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England and Wales High Court (Commercial Court) Decisions |
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You are here: BAILII >> Databases >> England and Wales High Court (Commercial Court) Decisions >> Coward v Ambrosiadou [2019] EWHC 2105 (Comm) (31 July 2019) URL: http://www.bailii.org/ew/cases/EWHC/Comm/2019/2105.html Cite as: [2019] EWHC 2105 (Comm) |
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BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Strand, London, WC2A 2LL |
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B e f o r e :
____________________
| DR MARTIN JOHN COWARD |
Claimant |
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| - and |
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| MS ELENA AMBROSIADOU |
Defendant |
____________________
Elspeth Talbot Rice QC and Bajul Shah (instructed by Harcus Sinclair LLP until 30 April 2019, and thereafter by Harcus Parker Ltd) for the Defendant/Applicant
Hearing dates: 18-19 March and 10 May 2019
____________________
Crown Copyright ©
Mr Andrew Henshaw QC:
(A) INTRODUCTION
(B) FACTUAL CONTEXT
(1) 1981 1989: the parties' marriage and discussions in Bahrain
(2) 1991 mid 1992: IKOS (UK) Limited and Paloma Partners' approach
(3) Mid to late 1992: Dr Coward and Ms Ambrosiadou move to England; the 50/50 agreement
(4) Late 1992 1994: forming IKOS Partners and managing funds for Paloma
(5) Late 1994 mid 1996: the IKOS Fund, IKOS CIF, IKOS AM and the Felix Trust
(6) Late 1996 2003: growth of the IKOS Fund
(7) 2005 early 2006: the move to Cyprus and the 40/40/20 agreement
(8) Mid-2006 early 2007: restructuring IKOS and settling the Eclectic and Hestia Trusts
(9) Mid-2007 2009: operation of the trust structures
(10) Mid-late 2009: Greek divorce proceedings and Dr Coward's resignation from IKOS
(C) THE ISSUES
(D) JURISDICTION: THE GATEWAY ISSUE
(1) The Claimant's essential case
(2) Applicable test
(3) 50/50 agreement: evidential basis
(4) 50/50 agreement: where the agreement was made
(5) 50/50 agreement: governing law and/or jurisdiction clause
(6) 50/50 agreement: enforceability
(7) 50/50 agreement: issue estoppel(a) The test(8) 40/40/20 agreement: evidential basis
(b) The issues before Asplin J
(c) Asplin J's findings
(d) Relevance to the present case
(e) Privity
(f) Conclusion on issue estoppel
(9) 40/40/20 agreement: variation or replacement of 50/50 agreement
(10) 40/40/20 agreement: governing law and jurisdiction(a) If the 40/40/20 agreement replaced the 50/50 agreement
(b) If the 40/40/20 agreement varied the 50/50 agreement
(E) FORUM
(F) STAY
(G) SERIOUS ISSUE TO BE TRIED
(1) Whether any duty could have arisen
(2) Termination
(3) Limitation
(4) Abuse of process
(A) INTRODUCTION
i) cannot satisfy the "good arguable case" test in relation to any of the gateways in CPR 11 PD 6B;
ii) cannot show that England is clearly the appropriate forum for the trial of the action; and
iii) cannot show that his claim meets the relevant threshold merits test of a serious issue to be tried.
(B) FACTUAL CONTEXT
(1) 1981 1989: the parties' marriage and discussions in Bahrain
(2) 1991 mid 1992: IKOS (UK) Limited and Paloma Partners' approach
(3) Mid to late 1992: Dr Coward and Ms Ambrosiadou move to England; the 50/50 agreement
(4) Late 1992 1994: forming IKOS Partners and managing funds for Paloma
(5) Late 1994 mid 1996: the IKOS Fund, IKOS CIF, IKOS AM and the Felix Trust
(6) Late 1996 2003: growth of the IKOS Fund
(7) 2005 early 2006: the move to Cyprus and the 40/40/20 agreement
(8) Mid-2006 early 2007: restructuring IKOS and settling the Eclectic and Hestia Trusts
i) the trust fund included the assets set out in Schedule 1 to the deed, any assets added to the trust, and any assets representing the assets in Schedule 1 or further assets added to the trust;
ii) Schedule 1 referred to tables A, B and C, which respectively included all the Kamper A shares, the Kamper B shares and the Kamper C shares;
iii) the beneficiaries (more accurately, the objects of the discretionary power of appointment) were the persons identified in Schedule 2 to the deed, including Ms Ambrosiadou as the sole beneficiary in respect of the assets in table A, Dr Coward as the sole beneficiary of the assets in table B, and their son as the sole beneficiary of the assets in table C;
iv) both Dr Coward and Ms Ambrosiadou were nominators, whose written consent was required for any change of beneficiaries (provision for which was made by clause 3);
v) the trustee had the power to pay or apply the income or capital in any manner that was in its opinion for the benefit of all or one or more of the beneficiaries; and
vi) the trust was governed by Cypriot law and subject to the exclusive jurisdiction of the Cypriot courts.
i) Cyproman should, subject to certain provisos, follow requests of the nominators (i.e. Dr Coward and Ms Ambrosiadou) regarding the management of and distributions from the trust;
ii) Ms Ambrosiadou was the ultimate beneficial owner of Anaxilea;
iii) Dr Coward was the ultimate beneficial owner of MFP;
iv) their son was the ultimate beneficial owner of Iridanos; and
v) within 10 days of the addition of any assets to the trust, Ms Ambrosiadou was to receive 40% of such benefits, Dr Coward was to receive 40%, and their son was to receive 20%.
i) Felix Holdings owned IKOS AM and IKOS CIF, which generated profits;
ii) Flavian owned Felix Holdings;
iii) Cymanco held Flavian's shares on trust for Cyproman, as trustee of the Eclectic Trust, under the Hestia Trust; and
iv) Cyproman, as trustee of the Eclectic Trust, held its rights and assets under the terms of that trust, of which Dr Coward, Ms Ambrosiadou and their son were the beneficiaries.
(9) Mid-2007 2009: operation of the trust structures
(10) Mid-late 2009: Greek divorce proceedings and Dr Coward's resignation from IKOS
(C) THE ISSUES
i) whether Dr Coward has established, to the applicable standard, a ground or 'gateway' for service of these proceedings out of the jurisdiction;
ii) if so, whether England is the appropriate forum for the resolution of the claims made; and
iii) if so, whether Dr Coward's claims raise a serious issue to be tried.
(D) JURISDICTION: THE GATEWAY ISSUE
(1) The Claimant's essential case
"The claimant may serve a claim form out of the jurisdiction with the permission of the court under rule 6.36 where
(6) A claim is made in respect of a contract where the contract
(a) was made within the jurisdiction;
(c) is governed by English law; or
(d) contains a term to the effect that the court shall have jurisdiction to determine any claim in respect of the contract."
i) the 50/50 agreement was made in England, at the meeting on 8 September 1992 in Mr Scholl's office;
ii) alternatively, the 50/50 was governed by English law because it was most closely connected with England pursuant to Article 4.1 and/or Article 4.5 of the Rome Convention of 1980 on the law applicable to contractual obligations, given effect by the Contracts (Applicable Law) Act 1990 (which still applies to contracts made before the Rome I Regulation regime incepted on 17 December 2009: see Regulation 593/2008/EC Article 28);
iii) the 40/40/20 agreement was merely a variation of the 50/50 agreement, so Dr Coward's claim remains a claim brought under a contract made in England (in 1992) and/or governed by English law pursuant to the Rome Convention;
iv) alternatively, if the 40/40/20 agreement replaced the 50/50 agreement, there was still no intention to change the applicable law or cut off access to the English courts, and so the 40/40/20 agreement:
a) was most closely connected with England and therefore governed by English law pursuant to Article 4.1 and/or Article 4.5 of the Rome Convention;
b) contained an implied choice of English governing law; and/or
c) contained an implied choice of English jurisdiction.
(2) Applicable test
i) The burden of proof is on Dr Coward to establish the necessary elements to justify service out of the jurisdiction: Canada Trust Co v Stolzenberg (No. 2) [1998] 1 WLR 547.
ii) Dr Coward must satisfy the court there is "a good arguable case" that the claim falls within one of the gateways in CPR 6B para 3.1. This means showing that Dr Coward has "a better argument on the material available" for the application of the relevant jurisdictional gateway.
iii) Dr Coward has to persuade the court that England is the appropriate forum and "to show that this is clearly so"; alternatively, to adopt the words of CPR 6.37(3), the court has to be satisfied by Dr Coward that England is the proper place in which to bring the claim: White Book vol. 1 Note 6.37.19 numbered point 1 and cases cited.
iv) Dr Coward must satisfy the court that there is a serious issue to be tried on the merits of the claim i.e. a substantial question of fact or law or both. There has to be a real, as opposed to fanciful, prospect of success on the claim.
"'Good arguable case' reflects that one side has a much better argument on the material available. It is the concept which the phrase reflects on which it is important to concentrate, i e of the court being satisfied or as satisfied as it can be having regard to the limitations which an interlocutory process imposes that factors exist which allow the court to take jurisdiction."
Lord Sumption in Brownlie noted that that analysis was approved in general terms when the case reached the House of Lords, but without full argument ([2002] 1 AC 1, 13) and was approved in two later Privy Council decisions.
"In my opinion it is a serviceable test, provided that it is correctly understood. The reference to "a much better argument on the material available" is not a reversion to the civil burden of proof which the House of Lords had rejected in Vitkovice. What is meant is
(i) that the claimant must supply a plausible evidential basis for the application of a relevant jurisdictional gateway;
(ii) that if there is an issue of fact about it, or some other reason for doubting whether it applies, the court must take a view on the material available if it can reliably do so; but
(iii) the nature of the issue and the limitations of the material available at the interlocutory stage may be such that no reliable assessment can be made, in which case there is a good arguable case for the application of the gateway if there is a plausible (albeit contested) evidential basis for it. I do not believe that anything is gained by the word "much", which suggests a superior standard of conviction that is both uncertain and unwarranted in this context." (§7, paragraph breaks interpolated)
"This is, accordingly, a case in which the fact on which jurisdiction depends is also likely to be decisive of the action itself if it proceeds. For the purpose of determining an issue about jurisdiction, the traditional test has been whether the claimant had "the better of the argument" on the facts going to jurisdiction. In Brownlie v Four Seasons Holdings Inc [2018] 1 WLR 192, para 7, this court reformulated the effect of that test as follows:
"(i) that the claimant must supply a plausible evidential basis for the application of a relevant jurisdictional gateway; (ii) that if there is an issue of fact about it, or some other reason for doubting whether it applies, the court must take a view on the material available if it can reliably do so; but (iii) the nature of the issue and the limitations of the material available at the interlocutory stage may be such that no reliable assessment can be made, in which case there is a good arguable case for the application of the gateway if there is a plausible (albeit contested) evidential basis for it."
