JP Morgan Chase Bank & Ors v Springwell Navigation Corporation

The claimants, which I shall refer to collectively as “Chase”, applied by Notice dated 15 October 2004 for orders pursuant to CPR 3.4 and the inherent jurisdiction striking out paragraphs 190-193 and 263-271 of the Amended Defence and Counterclaim of the defendant, Springwell Navigation Corporation, which I shall refer to as “Springwell”.

It was agreed between the parties that the hearing before me should be confined to a determination of that part of the application that related solely to paragraphs 190-193 of the Amended Defence and Counterclaim. These refer to the experiences of other Greek families who had dealings with Chase during the period of Springwell’s dealings.

Shortly stated, the relevant facts are as follows. The first claimant, JP Morgan Chase Bank, formerly known as The Chase Manhattan Bank (which I shall refer to as “CMB”), is a bank incorporated under the laws of New York with its principal place of business in New York, but having a branch at London Wall in London. The second claimant , formerly known as Chase Manhattan International Limited (“CMIL”), the third claimant formerly known as Chase Manhattan Securities (CI) Limited (“CMSCI”), and the fourth claimant, formerly known as Chase Manhattan Bank International (“CMBI”), are all banking affiliates of CMB which respectively carry on the business of banking at London, Jersey and Moscow. The fourth defendant to the counterclaim, formerly Chase Investment Bank Limited (“CIBL”) is also an affiliate of CMB, and a merchant banking arm of Chase. The defendant, Springwell, is a company incorporated under the laws of Liberia, established to hold and invest profits from shipping operations owned by members of the Polemis family, and has its actual seat and principal place of business at Piraeus, Greece. It is one of a group of companies, all owned beneficially by Adam and Spiros Polemis and their mother, which has been for many years involved in shipping. The Polemis family is one of the longest-established Greek shipowning families.

By the action, Chase seek a declaration that they owe no liability, whether in contract, or in tort, or otherwise howsoever arising, to Springwell as a result of losses which Springwell alleges it suffered after entering into certain transactions, referred to in the pleadings as “the Investment Transactions”.

The Investment Transactions concerned an investment product developed by CMIL and known as GKO-linked (S Account) Notes (“the Notes”). The return and risks of the Notes were based on the performance of short-term zero coupon bonds issued by the government of Russia, purchased and payable in Russian roubles and known as Gosudarstvenniye Kratkosrochniye Beskuponniye Obligatsii (“GKOs”). The Notes were issued by CMSCI and each Note specified inter alia, the particular issue of GKOs to which the returns and risks were referenced, the purchase price of the note, the redemption amount and the date of maturity. By their terms, the Notes expressly passed through to the holder the returns and risks of investing in the referenced GKOs. The Notes also incorporated the returns and risks associated with forward foreign exchange contracts entered into with selected Russian banks, including CMBI and referenced in the Notes (“the Designated Forwards”). The Designated Forwards were intended to convert the Russian roubles paid on maturity of the referenced GKOs into US dollars.

Springwell financed the purchase of all relevant Notes by a sale and repurchase agreement with CMB. The terms of that agreement were set out in a global master repurchase agreement between Springwell and CMB dated as of 22 September 1997. Springwell purchased some 42 Notes between in or about April 1996 and in or about July 1998. In August 1998 the Russian government declared a moratorium on the payment of GKOs maturing before 31 December 1999. As a result of this moratorium, and the subsequent actions of the Russian government, including the imposition of restrictions on the conversion of Russian roubles to US dollars in GKO-related accounts, Springwell lost a substantial portion of its investment in eleven notes (“the Failed Notes”).

On 15 January 1999, Springwell entered into a term loan facility with CMB in the amount of US dollars 263,128,687.38 (“the Springwell Loan”). By its terms, the Springwell Loan was to be applied towards payment of the amounts owed by Springwell to CMB upon termination of the sale and repurchase agreements under the global master repurchase agreement in respect of inter alia the Failed Notes.

