Gaydamak v Leviev [2014] EWHC 1167 (Ch)

[2014] EWHC 1167 (Ch)

Case No HC13F03856

IN THE HIGH COURT OF JUSTICE

CHANCERY DIVISION

Venue Royal Courts of Justice, Strand, London, WC2A 2LL

Date 15/04/2014

Before

MR JUSTICE MANN

Between

Arkady GaydamakClaimant and Respondent

Lev LevievDefendant and Applicant

Jonathan Crow QC and Isaac Jacob and Elaine Palser (instructed by Devonshires Solicitors) for Claimant

Robert Miles QC and Andrew Fulton (instructed by Stewarts Law LLP) for Defendant

Hearing Hearing dates: 3 rd and 4 th April 2014

Judgment

Mr Justice Mann :

Introduction

[1]This is an application by the first defendant to strike out the claim against him on the basis that the claims are barred by cause of action estoppel or abuse of process. Furthermore, in respect of one particular claim (a conspiracy claim) it is said that it is improperly pleaded.

[2]As that general description suggests, this application has its roots in a previous action. On 29th June 2012 Vos J delivered judgment in a previous claim brought by the claimant (Mr Gaydamak) against the present first defendant (Mr Leviev) (Gaydamak v Leviev

[2012] EWHC 1740 (Ch)

. He upheld the validity of an agreement between those 2 men reached in 2001 (despite Mr Leviev's denying the existence of that agreement) but held that an agreement of 2011 (entered into after that action had commenced) released Mr Leviev from any liabilities. Mr Gaydamak therefore lost. He made an unsuccessful application for permission to appeal and sought to introduce additional ways of putting his claim in relation to the 2011 agreement, but he was refused permission. Faced with that, Mr Gaydamak now seeks to run a new case in relation to the 2011 agreement, together with what is said to be a new conspiracy claim involving the second and third defendants and it is that new case which is said to be barred by estoppel (arising out of the judgment of Vos J), abuse of process and improper pleading.

[3]In the application before me Mr Leviev was represented by Mr Robert Miles QC and Mr Gaydamak by Mr Jonathan Crow QC, neither of whom appeared at the original trial.

The first proceedings

[4]In order to understand the estoppel claim it is necessary to consider some of the facts of the first claim and the course of the proceedings in which that claim was made.

[5]Mr Gaydamak is a wealthy Israeli businessman of Russian origins. He became involved in, or interested in, the business of diamond extraction and dealing in Angola and claims to have been instrumental in putting in place a commercial structure which made it more difficult for rebels in that country to get hold of diamonds to fund their activities. He had certain commercial opportunities in this respect, but because he was viewed unfavourably by the authorities in some countries (including France, where he has recently been convicted and sentenced to a term of imprisonment in his absence) he did not want his involvement to be publicly acknowledged. He therefore asked Mr Leviev, another Israeli businessman of Russian extraction, to hold his interest. His case in the first proceedings was that they entered into an agreement apparently dated 13th of December 2001 which achieved that objective. The agreement was in English, being the only common language of the 2 participants and Israeli attorney who drew it. The agreement acknowledged that Mr Gaydamak had contributed US $12.5m and the most significant clauses for present purposes are the following:

"1. This is to certify that Leviev and Gaydamak in equal parts between them own all assets and activities, including business opportunities, with regard to diamonds (mining, distribution and trade), which have been held and conducted by Leviev (directly or indirectly, through any entity on its behalf, alone or together with others) since 2000, and which have been taken place, initiated, originated in or otherwise related to the Republic of Angola (in respect of Ascorp only) and Zaire. ... 3. The positioning of Leviev in front of the business community, as the owner and controller of those assets and activities, has been made for convenience purposes only. As long as Leviev is in front, he is regarded vis-à-vis the abovementioned share of Gaydamak in the assets and activities as a trustee in favour of Gaydamak. 4. Upon the request of Gaydamak, Leviev shall bring the trust into end and shall take all necessary actions in order to allow Gaydamak to receive the formal title of the above-mentioned assets and activities directly."

Other provisions of the agreement provide for the payment of monies. Mr Leviev was to benefit from the assets of venture as well.

[6]After the date of this agreement hundreds of millions of dollars flowed from Mr Leviev to Mr Gaydamak until about 2005, when the flow stopped. In due course Mr Gaydamak brought the first proceedings in order to enforce what he said were the obligations under the 2001 agreement. Proceedings were commenced on 31 January 2011.

[7]In August 2011, while the proceedings were pending, Mr Gaydamak travelled to Angola. On 6th of August 2011 he met the second defendant, General Kopelipa, who can apparently be best described as the equivalent of Prime Minister in Angola, together with a Mr Sumbula, an Angolan businessman. At a meeting Mr Gaydamak signed a form of release which recited that a dispute had arisen between Mr Leviev and Mr Gaydamak and that the parties had agreed terms for full and final settlement of the disputes (including the English proceedings, which were actually referred to). Clause 2 contained a full form of settlement and release of all claims both ways between Mr Leviev and Mr Gaydamak and clause 6 contained an entire agreement clause. The agreement did not contain any provision for the payment of moneys (or other transfer of property) between the two parties. In essence it just contained the release and ancillary provisions. There was an English law and jurisdiction clause.

[8]A few days later, Mr Gaydamak left Angola and sometime after that Mr Leviev pleaded the 2011 release document as a defence to Mr Gaydamak's claims against him. Mr Gaydamak countered reliance on that document by alleging that it was the result of fraudulent misrepresentations made by General Kopelipa to the effect that if Mr Gaydamak signed the settlement agreement, Mr Leviev would make a proposal to Mr Gaydamak for the payment of compensation, and/or that Mr Leviev honestly intended to pay compensation to Mr Gaydamak in return for his giving up his rights.

[9]Those misrepresentations were said to have been made at the meeting at which the 2011 release was signed, and Mr Gaydamak also gave some evidence to the effect that similar things had been said at a meeting some two days before. The judgment of Vos J set out Mr Gaydamak's evidence about that preceding meeting, which was to the effect that the General would speak to Mr Leviev to discuss the matter of the settlement and use his influence to persuade Mr Leviev to pay him. The witness statement went on:

"56. General Kopelipa made it very clear that if I did not settle with Mr Leviev, the attitude of the Angolan authorities towards me would be very negative, but that if I did sign a settlement agreement, I could expect to receive the full cooperation of the Angolan authorities and administrative protection in the form of a diplomatic passport with a Presidential Administration mandate conferring diplomatic immunity."

[10]The substance of that last paragraph did not seem to form part of the misrepresentation claim dealt with by the judge but it has a relevance to the present action, as will appear.

[11]In the first proceedings Mr Leviev denied signing the 2001 agreement and denied that he was bound by any such thing. Vos J found against Mr Leviev on that point. His judgment makes it clear that Mr Leviev's denials were categorical and that his evidence was simply not accepted by Vos J. The judge simply did not believe him. Mr Gaydamak therefore won on the validity and effect of the 2001 agreement. However, Vos J found against Mr Gaydamak on the representation claim. He found that the representations relied on were not made. What was said was that General Kopelipa would try to use his influence to persuade Mr Leviev to make some sort of payment to Mr Gaydamak (paragraph 232), but that is not the representation alleged. He went on to find that, had he found that the representations had been made, he would have found that they were false and knowingly false. Thus Mr Gaydamak lost the first action.

