“This agreement shall constitute the entire contract between the Parties and shall only be capable of being varied by agreement in writing by or on behalf of the Parties.”
“Nothing in this Agreement shall constitute or be deemed to constitute a partnership between the Parties or any one or more of them and their relationship shall be that of independent principals combining together in a joint venture.”
“In the execution of these trusts no trustee shall be liable for any loss to the Trust Fund arising by reason of any improper investment made in good faith or for the negligence or fraud of any agent employed by such trustee or by any of the Trustees although the employment of such agent was not strictly necessary or expedient or by reason of any mistake or omission made in good faith by such trustee or by any of the Trustees orby reason of any other matter or thing except wilful and individual fraud or dishonesty on the part of the trustee who is sought to be made liable.”
“This agreement is supplemental to the Joint Venture Agreement (“the Original Agreement”) and to the other documents set out in the Second Schedule.”
“… hereby waive all restrictions on transfer and pre-emption rights (as between themselves) affecting shares in the Property and the proceeds of sale thereof and contained in particular in clauses 5, 6, 7, 8 and 12 of the Original Agreement.”
“Dear William and Elias Transfer of Ownership in Baker Street I am writing to seek your approval to transfer the 25% holding in Baker Street Limited previously held by Interlands SA to the Sharet Trust. I would be grateful in you would sign this letter thereby indicating your agreement with the above proposal. Please do not hesitate to contact me should you wish to discuss this further.”
“What happened was that, at some point shortly before my letter of10 July 1998 to Walbrook, Doreen Dangoor telephoned me and, having referred to the fact that her brother Selim had recently died, told me in words to the effect that “we” – being her and her husband Albert – “had bought Selim’s share and wanted to put it into a trust they had set up for their children called the Sharet Trust.”
“We confirm our approval to the transfer of the 25% in Baker Street Ltd held by Interlands SA to the Sharet Trust, which we understand to be related to Albert Dangoor’s family and on the basis that the rights and obligations of Interlands SA under the shareholders agreement will pass to the Sharet Trust.”
“The question of limitation is dealt with byCPR 17.4 , sub-rule 2 of which provides as follows: “The court may allow an amendment if its effect will be to add or substitute a new claim but only if the new claim arises out of the same facts or substantially the same facts as a claim in respect of which the party applying for permission has already claimed a remedy in the proceedings”
“In my judgment, it is incontrovertible that an amendment to make a new allegation of intentional wrongdoing by pleading fraud, conspiracy to defraud, fraudulent breach of trust or intentional breach of fiduciary duty where previously no intentional wrongdoing has been alleged constitutes the introduction of a new cause of action.”
“In the Thakerar case Chadwick J observed that it would be “contrary to common sense” to hold that a claim based on allegations of negligence and incompetence on the part of a solicitor involved substantially the same facts as a claim based on allegations of fraud and dishonesty. I respectfully agree. In all our jurisprudence there is no sharper dividing line than that which separates cases of fraud and dishonesty from cases of negligence and incompetence.”
“the same facts or substantially the same facts as are already in issue on a claim in respect of which the party applying for permission has already claimed a remedy in the proceedings.”
“I do not consider that the rule, as interpreted by the master and the judge, has any legitimate aim when applied to the facts of the present case. Whether the defendant put forward his version of events (which the claimant now wishes to adopt) before or after the expiry of the primary limitation period ought to make no difference to her ability to adopt it as part of her case and say that if that was indeed what had happened, he had nevertheless been negligent. If she delayed unreasonably in putting forward her amended pleading, the master could have blocked it on those grounds, but he made it clear that he would not have exercised his discretion against her if the rule had permitted him to allow the amendment. Even if the rule had any legitimate aim in the circumstances of this case, the means used by the rule-maker (if we have to interpret the rule in the way favoured by the court below) would not be reasonably proportionate to that aim.” (Emphasis added)
“The test to be applied is thus, whether, even if a new claim is being made, the new claim arises out of “the same facts already in issue”
“Suppose that there are two defendants to an action. Let the claimant be called C and the two defendants be called D1 and D2. If one of the defendants pleads facts by way of defence to C’s claim, can C adopt those facts as the basis of a new claim against the other defendant after expiry of the limitation period?”
“Section 35(5) of the 1980,CPR r 17.4 (2) and the expanded rule merely give the court a discretionary power to allow the pleading of new claims after expiry of the limitation period, if the threshold condition is met. Whether the court will in fact allow such amendments after expiry of the limitation period must depend upon the circumstances of each case. The court can and will protect a defendant against injustice by refusing permission to amend.”
