THE SOLICITOR AND THE STING OPERATION (3): THE AGENCY THAT CARRIED OUT A STING OPERATION ON A (RETIRED) JUDGE, AMONG OTHERS…

If you think that the account of enquiry agents carrying out a sting operation on the other side’s solicitor is remarkable then sit down for a while. That judgment also reveals that (in wholly unrelated proceedings) the agency in question had attempted a “sting” operation on a retired judge in Canada.  Further it had carried out such steps on other, “in a particularly aggressive” manner.

(Frankly this type of practice gives bees a bad name…)

“On that occasion, BC’s project involved a so-called “pretext investigation” which targeted Justice Frank Newbould KC, a recently-retired Superior Court Justice who had given judgment adverse to BC’s ultimate client (Catalyst) in hard-fought litigation with a rival private equity business based in Toronto. Meetings were arranged on a false pretext during which the retired judge was “baited by the operative in an effort to elicit anti-Jewish sentiments” albeit without success. BC lied to Justice Newbould, took him to dinner and bought him drinks, doing their best to dupe him into making remarks against Jews or Catalyst, whilst secretly recording him…”

KEY PRACTICE POINTS

It appears that we live in a world where plots and practices that John Grisham may well reject as too far-fetched are in fact real.  We have attempts here to “sting” retired judges and lawyers who had been involved for the other side in litigation.  Personally (and I doubt I am alone) I hope the courts in the UK stamp out this type of practice categorically and absolutely. In the meantime all lawyers, judges, retired judges and many others must be wary when invited for a “quiet drink”.

THE CASE

Pliego & Anor v Astor Asset Management 3 Ltd & Ors [2025] EWHC 2968 (Comm), Stephen Houseman KC, sitting as a Deputy Judge of the High Court.

THE FACTS

The claimants are bringing an action against the defendants alleging fraud.  The claimants hired an enquiry agent who approached the defendants’ solicitor on a pretence stating that he was seeking legal representation for a substantial client. The agent used the meetings to probe into the defendants’ case. Those meetings were recorded.  The claimants’ then solicitors refused to listen to the tapes and the claimants obtained new representation.  Once proceedings were issued and defences filed the claimants applied for summary judgment, using the information they had obtained from the solicitor.

THE JUDGMENT IN RELATION TO THE AGENCY THAT CARRIED OUT THE “STING”

Some information was disclosed in relation to the work carried out by the agency, but not the fees.  The judge was referred to a number of Canadian cases where the agency in question had attempted “Sting” operations on others, including a Canadian (recently retired) judge.

“20. As regards BC’s fees for their work, nothing has been disclosed or explained. It seems probable that clauses 16 to 22 of the BC Retainer contain some kind of fee scale or structure dependant on certain circumstances or contingencies. As to this aspect:

(i) A “bonus structure” of this kind was agreed between BC and a company engaged by The Catalyst Capital Group Inc. as part of ‘Project Maple Tree’ undertaken by BC in Canada during 2017. This and other aspects of BC’s activities are recorded in a judgment of C. Boswell J dated 11 January 2021 dealing with an assertion of litigation privilege in respect of BC’s retention and performance of those particular services: see The Catalyst Capital Group Inc. & others v. West Face Capital Inc., BC Strategy Ltd., BC Strategy UK Ltd. & others¸ 2021 ONSC 7957.

(ii) On that occasion, BC’s project involved a so-called “pretext investigation” which targeted Justice Frank Newbould KC, a recently-retired Superior Court Justice who had given judgment adverse to BC’s ultimate client (Catalyst) in hard-fought litigation with a rival private equity business based in Toronto. Meetings were arranged on a false pretext during which the retired judge was “baited by the operative in an effort to elicit anti-Jewish sentiments” albeit without success. BC lied to Justice Newbould, took him to dinner and bought him drinks, doing their best to dupe him into making remarks against Jews or Catalyst, whilst secretly recording him: see [53], [89], [367]. BC’s base fee on that occasion was US$1.5m, but could have risen to US$11m through the agreed bonus structure: see [379].

