IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Courtroom No. 2
7 Rolls Building
Fetter Lane
London
EC4A 1NL
Before:
THE HONOURABLE MR JUSTICE MORGAN
B E T W E E N:
AEROFLOT
&
BEREZOVSKY
Transcript from a recording by Ubiqus
61 Southwark Street, London, SE1 0HL
Tel: 020 7269
MR ATHERTON, QC & MISS WEAVER appeared on behalf of the RECEIVERS
MISS FORD appeared on behalf of MISS BEREZOVSKAYA
MR SINCLAIR appeared on behalf of STREATHERS LLP
MR COTLICK appeared IN PERSON
JUDGMENT
MR JUSTICE MORGAN:
I have before me two applications which were made in relation to the estate of the late Mr Boris Berezovsky. Before I describe what is involved in those applications, it is necessary to go back in the history of these proceedings to explain what earlier orders were made and the reasons for those orders. Mr Berezovsky died on the 13th March 2013. He left a Will and he appointed executors. To date, no one has applied for probate of the Will and become an executor with probate. Not very long after his death, by April 2013, concerns were expressed as to the preservation of the assets in Mr Berezovsky’s estate. So far as I am aware, those concerns were first expressed by a company called Joint Stock Company Aeroflot-Russian Airlines, to which I will refer as Aeroflot.
Aeroflot had issued proceedings against Mr Berezovsky in his lifetime. In those proceedings, Aeroflot claim substantial damages for alleged wrongdoing by Mr Berezovsky. Aeroflot had contended in April 2013, that it was a creditor of the estate of Mr Berezovsky. On the 29th April 2013, I appointed two members of Grant Thornton LLP to be court appointed receivers in relation to the estate. I gave my reasons for that appointment in a judgment given on that day. In short, I was persuaded that in the absence of anyone else acting to represent the estate of the deceased, it was appropriate to have court appointed receivers to receive, collect and get in the assets of the estate. That was intended to preserve the assets of the estate, against a background where it was being alleged that the assets were in danger of being dissipated and forever lost.
Later, on the 19th June 2013, I made a further order giving the receiver certain express powers. The terms of that order had been the subject of considerable discussion between the parties. As I recollect it, that order was made as the result of a negotiated compromise between the various interested parties. The order I made contained two provisos. The second proviso was in these terms;
‘No power conferred by this order shall give the receivers power to do any act or obtain any property, document or information which the duly constituted personal representatives of the estate, could not have done or obtained, nor obtain any document or information that is subject to any legal professional privilege, including that of the estate, which has not been waived.’
In due course, a daughter of the late Mr Berezovsky, a Miss Ekaterina Berezovskaya, applied to be appointed as an administrator of the estate ad colligenda bona. That application came before me on the 4th September 2013. The application was strenuously opposed by Aeroflot. Indeed, two days earlier on the 2nd September 2013, Aeroflot had brought proceedings which have since been described as the Part 8 claim, and in those proceedings they sought an order determining that Miss Berezovskaya should not be allowed to be a representative of the estate, whether as executrix or as administratrix, and certainly not ad colligenda bona.
The hearing on 4th September 2013 came hot on the heels of the issue of the Part 8 claim form. I was not asked at that hearing to rule on Part 8 claim form, either by acceding to it or by dismissing it. What I did on the 4th September 2013 in that respect appears in paragraph 12 of the order made on that day. I directed that, both in relation to Miss Berezovskaya’s application for a grant of administration, and in relation to the Part 8 claim the following :
‘The applicant’s application for a grant ad colligenda bona in respect of the full administration of the estate is adjourned. A CMC in respect of both the applicant’s application for a grant ad colligenda bona and the claimant’s Part 8 claim, … , shall be fixed through the usual channels to be listed before Mr Justice Morgan with a time estimate of half a day and pre-reading. The CMC has been certified as fit for expedition. The parties shall provide skeleton arguments in advance of the CMC and shall notify the court if the time estimate should change.’
Because on the 4th September 2013, there remained uncertainty as to what was to happen to Miss Berezovskaya’s application to be appointed as administratrix and as regards the Part 8 claim, I considered that it was necessary to do something on an interim basis. What I did, as appears from paragraphs 1 to 11 of the order, was to appoint Miss Berezovskaya for certain limited purposes, as an administratix. One of the purposes for which she was appointed was to deal with certain litigation that was then pending. Paragraph 3(a) of the order summarises the litigation referred to. In one action there was considerable time pressure on the parties because there was to be an appeal in the Court of Appeal to be heard in November 2013 and it was desirable that someone represent the estate of Mr Berezovsky in connection with that litigation. I considered that Miss Berezovskaya was an appropriate person to appoint for that purposes and at the same time I extended her appointment to the other litigation, although the time pressure in the case of that litigation was not understood to be so great. I also appointed Miss Berezovskaya to be an administrator with regard to issues concerning the grave of the deceased and his personal effects. The purpose of appointing Miss Berezovskaya in that way was to produce a short-term solution to what were considered to be immediate and pressing problems.
I go from there to the Part 8 claim. As I have described, the claim form was issued on the 2nd September 2013. It was supported by evidence that was served on behalf of Aeroflot. Aeroflot made a number of criticisms of Miss Berezovskaya’s suitability. They also made an important submission that the estate of Mr Berezovsky was insolvent and significantly so. When dealing with the matter on the 4th September 2013, I indicated that the solvency of the estate may turn out to be a most important consideration, when determining the fate of Miss Berezovskaya’s application to be appointed administratix and the Part 8 claim form. If the estate were solvent, the court might think that it was appropriate to have a family member and beneficiary administer the estate. If, on the other hand, the estate was insolvent the court might think that it was appropriate to have an insolvency practitioner whose primary concern would be the creditors, rather than the family members and beneficiaries.
After the hearing on 4th September 2013, as I understand it, Miss Berezovskaya has put in substantial evidence dealing, amongst other things, with the solvency of the estate. I am told that she has herself signed a witness statement and she also relies on a witness statement of her solicitors, a Mr Hastings of Addelshaw Goddard LLP. I have been shown a lengthy statement described as his third witness statement, which deals with the solvency of the estate. The background to this witness statement is that Aeroflot had obtained copies of the reports made by the receivers that had been appointed. Those reports referred to the assets and liabilities of the estate and Mr Hastings, in a detailed witness statement, addresses many of the points made by the receivers and gives his reasons for fundamentally disagreeing with the opinion arrived at by the receivers.
There has not been a response to Mr Hastings’ witness statement or indeed Miss Berezovskaya’s witness statement, as I understand it, and there is due to be heard on Friday of this week, the 20th December 2013, an application by Aeroflot which deals with the way in which the evidence has been served upon Aeroflot. I will say nothing today about those matters, which have yet to be argued and only then will they be decided. It is pertinent to note however that the two protagonists, Aeroflot and Miss Berezovskaya, take radically different positions as to the solvency of the estate. I earlier said that Aeroflot’s case is that the estate is insolvent and Miss Berezovskaya’s case is that the estate is solvent, that is somewhat of an understatement of the degree of difference. Aeroflot would have it that the estate is massively insolvent and Miss Berezovskaya would have it that the estate is comfortably solvent. Neither side says that this is anything like a borderline case or near a borderline case.
