England and Wales High Court (Commercial Court) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT

		Royal Courts of Justice Strand, London, WC2A 2LL
		08/11/2011

MR JUSTICE BURTON :

1. The Claimant, for whom Ian Mill QC and Leona Powell have appeared, brings an application under Part 24 for summary judgment against the Defendant as guarantor of two Facility Agreements between the Claimant and companies in the Group (the MBI Group) of which the Defendant is the controlling shareholder, which companies I shall call JJW and AJWA.
2. The Agreements were entered into by the companies and the guarantees given by the Defendant between April and September 2008. There is no dispute as to the existence or validity of the Facility Agreements or the guarantees, or the demands thereunder, and it is accepted by the Defendant that some €121m and US$22m remain due and unpaid.
3. The resistance to the Claimant's application has been presented by Catharine Otton-Goulder QC, leading Sarah Ford, with ingenuity and determination, by reference to an original Defence and Counterclaim prepared by previous Counsel, and three subsequent draft amendments, Version 2 being a draft Amended Defence (without a counterclaim) prepared just prior to the hearing, Version 3 being produced over the adjournment between the first hearing (fixed for half a day and adjourned part heard) and the restored hearing, and Version 4, produced at the outset of the adjourned hearing, both of the latter versions restoring a Counterclaim, although limited to a Counterclaim by the Defendant for "damages in the same quantum as his liability, if any, under the … guarantees".
4. I shall summarise the matters which Ms Otton-Goulder submits show that the Defendant has a real prospect of successfully defending the claim, alternatively sufficient within Miles v Bull [1969] 1 QB 258 (supplemented by the adjusted requirement under CPR Part 24.2(b), by the addition of the word "compelling" to the pre-CPR jurisprudence) that there "ought for some other [compelling] reason to be a trial". They are:

i) Estoppel, with which I shall deal first.

ii) An implied term (pleaded in Versions 3 and 4) by reference to the alleged role of a Mr Salim Khoury ("the Khoury case").

iii) An implied term (pleaded for the first time in Version 4) by reference to alleged claims in respect of Forex Trading performed through the Claimant Bank ("the Forex case").

Estoppel

5. The circumstances can be shortly set out. By the middle of 2009, the Claimant Bank was beginning to be concerned about repayment of the loans under the Facility Agreements, and a number of discussions took place between the Claimant and the Defendant and his Group about a possible alternative method of securitisation of assets of the MBI Group by way of re-financing. This related to two residential housing compounds located in the Kingdom of Saudi Arabia ("the Jadawel Compounds"), belonging to a company in the MBI Group, and let to the Ministry of Defence and Aviation ("MODA") of Saudi Arabia. The method of proposed securitisation was the issuance of a Sukuk, a form of financial instrument similar to a bond, but compliant with Sharia law. The proposed Sukuk transaction required a lead manager, and the Defendant was in discussion with another bank, BNP Paribas, about its becoming lead manager, which bank gave a powerpoint presentation on 8 March 2010, setting out a possible structure for a proposed transaction. The Claimant was also very keen to act as lead manager, but only on the basis of exclusivity: and what was eventually agreed on 17 March 2010 was the appointment of the Claimant as lead manager on the basis of such exclusivity, but for a limited period of 3½ months – to 30 June 2010 – during which time they would be able to see if they could put together the transaction.
6. Two agreements were entered into on 17 March 2010:

i) 'Islamic Financing Proposal: Sukuk Proposal for Jadawel Compounds' made between the Claimant and Jadawel International Ltd and MBI International Inc (BVI) & Partners ("MBI International") (together called the "Company"). By Clause 2.2(d), the Company and the Claimant as Lead Manager agreed that the Lead Manager would have an exclusive mandate to arrange the Transaction, and the Company agreed that neither it nor any of its affiliates would negotiate with anyone else. The Transaction was, by Clause 5, conditional upon a series of matters set out in subparagraph (a) to (g), the first of which was "the successful completion of due diligence as the Lead Manager shall in its individual discretion deem necessary". In particular there was, by Clause 15, an Indicative Term Sheet, which contained a number of conditions precedent, including the need for specific satisfactory written confirmations (inter alia) from the Company and MODA.

ii) A Side Letter between the same parties, which provided, in material part, as follows, by way of a letter from the Claimant, signed by the Claimant and the two companies (there described as "MBI and JWIL") under the heading "Sukuk Financing for Jadawel Compounds":

"We refer to the mandate letter dated 17 March 2010 (the "Mandate Letter") pursuant to which Standard Bank plc ("Standard Bank") was appointed to act as Lead Manager of the above mentioned financing.

The parties to this letter acknowledge and agree that the appointment of Standard Bank was made based upon the understanding that on or prior to 15 April 2010 Standard Bank shall confirm in writing to MBI and JWIL:

(a) that it commits to underwrite at least USD 150,000,000 of the Sukuk instruments to be issued under the financing and that all credit committee and similar authorisations required by Standard Bank to underwrite the transaction have been obtained subject to standard conditions related to market conditions, documentation and no material adverse change; and

(b) that Standard Bank will provide a bridge facility to MBI in an amount to be agreed to be secured over the 2011 rental payment for the Jadawel complexes in a manner which is Sharia compliant and which will not prejudice the successful completion of the Sukuk issue, which facility may be drawn down by MBI (or an affiliate) in full no later than 15 April 2010.