[12]Mr Gaydamak sought permission to appeal. Lewison J ordered an oral hearing with the respondent present. That hearing took place before Lloyd and Rafferty LJJ on 6 November 2012. Mr Gaydamak was seeking permission to appeal on certain points of fact, which was refused on the footing that they were the sort of findings with which an appellate court will not interfere. It was the 6th ground of appeal which attracted more attention and which becomes relevant to the present application. In that ground of appeal, as recorded by Lloyd LJ, Mr Crow (who by then was appearing for Mr Gaydamak) sought to take the point that the 2011 settlement agreement was void or voidable for breach of the rule prohibiting a trustee from acting in a transaction where his duty and interest conflict and in breach of the fair dealing rule. He relied on "a relatively little-known” (per Lloyd LJ) House of Lords decision Thomson v Eastwood

(1877) 2 App Cas 215

[13]This was a new point. The point had not been taken at the trial. It was pleaded that there was a trust, and a claim for breach of trust was made in the Particulars of Claim, the breaches being (in essence) the denial of the trust by Mr Leviev (who, of course, denied signing the agreement) and failing to distribute money in accordance with the trust and failing to provide information. Vos J’s judgment (at paragraph 31) described the action as containing a trust claim. However, there was no real consideration given to the real consequences of that. What was principally in issue was the validity or otherwise of the agreement. In particular there was no real issue as to what the governing law of the 2001 agreement might have been. Counsel for Mr Leviev is recorded as having acknowledged that it was common ground, for the purposes of the action at the time, that English law or the same principles as English law applied.

[14]Lloyd LJ held that the new point could not be taken on the appeal. He referred to the principles according to which new points can and cannot be taken on an appeal, and pointed out that the policy underlying those rules was very much the same as was discussed in such cases as Henderson v Henderson, a case which is very much in issue in the present application. He referred to the importance of the principle of finality and fairness to the opposing party and found that if the point which Mr Gaydamak sought to take had been raised below, the trial would have taken a different shape with different (additional) material introduced in relation to the existence of a trust, or trust obligations, including proper law points. Lloyd LJ was prepared to assume in favour of the appellant that there was legal substance behind the points which he sought to raise, but found that it would be wrong, on the principles he had referred to, to allow the points to be raised at the appeal for the first time.

[15]Having thus failed to have his new point taken in the first proceedings, Mr Gaydamak then (after 10 months) commenced the present proceedings.

The present proceedings

[16]The present proceedings were commenced by a claim form issued on 2nd September 2013. The claimant is Mr Gaydamak again, and the first defendant is Mr Leviev. The second defendant is General Kopelipa and the third defendant is Mr Sumbula. The claim is described as being: “(1) against the First Defendant for various declarations, orders and accounts, and compensation or damages for breach of trust; (2) against the Second and Third Defendants for damages or restitution for dishonestly assisting in the said breach of trust, and for damages for the tort of intimidation and the tort of deceit; and (3) against the First to Third Defendants for damages for the tort of conspiracy…"

[17]The Particulars of Claim revisit the 2001 agreement and the events surrounding the 2011 settlement agreement and seek to put a different legal slant on them. Paragraphs 13 to 15 allege what are said to be various breaches of trust – stopping making payments under the 2001 agreement, failing to respond honestly and in accordance with obligations of the trustee to requests for information about the 2001 agreement and failing to respond to a demand to provide books and records and to pay outstanding sums to Mr Gaydamak (said to have been made in January 2011). Paragraphs 18-21 plead that the actions of Mr Leviev in the action, in denying signing the agreement, denying sending it to a third party for safekeeping, asserting that he never made payments pursuant to obligations under the agreement and alleging an alternative agreement, and procuring a witness to give false evidence in support of his case were fraudulent and dishonest breaches of trust designed to deceive the court so that it would dismiss Mr Gaydamak's claim.

[18]Paragraphs 22 and 23 allege "conspiracy, pressure and fraud" in relation to the 2011 settlement agreement. Paragraph 22 pleads that Mr Leviev, General Kopelipa and Mr Sumbula conspired to deprive Mr Gaydamak of his interest by a combination of false promises and pressure. The object of the conspiracy was to deceive and/or compel Mr Gaydamak to sign an agreement under which he gave up his beneficial interest in the assets which could be placed before the English court in the proceedings in order to defeat Mr Gaydamak's claims. Paragraph 23 pleads:

"By reason of the conspiracy, pressure and fraud Mr Gaydamak signed an agreement… under which he gave up all rights to his beneficial interest for no consideration and confirmed that he had no rights against the state and government of Angola.… In causing his lawyers to draw up the Settlement Agreement as aforesaid, Mr Leviev was in further breach of trust."

[19]Paragraph 25 states that "in flagrant breach of his duty as trustee" Mr Leviev gave false evidence on oath in the proceedings and procured false evidence from a witness. Paragraph 26 pleads:

"At no stage did Mr Leviev, in accordance with his duty as trustee, draw the court's attention to the fact that: (i) he was a trustee; (ii) as trustee he would not be entitled to enter into the Settlement Agreement which was with Mr Gaydamak (his beneficiary) in order to deprive him of his beneficial interest in the Relevant Assets; (iii) the Settlement Agreement was not bona fide or fair and was achieved through his fraudulent denial of the trust and abuse of his position as trustee; (iv) his acts (including his conspiracy as set out below) in procuring the signing of the Settlement Agreement entirely for his own benefit and to the detriment of Mr Gaydamak were breaches of his duty as trustee; and (v) in consequence the Settlement Agreement was void or at the least voidable ..."

[20]Paragraph 27 repeats the allegations that Mr Leviev's evidence was false and a breach of trust and that the decision of Vos J was reached in ignorance of the breaches of trust previously pleaded.

[21]Paragraph 33 is that the 2001 agreement was subject to English law. It relies on a statement by Mr Leviev's counsel that "for these purposes" (by which one must assume that he meant for the purposes of the action as then framed) that it was common ground that the 2001 agreement was an English law agreement or that whatever law might be relevant was the same as English law. Alternatively, Mr Gaydamak says that the agreement was subject to Israeli law, but whichever is the case, he says the duties and principles attending trusteeship are the same. They are also the same under his third alternative which is Jewish religious (Halachic) law.

[22]Paragraphs 34 to 36 set out various duties to which Mr Leviev was said to be subject as trustee, and claiming that it was a breach of trust to resist the first proceedings on the basis that he had not signed the agreement, to procure false evidence, to give false evidence, to cause the settlement agreement to be drawn up so as to deprive Mr Gaydamak of his rights as beneficiary, to procure the other defendants to persuade and compel Mr Gaydamak to sign the settlement agreement, and various other acts relating to the conduct of the proceedings and resisting an application for permission to appeal. Paragraph 38 pleads that, in the event of a challenge to an acquisition by a trustee from a beneficiary, the trustee is himself obliged to raise "the above obligation" before the court and establish by affirmative evidence that the transaction complied with requirements that it be bona fide, honest, fair, not fraudulent, with no advantage taken, at proper value and with full disclosure of information. Mr Leviev failed to comply with that duty. Paragraph 39 and 40 elaborate the same theme.