On 7 December 1999, Springwell commenced an action in the United States District Court for the Southern District of New York (“the New York Proceedings”) against CMB. Springwell claimed relief against CMB on the ground of “misrepresentation, breach of statutory and fiduciary duty, negligence and breach of contract” in that CMB

“took advantage of and violated [the trust of the Polemis family] and through a series of misrepresentations and recommendations of risky emerging market investments, which were entirely unsuitable for Springwell’s investment objectives, caused Springwell to suffer damages which exceeded USD 200 million”.

CMB responded to the New York proceedings by applying to dismiss them on the grounds of forum non conveniens, citing England as a more appropriate forum. By its decision dated 30 March 2001, the District Court granted CMB’s motion. The New York proceedings having been dismissed, Chase brought this action in the English Commercial Court to obtain a final determination that Springwell’s allegations are false and give rise to no liability on Chase’s part.

Issue having been joined in England, Springwell, by its Amended Defence and Counterclaim, claimed that Chase were liable in damages for breach of contract, negligence, breach of fiduciary duty, and in the period after October 1997, fraud, in relation to advice allegedly given by Chase to Springwell.

In principle Springwell alleges that Chase owed it duties to give advice in relation to the investments which it bought; that that advice should have been given by reference to Springwell’s investment objectives, which were capital preservation and liquidity; that, instead, the relevant Chase employee involved, Justin Atkinson, recommended numerous emerging market investments which were inappropriate and unsuitable, individually and collectively; and that the consequence of Chase’s breach of duty and fraud was that, when the Russian economy collapsed in 1998, Springwell suffered a substantial loss, because it held a substantial portfolio of high risk and illiquid securities including derivates devised by Chase. The direct losses are said to be in the order of US dollars 281 million and subsequent consequential losses are also said to arise from the use to which its funds would have been put in the shipping business operated by the Polemis family. Although the precise time period of alleged breach is not specified in the Amended Defence and Counterclaim, the bulk of the complaints, if not the entirety, appear to relate to the period between mid to late 1997 and August 1998. (The eleven outstanding GKO-linked notes which were at the centre of the claim had trade dates between November 1997 and July 1998.) The fraud claim is based on alleged fraudulent misrepresentations made by Chase in the period after 23 October 1997 with alleged knowledge that the representations were false.

Chase deny that any of the Chase entities acted in an investment advisory capacity to Springwell; it contends that all it did was to act as a seller of debt securities by the instrumentation of Justin Atkinson. Thus Chase contend that at all times the relationship was an arm’s length counterparty relationship; that all investments sold by Chase to Springwell were sold “on an execution-only basis”; and that the claim that Springwell was conservative in its investment objectives and attitude to risk is entirely belied by the facts. Chase assert that the composition of Springwell’s portfolio in August 1998 “was the product of its investment strategies and decisions, and in particular the pursuit of investments in emerging markets with potentially high yields” and was “entirely matched and was wholly consistent with Springwell’s investment objectives and attitude to risk”.

In particular, although it was accepted by Chase that Justin Atkinson, an employee of CIBL, and then of CMIL, “discussed market developments and products on the telephone and in particular on request, offered his own honest belief as to investment opportunities” with Adam Polemis, Chase maintains that none “of this constituted investment advice in any legally relevant sense”. According to Chase, this is because

“what was said cannot be properly characterised as advice or recommendations, because the relationship between Justin Atkinson and Springwell was not that of advisor and advisee; and because there was no duty of care owed by Chase to Springwell in respect of them.”

Thus, at the heart of this case, lies a fundamental dispute as to the basis upon which Springwell and Chase as a whole, and not just Justin Atkinson, were dealing with one another. Mr Mark Hapgood QC, with Mr Adrian Beltrami, who appeared for Chase, contends that this issue can easily be resolved by considering the transcripts of what Justin Atkinson and Adam Polemis were saying to each other in the period after May 1997 (together, of course, with a consideration of the contractual documentation between the parties). Mr Michael Brindle QC who, together with Mr Jonathan Nash and Mr Jonathan Davies-Jones appeared on behalf of Springwell, argues that it is wrong for Chase to focus the court’s attention narrowly on the relationship between Springwell and the investment banking arms of Chase, namely CIBL and CMIL, and to direct attention away from the critical role of CMB, the first claimant, and the first defendant to the Counterclaim, the party with which the Polemis family had a longstanding relationship in the shipping department and (from the late 1980s) in the private bank.