The parties acknowledge and agree that in the event that these conditions are not satisfied on or prior to 15 April 2010 then MBI and JWIL shall be entitled to terminate the appointment of Standard Bank forthwith and the liability of MBI and JWIL shall in such circumstances be limited to the pro rata temporis amount of the break-off fee incurred between the date of this letter and the termination date together with all out of pocket expenses as set out in the Mandate Letter.

Standard Bank confirms that this letter is not a formal offer of finance, is indicative only and is subject to all internal approvals.

...

Please confirm your agreement to the terms of this letter by signing where indicated below.

This letter is governed by and should be construed in accordance with English law."

7. As to what happened thereafter:

i) Pursuant to subclause (b), by which the Claimant was to provide a bridge facility in an amount to be agreed, Mr McCaig, on behalf of the Claimant, by email of 22 March, wrote to the Defendant offering "subject to all internal approvals, due diligence, market conditions and documentation" a bridge facility of up to US$20m in the week of 7 April, which bridge would be "repaid out of the proceeds of the Jadawel Compounds financing", by way of a first priority perfected pledge over the next rental payment on the Jadawel Compounds, falling due in 2011.

ii) Due diligence however was not successful. In evidence unchallenged before me, Mr Richards, of the Claimant's solicitors, explained in detail in his first affidavit of 13 August 2010 ("Richards I") at paragraph 41ff, how key due diligence issues were not satisfactorily answered, and a "critical list [of] due diligence requests and actions" is exhibited. On 20 May 2010, after a meeting on 17 May, the Claimant wrote to the Defendant confirming that his companies were released from any exclusivity obligation in relation to the securitisation.

iii) The exclusivity period therefore ended, as it happens, more than a month early, after two months rather than 3½, and the Claimant Bank did not proceed with the Sukuk transaction as lead manager, nor was the bridging loan consequently provided or taken up. The unamended Defence and Counterclaim (Version 1) contained a Counterclaim whereby, at paragraph 35, the Defendant sought "an order of specific performance from the Court directing that the parties to the executed mandate proceed to the issue of the Sukuk in the terms as set out in this executed agreement and the associated side letter". This is no longer pursued.

8. The estoppel case, as put forward at the time of the issue of the Claimant's application under Part 24, was as pleaded in Version 1 of the Defence, as follows:

"7. … it is admitted that the Defendant … has previously supplied a personal guarantee … Notwithstanding this admission the Defendant will state that the Claimant is estopped from enforcing the terms of this breach against the Defendant in his capacity as guarantor in consequence of unequivocal assurances made to the Defendant by the Claimant representative agreeing to a complete standstill of these three facility loans pending the execution of a new 'Sukuk' refinancing proposal in which the Claimant was to act as lead manager. The terms of this Sukuk and of the associated assurances made to the Defendant in consenting to the standstill arrangement in relation to the three loans otherwise capable of recall are set out in the particulars of defence below.

...

22. On 17 of March 2010 the parties … executed a signed mandate agreement in addition to a side letter which set out the terms of the financing and securitization …

...

24. Throughout the course of this meeting [17 March 2010] David [McCaig] made unequivocal assertions to the Defendant confirming his commitment to successfully negotiating the terms of the Sukuk issue. In response to these assertions the Defendant agreed to the terms of the side letter which was duly executed in consequence.

…

27. Following a meeting in or around April 2010 held at the Defendant's Paris residence, Mr [McCaig] again issued unequivocal assurances to the Defendant that the Claimant Bank remained completely committed to the execution of the Sukuk issue and the associated bridging loan and underwriting pledge as set out in the side letter to be read in conjunction with the mandate document. During this meeting the Defendant was also assured in absolute terms that the existing loan facilities (which form the basis of this claim) would be placed on 'standstill' pending the execution of the Sukuk issue and the bridging finance which in turn would be applied to extinguish these loans."

9. Then as to reliance and equity:

"29. In direct response to the assurances personally made to the Defendant and reaffirmed in the email referred to in the previous paragraph to this defence, the Defendant was left in no doubt that the Claimant Bank remained committed at all material terms to the execution of the proposed Sukuk issue. In consequence to these unequivocal assurances the Defendant invested complete reliance upon the strength of these assurances and in doing so proceeded on the assumption at all material times that the Claimant would honour the terms of the refinancing proposal accordingly.

…

33. Regardless of the Claimant's inexplicable withdrawal [from] the terms of the Sukuk issue, the Defendant will state that in placing complete reliance on the former's pledge to abide by the terms of the Sukuk issue … the Defendant has consequently suffered detriment in the following terms. The Defendant in placing complete reliance on the Claimant's assurances has been deprived of the opportunity of pursuing the proposed Sukuk issue with [BNP Paribas].

34. Accordingly, the Defendant will rely on the equitable relief that gives rise to a promissory estoppel. Namely the Claimant [is] estopped from enforcing the terms of the guarantee provided by the Defendant in respect of the three facility loan in consequence of their unequivocal assurances that the recall and repayment demand otherwise arising in respect of these facility agreements would be placed on 'standstill' pending the execution of the Sukuk issue and the associated bridge financing."

