Reeves v Sprecher & Ors, Court of Appeal - Chancery Division, March 20, 2008, [2008] EWHC 583 (Ch)

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Reeves v Sprecher & Ors, Court of Appeal - Chancery Division, March 20, 2008, [2008] EWHC 583 (Ch)

Neutral Citation Number: [2008] EWHC 583 (Ch)

Case No: HCO6C03185

IN THE HIGH COURT OF JUSTICE

CHANCERY DIVISION

Royal Courts of Justice

Strand, London, WC2A 2LL

Date: 20 March 2008

Before :

RICHARD SHELDON QC (sitting as a deputy High Court Judge)

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Between :

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Thomas Lowe (instructed by Cobbetts LLP) for the Claimant

Jules Sher QC and Nikki Singla (instructed by Barlow Lyde & Gilbert LLP) for the Defendants

Hearing dates : 12-14, 17 March 2008

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JUDGMENTMr Richard Sheldon QC (sitting as a Deputy Judge of the High Court) :

Introduction

1. The Defendants have applied for summary judgment on the claim made in these proceedings that there was a partnership between the Claimant, Mr Reeves, and the First Defendant, Mr Sprecher, alternatively that the relevant paragraphs of the Amended Points of Claim be struck out ("the summary judgment application"). The Claimant has applied for permission to re-amend his Amended Points of Claim ("the amendment application").

2. On 13 March 2008, I gave my decision to dismiss the summary judgment application, with reasons to follow in writing. On 17 March 2008, I gave my decision on the amendment application refusing permission for Mr Reeves to re-amend on the principal allegation now sought to be introduced by the Claimant (the redemption issue) and giving permission for certain other proposed reamendments, also with reasons to follow in writing. I now give my reasons for those decisions.

3. Other applications which were originally before me (one by the Defendants for security for costs and one by Mr Reeves for specific disclosure) have been resolved by consent.

4. For the background to the underlying claims made by Mr Reeves in these proceedings, I gratefully adopt the summary given by Mr Justice Lewison in a judgment delivered earlier in these proceedings on various interlocutory applications, [2007] EWHC 117 (Ch) reported at [2006] 2 BCLC 614, and which for ease of reference I set out below:

"[1] In the spring of 1999 Mr Craig Reeves was 26 years old and had been working in the hedge fund industry for some three years. The company for which he worked was precarious; and he left in August 1999. A few months before he left he began discussions with Mr Peter Sprecher about the possibility of going into business together in the investment management industry, principally in hedge funds. Mr Sprecher was a successful entrepreneur, but did not know about hedge funds. Mr Reeves knew about hedge funds, but had no money. In essence they agreed that Mr Sprecher would provide the capital for the new business; and Mr Reeves would provide the know-how.

[2] Early on in the negotiations they agreed that there would be an on-shore company and an off-shore company involved in the new business. Mr Reeves says that it was also agreed that they would share the profits from the new business equally, although Mr Sprecher was to have voting control of the companies. The reason behind the decision to have an off-shore company was, according to Mr Ree...

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