Rawlinson & Hunter Trustees SA v ITG Ltd & Anor (Re: Tchenguiz) [2015] EWHC 1664 (Ch)

[2015] EWHC 1664 (Ch)Case No HC 2013 000411
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Venue Royal Courts of Justice, Rolls Buildings, Fetter Lane,Date 10/06/2015
London, EC4A 1NL
Before
MR JUSTICE MORGAN
Between
RAWLINSON & HUNTER TRUSTEES SAClaimant(1) ITG LIMITEDDefendants(2) BAYEUX TRUSTEES LIMITEDDefendant
Mr Charles Hollander QC and Ms Elizabeth Weaver (instructed by Stephenson Harwood LLP) for ClaimantMr Daniel Lightman and Mr Paul Adams (instructed by Bircham Dyson Bell LLP) for DefendantsHearing Hearing date: 4 June 2015
Judgment

The application

[1]On 12 January 2015, the Claimant issued an application notice seeking the following relief:(1) permission to re-amend its claim form and its particulars of claim in the form of drafts annexed to the application notice;(2) permission to add Rawlinson & Hunter Trustees SA in its capacity as trustee of the NS One Trust (“the NS1 Trust”);(3) permission to add Vimaletor Holdings Limited (“Vimaletor”) as a second claimant;(4) permission to add ITG Limited in its own capacity as a Defendant (this part of the application was later not pursued); and(5) (to the extent necessary) permission to serve the re-amended pleadings and other documents on the Defendants out of the jurisdiction, in Guernsey.[2]In relation to the application for permission to re-amend its pleadings, the Claimant put forward the contention, in its application notice, that new documentary evidence had come to light which justified and supported its proposed re-amendments.[3]Mr Hollander QC and Ms Weaver appeared on behalf of the Claimant and Mr Lightman and Mr Adams appeared on behalf of the Defendants.[4]At the hearing of these applications it was agreed that the real focus of the argument should be on the application for permission to serve the proposed re-amended pleadings out of the jurisdiction. The existing pleadings (an Amended Claim Form and an Amended Particulars of Claim) have been served, following the grant of permission by the court to serve out of the jurisdiction. The proposed re-amendments to the pleadings seek to introduce further causes of action. It was common ground that the court should not grant permission to re-amend the pleadings to introduce further causes of action against a foreign defendant unless it was a proper case for the court to grant permission to serve out if those claims had been the subject of a separate claim form for which permission to serve out was sought. In relation to that matter, the Claimant submitted that the court ought to give permission to serve out in relation to the pleadings which set out the further claims. The Defendants submitted the contrary.[5]The Defendants have raised a preliminary objection to the court considering whether it ought to give permission to serve out in relation to the pleadings which set out the further claims. The Defendants say, correctly, that the present application for permission to serve out in relation to the further claims is not the first application for such permission. They say that the Claimants previously applied for that permission in relation to these claims and, when the matter was considered at an inter partes hearing, the court concluded that the Claimants should not be permitted to serve out in relation to them. It is then submitted that there is an issue estoppel which prevents the Claimant making this second attempt to obtain permission to serve out in relation to the further claims and, alternatively, that this application is an abuse of the process of the court and the court ought not to entertain it.[6]The Claimant submits that there is no relevant issue estoppel, that the present application is not an abuse of the process of the court and that the court should hear and determine the application on its merits in accordance with the established general principles as to service out of the jurisdiction.[7]At the hearing, I invited argument on the Defendants’ preliminary objection based on issue estoppel and abuse of process. Having concluded argument on those issues, I indicated that I did not wish to hear argument on the application itself and that I would reserve my decision on the preliminary objection.[8]This judgment contains my reasons for concluding that the present application, in so far as it seeks permission to serve pleadings containing the further claims out of the jurisdiction, is an abuse of the process of the court and, as a result, that the application ought to be dismissed.[9]When this action began, there were two Claimants, Rawlinson & Hunter Trustees SA (“R&H”) and Vimelator. At present there is only one Claimant, R&H. The present application before me is by the present sole Claimant but if I were to grant it there would again be two Claimants, as Vimelator would again become a second Claimant. Because the substance of this application is for permission for R&H and Vimelator to serve out of the jurisdiction, I will, in the remainder of this judgment, refer to them as “the Claimants”. For convenience and to avoid having to keep explaining that for some of the time there were two Claimants and for some of the time there was only one, I will use the term “the Claimants” whether I am referring to both of those companies or just R&H as the present sole Claimant.

Background matters

[10]The Tchenguiz Settlement (“the TS”) is a discretionary trust created in 1986 and governed by the laws of Guernsey. At all relevant times until 9 April 2010, the sole trustee of the TS was Investec Trust (Guernsey) Ltd, a company registered in Guernsey; it has now changed its name to ITG Ltd (“ITG”), and is the First Defendant. On 9 April 2010, ITG was replaced as trustee by R&H, a company registered in Switzerland.[11]The Tchenguiz Discretionary Trust (“the TDT”) is a discretionary trust created in 2007 and governed by the laws of Jersey. At all relevant times until 1 July 2010, the trustees of the TDT were ITG and Bayeux Trustees Ltd (“Bayeux”); Bayeux is the Second Defendant and is registered in Guernsey. On 1 July 2010, ITG and Bayeux were replaced as trustees by R&H.[12]The NS1 Trust is a discretionary trust, created in 2009 and governed by the laws of Jersey; R&H has been and is the sole trustee of that trust.[13]Vimaletor is registered in the British Virgin Islands. The issued share capital of Vimaletor is held by R&H on trust for the NS1 Trust.[14]Iver Resources Ltd (“Iver”) is registered in the Isle of Man. The issued share capital of Iver was vested in ITG and Bayeux as trustees of TDT. Although since 1 July 2010 ITG and Bayeux have ceased to be the trustees of the TDT, they remain the registered holders of the shares in Iver. Iver is the lessee of a substantial property in London in which Robert Tchenguiz resides. He is a discretionary beneficiary under both the TS and the TDT.[15]Until March 2009, Mr Clifford was a director of ITG and a director of the corporate directors of Bayeux. It seems that from April 2009, he acted as a consultant for ITG.

