“The extent of relief in respect of Crown II and Crown III 667. …Crown II and Crown III....were set up for different portfolios in Crown. On30 April 2015 , Astra LLP told Musst that what was called Crown II had been set up for a new strategy, "and therefore it is not covered by the existing Introduction Agreement [the Octave Contract] ". The management of this account was subsequently transferred to Astra UK at the time of the transfer of Astra LLP's business to it. On5 December 2019 , Payne Hicks Beach reiterated that the Crown II account followed a different strategy. 668. On disclosure in relation to the Defamation Claim, Astra, on18 September 2020 , disclosed for the first time an internal email (from Mr Adler (of Astra) to Crown) dated3 February 2016 in which he said, talking of the Crown I and the Crown II accounts and two other entities: "As you know, all our credit vehicles have pursued a very similar if not identical strategy so far; forward ASCIL (another entity) will invest in slightly more liquid credit assets to reflect its changed liquidity profile." 669. Musst say that it was agreed between the parties that any questions in relation to non-payment in relation to Crown II could not be conveniently dealt with in these proceedings (i.e. because of the need for disclosure and expert evidence) but would have to be dealt with in subsequent proceedings, if need be. It is not apparent whether that means in this action or in another action. There was not an express plea as regards non-payment in relation to Crown II and Crown III. An application to amend this action so as to include reference to Crown II and Crown III was withdrawn by consent. There was a holding claim form issued on29 April 2021 in which Musst sought to claim for the fees in respect of Crown II and Crown III. 670. In the meantime, Musst submits that an order should be made in these proceedings allowing Musst to inspect the books and records in relation to Crown II and/or Crown III if it otherwise proves its case on liability, without having first to show that Crown II and Crown III consisted of "Eligible Investments" . It relies on para. 105(1) and 105(2) of RAMPOC seeking production of statements "in relation to all payments made to it … since May 2016 by 2B, Crown and any other entity introduced by the Claimant …." and see also paras. 105(3) and 105(4) and 113 (which claims the same relief against Astra LLP if there was no novation to Astra UK). This is said to arise also out of the wide requirements of clause 13, which provides an obligation to keep books and records, and to allow inspection, in relation to "its activities relating to this Agreement, including but not limited to recording any Eligible Investments" . It also relies on the last words of clause 3.1 referring to " additional investments made for the Current Strategy (emphasis added) directly or indirectly by an Investor into a Fund whether before or after the Cut-off Date are also Eligible Investments." It submits that there is an argument that the investments in Crown II and Crown III are additional investments, and that is therefore sufficient to open the door to disclosure relating to Crown II and Crown III. 671. Since this part of the judgment had been prepared in draft, the Court has been provided with the evidence in support of an application to strike out the 2021 action claiming management and performance fees in respect of Crown II and Crown III. It comprised a 40-page witness statement of Lucas Julian Moore dated29 September 2021 . This was forwarded to the Court on13 October 2021 by solicitors for Musst with relatively short letters summarising its position. It is not necessary or reasonably possible at this stage to consider that in any detail. One feature of the witness statement is that Astra disagree with the submission of Musst that there was agreement that a claim in respect of Crown II and Crown III might be made in a second action. The submission is that Musst could and should have brought any claim relating to Crown II and Crown III, if at all, in this action. It is submitted by Astra that a fuller analysis of the documents between the parties shows that Musst was not misled as to the strategy adopted in respect of Crown II and Crown III, and there is nothing in the suggestion that there was a recent discovery that the position was not as previously represented. It is also submitted on behalf of Astra that the claim in respect of Crown II and Crown III ought to be struck out on a whole variety of grounds, including abuse of process and no reasonable prospect of success. Astra also say, in any event, that the reference to "other entity" in RAMPOC is not sufficient to open the door to a disclosure in respect of Crown II and Crown III if the claims in respect of those entities are not being dealt with in this action. 672. This recent development has the effect that it is premature at this stage for the Court to make findings as to whether there ought to be disclosure in this action about Crown II and Crown III. The different understandings of the parties regarding the consequences of the abandonment of the amendment application in respect of Crown II and Crown III require further consideration. Musst may wish to consider which way to turn in respect of any claim in respect of Crown II and Crown III, and in that context, Astra will wish to submit that whichever way Musst turns, it will be to no avail. 673. In these circumstances, this judgment will not, at this stage, make any determination relating to how any claim in respect of Crown II and Crown III will be dealt with or about how disclosure might take part in respect of the same. It is premature in the face of the matters considered above, not least the voluminous evidence in support of the strike out application, for this Court to make any determination at this stage. Further consideration of these matters will be a part of the consequential matters to be considered.”
