Tonstate Group Limited & Ors v Rosling King LLP
| Court | Chancery Division |
| Judge | Mr Justice Leech |
| Neutral Citation | [2024] EWHC 2005 (Ch) |
| Date | 31 July 2024 |
| Year | 2024 |
| Counsel | Mr Andrew Fulton Kc,Mr Patrick Lawrence Kc |
Approved Judgment Tonstate v Rosling King BL 2023 001104
Neutral Citation Number: [2024] EWHC 2005 (Ch)
BL-2023-001104
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
BUSINESS LIST (ChD)
31 July 2024
Before:
MR JUSTICE LEECH
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B E T W E E N:
(1) TONSTATE GROUP LIMITED
(in liquidation)
(2) TONSTATE EDINBURGH LIMITED
(in liquidation)
(3) DAN-TON INVESTMENTS LIMITED
(in liquidation)
(4) ARTHUR MATYAS
(5) RENATE MATYAS
Claimants
- and –
ROSLING KING LLP Defendant
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MR ANDREW FULTON KC (instructed by Rechtschaffen Law) appeared on behalf of the
Claimants
MR PATRICK LAWRENCE KC (instructed by Reynolds Porter Chamberlain LLP) on
behalf of the Defendant
Hearing dates: 18 and 19 June 2024
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APPROVED JUDGMENT
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Approved Judgment Tonstate v Rosling King BL 2023 001104
Mr Justice Leech:
I. The Applications
1. By Application Notice dated 9 November 2023 (the “Claimants’ Application”) the
Claimants applied to strike out those parts of the Defence of the Defendant, Rosling
King LLP (“Rosling King”), in which they challenged the correctness of the decision
of Zacaroli J (as he then was) in Tonstate Group Ltd v Wojakovski [2019] EWHC 3363
(Ch). In that decision (to which I will refer as the “Duomatic Judgment”) he held that
number of payments made for the unlawful purpose of defrauding HMRC. For ease of
reference.
2. By Application Notice dated 19 January 2024 (the “Defendant’s Application”)
Rosling King also applied to strike out two of the three claims which the Claimants
advanced against them pursuant to CPR Part 3.4(2) because the relevant paragraphs in
the Particulars of Claim disclosed no reasonable grounds for bringing the claim. They
also applied for reverse summary judgment pursuant to CPR Part 24.2(a)(i) because the
Claimants had no real prospect of succeeding on those claims and because there was no
other compelling reason to deal with them at trial.
3. I heard both applications over two days. Mr Andrew Fulton KC, who appeared for the
Claimants, opened the Claimants’ Application. Mr Patrick Lawrence KC, who appeared
for Rosling King, then made his submissions on the Claimants’ Application and opened
the Defendant’s Application. Mr Fulton then replied to Mr Lawrence before Mr
Lawrence had the last word on his application. Both counsel submitted further materials
after the hearing which I have taken into account in preparing this judgment. Mr Fulton
submitted draft amended Particulars of Claim but Mr Lawrence has not so far made any
submissions in relation to them following the hearing.
II. Procedural History
A. The Claims against Mr Wojakovski
(1) The Claims
4. The background to the Applications was conveniently set out by Zacaroli J in a
Approved Judgment Tonstate v Rosling King BL 2023 001104
subsequent judgment dated 30 April 2021 which he handed down after the Duomatic
Judgment: see [2021] EWHC 1122 (Ch). For present purposes, is not necessary to
describe the issues which he had to determine on that occasion but I cite his summary
of the litigation at [7] to [11] and I gratefully adopt the terms which he defined in bold
(below):
“7. There is a long and complicated background to the underlying
litigation. There are three actions:
(1) Action number BL-2018-000544, a derivative action in which the
claimants, principally Tonstate Group Limited ("TGL") and other
companies in the Tonstate Group and companies in a related group
known as "THH Group", seek the return of money wrongfully extracted
from them by the first defendant, Mr Wojakovski (the "Main Action");
(2) Action number BL-2019-000304, in which the claimants, Mr and Mrs
Matyas, seek the rescission of transfers of shares in TGL made by them
to Mr Wojakovski (the "Shares Claim"); and
(3) Action number BL-2018-002541, an unfair prejudice petition in
which Mr Wojakovski seeks various orders against Mr and Mrs Matyas
and other entities in the Tonstate Group (the "Petition").
8. I provided a summary of the background in a judgment dated 28 April
2020, in relation to an application for a debarring order made by the
convenience, I set out paragraphs 3 to 8 of that judgment:
"3. By way of very brief background, the Tonstate Group is a group of
companies that have been involved in the property investment business
for over a quarter of a century. Mr Wojakovski was formerly married to
Mr Matyas's daughter. The entire group is effectively deadlocked, as a
result of the current dispute between Mr Wojakovski (who is the
beneficial owner of 50% of the group) and Mr Matyas (who, with his
wife, is the beneficial owner of the other 50% of the group).
4. It is common ground that both Mr Matyas and Mr Wojakovski had, for
some years, been extracting funds from the Tonstate Group without
lawful authorisation. Mr Wojakovski contends that all of the extractions
that he made were done with Mr Matyas' knowledge and consent. Mr
Matyas denies this. In light of Mr Wojakovski's admission that the
extractions made by him were done for the purpose of defrauding the
revenue, I concluded (for reasons set out in a judgment dated 5 December
2019) that even if all the shareholders in the Tonstate Group had
consented to the extractions, Mr Wojakovski's defence based on the
Duomatic principle was bound to fail.
5. There being no other defence raised to the Main Claim, on 20
November 2019 I therefore granted judgment in the Main Action against
Mr Wojakovski for the sum of £12,994,642.43, being the sum of the
monies he admitted he had wrongfully extracted from the Tonstate Group
companies. In addition an Account was ordered against him of all
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