Despite my ambitions on the 4th September 2013 that the Part 8 claim would be progressed with proper speed and that the appointment of the receiver and the appointment of Miss Berezovskaya would essentially be short-term interim measures, the Part 8 claim has not in fact been progressed. I have referred to the fact that on Friday of this week there is to be an application dealing with evidence. There has not yet been fixed a case management conference, in accordance with the order of the 4th September 2013. At any rate, if it has been fixed, it is not fixed for any date that is about to arrive but is some way off. So the proceedings which were designed to determine the medium- term position as to representation of the entire estate of Mr Berezovsky had not progressed, but had very badly gone into the doldrums. In the meantime, the short-term initiatives which were designed to be helpful, have given rise to a fair measure of contention of their own and indeed, these two applications today, which have taken the better part of a day so far to deal with.
I ought now to refer to the applications which are before the court. The receivers applied for an order that they be granted letters of administration ad colligenda bona in respect of the estate, but for limited purposes only. As described in the application notice, the purposes were to be to enable the receivers to take possession of certain documents which are described as, ‘All files relating to the affairs of Mr Berezovsky provided at an earlier time to the receivers by the firm of Streathers LLP or, insofar as not already provided, currently held by Streathers LLP.’ There is a similar request in relation to the files relating to the affairs of Mr Berezovsky and which were at one time held by Alexiou Fisher Philipps, with whom I will refer as AFP. Thirdly, there is a request for similar documents and similar powers and appointments relating to the documents in the possession of a Mr Michael Cotlick, again relating to the affairs of Mr Berezovsky. I have also been provided with a draft order in relation to that application which, to a considerable extent, repeats the language of the application notice and I need not read out the draft order. On the application, Mr Atherton QC and Miss Weaver appear on behalf of the receivers. Miss Ford appears for Miss Berezovskaya. Mr Sinclair appears for Streathers LLP and Mr Cotlick appears in person. No one appears on behalf of AFP.
I go from there to the other application which is made by Miss Berezovskaya who asks for an order, effectively, against the receivers. She applies for directions from the court that she be permitted to inspect, copy and use, for the purpose of fulfilling her obligations pursuant to the limit of grant, all the information and/or documents and is held by the receivers, both at the date of the order which may be held or received by them and future time, relating to the estate. The application notice also asks the court to give a direction entitling Miss Berezovskaya to raise queries and enquiries of the receivers and so that those queries or enquiries should be dealt with by the receivers within a reasonable time. The application notice was accompanied by a draft order which has subsequently been revised and refined. The most recent version has been called version C in the draft order. It is proposed on behalf of Miss Berezovskaya that there be a recital which confirms that she will, within a reasonable time, cooperate with requests by the receivers for information and assistance regarding the estate. The draft order then contains a number of orders and directions inviting the receivers to act in particular ways. In particular, the receivers are to be directed to provide information and documents to Miss Berezovskaya. There is reference to unredacted copies of reports, both as to past reports and as to all future reports. There is a direction sought as to the receiver’s giving an explanation of the calculations in their reports and the assumptions that are relied upon. There is also a direction sought as to the provision of documents and information relating to assets and liabilities of the estate. The draft order goes on to refer to the administrator’s right to receive information and the right to raise queries and enquiries and so on.
These applications at one time appeared to be relatively uncontentious. It appeared that the parties might be able, with a little further dialogue, to reach an understanding and produce progress as to find an order which would be appropriate for the court to make. In the course of the hearing, the parties appeared to move considerably away from the original position which I expected to be told. I therefore have to deal with the applications and make orders which are not agreed orders and are, to a greater or lesser extent, opposed. I also have to bear in mind important questions as to the costs that would be incurred by one or other party or a third party complying with the kind of order that is referred to. I have been concerned from the first involvement I have had with this case, when I appointed receivers, in relation to the very considerable cost burdens being borne by the estate in the months since Mr Berezovsky’s death. I am hesitant about imposing further costs burdens on the estate without persuading myself or being persuaded that there is real justification for those costs to be incurred and then borne by the estate.
I have considered it helpful to stand back from the fray, to stand back from the individual arguments which are very much in dispute and look at the bigger picture. It seemed to me in the past and it seems to me today that what is badly needed in this case is a decision for the medium-term, and not just for the short-term, as to who is to represent this estate. I have indicated earlier that if the estate is solvent, a case can be made for a beneficiary, a family member, Miss Berezovskaya possibly, being the representative. If the estate is insolvent, a case can be made for the representative being an insolvency practitioner. There are two protagonists on the issue of solvency. They are Aeroflot and Miss Berezovskaya. I described the evidence they rely on and the position they take up. Miss Berezovskaya, I suspect, has cast the receivers in the role of protagonist. They are on the opposite side, she sees it, to her case. They therefore, as she sees it, should provide information, should provide disclosure, should provide explanations, rather as one would expect further information and disclosure from an adversary to litigation. That overlooks the fact that the receivers are officers of the court. They have no position to justify in this respect. Their obligation is to investigate the matter, go to appropriate but not excessive lengths to obtain information and report the matter to the court. True it is that their conclusions to date, so far as I understand them, have been that the estate appears to be insolvent. However, they are not protagonists with a case to argue, they have a report to make to the court.
The other general matter I will deal with is that this question of solvency of the estate will probably not be answered definitively one way or the other in the context of the Part 8 claim and Miss Berezovskaya’s application to be appointed as administratrix. What the court may instead be more concerned to assess, doing the best it can on incomplete information, much of it involving the position of third parties who will not be represented before the court, is whether the court’s assessment is that there is a reasonable probability that the estate will be insolvent. I take that phrase from Section 271 of the Insolvency Act 1986, as amended by the Administration of Insolvent Estates of Deceased Persons Order 1986, Article 5. It may be difficult, it may not, to determine that question but it seems unlikely that the court will determine the ultimate issue of solvency. There are too many issues involving third parties. Sometimes the issues relate to whether a third party has a claim against the estate and, if so, the quantum of the claim. Sometimes the issue is whether assets which appear to be in the name of a third party are in fact beneficially owned by the estate. The court will do the best if can in the way that I have attempted to describe.
