Paul Baxendale-Walker v APL Management Ltd
| Jurisdiction | England & Wales |
| Judge | Mr Justice Henry Carr |
| Judgment Date | 19 March 2018 |
| Neutral Citation | [2018] EWHC 543 (Ch) |
| Court | Chancery Division |
| Docket Number | Case No: HC-2017-001610 |
| Date | 19 March 2018 |
[2018] EWHC 543 (Ch)
THE HON Mr Justice Henry Carr
Case No: HC-2017-001610
HC-2017-002043
IN THE HIGH COURT OF JUSTICE
BUSINESS & PROERTY COURTS OF ENGLAND AND WALES
PROPERTY, TRUSTS AND PROBATE LIST (ChD)
Royal Courts of Justice
7 Rolls Building, Fetter Lane
London, EC4A 1NL
Jonathan Seitler QC, Stephen Hackett and Helen Pugh (instructed by Mischon de Reya LLP) for Paul Baxendale-Walker
Peter Crampin QC and Dov Ohrenstein (instructed by Lattey & Dawe Solicitors) for APL Management Limited
Hearing dates: 20,21 and 22 February 2018
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.
This judgment concerns two applications to strike-out and/or obtain summary judgment: the first made by APL Management Limited (“APL”) dated 17 July 2017 and the second by Mr Baxendale-Walker dated 12 January 2018. The Applications are in respect of two claims:
i) a claim by Mr Baxendale-Walker that two loans made to him by APL are void or voidable; and
ii) a claim for possession by APL of one of Mr Baxendale-Walker's properties, Burleigh House, on the basis of Mr Baxendale-Walker's arrears under one of the two loans.
Mr Baxendale-Walker, who is now retired, was a tax advisor. According to the first witness statement of David Wood, a Chartered Legal Executive employed by Lattey & Dawe, solicitors for APL, Mr Baxendale-Walker had been a barrister, until voluntarily disbarred on 5 October 1989, and a solicitor, until being struck off the Roll of Solicitors in 2007.
At paragraph [5] of his first witness statement sworn in response to APL's application, Mr Baxendale-Walker states that he has suffered from increasingly serious ill-health, which is affecting his mental capacity, including his powers of recollection. However, he asserts that his evidence does not depend upon his recollection of events in 2011 or 2013. His witness statements in respect of these applications set out details of the allegedly tax efficient schemes that he set up, and how he considers that he would have reacted, had he been aware of certain facts.
In his role as a tax advisor, Mr Baxendale-Walker provided a Mr Paul Levack with tax planning arrangements (“the Arrangements”), the object of which was to attempt to protect certain of Mr Levack's assets, and the profits of certain companies he operated, from tax. As part of the Arrangements APL was incorporated on 16 March 2010. APL was owned and controlled by Mr. Levack, also as part of the Arrangements. I was informed that APL and Mr Levack are currently under investigation by HMRC.
Pursuant to the Arrangements three offshore trusts were set up: the Riverside Healthcare Limited Remuneration Trust (“the Riverside Trust”), the Dukeries Healthcare Limited Remuneration Trust (“the Dukeries Trust”) and the Allen Paul Levack Remuneration Trust (“the Levack Trust”) (collectively “the Trusts”). It appears that some or all of the Trusts are also being investigated by HMRC. The trustee of the Trusts is a Belizean company known as Bay Trust International Ltd (“Bay”). The Trusts consist of shares in offshore companies. APL's role in the Arrangements was to act as a fiduciary agent of those offshore companies.
It is alleged by Mr Baxendale-Walker that he was and remains a beneficiary of the Trusts as he comes within the definition of “Provider” in the Trust deeds. APL contends that deeds of amendment completed in 2012 narrowed the definition of Provider and so removed Mr Baxendale-Walker as a beneficiary; and that he was expressly excluded by deeds of amendment made in 2017. Mr Baxendale-Walker challenges the validity of those deeds of amendment.
In about late 2011 a Mr Andrew Liyanage, who introduced clients to Mr Baxendale-Walker's allegedly tax efficient arrangements, proposed to Mr Levack that a loan should be made to Mr Baxendale-Walker, who wished to secure finance to acquire a property for the Baxendale-Walker LLP Remuneration Trust. In November 2011 APL lent £3 million to Mr Baxendale-Walker to finance the purchase of a property known as Amberleigh House, 8 Broomfield Road, Oxshott, Surrey, KT22 0LW (“the Amberleigh Loan”). The Amberleigh Loan was secured against Amberleigh House. The loan was for a term of 18 months and it was repaid within that term, together with interest at an agreed rate of 0.834% per month.
On 9 March 2012 Mr Baxendale-Walker secured a loan of £3,661,000 from a lender known as Omni Capital Partners Ltd (“the Omni Loan”) to assist in the purchase of a property in Weybridge known as Burleigh House, Rabbit Lane, Hersham, Surrey, KT12 4AX (“Burleigh House”).
