Meadow Designs Limited & Ors. v Rishco Leisure Limited & Anor.

This judgment deals with:

A certificate of urgency was filed for the Discharge Application asking for it to be dealt with prior to the end of term. Both Applications were listed to be heard together before me. In my judgment the Applications need to be dealt with together given that they deal with what, if any, injunctions and linked orders should continue against the Defendants, and therefore what should happen to the Injunction Order. The application notice for the Discharge Application bore a time estimate of 1 day and the notice for the Variation Application no estimate. A number of preliminary points needed to be dealt with at the start of the hearing, and it was not possible to deal with oral submissions on all substantive points within a day. Accordingly, the response and reply to the further orders sought in the Variation Application were dealt with through a series of written submissions.

The Applications and original application for the Injunction Order (the “Original Application”) concern a joint venture (the “JV”) entered into between the Claimants and Mr Rishover to develop a golf club located in Thurrock, Essex into a luxury retirement village and redeveloped golf and leisure club (the “Project”). The golf club is Langdon Hills Golf and Country Club, Lower Dunton Road, Bulphan, Upminster, Thurrock RM14 3TY (the “Property”). There are four individuals behind the First to Fourth Claimants: Pamela Ray, David Green, Paolo Ingrao and Shane Martin (together with The Fifth Claimant, Julian Tendler the “Individuals”). Relations have become strained between the Individuals on one hand and Mr Rishover on the other. That is particularly unfortunate in circumstances where the JV appears to be on the cusp of having completed all planning steps and therefore- subject to financing- being able to move to the development stage of the Project.

The relevant corporate structure below the Claimants and Mr Rishover is as follows:

The Injunction Order ordered that until trial or further order, the Defendants should not dispose of, deal with or diminish the value of any of the injuncted assets (the “Injuncted Assets”), and for Mr Rishover to pay the Claimants’ costs of the application. The Injuncted Assets comprised all issued shares in the Companies and the Property. Given that the Claimants put the application as one on notice, no return date was ordered, but the order included provision for the Defendants to seek to vary or discharge the order.

By the Discharge Application, Mr Rishover applies to discharge the Injunction Order on the following grounds:

Grounds (1), (2), (3) and (5) were put as self-standing grounds for discharge as well as- together with ground (4)- grounds that cumulatively justified discharge. The majority of the submissions, both written and oral, were directed at grounds (1) to (4).

As explained below, because of a misunderstanding on the part of the Claimants’ representatives as to the rules on service, the Original Application was put to the Judge as an application on notice, but in fact it was not. Therefore, the obligation of full and frank disclosure applies, which in turn gives rise to ground (1). The fact that the hearing was not on notice also forms the backcloth to grounds (3) and (4). As to ground (5), both Mr Friedman and Ms Clarke submitted that matters had moved on in a number of relevant respects since 13 May, and so both focused their American Cyanamid submissions on how that test applies now. Neither party limited their American Cyanamid submissions to new developments since the 13 May hearing, or suggested that I should so limit my evaluation. Given that the original hearing was not on notice, in my judgment that approach is correct: in determining whether I should vary or discharge the Injunction Order pursuant to the provision in it allowing for that, I can apply the American Cyanamid test to the facts as they stand now.

The draft order accompanying the 14 June 2022 application notice for the Discharge Application sought as a fallback an order varying the Injunction Order to allow (a) the Defendants to deal with the Injuncted Assets (i) where permitted by the 12 September 2019 Joint Venture Shareholders’ Agreement (the “SHA”), or (ii) where acting in good faith in the ordinary course of business, and (b) Mr Rishover to deal with the shares owned legally and beneficially by him.

Mr Rishover also seeks an order that the Claimants pay the Second Defendants’ costs of and occasioned by the Injunction Order, the Original Application and the Discharge Application on the indemnity basis, irrespective of whether the Court re-imposes the injunction previously ordered.

By the Variation Application, the Claimants apply for:

By the time of the hearing before me, Mr Ingrao had been appointed director of RLL, so the order in (3)(a) accordingly seeks appointment of Mr Ingrao as director of the other Companies. The Claimants seek the orders in (3) whether or not the Injunction Order remains in place and/or is regranted, but Ms Clarke submitted that if the Injunction Order is discharged and not regranted, that strengthened the case for the orders in (3) being made so that the Claimants could obtain greater visibility of how the JV was being run.

For the reasons set out below, in my judgment:

Therefore, while it was advanced attractively, I do not accept Mr Rishover’s primary case on the Discharge Application. I consider that the injunction should be reduced in scope, and in fact be narrower than that advanced on Mr Rishover’s fallback case. I accept a number of the submissions of Mr Friedman, who appeared for Mr Rishover, that the Claimants breached their duties, and I consider that the Claimants’ conduct should be reflected in costs. However, in my judgment it would be disproportionate to discharge the Injunction Order entirely. The appropriate costs order for the 13 May and 28 July hearings can be dealt with at a short consequentials hearing.

The stages in the Project are the obtaining of planning permission and satisfaction of any conditions attached to it, followed by the development of the site. The JV is nearly at the stage of being able to start development of the site, as I shall return to below. However, distrust has arisen on both sides between the Claimants and Second Defendant, which has led to the present dispute. This dispute includes the point at which the Second Defendant is required to transfer legal title to particular shares to the Claimants. It is therefore necessary to explain briefly the origins of the JV and how this situation has come about, with a particular focus on the terms of the JV, because they are central to the present dispute.

The Individuals were involved with the Project before Mr Rishover, at some point between 2015 and 2018. The First to Fourth Claimants, all of which are English companies, were incorporated across the period April 2018 to June 2019. Taking them in turn:

Mr Rishover was introduced to the Individuals by the Fifth Claimant, Mr Tendler, as a person who could secure investment for the Project.

Heads of terms were entered into on 29 April 2019.

RLL is an English company incorporated on 19 July 2019. Mr Rishover was the initial subscriber to RLL and its first director.

On 12 September 2019, the First to Fourth Claimants, Mr Rishover and RLL entered into the SHA. The SHA is governed by English law and its main terms for present purposes are as follows:

The SHA has a number of drafting infelicities. For example, clause 3.3 requires the Shareholders to procure that the JVC issue 99 Shares, but the Shareholders definition refers to the beneficial owner of Shares and the Shares are the shares in issue, so that MDL, Rainmead, Tiderealm and Templebarn cannot- if the SHA is read literally- become Shareholders until the 99 Shares are issued. However, it is common ground between the parties that Shareholders includes as a matter of construction these companies. Similarly, it is common ground that the reference to Nominee Shares in the Shares definition should be read as a reference to Trust Shares.

On 13 September 2019, the day after execution of the SHA, RLL entered into a share purchase agreement to acquire the issued share capital of Morelane for £8m. This was primarily funded by a £6.6m facility advanced by UE SFA 1 Limited, secured over the assets of the Companies pursuant to agreements dated 13 September 2019, and a £2.25m secured term loan facility advanced jointly by Get Going Finance Limited and Gerrard Capital Limited, secured over assets of RLL and Morelane pursuant to deeds and debentures also dated 13 September 2019.

The SHA has been varied or supplemented by five subsequent agreements:

The net result of the changes made to the shareholding structure in the SHA by the above five subsequent agreements was that the Claimants and Mr Rishover were intended to have the following respective percentages of the issued share capital: MDL 2.5%, Rainmead 25%, Tiderealm 14.5%, Templebarn 15%, Mr Tendler 5% and Mr Rishover 38%.

Returning to the chronology, on 7 November 2019 a planning application (the “Planning Application”) was made in respect of the Property. As explained below the Claimants and Mr Rishover have competing submissions on when there has been “approval” of Planning Permission for the purposes of the SHA so as to trigger the obligation to transfer legal title to the relevant RLL shares under clause 8.1 of the SHA. However, it is common ground in the statements of case that the Planning Application would meet and exceed the definition of Planning Permission in the SHA.

On 8 June 2020, the relevant planning committee resolved to approve the Planning Application, subject to referral to the Secretary of State and to conditions.

The referral to the Secretary of State was made on 22 July 2020. On or around 3 September 2020 the Secretary of State confirmed that he had decided not to call in the application.

This left the need to reach agreement with the local planning authority under s.106 of the Town and Country Planning Act 1990 (the “s.106 Agreement”). I shall return to that later in the chronology.

Relations between the Individuals and Mr Rishover appear to have deteriorated from around late 2021.

Up until that point, none of them appear to have picked up on the failure to have issued the 99 shares as required by clause 3.3 of the SHA.

In her witness statement in support of the Original Application, Ms Ray states that she had made a number of requests of Mr Rishover since late 2021 to issue the 99 shares so that 62 of them could be held on trust for the Claimants, but that he had refused. She refers by way of example to discussions on 28 October 2021, 30 November 2021 and 11 February 2022. Mr Rishover does not deal specifically with those discussions in his 21 July 2022 witness statement but states that the failure to issue the 99 shares “was simply a matter of this [sic] provisions being overlooked”. Similarly, Mr Rishover’s 26 July 2022 defence states that on proportionality grounds it is not pleading to the specific paragraph of the particulars of claim (paragraph 53) that sets out the alleged requests to issue shares, given that those paragraphs relate to the issue of shares in RLL and those shares have now been issued (on 19 May 2022). Mr Rishover’s more general stance in the defence on the issue of the shares is that he denies on a number of grounds that he was in breach, including that the Claimants proceeded on the basis that there was no need to issue the shares, that if he was in breach the Claimants were too given that the joint obligation procure the issue of the shares and that it was only in the context of the “present attempt by the Claimants to manufacture a dispute” that the point was raised (paragraph 44).

Following an e-mail from Ms Ray on 14 February 2022, Mr Rishover did confirm by e-mail the next day to Ms Ray- with whom his relationship appears at that point to have been better than with the other Individuals- that he was holding shares in trust for her company and would transfer them once planning permission was issued. Ms Ray mentioned this in her 9 May 2022 statement. In the context of an e-mail dialogue with Mr Tendler on 4 January 2022 relating to a potential sale of the business, Mr Rishover also referred to shares being held on trust, as Ms Ray again mentions in her witness statement in support of the Original Application.

As with the issue of the shares, it appears that initially no-one took any steps to bring about the appointment of Accura as joint auditors. However, from late 2021, requests were also made of Mr Rishover to provide financial information requested by Accura and to accept and bring about Accura’s appointment as joint auditors. As set out above, clause 3.2 of the SHA provided that the Shareholders should bring about on completion of the SHA the joint appointment of Accura and Jeffreys Henry LLP as joint auditors. Mr Rishover had selected Jeffreys Henry LLP and the Claimants Accura.

Ms Ray sets out a number of e-mail requests in her witness statement in support of the Original Application and says that the requests were not met. For example, by 7 October 2021 e-mail, Melvyn Langley at Accura e-mailed Mr Rishover asking for management accounts for the Companies to allow him to audit. Mr Rishover replied to Mr Langley, copying the Individuals, that he would not respond.

By late 2021 or early 2022, Mr Rishover’s general stated position appears to have been that he had put too much money and effort into the Project compared to the Individuals and wanted recognition of that or to exit the Project. For example, in a 17 February 2022 e-mail to the Individuals in relation to planning permission, he suggested that he would be happy to be bought out for £20m, and that if the Individuals could not raise the money within a reasonable period “it will go on the market”, and closed by stating that “[t]his journey has been full of false promises and it’s only cost me tons of cash and missing out on many other opportunities”. Similarly, 18 February 2022 WhatsApps from Mr Rishover to Ms Ray asking her to call him, included “No call?? Putting it on the market you need to call me or Liam”, “What I have done financially for you all and how you are treating me is a disgrace how dare you !!!!!!!!!”, and, on not receiving a response, “Now watch me”.

Following a meeting with her on 28 February 2022, in March 2022, a witness statement was obtained by the Claimants from Dinah Hoare, who was an accountant who had been the previous finance manager at LHGCC from September 2019 to July 2021. She gave a statement setting out a number of financial transactions in relation to the Companies that the Claimants contend suggest impropriety or at least concerning behaviour on Mr Rishover’s part. I return to those below.

Therefore, by this stage, the Claimants had in mind the possibility of litigation with Mr Rishover. Mr Rishover also appears to have been readying himself for such litigation. Ms Ray’s notes of a 14 February 2022 call with Mr Rishover state that his lawyer looks over all e-mails coming from Mr Martin, and her notes of a 21 February 2022 call with Mr Rishover stating that every e-mail he got was checked by lawyers.

Matters appear to have deteriorated further over the refinancing of the lending to the JV. Mr Rishover explains in his 21 July 2022 witness statement that as it took much longer than expected to obtain planning permission, he needed to refinance the Project, and obtained a facility from West One. However, the West One facility expired in April 2022 and the planning permission had still not been finalised to allow the development work to proceed. Therefore, he needed to obtain further bridging finance to provide funding for the Project until the planning permission had been finalised.