With that background, I turn to the receiver’s application. I say at once that I in the past gave sanction for this application to be met. I do not suggest any criticism of the receivers for having made the application. The application has been strenuously argued and I have all the assistance I could expect as to the arguments in favour of the application being granted. However, in the course of addressing the application I have also heard from others with different points of view who have raised other concerns and other matters that need attention. What has emerged, in my judgment, is that the application made by the receivers, which would enable them to have access to information, principally privileged information, the privilege belonging to the estate, is not really for the purpose of preserving or safeguarding assets. It is for the purpose of reporting more fully to the court on the question of solvency. However, in order to report more fully on the question of solvency, the receivers accept that they will not be acting as receivers. They will have to take on a new function, a new role and become administrators of the estate, albeit within defined boundaries.
Having heard the argument and having given the matter further thought, it seems to me that there will be difficulties in the court making an order as drafted, or as it might be revised. There will be expense involved. The receivers will, on behalf of the estate, become obliged to pay the costs of third parties. It is possible to identify a number of figures as regards to costs which might be involved, but it is rather more difficult to identify the correct figure or an accurate prediction as to what the figure might be. It is also far from clear to me that the further information which might come into possession of the receivers, now acting in the capacity of administrators, will add any significant further information to that which is currently being put forward by the protagonists as to solvency or insolvency, as the case may be. I have anxiously tried to assess on a cost benefit basis whether the benefit which might possibly be achieved will be worth the cost that will certainly be incurred. My overall conclusion is I am not satisfied that it is appropriate any longer to pursue the matter raised by the receivers for the purposes for which the information will be used. The receivers have done a service by raising the matter, by pursuing the matter, by attempting to make progress in the matter, but they have been frustrated or thwarted to some extent. The way ahead may not be worth pursuing and the costs would appear to be undesirable, unless the benefit justifies them, as to which I am not convinced. For that reason, I will not make an order in relation to the receiver’s application. I will not dismiss it and I will not simply say no order. I will instead adjourn it, with liberty to restore because of the imminent, I hope, case management of the Part 8 claim and this application should be kept in reserve in case it is material or helpful to revive it for any purpose.
I turn then to consider Miss Berezovskaya’s application which I have described. A number of points have been made about the application. Some of them have been suggested by the court and many, many more have been put forward by counsel on behalf of the receivers. I will start with the suggestions that I myself made. My suggestion was to question the reason for the application. The reason put forward by Miss Ford on behalf of Miss Berezovskaya is that Miss Berezovskaya expects in the near future to make Beddoes applications in relation to the defence of the litigation where Mr Berezovsky’s estate and others are defendants. She points out that it is established by authority that an applicant for a Beddoes relief must be candid and give full and frank disclosure of the strengths and weaknesses of the claim. Miss Ford would have it that means that there must be full and frank disclosure as to the asset position of the estate. I do not myself think that any of the usual authorities can be read that way. However, I do see that the position of the estate might be relevant to a judge exercising the Beddoes jurisdiction. Put in this way, a normal Beddoes application will involve a consideration of the amount at stake, being fought over or defended, with the costs of fighting over it or defending it. A court will be reluctant to allow disproportionate expenditure on costs, judged in that way.
Normally, one looks at the nominal amount in dispute, or perhaps a realistic assessment of what is in dispute, and one looks at the costs involved. That certainly is an appropriate approach where the estate being defended is a solvent estate, but is it appropriate where the estate being defended is an insolvent estate? In such a case, it might be said that what the claimant will achieve at most from the litigation is a dividend on an insolvency and it might be appropriate to consider the amount of the dividend, as against the costs incurred in defending the insolvent estate. That might suggest a different answer from the one suggested for a solvent estate. The difficulty which a judge hearing a Beddoes application will have in that respect is that, based upon the evidence served so far in the Part 8 claim, there may be real difficulty in coming to a view as to whether the estate is solvent or insolvent and if it is insolvent, what the amount of any dividend might be. The judge may have to take the view that he simply cannot say and there is too much imponderable in that respect. I add to those thoughts the following consideration. If the Part 8 claim form is determined, then there will be an answer as to who should represent the estate, either it will be an insolvency practitioner in the case of an insolvent estate or it will be Miss Berezovskaya, in the case of a solvent estate. There may be other possibilities, but it is useful to consider those two, at any rate.
If Miss Berezovskaya is not the administrator because it is an insolvent estate, then she will not be making a Beddoes application and she will have no concern about her duties in such an event. If she remains administratrix or is appointed administratix in all respects, she will be able to explain to the court that the question of solvency has been gone into and the court, on Part 8 claim, has taken a certain view and her obligation to give full and frank disclosure will be dealt with in that way. In other words, some of the difficulties which Miss Berezovskaya suggests she will be under, in connection with a Beddoes application, with either disappear altogether or be radically changed by the outcome of the Part 8 claim becoming relevant. In those circumstances, common sense suggests that the Part 8 claim should go forward to determination before the litigation against the estate is pursued. It seems to me, as a matter of case management, the court could bring about a result where the Part 8 claim is pursued in advance of the other proceedings. I do appreciate that there are two claimants in the other proceedings. It is not only Aeroflot, it is also the Samara Federation, although they have been represented by the same solicitors and counsel and they have seen matters in the same way in the past.
For those various reasons, I consider that the appropriate thing to do, whatever the merit of the other points that have been argued, is not to make an order today on Miss Berezovskaya’s application. I will indicate in a moment whether I will make no order or whether I will adjourn it with liberty to restore, as I have done in the case of the other application. At any rate, I will not make an order today requiring or directing the receivers in the way suggested. The matter does go further however and the order I will make, for the reasons I am about to give, is that there simply be no order and the matter need not be adjourned. Mr Atherton, on behalf of the receivers, has made a large number of points, which I will take relatively succinctly. He points out that the application was made on the 11th December, following a letter which was written on the 6th December, a weekend intervened. Today is the 17th December. Yesterday, on the 16th December, the receivers served a detailed statement of affairs which Miss Ford, on behalf of Miss Berezovskaya, says contains useful information updating the earlier reports of the receivers and Mr Atherton also points out that a report had not been served since around August, but that was by agreement with all concerned and with a view to avoiding unnecessary and unhelpful costs being incurred.
As to the question of redaction of previous reports, Mr Atherton accepts on behalf of the receivers, that the reasons for the redactions which were proper ones at a time in the past, have gone away because Miss Berezovskaya has herself obtained essentially the same information from third parties. The receivers accept that Miss Berezovskaya can have unredacted copies of earlier reports. As to redactions in relation to future reports, that will all depend on what might be proper grounds for redaction as regards her in the future. Mr Atherton submits it would be wrong to make an order in advance, not knowing the future as to the fact that all future reports be unredacted. So that deals with one part of the application which is made. It does seem to me that it is not necessary or appropriate to make an order against the receivers, as regards those matters, against that background. The draft order also seeks a direction that the receivers give explanations and provide information and documents. I think on any view, the draft order would have to be pruned considerably, but I am persuaded that in the event, it is not appropriate to make these orders. The receivers are officers of the court. They are not, as perhaps Miss Berezovskaya got into the habit of thinking, her opponent. They are not there to answer requests for information under the Civil Procedure Rules and they are not there to give disclosure of documents. They are prepared, and it has been reiterated in court today, to answer reasonable requests for information and give reasonable explanations. They have gone some considerable way in both respects, with the recent statement of affairs. Mr Atherton also points out that the paragraphs in the draft order referring to the administrator’s right to receive information and a right to raise questions and orders that the receivers must do things, does involve the court interfering with the receivers without a proper ground for it being shown by Miss Berezovskaya.