The procedural history

[16]On 3 April 2013, R&H and Vimelator, as Claimants, issued a Claim Form naming two Defendants, ITG and Bayeux. Particulars of Claim were attached to the claim form. The Particulars of Claim pleaded the matter in some detail but essentially put forward three claims, to which I will refer as “the contract claim”, “the estoppel claim” and “the loan agreement claim”.[17]The contract claim concerned an alleged contract by ITG and Bayeux as the trustees of the TDT to sell their shares in Iver to the trustees of a new trust which would be created. The contract claim was pleaded as follows:(1) the contract was made orally at a meeting in London on 5 February 2009; the persons present at that meeting were Mr Clifford (on behalf of ITG and Bayeux), Victor Tchenguiz (the settlor of the TS), Robert Tchenguiz (a discretionary beneficiary under the TS and the TDT and resident in the property of which Iver held the lease) and Mr Smalley (a director of R20 Ltd, an investment adviser to the trustees of the TDT);(2) the contract was varied on 11 March 2009 at a meeting in London attended by Mr Clifford and Mr Smalley when Mr Clifford on behalf of the trustees of the TDT agreed a variation of the contract with himself on behalf of the trustee of the TS;(3) on 26 March 2009, a payment of £6 million was made by the trustees of the TS to the trustees of the TDT and this was in effect a part performance of the contract as varied;(4) the NS1 Trust was established as the new trust so that the trustees of that trust would be the transferee of the shares in Iver;(5) the trustees of the NS1 Trust were entitled to enforce the contract made on 5 February 2009, as varied on 11 March 2009;(6) there were further negotiations which led to an oral agreement on 15 September 2009 which varied the earlier agreement;(7) under the agreement as varied on 15 September 2009, the trustees of the TDT were obliged to transfer the shares in Iver to Vimelator;(8) the pleadings do not identify who made the alleged oral agreement on 15 September 2009;(9) documents were drafted to give effect to the contract as varied on 15 September 2009 but those documents were not executed; and(10) R&H and Vimelator claimed specific performance of the contract as varied on 15 September 2009 and other remedies for breach of contract.[18]The estoppel claim was pleaded in the alternative to the contract claim. It was pleaded that there was a proprietary estoppel binding ITG and Bayeux as the trustees of the TDT in favour of ITG as the trustee of the TS. It was pleaded that there were promises and representations on 5 February 2009 which were relied upon when the trustees of the TS paid £6 million to the trustees of the TDT on 26 March 2009. It was further said that there was further reliance by establishing the NS1 Trust and Vimelator. Although not spelt out in the pleading, the allegation must have been that on 5 February 2009, Mr Clifford in one capacity made promises and representations to himself in another capacity and then in that second capacity he relied on his own promises and representations. The pleaded result was that ITG and Bayeux as trustees of the TDT held the shares in Iver on trust for the trustee of the TS or the NS1 Trust.[19]The loan agreement claim was pleaded in the further alternative to the contract claim and the estoppel claim. It was pleaded that there was a written loan agreement dated 21 May 2009 between the trustee of the TS as lender and the trustees of the TDT as borrower in relation to a loan of £6 million, which sum had been advanced on 26 March 2009.[20]The Claimants needed to obtain permission to serve the Claim Form and the Particulars of Claim of 3 April 2013 on the Defendants out of the jurisdiction. On 12 July 2013, the Claimants issued an application notice seeking such permission. The application notice stated that the contract relied upon was made within the jurisdiction and was governed by English law; the Claimants relied on paragraph 3.1(6) of Practice Direction 6B to CPR Part 6 (“gateway 6”). As to the estoppel claim, the Claimants said that this claim was for a remedy against the Defendants as constructive trustees where the alleged liability arose out of acts committed within the jurisdiction and they relied on paragraph 3.1(15) of Practice Direction 6B to CPR Part 6 (“gateway 15”). The application notice also asserted that the case came within 3.1(11) of Practice Direction 6B to CPR Part 6 (“gateway 11”) on the ground that the subject matter of the claim was property within the jurisdiction. The Claimants’ point was that the subject matter of the claim was the lease of the property in Kensington.[21]In support of their application for permission to serve out, the Claimants relied on the witness statement of their then solicitor, Ms Rickard, a partner of Shearman & Sterling (London) LLP. Her witness statement said that she relied on information provided to her by the Claimants which was true to the best of her knowledge, information and belief. In her witness statement she addressed the established requirements which have to be satisfied on an application for permission to serve out and she contended that they were all satisfied. Her witness statement exhibited a number of documents, including some correspondence between solicitors. This correspondence included a letter dated 16 December 2010 from Macfarlanes to Herbert Smith in which Macfarlanes put forward their contentions in response to what seems to have been an earlier version of the contract claim. Macfarlanes’ letter made a number of points about the alleged discussions on 5 February 2009 and relied on contemporaneous correspondence in support of their contentions that the contract claim was unsustainable. Ms Rickard did not engage with the detailed points made by Macfarlanes but simply stated in her witness statement that these contentions were not accepted.[22]The Claimants’ application was considered by Deputy Master Cousins ex parte on the papers on 25 July 2013 and he granted the Claimants permission to serve out.[23]On 10 September 2013, the Defendants applied, pursuant to CPR Part 11, for the Deputy Master’s order to be set aside, for service of the Claim Form to be set aside and for an order in these terms:
“declaring that the Court has no jurisdiction to try the claim herein, alternatively that it has no jurisdiction to try the claim herein except in so far as it relates to the agreement dated 21 May 2009 … (“the Loan Agreement”) …”
