“In 2004, David McKee and Kevin McMenamin, acting within the scope of their apparent authority from Kingsbridge, induced the Claimants, two other professional footballers and one football manager, to purchase apartments at Monte Resina, Marbella, Spain (“Monte Resina”). The said inducement occurred because of the undue influence exercised by David McKee and Kevin McMenamin over the Claimants, and or because of breaches of trust and fiduciary duty by David McKee and Kevin McMenamin and or because of fraudulent misrepresentations by David McKee and Kevin McMenamin. Coutts and RBS are liable to the Claimants because Coutts or RBS were in a joint enterprise with David McKee and Kevin McMemamin in promoting Monte Resina to the Claimants, or because David McKee and Kevin McMenamin were acting as Coutts’ and or RBS’ agents for the purposes of arranging the loans to enable the Claimants to purchase the Monte Resina apartments, or because Coutts and RBS were on notice of David McKee and Kevin McMenamin’s undue influence and or breaches of trust and of [sic] fiduciary duty and or fraudulent misrepresentations.”
“As you know we are becoming more involved in property ventures as individuals, general partners and as principals of Kingsbridge. There is a fine line between all the relationships and we clearly have duties to several parties. We are trying to keep the right side of everything but invariably come across conflicts of interest we have to be mindful of.”
“There is an opportunity to purchase a development called Monte Resina from the builder at a discount to market valuation. The proposal is to sell the ten individual units to clients at fair market value with an independent valuation. There will be profit obtained which will be used in provide (sic) a rental guarantee for clients over a four year period. The opportunity was offered to [Kingsbridge] and your preference is that we do not take the risk of providing guarantees and instead negotiate a high end commission. I propose, with your agreement, to purchase the development, either with Kevin McMenamin or a related company. I will ensure that a commission at least as high as other property projects is paid to [Kingsbridge] for the introduction of clients. I will also ensure that Chris Bate clears the procedure and any declarations of potential conflict of interest.”
“LEVEL OF RENTAL GUARANTEE – RECORD WHEN PAID.”
“By reason of the relationship of agency in either the narrow or the broader sense, Coutts and RBS [Gibraltar] are fixed with notice of or otherwise liable for the undue influence and or breaches of trust and of fiduciary duty or fraudulent misrepresentations committed by the original Defendants.”
“32. As is evidenced by the Credit Submissions, These are forms internal to Coutts containing information when the proposed lending was submitted to Coutts’ Credit Risk committee. Coutts and RBS were on notice that (i) [McKee and McMenamin] owned property in Southern Spain, (ii) [McKee and McMenamin] may have a personal interest in the Monte Resina development, (iii) Kingsbridge were receiving a commission for promoting the Monte Resina development. 33. Any bank acting in accordance with normal banking practice would have clarified the nature of [McKee and McMenamin’s] interest in the Monte Resina development and would not have proceeded to lend to the Claimants unless it was satisfied that the Claimants had been given full disclosure of that interest and had received independent legal advice following such disclosure 34. As is evidenced by the Credit Submissions and the Loan Referral Sheets, Coutts and RBS were on notice that a guarantee had been given in respect of the mortgage payments. The Claimants repeat paragraph 13 above. Summarised in paragraph 25(4) of this judgment. 35. By reason of the matters aforesaid, Coutts and RBS were on notice that [McKee and McMenamin] were exercising undue influence, and or in breach of fiduciary duty and or had made fraudulent misrepresentations, unless [McKee and McMenamin] had disclosed to the Claimants their interest in the Monte Resina development and unless the Claimants had received independent legal advice from a solicitor appraised of [McKee and McMenamin’s] interest in the Monte Resina development.”
“… The consequences of the defendants being on notice of the equitable wrongs of [the Original Defendants] is that the transactions resulting from those equitable wrongs are avoidable as against the Defendants and or the Claimants are entitled to equitable compensation against the Defendants.”
“RBS and Coutts will be responsible for providing individual advice appropriate to your personal and financial circumstances on the mortgage/loan finance.”
“By lending we are obviously associated with the underlying deal but without the necessary experience to meaningfully provide comment. We are therefore taking the view that we should divorce ourselves from the efficacy of the underlying investment and make it clear that we are lending having made an assessment on the means position as described.”
“I appreciate that aspects of these proposed deals fall outside of your normal criteria. Can you speak to your Credit Department to ascertain if they are happy in principle with loans at this level, LTV, purpose. We are looking for a firm commitment from your Credit function – obviously subject to valuations and information verifications etc. We do not wish to submit individual applications at this stage as we appreciate that the LTVs and the purposes of the loans are outside of the standard criteria and we would prefer Credit to take an overview.”
“1. Buy to lets on interest only? – generally only consider int only on an exceptional basis for standard Real mortgages. “Real” refers to mortgage loans by RBS Gibraltar. 2. The 75% LTV ratio – We would certainly not be enamoured with 100% interest only commercial facilities. 3. Concentration risk ie same block of apartments in this case. 4. Tenancy agreements – you advised that Spanish law would not be acceptable from a Bank point of view for tenancy agreements in excess of 6 months. This could be a deal breaker in itself.”
“Since 2000 Coutts have been working very closely with Kingsbridge and Proactive both as separate entities and now in their integrated structure. They have both used Coutts to provide primarily banking and credit lines for their clients including£40 million of Film Sale and Leaseback Ingenious Media Inside Track facilities. Given Proactive’s pre-eminence in football, Coutts have been seeking a closer working relationship with them with the aim of being their preferred banking partner for their sports clients. This would complement Proactive’s “Best of Breed” approach insofar as they use accountants KPMG and solicitors Couchman Harrington. Such a move would see Coutts introduced to the majority of Proactive clients (c270) with all their banking credit and importantly mortgage business. There is also the possibility of an investment partnership as Proactive move towards more of a fee-based arrangement with their clients leaving their advisers able to recommend Coutts investment products under a ‘fund of fund’ approach. As part of this move, Proactive have approached us to assist with a selection of their clients relating to the Monte Resina development in Marbella Spain.”
