Various Claimants v Giambrone & Law (a firm) & Ors, Court of Appeal - Queen's Bench Division, July 07, 2015, [2015] EWHC 1946 (QB)

Resolution Date:July 07, 2015
Issuing Organization:Queen's Bench Division
Actores:Various Claimants v Giambrone & Law (a firm) & Ors
 
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Case No: TLQ/14/0626

Neutral Citation Number: [2015] EWHC 1946 (QB)

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

Royal Courts of Justice

Strand, London, WC2A 2LL

Date: 07/07/2015

Before :

MR JUSTICE FOSKETT

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Between :

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Robert Duddridge (instructed by Penningtons Manches LLP) for the Pennington Manches Claimants

Shantanu Majumdar (instructed by Edwin Coe LLP) for the Edwin Coe Claimants

William Flenley QC & Jamie Carpenter 1st & 3 - 6 Defendants

The 2nd Defendant was not represented

Hearing dates: 2-6, 9-13, 16-20 & 26, 27 & 30 March 2015

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JudgmentMR JUSTICE FOSKETT :

Introduction

  1. Calabria is the Southern Italian region that forms the ``toe'' of Italy. It comprises the five provinces of Cosenza, Reggio Calabria, Catanzaro, Crotone and Vibo Valentia. The climate is Mediterranean as is its cuisine. The west-facing coastline borders the Tyrrhenian Sea and the east-facing coastline borders the Ionian Sea. Its overall extensive coastline makes it a popular tourist destination during the summer months and its mountainous interior also offers skiing opportunities during the winter. As with many parts of Italy, it has a rich cultural and architectural heritage.

  2. Its increased popularity as an area where relatively inexpensive holiday homes might be acquired lies at the heart of this case. At least prior to the material events in this case, relatively cheap flights could be obtained from the UK mainland and from Ireland to Reggio di Calabria, Lamezia Terme and Crotone through the well-known budget airlines.

  3. The case arises from the proposed purchase of apartments by a number of individuals in a prospective development near the coastal resort of Brancaleone, which is a `comune' in the province of Reggio Calabria, where the coastline borders the Ionian Sea. The purchases were made ``off plan'' - in other words, the properties had not been built at the time the purchasers committed themselves to the transactions. Those commitments were made in 2007 and 2008, the anticipation at that time being that the development would be complete by the summer of 2009. In each of the cases with which these proceedings are concerned, the proposed purchase was never completed as a result of which it is said that each proposed purchaser has made a financial loss.

  4. The overall development was called the ``Jewel of the Sea'' (`Il gioiello del mare' in Italian) development which has, for short, been referred to throughout as the ``JoTS'' development.

  5. The promoter of the JoTS development was VFI Overseas Properties Limited (``VFI''), a company registered in the Republic of Ireland on 18 December 2006. There were two parts of the overall development which can be identified as the Main Development and the Beach Front development. I will describe the difference between the two below (see paragraphs 22 - 34). The vendor/builder of the Main Development was RDV Srl (``RDV'') and of the Beach Front development was Veco Costruzioni Srl (``Veco'').

  6. Each purchaser engaged one or other manifestation of the legal practice of Avvocato Gabriele Giambrone to act in the proposed purchase. As I have said, none of the proposed purchases involved in this case proceeded to completion and the proposed purchasers, who comprise the claimants in the case, seek to recover their losses from Avvocato Giambrone's firms and/or from him and his partners personally on the basis of alleged failures to act properly in their interests in the transactions. Each exemplar claimant has rescinded the contract into which he or she entered with the effect, amongst others, of sacrificing the deposits they paid.

  7. Following directions given by Asplin J in May 2014 the trial has focused on a number of ``exemplar'' transactions (in the event, 12 out of the 100+ cases currently outstanding) with a view to the court reaching certain conclusions on various issues that will either assist the conclusion of this litigation in its entirety or at least reduce the issues that might arise in further proceedings (see paragraphs 10 - 12 below).

  8. The claimants in the various actions before the court are either resident in England or the Republic of Ireland. It is accepted that the correct venue for resolving these cases is in this jurisdiction.

