Barrowfen Properties Ltd v Patel & Ors

The action in which this application arises is one of a number of claims brought in different jurisdictions between members of a wealthy family which holds an extensive network of companies around the world. The first defendant, Girish Patel, is a member of the family. I will refer to him as Girish without any disrespect to him. The shares in the claimant company (Barrowfen) are held by vehicles owned by or for the benefit of various family members. Girish is a former director of Barrowfen. The second defendants (Stevens & Bolton) are a solicitors’ firm which acted for the company at one time. The third defendant (Barrowfen II) is a company controlled by Girish.

The claim is an action for damages and/or equitable compensation and/or an account. It relates to what the claimant contends was an attempt by Girish to take or maintain sole personal control of Barrowfen. The idea was to thereby gain control of a valuable commercial property in Tooting, South London which was held by Barrowfen. The issues include, amongst other things, allegations that before 2015 Girish had improperly removed a BVI company called Bedford Development Ltd from the register of members and that he forged a purported letter of resignation of one of his brothers (Suresh) as a director of Barrowfen. The issues also include a

The application relates to the circumstances into which Barrowfen was placed into administration in 2016 by Barrowfen II. The claimant contends that this arose after the initial attempts by Girish to take control had been thwarted. In its draft Amended Particulars of Claim Barrowfen pleads a case against Stevens & Bolton in respect of this episode on three grounds. They are dishonest assistance, deceit and unlawful means conspiracy.

Stevens & Bolton applied to strike out the allegations. Amongst other things Stevens

The principles applicable to considering the strike out application were not in dispute and are familiar. The case was argued on the basis of the Amended Particulars of Claim. To the extent that there is a difference between considering the striking out of an existing allegation as distinct from deciding whether to give permission to make an amendment, that distinction does not matter in the present case. Put briefly, the relevant principles are that the court will strike out a statement of case if it discloses no reasonable grounds for bringing the claim, if it is an abuse of process, or if it has no real prospect of success. I will refer to the order I am asked to make as a strike out, rather than always adding that it would also include refusal of amendments.

Furthermore, all three grounds which are in issue involve allegations of fraud and/or dishonesty. These are treated with particular care by the court and fraud is one of the matters which must be specifically pleaded (CPR Part 16, PD para 8.2).

In JSC Bank of Moscow v Kekhman[2015] EWHC 3073 (Comm) at [12]–[23],

Turning to the elements of the three grounds relied on, they were not addressed in detail orally and were not in dispute. I summarise them below by reference to what the claimant has to plead in each case. For dishonest assistance, based on GroupSeven Limited and Ors v Notable Services LLP & Ors [2019] EWCA Civ 614, the claimant has to plead:

For deceit, based on Derry v Peek[1889] UKHL 1the claimant has to plead:

For unlawful means conspiracy, based on Kuwait Oil Tanker v Al Bader [2000] 2 All E.R. (Comm) 271 (at 108) and Elite Properties Holdings Limited & Anor v BarclaysBank plc [2019] EWCA Civ 204 the claimant has to plead:

In fact nothing turns on the individual elements of these grounds. That is because the matter was argued on the common ground footing that all three grounds require dishonesty or its equivalent on the part of the defendant. In terms of the breakdown set out above, the points are element (iii) of dishonest assistance, elements (ii) and (iii) of deceit, and element (iii) of unlawful means conspiracy. It is this feature which the second defendant contends is lacking and therefore justifies the strike out. If I am not satisfied that an inference of fraud/dishonesty is more likely than one of innocence or negligence then I should strike out one or more of these three grounds, whereas if I am satisfied that it is, then the relevant ground(s) ought to go to trial.

As I have said, the claimant contends that by the summer of 2015 the attempts by Girish to take over Barrowfen had been unsuccessful and so Girish activated a plan to acquire direct control of Barrowfen’s main asset by putting the company into administration.

