(1) David Halberstam (2) Shoshana Stern v Gladstar Ltd (2015)
The court refused to grant an interim order for delivery up of various valuable items which had been seized by court enforcement officers pursuant to a writ of delivery. The claimants had not established that there was a serious issue to be tried. Furthermore, they could not assert that the claim for interim relief had been compromised on the basis of a witness statement which the defendants had served in error, which wrongly stated that the defendants had made an offer of settlement.
The claimants (T and W) sought interim mandatory orders for delivery up of various valuable items which had been seized in enforcement of an order in favour of the defendant company (G).
W's husband (H) had been a successful businessman, but had been made bankrupt in 1978. His father had bought the family's home, furnishings and effects and had settled them for the benefit of the couple's children under a discretionary trust. T was trustee of that trust. The items had remained in the couple's possession. For many years, G had lent money to H. In 2013, when H was unable to repay a debt to G, W's brothers settled the debt. At that time, G covenanted never to advance money to H again, by a deed which provided that any transaction entered into in violation of its terms would be unenforceable. G subsequently bought several items of furniture and valuable paintings from H. The items were initially left in H's possession, but G now sought delivery up. H asserted that the sales were sham transactions because the transactions were really loans which were unenforceable under the 2013 deed. The parties agreed to arbitrate and the arbitrator found against H. The Commercial Court granted leave to G to enforce the arbitral award. H and W refused to make the items available for collection and court enforcement officers seized the items, pursuant to a writ of delivery. W and T issued the instant application for the return of the goods and G served a witness statement which stated that it had offered to come to an agreement, such as that it would not sell the items until after trial, or would return them as long as it was offered proper security. Upon receiving the statement, T and H purported to accept that offer, but shortly afterwards, G indicated that a wrong version of the statement had been signed in error. It served a revised statement which stated instead that G had considered coming to an agreement. The issues were (i) whether the parties had compromised the application for interim relief because of G's statement; (ii) if not, whether the court should grant interim relief.
(1) The service of G's initial witness statement did not give rise to an enforceable agreement to submit to interim relief pending trial, or an estoppel. Considered objectively in its context, the statement did not amount to an offer to submit to interim relief. It was common ground that there had been no offer of compromise of either of the kinds referred to in the witness statement. The relevant sentence in the statement was therefore false and that was known to T and W. It was not cast in the form of an offer and it was clear that there was no intention on the part of G to create legal relations (see paras 25-27 of judgment). (2) There were several gaps in the evidence adduced by T in support of his contention that H's father had settled the items on trust in favour of the children. However, the evidence was sufficient to establish a real prospect that T would be able to establish his case on the balance of probabilities. T nevertheless had to contend with G's argument that a buyer of goods from someone who was in possession of those goods but had in the past sold or transferred them to a third party was protected by the Bills of Sale Act 1878 s.8. If a short point of law was raised by a defendant to which, after careful consideration, the court was convinced there was and could be no reasonable or viable answer, it would be a waste of resources to leave the point over for some later date. In the instant case, there was no basis, legal or factual, on which T could hope to overcome G's reliance on the 1878 Act. T had not established that there was a serious issue to be tried and T's claim therefore had to fail. W might have a real prospect of establishing that she was the owner and entitled to possession of one of the paintings, but it was not necessary to determine that issue because G had undertaken to deliver up that painting to her, upon her giving appropriate undertakings to protect G's interests (paras 36-39, 41-55).
First claimant's application refused
LTL 5/2/2015 :  EWHC 179 (QB)