Argyle Uae Ltd (a Ltd liability company incorporated in Ras Al Khalamah, United Arab Emirates) v Par-La-Ville Hotel and Residences Ltd (in Provisional Liquidation)
| Jurisdiction | England & Wales |
| Judge | Lord Justice Henderson,Lord Justice Flaux |
| Judgment Date | 26 July 2018 |
| Neutral Citation | [2018] EWCA Civ 1762 |
| Docket Number | Case No: A3/2017/2275 |
| Court | Court of Appeal (Civil Division) |
| Date | 26 July 2018 |
[2018] EWCA Civ 1762
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
ROGER WYAND QC SITTING AS A DEPUTY HIGH COURT JUDGE
[2017] EWHC 1915 (Ch)
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Henderson
and
Lord Justice Flaux
Case No: A3/2017/2275
The Second Appellant in person for the Appellants
Matthew Parker (instructed by Enyo Law LLP) for the Respondents
Hearing date: 10 July 2018
Judgment Approved
Introduction
The appellants appeal with the permission of Newey LJ against the Order dated 27 July 2017 of Mr Roger Wyand QC sitting as a Deputy High Court Judge in the Chancery Division whereby the judge struck out the appellants' Defence in respect of the respondents' unjust enrichment claim and entered summary judgment for the respondents on that claim, ordering the appellants to give restitution to the respondents of the sums of U.S. $999,999.99 and U.S. $11,500,000 together with interest and costs.
The appellants were legally represented at the hearing before the judge by Mr Hugh Jory QC instructed by Alexander Whyatt Solicitors and continued to be legally represented in the preparation of the appeal, the appeal skeleton argument having been prepared by Mr James Couser of counsel. However, in the week before the hearing of the appeal, the Court made an Order permitting Alexander Whyatt Solicitors to come off the record pursuant to CPR 42.3 and the appellants were not legally represented at the appeal hearing. The Court permitted Mr Robert McKellar, the second appellant and the director and shareholder of the first appellant to make submissions on behalf of the appellants. Mr McKellar adopted the written submissions of Mr Couser and made further submissions orally in particular in relation to the factual background. Those submissions were presented in a courteous and measured way which was of considerable assistance to the Court.
Factual background
The background to the dispute is a complex one, although ultimately the issues for this Court are not ones of any great complexity or difficulty.
On 9 July 2014, Mexico Infrastructure Finance LLC (“MIF”), a finance company incorporated in Delaware, entered a credit agreement with the first respondent (“PLV”) to provide a loan of U.S. $18 million in relation to a hotel, residential and retail development in Bermuda. The purpose of the loan was not to fund the development but to enable PLV to discharge debts and security granted to third parties so that PLV could secure additional financing for the development. The loan was to be repaid on 30 December 2014. On the same day as the loan was made, the Corporation of Hamilton, Bermuda (“the Corporation”) provided a guarantee of the loan to MIF.
The net proceeds of the loan were paid into an escrow account with the Bank of New York Mellon (“BNYM”) to be held by BNYM as escrow agent pursuant to an escrow agreement between MIF, PLV, the Corporation and BNYM also dated 9 July 2014.
Thereafter PLV was unable to raise additional financing for the development. On about 16 October 2014, Mr Michael Maclean a director of PLV had a meeting in London with Mr McKellar, who was a 50% shareholder in and director of the third respondent (“Argyle”) and the sole shareholder and director of the first appellant (“Argyle UAE”). They discussed a proposed transaction whereby PLV would pay a proportion of the monies in the escrow account to Argyle in return for which Argyle would utilise a credit facility to buy and sell financial instruments.
On 19 October 2014, Mr MacLean settled the Skyline Trust in Bermuda, of which he and his wife, also a director of PLV, were beneficiaries. The trustees were friends or relatives of his.
On 20 October 2014 the so-called Trade and Profit Share Agreement (“TPSA”) was entered into between Argyle and the trustees of the Skyline Trust (“the trustees”) pursuant to which the trustees agreed to transfer U.S.$12.5 million (which the TPSA stated was currently held in an account of Mr and Mrs MacLean at Clarien Bank in Bermuda) to Argyle in return for which Argyle agreed (i) that for a period of a year it would utilise a credit facility of U.S. $125 million to buy and sell financial instruments through high frequency trading; and (ii) to generate and pay to the trustees before 31 December 2014 a minimum of U.S.$18 million by way of profit from such trading activities and that any further profits thereafter would be split 80% in favour of the trustees, 20% in favour of Argyle.