It is common ground that the test must be satisfied on the evidence relating to the position as at the date when the proceedings were commenced." (§ 9)
i) In applying limb (i) of the Brownlie test, namely whether the claimant has supplied a plausible evidential basis for the application of a relevant jurisdictional gateway, the question is whether the claimant has discharged the burden of showing a plausible evidential basis indicating that he has the better argument (but not 'much' the better argument); this does not require proof on the balance of probabilities and is a context specific and flexible test (Kaefer §§ 71-76).
ii) Limb (ii) ("if there is an issue of fact about it, or some other reason for doubting whether it applies, the court must take a view on the material available if it can reliably do so") is:
" an instruction to the court to seek to overcome evidential difficulties and arrive at a conclusion if it "reliably" can. It recognises that jurisdiction challenges are invariably interim and will be characterised by gaps in the evidence. The Court is not compelled to perform the impossible but, as any Judge will know, not every evidential lacuna or dispute is material or cannot be overcome. Limb (ii) is an instruction to use judicial common sense and pragmatism, not least because the exercise is intended to be one conducted with " due despatch and without hearing oral evidence" . It should be borne in mind that it is routine for claimants to seek extensive disclosure (as was done on the facts of the present case) from the defendant in the expectation (and hope) that the defendant will resist, thereby opening upon the argument that the defendant has been uncooperative and is hiding relevant material for unacceptable forensic reasons and that this should be held against the defendant. Where there is a genuine dispute judges are well versed in working around the problem. For instance, it might be possible to decide an evidential dispute in favour of a defendant on an assumed basis and ask whether jurisdiction is nonetheless established. Equally, where there is a dispute between witnesses it might be possible to focus upon the documentary evidence alone and see if that provides a sufficient answer which then obviates the need to grapple with what might otherwise be intractable disputes between witnesses." (Kaefer § 78)
iii) Limb (iii) (if "the nature of the issue and the limitations of the material available at the interlocutory stage [are] such that no reliable assessment can be made" then "there is a good arguable case for the application of the gateway if there is a plausible (albeit contested) evidential basis for it") arises where the court is unable to form a decided conclusion on the evidence before it and is therefore unable to say who has the better argument (Kaefer § 79). As to this situation:
" In [WPP Holdings Italy Sarl v Benatti [2007] EWCA Civ 263] Lord Justice Toulson stated that the Court could still assume jurisdiction if there were " factors which exist which would allow the court to take jurisdiction " and in [Antonio Gramsci Shipping Corp v Recoletos Ltd [2012] EWHC 1887 (Comm)] Teare J asked whether the claimant's case had "sufficient strength" to allow the court to take jurisdiction (ibid paragraph [48]). The solution encapsulated in limb (iii) addresses this situation. To an extent it moves away from a relative test and, in its place, introduces a test combining good arguable case and plausibility of evidence. Whilst no doubt there is room for debate as to what this implies for the standard of proof it can be stated that this is a more flexible test which is not necessarily conditional upon relative merits." (Kaefer § 80)
"[i]t is rare in modern commercial litigation to encounter a claim, particularly a claim for millions of pounds, based on an agreement which is not only said to have been made purely by word of mouth but of which there is no contemporaneous documentary record of any kind" (§ 65)
"I would also associate myself with the views in paragraph [65] [of Blue], which are of particular relevance in this case, that the absence of a contemporaneous written record by those with business experience may count heavily against the existence of an oral contract, because in the twenty-first century the prevalence of emails, text messages and other forms of electronic communication is such that most agreements and discussions which are of legal significance, even if not embodied in writing, leave some form of electronic footprint." (§ 34)
It should be borne in mind, though, that the first of the alleged oral agreements in the present case is said to have been made in 1992, before emails, texts or other forms of written electronic communication, apart from fax, became prevalent.
(3) 50/50 agreement: evidential basis
"15. Subsequently, in September 1992:
15.1 The Claimant and the Defendant moved to England. Shortly before that, the Claimant had transferred all or substantially all of certain funds which he had accumulated in Bahrain into a bank account held in Jersey in the Defendant's name, in order to take advantage of her non-UK domiciled status.
15.3 The Defendant undertook, among other things, the preparation of an application to the Securities and Futures Authority ('SFA'), including a business plan for submission to the SFA
15.4 The Claimant and the Defendant sought advice from Jeremy Scholl (an accountant instructed by the Claimant and/or the Defendant) regarding, among other things, the structuring of their proposed business. On 4 September 1992, the Defendant wrote to Jeremy Scholl, stating, among other things, that "IKOS" would act as investment adviser to Paloma , and that she wanted Mr Scholl to "look into providing the most tax efficient structure for IKOS "
15.5 On or about 8 September 1992 the Claimant, the Defendant and Mr Robertson attended a meeting at Mr Scholl's offices in London. At that meeting:
15.5.1 Mr Scholl proposed that the Claimant, the Defendant and Mr Robertson structure their anticipated business as a partnership, with the Defendant and Mr Robertson participating through companies which they owned and/or controlled The Claimant would participate in the partnership as an individual as the SFA and/or its rules and/or regulations required or would have required there to be at least one partner with unlimited liability in order to permit the partnership to operate in the UK.
15.5.2 Mr Scholl's proposal provided for the net profits of the proposed partnership to be divided 80:10:10 between the company through which the Defendant would participate in the p/s, the Claimant and the company through which Mr Robertson would participate in the partnership.
15.5.3 The Claimant questioned why the proposed split of profits was not, as between himself and the Defendant, equal.
15.5.4 Mr Scholl explained that if the Claimant and the Defendant wanted to split such profits as they were entitled to equally between them, they could, but that in the first instance: (i) it would be preferable if a limited amount of assets were held by the Claimant, as he would be the only partner who would be an individual with unlimited liability rather than a company with limited liability; and (ii) it would, for tax reasons, be beneficial for the Claimant and the Defendant if most of the relevant profits were received by the Defendant, and transferred offshore, and then, later, when the Claimant and/or the Defendant and/or the business moved offshore (as they and Mr Scholl anticipated would happen), were divided equally between the Claimant and the Defendant.
15.5.5 The Claimant and the Defendant agreed that is what they would do.
16. In the premises the Claimant and the Defendant made an agreement ('the 50/50 agreement') pursuant to which they agreed to divide such profits of the profits of their anticipated fund and/or fund manager and/or investment manager business as they ultimately received or would receive equally between them.
17. It was an express term of the 50/50 agreement, alternatively an implied term, implied to give business efficacy to it, that the Defendant would, on demand, procure or ensure that (to the extent he had not already done so) the Claimant would receive or have paid to his order a sum equal to half of the total amount of any sums paid up to that date to the Claimant and Defendant or to their order which represented the net profits of the IKOS Business."
i) the agreement applied to profits expected to be received by Dr Coward or Ms Ambrosiadou even before Dr Coward or Ms Ambrosiadou actually received them, or
ii) the agreement applied only to profits actually received, with the words "or would receive" simply reflecting the point that as at the time of the agreement those profits had not yet been received.
"MR. DALE: However, the point in terms of the agreement is that the agreement envisages, at the time, that they will potentially be moving on shore [sc. offshore], so thereafter to refer to offshore as being a material change of circumstance that takes place is not, in fact, a point that is good against us at all. They have rights in England, we say, but they are going to be exercising those rights offshore later, potentially.
THE JUDGE: Later?
MR. DALE: Well, once there are -- what they are agreeing to is that they are agreeing that they are going to ultimately divide sums representing the profits that have been made, and if they are offshore then they will no doubt be distributed offshore, but if once they are demanded, if they were onshore still, they would be demanded in the jurisdiction if it came to it. However, the point is that the agreement arises because they are planning on taking the profits offshore, and they are planning on maximising the tax advantageous effects of that, but at the same time, and that is once the moneys have gone through the corporate structures, they are agreeing between themselves -- and these are personal rights between themselves, they did not affect the partnership rights or the partnership entitlements or any of that, that they agree between themselves -- that if she or he holds more than their equal share, then they have a personal right against each other for ensuring that the sums are paid to their order, which represent their equivalence of the sums representing the profits of IKOS. It is not difficult, actually, I mean we can get tied up on the language.
THE JUDGE: But is it an agreement that the 50/50 sharing will happen immediately, or only that it will happen if and when they move offshore?
MR. DALE: Well, it happens -- there are a series of rights which arise -- it is envisaged that they will be going offshore. If you imagine that they, I suppose, had split up while in England, we are not saying that Mr. Coward could not have demanded his 50% then. It is irrespective. I mean, they are currently envisaging that they are going to move offshore, but the rights are the rights for an immediate right upon demand for his sums that would represent the profits.
THE JUDGE: Because paragraph 16 seems to suggest it is an immediate sharing.
MR. DALE: Well, it is a right to call for your share of what would represent the profits of the IKOS business.
THE JUDGE: Let us take a hypothetical example. Supposing in year 1 the business makes £1 million of profit. Under this agreement, does the claimant have a right immediately to ensure that he receives half of what the defendant receives from that profit, or does he only have a right that he will receive it when they move offshore?
MR. DALE: He can ask for it -- well, what would happen, of course, is that the moneys would get paid to IKOS UK.
THE JUDGE: Let us assume that they get paid in the direction of the defendant.
MR. DALE: Then let us assume that they get into her hands.
THE JUDGE: Yes.
MR. DALE: Then he would have the right to call upon them.
THE JUDGE: Yes, immediately.
