Therium (UK) Holdings Ltd v Mr Guy Brooke and Others
| Jurisdiction | England & Wales |
| Judge | The Hon. Mr Justice Popplewell |
| Judgment Date | 07 October 2016 |
| Neutral Citation | [2016] EWHC 2421 (Comm) |
| Docket Number | Case No: CL-2016214 |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 07 October 2016 |
[2016] EWHC 2421 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice
London, WC2A 2LL
The Hon. Mr Justice Popplewell
Case No: CL-2016214
Charles Dougherty QC & Joseph Sullivan (instructed by Harcus Sinclair LLP) for the Claimant
Simon Williams (instructed by direct access) for the First Defendant
Hearing dates: 2 nd & 4 th August 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
On 2 and 4 August 2016 I heard an application by the Claimant ("Therium") to commit the First Defendant, Mr Brooke, to prison for contempt of court. The contempts alleged were disobedience to various orders made by the Court between April and July 2016, and in one respect, assisting and/or causing and/or procuring the Third Defendant ("Cable Plus") to breach such an order. At the conclusion of the hearing I announced my decision that Therium had established some of the contempts alleged and that I would give my reasons in writing thereafter. I reserved judgment in relation to the remaining contempts. These are my further findings and reasons.
Mr Brooke did not attend the hearing. He was represented by counsel, Mr Williams, who was instructed by direct access and had appeared for him at previous hearings. Mr Brooke is aged 78 and has been in poor health. On the eve of the hearing he sent an email stating that he was unable to travel to attend for medical reasons. Mr Williams made an application for an adjournment on his behalf. I concluded that Mr Brooke was unwilling to attend, not unable to do so, and rejected the application for an adjournment for the reasons set out in a judgment I gave on 2 August 2016.
I heard evidence from Mr Van den Heuvel, who was qualified and experienced in the law and practice of Curacao. He gave evidence by video link and was cross examined by Mr Williams. I found him to be a straightforward witness whose evidence was cogent and persuasive. Therium also tendered for cross examination Mr Parkes, a solicitor who had had a number of relevant conversations which were the subject matter of affidavit evidence. Mr Williams stated that he did not require Mr Parkes to be called and did not wish to cross examine him. Accordingly I treat his evidence as unchallenged.
Narrative
Mr Brooke was a shareholder of Cable Plus Limited which was the parent of a Dutch company, Cable Plus (Netherlands) BV ("Cable Plus Netherlands"). Cable Plus Netherlands had brought legal proceedings objecting to the termination of a broadband licence by the Dutch authorities. It was represented by a Dutch law firm, De Brauw Blackstone Westbroek NV ("DBBW"). DBBW withdrew those legal proceedings. Cable Plus Netherlands was at its own request declared bankrupt on 8 January 2002. The bankruptcy trustee representing the company commenced legal proceedings against DBBW and the relevant lawyer at the firm, a Mr Biesheuvel, alleging professional negligence in withdrawing the legal proceedings. On 25 May 2010 the Hague Court of Appeals found that DBBW and Mr Biesheuvel had been professionally negligent and were liable to Cable Plus Netherlands.
Because of the parlous financial position of Cable Plus Netherlands, Mr Brooke needed to find litigation funding to pursue the quantum stage of the claim. For those purposes in February 2011 he caused to be incorporated a new company in Curacao, the Third Defendant, Cable Plus. Mr Brooke was the sole shareholder of Cable Plus, and has at all times remained so. Its sole director has at all material times been one of the largest corporate service providers in Curacao, The United Trust Company NV which acted as director through its managing director, Mr Gregory Elias. Therium has at times referred to this entity as United International Trust and so used the acronym "UIT", including in its committal application. I shall use the same acronym "UIT" to refer to The United Trust Company NV, for ease of comprehension.
In order to pursue the claim, Mr Brooke and Cable Plus entered into a litigation funding agreement with Therium dated 1 April 2011 ("the LFA"). The LFA provided that Therium would provide funding in a total of £1m in two tranches. By Clause 13.2 the proceeds of any recovery against DBBW and Mr Biesheuvel were to be paid to Kemp Little LLP, the English solicitors acting for Cable Plus in relation to the Dutch litigation. The proceeds were to be held in their client account pending an accounting process under which Kemp Little LLP would recover their costs and Therium be paid the sums due to it under the LFA in priority to the distribution of any surplus to Cable Plus.
