Richard Graham Doubtfire v Timothy Michael Horrell [2026] EWHC 2173 (Ch)

[2026] EWHC 2173 (Ch)Case No BR-2025-001217IN THE HIGH COURT OF JUSTICECHANCERY DIVISIONBUSINESS AND PROPERTY COURTS OF ENGLAND AND WALESINSOLVENCY AND COMPANIES LIST (ChD)Venue Royal Courts of Justice, Rolls Building, Fetter Lane, London, EC4A 1NLDate 21/08/2026
Before
CHIEF INSOLVENCY AND COMPANIES COURT JUDGE BRIGGS
Between
RICHARD GRAHAM DOUBTFIREApplicantTIMOTHY MICHAEL HORRELLRespondent
STEVEN MCGARRY (by Direct Access) for ApplicantMILLIE RAI (instructed by Cripps LLP) for RespondentHearing Hearing dates: 30 July, 11 August 2026
Approved JudgmentThis judgment was handed down remotely at 10.30am on 21 August 2026 by circulation to the parties or their representatives by e-mail and by release to the National Archives..............................CHIEF INSOLVENCY AND COMPANIES COURT JUDGE BRIGGS

Chief ICC Judge Briggs:

[1]The Application before the court is to set aside a statutory demand dated 7 July 2025 (the “Statutory Demand”) served on Mr Doubtfire (“D”) by solicitors instructed by Mr Horrell (“H”).[2]The Application of D was issued on 17 July 2025. The Statutory Demand is founded upon a personal guarantee and indemnity given by D in respect of the liabilities of Silversword Developments Limited (“Silversword”), of which he was a director.[3]D resists the demand upon two distinct footings. The first is that the guarantee is vitiated by duress or undue influence, and is accordingly liable to be rescinded, so that the debt is disputed upon substantial grounds within rule 10.5(5)(b) of the Insolvency (England and Wales) Rules 2016 (the “Rules”). The second is that he has cross-claims against H in defamation and in unlawful means conspiracy which equal or exceed the sum demanded, within rule 10.5(5)(a). Reliance was also placed, in the alternative, upon the residual jurisdiction under rule 10.5(5)(d) of the Rules.[4]It is convenient to record at the outset what is not in dispute. It is not in dispute that H advanced monies to Silversword, that Silversword failed to repay the loan according to its terms, that a demand for repayment was made and went unanswered, Silversword has entered creditors’ voluntary liquidation, and that D executed the guarantee. Silversword has at no stage advanced any dispute as to its liability.