MR. DALE: Wherever he was." (Day 2 pp199-201)
"40. The first was that by adopting his proposal less assets would be exposed. Most of the profits would, in the first instance, pass through IKOS to Ms Ambrosiadou. Only a limited amount of assets would be held by the unlimited partner, Dr Coward. The second was that Dr Coward and Ms Ambrosiadou could properly benefit from Ms Ambrosiadou's non-domiciled status. She would be the initial recipient of most of the profits, and would not be taxed in the same way as Dr Coward. Those profits could then be retained offshore, or be paid to offshore companies. Then, if Dr Coward and Ms Ambrosiadou and/or IKOS moved offshore (or another way to mitigate any tax liability was found) those profits could be split equally between Dr Coward and Ms Ambrosiadou. In the meantime, Dr Coward and Ms Ambrosiadou could be paid relatively modest salaries.
41. Dr Coward and Ms Ambrosiadou orally agreed that that is what would happen, and what they would do. Indeed, it was important that Dr Coward and Ms Ambrosiadou finally agreed the position between them. This is because the deal to manage funds for Paloma was soon to be done, and profits generated.
42. Dr Coward's case is that in such circumstances there was an express oral contract between him and Ms Ambrosiadou to divide the net profits of the IKOS Business equally between them. This agreement is referred to below as the 50/50 agreement."
" in 1992 Dr Coward jointly started an investment management business with his now estranged wife ("Ms Ambrosiadou"). The nature and corporate structure of this business has changed over time but throughout the implied legal arrangements have reflected the fact that the principal or sole partners in the business were at all times Dr Coward and an entity and/or entities beneficially owned by Ms Ambrosiadou. " (§ 2)
"The Defendant's case fails to reflect the fact that at all material times IKOS was a family business, the real partnership being one between Dr Coward and Ms Ambrosiadou ("the Family Partnership"), and fails to reflect the legal consequences of that fact." (§ 4.1)
"fails to reflect the fact of the Family Partnership, and fails to reflect the legal consequences of that fact.
For the purposes of the Particulars of Claim and the Reply, Dr Coward's case as to those legal consequences is that each of Dr Coward and Ms Ambrosiadou retained the rights to the intellectual property that he or she had created." (Amended Reply §§ 6.1 and 6.2)
"the position in respect of ownership of intellectual property rights (as well as the content of the rights and duties of Dr Coward and Ms Ambrosiadou in respect of entities within the IKOS structure) being determined having regard to the Family Partnership" (Amended Reply § 24.6)
and that:
"The partnership of substance underlying the IKOS business was a partnership between Dr Coward and Ms Ambrosiadou, the Family Partnership so defined.
At all material times, all IKOS entities were controlled and beneficially owned by Dr Coward and Ms Ambrosiadou, alternatively Dr Coward, Ms Ambrosiadou and their son " (Amended Reply §§ 36.1 and 36.2)
"1. It is [Dr Coward's] case that the IKOS business was in substance since 1994 a business being carried on by Dr Coward and Ms Ambrosiadou in common with a view to profit. Dr Coward and Ms Ambrosiadou were at all times free to choose the underlying corporate and partnership structure for that business, and did so, but in substance the IKOS business was run as a family business.
[Dr Coward] will say that (as it happens) sufficient indicia are met for these to be in law a different and separate partnership referred to as the Family Partnership. It is to be remembered that partnerships are not in law themselves legal entities.
For the avoidance of doubt, for [Dr Coward] to succeed on [his] case it is not necessary for [Dr Coward] to establish that the Family Partnership is or ever was a separate partnership as such, as opposed to a factual reality informing the proper analysis of duties owed by [Dr Coward] and Ms Ambrosiadou and ownership of intellectual property rights relating to the IKOS business.
2. If in law the Family Partnership is a different and separate partnership between [Dr Coward] and Ms Ambrosiadou personally:
(a) It came into existence as a result of the agreement, to be implied from conduct, that [Dr Coward] and Ms Ambrosiadou would carry on the business together in common with a view to profit. It came into existence at the latest by late 1994 when the only partners in IKOS Partners were Dr Coward and the corporate representative of Ms Ambrosiadou.
(b) One of the terms to be implied into the Family Partnership is that each of [Dr Coward] and Ms Ambrosiadou retains the intellectual property rights that he (or she) created. Alternatively it is a term to be implied that each could exploit all of the intellectual property rights created in the course of the Family Partnership. "
1994 was the year in which Mr Robertson had departed from the business.
"20. Although in fact, the funding for the business was provided by monies from Paloma, IKOS Partners was structured as a 10% (Edwin), 10% (me) and 80% (IKOS (UK) Ltd) partnership, in terms of capital provision recorded in the partnership deed. So far as Edwin was concerned, this reflected the fact that he was very much a junior partner. So far as I was concerned, the structure reflected the advice Elena and I had had from Jeremy. I had myself been in favour of forming a partnership Elena and I had discussed this in Bahrain, on the basis that we would be equal partners in the business and all monies we made would be ours jointly on a 50:50 basis. When I returned from Bahrain we had a meeting at Jeremy's office in London. It was he who proposed the structure and the split to be found in the partnership deed. I do not recall any substantial discussion of the 80:10:10 split recorded in the deed, but it was certainly not intended to reflect the split of assets between Elena and me that she and I had agreed between ourselves. Nor was it suggested that the structure could not be adjusted later to reflect that agreement. If the arrangement between Elena and me had been at arm's length, I would have expected to receive 80% of the profits of the business. As it was, Elena and I had agreed that, as husband and wife, and both intending to work in the business, we should own everything the business and its profits 50:50, even if for tax or similar reasons assets or monies were put into her name. As I recall, it was Jeremy who at the meeting suggested the particular structure we adopted for IKOS Partners for reasons of sheltering assets and tax efficiency.
21. We later, over the years, adopted additional and different structures but these were all intended to shelter assets and/or achieve tax efficiency against the background of our agreement as to 50:50 shares in everything (later 40:40:20 shares )
22. Before my return from Bahrain, I had transferred to Elena's account with Standard Chartered in Jersey all or most of the money I had accumulated offshore. This was intended to take advantage of Elena's non-UK domiciled status and to reduce our UK tax liability. I cannot recall precisely how much money this was perhaps £400,000 or £500,000.
23. From September 1992, after my return from Bahrain, I focused on writing the software to be used in our business."
i) Asplin J outlined Dr Coward's evidence as to the nature of his business relationship with Ms Ambrosiadou, drawing partly on Dr Coward's witness statement as quoted in § 86 above and partly on his oral evidence:
"74. With regard to the partnership shares, Dr Coward explained that despite his 10% share, he considered himself to be equally interested in the business with Ms Ambrosiadou on a 50:50 basis. He stated that had the parties been at arm's length he would have expected to have been entitled to at least 80% of the profits of the business but because they were husband and wife they should own everything equally, even if for tax reasons, assets or monies were put in her name. He said that they had been advised as to their relative percentage interests by Jeremy Scholl their tax advisor and accountant. Dr Coward gave two reasons for having been recorded as having a 10% share. The first was an attempt to limit liability as the only non-corporate partner and the second was tax planning based upon Ms Ambrosiadou's status as a non-UK domiciliary. He also mentioned that they had been advised that in any event, the partners could agree to pay themselves whatever they thought fit.
75. In this regard, he was referred to correspondence on his behalf between Jeremy Scholl & Co, Chartered Accountants and the Complex Personal Returns Team of the Inland Revenue dated 18 July 2006 ... He was also referred to correspondence between an international tax adviser and HM Customs and Revenue in October 2010 in which it was stated that Dr Coward held a 10% interest in the IKOS Partnership. He accepted that both letters were accurate and reflective of his 10% share in the partnership business.
80. It was Ms Ambrosiadou's evidence that she and Dr Coward agreed with Mr Robertson that he would be allowed to continue to use and further develop the back office software which he had developed whilst either he or his company was a partner in the business. Dr Coward accepted in cross examination that this may well have been correct. However, he denied that they had necessarily treated the software created by Mr Robertson as partnership property or that that would have any bearing on whether the software created by Dr Coward himself was treated in the same way. In this regard, he stated that he saw IKOS Partners as being at arm's length with people like Edwin Robertson and that its other function was in relation to Dr Coward himself and Ms Ambrosiadou. In that context, he saw it as a family partnership and stated that he and Ms Ambrosiadou did not consider that the documents and agreements which applied to others such as Edwin, applied to them."
ii) Asplin J did not accept Dr Coward's evidence that, despite the formal ownership arrangements in place, he in fact owned the business jointly with Ms Ambrosiadou:
"88. Ms Ambrosiadou's evidence was that by this time, IKOS AM was the lead company in the IKOS hierarchy, that she discussed the business plans and structures with Dr Coward frequently. It was Dr Coward's evidence that he considered himself to have an interest in IKOS AM and that the arrangements were convenient for tax purposes, but did not reflect the real state of affairs. He accepted that he had enjoyed the benefit of that structure through Ms Ambrosiadou because she had been the one receiving the money but he had enjoyed it indirectly through her. He also stated that he treated everything as jointly owned partly as a result of their marriage and also as a result of an agreement between them. There was no other evidence of any kind of such an agreement and I reject Dr Coward's evidence in this regard."
iii) Asplin J made adverse findings in relation to the evidence of both Dr Coward and Ms Ambrosiadou:
"38. The two principal witnesses were Dr Coward and Ms Ambrosiadou themselves. They were cross examined extensively. It was quite clear that they are both highly intelligent and astute individuals. Unfortunately, their approach to giving evidence was tainted by their obvious and deep animosity and the extremely close correlation between their business and their personal affairs.
39. Dr Coward is quite clearly a highly intelligent and articulate man. However, at times, I found his approach to giving evidence to be cavalier. Despite his involvement in the creation and development of the software at the heart of his claim, he showed a lack of attention to the detail of that claim in relation to authorship. He appeared both to have reviewed the expert evidence scantily and late in the day and to have failed to give detailed attention to the code in Annex 4 of which he claims to be the author. In cross examination he also altered his evidence in relation to the use of comment styles in the code in a way which was clearly designed to suit the moment and was unsupported in any way. I also found him to be evasive when cross examined as to his knowledge of the content of various agreements which he had signed and public documents relating to the IKOS business. In all therefore, I did not find Dr Coward to be an entirely satisfactory witness.
40. Ms Ambrosiadou is also clearly, a highly intelligent and sophisticated person who had a detailed knowledge of the facts surrounding this matter. She quite clearly found giving evidence extremely stressful and difficult. I found Ms Ambrosiadou to be extremely evasive and prone to making lengthy speeches in order to avoid answering questions which did not suit her, in what often appeared to be an attempt to obfuscate and confuse. Accordingly, I did not find her to be an entirely satisfactory witness any more than Dr Coward.
