Meretz Investments NV & Anor v ACP Ltd & Ors, Court of Appeal - Chancery Division, January 30, 2006, [2006] 2 P & CR 23,[2006] 6 EGCS 170,[2007] Ch 197,[2006] EWHC 74,[2006] 3 All ER 1029,[2006] EWHC 74 (Ch),[2007] 2 WLR 403

Reporting Judge: [2006] 2 P & CR 23,[2006] 6 EGCS 170,[2007] Ch 197,[2006] EWHC 74,[2006] 3 All ER 1029,[2006] EWHC 74 (Ch),[2007] 2 WLR 403

President: Meretz Investments NV & Anor v ACP Ltd & Ors

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Extract

Case No: HC04C01072

Neutral Citation Number: [2006] EWHC 74 (Ch)

IN THE HIGH COURT OF JUSTICE

CHANCERY DIVISION

Royal Courts of Justice

Strand, London, WC2A 2LL

Date: 30/01/2006

Before :

MR JUSTICE LEWISON

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Between :

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MR PAUL MORGAN Q.C AND MR PASCAL BATES (instructed by GOLDKORN MATHIAS GENTLE) for the CLAIMANTS

MR TIM DUTTON AND MR CIARAN KELLER (instructed by BERWIN LEIGHTON PAISNER) for the FIRST TO FOURTH DEFENDANTS

MR MICHAEL PRYOR (instructed by BIRCHAM DYSON BELL) for the FIFTH DEFENDANT

Hearing dates: November 28th 29th 30th

December 1st 2nd 5th 6th 7th 8th 9th 12th 13th 14th 15th 16th 19th 20th 21st

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Draft 31 January 2006 10:01 Page 109

Mr Justice Lewison:

Introduction 4

The witnesses 4

Mr Stern 4

Mr Olsson 4

Mr Hawkins 5

Mr Tamimi 5

Initial planning and negotiations 5

Planning 5

FP and the modular system 6

Initial negotiations 6

Expected timescale 7

Funding 7

Meretz 8

The initial agreements 8

The Preliminary Agreement 8

The Introduction Agreement 11

The FP Guarantee 13

The reason for two agreements 14

The lease and the first series of charges 14

The CHAPS declaration of trust 14

The development lease 15

The FP Charge 15

The Meretz Charge 16

The NUBBH Charge 16

Car parking and management 17

NUBBH raise the role of Meretz 18

The Deeds of Priority and alterations to the initial agreements 19

The April 1999 Deed of Priorities 19

The Heads of Terms 20

The sale of the freehold and the overriding lease 21

The May 2001 Deed of Priorities 21

Another funding crisis 22

Enter Mr Tamimi 23

Mr Tamimi 23

The relationship between Mr Tamimi and Mr Ware 23

Mr Stern is informed 23

The contingency plan develops 24

Worsening relations 24

Agreement to sell Penthouse A 24

The beginnings of the contingency plan 25

Mr Tamimi gets involved in financing construction 28

Mr Stern intervenes 32

The context of the Wrap Around Agreement 34

The Wrap Around Agreement 35

Mr Tamimi's perception of the wrap around agreement 35

The immediate run up to the injunction 36

Transfer of mortgage 36

Exercise of power of sale 36

Exercise of Lease-Back Option 38

Mr Tamimi takes an assignment 38

Progress of the development 40

The actual progress of the development 40

Impediments to progress 40

Completion never taking place 41

The previous litigation 42

The debt claim 42

The injunction application 42

The assignment action 44

The forfeiture action 45

Lightman J's judgment 45

The appeal to the Court of Appeal 46

The Issues 48

The transfer of the development lease to Mr Tamimi 49

Issues relating to the Lease-Back Option 49

Benefit of the agreements 49

The economic torts 50

Cause of action estoppel issue estoppel and abuse of process 51

The strike out application 51

The different kinds of estoppel 51

The scope of cause of action estoppel 53

The scope of issue estoppel 54

The scope of Henderson v. Henderson 55

Exceptions to the rules 56

Parties and privies 57

Different capacities 58

Public interest 58

The arguments under attack 59

Cause of action estoppel 60

The debt action 60

The injunction application 61

The assignment and forfeiture actions 61

Issue estoppel 61

The assignment and forfeiture actions 61

Abuse of process 62

The injunction action 62

A rush to court? 62

Exercise of power in bad faith 63

Damages for breach of contract 64

A different date? 64

The assignment action 65

Conclusion 65

The position of the parties and the state of the account in the summer of 2002 66

Who had interests in Albert Court? 66

The state of the account between ACP and Britel 66

The state of the account between ACP and Meretz 67

The state of the account between ACP and FP 67

Breaches of contract by ACP and FP 67

Failure to build on time 67

Failure to grant the lease-back 68

Liability to whom? 68

Mortgagee's equitable duties 68

The general principles 68

To whom are the duties owed? 69

The content of the duty 70

The mortgagee's motives 71

Protection of purchasers 75

The statutory provision 75

Limits to the protection 75

Knowledge of impropriety 76

Did FP have a power of sale to exercise? 78

Why did FP exercise its power of sale? 78

The case for Britel and Meretz 78

Financial pressures 78

Potential loss of security 80

The proof of the pudding 80

Conclusion 80

If FP exercised its power of sale for improper reasons, is Mr Tamimi affected? 80

The nature of the Lease-back Option 81

Security for Site Payments 81

Penalty 81

Void agreement to surrender 82

The effect of the transfer of the NUBBH charge 83

Does section 114 apply to a registered charge? 84

The economic torts: legal framework 85

Introduction 85

The relevant state of mind 86

Imputed intention? 87

Mistaken appreciation of law 87

Conspiracy to injure by unlawful means 89

Unlawful means 90

Interfering with contractual relations 90

Justification 91

Consent and the voluntary assumption of risk 92

Economic torts: application to the facts 92

Know...

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