[23]Paragraph 52 alleges a conspiracy of all three defendants to use unlawful means. The conspiracy is said to be a conspiracy: “to enter into the Settlement Agreement (which gave him nothing in return for giving up his claim in the First Proceedings and to a beneficial interest in the Relevant Assets) by unlawful means, being a combination of deceit and pressure."

[24]In the particulars which follow Mr Gaydamak pleads discussions preceding and at the meeting at which the settlement agreement was signed and seeks to make again the misrepresentation claims which failed in the first action. In addition, he pleads the indication said to have been given by General Kopelipa about future contracts with the Angolan government and the provision of a passport and diplomatic status which I have referred to above.

[25]Paragraphs 56 to 60 contain a claim of dishonest assistance in a breach of trust on the part of the General and Mr Sumbula. I do not need to deal with that because it is not a claim made against Mr Leviev. Paragraph 61 contains a claim of intimidation based on Mr Gaydamak's inference and fear that if he did not sign he would not be allowed to leave Angola and might even be handed over to the French authorities. Paragraphs 64 and 65 contain a deceit claim against the second and third defendants which is essentially the same as the fraud claim which has already failed, though again I do not need to deal with that because it is not the subject of this present striking out application.

The issues on this application

[26]The principal focus of this application is really the estoppel-based attack on the new trust-related claim, that is to say the claim that the settlement agreement cannot stand because of the trustee/beneficiary relationship between Mr Leviev and Mr Gaydamak. While that agreement stands Mr Gaydamak cannot bring any of the substantive breach of trust claims, because they are caught by the 2011 settlement agreement. Furthermore, Mr Crow accepts that while it stands the conspiracy claims cannot be brought against Mr Leviev either. Setting aside the agreement is therefore the key to bringing the other claims. It can also be said (it seems to me) that if the agreement is actually set aside (or declared to be void) the conspiracy claim becomes otiose, because Mr Gaydamak gets all that he is entitled to under his trust and contractual claims. It is therefore necessary to focus on the new claim which seeks to impeach that agreement.

[27]Mr Miles submits that the new claim to impeach the settlement agreement is barred by cause of action estoppel, or alternatively is barred by the abuse of process principles that emerge from Henderson v Henderson (1843) 3 Hare 100.

[28]As to cause of action estoppel he relies on a form of cause of action estoppel described by Lord Sumption in Virgin Atlantic v Zodiac

[2014] 1 AC 160

at paragraph 22: “(1) Cause of action estoppel is absolute in relation to all points which had to be and were decided in order to establish the existence or non-existence of a cause of action. (2) Cause of action estoppel also bars the raising in subsequent proceedings of points essential to the existence or non-existence of a cause of action which were not decided because they were not raised in the earlier proceedings, if they could with reasonable diligence and should in all the circumstances have been raised." He does not rely on the first of those categories, but he does rely on the second. He points out (correctly) that the attack on the settlement agreement based on "trust points" was not decided in the first action because it was not raised. From the point of view of Mr Gaydamak's cause of action, it is a point which was essential to his claims under the 2001 agreement, and if one looks at what might be said to be Mr Leviev's own cause of action under the 2011 settlement agreement, it is obviously essential to that. There is no doubt that the point could have been taken in the first action (indeed it was common ground that it could have been taken) and it should, in all the circumstances, have been taken as well.

[29]So far as the rule in Henderson v Henderson is concerned, he takes the point that the attack on the settlement agreement which Mr Gaydamak now seeks to advance was very naturally the subject matter of the earlier proceedings where the relationship between the men was plainly an issue, as was its termination and once again it can plainly be said that the new point could and should have been raised. It is now an abuse of process to raise it.

[30]So far as the new conspiracy claim is concerned, that is barred by issue estoppel. It is just a repackaging of the original fraud claim. There are no special circumstances which would allow the points to be litigated when, in substance, it has been litigated before. Furthermore, he relies on what he says was an express disclaimer of dishonesty as against Mr Leviev in relation to the settlement agreement in the first proceedings and, so far as necessary, submits that it would be an abuse of process to run the conspiracy claim now. For good measure, he submits that the conspiracy claim is inadequately pleaded.

[31]Mr Crow accepts that the new trust-based attack on the settlement agreement could have been raised in the earlier proceedings, and submits that the only relevant doctrine which might stand in the way of its being raised in these new proceedings is the rule in Henderson v Henderson. The question of whether it should have been raised is the same as the question of whether it would be an abuse of process to raise it now, and on the facts it would not be an abuse. In relation to the conspiracy claim he disputed the inadequacy of the pleading and, in relation to estoppel, pointed out that conspiracy had not been pleaded in the first action and there was no finding. Mr Gaydamak did not know, at the time of the first action, that the promises made in relation to the diplomatic passport and diamond business were false. No findings in the judgment are contradicted by the Particulars of Claim.

The legal principles

[32]The dispute between the parties was as to whether the proper approach to this case was via cause of action estoppel (Mr Miles’ case) or abuse of process (Mr Crow’s case). Mr Miles’ case was that what he was entitled to invoke, and was invoking, was cause of action estoppel in the second sense identified in Lord Sumption’s judgment in Virgin Atlantic. Mr Crow said that what was involved was an application of the principles in Henderson v Henderson as an abuse of process point, and not cause of action estoppel. His case seems to involve the proposition that except in the case of strict cause of action estoppel in the first of Lord Sumption’s senses the real point is whether a second set of proceedings would amount to an abuse of process.

[33]I do not accept that analysis. In Virgin Atlantic Lord Sumption carried out an analysis of the leading cases in res judicata. He cited the well-known (and, as he remarked, justly celebrated) passage from Henderson v Henderson:

““In trying this question, I believe I state the rule of the court correctly, when I say, that where a given matter becomes the subject of litigation in, and of adjudication by, a court of competent jurisdiction, the court requires the parties to that litigation to bring forward their whole case, and will not (except under special circumstances) permit the same parties to open the same subject of litigation in respect of matter which might have been brought forward as part of the subject in contest, but which was not brought forward, only because they have, from negligence, inadvertence, or even accident, omitted part of their case. The plea of res judicata applies, except in special cases, not only to points on which the court was actually required by the parties to form an opinion and pronounce a judgment, but to every point which properly belonged to the subject of litigation, and which the parties, exercising reasonable diligence, might have brought forward at the time … Now, undoubtedly the whole of the case made by this bill might have been adjudicated upon in the suit in Newfoundland, for it was of the very substance of the case there, and prima facie, therefore, the whole is settled. The question then is, whether the special circumstances appearing upon the face of this bill are sufficient to take the case out of the operation of the general rule.”

