“… I just wanted to update you on the proposed repayment of your group’s debt, interest and legal fees. I requested and now have received a print off of the total amount outstanding from the accountant of St Vincent which amounts to a figure of a little short of EUR2.1 million. In addition I have been in contact with our JV partners in Poland and a member of the board will be able to fly to London … on Monday 22nd August meet with you. This way you can speak to the cheque writer. Please also note that I have requested proof of funds as you requested and this is being arranged but I can assure you that the JV agreement has been signed and is subject to repaying your debt and your group handing back full control of the shares in HHL and at the HDP level. It is understood by us both that the charges will be left in place on the Cross Point land properties but controlled by our joint venture company and that you will leave us to deal with the courts and other creditors. We are fully aware of the pending bankruptcy and will handle all legal matters directly with the court administrator. … I have been asked, as you will appreciate, the cost of the legal fees and disbursements that you and your group have incurred and perhaps you can obtain this from your lawyers and have this at least ready for our meeting.”
“… Please advise me of the identity and any information you have about your joint venture partner. We will contact them direct to establish their bona fides, and if satisfactory, will arrange for them to meet the administrator if he is willing. I note from your email that your [sic] in touch with St Vincent, who do not reply to any of our correspondence.… Please remember that we are under no obligation to settle with you at the price you indicate. The administrator decides the amount of debt and attributable costs, and in any event his authority does not extend to the ownership of the shares… Please be advised that [PTE] acts for the Polad Group and has the full authority of all members of the Group, who have asked that as you are now in contact with me you do not correspond with them further …”
“The original Agreement by which St Vincent incurred its original indebtedness was negotiated, agreed and signed in the UK and as such the debt owed to you … is merely indirectly related to the Polish creditors situation currently undergoing bankruptcy proceedings. We are therefore free to agree commercial terms between the parties referred to above. My sole reference point is the original Agreement which outlines the debt and which also details the accrued rate of interest. I have received the figures from St Vincent’s accountant and I confirm that I have checked these. The only missing figure is the amount for the fair and reasonable legal costs incurred by yourself and in this respect please note that as I represent the equity investors I would mention that they are not prepared to pay any sum that cannot be fully substantiated or are not directly relevant to the recovery of your/your group’s aforementioned debt. ….. All that I wish to achieve is to reach a fair conclusion which includes settling your debt and in this respect please note that I will be party and present to all negotiations whether at home or in Poland. As I had mentioned before I wish to conclude this simply, subject to observing any legal requirements and of course with your full cooperation. You receive the money owed under the original Agreement and we take over everything from that point.”
“… for the avoidance of doubt, we are not obliged to treat with you. You are not in any position to demand anything whatsoever from us. … I will continue discussions with you when I know who I’m dealing with, have been able to establish their credentials, am satisfied with their ability to perform, and have discussed matters with the administrator. In the meantime I will not deal with any further correspondence.”
“… I am working on putting together a more attractive solution based on what we privately discussed yesterday that will be to our mutual benefit … I know that you do not wish to go down a protracted legal battle … and I would not recommend anyone to do so if we can reach a settlement that is financially attractive to you ”
“To clarify, the link with St Vincent was severed when we took possession of the Cyprus company, the transfer subsequently is an administrative detail… … We have rescued this project while everyone else has done nothing, we are not about to step down or cede control now.”
“Therefore the consensus … is to offer you the EUR 2.1m because it is widely understood that you /Winterbourne are owed no more as a secured creditor, plus reasonable legal fees deemed to be fair and appropriate however you have seized ownership in Cyprus in HHL or made subsequent changes to the ultimate ownership of HDP which is of no relevance in determining the fair and reasonable settlement of EUR 2.1m plus legal costs. Please see the attached basis of calculation to see how the E2.1m has been derived at. Such amount will be paid as soon as the terms are clarified and agreed including exchanging the receipt of funds for total ownership and control of HDP without any action or claims against you by the investors and creditors. The creditors will shortly be providing to the courts (via your close friend the court administrator) evidence substantiating the acceptance of the Joint Venture offer. We will also ensure, as you requested, that employment will continue for the staff currently on site. That deals with 2 of the 3 points you wished me to cover in concluding your acceptance of a cash settlement; the third point was for you to be paid EUR500,000 cash on top, this has not gone down particularly well. Although I have not been directly in contact with John Clark and Alistair McDonald [sic] I understand that inevitably there has been relevant professional fees incurred to date which I have arranged with the JV partners to be fully settled in cash.”
“[Simon Lees of St Vincent] asked whether there was a possibility of a freezing order. CSsaid that he was not convinced by this as they were probably out of time, and also because they were being kicked out of jurisdiction whether there was any point.”
