IN THE HIGH COURT OF JUSTICE
CO/4506/98QUEEN’S BENCH DIVISION
(CROWN OFFICE LIST)
Royal Courts of Justice
Strand
London WC2
Monday, 31st January 2000
B e f o r e:
LORD JUSTICE SIMON BROWN
MR JUSTICE KEENE
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HM ATTORNEY GENERAL
-v-
GEDALJAHU EBERT
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(Computer-aided Transcript of the Stenograph Notes of
Smith Bernal Reporting Limited
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MR ROBERT JAY (instructed by the Treasury Solicitors appeared on behalf of the Applicant).
The Respondent appeared in person.
J U D G M E N T
(As Approved)
Monday, 31st January
JUDGMENT
1. LORD JUSTICE SIMON BROWN: There is before us an application by the Attorney General for a Civil Proceedings Order against the respondent, Mr Ebert, under section 42 of the Supreme Court Act 1981. It is listed for a two day hearing and given the long and complicated history of the huge number of proceedings of one sort or another instigated by this respondent over the years, and the abundance of material before the Court, that estimate is understandable. All that makes it the more unfortunate that we are going to adjourn the motion, as this morning we indicated we felt bound to do.
2. Let me now, in the hope that it may assist whatever Court hereafter comes to be seised of this matter, comparatively briefly explain why. The origins of the litigation which eventually precipitated this application lie in the late 1980s when Mr Ebert commenced a property development enterprise with a Mr Morris Wolff through a company which substantially they owned, Europride Limited.
3. The company obtained facilities from various banks, including the Midland Bank. With the benefit of this finance it acquired a substantial property portfolio consisting of around 220 properties. The Midland Bank obtained two joint and several guarantees from both the respondent and Mr Morris Wolff. The company experienced financial difficulties associated with the collapse of the property market and, in May 1992, the respondent and Mr Wolff fell out. Each alleged that the other had received substantial sums from the company without authority, and these disputes became the subject of litigation. That litigation, I should observe, is not material upon which the Attorney General relies in these proceedings.
4. Ultimately, those disputes went, by agreement between the parties, for resolution by arbitration before the Beth Din, the Court of the Chief Rabbi. That, however, was not the end of the matter.
5. Eventually, in October 1992, demand was made on Europride by one of the lending banks, Bank Leumi, and they appointed administrative receivers. The Midland Bank made a separate demand and themselves appointed receivers in relation to the three properties charged to it. In March 1993, the entire portfolio was sold for just over £2.5 million, but that by no means extinguished the company’s overall liability.
6. The later background to the present application is to be found in the Court of Appeal’s judgment given by the Master of the Rolls, on 30th March 1993, in Ebert v Venvil [1999] 3 WLR 670, the case which decided that it is within the High Court’s inherent jurisdiction to make extended Grepe v Loam orders. Two such orders previously made against Mr Ebert by Neuberger J were in issue at that time. Since then several more such orders have been made against him.
7. The facts which for present purposes it is necessary to focus on are these. A bankruptcy order was made against the respondent on 22nd July 1997. It was made on a petition presented on 22nd November 1996 by a Mr Ralph Wolff, Mr Morris Wolff’s brother, and that petition in turn was based upon a statutory demand served on the respondent on 29th March 1996. The statutory demand related to monies claimed by Ralph Wolff from the respondent pursuant to assignment to Ralph Wolff by the Midland Bank in respect of a judgment debt which they have secured against Mr Morris West, i.e. the assignee’s brother, in the sum of £55,000-odd, the sum for which Morris Wolff was liable to the bank as a guarantor, jointly with the respondent, of Europride’s liability to the bank.
8. Of course, by taking an assignment of the bank’s judgment debt against his brother, Ralph Wolff was then able to recover the whole of that debt from the respondent, whereas had Morris Wolff himself satisfied the debt, his claim against the respondent would have been limited to a 50 per cent contribution pursuant to their joint and several guarantee obligation.
9. Not surprisingly, the respondent was incensed about this and from first to last his central contention has been that the brothers Wolff conspired against him and that in truth theirs was not a genuine transaction and it never led to a valid assignment.
