Gayle-Childs v HM Treasury

I have before me six claims brought by Mr Leslie Gayle-Childs. In alphabetical order, the defendants are named as: Ashton Global Investments Limited, the City of London Corporation, the European Union, HM Treasury, Mr Mohammed Hussein, the Libyan Investment Authority, Mr Harun Miah and Mr Antony Yallop.

I have heard cases involving Mr Gayle-Childs on a previous occasion: on 14 January 2013. At that hearing, I struck out two sets of proceedings that Mr Gayle-Childs had issued and made a general civil restraint order (or “CRO”) against him for the maximum period of two years. As I noted in that judgment, His Honour Judge Mitchell had previously made such an order against Mr Gayle-Childs on 24 August 2010, in the Central London County Court.

Later in 2013, Mr Gayle-Childs was convicted of offences of dishonesty and sentenced to 12 years’ imprisonment. He remains in prison. I gather that he has recently been moved from Lowdham Grange Prison to Bullingdon Prison.

The CRO that I made in January 2013 expired in January of this year. Since then, Mr Gayle-Childs has issued a variety of new claims in the County Court. On 16 April, I gave directions for five of these claims to be transferred to the High Court and for there to be a hearing to consider whether the claims should be struck out and a further CRO made against Mr Gayle-Childs. A sixth claim, that against the European Union, was transferred to the High Court by Deputy District Judge Pickup on 4 June, and on 15 June I ordered that it should be listed for hearing with the other five claims to consider whether it, too, should be struck out and, again, whether a CRO should be made against Mr Gayle-Childs.

Mr Gayle-Childs is not present today. He is, as I have said, a prisoner, but I understand that he could have applied to be brought to Court for this hearing. I have no evidence that any such application has been made, let alone that one has been refused, despite the fact that Mr Gayle-Childs has (as I understand it) had plenty of notice of the hearing. I gather that Mr Gayle-Childs suggested to my clerk in a telephone call this morning that I should have made arrangements for him to be brought to Court, but I was never asked to take any steps of that kind. In all the circumstances, I have considered it appropriate to proceed in Mr Gayle-Childs’ absence.

It is convenient to consider first the claim against the Treasury. This is stated to be for “tortious interference with contractual relations and defamation”. The particulars of claim assert:

“On or before 11 July 2013 the claimant’s predecessor confirmed that the defendant falsely published false and defamatory information to cause reputational harm and acquiesce without lawful authority to dispose of a substantial United Kingdom asset to Capitana Seas Ltd … pertaining to a request by Mr Justice Popplewell on 9 March 2012 whilst sitting at the Commercial Court after failing to carry out the checks of the directors and the beneficiaries that such an organisation would undertake.”

Mr Gayle-Childs claims to have been assigned the right to pursue the claim by Capitana Seas Limited, a British Virgin Islands company. The amount claimed is put at £23,352,426.52.

I have been helped to understand what the claim relates to by a witness statement made by Mr Stephen Cromie of the Government Legal Service. The focus of the proceedings appears to be a list of “financial sanctions targets in the UK” published by the Treasury (which I shall call “the Targets List”). The list includes Capitana Seas.

As Mr Cromie has explained, the Targets List comprises individuals and entities that feature in the Annexes to Council Regulation (EU) No 204/2011, on the basis of United Nations or European Union sanctions. The European Union imposed sanctions on various people (including corporate entities) with links to the Gaddafi regime in Libya in March 2011. Capitana Seas was added to the list of legal persons so affected to be found in Annex III of Regulation 204/2011 by Council Implementing Regulation (EU) No 360/2011 on the basis that it was a “BVI-incorporated entity owned by Saadi Qadhafi”.

Regulation 204/2011 was stated to be directly applicable in all EU Member States and thus required no domestic legislation to give effect to it. As mandated by Article 17 of the Regulation, however, the United Kingdom established a penalty regime by means of The Libya (Asset-Freezing) Regulations 2011, which were later amended by The Libya (Asset-Freezing Amendment) Regulations 2011.

