|[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback]|
England and Wales High Court (Chancery Division) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> Twin Benefits Ltd v Barker  EWHC 1412 (Ch) (19 June 2017)
Cite as:  EWHC 1412 (Ch)
[New search] [Context] [View without highlighting] [Printable RTF version] [Help]
Strand, London, WC2A 2LL
B e f o r e :
| TWIN BENEFITS LIMITED
- and –
|(1) IAIN PAUL BARKER
Mr. Stephen Moverley Smith, Q.C. and Mr. Dakis Hagen, Q.C. (instructed by Memery Crystal LLP) for the First Defendant
Hearing dates: 22 and 23 March 2017
Crown Copyright ©
Mr. Justice Marcus Smith:
A. INTRODUCTION AND FACTUAL BACKGROUND
(1) The tax avoidance scheme
"...the widow, children and remoter descendants and the mother and sisters of Iain Paul Barker who shall be living after his death…"
(2) The Confiance Proceedings
i) Mr. Barker's children and any unborn descendants. Mr. Barker has five children by three women:
a) At around the time when the tax scheme was being considered, Mr. Baxendale-Walker introduced Mr. Barker to a Ms. Susan Glover, with whom Mr. Barker formed a personal relationship, resulting in the birth of twin children, Tom and Freya Barker, in 2001. Mr. Baxendale-Walker is the godfather of Tom and Freya. Mr. Barker and Ms. Glover's relationship subsequently broke down.
b) In 2004, Euan Barker was born (by Ms. Deborah Siddoway).
c) In 2005, Lauren Chadwick was born (by Ms. Julie Chadwick).
d) In 2006, Rowan Barker was born (by Ms. Siddoway).
ii) Mr. Barker's mother, Ms. Joan Barker.
iii) Mr. Barker's two sisters, Ms. Ingrid Heywood and Ms. Margot White.
i) First Defendant. Confiance itself (as trustee).
ii) Second Defendant. Euan Barker. Ms. Alison Meek, a solicitor of Harcus Sinclair LLP, was appointed as litigation friend to Euan Barker, since he was a minor. Although (as shall be seen) this is controversial, Euan appears to have been joined for the purposes of representing all of Mr. Barker's children.
iii) Third Defendant. Mr. Stuart Brown. Mr. Brown was joined as a representative of beneficiaries of the Trust (that is, former employees of the Team 121 group and their children).
iv) Fourth Defendant. Mr. Barker's mother, Ms. Joan Barker.
v) Fifth and Sixth Defendants. Mr. Barker's two sisters, Ms. Heywood and Ms. White.
i) The Confiance Settlement defined two classes of beneficiary, the "Family Beneficiaries" (defined in clause 1(k)) and the "Employee Beneficiaries" (defined in clause 1(l)). Essentially, the identity of the Family Beneficiaries tracked the definition of Principal Beneficiaries in the Sub-Trust, whilst the definition of Employee Beneficiaries tracked the definition of beneficiaries in the Trust.
ii) As part of the settlement, each of these classes had settled upon it on trust a sum of money. In the case of the Family Beneficiaries, this was £1 million. In the case of the Employee Beneficiaries, this was £500,000. These monies were set aside and paid out of the Trust (including any assets held by the Sub-Trust).
iii) The balance of the funds held on trust were to be held by Confiance:
a) On trust to pay and discharge the costs of the Confiance Proceedings and the costs occasioned in establishing the trusts for the Family Beneficiaries and the Employee Beneficiaries.
b) Subject to the payment of these costs, any remaining monies on trust for Mr. Barker for his own use and benefit absolutely.
iv) Clause 5 of the Confiance Settlement released Confiance from (I am paraphrasing) any Claims relating to the administration of the Trust by it or by any of its predecessor trustees. "Claims" were broadly defined in clause 1(o) as "all and any actions proceedings accounts costs claims and demands of whatsoever nature and howsoever arising and whether made directly or indirectly".
i) The Second Defendant, Euan, was appointed to represent for the purposes of the Confiance Proceedings the interests of all living unborn and unascertained persons who may be or become members of the class defined as the Principal Beneficiaries in the Sub-Trust.
ii) The Third Defendant, Mr. Brown, was appointed to represent for the purposes of the Confiance Proceedings the interests of all living unborn and unascertained persons who may be or become members of the class defined as the "Beneficiaries" under the Trust.
iii) The terms of the Confiance Settlement were approved:
"AND THE COURT is satisfied that the terms of compromise are for the benefit of the Second Defendant and the absent family beneficiaries and the absent employee beneficiaries HEREBY APPROVES the terms of the compromise on behalf of the Second Defendant and the absent family beneficiaries and the absent employee beneficiaries AND HEREBY DIRECTS that the terms of compromise shall be binding on them…"
iv) The Confiance Proceedings be stayed. There was a liberty to apply for the purposes of carrying the terms of compromise into effect.