41. In the case of both Dr Coward and Ms Ambrosiadou, unless their evidence is consistent with the contemporaneous documents I prefer the oral evidence of others where it differs from their account of events."
i) The agreement Dr Coward alleged in the English IP proceedings was that he and Ms Ambrosiadou "should own everything the business and its profits 50:50, even if for tax or similar reasons assets or monies were put into her name". By contrast, the agreement which Dr Coward presently alleges did not result in ownership of the business assets and profits, but was confined to a 50:50 share of such sums as he or Ms Ambrosiadou might actually receive (or have paid to their order) representing the profits of the business.
ii) According to Dr Coward's Response to the Defendants' Request for Further Information in the English IP proceedings, the agreement was "implied from conduct". According to his witness statement in those proceedings, it was something he and Ms Ambrosiadou "had discussed" and/or "had agreed" (my emphases), apparently in Bahrain, prior to the meeting with Mr Scholl on 8 September 1992. In the present proceedings, however, Dr Coward alleges that the agreement was made at the meeting on 8 September 1992.
iii) Although Dr Coward dealt specifically with the 8 September 1992 meeting in his evidence in the English IP proceedings, he did not suggest that any kind of 50/50 agreement was made at that meeting. It might be said that the agreement Dr Coward now alleges was not relevant in the context of the English IP proceedings. Nonetheless, it is striking that an agreement to share net receipts 50/50 reached at that meeting would not have been mentioned, if only because of its potential interaction with the alleged family partnership: if Dr Coward and Ms Ambrosiadou had already made an agreement covering all business assets and profits, why would there have needed to be a further agreement made on 8 September 1992 to share net receipts?
"3. In 1992 [Dr Coward] and [Ms Ambrosiadou] jointly established a family business called IKOS Partners in London for the management of investment of funds and related activities. Before their separation they worked together in the promotion and development of the family business. The business was established with initial capital in the region of USD 500,000 provided by [Dr Coward]. In addition, [Dr Coward] designed, prepared and implemented innovative and highly efficient systems and programmes used for conducting IKOS' business.
5. During the course of 2006 the business and functions conducted by IKOS Partners, were transferred to IKOS CIF Limited in Cyprus ("IKOS CIF"). IKOS CIF is a lawfully registered and regulated Cypriot Investment Firm based in Limassol.
8. After [Dr Coward] moved to Cyprus with IKOS in March 2006, he and [Ms Ambrosiadou] entered into discussions in relation to how the profits of the business would be split between them. An agreement was eventually around the end of July/beginning of August 2006 whereby [Dr Coward] and [Ms Ambrosiadou] would share 80% of the profits of the IKOS group equally between them, ie 40% each with 20% going to their under-age son ("the Agreement").
9. The underlying premise was that as [Dr Coward] and [Ms Ambrosiadou] had co-founded and co-managed the business, [Dr Coward] and [Ms Ambrosiadou] would, as between themselves, share the profits equally with a share of 20% going to their son - 10% coming from each of them resulting in the split 40%-40%-20% respectively.
10. In order to implement the Agreement, [Dr Coward] and [Ms Ambrosiadou] agreed to set up a trust under the name the Eclectic Trust in August 2006.
20. From its inception in July/August 2006 the Agreement was put into practice and was followed consistently. On or about the dates shown in the table below, six distributions were made out of the Eclectic Trust representing a sequence of payments whereby, between September 2007 and July 2008, a total of US$345,845,000 was paid by the Hestia Trust into the Eclectic Trust out of which US$138,338,000 was distributed to each of [Dr Coward] and [Ms Ambrosiadou] and a total of US$69,169,000 was distributed to their son The sums received by the Eclectic Trust and distributed to Anaxilea, MFP and Iridanos was derived from the profits of the business of the IKOS Group and were paid into the Eclectic Trust which was the sole beneficiary of the Hestia Trust pursuant always to the provisions of the Agreement between the parties. "
i) board minutes dated 10 October 2007 signed inter alia by Ms Ambrosiadou resolving that Felix, which owned IKOS AM and IKOS CIF, pay an interim dividend of $14m (representing, Dr Coward says, IKOS profits it had received) to Flavian; a written resolution of Flavian's director of the same date for Flavian to pay an interim dividend in the same amount to Cymanco as trustee of the Hestia Trust; a resolution of Cymanco of the same date, signed by Ms Ambrosiadou to indicate her consent as nominator, to pay the same amount to Cyproman as trustee of the Eclectic Trust; and a resolution of Cyproman of the same date, signed inter alia by Ms Ambrosiadou, to distribute the same sum to Dr Coward, Ms Ambrosiadou and their son as beneficiaries in 40:40:20 proportions;
ii) payment instructions dated 22 May 2007 providing for the payment of $35m from Felix to Flavian, from Flavian to Cymanco, from Cymanco to Cyproman, from Cyproman to Kamper, and then in 40/40/20 proportions from Kamper to MFP, Anaxilea and Iridanos (i.e. the companies that, on Dr Coward's case, used their assets for Dr Coward, Ms Ambrosiadou and their son respectively);
iii) confidential documents verifying the trust distributions of just under $346m to MFP, Anaxilea and Iridanos in 40:40:20 proportions, September 2007 and July 2008, referred to in quoted paragraph 20 in § 92 above; and
iv) the letter of wishes in relation to the Eclectic Trust, which Dr Coward says is consistent with his case insofar as it provides for the benefit of any additions to the trust to be split 40:40:20 between Dr Coward, Ms Ambrosiadou and their son.
"The following actions needed to be completed by EA [Ms Ambrosiadou]
Names for 3 BVIs DONE
Directors of BVIs are Eos (EA), Melos (MJC [Dr Coward]), Iridanos ([their son]) (EA + MJC DONE unless something else is needed)
Trustee Ampizas, To appoint/discuss
Family office advisers (3 member board) AMG [Angelos Gregoriades], EA, MJC DONE
Trustee Admin services company STILL TO DO
The following actions to be completed by KPMG/IKOS Legal
1) Agreement between BVIs and Trust, for services provision plus cost sharing STILL TO DO, Legal
2) Letter of wishes for Trustee (Provided, EA MJC will review)
3) Trust Document (Settlement letter provided, EA, MJC will review)
4) EA promised a PowerPoint presentation of the Trust which is DONE please find attached
5) Set up BVIs STILL TO DO, Legal
6) Pool of assets now in Felix Holdings needs to be distributed to FO BVIs, STILL TO DO, KPMG, Legal
Your comments and feedback are welcome."
"Don't like my Trust name! I'll think of another one.
I think 40% for [the son] is too much, in fact something closer to zero would make sense. Once it's in his name that's it, and I would worry about the effect of that when he is growing up."
i) he and Ms Ambrosiadou co-founded the business, both leaving their existing jobs to do so: for example, the SFA business plan for IKOS Partners stated that Dr Coward had left Investcorp in order to establish IKOS Partners;
ii) Dr Coward's contribution was central to the business, which would not have existed without the software he devised;
iii) Dr Coward provided approximately £400-500,000 of funding to the business, and gave up an income of about £250,000 he had been earning at Investcorp in return for a salary of only £100,000 a year with IKOS in the period 1996 to 2002;
iv) the fact that Dr Coward and Ms Ambrosiadou agreed that Dr Coward would be the person accepting unlimited liability for SFA purposes is consistent with Dr Coward's case as to the nature of the parties' business relationship as co-founders; and
v) because Ms Ambrosiadou was not domiciled in the UK for tax purposes, whereas Dr Coward was, there was an opportunity for them both in relation to taking profits offshore. They were dealing with things in the most tax advantageous way for themselves.
i) Dr Coward's case is that the parties made the 50/50 agreement by agreeing to follow a suggestion made by Mr Scholl at the meeting on 8 September 1992. However, upon examination, the agreement Dr Coward alleges is markedly different from the solution Mr Scholl is said to have proposed (see §§ 75-79) and no explanation is provided for the difference. That is a factor counting against its plausibility.
ii) The account of events that Dr Coward gave in the English IP proceedings is markedly different from the case he seeks to advance in the present proceedings: see §§ 80-90 above. There, he alleged a completely different kind of collateral agreement as having governed his business relations with Ms Ambrosiadou prior to 2006. Moreover, Dr Coward dealt specifically in his evidence with the meeting in Mr Scholl's office on 8 September 1992, at which he now alleges the 50/50 agreement was made, yet made no suggestion that any kind of agreement was made at that meeting.
iii) Dr Coward's case in the Cyprus Moltke proceedings presents the 40/40/20 agreement as having been newly made in 2006, makes no suggestion that that agreement was merely a variation of an existing agreement made in or about 1992, and contains no mention of the 50/50 agreement at all, even as part of the "premise" of the 40/40/20 agreement (§§ 91-95 above).
iv) There is no contemporaneous document evidencing the making or existence of the 50/50 agreement at any time during, or after, the 14-year period (1992 to 2006) for which it is alleged to have subsisted. I do not consider that documents that might be prayed in aid as evidencing the subsequent 40/40/20 agreement can be regarded as evidencing the 50/50 agreement (see §§ 96-97 and 100-104 above).
v) There is no evidence of performance of the 50/50 agreement (see §§ 99-104 above).
vi) The inherent probabilities point against, rather than in favour of, the 50/50 agreement (§§ 104-105 above).
(4) 50/50 agreement: where the agreement was made
"There was a short period of a few weeks in Bahrain where we had intense discussions about our plans, and I gave notice to KPMG. We used this time together to build on the plan I had already made to launch the investment business I recall that we considered whether or not we should return to the United Kingdom or move to Greece ."
and:-
"I acknowledge that Mr Coward and I talked about the business that I was hoping to start whilst we were in Bahrain "
(5) 50/50 agreement: governing law and/or jurisdiction clause
"Article 4 Applicable law in the absence of choice
1. To the extent that the law applicable to the contract has not been chosen in accordance with Article 3, the contract shall be governed by the law of the country with which it is most closely connected. Nevertheless, a separable part of the contract which has a closer connection with another country may by way of exception be governed by the law of that other country.
