Walbrook Trustee (Jersey) Ltd and Others v Fattal & Others
| Jurisdiction | England & Wales |
| Judge | Lord Justice Lawrence Collins,Lord Justice Moses,Lady Justice Arden DBE |
| Judgment Date | 11 March 2008 |
| Neutral Citation | [2008] EWCA Civ 427 |
| Docket Number | Case No: A3/2007/1541 |
| Court | Court of Appeal (Civil Division) |
| Date | 11 March 2008 |
[2008] EWCA Civ 427
Lady Justice Arden Dbe
Lord Justice Moses and
Lord Justice Lawrence Collins
Case No: A3/2007/1541
A3/2007/1541(A)
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT, CHANCERY DIVISION
(SIR FRANCIS FERRIS)
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr G Bompas QC (instructed by Memery Crystal LLP) appeared on behalf of the Appellant
Mr T Seymour (instructed by Fladgate Fielder) appeared on behalf of the First and Second Respondents. Ms E Talbot Rice (instructed by Reynolds Porter Chamberlain) appeared on behalf of the Third, Fourth, Fifth and Sixth Respondents.
This is an appeal with the permission of Carnwath LJ from orders made on 22 June 2007 by Sir Francis Ferris sitting as a judge of the Chancery Division given in two actions relating to Berkeley Court, which is a large mansion block at the corner of Baker Street and Marylebone Road with many flats and some commercial units on the ground floor, and parking and storage space in the basement.
I start with an overview which will inevitably oversimplify matters. The block was acquired in 1989 by a consortium of four persons or groups of persons who owned 25% each. First, the trustees of a trust known as the Delta Trust, of which the ultimate beneficiaries are members of the Dangoor family; secondly, the trustees of a trust known as the Sofaer Trust; which was connected with a Mr Charles Sofaer; thirdly, Mr Salim Dangoor; and fourthly Mr William Fattal and his brother Mr Elias Fattal in equal shares.
The arrangement was governed by a joint venture agreement entered into in that year. The agreement contained a right of pre-emption, exercisable by the other persons beneficially interested in the event of any of the persons interested wishing to sell his or its interest to a third party.
The legal estate in the block is vested in an English company called Berkeley Court Investments Ltd which is wholly owned by Baker Street Ltd, an Isle of Man company I think, whose shares are held in trust for the underlying trust interests.
The Fattal interests are held through an offshore settlement of which the trustees are, I believe, Rysaffe Ltd and Walbrook Trustees (Jersey) Ltd (to which I shall refer as Walbrook, including its associated companies and other entities) and Walbrook was also alone or jointly with other persons or trust corporations the trustee of the Delta Trust and the Sofaer Trust.
Salim Dangoor's interest was the subject of a declaration of trust in favour of a BVI company called Interlands and subsequently transferred to something described as the Sharet Trust, of which Walbrook is one of the trustees; and that aspect of the matter has become a major source of contention.
Since 1989 the general management of the property has been undertaken by Walbrook. The joint venture agreement envisaged that the functions of something called a coordinator might be delegated to some other party who would then become entitled to the fee and it appears that a Mr David Dangoor has carried on certain management functions under powers delegated by Walbrook. Those powers came to be exercised by Mr Dangoor's company, Monopro Ltd.
Disputes have arisen between the Fattals and the Dangoors. The Fattals complain about the way in which the block has been run by Walbrook and the Dangoors, or Mr David Dangoor, and also claim that they (or the Fattal trusts) have pre-emption rights over the 25% share in the block which was transferred to the Sharet Trust.
The disputes between the Fattals and the Dangoors put Walbrook in a position where it has been called upon to do different things by different groups of beneficiaries and had the result of preventing it from acting decisively in relation to any of the main problems which have arisen. Because it was caught in the middle of the dispute Walbrook issued Part 8 proceedings seeking directions for the sale of the block.
The Fattals do not think the block should be sold, and say that if it is to be sold Walbrook should not have the conduct of the sale. The Fattals brought an action against Walbrook and Mr David Dangoor and his company (described here as “the Part 7 proceedings”), making (in 161 paragraphs) a number of allegations of varying sizes, ranging from the Sharet issue which I have identified to a claim that Walbrook, in charging £570 per hour for its services, charged rates which were grossly excessive.
The real issues between the parties are these. First, whether the block should be sold and if so by whom: the court was told that the block might be worth as much as £24 million. Secondly, whether the Fattals have pre-emption rights in respect of the 25% share in the property: if they had such a right the court was told that they could purchase it for some several hundred thousand pounds below its current market value. Third, whether Walbrook and David Dangoor and his company have mismanaged the block: the monetary value of the claims in this category appears to be modest compared with the time, energy and legal costs expended on them.
The Part 8 proceedings were issued in July 2006. Directions as to evidence were given in October 2006, evidence was filed by Mr Fattal in November 2006 and in December 2006 a trial date of 8 October 2007 for three days was fixed.