(3) These proceedings
i) Paragraph 15 asserts that Tom and Freya were owed fiduciary duties by Mr. Barker as protector of the trust.
ii) Paragraph 31 states:
"By virtue of his role as protector of the EBT Mr. Barker owed fiduciary duties to the beneficiaries of the EBT and the Sub-Trust. Those fiduciary duties included one or more [of] the following:
i. A duty not to put himself in a position where his own interests conflicted with those of the beneficiaries.
ii. A duty not to act so as to favour his interests over those of the beneficiaries.
iii. A duty not to act for his own benefit or for the benefit of a third party without the informed consent of the beneficiaries."
iii) In paragraph 79, it is alleged that Mr. Barker breached his fiduciary duty in the following ways (I omit the particulars provided in this paragraph, and simply list the headings):
a) Causing or permitting inadequate growth in the Sub-Trust fund.
b) Appropriating funds from the Sub-Trust fund.
c) Failing to ensure Tom and Freya's interests were represented adequately or at all in the settlement of the Confiance Proceedings.
iv) Paragraph 81 provides:
"Further or in the alternative Mr. Barker has been unjustly enriched at the expense of the beneficiaries of the Sub-Trust and is therefore liable on a restitutionary analysis to reinstate to the Sub-Trust fund such sums as the court may conclude were passed to Mr. Barker in breach of trust and/or in breach of fiduciary duty. The Claimant contends that sum is, at a minimum, the £11,500,000 obtained by Mr. Barker from the Sub-Trust's fund in 2013, plus the Lillianne Receipt believed to be in the region of £5.5 million."
v) Paragraph 82 provides:
"The Claimant further seeks an order under CPR 19.7(7) to the effect that Mrs. Justice Asplin's order settling the Confiance Proceedings does not bind Tom and Freya and/or an order under CPR 3.1(7) that Mrs. Justice Asplin's order be varied or revoked to achieve the same outcome or such outcome as the court thinks fit. The consequence of such an order is that the Sub-Trust fund should be wholly or alternatively partly reconstituted unless and until Mr. Barker can succeed in or settle litigation on the lines of the Confiance Proceedings against Tom and Freya."
vi) Finally, the prayer seeks relief under the following five heads:
"(1) An Order setting aside Mrs. Justice Asplin's order of 25 July 2014 and/or providing that it does not bind Tom and Freya Barker;
(2) Orders to restore the Sub-Trust fund consequential on the order described above in such terms as the court thinks fit, together with such accounts and enquiries of the First Defendant's dealings with the funds as the court thinks fit;
(3) Further or in the alternative damages as aforesaid;
(4) Such further order as the court thinks fit;
(5) Interest as aforesaid."
i) Allegations of breach of fiduciary duty.
ii) A claim in unjust enrichment or restitution.
iii) A procedural claim amounting to a collateral attack on the representation orders made by Mrs. Justice Asplin in the Asplin J. Order pursuant to CPR 19.7 and/or a procedural claim based upon CPR 3.1(7) seeking to have the Asplin J. Order, or parts of it, set aside.
(4) Service of the proceedings on Mr. Barker and Confiance and the present application
i) The claimant must satisfy the court that in relation to the foreign defendant there is a serious issue to be tried on the merits, i.e. a substantial question of fact or law or both.
ii) The claimant must satisfy the court that there is a good arguable case that the claim falls within one or more classes of case in which permission to serve may be given. These classes – referred to in this Judgment as "Gateways" – are presently listed in paragraph 3.1 of Practice Direction 6B of the Civil Procedure Rules. The Gateways relied upon by Twin Benefits were two:
a) Gateway (3) (i.e. paragraph 3.1(3) of Practice Direction 6B), where there is a necessary or proper party to a claim made against a defendant susceptible to the jurisdiction of the court (the so-called "anchor defendant").
b) Gateway (9) (i.e. paragraph 3.1(9) of Practice Direction 6B), where a claim is made in tort and either:
i) Damage was sustained, or will be sustained, within the jurisdiction (Gateway (9)(a)); or
ii) Damage which has been or will be sustained results from an act committed, or likely to be committed within the jurisdiction (Gateway (9)(b)).
iii) The claimant must satisfy the court that England and Wales is clearly and distinctly the proper forum for the trial of the claims.
i) An order declaring that this court has no jurisdiction alternatively an order that the court should not exercise any jurisdiction that it may have;
ii) An order setting aside service as against him.
i) Three statements of Ms. Victoria Pigott (respectively, "Pigott 1", "Pigott 2" and "Pigott 3") dated 18 July 2016, 30 September 2016 and 8 March 2017.
ii) A statement of Ms. Glover (her second in these proceedings, but the only statement of her's placed before me, "Glover 2") dated 9 March 2017.