10. The alleged representation was thus made after the Sukuk Mandate and the Side Letter were entered into – certainly not at the meeting of 17 March – and was inextricably tied up with an assurance or promise that the Claimant would proceed with the Sukuk transaction, which formed the basis of the counterclaim referred to above.
11. The estoppel now pleaded (in Versions 2, 3 and 4) is based upon a representation said to have been made at the meeting on 17 March 2010 when the Mandate and the Side Letter were signed. The pleading, which entirely supersedes Version 1, is as follows in paragraph 12:

"12. At a meeting which took place on 17 March 2010 at the Paris offices of Clifford Chance LLP between the Claimant and the Defendant Mr David McCaig the Claimant's Head of Securitisation, following an hour long conference call with the Management of the Bank, made an unequivocal oral representation to the Defendant ("the Representation") that if the Defendant appointed the Claimant as Lead Manager of the Sukuk Proposal and conferred upon the Claimant an exclusive mandate to arrange the contemplated financing, then the Claimant would:

(a) Refrain from enforcing payment under either the Amended First Facility Agreement, the Second Facility Agreement, the Amended Third Facility Agreement or the First, Second and Third Personal Guarantees; and

(b) Provide the Defendant bridging finance of up to US$150 million by no later than 15 April 2010, to be applied in part to repaying the Amended First Facility Agreement, the Second Facility Agreement and the Amended Third Facility Agreement and in part to support the ongoing business operations of MBI Group."

12. Reliance and equity (said to amount to detriment) follow in paragraphs 13 and 16:

"13. In reliance on the Representation, on 17 March 2010 the Defendant signed a mandate letter on behalf of Jadawel and MBI Group appointing the Claimant as Lead Manager in respect of the Sukuk Proposal and conferring upon the Claimant an exclusive mandate to arrange the contemplated financing ("the Sukuk Mandate") and a side letter concerning the grant of US$150 million in bridging finance ("the Side Letter").

…

16. As a consequence of his reliance on the Representation, the Claimant has suffered detriment. Had the Defendant not signed the Sukuk Mandate in reliance on the Representation, he would have obtained the contemplated financing from BNP Paribas alternatively from another finance provider. That opportunity had been lost by the time discussions between the Claimant and the Defendant concerning the Sukuk Proposal broke down. Having engaged in lengthy and detailed negotiations with BNP Paribas but then ultimately granted the Sukuk Mandate to the Claimant, the Defendant's commercial relations with BNP Paribas had been damaged and he could not revert to them and request that they reopen negotiations concerning the Sukuk Proposal. Further, by the time the discussions between the Claimant and the Defendant broke down, it had become public knowledge that MBI Group was experiencing financial difficulties which were directly caused by the failure of Standard Bank to deliver the bridging finance, and alternative financial providers were not prepared to enter into negotiations concerning the Sukuk Proposal. As a consequence of the absence of the contemplated financing, the financial difficulties of the MBI Group were materially aggravated and compounded."

13. The evidence as to what is alleged to have been said on 17 March 2010, such as to amount to the pleaded representation, is at paragraphs 48 to 50 of the Defendant's Fifth Affidavit:

"48. Mr Khoury brought Standard Bank to my apartment in Paris on the 15^th March 2010 requesting me to sign the Sukuk Mandate. As I was busy that day we reconvened at the Paris office of Clifford Chance on the 17^th March. During this meeting Mr McCaig indicated to me that the demand letters were being sent because I had not agreed to sign the Bank's mandate letter for the Sukuk proposal. He made a representation to me to the effect that "If you sign a mandate letter regarding the Sukuk, we will stop sending you the demand letters". It was made very clear to me that if I signed the Sukuk Mandate then the Bank would not seek to enforce the Personal Guarantees.

49. I insisted that $150 million Bridge Financing be provided by the end of March. The Bank's representatives adjourned to discuss the matter and returned after an hour with news that they could provide the Bridge Financing by 15^th April. I was under the impression that approval had been obtained and that the Bridge Financing would be forthcoming.

50. On the basis of their assurances and representations on 17 March 2010 I signed the mandate letter for the Sukuk and the side letter which confirmed US$150 million Bridge Financing (the "Side Letter") … The financial security of the Group heavily relied on the $150M being made available to me within the timeframe assured by Standard Bank. There were caveats in the language of the Side Letter, but I had been assured in no uncertain terms by the Bank that if I signed the Sukuk Mandate, Standard Bank would fulfil its obligations to provide the Bridge Financing and thus it would not call on the Loan Facilities or respective Personal Guarantees. It was on these oral assurances I entered into the Sukuk Mandate."

