Albesher v Ryan & Ors, Court of Appeal - Commercial Court, March 15, 2016, [2016] EWHC 541 (Comm)

Issuing Organization:Commercial Court
Actores:Albesher v Ryan & Ors
Resolution Date:March 15, 2016
 
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Case No: CL-2015-00073

Neutral Citation Number: [2016] EWHC 541 (Comm)

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

COMMERCIAL COURT

Royal Courts of Justice

Strand, London, WC2A 2LL

Date: 15/03/2016

Before:

MR JUSTICE WALKER

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Between :

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Ms Alexia Knight (instructed by Goodman Derrick LLP) for the Claimant

Mr Edward Cohen (instructed by Gresham Legal) for the Second Defendant

Hearing date: 16 October 2015

Written submissions were completed on 14 January 2016

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Judgment

Mr Justice Walker:

[Table of Contents]

  1. Introduction

    1. This is an application by the second defendant (``Ryan Corp'') to set aside a default judgment. The issues which arise are whether Ryan Corp's proposed defence has a real prospect of success, and whether it is appropriate to exercise discretion in favour of Ryan Corp.

    2. At the hearing of the application Ms Alexia Knight, instructed by Goodman Derrick LLP (``Goodman Derrick''), appeared for the claimant (``Dr Albesher'') and Mr Edward Cohen, instructed by Gresham Legal in succession to Hierons LLP (``Hierons''), appeared for Ryan Corp. At my request counsel prepared a joint note sent on 14 January 2016 in order to deal with developments in November and December 2015. I am grateful to the legal teams on both sides for the assistance provided to me.

    3. For the reasons given below, I find in favour of Ryan Corp on each of the issues described above. Before turning to examine those issues, I set out in sections B and C below a summary of the claim and the procedural history.

  2. The claim

    B1. The parties and the claim form

    1. Dr Albesher is the Saudi Arabian ambassador to the United Arab Emirates. He was formerly the ambassador of Saudi Arabia to the Kingdom of Morocco. In addition to Ryan Corp, there are two other defendants. The first defendant is Thomas Gerrard Ryan (``Mr Ryan''). He is both the director, and the indirect owner, of Ryan Corp. In circumstances described in section C below, he has now filed a defence denying the claims made against him. The third defendant is Credit Suisse (UK) Limited (``Credit Suisse''). Credit Suisse's liability to Dr Albesher is said to arise by reason of the activities of Mr Hans-Olav Eldring (``Mr Eldring''), who was an employee, and was described as a ``director'', of Credit Suisse. In June 2015 Credit Suisse filed a defence denying liability for the claims made against it.

    2. The claim form gave brief details of the claim. Under this head, substantive claims were listed at paragraphs 1 to 5:

    3. The Claimant entered into an agreement with the First and Second Defendants to purchase Hertsmere House, 2 Hertsmere Road, E14 4AA as a development property. As a result of a fraud perpetrated by the First, Second and Third Defendants, the Claimant has suffered financial loss and seeks the remedies listed in paragraphs 2 to 6 below.

    4. Against the Second Defendant a declaration that it holds the benefit of any rights as it may have including the right to seek to obtain relief from forfeiture of the deposits paid of £20 million upon trust for the Claimant.

    5. Against the First, Second and Third Defendants damages of £25.4 million in deceit and/or unlawful means conspiracy.

    6. Against the Third Defendant an order that it do pay the sum due of £10.4 million.

    7. Against the Third Defendant, in the alternative, damages of £5 million in dishonest assistance of a breach of trust.

    8. The largest claims are those advanced in paragraph 3 against all three defendants, seeking damages of £25.4 million ``in deceit and/or unlawful means conspiracy''. I shall refer to these claims as ``the primary claims''.

      B2. The property

    9. The claim concerns a property known as ``Hertsmere House'' (``the Property''). It benefits from a prime location in the Canary Wharf business district and financial centre.

      B3. The primary claims against Mr Ryan

      B3.1 Primary claims against Mr Ryan: general

    10. The primary claims are for losses totalling £25.4 million. These losses are said to arise as a result of payments made in September and November 2013 by Dr Albesher to Mr Ryan's personal account with Credit Suisse. There was a further payment of £12 million in January 2014, but this was frozen by Credit Suisse and was returned to Dr Albesher.

    11. The primary claims are put in two ways. The first primary claim is advanced in deceit, as discussed in section B3.2 below. The second is for unlawful means conspiracy, as described in section B3.3 below.

