Heritage Travel and Tourism Ltd v Lars Windhorst

JurisdictionEngland & Wales
JudgeMr Salter
Judgment Date27 August 2021
Neutral Citation[2021] EWHC 2380 (Comm)
Docket NumberClaim No CL-2020-000336
Year2021
CourtQueen's Bench Division (Commercial Court)
Between
(1) Heritage Travel and Tourism Limited
(2) MLDO Private Foundation
Claimants
and
(1) Lars Windhorst
(2) Tennor Holding B.V.
(3) La Perla Fashion Finance B.V.
(4) Civitas Properties Finance B.V.
Defendants

[2021] EWHC 2380 (Comm)

Before:

Mr Richard Salter QC

Sitting as a Deputy Judge of the High Court

Claim No CL-2020-000336

IN THE HIGH COURT OF JUSTICE

BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES

COMMERCIAL COURT (QBD)

Royal Courts of Justice. Rolls Building

Fetter Lane, London, EC4A 1NL

Mr Simon Salzedo QC and Mr Jonathan Scott (instructed by Withers LLP) appeared for the Claimants

Mr Robert Anderson QC and Ms Gayatri Sarathy (instructed by Baker McKenzie LLP) appeared for the Defendants

Hearing date: 20 July 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.

Mr Salter QC:

Introduction

1

This is the Claimants' application to lift the stay of proceedings imposed by the Order dated 10 June 2020 of Moulder J (the “ Tomlin Order”) and to enter judgment against the Defendants pursuant to the terms of the Tomlin Order and of a settlement agreement (“ the June Settlement”) scheduled to the Tomlin Order.

2

The application was made by Application Notice dated 18 December 2020, and was supported by the witness statement of Leslie-Anne Timms, a partner in Withers LLP, the Claimants' solicitors, made on the same date. The First Defendant, Mr Lars Windhorst, has made a witness statement dated 3 March 2021 on his own behalf and on behalf of the other Defendants, in opposition to the application. This was responded to by the witness statement dated 18 March 2021 of Ms Cristina Levis, the Chief Investment Officer of the First Claimant.

3

The application was heard remotely by video link on 20 July 2021. The Claimants were represented at the hearing by Mr Simon Salzedo QC and Mr Jonathan Scott and the Defendants by Mr Robert Anderson QC and Ms Gayatri Sarathy.

4

On Wednesday 18 August 2021, when a draft of this judgment had already been prepared for circulation to the parties, the Supreme Court handed down its judgment in the case of Times Travel (UK) Ltd v Pakistan International Airlines Corpn 1. As the decision of the Court of Appeal in that case 2 had featured to a considerable extent in the submissions at the hearing, the parties agreed that I should delay my judgment to permit them to make (as they have done) further brief written submissions on the effect of the Supreme Court's decision. This judgment therefore takes into consideration both the decision of the Supreme Court and those further submissions.

5

I am grateful to counsel on both sides and to the teams behind them for their assistance and for the clarity and quality of their submissions. I am particularly grateful to them for their willingness to provide, even in the depths of the long vacation, the further submissions to which I have just referred.

Background

6

The present action was begun by a Claim Form issued on 22 May 2020. Its purpose was to enforce the terms of an earlier settlement agreement dated 14 February 2020 (“ the February Settlement”), by which the parties had agreed to settle certain disputes that arisen between them in relation to the failure by the Defendants (and entities connected with them) to perform their obligations under various prior commercial agreements (“ the Prior Transactions”).

7

The details of those prior commercial agreements are set out in the Recitals to the February Settlement and the June Settlement. In very broad summary, they involved four sets of option repo transactions in the shares of companies connected with Mr Windhorst, the economic effect of which was to provide large short-term loans from the Claimants (and entities connected with them) to the Defendants (and entities connected with them) 3.

8

It is not in dispute that the Defendants failed fully to perform their obligations under the February Settlement. As stated in recital Y to the June Settlement:

The terms of the [February Settlement] included a provision whereby [the Fourth Defendant was] to deliver 10,000,000 shares in [Civitas Property Group SA] to [the Second Claimant]. This did not occur. Also, certain payments have not been made in accordance with the February 2020 Agreement. On this basis, [the First Claimant and the Second Claimant] issued [the present action].

9

The express purpose of the June Settlement was to settle both the disputes which had arisen as a result of the failure by the Defendants fully to perform the terms of the February Settlement and also to settle the present action.

10

The June Settlement provided that the Defendants would be jointly and severally liable to pay to the Claimants the following sums:

10.1. A “First Amount” of EUR 55,002,559.70 (including EUR 600,000 in respect of the Claimants' legal costs), payable by 30 June 2020 (clause 3.1(a)); and

10.2. A “Second Amount” of EUR 69,197,440.30, plus a daily lump sum payment of EUR 139,134 (the “ Daily Lump Sum”) accruing pro rata on the unpaid part of the Second Amount from 27 May 2020, payable by 15 February 2021 (clause 3.1(b)).

The Second Amount would be discounted to EUR 50,000,000 if payment in that amount was made in full by 31 December 2020 (clause 3.1(c)).

