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England and Wales High Court (Chancery Division) Decisions |
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You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> The Financial Conduct Authority v Da Vinci Invest Ltd & Ors [2017] EWHC 2220 (Ch) (06 September 2017) URL: http://www.bailii.org/ew/cases/EWHC/Ch/2017/2220.html Cite as: [2017] EWHC 2220 (Ch) |
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CHANCERY DIVISION
Rolls Building, Fetter Lane, London, EC4A 1NL |
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B e f o r e :
____________________
THE FINANCIAL CONDUCT AUTHORITY |
Claimant |
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- and - |
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(1) DA VINCI INVEST LIMITED (2) DA VINCI INVEST PTE LIMITED (3) MINEWORLD LIMITED (4) SZABOLCS BANYA (5) GYORGY SZABOLCS BRAD (6) TAMAS PORNYE (7) BIVONAS LAW LLP |
Defendants |
____________________
The First to Fifth Defendants did not appear
The Sixth Defendant appeared by telephone
Paul Mitchell QC (instructed by RPC) for the Seventh Defendant
Hearing date: 5 October 2016
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Crown Copyright ©
Mr Justice Snowden:
Introduction
Background
"I am wondering why you missed to formally inform me about this case where I am a defendant supposedly. How could this [have] happened?
"So, let's start at the beginning. Who is Bivonas LLP? Is this a lawyer company? Sorry, but I don't know the British law well. Can a lawyer represent me without my permission and my signature in the UK? Do you have a formal document where you can find my name and my signature? If yes, please scan for me to check them."
"First you should know that this is not my sign[ature] on the paper. I don't know Bivonas company.
I believe that someone misled me. I checked my emails and I find an email conversation with Banya Szabolcs in where he asked me to send my personal documents (IDs, utility bills) to him because he wanted to register me to a MLM company named Unaico. This email conversation was at 27 January 2012 around when I supposedly sign a contract with this Bivonas.
I think that someone abused my personal data and made document forgery. This is a crime.
Of course I can prove this email conversation with Banya Szabolcs, and of course a handwriting expert will easily identify that this is not my sign[ature]."
"1. As of utmost importance, I must first note that I had been unaware of the claim against me and the ongoing procedure until very recently.
2. My first encounter with present case was by way of a press article, published on a Hungarian internet news site, in which I was informed that the court had issued a judgement and imposed a penalty on me with two other Hungarian individuals. The article directly mentioned my name, that is how I became aware of the case in the first place. Subsequently I was approached by FCA in email on a private email address I use infrequently. It turns out that both FCA and the Court was aware of my resident address and identification data, but in spite of this I never received any notification concerning the procedure.
3. I had never before heard of the firm of solicitors Bivonas LLP.
4. I have never appointed Bivonas LLP or any other solicitor to represent me in present case, and I have never granted them a power of attorney to act on my behalf.
5. I hereby state that the signature alleged to be mine on the Defence filed by Bivonas LLP and dated 27 January 2012 is not my signature.
6. Also, my personal ID documents (Hungarian address card card and personal ID card) were most probably abused in order to forge a power of attorney for Bivonas LLP on my behalf. I also note here that I have the intention to pursue further action in order to discover how and by whom such forgery was committed.
7. On 27 January 2012 (which is, interestingly, the same date as the date written on the defence submitted by Bivonas LLP) I provided Mr. Banya, also a defendant in present case, with copies of my personal ID documents. The reason I did this was because he offered to assist me in selling a small investment, which, according to his explanation, required my identification, thus the copies of my IDs. I was at the that point by no means aware that my documents would be abused in a way that would result in a counterfeit power of attorney being provided to Bivonas LLP on my behalf. I attach the copy of the email in which I had sent such documents, upon Mr. Banya's request. Notably, this email also contains copies of my signature. However, I must stress again that there had never been a mention of a firm of solicitors, or Bivonas LLP, or of present case, or any form of my representation anywhere, when this email was sent, and I did not authorise him Mr. Banya or anyone else to act on my behalf in any way, or to use the copies of my IDs for any other purpose than to assist me in selling the said investment.
