Phillips & Or v. Symes & Robin Symes Ltd [2001] EWHC Ch 395 (9th July, 2001)

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Mr Alan Steinfeld QC, John Stephens, Jessica Chappell & Joe Smouha (instructed by Lane & Ptnrs, Solicitors for the Claimants)

Mr Murray Rosen QC, Matthew Collings & Stephen Tudway (instructed by Lovells, Solicitors for the Defendant)

http://www.courtservice.gov.uk/sitemap.htm under the heading "judgments" on the homepage Mr Justice Hart:

1. The first and second claimants ("the administrators") in this action are the administrators of the estate of the late Christo Michailidis ("Christo") under an English grant of letters of administration dated 8 February 2001. The third claimant ("Despina") is Christo's sister.

2. The first defendant ("Mr Symes") is a connoisseur and dealer in works of art and antiquities, and the owner of 99% of the share capital, and sole director, of the second defendant ("RSL") which is an English registered company incorporated in 1977.

3. From the late 1960's onwards Christo and Mr Symes enjoyed an extremely close relationship, living together in London at 1/3 Seymour Walk, London, SW10, a property originally consisting of two separate houses (No 3 purchased in 1972 and No 1 in 1980). Christo died unexpectedly in an accident in Italy on 5 July 1999. It is common ground that his domicile at death was Greek. It is also common ground that his heirs under Greek law are Despina and his mother Eirene. It was on their application that the grant of letters was made to the administrators who are both partners in Price Waterhouse Coopers domiciled in England.

4. RSL has at all material times carried on a business of dealing in valuable antiquities and other works of art. As already noted RSL has at all material times been ostensibly in the ownership and under the control of Mr Symes. A similar business has also been conducted by, or through the medium of, other companies registered overseas, in particular companies incorporated in Panama (Keiler Trader Inc, Xoilan Trader Inc, and SES Societe d'Expertise et de Surveillance SA). The properties at Seymour Walk were also registered in the names of Panamanian companies, the shares in those companies being held by trustees resident in the Isle of Man.

5. In addition to being a dealer, Mr Symes is also a collector. During Christo's lifetime, the property at Seymour Walk was home to, inter alia, collections of three different descriptions: a collection of Hellenistic antiquities ("the Hellenistic Collection"); a collection of art deco furniture by Eileen Gray ("the Eileen Gray Collection") and a collection of Egyptian antiquities ("the Egyptian Collection").

6. The claims made in this action are of two different kinds. First, it is alleged that all the business carried on during the period of Christo's relationship with Mr Symes was the business of a "partnership, alternatively joint enterprise" between Christo and Mr Symes, in which they shared equally. This is then defined and thereafter referred to in the pleading as "the Enterprise". In so far as assets were purchased with profits from the business it is alleged that those assets were held in equal shares. It is also alleged that the shares in RSL were similarly held. Secondly, it is alleged that three collections which I have mentioned were acquired by Christo for himself and/or Despina, and that they were so acquired with funds provided by Despina. Mr Symes denies these claims.

7. During the period following Christo's death various discussions took place between members or representatives of Christo's family and Mr Symes or those representing him in connection, in broad terms, with the future of the business and the division between the family on the one hand and Mr Symes on the other of assets which had been acquired during the course of the relationship. During the course of these discussions it is alleged that admissions were made by or on behalf of Mr Symes that some such partnership as is now alleged had existed. It is also said that Mr Symes recognised Despina's claims to ownership of a valuable collection of antiquities. As to this claim, it is not disputed that Despina was, and still is, a co-guarantor of a facility enjoyed by RSL with Citibank. That facility (originally for US$5m and Ј1m) stood at US$14m at Christo's death and was increased temporarily (and with Despina's agreement ) to $17m in March 2000. Part of the security for that facility consisted of a collection of antiquities which were represented to belong to Despina. There also exist a number of valuations by Mr Symes of what are described as being Despina's collections, the most recent of which (in a letter dated 22 October 1997) "conservatively valued" Despina's ancient art holdings at US$50m, and included a schedule detailing certain works with an aggregate value of US$16.255m.

8. In the course of these discussions it also emerged that Mr Symes himself laid claim to beneficial ownership of various assets physically located in Greece (immovable property, vessels, and works of art) in the nominal ownership of, or of entities controlled by, Christo's family.

9. By February 2001 it had become clear to Christo's family that legal proceedings would probably be necessary. By that time they had come to appreciate that the Eileen Gray Collection (thought by them to be worth US$20m) had been removed from the Seymour Walk property, along with other items. By letters dated 12 February 2001 the administrators (who had been appointed four days previously) and solicitors acting for Despina wrote to the defendants setting out their respective claims and seeking information and undertakings from them. Shortly thereafter they were informed by Mr Symes' Geneva lawyer (Maitre Tavernier) that Mr Symes had taken up permanent residence in Switzerland.

10. On 23 February 2001 the claim form in these proceedings was issued. The claimants thereafter applied (on 27 February 2001) without notice to Lloyd J for the appointment of a receiver and ancillary injunctive relief, which was granted. It is accepted that these proceedings were served on the defendants for all purposes as to the application in England of the provisions of the Civil Jurisdiction and Judgments Act 1982 ("the 1982 Act") on 28 February 2001.

11. In the meantime Mr Symes had himself, without any warning to the claimants, on 23 February 2001 issued proceedings in Greece in the multi-membered court of first instance in Athens, joining the administrators, Despina and Eirene as defendants. In essence these proceedings claim negative declaratory relief in respect of the matters which are the subject of the English proceedings. There is an issue as to when these proceedings were served on the administrators for the purposes of the 1982 Act

12. By an application notice dated 21 March 2001 the defendant applied for an order that the Court decline jurisdiction in this action, alternatively stay all proceedings herein in accordance with Article 21, alternatively Article 22 of the Brussels Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Disputes ("the Brussels Convention"), which of course has the force of law in England by virtue of the 1982 Act. It is accepted that, even if that application is successful, this court has jurisdiction to grant or continue interim injunctive relief by way of "protective measures" under Article 24 of the Brussels Convention: see section 25 of the 1982 Act. It is also accepted by the defendants that, in the light of the allegations which have been made and the state of the evidence before the court, some such interim relief is appropriate. The exact form which it should take has been in issue before me.

Where proceedings involving the same cause of action and between the same parties are brought in the courts of different Contracting States, any court other than the court first seised shall of its own motion stay its proceedings until such time as the jurisdiction of the court first seised is established.

Where the jurisdiction of the court first seised is established, any court other than the court first seised shall decline jurisdiction in favour of that court.

Where related actions are brought in the courts of different Contracting States, any court other than the court first seised may, while the actions are pending at first instance, stay its proceedings.

A court other than the court first seised may also, on the application of one of the parties, decline jurisdiction if the law of that court permits the consolidation of related actions and the court first seised has jurisdiction over both actions.

For the purposes of this Article, actions are deemed to be related where they are so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings."

"In proceedings which have as their object the validity of the constitution, the nullity or the dissolution of companies or other legal persons or associations of natural or legal persons, or the decisions of their organs, the courts of the Contracting State in which the company, legal person or association has its seat." (emphasis supplied)

15. The claimants submit that, in relation to the administrators' claims against the defendants based on the allegation of a partnership between Mr Symes and Christo, Article 16(2) operates to confer exclusive jurisdiction on the English court. They also submit that the Greek proceedings against the administrators are an abuse of the Convention which this court should be alert to prevent. Subject to those points, the main issue between the parties has been as to whether the English or the Greek court was first "seised" of the respective proceedings for the purposes of Article 21. I will take this point first.