Background

[5]Background D and H are both businessmen and property developers. Their dealings encompassed two separate ventures, and it is necessary to keep them distinct.[6]The first venture concerned Silversword, which was engaged in property ownership and development and whose shares were held by MFC Management Ltd, an entity owned by D’s family. On 6 October 2023 H entered into a loan agreement with Silversword under which he agreed to advance a maximum of £250,000, repayable on 6 April 2024 (the “Loan Agreement”). Clause 15.8 provided that the taking of any step towards the winding up of Silversword, or towards the appointment of a liquidator, constituted an Event of Default.[7]On the same date, 6 October 2023, D executed a personal guarantee and indemnity in respect of all present and future payment obligations of Silversword under the facility (the “Guarantee”). Clause 2.1 provided that D agreed to pay on demand any sums guaranteed “whenever [Silversword] does not pay the Guaranteed Obligations” which include all present and future payment obligations of Silversword.[8]D entered into the Guarantee with the benefit of independent legal advice obtained from Jury O’Shea LLP. On 5 October 2023, the day before execution, he wrote to his solicitors in terms which included the observation that he was sure the agreement and personal guarantee “should and is fair”.[9]On 19 August 2024 H presented a winding-up petition against Silversword upon its failure to repay. That petition was compromised and dismissed by consent. As part of the settlement the maximum facility was increased to £370,071.00, although no further monies were in fact advanced. By an amendment and restatement agreement dated 24 December 2024, executed by D, H and Silversword, expressed to take effect on 16 January 2025, Silversword, D and H confirmed that the Guarantee would continue in full force and effect in all respects.[10]On 11 April 2025 Forvis Mazars wrote to Silversword’s known creditors, H among them, stating that they had been instructed by the directors to assist in placing Silversword into creditors’ voluntary liquidation. On 15 April 2025 H, by his solicitors, demanded that Silversword pay all sums due, and on 16 April 2025 he demanded of D under the Guarantee the sum of £399,772.00. Neither demand was met, in whole or in part. Silversword entered creditors' voluntary liquidation on 28 April 2025.[11]It is common ground that the effect of the Event of Default was to render the sums then outstanding under the Loan Agreement, as amended, immediately due and payable. I was not taken to the provision which produces that result but understand it is clause 15.14. As no party has suggested that anything turns upon its terms, I proceed upon the footing that both parties have adopted.[12]The second venture concerned ACM-47 Guildford Road Limited (“ACM”), a special purpose vehicle incorporated to acquire and develop the site of a former public house known as The White Hart, 47 Guildford Road, Bagshot (the “Property”). D had known Mr Farhad Nouri for some fifteen years, and it was Mr Nouri who introduced him to H in or about December 2021. D, H and Mr Nouri became directors of ACM, and ACM purchased the Property on or about 22 March 2022. ACM had the benefit of a loan facility provided by West One Loan Limited (“WOLL”). The WOLL loan matured in September 2023. In September 2023 ACM entered into a loan facility with H (the “Horrell Loan”), secured by a debenture. The purpose of the Horrell Loan was to repay the loan made by WOLL.[13]Planning permission for the site was granted on 24 July 2024, for four dwellings rather than the six which had been hoped for. That materially altered the economics of the project. The Horrell Loan became due on 23 September 2024. It was not repaid on the due date.[14]On 13 January 2025 a meeting of directors was convened where it was resolved to sell the Property. D did not attend the meeting. The minutes of the meeting recorded his attendance.[15]On 24 February 2025 D sent a letter of claim to Mr Nouri. The letter is not before the court. I understand it is substantially the same as a pre-action letter sent to H shortly before the service of the Statutory Demand.[16]On 12 March 2025 H in his capacity as a holder of a qualifying floating charge appointed, out of court, administrators.[17]As I have alluded to above, the matters relating to ACM are relevant only because D relies on dealings in respect of ACM to support his application to set aside the Statutory Demand made in relation to the Guarantee he entered in respect of Silversword. He does so by claiming defamation and unlawful means conspiracy that is mostly directed at selling the Property at an undervalue.[18]Returning to Silversword and the Guarantee, by a letter of 13 May 2025, D contended that the Guarantee had been given under duress or undue influence. That was some nineteen months after execution, some five months after the reaffirmation of December 2024, and some four weeks after demand.[19]On 21 June 2025 D sent a pre-action letter alleging defamation, founded upon an e-mail sent by H on 2 April 2025 to Mr Gavin Diamond and Mr Owen Bentley of Inspired Lending (the “Inspired Lending Email”). H, who wrote the Inspired Lending Email, asked a question of Mr Diamond and Mr Bentley following a pre-amble:
“Silversword has had a loan with me since October 2023 which got converted to an amendment and restatement agreement after agreeing to extend the loan until 3rd quarter of this year due to Silversword’s inability to pay…I wanted to know whether these unsecured loans were declared to you, the only reason is Richard Doubtfire was in the process of sorting a new mortgage for the whole of MFC Group and our loans were declared, however they were going to be cleared directly from the lender on completion. The loans were both due for repayment at the end of August and combined will be in excess of £550,000. On the basis of my previous comments re being paid directly from the lender, were we supposed to have been paid from Silversword on completion of your loan.”
[20]On 30 June 2025 D sent a further pre-action letter which raised the unlawful conspiracy claim. The letter runs to some seventeen pages, in which the Inspired Lending Email is cited as an act said to have been done in furtherance of the alleged conspiracy (combining defamation and the unlawful means conspiracy claims). I set out the passage of the letter relied on at the hearing:
“On the 6th October 2023 and against my better judgment, and indeed under duress and undue influence, I entered into a guarantee and indemnity with you. Those concerned the borrowings of another company names Silversword Developments Limited of which I was a sole director. You subsequently issued me with a Pre-Action Letter of Claim in respect of that matter, on the 15th April 2025, stating that £399,772.00 was owed to you by me as guarantor of [Silversword]. I do not believe that this personal guarantee is enforceable…planning permission had in fact been granted for 4 houses as long ago as the 24th July 2024. It is my belief that you were aware of the granting of planning permission back in July 2024, but did not disclose this information with me…Had I known that the company’s planning application had been granted for only 4 houses on 24 July 2024, I would have discussed the matter with the other directors and shareholders and would (sic) applied for development finance with Acre Land and A Shade Greener, who are financial institutions…In your e-mail of 10th January 2025 timed at 10:37 you stated in part “…As you know, we need agreement from all shareholders to sell the SPV, however, if we don’t get that approval, the Directors can force the sale with a majority vote”…my claim is founded on the Tort of Conspiracy by Unlawful Means which requires 1. A combination or agreement between two or more individuals 2. At attempt to injure me 3. Acts carried out pursuant to the agreement with that intention 4. Resulting loss and damage to me.”
[21]In the letter D states that H took advantage of his vulnerability which appears to feed, in part at least, the claim of undue influence.[22]In July 2025 the administrators appointed in respect of ACM sold the Property.[23]On 28 July 2025 D applied for pre-action disclosure in respect of the intimated conspiracy claim. That application was dismissed by Deputy District Judge Ginesi on 26 February 2026 after a hearing that occupied a day. Permission to appeal was refused by her orally, refused again by the appellate court on the papers by order of 27 March 2026, and a renewed oral application was listed for 10 August 2026. At the time of writing this court has not been informed about the outcome of the oral application.[24]Other than the Inspired Lending Email, the documentary evidence said to support D’s claim of undue influence or duress is “the enormous number of WhatsApp messages and emails” and in particular messages sent in November and December 2024. Those messages were not produced at the hearing and in any event post-date the execution of the Guarantee.[25]No evidence of D’s medical vulnerability is before the court.