11

If the First Amount was not paid in full and on time, the June Settlement also provided that the Claimants would be entitled (inter alia) to:

11.1. Serve notice, declaring that the discounting provision in clause 3.1(c) no longer applied and that the unpaid balances of the First and Second Amounts were immediately due and payable, including the Daily Lump Sum calculated up to 15 February 2021; and

11.2. Enter judgment against the Defendants for the unpaid amounts (clause 7.1).

The terms of the June Settlement further required the Defendants to pay all legal costs reasonably incurred by the Claimants in enforcing the terms of the June Settlement (clause 8.2).

12

Unfortunately, the Defendants (as again is common ground) did not fully perform the terms of the June Settlement. The Defendants made part payments totalling EUR 15,600,000 (paid in one instalment of EUR 600,000 on 28 July 2020 and three instalments of EUR 5,000,000 between 5 August and 2 September 2020). Otherwise, the Defendants did not make the payments specified in the June Settlement. As I shall explain later in this judgment, the Defendants' case is that, in the events which have happened, they were and are not liable to do so.

13

On 15 December 2020, the Claimants (via their solicitors) served a notice pursuant to clause 7.1 of the June Settlement, declaring that all outstanding sums were immediately due and payable.

The correct approach to this application

14

Mr Salzedo QC submitted on behalf of the Claimants that, given that the Defendants are prima facie in default of their obligations under the June Settlement, it is for them to persuade the Court that it should not enter judgment against them. In support of that submission, he relied upon the following passages from the judgment of Jacobs J in Bostani v Pieper 4:

23. The present application is an application to give effect to a settlement agreement scheduled to a Tomlin order, by entering judgment in consequence of breaches of that agreement. There is no dispute that the sums due in respect of the third to sixth instalments were not paid. The claimants therefore have (subject to the question of limitation) a prima facie entitlement to the judgment which they seek; i e to a judgment which would give effect to the court's order.

24. However, the first defendant contends that the court should decline to give effect to that prima facie entitlement because of the oral agreement relied upon by Mr Pieper. A threshold question arises as to the standard which the court should apply in considering the argument as to the alleged oral agreement. Should it determine the matter on the balance of probabilities, based on the documentary and other evidence submitted? Should it adjourn the matter so that there can be oral evidence and cross-examination of witnesses? Should it take an approach, analogous with CPR Pt 24, of asking whether the first defendant's argument has “no real prospect of succeeding”?

25. It seems to me that there is much to be said for the view that this is an application to enforce an order of the court, and that the court should

simply form a view on the existing evidence as a whole as to whether it is appropriate to enforce its existing order; or, conversely, whether it should decline to do so because of the issues raised by the first defendant. In circumstances where the claimants can show a prima facie entitlement to the judgment sought, the evidential burden if not the legal burden would be on the defendants to provide the court with satisfactory evidence that would persuade the court to take a different view; i e to decide either not to enforce, or to decide that the matter is not capable of being fairly resolved on the documents or existing evidence alone and requires cross-examination of witnesses. In practical terms, however, I consider that in the context of the present case, the test to be applied is whether or not a further evidential hearing is required because the first defendant has a real prospect both of proving the oral agreement on which it relies, and also of showing that this would be an answer to the claimants' claim.
15

On behalf of the Defendants, Mr Anderson QC accepted that that was the general approach which I should adopt in considering this application. However, he...

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4 cases
  • Nam Tai Property Inc. v West Ridge Investment Company Ltd
    • British Virgin Islands
    • Court of Appeal (British Virgin Islands)
    • 27 July 2023
    ...see if there is substance in the statement before assuming it in favour of the party making the statement. Heritage Travel and Tourism Limited and another v Lars Windhorst and others [2021] EWHC 2380 (Comm) applied; Easyair Ltd (t/a Openair) v Opal Telecom Ltd [2009] EWHC 339 (CH) applied......
  • Nam Tai Property Inc. v West Ridge Investment Company Ltd
    • British Virgin Islands
    • Court of Appeal (British Virgin Islands)
    • 27 July 2023
    ...see if there is substance in the statement before assuming it in favour of the party making the statement. Heritage Travel and Tourism Limited and another v Lars Windhorst and others [2021] EWHC 2380 (Comm) applied; Easyair Ltd (t/a Openair) v Opal Telecom Ltd [2009] EWHC 339 (CH) applied......
  • IsZo Capital LP v Nam Tai Property Inc.
    • British Virgin Islands
    • High Court (British Virgin Islands)
    • 7 April 2022
    ...4 No 16 of 2004, Laws of the Virgin Islands. 5 (1858) El Bl & El 148 at pp 152–154. 6 Heritage Travel and Tourism Ltd v Windhorst [2021] EWHC 2380 (Comm) at [16]. 7 [2009] EWHC 339 (Ch) at [15(vii)]. 8 Bilta (UK) Ltd (In Liquidation) v NatWest Markets plc [2020] EWHC 546 (Ch) at [159]. 9......
  • IsZo Capital LP v Nam Tai Property Inc.
    • British Virgin Islands
    • High Court (British Virgin Islands)
    • 7 April 2022
    ...4 No 16 of 2004, Laws of the Virgin Islands. 5 (1858) El Bl & El 148 at pp 152–154. 6 Heritage Travel and Tourism Ltd v Windhorst [2021] EWHC 2380 (Comm) at [16]. 7 [2009] EWHC 339 (Ch) at [15(vii)]. 8 Bilta (UK) Ltd (In Liquidation) v NatWest Markets plc [2020] EWHC 546 (Ch) at [159]. 9......

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