BL-2020-001417 - [2025] EWHC 2487 (Ch)

The big picture point, which is supported by documents, is that MMM was the company through which the distribution work was performed through the Matrix sales team. This is supported in the financial statements. The employees were employed by a service company, namely Matrix Securities Limited. They were in turn seconded to group companies.

The MMM financial statements for the year end 30 June 2011 (the last that were produced) state at note 14 that in 2011, MMM had 17 employees in sales and 5 in administration, (and in 2010 had 20 employees in sales and 7 in administration). The notes also record that:

“[t]he employees are employed directly by Matrix-Securities Limited (a fellow subsidiary undertaking) and work on a full time basis for Matrix Money Management Limited. The associated employment costs have been recharged to Matrix Money Management Limited”.

The MAAM LLP financial statements for year end 30 June 2011 (again, the last that were produced) stated at note 12that in 2011 MAAM LLP had 4 employees all of whom were engaged in administration and none in sales (with the same having been the position in 2010). The notes record that the employees were employed directly by MSL and worked on a full time basis for MAAM LLP, with the associated employment costs having been recharged to MAAM LLP.

MAAM LLP employed no sales staff either directly or indirectly. It did not engage in sales, but was the part of the group concerned with investment management. This is consistent with the description of its business given in the same financial statements under the heading “Principal activities and review of the business”, where it is stated:

“The principal activity of the limited liability partnership continued to be that of providing investment management services. The limited liability partnership expects to continue its current activities …”

The fact that MMM was performing the sales part of the group’s operations is evidenced by Ms Galligan’s employment contract. The employer was the service company, Matrix Services Limited. In paragraph 5 of the contract, it was stated as follows:

“You are employed as Institutional Development Manager in the Matrix Money Management Division. You will report to Luke Reeves. …” [emphasis added]

Ms Galligan accepted in her evidence that this was a reference to MMM [Day3/6/3-5]. Further, the footers of the sales team’s emails, and specifically of Ms Galligan, Mr Reeves and Mr Elliott, show that they were working on behalf of MMM. They were signed with the ‘Matrix Asset Management’ signature followed by the words “Issued by Matrix Money Management Limited”, that is MMM. As Ms Galligan accepted in evidence, this was because she and the other members of the sales team were working, by way of secondment, for MMM.

Likewise, there were different email footers used by MAAM LLP staff which made clear they were acting on behalf of MAAM LLP. Thus, the email footer used by Lionel Welch, Head of Investor Relations at MAAM LLP, was signed with an “Matrix Asset Management Division” signature followed by the words “Matrix Alternative Assets Management LLP is a limited liability partnership registered in England & Wales …”. Similarly, the email footer used by Paul Condon, the Operations Manager at MAAM LLP, was signed “Matrix Alternative Asset Management”.

Musst’s points to opposite effect were as follows. First, it pointed to a letter before action dated 31 July 2020 in which Stewarts said that they were acting for MRL “as assignee of Matrix Alternative Asset Management Ltd.”. Technically, that was a different entity, which had in fact been dissolved on 18 March 2018, and was not the same as MAAM LLP. Nonetheless, it is advanced by Musst to say that it was not written in respect of an assignment by MMM.

The letter before action is confused. First, it was said to be for an assignee for a limited company, but the limited company at the relevant time had been dissolved. It has to be premised on a mistake in that the reference may have been intended to be as assignee of Matrix Alternative Asset Management LLP. Musst make the point that it is not said as assignee of MMM. Second, the assignments relied upon were in August 2020, that is after the letter of 31 July 2020. The letter would therefore appear to have been premature.

Despite these inaccuracies, the case of Musst is that the letter was at least accurate in not saying “as assignee of Matrix Money Management Ltd”. It is relevant that the letter did not say that, but it does not make the letter itself accurate. It is known that the letter was inaccurate in the respects set out in paragraph 201 above. The letter was written years after the services in question. The position was not straightforward because of the secondment of Mr Reeves and his sales team. There is no reason to believe that the letter is conclusive. In my judgment, against the matters in the near contemporaneous accounts, the letter carried little weight.

Second, the liquidators of MMM did not refer in their progress reports to any potential claims against Musst prior to the assignment. That might be relevant to whether or not MMM or anybody else had a claim. There is no evidence that a liquidator of a different company referred to a claim against Musst. This shows that there is nothing in this point in that there is no evidence of any liquidator being told that there was a potential claim.

It is not necessary to say anything more about this point. On one view, this point is contrary to the entirety of the case of MRL. It is to the effect that there was no evidence of any claim against Musst being communicated to any liquidator, and therefore perhaps suggesting that there was no claim at all. What is the reason for this? It may be that Mr Reeves was too busy at this stage after the insolvency positioning himself through a new corporate or limited partnership entity. He may have been seeking to get reward from Octave or Astra thereafter. It is likely at that stage that he was not thinking about the law of restitution. It is not necessary to form a view about this. It suffices to say that the absence of communication with the liquidator of MMM does not prove that there was an entitlement of a different Matrix entity, whether MAAM Ltd or MAAM LLP or any other entity.

Third, Musst relied on certain draft or proposed agreements entered in which the relevant Matrix counterparty was not MMM. They referred to various documents as follows:

Fourth, Musst also placed reliance on documents which Mr Reeves sent Derek Fulton (of First Trust) between Wednesday 24 October 2012 and Saturday 27 October 2012 and native Excel MR_0006465. Musst says that because the working draft presentation had “Emerging Managers (external)” as a product under MAAM and then listed AMCo under Emerging Managers, that establishes that MAAM LLP was distributing AMCo and not MMM. This is a point which is to be taken into account in the context of the case as a whole. It was about a proposed structure rather than showing the existing structure. It was prepared in haste in the context of imminent insolvency. Mr Reeves sought to explain it as such: see his evidence at T2/71 – T2/76. For reasons given elsewhere in this judgment, it is difficult to give any credence to the evidence of Mr Reeves. That does not result in the opposite of anything which he says being, as a matter of logical inference, correct. Of greater import than the evidence of Mr Reeves is that there is no evidence that this was how the business had been carried out. Seen against the big picture points of MRL, and even seen with the narrow points made by Musst, it does not in my judgment tilt the balance in favour of MAAM having been a distribution manager.

This point does not turn on which party has the burden of proof. I am satisfied on the balance of probabilities that MMM was the distribution arm and that the relevant employees of Matrix who assisted in connection with attempting to secure the business of the Observatory and LGT were working for MMM on secondment. In those circumstances, the contention that they were working for a different entity and/or specifically for MAAM LLP must be rejected for the reasons set out by MRL and for the reasons set out in criticism of the points advanced by Musst.