THE HONOURABLE MR JUSTICE PETER SMITH Approved Judgment | NGM v Wallis |
Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL
Before:
THE HONOURABLE MR JUSTICE PETER SMITH
Between:
NGM Sustainable Developments Ltd | Claimant |
- and - | |
(1) Phillip Wallis (2) Lizzano Ltd (3) Cascina Ltd (4) Kevin Reardon (5) Hydro Properties Ltd (6) Hydro Property Holdings Ltd | Defendants |
Mr Collings QC (instructed by Collins Solicitors) for the Claimant
Mr Casey QC (via Direct Access) for the First Defendant
Mr Davenport QC and Mr Poole (instructed by Pinsent Masons LLP) for Second to Sixth Defendants
Hearing dates: 11-13, 16-20, 23-25, 30-31 March 2015, 1, 14-16, 20 & 27 April 2015
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 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 HONOURABLE MR JUSTICE PETER SMITH
Peter Smith J:
INTRODUCTION
This judgment arises out of the trial of this action on liability and quantum.
The claim brought by the Claimant (“NGM”) is based on an allegation that it was induced to enter into a series of documents on 15th January 2010 (“the Security Documents”) on the basis of fraudulent misrepresentations made by the Defendants to induce its signature thereto. In this judgment when I refer to NGM and its complaints I am doing so on the basis that it is controlled by Mr Kerry Martin (“KM”) and Mr Espen Ostbye-Strom (“EOS”) and the complaints arise from them as Directors.
NGM seeks rescission and damages in respect of the obligations it entered into but not rescission of all the documents.
The purpose of the documentation was to enable a sum of £165,000 to be advanced by Lizzano Ltd (“Lizzano”) (the Second Defendant) to enable Filterbed Developments Surbiton Ltd (“Filterbed”) a wholly owned subsidiary of NGM to acquire the property (“Surbiton”) situated in Surbiton described as a 13 acre freehold site to the northwest side of Portsmouth Road Surbiton Surrey KT6 (HMLR Title No TGL139392). Filterbed was founded for that purpose.
The sum of £165,000 was a deposit which was required to be put down in order to enter into an agreement to acquire Surbiton from Kennet Properties Ltd (a subsidiary of Thames Water). It was incorporated on 29th December 2009 as an SPV with company number 07113582. Subsequently it was struck off on 18th June 2013 pursuant to s100 Companies Act 2006.
Filterbed entered into an agreement (“the Agreement”) to acquire Surbiton for £1.65m. Under the loan documents the £165,000 was the 10% deposit. KM a director of Filterbed (also a director of NGM) signed the Agreement in escrow on behalf of Filterbed on 7th January 2010. Contracts were exchanged on 15th January 2010 after the loan documentation was put in place. A significant feature of this case is the fact that NGM had no money even to provide the deposit. The whole basis of the arrangements was that the Defendants (through Lizzano) were to provide the whole of the consideration to acquire the Surbiton site.
Completion of the Agreement was 5th February 2010. Filterbed had no funds to complete the purchase.
A Dramatis Personae and a chronology are attached.
SHORT SUMMARY OF NGM’S CASE
NGM’s case in summary is that it was induced to enter into various documents by fraudulent representations. Those fraudulent representations derive from a side letter (“the Side Letter”) provided to NGM and Filterbed on exchange by the First Defendant. As the Side Letter looms large in this case I have annexed a copy to this judgment as appendix 3.
Neither NGM nor its subsidiary Filterbed had any money. The deposit monies were provided to enable Filterbed to exchange contracts. NGM’s case is that the loan documentation entered into on 15th January 2010 which provided the deposit was intended to be a temporary loan facility to be replaced by a long term arrangement to be negotiated between the parties. Such negotiations of course would have to be completed before 5th February 2010 because the agreement was for completion on that date. It would have been possible to delay matters for a short period of time which would be a breach of contract but not a breach of contract that could lead to immediate rescission for failure to complete. Under clause 8.8.2 of the Standard Commercial Property Conditions (Second Edition), which applied to the agreement upon service of a completion notice by the vendor the buyer becomes under an obligation to complete within 10 days of the giving of that notice (time to be of the essence). Therefore a short breathing space can be obtained at the price of compensating at the rate of interest under the Agreement.
It follows therefore that the negotiations that would necessarily have to take place between the parties from 15th January to 2nd February were vital.
As will be seen by the security documentation the loan for the deposit was provided to be repayable on demand. The obligation to repay was protected primarily by security as a debenture given by Filterbed to Lizzano charging all its present and future assets as security for payment or discharge of the Secured Liabilities (all present and future monies, obligations and other liabilities owed by it to Lizzano whether actual or contingent). The only asset was Filterbed’s interest under the Agreement but that was not worth anything at all really because of its obligation to find the balance of the purchase price (90% of £1.65m) when it had no funds to complete the purchase.
NGM gave Lizzano a debenture on the same day in the same form except that it extended to a Patent Application (no PCT/GB1009/0050498) (“the Patent”) and all of its present and future intellectual property rights in any patent including the Patent. It also extended to security for the Secured Liabilities (with the same definition).
The Patent was an application relating to floating buildings including a buoyant basement structure or platform for a floating building and the method of constructing such a structure. Its purpose therefore was to enable builders to build on sites which were waterlogged or even underwater. Using this method valuable land which otherwise could not be developed became available for development. The Patent itself was only an application and therefore was not particularly valuable either.
In addition the controllers and major beneficial owners of NGM KM and EOS entered into personal guarantees in favour of Lizzano guaranteeing all liabilities Filterbed had to Lizzano. NGM entered into a guarantee guaranteeing all of the obligations of Filterbed to Lizzano. It entered into a guarantee guaranteeing all obligations due from NGM to Lizzano.
Separately NGM guaranteed to Lizzano the repayment of the £165,000 advanced by it to Filterbed.
Accordingly Lizzano had charges over everything in so far as they had a value.
ARRANGEMENTS AS REGARDS TO THE PATENT
Crucially on the same day NGM granted Lizzano a non exclusive perpetual irrevocable sub licensable freely transferable loyalty free license of all the Intellectual Property Rights relating to the License Technology including the Patents to manufacture and install or have manufactured and installed and sell or otherwise supply the License Technology in the United Kingdom. KM and EOS covenanted to do all acts necessary to procure that NGM complied with its obligations.
Although it does not say so it seems to me that the License can only have been a security and could not be maintained in the event that the indebtedness was repaid. However there was no argument over that effect before me.
The significance of the Loan Agreement, the Security Documentation and the License is that NGM was put in a very vulnerable position. The Interim Loan was repayable on demand. If a demand was made before completion Filterbed would not be able to repay it. That could then enable the demands to be made under the Debentures and Guarantees. There then remained the question of completion of the Agreement which Filterbed could not complete. Lizzano would have to complete the purchase to preserve the security which would cost the balance of the purchase price. Thus it would have to spend £1,485,000 to preserve the £165,000 laid out on the deposit.
In the event that is precisely what happened. The parties were unable to agree further loan documentation to address the purchase price to acquire Surbiton. Lizzano made a demand on all the parties for the £165,000 which was not repaid. It exercised its powers under the Debenture to take control of Filterbed. In its capacity of having a Debenture over NGM Lizzano caused Filterbed to issue shares to it thereby giving it control of the board. Once it had control it caused Filterbed to enter into new arrangements with Lizzano to borrow the balance of the purchase price. Lizzano had taken control of Filterbed’s board by the issue of the shares and the utilisation of those shares to appoint its nominees to the board. Although neither KM nor EOS resigned as requested they would have been out voted had they attended the board meeting on 12th February 2010. In fact they did not attend. That increased all liabilities of NGM under its guarantee and KM and EOS because Filterbed’s indebtedness was significantly increased.
Subsequently on 12th May 2010 Filterbed transferred Surbiton to Cascina Ltd (“the Third Defendant”) for £1.175m which was below the price paid for it 4 months earlier (£1.65m). NGM asserted in the proceedings that was a transfer at an undervalue and therefore challengeable under section 423 of the Insolvency Act 1986. That case was abandoned by Mr Collings QC who appears for NGM in his closing.
The final completion of the story was the acquisition of the Patent. This was achieved appointing a Mr Hoffman on 7th June 2010 as Fixed Charge Receiver of the assets of NGM. The purpose of this exercise was to obtain the Patent. That was done by the Receiver holding an auction. The only bidder for the Patent was Lizzano in the sum of £20,000. Its bid was accepted on 15th July 2010.
THE RESULT
The result of all of those activities meant that NGM lost the Patent, and lost its opportunity (if it had one) to acquire Surbiton and develop it. This was achieved because Filterbed entered into the Interim Loan Agreement to borrow the deposit when it and NGM never had the funds to repay it and when they had no arrangements in place to fund the purchase. The ensuing default caused the collapse and the loss of the assets before completion.
NGM’S COMPLAINTS
The complaint in this action is that NFM was induced to enter into arrangements (and lost everything as a result) because the Defendants made a fraudulent representation that they genuinely intended to enter into long term financial arrangements for the acquisition of Surbiton and also for the redevelopment of Surbiton and other sites (“the wider picture”) in the event that the exercise was successful the expansion of NGM. Its case is that the Defendants never had a genuine intention to enter into such arrangements and the whole scheme was a deception designed to snare NGM into entering into those arrangements so that the Defendants could acquire the Patent and take over the Surbiton site by withdrawing the deposit monies knowing that they could not be repaid.
Mr Collings QC accepts that in order to succeed NGM must show that dishonest intent as a present intent at the time that the Loan Agreements were entered into. He accepts that if the Defendants decided to carry that scheme out after the loan documentation that is not actionable.
In the Amended Particulars of Claim there is also a claim for conspiracy. Mr Collings QC abandoned that claim during the course of the trial. Mr Collings QC made no reference to the section 423 Insolvency Act 1986 claim in his written submissions not having put it in any of his cross examination either. On being pressed by me (T20/39) he agreed to have that claim dismissed.
As regards the fraudulent misrepresentation Mr Collings QC abandoned half of them during the course of his closing (see below). He maintained a claim for rescission of the NGM Debenture, the NGM Guarantee, the NGM Stock Transfer Form and the Patent Licence. He also seeks an order setting aside the assignment of the Patent and retransferring the ownership back to NGM. Whether as a matter of law even if the claim is established such relief can be granted is a matter for debate between the parties.
THE MISREPRESENTATION DETAIL
The live representation is as follows:-
“64 By reason of the matters set out above, the following representations (“the representations”) were made by Mr Wallis either expressly or impliedly to NGM acting by Mr Ostbye-Strom and KM
1) [abandoned]
2) In the course of the meeting on 15th January 2020, that:
(i)The Loan and Security Documents were only needed to prevent NGM/Filterbed from completing the purchase with another funder.
(ii)The Licence was only an interim Licence not a perpetual irrevocable licence.
(iii) Mr Wallis was honourable and could be trusted to stick to the deal that had been agreed and was evidenced by the Heads of Terms.
(iv)Lizzano intended to enter into a long term funding agreement in line with the letters of 11th January 2010 and the Side Letter.
(v) Lizzano would comply with the terms of the Side Letter in order to further the joint venture with NGM.
(vi) The Loan and Security Documents would immediately or shortly be superseded by long term funding arrangements in order to further the joint venture with NGM.
(vii) Lizzano fully intended to fund completion of the Surbiton Site by Filterbed on 5th February 2010 in order to further the joint venture with NGM.
(viii) Lizzano had no intention of making demand under the First Loan Agreement or of enforcing any of the Securities unless NGM sought to complete the purchase with another funder, thereby ousting Mr Wallis and those associated with them.”
FALSITY OF MISREPRESENTATIONS
The alleged falsity of the representations are set out in paragraph 98 of the Amended Particulars of Claim as follows:-
“98 The Representations were false and dishonest in that at the time they were made and up to and including 15th January 2010:
(1) Mr Wallis and/or Mr Reardon knew and/or Lizzano (after its incorporation) knew that neither Lizzano nor any other GHP/IoM Group company would in fact be entering into any long-term funding arrangements with NGM/Filterbed, either in accordance with the terms of the Side Letter or otherwise.
(2) Mr Wallis and/or Mr Reardon and/or Lizzano (after its incorporation) had no intention that Lizzano or any other GHP/IoM Group company should enter into any long term funding arrangements with NGM/Filterbed, either in accordance with the terms of the Side Letter or otherwise.
(3) Mr Wallis and/or Mr Reardon and/or Lizzano knew that the true purpose of the Loan and Security Agreements was to enable Mr Wallis and/or Mr Reardon and/or Lizzano alternatively, Mr Wallis and Lizzano to acquire and/or enjoy the benefit of the Site and the Patent free of any obligation to NGM.
(4) Mr Wallis and Lizzano could not be trusted to stick to the deal that had been agreed and evidenced by the Heads of Terms.
(5) Mr Wallis and/or Mr Reardon and/or Lizzano had no intention of funding NGM directly or indirectly to purchase and develop the Site.
(6) Mr Wallis and/or Mr Reardon and/or Lizzano knew that Lizzano would not comply with the terms of the Side Letter and did not intend that it should do so.
(7) Mr Wallis and/or Mr Reardon and/or Lizzano knew that Lizzano would shortly be making demand for repayment under the First Loan Agreement.
98A. The falsity of the Representations and of the dishonest intentions of their makers is to be inferred from the events which took place after 15th January 2010 as pleaded at paragraphs 68-95 and the fact that there was no genuine or credible reason for:
(1) The failure of Lizzano to provide NGM with the promised further funding agreements after the meeting of 15th January 2010.
(2) The refusal, without explanation, of Mr Wallis and/or Mr Reardon to arrange for the payment of £60,000 to NGM for working capital that had been previously promised in the letter of 17th December 2009.
(3) The failure to finance NGM on the purchase and development of the Site as represented in the offers to purchase the Site and in the “To Whom It May Concern” letter
(4) Lizzano suddenly to withdraw from the terms that had previously been set out in the Heads of Terms discussed on 11 January 2010 and given to NGM on 15 January 2010;
(5) Lizzano to enforce repayment of the Loan and enforce the Security Documents less than three weeks after they had been executed or at all, thereby stripping NGM of all its assets in a few short weeks.
98B It is therefore to be inferred that:
(1) As at 28th October 2009 (and thereafter up to and including 15th January 2010) Mr Wallis and Mr Reardon had no intention that NGM would be provided with funding to purchase the Site; and
(2) As from 17 December 2009 (up to and including 15th January 2010), Mr Wallis and/or Mr Reardon and/or Lizzano in fact had no intention that Lizzano would fund the purchase of the Site with NGM, or that Lizzano would enter into a joint venture with NGM to exploit the Site to the mutual benefit of NGM and Lizzano.”
The allegation that the Defendants had no intention of completing from 28th October 2009 was abandoned and Mr Collings QC fastened on an unspecified date in January 2010 shortly before the Loan Agreement was entered into.
The abandonment of paragraph 64 (1) in my view is significant. If one looks at them:-
(1) In the course of the discussions and negotiations leading up to 15th January 2010, that:
(i) Mr Wallis and Mr Reardon and/ or a company or companies associated with them, alternatively, Mr Wallis and/ or a company or companies associated with him or them or Mr Reardon would provide long-term finance to NGM (whether directly or indirectly) to purchase and develop the Surbiton Site with the benefit of the Patent.
(ii) Mr Wallis and Mr Reardon and/ or a company or companies associated with them, alternatively, Mr Wallis and/ or a company or companies associated with him would enter into a joint venture with NGM to finance the purchase of the Surbiton Site and then exploit it to the mutual benefit of NGM and Mr Wallis and Mr Reardon and/or a company or companies associated with them, alternatively, Mr Wallis and/ or a company or companies associated with him.
(iii) Mr Wallis and Mr Reardon and/ or a company or companies associated with them, alternatively, Mr Wallis and/or a company or companies associated with him would provide long-term funding to or for the benefit of NGM in order to facilitate the purchase of the Surbiton Site for the purpose of furthering the joint venture between NGM and Mr Wallis and Mr Reardon and/or a company or companies associated with them, alternatively, Mr Wallis and/ or a company or companies associated with him.”
All of those statements look to future intention. That is addressed by NGM’s contention in paragraph 98 because it is asserted that there was never any present or future intention to provide the long term financing.
In paragraph 2.5 of his closing Mr Collings QC said that there were 3 representations of existing intention made on 15th January 2010 namely:-
The interim funding will be replaced by long term funding arrangements in accordance with the terms of the Side Letter.
That such arrangements would include a Patent licence not wider than necessary to develop the Surbiton Site.
That such arrangements would not include PGs.
Finally he said there was no reference to any participation by way of requiring a shareholding in NGM or even in NGM’s SPV Filterbed.
The latter point is completely irrelevant. I do not see the Side Letter as being a check list for what can or cannot be included in the ultimate documentation. The letter is plainly not in sufficient detail. I do not think the letter was intended to be anything other than a statement of intention of what in broad terms was to be found in the final documentation.
Further it is not open to NGM to raise items (ii) and (iii) because its case has always been that the Defendants never had any intention to enter into final arrangements at all.
Equally it is correct in my view that the Defendants would not have entered into any arrangements with NGM without equity participation on their part. The deal would not be attractive to them if it was simply advancing money as a loan which would be repaid. The Defendants wanted to participate in the venture if it was profitable. I do not see however that the Side Letter is a representation that there would be no attempt to participate in the equity of NGM by silence or by implication. The fact that the Defendants would want some form of equity participation cannot be a surprise to the NGM. Certainly Mr Potton (“GP”) (a surveyor who was acting for NGM at the time and gave evidence for it at the trial) understood that this was a likelihood and in discussions with other potential funders prior to meeting the Defendants it is quite clear that KM was willing to give up some equity perhaps almost as much as 49%. The strategy is set out fully in Mr Phillip Wallis’ (“PW”) letter to the Directors of Lizzano dated 14th January 2010 but actually sent on 19th January 2010.
That letter sets out fully PW’s thoughts about the venture from the Defendants’ commercial point of view and re-emphasises the need for control, the need for conditional rights for use of the Patent, the need to have appropriate step in rights and some kind of equity and first refusal about future business. All of this was to be enforced through personal guarantees to give direct benefit from any value created for NGM or their shareholder or directors.
The reason put forward for this was that the Defendants were giving them an opportunity in a difficult market to launch their product.
The strength of the securities was emphasised in an email on 15th January 2010 from Mr Nick Davies (“ND”) (Head of Corporate at Mishcon de Reya (“MdR”) to PW summarising the documentation to be prepared and commenting “the individuals are going to be particularly unhappy with the personal guarantees themselves and NGM will not be happy with the grant of a perpetual license to Lizzano.”
It is well known that an actionable representation is required to be a representation of present fact. It is equally well established that all statements (unless action in respect of them is excluded under the ensuing contract) made in antecedent negotiations are regarded as representations see Howard Marine and Dredging Co Ltd v A Ogden & Sons [1978] QB 574 (C.A.).
Equally it can be the case that a statement of intention to the future may carry the implication that the party does not know facts that would make it impossible to carry out the intention. Further future performance can in certain circumstances depending on what happened at the time the representations were made amount to a present factual statement see for example Esso Petroleum Co Ltd v Mardon [1976] QB 801.
It has always been difficult in my opinion to look at the Pleadings and to assert that they are misrepresentations of present fact. The major debate during the trial and closing was actually around paragraph 64 (1) of the Amended Particulars of Claim until Mr Collings QC abandoned it during his closing. It is hardly surprising in my view because they are so clearly demonstrative of promises to the future rather than present representations as to fact.
The claim centred almost entirely around the Side Letter.
The difficulty about the Side Letter from NGM’s point of view is that it is not contractual. The document is marked “subject to contract”. It is extremely general and as a contractual document (if it were one) would fail as being nothing more than an agreement to agree. Parties have tried to circumvent similar documents before see for example Pallant v Morgan Equity [1953] Ch 43, Banner Homes Plc v Luff Developments [2000] Ch 382 and London and Regional Investments Ltd v TBI Ltd [2002] EWCA Civ 335 where the attempt to impose the equity was in respect of a document which was marked subject to contract.
DISCUSSION OF THE SIDE LETTER
The document to my mind does not set out anything other than a broad general picture and matters that have to be discussed in the future. It starts with the agreement that the Loan that was put in place on 15th January 2010 was a general Interim Loan until completion when it is intended a further agreement which related more specifically to the Surbiton land will be put in place. It states that it is separate from the Loan Agreement but “is given as a recorded intention between the parties, but is not a legal document and is therefore subject to completion of all loan documentation referred to above”. There is then a profit share arrangement set out for development of Surbiton. When one looks at the Side Letter it is difficult to see a more circumspect and provisional document. I have already set out that it was marked “subject to contract”. It acknowledges that a general interim loan document will be put in place until completion at which time it is intended to execute a further agreement which will relate more specifically to the subject transaction Surbiton. It reiterates it is not a legal document but deals with net profits and the share of profits on disposal of a number of parts of the Property. The terms of the Side Letter were addressed further in exchange between PW and KM on 11th January 2010 concerning the thirteen external moorings to fall back on. PW reiterated that the proposals were on the basis that those thirteen external moorings were available as a residual scheme which had an excellent chance of success.
What is clear from the Side Letter is that nothing is clear. It must be appreciated (see below) that the Claimant had no funds to complete the Surbiton acquisition. Equally it had no funds to develop that site once acquired and sell it. The distribution of the profits is set out. Nothing is said about shareholding. Nothing is said either as to the “Big Picture”. That was meant to cover the expansion of the method to other sites. Surbiton was to be the first trial with the hope that if it proved to be successful that would then create greater opportunities through the country. Nothing at all is said about the terms of any future arrangement. It is all for negotiation.
The question of the lack of shareholder interest was raised when the Defendants were cross examined. This led to legitimate concerns that a different case was being put to them.
DIFFERENT CASE
I have set out above the surviving complaint against the Defendants. It could not be more clear. The pleaded case is that set out in 64 (2) of the Amended Particulars of Claim. The allegation of falsity in paragraph 98 is that the Defendants never had any intention of entering into a long term funding arrangements whether in accordance with the Side Letter or otherwise. Thus the complaint is that the Side Letter was a charade. It is not a complaint that things were missed out with the Side Letter (such as a desire on the part of the Defendants to obtain a shareholding in the Claimant whether a majority or otherwise). The claim stands or falls on establishing that in effect the Defendants were not going to enter into any arrangements at all and that the purpose of trapping the Claimant into the loan interim loan arrangements was to obtain in particular the Patent and also Surbiton.
NEED FOR ACCURACY IN FRAUD CASES
It is a fundamental tenet of the adversarial procedure in these courts that a case is put against the opposing party. It is only fair for a person against whom allegations are made to have that put to them while giving evidence in the box and to have an opportunity to deal with those in the box in front of the trial Judge. Equally it is a vital tool in the Judge’s exercise of assessing the credibility of witnesses for him to see witnesses confronted with the case against them to see how they react or deal with it. Of course all experienced Judges are well aware of the potentially oppressive nature of cross examination and are alert to ensure that it does not become oppressive and are alert to ensure witnesses fully understand the questions that are being put. For example in a number of instances in this case Counsel put (whether deliberately or not I do not know) questions which comprised two questions. The witness generally hears the latter of the questions and answers that and then it is not clear what his response would be to the earlier part of the rolled up question. A trial Judge should always be alert to ensure that errors do not creep in as such errors will not be identified on reading the transcript.
Equally witnesses regularly say “yes” when they mean “no”. They regularly say “ok” when they are not agreeing the question but acknowledging they understand the question.
I always remind Counsel at the start of any long trial where issues of fact are hotly contested that it is essential that their case is put to the opposing side where necessary in cross examination. I always indicate that a failure to put that case will disentitle them from making submissions criticising witnesses when the criticism was not put to them when they were available for cross examination see for example Sharab v HRH Prince Al-Waleed [2013] EWHC 2324 (Ch).
This is the nature of the adversarial process in these courts. In that context especially in the context of fraud it is essential that the Claimant is tied to the pleaded case: see the observations of Lewison LJ in the Court of Appeal in Lowe v Machell [2012] 1 All ER (Comm) 153 at [74]. This is the more so where a case is based on fraud bearing in mind the observations of Lord Nicholls in Re: H (sexual abuse, standard of proof) [1996] AC 563 at 586:-
“The more serious the allegation the less likely it is the event occurred and hence the stronger should be the evidence before the court concludes that the allegation is established on the balance of probability. Fraud is less likely than negligence……”
Ungoed-Thomas expressed this neatly in Re: Dellow’s Will Trusts [1964] 1 WLR 451, 455:-
“The more serious the allegation the more cogent is the evidence required to overcome the unlikelihood of what is alleged and thus to prove it.”
Further I accept the principle that if explanations are put forward by the Defendants a finding of liability involves rejecting those explanations as being inherently improbable see Grupo Torras SA v Al-Sabah (no5) [1999] EWHC 300 (Comm), [1999] CLC 1469 at 1541 (affirmed) CA [2001] Lloyds Reports Bank 36; Attorney General of Zambia v Meer Care & Desai [2007] EWHC 952 (Ch) [90-91].
It follows from that that the Claimant is tied to its pleaded case namely that the Defendants made fraudulent representations to induce them to enter into the Loan Agreement and that those fraudulent representations are those as pleaded in the Amended Particulars of Claim and involve an allegation that the Defendants set out the Side Letter never intending to enter into any negotiations whatsoever.
Mr Collings QC who appears for the Claimants regularly strayed from that golden mean. The Defendants in their closing set out several examples.
Most of these circled around Mr Collings QC trying to establish that the Defendants in their discussions with the Claimants before the Loan Agreement and the Side Letter held back their desire to obtain shares in and possibly control of the Claimant.
The purpose behind this strategy seems to me to attempt to exploit the fact that the Side Letter made no mention of a desire to acquire shares. However the fundamental difficulty facing Mr Collings QC is that the plea he is seeking to establish by this cross examination is not the one that is in the Amended Particulars of Claim. The Claimant’s case is not that the Side Letter did not fully set out what was to be discussed with the result that the shareholding was sprung upon the Claimants (it is said) without warning and when it was not in a position to do anything because it was already committed by the Loan Agreement.
In my view that allegation is not open to the Claimant on the pleading. I corrected Mr Collings QC during his cross examination (see for example T12/200/2-9) (when cross examining Mr Wallis). And the same when cross examining Mr Kevin Reardon (“KR”) (the Fourth Defendant) (T15/101/25-103/22):-
“Q. What the side letter doesn't say is it doesn't say to change from an interim loan on Surbiton to a permanent
loan on Surbiton, plus a share of the equity?
A. Okay. Look, I --
Q. And that is the complaint that's being made?
A. Okay.
Q. Because it only tells part of the story?
A. Right. I --
Q. And it deliberately only tells part of the story,
because NGM, through its directors, would not have
signed up to the interim loan if they had been told the
whole story?
A. All right.
Q. That's the point.
A. Okay.
Q. Now --
A. Can I answer, Mr Collings?
Q. Yes.
A. Thank you. That's the fraud, is it?
Q. It is.
A. Okay.
MR JUSTICE PETER SMITH: It isn't.
MR DAVENPORT: No.
MR JUSTICE PETER SMITH: That's not the pleaded fraud. The
pleaded fraud is that they deliberately pretended they
were going to put money into the long-term scheme and never intended to do so. It's the complete opposite to
what you have just put to him.
MR COLLINGS: Well, I don't agree with that at all.
MR DAVENPORT: My Lord, could I ask -- it sounds unusual.
Could I ask your Lordship to put, before my learned
friend, Mr Collings, the case to the witness, so we just
can do this cleanly and quickly?
MR JUSTICE PETER SMITH: No, it's not my job. I don't get
paid for that.
MR DAVENPORT: I know it's not your job, my Lord.
MR JUSTICE PETER SMITH: It's not in my job description.
MR DAVENPORT: This could be done in two sentences. I have
given my learned friend a note --
MR JUSTICE PETER SMITH: I thought we did that, when we had
your note.
MR DAVENPORT: Yes, it sets it out.
MR JUSTICE PETER SMITH: The plea is in paragraph 98 and it
is not what you have just put to him.
MR DAVENPORT: I have highlighted it, maybe my learned
friend could just read it out to him. I would do it for
him, but that would look a bit illogical.”
The note referred to by Mr Davenport QC in that exchange was a note provided by all Defendants jointly complaining about Mr Collings QC’s attempt to suggest that there was an intention to provide the long term funding but only if the Claimant agreed to an equity stake in NGM and that that latter point was deliberately concealed from the Claimant.
I agree with their analysis. It is not open to the Claimant on the Pleadings. Even if it were it would be impossible to plead a fraud allegation based on a supposed holding back of terms which they wished to impose. If such an activity in pre-contract negotiations was capable of being challenged after the event when the negotiations are not successful as being fraudulent it would make negotiations unworkable in my view. In the present case the Side Letter says nothing at all about what is in the future as regards terms.
KM ultimately accepted this proposition during his evidence:-
“MR JUSTICE PETER SMITH: You accept that there would be
discussions between you and the defendants about that new final loan.
A. (Witness nods)
MR JUSTICE PETER SMITH: Your case, remember, is that they were not -- not that they were obliged to give it to
you, but that they never intended to do it, and that it
was just a sham. That's your case. You understand
that, don't you?
A. Yeah.
MR JUSTICE PETER SMITH: It follows, therefore, that if the
position was that they introduced the wider picture as
a requirement for them to enter into the final Surbiton
loan, there is nothing wrong with that as long as it is
a genuine introduction by them as part of the ongoing
relationship, is there? They are perfectly entitled to
see what you can negotiate.
A. You know, I believe that the negotiations for the
Surbiton site are agreed at the 15th.
MR JUSTICE PETER SMITH: Fine, yes, they can't all be agreed
because you haven't got anything which addresses the
purchase price which has to be paid.
A. The long-term loan agreement is going to have the coupon
and have a period of time.
MR JUSTICE PETER SMITH: What is it that stops them saying
to you, "I am afraid we want more. We also want a piece
of your company, a large piece"? What is to stop them
doing that in the meetings?
A. They do it.
MR JUSTICE PETER SMITH: I know they do it, but is that wrong?
A. Yes, I believe so.
MR JUSTICE PETER SMITH: Wrong in what way?
A. Because they never make any indication of that case
before we enter into the 15th documents.
MR JUSTICE PETER SMITH: So what? You knew that there were
going to be negotiations of the new terms. Your case --
A. Of the loan and the profit share.
MR JUSTICE PETER SMITH: The loan and the profit share, but
what's to stop them introducing that new factor? You
can't say "Hey boys", because you knew that there was
going to be a complete negotiation of the terms on which
they are prepared to put the 1.65 in.
A. They introduce wider terms which --
MR JUSTICE PETER SMITH: Yes, let's assume you are right.
Let's assume that you are right and that it was sprung
on you as you say. That itself you don't complain about
in your case. Your case is not that they sprung terms
on you and those terms were unfair and you were forced
to sign up. That's not your case. Your case is that
yes, they sprung terms on you but this was part of
a strategy in that they never intended genuinely to
negotiate with you, and were motivated to pretend that
they were going along with you solely for the purpose of
taking your asset off you. That's your case.
A. Okay.
MR JUSTICE PETER SMITH: If that is not the case, if you
fail to establish the intention, ignore their intention,
there is absolutely nothing wrong of itself with them
simply saying, "Well, I'm sorry, KM, it's a good
idea and it's such a good idea we want a share of the
profits". There is nothing wrong with that, is there?
You can't stop them saying that.
A. No.
MR JUSTICE PETER SMITH: You can't then stop them saying
"Unless you are willing to give us a bigger picture, we
aren't going to give you the loan to buy. It's hard,
you are in a very hard position, I fully appreciate
that, but I'm afraid if you read my decision in
Rosserlane, you will see what I think about people who
negotiate hard, it's a hard time, as you yourself say to
Mr Topping, "There are going to be hard negotiations and
it's very interesting times", echoing of course what
Donald Sutherland said in a film about takeovers --
A. I think interesting times because it's a pilot scheme
actually --
MR JUSTICE PETER SMITH: You are not -- you know that the
pilot scheme is only part of it, because you say you
were going to discuss a wider picture. Now, you can't
say to them –
A. No, I can't prevent them from doing --
MR JUSTICE PETER SMITH: You can't stop them from bringing
it up because if you had gone to the meeting in Cork and
said, "Woah, stop, I'm not prepared to talk about that",
then they would have said "Woah, stop, we are not
prepared to talk about the purchase price", and then you
would have been finished.
A. That's why --
MR JUSTICE PETER SMITH: You can't complain about that
unless you can establish it's part of a false and
fraudulent strategy to steal your business from you.
A. I am trying to do that the best way -- the best I can.
MR JUSTICE PETER SMITH: I understand your intent, your
belief as to their motives, but merely complaining about
them springing the wider picture on you has nothing to
do with it because they could have done that as part of
the negotiations, couldn't they?
A. Okay.
MR JUSTICE PETER SMITH: You accept that?
A. I understand, yes.
MR JUSTICE PETER SMITH: It is quite possible you could have
gone to Cork and not secured a deal at all.
A. 100 per cent that is why I am reasonably positive.”
I need not set out any of the other examples set out in the Defendants’ closings.
It was finally put to KR in the correct case:-
“Q. So Mr Davenport and Mr Poole, not liking the words
"hissy fit", they have attributed to KM the words
"erratic behaviour", but it comes to much the same
thing, I think. What you are saying there is that it
was only Lizzano's intention not to go ahead on the
basis of the side letter because of KM's
behaviour, which is indeed what you have just told us?
A. Yes, that's correct.
Q. Because you said -- do you remember, a moment or two
ago, you said, "Hang on a minute, you have missed out
one important thing in that", and you said it was
KM's hissy fit; okay?
A. Yeah.
Q. And indeed that is what is said here, and it's the hissy
fit that leads to what's in the side letter not being
proceeded with; okay?
A. Yeah.
Q. Now, what I am suggesting to you is that what is being
said there is just simply not right, and you never had
any intention of providing long-term funding on the basis of the side letter?
A. May I speak, Mr Cousins(sic)?
Q. Yes.
A. Mr Cousins(sic), get real. Right? We have a guy that
is off the planet at that meeting. He's -- we're
tempted just about to enter into a 30, 40, even more,
£50 million development, and a guy, right, is acting
like an out-of-work film star. All right? And yes, we
changed the deal therefore, but it was not done on
a fraudulent basis.
MR JUSTICE PETER SMITH: You don't need to bang the desk; it
might damage the microphones. Okay?
A. I am sorry. I did explain it. I mean, two years of
this rubbish. It's getting to me, my Lord, I'm sorry.
