Mansard Mortgages 2007-2 Plc v Beyat Holdings Ltd
| Jurisdiction | England & Wales |
| Judge | Paul Matthews |
| Judgment Date | 13 December 2021 |
| Neutral Citation | [2021] EWHC 3355 (Ch) |
| Docket Number | Case No: BL-2021-001695 |
| Year | 2021 |
| Court | Chancery Division |
HHJ Paul Matthews
(sitting as a Judge of the High Court)
Case No: BL-2021-001695
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
BUSINESS LIST (ChD)
Royal Courts of Justice
Rolls Building, Fetter Lane,
London, EC4A 1NL
Catherine Cooke (instructed by Fieldfisher LLP) for the Claimants
The defendants did not appear and were not represented
Hearing date: 7 December 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
On 7 December 2021, this Part 8 claim was listed before me for disposal or directions. The defendants were neither present nor represented at the hearing, although they had been notified of it in due time, and indeed had previously made a number of witness statements, and provided the court with several lengthy and complex written submissions. After hearing argument from Catherine Cooke, counsel for the claimants, I announced that I would grant the declarations sought, and at least some of the injunctions sought, but that I would hand down a written judgment as soon as possible, together with my decision on the remaining matters. This is that written judgment.
In essence, this claim concerns the question who controls the first claimant. The unchallenged evidence is that the first claimant is a company, incorporated in the UK on 31 August 2007, which in the same year issued Notes to investors with a value of £550 million, which funds were then used to acquire a portfolio of residential mortgages. Those Notes are governed by a trust deed dated 12 December 2007, of which the trustee is Deutsche Trustee Co Ltd. In the trust deed, the addresses given for the registered offices of both the first claimant and Deutsche Trustee Co Ltd are the same, namely “Winchester House, 1 Great Winchester St, London EC2N 2DB”. This is also the address of the London branch of Deutsche Bank AG. The second claimant is an Irish company which holds the 50,000 issued shares in the first claimant as a trustee. It is said by the defendants in their written submissions that the shares are held on charitable trusts, but so far as I can see nothing turns on this and I say no more about that.
The first defendant is a company which is, or at least was, incorporated in the Marshall Islands, in the Pacific Ocean. The first witness statement of Mr Julius Bozzino, on behalf of the claimants, exhibits what purports to be a certificate of the “annulment” of that company on 4 August 2020. Nevertheless, it appears that those acting, or purporting to act, on behalf of the first defendant claim that it has a significant, even a controlling, beneficial interest in the Notes. (It is asserted to be over 50% of the aggregate “Principal Amount Outstanding of the Most Senior Class” and over 50% of the aggregate “Principal Amount Outstanding of the Notes”.)
Moreover, they claim that, by virtue of that interest it was and is entitled to require the appointment of the second, third and fourth defendants as directors of the first claimant, and thereby gain day-to-day control of that company. The defendants further claim that the first claimant under their control has entered into a valuable consultancy agreement with the first defendant. For this purpose they made a demand upon Deutsche Bank to pay an initial invoice for consultancy fees in the sum of £300,000 (which was, however, not paid). The pre-existing directors of the first claimant and the second claimant reject all these claims. They have raised their opposition to the defendants' claims in this claim under CPR Part 8.
The second defendant is a UK registered company. According to documents filed at Companies House, a “person with significant control” of this company is Highbury Investments Ltd, and that a former such person (and former director) is one Rajnish Kalia. Those documents also show that a lady called Amanda Watson is a director of the second defendant, giving a correspondence address in the Marshall Islands.
Later in this judgment I shall refer to a decision of the High Court in a case called Clavis Securities plc v Rizwan Hussain and others, CR-2021-001057, which has some similarities to this case. The second defendant in this case is also the second defendant in the Clavis case, Highbury Investments Ltd is the third defendant in the Clavis case, Amanda Watson is the fourth defendant in the Clavis case, the fifth defendant in the present case (Annabel Watson) is also the fifth defendant in the Clavis case, and Rajnish Kalia is the sixth defendant in that case. I shall come back to Mr Rizwan Hussain later on in this judgment, but I mention now that he is currently subject to a general civil restraint order dated 9 July 2020, effective for two years, a copy of which was in the bundle before me.