  9. Various proceedings arising out of the JoTS development have been brought by claimants in England and Wales and in Northern Ireland. Until this case commenced no case had ever proceeded to trial, with many settling on confidential terms at or shortly before trial. Indeed in the present proceedings the El Caribe claims (see paragraph 22 below), which were due to be reflected in one of the exemplar cases, were settled shortly before the trial. It is to be noted that the issues raised by the claimants in those previous proceedings were similar to those raised in the present proceedings. In the present proceedings, almost every issue raised on behalf of the remaining claimants has been hotly contested.

    The List of Generic Issues

  10. As I have indicated, the focus of the trial has been on a number of specific issues deduced from the pleadings. Not all issues raised by the pleadings have been the subject of argument at the trial. For example, causation of loss in individual cases (on the assumption that a relevant breach of duty is established) has deliberately been excluded. How the issues were to be formulated was the subject of the first preliminary hearing before me in October 2014. I need say nothing more about the arguments then advanced save to note that I was essentially of the view that the way the claimants were seeking to have the issues identified was the best way forward. At all events, a List of Generic Issues was agreed and has represented the effective agenda for the trial.

  11. Inevitably, some issues have assumed greater significance than others and during the course of the trial some issues were either resolved, in whole or part, or abandoned. Attached to this judgment as Appendix 1 is the List of Generic Issues amended to show those issues that remain alive and upon which I have, so far as possible on the evidence, endeavoured to reach a conclusion.

  12. In preparing this judgment I have identified a number of issues in the List of Issues that seem to me either no longer to be relevant or for it to be premature to decide them. I shall indicate those areas in the course of the judgment. There are some matters not identified in the List of Issues where I sensed I was being invited (particularly on behalf of the defendants) to make findings. I have generally endeavoured to resist that invitation.

    The structure of this judgment

  13. At the outset I will give a description of the developments in question and endeavour to reach a conclusion about the state of progress of those of relevance. After reference to some general issues I will trace the history of the involvement of Avvocato Giambrone in the transactions, either personally or through others who worked for him, in a broadly chronological fashion.

  14. To the extent that it is possible to reach conclusions of fact as the chronological history unfolds, I will set out those findings.

  15. I will indicate my approach to submissions made that certain matters advanced by or on behalf of the defendants were not challenged in cross-examination by Mr Robert Duddridge and Mr Shantanu Majumdar on behalf of the claimants they represent (see paragraphs 53 - 69 below) in paragraphs 17 - 21 below.

    The developments in question (and some issues concerning the assessment of the evidence)

  16. As indicated above, before setting out the background in greater detail, it will help if a brief description is given of the developments that either constitute the direct subject-matter of these proceedings or which have at least figured in some way in the background.

  17. Whilst the evidence before me has, of course, focused on those aspects of the JoTS development of direct concern to the claimants, other more general evidence was given during the case suggesting that many residential complexes have been completed in the region successfully over recent years with few, if any, of the problems associated with the development in this case. That evidence was given by Avvocato Giambrone in his witness statement when he said that his firm was involved in transactions ``in about 52 developments in Calabria'' and that he believed that ``over 90% of the Calabrian property transactions in which [the firm] was involved have completed successfully.'' Mr William Flenley QC, Leading Counsel for the Defendants, and Mr Jamie Carpenter said in their written Closing Submissions that that evidence was unchallenged. If that was intended to suggest that I am bound to accept that evidence as a matter of fact, I should say unequivocally that I am simply in no position to judge whether that is the case or not. This case has not been about those other developments. I have no particular reason to suppose that other developments in Calabria have necessarily given rise to the problems that emerged in this case except to note that, at face value, Avvocato Giambrone's claim in his witness statement seems at variance with what he was quoted as saying in the `Mail on Sunday' article referred to later (see paragraph 224) `Unfortunately, Calabria is total chaos and there are problems with every single development,' he says. `They are either late, or they have not started, or the developer has gone bust. No sooner do I fix one problem than another comes along.'

    - upon the basis of which article, incidentally, Mr Flenley seeks to obtain some support on another aspect of the case (see paragraph 384) - and, at least to some extent, with the fact of the seizure of certain Calabrian developments by the Italian financial police (see paragraph 33 below)...

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