“I just put down, I think, this marker that, if at the end of the day the claimants succeed at trial, they then get their order for an account and one finds there are other introductions on which they are entitled to payment, or indeed there may then be separate issues in relation to these parties as to whether they are within the contract or not. That may well have implications as to costs and, if additional costs are then incurred because the defendants have done what, at this stage, I have decided they are entitled to do, namely, not to give disclosure of those matters, they may have an unpleasant consequences as to costs from their point of view. But that’s all a long way down the line, and may not occur. So that’s my decision on that.”
“21. Second, given the proximity of trial, our client is not, at this late stage, in a position to advance a claim in these proceedings that the investments in Crown II (and Crown III) were or are in fact Eligible Investments. This is because of your clients’ conduct, as we have said above, in misleading our client about the nature of the investment strategy for Crown II (i) back in April 2015; (ii) again through your firm in December 2019; and (iii) in refusing to disclose any relevant documents relating to it and to Crown III in the Contract Claim, despite our client’s repeated requests (and the Order of Chief Master March dated2 March 2020 ), until the quite separate disclosure of Mr Adler’s February 2016 email in the Defamation Claim (on18 September 2020 ). …” 22. [Following the discovery of the Adler email we raised the issue with you on 13.10.20.] “However, by then, it was not realistically possible to conduct the trial within the existing timetable or within the existing cost estimates if issues relating to Crown II were to be added to it. …” 23. [If (Musst) succeeds in proving its claim and obtaining an order that it is entitled to inspect the books and records on Crown 2 and 3 under the existing claim, then Musst will be entitled to seek an order, if appropriate, for payment on these accounts to the extent they follow the current strategy.] 24. However, and for the avoidance of doubt, we also put your clients on notice that our client reserves the right, following trial in these proceedings, to bring a fresh claim against Astra LLP and Astra UK even if for some reason, it is not granted the right to inspect the books and records of Crown II and Crown III (or indeed any other Crown account except Crown I). This claim, in broad outline, would be on the footing that: i. The Octave Contract was novated to Astra LLP, or to Astra LLP and then to Astra UK; or at least to Astra LLP and Astra UK took over the benefit of our client’s introductions to Crown even if there was no novation; ii. The Crown II and Crown III accounts did in fact follow the Current Strategy (so that our clients are entitled anyway to payment of fees on the same), as can be reasonably inferred from Mr Adler’s email; and iii. Your clients negligently misled our client into believing otherwise on Crown II; and both on Crown II and Crown III they deliberately concealed the true position, in breach of the duty of good faith in cluse 6.1 of the Octave Contract, or (on the unjust enrichment claim) of the duty at common law where one person reasonably depends upon another for information. In consequence, our client did not, as it would otherwise have done, pursue your clients for the payment in these proceedings on Crown II and Crown III (or any other Crown account save Crown I) to which it was in fact entitled.” (This was the first time that Musst mentioned the possibility of separate proceedings). i. The Octave Contract was novated to Astra LLP, or to Astra LLP and then to Astra UK; or at least to Astra LLP and Astra UK took over the benefit of our client’s introductions to Crown even if there was no novation; ii. The Crown II and Crown III accounts did in fact follow the Current Strategy (so that our clients are entitled anyway to payment of fees on the same), as can be reasonably inferred from Mr Adler’s email; and iii. Your clients negligently misled our client into believing otherwise on Crown II; and both on Crown II and Crown III they deliberately concealed the true position, in breach of the duty of good faith in cluse 6.1 of the Octave Contract, or (on the unjust enrichment claim) of the duty at common law where one person reasonably depends upon another for information. In consequence, our client did not, as it would otherwise have done, pursue your clients for the payment in these proceedings on Crown II and Crown III (or any other Crown account save Crown I) to which it was in fact entitled.”
