Tonstate Group Ltd & Ors v Wojakovski & Ors [2021] EWHC 1122 (Ch) (30 April 2021)

Tonstate Group Ltd & Ors v Wojakovski & Ors [2021] EWHC 1122 (Ch) (30 April 2021)

Candey Limited is not entitled to payment under the DBA as Mr Wojakovski did not recover assets from another party in the proceedings; retention of shares did not constitute recovery. Even if the DBA were construed to include the shares, it would be unenforceable under the Damages-Based Agreements Regulations 2013. Funds held by solicitors from third-party sources for legal fees are not assets within the scope of the freezing order, and there was no breach by Mr Wojakovski or his solicitors. However, further disclosure regarding the source of legal funding is justified to ensure compliance with the freezing order and proprietary injunction.

Citation
[2021] EWHC 1122 (Ch)
Parties
Claimant: Tonstate Group Limited; Claimant: Tonstate Edinburgh Limited; Claimant: Dan-Ton Investments Limited; Claimant: Arthur Matyas; Defendant: Edward Wojakovski; Applicant in Section 73 Application: Candey Limited; Respondent to Property Transfer Application: Quastus Holdings Limited; Respondent to Property Transfer Application: Masteve Investments Limited; Respondent to Property Transfer Application: IQ EQ Jersey Limited (as trustee of the Tutella Trust); Respondent to Property Transfer Application: Nadine Wojakovski; Respondent to Disclosure Application: Raydens Limited (trading as Rayden Solicitors); Respondent to Disclosure Application: Keidan Harrison LLP
Jurisdiction
England and Wales
Judgment Date
30 April 2021
Procedural Posture
High Court Chancery Division Business List / Judgment on Three Interlocutory Applications (section 73 Application, Disclosure Application, Property Transfer Application)
Outcome
Section 73 Application dismissed; Disclosure Application granted in part; Property Transfer Application not determined in this judgment.
Legal Topics
Damages Based Agreements, Solicitors' Charges, Freezing Orders, Disclosure Orders, Priority of Charges, Enforceability of Agreements
Civil Procedure Insolvency Company Law Legal Profession Damages Based Agreements Solicitors' Charges Freezing Orders Disclosure Orders +2 more

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Parties

Tonstate Group Limited

Claimant

Tonstate Edinburgh Limited

Claimant

Dan-Ton Investments Limited

Claimant

Arthur Matyas

Claimant

Edward Wojakovski

Defendant

Candey Limited

Applicant in Section 73 Application

Quastus Holdings Limited

Respondent to Property Transfer Application

Masteve Investments Limited

Respondent to Property Transfer Application

IQ EQ Jersey Limited (as trustee of the Tutella Trust)

Respondent to Property Transfer Application

Nadine Wojakovski

Respondent to Property Transfer Application

Raydens Limited (trading as Rayden Solicitors)

Respondent to Disclosure Application

Keidan Harrison LLP

Respondent to Disclosure Application

Procedural Posture

High Court Chancery Division Business List / Judgment on Three Interlocutory Applications (section 73 Application, Disclosure Application, Property Transfer Application)

Legal Issues

  1. 1 Whether Candey Limited is entitled to a charge over shares under a damages-based agreement (DBA) and if the DBA is enforceable under the Damages-Based Agreements Regulations 2013;
  2. 2 Whether Mr Wojakovski or his solicitors breached a worldwide freezing order by failing to disclose the source of legal funding;
  3. 3 Whether further disclosure should be ordered regarding the source of legal funding for Mr Wojakovski.

Ratio Decidendi

Candey Limited is not entitled to payment under the DBA as Mr Wojakovski did not recover assets from another party in the proceedings; retention of shares did not constitute recovery. Even if the DBA were construed to include the shares, it would be unenforceable under the Damages-Based Agreements Regulations 2013. Funds held by solicitors from third-party sources for legal fees are not assets within the scope of the freezing order, and there was no breach by Mr Wojakovski or his solicitors. However, further disclosure regarding the source of legal funding is justified to ensure compliance with the freezing order and proprietary injunction.

Court Disposition

Section 73 Application dismissed; Disclosure Application granted in part; Property Transfer Application not determined in this judgment.

Orders

  • Candey Limited's application for a charge under section 73 Solicitors Act 1974 is dismissed.
  • No payment is due to Candey Limited under the DBA.