By summer 2015, although the BVI company Bedford Development Ltd had been removed from the register of members of Barrowfen, by an order dated 16^th February 2015, Girish was ordered to rectify the register so as to acknowledge that Bedford was a shareholder. Also by an order dated 29th June 2015 Suresh was declared not to have resigned as a director.

From 7^th August 2015 onwards Barrowfen had three directors, Girish, Suresh and their nephew Prashant. The majority of the shares were not controlled by Girish.

Barrowfen was indebted to Zurich Assurance Ltd for about £850,000. In a letter dated 22^nd September 2015, Zurich wrote asking for proposals for repayment. The loan had been a 10 year loan in 1990. The loan was secured by a debenture with fixed and floating charges over all of Barrowfen’s assets, including the Tooting property. That property had a book value of £3.75 million although it may have been worth much more. The claimant’s case is that Girish had access to better information about the value than anyone else, and did not share it.

On 6^th October 2015 Girish informed Prashant and Suresh about the Zurich letter and offered to buy out the other Patel family shareholdings, failing which he said he could see no alternative other than liquidation with costs of about £500,000. On 14^th October the solicitors for Suresh and Prashant (Kingsley Napley), wrote to Stevens & Bolton in response to Girish’s letter of 6 October 2015, seeking documents from Girish relating to the development of the Tooting property so that they could consider whether selling or developing the property was in the best interests of Barrowfen.

Meanwhile, unknown to the other directors, Girish met an insolvency practitioner

In an exchange of emails on 28^th October between Girish and William Radmore, also unknown to the other directors of Barrowfen, Girish explained that he was proposing to set up a new company to take an assignment of the loan and debenture from Zurich. This new company is the third defendant, Barrowfen II. Girish asked that Mr Radmore accept an appointment as a director of Barrowfen II with his son Kiraj. Girish wrote that he had been advised by Stevens & Bolton that he could not be a

Stevens & Bolton acted for Girish and Barrowfen II in connection with taking the assignment of the loan and debenture from Zurich. This is shown by an email dated 30 November 2015. The assignment to Barrowfen II was completed on 2 December 2015.

On 1 December 2015 Stevens & Bolton were removed as solicitors to Barrowfen. The claimant says that was because Prashant and Suresh were now in operational control of Barrowfen. Stevens & Bolton were informed on 2 December 2015. I should record that this is the claimant’s case. Stevens & Bolton’s position is that they ceased to act in April 2015.

On 4 December 2015, Stevens & Bolton contacted Mr Coakley to inform him that Barrowfen II had taken an assignment of the debenture from Zurich and that Barrowfen may be placed into administration. On the same day Stevens & Bolton wrote to Kingsley Napley stating that Girish would be willing to consider an MVL if a share sale could not be agreed, and suggesting a meeting with Prashant to see if a “a buy out or, in the alternative, an MVL might be progressed”. The Stevens & Bolton letter includes the following:

“There is of course some urgency regarding the future of the Company [Barrowfen]. As you will know, and as we have written to you about in our first letter of today's date, the Company has been threatened with winding up proceedings for unpaid business rates. The Company has contested the liability and there is a pending application to set aside the Liability Order on which the winding up proceedings were based. The Company was also threatened with enforcement action by Zurich, the first charge holder. However, that charge has been bought out and has been assigned to Barrowfen Properties II Limited (see the attached notice of assignment) so there is no immediate threat to wind up the Company from Zurich.”

The reference to unpaid business rates is part of the context but does not need to be examined further.

A key part of the claimant’s case is based on the last sentence in that passage. The claimant submits that the letter does not mention the plan, which by then had already been formulated and which Stevens & Bolton was well aware of, to use the assignment of the charge to Barrowfen II in order to place Barrowfen into administration. Therefore, it is said, in that context Stevens & Bolton’s reassurance that there is no immediate threat to wind up the company from Zurich presents a deliberately misleading half-truth.

