“No disposition of the registered estate by the proprietor of the registered estate is to be registered without a written consent of Rabia Sheikh care of Ashley & Co, 49 Blackbird Hill, London NW9 8RS.”
“No disposition of the registered estate by the proprietor of the registered estate is to be registered without a certificate signed by Anal Sheikh of 49 Blackbird Hill, London NW9 that she is satisfied that the person who signed the consent required by the above restriction registered on19 October 2005 is Rabia Sheikh.”
“First, it was obviously in the interests of all parties that the proposed refinancing should proceed in order to enable the express terms of clause 3 to be implemented. In those circumstances it seems to me clear that there was an implied obligation on all parties to co-operate in achieving that objective, at any rate for so long as the Bank of Ireland was still willing to agree to the conditions spelt out or implicit in clause 3. Secondly, it seems to me most unlikely that the parties can have contemplated that Miss Sheikh and her mother should be left with no security at all for the payment of the£1.2 million and interest if the proposed refinancing with the Bank of Ireland fell through. However, any alternative second charge would obviously have to be subject to the existing rights of the Bank of Scotland as first chargee, and would also have to be in a form acceptable to any replacement lender, as well as in a form reasonably acceptable to Miss Sheikh. Thirdly, unless and until the initial payment of£300,000 was made Miss Sheikh [and, I would now add, her mother] had the express protection that [the Restrictions] would remain in place and the documentation to remove them would be held to her order by Isadore Goldman. The parties cannot in my view have reasonably contemplated that there could be any gap between the removal of [the Restrictions] and the provision to her of security for payment of the£1.2 million . Accordingly, in order to give business efficacy to the settlement a term must in my judgment be implied that the proposed second mortgage in favour of the Sheikhs should take effect simultaneously with the removal of [the Restrictions].”
“69. As pleaded above, the defendants were under an obligation to act in good faith in relation to the completion of the proposed refinancing transaction. By presenting the First Petition, and sending the subsequent correspondence to the Bank of Ireland, the defendants breached this obligation. The conduct of the defendants was deliberate, in bad faith and designed to sabotage the proposed refinancing transaction which had been contemplated by the Settlement Agreement and the Consent Order [i.e. the order made by Kitchin J on3 September 2007 ].”
“the Claimants wrote to the Defendants stating that the Settlement Agreement was no longer capable of performance and stating that the Claimants accepted the Defendants’ repudiation of the Settlement Agreement and the Consent Order.”
“81. Further or alternatively the Claimants are currently and for the foreseeable future unable in breach of the settlement agreement to provide the Defendants with a charge compliant with clause 3 of the settlement agreement inter alia because the Bank of Ireland has refused to allow the Claimants to execute a charge giving the Defendants a right of foreclosure as provided by paragraph 3.1 of the settlement agreement and/or has refused to limit its charge to£1.75 million as provided by Clause 3.2. In the premises it would be inequitable for the Court to order the Defendants to give up their restrictions and shares where the Claimant is wholly unable to comply with its obligations to provide alternative security. 82. Alternatively if, which is denied, the Defendants are liable to the Claimants, the Defendants will seek to set off against such liability the sum due from the Claimants to the Defendants in the Defendants’ counterclaim proposed to be issued.”
“At any time when proceedings on a bankruptcy petition are pending or an individual has been adjudged bankrupt the court may stay any action, execution or other legal process against the property or person of the debtor or, as the case may be, of the bankrupt.”
“5. Henderson J now wishes to have a long trial of the case. He has steadfastly refused to deal with any interim matter since 2008. He has done so to cause me and my daughter as much suffering as he could and keep us out of our money. 6. Over the last six months my health has taken a turn for the worst. [Some details were then given]. 7. My daughter and I allege that the Lord Chancellor J [sic] and Henderson J have deliberately sought this outcome to conceal Briggs J’s conduct. If this trial is to take place the only way in which I can participate in it [is] by video link. Moreover my daughter and I do not have the money to travel to court or to serve witnesses with conduct money. 8. In so far as prejudice is concerned, Mr Dogan has been protected by this court since 2007. He has not suffered any prejudice at all. The Chancellor, Briggs J and Henderson J have made this man from a council house a very wealthy man by handing him our£1.2 million , and they have kept him away from the criminal courts.”
