Lawyers acting for Baron Hans Heinrich Thyssen-Bornemisza in the £1.2bn dispute have threatened the Bermuda government with a demand for Bermuda B$15m (£10.7m) compensation following the collapse of the trial last Wednesday.
Geoffrey Bell QC of Bermudian firm Appleby Spurling & Kempe, representing Thyssen, told Thorold Masefield, the island’s governor, that Thyssen was considering compensation because the delay in the trial following the decision by Mr Justice Mitchell to stand down would mean parties could lose tens of millions of dollars.
A statement on behalf of Thyssen also invites the other parties to join him in a compensation claim.
This follows a statement in court by 3-4 South Square’s Michael Crystal QC, joint lead counsel for Thyssen, that he was considering seeking a judicial review of the government’s decision not to renew Judge Mitchell’s contract.
However, it is likely that it will go no further, as Judge Mitchell voluntarily stepped down last Wednesday after 105 days in court. His contract was due to end in November 2001.
Bermuda’s deputy governor Tim Gurney says: “Yesterday, in discussions with Bermuda lawyers from all sides, the plaintiffs said they were considering compensation. I’m not aware of any claim.”
The litigation at the Bermuda High Court concerns the signing over by Thyssen of the family business fortunes to a continuity trust created in 1983, which made his son the main benificiary. He also claims that the trust and his son owe him B$232m (£165.28m) in arrears of an annuity based on 30 per cent of the trust’s profits.
The main proposals in Judge Mitchell’s failed application for his contract renewal included the termination of his $117,227 (£83,500) salary in exchange for a daily $1,500 (£1,000) until the case ends, rising in line with inflation if the case continued beyond April 2002. In court, he said he had been “seriously misled” about the original contract terms.
The High Court battle has cost an estimated B$100m (£71.2m) and involved a team of 32 British and Bermudian lawyers. Lawyers say the case is unlikely to restart before the beginning of August. The island’s chief justice Austin Ward is likely to be consulted before Judge Mitchell’s replacement can be drawn by the governor. However, Ward is on holiday, so any appointment is unlikely until after Easter. The new judge will then have to read nearly 122,000 case documents.
A government source says the plaintiffs favour Bermuda’s Mr Justice Vincent Merrabux or Mrs Justice Norma Wade-Miller as replacements. Neither have experience of tax law, says the source. Serle Court Chambers’ Alan Boyle QC, lead counsel for Thyssen Jnr’s team, and Fountain Court’s Trevor Philipson QC, lead counsel for the corporate defendants, want a non-Bermuda expert.
Boyle’s team feels that the current debacle could have been avoided if Crystal had kept to his original timetable of presenting his case in six weeks rather than 15 months.
Clifford Chance partner Jeremy Sandelson, in Boyle’s team, says: “It’s a matter of regret that the trial had to end in this way, to the extent that we were in the throes of opening our defence, showing that the baron didn’t have genuine grounds for complaint. Now we’ll have to start again.”