“a. Its case that, in refusing to accept St Vincent’s tender of moneys to redeem the pledge and in refusing to treat with it and provide it with information it required, the Defendants repudiated the Shares Pledge; b. Its case that the Defendants produced the realisation of security by acting outside the terms of the Shares Pledge.”
“In our judgment the personal claim is misconceived. It is of course correct … that [the defendants], in advising the shareholders to support the resolution approving the agreement, owed the shareholders a duty to give such advice in good faith and not fraudulently. It is also correct that if directors convene a meeting on the basis of a fraudulent circular, a shareholder will have a right of action to recover any loss which he has been personally caused in consequence of the fraudulent circular; this might include the expense of attending the meeting.… But what he cannot do is to recover damages merely because the company in which he is interested has suffered damage. He cannot recover a sum equal to the diminution in the market value of his shares, or equal to the likely diminution in dividend, because such a “loss” is merely a reflection of the loss suffered by the company. The shareholder does not suffer any personal loss. His only “loss” is to the company, in the diminution in the value of the net assets of the company, in which has (say) a 3% shareholding. The plaintiff’s shares are merely a right of participation in the company on the terms of the articles of association. The shares themselves, his right of participation, are not directly affected by the wrongdoing. The plaintiff still holds all the shares as his own absolutely unencumbered property. The deceit practised upon the plaintiff does not affect the shares; it merely enables the defendant to rob the company. The plaintiffs in this action were never concerned to recover in the personal action. The plaintiffs were only interested in the personal action as a means of circumventing the rule in Foss v Harbottle …”
“The position is, however, different where the company suffers loss caused by the breach of a duty owed both to the company and to the shareholder. In such a case the shareholder's loss, insofar as this is measured by the diminution in value of his shareholding or the loss of dividends, merely reflects the loss suffered by the company in respect of which the company has its own cause of action. If the shareholder is allowed to recover in respect of such loss, then either there will be double recovery at the expense of the defendant or the shareholder will recover at the expense of the company and its creditors and other shareholders. Neither course can be permitted. This is a matter of principle; there is no discretion involved. Justice to the defendant requires the exclusion of one claim or the other; protection of the interests of the company's creditors requires that it is the company which is allowed to recover to the exclusion of the shareholder. These principles have been established in a number of cases, though they have not always been faithfully observed. … The plaintiff sought to distinguish Prudential v Newman by arguing that the defendant was in breach of a duty owed to him personally. But, as I pointed out, that was not the problem. The problem was that the only conduct relied upon as constituting a breach of that duty was the misappropriation of assets belonging to the old companies, so that the only loss suffered by the plaintiff consisted of the diminution in the value of his shareholding which reflected the depletion of the assets of the old companies. The old companies had their own cause of action to recover their loss, and the plaintiff's own loss would be fully remedied by the restitution to the companies of the value of the misappropriated assets. It was not alleged that the plaintiff had been induced or compelled to dispose of his shares in the companies; he still had them. If he were allowed to recover for the diminution in their value, and the companies for the depletion of their assets, there would be double recovery. Moreover, if the action were allowed to proceed and the plaintiff were to recover for the lost value of his shares, the defendant's ability to meet any judgment which the old companies or their liquidators might obtain against him would be impaired to the prejudice of their creditors. The plaintiff would have obtained by a judgment of the court the very same extraction of value from the old companies at the expense of their creditors as the defendant was alleged to have obtained by fraud.”
“49. It is clear, from the analysis and discussion in the cases to which I have referred, that the rule against reflective loss is not concerned with barring causes of action as such, but with barring recovery of certain types of loss. On that basis, there is obviously a powerful argument for concluding, as this court did in Shaker, that, whether the cause of action lies in common law or equity, and whether the remedy lies in damages or restitution, should make no difference as to the applicability of the rule against reflective loss. Furthermore, given that the foundation of the rule is the need to avoid double recovery, there is a powerful case for saying that the rule should be applied in a case where, in its absence, both the beneficiary and the company would be able to recover effectively the same damages from the defaulting trustee/director.”
“34. One situation which is not addressed is a situation in which the wrongdoer by the breach of duty owed to the shareholder is actually disabled the company from pursuing such cause of action as the company had. It seems hardly right that the wrongdoer who is in breach of contract to a shareholder can answer the shareholder by saying, “The company had a cause of action which it is true I prevented it from bringing, but that fact alone means that I the wrongdoer do not have to pay anybody.””