“10. As to the RX1 form dated11 August 2004 , I note that what appears to be my signature appears on the document. I cannot say that I did not sign this although certainly I do not recall doing so. I knew nothing about restrictions. If I did sign it, Miss Sheikh must have deliberately withheld its purpose from me because I never agreed to put something like a restriction on the title to prevent its sale or re-mortgage without her or her mother’s written permission. I would never have signed anything to give her control of the Property and the investment had I known what it was.”
“6. The defendants did not within seven days, or even by31 July 2007 , deliver the documents necessary to remove the restrictions. In consequence, the transaction did not proceed so as to enable Red River to pay the£300,000 by then due, which it intended to raise out of the BoI facility. Briggs J recorded in paragraph 8 of his judgment [of15 November 2007 ] – the subject of one application before me – that Mr Page’s explanation of why AS had refused to comply with clause 2 was because of what she regarded as the claimants’ unreasonable refusal to lodge the second legal charge for exchange. Her concern was that there should be no moment when the property was affected neither by the restrictions nor by the second charge. 7. That impasse led on22 August 2007 to the issue by the claimants of the present proceedings for the delivery up by the defendants of the required documents and damages. They followed that up with an interim application to Kitchin J on3 September 2007 for delivery up. By then the BoI had offered an advance of£1.75m to the claimants, who had executed in escrow a legal charge in its favour which was being held by the claimants’ solicitors. The defendants’ main concern was that it should not secure more than£1.75m lest their second charge might give them inadequate security. Their position, with which the claimants disagreed, was that the correct construction of the settlement agreement was that the BoI’s intended priority was to be up to a maximum amount of£1.75m including interest and costs. 8. The application to Kitchin J was resolved by a consent order in Tomlin form (“the consent order”). The Schedule to it provided for the delivery of the required documentation by the defendants to the claimants’ solicitors by 10 September and for those solicitors to hold it to the defendants’ order pending (a) the payment of£300,000 , (b) the execution of the second legal charge, and (c) the execution of a deed of priority dealing with the respective rights of the BoI and the defendants. It also resolved the issues between the parties as to the terms of the legal charge and the deed. Paragraph 4 of the Schedule included undertakings (i) by the defendants to enter into a deed of priority containing four listed provisions, and (ii) by the claimants to use reasonable endeavours to procure the BoI to enter into such a deed. The order required the defendants to use their best endeavours to provide their comments on the draft second charge and deed by 11 September or, at the latest, 13 September. Whatever the position under the settlement agreement, the defendants were contemplating a deal under which their legal charge ranked after the BoI charge and with a deed of priority. 9. The consent order included a liberty to apply as to carrying the scheduled terms into effect and a more general such liberty in the event of disagreement. Pursuant to those liberties the claimants restored the matter before Briggs J on20 September 2007 . The defendants had by then provided some of the documentation required by the consent order but not, it was said, all of it. The claimants also wanted directions as to the form of the second charge, as to which the parties could not agree; and as to the deed of priority, in respect of which there was a complaint that the defendants had failed to provide their comments. The defendants wanted changes to the deed, to which it was said the BoI was not prepared to agree. The claimants asked the judge to settle the form of charge and deed. 10. AS appeared in person before Briggs J and made it clear that the defendants wanted the settlement agreement to be performed. What she wanted at that stage was an adjournment so as to bring on inter alia an application for an order for the payment of the£300,000 . Her application for an adjournment was refused. AS’s further point was that there was no point in the court settling the second charge and deed because, if they were settled in accordance with her assertion as to the true construction of the settlement agreement and consent order, the BoI would not agree to them or enter into the first charge. That point did not deter Briggs J from embarking on what was asked of him: the parties, in his view, would have to take the risk as to the BoI’s response. 