The legal framework

[26]The legal framework Rule 10.5(5) of the Rules provides, so far as material, that the court may grant an application to set aside a statutory demand if:
“(a) the debtor appears to have a counterclaim, set-off or cross demand which equals or exceeds the amount of the debt specified in the statutory demand; (b) the debt is disputed on grounds which appear to the court to be substantial; ... (d) the court is satisfied, on other grounds, that the demand ought to be set aside.”
[27]In applying rule 10.5 (5) of the Rules the courts have formulated guidance. In respect of Rule 10.5(5)(a) the cross-claim must be one which can be characterised as genuine and serious, or of substance and the characterisation is evaluated on the evidence: Ashworth v Newnote [2007] EWCA Civ 793 [35]. It is therefore incumbent upon the debtor to demonstrate with evidence that his cross-claim is of substance, and neither bare assertion nor a “cloud of objections” contrived to justify factual enquiry will suffice.[28]The evaluative exercise will take account of any delay in prosecuting a cross-claim. The court may draw an adverse inference unless the delay is justified or explained to the satisfaction of the court. It is open to the court to reject evidence because of its inherent implausibility or because it is contradicted by or not supported by the documents: Ashworth v Newnote [2007] EWCA Civ 793 [34] citing National Westminster Bank plc v Daniel [1993] 1 WLR 1453, 1456-7; Portsmouth v Alldays Franchising Ltd [2005] BPIR 1394, [12].[29]In respect of rule 10.5(5)(b) the evaluative exercise I have explained above applies equally. A dispute is substantial only if it has “realistic prospect of success”: Ashworth v Newnote [2007] EWCA Civ 793 [33].[30]Rule 10. 5(5)(d) provides a residual discretion which will normally be exercised to prevent an injustice. The discretion is not unfettered. It is to be exercised judicially and in accordance with authority. In Re a Debtor [1989] 1 WLR 271, [276D], the court explained that the approach to sub-paragraph (d) is to ask whether the applicant can show “a substantial reason comparable to the sort of reason one sees in paras (a), (b) and (c) of r 6.5(4), why the demand ought to be set aside”. See also Budge v A.F.

(a) ”

[31]Mr McGarry submitted, and I accept, that the court must not conduct a mini-trial. That principle, however, has a defined content, and it is important to be precise about it, because it has been pressed rather further in argument than authority permits. The court may not resolve a conflict of testimony, prefer one witness’s account of a conversation to another’s, or determine a contested question of past fact upon the balance of probabilities. There are limited circumstances where the court does not need to cross the line into the balance of probabilities to determine if the evidence is genuine. I have previously mentioned Portsmouth v Alldays Franchising Ltd [2005] BPIR 1394. Paragraph 12 of the judgment is worth citing:
“the mere fact that a party in proceedings not involving oral evidence or cross-examination asserts that certain things did or did not occur, is not sufficient in itself to raise a triable issue. That evidence inevitably has to be considered against the background of all the other admissible evidence and material in order to judge whether it is an allegation of any substance.”
[32]The court may also decide a short point of law or of construction where it has the necessary material and the parties have had a proper opportunity to address it; it may rely upon the documentary record and the chronology which that record establishes; and it may take the debtor’s evidence at its highest and ask whether, even upon that footing, the minimum evidential threshold has been met. I have confined myself to these principles, and I have determined nothing which required me to decide whether any contested account is true by crossing the balance of probabilities line.