On 24 June 2015 the Dutch court gave final judgment in favour of Cable Plus against DBBW and Mr Biesheuvel in a sum which, once quantified to include interest and costs, amounted to approximately €3.4m.
Mr Brooke was disappointed and dissatisfied with this quantification of liability. It was significantly less than he had been hoping for, and, as was made clear to him at the time, would mean that once Therium and Kemp Little had taken what they claimed to be owed under the LFA there would be nothing left for Cable Plus or Mr Brooke. Mr Brooke sought to negotiate a higher figure from DBBW and Mr Biesheuvel using a prospective appeal as a bargaining counter. As a result a settlement agreement was reached in the Dutch litigation under which DBBW and Mr Biesheuvel agreed to pay Cable Plus €400,000 more than had been awarded in the Dutch court judgment. I shall refer to this sum of approximately €3.8m, which is at the heart of the current contempt application, as "the Claim Proceeds". The written settlement agreement was executed by Cable Plus on 19 November 2015 and, according to Mr Brooke's affidavit evidence, concluded on that date. It provided for payment of the Claim Proceeds within 10 days of execution into a numbered bank account in the name of UIT at the United International Bank, Curacao.
The fact and amount of the settlement was deliberately kept from Therium by Mr Brooke. Therium had at that time been pressing for information as to the outcome of negotiations. On 23 November 2015 Mr Brooke sent an email to Therium stating that "A settlement agreement is being drawn up at the moment. We are hoping for completion over the next couple of weeks." This was, as Mr Brooke knew, untrue. The settlement agreement was not "being drawn up"; it had been drafted and executed four days earlier. "Completion" of the agreement was not being hoped for over the next couple of weeks; it had already occurred. Mr Williams submitted that "completion" would have been intended to refer to payment under the agreement rather than its execution. This is not the natural reading of the email and was not supported by any evidence from Mr Brooke. Moreover, even if that were the proper construction, the email would have been seriously misleading: payment was due within the next six days under the terms of the agreement.
Therium continued to press for information in November and December 2015 but was met with no substantive response from Mr Brooke. No copy of the agreement was provided to Therium at the time or until disclosure was later ordered by Teare J in April 2016. The Claim Proceeds were not paid into the Kemp Little account as was clearly required under the terms of the LFA.
Mr. Brooke has given no satisfactory explanation for this failure. In his first affidavit he says that he had been advised by Kemp Little when entering into the LFA that the likely recovery would be substantially in excess of the amounts he would have to pay to Therium and Kemp Little; and that he was advised and believed that whilst the LFA appeared to provide that Therium was entitled to a £3 million contingency fee in addition to return of the £1 million advanced by way of funding, in fact clause 6.6 of the LFA capped the total liability of Cable Plus and Mr Brooke at £1 million. The LFA contained an arbitration clause providing for disputes to be resolved in accordance with the rules of the London Court of International Arbitration, and Therium has subsequently commenced an LCIA arbitration against Cable Plus seeking recovery of the Claim Proceeds on the basis of a contractual entitlement under the terms of the LFA. It would therefore be inappropriate for me to express a final conclusion as to the construction of the LFA. Nevertheless, the interpretation advanced in Mr Brooke's affidavit is not a natural reading of the language used and would be a surprising construction, because it would mean that Therium had agreed to advance an unsecured interest free loan of £1 million without the prospect of any benefit.
In any event, it is clear from the correspondence that, contrary to his assertion in his affidavit, Mr Brooke was not receiving advice from Kemp Little that that was the extent of his or Cable Plus' responsibility. On the contrary, Kemp Little advised on at least two occasions prior to November 2015 that Cable Plus would make no net recovery from any claim proceeds unless and until they reached £4.5 million. Moreover Mr Brooke proffers no real explanation for failing to pay any part of the £1 million which he accepts is due. There was a suggestion, made for the first time in an email of 20 April 2016, that he did not want to pay it to Kemp Little because he was in dispute with them over the advice they gave when entering into the LFA, but he was not prepared to accede to the suggestion on behalf of Therium that it be paid to another firm in...
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