The way in which this application was lodged and presented for most of its time was that Miss Berezovskaya had a right to these matters and the receivers should be directed to acknowledge and respect that right. In her reply, Miss Ford referred to one or two specific things. She says that this was asked for and that was refused, but that is not, as far as I can see, developed in the evidence which is before me and I am not able to judge it or assess it just because it is referred to in counsel’s submissions. The court has the power to give directions to the receivers. They are officers of the court but I am not persuaded that they have done anything thus far that requires me to micromanage this receivership more than has already been inevitable in relation to it. So quite apart from the Beddoes justification not persuading me to make an order, I am independently not persuaded to make an order of the kind which is sought.
I will make a brief comment on the recital in the draft order that Miss Berezovskaya confirms she will, within a reasonable time, cooperate with requests for information and assistance. I hope that was not cleverly designed to convince me that Miss Berezovskaya would do the same in her regard, as she was asking the receivers to do. In truth, the recital is dramatically different from the order I was asked to make against the receivers. If I had made an order against the receivers, they would then become obliged under order of the court, to act in a specified way. The recital in the order permits Miss Berezovskaya do nothing in particular within any timeframe. I hope that is not an unduly cynical reaction to the drafting and I will live in hope that what Miss Berezovskaya meant to convey was that she will actively and properly exchange information with the receivers and the requests they have made of her over many months will now eventually be answered and that would be for the benefit of the receivership and for the benefit of the court. So to recap, in relation to the receiver’s application, I will adjourn it generally for liberty to restore and as regards the application by Miss Berezovskaya, I think the appropriate expression of the order is no order.
MR JUSTICE MORGAN: Right, I think I have dealt with the application so we will deal with what must be consequential matters.
MR SINCLAIR: Yes, My Lord -
MR JUSTICE MORGAN: Who wishes to begin?
MR SINCLAIR: I do.
MR JUSTICE MORGAN: I do not mind -
MR SINCLAIR: Yes, well maybe I should begin -
MR JUSTICE MORGAN: You got in first.
MR SINCLAIR: I did, exactly. All I ask for is my costs of this application.
MR JUSTICE MORGAN: Streathers or Streathers’ costs.
MR SINCLAIR: Yes, Streathers I believe is the correct -
MR JUSTICE MORGAN: Streathers?
MR SINCLAIR: Yes. There is a schedule which is -
MR JUSTICE MORGAN: Well let us deal with the -
MR SINCLAIR: Oh the principal, yes of course -
MR JUSTICE MORGAN: - the principal -
MR SINCLAIR: Yes, yes. Well clearly, although the application has been adjourned with liberty to restore, the net factor today is that Your Lordship has not granted them what they came here looking for and has agreed with my submissions that this was disproportionate and the various practical points I made, that it was not appropriate to make the order that was sought. The fact that it has been adjourned does not mean that any different order should be made in respect of costs because it may well never be revised -
MR JUSTICE MORGAN: Well I could reserve costs or I could deal with them.
MR SINCLAIR: Yes.
MR JUSTICE MORGAN: It is not inevitable that they must be reserved certainly, right.
MR SINCLAIR: And the problem with reserving them is that this may never be revised -
MR JUSTICE MORGAN: No, somebody would have to come back and fight them.
MR SINCLAIR: And we are strangers to this litigation. We have been brought before the court as strangers to this action. We do not have any interest in it at all and it is appropriate, in my submission, that not only should the costs not be paid by the estate, but should be paid by the receivers and there is a very learned judgment considering the law on the matter of Your Lordship.
MR JUSTICE MORGAN: [Inaudible]. Is that one in your bundle?
MR SINCLAIR: Yes, it is at tab three.
MR JUSTICE MORGAN: Any particular formulation that you invoke or -
MR SINCLAIR: Well, it was the -
MR JUSTICE MORGAN: [Inaudible] in the matter.
MR SINCLAIR: It was the application against Addleshaw Goddard seeking their documents -
MR JUSTICE MORGAN: Right.
MR SINCLAIR: And there the same problem arose -
MR JUSTICE MORGAN: And I think I [inaudible] some of their costs against the receivers.
MR SINCLAIR: Yes, you did. You did, exactly and so at paragraph 33 -
MR JUSTICE MORGAN: Right.
MR SINCLAIR: - of the judgment you refer to a case ReWilson Lovatt& Sons Limited [1977] 1 All ER 274.
MR JUSTICE MORGAN: Yes.
MR SINCLAIR: Which was making the point that where a… there is a difference between the situation, in that case I think it was a liquidator, where the liquidator is the claimant, in effect, and brings people to the court, strangers to the court.
MR JUSTICE MORGAN: Yes.
MR SINCLAIR: In which case they are… should be made liable for the costs of those strangers who, when they win on applications, as opposed to a situation where they liquidator is a defendant.
MR JUSTICE MORGAN: Yes.
MR SINCLAIR: And you made the point My Lord at paragraphs 34 onwards that that was the distinguishing feature and that the position in paragraphs 35, 36 went on to say that the costs should follow the event in the normal way and the person who should pay should be the receivers.
MR JUSTICE MORGAN: Right.
MR SINCLAIR: And not the estate. My Lord, that is an appropriate order here, not just because it follows what Your Lordship said last time, but because they have made the choice in their role as receivers, to bring this application. They need to decide whether it is appropriate to bring an application against Streathers. They brought it and they have failed to achieve what they wanted to achieve and my client… certainly it would be no compensation for them to be paid the costs from the estate, because they may never receive it or they may never receive a share one day in the distant future. They should be paid their costs and maybe the receivers can then apply from the estate. We are indifferent on that question. So yes, unless I can assist further?
MR JUSTICE MORGAN: Right. Mr Atherton, this is I think for you to deal with.
MR ATHERTON. My Lord, if I was going to be rude about my learned friend’s submissions I would say and I am going to be, that he gives himself far too much credit for a determination which Your Lordship has made. Your Lordship has essentially determined that the basis upon which… or the information which would be obtainable is unlikely, on the basis of the information Your Lordship has, to materially prove the nature of the determination or the ability of this court to make the determination which it may need to make, in relation to solvency or insolvency.
MR JUSTICE MORGAN: Yes.
MR ATHERTON: This application was not, in the sense that my learned friend tries to portray it, adversarial. The receivers came to Your Lordship in October to indicate to Your Lordship that the difficulties that they had, because of the previous orders -
MR JUSTICE MORGAN: Yes.
