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You are here: BAILII >> Databases >> England and Wales High Court (Commercial Court) Decisions >> Victoria Capital Trust v Emmett [2025] EWHC 1972 (Comm) (30 July 2025) URL: https://www.bailii.org/ew/cases/EWHC/Comm/2025/1972.html Cite as: [2025] EWHC 1972 (Comm) |
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BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
LONDON CIRCUIT COMMERCIAL COURT (KBD)
Fetter Lane, London, EC4A 1NL |
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B e f o r e :
SITTING AS A JUDGE OF THE HIGH COURT
____________________
| VICTORIA CAPITAL TRUST | Claimant/Respondent | |
| - and - | ||
| AARON JOHN EMMETT | First Defendant | |
| - and - | ||
| ANITA EMMETT | Second Defendant/Applicant |
____________________
Francis Collaço Moraes (instructed by TWM Solicitors LLP) for the Claimant/Respondent
Hearing date: 25 June 2025
____________________
Crown Copyright ©
HIS HONOUR JUDGE BAUMGARTNER:
Introduction
Background
Click Group
(a) Mrs Bandak was the Person of Significant Control ("PSC") of Holdings from 1 February 2019 to 11 June 2023;
(b) Mrs Bandak was a director of Holdings from 1 February 2019 to 11 June 2023;
(c) on 27 September 2023, Mrs Bandak approved the 2022 accounts for Holdings for the year ended 31 December 2022. At the time of approval, she had taken control of Holdings;
(d) on 13 September 2023, Mrs Bandak approved the 2022 accounts for Corben Mews for the year end 31 December 2022. At the time of approval, she had taken control of Corben Mews;
(e) Click Above is the parent company of both St Andrews and Corben Mews;
(f) Mrs Bandak was a director of Click Above from 10 August 2023 to 11 June 2024; and
(g) Mrs Bandak was a director of Click Above from 7 August 2023.
Corben Mews Facility Agreement
"6.1 If an Event of Default occurs and has not been waived by the Lender in writing, the Lender may by notice in writing to the Borrower (a) declare that all or part of the Loan is immediately due and payable together with accrued interest and all other amounts outstanding under the Finance Documents; and/or (b) require repayment (immediately or otherwise as the Lender may require) of the Loan together with accrued interest and all other amounts outstanding under the Finance Documents; and/or (c) require that interest is capitalised on such terms as the Lender may specify and/or payable on the Loan at the Default Rate; and/or (d) take any steps to enforce any Security or exercise any rights of the Lender under any of the Finance Documents;"
The "Finance Documents" referred to in Clause 6 include the 28 June 2021 personal guarantee provided by Mrs Bandak.
Guarantee
(a) Clause 2 sets out her obligations as guarantor, including, at sub-clause 2.1, the obligation to pay on demand.
(b) Clause 3.4 provides:
"Before enforcing this Deed, the Lender shall not be obliged to take any action or obtain any judgment or decree, nor make or file any claim in the bankruptcy, sequestration, administration, dissolution or winding up of the Borrower, nor enforce any other security held by the Lender or enforce any other means of claiming payment."
The "Lender" is defined in the parties to the Guarantee as CPF One, the "Guarantor" is Mrs Bandak (i.e., "Anita Emmett"), and the "Borrower" is Corben Mews.
(c) Clause 4.2 provides:
"The Lender shall not be obliged before taking steps to enforce any of its rights and remedies under this Deed:
4.2.1 to take any action or obtain judgment in any court against the Borrower or any other person; or
4.2.2 to make or file any claim in a bankruptcy, liquidation, administration or insolvency of the Borrower or any other person; or
4.2.3 to make demand, enforce or seek to enforce any claim right or remedy against the Borrower or any other person."
(d) Clause 5.3 provides:
"The Guarantor shall:
5.3.1 not without the prior written consent of the Lender dispose of any estate or interest in which it has any legal or beneficial interest in any freehold, tenantable or leasehold property; and
5.3.2 notify the Lender of any acquisition of any estate or interest in which it has any legal or beneficial interest in any freehold, tenantable or leasehold property."
(e) Clauses 15.2 and 15.4 provide for service (and the deeming of such service) of any communication or document on Mrs Bandak at 46 St Quintin Avenue.
