Sir Owen George Glenn Knzm Onzm and Another v Eric John Watson and Others
| Jurisdiction | England & Wales |
| Judge | Mr Justice Nugee |
| Judgment Date | 16 December 2016 |
| Neutral Citation | [2016] EWHC 3259 (Ch) |
| Docket Number | Claim No: HC-2015-001647 Claim No. HC-2014-000608 |
| Court | Chancery Division |
| Date | 16 December 2016 |
[2016] EWHC 3259 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
COMPANIES COURT
DERIVATIVE CLAIM
The Hon. Mr Justice Nugee
Claim No: HC-2015-001647
Claim No: 3224/2015
Claim No. HC-2014-000608
In the Matter of Spartan Capital Limited and in the Matter of the Insolvancy Act 1986
Elizabeth Jones QC, Justin Higgo, Gareth Tilley, Paul AdamsandOliver Jones (instructed by Farrers) for the Claimants
Hannah Brown (instructed by Oury Clark) for the 1 st Defendant
Sa'ad Hossain QC, James Goldsmith, Adam Rushworth (instructed by Wilson Gilmore) for the 2 nd Defendant
Anna Boase (instructed by Excello Law) for the 3 rd and 4 th Defendants
Hearing dates: 23rd, 24th and 25th November 2016
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
This judgment addresses a number of applications which were made in the course of the third case management conference in these proceedings. The background is well known to the parties and does not need to be set out in detail. There are three sets of proceedings before the Court which are due to be heard together at a trial in May 2017. For present purposes the most directly relevant of the three proceedings is what has been variously described as the Part 7 proceedings or as the Sir Owen / Kea proceedings. This is a claim by Sir Owen Glenn ( "Sir Owen") and Kea Investments Limited ( "Kea"), a company now wholly owned by Sir Owen but at the material time owned by an offshore trust in Nevis called the Corona Trust, for relief in relation to transactions entered into by Kea which are said to have been entered into as a result of fraudulent misrepresentations or breaches of fiduciary duty. In these proceedings Mr Eric Watson is the first defendant and Novatrust Limited is the second defendant. In this judgment I will refer to Sir Owen and Kea as "the Claimants" and to Mr Watson and Novatrust as "the Defendants".
The present applications are:
(1) An application by the Defendants designed to enable them to speak to a prospective witness, Mr David Miller, about certain topics.
(2) A question as to the form of questions to be put to the US tax law experts.
(3) An application by Novatrust for certain specific disclosure.
The Miller topics
Mr Miller is introduced in the Particulars of Claim in the Sir Owen / Kea proceedings as follows:
"3.1 The Corona Trust was declared by Pizarro Company Limited ("Pizarro"), a Nevis company, by a deed of trust dated 12 February 2009. Pizarro, which became the sole trustee of the Corona Trust, was ultimately beneficially owned and controlled by a Mr Peter Dickson ( "Mr Dickson"). The Protector of the Corona Trust was Mr David Miller ( "Mr Miller"), who had been an employee and close friend and adviser of Sir Owen for about 30 years. Mr Miller was also the "policy director" of Pizarro. Sir Owen was not a named beneficiary of the Corona Trust (though the Corona Trust contained provisions whereby he could be added as a beneficiary).
3.2 On 12 February 2009 Pizarro also declared a trust called the Regency Trust. Mr Miller was also the protector of the Regency Trust. The Regency Trust contained extensive powers reserved to Sir Owen, including the power to revoke the Regency Trust and to re-vest its assets in Sir Owen.
…
3.5 On 31 October 2011, and without the knowledge of Sir Owen, Mr Miller and Mr Dickson caused the Regency Trust to transfer all its assets to the Corona Trust, thus placing all the wealth which Sir Owen had created in an irrevocable trust of which he was not a beneficiary, and to which he could only be added as beneficiary if they so decided."
