Robert Jewkes v Samuel Alexander Watson
| Jurisdiction | England & Wales |
| Judge | Master Clark |
| Judgment Date | 30 November 2023 |
| Neutral Citation | [2023] EWHC 2993 (Ch) |
| Court | Chancery Division |
| Docket Number | Case No: BL-2023-000602 |
[2023] EWHC 2993 (Ch)
Master Clark
Case No: BL-2023-000602
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
BUSINESS LIST (ChD)
Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL
Arnold Ayoo (instructed by Addleshaw Goddard LLP) for the Claimant
The Defendants in person
Hearing date: 17 November 2023
Approved Judgment
Remote hand-down: This judgment was handed down remotely at 10am on 30 November 2023 by circulation to the parties or their representatives by email and by release to The National Archives.
This is my judgment on the application dated 10 July 2023 of the claimant, Robert Jewkes, seeking to strike out the Defence and/or for summary judgment on his claim.
Parties and the claim
The claimant claims under a deed of assignment dated 15 September 2021 (“the Deed”) under which he assigned to the defendants his rights under a number of commercial agreements in consideration for US$727,000, payable by instalments.
US$697,000 (plus contractual interest) remains unpaid, and the claim is for payment of that sum.
Background
There is limited evidence as to the factual background to the Deed. The defendants (who were 22 and 24 at the time of entering into the Deed) are the children of Gavin Watson. I refer to the defendants individually by their first names, to distinguish them from their father.
The defendants' evidence is that they understood that Mr Watson and the claimant entered into a business partnership in 2019. The claimant loaned Mr Watson money to buy a Hong Kong incorporated company, SnB Brands Limited (“the company”), and also loaned the company money to provide working capital. The arrangement involved a holding company, also Hong Kong incorporated, called Ever Successful Limited (“ESL”), which entered into a “Deed of Share Charge” in favour of the claimant in respect of 10,000 shares in the company.
These agreements were not in evidence before me. They are referred to in the Particulars of Claim as “the Agreements” comprising:
(1) the Personal Agreements – agreements between the claimant and Mr Watson;
(2) the Corporate Agreements — agreements between the claimant and the company;
(3) the ESL Agreements – agreements between the claimant and ESL (in fact, there is only one).
The company's business did not prosper. It became unable to fulfil its obligations to the claimant under the Corporate Agreements, and Mr Watson was unable to fulfil his obligations under the Personal Agreements. At some time in mid 2021, he was also diagnosed with skin cancer. In about July 2021, the claimant required Mr Watson to repay his personal loan of US$355,000. He also proposed that the company go into creditors' voluntary liquidation, and threatened Mr Watson with compulsory liquidation of the company and bankruptcy proceedings if he did not agree to this.
The defendants' evidence is that a mediator, Stuart Corby, proposed that they be assigned the entire debt owed to the claimant (“the Debt”) in consideration of a payment to him, the payments to be made by funds provided to them by the company. The evidence on behalf of the defendants is that they had no involvement in the operations or financial decisions of the company, and had received no personal benefit from the business or the funds advanced to their father. They were, however, it is said, acutely aware that their father's ability to support the family (including their younger siblings aged 10 and 12) was in jeopardy. Emily's evidence is that she has suffered from depression and anxiety disorder from the age of 15, and she has filed a GP's letter confirming this.
A formal deed was prepared by lawyers acting for Mr Watson and the claimant. On 31 August 2021, Mr Watson emailed a draft of the Deed (“the draft Deed”) to the defendants:
“Dear Samuel and Emily
This is the formal document for signing later
Please read it, yes, it sounds rather daunting but it is what it is and Daddy will make sure you guys are not affected by it!
We can talk about it later, just let me know when suits you
Daddy”
He followed this on 14 September 2021 by sending the signing page of the final version of the Deed, not the entire document. The defendants did not at any stage receive independent legal advice before signing it, nor was it ever suggested to them that they do so.
The directly relevant clauses in the Deed are:
(1) By clause 2.1 the Debt was assigned to the defendants:
“in consideration of the sum of US$727,000 (the “Consideration”) together with interest as aftermentioned, to be paid by [the defendants] to [the claimant] in accordance with Part 6 of the Schedule to this Deed, [the claimant] hereby assigns to [the defendants] absolutely all [the claimant]'s rights, title, interest and benefits in and to the Debt and the Agreements, with effect from the Effective Date”.