      B3.2 Primary claim against Mr Ryan for deceit

    12. As against Mr Ryan, Dr Albesher's claim in deceit was put in this way in the particulars of claim:

      i) Dr Albesher became interested in purchasing the Property together with Mr Ryan, for the purpose of developing it, on the basis of an equal investment by each and an equal sharing of the profits from the development. The acquisition of the Property was to be structured through a company, the shares of which would be held either directly, or indirectly, through another corporation, equally between Dr Albesher and Mr Ryan. (Particulars of claim, paragraph 8)

      ii) Between 11 and 13 September 2013 Mr Ryan met Dr Albesher in Casablanca, and stated:

      a) that Dr Albesher would have to pay £15 million to Mr Ryan's account with Credit Suisse;

      b) that Mr Ryan would deposit the same amount of money, namely £15 million, into that account; and

      c) that it was very urgent for the money to be paid to his bank by Dr Albesher as a down payment on the purchase of the Property.

      (Paragraph 21 of the particulars of claim, with lettered sub-paragraphs added for convenience).

      iii) Mr Ryan's assertion that he would deposit the sum of £15 million into that account was:

      a) an express representation of an actual intention to make that deposit; and

      b) an implied representation that he had the money immediately available or if not the means to raise the sum of £15 million in order to do so.

      (This combined representation, which I have split into lettered sub-paragraphs for convenience, is described in paragraph 22 of the particulars of claim as ``Mr Ryan's £15 Million Representation'').

      iv) Dr Albesher relied upon this representation in the sense that this confirmed his belief that Mr Ryan was in a position to purchase and develop the Property in partnership with himself and that he should continue with his intention to invest. (Particulars of claim, paragraph 22).

      v) ``Between 22 and 23 September 2013'' Mr Ryan visited Dr Albesher again in Casablanca, and told him that if he did not immediately make the payment of £15 million then the Property would go to another buyer from China. (Particulars of claim, paragraph 29).

      vi) On 22 September 2013 Mr Ryan signed and emailed to Dr Albesher a letter on Ryan Corp notepaper addressed to Dr Albesher in which he said:

      I refer to our joint purchase of [the Property]. I further refer to the position that as soon as I receive the £15,000,000.00 from you these funds will be used to buy the site which I will secure tomorrow in a 50/50 agreement for Dr Al-Besher and Thomas Ryan. This arrangement is a 50/50 agreement as agreed and discussed at our meeting today Sunday September 22nd at your residence.

      (Particulars of claim, paragraphs 29 and 30)

      vii) On 23 September 2013, induced by and in reliance upon Mr Ryan's £15 Million Representation along with representations by Credit Suisse, Dr Albesher paid sums totalling £15 million to Mr Ryan's personal account with Credit Suisse. (Particulars of claim, paragraph 38).

      viii) On 25 September 2013 Ryan Corp exchanged contracts to purchase the Property for a purchase price of £100 million. Ryan Corp paid a deposit of £10 million to the vendor, and the completion date was 29 October 2013. (Particulars of claim, paragraph 39).

      ix) On 30 September 2013 Dr Albesher, Mr Ryan and Mr Eldring met Mr Frederic Olofsson at Mr Olofsson's office in Geneva for the purpose of establishing a Swiss special purpose company, Land & Securities SA. It was proposed by Mr Ryan that shares in Land & Securities SA would be held equally between Dr Albesher and Mr Ryan. Land & Securities SA would in turn own the shares in Ryan Corp, which would own the Property after completion. (Particulars of claim, paragraph 39).

      x) Ryan Corp was unable to complete the purchase of the Property by the agreed date of 29 October 2013 because it did not have the funds available. The vendor served a notice to complete on that date. It is to be inferred that Mr Ryan was unable to obtain finance for the remaining sum of £90 million whether from Credit Suisse or any other party. (Particulars of claim, paragraph 43).

      xi) On or about 7 November 2013 Mr Ryan represented to Dr Albesher that he required a loan of a further £10.4 million from Dr Albesher, for the specific purpose of extending the contract for the purchase of the Property. (Particulars of claim, paragraph 43).

      xii) On 14 November 2013, induced by and in reliance upon certain guarantees allegedly given by Credit Suisse, Dr Albesher transferred the sum of £10.4 million to Mr Ryan's account with Credit Suisse. (Particulars of claim, paragraph 49).

      xiii) On 15 November 2013 Ryan Corp entered into a supplemental agreement with the vendor, pursuant to which the completion date was extended to 23 December 2013. Also on 15 November 2013 Ryan Corp paid a further sum of £10 million to the vendor, as well as an ``interest payment'' in the sum of £405,479.51. (Particulars of claim, paragraph 50).

      xiv) Ryan Corp was unable to complete the purchase of the Property by 3 December 2013 or at all. Again its inability to do so was due to its and Mr Ryan's failure to obtain finance. (Particulars of claim, paragraph 52).

      xv) Accordingly a deposit of £20 million and interest of £405,479.51 has been paid to the vendor and has been lost. (Particulars of claim, paragraph 53).

      xvi) ``In the premises'' Dr Albesher has paid sums totalling £25.4 million into Mr Ryan's personal account...

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