10. Those allegations have formed the foundation of a great deal of the litigation on which the Attorney General seeks to rely in the present application. It is convenient at this stage to quote a short passage from the Master of the Roll’s judgment at page 682:
“As has been made clear in a number of judgments in the bankruptcy proceedings, Mr Ebert’s bankruptcy was the result of the assignment. The Midland Bank obtained judgments against Mr Morris Wolff and Mr Ebert of £55,894.7 as joint guarantors. Mr Ralph Wolff supplied money to Mr Morris Wolff’s solicitors to enable the judgment debt to be paid so as to save his brother from threatened bankruptcy. The arrangement was that in consideration of payment of £67,780 the assignment referred to in the originating summons would be executed and Mr Morris Wolff would be released from all obligations under the guarantee. The money was paid and the assignment was executed. On 29 March 1996 Mr Ralph Wolff served on Mr Ebert a statutory demand for the amount that had been paid. On 22 November 1996 Mr Ralph Wolff presented a petition which resulted in a bankruptcy order against Mr Ebert. Mr Ebert then launched a number of applications to annul that order. Ultimately those applications to annul came before Neuberger J on 10 November 1997. The judge refused his applications. Mr Ebert sought leave to appeal to this court. That application came before Potter and Mummery LJJ on 25 March 1998. They refused him leave to appeal. In his judgment Potter LJ set out the background and then he came to consider Mr Ebert’s argument relating to the assignment.”
11. The Master of the Rolls then quoted various passages from Potter LJ’s judgment, which included this:
“In relation to the applicant’s argument that the assignment was not a true assignment but was in effect a means by which Morris Wolff reduced his liability under the guarantee by circumventing the rules on contribution, the judge considered the documentation disclosed and held that it was clear that the money paid in consideration for the assignment did indeed come from Morris Wolff rather than his brother, albeit via Ralph Wolff’s bank account.’”
12. Potter LJ was there, it seems perfectly plain, inadvertently muddling up the two brothers. Neuberger J in his judgment of 10th December 1997 had concluded that:
“... it seems to me quite clear that the money did come from Ralph Wolff.“
13. As matters stood before the Court of Appeal, on 30th March 1999, it is therefore to my mind unsurprising that one finds in the Court’s judgment at page 672:
“That a court should have the jurisdiction which is in issue can hardly be doubted. The facts of Mr Ebert’s litigation make the need for the jurisdiction abundantly clear. Mr Ebert by a series of vexatious proceedings has caused the parties to these proceedings to incur very considerable expense which they have little, or no, hope of recovering. Those parties are the liquidator of Europride Ltd, the Midland Bank Plc, Mr Ebert’s trustee in bankruptcy and Mr Ralph Wolff.
We are prepared to accept that Mr Ebert may initially have had reason to consider that he had been hard done by, because his co-guarantor had avoided all liability; but it is clear that Mr Ebert has already brought vexatious proceedings, and that he will continue to bring such proceedings unless he is restrained from doing so.”
14. Since March 1999, moreover, the respondent has made innumerable further applications. One finds this passage in Neuberger J’s judgment of 21st December 1999, a judgment included in the respondent’s own bundles put before the Court:
“Having obtained an assignment of the judgment debt, Mr Ralph Wolff petitioned for Mr Ebert’s bankruptcy, and eventually succeeded in bankrupting Mr Ebert. Since then, Mr Ebert has made a total of over 50 (possibly over 80) applications of various sorts, all of which have, regrettably for him, failed.”
15. Much of this litigation has about it the flavour of apparently extreme unreasonableness on the respondent’s part. Again, by way of example only, I quote this from Laddie J’s judgment of 18th September 1997, dismissing a committal motion brought by the respondent against a Mr Rabinowicz, the solicitor acting for Mr Wolff throughout these disputes:
“I have come to the conclusion that all of the allegations made by Mr Ebert are unjustified. Not only are they unjustified, they are, in my view, and have always been unarguable. In the most extreme meaning of the words, this application is an abuse of the process of the Court. It is, as far as I can see, an example of Mr Ebert’s willingness to make wild and unsupportable allegations of the most damning nature against, not just his former business partner, but anybody associated with him. This Notice of Motion should not have been brought.”
16. In short, I have to say -- and indeed I observed as much this morning -- this is, on its face, about as strong a section 42 application as one could ever conceive of. It involves innumerable and apparently wild and hopeless applications which constantly attempt to relitigate all the main issues which have now long since been resolved, apparently decisively, against the respondent.
17. Why then are we adjourning it rather than disposing of it? The answer is to be found in an order made by Laddie J on 12th January 2000, on an application to proceed despite, or rather pursuant to, one of the Grepe v Loam orders made against the respondent. The order reads as follows:
“(1) that the current Application in so far as it concerns the following issues namely
(i) whether or not the assignment from the Midland Bank Plc to Morris Wolff was valid and
(ii) whether the funds for the said assignment came from Morris Wolff or from Ralph Wolff
be adjourned to heard between the parties.
(2) that the hearing of the said adjourned Application take place on a date to be fixed with a time estimate of one day before Mr Justice Laddie and Mr Justice Neuberger sitting together
(3) that at the hearing of the said adjourned Application the following parties be permitted to be heard and represented
(a) Ralph Wolff
(c) [sic] The Midland Bank
(d) Mr Rabinowicz ...”
