Terre Neuve Sarl v Yewdale Ltd and ors
| Jurisdiction | England & Wales |
| Judge | Mr Justice Foxton |
| Judgment Date | 27 March 2023 |
| Neutral Citation | [2023] EWHC 677 (Comm) |
| Docket Number | Case No: CL-2018-000664 |
| Court | Queen's Bench Division (Commercial Court) |
[2023] EWHC 677 (Comm)
Mr Justice Foxton
Case No: CL-2018-000664
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
KING'S BENCH DIVISION
COMMERCIAL COURT
Alex Barden and Samuel Rabinowitz (instructed by Quinn Emanuel Urquhart & Sullivan UK LLP) for the Claimants
Meyer El Maleh (the Fourth Defendant), Sara Sasson (the Sixth Defendant), Carole Sasson-El Maleh (the Seventh Defendant) and Robert Naggar (the Tenth Defendant) in person.
Hearing date: 13 March 2023
Further submissions: 15, 16, 17 and 23 March 2023.
Judgment Approved
(handed down subject to editorial corrections)
I direct that no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
THE HONOURABLE Mr Justice Foxton
This judgment was handed down by the judge remotely by circulation to the parties' representatives by email and release to The National Archives. The date and time for hand-down is deemed to be Monday 27 March 2023 at 10:30am.
The Honourable
Introduction
This is a complex claim: complex in the underlying facts, in the causes of action in issue and in the procedural difficulties to which the case has given rise.
In summary, the Claimants say that they paid over a significant sum for what they describe as “tax optimisation” purposes under a scheme in operation between October 2008 and October 2012.
The scheme is said to have been recommended to the Third Claimant ( Mr Zahut) by the late Mr Ernest Sasson. It involved payments to the First Defendant ( Yewdale), an English company, from where it is said that they were meant to be transferred to the Second Defendant ( REDS), from where – presumably with some fiscally improved status – it is said that the monies were then intended to be applied for the ultimate benefit of Mr Zahut. The Claimants say that the monies paid were misappropriated, and they have brought a variety of claims against those said to haver undertaken, organised and/or facilitated the misappropriation. Those claims are brought in contract, delict and unjust enrichment under Swiss and French law.
In October 2012, there were police raids on property linked with the Claimants in France, and Mr Zahut became aware of a French police investigation into Mr El Maleh.
There have been settlements between a number of parties. The particular issues which have come before the court at this hearing concern the following defendants ( the Yewdale Defendants):
i) Yewdale, the recipient of the payments.
ii) The Fourth Defendant ( Mr El Maleh) who was a director of Yewdale until April 2019, and also director of a company called GPF SA ( GPF), a Swiss company involved in the tax optimisation scheme. Mr El Maleh was convicted in Geneva of money-laundering on 29 January 213, and convicted of money laundering by a French court on 19 October 2018 (when he was sentenced to 6 years' imprisonment). The Claimants allege that Mr El Maleh controlled Yewdale, REDS and GPF.
iii) The Sixth Defendant ( Ms Sasson) is one of the heirs to Mr Sasson, it being alleged that Mr Sasson was involved in the alleged misappropriation of assets, and in control of GPF, REDS and Yewdale. Ms Sasson is sued solely in that capacity. At some point she held 25% of Yewdale.
iv) The Seventh Defendant ( Ms Sasson-El Maleh) is Mr Sasson's other heir. She is sued in that capacity, but also faces an unjust enrichment in respect of payments made to her totalling Euros 47,000 and a claim for breach of fiduciary duty in her capacity as a director and corporate secretary of GPF. Ms Sasson-El Maleh is currently a director of Yewdale and owns some or all of its shares.
v) The Tenth Defendant ( Mr Naggar) was also a director of Yewdale, and for a period its only director. The case against him is based on an inference that, as a director of Yewdale, he was aware that funds remitted to Yewdale under the tax optimisation scheme were being misappropriated.
Mr Zahut has been convicted of charges of tax evasion, money laundering, forgery and the use of forged documents. The witness statement filed by the Claimants in support of this application dated 24 November 2022 refers to that conviction and says, “he is appealing that conviction”. However, I understand that the appeal was dismissed on 31 March 2022.
