St Vincent European General Partner Ltd v Robinson & Ors

Summary judgment is appropriate where a claimant’s case has no realistic prospect of success and no compelling reason for trial. A mortgagor must make an unconditional tender of the secured amount, or pay the principal, interest and probable costs into court. A mortgagee’s failure to provide redemption information does not itself redeem the security.

Loss suffered by a company, reflected in a shareholder’s reduced interest or equity of redemption, is generally irrecoverable by the shareholder. The narrow Giles v Rhind exception applies only where the wrongdoing itself makes it impossible for the company to pursue its remedy. A possible derivative action means that the company is not disabled. Very late amendments and joinder require a strong case, a satisfactory explanation and consideration of limitation, prejudice and trial disruption.

St Vincent sought relief against existing defendants arising from the enforcement of security over shares in Haussmann Holdings Ltd and the subsequent transfer and sale of assets connected with a Polish development. It alleged that the creditors had wrongfully prevented redemption, stripped value from the secured shares and conspired to cause loss.

Phillips J had previously rejected the alleged tender and held that the claims were subject to the rule against reflective loss: [2017] EWHC 3267 (Comm). Permission to appeal was refused. St Vincent nevertheless opposed summary judgment and sought to amend its claim and join five further defendants, alleging an undervalue sale and bribery. The issues were whether the claims had a real prospect of success and whether the proposed amendments and joinder should be permitted.

1. Summary judgment. The court accepted that the applicable test was whether St Vincent had a real, rather than fanciful, prospect of success. Although the earlier judgment was not issue estoppel, it was a comprehensive and persuasive analysis.
2. Redemption. A mortgagor must make an unconditional tender of the principal, interest and costs, or pay a sufficient sum into court. An unconditional bank-transfer offer was at least arguable as a valid tender. St Vincent had made no unconditional offer, requested no payment details and paid nothing into court. Its case on tender therefore had no real prospect of success.
3. Reflective loss. The pleaded loss was the reduced value of St Vincent’s equity of redemption caused by loss suffered by HHL or HDP. The rule applied regardless of whether the alleged cause of action was conspiracy, breach of duty or another form of claim. The fact that claims by the companies might be impractical or time-barred did not disapply the rule.
4. Giles v Rhind exception. The exception is narrow. It requires impossibility, caused by the wrongdoing, preventing the company from pursuing its remedy. A derivative action was available, or at least had not been shown to be unavailable. The exception therefore did not apply, even though the alleged wrongdoer controlled the companies.
5. Amendment and joinder. The proposed claims were also barred by reflective loss. In any event, limitation was reasonably arguable, the alleged undervalue and bribery were unsupported, the delay was unexplained and joinder would prejudice the October trial. Applying Nesbit and Quah Su-Ling, the application was refused.
6. There was summary judgment for the existing defendants. Re-amendment and joinder were refused.

The judgment records that Phillips J set aside a worldwide freezing order on 15 December 2017: [2017] EWHC 3267 (Comm). Flaux LJ refused permission to appeal on 9 January 2018. This court independently determined the applications for summary judgment and amendment.