16. It is now settled law that "seised" in Article 21 means "definitively pending"; and that English proceedings are not definitively pending until they have been served on the relevant defendants: see Neste Chemicals SA v DK Lines SA [1994] 2 Lloyds Rep, 6 11-13 and Grupo Torras SA v Sheikh Fahad Mohammed al Sabah [1996] 1 Lloyds LR 7, 20. It is common ground that a similar rule applies in Greece to Greek proceedings. It is also clear that the question of seisin vel non has to be determined in relation to each party, on a party by party basis: see the Grupo Torras case, ibid at 21, Fox v Taher [1997] IL Pr 441; Glencore International AG v Metro Trading International Inc [1999] 2 LL Rep 632, 639-640.

17. The principal question to be determined is therefore when, as between each relevant party, the Greek proceedings were served. This involves a consideration of what is meant by service for this purpose. The facts in relation to the service of the Greek proceedings are as follows:

(1) Service on Despina. This took place by personal service on Despina in Greece on 23 February 2001. No issue arises in relation to this.

(2) Service on the administrators. On 23 February 2001 the proceedings were delivered to the Greek Public Prosecutor's office, that being the recognised method in Greek domestic law for the service of foreign domiciled defendants. On 26 February solicitors instructed on behalf of Mr Symes took steps to serve the administrators personally in England. This was done by an employee of those solicitors attending at the officers PwC at Plumtree Court London EC4A 4HT (the address given for the administrators in the grant of letters of administration and the address from which they had written the letter of 8 February 2001). The employee was told by the doorman that he could not attend on the administrators personally but that, if the documents were left at the offices, they would be seen by the administrators. The documents were accordingly then left at the "deliveries" department of that office. It is accepted that the administrators had them in their hands by the end of the following day (27 February 2001).

(3) Service on Eirene. Eirene was not served with the proceedings until 11 April 2001.

18. In the context of whether a court is seised of proceedings for the purposes of Article 21, the question whether those proceedings have been served is not determined by the foreign domestic rules of procedure. This was settled in Molins plc v GD SpA [2000] 1 WLR 1741 (CA): see per ibid at 1754. Where reliance is sought to be placed on service of proceedings from the courts of one Contracting State on persons in another Contracting State, service must be in accordance with Article IV of the Protocol to the Convention. That provides:

"Judicial and extrajudicial documents drawn up in one Contracting State which have to be served in another Contracting State shall be transmitted in accordance with the procedures laid down in the conventions and agreements concluded between the Contracting States."

19. Two such conventions are potentially applicable here, namely the Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil and Commercial Matters, The Hague, 1965 ("the Hague Convention") and a convention between the United Kingdom and Greece signed on 27 February 1936 and ratified on 16 November 1937 (Treaty Series number 5 of 1938) - ("the 1937 Convention").

(a) When judicial or extra-judicial documents drawn up in the territory of one of the High Contracting Parties are required by a judicial authority situated therein to be served on persons in the territory of the other High Contracting Party, such documents may be served on the recipient, whatever his nationality, by any of the methods provided in Articles 3 and 4 in all cases where such method of service is recognised by the law of the country of origin."

"(a) Service may be effected, without any request to or intervention of the authorities of the country of execution, by any of the following methods:

(2) By an agent appointed for the purpose either by the judicial authority of the country of origin or by the party on whose application the document was issued;

(4) By any other method of service which is not illegal, under the law existing at the time of service, in the country of execution

(d) It is understood that the question of the validity of any service effected by the use of any of the methods referred to in paragraph (a) of this Article will remain a matter for the free determination of the respective courts of the High Contracting Parties in accordance with their laws."

21. Mr Steinfeld QC submitted on behalf of the administrators that service on the Greek public prosecutor was not good service for Brussels Convention purposes. I accept that submission: nothing in either the 1937 Convention or the Hague Convention legitimises it. He further submitted that the service effected at the administrators' office on 26 February was not good service under the Civil Procedure Rules and that, even if it were, Mr Symes had not demonstrated that such service was "recognised" by Greek law within Article 2(a) of the 1937 Convention. He had a similar point to make in relation to the Hague Convention, arguing that the concession (or "common ground") in Molins plc v G.D.S.p.A [2000] 1 WLR 1741 at p. 1748 that Article 15 of the Hague Convention authorised any method of service prescribed by the internal law of the State addressed was based on a mis-reading of Article 15. He submitted that Article 15 was concerned solely with conditions precedent to jurisdiction under the Hague Convention to enter judgment in default of appearance. As to that, it seems to me that Mr Steinfeld may well be right. It is, however, unnecessary to decide the point since the argument, to be successful, depends on his satisfying me that the Greek court would not recognise CPR service as effective service (or, more accurately, that the Symes defendants had not discharged the burden of showing that it would be so recognised).

22. As to that, I am satisfied that the Greek court would recognise as good service any mode of service treated as good service by the English court. That seems to me clear from a statement of Mr George J. Moratis, a Greek Attorney-at-law instructed on behalf of the Symes defendants and not challenged as to Greek law by the claimants' expert Professor Kerameus. He there states:

"As regards service of legal process, same is effected in Greece by judicial bailiffs, who are officers of the court. In case the addressee is domiciled outside Greece, service may be made either (a) by service upon the public prosecutor of the court before which the lawsuit is addressed, in which case the service is completed upon delivery of the relevant instrument to the public prosecutor, or (b) in accordance with the formalities provided for by the law of the place where the addressee is domiciled. These rules are laid down in articles 134, 136(1) and 137 CCPr, and art. 137 provides that:

137. Service upon those having their domicile or registered office outside Greece [abroad] may be also made in accordance with the formalities of foreign law, by an agent specified thereunder."

23. The question therefore resolves into whether service on the administrators by leaving the documents at their office on 26 February 2001 was good service for the purposes of the CPR. CPR Part 6.2(1), under the heading "Methods of Service - General" provides that:

the document must be sent or transmitted to, or left at, the place shown in the following table.

[The Table, not apparently reproducible within the template on which this judgment is produced, is appended]

24. Mr Rosen QC submitted on behalf of Mr Symes that the administrators had been properly served as "proprietors of a business". It was common ground that they were partners in PwC and that the office was their place of business. Mr Steinfeld conceded that as such partners they were proprietors of a business. He submitted, however, that leaving the documents at their place of business would only have been good service if they were sued in their capacity as proprietors of a business, i.e. in their capacity as partners in PwC. Here the claim against them was in their capacity as individuals entitled to administer the estate under the grant. It followed, he submitted, that the only applicable rubric in the table was the first. He supported that by referring to the significance of the heading of the left hand column of the table, which reads "Nature of party to be served".

25. I do not think that that this submission is correct. The point is, however, not an altogether easy one. At first sight the categories in the table do appear to be exclusive. That is certainly the case in relation to the last three categories of artificial person. It is, however, less clear in relation to the first three categories. Each of these deals with service on a natural, as opposed to artificial, person. It can be argued that, because in each case separate and specific allowance is made for service at the individual's residence, the categories are intended to be read as mutually exclusive. To put it another way, if the "place of business" alternative in the case of a proprietor of a business is available wherever an individual being sued happens to be the proprietor of a business, why provide specifically in that category that he may also be served at his place of residence? The table has already told us that he may be. That in turn supports the argument that the table is contemplating the particular capacity in which the individual is being served with the document in question.