It will be apparent that the Yewdale Defendants are alleged to have had different levels of involvement in the events giving rise to these claims. Pursuant to an order made by Christopher Hancock QC, they served a single defence through a firm of solicitors, Campbell & Co. In broad summary the defence is follows:
i) The Claimants' account of the contractual structure is challenged.
ii) It is alleged that the monies transferred to Yewdale were applied for the benefit of Mr Zahut by various means.
iii) It is accepted that Mr El Maleh and Mr Sasson controlled GPF, REDS and Yewdale.
iv) It said that Mr Naggar was not aware of anything of concern in relation to Yewdale and, in effect, that Ms Sasson El-Maleh had no real knowledge of or involvement in the affairs of GPF.
v) A limitation defence is advanced.
vi) It was alleged that the claim is barred by the doctrine of illegality or ex turpi causa because the scheme was founded on an attempt to move assets from Mr Zahut's name to certain corporate names for fraudulent purposes.
Procedural history
There was a lengthy hiatus during the case while service and jurisdictional issue were resolved. There were also settlement discussions (which were largely successful) between the Claimants and other defendants. On 22 February 2021, RKM Law ( RKM) came on the record for the Yewdale Defendants.
On 29 April 2021, Mr Justice Jacobs held a CMC which addressed disclosure issues. He ordered the Yewdale Defendants to serve witness statements confirming:
i) “the source and repositories of documents and/or communications” which that defendant had access to, use of or were otherwise within that defendant's control from 1996 to date;
ii) all potential sources of documents such as “phones, laptops, servers etc” listed in Question 2 of Section 2 of the DRD and “what email accounts, mobile phone numbers and/or other sources of electronic communication” the defendant had, or had had, use of, including what devices had been taken by the French and/or Swiss authorities and whether they had been returned; and
iii) what documents, devices or other data sources they retained following seizures by the French and/or Swiss authorities.
Mr El Maleh swore a witness statement in response in which he stated the following:
i) All of Yewdale's bank accounts were subject to a restraint order. The relevant accounts appear to have been located with HSBC in Mayfair.
ii) The documents for GPF and Yewdale had been held in Switzerland, and during the police operation a “huge volume of documents, desktop computers, laptops, iPad, memory sticks, USB, hard CD disks and mobile phones were seized by the Swiss police”.
iii) The files and folders of Yewdale and REDS were controlled and managed by a Ms Vasarino, and emails and copies were placed in folders “to be retained in the archives of Yewdale and REDS”.
iv) When his family home and office were searched by the police, documents from the archives of Yewdale and REDS were seized, the archives mainly consisting of hard copy documents or PDFs saved on USB sticks and a CD. Mr El Maleh appears to have retained the CD but says it has since been confirmed that it has been damaged and no information can be retrieved from it.
v) His iPhone, Blackberry and iPad belonged to GPF. He is not certain whether or not they had been returned by the Swiss police to GPF (the implication being that they had not been returned to him).
vi) “For the purposes of these proceedings all the remaining archives of Yewdale and some documents of REDS have now been assembled and brought to his office” for search and production, which are “mainly in hard copy, PDF format save in USB stick” (sic).
vii) The email account Y1 was used exclusively by Ms Vasarino until October 2012 and then by him but he cannot go further back than 2013/2014 when searching it.
viii) He created the account M1 in March 2013 but had no dealings with the Claimants by or from that date.
ix) He no longer had access to another email account.
x) He no longer had access to the phone or sim card he used when working with GPF.
xi) He has had an iPhone and iMac computer used for private use since June 2013 which are not linked with the Claimants, Yewdale or REDS.
xii) After his conviction, only personal documents seized at his family home were returned to him.
xiii) He has in his possession a huge box of documents representing the archive of Yewdale and a hardcopy box of REDS documents.
xiv) Documents had been made available to him in the French proceedings.
Ms Sasson-El Maleh also provided a witness statement on her own behalf and on behalf of Yewdale in which she adopted Mr El Maleh's witness statement. She said GPF had not provider her with any electronic devices and that she had never had possession of GPF documents. She identified the M2 email as her address.
Mr Naggar, in his witness statement, also adopted the contents of Mr El Maleh's witness statement. He said he had been appointed as director of Yewdale because he was a British citizen, the role was unpaid, that he had no involvement in its activities and that he had never had possession or control of its documents or been provided with any electronic devices by Yewdale. He said documents he had exhibited to a jurisdiction statement made on behalf of all of the defendants had been provided to him by Mr El Maleh. He had a...
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