“(1) Subject to subsections (3) and (4A) below, where in the case of any action for which a period of limitation is prescribed by this Act, either— (a) the action is based upon the fraud of the defendant; or (b) any fact relevant to the plaintiff's right of action has been deliberately concealed from him by the defendant; or (c) …; the period of limitation shall not begin to run until the plaintiff has discovered the fraud, concealment or mistake (as the case may be) or could with reasonable diligence have discovered it. References in this subsection to the defendant include references to the defendant's agent and to any person through whom the defendant claims and his agent. (2) For the purposes of subsection (1) above, deliberate commission of a breach of duty in circumstances in which it is unlikely to be discovered for some time amounts to deliberate concealment of the facts involved in that breach of duty.”
“However, I own to being unhappy with the way the judge exercised his discretion, particularly in relation to the application to amend. It is, of course, important that trial dates, when they are fixed, should be adhered to, but I fear that he may have let that factor dictate his approach to the question of amendment. The overriding objective is that the court should deal with cases justly. That includes, so far as practicable, ensuring that each case is dealt with not only expeditiously but also fairly. Amendments in general ought to be allowed so that the real dispute between the parties can be adjudicated upon provided that any prejudice to the other party or parties caused by the amendment can be compensated for in costs, and the public interest in the efficient administration of justice is not significantly harmed. I cannot agree with the judge when he said that there would be no prejudice to Greenwich in not being allowed to make the amendments which they are seeking. There is always prejudice when a party is not allowed to put forward his real case, provided that that is properly arguable.”
“… the unfortunate effect of lending weight to the erroneous argument that, where there is prejudice to a party seeking an amendment, it should be allowed, when the true position is that the existence and weight of such prejudice is just one [of] the factors to be taken into account.”
“In the modern era it is more readily recognised that in truth the payment of the costs of an adjournment may well not adequately compensate someone who is desirous of being rid of a piece of litigation which has been hanging over his head for some time, and may not adequately compensate him for being totally (and we are afraid there are no better words for it) “mucked around” at the last moment.”
“Where a party has had many months to consider how he wants to put his case and where it is not by virtue of some new factor appearing from some disclosure only recently made, why, one asks rhetorically, should he be entitled to cause the trial to be delayed so far as his opponent is concerned and why should he be entitled to cause inconvenience to other litigants? The only answer which can be given and which, Mr Brodie has suggested, applies in the instant case is that without the amendment a serious injustice may be done because the new case is the only way the case can be argued, and it raises the true issue between the parties which justice requires should be decided. We accept that at the end of the day a balance has to be struck. The court is concerned with doing justice, but justice to all litigants, and thus where a last minute amendment is sought with the consequences indicated, the onus will be a heavy one on the amending party to show the strength of the new case and why justice both to him, his opponent and other litigants, requires him to be able to pursue it.”
“Where late amendments are extensive and bound to result in costly diversions from the existing issues in the litigation, one is bound to scrutinise such applications with care to see whether they could and should have been made earlier, and whether they can be categorised as “more of the same” (merely adding an unnecessary and rather luxurious pair of braces to a perfectly adequate belt). … There can be no doubt that if I allow the amendments to the extent sought the claimants will suffer prejudice not only in the form of added expense but also through having their legal teams diverted to providing correspondingly detailed Replies, addressing further disclosure of documents, and significantly adding to the witness statements. This at a time when they could be expected to be preparing for what is already a heavy set of trials and addressing demands for, and possible contested applications in respect of, further disclosure on existing issues …”
“a defendant should not be harassed shortly before trial with fresh allegations of fraud which, if they are to be derived from documentation in [the claimant’s] possession … could well have been put before.”
“Given the purpose of the statement of truth verifying an amendment, a party will not be permitted to raise by amendment an allegation which is not supported by any evidence and is therefore pure speculation or invention.”
“It is therefore necessary for me to consider the defendant’s second main ground of opposition to this application which is that the amendment has no proper or sufficient evidential basis and should be refused on that ground. For these purposes Mr. Briggs and Mr. Lyndon-Stanford submit that I should apply the same test as if this were an application for summary judgment underCPR Part 24 or an application to strike out underCPR r.3.4 . That seems to be right, but it requires me to be satisfied on the basis of the material before the court that the claim has no real prospect of success.”