The Part 8 proceedings seek essentially two things. First, an order for the sale of the block and directions as to the sale including that Walbrook are to have the conduct of the sale and that Knight Frank be appointed as agents to market it and that Davenport Lyons be instructed as solicitors. The second claim is for the court to determine whether the Sharet Trust has a 25% interest in the block and, if not, who has that interest.
The Part 7 claim seeks first, relief to enforce rights of pre-emption contained in the joint venture agreement, which the Fattals say arose as a result of the sale by Interlands to which I have referred. Secondly, restitution from Walbrook for failure to exercise the right of pre-emption and thirdly, other relief relating to the management or mismanagement as they say of the property. The parties to the Part 7 and Part 8 claims are not the same but I do not think that matters for present purposes.
Although it was issued in October 2006 the Fattals did not serve the Part 7 claim form until nearly four months later, on 9 February 2007, and did not serve the Particulars of Claim until 26 February 2007, which was after the time permitted for their service had expired. That was due to an error by their solicitors. This is because, under CPR 7.4(1)(b), where Particulars of Claim are not contained in, or served with, the claim form they must be served within 14 days of the service of the claim form. However, that rule is subject to rule 7.4(2) which provides:
“Particulars of claim must be served on the defendant no later than the latest time for serving a claim form.”
So it was that on 28 February 2007 the claimants applied for an extension of time for service of the Particulars of Claim until the date when they should have served it, extending time until 26 February when the Particulars were actually served.
In this judgment of 22 June 2007 Sir Francis Ferris granted the extension but he said that if the Part 7 proceedings continued with the Particulars of Claim in their then form there were bound to be applications for further information. There might well be applications to strike out and applications in relation to the severance of claims against the various parties in one capacity from claims against them or different parties in another capacity.
He considered whether it was his duty to take the bold course and to say that if the claims were to proceed at all they must be reformulated but he came to the conclusion that he should not do this although, as he said, steps were going to have to be taken to sort out the mess.
He gave permission without prejudice to any applications to strike out, or for further information, or to separate the various claims which had been made.
In addition he said that he was seriously disturbed by the suggestion that directions should be given which would enable the Part 7 claim to be tried in some way jointly with the Part 8 claim. Consequently he stayed all further proceedings in the Part 7 proceedings until after determination of the issues raised by the main paragraphs of the Part 8 proceedings, which related to the sale of the block.
The second aspect of the judge's judgment related to an application by the Fattals to serve in the Part 8 proceedings a Part 20 counterclaim raising most, if not all, of the same main issues as had been raised in the Part 7 proceedings. The judge said the proposed counterclaim was in the same or substantially the same form as the Particulars in the Part 7 proceedings. He considered that it was inconceivable that if permission were given for service of the counterclaim it could be tried jointly with the existing claim in such a way as to enable the October 2007 date to be kept and in such a way that would enable the trial to be kept within anything like the two-day time limit then estimated for the hearing of the claim.
He said that with one possible exception it was highly undesirable that any of the matters raised in the proposed counterclaim should be raised in the existing claim. The exception was the issue relating to the Sharet Trust. He said that the Sharet Trust issue could and should be determined separately from...
To continue reading
Request your trial
-
Cm (zimbabwe) v Secretary of State for the Home Department
...in a case management decision is particularly wide. The well-known statement of Lawrence Collins LJ (as he then was) in Walbrook Trustee (Jersey) Ltd & Ors v Fattal & Ors [2008] EWCA Civ 427 at 33 has been applied to decisions by the Upper Tribunal (see Connect Global v Revenue and Customs ......
-
Ward Hadaway v DB (UK) Bank
...with a Case Management decision. For that he cited the well-known statement of Lawrence Collins LJ (as he then was) in Walbrook Trustee (Jersey) Ltd v Fattal & Ors [2008] EWCA Civ 427, which at paragraph 33 contains this statement: "I do not need to cite authority for the obvious propositio......
-
BPP Holdings Ltd v Revenue and Customs Commissioners
...have made, but is a decision which the appellate judge considers cannot be justified. In the words of Lawrence Collins LJ in Walbrook Trustee (Jersey) Ltd v Fattal [2008] EWCA Civ 427, para 33: "[A]n appellate court should not interfere with case management decisions by a judge who has app......
-
Caroline Teresa Adams and Others v Allen & Overy and Others
...he made was a discretionary case management decision and, accordingly, the approach summarised by Moses LJ in Walbrook Trustees (Jersey) Limited & Ors v Fattal & Ors [2008] EWCA civ 427 at paragraph 33 applies: "These were case management decisions. I do not need to cite authority for the o......
-
Recent Developments In The Law Relating To Trustee Exoneration Clauses
...clauses for the time being at least are here to stay. Footnotes 1 Walbrook Trustee (Jersey) Ltd & Ors v Fattal & Ors [2008] EWCA Civ 427. 2 Spread Trustee Company Limited v Sarah Ann Hutcheson & Others [2011] UKPC 13. 3 There is "a strong element of strict liability in the sense......