B. MR. BARKER'S CONTENTIONS AND THE STRUCTURE OF THIS JUDGMENT
i) Neither party suggested that the circumstances were different between those pertaining at the time of the ex parte application before Master Price and those pertaining at the time of the rehearing before me. The only change relates to the Gateways on which Twin Benefits relied: as I have noted, Twin Benefits abandoned its reliance on Gateway (3).
ii) There was some suggestion in the written submissions made on behalf of Mr. Barker that the evidence adduced by Twin Benefits before Master Price was not full or frank. That point was not developed before me by Mr. Barker, and (understandably) Twin Benefits did not address it in response. It would not be appropriate, in those circumstances, to consider the question of full and frank disclosure any further, and I proceed on the basis that the order of Master Price is not being challenged on this basis.
iii) It became clear from the written and oral submissions made on Mr. Barker's behalf that Mr. Barker contests jurisdiction on two grounds:
a) First, that there was no serious issue to be tried on the merits.
b) Secondly, there was no good arguable case that the claims pleaded by Twin Benefits fell within Gateway (9), reliance on Gateway (3) having been abandoned by Twin Benefits.
There was no challenge by Mr. Barker to the third requirement, namely that the claimant must satisfy the court that England and Wales is clearly and distinctly the proper forum for the trial of the claims.
i) The first requirement: whether there is a serious issue to be tried.
ii) The second requirement: whether the claims fall within one of the Gateways. In general terms, a claimant must show a good arguable case that its claim falls within one or more of the Gateways. Specifically, in this case, the Gateway relied upon by Twin Benefits is Gateway (9).
C. THE FIRST REQUIREMENT: SERIOUS ISSUE TO BE TRIED
(1) The law
(2) The approach to the facts
"It does not strike me as a neutral position…The fact that it has been resisted so hard really does make one suspicious."
i) The terms of the Confiance Settlement were negotiated before the Court had made any order that Euan Barker could represent Tom and Freya. No effort was made to consult Tom or Freya (or their mother, Ms. Glover) or make them aware of the Confiance Proceedings.
ii) At the time of the Confiance Settlement, Mr. Barker's relationship with Ms. Glover was very poor, whereas his relationship with his ex-wife Deborah Barker (and her son Euan) was good.
iii) Mr. Barker chose to issue the Confiance Proceedings against only Principal Beneficiaries with whom he was on good terms and whom he anticipated would be amenable to a settlement favourable to him.
iv) Asplin J. had before her little or no evidence as to Tom and Freya or Ms. Glover's knowledge of or views on the Confiance Settlement or whether it was appropriate for Euan Barker to represent the twins.
v) Mr. Baxendale-Walker has incurred the costs set out in paragraph 76 of the Particulars of Claim for the benefit of Tom and Freya.
vi) Mr. Barker has made use of the Sub-Trust funds for his own purposes, and the other alleged facts specified in paragraph 79 of the Particulars of Claim, which Twin Benefits alleges constitute breaches of fiduciary duty by Mr. Barker towards the twins. These alleged breaches of fiduciary duty are summarised in paragraph 26(iii) above.
(3) Mr. Barker's contentions
i) Mr. Barker, as protector, did not owe the fiduciary duties alleged in the Particulars of Claim, whether to Tom or Freya or anyone else.
ii) Tom and Freya Barker did not have the locus standi to bring the claims now being brought by Twin Benefits.
iii) Tom and Freya were, in any event, bound by the outcome of the Confiance Proceedings.
iv) The chain of assignments to Twin Benefits was void.
(4) No fiduciary duties owed?
(a) The terms of the Trust Deed
i) "Trustees" meant the Original Trustees or other trustees or trustee for the time being.
ii) The "Trust Fund" meant the £100 originally settled and all property at any time added thereto by way of further settlement, accumulation of income, capital accretion or otherwise and all property from time to time representing the same.
iii) The "Beneficiaries" were defined as follows:
"…the present, past and future employees from time to time of the Founder and its subsidiaries and the wives husbands widows widowers children step-children and remoter issue of such employees and the spouses and former spouses (whether or not remarried) of such children and remoter issue and "Beneficiary" has a corresponding meaning PROVIDED THAT no Excluded Person shall be a Beneficiary".
iv) "Excluded Person" meant any of the persons named or described in Schedule 3 to the Trust Deed. Schedule 3 defined Excluded Persons as follows:
"1. Each and every "Participator" (as defined in the Act) in the Founder.
2. Each and every person who has been a "Participator" (as defined in the Act) in the Founder within the ten year period prcceding the date of this Deed.
3. Each and every person who is "connected" with any such Participator (whether current or former) for the purposes of the Act.
In this Schedule, references to "the Act" mean the Inheritance Tax Act 1984 and any statutory modification, amendment or consolidation of the same."
v) The "Protectors" were Mr. Barker and Mr. Speksnyder – although, as I have noted, Mr. Speksnyder ceased to be a Protector on 28 September 1999.
"2. Subject to Clause 12 hereof the Trustees shall hold the Trust Fund and the income thereof UPON TRUST for all or any one or more exclusively of the others or other of the Beneficiaries in such shares and with such trusts and subject to such powers and provisions as the Trustees shall in their absolute discretion during the Trust Period by any deed or deeds revocable or irrevocable appoint.
