Grenda Investments Ltd v Barton

I have before me cross-applications by the Claimant, Grenda Investments Limited (‘Grenda’) and the Defendant, Mr Philip Barton (‘Mr Barton’) as follows: an application for Grenda for summary judgment on its claim against Mr Barton under certain loan facilities; and an application by Mr Barton to strike out the proceedings on the basis that the continued pursuit of them by Grenda amounts to an abuse of the process of the Court.

The first of the applications to be issued was Grenda's summary judgment application and it was this application to which counsel's oral submissions were directed in the first instance. In dealing with the applications in this judgment, it is, however, more convenient to adopt the approach adopted in both skeleton arguments and to address first Mr Barton's strike-out application and only after that, Grenda's summary judgment application.

Before coming on to do that, I should first say something about the underlying claims. These are brought under three loan facilities (‘the Facilities’) entered into between Grenda and Mr Barton as follows: first, the Biomass Loan Facility dated 8 April 2013 (‘the Biomass Facility’), described in the Particulars of Claim as the ‘E5.5 million Facility Agreement’ and in the Defence as the ‘First Facility Agreement’; secondly, the Silmag Loan Facility dated 27 February 2014 (‘the Silmag Facility’), identified in the Particulars of Claim as the ‘USD 6.3 million Facility Agreement’ and in the Defence as the ‘Third Facility Agreement’; and thirdly, the Norwegian VAT Loan Facility dated 26 March 2014 (‘the Norwegian Facility’), described in the Particulars of Claim as the ‘E300,000 Facility Agreement’ and in the Defence as the ‘Fourth Facility Agreement’.

These Facilities, which were each subject to English law and were in similar form, all contained provisions. These included certain provisions dealing with rights of set-off in clause 8.3, which states:

Besides those provisions dealing with the question of set-off, the Facilities each also contained the following provision, namely, clause 13.1 in these terms:

Mr Lord QC for Grenda, puts forward the summary judgment application on the basis that the claims are, in effect, straightforward debt claims, which there is no realistic prospect of Mr Barton successfully defending. Mr Hext QC, for Mr Barton, submits that this is too simplistic an approach. He stresses that there is an important context which needs to be borne in mind and that that context makes it inappropriate to exceed to the summary judgment application which Grenda has brought. Specifically, but nonetheless only describing the context at a somewhat high level, Mr Hext makes the point that Grenda was owned and controlled at all material times by a Mr Andrew Ruhan, who also owned and controlled a BVI company called Bluestone Securities Limited (‘Bluestone’). Mr Ruhan and Mr Barton, Mr Hext points out, had a longstanding business relationship which entailed the one lending the other, or companies owned by them, money. The Facilities sued under by Grenda are, Mr Hext observes, therefore, merely further instances of financial dealings between the two men.

Mr Ruhan, Mr Hext also points out, is somebody who has been involved in litigation before this Court, namely Orb Arl v Ruhan (2012 Folio 1414) (the ‘Orb Litigation’) which came initially before Cooke J and subsequently before Popplewell J. Details of that dispute are set out in the judgment of Popplewell J dated 15 April 2016. I do not propose, in the circumstances, to set out those details in what is, after all, an ex tempore judgment dealing with summary applications made on both sides. Instead, and since it is not controversial, at least as I understand it, I propose to adopt the summary which Mr Hext set out in his skeleton argument at paragraphs 8 to 14 - based, as that summary is, on Mr Barton's evidence before me.

Specifically, Mr Hext describes Mr Ruhan and Mr Barton as both having operated company structures through which loans between the two or their companies were made and utilised. Mr Hext refers to Mr Ruhan's company structure as being a complex web of companies under the ultimate legal ownership of two solicitors in the Isle of Man, namely Simon Cooper and Simon McNally and that structure being broadly known as the ‘Arena Settlement’. Latterly, as Mr Hext goes on to explain, because of developments in the Orb Litigation, Mr Ruhan used a structure legally owned by Mr Anthony Stevens and those companies included the Phoenix Group Foundation, Grenda and Bluestone. It is Mr Barton's contention, in these proceedings, as indeed was also the contention of the claimants in the Orb Litigation, that Mr Stevens acts as a nominee for Mr Ruhan in relation to those companies. Although this is disputed by Mr Stevens, Mr Lord realistically accepted that, for present purposes, I am unable to reach a concluded view in relation to that and should, indeed, proceed on the basis that what is alleged by Mr Barton is the case, albeit that it is not accepted to be the case in substantive terms.

Part of Mr Barton's company structure was a company called Minardi Investments Limited (‘Minardi’) and Mr Barton also used Mr Cooper and Mr McNally to administer certain other companies within that structure.

In early 2008, Mr Barton lent US$30 million to Mr Ruhan, that loan being recognised as a loan by Minardi, Mr Barton's company, to a company within the Arena Settlement, Mr Ruhan's structure of companies, namely Unicorn Worldwide Holdings Limited (‘Unicorn’). Some four years later, in 2012, the Orb Litigation commenced.

The key parties behind Orb included a Dr Gerald Smith and his ex-wife, a Dr Gail Cochrane. In very broad terms, the detail being set out in the judgment of Popplewell J, as I have indicated, various Orb assets were sold to Mr Ruhan and companies associated with him for a consideration of the issue of loan notes, in the sum of £40 million, by one of Mr Ruhan's companies. These assets included three hotels in the environs of Hyde Park. The Orb claimants alleged in the Orb Litigation that there was an oral agreement between them and Mr Ruhan that Mr Ruhan would split certain profits made from the assets and, in particular, profits made from the development of the hotels to which I have referred. In due course, the hotels were, indeed, developed and sold realising substantial profits. Mr Ruhan, however, did not account to the Orb claimants for what they alleged in the Orb Litigation was their share. They, accordingly, sued in respect of that alleged failure on Mr Ruhan's part, seeking to recover what they alleged were the traceable proceeds of the profits. Much of the profits that were made in relation to the hotels were, in fact, made by companies ostensibly owned or controlled by Mr Stevens and the Orb claimants' position in the Orb Litigation was that, as I have indicated previously, Mr Stevens acted as Mr Ruhan's nominee in relation to those companies.

In 2013, so the year after the Orb Litigation was commenced, Mr Barton approached Mr Ruhan, seeking a loan to invest in a biofuel generating project in Spain and that request ultimately resulted in a loan facility, namely the Biomass Facility to which I have previously referred and under which one of the claims in the current proceedings is brought by Grenda, the lender formally being Grenda and Mr Barton being the borrower.

The following year, 2014, it was Mr Ruhan’s turn to approach Mr Barton for funding. The details of this are described in one of Mr Barton's witness statements for the purposes of the applications before me and I shall return to them in a short while. Essentially, Mr Ruhan was seeking from Mr Barton urgently to borrow approximately $27 million. Again, the detail is set out in Mr Barton's witness statement, but his position essentially in relation to that request was that, whilst he was content to comply with it, he wanted, first, to pay off the borrowing made pursuant to the Biomass Facility and, secondly, to have enough funds left over to make certain investments of his own. It is, in those circumstances, the request by Mr Ruhan being an urgent request, that, again consistent with Mr Barton's evidence before me, Mr Hext describes Mr Barton and Mr Ruhan as agreeing that Mr Barton would make a loan to Mr Ruhan, but that Mr Barton would have an option to set-off that loan against the Biomass Facility and Mr Barton would not be called upon to repay that facility prior to satisfaction of Mr Ruhan's obligation to repay the loan to him and that any future borrowing that Mr Barton needed to take out with Mr Ruhan would be subject to the same arrangement.