(f) Above Mrs Bandak's signature is the following notice, in bold type:
"IMPORTANT NOTICE
It is recommended that a solicitor or other independent legal adviser is consulted before this Deed is executed by the Guarantor. The liability of the Guarantor under this Deed is limited as provided in Clause 2.4. If the Guarantor signs and the Lender is not paid the Guarantor may have to pay instead of, or as well as, the Borrower.
The Guarantor confirms that before he/she signed this document and in relation to its nature, meaning, effect and risks:
1. he/she was recommended to take independent legal advice; and
2. he/she has taken or has had the opportunity to take independent legal advice.
The Guarantor confirms that he/she fully understands the obligations placed upon him/her following his/her signature. The Guarantor has signed this Deed of his/her own free will without duress or undue influence."
Mrs Bandak's signature was witnessed by Ozan Fahri, a partner in the solicitors' firm of Fahri LLP.
Solicitor's Certificate
"1 That I have given my client (the Guarantor) [i.e., Mrs Bandak] a copy of the Facility Agreement [i.e., the Corben Mews Facility Agreement], the Personal Guarantee [i.e., the Guarantee], and the [Corben Mews Charge and the Debenture].
2 That I act as solicitor to the Guarantor.
3 That there was no conflict of interest in acting for the Guarantor.
4 That the loan under the Facility Agreement is for the purpose of the Borrower [i.e., Corben Mews] and the Borrower is the principal beneficiary from the loan under the Facility Agreement and not any other party.
5 That I witnessed the signature of the Guarantor on the Personal Guarantee. For the avoidance of doubt further reference to 'they', 'them' or 'their' in this confirmation shall be to the Guarantor.
6 That the Guarantor is known to us and/or has produced evidence of identity.
7 I explained to the Guarantor that it is a requirement of the Lender that the nature and implications of the Facility Agreement, the Personal Guarantee and the [Corben Mews Charge and the Debenture] are explained to them by a solicitor so that the Lender can be certain that they understand the nature of the transaction and are freely entering into it, so that there can be no dispute in the future as to whether undue influence was placed on them to sign the documents and/or whether they signed them as a result of a misrepresentation(s) or any other legal wrong.
8 I explained the nature of the Facility Agreement, the Personal Guarantee and the [Corben Mews Charge and the Debenture] to the Guarantor and I pointed out the risks of entering into the Personal Guarantee and explained to them that they had a choice whether to do so. They signed the Personal Guarantee and confirmed that they did wish to proceed and that they were content that I should write to you confirming that I had explained the nature of the Facility Agreement, the Personal Guarantee and the [Corben Mews Charge and the Debenture] and other document(s) and the practical implications there may be for them.
9 That the Guarantor appeared to me to understand my advice, which was given at a face-to-face meeting with no other party in attendance, and I had no reason to believe that they did not understand."
Wider factual matrix
November 2019 Facility Agreement
"all present and future monies, obligations and liabilities owed by the Borrower to the Lender, whether actual or contingent and whether owed jointly or severally, as principal or surety and/or in any other capacity whatsoever under or in connection with the [November 2019 Facility Agreement] or this deed together with all interest (including, without limitation, default interest) accruing in respect of such monies, obligations or liabilities."
2019 Charge
Divorce and Financial Remedy Order
(a) defines in paragraph 6 "Click Group Holdings Limited" (i.e., Holdings) as a company in which Mr Emmett and Mrs Bandak were "equal shareholders and directors";
(b) in paragraph 15 declares that they "agree that they are and will continue to be equal shareholders and directors of Click Group Holdings Limited", and that "the parties['] current household income is derived from the income each party receives by way of salary and dividends from" Holdings, and that they would:
"continue to receive a salary and dividends from the company to the extent that they are then each able to independently meet their own outgoings and income needs moving forward, and specifically once the family home [i.e., 46 St Quintin Avenue] has been divided or sold",
as set out further in the order;
(c) in paragraph 16, declares that Mrs Bandak would keep her assets in Belarus which had not been disclosed, but which were believed to be in excess of £1,000,000;
(d) in paragraph 17, declares that Mr Emmett will occupy the basement flat of 46 St Quintin Avenue as his main residence;
(e) in paragraph 21, notes the existence of the November 2019 Facility Agreement under the 2019 Charge, and that Mr Emmett undertook to discharge the November 2019 Facility Agreement;
(f) orders, by consent, in paragraph 23, that 46 St Quintin Avenue shall be held by Mr Emmett and Mrs Bandak as "beneficial tenants in common in equal shares".