In early 2013 Mr Baxendale-Walker was seeking to refinance the Omni Loan. Mr Liyanage therefore put Mr Baxendale-Walker in touch with Mr Levack with a view to APL making a further loan to Mr Baxendale-Walker to refinance the Omni Loan. On 19 March 2013 APL loaned to Mr Baxendale-Walker £3,865,042 (“the Burleigh Loan”), subject to certain deductions which left a net advance of £3,661,360. Interest was payable on the Burleigh Loan at a monthly flat rate of 2.8% on the balance for the duration of the loan. If interest payments were made within seven days of falling due, and no arrears were outstanding, then interest would be reduced to the flat rate of 1.4% per month.
The Burleigh Loan was made pursuant to an agreement known as “the Facility Agreement”. The Burleigh Loan was paid by APL (via solicitors) to Omni Capital Partners Ltd to redeem the Omni Loan. Funding for the Burleigh Loan was arranged by APL from SG Hambros. The Burleigh Loan was secured by a legal mortgage and registered as a first charge against the title of Burleigh House.
Initially Mr Baxendale-Walker continued to make monthly payments on the Burleigh Loan. On 9 July 2014 he ceased to make the payments that were required by the terms of the Facility Agreement.
The Proceedings in the County Court at Central London
On 16 October 2014 proceedings were issued against APL and Mr Levack by Mr Baxendale-Walker in the County Court at Central London in respect of the Burleigh Loan (“the County Court Proceedings”). At the time, Mr Baxendale-Walker was subject to an Extended Civil Restraint Order which expired on 14 November 2014. I was informed that the Extended Civil Restraint Order only restricted his ability to bring proceedings against the Law Society and therefore did not prevent commencement by him of the County Court Proceedings.
In the County Court Proceedings Mr Baxendale-Walker sought a declaration to the effect that the Burleigh Loan was unenforceable. Mr Baxendale-Walker's case on the Burleigh Loan was pleaded on certain grounds (“the Regulatory Grounds”) which in summary were that:
a) the Burleigh Loan was unenforceable as a matter of consumer credit law because APL was not regulated by the FCA; and
b) the Burleigh Loan terms were unfair and therefore apt to be set aside under certain provision of the Consumer Credit Act 1974 and/or the Unfair Terms in Consumer Contracts Regulations 1999.
Mr Baxendale-Walker also pleaded in the original version of the Particulars of Claim that he had not signed the Burleigh offer letter and the Facility Agreement and that he believed he had not executed the mortgage.
APL brought a counterclaim for a declaration, in wide terms, that the Facility Agreement and the charge over Burleigh House were enforceable. It asked for a declaration that:
“…the loan agreement and its charge over Burleigh House are enforceable against the Claimant and a declaration in respect of the sums due under the agreement and charge.”
In his Defence to the counterclaim Mr Baxendale-Walker denied that APL was entitled to the declaration sought.
At a pre-trial review in the County Court Proceedings, on 24 June 2016, issue 1 on the list of issues for trial was as follows:
“At common law (and ignoring the effect of statute), is the Claimant bound by the terms of the Facility Agreement and/or Mortgage Deed? In particular:
(a) Did he sign those documents and/or otherwise agree to their terms?
(b) Alternatively is he estopped from denying that he signed those documents or otherwise agreed to those terms?
Issue 1 was deleted from the list of issues as Mr Baxendale-Walker's counsel accepted that the Facility Agreement and the mortgage deed for Burleigh House were executed with his authority. This was recorded in the recitals to an Order of Recorder Hancock QC made at the pre-trial review which stated that: “… it being agreed that issue 1 in the list of issues be deleted on the basis that the claimant accepts that he was bound by the facility agreement and mortgage deed”. Thereafter, Mr Baxendale-Walker's Claim in the County Court Proceedings continued on the Regulatory Grounds alone. The counterclaim continued to seek a declaration in wide terms.
The trial of the County Court Proceedings commenced on 18 July 2016 and lasted for 5 days. On the first day HHJ Lamb QC, with considerable foresight in the light of subsequent events, required the Particulars of Claim to be amended to reflect the admission made at the pre-trial review. Previously, the Particulars of Claim stated that Mr Baxendale-Walker did not sign the offer letter and the Facility Agreement and was unaware who purportedly signed them in his name. The Particulars also stated that Mr Baxendale-Walker was, “ unaware that he ever executed the Mortgage.” The Particulars were amended to plead that Mr Baxendale-Walker did not “ recall” executing those documents but that he “ accepts that he is bound by its terms, subject to applicable...
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Dr Angelica Khera v NHS Commissioning Board
...same effect as if the issue was decided by the court under the principle of res judicata (in Baxendale Walker v APL Management Ltd [2018] EWHC 543 (Ch)), but I also do not believe that assists the claimant here for reasons I will expand upon later in my judgment at paragraphs 33/34 and 32 ......