[34]It is plain that he considered that this was an analysis of cause of action estoppel - he introduces the case by saying that the defendants raised:

“what would now be called cause of action estoppel” (p181B). He does not treat it as some sort of over-riding abuse of process doctrine which should now be the test. Lord Sumption then went on to consider more modern cases, ending with Arnold v National Westminster Bank [1991] 2 AC 93 and drew the conclusions I have already set out, but which I set out here a little more fully: “22. Arnold v National Westminster Bank plc [1991] 2 AC 93is accordingly authority for the following propositions. (1) Cause of action estoppel is absolute in relation to all points which had to be and were decided in order to establish the existence or non-existence of a cause of action. (2) Cause of action estoppel also bars the raising in subsequent proceedings of points essential to the existence or non-existence of a cause of action which were not decided because they were not raised in the earlier proceedings, if they could with reasonable diligence and should in all the circumstances have been raised. (3) Except in special circumstances where this would cause injustice, issue estoppel bars the raising in subsequent proceedings of points which (i) were not raised in the earlier proceedings or (ii) were raised but unsuccessfully. If the relevant point was not raised, the bar will usually be absolute if it could with reasonable diligence and should in all the circumstances have been raised.”

[35]It is clear that Lord Sumption was still referring to estoppels, and not abuse of process. Mr Miles accepted that, since he was not in the first category, determinations in the first proceedings did not absolutely bar the claim in these proceedings. However, he did submit that he came within the second - Mr Gaydamak was seeking to run a case that was essential to his cause of action (or to its non-existence) as that cause of action was sued on in the first proceedings; or to have a re-determination as to Mr Leviev’s cause of action on the settlement agreement; and in either case to do so on the basis of a point that was not decided in the first proceedings because it was not raised, namely the new trustee/beneficiary agreement point arising out of Thomson v Eastman. That could not be done if the point could with reasonable diligence and should in all the circumstances have been raised in the first proceedings. In determining whether it should have been raised the court should have regard to the formulation in Henderson v Henderson, because what that case was doing was setting out the rationale behind all aspects of res judicata and the circumstances in which decisions would be held to be not binding.

[36]Mr Crow invited me to go straight to Henderson v Henderson. He took me through some of the cases leading up to Virgin Atlantic in order to demonstrate that Lord Sumption was not seeking to produce a complete formulation about res judicata and cause of action/issue estoppel in paragraph 22, but was merely indicating what could be extracted from Arnold. What mattered was whether the second proceedings could be said to be an abuse of process by reason of the application of the principles in Henderson v Henderson.

[37]Thus each side arrived at an application of Henderson v Henderson principles though via different routes. However, I do not think that Mr Crow’s analysis is correct. I do not read anything in Lord Sumption’s judgment as entitling one to ignore the careful formulation of what he said Arnold decided and go straight to an abuse of process test as in Henderson v Henderson. There is at least one type of case in which one does go straight to abuse of process reasoning, without reference to estoppel, and that is cases in which the parties are different, as in Johnson v Gore-Wood & Co

[2002] 2 AC 1

, but that is not the present case (so far as the claim against Mr Leviev is concerned). I consider that the correct starting point is to consider the second type of cause of action estoppel, not to consider whether there is an abuse.

[38]That is not to say that there is no link between the concepts, and they would be likely to achieve the same result. Estoppels within the res judicata concept (cause of action estoppel, issue estoppel) have their roots in a particular kind of abuse of process. As Lord Sumption observed in Virgin Atlantic (at paragraph 24):

“The principle in Henderson v Henderson has always been thought to be directed against the abuse of process involved in seeking to raise in subsequent litigation points which could and should have been raised before.”

[39]Lord Sumption was at pains to point out in Virgin Atlantic that it was not correct to say that Henderson v Henderson questions in terms of abuse had been completely removed from the realms of estoppel so as to make estoppels more absolute. Lord Bingham expressed similar views about their common roots in Johnson v Gore-Wood at p31. There are likely to be similar elements in either inquiry. The sort of things relevant to the “should” element of the cause of action test (and any “special circumstances” allowed for by the citation in from Henderson v Henderson are likely to be relevant to an inquiry which addresses the question of abuse, especially if one starts from the premise that the abuse in question is re-litigation. Nonetheless nothing that Lord Sumption says suggests that the inquiries are effectively one and the same and can be approached on an abuse of process basis. It is more consistent with principle to start from his propositions about estoppel where the factual conditions exist.

[40]There may in theory be a difference in burdens. Mr Crow was keen to submit that it followed from an inquiry about abuse of process that the burden was on he who alleged the abuse - see Johnson v Gore-Wood at p 31 again. The way in which Lord Sumption's propositions are phrased suggests that the previously successful party may not have the same burden if he can bring his case within those propositions. The latter is perhaps questionable, but in any event I doubt it will make a difference in most cases. The burden is likely to shift. In a cause of action estoppel case the previously successful party will obviously have to demonstrate that there were previous proceedings to which the new point was relevant, that while it was not decided it could have been decided, and probably that it “should” have been decided. If he establishes that in the context of the case as it was, in practice the person seeking to raise the new point will have to show that there are good reasons why it should not have been raised, or that it is right to allow the point to be raised later (if that is a different point), and would inevitably have to discharge a burden of establishing “special circumstances” if any are relied on. At the end of the day I doubt if the two inquiries would throw up different results, and that was certainly Mr Miles’ submission in the present case.

[41]Nonetheless, the starting point remains, in my view, cause of action estoppel of Lord Sumption’s second variety. Mr Miles is entitled to invoke that, and not to be deflected into an abuse of process analysis. This is in accordance with Lord Sumption’s expressed views that res judicata and abuse of process are different. Having said that, it will also be useful to consider the result applying Mr Crow’s approach.

[42]However, before doing all that there is one further reference to authority with which I have to deal, concerning the circumstances which have to be taken into account in the assessment of abuse.

[43]In Johnson v Gore-Wood Lord Bingham described the nature of the inquiry that has to be undertaken in the sort of case before him (a pure abuse case, with no cause of action estoppel or issue estoppel operating). He described the judgment on the inquiry as: “ … a broad merits-based judgment which takes account of the public and private interests involved and also takes account of all the facts of the case, focusing attention on the crucial question whether, in all the circumstances, a party is misusing or abusing the process of the court by seeking to raise before it the issue which could have been raised before.” (page 31D)

[44]Mr Crow seized on the reference to “all the facts of the case” and at times seemed to be stressing the merits of the new case which his client seeks to run, as though the strength of that case was a key element. Insofar as that is a significant prop of his argument I do not accept that that is really what Lord Bingham was referring to. While the new claim is an obvious part of the background, and its nature has to be taken into account, the real focus on the inquiry is the merits of being allowed to litigate something which could have been litigated in the previous action. Those are, in my view, the principal facts which Lord Bingham was referring to. They are the facts which are likely to be the most important to the “crucial question” which he posed.