Duress and Undue Influence

[33]Duress and Undue Influence D has not shown that the Guarantee is disputed upon grounds which are substantial. The reasons are as follows. It is not clear if D is relying on actual undue influence or presumed. Actual undue influence is where actual undue pressure can be proved, without the aid of a presumption, and a presumption can only arise where there was an existing relationship of influence between the parties and the transaction is one that calls for an explanation: see Royal Bank of Scotland v Etridge (No 2) [2001] UKHL 44[34]The evidence adduced in support of actual undue influence is confined to a bare assertion. The whole of D’s evidence upon the point is at paragraph [6.3] of his first witness statement where he states that it is his case that the Guarantee was entered into under duress or undue influence. That is a statement of the conclusion contended for, not of the facts said to give rise to it. It identifies no threat, no occasion upon which any threat was made, no words used, no relationship of trust and confidence, and no respect in which any pressure operated upon his mind. The letter of 13 May 2025, although considerably longer, does not repair the deficiency: it asserts that H enquired about D’s vulnerability and thereafter exercised undue influence and duress, and it asserts that they threatened his financial ruin again and again if he did not sign, but it does not descend to a single particular. A minimum evidential threshold must be crossed before it can be said that there is a substantial dispute, and assertion, however often repeated and however emphatically expressed, does not cross it.[35]The documents relied upon as evidencing pressure do not bear upon the making of the Guarantee because they post-date it. The documents consist of correspondence and messages passing between the parties after 6 October 2023. Whatever their tenor, they cannot have operated upon D’s decision to execute an instrument which he had already executed. That is not a finding as to whose account of those exchanges is to be preferred; it is a matter of the calendar, and it is dispositive. Read as a whole, and taken at D’s highest, the material demonstrates a lender pressing with increasing insistence for repayment of monies which were due and which were not being paid. A creditor who presses for payment of a debt which is owed does not thereby exert illegitimate pressure.[36]Causation is an essential element of duress, the illegitimate pressure being required to have had a causal effect upon the decision to contract, and material which came into existence only after the decision was taken cannot supply it.[37]Conversely the contemporaneous record points firmly the other way. D is an experienced businessman and property developer. He instructed and took advice from Jury O'Shea LLP. On the eve of completion he wrote to his own solicitors, in a private communication which he can have had no expectation would be deployed against him, describing the arrangement as fair. D’s experience, the advice he took and the communication all point directly toward free will.[38]In his first witness statement in support of the Application to set aside the Statutory Demand, D explains that he has spent a large part of his life working with financial institutions. I infer from his witness statement that D understood the inherent risk of borrowing.[39]In Pao On v Lau Yiu Long [1980] AC 614, a Privy Council case on appeal from Hong Kong, Lord Scarman giving the judgment of the Board, agreed with earlier authority to the effect that in a contractual situation commercial pressure is not enough. There must be present some factor which could in law be regarded as a coercion of his will so as to vitiate his consent. D’s evidence does not stand this test.[40]Lord Scarman identified [635] as material to the enquiry whether the person said to have been coerced protested, whether he had an alternative course open to him, whether he was independently advised, and whether after contracting he took steps to avoid the contract.[41]Each of the indicia on which there is documentary evidence before me points against D. He did not protest. He was independently advised. He took no step to avoid the Guarantee for some nineteen months, and then only after demand had been made. And in December 2024, again with the benefit of advice and again without protest, he joined in an agreement confirming that the Guarantee should continue in full force and effect in all respects.[42]So far as the case is put in undue influence, no relationship capable of giving rise to it is identified. D and H were commercial counterparties dealing at arm’s length, the one seeking finance and the other providing it. Mr McGarry’s reliance upon the proposition that suretyship may in appropriate circumstances give rise to relationships of undue influence does not advance matters, because that principle is concerned with the influence of a debtor over a surety who stands in a relationship of trust or dependency with him, and not with the relationship between the surety and the lender. In short, the basis for equitable intervention is not a wrongful act by the dominant party (abusive e-mails in this instance), but rather that it is public policy to prevent the relationship that exists between parties, and the influence arising from that relationship, from being abused: Allcard v Skinner (1887) 36 Ch D 145.[43]Nor is the invocation of manifest disadvantage of assistance. The concept of manifest disadvantage did not survive RBS v Etridge (No 2). The Guarantee secured a facility of £250,000 advanced to a company of which D was a director and in whose fortunes his family’s holding company was interested, is an ordinary incident of directors’ guarantees and not a transaction that calls for explanation.[44]I have considered whether the assertion of vulnerability and mental health difficulties, and of H’s knowledge of them, might of itself carry the matter across the legal threshold. Ms Rai forcefully submitted that there was no evidence even though it was promised in correspondence more than a year ago. Mr McGarry was not able to respond to the submission. Had there been evidence, medical or contemporaneous, of a condition affecting D’s capacity to make commercial decisions in October 2023, and of H’s knowledge and exploitation of it, the position might have been different. There is none. The assertion stands alone and unsupported, and it stands alongside the fact that D was at the material time conducting substantial property transactions and instructing solicitors upon them.[45]It follows that the case upon duress and undue influence is a bare assertion of the character which is unsubstantial, contradicted by the contemporaneous documents and unsupported by any material capable of establishing that illegitimate pressure operated upon D’s entry into the Guarantee. It does not have a realistic prospect of success, and it carries no degree of conviction such that it can be said it is genuine. The debt is not disputed upon grounds which appear to me to be substantial within rule 10.5(5)(b).

Defamation and the Cross-Claim

[46]Defamation and the Cross-Claim The defamation cross-claim is not a genuine and serious cross-claim, and in any event is not shown to equal or exceed the sum demanded. The reasons are as follows.[47]Firstly, it is convenient to record what I do not decide. Ms Rai submitted that the cross-claim lacks mutuality, because the Inspired Lending Email concerns the affairs of Silversword, so that any damages would be recoverable by Silversword and not by D. I do not accept that submission. The e-mail names D personally, refers to his own arrangements for a new mortgage for the MFC Group, and the innuendo for which he contends, namely that he was insolvent or was concealing liabilities from a prospective lender, is one which is personal to him. Nor do I rest anything upon Ms Rai’s alternative submission that H would succeed upon a defence of truth under section 2 of the Defamation Act 2013. Whether the sting of the e-mail is substantially true is a contested question which could only be resolved by determining, upon the balance of probabilities, what the words meant and whether what they meant was so.[48]Secondly, the cross-claim founders upon serious harm. By section 1(1) of the Defamation Act 2013 a statement is not defamatory unless its publication has caused or is likely to cause serious harm to the reputation of the claimant.[49]In Lachaux v Independent Print Ltd [2019] UKSC 27, [2020] AC 612 at [12] and [14], the Supreme Court held that the Act altered the common law. The common law presumed damage to reputation, but did not go so far as to assume serious damage. Therefore, the least that s.1 achieved was to introduce a new threshold of serious harm that did not previously exist. A statement that would previously have been regarded as defamatory because of its inherent tendency to cause some harm would no longer be so regarded unless it had caused, or was likely to cause, serious harm.[50]Accordingly whether the statement had caused or was likely to cause serious harm is a proposition of fact that could be established only by reference to its actual impact, not just the inherent meaning of the words themselves. It depends on a combination of the inherent tendency of the words and their actual impact on those to whom they were communicated.[51]D adduces no evidence of serious reputational harm caused, or likely to be caused, by the Inspired Lending Email, which is written in the form of a question. He does not say that Inspired Lending declined to lend by reason of the e-mail.[52]The single document relied upon is another email from Hampshire Trust Bank of 6 March 2025:
“Dear Richard…I’m afraid that I am not supportive and wish for you to repay the Bank in full…In terms of reasoning; a) This is in line with the Terms of the Loan. b) the Bridge Loan is realising net £2,095,000 and the Banks is a first ranking secured creditor. Why should the Bank waive fees due to it when presumably all other Creditors are being repaid in full. Many of these Creditors have charge you penal rates of interest and fees. The Bank has not…d) the Loan Interest has not been met, which is a further default. HTB Bridging Team is not able to assist…”
[53]In my judgment(i) the text of the letter of 6 March from Hampshire Trust Bank does not provide an evidential basis for the allegation made by D and(ii) it precedes the alleged harmful publication which was made on 2 April 2025.[54]Thirdly, the cross-claim is wholly unquantified. Rule 10.5(5)(a) requires a cross-claim which equals or exceeds the amount of the debt specified in the demand. D has neither particularised nor quantified the damages he claims, and has adduced no evidence from which the court could form any view as to their order of magnitude. A cross-claim of unascertained value cannot be shown to equal or exceed the Statutory Demand.[55]Fourthly, the defamation claim adds nothing to the conspiracy claim, and it is instructive that D’s own pre-action letter of 30 June 2025 recites the Inspired Lending Email as an act done in furtherance of the alleged conspiracy. Whether the email is examined as an independent tort or as an element of the conspiracy, it fails for the reasons given: there is no evidence that it caused D any harm at all.[56]Accordingly the defamation cross-claim is not one of substance. It is a bare assertion of harm unsupported by evidence, and any loss that is said to arise is not shown to equal or exceed the amount specified in the demand.