11. Briggs J concluded that AS had reached the view that the performance of the settlement agreement by the completion of the composite transaction was unlikely to serve the defendants’ interests. He settled the terms of the second legal charge. He did not also settle the deed of priority but did make rulings on issues raised by AS as to the extent to which it was or was not compliant with paragraph 4 of the Schedule to the consent order. The exercise involved his rejection of all but three of her points of objection, which resulted in three amendments. He set a deadline of noon on Friday, 21 September for the delivery by the defendants of Form UN2 that was necessary to procure the withdrawal of the restrictions on the title to the property that had been entered by AS and to remove any pending applications for entries on it. He made it clear that if there were any further arguments about the documents, the matter should be restored to him by no later than 3 pm on 21 September. 12. The defendants complied with the obligation to deliver Form UN2. Following the hearing before Briggs J, the claimants overnight amended and engrossed the second legal charge in the form he had settled it in readiness for the completion of the refinancing arrangements between Red River and the BoI. They also sought and obtained the BoI’s agreement to the form of the deed of priority as amended following Briggs J’s rulings. At midday on 21 September they sent the engrossment of the legal charge to the defendants for execution and the defendants executed it on the same day. 13. On 24 September AS raised further objections to the deed of priority, asserting that it was not compliant with the settlement agreement or consent order. She declined to execute it. The claimants restored the matter to the court seeking an order requiring her to do so. That application was heard by Mann J on 27 September when both sides were represented by counsel. 14. Mann J’s judgment summarised the history. He said that AS’s obligation was merely to sign a deed that was compliant with the requirements of paragraph 4 of the Schedule to the consent order. The question was whether it was still open to her to argue, as she did, that the document she was being asked to sign was not so compliant. The claimants’ point was that AS had had her chance to argue her corner on the deed before Briggs J. She was not entitled to a second bite of the cherry because the ordinary principle is that a litigant has to advance all arguments in relation to a particular issue at the same time. 15. Mann J considered, by reference to the transcript, what AS had argued before Briggs J in relation to the deed of priority. His conclusion, at paragraph 53 of his judgment, was that all that Briggs J regarded himself as doing in relation to that deed was to rule on the particular disputes about it that the parties had raised. He was not settling the deed, no doubt because he could not bind the BoI, and he expected that, once he had ruled on the points in dispute, the parties would go away and draft it. The only remaining dispute he had in mind as being permissible at that stage about the document was whether the drafting adequately incorporated the matters on which he had ruled, in which case it could be referred back to him, ideally no later than 3 pm on 21 September. He was not inviting a return visit on new points. 16. Mann J was satisfied that AS was seeking to raise new points as to why the deed was non-compliant. He explained at paragraphs 55 to 58 that those points could and should have been raised before Briggs J. AS’s own counsel admitted as much. Mann J’s decision was that there must be finality to litigation, in particular conveyancing litigation of this sort, and that it would be unfair to decide those new points and then, depending on their outcome, require the claimants to go back to the BoI and obtain a new consent. The judge’s view was that AS was not entitled to raise the new points. 17. The outcome of the hearing was that (1) upon the defendants’ undertaking to execute a deed of priority in an identified form and to send it to the claimants’ solicitors on 28 September, there was no order on the application save that (2) the defendants pay costs of£4,000 to the claimants, to be set off against the£300,000 due to the defendants under clause 1.1 of the settlement agreement. The order included a liberty to apply. The defendants were not, therefore, ordered to execute the deed: they undertook to do so. The order of 27 September is the subject of one of the applications for permission before me … 18. RS executed the deed of priority on 28 September and delivered it to the claimants’ solicitors. The undertaking given to Mann J was thereby honoured. Those solicitors forwarded the deed to the BoI’s solicitors in readiness for completion, and by 4 October the BoI had executed it as well. The deed did not thereby come into effect. That depended upon the execution of documents requiring simultaneous completion. 