Vincent Aziz Tchenguiz and Others v Grant Thornton Uk Llp and Others William Proctor (Third Party)
| Jurisdiction | England & Wales |
| Judge | Mr Justice Knowles CBE,Mr Justice Knowles |
| Judgment Date | 20 April 2016 |
| Neutral Citation | [2016] EWHC 865 (Comm) |
| Date | 20 April 2016 |
| Court | Queen's Bench Division (Commercial Court) |
| Docket Number | Case No: CL-2014001023 |
[2016] EWHC 865 (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-2014001023
and
Robert Miles QC, Jeremy GoldringQC andTom Gentleman (instructed by Travers Smith LLP) for the Fifth Defendant
Romie Tager QC, David CavenderQC, Jonathan CrystalandAlexander Brown (instructed by McGuire Woods London LLP) for the Claimants
Hearing dates: 19 and 20 January 2016
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Introduction
Mr Johannsson, the Fifth Defendant, was appointed to the Resolution Committee and then to the Winding Up Committee of Kaupthing Bank HF ("Kaupthing").
Mr Vincent Tchenguiz ("Mr Tchenguiz"), the First Claimant, is a businessman and an investor. He is a beneficiary of the Tchenguiz Family Trust ("the Trust"). The Second Claimant is trustee of the Trust, and the Third Claimant ("CBG") is an adviser to the Trust. The Fourth Claimant and the companies identified in the Schedule to the Claim Form are described as property and investment companies ultimately owned by the Trust.
The Claimants wish to advance claims against Mr Johannsson arising from what they allege to be his involvement in an investigation ("the Investigation") by the Serious Fraud Office ("SFO") into Mr Tchenguiz and others. In the course of the Investigation a search warrant was executed at Mr Tchenguiz's home and at CBG's offices on 9 and 10 March 2011. Mr Tchenguiz was arrested on 9 March 2011. The Investigation was ended on 18 June 2012, without any allegation of criminal conduct or other wrongdoing being continued or advanced against Mr Tchenguiz.
The present application concerns the question whether the Claimants are entitled to advance these claims against Mr Johannsson. The question arises because with the exception of CBG the Claimants are parties to an agreement entitled "Settlement Agreement" which contains various releases. It is a question that Mr Johannsson says is appropriate for disposal on a summary judgment application.
The Settlement Agreement was one of a number of agreements dated 17 September 2011. Mr Johannsson was not a party to the Settlement Agreement but he relies on the Contracts (Rights of Third Parties) Act 1999 to enforce terms of the Settlement Agreement as a third party.
The Claims
The particular claims or causes of action the Claimants contend they have against Mr Johannsson are in conspiracy and for malicious procurement and execution of the search warrants and malicious prosecution ("the Claims"). Damages are claimed by way of remedy, including aggravated and exemplary damages.
The circumstances in which the Claims are alleged by the Claimants to arise against Mr Johannsson may be summarised as follows. I have sought to derive the summary as closely as I can from the Claimants' Particulars of Claim. I have not found the Particulars of Claim easy to follow in places. The Claims and the allegations on which they are based are denied by Mr Johannsson.
In early 2008 Kaupthing provided a loan of £100 million to Pennyrock Limited ("Pennyrock") and took security for that lending and for lending to Oscatello Investments Limited ("Oscatello"). The security included charges over shares in BVI registered intermediate holding companies of companies owning ground rent portfolios (the "ground rent-related security"). The ground rent portfolios were already directly or indirectly subject to security in favour of senior lenders.
In due course the security taken by Kaupthing was "purportedly" enforced and Mr Johannsson was appointed a director of all or some of the BVI companies. Proceedings were commenced in the Commercial Court to challenge those appointments. Mr Johannsson worked with others on a report dated 9 February 2009 on the security that had been taken for the lending to Oscatello.
The Claimants allege that in 2009 Mr Johannsson agreed with others "to instigate, encourage and/or direct an SFO investigation into the collapse of Kaupthing" and Mr Tchenguiz and others. It is alleged they agreed to do so "by making false allegations of criminal conduct or other wrongdoing". The conspiracy alleged in this way is said to include misuse of the SFO's powers under section 2 of the Criminal Justice Act 1987 and the obtaining of information to which Mr Johannsson and others were not entitled.