There was little information before me about the third defendant. In his acknowledgment of service (to which I refer later), he intimated an intention to challenge the jurisdiction, which suggests that he is not resident in this country, and gave as his address an accommodation address at 33 Queen St in the City of London.
Similarly, there was not much before me about the fourth defendant. In his acknowledgment of service (to which I also refer later) he gave as his address the registered office of the second defendant, which is an accommodation address in City Road, London EC1.
The fifth defendant gave the same address in her acknowledgment of service as the second and fourth defendants. However, in her witness statement of 24 November 2021 (to which I will refer further later in this judgment) she gives her address as the same address as the registered office of the first defendant, in the Marshall Islands. In that witness statement she also confirms (as is shown also by documents filed at Companies House) that she is a director of the second defendant. Her email address has the domain name “clifden.group”. The claimants say in their evidence that there is no company registered at Companies House under that name. However, they also say that a company called Clifden IOM No 1 Ltd was a defendant in a case decided by the High Court in August 2018 (to which I shall refer later) and according to a notice in the Official Gazette of 17 July 2019 that company was put into liquidation by order of the Isle of Man High Court on 11 July 2019.
The sixth defendant also intimated in his acknowledgment of service an intention to challenge the jurisdiction, and gave us his address for service the same accommodation address as the first and third defendants. His email address has the domain name “beyatholdings.com”.
The Part 8 claim form was issued on 21 September 2021, by solicitors Fieldfisher LLP, acting (as they say) on behalf of both claimants. It was supported by a witness statement of Julius Bozzino dated 17 September 2021, with one exhibit. In that witness statement Mr Bozzino says that he is a director of the first claimant together with Sunil Masson. In support of that, he exhibits a copy of a print-out from the online service of Companies House relating to the first claimant. This appears to show that he was appointed a director on 16 July 2018, that Mr Masson was appointed a director on 9 April 2013 (when he was also appointed secretary), and that at the date of the download no other person was a director. The correspondence address for both is stated to be “3rd floor, 11–12 St James's Square, Suite 2, London, England SW1Y 4LB”.
Background events
The initial sequence of events leading to this litigation, according to Mr Bozzino (and, except where otherwise stated, unchallenged by the defendants) was as follows. On 1 September 2021, the sixth defendant wrote to Mr Bozzino, among others, by email “for and on behalf of” the first defendant attaching a letter addressed to Mr Masson, Mr Bozzino and the second claimant. This letter is headed “Investor Notice and Direction”, and is stated to be sent by the first defendant. Amongst other things, it says that the first defendant writes “to you in your capacity as the present directors of the Issuer [the first claimant] and in the case of [the second claimant] in its capacity as Share Trustee and one of the two members of the Issuer”.
It says that the first defendant has “an economic interest in the Notes and our interest is a controlling interest. Proof of our interest and its form can be provided to you, acting reasonably, upon the co-signature and return of the enclosed nondisclosure agreement”. It also confirms that the first defendant is not actually the Noteholder. Then it goes on to “direct, instruct and compel” the addressees to “take all necessary steps and actions forthwith to appoint” the second, third and fourth defendants “as de jure directors of the” first claimant. This letter was accompanied by letters of consent apparently by those defendants to act as such directors.
On 2 September 2021, the fifth defendant sent two emails to Mr Bozzino, both stated to be sent “for and on behalf of” the second defendant. The first was sent at 8:36 AM, and attached what was said to be an agenda for a meeting of the Board of Directors of the first claimant to take place that day at 16:00 hours at 25 Belgrave Rd, London SW1V 1RB. (I was told during the hearing that this is the address of the St George's Hotel.) Item 1 on that agenda was “the governance and direction of the Company”.
At 17:42 hours on the same day, the fifth defendant sent a further email to Mr...
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