Mihir Vijay Choksi v IPS Law LLP [2025] EWHC 2804 (Ch)

[2025] EWHC 2804 (Ch)Case No BL-2024-001632IN THE HIGH COURT OF JUSTICECHANCERY DIVISIONBUSINESS AND PROPERTY COURTS OF ENGLAND AND WALESVenue Royal Courts of Justice, Rolls Building, Fetter Lane, London, EC4A 1NLDate 04/11/2025
Before
MASTER MCQUAIL
Between
MIHIR VIJAY CHOKSIClaimantIPS LAW LLPDefendant
Stuart Hornet (instructed by Charles Russell Speechleys LLP) for ClaimantAnthony Jones (instructed by IPS Law LLP) for DefendantHearing Hearing date: 29 July 2025
Approved JudgmentThis judgment was handed down remotely at 2.00pm on 4 November 2025 by circulation to the parties or their representatives by e-mail and by release to the National Archives.

Introduction – the Claim and the Application

[1]On 29 July 2025 I heard the application of the claimant, Mihir Choksi, for summary judgment for £1.5m plus statutory interest and costs.[2]The claimant’s claim is made under a Bridging Loan Agreement dated 11 October 2023 (the BLA) under which £1.5m of the claimant’s money was deposited in a designated account (the Escrow Account) with the defendant firm of solicitors, IPS Law LLP (IPS), for the purpose of allowing Biodex Trade Solutions Limited (Biodex)), one of IPS’s clients, to use it as proof of funds to secure an investment.[3]The claimant says that the terms of the BLA make clear that the funds would stay in the Escrow Account and would not be paid away. The claimant also says that only after these proceedings were commenced and a Part 18 Request was answered in February of this year, did it become apparent to him that, within weeks of receipt, IPS had paid almost the entire fund away at the direction of Biodex, including in payment of fees owed to IPS.[4]IPS has not returned the £1.5m and takes the position that that is a matter between the claimant and Biodex and that IPS had no independent obligations to the claimant to retain or to return the money, further or alternatively that the terms of the BLA were varied such that return of the money is not yet due.[5]The claimant says that paying away the claimant’s money was both a breach of contract and a breach of a Quistclose trust. Accordingly IPS has no realistic prospect of defending the claim for the £1.5m and statutory interest and there is no other good reason for a trial.

The Evidence

[6]The application is supported by the witness statement and exhibit of the claimant dated 20 March 2025. The claimant has also served a short responsive statement dated 23 July 2025.[7]On 21 July 2025, IPS served two witness statement from its managing partner, Mr Christopher Farnell (Mr Farnell). Mr Farnell was the person who dealt with the relevant transactions and has represented IPS throughout. The first was a short statement (Farnell 1); the second was a rather longer statement and had the appearance of being drafted, at least in part, using AI (Farnell 2).[8]On 28 July, the day before the hearing, Mr Orbell signed a short witness statement in support of IPS’s position.[9]The claimant complains that the defendant’s evidence is unsatisfactory and deficient in a number of respects:(i) although Farnell 1 and 2 were technically in time under CPR 24.5(3), the guidance for heavy applications at paragraph 14.46 of the Chancery Guide means IPS should have served its evidence 28 days after the application was issued;(ii) the evidence when served had no exhibits, although it referred to and relied on correspondence from Mr Orbell;(iii) Farnell 2 was not unfairly described by Mr Hornett, counsel for the claimant, as “an extraordinary document”. It is prolix and repetitive and cites numerous authorities - which, as Mr Farnell should know, is not the purpose of a witness statement – several of which have wrong citations or names and do not support the proposition for which they are cited. Some are completely irrelevant, and others do not exist;(iv) IPS served a further witness statement from Mr Farnell (Farnell 3) dated 24 July 2025 to which were exhibited an email from Mr Orbell dated 8 July 2025, a letter from Mr Orbell dated 15 July and a further letter from Mr Orbell dated 23 July 2025;(v) on 24 July 2025, IPS wrote to the claimant informing him that it anticipated being put in funds by Biodex such that it would be able to release the £1.5 million back to the Claimant within 28 days; (at the date of finalising this judgment that had not apparently happened);(vi) the day before the hearing Mr Orbell filed a witness statement in which he confirms that (a) the investment is likely to come good, and the money be returned, relatively soon and (b) that the claimant has been kept apprised (by Mr Orbell) of the situation.

