On 6 September 2021, the High Court struck out a £70 million conspiracy claim relating to the purchase and sale of a world-renowned collection of classic Ferraris.
The claimant (“MRL”) acquired the collection in 2014, using financing provided by the First Defendant (“Lohomij”), and subsequently entered into agreements with the Second and Third Defendants (“Bonhams”) to sell the cars at auction. In August 2014, Bonhams sold a Ferrari 250 GTO at auction at Quail Lodge for a world record price of US$34 million. Bonhams subsequently sold other cars from the collection at various other venues and dates. However, MRL was disappointed with the sales, and failed to make repayments to Lohomij. MRL subsequently made various allegations about the conduct of Bonhams and Lohomij in relation to the purchase and sale of the collection. In July 2015, Bonhams, Lohomij and MRL entered into a settlement agreement in respect of MRL’s complaints. MRL and Lohomij thereafter continued to try to arrange sales of the remaining cars from the collection, in order to enable MRL to repay the financing. From time to time, Lohomij (as secured lender over the cars) sought the views of Bonhams, acting by the Sixth Defendant (Mr Knight, a highly regarded expert in the valuation of classic cars) as to sales proposed by MRL.
In May 2020, MRL issued proceedings making a serious and wide-ranging allegation of conspiracy against Lohomij, Bonhams, and their agents which spanned the period before and after the settlement agreement. MRL alleged that the Defendants had set out to injure it in relation to the purchase and sale of the collection, and had conspired to use a large number of unlawful means including breach of contract, breach of fiduciary duty, and procurement of breach of contract. MRL also relied on each of the alleged unlawful means as a free-standing cause of action.
The Defendants applied to strike out the proceedings and/or for summary judgment, on the basis that the claims had been compromised and released by the settlement agreement and/or were incoherent on their face and/or had no real prospect of success in view of the contemporaneous documents.
His Honour Judge Keyser QC, sitting as a Judge of the High Court, held that, as a matter of construction of the settlement agreement, the claim in conspiracy, and all of the alleged free-standing causes of action relating to the period before the settlement agreement, had been compromised and released by the agreement. In so doing, the Court considered the principles governing the construction of releases, in particular in the context of claims involving fraud or dishonesty, and the principle of “sharp practice”.
The Court further held that all of the alleged free-standing causes of action relied on by MRL in the periods both before and after the settlement agreement were incoherent and/or had no real prospect of success in the light of MRL’s own pleaded case and evidence served for the application, and the contemporaneous documents.
The Court therefore struck out all the claims.
Daniel Toledano QC and Oliver Butler acted for Bonhams and Mr Knight, instructed by Davina Given, Lara Stacey and Harriet Evans of RPC.
The full judgment is available here.
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