[24]The grounds set out in the Defendants’ application asserted that the Claimants did not satisfy any of the requirements which had to be satisfied in relation to permission to serve out and further contended that there had been material non-disclosure by the Claimants when the matter was considered on the papers on 25 July 2013.[25]In support of their application, the Defendants served three witness statements, all dated 20 September 2013, from Mr Clifford, Mr Wessels and Ms McIntyre. Each of these witness statements contained a substantial exhibit.[26]In his witness statement, Mr Clifford explained the decision making process on behalf of the trustees of the TS and the TDT and the background to the discussions in February and March 2009. He put forward a number of reasons why the discussions in February and March 2009 did not involve the trustees of the TDT entering into a contract with the trustee of the TS, as distinct from there being discussions involving a general consensus as to the desirability of taking further steps which, when taken, would have legal consequences. Mr Clifford exhibited emails and letters between January and May 2009 which he said were consistent with his analysis and inconsistent with the idea that the trustees had made a binding contract at that stage.[27]Mr Wessels is a Guernsey lawyer. In his witness statement he explained some background in relation to the various trusts and he described in detail the very extensive litigation in Guernsey which he said was closely related to the subject matter of the present proceedings in England. He explained that although ITG and Bayeux were no longer the trustees of the TDT, they still retained title to the shares in Iver because of the implications of the litigation in Guernsey.[28]Ms McIntyre is a solicitor in Bircham Dyson Bell LLP who are acting for the Defendants in these proceedings. She sought to summarise the state of the negotiations in so far as they were not covered by Mr Clifford in his witness statement. She exhibited a substantial number of letters and emails from January to October 2009, some 159 pages, dealing with the matters in issue in these proceedings. Ms McIntyre then addressed the established requirements on an application for permission to serve out and submitted that they were not satisfied and, further, that there had been material non-disclosure at the ex parte hearing on 23 July 2013.[29]The Defendants’ application was later fixed to be heard before a Master on 12 December 2013, although I was not told when that date was fixed. Plainly, the Claimants had to decide what to do by way of a response to the evidence which had been served on 20 September 2013. There was no suggestion that the Claimants did not have a proper period of time within which to consider that matter.[30]On 2 December 2013, the Claimants served a second witness statement from Ms Rickard. She stated that she would address the events in January to March 2009 and the conclusion of “the Sale Agreement”, the circumstances surrounding the payment of the £6 million and the making of the loan agreement and the events post 21 May 2009 and “the September Sale Agreement”. As regards the Sale Agreement, she relied on a statement of wishes by Victor Tchenguiz as the settlor of the TS and the fact of the payment of £6 million. She also exhibited some email communications in which there were complaints about delay in carrying into effect what had been discussed in February 2009. As to the loan agreement, Ms Rickard said that there was a lack of evidence from the Defendants as to why that agreement had been entered into. As to the September Sale Agreement, Ms Rickard said that the documents exhibited by Ms McIntyre helped the Claimants’ case. Ms Rickard then addressed the established requirements on an application for permission to serve out and submitted that each requirement was satisfied.[31]On 9 December 2013, the Defendants served a second witness statement from Mr Wessels dealing with the litigation in Guernsey.[32]The Defendants’ application was heard by Master Marsh on 12 December 2013. The Claimants were represented by Ms Weaver of Counsel and the Defendants were represented by Mr Stanley QC. The hearing appears to have lasted the best part of the day. I was provided with a transcript of the hearing but I was only referred to one part of it and I was not invited to read the transcript more widely. The part referred to was a submission by Mr Stanley that there was no evidence from Mr Victor Tchenguiz or Mr Robert Tchenguiz or Mr Smalley about any matter and there was not even any indirect evidence from them via Ms Rickard as she had stated that her source of information was the Claimants. It was pointed out to me that the Claimants did not ask the Master to be given an opportunity to put in further evidence. The Master reserved his judgment.[33]On 25 February 2014, Master Marsh handed down his judgment. His judgment runs to some 34 pages. He recorded that the applicable legal principles were essentially agreed. The issues which he therefore had to address were:(1) was there a serious issue to be tried on the merits in relation to the contract claim (although it was accepted that this issue was subsumed into the issue at (3) below)?(2) was there a serious issue to be tried on the merits in relation to the estoppel claim?(3) was there a good arguable case, with the Claimants having the better of the argument, as to gateway 6 in relation to the contract claim? This involved two sub-issues: a) was there a contract made within the jurisdiction? and b) was there a contract governed by English law?(4) could the Claimants rely on gateway 11?(5) was there a good arguable case, with the Claimants having the better of the argument, as to gateway 15 in relation to the estoppel claim?(6) was England and Wales the appropriate forum?(7) issues as to the loan agreement; and(8) whether there was material non-disclosure on 23 July 2013.[34]The Master held as follows:(1) the question whether there was a serious issue to be tried on the merits in relation to the contract claim was subsumed into the question which he decided at (3) below;(2) there was not a serious issue to be tried on the merits in relation to the estoppel claim;(3) as regards gateway 6, the Claimants did not have the better of the argument that there was a contract made on 5 February 2009; if there was no contract made on 5 February 2009, then it could not have been varied (as the Claimants contended on 11 March 2009 and/or 15 September 2009); if there was no contract at all, then there was no contract made in England; if there had been a contract as alleged by the Claimants, the Claimants did not have the better of the argument as to the contract being governed by English law;(4) as regards gateway 11, the Master only considered that in relation to the estoppel claim and held that gateway 11 did not apply as the subject matter of the alleged estoppel was the shares in Iver, an Isle of Man company;(5) if the Claimants had shown (which they had not) that there was a serious issue to be tried on the merits in relation to the estoppel claim then the Master would be inclined to hold that they had the better of the argument as to gateway 15;(6) it was not necessary to decide whether England and Wales was the appropriate forum but if that had been necessary he would have held that it was not the appropriate forum (and that Guernsey was the appropriate forum);(7) certain issues as to the loan agreement were decided in favour of the Defendants; and(8) it was not necessary to decide whether there had been material non-disclosure on 23 July 2013 but if that had been necessary he would have held that there had been material non-disclosure so that he would have exercised his discretion to set aside the order of the Deputy Master on that ground.