Sana Hassib Sabbagh v Wael Said Khoury
| Jurisdiction | England & Wales |
| Judge | Pelling |
| Judgment Date | 14 November 2019 |
| Neutral Citation | [2019] EWHC 3004 (Comm) |
| Court | Queen's Bench Division (Commercial Court) |
| Docket Number | Case No: CL-2013-000666 |
| Date | 14 November 2019 |
[2019] EWHC 3004 (Comm)
HIS HONOUR JUDGE Pelling QC
SITTING AS A JUDGE OF THE HIGH COURT
Case No: CL-2013-000666
IN THE HIGH COURT OF JUSTICE
BUSINESS & PROPERTY COURTS OF ENGLAND AND WALES
COMMERCIAL COURT (QBD)
Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL
Ms Sonia Tolaney QC, Mr Simon Colton QC, Mr James Walmsley and Mr Andrew Lodder (instructed by Latham & Watkins) for the Claimant
Mr Philip Edey QC, Mr Andrew Fulton and Mr Andrew Scott (instructed by DLA Piper UK LLP) for the first, third, fourth, eighth and ninth defendants
Mr Alexander Layton QC, Ms Jessica Hughes and Mr Robert Avis (instructed by CMS Cameron McKenna Nabarro Olswang LLP) for the fifth, sixth, seventh and tenth defendants
Hearing dates: 10–11 October 2019
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.
HIS HONOUR JUDGE Pelling QC SITTING AS A JUDGE OF THE HIGH COURT
HH Judge Pelling QC:
Introduction
This is the hearing of:
i) An application by the claimant by an Application Notice dated 19 December 2018 for:
a) Declarations that:
i) a “ concession” made on her behalf that certain Share Sale Agreements relied on by the defendants, which I describe in more detail later in this judgment, were “ existent, valid and effective” is not an admission for the purposes of CPR Part 14; and
ii) the claimant is not precluded from challenging the existence, validity and / or effectiveness of the Share Sale Agreements in these proceedings by reason of the concession; or
b) An order either under CPR Part 14 or the general law giving permission to withdraw the concession, if such permission is required;
ii) An application by the first, third, fourth, eighth and ninth defendants (“Khoury defendants”) by an Application Notice dated 31 January 2019 for an order pursuant to CPR r.3.4 striking out various paragraphs or parts of paragraphs within the claimant's Reply to the Khoury defendants' Defence on the grounds that either (a) the challenged parts of the Reply are inconsistent with the concession the subject of the claimant's application referred to in paragraph 1(i)(a)(i) above and/or (b) that the parts of the pleading under challenge introduce new causes of action that should be permitted only if and to the extent that the claimant can obtain permission to amend her Claim Form and/or Particulars of Claim to raise them; and
iii) An application by the fifth, sixth, seventh and tenth defendants (“Sabbagh defendants”) by an Application Notice dated 31 January 2019 for similar orders in relation to the Reply to the Sabbagh defendants' Defence to those sought by the Khoury defendants.
The high level of hostility between the parties to this litigation – first noted by Carr J at paragraph 11–13 of her judgment referred to below – and the lack of proportionality with which it has been approached has continued with these applications. In most other contexts, the length of applications of this sort could proportionately be measured in hours rather than the two days it took and the skeletons would have been a few pages in length. The claimant's skeleton ran to 25 pages including 13 footnotes and was signed by three leading counsel and two junior counsel and the main skeleton filed on behalf of the defendants ran to 42 pages, contained no fewer than 108 footnotes and was signed by leading counsel and two juniors. The remaining defendants' skeleton ran to two pages only because it adopted what was said in the other defendants' skeleton but even that was signed by leading counsel and two juniors. Even allowing for the value at risk in this litigation all this is obviously disproportionate.
Relevant Background
The claimant is the sister of the fifth and sixth defendants and the daughter of the late Mr Hassib Sabbagh (“HS”). In 1950, HS and the late Mr Said Toufic Khoury (“STK”) founded what became the Consolidated Contractors Company group of companies (“Group”). Since 1984, the eighth defendant has been the ultimate holding company for the Group. The eighth defendant is a Lebanese registered company, as are at least some of the other companies that form the Group. The Group is valued “ … in the sum of at least US$5 billion …” 1. The first, third and fourth defendants are STK's sons and cousins of the claimant. The first defendant is the chairman of the eighth defendant and the third and fourth defendants are two of its directors. The first to seventh defendants control the eighth defendant. The tenth defendant is a Lebanese registered company controlled by the fifth and sixth defendants. Its directors are the third, fifth, sixth and seventh defendants. The seventh defendant is also a cousin of the claimant. None of the defendants has any connection with England and Wales other than the first defendant. The claimant has no connection with England and Wales either.