26. Despite these linguistic arguments, I favour the view that the table is not directing attention to the capacity in which a particular party is being sued or the nature of the proceedings in which he (or it) is being sued. It is simply setting out a variety of methods of service, more than one of which (in the case of an individual being sued) may be used. The purpose of rules about service is to provide a mechanism for ensuring that the subject matter of service comes to the attention of the person served. To construe these rules in the way suggested by Mr Steinfeld would be to introduce a technicality into those rules which would be foreign to their spirit.

27. Accordingly, subject to one remaining point, I conclude that the Greek court was seised of the proceedings against the administrators on 27 February 2001.

28. The remaining point, if it is a good one, is good in relation not only to the Greek proceedings against the administrators but also to the Greek proceedings against Despina. It is common ground that for convention purposes these have to be looked at separately (save, arguably, for Article 22 purposes). There is no doubt that Despina was validly served in Greece with the Greek proceedings before her English proceedings were served on the Symes defendants. This remaining point is the only one available to her. It was raised, very late in the day, by Mr Papadimitriou (a Greek lawyer instructed by, but no relation of, Despina). In his statement dated 9 May 2001 he said this:

"According to article 6 of Greek Law 2479/1997 which came into force on 16 September 2000 (pursuant to article 18 of Law 2743/1999), an action may not be heard before the Multi-Member Court of First Instance if the claimant has not, when serving the lawsuit, also summoned the defendant to appear at a specific time, date and place to attend a "conciliation attempt". This provision is included in article 214A of the Greek Code of Civil Procedure."

He then set out the relevant sections in translation of the Code. It is unnecessary for me to set them out in this judgment.

29. This seems to me to be a matter pre-eminently for the Greek court. The weight of the expert evidence before me is quite simply against the proposition that the Greek court was not seised of the suit against Despina following personal service of those proceedings on her. Mr Moratis' initial evidence was clearly to that effect and Professor Kerameus did not in any way dissent from that evidence of Greek law. It is, moreover, clear from the provisions set out by Mr Papadimitriou (in particular Article 214A 9) that non-compliance with the provision does not operate as an absolute bar on the Court's ability to proceed to a hearing. The point has to be taken. The provisions appear to assume that the court is already seised, for otherwise there would be no "first hearing" at which the point might be taken.

30. This argument ran as follows. The fundamental principle of the Convention is that "persons domiciled in a Contracting State shall ...... be sued in the courts of that State". Prima facie, therefore the administrators should have been sued in England. The only reason that they can be sued in Greece is the provision in Article 6(1) which provides that "A person domiciled in a Contracting State may also be sued - (1) where he is one of a number of defendants, in the courts for the place where any one of them is domiciled". Article 6(1) should not, however, be interpreted so as to permit a claimant to issue sham proceedings against one defendant in order to obtain jurisdiction over another. The European Court has held that Article 6(1) only applies if it is necessary to hear the claims against both defendants together in order to prevent the possibility of irreconcilable verdicts if they were not heard together: see Kalfelis v Schroder [1988] ECR, 5565 para 8-13, and see also Reunion Europeenne SA v Spliethoff's Bevrachtingskantoor BV [2000] QB 690. Consistently with that principle the English court has held that for a foreign domiciliary to be properly joined as a defendant to proceedings against an English domiciliary, there must be a real issue to be tried as against the latter: see The Rewia [1991] 2 LL Rep 325 at 329, and The Xing Su Hai [1995] 2 LL Rep 15 at 22. In the present case it was submitted that the Greek proceedings suffered from the vice of having been artificially constructed so as to confer jurisdiction on the Greek court over the English defendants. It was further submitted that in those circumstances the English court, notwithstanding that it was second seised for the purposes of Article 21, was not obliged to decline jurisdiction.

31. Both those propositions require to be examined. I confine my attention for this purpose to that part of the Greek proceedings which is directed against the administrators, Despina and Eirene as representing in one capacity or another Christo's estate, as opposed to that part which is directed solely at Despina's separate claims.

32. Mr Steinfeld's submissions adverted to what he described as a "sleight of hand" in the Greek proceedings. Their premise was that in Greek law the only proper claimants to assets forming part of Christo's estate are the Greek heirs, and that the administrators have no status whatsoever in the Greek court. If that is right, asked Mr Steinfeld rhetorically (while making it clear that he did not accept the premise), why should they be parties at all to the Greek proceedings? Conversely, if the correct position is that the administrators are the persons who would be recognised by the Greek court as the persons entitled to chattels situate in England and comprised in Christo's estate at his death, the only persons against whom the negative declaratory relief sought in the Greek proceedings could properly be claimed would be the administrators. Despina and Eirene would be irrelevant to that claim. In short either Despina and Eirene are the only proper respondents to that claim, or the administrators are.

33. There is a good deal to be said for this argument. Certainly the way in which the Greek proceedings has been conceived appears to me to conflate and confuse the distinct questions of what law applies to the question of title to the assets in question and what law applies to the question of who is entitled to succeed to those assets. I should, I confess, be surprised to be told that Greek law does not recognise the title of English administrators in relation to movables situate in England at the date of death of a Greek domiciled Greek national, or indeed that its private international law rules characterise questions of administration of estates and questions of succession in some manner significantly different from that adopted by English law.

34. The point does not, however, in my judgment get Mr Steinfeld all the way to his desired destination. If the point is a good one, it is a point which goes to the basis on which the Greek court is said to have jurisdiction. As it seems to me, only if it could be said incontrovertibly that the Greek proceedings against the Greek heirs were wholly misconceived, could it then be argued that the joinder of the heirs was simply a factitious device with which to clothe the Greek court with jurisdiction as against the English domiciled defendants. There is in fact no trace of such an argument in Professors Kerameus' response to Mr Moratis' initial evidence in support of the Greek court's jurisdiction.

35. In any event, the submissions have also to face the difficulty that under Articles 21 and 22 the court which is seised second cannot, in general, determine that the court first seised has no jurisdiction: see Overseas Union Insurance v New Hampshire Insurance [1991] ECR 1-3317, 3350-3351, paras 25-26. Mr Steinfeld sought to deal with this problem by submitting (quite correctly) that the Overseas Union proposition admitted of exceptions. As the Court itself recognised in that case, its ruling did not cover cases where "the main proceedings fall within an exclusive head of jurisdiction laid down in the convention, in particular in article 16 thereof" (see ibid at para 20). He argued that a case where proceedings have been commenced abroad against persons domiciled in the foreign country for the sole purpose, not of suing them, but of suing a non-domiciliary who has been added under Article 6(1) forms another such exception. The English court (ex hypothesi seised second) should be permitted to take the point because all Convention courts should be astute to prevent abuse of the convention itself.

