Richard Sandor Frischmann v Vaxeal Holdings SA

Hearing dates: 10 and 11 July 2023

Approved Judgment

This judgment will be handed down remotely by circulation to the parties' representatives by email and release to The National Archives. The date and time for hand-down is deemed to be 2pm on 3 November 2023

This is my judgment on the application dated 1 June 2022 of the claimant, Mr Richard Sandor Frischmann ( Mr Frischmann), for summary judgment against the second defendant ( IDM) and the third defendant, Mr Christopher Samuelson ( Mr Samuelson) ( the SJ Application). The first defendant has been dissolved, so that IDM and Mr Samuelson are the only extant defendants ( the defendants).

Mr Frischmann seeks summary judgment:

(i) for sums said to be due to him from IDM and Mr Samuelson under written loan and guarantee agreements which he says have been assigned to him; and

(ii) for the provision of certain information by IDM to which he claims to be contractually entitled under those agreements.

There have been filed in support of the SJ Application and concerning other procedural matters:

(i) four witness statements of Mr William Castledine of Olephant Solicitors acting for Mr Frischmann; and

(ii) two witness statements of Ms Rashmi Dubé acting for the defendants.

Background

On 24 October 2018, Mr Frischmann's father, Dr Willem Frischmann ( Dr Frischmann), advanced £1,000,000 to IDM pursuant to the terms of a facility agreement of that date ( the First IDM Loan).

The purpose of the First IDM Loan was stated to be to support IDM's participation in a joint venture with Britannia's Gold Limited to salvage and recover precious metal cargoes from two identified shipwrecks being: RMS Empress of Britain and SS Laconia.

The Final Repayment date was defined as the earlier of the date of successful completion of the first salvage programme or 30 June 2019.

Clause 7 provided interest was payable at 20% per annum and was to be paid in addition to principal on the Final Repayment Date.

Clause 9(a) provided that:

“[IDM] covenants with [Dr Frischmann] that, from the date of this agreement until all its liabilities under this agreement have been discharged … it will deliver to [Dr Frischmann] promptly such financial or other information as [Dr Frischmann] may, from time to time, request relating to [IDM] or its business”.

Clause 11 provided that amendments to the agreement would only be effective if in writing signed by each party and waivers of any right or remedy under it were only to be effective if in writing by the waiving party.

Clause 12 provided that if any part of the agreement were invalid or illegal or unenforceable it be deemed modified to the minimum extent necessary to make it valid, legal or enforceable or deemed deleted and in neither case to affect the rest of the agreement.

Clause 15 provided that Dr Frischmann's rights under the First IDM Loan were assignable, IDM's were not.

On 24 October 2018 a promissory note was signed by Mr Samuelson for IDM evidencing the advance of £1,000,000 and including an unconditional promise to repay on 30 June 2019.

On 23 November 2018, Dr Frischmann advanced a further £165,000 to IDM pursuant to the terms of a facility agreement of that date ( the Second IDM Loan).

The terms of the Second IDM Loan were materially identical to the First IDM Loan, save that the interest rate was 12% and repayment was due on the earlier of successful completion of the first salvage programme or 22 February 2019.

On 23 November 2018 a promissory note was signed by Mr Samuelson for IDM evidencing the advance of £165,000 and containing an unconditional promise to repay on 22 February 2019.

Also on 23 November 2018, Mr Samuelson provided Dr Frischmann with a guarantee in respect of IDM's liability under the Second IDM Loan ( the Guarantee).

The Guarantee contained guarantee and indemnity covenants and required Mr Samuelson to pay interest compounded monthly from the date of demand at an annual rate of “12% above the base rate of [Dr Frischmann].” The Guarantee was assignable by Dr Frischmann.

On 17 March 2019, IDM and Dr Frischmann entered into a further agreement ( the March Agreement) as follows:

“We refer to the Term Loan Facility agreement dated 24th October 2018 (“the Agreement”), the Promissory Note for £1 million issued thereunder, the subsequent loan of £165,000 and the personal guarantee of Christopher Samuelson covering £165,000. We have raised additional funds and agree to the repayment of £582,500 plus interest of £72,653 making a total payment of £635,260 subject to:

1. The cancellation of the Promissory Note for £1 million and its replacement by a new Promissory Note for £582,500;

2. The amendment of the repayment terms for the £582,500 per the revised Atlantic Subsea Ventures Ltd Shareholders Agreement dated 25th February 2019 whereby IDM Ventures Ltd (IDMV) receives repayment of its loans after James Fisher & Son PLC per Clause 5.2. (see attachment). Your percentage share of the net proceeds received by IDMV becomes 6.85%. (£582,500 equals 34.26% of £1,700,000 and 34.26% of 20% equals 6.85%).