It is in relation to this aspect that there is controversy between Mr Hext and Mr Lord, and their respective clients. It is, indeed, in relation to this aspect that the summary judgment application substantially turns. Specifically, Grenda does not accept that there was any such agreement reached between Mr Barton and Mr Ruhan (and so Grenda). I shall have to come back to this in a little more detail when dealing with the summary judgment application. However, the allegation (as it is put in Mr Barton's witness statement, in response to the summary judgment application) is that the agreement regarding set-off and the timing of repayment under the Facilities was made at a meeting which took place between Mr Barton and Mr Ruhan over dinner in Zurich on 6 February 2014 and so after the Biomass Facility was entered into and relatively shortly before the other two Facilities were entered into, as well as very shortly before what is described as the Bluestone Loan (namely the loan for US$27 million sought by Mr Ruhan as previously mentioned) was concluded. As to that, the Bluestone Loan, this was entered into on 10 February 2014 (a Monday), Mr Barton having been sent a draft of the relevant loan agreement to sign in the afternoon of the previous Friday, 7 February 2014, and having been chased by Mr Walmsley, Mr Ruhan's lawyer, over the weekend, to send over the monies which Mr Barton, wearing his Minardi hat, agreed to lend Mr Ruhan's company, Bluestone.

Again, I shall have to come back to consider this matter in more detail later, but it is Mr Barton's case that the Biomass Facility and the subsequent facilities were subject to a contractually binding option exercisable by Mr Barton to set-off and a promise that prepayment would not be demanded whilst the Bluestone Loan was outstanding. Mr Hext suggests, both in his skeleton argument and orally, that the arrangement described by Mr Barton and relied upon in response to the summary judgment application was essentially a four-party arrangement, between Grenda, Bluestone, Minardi and Mr Barton.

What then happened is, Mr Hext goes on to point out, that the bulk of the money borrowed by Bluestone, some £15.5 million, was paid to a company within Mr Ruhan's structure, namely Global Marine Systems Limited (‘Global Marine’) in order to repay monies owed by Grenda to Global Marine – a further E1 million being used to pay a personal debt of Mr Ruhan. Immediately following repayment of the monies to Global Marine, that company made a further loan of £20 million to Grenda. Accordingly, as Mr Hext observes, the source of the lending subsequently made by Grenda to Mr Barton appears to have been Global Marine, one of Mr Ruhan's own companies.

Towards the end of February 2014, Mr Barton sought further borrowing from Mr Ruhan, namely the Silmag Facility and the Norwegian Facility, which are also sued under in these proceedings. Those loans, like the Biomass Facility, were made by Grenda to Mr Barton personally, and so Mr Barton contends, were subject to the same set-off agreement which I have described as having been concluded in Zurich in early February 2014.

In the meantime, the Orb Litigation had been continuing. Mr Barton was not himself involved in it at that stage and, although he did not know it, during the period from late 2013 to April 2014 or thereabouts, the claimants in the Orb Litigation were in negotiation with Mr Cooper and Mr McNally in relation to the assets of the Arena Settlement. They sought, and ultimately agreed, in that period that Mr Cooper and Mr McNally would hand over to them those assets on the basis allegedly that they represented the traceable proceeds of the share of the profits that Mr Ruhan ought to have accounted to them for. It was not until 9 April 2014 that Mr Barton, according to his evidence, found out about this. In essence, as he put it, the Orb claimants had "taken over Mr Ruhan's empire". It was this, together with a suggestion which was made to him at about this time, that assets belonging to him namely certain hotels in Mallorca came within the scope of Mr Ruhan's empire, that led to Mr Barton being, as Mr Hext describes it in his skeleton argument, courted by both sides to the Orb Litigation, and ultimately forced to choose between them. His choice was to side with the Orb claimants, upon his discovery, so he says, that the Bluestone Loan, which Mr Ruhan had urgently sought from him, had been used to repay Global Marine, only for Global Marine to make a further larger loan to Grenda a few days later, as I have described.

I shall come back to the significance of 9 April 2014 later, specifically when dealing with an email which Mr Barton sent to Mr Stevens on that day. I shall also, in that context, have to deal with certain other exchanges concerning the possible entry into a written set-off agreement, but that will be for later. Focusing for present purposes on the chronology, on 25 May 2014, Mr Barton caused Minardi, his company, to assign the Bluestone Loan to Unicorn, consistent with his decision, as I have said, to side with the Orb claimants in the Orb Litigation. By this stage, as part of the Arena Settlement, Unicorn was under the control of the Orb claimants, hence my reference to Mr Barton's decision to side with them and so to enter into the assignment. This led to a demand on behalf of Unicorn on 30 May that year for repayment of the Bluestone Loan, which itself led to a reaction from Mr Ruhan. A few days later, Grenda instructed Swiss lawyers in the US firm of Akin Gump to issue to Mr Barton a notice of default in relation to the Norwegian Facility with a repayment date, unlike the others, which was in very short order.

Based on the alleged default in relation to the Norwegian Facility, demands were also made for immediate repayment of the other two Facilities pursuant to the terms of the relevant agreements. Having assigned the Bluestone Loan to Unicorn, the Orb claimants then sought the transfer of Minardi (the company itself) to assist them with their investigation and pursuit of the Orb Litigation. It was agreed, however, that Mr Barton would first be permitted to strip out the assets that he had introduced into the company over the years that it had been under his control, in order to enable him to transfer the shares in the company to the Orb claimants for nominal consideration. The main assets that Mr Barton had introduced into Minardi were a 50% ownership or right to profits from two construction projects in Qatar, $30 million that had been loaned to Unicorn in 2008 and the $27 million loaned to Bluestone in early February 2014. The total figure, arrived at with the assistance of Mr Barton's accountants, in respect of these assets was some $181 million and so it was that on 3 August 2014 he and Minardi executed an agreement described as the Amended and Restated Loan Agreement which confirmed Minardi's debt to Mr Barton in that sum or thereabouts.

On 13 August 2014, Grenda issued and served the present proceedings against Mr Barton. The following day, Mr Barton entered into a further agreement with Minardi, by which Minardi granted Mr Barton certain rights in relation to the Qatar project, the Unicorn loan dating from 2008 and the Bluestone Loan. This was described as the Shareholders' Agreement.

The following month, on 10 September 2014, Minardi, Unicorn and Mr Barton entered into an agreement to amend the assignment by Minardi of its rights in relation to the Bluestone Loan to Unicorn and, as part of this agreement, widened the scope of a certain indemnity that Unicorn had given to Mr Barton, in order to encompass the full extent of the Grenda loan facilities.

I have mentioned that these proceedings were commenced in August 2014. Subsequently, in the ordinary way, a Defence came to be served by Mr Barton, with Stewarts Law acting for him at that stage. This document was served on 8 October 2014 and was followed by a request by Grenda for further information, which was made on 25 November 2014. A response came from Mr Barton's side on 22 December 2014. I shall come back to that response a little later. Subsequently, in May 2015, the Orb claimants and Mr Ruhan were in negotiation in relation to the Orb Litigation. As part of those negotiations, Mr Ruhan borrowed from Minardi, now in the control of the Orb claimants, £2.5 million. The negotiations broke down and, on 30 October 2015, Mr Ruhan received a statutory demand from Minardi. At about the same time, Minardi challenged the existence of its loan agreement with Mr Barton, so causing Mr Barton to revisit his position concerning Mr Ruhan and ultimately, following negotiations, to agree once again to switch sides in the context of the Orb Litigation. It was this decision which gave rise to an agreement dated 17 November 2015 and described as the Minardi Debt Assignment, by which Mr Barton assigned to Mr Ruhan the debt owned to him by Minardi, together with the rights that accrued to him under the Shareholders' Agreement in respect of the 2008 Unicorn Loan and the Bluestone Loan.