The Factual Background

[10]The claimant is a businessman based in Dubai. IPS is a firm of English solicitors regulated by the SRA. In September or October 2023, the claimant became aware of an opportunity to provide short term finance to Biodex for the limited purpose of providing proof of funds for what was described as a “Stand By Letter of Credit” (SBLC). The claimant was originally going to provide £2m for Biodex’s purposes, but that figure was reduced to £1.5m at an early stage. IPS admits in its Defence that it acted for Biodex and/or its Managing Director, Mr Steven Orbell (Mr Orbell).[11]On 5 October 2023 and 9 October 2023 Mr Farnell wrote to Mr Orbell confirming IPS would hold the claimant’s money in escrow in its client account as proof of funds for a SBLC.[12]On 9 October 2023, the claimant entered a loan agreement with a Dubai company called Limit Up FZCO, (the Limit Up Loan Agreement). The terms were for £1.5m to be borrowed for 21 days, with interest at 36% for the 21-day period. The express purpose of the loan was to provide proof of funds under the BLA. The £1.5m was to be sent directly to the Escrow Account.[13]The BLA was made between the claimant as “Party A”, Biodex as “Party B” together described as “the Parties” and IPS as “the Loan Escrow Party”. It provided for signature by the Parties or their authorised representatives, respectively Mr Choksi as Party A, Mr Orbell for Party B and Mr Farnell for Party C. The copy in the hearing bundle bears the signatures of Mr Orbell and Mr Farnell and is dated 11 October 2023.[14]The key terms of the BLA are as follows: (i) The purpose of the BLA document was described as:
“to establish and agree the terms and conditions of an unencumbered loan being made by Party A into escrow at IPS Law as a bridging loan, to aid Party B in their creation and monetization of a trading product. This document is strictly confidential and exclusively between the two parties here named and signed within this document.” (ii) The Agreement was described as follows: “PARTY A is making an unencumbered LOAN AMOUNT into the LOAN ESCROW PARTY account heldby IPS Law LLP with the intention of aiding PARTY B in creating an SBLC, for which an interest will be paid to PARTY A. “PARTY B will be solely responsible for making all commercial decisions and instructions to create profits into the company bank account of PARTY B that provide for the provision of the LOAN INTEREST RETURNS into the agreed bank account of PARTY A. In doing so the LOAN ESCROW PARTY will at no stage allow for PARTY B to remove funds from the associated IPS Law LLP escrow account stated as LOAN ESCROW PARTY.” (iii) the period of the agreement was 21 days; (iv) the loan amount was £2m (in fact £1.5m); (v) The “Loan Bank Parties” were Limit Up as “Sender” and IPS Law as “Receiver;” (vi) the Sender’s and the Receiver’s (Escrow Account) bank account details were recorded; (vii) an agreed interest return of £2m was recorded to be paid from the IPS escrow account to an account of the claimant; (viii) payment was to be within 72 hours of instruction on day 21 after receipt of funds into the IPS Escrow Account (according to the “Frequency Rates” box) (ix) according to the “Loan Utilisation” box: “The LOAN AMOUNT will be managed as escrow by PARTY B to generate profits into the account of the LOAN ESCROW PARTY to provide for the distribution of LOAN RETURNS to PARTY A and will only be used for this purpose without exception. The LOAN AMOUNT will always be held with the LOAN ESCROW PARTY solely under the management, control and instructions of PARTY B and the escrow mandate until such time as it is returned to PARTY A at the end of this agreement. LOAN ESCROW PARTY confirm that no funds will be transferred, reallocated or diverted from the banking coordinates mentioned in LOAN ESCROW PARTY. “The TRADE will be via ping verification or an administrative hold on the funds held within the account of the LOAN ESCROW PARTY and are never at risk. Anty TRADE entered into will mirror the funds within the trader’s own account. “The funds will be held for as proof of funds in relation to a regulated trading program. At the end of the 21 days , the funds will be returned to PARTY A. Returns will be guaranteed according to the proposed contracted return (£2,000,000 profit plus original capital for a total of £4,000,000) or original funds will be returned in full.” (x) The section “Agreement Terms” recorded further express terms agreed between the Parties including that PARTY B undertook to: “a. use of the LOAN AMOUNT as escrow only to secure profits into PARTY B that provides for LOAN RETURNS to be made to PARTY A as part of those profits. “b. participation in regulated and non-regulated activities led by major organisations that produce profits to PARTY B as the party in sole control of the LOAN AMOUNT. “c. ensure that the LOAN AMOUNT remains with the LOAN ESCROW PARTY for the use of PARTY B and to protect PARTY A’s LOAN AMOUNT and to expedite its return upon request.”
[15]On 11 October 2023, Mr Farnell emailed the claimant to confirm receipt of the £1.5m.[16]On 24 November 2023, Mr Farnell wrote to Biodex to confirm that:
“I continue to hold £1.5m subject to your order in escrow. The monies remain held in our client account in accordance with your instructions.”
. This email was provided to the claimant by an intermediary, Mr Leeming.[17]However, by the date of that letter it appears from the disclosed redacted bank statement that the following payments had already been made from the IPS Escrow Account on the instructions of Mr Orbell: 12 October 2023 Oceania Capital £130,000 12 October 2023 Liverpool Consortium £150,000 12 October 2023 Glenn Thomas £25,000 20 October 2023 BGC Advisors £20,000 20 October 2023 IPS Law £20,400 23 October 2023 Biodex £250,000 23 October 2023 Biodex £250,000 27 October 2023 IPS Law £34,000 3 November 2023 IPS Law £150,000 7 November 2023 Biodex £40,000 15 November 2023 Biodex £60,000 16 November 2023 Biodex £250,000[18]The claimant only discovered this when, on 14 February 2025, IPS provided a copy of IPS Escrow Bank statement showing the payments out.[19]At the end of the 21-day period, the claimant pressed Mr Leeming for payment. On 1 December 2023 the claimant received an email from Biodex stating that the investment was shortly coming to fruition and that the escrow monies would soon be released.[20]From 7 December 2023 onwards the claimant chased IPS for repayment. On 17 January 2024 he instructed Bivonas Law to make formal demand for repayment. IPS’s responses were either to the effect that IPS had no obligations to the claimant who should consult Biodex or that Biodex had stated the money was on its way.[21]On 1 August 2024, Mr Orbell emailed Mr Farnell copying in the claimant confirming that: “I no longer require the £1.5m belonging to [the claimant] as pof on account … please organise to return his funds”.[22]The claimant instructed solicitors, Charles Russell Speechlys (CRS). On 14 August 2024, CRS wrote a letter before action to Biodex and a letter to IPS, making clear that if payment was not received from Biodex, the claimant would seek to recover the money from IPS. On 22 August 2024 IPS responded, claiming that it was unable to comply with Mr Orbell’s emailed instruction dated 1 August 2024 and that the dispute was a matter between the claimant and Biodex. Proceedings were issued on 12 November 2024.[23]It appears from Mr Farnell’s evidence and the contemporaneous correspondence in evidence that when Mr Orbell made requests for at least some of the payments set out in the table in paragraph 17 above, Mr Farnell sought and received from Mr Orbell specific confirmation that the payments accorded with Biodex’s agreement with the claimant. The confirmation sought in relation to IPS’s own legal fees suggests that IPS’s relevant work, or some of it, may have related to matters other than the BLA.