“27A. Monies which the original Defendants received into their hands or which were received by others on behalf of the original Defendants, such as any sums received by Ogreda S.L., by Oscar Eguren or by Marrache & Co. which the said recipients had received for the benefit of the original Defendants, were subject to a trust in favour of the Claimants insofar as the original Defendants did not have any or any proper authorisation to receive those sums.”
“… what is required is conduct which in fact assists the commission of the act which is a breach of trust by the trustee, and this requirement does not have any mental element in addition to the requirement of dishonesty. The assistance must be of more than minimal importance, and must enable the breach of trust to be committed, but there is no requirement that what is done by the defendant inevitably has the consequence that a loss is suffered.”
“39B. In the alternative, Coutts and RBS Gibraltar deliberately concealed their notice of the original defendants’ interest in the investment which fact was a fact which Coutts and RBS Gibraltar would have disclosed in the normal course of the banking relationship with the claimant, including when advising or requiring the claimant to obtain independent legal advice in respect of the investment. 39C. In deliberately concealing the matters pleaded at paragraphs 39 to 39B above, Coutts and RBS Gibraltar were acting as RBS’s agents in the broad sense for the purposes ofsection 32 (1) Limitation Act 1980 .”
“In my judgement it is clear that from about January 1989 [West Bromwich] and FPS embarked on a joint enterprise to market to the public the ERMs of [West Bromwich] through the medium of FPS’s Home Income Plans.”
“I can find no evidence from which it is proper to conclude that, notwithstanding the existence of a joint enterprise between them, WBBS consented to be bound by the actions of FPS in the course of furthering that enterprise.”
“54. The claimant contends that it has suffered damage as a result of a tort committed by one person, “the primary tortfeasor”, and that another party, “the defendant”, who did not directly join with the primary tortfeasor in actually committing the tort, and was not the primary tortfeasor’s agent or employee, is also liable for the tort, because he assisted the primary tortfeasor to commit the tort. 55. It seems to me that, in order for the defendant to be liable to the claimant in such circumstances, three conditions must be satisfied. First, the defendant must have assisted the commission of an act by the primary tortfeasor; secondly, the assistance must have been pursuant to a common design on the part of the defendant and the primary tortfeasor that the act be committed; and, thirdly, the act must constitute a tort as against the claimant.”
“Equities are essentially defensive things. This is obvious in the first class, but is also true of the second class; the debtor can advance a cross-claim that he may have against the assignor only to diminish or extinguish the claim that the assignee has against him. There are no circumstances in which the debtor can actually recover money from the assignee.”
“When a deed conferring a benefit on a father is executed by a child who is not emancipated from the father’s control, if the deed is subsequently impeached by the child, the onus is on the father to shew that the child had independent advice, and that he executed the deed with full knowledge of its contents, and with free intention of giving the father the benefit conferred by it. If this onus is not discharge the deed will be set aside. This onus extends to a volunteer claiming through the father, and to any person taking with notice of the circumstances which raise the equity, but not further.”
“… against whom does the inference of undue influence operate? Clearly it operates against the person who is able to exercise the influence (in this case it was the father) and, in my judgement, it would operate against every volunteer who claimed under him, and also against every person who claimed under him with notice of the equity thereby created, or with notice of the circumstances from which the court infers the equity. But, in my judgement, it would operate against no others; it would not operate against a person who is not shown to have taken with such notice of the circumstances under which the deed was executed.”
“Where a transaction is obtained by undue influence, it must be set aside ab initio; and this requires a mutual accounting with mutual restitution by both parties. Where the transaction is one of guarantee this presents no difficulty. A surety incurs a liability but obtains no benefit. It is sufficient to set aside his liability; there is nothing for him to disgorge by way of counter restitution. But where the transaction is one of loan the position is very different. It would not be just simply to set aside the loan; this would leave the borrower on justly enriched. The proper course is to set aside the contract of loan and require the borrower to account for the monies received with interest at a rate fixed by the court. Since the effect is merely to vary the rate of interest, it is not surprising that is rare for the borrower himself to challenge the transaction.”
“There is no justification for subjecting an assignee, because he has received a payment in advance, to an obligation to make a repayment because of the non-performance of an event for which he has no responsibility.”
“There are four points on the wording of [section 32(1)(b)] which should be noted. (i) The paragraph does not say that the right of action must have been concealed from the claimant: it says only that a fact relevant to the right of action should have been concealed from the claimant. (ii) Although the concealed fact must have been relevant to the right of action, the paragraph does not say, and in my judgement does not require, that the defendant must have known that the fact was relevant to the right of action. In most cases where section 32(1)(b) applies the defendant probably will have known that the fact facts which she concealed the relevant, but that is not essential. All that is essential is that the fact must actually have been relevant, whether the defendant knew that not. The paragraph does of course require that the fact was one which the defendant knew, because otherwise he could not have concealed it. But it is not necessary in addition that the defendant knew that the fact was relevant to the claimant’s right of action. (iii) The paragraph requires only that any fact relevant to the right of action is concealed. It does not require that all facts relevant to the right of action concealed. (iv) the requirement is that the fact must be “deliberately concealed”