19. At the end of September 2007 the claimants’ solicitors, at the BoI’s request, carried out a further search against title. That revealed that on 21 September the defendants had applied to HM Land Registry to register a second charge, in support of which they had forwarded to the Land Registry a charge in the form settled on 20 September and dated 21 September, although one that was still unexecuted by Red River. The BoI regarded its priority under the pending composite transaction as prejudiced by that application. The original agreement was that, upon completion of the composite transaction, the BoI would register both its first charge and the defendants’ second charge. It was not prepared to complete unless the defendants’ application was withdrawn. The result was that the claimants applied to Briggs J on 2 October for orders (i) that the defendants’ application to the Land Registry be cancelled forthwith, (ii) restraining them from making any other application to the Land Registry in relation to the property until after registration of the first legal charge upon completion of the composite transaction, and (iii) restraining them from entering in the meantime into any communications with the BoI. The latter two orders were based on the assertion that AS had embarked on a campaign to sabotage the composite transaction. At the same hearing AS applied informally for delivery to her of the second legal charge on the basis that, as Red River had executed it on 28 September, there was no reason why she should not have it. 20. Briggs J, on 2 October, acceded to the first and second of the claimants’ applications on terms but refused the third. The basis of his decision was that under the settlement agreement and consent order, the transaction to which the defendants were committed was one under which there was to be a first charge in favour of the BoI, a second charge in favour of the defendants and a deed of priority between the BoI and defendants; and that it was an implied term of that transaction that the defendants would not make applications to the Land Registry that would hinder its due completion. He did not accept AS’s arguments that the settlement and agreement said nothing about requiring the defendants to be party to a composite transaction with the BoI. Whilst that might be true as far as it went, the consent order had moved things on. The defendants intended to appeal against Mann J’s order of 27 September and AS made clear to the judge that she opposed the making of any order that might prejudice that appeal. Precisely what she meant by that is not clear to me. 21. Briggs J’s order of 2 October contained undertakings by the claimants in damages and “to obtain registration of the Second Legal Charge at Companies House”
“The Applicants and the Respondents agree to compromise the present application on the basis of the following undertakings which they each offer to the Court: 1. The Respondents undertake to deliver up within seven days of the date hereof to the solicitors for the Applicants, Isadore Goldman: a. Forms RX4 duly executed by [AS] and such other or further documentation required by HM Land Registry to remove the restrictions and other entries on the title to the Property entered by [AS] and to remove any pending applications for entries on the title; b. delivery up of a stock transfer form duly executed by [RS] transferring all shares held by [RS] in [Red River] to [Mr Dogan] for such consideration as [RS] may specify not exceeding£300,000 ; (together “the Documents”). 2. [Isadore Goldman] undertake that in consideration for the Respondents delivering the Documents to them, they will hold the Documents to the Respondents’ order pending: a. the payment by the Applicants to the Respondents of the sum of£300,000 in compliance with clause 1.1 of the [Settlement Agreement]; b. the execution by the Applicants of a second legal charge in compliance with clause 3 of the Settlement Agreement (“the Second Legal Charge”); c. the execution of a Deed of Priorities in accordance with paragraph 4 hereof. 