Matrix Receivables Ltd v Musst Holdings Ltd

Hearing dates: 3 and 7 May 2024

Date of hand-down of judgment in draft: 24 May 2024

Approved Judgment

This judgment was handed down remotely at 11.15am on 17 June 2024 by circulation to the parties or their representatives by e-mail and by release to the National Archives.

I Introduction

(a) The Claims

In this action, Matrix Receivables Limited (“MRL”) as assignee from Matrix Money Management Limited (“MMM”) makes claims as follows:

(i) that there was an agreement that Musst would pay MMM 80% of its fees in the event MMM introduced a client for Mr Mathur's fund to the fund (“the 80/20 contractual claim”); alternatively

(ii) that there was an agreement that Musst would pay over to MMM a percentage of such fees, such percentage to be agreed later (“the alternative contractual claim”).

In the event that the 80/20 contractual claim or the alternative contractual claim fail, MRL makes a claim for unjust enrichment/a quantum meruit (“the restitutionary claim”).

(b) The Applications

In respect of the 80/20 contractual claim and the alternative contractual claim, Musst seeks reverse summary judgment under CPR 24.2 on the basis that the claims have no real prospect of success.

In respect of the restitutionary claim, Musst seeks that it be struck out, or that it be the subject of reverse summary judgment, on the footing that (a) on a proper construction of s.5 and s.23 of the Limitation Act 1980, the primary limitation period has expired, and (b) it is now too late for MRL to plead deliberate concealment, and in any event, the proposed plea (received on Friday 26 April 2024) is unsustainable.

In the alternative, in respect of the 80/20 contractual claim, Musst seeks that the claim should be struck out as an abuse of process of the court under CPR rule 3.4(2)(b), on the footing that it involves a collateral attack on the Judgment in the Astra proceedings given on 17 December 2021 (“the Astra Judgment”), and/or to allow such an attack to be made would, in the circumstances of this case, be manifestly unfair. There was previously alluded to a different form of attack, namely of or analogous to a Henderson v Henderson challenge, that the subject matter of these proceedings ought to have been brought in the Musst v Astra claim, and that by the time that it was sought to be brought, it was too late. That has not been pursued.

However, there has been a new challenge, namely that there has been collateral use of the documents disclosed in the Musst v Astra action in these proceedings in breach of the obligations under CPR 31.22 and/or at common law with the consequence that there should be a sanction, the most draconian of which is the striking out of these proceedings as a whole. In the face of this recent challenge, there is a responsive application on behalf of MRL retrospectively to seek permission to use the documents disclosed, which application is opposed by Musst.

There is an inherent logic in dealing with the abuse of process points first. The reason for this is that if the abuse of process argument is correct, it makes consideration of the underlying merits of the 80/20 contractual claim unnecessary Despite this, Musst has chosen, as it is entitled to do, to postpone the abuse of process argument until after consideration of the reverse summary judgment. MRL has retained the more purist approach of starting with abuse of process. The Court has followed Musst's order in the analysis. Although this also reflects the order of Musst's case, the abuse argument has not been treated as relegated in order of importance.

(c) The volume of material

It should be noted at the outset that the application has become very heavy for a 2-day application. The material before the Court comprises two skeleton arguments from Musst each of about 25 pages and a chronology of 43 pages, and a skeleton argument from MRL of 25 pages. The three central witness statements (and there are others) comprising the second witness statement of Mr Viegas and the first and second witness statements of Mr Davison comprise a total of about 80 pages without exhibits. There is what is called a “core bundle” comprising 1140 pages (including the above arguments, chronology and evidence).

It has not been necessary to refer to every argument in the course of this judgment, but the above documents and the material highlighted in the skeletons and in the oral argument have been fully considered.

II Background

The sole director of MRL is Mr Luke Reeves (“Mr Reeves”). He was formerly a director of MMM until 1 February 2011, which company entered a members' voluntary liquidation on 3 December 2012, and remains in liquidation. There was a group of companies known as the Matrix group which comprised financial services businesses and is said to have managed over £3 billion of assets with 230 professionals employed in four divisions including asset management and specialist finance. Ms Alexandra Galligan (“Ms Galligan”) was employed by Matrix Securities Limited from 1 December 2008 as institutional business development manager, reporting to Mr Reeves. She was and is married to Mr Saleem Siddiqi (“Mr Siddiqi”), who is the beneficial owner of Musst.

MMM and another company in the group traded as Matrix Asset Management (“MAM”) and were in the business of finding investors to invest in hedge funds in return for fees paid by the managers of those funds. MAM had a network of relationships with potential investors.

Mr Reeves first met Mr Siddiqi in 2008 or 2009 through Ms Galligan. His expertise was to advise pension funds and other investment entities in relation to their selection of hedge funds into which to invest. Mr Reeves wanted MMM or Matrix to be introduced to managers of high-quality hedge funds to which Mr Siddiqi had access. Musst says that it successfully introduced Matrix to about nine different hedge funds from about 2009 to 2012.

In 2009 or 2010 (Matrix says in 2011), Mr Reeves discussed with Mr Siddiqi and Ms Galligan a concept under which MMM or Matrix would provide for reward office space and legal and administrative services to new hedge funds. In about January 2012, Mr Siddiqi introduced Mr Reeves to Mr Mathur, then of Deutsche Bank, who was about to set up his own hedge fund business. In 2012, Mr Siddiqi was working for Tapestry Asset Management Limited (“Tapestry”), and during the year, he acquired Tapestry and by the end of the year, he operated through various Musst entities. From November 2012, he was joined by Ms Galligan.

It is unnecessary in this summary to refer to the numerous meetings involving Mr Siddiqi and/or Mr Reeves and/or Mr Mathur. Mr Mathur had an investment strategy focussing on synthetic asset-based securities which were trading at low sums and was expected to increase substantially. There is controversy between the parties as to what then occurred about the level of remuneration between the parties. In the course of emails (particularly 15 and 16 February 2012), there was reference to Mr Reeves expecting that 25% should be paid to Musst of which the salespeople including Matix would expect 80%. Mr Reeves in a statement had said that there was an 80/20 sharing arrangement that was made, but Mr Siddiqi denies that this was ever agreed, and says further that the emails do not evidence any such understanding.

Musst accepts that the role of Matrix would be to act on behalf of Musst by (a) suggesting potential investors to Musst, (b) making initial contact with potential investors when Mr Siddiqi agreed to this, (c) helping set up meetings and to attend those meetings if Musst wished, and (d) providing administrative and operational support. Since the findings in the Astra Judgment (paras. 88–90), Musst now accepts that the role of MMM went beyond being an administrator or secretary. Musst says that no agreement was made as to fees with Mr Mathur until after agreement in principle between Musst and Octave in November 2012 resulting in an Introduction Agreement on 13 April 2013 between Musst and...