3. Subject as aforesaid and subject to Clause 12 hereof the Trustees shall during the Trust Period hold the Trust Fund UPON TRUST to apply the income and capital thereof to all for the benefit of all or any one or more exclusively of the others or other of the Beneficiaries in such shares and in such manner generally as the Trustees shall in their absolute discretion think fit PROVIDED THAT the Trustees may if in their absolute discretion think fit accumulate the whole or any part of the income of the Trust Fund by investing the same and the resulting income thereof in any investments hereby authorised and adding the accumulations to the capital of the Trust Fund.
8. The statutory power of appointing new and additional trustees hereof as varied by Schedule 1 to this Deed shall be vested in the Protectors.
8.1 In addition to the said statutory power as varied the Protectors shall have power at any time by deed to appoint any person to be an additional trustee thereof notwithstanding that the effect of any such appointment is to increase the number of trustees hereof beyond four.
8.2 Any Trustee for the time being hereof shall be entitled to resign from the trusts herein forthwith upon written notice of such resignation being delivered to the Protectors.
8.3 The Protectors shall have power to remove any Trustee from the trusts hereof by Deed and the grounds for exercise of such power shall not be limited to the grounds set forth in the Trustee Act 1925.
11. Subject to Clause 12 hereof, the Protectors shall with the consent in writing of the Trustees have the power at any time by deed to alter or add to all or any of the provisions hereof in any respect PROVIDED THAT such power shall not be so exercised as to impose any new obligation or liability on the Founder.
12. No power or discretion hereby or bylaw conferred on the Trustees the Founder or the Protectors or any of them (notwithstanding anything to the contrary herein expressed or implied) be exercisable in such manner as to cause any part of the Trust Fund or the income thereof to be used to provide a Relevant Benefit or to become payable to or applicable for the benefit of the Founder or its subsidiaries PROVIDED THAT where the Trustees make any payment to or provide any benefit for a Beneficiary in the circumstances where the Founder or its subsidiaries are liable to account to the Revenue Authorities of the United Kingdom for income tax and/or national insurance contributions in respect of such payment or benefit then the Trustees shall pay to the Founder or its subsidiaries such sum as shall be required to fully discharge that liability."
(b) The Deed of Gift
(c) The Sub-Trust
1. Team 121 Holdings Limited…("the Founder") established a trust by Deed dated 6th October 1998 (" the Principal Scheme") of which the Original Trustee is the trustee.
2. The Original Trustee now declares itself the Original Trustee of the sum of One Hundred Pounds (£100) being part of the assets of the Principal Scheme at the date of this Deed ("the Assets") on the terms set out below.
3. This trust shall be known as the First Team 121 Sub-Trust.
NOW THIS DEED WITNESSETH as follows:
1. In this Deed unless the context otherwise requires the following expressions have the following meanings respectively:
1.1 "the Trustees" means the Original Trustees or other the trustees or trustee for the time being hereof;
1.2 "the Trust Fund" means the Assets all property at any time added thereto by way of further settlement accumulation of income capital accretion or otherwise and all property from time to time representing the premises respectively;
1.4 "the Members" means the persons named in Schedule 2 to this Deed;
1.5 "the Principal Beneficiaries" means the widow, children and remoter descendants and the mother and sisters of Iain Paul Barker who shall be living after his death; and other expressions used in this Deed which are defined in the Deed establishing the Principal Scheme shall have the corresponding meaning in this Deed;
2. Subject to Clause 11 hereof the Trustees shall hold the Trust Fund and the income thereof UPON TRUST for all or any one or more exclusively of the others or other of the Principal Beneficiaries in such shares and with such trusts and subject to such powers and provisions as the trustees shall in their absolute discretion during the Trust Period by any deed or deeds revocable or irrevocable appoint and in default of any such appointment shall so hold UPON TRUST for the Members upon the terms of the Deed establishing the Principal Scheme.
3. Subject as aforesaid and subject to Clause 11 hereof the Trustees shall during the Trust Period hold the Trust Fund UPON TRUST to apply the income and capital thereof to or for the benefit of all or any one or more exclusively of the others or other of the Principal Beneficiaries in such shares and in such manner generally as the Trustees shall in their absolute discretion think fit PROVIDED THAT the Trustees may if in their absolute discretion think fit accumulate of the whole or any part of the income of the Trust Fund by investing the same and the resulting income thereof in any investments hereby authorised and adding the accumulations to the capital of the Trust Fund.
7.1 The statutory power of appointing new and additional trustees hereof as varied by Schedule 1 to this Deed shall be vested in Iain Paul Barker.
7.2 In addition to the said statutory power as varied Iain Paul Barker shall have power at any time by deed to appoint any person to be an additional trustee thereof notwithstanding that the effect of any such appointment is to increase the number of trustees hereof beyond four.
7.3 Any Trustee for the time being hereof shall be entitled to resign from the trusts herein forthwith upon written notice of such resignation being delivered to the Founder.