The agreement provided for the proceeds of the debt to be paid: first, towards the cost of claiming against Minardi; secondly, £2.5 million to be paid to Mr Ruhan to give him a set-off defence in respect of Minardi's claim against him; thirdly, £2.5 million to be paid to an associate of Mr Barton, namely Ulrich Pelz; fourthly, further sums totalling up to £10 million to be divided equally between Mr Pelz and Mr Barton; and, finally, any sums above that to be divided equally between Mr Barton, Mr Pelz and Mr Ruhan.

It is Mr Barton's case that, as part of the assignment deal, Mr Ruhan promised that the present proceedings would not be pursued against him and that Mr Ruhan agreed to enter into a side letter dealing with this, albeit that ultimately no such side letter transpired. Mr Barton nonetheless accepts that the Court is in no position at this hearing to determine whether such an agreement was, indeed, entered into. Mr Hext does not, therefore, rely on that alleged agreement in support of his strike-out application, which he instead puts exclusively on the basis of an abuse of process said to consist of Grenda and Mr Ruhan having apparently decided not to pursue Mr Barton because Mr Barton's co-operation was required in relation to Mr Ruhan's conduct of the Orb Litigation. Mr Hext does, however, pray in aid the alleged non-pursuit agreement as a substantive defence to Grenda's claim under the Facilities alongside and in addition to the defence arising out of the alleged agreement regarding set-off said to have been concluded in Zurich in early February 2014.

Turning then to the strike-out application, and picking up on the point concerning co-operation, Mr Hext highlights how, in the period from December 2015, when the further information was provided by Mr Barton pursuant to Grenda's request, until October 2016, when Richard Slade & Co came on the record in place of Stewarts Law, for Grenda, nothing was done by Grenda to pursue the present proceedings against Mr Barton. He submits that this was the result of a deliberate decision on the part of Mr Ruhan and Grenda not to pursue the claim at a time when Mr Barton's assistance was required by Mr Ruhan in relation to the Orb Litigation as I have already mentioned. In this regard, Mr Hext highlights how Mr Ruhan applied for summary judgment against Mr Minardi in early 2016, in proceedings which ultimately came to be joined to the wider Orb Litigation, namely Ruhan v Minardi, and in doing so Mr Ruhan relied on a witness statement which was provided by Mr Barton. Although that application was not ultimately pursued, Mr Hext relies on this as an illustration of Mr Barton's utility to Mr Ruhan in the other litigation. Those proceedings, as I have indicated, between Mr Ruhan and Minardi were ordered in March 2016 to be tried at the same time as the Orb Litigation.

In relation to that litigation, I have already referred to the judgment which was handed down by Popplewell J in April 2016. That judgment was resoundingly in Mr Ruhan's favour and resulted in the triggering of a settlement of the Orb Litigation very shortly afterwards. It was only after that litigation had settled, albeit that the Ruhan v Minardi proceedings continue, that Grenda sought to revive the present proceedings with, as I say, the instruction of Richard Slade & Co as its new solicitors. Mr Hext submits, as I have previously mentioned, that this is because Mr Barton's co-operation was no longer required at that stage, the Orb Litigation having come to an end. This, he submits, represents an abuse of process and ought not to be permitted. He relies for these purposes on certain provisions of the CPR, namely, in the first place, CPR 3.4(2), which states that:

In further support of his application (as I say, an application which is based not on the alleged agreement entered into in November 2015 not to pursue the Grenda proceedings against Mr Barton, but on the delay which ensued from November or December 2015 until the autumn of 2016), Mr Hext cites Grovit v Doctor [1997] 1 WLR, 640 and, specifically, a passage in the judgment of Lord Woolf at page 647G to 648A, as follows:

“The courts exist to enable parties to have their disputes resolved. To commence and to continue litigation which you have no intention to bring to conclusion can amount to an abuse of process. Where this is the situation the party against whom the proceedings is brought is entitled to apply to have the action struck out and if justice so requires (which will frequently be the case) the courts will dismiss the action. The evidence which was relied upon to establish the abuse of process may be the plaintiff's inactivity. The same evidence will then no doubt be capable of supporting an application to dismiss for want of prosecution. However, if there is an abuse of process, it is not strictly necessary to establish want of prosecution under either of the limbs identified by Lord Diplock in Birkett v. James [1978] A.C. 297. In this case once the conclusion was reached that the reason for the delay was one which involved abusing the process of the court in maintaining proceedings when there was no intention of carrying the case to trial the court was entitled to dismiss the proceedings.”

Mr Hext also in oral argument took me to an authority which Mr Lord cited in his skeleton argument, namely The Auk [2013] EWHC 4076 (Adm), in which Hamblen J (as he then was), having referred to Grovit v Doctor, then referred to a previous decision of Lord Woolf in Arbuthnot Latham Bank v Trafalgar Holdings [1988] 1 WLR 1426 at page 1437, where Lord Woolf said as follows:

"Whereas hitherto it may have been arguable that for a party on its own initiative to in effect 'warehouse' proceedings until it is convenient to pursue them does not constitute an abuse of process, when hereafter this happens this will no longer be the practice. It leads to stale proceedings which bring the litigation process into disrespect. As case flow management is introduced, it will involve the courts becoming involved in order to find out why the action is not being progressed. If the Claimant has for the time being no intention to pursue the action this will be a wasted effort. Finding out the reasons for the lack of activity in proceedings will unnecessarily take up the time of the court. If, subject to any directions of the court, proceedings are not intended to be pursued in accordance with the rules they should not be brought. If they are brought and they are not to be advanced, consideration should be given to their discontinuance or authority of the court obtained for their being adjourned generally. The courts exist to assist parties to resolve disputes and they should not be used by litigants for other purposes."

The Auk was a case, unlike Grovit v Doctor, which did not involve a defamation claim, and so Mr Hext observes, correctly, as I see it, the principles concerning abuse of process, which I have to consider are not confined to the defamation context, but are of more general application.

It is Mr Hext's submission that in the present case there was a significant period of delay and that that period of delay is explicable (as he would suggest, only explicable) from at the latest November 2015 onwards as a result of a deliberate decision on part of Grenda not to proceed with litigation in order not to discourage Mr Barton from providing the assistance that was required from him in relation to the Orb Litigation. During that period, Mr Hext submits, Grenda did not have an intention to bring the proceedings to a conclusion and, accordingly, an abuse has been committed by Grenda. Mr Hext observes that it does not assist Grenda that subsequently, once Mr Barton's help was no longer needed, the Orb Litigation having settled, Grenda changed its position and sought to revive the proceedings.

This, as I say, is Mr Hext's essential submission. I am not persuaded, however, that it would be appropriate to strike out the proceedings on the basis suggested by Mr Hext. I have reached this conclusion for various reasons, which I propose to state as shortly as I can.

First, this is not a strike-out application which is put on the basis of any express agreement of the sort said to have been concluded in November 2015 between Mr Ruhan and Mr Barton. As I have indicated, Mr Hext accepts that it is not realistically open to him to submit that the Court can be satisfied for strike-out purposes that the agreement alleged to have been made in November 2015 was, in fact, made. The Court is instead being invited to draw the inference that Mr Ruhan (and, accordingly Grenda) made a decision not to pursue the proceedings in order to retain Mr Barton's co-operation. The difficulty with this is that Mr Ruhan's (and Grenda's) conduct in not progressing the proceedings between late 2015 and October 2016 is as consistent with a decision to suspend proceedings as it is with deciding not to pursue the proceedings forever and a day. It is clear to me that the parties to the Orb Litigation are not averse to adopting tactical positions which can change as circumstances alter.

