HT-2023-000306 - [2025] EWHC 385 (TCC)

This Judgment follows the trial of the Preliminary Issues ordered to be determined by Eyre J at paragraph 2 of his Order dated 22 August 2024:

“Does the Claimant have title to bring any of the claims set out in the Particulars of Claim against the First Defendant either:

(i)

as assignee of the Second Defendant’s rights pursuant to the Deed of Assignment dated 22 December 2020; or

(ii)

as beneficiary of rights held on Trust for him by the Second Defendant pursuant to the Declaration of Trust dated 14 February 2022 either (a) in his own name or (b) in order to compel the Second Defendant to enforce those rights on his behalf”

These proceedings (which were issued on 22 August 2023) arise out of a contract entered into between the First Defendant (hereinafter referred to as “MPA”) and the Second Defendant (hereinafter referred to as “Kazu 1”) on 10 November 2016 (the “PM Appointment”), pursuant to which MPA agreed to provide Kazu 1 with project management services in connection with the development of a restaurant at 61-63 Beak Street, London W1F 9SL (the “Premises”). Kazu 1 was a special purpose vehicle incorporated for the purposes of the development. Its parent company was Kazu Restaurants Ltd (“Kazu”).

The PM Appointment consisted of a proposal letter dated 10 November 2016 and MPA’s Terms and Conditions of Appointment (the “T&Cs”).

The proposal letter was sent in respect of “Endo, 61-63 Beak Street, London W1” and provided:

“As requested, please find detailed below our service and fee proposal to undertake project management services for your consideration in relation to the above project: ...

We would propose our fee for the above services to be £29,500 (plus VAT)

...

The above service and fee proposal is offered in accordance with our standard terms and conditions as attached (ref MPA/T&C 2008).”

The following were defined terms in the T&Cs:

Clause 1.1 of the T&Cs (under the heading “Appointment”) provided:

“The Client appoints the Consultant to provide the Services and the Consultant accepts such appointment upon and subject to these Conditions (the “Appointment”). The Appointment takes effect on the date when the Consultant first commenced performance of the Services irrespective of the date of this Appointment.”

Clause 16.2 of the T&Cs (under the heading “Assignment and Sub-Contracting”) provided:

“The benefit of this Appointment may be assigned by the Client by way of an absolute legal assignment to any person providing finance or refinance to the Client in connection with the Project or to any person (A1) acquiring the Client’s interest in the Project and by (A1) to another person (A2) acquiring A1’s interest in the Project. No further or other assignment is permitted and, in particular, A2 is not entitled to assign this Appointment.”

Clause 18.2 of the T&Cs (under the heading “General”) provided:

“Nothing in this Appointment confers or purports to confer any right to enforce any of its terms on any person who is not a party to it. Only the Client (and the Client’s permitted assignees) and the Consultant can take action to enforce the terms of this Appointment.”

On 5 December 2016, MPA entered into a separate contract with Kazu 1 to act as quantity surveyor on the same Project. No claims are advanced by the Claimant in respect of the second appointment, and it is not therefore relevant to the determination of the Preliminary Issue.

Construction works at the Premises began in May 2017. However, between late 2017 and 17 January 2018, Kazu 1 terminated the Project. Kazu 1 subsequently disclaimed its lease of the Premises.

On 19 June 2020, Kazu 1 entered into Creditors Voluntary Liquidation. Kazu also entered into Creditors Voluntary Liquidation on 19 June 2020, and was subsequently dissolved on 18 August 2022.

On 22 December 2020, Kazu 1 and Kazu (acting by their Liquidator, Mr Yerrill, and defined as “the Companies”) entered into a Deed of Assignment in favour of the Claimant (defined as “the Assignee”) (the “Deed of Assignment”). The Claimant was formerly a director of Kazu 1 between 1 March 2017 and 11 April 2019.

Recital C to the Deed of Assignment recorded that, prior to their liquidation, Kazu 1 and Kazu had “identified a potential claim they wished to pursue against [MPA] arising out of or in connection with their performance as project manager, quantity surveyor and contract administrator in relation to the design and fit-out by MPA of the premises at 61-63 Beak Street, London W1F 9SL”.

The “MPA Claim” was defined in clause 1.1 of the Deed of Assignment as:

“(1)

Any and all claims, causes of action and/or chose(s) in action which the Companies had, have or may have against MPA; and/or

(2)

Insofar as not included in (1) above any and all other claims, causes of action and/or chose(s) in action of whatever description, whether in law and/or in equity the Companies had, have or may have against MPA and/or any other party (other than the Directors of the Companies)

arising out of or in connection with their performance as project manager, quantity surveyor and contract administer in relation to the design and fit-out of the Premises at 61-63 Beak Street, London W1F 9SL.”

Pursuant to clause 2.1 of the Deed of Assignment, the Companies purported to assign “such rights, title and interest each Company had, has or may have in the MPA Claim”, together with:

The consideration paid by the Claimant under the Deed of Assignment was £1250.00 plus Value Added Tax.

Notice of the Assignment was given by the Claimant to MPA on 1 April 2022 (in the form of it Letter of Claim in these proceedings).

On 14 February 2022, Kazu 1 and Kazu (again, acting by their Liquidator, Mr Yerrill, and again defined as “the Companies”) entered into a Declaration of Trust in favour of the Claimant (here defined as “the Beneficiary”) (the “Declaration of Trust”).

The Recitals to the Declaration of Trust recorded:

The “MPA Claim” had the same definition in the Declaration of Trust as in the Deed of Assignment.

Pursuant to clause 2.1 of the Declaration of Trust, the Companies purported irrevocably to declare that, as from the date of the Declaration of Trust, they held “all rights, title and interest (if any) that each Company had, has or may have in the MPA Claim together with all and any remedies and/or entitlements, whether at law, in equity or otherwise, that the Companies had, have or may have had arising out of in connection with the MPA Claim on Trust for the Beneficiary absolutely.”

Clause 3.1 of the Declaration of Trust provided:

“The Companies and the Beneficiary agree that the Beneficiary shall bring claims and/or legal proceedings arising out of or in connection with the MPA Claim in the name of the Beneficiary only and not in the name of the Companies or the Liquidator.”

The Claimant subsequently issued these proceedings against both MPA and Kazu 1. He alleges that MPA acted in breach of its duties owed to Kazu 1 under the PM Appointment and brings a claim for damages for losses allegedly suffered by Kazu 1 as a result.

It is accepted by the Claimant that he has no claim in his own right. Therefore, he purports to bring this claim either as the Assignee of Kazu 1’s claims against MPA, pursuant to the Deed of Assignment, or alternatively, as the Beneficiary of Kazu 1’s claims against MPA, pursuant to the Declaration of Trust.

In short, Mr Goldkorn alleges that:

The Parties have prepared, and the Court has approved, a statement of agreed facts for the purpose of this trial.

The issues which are of the subject of this trial are foreshadowed at paragraphs 7-10 of the Defence. The Parties then agreed to the listing of the Preliminary Issue which was reflected in the Consent Order made by Eyre J mentioned at paragraph 1 above. Directions were given for the trial of the Preliminary Issue following a CCMS before HHJ Keyser KC (sitting as a Judge of the High Court) on 20 September 2024.