8. All this prevented me from actually participating in the procedure, or from presenting a defence, or from obtaining expert advice, or actually entrusting someone with my defence.
9. Subsequently Bivonas LLP stated that I was not present upon signing the defence they submitted, and also that they did not inform me directly of the proceedings. I attach their email re the above.
10. I never received any information from FCA either, concerning their claim, either prior to submitting it to the court, or after. I was also completely unaware of any procedures preceding present case.
11. As I did not take part in the procedure, and I was completely unaware of its existence until very recently, I request the Honourable Court to set aside the judgement dated 12 August 2015.
…
15. I hereby state that I did not commit and was not involved with any of the alleged market abuse activities or market manipulation, and I request that the claim against me be withdrawn, and that the case be terminated without any penalties on me.
…."
"The application must be supported by evidence, certified by a statement of truth, dealing with the extent of [Mr. Pornye's] knowledge of and participation in these proceedings."
"8. By 4pm on 9 March 2016, [Mr. Pornye] shall file and serve on the [FCA] and [Bivonas] (and any other parties who at that time are party to the Set-Aside Application) a witness statement, with a signed declaration at the end that [Mr. Pornye] believes the facts stated in the statement are true, in support of the Set-Aside Application. That statement should refer to all documents upon which [Mr. Pornye] intends to rely; a bundle of all the documents referred to, arranged in chronological order, should be served with the statement. The statement should set out, amongst other things:
(a) How and when [Mr. Pornye] came to learn about these proceedings;
(b) To the best of his knowledge, an explanation as to how a Defence and witness statement purporting to contain his signature came to be filed by [Bivonas];
(c) An explanation as to [Mr. Pornye]'s use of the e-mail account [email protected];
(d) The contact, if any, he has had with [Mr. Banya and Mr. Brad] since July 2011;
(e) The circumstances in which he stopped trading with any of the First to Fifth Defendants; and
(f) Any facts and matters which [Mr. Pornye] relies upon in defence of the substantive claim by the [FCA]."
"12. By 4pm on 24 March 2016, and in so far as any such documents exist, the Sixth Defendant shall provide to the Claimant original copies of up to five documents bearing his signature which were signed by him up to or in 2011."
"a. I wish to reinforce my previous statement, namely, that I have only received the first email, from Bivonas LLP in the April of 2015. In the email they were asking me for a wealth declaration. Before this, I have not received any notification from the FCA (FSA), the Court or Bivonas LPT. Nothing was sent to my address of residence or to my email address. The obtained documents prove this fact. By looking at the mailing registry of the mail box, [email protected] (provided by google); it becomes evident that I was not informed by the authorities about any kind of legal action against me. This would be necessary according to the sixth article of European Court of Human Rights. It was in the August of 2015 when the FCA first approached me with the case.
b. In this point I can only reinforce my previous statements and the fact that I have not signed any contracts and also that I was in no legal relation with the [Da Vinci companies or Mineworld]. I have not asked Bivonas LLP to represent me. Up to this day, I have not given them any written or verbal authorisation. I have not made a statement in this case before the August of 2015. I did not sign the documents issued by Bivonas LLP on 2012.01.27 and on 2013.01.31. These were signed by someone else who was using my name…
….
e. In my previous statements I have claimed that I had no legal connection to [the Da Vinci companies or Mineworld]. By looking at the material, it becomes evident through the statement of [the FCA], that it was someone connected to the [Da Vinci companies] who was using the [email protected] email address. [Mineworld] was not affected in this issue. From the documents I have read and the statements of [the Da Vinci Companies], it becomes evident that none of them had met me, and also that we had never signed any contracts."
In purported response to paragraph 12 of the order, Mr. Pornye attached photocopies of four documents from 2012 and 2013.
"Since 10 February 2016, the FCA sent two USB sticks. Further, the [solicitors for] Bivonas … posted me documents and a USB stick. The FCA and the [solicitors] sent documents in the English language running to 6000 pages and 1200 pages, respectively.