3. Without prejudice to their position generally the Respondents accept for the purposes of this application only that a first legal mortgage over [the Property] securing the advance of£1.75 million (“the Advance”) to be made by [the Bank of Ireland] to [Red River] together with interest and costs complies with clause 3.2 of the Settlement Agreement provided that the Bank of Ireland retains out of the Advance a sum of£140,000 as cover for interest due. 4. The Respondents undertake that they will enter into and the Applicants undertake that they will use their reasonable endeavours to procure the entry by the Bank of Ireland into a Deed of Priority which provides that: a. the Respondents will give the Bank of Ireland 28 days’ prior notice in writing of any action to enforce against [Red River] under or in respect of the Second Legal Charge other than making a demand thereof; b. the first legal mortgage shall rank in priority to the Second Legal Charge to the extent of any amount outstanding from the Advance together with related interest and costs but not further or otherwise but the Second Legal Charge will rank in priority before any further or other advance by the Bank of Ireland to the First Respondent [sic, but an obvious error for Red River]; c. the sum of£140,000 of the Advance shall be retained by the Bank of Ireland as cover for the interest due on the Advance over the first year of the facility; d. the Bank of Ireland consents to the execution of the Second Legal Charge and to its registration at the same time as that of the first legal mortgage.” a. Forms RX4 duly executed by [AS] and such other or further documentation required by HM Land Registry to remove the restrictions and other entries on the title to the Property entered by [AS] and to remove any pending applications for entries on the title; b. delivery up of a stock transfer form duly executed by [RS] transferring all shares held by [RS] in [Red River] to [Mr Dogan] for such consideration as [RS] may specify not exceeding£300,000 ; a. the payment by the Applicants to the Respondents of the sum of£300,000 in compliance with clause 1.1 of the [Settlement Agreement]; b. the execution by the Applicants of a second legal charge in compliance with clause 3 of the Settlement Agreement (“the Second Legal Charge”); c. the execution of a Deed of Priorities in accordance with paragraph 4 hereof. a. the Respondents will give the Bank of Ireland 28 days’ prior notice in writing of any action to enforce against [Red River] under or in respect of the Second Legal Charge other than making a demand thereof; b. the first legal mortgage shall rank in priority to the Second Legal Charge to the extent of any amount outstanding from the Advance together with related interest and costs but not further or otherwise but the Second Legal Charge will rank in priority before any further or other advance by the Bank of Ireland to the First Respondent [sic, but an obvious error for Red River]; c. the sum of£140,000 of the Advance shall be retained by the Bank of Ireland as cover for the interest due on the Advance over the first year of the facility; d. the Bank of Ireland consents to the execution of the Second Legal Charge and to its registration at the same time as that of the first legal mortgage.”
“29. … I was very anxious not to be obliged to sell the Property. I knew that refinancing offered [Red River] the best opportunity to realise a better profit by redeveloping. I felt that was the case then and still do. I also knew that Miss Sheikh was entitled to be provided with a second charge over the Property which I was prepared to give. The terms of that charge were ultimately resolved by the Court, as was the Deed of Priorities between Miss Sheikh and the Bank of Ireland. I wanted to complete the deal, pay Miss Sheikh her£300,000 and put the refinancing in place so that the development could be commenced. I left the direct negotiations as to the refinancing to my broker, Miss Fozia Dick, and the legal documentation to Howard Richards, a partner at Isadore Goldman. They consulted me as and when it was necessary.”
“Nonetheless, it seems to me that where the parties have by consent obtained an order which permits difficulties to be resolved by agreement during the vacation the court should attempt to resolve those difficulties unless there are the most powerful reasons why it should not.”
“The bank’s charge must have first priority under the Land Registration Act, not just pursuant to a deed of priority. Ms Sheikh can then register her charge protected under a priority search ranking behind the bank. We will not expose the bank to the risk of Miss Sheikh trying to defeat the deed of priority and thereby getting first priority. In all likelihood she would lose but the bank does not want to be going to court on this, and the Sheikhs’ willingness to litigate anything and everything is a real concern. Please do not expect the bank to take a view on something as fundamental as this given all the circumstances.”
“12. … I accept that the obligation to pay£300,000 in the settlement agreement does not appear, on its face, to be conditional upon the claimants as payers first obtaining lending from the Bank of Ireland. Nonetheless it seems to me the terms of [the Consent Order] clearly contemplate an agreed regime designed to enable the claimants to do so, and indeed to do so at a time sufficient to enable them to raise the funding to make that first payment.”