The estoppel or abuse point

[45]The reason that the previous action failed was because the settlement agreement was held to have removed the original cause of action and because the attempt to get round that agreement by alleging that it was brought about by fraudulent representations failed. Mr Gaydamak now mounts another attack on the settlement agreement via what Mr Crow called the “fair dealing rule”, as exemplified in this particular circumstance by Thomson v Eastwood, so it becomes necessary to consider what that case was about. In that case a trustee considered that beneficiary was not entitled to his fund of £3,000 for reasons concerning legitimacy that were honestly held by the trustee but which were wrong. He reached an agreement with the beneficiary that the beneficiary would receive only £300, not £3,000. The House of Lords held that the agreement could not be upheld. Lord Cairns LC said (at p234):

“Looking at the deed itself, what I find is that the parties to it, on both sides, are placing the payment of this £300 in discharge of the legacy of £3000 upon a ground which, when it comes to be looked at judicially, shews that if there was not fraud intended and perpetrated by the one side upon the other, there was, at all events, a state of mind, upon the part of all the parties to this transaction, which shewed that they were under an utter and entire mistake, and delusions, as to what was and what was not material as to the title of the legatee. Looked at in that way, and bearing in mind that it is a dealing between a trustee and his cestui que trust, although I have no evidence to fix any fraudulent motive or design upon it, I find it to be a dealing in which the trustee, without any reason or ground which can bear a moment's examination, is putting aside and repudiating and denying the title of his cestui que trust, and is, upon the footing of that repudiation, making to him a payment of £300, in discharge of that which ought to have been a payment to him of £3000. My Lords, that of course is a transaction which, unaffected by any question as to length of time or acquiescence or change of circumstances, could not be allowed in a Court of Equity to stand for one moment. It requires no evidence of fraud to overthrow it; it is a transaction which in itself is absolutely null and void. It is, as I took occasion to say to the learned counsel during the course of the argument, as invalid, as much a nudum pactum, as if a person without any instrument to support it chose to set up a payment of £300 in discharge of a debt of £3000. The instrument, with all that is related in it, is an instrument which cannot for a moment stand in the way of a suit, if brought in proper time, and brought under proper circumstances, to recover the legacy in respect of which this payment has been made.”

[46]Mr Crow’s case involves a straight transposition of this ruling to the facts of the present case. Mr Leviev was a trustee. He denied the trust in his dealings and in his pleadings, and then entered into a deal with his beneficiary in which the beneficiary got nothing. That, it is said, brings the case straight within the above principles. If the transaction was viewed as a trustee purchasing from a beneficiary then Mr Gaydamak is no worse off because of what Lord Cairns sad at p236:

“A trustee, for example, buys from his cestui que trust the trust property; there is no rule of law which says that a trustee shall not buy trust property from a cestui que trust, but it is a well known doctrine of Equity that if a transaction of that kind is challenged in proper time, a Court of Equity will examine into it, will ascertain the value that was paid by the trustee, and will throw upon the trustee the onus of proving that he gave full value, and that all information was laid before the cestui que trust when it was sold.”

[47]In the present case Mr Leviev did not give proper value, and did not even begin to discharge the onus said to have been upon him. Nor was all (or indeed any) information put before Mr Gaydamak before he signed the settlement agreement.

[48]Like the Court of Appeal, I assume this case to be arguable. Mr Miles did not suggest that I should do anything else. If it were established it would provide the means for Mr Gaydamak to escape the clutches of the settlement agreement, leaving him free to pursue his trust claims. It is a point which is “essential to the existence or non-existence of a cause of action” in the first proceedings, whether one looks at Mr Gaydamak’s cause of action for breach of trust (or breach of contract) or what is said to be Mr Leviev’s cause of action on the settlement agreement (I am not myself satisfied that the latter cause of action exists in a meaningful sense, but that does not matter for the purposes of this application). The point is therefore potentially within the second of Lord Sumption’s categories of cause of action.

[49]It therefore becomes necessary to consider whether it could with due diligence have been raised. It plainly could, and Mr Crow did not contend otherwise. No clear explanation was given as to why it was not raised. Mr Gaydamak’s present legal team (solicitors and counsel) is different from the team that acted for him up to and including the trial, and there is no indication from the first team as to why the point was not taken. The only explanation that is now proferred is more of a suggestion from Mr Gaydamak’s new solicitor than a piece of evidence, which is that it would seem to have got lost “in the dust and heat of the battle”. The sensible inference is that it was probably overlooked.

[50]That takes one on to the last stage of the inquiry, about which the application before me revolved, namely should it have been raised.

[51]Mr Miles submitted that the new action should not be allowed to be run. The subject matter of the new action clearly belonged in the first action. The point could have been taken, and it plainly should have been taken. If it had been run the evidence necessary to deal with it would have been made available in those proceedings and the point would have been argued alongside the fraud argument that was run (and rejected). There could well have been evidence and argument as to the proper law of the trust (as observed by Lloyd LJ in the Court of Appeal in refusing permission), and there would in my view have been argument on the applicability of the Thomson v Eastwood principles to facts such as those in this case. All these points were naturally the subject of the previous proceedings. They should have been raised, there are no exceptional circumstances which would permit them to be raised now and (if it matters to cause of action estoppel) it would be abusive to allow them to be raised now. The fresh proceedings amount, of themselves, to an unjustified harrassment because they are raising matters which could easily have been run before (and should have been). If there were a new trial then another set of substantial costs would be incurred (the costs of each side of the first proceedings are said to exceed £1m). Furthermore, there had been significant delay in launching these new proceedings - 10 months elapsed between the Court of Appeal judgment refusing permission to appeal and the issue of the claim form in this case.

[52]Mr Crow submitted (as I have observed) that the only question is whether the new proceedings are an abuse. It would not be an abuse to raise the points now, and it would be fair to allow them to be raised, for the following reasons:(i) Mr Leviev succeeded in the first action purely as a result of his own breach of trust. He was only in a position to be able to extract the settlement agreement as a result of having denied the existence of the trust.

(ii) The breach of trust was dishonest.

(iii) The breach of trust was compounded by the giving of false evidence (about non-signature of the 2001 agreement, on which he was disbelieved) and other matters.

(iv) Fresh evidence is available which, it is said “strongly suggests” that the false evidence adduced by Mr Leviev extended also to forgery. This relates to a document which he said amounted to instructions given by Mr Gaydamak to his Israeli lawyer for the drawing of the 2001 agreement. I amplify this point in a separate section below.

(v) While Mr Crow accepted that the Thomson v Eastwood argument could have been raised by Mr Gaydamak in the first proceedings, the true position in law was that the onus was on Mr Leviev to prove the settlement agreement was honest, fair, at proper value and with full disclosure, with no advantage being taken of Mr Gaydamak. The true analysis was that Mr Leviev failed to establish a necessary part of his defence, not that Mr Gaydamak failed to establish a relevant part of this claim.

(vi) The assets said to have been misappropriated by Mr Leviev were huge - over US$2bn.

(vii) The costs involved in the first action were large, but were tiny in comparison with the size of the claim.

(viii) A fair trial is still possible, and neither side is in a better or worse position than they would have been in if they had had to deal with the point at the first trial.

(ix) If additional costs are incurred, or costs are wasted, as a result of Mr Gaydamak having a second bite of the cherry, then that can be dealt with under the costs jurisdiction so as to unwind any unfairness.

(x) The delay is insignificant for these purposes.

(xi) It was fanciful to suggest (as apparently Mr Leviev has suggested) that Mr Gaydamak has a remedy over against his previous lawyers. The maximum amount of available insurance does not come anywhere near the value of his claim against Mr Leviev.

(xii) There is no basis for suggesting that the reason the new point was not taken before was because of some sort of calculated decision not to take it. It was simply missed.