Springwell contends that what is critical is an understanding of the nature and importance of the role of CMB; and that, because Springwell was a client of CMB and Justin Atkinson dealt with Springwell as such, Justin Atkinson’s role, and Chase’s liability for his actions, must be understood in this context. Indeed, it is said by Springwell that one of the critical issues in the case will be whether it was appropriate to allow a salesman in the investment bank unmediated access to shipping clients of CMB, and whether, having permitted this to occur, CMB exercised proper control over Justin Atkinson.

It is against this background that I turn to consider the impugned paragraphs of the Amended Defence and Counterclaim. These are in the following terms:

“190.

By reason of their friendship with [Adam Polemis] and others in the shipping community EM and [Justin Atkinson] were introduced over time to a number of other Greek shipping families.

191.

As a result of those introductions [Justin Atkinson] was able to establish relationships with these families which were similar to that which he had established with [Adam Polemis]. In particular, like [Adam Polemis] for the most part the other Greek shipping families were not expert or sophisticated investors and they relied heavily on advice from JA as to what investments they should buy.

192.

As a result, by August 1998 a number of these other Greek shipping families, like Springwell, had substantial Russian investments including GKO-linked Notes, and they also suffered substantial losses as a result of the collapse of the Russian financial system referred to hereafter.

193.

Springwell will rely upon the facts and matters referred to in paragraphs 190 to 192 above as relevant to the following matters arising in these proceedings namely:

(a)

that the heavy exposure of Springwell’s portfolio to investments in Russia and the former Soviet Union in August 1998 was the result of the advice given by [Justin Atkinson]; and

(b)

that [Justin Atkinson] was continuing to recommend investments in Russia and the former Soviet Union, including in particular (but without limitation) GKO-linked Notes, at high prices to unsophisticated investors in late 1997 and the first part of 1998.”

Thus the pleaded case in paragraph 193 is that these facts relating to the Greek families are said to be relevant to two issues, namely:

However, Springwell provided further information on 29 July 2004. In response to a request to identify the Greek families, Springwell said in Answer 46 that it relied upon the “experiences” of the Kollakis, Kedros and Afentakis families, together with statements made by a Mr Diamantis Diamantides in litigation against CMB in New York. In response to a request to particularise the advice and the investments said to be relied upon, Springwell said, in Answer 47, that:

In response to a request to identify the “experiences” referred to in Answer 46, Springwell provided no further information and detail other than what it had already said in the Amended Defence and Counterclaim. In response to a request to particularise the advice referred to in Answer 47, Springwell said that:

Accordingly, it is implicit in the further information provided by Springwell, and explicit in the submissions made by Mr Brindle in the application before me, that the Greek families’ evidence is going to be relied upon, or would be relied upon, as similar fact evidence supporting Springwell’s contention that the role of Chase in relation to the Investment Transactions included an advisory role. What is said by Mr Brindle, in summary, is that Springwell’s case is not confined to the relationship between itself and the Chase investment banking corporate entities. Springwell’s case is that, throughout the period of its dealings with Chase, it was a long-standing shipping client of CMB and that Justin Atkinson dealt with Springwell as such, and thus Chase’s liability for his actions must be understood in this context. Mr Brindle submits that the importance of the role of CMB is critical to an understanding of the basis on which Springwell believed it was dealing with Chase. Springwell’s case is that Justin Atkinson was presented by CMB to Springwell in 1987 as an investment advisor. It is said that the customer relationship between Springwell and CMB, and the treasury function performed by Springwell in the group as a whole, was well known to Chase.

