Tonstate Group Ltd & Ors v Wojakovski & Ors

Separate proceedings should generally remain separate where combining them would risk disrupting a trial concerned with overarching issues, particularly when the other proceedings require a detailed examination of numerous transactions and the applicant has made late or incomplete disclosure. Overlap between factual issues does not, by itself, justify joining proceedings or extending the trial. The court may order security for costs in respect of additional claims where those claims generate real additional work and there is evidence supporting concern about enforcement of a future costs order. The amount must reflect the incremental costs reasonably attributable to those claims and should not be calculated by reference to the costs of the entire trial.

The claimants and Mr Wojakovski were involved in related proceedings concerning an account and a forthcoming trial about entitlement to shares, an indemnity and an overarching arrangement referred to as a Hechbon. Mr Wojakovski applied for the account proceedings to be heard with the pending shares trial. The claimants opposed that application and sought security for costs relating to additional claims advanced by Mr Wojakovski at the trial.

The court considered the overlap between the proceedings, the lateness of the application, the state of disclosure, the risk to the trial timetable and the proper level of security.

1. The court refused to shut out Mr Wojakovski’s case-management application merely because he remained in contempt of court. The issue was a proper question concerning the conduct of the trial.

2. The account proceedings were not joined to the shares trial. Although there was substantial overlap, the trial concerned overarching questions of entitlement to shares, an indemnity and the Hechbon. The account required granular scrutiny of approximately 260 transactions, with further disclosure potentially increasing that number. Combining the proceedings shortly before trial created a serious risk that the allotted trial window would be exceeded.

3. Inconsistent findings were not a sufficient reason for combination because factual findings made at the trial on overlapping issues would bind the account proceedings. Separate proceedings also avoided allowing the detailed account issues to disrupt determination of the overarching issues. The application to join the proceedings was dismissed.

4. Security for costs was appropriate in principle for the additional claims. Delay did not defeat the application because concerns about enforcement of a costs order arose from relatively recent disclosure concerning the tainting of Mr Wojakovski’s assets and breaches of court orders.

5. The additional claims involved non-negligible work, including legal argument on the indemnity and its enforceability, and further submissions and cross-examination concerning the Hechbon. The security should nevertheless be substantially below 15 per cent of the overall trial costs. The precise amount was left for discussion because the claimants had relied on incorrect underlying figures.

First-instance case-management and security-for-costs decision. The judgment refers to earlier orders in March 2020 and to a previous judgment on a debarring application, but gives no citation for them.