[53]I start by considering Lord Sumption’s cause of action estoppel analysis. In my view even a combination of these points does not enable Mr Crow to succeed. On any footing there has been a trial of Mr Gaydamak’s claim in which the validity and force of the settlement agreement was very much in issue. The claim which he now seeks to make involves the same point, with an attack being mounted from a different angle but based on a relationship which was pleaded and which was very much in play. In a system which requires parties to bring forward their “whole case” (see the expression in Henderson v Henderson) it is very much part of what would be regarded as Mr Gaydamak’s “whole case” for these purposes. The facts on which it is said to have been based were largely the subject matter of the litigation, and it could very clearly have been raised. There is no good reason why it should not have been raised and in normal parlance it “should” have been raised, not merely because it “could” with reasonable diligence have been raised (which it plainly could), but because it was so closely entwined with the issues in the action as it was framed. It plainly falls within the wording of Lord Sumption’s second category of cause of action estoppel. It is impossible to think of a good reason for not raising it. Negligence, inadvertence or accident (which, in various versions, are Mr Crow’s explanation for the point not being run) are not good reasons for not having taken it earlier, or for allowing it to be taken in a second action - see the citation from Henderson v Henderson. Insofar as there may be a “special circumstances” exception (see again Henderson v Henderson) the reasons advanced by Mr Crow do not amount to such circumstances, for the reasons given below when I consider the abuse analysis.

[54]Thus the new action seems to me to fall fairly and squarely within Lord Sumption’s second category of cause of action estoppel. If, however, one has to embark on an abuse analysis the result is, in my view, the same. It would be an abuse to allow these proceedings to continue.

[55]The abuse point arises against the background of the policy encapsulated in Henderson v Henderson. Mr Crow pointed out that the fact that there has been a previous action with adverse findings is the starting point for the inquiry as to whether the second action is an abuse, not the answer to it. That is true to a degree in that without the previous action there would be no need for the inquiry, but it is more than a mere starting point. It is the whole reason why the abuse point needs to be considered, and the normal expectation that parties should normally bring forward their whole case is a fundamental principle against which any determination of the abusive nature of the second proceedings has to be measured. The closer the connection between the second and the first proceedings, the more likely it is to be abusive. The potential abuse is seeking to run a point which was previously available (to use a non-loaded term) when the principle of finality is firmly in place underpinning the whole argument. It will, at least prima facie, be abusive to run a point in a second set of proceedings which could easily have been run on the first and which was “clearly part of the subject matter” of the earlier proceedings (see the formulation in Greenhalgh v Mallard

[1947] 2 All ER 255

at 257). If that premise can be established then if nothing else is established the later proceedings are likely to be an abuse. That means that, in practical terms, a burden shifts to the claimant in the second proceedings to justify what would normally be unjustifiable. This is not to reverse the burden as stated by Lord Bingham in Johnson v Gore-Wood; it is how burdens can shift in practice.

[56]Nothing that Mr Crow relies on in his enumerated points weighs against the prima facie position that the present proceedings are an abuse because they raise a point which was clearly a part of the subject matter of the earlier proceedings. His first three points are really variants or aspects of the same overall point - that Mr Gaydamak had a case for saying that there was a breach of trust and that that breach was serious. I accept his proposition, but on analysis it amounts to no more than describing one of the elements of the case that he now wishes to run. Various aspects of those claims were already in issue in the first action - a failure to administer the trust properly, a failure to pay sums due, and a duty to keep accounts and furnish information. The Defence then denied the trust. That is all part of the same breach. All it does is perpetuate it. The further denials in evidence are all part of the same thing. Its dishonesty is effectively built into the breach because of its nature. So these are not new points - they were the stuff of the first action. I fail to see how describing them in the way they are now described prevents the new action being abusive.

[57]Running through Mr Crow’s submission was the not quite stated but nevertheless present proposition that Mr Leviev had a virtually incontestable case on the Thomson v Eastwood point. Mr Crow did not actually quite go so far as to say that, and Mr Miles accepted that it was, for the purposes of this application, arguable, but I should make it clear that I would not accept that the point is any more than arguable for these purposes. Its success as a point will depend on its being established that the trusts in this case are English law trusts, or some other jurisdiction’s trusts to which the principles in Thomson v Eastwood applies, and it is not absolutely plain that that is the case. That is one of areas where the case might have been run differently below if the point had been taken there, as Lloyd LJ found. Furthermore, it assumes that the principles apparently appearing in that case are applicable to a trust which is a modern commercial trust, where the trustee is involved in sophisticated litigation with a fully represented beneficiary, where the beneficiary actually knows that the trustee is denying the trust, that he does not know what the assets are, that he is not being paid what he says his entitlement is and is not receiving full information about the trust, and is suing about all that, and nonetheless settles the claim. While I do not need to rule on the strength of the point (and I am told that a lot more authorities were cited, at least in Mr Gaydamak’s skeleton argument in the Court of Appeal, which were not shown to me) I can say that I regard the point as far from obvious. Mr Crow’s not quite stated proposition is not, in my present view, necessarily correct. It smacks of a rather mechanistic approach.

[58]Mr Crow’s point that Mr Leviev was only in a position to be able to extract the settlement agreement as a result of having denied the existence of the trust is in a limited sense true but not particularly relevant to anything. The word “extracted” is somewhat loaded. The allegation that the settlement was improperly procured was made via a fraudulent misrepresentation claim. A less loaded way of putting it (in the light of the fact that the misrepresentation claim failed) is that there was a basis for a compromise because the trust relationship was denied and there was a dispute about that. When put that way it can be seen to be true but irrelevant (to the point in hand).

[59]The fresh evidence point (iv) is one of some factual complexity. I deal with it in the next section of this judgment. For present purposes I can merely express my conclusion that the point is not central to the actual issue which lies at the heart of these proceedings, it went to an issue on which Mr Gaydamak actually won anyway (the signing of the 2001 agreement) and the evidence itself is not at all compelling or particularly probative.

[60]Mr Crow’s point (v) does not reflect the manner in which the point would arise in properly conducted proceedings. Mr Gaydamak would not have been entitled simply to have bounced Mr Leviev into the point at the trial, without its being foreshadowed in the pleadings. When the settlement agreement was pleaded by amendment to the Defence Mr Gaydamak responded by pleading that the agreement was voidable as a result of the fraudulent misrepresentation. He would not have been allowed to plead that alone and make no reference to the Thomson v Eastwood point, and then run the latter at trial as well, as Lloyd LJ observed in the Court of Appeal hearing (see paragraph 24 of his judgment). Mr Gaydamak would have had to have raised the point first, and he did not do so. The argument also presupposes that Thomson v Eastwood applies with all its vigour to the present claim, and I have already made observations about that.

[61]Point (vi) (the size of the claim) may be a correct observation, but it is no more than that. The size of the claim is of no great relevance to Mr Crow’s case. It might even be turned round against him, by saying that if it is a big claim then that is all the more reason not to allow it to be used to launch a second, potentially harassing, set of proceedings. In truth the point does not favour either party.

[62]Point (vii) (costs) counters an argument of Mr Miles. It is true but not helpful.

[63]Point (viii) (the possibility of a fair trial) is in my view accurate. It has not been suggested that a fair trial is now not possible, but Mr Crow’s point does not advance his case - it merely closes off a point that might have been made against him but was not.

[64]I accept Mr Crow’s points (ix) and (x) but they do not get him very far.