Mr Brindle submits that it is in this context that the Greek families’ evidence is relevant. Springwell has pleaded (and Chase has admitted, at least in part) that CMB dealt with the Greek shipping families as a unit, or group, known as “the Hellenic group”. Springwell’s case is that the Polemis family were not alone among the Greek families in being targeted by Chase as potential investors in its capital markets programme. Springwell will say that the introduction of Justin Atkinson to the Polemis family and to other Greek ship-owning families as an advisor was done with a view to persuading a high net worth group of customers, well-known to Chase as having a traditionally conservative attitude to investment, to move out of timed deposits and into capital market products. Springwell’s case, moreover, is that this was part of a coordinated strategy conceived within Chase to earn greater profits from the Hellenic group. In effect, it is said that the fact that the other Greek families were also given recommendations by Justin Atkinson to invest in the relevant derivatives demonstrates that there was indeed an advisory relationship, not only between Springwell and Chase, but also between Chase and the Greek families.

In other words, Springwell seeks to demonstrate that, because Chase had an advisory relationship with the other Greek families, it therefore also had such a relationship with Springwell. Mr Brindle contends that the matters alleged at paragraphs 190 - 193 in relation to the Greek families are admissible and relevant for the following detailed reasons:

There was no dispute before me as to the applicable legal principles under which similar fact evidence is permitted. Both Mr Hapgood and Mr Brindle agreed that the relevant starting point was the Court of Appeal’s recent reconsideration of the principles relating to similar fact evidence in civil cases in O’Brien -v- Chief Constable of South Wales Police [2003] EWCA Civ 1058. At paragraphs 70-71 of its judgment, the court identified the “correct approach”. This, said the Court of Appeal, involves a two-stage test:

“70.

It follows that in civil proceedings, as opposed to criminal proceedings, the first question to be asked is whether the similar fact evidence is admissible. To be admissible it must be logically probative of an issue in the case, and the first part of the House of Lords' test in P must be applied to exclude evidence which is not sufficiently similar to the evidence in the case before the court. At this stage the inquiry must be fact-sensitive. …

71.

Once it is decided that the evidence is admissible, the court must then ask itself whether it ought, in its discretion, to refuse to allow it to be admitted (and if it is of that view it should remove the contention from the party's statement of case, or refuse to allow an amendment to include it, on the basis that an allegation which a party cannot prove ought not to form a part of its case). In deciding how to exercise its discretion, the matters listed in CPR 1(2) must loom large in the court's deliberations. In principle, the stronger the probative force of the similar fact evidence, the more willing the court should be not to exclude it, everything else being equal. On the other hand, the court should have a tendency to refuse to allow similar fact evidence to be called if it would tend to lengthen the proceedings and add to their cost or complexity unless there are strong countervailing arguments the other way. …”

Accordingly, I approach the matter in two stages. First, the court must ask itself the question whether the similar fact evidence is admissible. To be admissible such evidence must be “logically probative of an issue in the case”. That inquiry depends on all the particular facts of the case.

If the court decides that the evidence is indeed admissible, the next question is whether the court should, despite the evidence’s admissibility, in the exercise of its discretion refuse to allow it to be admitted. In deciding how to exercise its discretion, the factors in CPR 1(2) “must loom large in the court’s deliberations”. Obviously, the stronger the probative force of similar fact evidence, as the Court of Appeal pointed out, the more willing the court should be not to exclude it. On the other hand, where evidence is likely to lengthen the proceedings and add to their cost or complexity, the tendency might be to refuse to allow similar fact evidence to be called unless there are strong countervailing arguments the other way.

In relation to the first question of admissibility, Neil LJ in Thorpe -v- Chief Constable of Greater Manchester Police [1989] 1 WLR 665 at 674 said as follows:

“Evidence of ‘similar fact’ is relevant both in criminal and in civil cases to rebut defences such as accident or coincidence or sometimes to prove a system of conduct. Such evidence is not admissible, however, merely to show that the party concerned has a disposition to commit the conduct alleged.”

