Trustor Ab and Another (Claimant) Barclays Bank Plc (Defendant) F. Van Lanschot Bankiers (Luxembourg) Sa and Another (Defendant)
| Jurisdiction | England & Wales |
| Judge | MR JUSTICE RIMER |
| Judgment Date | 24 October 2000 |
| Judgment citation (vLex) | [2000] EWHC J1024-2 |
| Court | Queen's Bench Division (Administrative Court) |
| Date | 24 October 2000 |
[2000] EWHC J1024-2
IN THE HIGH COURT OF JUSTICE HC 1999 02459
CHANCERY DIVISION
Royal Courts of Justice
Mr Justice Rimer
Mr Adrian Pay (instructed by Biddle) appeared for the
Claimant, Trustor AB.
Mr Christopher Carr Q.C. and Mr Graeme Halkerston (instructed by Stephenson Harwood) appeared for the Part 20 Defendant, F. Van Lanschot (Bankiers) Luxembourg SA.
Mr Robin Potts Q.C. and Mr Andrew Onslow (instructed by Dibb Lupton Alsop) appeared for the Defendant, Barclays Bank PLC.
(As approved)
Introduction
This application is one dated 21 August 2000 by F. Van Lanschot Bankiers (Luxembourg) SA ("Van Lanschot"). Van Lanschot carries on a banking business in Luxembourg and is a subsidiary of a major Dutch bank. Pursuant to an order made by Master Bowman on 19 June 2000 it has been added as a Part 20 defendant to an action for damages currently pending in the Chancery Division between Trustor AB, a Swedish company ("Trustor"), which is the claimant, and Barclays Bank PLC ("Barclays"), which is the defendant. The joinder of Van Lanschot was made on the application of Barclays. The basis of the joinder is that Barclays claims that if, which it denies, it is liable to Trustor in damages, it is entitled to a contribution from Van Lanschot in respect of such liability. It relies on the Civil Liability (Contribution) Act 1978.
Barclays claims that it did not need the leave of the court to serve Van Lanschot out of the jurisdiction. It relies on the Brussels Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters ("the Convention"). Van Lanschot's position is that it disputes that the Convention affords any assistance to Barclays, and it claims that for one or other of a variety of reasons the court should dismiss or stay the Part 20 proceedings. That is the issue which has been argued before me. Mr Christopher Carr Q.C. and Mr Graeme Halkerston appeared for Van Lanschot. Mr Robin Potts Q.C. and Mr Andrew Onslow appeared for Barclays.
Background Facts
The facts can be stated fairly shortly. In the summer of 1997 Trustor was a cash rich company with its shares quoted on the Swedish stock exchange. In about June 1997 Lord Moyne purchased for some SEK241m (approximately � 19m) 17% of Trustor's equity, a holding carrying 51% of its voting rights. On 13th June 1997 he established a new board of four, of whom two were himself and Lindsay Smallbone. On 18th June 1997 Lord Moyne and Mr Smallbone opened some sterling and SEK accounts for Trustor at Barclays Cheapside branch and between then and 25th June 1997 transferred some SEK770m (about �61m) of Trustor's money to those accounts.
Between then and November 1997 some SEK 485m (�38.8m) are said by Trustor to have been misappropriated from the Barclays accounts. Very large payments appear to have been made to individuals and companies with no apparent right to them. Trustor asserts that this was a theft in which Lord Moyne and Mr Smallbone and their associates were the prime movers. It claims that the other members of the board were kept in the dark as to what was going on, and that they only learnt about it in November 1997. At that point the Swedish police were called in to investigate, after which Trustor later started civil proceedings against a variety of defendants, including Lord Moyne and Mr Smallbone and companies associated with them. The proceedings which are of direct relevance for present purposes are the following ones.
First, on 11th November 1998 Trustor sued Van Lanschot in the Luxembourg Commercial Court claiming damages for breach of contract, delict or quasi-delict. The basis of that claim is that on 30th June 1997 the Lord Moyne camp opened a Trustor account with Van Lanschot. On 1st July 1997, presumably for audit purposes, Van Lanschot wrote a letter to Trustor's head office stating that Trustor's balance with it on 30th June 1997 was SEK 293m. Trustor claims that that was a dishonest piece of window dressing to which Van Lanschot must have been a knowing party. The complaint is that the Trustor account only held that balance for the briefest snapshot of time, since when Van Lanschot wrote its letter it knew that the money had only been transferred to Trustor's account from Lord Moyne's account on 30th June and it knew also that it had already received instructions to effect a reversal of that transfer on 1st July. Trustor's complaint against Van Lanschot is that this letter misled the Trustor board members into believing that Trustor had assets which it did not, and diverted them away from a discovery of the misappropriations out of the Barclays account. Trustor claims that, but for such misleading, it would have discovered the fraud in July 1997.