“7. Our client’s Disclosure Certificate served in October 2019 followed this approach. Your client did not seek to appeal the Deputy Master’s decision, or seek an order requiring us to conduct a wider search. As made clear to you in our third letter of5 December 2019 , your client would need to amend its pleading in the event that it wished to bring any claim in relation to Crown II (or Crown III). You did not respond to that letter. 8. Your client also sought to advance a formulation of the expert evidence order that extended beyond [Crown 1 and 2B], but CM Marsh denied this, so the scope of extended disclosure is limited by reference to the 2B and Crown 1 contracts. 9. Contrary to paragraph 12 of your letter, our clients accepted (as set out in paragraphs 8 and 9(i) of the Eighth Witness statement of Lucas Julian Moore) that the wording of the Specific Disclosure Order in principle extended to “the managed accounts of (i) 2B and/or Crown (i.e. it was not restricted to the 2B Contract and Crown Contract). However, as set out in our clients’ disclosure Certificate dated14 May 2020 , no documents recovered by our clients’ searches were disclosable by reference to the categories set out.”
“11. In the context of compromising your client’s further specific disclosure application, the parties agreed that no disclosure would be provided in relation to Crown II and III and that the issue of Crown II and III and any other investors would be addressed following the April 2021 trial if necessary.”
“17. Furthermore, your proposed amendments gain nothing from Dr Adler’s email, from which your client seeks to draw serious and unsubstantiated inferences as the purported basis for justifying your client’s attempted volte face. Not only was this document disclosed in September 2020 and known in the context of the parties’ agreement as set out in paragraph 8 above, but the allegation of concealment improperly made in your letter falls flat given the contrary assertion by reference to it in the pleading that “reasonable grounds” for an order of inspection are justified. 18. It should be obvious to you that the over-arching investment objective and strategy in relation to each of the accounts / funds referred to within Dr Adler’s e-mail, including Crown I, Crown II, 2B and ASCIL, as set out in the applicable TAAs, IMA and prospectus, is broad, permissive and substantially similar from an investor perspective. Accordingly, there was and is ample remit for the implementation by our clients of multiple specific investment strategies from vehicle to vehicle. 19. It should also come as no surprise to you that the specific investment strategies implemented by our clients were refined and would change over time, such that the contributions made pursuant to the 2B Contract/Second 2B Contract and Crown Contract/Second Crown Contract would in any event have ceased to be for the Current Strategy by31 December 2014 or31 December 2015 at the latest. From the outset, this was and was known to be a time-limited opportunity. For example, on21 May 2012 in an e-mail to Sunil Chandaria, Saleem Siddiqi expressed surprise at the realisation of the limits of the opportunity when he wrote: “when you told us that his [Anish] capacity/IRR are far less than what is being stipulated, it came as a bit of a rude surprise to me given that we have been out there saying something else.”
“Your apparent misunderstanding in relation to Dr Adler’s email was also fully addressed in our letter dated 27 November and your unjustified attempt to utilise a single email as the basis to justify a late and unjustified volte face and wide-ranging amendment to your client’s pleaded case is transparent.”
“In circumstances in which it is common ground that a further hearing beyond the trial would be required in any event to address matters arising in respect of Crown II and/or III, we fail to understand why an amendment to the scope of the relief sought by your client is required at this point. The question of relief would surely be better addressed at any such hearing and in the light of the Court’s findings at trial.”
“With reference to the final paragraph of your letter [of 30.3.21], the parties have of course agreed that a further hearing beyond the trial will be required to address matters arising in respect of what you have labelled the Crown II and/or Crown III accounts. However, as you are aware, our position and our client’s pleaded case have, since the outset of these proceedings, included a claim for books and records in relation to, inter alia, Crown II and Crown III. That has not changed and the case will be pursued at trial on that basis without prejudice to what further steps our client may take in relation to those managed accounts subsequent to trial.”