Capitana Seas’ entry on the Targets List reads as follows:

“Organisation Name: CAPITANA SEAS LIMITED

Other Information: EU listing. Not UN. BVI-incorporated entity owned by Saadi Qadhafi. Listed on: 14/04/2011 Last Updated: 25/06/2014 Group ID: 11768.”

As has been pointed out by Miss Margaret Gray, who appears for the Treasury, this entry substantially reproduces, and adds nothing of any significance to, the listing in Regulation 204/2011. In fact, Annex III of Regulation 204/2011 contains slightly more information.

In my view, the claims that Mr Gayle-Childs has advanced against the Treasury are hopeless. A fundamental problem with the proceedings is that Mr Gayle-Childs is in effect challenging the validity of Regulation 204/2011 in so far as it affects Capitana Seas. After all, the entry for Capitana Seas in the Targets List merely reflects, as I have said, the Regulation. The United Kingdom Courts, however, have no jurisdiction to consider the validity of such an instrument. Any attack on it would have to be mounted by submitting observations to the Council or by way of action in the General Court.

Aside from that central flaw in the proceedings, there are more specific ones. In so far as Mr Gayle-Childs is alleging that the inclusion of Capitana Seas in the Targets List was defamatory, there appears to be a clear limitation defence, having regard to section 4A of the Limitation Act 1980 and section 8 of the Defamation Act 2013. In any case, the Targets List must, as it seems to me, be the subject of qualified privilege, and Mr Gayle-Childs has not alleged malice. Nor, on the face of it, could he properly do so.

Turning to the claim for “tortious interference with contractual relations”, Mr Gayle-Childs has not identified any relevant contract. Breach of contract is an essential ingredient of the tort of procuring a breach of contract, yet the particulars of claim do not specify any such breach or, indeed, contract. Nor was any material contract identified in the pre-action correspondence that took place with MSL Management Limited and of which there is mention in paragraph 6 of the particulars of claim. I might add that that correspondence raises questions as to whether Mr Gayle-Childs may have breached the directors’ disqualification order that, I believe, was made following his conviction in 2013.

In all the circumstances, it seems to me that Mr Gayle-Childs’ proceedings against the Treasury should be struck out. I shall further record that I consider them to be totally without merit.

The claim against the European Union has its origins in the same events.

The claim form alleges that the European Union “infringed the equitable rights of the shareholders of Capitana Seas Limited by falsely stating that Saadi Qadhafi was the owner and a beneficiary of Capitana Seas Limited and falsely published the falsity to induce a third party to cause substantial loss to the shareholders and beneficiaries”. The particulars of claim assert that the European Union “in drafting EU Regulation 204/2011 was totally misconceived in including CSL [i.e. Capitana Seas] into the annexes that froze all listed assets of which relevant Member States such as the United Kingdom pursuant to Regulation (SI 2011/605) which could enforce or impose criminal penalties for any breach”. The particulars of claim go on to seek £23,893,238 for “tortious interference with business relations and contractual relations”.

On 4 June 2015, as I have mentioned, Deputy District Judge Pickup ordered the claim to be transferred to the High Court. Mr Gayle-Childs responded by issuing an application for the order to be set aside and the matter transferred to Nottingham County Court. On 30 June, however, the European Commission Representation in the UK filed an acknowledgment of service in which it indicated that it intended to contest jurisdiction. It has since filed an application notice dated 8 July in which it asks for an order declaring that the Court has no jurisdiction. The witness statement in support of the application argues that the only Court with jurisdiction over the claim would be the Court of Justice of the European Union. It also refers to related proceedings that were brought against the European Union last year in the Northampton County Court. In these, too, damages were sought for the alleged publication of false and defamatory information about Capitana Seas. The claimant was named as a Mr Donald Chambers, but Mr Gayle-Childs was permitted to assist Mr Chambers by telephone at a hearing that took place on 20 April of this year. On that occasion, Deputy District Judge Carter held that the Court had no jurisdiction and dismissed the claim.