36. While deriving some support for this approach from the recent decision of the Court of Appeal in Turner v Grovit [2000] 1 QB 345, Mr Steinfeld acknowledged that no direct authority existed for it. Turner v Grovit was concerned with the questions whether the English court, which was first seised of a lis between the parties, had jurisdiction to issue an anti-suit injunction restraining a non-party to the English proceedings from continuing proceedings subsequently commenced in a Convention State (Spain) with the purpose (as found) of harassing and oppressing the claimant in the English proceedings. The court below (Mr David Donaldson QC sitting as a deputy judge of this division) had held that it was for the Spanish court to determine the question of its jurisdiction and, on that ground, refused to continue an anti-suit injunction which had been granted on an interim basis by Pumfrey J. The Court of Appeal disagreed, holding inter alia that this Convention principle did not oust the jurisdiction of the English court to prevent abuse of its own process by the issue in an appropriate case of anti-suit relief in respect of subsequently commenced foreign proceedings.

37. By contrast, the position here seems to me to fall squarely within the spirit of the general proposition for which Overseas Union Insurance is authority. If any abuse of the Convention has taken place, it lies in the invocation of the jurisdiction of the Greek court. It is for the Greek court to determine whether its own processes are being abused, and (as is apparent) the basis on which Mr Steinfeld contends that such abuse has occurred will involve the Greek court determining questions of Greek law. A rule which would allow the court second seised to determine whether the court first seised was only so seised as a result of an abuse of the convention itself would permit the possibility of the two courts reaching different conclusions on that question. That would produce precisely the dissonance which the convention seeks, where possible, to avoid.

38. In any event, while there are certainly strong grounds for supposing that the Greek proceedings have been conceived and constructed as a means not only of depriving the English court of its jurisdiction but also of delaying and impeding effective judicial resolution of the underlying dispute, it is difficult to say that the joinder of causes of action and parties in the Greek proceedings is ex facie abusive. In so far as they are brought against Despina in relation to her personal claims they are plainly brought properly in Greece where she is domiciled. The claim against Christo's estate (however represented for the purposes of the Greek proceedings) is closely connected, so far as its facts are concerned, with the claim against Despina. The underlying dispute is, in reality, between Mr Symes on the one hand and Despina and Eirene on the other. There is no obvious abuse of the Convention in seeking to bring these disputes to trial in the country of the latter's domicile. The fact that this is achieved by the route of negative declaratory relief is neutral: cf per Saville LJ in Boss Group Ltd v Boss France SA [1997] 1 WLR 351 at 358 E-H and per Lord Woolf MR in Messier-Dowty v Sabena SA (No 2) [2001] 1 AER 275 at 284, paragraph 36.

39. A further discrete point was taken by Mr Steinfeld, namely that the Greek court was not seised in relation to the claim against the estate until both the heirs had been served. For this purpose he again relied on the evidence of Mr Papadimitriou, who argued that because in English law the interests of the heirs was indivisible, the Greek court would hold that "the action ought to have been exercised against all those persons holding the said indivisible interests". He rather noticeably does not say that the proceedings would be so regarded by the Greek court if consideration were limited to the claim against the heirs viewed from the point of view of Greek law. Mr Moratis has opined that the Greek court would not hold proceedings against one of a number of co-owners holding an indivisible interest to be inadmissible if not commenced against all the co-owners. On that state of the evidence, the fact that Eirene was not served until 11th April appears to be immaterial to the question whether the Greek court was seised of the proceedings against Despina and the administrators by 28th February.

40. Article 16 constitutes an exception to the general rule in the Convention that proceedings should be brought in the courts of the defendant's domicile. As such it has been held that it should be construed restrictively or, in the words of the ECJ in Sanders v Van der Putte [1977] ECR 2383 at 2391, "must not be given a wider interpretation than is required by [its] objective". The proposition is also illustrated by the ECJ's approach in Webb v Webb [1994] ECR 1-1717. Apart, however, from directing attention to the need to explore what the objective of Article 16 is, the proposition is of no great assistance in deciding whether Article 16 applies in this case. It was common ground between the parties that it was for this court to decide whether or not Article 16 does apply.

41. There was also agreement between the parties that the phrase "proceedings which have as their object...." means proceedings which have as "their principal subject" the relevant matters. That formulation derives from the judgment of Knox J in Newtherapeutics v Katz [1991] Ch 226 at 245. Mr Steinfeld submitted that this was a reference to what was raised as the principal issue in the proceedings. Mr Rosen disagreed. He submitted that a distinction had to be drawn between the issues raised by a particular case and its principal subject matter: it was the latter which had to be identified for the purposes of the Article. For myself, I think there are dangers in seeking to gloss the words of the Convention itself. What has to be kept in mind is the underlying objective of Article 16, namely to reserve to the relevant court questions which are peculiarly within its province.

42. A preliminary question is whether Article 16(2) applies to an English partnership at all. Mr Rosen conceded that the words "associations of natural .... persons" were wide enough in principle to encompass a partnership, and took no point on the "seat" of the partnership alleged being otherwise than in England (a question which falls to be determined, under Section 43 of the 1982 Act, by reference to the place where its central management and control is exercised). He also accepted that the report by Professor Peter Schlosser, referred to in Section 3(3)(b) of the 1982 Act, expressly stated as follows:

"Finally, it should be pointed out that Article 16(2) also applies to partnerships established under United Kingdom and Irish law (see paragraph 55)."

The reference to paragraph 55 takes the matter no further. Doubt has, however, been expressed by certain commentators as to whether this is correct. Professor Collins (as he then was) in The Civil Jurisdiction and Judgments Act 1982, Butterworths, London 1983, expressed doubt as to whether an association of natural or legal persons was apt to include an English partnership having regard to the definition of "association" in Section 50 of the 1982 Act. He pointed out, however, that other language versions of the Article used expressions which were apt to include partnerships. The same author's edition of Dicey & Morris on The Conflict of Laws, 13th (2000) edition, continues to maintain that there is room for doubt (see para 11-331). O'Malley and Layton's European Civil Practice (1989) opines of the Schlosser view that:

"this should present no difficulty in the case of formally constituted partnerships. The question is perhaps more difficult where the partnership arises incidentally as a matter of law, where there is no formal partnership agreement. This may be beyond the intended scope of Article 16(2)."

43. On this preliminary question I prefer the submissions of Mr Steinfeld. In particular I can see no basis in English law for distinguishing a partnership which is "formally" constituted from one which is not. Subject to the qualifications made by statute and established by the case law, partnership is in English law simply "the relation which subsists between persons carrying on a business in common with a view to profit": see Section 1(1) Partnership Act 1890. The existence of that relation is founded on an agreement between the parties which may be express or inferred from that conduct. No formality is necessary to constitute it. Once constituted certain consequences follow. In particular the English court has a jurisdiction quoad the relationship which is independent of the will of the parties (e.g. to decree a dissolution: see Section 35). This seems to me to be enough to demonstrate sufficient peculiarity to explain why the English court should be given exclusive jurisdiction by Article 16(2).

44. A more difficult question seems to me to be whether the "object" of these proceedings is "the validity of the constitution, the nullity or the dissolution" of a partnership. In submitting that it was not, Mr Rosen argued that the object of these proceedings was in reality to establish the estate's interest in certain assets; and the fact that the route by which it had chosen to assert that it had become entitled to the interest was a partnership did not suffice to mean that the "validity of the creation" or "the dissolution" of the partnership was the principal subject matter of the proceedings. He compared the estate's claim with Despina's claim, drawing attention to their essential similarities. In each case the claim was in essence that Mr Symes or RSL had held assets, or dealt with them, on behalf of another party. The other party's resulting claim was to an account of what had happened to the assets. He also relied on the fact that, in any event, the selected "partnership" route was only one of two alternatives deployed in the pleading to reach the required destination. The alternative of "joint enterprise" suggested some other (it was not clear what) juristic basis for the claim.