The Claim and the Purported Defences

[24]The claimant’s pleaded case is that the BLA created a Quistclose Trust and/or that it operated in contract; that its terms required IPS to retain the £1.5m in the IPS Escrow Account and return it after 21 days (or when requested to do so) and that IPS was in breach by failing to return it or account for it. Additional claims to equitable compensation and equitable remedies are sought but are not pursued as part of the summary judgment application, which is confined to the principle sum plus statutory interest.[25]The Defence admits the existence of the BLA and admits receipt of the £1.5m. Mr Hornett suggested in his skeleton argument, and I agree, that by construing the Defence and the IPS evidence filed by 24 July 2025 in the most favourable possible way to IPS three lines of defence are raised:(i) the proper construction of the BLA means that the £1.5m was under “the management, control and instruction” of Biodex and this allowed or required IPS to act on the instructions of Biodex;(ii) there was no Quistclose Trust or, if there was, it was subject to the “Loan Utilisation” provision (referred to in paragraph 14(ix) above) and that the claimant had knowledge of or agreed to or acquiesced in payments being made out of the £1.5m; and(iii) the claimant knew from his dealings with Mr Orbell that the monies were not retained in the Escrow Account and agreed that the “funds would not be returned until the investment was finalised” so that there was a contractual modification or variation or estoppel.[26]In addition, the IPS evidence seems to support a submission that there are other compelling reasons why the case should go to trial, such as the need for disclosure, expert evidence and cross examination.[27]Mr Jones of counsel was instructed by IPS two days before the hearing. He filed a skeleton argument which did not rely to any significant extent on the authorities or arguments referred to in Farnell 2. Mr Jones identified the key dispute between the parties being:(i) the original terms upon which the money was placed in the Escrow Account by the claimant; and(ii) whether, and to what extent, such original terms were subsequently varied by agreement.[28]Mr Jones explained that IPS’s case is that the BLA:(i) did not impose any trust duties on IPS owed to the Claimant;(ii) required IPS to follow the instructions of Biodex with respect to the dispersal of the monies and that has been done; and(iii) whatever the original terms of the arrangement, the conduct of the claimant in agreeing to Biodex’s conduct (communicated by its actual or ostensible agent, Mr Orbell) gives rise to an estoppel such that the claimant cannot now insist on the original terms of the deposit of funds.

Summary Judgment: The Legal Principles

[29]The starting point for the relevant legal principles for grant of summary judgment under CPR Part 24 is the well-known passage of Lewison J in Easyair Ltd v Opal Telecom Ltd [2009] EWHC 339 (Ch), as approved by the Court of Appeal in AC Ward & Sons Ltd v Catlin (Five) Ltd [2009] EWCA 1098:
“15. As Ms Anderson QC rightly reminded me, the court must be careful before giving summary judgment on a claim. The correct approach on applications by defendants is, in my judgment, as follows: i) The court must consider whether the claimant has a “realistic” as opposed to a “fanciful” prospect of success: Swain v Hillman [2001] 2 All ER 91 ; ii) A “realistic” claim is one that carries some degree of conviction. This means a claim that is more than merely arguable: ED & F Man Liquid Products v Patel [2003] EWCA Civ 472 at [8] iii) In reaching its conclusion the court must not conduct a “mini-trial”: Swain v Hillman iv) This does not mean that the court must take at face value and without analysis everything that a claimant says in his statements before the court. In some cases it may be clear that there is no real substance in factual assertions made, particularly if contradicted by contemporaneous documents: ED & F Man Liquid Products v Patel at [10] 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.”
[30]In relation to the possibility that the position might change at trial, there must be “reasonable grounds” for believing that disclosure may materially add to or alter the evidence (Okpabi v Royal Dutch Shell Plc [2021] UKSC 3 at [127-128]).[31]On this point, in King v Stiefel [2021] EWHC 1045 Cockerill said this:21. The authorities therefore make clear that in the context of summary judgment the court is by no means barred from evaluating the evidence, and concluding that on the evidence there is no real (as opposed to fanciful) prospect of success. It will of course be cautious in doing so. It will bear in mind the clarity of the evidence available and the potential for other evidence to be available at trial which is likely to bear on the issues. It will avoid conducting a mini-trial. But there will be cases where the Court will be entitled to draw a line and say that -even bearing well in mind all of those points - it would be contrary to principle for a case to proceed to trial.22. So, when faced with a summary judgment application it is not enough to say, with Mr Micawber, that something may turn up[32]In Duchess of Sussex v Associated Newspapers Ltd [2021] EWHC 273 Warby J said this:14. Easyair principles (vi) and (vii) contain echoes of the law's traditional disapproval of a "a desire to investigate alleged obscurities and a hope that something will turn up …" as a basis for defending a summary judgment application; a case that is "all surmise and Micawberism" will not do: see The Lady Anne Tennant v Associated Newspapers Ltd [1979] FSR 298, 303 (Sir Robert Megarry V-C) . The focus is not just on whether something more might emerge, but also – and crucially – on whether, if so, it might "affect the outcome of the case"; and the court's task is to assess whether there are "reasonable grounds" for believing that both these things would occur: see Doncaster Pharmaceuticals Group Ltd v Bolton Pharmaceutical Co 100 Ltd [2006] EWCA Civ 661 [2007] FSR 63, [18] (Mummery LJ) .15. As Mummery LJ warned in the Doncaster case at [10], on applications for summary judgment the court must be alert to "the defendant, who seeks to avoid summary judgment by making a case look more complicated and difficult than it really is". But as he also said at [11], the court should beware "the cocky claimant who … confidently presents the factual and legal issues as simpler and easier than they really are and urges the court to be “efficient…". Efficiency is not a ground for entering summary judgment. Judgment without a trial may sometimes result in huge savings of time and costs; that would have been so in the hugely expensive litigation in Three Rivers District Council v Bank of England . But neither Part 24, nor the overriding objective, permits the Court to enter judgment on the basis that the claimant has a strong case, the defence is not likely to succeed, and the time and costs involved in a trial are disproportionate to the potential gains.16. The overriding objective of "deciding cases justly and at proportionate cost" does have a role to play if the Court concludes there is no realistic prospect of a successful defence, and the question arises whether there is "some other compelling reason" for a trial. At that point, the Court would be bound to have regard to considerations such as saving expense, proportionality, and the competing demands on the scarce resources ( CPR 1.1(2)(b), (c) and (e) ). It is rare for the Court to find a compelling reason for a trial, when it has concluded there is only one realistic outcome. The defendant has not suggested that this is such a case. My focus must be on whether it is realistic or fanciful to suppose the claims might fail at trial.” The Claimant’s Submissions Construction