Clause 1.1 defines the Effective Date as the date of the Deed, i.e. 15 September 2021.
(2) By clause 2.2, the defendants agreed with the claimant that:
(i) that they would be bound by the Agreements from the Effective Date as if they were each a party to the Agreements in place of the claimant; and
(ii) undertook to the claimant that they would discharge the Debt and all the claimant's liabilities and perform all the claimant's obligations under the Agreements due to be discharged or performed.
(3) Pursuant to clause 3.1, the defendants agreed to pay the Consideration and all accrued interest to the claimant in the following instalments (the amounts and the dates of which were set out in Part 6 of the Schedule to the Deed):
(i) US$30,000 by 30 November 2021;
(ii) US$30,000 by 28 February 2022;
(iii) $US$60,000 by 31 May 2022;
(iv) US$60,000 by 31 August 2022;
(v) the remaining balance plus interest of 10% on 31 August 2022.
(4) By clause 3.2, if the defendants did not make payment of any sum due, then all amounts (including interest) would become immediately due.
The first payment due under the Deed, US$30,000, was paid on 30 November 2021 by the company on behalf of the defendants.
The second payment of US$30,000 was due on 28 February 2022. On 27 February 2022, Samuel wrote to the claimant:
“Emily and I are writing to advise you that there is a possibility that this month's payment may be delayed due to personal circumstances that have arisen over the last few months. Our father was diagnosed with an aggressive form of cancer in late September and has undergone a number of urgent operations and treatment prior to his departure back to the UK pre Xmas. The treatment continues here in the UK. With no medical insurance to cover this (in Hong Kong) the cost was high both financially and mentally on the family. The diagnosis was out of the blue and obviously very concerning, and we have not taken its ramifications lightly.
We expect that as a result of this outlay, there may be a delay in payment. However, we can assure you that payment will be made albeit possibly slightly later than previously arranged, possibly 1 to 3 weeks, just waiting on our father to firm up this.
Furthermore, we would like to take this opportunity to request and discuss a more manageable payment plan. We would like to request that the current plan is further spread out so that we would still provide you with the repayments, in smaller amounts, over a longer period, which would allow us to be able to deliver these payments to you consistently on time and in full with interest paid on all outstanding amounts.”
On 31 March 2022, the second payment not having been received, the claimant made a formal demand under clause 3.2 of the Deed for the full sum outstanding plus contractual interest. He continued:
“I am saddened to hear of your father's illness. It is for you to decide whether to take these circumstances into account when seeking to recover sums to which you are entitled under the loans assigned to you under the Deed. These circumstances are not relevant to the arrangements between us, and have no bearing on your obligations to me under the Deed.”
This was followed by the claimant's solicitors' letter before claim dated 17 June 2022. The claim was issued on 19 April 2023. The defendants have acted in person throughout the proceedings; in setting out the law below, I have allowed for the fact that they are not lawyers.
The defences put forward by the defendants can be summarised as:
(1) Non est factum;
(2) Undue influence;
(3) Duress;
(4) Frustration of the Deed.
Claimant's application
The application notice seeks to strike out the defence on all three of the grounds in Rule 3.4(2) of the Civil Procedure Rules 1998 (“the CPR”), and summary judgment under Part 24 of the CPR. However, in his oral submissions, the claimant's counsel accepted that ground 3.4(2)(b) did not add to ground 3.4(2)(a) on the facts of this case; and realistically accepted that the court would not strike out the Defence under ground 3.4(2)(c) without giving the defendants the opportunity to correct its deficiencies in compliance with the rules.
Evidence
The claimant's evidence was the witness statement dated 3 July 2023 of his solicitor, Danielle Cooper, who has no direct knowledge of the relevant events, and whose witness statement consists of a commentary on the correspondence and legal argument.
The material relied upon by defendants was:
(1) a “Statement of Case” filed on 9 May 2023;
(2) the Defence Statement of Samuel and Emily Watson dated 9 November 2023 and the exhibits to it (“the Defence Statement”);
(3) a witness statement dated 14 November 2023 signed by both defendants;
(4) a witness statement dated 15 November 2023 of the defendants' mother, Paula Watson.
Samuel appeared in person at the hearing. Emily's...
To continue reading
Request your trial