Richard Slade and Company Ltd v Guinevere Holdings Ltd (a company incorporated in the Territory of the British Virgin Islands
| Jurisdiction | England & Wales |
| Judge | Ms Lesley Anderson |
| Judgment Date | 28 July 2023 |
| Neutral Citation | [2023] EWHC 1869 (Comm) |
| Court | King's Bench Division (Commercial Court) |
| Docket Number | Case No: LM 2022-000134 |
[2023] EWHC 1869 (Comm)
Lesley Anderson KC sitting as a Deputy Judge of the High Court
Case No: LM 2022-000134
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
LONDON CIRCUIT COMMERCIAL COURT (KBD)
Royal Courts of Justice
Rolls Building, Fetter Lane, London, EC4A 1NL
Sebastian Kokelaar (instructed by Richard Slade & Company Limited) for the Claimants
William Edwards (instructed by Geldards LLP) for the Defendants
Hearing dates: 27 June 2023
This judgment was handed down by the Judge 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 10:30 on Friday 28 July 2023.
Ms Lesley Anderson KC sitting as a Deputy High Court Judge:
This is my reserved judgment following the hearing of two opposed applications: the application of the Claimants by application notice dated 16 November 2022 for summary judgment on the claim pursuant to CPR rule 24.2; alternatively for an order striking out the Defence pursuant to CPR rule 3.4(2) (“the Strike Out/SJ Application”) and the application of the Defendants by application notice dated 16 June 2023 for permission to amend their Defence to raise a new defence (“the Amendment Application”).
By way of overview, the Claimants seek payment of the sum of £2,462,586.00 alleged to be due to the Second Claimant, and charged by way of equitable charge to the First Claimant, by the First Defendant as primary obligor and the Second Defendant as surety, under a Commitment Letter dated 22 December 2016 (“the Commitment Letter”).
The Strike Out/SJ application was supported by the witness statement of Richard John Slade (“Mr Slade”), the managing director of the First Claimant, dated 15 November 2022 and opposed by the witness statement of Richard Leighton Hayward (“Mr Hayward”), the Second Defendant, dated 23 February 2023.
The Factual Background
Richard Slade and Company Limited (“Richard Slade”), the First Claimant, is a law firm practising from offices in Gray's Inn, London. Over a number of years it has acted in litigation and arbitration proceedings in this jurisdiction for Grenda Investments Limited (“Grenda”), a company incorporated in the Territory of the British Virgin Islands (“BVI”) and the Second Claimant, and for various other entities including Phoenix Group Foundation (“Phoenix”), Minardi Investments Limited (“Minardi”), Bluestone Securities Limited (“Bluestone”) and Bridgehouse (Bradford No. 2) Limited (“Bridgehouse”) (together “the Other Entities”). Grenda and the Other Entities are said to be indebted to Richard Slade for a substantial sum in respect of the work done on their behalves.
Guinevere Holdings Limited (“Guinevere”), the First Defendant, is a company also incorporated in the BVI. It carries on the business of property development. Guinevere is the registered proprietor of 55 High Street, Newport, which is registered at the Land Registry with title number WA600930, Land at Port Talbot Industrial Estate, Port Talbot, which is registered at the Land Registry with title number WA615448 and 154 High Street, Newport and 1–3 Station Approach, Newport which is registered at the Land Registry with title number WA148832 (together “the Release Properties”).
Mr Hayward is a business owner and property investor and developer who has been involved in multiple businesses over a variety of sectors but who, more recently, focuses on his property business. Guinevere and Alymere Holdings Limited (“Alymere”) are both ultimately owned by the Montpelier Trust, a Jersey trust of which Mr Hayward is the protector and a discretionary beneficiary. Alymere is a company incorporated in Jersey and, although not a party to this claim, is of some importance.
Although the precise relationship between them is in issue, Andrew Ruhan (“Mr Ruhan”) and Anthony Stevens (“Mr Stevens”) are said to be connected with Grenda. According to Mr Slade, Mr Stevens is the sole director of Grenda. Mr Hayward met and developed a business relationship with Mr Ruhan in 2013. It is not in dispute that Mr Ruhan and Mr Stevens have been involved in complex litigation on a number of fronts and that Richard Slade acted for Mr Stevens and various of the corporate entities involved. The litigation includes: (i) proceedings brought by the SFO arising from a fraud perpetrated by a Dr Smith; (ii) divorce proceedings between Tania Jane Richardson-Ruhan, Mr Ruhan's then wife, and Mr Ruhan and (iii) proceedings brought by Hotel Portfolio II Ltd and (iv) a dispute between Bridgehouse and BAE Systems Plc. I have been provided by the Defendants with various of the relevant reported authorities. The Hotel Portfolio proceedings were tried by Foxton J. who made certain adverse findings about Mr Stevens and Mr Ruhan, including that they had consistently lied about their relationship, and in respect of the transactions in issue in that case, that Mr Stevens was acting as Mr Ruhan's nominee. While I have not read the relevant judgments in full, for present purposes it seems to me right to conclude that in multiple pieces of litigation in which Richard Slade has acted for Mr Stevens, there have been allegations that he was acting as Mr Ruhan's nominee and that this was disputed by Messrs Ruhan and Stevens.
