Axnoller Events Ltd v Nihal Mohammed Kamal Brake
| Jurisdiction | England & Wales |
| Judge | Paul Matthews |
| Judgment Date | 17 August 2021 |
| Neutral Citation | [2021] EWHC 2308 (Ch) |
| Court | Chancery Division |
| Docket Number | Case Nos: E00YE350, F00YE085 |
[2021] EWHC 2308 (Ch)
HHJ Paul Matthews
(sitting as a Judge of the High Court)
Case Nos: E00YE350, F00YE085
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS IN BRISTOL
PROPERTY TRUSTS AND PROBATE LIST (ChD)
Bristol Civil Justice Centre
2 Redcliff Street, Bristol, BS1 6GR
Andrew Sutcliffe QC and William Day (instructed by Stewarts Law LLP) appeared on behalf of Axnoller Events Ltd and The Chedington Court Estate Ltd
Mrs Nihal Brake appeared on her own behalf and that of Mr Andrew Brake and Mr Tom D'Arcy
Hearing date: 12 August 2021
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.
Introduction
These are the written reasons for my decision on two applications by Axnoller Events Ltd (“AEL”) and The Chedington Court Estate Ltd (“Chedington”) (together, “the Guy Parties”), made by notice dated 25 June 2021. The respondents are Mrs Nihal Brake, Mr Andrew Brake, and Mr Tom D'Arcy (“the Brakes”). One is freestanding. The other is made in both the so-called “Possession Proceedings” (brought by AEL against Mr and Mrs Brake) and the “Eviction Proceedings” (brought by the Brakes against Chedington). I announced my decision by email to the parties on 13 August 2021, following the hearing on 12 August 2021. The reason for the urgency, in both announcing a decision and giving written reasons for that decision, is that these two claims are listed for trial on 6 September 2021 and 11 October 2021 respectively.
The applications are for two forms of relief. First, the applicants seek an order cancelling the mental health crisis moratorium into which Mr Andrew Brake (second defendant in the Possession Proceedings and second claimant in the Eviction Proceedings) entered on 6 May 2021, under the Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020 (“the 2020 Regulations”). Second, the applicants seek an order that, unless the Brakes pay certain existing costs orders in favour of the Guy Parties, they be debarred from defending and counterclaiming in the Possession Proceedings and claiming in the Eviction Proceedings, and their relevant statements of case be struck out.
Background
The background to the litigation in which these applications are made is both lengthy and complex. I take the following summary from my decision in Brake v Guy [2021] EWHC 671 (Ch), which concerned the part-trial of the so-called “Documents Claim” between the parties:
“4. In September 2004, the first claimant (then Mrs D'Arcy, but whom I shall call by her current name, Mrs Brake) acquired West Axnoller Farm (“the Farm”), near Beaminster in Dorset, from local landowners, the Vickery family (who continued to have substantial landholdings locally). This property included a substantial dwelling-house known subsequently as Axnoller House. In 2006 Mrs Brake began to operate a holiday letting business at the Farm, subsequently joined in partnership in 2008 by her husband, the second claimant (“Mr Brake”). Just outside the southern boundary of the Farm, on the other side of the private lane leading to the Farm, lies another, smaller residential property known as West Axnoller Cottage (the “cottage”).
5. In July 2002 a Mr and Mrs White had purchased the cottage from the Vickery family and were living there when Mrs Brake bought the Farm. Mrs Brake borrowed money from bankers Adam & Co in 2006, secured by a first legal charge on the Farm. The financial crisis of 2008 made it impossible to obtain further bank finance to expand the business being carried on at the Farm. The claimants therefore looked for an outside investor.
6. In February 2010 the claimants entered into a partnership with a limited partnership called Patley Wood Farm LLP (“PWF”), whose principal was Mrs Lorraine Brehme (“Mrs Brehme”). The new partnership (known as “Stay in Style”) was to carry on the business of providing luxurious weekend and other breaks, and hosting events such as weddings. The claimants contributed the Farm as partnership property, although it remained charged to Adam & Co to secure existing borrowings. With funds contributed by Mrs Brehme, on 8 March 2010 the partnership acquired the cottage, the legal title to which was transferred to the claimants and Mrs Brehme jointly, who were registered as proprietors. At first the cottage was used as accommodation for a housekeeper and then for a personal assistant (Simon Windus) and his family. After they left in 2012 it was used (inter alia) for the claimants to stay in when the main house was let.