45. I have a good deal of sympathy with this submission. In particular, in relation to RSL, I have doubts whether the pleading of partnership is sustainable at all in the light of the known facts. Those are that RSL was owned by Mr Symes and employed Christo. A case can be made (having regard to the amount of Christo's salary and expenses and the amount taken out by Mr Symes in director's fees) that there was an agreement that each would benefit equally from RSL's business, and it may in due course be established that the understanding was that the shares in RSL were held by Mr Symes on trust for himself and Christo in equal shares. All this could be claimed without any assertion of partnership. If the claim were put in this way (invoking a mixture of contract and trust law) no question of "partnership" as understood by the Partnership Act 1890 would arise. Indeed such a claim would, as it seems to me, be inconsistent with a partnership. It is of the essence of a partnership that the business is carried on by the partners. It seems incontrovertible that the business which went through RSL's books was a business carried on, not by Mr Symes and Christo, but by RSL itself. I do not see, on the basis of the evidence before the court, how it can be asserted that RSL was conducting that business as a mere nominee for the "partners". It was plainly conducting that business as the beneficial owner of it. True it may be that there was an underlying agreement between Christo and Mr Symes as to how the profits of that business would be extracted from RSL and shared between them, and as to how the share capital in RSL should be beneficially owned. Such an agreement would not, however, make Mr Symes and Christo "partners" in the eye of English law.

46. The same analysis may apply to business alleged to have been carried on by the various Panamanian entities referred to in paragraph 6 of the Particulars of Claim. Here, however, matters are still shrouded in a good deal of mystery. The evidence currently before the court is consistent with such entities having been no more than mere nominees for the underlying owners or owner of the business transacted in their names.

47. As to the allegation that the business was carried on in part directly by Christo and Mr Symes ("partly on their own account, partly through [RSL] , and partly through other corporate entities" - see paragraph 6 of the Particulars of Claim) there is no contemporary evidence whatsoever of such a business having been carried on. The allegation appears to be mere assertion based on an alleged admission (which is denied) made in the course of the post death negotiations.

48. The allegations of a partnership, vulnerable as they are for these reasons, are, moreover, only part of the picture painted by the proceedings. The other claims made in the proceedings are that "[a]s well as conducting the business of the Enterprise" Christo acquired for himself and/or Despina collections which included the Hellenistic Collection, the Eileen Gray Collection and the Egyptian Collection, now wrongly retained by Mr Symes and/or converted to his own use. These claims have nothing to do with any partnership claim.

49. Can it therefore be said that these proceedings have as their principal object the validity of the constitution, the nullity or the dissolution of a partnership? Neither of the two English authorities which have examined this question under Article 16(2) provide a direct answer to the question. In Newtherapeutics v Katz [1991] Ch 226 an English company sued two of its directors claiming that they had acted without authority and in breach of duty in signing certain contracts. The jurisdiction question therefore turned on the question whether the principal object was "the decisions of [the company's] organs" for the purposes of Article 16(2). It was held that the claim that the directors had acted without authority did fall within these words, but that the claim that the directors were in breach of duty because of the detrimental nature of the transactions did not. In Grupo Torras SA v Sheikh Fahad Mohammed Al-Sabah [1996] 1 Lloyds Rep 7 (C.A) directors of a Spanish company were alleged to have engaged in a fraudulent conspiracy to misappropriate its funds. The Court of Appeal held that this claim was not caught by Article 16(2). As Stuart-Smith LJ put it, at p.16 of the report:

"it is impossible to accept the proposition that in misappropriating [the company's] money the alleged conspirators were acting as it agents or organs, let alone that "decisions" of its organs were involved."

The court left open the question whether Knox J had been right in Katz in his second holding.

50. I have not found this an easy question to decide. On further reflection I adhere to the provisional view which I expressed to the parties during the course of the hearing, namely that the principal object of these proceedings (or at least that part of them concerned with "the Enterprise") is the establishment of the validity, or existence, of the partnership and the working out of the consequence of its dissolution. It seems to me that "dissolution" in Article 16(2) should be construed as including not only dissolution in the sense in which it is used in the Partnership Act (as to which the partnership, if it existed, was dissolved on Christo's death) but also the winding up of its affairs. Viewed in this light, the claims which are made in these proceedings based on the allegation of a partnership fall within Article 16(2). Had there been an express ("formal") agreement for partnership, there would I think have been much less room for doubt on the matter. Having rejected a distinction between "formal" and "informal" partnerships, the doubts which I have expressed on the point can be seen to arise from misgivings as to the sustainability, as opposed to the underlying nature, of the claim. The claimants have chosen to base their claim on a partnership analysis. The allegation of a joint enterprise appears to me to add nothing. The extent to which, in the future, they may be permitted to amend their pleadings to put their case in relation to the business in some other way will have to be dealt with as and when it arises. I say no more at present than that there may be a strong argument for holding them to the current basis of their pleading.

51. The consequence is that Mr Rosen's application succeeds in relation to Despina's claims, and (in so far as such a claim is maintained) in relation to the administrators' claims that certain assets belonged to Christo independently of the partnership business, but fails in relation to the administrators' claims based on partnership. The result is undeniably and regrettably messy. To the extent that the application succeeds, the appropriate order appears to me to be to stay the proceedings rather than to decline jurisdiction in favour of the Greek Court, since proceedings may yet be taken in Greece to challenge the Greek Court's jurisdiction.

52. I should add one matter by way of postscript. I have referred throughout to the Brussels Convention. However, Mr Steinfeld's written submissions were expressly premised on the applicable Convention being not the Brussels Convention but the Lugano Convention. I did not explore with him in argument his reasons for adopting this stance, or why, in his oral argument, he referred me instead to the text of the Brussels Convention (the texts are identical so far as Article 16(2) is concerned but the interpretative tools are potentially different: see sections 3(3) and 3B(2) of the 1982 Act). As I understand the matter the United Kingdom and Greece are both "Brussels Contracting States" for the purposes of the 1982 Act (see section 1(3)). It is therefore to the Brussels Convention that this judgment refers throughout.

53. The parties are agreed that, irrespective of the outcome of the jurisdiction application, some form of interim regime is appropriate pending trial. The one reservation made by Mr Rosen to this was by reference to Despina's claim and the provision in section 25(1)(a) of the 1982 Act that, for this court to apply protective measures, it was, arguably, necessary that Despina should herself make positive claims in the Greek proceedings. His submission to interim relief was expressly made subject to this reservation. Subject to that point, the outcome of the jurisdiction issue is only relevant in as much as, on the evidence before me, a final hearing in Greece may not take place for some seven years. It is suggested that a trial in England in this division could be achieved within two years. I would agree with that.