7.4 Iain Paul Barker shall have power to remove any Trustee from the trusts hereof by Deed and such power shall be absolute and shall not be a fiduciary power and the grounds for exercise of such power shall not be limited to the grounds set forth in the Trustee Act 1925.
"The Members" means the present, past and future employees from time to time of the Founder and its subsidiaries and the wives, husbands, widows, widowers, children, step children and remoter issue of such employees and the spouses and former spouses (whether or not re-married) of such children and remoter issue and "Member" has a corresponding meaning."
"To say that a protector will be liable for breach of fiduciary duty is useful only so far as the content of that usual duty can be established…in any case where an attempt is made to hold a protector to account for breach of 'fiduciary' duty, the content of that duty will need to be established on the basis of the terms of the trust instrument in question and any relevant statutory provisions."
i) It is not alleged that Mr. Barker owed fiduciary duties in relation to his powers to appoint new and additional trustees (clause 8 of the Trust Deed; clause 7.1 of the Sub-Trust) or to remove trustees (clause 8.3 of the Trust Deed; clause 7.4 of the Sub-Trust).
ii) It is not alleged that Mr. Barker breached these fiduciary duties. Indeed, it is impossible to see (certainly on the face of the pleading) how even the most egregious breach of these duties could result in the consequences pleaded in paragraph 79.
(5) Locus standi
i) Vested interests. Lewin on Trusts (19th ed. (2015)) draws a clear distinction between vested and contingent interests. It states at paragraph 1-048:
"A vested interest is an interest which is not subject to any condition precedent. Thus a beneficiary may have a vested interest in trust assets even though he is not entitled to immediate enjoyment of those assets under the terms of the trust. Interest may be vested in interest or vested in possession. An interest vested in possession confers an immediate right to present enjoyment of the property one interest that is merely vested interest confers a present right to future enjoyment. Both are distinct from a contingent interest which will not invest unless and until some requirement (other than merely the determination of a prior interest) is satisfied, for instance attainment of some specified age, or survival to a particular time, or the occurrence of some external event. Where property is held on trust "A for life, then to B absolutely" both A and B have a vested interest in the property albeit A has the immediate right to enjoy the property. A's interest is vested in possession and B's interest is vested in interest. By contrast, a beneficiary with a contingent interest has no vested right until the contingency occurs. A vested interest is transmissible and may be assigned by the beneficiary, and will form part of the beneficiaries estate upon his death."
ii) Contingent interests. Paragraph 1-055 of Lewin states:
"A contingent interest is an interest which may become a vested interest but is dependent for that transformation upon a future event or occurrence. The difference between an estate vested in interest and a contingent interest is the difference between a "present right of future enjoyment" and "a right of enjoyment which is to accrue, on an event which is dubious or uncertain." As we have seen, in the case of a trust for A for life, then to B absolutely, both A and B have vested interests, and even if B predeceases A, then B is vested interest will pass to his estate. In contrast, a trust for A for life, then to B provided that B shall outlive A creates a contingent interest in favour of B because B will only obtain a vested interest if he is still alive when A dies."
iii) Unascertained interests. The third type of interest is not really an interest at all, and is referred to as either an "unascertained interest" or a mere spes. In Re. Midleton's Will Trusts  1 Ch. 600 at 607 to 608, Stamp J. stated:
"A gift to A, if on the death of B he shall be the heir of B or one of the next-of-kin of B or shall then have some other specified characteristic, confers on A a present interest called contingent and which becomes vested if, on the death of B, A has the required characteristic. On the other hand, a gift to whomsoever shall at the death of B, a living person, be the heir of B or one of the next-of-kin of B, or shall then have some other specified characteristic, in my judgment confers no interest upon anyone until the death of B, when you inquire who has the required characteristic. A gift in equal shares to the persons who at the death of B shall be members of the Athenaeum club no more confers an interest, contingent or otherwise, on the present members of the club who may hope to remain members until the death of B than it does to all those other persons in the world who may hope to be elected in the meantime and remain members at the death of B. Neither class has during the life of B, even if B be in articulo mortis, more than a hope of being or becoming one of the designated class, spes successionis."
i) That Mr. Barker, as protector, did not owe the fiduciary duties alleged in the Particulars of Claim, whether to Tom or Freya or anyone else; but
ii) That, if such duties had existed, Tom and Freya would have had the standing to enforce such claims.
(6) Bound in any event by the outcome of the Confiance Proceedings
(a) The settlement
i) Release of Confiance (but not Mr. Barker) from any "Claims".
ii) Approval of the terms upon which the Trust and Sub-Trust were to be unwound.
iii) Approval of the establishment of the Family Beneficiaries and Employee Beneficiaries trusts.
iv) Approval that the balance of the funds held on trust, after the establishment of the Family Beneficiaries and Employee Beneficiaries trusts, the payment of the costs of establishing those trusts and the payment of the costs of the Confiance Proceedings, be held for the benefit of Mr. Barker for his own use and benefit absolutely.
