Grenda Investments Ltd v Philip Barton

JurisdictionEngland & Wales
JudgeMr Justice Picken
Judgment Date20 September 2017
Neutral Citation[2017] EWHC 2371 (Comm)
Docket NumberCase No: CL-2014-000649
CourtQueen's Bench Division (Commercial Court)
Date20 September 2017

[2017] EWHC 2371 (Comm)

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

COMMERCIAL COURT

Royal Courts of Justice, Rolls Building

Fetter Lane, London, EC4A 1NL

Before:

Mr Justice Picken

Case No: CL-2014-000649

Between:
Grenda Investments Limited
Claimant
and
Philip Barton
Defendant

David Lord QC, Adam Chichester-Clark (instructed by Richard Slade & Company PLC) for the Claimant

Neil Hext QC instructed for the Defendant

Hearing dates: 19 th and 20 th September 2017

Mr Justice Picken Wednesday, 20th September 2017

Ruling by Mr Justice Picken

Mr Justice Picken
1

I have before me cross-applications by the Claimant, Grenda Investments Limited ('Grenda') and the Defendant, Mr Philip Barton ('Mr Barton') as follows: an application for Grenda for summary judgment on its claim against Mr Barton under certain loan facilities; and an application by Mr Barton to strike out the proceedings on the basis that the continued pursuit of them by Grenda amounts to an abuse of the process of the Court.

2

The first of the applications to be issued was Grenda's summary judgment application and it was this application to which counsel's oral submissions were directed in the first instance. In dealing with the applications in this judgment, it is, however, more convenient to adopt the approach adopted in both skeleton arguments and to address first Mr Barton's strike-out application and only after that, Grenda's summary judgment application.

The factual background

3

Before coming on to do that, I should first say something about the underlying claims. These are brought under three loan facilities ('the Facilities') entered into between Grenda and Mr Barton as follows: first, the Biomass Loan Facility dated 8 April 2013 ('the Biomass Facility'), described in the Particulars of Claim as the 'E5.5 million Facility Agreement' and in the Defence as the 'First Facility Agreement'; secondly, the Silmag Loan Facility dated 27 February 2014 ('the Silmag Facility'), identified in the Particulars of Claim as the 'USD 6.3 million Facility Agreement' and in the Defence as the 'Third Facility Agreement'; and thirdly, the Norwegian VAT Loan Facility dated 26 March 2014 ('the Norwegian Facility'), described in the Particulars of Claim as the 'E300,000 Facility Agreement' and in the Defence as the 'Fourth Facility Agreement'.

4

These Facilities, which were each subject to English law and were in similar form, all contained provisions. These included certain provisions dealing with rights of set-off in clause 8.3, which states:

"All payments made by the Borrower under this agreement shall be made in full, without set-off, counterclaim or condition, and free and clear of, and without deduction or withholding, provided that, if the Borrower is required by law or regulation to make such deduction or withholding, it shall:

8.3.4 pay to the Lender such additional amount as is necessary to ensure that the net full amount received by the Lender after the required deduction or withholding is equal to the amount that the Lender would have received had no such deduction or withholding been made, provided that the Lender shall account to the Borrower any amount recovered from the relevant taxation authorities up to the value of such additional amount."

Then clause 11.1, entitled 'set-off', states as follows:

"The Lender may apply any credit balance (whether or not then due) to which the Borrower is at any time beneficially entitled on any account with the Lender in (or towards) satisfaction of any sum then due and payable (but unpaid) by the Borrower to the Lender under this agreement. If such balances are in different currencies, the Lender may convert either balance at a market rate of exchange for the purpose of the set-off."

Clause 11.2 follows:

"The Lender is not obliged to exercise any of its rights under clause 11.1, but if the rights are exercised, the Lender shall promptly notify the Borrower of the set-off that has been made."

5

Besides those provisions dealing with the question of set-off, the Facilities each also contained the following provision, namely, clause 13.1 in these terms:

"Any amendment to this agreement shall be in writing and signed by, or on behalf, of each party."

6

Mr Lord QC for Grenda, puts forward the summary judgment application on the basis that the claims are, in effect, straightforward debt claims, which there is no realistic prospect of Mr Barton successfully defending. Mr Hext QC, for Mr Barton, submits that this is too simplistic an approach. He stresses that there is an important context which needs to be borne in mind and that that context makes it inappropriate to exceed to the summary judgment application which Grenda has brought. Specifically, but nonetheless only describing the context at a somewhat high level, Mr Hext makes the point that Grenda was owned and controlled at all material times by a Mr Andrew Ruhan, who also owned and controlled a BVI company called Bluestone Securities Limited ('Bluestone'). Mr Ruhan and Mr Barton, Mr Hext points out, had a longstanding business relationship which entailed the one lending the other, or companies owned by them, money. The Facilities sued under by Grenda are, Mr Hext observes, therefore, merely further instances of financial dealings between the two men.

