Valbonne Estates Ltd v Cityvalue Estates Ltd
| Jurisdiction | England & Wales |
| Judge | Mrs Justice Bacon |
| Judgment Date | 09 March 2021 |
| Neutral Citation | [2021] EWHC 544 (Ch) |
| Court | Chancery Division |
| Docket Number | Case No: BL-2020-002167 |
| Date | 09 March 2021 |
[2021] EWHC 544 (Ch)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
BUSINESS LIST (ChD)
Rolls Building
Fetter Lane
London
EC4A 1NL
Mrs Justice Bacon
Case No: BL-2020-002167
Gary Blaker QC (instructed by SBP Law) for the Applicant
Harry Hodgkin (instructed under the public access scheme) for the First Respondent
Edward Levey QC (instructed by Stewarts) for the Second Respondent
Hearing dates: 18–19 February 2021
Approved Judgment
I direct that no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
The present dispute is between three property investment companies and concerns the leasehold interest in a property known as Beckton Arms, Beckton Road, London E16 1PY (“the property”). On 10 December 2020 Mann J granted the Applicant (“Valbonne”) a pre-action injunction on a without notice basis, restraining the First Respondent (“Cityvalue”) from selling, disposing of, encumbering or otherwise dealing with the property, restraining the Second Respondent (“UHL”) from acquiring any interest in the property, and restraining both Respondents from registering at the Land Registry any dealing with the property that had already taken place.
Valbonne now seeks to continue that injunction to trial. The Respondents seek to have the injunction set aside on the basis of a series of alleged misrepresentations and non-disclosures in the hearing before Mann J, which are said to constitute material breaches of the duty of full and frank disclosure. If the injunction is set aside on that basis, Valbonne says that it should nevertheless be re-granted, either on an interim or a final basis. The Respondents oppose any re-grant of the injunction on various grounds, including that the injunction would be ineffective because the sale to UHL was completed before it was granted, that no claim has been served on UHL, and that the Particulars of Claim that have been produced for the (unserved) claim against UHL do not set out any properly pleaded case that would give rise to a proprietary interest on the part of Valbonne.
Valbonne was represented at the hearing by Mr Gary Blaker QC (who did not appear at the hearing before Mann J). Cityvalue and UHL were represented by Mr Harry Hodgkin and Mr Edward Levey QC respectively. In the circumstances of the current Covid pandemic, the hearing was conducted remotely using Microsoft Teams.
Factual background
Valbonne and Cityvalue are both companies owned by members of the ultra-orthodox Jewish community in North London. The leasehold interest in the disputed property was until at least November 2020 owned by Cityvalue.
In January 2015 Valbonne and Cityvalue exchanged contracts for the purchase of the property by Valbonne for a sum of £495,000, with a completion date of 27 February 2015. One of the conditions for completion was, however, that consent to the assignment should be obtained from the freeholder, the London Borough of Newham. Due to difficulties in obtaining that consent the purchase was not completed, and there was then a dispute as to whether the contract had been rescinded. Among other things, the dispute raised the issue of whether Cityvalue had exercised reasonable endeavours to obtain the consent of Newham. In August 2015, with the dispute unresolved, Valbonne registered a Unilateral Notice on the title of the property, which provided notice that there was a contract for sale between Valbonne and Cityvalue.
In 2018, having failed to negotiate a settlement of their dispute, Valbonne and Cityvalue agreed that the dispute would be subject to arbitration before the Beth Din of the Union of Orthodox Hebrew Congregations (also known as the Kedassia Beth Din; for convenience I will simply refer this as the “Beth Din”). The arbitration agreement was signed by Mr Halpert, a director of Valbonne, and Mr Haut on behalf of Cityvalue. The Beth Din arbitration panel consisted of three Jewish halachic judges known as Dayanim, one of whom was Dayan Schwarcz.
Meanwhile it appears that in 2017 Cityvalue entered into an option agreement with UHL (a non-Jewish buyer) giving the latter an option to purchase the property for a far higher sum of over £2m. Valbonne discovered this in 2019 during the course of the Beth Din arbitration process.
On 1 October 2020 the Beth Din concluded the arbitration with a decision finding that Valbonne was entitled to complete on the purchase; that it had to provide the completion funds within 28 days; and that Cityvalue was then to transfer the property to Valbonne. That decision was provided in writing to the parties in Hebrew, and has subsequently been translated into English. I will refer to this as the First Award.
For various reasons – again apparently connected with the consents required from Newham – the funds were not transferred by Valbonne within the 28 day deadline, and on 19 November 2020 there was a further hearing of the Beth Din at which representatives of both Valbonne and Cityvalue were present. Those included Mr Margulies on behalf of Valbonne and Mr Haut on behalf of Cityvalue. In addition Mr Spitzer, the solicitor assisting Valbonne with the arbitration proceedings, attended remotely via video link. That hearing resulted in an oral decision which was not ever put in writing by the Beth Din. I will refer to this for convenience as the Second Award, although as I will explain below the effect of this decision is disputed in various respects. What is not disputed is that the Second Award purported to decide that Valbonne should pay over to the Beth Din the sum of £500,000 by way of completion funds for the purchase of the property, following which Cityvalue was required to provide Valbonne with a TR1 transferring the property to it.