(iii) It is noteworthy that the principal and founding partner of Catalyst (Mr Glassman) denied any knowledge of BC’s plan to conduct a pretext investigation on Justice Newbould: see [90]. Such disavowal found no favour in circumstances where Catalyst was prepared to pay BC such a high fee by reference to the fruits of its covert operation. This involved looking through to the substance of the transaction: it is the commercial stakeholder (i.e. litigant) who is buying information and they share responsibility for how it is done: see [378]-[379].

(iv) Further details of BC’s fee on that occasion are summarised in a later judgment of McEwen J dated 2 December 2021: see The Catalyst Capital Group Inc. v. West Face Capital Inc. & others, 2021 ONSC 7957 at [28]. This included a US$75,000 “per item” bonus if BC’s operatives could obtain evidence that Justice Newbould was biased against Catalyst/Glassman or held anti-semitic views, for example. BC’s conduct was described as “an affront to justice” even though it yielded none of the material being sought.

YOU CAN REAT THAT JUDGMENT HERE

The Catalyst Capital Group Inc. v. West Face Capital Inc., 2021 ONSC 125 (CanLII)

C.Boswell.J

4.7       The Sting on Justice Newbould 

[88]           Justice Newbould retired from the Superior Court of Justice in June 2017.  He joined an arbitration practice following his retirement.

[89]           A Black Cube operative approached him on September 13, 2017 posing as a potential arbitration client.  They met at his office on September 18, 2017 and arranged to have dinner together later that evening.  Justice Newbould was unaware, of course that the entire engagement was a pretext.  During both meetings he was baited by the operative in an effort to elicit antiJewish sentiments.  Both meetings were secretly recorded.  

[90]           Mr. Glassman deposed that he was contacted by Mr. Tanuri on September 18, 2017 and told that he needed to travel to London the next day for an important briefing.  He said he was not aware, before this meeting, of any plan to conduct a pretext investigation on Justice Newbould.  He did not authorize such an operation and his counsel have made it clear that their camp does not approve of it having been done.  Indeed, Mr. Greenspan’s firm made it clear to Black Cube that they were to immediately desist in any further such investigations because that is not how things are done in Canada.

[91]           Nevertheless, Mr. Glassman was, as he said, “troubled” by what he heard in the taped conversations and, later, by what he read in the transcripts of the recordings.  He formed the view that it may be pertinent “fresh evidence” to be adduced on Catalyst’s appeal of the Moyse trial decision.

[92]           At the same time, the sting on Justice Newbould and some of the content of the recorded discussions created difficulties between Catalyst and its then counsel, Lax, O’Sullivan, which resulted in a break in that relationship.   Catalyst was required to retain new counsel on the eve of the hearing of the Moyse appeal.  

[93]           The appeal was adjourned from September 2017 to February 2018 to permit new counsel to be retained and for counsel to consider whether there was merit to a fresh evidence application.  It was ultimately determined that the transcripts of the sting on Justice Newbould would not be submitted to the Court of Appeal as fresh evidence. …

4.9       Additional Stings 

[105]      Justice Newbould wasn’t the only one subjected to a pretext operation.  A number of West Face’s current and former employees were as well, including Brandon Moyse, Alexander Singh, Bei Huang and Yujia Zhu.

[106]      Mr. Singh was pursued in an a particularly aggressive manner.  Black Cube agents posed as recruiters for a European private equity firm interested in hiring him.   He had been general counsel to West Face at the time of the WIND deal.  Black Cube agents met with him in Toronto and subsequently flew him to London, England to meet with him again.   They questioned him extensively about the hiring of Brandon Moyse and the Moyse litigation in an apparent effort to obtain evidence that would support Catalyst’s assertion that Mr. Moyse provided West Face with confidential information about Catalyst’s WIND strategy. 

INTERESTING READING ABOUT THIS CASE

Psy ops as litigation strategy?