Unlawful Means Conspiracy

[57]Unlawful Means Conspiracy Before turning to the merits I must address Mr McGarry's submission that an issue estoppel arises from the judgment of Deputy District Judge Ginesi of 26 February 2026, in which she observed (to summarise) [36] that, upon the one-sided evidence of the applicant, there was an arguable case, subject to matters of causation or loss.[58]The application before DDJ Ginesi was dismissed, so that the observation formed no part of the foundation of any order made in D’s favour. The question before her was whether the threshold conditions in CPR 31.16(3) were met, which is a different question from whether D has a genuine and serious cross-claim in a sum equalling or exceeding the demand. It is instructive that the Deputy District Judge’s observation was in terms qualified by the reservation of matters of causation or loss, which is a ground upon which the cross-claim, in my judgment, must fail.[59]It is also worthy of comment that the order of the Deputy District Judge did not declare the cause of action existed and was complete. By extension the existence of the cause of action may be challenged by either party in subsequent proceedings. Nor is it suggested that any cause of action merged in a judgment or was otherwise conclusively determined. An issue estoppel arises only where the issue decided was necessary and fundamental to the decision, and it is only the immediate foundation of the judgment, not the wider reasoning, which can give rise to it: Skatteforvaltningen v MCML Ltd [2026] UKSC 19 [40-50]. Mr McGarry would need to answer the question, that has the law forbidden to run in another court? Mr McGarry cannot claim that an actionable unlawful means conspiracy could not be scrutinised by this court. For these reasons I reject the plea of issue estoppel.[60]The issue estoppel argument claim fed, at least on the papers, a request for an adjournment. It was not clear to me whether the adjournment mentioned in the papers was pursued in opening, and no mention of an adjournment was made in closing. Insofar as it was a live issue, I decline to adjourn this application.

The alleged conspiracy

[61]The alleged conspiracy By reference to Kuwait Oil Tanker v Al Bader [2000] 2 All E.R. (Comm) 271 and FM Capital Partners Ltd v Marino [2018] EWHC 1768 (Comm) at [93-95] ICC

Judge Greenwood explained in Martin v McLaren Construction Limited [2025] EWHC 406 [70]:

“A conspiracy to injure by unlawful means is actionable where the claimant proves that he has suffered loss or damage as a result of unlawful action taken pursuant to a combination or agreement between the defendant and another person or persons to injure him by unlawful means, whether or not it is the predominant purpose of the defendant to do so”
[62]Summarising the ingredients of a claim in unlawful means conspiracy as: i) a combination or agreement between a given defendant, and one or more others; ii) an intention to injure the claimant; iii) unlawful acts carried out pursuant to the combination or agreement as a means of injuring the claimant; iv) causing loss suffered by the claimant.[63]The material before me provides no substantial evidential basis from which a combination or agreement between H and Mr Nouri could realistically be inferred. The reasons are as follows.[64]Firstly, the commercial interests of the alleged conspirators were aligned with D’s own, not opposed to them. H, D and Mr Nouri each hoped that the ACM project would obtain planning permission for six dwellings and would be built out profitably. H had advanced money into the venture and had lent to it. Mr Nouri stood to receive a share of the profits if, and only if, the development came to fruition. Each of them therefore had an obvious and substantial commercial interest in the success of the project, and none had any evident interest in its failure.[65]Secondly, what in fact altered the position was not any act of H (or Mr Nouri) but the decision of the planning authority. Permission was granted on 24 July 2024 for four dwellings rather than the six hoped for. That changed the arithmetic of the development and, with it, the prospects of ACM servicing its borrowing. A commercial venture which fails because a planning authority grants less than was hoped for does not become a conspiracy because one of the participants thereafter enforces his security.[66]Thirdly, Mr Nouri stood to gain nothing whatever from the enforcement of H’s loan. He was not the lender. He had no security. The recovery of H’s advance from ACM’s assets conferred no benefit upon him and deprived him of the profit share for which he had been working. The suggested combination therefore requires the court to accept that Mr Nouri agreed to bring about an outcome which was, upon the material before me, contrary to his own financial interest, and no reason is offered why he should have done so. To put this another way, there is no evidence that they shared the same object which negates any inference or assertion that they were acting in concert at the time of the acts complained of: Kuwait Oil Tanker at [111].