A mere overview of this documentation would take days and a full and detailed inspection of the same would take months even if my mother tongue were English. The full procedure is marred by an infringement of Article 6 of the European Convention on Human Rights. Everyone was aware that I do not speak English and for this reason each and every document must be sent to me in Hungarian. Over the past year alone, I have spent hundreds of thousands of HUF on translation. From this time on, I will only make submittals and conduct correspondence in the Hungarian language and I ask everyone to send their applications and letters to me in Hungarian only…
The translation of the 7200 pages would cost 15-20 million HUF, and take at least 2 months for more than one translators. It is apparent from the documents sent that the FCA (FSA), Bivonas LLP, and the High Court did not inform me in any way about the proceedings and the court action until April 2015, despite them knowing my address. It can also be established that they did not send any notification, information, decision, ruling, judgement to the [email protected] email address. They did not send a single document that I was in in contact, in any way, with any of the three defendants. There is no correspondence, communication or contract in the 7000-page document bundle. It is for exactly this reason that we cannot send any other document in relation to this case, because there is no other document, other than what has already been sent by the authorities and the lawyers.
The documents and their dates reveal that Bánya Szabolcs and Bivonas LLP figured out, developed and put down in writing the things that need to be done and submittals concerning me in the course of the court action. All this was carried out without me first being informed about them, and the documents written on my behalf and in my name were signed by another person, which documents were then submitted to the court by Bivonas LLP. Bivonas LLP did not send to me a single e-mail or postal mail up to April 2015, when correspondence between us commenced. Ever since they have been called upon by us and even ordered by the court to present these documents. It appears that the applications in my name were worded by Bivonas LLP and were sent to Bánya Szabolcs as claimed by him, but why did he not send them to me via any of the channels available?
Summary of facts and outstanding queries
To date Bivonas LLP has failed to send to me the power of attorney for my representation signed by me.
It also failed to send to me an original document or an authenticated copy thereof confirming that it informed me about the FCA procedure and the court action, up to April 2015.
It also failed to provide a specific answer about who the person was that signed the documents written by it in advance and who signed the confession submitted to the court.
It also failed to provide an answer to date as to why I was involved in the court action on 13 July 2011 when on the day before (12 July 2011) there were still only 5 defendants?
The FCA failed to answer, and it was not apparent from the documents, who opened the email in Switzerland and why they did not send the contents of those emails?
Further, I request from the High Court that because forged documents were used in the procedure against me and because of procedural impropriety, it withdraws the charges against me and reimburses me for the costs incurred to date (1.4 million HUF).
I can only respond to further requests in English if my translation costs to date are reimbursed (900k HUF)."
"NOTICE TO THE SIXTH DEFENDANT: IF YOU DO NOT COMPLY WITH PARAGRAPH 1 OF THIS ORDER BY 4PM ON TUESDAY 10 MAY 2016, YOUR APPLICATION DATED 9 DECEMBER 2015 TO SET ASIDE THE JUDGMENT AND ORDER AGAINST YOU WILL BE AUTOMATICALLY DISMISSED.
UPON HEARING …
AND UPON considering a letter to the Court from [Mr. Pornye] dated 21 April 2016
AND UPON [Bivonas]'s application dated 6 April 2016,
IT IS ORDERED
Service of documents referred to in [Mr. Pornye]'s statement dated 7 March 2016
1. [Mr. Pornye] must, by 4pm on Tuesday 10 May 2016:
(a) Serve upon the [FCA] and [Bivonas] copies of the documents referred to in paragraphs 2 (a), (b), (c) and (d) below, or if such documents were included in the trial bundles provided by the [FCA] in electronic form to [Bivonas] pursuant to paragraph 6 of the Order of 10 February 2016, identify those documents; AND
(b) Provide to the [FCA] up to five original documents bearing his signature which were signed before 31 December 2011, with copies of the said documents to be served on [Bivonas]. If [Mr. Pornye] is unable to provide any original documents, he must state in writing to the [FCA] that he has no such original documents within his possession nor can obtain possession of such original documents from third parties.
(c) IF [MR. PORNYE] DOES NOT COMPLY WITH THIS PARAGRAPH 1, HIS APPLICATION DATED 9 DECEMBER 2015 (THE "SET-ASIDE APPLICATION") SHALL BE AUTOMATICALLY DISMISSED.