(b) The claims of breach of fiduciary duty
i) Although there is nothing in terms in the Confiance Settlement to preclude the claims of breach of fiduciary duty inasmuch as they relate to causing or permitting inadequate growth in the Sub-Trust fund (paragraphs 79(1) to (3) of the Particulars of Claim), it is impossible to understand what interest Tom and Freya could have in such a claim. Their interest in the monies held on trust by way of the Trust and/or the Sub-Trust have been compromised by the Confiance Settlement and translated to an interest in the Family Beneficiaries trust. That is, after the Confiance Settlement, the entirety of their interest.
ii) The other claims for breach of fiduciary duty are inextricably tied to the Confiance Proceedings and compromised by the Confiance Settlement. Thus, the appropriation of funds from the Sub-Trust fund is a matter squarely raised by Mr. Barker in the Confiance Proceedings (see his witness statement in those proceedings dated 12 July 2014). I note, of course, that the Particulars of Claim aver that this evidence was misleading. Paragraph 79(6) of the Particulars of Claim pleads:
"Further or in the alternative Mr. Barker breached his fiduciary duties by neglecting to include the Lillianne Receipt and the £11.5 million received in 2013 in the valuation of the Sub-Trust's assets he gave to the court for the purposes of settlement of the Confiance Proceedings. The point is significant because, had the full value of the Sub-Trust fund been included in Mr. Barker's evidence that might have influenced the court's decision as to whether to approve the settlement of the Confiance Proceedings."
This makes the connection between the Confiance Settlement and this aspect of Twin Benefits' allegations of breach of fiduciary duty very clear.
iii) The allegation that Mr. Barker acted in breach of fiduciary duty in failing to ensure that Tom and Freya's interests were represented adequately or at all (paragraphs 79(7) to (11) of the Particulars of Claim) is obviously directly related to the representation orders made in the Asplin J. Order.
(c) The restitution claim
(d) Setting aside the Confiance Settlement and the Asplin J. Order
"Unless the court otherwise directs, any judgement or order given in a claim which a party is acting as a representative under this rule –
(a) is binding on all persons represented in the claim; but
(b) may only be enforced by law against a person who is not a party to the claim with the permission of the court."
i) Could be asserted in separate proceedings,
ii) By a party other than the person by whom the application would ordinarily be made, presumably because the right to make the application had been transferred to that person.
"… I think that the applicant's argument is erroneous and that it rests on the hypothesis (which is also erroneous) that a chose in action includes the right of a party to an action to make an application to the judge for order for costs which the judge may or may not direct, and, therefore, I do not think that the applicant's application was correctly made."
"(i) Despite occasional references to a possible distinction between jurisdiction and discretion in the operation of CPR 3.1(7), there is in all probability no line to be drawn between the two. The rule is apparently broad and unfettered, but considerations of finality, the undesirability of allowing litigants to have two bites at the cherry, and the need to avoid undermining the concept of appeal, all push towards a principled curtailment of an otherwise apparently open discretion. Whether that curtailment goes even further in the case of a final order does not arise in this appeal.
(ii) The cases all warn against an attempt at an exhaustive definition of the circumstances in which a principled exercise of the discretion may arise. Subject to that, however, the jurisprudence has laid down the firm guidance as to the primary circumstances in which the discretion may, as a matter of principle, be appropriately exercised, namely normally only (a) where there has been a material change of circumstance since the order was made, or (b) where the facts on which the original decision was made were (innocently or otherwise) misstated."
i) I have, in these proceedings, no power to make a representation order in respect of parties in other proceedings. That order could only be made – and was in fact made – by Asplin J. in the Confiance Proceedings.
ii) CPR Part 3.1(7) accords the court that has the power to make a particular order, the power to vary or revoke it. But I have – in these proceedings – no such power to make the representation order; and so, no power to vary or revoke it.
iii) I consider that the Court of Appeal, in Tibbles, was proceeding on the assumption that an application to vary or revoke an order would be made in the same proceedings as the order was originally made.
iv) Equally, as a matter of procedural common sense, it makes no sense for Twin Benefits (which was not a party to the Confiance Proceedings) to apply in other proceedings to vary or revoke an order made in respect of two other parties (Tom and Freya) not party to either these proceedings or the Confiance Proceedings in circumstances where the representative party (in whose favour the representation order was made) – Euan – is only party to the Confiance Proceedings.