The representatives of Cityvalue failed to disclose to the Beth Din, at the hearing on 19 November 2020, that Cityvalue had in fact already signed a TR1 form on 4 November 2020 transferring, or purporting to transfer, the property to UHL. The Beth Din was only informed of this subsequently, although the date on which it was told that is unclear.
Notwithstanding that signed TR1, on 20 November 2020 the solicitors for Cityvalue wrote to the solicitors for Valbonne saying “My client has informed me that your client must first send the deposit to the Beis Din and he will then honor his obligations”. On 23 November 2020 Valbonne duly deposited the £500,000 completion funds with the Beth Din. No TR1 was, however, forthcoming from Cityvalue; instead there was then an exchange of emails between the respective solicitors for the parties (Mr Spitzer for Valbonne and Mr Grunhut for Cityvalue) as to the conditions under which the completion funds would be released to Cityvalue.
On 29 November 2020, with that point still unresolved, Mr Halpert was told by Dayan Schwarcz that the Beth Din had learned that Cityvalue had purportedly transferred the property to UHL and had signed a TR1 making that transfer. The next day the solicitors for Valbonne requested the urgent return of the completion funds from the Beth Din. Those funds were returned to them on 1 December 2020.
The Beth Din then issued a further written decision on 3 December 2020 which I will refer to as the Third Award. Again, this was issued in Hebrew and was subsequently translated into English. The Third Award recorded that Cityvalue had informed it that a TR1 had been signed in favour of a non-Jewish buyer, and that the Beth Din therefore did not have the power to enforce “anything in this matter”. The Beth Din therefore stated that Valbonne could bring proceedings against both UHL and Cityvalue in the secular courts, but that any claim for damages against Cityvalue had to be pursued in the Beth Din.
The injunction application
On 10 December 2020 Valbonne filed an application notice seeking a without notice injunction against both Cityvalue and UHL, restraining their dealings with the property.
In support of that application, Valbonne relied upon a witness statement from Mr Halpert. He exhibited a number of documents, including a certified translation of the Beth Din arbitration agreement (which had been obtained on 8 December). He did not, however attach a translation of the First Award. Furthermore, while Mr Halpert did say that Valbonne had sought various amendments to the First Award, including a two-month extension of time for completion, Mr Halpert did not disclose the existence of either the Second or the Third Award. Nor did he disclose the fact that he had been told that the property had been sold already to UHL; rather he said that to the best of Valbonne's knowledge the sale of the property to UHL had not yet occurred.
Valbonne was represented at the hearing by junior counsel, Mr Barnaby Hope, whose skeleton argument said among other things that:
i) “… in theory the proposed sale [of the property from Cityvalue to UHL] could take place any time.”
ii) “… it appears that the proposed sale from the First Respondent to the Second Respondent is imminent …”
iii) “The Applicant is unable by way of full and frank disclosure to put before the Court any arguable basis upon which the First Respondent could resist the proposed claim, except … that the Arbitration Agreement was signed by Mr Haut, who was not recognised by Companies House as being a director of the First Respondent at the time.”
iv) “The status quo in this case is that the Property is owned by the First Respondent, not the Applicant or the Second Respondent. The Applicant is unaware of any counter-argument that could be raised by the Respondents in respect of this.”
v) “Mr Halpert has complied with the duty of full and frank...
To continue reading
Request your trial
-
Valbonne Estates Ltd v Cityvalue Estates Ltd
...DIVISION) ON APPEAL FROM THE HIGH COURT OF JUSTICE BUSINESS AND PROPERTY COURT (Chancery Division) The Honourable Mrs Justice Bacon [2021] EWHC 544 (Ch) Royal Courts of Justice Strand, London, WC2A 2LL Lord Justice Lewison Lady Justice Asplin and Sir Timothy Lloyd Case No: A3/2021/0557 Betw......
-
Infrastructure Services Luxembourg S.À.R.L. (formerly Antin Infrastructure Services Luxembourg S.À.R.L.) v Kingdom of Spain
...its contention that the duty subsists past the date of service, Spain cited a recent decision of Bacon J, namely Valbonne Estates Limited v Cityvalue Estates Limited [2021] EWHC 544 (Ch) at [31], who stated that “the duty of full and frank disclosure is not temporally limited to the hearin......
-
WWRT Ltd v Serhiy Tyshchenko
...of the case”: Tugushev v Orlov [2019] EWHC 2013 (Comm) at §7(i), per Carr J. As I recently noted in Valbonne v Cityvalue and UHL [2021] EWHC 544 (Ch), §30, the requirement is to identify arguments which it is reasonably anticipated that the absent party might wish to make, rather than to a......