Wallersteiner v Moir

JurisdictionEngland & Wales
JudgeThe Master of the Rolls,Lord Justice Buckley,LORD JUSTICE SCARMAN
Judgment Date21 May 1974
Judgment citation (vLex)[1974] EWCA Civ J0521-1
Date21 May 1974
CourtCourt of Appeal (Civil Division)
William Kurt Wallersteiner
Plaintiff Appellant
M.J.G. Moir
Defendant Respondent
M.J.G. Moir
Plaintiff on counterclaim
William Kurt Wallersteiner
Hartley Baird Limited
H.J. Baldwin & Company Limited
Defendants on counterclaim

[1974] EWCA Civ J0521-1


The Master of the Rolls (Lord Denning),

Lord Justice Buckley and

Lord Justice Scarman.

In The Supreme Court of Judicature

Court of Appeal

Appeal by Dr. Wallersteiner from judgment of Mr. Justice Geoffrey Lane on 26th July, 1973.

Mr. ANTHONY LINCOLN, Q.C., and Mr. PETER SHERIDAN (instructed by Messrs. Michael Sears & Co.) appeared on behalf of the Appellant, Dr. Wallersteiner.

Mr. MOIR appeared in person.

Mr. MICHAEL LYNDON-STANFORD (instructed by Messrs. David Alterman & Sewell) appeared on behalf of Hartley Baird Ltd. and H.J. Baldwin & Co. Ltd.


(instructed by the Treasury Solicitor) appeared as amici curiae.

The Master of the Rolls



Mr. Moir works in a stockbroker's office. He has taken on a big fight. He has challenged Dr. Wallersteiner, a man of influence in the City of London. Mr. Moir issued a circular in March 1967, criticising Dr. Wallersteiner up hill and down dale. He sent it to the shareholders of Hartley Baird Ltd. That was a substantial public company. Dr. Wallersteiner had gained control of it in 1962. He had charge of 80% of the shares. The other 20% were held by members of the public. Mr. Moir was one of them. In the circular Mr. Moir accused Dr. Wallersteiner of fraud, misfeasance and breach of trust. Dr. Wallersteiner hit back at once. He issued a writ for libel claiming damages. He sought an injunction to stop Mr. Moir saying such things. Mr. Moir put up & spirited defence. He had, he said, only stated in the circular what he believed to be true. Dr. Wallersteiner launched a vigorous counter-attack. Mr. Moir, he said, was actuated by express malice. He made a business of this sort of thing. He got a few shares in a public company and then harassed those in control of it. He was, according to Dr. Wallersteiner, a professional agitator.


The battle was long. Mr. Moir got the support of other minority shareholders. He said that they had been unjustly oppressed. He brought in the Company — Hartley Baird — itself. On its behalf, he made a considerable counterclaim. He alleged that Dr. Wallersteiner acquired the 80% majority by a cheat. He had not paid a penny in hard cash for the shares. Having got control, he denuded the company of its resources. He never paid anything back, or at any rate very little.


Dr. Wallersteiner did not meet these charges head on. He played for time. He did not put in a defence to them. He did nothing. He would have been content to let things drift on forever. But not so Mr. Moir. He waited 12 months for Dr. Wallersteiner's defence. It did not come. This gave Mr. Moir an opening. He took advantage of it. He struck a knockout blow. He applied to dismiss Dr. Wallersteiner's claim for libel. He asked for judgment for the company against Dr. Wallersteiner on the counterclaim. The case was heard toy for. Justice Geoffrey Lane in Chambers. He went into it in detail. In the end he took a strong course, never before known to be taken by a Judge in chambers. He condemned Dr. Wallersteiner outright. He struck out the claim for libel. He made declarations that Dr. Wallersteiner was guilty of fraud, misfeasance and breach of trust. He ordered him to pay a sum of, £500,000, or more. But, at the request of Dr. Wallersteiner, he did not allow the particulars to be published pending an appeal. Dr. Wallersteiner now appeals to this Court.


At the outset there is this question: how far was the Judge entitled to go in these proceedings? They were, after all, only interlocutory. There has been no trial. All was done on paper. No witnesses were called to give evidence. None was cross-examined. Yet the case before him took fifteen days. At the end he gave a judgment running into 46 pages. Was the Judge entitled to find Dr. Wallersteiner guilty of fraud? and to condemn his activities outright?