On 3 March 2022, Mr Rishover forwarded to Ms Ray and Mr Ingrao a dialogue with a possible lender called “TAB” stating “Another lender in the mix….”. He sent a further e-mail to them on 15 March 2022, stating that he thought that they needed to accept the TAB terms attached to his e-mail, explaining that he “[h]ope[d] this is acceptable as I am acting for the best interest of us all especially with Danny’s loan expiring shortly and no extension offered”. He followed that up with a further e-mail to them on 20 March 2022, asking to discuss the latest terms, saying that they were now the only ones on the table. Those terms included a 100% personal guarantee from Mr Rishover. Mr Rishover expressed his discomfort with that feature in his e-mail to Ms Ray and Mr Ingrao, stating that he currently only gave a 20% personal guarantee under the existing facility.

Ms Ray states in her 16 June 2022 witness statement that she met Mr Rishover on 25 March 2022 following the 20 March 2022 e-mail, and that Mr Rishover had stated that he did not want Mr Ingrao at the meeting. She states that Mr Rishover said that he did not know if he was going to proceed with TAB but confirmed that they were his backstop, and that he did not talk about the terms of the facilities. She states that she did not receive further information about the TAB facility before Mr Rishover executed the documentation on 8 April 2022. She received a WhatsApp from him on 8 April confirming he had taken out the facility but did not see it at the time.

Mr Rishover states in his 21 July 2022 witness statement that he tried to discuss the urgent need for funding with both Ms Ray and Mr Ingrao, and that on sending them the 15 March 2022 e-mail, neither of them asked any questions about the proposed lending or offered any alternative, and Mr Ingrao merely commented that Mr Rishover’s ability to obtain funding was “never in doubt”.

The TAB facility agreement (the “TAB Facility Agreement”) was entered into on 8 April 2022 between TAB ACM Limited and TAB London Limited (together “TAB”) as lenders with Morelane as borrower. The Claimants did not see the TAB Facility Agreement until it was provided to them pursuant to the information obligations under the Injunction Order. The facility agreement contains the following provisions that are relevant for present purposes:

The same day, 8 April 2022, Rishco Limited, Heronslea Limited and Mr Rishover entered into a written facility agreement with Morelane (the “Rishco Facility”), which records that it documents the terms of a loan of £754,656.54 that has been made to Morelane. The facility agreement states that the loan is to be repaid on demand and to be secured by a legal charge over the Property. I understand the two lending companies to be linked to Mr Rishover. I understand that the Claimants and Individuals had not seen this written agreement until they were provided with a copy of it pursuant to the Injunction Order. The charge itself, dated the same day (the “Rishco Charge”) includes provisions giving a power of sale in the event of default (paragraph 2 of schedule 5) and the ability to appoint a receiver or administrator (paragraphs 6 and 15 of schedule 5 respectively). Ms Clarke notes in her submissions that the draft Morelane financial statements for the year ended 30 April 2022 only mention debts of £13,374,000, described as bank loans, which tallies with the figure for the TAB Facility, so that there does not appear to be mention of the sum referred to in the Rishco Facility.

Mr Rishover states in response in his 21 July 2022 statement that he has been required to provide significant personal funding to keep the Project afloat in circumstances where the cost of the Project has exceeded the agreed estimates. He states that as at today, RLL and its subsidiaries owe Mr Rishover and his companies over £1.03m and that the purpose of the Rishco Facility and Charge was “to provide me with comfort and security regarding the amount I was owed”. He states that “I did not attempt to keep the charge a secret from the Claimants and documents relating to the charge are publicly available at Companies House”.

Mr Rishover e-mailed the Individuals (other than Mr Green) on 22 April 2022, setting out the basic terms of the TAB Facility, and explaining why he had to enter into it with a 100% personal guarantee. He wrote to put the recipients on notice of two things, namely:

“ Before I will agree to transfer any shares under the terms of our agreement, I must either be released from my PG [personal guarantee] which is being given to TAB or, alternatively you each provide me with cross guarantee commensurate with your respective shareholdings.

•

Under the terms of the loan facility and debenture, a change of control is not permitted without TABs consent. This means that we will need to either refi the property prior to transfer of shares or obtain TAB’s consent before shares can be transferred.”

Mr Rishover states in his 21 July 2022 witness statement that the TAB Facility is a bridging loan required to bring the Project to the stage of planning permission, so that on the grant of the planning permission, a development loan can be taken out for significantly higher sum and the TAB Facility repaid, which in turn means that the TAB Facility will provide no obstacle to transfer of legal title of the relevant RLL shares to the Claimants.

On 6 May 2022, the local authority, who had required a further planning permission to widen access to the Property to be made before agreeing the s.106 Agreement, approved that planning permission. As I come to below later in the chronology, it is currently expected that the s.106 Agreement will be signed off very shortly in light of this planning permission having been granted.

Also on 6 May, following various e-mails between them, Mr Ingrao, Mr Martin, Mr Tendler, Ms Ray and Mr Rishover agreed to meet at a café in Bushey in the morning of 9 May at 9 or 9.15am. Ms Ray states that Mr Rishover said at the meeting that he would not issue shares until they had agreed to give personal guarantees, and that a third charge had been placed on the JV to protect his position, which appears- although there is no suggestion the Individuals knew it at the time- to be a reference to the Rishco Charge. Ms Ray says that (a) Mr Rishover continued that he could do what he wanted with the asset without intervention from them, (b) Mr Martin then questioned Mr Rishover about the lack of information that he had felt Mr Rishover was providing and about the points that Ms Hoare had mentioned to them, and (c) on Mr Rishover denying having taken any Covid or business interruption loans (two of the loans referred to by Ms Hoare), Mr Martin accused Mr Rishover being untruthful and (d) Mr Rishover then threw Mr Martin into the window, hitting his head and dazing him, and the police were called by Mr Martin and arrested Mr Rishover.

In his 21 July 2022 witness statement, Mr Rishover does not give a specific account of this meeting, but states that “[g]iven the seriousness of the allegations Ms Ray makes regarding my alleged assault of Mr Martin I wish to make clear that I deny the allegations and that no charges have been brought against me”. Therefore, Mr Rishover does not give his own account of what was said about the meeting, including what if anything was said about Mr Rishover’s use of the assets or information requests.

Some of the challenges mounted to the Injunction Order stem from the defective service of the Original Application.

Summarising the dialogue between the Claimants’ solicitors and the Defendants in the lead up to the 13 May 2022 hearing:

The Original Application was couched by the Claimants in Ms Clarke’s skeleton as an urgent application, on notice, for injunctive relief to prevent Mr Rishover from dealing with or disposing with the shareholding or assets of RLL in breach of agreements between the parties and/or his fiduciary duty. The injunction was not put as a freezing injunction but rather an interim injunction pending specific performance and/or a proprietary injunction and/or an injunction to restrain a potential breach of contract, to be determined on normal American Cyanamid principles.

It was stated that at the heart of the dispute was Mr Rishover’s failure to issue additional shares or transfer them to the Claimants ([9] of Ms Clarke’s skeleton), and that the Claimants had tried to resolve matters without needing to issue proceedings. However, that had not succeeded and following the granting of the Revised Access Application on 6 May 2022, they were concerned that with the planning work complete a significant restraint which might otherwise have deterred Mr Rishover from acting to the Claimants’ detriment was removed. Therefore, the final attempt on 9 May 2022 to persuade Mr Rishover to issue and transfer the shares having failed and instead having led to Mr Rishover again saying that he could do what he wanted with the assets, the Claimants considered that they needed urgent relief to protect their position until the substantive proceedings were determined.

The application was accompanied by an unissued claim form and draft particulars of claim.

In his Judgment, the Judge explained why he considered that the Injunction Order should be granted.

He explained that he understood that Mr Rishover had been given notice of the application, the relevant documents having been provided to Mr Rishover, initially in unissued form, on Monday 9 May, shortly after the 4pm deadline for service, but not materially late. (I interpose that the reference to 4pm should be to 4.30pm.) He stated that in any event, Mr Rishover was aware of the proceedings and had been able to engage with them, as his 12 May letter showed: [2].

The Judge went through the background and the Claimants’ concerns over the shares not having been issued or transferred to them, over Mr Rishover taking steps to sell assets, and over the lack of financial information about the Companies that they had been provided with and whether assets may have been misappropriated or improper transactions entered into. He concluded at [20]-[22] as follows:

The Injunction Order ordered that:

There has been a significant volume of correspondence during this period. For present purposes, the most important points are as follows:

By 23 June letter, Hamlins wrote to TAB to explain the litigation, stating that they understood from AT that TAB were aware of the Claimants’ involvement as a result of the Claimants placing a unilateral notice on the title of the Property. They sought to reassure TAB that the repayment of the TAB Facility was not at risk.

AT wrote to Hamlins the next day, expressing their concern that TAB would withdraw the facility in light of the letter, and suggesting that the Claimants had breached their obligations under clauses 2.2 and 25.1 of the SHA.

By 14 July e-mail, TAB shared excerpts from the legal advice that they had received about the dispute. The advice expressed concern that Mr Rishover had focused on procedural objections to the Injunction Order and stated that they expected that he would have provided more of a response to the substantive allegations made against him. By 21 July e-mail, TAB responded to Mr Rishover’s 18 July e-mail to them, commenting among other things that “[g]iven your failure to disclose the dispute until Hamlins wrote to us, and the background to it when we lent you the funds, trust is in short supply at the moment”. In response to Mr Rishover’s expressed confidence that the Injunction Order would be discharged, they stated that “[w]e hope it comes to that and look forward to being provided with the relevant information to put us in the position of having your confidence about the outcome”.

In his 21 July witness statement, Mr Rishover explained that the final stage of the planning permission- the s.106 Agreement- had been approved, subject only to annotating to the plan which is to be attached to the s.106 Agreement. He stated that he was awaiting the completion of the registration of TAB as the new lender for the purposes of the agreement as the Council required evidence of that before they would seal the document, but that he understood that registration was due to be completed imminently. He stated that once the s.106 Agreement was sealed the planning consent will be issued.

On 22 July, Mr Ingrao was appointed to the board of RLL.

The logical staring point is to explain the type of injunctions sought in the present case. This was the subject of a number of the submissions before me, both written and oral, particularly in relation to the proprietary and freezing injunctions. The basic submission made by Mr Friedman was that while the injunction had been couched as a proprietary injunction or an ordinary American Cyanamid interim injunction, in a number of respects it was not, because it was not holding the ring until trial and was an attempt to seek an injunction unrelated to the final relief at trial. Unless such an injunction satisfied the requirements for a freezing injunction, which it did not, then it should not be granted. I took him to pray this point in aid of his ground (5) for discharge that I have set out in paragraph 6 above, namely that the ordinary test for granting an injunction had not been met. Therefore, I shall deal with this element of his submissions on ground (5) in this section.

A proprietary injunction is one that restricts the use of assets whose ownership is in dispute. Interim proprietary injunctions fall within CPR r.25.1(c)(i), which allows for interim orders preserving relevant property. Relevant property is property subject to a claim or as to which any question may arise on a claim.

Given that it only restricts the use of a particular asset whose ownership is in issue, such an injunction does not prevent the respondent dealing with any other assets, and therefore is less restrictive of the respondent’s autonomy than a freezing injunction.

This aspect of the difference between the two forms of injunction is responsible for a number of differences in the approach taken to whether to grant such an injunction:

The American Cyanamid test applies to the grant of the injunction.

Here, the situation as matters currently stand is that:

A classic example of a proprietary injunction is where there is a dispute over whether a proprietary claim consequent on tracing can be brought against a particular fund and therefore whether that fund is held on trust for the claimant or not. This is not that sort of case.

However, here there is a dispute as to the terms on which the 124 shares are held, as set out in (3) above. The fact that the dispute is as to the terms of the SHA does not alter that, because it is the SHA that sets the terms on which the 124 shares are held on trust. The trust arises in the first place because of the SHA and the SHA sets the express terms of the trusts, including that the shares are to be transferred to the Claimants on planning permission being obtained. Given that there is a trust of the shares even before the Planning Permission is approved, I do not need to get into the question of whether the obligation to transfer legal title shares becoming specifically enforceable on the approval of Planning Permission gives rise to such a trust.

Given the above, in my judgment, to the extent that the injunction sought to restrain transfer of the RLL shares, Ms Clarke is correct to put the injunction, as she did in her skeleton for the 13 May hearing, as a proprietary injunction or- which in my judgment amounts to much the same thing in practice on the present facts- an injunction in aid of specific performance. That protects the asset to be transferred until it is transferred, because of the possibility that it should be transferred now and therefore that the applicant is being kept out of the control of his asset in the meantime.

Ms Clarke’s skeleton also put forward a third alternative- that the injunction was restraining a breach of contract. I return to that below after dealing with proprietary injunctions.

The fact that a proprietary injunction is tied to the preservation of particular property rights also means that where those property rights become otherwise protected in another way, it is no longer necessary or appropriate for the proprietary injunction to continue. For example, if a fund whose beneficial ownership is disputed is placed into the hands of an independent third party, it may not be appropriate for the proprietary injunction against a respondent to continue. Likewise, here, if the 124 shares held beneficially for the Claimants are transferred to the Claimants, then the basis for the proprietary injunction would fall away.

