Umrish Ltd v Mr Bobby Gill
| Jurisdiction | England & Wales |
| Judge | Simon Salzedo |
| Judgment Date | 12 June 2020 |
| Neutral Citation | [2020] EWHC 1513 (Ch) |
| Court | Chancery Division |
| Docket Number | Case No: BL-2018-002370 |
| Date | 12 June 2020 |
[2020] EWHC 1513 (Ch)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
CHANCERY DIVISION
Royal Courts of Justice
Rolls Building, Fetter Lane, London, EC4A 1NL
Simon Salzedo QC sitting as a Deputy Judge of the Chancery Division
Case No: BL-2018-002370
Siward Atkins QC (instructed by Hugh Cartwright & Amin) for the Claimants
Madeline Dixon (instructed by Cole Francis Limited) for the Defendant
Hearing dates: 11 – 13 May 2020
Judgment Approved by the court for handing down
Simon Salzedo QC sitting as a Deputy High Court Judge Simon Salzedo QC sitting as a Deputy High Court Judge:
Mr Bobby Gill (“ Mr Gill”), signed personal guarantees of the obligations of Swisspro Asset Management AG (“ Swisspro”) to repay to the Claimants sums that would fall due under Funding Agreements referable to loans totalling £1.5 million (plus interest). The Claimants have called on Mr Gill's guarantees. Mr Gill denies liability. Mr Gill contends that the guarantees were never delivered by him to the Claimants and that the Claimants are estopped from claiming under the guarantees by reason of certain assurances he was given on their behalf by Mr Srinivasan Venkatesh (“ Mr Venkatesh”).
At a trial conducted by Skype for Business I have heard evidence from Mr Gill and Mr Venkatesh and also from 3 other witnesses called by the Claimants. I have been assisted by able submissions made by Mr Siward Atkins QC for the Claimants and Ms Madeline Dixon for Mr Gill.
Issues
The issues for resolution are the following:
i) Delivery. On 27 November 2016, Mr Gill signed the four guarantees (one for each Claimant's Funding Agreement), scanned the signature pages and emailed the scans to the Claimants. It is in issue whether this conduct constituted “delivery” so as to bind Mr Gill to the guarantees, or if Mr Gill was making a “gesture of goodwill to the Claimants”, with a view to becoming bound at a later meeting which never took place.
ii) Estoppel. Mr Gill and Mr Venkatesh met on 26 September 2016 and spoke on the telephone on 6 October 2016. Mr Gill's case, which Mr Venkatesh denies, is that during these conversations Mr Venkatesh represented that Mr Gill should not regard the guarantees as enforceable, the Claimants would not enforce them, the guarantees were “simply to act as a ‘sleeping pill’ for the Claimants”, and the guarantees were to have effect only until 31 March 2017, after which they would have no effect. These representations are said to constitute promises engaging the principle of promissory estoppel, alternatively representations of fact which bind the Claimants not to enforce the guarantees at all or after 31 March 2017.
Facts: approach
There is one key dispute of primary fact, which is whether Mr Venkatesh made the representations upon which Mr Gill relies. That issue was the subject of starkly opposing testimony from Mr Gill and Mr Venkatesh, including oral evidence in chief which I directed should be taken on this one issue. The relevant events took place some 3 1/2 years before the witnesses gave evidence and were the subject of discussion in emails and other correspondence. I take account of the points made by Leggatt J about the fallibility of human recollection in Gestmin SGPS SA v Credit Suisse (UK) Ltd [2013] EWHC 3560 (Comm) and Blue v Ashley [2017] EWHC 1928 (Comm). I have also reminded myself of the need to make findings of fact on the basis of all the evidence, as explained by the Court of Appeal (Floyd, Henderson and Jackson LJJ) in Martin v Kogan [2019] EWCA Civ 1645, [88].
In what follows, I start by summarising the undisputed facts and what I find to be the most relevant of the contemporaneous documents and referring to limited parts of the evidence given about them. I then refer to the disputed oral evidence about the key conversations before making findings of fact. This order of consideration does not indicate that one form of evidence is subordinate to the other, but the assessment of fact as an iterative process must start somewhere and in this case it seems to me that the documents are a surer point of departure than any other.