Likewise here. We have travelled over vast tracts of paper. We have spent fourteen days on it. We have listened to all parties at length and in detail. We have had the assistance of Queen's Counsel as amicus curiae. But we have hear no witnesses save forDr. Wallersteiner himself. He was cross-examined for the space of an afternoon. Does this absence of oral evidence mean that we are to remain silent? To say nothing about any wrongdoing that has been done. To be neutral in the face of public scandal, I say: Not so. If the Judge is right, it has been the very object of Dr. Wallersteiner all along — to ovoid exposure in the Courts. He has succeeded for the past twelve years. If we say nothing — on the ground that there are issues yet to be tried — it may be years yet before the truth is known. It is not as if Dr. Wallersteiner did not know of the charges. He has known of them for years. In these very proceedings he has had every opportunity of meeting them. Every indulgence was given to him by the Judge. He was allowed to put in his answer on paper and on oath: and he did so. In my opinion the Judge was quite entitled to say what he thought about Dr. Wallersteiner. He did it in the public interest. It was Lord Bacon in his essay on Judicature who said; "The principal duty of a Judge is to suppress force and fraud". As part of this it is the duty of a Judge to denounce wrongdoing when it is established before him. He speaks for all law-abiding citizens. His words uphold the opinion of the good. And shake the confidence of the wicked. By condemning wrongdoing, he reinforces the moral sanction on which law and order so much depend.




(i) The principal parties: Dr. Wallersteiner is a scientist turned financier. He is of German origin and came to England some years ago. He has done well. He has an office in the City of London and a residence in the West End. He controls many concerns, here and abroad. One of them is the Rothschild Trust. It sounds as if it was an English charity of repute, like the Guinness Trust; and as if itwas backed by the famous banking house of Rothschild, and so of great financial strength. But it was nothing of the kind. It was an obscure concern of little worth registered in Liechtenstein. That is a tiny European State squeezed in somewhere between Switzerland and Austria with a population of 20,000 all told. Dr. Wallersteiner made good use of Liechtenstein concerns. Others from there which he controlled were Stawa A.G. and Cellpa Trust. But he had concerns in other countries, too. A very useful one was registered in the Bahamas. It was called Investment Finance Trust Limited of Nassau. I do not know for sure what made him choose these various concerns. He doubt he thought they suited him, or the purposes which he had in hand.


Hartley Baird Ltd. is a public company of long standing. It has several subsidiaries through which it carries on engineering activities. In 196C it had issued nearly 13,000,000 ordinary shares of 1s. each, 80% of these were held by Camp Bird Finance Ltd., a subsidiary of Camp Bird Ltd. The remaining 20% were held by members of the public.


Camp Bird Ltd. was a public company occuping its own house called Camp Bird House in Dover Street. It had many subsidiaries, through which it carried on mining activities. But in 1962 its affairs were under the sole control of a Mr. John Dalgleish. He held a power of attorney authorising him to act on its behalf. He is now dead, but he and Dr. Wallersteiner entered into the most amazing transactions. The two of them together committed Camp Bird to large payments of commission. All on their own, without reference to anyone else. One of them deserves special mention. Camp Bird, through a subsidiary, owned big paper mills at Abelheira in Portugal. On 12th March 1962, Mr. Dalgleish, on behalfof Camp Bird, engaged Stawa A.G. as agents to sell these paper mills for £1,350,000 and promised to pay Stawa A.G. a commission of not less than £235,000. Some commission: All payable to Stawa A.G. of Liechtenstein, which was controlled by Dr. Wallersteiner.


(ii) The important agreement of 30th March 1962 to sell the shares.


About a fortnight later, the two men made another tremendous deal. By an agreement dated 30th March 1962, Camp Bird agreed to sell to the Rothschild Trust all their shares in Hartley Baird at 1s. a share. There were 10,375,735 shares. So the price was £518,786 15s. 0d. The agreement was made by these two men, again on their own, without apparent reference to shareholders or beneficiaries. It was signed by Mr. Dalgleish on behalf of Camp Bird, and by Dr. Wallersteiner on behalf of the Rothschild Trust. That Trust was described as "acting on behalf of a consortium of principally United Kingdom residents", but this consortium was not named. It turned out, at a later stage, to be Dr. Allersteiner and his mother.


That was, of course, a most important transaction. It is at the root of this case. How was the half-a-million pounds (£518,786 15s. 0d.) to be paid by the Rothschild Trust? In two parts:-


First: By procuring the payment of the " inter-company indebtedness". These were sums amounting to £284,981 11s. 4d. which were owed by Camp Bird and its subsidiaries to Hartley Baird and its subsidiaries. The Rothschild Trust promised to procure the payment of these sums in relief of Camp Bird. By procuring the payment of this inter-company indebtedness, the Rothschild Trust would make the equivalent of a payment direct to Camp Bird of £284,981 11. 4.


Second: By making a payment of £233,805 3s. 8d. direct incash by the Rothschild Trust to Camp Bird.


(iii) The non-payment of the purchase-price


In point of fact the Rothschild Trust did not pay a...

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