Montreux Capital Management (UK) Ltd v Mr John Godden

JurisdictionEngland & Wales
CourtChancery Division
JudgeDavid Stone
Judgment Date21 March 2018
Neutral Citation[2018] EWHC 495 (Ch)
Docket NumberCase No: HC-2017-002625

[2018] EWHC 495 (Ch)




7 Rolls Buildings

Fetter Lane

London, EC4A 1NL


David Stone

(Sitting as a Deputy High Court Judge)

Case No: HC-2017-002625

(1) Montreux Capital Management (UK) Limited
(2) MCM UK (Group) Holdings Limited
(3) Montreux Group (Holdings) Limited
(1) Mr John Godden
(2) Wentworth Hall Consultancy Limited
(3) Mr Ian Morley

Dominic Chambers QC (instructed by Druces LLP) for the Claimants

Mr Richard Hanke (instructed by Irwin Mitchell LLP) for the Defendants

Hearing date: 19 February 2018

Judgment Approved

David Stone ( sitting as Deputy High Court Judge):


In June 2016, John Godden left the employment of the Montreux Group. Shortly thereafter, on 27 September 2016, Mr Godden and Montreux entered into a settlement agreement (the “Settlement Agreement”). The interpretation of the Settlement Agreement gives rise to much of this dispute and to this application for summary judgment on part of the dispute.


The summary judgment application is brought by the First Claimant, Montreux Capital Management (UK) Limited, and the Second Claimant, MCM UK (Group) Holdings Limited, against the First Defendant, Mr Godden. The summary judgment application turns on the true construction of clauses 3.3 and 3.4 of the Settlement Agreement. The First and Second Claimants also seek early disclosure of certain information and a declaration that they are not liable to Mr Godden for certain payments, and an interim payment of sums they say are due under the Settlement Agreement.


Generally, nothing turns on the difference between the various Montreux entities. I shall therefore refer to them as Montreux.



The background facts are not in dispute and can be briefly stated.


Mr Godden was employed by Montreux under a service agreement dated 1 July 2015 which was replaced by a service agreement dated 16 January 2016 under which Mr Godden served as the CEO of the First Claimant. Montreux is a fund advisory business representing a group of investment firms specializing in boutique, alternative funds. Montreux specializes in identifying underperforming assets for funds to purchase.


From early 2015, Pathways Care Group Limited (“Pathways”), a specialist residential care home group, was being marketed by BDO UK LLP (“BDO”). The deal to acquire Pathways was known by those involved as Project Panama. It was valued at £43.25 million. Montreux worked on the proposed acquisition of Pathways. Outside investment was required. In 2015, two potential investors were considering financing the acquisition — Ibadar Bank (“Ibadar”) and Shearman Financial (“Shearman”) — but these investors eventually dropped out. Shearman made a substantial contribution towards the costs of the aborted proposed purchase.


In 2016, two new potential investors were considered — Kolaghassi Capital (“Kolaghassi”) and Gulf Financial Holdings (“GFH”). It was part of Mr Godden's then role at Montreux to pursue Project Panama with Kolaghassi and/or GFH. GFH was also looking at other investment opportunities with Montreux in addition to Project Panama.


Mr Godden's employment with Montreux ended on 11 June 2016. At that time, either of Kolaghassi or GFH was considered the most likely investment partner for the proposed acquisition of Pathways. Following Mr Godden's departure, there were discussions between him and Montreux about Project Panama. With the apparent knowledge and consent of Montreux, Mr Godden established his own investment company, Salutem Healthcare Limited (“Salutem”). Initially, it was anticipated that Montreux would invest in Salutem, but this did not in the end occur.


By email of 5 September 2016, Mr Oliver Harris of Montreux wrote to Mr Godden stating it was:

“fine for you to move forward with the business and do the GFH deal, if the deal happens we would like a commission paid day one (No carry or on going fee's [sic]) … I will get Druce's [sic] to revise the documents and circulate so they can be signed this week.”


Druces is a firm of solicitors acting for Montreux. It is agreed between the parties that it was intended by Monteux that Mr Godden was free to continue to pursue Project Panama, working with Kolaghassi and/or GFH. It is also agreed that Montreux stopped pursuing Project Panama at that time.


The Settlement Agreement was signed on 27 September 2016. Clauses 3.3 and 3.4 of the Settlement Agreement provide as follows:

“3.3 In the event of either or both of the Deals completing in any way whatsoever (including for the avoidance of doubt and without limitation, with different counterparties, with a different deal structure) [Mr Godden] undertakes to give notice in writing to Montreux of the details of any Deal at least 5 business days prior to completion.