“AND UPON THE APPLICANTS FURTHER UNDERTAKING to obtain registration of the Second Legal Charge at Companies House IT IS ORDERED: 1. That upon delivery to the Respondents of a letter from [Burges Salmon] a. stating that the Deed of Priorities executed by [RS] has been executed by the Bank of Ireland; and b. undertaking on any registration of the First Legal Charge in favour of the Bank of Ireland with the Land Registry that they will simultaneously register the executed Deed of Priorities and lodge with the Land Registry a certified copy of the Second Legal Charge in favour of [RS] and apply for its registration; the Respondents do forthwith remove or withdraw the application to register a charge made by the Respondents on21 September 2007 … ”
“Someone will need to register the second charge at Companies House before it is sent on to me to register at the Land Registry. I can include a certified copy of the completed second charge in the Land Registry application if you send me a certified copy, and can explain to the Land Registry that the original will follow once received back from Companies House. You will need to amend your undertaking to refer to a certified copy of the second charge being sent to me on completion, with the original to follow once registered at Companies House. I will leave you to agree arrangements for Companies House registration with Ms Sheikh.”
“We confirm the Deed of Priorities executed by [RS] has been executed by the Bank of Ireland. We undertake that on any application by us for registration of the First Legal Charge in favour of the Bank of Ireland with the Land Registry we will simultaneously apply for registration for the executed Deed of Priorities and lodge with the Land Registry a certified copy of the Second Legal Charge in favour of [RS] and apply for its registration. We accept no responsibility for actual registration of the Second Legal Charge or the Deed of Priorities at the Land Registry, which is a matter for the Registrar. We also accept no responsibility for the validity of the Second Legal Charge or its enforceability.”
“Well, Mr Meares, I was told earlier this week, and I do not pretend to be an expert on the technicalities of registration, that in circumstances where a charge is being given by a company it has to go first to Companies House. You lodge the application for registration with a certified copy and in due course provide the original when it comes back from Companies House on the assumption that in the longer term the document stays at the Land Registry. Companies House merely see it and pass it back.”
“It could have been sorted out in the way that it has if it wasn’t for the pressure of the claimants. So this is a result where everyone is going away content.”
“The equitable mortgage Without prejudice to the creation of the Sheikh Mortgage [i.e. the second legal charge], the beneficiaries of the equitable mortgage reserve their right to enforce their rights and interests, against the Bank of Ireland, in priority to any subsequent legal mortgage the Bank may acquire, inter alia, on the grounds that the Bank of Ireland knows, or has reason to suspect, that the Borrower [i.e. Red River and Mr Dogan] has acted dishonestly, and fraudulently, in entering into the Settlement Agreement, and consequently the equitable mortgage, and the Sheikh Legal Mortgage. So that you are fully on notice of all of the facts and matter[s] upon which I propose to rely in support of this claim, I am sending you a full set of all the papers in the proceedings. There is a considerable amount of paperwork to photocopy and collate, which obliges me to .. send the documents to you in a piecemeal fashion. You should be in possession of everything within 7 days. I shall send you indices of the documents, I am posting on to you, or sending you by email. Please let me know if you have not received any of the documents.”
“Further to my letter of even date please consider yourself on Notice that the Borrower is not able to provide you with a properly constituted Board Resolution for the giving of your security, no notice of any proposed Board Meeting having been served upon Rabia Sheikh as a shareholder.”
“15. In my judgment the circumstances are sufficiently exceptional for it to be appropriate for the court to make this order as sought. My reasons are shortly, first, there is evidence in a witness statement before me that significant further delay in the completion of this transaction will cause a grave risk that the Bank of Ireland will simply walk away from the refinancing of the transaction altogether, causing untold damage to the company and its interest in and desire to develop the relevant property. 16. Secondly, it appears to me that on the face of it, and subject to anything which Miss Sheikh on any application to set aside may in due course say in evidence, Miss Sheikh has made herself unavailable to respond to the consequences of the presentation and service upon the company of this petition … 17. Thirdly, it seems to me that this conduct smacks of a deliberate abuse because of the process upon which the court has now for sometime been engaged, and an abuse committed in a surreptitious and underhand manner.”