MR COLLINGS: I think I have put the point, and my learned
friend would accept that I have: you never having had
any intention of providing long-term funding, and
I think you have answered that point.
A. And that's the fraud, is it, Mr Cousins(sic)?
Q. Yes, that you didn't have any intention of going through
with the side letter.
A. Right, okay.”
Note KR’s “right ok” as a classic example of him acknowledging the explanation of the fraud but not admitting it is one interpretation if one just sees the transcript. He actually means “No” and everybody in Court understood that. However a stranger reading the transcript migh think that was an admission.
The reason why this is important is as the Defendants in both sets of written closings submit the pleaded case is that there was never any intention to enter into any arrangements as all. By attempting to suggest that the plan was to hold back certain terms and spring them on the Claimant in negotiations is the opposite of the pleaded case. The reason for that is that it involves the Defendants intending to provide long term funding, the Defendants intending NGM to retain the Patent and to have an opportunity to benefit from the Surbiton site. As I have said for this to be capable of being run there must be a plea of some kind of implied representation by the Side Letter that terms as to shareholding would not be introduced. Apart from it not being pleaded this is hopeless. The idea that the Side Letter which is completely open as to what terms were to be negotiated had some kind of parameters on it which excluded some things but not others is not pleaded in my view.
CONCLUSION
The Claimant’s case in my opinion was always a weak one and became progressively weaker as the trial went on and ultimately fails.
It was not assisted for example by (inter alia) the following. Originally the plea of fraudulent intent started in October 2009 as soon as the parties entered into negotiations. That was untenable and Mr Collings QC ultimately retreated to some date before 15th January 2010.
Second the conspiracy allegations were abandoned during the course of the trial. Third this had all been seen before. In July 2010 NGM made a number of immensely serious allegations against ND. The complaints to the SRA mirrored its complaint to the SFO and alleged that ND had made false representations at the meeting on 7th January 2010 and had put NGM under economic duress on 15th January 2010. The SRA rapidly dismissed that claim and the matter with regard to the SFO was not proceeded with.
In the present claim the allegations are simply repeated but with different Defendants. KM and EOS only apologised at the start of their evidence before cross examination but had left without apology serious allegations against a professional person and a firm of solicitors which ultimately they admitted had not basis at all. As will be seen in the examination of witnesses below KM and EOS were forced to admit a number of matters that were said in the complaints were untrue.
The most misleading of the complaints was the suggestion that NGM was drawn into the Loan Agreement with a gun to its head bereft of legal advice. It knew that was untrue and the letters of complaint were carefully crafted so that it could give the impression that it had no representation at the meeting (which was untrue) and thus no representation at all (which was untrue as at all material times it had telephone access to its lawyers).
The true picture in my view having heard all the evidence is as follows.
NGM had this idea which was at its very early stage of patented protection in that an application had been made but nothing else. It had tried unsuccessfully for several years to obtain any finance to acquire a site to use it as a project to see whether it worked.
Mr Korat (“CK”) had provided funding of over £1m to NGM. By the summer of 2009 that had gone. There were suggestions that the money had been frittered away in maintaining an expensive lifestyle of KM and EOS. That may or may not be true but the reality is that the £1m had gone, CK was plainly not prepared to put anymore in and he had agreed to have his £1m loan converted to share capital in the Claimant (at a surprisingly low amount in terms of share percentage 13%). By late September 2009 NGM in my view was desperate. It was not in a position even to pay modest fees. The Surbiton opportunity came but it had no money even for a deposit. In the autumn of 2009 it entered into negotiations with the Defendants to fund the acquisition of Surbiton. That of course only tells part of the story because the acquisition of Surbiton is really the end of the beginning only. A lot has to be done to obtain planning permission and then obtain funding to develop the site and sell the developed site on whether as marinas or properties.
On the basis of the figures provided by NGM to the Defendants PW concluded that if everything failed there would be a fall back which would enable them to sell the 13 moorings and cover the outlay of the purchase price. In fact that premise is most probably doubtful.
At the time of the negotiations the Surbiton Site was as KR graphically put it “a duck pond”.
The negotiations drew out until December 2009. NGM’s position was becoming increasingly desperate. It had seen off the other counter bidders by making a large subject to contract offer at £1.65m but the sellers (Kennet) were becoming increasingly impatient because they were not moving to exchange of contracts. The vendors were clearly concerned because NGM in its bids had falsely given the impression that it had funds not only for the deposit but also for exchange. In fact it had neither.
By December 2009 NGM was to my mind insolvent on both a balance sheet basis and on the basis that it was unable to pay its debts as and when they fell due. It was therefore desperate. It was in that context that KM wished to proceed with matters.
The suggestion of an interim loan was his so that the contract could be signed and the deposit paid. This is significant because the whole basis of NGM’s claim against the Defendants was in effect that it was trapped into signing up the Interim Loan Agreement and then the Side Letter was issued and the trap thus sprung.
If that is the correct analysis it is surprising that the trap was actually set by NGM itself and not by the Defendants. Without that suggestion the Defendants would simply have continued negotiations until they were in a position to consider offering finance. It was NGM that was driving the deal.
The key preliminary meeting took place at MdR’s offices on 7th January 2010. All the main parties and their lawyers were present.
In the intervening period the Loan Documentation was prepared by MdR. This took some time but that was not part of any ulterior motive. Ultimately the documentation gestated between the 11th and 15th January 2010. In addition to the contract for acquisition and the Side Letter a large amount of security documents were prepared as security for the Loan Agreement of up to £225,000 between Lizzano and Filterbed. That facility itself was an “on demand facility”. The effect of these documents gave Lizzano security over all assets owned by NGM including the Patent licence. In addition there were guarantees given by NGM, KM and EOS to Lizzano.
That documentation if executed provided full security to the Defendants if it was proceeded with. The documentation was signed after NGM and its officers in particular KM and EOS and CK had had the benefit of advice from their lawyer Mr Larner (“JL”).
On the facts it put NGM in an extremely weak position in negotiating the next stage. The reason for that is that having taken the £165,000 loan Filterbed thus exchanged contracts. It stopped the sellers from re-advertising Surbiton but did not begin to address NGM’s difficulties. It had no funds to pay the balance of the purchase price. It had no funds to repay the on demand facility from Lizzano.
As a result of the on demand facilities provided to Filterbed by Lizzano it and NGM and its shareholders were extremely vulnerable for the reasons that I have set out above. It is not alleged that NGM and its directors did not understand the effect of the arrangements. It is not alleged (ultimately) that they did not receive legal advice. The consequences are that NGM pinned its hopes on negotiating a fresh deal with the Defendants after the contract had been exchanged. Without that exchange it is quite clear that the vendors would have re-marketed Surbiton. NGM would not be in a position to make any credible bid in a re-bidding exercise. NGM therefore took a chance.
At that time NGM was insolvent. At any time any of its creditors could have put it into liquidation as it had no funds to pay even modest amounts. It might have had the expertise but it had no money to begin to develop the Patent. It could not pay the professionals for progressing the Patent application for example. This is somewhat fundamental.
After exchange on 15th January 2010 up until the proposed completion on 5th February 2010 NGM had the opportunity not only to save itself but also enter into an arrangement with the Defendants for the purpose of acquiring Surbiton, developing it and hopefully expanding the Patent and the method in a big way.
Unfortunately it was not to be. There was clearly a personality clash to put it mildly between KM and KR in a number of meetings that were set out to finalise the arrangements between the two camps. The personality clash was sufficiently large to make it impossible for them to work together. It may well be that KM and the other investors in NGM finally realised how weak they were and that in effect they had lost their control of NGM because of their decision to borrow the money on demand (their idea as set out above).
It is not in doubt that the Defendants put the maximum pressure on NGM. However there is no allegation of undue influence or duress in this case. The Defendants simply exploited their strong position and the Claimant’s weakness. That is not of itself actionable. It happens in business transactions day after day. The Defendants also are not bankers as PW and KR emphasised in their evidence. They would not be interested in lending £1.65m to NGM and have a return based on a normal bank interest rate. They would want to use it colloquially “a piece of the action”. The Defendants did not need to do this transaction; they had plenty of other opportunities. They therefore approached it with a reluctance which was a large counter balance to NGM’s desperateness.
As the negotiations fell apart the Defendants looked to their position. If the acquisition of Surbiton did not take place it is inevitable that the deposit would have been forfeited and it is unlikely that the Defendants would ever have seen any of the £165,000 back. There is nothing to suggest NGM had assets beyond the Patent which was of a doubtful value at that early stage of its existence. It appears that KM and EOS were men of straw. In April 2010 EOS was driven to ask Mr Douglas to lend him some money. They refer only to their elderly VW cars as assets. Accordingly Lizzano made a demand to Filterbed which it could not pay and the whole pack of cards collapsed. This left the Defendants in control; enabled them to take control of Filterbed and borrow the full amount of the purchase money to complete the acquisition of Surbiton. Subsequently they as I have said acquired control of the Patent.
After completion there were further negotiations with a view to giving NGM a non-equity role in the development. It is quite clear that the Defendants were genuinely pursuing that option whereas NGM was not. At that time NGM, KM and EOS were attempting to re-finance the deposit with a view to redeeming the deposit and getting the Patent back at least. It is unclear whether a licence would still have been capable of being maintained by the Defendants. Anyway that is not significant because like all the other negotiations for raising money by NGM they failed.
It is clear to me on the evidence that negotiations took place and failed. I simply do not accept having seen such documentation as there is (mostly from the Defendants) and having seen the main players give evidence that there was any dishonest representation by them in respect of the Side Letter. It might be true that they did not expressly refer to shareholding before the Side Letter became into existence but that does not matter; all negotiations were open and NGM’s case is not based on a suggestion that the terms of proposed negotiations were partly held back and that was a dishonest representation (i.e. the point which Mr Collings QC repeatedly tried to put but which is not open to him on the pleadings).
In case that analysis is proven to be wrong one looks then at what claims NGM could make. I do not see that recission is a starter because I do not see that it is appropriate for there to be partial rescission. The Loan Agreement has to be set aside which requires Lizzano’s loan to be repaid with all relevant costs and interest. That in my view is an impossible exercise. One cannot only rescind part of the many documents which were executed. The provision of the security over the Patent is part of the overall financial structure. Filterbed cannot repay the loan. It might be possible for the rescission to operate if NGM and its funders put Filterbed into funds to repay the loan. In addition Filterbed would have to repay the balance of the purchase price which was lent to it by Lizzano after KM and EOS were removed. Finally Filterbed having been struck off on 18th June 2013 pursuant to section 1000 of CA 2006 will need to be revived.
On the question of damages Mr Collings QC accepted that the damages would be on a loss of a chance basis. My conclusion on the evidence as I shall set out below is that there was no realistic prospect that NGM had it not been tied in to the Defendants would have been able to have obtained alternative finance to enable it to exchange and complete the acquisition of Surbiton let alone the development of the project. It would have collapsed into liquidation way before any prospective deal could have been put in place.
In order to make good those general conclusions I now turn to consideration of the evidence.
NGM - BACKGROUND
NGM was set up in October 2003 by KM and EOS. They had had careers in the City before this and had known each other for around 2 years before it was set up. They had no practical experience relative to the product. They had investigated the concept of floating developments such as were found elsewhere in the world particularly Holland, Canada and the US. The idea is to build houses in areas that might be susceptible to flooding. If the process worked it would enable a lot more land which was currently unsuitable for traditional residential development to be developed. Thus it was believed the exercise would generate more land for development and enable more houses to be built. There is of course in all ideas the question of feasibility and financial feasibility. It is undoubtedly the case that the system is more complicated and expensive self-evidently than building traditional houses on traditional sites which are not susceptible to flooding. The difficulty is maintaining interest in a project which will cost more when there is no shortage of land available. Equally there is difficulty in maintaining interest when the economy and the land market is in a difficult position. Builders do not have the funds or access to funds to carry out more esoteric type developments. Nevertheless this is what KM and EOS embarked on.
They rapidly realised that in addition to building houses they would need to ensure that the buildings satisfied the council of mortgage lenders and the requirement for house building guarantees. These two potential problems were to an extent overcome by 2006 although they only had guarantee arrangements from Zurich for a period of 2 years.
The technical input was provided by Carl Nelson (“CN”). He was first met as the Technical Manager of Zurich. Late in 2006 he was offered a post as NGM’s Construction and Technical Director on a salary of £80,000 pa. He took up the post in March 2007.
Also in early 2007 they were introduced to PRC Architects (“PRC”) and they showed great enthusiasm for floating buildings and they became involved in preparing plans for a floating residential, commercial and hotel development at Queen’s Dock Liverpool. PRC were paid £70,000 for their work on the project although that did not proceed.
The wide ranging nature of the possibilities was demonstrated by the fact that they also explored other potential applications of the technology such as for work stations for the shipping repair industry, offshore oil rig industry and offshore storage facilities and even possibly military (drawing on the experience of the Mulberry Harbours in the Second World War). It was then decided that the process being developed could be patented. On 11th May 2008 NGM submitted an application for a patent. CN was listed as the inventor. It is said (for example KM’s second witness statement paragraph 24) that CN was listed as an inventor in the application. NGM also agreed to pay him 10% of any licence fees it would earn from the Patent. This was put forward as being a requirement for the US market. In my view that down plays it and seriously down plays CN’s technical assistance. He resigned as a director of NGM towards the end of 2009. CN provided a witness statement for the Defendants but his evidence was not challenged by NGM and he never gave evidence. However he challenged the statement that he was listed as the inventor of the Patent as a gesture of goodwill. He stated that he was listed as the inventor because he was the inventor. He said in his witness statements that he had worked on the development of the Patent alone and he alone produced the hand drawn technical drawings and plans that were needed to make an application, he provided technical drawings and plans to the patent agents and he dealt with his resignation as a director of NGM. He denied that he had resigned as a director. He said that he was made redundant and NGM terminated his employment on 18th February 2010 (i.e. shortly after the collapse of the arrangements with the Defendants). He brought a claim in the Employment Tribunal which resulted in a settlement agreement but NGM reneged on that and did not pay him the settlement fee which was agreed being in itself in lieu of a substantially higher sum in unpaid wages. He became employed by Lizzano from June 2010 but NGM never paid him his award. This is a familiar story in respect of NGM’s professional team at this time. The total amount due to CN was £30,000 in lieu of notice and unpaid salary and £1,140 statutory redundancy pay.
Most of the working capital for NGM was provided by Mr Cyrus Korat (“CK”) who gave evidence for NGM at the trial. He too had a City background having in particular been the manager of the Credit and Mortgage Trading Desks for Merrill Lynch from 2000 to 2008. He met KM and EOS at Merrill Lynch in early 2002 and the concept was explained to him. It made a good impression on him to the extent that he made an initial investment of £50,000. That investment increased over time to a total of £1m. There was no formal sharholders’ agreement and it was based simply on trust. It is by no means clear what happened to CK’s £1m save that by the summer of 2009 it was exhausted. In concrete terms there was very little to show for that money. In order to put NGM’s balance sheet on a solvent basis CK agreed for that £1m loan to be converted in to equity. One can see the necessity for that when one looks at NGM’s accounts to 30th June 2009 and the previous year’s accounts to 30th June 2008. In the latter accounts the liabilities exceeded the assets by £1,540,785. The assets consisted of tangible assets worth £13,423, debtors of £11,093 and cash at the bank and in hand of £71,648. The creditors were over £1m and the vast bulk of that was CK.
The accounts to 30th June 2009 show that on 18th September 2008 1520 B Ordinary shares with a nominal value of £1,520 were allotted for a consideration of £950,000 converted from loans to the company. That gave CK 1500 of the B shares of a total of 4934. There were an additional 9108 A Ordinary shares. That performed some surgery on the balance sheet so that the excess of liabilities over assets fell to £142,699. The debtors were reduced to £3,977 and the cash was reduced to £11,430. The result was that NGM swapped a liability of £1m for a relatively small percentage of shares in it in favour of CK. I cannot believe that anybody would seriously value NGM on the basis that this modest amount obtained by CK was worth £1m. It seems to me quite clear that by the time of the accounts to 30th June 2009 NGM was balance sheet insolvent. The subsequent evidence shows that he was unwilling to put any further money in it.
INVOLVEMENT WITH THE DEFENDANTS
In early 2009 NGM had explored numerous opportunities for developing sites using the potential of the Patent. They are all set out in the witness statement of GP who was a building project manager who had clearly a number of connections. He first met KM and EOS in April 2009, was impressed with their project and agreed to work for NGM without pay. His role was to introduce it to equity players in the capital market. It was all about timing as he says which was difficult because of the recession. He envisaged that his activities if successful would lead him to becoming the Chief Executive. Ultimately he had a contact who recommended him to James West (“JW”) a senior private banker at Arbuthnot Latham & Co. EOS and GP met him on 29th June 2009 and gave a presentation about NGM. JW consulted his client list and recommended PW. At about the same time the Surbiton Site became available. It appeared to be just the kind of site that would suit the application of the Patent.
GP, EOS and KM met PW for the first time at GHP’s offices off Baker Street on 6th August 2009. A full presentation was given which lasted about 2 hours.
Thereafter there were a number of meetings over lunch in September/October 2009. Significantly GP says in his evidence that there were discussions at those meetings of KM selling roughly 45% of NGM to PW. He formed the view that KM would have been happy to let anything below 50% to benefit the overall picture. This is significant considering NGM’s major complaint against the Defendants is that the question of a shareholding being taken was sprung upon it after the signing of the Loan Agreement.
Nothing was finalised at this stage and is clear everything was tentative. However it did lead to a letter dated 16th September 2009 from PW to KM. That letter set out PW’s thoughts about a development at Weymouth/Portsmouth. This was in anticipation of the possibility of providing accommodation for the Olympics.
It proposed an advance of £2m work capital to develop the site with GHP being the lender. The Patent was to be assigned to it for security. The interest would be 15% on all monies drawn and 5% on undrawn funds and GHP would receive a profit of 50% of the net profits before taxation. The loan monies and all interest was to be “cross collateralised with any other project undertaken”.
He went on then to discuss Surbiton where he was more tentative principally so far as I can see because of the unconditional nature of the purchase and the current timetable for building and sales. Nevertheless he was willing to consider lending on the same basis.
His closing comment was “the above sets out a “ballpark” as to how we wish to work with you; once we get one or two underway we can take a wider view on your business overheads and cashflow because it will be in everybody’s interest to grow and expand in a prudent way. Given the current economic climate a more cautious start does seem appropriate…..”
Armed with that letter NGM made subject to contract offers for the Surbiton site. It had provided PW with its project presentation on 16th September 2009.
The first offer was made by EOS subject to contract on 21st September 2009 in the figure of £500,000.
Clearly funding is important to enable the vendor to assess whether the person making the offer is serious or merely a time waster. EOS said “In order to fund the purchase of this site NGM will use its loan facilities available from one of its partners GHP Securities. NGM and GHP have agreed a loan facility for any site purchases up to £2m and the 2 parties have in principle agreed to fund the purchase of the site”.
That was untrue. As late as 2nd October 2009 EOS was emailing PW suggesting that they continue their discussions because a deal between NGM and GHP would be “beneficiary (sic) for both parties.” CK was involved in these discussions given his large investment and he did not think the proposed arrangements with the Defendants were very satisfactory. He described them as “egregious” bearing in mind the fact that 15% interest and 50% of the profits were payable which he expressed the view would lead to very little for NGM. That might be right but the reality was that NGM had no other avenue to explore because it had no monies to put in to any development. That is well demonstrated by the fact that CN on 27th September 2009 had put in his expenses for July to September. The total claim was £927.43 stretching back to April. He reasonably asked for at least half of the expenses to be cleared. Crispin Topping a Chartered Surveyor specialising in development in residential projects was involved with NGM at this time and he had a contact a Tony Chalkley of Grant Mills Wood one of the selling agents for Thames Water. He had known him for 25 years and informally he provided Mr Topping with a bit of insider information. The bid of £500,000 had been summarily rejected and in mid-October he passed on the fact that Thames Water’s top offer was £1.25m which they were proposing to run with but they might compete if NGM made a bid of £1m with an overage provision. This was passed on to PW.
The clearly desperate state of NGM at this stage is demonstrated by an email from one Dennis O’Sullivan who had the ability to introduce organisations like NGM to supposedly high net worth individuals all of whom were sophisticated and well known to each other. Apparently EOS and KM had suggested they needed £15m. Mr O’Sullivan’s investors would expect to achieve a return of at least 30% although a risk was accepted and would expect to have a clearly defined exit route of typically 3/5 years.
Nevertheless Mr O’Sullivan crushed any prospect of obtaining funds from the people to whom he was connected. He criticised NGM’s accounts pointing out that the accountants to the draft accounts to 30th June 2009 had issued a disclaimer, NGM had no tangible assets and no known source of income to service its current overheads and its overdue debts. Finally he pointed out that as at 2nd October 2009 it had debts of approximately £243,000 and that in the previous period the company had “burned” £1.65m with no source of income.
Next he was critical of the Patent which was hardly advanced. This led to him to say that he was very pleased that NGM had had a substantial offer on the table of £15m (which was untrue) but that he could not see any way forward from his point of view. This was a brutal but accurate assessment of NGM from a potential investor at the time. It is clearly a significant unchallenged piece of evidence about NGM and its prospects.
NGM’s position vis a vis the Patent application was not helped by the fact that it owed the Patent agents an extremely modest sum of £670.98 but was not in a position to pay it.
In the light of the discussions between Mr Topping and Mr Chalkley EOS submitted a further subject to contract offer on 19th October 2009 of £1m plus a 5% overage. Once again it was stated that it would be funded from its facilities available from GHP. That too fell on stony ground and led to a third offer of £1.3m plus the overage. In the meantime a Steve Davies on 21st October 2009 told KM that his “Greek friends” in Piraeus/Athens would not be investing in NGM on the basis that the next 12 to 18 months was going to be very challenging for them. Mr Chalkley told Chris Topping that Thames Water were going to ask the final three including NGM for their best and final offer.
EOS submitted its best bid subject to contract on 28th October 2009 at £1.65m plus a staged overage payment dependant on the number of units of between 5 to 7.85%. Once again the Defendants’ facilities were prayed in aid to show their bona fides.
It is unclear the extent to which PW knew about this but I think it is fairly clear that on 16th October 2009 reference was made to PW agreeing GHP’s name could be put forward in the bid.
PW in cross examination was quite relaxed about that and was prepared to agree that he was a party to this deception put forward to Thames Water. His view was that this was a normal kind of “deception” in property bidding situations. That appears at first blush to be somewhat surprising but I have encountered such a stance before. In Hemsley & Ors v Graham [2013] EWHC 2232 (Ch) in that case the Claimants contended that they had been induced to invest in the Defendant company by reason of fraudulent representations as to the strength of its loan book. It provided loans to people to acquire businesses or properties. Those loans were supposedly for short term bridging finance. In fact the bulk of them did not exist. One of the side lines the company allegedly operated was a facility whereby it “lent” monies to auction bidders for 24 hours. That would then create a credit balance in a bank account which would be shown to potential sellers and the auction house that they had funds in cash necessary to complete any purchase. This was of course untrue because the day afterwards the monies were returned to the Defendant company which claimed a fee for the provision of this service.
Nothing turns on this in the current litigation but it does show that both parties had a “relaxed” approach to honest dealings when it suited them.
DECEMBER 2009
By December 2009 NGM’s position was becoming critical. It had secured no further funding to cover its regular expenditure. It had no funding in place for the acquisition of Surbiton. Thames Water were becoming increasingly impatient. In that context NGM’s lawyers (note not the Defendants’) came up with the idea that there should be an Interim Loan in place ahead of the final Loan Agreement being put in place (KM email 16/12/09 to PW). On the same day KM sent a draft “To whom it concerns” letter to be signed by PW agreeing a statement that they were going to partner the purchase of the acquisition of Surbiton and would agree to release £60,000 of monies to NGM to sort out certain agreed backlog/arrears that existed (including rent arrears and commissions due to Arbuthnot). PW provided a signed copy of that letter. It was a comfort letter to be provided to NGM’s creditors and shows how desperate the position was in December 2009. In order to assuage Thames Water the Defendants made arrangements on 5th January 2010 to send the deposit over to NGM’s solicitors to be held in an escrow account pending sorting out the Loan Agreement. All of this of course is still provisional and is merely a smoke screen to camouflage the fact that Thames Water accepted subject to contract NGM’s offer on the belief that finance was in place. NGM had not even paid James West at Arbuthnot Latham for the introduction. By 23rd December 2009 they were hoping to reduce his fee significantly. He was still strung along and vented his frustration by his email of 7th January 2010.
All of the above is symptomatic of the desperate financial position of NGM by January 2010.
MOVEMENT TOWARDS TERMS
There was a meeting on 7th Janaury 2010 at MdR’s offices. KM, EOS and MdR’s lawyer attended together with GP. PW and Nick Davies (“ND”) the partner at MdR were there and the discussion was of interim arrangements. PW and ND stressed that the documents would ensue from that meeting would have some draconian elements. It is unclear whether or not the debentures and personal guarantees were mentioned. GP gave evidence to the effect that there was no mention of them nor that the loan was repayable on demand. Draft Heads of Terms came out on 10th January 2010 reflecting what was discussed generally but made no mention of security.
However it is important to note what PW said in the covering email to KM. He reminded him that when the project was started he was told that there were 13 external moorings in play to fall back on and that a residential scheme had an excellent chance of success. Their investigations revealed there was no consent for those moorings although that should be okay, residential planning consent was going to be a significant uphill battle. PW emphasised the risk profile has grown and the opportunity for a very attractive residential property had dwindled. Nevertheless he was willing to stand by the heads of agreement because of KM’s confidence. Nevertheless he proposed a different share of the reward for the non-residential to reflect the risk profile.
The letter provided that on the disposal of the moorings all outstanding loans should be repaid together with a coupon of 15% per annum. After that the profit share will be 50% after a priority return to GHP of the first £750,000. The same was applicable to the marina except that NGM would share in 33.3% net of the profits after a further priority return to GHP of £750,000. The profit share in respect of the Marina and residential varied according to the number of units.
The loan documentation appeared in dribs and drabs between 7th and the very day of the next meeting on 15th January 2010. GP’s note of that meeting is somewhat Delphic. It cannot pretend to be a full note and has the phrase “interim loan agreement falls away on exchange of the loan agreement including PG and NGM”. He frankly accepted that he did not pay a lot of attention to the detail.
Mr Collings QC in his oral closing placed great reliance on that note. He submitted it showed that when the final agreement was entered into the PGs were to be required no longer. This seems to me to be extremely unlikely. Why would the Defendants take less security when their exposure was going to be increased 10 fold? It is true that they would have Surbiton as security but that would be of difficult value in its present state and there was no margin between the lending and the purchase (100% loan).
In any event GP’s note is not pleaded as a representation. Mr Collings QC referred to paragraph 98 (2) vi which refers to the security “being superseded” with the new loan . This is ingenious but not correct. The pleading simply refers to the replacement of the earlier security with alater one. The word “superseded” does not equate to the security being required no longer. This is to give too much emphasis to a brief and partial note a meeting which GP could not clearly recall. It is too slender to lead to an implication of fraud.
Ultimately the documentation was signed in an unaltered form. NGM does not challenge that documentation. It is not said it was not understood. It is not said at this trial (cf the abandoned complaints to the SRA and the SFO) that it was obtained by duress. The only challenge as I have said is based on an allegation of a fraudulent representation that the Defendants intended to go forward with a final agreement when there was never such any intention from the outset.
Given the limited nature of the pleading it does not really matter whether or not the question of personal guarantees was allegedly “sprung” upon them or otherwise. NGM’s case is not based on a partial revelation of terms with some kind of representation that the Defendants would not be able to introduce more terms than those referred to in the Heads of Terms which does not mention any question of personal guarantees or debentures nor even any equity stake in NGM.
I cannot see that any of this matters. Like any hard negotiated commercial agreement parties’ positions vary during the course of those negotiations. These negotiations had been long drawn out and ultimately NGM had reached the end game in the sense that it is quite clear that without an immediate signing by that time Thames Water would no longer proceed with them. NGM could not proceed without obtaining the interim loan at the very least from the Defendants. It is self-evident to my mind that any lawyer giving any kind of reasonable advice to the Defendants would want to provide full security for the deposit.
I say that from the following. NGM had nothing to give by way of security. The only asset was the Patent which was of doubtful value because it was merely at the stage of an application to register. NGM was insolvent at the time and could not pay its debts. Several of its professionals were being kept off with a promise of money following this arrangement. Its principal investor CK was unwilling to put any more money in.
The Defendants were being asked to put £165,000 in to NGM to enable it to contract to purchase the Surbiton site. However NGM had no means to complete. The security of the deposit was therefore tenuous. If NGM failed to complete it would risk losing the deposit at the behest of the vendors. A security over a forfeitable deposit does not really amount to much security at all. In that eventuality within a matter of weeks the Defendants would have simply lost £165,000. Unsurprisingly therefore they were advised and took all necessary security over NGM’s assets if it had any and personal guarantees from KM and EOS. They were being required to back NGM with their own personal promise. Once again I see nothing remarkable in that. The only way in which the Defendants could have avoided a loss of the £165,000 would have necessitated them funding the completion of the purchase (which they did). That merely gives them an undeveloped site which KR when he saw it in October 2009 described as a glorified duck pond. Without development it was worth very little. Given all that as I have said the idea that the Defendants would require less security when the exposure was to increase by a factor of 10 is most unlikely.
It is interesting to note that in that context a meeting of 24th November 2009 between KM and GP, with Justin Meredith on behalf of GHP present and the planning officers for the local council showed that the stage 2 development being the main residential would need to demonstrate very special circumstances and would be an uphill struggle. Their view was that the scheme in respect of the residential element which was the whole basis of the proposal would be very difficult to justify given as the borough was able to meet its housing targets set out in the London plan without the site. Further the type of housing envisaged would be unlikely to fall into the category of special need e.g. affordable or student housing. KM’s report to PW of that meeting is best described as optimistic in my view. That is reflected in many ways by the fact that the Defendants have failed to obtain any planning permission despite the long and expensive attempts. They face apparently a concerted campaign by a protest group which in effect are desirous of keeping the duck pond as precisely that. That of course is hindsight but it is fair to say that this was a difficult project bearing in mind the new product the location and the cost. The Defendants were in my view rightly cautious especially in the economic environment that appertained in 2010.
In my view the Defendants were motivated in their desire to obtain maximum security by a desire simply to protect their position to the best that they could.
Conversely NGM entered into all the documentation understanding what it meant and realising its consequences. They had the advantage of legal advice via the telephone (although they dishonestly told the SRA and the SFO impliedly that they had no advice). Their suggestions were rejected and they nevertheless signed. This they did because they had no choice. They could have walked away but that would have been the end of NGM in my view and the total losses.
As in a lot of hard driven commercial negotiations there is not full equality of bargaining power. The Defendants were a substantial organisation that specialised in investing in projects that they hoped would make large profits. They were not interested in bank type returns as PW made clear in his evidence. They did not need this transaction. Unless it was structured in a way that was acceptable to them to minimise their risk they simply would not become involved.
It is true that the consequence of entering into the interim agreement meant that if NGM defaulted on repaying the £165,000 on demand would be that they lost everything. This is what happened. However I do not think it happened as a result of a failure to obtain an agreement as a result of fraudulent misrepresentations by the Defendants that there would be such an agreement. It failed because the two main personalities KM and KR fell out spectacularly in the subsequent meetings to negotiate the final terms of the final documentation. Both decided they could not work with the other and that was the end of it.
It is important to appreciate that NGM’s case is based entirely on inference (paragraph 1.6 of its closing). The primary basis for that is the suggestion that everything unravelled remarkably quickly and that by the time of the completion NGM had effectively lost everything. It is difficult to allege and prove fraud generally; it is even more difficult to seek to establish fraud by inference. There is not one piece of documentary evidence which suggests there was fraud on the part of the Defendants.
Furthermore the internal documentation of the Defendants post the signing of the interim agreement show that they were moving forward with a hope of finalising the agreements.
This was a classic case which NGM hoped to win on cross examination. The Micawberistic approach failed as I shall set out when I comment on the individual witness performances. Mr Collings QC despite a vigorous and searching cross examination of PW and KR failed in my view to extract anything which can be used as a basis for suggesting the Defendants had the requisite fraudulent intent.
EVENTS AFTER 15TH JANUARY 2010 UP TO DATE OF COMPLETION
The period between 15th January 2010 and the proposed completion date of the Sale Agreement on 2nd February 2010 is a vital period to understand what went wrong in this case.
The Defendants’ internal documentation is completely at odds with the NGM case that they had no intention of entering into long term arrangements with it. The documentation is extensively set out in the Defendants’ closing. I will set out one example namely the email dated 19th January 2010 from PW to ND where he said this:-
“I wanted to give you the heads up before our meeting tomorrow. Lizzano is giving NGM Sustainable Developments Ltd a massive boost as a business by entering into this loan. The Surbiton deal being the first one and in a very difficult market – will massively promote NGM and act as a catalyst for the Company to do many other projects. It is agreed that Lizzano will be given a right of pre-emption on all new business but realistically Lizzano are unlikely to do it all. To my mind Lizzano should also benefit from the share value of the business going forward; of course this is a commercial negotiation but right now Lizzano has the upper hand so strike whilst the iron is hot. In reality GHP - acting for Lizzano and the Mebco structure – will significantly assist and help NGM raise significant new funding and provide property expertise which they do not have. Can you please consider how share options will work in these circumstances and how we can bind the current directors and shareholders of NGM in case that Company goes bust.”
PW talks of course of striking while the iron is hot. He was cross examined on this (T10/200) and he explained it as being the time to secure the best deal. It was not suggested to PW that this was evidence showing a lack of intention on the part of the Defendants to proceed with the deal and thus being merely taking advantage of NGM now it was bound up in the agreement. It was in my view right not to put that because it seems to me having heard PW that this was but one of many instances where PW emphasised that he was of course determined to obtain the best deal for the Defendants. Part of that exercise was following the advice of MdR to protect themselves with maximum security. It is accepted that the idea for the maximum security came from ND and the Defendants merely accepted the advice of their lawyers. That is plainly not evidence of an intention never to enter into the arrangements.
This is another example of PW progressing matters in relation to the “big picture” i.e. beyond Surbiton. He is making clear that that particular transaction will be the first but it will be difficult but it will massively promote NGM. The whole tenure of the email is contrary to NGM’s case in my view.