7. Differences arose between the claimants on the one hand and PWF on the other, as partners in Stay in Style. In accordance with the partnership agreement, these were referred to arbitration, which ended on 21 June 2013 with an award in favour of PWF, and the dissolution of the partnership. Following a failure to pay orders made against them for costs in the arbitration, the claimants were adjudicated bankrupt on 12 May 2015. Mr Duncan Swift was appointed trustee in bankruptcy with another person, who later retired and was not replaced. The partnership itself subsequently went into administration (in 2016), and then into liquidation (in 2017).
8. In October 2014 Adam & Co, the bank which had lent money to Mrs Brake against the security of the Farm, appointed receivers under the Law of Property Act 1925. After marketing the property, the LPA receivers sold it in July 2015 to a newly incorporated company, Sarafina Properties Limited (“Sarafina”), said to be a corporate vehicle for the Hon Saffron Foster (“Mrs Foster”), a daughter of Lord Vestey, as well as a friend of Mrs Brake.
9. In February 2017 Mrs Foster sold the company to The Chedington Court Estate Ltd (“Chedington”, the second defendant), and its name was changed to Axnoller Events Limited (“AEL”). It is the third defendant in this claim. Chedington is an investment vehicle for Dr Geoffrey Guy (“Dr Guy”, the first defendant). Mr and Mrs Brake were employed to continue to run the wedding and rental accommodation business as before. Relations between the parties broke down, and on 8 November 2018 notice was given of the termination of their employment. This led to proceedings in the employment tribunal against Chedington and others by each of the claimants (“the Employment Claims”), and proceedings in the High Court by AEL against the applicants to recover possession of the Farm (“the Possession Claim”).
10. Following this, in January 2019, Mr Swift as trustee in bankruptcy entered into a transaction with the liquidators of the partnership in relation to the cottage, to acquire the liquidators' rights in it. Chedington entered into back to back transactions with Mr Swift in order to acquire those rights. The Brakes allege that Chedington and Mr Swift acted collusively, implementing “unlawful arrangements to create the false appearance that Chedington had acquired title to the cottage”. Chedington subsequently took possession of the cottage, the Brakes say unlawfully. They therefore commenced eviction proceedings against Chedington (“the Eviction Claim”). So the position on the ground currently is that the claimants are in occupation of the house, but seek possession of the cottage, whereas the second defendant is in occupation of the cottage, and the third defendant seeks possession of the house. Trials of these two possession claims are currently listed for April and May 2021.
11. In addition, on 12 February 2019 the Brakes commenced insolvency proceedings (the “Liquidation Application” and the “Bankruptcy Application”) against both the liquidators of the partnership and their trustee in bankruptcy. The first purpose of these insolvency proceedings was to unwind the disputed transactions. The second purpose was (as against the trustee) to establish that the Brakes' pre-existing interests in the cottage and the adjacent parcels had revested in them and Mrs Brake respectively on 12 May 2018 under the Insolvency Act 1986, section 283A, on the basis that they were the Brakes' sole or principal residence at the date of bankruptcy, and Mr Swift had taken no steps to realise them three years later. In April 2019, by consent, Chedington was joined as second respondent to the proceedings against Mr Swift, because it claimed to be a successor in title to him. In June 2019 Mr Jarvis QC made two orders by consent, one removing Mr Swift from office, and another appointing his successors.
12. In January 2020 Chedington applied to strike out the proceedings against the liquidators and most of those against Mr Swift and itself, on the basis that the Brakes lacked standing to bring them. I heard those applications in early March 2020, and acceded to them. I struck out the whole of the Liquidation Application ( [2020] EWHC 538 (Ch)), and most of the Bankruptcy Application ( [2020] EWHC 537 (Ch)), for lack of standing. An appeal against my decision in the Liquidation Application was dismissed by the Court of Appeal. An appeal against my decision in the Bankruptcy Application was however allowed, so that that application is yet to be tried (see [2020] EWCA Civ 1491 for both appeals). But, as at March 2020, the only significant matter left from the Liquidation and Bankruptcy Applications to be tried in May of that year, against the former...
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