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Litigation news

In a recent case based on the failure of a party to comply with an “unless order”, the court reviewed the principles of legal professional privilege.  An unless order, as its name suggests, is an order providing that a certain act must be done by a party to proceedings by a certain date or a specified result will follow (often the entry of judgment against the defaulting party).  
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The Employment Appeal Tribunal (EAT) January 2011

The issue was whether the allocation of share options which vastly differed between the female Claimant, Hosso, and her male comparator fell under the Equal Pay Act (EqPA) or the Sex Discrimination Act (see s.6(6) SDA).
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The Court of Appeal recently determined whether a party whose assets were frozen pursuant to a worldwide freezing order could make payments it was obliged to make which it argued were in the ordinary course of business. The usual exception allowing payments in the ordinary course of business had been removed by the court at first instance. 
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In a recent decision, the High Court dismissed a claim for breach of contract and negligence on the ground that the defendant banks had followed the instructions given by the claimant and had not breached any duty to warn the claimant of the risks of the transactions.

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The Court of Appeal dismissed the appeal by Christopher Hutcheson in relation to the order of Mr Justice Eady which rejected his application for a “privacy” injunction which would prevent News Group Newspapers from publishing details of his “secret” second family.
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Between June 1997 and February 1999, Mr and Mrs Holland ran a company called Paycheck Services Limited (“Paycheck”) whose function, in return for a fee, was to administer the business and tax affairs of IT and other contractors who did not want to go to the trouble of setting up and running their own companies. Initially each contractor who joined the scheme became an employee and was entitled to dividends and a salary. When it became apparent that the income of Paycheck was likely to exceed the limit for the small companies’ rate of corporations tax of £300,000, the Hollands engaged a number of professional advisers to set about devising a new structure which would enable them to expand their business without attracting a higher rate of corporation tax.
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The Court of Appeal has re-examined the relevant standard of dishonesty in a case where the director of a company knowingly assisted that company act in breach of trust. The Court of Appeal held that the correct standard to be applied was the ordinary standard of honest behaviour, to be decided by Judge on the facts of each case.
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A company brought a claim against a former director in connection with a long running dispute following his removal as a director. Part of the claim dealt with the price which was to be established for the director’s shares.
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The High Court recently reviewed the authorities dealing with “without prejudice” discussions where the parties commence discussions in the hope of resolving a problem even though the parties had not clearly set out their position beforehand and there was no “settlement” but a series of statements and negotiations about “how to take matters forward”.
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The claimant was a customer resident in Turkey. The defendant was a bank which offered a collateralised trading programme desk for purchasing foreign exchange options and trading in currencies. The claimant refused to pay a margin call in early October 2008 and the defendant closed out his positions later that month, demanding payment of US$20,021,619.
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Summary

Mr. Justice Vos recently considered this question and ruled that the High Court could exercise its discretion and dispense with the requirement for service of a freezing order on a defendant which would have the effect of waiving the requirement for the endorsement of the penal notice.

