BL-2023-MAN-000072 - [2025] EWHC 2442 (Ch)

As a general observation, the representatives of JAK and Together called to give evidence, namely Mr Kamani and Mr Pickering, were somewhat distant from the process of negotiating the terms of the Deed of Postponement, and the detail of the transaction.

So far as Mr Kamani is concerned, as he accepted under cross examination, at the relevant time he was involved in a number of other development projects, as well as being primarily involved in an online retail fashion business called “I Saw It First”. I consider that I must proceed on the basis that Mr Kamani had limited, if any, involvement in the day-to-day affairs of JAK. Further, he accepted that he delegated responsibility for negotiating and instructing Solicitors in relation to the JAK Loan and the subsequent agreements comprising the Development Services Agreement and the Deed of Postponement relating to the obtaining of development finance, to the Finance Director of JAK, Mohamed Marzouk (“Mr Marzouk”). Thus, as was clear from his evidence, he was not concerned with the detail of the relevant transactions. JAK did not call Mr Marzouk, who had also been Finance Director of other companies including that carrying on the I Saw It First business, as a witness because he and Mr Kamani have since terminated their business relationship. Neither did JAK call the Solicitors involved in the negotiations leading to the execution of the Deed of Postponement including, in particular, Katy Williamson of Primas (“Ms Williamson”), the Solicitor primarily involved on JAK’s behalf.

Mr Kamani was asked under cross examination about clause 19.4 of the Development Services Agreement, and he appeared to accept that one might have expected consistency between the terms thereof, with its reference to the party providing development finance having unencumbered security to which the JAK Charge was subordinated, and the Deed of Postponement.

In paragraph 16 of his witness statement, Mr Kamani referred to giving Mr Marzouk: “… two stipulations which I asked him to deal with in respect of the Deed [of Postponement]. The things I insisted on being in the Deed were that it was okay to give Together first charge over the Property but that this should only be for the duration of JAK’s loan and that he should make sure that the Deed protected us from any defaults by [Mulbury] as far as possible.”

This is evidence is relied upon by Mr Hodge on behalf of JAK in support of the case that in proposing clause 13 as an amendment to the Deed of Postponement, JAK intended that it should have the effect that JAK maintains that it had, namely to provide for the JAK Charge to have priority over the Together Charge in the event that the JAK Loan Agreement was terminated before the agreement relating to the Together Loan. In essence, it is said that Mr Marzouk must have acted on this instruction by ensuring that clause 13 was inserted to regulate the position on the termination of’ the JAK Loan Agreement, thereby making sure that the Deed of Priority did protect JAK: “from any defaults by [Mulbury] as far as possible”.

However, I do not regard paragraph 16 of Mr Kamani’s witness statement to be reliable evidence that I can place significant weight upon. There is no record of what Mr Kamani is alleged to have said to Mr Marzouk. If this had been said by Mr Kamani to Mr Marzouk, then one might have expected it to have been reflected in a file note made by Primas in relation to the relevant transaction, but no such file note has been produced. Further, I consider any such instructions to be inconsistent with what Ms Williamson was saying contemporaneously in correspondence to which I shall return, and in particular an email dated 24 April 2020 (11:19).

Further, given Mr Kamani’s involvement with a number of other transactions and businesses at the relevant time, I consider it inherently unlikely that Mr Kamani has an accurate recollection in relation to the alleged conversation with Mr Marzouk over 5 years ago. I note the observations of Leggatt J in Gestmin SGPS S.A. v Credit Suisse Limited [2013] EWHC 3560 (Comm) at [15] – [22] with regard to the unreliability of memory, and his caution to place limited, if any, weight on witnesses' recollections of what was said in meetings and conversations, and to base factual findings on inferences drawn from the documentary evidence and known or probable facts.

Although Mr Kamani may, in seeking to reconstruct in his mind what he is likely to have said to Mr Marzouk, have honestly persuaded himself that this is what he must have said to Mr Marzouk with regard to the Deed of Postponement, I do not consider that it can be regarded as reliable evidence particularly given what I consider to be its inconsistency with other evidence in the case.

So far as Mr Pickering is concerned, again, he operated at a high level in relation to the detail of the relevant transaction. The correspondence shows that Robert Goodall, then Together’s Lending Director, and Diane Moore of Together, were more involved in the decision-making processes relating to the specific terms of the Deed of Postponement. They have both left Together and joined a rival lender, and were not called to give evidence, and nor was any representative of Together’s Solicitors, Priority. As the authorities indicate, in ascertaining the intentions of Together, what is relevant are the intentions of the decision-makers.

Robert Goodhall, in his capacity as Lending Director, had overall control of the transaction on behalf of Together. However, Mr Pickering was Head of Development Funding, and in that capacity had some involvement in the transaction and was aware of the basis upon which Together was prepared to lend. I accept his evidence that, so far as he was concerned, the transaction was one in which Together obtained priority in respect of the Together Charge without qualification. Although he might not have been involved in the detail of the negotiations, this does provide at least some evidence as to Together’s intentions.

It is a fair criticism of Mr Pickering’s witness statement that it duplicates an earlier witness statement prepared when the proceedings were proceeding by way of Part 7 claim, and that a significant amount of the language therein involves the making of argument and submission, and wording that plainly does not represent Mr Pickering’s own words. However, I do not consider that this detracts from his general position, which he confirmed under cross examination, that so far as he was concerned, Together was obtaining priority without qualification, and that he was aware of nothing to the contrary.

So far as Mr Bury is concerned, I do not consider that his evidence really takes matters much further. He was simply able to confirm the general commercial rationale behind Together’s lending as development funder with priority in respect of its security but plainly was not able to assist with regard to the detail of the transaction, or any nuances in respect of such general commercial rationale.

In the course of submissions, I was asked by both sides to draw adverse inferences from the fact that witnesses were not called who might have been expected to have been called to support the relevant parties’ respective cases as to their intentions behind clause 13 of the Deed of Postponement. I was referred to authority, including, in particular, Royal Mail Group Ltd v Efobi [2021] UKSC 33, [2021] 1 WLR 3863, at [41], per Lord Leggatt JSC. Plainly adverse inferences cannot be drawn from the failure to call solicitors involved in the transaction given the potential impact of legal advice privilege. As to whether adverse inferences should be drawn with regard to not calling other witnesses, it is necessary to bear in mind the reasons why witnesses have not been called. One can, in the circumstances, see why JAK might have been reluctant to call Mr Marzouk, and Together might have been reluctant to call Robert Goodall and Diane Moore, given that Mr Marzouk does not sound to have left JAK on particularly good terms, and Robert Goodall and Diane Moore now work for a rival lender to Together. In these circumstances, I do not consider it appropriate to draw adverse inferences one way or the other.