BL-2025-000377 - [2025] EWHC 2976 (Ch)

Fecha: 13-Nov-2025

The present claim

The present claim

24.

Unfortunately, the Project has comprehensively failed, and Mr Dekel has lost his investment in CLL BVI, and any hope of making a return thereupon. It is his case that this has been caused by GMG Real Estate’s and RE Capital’s failure to perform the services required of them under the Management Agreement with the care and skill reasonably to be expected, in breach of the terms of the Management Agreement.

25.

It is unnecessary for present purposes to go into the detail of the scope and extent of the breach alleged, but broadly speaking the gist of Mr Dekel’s complaints are to the effect that:

A business plan produced by GMG Real Estate that contained assumptions which were flawed and/or unrealistic, including failing to anticipate any requirement for affordable housing, failing to include a deduction for the purchaser’s costs (such as SDLT, legal fees, etc.), including no contingency in the construction budget, and assuming an unrealistic development timetable.

ii)

GMG Real Estate and RE Capital thereafter took a number of decisions which caused delays to completion and increased costs, including (a) at an early stage, deciding to return the £6.3m to Participating Shareholders which, so it is alleged, left the Project over-leveraged; and (b) significant delay in the start of construction because of that over-leveraging.

iii)

GMG Real Estate failed to address changes in the Project from to time, and in particular failed to explore exit alternatives once it became apparent that the Project would not be as profitable as anticipated. This is alleged to have included failing to consider pre-letting parts of the Property, “mothballing” the Project following the grant of planning permission, and/or selling the Property as a whole following the grant of planning permission.

iv)

As against RE Capital, which took over the role of GMG Real Estate as from 28 May 2021, it is alleged that given that the failures of the GMG Real Estate would have been readily apparent to RE Capital, it failed to take steps to mitigate the effects of those failures, particularly in addressing relevant exit options.

26.

It is these complaints that form the basis of the present proceedings by which Mr Dekel pursues a claim for breach of contract as against GMG Real Estate and RE Capital pursuant to s. 1(1) of the 1999 Act, it being his case that he is entitled to enforce the terms of the Management Agreement against them relying upon the terms of clause 20.1.2 of the Management Agreement. In the case of RE Capital this is alleged on the basis that RE Capital became bound by the terms of the Management Agreement in May 2021 in the circumstances referred to above.

27.

More specifically so far as clause 20.1.2 of the Management Agreement is concerned, although Mr Dekel had previously sought to rely upon other parts of clause 20.1.2, ultimately, he now solely alleges that he is a party who has “… provided finance and/or refinance … in connection with the Property” etc.

28.

In paragraph 38 of his Particulars of Claim, Mr Dekel alleges that if GMG Real Estate and RE Capital had “acted in accordance with their duty of skill and care and not committed the breaches set out above, the Project would have been successfully delivered in such a manner as to ensure not only that all equity investors’ funds were preserved but that they received a return on their investments.”

29.

Mr Dekel then goes on, in paragraph 39 of his Particulars of Claim, to allege that the breaches of duty set out in the Particulars of Claim: “… caused loss to Mr Dekel comprising the loss of the return of his investment that the Project would have made but for the negligence of GMG Real Estate and RE Capital.”

30.

Mr Dekel has commenced three other sets of proceedings, as follows:

“The CLL BVI Proceedings” – By a Fixed Date Claim Form dated 16 September 2024, Mr Dekel (as a shareholder in CLL BVI) applied to the High Court in the BVI for leave to bring a derivative claim in England in the name of CLL BVI, against seven defendants including RE Capital. On 4 March 2025, the application was dismissed by Mithani J. However, Mr Dekel applied for leave to appeal and to vary the relevant order. Leave to appeal was granted on 10 June 2025. Whilst this cannot be guaranteed, it is understood that the appeal may be heard in either the February or June 2026 sitting of the Court of Appeal of the Eastern Caribbean.

ii)

“The CLL UK Claim” – On 19 September 2024, Mr Dekel applied to this Court for leave to bring a double derivative claim in the name of CLL UK against five defendants including RE Capital. On 15 May 2025, Fancourt J determined that there is a prima facie case for the derivative claim to continue and ordered the application to be listed for a hearing inter partes. Two of the defendants to these proceedings, including Mr Leech, have applied for a stay to enable it to be heard with the CLL BVI claim if leave is granted for the latter to be pursued on appeal. Subject thereto, the inter partes permission hearing is estimated to require up to 6 days of hearing time and is unlikely therefore to be dealt with particularly speedily.

iii)

“CLL BVI Claim” – On 22 April 2025, Mr Dekel issued a claim form in this Court for a derivative claim in the name of CLL BVI, purportedly in order to protect his position for limitation purposes pending determination of the CLL BVI Proceedings. Mr Dekel applied for, and on 28 July 2025, this Court granted a stay of the CLL BVI Claim pending determination of the appeal in the CLL BVI Proceedings.

31.

These proceedings, whilst including RE Capital as a defendant, do not include GMG Real Estate. It has been explained on behalf Mr Dekel that he only became aware of the existence of the Management Agreement more recently. This may provide an explanation as to why the breach of contract claims being pursued by way of the present proceedings do not feature in the earlier other claims.