So far as relevant to this appeal, the following were express terms of the TPSA:
5 Argyle will following receipt of the pre-qualifying information from Funder [i.e. the trustees] and due diligence for the Assets [i.e. the U.S. $12.5 million] as set out in this Agreement arrange the following:
1. Deliver to the Funder's reasonable satisfaction, such written evidence from a top tier bank or other reputable bank or financial institution which shall confirm the availability of and Argyle's access to the Credit (as the term “Credit” is defined in paragraph 5.3 below) (sic);
2. Subject to the satisfaction of the deliverables noted in paragraph 5.1 to the reasonable satisfaction of the Funder, arrange with the Funder to receive the Assets into Argyle's nominated bank account as a fee payment to Argyle in order to utilise a credit which Argyle warrants and confirms is currently available to Argyle to the value set out in Part Two of Schedule One hereto (the “Credit”) to be used in financial markets including (but not limited to) the United Kingdom (including Channel Islands), Europe, Canada, USA, Hong Kong, Singapore, Switzerland and United Arab Emirates to purchase and resell Instruments on a matched trade basis or to place such Credit with Financial Managers or dealers regulated by the FCA (or similar regulatory authorities in the relevant jurisdiction) in order to perform or execute such matched trades;
3. Following payment to Argyle (or as it directs) of the Assets as set out in the immediately preceding paragraph from the Funder, to commence the acquisition and resale of Instruments through Argyle's nominated transacting account or bank accounts up to the value of the Credit and organising the exit selling to Argyle's nominated buyer from the transacting account or bank account to create spread profits or commissions on such trades for distribution in accordance with the Second Schedule hereof in the minimum amount of Eighteen Million United States Dollars $18,000,000 (“ Base Profit”) on or before 31 December 2014 (“ Base Profit Distribution Date”);
16 The payment of the Fee [i.e. the U.S. $12.5 million] to Argyle for the Credit shall be a one time irrevocable payment made on the date of this Agreement for the value of the Credit time being of the essence in respect of such payment.
On the same day as the TPSA, 20 October 2014, Mr MacLean in his capacity as a director of PLV wrote a Letter of Acknowledgment and Agreement to the trustees and to himself and his wife requesting their acknowledgment and agreement to (i) the official appointment of the Trust as PLV's agent, representative and nominee for the purpose of entering the TPSA and receiving any proceeds under it; the appointment of Mr and Mrs MacLean as Escrow Agent to hold the Assets [i.e. the U.S. $12.5 million] in their account at Clarien Bank upon trust for PLV; and (iii) the agreement of Mr and Mrs MacLean as Escrow Agent to release of the Assets in accordance with paragraph 5.2 of the TPSA. The Letter was countersigned by the trustees and by Mr and Mrs MacLean as Escrow Agent.
On 24 October 2014, PLV and the Corporation wrote letters to BNYM authorising the transfer of monies out of the Escrow Account into the account of Mr and Mrs MacLean at Clarien Bank.
At the direction of Argyle, payments of the Assets were made by the trustees pursuant to the TPSA as follows (pursuant in each case to an invoice from Argyle UAE): (i) U.S. $499,999 to Rational Foreign Exchange Ltd (a foreign exchange broker) on 31 October 2014; (ii) U.S. $11.5 million to an account of Argyle UAE at EFG Bank in Grand Cayman on 5 November 2014; and (iii) U.S. $500,000 also to Rational Foreign Exchange Ltd on 7 November 2014. In each case the invoice described the payment sought as Fees for 12 months use of the Credit. The payments to Rational Foreign Exchange Ltd were then converted into sterling which was then paid into a personal account of Mr McKellar.
In the event, although Mr McKellar's evidence was that he carried out negotiations and preparatory work for trading, he accepted that no trades were done and accordingly no profits were ever made. In particular, the U.S. $18 million, which PLV would have used to repay the loan to MIF, was not repaid by 31 December 2014 or at all. Mr McKellar seeks to ascribe this failure to two factors: (i) the fact that the Assets were paid over late and not on the date of the TPSA, 20 October 2014 and (ii) the fact that on 20 February 2015, Argyle was served with a freezing injunction obtained by MIF against PLV and Mr and Mrs MacLean.
On 24 December 2014, as the 31 December deadline approached, Mr McKellar emailed Mr MacLean and Mr Oosthuizen of Wakefield Quinn, Bermudian lawyers acting for PLV/the trustees...
To continue reading
Request your trial
-
Weir-Jones Technical Services Incorporated v Purolator Courier Ltd, 2019 ABCA 49
...on Civil Procedure: Principles of Practice 378 (3d ed. 2013). See also Argyle UAE Ltd. v. Par-La-Ville Hotel and Residences Ltd., [2018] EWCA Civ 1762, ¶ 54 per Flaux, L.J. (“In circumstances where the appellants have not put forward any case as to why they should be entitled to retain the ......