Within a fortnight, the European Union received via the solicitors who had acted for them in the Chambers proceedings a letter before claim from Mr Gayle-Childs. The claim form that is now before me followed. Just as, however, the Courts of England and Wales lacked jurisdiction in respect of the Chambers claim, they have no jurisdiction to entertain the present claim. Having regard to Articles 268 and 340(2) of the Treaty on the Functioning of the European Union, the Court of Justice of the European Union has exclusive jurisdiction in relation to matters concerning the non-contractual liability of the Union and its Institutions. I would add that there can be no question of this Court having jurisdiction on the footing (as is suggested in the particulars of claim) that the proceedings “have as their object in rem in immovable property”. Apart from anything else, what Mr Gayle-Childs seeks is damages for loss that he claims to have suffered.

In the circumstances, I shall, as asked, grant a declaration that the Courts of England and Wales lack jurisdiction and strike out the claim. I shall, moreover, record that I consider the claim to be totally without merit, the more so given that, by the time it was issued, Mr Gayle-Childs will have known of the dismissal of the Chambers proceedings.

I turn now to the claim that Mr Gayle-Childs has brought against Ashton Global Investments Limited (which I shall call “Ashton”). The particulars of claim in these proceedings allege that Ashton defaulted on a loan from the Ramis Fund, a Cayman Islands subsidiary of Churwitz Stanford AG Holdings Limited. The Ramis Fund is said to have assigned all its rights to Mr Gayle-Childs. On this basis, he claims to be owed £200 million plus interest.

Mr Gayle-Childs’ claim was purportedly admitted in its entirety by “Paine Crow and Partners” on Ashton’s behalf on 31 March 2015. Relying on that document, Mr Gayle-Childs applied on 8 April for judgment to be entered in his favour. At the end of May, Mr Gayle-Childs issued an application notice by which he pressed for judgment to be entered. After I had directed him to file any evidence on which he wished to rely to confirm that Paine Crow and Partners acted for Ashton and had admitted the claim on its behalf, Mr Gayle-Childs put in a witness statement dated 25 June in which he explained that Paine Crow and Partners are “financial intermediary brokers based in the Cayman Islands”. He went on to say that Paine Crow and Partners had been granted a power of attorney by a company called Dalia Advisory Limited, which had itself in January 2010 been granted authority to act by “the then director and vice chairman of the Libyan Investment Authority Mustafa Zarti”.

On 8 July 2015, Berwin Leighton Paisner wrote to the Court explaining that they acted for Ashton, which, they said, had known nothing about the proceedings until it received a letter dated 29 April from the Court. The letter further explained that Berwin Leighton Paisner had acted for Ashton in earlier proceedings brought by Mr Gayle-Childs which had been struck out by Master Teverson on 21 July 2011.

I mentioned those earlier proceedings in paragraph 8 of the judgment I gave in January 2013. I also referred in that judgment to Paine Crow and Partners. As I noted in paragraphs 9 and 10 of the judgment, several claims had purportedly been admitted by Paine Crow and Partners. In two of the claims, Allen & Overy subsequently came onto the record as the solicitors for the defendants and obtained an order for the claims to be struck out. A partner in Allen & Overy explained in a witness statement that his clients, who were the Libyan Foreign Investments Company and Libyan Investment Authority, maintained that the claims against them represented frauds perpetrated by Mr Gayle-Childs.

Mr Andrew Rose of Berwin Leighton Paisner appears on behalf of Ashton today. He has told me that Ashton’s position is that it has never authorised Paine Crow and Partners to act for it and has no knowledge of Churwitz Stanford or the Ramis Fund.

