Libyan Investment Authority v Roger Milner King
| Jurisdiction | England & Wales |
| Judge | Simon Barker |
| Judgment Date | 26 February 2020 |
| Neutral Citation | [2020] EWHC 440 (Ch) |
| Court | Chancery Division |
| Docket Number | HC-2016-002106 |
| Date | 26 February 2020 |
[2020] EWHC 440 (Ch)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
BUSINESS LIST (ChD)
Rolls Building, Fetter Lane,
London EC4A 1NL
HIS HONOUR JUDGE Simon Barker QC
HC-2016-002106
Representation
Andrew Onslow QC and Kate Holderness (instructed by Hogan Lovells International LLP) for the Claimants
Jonathan Adkin QC and Rachel Tandy (instructed by Croft Solicitors Limited) for the Defendants
Hearing dates: 21–22 May, 3 June and 19 July 2019
I direct that pursuant to CPR 39APD6 paragraph 6.1 no tape recording shall be made of this judgment and that copies of this version shall stand as authentic and be treated as the official transcript
HHJ Simon Barker QC:
Introduction
The Parties
The First Claimant, the Libyan Investment Authority (‘the LIA’), is the Libyan sovereign wealth fund, which is based in Tripoli, Libya. The Second Claimant, LIA Advisory Services (UK) Limited (‘LIA UK’), is registered in England and is the LIA's wholly owned UK representative entity; at the material time it was known as Dalia Advisory Limited. The Third Claimant, Maplecross Holdings Investment Company Limited (‘MHICL’), is a special purpose vehicle which was registered in Guernsey on 15.7.10 and is beneficially owned and controlled by the LIA. At the material time Mr Rajab Layas (‘Mr Layas’) was the executive director of LIA UK but was not an officer of the LIA; and, Mr Kamal Rhazali (‘Mr Rhazali’) was a lawyer on secondment to the LIA and was based in Tripoli. At that time Mr Sami Rais was the chief executive officer of the LIA and Mr Ibrahim Khalifa, a qualified lawyer, was secretary to the LIA's board of directors; in 2018 they each made witness statements in which they candidly admit that their recollection of the relevant events is not detailed, in part because the relevant events had occurred 8 years earlier and in part because the transaction the subject matter of this action was relatively modest in value (£10.5m) and there were numerous other more important or higher value matters that they dealt with.
The First Defendant, Mr Roger King (‘Mr King’), is an experienced property developer. He and other members of his family are the shareholders and directors of the Second Defendant, International Group Limited (‘IGL’), through which they own and control the Third Defendant, Beeson Property Investments Limited (‘BPIL’), and the Fourth Defendant, Stoke Park Estates (‘SPE’), which at the material time was known as Beeson Investments and was and is unincorporated.
The Fifth Defendant, Mr Charles Merry (‘Mr Merry’), is a chartered surveyor and a long-standing business associate of Mr King. Since 2014 Mr Merry has been employed as head of projects by an IGL group company. Mr Merry is the principal of the Sixth Defendant, Conrad Strategic Partners Limited (‘CSPL’). Mr Merry and CSPL are alleged to have been involved in the relevant events acting on the instructions of and/or in conjunction with Mr King and his companies. The First to Sixth Defendants are referred to collectively as ‘the Defendants’.
The material time
The material time so far as the relevant events are concerned is the period early 2010 to January 2011, with the critical period being 7.6.10 to 6.7.10, and in particular 15.6.10 to 27.6.10.
Background and the litigation so far
This litigation concerns the circumstances in which the LIA, acting through or with the assistance of LIA UK and through MHICL, (1) came to pay £10.5m for a 50% share in a venture (‘the JV’) for the proposed development of two plots of land at Maple Cross, Hertfordshire, near junction 17 of the M25 (respectively ‘the hotel site’ and ‘the retail site’, and collectively ‘the Property’) respectively as a Crowne Plaza Hotel and a retail village, and (2) subsequently came to invest a further £1.76m in the JV.