May 2021 Facility Agreement
Default
Default Judgment
The Application
"to set aside the Default Judgment obtained by [VCT] against [Mrs Bandak] on 24 April 2024, with regard to (lack of) service and that [Mrs Bandak] has a good Defence to the Claim".
(a) Although she was appointed director of some of the Click Group companies, she was not involved in their activities or the decision-making of the companies.
(b) She placed trust and confidence in Mr Emmett in relation to financial affairs which impacted on their children.
(c) She did not see any application or other document relating to the Corben Mews Facility Agreement.
(d) She signed the Guarantee in the presence of Mr Fahri, a solicitor, but did not receive any advice from him in respect of the Guarantee or an explanation of what the document meant.
(e) Mr Emmett was present at the meeting with Mr Fahri.
(f) She has never had any beneficial interest in Corben Mews.
(g) She has no idea what Corben Mews did with the money it borrowed through the Corben Mews Facility Agreement.
Submissions
Second Defendant
Claimant
(1) There was no relationship of presumed undue influence between Mr Emmett and Mrs Bandak. Over a year prior to the Guarantee, they had divorced and had entered into a Financial Remedy Order in the Family Court which brought about a final settlement between them on all financial matters.
(2) The Guarantee, in the circumstances prevailing, was not a transaction that called for an explanation; i.e. it was not manifestly to Mrs Bandak's disadvantage.
(3) CPF One did not have actual or constructive notice of any undue influence.
(4) In any event, Mrs Bandak had the opportunity to and did receive independent face-to-face legal advice as to the nature and consequences of the Guarantee, prior to entering into the Guarantee.
Legal framework
Set aside
"13.3—(1) In any other case, the court may set aside or vary a judgment entered under Part 12 if—
(a) the defendant has a real prospect of successfully defending the claim; or
(b) it appears to the court that there is some other good reason why—
(i) the judgment should be set aside or varied; or
(ii) the defendant should be allowed to defend the claim.
(2) In considering whether to set aside or vary a judgment entered under Part 12, the matters to which the court must have regard include whether the person seeking to set aside the judgment made an application to do so promptly.
(CPR 3.1(3) provides that the court may attach conditions when it makes an order.)"
Real prospect of success
"may encounter a court less receptive to applying the test in his favour than if he were a defendant advancing a timely ground of resistance to summary judgment"
under CPR r.24.2 (see ED&F Man Liquid Products Ltd v Patel [2003] EWCA Civ 472, per Potter LJ at [9]).
"… where there are significant differences between the parties so far as factual issues are concerned, the court is in no position to conduct a mini-trial: see per Lord Woolf MR in Swain v Hillman [2001] 1 All ER 91 at 95 in relation to CPR 24. However, that does not mean that the court has to accept without analysis everything said by a party in his statements before the court. In some cases it may be clear that there is no real substance in factual assertions made, particularly if contradicted by contemporary documents. If so, issues which are dependent upon those factual assertions may be susceptible of disposal at an early stage so as to save the cost and delay of trying an issue the outcome of which is inevitable ..." (my emphasis).
"It is also necessary to see whether a further opportunity to put in further evidence and/or documents would or could make any difference."
"21. The authorities therefore make clear that in the context of summary judgment the court is by no means barred from evaluating the evidence and concluding that on the evidence there is no real (as opposed to fanciful) prospect of success. It will of course be cautious in doing so. It will bear in mind the clarity of the evidence available and the potential for other evidence to be available at trial which is likely to bear on the issues. It will avoid conducting a mini-trial. But there will be cases where the Court will be entitled to draw a line and say that – even bearing well in mind all of those points – it would be contrary to principle for a case to proceed to trial.
22. So, when faced with a summary judgment application it is not enough to say, with Mr Micawber[[1]], that something may turn up."