“it is not sufficient to look and see whether the pleading technically discloses a cause of action. Particularly in the light of the newCivil Procedure Rules 1998 , the court should look to see what will happen at trial. If the case is so weak that it has no reasonable prospect of success, it should be stopped before great expense is incurred”
“Ms Gloster submits that it is enough that these amendments have some prospect of success. That may be a suitable test where an amendment comes at a reasonably early stage of proceedings. After all, if any pleading whether by amendment or not, cannot meet the test of some real prospect of success, it is in danger of being struck out. In my judgment, however, the proper rule or guideline calls for a sliding scale: the later the amendment, the more it may require to commend it.”
“An allegation that the defendant 'knew or ought to have known' is not a clear and unequivocal allegation of actual knowledge and will not support a finding of fraud even if the court is satisfied that there was actual knowledge. An allegation that the defendant had actual knowledge of the existence of a fraud perpetrated by others and failed to disclose the fact to the victim is consistent with an inadvertent failure to make disclosure and is not a charge of fraud. It will not support a finding of fraud even if the court is satisfied that the failure to disclose was deliberate and dishonest.”
“[185] It is important to appreciate that there are two principles in play. The first is a matter of pleading. The function of pleadings is to give the party opposite sufficient notice of the case which is being made against him. If the pleader means dishonestly or fraudulently, it may not be enough to say wilfully or recklessly. Such language is equivocal. [186] The second principle, which is quite distinct, is that an allegation of fraud or dishonesty must be sufficiently particularised, and that particulars of facts which are consistent with honesty are not sufficient. This is only partly a matter of pleading. It is also a matter of substance. As I have said, the defendant is entitled to know the case he has to meet. But since dishonesty is usually a matter of inference from primary facts, this involves knowing not only that he is alleged to have acted dishonestly, but also the primary facts which will be relied upon at trial to justify the inference. At trial the court will not normally allow proof of primary facts which have not been pleaded, and will not do so in a case of fraud. It is not open to the court to infer dishonesty from facts which have not been pleaded, or from facts which have been pleaded but are consistent with honesty. There must be some fact which tilts the balance and justifies an inference of dishonesty, and this fact must be both pleaded and proved. … [189] … If the particulars of dishonesty are insufficient, the defect cannot be cured by an unequivocal allegation of dishonesty.” (Emphasis added)
“In the execution of these trusts no trustee shall be liable (1) for loss to the Trust Fund arising by reason of any improper investment made in good faith; (2) for negligence or fraud of any agent employed by the trustee although the employment of such agent was not strictly necessary or expedient; (3) [for loss to the Trust Fund arising] by reason of any mistake or omission made in good faith; and (4) [for loss to the Trust Fund arising] by reason of any other matter or thing except wilful and individual fraud or dishonesty on the part of the trustee.”
“In the execution of these trusts no trustee shall be liable” - (1) for loss to the Trust Fund arising by reason of any improper investment made in good faith; or (2) for the negligence or fraud of an agent employed by a trustee ……, or (3) by reason of any mistake or omission by a trustee in good faith; or (4) by reason of any other matter or thing except wilful and individual fraud or dishonesty on the part of the trustee who is sought to be made liable”
“No trustee can be made liable for loss or damage to the capital or income of the trust property caused otherwise than by his own actual fraud. “Actual fraud” means what it says. It does not mean “constructive fraud” or “equitable fraud.”
“In my judgment clause 15 exempts the trustee from liability for loss or damage to the trust property no matter how indolent, imprudent, lacking in diligence, negligent or wilful he may have been, so long as he has not acted dishonestly.”
“But even if I am wrong on that point, in my judgment Walbrook has an unanswerable defence to the claim as pleaded based on the exoneration or exclusion clause in the Fattal settlement. This protects Walbrook against liability except in the case of fraud or dishonesty. Mr Bompas QC argued that in context fraud in this clause simply means intentional wrongdoing since it is contrasted with dishonesty. But the usual meaning of fraud in legal parlance is that it is a form of dishonesty involving deception. In other words, it is a subcategory of dishonesty not a wider concept. There is no reason in the present case to give it any other meaning.”
“By consciously acting beyond their powers (as, for example, by making an investment which they know to be unauthorised) the trustees may deliberately commit a breach of trust; but if they do so in good faith and in the honest belief that they are acting in the interest of the beneficiaries their conduct is not fraudulent. So a deliberate breach of trust is not necessarily fraudulent. … It is the duty of a trustee to manage the trust property and deal with it in the interests of the beneficiaries. If he acts in a way which he does not honestly believe is in their interests then he is acting dishonestly. It does not matter whether he stands or thinks he stands to gain personally from his actions. A trustee who acts with the intention of benefiting persons who are not the objects of the trust is not the less dishonest because he does not intend to benefit himself.”
