Trafalgar Multi Asset Trading Company Ltd ((in Liquidation)) v James David Hadley
| Jurisdiction | England & Wales |
| Judge | Mr Nicholas Thompsell |
| Judgment Date | 26 October 2023 |
| Neutral Citation | [2023] EWHC 2670 (Ch) |
| Court | Chancery Division |
| Docket Number | Claim No: BL-2020-000294 |
[2023] EWHC 2670 (Ch)
Mr Nicholas Thompsell
sitting as a Deputy Judge of the High Court
Claim No: BL-2020-000294
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF
ENGLAND AND WALES BUSINESS LIST (ChD)
Rolls Building
Fetter Lane
London, EC4A 1NL
Mr Justin Higgo KC and Ms Belinda McRae (instructed by Kingsley Napley LLP) appeared for the Claimant
Mr William Wright appeared for himself and on behalf of CGrowth Capital Bond Ltd
Hearing date: 5 September 2023
INTRODUCTION
This is the second judgment dealing with consequential matters arising from the main judgment in this matter (the “ Liability Judgment”). The Liability Judgment is reported as Trafalgar Multi Asset Trading Co. Ltd v Hadley and ors [2023] EWHC 1184 (Ch) and was handed down on 19 May 2023. This came after a four-week trial dealing with the question of liability in this matter. Full details of the claim were given in the Liability Judgment. I will not repeat them here. I will use in this judgment terms that I defined in the Liability Judgment.
In the Liability Judgment I found for the Claimant in relation to:
i) its claims against Mr Hadley, Mr Chapman-Clark, Pinnacle and Mr Lloyd, in relation to what I described as the Original Conspiracy;
ii) its claims against Mr Hadley, in relation to bribery and conspiracy in relation to Trafalgar's investment in the CGrowth transactions;
iii) its claim against CGrowth based on vicarious liability for bribery, dishonest assistance and unconscionable receipt and its claim for a declaration that the CGrowth bond purchase contracts are void for Mr Hadley's want of actual or apparent authority;
iv) its claims against Mr Hadley for breaches of fiduciary duty; and
v) its claims against Mr Chapman-Clark, Mr Lloyd, Pinnacle, Mr Thwaite and PPL for dishonest assistance and for unconscionable receipt.
However, I found against the Claimant in relation to:
i) its claims against Mr Jones and Titan in relation to any unlawful means conspiracy (including what I described as the Original Conspiracy);
ii) its conspiracy claim against Mr Wright and its claims against him of injury by unlawful means, dishonest assistance, and unconscionable receipt.
In my first judgment dealing with consequentials matters dated 20 July 2023 (reported as Trafalgar Multi Asset Trading Co. Ltd v Hadley and ors [2023] EWHC 1867 (Ch)) I dealt with:
i) Mr Hadley's application for leave to appeal and his application for a stay of execution – I denied both applications;
ii) quantification issues relating to the Claimant's claim;
iii) the Claimant's claim for costs, except that the question whether the Claimant should be entitled to compound interest on pre-judgment damages was reserved;
iv) Mr Jones' claim for costs; and
v) directions for hearing Mr Wright's application for costs and the matter reserved regarding compounding of interest as soon as possible.
This judgment deals with the matters considered at a further hearing on 5 th September 2023 dealing with three matters remaining outstanding:
i) Mr Wright's application for a payment on account of costs;
ii) Trafalgar's application for Mr Wright to be made jointly liable with CGrowth for CGrowth's liability to costs; and
iii) Trafalgar's application for interest to be calculated on the basis of compound, rather than simple interest.
PAPERS RECEIVED
Ahead of this hearing:
i) the Claimant provided a full skeleton argument, supported by a witness statement, a draft order, a bundle for the hearing and an authorities bundle dealing with the matters described above, and
ii) Mr Wright provided a witness statement (his Sixth Witness Statement) in support of his application for costs on account with supporting evidence; he had also previously provided a witness statement (his Fifth Witness Statement) supported by a schedule of costs on form N260.
Unfortunately, owing to a mix-up, whilst I had had a good opportunity to review the Claimant's skeleton argument and bundle of authorities, I received the full hearing bundle only very shortly before the commencement of the hearing. This point was to some extent mitigated by my following Mr Higgo's helpful suggestion that I take a short adjournment to read at least the key witness statements.