Secondly, I do not consider that this is a case where what has happened is the type of warehousing of proceedings described by Lord Woolf in the Arbuthnot Latham case. Mr Slade in his witness statement has described how Mr Ruhan was heavily involved in the Orb Litigation in the relevant period. That plainly was the position. It seems to me that, in the circumstances, it is not altogether surprising that the present proceedings were not his main priority. In those circumstances, I struggle to see that what has happened in relation to the present proceedings amounts to any type of warehousing. Indeed, Mr Lord took me to a passage in Mr Barton's second witness statement, paragraph 37, in which Mr Barton himself describes without prejudice discussions, admittedly postdating the settlement of the Orb Litigation taking place in May 2016, in the following terms:

As for Mr Hext's point that this is a discussion which took place after several months of inactivity, I recognise that this point has a degree of force. It does not, however, explain why it took the best part of another year before Mr Barton decided to apply to strike out the proceedings on the basis of abuse of process.

I am clear from this evidence is that this is not a case where there has been warehousing of the sort described. In short, I am not satisfied in the present case that there has been significant delay, which can only be explained by a clear intention, supported by evidence, not to pursue the proceedings against Mr Barton and, accordingly, that Grenda’s inactivity is capable of amounting to an abuse of process. I am not able, in the circumstances, to draw the inference that the inactivity was consistent, and only consistent, with a decision not to pursue the Grenda proceedings.

I observe in this context that, whilst I appreciate that the jurisdiction is not confined to defamation-type cases, nonetheless the authorities in which the jurisdiction has been excised have typically, but not exclusively, been in that context. Nor is this a case where some limitation point arises. I did not understand Mr Lord to suggest that the jurisdiction is confined to cases where there is a limitation point, as arguably at least was the position in relation to previous applications for dismissal for want of prosecution, but nonetheless it seems to me that it represents something of a stretch for it realistically to be submitted by Mr Hext on Mr Barton's behalf that here there has been an abuse of process.

To repeat, I do not conclude, in short, that the only appropriate inference to draw from the inactivity is that Grenda and Mr Ruhan took the decision not to pursue the proceedings against Mr Barton. It follows that this is not a case which is in abuse of process territory.

Mr Lord, during the course of his oral submissions, referred to a decision cited by Mr Hext, namely Sheldon Gary Adleson and another v Debbie Anderson and another [2011] EWHC 2797, a defamation case, in which Tugendhat J referred at paragraph 20 to a passage in the judgment of the Court of Appeal in Grovit v Doctor, in which Glidewell LJ stated at follows at page 15:

Again, drawing together the threads in the present context, I am unable to conclude that the present case is in that type of territory. On the contrary, Mr Slade's evidence, which I have already described, is that the reason for the inactivity, which undoubtedly occurred in the present case, is Mr Ruhan's preoccupation with the other wider Orb Litigation.

Thirdly, since ultimately this is a matter of discretion, I can hardly lose sight of the fact that it has not been suggested that Mr Barton has suffered prejudice by the period when Grenda did nothing to progress the proceedings. Clearly, there is prejudice if the strike-out application were to fail, but that is prejudice which exists in any strike-out application and so I take no account of that. Other than this, there is (and there has been) no suggested prejudice.

Fourthly, although Mr Lord puts the point as a waiver argument, it is accepted by both Mr Lord and Mr Hext that really the question is not a matter of waiver, but a point that goes to my general discretion in the present context. I can hardly lose sight either of the fact that Mr Barton did not raise any point concerning the delay until April this year, when JMW, his present solicitors, first raised the point. This was almost a year after the without prejudice discussions described in paragraph 37 of Mr Barton's witness statement, to which I have referred, and some seven months or so after Grenda had sought to revive the proceedings. JMW, Mr Barton's new solicitors, engaged in the proceedings, issuing an application for security for costs, for example, before only belatedly raising the point in a letter to Richard Slade & Co in April this year.

I do not suggest, at all, that JMW are at fault in this regard. JMW explained in correspondence with Richard Slade & Co, dating from last autumn, and into the new year, that they were somewhat hamstrung by not having access to case documentation and that point is understood. Mr Hext, indeed, sought to meet Mr Lord's argument by observing that it took JMW some considerable time to obtain documents from Stewarts Law. The difficulty with this submission, however, at least as I see it, is that it must have been obvious to Mr Barton and so to his new solicitors, JMW, that nothing had happened in the proceedings since late 2015. Indeed, in certain of the correspondence this very point was made and understandably so, by JMW. The point now raised concerning that delay is a point which could have been raised without sight of any underlying documentation at a much earlier stage. I leave out of account here the point about the alleged agreement not to pursue said to have been entered into in November 2015 and focus instead exclusively on the invitation which Mr Hext makes on behalf of Mr Barton to infer that a deliberate decision was made by Ruhan and Grenda not to pursue the present proceedings. Mr Barton himself must have been in a position to draw the inference which the Court is now invited to draw and to inform JMW accordingly. It would appear, however, that he did no such thing. It is, therefore, not a question, as I say, of fault being attributed to JMW; it is simply a feature of the fact that it took a long time for the present application to be made.

In my view, there was no need to have sight of documents in Stewarts Law's position to enable the present application to be made, or at least for the point to be raised in correspondence and a reservation of rights entered. Instead of this, nothing was said on Mr Barton's behalf, after JMW came to be instructed and no reservation of rights was entered. The fact that no mention was made of the alleged agreement not to pursue in November 2015 lends further support, in my assessment, to the conclusion that Mr Barton did not consider until somewhat late in the day that Mr Ruhan and Grenda had decided not to pursue the proceedings as against him. If he had done so, then, as I have observed, he would have been bound to have pointed that out in the discussion he had with Mr Ruhan in May 2016. He would have been bound to have also raised the point with JMW and they would have been bound to have raised the point with Richard Slade & Co. Instead of that, nothing was said when Richard Slade & Co sought to kick-start the proceedings and, on the contrary, although the CMC seems to have been unilaterally fixed, applications (including for security for costs) were made by or on behalf of Mr Barton.

For these reasons, I do not consider that it is appropriate to strike out the proceedings. I do so without formally needing to address Mr Lord's formal waiver argument, if indeed it is a waiver argument at all. For the reasons I have just indicated, I have taken into account the facts which go to that waiver argument and Mr Hext's response in the exercise of my discretion and I am clear that exercising that discretion it is inappropriate to strike out the proceedings. I need not, in the circumstances, take up time making an assessment as to the extent to which Mr Barton took part in the proceedings and, therefore, the submissions which Mr Hext makes to me based on the decision of the House of Lords in the dismissal for want of prosecution context in Roebuck v Mungovin [1994] 2 AC 224. In my assessment, the present case is simply not in that territory.

I come on now to address Grenda's summary judgment application. Three points arise here: the first relates to the set-off agreement, which Mr Barton suggests was entered into in February 2014; secondly, there is the non-pursuit agreement which I have previously mentioned, said by Mr Barton to have been entered into with Mr Ruhan in November 2015; and thirdly, various points are taken in relation to the amount which, if there is any liability under the Facilities, is due under them.

It is convenient to deal with the second of these matters first, given that I have already touched on it. Before I do so, I should, relatively briefly, say something about the applicable principles, albeit that they were, as between Mr Hext and Mr Lord, essentially common ground.