The intention, allege the Claimants, was to cause the SFO to put pressure on various persons including Mr Tchenguiz and enable the obtaining of documents and information from the SFO that might facilitate the realisation of security held by Kaupthing. The Claimants go on to allege that the conspiracy included agreement by Mr Johannsson with others that, to encourage the senior lenders to call in their security, those senior lenders would be given allegations (which were false) of criminal conduct and wrongdoing by Mr Tchenguiz and told that the SFO was or would be looking into matters.
A meeting on 29 October 2009 was held with the SFO. Mr Johannsson is not alleged to have attended this meeting but an exchange of information with the SFO followed, and in turn a wider investigation. Mr Johannsson is alleged to have been present at a meeting on 24 March 2010 at which allegations that Oscatello was insolvent by late 2007, a position said to have been "masked", were made, as well as a statement (said to be false to Mr Johannsson's knowledge) that the ground rent-related security taken by Kaupthing was believed to be bogus.
Proceedings followed in the Commercial Court and in the District Court of Reykjavik. Mr Johannsson is alleged at this point "either as part of the original conspiracy … or a new conspiracy" to have agreed with others "to make explicit false allegations to the SFO that [Mr Tchenguiz] had acted criminally in particular with respect to [the loan to Pennyrock] with the aim to turn the focus of the [Investigation] firmly towards [Mr Tchenguiz among others]", to include the instigation of a criminal process against Mr Tchenguiz, and to continue making to senior lenders false allegations about Mr Tchenguiz or the SFO's investigation of those allegations.
Mr Johannsson's purpose is alleged to have been as before but now to include pressure on Mr Tchenguiz and others to force them to compromise the proceedings in the Commercial Court and the District Court of Reykjavik. Mr Johannsson is alleged to have conveyed something of this threat in August and September 2010. As regards the alleged continued making of false allegations to senior lenders the purpose is said to have been to make it more likely that some or all of the Fourth Claimant companies would collapse.
In a conference call with the SFO on 9 September 2010, in which Mr Johannsson is not alleged to have been a direct participant, false allegations or representations about Mr Tchenguiz' conduct (or that there were good reasons to reach adverse conclusions about his conduct) are alleged to have been made. The suggestion was conveyed (as, it is alleged, was intended by Mr Johannsson and others) that a report had been prepared demonstrating the conduct after full investigation. The SFO were later to read, but not copy, drafts of reports, and this, it is alleged, must have been with the authority of Mr Johannsson, among others. The reports could not have supported the allegations, say the Claimants, because no supporting evidence existed, and Mr Johannsson and others knew this. If there was supporting evidence in the reports it must have been false, say the Claimants, and was introduced into the reports in furtherance of the conspiracy to mislead the SFO.
The conduct said to have been alleged against Mr Tchenguiz included the provision of false information, including as to valuation, to Kaupthing, to other banks and to auditors when the loan to Pennyrock was being agreed and the ground rent-related security taken. In addition Mr Tchenguiz was alleged to have wrongly applied the loan to Pennyrock "for his own benefit and to repay debts". The allegations were, it is alleged, repeated later in meetings, with an allegation that Kaupthing had undertaken almost no due diligence in relation to the loan to Pennyrock and taking of the ground rent-related security.
The result was, according to the Claimants, an understanding by the SFO that Mr Tchenguiz had deceived Kaupthing in March 2008 to accept the ground rent-related security by his not disclosing the position in relation to the other (senior) security which made it allegedly worthless to Kaupthing. The Claimants allege that Mr Johannsson and others knew that the SFO trusted him and others, or that by reason of lack of its own resources the SFO would accept allegations made by him and others against Mr Tchenguiz.
At least some of the intended approaches to senior lenders were carried out, according to the Claimants, including by Mr Johannsson directly or indirectly. Two were "to discuss the...
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