54. The existing interlocutory regime has been arrived at as a result principally of the following orders:

(1) Order of Lloyd J dated 27 February 2001. This order, made on a without notice application, appointed a receiver (Mr Wallace of KPMG) to collect in Relevant Chattels and Relevant Documents (as respectively defined) found on certain identified premises. This order was made without limit of time, and required Mr Symes and RSL to co-operate with the receiver and also to deliver up to the receiver Relevant Chattels and Relevant Documents in their control at premises other than those identified. At the same time, an injunction was granted against them in "freezing" form in relation to the assets ordered to be delivered up to the receiver, and also in relation to Relevant Chattels which were at any of the identified premises at Christo's death and the proceeds of sale of any such Relevant Chattels, as well as Christo's "Personal Effects". They were required to swear an affidavit within 7 days detailing the "frozen" assets.

(2) Order of Hart J dated 7 March 2001 made, save in one respect, by consent. This replaced the receivership and the freezing injunction on various undertakings being given. It also modified the requirements of Lloyd J's order in relation to the affidavit required of the defendants. The undertakings (to which I shall return) were given pending the substantive hearing (being this hearing) of the claimants' application dated 28 February 2001, to continue the injunction contained in Lloyd J's order.

(3) Order of Rimer J dated 30 March 2001. This order (made on a without notice application) "froze" all the Relevant Chattels on a world-wide basis and their proceeds of sale, as well as all proceeds of sale of any chattel comprised in the collection valued at $50m referred to in Mr Symes' letter of 22 October 1997 and granted other ancillary relief of a policing nature. The order contained an exception which permitted sales of chattels to take place in circumstances envisaged by the existing undertakings. The claimants were prompted to seek this relief by their discovery that a large number of Relevant Chattels were under Mr Symes' control in Geneva despite apparent assertions to the contrary in his affidavits, and as a result of inconsistencies which appeared to exist in his evidence concerning sales which had taken place in New York in December 2000. The order required further affidavit evidence from the defendants.

(4) Order of Etherton J dated 4 April 2001. This consent order varied Rimer J's order in a number of respects to which it is unnecessary to refer in detail.

(5) Order of Etherton J dated 11 April 2001 and of Neuberger J dated 1 May 2001 making limited provision for enabling Mr Symes to discharge his legal expenses out of the proceeds of sale of assets which would otherwise be frozen.

55. The parties can be congratulated on having reach a large measure of agreement on the general shape which the protective regime should take pending trial. There remain, however, certain issues on which they have been unable to agree. To put these in context, it is helpful to set out the text of those undertakings contained in the Second Schedule to my Order dated 7 March which are said to give rise to difficulty for one side or the other:

"(3) Not to remove any Relevant Chattel from the Premises where it is situate save for the purposes of completing a sale thereof permitted under the terms of this Order or (upon notice being given) from one of the Premises to another

(4) Not to carry out a sale of any Relevant Chattel save for full consideration at arms length and in the ordinary course of business.

(5) To give notice of any sale of any Relevant Chattel as soon as is reasonably practicable after the said sale has been arranged and in the case of a sale of any Relevant Chattel for a price of or more that US$50,000 to give such notice not less than two clear business days prior to the removal of the said Relevant Chattel from any of the Premises.

(6) To pay or cause to be paid the proceeds of any sale of any Relevant Chattel into the account of the 2nd Defendant (account number 700129) with The Citibank Private Bank London (sort code 18-50-08).

(7) Not to cause or permit any expenditure by the 2nd Defendant, save for payments in respect of the following:

(8) To permit access to the Claimants for the purposes of moving into and storing within the Chinese Room at 1/3 Seymour Walk such further Relevant Chattels presently at the said premises as may be nominated by the Claimants and of which notice will be given to the Defendants, and on the Claimants setting the alarm to the said room, the Defendants thereafter to lock the said room.

(9) To attend at the Business Premises and/or the Chinese Room at 1/3 Seymour Walk London SW10 for the purposes of facilitating the Claimants' access thereto at all reasonable times between 9am and 10pm and upon reasonable notice being given by the Claimants of their wish for such access (reasonable notice being reasonable for a person to travel from the Defendants' premises to the premises in question).

(10) To permit the Claimants (by their duly authorised representatives) for the purpose of inspecting the Relevant Chattels therein access to:

a. 3 Ormond Yard Duke of York Street London SW1 at any time and without notice during the hours when those premises are not locked;

b. 1/3 Seymour Walk London SW10 at any time between 9am and 7pm during the time when the 1st Defendant is resident therein."

56. The first area of contention related to the modalities of any sale by the defendants of Relevant Chattels. The existing provision was said to have given rise to substantial difficulties in practice. The defendants complained that the existing machinery had led to a proliferation of inter-solicitor correspondence in connection with each proposed sale, a phenomenon which was expensive, time-consuming and potentially embarrassing to the successful conclusion of the sale in question. The claimants countered that the difficulties had all been of the defendant's own making: on each occasion on which a sale had been notified there had been some circumstance which provoked a reasonable suspicion that all was not what it appeared to be on the surface. Without attempting to decide the merits of what has occurred to date, it seems to me that the practical solution is to impose a regime which has the following elements. First, the notification should be made not less than two clear business days before there is delivery of the item in question to the purchaser. Secondly, the notification should follow a pre-determined format. This should, subject to the cross-undertaking mentioned below, identify the purchaser. Mr Steinfeld produced a draft form which I reproduce at the end of this judgment and which appears to me largely satisfactory for this purpose. It should however be expanded so as to give details of the item's original date of acquisition and acquisition price (with accompanying invoice). Thirdly, the proceeds should be paid into a designated bank account which, if practicable, should be a new account to be opened at Citibank in the name of RSL.

57. The final point on sales is whether the distinction in paragraph (5) of the existing undertakings in relation to the timing of notices between Relevant Chattels worth more, or less, than US$50,000 should be extended also to the amount of detail to be included in the sale notice. As to this I do not think that it should be: the same details of sales should be given irrespective of the value of the Relevant Chattel. The existence of the distinction in relation to timing of the notice can, however, be maintained.

58. I do not pretend that this solution will necessarily obviate in the future the difficulties which have arisen to date. It is, however, the best method I can currently envisage of reconciling on the one hand the defendants' wish to carry on dealing (and in the process realise what may be partnership assets) with the wish of the claimants to be able to monitor the ongoing conduct of the business and to prevent, if necessary, the completion of any sale which is perceived to be mala fide. I deal below with how the resulting monies in the designated account will be dealt with.

59. A still more contentious area surrounds the question whether the defendants, or either of them, should be permitted to make purchases. The effect of the existing orders and undertakings is that neither defendant can effect purchases, RSL because of the provisions of undertaking (7) and Mr Symes because (it is said) the effect of Rimer J's order is to impose a world-wide freezing order on all his assets. Both are thus prevented from continuing the business which is said to have been carried on in partnership, and which Mr Symes claims is now his sole means of livelihood. As Mr Rosen put it in argument, there are really only two possibilities in relation to the business. Either it is permitted to continue (in which case purchases must be catered for by the interlocutory regime) or it must cease altogether.

60. The difficulties and dangers in permitting purchases should not be underestimated. The business of dealing in antiquities is, for a variety of reasons, one that is conducted in large part in a highly discreet international community of dealers and collectors. The value to be placed on a particular item is not readily susceptible to objective verification, and may be affected by highly subjective factors, such as a particular collector's passion, as well as by an appreciation of the risks involved (which may vary from jurisdiction to jurisdiction) in the ability to verify authenticity provenance and title. These problems of valuation are magnified where a particular deal involves (as I imagine it frequently may) an element of part exchange. The claimants' attitude is understandably influenced by a fear that continued dealing by the defendants will not be conducted bona fide, but will be deployed as a means of extracting money from the otherwise frozen pot. All these problems potentially affect sales as well as purchasers, but there is a better chance in relation to sales that the defendants' own self-interest will deter sales at an undervalue. That self-interest will, paradoxically, be increased if the defendants are permitted to trade with at least part of the proceeds.

