Timothy Patrick Horan v Aholdings Ltd

• Jurisdiction: British Virgin Islands
• Judge: Bannister J
• Judgment Date: 10 December 2009
• Date: 10 December 2009
• Court: High Court (British Virgin Islands)
• Docket Number: CLAIM NO: BVIHCV 2009/0242

THE EASTERN CARIBBEAN SUPREME COURT

IN THE HIGH COURT OF JUSTICE COMMERCIAL DIVISION

CLAIM NO: BVIHCV 2009/0242

IN THE MATTER OF

BETWEEN

Timothy Patrick Horan

Claimant

and

Aholdings Limited

Defendant

Appearances:

Mr Jack Husbands of Walkers for the Claimant/Applicant

Mr Kissock Laing of Harney Westwood & Riegels for the Defendant/Respondent

(Summary judgment application by claimant — CPR Part 15.2 — agreement for services — whether consideration moving from claimant — whether conditional — whether parol evidence admissible to vary or add to written agreement —“entire agreement” clause — whether sham — whether application to be dismissed only on condition of payment in)

1 Bannister J [ag]: This is an application for summary judgment made by the Claimant (“Mr Horan”) against the Defendant (“AHoldings”). Mr Horan specialises in the international distribution and acquisition of motion pictures. In March 2003 he took up employment with a Russian company called AMEDIA. His job description was Executive Vice President, International Relations and he says that his employment was subject to an unsigned contract of employment, a copy of which, in Russian and English, is in evidence. AHoldings, in an affidavit of Mr Akopov, its owner or controller (“Mr Akopov”), says (or at any rate implies) that the unsigned contract of employment never bound the parties. At around the same time as he took up employment with AMEDIA, Mr Horan was appointed as General Director of an affiliated company called AMEDIA STUDIO. Mr Horan says that he was to receive 12% of the shares in each of these two companies as part of his remuneration. He points to clause 6.3 of the unsigned employment contract and to a document signed by Mr Akopov which appears to corroborate that such a promise was contained in the offer of employment made to Mr Horan. Sometime later Mr Akopov, the principal shareholder of AMEDIA, sold some of his stake and Mr Horan says that he was subsequently told by Mr Akopov that he would receive 6%, rather than the previously agreed 12% of AMEDIA shares. AHoldings denies that Mr Horan ever had any entitlement to any shares in either company.

2 In December 2006 Mr Horan left AMEDIA. He had discussions with Mr Akopov in which, he says, he pointed out that he had foregone pay rises and two bonuses on account of his agreed entitlement to shares, which he had never received. Mr Horan says that after his employment had terminated, Mr Akopov offered him what he describes as a settlement figure of US$3 million, to be paid by an offshore company belonging to Mr Akopov. Mr Horan says he accepted this offer and that Mr Akopov told him that the money would be paid in three instalments: the first, of US$500,000; the second of US$1 million; and the third, at the discretion of Mr Akopov, of US$1.5 million. The understanding was therefore that Mr Akopov's company would pay Mr Horan US$1.5 million, with a further US$1.5 million if Mr Akopov felt like it. Mr Horan describes this arrangement as being by way of a thank you for the contribution which he had made to AMEDIA and the fact that he had foregone pay rises; and also in settlement of his claim to be given a shareholding, or shareholdings, as outlined above.

3 Mr Horan says that in late February or early March of 2007, Mr Granov, a director of AHoldings, told him that “they” (meaning, presumably, Mr Akopov and his associates) were ready to pay him the first instalment of US$500,000. He also told Mr Horan that Mr Akopov wished that there be a written contract and that Mr Granov wanted the contract to be in the form of a services agreement, or, as Mr Horan puts it, words to that effect. Mr Horan says that his wife, a lawyer, helped Mr Horan draw up such an agreement using a form of consultancy agreement which had previously been used by AMEDIA. The agreement was expressed to be made between AHoldings as the “Company” and Mr Horan as the “Consultant”. A copy of this agreement as signed by Mr Granov for AHoldings is in evidence. I need to set out the relevant parts of it.

