ONS ULTIMATE HOLDINGS LIMITED & Ors v JOHN NAIR & Anor

The court considered two overlapping summary judgment applications under CPR 24.2 in a claim alleging a conspiracy to injure by unlawful means and related misrepresentation. The judge applied the "no real prospect" test for summary judgment and the authorities on misrepresentation by conduct and unlawful means conspiracy.

The court granted summary judgment on a discrete misrepresentation finding: that, prior to 12 November 2021, the first defendant (Mr Nair) by his conduct represented that he intended to continue the hotel venture with the second claimant (Mr Thakkar), knew that representation to be false, intended that it be relied upon in completing refinancing on 12 November 2021, and that the second claimant was induced to complete the refinancing and to provide a personal guarantee. This finding was reached by analogy with established authority on representation by conduct and the duty to correct a continuing representation.

The court refused to make summary findings that the first defendant conspired with unnamed others to make the misrepresentation, that the removal of the second claimant from bank mandates was unlawful in broader terms, or that an unlawful means conspiracy existed in relation to the purported removal of the second claimant as a director on 23 December 2021. Those matters were held to raise issues (including involvement of non-parties, possible legitimate aims, and factual questions about authorisation and motive) that required trial or further evidence.

This first-instance application concerned partial summary judgment in a dispute about a hotel joint venture. The claim arises from events surrounding a refinancing on 12 November 2021, subsequent disciplinary proceedings and the purported removal of the second claimant, Mr Thakkar, as an employee and director of Trinity Hotel Limited. The claimants plead tortious conspiracy to injure by unlawful means and related causes of action; they also say they may pursue unfair-prejudice relief under section 994 of the Companies Act 2006.

The application sought summary findings on four discrete matters (labelled Orders 1–4): (1) a misrepresentation by conduct by Mr Nair inducing the refinancing on 12 November 2021; (2) that Mr Nair combined and conspired with others to make false representations (including as to Mr Al Shamsi's continued support); (3) that Mr Nair caused removal of Mr Thakkar from company bank mandates without lawful cause or justification; and (4) that Mr Nair unlawfully combined and conspired with others to remove Mr Thakkar as a director on 23 December 2021.

The judge outlined the CPR 24.2 test and relevant authorities (including Swain v Hillman, the Court of Appeal decision in Spice Girls on representation by conduct, and the Racing Partnership decision on unlawful means conspiracy). On Order 1 the judge found, relying on the principles in Spice Girls and With v O'Flanagan, that the first defendant's participation in the refinancing amounted to a representation by conduct that he intended to continue in the venture, that the representation was false, that it was made with the intention that the second claimant rely on it, and that the second claimant was induced to complete the refinancing and give a personal guarantee. The judge concluded there was no real prospect of a defence to Order 1 and made the relevant summary order.

On Orders 2 and 4 the court declined to make summary findings that a conspiracy existed because the alleged co-conspirators were not before the court, the drafting was imprecise as to who was alleged to have conspired, and the existence of an ulterior motive (required to distinguish an innocent procedural defect from an unlawful means conspiracy) was a matter for trial. On Order 3 the court declined to make the broad finding that removal from bank mandates was "without lawful cause or justification", explaining that the merits and questions of board authority and motive required trial; the judge considered but did not make a narrower summary finding about lack of board sanction because it would not materially shorten the trial and might preclude consideration of any new evidence.

The court therefore allowed summary judgment in part (Order 1) and refused the remaining summary orders, reserving substantive and conspiratorial issues for trial or further evidence.

First instance: the court made a partial summary award. It granted the Claimants' request in respect of the discrete misrepresentation allegation (Order 1) and entered judgment on that issue because the defendant had no real prospect of defending it. The court refused to grant the wider summary findings sought (Orders 2–4), principally because alleged co-conspirators were not before the court, factual issues about authority and motive required full testing at trial, and there were compelling reasons not to predetermine those contested matters on a summary basis.

The judgment is at first instance. The court's reasons refer to a related earlier interlocutory judgment by Mr Jeremy Cousins Q.C. in relation to an earlier injunction at [2022] EWHC 1573 (Ch) and to a Deputy Master Linwood Order dated 22 March 2022 (the "Linwood Order") which declared that the 23 December 2021 resolutions were void and of no effect.