Ahmad and Others v Bank of Scotland and Others

JurisdictionEngland & Wales
CourtChancery Division
JudgeJudge Purle
Judgment Date28 November 2014
Neutral Citation[2014] EWHC 4611 (Ch)
Docket NumberCase No: HC14B00031

[2014] EWHC 4611 (Ch)



7 Rolls Buildings

Fetter Lane

London EC4A 1NL


His Honour Judge Purle QC (sitting as a High Court Judge)

Case No: HC14B00031

Ahmad and Others
Bank of Scotland and Others

Mr Michael Hartman (public access barrister) appeared for the Claimants

Mr James Barker (instructed by Walker Morris LLP) appeared for the First Defendant

Mr Fionn Pilbrow (instructed by Wragge Lawrence Graham & Co LLP) appeared for the Second Third and Fourth Defendants

Mr Simon Wilton (instructed by Plexus Law) appeared for the Fifth Sixth and Seventh Defendants

Approved Judgment

Judge Purle

The first applications I have to deal with are applications by the defendants for a combination of a strike out and for summary judgment. There are proposed amended Particulars of Claim. Permission to amend is yet to be given, but everyone agreed that I should determine the application by reference to the pleading that the claimants now wish to put forward. There is an application before the court for such an amendment, which is resisted on the grounds that there is no reasonable prospect of success and no real basis for a claim, that is to say on the same grounds as summary judgment and a strike out are sought.


The claimants fall into two groups. First, there are four individual claimants who are the shareholders and directors of the sixth and seventh corporate claimants, Zanrose Developments Limited ("ZDL") and Zanrose Textiles Limited ("ZTL"). The fifth claimant is Zanrose Developments, a firm which is merely the trading style and therefore an emanation of the first four claimants. Whether or not the joinder of the fifth claimant is mere surplusage given the presence of all the individual partners is not something I need trouble myself with. All relevant parties are unquestionably before the court.


I shall call the first defendant "the Bank".


The individual claimants had banking facilities with the Bank's predecessor. They fell into arrears under various loan arrangements they had both through the partnership and through the corporate claimants, for whom they had given guarantees. The corporate claimants had in addition cross-guaranteed each other's indebtedness. It is alleged by the claimants that a contract was entered into with the Bank in May 2008 which the Bank breached by subsequently appointing Receivers over all of the properties charged to the Bank. Some of the properties (known as the Bollo Bridge properties) were owned by the partnership. In addition, ZDL owned a property known as Cleveland Road, and ZTL owned a property which included a warehouse. The warehouse itself burnt down in late 2005 giving rise to an outstanding insurance claim known for short as the NIG Claim.


In the case of all of the properties owned by the individual claimants and ZDL, LPA Receivers were appointed by the Bank in September 2008, being the third and fourth defendants, both partners of the second defendant, PricewaterhouseCoopers LLP. I shall call them the PWC Receivers. They were also appointed Administrative Receivers of ZTL by the Bank. Subsequently, as a result of a merger of the Bank and its predecessor, there was a perceived conflict and Mr Morgan and Ms Goode, the sixth and seventh defendants, of GVA Grimleys Plc, were appointed LPA Receivers over the partnership properties and Cleveland Road, the PWC Receivers remaining Administrative Receivers of ZTL. I shall call the sixth and seventh defendants the Grimleys Receivers.


It is said that both sets of appointments, of the PWC Receivers in September 2008 and of the Grimleys Receivers in January 2009, were breaches by the Bank of its obligations under the May 2008 agreement.


The May 2008 agreement firstly needs to be considered. The agreement was recorded in writing by the Bank on 27 May 2008, and countersigned by all the partners. I shall take its description from the pleading as now advanced in the draft amended Particulars of Claim. I shall for convenience call this pleading the Particulars of Claim for short.


It is alleged in paragraph 25 of the Particulars of Claim that the 27 May 2008 letter is to be construed having regard to that which went before, namely an earlier meeting of 7 May, which I shall come to, and an offer made orally by telephone by Mr Stacey, who was one of the Bank's managers, in, it is alleged, mid-May 2008. As pleaded, these are merely aids to construction, though in argument, the emphasis shifted somewhat and it is now said by the claimants that the agreement was either collateral to the May 27 agreement, or included a separate oral agreement, or was partly oral and partly in writing, the written part being the 27 May letter and the oral part being the preceding discussions.