Under CPR 24.2, the Court may give summary judgment against a claimant or a defendant on the whole of a claim or on a particular issue if it considers that, in the case of a defendant, the defendant has no real prospect of successfully defending the claim or issue. In that context, the notes to the White Book to which I was taken by Mr Hext at the outset of his submissions, state at 24.2.3 under the heading "no real prospect of succeeding/successfully defending" as follows:

Then in the notes at 24.2.5 headed "Burdens of proof", Mr Hext reminds me that the following is stated:

Lastly, Mr Hext took me to the notes at 24.6.6 under "A conditional order", where the following is stated in the first paragraph:

Mr Lord, for his part, since (as I say) no issue is taken as to the relevant principles, took me by way of illustration to a decision of Flaux J (as he then was), namely Franklin Management Srl v Central Eastern European Real Estate Shareholdings BV [2014] EWHC 4127 (QB). In that case, there was an allegation of oral agreement which was contradicted, perhaps flatly contradicted, by a subsequent memorandum of understanding which was entered into, granting summary judgment, in favour of the party denying the existence of the alleged oral agreement, Flaux J said this at paragraph 27:

Mr Lord suggests that I should view the evidence concerning the alleged set-off agreement with the same critical approach, which Flaux J adopted in the Franklin case, applying a heavy dose of commonsense and reality. Against that, Mr Hext's submission is that the Franklin case was somewhat more straightforward, involving a simpler factual context, than the present case and a case where the memorandum of understanding quite plainly could not stand squarely with what was alleged to have been agreed orally. In the present case, Mr Hext suggests that the context is rather more complicated and, although this is a matter to which I shall come on later, the terms of the three Facilities rather less dogmatic (or at least sufficiently arguably so) on the relevant question of set-off.

Lastly, in this context, Mr Hext took me to a decision of Lewison J (as he then was), namely Fattal v Walbrook Trustees (Jersey) Ltd [2010] EWHC 2767 (Ch), specifically to a very helpful summary of the relevant principles applicable to summary judgment applications contained in paragraph 65 of the judgment. Mr Hext highlighted three of those principles, as follows:

“v)

However, in reaching its conclusion the court must take into account not only the evidence actually placed before it on the application for summary judgment, but also the evidence that can reasonably be expected to be available at trial: Royal Brompton Hospital NHS Trust v Hammond (No 5) [2001] EWCA Civ 550;

vi)

Although a case may turn out at trial not to be really complicated, it does not follow that it should be decided without the fuller investigation into the facts at trial than is possible or permissible on summary judgment. Thus the court should hesitate about making a final decision without a trial, even where there is no obvious conflict of fact at the time of the application, where reasonable grounds exist for believing that a fuller investigation into the facts of the case would add to or alter the evidence available to a trial judge and so affect the outcome of the case: Doncaster Pharmaceuticals Group Ltd v Bolton Pharmaceutical Co 100 Ltd [2007] FSR 63;

vii)

On the other hand it is not uncommon for an application under Part 24 to give rise to a short point of law or construction and, if the court is satisfied that it has before it all the evidence necessary for the proper determination of the question and that the parties have had an adequate opportunity to address it in argument, it should grasp the nettle and decide it. The reason is quite simple: if the respondent's case is bad in law, he will in truth have no real prospect of succeeding on his claim or successfully defending the claim against him, as the case may be. Similarly, if the applicant's case is bad in law, the sooner that is determined, the better. If it is possible to show by evidence that although material in the form of documents or oral evidence that would put the documents in another light is not currently before the court, such material is likely to exist and can be expected to be available at trial, it would be wrong to give summary judgment because there would be a real, as opposed to a fanciful, prospect of success. However, it is not enough simply to argue that the case should be allowed to go to trial because something may turn up which would have a bearing on the question of construction: ICI Chemicals & Polymers Ltd v TTE Training Ltd [2007] EWCA Civ 725.”

Mr Hext takes me to those passages for two essential reasons. First, because, as I shall come on to explain, he highlights how Mr Barton's evidence as to the alleged agreement made in Zurich in early February 2014 has not been contradicted by evidence from Mr Ruhan, who has apparently not been asked about what Mr Barton has alleged or, if he has been asked, has not chosen to put in evidence or has not been asked to put in evidence on the point. Secondly, because whilst disavowing what might be described as a Micawberish approach, Mr Hext suggests that there is likely to be a large amount of documentation, particularly of an email variety, which would be available at trial, but which is not available to me on this summary judgment application. In that particular context, Mr Hext points out that Mr Barton no longer has access to one of his email accounts, albeit Mr Lord was able to demonstrate by reference to a number of email exchanges that Mr Barton in fact used a different account in dealing with a number of parties.

So much for the principles, which I obviously bear very much in mind when considering this summary judgment application. I come on now to deal with the four points which I have identified as arising in relation to the summary judgment application.

Mr Lord submits that, whilst it is all very well that Mr Hext should concede for the purposes of his strike-out application that it is not open to the Court at this stage to make a determination as to whether an agreement was reached in November 2015 between Mr Ruhan and Mr Barton of the type alleged by Mr Barton, namely that Grenda would not pursue the proceedings against Mr Barton, there is nothing to stop the Court from reaching the conclusion that the allegation has no realistic prospects of success for the purposes of Grenda's summary judgment application. Mr Lord is clearly right about that as a matter of principle. I need, therefore, to consider the position in a little detail.

Mr Hext realistically acknowledges that his submissions in this context are not assisted by the fact that, as previously observed, the allegation concerning a non-pursuit agreement was only raised after Grenda had made its summary judgment application. He submits nonetheless that the evidence from Mr Barton, as now contained in his witness statement on this application, is compelling and credible. He points out, as I have just stated, that there is no direct evidence from Mr Ruhan contradicting Mr Barton's evidence concerning the alleged agreement. Although it is right to say that Mr Slade refers to having been told by Mr Ruhan, and indeed by Mr Stevens, that no such agreement was entered into. In my view, this is a somewhat ambitious submission in relation to a summary judgment application. The fact that it took so long for the point to be raised by Mr Barton leads me to doubt that what he now alleges was actually agreed.

Leaving this point to one side, however, I harbour real doubt over what is alleged. Mr Hext submits that, not only is there no direct evidence from Mr Ruhan or Mr Stevens on the point, but moreover there is support for the case that a non-pursuit agreement was reached in November 2015 in the form of an email from Mr Ruhan, which was sent on 6 December 2015. In that email, which was sent by Mr Ruhan both to Mr Barton and in copy form to Mr Pelz, and which was entitled "the side letter from AES we discussed" (AES being a reference to Mr Stevens), it was stated as follows:

Although I recognise that the reference to a side letter in this email is consistent with what is alleged by Mr Barton in the sense that there is a reference to a side letter and Mr Barton says that this was going to deal with the agreement which he alleges was made, it seems to me nonetheless that this email provides only very limited assistance to me in evaluating whether the agreement alleged was reached. This is because there is nothing in the email to indicate what the side letter would deal with. I am left in the position where I remain doubtful about what is alleged. I have mentioned the oddity that it should take so long for Mr Barton to raise the point in circumstances where, if there had been an agreement entered into, it would have made obvious sense for it to have been mentioned earlier, not least in the discussion which took place in May 2016 described in Mr Barton's other witness statement at paragraph 37, as mentioned earlier. Secondly, the agreement is only very scantily particularised even now. No details are given, nor did Mr Pelz say anything about it in his witness statement albeit, recognising that that witness statement was dealing with a different issue altogether and was not prepared in relation to the strike-out application. Mr Pelz nonetheless, if he were in the position to provide supportive corroborative evidence, could no doubt have been called upon to do so. The fact that there is no such evidence from him is instructive. Nor, thirdly, is there any other mention of such an agreement having been entered into in any of the documentation - besides the single reference, as I say, to the side letter in the email to which I have just referred.

