Tonstate Group Ltd & Ors v Wojakovski & Ors

Tonstate Group Ltd & Ors v Wojakovski & Ors

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 is not a recoverable benefit under the DBA or the Regulations. The DBA would be unenforceable if it purported to entitle payment based on retention of shares. Funds held by solicitors from third-party sources for payment of legal fees are not assets within the scope of the freezing order. However, due to a real risk of breach of the freezing order or proprietary injunction, further disclosure of the source of legal funding is just and convenient. Properties purchased with misappropriated funds are held on trust for the Tonstate group,...

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: Keidan Harrison LLP; Respondent to Disclosure Application: Raydens Limited (trading as Rayden Solicitors)
Jurisdiction
England and Wales
Judgment Date
30 April 2021
Procedural Posture
Civil Chancery Division / Judgment on Three Interlocutory Applications
Outcome
Applications determined as follows: Section 73 Application dismissed; Disclosure Application allowed in part; Property Transfer Application allowed.
Legal Topics
Damages Based Agreements, Freezing Orders, Disclosure Orders, Property Transfer, Legal Professional Privilege
Civil Procedure Insolvency Trusts Company Law Damages Based Agreements Freezing Orders Disclosure Orders Property Transfer +1 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

Keidan Harrison LLP

Respondent to Disclosure Application

Raydens Limited (trading as Rayden Solicitors)

Respondent to Disclosure Application

Procedural Posture

Civil Chancery Division / Judgment on Three Interlocutory Applications

Legal Issues

  1. 1 Whether Candey Limited is entitled to payment under a damages-based agreement (DBA) and a charge over shares retained by Mr Wojakovski
  2. 2 Whether the DBA is enforceable under the Damages-Based Agreements Regulations 2013
  3. 3 Whether Mr Wojakovski and his solicitors breached a worldwide freezing order by failing to disclose the source of legal funding

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 is not a recoverable benefit under the DBA or the Regulations. The DBA would be unenforceable if it purported to entitle payment based on retention of shares. Funds held by solicitors from third-party sources for payment of legal fees are not assets within the scope of the freezing order. However, due to a real risk of breach of the freezing order or proprietary injunction, further disclosure of the source of legal funding is just and convenient. Properties purchased with misappropriated funds are held on trust for the Tonstate group,...

Court Disposition

Applications determined as follows: Section 73 Application dismissed; Disclosure Application allowed in part; Property Transfer Application allowed.

Orders

  • Section 73 Application by Candey Limited dismissed; no entitlement to payment or charge over shares.
  • Order for disclosure against Mr Wojakovski and Keidan Harrison LLP regarding sources of legal funding; no order against Raydens Limited.