The Claimant’s Submissions

[33]Mr Hornett submits that the court must construe the BLA having regard to the established principles set out in the well-known series of House of Lords and Supreme Court cases, culminating in Wood v Capita Insurance Services Ltd [2017] AC 1173. The principles were summarised by Aikens L.J in Lediaev v Vallen [2009] EWCA Viv 156 at [66] “The key principles can be summarised as follows:(i) the aim of the exercise is to ascertain the meaning of the relevant contractual language in the context of the document and against the background to the document. The object of the enquiry is not necessarily to probe the “real” intention of the parties, but to ascertain what the language they used in the document would signify to a properly informed observer;(ii) the interpretive exercise must not be done in a vacuum, but in the milieu of the admissible background material. That comprises anything that a reasonable man would have regarded as relevant in order to comprehend how the document should be understood, provided that the material was reasonably available to both parties at the time (i.e. up to the time of the creation of the document);(iii) however, evidence of negotiations and subjective intent are not admissible for the purposes of this exercise;(iv) a commercial document must be interpreted so as to make business common sense in its context. But if a detailed semantic and syntactical analysis of a word in a commercial contract is going to lead to a conclusion that flouts business common sense, it must be made to yield to business common sense”.[34]Mr Hornett submits it is beyond sensible argument that the BLA Agreement did not permit (let alone oblige) IPS to pay money out of the IPS Escrow Account but required IPS to retain the money and return it to the claimant at the end of the 21 day period or upon subsequent request:(i) this is what the clear and unambiguous words of the agreement say;(ii) for IPS to be bound it is not necessary that consideration moved to IPS, all that is necessary is that the claimant provided consideration, which he undoubtedly did, see Chitty at [6-40 to 6-42];(iii) the commercial purpose of the use of the Escrow Account was clear: it was to be used as proof of funds to monetize a trading product i.e. the SBLC. This is consistent with the money remaining in the Escrow Account;(iv) the words:
“the Loan Amount will always be held …. solely under the management, control and instruction of Party B” did not permit Biodex to withdraw the funds, but did permit Biodex to use them as proof of funds whilst in the escrow; (v) the words obliging Biodex to participate in: “regulated and non-regulated activities led by major organisations that produce profits to PARTY B as the party in sole control of the LOAN AMOUNT” cannot be construed so as to override the plain words of the other main terms. These words are consistent with using the money as proof of funds but nothing more; (vi) there was an express obligation on Biodex to: “ensure the loan amount remains with [IPS]”; (vii) business common sense dictates that the funds had to be held and retained in the Escrow Account otherwise the use of the IPS escrow account was pointless; the claimant could simply have loaned money to Biodex; (viii) the use of the words “Escrow Account” and “Loan Escrow Party” are significant as Mr Farnell, a solicitor, would know. “Escrow” has a special meaning. Practical Law defines an escrow account as: “A segregated account opened by a third party (the escrow agent) for the purposes of holding cash on behalf of two or more contracting parties until certain agreed contractual conditions for release of the funds from the account have been met”
The OED defines escrow as:
“A bond, deed, etc held by a third party and taking effect only when a stated condition is fulfilled. A deposit or fund held in trust or as security”
A deposit or fund held in trust or as security”

Knowledge and Acquiescence

[35]Mr Hornett says that this is a paradigm case for the imposition of a Quistclose trust. The terms of the BLA restricted IPS from using the claimant’s £1.5m other than for retention as proof of funds and required it to be kept in a particular account (see Snell’s Equity 34th edition at [25-034 – 36]. The Quistclose analysis is relevant to the claim that IPS was a fiduciary and the wider relief sought in the PoC, although Mr Hornett acknowledges that it adds little to the claim in contract.[36]Paragraph 19 of the Defence which appears to rely on the Loan Utilisation provisions of the BLA and the claimant’s knowledge of and acquiescence in use of the funds to rebut the Quistclose Trust claim is confusing and unparticularised. If it is intended to be a construction argument Mr Hornett says it is wrong for the reasons he has already explained.[37]If IPS relies on separate “agreement or acquiescence” by the claimant to the payments being made out of the Escrow Account, Mr Hornett says the case has no realistic prospect of success since:(i) the Defence gives no particulars;(ii) Farnell 1, 2 and 3 and Mr Orbell’s statement contain no proper evidence that the claimant knew of or consented to the payments being made out of the account;(iii) the claimant’s witness evidence and the documents he exhibits contradict any case that he was aware money had been paid out of the Escrow Account or that he agreed to or acquiesced in it. He asked for the return of the money in December 2023 and has consistently repeated his request ever since;(iv) nowhere in any of his communications with the claimant does Mr Farnell allude to the possibility that he had caused the escrow monies to be paid away or that the claimant knew that was the position;(v) Mr Farnell’s email of 24 November 2023 to Biodex confirming the monies remained in the Escrow Account was plain wrong as the author and recipient of the email knew. The only purpose this communication can have had was to provide false comfort to the claimant;(vi) the circumstances of the making and responding to the Part 18 Request are only consistent with the claimant having no prior knowledge of any of the payments made out of the Escrow Account.