“AGREEMENT

THIS AGREEMENT is made as of 24 ^th of March 2007, by and between AHoldings Ltd (the ‘Company’), a company registered in accordance with the laws of the British Virgin Islands, duly represented herein by Dmitry Granov, and Mr. Horan Timothy Patrick (the ‘Consultant’), acting on his own behalf, ensuring the following:

Background

Pursuant to provisions of this Agreement the company engages consultant in the international distribution and sales of the motion pictures (series). Consultant has expertise and experience in areas beneficial to the Company and desires to consult with the Company in his area of expertise. Based on Consultant's experience, the Company desires to retain the services of Consultant and Consultant desires to render such services on the terms and conditions set forth below.

IN CONSIDERATION of the foregoing and of the mutual covenants set forth below, the parties, intending to be legally bound, agree as follows:

1. Retention as consultant. The Company hereby retains consultant, and Consultant hereby agrees to render services to the Company, upon the terms and conditions set forth herein.

2. Duties. The consultant covenants and agrees that, as an independent contractor, he will perform all services requested of him by the Company, i.e.:

• —making and maintaining contracts with customers (programmed buyers).

• —generating and following up interest in product from customers.

3. Independent Contractor Status. The parties recognize that the consultant is an independent contractor and not an employee, agent, or representative of the Company and that the Company will not incur any liability as the result of the Consultant's actions. The Consultant shall at all times disclose that it is an independent contractor of the Company and shall not represent to any third party that he is an employee, agent, or representative of the Company other than as expressly authorized by the Company.

4. Compensation. The Company shall pay to the Consultant, as compensation for the services to be rendered under this Agreement during the Term (as defined below), initially a fee of US$500,000 (Five Hundred Thousand US Dollars) payable not later than 10 business days following receipt by the Company of this Agreement signed by the Consultant and the remaining part of $2.5 million (Two Million Five Hundred Thousand US Dollars) payable as follows: (i) $1 million (One Million US Dollars) to be paid on or before 31 December 2008, and (ii) the remaining amount not to exceed $1.5 million (One Million Five Hundred Thousand US Dollars) payable at the discretion of the Company upon the performance by the Consultant.

5. Term. The Term of the Consultant's services to be rendered shall commence on the first date written above and shall continue within 2 years (the ‘Term’).

6. Covenant of Nondisclosure. The Consultant shall not, at any time during the term of this Agreement and within 1 year after, in any manner, either directly or indirectly, divulge, disclose, or communicate to any person, firm, corporation or other entity, our use for his own benefit or for the benefit of any other person, firm, corporation or other entity, and not for the benefit of the Company, and confidential information acquired from the Company or its affiliates, without the express prior written consent of an authorized executive officer of the Company.

……

9.2 Amendments. This Agreement replaces and supersedes all prior agreements, and any other agreements relating to the subject matter hereof, between the parties to this Agreement. No alteration, modification, amendment or other change of this Agreement shall be binding on the parties unless in writing, approved and executed by the Consultant and an authorized executive officer of the Company whether by operation of law or otherwise.

9.3 Governing Law. This Agreement shall be governed by and interpreted, construed and enforced in accordance with the laws of the United Kingdom.

……

IN WITNESS WHEREOF, the parties have executed this Agreement in two copies, one for each party, both copies having equal legal force, effective the date first written above. Delivery of an executed signature page of this Agreement by facsimile transmission or scanned signature copy sent by email shall be as effective as delivery of a manually executed copy.”

5 Mr Horan was paid the initial US$500,000 at the end of March 2007, but has not received the US$1 million payable at the end of December 2008. Mr Horan sent an e-mail to Mr Akopov enquiring about this payment on 22 January 2009 and English Solicitors wrote on his behalf on 24 February 2009 and 19 March 2009. After some stalling e-mails and further prompts a firm of...