Some other good reason
"Rule 13.3(1)(b) has a disjunctive alternative, so that the court may set aside or vary judgment entered in default if it appears to the court that there is some other good reason why the judgment should be set aside or varied or the defendant should be allowed to defend the claim. In my view, [CPR r.13.3(1)(b)] is plainly capable of extending to circumstances where the defendant has not received the claim form and particulars of claim before judgment was entered against him. It is not an absolute right, but does not have to depend on the defendant having a real prospect of successfully defending the claim. The court therefore has sufficient power to do justice in these cases and will, no doubt, normally exercise this discretion in favour of a defendant who establishes that he had no knowledge of the claim before judgment in default was entered unless it is pointless to do so. The defendant, for instance, may have no defence to the claim, but may justifiably want to have the judgment set aside on the basis that, had he known about the claim, he would have satisfied it immediately without having an embarrassing judgment recorded against him. There may also be questions of costs."
Godwin was not a case about setting aside a regular judgment obtained by default, but rather a case where by mistake the claimant had failed to serve the claim form within the permitted time period. The observations made by May LJ were within the context of considering the court's power under CPR r.3.1(2) to grant discretionary extensions of time, but they provide helpful guidance for the court in considering an application under CPR r.13.3(1)(b).
Need to act promptly
Undue influence
"32. The test formulated in [Barclays Bank plc v O'Brien [1994] 1 AC 180] and [Etridge] for situations involving non-commercial sureties was new. It moved away from a test of actual or constructive notice in fixing the bank with knowledge, and introduced a low threshold for putting the bank on inquiry unless further steps were taken to bring home to the surety the risks she was running. [Etridge] was an extension of O'Brien and to the extent that the threshold had been misunderstood, [Etridge] confirmed that the low-level set for triggering a requirement on the bank was much lower than required to satisfy a court that the transaction was in fact procured by undue influence. No factual inquiry or assessment of any kind was required of the bank. Rather, the 'on inquiry' threshold is triggered whenever a wife offers to stand surety for her husband's debts; in other words, in every case where the relationship between the surety and the debtor is 'non-commercial' because the surety is gratuitously taking on a liability to pay a debt on behalf of her husband for which she is not otherwise legally liable. However, the quid pro quo for that low threshold was the correspondingly modest requirement imposed on a bank 'put on inquiry' as to the steps it must take to avoid being affected by the rights of the wife whose consent may have been procured by her husband's wrongdoing. As Lord Hobhouse of Woodborough explained at [108] of [Etridge]:
'... the advantage of this low threshold is that it assists banks to put in place procedures which do not require an exercise of judgment by their officials and I accept Lord Nicholls's affirmation of the low threshold. This, however, is not to say that banks are at liberty to close their eyes to evidence of higher levels of risk or fail to respond appropriately to higher risks of which they have notice.'
33. The steps that must be taken by a bank in these circumstances have been described as 'the Etridge protocol'. Lord Nicholls set them out at [79]. They can be summarised as follows:
(a) The bank must communicate directly with the wife, informing her that for her own protection it will require written confirmation from a solicitor, acting for her, to the effect that the solicitor has fully explained to her the nature of the transaction and its practical implications for her; and that the purpose of this requirement is that she will not be able to dispute that she is legally bound by the transaction once the surety documents are signed.
(b) The bank must ask the wife to nominate a solicitor she is willing to instruct to advise her, separately from her husband, and act for her in giving the necessary confirmation to the bank; that solicitor may be the same solicitor who is acting for the husband but if a solicitor is already acting, she should be asked whether she would prefer a different solicitor.
34. Lord Nicholls made clear that the bank should not proceed with the transaction until it has received an appropriate response directly from the wife. The bank should provide information to the wife about the husband's financial affairs, either directly or through solicitors, and if consent from the husband to do so is not forthcoming, the transaction cannot proceed. In an exceptional case where the bank suspects the wife has been misled (or is not acting of her own free will), the bank must inform the wife's solicitor of the facts giving rise to the suspicion. The bank should obtain written confirmation from the wife's solicitor that the information and necessary advice have been given.
35. Plainly, the risk that the wife's consent has been procured by undue influence or misrepresentation will not be eliminated by compliance with the Etridge protocol. But those steps are liable to reduce it to a level which makes it appropriate for a lender to proceed: see [3], [37] and [148].
36. Finally, Lord Nicholls described the development of the principle in O'Brien in the following way:
'89. ... It is a workable principle. It is also simple, coherent and eminently desirable. I venture to think this is the way the law is moving, and should continue to move. Equity, it is said, is not past the age of child-bearing. In the present context the equitable concept of being "put on inquiry" is the parent of a principle of general application, a principle which imposes no more than a modest obligation on banks and other creditors. The existence of this obligation in all non-commercial cases does not go beyond the reasonable requirements of the present times. In future, banks and other creditors should regulate their affairs accordingly.'"
