Promontoria (Oak) Ltd v Nicholas Michael Emanuel
| Jurisdiction | England & Wales |
| Judge | Lord Justice Henderson,Lord Justice Phillips,Lord Justice Nugee |
| Judgment Date | 18 November 2021 |
| Neutral Citation | [2021] EWCA Civ 1682 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: A3/2020/0683 Case No: A3/2019/2606 Case No: A4/2020/1509 Case No: A3/2020/1596 |
Lord Justice Henderson
Lord Justice Phillips
and
Lord Justice Nugee
Case No: A3/2020/0683
Case No: A3/2020/0684
Case No: A3/2019/2606
Case No: A4/2020/1509
Case No: A3/2020/1596
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS IN BRISTOL
APPEALS (ChD)
Mr Justice Marcus Smith
[2020] EWHC 104 (Ch) and [2020] EWHC 563 (Ch)
Royal Courts of Justice
Strand, London, WC2A 2LL
ON APPEAL FROM THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS IN BIRMINGHAM
BUSINESS LIST (ChD)
His Honour Judge David Cooke (sitting as a Judge of the High Court)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS IN MANCHESTER
CIRCUIT COMMERCIAL COURT (QBD)
His Honour Judge Stephen Davies (sitting as a Judge of the High Court)
[2020] EWHC 2136 (Comm) and [2020] EWHC 2137 (Comm)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS IN NEWCASTLE
APPEALS (ChD)
His Honour Judge Kramer (sitting as a Judge of the High Court)
Hugh Sims QC and Oliver Mitchell (instructed by Brains Solicitors) for Mr and Mrs Emanuel
Jamie Riley QC and James McWilliams (instructed by Addleshaw Goddard LLP) for Promontoria (Oak) Ltd
Mr Samra in person
Jamie Riley QC and James McWilliams (instructed by Addleshaw Goddard LLP) for the Respondent
Trevor Berriman, Katie Wilkinson and Thomas Wheeler (instructed by Trinity Law Solicitors) for the Appellants
Jamie Riley QC and James McWilliams (instructed by Addleshaw Goddard LLP) for the Respondent
Antoine Tinnion (instructed by Mr Luckhurst-Matthews, General Counsel, the Thompson Group) for the Appellants
Kelly Pennifer (instructed by Addleshaw Goddard LLP) for the Respondent
Hearing dates: 18, 19 and 20 May 2021
Approved Judgment
Lord Justice Henderson, Lord Justice Phillips and
Introduction
This is the judgment of the Court to which all members have contributed.
There are a number of appeals before the Court. The first three cases, Promontoria (Oak) Ltd v Emanuel ( “the Emanuel case”), Promontoria (Henrico) Ltd v Samra ( “the Samra case”), and Promontoria (Chestnut) Ltd v Simpson ( “the Simpson case”) all arise out of the acquisition by companies in the Promontoria group of portfolios of loans from Clydesdale Bank plc ( “Clydesdale”); in each case the relevant Promontoria company brought a claim against the debtor(s) to enforce payment of a loan as assignee of Clydesdale's rights. The terms on which the Promontoria group acquired the portfolios are regarded as commercially sensitive and that has led the Promontoria companies to cover up or redact, to a greater or lesser extent, certain documents on which they rely. As these cases illustrate, this practice has given rise to a number of questions which have troubled judges up and down the country.
In the fourth case, Bibby Invoice Discounting Ltd v Thompson Facilities and Project Management Services Ltd ( “the Bibby case”), the claim has a rather different background, being a claim brought by an invoice discounter on invoices due. But it shares the same features with the Promontoria cases that the claim is brought by the claimant as assignee of a debt, that the terms on which the claimant acquired title to the debt are regarded by it as commercially sensitive, and that it has therefore relied on documents in a redacted form.
Nugee LJ granted permission to appeal in each case and directed that they be heard together on the basis that they raised a common issue, namely how a trial judge should deal with a document which (a) is a document on which the claimant needs to rely to prove its title to sue but (b) is presented to the Court in a redacted form on (claimed) grounds of relevance and confidentiality.
In the event the argument on this general point of principle was fairly limited, all parties accepting that the starting point was the guidance given by Henderson LJ in Hancock v Promontoria (Chestnut) Limited [2020] EWCA Civ 907 (“ Hancock”). We refer to this in detail below, but we can reaffirm that the approach to be taken in cases such as this is to be found in that judgment.