2. The copy documents referred to in paragraph 1(a) above are as follows:
(a) The "mailing registry of the mail box, [email protected] (provided by google)", referred to in paragraph (a) of [Mr. Pornye]'s statement dated 7 March 2016.
(b) The documents referred to in paragraph (e) of [Mr. Pornye]'s statement dated 7 March 2016 where he says, "By looking at the material, it becomes evident through the statement of the [FCA], that it was someone connected to the [Da Vinci companies] who was using the [email protected] email address".
(c) The documents referred to in paragraph (e) of [Mr. Pornye]'s statement dated 7 March 2016 where he says, "From the documents I have read… it becomes evident that none of them had met me, and also that we had never signed any contracts".
(d) The "document flow of the mailbox [email protected]" referred to in the final paragraph on page 3 of [Mr. Pornye]'s statement dated 7 March 2016, if that is different to the "mailing registry" referred to above in sub-paragraph 2(a)."
"I have informed you several times in the past that we have only received the case material from the FCA and Bivonas two months ago. The material is more than 8000 pages long. We have still not been able to go through the whole document. The translation of the full material would cost 21 million Forints, the estimate of 50 000 Pounds. The translation would take four months. We can only fulfil the points 1 a, b of the warrant of 28th of April, if we are of full knowledge regarding the case material. I wish to raise the attention of the honoured Court and the plaintiff to the 6th paragraph of the European Court of Human Rights. The plaintiff should have sent me the warrant of, February the 10th, translated to Hungarian language. Up to this day, this has not happened even though I have asked for this several times….
….
As an addition to the previous point, despite my repeated approach I have not received an answer from the plaintiff or the seventh defendant on the identity of the person who had signed the 2012 January 27. document and the 2013 January 31 witness confession in my name. Why did the seventh defendant serve this to the Court without my approval? Due to the lack of answers I have filed a report on the 6th of May at the Szeged police department; so I can find out the truth. The document was accepted by the authorities. The copy of this I attach. Until the investigation is over I cannot send the original documents to the plaintiff. I have managed to get an earlier official document with my signature on it. The scanned version of this I wish to attach. I claim that I do not have any other documents dating back from 2011 December 31. and I cannot apply for these from the third person."
"It is implicit in Part 23 of the Civil Procedure Rules and the Practice Direction (Applications) that all applications to the Court should be in English. It is also the general rule under CPR 23.1 that an applicant for an order should file an application notice with the appropriate Court Office and pay the prescribed fee (unless he qualifies for fee remission).
The requirement under Article 6(3) of the European Convention on Human Rights for the provision of an interpreter or for information to be provided in a language which a defendant understands applies only to persons charged with a criminal offence. That is not this case.
In any event, [Mr. Pornye] has previously communicated in writing with the Court and the other parties in English and his main application dated 9 December 2015 to set aside the Judgment against him was written in English. [Mr. Pornye] also appeared in court on 10 February 2016 with the assistance of a litigation friend and an interpreter. [Mr. Pornye] therefore appears to be able both to produce documents written in English and has access to the assistance of persons who understand and are conversant in English.
Accordingly, whatever might be decided in the future in relation to the translation of other documents for the future conduct of [Mr. Pornye]'s main application dated 9 December 2015, I do not regard it as unfair, or unduly burdensome or contrary to [Mr. Pornye]'s rights under the ECHR for [Mr. Pornye] to be required to file his own application to vary the Order of 25 April 2016 (which runs to just over 2 pages of typescript) in English and otherwise to comply with the CPR in that regard."
My expectation (as recorded in my order) was that if Mr. Pornye complied with these requirements, his "Kérelem" application would then be issued and listed to be heard in the week of 20 June 2016.
The law
"(1) On an application for relief from any sanction imposed for a failure to comply with any rule, practice direction or court order, the court will consider all the circumstances of the case, so as to enable it to deal justly with the application, including the need –
(a) for litigation to be conducted efficiently and at proportionate cost; and
(b) to enforce compliance with rules, practice directions and orders."