“We understand from Isadore Goldman that, following the hearing on Friday (5 October 2007 ) in relation to [the] Sheikhs’ Land Registry application, [AS] served you with a winding up petition. Although that petition was struck off later the same day on an ex parte basis, [AS] has leave to apply to reinstate the petition. Our solicitors have received a number of faxes and emails (dated 5 and 7 October) from [AS] putting the Bank on notice of her intention to try to defeat any priority the Bank of Ireland might have and force an early sale of the property. This would put the Bank into a position of having to defend its priority and deal with enforcement action by the second chargee, possibly immediately after completion.”
“31. On 9 October AS applied to Kitchin J for an order that HM Land Registry be required to enter a new restriction on the title to the property. Kitchin J dismissed that application with costs reserved. On 11 October issues as to the costs of the hearings of 5 and 9 October were restored before Briggs J. He gave directions and those matters came back before him on 7 November. 32. The matters before Briggs J on that date included applications by the defendants for orders requiring the claimants to register the second legal charge with the Registrar of Companies; to deliver up the second legal charge together with an appropriate form of resolution authorising the giving of it by Red River; and the deletion of that part of the order of 2 October restraining the defendants from making applications to the Land Registry pending the particular events it referred to. The argument was that Red River had undertaken in the order of 2 October to obtain registration of the charge at Companies House. They had executed it and the settlement agreement provided for£900,000 of the debt due to the defendants to be secured by such a charge. Thus, the defendants asserted, there was no reason why it should not be registered and delivered up. The settlement agreement had not been discharged by either side. The claimants could have no answer to its partial specific performance, the effect of which would be that the defendants would have a second charge ranking after the [Bank of Scotland] debenture. That, however, as I have mentioned, prevented the creation of further charges without the consent of the BoS, which had not been sought or obtained. 33. Briggs J refused to make the orders sought by the defendants. He held that the purpose of his order of 2 October was to facilitate completion of the composite transaction provided for by the settlement agreement, nothing more and nothing less. Although the second legal charge had been completed, it was only intended to come into force as part of a simultaneous composite transaction including the redemption of the BoS charge, the grant of the BoI charge, the grant of the second charge and the completion of the deed of priority. He said that, although it was not so expressed in terms, the claimants’ undertaking to register the second charge at Companies House was, just like the BoI’s solicitors’ undertaking in relation to lodging it at the Land Registry, by necessary implication only to come into effect on completion of the composite transaction. That would now never be completed. 34. There was likewise no reason why the second charge should be delivered up. Although it had been executed by Red River, it was not dated and had not come into force. Moreover the sabotaging of the composite transaction was the deliberate work of AS and in breach of her implied contractual obligation under the settlement and consent order to co-operate in good faith. The judge rejected the proposition that he could only make such a finding at a trial. He also rejected the proposition that he could not at that stage, without cross-examination, disbelieve AS’s assertion that she had behaved in good faith. He concluded that this was a paradigm case in which a party’s deliberate flouting of her contractual obligations raised an equitable bar to her claim for specific performance. RS was in no better position, having entrusted the conduct of the matter to AS. He said that if, on which he expressed no view, the defendants had any surviving remedies, they were merely for damages. 35. The other head of relief sought by the defendants at that hearing was the variation of the order made on 2 October restraining them from making further applications to the Land Registry in relation to the property pending registration by the BoI of the second charge, a deed of priority and the first charge. Briggs J accepted that this order had been intended to be of limited duration and that its objective was to facilitate the completion of the composite transaction. The argument in support of the order applied for was that the order of 2 October was now spent and the judge saw the force of that. To the question what interest the defendants sought to protect by registration, the reply was an immediate equitable charge of the property arising from the terms of the settlement agreement, in particular from the clause 3 agreement to confer the second legal charge. The judge, however, regarded it as fanciful that the defendants had an equitable charge over the property. They could only have had such a charge if the contract to grant it was specifically enforceable, whereas in the events that had happened, provision for the grant of the second legal charge was no longer capable of specific performance. That was both because performance had become impossible and because of the defendants’ sabotaging of the composite transaction. The grant of the second legal charge was an integral part of that transaction. The judge concluded that the order sought was for the purpose of making an unjustified application and therefore refused to make the order. 36. As for the various costs applications, Briggs J ordered either AS or the defendants to pay the costs of the application to strike out the petition. He ordered the defendants to pay the costs of the application to Kitchin J on9 October 2007 . He ordered the costs of11 October 2007 to be costs in the defendants’ application.”