Intention to injure

[67]Intention to injure The necessary intent to injure may be inferred but an inference cannot be made from thin air. Primary facts are required. Mr Nouri stood to gain nothing from the failure of the development and H was at risk of loss. The difference between H and Mr Nouri is that H had taken security to reduce risk and guard against loss. D, H and Mr Nouri had hoped to gain from the venture and may have gained had it not been for the planning permission constraints. These primary facts do not rationally support an inference of an intent to injure D.[68]Further, the chronology tells against an intention to injure. The board minutes upon which D principally relies are dated 13 January 2025. The relevant enforcement in relation to ACM was not the later demand made in respect of Silversword, but H’s appointment of administrators over ACM in March 2025 pursuant to his debenture. The appointment followed ACM’s default under the Horrell Loan. That chronology is more consistent with the exercise of a secured creditor’s contractual and statutory rights following default than with a prior combination to injure D.

The unlawful act

[69]The unlawful act As the case was advanced at the main hearing, the cross-claim did not identify any unlawful act with sufficient particularity. Unlawful means are an essential element of the tort, and while they need not be independently actionable, they must be identified before the court can conclude that the alleged cross-claim is genuine and serious. I deal in the postscript with the later attempt to rely on a breach of the ACM shareholder agreement.[70]It is sufficient to say at this point that neither the pre-action letter of 30 June 2025 nor D’s witness statements identify the act said to be unlawful.[71]The argument is centred on the convening of a company meeting where D received less than seven days’ notice. The meeting took place on 13 January 2025, however breach (unlawful act) is unsupported by any evidence of a notice requirement, and no such requirement appears in ACM’s articles of association, which are publicly filed.[72]D complains that the minutes wrongly recorded D as present at the meeting when he was not. It raises a conflict which I do not intend to resolve: H’s evidence at paragraphs 8 and 9 of his second witness statement is that the minutes were prepared in draft ahead of the meeting on the assumption that D would attend and that his name was left in by clerical error, and D says that the error was deliberate. I proceed upon the assumption most favourable to D, namely that the record was deliberately falsified. Even upon that assumption, the resolution passed at that meeting authorised Mr Nouri and H to seek and progress a sale of the Property on behalf of ACM, whereas the sale was in the event effected not by them but by the administrators. The remaining complaints, which occupy pages 11 to 13 of the pre-action letter, are directed to the conduct of the administrators of ACM and not to any act of H.[73]As to the appointment of the administrators, it is not in dispute that ACM defaulted on the Horrell Loan. H appointed administrators pursuant to his rights as secured creditor. There has been no challenge as to that appointment. The material before me points toward the exercise of a contractual right of enforcement upon an actual and undisputed default, and there is nothing to suggest that H breached his contractual rights or contrived to appoint administrators. That D would have preferred him not to enforce is not a conspiracy against D.

Causation

[74]Causation The causation of the loss alleged is not made out. The essence of the complaint is that the Property was sold at an undervalue, in that offers said to be higher, including offers made by D and by a company associated with his wife, were not accepted. The sale, however, was carried out by the administrators of ACM. They owed their duties to ACM and its creditors. If the Property was sold at an undervalue, the claim in respect of that undervalue lies against the administrators and not against H. It is nothing to the point that H appointed them, since an appointor is not answerable for the conduct of the administrators he appoints. D’s own pre-action letter is candid upon this, complaining in terms that the administrators failed or refused to accept the higher offer. On D’s own case, therefore, the immediate cause of the loss of which he complains is the act of a party against whom he does not seek to set off anything. Moreover any loss in respect of an undervalue will be a loss caused to ACM. I am not aware that ACM has assigned a cause of action to D.