2. Subject to the provisions of paragraph 5 of this Article, it shall be presumed that the contract is most closely connected with the country where the party who is to effect the performance which is characteristic of the contract has, at the time of conclusion of the contract, his habitual residence, or, in the case of a body corporate or unincorporate, its central administration. However, if the contract is entered into in the course of that party's trade or profession, that country shall be the country in which the principal place of business is situated or, where under the terms of the contract the performance is to be effected through a place of business other than the principal place of business, the country in which that other place of business is situated.
5. Paragraph 2 shall not apply if the characteristic performance cannot be determined, and the presumptions in paragraphs 2, 3 and 4 shall be disregarded if it appears from the circumstances as a whole that the contract is more closely connected with another country."
i) it was made in Bahrain (see above);
ii) the presumption in Article 4(2) (the habitual place of residence of the party who is to effect the performance which is characteristic of the contract when the agreement was made) operates to give the agreement a closest connection with Bahrain; and
iii) there was nothing to connect it to England specifically: it was always intended to be a global business, and its home jurisdiction had not been decided; contenders included Ireland and Greece.
(6) 50/50 agreement: enforceability
"No Action shall be brought whereby to charge the Defendant upon any special promise to answer for the debt default or miscarriages of another person unless the Agreement upon which such Action shall be brought or some Memorandum or Note thereof shall be in Writing and signed by the party to be charged therewith or some other person there unto by him lawfully authorized."
(7) 50/50 agreement: issue estoppel
" It was Dr Coward's evidence that he considered himself to have an interest in IKOS AM and that the arrangements were convenient for tax purposes, but did not reflect the real state of affairs. He accepted that he had enjoyed the benefit of that structure through Ms Ambrosiadou because she had been the one receiving the money but he had enjoyed it indirectly through her. He also stated that he treated everything as jointly owned partly as a result of their marriage and also as a result of an agreement between them. There was no other evidence of any kind of such an agreement and I reject Dr Coward's evidence in this regard."
(a) The test
"17. Res judicata is a portmanteau term which is used to describe a number of different legal principles with different juridical origins. As with other such expressions, the label tends to distract attention from the contents of the bottle. 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 on the parties: Duchess of Kingston's Case (1776) 20 St 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 537, 561 and adopted by Diplock LJ in Thoday v Thoday [1964] P 181, 197198. "
[quoting the analysis of Lord Keith in Arnold v National Westminster Bank plc [1991] 2 AC 93, 105E] "Issue estoppel may arise where a particular issue forming a necessary ingredient in a cause of action has been litigated and decided and in subsequent proceedings between the same parties involving a different cause of action to which the same issue is relevant one of the parties seeks to re-open that issue."
"Arnold is accordingly authority for the following propositions:
(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."
(b) The issues before Asplin J
"195. However, [Mr Bloch QC, counsel for Dr Coward] emphasises that the inference depends upon the particular facts and in this case, he says that the relationship between the parties was unusual and very special. He termed it "the family partnership". This term was intended to encompass a business relationship which it was submitted arose from the fact that Dr Coward and Ms Ambrosiadou were and are married, their close association in the development of the IKOS business, that they were both termed Founders, the tax efficient structure which was adopted, the ultimate beneficial entitlement through the offshore trust structure and Dr Coward's claim that he was remunerated through those offshore structures, other than directly as a partner, employee or director of the respective IKOS entities. Mr Bloch QC submits that in such circumstances, it is not necessary as a matter of business efficacy to infer that the software was a partnership asset. He submits that all that was necessary for business efficacy was a terminable licence from Dr Coward to IKOS to use the software.
196. Further, Mr Bloch QC says that even if the test is not one of necessity, on the facts, the partners of the September Partnership are not to be taken as having agreed to treat the software as a partnership asset and the matter is also informed by the December Partnership Deed which dealt expressly with partnership property. Lastly, it is said that an analysis based on fiduciary duties cannot carry the matter further, since the scope and effect of the fiduciary duties will mould themselves to the contractual position." (Coward v Phaestos § 195)
(c) Asplin J's findings
"213. It is not in dispute that the software which was created by Dr Coward, was created for the purposes of the partnership and was the bedrock of that business. The trading could not have been undertaken without it. It was the central tool by which the trading and investment operations of the business were to be carried out.
214. If one tests the proposition further by applying the criteria set out by Jacob J in Robin Ray, in my judgment, it is equally clear that it is necessary to infer that the software was partnership property. The software was the foundation of the business without which there would have been no business at all. It was consistent with this that Dr Coward accepted in cross examination that a potential purchaser of the business would have required ownership of the software and in fact, it is more likely than not that the value attributed to the business in 2007 was on that basis. Secondly, as a result of the uniqueness of the software, its positive effect upon the trading record of the business and consequent value, it was and is essential that Dr Coward and any successor in title to him be prevented from using the software in order to compete with the IKOS business and to enforce the copyright against third parties. After all, that is what this action is all about. If another business whether run by Dr Coward or a third party, were able to access the mathematical models employed, it would seriously prejudice the IKOS business, if not destroy it.
215. As I have already mentioned, in this regard, Mr Bloch relies heavily upon what he has called the family partnership in the sense that it was always appreciated, not just in the initial few months of the IKOS business but throughout its very successful development, that Dr Coward and Ms Ambrosiadou were its founders and in fact, its ultimate owners through the offshore company and trust structures. As a result it is said that the inference is that the software remained in Dr Coward's ownership and that only a licence to IKOS Partners to use it was necessary.
216. In such circumstances, it seems to me that it would never have been relevant to seek to hold the ownership of the copyright in the software back from the "family business", nor was there any indication of an intention to do so until the breakdown of the relationship between Dr Coward and Ms Ambrosiadou. There is no indication that Dr Coward ever asserted ownership during the period 1992 to 2009. As Dr Coward put it, he considered himself and the business to be one and the same.
217. It seems to me that even if one takes such a factor into consideration, it makes it all the more likely that the essential bedrock of the business, the software would be owned by it and not separately from it. As Jacob J pointed out in Ibcos this is all the more so in circumstances in which Dr Coward allowed that software to become intermingled, a matter to which I shall return below."
(d) Relevance to the present case
(e) Privity
" it seems to me that the substratum of the doctrine is that a man ought not to be allowed to litigate a second time what has already been decided between himself and the other party to the litigation. This is in the interest both of the successful party and of the public. But I cannot see that this provides any basis for a successful defendant to say that the successful defence is a bar to the plaintiff suing some third party, or for that third party to say that the successful defence prevents the plaintiff from suing him, unless there is a sufficient degree of identity between the successful defendant and the third party. I do not say that one must be the alter ego of the other: but it does seem to me that, having due regard to the subject matter of the dispute, there must be a sufficient degree of identification between the two to make it just to hold that the decision to which one was party should be binding in proceedings to which the other is party. It is in that sense that I would regard the phrase 'privity of interest'. Thus in relation to trust property I think there will normally be a sufficient privity between the trustees and their beneficiaries to make a decision that is binding on the trustees also binding on the beneficiaries, and vice versa." (p515)
That formulation was approved by Lord Bingham in Johnson v Gore Wood & Co [2002] 2 AC 1, 32.
"29. It can be seen that Sir Robert Megarry's test: "having due regard to the subject matter of the dispute, there must be a sufficient degree of identification between the two" embraces two concepts. The first is concerned with the interest which the subsequent litigant, Dr Coward, has in the subject matter of the first action. In Gleeson, Wippell was very interested, in one sense, in the subject matter of the action against Denne, as its design of shirt was impugned in that action. But that was not a sufficient interest in circumstances where there was what Sir Robert Megarry described as "a trade relationship between the two, in the course of which Denne, at Wippell's request, copied a Wippell shirt: but that is all". The second concept concerns the identity of the parties. Thus in Zeiss No 2 [1967] 1 AC 853 at pages 9112 Lord Reid suggested:
"A party against whom a previous decision was pronounced may employ a servant or engage a third party to do something which infringes the right established in the earlier litigation and so raise the whole matter again in his interest. Then, if the other party to the earlier litigation brings an action against the servant or agent, the real defendant could be said to be the employer, who alone has the real interest, and it might well be thought unjust if he could vex his opponent by relitigating the original question by means of the device of putting forward his servant."
30. In this example the new party has no interest in the previous litigation, but would be estopped because, in effect, he represents the party in the first action. That party has the identical interest in the previous action. In Gleeson, there was no identity of parties in this sense.
31. It is not necessary for the purposes of this appeal to seek to define precisely what interest in the subject matter of the previous litigation is required. The sort of interest dismissed by Sir Robert Megarry in Gleeson in his first principle is clearly inadequate. ... At one level Arrow and Resolution had the same legal interest in the revocation of the Patent, but that was a legal interest which they shared with all the world. If Resolution is to be bound, it must I think be possible to identify some more concrete consequence for its business which revocation of the Patent would have achieved. Unless that is so, although it can be said that Resolution could have joined the 2005 proceedings, there is no reason to hold that they should.
32. Drawing this together, in my judgment a court which has the task of assessing whether there is privity of interest between a new party and a party to previous proceedings needs to examine (a) the extent to which the new party had an interest in the subject matter of the previous action; (b) the extent to which the new party can be said to be, in reality, the party to the original proceedings by reason of his relationship with that party, and (c) against this background to ask whether it is just that the new party should be bound by the outcome of the previous litigation."
"Two subsidiary arguments were advanced by Mr ter Haar in the courts below and rejected by each. The first was that the rule in Henderson v Henderson 3 Hare 100 did not apply to Mr Johnson since he had not been the plaintiff in the first action against GW. In my judgment this argument was rightly rejected. A formulaic approach to application of the rule would be mistaken. WWH was the corporate embodiment of Mr Johnson. He made decisions and gave instructions on its behalf. If he had wished to include his personal claim in the company's action, or to issue proceedings in tandem with those of the company, he had power to do so. The correct approach is that formulated by Sir Robert Megarry V-C in Gleeson v J Wippell & Co Ltd [1977] 1 WLR 510 ..."
and, after quoting the passage from Gleeson quoted in § 139 above:
"On the present facts that test was clearly satisfied" (p32)
"31. It may be that SCBHK and SCBMB had a general commercial interest in the outcome of the New York proceedings but that, on its own, is insufficient to make them privies to SCB. If one asks whether they were "in reality the party to the original proceedings", the only answer can be a negative one. Unlike SCB, SCBHK was not itself present in New York and were thus, in principle, not available to be sued in New York; but, whether or not, if sued, they could have been made subject to New York's jurisdiction, the fact is that they were not sued. That was a decision made by VIP for whatever reason; it hardly lies in VIP's mouth now to assert that they were in reality parties to the original proceedings.
