Alastair Paul Beveridge v Derek Quinlan
| Jurisdiction | England & Wales |
| Judge | Mr Justice Snowden |
| Judgment Date | 06 June 2019 |
| Neutral Citation | [2019] EWHC 1411 (Ch) |
| Date | 06 June 2019 |
| Court | Chancery Division |
| Docket Number | Case No: BL-2019-000139 |
[2019] EWHC 1411 (Ch)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND & WALES
BUSINESS LIST (ChD)
Royal Courts of Justice
7 Rolls Building, Fetter Lane,
London, EC4A 1NL
Mr Justice Snowden
Case No: BL-2019-000139
Jonathan Nash QC and Stephen Robins (instructed by Michelmores LLP) for the Claimants
Sarah Harman (instructed by Joseph Hage Aaronson LLP) for the Second and Third Defendants
Hearing date: 24 May 2019
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
This is an application by the Claimants (the “Receivers”) for post-judgment injunctive relief against the Second Defendant (“Mr Maud”) and the Third Defendant (“Cruz”) (together, the “Defendants”). It follows an order which I made at the trial of the Part 8 Claim on 21 February 2019 (the “Order”).
The Receivers contend that the Defendants have recently taken action to thwart the Order. The Receivers issued their application on Monday 20 May 2019, and on Tuesday 21 May 2019 I gave permission for them to serve it short for Friday 24 May 2019.
Background
The background to the Order appears in the judgment which I gave on 21 February 2019: see [2019] EWHC 424 (Ch) (the “Judgment”). Mr. Maud is also involved in a related dispute which was the subject of a judgment which I gave on 11 June 2018: see Re Maud [2018] EWHC 1414 (Ch).
In short, the Receivers are receivers of the Defendants' rights in respect of certain loans (the “Shareholder Loans”) which the Defendants made to Ramblas Investments BV (“Ramblas”). The Receivers were appointed on 17 January 2011 by Royal Bank of Scotland plc (“RBS”) pursuant to powers contained in a document entitled the “Subordinated Creditors' Security Agreement” (“SCSA”) which the Defendants had executed in favour of RBS on 12 September 2008. The SCSA is governed by English law and contains a jurisdiction clause in favour of England. RBS's rights under the SCSA in respect of the Shareholder Loans have now been assigned to Edgeworth Capital (Luxembourg) SARL (“Edgeworth”).
Ramblas owns a company known as Delma Projectontwikkeling BV (“Delma”), which in turn owns a company known as Marme Inversiones 2007 SLU (“Marme”). Ramblas, Delma and Marme form the “Marme Group”. The companies in the Marme Group are in insolvency proceedings in Spain. LexAudit Concursal SLP, represented by Rafael Gimeno-Bayon Cobos, is the Spanish insolvency administrator of Ramblas, Delma and Marme (the “Insolvency Administrator”).
The Insolvency Administrator has conducted a public auction process to sell the Marme Group's principal asset, the property known as Ciudad Financiera, in Boadilla del Monte, Madrid (the “Property”). The highest bidder was a company known as Sorlinda Investments SLU (“Sorlinda”). A number of appeals in Spain against the ruling confirming Sorlinda's bid as the winning bid were dismissed on 13 May 2019. Sorlinda now has two months, starting on 13 May 2019, to implement its bid and complete the purchase of the Property.
Subject to resolution of a number of disputes arising under Spanish insolvency law as regards the subordination and priority of various claims against the companies in the Marme Group, the proceeds of the sale of the Property will, once received, fall to be applied to pay the liabilities of Marme and Delma, before the surplus is paid into the estate of Ramblas. The Insolvency Administrator will, in accordance with Spanish insolvency law, then apply the surplus to discharge the liabilities of Ramblas. These will include the debts owed by Ramblas under the Shareholder Loans.
One of the outstanding challenges in the insolvency of Ramblas is an appeal by Edgeworth against a decision that another loan to Ramblas (the “Junior Loan”) should be subordinated to rank pari passu with the Shareholder Loans. The Insolvency Administrator has previously indicated that no distribution will be made by Ramblas to the relevant creditors until this issue is resolved. There is, however, a dispute on the evidence as to when that might occur. Mr. Maud's evidence is that Edgeworth's challenge has not yet even been set down, but the evidence of the Receivers' Spanish lawyer is that the Spanish court could decide the issue and hand down judgment at any point (and potentially in the very near future).