MR ATHERTON: - the difficulties they found themselves in, in relation to documents which they had in their possession, and the fact that there was information which would be available and which the suggested cause, which predicated this application, would solve.
MR JUSTICE MORGAN: Yes.
MR ATHERTON: And all that has happened is Your Lordship has concluded that actually, the solution will not actually provide a solution to the difficulties that the court will face. Now, the circumstances are such that until yesterday, and yesterday afternoon, Streathers were neutral and not opposing this application. And they were sent a draft of the application on the 8th November. The points that my learned friend made today, good or bad, could have been made much earlier and either determined on a consensual basis or led to the conclusion that the receivers in fact did not need to make this application at all. But in fact, it was the receivers who were drawn into court by the fact that Streathers were, until yesterday, not opposing the application.
MR JUSTICE MORGAN: Do I have the correspondence? Maybe I do.
MR ATHERTON: Well, I think -
MR JUSTICE MORGAN: Am I up to date?
MR ATHERTON: The best I can do -
MR JUSTICE MORGAN: Yes.
MR ATHERTON: - is if I can take Your Lordship to -
MR JUSTICE MORGAN: [Inaudible].
MR ATHERTON: If you have Mr Wood’s -
MR JUSTICE MORGAN: - November.
MR ATHERTON: - witness statement -
MR JUSTICE MORGAN: Yes.
MR ATHERTON: - in the first instance I mean, My Lord.
MR JUSTICE MORGAN: Yes.
MR ATHERTON: And Streathers are dealt with in paragraph 11 to 13.
MR JUSTICE MORGAN: Yes.
MR ATHERTON: So they wrote to Streathers on the 3rd May. There was then a reply on the 20th June. I think I will take you to that because that formed the basis of some of my learned friend’s submissions. And that is at page 17.
MR JUSTICE MORGAN: That is page 29 of the bundle. Yes, 20th July -
MR ATHERTON: You are there before me, My Lord. Sorry, if we could go to page 15, this is the letter of the 3rd May. This was said to be indicative of the fact that the receivers were in the pocket of Aeroflot. Let us just look at in fact what it says. It says that, ‘Mr Hellard[?] and Mr Wood were appointed as receivers Forus Group legal proceedings. I understand that the deceased, together with Forus Group, were defendants against litigation brought by Aeroflot and that your firm acted for the defendants.’ So that is the accreditation.
MR JUSTICE MORGAN: Yes.
MR ATHERTON: ‘I should be grateful if you could provide me with the following information, confirmation of whether you acted for the deceased or the Forus Group, a summary of the matters where you have acted on behalf of the deceased, a schedule of the files, a copy of the client ledger, confirmation of your-’
MR JUSTICE MORGAN: I am familiar with that. It refers to the deceased.
MR ATHERTON: Yes and assets of the deceased, liability of the deceased. It is nothing to do with Aeroflot.
MR JUSTICE MORGAN: Yes.
MR ATHERTON: That request is made and then it is answered on the 20th June and then there is a list, which I have alluded to, of the information which is available. And at page 31 it said, and again I refer to this, ‘Unpaid fees of £6,600, work in progress of £1,500, disbursement of counsel and we have it on account, which would be subject to leave, £3,300.
MR JUSTICE MORGAN: Yes.
MR ATHERTON: The first time in Mr Lindley’s affidavit we have reference to £20,000, which of course puts a fundamentally different complexion on whether or not the receivers are going to ask for the documentation.
MR JUSTICE MORGAN: Yes. What is the date of his witness statement?
MR ATHERTON: 16th December, My Lord.
MR JUSTICE MORGAN: Given it today.
MR ATHERTON: Yes, it was -
MR JUSTICE MORGAN: Monday.
MR ATHERTON: Yes. Then there is a request of the receivers as to whether or not, if they were to pay Streathers’ costs, on the understanding which they had at the time, namely take the £3,000 in the account -
MR JUSTICE MORGAN: Yes.
MR ATHERTON: The balance could be paid. Will you provide the receivers with the information? To which the response is, could we have copies of the additional orders.
MR JUSTICE MORGAN: Right.
MR ATHERTON: Then, on the 8th December -
MR JUSTICE MORGAN: 8th November -
MR ATHERTON: - 8th November at page 52 of the exhibit 64.
MR JUSTICE MORGAN: Yes, thank you.
MR ATHERTON: We make plain that what we are seeking to do is apply to the court. That is not intended to be… to [inaudible] certain limitations, reference specifically to privilege.
MR JUSTICE MORGAN: Yes.
MR ATHERTON: ‘We have therefore prepared the enclosed application and intend to issue it next week. However, bearing in mind the previous cooperative stance you have adopted towards the proceedings, they do not wish the issuance of services application to be perceived as hostile. We would also invite you to confirm whether you support the application for a limited grant and representation. You may want to review the files. If you are able to give such confirmation, the joint receivers will explain your position to the court, in order to spare you the need to attend court if you considered it appropriate.’ And then if you go to paragraph 34 -
MR JUSTICE MORGAN: Of the… ?
MR ATHERTON: Of the witness statement. Sorry, 33.
MR JUSTICE MORGAN: Yes, I have got it.
MR ATHERTON: ‘The receivers intend this application and make the application to permit them, if they think it appropriate, to approach Streathers and/or AFP and Mr Cotlick, to request further documents.’ And then 34, ‘For the court’s information, correspondence [which may appear for?] Mr Cotlick is attached.’ Their position is neutral, may further be described as neutral, ‘Although there was no written confirmation of Streathers’ position, [inaudible] have spoken with Streathers and can confirm their attitude to the application is also neutral.’ That was the position until yesterday, bearing in mind that many of the points that were taken my learned friend acknowledged, it really was not for Streathers to take. They were made nonetheless and that is fair enough, but the fact of the matter is they were not drawn here as a stranger. They were drawn here, or asked to provide information, on the basis of which the application proceeded. And until yesterday, the receivers were under the impression first, that they had no opposition and secondly, specifically in relation to the lien, it would be a relatively small amount which could be paid and which would then be entitled or enabled the release of such documents as the receivers requested. That is not what happened and it only became apparent there was a much greater amount of money due yesterday, which plainly bears on the question of a cost benefit analysis.
MR JUSTICE MORGAN: You issued your application on the 22nd November.
MR ATHERTON: That is right.
MR JUSTICE MORGAN: I see there was an appointment fixed on the 28th November.
MR ATHERTON: That was to deal with expedition.
MR JUSTICE MORGAN: Right. Did you serve it on Streathers around the 22nd?
MR ATHERTON: Yes, it was served on the 22nd.
MR JUSTICE MORGAN: You are -
MR ATHERTON: But with no reaction.
MR JUSTICE MORGAN: - it takes one up to the 19th November I think, which is the date of the exhibit. Was there anything, any correspondence I need to know about following service of the application, or was there simply no communication until the witness statement arrived?
