BL-2020-CDF-000003 - [2025] EWHC 2226 (Ch)

Fecha: 27-Ago-2025

Judge Keyser KC

Judge Keyser KC :

Introduction

This case, which was commenced on 6 April 2020, concerns a joint venture (“the Joint Venture”), whether or not constituting a partnership, between the claimant, Mr Lloyd, and either (as Mr Lloyd says) the first defendant, Mr Hayward, or (as the defendants say) the second defendant, Sirocco Holdings Limited (“Sirocco”), a company registered in Jersey and owned by a discretionary trust of which the principal beneficiaries were Mr Hayward and members of his family. The Joint Venture related to the development and management of part (“the Site”) of the SA1 Business Park in Swansea (“SA1”, also at times referred to as “AWCO”), involving the construction there by Mr Lloyd of small industrial or commercial units and the letting of those units to third parties. At all material times until 10 October 2014 Sirocco was the registered proprietor of SA1. On that date Sirocco sold SA1 to Alymere Holdings Limited (“Alymere”), a Jersey-registered subsidiary of Sirocco. Mr Hayward, trading as Richard Hayward Properties (“RHP”), was at all material times the managing agent of SA1 for Sirocco and later Alymere. It was he who made the day-to-day management decisions for Sirocco, and later for Alymere, on behalf of the sole director of those companies, Mr Simon Baigent, to whom he also reported on a regular basis and from whom he sought approval for major decisions.

In its essentials, Mr Lloyd’s pleaded case is as follows.

The Joint Venture was agreed in October 2010 between Mr Lloyd and Mr Hayward personally. There was no mention that Mr Hayward was acting for Sirocco. The claim against Sirocco is pleaded in the alternative.

ii.

The Joint Venture was either a partnership within the terms of the Partnership Act 1890 or a contractual relationship with equivalent obligations.

iii.

The key terms of the Joint Venture were these: Mr Hayward would make the Site available for the construction and letting of units. He would also contribute £20,000 towards the initial cost of constructing units and a further £5,000 for advertising. Mr Lloyd would contribute his prior work at the Site in constructing units (which he had undertaken in anticipation of a proposed lease that was superseded by the Joint Venture) and further work to construct more units for letting, and would thereafter source tenants and manage the units, which would include the collection of rent. The Joint Venture would bear the costs of developing and running the Site and would receive the rental income. The net profits would be shared equally between Mr Lloyd and Mr Hayward (or, in the alternative, Sirocco). The Joint Venture was for a minimum term of 15 years, which had been the proposed term of the intended lease that had been superseded by the Joint Venture. (Alternatively, the minimum term was 5 years.)

iv.

The Joint Venture continued actively until about September 2017. However, for several years before that, Mr Hayward had been failing to pay Mr Lloyd the moneys he was due from the Joint Venture. In about September 2017, after Mr Lloyd had completed work on the construction of units at SA1, Mr Hayward excluded him from any part in the operation of the Site, and Mr Hayward has contended that the Joint Venture was terminated in December 2013 or early 2014 by reason of Mr Lloyd’s inability to perform his duties while he was in custody on remand between October 2013 and April 2014. Mr Hayward thereby repudiated the Joint Venture in about September 2017. Mr Lloyd does not say that he has accepted that repudiation and terminated the Joint Venture: it is his primary case—pursued tentatively—that the Joint Venture has continued; in the alternative, he says that the earliest date for the termination of the Joint Venture is September 2017.

Further, Mr Hayward has wrongly sought to treat as expenses of the Joint Venture mortgage interest payments made by Sirocco in respect of a loan that was secured on SA1 for Sirocco’s own purposes.

vi.

Mr Lloyd seeks an account of the profit-share due to him, alternatively damages for breach of the Joint Venture agreement.

The defence and counterclaim of Mr Hayward and Sirocco may be summarised very briefly as follows.

The Joint Venture agreement was made in about December 2010 between Mr Lloyd and Sirocco. Mr Hayward was merely the agent of Sirocco.

ii.

The Joint Venture was not a partnership, because it did not involve the parties carrying on a business in common.

iii.

The key terms of the Joint Venture were these. Mr Lloyd would produce evidence to substantiate his purported expenditure of £80,000 on works at the Site before the Joint Venture was agreed. Mr Lloyd would personally devote such time as was necessary to the development and management of the site, and he would account to Sirocco for the rent received and the expenses incurred. The rental income would be applied as follows: first, to reimburse Sirocco for the payment of interest under its mortgage over SA1 (or, more accurately, such of the interest as might be applied to the Site on a pro rata basis); second, to pay all other costs and expenses; third, to pay Mr Lloyd £20,000 per annum; fourth, to share any remaining money equally between Mr Lloyd and Sirocco.

iv.

The Joint Venture was terminated by Sirocco in about December 2013, because Mr Lloyd was unable on account of his incarceration to carry out his duties and a temporary alternative, whereby his father would carry out those duties in his place, had not worked out. In May 2014 Mr Lloyd asked Mr Hayward (on behalf of Sirocco) to renew the Joint Venture, but Mr Hayward declined. Further work carried out by Mr Lloyd at SA1 was done by him on behalf of two companies, Topgrade Property Management Limited (“Topgrade”) and A.D.E.L. Construction Limited (“ADEL”) and was invoiced by them to Alymere. (Mr Lloyd says that it was agreed that payment of these invoices would be treated as drawings by him from the Joint Venture.) Further, Mr Lloyd never produced invoices to evidence the expenditure of £80,000 on works at the site before the Joint Venture was agreed.

It is admitted that Sirocco treated the mortgage interest payments as expenses of the Joint Venture, but this was proper and in accordance with the agreement.

vi.

Mr Lloyd’s claim for damages or an account is statute-barred by reason of section 5 or section 23 of the Limitation Act 1980. (Mr Lloyd admits that, if the Joint Venture was terminated in December 2013, his claims are statute-barred. But he denies that it was terminated then.)

vii.

Each defendant brings a counterclaim against Mr Lloyd for reimbursement of the cost of leasing vehicles for his benefit.

The trial before me has been limited to questions of liability, with any accounts or monetary remedies to be considered later. In what follows, I shall begin with a chronological outline of the facts, referring only to such matters as I consider necessary and to such documents as seem most relevant to the issues, although I have considered all of the evidence. Then I shall address the questions that arise from the facts. The counterclaims will be addressed separately.

I am grateful to Miss Dzameh and Mr Healey, counsel respectively for the claimant and for the defendants, for their helpful submissions and for their conduct of the case generally.