Steven Shelley v The Estate of Mr Christopher Trevor Norman
| Jurisdiction | England & Wales |
| Judge | Charles Morrison |
| Judgment Date | 23 April 2021 |
| Neutral Citation | [2021] EWHC 975 (QB) |
| Date | 23 April 2021 |
| Docket Number | Case No: QB-2019-002948 |
| Court | Queen's Bench Division |
[2021] EWHC 975 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
Charles Morrison
(Sitting as a Deputy Judge of the High Court)
Case No: QB-2019-002948
Jamie Riley QC and James McWilliams (instructed by Edmonds Marshall McMahon) for the Applicant
The Respondent in person
Hearing date: 8 March 2021
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.
Charles Morrison (sitting as a Deputy Judge of the High Court):
Introduction
The Defendant ( D) in this matter has brought before me an application for the committal of the Claimant, Mr Steven Shelley ( Mr Shelley). It is said that there are fifteen clear grounds of contempt of court and that they are each set out in the grounds of committal in the committal application (the Committal Application).
It is said that Mr Shelley:
i) made false statements of truth on,
a) his Particulars of Claim dated 6 June 2018,
b) his Reply and Defence to Counterclaim dated 31 May 2019,
c) his reply dated 16 September 2019 to the D's Request for Further Information, and
d) his Amended Reply and Defence to Counterclaim dated 20 December 2019;
ii) breached the terms of the worldwide freezing order and proprietary injunction made by Lambert J on 22 August 2019 and continued pursuant to the order of Lavender J on 3 September 2019 (the Freezing Order); and
iii) falsely swore his first affidavit on 3 September 2019.
On the first day of the hearing I gave the D permission to amend its Committal Application and grounds one and two of its grounds of committal to correct a typographical error. Those grounds referred to Mr Shelley's account with Investec but should instead have referred to his account with Metro Bank. I was satisfied that I had the power to do so: see Naibu Global International Company Plc v Daniel Stewart & Company [2020] EWHC 2719 (Ch) at [41] to [43] per Bacon J.
Whilst Mr Shelley voiced no objection to the amendment, I was in any event satisfied that:
i) the amendments corrected an error rather than introduce a new substantive ground of committal;
ii) the correct factual position was set out in the evidence in support of the Committal Application and the correct bank statements exhibited;
iii) no new factual evidence was required consequent upon the amendments;
iv) Mr Shelley had been provided with the amended version of the Grounds of Committal in good time and had been given an opportunity to comment on the same; and
v) there was no obvious prejudice to Mr Shelley.
It is important to have in mind that the contempt alleged takes a number of different and distinct forms. Mr Shelley's wrongful conduct is said to fall into a number of different classes of contempt, each of which I will endeavour to explain. They are broadly that Mr Shelley is liable in contempt because he:
i) failed to comply with the terms of the Freezing Order;
ii) failed to comply with the terms of the proprietary injunction;
iii) failed to comply with the disclosure requirements contained in both orders aforementioned;
iv) made false statements in his court pleadings which he verified as being true, and
v) gave false evidence to the court by way of affidavit.
The failure to comply with matters, which might also fall under the label “disobedience of a court order”, comprise grounds one to eight; ground nine alleges the false affidavit; and the remaining grounds 10 – 15 assert false statements of truth in various pleadings.
The factual background
The evidential background is largely provided by the Affidavit sworn on 19 June 2020 in support of the application by one of the D's solicitors, Mr Fairbrother. It is necessary to recite that background at some length in order to properly understand the context for the application that I am now called upon to consider. I have however reminded myself that I am not concerned to try the facts of the underlying case; nor must I allow any view I form of the conduct of Mr Shelley in the underlying facts to infect my judgment on the discrete grounds of contempt alleged. It is the contempt application that is before the court and it is on conduct relevant to that that Mr Shelley must be judged.
The evidence of Mr Fairbrother explains that Christopher Norman ( Mr Norman) was a successful businessman who sold his business in 1998 for a substantial sum and then retired to Portugal where he remained from 2001 until his death. From about 2010, he became interested in investing in small and medium sized companies.