3.4 [Mr Godden] agrees to pay to Montreux a fee of 1% of the gross value of any such Deal at the time of completion of any such Deal.”


“Deals” is defined in clause 1.1 of the Settlement Agreement:

“Deals: means deal 1 — Kolaghassi Capital — Panama and deal 2 — Gulf Financial Holdings and all matters related to these two deals.”


The Settlement Agreement also provided for payments to be made to Mr Godden (the “Termination Payments”).


In the end, Mr Godden and Salutem did not manage to obtain agreement from Kolaghassi or GFH to invest in Project Panama. Rather, on 21 April 2017, Pathways was acquired by Salutem LD Bidco Limited (“Bidco”). Bidco is a subsidiary of Salutem. Mr Godden is a director and shareholder of Bidco. It is common ground that neither Kolaghassi nor GFH invested in Bidco's acquisition of Pathways. It is not disputed that Mr Godden was involved in the acquisition of Pathways by Bidco.


The Claimants filed this action on 6 September 2017. Pleadings have now closed, and the Particulars of Claim, Defence and Counterclaim and Reply and Defence to Counterclaim were all before me. This application for summary judgment was filed on 10 November 2017.


I understand the facts as set out above not to be in dispute. There are, however, other elements of the factual matrix that are in dispute. These include:

a. whether Montreux's primary interest lay in potential investors or the object of any acquisition;

b. whether Mr Godden used any confidential information belonging to Montreux;

c. whether it would have been possible for Kolaghassi and GFH both to complete the Pathways acquisition; and

d. whether or not Pathways was for sale on the open market.


To the extent it is necessary, I return to these issues below.

Parties' Contentions


In short, Montreux says that the acquisition of Pathways by Bidco was a “Deal” within the meaning of the Settlement Agreement (and more specifically, it is alleged to be “deal 1”) and, hence, Mr Godden was, by virtue of clause 3.3 required to give to Montreux notice of completion of the acquisition of Pathways five days prior to completion (which would have been 14 April 2017). Further, Montreux says that Mr Godden was obliged to pay to Montreux a fee of 1% of the gross value of the acquisition, on the day of completion (21 April 2017). This would be in the order of £400,000. Mr Dominic Chambers QC who appeared for Montreux urged me to determine the point on the summary judgment application.


In addition, Montreux seeks a declaration that it is not obliged to pay the Termination Payments to Mr Godden because (1) Mr Godden has failed to pay the 1% of the value of the Deal that is said to be owed and (2) Mr Godden has allegedly used confidential information owned by Montreux and has represented that he has a continuing connection with Montreux.


Mr Godden denies the claims. His case is that the meaning of “Deals” is restricted to transactions involving two particular investors — Kolaghassi and/or GFH. As neither of these entities was involved in Bidco's acquisition of Pathways, the provisions of clauses 3.3 and 3.4 of the Settlement Agreement have not been triggered because there has been no “Deal”. Mr Godden says that a fee would only have been payable under clause 3.4 if a transaction involving Kolaghassi and/or GFH had completed. Mr Richard Hanke, who appeared for Mr Godden, did not urge me to determine the interpretation point in his client's favour — rather, he said that all he needed to establish to defeat the summary judgment application was that, in the light of the relevant factual matrix, the interpretation of the Settlement Agreement which he put forward is, at the least, sufficiently arguable. Further, Mr Hanke said that even if Montreux's construction of the Settlement Agreement is correct, there are other claims that will require a full trial, and so summary judgment should be denied.


In the wider claim, Mr Godden has counterclaimed for the sum of £108,000, which he says is comprised of outstanding Termination Payments. Montreux has not made any further Termination Payments since January 2017.



I had before me the following witness statements:

a. Two witness statements of Mr Harris, a director of each of the Claimants, CEO of the First Claimant and the Managing Partner of the Monteux Group, the first dated 10 November 2017 and the second dated 13 February 2018; and

b. A witness statement of Mr Godden dated 9 February 2018.


Neither of the witnesses was cross-examined.

Applicable Law


Montreux's application for summary judgment is made under CPR 24.2. The applicable law is uncontroversial: Montreux must show that Mr Godden has no real prospect of successfully defending the claims. Mr Chambers referred me to the guidance helpfully set out by Lewison J (as he then was) in Easyair Limited (trading as Openair) v Opal Telecom Limited [2009] EWHC 339 (Ch). As Simon J sets out in Attrill v Dresdner...

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