Vincent Aziz Tchenguiz and Others v Grant Thornton UK LLP and Others
| Jurisdiction | England & Wales |
| Judge | Mr Justice Knowles |
| Judgment Date | 16 December 2016 |
| Neutral Citation | [2016] EWHC 3727 (Comm) |
| Docket Number | Case No: CL-2014-001023 and CL-2015-000610 |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 16 December 2016 |
[2016] EWHC 3727 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Justice Knowles CBE
Case No: CL-2014-001023 and CL-2015-000610
Christopher Hancock QC, Romie TagerQC, Jonathan Crystal, Charlotte TanandKatharine Stock (instructed by McGuire Woods London LLP) for the VT Claimants
Alain Choo Choy QC and John Robb (instructed by Stephenson Harwood LLP) for the RT Claimants
Adrian Beltrami QC and James MacDonald (instructed by Simmons & Simmons LLP) for the First, Second and Third Defendants in both sets of proceedings
Robert Miles QC, Jeremy GoldringQC, Stephen RobinsandTom Gentleman (instructed by Travers Smith LLP) for the Fifth Defendant in the second set of proceedings
Hearing dates: 5, 6 and 7 October 2016
Introduction
Mr Vincent Tchenguiz and Mr Robert Tchenguiz are brothers. They are businessmen and investors. They have brought two separate sets of proceedings ("the VT Proceedings" and "the RT Proceedings").
Rawlinson and Hunter Trustees S.A., the Second Claimant in both sets of proceedings, is trustee of Tchenguiz family trusts. The Third Claimant in the VT Proceedings ("CBG") is an adviser to one of those trusts, the Tchenguiz Family Trust ("the Trust"). The Fourth Claimant and the companies identified in the Schedule to the Claim Form in the VT Proceedings are described as property and investment companies ultimately owned by the Trust. The terms "VT Claimants" and "RT Claimants" have been used by all parties to describe the Claimants in the VT Proceedings and the RT Proceedings respectively.
Each of the VT Proceedings and the RT Proceedings involve claims against Grant Thornton UK LLP ("Grant Thornton") and two partners of that firm, Mr Akers and Mr Hamedani (together with Grant Thornton, "the GT Defendants"). These claims are alleged to arise from what is alleged to have been their involvement in an investigation ("the Investigation") by the Serious Fraud Office ("SFO") into Mr Vincent Tchenguiz and Mr Robert Tchenguiz and others.
In the course of the Investigation, in March 2011 a search warrant was executed (including at CBG's offices) and arrests of Mr Vincent Tchenguiz and Mr Robert Tchenguiz were made. The Investigation was ended in 2012, without any allegation of criminal conduct or other wrongdoing being continued or advanced against Mr Vincent Tchenguiz or Mr Robert Tchenguiz.
The particular claims or causes of action the VT Claimants or the RT Claimants contend they have are in conspiracy and for malicious procurement and execution of the search warrants and malicious prosecution. Damages are claimed by way of remedy, including aggravated and exemplary damages.
A fuller summary of the dispute, albeit as directed to one Defendant (the then Fifth Defendant) in particular and the VT Proceedings in particular, is available at [2016] EWHC 865 (Comm) [6]–[23]. In their written argument on this hearing, the VT Claimants summarise their case in the VT Proceedings as follows:
"The [VT] Claimants maintain that they are the victims of a serious and far-reaching conspiracy, whereby the GT Defendants, together with the Fifth Defendant … made numerous false allegations of criminal misconduct against VT and his family's trust's companies … to the SFO, instigating a major investigation into their affairs. This, in turn, led to VT's arrest …, searches of his home and business premises and seizure of his personal and business property …. One of the objects of the conspiracy was to force the [VT] Claimants into a disadvantageous settlement of various proceedings pending in this Court and in Iceland. The Defendants succeeded in that objective. Given the significant personal and commercial pressure brought to bear upon them, by an agreement dated 17 September 2011 (the "Settlement Agreement"), the [VT] Claimants (other than CBG) agreed to release certain claims."
With the exception of CBG the VT Claimants (but not the RT Claimants) are parties to an agreement entitled "Settlement Agreement" with Kaupthing Bank hf ("Kaupthing") which contains various releases as part of an overall compromise. The Settlement Agreement was one of a number of agreements dated 17 September 2011.