"30. I return to husband and wife cases. I do not think that, in the ordinary course, a guarantee of the character I have mentioned is to be regarded as a transaction which, failing proof to the contrary, is explicable only on the basis that it has been procured by the exercise of undue influence by the husband. Wives frequently enter into such transactions. There are good and sufficient reasons why they are willing to do so, despite the risks involved for them and their families. They may be enthusiastic. They may not. They may be less optimistic than their husbands about the prospects of the husbands' businesses. They may be anxious, perhaps exceedingly so. But this is a far cry from saying that such transactions as a class are to be regarded as prima facie evidence of the exercise of undue influence by husbands.
31. I have emphasised the phrase 'in the ordinary course'. There will be cases where a wife's signature of a guarantee or a charge of her share in the matrimonial home does call for explanation. Nothing I have said above is directed at such a case.
…
32. I add a cautionary note, prompted by some of the first instance judgments in the cases currently being considered by the House. It concerns the general approach to be adopted by a court when considering whether a wife's guarantee of her husband's bank overdraft was procured by her husband's undue influence. Undue influence has a connotation of impropriety. In the eye of the law, undue influence means that influence has been misused. Statements or conduct by a husband which do not pass beyond the bounds of what may be expected of a reasonable husband in the circumstances should not, without more, be castigated as undue influence. Similarly, when a husband is forecasting the future of his business, and expressing his hopes or fears, a degree of hyperbole may be only natural. Courts should not too readily treat such exaggerations as misstatements.
33. Inaccurate explanations of a proposed transaction are a different matter. So are cases where a husband, in whom a wife has reposed trust and confidence for the management of their financial affairs, prefers his interests to hers and makes a choice for both of them on that footing. Such a husband abuses the influence he has. He fails to discharge the obligation of candour and fairness he owes a wife who is looking to him to make the major financial decisions."
"Undue influence is one of the grounds of relief developed by the courts of equity as a court of conscience. The objective is to ensure that the influence of one person over the other is not abused."
The essence of the presumption is to prevent abuse or wrongdoing; it is not to save the surety from bad judgment.
The test
(1) First, (the burden of proof being on her), that:
(a) immediately prior to the Guarantee, there was a relationship of influence of Mr Emmett (her former husband) over her, her case being that she placed trust and confidence in him in relation to the management of their financial affairs. It is not sufficient to assert that the transaction itself evidences a "relationship of undue influence": see Perwaz v Perwaz [2018] UKUT 325 (TCC) at [41], [43], [71], and [75] per Judge Elizabeth Cooke; and
(b) the Guarantee is one that calls for explanation on the basis that it was "immoderate or irrational" or cannot "be reasonably accounted for on grounds of friendship, relationship, charity, or other motives on which ordinary men act": see Etridge at [21] to [30] per Lord Nicholls (i.e., the transaction is not readily explicable by the relationship of the parties). In this regard, it must be remembered that undue influence will not be presumed by finding a relationship of trust and confidence in the transaction itself.
(2) Second, that CPF One had actual or constructive notice of the presumed undue influence; i.e. CPF One must have had notice of the circumstances from which the presumption of undue influence is alleged to arise.
Where the burden of proof is discharged, this results in a rebuttable evidential presumption which allows the court to infer that the transaction can only have been procured by undue influence. It is then for the CPF One to produce evidence to the contrary to show that the transaction was not procured by undue influence.
(a) the specific steps set out in Etridge do not provide the only route to establishing the absence of procurement by undue influence: see Snell's Equity at paragraphs 8-034 and 8-035; and
(b) the two limbs must not be conflated. For example, in Syndicate Bank v Dansingani [2019] EWHC 3439 (Ch), His Honour Judge Dight CBE (sitting as a Judge of the High Court) was concerned separately with whether (i) the transaction was to the manifest disadvantage of the surety (at [60]), and (ii) the bank was put on inquiry (at [27]). The latter is concerned with the facts "known" to the lender and, the former to whether there is to be presumed undue influence.
