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England and Wales High Court (Chancery Division) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> Crown Dilmun & Anor v Sutton & Anor [2004] EWHC 821 (Ch) (01 April 2004)
URL: http://www.bailii.org/ew/cases/EWHC/Ch/2004/821.html
Cite as: [2004] EWHC 821 (Ch)
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Royal Courts of Justice The Strand London WC2A 2LL |
||
B e f o r e :
____________________
| (1) CROWN DILMUN | ||
| (2) DILMUN INVESTMENTS LIMITED | ||
| Claimants | ||
| -v- | ||
| (1) NICHOLAS SUTTON | ||
| (2) FULHAM RIVER PROJECTS LIMITED | ||
| Defendants |
____________________
Smith Bernal WordWave Limited
190 Fleet Street, London EC4A 2AG
Tel: 020 7404 1400 Fax: 020 7404 1424
(Official Shorthand Writers to the Court)
MR R KNOWLES QC and MR D ALEXANDER (instructed by Ferguson) appeared on behalf of the First Defendant.
MR A HOCHHAUSER QC and MR M GRIFFITHS (instructed by Howard Kennedy) appeared on behalf of the Second Defendant.
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Crown Copyright ©
- MR JUSTICE PETER SMITH: On 18th December, I handed out to the parties a draft judgment resulting from the trial, which I heard through November and December. That was released by me by e-mail to all parties' lawyers. The parties know that the normal requirement is that a draft judgment is released to the lawyers only and can only be released to the clients half an hour before judgment is delivered.
- I have always been of the view that that creates more difficulties and uncertainties and is unfair to clients, that they are required to make immediate decisions on minimal notice.
- Take this case, the judgment went to just under a hundred pages. The idea that clients can understand the implications of the judgment and give an informed decision in half an hour beggars belief.
- I therefore proposed that the judgment be released but I required undertakings, as I set out in my e-mail of 20th December, and they were a number of undertakings, all of which were freely accepted, the key one being the undertaking that its contents were not to be disclosed to any other party and no action was to be taken upon it by either party to this action until it has been formally handed down.
- In the context of this case, the defendant's position, or rather hold on the contract on the contract, the subject matter of the dispute, was entirely precarious. That was because the claimants throughout the trial resolutely refused to commit themselves as to what their attitude was as to the continuance of the contract.
- I have had a number of potential difficulties. Thus, for example, the claimants were seeking not to abandon an assertion that the entirety of the profits under the contract belonged to them but that the defendants were still required to incur expense in achieving the profits for them.
- The claimants strongly resisted, for example, any suggestion of any allowances being given to any of the investors, Mr Sutton and FRP, because of their contamination in the breach of duty, and people like Mr Steinberg, who had had a substantial commitment under the contract and had not had any part in the breach of duty, nevertheless Crown Dilmun were still resisting any question that he should be recompensed for his time and his commitment.
- The background therefore has led to an exchange of correspondence which was revealed to me when the judgment was handed down and which was revealed to Crown Dilmun shortly before that judgment was handed down on 24th January. The correspondence starts in April last year. Some of that correspondence will have already been provided to Crown Dilmun during the course of the trial. The correspondence is between Mr Sutton and Mr Cook who represented Harrods Estates over the contract. If will be recalled that the contract requires Harrods to log an application for planning permission by 30th September of this year. It was fast approaching and Fulham appeared not to be enthusiastic for the contract because they appeared to be going back to the football ground for three seasons which could be said to be somewhat inconsistent with their obligations under the contract.
- Ultimately however, there was a meeting between Mr Cook and Mr Sutton on 8th January, and a discussion took place at that stage about terminating the contract and repayment of the deposit with a possible rescheduling of the deposit but no reduction of the interest rate.
- On 19th January, a letter was sent by Mr Sutton to Mr Cook. This letter, I am told, was drafted by Simon Berry QC on the instructions of Howard Kennedy, FRP's solicitors, and, as I read the witness statements of Mr Steinberg and Mr Sutton, Mr Sutton had no independent role in this and merely passed on what had been drafted and provided to him by FRP as a result of the conference.
- I have no problems with the bulk of the letter. The last two sentences say this:
- That has caused me great concern because I do not accept that the defendants, given the draft judgment and given the undertaking, could properly have taken any steps to seek to terminate the contract or set in train anything which might lead to a termination of the contract without permission of the court. It is a matter of great concern because if this regime is not operated, it means that litigants generally will suffer because they will not have the advantage of seeing the judgment before half an hour before it is handed down.
- I have read the witness statements of Mr Steinberg and that of Mr Sutton; I accept what they both say in those witness statements as amplified by the submissions today.
- I do not accept that it is correct that these matters could have been progressed without reference to the application to the court because of the undertaking but it does not appear to me that either Mr Steinberg or Mr Sutton did anything other than do something on advice from Mr Berry. Mr Berry quite properly was not told of the judgment and the undertaking. His instructing solicitors, who are FRP solicitors, were aware of it but they formed the view, as I read Mr Steinberg's witness statement, that what they were doing was simply carrying out the continuation of the discussions and no more.
- I am not sure about that but, having heard the explanation and having considered that, together with a letter from SJ Berwin, one has to bear in mind that the litigation was resolved and SJ Berwin, who represent Crown Dilmun, do not wish the new-found quasi-friendly relationship, I suppose, to be affected by any further outstanding court matters.
- My feeling, and it is no more than instinct, is that there has been a breach of the undertaking. I am not convinced that Spectravest, 1988, FSR, 161, does not apply but however, having heard everything, and I accept that both Mr Steinberg and Mr Sutton did not do anything that they believed was a breach of the undertaking, I do not see any point in taking this any further.
- I do not propose, having heard the matters today, to refer the matter to the Attorney-General.
1st April 2004
"I must reserve our rights in this respect [that is to say in respect of the failure properly to progress the contract]. In the meantime however, you may think it worthwhile to bring our agreement to an end and I therefore look forward to receiving your proposal for its early termination."