MR ATHERTON: There was nothing. Other than the acceptance by Streathers and the phone call referred to by Mr Wood that there was no opposition, or neutral.
MR JUSTICE MORGAN: that is what he says in the passage -
MR ATHERTON: That is in paragraph 34.
MR JUSTICE MORGAN: 34.
MR ATHERTON: There is no written confirmation of that.
MR JUSTICE MORGAN: Right. All right, well that being the version you would like me to proceed on, what do you say is the appropriate order?
MR ATHERTON: In my submission, Streathers should bear their own costs. As Your Lordship has seen from the letter, we made it plain that it was not intended to be adversarial in the letter of the 8th. We were providing the application for their information, that it would not be necessary for them to attend court if they agreed that they were not opposing or they were neutral and that was certainly not just the impression, but the statement of position as communicated to my instructing solicitors.
MR JUSTICE MORGAN: What about the authorities that Mr Sinclair refers to? He refers to [inaudible]. What I was thinking was I was applying the earlier decision Re Wilson Lovatt.
MR ATHERTON: But that was in… the application of that decision was specific to the circumstances -
MR JUSTICE MORGAN: Yes.
MR ATHERTON: - that Your Lordship held prevailed in the June circumstances. And you did make a criticism of the way that the receivers had proceeded.
MR JUSTICE MORGAN: Well, that was as to whether you should be indemnified. If I agree 26 to 36 which are under the heading, orders for costs against receivers, there was some discussion about [inaudible] -
MR ATHERTON: Yes.
MR JUSTICE MORGAN: - which does refer to misconduct and then at 33, I refer to your submissions which, as always, were extremely helpful -
MR ATHERTON: But not persuasive.
MR JUSTICE MORGAN: They thoroughly persuaded me to apply the authority of Wilson Lovatt and I took from Wilson Lovatt, rightly or wrongly, that if [inaudible] brings in a third party and, seeks relief against the third party and the third party prevails, Grant Thornton does not get the order sought, then [inaudible] or not this order of the third party and Grant Thornton should pay the third party’s costs. That seems to be what was said by Mr Justice Oliver and I could see no reason not to apply it. Then I turn, as I remember it, whether you should be indemnified -
MR ATHERTON: That is right.
MR JUSTICE MORGAN: - and I took a different view as to part of the costs. The application by AAG[?] is at paragraph 40, is it not?
MR ATHERTON: Yes.
MR JUSTICE MORGAN: Onwards. Obviously if they took bad points or if they acted unreasonably or 101 other reasons why one does not give a party its costs, they did not seem to arise therefore, applying the Wilson Lovatt, you need to pay their costs. That seems to have been the reasoning.
MR ATHERTON: Yes, My Lord but the circumstances are very different here.
MR JUSTICE MORGAN: Oh, well -
MR ATHERTON: We have a situation where a draft application is sent to Streathers.
MR JUSTICE MORGAN: Yes.
MR ATHERTON: They are told the purpose of the application. It is not intended to be adversarial -
MR JUSTICE MORGAN: Yes.
MR ATHERTON: - it is intended to be enabling and the response is, they are neutral.
MR JUSTICE MORGAN: Yes.
MR ATHERTON: And nothing is heard thereafter. The 22nd it is served with all the evidence. The receivers are entitled to assume that no point is taken.
MR JUSTICE MORGAN: Yes.
MR ATHERTON: The first point was raised yesterday. If these points had been raised on the 8th and, for example, the receivers had been told and by the way, it is going to cost you £26,000 or £30,000 to get the documents -
MR JUSTICE MORGAN: Yes.
MR ATHERTON: - the receivers might not have made the application, as far as Streathers were concerned -
MR JUSTICE MORGAN: Yes.
MR ATHERTON: - but continued to conduct some sort of discourse with them, as to what the appropriate process may be.
MR JUSTICE MORGAN: Yes.
MR ATHERTON: That is what I mean. What has happened is, the receivers have been drawn into this application, quite unmeritoriously, and it does [fly ill in the mouth?] of my learned friend for him to say that they have been engaged in this as strangers and drawn into court, dragged kicking and screaming. The first I heard they were turning up was yesterday. In fact, it got to the stage where I had to find out who Mr Sinclair was acting for -
MR JUSTICE MORGAN: Yes.
MR ATHERTON: - because I had no idea.
MR JUSTICE MORGAN: Yes.
MR ATHERTON: So, in those circumstances it would be quite inappropriate for the estate or the receivers to bear the burden of the costs and Streathers, who have chosen to attend today, notwithstanding the imposition they previously adopted, should bear their own costs.
MR JUSTICE MORGAN: Right. Well I think Mr Sinclair can reply to that.
MR SINCLAIR: Yes. My Lord, the first thing to say is that, as my learned friend’s solicitors at least know, Mr Lancashire who is the litigation partner at Streathers in charge of this matter, has… unfortunately his father-in-law died in distressing circumstances and he has been away for two weeks. I am sure his solicitors know that. I do not know whether my learned friend knows that. My Lord, the second point to make is that what my learned friend says, if he thinks we have changed our stance, first I would submit we have not particularly changed our stance. I made it clear I think that I was neutral of the principal. I had observations to make just because we have obligations with regard to privilege. We were never going to be neutral on the practicalities of this. We were always going to be asking for our costs of the exercise and making comments on the scale. So to the extent we were saying we were neutral, we were saying well, it is indifferent to us in the sense where the privilege is, which is the stance that I have maintained and I hope I made that clear. My Lord, the third point to make is what my learned friend says would have more force if when he read my skeleton, which he says was a sudden realisation of our change of position, then he then said ah, well now I see that, I withdraw the application against you. But he did not do that at all. He saw my skeleton and he fought on hard against me and against the evidence that Mr Lindley produced to explain why this was disproportionate and he lost. So he made that choice to keep going and he lost. And My Lord, the last point I would make is my learned friend says I give myself too much credit for the outcome of this hearing. Well, if I can refer Your Lordship to my skeleton argument, paragraph 20 I say it is exceedingly doubtful that the vast array of documents arising in this litigation that are held by Streathers will have any significant amount of evidence on the question of the estate’s assets and liabilities. The receivers need to explain more clearly why documents arising out of the conduct and preparation of those actions are likely to be relevant and whether this is likely to be proportionate to the amount of work that will be created. Now, Your Lordship did not accept all the points that I made but I believe that you certainly accepted that. Indeed, that was the basis of Your Lordship’s decision. So I would say it is appropriate for us to have our costs, all of our costs of today. They are modest. In the other case Your Lordship says he was not able to assess them and said that he would only assess a modest amount of costs for AG[?].
MR JUSTICE MORGAN: Yes.
MR SINCLAIR: They turned up I think with a silk and a junior and all sorts.
MR JUSTICE MORGAN: Yes.