Variation or Estoppel

[38]Mr Hornett submits that this line of defence has been raised at the eleventh hour and has all the hallmarks of an attempt by Mr Farnell to make the case look more complicated and difficult than it really is for the purpose of resisting a summary judgment application.

Evidence of Variation

[39]There is no evidence of any variation, forbearance or estoppel and nor is there any reasonable prospect of any such evidence emerging at trial.(i) Mr Farnell does not suggest that he and the claimant had any direct communications in which any variation, forbearance or estoppel was created;(ii) IPS relies solely on Mr Orbell’s letters and his 28 July witness statement;(iii) the email from Mr Orbell dated 8 July 2025 and the letters dated 15 July 2025 and 23 July all post-date the issue of proceedings and the issue of the present application;(iv) the 8 July email was only produced late on 22 July. Curiously it was sent to an email address of “Glenn Thomas” (one of the payees of the funds paid out) and reads:
“Dear Mr.Farnell, I write to confirm I have been in regular contact with Mr. Mahir Choksi and his team, over the past few months, regarding the return of his investment. The result of those conversations is that Mr. Mahir Choksi is aware we are completing on the investment and that Mr. Mahir Choksi has agreed to wait for his monies to be returned to him.”
The agreement to wait would seem to be undocumented and is unparticularised as to time, as to parties and as to words used. It is implausible that the claimant would have agreed to wait while in parallel paying his legal team to pursue these proceedings and this application (v) the 15 July letter simply says that unidentified representatives of the claimant have been updated on the expected return of the investment and that the claimant is “satisfied this will be coming to an acceptable conclusion imminently”; (vi) the 23 July letters purport to confirm that the SBLC had been released to Biodex; (vii) Mr Orbell’s witness statement states that he has been in regular contact with the claimant’s representatives providing updates on the extended timeline for the investment transaction and states that he knows the claimant is aware his monies were used for a trade and did not remain with IPS; (viii) none of this amounts to cogent evidence of an agreement, forbearance or estoppel; (ix) all the communications and emails from the claimant (some of which were copied to Mr Orbell) show he has been chasing the return of his money since December 2023, are completely inconsistent with the existence of any variation, forbearance or estoppel and were never answered by Mr Farnell alleging that the claimant well knew that the money was no longer there; (x) the 1 August 2024 email from Mr Orbell stating that IPS can release the money to the claimant further undermines any agreement or understanding that the claimant was to await the “investment being finalised” earlier than that date; (xi) all there is, is a bare assertion from Mr Orbell that he and the claimant or his “representatives” have reached an oral arrangement that the claimant would await the “investment” coming to fruition. Such an agreement is both inherently implausible and contradicted by the contemporaneous documents; (xii) RTS Flexible Systems Ltd v Molkerel Alois Muller GmbH [2010] UKSC 14 cited in Farnell 1 does not assist IPS. It is accepted that parties might be able to create a legally binding contract by conduct. But that does not avail IPS in this case, where there is no evidence of relevant conduct; and (xiii) if there were any written communications from the claimant that assisted IPS’s position, Mr Farnell should have been able to produce them. IPS’s position is akin to that of Mr Micawber.

Legal Bar to Variation

[40]Mr Hornett submits that in order for there to be a valid variation of a contract, it must be supported by consideration (see Chitty at [26-037] and [6-081-088]). No evidence of any consideration having been provided by IPS has been adduced.[41]If there is no consideration, an agreement to delay or give time can only amount to a forbearance at common law and a forbearance is generally revocable (see Chitty at [6-089 - 6-090]). The issue of proceedings and the pursuit of this application leave no doubt that any forbearance has been revoked.

Estoppel

[42]The remaining possibility is a promissory estoppel. Mr Hornett points out that is not a defence that has been pleaded in the Defence and none of the essential ingredients of an estoppel are present. There is no evidence of any representation, reliance or detriment.

Several Obligations and Waiver of IPS breaches

[43]Mr Hornett submits that even if any agreement or understanding with Biodex could operate in law it is of no assistance to IPS.[44]Under the BLA IPS had an obligation to hold the claimant’s funds in the Escrow Account and return them at the end of the 21-day period. Biodex’s obligation was to use the funds to monetize a trading product, create a SBLC, create profits and return £2m (or £1.5m) and profits to the claimant.[45]The liability was therefore several (see Chitty at [20-001 to 20-003]). IPS and Biodex had separate contracts with the claimant. Even if the claimant had agreed something with Biodex, it would have no effect on IPS’s obligations. Agreeing further time with Biodex would not amount to a forbearance or waiver of performance by IPS by the claimant.[46]IPS had an obligation to keep the claimant’s money in the Escrow Account. It breached this obligation within weeks. As soon as it did so, IPS became liable to the claimant for damages or breach of trust.[47]A person cannot waive or forebear a breach unless they know of the breach (Peyman v Lanjani [1985] 1 Ch.547) and constructive knowledge is not enough (URE Energy v Notting Hill Genesis [2024] EWHC 2537) at [96]. The same is true for promissory estoppel, (Chitty 35th ed [7-035]). A person cannot make a clear representation that they will not enforce their strict legal rights if they are ignorant of the relevant breach of contract or breach of trust that is the subject of the estoppel.[48]In order for IPS to have any conceivable defence based on a subsequent agreement or understanding with the claimant, the claimant needed to have had actual knowledge of IPS’s breaches of contract (and trust) in paying away the funds on the instruction of Biodex, which he did not.