NGM’S MANOEUVRES
It is clear that after signing the loan documentation that NGM realised that it was in a weak position with regard to finalising the facilities with the Defendants. The only way to strengthen that position was to attempt to have in place other funds so that they could repay Lizzano’s advance. Of course that would only take them so far because by 5th February 2010 they would have to find the balance of the purchase price. Nevertheless unbeknown to the Defendants at this time NGM was attempting to repay the deposit loan and proceed with Surbiton without the Defendants. KM and EOS tried to persuade CK to provide the money [T6/37]. They also tried to procure £150,000 from CT and sought advice from JL on how to extract themselves from the security and loan arrangements.
The Defendants in their closing categorise this as plotting but I see nothing wrong with that. It is summarised in JL’s email to KM and EOS. It was to be used to show to PW in negotiations that they have funds to repay the loan and that if the Defendants do not water down the terms of the interim loan agreement in the final agreement they will simply repay the advance and all the security documents will fall away. I see nothing wrong about that but it demonstrates how everything was fluid during this period. It was a bluff of course and I suspect the Defendants were not fooled. Once that was called NGM either signed up on the terms being put forward or walked away. If it did the latter it lost everything.
MEETINGS POST EXCHANGE
There were two meetings in this period which are vital. The first was at Cork on 27th January 2010. KM, GP, and PW flew to Cork to meet KR. This was the first time they had met KR since the inspection of the duck pond in October 2009.
These exchanges to my mind are explicable on the basis of the Defendants wanting the strongest possible terms that they could have in the negotiations. This was PW’s stance in cross examination also. I do not see that the letters are evidence of an intention never to enter into long term arrangements with NGM. In fact they are the opposite because they are dealing with terms that they would wish to ensure that they have the fullest protection.
MEETING 26TH JANUARY 2010
PW requested a further meeting with EOS and KM. He also asked CK to attend. According to KM’s evidence at this meeting out of the blue PW asked CK to provide £100,000 should NGM require it. He however was either unable or unwilling to commit any further monies to NGM at that time. At that meeting it was arranged that a meeting with KR would take place and it was arranged that KM, GP together with PW would fly to Cork to meet with KR. This was the first time that they had met KR since the duck pond meeting in late October.
There were clearly undercurrents going on between PW and KR of which KM and his side were blissfully unaware. It was epitomised by a quite an extraordinary letter PW sent to KR dated 9th January 2010. It demonstrated the total breakdown of the relationship between PW and KR. Resentments had been simmering between each other and there had clearly been arguments. It is clear that KR personalises arguments and clearly has a habit of hectoring people in an attempt to demean them to show that he has power over them. PW’s letter demonstrates such treatment he received from KR. It is quite clear that KM and his fellow investors received similar treatment from KR. Despite that clash it is quite clear that by the letter PW was suggesting that this was the decision time for Surbiton but that the proposition seemed to be risky. That reflects the analysis that PW had set out earlier.
On the way over to meet KR the mercurial nature of KR was highlighted by PW volunteering to them that KR could be quite aggressive. It is also clear that the Defendants were having second thoughts about funding the £60,000 required to keep NGM continuing. That was what was behind PW’s request for CK to put more money in. The fact that CK was unwilling to put more money in must have been concerning to PW. He must have formed the view that the Defendants were being required to put all the money in and therefore assumed the risk whereas the Claimant was bringing nothing to the party as it were. I have no doubt that that thought was behind the Defendants thought processes which led them to accept MdR’s advice to take maximum security in the Loan Agreement.
Nevertheless PW’s warning about KR was not only unusual but turned out to be prophetic.
MEETING 27TH JANUARY 2010
The apparent purpose of the meeting was to take the relationship forward i.e. the supposed big picture. This is EOS’s evidence and is also KR’s evidence in his second witness statement. However it is clear that at least KR had an agenda which involved driving the Claimant down as far as possible to obtain a deal for the maximum benefit of the Defendants. The issue was the £60,000. I am quite satisfied and accept KM’s evidence (which is on this point supported by PW’s evidence) that KR aggressively raised the £60,000 and removed it from being available to NGM. This would have put NGM in a difficult position. The only other possible source of funds at that stage was CK. He had already been asked and declined to produce £100,000 a day earlier. It is quite clear in my view that KR steamrollered over KM and GP and in the course of that steamrollering exercise demanded a 70% share in NGM. It is clear that KR earlier agreed with PW that the Defendants would fund the £60,000. It is clear that KM thought it had been agreed. It was actually included in PW’s own figures on 26th January 2010. PW clearly threw out the proposal for CK to bring £100,000 in as a test on 26th January 2010 which NGM plainly failed. KR in his evidence suggests that it was a ploy agreed between him and PW that he would play the nasty man at the meeting on 27th January 2010 especially in relation to the £60,000. PW does not accept that. His first witness statement on the Cork meeting is illuminating (B2/1/40-43):-
“41 We met Kevin at the airport hotel and I knew in an instance this was going to be a bad meeting. Kevin was in a belligerent mood, and his tone was aggressive. I was used to this behaviour however the others were not, and clearly made them very edgy.
KR focused almost immediately on the £60k, asking for clarification as to why this necessary. Understandably KM had felt this issue had been agreed and was now behind him, and that we were there to discuss the future.
I pointed out to KR that this had been agreed, specifically between heand I, but for whatever reason he was not willing to let go of the point.
The conversation then meandered away from £60,000 towards NGM’s finances, and where KR’s direct manner no doubt caused offence.
The entire meeting was descending into chaos, and I pressed to wrap up as quickly as possible.
41 On the flight back I apologised to KM and GP explaining that we would rearrange when Kevin was on better form. I explained that KR had certain problems and that they should not take it personally.
KM was keen to raise the £60,000 with me, stating that this had been agreed. I confirmed that this was the case, and that I would sort it out.
42 KR called me the next day where he accepted he had “messed up”, and he wanted a further meeting to try and make amends. I believe this took place in London one week later on 3rd February 2010.
43 During this period we were starting to turn the pre-exchange heads of terms into a substantive final structure. Our whole focus prior to this date, and at KM’s insistence, had been on the Surbiton Site. Now the objective was to convert the heads of terms into legal documentation for Surbiton and the wider corporate relationship with NGM, however KR wanted to be an integral part of that process, and hence the importance of a second meeting.”
PW accepted that the £60,000 had been agreed and that he would sort it out. He also said in his witness statement (paragraph 42) that KR called him the next day and accepted he had messed up and wanted a further meeting to try and make amends. Somewhat disingenuously PW said “I believe this took place in London one week later on 3rd February 2010”. This was one of several examples where PW in his witness statement was not giving the full picture leaving it to be extracted in cross examination. I believe he remembered far more than he let on and was unable to recall it because it was inconvenient for the Defendants. This was in particular in relation to KR’s conduct.
KR was at pains to present himself before me as being a paragon of reasonableness and having very little recall of the various meetings. His witness statements were remarkably sparse on key areas. I do not accept his performance before me as representing the way he would perform in meetings. In my view that was a carefully crafted charade and in no way reflects his true persona. The letter of 9th January 2010 written by PW in my view really reveals the true nature of his personality and his problems. That letter was of course a private letter between the two and was written in respect of their own relationship and had nothing primarily to do with Surbiton and the Claimant. KR clearly is an extremely aggressive businessman who made his fortune operating petrol stations in East London and is prepared to use any bullying tactic possible to secure what he wants. That regularly works in negotiations for business. Regularly it can fail. It falls into problems when both sides are of a similar personality. I have not doubt having seen KM that he too had a similar personality to that of KR.
It is clear to me that KM was used to being in control and orchestrating things. This became increasingly difficult from December 2009 and ultimately he lost “his Company”. He had no choice and he did not like it.
This was a clash of egos at the most delicate of meetings. KM no doubt went to the meeting feeling that it was all in the bag and this was to discuss the way forward. Apart from PW’s guarded warning on the flight over I suspect he had little inkling of what to expect. He then met KR at his best (or more realistically at his worst). KR was determined to exploit the Defendants undoubtedly strong position by 27th January 2010. He correctly perceived that in reality NGM had no chance of doing anything but ultimately agreeing whatever terms he was prepared to give them. He must have known that they had little chance of salvaging their position as a result of the Loan Agreement.
I accept PW’s evidence that he could see the meeting disintegrating and closed it off as quickly as he could and I also further accept his evidence when he said he apologised for KR’s behaviour at that meeting.
NGM clearly considered there were difficulties and that it might have to pull out of any relationship with the Defendants. That would necessitate it obtaining funds and redeeming the Defendants security. JL gave it advice on 26th January 2010 when the possibility of obtaining funds from CK was considered. He emphasised (as was obvious) that to be in a positon to negotiate with the Defendants from strength they must be able to threaten them with redemption. After the meeting on 27th January 2010 there was further discussion between JL and EOS as shown in the email of that date.
They were also considering whether or not they had any causes of action against the Defendants. JL gave them a long email advice on that topic. They were exploring the obtaining of £150,000 from clients of Crispin Topping but that faced difficulties as JL’s email showed.
EVENTS AFTER 27TH JANUARY 2010 FAILURE
As set out above NGM set about exploring options to take out the Defendants. It was extremely handicapped in that because repaying the monies advanced by the Defendants did not begin to address the problems bearing in mind the fact that NGM was locked into the contract requiring completion of £1.65m on 5th February 2010. That was of course a hopeless prospect because it had no money. Repaying the Defendants simply substituted another potential creditor for those deposit monies but did not advance NGM’s development possibilities. The major difficulty of course is any substitute creditor taking over the Defendants’ assets would be forced to take the same steps that NGM took to preserve the “security” of the deposit and the Patent.
EOS embarked on a round of trying to raise money from other funders. None of them was successful.
Between then and 2nd February 2010 PW negotiated a fresh Heads of Terms with NGM. He had also instructed MdR who produced a formal draft of the same date. Significantly (and destructive of NGM’s case) this included provisions dealing with the equity without demur. It was clear to the Claimant now that they were locked in to the Defendants as all its other prospects of finance had disappeared.
The meeting took place on 3rd February 2010 at the Langham Hotel. NGM believed so much had been agreed that they thought it would be a short meeting and there was going to be a dinner afterwards. PW disavowed them of that. It is interesting however PW operated (as he promised on the flight back) throughout these drafts on the basis that the Defendants would put up the £60,000. The only wrinkle was a suggestion that CK had to give a promise not to put NGM into administration if the £150,000 was not repaid. That appears to me to be more technical than of any value. He could not have put NGM in to administration without the consent of Lizzano as a debenture holder. It is quite clear however that PW put back into the draft a clause that had the Defendants providing the £60,000 finance in the Heads of Terms.
The negotiations led to the Heads of Terms. I am of the view based on PW and GP’s evidence in particular that the drafts prepared by PW reflected an honest attempt at what was agreed. It will be seen from the draft that shareholding was (without dissent) dealt with. GP prepared notes of the various meetings but they were nothing more than aide memoires and do not begin to address the detail that would have been discussed at any meeting or any discussions that took place other than at meetings. The shareholder split was 50/50 although the shareholding retained by NGM was to be diluted by the repayment of the £150,000 that was to be advanced. It is clear that NGM through these discussions accepted the Heads of Terms to take the matter forward to the meeting on 3rd February 2010. GP acknowledged in his evidence that PW’s Heads of Terms reflected honestly what was agreed. It might be that they were different to the ones agreed on 15th January 2010 (by that he meant the Side Letter). However they were agreed pending final agreement with NGM.
MEETING 3RD FEBRUARY 2010
This meeting took place at the Langham Hotel and as I have said above KM and EOS thought it was to be a short meeting to confirm acceptance of the Heads of Terms followed by dinner. It turned out to be somewhat different. I am quite satisfied having heard PW (who supported KM, EOS and GP on this) that KR resorted to the same tactics that had taken place in Cork on 27th January. I am satisfied he once again raised the £60,000 and he also demanded between 60 and 70% of NGM. This was not necessary to ensure control as PW in particular accepted. Control could have been obtained by a 50-50 split provided the Defendants had the chair of the board and the usual casting vote in the event of deadlock. It could have been achieved as was shown in some of GP’s notes by the Defendants having as little as 49% provided there was a provision that no matters were to be decided unless the Defendants agreed. PW accepted that it was unfortunate to put it mildly that KR raised this issue when all it did was inflame matters with NGM. PW must have viewed KR’s antics with dismay as he could see all his efforts to get the parties together unravelling before his eyes. It was so unnecessary as he accepted. Control did not need 60-70%. The figure of £60,000 is small compared with the overall deal. KR wanted to push for the extra mile. It went badly wrong.
I do not believe PW and KR were acting out a good cop bad cop show. If they were intent on the fraud it would not be necessary. They could have simply insisted on the terms and left NGM stuck with them. However they could not be sure that it would not accept them. Thus the fraud cannot work for that reason alone.
KR did not accept this version but the whole of his evidence before me involved a deliberate attempt to give an impression of a number of matters which I reject. First he tried to give the impression that he had no control over events and that he had no interest in the outcome because he had no interest in the funds that were being invested. I simply do not accept that. The true relationship that KR had with the investments is that nothing was agreed unless he agreed it. It does not matter whether or not he is “on the notepaper” he is the “the governor” (see P) Gilford Motors v Horn [1933] Ch 935. However much he attempted to persuade me he was a voice of reason and did not recall anything I do not accept that evidence. His performance is clearly demonstrated by PW’s letter of 9th January 2010 referred to above.
Unfortunately KM was not a man to lie down and roll over either. In my view there was a classic clash of personalities. KM’s position (and no doubt stress) by 3rd February 2010 was conditioned by the dire position NGM found itself in by that time. KM realised the negotiations were going nowhere unless as he saw it he capitulated to the demands of KR. He was not prepared to do that. Thus he left the meeting abandoning the others. That too was a quite extraordinary thing to do. Nevertheless effectively that was the end of the negotiations. It was also the end for NGM. KM refused the terms and left. By that time it was clear in my view to both KM and KR that they were not going to do business together.
CONCLUSION
My conclusion by the time this failed meeting was over is that no agreement was going to ensue because of the clash of personalities between KM and KR and the insistence on the part of KR to extracting every conceivable term to the Defendants’ advantage (contrary to the position of PW who had negotiated subject to contract terms before that only to see KR once again break the negotiations).
Did the negotiations fail because KR deliberately sabotaged them because he never intended to do a deal? I reject that case which is the end of NGM’s action as it remained by the time of the closings. KR was determined to obtain the best results in the only way he knew namely to have a no nonsense vigorous debate and in effect dictate the terms that he was prepared to offer. The fact that he was talking at all shows that he was not unwilling to negotiate at all or was embarking on a charade because even he was willing to have a deal with NGM. The problem is the terms he was willing to put forward were unacceptable to KM. That was always a risk in the way in which matters were put together. From NGM’s point of view it was disastrous. That disaster however arose because NGM’s financial position had no choice but to deal with the Defendants and was so desperate that it had locked itself in by the Loan Agreement in the hope of negotiating final terms which were acceptable. That did not happen.
EVENTS SUBSEQUENT TO MEETING 3RD FEBRUARY 2010
After the meeting of 3rd February 2010 collapsed in the acrimony between the two egos the parties went their separate ways. The Defendants the next day had a detailed conference with MdR about strategy in the light of that failure.
NGM for its part received a draft Loan Agreement from Mr Topping for £150,000 on 4th February 2010. The conversation with MdR produced a desire on the part of the Defendants to serve a demand for the £165,000 and other charges which was accepted consensually so as to enable Lizzano to take over the completion of the Acquisition Agreement from Filterbed. That was agreed with EOS on 4th February 2010. In exchange NGM would be offered a Development Management Agreement with the same profit spilt as per the Heads of Terms. On 4th February 2010 Lizzano issued a demand to Filterbed in the sum of £184,048.97 which of course it could not pay. JL was copied in to it. He provided some advice to EOS and KM on the same day. JL made a proposal for the release of the securities on the basis that Lizzano being allowed to step in to the transaction and complete the acquisition of Surbiton that satisfied the entire amount due under the demand notice. That was rejected by MdR on behalf of the Defendants in less than an hour. JL spelled out the options to KM and EOS on the same day. Later that night ND of MdR set out the options. The third option was that Lizzano lent the money required to complete to Filterbed under a new Loan Agreement with all the security in place. This required Lizzano to enforce the security against NGM and issue the shares in Filterbed transfer the shares in Filterbed to Lizzano and remove all the directors and appoint their own. That would then leave the ability to enforce the charge against the Patent if Lizzano chose to do. On Friday 5th February 2010 the Defendants agreed to go for that option. On the Saturday KM tried to obtain the release of his and EOS’s guarantees by pointing out to PW that they had nothing except two elderly Golf cars. PW rejected that but said that there was a genuine business deal which could work through sensibly if they would move forward in a logical manner. He expressed willingness to meet or discuss but time was short.
A meeting was proposed on 8th February 2010 and early on that day KM sent proposals to PW which basically involved meetings that linking the removal of the charges in exchange for Lizzano taking over but a Development Management Agreement being entered in to at the same time. On the same day the solicitors for Thames Water served a completion notice in respect of the Acquisiton Agreement for Surbiton requiring completion within 10 working days of that notice which would be approximately 22nd February 2010.
FINAL OFFER FROM DEFENDANTS
On 8th February 2010 at 4.25pm PW sent KM and EOS a letter marked “without prejudice and subject to contract”. The first long paragraph was a brutal examination of KM’s performance pointing out the total lack of bargaining position he was in. However PW expressed that he was willing to make one last attempt to work together and that there was no question of the Defendants fleecing KM or NGM. He apologised in effect for KR’s performance but did suggest that part of it was designed to test how KM would operate under pressure.
The letter then set out an offer which involved NGM obtaining a Development Management Agreement on the same terms as signed up previously but Lizzano would take control of the contract complete the purchase of the Surbiton site but there would be share options given by NGM to Lizzano amounting to 60% of its shares. It would have an option to trigger at par value and would have in effect control of the board. KM was given until Wednesday to accept the offer failing which Lizzano would take control of Filterbed and complete the land purchase. If it was not accepted by then PW said he would “proceed with Surbiton independently and consider our working involvement with you to be at an end. Finally the above offer is not negotiable.”
Brutal though that letter is it is completely at odds with the suggestion that the Defendants had no intention of negotiating genuinely a way forward involving NGM. If their desire was a total lack of intent to negotiate in reality in order to steal NGM’s valuable asset the offer in my view would simply not have arrived. By that time the meeting had collapsed on 3rd February 2010 and a demand for the monies had been made which the Defendants knew NGM could not satisfy. If their strategy was to place them in the position of acquiring NGM’s assets they were then placed to do it. This dialogue did not need to take place. If they had the intent they would not put forward an offer which might have been accepted.
JL pointed out that PW obviously believed NGM would be unable to repay the liabilities. KM circulated the letter between his partners and sent it to Mr Topping as well. In so doing he sought comments. JL gave a sensible observation that PW obviously believed he could not repay the liabilities and that was the key.
NGM sought finance elsewhere. For example Justin Meredith (“JM”) a chartered surveyor who had previously worked for GHP until he fell out with them in December 2009 facilitated a meeting between KM and Charles Douglas (“CD”) a solicitor with a view to introducing finance. There were a number of apparently interested parties but none was prepared to take the matter further. Significantly KR in his evidence before me expressed the view that it would be ludicrous for anybody to enter in to an exchange of contract paying a 10% non-returnable deposit without the intention of completing the transaction. The fact in reality is what NGM did because it did not have the means to complete the contract when it entered in to it.
A draft letter was prepared by Keystone Law to be sent to the Defendants on behalf of NGM but it was never actually sent. That letter contained a number of assertions of misrepresentation, collateral contract, economic duress and failing to put NGM in to funds to complete.
None of those allegations was pursued in this case and the allegations in this case were not set out in that letter. CK’s response to the PW letter was to advise KM that he had little option but to accept the terms provided they were agreed in detail.
After this exchange KM entered in to a dialogue with PW. The sole purpose of it is set out in his email of 9th February 2010 to GP and others “All [...] I think this is the best chance of buying time”.
A number of meetings ensued thereafter between the respective sides. KM suggests that KR came to one on 3rd March 2010 with KR carrying on in the same old way. Neither PW nor KR effect to have any recollection of this meeting. All of these meetings were to consider a continuing relationship with the Defendants. They came to nothing. I am not convinced by this time that KM had any intention to enter into any arrangements with the Defendants and the whole exercise was a process of stringing out the Defendants in the hope that finance would be forthcoming from the other sources to enable NGM to take the Defendants out.
Unfortunately the costs were becoming increasingly expensive. Lizzano was forced to complete the purchase to preserve the deposit against loss in enforcing its security. That made the total required to remove the Defendants in excess of £1.65m. In reality that was always going to be the required sum because taking out the deposit (especially after the completion notice was served) would not assist NGM at all. The financial difficulties of NGM are well illustrated by this time by JL’s email to PW dated 17th February 2010 where in addition to advising him on bankruptcy he was not prepared to provide any further assistance without having at least £12,000 plus VAT (two thirds of the current outstanding bill) paid. In advance of a further meeting on 17th February 2010 PW emailed ND reporting on the prospective meeting and referring to ongoing discussions with NGM and CK which were all to be concluded. PW expressed the view “it is most likely that we will bust NGM with their “blessing” and set up new Co to go forward.” CK seemed to think that this was a good idea as his email to PW shows. All of this still appears to be a buying time exercise by NGM. EOS’ email of 20 February 2010 to GP and KM commented “to see if we can give ourselves and Charles [Douglas] a bit more time on Monday/Tuesday lets get an email together for Philip it probably needs to come from Kerry, as Philip’s view is that we “want” to work with them they want to hear from Kerry that he is committed to it!!! I guess the email needs to have a fine line between showing commitment to new Co and giving us more time”. KM reiterated this in his own email to CD later on in the same day. The strategy subsequent to that meeting with PW was reiterated by EOS in his email to CD on 24th February 2010. CK however cautioned EOS and KM that they must keep the PW deal alive in case the other guys do not come through. On an email of 3rd March 2010 KM recounts to GP and CK the language that KR used in the meeting of 3rd March 2010. I accept that meeting took place and that such language was used.
A note prepared by the Defendants for action in the dispute shows that they were still actively considering a development involving NGM with a 60/40 split in the new Co.
An exchange of emails between PW and KM on 23rd/24th March 2010 shows NGM’s continued financial difficulties. GP was out £2000 and James West (from Arbuthnot Latham who made the first introduction between the parties) is described as an idiot because he asks for some consideration to be given to rewarding him 8 months down the line. By 29th March 2010 time was running out and GHP caused a letter to be sent by Lizzano intimating that an administration was the best way in respect of NGM. The purpose of this was flagged up in the NGM meeting. It was to set in track a method of acquiring the Patent by putting the administrator in in the hope that he would then sell it. Some more time was bought and on 7th April 2010 KM was emailing CK and others that the investors to be introduced by CD (“the Arabs”) wanted to proceed.
Simultaneously the Patent agents were seeking the princely sum of £776.48 which had been outstanding for over a year in relation to their fees for registering the Patent. CK had to pay it; NGM could not.
During April CK carried on the negotiations with PW about the Shareholders Agreement but it is clear this was merely spinning PW out. By 26th April KM was getting somewhat desperate as his email to CD shows. The stalling finally came to an end as regards the Defendants. On 27th April 2010 they decided to give the DM Agreement to GHP Real Estate instead of NGM. CK had to pay the Keltie bill out of his own funds. Matters drifted on through May. By 21st June Keystone Law were threatening a winding up petition in respect of their unpaid fees. The Directors of NGM tried to fob them off by suggesting that their bill was due from Filterbed which had no basis in fact. On 25th June 2010 KM and EOS’ guarantee was called in in the amount of £184,048.97.
On 7th June 2010 Lizzano appointed an LPA Receiver over the Patent. That Receiver assigned the Patent to Lizzano for £20,000. No complaint had been made as regards that appointment and the sale. Nobody other than Lizzano formally expressed interest. NGM knew about the sale but chose not to bid.
Unfortunately for NGM CD’s proposed investors never materialised and the discussions appear to have gone in to the sand by mid May 2010. That meant that the purpose of the spinning out of the Defendants was pointless. NGM took the matter no further beyond making the groundless and dishonest complaints about MdR.
COMPLAINTS ABOUT MDR
On 6th July 2010 KM and EOS made a complaint against MdR to the SRA. The letter of complaint told a number of lies. First it gave the impression that they did not have access to legal advice. The letter said “NGM and its directors did not have any legal representation in the room. Having had only a few hours to read through all the documents provided by [MdR] there was a significant amount of duress experienced by NGM and its directors”. That statement utterly failed to tell the SRA that at all material times they had free access to JL to advise and between them they made a decision to take his advice over the telephone rather than have him attend the meeting. Further JL made comments on all the documentation and he had enough time to deal with the documents. The Defendants however were not prepared to accept them and KM and EOS had the option whether or not to sign. The giveaway in the obligation to sign is in their statement to the SRA that “they [i.e. MdR] knew that NGM had no other offers of finance and no time to secure one in time to complete the purchase within the deadline set by Thames Water for exchange.”
The second lie was that there was a representation that a simple loan for the balance of the completion monies would be provided in time for completion. There was no such representation. It is not alleged in the present proceedings and it was accepted that it was not made.
In summary they accused MdR of making fraudulent representations, putting NGM under economic duress and induced it to fail to complete by not providing the finance.
Four days later on 10th July 2010 they made a complaint about MdR to the SFO.
That complaint repeated the misstatement about not having any legal representation in the room it accused MdR again of making fraudulent statements and putting NGM under economic duress.
MdR provided a detailed response to the SRA complaint and ultimately the SRA closed the file and informed NGM and MdR on 17th January 2011 that it was satisfied that there was no evidence of professional misconduct. The SFO complaint went nowhere.
The importance of this is that KM and EOS were prepared to accuse an innocent professional firm of fraud and dishonesty without justification. No compelling reason was given for this. After some hints they apologised before the start of their evidence but had never apologised to MdR before.
I regard this as particularly serious because it demonstrates that KM and EOS are prepared to lie when it suits them or they think it can give them an advantage. That willingness was demonstrated elsewhere. The Defendants in their closing provided a substantial critique of KM’s and EOS’ behaviour. These complaints are the high water mark of that complaint. It is fair to say however that they were prepared to mislead Thames Water as to the availability of finance when they put in a bid for Surbiton. They also were willing to mislead PW in the period from 3rd February 2010 to May 2010 that they were seriously interested in carrying on being involved with the Defendants when all the correspondence shows that they were not.
ASSESSMENT OF CLAIMANT’S WITNESSES
As this case is based on a contention that I should infer the fraud the actual evidence of NGM’s witnesses is not germane to that issue. That is to be found by examining the conduct of the Defendants.
Nevertheless I have commented above on the attitude of KM and EOS.
What is significant from having seen them in the witness box and having the documents being put to them by the Defendants’ Counsel is an assessment of their character. It is clear to me that KM was a head strong personality and was used to being in control. He was faced from mid-2009 with a crisis. All of NGM’s money provided by CK had gone. It was difficult to see where that money had gone. This was graphically exposed when KR grilled him about it at the meetings. He needed money at the time he became involved with the Defendants to pay long outstanding debts and to finance NGM’s continuation. Furthermore of course he needed money to acquire Surbiton and develop it. He was in my view clearly desperate by January 2010 and this put tremendous pressure on him and explained some of his actions such as walking out of the vital meeting of 3rd February 2010.
I did not see that GP, JM and CK provided anything other than background information. It is fair to say that after the negotiations fell apart on 3rd February 2010 they were prepared to go along with the strategy of stringing the Defendants out whilst NGM sought alternative finance.
CT wrongly explained away his failure to provide the £150,000 on the problematical relationship with GHP where as in fact it was because NGM could not provide security.
I accept that GP’s notes of the various meetings which led up to the Loan Agreement are probably accurate as far as they go. Like all notes they were not comprehensive and did not begin to cover everything that could possibly be covered. Equally I fully accept that nobody can be realistically expected to recall the detail of meetings that took place over 5 years ago. Anybody who has such recollection without the aid of contemporary documents (unless something specifically graphic occurs) is likely to be considered with caution.
THE DEFENDANTS’ EVIDENCE
I found PW to be a compelling witness. He was frank and straightforward. He presented as a tough minded businessman but one who was willing to negotiate. The contemporary evidence which I have summarised above coupled with his evidence shows the lengths he was prepared to go to try and keep the deal together. That effort was despite the performances of KM and KR. He tried to broker a deal on a number of occasions. He was frustrated in that by KR’s conduct and that clearly led to bad feelings between them. That was in addition of course to the bad feelings which had been expressed in his letter of 9th January 2010. He was however professional enough to put those disagreements apart in an attempt to finalise the arrangements. He tried very hard after the negotiations fell apart on 2nd March 2010 to keep NGM on board in a way which had it proceeded would have given them at least 40% of the equity in newco. He was of course being led up the garden path by KM and the others during this period.
KR’s performance as a witness was a masterly performance. However in my view it bore no relation to the way in which he performs outside the Court. He gave the impression of not understanding very much and not recalling very much and I simply do not believe him on that. He was a very successful businessman brought up in the hard knock of business in East London. He went abroad for tax reasons and I am quite satisfied that his behaviour at the meetings was as described by PW, KM and the other witnesses for NGM.
His way of achieving things was simply to bulldoze the other side into submission. The well-known observation of JAF is apposite “those who oppose me I crush!” Some of this was undoubtedly testing the mettle of the other parties. He was clearly provocative. He wanted people to take him on but KM would not; instead when the heat was on he left the key final meeting.
This did not advance the prospects of putting together a deal. He met another person with a super ego in KM.
CONCLUSION ON FRAUD ALLEGATION
I remind myself again that the pleaded case is not that terms as to equity partnership or harsh terms were sprung on the Claimant. The claim is that the Defendants never intended to enter into any negotiations.
I am asked to infer such a fraudulent representation. I have set out in some detail above the contemporary documents along the timeline between September 2009 and May 2010 which covers the entirety of the relevant relationship between the parties. I have not been shown any of NGM’s internal documentation. The Defendants have provided relevant contemporary information. I have looked at that material and have referred to it earlier in the judgment. The internal evidence of the Defendants is all one way in my view. It shows that they were interested in the proposals and interested in participating in a venture with the Claimant but on terms. There is not one piece of evidence from the Defendants which shows that they had the fraudulent intention alleged against them.
Further their conduct militates against such an implication. A number of examples will suffice. First from a documentary point of view the gestation of the documents by MdR was delivered late but an explanation was given to that which was not seriously challenged. There was no deliberate withholding of documents to spring on NGM at the last minute. One is not surprised by that; in commercial matters the parties and their lawyers tend to work long hours at high speed. It appears to be a kind of machismo test of people who operate in such an environment. That too extends to the personalities.
The second significant piece of evidence is in my view PW’s conduct. He clearly was interested in driving a hard bargain. He was clearly however at all times concerned to ensure NGM was involved. One way or another that involvement contemplated a significant equity participation in the newco who would be at the top of the corporate structure. After the collapse as I have said on 27th January 2010 he made a strenuous effort to come up with Heads of Terms that were acceptable to the Claimant but his efforts were dashed at the meeting of 3rd February 2010 by two things. First KR reverted to type and carried on bullying in the same old way. Second KM no doubt under great stress could not take it anymore and walked out of the meeting. That policy of the empty chair was unfortunate. I firmly believe that if KM had not so reacted a deal would have been struck on 3rd February which would have been acceptable to both sides.
At the end of the day the terms of 4th February 2010 did give them 40%. If the Defendants were fraudulently acting to take all they would not risk the possibility that NGM would actually accept KR’s new terms. He is simply extracting the last ounce of the deal believing that NGM would have no choice. He misjudged KM.
The third piece of evidence which militates decisively against the fraud is PW’s efforts post the failure of that meeting. If the Defendants were truly intent on defrauding NGM out of its project and never had any intention of participating once those negotiations had stopped they had succeeded in their strategy. Further it had succeeded because KM walked out. They would not have wasted anymore time trying to keep NGM on board under the Development Management Agreement. That proposal ultimately was still going to give NGM a substantial return if the project proved successful. It might not have been what they had hoped for when it set out on the road to developing NGM but in my view there was no choice because of NGM’s crippled financial state.
This extends even to KR. Despite his crash bang approach to negotiations he still remained willing to enter into agreements as suggested by PW after 3rd February 2010 meeting. I refer to the meeting of 3rd March 2010 which he effected not to remember in his evidence. It is true as I accept NGM shows that he carried on again with his same approach. However if there was a fraud it was completed by that time and there was absolutely no need for KR to spend any more time trying to negotiate with NGM in his own particular style. He was still willing at that stage to enter into arrangements which gave NGM some form of equity. That is completely inconsistent with the pleaded allegation of fraud. In my view KR was a very busy and aggressive businessman and he had more things to do with his time than spinning things along by 3rd March 2010. If the case is as alleged by NGM it was complete by 3rd February. The Defendants could have moved far more quickly about gathering in the assets and taking control. In reality they did sufficient to protect the investment in the deposit by buying Surbiton. That was something they had to do within a matter of days because of the completion notice. They then took control in the way that I have set out above but there then was a standstill period while they negotiated (or so they thought) with NGM. After several months of fruitless meetings and prevarication and delay they gave up in late May early June. Unfortunately for NGM its rescuer did not arrive and its prevarication and delaying tactics did nothing. That in my view is not conduct that is consistent with the allegation of fraud against the Defendants.
In conclusion the fallout occurred because of a clash of egos and KM’s decision that he could not do business with KR. By that time he had committed NGM to a purchase he could not fund and set up a situation whereby ultimately he spurned the olive branch proffered by the Development Management Agreement I do not know why he acted that way rejecting advice from (for example) CK not to do this. It is not for me to speculate but I am quite satisfied that NGM was not induced to enter in to the Loan Agreement which ultimately ruined it as a result of the alleged fraudulent misrepresentations.
I accordingly dismiss the action.
REMEDIES
I now go on to consider what claims for relief NGM would establish if I was wrong in my determination above.
RESCISSION
NGM seeks rescission in this action. The following documents were executed on 15th January 2010:-
A Loan Agreement for £165,000 repayable on demand between Lizzano and Filterbed (“First Loan Agreement”).
An All Monies Debenture in favour of Lizzano creating charges over all of Filterbed’s property (“The Filterbed Debenture”).
A Guarantee signed by Filterbed in favour of Lizzano of all or any monies owed by Filterbed (“the Filterbed Guarantee”).
A Guarantee signed by NGM in favour of Lizzano of any and all monies owed by Filterbed (“the NGM Guarantee”).
A Licence described as a Patent Licence granted by NGM to Lizzano in respect of the Patent.
