Tonstate Group Ltd ((in Liquidation)) v Edward Wojakovski & 11 Ors

Hearing date: 10 April 2024

Approved Judgment

This judgment was handed down at 12pm on Friday 26 April 2024 by circulation to the parties or their representatives and by release to the National Archives.

Introduction & Overview

The Tonstate Group of companies has been the victim of an admitted fraud, involving the unauthorised extraction of company funds by Mr Edward Wojakovski totalling over £13m. The relevant sums have come to be referred to as “ the Extractions”.

Zacaroli J entered Judgment against Mr Wojakovski (I will refer to him as Edward) in January 2020. The Judgment of Zacaroli J recognised the Claimants' proprietary interest in the Extractions, which at the time had been calculated as amounting to £13,594,642.43.

Since then, the Claimants have been seeking to recover the Extractions. Some of their efforts have been successful, but I was told at the hearing before me on 10 April 2024 that many millions of pounds remain unaccounted for.

That being so, this Judgment is concerned with another of the Claimants' efforts to make progress. This involves seeking information and documents relating principally to (i) assets held in an Israeli trust, and (ii) bank accounts outside Israel held in the name of Edward's father, now deceased, Mr Gideon Wojakowski.

The Israeli trust, known as the “ Wojakowsi Brothers Trust”, was established under the joint will of the late Gideon Wojakowski and his wife Miriam Wojakowski. Mrs Wojakowski is sadly also deceased. The Trustee, who is also executor of the joint estate of his parents, is the Respondent to the present application, Mr Gil Wojakowski. Gil is Edward's brother. The beneficiaries are Edward, Gil and their two other brothers. The trust assets are understood to include the beneficial interest in a BVI Company called Maxima Corporate Holdings Limited (“ Maxima”). Edward's position has been that the beneficial interest in Maxima was previously owned by his parents, and so it can be expected to have fallen within their joint estate after the death of the last surviving spouse.

The application is brought against Gil on the basis that he can be expected to have access to, and control of, the documents of the Wojakowski Brothers Trust, and access to, and control of, documents relevant to the bank accounts of his late father. The basis for the application is the Court's power to make Orders for disclosure in aid of proprietary claims – that is to say, disclosure Orders to allow a Claimant to find out what has become of his own property: see Bankers Trust v. Shapira [1980] 1 WLR 1274.

I should mention that the Claimants' application as originally issued named both Edward and Gil as Respondents. At the hearing on 10 April 2024, however, I adjourned the application as against Edward. That was because of his lack of legal representation, which was a matter of particular concern given that in a Judgment in December 2023, Edwin Johnson J held Edward in contempt of Court and imposed a suspended sentence of 4 months imprisonment on him. The conditions of that suspended sentence include compliance by Edward with all Orders of the Court in the period up to 19 December 2024, which will obviously encompass any new Order made on the Claimants' present application against him. That being so, it seemed to me particularly important that Edward have the benefit of legal representation, if he can procure it, on the hearing of the application as it affects him. So I adjourned the matter against him to the first available date on or after 7 May. But the application as against Gil continued, and as I mentioned in submissions at the hearing, he seems in any event a more natural Respondent to an application concerning the Wojakowski Brothers Trust and Gideon Wojakowski's bank accounts, given his status as trustee and executor.

A particular feature of this case is that Gil was not a Defendant to the original proceedings, unlike Edward. Another important feature is that Gil is an Israeli citizen and is resident in Israel. Likewise the Wojakowski Brothers Trust is an Israeli trust, governed by the law of Israel. These factors have certain consequences, as I will explain, in terms of the Court's power to make an Order affecting Gil, and regulating his conduct outside England & Wales.

Personal Jurisdiction

The first point is that the Court needs to be satisfied that it has personal jurisdiction over Gil. By this I mean the jurisdiction to adjudicate on the question whether in principle he should be made subject to an Order directed to him personally and requiring him to act in a particular way – here, to disclose documents and information.

There was argument about this at the hearing before me. At that stage, Gil was represented by solicitors and by counsel, Ms Vora. Despite Ms Vora's thoughtful submissions, made both in writing and orally, I determined the question of personal jurisdiction against Gil. That is because Gil is a director of an English company, Keystone MHD (General Partnership) Ltd, and had provided a registered address for service to Companies House under the provisions of s.1140 Companies Act 2006. Although his registered address has now changed to an address in Israel, in December 2023 when the present application was served on him, Gil's registered address for service was at 84 Brook Street, Mayfair, London. That is where the application was served, and service was thus good service and sufficient to establish personal jurisdiction over Gil. It does not matter that the application is not concerned with his business as a director of Keystone MHD (General Partnership) Limited, because s. 1140(3) provides that the section applies, “ whatever the purpose of the document in question.” The Editors of Dicey, Morris & Collins on the Conflict of Laws (16 ^th Edn.) (“ Dicey”), in dealing with s.1140 at para. 11–048, say that that its effect is that “… service is good service on the director in his or her personal capacity, whether or not he or she is being sued as a director of the registered company.” So I think that service was certainly good service, and that is enough to give the Court personal jurisdiction in the sense I have described.

Ms Vora had other points, however, including an argument that England was not the forum conveniens for any dispute affecting Gil in relation to the Wojakowski Brothers Trust or his late father's bank accounts. However, I am not persuaded that the doctrine of forum non conveniens, which is concerned with where a case may most suitably be tried for the interests of all the parties and the ends of justice (see per Lord Goff in Spiliada Maritime Corp v. Cansulex [1987] 460 at p. 476C), has relevance in the present context. The action has already been tried. The context now is different: the present concern is about whether disclosure should be required in order to vindicate the Claimants' already established right to reclaim their property (or the traceable proceeds of such property). I do though consider that many of the same points relied on by Mr Vora are relevant to consideration of what I will describe as the question of subject matter jurisdiction. I will come back to deal with this below.

For now though, and before saying something more about the relevant factual background, I should record that at the hearing before me, and after I had indicated my view that the Court did have personal jurisdiction over Gil, Ms Vora and Gil's solicitors, having taken instructions, thereafter played no further part in the hearing. That was because of a concern that by doing so, Gil might prejudice his position as regards recognition and enforcement of any Order in Israel. He did not wish to take any further steps which might, in the eyes of the Israeli Court, amount to a submission for the purposes of recognition and enforcement in Israel. That was, of course, a matter for him.

The question of recognition and enforcement abroad is, though, a different question to the question whether this Court should make an Order against a party over whom it has personal jurisdiction. At the conclusion of the hearing on 10 April, and having heard further submissions from Mr Fulton KC, I indicated that I would make an Order against Gil. This Judgment sets out my reasons for doing so. Before moving on to set out the remainder of such reasons, it is useful to summarise certain further points of factual background, which are relevant to the analysis which follows.

Some Additional Background

A good starting point is to consider the route the Extractions took, and to look at some of what is known about the efforts made to disguise their destination. This is not straightforward. The evidence is necessarily fragmentary. Nonetheless, a sufficiently clear picture emerges for present purposes. I summarise below what seemed to me the main points arising from Mr Fulton KC's submissions.

Admitted Payments by the EW Companies to Maxima

Edward was the owner and/or controller of a number of companies, referred to as the “ EW Companies”. These included Belfast Capital Limited, incorporated in the Isle of Man.

In a Witness Statement in the proceedings dated 23 April 2020, Edward accepted that funds representing the...