On 8 December 2015 Mr Coakley sent an engagement letter relating to the potential appointment of joint administrators to Mr Radmore, copied to Stevens & Bolton.

In response to Stevens & Bolton’s letter of 4 December, on 9 December 2015 a meeting took place between Girish, Mr King of Stevens & Bolton and Prashant. It was also attended by Mr Baker of Stevens & Bolton and Ms Le Breton of Withers. There is dispute about the purpose of the presence of these two individuals. The main subject matter of the meeting was the question of a buy-out of Barrowfen shares by one or other shareholder and the right method for valuing the shares failing which it was discussed that an MVL would have to be pursued.

Towards the end of the meeting (meeting note para 15), Mr King of Stevens & Bolton asked Prashant whether there was anything else he wished to raise. Prashant said that he would like to discuss Barrowfen’s finances as he had no information as regards creditors and required some input from Girish. Later (meeting note para 25) Prashant asked if he could see the terms of the Zurich loan and asked: “whether there is a particular position as regards to this assignment.” Mr King of Stevens & Bolton replied:

“there was nothing in particular to tell P about this, accept (sic) Zurich was pushing for payment. RWK said that within the context of an MVL, GP’s side see the proposal of a buyout as the most attractive option and the assignment of the loan was a measure taken to prevent Zurich from enforcing the loan, which it looked certain to do….. P said that he did not want a situation where the company defaults as a result of the assignment and RWK said that he could put forward a cash flow statement to show all the loans.”

This is the other key plank of the claimant’s case. The claimant contends that despite Prashant’s direct question to Mr King about the terms of the Zurich loan and in particular the assignment to Barrowfen II, Mr King presented another deliberately misleading half-truth, concealing the plan to enforce the loan by Barrowfen II by placing Barrowfen into administration.

At the end of the meeting Mr King offered to provide the cash flow statement showing the exposure of Barrowfen in respect of the loan and other liabilities.

After the meeting of 9 December 2015 Girish did not, as the claimant says Prashant had been expecting, make an offer to buy out the shares in Barrowfen. Prashant heard nothing further from him for two months. Stevens & Bolton also did not provide the cash flow statement that Mr King had offered to provide at the end of the meeting.

In fact on 17 December 2015, unknown to the other directors Prashant and Suresh, Stevens & Bolton emailed Girish, Mr Radmore and Kiraj stating “As you are aware, we are lining up all documents required in connection with the appointment of administrators”.

Then, by letter dated 12 February 2016, Girish wrote to Suresh, Prashant, and two other brothers Rajnikant and Yashwant. The letter stated that as a director he was

“seriously concerned about the future of the company” and asking for an “unequivocal response to the proposals that I have previously made regarding the purchase of your families’ shares … and, in the alternative, a MVL”. He continued:

“If I do not have a clear response from both of you by no later than 10am on Monday 15 February 2016, London Time, I will be forced to consider whether I can continue to act as a director of the company and I may have to take steps to protect my interests as a substantial creditor of the company”.

From the point of view of Prashant and Suresh, this was out of the blue.

Also, on 12 February Stevens & Bolton informed Mr Coakley’s solicitors that Barrowfen II was proceeding with the appointment of administrators.

On 16 February Stevens & Bolton wrote to Kingsley Napley enclosing (i) a letter from Girish seeking repayment of a loan from Barrowfen (ii) a letter of demand from Barrowfen II, seeking immediate repayment of the loan now owed to it and (iii) a letter of resignation from Girish as a director of Barrowfen.

On 17 February a notice of appointment of administrators by Barrowfen II was filed in the High Court. Mr Coakley and Mr Bowell of the firm MBI Coakley were appointed as joint administrators.

On 19 February Kingsley Napley, as solicitors for Bedford, Suresh and Prashant made an offer to provide sufficient funds to pay the debts and expenses of Barrowfen and thereby rescue it as a going concern. This approach was opposed by Stevens & Bolton, Barrowfen II and Girish. However it became clear that the joint administrators were at least taking the offer seriously.