[35]In his judgment, the Master paid close attention to the witness statements and to the exhibited emails and letters. The Master was particularly concerned to evaluate the state of the arguments as to the alleged contract made at a meeting on 5 February 2009. He noted that he had a witness statement from Mr Clifford but not from Mr Victor Tchenguiz, Robert Tchenguiz nor Mr Smalley. He said the absence of witness statements from those three had not been explained. However, he also said that the only person who could have entered into a contract on 5 February 2009 was Mr Clifford and the involvement of the other three would go no further than them having views about the desirability of an agreement. As to the witness statements of Ms Rickard and Ms McIntyre, they essentially amounted to statements exhibiting the relevant contemporaneous communications. As to Ms Rickard’s evidence as to Victor Tchenguiz’s wishes, as settlor of the TS, his wishes and his understanding of the intended outcome did not help greatly on the question whether the trustees had entered into a contract. The Master also commented on the limited evidence as to the discussions on 11 March 2009 and 15 September 2009.[36]The Master also closely analysed the contemporaneous documents and made a number of points to the effect that the documents did not support the case for a concluded contract on 5 February 2009. He drew particular attention to emails on 6 February 2009 which plainly contemplated that it remained the position that the trustees would have to consider and agree to implement the proposals which accorded with the wishes of Victor Tchenguiz and Robert Tchenguiz and which were recommended by Mr Smalley.[37]Master Marsh invited the parties to agree a form of order following judgment and they agreed an order essentially in accordance with the Defendants’ draft order attached to their application notice. The order as then made set aside the order of the Deputy Master and set aside the Claim Form and/or service of the Claim Form. The order also declared that:
“The Court has no jurisdiction to try the claim herein.”
[38]The Master refused permission to appeal but the Claimants served an Appellant’s Notice and sought permission to appeal in relation to all three claims. In express terms, the Appellant’s Notice appealed only against the order setting aside permission to serve out and setting aside the Claim Form and did not mention the declaration that the court had no jurisdiction to try the claims.[39]On 2 May 2014, Hildyard J directed an oral hearing of the application for permission to appeal. The application for permission to appeal came before Arnold J on 24 June 2014. The Claimants were again represented by Ms Weaver and the Defendants by Mr Stanley. There was no application by the Claimants for permission to rely on further evidence for the purposes of the appeal. Ms Weaver submitted to the judge that the agreement made on 5 February 2009 was subject to the approval of the trustee of the TS and of the trustees of the TDT and the requirement that there be such approval was subsequently waived. Mr Stanley’s skeleton argument for this hearing submitted that no contract was made on 5 February 2009; in support of that submission he addressed the inherent improbability of the Claimants’ case and he referred to the contemporaneous documents as being inconsistent with that case. He developed these points in his oral submissions at the hearing.[40]Arnold J refused permission to appeal in relation to the contract claim and the estoppel claim. In a short judgment, he said that for the reasons given by the Master and for the reasons put forward by Mr Stanley in his skeleton argument and in his oral submissions, the Master’s decision was “quite simply unimpeachable”. The judge granted permission to appeal in relation to the issues as to the loan agreement and as to material non-disclosure.[41]The Claimants’ appeal was heard by Nugee J on 21 October 2014. The parties were again represented by Ms Weaver and Mr Stanley. Nugee J allowed the appeal in relation to the loan agreement claim and the non-disclosure point. He held that the loan agreement on its true construction was subject to a clause providing for the courts of England and Wales to have exclusive jurisdiction so that no question of the appropriate forum arose. As to non-disclosure, the judge considered the arguments with reference to the loan agreement claim only and without regard to the effect of non-disclosure in relation to the contract claim and the estoppel claim.[42]The order made by Nugee J recited that the appeal was restricted to the grounds relating to the loan agreement and the non-disclosure point. His order was that:
“the Appeal is allowed”
. He then directed that the Claimants should serve an Amended Claim Form and Amended Particulars of Claim pleading only the loan agreement claim. His order did not refer in any way to the declaration made by the Master that the court had no jurisdiction to try the claims in the Claim Form. In accordance with the judge’s direction, the Claimants served an Amended Claim Form and Amended Particulars of Claim dealing only with the loan agreement claim. On that basis, Vimaletor was removed as a claimant.[43]On the same day as the Claimants (now R&H alone) served the Amended Pleadings, they also sent to the Defendants’ solicitors a Re-Amended Claim Form and Re-Amended Particulars of Claim. The Re-Amendments restored the contract claim and the estoppel claim. The Claimants’ solicitors invited the Defendants’ solicitors to agree to the proposed re-amendments but the Defendants’ solicitors did not so agree.[44]The Re-Amended Particulars of Claim are not identical to the original Particulars of Claim but it was not suggested by the Claimants that the causes of action which they wish to put forward in relation to the contract claim and the estoppel claim are different from the causes of action which were advanced in the original Particulars of Claim. I note however two things. The alleged agreement of 5 February 2009 is now pleaded as having been an immediately binding agreement (i.e. immediately binding the trustee of the TS and the trustees of the TDT) but was subject to the approval in Guernsey of the trustee of the TS and the trustees of the TDT. Further, the pleaded variation of the contract on 15 September 2009 was allegedly achieved by a conversation between Jane Kerins of ITG and Mr Smalley, the adviser to the trustees of the TDT. Accordingly, it seems to be alleged that Ms Kerins made a contract with herself albeit, I assume, in two different capacities.[45]On 12 January 2015, the Claimants issued the application which is now before me. On the same day, they issued an application for an expedited hearing of that application. They relied on a witness statement of Mr Foord of Stephenson Harwood LLP, the Claimants’ new solicitors. In response, the Defendants served a witness statement from Ms Jeffery. It is not necessary to refer to the content of those witness statements. The application for expedition came before Birss J on 20 January 2015 when it was dismissed.