At present, the Defendants are listed as creditors in the Spanish insolvency of Ramblas in respect of the Shareholder Loans. However, by virtue of the security rights which the Defendants and Cruz granted under the SCSA, and the appointment of the Receivers, the Receivers contend that any monies which might become payable by the Insolvency Administrator on behalf of Ramblas in respect of the Shareholder Loans are receivable by, and should be paid to, the Receivers, rather than to the Defendants.
On 15 January 2019, the Receivers commenced a Part 8 claim to seek declaratory and injunctive relief in this regard. The Receivers sought a declaration against the Defendants that they were entitled to receive payment of any monies otherwise payable by Ramblas to the Defendants in respect of the Shareholder Loans, and a mandatory injunction requiring the Defendants to provide written instructions to the Insolvency Administrator directing him to pay any monies in respect of the Shareholder Loans to the Receivers, rather than to the Defendants.
Although the Defendants indicated in correspondence that they would oppose the Receivers' claim, they elected not to serve any evidence in opposition. Further, at the hearing of the claim before me on 21 February 2019, counsel for the Defendants indicated that the relief sought was opposed, but he did not make any substantive submissions in opposition to the orders sought.
In the Order, I granted a declaration in the form sought by the Receivers, together with a mandatory injunction requiring the Defendants to provide their written confirmation in the form of notices addressed to the Insolvency Administrator and validly notarised by a Spanish notary in accordance with the laws of Spain, instructing the Insolvency Administrator that any sums in respect of the Shareholder Loans should be paid to the Receivers and not to the Defendants (the “Notices”).
After some difficulties in identifying a Spanish notary in England, the Insolvency Administrator indicated in an email of 26 March 2019 to the Receivers' Spanish lawyers that he would accept the Notices if they were notarised by an English notary and apostilled. At the same time, however, the Insolvency Administrator also stated that, when he had received the physical documents, he would contact the Defendants to inform them of the receipt of the same, and would provide them with a period of 15 days to raise any objections if they considered the Notices were not authentic.
On that basis, on 28 March 2019 the Defendants provided Notices to the Receivers' solicitors which had been notarised by an English notary who is also a Spanish lawyer, and which had also been apostilled. The Notices each contained the following statements,
“As a matter of English law, all my rights to receive payment from Ramblas have been assigned to the Receivers who alone have the authority to prove for the [Shareholder Loans] and to give directions to you as to payment of any distributions in respect thereof. It follows that any such directions that you receive from any other party is made without proper authority and is ineffective.
If, as a matter of Spanish law, you are unwilling or unable to recognise the rights of the Receivers set out above, I hereby direct that you make any and all payments that would otherwise be payable to me in my capacity as a [lender in respect of the Shareholder Loans] direct to the Receivers at the account details set out below or such other account details as may be nominated to you by the Receivers from time to time.”
On 24 April 2019, the Insolvency Administrator confirmed receipt of the Notices and sent emails to the Defendants informing them of the same. The Insolvency Administrator then also told the Defendants,
“As this is a declaration before a notary, duly apostilled, I hereby inform you of this fact, warning you that, unless you make a statement to the contrary within fifteen calendar days of sending this communication to this email address, when the time comes, this insolvency administration will follow the instructions provided by you.”
On 9 May 2019, Mr. Maud and Cruz (acting by Mr. Tim Southern, a director) each sent an email in substantively the same terms to the Insolvency Administrator. Those emails sought unilaterally to impose obligations of confidence upon the Insolvency Administrator in relation to their contents, and then stated,
“I now respond as follows:
(i) that in relation to the letters to which you refer which relate to one debtor [sic] instructing the Insolvency Administrator to pay another, were signed and notarised under compulsion of an English court order and were not signed voluntarily by me. I attach for your information a copy of the English court order and judgement;
(ii) I remind you that Lex Audit as Insolvency Administrator is subject to Spanish law, in respect of both Spanish Law provisions regarding payments in an insolvency, appropriate recognition or non-recognition of foreign warranties or foreign court resolutions, cancellation of guarantees of any kind in favour of subordinate creditors and the provisory measures to be taken while the subordination is challenged to avoid any irreparable harm and as regards any liability...
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