In an email dated 15 April 2016 Girish complained to Mr Bowell that rescue was contrary to the agreement he had reached with Mr Coakley. The email states:

“in conjunction with Stevens & Bolton last year in relation your appointment as administrator. I had specifically agreed with Dermot on the exercise that Barrowfen was entering into and the role MBI Coakley will provide. Dermot had agreed to this.

Your email is contrary to the agreement reached and myself had again checked with Stevens & Bolton officer who had confirmed that your firm fully understood the end exercise to be achieved by myself.”

Mr Bowell responded by email on the same day stating that there was no “back deal”. The notes of a meeting dated 19 April 2016 record Stevens & Bolton’s view of Mr Bowell’s email:

“Mike’s email had come as a bit of a shock. It presented a very blunt view and he didn’t think it was very helpful but this was probably not the time to go into it”.

In the circumstances the joint administrators made an application to Court for a direction that they could cause Barrowfen to enter the loan agreement with Bedford in order to effect its rescue. That was approved by an order on 8 July 2016.

Therefore, contends the claimant, Girish’s plan, to put Barrowfen into administration and thereby acquire the Tooting property for less than true value, failed. Nevertheless the claimant contends that Barrowfen suffered substantial financial loss as a

The cases pleaded against Stevens & Bolton interrelate with one another. I will try to summarise them, without being too lengthy about it. In the end, as I shall try to explain, the issues to be resolved on this strike out turn on the 4^th December letter and the 9^th December meeting.

Starting with the unlawful means conspiracy claim, the agreement or combination is pleaded at paragraphs 94 and 109 of the Amended Particulars of Claim.

“94 In around October 2015, by which date Girish would have known that he was about to lose control of Barrowfen, Girish and Stevens & Bolton entered into a common understanding or agreement, which was joined by Barrowfen II upon its incorporation, (together, the “Conspirators”) that they would, by using unlawful means, and with an intention to cause loss to Barrowfen, procure the entry of Barrowfen into administration in order to:

94.1.

enable Girish, or an entity under his control, to take control of the Tooting Property by a purchase from the administrators, thereby achieving Girish’s aim of maintaining control over Barrowfen’s business and assets without the need for the consent of the majority of Barrowfen’s directors or shareholders;

94.2.

ensure that the purchase of the Tooting Property by Girish, or an entity under his control, was at a price that was (i) below the price at which the majority of the directors or shareholders would be prepared to sell the Tooting Property to Girish or his nominee; and/or (ii) below market value in that the price would inevitably be depressed because of the depressed nature of the sale and because other potential bidders would not have Girish’s knowledge of the development proposals; and/or

94.3.

prevent or delay the investigation by Barrowfen’s directors and/or by a liquidator appointed in a members’ voluntary winding up of any legal claims that Barrowfen might have; and

94.4.

deprive Barrowfen of the true value of the Tooting Property.

….

109.

As pleaded above, in around October 2015, the Conspirators reached an agreement or understanding (joined by Barrowfen II upon its incorporation on 2 November 2015) that they would, with an intention to cause loss to Barrowfen, use unlawful means to procure the entry by Barrowfen into administration for the reasons set out in paragraph 94 above.

The unlawful means are pleaded in paragraphs 107n to 107s, 108b to 108f and 110. In summary they are alleged to be:

The intention to injure is pleaded in paragraphs 94 and 98B. In substance the points relied on are that Stevens & Bolton:

Damage is pleaded at paras 117 and 117A. I will come back to that.

