[2025] EWHC 1972 (Comm)

Having made that finding, the issue of whether Mrs Bandak acted of her own free will does not arise. If I am wrong about that finding, I go on to consider whether she did.

Criticism is made by Mr Ilyas of the lack of evidence from CPF One that it had checked with Mrs Bandak that she was content for Fahri LLP to advise her in relation to the Guarantee. It seems to me, however, that CPF One satisfied the requirements laid down by Lord in Etridge at [79] (summarised by Lady Simler (at [33]) in Waller-Edwards: see [‎52] above). Although CPF One did not communicate “directly” with Mrs Bandak, it did so through its solicitors Fieldfisher LLP to Mrs Bandak’s solicitors Fahri LLP. The 2019 Charge granted by Mrs Bandak to CPF One appears to show that Fahri LLP acted for her and were consequently her solicitors (Fahri LLP witnessed Mrs Bandak’s signature to that charge). The solicitor-client relationship between Mrs Bandak and Fahri LLP existed in relation to the May 2021 Facility Agreement. Paragraph 2 of the Solicitor’s Certificate from Fahri LLP dated 18 June 2021 confirms that Mrs Bandak was Mr Fahri’s (and thus Fahri LLP’s) client. The Solicitor’s Certificate is a document contemporary to the Guarantee. It follows Mr Emmett and Mrs Bandak’s divorce and the Financial Remedy Order. There is no reason to dispute what the Solicitor’s Certificate says based on any other contemporaneous document. Moreover, although hearsay, Fahri LLP’s letter of 13 February 2025 responding to VCT’s solicitors’ letter dated 27 November 2024 confirmed that Mrs Bandak was and had previously been Fahri LLP’s client.

It is instructive to set out the requests made of Fahri LLP in that letter, and its response:

“1.

Please confirm that you met with Mrs Emmett on 18th June 2021, being the date you signed the Certificate (or otherwise confirm the date of that meeting).

[Confirmed;]

2.

Please confirm as set out in paragraphs 1 and 2 of the Certificate, that Mrs Emmett was your client.

[Confirmed;]

3.

Please confirm as set out in paragraph 6 of the Certificate that Mrs Emmett provided evidence of her identity to you at that meeting and/or whether she was already a client of your firm.

[Confirmed;]

4.

Please confirm whether Fahri LLP had ever acted for Mrs Emmett prior to 18th June 2021 or subsequently. In particular, when you witnessed Mrs Emmett’s signature on the November 2019 Charge, when Mrs Emmett appears to have been your client.

[This information is privileged and we decline to answer;]

5.

Please confirm that you were retained to provide advice to Mrs Emmett in relation to the transaction,

[Confirmed;]

6.

Please confirm that the purpose of that meeting was to provide Mrs Emmett with the advice summarised in the Certificate.

[Confirmed;]

7.

Please confirm that you did not have any conflict of interest in acting for Mrs Emmett for that purpose, as set out in paragraph 3 of the Certificate.

[Confirmed;]

8.

Please confirm that Mrs Emmett attended that face-to-face meeting alone, as you set out in paragraph 9 of the Certificate.

[Confirmed;]

9.

Please confirm that you provided Mrs Emmett with copies of the Facility Agreement, Personal Guarantee, the Legal Charge and Debenture, as set out in paragraph 1 of the Certificate.

[Confirmed;]

10.

Please confirm, as set out in paragraphs 7 and 8 of the Certificate, that you explained the following to Mrs Emmett:

a.

The nature and implications of the Facility Agreement, Personal Guarantee, the Legal Charge and Debenture.

b.

The requirement that this was explained to her by a solicitor, so that the lender could be certain she understood the nature of the transaction and was entering it freely without undue influence.

c.

The risks of entering into the Personal Guarantee.

d.

That Mrs Emmett had a choice as to whether to enter into the Personal Guarantee.

[Confirmed;]

11.

Please confirm that Mrs Emmett advised you that she wished to proceed with the transaction, having received advice from you as above, as set out in paragraph 8 of the Certificate.

[Confirmed;]

12.

Please confirm that you were instructed by Mrs Emmett to provide the Certificate to the lender on that basis, as set out in paragraph 8 of the Certificate.

[Confirmed;]

13.

Please confirm that Mrs Emmett appeared to understand your advice, as you confirmed in paragraph 9 of the Certificate.

[Confirmed;]

14.

Please provide copies of any correspondence or documentation relating to that meeting including:

a.

any correspondence arranging for it to take place;

b.

any client care documentation or associated documents;

c.

any notes of the meeting;

d.

any communications between you and Mrs Emmett regarding the meeting or transaction (whether before or after the meeting).

[This information is privileged and we decline to answer; and]

15.

Please confirm whether Mrs Emmett has ever received any communication or email from Fahri LLP providing advice on any subject.

[Advice was given in person and not in writing.]”

Criticism is made by Mr Ilyas of the absence of any witness statement from Mr Fahri to support VCT’s position. While there is no property in a witness, it is instructive that (to my knowledge, and seemingly from the responses given in Fahri LLP’s letter dated 13 February 2025) Mrs Bandak has not waived privilege over the advice given to her by Fahri LLP regarding the Solicitor’s Certificate or herself produced Fahri LLP’s file to this court for the purposes of these proceedings and in support of her position. It is a fair inference for the court to draw that, had Fahri LLP’s file contained anything to the contrary in support of Mrs Bandak’s position, she would have done so. She did not.

I draw the following conclusions from the Solicitor’s Certificate Letter and Fahri LLP’s letter dated 13 February 2025:

It is evident from Solicitor’s Certificate that when she signed the Guarantee, Mrs Bandak must have seen (and is taken to have read) the notice in bold type set out at [‎11‎(f)] above. Mrs Bandak was aware that Fahri LLP was advising her, and did not, after reading that notice, decline Mr Fahri’s advice or say that she wanted another solicitor. The advice was given on 18 June 2021. Mrs Bandak did not sign the Guarantee until 28 June 2021, some 10 days later, and in that period she had the opportunity to seek other legal advice or to resile from signing the Guarantee, but she did not.

Mr Ilyas accepts that the same solicitor can advise both the borrower and the surety without there being a conflict. Mr Fahri was satisfied in accordance with his professional obligations that there was no conflict. The signature on the Corben Mews Charge – which looks to me to have been signed by Mr Emmett on behalf of Corben Mews – was witnessed by Fotini Leventi, another solicitor of Fahri LLP.

The Solicitor’s Certificate is a contemporaneous document, and I cannot see any reason not to accept its contents as accurate. There was and is no reason for Mr Fahri to have misrepresented the correct position in the Solicitor’s Certificate. As I have said, that contemporaneous document contradicts Mrs Bandak’s account in her first and second witness statements, where she says that Mr Emmett was present when Mr Fahri advised her. This account, which depends at best on a recollection of events over three years ago, is precisely the sort of evidence to which Potter LJ referred in ED&F Man v Patel at [10], which I set out at [‎45] above. I prefer the contents of the Solicitor’s Certificate to Mrs Bandak’s account.

On accepting instructions, Mr Fahri was not acting as agent of CPF One, and CPF One had no control over the advice given. CPF One was entitled to proceed on the basis that Mr Fahri had “done his job properly”, per Lord Nicholls in Etridge, at [78].

It follows that CPF One complied with the Etridge requirements, taking reasonable steps to bring home to Mrs Bandak the risk that she was taking, and, consequently, in my judgment the Guarantee is not amenable to being set-aside.