"A judge should address an application for relief from sanctions in three stages. The first stage is to identify and assess the seriousness and significance of the 'failure to comply with any rule, practice direction or court order' which engages rule 3.9(1). If the breach is neither serious nor significant, the court is unlikely to need to spend much time on the second and third stages. The second stage is to consider why the default occurred. The third stage is to evaluate 'all the circumstances of the case, so as to enable [the court] to deal justly with the application including [the need (a) for litigation to be conducted efficiently and at proportionate cost and (b) to enforce compliance with rules, practice directions and orders].'"
The first stage: the seriousness and significance of the breach
"The very fact that X has failed to comply with an "unless" order (as opposed to an "ordinary" order) is undoubtedly a pointer towards seriousness and significance. This is for two reasons. First, X is in breach of two successive obligations to do the same thing. Secondly, the court has underlined the importance of doing that thing by specifying an automatic sanction in default (in this case the draconian sanction of strike out)."
The second stage: the reasons for the breach
"1. In the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law….
…
3. Everyone charged with a criminal offence has the following minimum rights:
(a) to be informed promptly, in a language which he understands and in detail, of the nature and cause of the accusation against him;
…
(e) to have the free assistance of an interpreter if he cannot understand or speak the language used in court."
"70. However, para.3(e) does not go so far as to require a written translation of all items of written evidence or official documents in the procedure. In that connection, it should be noted that the text of the relevant provisions refers to an "interpreter", not a "translator". This suggests that oral linguistic assistance may satisfy the requirements of the Convention. The fact remains, however, that the interpretation assistance provided should be such as to enable the defendant to have knowledge of the case against him and to defend himself, notably by being able to put before the court his version of the events…."
The third stage: dealing justly with the application
"34. Factor (a) [in CPR 3.9(1)] makes it clear that the court must consider the effect of the breach in every case. If the breach has prevented the court or the parties from conducting the litigation (or other litigation) efficiently and at proportionate cost, that will be a factor weighing in favour of refusing relief. Factor (b) emphasises the importance of complying with rules, practice directions and orders. This aspect received insufficient attention in the past. The court must always bear in mind the need for compliance with rules, practice directions and orders, because the old lax culture of non-compliance is no longer tolerated.
35. Thus, the court must, in considering all the circumstances of the case so as to enable it to deal with the application justly, give particular weight to these two important factors. In doing so, it will take account of the seriousness and significance of the breach (which has been assessed at the first stage) and any explanation (which has been considered at the second stage). The more serious or significant the breach the less likely it is that relief will be granted unless there is a good reason for it. Where there is a good reason for a serious or significant breach, relief is likely to be granted. Where the breach is not serious or significant, relief is also likely to be granted.
36. But it is always necessary to have regard to all the circumstances of the case. The factors that are relevant will vary from case to case. As has been pointed out in some of the authorities that have followed the Mitchell case [2014] 1 WLR 795, the promptness of the application will be a relevant circumstance to be weighed in the balance along with all the circumstances. Likewise, other past or current breaches of the rules, practice directions and court orders by the parties may also be taken into account as a relevant circumstance.
….
44. We should also make clear that the culture of compliance that the new rules are intended to promote requires that judges ensure that the directions that they give are realistic and achievable. It is no use imposing a tight timetable that can be seen at the outset to be unattainable. The court must have regard to the realities of litigation in making orders in the first place. Judges should also have in mind, when making directions, where the Rules provide for automatic sanctions in the case of default. Likewise, the parties should be aware of these consequences when they are agreeing directions. "Unless" orders should be reserved for situations in which they are truly required: these are usually so as to enable the litigation to proceed efficiently and at proportionate cost."
"It's not a small website we've been featured on.".
"The FSA has taken out a High Court injunction to stop an alleged share price scam.
The markets regulator said it had taken action against three Hungarian and Swiss residents, and the Swiss and Seychelles-based companies they used.
Szabolcs Banya, Tamas Pornye and Gyorgy Brad are suspected of making Ł1m profit via "layering" – placing bogus orders to artificially raise or lower prices.
The injunction freezes their assets and blocks them from market manipulation."
"What do you think will happen? It looks very bad. Up till now I thought I was at least safe."
"I'm sorry but I won't fill it out. You can tell them I'm having medical treatment, which could even be true. Sorry, but I don't want to deal with this anymore. Don't call me."
Conclusion