The claimant’s case that the necessary inference of fraud/dishonesty is more likely than one of innocence or negligence is advanced addressing two relevant periods separately. The first period is while Stevens & Bolton acted for Barrowfen (until 1 December 2015) and the second period is after Stevens & Bolton ceased to act for Barrowfen. In the first period it is alleged that the firm:

The points which the claimant relies on arising from the second period are that the firm:

In my judgment the critical point is sub-paragraph (ii) to the previous paragraph, in other words the allegations about the letter of 4^th December and about what was and was not said at the meeting on 9^th December. Without these, the remaining points relating to both the first period and the second period, individually or together, may well make out a case for a conflict of interest (in the first period, assuming Stevens & Bolton did then act for Barrowfen) and provide important context for what happened,

The dishonest assistance claim is pleaded in paragraph 112 of the Amended

Unpacking these cross-references the breach of duty relied on is the breach of Girish’s fiduciary duty to Barrowfen when, as the claimant puts it, he set in motion and continued the plan to put Barrowfen into administration without informing his fellow directors or giving Barrowfen, through his fellow directors, the opportunity to discharge the loan and redeem the debenture.

The claimant contends Stevens & Bolton assisted Girish’s breach of fiduciary duty by:

The claimant contends that the assistance was dishonest in that Stevens & Bolton did not act as an honest person would in the circumstances, because an honest solicitor in such circumstances:

Without diminishing the seriousness of allegations (i) to (iii), and bearing in mind Girish has not waived privilege, while these three points will be relevant to the alleged conflict of interest and also provide context, they do not alone or together, make an inference of dishonesty on the part of Stevens & Bolton more likely than not. As with the first ground, the critical issues are still the 4^th December letter and what happened on 9^th December.

Turning to the deceit claim, it is firmly based on the 4^th December letter and 9^th December meeting. The fraudulent misstatements by Stevens & Bolton on which the deceit claim is based are pleaded at para 108B of the Amended Particulars of Claim. They are the statements made in the letter and at the meeting. The pleaded case is that the misstatements were deliberate half-truths. I have already summarised the way that is put above but nevertheless, I will set out how the claimant puts its case in the deceit context in particular. It is this way:

The claimant contends that Stevens & Bolton intended that Barrowfen would rely on the misstatements, relying in particular on what happened at the meeting of 9 December 2015, when the alleged misstatement was made by Mr King in response to specific concerns raised by Prashant about the reason for the assignment and not wanting Barrowfen to default as a result of the assignment. The claimant also contends that as a general proposition, solicitors do not generally make statements to opposing parties on behalf of their clients which are not intended to be relied on.

In terms of reliance, the claimant contends that Barrowfen did rely on the misstatements by refraining from taking immediate steps to repay the loan to Barrowfen II. It is said that given that the main discussion at the meeting of 9 December 2015 concerned Girish’s proposal to buy out the other shareholders in

On Stevens & Bolton’s behalf it is pointed out that the claimant has changed the way this aspect of the case is put a number of times and in significant ways. Originally the assignment to Barrowfen II was pleaded as a concealed assignment which was never disclosed or discussed whereas now, as part of the amendments to advance the case set out above, the claimant “hurriedly” seeks to delete it. These points are legitimate observations to make but in my judgment they do not go to the heart of the matter.

It is also pointed out that at the relevant dates (4^th December and 9^th December) Stevens & Bolton was not acting for Barrowfen and owed no duty to Barrowfen. I will come back to that.

The objections to the pleaded case are (i) the statements Mr. King made were wholly accurate, (ii) statements were not made to Barrowfen and any alleged claim is not Barrowfen’s but that of the shareholders, (iii) there could be no reliance upon any alleged statement at the meeting because Prashant made clear that the meeting was without prejudice, (iv) any statement was not relied on by Barrowfen at all as a matter of fact for a number of reasons and if there was any reliance it was by the shareholders in failing to raise funds to pay Barrowfen II, (v) in fact the deceit claim was compromised by a settlement agreement dated 6^th March 2019 and (vi) the causal aspect of the loss claims is unclear and unparticularised.