“By the time this email was disclosed (approximately one year after Extended Disclosure in the Contract Claim), these proceedings were already at an advanced stage. It was agreed between the parties that any questions in relation to non-payment in relation to Crown II could not be conveniently dealt with in these proceedings (i.e. because of the need for disclosure and expert evidence), but would have to be dealt with in subsequent proceedings, which anyway may well be necessary if Musst succeeds in its claim in these proceedings to ascertain precisely what is due to it regarding the totality of its client introductions in the light of Astra’s books and records. Accordingly, Musst did not seek to amend its claim in these proceedings to claim a breach of contract by reason of non-payment in relation to Crown II, but has left that issue over (with agreement from Astra) to any subsequent proceedings.”
“(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.”
“Cause of action estoppel extends also to points which might have been but were not raised and decided in the earlier proceedings for the purpose of establishing or negativing the existence of a cause of action.” ii) “Further Relief Estoppel/Merger”: Further claims based upon a successfully brought cause of action, including a claim that seeks to recover further damages. This is sometimes considered a type of Cause of Action Estoppel (see Phipson on Evidence 20th Ed. para. 43-15) but can also be described by the doctrine of Merger which treats a cause of action as extinguished once judgment has been given (Lord Sumption’s second and third principles). Rather than preventing a previous claim being contradicted, this doctrine prevents parties from reasserting and extending their previous claims: see Republic of India and Another Appellants v India Steamship Co. Ltd. (sub nom The Indian Grace)[1993] AC 410 at 420-421, where it was held that in claims for breach of contract, damages were not essential to a claim. The critical questions, in a claim for breach of contract, are whether the alleged breaches of contract are the same, or if different breaches are alleged, whether the new claim relies upon the same factual basis. iii) “Issue Estoppel”: Claims that are founded on an issue decided in earlier proceedings even though in respect of a different cause of action (Lord Sumption’s fourth principle). Lord Sumption stated: At para. 17:“Fourth, there is the principle that even where the cause of action is not the same in the later action as it was in the earlier one, some issue which is necessarily common to both was decided on the earlier occasion and is binding the parties: Duchess of Kingston’s Case (1776) 20 State TR. 355. Issue estoppel was the expression devised to describe this principle by Higgins J in Hoysted v. Federal Commissioner of Taxation(1921) 29 CLR 54 , 561 and adopted by Diplock LJ in Thoday v. Thoday [1964] 181, 197-198.”
“(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.”
“The relevant difference between the two was that in the case of cause of action estoppel it was in principle possible to challenge the previous decision as to the existence or non-existence of the cause of action by taking a new point which could not reasonably have been taken on the earlier occasion; whereas in the case of issue estoppel it was in principle possible to challenge the previous decision on the relevant issue not just by taking a new point which could not reasonably have been taken on the earlier occasion but to reargue in materially altered circumstances an old point which had previously been rejected. He [Lord Keith] formulated the latter exception [in Arnold v National Westminster Bank above] at p 109 as follows: “In my opinion your Lordships should affirm it to be the law that there may be an exception to issue estoppel in the special circumstance that there has become available to a party further material relevant to the correct determination of a point involved in the earlier proceedings, whether or not that point was specifically raised and decided, being material which could not by reasonable diligence have been adduced in those proceedings. One of the purposes of estoppel being to work justice between the parties, it is open to courts to recognise that in special circumstances inflexible application of it may have the opposite result.” iv) “The rule in Henderson and Henderson”: Circumstances as first formulated in Henderson v Henderson (1843) 3 Hare 100, which prevent a party from raising in subsequent proceedings matters which were not, but could and should have been, raised in the earlier ones (Lord Sumption’s fifth principle). In Henderson, Wigram V-C said, at 114–116 (quoted by Lord Sumption at para.18): “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.” v) “Abuse of process”: A general procedural rule against abusive proceedings (Lord Sumption’s sixth principle). The leading case is Johnson v Gore Wood[2002] 2 AC 1 , but a helpful summary of the principles was given by Clarke LJ in Dexter v Vlieland-Boddy[2003] EWCA Civ 14 at paras. 49-53: “49. The principles to be derived from the authorities, of which by far the most important is Johnson v Gore Wood & Co[2002] 2 AC 1 , can be summarised as follows: i) Where A has brought an action against B, a later action against B or C may be struck out where the second action is an abuse of process. ii) A later action against B is much more likely to be held to be an abuse of process than a later action against C. iii) The burden of establishing abuse of process is on B or C or as the case may be. iv) It is wrong to hold that because a matter could have been raised in earlier proceedings it should have been, so as to render the raising of it in later proceedings necessarily abusive. v) The question in every case is whether, applying a broad merits based approach, A's conduct is in all the circumstances an abuse of process. vi) The court will rarely find that the later action is an abuse of process unless the later action involves unjust harassment or oppression of B or C.”