3. That the interest rate for the period of both the £1 million and the £165,000 and for the loan balance outstanding post the repayment of £582,500 be at 15% per annum. The interest of £72,653 is calculated according to this amendment.

4. That the guarantee given by Christopher Samuelson for £165,000 is cancelled.

Please countersign this letter confirming your agreement to the above amendments under the Agreement and letters related thereto. We expect to make the repayment before 31st March 2019 and have calculated the interest due to that date.”

No repayment was made by IDM and no new promissory note for £582,500 was issued.

On 26 September 2019 Dr Frischmann emailed Mr Samuelson asking him to call back. Mr Samuelson's email response on the same day was to the effect that he was dealing with incoming transfers from which Dr Frischmann would “receive repayment of £60,000 plus interest and part of the salvage investment.”

On 8 October 2019 Olephant solicitors, who at that stage were acting for Dr Frischmann, wrote demanding payment by IDM of £582,500 plus interest pursuant to the terms of the March Agreement.

On 18 June 2020, all of Dr Frischmann's rights, title, interest and benefits in and to the First and Second IDM Loans and the Guarantee were apparently assigned in writing to Mr Frischmann ( the Assignment). The Assignment was executed by Mr Frischmann with his own signature “for and on behalf of [Dr Frischmann] by way of a Lasting Power of Attorney” and by Mr Frischmann with his own signature on his own behalf.

On 23 June 2020, Olephant, who were by then acting for Mr Frischmann wrote to Mr Samuelson enclosing written notice of the Assignment to the defendants in the form of notice dated 18 June 2020 again signed by Mr Frischmann once on behalf of Dr Frischmann and once on his own behalf.

The notice of Assignment included these words:

“Notice of assignment

“We refer to the Term Loan Facility Agreement dated 24 October 2018 for the loan of £1,700,000 and the Term Loan Facility Agreement dated 23 November 2018 for the loan of £165,000 made by Dr Wilem Frischmann to IDM Ventures Limited (the “Debts”), as well as the personal guarantee given by Christopher Samuelson on 23 November 2018 (together the “Assigned Documents”).

“On and with effect from 18 June 2020 the Assignor assigned to Mr Richard Frischmann (the “Assignee”) all its rights, title, interest and benefits in and to the Assigned Documents and the Debts. All future correspondence, dealings, deliveries and payments in respect of the Assigned Documents or the Debts should be made to the Assignee.”

The letter enclosed a statutory demand of Mr Samuelson for an amount calculated due from him under the Guarantee. The amount outstanding under the Second IDM Loan at that date was £196,382.83.

Mr Samuelson says he did not receive the statutory demand.

IDM has paid nothing to Dr Frischmann or Mr Frischmann.

On 14 August 2020, Mr Samuelson made a payment of £70,000 to Mr Frischmann. The reasons for the payment are in dispute. Mr Frischmann's position is that it was part-payment under the Guarantee. Mr Samuelson's position is that it was an “ex gratia” payment.

No other sum has been paid by Mr Samuelson, either to Dr Frischmann or Mr Frischmann.

On 15 January 2021 Mr Samuelson emailed Jan Mugerwa at Olephant explaining that he would be making a payment to “your client account” as soon as he was in receipt of funds from one of a number of transactions, none related to the matter of salvage.

A further demand based on the First and Second IDM Loans and the Guarantee was sent to Mr Samuelson by Olephant on 15 January 2021.

On 5 February 2021 Mr Samuelson sent an email to Jan Mugerwa enclosing a spreadsheet showing an account of IDM's funds with Finsbury Trust. It showed incoming funds in the form of Dr Frischmann's advances and three payments of £100,000 made by one Rosemary Ellis in January, April and May of 2019. The spreadsheet does not show incoming funds that would have enabled the payment envisaged by the March Agreement to be made on 31 March 2019. The spreadsheet shows that IDM's balance of funds with Finsbury Trust was zero by mid-December 2019.

On 9 March 2021...