“63. The paradigms case in which, by reason of the wrong done to it, the company is unable, in practice, to pursue its claim against the wrongdoer is one in which the company is obliged to abandon its claim because the wrong has deprived it of the funds needed for that purpose … 66. To put the point more starkly, the effect of the judge’s decision – as he himself recognised – is that a wrongdoer who, in breach of his contract with the company and its shareholders, “steals” the whole of the company’s business, with the intention that the company should be so denuded of funds that it cannot pursue its remedy against him, and who gives effect to that intention by an application for security for costs which his own breach of contract has made it impossible for the company to provide, is entitled to defeat a claim by the shareholders on the grounds that their claim is “trumped” by the claim which his own conduct was calculated to prevent, and has in fact prevented, the company from pursuing. If that were, indeed, the law following the decision in Johnson v Gore Wood, I would not find it easy to reconcile the result with Lord Bingham’s observation, at[2002] 2 AC 1 , 36C-D, that “the court must be astute to ensure that the party who has in fact suffered loss is not arbitrarily denied fair compensation”. ”
“In my judgment it is no answer for a defendant to come to the court to say that his horse may have bolted before the gate is shut and then to put that forward as a reason for not shutting the gate … However, if the court is satisfied about those matters in favour of the claimant, there is no reason why the court should not shut the gate, however late the application, in the hope, if not the expectation, that some horses may still be in the field or, at the worst, a miniature pony ... ”
“The mere fact delay in bringing an application for a freezing injunction or that it has first been heard inter partes, does not, without more, mean there is no risk dissipation. If the court is satisfied on other evidence that there is a risk of dissipation, the court should grant the order, despite the delay, even if only limited assets are ultimately frozen by it.”
“65. ... The test of materiality of a matter not disclosed is whether it would be relevant to the exercise of the court's discretion. A fact is material if it would have influenced the judge when deciding whether to make the order or deciding upon the terms upon which it should be made. The question of materiality is a matter for the court and not the subjective judgment of the applicant or his lawyers. 66. There is a high duty on the applicant which can be summarised as follows, by reference toCPR 25.3 .5 and authorities there referred to: “(1) The duty on the applicant in such circumstances goes beyond merely identifying points of defence which might be taken against him, important though that is. (2) The applicant has to show the utmost good faith, identifying the crucial points for and against the application and not rely on general statements and the mere exhibiting of numerous documents. (3) The applicant has to investigate the nature of the claim asserted and the facts relied on before applying, and has to identify any likely defences. He has to disclose all facts which reasonably could or would be taken into account by the Court. The duty is not restricted to matters of fact but extends to matters of law. (4) The applicant also has a duty to investigate the facts and fairly to present the evidence. (5) There is a high duty to draw the Court's attention to significant factual, legal and procedural aspects of the case. (6) Full disclosure has to be linked with fair presentation. The judge has to have complete confidence in the thoroughness and the objectivity of those presenting the case for the applicant. (7) It is the undoubted duty of counsel to draw to the judge's attention weaknesses in his case and to make sure the judge understands what might be said on the other side even if the judge says he has read the papers.” 67. I take into account the comments made in Brinks Mat v Elcombe[1988] 1 WLR 1350 at paragraphs 6 and 7 of the judgment of Ralph Gibson LJ and at pages 1358C-G and 1359C-E in the judgments of the other Lords Justices in the context of the consequences which should be visited or not visited upon the applicant who fails in his duties. The authorities show that the interests of justice must be paramount and that a due sense of proportion is required in relation to the assessment of the seriousness of the breach. Moreover, caution must be observed when the non-disclosure in question depends on proof of facts which are in issue in the action and the court must not conduct a mini-trial.” “(1) The duty on the applicant in such circumstances goes beyond merely identifying points of defence which might be taken against him, important though that is. (2) The applicant has to show the utmost good faith, identifying the crucial points for and against the application and not rely on general statements and the mere exhibiting of numerous documents. (3) The applicant has to investigate the nature of the claim asserted and the facts relied on before applying, and has to identify any likely defences. He has to disclose all facts which reasonably could or would be taken into account by the Court. The duty is not restricted to matters of fact but extends to matters of law. (4) The applicant also has a duty to investigate the facts and fairly to present the evidence. (5) There is a high duty to draw the Court's attention to significant factual, legal and procedural aspects of the case. (6) Full disclosure has to be linked with fair presentation. The judge has to have complete confidence in the thoroughness and the objectivity of those presenting the case for the applicant. (7) It is the undoubted duty of counsel to draw to the judge's attention weaknesses in his case and to make sure the judge understands what might be said on the other side even if the judge says he has read the papers.”
“Mr Robinson refused to cooperate in the redemption of the share pledge because he wanted to extract sums over and above the actual sums due. That was not permissible”