In the circumstances, there can, of course, be no question of my acceding to Mr Gayle-Childs’ requests for judgment to be entered in his favour on the strength of the supposed admission of his claim. The right course, I think, is to adjourn Mr Gayle-Childs’ application to a date to be fixed. The applications that Mr Rose told me that he envisages making on behalf of Ashton can be listed to be heard on the same occasion.

Paine Crow and Partners feature again in much the largest of the claims before me, that against the Libyan Investment Authority. In these proceedings, Mr Gayle-Childs claims more than £3 billion. That sum is said to be due on the basis that the Libyan Investment Authority acted as guarantor in relation to a promissory note entered into by the State of Libya in 2011. Mr Gayle-Childs claims as assignee: he says that the right to pursue the claim was assigned to him by DEZ Holdings Limited.

Here, as with Ashton, the claim was purportedly admitted by Paine Crow and Partners. On the strength of that, Mr Gayle-Childs seeks judgment.

On 12 June 2015, I directed Mr Gayle-Childs to file any evidence on which he wished to rely to confirm that Paine Crow and Partners act for the Libyan Investment Authority and had admitted the claim on its behalf. A recital to the order noted that no firm of that name was to be found in the Law Society’s online database and that an entity called Paine Crow and Partners LLP was struck off the register in April 2014. Mr Gayle-Childs has since filed a witness statement in which he makes the same points about Paine Crow and Partners as he made in the Ashton proceedings.

I continue to have grave concerns about whether the Libyan Investment Authority has authorised anyone to admit Mr Gayle-Childs’ claim on its behalf. My misgivings are the greater because, as I have mentioned, in 2012 Allen & Overy obtained an order for the striking out of proceedings against the Libyan Investment Authority that had purportedly been admitted on its behalf by Paine Crow and Partners. Moreover, Mr Gayle-Child’s prison sentence appears to be attributable, at least in part, to an attempt to defraud the Libyan Investment Authority. In the circumstances, I shall adjourn Mr Gayle-Childs’ application for judgment to a date to be fixed and give directions for the Court to send copies of the documents filed in the proceedings, and the orders made in them, to the Libyan Investment Authority care of each of Enyo Law, Hogan Lovells International and Allen and Overy. I am aware that each of these firms has acted for the Authority in other Court proceedings.

The Ashton claim is not the only one to involve Churwitz Stanford AG Holdings Limited. Another claim to do so has as its defendant a Mr Antony Yallop. Mr Yallop is alleged to have defaulted on a £300,000 loan made pursuant to an agreement dated 28 January 2012. Mr Gayle-Childs asserts his claim as assignee of Churwitz Stanford. Somewhat mysteriously, the particulars of claim state:

“The defendant’s drawdown on the loan was transferred by agreement to CLZ and Associates Debt Management Services to settle an outstanding debt.”

On the face of it, Mr Yallop has admitted Mr Gayle-Childs’ claim. An admission form dated 27 March 2015 that seemingly bears Mr Yallop’s signature states that the full amount claimed is admitted and can be paid on that date. On the strength of this document, Mr Gayle-Childs has pressed for judgment to be entered in his favour. In fact, he first requested judgment on 30 March, the next working day after 27 March.

He may prove to be entitled to it. Given, however, what I know of other claims brought by Mr Gayle-Childs, I am wary of taking the admission at face value. The fact that Mr Yallop appears to be a fellow prisoner increases my unease, as does the fact that (to this untrained eye) much of the manuscript on the admission form seems to be in Mr Gayle-Childs’ handwriting.

In the circumstances, the right course, I think, is to adjourn Mr Gayle-Childs’ application for judgment to a date to be fixed, with a direction that he should serve and file by (say) 31 August 2015 a witness statement (a) giving particulars of where Mr Yallop is living and can be contacted, (b) explaining when and how he (Mr Gayle-Childs) received the admission form and (c) exhibiting the assignment referred to in paragraph 2 of the particulars of claim and the contract referred to in paragraph 3 of the particulars of claim.