[46]In support of the application which is now before me, the Claimants have served the following evidence: witness statements from Victor Tchenguiz (dated 18 September 2012), Robert Tchenguiz (dated 8 January 2015 with exhibit), Mr Smalley (dated 12 January 2015 with exhibit) and a second witness statement from Mr Foord (dated 12 January 2015 with exhibit).[47]In response, the Defendants have served the following evidence: a second witness statement of Mr Clifford (dated 1 April 2015 with exhibit) and a third witness statement of Mr Wessels (dated 14 April 2015 with exhibit). The Claimants have replied to this evidence with a third witness statement from Mr Foord (dated 11 May 2015 with exhibit).[48]For the sake of considering whether the court should entertain the present application, I will describe in summary terms the evidence on which the Claimants wish to rely.[49]The statement of Victor Tchenguiz refers to his wishes in February 2009. He stated that he agreed with Mr Clifford that he (Victor Tchenguiz) would pay £5 million to “the trust of my son Robert Tchenguiz”. He also said that when Mr Clifford and he agreed that something should be done by the TS then that is what happened. I can comment at once on that statement. It does not seem to me that it advances the Claimants’ pleaded case. The case put forward in the witness statement comes very close to saying that the assets of the TS were Victor Tchenguiz’s own assets and that he was in a position to direct what should happen in relation to those assets. He also comes close to saying that the assets in the TDT were the assets of Robert Tchenguiz. The case pleaded in the Re-Amended Particulars of Claim does not make those assertions. Rather the pleading is that the trustee of the TS made a contract with the trustees of the TDT and that this contract was subject to the approval of both sets of trustees.[50]Robert Tchenguiz’s witness statement gives evidence about the background to the meeting on 5 February 2009 and to the discussion at that meeting. He states that he and his father, Victor Tchenguiz, wanted the trustees to implement the proposals identified at that meeting. However, as I understand it, that matter has never been in dispute. What is in dispute is whether the two sets of trustees entered into a binding contract to implement those proposals. Robert Tchenguiz does not appear to me to contradict the evidence originally given by Mr Clifford that Victor and Robert Tchenguiz wanted the proposals to be implemented and that the proposals would be put to the two sets of trustees and it was likely that the trustees would accept that the proposals were proper proposals that they should implement. Robert Tchenguiz’s witness statement does not contain evidence dealing with the alleged variations of the alleged contract on 11 March 2009 and 15 September 2009.[51]Mr Smalley’s witness statement describes the background to the meeting of 5 February 2009 and the meeting itself. He says that both Victor and Robert wanted the trustees to implement the proposals identified at that meeting. He says that Mr Clifford agreed to those proposals. He then says that the discussions at the meeting had to be approved by the two sets of trustees in Guernsey. Mr Smalley also gives evidence about the alleged variations on 11 March 2009 and 15 September 2009. As to the first of these, he says that he agreed with Mr Clifford on “the new structure for the deal” and as to the second of these he says that he agreed with Ms Kerins of ITG “a finalised structure”. As Mr Smalley was the adviser to the trustees of TDT, a consensus between himself and a representative of his client, the trustees of TDT, does not go very far to establish a binding contract between the trustee of TS and the trustees of TDT. In effect, what the Claimants want to say on the strength of this evidence is that, on 11 March 2009, Mr Clifford (having consulted Mr Smalley) made an agreement with himself (albeit in another capacity) and on 15 September 2009, Ms Kerins (having consulted Mr Smalley) made an agreement with herself (albeit in another capacity). Mr Smalley also gives evidence about his concerns at the delay on the part of the two sets of trustees in implementing the various proposals but that does not advance the pleaded case as to the existence of a binding contract at any time.[52]In his second witness statement, Mr Foord states that there is additional documentary and witness evidence which justifies the making of the present application. He refers to the witness statements of Victor and Robert Tchenguiz and Mr Smalley and the exhibits to those statements. He then makes submissions on all of the issues in dispute.[53]Mr Clifford’s witness statement in response to the Claimant’s evidence seeks to contradict that evidence in a few respects. Mr Wessels’ third witness statement deals with the litigation in Guernsey.[54]In Mr Foord’s third witness statement, he contends that the evidence of Victor and Robert Tchenguiz and Mr Smalley is important. He then says that they were available to give evidence at the earlier hearing before Master Marsh but:
“ … it was determined at that time that their evidence was not necessary for the determination of the application for service out of the jurisdiction but would be relied on at the trial. It is only since the making of the Set-aside Order and the subsequent appointment of new legal representation for the Claimants that the Claimants determined that such additional witness evidence was required at an earlier time to support the Application and to assist the Court in making its determination.”
[55]Mr Foord also explained that, following a change of trustee, the new trustee, R&H, came into possession of all relevant documents by the latest in early 2012. Mr Foord mildly complained that the documents were not well organised but he did not give any particulars of any real difficulty which would be relevant to these proceedings. He explained that following Master Marsh’s order of 25 February 2014, the Claimants have investigated the documents and found 15 documents which he says are relevant to the present proceedings. He does not say that these 15 documents could not have been found before the hearing of the Defendants’ application on 12 December 2013. He then exhibited a list of these 15 documents.[56]In his skeleton argument for the hearing before me, Mr Lightman for the Defendants analysed the 15 documents and submitted that they were either not “new” or if they were new they were not significant. At the hearing, when opening his application, Mr Hollander QC did not make any oral submissions to contradict Mr Lightman’s assessment. I invited Mr Lightman to develop orally his points on the 15 documents and he did so. Mr Hollander did not deal with the matter in his reply. I am satisfied that these documents are either not new or they are insignificant.[57]Before considering whether I should entertain the present application and decide it on its inherent merits, I wish to consider the effect of the declaration made by Master Marsh and the effect of the order of Nugee J stating that the appeal was allowed.