Finally, the typical proprietary injunction bars not only transfer of the relevant assets, but dealings with it that would diminish its value. Often such an unqualified restriction will be appropriate, given that the injunction does not stop the respondent dealing with his other assets. However, if, as here, the assets are shares and the person being restrained has a role in running the company (the “top company”) and/or subsidiary companies, that injunction would, if unqualified, bar him from using such a role in a way that reduced the value of the shares in the top company. Therefore, in such a case it is necessary to consider a carve-out to allow the individual to continue with his role in the companies without fear of taking a step in the ordinary course of business that turns out to have the effect of reducing the value of the top company shares and therefore breaching the injunction. It is also necessary to take any effect on running the business into account in assessing where the balance of convenience lies. Both of these points apply in the present case. I shall return to them below.

If the top company has one or more wholly owned subsidiaries, as is the case here, a proprietary injunction against the shares in the top company does not itself prevent disposal of the shares of a directly or indirectly held subsidiary. For example, if a company has 10 operating subsidiaries held two corporate layers down from the top company, a sale of one of those subsidiaries at market price would not diminish the value of the top company shares and therefore not breach an order restricting disposal of, dealing with and diminution in value of the top company shares. Therefore, on its own a proprietary injunction against the top company shares does not itself, or at least not automatically justify a proprietary injunction directly restricting dealings with the shares of operating subsidiaries. Ms Clarke pointed out that in Wilton-Davies v Kirk [1997] B.C.C. 770 at 775, the Court considered that there was jurisdiction to appoint a receiver over a subsidiary in aid of an unfair prejudice petition relating to the parent. However, in my judgment a proprietary injunction against the top company shares does not of itself without more justify an injunction against the shares of the subsidiaries, and Wilton-Davies does not detract from that.

This raises the question of whether any injunction here should extend- as the Injunction Order does- to assets other than the RLL Shares. It is here that I consider that Mr Friedman’s submissions have most force. To deal with this issue, it is necessary to examine the third basis on which the injunction was put before the Judge. I mentioned above that the injunction sought before the Judge was also characterised as an injunction to restrain a threatened breach of contract. The contractual obligations referred to included obligations not to sell the shares of assets of RLL. As with a proprietary injunction, an injunction sought to restrain a threatened breach of contract would not be a freezing injunction. Rather it would be governed by American Cyanamid principles.

Ms Clarke submitted in her skeleton for the 13 May hearing that one of the breaches that Mr Rishover had threatened was disposing of the assets of RLL and that this was contrary to paragraphs 12 and 15 of Schedule 1 to the SHA. Clause 4 of the SHA requires the parties, including Mr Rishover, to procure that the JVC (RLL) shall not carry out any of the Reserved Matters in Schedule 1 without the prior written approval of MDL. Paragraph 12 of Schedule 1 comprises changing the nature of the JVC’s Business or commencing any new business that is not ancillary or incidental to the Business, and paragraph 15 comprises making any acquisition or disposal by the JVC of any material asset(s) otherwise than in the ordinary course of business. In my judgment, paragraph 15 is the relevant one. If Mr Rishover procured that RLL sold its assets- namely the shares in Morelane- without MDL’s consent, he would breach clause 4.

Therefore, in principle, an interim injunction can be granted on American Cyanamid principles to prevent Mr Rishover from disposing of RLL’s shares in Morelane. A final injunction preventing this without the consent of all Claimants is sought in the claim form and prayer in the particulars of claim (albeit that as the Defence points out there is nothing pleaded in the main body of the Particulars in support of this).

However, in my judgment, the grant of an injunction in respect of the RLL shares (or the Morelane shares) does not of itself justify including within the Injuncted Assets the shares in KEPC or LHGCC or the Property itself. As Mr Friedman submits, that is not the relief sought at trial. Accordingly, in light of the submissions put to me, I do not consider that the KEPC and LHGCC or the Property itself should be included in any injunction. I shall return in the principal section on American Cyanamid below to the parameters of any injunction that should be continued, including whether it should catch the Morelane shares.

I shall take in turn the five grounds set out in paragraph 6 above.

By way of preliminary point, I understand that there was an objection taken on the morning of the hearing before me by the Claimants as to the permissibility of Mr Rishover’s reliance on the detail of Mr Martin’s spent conviction. In order to avoid the need for lengthy debate on the point, which could have required the hearing to go part heard, Mr Friedman pragmatically took the stance that for the purposes of his submissions he would not rely on such detail but that he made no broader concession. I should say that I cannot see that such detail would make any difference to the ultimate result. He took an analogous stance in relation another substantive point that arose to be dealt with at the outset of the hearing, namely a dispute over whether the Claimants had waived privilege over material in an earlier version of Ms Andrews’ witness statement that had mentioned internal discussions within her team. After Mr Rishover’s representatives had suggested that privilege had been waived and sought disclosure of the full run of documents evidencing the internal discussions, the Claimants replaced Ms Andrews’ witness statement with a new version that removed the offending passages. Mr Friedman’s stance for the hearing was that he would not take points based on the original version of the statement to the extent that it differed from the revised version and that I should not take into account the old version of the statement or any submissions based on those parts of the old statement that were not replicated in the new one. I am content to proceed on that basis. Mr Friedman made clear that Mr Rishover reserved the right to contend subsequently that privilege had been waived.

Given the focus of the submissions on the Discharge Application, I need to deal at some length with the arguments based on alleged breaches of duty by the Claimants in making the Original Application and in the period following it.

Before getting into the detail, I should make clear that while it was accepted that the Claimants did not appreciate that they were under a duty of full and frank disclosure, in my judgment Ms Clarke’s skeleton and oral submissions made to the Judge did seek at a number of points to draw the Judge’s attention to contrary arguments.

Subject to one point, there was no disagreement before me as to the content of the duty of full and frank disclosure, and the consequences of breaching it.

Starting with the content of the duty, this can conveniently be taken from the judgment of Eder J in Elektromotive Group Ltd v. Pan [2012] EWHC 2472 at [33], relied on by Mr Rishover:

“i.

The duty on the applicant in such circumstances goes beyond merely identifying points of defence which might be taken against them, important though that is;

ii.

The applicant has to show the utmost good faith, identify the crucial points for and against the application and not rely on general statements and the mere exhibiting of numerous documents

iii.

The applicant has to investigate the nature of the claim asserted and the facts relied on before applying, and has to identify any likely defences. He has to disclose all facts which reasonably could or would be taken into account by the Court. The duty is not restricted to matters of fact, but extends to matters of law;

iv.

The applicant also has a duty to investigate the facts and fairly to present the evidence;

v.

There is a high duty to draw the Court's attention to significant factual, legal and procedural aspects of the case;

vi.

Full disclosure has to be linked with fair presentation. The judge has to have complete confidence in the thoroughness and the objectivity of those presenting the case for the applicant; and

vii.

It is the undoubted duty of counsel to draw to the judge's attention weaknesses in his case and to make sure the judge understands what might be said on the other side even if the judge says he has read the papers…”

As set out in CEF Holdings v Mundey [2012] FSR 35, this duty applies on a short notice application as well as a without notice application, because short notice is not valid notice. As explained at [183] of that case, the duty applies even if the respondent is represented at a short notice hearing. The reason for this is, as explained in [181], that:

“[t]he purpose of this requirement imposed on an applicant for an injunction of giving “not less than 3 days notice” is to allow the respondents to the application adequate time in which to consider the applicant’s case on both factual and legal issues and also to enable them to be properly prepared so as not only to be able to address all relevant issues of fact and of law, but also to be able to adduce all relevant evidence and to make full submissions on all legal and factual issues. In other words, the period of three clear days is the minimum period specified to ensure that proper legal and factual submissions of the respondent can be put before the court so as to represent their interests.”

In that case, the respondents only received informal notice of the application on the evening before the hearing: [185].

The consequences of non-disclosure were summarised in Re Yugraneft [2010] BCC 475 at [102]-[103], which Mr Rishover relies on. Christopher Clarke J quoted at [102] the nine main principles set out in The Arena Corp Ltd v Schroeder [2003] EWHC 1089 (Ch) at [213]:

“(1)

If the Court finds that there have been breaches of the duty of full and fair disclosure on the ex parte application, the general rule is that it should discharge the order obtained in breach and refuse to renew the order until trial.

(2)

Notwithstanding that general rule, the Court has jurisdiction to continue or re-grant the order.

(3)

That jurisdiction should be exercised sparingly, and should take account of the need to protect the administration of justice and uphold the public interest in requiring full and fair disclosure.

(4)

The Court should assess the degree and extent of the culpability with regard to non-disclosure. It is relevant that the breach was innocent, but there is no general rule that an innocent breach will not attract the sanction of discharge of the order. Equally, there is no general rule that a deliberate breach will attract that sanction.

(5)

The Court should assess the importance and significance to the outcome of the application for an injunction of the matters which were not disclosed to the Court. In making this assessment, the fact that the judge might have made the order anyway is of little if any importance.

(6)

The Court can weigh the merits of the plaintiff's claim, but should not conduct a simple balancing exercise in which the strength of the plaintiff's case is allowed to undermine the policy objective of the principle.

(7)

The application of the principle should not be carried to extreme lengths or be allowed to become the instrument of injustice.

(8)

The jurisdiction is penal in nature and the Court should therefore have regard to the proportionality between the punishment and the offence.

(9)

There are no hard and fast rules as to whether the discretion to continue or re-grant the order should be exercised, and the Court should take into account all relevant circumstances.” (I have used bold text where Christopher Clarke J italicised the quote)

Christopher Clarke J stated at [103]:

“I regard that as a helpful review of the applicable principles, subject to the overriding principle, reflected in proposition (9), that the question of whether, in the absence of full and fair disclosure, an order should be set aside and, if so, whether it should be renewed either in the same or in an altered form, is pre-eminently a matter for the Court's discretion, to which… the facts (if they be such) that the non-disclosure was innocent and that an injunction or other order could properly have been granted if the relevant facts had been disclosed, are relevant. In exercising that discretion the Court, like Janus, looks both backwards and forwards.”

Ms Clarke relied on the more recent decision of HHJ Klein sitting as a judge of the High Court in Wild Brain Family International Limited v Robson [2018] EWHC 3163 (Ch) at [45]-[49]. That sets out the content of the duty by reference to the judgment of Popplewell J in Fundo Soberano de Angola v Dos Santos [2018] EWHC 2199 (Comm). Popplewell J explained at [52] that “the ultimate touchstone is whether the presentation of the application is fair in all material respects”. This reflects the modern formulation of the duty of full and frank disclosure as a duty of fair presentation, so I shall use that terminology in my judgment. Wild Brain also sets out at [45] the consequence of failure to comply with the duty, by reference to the judgment of Ralph Gibson LJ in Brinks Mat Ltd v Elcombe [1988] 1 WLR 1350 at 1356-7. I do not detect in Wild Brain any substantive difference from the principles set out in the earlier cases, and Counsel did not suggest to me that there were any.

Given that the authorities put before me summarised above related to freezing injunctions, I raised with the parties whether the decision of Flaux J in Boreh v Republic of Djibouti suggested that the different nature of a proprietary injunction should be taken into account when deciding whether to discharge (and if discharged, whether to re-grant) a proprietary injunction. In that case, a freezing injunction was set aside but the proprietary injunction was not. Flaux J explained at [253] that the proprietary injunction is fundamentally different to the freezing injunction, and accepted at [254] the submission of the Lord Falconer that:

“(i)

a proprietary injunction over particular assets on the basis that the claimant has an arguable case that they are his property is far less intrusive than a freezing injunction. It preserves the asset until trial but it does not freeze a defendant’s own assets or prevent a defendant from carrying out his day to day business and (ii) that the discharge of a proprietary injunction has a far greater effect on the substantive claim. If the defendant disposes of the asset, the claim becomes nugatory.”

Flaux J also took into account at [255] that the deliberate misleading of the Court did not really concern the proprietary aspect of the relief sought.

It was submitted by Mr Friedman that Boreh was decided on the basis of the point at [255]. I reject that submission. As Ms Clarke submitted, the point at [255] was a supplementary one, as clear from Flaux J starting [255] by making express that this was a “further” point that did not detract from the general points at [253]-[254].

Therefore, in my judgment, I should take into account the characteristics of a proprietary injunction in deciding whether to discharge and/or regrant such an injunction. The reason for doing so is that the question of the effect of continuing the injunction on the Claimants and on the Defendants is relevant to whether the injunction should be continued. In considering this, it is the impact of the injunction on the present facts that is important. For example, in our case, unlike in Boreh, the injunction could absent a course of business carve-out be breached by Mr Rishover carrying out his role in the running of the Companies.

Turning to the facts here, as formal service only took place the day before the 13 May 2022 hearing, this is a short notice case, to which the duty of full and frank disclosure applies. Therefore, I take in turn the arguments raised by Mr Friedman. This is a slightly unusual case because Mr Rishover did have the application documents- albeit including an unissued application notice- since 16:49 on 9 May 2022, so I shall need to return to the significance of that below.