14. I shall return to the question of whether what is said to have been said can justify the pleaded representation, but the matter was not left there. In answer to the forceful case made by Mr Mill, on behalf of the Claimant, that it is wholly unlikely that a representation was made (if such be alleged) that the Claimant would not enforce the debt or the guarantee for an unlimited period in return for a conditional and short-lived period of exclusivity, Miss Otton-Goulder put forward a case which is not contained in any of the various versions of the Defence (and not deposed to by any witness for the Defendant); that the representation must be taken to have been as to not enforcing the loan and guarantees until 15 April (the date mentioned in the Side Letter), and that it is and was inequitable for the Claimant to enforce its rights even after that date without putting the Defendant into the position that he would have been in had the bridging finance and/or the Sukuk Transaction proceeded. I will return to this case.
15. Careful consideration was given before me to the communications which followed after the meeting of 17 March:

i) By an email of 24 March 2010, Marina Snaith, of the Claimant, who was not present at the meeting on 17 March, referred to the fact that the JJW Facilities "remain in default, due and payable as per the letters of demand dated 26 February 2010". Ms Otton-Goulder says that the reservation of the Claimant's rights and remedies, expressly set out in the last paragraph of that email from Ms Snaith, is "too late, since it post-dates the representation on 17 March 2010".

ii) Ms Snaith writes again to the same effect, by email of 16 April 2010, referring to the "frustration" of the due diligence process, the fact that the "only reliable source of repayment" of the JJW loans was the Defendant's personal guarantee, and that, if the securitisation failed to progress, repayment under his personal guarantee would be the only available course. Again, all of the Bank's rights and remedies were expressly reserved.

iii) Mr Lewis of Clifford Chance responded to that message by an email to Mr McCaig of 17 April 2010. He expressed the Defendant's surprise and disappointment to receive Ms Snaith's message, because the Defendant had "had the impression, based on the document signed on 17 March", that the Sukuk would go forward, with the effect of both re-financing the Claimant's exposure and raising additional finance for the MBI Group in the context of maintaining a long-standing relationship, and he was now concerned at the Bank's apparent reaction to the due diligence. Mr Lewis continued:

"The Sheikh is severely disappointed because his impression was that the appointment of Standard Bank to arrange the sukuk both superseded your previous correspondence regarding the letter of demand and was entered into with a view to arranging a bridge facility for the sukuk and maintaining a long-term relationship between Standard Bank and the MBI Group … He feels particularly let down to receive this type of communication on 16 April 2010, i.e. one day after he expected to receive the proceeds of the bridge facility and confirmation of your underwriting commitment for the sukuk … The Sheikh would appreciate that Standard Bank clarifies its intentions urgently. If Standard Bank as an institution wishes to pursue the mandate to a successful closing, he is willing to invest the time, bank fees and legal costs necessary to achieve a successful capital markets action. If this is not the case, he will have no alternative than putting an end to your mandate, finding other solutions to the medium-term financing needs of the group and finding a way of ending the relationship with Standard Bank in an orderly and amicable manner."

iv) In paragraph 14(a) of Versions 2, 3 and 4 of the Amended Defence this email is relied upon as "record[ing] the Defendant's contemporaneous understanding", although the word used by Mr Lewis, as set out above, was not understanding but impression. However, the email is also persuasively relied upon by Mr Mill, because Mr Lewis does not state that, at a meeting at his offices on 17 March 2010, any such representation as is now relied upon was made, and there is no suggestion in the letter that the Claimant is not entitled to pursue its remedies in respect of the facilities or the guarantees.

v) Ms Snaith responds, by email of 19 April 2010, materially as follows:

"First, the bank's ability to underwrite the sukuk and to provide a bridge loan is predicated on the positive outcome of the financial and legal due diligence. The purpose of my letter to the Sheikh dated 16 April 2010 was to highlight the outstanding matters that hinder the process, and to seek his assistance in clarifying them.

…

Thirdly, the bank's rights and remedies with regard to the existing JJW and AJWA facilities and the continuing breaches … of those facilities, have been, and remain, fully reserved. This was confirmed to the Sheikh as recently as on 24 March 2010 – after the sukuk mandate was signed on 17 March 2010 …

However, without prejudice to the rights and remedies available to Standard Bank, it remains Standard Bank's intention at present to assist MBI Group's liquidity by arranging a sukuk … Please note however that … the ability of Standard Bank to underwrite the sukuk and to provide a bridge loan remains subject to us being satisfied with legal and financial due diligence in respect of such matters.

In the meantime in order to provide the Sheikh with assurances of [the Claimant's] commitment to continued co-operation and to facilitate a successful and speedy completion of the securitisation, we may be willing to consider entering into a standstill [my underlining] or similar arrangement with regard to the defaulted JJW and AJWA Facilities, subject to a successful resolution of all the outstanding issues indicated in my letter dated 16 April 2010. Pending such a resolution and arrangement, and for the avoidance of doubt, all rights and remedies available to Standard Bank remain fully reserved."

This is the first mention of a proposed standstill, and Mr Mill submits that it is clear that, in all subsequent references to a standstill (contrary to the submission of Ms Otton-Goulder), it is apparent that it is to this proposed standstill that reference is being made, and not to any suggested oral representation on 17 March 2010.

vi) Mr McCaig himself writes an email to Mr Lewis on 19 April 2010, which confirms that the Claimant Bank is still "fully committed to devoting the necessary time and resources to finalising both a bridge facility and a longer-term financing solution for the MBI Group", but cross-refers to Ms Snaith's email and reiterates that the Claimant's rights and remedies are expressly reserved.

vii) Mr Lewis's response of 23 April 2010, thanking Mr McCaig and Ms Snaith for their emails, states:

