Newmafruit Farms Ltd and Others v Alan Pither and Others
| Jurisdiction | England & Wales |
| Judge | Mr Chamberlain |
| Judgment Date | 09 September 2016 |
| Neutral Citation | [2016] EWHC 2205 (QB) |
| Docket Number | Case No: HQ15X04916 |
| Court | Queen's Bench Division |
| Date | 09 September 2016 |
[2016] EWHC 2205 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Martin Chamberlain QC
(Sitting as a Deputy High Court Judge)
Case No: HQ15X04916
Mr David Head QC and Mr Nathaniel Bird (instructed by Peters and Peters) for the Claimants
Mr David Giles (Instructed by Davis-Law Associates, Chalfont St Peter) for the Defendants
Hearing dates: 29th July 2016
Approved Judgment
Mr Chamberlain QC:
Introduction
The First Claimant, Newmafruit Farms Ltd (" Newmafruit") is a family-owned fruit farming business, of which Mr Melvyn Newman is a director and substantial shareholder. The First Defendant, Mr Alan Pither, is a builder and property developer. Newmafruit claims to have lent substantial sums to Mr Pither and seeks repayment of those sums, together with interest. Newmafruit now applies for an order striking out all or part of Mr Pither's Re-Amended Defence and/or summary judgment on all or part of the claim.
The procedural history
On 26 November 2015, Newmafruit issued a claim for repayment of loans made between April 2009 and February 2014 amounting in total to £2,135,413, plus interest. At that stage, the only defendant was Mr Pither.
In paragraph 1 of the Particulars of Claim it was said that the purpose of the loans was to fund Mr Pither's property development business. At paragraphs 4–6, Newmafruit alleged that the majority of these loans (amounting to £1,623,092) were governed by the terms of an agreement entered into between Newmafruit and Mr Pither on 20 June 2011 (" the June 2011 Agreement"), which provided for repayment by 20 June 2013 together with interest. In addition, there were loans made prior to the June 2011 Agreement (amounting to £100,651), which were said to have been governed by an implied term that they were immediately repayable; and loans made after the June 2011 Agreement (amounting to £411,670), said to have been governed by implied terms derived from the parties' previous course of conduct. Paragraphs 20, 24, 34 and 35 referred to a schedule to the Particulars of Claim, which itemised the loans Newmafruit said were made to Mr Pither.
In paragraph 3 of his Re-Amended Defence, Mr Pither accepted that the Claimant had indeed advanced funds for various developments. At paragraphs 4 and 5, he admitted that on 14 April 2009 AMP Consultants Ltd (" AMP"), a company of which he was director and shareholder, borrowed £125,000 from the Claimant; and on 5 January 2011 he personally borrowed a further £75,000 from the Claimant. But no other admissions were made as to the allegations made at paragraphs 4–6 of the Particulars of Claim and the Claimant was put to strict proof of them: see paragraph 6 of the Re-Amended Defence. Mr Pither admitted entering into the June 2011 Agreement but denied that he was indebted to the Claimant in the sum alleged or at all: see paragraph 7 of the Re-Amended Defence. At paragraphs 34 and 35 of the Re-Amended Defence reference was made to a memorandum of understanding agreed by the parties' solicitors in or around May 2013, but never executed. The failure to execute this document was said to give rise to defences of waiver and estoppel. At paragraphs 46 and following of the Re-Amended Defence, the Defendant pleaded that the loans are unenforceable because of various provisions of the Consumer Credit Act 1974 (" CCA") and the Financial Services and Markets Act 2000 (" FSMA").
The present application was issued on 9 May 2016. It was supported by a witness statement from Mr Martin Beasley, a solicitor employed by Griffin Law, which was then acting for Newmafruit.
A timetable was set by Master Bard. Mr Pither was to file and serve any evidence in response to the application by 4 July 2016. Newmafruit was to file and serve any evidence in reply by 18 July 2016. Both these dates were extended by agreement. The application was listed to be heard on 26 and 27 July 2016.
On 8 July 2016, Mr Pither filed a witness statement. At paragraph 20, he said:
"There is no evidence that I received any payment pursuant to [the Agreement] and the Claimant is invited to produce evidence thereof that I received any such sums at all".
At paragraph 21, he said:
"Part of those monies well in excess of £25,000 were used for personal as opposed to business reasons therefore, I am advised, should potentially come within the CCA and or FSMA and similar legislation and would be susceptible as evidence at trial and not at this interim stage."