An All Monies Debenture in favour of Lizzano creating charges over all NGM’s property including the shares in Filterbed (“the NGM Debenture”).
A Transfer Form of the shares in Filterbed transferring the shares from NGM to Lizzano to be signed by NGM directors.
A Guarantee signed by EOS in favour of Lizzano of all monies owed by Filterbed.
A Guarantee signed by KM in favour of Lizzano in identical terms.
NGM seeks rescission of the NGM Debenture, the NGM Guarantee, the NGM stock transfer form and the Patent licence, the assignment of the Patent but nothing else.
Nothing executed by Filterbed is the subject matter in the claim for rescission. However the Filterbed shares are sought to be returned although that might have been a mistake. Finally of course EOS and KM’s guarantees are not the subject matter of the claim for rescission.
This is a neat claim for rescission. What that would do if acceded to would revest the Patent in NGM free from any liabilities but divest NGM of any obligation to reimburse Lizzano for the monies it has expended. That figure of course is as much as £1.65m plus costs because of its acquisition of Surbiton. The purpose of this is to avoid the fact that rescission cannot be obtained unless there is restitutio. NGM could not even have repaid the deposit that was paid to Lizzano.
It seems to me that one cannot pick and choose from the suite of documents in respect to which rescission is sought. It is partial rescission. It cannot be right for NGM to seek to retain the Patent without unscrambling all of the transactions see Chitty (31st Edition) paragraphs 6-123:-
“Partial Rescission Not Allowed
6-123
The more flexible approach advocated in the previous paragraph would not necessarily be inconsistent with what appears to be the current rule that the misrepresentee may only rescind the whole contract and not part of it. In Vadasz v Pioneer Concrete (S.A.) Pty the High Court of Australia had held that in a case of fraud the court has power to set aside the contract on terms and thus could set aside the part of the contract of guarantee to which the fraud related (previous supplies) but leave the rest (as to future supplies) intact. This should be contrasted with the decision of the English Court of Appeal in TSB Bank Plc v Camfield, in which a wife was held to have the right to set aside a charge in its entirety when she had entered it as the result of the husband's misrepresentation that it was limited to £15,000. In Scales Trading Ltd v Far Eastern Shipping Plc the Privy Council had left open the question of whether the approach in Vadasz should be preferred to that in TSB Bank Plc v Camfield. However, in De Molestina v Ponton Colman J. held that it was not even arguable that partial rescission may be awarded. That there cannot be partial rescission is part of a wider principle that there cannot be rescission unless there can be restitutio in integrum. Thus:
“ … if a representee is induced to enter separate contracts A and B by the same misrepresentation, it may be that performance of contract B depends on the prior performance of contract A. In that case one cannot rescind contract A without also rescinding contract B … But there may be cases where, although both contracts were induced by the same misrepresentation, either can be performed without performance of the other. In that case the misrepresentee may rescind unless the contract not sought to be rescinded would never have been entered without also entering the other.”
The observations of Coleman J in De Molestina v Ponton [2002] 1LRP 271 referred to in that paragraph are apposite. There is no question that the Defendants would have entered into the arrangements with Filterbed as regards the acquisition of Surbiton without also having the security over the Patent.
Further Etherton LJ rejected a claim for partial rescission for fraudulent representation in Potter v Dyer [2011] EWCA Civ 1417 at [paragraph 58].
Finally if that rescission was acceded to it was undoubtedly the case that NGM would then seek to deprive the Defendants of using the rights protected by the Patent in developing Surbiton. There was no pre-action correspondence and the claim form was issued on 1st August 2013. In the intervening period the Defendants have invested substantial funds and time in acquiring Surbiton and attempted to obtain planning permission. The amount expended is in excess of £1.16m. That delay means in my view that is a bar to the claim for rescission see Nelson v Rye [1996] 1WLR 1378 for example. Alternatively any rescission if acceded to would be on terms that either the Defendants were repaid that money or that the licence would have to remain in place so as to enable the Defendants to be able to utilise it in the light of their expenditure.
My view therefore is if NGM is entitled to relief for misrepresentation it is not entitled to relief save on the terms identified above. I will if necessary hear submissions as to that when I hand down the judgment.
DAMAGES
I have heard a lot of evidence on damages. A lot of it was equivocal and both sides case (especially in relation to the Patent) was not easy to discern. Ultimately the technicalities of the Patent are not significant in my view; a point which has been overlooked at times. The Defendant would need the Licence to preserve their use of the protected rights. The acquisition of the Patent if registered would presumably enable them to try to stop NGM and its investors (through another company for example) from infringing those rights. However that is a long way down the road and cannot be significant. Neither parties’ evidence on this was undermined and I was unable to come to any clear conclusion on it. However it does not matter for reasons which I set out below.
Mr Collings QC accepts that the damages in this case ought to be based on a loss of a chance. I have recently reviewed the authorities extensively in Rosserlane Consultants Ltd v Credit Suisse International [2015] EWHC 384 (Ch) and in particular paragraphs 226-230 which led me to conclude as follows:-
“231. It seems to me that I should draw the following conclusions:-”
1) Even in the loss of chance cases the legal burden of proving a loss is on the Claimant.
2) As it involves the loss of a chance and it is argued that the Defendant caused that loss a Claimant can in appropriate circumstances be given “a fair wind” in how the Court is satisfied as to that loss. Any doubts should be resolved in favour of the Claimant to the best advantage.
3) The Judge must do the best he can with the evidence before him.
As I said in paragraph 309 the origin of the claim is the well-known case of Allied Maples Group v Simmons & Simmons [1995] 1 WLR 1601.
In the present case NGM submits that the figures put forward by the various experts requires various difficulties debated by the experts to necessitate a 70% discount to be applied to the profit. It further submitted that the average profit projections on the various schemes was 60% but that it should only seek half of that namely 30%. It is said to be borne in mind that NGM is entitled to a “fair wind”. Its claim to damages was assessed by it at 30% of £21m a quite stupendous amount given its financial position at the time.
NGM identified in its closing 5 potential problems:-
Planning Permission
Finance
Survival
Building Guarantees and Insurance
Costings
As regards survival NGM said (paragraph 8.11) “NGM was in poor financial health but all it needed in order to exploit opportunities and earn consultancy and licensing fees was to survive.” Of course it survives to this day. I am not aware of it earning any consultancy or licensing fees; it has simply lain dormant during the currency of this litigation. NGM did not put forward any reason why licensing fees could not be obtained yet it has not done so. I do not see what is stopping it. The same staff are there and their skills are theirs. I do not believe the alleged misrepresentations if they had been established had any impact on their ability to market themselves on consultancies.
The starting point therefore is what were NGM’s prospects of making profits had they not (on this basis) been trapped in to the Loan Agreement by the allegedly fraudulent representations made by the Defendants? In order to do the exercise therefore one ignores that they entered in to the Loan Agreement. It follows therefore that the subsequent events and the failure to agree anything are irrelevant for assessing the chance. Another way of looking at that would be that that would be assessing damages on the basis that the representation was true namely that there would be genuine negotiation which is not the correct basis for assessing damages for misrepresentation.
Nor is there a claim based on losses (such as wasted expenditure) on account of the alleged fraudulent representations.
Therefore one has to ask the question (applying the fair wind principles set out above) does NGM establish that it would have made profits if it had not entered into the Loan Agreement? If the answer to that is affirmative then one has to go on and assess what is the percentage chance that NGM would have made those profits?
The key and only significant point to this exercise in my view is NGM’s financial position. It is seriously understated in its closing. I have set out the financial history of NGM earlier in the judgment. The accounts showed that it was balance sheet insolvent. Those accounts themselves had to be rewritten even to achieve that level by a generous decision of CK to convert his £1m loan into share capital (at an extremely advantageous rate to NGM). Even with that generosity it remained balance sheet insolvent.
Until mid-2009 NGM had maintained itself and its operations basically on CK’s money. That tap was turned off by CK in the autumn of 2009. The only payment he made after that was the £700 fee due to Keltie (see above) which had been long outstanding. He paid that off in April to keep NGM alive whilst it was spinning the Defendants out on the Development Management Agreement.
All other potentially interested investors had come seen and gone. This is hardly surprising for two very obvious reasons. First in 2008/2010 the country was in the direst recession for several decades. As part of that recession the house building market had virtually collapsed and most established building companies had seen their share values literally decimated in this period. Developments were being sold off at a fraction of their book value to keep companies alive. No significant housebuilding was taking place and there was a surplus of land which did not require any kind of special treatment available. Second the project is of course more expensive because it requires extra work to be done to enable houses to be built on land which ordinarily would not support them. That is self-evidently in my mind only going to be of interest to developers when there is a shortage of land and they still wish to build. Neither was relevant at this time.
NGM could not pay its debts as and when they fell due either. This is demonstrated by the need for the £60,000 from the Defendants in January 2010 to pay its weary and increasingly impatient creditors. Most of those were professionals and the amount that they were owed went back a long time (see CN’s claims for example).
It had obtained preferential treatment by Thames Water because of its large bid and on the strength of its misrepresentation to it that it had funds in place. Several months ensued between the acceptance of its bid subject to contract and nothing was happening. Thames Water indicated that there had to be an exchange in January 2010. This litigation demonstrates the folly of NGM without having access to funds to complete the purchase. Equally I do not believe for one minute Thames Water would have entered into a contract with NGM on the basis of a deposit being paid but without it being in funds to complete the purchase. There was no evidence to show that NGM had any prospects of obtaining the deposit monies let alone the £1.65m required to complete the purchase. It can be faintly suggested that Mr Topping would have provided £150,000. He certainly toyed with the idea both before and after the collapse of the negotiations with the Defendants on 3rd February 2010. However he never put any money in despite the efforts of NGM to obtain the monies. Even then £150,000 would simply not be enough. It needed £60,000 to pay its creditors. It needed £165,000 to pay the deposit. Third I do not believe anybody would have advanced NGM £150,000 to be used as a deposit to buy Surbiton when it was clear that NGM did not have the funds to complete the purchase. If anybody had been unwise enough to hand over the £165,000 the only security they could have been offered was the contract to acquire Surbiton. To preserve that as a worthwhile asset one needed to purchase it as Lizzano demonstrated very quickly. If a new lender advanced the £165,000 it too would have to fund the purchase merely to preserve the £165,000. Otherwise NGM would not comply with the completion notice and the deposit would have been forfeited. One cannot really see in a commercial contract like the one contemplated how NGM would have obtained relief against forfeiture of the deposit under section 49 of the Law of Property Act 1925. So it would have gone and any lender would have to resort to the securities it obtained from NGM and its investors. Assuming such a lender was not as tough as the Defendants (no PGs, no charge over the Patent and no shares) it would have been worse off. The harsh reality is that any lender would have wanted the protection the Defendants had insisted on.
If a prospective lender had not taken even that security it could have taken some kind of charge over the Patent but that too was extremely tenuous at that stage and would have required further expenditure to improve it. One cannot ignore the fact that it was sold for £20,000 in July 2010 and NGM did not even make a bid for it. Its value then is not challenged in this action.
The evidence shows that the creditors are merely waiting for some kind of successful outcome in this litigation as there is nowhere else to make a recovery.
There is no evidence to show that NGM could have obtained any funds from anywhere else to acquire Surbiton. Thus it would have collapsed into insolvency on 5th February 2010 or shortly thereafter. With the loss of the contract and its deposit (but with an additional liability of £165,000) its Directors would have had no option but to call a meeting of creditors. Otherwise they would be in breach of their duties and potentially exposed to misfeasance or other proceedings such as wrongful trading.
It is significant that in its claim complaints to the SRA and the SFO a major part of the complaint was that MdR allegedly knew that it had no other source of funds. That is about the only truthful point that was made in the two complaints in my view.
I would therefore assess the chances of NGM obtaining Surbiton as 0% on financial grounds alone. The prospect of making profits elsewhere is just as remote.
I do not believe NGM would have survived any longer so as to enable it in effect to go back to the drawing board with other potential sites and other potential funders as there was in my view no prospect of any funder coming forward.
Further NGM has not traded since these events occurred. It is simply in my view being kept alive for the purpose of this action and its creditors are waiting to see what if anything it can recover. There is no reason why having lost Surbiton if it was viable and could have obtained finance it has not done so. No explanation is given for this. It could if necessary have obtained the Patent if it wanted.
OTHER FACTORS
The chances of obtaining planning permission in my view were very modest. It is significant to note what is being said on the ground as opposed to what the experts might say. In November 2009 a cautionary shot was put across the bows of NGM by the Planning Officers. Second the Defendants have spent in excess of a £1m in seeking to obtain planning permission and have been rebuffed. PW told me in evidence that there was a substantial local opposition (which had been successful) in wanting to keep the duck pond as a duck pond. If that remains the position as KR observed wryly in his evidence it would become the most expensive duck pond in the world. I do not believe therefore even if this comes into play when I look at those factors that NGM could establish anything more than a very modest percentage chance of obtaining planning permission for Surbiton say 10%. This reflects the Defendants failures. Planning applications were rejected in 2011 and on appeal in 2013. The fall back of the break even position of the moorings themselves is open to considerable doubt.
Further as I have said above if this product was viable and also was profitable the loss of Surbiton is no apparent handicap to that proposal. Any investor would have to take NGM on the basis that it cannot put any money in to the development. The expertise is available and there is no bar on the directors and investors in NGM delivering their expertise to a development on another site. They have not done so and that has not been explained to me.
It might be said that the loss of the Patent prevents it. However the Patent is as I have said not actually a Patent at all and is merely so described for the purposes of this litigation. Patents do not confer rights to do things; they merely enable a Patent holder to stop other people infringing the Patent. It seems to me that if NGM was serious about developing this product it could have either worked round the Patent or spent £20,000 in acquiring it in July 2010 from the LPA Receiver.
The inevitable conclusion from all of that is that NGM does not believe the product is viable and is simply willing to be kept alive by its investors solely for the purpose of using this litigation to try and extract money out of the Defendants. That is my conclusion.
DAMAGES - EVIDENCE
I face considerable difficulty even coming to any conclusion in respect of the damages based on the profitability of the Site because of the lack of core material to support it. This is well exemplified by a number of instances in the evidence. The difficulties about obtaining a successful Patent outcome at the EPO was described by Mr Harris the Defendants’ expert as being capricious. Mr Cummings the Claimant’s expert had the same view (T18/9).
There was a similar difficulty over the costings. Mr Greevy the Defendants’ expert expressed his opinion that the costings on the various sites were understated by NGM by a figure of £27,778,458. Cross-examination however showed how tentative this exercise was because he had no underlying material beyond the mere statement of the figures by the Claimant. He acknowledged his evidence was not based on any figures at all of significance (T18/66-69). Further Mr Collings QC both during cross-examination and in his closing has tried to build a case for the Claimant on Mr Greevy’s evidence.
That led to the following exchange:-
“MR JUSTICE PETER SMITH: You have to prove your case, and
you have to prove that your costings are reasonable.
Now you might be able to prove that some are reasonable
if Mr Greevy agrees with them that where he doesn't
agree with them, you have to prove them. How are you
going to do that?
MR COLLINGS: Well, to the best of my ability on the
material that I have.
MR JUSTICE PETER SMITH: But I am not presented with any
material on your side that's supported by an expert with
a Part 35 declaration, am I?
MR COLLINGS: No.
MR JUSTICE PETER SMITH: If you knock his criticisms out it
doesn't mean that your figures spring up fully armed as
credible, because you are not verifying them by anybody.
MR COLLINGS: Well, I'll have to meet –
MR JUSTICE PETER SMITH: The burden is on you to prove that
your costs are reasonable, isn't it?
MR COLLINGS: Of course, yes.”
There were similar difficulties over the Claimant’s surveyor’s evidence (Mr Ian Froome). He accepted that there could be a swing of plus or minus up to 15% in his valuation as there were no comparables in this area (T18/121-123). His valuation was based on an assumption of the grant of planning permission as he was no planning expert (T18/143). He was aware of the difficulties at Surbiton namely the lack of planning permission, a failed challenge and an active protest group but did not factor that in to his valuation. He had not considered whether or not there would be any difficulties of obtaining mortgages in respect of houses on this property (T18/144). In the modern world if a house is not mortgagable it faces difficult prospects of being sold on the open market. He was not shown any of the documentation in respect of insurance and mortgages and was required to assume it was mortgagable. The difficulty with this development is to distinguish it from being a boat. Boats are not mortgageable generally. He accepted that there was at the time a surplus of normal land available and that the proposed development would be a challenging exercise for an average builder (T18/149). He accepted that there was a lot of material which was not available to the valuers (see appendix 17 of Mr Adams-Cairns’ (the Defendants’ valuer) report and confirmed this in the joint statement and in cross-examination (T18/151). He accepted he had no original material for the costings and it was provided by NGM’s solicitors who in turn obtained it from NGM (T18/154).
Ultimately that led to the following exchange:-
“MR JUSTICE PETER SMITH: Which are 3.5 per cent, which
I think in your report you said they were a bit low, so
you raised it to 5, whereas Mr Greevy said with this it
should be 10, based on something called Spon's tables.
A. Spon's, yes.
MR DAVENPORT: I'm going easy on you, because I can see the
limitations, I'm not shouting or throwing anything at
you because I don't think I need to.
A. No, and I accepted, and in my report I accept that these
valuations do have limitations.
Q. Yes.
A. And if you ask me: will either of these sites sell in
the open market today or at the valuation date for this
price?, the answer is no.
Q. Not a chance in a million, is there?
A. The answer is no, because of the special assumptions
I have had to make.
MR JUSTICE PETER SMITH: The best you could get is an
option, isn't it?
MR DAVENPORT: That's right.
A. Yes.
MR JUSTICE PETER SMITH: A modest downpayment and then see
what happens?
A. The best the developer would get is an option.
MR JUSTICE PETER SMITH: The best the owner would get is
an option, isn't it?
A. All right, I would pay a pound for them, but --
MR JUSTICE PETER SMITH: Plus, I hope, a larger overage.
A. Exactly. You could sell them for some money, the sites --
MR JUSTICE PETER SMITH: You know how much the defendants
paid, don't you?
A. Yes, I do. For Surbiton, yes. Yes.
MR DAVENPORT: They overpaid, didn't they?
A. In the context of the market in which they were working,
I'm not sure they did.
Q. Okay. Well, anyway --
A. Because of course --
Q. -- you wouldn't value Surbiton at 1.65 now, would you?
A. Not now with the refusal of planning permission and
a chucked out on appeal.
Q. Exactly.”
The position of NGM’s accountant was not much better. He was Mr Frenkel an experienced and well known accountancy expert in the Courts.
However he was given none of the underlying material for the preparation of his report. He was also instructed by NGM’s solicitors to assume a 60% loss of a chance. He considered assessment of a loss of a chance not within his remit.
In the joint statement between him and Mr Parry on matters agreed (item 16) they agreed that on a balance sheet basis NGM was technically insolvent in 2009 and most of the net indebtedness at that point was in respect of monies loaned from investors in NGM. They also agreed based on the 2013 accounts and Companies House the company is still in existence, has not been wound up and all of [NGM’s] indebtedness appears to be from its investors. This then was added presumably by Mr Frenkel “however we agree that where a company has no assets, other than a potential litigation outcome, and no demands from creditors, there will be no oppressing need for it to be wound up.”
I would make two observations on that. First the question of the solvency of NGM cannot be assessed on the basis of the cause of action it has against the Defendants. The assessment of damages is on the basis that the misrepresentation had not been made so that there was no relationship with the Defendant and no cause of action against the Defendants. It is to be assessed on the chance which was lost by going elsewhere. Thus the fact that the creditors might wait in respect of litigation against the Defendants is irrelevant to that exercise. It is clear from the matters set out above that some of the creditors reached the end of the line. I cannot believe that they would have waited while NGM went down a fresh road of trying to obtain finance to acquire properties and develop them in accordance with its hopes. In any event it did not have the money to do that and it did not have any experts who were prepared to work for it anymore. All of this reinforces my view that the world in this action is unreal if it is ever thought that NGM would have survived as a company without the investment of the Defendants.
The second point is that if the company is technically insolvent and is being run for the purpose of litigation that could be said to be wrongful trading see Singla v Headman [2010] EWHC 902. By exposing a insolvent company to liability to other creditors (i.e. the Defendants as regards costs in this action) it could be said to be wrongful trading in accordance with that decision.
OTHER FACTORS (2)
As I have said above it is essential for any kind of domestic residential development of new houses for sale that those houses are mortgagable and have warranties under NHBC or some other institution. NGM had negotiated those some years earlier but by 2009/2010 the effect of those negotiations had expired. This point was picked up by PW (email 2/11/09). There was no evidence showing tey would still be available in 2010.
CONCLUSION
The insolvency of NGM in my view is fatal to its case on damages for the reasons I have set out above. I simply do not accept there is any credible evidence that it could have survived save by doing business with the Defendants. The best illustration of this (if one is required) is the letter from Denis O’Sullivan dated 12th October 2009. See above paragraph 116 which to my mind crushes the possibilities of this project ever developing at the hands of NGM and its limited input alone.
Even if that is overcome the evidence of the experts put forward by the Claimant is not to my mind sufficiently credible to be able to form the view that there is even a remote possibility of the development being profitable. The same applies even more spectacularly to the other proposed sites. Once again the test is in the eating. NGM has never sought to develop any of the other sites and has not explained that. If it had lost Surbiton if its projects were as good as it said and the finance was already available it could have gone elsewhere. Equally it would have found the £20,000 to pay for the acquisition of the Patent (even supposing that is necessary for them to develop the idea).
In short an interesting idea but not of great interest in my view. Accordingly even if liability is established I would assess any damages at nil for the reasons set out in this judgment.
Accordingly I would have dismissed the claim even if liability had been established.
I am grateful as ever to both sets of legal teams for the way in which the matters were put forward for trial and the trial conducted. It is of great assistance to a Judge to have all the documents properly prepared and to have comprehensive opening and closing submissions aided and abetted by oral submissions of high skill.
TRUST DOCUMENTS
There was an issue as to whether or not KR was able to get his wishes as regards the assets of the K Trust (T20/117-24) and I gave the Second to Sixth Defendants an opportunity to make confidential submissions to which NGM could reply if necessary.
Pursuant to that I was supplied with copies of the documents in support of those submissions. Those documents are supplied confidentially and I confirm a confidentiality order appertains in respect of those limiting the disclosure to the legal advisors.
NGM did not make any submissions in respect to these matters.
The Second to Sixth Defendants not only submit that I do not need to determine the issues but I should decline to make any findings.
I have decided that I need not make any finding. However I remain firmly of the view as set out above that KR was “the governor” in the sense that nobody made any decisions without his say so. Whether that was correct in accordance with the Trust documents or not is irrelevant. That was the de_facto position. It is peripheral because if it is established that PW had made the false representations there was no issue that PW had any authority to make them.
Accordingly however deep the waters run I have no intention of stepping in to them beyond this short paragraph.
CLAIM NO: HC13A03315
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
B E T W E E N:
NGM SUSTAINABLE DEVELOPMENTS LIMITED
Claimant
-and-
PHILLIP WALLIS
LIZZANO LIMITED
CASCINA LIMITED
KEVIN REARDON
HYDRO PROPERTIES LIMITED
HYDRO PROPERTY HOLDINGS LIMITED
Defendants
________________________________________________________________________
ANNEX A
Glossary / Cast List
________________________________________________________________________
AM Alison Mulford, director of SPP, and director of Hydro
AR Andy Ryley, PRC senior associate director
AW Andrew Wolfin, solicitor of MdR
AL Anthony Lee, partner at DAC
AP Anthony PlucKRose, Patent attorney with Boult Wade Tennant, engaged by Lizzano
APOC Amended Particulars of Claim
BH Bernard Hoffman, insolvency practitioner of Gerald Edelman Chartered Accountants, and receiver of Filterbed
Cascina The 3rd Defendant, Cascina Limited, a company incorporated on 13 March 2010 in the Isle of Man,
Charles Douglas Solicitor of Charles Douglas Solicitors, Mayfair
CN Carl Nelson, NGM’s construction and technical director until February 2010, then consultant to Lizzano from May / June 2010
Collins Collins Solicitors, C’s solicitors in these proceedings
CT Crispin Topping, chartered surveyor and potential investor in NGM
CK Cyrus Korat, shareholder in NGM
DM Dan Moyer, manager of Equiom
DAC Davies Arnold Clark, solicitors retained by Crispin Topping
DH David Harris, Patent attorney of Barker Brettell LLP, D2-D6's intellectual property expert
EF Eric Kaemmerer-Farag, development director of SPP
Equiom Equiom (Isle of Man) Limited, an Isle of Man company, retained to provide management, administration, corporate and trustee services to the IoM Group
EOS Espen Ostbye-Strom, director and shareholder of NGM
Filterbed Filterbed Development Surbiton Limited, a UK company incorporated on 29 December 2009
Giddings Sheilagh Giddings, KR’s personal assistant
GHP GHP Securities Limited, a UK company incorporated on 13 April 1999
GP Geoffrey Potton, a property developer and consultant to NGM
GH Georgiana Harper, wife of KM
HS Hannah Saunders, an employment lawyer with Keystone retained by NGM to provide redundancy advice
HPHL The 6th Defendant, Hydro Property (Holdings) Limited, a company incorporated on 8 April 2011 in the Isle of Man
Hydro The 5th Defendant, Hydro Properties Limited, a UK company incorporated on 30 April 2010
IF Ian Froome, partner of Vail Williams LLP, NGM's valuation expert
IoM Group The Isle of Man Holding company, of which Lizzano, Cascina and Soberano are subsidiaries
JL Jason Lewis, solicitor at Howard Kennedy
JG Joe Greevy, partner of Wheeler Group LLP, quantity surveyor expert for D2-D6
JD John Dyke, partner of Savills UK, and D2-D6's planning expert
JF John Frenkel, partner of Frenkels Forensics, business valuation expert for NGM
JM Justin Meredith, former employee of GHP, now founder and owner of Floodline Developments
JW James West, senior banker at Arbuthnot Latham Bank
Keltie A firm of Patent attorneys retained by NGM in 2007, and C's intellectual property expert (see Sean Cummings)
Kennet Kennet Properties Limited, a subsidiary of Thames Water, vendor of the Surbiton Site
Keystone Keystone Law Limited, NGM's and Filterbed’s lawyers
KM Kerry Martin, a director and shareholder of NGM
KR The 4th Defendant, Kevin Reardon
Larner Jaan Larner, a consultant corporate solicitor with Keystone
Lizzano The 2nd Defendant, Lizzano Limited, a company incorporated on 17 December 2009 in the Isle of Man
MdR Mishcon de Reya, solicitors for Lizzano at the time of the various transactions in and after January 2010
Morris Luke Morris, solicitor at MdR
ND Nicholas Davis, partner at MdR
NGM NGM Sustainable Developments Limited, a UK company incorporated on 13 October 2003 and the Claimant
PCT Application Patent Application relating to floating buildings, including a buoyant basement structure or platform for a floating building and the method of constructing such a structure
PR Peter Rutter, architect of PRC
PM Pinsent Masons LLP, solicitors on the record for D2-D6
PRC PRC Architecture and Planning, an architectural practice used by NGM
PS Peter Saunders, finance director of GHP from October 2009 to April 2011
PW The 1st Defendant, Phillip Wallis
RP Robert Parry, forensic accountant and partner at Baker Tilly, business valuation expert of D2-D6
RA-C Ruaraidh Adams-Cairns, partner of Savills UK and D2-D6's valuation expert
SC Sean Cummings, partner at Keltie, NGM's intellectual property expert
SG Stephen Gray, senior manager at Equiom and relationship manager for the IoM Group
Surbiton A 13 acre freehold site to the North West side of Portsmouth Road, Surbiton, Surrey, KT6 (HMLR title no. TGL139392
Wheatcroft Guy Wheatcroft, solicitor at RHY Law, Kennet’s conveyancing solicitor
Winllan Isle of Man group entity
NGM v Wallis & Others Defendants’ Chronology | |||||
---|---|---|---|---|---|
Date | Event | Reference | |||
12 January 2006 | CN writes to KM informing him that Zurich Insurance Building Guarantee are willing to provide a new home warranty insurance for flood resistant and floating structures. | E4/9A | |||
10 July 2006 | CN email to KM | Accepts offer to work for NGM as technical director | E4/16 | ||
14 September 2006 | KM email to CK | KM states currently writing up the agreement for CK’s investment | E4/22 | ||
18 December 2007 at 11:53 | EOS email to NGM shareholders | From Jan to April in discussions with Merrill Lynch – during this time “we managed to drag them from a valuation of NGM of £2million to £8million” but their offer was too low and existing investors would have seen shareholdings halved “and it would have given Merrill the opportunity to take full control of NGM” | E5/40-41 | ||
27 December 2007 | CN email to KM | First draft of Patent details | E5/46 | ||
29 January 2008 at 16:19 | Seam Cummings (Keltie) emails CN | “Patent applicant company can be anyone you like provided that we can establish a clear chain of title back to the individual inventor(s), by employment and/or assignment” | E5/110 | ||
14 February 2008 at 17:03 | Derek Holmes (Keltie) emails CN | Will assist in the “preparation of your Patent application” | E5/108 | ||
31 March 2008 at 19:06 | Derek Holmes (Keltie) emails | Asks a number of questions about the Patent application | E5/133 | ||
12 – 14 March 2008 | Email exchange KM and CK | KM looking for more investment from CK 13.08.08 email at 9:50 – “I and the entire NGM team are focus (sic.) on Liverpool and already have several deals for the fund but as it stands we can’t pay the consultants or the planning application. Not to mention that the fund is interested in buying Liverpool!!!!!!!” | E5/338-341 | ||
NGM v Wallis & Others Defendants’ Chronology | |||||
Date | Event | Reference | Date | ||
3 September 2008 at 11:23 | Email Tim Haggard to EOS, KM and JL | Information provided on “revised shareholdings”. | E5/372 | ||