Background

The claimants alleged that payments which were due to them under a trust ended up in the hands of the first defendant (the “defendant”).
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The High Court has recently reinforced the FSA’s right to recoup losses suffered by investors in unauthorised firms, in addition to requiring such firms to disgorge all profits.
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The High Court has decided when it would be appropriate for a minority shareholder to continue a claim against directors of a company in accordance with sections 261 and 263 Companies Act 2006.
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In two appeals heard together the court was asked to consider the interpretation and effect of CPR Part 36.
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Simon Carves Limited (“Carves”), was the main contractor for the building of a bioethanol plant in Teesside. For the construction of the plant it needed to buy pressure vessels for the plant and to have storage tanks installed on the site. There was no connection between these items (other than they were required for the plant), and accordingly the fact that the supply contract was awarded to one party did not mean that the contract for the installation would also be awarded to the same party. As it turned out Carves did contract with one party Geldof Metaalconstructie NV (“Geldof “) for both contracts.
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An IT company which specialised in providing front and back office booking systems failed to provide an inner London 4 star hotel with a product which was fit for purpose.
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Yukos Capital S.a.r.l (“Yukos”) obtained a freezing injunction against OJSC Rosneft Oil Co (“Rosneft”) and 11 other Defendants. The Sixth to Twelfth Defendants (referred to as the “RT Defendants”) sought an order discharging the injunction against them on the basis that the Claimant had no cause of action against them and because they held assets as neither the nominee nor trustee of Rosneft, the primary Defendant.
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The Court has recently provided a reminder that surveyors will be held to account for negligence, even where the purchaser claimant has arguably supplied misleading information.
The claimant purchased a flat in a residential block as a buy-to-let investment. The claimant stated in his application for finance that the purchase price/estimated value of the flat was £353,000, and applied for finance of 80% of that sum.
The defendant surveyor (who worked for Colley’s, then part of Halifax plc) provided the lender with a valuation report assessing the market value of the flat as being the price he thought the claimant was going to pay for it (£353,000) and estimated the expected rental at £2,000 per month.
The purchase price, although technically £353,000, was subject to a ‘gifted deposit’ from the vendor to the claimant, which returned to the claimant 15% of the purchase price initially and a further 10% deferred for a year.
After completion the claimant was only able to achieve a rental of around half that estimated by Colley’s, and brought proceedings claiming that the flat was worth only £250,000 at the time it was purchased (although the claimant subsequently sold it for £270,000). The claimant alleged that the valuation report negligently overstated both the value of the flat and the expected rental returns.
Despite Colley’s contentions to the contrary, the Court held that:

 

1. Colley’s did owe a duty of care to the claimant, and that the duty had not been excluded by a disclaimer in the mortgage application form;
2. the claimant was not precluded from bringing his claim as a result of the representations as to the price of the flat made to the mortgage lender;
3. the claimant did in fact rely upon the valuation (both of the purchase value and the rental value); and
4. the valuation was sufficiently above the allowable margin for error that it was negligently made.

The Court reserved the issues of quantum and contributory negligence to a further hearing if the parties could not come to an agreement between themselves.
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The most recent judgment given in connection with divorce proceedings which commenced in December 2008 and which were quickly followed by injunctive proceedings brought a husband against the wife’s brothers and companies after they obtained documents and information from the husband’s computers addresses the ramifications for the wife who received the documents.
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The defendant was a licensed conveyancing firm which had acted for the Claimant in a property transaction. Joyce had purchased a property that had been advertised for sale with a buyer’s option to purchase some additional land to the rear of the property if the vendor of the property was unable to obtain planning permission for the construction of a dwelling house on the additional land.
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The Court of Appeal has ruled that “without prejudice” communications should not be admissible as evidence at a trial as evidence of the interpretation of a term in a settlement agreement. They indicated that when balancing the conflicting principles of without prejudice communications remaining inadmissible and ensuring the best and most useful evidence is before the court, it is preferable to preserve the privilege attached to without prejudice communications in order to encourage parties to have confidence in their ability to freely negotiate settlements.
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The claimant was a property company (Starglade) which claimed that the first defendant (N) was liable for dishonestly assisting in a breach of trust and sought, on the basis of knowing receipt, payment of money Nash had paid himself. Starglade had sold land to a development company (L). Nash was the managing director of L. Proceedings were later commenced by L against a third party and L sought from Starglade, for use in the proceedings, the assignment of a report previously obtained by Starglade. The third defendant (Mr Twining) was a partner at the second defendant law firm which advised L.
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The claimant bank made a successful application to release the restrictions on the disclosure of information in the first defendant’s (“Mr Ablyazov”) affidavit and exhibit, which had been provided pursuant to a freezing order.
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The Applicants (a mother and young child) applied to the Court for an order requiring the Respondent to disclose the IP address of a registered user of the Wikipedia website (a “Norwich Pharmacal” order). The user in question had made an amendment to an article available on Wikipedia.
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