HKR Middle East Architects Engineering LLC & Ors v English (Approved)

Factual and Procedural Background

The case concerns a dispute between Plaintiffs, including Company A, and the Defendant regarding payments made by Company A to a British Virgin Islands (BVI) entity controlled by the Defendant. The Defendant held shares in Company A as a "caretaker" for one of the Plaintiffs, who was the beneficial but not legal owner at the time. The share transfer was part of a scheme to conceal assets from creditors. The Plaintiffs claimed unjust enrichment against the Defendant for monies transferred to the BVI entity. The High Court delivered a principal judgment on liability, dismissing most claims except for a limited unjust enrichment claim by Company A confined to its unpaid liabilities. Company A applied to revisit this judgment, alleging error in the limitation of its claim to unpaid liabilities rather than the entire amount transferred. The proceedings have not concluded, and no order has been perfected following the principal judgment. The application to revisit the judgment was made prior to the perfection of the order.

Legal Issues Presented

1. Whether the court erred in limiting Company A's unjust enrichment claim to the amount of its unpaid liabilities rather than permitting a claim for the entire monies transferred to the Defendant-controlled BVI entity.
2. Whether the court should exercise its jurisdiction to revisit and correct an alleged error in the principal judgment prior to the perfection of the order.
3. Whether the application to revisit the judgment should be refused on grounds including delay or estoppel.

Arguments of the Parties

Plaintiffs' Arguments

• Company A contends that the court wrongly confined its unjust enrichment claim to unpaid liabilities based on an alleged agreement between one Plaintiff and the Defendant which the court found did not exist.
• They argue that the claim succeeded on grounds other than that agreement, including sham invoices and transfers, and thus no basis existed to limit the claim.
• They assert that alternative claims were properly pleaded and that Company A was entitled to pursue the entire monies transferred.

Defendant's Arguments

• The Defendant contests that any error was made and submits that any challenge to the judgment should be addressed on appeal rather than by revisiting the judgment.
• He emphasizes the importance of finality in litigation and the high threshold for revisiting judgments prior to order perfection.
• The Defendant also questions whether the application is timely, given the extensive proceedings since the principal judgment, and suggests Company A may be estopped or otherwise precluded from this application.

Table of Precedents Cited

Court's Reasoning and Analysis

The court began by identifying the established legal principles governing the revisiting of judgments prior to order perfection, emphasizing the high threshold requiring "strong reasons" or "exceptional circumstances" to justify such intervention. The court acknowledged the importance of finality in litigation and the reluctance to reopen judgments absent compelling justification.

Turning to the facts, the court examined the nature of the claim made by Company A and the evidence presented. It found that the unjust enrichment claim was limited to the unpaid liabilities of Company A, consistent with the pleadings, the evidence, and the findings regarding the true intentions of the Plaintiffs’ principal witness. The court rejected the contention that Company A was entitled to claim the entire monies transferred, noting that the transfers were orchestrated by the beneficial owner to conceal assets from creditors and bankruptcy trustees.

The court found no credible evidence supporting an agreement limiting the claim or entitling Company A to the full amount transferred. It also rejected the argument that the claim was not based on any agreement, explaining that the evidence showed the monies were treated as the beneficial owner’s personal funds, save for the portion required to meet Company A’s liabilities.

Furthermore, the court noted the failure of Company A’s claims based on UAE Company Law, which precluded a broader claim for the return of monies. The court observed that any claim exceeding unpaid liabilities would properly belong to the beneficial owner or his trustee in bankruptcy, not Company A.

The court also addressed the pleadings and submissions, concluding that the claim was consistently framed and run as limited to unpaid liabilities, and that alternative claims were either unsuccessful or not pleaded. The court emphasized that the evidence given by the principal witness could not support a claim for the entire monies.

Finally, the court concluded that no strong or exceptional reasons existed to revisit the principal judgment. The proper avenue for challenging the judgment on these grounds was by appeal. The court also noted that it was unnecessary to consider whether delay or estoppel barred the application.

Holding and Implications

The court REFUSED the application by Company A to revisit and correct the principal judgment insofar as it limited the unjust enrichment claim to the amount of unpaid liabilities.

The direct consequence of this decision is that Company A's claim remains confined to its unpaid liabilities, and the broader claim for the entire monies transferred to the Defendant-controlled BVI entity is not permitted at this stage. The court indicated that any challenge to this limitation should be pursued on appeal. No new precedent was established by this ruling; rather, it reaffirms the strict approach courts take in reopening judgments before order perfection and the importance of finality in litigation.