Breach of the pre-emption provisions

Mr Friedman submits that the Claimants should have disclosed that Mr Martin had transferred his interest in Templebarn to his sister in breach of the pre-emption provisions in clause 16.1 of the SHA, because it was in his submission obviously material that someone on the Claimants’ side was in breach of the SHA. Ms Clarke’s response was that there was no breach of the SHA because there had ben no transfer of “any rights in or over any share or interest in any share in the JVC”, as that only caught shares and interests in shares in the JVC, which was defined as RLL. The transfer here had been of shares in Templebarn. In reply, Mr Friedman submitted that it would emasculate the pre-emption provisions if they were read as limited to dealings with the shares in RLL.

In my judgment, there was no breach of the duty of fair presentation in this respect. I do not consider that the Claimants were required to anticipate such an argument.

Without deciding the true construction of clause 16.1, the ordinary meaning of the words quoted above seems to me to be that they are limited to shares in RLL and interests in those shares. On this reading, clause 16.1 is imposing obligations on the Shareholders concerning the transfer of their interests, and the Shareholders are the Claimants and Mr Rishover, not the individuals who own the shares in the Claimants. That would be consistent with the opening words of clause 16.1 (“No Shareholder…”), the second sentence of clause 16.1 (“If a Shareholder transfers…”), clause 16.2 (“A Shareholder may do anything prohibited by this clause if the other Shareholder has consented to it in writing”) and clause 16.3 (“The Shareholder…wishing to transfer its shares…must give an irrevocable notice…”), all of which focus on and are limited to the actions of the Shareholder. Shareholders is defined as “the beneficial owner of Shares in the JVC”, and the JVC is defined as RLL.

I have no evidence before me that an interest in the RLL shares held by any of the Shareholders has been transferred. Rather Mr Friedman’s argument is that the transfer of the interest in Templebarn was a breach of clause 16.1. The Individuals (and now Ms Martin) appear to be the shareholders of the Claimant companies, rather than the Claimant companies also holding their shares in RLL on trust for the individuals concerned. For example, Ms Ray describes herself in her witness statement as the shareholder of Rainmead.

Failure to draw the Court’s attention to the ordinary costs order

Where an interim injunction is granted, the Court will normally reserve the costs of the application until the determination of the substantive issue: Melford Capital Partners (Holdings) LLP v Wingfield Digby [2020] EWCA Civ 1647 at [35]-[36].

The draft order put before the Court on 13 May placed in square brackets in the paragraph on costs the alternative possibilities of Mr Rishover paying the Claimants’ costs or reserving costs to the return date. However, it did not provide for the possibility of reserving costs until trial and the submission made to the Judge was simply that Mr Rishover should pay the Claimants’ costs, which the Judge accepted.

Ms Clarke accepted that the ordinary costs order should have been drawn to the Court’s attention, and Hamlins accepted this when the point was raised by AT. In my judgment, it should have been drawn to the Judge’s attention and this should have been done whether or not the hearing was on short notice, given the duty to draw the Court’s attention to authority against one’s point. This was plainly not a deliberate one. Rather the relevant authority or legal principle was overlooked.

Ms Clarke submits that the error here was one of legal submission that did not deprive the Court of knowledge of a material circumstance and therefore did not constitute a material non-disclosure. She relies on Wild Brain at [49] for the proposition that incorrect legal submissions do not amount to non-disclosure providing that they do not deprive the Court of knowledge of any material circumstance, and also points out that the Variation Application contains a paragraph varying the costs order in this regard. I reject that argument. The failure to draw the Court’s attention to Melford and the ordinary rule on costs in such circumstances meant that the Court did not have before it the relevant material to decide the correct costs order. The situation is not one where the correct legal principle or authorities were put to the Judge, and then erroneous legal submissions made off the back of that. However, while the correct legal position should have been put to the Judge, this error did not relate to whether the injunction should be granted in the first place, so while it should not have happened, in my judgment it should be kept in proportion when considering its impact on whether the injunction should remain.

Mr Friedman also contends that the Judge’s attention should have been drawn to the fact that the failure to provide a costs schedule was a ground on which the Court might disallow all or part of the Claimants’ costs. While this is a minor breach, I accept that submission. Paragraph 9.6 of PD44 provides that a party’s failure without reasonable excuse to provide a statement of costs will be taken into account by the Court in deciding what order to make about the costs of a claim, hearing or application and about the costs of any detailed assessment hearing that may be necessary as a result of that failure. Ms Clarke did flag up to the Judge that the Claimants did not have a costs schedule for summary assessment, but that was to found the submission- accepted by the Judge- that the appropriate order was for detailed assessment if costs could not be agreed.

Failure to draw the Court’s attention to the fact that Mr Rishover was only served on 12 May, the day before the hearing

Again, the Claimants accept that this should have been done. I accept Mr Friedman’s submission that this was a material breach. Therefore, I take this into account in determining whether the Injunction Order should be discharged. However, I consider that what is more important is what substantive points the Claimants did and did not put before the Judge in relation to the case for an injunction.

Explaining the failure in more detail, while it was flagged orally to the Judge that Mr Rishover was e-mailed with the application documents a few minutes after 4.30pm on Monday 9 May, and that the application notice provided at that point was unissued, with that caveat the application was put as one on notice. That was made clear in the opening paragraph of the Claimants’ skeleton, in the submission made in the skeleton and orally on why a return date was not necessary, and more generally in oral submission, including in the submission on costs that he had been given notice and had chosen not to attend. The Judge was aware that Mr Rishover had received the supporting evidence together with the unissued application notice by e-mail on 9 May shortly after the 4.30pm cut-off and that Mr Rishover had responded in some detail on the morning of 12 May. Therefore, he knew what time Mr Rishover had received to respond and was comfortable with going ahead with the hearing in those circumstances.

It cannot be known whether the Judge would have been content for the hearing to proceed on 13 May if he had been told that Mr Rishover had only been validly served on 12 May. In my judgment, he may very well have been given that (a) Mr Rishover had been provided with the documents three clear days before the hearing, even though that did not amount to formal notice and the application notice was unissued at that point, (b) the Judge made clear at [2] of the Judgment that he considered that Mr Rishover’s long 12 May letter demonstrated that he had been able to engage with the application, (c) the Claimants’ account of the 9 May meeting did provide justification for an urgent application; and (d) Mr Rishover could apply in due course to vary or discharge the application.

However, it would have been a slightly different question that the Judge would have been asking himself or at least the facts he would have been taking into account would have been different. In a situation where Mr Rishover had not received even one clear day’s notice of the hearing, he would necessarily have asked himself whether the matter was sufficiently urgent that it should be allowed to proceed despite such limited formal notice, or whether the more appropriate course would be to adjourn the hearing of the application for a few days to allow proper notice to be given. Giving 3 clear days’ notice would have required the hearing to be put back to Wednesday 17 May. Therefore, the hearing may have gone back to 17 May through the Judge’s decision at the hearing or if the Claimants had- appreciating the correct service position- opted to proceed on full notice.

Ms Clarke submitted that it is likely that the Court would if asked have made a CPR r.23.7(4) direction and allowed the hearing to proceed on short notice, on the grounds that (i) Mr Rishover had been formally served by the time of the hearing and had been sent the application documents by e-mails on 9 and 10 May, (ii) he had acknowledged receipt of the 10 May e-mail, (iii) he had prepared a detailed response by 12 May with the assistance of legal advisors, and that response contained no request to adjourn the hearing to allow him to retain legal representation or otherwise, (iv) he had given no indication of his intention to attend the hearing and (v) when invited to agree a consent order which provided for the hearing to be adjourned in exchange for Mr Rishover providing undertakings, he did not agree to the hearing being adjourned with the costs reserved to a later hearing.

There is force in these points, particularly (i) to (iii). However, in my judgment, one cannot rule out the possibility that the Judge would have adjourned the hearing, for the reasons set out above. Moreover, there is in my judgment a limit to how far one should go into counterfactuals in a situation where such counterfactuals arise from the Claimants’ failure to put the correct service analysis before the Court (or to ask for a CPR r.23.7(4) direction) and thereby to have placed the Judge in a position to determine what should have been done in light of the true position. The Court was misled, albeit unintentionally, as to the correct position.

Finally, Mr Friedman submits that if the defect in service had been pointed out, there would have been a return date at which the continuation of the Injunction Order had to be continued. In my judgment that is not necessarily the case: the Judge could have made a CPR r.23.7(4) direction for example. However, there is at the lowest no guarantee he would have made such a direction, and I consider that I should take this into account in assessing materiality, given the discipline that a return date brings. Nevertheless, I consider that the point should not be overstated given that Mr Rishover could bring the matter back before the Court to seek to discharge or vary it without the need for a return date.

Failure to raise a threat to the financing facility

Mr Friedman submits that the Claimants should have drawn the Court’s attention to the likelihood that the making of the Injunction Order was likely to be a serious threat to the continuation of the TAB Facility, and therefore to the Project as a whole and to Mr Rishover himself through the personal guarantee that he gave.

Starting with what was said at the 13 May hearing, it is clear from the transcript that the Judge was aware that (i) there was secured lending against the structure that had been used to finance the Project but that there was not visibility about what the terms of the loan were (page 20), (ii) that Mr Rishover wanted the Individuals to give their own guarantees in respect of the financing (page 12), (iii) that the Claimants’ position was that under the SHA it was Mr Rishover’s responsibility to provide security for any financing (page 19), and (iv) that relations between the parties had deteriorated as issues like the need to refinance had become relevant (page 21).

The question is whether the Claimants should have gone further as submitted by Mr Friedman. In my judgment, it was not incumbent on the Claimants to suggest that the making of the Injunction Order could threaten the continuation of the TAB Facility and lead to the calling in of Mr Rishover’s personal guarantee.

The starting point is that it is relevant to take into account lending to and charges over a structure when determining whether to grant an injunction over assets held in it, because this gives rise to the possibility that legal proceedings against the structure might constitute an event of default under the facility.

However, here Mr Rishover had mentioned the TAB Facility and his personal guarantee at a number of points in the detailed 12 May letter, written with the benefit of legal input. He stated that he considered that its presence indicated how unlikely it was that he would sell the Property or RLL shares, he explained that the transfer of legal title to the RLL shares in due course would need to be consented to by TAB, and he set out some of the terms of the facility and that he considered that the Individuals should have provided an indemnity in respect of it. There was no suggestion that the injunction that was being sought would pose any problem for the facility or Mr Rishover’s personal guarantee. Therefore, there was nothing in this to suggest that Mr Rishover, who- unlike the Claimants- knew at the time the detailed terms of the TAB Facility and had a copy of it, saw a risk in this regard. In these circumstances, I do not consider that it was incumbent on the Claimants to suggest that the injunction could constitute a serious threat to the facility or give rise to a serious risk of Mr Rishover’s personal guarantee being called on.

Further, the TAB Facility is a bridging facility advanced to get the Project through to the end of planning permission, the Project has nearly reached that stage, and the best route for recovery for TAB would likely to be to wait for repayment in the ordinary course, knowing the security that they have over the structure and from Mr Rishover personally if that does not happen. In my judgment, that is also relevant in considering how likely it would have appeared that the injunction would have imperilled the facility and therefore whether this should have been flagged to the Judge.

By way of sense-check of this, the point was not- as far as I can see- made immediately by Mr Rishover in the correspondence after the 13 May hearing, such as AT’s 23 May letter. When it was raised, the risk was not put at quite the level that it is in Mr Rishover’s skeleton, namely that “the making of the Injunction Order was itself likely to be a threat to RLL’s financing facility with TAB”. For example, AT’s 31 May letter states that “our client anticipates that TAB are likely to have very real (and, quite possibly, existential) concerns in connection with the facility if Mr Ingrao was to be appointed as director of RLL at the same time as your clients have ongoing litigation against our client and an injunction in place” (underlining added) and this point was repeated in AT’s 6 June letter. The concern appears to have been that it would appear to TAB as if the persons instigating the action against the structure lent to would also be taking more control of it.

I deal separately below in applying the American Cyanamid test to what the position with TAB is now, but it is important to separate that out from how matters appeared at 13 May.

Allegation of holding to ransom the s.106 Agreement

Ms Ray states in her 9 May witness statement that Mr Rishover told her on 21 February 2022 that he would not sign the s.106 Agreement until Mr Martin agreed to go. Ms Clarke took the Judge to that in oral submission and submitted that this amounted to Mr Rishover seeking to put improper commercial pressure on the Individuals and abusing his position as director.

Mr Friedman submits that the Claimants should have put to the Judge that Mr Rishover might have a defence to this assertion or disagree with its characterisation. He pointed to Mr Rishover’s evidence that the delays have been down to the local planning authority, that negotiations have been going on throughout and that the s.106 Agreement should be finalised and agreed imminently. He submitted that it should have been pointed out by the Claimants to the Judge that (1) it was self-evidently in Mr Rishover’s interests to have the s.106 Agreement finalised, given that it will cause an immediate uplift in the value of the Property and allow Mr Rishover to replace the TAB Facility with lending that does not require a personal guarantee from him, and (2) that there were reasons for the delay in signing the s.106 Agreement that could not be laid at Mr Rishover’s door.