"We have the impression that these put the relationship between MBI and Standard Bank back on the right track in the sense of working constructively with a view to the standstill, the bridge facility and the successful closing of the sukuk Transaction so as to permit re-financing of all Standard Bank's exposures to MBI. In this context, the Sheikh was encouraged by the proposal to fully document the standstill arrangements in relation to the JJW and AJWA Facilities pending the closing of the sukuk …

… [The Defendant] feels that it is not healthy to be discussing on the one hand how to best document the parties' understanding regarding the standstill and how to progress on the sukuk and on the other hand to be sending communications to Ernst and Young which appear to suggest a different agenda. The Sheikh and MBI wish that Standard Bank confirms its intention to pursue the constructive approach suggested in the email … With this in mind, the Sheikh has asked to request you to provide MBI with your written proposals for the terms of the standstill agreement as soon as possible."

viii) This email (wrongly described as dated 22 April) is relied upon in paragraph 14(b) of the draft Defences (Versions 2 - 4). Mr Mill submits that it is clear that the proposed standstill is that which was suggested by Ms Snaith in her email, to which this was a response.

ix) This is made clearer by reference to Mr Lewis's subsequent email of 14 May 2010 to Ms Snaith (copied to Mr McCaig) referring to a proposed meeting on 17 May: "We understand that the object of the meeting is to discuss next steps and in particular the formalisation of the standstill agreement proposed in our earlier exchanges of correspondence" [my underlining].

x) That meeting occurred on 17 May, attended among others by the Defendant, Ms Snaith and Mr Lewis. The Minutes of the meeting, taken by the Claimant's solicitor, but not suggested to be challenged, read in material part:

"[The Defendant] then referred to an email to Clifford Chance [plainly that set out in subparagraph (v) above] which suggested there would be a standstill and that he thought that the Bank was coming to the meeting today to discuss the standstill. [The Defendant] acknowledged that the proposed offer of standstill was expressed to be subject to certain conditions. [Ms Snaith] said that the standstill was subject to certain conditions and that no standstill had been agreed. [The Defendant] said that he did not wish to have a dispute with the Bank, and that he would contact other banks to see if they would agree to do the securitisation … [The Defendant] said that he had always acted in good faith and that he would never deny his liability to meet his payments. MBI said that he always told the Bank that the cash would come in 2011. MBI said that pledges had been granted to the Bank but that his only source of repayment would be from the securisation."

xi) The Defendant himself wrote a lengthy letter to the Chief Risk Officer, Ms Renel, at the Claimant Bank, dated 26 May 2010, responding to the letter dated 20 May 2010, referred to in paragraph 7(ii) above, which terminated the exclusive mandate. It concluded:

"Now that your Bank is not willing anymore to proceed neither with the Sukuk Transaction nor with the bridge financing, it is clear that, as a consequence of your changing your views and not delivering the financing we were expecting on the basis of our conversations and your commitments, the MBI Group has lost time and costs with no corresponding improvement of its currently available cash position and thus suffers from a significant prejudice. Accordingly, we need as a matter of urgency to work with another financial institution on a Sukuk issue or some other form of asset-back financing relating to the compounds. We are confident that there will be other institutions willing to provide this finance however these kinds of arrangements take time to document …

I would therefore suggest that, in order to save time and in anticipation of our next meeting, you provide us with a draft standstill agreement which could be acceptable by both parties."

The Defendant himself thus made no reference to the alleged oral representation on 17 March 2010.

xii) Finally there is the Minute of the meeting of 28 May 2010 which followed, in which, without dissent from the Defendant or his advisers, Mr Richards is recorded as stating that "if discussions with regard to repayments were made at the meeting … this was clearly without prejudice to the Bank's rights to receive and demand payment in full" and Ms Renel emphasised that "the simple fact was that the loans were overdue and must be repaid".

16. Mr Mill further submitted in his skeleton argument, by reference to paragraph 50 of Mr Richards' first witness statement, and neither the Defendant nor Ms Otton-Goulder engaged with this, that: "The Defendant continued to make promises and proposals in respect of repayment of the underlying loans long after it became clear that the Claimant had suspended negotiations in relation to the Sukuk Transaction. This is completely inconsistent with a belief that there had been a complete standstill in relation to those obligations". Continued promises of repayment were made by the Defendant and those on his behalf on 9 June, 23 June, 1 July, 7 July and 12 July 2010.
17. In the light of this, Mr Mill submits that there is not any realistic prospect of success for the alleged defence of estoppel, if necessary drawing comfort from a similar conclusion reached by Moore-Bick J (on an application to set aside a default judgment) in International Finance Corp v Utexafrica Sprl [2001] CLC 1361:

i) There is no reference to any alleged oral representation on 17 March 2010 anywhere in the detailed communications which I have set out above. It is, submits Mr Mill, inconceivable that either the Defendant or Mr Lewis or both of them would not have referred to it at some stage, but the only reference is to the subsequent proposal for a standstill agreement, which in the event never eventuated. There is not only no evidence from Mr Lewis now produced, but, submits Mr Mill, it is clear from his own communications, set out above, that he would not now be able to assert the existence of that of which he made no mention previously, when one would have expected him to do so.