Most of the argument was therefore taken up with points of detail specific to the particular appeals, which raise no points of general principle.
In this judgment we will therefore address the point of general principle first, and then deal with the points raised by the particular appeals.
Background – the Promontoria cases
Having had the advantage of seeing the documentation and evidence in three Promontoria cases, the structure of the transactions which form the background to these claims is now reasonably clear to us; it does not of course follow that all the judges in the individual cases were in the same position.
We can take as an example the facts in the Simpson case where a detailed explanation was given in the evidence of Mr Cooper of Addleshaw Goddard LLP, the solicitors acting for the Promontoria companies. This was to the following effect. The Promontoria companies are part of the wider structure of Cerberus Capital Management LP group ( “Cerberus”), a private investment firm headquartered in New York. Part of Cerberus's investment strategy is to acquire portfolios of non-performing loans. One such portfolio, referred to as the Chestnut portfolio, was acquired from Clydesdale and National Australia Bank Ltd ( “NAB”), NAB being the group company which owned and controlled Clydesdale. (The facilities granted to Mr and Mrs Simpson were in fact granted by “Yorkshire Bank”; this originally referred to a bank called Yorkshire Bank plc ( “Yorkshire”), but it appears from the loan documentation that at some date in 2004 Yorkshire's business and assets were transferred to Clydesdale pursuant to a private Act called the National Australia Group Europe Act 2001, Clydesdale retaining Yorkshire Bank as a trading name, and that after that date “Yorkshire Bank” therefore referred to Clydesdale, trading as Yorkshire Bank. 1)
By a Sale and Purchase Agreement ( “the Chestnut SPA”) dated 27 July 2014 and made between NAB, Clydesdale and a Promontoria company called Promontoria Holding 97 BV ( “Holding 97”), Holding 97 agreed to buy the Chestnut portfolio of non-performing loans, Holding 97 being a Dutch company that is, as its name suggests, a holding company. The Chestnut SPA merely effected the sale and not the transfer of title, and it is apparent from its terms that it was always contemplated that another Promontoria company would be substituted as the final purchaser in whose favour the purchase would be completed. Thus Holding 97 was referred to as “the Initial Buyer”; references to “the Buyer” referred to the Initial Buyer up to the Novation Date and thereafter to “the Novated Buyer”; and “the Novated Buyer” referred to a wholly owned subsidiary of Holding 97 to be incorporated in Ireland.
In due course this is what happened. Promontoria (Chestnut) Ltd ( “Promontoria Chestnut”) was incorporated in Ireland; by a Deed of Novation and Amendment ( “the Chestnut Novation”) dated 29 September 2014, the Chestnut SPA was novated from Holding 97 to Promontoria Chestnut; and by an Assignment and Assumption Deed ( “the Chestnut Assignment”) of 5 June 2015, the Chestnut SPA was completed, insofar as it concerned the pool of assets which included the claims against Mr and Mrs Simpson, 2 in favour of Promontoria Chestnut.
As explained in more detail below, Mr and Mrs Simpson had given guarantees to Clydesdale and Promontoria Chestnut sued them on the guarantees as assignee of Clydesdale's rights, relying on the Chestnut Assignment to prove their title.
The other Promontoria transactions would appear to have followed a similar pattern. In the Samra case, the claim was brought by Promontoria (Henrico) Ltd ( “Promontoria Henrico”) against Mr Samra to enforce two mortgages which he had granted to Yorkshire and Clydesdale respectively. Here there were: (i) a Sale and Purchase Agreement ( “the Henrico SPA”) dated 15 December 2014 and made between NAB, Clydesdale and a Promontoria company called Promontoria Holding 93 BV ( “Holding
In the Emanuel case, the claim was brought by Promontoria (Oak) Ltd ( “Promontoria Oak”) against Mr and Mrs Emanuel to enforce a mortgage that they had given to Clydesdale. Promontoria Oak relied on an Assignment and Assumption Deed ( “the Oak Assignment”) dated 16 September 2016 and made between NAB, Clydesdale and itself. That referred to a Sale and Purchase Agreement ( “the Oak SPA”). As explained below no copy of the Oak SPA was in evidence, but there was in evidence a letter dated 24 June 2016 from NAB and Clydesdale to Mr and Mrs...
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