JSC Mezhdunarodniy Promyshlenniy Bank & Anor v Pugachev & Ors

The matter I have to address now relates to the proceedings which I have been dealing with for the last while, although I haven't dealt with it for a few days. It is a dispute between Mezhprombank and Sergei Pugachev, and other defendants. The other defendants include the 12th, 13th and 14th defendants, who are children of Mr Sergei Pugachev, by his then partner, Ms Alexandra Tolstoy, their mother, who is their litigation friend. They are young children under 10 years of age. They are named as discretionary beneficiaries in certain discretionary trusts, which are New Zealand trusts, which I am dealing with in this action.

I have received an application, an issued application notice from Ms Julia Pugacheva, who is, as I understand it, the ex-wife of another child of Sergei Pugachev; that is Mr Alexander Pugachev. Mr Sergei Pugachev has two adult children, Victor Pugachev and Alexander Pugachev, and Julia Pugacheva is, as I understand it, the ex-wife of Alexander. The parties will forgive me for using the first names in order to distinguish between different people with the same or similar surnames. She is the mother of two infant children, two daughters, who are both under 15 years of age.

The application seeks to appoint Ms Julia Pugacheva as the litigation friend of her daughters and to join her two daughters as defendants in the proceedings, and seeks an order for financial provision be made for them from the London Residence Trust, which is one of the trusts in these proceedings. Essentially it would put them in a similar position to the position of Ms Alexandra Tolstoy's children in these proceedings.

This application was made extremely late. I heard it briefly about a week ago and said I would hear it for a ten-minute mention today, along with certain other matters which I have yet to deal with.

So far no witness statement or anything of the kind has been served in support of the application. I simply have an application notice which has a brief section 10, which summarises essentially what I have just said, and two letters from the solicitors, Wedlake Bell, who act for the applicants in this application.

The parties are agreed as to the essential architecture for how this application by Ms Julia Pugacheva is to be dealt with. I am not making any orders relating to her appointment as a litigation friend or the joining of the children, her children or any other financial provision today.

What I am to do is to give directions for evidence whereby Ms Julia Pugacheva's application will be supported by evidence. That evidence will be filed by 8 August. The application will come back at least for a mention, if not to be dealt with substantively, when judgment is handed down in the main action relating to the validity and the status of the trusts, including the London Residence Trust.

The parties are agreed about that and they are agreed that I should give Julia Pugacheva the liberty to apply in the meantime.

The issue I have to resolve is about notice.

Last year, Mr Justice Nugee made an order for the sale of the property, that is the Old Battersea House, which is the property which the London Residence Trust is essentially concerned with. That order was made, and the conduct of the sale is to be by the claimants' solicitors in this proceeding.

The claimants are prepared to give notice to Ms Julia Pugacheva's solicitors if the sale actually takes place. The issue is that Mr D'Cruz, who appears for the applicants on the application, submits that a further kind of notice should be given. That is that the claimants should give his instructing solicitors seven days' notice in advance of an exchange of contracts relating to that sale.

The clear purpose of an advance notice is to give Mr D'Cruz's clients the opportunity, if so advised, to make applications to the court which might seek to stop the sale or do something else. That is, as far as I can see, the only rational reason why one could require notice in advance.

That is objected to by the claimants. They submit that there is no proper evidence before the court relating to Ms Julia Pugacheva's application at all; and that the order for sale has already been made. Conduct is already with the claimants and the court should not be creating a situation to facilitate the further interference with the order for sale, which is what the purpose of the advance notice would be.

Mr D'Cruz attractively submits that all he is asking for on behalf of his clients is information, and if, when they get the information, on proper advice, they choose to take a step, then that is a matter for them; and it cannot do any harm, really, to provide it.

Despite Mr D'Cruz's attractive submission, I do not accept it. I will take it that Ms Pugacheva’s children are beneficiaries under the discretionary trust, which is the London Residence Trust. Nevertheless, at the moment I have very, very little information at all about Ms Julia Pugacheva and her application. What there is is an order by the court in clear terms for the sale of the property with that sale to be conducted by the claimants. Despite the fact that I will assume the infant children of Ms Yulia Pugacheva are beneficiaries, since the court has already ordered that the asset be converted into money by a sale, it seems to me that that should go ahead without interference. No harm would be given by those beneficiaries being given notice if that sale has taken place, but I cannot see any proper basis on which I should even be facilitating the possibility that Mr D'Cruz's clients should have the ability to interfere with that sale. Mr D'Cruz's clients and their representatives know now that the court has ordered the sale of that property. If they wish to take steps to do anything about that, that is a matter for them; but I do not see any good reason why the court should make any different order

That is what I will do.