(7) The effectiveness of the chain of assignments to transfer rights to Twin Benefits
i) The 18 December 2015 Assignment. By a deed of assignment dated 18 December 2015, Tom and Freya (as "Assignors") assigned to Mr. Baxendale-Walker with immediate effect all litigation rights, title, interest and benefit in and to the Causes of Action and the Potential Proceedings with effect from the Effective Date. As to this:
a) "Causes of Action" and "Potential Proceedings" were terms defined in the first recital (Recital (A)) of the deed as follows:
"The Assignors are the potential claimants in a claim to be brought by them and one other in the High Court of Chancery Division in relation to the dealings with (i) a Deed of Trust dated 6 October 1998 establishing an employee benefits scheme known as the Team 121 Holdings Limited Employee Benefits Trust and Shares Scheme and rights or expectancies or interests under (ii) The Iain Barker Guernsey based pension scheme; (iii) Ilex Associates FURBS (the "Potential Proceedings") seeking equitable compensation for breach of fiduciary duty and on other grounds, damages for negligence and tortious interference and conspiracy, declarations of indemnity, all necessary accounts, inquiries and further or other relief, interest and costs (the "Causes of Action").
It will be noted that these definitions of "Potential Proceedings" and "Causes of Action" are circular. These terms are defined by reference to the Assignors as "potential claimants in a claim to be brought by them and one another in the High Court of Justice Chancery Division". Although, to an extent, the subject matter of these future proceedings is circumscribed by the reference to dealings with (i) the Deed of Trust, (ii) the Iain Barker Pension scheme and (iii) Ilex Associates FURBS, nevertheless the precise ambit of the assignment is actually only crystallised by the scope of the proceedings ultimately issued.
b) In consideration of the assignment, Mr. Baxendale-Walker agreed to pay the sum of £1,000 plus 90% of the damages or settlement sum proceeds arising from any litigation conducted by him or his assigns.
ii) The 19 January 2016 Assignment. By a contract of assignment dated 19 January 2016, Tom and Freya (as "Assignors") assigned to Mr. Baxendale-Walker all rights they had in relation to the Confiance Proceedings. The consideration paid by Mr. Baxendale-Walker in respect of this assignment was the sum of £1,000.
iii) The 8 April 2016 Assignment. By a contract of assignment dated 8 April 2016, Mr. Baxendale-Walker assigned to Twin Benefits (on terms that it is unnecessary to set out):
a) The rights that had been assigned to him by Tom and Freya pursuant to the 18 December 2015 Assignment.
b) The rights that had been assigned to him by Tom and Freya pursuant to the 19 January 2016 Assignment.
iv) The 10 May 2016 Assignment. By a deed of assignment dated 10 May 2016, Tom and Freya assigned to Twin Benefits such rights as they might have under the Trust and/or under the Sub-Trust and/or under any "Potential Implied Trust" arising because of the voidness, non-binding nature, variation and/or revocation of the Asplin J. Order.
i) The procedural claims advanced by Twin Benefits, based on CPR Parts 19.7(7) and 3.1(7) are not private law rights capable of assignment. To the extent that the assignments purport to transfer or assign such rights, they are not so much void as ineffective.
ii) The claims for breach of fiduciary duty are either:
a) Unsustainable because the fiduciary duty does not exist; or
b) Unsustainable because any claims have been compromised by way of the Confiance Settlement.
Again, to the extent that the assignments purport to transfer or assign such rights, they are not so much void as ineffective because the rights purportedly assigned do not exist by reason of the compromise.
iii) The restitutionary claim is unsustainable, again, because of the Confiance Settlement, and the position is as in the case of the claims for breach of fiduciary duty.
i) The scope of the 18 December 2015 Assignment is defined by reference to the scope of these very proceedings. That, in itself, is unsatisfactory enough. More to the point, however, is the fact that I have concluded that the causes of action pleaded in those proceedings either do not exist, or are unarguable, or have been compromised in other, separate, proceedings (i.e. the Confiance Proceedings and the Confiance Settlement).
ii) The scope of the 19 January 2016 Assignment is defined by reference to the Confiance Proceedings, which have been settled.
iii) The 8 April 2016 Assignment merely adds a further link to the chain, and effects an assignment of the rights purportedly transferred to Mr. Baxendale-Walker pursuant to the 18 December 2015 Assignment and the 19 January 2016 Assignment to Twin Benefits.
iv) By the 10 May 2016 Assignment, Tom and Freya purported to transfer to Twin Benefits their rights under the Trust and under the Sub-Trust. By virtue of the Confiance Proceedings and the Confiance Settlement, neither of these trusts any longer exists. Nor, given that the Asplin J. Order continues to stand, can it seriously be suggested that Tom and Freya have any rights arising out of a "Potential Implied Trust". Moreover, I have held that the Asplin J. Order cannot be revoked or varied in these proceedings.