MR SINCLAIR: We have run this modestly and I resubmit we should not be out of pocket in this application.
MR JUSTICE MORGAN: Right. In view of the arguments backwards and forwards in relation to Streathers’ costs, I have had regard to the correspondence, the fact that the receivers believed for some time that the matter was not contentious and Streathers were neutral. I then had regard to the content of the witness statement of Mr Lindley and the date it was served. I have also had regard to the content of the skeleton argument of Mr Sinclair, on behalf of Streathers. I also had regard to the reasons that persuaded me to reach the result I reached. I have also had regard to the statements of principle from Wilson Lovatt, Oliver J,[1977] 1All E R 274, a decision which I applied in an earlier round of applications in this present litigation. I am satisfied that the right order to do justice between the parties is that the receivers will pay one half of Streathers’ costs of the witness statement and of the appearance today. It remains to be considered whether the receivers should be indemnified against that order out of the assets of the estate. I am not dealing with that at the moment, so as between the receivers and Streathers, it is one half of the witness statement and one half of the costs of attendance today. Now, do you want a summary assessment Mr Sinclair?
MR SINCLAIR: I would ask for that. It should be easily done I think.
MR JUSTICE MORGAN: Yes and you will give me a statement.
MR ATHERTON: We have not received that, My Lord.
MR JUSTICE MORGAN: Well, I can say there is to be a detailed assessment if you wish, on the grounds you have not had it or, with a view to saving everyone trouble and expenses, I will do the best I can. Is there a charge one sees for the witness statements?
MR SINCLAIR: Yes, My Lord. It is on the last page.
MR JUSTICE MORGAN: Right. Oh yes, in a separate [inaudible] documents. So the witness statement is £2,000.
MR SINCLAIR: Yes, plus item five as well.
MR JUSTICE MORGAN: And £2,265 in total. Right and -
MR SINCLAIR: Then -
MR JUSTICE MORGAN: - then the hearing bundle is referred to and then your attendance is a separate disbursement is it?
MR SINCLAIR: Yes, it is all… yes.
MR JUSTICE MORGAN: Where is that?
MR SINCLAIR: The penultimate page.
MR JUSTICE MORGAN: Oh yes. Yes, right.
MR SINCLAIR: And then the second page is also my instructing solicitors’ attendance today.
MR JUSTICE MORGAN: Yes. So from the last page [inaudible] the last page, you say that the relevant figures will be £2,000, £265 for today, £1,000 plus £13,250 and going back, attendance at hearing, £1,000, that is on a two hour estimate and then your fee, £4,250.
MR SINCLAIR: Yes.
MR JUSTICE MORGAN: So doing a very rough tot, £4,568 and a half plus… is that right. All right and your bill comes to £15,180, right. Mr Atherton, do you want to say anything about the statement of costs or summary of costs?
MR ATHERTON: No. It is what it is, My Lord.
MR JUSTICE MORGAN: Right. Well, do you accept a figure of £8,500 or do you say I should start there and work downwards?
MR ATHERTON: Well, Your Lordship has already indicated what -
MR JUSTICE MORGAN: Yes -
MR ATHERTON: - percentage -
MR JUSTICE MORGAN: - but these are solicitor and client costs. These are indemnity costs, not standard basis. I have to consider reasonableness and I have to consider proportionality. I was going to work down from £8,500, unless you tell me I am must [inaudible] 5.27.48.
MR ATHERTON: Well, on a standard basis they should only be required to recover at least two-thirds maximum of that.
MR JUSTICE MORGAN: Right.
MR ATHERTON: And then it would be half of that.
MR JUSTICE MORGAN: Well the half is an interim payment. This is a final assessment.
MR ATHERTON: But Your Lordship indicated -
MR JUSTICE MORGAN: Oh I see what you mean. Well, yes I thought the half, yes, quite right.
MR ATHERTON: And then all I can say is that on a standard basis there would be a two-thirds proportion.
MR JUSTICE MORGAN: Right.
MR ATHERTON: Not the whole amount. I cannot be any more specific on that.
MR JUSTICE MORGAN: No, [inaudible]. Mr Sinclair, is there anything you want to add? What I am asked to do is take a figure of about £8,500, you want two-thirds of it on the standard basis and then by half would give you one-third base payment. My Lord, I would say that these costs are reasonable. I think to suggest that we only get two-thirds of assessment seems unlikely, in my submission. For example, the attendance today has been only been for two hours and it has been more like six.
MR ATHERTON: Well in fact, my application was finished before lunchtime. So it was within the two hours.
MR JUSTICE MORGAN: I have got the papers.
MR SINCLAIR: Yes, My Lord.
MR JUSTICE MORGAN: Right. I will assess the costs before I do my 50% apportionment. Assess in the sum of £6,000, of which I will then award 50% which is £3,000. That is the sum to be paid by the receivers to Streathers and, as I say, I will consider later an indemnity out of the estate.
MR SINCLAIR: Yes, in 14 days.
MR JUSTICE MORGAN: I will see if there is any application to extend time. It is 14 days unless I extent the time for payment. It sounds about New Year’s Eve at that rate -
MR SINCLAIR: Excellent.
MR JUSTICE MORGAN: - for payment. I might, even judges know that this is Christmas, I might give another 10 days or so for the whole festive period.
MR ATHERTON: I was going to say 21 days, which takes us beyond New Year.
MR JUSTICE MORGAN: All right. So 21 days, you cannot resist Mr Sinclair.
MR SINCLAIR: My Lord -
MR JUSTICE MORGAN: 21 days for payment. Right, what other matters arise in relation to costs?
MR ATHERTON: My Lord, I would ask for the receiver’s costs of their application to be paid by the estate on the usual basis and that they be indemnified in relation to the costs that you have just ordered from the estate.
MR JUSTICE MORGAN: Right. Is there anyone present who has interest to say anything about that or wishes to say anything about that? I am minded to make that order, without any indication. I think it is consistent with the tenor of the reasons I gave, we are not critical of the receivers. Right, so I will say that the receivers costs of their application should be paid out the estate and the receiver should be indemnified against the £3,000 order I have made in favour of Streathers. Are there any other applications?