Before going any further, I reject points (iii), (v) and (vi) as free standing grounds for striking out. On point (iii), it is reasonably arguable that any privilege has been waived and also arguable that the exceptions to the without prejudice privilege recognised by Walker LJ in Unilever v Procter & Gamble [2000] 1 WLR 2436 apply.

On point (v), the argument about the settlement is that although at clause 1(f) the agreement expressly excludes this action from its ambit (defined as the Barrowfen Claim), the deceit claim was not part of this action when the agreement was entered into and so is not excluded from its scope. However in the agreement the Barrowfen Claim is described as a claim for breach of duty, unlawful means conspiracy and dishonest assistance. Given the intimate link between the way the deceit claim is advanced and the unlawful means conspiracy and dishonest assistance claims, it is, at least, reasonably arguable that the deceit claim is not caught by the agreement. Also relevant, although it may not be determinative, is that Barrowfen itself is not a party to the agreement.

In relation to point (vi), the pleaded losses are put in a terse manner and the claimant would be entitled to further information but this deficiency does not go to the heart of the pleaded case. It could readily be resolved well before trial and does not prevent the defendant firm from knowing the case they have to meet.

Before going further, I should note that counsel for Stevens & Bolton submitted that important aspects of the claimant’s case as it was advanced at the hearing are still not pleaded, despite the number of iterations through which the pleading has passed. The unpleaded points identified were (a) the alleged failure to provide the terms of the Zurich loan to the majority shareholders as an act or omission involving Stevens &

I agree with the submission. These aspects of the way the case was put are not pleaded. It does not reflect well on the claimant’s approach to this litigation. However they are not the core issue, they are matters of context. Referring to them at this stage will not save a pleading which should be struck out, but if the grounds against Stevens & Bolton are to go forward to trial then these matters will need to be pleaded properly.

I turn to examine points (ii) and (iv) together since they interrelate. One common theme in the submissions on behalf of Stevens & Bolton is that the statements were

In my judgment, despite these submissions, it is reasonably arguable that what was said at the meeting and in the letter was not solely directed to their recipients in their capacity as shareholders, but can be said to have been directed to the company and to its other directors Prashant and Suresh in that capacity. At the meeting on 9^th December Prashant was a director of Barrowfen and present at the meeting was the company’s solicitors Withers. I will not strike out the plea on this ground.

A different point is the submission that one can tell from the note of the meeting that Prashant was not relying on the earlier statement in the 4^th December letter in the manner alleged, rather he wanted sight of the documents concerning the loan and so on because he was considering the risks and no doubt wanted to look at them with his solicitors. That is a reasonable point but to accept it at this stage would be to conduct a mini trial of the issue, which is not the court’s function.

A further point which was urged repeatedly by counsel for Stevens & Bolton was that the alleged reliance stretched credulity because the significance of the alleged representations seems to have been forgotten by the claimant. That is because the allegation in the original Particulars of Claim, with a statement of truth signed by Prashant, was that Girish was in breach of duty for failing to disclose the assignment itself. It is pointed out that this was plainly false on the documents now sought to be prayed in aid to support the plea in its current form. This is a strong point which could be put to Prashant at trial in cross-examination, but I am not satisfied it is sufficient to justify the strike out at this stage. The case the claimant (now) wishes to advance is that the statements in the letter and the meeting were sufficiently soothing to cause Prashant not to regard the assignment as something which mattered or which he had to worry about. Considering the inherent likelihoods, in my judgment that has an inherent degree of plausibility. Whether it stands up at trial is another matter.

The final point in this context is the submission that what in fact happened, to the extent the statements were relied on at all, was that they were relied on by the shareholders. Paragraph 108B.5 of the Amended Particulars of Claim pleads the claimant’s case as follows:

“108B.5 Barrowfen relied upon the Misstatements by refraining from taking immediate steps to repay the Loan to Barrowfen II. If Prashant and Suresh had known that Barrowfen II intended to enforce the Loan and Charge by placing Barrowfen into administration, they could and would have repaid the Loan by remitting monies to Barrowfen II within a short time period.”