[65]If it were relevant to match up the value of the potential claim with the possible fruits of a negligence action then Mr Gaydamak’s mis-match point in (xi) would have some force. However, that mis-match was not really a point urged against him, and I do not consider it to be of any relevance. As to point (xii), despite the absence of any real evidence as to why the point was not taken, I am prepared to assume there was no calculated decision not to take it and that it was missed by accident. That, however, does not assist Mr Crow, as appears from Henderson v Henderson.

[66]Mr Crow’s enumerated points therefore do not provide him with any material for resisting the conclusion that maintaining the present proceedings would be an abuse because they raise issues which, in accordance with the expectations encapsulated in Henderson v Henderson, ought to have been raised in the first proceedings. Mr Crow’s submissions also contained dire forebodings as to the sort of message that would go out to trustees if the point could not be taken. He also submitted that if Mr Gaydamak were entitled to take his point now then the resulting situation would offend the sensibilities of normal right-minded people. I am not impressed by either point. I am not sure what undesirable message would go out to trustees if Mr Gaydamak is not allowed a second piece of litigation. If the message is that they will, if sued, only be obliged to go through one trial and will not have to stand a second trial if a point is missed in the first, then that is a message that is justifiable and applies to most defendants. No other message would go out from a decision in this application in favour of Mr Leviev. So far as normal right-minded people are concerned, I am not sure that either party in this case would be able to enlist their sympathies.

[67]I therefore find that Mr Crow’s application fails whether the principles of cause of action estoppel are engaged or whether the principles of Henderson v Henderson are engaged.

The “fresh evidence” point

[68]I return now to the details of the point raised by Mr Crow under his point (iv). The facts relevant to the point are as follows.

[69]One of the key issues in the first trial was whether Mr Leviev signed the 2001 agreement. He denied that he had signed it, and as part of his case he sought to make the case that the agreement had been drafted by Mr Gaydamak’s Israeli lawyer, not his own. He supported his case in that respect by pointing to certain faxes which were said to support it and by reference to a manuscript document which contained rough references to some of the terms of the agreement which Mr Gaydamak relied on. This last document contained an attorney’s date stamp with some manuscript within it in ink. Mr Gaydamak denied that these documents were genuine documents or that his lawyer had received the manuscript document. All this went to the question of whether Mr Leviev actually signed the final agreement.

[70]Vos J found that the questioned documents (fax and manuscript document) were genuine and that Mr Gaydamak’s lawyer had received the manuscript document and put his stamp on it. He made a specific finding in which he rejected Mr Gaydamak’s “vehement” denials that the faxes were genuine or that Mr Gaydamak’s lawyer received the manuscript document and put his stamp on it. To that extent the findings were in line with Mr Leviev’s case. However, he went on to find that Mr Leviev had in fact signed the document; in other words, on the main point he favoured Mr Gaydamak’s case and believed Mr Gaydamak and not Mr Leviev despite his views of Mr Gaydamak’s evidence about the provenance of the preceding documents.

[71]Mr Gaydamak now seeks to revive the question of the genuineness of the manuscript document by reference to some new expert evidence. Each side instructed document experts at the trial. Neither of them could date the disputed documents. They each noted that the purported faxes had not apparently been through a fax machine, though the defendant’s expert then changed her mind about that. In a report dated 31st May 2012 (the 6th day of the trial) the defendant’s expert reflected on the question of dating documents by reference to dating the inks used. She said that the area was a controversial one, and no UK laboratory undertook such work. The claimant then went to another expert (Dr Easthaugh) whose report was received on 8th June 2012. He said that in the absence of destructive testing the ink on the document could not be dated. Then it became apparent to the claimant that there were experts in Israel who could date documents by destructive testing, and one of them, a Dr Rosengarten, arrived in England on about 12th June 2012. He did not carry out any testing at the time and a decision was apparently taken not to seek to have an adjournment of the trial to allow him to conduct tests. None were therefore conducted at that time.

[72]However, he has since conducted such tests and produced a report dated 12th December 2013. He has examined the manuscript document and in particular the date stamp with the ink manuscript within it. He observes that the latter ink is from a fountain pen and notes that: “3. … Laboratory experiments on inks written in last decade show that inks whose age is less than five years tend to dissolve immediately in cold water, while old inks do not tend to dissolve immediately in cold water. 4. The ink within the stamp in Exhibit 1A dissolves immediately in cold water. This type of dissolving is not typical of an ink aged about 10 years. This type of dissolving is typical to ink aged less than 5 years."

[73]He could not draw any other conclusions about the age of any of the other ink in the relevant documents, and concludes in his Summary:

"1. The manner in which the ink dissolves in cold water in exhibits 1A … is typical of ink aged less than 5 years and not of ink aged 10 or more years."

Exhibit 1A is the manuscript document bearing Mr Gaydamak’s lawyer’s date stamp.

[74]The report deals with the faxes as well but the evidence of Mr Gaydamak’s present solicitor served in opposition to the application refers only to the findings about the ink in the date stamp. He says: “It can be seen from Mr [Rosengarten's] report that the date stamp (which was supposedly affixed to the document in December 2001) cannot be more than 5 years old. It follows that these documents too were fabricated in order to deceive the court and that Advocate Modan and Mr Zimmerman were, like Mr Mondshine and probably Rabbi Lazar recruited to lie and deceive the court."

[75]These documents do not go directly to the issue or point on which Mr Gaydamak now seeks to sue. However, Mr Crow says that they go to the overall credibility of Mr Gaydamak's evidence and that credibility in turn would have been significant when it came to assessing Mr Gaydamak's evidence about the circumstances in which the settlement agreement was signed. In that way the point is said to be relevant to the application before me.

[76]In his skeleton argument Mr Crow goes further. He submits:

"Furthermore, there is a powerful case for saying that the Trial Judgment was obtained by fraud, in two respects… 29.2 First, the credibility of Mr Gaydamak in relation to the critical issue of what was said in the lead-up to signing the Settlement Agreement was undermined by reference to evidence which now appears to have been forged but which, at trial, Vos J accepted as being genuine."

[77]Faced with this latter allegation Mr Miles deployed a line of authority which decides that if it is desired to allege that an earlier judgment was obtained by fraud it is necessary to bring an action to that end (unless the fraud is clear enough to enable the Court of Appeal to deal with the point on an appeal) - see e.g. Nobel v Owens

[2010] 1 WLR 2491

. However, Mr Crow disclaimed that as an objective in the present proceedings, so I do not need to deal with this further. Mr Crow seemed to confine himself to deploying the material (in this part of the case) as material which is said to demonstrate the non-abusive nature of this action.

[78]I am afraid I had difficulty in seeing how, conceptually, this sort of evidence fitted into the scheme of his argument. It was not evidence which went to a central issue in the case. It went to an issue on which Mr Gaydamak actually won, despite his particular evidence on the history of the documents being not accepted. It can only have gone to credibility; and in truth Mr Crow did not elevate its significance above that. He submits that it would or might have made a difference to Mr Gaydamak’s credibility on the issue of the fraudulent representations. However, even allowing that, something that remains just a credibility point is not a factor which justifies a second set of proceedings. If it were left there I would not have considered it added any real weight to that justification, or any real weight in the “abuse” scales.