Other compelling reasons for trial

[49]Mr Hornett addressed the four reasons referred to in Mr Farnell’s witness statements as to why the matter should go to trial as follows:(i) a need for disclosure and “review of the documentary trail”. There is no reasonable prospect of any relevant disclosure being produced that would have a material impact on the merits;(ii) a need for expert evidence. There is no basis for supposing that expert evidence will be relevant or even admissible on the issue of the proper construction of the Bridging Loan Agreement. The case of Bank of Ireland v Watts Group [2017] EWHC 1667 (TCC) which is relied on is a surveyors’ negligence case and has no relevance here;(iii) a need for cross examination regarding “understanding of the release conditions and authorization protocols.” The claimant’s subjective understanding is inadmissible and irrelevant to the construction of the BLA. He has given his evidence by witness statement for the purpose of this application and there is no document which contradicts him;(iv) a need for examination of the verification procedures employed. This point is not raised as a defence and it is not clear what it means or how it amounts to a defence. Claimant’s Submissions Construction

Claimant’s Submissions

[50]Mr Jones points out that the BLA is not a very satisfactorily drafted document. He submits that:(i) IPS is not a party to the BLA. The definition of ‘the Parties’ is limited to (a) the Claimant and (b) Biodex. IPS is simply designated as “the Loan Escrow Party”. The signature block of the BLA contains a signature from Mr Farnell ostensibly on behalf of “Party C”, but given that there is no designated “Party C” within the BLA, the meaning and effect of this is uncertain;(ii) the BLA is made as a contract rather than a deed but nothing in the BLA suggests that any consideration has passed to IPS so that it is bound;(iii) because IPS is not a party, it has no express obligations under the BLA. The section headed “Agreement Terms”, includes no undertaking by IPS, the Loan Escrow Party or Party C to do anything;(iv) such reference as is made to the obligations of IPS is incoherent and contradictory: (a) in the section referred to at 14(ii) above it appears that IPS will not allow Biodex to remove the fund from the Escrow Account; (b) in the section referred to at 14(ix) above it appears that IPS confirm that the funds will not be diverted from the Escrow Account and will never be at risk; however (c) other words in the section referred to at 14(ix) above refer to the funds being managed by Biodex to generate profits and to be used for this purpose without exception and to the fund being solely under the management, control and instructions of Biodex(v) it appears that the Claimant never complied with the stated obligation to transfer of £2 million to the loan escrow account, there was only a transfer of £1.5m.[51]Mr Jones submits I must determine whether it is fanciful (rather than realistic) that:(i) the BLA failed to create binding trust and/or contractual obligations undertaken by the Defendant; and/or(ii) the conduct of the claimant as conveyed by his actual or ostensible agent, Mr Orbell varied or acquiesced in a change to the terms of the BLA between the claimant and Biodex, such that the claimant cannot now revert to the 21 day payment requirement agreed in October 2023. And that unless I am confident that IPS has no realistic chance of resisting the claim on either basis, the application should be dismissed.[52]Mr Jones says that the terms of the BLA are an inadequate basis for imposing any duty on IPS owed to the claimant. IPS is not a party to the BLA, there is no reference to consideration passing to IPS such as to bind it to any obligation in the BLA, and there is no express mention that IPS is a signatory.[53]Even though IPS is mentioned in the agreement, there is no express reference to the creation of a trust, or fiduciary duties, or an obligation to account.[54]Use of the word “escrow” is not conclusive. The natural and ordinary meaning of an “escrow” arrangement is that money is transferred into the hands of a party and that party is entitled to distribute the money on satisfaction of certain conditions. The impression given by the use of the word “escrow” is that IPS was entitled to deal with the money once conditions had been met. In the BLA, the apparent conditions were that Biodex directed that the money be paid elsewhere. That is what the reference to the funds being “solely under the management, control, and instruction of PARTY B” means.[55]Mr Jones submits that IPS’s argument on the construction of the BLA is clearly not fanciful and is probably correct.

Estoppel

[56]Further, and separately, IPS argues that, even if the BLA did impose a binding obligation on IPS as at October 2023 to hold the £1.5 million transferred by the claimant in the Escrow Account without any dealing, that obligation was varied by agreement between the claimant and Biodex (the parties to the BLA), and that variation was validly communicated to IPS by Mr Orbell as agent for the claimant. The claimant is estopped from now seeking to go back to the October 2023 deal at IPS’s expense.[57]IPS’s case is that, from October 2023 onwards when directions were given to IPS for the dispersal of funds from the original £1.5 million sum, confirmation was sought that this was agreed by the claimant and such confirmation was consistently given by Mr Orbell. In circumstances where:(a) it was Biodex, not the claimant, who was IPS’s client;(b) it was Biodex who had introduced the arrangement to IPS; and(c) Mr Orbell held himself out consistently as clothed with authority to act on behalf of both Biodex and the claimant (including by arranging the initial transfer to IPS pursuant to an apparent agreement between both parties), it was reasonable for IPS to operate on the basis that Mr Orbell was an agent (actual or ostensible) for the claimant. Mr Orbell never suggested that the claimant had any concerns with the transfers of money. Mr Orbell has confirmed the position in his email and letters of July 2025.[58]Mr Jones says that the passage of time since the expiry of the original 21-day period in 2023 reinforced IPS’s impression that the claimant was content for the original 21-day term of the deal to be varied. IPS argues that what appears actually to have happened is that the claimant went along with Mr Orbell’s scheme to vary the terms of the original lending to chase various opportunities for a return, and kept hoping for the best for a long time, but now has lender’s remorse and wants now to insist on the written terms of the BLA when he has known for years that those terms have been superseded (with his consent). That argument is far from fanciful, and the summary judgment application cannot therefore succeed.