However, in O’Brien at paragraph 59, the Court of Appeal indicated that it regarded such a statement as slightly too restrictive an articulation of the principle. The Court of Appeal said:

“59.

… In a civil case the test of admissibility is whether the proposed similar fact evidence is relevant in the sense that it is logically probative of an issue in the case. If the evidence is logically probative of a person’s normal conduct, and the manner in which that person normally behaves is relevant to an issue in the case then the similar facts do not have to be elevated to a ‘system of conduct’ before they are admissible ….”

As to the second question, namely the exercise of the court’s discretion to refuse to allow the reception of admissible similar fact evidence, the Court of Appeal referred to the fact that the discretion to exclude such evidence is now codified in CPR 32.1(2) which provides:

“The court may use its power under this rule to exclude evidence that would otherwise be admissible.”

As was said in O’Brien, the discretion must be exercised in the light of the overriding objective and thus accordingly the key is in ensuring that the case is being dealt with “justly”; see O’Brien at paragraphs 68 and 75.

I turn to consider the three grounds on which Chase submitted that the relevant paragraphs relating to the Greek families’ evidence should be struck out.

Mr Hapgood’s first point was that the relevant paragraphs of the pleadings should be struck out because they constituted a purely speculative pleading which Springwell is unable to particularise and which has no substance in fact. I am not persuaded by this point. As Mr Brindle contended, applications to strike out should proceed on the basis that the allegations pleaded are true. Certainly evidence is, and may well at trial be, available to support the specific allegations made, at least to a certain extent. There is already evidence available relating to, for example, the Diamantides family, and proceedings brought by that family’s investment vehicle, Pollux Holdings Limited (“Pollux”). Pollux brought proceedings against CMB in New York making allegations similar to those made by Springwell. Likewise, Pollux’s New York proceedings were struck out on grounds of forum non conveniens and apparently Chase have also brought proceedings in England against Pollux. As regards the three other families, there appear to have been proceedings threatened, which were subsequently compromised. No doubt the relevant evidence to support the allegations could, if available, be obtained. Accordingly, and largely for the reasons put forward by Mr Brindle in his skeleton argument, I reject Mr Hapgood’s submissions on this point.

The first pleaded issue to which the allegedly similar fact evidence relating to the Greek families is said to be relevant is, as I have said, set out in paragraph 193(a) of the Amended Defence and Counterclaim. This is the contention that the heavy exposure of Springwell’s portfolio to Russia was the result of advice given by Justin Atkinson. I accept Mr Hapgood’s submission that this allegation raises an issue of causation. Whether Springwell’s heavy exposure was indeed the result of advice given by Chase, or driven by Springwell’s own desire to have a section of its funds so invested, given the spread and asset allocation of the remainder of its funds or a combination of both factors, must depend on the particular circumstances of Springwell’s participation in the Investment Transactions. This will no doubt be ascertained by reference to the transcripts of the conversations between Justin Atkinson and others at Chase and Mr Polemis, and other evidence relating to the strategies deployed by Springwell in the management of its investment portfolio. What other Greek families may or may not have done in other circumstances with different considerations, different beneficiaries and different (or indeed, similar) investment or risk criteria, cannot, in my judgment, assist in determining this issue of causation as between Chase and Springwell.

The second pleaded issue in paragraph 193 of the Amended Defence and Counterclaim, to which it is said that the allegedly similar fact evidence is relevant, is that Justin Atkinson was continuing to recommend investments in Russia at high prices to unsophisticated investors in late 1997 and early 1998. As Mr Hapgood submits, the telephone conversations for the relevant periods were all recorded and there therefore will be no issue as to precisely what it was Justin Atkinson said to Mr Polemis. Whether or not he did make such recommendations will be readily apparent from the tenor of such conversations, and any other e-mails or communications passing between them. Indeed, I am told that there are hundreds of such recordings.