32. Mr Coleman made much of the fact that SCB's motion to have the New York proceedings stayed or dismissed was supported by a declaration of Mr Casson who was the manager of SCBHK and a Memorandum of Law which stated that all VIP's claims concerned SCB's or SCBHK's equity rights in IPTL and relied on the fact that VIP itself had contended that the Tanzanian court was the only court which could establish SCBHK's rights regarding IPTL and in which all parties could be heard. ...
33. I cannot accept these submissions; it was natural that Mr Casson, who had all the material knowledge relating to the loans made for the construction of the power plant in Tanzania, should be the person to deal with the proceedings brought in tort in New York; his knowledge of the history and his position as managing director of SCBHK may show that SCBHK did indeed have a general commercial interest in the litigation but that is not enough to show that SCBHK was "in reality party to the proceedings" against their parent company in tort. As the judge said, that would be a failure to recognise the distinct corporate personalities in the case and lead to a piercing of the corporate veil contrary to the limited scope ascribed to that doctrine in Prest v Prest [2013] 2 AC 415. "
i) Ms Ambrosiadou had a strong interest in the subject matter of the English IP proceedings, both because she was originally a party and because she remained directly interested by virtue of her interest in Phaestos;
ii) on the basis of Dr Coward's allegation that Ms Ambrosiadou was the directing mind and will in all material respects of inter alia Phaestos, it would be reasonable to regard Ms Ambrosiadou as in substance having been party to the English IP proceedings; and
iii) against that background, it would have been just that Ms Ambrosiadou would be bound by the outcome of the English IP proceedings, and it is just that she should be entitled to take the benefit of their outcome vis a vis Dr Coward.
(f) Conclusion on issue estoppel
(8) 40/40/20 agreement: evidential basis
i) The 50/50 agreement, if made, was an agreement for the sharing between Dr Coward and Ms Ambrosiadou of sums received, ultimately, from the IKOS business. Starting from that premise, it is plausible that Dr Coward and Ms Ambrosiadou would in 2006, after they had moved offshore, have decided to set up a new structure and to vary the sharing proportions in order to allocate a share to their son.
ii) The letter of wishes in relation to the Eclectic Trust, and the payments referred to in § 96.iii) above are capable of providing corroboration for an agreement between Dr Coward and Ms Ambrosiadou that sums taken out of the business should be shared in 40/40/20 proportions between them and their son, even though whether they in fact amount to such corroboration is hotly contested.
iii) The emails referred to in § 100 above are also capable of amounting to such corroboration, even though whether they in fact corroborate the alleged 40/40/20 agreement is again strongly disputed. For example, Ms Ambrosiadou makes the point that the emails date from well before the Eclectic Trust was set up, and some of the entities named in the emails do not figure in the structure as it finally emerged.
iv) On the basis that Dr Coward, Ms Ambrosiadou and the business were by this stage offshore, the tension between the alleged sharing agreement and the reasons for the original 80/10/10 partnership shares (limited liability and tax) would be likely to have fallen away. Such an agreement would now be consistent with, rather than potentially at odds with, the advice Mr Scholl gave in 1992.
i) there is no documentary evidence of it;
ii) the detailed ownership structure in fact put in place militates against it: Dr Coward and Ms Ambrosiadou did not have any right or entitlement to direct how the net profits should be divided;
iii) in addition, if the 40/40/20 agreement was made then there was no point in the ownership structure actually put in place: the shares in IKOS AM and IKOS CIF could simply have been transferred to or for the benefit of Dr Coward, Ms Ambrosiadou and their son in 40/40/20 proportions;
iv) the Eclectic Trust letter of wishes was not written by Dr Coward or Ms Ambrosiadou and does not mention or otherwise evidence any contract between them;
v) the payments made, on which Dr Coward relies, do not evidence such an agreement either: they simply show companies declaring dividends to their shareholders, the Hestia trust making a distribution to its beneficiary and the Eclectic trustee transferring funds to its subsidiaries;
vi) Dr Coward had at most the mere expectation of a discretionary beneficiary that the trustee would make distributions in 40/40/20 proportions; and
vii) the alleged 40/40/20 agreement is inherently improbable: the parties could not have intended, for example, that if £10,000 was paid for their son's school fees then Ms Ambrosiadou would be obliged to procure that £20,000 was paid to Dr Coward.
(9) 40/40/20 agreement: variation or replacement of 50/50 agreement
"18. clause 1 of the LOU contains a binding agreement between the parties which at the least varied the parties' pre-existing agreement to arbitrate contained in whichever of the charterparty arbitration clauses was incorporated into the bills of lading. The question whether the parties intended the LOU to replace the existing agreements in their entirety or merely to vary them in limited respects while leaving the existing agreements otherwise in force is one of construction of the LOU in its context, applying ordinary principles of construction in the light of business common sense. The context includes the pre-existing contractual position. There is no reason in principle why the terms of an LOU should not operate as a complete replacement of an existing dispute resolution clause. ...
19. I do not accept that there is any principle of construction that unless a variation is "fundamentally inconsistent" with, or "goes to the root of", an existing clause, it will be construed as having only limited effect. Rather the principle is simply one of construction looking at the matter objectively and in the light of the relevant background, what meaning would the contract convey to a reasonable person?
20. Mr Kulkarni relied also on the more recent case of Ginns v Tabor (CA, 22 November 1995, unreported). The issue there was whether a later agreement (for the sale of a barn) was intended to rescind an earlier agreement (for a payment to be made on the grant of planning permission to convert the barn). Auld LJ said:
"Whether a subsequent agreement amounts to a rescission or a variation of an earlier one depends on the intention of the parties indicated by the terms of subsequent agreement and from all the surrounding circumstances. See United Dominions Trust (Jamaica) Ltd v Shoucair [1969] 1 AC 340, PC. However, rescission will be presumed when the parties enter into a new agreement so inconsistent with the earlier one that it goes to its very root. See British & Benningtons Ltd. v N.W. Cachar Tea Co. Ltd [1923] AC 48, HL, per Lord Atkinson at 62."
21. The first sentence of this citation states the principle, that the question is one of construction of the later agreement in the present case, the LOU. The final sentence gives an example of when a later agreement may be presumed to be intended to replace the earlier agreement in its entirety, but I do not read this passage as stating a rule that unless the new agreement is fundamentally inconsistent with the earlier agreement it cannot have this effect.
22. The arbitration agreement in the LOU is perfectly capable of operating as a new and free standing agreement, containing everything that is needed in such a clause. It appears to be comprehensive, dealing as it does with the seat of the arbitration (London), the procedure to be applied (LMAA), the constitution of the tribunal (three arbitrators, appointed in the usual way), the time for the defendant to appoint its arbitrator (14 days) and the substantive law to be applied (English law, with specific reference to the Hague-Visby Rules and the Carriage of Goods by Sea Act 1992).
23. Given such a comprehensive set of provisions, there would appear to be no reason why the parties should not have intended the LOU to replace the charterparty arbitration clauses in their entirety. That is the natural meaning of the relevant provisions of the LOU. There are also compelling reasons why the parties should have intended this."
i) The only real express term of the 50/50 agreement was the agreement to share profits and to procure that those shares were given effect. That provision was replaced in the 40/40/20 agreement by a sharing arrangement in different proportions and now including a new participant in the form of Dr Coward's and Ms Ambrosiadou's son.
ii) The addition of the son as a new participant altered the nature of Dr Coward's and Ms Ambrosiadou's duties under the alleged agreement: either of them henceforth might incur duties to procure payments to the other as a result of money paid to (or at the direction of) their son, whereas previously the obligation on (say) Ms Ambrosiadou arose only where she herself had received (or directed the disposition of) money.
iii) The ownership structure of the business, and hence the corporate source of the funds representing profits to which the 40/40/20 agreement applied, was radically different by 2006, as outlined earlier. By the time of the 40/40/20 agreement, for example, there were several IKOS hedge funds in Cayman, plus IKOS AM and IKOS CIF. The new trust and corporate arrangements involving the Eclectic Trust, Kamper Ltd. and its subsidiaries had been set up and, it appears, was envisaged as the (or at least a) primary route for the extraction of funds from the business.
iv) The focus of the business was now Cyprus, and the parties had severed their links with England (which was important for tax reasons). This point has slightly lesser weight since, as Dr Coward points out, it was contemplated from the outset, i.e. September 1992, that the parties and/or the business would move offshore at some stage.
" we also wished to make provision for our son, hence the 40:40:20 agreement replacing the previous 50:50 agreement."
(10) 40/40/20 agreement: governing law and jurisdiction
(a) If the 40/40/20 agreement replaced the 50/50 agreement
"First, in Equitable Life Assurance Society v Hyman [2002] 1 AC 408, 459, Lord Steyn rightly observed that the implication of a term was "not critically dependent on proof of an actual intention of the parties" when negotiating the contract. If one approaches the question by reference to what the parties would have agreed, one is not strictly concerned with the hypothetical answer of the actual parties, but with that of notional reasonable people in the position of the parties at the time at which they were contracting.
Secondly, a term should not be implied into a detailed commercial contract merely because it appears fair or merely because one considers that the parties would have agreed it if it had been suggested to them. Those are necessary but not sufficient grounds for including a term.
However, and thirdly, it is questionable whether Lord Simon's first requirement, reasonableness and equitableness, will usually, if ever, add anything: if a term satisfies the other requirements, it is hard to think that it would not be reasonable and equitable.
Fourthly, although Lord Simon's requirements are otherwise cumulative, I would accept that business necessity and obviousness, his second and third requirements, can be alternatives in the sense that only one of them needs to be satisfied, although I suspect that in practice it would be a rare case where only one of those two requirements would be satisfied.
Fifthly, if one approaches the issue by reference to the officious bystander, it is "vital to formulate the question to be posed by [him] with the utmost care", to quote from Lewison, The Interpretation of Contracts 5th ed (2011), para 6.09.