Discussion and Conclusions

[59]The BLA is a classic example of muddled drafting in which “legalese” has been over-deployed, particularly in the sections referred to at paragraphs 14 (i), (ii), (ix) and (x) above, in a way which obscures rather than makes plain the meaning intended by the parties.[60]If the only point on the drafting were that IPS having been defined as the Loan Escrow Party was later referred to as Party C, it would be tolerably clear that Party C should be construed as referring to the Loan Escrow Party and a party to the BLA. However the use of the defined term “the Parties” as a reference to Party A and Party B only, raises a real question whether the Loan Escrow/Party C was really intended to be a party to the BLA. The reality of that question is reinforced by the lack of reference to any express reference to obligations undertaken by the Loan Escrow Party in the section headed “Agreement Terms”.[61]As Mr Jones points out, the terms of the BLA give rise to a doubt or a conflict whether the funds must be kept in the IPS Escrow Account or were able to be deployed at the direction of Biodex. Mr Hornett’s argument that the use of the escrow account set up would be pointless if Biodex could simply direct payment out at a time of its choosing and therefore there must have been a restriction on Biodex’s ability to use the funds has an attraction. However, the counter argument is that there would be little obvious commercial purpose in an arrangement intended to facilitate Biodex making a profitable investment if the claimant’s funds were to sit in a solicitor’s client account and Biodex’s only ability to deploy them would be by pointing to their existence.[62]The BLA is a classic example of muddled drafting in which “legalese” has been over-deployed, particularly in the sections referred to at paragraphs !4 (i), (ii), (ix) and (x) above, in a way which obscures rather than makes plain the meaning intended by the parties.[63]If the only point on the drafting were that IPS, having been defined as the Loan Escrow Party, was later referred to as Party C, it would be tolerably clear that Party C should be construed as referring to the Loan Escrow Party and a party to the BLA. However defining the term “the Parties” as a reference to Party A and Party B only, raises a real question whether the Loan Escrow Party/Party C was really intended to be a party to the BLA. The reality of that question is reinforced by the lack of any express reference to obligations undertaken by the Loan Escrow Party in the section headed “Agreement Terms”.[64]I also consider that the reference to £2m in the BLA as opposed to £1.5m actually deposited by the claimant in the Escrow Account makes no difference to the interpretation of the BLA. Everyone agrees that only £1.5m was deposited and the fact that a lesser sum than originally contemplated was deposited cannot sensibly make a difference to the proper interpretation of the BLA and the duties or obligations it does or does not impose on the persons or entities that are parties to it.[65]As Mr Jones points out, the terms of the BLA give rise to a doubt or a conflict whether the funds must be kept in the Escrow Account or that IPS were able to or were obliged to deploy the funds at the direction of Biodex. Mr Hornett’s argument that the use of the escrow account set up would be pointless if Biodex could simply direct payment out at a time of its choosing and therefore there must have been a restriction on Biodex’s ability to use the funds has an attraction. However, the counter argument is that there would be little obvious commercial purpose in an arrangement intended to facilitate Biodex making a profitable investment if the claimant’s funds were to sit in a solicitor’s client account and Biodex’s only ability to deploy them would be by pointing to their existence.[66]Repeated use of the word “escrow” in the BLA suggests that there was some importance to the term but, given the contradictory words of the BLA, it is difficult to know what the import was.[67]I consider that the lack of consideration moving to IPS would not mean that the BLA was not binding on IPS if it was actually a party. The claimant gave consideration by depositing £1.5m in the Escrow Account and that enables him to enforce any contract with IPS. It also seems that IPS received payment of its fees from the monies in the Escrow Account which would at least arguably amount to consideration moving to IPS, although not by reason of the terms of the BLA.[68]These uncertainties of construction lead me to conclude that the construction question should go to trial for the trial judge to carry out the necessary interpretive exercise in the context of the admissible background material relevant to comprehend how the document should be understood. The BLA is a commercial document and its interpretation must make business common sense in the context of how Biodex was to make the investment to yield profits for the benefit of the claimant and the role IPS was to play.[69]I have considered whether it would be right to enter summary judgment against IPS for the amounts of its legal fees paid out of the claimant’s funds on the basis that those payments, at least to the extent used to pay invoices concerning matters not the subject of the BLA, would not appear to have been used to secure or generate profits to the claimant. However to do so would pre-empt a determination of what the BLA means by Bidoex having sole control of the funds and the evidence is not clear what invoices were actually discharged by the claimant’s funds.[70]I am conscious of the warnings of Mummery J in the Doncaster case and Mr Farnell’s very late meaningful engagement with the claim against IPS. However, I consider that the construction argument advanced by Mr Jones on behalf of IPS has a realistic prospect of success and that this is not a case where the construction point can be summarily determined.