Mr Miller played a significant role in the matters of which the Claimants complain. They do not propose to call him as a witness. The Defendants do wish to call him, or at any rate consider calling him, as their witness. For that purpose they would, for obvious reasons, wish to talk to him first about the evidence he would give if called. The Defendants accept that Mr Miller prima facie owed duties of confidentiality in relation to the matters about which they wish to talk to him. A long negotiation, which I need not detail, has led to an agreed protocol under which the Defendants can talk to Mr Miller about certain specific topics relevant to these proceedings. That protocol includes undertakings given by nominated representatives of the Defendants' solicitors, Wilson Gilmore for Novatrust and Oury Clark for Mr Watson, including an undertaking only to discuss with Mr Miller the matters which the parties have agreed may be discussed and not to trespass beyond those boundaries without further agreement or order of the Court, and an undertaking to use best endeavours to prevent Mr Miller (or his US attorney Mr Webb) from disclosing any material which is privileged or irrelevant to the action. It also includes a letter from Sir Owen to Mr Miller confirming on behalf of himself and Kea that they expressly consent to his meeting with Wilson Gilmore and Oury Clark to discuss the specific agreed topics and that neither he nor Kea will sue him for breach of confidence (or breach of a settlement agreement) for so doing, but fully reserving all other rights of confidentiality. It also includes a letter from Mr Miller confirming that he will attend trial.
The Defendants now wish to add to the agreed topics. Mr Hossain QC, who appeared for Novatrust, did not suggest that they could do that unless there had been a waiver of the duty of confidentiality, but his case is that the Claimants have indeed waived confidentiality in the topics which the Defendants now wish to ask Mr Miller about. I need not set out all the disputed topics but will give some examples. One of the matters pleaded by the Claimants is pleaded as follows:
"36. In early January 2012, OTSLG was sold. The sale of OTSLG provided the Corona Trust with a substantial amount of cash for investment.
37. Mr Miller and Mr Dickson came to see Sir Owen in Sydney shortly after the sale. They stated that there would now be rules about Sir Owen's involvement in the affairs and investments of the Corona Trust which owned the proceeds of sale and that effectively Mr Miller and Mr Dickson would be in charge while Sir Owen would have little or no say in what investments were made by the trust. This came as a total surprise to Sir Owen.
38. This attempt by Mr Miller and Mr Dickson to change the basis on which the Corona Trust had operated to that date and to marginalise Sir Owen caused a breakdown of relations between Sir Owen and Mr Miller and Mr Dickson in the early part of 2012."
Another matter pleaded by the Claimants is as follows:
"76. Sir Owen's relationship with Mr Miller began to break down following the 31 March 2012 meeting referred to above. After Mr Leahy had left, Sir Owen informed Mr Miller that he wanted Mr Dickson removed and a new trustee appointed. Mr Miller terminated any discussion, to Sir Owen's surprise and disappointment. Thereafter, on 14 April 2012, Pizarro, acting by Mr Miller, sent a letter dated 13 April 2012 to Sir Owen. This letter asserted that Sir Owen was not entitled to make investment decisions on behalf of the Corona Trust, that Sir Owen had given up all rights, control, title and powers in respect of the trust property and that Project Spartan was being addressed and considered by Pizarro."
On the basis of that, among the topics which the Defendants wish to add are as follows:
"2. With respect to the dispute in 2012 between Sir Owen and Messrs Miller and Dickson about the operation of the Corona Trust:
a) The communications between Sir Owen and Messrs Miller and Dickson at the meetings in early January 2012 and 31 March 2012 (APOC/37,76);
…
c) Whether in January 2012 Messrs Miller and Dickson attempted to change the basis on which the Corona Trust operated and to marginalise Sir Owen (APOC/38);
d) Whether this caused the breakdown of relations between Sir Owen and Messrs Miller and Dickson in the early part of 2012 (APOC/38);"
It is clear that the Claimants are unwilling to allow that to take place. In those circumstances the Defendants have brought this application. What is in fact sought in the applications by each of Novatrust and Mr Watson is as follows:
"An interim declaration under CPR r 25.2(1)(b) that it is not a breach of confidence (or an inducement of a breach of confidence) for Novatrust to obtain evidence and information from Mr Miller for use in these proceedings on the [specified topics]."
Ms Jones QC, who appears for the Claimants, has a point on whether the Court can grant an interim declaration of this sort at all in this way, but her main point is a much more fundamental one, which is that the Claimants have not waived their right of confidentiality in these topics. Mr Hossain accepts that unless they have done so he cannot obtain the declaration he seeks. So that squarely raises the question of whether the Claimants have waived confidentiality in certain matters by reference to them in their pleadings.
The starting point in the analysis is not disputed. Where A sues B and there is a prospective witness W who can give relevant evidence, but who owes a duty of confidentiality to A, then first, B is free to...
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Sir Owen George Glenn Knzm Onzm and Another v Eric John Watson and Others
...a postscript to my judgment arising out of a recent CMC, which I handed down on 16 December 2016 and which has the neutral citation [2016] EWHC 3259 (Ch). It deals with the third application there referred to, namely Novatrust's application for specific disclosure. This was argued before m......