7

Mr Ruhan, Mr Hext also points out, is somebody who has been involved in litigation before this Court, namely ( Orb Arl v Ruhan 2012 Folio 1414) (the 'Orb Litigation') which came initially before Cooke J and subsequently before Popplewell J. Details of that dispute are set out in the judgment of Popplewell J dated 15 April 2016. I do not propose, in the circumstances, to set out those details in what is, after all, an ex tempore judgment dealing with summary applications made on both sides. Instead, and since it is not controversial, at least as I understand it, I propose to adopt the summary which Mr Hext set out in his skeleton argument at paragraphs 8 to 14 — based, as that summary is, on Mr Barton's evidence before me.

8

Specifically, Mr Hext describes Mr Ruhan and Mr Barton as both having operated company structures through which loans between the two or their companies were made and utilised. Mr Hext refers to Mr Ruhan's company structure as being a complex web of companies under the ultimate legal ownership of two solicitors in the Isle of Man, namely Simon Cooper and Simon McNally and that structure being broadly known as the 'Arena Settlement'. Latterly, as Mr Hext goes on to explain, because of developments in the Orb Litigation, Mr Ruhan used a structure legally owned by Mr Anthony Stevens and those companies included the Phoenix Group Foundation, Grenda and Bluestone. It is Mr Barton's contention, in these proceedings, as indeed was also the contention of the claimants in the Orb Litigation, that Mr Stevens acts as a nominee for Mr Ruhan in relation to those companies. Although this is disputed by Mr Stevens, Mr Lord realistically accepted that, for present purposes, I am unable to reach a concluded view in relation to that and should, indeed, proceed on the basis that what is alleged by Mr Barton is the case, albeit that it is not accepted to be the case in substantive terms.

9

Part of Mr Barton's company structure was a company called Minardi Investments Limited ('Minardi') and Mr Barton also used Mr Cooper and Mr McNally to administer certain other companies within that structure.

10

In early 2008, Mr Barton lent US$30 million to Mr Ruhan, that loan being recognised as a loan by Minardi, Mr Barton's company, to a company within the Arena Settlement, Mr Ruhan's structure of companies, namely Unicorn Worldwide Holdings Limited ('Unicorn'). Some four years later, in 2012, the Orb Litigation commenced.

11

The key parties behind Orb included a Dr Gerald Smith and his ex-wife, a Dr Gail Cochrane. In very broad terms, the detail being set out in the judgment of Popplewell J, as I have indicated, various Orb assets were sold to Mr Ruhan and companies associated with him for a consideration of the issue of loan notes, in the sum of £40 million, by one of Mr Ruhan's companies. These assets included three hotels in the environs of Hyde Park. The Orb claimants alleged in the Orb Litigation that there was an oral agreement between them and Mr Ruhan that Mr Ruhan would split certain profits made from the assets and, in particular, profits made from the development of the hotels to which I have referred. In due course, the hotels were, indeed, developed and sold realising substantial profits. Mr Ruhan, however, did not account to the Orb claimants for what they alleged in the Orb Litigation was their share. They, accordingly, sued in respect of that alleged failure on Mr Ruhan's part, seeking to recover what they alleged were the traceable proceeds of the profits. Much of the profits that were made in relation to the hotels were, in fact, made by companies ostensibly owned or controlled by Mr Stevens and the Orb claimants' position in the Orb Litigation was that, as I have indicated previously, Mr Stevens acted as Mr Ruhan's nominee in relation to those companies.

12

In 2013, so the year after the Orb Litigation was commenced, Mr Barton approached Mr Ruhan, seeking a loan to invest in a biofuel generating project in Spain and that request ultimately resulted in a loan facility, namely the Biomass Facility to which I have previously referred and under which one of the claims in the current proceedings is brought by Grenda, the lender formally being Grenda and Mr Barton being the borrower.

13

The following year, 2014, it was Mr Ruhan's turn to approach Mr Barton for funding. The details of this are described in one of Mr Barton's witness statements for the purposes of the applications before me and I shall return to them in a short while. Essentially, Mr Ruhan was seeking from Mr Barton urgently to...

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2 cases
  • Asturion Fondation v Aljawharah Bint Ibrahim Abdulaziz Alibrahim
    • United Kingdom
    • Chancery Division
    • 15 February 2019
    ...as he had not intended to put the claim on hold “until convenient to pursue it”. 39 In ( Grenda Investments Ltd v Barton [2017] EWHC 2371 (Comm)) the reason for failing to proceed with the action was said to be the desire of the claimant to retain the defendant's cooperation in other unrel......
  • Richardson-Ruhan v Ruhan
    • United Kingdom
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    • 9 November 2017
    ...Fage UK Ltd & Anor v Chobani UK Ltd[2014] EWCA Civ 5, [2014] ETMR 26, [2014] FSR 29, [2014] CTLC 49. Grenda Investments Ltd v Barton[2017] EWHC 2371 (Comm) (unreported, 20 September 2017). Grenda Investments Ltd v Barton[2017] EWHC 2372 (Comm) (unreported, 20 September 2017). H (a minor) (a......

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