The effect of the previous orders

[58]In his order, the Master declared, consistently with his own judgment, that the court had no jurisdiction to try “the claim herein”. As there were three claims, the contract claim, the estoppel claim and the loan agreement claim, the Master was declaring there was no jurisdiction to try any one of those three claims. When Nugee J allowed the appeal in relation to one of the claims, the loan agreement claim, he held that the court did have jurisdiction (indeed, it had exclusive jurisdiction) to try the loan agreement claim. Nugee J was not asked to hold and did not hold that the court had jurisdiction to try the contract claim or the estoppel claim.[59]Mr Hollander submitted that the effect of Nugee J’s order, allowing the appeal, was that the previous declaration was swept away in its entirety. I do not think that is right. I think it would have been better if those who were responsible for drafting and agreeing the order following the judgment of Nugee J had addressed the fact that the Master had made a declaration of no jurisdiction. If that matter had been addressed, then it is obvious how it ought to have been dealt with. The appropriate drafting was already set out in the alternative declaration claimed in the Defendants’ application notice of 10 September 2013. I doubt if it is necessary for anyone to apply to vary Nugee J’s order to include an express order which sets aside the Master’s declaration in so far as it extends to the loan agreement claim (where the court does have jurisdiction). I doubt if it is necessary because I consider that there is no real doubt as to how to read the two orders together and in harmony. If it were necessary for someone to apply (possibly under CPR Rule 3.1(7)) to revise the order made by Nugee J, then I have indicated that it is obvious what a revised order should provide.[60]Accordingly, I will proceed in this judgment on the basis that the declaration made by the Master is (and remains) a declaration that the court has no jurisdiction in relation to the contract claim and the estoppel claim.

The parties’ submissions

[61]Mr Lightman submitted that the court should not entertain what is in effect a second application for permission to serve out of the jurisdiction the pleadings in relation to the contract claim and the estoppel claim. He argued that there was an issue estoppel which prevented this application being made and/or the application was an abuse of the process of the court. He put his case in a number of ways and relied on a range of authorities in which the court has identified the correct response to an attempt to obtain a second bite at (or of) the cherry, as it is conventionally described.[62]Mr Hollander did not seriously quarrel with the suggestion that the Claimants were, in effect, making a second application for permission to serve out in relation to the contract claim and the estoppel claim. He also accepted that the court had the power, in some circumstances, to prevent a party attempting to have a second, or third, or fourth, bite at the cherry. He accepted, for example, that if I heard this application on the merits and refused to give permission to serve out, it may not be open to the Claimants to make a third or a fourth attempt to obtain that permission. However, whatever the source of the court’s power to restrain repeated applications of that kind, he submitted that the applicable legal principles did not lead to the result in this case that I should refuse to entertain this application. In particular, he submitted that this was not a case of issue estoppel nor of abuse of process.

