournment, which he considered and rejected. He framed the restraint order by reference to the ‘Restrained Asset’ up to the value of £200,000. The Restrained Asset was defined as follows:
“The Restrained Asset is any sum up to £200,000 paid or to be paid to the Respondent, Murli Mirchandani, by the Court or by any other person pursuant to and in part satisfaction of the Compensation Order made by His Honour Judge Hone 12 January 2016 in case T2013/7399”
Subsequently, Ms Gheewala made an application for a freezing order against Mr Mirchandani. On 31 July 2019 Phillips J granted an order, ex parte, preventing Mr Mirchandani, until 19 August 2019, from removing from the jurisdiction any of his assets up to the value of £215,000. It also required him to provide by affidavit certain information, including information relating to money lent pursuant to the Facility Agreement.
Mr Mirchandani did not attend that hearing and was not represented on the return date. He made no application for an adjournment and adduced no evidence in support of an adjournment. Lambert J, before whom the matter was listed, noted that he was in breach of paragraph 9 of the order of Phillips J. She granted a world-wide freezing order and a further disclosure order.
On 2 September 2019, Mr Mirchandani filed an affidavit asserting, in substance, that he had no assets and substantial debts.
On 13 September 2019, Ms Gheewala sought a further unless order against Mr Mirchandani. As is recorded in the 3rd recital to that order, Bryan J considered a letter from Mr Mirchandani and a doctor's letter but found that Mr Mirchandani had chosen not to attend, with no good reason. He made an unless order against Mr Mirchandani, obliging him to comply with the orders of Phillips J and Lambert J, by paying the costs he had been ordered to pay, in default of which he would be debarred from participating in the detailed assessment hearing listed for 2 days starting on 10/10/19. Mr Mirchandani did not to comply with that order of the Court.
Mr Mirchandani instructed his solicitors, Thomas Legal, to issue an application to adjourn the detailed assessment hearing. That application was dismissed with costs. The detailed assessment proceeded, and Master Leonard ordered Mr Mirchandani to pay the sum of £311,266.88 to Ms Gheewala together with a further £23,192.16 in costs of the...
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The Section 92 of the Companies Act (2022 Revision) and Global Cord Blood Corporation
...found in two other cases directly addressing interlocutory orders to which I was not referred. 18 Firstly, in Mirchandani v Gheewala [2020] EWHC 1742 (QB), Garnham J opined as follows: “ 48. The underlying principle, which determines the approach the Court should adopt on an application to......
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The Section 92 of the Companies Act (2022 Revision) and Global Cord Blood Corporation
...found in two other cases directly addressing interlocutory orders to which I was not referred. 18 Firstly, in Mirchandani v Gheewala [2020] EWHC 1742 (QB), Garnham J opined as follows: “ 48. The underlying principle, which determines the approach the Court should adopt on an application to......