Facts: the documents and undisputed facts
The story starts on 9 September 2016 with Mr Robert Courtneidge effecting an introduction by email between Mr Venkatesh and Mr Gill. Mr Courtneidge, a solicitor, was a mutual friend of Mr Gill and Mr Venkatesh. He stated that the introduction was so that Mr Gill could “update you on his fx product which is making customers 2%+ a month on investments now and has over £20m invested.” This email reflects the essential business proposition that Swisspro had the ability to carry out trading in currencies on its own account to such profitable effect that it could pay investors 2% per month fixed return. Mr Gill was Chairman of the Board of Swisspro and its sole shareholder. He was interested in finding additional finance for Swisspro. Mr Venkatesh represented the Claimant companies and was interested in finding profitable investments for them.
The first meeting was arranged for 26 September 2016 at Home House in Portman Square in London. In addition to Mr Venkatesh and Mr Gill, Mr Courtneidge attended and so did Mr Satish Swaminathan (also known as Mr Chandra). It is not in dispute that Mr Gill explained his business proposition to Mr Venkatesh. Mr Venkatesh indicated that if the Claimants were to invest in Swisspro, then Mr Venkatesh would require a personal guarantee from Mr Gill, and Mr Gill made clear he was reluctant to provide one. It is also agreed that no resolution was reached at this meeting.
The day after the meeting, Mr Gill sent to Mr Venkatesh a one page document concerning the business (which Mr Gill accepted was misleading) and asked for Mr Venkatesh's “requirements”.
On 5 October 2016, Mr Courtneidge sent to Mr Gill a draft form of personal guarantee. Mr Gill stated in evidence that this was done at his request.
It is common ground that a telephone conversation took place between Mr Gill and Mr Venkatesh on or about 6 October 2016 during which personal guarantees were discussed again. That is reflected by an exchange of emails on that date in which Mr Gill said he would prepare and send to Mr Venkatesh a draft personal guarantee the following week.
On Monday 10 October 2016, Mr Gill sent a draft guarantee he had received from Mr Courtneidge to a lawyer employed by one of his companies, Ms Christou. Mr Gill asked Ms Christou if she had time to look at it, explaining: “I am offering a PG to one for Robert's [Mr Courtneidge's] clients as a personal favour to him on 1m he will put into our investment structure. I wouldn't ordinarily do this as the deal stacks up on its own merits by a long way. Please can you top, tail, add my name, etc and home address. Check it to make sure it makes sense in relation to our transaction, and possibly neutralise it a bit if it is too heavy handed.”
It is not clear whether Ms Christou replied to Mr Gill, but later that day, at 18:57, Mr Gill sent the draft form of guarantee unchanged to Mr Venkatesh, together with a draft loan agreement and further explanations of the business proposition. The explanations were accepted by Mr Gill to have been inaccurate. The draft guarantees sent by Mr Courtneidge to Mr Gill and by Mr Gill to Mr Venkatesh included signature blocks for both beneficiary and guarantor and they also included a representation and warranty that “the obligations expressed to be assumed by [the guarantor] under this deed are legal, valid, binding and enforceable obligations.”.
By email on 11 October 2016, Mr Venkatesh asked for a call to discuss some points on the draft loan agreement, including a clause that provided that no delay by the lender in exercising any rights would operate as a waiver of such rights. The requested conversation took place on 13 October 2016 between Mr Venkatesh, Mr Gill and an employee (compliance manager) of the Claimants, Ms Karthika Venkatesh, (“ Ms Venkatesh”) who took a note. The note stated in relation to the delay clause: “This is intended to benefit the client (SV). Let's say BG is in breach and he says he will pay in 30 days. But for some reason SV waits for more than 30 days for whatever reason. Even if SV wait [sic], this is not treated as you're not going to do something in the future. This is mainly for personal guarantee.” In cross-examination, Mr Gill said that he remembered the discussion of the waiver issue and he did not dispute what was written in Ms Venkatesh's note. It is not clear from the note who was speaking but in the light of the earlier email it is likely, and I find, that the note reflects what Mr Gill said to Mr Venkatesh to explain the delay clause in the draft loan agreement.
At the end of the note, Ms Venkatesh recorded the following: “Let's try to set up a Key Man Insurance. That way if personal guarantee doesn't work out, then insurance can cover the payment. Send contract details of key man insurance to BG. £1.5 Million Personal Guarantee.” Mr Gill said he did not recall this part of the discussion.
On 8 November 2016, Mr Gill wrote to Ms Venkatesh attaching a revised draft loan agreement, noting at paragraph 1 of the email that there would need to be three separate agreements with the three companies which were then anticipated to be the lenders. Mr Gill then said at paragraph 2: “We are agreed on the PG, and again you will simply need to add the name of the entity that will benefit from the PG. So you will send me 3 PG...
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