Discussion

[63]The courts have dealt in various ways with attempts by a party to re-open or re-argue a matter which has previously been determined. I refer to the principal ways in which the courts have reacted to such attempts.(1) If there is a decision of a court which creates an issue estoppel, then a party will not be allowed to re-open that issue in another application or another claim except in special circumstances where a refusal to re-open the matter would cause injustice: Virgin Atlantic Airways Ltd v Zodiac Seats UK Ltd [2014] AC 160 at [22];(2) A second application or a second claim may be held to be an abuse of the process of the court, applying the principles in Johnson v Gore Wood & Co [2002] 2 AC 1 at page 31;(3) It has been held that “[e]ven in interlocutory matters a party cannot fight over again a battle which has already been fought unless there has been some significant change of circumstances, or the party has become aware of facts which he could not reasonably have known, or found out, in time for the first encounter”: Chanel Ltd v Woolworth & Co [1981] 1 WLR 485 at pages 492H-493A;(4) If it is necessary for a party to apply to vary or revoke an earlier order under CPR rule 3.1(7), the principles are set out in Tibbles v SIG plc [2012] 1 WLR 2591, in particular, at [39] per Rix LJ;(5) Although appeals raise different issues, even on an appeal there are considerable restrictions on the circumstances in which an appellant will be allowed to introduce new evidence.[64]As against the principles laid down in the cases referred to above, Mr Hollander drew attention to the approach in Woodhouse v Consignia plc [2002] 1 WLR 2558. In that case, the Court of Appeal allowed a party to have what was undoubtedly a second bite at the cherry. The reasoning is at [55] – [58] and [63] of the judgment of the Court of Appeal, given by Brooke LJ. He explained that in that case:(1) the evidence relied on for the second application was available at the time of the first application;(2) there was no good reason for the failure to rely on that evidence first time around;(3) there was a public interest in discouraging second applications based on material which could have been deployed first time around;(4) in some contexts, this public interest was attributable to the need to allot the court’s limited resources to other cases;(5) it was also important to protect respondents to successive applications from oppression;(6) litigation should not drag on forever and a defendant should not be oppressed by successive suits, where one would do;(7) these public interest considerations applied less strictly in relation to successive pre-trial applications than in relation to a final decision of the court, at any rate where the earlier pre-trial application had been dismissed;(8) the fact that the application is a second bite at the cherry is not always decisive;(9) there will be cases where a refusal to hear a second application, where there was a pardonable mistake, would be a disproportionate response to the circumstances.[65]In Woodhouse v Consignia plc, at [57], Brooke LJ gave an example of a case where a claimant had unsuccessfully applied for summary judgment under CPR Part 24 and then made a second application relying on material which was available first time around but which was not deployed due to incompetence. He considered that in an extreme case where that material made the case for summary judgment unanswerable it would not be right to say that just because the second application was a second bite at the cherry, the second application should be dismissed. He invoked the overriding objective of dealing with cases justly. He also indicated that a judge would be entitled to dismiss the second application summarily unless “it could be speedily and categorically demonstrated that the new material was indeed conclusive of the case”.[66]Woodhouse v Consignia plc was referred to in Laemthong International v ARTIS [2005] 1 Lloyd’s Rep. 100. That case involved a subsequent application for a freezing order where an earlier application had failed. Colman J held that in such a case the judge hearing the subsequent application would have to take a threshold decision whether the character of the second application made it appropriate that he should entertain it. That would be a discretionary exercise. Normally a factor of great, if not determinative, weight would be whether, on the subsequent application, new evidence or other matters, which were substantially material, were to be relied upon. If so, a judge might conclude that the interests of justice outweighed the public policy considerations of conservation of judicial resources in the interest of other court users. Where, however, the second application introduced nothing that was not before the court on the first occasion, then normally the discretion to hear the application would not be exercised. In such a case, the second application would be (or would normally be) an abuse of process.[67]In Thevarajah v Riordan [2014] EWCA Civ 15, [2014] 1 Costs LR 163, in the judgment of the Court of Appeal, delivered by Richards LJ, at [30], it was commented that the reasoning in Woodhouse v Consignia plc at [55] – [58] did not sit altogether comfortably with the policy of the later rule changes to CPR rule 3.9.[68]I will deal first with the submission that there is an issue estoppel in this case which prevents the Claimants from making this second application for permission to serve out. If there were an issue estoppel, the Claimants do not attempt to argue that this is case of special circumstances where a refusal to re-open the matter would cause injustice. They accept that an issue estoppel would prevent this second application being considered on its merits.[69]The Defendants’ case for an issue estoppel can be put very simply. Master Marsh declared (and his declaration in this respect is not affected by the later order of Nugee J) that the court does not have jurisdiction in relation to the contract claim and the estoppel claim. A determination by a court that it has no jurisdiction can give rise to an issue estoppel, although it will not create an issue estoppel on any other question: see R v Middlesex JJ ex parte Bond [1933] 2 KB 1, The Sennar (No. 2) [1985] 1 WLR 490, Hines v Birkbeck College (No. 2) [1992] Ch 37 and Spencer Bower and Turner, Res Judicata, 4th ed., para. 2.15. The present application invites the court to rule that it does have jurisdiction in relation to the contract claim and the estoppel claim and such a ruling would be in flat contradiction of the earlier declaration. If the Claimants were to seek to set aside the earlier declaration under, say, CPR rule 3.1(7), that rule would not allow it in this case to set aside that declaration, particularly where they were refused permission to appeal it. Even if rule 3.1(7) potentially were available the Claimants do not satisfy the requirements laid down in Tibbles v SIG plc [2012] 1 WLR 2591, in particular at [39].[70]The Claimants’ case for saying that there is no issue estoppel is more subtle. They accept that a finding that a court has no jurisdiction can give rise to an issue estoppel. They accept that The Sennar (No. 2) is a relevant example and one could think of other cases where such a finding would similarly create an issue estoppel. For the purposes of the law as to issue estoppel, one had to look behind the expression of the court’s order and to investigate what issue the court had decided. In the present case, the Master held in relation to the contract claim that it did not come within gateway 6 because the Claimants did not have the better of the argument on the existence of a contract. Further, he held in relation to the estoppel claim that there was not a serious issue to be tried on the merits. Those were the issues decided by the Master and which led to the court’s declaration as to jurisdiction. Thus, the present case was just like a claim for summary judgment where the court dismissed the application because it considered that the case ought to go to trial or like a claim for an interim injunction where the court held that the claimant could not show a serious issue to be tried and an injunction was refused on that ground. It was submitted that in both these examples, the court could entertain a second application for summary judgment, or for an interim injunction, respectively. The reasoning in Woodhouse v Consignia plc at [57] was relied on in relation to the example of an application for summary judgment and the reasoning in Laemthong International v ARTIS was relied upon in relation to the example of an application for an interim injunction.