Loss

[75]Loss Finally, and independently, D cannot show a cross-claim which equals or exceeds the amount of the debt specified in the demand.[76]The sum claimed is £1,252,484.37, comprising D’s initial investment in ACM, interest upon it, disbursements and expenses relating to the purchase of the Property, and a return on the investment which he hoped for upon the assumption that ACM had developed the Property in full and that the development had yielded sufficient to repay all creditors and to leave him a profit.[77]That is not the correct measure. Had the conspiracy been made out, the loss would not be the sum of everything D had hoped to gain, but the loss of the chance that the development would have proceeded, would have been funded, would have completed, and would have generated a return sufficient to leave him in profit. The principles are explained in McGregor on Damages (22nd Edition) 11-044-11-050.[78]There are three stages to the inquiry. First, it must be ascertained whether loss of a chance is recognised as a head of loss in itself; secondly, it must then be shown to the satisfaction of the court that the claimant has lost the particular chance; and thirdly, the lost chance must then be quantified in percentages and proportions. The court at the third stage will take a pragmatic approach making the best attempt it can upon the evidence to evaluate the chance.[79]The outcome in this case depended in large measure upon the hypothetical acts of third parties, being the planning authority, prospective funders, contractors and purchasers, and the case therefore falls squarely within the third type identified in Allied Maples Group Ltd v Simmons & Simmons [1995] 1 WLR 1602. The evidential burden lies on D to establish that there was a real and substantial chance of those third parties acting in a manner favourable to him.[80]Here the sum claimed is some three times the sum demanded, and the correct question, in my view, is whether an evaluation of a chance can be shown to be worth at least the amount specified in the Statutory Demand.[81]D cannot show that, because he has not addressed the exercise at all. He has adduced no evidence as to the availability of development finance (as opposed to finance to repay the debenture holder), none as to build costs, none as to the values which the completed development would have realised upon the permission actually granted, and none as to the terms upon which the site would have been retained. He has therefore left the court without evidence necessary even to conduct the broad-brush evaluation, which the third stage requires.[82]There is the further difficulty that the sum claimed appears to count the same loss twice, in that it includes both the initial investment and the profit which that investment was to have generated, and that the loss of the investment itself has an obvious alternative explanation in the grant of a permission less valuable than had been hoped and in ACM's consequent inability to service its borrowing.

Conclusion upon unlawful means conspiracy

[83]Conclusion upon unlawful means conspiracy Taking those matters together, the alleged conspiracy as it was advanced at the main hearing is not a genuine and serious cross-claim. There is no substantial evidential basis from which a combination or agreement between H and Mr Nouri could realistically be inferred. The primary facts do not rationally support an inference of an intention to injure D. No unlawful act was identified with sufficient particularity. The loss complained of was, upon D’s own case, caused by the administrators and not by H. And the sum claimed is unsupported by any evidence from which a chance of any value could be evaluated.[84]There is no substance in the claim and it fails to carry a degree of conviction such that it can be said that it is genuine. D does not appear to have a counterclaim, set-off or cross demand which equals or exceeds the amount of the debt specified in the demand, within rule 10.5(5)(a).

The residual ground and the amount of the debt

[85]The residual ground and the amount of the debt Mr McGarry advanced no independent case under Rule 10.5(5)(d), and I can identify no basis upon which it would be unjust to permit this Statutory Demand to stand. In my judgment Remblance proceeded on the co-extensive nature of the guarantor’s liability, so that where the principal debtor could itself have resisted a demand the guarantor should be treated comparably. Here Silversword has at no stage disputed its liability, made no answer to the demand made on 15 April 2025, and has entered creditors’ voluntary liquidation. There is accordingly no comparison with the Remblance kind, and D can show no substantial reason comparable to the sort of reason seen in paragraphs (a), (b), and (c) why the demand ought to be set aside.[86]I note that the demand under the Guarantee of 16 April 2025 was for £399,772.00, whereas the Statutory Demand and Ms Rai’s skeleton refer to a sum of approximately £430,000 together with interest. Any residual dispute as to the precise quantum would not of itself justify setting aside, since where there is no doubt that the creditor is a creditor for a sum sufficient to found the demand, a dispute as to the precise amount owing is not a sufficient answer: Re Tweeds Garages Ltd [1962] Ch 406. Nevertheless reasons for the increase should be provided to afford D an opportunity to meet the Statutory Demand, if he is able, with some confidence.

Disposal

[87]Disposal For the reasons given, the debt is not disputed upon grounds which appear to me to be substantial, D does not appear to have a cross-claim which equals or exceeds the sum demanded, and there is no other ground upon which the demand ought to be set aside. The Application is dismissed.[88]I invite counsel to agree an order which should include a direction to provide an account of the discrepancy between the demand under the Guarantee and the Statutory Demand.