61. On balance I have been persuaded that the defendants should be allowed to continue trading and therefore be able to make purchases. That raises the question as to (1) what funds should be made available for such trading, and (2) how much protection should be offered to the claimants by way of advance notice in respect of such purchases.

62. On the first of these questions the defendants' proposal was that up to one half of the proceeds of sales paid into the designated account should be available for this purpose. Mr Steinfeld indicated that, if purchases were to be allowed, that was an appropriate limit to set. This would be on the basis that the other half would be applied immediately in reduction of the existing Citibank facility which is guaranteed by Despina. I was not addressed by the parties on how it was proposed that the ordinary expenditure of RSL (including the discharge of its fiscal liabilities) should be dealt with in the context of these arrangements. I think that the right solution in principle is to provide for a reserve in respect of these to be, as it were, a first charge on the monies received into the putative new account, subject to which the division into halves will be made. This requires further thought by the parties.

63. The defendants' proposal on the second question is that the notice should be given as soon as practicable after the purchase has been arranged, should specify the price to be paid, should identify the object in sufficient detail to enable the defendants' to obtain their own advice in relation to it, and should specify the place at which it is to be located. The main point of difference between the parties was as to whether or not the vendor should be identified. The defendants resist having to do this on the grounds that vendors of antiquities will frequently wish to remain anonymous. The same point arises in connection with purchasers. In my judgment, if the interlocutory regime is to work satisfactorily it is essential that the claimants have the largest possible ability to satisfy themselves as to the bona fides of proposed transactions consistent with the defendants' ability to deal on the accustomed confidential basis with the market. This entails the claimants being given information as to the identity of sellers and purchasers but being subject to a stringent prohibition on the use to which they may put that information. I shall therefore only require the identities of such persons to be disclosed on the claimants' undertaking not to reveal that information to any person other than their own experts (and then only on terms of total confidentiality) or to communicate with any such person in any manner which might reveal to him or her the claimants' knowledge of the existence of the transaction without an order of the court. In an appropriate case such an order might be made on a without notice application by the claimants. The regime in relation to moving, selling, inspecting and inventorising Relevant Chattels will have to be extended to items purchased under this regime.

64. A further point made by the claimants is that their expert should have an opportunity of inspecting the item to be purchased before acquisition. This seems to me impractical given the requirement of confidentiality. The purchased item should, however, be available for such inspection following its delivery to the specified premises. I do not understand this to be controversial.

65. As to the timing of the notice, I think that it should be as soon as practicable after the purchase has been arranged and in any event not less that two clear business days before whichever is the earlier of the delivery of the item to the premises or the payment of any part of the purchase price.

66. A further issue between the parties related to whether the defendants should be obliged to indemnify the claimants in respect of losses incurred as a result of purchases permitted under this regime. The correct approach to this seems to me to be to preserve for the claimants their ability to elect either to claim a share of the net proceeds of realisations of Relevant Chattels or to adopt the new transactions and claim a share in the resultant profits. In other words imposition of the protective regime is without prejudice to that potential right to elect. That may be little different in practice from requiring the suggested indemnity, but enables the question to be postponed until the working out of the final accounts of the parties (which themselves may be affected by findings made by the court as to the precise nature of the arrangements to which they were parties during Christo's lifetime).

67. A further point of controversy between the parties related to the question of whether any, and if so what, notice should be given by the claimants in relation to their entry to the specified premises for the purposes of inspecting Relevant Chattels. I cannot see that it is any longer necessary for the claimants to have an ability to enter any premises except upon reasonable notice being given.

68. The final area of disagreement between the parties so far as concerns the basic shape of the interim regime is the extent to which the claimants should themselves give cross-undertakings as a condition of obtaining the continued relief which they seek. I have already identified one area where it seems to me a cross-undertaking is apparent. Other cross-undertakings sought are directed, in broad terms, to reducing the amount of intrusion suffered by the defendants into their ongoing business affairs and, in the case of Mr Symes, the conduct of his private life. Complaints have been made about the manner in which the claimants have, as it is alleged, showered third parties with copies of the orders made to date, of the fact that the administrators have sought to communicate directly with the defendants' accountants (in their capacity as such), of the nature and degree of surveillance to which defendants and their premises have been subjected, and of the manner in which customers of the business have been approached. I have considered carefully whether any or all of these matters should be the subject of cross-undertakings and have concluded that, with the exception already mentioned, none should be. What I will, however, say is this. The interim regime which I envisage is one under which it is intended that the defendants should be entitled to continue to conduct a profitable and successful business. Acts in the future by or on behalf of the claimants which risk damaging that business will prima facie be seen as acts which are contrary to the spirit of the regime, and which may justify some further modification of it in the defendants' favour. I include within that stricture (without making any finding as to what has already occurred) the raising of detailed questions in relation to sale and purchase notices. The purpose of that machinery is not, primarily, to enable the claimants to take steps to restrain such transactions or to investigate their bona fides prior to their completion. It is to provide the claimants with a clear record of the transactions. By not objecting to the transactions the claimants are not to be taken as consenting in any way to them.

69. I would only add this, which is common ground. Experience alone will prove whether or not the regime will work fairly and satisfactorily. Both sides should have permission to come back to court for a variation without having to prove a Chanel v Woolworth change of circumstances.

70. I am hopeful that, with these decisions in principle, the parties will be able to agree a form of draft order. I shall therefore allow at least seven days from the circulation of this judgment in draft for that process to take place. For that purpose the parties' advisors will (contrary to the usual practice) be free to communicate this judgment to their clients (on terms of confidentiality) as from the receipt by them of the draft. Until I have actually made an order replacing those previously made, the latter will continue to apply.

71. The final area which I have to consider is the extent to which Mr Symes should be entitled to resort to otherwise frozen assets in order to meet his reasonable legal expenses. A preliminary question is whether, before any such order is made, Mr Symes should submit himself to cross-examination as to his assets by the defendants. A secondary question relates to the form which any such order might take.

72. The question of cross-examination has already been considered in this context by Neuberger J., whose judgment dated 1st May 2001 also helpfully considered the issues of principle involved where an order of this kind is sought by a defendant in relation to assets to which a claimant makes a proprietary claim. He was dealing with the limited question of what amount Mr Symes should be entitled to spend up to the conclusion of the hearing before me, and on the premise that the monies concerned would come out of a fund already identified by Mr Symes in his affidavit evidence. Neuberger J. listed and considered thirteen factors which he took into account in coming to his final conclusion that, for the purposes of the order which he was asked to make, an order for cross-examination would not be appropriate. It is clear that he had well in mind that there were, as he put it, "real grounds to support the claimants' scepticism" as to Mr Symes' case that he has no source of funds available to him from which to meet his legal expenses.