[79]However, this analysis demonstrates something else in the context of this case. As I have pointed out, Mr Crow has disclaimed an attempt attack the judgment as having been obtained by fraud. Nonetheless, I think that he is making a disguised attempt to do just that. He seeks to use the new evidence to undermine Vos J’s views on credibility, and to make that relevant by linking it to the judge’s finding in relation to the alleged fraudulent representations. However, his new action (this one) does not seek to re-visit that question. It seeks to run another point - the Thomson v Eastwood point. (I leave the conspiracy point on one side for the moment.). It is completely irrelevant to that point. So Mr Crow is not seeking to justify something which might be an abuse by reference to the fact that some new evidence makes it justifiable to revisit one of the points decided against his client in the first proceedings (the fraudulent misrepresentation point) so that he can have another attempt to win on that point. He uses it to make (or resist) an abuse argument so that he can justify having a go on a different point. It is completely irrelevant to that different point. It does not assist that different point to be able to attack the basis on which Vos J reached his decision to uphold the settlement agreement. However, that is what he is actually doing, on analysis. Since he disclaims an intention to do it, he cannot be allowed to do it in disguise.

[80]However, the matter does not rest there. There are various other reasons which lessen such weight as it might otherwise have had as an abuse related point (or indeed as a fraud point). They are as follows:(a) The evidence itself is not strong. The solicitor’s evidence which introduces it, and which I have referred to above, significantly over-states its effect. Mr Crow’s skeleton argument betrays the same vice. The forensic evidence is thin. The report is very short and no evidence of the testing is given other than that it involved testing the water solubility of the fountain pen ink. No technical details are given. It must be remembered that one of the English experts considered the whole area of ink dating to be “controversial”. Dr Rosengarten then frames his conclusion in this controversial area in terms of “typical” behaviour, and nothing more. It can certainly be said that it would support a case that the ink was not 10 years old, but it does not demonstrate it. If one imagines no evidence other than that, it would not be enough to support an allegation or recent forgery.

(b) When placed in the context of the other evidence that the judge had, it is impossible to conclude that it would have been sufficient to outweigh what were otherwise important factors in Vos J’s determination on the authenticity of the document. I have been taken by Mr Miles to the judge’s reasoning on the point. He considered oral evidence (including that of Mr Zimmerman, Mr Leviev’s lawyer, who said he did not draft the 2001 agreement) and placed a lot of emphasis on the improbability of Mr Gaydamak’s Israeli lawyer forging this document. He found that it would have been more natural for a person in Mr Gaydamak’s position, rather than Mr Leviev’s, to have produced the drafting for the 2001 agreement. All that would suggest that the disputed documents were genuine, since they were apparently the background to the final agreement. If one imagines Dr Rosengarten’s report standing unchallenged in the proceedings (which is the most advantageous assumption for Mr Gaydamak), with all the other evidence that the judge had, I think it is fanciful to suppose it would have been accepted by the judge as demonstrating recent forgery and therefore to have led him to believe Mr Gaydamak on that particular point. It is simply not strong enough.

(c) It is also impossible to imagine that there is any significant likelihood that the judge’s view of Mr Gaydamak’s credibility, and version of events, in relation to the settlement agreement would have been materially affected so as to present any real likelihood of his actual conclusion being displaced. As I have already pointed out, the judge actually accepted Mr Gaydamak’s evidence as to who drafted the 2001 agreement, despite his not accepting Mr Gaydamak’s evidence on the authenticity of the disputed documents. He reached his conclusion on the settlement agreement on the basis of a variety of matters, including the probabilities and what Mr Gaydamak had said in an earlier statement (see paragraph 231). While it is true that he expressly takes into account the fact that Mr Gaydamak had not told the truth on a number of matters, the important point is the plural - there was more than one untruth. There is no reason to suppose that subtracting this particular matter from that number would have made any difference.

[81]Mr Miles also sought to demonstrate that the timing of expert evidence in the case meant that Mr Gaydamak had an opportunity to try to get the evidence in and did not do so. No explanation has been given for failing to do so, let alone one which was justified. If this evidence is useful it could have been obtained with due diligence, and should have been obtained. He submits that that, too, is a reason for not allowing the point to be relied on now.

[82]There is much in Mr Miles’ point, but I do not think he needs it. I shall deal with it briefly. I do not need to set out the earlier stages of the expert evidence. It is sufficient to note that Mr Gaydamak’s then lawyers had identified a possible point about dating inks, and had realised by about 8th June that there was a dating point that could not be dealt with in this country. By this time the trial had been proceeding for 7 days and had been adjourned to resume on 12th June for evidence on an 8th day. The lawyers then managed to identify Dr Rosengarten as being potentially able to assist, and he arrived in this country “on about” 12th June 2012 (to use the words of Mr Barden, Mr Gaydamak’s present solicitor). At that time no permission had been given for destructive testing by Mr Leviev’s lawyers (who held the originals), and further tests would have taken a considerable time, and it would have been necessary to seek an adjournment of the trial. Then Mr Barden adds the following words:

“Further, it was not known that the judge would place such heavy emphasis on the apparent authenticity of the documents as a signpost to our client’s credibility.”

[83]He was not involved at the time and therefore cannot have been privy to the thinking. Nevertheless that is his client’s case. What it suggests is that a view was taken that the point was not viewed as likely to be significant enough to merit taking serious steps to get the evidence in. Translating that, it means that the present attempt to revisit the point is being taken in the light of a judgment which reveals that the assessment of its impact of the evidence was wrong - it transpires that the judge was vesting a particular point with an unanticipated significance, so the party wishes to introduce some more evidence now that it can be seen how the judge viewed it. That is simply not a sustainable basis for introducing fresh evidence. Every party’s case would be different if they were allowed to run it with the benefit of a judgment which demonstrates how a judge actually views matters, but one has one action, not two, and every party has to make decisions as to how material is likely to impact the trial and then live with those decisions.

[84]Mr Miles’ criticism of Mr Barden’s evidence on this point was different. He points out that Mr Barden does not give any source for his evidence as to what happened at a time when he was not involved, and that what he says about the motivation for not trying for an adjournment to get the evidence in (which adjournment Mr Barden thinks would not have been granted) is speculation. There is much in what Mr Miles says, but in the light of the other factors which I have referred to I do not need to lengthen this judgment by dealing with the point.

The conspiracy claim and other claims

[85]The attempt to introduce the conspiracy claim is attacked on two bases. The first is that it is an abuse of process because it is an attempt to repackage the fraudulent representation claim, and the second is a complaint that it is, as a conspiracy, inadequately pleaded.

[86]I do not need to deal with this claim. Unless Mr Gaydamak can successfully undermine the settlement agreement, he accepts that this agreement bars the conspiracy claim. Since, for the reasons appearing above, he cannot undermine it on the basis of the Thomson v Eastwood point, the conspiracy claim fails anyway and any other abusive pleading, or inadequate pleading, does not matter. I would also observe that were Mr Gaydamak to be able to challenge the settlement agreement successfully the conspiracy would become irrelevant, because it would have been unsuccessful - Mr Gaydamak would be able to assert his trust claims after all. Mr Crow accepted that he had no answer to this analysis when I put it to him. I shall therefore not deal with this claim. The same applies to the other ways in which he seems to put his new claims against Mr Gaydamak.

Conclusion

[87]It follows that this application succeeds and the action should be struck out as against Mr Leviev.