Paragraph 18 alleges firstly a notification by the Bank that the Bollo Bridge properties were then valued at £2.875 million. Mr Stacey is also said to have noted that there was substantial equity amounting to about £1.4 million in the Bollo Bridge properties, though in fact it is worth mentioning that if one looked at the totality of the borrowings (partnership and corporate) across the board, the total amount owed was considerably more than that equity. Paragraphs 19 and 20 continue by alleging that:

"19. In the first week of May, being on 7 May 2008, the first defendant by its then accounts manager, Mr Michael Stacey and by Mr Mark Dobson, who was Mr Stacey's senior manager, met with the first claimant and the accountant engaged by all the claimants, Mr Harant Singh.

20. What was stated at that meeting is relied on as being relevant to the terms to be construed to the subsequent agreements between the parties as set out later herein and which statements were to the following effect:

(1) the first claimant explained that proposals for refinancing the loans were complete, save as to the seventh claimant, and that the first claimant had recently paid £400,000 from his own account in reduction of the outstanding loans of the seventh claimant.

(2) Mr Stacey and Mr Dobson said that the first defendant had lost patience with the claimants who had failed to refinance their entire borrowings from the first defendant. And that the first defendant was on the point of appointing Receivers to enforce its powers of sale over all the properties and assets held in the claimants' businesses.

(3) Mr Singh responded by explaining that the Bank would be unable to recover either the £2.3 million loan on the fire damaged warehouse or the £1.45 million loan on the Cleveland Road property and the first defendant had nothing to gain by the appointment of Receivers. Mr Singh further stated that the parties should work together rather than appoint Receivers.

(4) Mr Dobson or Mr Stacey then said words to the effect that they would speak to Head Office and let the first claimant know if the first defendant was going to appoint the said Receivers."

It is thus not suggested that an agreement was reached at that meeting. There was simply an exchange of views upon which the Bank's representatives were going to speak to Head Office.


Paragraph 21 continues:

"Further and in or about mid-May 2008, Michael Stacey telephoned the first claimant during which, and to the clear recollection of the first claimant, the following was stated:

(1) Mr Stacey began by saying 'I have good news from the Bank' and

(2) then said 'In view of the fact that you cannot refinance the whole debt, the Bank would like the four partners to sell the Bollo Houses and that this money will be used to reduce the Bank debt'.

(3) Mr Stacey further said: 'in return the Bank will not appoint any Receivers'.

(4) Mr Stacey proceeded to ask whether; 'all of you, [being the 1st to 4th claimants], will agree to sell the Bollo houses'.

(5) The first claimant replied saying, 'If we can carry on trading and develop our businesses, I cannot see a problem with all four of us agreeing to sell the Bollo houses'.

(6) Mr Stacey replied explaining the terms of the proposed arrangement, being that the claimants shall:

i. by the end of June 2008, raise sufficient funds to clear and replace all proper sums due on all accounts and clear all sums outstanding on the mortgage with Birmingham Midshires BS, being the total debt; or

ii themselves, market and sell the Bollo Properties and pay the proceeds of each such sale to the first defendant so as to reduce or extinguish the total debt of all of the claimants.

(7) Mr Stacey further said, 'I will send a letter and it is important that you all sign and return it to me before the end of May to avoid us appointing Receivers'.

(8) Mr Stacey then reminded the first claimant that 'If you fail to obtain agreement from all of you, the Bank will be entitled to appoint Receivers'.

(9) The first claimant replied, 'That is not going to be necessary. I am sure all the partners will sign the letter'."


A number of points should be noted about that. Whilst Mr Stacey is alleged to have said the Bank would not appoint Receivers in return for the four individual claimants putting the Bollo Bridge properties on the market, there is nothing expressly said about whether the agreement not to appoint Receivers went any further than in relation to the Bollo Bridge properties. The second point is that the arrangement is expressly referred to as a proposed arrangement and does not amount, not even arguably, to an actual agreement or collateral contract. What was contemplated was a further written document which all parties would have to sign. It was made plain that if there was no...

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1 cases
  • Ahmad and Others v Bank of Scotland Plc
    • United Kingdom
    • Court of Appeal (Civil Division)
    • 24 June 2016
    ...or whether it should be summarily dismissed. HH Judge Purle QC considered that it should be summarily dismissed. His decision is at [2014] EWHC 4611 (Ch). This appeal against his decision is brought with the permission of Briggs LJ. 18 The draft Amended Particulars of Claim once again plea......

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