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CFI 020/2014 GFH Capital Limited v David Lawrence Haigh

CFI 020/2014 GFH Capital Limited v David Lawrence Haigh

May 3, 2015


Claim No: CFI-020-2014













  1. This is a further application by the Defendant for an order varying the freezing order of DCJ Sir John Chadwick dated 18 June 2014 so as to permit the draw-down of frozen funds to pay legal fees and expenses. It comes hard after the most recent application made in March 2015 and is said to be justified by a change of circumstances. The draft order seeks permission to apply £300,000 in part to discharge the outstanding fees of Messrs Stephenson Harwood and a further £250,000 in respect of part payment of other legal fees and disbursements.
  2. The background is set out in the judgment of this court dated 24 March 2015. As appears from that judgment similar sums for like purposes were sought in an application issued in December 2014 (which was withdrawn) and in an application dated February 2015 (which was refused). The circumstances which are said to justify yet another application are first that counsel and experts retained in both these proceedings and in the criminal proceedings have ceased to act and that Messrs Stephenson Harwood are proposing to apply to come off the record unless these funds are forthcoming.
  3. The court has been deluged with a vast amount of material in respect of the present application which is advanced for determination on paper on an urgent basis. Much of the material exhibited to the witness statement filed on behalf of the defendant is of very marginal relevance to the application and is another example of how costs have been expended in a liberal yet unhelpful manner. It certainly does not assist the court in the task which it has been asked to undertake. Indeed it has not been practicable for the court to read the mass of expert reports exhibited by the Defendant all of which were in any event prepared before the last application took place.
  4. It is important to note at the outset that there is no suggestion that the Claimants have anything other than a good arguable case both on the merits and their contention that they have a proprietary interest in the monies that have been frozen. There has been no application to set aside the order despite it now having been in force for nearly a year.  Although an application to set aside is now said to be contemplated, this is apparently based on the premise that there had been material non-disclosure at the time of the original application for the freezing order which is obviously a difficult proposition to advance after this period of time.
  5. It is also important to note that there is no extant appeal against the order made in March. An application was issued but has not been pursued on the basis that insufficient funds to pay the court fees were available.  Given the fee value of the work undertaken in the run up to the present application and the fact that court fees have been paid in various other proceedings (with no disclosure as to the source of the funds) this proposition is somewhat unconvincing. That said, it is appropriate to proceed on the basis that the earlier ruling was correct.
  6. In any event the change of circumstances has no direct bearing on the outcome of the earlier application. There was no evidence at that stage that the army of lawyers retained by the defendant would not continue to act if their outstanding fees were not paid whether in whole or in part.  Indeed the contribution sought (as again in the present application) was almost de minimis. It seems wholly improbable that the question of continued representation was not considered in the run up to the earlier applications but no mention is made of any concern in that regard from those retained.  Furthermore the prospect of a refusal to act was foreshadowed in the ruling.  It was observed that one primary reason for any risk of withdrawal was the extravagant range of legal activity on the Defendant’s part. Given the further observation that a contribution of 15% would be of little significance in fending off any threat to withdraw, it would appear that it is somewhat opportunistic that the risk only now emerges.
  7. It is still difficult to understand what impact a part payment would now have.  There is no explanation of what are described as the “delayed payment basis” of the retainers. The present fee position is remarkable (even leaving aside experts and other disbursements):

(a) Local counsel are owed AED 1 million.

(b) Stephenson Harwood are owed AED 8 million

In reality these legal fees alone represent a vast proportion of the defendant’s alleged assets.

  1. The only activity which those representing the Defendant say they would undertake after the release of funds is the preparation of a response to the immediate judgment application, the preparation of an amendment to the defence and counterclaim and the filing of the application to set aside the freezing order for non-disclosure. This clearly will not advance matters far before a further application for funds would inevitably be made. Maybe that is the purpose of the exercise, namely to apply incrementally for the entire outstanding fees and disbursements.
  2. For the same reasons as set out in the earlier ruling, the court is not persuaded that any funds should now be dispersed in settlement of outstanding fees. However it is conceivably appropriate (although I reach no conclusion on the topic) to make some allowance for legal representation to the defendant in regard to the immediate judgment application. But this is not the basis of the application nor is there any material to permit the court to assess what level of funding is sufficient for that purpose.
  3. It seems in any event high time that the court exercised some discipline on the levels of expenditure in this case. The question of further costs needs careful consideration given the manner in which this litigation has been conducted. The parties are directed to attend before the court in the week of 10 May to consider the terms of an appropriate order and directions for further conduct of the proceedings. There is no need for representation by counsel.


Issued by:

Mark Beer


Date of issue: 3 May 2015

At: 3pm


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