Secondly, there are also proceedings pending in Luxembourg relating to a fund of SEK417m. This arises out of some deft dealing by Lord Moyne in November 1997, when he raised this sum from a Cayman Island company called International Trade and Credit Bank Limited ("ITC"). For a brief period, this money was held to the credit of Trustor's account with Van Lanschot, but ITC quickly asserted that it was the true owner of the money and asserted a claim to it. On 19th November 1997, on ITC's application, the Luxembourg court made an order freezing this money. On 13th March 1998 ITC sued Trustor in Luxembourg claiming to be entitled to the money, and on 14th October 1998 Trustor made a claim against ITC, also in Luxembourg, claiming that it, Trustor, was entitled to it.
Thirdly, on 24th May 1999 Trustor commenced its action against Barclays in the Chancery Division. The basis of the claim is that Barclays should have realised that the dealings with its Trustor Cheapside accounts were thoroughly suspicious and that it breached the various duties it owed Trustor by allowing the dissipations of its money from those accounts to take place. The claim is for some SEK303m (�20m). If Trustor is entitled to, and were to recover, the SEK417m it is claiming in the ITC proceedings in Luxembourg, the effect would appear to be that (together with other recoveries it has already made), Trustor would in fact have suffered no loss as a result of the operations of the Barclays accounts, and would not be entitled to any damages against Barclays.
Fourthly, on 19th June 2000 Master Bowman gave Barclays leave to join Van Lanschot as a Part 20 defendant. By then Barclays had seen the damages claim made by Trustor against Van Lanschot in Luxembourg, and that claim is the direct inspiration for Barclays' Part 20 claim. Barclays denies liability to Trustor, but it claims that, if it is liable, then Van Lanschot caused the same damage by its own breaches of duty to Trustor and should contribute to any damages payable.
Fifthly, on 10th October 2000 (two days before the start of the hearing before me) Van Lanschot served Barclays with proceedings which it had itself very recently commenced in Luxembourg. That seeks the joinder of Barclays to the Trustor/Van Lanschot proceedings in Luxembourg. Van Lanschot will ask the court in those proceedings to determine that the loss asserted by Trustor was not caused by Van Lanschot, but was caused by Barclays, and if necessary it also claims an indemnity or a contribution from Barclays. The first return date of the "assignation" which Van Lanschot has so served on Barclays is 8th December 2000.
From that account, it emerges that a key to all this litigation might well lie in an early resolution of the Trustor/lTC proceedings in relation to the SEK417m. That, however, is not in prospect. That is because on 14th October 1999 the civil proceedings in Luxembourg to which I have referred (apart only from Van Lanschot's most recent assignation) have been stayed until the final disposal of possible criminal proceedings in Luxembourg. That stay will, however, presumably also be extended to the recent Van Lanschot claim, since one of the objectives of that claim is to have it joined with the Trustor/Van Lanschot claims. The effect of the stay is that the Luxembourg proceedings have not proceeded beyond the issue and service of the originating assignations. The evidence records the difficulty in making estimates as to when, because of the stay, the civil litigation in Luxembourg might be disposed of. Mr Loesch, who is Van Lanschot's Luxembourg lawyer, estimates that the stay could result in the litigation in Luxembourg not being concluded for at least three years, and that it is possible that it may take up to eight years.
I can now turn now to the various issues which I have to decide.
Mr Carr raised two points under the Act. Their thrust was that the court has no jurisdiction under it to order a contribution by Van Lanschot in favour of Barclays so that the Part 20 proceedings should be halted now. His arguments turned on s.l(l) and (6) and s.6(4) of the Act which read as follows:
"1-(1) Subject to the following provisions of this section, any person liable in respect of any damage suffered by another person may recover contribution from any person liable in respect of the same damage (whether jointly with him or otherwise). �
(6) References in this section to a person's liability in respect of any damage are references to any such liability which has been or could be established in an action brought against him in England and Wales by or on behalf of the person who suffered the damage; but it is immaterial whether any issue arising in any such action was or would be determined (in accordance with the rules of private...
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