In summary, the present proceedings are concerned with a high-interest bridging loan made by Grenda to Alymere.
The Contractual Framework
Specifically, on 9 May 2014, a facility agreement was made between Alymere as Borrower (1) and Grenda as Lender (2) whereby Grenda agreed to lend Alymere a sum not exceeding £600,000 (“the Total Facility Amount”) (“the 2014 Facility Agreement”). Alymere drew down the Total Facility Amount on 9 May 2014.
Although I was not provided with a copy of it (because it was superseded in 2015 by a further intercreditor agreement which I describe below), on the same date an intercreditor deed was entered into between Alymere (1), Longbow Investment No. 3 s.à.r.l. (“Longbow”) (2), Grenda (3) and Mr Hayward (4) (“the 2014 Inter-Creditor Deed”). It was not in issue that the earlier intercreditor deed was in substantially identical terms to the later one and that it had the effect that the Junior Liabilities (including the sums which had been lent by Grenda) were subordinated to the Senior Liabilities (being the much more significant liabilities of Alymere and Guinevere to Longbow). Longbow had lent Alymere and Guinevere something in the region of £30 million.
Clause 6 of the 2014 Facility Agreement provides for interest to be paid by Alymere on the Total Facility Amount at a rate of 10% per annum between 20 September 2013 (the date that Grenda committed the funds for the purposes of the loan) until the date of drawdown, at a rate of 20% per annum compounding annually after drawdown, and a default fixed rate of 30% per annum compounding annually.
Clause 8 of the 2014 Facility Agreement provides for repayment of the loan and all accrued interest on the earlier of (i) 9 May 2020 (being the sixth anniversary of the date of the agreement) or (ii) the date on which Alymere repaid the Senior Liabilities, as defined by the 2014 Intercreditor Deed.
On 30 June 2015, Alymere (1), Guinevere (2), various companies associated with Mr Hayward listed in Part 2 of Schedule 1 who had been the original guarantors of the debt (3), and Longbow (4) entered into a further Facility Agreement (“the 2015 Facility Agreement”). The 2015 Facilities Agreement is lengthy (145 pages) and complex.
Clause 2.1 of the 2015 Facility Agreement provides for a facility to Alymere of c. £30 million on a term facility (being £22,365,863.18 in respect of Sub-Facility A and £7,442,632.98 in respect of Sub-Facility B) and for a loan facility (“the Development Facility”) to Guinevere.
Clause 3.1 of the 2015 Facility Agreement provides that the purpose is: (i) for Alymere to re-finance its existing indebtedness to Longbow pursuant to an earlier facility agreement dated 20 September 2013 between Alymere (1) and Longbow (2), (ii) to enable Guinevere to re-finance its existing indebtedness to HSBC Bank Plc and (iii) to enable Guinevere to meet the costs of carrying out the refurbishment and development of the Release Properties into a 60 bedroom hotel with ancillary restaurant together with administration and back of house areas (“the Development”). According to the evidence, Premier Inn was lined up to take a lease of the hotel once it had been completed.
Clause 6 of the 2015 Facility Agreement, read together with the relevant definitions, provides that the loans made by Longbow to Alymere and Guinevere were to be repaid by 25 October 2019. Longbow had the benefit of a substantial package of security including guarantees from Alymere and Guinevere and the 9 other companies listed in Part 2 of Schedule 1 and charges over the 15 properties listed in Schedule 2, including the Release Properties.
Clause 10 of the 2015 Facility Agreement provides for Alymere to pay to Longbow (i) an arrangement fee in the amount and on the terms set out in a Fee Letter and (ii) an exit surplus fee in the amount and terms agreed in a Fee Letter. The Fee Letter is dated 30 June 2015 (“the Fee Letter”).
On the same day as the 2015 Facility Agreement, Alymere (1), Longbow (2), Grenda (3) and Mr Hayward (4) entered into an intercreditor deed (“the 2015 Intercreditor Deed”) which had the effect that the liabilities of Alymere and Guinevere to Longbow (defined as “the Senior Liabilities”) were to rank in priority to...
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