In response, Ms Clarke points out that Mr Rishover does not deny that he made the statement referred to by Ms Ray about not signing the s.106 Agreement and that the causes of the delay in issuing the s.106 Agreement were a separate matter.

In my judgment, there was no breach of duty by the Claimants in this regard. As Ms Clarke made clear in the relevant passage in the transcript, the broader point being made by the Claimants was that Mr Rishover was issuing a number of threats of acting in breach of the SHA. The fact that there were other causes of the delay in getting to a position where the s.106 Agreement was ready for signature does not detract from that.

The unacceptable breadth width and breadth of the Injunction Order was not mentioned

The first question is whether it should have been flagged to the Judge here that without an exception allowing Mr Rishover and RLL to take steps in the ordinary course of business, they would be exposed to the risk that ordinary commercial actions could have the effect of reducing the value of the Injuncted Assets and thereby breach the Injunction Order, unless conducted with the prior written consent of the Claimants.

The Injunction Order provides at paragraph 3 that “the Respondents must not, without the Applicants’ prior written consent, in any way dispose of, deal with or diminish the value of any of the Injuncted Assets”. The natural meaning of “diminish the value” is to cause to be less valuable, and in my judgment there is no requirement that the person in question must be trying to reduce the value or acting negligently in reducing the value. Even if, contrary to that, there is more room for argument about whether, particularly read in the context of an injunction order that is seeking to protect the shares in the Companies and the Property, something more is required than an act that causes the value to be reduced, nevertheless a respondent should not be placed in a position of any uncertainty on what practical steps are permitted by the order given the potential consequences of breaching it.

Ms Clarke put the following to the Judge on the point:

Therefore, there was material put before the Judge on the effect of paragraph 3 and the need for a mechanism to deal with transactions that might diminish the value of the Injuncted Assets.

However, the focus of the oral submissions was on the prohibition on dealing with the shares and Property themselves. Therefore, in my judgment, it should have been flagged to the Judge that the effect of the Order was that any transaction or business dealing which actually caused a reduction in the value of the Injuncted Assets, whether intended to or not, could violate the Order, and therefore that Mr Rishover might be expected to contend that there should be an exception for dealings in the ordinary course of business. Often such a carve-out does not need to be considered on an application for an injunction restraining the use of a particular asset, because such a restriction will not directly affect the running of a business. It is true that the Companies do not house businesses that for example buy and sell investments each day, where a multitude of actions could reduce the value of the shares in the businesses. Therefore, one should not overstate its practical significance. However, the restrictions imposed by the Injunction Order would still potentially affect the running of the Companies and therefore the Project, so it was necessary for this point to be flagged. Ms Clarke realistically accepted in oral submissions that on reflection this was a point that should have been raised before the Judge.

Second, I also consider that it should have been flagged that once the further shares were issued, the effect of the Injunction Order would be to stop Mr Rishover dealing with shares that he owned legally and beneficially. It is true that, as Ms Clarke made clear to the Judge, at the time of the hearing before him there was only one issued share, and Mr Rishover had- prior to his 12 May letter- declined to issue further shares. However, part of the purpose of the injunction was to help to encourage Mr Rishover to issue the remaining shares, and at this point it would be possible for the order to carve out shares owned by him.

Finally, Mr Friedman also submitted that it should have been flagged to the Judge that the order would restrict Mr Rishover’s rights under the SHA, insofar as those rights involved dealing with any of the Injuncted Assets. Mr Friedman points to the fact that the order would prevent Mr Rishover exercising his pre-emption rights under clause 16 of the SHA without written consent. As set out above, in my judgment there was no obligation to put to the Judge that there may have been a breach of clause 16 that Mr Rishover might wish to redress. Therefore, this point about clause 16 appears to me to be more theoretical than real. Similarly, Mr Friedman also points out in the section of his skeleton on American Cyanamid that the Injunction Order would prevent Mr Rishover effecting a compulsory transfer of the RLL shares under clause 17 of the SHA from the Claimants if that clause was triggered, for example by the insolvency of one of the Claimants, and would prevent him seeking to buying the Claimants’ shares under clause 15 in a case of deadlock. Again, these are not situations that have yet ever arisen and it should be remembered that there is a written consent exception that the Judge was taken to, so this point appears to me to be of limited practical importance.

I take this point into account in applying the American Cyanamid test and determining the terms of any injunction that should continue, and- as explained below- I consider that any revised injunction should contain a carve out to ensure that Mr Rishover’s rights under the SHA remain fully intact. However, I do not consider that it was incumbent on the Claimants to flag this point up to the Judge, and in any event any failure to do so would be of limited significance.

Failure to provide the document relied on by Mr Rishover

In his 12 May letter, Mr Rishover set out in some detail his position that Planning Permission had not yet been approved for the purposes of the SHA. As part of this, he stated that it was clear from the 1 March 2022 e-mail chain between among others Trevor Hutchinson (the planning consultant for the Project), the Individuals (save for Mr Green) and Mr Rishover that the Claimants were well aware that at that date planning permission had not yet been granted. Mr Rishover attached the e-mail chain to his letter, but the e-mail chain was not provided to the Judge or drawn to his attention.

I understand that a clip of recent documents was handed to the Judge during the hearing but through inadvertence that copy did not contain the e-mail chain. The Claimants submit that in any event, the document was not material.

Ms Clarke submitted that having heard Mr Friedman’s submissions, she understood what points might have been raised in relation to the document, but she submitted that the document would not have appeared to be material at the time.

In my judgment, the document should have been provided to the Judge and drawn to his attention given Mr Rishover’s reliance on it. However, the failure to do so was innocent and I regard the document as of limited relevance.

The chain relates to the Revised Access Application. The statement that Mr Rishover places reliance on was a comment made by Mr Ingrao in response to Mr Hutchison forwarding on confirmation that the Revised Access Application had been received and acknowledged by the local planning authority. Mr Ingrao wrote to Mr Hutchison to thank him for his work and commented “Let’s hope the next 8 weeks organically roll out in the right direction”.

Mr Rishover states that this demonstrates that the Claimants appreciated that planning permission had not been granted. However:

Fair presentation of the financial allegations against Mr Rishover

Ms Clarke submitted to the Judge that there was a concern about misappropriation of assets, relying on the 24 March 2022 witness statement of Ms Hoare. Mr Friedman submits that the Claimants failed to give a fair presentation of the allegations.

The main different strands of the allegations were as follows:

Mr Friedman makes a number of specific submissions on this, that I shall deal with briefly in turn.

First, he submits that it should have been made clear that Mr Rishover was likely to say that he had not misappropriated funds and that he had put significant funds into RLL far in excess of the amounts complained of, such that on any view Mr Rishover would be owed money by RLL. He points to a passage in Mr Rishover’s 21 July 2022 witness statement saying that he understands that as at May 2022 he and his companies were owed £1.03m. In my judgment, it should have been flagged that Mr Rishover and his companies had injected significant funding into the Project. On the documents that I have seen, the Individuals were aware of this, not least as one of the key recent complaints from Mr Rishover in 2022 has been that he had funded the Project to a greater extent than he was happy with, so it should have been mentioned by way of context. However, in my judgment this point should not be overstated, given that it does not provide a direct answer to any of points (1) to (3) above.

Second, Mr Friedman submits that it should have been explained that a number of the transactions were intra-group transactions where there could be no possible adverse impact on the Claimants. I reject that submission. Ms Hoare makes clear at paragraph 10 of her witness statement, which the Judge was taken to, that there was a significant intercompany balance between LHGCC and RLL, and it was made clear in the submissions that the transactions referred to at (1) and (2) involved the transfer of monies by LHGCC up to RLL.

Third, he submits that Ms Hoare was likely to have an axe to grind, that this would have been clear on reasonable enquiries and that this should have been mentioned to the Court. He points to a passage in the 14 June 2022 witness statement of Mr Paydon, the partner with conduct of the matter at AT, that Mr Paydon is instructed by Mr Rishover that the account by Ms Hoare of her resignation is misleading. I reject this submission. In my judgment, this was a point for Mr Rishover to take if he considered it to be the case, not for the Claimants to raise. I note that Mr Rishover does not deal specifically with the points in (1) and (2) above in his 21 July 2022 witness statement. Therefore, on what I have before me I do not consider that the Claimants should have suggested that Mr Rishover would contend that that Ms Hoare’s evidence was likely to have been coloured by the circumstances of her resignation. Further, I would have expected Mr Rishover to have dealt in his own witness statement with the point if he was to make allegations about the motives of Ms Hoare.

Fourth, he submits in relation to point (3) above that the Claimants should have put forward Mr Rishover’s potential defences. The general manager of LHGCC, has provided an e-mail to Mr Rishover since the 13 May 2022 hearing explaining that the cost of the plants was approximately £18,500 rather than £80,000, that the reason for LHGCC ordering the plants was that it had an active account with a tree and plant supplier and that the “recharge” invoices were paid by one of Mr Rishover’s Heronslea companies. It is suggested that this could have been discovered through reasonable enquiries. In my judgment, the Claimants were entitled to rely on Ms Hoare’s evidence, which they took the Judge to. While the £80,000 figure appears to have been wrong and that it should have referred to £18,500, Ms Hoare did say that the sum was ultimately recharged to the Heronslea companies. It appears to be accepted that the plants were ordered by LHGCC, for one or more of Mr Rishover’s companies, and that Mr Rishover’s other companies ultimately met the cost. In my judgment, while it is true that the Claimants could have asked Mr Rishover about this in the period since Ms Hoare’s statement, in my judgment it was not incumbent on the Claimants to interrogate the £80,000 figure provided, or otherwise seek further evidence as to Mr Rishover’s possible response to this. It should be remembered that there had been a number of occasions after Ms Hoare’s statement where one or more of the Individuals, particularly Mr Martin, asked Mr Rishover for more financial information about the Companies, and Ms Ray’s account in her witness statement is that such information was not provided.

Failure to explain that the Claimants’ undertaking in damages might well be insufficient

In response to a question from the Judge about the financial worth of the Claimants in the context of their undertaking in damages, the transcript records that Ms Clarke responded that “obviously they are notional shareholders with a shareholding of £15 million on their own assessment”.

Mr Friedman submits that this was misleading. He accepts that a £30m valuation of the Property had been obtained, but submits (1) that the lending was more than £15m, (2) that the value of the shareholding would be far less than £15m on a fire sale if the lending was called in by TAB, and (3) even if the Property was worth more than the value of the lending, that would be of little use to Mr Rishover if the personal guarantee was called on, because RLL would not be able to meet any demand for immediate payment such that Mr Rishover would be liable for the full amount to TAB.

Taking (1) first, the £30m valuation appears to be the Colliers valuation as at 29 September 2021, which put the value of the Property without planning permission at £30m, and £38m with such permission. The loan monies advanced under the Rischco and TAB Facilities are together of the order of £14m. I have not been provided in submissions with details of what Mr Rishover contends the full scale of lending is beyond that or the true value of the shares, and one of the Claimants’ complaints is that they do not have a clear picture of the full creditors and debts of the different Companies. From what I can tell, the lending is of the order of £15m. Therefore, in my judgment, the comment of Ms Clarke should likely have referred to the collective shareholding of the parties including Mr Rishover, rather than the Claimants’ 62% shareholding, so that the figure would need to be scaled down accordingly. While that appears to me to have been an error, I do not consider it changes the general picture: putting to one side the situation of a fire sale- which I deal with in relation to point (2) below- the Claimants’ shareholding is worth a very significant amount.

In my judgment, points (2) and (3) are dependent on there being an obligation to suggest to the Judge that there was a significant risk that the TAB Facility or the personal guarantee ancillary to it would be called in. I have dealt with that above: I do not consider that there was such an obligation.

Whilst they were attractively put by Mr Friedman, I have rejected a significant number of Mr Rishover’s submissions.

Nevertheless, in my judgment there were breaches of the duty of fair presentation, albeit a number of them were minor.

To evaluate the appropriate response to them, I will take them in the round together with the other grounds for discharge, and the arguments as to whether the American Cyanamid test is satisfied. Therefore, I deal with those first, before setting out my conclusions.

This is a convenient point at which to take the element of the Claimants’ Variation Application that seeks an order under CPR r.23.7(4) retrospectively directing that sufficient notice had been given. I take the reasoning for seeking this to be that if that application succeeds, then sufficient notice will have been given and there is not a breach of the duty to give full and frank disclosure. This element of the application was responded to by Mr Friedman in his skeleton. Ms Clarke explained in the opening section of the hearing that she was not pursuing the point, but given that the point was raised in the application and that- if there is still jurisdiction to make a CPR r.23.7(4) order- the Court can in theory make one of its own volition, I shall deal briefly with the point.

I refuse this element of the Variation Application.

CPR r.23.7(4) provides that:

“(4)

If—

(a)

an application notice is served; but

(b)

the period of notice is shorter than the period required by these Rules or a practice direction,

the court may direct that, in the circumstances of the case, sufficient notice has been given, and hear the application.”