Sixthly, necessity for business efficacy involves a value judgment. It is rightly common ground on this appeal that the test is not one of "absolute necessity", not least because the necessity is judged by reference to business efficacy. It may well be that a more helpful way of putting Lord Simon's second requirement is, as suggested by Lord Sumption in argument, that a term can only be implied if, without the term, the contract would lack commercial or practical coherence." (paragraph breaks interpolated)
"The circumstances which may be taken into account when deciding whether or not the parties have made an implied choice of law under Article 3 of the Rome Convention (whether by initial choice or subsequent change) range more widely in certain respects than the considerations ordinarily applicable to the implication of a term into a written agreement, in particular by reason to the reference in Article 3(1) to 'the circumstances of the case'. As stated in the Giuliano-Lagarde Report at p.17, the provision 'recognises the possibility that the court may, in the light of all the facts, find that the parties have made a real choice of law although this is not expressly stated in the contract', but that it 'does not permit the court to infer a choice of law that the parties might have made where they had no clear intention of making a choice'; see also the general discussion in Dicey & Morris: The Conflict of Laws (13th ed) , paras 32089 32097. " (§ 16)
i) the partnership deed was made in 1992 between an English resident (Dr Coward) and two English companies, and related to the ownership and governance of the business;
ii) the 40/40/20 agreement is said to have been made in 2006, between Dr Coward and Ms Ambrosiadou, and related to their personal rights and obligations inter se;
iii) the 40/40/20 agreement was made in Cyprus, between parties who had deliberately left England: Dr Coward was by the time of the 40/40/20 agreement living in Cyprus, with Ms Ambrosiadou living in Greece;
iv) the main operating company (IKOS CIF) by this stage was a Cypriot company and was operating from Cyprus;
v) the agreement concerned the profits generated by Cayman and Cypriot companies (IKOS AM and IKOS CIF);
vi) the profits were to be generated from investment management and sub-investment management services provided from Cayman and Cyprus to a Cayman fund; and
vii) the entity through whom those profits were expected to be channelled was the Cypriot trustee (Cyproman) of a Cypriot discretionary trust (the Eclectic Trust) whose trust instrument contained an exclusive jurisdiction clause in favour of the courts of Cyprus.
(b) If the 40/40/20 agreement varied the 50/50 agreement
i) the variation in 2006 was made in such changed circumstances and produced such a different agreement that it is appropriate to reconsider the governing law of the varied agreement afresh; and
ii) as the Guiliano-Lagarde report on the Rome Convention pointed out, it is permissible to take account of factors which supervened after the conclusion of the contract to determine the country with which the contract is most closely connected. That re-appraisal results in the law of Cyprus being the governing law for the reasons set out above.
"The first paragraph of [Article 4] provides that, in default of a choice by the parties, the contract shall be governed by the law of the country with which it has the closest connection.
In order to determine the country with which the contract is most closely connected, it is also possible to take account of factors which supervened after the conclusion of the contract" (p20, LH col, 3rd and 4th full paragraphs)
"32-036 It seems also from the speeches of Lord Reid and, especially, Lord Wilberforce, in [Whitworth Street Estates (Manchester) Ltd v James Miller and Partners Ltd [1970] A.C. 583], and from the speech of Lord Wilberforce in Amin Rasheed Shipping Corp v Kuwait Insurance Co. that, in considering with what system of law a contract had its closest and most real connection, the only factual circumstances which could be taken into account were contemporary surrounding circumstances, and events subsequent to the conclusion of the contract were not relevant. In that case it does not appear to have been suggested that under the law of Kuwait (the only other potentially applicable law) evidence of subsequent conduct was admissible. It has been held in a different context that the admissibility of subsequent conduct to determine "the true intention" of the parties depended, not on English law as the lex fori, but on Chilean law as the law governing the contract. But it would be very odd if when a question arose as to whether a contract was governed by English law or Chilean law, subsequent conduct would not be taken into account in determining whether a choice of English law could be inferred, but it could be taken into account in determining whether Chilean law applied.
32-037 The Rome Convention and the Regulation do not deal expressly with the question. The Giuliano-Lagarde Report recognises that a choice of law may be inferred "in the light of all the facts", and that in order to determine the country with which the contract is most closely connected "it is also possible to take account of factors which supervened after the conclusion of the contract." The English view that subsequent conduct cannot be taken into account in construing a contract is not shared in other countries, and it would not be in keeping with the spirit of the Regulation to apply it so as to defeat the intentions of the parties. It is suggested, with some hesitation, that the English court should be entitled to take subsequent conduct into account, at least to the extent that it sheds light on the intention of the parties (or on the country with which the contract is most closely connected) at the time the contract was concluded." (footnotes omitted) (emphasis in original)
"38. As Dicey, Morris & Collins notes, consideration of subsequent conduct to construe an earlier transaction runs counter to principles of English law; but it seems to me (albeit with some diffidence in view of the cautious expression of opinion in Dicey, Morris and Collins) that it is legitimate to consider the terms of a later contract between the parties as part of the 'circumstances of the case' under Article 3.1."
The Court of Appeal declined to comment on this point (§ 22).
(E) FORUM
i) The burden is on the claimant, not merely to persuade the court that England is the appropriate forum, but "to show that this is clearly so" (Spiliada Maritime Corporation v Cansulex Ltd (The 'Spiliada') [1987] AC 460, HL at p.481); alternatively, in the words of CPR 6.37(3), "the court has to be satisfied by the claimant that England is the proper place in which to bring the claim" (VTB Capital plc v Nutritek International Corp [2012] EWCA Civ 808 §131); see also Erste Group Bank AG (London) v JSC (VMZ Red October) [2015] EWCA Civ 379 §78(viii).
ii) The "fundamental principle" (applicable to both "service out" and "service in" cases alike) is that the court "has to identify in which forum the case could most suitably be tried for the interests of all the parties and for the ends of justice" (The Spiliada p.474A).
iii) The determination of the appropriate forum in a given case requires the proper application of relevant private international law rules on the doctrine of forum conveniens as derived from extensive case law. It is not a simple "exercise of discretion". The court is required to reach an evaluative judgment upon whether, in the light of the relevant considerations, England is clearly the more appropriate forum (VTB Capital §§ 97 and 156).
iv) Each case depends on its own particular facts (Jong v HSBC Private Bank (Monaco) SA [2015] EWCA Civ 1057 § 18).
i) on full evidence and argument, it may well turn out that the alleged 40/40/20 agreement is governed by Cypriot law, not English law. The alleged existence of an English law agreement cannot therefore be relied upon as establishing England as clearly the most appropriate forum;
ii) even if the alleged agreement was governed by English law, that bare fact is not a strong pointer in favour of the English Courts (see Briggs & Rees, Civil Jurisdiction and Judgments, 6th ed, para 4.89: "The identification of the applicable law is a variable part of the overall evaluation, but in the end it is no more than that"; see also VTB v Nutriek Capital § 10);
iii) no particular issue of English law is likely to be in issue the dispute is a factual dispute about whether an oral agreement was made and if so what its terms were and whether there has been a breach; and
iv) even if any issue of law arose, the court in Cyprus could easily apply English law (just as the English court is used to applying foreign law where applicable). It is not even likely that expert evidence of English law would be needed in Cyprus given that Cyprus is a common law jurisdiction which borrows heavily from English law.
i) Neither Dr Coward nor Ms Ambrosiadou is habitually resident in the UK, nor has lived here for at least 13 years.
ii) It is unclear what other witnesses might be called to give evidence. During the course of the hearing Dr Coward's solicitors sent a letter setting out a list of potential witnesses. These included Mr Scholl, who it is said would give evidence (albeit he did not give evidence in the English IP proceedings). No evidence as such was adduced in connection with this letter, and it is difficult for the court to assess with any confidence which of these potential witnesses would in fact be likely to be called, and what relevant evidence they might be able to give. It is notable that Mr Bennett's witness statement in support of Dr Coward's application for permission to serve out did not refer to any English-resident prospective witnesses.
iii) As to language, the evidence of Ms Ambrosiadou's solicitor Mr Parkes, based on information from Ms Ambrosiadou's Cypriot lawyers, is that written evidence in Cyprus courts is often submitted in English with a Greek translation annexed, and oral evidence is often given in English with the assistance of a translator. It is also notable that Dr Coward has previously commenced proceedings in Cyprus and Greece.
iv) It is unclear what, if any, relevant documents would be located in England. It is likely that key documents relating to the operation of the business and its ownership structure would be abroad. The evidence before me indicated that neither Ms Ambrosiadou nor the Hestia and Eclectic trustees keep documents in England.
v) Dr Coward suggested that the fact that the English IP proceedings took place here might give rise to efficiencies were the present claim to be litigated here. Apart from, possibly, the ability to use the same legal representation, it is not clear what those efficiencies might be.
vi) There is some factual overlap between the present case and the Cyprus Family Claim, which Dr Coward issued against Ms Ambrosiadou in Cyprus in January 2010 seeking a share of the increase in Ms Ambrosiadou's assets between the date of their marriage and the date of their separation. Dr Coward's application in those proceedings referred to an agreement between him and Ms Ambrosiadou that they would jointly own IKOS, and to an agreement or understanding that they would both share in its income and profits. However, the evidence of Mr Bennett, Dr Coward's solicitor, is that the Cyprus court will not deal with allegations of breach of those agreements because it lacks jurisdiction to do so. The hearing of the Cyprus Family Claim began on 27 September 2016, but the court adjourned the trial to hear an application by Ms Ambrosiadou to strike out the claim, based on alleged problems with the writ. On 28 March 2018 Ms Ambrosiadou filed an application to amend her Defence and Counterclaim. Ms Ambrosiadou says if Dr Coward succeeds both in the Cyprus Family Claim in the present case, he will make double recovery. However, I see no reason to expect either the English court or the Cyprus court to permit double recovery. In all the circumstances, I do not consider that the Cyprus Family Claim is a strong factor pointing away from an English forum for the present case.
(F) STAY
"It was an express and/or implied agreement and/or understanding of the parties that the control, management and beneficial ownership of the IKOS business and the companies and/or entities constituting the same, would be conducted by and would belong jointly to the parties.
In any event, it was an express and/or implied agreement and/or understanding between the Parties that the IKOS Group would be managed by both parties and would belong to them and that they would both share its income and profits."
