Musst Holdings Ltd v Astra Asset Management UK Ltd
| Jurisdiction | England & Wales |
| Judge | Mr Justice Freedman |
| Judgment Date | 28 February 2023 |
| Neutral Citation | [2023] EWHC 432 (Ch) |
| Docket Number | Case No: BL-2018-002369/BL-2021-000680 |
| Court | Chancery Division |
[2023] EWHC 432 (Ch)
Mr Justice Freedman
Case No: BL-2018-002369/BL-2021-000680
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
BUSINESS LIST (LONDON)
CHANCERY DIVISION
Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL
Mr P. Knox QC and Ms K. Bailey (instructed by Taylor Wessing LLP) appeared on behalf of the Musst Parties
Mr C. Boardman QC and Mr T. Beasley (instructed by Payne Hicks Beach) appeared on behalf of the Astra Parties
Hearing dates: 30 and 31 August 2022
Approved Judgment
This judgment was handed down remotely at 2pm on Tuesday 28 February by circulation to the parties or their representatives by e-mail and by release to the National Archives
First draft judgment handed down: 31 January 2023
Various written submissions regarding costs and other matters: 13 and 15 February 2023
Second draft judgment handed down: 23 February 2023
I Contents
| SECTION NUMBER | SUBJECT | PARAGRAPH NUMBER |
| I | Contents | |
| II | Introduction | 1–3 |
| III | Background | 4–27 |
| IV | The law | 28–34 |
| V | Astra's application to strike out/for summary judgment on the grounds of res judicata and related grounds General observations. | |
| (a) The case of Astra | 35–42 | |
| (b) The case of Musst | 43–48 | |
| (c) Discussion | 49–64 | |
| (i) Cause of action estoppel | 65–67 | |
| (ii) Further relief estoppel/merger | 68 | |
| (iii) Issue Estoppel | 69 | |
| (iv) The rule of Henderson v Henderson | 70 | |
| (v) Abuse of process | 71–74 | |
| VI | Striking out for alleged failure to comply with pleading rules | 75–77 |
| VII | Astra – strike out/summary judgment on the merits | |
| (a) Astra's case | 79 – 85 | |
| (b) Musst's case | 86 – 88 | |
| (c) The law | 89 | |
| (d) Discussion | 90–96 | |
| VIII | The contractual claim for disclosure of books and records | |
| (a) Introduction | 99–101 | |
| (b) The issues | 102–103 | |
| (c) Musst's argument | 104–112 | |
| (d) Astra's argument | 113–115 | |
| (e) Discussion | 116–121 | |
| IX | Costs of the consequential hearings of 17 December 2021 and 21 January 2022 | |
| (1) The respects in which Musst has succeeded | 122–124 | |
| (a) The costs of the Contract Claim | 125 | |
| (b) Payment on account of costs | 126 | |
| (c) Interim payment | 127 | |
| (2) Matters not decided | 128 | |
| (3) Determinations in favour of Astra | ||
| (a) The basis of costs in the Defamation Claim | 129 | |
| (b) The basis of costs in respect of the Contract Claim | 130–131 | |
| (c) Permission to appeal | 132–133 | |
| (4) Discussion | 134–142 | |
| (5) Costs of the strike out application and hearing of 30/31 August 2022 | 143 | |
| X | Security for costs | 144–149 |
| XI | Astra's submission about moneys falling due after judgment | 150–156 |
| XII | Final word | 157–159 |
II Introduction
Towards the end of the judgment handed down on 17 December 2021 (“the Judgment”) which was in respect of what was termed Crown 1, reference was made to a different action which had been commenced on 29 April 2021 in respect of different portfolios in Crown referred to as Crown II and Crown III (“the Second Action”). An application was brought on behalf of the Defendants in the Second Action to strike out the claim on the basis that (a) it was barred by reason of the matters having been litigated in the action in which I gave judgment (“the First Action”) whether in the nature of abuse of process or the other kinds of estoppel and bars to a second action, or (b) it disclosed no reasonable cause of action ( CPR 3.4) and/or had no real prospect of success ( CPR 24). In this judgment, the term “Musst” will be used to refer to the Musst companies in the heading of the action or any of them and “Astra” will be used to refer to the Astra companies in the heading of the action or any of them.
The broadest summary of the genesis of the application and of the issues between the parties in this strike out application was contained in the closing paragraphs of the Judgment, which I shall set out:
“The extent of relief in respect of Crown II and Crown III
667. …Crown II and Crown III….were set up for different portfolios in Crown. On 30 April 2015, Astra LLP told Musst that what was called Crown II had been set up for a new strategy, “and therefore it is not covered by the existing Introduction Agreement [the Octave Contract]”. The management of this account was subsequently transferred to Astra UK at the time of the transfer of Astra LLP's business to it. On 5 December 2019, Payne Hicks Beach reiterated that the Crown II account followed a different strategy.