18. Until this morning that order was included amongst our papers without explanation, and I confess to have found it decidedly puzzling. Now, however, we have before us a transcript of that hearing which includes these important remarks by the judge:
“... the material that you have put before me, relating to whether or not the money for the assignment to Midland came from Morris or Ralph. It seems to me that you may have a point and if you are right, if you are right, it looks like there was some dirty work between Morris and Ralph for the purpose of assigning the debt so as to seriously disadvantage you. I think I should tell you that I have discussed it with Neuberger J. He is also concerned that you may have a serious point on this. I am going to direct that on the issue of whether or not the funding for the assignment really came from Morris or Ralph, I am going to allow you to have an inter parties application, that is to call upon the other side to be present so that we can go through this between the parties ...
Both Neuberger J and I think that if you are right on this it could seriously undermine the petition, the bankruptcy petition ... Neuberger J and I will sit together to hear it ...”
19. Then, towards the end of the hearing, appear these passages:
“Now if the Court, if Neuberger J and I come to the conclusion that you have made out a sufficient case to justify a proper investigation of the issue, then it may be that we will include other issues as well. But I do not want you to be under any misapprehension. This has taken a long time through the Courts and the Court will be naturally reluctant to reopen issues which should have been dealt with time and time again, all right?
... I do not want to give you false hopes, but what I do think is you have raised enough for me today, both I and Neuberger J are concerned. If you make out that there is a serious point here at issue you can be confident that neither Neuberger J or I will stop you running it.”
20. In the light of those remarks, the concern now expressed by both Laddie J and Neuberger J, two of the judges who have been most closely concerned with all this litigation over recent years, and the fact that there is now to be a hearing (presently listed, we are told, for 15th May) of these crucial issues which underlie so much of this litigation, it has seemed to us wholly inappropriate that we should dispose of the section 42 application prior to the resolution of these issues. Depending upon their outcome and depending too no doubt on the terms in which judgment in that matter comes to be expressed may well depend some part at least of this Court’s approach to the Attorney General’s application.
21. That is not to say, let me at once make plain, that even were the respondent finally to succeed on these outstanding issues, and perhaps thereby unravel the entire process by which he was ultimately judged bankrupt, he will necessarily be able to resist the application. After all, much of this litigation may well, in any event, be shown to have been wholly unjustified and indeed vexatious. But at least, if he succeeds, he will be able to assert with some arguable justification:
“My repeated applications demonstrate not that I am vexatious but that I am properly persistent in my quest for justice.”
22. I add only these two final comments. First, there can be no possible criticism of the Attorney General for having instigated and continued these proceedings to this point. Mr Ebert sought to persuade us that the Attorney General should have recognised the merits of his attempt to impugn the assignment rather than wait for Laddie J to do so. That however, besides assuming unjustifiably success in the forthcoming hearing of that issue, is to misunderstand the Attorney General’s role. That is to act essentially upon the basis of the Courts’ judgments, not to question their correctness.
23. Second, I would firmly discourage the respondent from making any further applications whatever in any of this litigation until, at the earliest, the conclusion of the forthcoming hearing of the assignment issue. We are told that even after Laddie J’s order of 12th January, the respondent has unsuccessfully made a further application pursuant to one of the Grepe v Loam orders against him.
24. In my view, the Courts are well entitled to treat all such applications with the most profound scepticism unless and until the respondent proves to be successful at the May hearing. The only formal order I would propose we make today is that this present motion be adjourned, not to be relisted until after the conclusion of the outstanding issue.
25. MR JUSTICE KEENE: I agree.
26. LORD JUSTICE SIMON BROWN: I have already indicated that the costs of today obviously fall within the proceedings as a whole and are to be reserved to whoever ultimately is seised of them. I do not think we need to say anything else. Perhaps only this: copies of the Court’s judgment should be transcribed at the public expense. One copy to be kept on the Court File, others to be given to the parties.
27. THE RESPONDENT: Thank you very much, my Lord.
28. LORD JUSTICE SIMON BROWN: Mr Jay, can we leave it to you to, so to speak, liaise with the Court as to the listing of this matter? Obviously, you can do it together but we want to get it -- you want it back as well -- but it cannot come back until that matter is dealt with. It should come back as soon as reasonably practical, but obviously at the convenience of both of you after that.
29. THE RESPONDENT: Will the order be drawn up? I have to show it. I have a few cases against me that are waiting for it.
30. LORD JUSTICE SIMON BROWN: I understand.
31. THE RESPONDENT: The Court are waiting for this order to know what happened today --
32. LORD JUSTICE SIMON BROWN: Apparently it should be finished by the end of today.
Thank you.
Attorney General v Ebert (2)
Ebert v Official Receiver (Court of Appeal)
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