“A claimant who keeps a second claim against the same defendant up his sleeve while prosecuting the first is at high risk of being held to have abused the court’s process. Moreover, putting his cards on the table does not simply mean warning the defendant that another action is or may be in the pipeline. It means making it possible for the court to manage the issues so as to be fair to both sides”
“If there is a view among commercial practitioners that the Aldi guidelines are subject to exceptions or optional, I would remind them that (following this decision) there will be at least five decisions of this Court when this Court has been asked to strike out proceedings because the Aldi guidelines have not been followed. Those who do not observe the practice cannot hereafter complain that they thought that it was a practice to which there were exceptions. The fact that the Aldi guidelines have not been translated into a rule of procedure in the CPR or been made the subject of a Practice Direction does not matter.”
“But Henderson v Henderson abuse of process, as now understood, although separate and distinct from cause of action estoppel and issue estoppel, has much in common with them. The underlying public interest is the same: that there should be finality in litigation and that a party should not be twice vexed in the same matter. This public interest is reinforced by the current emphasis on efficiency and economy in the conduct of litigation, in the interests of the parties and the public as a whole. The bringing of a claim or the raising of a defence in later proceedings may, without more, amount to abuse if the court is satisfied (the onus being on the party alleging abuse) that the claim or defence should have been raised in the earlier proceedings if it was to be raised at all. I would not accept that it is necessary, before abuse may be found, to identify any additional element such as a collateral attack on a previous decision or some dishonesty, but where those elements are present the later proceedings will be much more obviously abusive, and there will rarely be a finding of abuse unless the later proceeding involves what the court regards as unjust harassment of a party. It is, however, wrong to hold that because a matter could have been raised in earlier proceedings it should have been, so as to render the raising of it in later proceedings necessarily abusive. That is to adopt too dogmatic an approach to what should in my opinion be a broad, merits-based judgment This “broad, merits based” approach does not refer to the substantive merits but to the merits relevant to the question whether the claimant should have brought their claim as part of the earlier proceedings (see Stuart v Goldberg Linde[2008] EWCA Civ 2 ). 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. As one cannot comprehensively list all possible forms of abuse, so one cannot formulate any hard and fast rule to determine whether, on given facts, abuse is to be found or not. Thus while I would accept that lack of funds would not ordinarily excuse a failure to raise in earlier proceedings an issue which could and should have been raised then, I would not regard it as necessarily irrelevant, particularly if it appears that the lack of funds has been caused by the party against whom it is sought to claim. While the result may often be the same, it is in my view preferable to ask whether in all the circumstances a party's conduct is an abuse than to ask whether the conduct is an abuse and then, if it is, to ask whether the abuse is excused or justified by special circumstances. Properly applied, and whatever the legitimacy of its descent, the rule has in my view a valuable part to play in protecting the interests of justice.” [Emphasis in underlining added.]
“11.1 Octave shall keep full, accurate and up to date books, accounts and records of its activities relating to this Agreement, including but not limited torecording any Eligible Investments (and the ongoing value of the same) and thepayments due to the Introducer (the Records). 11.2 Octave shall maintain the records for a period of 5 years after any termination of this Agreement. 11.3 The Introducer shall be entitled on reasonable notice to attend premises where the Records are located (and Octave shall allow and/or procure access to the same) and to access the Records and to take copies of the same in orderto ensure that the correct amounts been [sic] paid to it under this Agreement.” [Emphasis in underlining added.]