MISS FORD: Yes, My Lord. I would also ask that my client’s costs of today be paid out of the estate. First of all, in respect of the receiver’s application, both the witness statement and the draft order prepared by the receiver anticipate that both Miss Berezovskaya would be represented today and she would make representations which we have done. So we would ask for those costs to be paid out of the estate. And in terms of our own application, up until the very start of the hearing today we were under the impression from correspondence from the receivers that they agreed that an order should be made and there was a question as to the scope. Further, up until very late yesterday, we had not had the updated information and the statement of affairs. And, as I say, the receivers are saying not only that they would give us information but also importantly, that in their view a court sanction of an agreement reached us to sharing of information would be appropriate and so on that basis, our application and coming here today is, we say, entirely proper. The statement of affairs has, it seems to be me, has been a relatively large part of Your Lordship’s reasoning, in that it has provided us with updated information and has been significantly updated since the August report. Miss Berezovskaya brings her application today as administrator of the estate and, of course, the normal rule there is that she should only be deprived of her indemnity against the estate if she has acted unreasonably. We say that she is simply trying to obtain information to which she is entitled under the 4th September order. She was appointed, as I say, on the 4th September but, to date, has not been provided with any extra information by the receivers, despite their protestations today that they will provide the unredacted reports, for which are very grateful and we do look forward to receiving those. But for all of those reasons, we say that the normal rule, when a person applies and in fact a representative of an estate should apply and we should be entitled to costs out of the estate. The new part of the White Book which deals with that is new rule 46.3
MR JUSTICE MORGAN: Right.
MISS FORD: Which is page 210 of the -
MR JUSTICE MORGAN: Is it the 2013 supplement?
MISS FORD: Yes. No, October 2013 supplement, page 210.
MR JUSTICE MORGAN: Yes.
MISS FORD: ‘This rule applies where a person is or has been a party to any proceedings in the capacity of trustee or personal representative. Rule 44 [inaudible] does not apply. The general rule is that that person is entitled to be paid costs of those proceedings, insofar as they are not recoverable from or paid by any other person out of the relevant trust fund or estate and those costs be assessed on an indemnity basis.’ Williams Mortimer & Sunnucks again makes it plain that if they had acted reasonably and representative it is not [inaudible] costs from the estates and that is paragraph 68.02, ‘The charges and expenses of extension of the trust deeds are not cost instanced to proceedings in the High Court and not within the discretion of the court, unless misconduct is proven.’
MR JUSTICE MORGAN: Right.
MISS FORD: And we say that that situation is very far from that applying. Today we were simply making what we consider to be a proper application in order to try and get some extra information from the receivers. Indeed, the concession made today from the receivers that they will provide us with unredacted reports is something that frankly has not been entirely clear from the previous correspondence. And so on that basis My Lord, I do ask for Miss Berezovskaya’s costs of both applications today be paid from the estate in the usual way.
MR JUSTICE MORGAN: I touched on this in the Gorbunova decision on costs and dealing with the receiver’s right to an indemnity, I referred to the decision which referred to expenses properly incurred.
MISS FORD: Yes.
MR JUSTICE MORGAN: And I drew attention I think to lien[?] on trusts. And -
MISS FORD: Yes.
MR JUSTICE MORGAN: - and the Trustee Act.
MISS FORD: Yes.
MR JUSTICE MORGAN: And the word properly was not listed.
MISS FORD: I quite accept that the word properly is -
MR JUSTICE MORGAN: Yes. I think that is the point you are making.
MISS FORD: Yes.
MR JUSTICE MORGAN: Yes.
MISS FORD: And I say that the costs are properly incurred.
MR JUSTICE MORGAN: Yes. Mr Atherton, do you have a position on this?
MR ATHERTON: I think the first point is to clarify the position of the receivers -
MR JUSTICE MORGAN: Yes.
MR ATHERTON: - was they have maintained throughout that Miss Berezovskaya was not entitled to the relief she was seeking. The observations made by me today, consistent with the correspondence that went previously, was that insofar as there was no entitlement therefore any provision of information had to be on a reciprocal basis. And that was the comment thrust throughout. My own position is that, in terms of the receiver’s costs, or dealing with Miss Berezovskaya’s application, they should be paid for by the estate as the cost of receivership. Now I could, I think legitimately, seek to recover my costs from Miss Berezovskaya on the usual basis but I do not think that is appropriate in the circumstances. And I do not think it makes for conducive relations going forward, so I do not object to my learned friend’s application that she have her costs of the application from out of the estate. As far as dealing with the costs of the receiver’s application -
MR JUSTICE MORGAN: Yes.
MR ATHERTON: - it was anticipated that Miss Berezovskaya would attend -
MR JUSTICE MORGAN: Yes.
MR ATHERTON: - albeit the stance was rather different than I anticipated.
MR JUSTICE MORGAN: I think when I made the order in October that you have permission to do certain things
MR ATHERTON: They had to -
MR JUSTICE MORGAN: - you should serve them on.
MR ATHERTON: - absolutely.
MR JUSTICE MORGAN: Yes. Right and do you accept that on your application, she recover her costs from the estate?
MR ATHERTON: That is right.
MR JUSTICE MORGAN: And then on her application you say the receivers and Miss Berezovskaya should have costs out of the estate.
MR ATHERTON: That is right.
MR JUSTICE MORGAN: Right. Well then there is no contention I think. I have dealt with Streathers’ costs. I have dealt with the receiver’s costs of the receiver’s application. I now need to deal with Miss Berezovskaya’s costs of the receiver’s application. I will direct that Miss Berezovskaya should have her costs of the receiver’s application out of the estate. Turning to Miss Berezovskaya’s application, I am happy to proceed on the basis of what appears to be a consensus that both Miss Berezovskaya and the receivers should have their costs of that application out of the estate. I have made that order.
MISS FORD: I am grateful, My Lord.
MR JUSTICE MORGAN: Right, is there any other matter?
MR ATHERTON: The only other matter is whether or not Mr Cotlick has incurred any costs and whether or not he should be entitled to them and on what basis.
MR COTLICK: I am happy to let the court decide.
MR JUSTICE MORGAN: You are happy to… ?
MR COTLICK: To let the court decide.
MR JUSTICE MORGAN: Well -
MR COTLICK: My position, as Your Lordship knows, was that I was agreeing to the application.
MR JUSTICE MORGAN: I think unless you press me Mr Cotlick to order somebody to pay you something, I simply leave matters where they are.
MR COTLICK: I will not press.
MR JUSTICE MORGAN: No. Well, that is I think handsome and appreciated, I am sure by the estate and I will not add anything to that. As to Friday’s hearing, I am not going to discuss any matter of substance because an important party is not here, but I do not know if time will permit but I think I can indicate the judicial willingness to case manage the Part 8 claim. Now it may be that those who are not intending to turn up will still not turn up because they will simply leave it to the parties and to the court to make appropriate case management directions. I suppose if I make case management directions which had implications for those not attending, I could always give them permission to apply for any orders charged within a certain period. I am not keen to have people turn up unnecessarily. Is that a convenient course?
MR ATHERTON: Yes, My Lord. I think as far as the receiver is concerned, we have already written or we are in the process of writing
MR JUSTICE MORGAN: Right.
MR ATHERTON: - simply saying that we are not proposing to attend.
MR JUSTICE MORGAN: Right.
MR ATHERTON: But indicating how we would wish to be accommodated in any directions that were made.
MR JUSTICE MORGAN: All right. Well, no doubt that will be drawn to my attention when I deal with the matter on Friday. Good, well that completes it for today. Thank you all very much.
Court rises.