[71]I am inclined to think that the Claimants’ submissions are right on issue estoppel. However, as will be seen, it ultimately does not matter because I consider that this is a very clear case for the court to hold that the present application is an abuse of the process of the court and ought to be dismissed on that ground. I will therefore assume in the Claimants’ favour that there is no issue estoppel in this case and explain why I have concluded that this application is an abuse of the process of the court.[72]When the Defendants applied for an order setting aside the ex parte permission to serve out and for a declaration that the court had no jurisdiction to try these claims, the Claimants were well aware of the established requirements as to permission to serve out and were well aware that they would have to present the material they wished to rely upon and all the relevant points which they wished to make at the hearing by Master Marsh of the Defendants’ application.[73]In good time before the hearing of the Defendants’ application, the Claimants knew the case which they had to meet. The Claimants considered what they should do in response and they decided that the appropriate response was to rely upon the first and second witness statements of Ms Rickard and the submissions which would be made by counsel as to all of the evidence including the documentary evidence exhibited by the various witnesses. As Mr Foord explained in his third witness statement on the present application, the Claimants knew that they could adduce witness statements from Victor and Robert Tchenguiz and Mr Smalley if they wished to do so but they decided they would fight the Defendants’ application without doing so.[74]In his judgment, when considering the material which was put before him, Master Marsh referred to the evidence from Mr Clifford and to the contemporaneous material and he commented that there was no evidence from Victor and Robert Tchenguiz and Mr Smalley. That has now led the Claimants to adduce witness statements from those three witnesses. I have seen those witness statements. I do not regard them as changing the balance of the arguments to any serious extent. This is not a case where there is any substantial dispute of fact as to what was said at the meeting on 5 February 2009. The witnesses largely agree on the facts. What matters is the legal consequence of the statements made at that meeting. I consider that all of the points made by the Master continue to have whatever force they originally had, even if one takes into account what is said in the three new witness statements. Further, the witness statements do not change in any substantial way the arguments as to the alleged variations on 11 March 2009 and 15 September 2009. The difficulties in the Claimants’ way arise as a result of what the Master regarded as the inherent improbability of the case that a contract was made on 5 February 2009, particularly when he considered how matters were expressed in the contemporaneous documents.[75]I do not need to consider what I would decide if the matter had been fully argued before me but what I do decide is that the three witness statements do not substantially alter the balance of the rival arguments as they were assessed by the Master. I have also explained that the suggested new documents are either not new or are insignificant. My assessment is that if this application were to proceed, in substance, it would be a re-run of the hearing before Master Marsh, in a case where permission to appeal his decision was refused in relation to the contract claim and the estoppel claim. The fact that there are more witness statements does not change that substance.[76]It was accepted that I can be guided by the discussion as to abuse of process in Johnson v Gore Wood & Co [2002] 2 AC 1 at 31 per Lord Bingham. That discussion is in the context of new claims or new points being put forward which could have been put forward earlier. The submission that subsequent proceedings are abusive will be much stronger where the application is a second attempt to re-run an earlier unsuccessful application without anything, or without very much, by way of new material. If I focus on the public and private interests involved and attempt to reach a broad merits-based judgment, it is clear to me that the present application is an abuse of process. The Claimants have had their day in court. The court has considered their application for permission to appeal. They should not be allowed to have a second go with no new, or not much new, material. In so far as there is new material, and I do not think that there is, it was all available earlier when the Claimants made a conscious decision not to deploy it. There should be finality on the question of jurisdiction. The Defendants should not be vexed twice on that question. The Claimants’ approach is inefficient and is a waste of resources for no good reason.[77]I also derive assistance from the approach in Tibbles v SIG plc [2012] 1 WLR 2591, in particular, at [39]. That case concerned the way in which the court should exercise its discretion under CPR rule 3.1(7). However, much of the reasoning is applicable more widely where a party seeks to have a second bite at the cherry. In that case, it was said that attention should be paid to whether there had been a material change of circumstances and whether new material was to be deployed and, if so, whether that material was available earlier and, if so, whether the fact that the material was not used earlier was conscious or deliberate. In this case, there has not been a material change of circumstances, and there is no new material of any substance. Even if the witness statements did amount to significant new material, then that material was available earlier and the Claimants consciously and deliberately decided not to use that material.[78]The conclusion that the present application is an abuse of process is also supported by the decisions in Woodhouse v Consignia plc and Laemthong International v ARTIS which were urged on me by Mr Hollander, although it may be that today the court should be more reluctant to allow a second bite at the cherry than was the position in the first of these cases. Nonetheless, considering the various aspects of the public interest referred to in Woodhouse v Consignia plc, I conclude that they comfortably outweigh any arguments that the Claimants should be able to re-run the first application for permission to serve out, just because it has now elected to serve three further witness statements. This case is not remotely like the example given by Brooke LJ at [57]. Further, applying the approach summarised by Colman J in the second of these cases at [24] leads me to the conclusion that this application is an abuse of process and an impermissible use of the resources of the court.

Conclusion

[79]I conclude that the present application is an abuse of process. It should not have been made. It will be dismissed.

Cited in 5 later judgments