In Answer 47 of Springwell’s further information dated 30^th July 2004, Springwell assert that this allegation is concerned not with specific investments or advice but with “the general tenor of Justin Atkinson’s advice which was to invest in Russian and former Soviet Union paper”. For my part I cannot see that evidence as to the “general tenor” of Justin Atkinson’s conversations with other Greek families and the fact that the general tenor of his advice was to invest in Russian and former Soviet Union paper in relation to such families, even if that be the case, is relevant as to whether, and if so what, advice was given by Justin Atkinson, and therefore Chase, to Springwell and Mr Polemis.

As Mr Hapgood submitted, the fact that certain statements were made to certain of the Greek shipping families who were customers of Chase does not predicate, nor is it in any way logically probative of, any of the following matters: (a) that the contractual relationship was in any case the same as in the case of Springwell and Chase; (b) that each had the same investment objectives or attitude to risk, or that each had the same views on emerging markets; (c) that each had the same level of sophistication; or (d) that each dealt with Chase in the same way. I agree with Mr Hapgood that without any close correlation on these matters, or evidence of system, similar fact evidence of “the general tenor” of what Justin Atkinson said to one customer in different circumstances is meaningless in regard to Springwell.

This is particularly so in circumstances where, as Mr Brindle was at pains to make clear, Springwell is not alleging that the advice said to have been given to the other Greek families was given negligently or in breach of Chase’s duty. In circumstances, therefore, where Springwell appears to be accepting that it was not going to set out to prove that the statements made by Justin Atkinson to the other Greek families were other than perfectly proper in the context of their own situation and relationship with Chase, it is difficult to see what probative value such evidence might have.

The real thrust of Mr Brindle’s argument on behalf of Springwell was that the evidence relating to the other Greek families will show that Chase was indeed acting in an advisory capacity to Springwell.

In short, says Mr Brindle, there is strong “relationship in time and circumstances between Springwell’s case and the experiences of the four Greek families”. He draws a comparison between the allegations in the Pollux proceedings and Springwell’s pleadings.

In my judgment, the facts and circumstances of the other Greek families and the intricacies of their commercial relationship with Chase are unlikely, in the circumstances of this case, to be logically probative of whether or not such a relationship existed between Springwell and Chase. In order to identify the nature or character of a commercial relationship, it is necessary to look at the relevant contractual documents defining that relationship. If it is alleged, as it appears to be here, that its true nature cannot be found merely in the written documents governing that relationship, it may become necessary to look at what was actually said and done beyond the framework of the written contractual documents. The fact that, in relation to one or more of the other Greek families, Chase may, in the light of what it said or did, have been acting in an advisory capacity, or may have given advice on one or more occasions, simply does not lead to the conclusion that such was the case in relation to Springwell. To ascertain Springwell’s relationship with Chase it will be necessary to look at what was said and done between them. Of course if, and so far as, there may be any Chase documents which suggest that advice was indeed being given to Springwell and other members of the Hellenic group, those will be discloseable. Thus, for example, a board minute or memorandum that makes it clear that the nature of the relationship between all members of the Hellenic group and Chase effectively imposes an advisory role on Chase would be admissible because it related to Springwell. Such a document would be required to be disclosed notwithstanding the exclusion of similar fact evidence relating to the Greek families.

I should make it clear that I do not rely on the fact that, as presently pleaded, the Amended Defence and Counterclaim does not allege that such evidence is relevant to the issue as to the role of Chase and Justin Atkinson in relation to Springwell, i.e. advisory or not advisory. I base my decision on the submissions made to me by Mr Brindle, and I assume that, if it were necessary, the Amended Defence and Counterclaim could be amended to plead such a connection. However, I do not consider that, viewed sensibly, the fact that Chase may have had an advisory relationship with, or given advice to, one or more of the Greek families, is logically probative of Chase having had such a relationship with Springwell. The answer is, it all depends on the precise facts relating to Springwell’s relationship with Chase.

Even if I am wrong on this point, and it could be said that, theoretically at least, the evidence relating to the Greek families had some probative value in relation to the issue, the value of it would, in my judgment, be extremely slight. In the exercise of my discretion I am not prepared to allow what is already a complicated trial to be overburdened by the reception of evidence relating to what Chase said, or did, in relation to the other Greek families. Such slight probative value could not in my judgment outweigh the serious procedural consequences and disruption which would follow if such evidence was admitted.