ii) The conduct of the Defendant was entirely inconsistent with there being, or having been, such a representation, as set out above. When it came to these proceedings, the Defence served did not rely on such a representation on 17 March 2010. Without any explanation in the evidence, Ms Otton-Goulder has simply submitted that the pleading was settled by previous Counsel without a full appreciation of the documentation, but it was subject to a statement of truth, and, if the Defendant had believed that there had been such a representation, he would have so instructed at that stage.

iii) The only evidence that is now put forward as to what was said on 17 March is in the passage from the Defendant's Fifth Affidavit, set out in paragraph 13 above. Clearly if something along the lines of "if you sign a mandate letter regarding the Sukuk, we will stop sending you the demand letters" was said, that would not amount to a promise or representation or understanding as to not enforcing the guarantee and, as set out above, was clearly at no stage so understood by the Defendant or his advisers.

iv) Ms Otton-Goulder points out that there is no evidence from Mr McCaig as to what occurred on 17 March 2010. That is, to an extent, met by the fact that, when the summary judgment was launched, there was no case put forward based upon anything said on 17 March 2010, and the then amended Defence was sufficiently met by the statement (by reference to the correspondence which I have summarised above) that "no standstill was ever agreed" (paragraph 49 of Mr Richards' first witness statement). But Mr Mill submits that Mr McCaig's position is entirely clear from the correspondence, and that there is in fact no case to answer as to what was said.

18. I find Mr Mill's submissions, set out above, convincing, and the contemporaneous evidence (including that of Mr Lewis) overwhelmingly inconsistent with the existence of an alleged representation leading to an estoppel. But quite apart from the factual context, there is the need for Ms Otton-Goulder to be able to build upon such facts as could be found to establish an arguable estoppel. I refer to paragraph 14 above. I agree with Mr Mill that it is inconceivable that there could be, by implication or otherwise, spelt out of what occurred, a representation that the Bank would not enforce its right under the loans or guarantees, simply in return for the opportunity to have an exclusive period of 3½ months to try to put together the Sukuk Transaction, always subject to due diligence, which, in the event, proved impossible. It would effectively be 'purchasing' an option on the possibility of the Sukuk Transaction for 3½ months, in return for giving up their rights to the loans and guarantees. The impossibility of such a scenario was recognised by Ms Otton-Goulder in argument, and she formulated the case which, as I have pointed out, in paragraph 14 above, is still not pleaded, although it could have surfaced in either Version 3 or Version 4, both of which post-dated her new case.
19. Ms Otton-Goulder's submission is that there should be implied, into the representation upon which she relies, the proposition that the Claimant would refrain from exercising its rights until 15 April 2010, being the date mentioned in the Side Letter, as the date by which the Claimant would commit (conditionally) to the Sukuk and provide a bridge facility (in an amount to be agreed) or MBI and JWIL would be entitled to terminate the exclusive appointment. She submits that the implied representation was that the Defendant would refrain until 15 April, and if, by that date, the bridge facility and/or Sukuk Transaction were not in place, then the Claimant would refrain from enforcing its rights until they were. For understandable reasons Ms Otton-Goulder concentrates primarily on the provision of the bridge facility, rather than the Sukuk Transaction, but it is plain that both were conditional, and in any event the bridge facility was "in an amount to be agreed". Even assuming that there was any materiality in an implicit representation that there would be no enforcement of rights until that date, that would only be the starting point of Ms Otton-Goulder's submissions, which would require an implied representation that the Claimant would not enforce its rights until 15 April, but that such otherwise short term estoppel would be implicitly extended beyond 15 April in certain eventualities. The way Ms Otton-Goulder puts it is that it would be inequitable for the Claimant to enforce its rights thereafter.
20. However:

i) No case is put forward, certainly none pleaded, as to why it would be inequitable for the Bank not to be entitled to enforce its rights after 15 April, particularly now that the case has been abandoned as set out in the counterclaim in Version 1 (see paragraph 7(ii) above). It is difficult to see how it could ever have been asserted that the Claimant was in some way obliged to continue with the Sukuk Transaction (or to provide some yet to be agreed bridging facility which was itself dependent upon there being a Sukuk). Nothing inequitable can be spelt out of the Claimant's decision not to proceed with it in the light of the due diligence (it not being suggested that the Claimant was in bad faith in this regard). There is simply nothing pleaded or suggested which could raise such an equity.

ii) As Ms Otton-Goulder was driven to accept, this would be an entirely novel form of equitable estoppel. She referred to Chitty on Contracts at Vol I 3-096-7 as to the effect of the estoppel doctrine being "generally suspensive", but having "extinctive effect in exceptional cases". But the cases there referred to are quite different. They are cases where an apparently timeless representation is given that a party will not enforce its rights, which is normally only suspensive (i.e. for example notice can be given to end its effect) but can in certain circumstances be extinctive if there were equitable grounds for concluding that the representor should not be entitled to terminate an apparently timeless representation. This case however is one where the original representation, if made, either has no time limit or would implicitly contain a time limit – 15 April – and equity is suggested to have the effect of impliedly continuing the representation. This is not a question of a representor not being allowed to resile from, or retract, a representation, but of his being compelled to extend it. Not only would this constitute what Ms Otton-Goulder herself conceded would be a new chapter or section in Chitty, but would involve the use of estoppel, contrary to its nature, as a 'sword, not a shield'. It is difficult to see that even the law of contract would accommodate the proposition without the incorporation of some fairly extensive implied terms.