Kaupthing was at all material times in an insolvency proceeding in Iceland. Mr Jóhannsson, the Fifth Defendant in the RT Proceedings, is also sued in relation to what is alleged to have been his involvement in the Investigation. He was appointed to the Resolution Committee and then to the Winding Up Committee of Kaupthing.
Mr Jóhannsson was a Defendant to the VT Proceedings too until (as summarised below) he applied for summary judgment ("the First Application"). He was successful in that application for the reasons given in my judgment dated 20 April 2016 ("the First Judgment"). Like the GT Defendants, Mr Jóhannsson was not a party to the Settlement Agreement but relies on the Contracts (Rights of Third Parties) Act 1999 to enforce terms of the Settlement Agreement as a third party.
On the present hearing, the GT Defendants seek summary judgment in the VT Proceedings, and the GT Defendants and Mr Jóhannsson seek summary judgment in relation to one of the claims (known as the Somerfield Proceeds Claim) in the RT Proceedings.
Approach to summary judgment
The Court may only proceed by way of summary judgment where it is entitled to do so in accordance with the applicable rules and established principles. The rules and principles were not materially in dispute.
I mention five points that have particular bearing in this case.
The first is a point that I expressed in the First Judgment. If the VT Claimants are not entitled to advance the claims they do in the VT Proceedings because they have agreed not to, then if the matter proceeds to trial one of the things that it was agreed should not happen will have happened, and that damage will have been done. It is important that the Court is prepared to deal with this aspect at this stage if it properly can.
The second point is that the summary judgment procedure is not a form of mini trial. However that does not mean the Court should refuse to scrutinise closely the question whether a claim should not have been made because it demonstrably has no foundation.
The third point is that I recognise that the allegations made are of a very serious nature. That circumstance highlights the importance of declining summary judgment where the test for summary judgment is not met, and of granting summary judgment where the test is met.
The fourth point is that I have borne closely in mind the fact that some of the argument arises in areas of law that are (in some respects at least) still developing. In these circumstances it has been important to look closely to see whether the respects in which the law is developing have an ultimate bearing on the case.
The fifth point is that I have also borne in mind throughout that the VT Claimants and the RT Claimants contend that there are material documents disclosed by the SFO that, because of certain prohibitions, they cannot at present rely on but which they may wish to rely on at a trial.
The Settlement Agreement
The Settlement Agreement contained these elements in summary (in this paragraph when I refer to the VT Claimants I leave aside CBG for the moment):
(a) Mutual representations and warranties of authority.
(b) Representations and warranties by the VT Claimants to Kaupthing and others (including what were defined as the "Kaupthing Released Parties") that save with respect to what were defined as "Specified Disputes" they were not aware of any fact or matter that gave rise to or might give rise to a cause of action by any of the VT Claimants against Kaupthing and others (including the Kaupthing Released Parties).
(c) Representations and warranties by Kaupthing to the VT Claimants that again save with respect to what were defined as "Specified Disputes" it was not aware of any fact or matter that gave rise to or might give rise to a cause of action by any of Kaupthing and others (including the Kaupthing Released Parties) against any of the VT Claimants.
(d) An acknowledgement of each party that "it has been represented by legal counsel of its own choice throughout all negotiations preceding the execution of this Settlement Agreement and that it has executed this Settlement Agreement with the consent and advice of such legal counsel".
(e) Provisions bringing proceedings in Iceland and in London to an end after the parties to the Settlement Agreement had entered into a restructuring agreement.
(f) Mutual releases by the VT Claimants of Kaupthing and others, and by Kaupthing of the VT Claimants, from any claim arising out of what was defined as "the Dispute" (effectively, any dispute subject to certain qualifications, but including the Specified Disputes).
(g) Mutual releases by the VT Claimants of Kaupthing Released Parties, and by Kaupthing of what were defined as "TFT [i.e. Trust] Released Parties", from any claim arising out of the Specified Disputes, subject to certain qualifications.
(h) Various further mutual covenants and indemnities.
The Appendix to the First Judgment set out, at Part 1, the matters recited by the parties at the commencement of the Settlement Agreement. Part 2 of that Appendix set out some of the terms defined in the...
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