73. That scepticism has since been reinforced by two matters in particular. First, in a further affidavit Mr Symes adverted to an account with Credit Agricole which he had not previously mentioned and did so in terms which suggested (at first reading) that it was his account rather than RSL's. Further examination of the disclosure revealed, however, that the apparent admission was the result of a draftsman's slip. The account was an RSL account. Such information as the defendant was able to put before the court in relation to the account did, however, provoke further questions as to the current state of the account and the manner in which it was secured. The second matter was the revelation, shortly before the hearing before me but not in the evidence itself, of the existence of a yet further entity ostensibly controlled from the same firm of Swiss accountants (Mr Henri-Albert Jacques) as hold the bearer shares in the offshore Panamanian companies already known to the claimants. The existence of this entity was revealed in a letter dated May 1st 2001 to M. Stephane Jacques from Sotheby's referring to the latter's intention to charge the cost of considering the court orders pursuant to a consignment agreement entered into on 18 April 2001 by Bureau de Developpement Industriel et Commercial S.A. ("BUDICO") and guaranteed by Mr Symes. This has not yet been the subject of any explanation by Mr Symes.

74. The picture painted by Mr Symes in support of his application is that his income has in the past been derived solely from the trading activities (now severely restricted) and that he has no assets or savings with which to replace that income. In his witness statement in support of the original application, he gave the impression that the whole of the now lost income had been paid to him by way of salary and bonuses by RSL. Given his later evidence of the manner in which the offshore companies have been used (see paragraphs 31 to 34 of his fifth affidavit as amplified by paragraphs 32 to 40 of his sixth affidavit) there are strong grounds for supposing that impression to be a misleading one. The existence of BUDICO may imply the existence of continued trading by Mr Symes of exactly the kind which he complains is impossible for him under the terms of the existing interlocutory regime.

75. Notwithstanding these matters, and having carefully considered Neuberger J's own reasoning on the point, I do not think that the decision whether or not to allow legal expenses to be paid should depend upon Mr Symes first submitting himself to an order for cross-examination. Any such cross-examination would, for all the reasons identified by Neuberger J., be likely to develop into a mini-trial which might be difficult to contain and which (given the incidence of the burden of proof in the substantive proceedings) might be unfair to Mr Symes.

76. Approaching the matter on that basis, I find that I come to the same conclusion in relation to future reasonable legal expenses as Neuberger J. did in relation to the application before him, and I do so having considered afresh and for myself each of the thirteen general considerations which he set out in his judgment and which I only refrain from re-expressing in my own words in order not to lengthen an already long judgment. I am fortified in that conclusion by the fact that (prior at least to the revelations about Credit Agricole and Budico) the claimants appeared to be agreeable in principle, albeit reluctantly and subject to safeguards, to a continuation of the regime which he had temporarily authorised.

77. In coming to that conclusion, I have well in mind the evidence and information which is before me and which was not available to Neuberger J. The most striking feature of that evidence is the sheer scale of the activities of the offshore entities which has been revealed. Profits totalling some US$40m appear to have been made from offshore trading in art over the nine years or so prior to Christo's death. There is little reason to suppose that this will have ceased on Christo's death, despite what Mr Symes has to say about Christo's central role in the orchestration of these entities. The BUDICO revelation strongly suggests that this activity may still be going on. None of this, however, affects Mr Symes' central point that the effect of the existing orders, having regard to the width of the definition of Relevant Chattel, is to 'freeze' the whole of his and RSL's business. If the claimants' suspicions are well grounded it may mean that he has been conducting a business in a manner which is in breach of the existing orders and undertakings. It does not alter the application of the general principle, as explained in Sundt Wrigley & Co Ltd v. Wrigley (unreported), 23 June 1993, CA Transcript No 685 of 1993, that it is only in an exceptional case of a strong proprietary claim that a defendant should not be free to draw on enjoined funds to meet the costs of his defence (see also United Mizrahi Bank Ltd. v Doherty [1998] 1 WLR 435 at 437H-440F where the authorities were reviewed by Michael Burton QC (as he then was sitting as a deputy judge of this Division). I can hardly regard this case as one where there is a strong proprietary claim: there is no direct evidence of a partnership; the collections identified as belonging to Despina appear to have been freely dealt with by the defendants during her lifetime and she herself appears to have had no means of identifying their contents; moreover, the current state of the evidence in relation to the Eileen Gray collection appears to favour the defendants' case.

78 Neuberger J's order in relation to legal expenses contained three measures of protection for the claimants. First, it identified a maximum sum expendable on legal expenses in respect of the relevant stage of the proceedings and the particular fund from which they were to be paid. Secondly, it provided that if it should turn out that the expenses had been paid from a fund to which the claimants were wholly or partly entitled (and were not recoverable from the claimants) the costs should be deemed to have been drawn by Mr Symes on account of the profits of the partnership and/or on account of his share of the proceeds of any jointly owned asset. Thirdly, as to any balance of costs not so accounted for, the claimants were to have the right to have Mr Symes' solicitors bills taxed under section 70 Solicitors Act 1974 with an appropriate extension of the period stipulated in section 70(1). The first two points are accepted in principle on behalf of Mr Symes as appropriate in relation to the order which I am asked to make, but in relation to the third his solicitors (Lovells) have expressed their extreme reluctance to act in circumstances where they may be liable to have their bills taxed by the claimants. I find that reluctance entirely understandable for the reasons eloquently put by Mr Huntley of Lovells in his affidavit dated 15th May 2001. However, if Mr Symes is to be permitted to draw on assets which turn out to belong to the claimants for the purposes of his legal expenses it seems to me necessary that the claimants should have the protection of being able, at some point in the proceedings, to challenge the quantum. The choice is between a regime under which the court is invited to approve particular expenditure in advance (which will thereafter be unchallengeable) and one in which the claimants are permitted to challenge the costs after they have been incurred. Of the two the latter appears to me to be the better mechanism. In his affidavit Mr Huntley indicates that he and his partners will have to reconsider their position in the event of my arriving at this conclusion. I think that they should do so, and express the hope that, on such reconsideration, they will conclude that they can continue to act for Mr Symes. If not, a stringent procedure for vetting proposed expenditure in advance will have to be constructed.

	Jonathan Guy Anthony Phillips & Or	Claimants
	- and -
	Robin James Symes & Robin Symes Ltd	Defendant

Nature Of Party To Be Served	Place Of Service
Individual	Usual or last known residence.
Proprietor of a business	Usual or last known residence; or Place of business or last known place of business.
Individual who is suing or being sued in the name of a firm	Usual or last known residence; or Principal or last known place of business of the firm
Corporation incorporated in England and Wales other than a company	Principal office of the corporation; or Any place within the jurisdiction where the corporation carries on its activities and which has a real connection with the claim.
Company registered in England and Wales	Principal office of the company; or Any place of business of the company within the jurisdiction which has a real connection with the claim.
Any other company or corporation	Any place within the jurisdiction where the corporation carries on its activities. Any place of business of the company within the jurisdiction.

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	England and Wales High Court (Chancery Division) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> Phillips & Or v. Symes & Robin Symes Ltd [2001] EWHC Ch 395 (9th July, 2001) URL: http://www.bailii.org/ew/cases/EWHC/Ch/2001/395.html Cite as: [2001] EWHC Ch 395, [2002] 1 WLR 853

England and Wales High Court (Chancery Division) Decisions

Phillips & Or v. Symes & Robin Symes Ltd [2001] EWHC Ch 395 (9th July, 2001)