Phillips & Ors v Symes & ors

The court may impose a comprehensive stay to control prolonged and fragmented litigation where a moratorium is needed to promote finality, protect parties from unnecessary costs and allow time for genuine claims to be formulated.

Such an order may extend to proceedings involving office-holders, including administrators, trustees in bankruptcy and liquidators. The court may restrict the bringing of further claims after a defined period, while preserving liberty to apply where credible new evidence or genuinely unobtainable material justifies further time. The court’s supervisory powers over office-holders must be exercised consistently with their statutory duties to creditors. A stay imposed by an English court should not purport to interfere with proceedings in foreign jurisdictions.

The proceedings arose from long-running disputes concerning the assets and liabilities of a partnership between Mr Symes and the late Christo Michailidis. The Administrators of Mr Michailidis’s estate sought a broad determination that assets discovered by them belonged to the estate. That application was abandoned after the evidence and pleadings disclosed substantial unresolved disputes concerning assets, ownership and necessary parties.

The Administrators instead applied for a stay of the accounts and inquiries. The Trustees in bankruptcy supported that application. The court considered whether the stay should be confined to the accounts and inquiries or should extend to the wider proceedings and associated claims, and how any order should address future claims, office-holders’ duties and foreign proceedings.

1. The Administrators’ proposed application for a declaration attributing all recoverable partnership assets to the deceased’s estate was abandoned. They accepted liability for the Trustees’ and the other relevant party’s costs of that application, to be assessed on the standard basis if not agreed.

2. The court ordered a general stay of the proceedings and associated actions, rather than merely staying the accounts and inquiries. The stay excluded the proceedings concerning the sale of the Akhenaten statue, in which the Trustees were defendants and whose continuation was considered separately justified.

3. The stay was imposed for two years. Any party wishing to commence proceedings concerning the subject matter of the partnership dispute was required to do so within that period, failing which further claims would be barred. The order applied to the Administrators, Trustees, Liquidators and Ms Despina Papadimitrou.

4. The order preserved safeguards. A party could seek an extension where credible evidence showed that a profitable line of inquiry could not yet be pursued. After the two-year period, an application could also be made on evidence or material that could not reasonably have been obtained earlier. The professional parties were given liberty to seek directions concerning the discharge of their functions.

5. The court recognised its supervisory power over administrators, trustees in bankruptcy and liquidators. Their statutory duties to creditors were not absolute and remained subject to appropriate supervisory control by the court. The order did not purport to affect existing proceedings in Athens, Naxos or other foreign jurisdictions.

6. The separate Xoilan proceedings were also stayed for two years, but were to be relisted afterwards because the ownership of the shares remained unresolved and potentially significant.

Not stated in the judgment.