On 29 June 2002 HS suffered a severe stroke. In these proceedings, the claimant alleges that HS's stroke rendered him unable to manage his business or his own affairs. On 12 January 2010 HS died intestate. The claimant, fifth and sixth defendants are HS's heirs under Lebanese law and each is entitled to one third of his estate. Relations between the claimant and the defendants broke down over disputes concerning the latter's management of and dealings with their father's assets both following his stroke down to his death and following his death. It was those alleged dealings that led the claimant to commence these proceedings.
In these proceedings, the claimant alleges first that from a date shortly after HS suffered his stroke the defendants other than the seventh and tenth defendants conspired to misappropriate assets that belonged to HS. This claim is referred to in these proceedings as the “ Asset Misappropriation Claim”. That element of the claimant's claim is not directly relevant to the claimant's application or to the part of the defendants' applications that mirrors the claimant's application. The claimant's other allegation in these proceedings is referred to by the parties as the “ Share Deprivation Claim”. This claim is concerned with shares in the eighth defendant that the claimant alleges HS owned at the date of his death. It is this part of the claimant's case that is affected by the claimant's application and that part of the defendants' applications that mirrors the claimant's application.
In the Share Deprivation Claim, the claimant alleges that at the date of his death HS owned 399,915 shares in the eighth defendant and that following HS's death the defendants conspired to deprive her unlawfully of her entitlement to one third of this shareholding by procuring the transfer of the shares to the tenth defendant. It is common ground that the tenth defendant is the registered holder of the shares.
The defendants' case in relation to the Share Deprivation Claim is:
“… there was no unlawful conspiracy and that the shares now held by [the tenth defendant] are derived from transfers of shares in [the eighth defendant] which Hassib made prior to his death
(and prior to his stroke) in favour of Sana, Samir and Suheil. … it is now common ground that by three share transfer agreements made in 1993 (“the 1993 Agreements”) Hassib agreed to transfer to his children 199,960 of his then holding of 199,970 shares in [the eighth defendant] subject to the retention by him of a usufruct in the shares for his life. Sana became entitled to receive 20,000 shares (for a stated consideration of US$1,333,333) and Samir and Suheil each became entitled to receive 89,980 shares at a price of US$6m. In September 1993 Hassib agreed to transfer 2 more of his remaining shares in [the eighth defendant] to each of his sons leaving him with only 6 shares.11. Further agreements were entered into in 1995 between Hassib and his children and between Sana and her two brothers, the cumulative result of which (after taking into account increases in the share capital of [the eighth defendant]) was that Sana became entitled to 100,000 shares and Samir and Suheil to 199,960 and 199,961 shares respectively. Then in 1998 Sana transferred her entire holding of 100,000 shares back to Hassib who in turn transferred them to [the ninth defendant]. His remaining 3 shares in [the eighth defendant] were transferred to Suheil. If this sequence of agreements was effective to pass ownership of the shares and any necessary corporate formalities were complied with, the net result of the agreements and transfers executed between 1993 and 1998 was that Hassib had ceased to own any shares in [the eighth defendant] but had retained his usufruct rights over 399,915 shares. By an agreement dated 16 July 2006 (but whose date is in issue) Samir and Suheil transferred 399,915 shares to [the tenth defendant] subject to Hassib's usufruct. The [ninth defendant] retained the shares it had acquired in April 1998.” 2
Of the 1993 agreements, Sana was a party to and had initialled and signed one of them – see paragraphs 38–39 of Carr J's judgment in Sabbagh v. Khoury and others [2014] EWHC 3233 (Comm) – but was not a party to the other Share Sale Agreements made in 1993 – see paragraphs 37 and 39 of Carr J's judgment. The claimant was a party to and had initialled and signed each of the 1995 Agreements – see paragraph 45 of Carr J's judgment – and the 1998 Agreements were signed by the claimant and her father – see paragraphs 49 and 50 of Carr...
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Moyses Stevens Flowers Ltd v Flower Station Ltd
...contains a concession and not an admission. It does not admit the truth of any part of the claim pleaded by MSFL (see Sabbagh v Khoury [2020] 1 WLR 187 at [43]). It narrows the scope of the facts relied on by FSL in support of its defences. This is therefore a case where FSL seeks to withd......
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Dr Rohit Kulkarni v Gwent Holdings Ltd
...party's case was a reference to an admission as to any statement of fact or law relied on by the other party. See Sabbagh v Khoury [2020] 1 WLR 187 at [42] (HHJ Pelling QC). Mr Braithwaite, for Gwent, did not submit that a statement that Gwent would not be entitled to apply for relief from......