We acted for the successful claimants in an unusual case concerning transactions designed to defeat the claims of judgment creditors. The judgment is available via BAILLI and has attracted comment from a number of sources.
We acted for clients who had a strong contractual claim against a solicitor (“Mr Shone”) running a litigation funding vehicle incorporated as a limited partnership in Bermuda but run from an office in Singapore as an investment fund.
The clients had noticed serious irregularities in the accounts of the fund vehicle and, through sheer persistence, had forced Mr Shone to agree to buy them out personally. Mr Shone’s liability to the clients under their contracts with him was around USD 2,400,000. Unknown to the clients (at the time), they were not alone in their concerns and, under pressure on all sides, Mr Shone effectively abandoned his post as general partner of the fund.
In the course of investigations, it became clear that Mr Shone had exploited delays in consular service in Singapore (which is required by the laws of that state and which he had obliged the clients to undertake by conspicuously failing to provide an address for service in England and Wales) to dissipate nearly all his assets to his supposedly-estranged wife (“Mrs Shone”) and to disappear to Bali in Indonesia with his girlfriend, a self-described “glamour model” and “male menopause therapist”.
Leaving aside the exotic facts, the importance of the case lies in the fact that a team led by Simon Winter, with support from Oliver Cox (who has now left the firm), obtained on 12 February 2015 one of the most draconian remedies available from the English Court, namely a worldwide asset freezing injunction not only against Mr Shone but also against Mrs Shone on the basis of the jurisdiction established in an authority known as Chabra. Further (and very unusually) we persuaded the Court to allow service by alternative methods on both husband and wife and to allow delay in service to allow ancillary proceedings to be brought in Malaysia to preserve a valuable piece of real estate for potential enforcement there, both of which involved a significant exercise in logistics.
This case is an important example of how this firm can deliver results for clients of the kind much larger practices could deliver but at a level of cost which made the case economically viable for the clients. A larger practice could easily have spent more than the claim was worth.
Mrs Shone opposed the claim at every turn, instructing first Stewarts Law LLP then Benchmark Solicitors LLP, and tried and failed to discharge the freezing injunction on 18 June 2015. Judgment was entered against Mr Shone on 24 July 2015 and against Mrs Shone on 20 May 2016.
That judgment is of general public importance and is a relatively rare High Court claim dealing with the application of Section 423 of the Insolvency Act 1986. That section gives the Court the power to set aside transactions designed to defeat the claims of creditors. The case is out of the ordinary in that it concerned unusually high-value transfers brought not by an insolvency practitioner but by some of the creditors affected themselves.
Daniel Saoul of 4 New Square acted as Counsel throughout.