In short, if this had been the only point raised by way of defence to Grenda's claims under the three Facilities and so raised in response to the summary judgment application, I would have considered that there was insufficient merit in the defence to allow Mr Barton to resist Grenda's summary judgment application. I would, at a minimum, have considered that Mr Barton should, as a condition of being permitted to defend the proceedings, pay into Court the amounts claimed, subject perhaps to any points on quantum, a matter to which I shall return. In the circumstances, however, I need say no more about this aspect given the conclusion which I have reached in relation to the set-off agreement defence.

I address now the first of the defences raised concerning the agreement alleged to have been made in Zurich on 6 February 2014 over dinner. Mr Lord makes the following central submissions in relation to this: first, he contends that the evidence supporting the agreement is weak so as to mean that the Court can be satisfied at this juncture that there is no realistic prospect of Mr Barton succeeding in his case that the agreement alleged was entered into; secondly, Mr Lord submits that, if there was any such agreement, it was an agreement which was what might be described as ‘subject to contract’ and, since no written agreement was entered into, so the agreement (if there ever was one, which Mr Lord would not accept) was ineffective - the ‘subject to contract’ for present purposes being the entry into a written agreement; thirdly, Mr Lord submits that, if there was an agreement and if it was not ‘subject to contract’, nonetheless it is not an agreement which can be relied upon by Mr Barton, because the effect of clauses 8.3, 8.3.4 and 11.1 of the various Facilities is that any such agreement would have been unenforceable in the case of clauses 8.3 and 8.3.4, because these are provisions which flatly contradict and prohibit Mr Barton having any right of set-off and in the case of clause 11.1, even if there was an agreement, since it was not in writing, it is to no effect; fourthly and lastly, Mr Lord submits that, even if there was an agreement as alleged and even if it was not ‘subject to contract’ and even if clauses 8.3, 8.3.4 and 11.1 did not represent the obstacles which he suggests they do, it was an agreement which merely entitled Mr Barton to choose to exercise an option to set-off the Bluestone Loan against his liability under the three Facilities and, since no such election was made until the draft Amended Defence, which came after the assignment of the Bluestone Loan, which as a result is now essentially owned by Unicorn, so the option is of no consequence.

As I shall now explain, I am not persuaded by any of these submissions. I begin with the first of Mr Lord's submissions and so the suggestion that the evidence simply does not support Mr Barton's case that the agreement alleged was entered into. Mr Lord makes the point strongly that, if there was the agreement which is alleged, then, it is surprising that Mr Barton should have entered into agreements (the Facilities) containing clauses 8.3 and 8.3.4. I deal with each of these points in turn.

The suggestion that there is insufficient evidence to support the allegation that the agreement was made

Mr Lord makes a number of points concerning what has been alleged concerning the making of the relevant agreement. He highlights, in particular, how, since the allegation of an agreement was first made in somewhat general terms on 30 June 2014 in a letter from Mr Barton's then solicitors, Stephenson Harwood, very little particularisation has been given and, more than that, an apparently inconsistent set of allegations made. Mr Lord points, in this context, to the Defence which was first served in October 2014 and observes with some legitimacy that it is unclear from the document whether what was being alleged at that time was a single agreement or more than one agreement. He then highlights how, when particulars were sought by Grenda in their Request for Further Information relating to the Defence, the response was unilluminating and contradicted by Mr Barton's later evidence in response to the present summary judgment application in that, whilst the response to the Request for Further Information stated that the agreement was made at an address at 55 Baker Street in London, in his witness evidence for the purposes of the present application Mr Barton states that the agreement was made, not at that address or even in this city, but instead over dinner in Zurich, a different city in a different country, on 6 February 2014. Mr Lord then refers to the draft Amended Defence, which has only very recently been produced, and makes the point that even in that document the position is obscure.

Although it is understandable why Mr Lord makes these submissions about a want of particularisation and the inconsistency to which I have referred, and they are no doubt legitimate points to be explored in cross-examination, I nonetheless agree with Mr Hext that, in circumstances where there is no evidence at all from Mr Ruhan giving his version of events or even just denying Mr Barton's version of events, in the same way as Mr Ruhan and indeed Mr Stevens have done in relation to the suggestion that a non-pursuit agreement was entered into in November 2015, Grenda's position and Mr Lord's submissions are not as strong as they might otherwise have been. As Mr Hext points out, it is not even said by Mr Slade in his various witness statements that he has spoken to Mr Ruhan and he denies what Mr Barton has alleged was agreed in February 2014. This is despite the case, as I have just observed, that Mr Slade has stated in relation to the non-pursuit agreement said to have been entered into November 2015 that Mr Ruhan and Mr Stevens have told him that there is no substance in that allegation. I agree with Mr Hext that this lack of evidence from Mr Ruhan gives rise to an inference, or at least arguably gives rise to an inference since ultimately the matter will have to be addressed at trial, that Mr Ruhan would be unable to support Grenda's case that no such agreement was reached. In these circumstances and since, as I shall come on to explain, I have reached the conclusion that what Mr Barton has to say concerning the alleged agreement cannot simply be dismissed in the manner which Mr Lord suggests, I consider that it would not be appropriate to conclude that Mr Barton's case that such an agreement was reached has no realistic prospect of success on this point at least.

Mr Barton's evidence in his witness statement dated 14 June 2017 is explicit. He states in paragraphs 81 to 85, as follows:

As I say, there is nothing from Mr Ruhan to contradict this evidence. Mr Lord submits that this is nothing to the point since this evidence from Mr Barton itself is deficient and insufficient to support the case which is advanced in response to summary judgment application. Mr Lord submits that, even taking Mr Barton's evidence in these passages at face value, it is not evidence which supports the case now sought to be advanced on his behalf. He makes a number of points in this respect. These include the fact that in paragraph 81 of Mr Barton's witness statement there is no reference to a set-off agreement as such. As Mr Hext points out, however, the reference to Mr Ruhan explaining that it would be better for him if the Biomass Facility could remain "on the books" and to the interest rate being reduced is evidence which is consistent with what Mr Barton now alleges. Furthermore, again as Mr Hext points out, these passages need to be read against the backdrop of earlier passages in the same witness statement, for example at paragraph 75, where Mr Barton, when dealing with an earlier conversation during a visit by Mr Ruhan to him in Mallorca says:

Mr Lord makes other submissions concerning what Mr Barton has to say. These are all points which, in my view, however, do not warrant the grant of summary judgment. They are, in a true sense, cross-examination points which might ultimately prevail; they are not matters which, particularly in the absence of any evidence from Mr Ruhan at all, lead me to conclude that the allegation of an agreement is so lacking in evidential merit as to mean that there should be summary judgment in Grenda's favour. I include in this category Mr Lord's submission that the absence of any written agreement means that the agreement cannot have been concluded. It is apparent that Mr Ruhan and Mr Barton had a long relationship and it appears that their dealings were not always documented. Mr Hext, indeed, refers me to an instance which came to light in the context of the Orb Litigation and which entailed Mr Ruhan asserting an entitlement to a considerable asset, notwithstanding the complete absence of any documentation supporting such an entitlement.