The JV was established by a subscription and shareholders' agreement dated 19.7.10 (‘the JV agreement’). The other 50% interest in the JV was held by BPIL, with IGL being a party as guarantor of BPIL's obligations. The JV was to be conducted through other special purpose vehicles: Maplecross Properties Limited (‘MPL’), Maplecross Hotel Limited (‘MHL’), and Maplecross Retail Limited (‘MRL’) on the basis that MHICL would acquire one of MPL's two issued shares and BPIL would remain beneficial owner of the other share in MPL, and ownership of the hotel site and of the retail site and their development would be divested from MPL to MHL and MRL respectively. The detailed terms of the subscription and shareholders agreement are not relevant to the issues before me. The date of the JV agreement is relevant for limitation purposes. It is also relevant that £10.25m of the £10.5m consideration for a 50% share in the JV was, to the Claimants' knowledge, to be paid out to BPIL as a special dividend. The JV transaction completed; the £10.5m was paid on or about 19.7.10; the further investment of £1.76m was paid in three tranches over the period 23.9.10 to 15.1.11; and, BPIL received the £10.25m dividend. In the event, nothing was built and MPL, MHL and MRL are all in liquidation. Relations between the Claimants and Mr King and his companies broke down in or about 2013.
On 18.7.16, just within the limitation period, the Claimants issued a claim against the Defendants as Second to Seventh Defendants. The First Defendant to that claim was Warwick Street (KS) LLP (‘KS’), which, in 2010, carried on business as surveyors and property valuers under the name King Sturge LLP. The essence of the claim was that a report in letter form issued by KS on 23.6.10 (‘the KS Letter’) contained fraudulent misrepresentations and was used by KS and the Defendants to induce the Claimants to enter the JV and pay away £12.26m and/or was in breach of fiduciary duty on the part of KS, and, further or alternatively, that the Defendants or some of them had unlawfully conspired with one another and/or with others (specifically KS and/or Mr Layas) to induce the Claimants to enter the JV and pay out £12.26m and/or that the Defendants procured or induced KS to commit a breach of fiduciary duty.
The litigation came before this court in October 2018. By two applications the Claimants sought to amend the Claim Form and to re-amend the Amended Particulars of Claim in order to add KS as a Defendant to the unlawful means conspiracy claim. By a third application the Defendants sought an order striking out the Claim Form and the Particulars of Claim in whatever became their final form, alternatively summary judgment on the basis that the claims against the Defendants had no real prospect of success and there was no other compelling reason for a trial. I heard those applications over three days and gave judgment on 23.10.18. At that stage the Claimants were represented by Mr David Halpern QC.
On the Claimants' applications I gave permission to amend the Claim Form and to re-amend the Amended Particulars of Claim.
However, on the Defendants' application, which KS supported but did not actively argue, as against KS I struck out the Amended Claim Form and the Re-Amended Particulars of Claim and dismissed the action. In relation to the Defendants, i.e. the present First to Sixth Defendants, I made the following order (‘the 23.10.18 order’):
3. As regards the claims advanced against the Second to Seventh Defendants:
3.1. The Re-Amended Particulars of Claim are struck out and the claims advanced in them are dismissed; and
3.2. Unless by 4pm on Tuesday 13 November 2018 the Claimants:
(i) issue and serve an application seeking permission to amend the Claim Form and to advance further amended Particulars of Claim against the Second to Seventh Defendants; and
(ii) pay a further sum of £80,000 into the Court Funds office to stand as security for the Second to Seventh Defendants' costs of any such amendment application,
the Claim Form shall stand struck out and the action shall stand dismissed as against the Second to Seventh Defendants without further order.
3.3. In the event that the Claimants issue and serve an application for permission
to amend and provide security in accordance with paragraph 3.2 above:
(i) the striking out of the Claim Form and dismissal of the action as against the Second to Seventh Defendants shall be stayed pending the determination of such amendment application;
(ii) if the amendment application is refused, the stay shall be lifted upon such refusal and the Claim Form shall stand struck out and the action dismissed as against the Second to Seventh Defendants without further order; and
(iii) the hearing of such application is reserved to HHJ Barker QC, sitting as a Deputy Judge of the High Court, subject to availability.
I set this paragraph of the 23.10.18 order out in full because there is a dispute between the Claimants and the Defendants as to what it means or, more precisely, as to what was required of the Claimants if they were to avoid dismissal of the action as against all the Defendants.
The Claimants sought permission to appeal the 23.10.18 order on at least 10 grounds. On 23.1.19 permission was refused on paper by a single Lord Justice who gave the following reasons:
“It is not arguable that there is enough in the surrounding circumstances to say that it is realistic that [the Claimants] could succeed in a case of deceit or intentional breach of fiduciary duty against KS at trial. Whilst there is material against [the Defendants other than KS], that does not...
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