After the hearing Mr Wright provided me, within the timeframe I had requested some papers relating to the ownership of CGrowth and slightly outside that period some further papers confirming CGrowth's bondholders and the ownership of Powder River. The Claimant's legal team were given, and took, an opportunity to comment on this documentation before I finalised this judgment.
REPRESENTATION AT THE HEARING
At this hearing:
i) the Claimant was represented by Mr Higgo and Ms McRae;
ii) Mr Wright appeared remotely to represent himself and, to represent CGrowth as its director;
iii) none of the other Defendants was represented.
No party had made an application for an adjournment of the hearing, and I saw no reason not to proceed with it.
MR WRIGHT'S APPLICATION FOR COSTS ON ACCOUNT
Under CPR rule 44.2 (8) where the Court orders a party to pay costs subject to detailed assessment, it will order that party to pay a reasonable sum on account of costs, unless there is good reason not to do so.
Mr Higgo put up various arguments as to why there was a “good reason” not to order a payment on account. In brief, the main arguments may be summarised as follows:
i) Whilst Mr Wright had produced some evidence of payments being made to solicitors Rahman Ravelli, it remained unclear the extent to which the advice provided by that firm was for the benefit of CGrowth or for Mr Wright's benefit, and it appeared that (contrary to Mr Wright's original case) much of the money paid to that firm had come from two companies in which Mr Wright had an interest, Take Flight Equities Inc and Keystone Financial Management Inc (“ Keystone”) rather than Mr Wright.
ii) Mr Wright had included a claim for the time he had spent undertaking work as a litigant in person at a rate of £150 per hour. Whilst he had provided some evidence in support of this, the Claimant did not consider this evidence to be sufficient to prove that he had lost earnings to this extent. The Claimant argued that in the absence of such proof under CPR rule 46.5(4) (b) the Court should apply the Court's standard rate of £19 per hour.
iii) The Claimant considered that Mr Wright's claim for hours spent was inadequately evidenced and appeared to the Claimant to be inflated. Furthermore, it took no account of the fact that Mr Wright, even if he had not been a defendant himself, would have been in court to represent the interests of CGrowth.
iv) Mr Wright's claims for travel and subsistence had not been duly substantiated.
v) Mr Wright had not been consistent in the information he provided about his claims and the Claimant invited the Court therefore not to place any credence on such claims.
In response to these matters, Mr Wright argued that, at best, any of these criticisms went to the quantum of the amount that should be paid on account of costs. They should not displace the principle that there should be a payment on account of costs.
I agreed with Mr Wright's point on this matter: It was obvious that Mr Wright, acting as a litigant in person would have spent substantial time on this matter and would have had significant expenses in travelling from the USA to attend court hearings.
However, the criticisms made by the Claimant should not be ignored in fixing the amount of a payment on account. I accept the point made on behalf of the Claimant that the Claimant would have real difficulty in recovering any costs from Mr Wright if there were to be an overpayment of costs on account.
In particular, it seemed to me that:
i) It was not safe to rely on the invoices from Rahman Ravelli without a better understanding of what these invoices were for and who had paid them. It seemed from the schedule of payments that many of the payments had been made by CGrowth rather than by Mr Wright and that, where Mr Wright had made payments himself, this was during the period where the matters to be determined related to the application for summary judgment on the bribery claim and the subsequent appeal relating to that matter, where Mr Wright was not a party and so work in relation to those matters could not have been for his benefit. I do not say that the question whether CGrowth or Mr Wright paid a particular invoice is determinative of whose cost this was – it is possible that one or the other of the parties could exercise a right of contribution against the other which should be taken into account. However, on my present understanding of the evidence produced, I agreed with the Claimant that it was unclear how far Mr Wright could demonstrate that he had paid, or was liable for, any particular item of costs pursuant to these invoices.
ii) The correct rate for Mr Wright to claim for his own time was a matter that would need to be established when costs are being assessed. I express no opinion on the sufficiency of the evidence that Mr Wright has produced to demonstrate that a rate of £150 per hour would be appropriate, but merely note that he has not yet established this, and it would not be safe to calculate payment on account on the assumption that he would...
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