On behalf of Stevens & Bolton, it is submitted that this allegation that Prashant and Suresh could have repaid the loan is about them acting in their capacity as shareholders. Barrowfen could not refrain from taking steps to repay the loan because it did not have sufficient funds to meet its debts as they fell due. The fact, as pressed by the claimant, that it was not balance sheet insolvent, does not alter the position that at the relevant time Barrowfen did not have cash assets available to repay the loan.

These are further reasonable points but I do not agree that it is as simple as the submission makes out to say that a company with a debt concerned about enforcement of a debt cannot refrain from taking steps to repay the debt because it does not have sufficient available funds. The company, which will generally know much more about the debt than the shareholders, can ask its shareholders for help.

There was a debate about whether administration was a means of enforcement of a debt. It was said on behalf of Stevens & Bolton that it was not. The significance of the point was that both the letter and the words spoken at the meeting refer to enforcement and so, I think it was argued, the concealment (if that is what it was) of the risk that administrators could be appointed under the debenture now held by Barrowfen II was not misleading because it was not a means of enforcement. I do not accept that. The issue is not about the legal categorisation of remedies. From the point of view of a reasonable person reading the letter or attending at the meeting, putting in train some kind of insolvency process such as appointing an administrator would be regarded as a means of enforcement. The letter itself characterises Zurich’s threat to wind up the company as enforcement action by Zurich.

So for these reasons I reject points (ii) and (iv) as a basis for striking out the plea.

So having dealt with all the other issues, I come to the heart of the matter, which is point (i). On Stevens & Bolton’s behalf it is submitted that since everything Mr King actually said at the meeting or in the letter was accurate, in order to succeed the claimant must be able to contend that he came under a duty to add to his statement(s) and that his failure to add to the statement(s) amounted to dishonesty. It cannot do so on reasonable grounds. In any event (or alternatively) an inference of innocence or lack of care is just as likely, if not more likely, than any possible inference of dishonesty. The point is repeated that Stevens & Bolton owed no duty to Barrowfen at the critical time.

In relation to lack of duty owed by Stevens & Bolton, in my judgment this is irrelevant and potentially misleading. No-one is entitled to dishonestly and deliberately make a false representation to another person, intending that they rely on that to their detriment and, assuming they do rely on it, commit the tort of deceit, but then attempt to excuse it on the ground that no duty was owed to their victim. Lawyers have no better right than their own client to commit deceit, so as to favour their own client’s ends to the detriment of a rival. Or putting it the other way around, Stevens & Bolton did owe a duty to Barrowfen at the relevant time, that duty being the duty everyone owes everyone else not to practice deceit.

The claimant submits that a half-truth or fragmentary statement may amount to deceit if it is, and is intended to be, suggestive of a falsehood. For this the claimant refers to Peek v. Gurney (1873) LR 6 HL 377 at 403 and to Smith New Court Securities Ltd v.

Counsel for Stevens & Bolton did not deny the principle but submitted it did not apply on the facts. That is the issue. If it is more likely than not that the statements which were made can be taken to amount to implicit reassuring representations about what Barrowfen II might do then the claimant’s case is sufficiently well founded to go to trial. That is because, in terms of knowledge, there is clear evidence and a strong arguable case that Stevens & Bolton were well aware of the plan by Girish to use Barrowfen II, having taken the assignment from Zurich, to appoint an administrator over Barrowfen and thereby acquire the Tooting property from the administrators. Whether the administrators had or had not entered into what would have been an improper agreement to that effect is not the issue. The evidence supports a clear inference that Stevens & Bolton were well aware of Girish’s plan at all material times.