In or around March 2016, Mr Norman started to display signs of illness. That illness worsened until on 24 May 2016 he was diagnosed with Stage 4 brain cancer. It is said that by that point he had become very unwell and was struggling to communicate clearly. Despite surgery on 12 June 2016, his condition deteriorated rapidly with increasing confusion and difficulty with speech and reading. As at 15 June 2016, his medical records note that he was “unable to point to objects corresponding with a single spoken word or written word (e.g. “point to the spoon”)”. Mr Norman died at his home in Portugal on 1 September 2016.
Mr Shelley is an investment manager. It seems that he and Mr Norman first met in or around the Summer of 2013, and that Mr Norman thereafter became a client of his then employer. Upon leaving that business, Mr Shelley says that he entered into an agreement whereby he would act as a personal investment manager to Mr Norman and manage his investments in return for a fee calculated at 25% of the profits and dividends derived from the investments.
The D accepts that Mr Shelley managed Mr Norman's investments and advised him with respect to the same. It says that Mr Shelley received some £87,866.67 out of Mr Norman's bank accounts by a series of payments made only after Mr Norman had ceased to be able to deal with his own online banking due to the effects of his illness. It is alleged that the final two transfers were made by Mr Shelley himself who, using his access to Mr Norman's email account, reset the passwords and gave himself direct access to Mr Norman's bank account.
Mr Shelley began these proceedings in which the application is made, on 6 June 2018 in the County Court Business Centre as a claim for £74,300.45 in respect of further sums said to have been due to him for unspecified work allegedly carried out in the last few weeks of Mr Norman's life (the Proceedings).
It has now come to light says the D, that in 2015 and 2016, Mr Norman made very substantial debt and equity investments in three companies, Provincial Hotels & Inns Limited ( Provincial), Check4Cancer Limited ( C4C) and Digby Fine English Limited ( Digby). In the case of Provincial, that investment took the form of a £2,000,000 loan secured by a charge and also the allotment of shares; in the case of C4C the investment took the form of a £250,000 loan and the acquisition of shares for £193,100; and in the case of Digby, Mr Norman acquired shares for £187,500 (together, the Investments).
According to Mr Fairbrother's evidence, despite the size and nature of the Investments, the D had no records of the circumstances in which they were made or what had happened to any income derived from them. Companies House filings in respect of Provincial, C4C and Digby however showed that Mr Norman's Investments had purportedly been transferred into a trust referred to as “the White Fence Trust” (the WFT). Little was known about the WFT apart from the fact that “Stuart Gordon Crane of Cluny” ( Mr Crane) was the Trustee to the WFT and that he appeared to work at “Lex Mercatoria” solicitors. Mr Crane is the Third Party in these proceedings.
When Mr Shelley was asked by the D whether he had any involvement with the WFT or could supply any copies of trust documents or correspondence, he replied on 13 July 2017 stating that “unfortunately I am not in a position to assist you in your enquiries”. Similarly, when the D's then solicitors asked Mr Crane who the beneficiaries were, he responded “We are not at liberty to provide any additional information”.
It seems however that in the bundle for the first case management hearing in the Proceedings that Mr Shelley had prepared and handed over on the morning of 1 March 2019, he included a letter dated 29 June 2018 addressed to him from Mr Crane, here described as an accountant at Lex Mercatoria Solicitors based in Geneva, purporting to set out the history of the WFT ( Lex Mercatoria and the Lex Mercatoria Letter).
In light of the contents of the Lex Mercatoria Letter, the D's solicitors wrote to Mr Shelley with a number of questions. Mr Shelley's response was that the questions have “absolutely no relevance to the proceedings”. The D pressed the point, noting that Mr Shelley had presumably assisted in the transfer of assets, but Mr Shelley's response was to state, amongst other things, that “you are making very serious and completely unfounded allegations which I take great exception to”.
Mr Shelley filed his Reply and Defence to Counterclaim in the Proceedings on 31 May 2019 ( Mr Shelley's Reply) in which he claimed, amongst other things, that he was not materially involved with the WFT nor the transfer into it of any related assets.
In August of 2019, the solicitors Walker Morris...
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