Another of the claims before me is directed at Mr Harun Miah and Mr Mohammed Hussein. Here again, Mr Gayle-Childs appears to allege default on a loan from Churwitz Stanford. According to Mr Gayle-Childs, Churwitz Stanford has assigned its rights to him. Mr Gayle-Childs claims to be owed £300,000 plus interest.

Mr Miah is today represented by Mr Rana of HSR Solicitors. Mr Rana told me that Mr Miah has no knowledge of the matters referred to in the particulars of claim. There is, however, no evidence to that effect before me. In the circumstances, all I can usefully do, I think, is indicate that it would probably be convenient for any application that Mr Miah may now make to be heard at the same time as the Ashton matter.

The final claim before me is against the City of London Corporation. This alleges loss caused by (to quote from the claim form) “fraud by false representation section 2 and fraud by failing to disclose information section 3 pursuant to the Fraud Act 2006”. Mr Gayle-Childs complains, in particular, about an application made to the Court on the Corporation’s behalf in 2013. Paragraph 3 of the particulars of claim states:

“On 28 February 2013 the defendant’s employee Philip A. Saunders a principle legal assistant, prepared an application to the High Court of Justice, Queen’s Bench Division that contained a series of statements caught by CPR 32.14, in that the application was drafted with the intention to cause loss to the claimant, in so far as, the statements made were reckless, and did not comply with Practice Direction 20.1, the application was made ex parte in order to obtain a stay of proceedings without foundation.”

Mr Gayle-Childs alleges, among other things, that it was falsely stated that he was subject to an extended CRO.

Mr Gayle-Childs has exhibited to a witness statement the document that is said to give rise to his claim. This is an application notice dated 28 February 2013 by which the City of London Police sought a stay. The box on the second page, verified by a statement of truth, contained these words:

“The Claimant is subject to an Extended Civil Restraint Order made on 14 January 2013 … by Mr Justice Newey.

The Claimant has obtained Judgment against the Defendants and issued a Writ of Fieri Facias on 12 February 2013 in breach of the said Extended Civil Restraint Order (copy attached).

The Defendants have not been served with any Claim Form, letter before action or any other papers from the Claimant or the Court other than the papers supplied by the High Court Enforcement Officer.”

In April 2015, the Corporation filed a defence and counterclaim in the present proceedings. The counterclaim asked for an extension of the CRO I made in 2013 or, alternatively, that a new CRO be made. Mr Gayle-Childs responded by issuing an application for the defence and counterclaim to be struck out and summary judgment to be entered in his favour.

The Corporation is represented before me by Miss Rebecca Chan. She submits that Mr Gayle-Childs’ claim should be struck out. I agree. As Miss Chan pointed out, the Fraud Act deals with crime rather than providing for any civil wrong. Even apart from that, however, I cannot see how Mr Gayle-Childs could have any cause of action arising out of the application notice of 28 February 2013 and, on top of that, Mr Gayle-Childs has not explained how the conduct to which he refers can be said to have caused him a loss of income (as he alleges). I would add that, while the application notice may have been inaccurate in referring to an “extended” CRO, the general CRO that I had by then made was more far-reaching.

In all the circumstances, I shall strike out the claim against the Corporation, and Mr Gayle-Childs’ strike-out / summary judgment application will of course fall with it. I shall further record that I consider both that application and the substantive claim to be totally without merit.

The last question that I need to address is whether I should make a further general CRO. I am in no doubt that I should. Practice Direction 3C states that a general CRO may be made where a party “persists in issuing claims or making applications which are totally without merit, in circumstances where an extended civil restraint order would not be sufficient or appropriate”. That is clearly this case. Despite having had general CROs made against him on two previous occasions, Mr Gayle-Childs has this year initiated further proceedings which, as I have said, I consider to be totally without merit. I shall, accordingly, make a general CRO against Mr Gayle-Childs for the maximum period of two years.