I do not consider, therefore, that the lack of documentation is, in and of itself, a reason to conclude that no agreement was reached. I return to this matter briefly in a moment when dealing with the ‘subject to contract’ submission which Mr Lord also makes. I need first, however, to deal with a particular point concerning an email sent by Mr Barton to Mr Stevens on 9 April 2014. In that email, which Mr Barton says he does not recall himself having drafted, Mr Barton stated, inter alia, as follows (the wording and layout are somewhat clumsy in places):

Nor, I should add, in this context am I greatly assisted by the email which may or may not have been a response to Mr Barton's email on 9 April 2014, namely the email sent by Mr Stevens to Mr Barton headed "our discussion re loans" on 6 May 2014. Quite how that email fits into the story is again a matter which would seem to me appropriate to be explored at trial. Nor, I should add, am I persuaded by Mr Lord's reliance on other later events, including the obtaining of indemnity from others in respect of liabilities under the facilities, and negotiations with Mr Stevens of which the 6 May 2014 email is an example, or for that matter, after Mr Barton had assigned the benefit of the Minardi/Bluestone Loan to Unicorn on 5 May 2014. Again, these are cross-examination points rather than reasons why summary judgment should be granted. Mr Lord submits that the various matters which he raises and which I am here referring to, albeit in fairly general terms, are wholly inconsistent with an agreement on set-off of the sort which Mr Barton now suggests was entered into. Additionally, he suggests that the seeking of indemnities must have amounted to more than the belt and braces approach which Mr Hext suggests Mr Barton was engaged in. Again, Mr Lord might ultimately prove to be right about this, but I do not consider that I could be sufficiently confident for present purposes about the matter in order to award summary judgment.

All in all, I am unable to conclude that Mr Barton's evidence on the alleged agreement reached on 6 February 2014 in Zurich is evidence which should be rejected at this summary stage, particularly (but not exclusively since I have had close regard to the evidence which Mr Barton himself has put forward) without evidence from Mr Ruhan and, indeed, without disclosure being forthcoming on the issue. It is significant that, in dealing with the circumstances in which Mr Barton came on 10 February 2014 to make the advances which he was being pressed by Mr Walmsley to make over the weekend of 8 and 9 February 2014, Mr Barton explains in his witness statement as follows at paragraphs 104 to 111:

Mr Barton goes on at paragraph 113 to state as follows:

I make it clear that I have had very much in mind Mr Lord’s point that the Court needs to consider the evidence which Mr Barton has deployed on this summary judgment application. I have exercised the type of scrutiny which is appropriate on such an application, reaching the conclusion which I have just described. In referring to the absence of responsive evidence from Mr Ruhan, I have not lost sight of the fact that it is necessary to evaluate Mr Barton’s evidence and not merely to adopt an approach which sees the Court accept a defendant’s evidence without question simply on the basis that that evidence has not been contradicted by the claimant. To adopt a different approach would risk requiring too much of a claimant. I am satisfied, in short, that Mr Barton’s evidence concerning the making of the alleged agreement is evidence which enables me to conclude that the defence based on Mr Barton and Mr Ruhan having reached such an agreement has realistic prospects of success.

The ‘subject to contract’ point

This last point brings me to Mr Lord's second submission, namely that, even if there was an agreement, it was only an agreement which was made ‘subject to contract’ - which is to say subject to the parties entering into a written agreement. In the light of Mr Barton's evidence as just quoted, evidence which, I repeat, is not contradicted by evidence given by Mr Ruhan, I am in no position, as I see it, to conclude on this summary judgment application that Mr Lord's case on this point is so strong as to mean that summary judgment should be awarded. In this respect, Mr Hext referred me to RTS Flexible Systems Ltd v Molkerei Alois Müller Gmbh & Company KG [2010] 1 WLR 753, in which Lord Clarke stated as follows at paragraph 45 when discussing the relevant principles:

Although Mr Lord seeks to contrast the present case, with the facts in the RTS case, highlighting in particular that it is difficult to see how in the present case the alleged oral agreement concluded in Zurich on 6 February 2014 can be said to have been partly performed, I agree with Mr Hext that this is a matter which can hardly be regarded as clear-cut and, in those circumstances, it seems to me that it is appropriate that the matter is explored properly at trial, when all the evidence is available, including the substantial disclosure which it is anticipated will be given by both sides. That disclosure, as Mr Hext points out, may well entail exchanges between clients and lawyers which will be the subject of privilege or might be the subject of privilege (subject to any decision to waive that privilege), but it is also likely to include exchanges between non-lawyers (specifically Mr Ruhan, of course), and it seems to me, in the circumstances, that this is a case which falls into the category identified by Lewison J in the Fattal case when setting out principle (vii). On the evidence given by Mr Barton in his witness statement at least, again evidence which is not contradicted, the agreement reached in Zurich over dinner on 6 February 2014 was then followed by a discussion between him and Mr Ruhan on 10 February 2014 at a time when Mr Ruhan was increasingly keen to have the advances made to him, and it was in this context that the parties agreed to lift any ‘subject to contract’ requirement which might previously have been agreed (assuming that the agreement was ‘subject to contact’ at all). In those circumstances, it seems to me that this is not a knockout point for Mr Lord's purposes on this summary judgment application. I do not accept that Mr Lord is right when he submits that it is only if there is partial performance that an agreement can cease to be ‘subject to contract’. As Lord Clarke explained in the passage to which I have referred, whether “there is a binding contract between parties and if so upon what terms depends upon what they have agreed” taking into account “what was communicated between them by words or conduct and whether that leads objectively to a conclusion that they intended to create legal relations and had agreed upon all the terms which they regarded or the law requires as essential for the formation of legally binding relations”. I am satisfied, based on the evidence which is before me at this hearing in the form of Mr Barton’s witness statement, that the case that by 10 February 2014 at least any requirement that there be an agreement in writing had ceased to operate as a pre-condition to the agreement concluded 4 days previously over dinner in Zurich – even assuming in Grenda’s favour that this had, indeed, been a pre-condition which, despite the apparent thinking that there would be a side letter entered into, I consider is itself not entirely clear.

The point concerning inconsistency with the terms of the Facilities

I come on next to deal with Mr Lord's submission that the alleged oral agreement is inconsistent with the provisions of the three Facilities, specifically the Silmag and Norwegian facilities which were entered into shortly after the agreement is alleged by Mr Barton to have been made. Mr Lord here relies upon clauses 8.3, 8.3.4 and 11.1 of the Facilities. I agree with Mr Hext, however, that the position may not be as clear-cut as Mr Lord would have it.

First, this submission does not apply to the Biomass Facility entered into the year before. As to that, Mr Lord makes a different submission, which is that, since the agreement alleged to have been entered into in early February 2014 is not in writing, it is of no consequence given the terms of clause 13.1. That submission is, however, not necessarily right in view of recent Court of Appeal authority, specifically MWB Business Exchange Centres Ltd v Rock Advertising Ltd [2016] EWCA Civ 553, in which the Court of Appeal followed the approach adopted in, among other cases, Globe Motors Inc v TRW Lucas Verity Electric Steering Limited [2016] CLR 59. Mr Lord suggests that this is not an MWB-type case because there has been no part performance of the oral agreement alleged by Mr Barton. I see some force in that submission. However, especially bearing in mind what appears to have been a somewhat relaxed approach to Mr Barton’s and Mr Ruhan’s dealings (and their companies’ dealings) with each other, I consider that, in the circumstances, it would be inappropriate in the present case to approach matters in too formalistic a way. Nor, for the same reason, am I persuaded that it is critical that there should be partial performance. I acknowledge that, in a case where there has been partial performance, variation can be established. I am doubtful, however, that it is only in such cases that parties should be treated as having entered into a variation which includes a variation of a non-variation provision such as clause 13.1. I am not clear that either the MWB case or the Globe Motors case is authority for the proposition that there can only be a variation where there is partial performance.