Knowledge or Acquiescence or Variation or Estoppel

[71]If IPS were contractually bound by the BLA to retain the claimant’s funds in the Escrow Account, I do not consider that IPS would be saved from the entry of summary judgment by its case on knowledge , acquiescence, variation or estoppel.[72]Mr Farnell’s email of 24 November 2023 to Biodex confirmed the funds were in the Escrow Account. The claimant first asked for the return of his funds in December 2023 and has continued to press for their return. The terms of Mr Orbell’s email of 1 August 2024 are consistent only with the funds still being with IPS at that time and not consistent with any agreement or understanding that the claimant was content to wait for the return of funds until Biodex’s investment was concluded. Any agreement or understanding between Mr Orbell and the claimant’s representatives, as referred to in Mr Orbell’s witness statement or the July 2025 correspondence, could not have been reached earlier than August 2024 and nor is it plausible that the claimant had been told that the funds did not remain in the Escrow Account before that date. There is no documentary evidence that the claimant was aware of the funds having been used at Biodex’s direction before 14 February 2025 when he was provided with the relevant bank statement and no documentary evidence of any agreed variation of terms. That any agreement was reached by the claimant or his representatives, which he denies, with Mr Orbell or Biodex to await the finalisation of the investment before his funds were to be returned is highly improbable, given the contemporaneous documents and the claimant’s conduct since December 2023.[73]To amount to a valid variation of a contract with IPS on which IPS would be able to rely consideration would be needed and there is no evidence or suggestion of any consideration moving from IPS.[74]Further there is no reason why any agreed variation with Mr Orbell would be effective to vary any several contractual obligation owed to the claimant by IPS to return the funds.[75]Even if it is right that Mr Orbell made the claimant aware of the payment away of the fund in the Escrow Account at some point after August 2024, there is no material from which it may plausibly be deduced that the claimant acquiesced in IPS’s breach of a contractual obligation owed to the claimant to retain the funds in the Escrow Account before the issue of these proceedings.[76]I consider that IPS’s argument that there was any enforceable variation of a contractual obligation on the claimant to return the funds after 21 days, is fanciful. An argument based on knowledge of any breach of contract by IPS and acquiescence in that breach is also fanciful given the contemporaneous documentation and the claimant’s persistent conduct in seeking the return of his funds.

Other Reason For Trial

[77]Given my conclusion on the construction question there will be disclosure and witness evidence and in due course cross examination about the commercial context in which the BLA is to be construed. If IPS run their other defences to trial I am doubtful that any further documents will be disclosed or witness evidence adduced which would strengthen those arguments, because it seems likely that any such documents or evidence would be available to IPS now and therefore could have been deployed on the present application.[78]I am, however, extremely doubtful that expert evidence will be necessary in a case such as the present. I am also extremely doubtful, contrary to Mr Farnell’s witness evidence/submissions, that evidence about either release conditions, authorisation protocols or verification procedures will be relevant to the issues that will need to be decided at trial.

Addendum

[1]Farnell 2 contains references to a number of cases that have wrong citations, wrong names or which simply do not exist. A number of the cases cited are wholly irrelevant and do not support the proposition in support of which they are cited. Some of this material was relied upon in correspondence with CRS in the weeks prior to the hearing. CRS spent time and cost investigating the material and challenging IPS about its relevance and veracity. CRS prepared a comprehensive letter to IPS requesting explanations dated 23 July 2025. The letter was accompanied by a schedule listing the 12 citations in relation to which an explanation was sought. No response was sent to CRS before the hearing.[2]On 25 July I sent out a direction that “Mr Farnell is to file and serve an indexed (with correct citations) pdf bundle of copies of reports of all cases referred to in his second witness statement (save if it is agreed between advocates that any such case is to appear in an agreed common bundle of authorities to be filed for the hearing). The index of Mr Farnell's bundle should make clear whether any of the cases referred to by Mr Farnell does not exist as suggested by C's skeleton argument. Mr Farnell's bundle is to be filed and served by no later than 4pm on Monday 28 July.” Such a bundle comprising reports of 17 cases and running to 655 pages was filed but only on the morning of 30 July. It included a final page listing 6 cases described as “No. Case Name (as cited)”.[3]The Administrative Court has given a very clear warning about the misuse of AI and the misleading citation of authorities in Ayinde, R (On the Application Of) v London Borough of Haringey [2025] EWHC 1383 (Admin) (06 June 2025).[4]At the hearing I directed that Mr Farnell and the member of his team responsible for drafting Farnell 2 file witness statements explaining how they came to include this material.[5]Mr Justice Okafor, a paralegal with IPS filed, a witness statement dated 4 August 2025. He explains that he was responsible for drafting Farnell 2 and collating the legal authorities there referred to. At paragraph 2.2 of the statement he states that the references in Farnell 2 were drawn from an internal research memorandum not prepared by him, but which it was his responsibility to check. Later in his statement he goes on to explain that part of his research was conducted using the AI Overview section that Google returns as a feature of searches, not understanding its limitations. He says that IPS Law has adopted new measures to ensure higher accuracy and quality control of legal references in court documents.[6]Mr Farnell filed a witness statement dated 5 August 2025. He says that his legal practice relies on work carried out by qualified legal professionals rather than automated systems and that Farnell 2 was an isolated instance representing unprecedented and unintentional departure from usual rigorous verification standards and that there was no intention to mislead the Court or the Defendant [sic]. The statement includes an apology to the Court and to the Defendant [sic]. The witness statement refers to Mr Farnell repeatedly requesting that Mr Okafor verify the case citations in Farnell 2. The witness statement does not refer to Mr Okafor’s explanation that his research included using the Google AI Overview feature in his research or explain why Mr Farnell, as the deponent of Farnell 2, did not feel it necessary to explain that the source of his legal submissions was the research of another person and not personally verified by him. The witness statement also refers in very general terms to “corrective measures” at IPS implemented as of 30 July 2025 including a mandatory three-tier verification system and maintenance of a verification log documenting the source and date of each case law check. No documentary evidence of these corrective measures is exhibited.