“53. In my view there is no real prospect of that argument succeeding on appeal. It is implicit in the settlement agreement that the charge to which the defendants were to be entitled was a second charge to be given as part of a composite transaction involving the refinancing of the company’s indebtedness. It might be arguable that such refinancing did not have to be with the BoI if for any reason the BoI decided not to proceed. But that argument does not arise since, in the event, the matter was moved on by, in particular, the terms of the Schedule to the consent order, which show that by then the defendants were accepting that the transaction was a composite one involving the BoI, with the claimants’ assertion being that it was that composite transaction that the defendants had frustrated. It was against that background that the second legal charge came into being, such charge being intended only to come into effect as a charge subsequent to the BoI’s first legal charge. The argument that the effect of the settlement agreement was to entitle the defendants unconditionally to the grant of a charge over the property, being a charge which, on their case, would rank after the BoS charge – and, furthermore, a charge to which the BoS had not consented – appears to me to have no real prospect of success on appeal. I can see no answer to the judge’s reasoning in paragraph 35 of his judgment as to why the defendants were not entitled to delivery up of the claimed charge.”
“That the learned judge was wrong (if he did so) to decide finally that the defendants acted in breach of the implied obligation to act in good faith in relation to the completion of the Composite Transaction. That question turned on matters of fact such that the judge should not (if he in fact did so) have purported to decide it finally in advance of the trial, at which the defendants could adduce oral evidence on the matter. The judge should have done no more than to find that the respondents had a good arguable case that the appellants had breached the implied term.”
“Although not immediately apparent from the express terms of the Settlement, it was made in contemplation of the re-finance by the Bank of Ireland of Red River’s debts to BoS, in a sum sufficient to release the£300,000 necessary to enable the Claimants to pay it to the Defendants by the end of July 2007, and the legal charge referred to in clause 3 of the Settlement was intended to be entered into as part and parcel of a composite transaction between Red River, the Bank of Ireland and the Defendants, which was to include a first legal charge in favour of the Bank of Ireland, the Second Legal Charge (provided for expressly in clause 3 of the Settlement) and a Deed of Priority regulating the priority, as between the Bank of Ireland and the Defendants as chargees of the Property. I shall refer to it as “the Composite Transaction”
“I stopped the disposal of the Property by serving my winding up petition, for which Briggs J heavily criticised me, but had I not done so, I believe that my mother would have lost£900,000 for ever.”
“If it had not been for the Petition, then I believe that we would have been able to obtain oral or written confirmation of the withdrawal of the application from the Land Registry and to pass this on to Mr Robinson in time to have enable[d] completion to have taken place that afternoon or at the latest, Monday morning 08.10.07.”
“the parties, including Miss Sheikh and her mother, did indeed commit themselves contractually to act in good faith in such a way as would bring about the completion rather than the sabotage of the composite transaction. As it seems to me, this petition is on its face directed towards sabotage rather than completion of the transaction and has so far, at least today, caused completion not to take place.” Order: see paragraph 19 of the amended defence. Since both the Settlement Agreement and the Consent Order were founded on the parties’ agreement to settle all their outstanding disputes, and arose from a successful mediation, I have no doubt that this is correct. I would also go a little further, and spell out the nature of the implied term as being that the parties were under mutual obligations (a) not to do anything deliberately to undermine the Settlement Agreement without good cause, and (b) to co-operate in ensuring that its terms were carried into effect. When I refer, here and elsewhere in this discussion, to the Settlement Agreement without qualification, I mean the Settlement Agreement alone down to the date of the Consent Order, and the Settlement Agreement as varied by the Consent Order thereafter.