All in all, I do not consider that it can be said that the point is so weak as to justify summary judgment and I decline to approach the matter on that basis. Again, it seems to me that the position described by Mr Barton is sufficiently concrete and, in circumstances where there is no contradictory evidence, I would be adopting too bold an approach to accede to Mr Lord's submission on this point (on a summary judgment application).

Secondly, focusing on Mr Lord's reliance on clauses 8.3, 8.3.4 and 11.1 in relation to the Silmag Facility and the Norwegian Facility, there is an argument that the provisions do not preclude a right of set-off given that clause 11.1 appears to contemplate, albeit at the Lender's option, sums being set-off. To that extent there may, and Mr Hext suggests that there is, something of an inconsistency between the two provisions, namely clauses 8.3 and 8.3.4, on the one hand, and clause 11.1, on the other. Mr Lord is dismissive of this suggested inconsistency and I have some sympathy with him on this. In any event, Mr Lord’s submission overlooks the fact that, as Mr Hext reminds me, although the agreement alleged has been described by both counsel before me in shorthand terms as a set-off agreement, in fact Mr Barton's evidence is that it had two aspects to it: firstly, a right of set-off; and secondly, an agreement that Mr Barton would not be required to repay the loans whilst they still exceeded the amount of the Bluestone Loan. I appreciate that the latter entails something of a conflict with the repayment terms and specifically the dates set out in the two facilities but, in the circumstances, again given the lack of contradictory evidence adduced in response to Mr Barton's evidence on this point, it is appropriate that permission to defend is given and summary judgment is refused. If the agreement did, indeed, have the two limbs, specifically therefore the second limb which I have identified, then, the set-off provisions in this Silmag and Norwegian Facilities would not come into play, or arguably would not do so. Accordingly, even if Mr Lord is right to be dismissive of Mr Hext’s arguments concerning the interplay between clauses 8.3, 8.3.4 and 11.1, it seems to me that there is anyway sufficient merit for present purposes in the point concerning the second limb to the alleged agreement.

Again, I am not saying that this argument by Mr Hext ultimately will prevail, merely that it is an argument which cannot be said at this stage not to have a realistic prospect of success. I have already touched on the decision of Flaux J in the Franklin case and recorded Mr Hext's submission that the that case involved a rather more straightforward set of factual circumstances and a clear conflict between the memorandum of understanding and the alleged prior oral agreement. It seems to me that the position is somewhat less clear in the present case.

Lastly, I observe, without basing my decision on the point, that in the draft Amended Defence, Mr Hext also seeks to advance an estoppel case and, more specifically, a rectification case as a means of getting around the difficulties identified by Mr Lord, in circumstances where permission to amend the Defence has not been granted nor indeed, as I understand it, has permission yet been sought.

The option point

This brings me to Mr Lord's last point, which is that Mr Barton had, at best and on his own case, a right to elect to set-off and that he chose not to exercise that option. Mr Lord submits that, having assigned away the Bluestone Loan so as to mean that he no longer owned it (if that be the right word) but Unicorn did instead, Mr Barton is now to be regarded as no longer having the option which he says the agreement entered into in Zurich on 6 February 2014 gave him.

Again, it seems to me that this is a point which might ultimately succeed, but I am not satisfied that it would be right to decide the point in Grenda's favour at this stage. As Mr Hext submits, it is at least arguable and I consider rather more than merely arguable and therefore sufficiently arguable for summary judgment purposes, that the agreement alleged to have been entered into in February 2014 was a multi-party agreement to which Mr Ruhan, Mr Barton, Minardi and Grenda were parties, so as to mean that, notwithstanding the subsequent assignment, Mr Barton's rights remain. I am not deciding that point in favour of Mr Barton. I recognise Mr Lord's submissions to the contrary. It seems to me, however, that, having reached the conclusion which I have reached thus far, namely that on the evidence it is appropriate that summary judgment is declined, it would be inappropriate to decide this point (and only this point, in effect) in Grenda's favour and so to grant summary judgment. If and insofar as this entails me considering the question of summary judgment not merely by reference to the merits, but also by reference to the compelling reason limb, then so be it. What I am clear is that, in exercising my discretion and having heard full debate, it is inappropriate to grant summary judgment at this juncture.

This leads me to my overall conclusion on summary judgment. In the circumstances, and for the reasons I have sought to explain at some length, notwithstanding that this is an ex tempore judgment, I am not persuaded that it would be appropriate to give Grenda summary judgment in this case. I consider that the evidence before me is sufficient to mean that the matter should proceed to trial. In short, I consider that there is a realistic prospect of success of Mr Barton succeeding with his defence. Mr Barton has given evidence on the agreement alleged to have been concluded in early 2014 and that evidence has not been matched in any shape or form by evidence from Mr Ruhan, the individual with whom that agreement is said to have been entered into. I acknowledge that it is necessary to consider nonetheless what Mr Barton himself has to say in relation to the alleged agreement. I have done so and I am satisfied that focusing on his own evidence, it is only right that the matter should proceed to trial because, as I have indicated, I consider that the matters raised do support a case which has a realistic prospect of success. At trial, any evidential dispute on the points can be properly evaluated in the ordinary way, assisted by the disclosure which will, by then, have been given by both parties. Again, this is a point that I have already explained and it seems to me it is a point with considerable force.

Mr Lord submits that I should require Mr Barton to pay into Court the amount claimed as a condition of being able to defend the claim. I do not consider that this would be appropriate given my conclusions as explained thus far. I am not in a position, in short, to conclude that the defence raised concerning the agreement concerning set-off is improbable. This is not, of course, to say that it is evidence ultimately which will be accepted at trial, but given my conclusion that it is not improbable, and it would be inappropriate to impose the condition, which Mr Lord asks me to consider doing. Ultimately, this is a point of discretion in any event and, exercising my discretion, I consider that no such condition should be imposed. Had I considered that a condition should be imposed, I would have adopted the approach which was described in the Anglo Eastern Trust case ([2002] EWCA Civ 198) and would have deferred consideration of Mr Barton's ability to comply with any condition. I had submitted to me yesterday a short witness statement from Mr Barton, the thrust of which is to the effect that he would be unable to pay the amounts claimed into Court. I have had only a limited opportunity to consider that and leave it out of account for present purposes but I do not get to that stage for the reason that I have given.

This leads me to the last point, which I need not, in the circumstances, say anything very much about. This is what might be described as entailing quantum issues, albeit I am a little doubtful that that is the right description in relation to what are, after all, debt claims.

In relation to the Biomass Facility claims, Mr Hext has taken issue with advances said to have been made under that facility, amounting to something in the region of 1 million euros since the end of June 2013. Mr Lord says that no positive case been advanced in that regard. At best this has been a non-admission. Had I had to consider this matter, which I do not, given my conclusion thus far, I would in all probability have not been dissuaded from granting summary judgment in the full amount, since it seems to me that it is incumbent upon a defendant in Mr Barton's position on a summary judgment application to do more than merely non-admit.

As to the various interest points which were raised, I might (although again this is a wholly hypothetical observation in the circumstances) have been more amenable to the points which Mr Hext makes there. However, I see force in the submission which Mr Lord makes, which is that, if I had got to the quantum stage, I would have already decided that there was insufficient substance in the alleged set-off agreement and, given that the alleged set-off agreement was entered into at the same time as an agreement (the same agreement) concerning interest, I can see that I might logically have decided that the quantum points raised by Mr Barton through Mr Hext take him nowhere. These observations are, however, entirely hypothetical and academic in view of my earlier conclusions.

In the circumstances and for the reasons which I have given, I refuse both applications.