9 September 2008 at 10:19 | Email from KM to CK | “I am now in the unfortunate position of not having taken pay for two months and having paid late invoices leaving NGM with almost no money in the bank and some bills still outstanding!!!” | E5/390 | ||
30 September 2008 at 16:21 | Email from KM to Lenus Veldman | “These are very difficult times I have very little money left and I have had to make sacrifices to pay the 9000 which should arrive in three days not my fault that’s how long the banks take!!!” | E5/440 | ||
19 December 2008 at 12:36 | Email KM to CK entitled “NGM strategy for 2009 and beyond” | Reference to KM and EOS taking more of a backseat role, CN considering reduction in salary and EOS looking for opportunities outside NGM. Ends with “However, in the short term (next month or two) we still need to sort out or arrange some kind of financing that will allow is to make the outstanding payments to all creditors so that we don’t run the risk of anyone trying to close us down”. | E6/211 | ||
30 December 2008 at 10:48 | Email KM to CK and JG entitled “Going forward …” | Proposals for reducing NGM’s overheads e.g. EOS becoming executive director and looking for alternative day-to-day job with reduction in salary | E6/225 | ||
14-15 January 2009 | Email exchange CK and KM | Email 14.01.09 from CK “with regards to the 20k cash injection. given where we stand, what i would like is the money to be a loan with attached equity options” Email 15.01.09 from CK “Whilst I am optimistic, I also have to be mindful of the amount of cash I have invested, and the time it will take to make a return on this risky equity” | E6/240-241 | ||
14 April 2009 | KM writes to CN setting out licensing payment rights. | E6/374a | |||
22 April 2009 | Keltie invoice to NGM requesting advance payment in respect of estimated costs of preparing and filing PCT application | E6/380 | |||
29 May 2009 at 11:18 | Email EOS to KM and GP entitled “agreeing terms” | Sets out terms on which GP would be engaged as CEO of NGM | E6/423 | ||
NGM v Wallis & Others Defendants’ Chronology | |||||
Date | Event | Reference | |||
29 June 2009 | EOS meets with James West (of Arbuthnot Latham) | E7/74 | |||
29 July 2009 at 17:54 | Email James West to EOS and GP | “I have been talking to a client of mine who owns his own commercial property business and he is keen to meet you to discuss in more detail” | E7/74 | ||
30 July 2009 at 10:32 | Email CN to Michael Johnson (Kingston) cc.EOS | Enquires about Surbiton Site. | E7/158 | ||
30 July 2009 at 13:08 | Email CN to KM and EOS | Queries when unpaid wages will be paid and states “In May I agreed to accept half my wage in the interim to assist cash flow and get my remaining wages as a back payment … Can you confirm that I (sic.) the £25,333.34 (Less Tax & NI) in outstanding wages when we get investment into the company (Or tax rebate)”. | E7/159 | ||
August 2009 | CN’s work dwindles to such an extent that KM and EOS encourage him to look for work elsewhere. | B2/153/15 | |||
6 August 2009 | KM, EOS (and possibly GP) meet PW at GHP's office | ||||
7 August 2009 at 11:33 | Email EOS to PW (cc. KM, GP and James West) | Refers to presentation given on 06.08.09 and states that will send a confidentiality agreement as well as information on the “key pipeline deals” | E7/163 | ||
10 August 2009 at 10:19 | Email KM to SD | “I think we should wish them the best of luck and leave it at that as we have bigger fish to fry” | E7/165 | ||
11 August 2009 at 12:30 | Email EOS to PW | Attaches non-disclosure agreement and CVs for KM, CN and EOS. | E7/172 | ||
ATTACHMENT | CN's CV | E7/174-179 | |||
11 August 2009 | Letter constituting NGM's Non-Disclosure Agreement signed by PW for and on behalf of GHP Securities Limited. | E7/168-169 | |||
NGM v Wallis & Others Defendants’ Chronology | |||||
Date | Event | Reference | Date | ||
11 August 2009 | Email exchange EOS, Tim Johnson and Felix Rigg (King Sturge LLP) | EOS sends document relating to NGM’s interest in the Surbiton site and receives response drawing attention to planning difficulties | E7/180-181 | ||
18 August 2009 at 14:13 | Email EOS to PW | Attaches brief description of “the key pipeline deals NGM are working on at the moment”. EOS states that he will send the “new” numbers / financials from BDO as soon as he gets them. | E7/190 | ||
21 August 2009 | Printout of NGM Nominal Activity showing loans made to NGM | E7/194 | |||
27 August 2009 at 17:06 | Email EOS to KM, CN and GP | Reporting conversation with Kingston Council planning department. EOS proposes low-key development of 40 units (less than 3 units per acre). Identifies main hurdles to overcome – public access, a new Thames Riverside walk, endangered species and nature conservation. Response from CN – “I think we could achieve at least min £375k-£425k/unit in this area for a detached house” | E7/199-200 | ||
Table showing NGM debts | E7/206 | ||||
4 September 2009 at 17:03 | Email CT to EOS | “Hi I am sure you will not have forgotten that the bid date is now only a week away. How are things looking will you be able to make an unconditional offer? Regards Crispin”. | E7/209 | ||
4 September 2009 at 17:17 | Email EOS to CT | “We’re in dialogue with the planners at the moment … I am hopeful we will submit something to them”. EOS queries whether the due date for the bid is 21st. CT confirms it is Friday 11th. | E7/209 | ||
7 September 2009 at 11:33 | Email PW to KM | PW expresses interest in NGM's product but expresses concerns regarding NGM's overheads and any expectation by NGM that GHP will fund salaries. | E7/215 | ||
7 September 2009 at 12:32 | Email KM to PW | “Quite frankly based on our first meeting I always anticipated you would raise this (sic.) concerns regarding the overheads” | E7/218 | ||
11 September 2009 | Invitation for best bids on Surbiton Site by 21.09.09 | E7/226 | |||
NGM v Wallis & Others Defendants’ Chronology | |||||
Date | Event | Reference | |||
16 September 2009 | Email Simon Burns (BDO) to PW | NGM Investor presentation attached to email | E7/232 | ||
ATTACHMENT | NGM Investor Presentation | E7/233-273 | |||
16 September 2009 at 14:40 | Email PW to KM | Email attaches proposal letter. | E7/274 | ||
ATTACHMENT | Letter setting out GHP's proposal to invest in NGM. Explains preference to set-up an SPV rather than investing in NGM directly. Proposal addresses three possible sites for investment including the Surbiton Site. | E7/230-231 | |||
17 September 2009 at 8:22 | Email KM to CK | KM sends GHP’s proposal letter to CK. | E7/290 | ||
17 September 2009 at 9:58 | Email CK to KM | “I took a look at this offer [GHP’s proposal] and I think its egregious … by the time you pay the interest and 50% of whatever profit is left … there is going to be nothing left. I think you will be able to do much better than this … though at least it’s a fall back position” | E7/289 | ||
17 September 2009 at 16:59 | Email KM to PW | Acknowledges proposal letter. Asks whether management / NGM fees and time would be seen as project overhead costs. | E7/274 | ||
18 September 2009 at 8:54 | Email PW to KM | “I think it would be reasonable to agree a project management fee for NGM on the way through. Other professional costs relating to the project will be part of the P&L numbers”. | E7/287 | ||
21 September 2009 | NGM makes unconditional offer of £500,000 subject to contract re. Surbiton. | E7/286 | |||
23 September 2009 at 14:41 | Email Paul Duckworth (BDO) to CN, EOS and KM | Reports that HMRC have agreed a tax credit for 2008 for NGM of £61,968 | E7/291 | ||
NGM v Wallis & Others Defendants’ Chronology | |||||
Date | Event | Reference | Date | ||
23 September 2009 at 16:50 | Email CT to EOS | Reports that NGM’s offer is not the highest on an unconditional basis | E7/293 | ||
27 September 2009 at 15:34 and 16:46 | Emails CN to EOS and KM | Attaches expenses for July to September. “You will see that the total for Apr to date is £927.43, I really could do with some money being paid to clear my expenses, up to Jul at least”. | E7/299-300 | ||
Sets out total outstanding wages calculated by reference to reduced pay of £38,579.14 | E7/301 | ||||
29 September 2009 at 10:58 | Email James West to EOS | Asks for update on how EOS is getting on with PW | E7/304 | ||
2 October 2009 at 2:07 | Email EOS to PW | Expresses wish to continue discussions between NGM and GHP- “…once we conclude the ongoing negotiations [with Ability Group for the Hilton hotel development in Portsmouth] we can sit down and thrash out a deal”. | E7/330 | ||
7 October 2009 at 13:51 | Email PW to KM | Response to KM’s email of 06.10.09 “Thanks for this and I look forward to hearing from you when appropriate” | E7/334 | ||
12 October 2009 | Denis O’Sullivan (SeaFront) to EOS cc SD | Advises KM that it would not be feasible for SeaFront to raise a funding package “at this time” | E7/379-381 | ||
12 October 2009 at 12:56 | Email EOS to PW | Provides details of potential site in Huntingdon | E7/347 | ||
12 and 13 October 2009 | Email exchange CT and EOS | 18:12 email CT to EOS – “Hi I spoke to Tony Chalkley they have £1.25m approx. top offer which they are proposing to run with, Might be able to compete if we were at say £1.0m with an overage Regards Crispin” | E7/344 | ||
19:23 email EOS to CT – “We can definitely do something around that level” | E7/344 | ||||
9:09 email CT to EOS - “Need to move quite quickly I think” | E7/344 | ||||
NGM v Wallis & Others Defendants’ Chronology | |||||
Date | Event | Reference | Date | ||
13 October 2009 at 10:27 | Email PW to EOS | In response to email from EOS re. potential site in Huntingdon PW states happy to discuss further | E7/346 | ||
13 October 2009 at 10:29 | Email EOS to PW | EOS explains that NGM offered on an unconditional basis £500,000 to purchase the Surbiton Site but that this has been rejected. Thames Water has asked whether NGM would be interested in a deal for £1 million, with overage if planning is successful. | E7/346 | ||
13 October 2009 | Email exchange EOS, CK and JG | 15:55 email EOS to JG cc. CK – “What we require is an investment of £2million in order to buy the land and take it through planning. Then, depending on the number of units we can develop there is an additional need for equity for the construction phase (we’re assuming 50/50 equity/debt split” | E7/357-358 | ||
16:42 email CK to EOS and JG – CK queries proposed size of house and the cost of planning | E7/356-357 | ||||
15:49 email JG to CK and EOS – JG states cannot assume 50/50 debt finance “The best operators are struggling to get that, why would we?” | E7/356 | ||||
14 October 2009 | Email exchange EOS, CK and JG | 9:50 email EOS to CK and JG – updated documents sent | E7/363 | ||
10:08 email CK to EOS and JG – suggests putting numbers around the ‘worst case scenario’ and mentioning that plot has attracted a £1.25m bid in its current state | E7/363 | ||||
09:29 email JG to CK and EOS – “What is Geoff’s status Espen? I have noticed he is not on the website anymore” | E7/363 | ||||
09:50 email EOS to JG and CK – “As for Geoff, he is very keen to get this underway as he wants to get involved” | E7/364 | ||||
14 October 2009 | Email exchange EOS and PW | 12:26 (or 13:27) email EOS to PW - Repeat request from EOS regarding possible deal with Thames Water at £1 million with overage. Attaches a pack setting out expected profit levels. | E7/368 | ||
17:01 email PW to EOS – “Surbiton only works on an unconditional basis if the existing dwelling/consent gives a payback of all capital if planning were not to be achieved … On this basis please send through the numbers for the fall back position as the bigger picture is clear to see and very interesting” | E7/372A | ||||
19:18 email EOS to PW – “Thanks for your feedback. I am waiting to hear back from our planning consultants (who have done developments with the Council before) as to what certainty there is on the fallback position … I’ll send over the numbers on the fallback position tomorrow” | E7/372B | ||||
15 October 2009 at 11:27 | Email EOS to GP | “Here is the latest document that Phillip has seen, plus two spreadsheets, one showing his and NGM’s potential return and one showing the fallback position assuming we only get planning to redevelop the Pump House” | E7/373A | ||
15 October 2009 at 12:40 | Email EOS to GP | EOS queries how to respond to PW’s request for numbers on the fallback position. | E7/373B | ||
15 October 2009 at 14:06 | Email EOS to PW cc. Geoff Potton | Confirmation from EOS that NGM will make an unconditional offer of £1 million plus overage. Email also outlines various 'fall-back' options to derive value from the Surbiton Site in the event that planning is unsuccessful. | E7/374A | ||
16 October 2009 | Email exchange KM and CK | CK requesting exact details of GHP’s offer including all conditions for working capital etc. KM replies attaching GHP’s proposal and “the document that Espen used this week to get them interested in Surbiton for real”. | E7/383 | ||
16 October 2009 | Email exchange KM, EOS and CK cc. JG | EOS states “The key thing at the moment is that GHP are keen on Surbiton and I have agreed that we can use their name in the offer document I have to sent to Thames Water’s agents on Monday before midday” CK queries whether GP and “the ghp guys” have reviewed the offer letter | E7/384-385 | ||
19 October 2009 | Email exchange KM and CK | CK asks whether KM has negotiated NGM’s fees with GHP as he does not want to be in the same position with “back costs” | E7/397 | ||
19 October 2009 | Written unconditional offer made by NGM to Grant Mills Wood to purchase the Surbiton Site for £1m. | E7/399 | |||
21 October 2009 | Written unconditional offer made by NGM to Grant Mills Wood to purchase the Surbiton Site for £1.3m. | E7/403 | |||
NGM v Wallis & Others Defendants’ Chronology | |||||
Date | Event | Reference | Date | ||
21 October 2009 at 15:32 | Email SD to KM and EOS | “As promised I now have a reply from my Greek friends … I am afraid that they have decided that they will not be investing in NGM at this moment in time” | E7/404A | ||
23 October 2009 at 10:04 | Email from CT to EOS | “In view of our last minute increases, and in the aim of fairness he is advising his client to go back to the final 3 inc you for a last best and final round probably next week” | E7/407A | ||
28 October 2009 at 10:35 | Email EOS to PW | “For discussion with Kerry and Geoff …” | E7/415A | ||
ATTACHMENT | Written unconditional offer made by NGM to Grant Mills Wood to purchase the Surbiton Site for £1.65m. | E7/414 | |||
28 October 2009 | Email CN to KM | Requests payment of outstanding expenses and asks whether he could be paid a month’s salary out of the tax rebate | E7/417 | ||
30 October 2009 | Email Tony Chalkley (Grant Mills Wood) to CT, cc. KM and EOS | Acceptance of NGM’s offer of £1.65m plus overage | E7/422 | ||
30 October 2009 at 16:11 | Email KM to PW | Email forwards email from Tony Chalkley confirming acceptance of NGM’s offer. | E7/423 | ||
30 October 2009 | KM and EOS meet PW and KR | ||||
2 November 2009 at 10:29 | Email KM to PW | Email begins "It was good to meet Kevin on Friday and as we discussed I [sic] please see the attached documents." | E8/8 | ||
ATTACHMENT | Technical Specification for Floating Basement | E8/9-16 | |||
2 November 2009 at 10:30 | Email KM to PW | Email attaches mortgage approval letters. | E8/17 | ||
NGM v Wallis & Others Defendants’ Chronology | |||||
Date | Event | Reference | Date | ||
3 November 2009 at 12:41 | Email AM to SG | “Plse pass [email from KM] to Kevin” | E8/48 | ||
2 November 2009 at 16:00 | Email PW to KM | “The mortgage approval letters are three years old and the world is now a very different place. Do you have anything from the Council of Mortgage Lenders. Also can you get the HBOS etc letter’s up dated to current time” | E8/27 | ||
2 November 2009 | Emails KM to NGM creditors | Explains that GHP is buying the site for NGM to develop. States NGM has an agreement with GHP whereby they have a loan facility for £4m. “This is going to allow NGM to survive as we will be able to drawn (sic) down some monies for working capital” | E8/21-22 | ||
3 November 2009 at 13:59 | Email Tony Chalkley to EOS | Will be issuing Heads of Terms today “Let’s hope we can proceed to an early exchange of contracts” | E8/50 | ||
3 November 2009 at 15:33 | Email Tony Chalkley | Head of Terms sent | E8/56 | ||
ATTACHMENT | Heads of Terms for sale of Surbiton | E8/57-60 | |||
3 November 2009 at 15:53 | Email EOS to Tony Chalkley | Explains that GHP will be funding the purchase of the site with NGM. “Phillip Wallis is the contact person” | E8/53 | ||
4 November 2009 at 9:45 | Email EOS to PW cc. JL (at Howard Kennedy) | Update on progress of negotiations with Thames Water. Records that Thames Water has elected to charge VAT on the sale of the Surbiton Site. | E8/64 | ||
4 November 2009 at 11:52 | EOS to GP, PW and CN | Confirmation that Thames Water will meet on site on 9 November 2009 for "a proper walk around". | E8/72A | ||
4 November 2009 at 13:27 | Email EOS to KM and GP | Email states that NGM will need PW to supply some comfort as to GHP’s ability to conclude the deal | E8/74 | ||
NGM v Wallis & Others Defendants’ Chronology | |||||
Date | Event | Reference | Date | ||
4 November 2009 at 13:41 | Email EOS to Toby Chalkley | Email states that NGM will get GHP and Howard Kennedy to confirm that the funds are readily available | E8/75 | ||
4 November 2009 at 16:30 | Email EOS to David Blakeman (Howard Kennedy) | Confirmation that NGM using Jason Lewis at Howard Kennedy | E8/77 | ||
4 November 2009 at 17:14 | Email EOS to GP and KM | “Looking at the financials for Surbiton based on the sale figures we discussed yesterday, Thames Water will get one hell of an overage payment if we get up to 60 units on the site …” | E8/87 | ||
4 November 2009 at 17:32 | Email JL to EOS and PW | Refers to starting to receive documents for the Surbiton transaction. Asks when EOS and PW free to go through the transaction generally. | E8/93 | ||
5 November 2009 at 9:33 | Email CK to KM, GP and EOS | CK asks whether any help is needed on deal structure | E8/91 | ||
5 November 2009 at 9:51 | Email EOS to CK, KM and GP cc. JG | “The next step obviously involves creating the right structure with Phillip, I would imagine it ends up as a new SPV with a loan facility from GHP Securities (or a related company) but we’ve yet to hear back from Phillip on this” | E8/92 | ||
5 November 2009 at 11:32 | Email PW to JL and EOS | “Sorry guys but I am totally swamped with something at the moment. Jason can you please liase (sic) with Sam to sort meeting as I am now unable to do Wednesday” | E8/101 | ||
9 November 2009 | Meeting at Surbiton Site – in attendance: KM, EOS, PW and CN | ||||
10 November 2009 at 10:10 and 10:44 | Email exchange Guy Wheatcroft (at RHY Law) to Jason Lewis (at Howard Kennedy) cc. EOS, KM and PW | Confirms meeting on site on 09.11.09 and list of questions posed by NGM / GHP regarding the Surbiton transaction. | E8/144A-C | ||
NGM v Wallis & Others Defendants’ Chronology | |||||
Date | Event | Reference | |||
12 November 2009 | International publication date for PCT application | E8/169-173 | |||
19 November 2009 at 10:22 | Email Simon Burns (BDO) to EOS | Cash flow summary for Surbiton attached to email | E8/255 | ||
ATTACHMENT | Cash flow chart for Surbiton | E8/256-260 | |||
19 November 2009 at 16:22 | Email EOS to PW | Email chasing proof of funds for purchase of Surbiton Site requested by Thames Water. | E8/275 | ||
20 November 2009 at 10:37 | Email EOS to CK, KM and GP | “Thames Water are still aiming to exchange contracts next week, but this is very unrealistic as they still haven’t responded to our queries relating to the exact site boundaries etc … Also, moving forward, the discussions with Phillip has been around NGM setting up a new SPV with no ownership of that SPV for GHP, GHP will then lend the monies directly to the SPV with deferred fees based around 15% coupon and 50% of profits” | E8/274 | ||
23 November 2009 at 19:21 | Email PW to PS cc. GP | PW asks Ciaran to respond asap to an email sent by GP to PW on 23.11.09 at 18:53. GP's email explains that he has had "an excited" KM on the phone saying that Thames Water's agent no longer takes seriously NGM's offer to purchase the Surbiton Site, due to the absence of a banker's letter. | E8/295 | ||
24 November 2009 | Meeting to discuss Surbiton – in attendance: KM, GP, JM, PRC Architects and planners | E8/304-306 | |||
24 November 2009 at 11:48 | Email from EOS to JM | Email refers to meeting and conversations with KM this morning and attaches “requested information” regarding the Surbiton “opportunity”. Sets out a list of main assumptions. | E8/296 | ||
24 November 2009 at 16:18 | Email GP to PW cc. EOS and KM | Refers to “good meeting” with the planners this morning. Refers to fallback position that ensures we will at least be able to create 14 moorings at a value of £300k each or £4.2m. | E8/310 | ||
NGM v Wallis & Others Defendants’ Chronology | |||||
Date | Event | Reference | Date | ||
24 November 2009 at 20:49 | Email JM to KM | JM states that he has very briefly told PW the feedback from the meeting and will be preparing a briefing note for PW and KR. | E8/315 | ||
25 November 2009 at 16:24 | Email AM to Ciaran Lawlor cc.PS | AM states that she has no hesitation recommending that the required information is released to allow letter of comfort to be sent | E8/330 | ||
26 November 2009 at 14:23 | Email AM to Ciaran Lawlor | “You are in control of this structure and you make the decisions. I will leave a message for Kevin to call you to confirm that he is happy with your decision to send this information but that is all he can do … I am not aiming this at you personally but you must see how strange it seems to us that after all these years, you now start asking for ‘authorisation’ over such comparatively trivial matters, when the decision to act or not is down to you” | E8/329 | ||
26 November 2009 | Letter from Standard Bank Trust Company (Isle of Man) Limited as trustees of the ‘K’ Trust to Tony Chalkley stating that the ‘K’ Trust is the majority shareholder of a number of companies included GHP and has a net asset value of £36.8m. | E8/335 | |||
27 November 2009 at 08:07 | Email PS to PW | Email attaching letter from Standard Bank. | E8/350 | ||
ATTACHMENT 26 November 2009 | Standard Bank Trust Company (Isle of Man) Limited as trustees of the 'K' Trust | Letter to Grant Mills Wood confirming that the 'K' Trust has a net asset value of £36.8 million and is the majority shareholder of a number of companies including GHP. | E8/335 | ||
27 November 2009 at 13:01 | Email KM to PW | “I look forward to seeing you at 2 just thought these doc’s would be of use …” | E8/352 | ||
ATTACHMENT | NGM document entitled "Current Position" provides a summary of the planning issues surrounding the development of the Surbiton Site. | E8/354-355 | |||
ATTACHMENT | NGM document entitled "Our Approach" which outlines NGM's Phase 1 and Phase 2 of its development of the Surbiton Site. | E8/356-360 | |||
NGM v Wallis & Others Defendants’ Chronology | |||||
Date | Event | Reference | Date | ||
30 November 2009 at 15:24 | Email KM to PW and JL | KM forwards email from Tony Chalkley at Grant Mills Wood exerting pressure to exchange contracts on the Surbiton Site "this Wednesday". | E8/368-369 | ||
30 November 2009 at 16:08 | Email EOS to PW and JM | Attaches spreadsheet showing the “worst-case” scenario following last week’s meeting with the planners | E8/374 | ||
ATTACHMENT | Spreadsheet setting out revised Surbiton figures | E8/375-378 | |||
30 November and 1 December 2009 | Email exchanges between KM, PW, EOS and JL | Email chain highlights pressure exerted by Thames Water and subsequently by KM to progress the sale and purchase of the Surbiton Site. | E9/2-8 | ||
1 December 2009 at 12:35 | Email JL to KM, PW and EOS | Asks for "help" in the light of email forwarded from Guy Wheatcroft at RHY Law pressing JL to agree the contract for the Surbiton Site "this afternoon" so that exchange can take place "this Friday". | E9/3 | ||
1 December 2009 at 20:16 | Email GP to PW cc. KM | Refers to the "great pressure" on NGM to exchange contracts "by no later than Friday", and seeking to prompt a substantive reply from PW. | E9/8 | ||
3 December 2009 at 9:54 | Email Tony Chalkley to KM cc. PW, EOS, various people at Thames Water and BNP Paribas | Tony Chalkley records a difference in stated position between KM – who indicates that the terms of the contract for the Surbiton Site are agreed – and Jason Lewis who states that there are still outstanding issues between the parties. Tony Chalkley threatens to revert to the under bidder in the event that contracts are not exchanged "tomorrow". | E9/14 | ||
4 December 2009 at 16:34 | Email GP to Jason Lewis, cc. KM and EOS | GP refers to a meeting between PW and Jason Lewis – “would appreciate your confirmation of what still needs to be done and the likely timescale” | E9/48 | ||
9 December 2009 at 17:25 | Email JM to Tony Chalkley | Refers to very positive meeting with PW, the need for a board meeting and expectation to issue instructions to proceed | E9/74 | ||
NGM v Wallis & Others Defendants’ Chronology | |||||
Date | Event | Reference | Date | ||
9 December 2009 at 17:29 | Email Tony Chalkley to JM | “I am not sure what now needs Board approval but all I can say is that unless we see an exchange this week I will be instructed to speak to the under bidders which I certainly don’t want to do” | E9/75 | ||
9 December 2009 at 17:37 | Email KM to JM and PW cc. EOS and GP | KM states that "the opportunity to close this deal is on a knifes edge". K Martin forwards e-mail from Tony Chalkley on 9 December 2009 at 13:40 expressing the wish of Thames Water to exchange contracts "today". | E9/75A | ||
9 December 2009 and 10 December 2009 | Email exchange between JL and PW | Email from JL requesting instructions in the light of further pressure from Guy Wheatcroft (at RHY Law) on 9 December 2009 at 16:39 to settle the contracts "by tomorrow morning." Jason Lewis states that he hasn't looked at any of the documents yet. PW instructs Jason Lewis to proceed, and Jason replies saying that Howard Kennedy need a "proper time" in which to consider the transaction documents. | E9/75B-C | ||
10 December 2009 at 16:29 | Email JL to Guy Wheatcroft cc. PW, JM, EOS and KM | JL confirms that Howard Kennedy now have instructions to proceed and that he will revert on the contract sometime on 11 December 2009. | E9/81 | ||
11 December 2009 at 16:05 and 16:07 | Email exchange JL and EOS cc. KM, GP, JM and PW | EOS requests JL to make clear to Guy Wheatcroft that NGM is fully committed to closing the Surbiton Site purchase as soon as possible. EOS expresses the view that, unless this is done that afternoon, there is a danger of losing the deal. In response JL states that there is nothing much he can do other than to repeat that Howard Kennedy has instructions to proceed. | E9/88 | ||
11 December 2009 | Consultation with John Hobson QC – in attendance: PW, JM, GP and Andy Riley of PRC. | E9/84-86 | |||
13 December 2009 at 12:16 | KM to GP, PW, EOS and JM | KM forwards exchanges between JL and Guy Wheatcroft squabbling over the timing of exchange and states: "We need to nip this in the butt or these idiots are going to blow my deal!!!!" | E9/95-96 | ||
NGM v Wallis & Others Defendants’ Chronology | |||||
Date | Event | Reference | Date | ||
14 December 2009 at 12:04 | PW to KM, EOS and GP cc. JM | PW sets out his agenda for a meeting the following day. This agenda includes the development of the Surbiton Site, the deal between GHP and NGM, the “copyright issues on system / technology – corporate link and the corporate structure. | E9/99 | ||
15 December 2009 | Meeting between EOS and possibly KM and PW | ||||
15 December 2009 | Email Pamela Munday (Howard Kennedy) to Guy Wheatcroft cc. JM, PW, KM | Attaches amended contract of sale | E9/112 | ||
ATTACHMENT | Contract for the sale of Surbiton with Jason Lewis amendments | E9/113-130 | |||
16 December 2009 at 10:49 | Email EOS to PW cc. KM and GP | Attaches “headline numbers and cash flow summary” as discussed at meeting on 15.12.09 | E9/146 | ||
ATTACHMENT | Surbiton figures and cash flow | E9/147-155 | |||
16 December 2009 at 11:13 | Email JM to PW | JM forwards email from KM to CT at BNP Paribas and Tony Chalkley at Grant Mills Wood on 16.12.09 at 10:45 in which KM states that PW is speaking with Jason Lewis "today" to name the SPV and to "set up" its loan agreement. | E9/158A | ||
17 December 2009 | Lizzano Limited incorporated | ||||
17 December 2009 at 11:33 | Email Samantha Leonard (GHP) to KM and PW | Email attaches letter from GHP. | E9/180 | ||
ATTACHMENT 17 December 2009 | GHP to "Whom it May Concern" | Letter in which GHP states that it has agreed to finance NGM on the purchase and development of the Surbiton Site. Records a further agreement by GHP to release £60,000 to NGM upon completion of an unconditional completion of the freehold title. The letter states that contracts are being drawn-up and completion is expected early in 2010. | E9/183 | ||
NGM v Wallis & Others Defendants’ Chronology | |||||
Date | Event | Reference | Date | ||
20 December 2009 at 21:21 | Email KM to JL | Refers to Surbiton as “my deal that has been and is in serious danger of failing!” | E9/194 | ||
20 December 2009 at 21:47 | Email JL to KM | “I am afraid there is little I can do without instructions from Phillip” | E9/194 | ||
21 December 2009 at 13:41 | Email PW to KM cc. EOS and GP | PW requests information about Surbiton | E9/201 | ||
22 December 2009 at 10:32 | Email KM to PW | KM provides information about Surbiton ahead of meeting tomorrow | E9/206 | ||
22 December 2009 at 10:56 | Email GP to PW cc. EOS and KM | GP suggests a pre-meeting at 09:00 before Tony and Guy arrive “to ensure we are all singing from the same hymn sheet” | E9/207 | ||
23 December 2009 | Meeting – in attendance: PW, EOS, KM, GP | ||||
23 December 2009 at 11:36 | Email JL to KM and PW | JL states that Howard Kennedy cannot act for both parties on the loan documentation because of the inevitable conflict. | E9/209 | ||
23 December 2009 at 13:49 | Email PW to AM cc. PS, SG and others | PW states that £165,000 should be sent to Howard Kennedy to hold to order as a gesture to Thames Water that NGM is serious with the purchase of the Surbiton Site. | E9/210 | ||
23 December 2009 at 13:53 | Email AM to PW | “Don’t know what you are talking about. Call me on the mobile in about an hour - doing something urgent right now” | E9/211 | ||
23 December at 14:17 | Email EOS to PW cc. KM | “I thought the meeting went well, and we appreciate your efforts in trying to stick to what is a fairly tight timetable, and I am sure we can get everything sorted” | E9/212 | ||
29 December 2009 | Filterbed incorporated as a wholly owned subsidiary of NGM. | E9/225 | |||
NGM v Wallis & Others Defendants’ Chronology | |||||
Date | Event | Reference | Date | ||
30 December 2009 at 16:22 | Email KM to JL, PW and GP cc. a second Howard Kennedy lawyer | KM states that Filterbed has been set-up, and that NGM's lawyers will be available from 04.01.10 to "sort out" the loan agreement. | E9/234 | ||
31 December 2009 at 16:14 | Email SG to PS cc. AM and Aidan Davin | Following on from the change of trustee and directors of the various IoM entities SG provides an update on activities which have been undertaken so far. This includes: “Recommendation from Phillip to transfer £165,000 from Winllan Limited to Thames Water” | E9/240-241 | ||
31 December 2009 at 17:00 | Email from AM to SG, PS and Aidan Davin | Email states that AM will need to input on points 4(b) and 4(e) – the latter being the recommendation from PW to transfer £165,000 from Winllan Limited to Thames Water” | E9/243 | ||
31 December 2009 at 17:02 | Email from AM to PS | “What’s the money re Thames Water for? Under what contract is it payable? Plse discuss on Tuesday (I am only starting back then)”. | E9/245 | ||
4 January 2010 at 12:52 | Email EOS to JL, KM and PW | KM [using EOS' e-mail address] confirms Filterbed as the SPV to purchase the Surbiton Site. | E10/6 | ||
4 January 2010 at 14:01 | Email JL to Guy Wheatcroft cc. PW, KM, EOS, Tony Chalkley and others | JL confirms Filterbed as the buyer of Surbiton Site and requests an engrossed copy of the contract. | E10/8 | ||
5 January 2010 | Email EOS to Jaan Larner | EOS confirms that the contract for the purchase of Surbiton has been agreed and is being engrossed. “Furthermore, GHP wants to meet up for half a day at some point this week to sort out the loan agreement between us. We’ll know later on today what time they propose, but I am hoping that they will send us a draft proposal prior to the meeting anyway” | E10/10 | ||
5 January 2010 between 10:39 and 13:04 | Email exchange between JL and PW | E-mail chain starting at 10:39 when PW states the need to organise the corporate deal with NGM, and raises the possibility of securing the Patent. PW later asks for and receives from Jason Lewis confirmation as to the deposit required to purchase the Surbiton Site. | E10/15 | ||
NGM v Wallis & Others Defendants’ Chronology | |||||
Date | Event | Reference | Date | ||
5 January 2010 at 10:57 | Email PW to PS cc. AM | “Below are the areas for discussion with myself and Kevin later; please update yourself on points 1,2,3 & 5 before we meet”. Entitled “Heads of discussion re Winllan cash” – one agenda item is “Could/shout this money be used for Surbiton deal or others” | E10/12-13 | ||
5 January 2010 at 12:56 and 12:58 | Email exchange between ND and Simon Tracey (MdR) | ND asks “Are you around for a possible meeting on Thursday afternoon (weather permitting) relating to a new deal which includes an acquisition of a Patent?”. Simon Tracey replies that he is around for a meeting. | E10/22-23 | ||
5 January 2010 at 13:03 | Email ND to Luke Morris (MdR) | “There is a new deal for Winlan (a joint venture) which includes loan agreements. I know you are very busy so please can you let me [know] whether you can make a meeting on Thursday but more importantly whether you will have capacity to help in the next two weeks (likely to kick off next week)” | E10/24 | ||
5 January 2010 at 16:17 | Email AM to PS and PW | AM requests conversation to “sort out the Surbiton transfer and approvals etc” | E10/30 | ||
6 January 2010 at 09:27 | Email KM to PW | KM asks PW if the deposit is being sent from the Isle of Man, where it is and "if tomorrow is on". | E10/31A | ||
6 January 2010 at 12:14 | Email CK to EOS, KM and GP | CK asks whether NGM have the loan documents yet | E10/41 | ||
7 January 2010 at 9:26 | Email James West to GP, EOS and KM | James West increasingly frustrated and annoyed that NGM not come back with an offer re. his finder’s fee for the deal “that Phillip is transacting with you and any future deal that he may do” | E10/72 | ||
7 January 2010 at 10:06 | Email ND to Simon Tracey (MdR) | “If one of them could be there – probably the one with the better knowledge of assigning Patents” | E10/73 | ||
7 January 2010 | KM signed the contract and returned the same to Howard Kennedy on route to a meeting at MdR with EOS, GP and JL. Meeting at MdR Offices – in attendance: KM, EOS, JP, JL and PW, Jaan Larner, ND and Luke Morris | E10/74 E14/10-11 | |||
7 January 2010 at 19:59 | Email EOS to PW cc. KM and GP | EOS refers to meeting earlier today, emphasises the need to avoid further delays and to close the deal "by early next week at the latest". | E10/80 | ||
8 January 2010 between 14:38 and 15:02 | Email exchange between ND and PW | ND states that he has received a voicemail message from KM wanting confirmation that the documents will be with him "for Monday" otherwise Thames Water do not want to do the deal. PW responds: "Just say you will do your best - he is being a bit manic. They won't pull out for a day or two". | E10/88 | ||
8 January 2010 at 16:46 | Email PW to Sheilagh Giddings | Email attaches letter from PW to KR. Email states that the letter should be printed and passed to KR. | E10/91 | ||
ATTACHMENT | Letter from PW to KR | E10/92-95 | |||
8 January 2010 at 17:09 | Email Sheilagh Giddings to AM | Forwards PW’s letter to AM | E10/96 | ||