Postscript: further hearing on 11 August 2026

[89]Postscript: further hearing on 11 August 2026 On 6 August 2026 my clerk wrote to the parties to inform them that a draft judgment would be circulated on Monday 10 August. In response D sent an e-mail to the court stating that an application to admit into evidence an agreement between the shareholders, the “2022 Shareholder Agreement”, had been filed. D asked that the draft not be circulated until after the court had had an opportunity to read the 2022 Shareholder Agreement and consider the application. The court directed, of its own motion, that the application be heard to allow H to either object to the application and/or to make representations on the new evidence. The hearing took place in the afternoon of 11 August 2026.[90]Both H and D were able to produce further witness statements in readiness for the hearing.[91]The additional hearing focussed on the purported cross-claim arising from the sale of the Property.[92]H objected to the admission of the Shareholder Agreement for determining the application to set aside the Statutory Demand, on the basis that it was too late, and no good reason had been provided for why it had not been before the court at the main hearing.[93]In oral submissions Mr McGarry sought to amend the grounds to set aside the statutory demand to plead an independent claim that there had been a breach of shareholder agreement.[94]As a matter of form or procedure, the application to admit the 2022 Shareholder Agreement does not seek to amend the application to set aside the Statutory Demand.[95]In my judgment is fair and just to permit the 2022 Shareholder Agreement to be admitted for the limited purpose of considering whether it affects the existing cross-claim relied upon under rule 10.5(5)(a). On the other hand, it is not fair and just to allow D to advance, for the first time orally at the resumed hearing, a new and independent ground based on breach of the 2022 Shareholder Agreement.[96]H explains in his witness statement that the 2022 Shareholder Agreement was replaced by another agreement, the “2023 Shareholder Agreement”, although neither he nor Jury O’Shea LLP (who produced the document) have been able to find an executed version. I shall work from the 2022 Shareholder Agreement since it is common ground that there is no material difference between the relevant clauses.[97]D relies on two clauses in the 2022 Shareholder Agreement to support his claim for unlawful means conspiracy: a) clause 8.2.3 prohibited ACM, in summary, from selling, purchasing, leasing, transferring, licensing or otherwise acquiring or disposing of any assets without the prior written consent of each of the shareholders; b) clause 8.2.11 prohibited ACM from acquiring or disposing of freehold land without prior written consent of shareholders.[98]D argues that the 2022 Shareholder Agreement provides a restriction so that:
“100% of the Shareholders (and not the Directors) have to agree to a sale of the White Hart Public House.”
[99]The argument is that H and Mr Nouri agreed to sell the Property at the meeting held on 13 January 2025 without the prior written consent of each of the shareholders, and that H thereby acted in breach of clauses 8.2.3 and 8.2.11 of the 2022 Shareholder Agreement. That breach is said to supply the unlawful act which, for the reasons given at [82], was not identified in the case as advanced at the main hearing, and so to complete the tort.[100]The minute of the meeting held on 13 January 2025 noted that it was necessary to ‘raise funds in order to meet its obligations’ under the Horrell Loan. The resolution passed was that Mr Nouri and H be authorised to sell the Property on behalf of ACM upon the best available terms. It may be said that the resolution was passed without regard to the requirements of the 2022 Shareholder Agreement, and that H, who was both a shareholder and the lender whose advance the sale would repay, stood to benefit from it. I do not decide either point, since this is an application to set aside a statutory demand and not the trial of the cross-claim. I proceed instead upon the footing most favourable to D, namely that the resolution was passed in breach of clauses 8.2.3 and 8.2.11 and that the breach is capable of amounting to an unlawful act for the purposes of the tort.[101]H relies on clause 9.1.5:
“each Shareholder, as shareholder, Director, or both, shall exercise such Shareholder’s rights to procure that the Company does not do, or agree to do, any of the following without the prior written consent of each of the Shareholders…give…notice for the appointment or intended appointment of an administrator.”
[102]H submits that clause 9.1.5 regulates the conduct of a shareholder or director in that capacity, and does not prevent him, as secured lender and holder of a qualifying floating charge, from exercising rights conferred by the Debenture. I accept that submission for present purposes. The point is not that the 2022 Shareholder Agreement is irrelevant to every possible dispute between the shareholders. It is that it does not materially improve D’s position on this application.[103]Even upon that footing the cross-claim fails, because the breach supplies at most the third ingredient and leaves the remainder as I have found them at [82]. As to combination and intention, the resolution records upon its face that its purpose was to raise funds to meet ACM’s obligations under the Horrell Loan, which is consistent with the exercise of commercial judgment in the interests of the company and not evidence of an agreement to injure D. As to causation, ACM through its agent H, did not effect a sale with our without the assistance of Mr Nouri; the sale therefore cannot be said to have been effected by the resolution, but by the administrators, which is the matter I address at [103]. As to loss, the admission of the 2022 Shareholder Agreement does not touch the difficulties identified at [80] and [81], and D remains without any evidence from which the value of the chance he says he lost could be evaluated.[104]Accordingly even if the 13 January 2025 resolution was ineffective as between ACM and its shareholders, it did not cause the sale by the administrators and does not supply a cross-claim by D which equals or exceeds the statutory demand.[105]I should add that the legality of the resolution was considered in brief by DDJ Ginesi [36]:
“in the exercising of my discretion, I have considered the merits of the potential claims by the applicant. I find that the facts which the applicant has referred to have the potential to raise an inference of bad faith. On the facts, for example, there are unexplained actions such as the delay in notification of planning permission and the legality of the board meeting in January 2025. Currently, there is no response from the respondents to these points…”
[106]As to the delay in notification of planning permission mentioned by DDJ Ginesi, I am told the delay was 26 days. No submission was made to the contrary. It has not been explained why 26 days would have been so material or why D himself was not able to independently obtain the information.[107]More to the point, the shareholders could not and did not appoint the administrators. The out of court appointment was made on 12 March 2025 by a qualifying floating charge holder pursuant to a debenture dated 22 September 2023.[108]In summary, there is no dispute that H was permitted to exercise his rights under the debenture. There is no dispute that the administrators were properly appointed pursuant to the debenture. It was the administrators that sold the Property, not Mr Nouri and not H. The resolutions made at the meeting on 13 January 2025 does not affect the proprietary of the sale by the administrators and does little to enhance the prospects of the claim of an unlawful means conspiracy.[109]The 2022 Shareholder Agreement does not alter the conclusions reached above. The debt is not disputed on grounds which are substantial, and D has not demonstrated to the satisfaction of the court any counterclaim, set-off or cross-demand equalling or exceeding the amount of the Statutory Demand.