D. THE SECOND REQUIREMENT: A GOOD ARGUABLE CASE THAT THE CASE FALLS WITHIN ONE OR MORE OF THE GATEWAYS
(1) The law
i) Where the facts required to found jurisdiction are disputed, the applicant must show a good arguable case that those facts are true. The court will not make any factual determination intended to be binding at trial. The test has two strands, a relative one and an absolute one. The relative test is whether, on the evidence before the court, the applicant has much the better of the argument (see, e.g. Canada Trust Co. v. Stoltenberg (No. 2)  1 WLR 547 at 555 (per Waller L.J.). But relative plausibility is only a necessary and not a sufficient condition. There must – and this is the absolute part of the test – be some substance to the case articulated by the applicant (see Brownlie v. Four Seasons Holdings Inc.  EWCA Civ 655 at  (per Arden L.J.). Because this is a question of exorbitant jurisdiction, the evidence must achieve an acceptable level of quality and adequacy, albeit that the standard to be attained is not that of succeeding on a balance of probabilities.
ii) Where there is a pure point of law, not involving a factual dispute, on which jurisdiction depends, the court should normally decide it: see Altimo Holdings and Investment Ltd. V. Kyrgyz Mobil Tel Ltd  UKPC 7 at  (per Lord Collins).
(2) The ambit of Gateway (9)
"A claim is made in tort where –
(a) damage was sustained, or will be sustained, within the jurisdiction; or
(b) damage which has been or will be sustained results from an act committed or likely to be committed, within the jurisdiction."
i) The procedural claims – for the reasons given in paragraphs 87 to 98 above – are not private law claims at all. They are applications made during the course of existing proceedings before the English Courts and cannot, in my judgment, fall under any head of Practice Direction 6B.
ii) A restitutionary claim – a claim for unjust enrichment – is not a tortious claim. It is not necessary in this judgment to consider the precise borderline between tort and restitution. This is not a "difficult" case, where (for instance) restitution is claimed as a remedy arising out of a tort committed by the defendant: see Mitchell, Mitchell & Watterson (eds.), Goff & Jones: The Law of Unjust Enrichment, 9th ed. (2016) at paragraphs 1-03 to 1-05. This is plainly a restitutionary claim which has its own Gateway, Gateway (16). Gateway (16) is framed as follows:
"A claim is for restitution where –
(a) the defendant's alleged liability arises out of acts committed within the jurisdiction; or
(b) the enrichment is obtained within the jurisdiction; or
(c) the claim is governed by the law of England and Wales."
That Gateway has not been relied upon here. For the reasons I have given, however, I do not consider that, even if Gateway (16) had been relied upon, Twin Benefits could have shown a good arguable case that the restitutionary claim fell within Gateway (16).
"7.30 For choice of law purposes, the overlapping sources may be considered. A fiduciary duty may arise because one party has voluntarily undertaken the obligation. Scott said: "A fiduciary is a person who undertakes to act in the interest of another person. It is immaterial whether the undertaking is in the form of a contract [or] is gratuitous." Where the fiduciary duty derives from a voluntary undertaking in an agreement, whether it amounts to a contract or not in domestic law, the contract analogy for the purpose of choice of law is very strong. Even if the voluntary assumption is made without actual agreement, the context of a consensual relationship also suggests the appropriateness of a contractual analysis.
7.31 A fiduciary obligation may arise because one party has voluntarily placed himself in a position to which the obligation normally attaches, resulting in the reasonable expectation of the other that the former would not act in his own interest. If the context is consensual, the argument in the previous paragraph applies. The duty may be imposed where a person assumes an office carrying fiduciary obligations, for example, as a trustee, executor, administrator, agent, guardian, or liquidator. Many of these offices are the subject of existing choice of law categories which may provide analogies for analysing duties arising in these contexts.
7.32 Some legal systems may also impose what are sometimes labelled "fiduciary"obligations between strangers to further some legal objective. A stranger to a trust or fiduciary relationship who commits a wrong against the beneficiary, for example, by assisting in the breach of trust or fiduciary duty, is sometimes said to owe a fiduciary duty to the beneficiary. A stranger may owe a fiduciary duty to return money or property to another, where he has been unjustly enriched at the expense of the claimant, was received property which the law deems to belong to the claimant. The categories of tort, restitution, and property provide analogies."
i) The mere fact that Gateway (6) uses the label "claim…made in respect of a contract" and Gateway (9) "claim…made in tort" is insufficient to exclude a breach of fiduciary duty from the ambit of the Gateway provided that breach is in substance a contractual claim (for the purposes of Gateway (6)) or in substance a tortious claim (for the purposes of Gateway (9)).
ii) In my judgment, the process of determining the ambit of the Gateways in the Practice Direction "falls to be undertaken in a broad internationalist spirit in accordance with the conflict of laws of the forum": Raiffeisen Zentralbank Österreich AG v. Five Star trading LLC  QB 825 at  (per Mance L.J.).
iii) Of course, there will be cases where a claim does not in substance fall within a Gateway. In such a case, it is clear that service out cannot take place. Thus, in Kitechnology BV v. Unicor GmbH Plastmaschinen  F.S.R. 765 at 777 to 779, a claim for breach of an equitable obligation of confidence did not fall within Gateway 9, and a new Gateway (Gateway (21)) had to be inserted into the rules. On the other hand, in Vidal-Hall v. Google Inc.  EWCA Civ 311 at , the Court of Appeal held (after some debate) that "misuse of private information should now be recognised as a tort for the purposes of service out of the jurisdiction".