Another success for Jackson Parton: Simetra Global Assets v IKON Finance [2019] EWCA Civ 1413

Jonathan Clyne of Jackson Parton successfully acted for the Appellants/Claimants, Simetra Global Assets Ltd and Richcroft Investments Ltd, in an appeal against the judgment of Mr. Justice Robin Knowles CBE given in October 2018.

The Claimants alleged they were victims of a Ponzi scheme operated by a Mr George Daskaleas and companies controlled by him, with the assistance of a number of companies and individuals in the Ikon Group of companies.  The Claimants’ claims against the Ikon Group of companies and individuals for dishonest assistance in the fraudulent Ponzi scheme and for deceit were dismissed by Mr Justice Robin Knowles CBE in a surprisingly brief 13 page judgment following a 3 week trial in the Commercial Court.  The Claimants appealed, at which stage Jackson Parton were instructed.

Only the Ikon Group companies and individuals took part in the appeal.  Lord Justice Males, with whom Lord Justice McCombe and Lord Justice Peter Jackson agreed, found in favour of the Appellants, that the Appellants’ submissions were well founded and that, however unpalatable the prospect, a retrial was the only just course. 

In the appeal the Appellants contended that the judgment at first instance failed to address many of the issues which arose at trial, the conclusions of the judge were cursory and his reasoning was limited, he failed properly to analyse the witness and documentary evidence on a number of critical issues and as a result many of his findings were unexplained and unjust.  The Appellants therefore argued justice required a retrial before a different judge.

For the Court of Appeal to order a retrial before a different Commercial Court judge is an extremely rare occurrence.  The court held “that there was a plainly arguable case of dishonesty on the part of Ikon which needed to be addressed and with which the judge did not engage, and that the judge’s findings on the absence of reliance are inadequately reasoned”  They also held that “this judgment plainly does not take into account the evidence which needed to be taken into account”.

The Court of Appeal judgment briefly summarises the law on dishonest assistance in breach of a fiduciary duty, deceit and conspiracy, the approach of an appellate court to the judge’s findings of fact and contains important guidance on the requirements for a properly reasoned judgment.  After citing the relevant authorities, drawing especially from Flannery v Halifax Estate Agencies Ltdand English v Emery Reimbold & Strick Ltd, Males LJ summarised, without attempting to be comprehensive or prescriptive, what is required in a judgment:

“First, succinctness is as desirable in a judgment as it is in counsel’s submissions, but short judgments must be careful judgments. Second, it is not necessary to deal expressly with every point, but a judge must say enough to show that care has been taken and that the evidence as a whole has been properly considered. Which points need to be dealt with and which can be omitted itself requires an exercise of judgment. Third, the best way to demonstrate the exercise of the necessary care is to make use of “the building blocks of the reasoned judicial process” by identifying the issues which need to be decided, marshalling (however briefly and without needing to recite every point) the evidence which bears on those issues, and giving reasons why the principally relevant evidence is either accepted or rejected as unreliable. Fourth, and in particular, fairness requires that a judge should deal with apparently compelling evidence, where it exists, which is contrary to the conclusion which he proposes to reach and explain why he does not accept it.”

He also made clear that, if these requirements were not followed, the reasoning of the judgment would need to be particularly cogent if it was to satisfy the demands of justice.

In the judgment, Males LJ also emphasised the importance of contemporary documents and especially instantaneous messages, which nowadays, in his view, are “where true thoughts are plain to see”. When considering documents that appeared on their face to provide cogent evidence contrary to the judge’s conclusion, the judge ought to have considered the oral evidence in the light of the telling contemporaneous documentation.

This judgment is a great result for our clients and goes to show what can be achieved by our small, but very effective, team, working closely with counsel.  One lesson learned, which is of particular importance to our more usual shipping and international trade clients, is that the courts will place considerable reliance on the contemporaneous documentary evidence, which these days will include instantaneous communications such as WhatsApp, Viber and other similar instantaneous messages.  When these are available they can be extremely revealing of what is really going on in the minds of the parties involved in a dispute.  Whilst disclosure is often a hotly contested part of the litigation process, obtaining copies of this type of unofficial correspondence, required to be disclosed under the Civil Procedure Rules, can be vital to a successful, and just, outcome. 

View full judgement of Simetra Global Assets Limited v IKON Finance Limited.