In my judgment, the provision makes clear that it is intended that the direction will be given before the Court goes on to hear the application. Therefore, such an order should be sought and obtained before the Court hears the matter on short notice, which was not done here.

In any case, in my judgment it would not be appropriate to make such an order retrospectively here even if that is possible, in the circumstances. The true position on service was not put to the Judge at the 13 May hearing when it should have been, so that the Judge could not himself consider on an informed basis at that hearing whether to make such an order. Therefore the consequences of the failure to comply with the duty of fair presentation should be evaluated on ordinary principles.

The unissued claim form had been provided to Mr Rishover with the initial application papers. By paragraph (2) of Schedule B(2) to the Injunction Order, the Claimants, Mr Ingrao, Ms Ray and Mr Martin undertook that “[a]s soon as practicable the Applicants will serve an issued claim form in the form of the draft produced to the court”.

The claim form was served on Mr Rishover on 24 May 2022, ten days after the hearing, and on RLL on 9 June 2022.

In respect of service on Mr Rishover, Ms Andrews states in her witness statement that she mistakenly thought that the Injunction Order provided the Claimants with 14 days to serve the claim form and particulars of claim. That tallies with her 24 May letter to AT, which suggested that this was the order that the Court had made. In respect of service on RLL, she explains that she sought to serve the claim form on RLL at the same time as on Mr Rishover, but through an internal error at the Claimants’ solicitors this was not done and- on Ms Andrews discovering on 1 June that the claim form had not been served- a further error meant that the claim form was not sent out then.

Mr Friedman contends that this breach of the undertakings itself justifies discharge of the Injunction order. He relies on the explanation of Neuberger J in Flightwise Travel Services Ltd v Gill [2003] EWCA Civ 3082 (Ch) at [28] that:

“it is important that undertakings given by an applicant, effectively in return for which the freezing order is granted, are complied with, and if they are not that there is a good explanation as to why. The fact that there is a failure to comply with an undertaking given by the applicant to the court, in return for which the injunction was granted, is a potentially serious matter and may, in appropriate circumstances, justify the discharge of the injunction. Bearing in mind the nature and effect of a freezing order, and the fact that it is granted initially ex parte, an applicant should be in no doubt that the court will regard any failure to comply with an undertaking given in the freezing order itself is seriously viewed. Of course, if the breach of the undertaking does not cause the respondent, or anyone else, any damage that would be a mitigating factor. But it does not discharge the gravity of failure to comply.”

Mr Friedman points out that the failure to serve on time gave the Claimants the advantage of being able to consider while finalising the particulars of claim whether the claim form needed amendment before making a decision as to whether to seek to amend the claim form without permission. He also points out that AT stated in a number of letters from 23 May 2022 that the claim form had not yet been served on RLL.

In response, Ms Clarke submits that there has been no prejudice through the breaches and that RLL is a neutral entity so that lessens the seriousness of the breach in relation to it.

In my judgment, these breaches do not on their own justify discharge of the Injunction Order.

They should not have happened and they arose through a series of errors. Moreover, they were significant delays. However, as Ms Clarke submits the Defendants have not been materially prejudiced by the breaches in circumstances where they had the unissued claim form before the 13 May 2022 hearing. Neuberger J was clear that in an appropriate situation, a breach of undertaking should lead to discharge, but in my judgment this is not such a case. Absence of prejudice is a mitigating factor, as Neuberger J explained in Flightwise, as did Mann J in Gorbunova v Berezovsky [2013] EWHC 76 (Ch) at [55]. Nor have the Claimants benefited from the breach: the claim form was not amended and I have not seen any evidence that they sought to consider whether to amend it in the time between the 13 May 2022 hearing and service of it.

In my judgment, the breaches should instead be taken into account together with the other breaches of duty in determining whether the Injunction Order should be discharged.

Mr Friedman puts forward three propositions of law.

I accept that propositions (1) and (2) are correct. In my judgment, proposition (2) extends beyond affidavit and witness statement evidence to other statements made to the Court. I also accept proposition (3): it is obviously not proper for one party to intentionally mislead another in relation to the breach of duties to the Court.

Mr Friedman makes two submissions on the facts:

These are serious allegations to make. Therefore, I shall sketch briefly the main correspondence between the parties on the point after the 13 May 2022 hearing:

Ms Andrews explains in her witness statement that she was out of the office from 27 May to 13 June and that she tried to respond to AT’s requests as quickly as possible.

Mr Friedman contends in respect of the correspondence that the 25 May response was deeply inappropriate and that the Claimants then tried to close down the matter by refusing to respond to correspondence.

In my judgment, the Claimants should have expressly accepted considerably sooner than 7 June that proceedings had only been served on 12 May in light of AT’s 23 May letter. The service point was a relatively straightforward one to consider once raised. Further, in my judgment, the matter should have been brought back to the Court sooner so that the Court could consider how to proceed.

To the extent that Mr Friedman is putting his submission higher than that, I reject it. Nor do I consider that Hamlins or the Claimants sought to cover up their breach in correspondence. The 25 May letter explained in some detail why the Claimants did not at that stage consider the points taken by AT to be material ones, and this was a stance that Hamlins maintained in their 7 June letter. I also bear in mind in evaluating the delay in providing through the 7 June letter the confirmation sought about the date of formal service that there was an extremely significant volume of correspondence from AT in the period from 23 May and Ms Andrews was out of the office from 27 May.

In my judgment, the failure to accept sooner the defect in service and bring the matter back to the Court should not itself lead to discharge of the Injunction Order. The matter was brought back to Court by the mid-June applications, and the point was ultimately accepted by Hamlins on 7 June.

However it should be taken into account with the other breaches in determining whether to discharge all or part of the Injunction Order.

While Mr Friedman does not put this as a freestanding ground for discharge of the Injunction Order, he contends that this reinforces the unsatisfactory nature of the Claimants’ conduct.

Taking first the note, the Claimants did not provide a note of the 13 May hearing to AT. Instead, a transcript was provided on 30 May. Mr Friedman emphasises by reference to Interoute Telecommunications (UK) Ltd v Fashion Gossip Ltd, The Times, 10 November 1999, the importance of providing such a note. Lightman J explained in that case that “[t]his is essential so that the parties affected may know exactly what occurred and the basis and material on which the order was made, and so that in this way they may be provided with the material to make an informed application for discharge”.

I consider that a note should have been provided before 30 May, particularly in circumstances where AT had pointed out in its 23 May letter that 3 days’ formal notice had not been given of the Original Application, so that the hearing should be treated as one on short notice. I will take this into account when determining what the appropriate order is in respect of the injunction.

Turning to the provision of a skeleton, Mr Friedman contends that Mr Rishover should have been provided with one before the hearing but was not. Ms Clarke submits that the Chancery Guide (as it stood at the time of the 13 May hearing) provided at [21-76] that skeleton arguments should be exchanged and that there was no obligation to provide one to Mr Rishover before the hearing. I accept Ms Clarke’s submission there was no obligation to provide such a skeleton before the hearing.

Mr Friedman submitted that- even putting to one side the breaches of duty by the Claimants- the ordinary test for granting an injunction was not satisfied here and for good measure had not been satisfied at the time of the 13 May 2022 hearing in light of the information that should have been put before the Judge at that point, although his focus was on the present position.

The strength or weakness of the substantive case for an interim injunction is also a factor relevant to whether I should exercise my discretion to discharge the Injunction Order on the grounds of breaches of the duty of full and frank disclosure and/or regrant the injunction as sought in the Variation Application, as for example Christopher Clarke J explained in Yugraneft at [103].

I consider that the main question here is where the balance of convenience lies. I shall focus on applying the American Cyanamid test to the facts as they stand now, rather than at the 13 May 2022 hearing.

In my judgment, there is a serious issue to be tried here, because there is a decent argument that Planning Permission has already been approved for the purposes of clause 8.1 despite the fact that the s.106 Agreement has yet to be sealed. There is no express requirement that the planning permission be approved on an unconditional basis, and the act of approval could be argued to refer to the act of the planning body, to be distinguished from the satisfaction by the Claimants of any conditions attached to the approval. The SHA uses in clause 11.2 the concept of refusal of planning permission, which reads as if it is referring to the decision to reject the initial planning application, and the argument would be that the act of approval is likewise something that happens when the planning body takes its decision as to whether to refuse or grant the planning permission. I can see the counter-argument that the approval of Planning Permission is intended to mark the end of the first stage of the Project and that the development work can begin and that this may be said to be a purposive interpretation, and one that reflects a decision to make Mr Rishover the front-man for the Project that dealt with third party planning bodies until the development work was ready to begin. However, there appears to me to be on the wording of the SHA a decent argument to the contrary.

Mr Friedman’s submission on the serious issue to be tried requirement is a different one. He submits that the injunction is not holding the ring until trial, because the Claimants are seeking an order to freeze the Injuncted Assets, which is an injunction unrelated to the final relief sought by the Claimants. As explained above in the section on the types of injunction, I accept that submission in respect of the KEPC and LGHCC shares and the Property, but reject that submission in respect of the RLL and Morelane shares. In respect of the RLL shares, for example, the final relief sought is specific performance of the obligation to transfer to the Claimants legal title to the relevant shares, which the Claimants contend is an obligation that has already fallen to be performed. As I have explained above, in my judgment an interim injunction can in principle be sought in support of that claim which protects those shares and their value.

Mr Friedman submits that damages would be an adequate remedy here. He points to two cases. The first is Re Canterbury Travel (London) Limited [2010] EWHC 1464 (Ch). In that case Briggs J held on an application by one shareholder for an interim injunction in aid of an unfair prejudice petition against another shareholder restraining the latter from passing various resolutions that damages were an adequate remedy because while the damage caused by the resolutions could be irreparable in relation to the company, such resolutions were unlikely so to diminish the value of the company that the applicant could not be properly compensated for it: [25]. The second is AB v CD [2014] EWHC 1 (QB), where Stuart-Smith J held that damages would be an adequate remedy for terminating a license agreement despite the fact that it could destroy the applicant’s business, because the fact of destruction could be taken into account in assessing damages: [24].

In my judgment, damages would not be an adequate remedy for the following reasons: (1) neither of the two cases referred to by Mr Friedman are dealing with proprietary injunctions- such injunctions support a claim for particular property, here particular shares in RLL, that the claimant contends that they are entitled to, and (2) specific performance is commonly available in relation to breach of an obligation to transfer shares in a private company.

The relevant factors here have moved on in significant respects from those before the Judge on 13 May.

I have considered, in light of the breadth of the original Injunction Order, the points on balance of convenience dealt with below and also taking into account the Claimants’ breaches of duty summarised above, a considerably cut down injunction, that would:

In my judgment, if an injunction is to be continued, it would need to be on those cut down terms.

I consider that the balance of convenience lies in favour of such an injunction, for the following cumulative reasons.

First, Mr Rishover has made statements that he can do what he wants with the assets. Even if those were made in the heat of the moment, at least in some cases, they indicate at best a lack of respect for the fundamental terms of the SHA and how the assets held in the structure should be dealt with.

Second, he failed to issue the shares on request until an application was made. The parties have plainly fallen out and there is a risk that he will not comply with the SHA if the discipline of the Court order is removed.

Third, he has not dealt head-on in his witness statement with a number of the allegations made against him, such as those relating to the Covid loans and business interruption insurance, or what he said and did on 9 May 2022 that the Claimants contend formed the immediate backdrop to the Original Application.

Fourth, Mr Rishover has, despite the apparent conflict of interest, procured that the Rishco Charge be entered into to give himself and companies linked to him security for sums apparently advanced to the joint venture structure. I consider this gives rise to concern about his attitude towards discharge of his obligations in respect of the SHA. Ms Clarke runs a number of further specific arguments about the Rishco Facility and Charge but I do not need to deal with them, because even without getting into them, the Rishco Charge gives cause for concern.

Fifth, Mr Rishover’s evidence is that the Companies below RLL do not have draft management accounts, which suggests that the financial affairs of those companies have at best been dealt with in an informal manner that does not give confidence that everything has been done properly.

Sixth, he has refused to agree to the appointment of Accura as joint auditor of RLL.

Seventh, as Ms Clarke submitted orally by reference to the RLL management accounts, while there are greater debts owed by RLL to Heronslea companies linked to Mr Rishover, there are debts owed by the Heronslea companies to the JVC structure, which suggest that there have been payments out of the structure to such companies.

Therefore, taken cumulatively there is some cause for concern about aspects of how the Companies have been run. Mr Rishover’s suggestion in [6] of his 21 July 2022 witness statement that he had understood until the present proceedings that the Claimants were content with how the Project was being run is difficult to square with the contemporaneous e-mails and WhatsApps, and the requests for auditors and financial information since at least late 2021.

Eighth, the cut down injunction set out in paragraph 188 above would impose few restrictions on Mr Rishover beyond not being able to dispose of or deal with the shares held for the Claimants.