At paragraphs 26 and 27, he made reference again to his pleaded defences of waiver and estoppel.
On 22 July 2016, a without notice application was made by Newmafuit, Priory Homes (Kent) Ltd (in administration) (" PH Kent") and Priory Homes (Norfolk) Ltd (in administration) (" PH Norfolk"), the latter two companies being special purpose vehicles established by Mr Pither to undertake specific property developments. That application was heard by Jay J. He ordered that PH Kent and PH Norfolk be joined as claimants; and that Mr Derek Peter, Priory Homes ( East) Ltd (in liquidation) (" PH East"), AMP and Brill Links Sports Management Ltd (" Brill") be joined as (respectively) Second, Third, Fourth and Fifth Defendants. He also granted a worldwide freezing injunction and disclosure order against the Mr Pither, Mr Peter and AMP, tracing orders against PH East and Brill and permission to amend to advance claims in deceit, breach of fiduciary duty, dishonest assistance, conspiracy, breach of contract and unjust enrichment against the Defendants.
The case advanced to justify these orders was described by Mr David Head QC, who appeared for the First Claimant on the application now before me and also for the Claimants in the applications before Jay J, in his skeleton argument for the former application as follows:
"3.1 The New Claims arise principally out of separate lending made by Newmafruit to PH Kent and PH Norfolk, which were special purpose vehicles set up by Mr Pither to develop land in Kent and Norfolk. PH Kent and PH Norfolk engaged PH East, Mr Pither's construction company, to develop the land. Newmafruit lent Priory Kent and Priory Norfolk the monies to acquire the land and paid PH East, on PH Kent and PH Norfolk's behalf, for the purported costs of the constructions works.
3.2 The claimants now believe that a considerable proportion of the sums paid to PH East were not used for the purposes of the property developments, as Mr Pither represented they would be, and were not properly due to PH East. Only a fraction of the work represented by Mr Pither to have been undertaken was actually done. Substantial sums appear to have been misappropriated and used to fund other ventures in which Mr Pither was interested and/or pay his personal expenses. There is also evidence demonstrating that at least some of the sums lent to Mr Pither personally for the express purpose of certain agreed property developments were also misappropriated for other purposes with the involvement of the Second Defendant (Mr Peter), PH East and the Fourth and Fifth Defendants (AMP and Brill respectively).
3.3 AMP and Brill were companies owned by Mr Pither which received significant sums by way of misappropriated monies. Mr Peter, an accountant, is Newmafruit's former Finance Director and Company Secretary. He is a long-standing associate of Mr Pither and was his personal accountant. While acting on behalf of Newmafruit, Mr Peter authorised the vast majority of payments requested by Mr Pither. The claimants believe that Mr Peter authorised these payments knowing that a substantial proportion would not be used for legitimate purposes…"
Preparation for the hearing before Jay J had taken up time. The First Claimant had been intending to serve reply evidence by 20 July 2016 (the date agreed by way of extension of the deadline set by Master Bard). But it did not do so until the evening of 25 July 2016, in the form of a witness statement of Mr Melvyn Newman exhibiting (amongst other things) bank statements said to evidence transfers of funds said to have been lent. At paragraph 26, Mr Newman added this:
"The debt claim set out in the Particulars of Claim included six payments totalling £400,000 made by Newmafruit to the Third Defendant [PH East] (rows 32 to 37 of the Schedule to the Particulars of Claim). Following a legal and factual investigation and analysis of Newmafruit's lending by its newly appointed legal team (Peters & Peters and counsel) it has been concluded that these sums were in fact advanced as part of lending by Newmafruit to the Second and Third Claimants rather than Mr Pither. As such, Newmafruit no longer seeks repayment of these sums as a debt due from Mr Pither and the Particulars of Claim will be amended to reflect this."
It followed that the total sum for which judgment was now sought was £1,735,413. An amended schedule was produced reflecting this.
The present application first came before me on 26 July 2016. Mr Maurice Rifat, who then appeared for Mr Pither, said that Mr Newman's evidence had been served late and there had not been time for him to take instructions on it, let alone time for Mr Pither to respond by evidence of his own. Mr Rifat applied for an adjournment. Mr Head opposed this. I took the view that it would be wrong to determine the application without giving Mr Pither the opportunity to consider, give instructions on and if...
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