21. Mr Mill also submitted that the evidence of reliance and what is called "detriment" (although strictly speaking no detriment is necessary in order to establish an estoppel, but only inequitability) is exiguous and inconsistent as between the original and amended pleadings and the evidence of the Defendant, and in particular there is no evidence of any efforts to find "another financial institution" (as proposed by the Defendant in his letter of 26 May), whether BNP Paribas or otherwise, not to speak of any evidence of failure of those efforts. The Defendant's companies were entitled to terminate on 15 April in the terms of the Side Letter and to revert to BNP Paribas, but they did not, and gave no evidence at all in that regard. But as I am entirely satisfied that the defence of estoppel is not arguable by reference to the basic requirement for a material representation, I do not need to consider those issues further.

Khoury

22. I turn then to the issue of Mr Khoury. In his Fifth Affidavit at paragraph 24, the Defendant states that Mr Salim Khoury began working for the MBI Group in April 2007, and that he represented the Group at the time of the proposed Sukuk Transaction. It was Mr Khoury who introduced the Defendant to Standard Bank. In Richards I, in support of the Claimant's application for a freezing order against the Defendant, as part of the 'full and frank disclosure' incorporated in the Affidavit, Mr Richards referred to "allegations of conflict of interest" in paragraphs 209.13ff. He stated that Mr Khoury "acts as an independent (and non-exclusive) introducer of clients, and has had dealings with Standard Bank (and, presumably, numerous other financial institutions) in that capacity. He receives a commission in respect of introductions made and, accordingly, has received payments from Standard Bank in the past. It was in fact Mr Khoury who introduced Sheikh Mohamed to Standard Bank". This statement was suggested by the Defendant (in paragraph 50 of his Second Affidavit) to be inconsistent with an earlier email by Ms Snaith of 24 June 2010, but that is plainly not so, as that email was a statement, made to a Mr Yussouf of the MBI Group, that "no payments were made to Salim Khoury from MBI or JJW accounts".
23. Just prior to the hearing, after request by the Defendant's solicitors, Mr Cooke of the Claimant produced a non-exclusive Introducing Agreement dated 30 June 2007, extended by letter of 3 June 2008 until 13 June 2009. He stated, after making relevant enquiries, that:

"Mr Khoury's role as an introducer of clients to the Bank terminated at the end of that contractual extension (namely 13 June 2009). I have made enquiries with the members of the Bank securitisation team, including David McCaig and Michael Brunke, who were actively involved in the Sukuk Transaction, and they have confirmed to me that Mr Khoury did not receive any commission in relation to the Sukuk Proposal or the Sukuk Mandate from the Bank nor would he have stood to receive any commission had the transaction progressed, since his contractual relationship with the Bank had, by the time the Sukuk Mandate was entered into, come to an end."

24. By reference to that agreement, Ms Otton-Goulder submits that Mr Khoury would have had an entitlement to commission in respect of the Sukuk Mandate, had it proceeded, even though his contract had terminated a year earlier, but this proposition is contested by Mr Mill (supported by his evidence), and no payment was in fact made.
25. The Defendant during the adjournment between hearings produced Mr Khoury's contract with MBI International (the company right at the top left hand corner of the corporate organogram of the MBI Group of July 2011 exhibited by the Defendant to his fourth affidavit). The consultancy agreement between MBI International and Mr Khoury was dated 12 October 2007 (although it is recited that he had provided his services since 1 March 2007). It provided that, although his consultancy was non-exclusive, he should not place himself in a conflict of interest with the Company. It was terminated on 2 June 2010.
26. The Sukuk Proposal, signed on 17 March 2010, recited, at Clause 3.2, that "the Company shall be responsible for the payment of a fee in an amount equivalent to 0.4% of the final size of the Transaction to Mr Salim Khoury, financial advisor to the Company" – MBI and JWIL.
27. In Version 2 of the draft Defence, the following was pleaded under the heading "Mr Khoury's fundamental conflict of interest":

"18. At all material times, Mr Khoury acted as primary negotiator on behalf of the Defendant in the discussions which took place between the Claimant and the Defendant concerning the Sukuk Proposal and thereafter the Sukuk Mandate. The Defendant placed a great deal of trust and confidence in Mr Khoury and relied heavily on his assistance.

19. Unknown to the Defendant, Mr Khoury was also party to an arrangement with the Claimant whereby he acted as an independent, non-exclusive introducer of clients in respect of which he was paid commission for introductions made. It was Mr Khoury who initially introduced the Claimant and the Defendant. The Claimant failed at any material time to disclose the existence of its arrangement with Mr Khoury to the Defendant.

20. Pending full and proper disclosure, the Defendant does not know the precise terms of Mr Khoury's arrangement with the Claimant, whether Mr Khoury received payments from the Claimant in respect of business obtained by the Claimant from the Defendant, the amount of such payments, the frequency of any such payments, or the matters which triggered an entitlement to any such payments.

21. In the premises, Mr Khoury was acting at all material times under a fundamental conflict of interest. The Defendant reserves the right to plead further to these matters on full and proper disclosure."