11 January 2010 at 09:41 | Email EOS to ND cc. Luke Morris and Jaan Larner | Email providing technical information on the Patent and requesting loan documentation. "We understand from Phillip that we should be expecting the interim loan agreement shortly, when you expect to be in a position to sending something over?" | E10/104 | ||
ATTACHMENT | 6-page description of Patent and 2 pages of drawings | ||||
11 January 2010 at 09:44 | Email ND to PW cc. Luke Morris and Mary Guinness (IP lawyer at MdR) | ND forwards email from EOS asking for confirmation when the interim loan agreement would be circulated for review. | E10/105 - 106 | ||
ATTACHMENT | 6-page description of Patent and 2 pages of drawings | ||||
11 January 2010 at 10:43 and 10:46 | Email exchange between PW and Guy Wheatcroft | PW states that the loan documentation "is being settled as we speak" and that NGM are committed to exchanging asap. Guy Wheatcroft subsequently welcomes this statement but presses PW to provide a more certain timeframe. | E10/118 | ||
11 January 2010 at 11:05 | Email Jaan Larner to ND cc. EOS | Chasing e-mail: "...can you confirm when we will receive the draft loan agreement". | E10/114 | ||
11 January 2010 at 11:10 | Email PW to Guy Wheatcroft | PW explains that new trustees in the Isle of Man (Equiom) need to approve the documents. PW indicates that this should hopefully be "tomorrow or Wednesday" and that there is nothing more that he can do. | E10/118 | ||
11 January 2010 at 11:08 and 11:10 | Email exchange between PW and ND | ND forwards Jaan Larner’s chasing email. PW replies: “Can you just say you are awaiting Isle of Man approval which is expected today. Hope to get Alison later” | E10/116 | ||
11 January 2010 at 12:26 | Email ND to Jaan Larner | “I have spoken to Phillip and he is awaiting Isle of Man approval which is expected today. I can then revert back to you on timing” | E10/125 | ||
11 January 2010 at 15:57 | Email PW to KM cc. EOS and GP | Email attaches draft letter with proposed terms “as discussed”. Email explains that risk profile has grown and PW proposes a different share of the rewards for non residential to reflect the risk profile of the deal as it now stands “and frankly to encourage more to get the residential permission”. | E10/140 | ||
ATTACHMENT | Draft Subject to Contract letter: “This letter is separate from the Loan agreement date … and sets out the remuneration agreement between the parties. This letter is given as a record of the intention between the Parties, but it is not a legal document and is therefore subject to completion of all loan documentation referred to above”. | E10/141-142 | |||
11 January 2010 at 16:06 | Email KM to PW | KM states “I have no objections to the terms set out in the letter. Can you please advise me of the next steps and time scales. Do you need me to sign this letter?” | E10/143 | ||
11 January 2010 at 16:09 | Email EOS to Jaan Larner | Forwards PW’s email of 11.01.10 at 15:57 and states “At least this is a start …” | E10/144 | ||
12 January 2010 at 10:52 | Email EOS to PW | Asks whether any news from MdR or the trustees on how they are getting on with the loan agreement. | E10/149 | ||
12 January 2010 at 14:37 | Email Jaan Larner to ND and EOS | "Are you in a position to give us an update on when we can expect to see the loan documentation?" | E10/152 | ||
12 January 2010 at 15:16 | Email ND to PW | “Just to let you know that they are chasing me." | E10/154 | ||
13 January 2010 at 9:26 | Email GP to EOS cc. KM | Comments on email from EOS of 12.01.10 at 18:06 reporting back from meeting with James West and states: “I suppose the likelihood (sic.) of us doing another deal with Phillip are fairly remote so ok with the last para”. Ends stating “We will need to amend the spreadsheet you sent Phillip as the amount now payable to James is more than we estimated. We don’t want this to come out of the £60k” | E10/155 | ||
13 January 2010 at 11:39 | Email EOS to PW | Forwards email from EOS to James West regarding his commission and states “Let us know as soon as you’re ready to go with the loan agreement, and we can crack on with the exchange” | E10/158 - 159 | ||
14 January 2010 | Letter from PW to the directors of Lizzano reporting on Surbiton deal | E11/1-8 | |||
14 January 2010 at 07:39 and 08:06 | Email exchange between PW and ND cc. PS, AM and Luke Morris | Email instructing MdR to work on loan documentation: "We are good to go; few problems at my end but we are now ready but must complete loan doc no later than tomorrow and today if possible; NGM will sign whatever we give them – unchanged..." ND in response states: "I am free for a call but all the documents take time to draft". | E11/9-11 | ||
14 January 2010 at 07:52 | Email PW to Tony Chalkley and Guy Wheatcroft cc. JL, KM, EOS and GP | PW states that the trustees have approved the loan documentation and engrossments will be with NGM in the next few hours. PW states the hope that exchange will take place today and that "we really are now at the finishing post." | E11/10 | ||
14 January 2010 at 8:12 | Email PW to GP | PW states that today is a tall order but definitely tomorrow | E11/12 | ||
14 January 2010 | Email PW to Paul Cohen (EC Harris) | Requests urgent meeting with NGM and EC Harris to run through their cost plan assumptions for the Surbiton development | E11/33 | ||
14 January 2010 at 08:52 | Email AM to PW | AM in response to email from PW to ND states "we are good to go". AM states: "Kevin has seen this. I don't know anything about this, you don't check my availability. Not happy." | E11/12A | ||
14 January 2010 at 10:07 | Email AM to PW | “K needs the survey report faxed bef parting with money” | E11/91 | ||
14 January 2010 at 10:25 | Email ND to PW cc. Luke Morris | Email explains that MdR's Patent lawyers will stop their current work in order to prepare the documentation on this transaction. Three numbered requests for information including the identity of the party "lending the money" and what is the amount of the loan. | E11/35 | ||
14 January 2010 at 12:31 | Email EOS to CT cc. KM | Email attaches draft Equity Agreement regarding CT’s investment in NGM | E11/38 | ||
ATTACHMENT | Draft Equity Agreement | E11/39-45 | |||
14 January 2010 at 13:35 | Email Jaan Larner to EOS | Email attaches engagement letter | E11/46 | ||
ATTACHMENT 10 January 2010 | Engagement Letter from Jaan Larner confirming instructions from directors of Filterbed to advise them “generally in respect of the loan arrangements in respect of FDS to include reviewing, advising and redrafting documentation and related items as required” | E10/98-103 | |||
14 January 2010 e-mail exchanges ending at 16:43 | Email ND to PW cc. Luke Morris and Mary Guinness | ND forwards to PW an email from Mary Guinness sent to ND on 14.01.10 at 16:11 in which she explains that the application for a Patent is only in its very early stages and, therefore, may fail due to prior art. | E11/67+69 | ||
14 January 2010 at 16:35 | Email ND to Luke Morris cc. Mary Guinness | “Lets add a licence for Patents to lender!!” | E11/68 | ||
14 January 2010 at 17:30 | Email ND to PW cc. Luke Morris and Alisa Kayser (of MdR) | ND requests confirmation of the company lending the money, the amount of the initial loan and the latest contract for the purchase of the Surbiton Site. | E11/70 | ||
14 January 2010 e-mail exchanges ending at 17:43 | Email PW to ND cc. PS | PW forwards to ND contract received from Howard Kennedy for the sale of "Land on the North-West side of Portsmouth Road, Surbiton, Surrey" by Kennet Properties Limited to Filterbed. E-mail also confirms that the lender is Lizzano | E11/71 | ||
ATTACHMENT | Contract between Kennet Properties Limited and Filterbed for the sale of "Land on the North-West side of Portsmouth Road, Surbiton, Surrey". The sale is for £1,650,000 (ex VAT) and includes a deposit of £165,000 which is payable on completion. The contract is undated but has been signed by KM on Filterbed's behalf. | E11/20-32 | |||
14 January 2010 at 19:54 | Email Mary Guinness to ND | Attaches first draft of Patent licence. Mary Guinness explains why she extended the term to be a perpetual licence rather than tying it to the loan agreement. | E11/86 | ||
Draft Patent Licence | E1/Tab 23 | ||||
14 January 2010 at 20:13 | Email ND to Mary Guinness | “I think that the licence should not be limited to the Site (that is where we may end up in Stage 2) but right now it needs to be unrestricted. I also want the Lender to receive the benefit of the licence now. Again in Stage 2 it may be limited to the Subsidiary”. | E11/88 | ||
14 and 15 January 2010 | Email exchange between JL and PS cc. PW and SG | E-mail exchange in which it is stated that a further £165,000 is to be sent to Howard Kennedy. This second £165,000 will be paid by Lizzano and used as part of the purchase of the Surbiton Site. The first £165,000 already paid to Howard Kennedy is to be returned to the clients. | E11/105-106 | ||
15 January 2010 at 7:03 | Email ND to MdR team | “I would like to send all docs to the clients (Phillip and Pete) by 10am with a view to them have a quick review before sending over to NGM” | E11/95 | ||
15 January 2010 at 7:49 | Email ND to MdR team | “Our client is funding the transaction and taking security. We are not advising on the property just ensuring that the security net is spread as widely as possible” | E11/97 | ||
15 January 2010 at 8:46 | Email ND to Luke Morris to | ND provides further thoughts on personal guarantees | E11/98 | ||
15 January 2010 at 10:15 | Email Luke Morris to PW and PS cc. ND and Alisa Kayser | Luke Morris sends draft loan agreement between Lizzano and Filterbed. Plan is to send them to KM and advisers by 11am if possible (email forwarded by PS to AM at 10:17) | E11/107-108 | ||
15 January 2010 at 10:25 | Email AM to PS | Confirms she has “no chance” of accessing the draft loan agreement forwarded to her by PS’ email of 10:17 | E11/111 | ||
ATTACHMENT | Draft loan agreement between Lizzano and Filterbed for an on-demand facility up to £225,000. | ||||
15 January 2010 at 10:30 | Email PS to Luke Morris and PW cc. MdR team | High level comments from PS following a quick scan of the draft loan documentation: (i) requirement for a gross-up clause; (ii) the definition of 'Guarantor' needs to be completed; (iii) question why facility is £225,000 and not the amount of the deposit of £165,000 required to exchange the property purchase contract. | E11/112 | ||
15 January 2010 at 10:41 | Email Luke Morris to PS and PW cc. MdR | Luke Morris answers PS’ questions in previous e-mail: gross-up to be added to the loan documentation, although it is already covered in the debenture (which had not then been circulated); guarantee clause will be completed; question directed to PW that the facility was for more than the deposit. | E11/116 | ||
15 January 2010 at 10:55 | Mary Guinness to ND | Email attaches updated draft of Patent Licence | E11/121 | ||
ATTACHMENT | Updated draft of Patent Licence | E1/Tab 24 | |||
15 January 2010 at 10:56 | Email Elena Ourris (MdR) to Mary Guinness cc. Luke Morris | Mary Guinness asked to check clause 8 of the draft Debenture | E11/124 | ||
ATTACHMENT | Draft Debenture | E1/Tab 9 | |||
15 January 2010 at 11:12 | Email Luke Morris to Jaan Larner cc. ND, PW and PS | Luke Morris provides Jaan Larner with the draft loan agreement for review | E11/127 | ||
ATTACHMENT | Draft loan contract between Lizzano and Filterbed which provides for an on-demand facility up to £165,000. | E1/Tab 4 | |||
15 January 2010 at 11:14 | Email Jaan Larner to EOS and KM | Jaan Larner forwards email attaching draft loan agreement | E11/153 | ||
15 January 2010 at 11:30 | Alisa Kayser to Jaan Larner cc. PW, PS, AM and MdR team | MdR provide to Jaan Larner the following draft documentation: 1. Debenture to be given by NGM to Lizzano. 2. Debenture to be given by Filterbed to Lizzano. 3. Guarantee to be given by Filterbed to Lizzano. 4. Guarantee to be given by NGM to Lizzano. 5. Personal Guarantee to be given by KM to Lizzano. 6. Personal Guarantee to be given by EOS to Lizzano. 7. Patent Licence to be granted by NGM to Lizzano. | E11/129 E1/9 E1/7 E1/17 E1/20 E1/11 E1/14 E1/25 | ||
ATTACHMENTS | Items 1 to 7 listed immediately above | E1 at Tabs 7,9,11,14,17,20 & 25 | |||
15 January 2010 at 11:31 | Email Mary Guinness to Elena Ourris (MdR) cc. Luke Morris | Mary Guinness responds to email asking her to look at clause 8 of the draft Debenture and adds to the definition of “Intellectual Property” | E11/128 | ||
15 January 2010 at 11:37 | Email Jaan Larner to EOS and KM | Forwards email from MdR of 11:29 attaching items 1 to 7 listed above and states “I am still reviewing the main agreement but will get onto these asap” | E11/129 | ||
15 January 2010 at 11:52 | Email Frances Carey (on behalf of ND) to PS and PW | Email attaches MdR’s retainer letter | E11/132 | ||
ATTACHMENT | MdR’s retainer letter with Lizzano Ltd. Instructions: “To prepare the relevant documentation for the Transaction and this will be effected in two places: 1. Stage 1, which will be to prepare an on demand loan agreement with full security to enable the Borrower to exchange contracts over a property in Surbiton; 2. Stage 2, which will be for a further advance and full loan agreement with detailed commercial terms (such as profit sharing arrangements) that will be put in place following Stage 1” | E11/133-143 | |||
15 January 2010 at 11:56 | Email ND to Jaan Larner cc. PW and MdR team | Email addresses the personal guarantees to be provided by KM and EOS. ND confirms that Lizzano is prepared to agree not to enforce the "financial elements" of the guarantees provided that, on any enforcement of any security, KM and EOS will ensure that all of the relevant charged assets are vested in Lizzano and that they comply with Clause 8.1 of the Patent Licence. ND notes that the current drafts of the Personal Guarantees to be provided by KM and EOS do not reflect this. Clause 8.1 of the Patent Licence sent to Jaan Larner that morning requires KM and EOS to ensure that NGM complies with all obligations in the Licence, including executing the necessary documents to register the Licence with Patent offices throughout the World. | E11/145 | ||
15 January 2010 at 12:09 | Email Jaan Larner to EOS and KM | Jaan Larner forwards ND’s email of 11:56 to EOS and KM | E11/148 | ||
15 January 2010 at 12:14 | Email KM to CK | KM forwards email attaching draft loan agreement to CK | E11/153 | ||
15 January 2010 at 12:18 | Email Jaan Larner to EOS and KM | Email attaches Jaan Larner’s comments on draft loan agreement. Jaan Larner states that he will now review the other documents and suggests that EOS and KM read them so that they can review them all in one call and then email back to MdR for their comments | E11/148 | ||
ATTACHMENT | Draft loan agreement with Jaan Larner’s comments | E1/Tab 5 | |||
15 January 2010 at 12:44 | Email Jaan Larner to KM | “Given the amount of work I need to do reviewing and drafting, I wasn’t proposing to come to the meeting – the time on the train would not be productive. However I will be available on the phone, able to draft whatever is needed liaise with you as required” | E11/150 | ||
15 January 2010 at 12:49 | Email KM to Jaan Larner | “Okay we will put you on the phone when there but let’s try and agree any changes with Mishon (sic.) before I arrive at there (sic.) offices at 3.30” | E11/150 | ||
15 January 2010 at 12:50 | Email Jaan Larner to EOS and KM | Email attaches Jaan Larner’s comments on the draft personal guarantees | E11/151 | ||
ATTACHMENT | Draft personal guarantees with Jaan Larner’s comments | E1/Tabs 12 & 15 | |||
15 January 2010 at 12:52 | Email CK to KM cc. EOS | CK provides his comments on the draft loan agreement. “I guess no way of avoiding the g’tee from NGM – they take a charge on all assets, including the Patent”. | E11/153 | ||
15 January 2010 at 12:55 and 12:56 | Email exchange between KM and Jaan Larner | KM forwards CK’s comments on draft loan agreement and Jaan Larner acknowledges saying “All good – will discuss when I call” | E11/154 | ||
15 January 2010 at 13:03 | Email Jaan Larner to KM and EOS | Email attaches draft company guarantees with Jaan Larner’s comments | E11/155 | ||
ATTACHMENT | Draft company guarantees with Jaan Larner’s comments | E1/Tabs 18 & 21 | |||
15 January 2010 at 13:07 and 13:18 | Emails Jaan Larner to KM and EOS | Jaan Larner states that he will leave the debenture documents until after the call with KM and EOS and will “crack on” with the licence. He then sends draft licence back with his comments. | E11/157 | ||
ATTACHMENT | Draft Patent licence with Jaan Larner’s comments | E1/Tab 26 | |||
15 January 2010 at 13:33 | Email ND to PW cc. MdR team | ND gives a brief analysis of the loan and security documents | E11/159 | ||
15 January 2010 at 13:53 | Email PS to SG cc. Stephen Cottier and AM | Email attaches draft loan agreement to reflect the loan between Winllan (I) Ltd and Lizzano Ltd and draft board minutes for the borrower and lender | E11/166 | ||
ATTACHMENT | Draft loan agreement between Winllan (I) Ltd and Lizzano Ltd | E11/169-176 | |||
ATTACHMENT | Draft board minutes for the borrower and lender | E11/178-180 + 182-183 | |||
15 January 2010 at 14:04 | Email PS to SG and Aidan Davin (Equiom) | Email attaches: draft Patent licence, personal guarantees, company guarantee and debentures | E11/185 | ||
15 January 2010 at 14:13 | Email Luke Morris to Jaan Larner and ND cc. PW and MdR team | Request by Luke Morris for confirmation from Jaan Larner is dealing with the conditions precedent in the loan agreement. | E11/190 | ||
15 January 2010 at 14:17 | Email Jaan Larner to Luke Morris | “I have just finished speaking to my clients and will be emailing shorting with comments on the documents you and your colleague have sent over – save for the debentures which I am still working on” | E11/192 | ||
15 January 2010 at 14:21 | Email PW to AM | Email forwards EC Harris “high level review” of the two proposals for the Surbiton scheme | E11/193 | ||
ATTACHMENT 15 January 2010 | EC Harris letter | E11/194-195 | |||
15 January 2010 e-mail exchange ending at 14:45 | Email exchange between Luke Morris and PW, PS and MdR team | Luke Morris circulates email received at 14:38 from Jaan Larner which attached tracked-changes of the loan agreement, Patent licence and four guarantees. Jaan Larner's email begins, "I attach the following documents with my comments and amendments:" Jaan Larner indicates that he is currently working on the debenture documents and will prepare the conditions precedent documents. Jaan Larner asks Luke Morris to arrange for hard-copies of the amended documents to be provided to his clients because they "have not had a chance to print these changes out before they left to go to your offices". | E11/204 | ||
ATTACHMENTS | PATENT LICENCE CHANGES: New definition introduced of "Property"; limits the operation of the licence subsequent to an insolvency event by NGM, and the licence to apply only to the development of the 'Property'; other minor changes. LOAN AGREEMENT CHANGES: Name changed to "On Demand Interim Loan Agreement"; two comments introduced to clarify that Jaan Larner was still to review and comment upon the debenture granted by Filterbed to Lizzano and the debenture granted by NGM to Lizzano; definition of "Termination Date" amended introducing a minimum notice period of 21 days following the drawdown of the loan / Interest provisions amended. | E1/Tabs 5 & 26 E1/Tabs 3, 4, 5, 6 | |||
15 January 2010 at 14:50 | Email PS to SG and Aidan Davin | Email forwards email from Jaan Larner with his comments on loan and security documents | E11/206 | ||
15 January 2010 at 15:30 | Meeting at MdR’s office – in attendance: KM, EOS, GP, PW, ND, Morris and Larner (by telephone) | ||||
15 January 2010 at 15:47 | Email SG to PD cc. AM, Stephen Cottier and Aidan Davin | Attaches signed minutes of Winllan (I) Ltd, signed minutes of Lizzano and signed loan agreement between the two | E11/221 | ||
ATTACHMENT | Draft loan agreement between Winllan (I) Ltd and Lizzano Ltd | E11/224-231 | |||
ATTACHMENT | Draft board minutes for Lizzano Ltd | E11/222-223 | |||
ATTACHMENT | Draft board minutes for Winllan (I) Ltd | E11/232-233 | |||
15 January 2010 at 15:59 | Email ND to SG cc. PW | Email sets out MdR's legal analysis of the meaning of the loan agreement, the debentures, the guarantees and the Patent licence. | E11/212 - 213 | ||
15 January 2010 at 16:24 | Email SG to ND cc. PW, PS, Aidan Davin, AM | Confirms receipt of ND’s email of 15:59 which he has discussed with his co-director (Aidan Davin) in conjunction with the draft documentation sent earlier | E11/215 | ||
15 January 2010 at 16:33 | Elena Ourris (trainee at MdR) to Jaan Larner cc. PW, PS, AM and MdR team | Draft documents circulated: - Directors Certificate (clean and redline versions) - Debenture to be given by Filterbed (clean and redline versions) | E11/217 | ||
ATTACHMENTS | Documents listed immediately above | ||||
15 January 2010 at 17:10 | Email Luke Morris to SG cc. PW, Alison Pipex, PS and MdR team | Finalised copies of documents to be executed on Lizzano's behalf:
| E11/243a-c | ||
ATTACHMENTS | 1. Loan Agreement – Jaan Larner's amendments circulated at 14:45 have not been adopted except for a change to clause 6.2 (regarding the compounding of interest) and clause 19.4 (which simply corrects a typo in the previous draft). Clause 6.2 in the finalised document contains both the original and amended wording, so there is some muddle in the language. 2. Filterbed Debenture 3. NGM Debenture 4. Filterbed Guarantee 5. NGM Guarantee 6. KM Guarantee 7. EOS Guarantee 8. Patent Licence – Jaan Larner's amendments circulated at 14:45 have not been adopted except for corrections at clause 5.1 to ensure consistency in the use of definitions. Other changes have been made, which were not requested by Jaan Larner at 14:45, including the naming of the licence, which is now "Interim Patent Licence", and clause 2.1 pursuant to which the licence is a non-exclusive licence. MdR's first draft was for an exclusive licence. This was deleted by Jaan Larner, although he did not expressly state the licence to be non-exclusive. | E1/Tab 6 E1/Tab 8 E1/Tab 10 E1/Tab 19 E1/Tab 22 E1/Tab 13 E1/Tab 16 E1/Tab 28 | |||
15 January 2010 at 17:22 | Email Jaan Larner to Elena Ourris | Confirmation that documents provided are "now agreed". | E11/247 | ||
15 January 2010 | Directors' Certificate by Filterbed to Lizzano | Approves the initial Loan Agreement for £165,000 and provide copies of Filterbed's Board Resolutions. Certificate signed by EOS and KM | |||
15 January 2010 | Minutes of Filterbed Board Meeting on 15 January 2010 | KM and EOS approve the loan agreement with Lizzano in respect of the loan for £165,000, the debenture and guarantee to be given by Filterbed to Lizzano. Paragraph 6.1 states: "The Chairman then drew the attention of the meeting to the provisions of each of the Documents [as defined], pointing out both the benefits that would accrue to the Company as well as the liabilities and obligations which the Company would incur under the terms of the Documents should it resolve to execute them." | |||
15 January 2010 | Minutes of NGM Board Meeting on 15 January 2010 | KM and EOS give approval for the loan by Lizzano to Filterbed and the debenture and guarantee to be given by NGM to Lizzano. The minutes contain a paragraph 6.1 in identical terms to Filterbed's Board Meeting Minutes. | E11/248-250 | ||
15 January 2010 at 17:33 | Email SG to Luke Morris cc. ND, PW, PS and MdR team | Email attaches front and execution pages of the loan and security documents | E11/271 | ||
ATTACHMENT | Front and execution pages of the loan and security documents | E11/252-268 | |||
15 January 2010 | Loan Agreement | Loan by Lizzano to Filterbed executed by both parties. | E1/Tab 6 | ||
15 January 2010 | Personal Guarantee | Executed by EOS and Lizzano. | E1/Tab 16 | ||
15 January 2010 | Personal Guarantee | Executed by KM and Lizzano. | E1/Tab 13 | ||
15 January 2010 | Guarantee | Executed by NGM and Lizzano. | E1/Tab 22 | ||
15 January 2010 | Guarantee | Executed by Filterbed and Lizzano. | E1/Tab 19 | ||
15 January 2010 | Debenture | Executed by NGM and Lizzano. | E1/Tab 10 | ||
15 January 2010 | Debenture | Executed by Filterbed and Lizzano. | E1/Tab 8 | ||
15 January 2010 | Interim Patent Licence | Executed by NGM, Lizzano, KM and EOS. | E1/Tab 28 | ||
15 January 2010 at 17:49 | Email ND to MdR team | Congratulates MdR team on a great job – “instructions received and fees agreed at 12.30pm yesterday and completion today at 5.30pm … The client was impressed and justifiably so”. | E11/273 | ||
15 January 2010 | Subject to Contract letter from PW on behalf of GHP to KM and EOS: “In view of the timescale of this transaction it has been agreed that a general interim loan document will be put in place until completion, at which time it is intended to execute a further agreement, which will relate more specifically to the subject transaction in Surbiton. This letter is separate from the Loan agreement dated 15TH January 2010 and sets out the remuneration agreement between the parties. This letter is given as a record of the intention between the Parties, but it is not a legal document and is therefore subject to completion of all loan documentation referred to above”. Letter sent "subject to contract" which sets out the "remuneration agreement" between the parties. It is expressed to be separate to the loan agreement dated 15 January 2010 and, whilst recording the intention of the parties, is not a legal document. Signed by KM and EOS at [E12/17-18] (MdR’s document – handwriting probably ND) | E11/284-285 | |||
18 January 2010 at 10:25 | Email KM to Jaan Larner | Email attaches draft agreement between CT and NGM | E12/5 | ||
ATTACHMENT | Draft equity agreement between NGM and CT | E12/6-12 | |||
18 January 2010 | JL to Guy Wheatcroft | Letter recording exchange of contracts to have taken place "on Friday". Letter encloses signed contract and confirms that the deposit of £165,000 has been transferred. | E12/12A | ||
ATTACHMENT 15 January 2010 | Contract for the sale of the Surbiton Site between Kennet Properties Limited and Filterbed signed by KM on behalf of Filterbed. The contract contains manuscript changes to clause 2.2 allowing the buyer to nominate a third party to whom the seller must sell the Surbiton Site. | E1/Tab 2 | |||
19 January 2010 at 11:55 | Email PW to ND cc. PS, AM and SG | Provides MdR with a "heads up" before a meeting on 20 January 2010. In this e-mail PW highlights that the Lizzano loan, together with the broader support of GHP and the Mebco structure will provide a significant boost to NGM's business. PW wants to benefit from the increase in NGM's share value and requests MdR to consider how this can be done: "...of course this is a commercial negotiation but right now Lizzano has the upper hand so strike whilst the iron is hot." | E12/16 | ||
19 January 2010 at 13:08 | PW to Aidan Davin and SG cc. PS, AM and Stephen Cottier | PW attaches his written report on the Surbiton Site proposal. | E12/19 | ||
ATTACHMENT 14 January 2010 | Report from PW to the Directors of Lizzano. The report explains the introduction to the technology and to the Surbiton Site and provides a high level view on each of these matters; together with additional documents referred to in the report. | E12/20-44 | |||
19 January 2010 at 17:09 | Email PW to KM | PW wants to line up two funding presentations on 10.02.10 and wants KM to confirm his availability | E12/45 | ||
20 January 2010 at 09:44 | Email KM to PW | KM confirms that he is available to attend two funding presentations with PW in the West End on 10.02.10. | E12/4A | ||
20 January 2010 at 16:30 | Email EOS to Hannah Saunders (of Keystone Law) | EOS admits owes CN £60,000 in “back pay”. States that a verbal agreement was struck with CN that his employment was to stop towards the end of last year. | E12/63 | ||
20 January 2010 at 16:51 | Email EOS to PW cc. Tim Haggard (accountant) | EOS provides PW with NGM’s accountant details | E12/66 | ||
20 January 2010 | Meeting with MdR – in attendance: ND, PW and PS | E12/56-57 +103 | |||
21 January 2010 | NGM meeting with PW and PS | ||||
21 January 2010 at 07:57 | Email PS to Tim Haggard (accountant to NGM) | PS requests: - A broad breakdown of NGM's short term creditors totalling £1.15 million as shown in NGM's 30 June 2008 accounts. - Detail as to the terms of any formal loan agreements. - Up to date figures to cover the period between June 2008 and January 2010. | E12/68 | ||
21 January 2010 at 10:32 | Email PS to PW cc. ND | PS forwards email from Tim Haggard on 21.01.10 at 10:13 attaching NGM's accounts up to 30 June 2009. PS explains that NGM is heavily reliant on Shareholder support to survive, and that CK is the biggest shareholder, having invested over £1 million. | E12/77-78 | ||
21 January 2010 at 12:04 | Email PS to PW | Email setting out account based questions for NGM. | E12/76 | ||
21 January 2010 at 12:58 | Email ND to PS cc. Alison Pipex, PW and Luke Morris | ND confirms that controlling shareholders of NGM are KM and EOS, and that there was no need for NGM shareholder approval for the transaction documents agreed last week. | E12/81 | ||
21 January 2010 at 13:10 | Email CN to Hannah Saunders | Email setting out CN’s position regarding employment issues with NGM. | E12/91-92 | ||
21 January 2010 at 14:05 | Email PS to ND cc. Alison Pipex, PW and Luke Morris | E-mail discussion following NGM's unaudited accounts. PS expresses scepticism that "the guy" [CK] capitalised a £1 million loan for 372 B shares, which represented a minority stake. | E12/84 | ||
21 January 2010 at 14:11 | Email ND to PS cc. Alison Pipex, PW and Luke Morris | Continuing e-mail discussion about NGM's historic debt / equity swap. ND confirms that a further £950,000 was capitalised for an issue of 1,520 B shares. | E12/84A | ||
21 January 2010 at 14:25 | Email PS to ND cc. Alison Pipex, PW and Luke Morris | Further e-mail discussions about NGM debt / equity swap. PS expressing further scepticism of debt equity swap: "OK, but even then it still looks ridiculous. If my maths are right, he’s got 8% of the votes and assuming shares are parri passu on economic right, 13.5% of the equity. Either he’s stupid (and he’s ex Merril Lynch, I don’t imagine he is) or there’s something more to this” | E12/84B | ||
21 January 2010 at 14:29 | Email ND to PS cc. Alison Pipex, PW and Luke Morris | ND concludes previous email discussion highlighting need to look at NGM's Shareholders / Investment Agreement. | E12/84C | ||
21 January 2010 at 16:53 to 25 January 2010 at 11:04 e-mail exchange | Email exchange between ND, PW and PS | Discussions on a draft note entitled, "Lizzano Limited, Loan and Equity Arrangements with NGM". Reference is made to the fact that there is no existing shareholder agreement for NGM. | E12/102 | ||
ATTACHMENT | Draft note entitled "Lizzano Limited, Loan and Equity Arrangements with NGM". This sets out conditions for drawdown of the loan from Lizzano and liability for various fees, including an 'Arrangement Fee' and a 'Deferred Participation Fee.' | E12/103-105 | |||
21 January 2010 at 19:11 | Email CN to KM | CN makes proposal to settle outstanding wages | E12/111 | ||
22 January 2010 at 12:51 | Email PW to PS | States that loan on Surbiton is £2m. plus there will be “K & P” salaries | E12/158 | ||
22 January 2010 at 19:15 | Email Hannah Saunders to KM and EOS | Attaches draft compromise agreement for CN | E12/187-188 | ||
ATTACHMENT | Draft compromise agreement for CN | E12/188-203 | |||
24 January 2010 at 18:19 | Email PS to PW | PS sets out his thoughts and comments on NGM following his review of the accounts and various discussions. “On paper the company is insolvent, by clearly doesn’t value the Patent or the future value that could be derived from the Patent (which was presumably the basis on which Merrills looked at the business). I would hope that the economic realities of the past 2 years would have caused them to substantially re-think the £10m figure, but in my experience once people have a figure in their minds it’s often difficult to shift” | E12/208-09 | ||
25 January 2010 between 16:12 and 16:25 | Email exchange between EOS and PW | EOS refers to earlier conversation, having had a lengthy conversation with CK and suggests a meeting in London. EOS states that CK is very keen to meet PW and KR. PW confirms meeting at 12pm at GHP’s offices with CK. | E12/223+229 | ||
25 January 2010 between 16:29 and 19:07 | Email exchange between EOS and CK | EOS informs CK of next day meeting with PW. CK comments that it sounds like it is an important meeting. | E12/239 | ||
25 January 2010 at 18:55 | Email CN to KM | CN sends KM a draft consultancy agreement he has started working on and asks will it be with NGM/Filterbed | E12/230 | ||
ATTACHMENT | Draft Consultancy Agreement | E12/232-238 | |||
26 January 2010 at 10:08 | Email Jaan Larner to KM and EOS | Email to confirm discussion that morning. Advice given in respect of loan and security agreements. Under heading ‘Further considerations’ states: “I understand that you are attending a meeting with Cyrus, your largest investor, to secure the funds to repay the loan and that you will then meet with Philip and explain to him that unless the terms of the ultimate loan agreement are much more favourable, then you will simply repay the advance and request all security documents fall away” | E12/244 | ||
26 January 2010 at 14:24 | Email PS to Mark Patterson cc. AM, PW | Attaches a note from MdR in relation to the second stage of the transaction “i.e. new loan agreement to extend the existing loan that was put in place to pay the deposit on exchange of contracts for the site”. Refers to the question of what, if any, equity stake will be taken by the group to be subject of some debate and should become clearer later this week. | E12/263 | ||
26 January 2010 | Meeting between KM, EOS, CK and PW. | ||||
26 January 2010 at 14:24 and 18:26 | Email exchange between KM and CT | KM states: “I had a good meeting with Phillip and I am travelling to Ireland tomorrow to thrash out a deal with Phillip and his business partner Kevin. However, as you know it is important to have our deal completed as soon as possible to give strength in the final negotiations. These are interesting times!” CT’s response is that there are four points that he needs to run through with KM and that he is in contact with EOS in respect of these | E12/276 | ||
26 January 2010 at 17:26 | Email EOS to James West | “We just came back from a meeting with Phillip, and we’re flying out to Ireland tomorrow to meet with Phillip and Kevin to discuss a potential wider deal that just doing the Surbiton site … so if you allow us a couple more days it will crystallise the relationship between NGM and GHP. However, as I am sure you aware, any negotiations with Phillip and Kevin are played out the hard way so we’re not expecting it to be smooth sailing but we want to make sure you are rewarded for hopefully introducing into a deal that creates great value for everyone” | E12/272 | ||
27 January 2010 at 10:30 | Email EOS to CT | EOS asking whether CT free to have a chat regarding the loan | E12/278 | ||
27 January 2010 at 11:15 | Email EOS to DAC cc. CT and Jaan Larner | Refers to having just got off the phone with CT regarding the loan / equity agreement between CT and NGM | E12/279 | ||
27 January 2010 at 13:30 | Email Jaan Larner to EOS | Email purports to attach engagement letter but appears not to have as apology given in 15:59 email | E12/293 | ||
27 January 2010 at 15:59 | Email Jaan Larner to EOS | Email attaches engagement letter. States: “As discussed just now – my advice is that if you are planning to repay the advance under the interim loan between Lizzano and FDS then, as I said to Kerry, you should ensure that you have the funds in place and then make an immediate prepayment of the advance, the interest to date and a sum representing the costs with a covering letter …” […] “We have just spoken on the phone while I have been typing this and can confirm that without default they can’t enforce the security documents … I strongly recommend we get the release from the security documents tied up” | E12/292 | ||
