Bank Leumi (UK) Plc v Akrill
| Jurisdiction | England & Wales |
| Judge | Lord Justice Tomlinson |
| Judgment Date | 14 October 2015 |
| Neutral Citation | [2015] EWCA Civ 1165 |
| Date | 14 October 2015 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | A3/2014/4177 |
[2015] EWCA Civ 1165
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
(HIS HONOUR JUDGE DIGHT)
Royal Courts of Justice
Strand
London, WC2A 2LL
Lord Justice Tomlinson
A3/2014/4177
Mr G Pipe (instructed by Clarion Solicitors) appeared on behalf of the Applicant
The Respondent was not present and was not represented
(As approved)
This is an application for permission to appeal an order made by His Honour Judge Dight sitting in the Chancery Division on 26 November 2014. The operative part of that order provided that unless the Defendant paid £1 million into court by 27 February 2015, the Claimant effectively was to be at liberty to enter judgment for a sum of about £3.7 million together with interest and costs.
The background for present purposes does not matter, suffice it to say that the Defendant is a property developer and that in due course he came to give two personal guarantees to the Claimant bank in respect of borrowings by two companies owned by him in the Manor Group. When I say owned by him, companies of which he was the sole shareholder.
In due course the companies defaulted on their liability to the bank and the bank called the personal guarantees. Payment was not made and in October 2013 His Honour Judge Jarman QC, also sitting in the Chancery Division, granted summary judgment to the Claimant bank in the amount of £3.8 million odd to be paid by the Defendant by 26 November 2013.
The Defendant successfully appealed against that judgment to this court and on 17 July 2014 the Court of Appeal granted to the Defendant conditional leave to defend. The judgment is reported at [2014] EWCA Civ 907. This court held that although the arguments advanced by the Defendant were improbable, they were not wholly implausible. It was on that basis that conditional leave to defend was granted.
The question as to the appropriate condition to be imposed was remitted to His Honour Judge Dight, who made the order to which I have already referred. There was another limb to that order requiring the Defendant to file a witness statement evidencing the assumptions upon the basis of which a certain valuation report had been prepared. With that condition the Defendant duly complied.
It is accepted by Mr Pipe for the Appellant that the judge was correct to reach the conclusion that what is sometimes called an earnest was required of the Defendant and he does not seek to challenge the judge's assessment that £1 million was an appropriate amount.
At the hearing before Judge Dight, the position of the Claimant was that the relevant amount to be posted by way of security or as an earnest should be the entire amount in dispute; that is to say some £3.7 or £3.8 million. Mr Pipe draws attention to the fact that the Defendant's evidence was therefore directed towards what he said was his inability to raise that larger sum. Of course it is right to say that the evidence was directed to that particular goal, but that does not, as it seems to me, in any way detract from or impair the conclusions which the judge came to so far as concerns the adequacy of the evidence placed before the court by the Defendant as to assets.
The position adopted by the Defendant was that he had no income although he had very considerable assets which he valued at some £18 million and that he was dependent upon his family in the shape of his wife and his in laws for day to day support and also for funding litigation expenses. However, the Defendant vouchsafed no evidence at all as to the resources of either his wife or of his in laws or of the sources of those resources or of the amounts advanced or of the basis upon which such amounts had been advanced or of the ability of those persons to afford further assistance in the future.
The judge in his judgment cited a passage from a judgment of my own in a case called Dubai Islamic Bank PJSC v PSI Energy Holding Co BSC and Others [2011] EWCA Civ 761 in which, when considering the analogous situation of an application for security for costs, I said this:
"Where a party seeks to suggest that he is devoid of assets and yet able to maintain an expensive lifestyle and to fund litigation on the basis of loans from his family or other third parties, it is incumbent upon him in my judgment to provide details of the nature of those loans, the terms upon which they are granted and in particular to condescend to some further detail in relation to the efforts he has made in order to obtain further funds from the same sources.
When no such details are given and when the evidence is at such a high level of generality as to say that the source of living expenses and legal expenses is mostly loans from family and family affiliated companies and third parties without any further details volunteered, it is in my judgment possible and in many cases appropriate for the court to draw the double inference of which Langley J spoke in the Noga case which is to the...
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