“It seems to me impossible to call a trustee’s conduct “dishonest” in any ordinary sense of that word, even if he knew he was acting in breach of the terms of the trust, if he so acted in a genuine (even if misguided) belief that what he was doing was for the benefit of the beneficiaries.”
“With respect, however, I find myself unable to agree with the third proposition, if stated without qualification. At least in the case of a solicitor-trustee, a qualification must in my opinion be necessary to take account of the case where the trustee’s so-called “honest belief”, though actually held, is so unreasonable that, by any objective standard, no reasonable solicitor-trustee could have thought that what he did or agreed to do was for the benefit of the beneficiaries. I limit this proposition to the case of a solicitor-trustee, first, because on the facts before us we are concerned only with solicitor-trustees and, secondly, because I accept that the test of honesty may vary from case to case, depending on, among other things, the role and calling of the trustee…”
“(ii) the reliance of the Claimants and/or the Walbrook Trustees as trustees of the Fattal Trusts at the relevant times) at all material times … that the JVA continued after the 1995 Restructuring which reliance caused [Mr William Fattal] and/or Walbrook as trustee of the Fattal Trusts not to take all reasonable steps to compel or persuade Walbrook as Trustee of the Non-Fattal Trusts and/or Interlands (until May 1998) and/or David Dangoor, and/or the directors of BCIL (in their representative capacities of those beneficially interested in the Joint Venture) to put in place an updated JVA.”
“That contractual and fiduciary relationships may co-exist between the same parties has never been doubted. Indeed, the existence of a basic contractual relationship has in many situations provided a foundation for the erection of a fiduciary relationship. In these situations it is the contractual foundation which is all important because it is the contract that regulates the basic rights and liabilities of the parties. The fiduciary relationship, if it is to exist at all, must accommodate itself to the terms of the contract so that it is consistent with, and conforms to, them. The fiduciary relationship cannot be superimposed upon the contract in such a way as to alter the operation which the contract was intended to have according to its true construction.”
“The express and implied terms of the agreement define the scope of the fiduciary duties arising from the joint venture created by it: Kelly v Cooper[1993] AC 205 at 213H–215D.”
“The phrase “fiduciary duties” is a dangerous one, giving rise to a mistaken assumption that all fiduciaries owe the same duties in all circumstances. That is not the case. Although, so far as I am aware, every fiduciary is under a duty not to make a profit from his position (unless such profit is authorised), the fiduciary duties owed, for example, by an express trustee are not the same as those owed by an agent. Moreover, and more relevantly, the extent and nature of the fiduciary duties owed in any particular case fall to be determined by reference to any underlying contractual relationship between the parties. Thus, in the case of an agent employed under a contract, the scope of his fiduciary duties is determined by the terms of the underlying contract. Although an agent is, in the absence of contractual provision, in breach of his fiduciary duties if he acts for another who is in competition with his principal, if the contract under which he is acting authorises him so to do, the normal fiduciary duties are modified accordingly: see Kelly v. Cooper[1993] AC 205 , and the cases there cited. The existence of a contract does not exclude the co-existence of concurrent fiduciary duties (indeed, the contract may well be their source); but the contract can and does modify the extent and nature of the general duty that would otherwise arise.”
“It seems to me that unless Mr David Dangoor himself had knowledge ofSection 28 of the Trustee Act 1925 , which is not alleged, it is not arguable that he would have been in breach of duty if he failed to tell Walbrook something that they already knew.”
“Walbrook’s duties as Trustee of the Fattal Trusts are further to be assessed in the light of Mr Cuttiford’s said positions of conflict and of the fact that those further conflicts were unknown to the Fattals.”
“A fiduciary who acts for two principals with potentially conflicting interests without the informed consent of both is in breach of the obligation of undivided loyalty; he puts himself in a position where his duty to one principal may conflict with his duty to the other: see Clark Boyce v. Mouat [1994] 1 A.C. 428 and the cases there cited. This is sometimes described as “the double employment rule.”