27 January 2010 | Engagement letter from Jaan Larner to NGM | E12/296-301 | |||
27 January 2010 | GP, PW and KM meet with KR in Cork. | ||||
27 January 2010 at 18:39 | Email Jaan Larner to ND and Luke Morris | Chasing receipt of copies of the documents executed on 15.01.10 | E12/302 | ||
28 January 2010 at 0:45 | Email Jaan Larner to KM and EOS | Jaan Larner sets out initial thoughts about the position with Lizzano and next steps before conference call at 9:15. Advice given on potential grounds to challenge the loan and security documents | E12/303-304 | ||
28 January 2010 between 9:32 and 10:23 | Email exchange between KM and CK | KM forwards Jaan Larner’s email of 00:45 to CK who states that he is working on this and that KM should contact Jamie Stein at Fonte Capital and Moorfields | E12/308 | ||
28 January 2010 at 11:34 | Email EOS to Peter Williams (UCG Ltd) | Email looking for alternative partner/funder on the basis that “the partner/funder we are currently talking to are now demanding to be given a larger equity stake in NGM” | E12/309 | ||
28 January 2010 at 12:05 | Email EOS to Jamie Stein (Font Capital) | Email looking for alternative partner/funder on the basis that “the partner/funder we are currently talking to are now demanding to be given a larger equity stake in NGM” | E12/312 | ||
28 January 2010 at 12:14 | Email EOS to Jamie Goss (Hunter Capital) | Email looking for alternative partner/funder on the basis that “the partner/funder we are currently talking to are now demanding to be given a larger equity stake in NGM” | E12/313 | ||
28 January 2010 at 13:02 | Email Jaan Larner to KM and EOS | Jaan Larner gives his view on “licensing the technology out” | E12/318 | ||
28 January 2010 between 16:10 and 16:52 | Email exchange between Jamie Stein to EOS | Exchange of information about Surbiton to assist Jamie Stein determine whether any funders would be interested | E12/325-336 | ||
28 January 2010 between 17:22 and 20:56 | Email exchange between Louise Francis (DAC) to EOS cc. Jaan Larner and DAC lawyers | DAC confirm that CT requires an assets debenture which would rank second behind Lizzano’s assets debenture and personal guarantees from EOS and Jaan Larner to mitigate the fact that he is receiving an all assets debenture ranked behind Lizzano Jaan Larner states that NGM unable to offer proposed security | E12/337+351 | ||
29 January 2010 at 12:55 | PDF copies of signed documents signed on 15.01.10 sent to Jaan Larner. | E12/354-355 | |||
29 January 2010 at 9:28 | Email PS to PW | Refers to a lot depending on what (if anything) is paid for the NGM equity | E12/345 | ||
29 January 2010 at 13:19 | Email PW to JL | “CRUCIAL MEETING TODAY AT 2PM; I WILL LET YOU KNOW” | E12/359 | ||
29 January 2010 at 16:16 | Email Louise Francis (DAC) to Jaan Larner cc. EOS, CT and DAC lawyers | Confirms that CT willing to proceed on the basis of personal guarantees from EOS and KM and receipt of existing security and loan documents | E12/370-371 | ||
31 January 2010 at 19:22 | Email Jaan Larner to KM and EOS | Advice on (i) validity of Patent licence, (ii) validity of debenture and (iii) rationale for entering into the Patent licence | E12/401-402 | ||
1 February 2010 at 9:10 | Email Jaan Larner to JM | Forwards Jaan Larner’s email of 31.01.10 at 19:22 and asks JM to ring | E13/1 | ||
1 February 2010 at 10:10 | Email EOS to Andy Ryley (RPC Group) | “Further meetings today with all potential funders, including GHP, so one way or another we have to sort things out today or tomorrow as completion is on Friday” | E13/2 | ||
1 February 2010 at 11:31 | Email Louise Francis (DAC) to EOS | Confirms receipt of the documents from Jaan Larner as requested | E13/28 | ||
1 February 2010 at 12:33 | Email JL to Jaan Larner cc. PW | Confirms no instructions to send over any papers | E13/41 | ||
1 February 2010 | Meeting between PW, EOS and KM | ||||
1 February 2010 at 16:57 | Email PW to London and Capital | “The Isle of Man business is about to take a 50% stake in the above company [NGM]. I want to bring the guys in to do a brief presentation, as some of your investors should be very interested in what we are about to do with this concept. Please give me some times for w/c 15th February” | E13/67 | ||
1 February 2010 at 17:01 | Email PW to JL | “You can give Jaan the papers on Surbiton. Shareholders Agreement and loan docs being drafted now and you will be in funds for Friday” | E13/68 | ||
1 February 2010 at 21:23 and 23:15 | Email KM and Jason Lewis cc. PW | Email exchange in which KM is expressing frustration that Jason Lewis has not provided daft loan documentation to Keystone Law. Jason Lewis clarifies that he cannot send any papers without his client's instructions. | E13/72 | ||
2 February 2010 between 08:09 and 08:45 | Email exchange between KM and JL | KM asking for documents to be sent and JL stating they will be sent over today | E13/74 | ||
2 February 2010 at 09:41 | Email PW to KM, EOS and GP | Email attaching heads of agreement with request for confirmation that they are agreed because "we are running very short of time". | E13/77 | ||
ATTACHMENT | Heads of Terms which include a section entitled "Gentleman's understanding – not in Agreement" | E13/78 | |||
2 February 2010 at 09:47 | Email KM to PW | KM asks PW to give him a call when he has a chance | E13/79 | ||
2 February 2010 at 10:19 | Email KM to Jaan Larner and CK | Refers to Heads of Terms and states going to speak to PW to “clear these up”. Asks for CK’s thoughts. | E13/82 | ||
2 February 2010 at 10:26 | Email Jaan Larner to EOS | Forwards email from DAC confirming CT loan of £150,000 subject to contract and asking for clarification regarding the Patent licence following completion | E13/83-84 | ||
ATTACHMENT | Draft loan agreement between CT and NGM | E13/85-95 | |||
ATTACHMENT | Draft personal guarantee: Crispin Rupert Topping | E13/96-106 | |||
2 February 2010 between 10:52 and 12:10 | Email exchange between CK and KM | Provides thoughts on Heads of Terms and concerns regarding a share dilution | E13/107-113 | ||
2 February 2010 at 11:03 | Email KM to PW | KM sets out his proposals for a performance deal. The email states that "we are sorting the loan doc's now!" | E13/108 | ||
2 February 2010 at 14:12 | Email PW to ND cc. PS and AM | Email encloses draft Heads of Terms for a shareholders agreement. | E13/117 | ||
ATTACHMENT | Draft Heads of Terms which provides for the following (among other things): - That an Isle of Man SPV will take 50% of NGM's shares. - Remaining 50% shares are to be diluted for a 3-year external loan of £150,000. - If the £150k deal does not complete by the following Friday, CK is to provide an undertaking up to a ceiling of £100,000 to prevent company falling into Administration. - Subject to £150k loan or CK undertaking, £60,000 to be advanced to NGM on completion. - Lizzano to maintain rights to Patent to protect against NGM defaulting on loan or going into liquidation. - Personal undertakings of shareholders and Directors to be maintained. | ||||
ATTACHMENT | Draft loan agreement between Winllan (I) Limited and Lizzano for £165,000. | ||||
2 February 2010 at 14:55 and 14:57 | Email exchange between EOS and Nick Davis cc. PW | EOS first states that there has been some miscommunication between MdR and Jaan Larner. "The £150k investment has been agreed, and all documents are sent to lawyers for final approval meaning that this investment will take place prior to the deal with GHP." ND in his response requests copies of the documentation so that MdR can draft the subscription and shareholders agreement properly. | E13/119 | ||
2 February 2010 at 15:07 and 16:22 | Email exchange between EOS and ND cc. Jaan Larner | EOS explains that it will be very difficult to obtain 100% shareholder approval for the deal to go through. EOS states that, because he and KM have double voting shares and can make the deal happen, he does not see that 100% approval is necessary. ND in his response states that those individuals who were taking up Loan Notes with the shareholding would have to sign up along with EOS and KM, as well as the major holder of the B Shares. | E13/131A | ||
2 February 2010 at 18:37 | Email CN to Hannah Saunders | “The agreement will state that his termination is due to redundancy”. | E13/139 | ||
3 February 2010 between 08:26 and 09:07 | Email exchange between KM and PW | E-mail exchanges regarding a meeting which KM initially assumes is intended to be a sit down dinner. PW clarifies that it is only an informal chat for an hour or so. He further states "Kevin has limited time here and given last weeks 'false start' it is important. Please confirm." KM confirms that this is fine and asks for confirmation what time and where the meeting is to take place. | E13/140-141 | ||
3 February 2010 at 9:24 | Email Jaan Larner to EOS | “Once the final deal has been agreed with Phillip, I will be able to discuss how to implement it with Nick Davis and we can put together a timetable …” | E13/155 | ||
3 February 2010 at 10:08 | Email Alisa Kayser (MdR) to ND cc. Luke Morris | Attaches draft Lizzano loan agreement | E13/158 | ||
ATTACHMENT 3 February 2010 | Draft 1 of Facility Agreement between Filterbed as Borrower, NGM as Guarantor and Lizzano as Lender | E13/159-223 | |||
3 February 2010 at 10:35 and 10:54 | Email exchange between PS and ND cc. PW and MdR team | PS states that "the JV company" will need to set up a new bank account to which Lizzano's directors are signatories. This is suggested to be a condition subsequent to the loan agreement. ND in his response states that this will be dealt with in the loan agreement, the first draft of which will be provided to PS for review before sending to the other side. | E13/244 | ||
3 February 2010 at 11:16 | Email Stephen Cottier to PS, AM cc. Paul Kelly | Attaches invoice from MdR for work on Surbiton project | E13/248 | ||
ATTACHMENT | Invoice breaks down work between 14 and 19 Jan 2010 described as “charges in connection with advising you on stage 1 of your arrangements with [NGM]” | E13/249-250 | |||
3 February 2010 at 16:06 | Alisa Kayser to PS cc. PW and Mishcon team | Email attaches draft loan agreement highlighting specific clauses. | E13/306 | ||
ATTACHMENT | Draft loan between Lizzano (as lender) Filterbed (as borrower) and NGM (as Guarantor) which provides for: - A facility of £1,485,000 to complete purchase of the Surbiton Site. - A facility of £165,000 to refinance the 10% deposit paid for the property. - A facility of £350,000 to finance the costs of the "Development" (as defined). | E13/308-396 | |||
3 February 2010 | KM and EOS meets PW and KR | ||||
4 February 2010 at 7:33 | Email EOS to Jamie Stein | “We are waiting to hear back from one interested party later on today. Lets speak later” | E14/3 | ||
4 February 2010 at 7:59 | Email Jamie Stein to EOS | “Fingers crossed that one or the other comes off” | E14/3 | ||
4 February 2010 at 9:14 | Email KM to JM and Charles Douglas | “We were asked to meet with Phillip and Kevin last night and I simple (sic.) cannot and will not work with these people. I hope the positive out ways the negative and look forward to hearing from” | E14/4 | ||
4 February 2010 at 09:18 | Email EOS to ND | EOS sends ND loan documentation. | E14/12 | ||
ATTACHMENT | Draft Loan Agreement prepared by Davies Arnold Cooper between NGM and CT. CT agrees to provide to NGM a loan of £150,000 for three years. KM and EOS each agree to provide guarantees to CT. The loan is to be used by NGM "for its general corporate purposes in connection with its business." | E14/15-25 | |||
4 February 2010 at 09:45 | Email PS to ND cc. Alison Pipex and PW | PS asks whether the personal guarantees are continuing under the new loan documentation or being realised. He also asks whether the personal guarantees are supported by charges over shares in NGM. | E14/33 | ||
4 February 2010 at 12:01 | Email Samantha Leonard (GHP) to ND, JL and SG | Trying to arrange an urgent call to discuss Surbiton | E14/57 | ||
4 February 2010 at 12:51 | Email EOS to PW | EOS confirms that "we do want to proceed on Surbiton" and suggests a conversation to discuss next steps. | E14/87 | ||
4 February 2010 at 13:37 | Email ND to Jason Lewis (at Howard Kennedy) cc. PW | ND requests a copy of the consent letter that Howard Kennedy will need from Filterbed to allow Lizzano "to complete" in its own name. | E14/88 | ||
4 February 2010 at 13:55 | Email Jaan Larner to EOS | Advises that key point is to ensure that any ongoing security falls onto the site and NGM is released from all of the interim documents | E14/89 | ||
4 February 2010 at 13:58 | Email ND to SG cc. PW and MdR team | Attaches a draft notice of demand to be served by Lizzano on Filterbed. The e-mail suggests setting a deadline for payment of the on-demand facility of 2pm the following day. ND records the current thinking on enforcement to be that Lizzano will take over completion of the property purchase. In this eventuality, ND notes a few issues, one of which is that Lizzano could not recover the 10% deposit paid by Filterbed for the property, because this may represent unjust enrichment. ND also notes potential difficulties in Lizzano enforcing its charge against the Patents because they would need to be sold to raise money. | E14/92 | ||
ATTACHMENT | Draft notice of demand for payment by Filterbed to Lizzano of £165,000 loan, interest and costs. | E14/2A | |||
4 February 2010 at 14:05 | Email EOS to PW cc. ND and Jaan Larner | EOS sets out his understanding of the proposed way forward for the Surbiton Site. This includes: - Lizzano calling-in the on-demand facility of £165,000. - A consent letter is to be issued to NGM which states that, contingent on the completion of the property purchase and the entering into the development management agreement, Lizzano will complete the purchase of the Surbiton Site and NGM is released from all security (including debentures and personal guarantees). - Lizzano still to have "access" to the Patent. - The Development Management Agreement (DMA) will offer NGM the same profit split as the Heads of Terms. | E14/95 | ||
4 February 2010 at 14:12 | Email PW to EOS | PW responds to EOS’ email confirming that the on demand calling in the loan will be served today and that the DMA will offer NGM the same profit split as the Heads of Terms | E14/96 | ||
4 February 2010 at 14:18 | Email PW to EOS | Email sets out ND’s reply to EOS’ 2nd query in email of 14:05 namely that consent cannot be conditional on the entering of the DMA. Releasing liability is also problematic because of costs and interest. "We can always get the consent without their help!" | E14/100 | ||
4 February 2010 at 14:23 | Email EOS to PW cc. ND | EOS clarifies that the consent letter is not conditional on entering the development management agreement. | E14/105 | ||
4 February 2010 at 14:26 | Email Alisa Kayser to Jaan Larner and EOS cc. Luke Morris and ND | Email attaches the formal demand notice from Lizzano to Filterbed. | E14/102 | ||
ATTACHMENT | Formal Demand Notice from Lizzano to Filterbed, requiring payment of: - £165,000. - Interest of £1,423.97. - Costs of £17,625. Deadline for payment is 2pm on 05.02.10. | E14/104 | |||
4 February 2010 at 13:37 and 14:35 | Email Jason Lewis to ND cc. PW | ND requests from Jason Lewis a form of consent letter required from Filterbed to allow Lizzano to complete the purchase of the Surbiton Site. Response from Jason Lewis states that no formal consent letter is required. Filterbed simply needs to nominate Lizzano as purchaser of the Surbiton Site. | E14/107 | ||
4 February 2010 at 14:38 | Email Jaan Larner to EOS and KM | Explains effect of formal demand notice | E14/110 | ||
4 February 2010 at 15:08 | Email PW to KM | PW states that in order to release all the charges KM will need to pay for sums as set out in the Demand Notice. | E14/116 | ||
4 February 2010 at 15:34 | Email ND to Jaan Larner cc. EOS, PW and MdR team | Email attaches Consent Letter that Filterbed is to sign. | E14/167 | ||
ATTACHMENT | Draft Consent Letter pursuant to which Filterbed nominates Lizzano as the buyer of the Surbiton Site. | E14/168 | |||
4 February 2010 between 15:06 and 16:35 | Email exchange between Mary Guinness, Luke Morris, ND, PW and SG | MdR recommend that Lizzano should register the Patent licence against the Patent in the UK PW agrees with MdR advice | E14/184-187 | ||
4 February 2010 at 16:53 | Email Jaan Larner to ND cc. EOS, KM and PW | Jaan Larner sets out a summary of MdR's demands and puts forward a counterproposal. MdR have asked for: - Consent from Filterbed to allow Lizzano to complete property purchase and to extinguish the liability for the advance, together with interest and costs set out in the Demand Notice. - £5,000 for enforcement of the on demand loan. - c£20,000 to cover the abortive costs of the shareholders agreement and the development agreement. NGM / Filterbed / EOS and KM counter propose: - Consent from Filterbed for Lizzano to complete purchase itself discharges the on-demand notice, interest and costs totalling £184,048.97. - £11,500 including VAT for the costs of enforcing the loan and the costs of the abortive shareholders agreement. - All liabilities to Lizzano to be discharged and all security provided by NGM, Filterbed, EOS and KM to fall away. - The development agreement is to be discussed separately and are not part of the proposal. | E14/188 | ||
4 February 2010 at 17:11 | Email PW to ND | PW response to Jaan Larner’s counter proposal: Subject to the terms of the development management agreement, the charge may need to stay regardless of costs; they may not get the development management agreement unless they secure their obligations with these charges. | E14/188A | ||
4 February 2010 at 17:34 | Email ND to PW | ND suggests this response to Keystone's counter proposal: "Your proposal is not acceptable to our clients and our clients are not prepared to release any security at this stage." | E14/188B | ||
4 February 2010 at 17:43 | Email ND to Jaan Larner cc. EOS, KM, PW and Luke Morris | Email response from ND to Jaan Larner’s counter proposal: "Your proposal is not acceptable to our clients and they are considering their position." | E14/189 | ||
4 February 2010 at 18:20 | Email Alisa Kayser to EOS and Jaan Larner cc. Luke Morris and ND | Email states that the notice of demand sent by Lizzano to Filterbed is also being made by Lizzano against NGM, under NGM's guarantee. The deadline for payment of 2pm on 5 February 2010 is restated. | E14/197 | ||
4 February 2010 at 18:32 | Email ND to PW cc. Luke Morris | Email "Possible steps" in which ND outlines three options and describes some as being less palatable than others. 1. Lizzano can enforce payment of the initial loan from NGM and enforce the charge against the Patent. 2. Lizzano to step in and complete the purchase of the property, but the only money left owing to Lizzano will be interest and costs. 3. Lizzano lends the money needed to complete the purchase to Filterbed under a new loan, and all the security remains intact. In order to do this, Lizzano will need to enforce the security against NGM's shares in Filterbed, remove all of Filterbed's directors and appoint new directors. The charge against the Patent can also be enforced. ND expresses the concern that NGM may consider putting in place an administrator now which would prevent any enforcement of security. | E14/203 | ||
4 February 2010 at 19:11 | Email Jaan Larner to ND cc. EOS, KM and PW | Jaan Larner asks MdR to consider what proposals would be acceptable "in the interests of reaching a swift conclusion so that the meeting on Monday between your clients and mine can be as productive as possible..." | E14/204 | ||
4 February 2010 at 20:00 | Email Jaan Larner to KM | Advises that there is noting that can be done to force Lizzano to make a proposal or respond and that it is a question of waiting and “preparing to meet the deadline if you can agreed terms with Charles Douglas” | E14/209 | ||
5 February 2010 at 10:23 | Email Luke Morris to PW cc. ND | Luke Morris requests a call with PW to discuss the terms of the extended loan, and whether it will be on similar terms to the on demand loan in place. Luke Morris states that it will of course be covered by the existing guarantees and security. | E14/214 | ||
5 February 2010 at 16:41 | Email ND to PW, PS and SG cc. Charlotte Davidson (of MdR) and Luke Morris | ND states that they are completing the stock transfer form, and directors' resolution to approve the transfer of shares in Filterbed, and that 28 days' notice is required to remove Filterbed's existing directors. As a consequence, "we will need to flood the Board of Directors". | E14/222 | ||
5 February 2010 at 18:10 | Email Charlotte Davidson to PW, PS and SG cc. Luke Morris and ND | Email attaches draft forms to appoint new directors in Filterbed; draft written resolution confirming director appointment; and draft Board Meeting Minutes. Email also attaches the stock transfer form in respect of NGM's shares in Filterbed. | E14/223A | ||
6 February 2010 between 07:00 and 07:53 | Email exchange between KM and PW cc. EOS | KM first states that before he and EOS attend any further meetings or do any further business they should be released from their personal guarantees. KM also requests, in the alternative, to be told how much is owed in order to satisfy the guarantees. He asserts that neither he nor EOS have any assets. In response, PW states: "No one is trying to con you. For goodness sake stop these irrational outbursts. This is a genuine business deal which we can work through sensibly if you let the process move forward in a logical manner. I am still prepared to meet or discuss this with you but time is short. I can do no more." KM responds by denying that his email is irrational or an outburst. Rather, KM is following professional and legal advice. | E14/226-227 | ||
6 February 2010 at 9:48 | Email JM to KM, GP cc. Jaan Larner and EOS | “After completion you will no doubt be very happy to discuss a development management role” | E14/228 | ||
8 February 2010 at 09:09 and 16:25 | Email PW and KM cc. EOS | KM sets out proposals to PW including Keystone drafting a DMA and the charges / debentures over NGM, KM and EOS are released. Detailed response from PW headed "without prejudice and subject to contract" which addresses the following matters: - KM's conduct in recent meetings has led PW to question whether he can do business with KM. - PW expresses concerns as to KM's volatile behaviour, emotional outbursts and previously storming off in protest. - PW expresses his worry about the future because KM appears unable to handle intense and difficult situations which are inevitable in business. - Points out that they can move forward with the Patent and the Surbiton Site without KM. - "I am sorry to be so hard but I need you to realise how easy it would be for us to burn you off if we actually did have a sinister agenda. The reality is that our 'working together' has been an evolving situation based on genuinely moving circumstances and not some premeditated idea to 'fleece' you of your company." - PW then sets out the terms of a deal including the use of a DMA and expresses the hope that the relationship can continue. - PW ends by saying that the offer is not-negotiable. | E14/233 E14/248 - 249 | ||
8 February 2010 at 17:45 | Email KM to Jaan Larner and JM | Forwards PW’s email of 16:26 stating: “Please see below to get a true understanding of what kind of people we are dealing with. I would appreciate your feedback on how to respond and buy the time required to get rid of them” | E14/269 | ||
8 February 2010 at 18:10 | Email Jaan Larner to KM | “The key to resolving this for you is being able to [repay the liabilities] as soon as possible” | E14/268 | ||
8 February 2010 at 20:36 | Email KM to JM | “Your email is clear, factual, and concise” | E14/272 | ||
9 February 2010 at 8:25 | Email CK to KM | “I don’t think you have much choice but to accept these terms” | E14/305 | ||
9 February 2010 at 9:03 and 10:57 | Email exchange between GP, KM, Jaan Larner, CK and KM | GP outlines various options and CK suggests trying to buy some more time | E14/316 | ||
9 February 2010 at 14:13 | Email KM to PW | KM expresses his hope "to move forward with you in partnership". He seeks clarification as to the structure of the shareholders agreement regarding cash flow because NGM will be his only source of income and as a minority shareholder he will not be able to control monies and may find it difficult to repay the debt. | E14/330 | ||
9 February 2010 at 14:30 | Email PW to KM | “I am very happy to discuss this with you; are you available at 5.00pm today and I will ask Pete to join the call” | E14/330 | ||
9 February 2010 at 15:08 | Email PS to Charlotte Davison | PS states that ND had suggested asking KM and EOS to resign as directors of Filterbed. This would remove the need to flood Filterbed's board, and only PW would need to be appointed as a director. | E14/332A-B | ||
ATTACHMENT | Completed AP01 form appointing PW as Director of Filterbed. | E14/332C-E | |||
ATTACHMENT | Completed AP01 form appointing PS as Director of Filterbed. | E14/332F-I | |||
9 February 2010 between 15:21 and 16:07 | Email exchange between EOS and PW cc. PS | Email exchange seeking to arrange a call between KM and PW. | E14/340A-B | ||
9 February 2010 at 15:47 | Email Charlotte Davidson to SG, PS and PW cc. MdR team and Dan Moyer at Equiom | Charlotte Davidson attaches a draft 'Record of the Decision of the Sole Member' (being Lizzano) to appoint PS, SG and PW as directors of Filterbed. Request of SG to sign the form on behalf of Lizzano. | E14/334 | ||
9 February 2010 at 16:10 | Email Dan Moyer (at Equiom) to Charlotte Davidson cc. PS and SG | Email attaches the signed 'Record of the Decision of the Sole Member' | E14/340C | ||
ATTACHMENT | Signed 'Record of the Decision of the Sole Member' dated 09.02.10 | E14/340D | |||
9 February 2010 at 17:07 | Email Charlotte Davidson to Jaan Larner, EOS and KM cc. ND and Luke Morris | Email states that Lizzano was enforcing NGM's Debenture dated 15.01.10. The email attaches a stock transfer form signed by NGM transferring its shares in Filterbed to Lizzano; the signed Record of the Decision of the Sole Member to appoint further directors of Filterbed. Email states that, "given the current situation it would make sense for your clients to resign" and attaches draft resignation letters for KM and EOS. | E14/341 | ||
ATTACHMENT | Signed 'Record of the Decision of the Sole Member' dated 9 February 2010 | E14/342 | |||
ATTACHMENT | Signed stock transfer form. | E14/343 - 344 | |||
ATTACHMENT | Draft resignation letter for EOS. | E14/345 | |||
ATTACHMENT | Draft resignation letter for KM. | E14/346 | |||
9 February 2010 at 17:08 | Email Charlotte Davidson to Jaan Larner cc. Nick Davis | Email attaches the completed stock transfer form. | E14/341 | ||
ATTACHMENT | Completed stock transfer form dated 09.02.10. | E14/341A-B | |||
9 February 2010 at 18:16 | Email Charlotte Davidson to Jaan Larner cc. Nick Davis | Corrects a typo in the 'Record of the Decision of the Sole Member.' | |||
ATTACHMENT | Corrected 'Record of the Decision of the Sole Member.' | ||||
10 February 2010 at 09:12 | Email KM to PW | KM states that he is available on his mobile and awaiting a call from PW and PS | |||
10 February 2010 at 11:12 | Email Samantha Leonard (PW's PA at GHP) to EOS, KM and PS cc. ND and PW | Email attaches letter calling a board meeting of Filterbed. | E14/381 | ||
ATTACHMENT | PW’s letter calling for a board meeting of Filterbed | E14/382 | |||
10 February 2010 at 17:11 | Email Frances Carey (MdR) to PW | States that further time of £26,250 has been put on the clock since £15,000 billed for work up to 15.01.10. Further work relates to work on preparing shareholders agreement, fixed loan agreement, Heads of Terms etc. | E14/384-385 | ||
11 February 2010 at 13:06 | Email JM to KM | Confirms that Charles Douglas will not be able to get the money in time. States that KM cannot attend the meeting with PW – “You must be unwell / uncontactable…” Advises KM to get a QC “on board; | E14/394 | ||
11 February 2010 at 15:59 | Email Luke Morris to PS cc. ND, PW and Alisa Kayser | Email records Luke Morris' thoughts on the loan agreement between Winllan (I) Limited and Lizzano. | E14/395 | ||
ATTACHMENT | Draft loan agreement between Winllan (I) Limited and Lizzano pursuant to which Winllan (I) Limited loans to Lizzano £165,000. | E14/398-405 | |||
11 February 2010 at 18:04 | Email Charlotte Davidson to SG cc. ND, PS and PW | Email attaches draft Record of the Decision of the Sole Member (being Filterbed) to approve conflicts of directors in forthcoming board meeting. Request made for SG to sign and return the Record. | E14/408 | ||
ATTACHMENT | Draft Record of Decisions of the Sole Member (being Filterbed). | ||||
ATTACHMENT | Authorisation of Directors' Conflicts Register. | ||||
11 February 2010 at 18:49 | Email PS to Luke Morris cc. ND, PW, Alisa Kayser and AM. | PS requests MdR to prepare a loan agreement between Winllan (I) Limited and Lizzano in respect of the new loan. | E14/437 | ||
11 February 2010 at 18:54 | Email Charlotte Davidson to SG, PW, OS cc. ND | Email attaches draft minutes for the Board Meeting tomorrow | E14/410 | ||
ATTACHMENT | Draft minutes for Board Meeting | E14/411-415 | |||
11 February 2010 at 19:04 | Email Luke Morris to PS, PW and SG cc. MdR team | Email attaches draft loan documentation: - Loan agreement for £1.835 million loan by Lizzano to Filterbed. - Utilisation request for drawdown tomorrow of £1.485 million. - Legal charge over the Surbiton Site. | E14/437A-V | ||
ATTACHMENT | Draft loan: Lizzano to Filterbed for a maximum of £1.835 million. | E14/437B | |||
ATTACHMENT | Draft utilisation request by Filterbed to Lizzano to drawdown £1.485 million. | E14/337O | |||
ATTACHMENT | Draft legal charge by Filterbed in Lizzano's favour over the Surbiton Site. | E14/437P | |||
11 February 2010 at 19:04 and 21:54 | Email exchange between Luke Morris and PS, Alison Pipex and PW | Luke Morris provides draft loan agreement between Lizzano and Filterbed, utilisation request and legal charge over the Surbiton Site in order to complete the property transaction. | E14/439 | ||
12 February 2010 at 10:47 | Email Dan Moyer to Charlotte Davidson cc. SG, ND and PS | Email attaches the signed 'Record of Decisions of the Sole Member' approving the conflicts of Filterbed's directors in meeting on 11 February 2010. | E14/445A | ||
ATTACHMENT | 'Record of Decisions of the Sole Member' (being Filterbed). | E14/445B-C | |||
ATTACHMENT | Authorisation of Directors' Conflicts Register. | E14/445D-F | |||
12 February 2010 | CN’s employment with NGM is terminated. | B2/155/26 | |||
12 February 2010 at 11:28 | Email Luke Morris to SG and Dan Moyer cc. PS, PW and MdR team | Email attaches the loan agreement for £1.835 million between Lizzano and Filterbed, and the legal charge over the Surbiton Site for execution. | E14/446A | ||
12 February 2010 at 12:33 | Email Pamela Munday (of Howard Kennedy) to Guy Wheatcroft cc. PW and PS | Email attaches letter from Howard Kennedy. | E14/449A | ||
ATTACHMENT 12 February 2010 | Letter from Howard Kennedy confirming telegraphic transfer of monies required to complete the purchase of the Surbiton Site. | E14/449B | |||
12 February 2010 at 12:44 | Email KM to Charles Douglas cc. JM | KM asks whether there is a chance of being put in funds “to pay Phillip back” as he has not yet exchanged | E14/451 | ||
12 February 2010 at 13:01 | Email Dan Moyer to Luke Morris cc. PS, PW and MdR team | Email attaches the Loan Agreement and Legal Charge executed by Lizzano. | E14/453 | ||
ATTACHMENT | Legal Charge over Surbiton Site in favour of Lizzano dated 12.02.10. | E2/Tab 9 | |||
ATTACHMENT | Loan Agreement between Lizzano and Filterbed for £1.835 million dated 12.02.10. | E2/Tab 8 | |||
12 February 2010 at 14:32 | Email Alisa Kayser to SG, Dan Moyer cc. PS, PW, ND and Luke Morris | Email attaches draft loan agreement between Winllan (I) Limited and Lizzano for £2 million. | E14/458 | ||
12 February 2010 at 14:39 | Email Samantha Leonard (GHP) to Charlotte Davidson cc. PW, ND and PS | Email attaches signed copies of the Loan Agreement between Lizzano and Filterbed, and a Utilisation Request by Filterbed. | E14/466A | ||
ATTACHMENT | Utilisation Request dated 12.02.10 in which Filterbed request from Lizzano a draw-down of £1,775,000. | E14/466O | |||
ATTACHMENT | Loan Agreement pursuant to which Lizzano agrees to provide to Filterbed a facility of £1.835 million. The agreement has been signed by Filterbed but is undated. | E14/466B-M | |||
12 February 2010 at 15:05 | Email PS to Alisa Kayser, SG and Dan Moyer cc. PW, ND and Luke Morris | Email attaches a schedule setting out the allocation of loans to Lizzano. | E14/466P-Q | ||
ATTACHMENT | Schedule setting out the loans advanced to Lizzano by various Winllan companies. | E14/466R | |||
12 February 2010 at 15:40 | Email Alisa Kayser to PS, SG and Dan Moyer cc. PW, ND and Luke Morris | Email attaches two draft loan agreements between (1) Winllan (I) Limited and Lizzano; and (2) Winllan Leicester Unit Trust and Lizzano. | E14/466S | ||
12 February 2010 at 17:33 | Email PS to Luke Morris and PW cc. ND | Confirms that the property purchase has "just completed". | E14/487A | ||
12 February 2010 at 17:36 | Email KM to Charles Douglas cc. JM, EOS, GP | KM asks whether the deal can be closed over the weekend and expresses surprise that he and EOS have succeeded in buying this much time. “I hope you can refocus the investors so we can cut Phillip and co out on Monday 9.01am” | E14/488 | ||
13 February 2010 at 9:24 | Email KM to EOS, GP, JM and CT | KM sends around NGM team a draft email he would like to send to Charles Douglas today. Draft email starts: “Clearly round one has been won by Phillip “The Tyrant” (would consider alternatives), however there are more rounds to come. If you were to ask anyone who knows me I am a strong man which is founded on the love and respect of my family, friends and colleagues. I therefore wish to not only stay in this fight but win it. There are many reasons to save NGM and before ultimately starting New co. They are as follows …” | E14/490 | ||
13 February 2010 at 11:25 | Email JM to GP, KM, EOS and CT | Attaches letter from MdR and states “I must be clear that our discussions only took place and progressed after I had left GHP…” | E14/490 | ||
13 February 2010 at 12:04 | Email KM to Charles Douglas cc. NGM team | Email that was sent around NGM in draft at 9:24 | E14/492 | ||
14 February 2010 at 20:25 | Email KM to NGM team | “Given the silence of Charles and co we will have to seriously consider our options early tomorrow” | E14/494 | ||
15 February 2010 at 13:59 | Email PW to KM and EOS cc. PS | PW questions whether NGM should be looking to obtain funding from a third party. PW says that Lizzano will not accept any subordination or dilution of its charges over NGM and is considering appointing an Administrator over NGM in order to protect the value of the Patent. "Clearly this is something I wish to debate with you tomorrow however I would encourage you to see both Lizzano and GHP as the future and not allow our relationship to be spoiled by the past. The historic position is not of our making and sometimes it is best to draw a line and move forward." | E14/506 | ||
15 February 2010 at 16:50 | Email ND to PW cc. Charlotte Davidson | Email attaches draft Notice of a Board Meeting in order to confirm the change of Filterbed's registered address. ND states that the signed Notice should be sent to EOS and KM. | E14/511A | ||
ATTACHMENT | Draft Notice of a Board Meeting to be held on 17.02.10. | E14/511B | |||
16 February 2010 | Meeting between PW, KM and EOS | ||||
16 February 2010 at 12:32 | Email EOS to CT | “Just had a meeting with Phillip Wallis regarding Surbiton and NGM, and it looks like there could be a way forward to salvage some deal” | E15/185 | ||