"Proof that the complainant placed trust and confidence in the other party in relation to the management of the complainant's financial affairs ...";
see Etridge, at [14] per Lord Nicholls. There must be a relationship of trust and confidence that goes to the management of the affairs of the party complaining. There must be a degree of trust and confidence such that:
"the party in who it is reposed, either because he is or has become an adviser of the other or because he has become entrusted with the management of his affairs or everyday needs or for some other reason, is in a position to influence him into effecting the transaction of which complaint is later made";
see Goldsworthy v Brickell [1987] Ch 378 at 401D. The same test can be applied to the alleged perceived threat.
"The presumption in Class 2B cases [e.g., where the husband and wife are living together in apparent amity, which fall within the general classification of cases giving rise to the doctrine of undue influence], however, is doing no more than recognising that evidence of the relationship between the dominant and subservient parties, coupled with whatever other evidence is for the time being available, may be sufficient to justify a finding of undue influence on the balance of probabilities."
Discussion and analysis
Real prospect of success
Is there a presumed relationship of undue influence of Mr Emmett over Mrs Bandak?
"6. [Holdings] shall mean Click Group Holdings Limited, a limited company of which [Mr Emmett] and [Mrs Bandak] are equal shareholders and directors.
…
15. The parties agree that they are and will continue to be equal shareholders and directors of [Holdings]. The parties current household income is derived from the income each party receives by way of salary and dividends from the company. It is intended that they will each continue to receive a salary and dividends from the company to the extent that they are then each able to independently meet their own outgoings and income needs moving forward, and specifically once the family home has been divided or sold as set out … below."
"Niraj,
YOU placed Anita as a director in August 2023.
I was removed as I was no longer required to represent the companies at that point and I did EXACTLY as asked even when it was against my better judgement.
…
I'm very sorry that Anita is not able to follow the detail of what she's being asked to do, but there's nothing I'm able to do if she's not got experience in the field of being a director a of company.
…"
To me this suggests Mrs Bandak was heeding her father's advice (at least by August 2023), not Mr Emmett's.
Was the Guarantee to Mrs Bandak's manifest disadvantage?
"I did not have any cash savings or other liquid assets of any significant size, so – having been asked – it is therefore correct to say that if ever called upon to meet [the Guarantee] at any time in or after June 2021, there was no way in which I would have the means to do so without sale of [46 St Quintin Avenue] (which would be highly disruptive of my children's stability and education, for a start)."
"6. [Holdings] shall mean Click Group Holdings Limited, a limited company of which [Mr Emmett] and [Mrs Bandak] are equal shareholders and directors."
Accordingly, it was in Mrs Bandak's interest as a 50% ultimate beneficial owner of the Group to ensure the original loan used to develop the Corben Mews Properties was refinanced to prevent the default and subsequent enforcement in respect of that loan, which would have affected the value of Holdings. Mrs Bandak admits that she helped decorate the Corben Mews Properties, and had been to that development and consequently was aware that those properties had been developed, which I infer she must have known required finance.
"The parties agree that [Mrs Bandak] shall retain absolutely all of her assets, whether held in her sole name or jointly with others, in Belarus, full disclosure of which has not been provided in accordance with an agreement between the parties, but which are believed to be in excess of £1,000,000."
"23. With effect from the making of this order the Family Home at 46 St Quintin Avenue, London, W10 6PA shall be held by [Mr Emmett] and [Mrs Bandak] upon a trust of land for themselves as beneficial tenants in common in equal shares …"
4 That the loan under the Facility Agreement is for the purpose of the Borrower [i.e., Corben Mews] and the Borrower is the principal beneficiary from the loan under the Facility Agreement and not any other party.
Was CPF One put on inquiry?
(a) It is CPF One's usual business practice to ensure that anyone who is personally guaranteeing a loan receives independent legal advice.
(b) That happened here with Mrs Bandak. Fahri LLP acted for the borrower, Corben Mews. It also provided advice to Mrs Bandak in respect of the transaction.