This is essentially a case management issue. I have to balance the strength of the probative value of the evidence against the disruption, cost and prejudice that could arise if it were admitted. Mr Brindle criticised the fact that no evidence had been put forward by Chase to support its contention that the reception of the evidence relating to the Greek families would be disruptive of the trial. In my judgment, no such evidence is necessary. The consequences are obvious.

If evidence relating to the relationship between Chase and the other Greek families were to be admitted, it would necessarily involve an investigation by the court as to the contractual relationships between the families and Chase, the investment criteria and risk profiles of the various families’ portfolios over the relevant period of time, and the investments that were undertaken. It would further require an analysis of the (no doubt) numerous conversations between Justin Atkinson or other relevant employees at Chase, on the one hand, and the relevant decision taker on behalf of the other Greek families, on the other. It would, in effect, involve a detailed analysis of the whole “advisory relationship”, on the assumption that such existed, between Chase and the other members of the Hellenic group, together with a comparison of the respects in which Chase’s relationship with Springwell was “the same” or “different”.

I accept Mr Hapgood’s submissions that this would involve disclosure of all (or many) relevant documents and telephone records (if available) relating to the other Greek families, and witness evidence being required in relation to Chase’s arrangements with such families. The consequence of this would be an inevitable prolongation of the trial and a widening of the issues which the court has to determine. The timetable is already quite tight, and there are heavy disclosure obligations on Chase in relation to the existing issues as between it and Springwell. Added to this, it might be the case that the other Greek families would object to details of their investments being disclosed in the litigation, let alone being the subject of an investigation in public at trial. Even if I reject Mr Hapgood’s submissions that the inclusion of such evidence would necessitate a complete rescheduling of the current timetable (which is a somewhat unnecessarily pessimistic submission on his part), it clearly would have a serious and detrimental impact on the timetable. It would also necessarily increase by a potentially significant margin the length and cost of the trial and its complexity.

Mr Brindle contends that it is important to keep in the forefront of the court’s mind the fact that the sums at stake in this case are very large. Even leaving on one side the shipping losses, he emphasises that the sums claimed by Springwell in respect of investment advice are between US$ 229.5 million and US$ 281.3 million. If one takes into account the shipping losses, the total sums claimed by way of damages in respect of bad investment advice, range between approximately US$ 490 million and US$ 560 million. He submits that if one considers what is proportionate against the quantum of the claim there is no reason for concluding that the widening of the inquiry at trial (to permit evidence relating to the Greek families to be adduced) would be disproportionate.

I do not agree. A parallel inquiry into the relationship between Chase and four other Greek families, and indeed (possibly) other customers, would not, in my judgment, be of sufficient probable utility to justify what necessarily will be a substantially increased cost. No doubt the costs incurred to date are already substantial. I accept Mr Hapgood’s submission that there will be a huge additional cost involved if the proposed exercise were entered into. It is obvious from the nature of the evidence that would be required. I have no reason to suppose that he is incorrect in suggesting that such additional costs will be well in excess of US$ 1 million.

In the exercise of my discretion I also take into account the fact that there is a considerable wealth of material already available viz the recordings of telephone conversations. In my judgment, if the Greek families’ evidence were admitted, the trial would not be dealt with expeditiously and fairly, nor would the available court resources be usefully employed in what would necessarily be a satellite inquiry with no, or at least very limited, probative utility. The importance of the case and the amount of money involved are matters which of course I have taken into account in reaching my conclusions. But even the nature and size of these, and the respective financial strengths of both parties, cannot justify what in my judgment would most likely turn out to be a dubious use of time.

Accordingly, I propose to strike out the relevant paragraphs of the Amended Defence and Counterclaim and to direct that no evidence relating to the Greek families should be called in support of such paragraphs, or otherwise save with the leave of the court.