(G) SERIOUS ISSUE TO BE TRIED
(1) Whether any duty could have arisen
(2) Termination
(3) Limitation
i) it is arguable that the duty would indeed have been a continuing one, or (if not) that the limitation period would be postponed on the basis that Ms Ambrosiadou committed a deliberate breach in circumstances where Dr Coward was not likely to discover the breach for some time (Limitation Act section 32(1)(b));
ii) in any event, the court cannot assess on present evidence whether there have been payments made to, or at the direction of Ms Ambrosiadou, since November 2011: that would have to be resolved at trial; and
iii) even if there have been no such payments, Dr Coward may (on his case) be entitled to a declaration of entitlement to a share if and when any funds representing profits (or, at least, profits made during Dr Coward's tenure with the business) are paid to or at the direction of Ms Ambrosiadou.
(4) Abuse of process
" 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 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. "
"49 :
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.
50. Proposition ii) above seems to me to be of importance because it is one thing to say that A should bring all his claims against B in one action, whereas it is quite another thing to say that he should bring all his claims against B and C (let alone against B, C, D, E, F and G) in one action. There may be many entirely legitimate reasons for a claimant deciding to bring an action against B first and, only later (and if necessary) against others.
51. Those reasons include, for example, the cost of proceeding against more than one defendant, especially where B is apparently solvent and the case against B seems stronger than against others. More defendants mean more lawyers, more time and more expense. This is especially so in large commercial disputes. It by no means follows that either the public interest in efficiency and economy in litigation or the interests of the parties, including in particular the interests of C, D and E, is or are best served by one action against them all.
52. It seems to me that the courts should be astute to ensure that it is only in a case where C can establish oppression or an abuse of process that a later action against C should be struck out. I could not help wondering whether the defendants in this case would have given their lawyers the same instructions on the question whether they should have been sued in the first action if they had been asked before that action began as they have given now that a later action has been begun.
53. It is clear from the speeches of both Lord Bingham and Lord Millett that all depends upon the circumstances of the particular case and that the court should adopt a broad merits based approach, but it is likely that the most important question in any case will be whether C, D, E or any other new defendant in a later action can persuade the court that the action against him is oppressive. It seems to me to be likely to be a rare case in which he will succeed in doing so."
"70. That restatement of principle recognises that the doctrine is a flexible one which is not dependent upon identity of parties or issues and in an appropriate case is equally applicable whether the previous proceedings were criminal or civil. Accordingly, I reject any suggestion by Mr de la Mare QC that Hunter -type abuse cannot arise where the earlier proceedings were civil and there is no identity or privity between the parties. The authorities to which I have referred do not support any such wide proposition.
71. Nonetheless, when the subsequent litigation does not involve an issue previously decided between the same parties or their privies, that subsequent litigation will rarely be an abuse of process. That is clear from the speech of Lord Hobhouse (with whom the other Law Lords agreed) in In re Norris [2001] UKHL 34; [2001] 1 WLR 1388. "
"These are illustrations of the principle of abuse of process. Any such abuse must involve something which amounts to a misuse of the litigational process. Clear cases of litigating without any honest belief in any basis for doing so or litigating without having any legitimate interest in the litigation are simple cases of abuse. Attempts to relitigate issues which have already been the subject of judicial decision may or may not amount to an abuse of process. Ordinarily such situations fall to be governed by the principle of estoppel per rem judicatem or of issue estoppel (admitted not to be applicable in the present case). It will be a rare case where the litigation of an issue which has not previously been decided between the same parties or their privies will amount to an abuse."
"(1) In cases where there is no res judicata or issue estoppel, the power to strike out a claim for abuse of process is founded on two interests: the private interest of a party not to be vexed twice for the same reason and the public interest of the state in not having issues repeatedly litigated; see Lord Diplock in Hunter v. Chief Constable, Lord Hoffmann in the Arthur Hall case and Lord Bingham in Johnson v. Gore Wood. These interests reflect unfairness to a party on the one hand, and the risk of the administration of public justice being brought into disrepute on the other, see again Lord Diplock in Hunter v. Chief Constable. Both or either interest may be engaged.
(2) An abuse may occur where it is sought to bring new proceedings in relation to issues that have been decided in prior proceedings. However, there is no prima facie assumption that such proceedings amount to an abuse, see Bragg v. Oceanus; and the court's power is only used where justice and public policy demand it, see Lord Hoffmann in the Arthur Hall case.
(3) To determine whether proceedings are abusive the Court must engage in a close 'merits based' analysis of the facts. This will take into account the private and public interests involved, and will focus on the crucial question: whether in all the circumstances a party is abusing or misusing the court's process, see Lord Bingham in Johnson v. Gore Wood and Buxton LJ in Taylor Walton v. Laing.
(4) In carrying out this analysis, it will be necessary to have in mind that: (a) the fact that the parties may not have been the same in the two proceedings is not dispositive, since the circumstances may be such as to bring the case within 'the spirit of the rules', see Lord Hoffmann in the Arthur Hall case; thus (b) it may be an abuse of process, where the parties in the later civil proceedings were neither parties nor their privies in the earlier proceedings, if it would be manifestly unfair to a party in the later proceedings that the same issues should be relitigated, see Sir Andrew Morritt V-Dr Coward in the Bairstow case; or, as Lord Hobhouse put it in the Arthur Hall case, if there is an element of vexation in the use of litigation for an improper purpose.
(5) It will be a rare case where the litigation of an issue which has not previously been decided between the same parties or their privies will amount to an abuse of process, see Lord Hobhouse in In re Norris.
To which one further point may be added.
(6) An appeal against a decision to strike out on the grounds of abuse, described by Lord Sumption JSC in Virgin Atlantic Airways Ltd v. Zodiac Seats UK Ltd [2014] AC 160 at [17] as the application of a procedural rule against abusive proceedings, is a challenge to the judgment of the court below and not to the exercise of a discretion. Nevertheless, in reviewing the decision the Court of Appeal will give considerable weight to the views of the judge, see Buxton LJ in the Taylor Walton case, at [13]."
i) Even if Dr Coward is not issue estopped from litigating against Ms Ambrosiadou the very same issue which he litigated in the English IP proceedings against Ms Ambrosiadou's privy, IKOS UK, it is vexatious to put Ms Ambrosiadou to the trouble of having to deal with these allegations yet again.
ii) The present claim could and should have been litigated in one of the other sets of proceedings in which it was raised. Dr Coward has caused Ms Ambrosiadou to incur costs in defending the claim (successfully in the English IP proceedings and until he discontinued the Cyprus Moltke Claim) but is now vexing Ms Ambrosiadou again with the same claim.
iii) The present proceedings are a collateral attack on the judgment and finding made in the earlier English IP proceedings. Dr Coward is seeking, on the basis of the same material he had in the English IP proceedings, a ruling contrary to the judgment of Asplin J that there was no evidence of any kind of oral agreement as alleged.
iv) Where there are concurrent English and foreign proceedings outside the scope of the Recast Judgments Regulation, the approach of the Court at common law is set out in Australian Commercial Research & Development Ltd v ANZ McCaughan Merchant Bank Ltd [1989] 3 All ER 65: the plaintiff was ordered to discontinue the later English proceedings when he had already commenced proceedings in Queensland in relation to the same placement agreement.
i) The first Greek divorce proceedings, issued by Ms Ambrosiadou in April 2009, included a counter-petition by Dr Coward alleging breach of an agreement to, among other things, share the "fruits of the results of the IKOS Group" equally, but these proceedings ended without a decision on the merits when Ms Ambrosiadou resigned from the proceedings in August 2011.
ii) In a second set of divorce proceedings in Greece, issued by Ms Ambrosiadou in October 2010, the Athens Court of Appeal when dissolving the parties' marriage stated that "[Dr Coward's] allegation about having reached an agreement with his spouse to distribute equally the financial results of the IKOS group was not proven". However, on appeal, the Greek Supreme Court held that that finding (among others) was not res judicata, and dismissed the parties' appeals for that reason.
iii) In custody proceedings issued by Ms Ambrosiadou in December 2010, Dr Coward's counterclaim referred to the 50/50 and 40/40/20 agreement, and at the hearing he contended that he, Ms Ambrosiadou and their son held all 'family assets' in 40:40:20 proportions; but the court rejected the claim and counterclaim on the basis that it was not competent to try them.
iv) On 1 March 2013, just before the trial of the English IP proceedings, Dr Coward issued but did not serve a claim form against Ms Ambrosiadou alleging, among other things, breach of fiduciary duty "in connection with the IKOS business and/or the management of family assets" and stating that Ms Ambrosiadou had " subverted the agreed split of family assets (including profits of the IKOS business)". Dr Coward says he issued this claim because of exchanges in skeleton arguments in the English IP proceedings in which he perceived the IKOS entities to be raising points regarding his, and, logically, Ms Ambrosiadou's, fiduciary duties. The IKOS entities (Ms Ambrosiadou by then having dropped out of the proceedings) objected to the court hearing the claim, and Dr Coward allowed it to lapse.
v) Dr Coward issued proceedings in the BVI in February 2013 against, among others, Anaxilea, MFP and Iridanos. His claim concerned the ownership and control of assets held by MFP, and his claim was based on he and Ms Ambrosiadou having set up the Eclectic Trust to manage distributions of IKOS's profits. Dr Coward alleged that he and Ms Ambrosiadou put the trust structure in place to distribute profits to MFP, Anaxilea and Iridanos in 40:40:20 proportions. Bannister J struck the claim out, apparently based on pleading points. Ms Ambrosiadou was not a party to the proceedings.
vi) Dr Coward issued proceedings in Monaco in April 2014 against UBS and MFP. seeking an order requiring UBS to comply with an earlier disclosure order. Ms Ambrosiadou was not a party. The Monaco court dismissed the claim. In doing so, it found that Dr Coward was not the beneficial owner of MFP. That, however, does not in my view have any bearing on Dr Coward's present claim, which is not based on ownership of the underlying business assets.
(H) OVERALL CONCLUSION
i) Dr Coward does not have a plausible evidential basis for the alleged 50/50 agreement, on which his argument for jurisdiction depends; and
ii) even if there were a plausible evidential basis for the 50/50 agreement, Ms Ambrosiadou has the better of the argument that the alleged 40/40/20 agreement (under which Dr Coward's claim is actually brought) replaced rather than merely varied the 50/50 agreement, was not made in England or governed by English law, and did not contain an English jurisdiction clause.