I agree that what is stated expressly in the letter of 4^th December is literally true. The letter was one piece of correspondence between law firms in a hard fought battle between experienced members of a very wealthy family, who were being well advised by their own lawyers. The writer of the letter was entitled to have in mind that the clients who would receive the letter would be advised by their own lawyers about it. The letter makes no express representation about what Barrowfen II might do and, in my judgment, nor is it more likely than not that the letter makes an implicit representation about that either. An experienced lawyer acting for the recipient in this context might well have taken the fact that nothing was being said about what Barrowfen II might do as a hint, and replied with a direct question about Barrowfen II’s plans, but that does not turn the letter into a misrepresentation or a half-truth. In my judgment read in its proper context, it was not.

However the claimant’s case based on the 9^th December meeting is a better one than the case based on the letter. The difference is that at the meeting Prashant specifically asked Girish’s solicitor a question. It is more likely than not that the solicitor would have understood that it was a question to which an honest answer would have revealed Girish’s plan. The context included enforcement of the Zurich loan but the question from Prashant was specifically about the assignment to Barrowfen II. The fact a solicitor does not act for the questioner does not entitle them to give a knowingly misleading answer and practice a deceit. Honest approaches which were available included giving no answer at all or a full one. There may be other alternatives too. Mr King’s answer was that there was “nothing in particular to tell” about the assignment save that Zurich was pushing for payment. If Mr King knew about Girish’s plan based on the assignment, then to state there is nothing to tell would be knowingly to mislead. Moreover in that context, the reference afterwards to Zurich may well imply that the reason for the assignment was to neutralise the threat

I have well in mind the point made by counsel for Stevens & Bolton that the claimant is making very grave allegations against a solicitor. I agree with counsel that the claim, on any of the three grounds, based on an allegation of dishonesty or fraud relating to representation made by the 4^th December letter, should be struck out. But I cannot take that approach to the allegations about what was said at the 9^th December meeting. Legal representatives are often put in a difficult position when asked direct questions by their client’s rivals, as this case demonstrates. This is not the trial and all I am concerned with is whether the claimant’s case is sufficient to go to trial. In my judgment the case based on the statements made at the 9^th December meeting, set in its overall context and advanced as part of each of the three grounds, should go to trial That part of the application to strike out will be dismissed and the relevant amendments allowed. The claimant will need to resubmit a further set of amendments to the Particulars of Claim taking this decision into account.

Various other detailed points were made about individual paragraphs of the claimant’s Particulars of Claim. If any remain live once the revised set of amendments are submitted, I will resolve them on that occasion.

This judgment was circulated in draft on 7^th May 2020 to be handed down on 14^th May, with the usual request for typographical suggestions and obvious errors to be submitted in advance. The claimant provided its response. Aside from typos, the claimant made a single more substantive point. This was about paragraphs 65-66. The claimant says that what is said there accurately reflects Stevens & Bolton’s case but the claimant wishes to make clear that it does not agree with it.

After the (extended) deadline for the response, the representatives of Stevens & Bolton submitted a three page brief. The claimant characterises it as an invitation to reconsider, supplement and qualify the judgment. One aspect of Stevens & Bolton’s submission is to ask me to make clear that many of the statement made in this judgment about what happened are disputed and represent the case of one side or the other or, I think on one point, neither side’s case.

An example in the Stevens & Bolton brief is an invitation to record that what paragraph 23 states about the second defendant’s knowledge is the Claimant’s contention.

In case there is any ambiguity about it, I will state here that the whole of this judgment is concerned only with whether matters should go to trial or not. I have sought to examine the strength of arguments and evidence as they stand now, but I am not making any concluded findings of fact at all. No statements in the judgment about the relevant events are binding conclusions. The statements are made to address what the parties say the facts are and in order to address the arguments. This is a purely interim judgment.

Stevens & Bolton’s representatives invite me to add a further extensive explanation of the procedural background to put their client’s position into context. I decline to do so. It is unnecessary and also contentious.

I believe I have addressed all the requests made in the brief from Stevens & Bolton’s representatives. If and to the extent I have been invited to reconsider the judgment further, I decline to do so.