Ninth, while I consider that TAB’s position needs to be taken seriously, I doubt that discharging the Injunction Order will put an end to a number of TAB’s other expressed concerns, such as that they were not previously informed of the litigation prior to Hamlins’ 23 June letter, that they were not told about the disputes with the Individuals at the time that the lending was taken out and that the Claimants are concerned about how the Companies have been run.

I was taken to the recent correspondence that Mr Rishover has had with TAB. It was submitted by Ms Clarke that the concern of TAB related more to the substantive claims against Mr Rishover rather than the injunction. My reading of the correspondence is that TAB are concerned by the possibility of a dispute between Mr Rishover and the others involved with the Project, particularly if there are any allegations that there have been financial irregularities within the Companies that could impact on TAB’s ability to be repaid. Therefore, from the perspective of the JV, I do not see how what has happened to cause a problem with TAB can be fully undone. Rather the realistic hope from the JV’s perspective must instead be that if TAB does consider that an event of default has technically occurred, TAB will take the pragmatic view that the sensible course would be to wait to see whether a development loan is obtained to repay the TAB Facility in full. The sealing of the s.106 Agreement is hopefully imminent, and whether or not Mr Rishover waits until the expiry of period for judicial review to transfer legal title of the relevant shares to the Claimants, steps towards obtaining a development loan could presumably begin.

I have taken into account carefully the arguments that the balance of convenience point against an injunction.

First, as Mr Friedman submits, an important aspect of the Judge’s reasoning in his Judgment was that an injunction would increase the prospect of Mr Rishover issuing the relevant shares: [20]-[22]. That has now been done. However, that was not the only reason for the injunction: it was stated to continue until trial or further order, and similar logic applies to the transfer of legal title to the shares.

Second, Mr Rishover has reiterated that the relevant shares are held on trust for the Claimants and that he will transfer legal title when the planning process has come to an end, subject to TAB’s consent, and has stated that formally in his defence filed at Court, verified by a statement of truth. However, in my judgment there remains- on the basis of his past conduct mentioned above- cause for concern as to whether in the absence of the discipline of a Court order he will indeed transfer them when the transfer process has come to an end and without conditions, as the Judge had concerns about whether he would issue the shares without a Court order in place. The fact that Mr Rishover has issued the shares following the making of the Injunction Order does not dispel this concern. I bear in mind in this regard that he sought in for example the 22 April 2022 e-mail to impose conditions on the issue of the shares. I also bear in mind that his position on the precise date on which he will transfer the shares after the s.106 Agreement is sealed does not appear to have remained constant- AT’s 8 July letter 2022 for example referred to the obligation arising on the s.106 Agreement being finalised and- save for the requirement of TAB consent- Mr Rishover’s 12 May 2022 letter did not mention any further conditions, but Mr Rishover’s 26 July 2022 defence referred to the date at which the period for a judicial review challenge to the agreement had expired: [18.1].

Third, to the extent that I consider that it is appropriate to order the appointment of Accura as auditor to RLL and for Accura and the Claimants to be provided with certain financial information, that provides an additional protection against Mr Rishover taking steps that might improperly reduce the value of the RLL shares. As set out below, I do consider it appropriate to order this. However, this does not provide an immediate or full answer to the concern.

Fourth, Mr Ingrao has now been appointed director of RLL and therefore, while I appreciate that there has been disagreement over what information he is entitled to see in that role, he can use his role to assist in the running of the Project and checking that RLL and- through RLL- the other Companies are run properly. This seems to me to be a factor to take into account, but it does not provide the restriction on disposal, dealing with or diminishing the value of the Claimants’ shares that the injunction does.

Fifth, in my judgment, it is unlikely that Mr Rishover will seek to dispose of the relevant shares (as opposed to take steps that could diminish their value) to persons other than the Claimants under the gaze of the Court, the Claimants and TAB. That would not be a straightforward exercise and Mr Rishover would know that such action would be heavily criticised by the Court and that he would likely to be required to compensate the Claimants if he did so. It could well also constitute a Change of Control for the purposes of the TAB Facility and therefore risk that facility and Mr Rishover’s personal guarantee being called on, unless TAB was supportive of the disposition. Further, while he has made a number of ill-advised threats at various points to dispose of the business or shares, I have no evidence before me that he has sought at any point to make them good.

Ms Clarke submitted that a lender might be persuaded to put one of the Companies into administration and that the business could then be sold under a pre-pack without the Claimants or the Individuals having a chance to object. I doubt TAB would have any appetite to take any steps in concert with Mr Rishover, who they have expressed in their recent correspondence distrust of. However, as Ms Clarke has pointed out, the Rishco Charge entered into on 8 April gives the power for the lender- two of Mr Rishover’s companies and Mr Rishover himself- to sell if the facility is not repaid on demand, or to appoint an administrator or receiver. Therefore, even if unlikely, this sort of possibility cannot be ruled out, in circumstances where the granting of that charge is a matter of concern.

Sixth, my reading of the dialogue with TAB is that TAB would prefer that the injunction was discharged, whatever concerns they may hold about the claim more generally, and therefore discharge could reduce to some degree the risk of the loan being called in or the personal guarantee being called upon. However, TAB’s attitude is difficult to predict with certainty, and its position appears to be rather more nuanced than simply depending on whether the Injunction Order is discharged, as explained above.

Seventh, Mr Friedman points out that by virtue of clause 8.2 of the SHA, on issue of the 199 shares, Mr Rishover appointed MDL as attorney able to exercise all rights in respect of the Trust Shares. That is true, and I consider this should be taken into account. However, given that Mr Rishover does not appear to have been fully respecting the operation of the SHA, I do not consider that is a decisive factor in judging whether additional protection for the Claimants is warranted in a situation where there is a serious issue as to whether they should already have been given legal title to these shares.

Finally, Mr Friedman points to the undertaking that Mr Paydon states at paragraph 70(d) of his first statement that Mr Rishover is willing to give, namely to comply with the terms of the SHA. The difficulty with this undertaking is that the parties’ interpretations of the SHA appear to differ significantly in a number of respects, and in my judgment a general undertaking of this kind offers significantly less practical protection than a specific injunction in the terms of the Injunction Order or the cut down version set out at paragraph 188 above, or- if Mr Rishover decided to give one- an undertaking mirroring the terms of such an injunction. Therefore, again I consider that this is relevant but not decisive.

I consider that the cut down form of injunction that I have set out above satisfies the American Cyanamid test. The points that have particularly resonated with me on balance of convenience are as follows:

Therefore, in my judgment, the American Cyanamid test is made out.

In my judgment, the key question is whether the breaches of the duty of fair presentation are sufficiently serious, taken against the backdrop of the other breaches of duty, to justify complete discharge of the Injunction Order, or whether- despite the breaches- a lesser response is warranted, such as the cut down injunction referred to above coupled with the possibility of a significant costs award against the Claimants.

I have a discretion in this regard. I have considered this point with particular care, taking into account the penal nature of the jurisdiction to deal with breaches of the duty of fair presentation.

There have been a significant number of errors on the part of the Claimants in relation to the Original Application and the period following the Injunction Order which Mr Friedman dealt with in detail in his submissions.

The errors should not have been made and I do not consider that these breaches can be dismissed, as the Claimants sought to do at points, as merely technical ones. As a practical illustration, had the Claimants realised the correct service position, they may have decided to list the hearing for the following Wednesday and thereby give 3 clear days’ notice, which would have given a greater opportunity for Mr Rishover to instruct Counsel to turn up to oppose the order, in order to seek to nip the injunction application in the bud before the injunction was granted. Similarly, as I have set out above, while the Judge may very well have agreed to hear the application if the true service position had been put before him, it is by no means certain that he would have: he may have adjourned the matter to the following week or (if he was willing to deal with it on 13 May) have refused to make an order under CPR r.23.7(4), thereby requiring the Claimants to provide full and frank disclosure. The fact that Mr Rishover was able to put in a long letter on 12 May is relevant, but it is no substitute for having legal representatives turn up at the hearing to oppose the injunction, or for full and frank disclosure being made in the absence of full notice to him.

Further, there were breaches of the duty of fair presentation, albeit in my judgment in most cases of a minor nature, and those failures are aggravated by the fact that the need to make full and frank disclosure was drawn to the Claimants’ attention in writing twice by Mr Rishover, on 12 and 13 May respectively, the breaches that occurred after the 13 May hearing and the failure to bring the matter back to the Court expeditiously.

These are serious points to take into account, and I note the comment of Christopher Clarke J in Yugraneft at [104] that the Court strongly inclines to setting aside an injunction in the case of substantial breach, at least in the case of a freezing injunction.

However, in my judgment, the appropriate course would be to allow the injunction to continue in the cut down form set out in paragraph 188 above, and penalise the Claimants in costs, rather than discharge the Injunction Order entirely, for the following cumulative reasons:

That leaves three elements of the Variation Application to be dealt with, namely the applications for (a) the appointment of Mr Ingrao as director of the Companies other than RLL (having already been appointed to the RLL board), (b) for the appointment of Accura as joint auditor, and (c) for various financial information.

Mr Friedman contends as a preliminary point that all three elements are an impermissible second bite of the cherry. His submission is that it would be an abuse of process to allow such an application to proceed now in circumstances when it could and should have been brought at the time of the Original Application. He relies on the following authorities for the proposition that where a wider application could have been made initially, an applicant should not be able to make it subsequently:

I reject this submission. Since the 13 May 2022 hearing there have been two relevant material developments, namely (1) the discovery that Mr Rishover does not consider that any management accounts have been produced for the Companies other than RLL, and (2) the disclosure of the Rishco Charge, both of which the Claimants contend have caused them concern about how the Companies have been run. Therefore, in my judgment something material has changed to make it appropriate to allow the Claimants to bring such applications to deal with these concerns. Specifically, I consider that these two developments do give such grounds for concern. Mr Friedman points out specifically in relation to the appointment of a director to the boards of the Companies that the draft consent order circulated by the Claimants to Mr Rishover on 12 May contains as part of the proposed agreement the appointment of a second director to the boards of the Companies. However, in my judgment that is not decisive in light of the development in the factual position set out in (1) and (2) above. In any event, as explained below, I do not consider that an interim order should be made for the appointment of Mr Ingrao to the boards of any Companies.

This is an application for a mandatory injunction. I do not view this as an order that is necessary to make to give effect to the main injunction, so if it is to be made, it must be justified on its own merits as a mandatory injunction.

Mr Friedman submitted that the test is as explained by the Court of Appeal in Zockoll Group v Mercury [1998] FSR 354, quoting the speech of Lord Jauncey in R v Secretary of State for Transport, ex parte Factortame Ltd (No.2) [1991] 1 AC 603 at 683: (1) “the overriding consideration is which course is likely to involve the least risk of injustice if it turns out to be ‘wrong’”, (2) “the cost must keep in mind that an order which requires a party to take some positive step at an interlocutory stage, may well carry a greater risk of injustice if it turns out to have been wrongly made than an order which merely prohibits action”, and (3) “it is legitimate, where a mandatory injunction is sought, to consider whether the court does feel a high degree of assurance that the plaintiff will be able to establish this right at a trial”. Ms Clarke did not dissent from this. I adopt these principles for this element of the Variation Application and those dealt with below. These principles are not intended to constitute a separate test from the ordinary American Cyanamid test. Rather points (2) and (3) are points to bear in mind when considering where the balance of convenience lies, because mandatory injunctions are typically more intrusive and difficult to undo than the consequences of prohibitory injunctions.

I reject this element of the Variation Application. In my judgment, the argument that the Claimants are entitled under the SHA to have Mr Rishover cause Mr Ingrao to be appointed to the boards of the subsidiaries is a weak one, and does not come close to giving me a “high degree of assurance” that the Claimants would establish the right they contend for at trial. Clause 5.4 of the SHA provides for the right to appoint a Director to the Board, a Director is defined as a director of the JVC, the Board is defined as the board of the JVC, and RLL is defined as the JVC, because it is the joint venture company. Therefore the structure appears to be that a director can be appointed to the board of RLL, and RLL has the degree of power in relation to its subsidiaries that the SHA envisages. Consistent with this, clause 2.1 of the SHA clearly distinguishes between the JVC and the subsidiary companies. In such circumstances, in my judgment I should not order on an interim basis the intrusive step of ordering the appointment of Mr Ingrao to a number of company boards.

Clause 3.2.4 of the SHA provides that at Completion the Shareholders shall procure that such shareholder and board meetings of the JVC are held as may be necessary to “appoint Accura Accountants Limited and Jeffreys Henry LLP as the joint auditors of the JVC”.

Hamlins requested on 16 May that an auditor be appointed and have repeated that request several times thereafter.

Starting with the appointment of Accura as an auditor of RLL, while Mr Friedman suggests in his skeleton that Jeffreys Henrys LLP have been appointed auditor, I understand from Mr Rishover’s witness statement that at present that while Jeffreys Henrys LLP have acted as accountants to RLL, they have not been appointed auditor. Jeffreys Henrys were Mr Rishover’s chosen auditors, and Accura the Claimants’.