“In a case where a principal instructs as selling agent for his property or goods a person who to his knowledge acts and intends to act for other principals selling property or goods of the same description, the terms to be implied into such agency contract must differ from those to be implied where an agent is not carrying on such general agency business. In the case of estate agents, it is their business to act for numerous principals: where properties are of a similar description, there will be a conflict of interest between the principals each of whom will be concerned to attract potential purchasers to their property rather than that of another. Yet, despite this conflict of interest, estate agents must be free to act for several competing principals otherwise they will be unable to perform their function. Yet it is normally said that it is a breach of an agent's duty to act for competing principals. In the course of acting for each of their principals, estate agents will acquire information confidential to that principal. It cannot be sensibly suggested that an estate agent is contractually bound to disclose to any one of his principals information which is confidential to another of his principals. The position as to confidentiality is even clearer in the case of stockbrokers who cannot be contractually bound to disclose to their private clients inside information disclosed to the brokers in confidence by a company for which they also act. Accordingly in such cases there must be an implied term of the contract with such an agent that he is entitled to act for other principals selling competing properties and to keep confidential the information obtained from each of his principals. Similar considerations apply to the fiduciary duties of agents.” (Emphasis added)
“In my judgment the likelihood is, on the balance of probabilities, that Interlands did agree to sell its share in Baker Street Limited, together with its share of the members' accounts, to Niazi, and that Niazi then directed Interlands to complete the sale by transferring the assets in question to the Sharet Trust. The agreement was probably made, or at least finalised, between 12 and18 May 1998 . I do not know what purchase price was agreed, but I am satisfied on the balance of probabilities that a price was agreed, and that it was paid by Niazi to Interlands. I doubt whether Niazi had either the resources or the motivation to make the purchase and settlement on his own initiative, and I find that he was probably put in funds for the purpose, most likely by Albert and Doreen.”
“Dear William and Elias Transfer of Ownership in Baker Street I am writing to seek your approval to transfer the 25% holding in Baker Street Limited previously held by Interlands SA to the Sharet Trust.”
“In the premises Walbrook as Sharet Trustee committed the tort of deceit in sending that letter, and have caused the Fattals loss and damage in consequence. Walbrook is sued in its own capacity as tortfeasor in respect of that deceit, notwithstanding that it was acting as Sharet Trustee as well.”
“It would make nonsense of the rules about costs if the successful party in an action who has been awarded costs could claim in a further action by way of damages the amount by which the costs awarded fell short of the costs actually incurred by him.”
“Given the breakdown in relations between Messrs Fattal and David Dangoor and the current litigation we understand it to have become apparent to the Walbrook Trustees that any continuing joint venture, and the management and retention of the Property on that basis is likely to be bedevilled with strife; and that in the absence of any workable solution acceptable to the families concerned the Walbrook trustees consider it desirable that the Property should now be sold at the best possible price; and sold sooner rather than later.”
“For all these reasons it would seem to be in the plainest interest of the beneficiaries as a whole for sale to take place free from any such procedures.”
“From the consultations carried out by the Trustees it appears to be the wish of all other adult beneficiaries that the property should be sold, and in view of the enduring breakdown of relations between David Dangoor and the Fattals the Trustees, having considered the matter from the perspective of each of the relevant trusts, have concluded that a sale is appropriate. If we may say so, this is a perfectly reasonable and proper conclusion for them to have reached.”
“Even if a fiduciary is properly acting for two principals with potentially conflicting interests he must act in good faith in the interests of each and must not act with the intention of furthering the interests of one principal to the prejudice of those of the other: see Finn, p. 48. I shall call this “the duty of good faith.”
“I am of opinion that it is not according to law to give to a party by way of damages the costs as between solicitor and client of the litigation in which the damages are recovered. The law gives a successful litigant his costs as between party and party, and he cannot be said to sustain damage by not getting them as between solicitor and client.”
“… a successful plaintiff cannot obtain, in the guise of damages, any costs which, on a party and party taxation of costs, are disallowed by the taxing master. It is not enough for the plaintiff to claim that such costs were incurred by him as a result of the defendants' negligence. … I am saying nothing about damages which fall outside the particular form in which they are claimed in this case, namely, the legal expenses of investigating the plaintiff's claim up to the date of the issue of the writ. It seems to me that both on authority and on principle those legal expenses can be recovered by the plaintiff only as costs, and not in the form of damages. In so far as the plaintiff can persuade the taxing master that the items incurred should be allowed as costs on a party and party taxation, then the plaintiff can recover them; but so far as they are not allowed by the taxing master, then I think that they cannot be recovered in the shape of damages.”