(c) The Solicitor's Certificate signed by Mr Fahri (see [?13], above) says that:
(i) Mr Fahri provided copies of the relevant finance documents, including the Guarantee, to Mrs Bandak;
(ii) he acted as solicitor for her;
(iii) the Loan Facility was for the benefit of Corben Mews;
(iv) he identified Mrs Bandak and witnessed her signature;
(v) he explained to Mrs Bandak – it was a requirement of entering into the finance documents that the nature and implications of the documents were explained to her by a solicitor so that the lender CPF One could be certain she understood the nature of the transaction and was entering into it freely. Ms Rickman points out paragraph 7 of the Solicitor's Certificate, where Mr Fahri confirmed:
"I explained to the Guarantor [Mrs Bandak] that it is a requirement of the Lender [CPF One] that the nature and implications of the Facility Agreement, the Personal Guarantee and the [Corben Mews Charge and the Debenture] are explained to them by a solicitor so that the Lender can be certain that they understand the nature of the transaction and are freely entering into it, so that there can be no dispute in the future as to whether undue influence was placed on them to sign the documents and/or whether they signed them as a result of a misrepresentation(s) or any other legal wrong.";
(vi) that Mr Fahri believed Mrs Bandak understood the advice; and
(vii) that the advice was given at a face-to-face meeting and there was no other party in attendance.
(d) Her understanding has always been that, ultimately, Mrs Bandak was a 50% beneficiary of the Click Group in equal measure to Mr Emmett. Mrs Bandak was asked to provide the Guarantee because of her interest in the Click Group and because CPF One's due diligence checks showed that Mrs Bandak was a person of significant control of the Click Group (although I note this does not appear to have been the case until after the Guarantee was signed).
(e) Mrs Bandak's account that she had nothing to do with any of the Click Group at any relevant time does not reflect her experience of dealing with this loan, the Click Group, or Mrs Bandak.
Mrs Bandak acted of her own free will
"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.]"
(1) Mrs Bandak met with Mr Fahri at a face-to face meeting, contrary to what Mrs Bandak says in her first witness statement.
(2) Mr Fahri gave Mrs Bandak copies of the Corben Mews Facility Agreement, the Guarantee, the Corben Mews Charge, and the Debenture. This too is contrary to what Mrs Bandak says in her first witness statement.
(3) The legal effect of those documents – including the Guarantee – were explained to Mrs Bandak by Mr Fahri, and she advised that she wished to proceed with the Guarantee and understood Mr Fahri's advice. This too is contrary to what Mrs Bandak says in her first witness statement.
Conclusion
Some other good reason
"We act for [VCT] and we enclose a letter of today's date sent to [Corben Mews].
As you can see from the letter, the sums due to our client under the [Corben Mews Facility Agreement] are now due and payable. You have personally guaranteed the repayment of those sums by virtue of the [Guarantee]. You are therefore personally liable under that Agreement for the sums set out in the enclosed letter.
…
We reserve all of our client's rights to take action against you if full payment of the outstanding sums is not made immediately. For the avoidance of doubt, by virtue of clause 3.4 of the [Guarantee], our client is not obliged to take any action against Corben Mews before pursuing you personally under the terms of the guarantee.
We recommend that if you do not understand anything set out in this letter that you seek independent legal advice immediately."
"At the date of this letter:
1. Our client is currently owed circa £1.167m in respect of the sums due under the [Corben Mews Facility Agreement]. We enclose a redemption statement showing the calculation of that figure.
2. You are liable to repay that sum to our client now – in its entirety.
3. Our client is not obliged to take any action against any other party – including you or Mr Emmett – before taking action against you to recover the debt.
The Loan has now been outstanding for a significant period of time – it should have originally been repaid to our client on 27 June 2023. In our earlier letters we have already demanded repayment of the Loan from you in accordance with your obligations under the [Guarantee]. You have not responded to that correspondence and you have not repaid the Loan."
It continued:
"You should respond to this letter, enclosing the completed Reply Form, Financial Statement form and the documentation requested above, within 30 days of the date of this letter.
If you do not respond to this letter within the prescribed timeframe, our client reserves all its rights, including the right to commence proceedings (without further reference to you should that prove necessary and appropriate) to obtain a court judgment requiring you to pay the Debt plus further interest and costs that are continuing to accrue.
Ignoring this letter may lead to our client starting proceedings against you and may increase your liability for costs.
We strongly recommend that you seek independent legal advice on the content of this letter immediately."
Need to act promptly
Discretion
Disposition
Note 1 A character in Charles Dickens’ 1850 novel David Copperfield. Micawber is identified with the optimistic belief that “something will turn up”, i.e. someone who lives in hopeful expectation. In the novel Micawber is committed to debtors’ prison (then known as the King’s Bench Prison) after failing to meet his creditors’ demands. [Back]