In my judgment, an order should be made for the appointment of Accura as an auditor of RLL. Given the concerns over the financial management of the Business, it is important that an audit is carried out as soon as possible. For example, while a matter for the auditor, one would expect an audit of RLL to catch issues like the transfer of sums relating to RLL and intercompany balances, which are two of the three issues described by Ms Hoare in her witness statement. In my judgment, there is a “high degree of assurance” that such an order would be made at trial. Therefore, in my opinion this order can be justified on its own merits as a mandatory injunction. I do not consider that the fact that the injunction remains in a place in a cut down form removes the importance of an audit being carried out.

Mr Friedman runs three arguments against this. First, he contends that the obligation is on the Shareholders rather than just Mr Rishover. In my judgment, there is nothing in this point because the other Shareholders- the Claimants- are seeking the order. The recitals to the order can reflect, through an undertaking if necessary, the commitment of the Claimants to procure the appointment of Accura. Second, Mr Friedman contends that the obligation was a once and for all obligation on Completion and therefore does not apply subsequently. In my judgment, if not performed on completion, the obligation remains. There is nothing to remove it and it would be surprising if it lapsed immediately after Completion. Third, Mr Friedman contends that the parties did not proceed with the appointment of Accura at the time and thereby acquiesced in this state of affairs. However, there is no evidence before me close to sufficient to give rise to an estoppel claim or a variation of the SHA, and I note that a variation requires signed writing.

I do not consider that damages would be an adequate remedy. As Ms Clarke submits, the entitlement to require accounts to be audited is an important mechanism by which shareholders who are not involved in management are able to obtain accurate information about a company’s financial affairs. Moreover, it will in practice be difficult to prove specific loss from the failure to have an audit conducted so as to claim damages.

In relation to the balance of convenience, Mr Friedman submits that it is contrary to the interests of RLL to have to pay for two auditors, so that the balance of convenience weighs against this. In my judgment, this point is outweighed by the fact that the SHA provides for Accura and Jeffreys Henry to be joint auditors, and this appears to have been deliberately chosen to allow one outfit chosen by Mr Rishover and one by the Claimants. Similarly, I do not consider that this point is disturbed by the fact that Mr Rishover has made an open offer to appoint an independent firm of accountants. The Claimants are entitled to have the auditors that they bargained for.

Further, and importantly, I do not consider that there is any significant harm caused to Mr Rishover by having an audit conducted of RLL by joint auditors. Obviously there is some cost attached to it but an audit seems to me a sensible step, and Mr Rishover’s stance does not contradict that, since he proposes that an independent third-party auditor be appointed.

The final point is that the obligation under the SHA is to appoint Accura and Jeffreys Henry LLP as joint auditors, and this is reflected in the order sought in the claim form, but the draft order seeks the appointment of Accura as auditor without mention of Jeffreys Henry. In my judgment, the order should be for appointment of Accura as an auditor so as not to prevent the appointment of Jeffreys Henry alongside them. Further the obligation under clause 3.2.4 of the SHA is that the Shareholders procure that such shareholder and board meetings of RLL are held as may be necessary to bring about the appointment, so the order should reflect that.

Turning to the appointment of Accura as auditor of the Companies other than RLL, in my judgment the argument that the Claimants are entitled under the SHA to have Accura appointed as an auditor to the subsidiaries is a weak one. RLL is defined as the JVC, because it is the joint venture company, so on the face of it clause 3.2.4 is only requiring the appointment of Accura as an auditor of RLL. Consistent with this, clause 3.2.3 requires the registered office of the “JVC” to be a particular address in London, and so JVC is used there too to refer to RLL rather than more broadly. Similar points can be made about the use of JVC in clause 3.1.3, and clause 2.1 of the SHA, which clearly distinguishes between the JVC and the subsidiary companies.

I can see that there is room for argument about whether something has gone wrong in the wording, given that the SHA contains a number of drafting errors, such that JVC should be read as extending to the other Companies. For example, clause 12.3, discussed below, gives as an example of information that will assist in keeping the Shareholder informed about the Business the monthly management accounts of the JVC. However, I consider this to be a weak argument, and I do not consider that such an argument gets close to giving me comfort to a “high degree of assurance” that the right that the Claimants assert would be made good at trial, so I do not consider that I should order an intrusive step such as appointment of auditors to a number of Companies in such circumstances.

I also note for completeness that the issued claim form and the draft amended claim form prepared by the Claimants only provides for the appointment of Accura as auditor of RLL, although I do not view this as decisive given that the Claimants could apply if need be to amend the claim form.

The Claimants seek by paragraph 5 of their application notice an order that Mr Rishover “provide the [Claimants] and Accura…with access to, and facilities to make copies of, the books and records of the Companies, including any such books and records held by third parties but subject to [Mr Rishover’s] control”, and further or alternatively by paragraph 6 of their application notice an order that Mr Rishover provide a further affidavit setting out various financial information and exhibiting backing bank statements. Again, this is an application for a mandatory interim injunction.

This element of the application relies on the obligation of Mr Rishover under clause 12.3 of the SHA to “procure that the JVC shall supply each Shareholder with the financial and other information necessary to keep the Shareholder informed about how effectively the Business is performing and in particular shall supply each Shareholder with [1] a copy of each year’s Business Plan for approval in accordance with clause 10.3; [2] a copy of the audited accounts of the JVC prepared in accordance with the laws applicable in and the accounting standards, principles and practices generally accepted in the United Kingdom, within 3 months of the end of the year in which the audited accounts relate; and [3] monthly management accounts of the JVC to be supplied within 5 days of the end of the month to which they relate, which shall include a profit and loss account, a balance sheet and a cashflow statement and such other information as each Shareholder may reasonably require”.

Given that this element of the application seeks books and records of the Companies, I should also set out clause 12.2, which provides that “[e]ach Shareholder and its authorised representatives shall be allowed access at all reasonable times to examine the books and records of the JVC and to discuss the JVC’s affairs with its directors and senior management”.

Taking provision of information to Accura first, in my judgment, given the order for the appointment of Accura, the appropriate information order is that Mr Rishover procure that Accura is provided with such books and records as they may reasonably require to perform their task as joint auditor. It is implicit that the appointment of the auditor will carry with it the provision of necessary information to the auditor so that the auditor can fulfil his appointed task. I do not consider that a wider order should be granted in respect of Accura: the obligation to give access to books and records is an obligation under clause 12.2 to provide the Shareholder with books and records of the JVC (rather than the Companies more generally), and clause 12.3 does not provide anything about supply of information to the auditor(s).

Turning to the provision of information to the Claimants, other than that supplied to Accura, I consider that the order sought by the Claimants extends beyond the information provided for under clause 12.3. Clause 12.3 deals with “financial and other information necessary to keep the Shareholder informed about how effectively the Business is performing”, which is narrower than all books and records of the Companies.

What the Claimants have received- through the exhibits to Mr Rishover’s 20 May 2022 affidavit, are unaudited annual accounts (including management information) for Morelane, KEPC and LHGCC for 2019, 2020 and 2021, draft annual accounts for the same for 2022, monthly management accounts for RLL from July 2019 to 30 April 2022 and the profit and loss report for KEPC for 2021-22. There were apparently no management accounts for the subsidiaries.

I consider that the absence of management accounts in respect of the subsidiaries is troubling, particularly in circumstances where Ms Hoare has asserted that when employed as finance manager of LHGCC from September 2019 to July 2021 she produced full management accounts for that company.

I also note that clause 12.3 refers to what information is necessary to keep the Shareholders informed about how effectively the Business is performing rather than just the JVC (RLL).

Mr Friedman submits in his skeleton that given that Mr Rishover must procure that the JVC (RLL) provides information under clause 12.3 and that the Business is defined as the acquisition of Morelane, applying and obtaining for Planning Permission and developing the Property, the information covered by clause 12.3 does not extend to the business of the subsidiaries such as LHGCC, which runs the golf club. I can see the force of the submission that there must be some limits on the clause 12.3 obligation. However equally clause 12.3 relates to the performance of the Business which extends beyond RLL.

In my judgment, without deciding the precise limits of clause 12.3, I can have the requisite “high degree of assurance” that the Claimants would be entitled at trial to some further information on top of what they have received. Without more information, it is difficult for the Claimants to know how the Business is performing. In my judgment it is important that they receive some further information given the troubling absence of management accounts at subsidiary level and some of the other information that I have referred to above as giving cause for concern about how the Business has been run, and I do not consider that it gives rise to any countervailing significant disadvantage to Mr Rishover to procure the provision of it.

I do not consider that damages would be an adequate remedy for breach of the clause 12.3 obligation, particularly in circumstances where it will be extremely difficult for the Claimants to show any specific loss caused by such breach. Nor do I consider that the recent appointment of Mr Ingrao as director of RLL diminishes the importance of all of the Claimants being provided with the information that they are entitled to under clause 12.3, and I do not consider that I can assume that Mr Ingrao will in practice be provided with all information that would fall under that clause.

More difficult is to identify precisely what further information I can be confident that clause 12.3 requires Mr Rishover to procure the provision of by RLL. At this stage, the key information that I am confident falls within clause 12.3 is that set out in paragraph 6c of the Variation Application, namely information setting out any transactions that have occurred between (i) the Companies on one hand and (ii) Mr Rishover and/or companies connected to him on the other (the “Transactions”). The companies mentioned in (ii) are not intended to include the Companies and a suitable definition of “connected” can be found in section 249 of the Insolvency Act 1986. The information in paragraph 6c is the information that deals with the key concern, exacerbated by the absence of management accounts, namely the dealings between Mr Rishover’s own companies and the Companies. The sums that have passed between the Companies and Mr Rishover or his companies are relevant to the performance of the Business, because they go to what sums have been injected into the structure of Companies (whether for funding the project or otherwise) and what sums have flowed out, other than those related to unconnected third parties. Further, in considering how onerous or otherwise it would be to provide such information, I note that (a) Mr Rishover explains in his witness statement at [45] that sums have passed between the structure and him or his companies, and that his accountants have advised that Mr Rishover and his companies are owed £1.03m as at May 2022, and (b) they are transactions concerning him and his companies. Therefore, it appears to me that he can be expected to be able to provide information in respect of the relevant transactions.

I do not consider that the information set out in paragraph 6b, namely information about claims and funding related to Covid, falls into the same category, as- unless this results in transactions with Mr Rishover’s own companies- this appears to me to be more concerned with the employees of the operating subsidiaries rather than the Project and Business itself, and I do not consider that the argument for this information being included is strong enough to grant a mandatory injunction in respect of it. The information in 6a- information backing any amounts owed by or to the Companies as set out in the accounts exhibited to Mr Rishover’s 20 May 2022 affidavit- seems to me at least arguably to extend beyond information necessary to keep the Shareholders informed about how the business is performing.

Accordingly, I order that Mr Rishover provides for each of the Transactions the document(s) that set out the transaction in question, save to the extent that such documents have been provided by Mr Rishover to the Claimants already. For a loan, that document would be the loan document if it exists, for a sale, the contract of sale, and so forth. To the extent there is no such document or there is no document in Mr Rishover’s possession or control, Mr Rishover should set out briefly to the best of his knowledge the terms and date of the transaction in question. Given that these are transactions relating to Mr Rishover and/or his companies, in my judgment it is simplest to order Mr Rishover to provide these documents himself rather than procure their provision.

An alternative route to the conclusion that I have reached is that the relevant material should be provided as ancillary to the main injunction. I have cut down that main injunction significantly, and given that it no longer catches shares other than those of RLL, I do not consider that the consequence of there being no management accounts for the subsidiaries should be provision of full equivalent information relating to those subsidiaries. However, in my judgment, it is nevertheless necessary- in the absence of management accounts and given the concerns raised by the Rishco Facility and Charge- for the Claimants to have clarity as to the full extent of any dealings between the Companies on one hand and Mr Rishover and his companies on the other, so as to have visibility as to the value of the RLL shares that the injunction is seeking to protect from diminution, and therefore also whether any future transaction does breach the injunction by diminishing the value of the Claimants’ RLL shares.

If the Claimants consider that they need more information than the above, then a prompt final determination of what information is caught by clause 12.3 will need to be sought.

For completeness, in my judgment, the alternative relief sought in paragraph 6 of the application notice, namely an affidavit backed by documents, does not fall within clause 12.3, which contains no requirement for an affidavit.

Finally, Mr Friedman submits in his skeleton that the claim for financial information pleaded in the particulars does not fall within the ambit of the claim form, but the Claimants provided under cover of Hamlins’ 30 May letter a proposed amended claim form that does include a claim for information and the amendments were consented to by AT on Mr Rishover’s behalf.

Looking to the future, there were a number of references to the possibility of the transfer of legal title to the shares heralding wider litigation in the form of an unfair prejudice petition and the possibility of injunctive relief being sought in relation to that. Any rulings on that will necessarily be matters for another day, but one cannot but view with dismay a situation in which a JV on the cusp – after a number of years’ effort- of being able to turn to the development itself, finds itself mired in litigation that has already been both hard fought and expensive. The parties will no doubt reflect on that and whether there are any other ways of resolving their differences.