668. On disclosure in relation to the Defamation Claim, Astra, on 18 September 2020, disclosed for the first time an internal email (from Mr Adler (of Astra) to Crown) dated 3 February 2016 in which he said, talking of the Crown I and the Crown II accounts and two other entities: “As you know, all our credit vehicles have pursued a very similar if not identical strategy so far; forward ASCIL (another entity) will invest in slightly more liquid credit assets to reflect its changed liquidity profile.”
669. Musst say that it was agreed between the parties that any questions in relation to non-payment in relation to Crown II could not be conveniently dealt with in these proceedings (i.e. because of the need for disclosure and expert evidence) but would have to be dealt with in subsequent proceedings, if need be. It is not apparent whether that means in this action or in another action. There was not an express plea as regards nonpayment in relation to Crown II and Crown III. An application to amend this action so as to include reference to Crown II and Crown III was withdrawn by consent. There was a holding claim form issued on 29 April 2021 in which Musst sought to claim for the fees in respect of Crown II and Crown III.
670. In the meantime, Musst submits that an order should be made in these proceedings allowing Musst to inspect the books and records in relation to Crown II and/or Crown III if it otherwise proves its case on liability, without having first to show that Crown II and Crown III consisted of “Eligible Investments”. It relies on para. 105(1) and 105(2) of RAMPOC seeking production of statements “in relation to all payments made to it … since May 2016 by 2B, Crown and any other entity introduced by the Claimant ….” and see also paras. 105(3) and 105(4) and 113 (which claims the same relief against Astra LLP if there was no novation to Astra UK). This is said to arise also out of the wide requirements of clause 13, which provides an obligation to keep books and records, and to allow inspection, in relation to “its activities relating to this Agreement, including but not limited to recording any Eligible Investments”. It also relies on the last words of clause 3.1 referring to “additional investments made for the Current Strategy (emphasis added) directly or indirectly by an Investor into a Fund whether before or after the Cut-off Date are also Eligible Investments.” It submits that there is an argument that the investments in Crown II and Crown III are additional investments, and that is therefore sufficient to open the door to disclosure relating to Crown II and Crown III.
671. Since this part of the judgment had been prepared in draft, the Court has been provided with the evidence in support of an application to strike out the 2021 action claiming management and performance fees in respect of Crown II and Crown III. It comprised a 40-page witness statement of Lucas Julian Moore dated 29 September 2021. This was forwarded to the Court on 13 October 2021 by solicitors for Musst with relatively short letters summarising its position. It is not necessary or reasonably possible at this stage to consider that in any detail. One feature of the witness statement is that Astra disagree with the submission of Musst that there was agreement that a claim in respect of Crown II and Crown III might be made in a second action. The submission is that Musst could and should have brought any claim relating to Crown II and Crown III, if at all, in this action. It is submitted by Astra that a fuller analysis of the documents between the parties shows that Musst was not misled as to the strategy adopted in respect of Crown II and Crown III, and there is nothing in the suggestion that there was a recent discovery that the position was not as previously represented. It is also submitted on behalf of Astra that the claim in respect of Crown II and Crown III ought to be struck out on a whole variety of grounds, including abuse of process and no reasonable prospect of success. Astra also say, in any event, that the reference to “other entity” in RAMPOC is not sufficient to open the door to a disclosure in respect of Crown II and Crown III if the claims in respect of those entities are not being dealt with in this action.
672. This recent development has the effect that it is premature at this stage for the Court to make findings as to whether there ought to be disclosure in this action about Crown II and Crown III. The different understandings of the parties regarding the consequences of the abandonment of the amendment application in respect of Crown II and Crown III require further consideration. Musst may wish to consider which way to turn in respect of any claim in respect of Crown II and Crown III, and in that context, Astra will wish to submit that whichever way Musst turns, it will be to no avail.
673. In these circumstances, this judgment will not, at this stage, make any determination relating to how any claim in respect of Crown II and Crown...
To continue reading
Request your trial
-
James Court Ltd ((in Liquidation)) v Hindsight Contractors Ltd
...be absolute if it could with reasonable diligence and should in all the circumstances have been raised.” 36 In Musst Holdings Limited v Astra Asset Management UK Limited [2023] EWHC 432 (Ch) at [30] it was held that this statement of general principle, so far as it applies to issues which ......