16 February 2010 at 13:23 | Email Samantha Leonard (GHP) to ND cc. PW | Forwards email sent by Samantha Leonard to KM and EOS, attaching the signed Notice of a Board Meeting of Filterbed. | E14/518A | ||
ATTACHMENT | Signed Notice of a Board Meeting. | ||||
16 February 2010 at 14:22 | Email CK to KM | CK asks whether KM met with PW today | E14/547 | ||
16 February 2010 at 14:41 | Email Charlotte Davidson to KM and EOS cc. ND and Jaan Larner | Email attaches: - Written 'Record of Decisions of the Sole Member' to authorise and ratify any director's potential conflict of interest. - Minutes of a Board Meeting held on 12.02.10. - Statutory Books for Filterbed. | E14/519 | ||
ATTACHMENT | Minutes of Filterbed's Board Meeting held on 12.02.10. | E14/521 | |||
ATTACHMENT | 'Record of Decisions of the Sole Member' to authorise and ratify any director's potential conflict of interest at Filterbed. | E14/526-527 | |||
ATTACHMENT | Authorisation of Directors' Conflicts Register. | E14/528-530 | |||
ATTACHMENT | Statutory Books for Filterbed. | E14/531-546 | |||
17 February 2010 at 07:23 | Email EOS to PW cc. PS, KM and CK | EOS outlines two options that the shareholders of NGM have discussed: - NGM to continue with Lizzano / GHP having an option to take 60% of NGM on the provision of funds, with NGM then agreeing to a DMA. - Put NGM into administration and start again with a new company taking ownership of the Surbiton Site or agreeing a DMA. Email also refers to the need to repair "certain relationships". | E15/3 | ||
17 February 2010 at 08:34 | Email PW to EOS cc. PS, KM and CK | PW clarifying that MdR has advised Lizzano to appoint an Administrator over NGM. PW is prepared to listen to a commercial case but this must be on the basis of looking forward, not to the past. | E15/5 | ||
17 February 2010 at 11:55 | Email Jaan Larner to KM | Expresses concerns that Keystone Law’s exposure on fees and states that he cannot provide any further advice or assistance until an interim invoice for at least £12,000 is paid. Email refers to KM recently indicating “in strong terms” that he is willing to consider banKRuptcy and leaving the UK for New Zealand if he cannot resolve the situation with GHP | E15/16 | ||
17 February 2010 16:46 | Email CK to KM and EOS | CK states he has had long conversation with PW and they have until Monday to decide on the way forward. Ends: “If we have to go down this route I don’t want anything left to chance again” | E15/24 | ||
17 February 2010 at 17:45 | Email PW to ND cc. PS | PW explains the following: - that there are ongoing discussions between NGM and CK which will be concluded by the following Monday; and - "It is most likely that we will bust NGM with their "blessing" and set up Newco to go forward. Filterbed will remain with us”. | E15/63 | ||
18 February 2010 at 13:45 and 18:17 | Email exchange between PS, PW and CK | CK first sets out his understanding of the current position and the proposed way forward. PS subsequently responds correcting CK's account: - Lizzano has exercised its charge over the shares in Filterbed and now owns 100% of its shares. - Filterbed is worthless and the overall liability owed to Lizzano remains unaffected. - Filterbed had to complete the purchase of the Surbiton Site in order to avoid losing its deposit. Lizzano has provided the necessary funds to do this. - The guarantees and charge over NGM's Patent remain unaffected. - Lizzano is being advised to appoint an Administrator which will lead to it taking the Patent. - A New Co is to be set up 60% of which will be owned by Lizzano. - The New Co will have a Development Management Agreement with Lizzano with incentives and financial rewards for KM and EOS. This will not provide any cash flow in the short term, which will, instead, depend upon securing value in the project. | E15/68 E15/120 | ||
19 February 2010 at 3:31 | Email KM to Charles Douglas cc. NGM team | KM states that there are many reasons to consider before deciding to start Newco | E15/122-123 | ||
19 February 2010 at 7:21 | Email KM to Charles Douglas cc. NGM team | KM reminds Charles Douglas that NGM owns the Patent and states, “NGM is there for the taking it would require very little to turn it around wouldn’t Newco take all long time to create and hit the ground running putting the investor at risk of losing 2 our pipeline deals and the ownership of the Patent” | E15/124 | ||
19 February 2010 at 9:55 | Email CK to KM | Refers to PS’s email 18.02.10 at 18:17 and states “My read from this … if you can repay the loan … you can get the land back. Administrator would seek to do that”. | E15/129 | ||
21 February 2010 at 8:17 | Email KM to CK and NGM team | States that it was good to talk with Martin and Derek [potential funders] and states, “It was reassuring to hear (sic.) thoughts in particular, their position that weather (sic.) we get Surbiton back or not they wish to move forward if we do great but it is not a deal breaker” | E15/156 | ||
22 February 2010 between 10:00 and 11:43 | Email exchange between KM and PW cc. PS and CK | KM begins email: “Thank you for your understanding and patience over the last week or so, it has been a difficult period for my family, but I understand that we need to move this forward” KM explains that he and EOS will find it difficult to work without receiving a salary until value is achieved. Consequently, they have approached another funder who has asked four questions regarding the strategy to develop the Surbiton Site, GHP's commitment to the project, how much debt will be rolled in to the new company and that all of these matters are set out in a legal document. PW responds to each question. | E15/182-183 | ||
22 February 2010 between 11:52 and 11:53 | Email exchange between KM and CK | CK asks who ND is. KM responds “… an asshole basically”. CK states that he can make the meeting the next day “… if we need to drag the time out further” | E15/186 | ||
23 February 2010 | Meeting between CK, EOS, KM, PW and ND at MdR Offices | ||||
23 February 2010 at 11:16 | Email Charlotte Davidson to Samantha Leonard cc. ND | Email explains that original Drawdown Request or Loan Agreement were not received by MdR. Email reattaches documents to be resigned. | E15/195A | ||
23 February 2010 at 12:37 | Email Samantha Leonard to Charlotte Davidson cc. ND | Email attaches resignation documentation. | |||
ATTACHMENT | Signed Utilisation Request by Filterbed to Lizzano for £1,775,000 dated 12.02.10. | ||||
ATTACHMENT | Signed Loan Agreement between Lizzano and Filterbed for facility of £1,835,000. | E2/Tab 8 | |||
23 February 2010 at 12:58 and 13:16 | Email exchange between PW, KM and EOS | PW requests whether KM and EOS are available for a strategy meeting on Friday 05.03.10 and KM confirms date. KM states: "Lets get cracking." | E15/196A | ||
23 February 2010 at 14:30 and 16:42 | Emails between KM and CK | KM provides write-up of meeting at MdR offices to send to Charles Douglas for “Middle Easter investor’s representatives” CK replies stating: “Bottom line – we have a couple of days to get things finalised with the ME investors which we are obviously keen to do. However, we must keep working with Phillip in the short term as a back up in case there is any issue with closing a deal with your investors. (clearly not our preferred route!)” | E15/197 | ||
24 February 2010 at 9:09 | Email EOS to Charles Douglas cc. KM and JM | Refers to meeting with PW and states “we played along acknowledging only that if the Developers Agreement and Shareholders agreement for Newco with him is satisfactory we will be happy to discuss this further to bring Surbiton forward ... Phillip wants to see us again on the 5th to agree strategy going forward, but we do sincerely hope that long before then we are in a position with yourselves to get rid of Phillip and start afresh with both Surbiton and other pipeline deals. Bottom line – we have a few days to get things finalised with the ME investors which we are obviously keen to do. However, we will keep working with Phillip in the short term as a back up only in case there is any issue with closing a deal with your investors. (clearly not our preferred route!)” | E15/203 | ||
24 February 2010 at 15:31 | Email PW to ND | Email explaining the key points for the DMA. | E15/231 | ||
24 February 2010 at 15:52 | Email ND to PW | Email confirming that PW's list of key points for the DMA is enough to start together with the "previous heads". | E15/231 | ||
25 February 2010 between 10:33 and 11:02 | Email exchange between CK, KM and EOS | CK asks for an update. KM states that PW needs to be sent NGM’s creditors list today. CK states: “You must keep the Phillip deal alive. If the ME guys do not come through, the only way to salvage any value here is to complete the deal with Phillip. I know its not very palatable for a number of reasons, but it is a way of potentially making some good money”. KM queries whether CK wants his £20k loan plus interest to be on the creditors’ list. CK confirms he does. | E15/234-235 | ||
25 February 2010 at 11:54 | Email EOS to KM cc. PS and KM | EOS sends NGM’s creditors’ list | E15/236-237 | ||
26 February 2010 at 16:06 | Email CK to KM and EOS | CK asks whether KM and EOS have had their meeting with the new backers | E15/244 | ||
1 March 2010 at 10:11 | Email PW, EOS and KM | Postpones Friday meeting to Thursday [04.03.10]. | E15/282 | ||
1 March 2010 at 10:39 | Email PW to ND cc. PS | PW states that he is seeing "the NGM guys" to put a framework together for the future of Surbiton and Newco. PW states that it will be helpful if the draft "SH and DM" agreements can be with them before the meeting. | E15/282A | ||
1 March 2010 at 13:12 | Email Emily MacManus (of MdR) to Jason Lewis at Howard Kennedy | Email requesting confirmation that the purchase of the Surbiton Site has now been registered. | E15/284A | ||
1 March 2010 at 13:44 | Email CK to KM and EOS | CK asking whether KM and EOS had the meeting and what happened | E15/285 | ||
1 March 2010 at 14:14 | Email ND to PW and PS cc. Shika ThaKRar | Email attaches first draft of Shareholders Agreement in respect of Newco. The shareholders are not all identified but the list at Schedule 1 to the draft agreement includes KM, EOS and CK. | E15/286A | ||
1 March 2010 at 13:41 | Jason Lewis to Emily MacManus | Email confirmation from Howard Kennedy that the purchase of the Surbiton Site has not yet been registered. | |||
1 March 2010 at 18:29 | Andrew Wolfin (of MdR) to PW and PS cc. ND | Email attaches first draft DMA and sets out commentary to specific clauses of the agreement. | E15/292 | ||
ATTACHMENT | Draft DMA | E3/Tab 1 | |||
2 March 2010 at 10:23 | Email KM to Charles Douglas cc. CK, EOS and GP | KM summarises position with PW | E15/293 | ||
3 March 2010 | Meeting between EOS, KM, KR and PW | ||||
3 March 2010 at 12:05 | Email KM to GP and CK cc. Georgie Harper | KM sets out an “excerpt” of the conversation he says he had with KR that morning | E15/301 | ||
3 March 2010 between 14:24 and 15:33 | Email exchange between CK and KM | CK asks whether Charles Douglas has come back to KM. KM states that Charles Douglas will represent NGM and fund an administrator. CK states; “So just react to whatever Phillip does in an effort to delay for time while you try and finalise the deal with the new guys?” KM responds: “Yes we want to get him into a position that allows us to take the site back” | E15/307-308 | ||
3 March 2010 at 17:34 | Email GP to KM, CK cc. Georgie Harper | “Having just left Espen I am very encouraged by the news from Charles. Hopefully this is a really positive sign that the “Arabs” will come good and you/we can give Phillip and Kevin the two fingers they so deserve” | E15/309 | ||
4 March 2010 | Meeting with PW and EOS and KM | ||||
6 March 2010 at 12:18 | Email Charles Douglas to KM and Emma Smith | Charles Douglas sets out the history of his involvement since JM’s introduction and states that he “absolutely cannot give you a final date for a decision” as that is outside his control | E15/324-325 | ||
8 March 2010 at 12:11 | Email PW to KM | PW asks what lawyers KM is using for the agreements | E15/327 | ||
9 March 2010 at 9:12 | Email PW to KM | “OK DM agreement ready to go tomorrow and shareholders by the end of the week” | E16/1 | ||
9 March 2010 at 11:48 | Email PW to Sheilagh Giddings | E-mail requests the attached note be provided to KR ahead of a 5pm call. | E16/2 | ||
ATTACHMENT | Note from PW to KR outlining three areas for consideration: - Whether to put NGM into administration. - Whether to develop the Surbiton Site as a marina rather than as a residential property. - The proposed way forward, including recommendation to "bust" NGM and set up a DMA and a new company with a 60:40 shareholding. | E16/3-5 | |||
9 March 2010 at 16:31 | Email Andrew Wolfin to PW and PS cc. ND | Email attaches a revised draft DMA, together with commentary setting out a list of changes. | E16/10 | ||
ATTACHMENT | Draft DMA showing tracked-changes. | E3/Tab 6 | |||
10 March 2010 at 15:14 | Email PW to EOS | PW expresses surprise at EOS and KM not having agreed previously the level of commission payable to Arbuthnot Latham as a result of their introduction of NGM to PW and GHP. The email sets out the negotiation between EOS and James West (of Arbuthnot Latham) between 13.01.10 and 09.03.10. | E16/12 | ||
10 March 2010 at 18:41 | Email PW to Andrew Wolfin | E-mail acknowledges receipt of revised draft DMA. The e-mail ends: "I will advise you of their lawyers very shortly." | E16/15 | ||
10 March 2010 at 18:44 | Email PW to KM and EOS | Attaches draft of the DMA and asks who their lawyers are | E16/18 | ||
ATTACHMENT | Draft DMA | E3/Tab 5 | |||
11 March 2010 at 7:25 | Email KM to EOS and CK | Forwards email from Charles Douglas stating that the position on timing has always been flexible and that he will update once “greater clarity arrives” | E16/21 | ||
11 March 2010 at 09:35 | Email James West to PW | James West informs PW that he is still chasing EOS regarding an agreement on Arbuthnot Latham's commission. | |||
11 March 2010 at 15:14 and 16:05 | Email exchange between PW, ND and PS | PW seeks clarification from ND as to the arbitration and deadlock clauses in the Shareholders Agreement / DMA. | E16/27-28 | ||
11 March 2010 at 18:11 | Email PS to ND and PW | PS seeks further clarification on the Shareholders Agreement / DMA this time focussing on the competition clauses. | E16/27 | ||
12 March 2010 at 11:31 | Email CK to KM | CK states he will look at draft DMA and asks whether there is any further update from Charles Douglas | E16/30 | ||
12 March 2010 at 11:26 | Email ND to PS and PW | ND addresses the queries raised by PS regarding the relevant competition clauses. ND states his assumption that the business of Newco will be to exploit the Patent under licence. | E16/29A-B | ||
12 March 2010 at 16:01 | Email PW to EOS and KM | PW provides his comments on a new powerpoint that will form the basis of presentations to secure “further large funding” | E16/34 | ||
15 March 2010 at 10:32 | Email PW to Dan Moyer (Equiom) cc. SG and PS | PW emails draft shareholders agreement with his thoughts | E16/43 | ||
15 March 2010 at 12:02 | Email Dan Moyer (Equiom) to PW cc. SG | Confirms directors have reviewed the draft agreement and sets out 5 comments | E16/48 | ||
15 March 2010 at 16:22 | Email PW to ND cc. PS | PW sets out his and PS' comments on the draft Shareholders Agreement. - The Newco is now to be an Isle of Man company and "Kerry et al" cannot be directors, although "they" will still own 40% of Newco's shares. K Martin is to set up a UK company which will contract with Newco to be its UK representative. - Lizzano will grant to Newco an annual licence to use the Patent, which licence is renewable at Lizzano's absolute discretion. - Where Newco has subsidiaries, the licence will be granted "specifically" to the subsidiaries for indefinite use. - PW wants amendments to the Deadlock provisions. - "Drag & Tag: We will have the right to drag them with a sale to ensure 100%. They will not have an automatic right to tag although in practice this scenario is highly unlikely." PW then states that he and PS are due to discuss with KM the structure of the companies, so MdR should not start drafting anything yet. | E16/51A | ||
16 March 2010 at 14:02 | Email PW to EOS cc. KM | PW asks how much and how long will it take to complete the registration of the Patent. PW requests a first draft power point presentation for a meeting between PW, KM and EOS on 29.03.10, and chases again for a resolution to Arbuthnot Latham's commission. | E16/60 | ||
16 March 2010 at 14:12 | Email EOS to PW | Email response from EOS in which he confirms that the Patent is pending in the UK and in Europe; that there are no further fees to be paid; and that registration should complete in 2011. | E16/60 | ||
17 March 2010 between 11:05 and 12:07 | Email exchange between PW, KM, EOS and Andy Ryley and Peter Rutter (both of the PRC Group) | PW first notes an Appeal Inspector’s decision to refuse planning consent for external moorings as a result of an application made by Mr Stewart on the adjacent site. KM states that he has telephoned Mr Stewart and arranged a meeting with him on 18.03.10. | E16/64-66 | ||
18 March 2010 at 10:48 | Email Emily MacManus to Jason Lewis cc. ND | MdR requests an undertaking from Howard Kennedy that they will register the Legal Charge grated by Filterbed to Lizzano over the Surbiton Site at the same time as registering the transfer of the Surbiton Site. | |||
22 March 2010 between 12:41 and 14:10 | Email exchange between CK, KM and EOS | CK asks whether there has been an update from the “ME guys”. KM states “no new news”. | E16/83 | ||
23 March 2010 at 20:24 | Email KM to PW | KM takes exception to a further chasing e-mail sent by James West at Arbuthnot Latham to EOS. KM states: "I am doing my best to 'draw the line in the sand' but if this idiot writes to us in this manner again I will give him a piece of my mind that will upset you so for the sake of our new relationship either you sort him out or I will tell him where to go and how!! I am sure you know I mean what I say". | E16/101 | ||
24 March 2010 at 4:21 | Email PW to KM | PW states he is disappointed with KM’s attitude to James West | E16/101 | ||
25 March 2010 at 14:56 | Email ND to PS | Email attaching a clean copy of the draft Shareholders Agreement. This is provided in response to a request by PS for a copy so that he may forward this on to KM. | E16/114A-KK | ||
26 March 2010 at 07:38 | Email PS to KM cc. PW | Email attaches a draft shareholders agreement. PS refers to a meeting with PW "on Monday" and suggests that KM reviews the agreement with EOS and CK ahead of that meeting. PS also states that KM already has the draft DMA. | E16/116 | ||
26 March 2010 at 9:31 | Email CK to KM | CK asks what’s the update from Charles Douglas | E16/116 | ||
29 March 2010 at 14:12 | Email PS to KM cc. PW | Email attaches letter from Lizzano. | E16/164 | ||
ATTACHMENT 26 March 2010 | Letter from Lizzano to K Martin as Director of NGM. Letter states that NGM owes to Lizzano £1.94 million pursuant to its guarantee of Filterbed's debts and states that an administrator should be appointed to oversee the winding-up of NGM's business. | E16/150-151 | |||
29 March 2010 at 15:34 | Email KM to Charles Douglas | Attaches letter from Lizzano and states that if things go well with Martin and Derek tomorrow KM will forward/send the proposed DM and shareholders agreement from PW. KM states: “Ewe have managed to manoeuvre and buy us the required time to protect this investment opportunity, however now is clearly the time to get on the front foot and either try and take back the site or to just go forward with a well funded NGM that brings forward the pipeline, the portfolio deals and all further opportunities” | E16/168 | ||
30 March 2010 at 17:06 and 18:13 | Email exchange between Samantha Leonard, EOS and KM | Email exchange trying to arrange a telephone call with PW to discuss the administration of NGM. | E16/212 | ||
31 March 2010 at 08:23 | Email Samantha Leonard to KM and EOS cc. PW | Email response from Samantha Leonard urging the importance of the call to discuss NGM's administration and requesting confirmation as to everyone's availability, including that of CK. | E16/212 | ||
31 March 2010 at 14:18 | Email EOS to James West cc. KM | Explains discussing with PW the option of “us” (NGM or newco) signing a DMA to bring forward the development of Surbiton in conjunction with PW. On this basis EOS sets out proposed fees | E16/215 | ||
7 April 2010 at 7:43 | Email KM to Charles Douglas | KM emails the DMA stating “I found the DM agreement …” | E16/268 | ||
7 April 2010 at 6:44 | Email Charles Douglas to KM | Responds to KM’s email of 7:43 and states: “Thanks … will (informally!) review, as discussed on the limited basis of trying to come up with a show stopper or two from my travels” | E16/268 | ||
7 April 2010 at 9:32 | Email PW to EOS | Requesting information that is imperative before meeting with “substantial institutions” | E16/288 | ||
7 April 2010 between 12:11 and 12:29 | Email exchange between EOS, KM, PW and Samantha Leonard | Email exchange regarding a power point presentation to be given by KM to "Area" on 30.04.10. | |||
7 April 2010 between 13:31 and 17:59 | Email exchange between KM and CK | KM states “Just had a call from the Arabs they want to proceed and are asking Charles the Lawyer what he needs to defend draft new shareholders agreement, and buy Surbiton back tomorrow and they will pull the trigger on Friday” CL replies stating “We have the time now … lets focus on getting this deal nailed with these guys … what do you need from me?” | E16/299-300 | ||
14 April 2010 at 10:57 | Email CK to KM and EOS | CK states “Can send this [marked up DMA] to phillip later in the day … to keep him ticking along … let me know how things proceed today” | E16/356 | ||
14 April 2010 between 12:22 and 13:07 | Email exchange between EOS, CK and KM | EOS states: “Will let you know as soon as we hear anything re the arabs. What time are you thinking of sending it to Phillip?” CK replies “Probably 4ish to send to Phillip” EOS states that one of the interesting aspects of “their interest” in NGM is that they feel that we should end up with two companies. | E16/357 | ||
15 April 2010 at 9:11 | Email CK to PW cc. KM and EOS | Attaches marked up DMA | E17/1 | ||
ATTACHMENT | Draft DMA between Filterbed and "NGM Newco" with tracked-changes showing CK's comments. | E3/Tab 8 | |||
16 April 2010 at 10:40 | Email EOS to PW | EOS states that he has a potential date to meet "Premier" and asks whether PW would be available to attend. | |||
16 April 2010 at 15:58 | Email EOS to PW | Email forwards e-mail received by EOS from the PPS Group expressing interest in NGM's site at "Kingston Upon Thames", and attaching proposal. | |||
ATTACHMENT 16 April 2010 | PPS Proposal to help NGM to secure planning permission. | ||||
16 April 2010 at 16:01 | Email PW to Andrew Wolfin (of Mishcon) cc. ND | Email forwards email sent by CK to PW, KM and EOS, to which he attaches his comments on the DMA. | E17/25A-BB | ||
ATTACHMENT | Draft DMA between Filterbed and "NGM Newco" with tracked-changes showing CK's comments. | E3/Tab 13 | |||
19 April 2010 at 11:46 | Email PW to CK cc. KM and EOS | PW requests a call with CK and KM to go through their amendments to the DMA | E17/47 | ||
19 April 2010 at 15:22 | Email PW to CK cc. KM, PS and EOS | PW states that he met with KM and EOS and expressed his dissatisfaction in how things are moving along. States that he has been waiting 4 weeks for comments on the DMA. Requests DMA and shareholders agreement executed by Monday 26.04.10 | E17/49 | ||
19 April 2010 at 16:51 | Email CK to PW cc. KM, EOS and PS | Suggests moving deadline until Friday 30.04.10 | E17/50 - 51 | ||
19 April 2010 at 15:44 | Email PW to EOS and KM | Email forwards email PW sent to Peter Rutter at the PRC Group on 19.04.10 at 11:37 which addresses PRC's group fee proposal and the different planning scenarios. | E17/49A | ||
19 April 2010 at 17:08 | Email PW to CK cc. KM, EOS and PS | States that Monday 26.04.10 must stand | E17/50 | ||
19 April 2010 at 18:10 | Email PW to EOS and KM | Email attaches minutes and action list from meeting earlier that day. | E17/53A | ||
ATTACHMENT | Action list from meeting on 19.04.10. Includes the following items: - KM to provide presentation slide explaining the difference between the Patent and the technology found on Google searches. - EOS to provide presentation slide explaining the stage reached in securing the Patent. | E17/53B | |||
21 April 2010 at 8:56 | Email CK to KM cc. EOS and GP | CK refers to a 3rd party investor as well as CHL | E17/66 | ||
21 April 2010 at 9:03 | Email CK to PW cc. KM | Email attaches a marked-up copy of the draft shareholders agreement for "Newco". | E17/67 | ||
ATTACHMENT | Draft shareholders agreement | E3/Tab 9 | |||
21 April 2010 at 12:08 | Email PW to ND cc. PS and Andrew Wolfin (of MdR) | Email attaches shareholders agreement. | E17/67A-JJ | ||
21 April 2010 at 18:04 | Email PS to KM cc. PW | PS states that it is becoming urgent that administration of NGM is dealt with. “If this isn’t dealt with shortly, we are going to have to recommend to Lizzano that they take matters out of your hands in order to protect their position” | E17/72-73 | ||
22 April 2010 at 9:18 and 9:36 | Emails between KM and Bernie Hoffman (administrator) cc. PW | KM and Bernie Hoffman try to speak to each other | E17/105 | ||
23 April 2010 at 10:55 | Email PW to CK | Attaches track change version of DMA and asks for confirmation it can be engrossed | E17/111 | ||
ATTACHMENT | DMA | E3/Tab13 | |||
23 April 2010 at 12:59 | Email PW to CK cc. KM, EOS and PS | PW sets out his comments on the draft shareholders’ agreement | E17/113 | ||
26 April 2010 at 9:55 and 9:58 | Emails between Charles Douglas and KM | Charles Douglas states that the funders are ready to meet. KM states: “As you know it has now been 4 months since we first meet (sic.) with these investors. We including yourself have managed to clean up the opportunity, stall Phillip and all other creditors. This period has now come to an end” | E17/116 | ||
26 April 2010 at 9:44 | Email CN to PW | Identifies potential development opportunity in Andover. Response from PW on 27.04.10 at 10:55 is that this is too small | E17/122 | ||
26 April 2010 at 22:36 | Email KM to CK, EOS, GP and JM | KM sets out his thoughts on how to deal “with tomorrow and Phillip” | E17/119 | ||
27 April 2010 at 16:18 | Email PW to ND cc. PS | “Given the ongoing volatile behaviour of Kerry Martin and pressing matters at Surbiton, the Board of Filterbed have decided to grant the DM agreement to GHP Real estate instead” | E17/129-130 | ||
30 April 2010 at 22:22 and 22:43 | Emails between Charles Douglas and KM, EOS and JM | Charles Douglas gives update on potential investors. EOS responds saying that it sounds encouraging | E17/182 | ||
1 May 2010 to 2 May between 8:46 and 11:04 | Email exchange between Charles Douglas, GP and EOS cc. KM and JM | GP sends Charles Douglas details of pipeline projects | E17/191-202 | ||
ATTACHMENT | Document entitled Brief Description of pipeline deals | E17/203-207 | |||
ATTACHMENT | Document entitled NGM Sustainable Developments dated April 2010 | E17/208-209 | |||
ATTACHMENT | Power point slides dated April 2010 | E17/210-246 | |||
4 May 2010 at 9:16 | Email PS to JL cc. PW | “As part of an internal reorganisation, please would you draft the necessary documents for a transfer of the Surbiton property from Filterbed Developments Limited to another group company” | E17/251 | ||
5 May 2010 between 14:48 and 14:53 | Email exchange between CK and EOS | CK asks for update and the need to close the deal ASAP. States: “Market is getting pretty rough … we don’t want to give them time to think twice” EOS states that he has heard nothing from Charles and nothing from Phillip | E17/262 | ||
5 May 2010 at 4:07 | Email Andrew Wolfin to EOS | Attaches letter terminating EOS’s directorship of Filterbed | E17/264 | ||
ATTACHMENT | Letter terminating EOS’s directorship of Filterbed | E17/265 | |||
5 May at 17:13 | Email Andrew Wolfin to KM | Attaches letter terminating KM’s directorship of Filterbed | E17/268 | ||
ATTACHMENT | Letter terminating KM’s directorship of Filterbed | E17/269 | |||
5 May 2010 at 19:59 | Email KM to CK | Forwards email attaching letter terminating his directorship of Filterbed | E17/295 | ||
6 May 2010 at 8:27 | Email PS to Richard Madeley (JP Morgan) | Confirms name of newco as Hydro Properties Limited | E17/273 | ||
6 May 2010 at 15:57 | Email EOS to Charles Douglas | Provides details of Chelmsford development. Ends: “If we can crack a deal with your investors we can create something truly spectacular” | E17/290 | ||
7 May 2010 at 10:09 | Email PW to CN | Sets out terms of agreement with CN | E17/315 - 317 | ||
10 May 2010 at 17:35 | Email KM to CK | States that he has heard nothing from PW | E17/355 | ||
11 May 2010 between 9:40 and 13:40 | Email exchange between JL, PS cc. PW | JL queries whether disposal of Surbiton is below market value. PS states that it is in line with a market valuation prepared by Strutt & Parker. JL states that Surbiton has to be sold at market value unless the buyer enters into a deed of covenant with Kennet to observe the terms of transfer. | E17/352 E17/361 | ||
12 May 2010 at 19:24 | Email EOS to CK cc. KM | Refers to having had a couple of conversations with Charles today and he is 100% assured that the deal if going to go through | E17/407 | ||
13 May 2010 at 10:54 | Email EOS to Charles Douglas bcc. JM | Update on Chelmsford development | E17/379 | ||
13 May 2010 at 17:58 | Email EOS to KM and JM | “Maybe forward that email to Martin, Derek and Charles. It reinforces the message that unless the investors gets a move on some of our pipeline deals may disappear” | E17/390 | ||
13 May 2010 at 17:17 | Email JM to EOS and KM | “The email does not say they are about to pull out and I don’t think we should give them the impression that this can run on for a bit” | E17/390 | ||
14 May 2010 at 19:24 | Email KM to Charles Douglas, JM and Martin Lovatt | Refers to putting together a short presentation to further a case for an investment in NGM | E17/416 | ||
16 May 2010 at 18:33 | Email Charles Douglas to KM, Martin Lovatt, JM cc. GP and EOS | Responding to email of 14.05.10 at 19:24 – refers to Chelmsford as a starter project and that the project looks good at first blush | E17/423 | ||
17 May 2010 at 10:44 | Email KM to Charles Douglas, Martin Lovatt and JM | Email starts: “As we all know we have been in discussions with one another for almost 5 months with a view to sorting out a deal with the Middle Easter investors. In that time I have managed to (sic.) rid myself of Phillip, and delay the likes of ABP, creditors, and others to maintain momentum of the development and joint venture opportunities we have”. KM stresses the importance of having some material feedback and movement | E17/429 | ||
21 May 2010 | Strutt & Parker Valuation Report | E18/31-59 | |||
21 May 2010 at 11:17 | Email EOS to GP, KM and JM | New opportunity has come up in Otley | E18/74 | ||
21 May 2010 at 19:22 | Email EOS to KM and JM | Suggests updating Chelmsford presentation and putting together a document showing key headlines and figures for other pipeline deals | E18/75 | ||
22 May 2010 at 18:04 | Email EOS to KM, GP and JM | Asks for comments on draft documents for investors | E18/114 | ||
23 May 2010 at 20:32 | Email EOS to Charles Douglas | Sends update of Chelmsford document and pipeline presentation | E18/115 | ||
25 May 2010 at 21:26 | Email KM to Charles Douglas cc. JM and EOS | States that there is a chance of money moving this week | E18/129 | ||
25 May 2010 | CN enters into consultancy agreement to provide services to Lizzano. | B2/157/37 | |||
26 May 2010 | CN’s first invoice to Lizzano £2,171 in respect of 4 meetings 12, 18, 20 and 26 May 2010. | E18/130-131 | |||
29 May 2010 at 8:34 and 8:05 | Email exchange between JM, KM and EOS | JM sends proposed wording of email to Charles Douglas for KM and EOS’s comments. EOS suggest that he and KM are left off the email to Charles Douglas as it is “best if you come across as keen to work with NGM going forward” | E18/183 | ||
2 June 2010 at 6:43 | Email JM to Charles Douglas | Provides headline thoughts on proposed offer for NGM | E19/16 | ||
3 and 4 June 2010 between 21:12 and 14:32 | Email exchange EOS and Mark Phillips (APS Insolvency) | Discussing two potential funders | E19/28 | ||
8 June 2010 at 14:49 | Email MdR to EOS and KM | Attaches letter notifying that receiver has been appointed | E19/76 | ||
ATTACHMENT | Letter notifying NGM Directors that a Fixed Charge Receiver over the Patent | E19/77 | |||
9 June 2010 at 15:24 | Email PW to ND cc.PS | Expresses concern that NGM will continue using the Patent for their own agenda. In anticipation of this PW asks ND or Mary Guinness to prepare a robust letter setting out the legal position and the consequences should they continue to claim use of the Patent | E17/322 | ||
10 June 2010 | CN signs consultancy agreement. | B2/157/37 | |||
21 June 2010 | Letter from Keystone Law to KM and EOS referring to statutory demand on 20.05.10 and threatening winding up petition in respect of their outstanding fees | E19/240 | |||
25 June 2010 | Letter from Keystone Law to KM and EOS requiring and explanation regarding the refinancing of NGM and proposals for payment of the outstanding invoices | E19/290-292 | |||
25 June 2010 | Letter from MdR to KM and EOS responding to contention that NGM did not receive a formal demand for monies owed to Lizzano | E19/297-299 | |||
29 June 2010 at 10:59 | Email KM to CT | “As we mentioned we are close to signing the Heads of Terms on the option agreement regarding the development opportunity in Chelmsford” | E19/459-460 | ||
2 July 2010 | Letter from NGM to MdR | E20/7 | |||
5 July 2010 | Letter from MdR to KM and EOS | E20/14-15 | |||
6 July 2010 at 5:12 | Email JM to EOS KM and GP | Questions whether the sale of Surbiton can be construed as an arms length transaction and ends: “One hesitates to use the word fraud but it looks like fraud to me and should be reported to the authorities” | E20/19 | ||
6 July 2010 | Letter of complaint to the SRA | E20/16-18 | |||
6 July 2010 at 13:29 | Email KM to GP and JM cc. Charles Douglas | Attaches draft letter to the SRA regarding MdR’s behaviour throughout the last 6 months | E20/65 | ||
14 July 2010 | CN signs sub-consultancy agreement with Northcroft to provide project management and quality advice on site specifically for the Surbiton project. | B2/157/39 | |||
15 July 2010 | Bidding process for Patent closed and £20,000 from Lizzano was accepted. Letter regarding intellectual property sent on 30 July 2010 from MdR. | ||||
21 July 2010 | Invoice from Keystone Law with breakdown showing 59.6 hours between 01.01.10 and 14.02.10 | E20/285-288 | |||
27 July 2010 | Email CK to KM and EOS | CK asks for update on Chelmsford | E20/334 | ||
30 July 2010 | Letter from MdR to NGM stating any attempt by NGM to hold itself out as the owner of the Patent would be actionable as trade libel | E20/391 | |||
29 September 2010 | MdR’s letter to SRA in response to NGM’s complaint | E20/467-469 | |||
15 October 2010 | Floodline incorporated. | ||||
16 October 2010 at 11:13 | Email Clive Petty to EOS | “It is proving difficult to interest parties in what is a very tight market” | E20/204 | ||
20 October 2010 | Letter from MdR that action would be taken against EOS and KM unless certain undertakings provided. | ||||
10 November 2010 | Letters from MdR demanding repayment of £952,413.92. | E21/1-3 | |||
14 November 2010 | Lizzano serve Statutory Demand on KM | E21/7-11 | |||
24 November 2010 | Lizzano serve Statutory Demand on EOS | E21/12-16 | |||
6 December 2010 | KM’s application to set aside Statutory Demand | E21/42-50 | |||
17 January 2011 | SRA closes its file and informs NGM and MdR in writing that it is satisfied there is no evidence of professional misconduct in this matter. | E21/447A-C |