28. This formed the basis of a submission by Ms Otton-Goulder by reference to Miles v Bull, namely that (to quote Megarry J (at 266D-F) [sitting, unusually, as a QB judge in the vacation], by reference to the then wording of RSC Order 14, "there ought for some other reason to be a trial; and the reason is that of justice … the case was "too near the bone for Order 14" … Order 14 is for the plain and straightforward, not for the devious and crafty. There is here a case for investigation, and so not for summary decision".
29. In Version 3, a Defence was now pleaded, by reference to (paragraph 8A) an implied term of each of the facility agreements and guarantees, "such term to be implied on the grounds of business efficacy and/or on the basis that it was so obvious as goes without saying, that the Claimant would not enter into and/or maintain in force and effect, implement or enforce any agreement such as the Introducing Agreement dated 13 June 2007 … with an individual such as Mr Khoury who, to the Claimant's knowledge as Head of Corporate Finance, Banking Relations and Personal Adviser to the Defendant held a senior and influential position within the MBI Group and/or in relation to the Defendant personally and had sole contact with the Claimant on behalf of the MBI Group and/or the Defendant, and who would thereby be subject to a fundamental conflict of interest".
30. The breach and its consequence was then pleaded in paragraphs 18 to 24 of Version 3 as follows:

"18. Wrongfully and in breach of the Implied Term, on 13 June 2007 the Claimant entered into an Introducing Agreement with Mr Khoury ("the Introducing Agreement") pursuant to which Mr Khoury was entitled to the payment of commission in respect of each transaction concluded between the Claimant and an introduced client. The Defendant will refer to the Introducing Agreement as necessary for its full terms and effect.

19. Mr Khoury introduced the Claimant and the Defendant, with the consequence that Mr Khoury was entitled to the payment of commission in respect of each transaction concluded between the Claimant and the Defendant.

20. The Introducing Agreement placed Mr Khoury in a position of fundamental conflict of interest, in particular:

(a) In relation to the Amended First Facility Agreement, the Second Facility Agreement and the Amended Third Facility Agreement, a conflict between his own personal financial interest in receiving commission in respect of such transactions and his fiduciary duties to MBI Group by virtue of his role as Head of Corporate Finance and Banking Relations; and

(b) In relation to the Personal Guarantees and the FOREX trades carried out on the Defendant's behalf, a conflict between his own personal financial interest in receiving commission in respect of such transactions and his fiduciary duties as the Defendant's personal advisor.

21. As a consequence of the Claimant's breach of contract, the Defendant has suffered loss and damage.

Particulars of loss and damage

22. By reason of the Introducing Agreement, Mr Khoury had a personal financial incentive to cause the Defendant to grant the Sukuk Mandate to the Claimant, since the Sukuk was a transaction in respect of which commission would have been payable to Mr Khoury pursuant to the Introducing Agreement. Mr Khoury therefore informed the Claimant of the Defendant's plans to grant the Sukuk Mandate to BNP Paribas and exerted pressure on the Defendant to grant the Sukuk Mandate to the Claimant.

23. Had Mr Khoury not so acted, the Defendant would have granted the Sukuk Mandate to BNP Paribas and would have thereby obtained financing with which to discharge the Amended First Facility Agreement, the Second Facility Agreement, the Amended Third Facility Agreement and the First, Second and Third Personal Guarantees.

24. The Defendant is entitled to damages in the same quantum as his liability, if any, under the First, Second and Third Guarantees, and will set off such damages in diminution or extinction of the Claimant's claim."

31. This must be seen together with a case which emerged in Version 4 of the draft Defence, with which I shall deal separately below, about Forex transactions, which highlights concerns about the basis of these late defences:

i) Version 4 included a new pleaded case in respect of Forex, which begins:

"25. From late 2007 to early 2008, Mr Khoury alone on behalf of the Defendant and/or MBI 2 Partners (UK) Ltd ("the Company") (one of those within the MBI Group) conducted Forex trades performed through Standard Bank."

In paragraph 4(b) of the Sixth Affidavit of the Defendant, he stated:

"Mr Khoury was the only person from the MBI Group that had any involvement with these Forex trades and was, as described above, the only person dealing with Standard Bank."

ii) In the Defendant's Eighth Affidavit, dated 20 October 2011, and served on the adjourned hearing, it is stated:

"3. It is suggested that the Forex trading was not undertaken by me, or on my account. In support of this, Standard Bank has provided a copy of an account opening form in the name of MBI. In my view this suggestion is wrong. First, all of the funds provided to Standard Bank for the purposes of Forex trading were sourced from my own personal funds. Second, MBI is a private company that has no income. As Standard Bank knows, MBI could not have possibly funded the Forex trading."

These statements are, to say the least, puzzling, and appear incorrect, as will be seen.

iii) In Richards I, in support of the freezing order, disclosure was made of "possible counterclaims against [the Claimant]".

"209.9 … It has been intimated in the meetings with [the Defendant] that he believes that counterclaims exist against [the Claimant] in relation to (unrelated) … FX … transactions, which he conducted with [the Claimant] between 20 November 2007 and 15 January 2008 …

209.10. During that period, it appears that [the Defendant] suffered losses in the region of $32 million. It is possible that [the Defendant] may seek to raise some form of counterclaim in relation to the FX trading that he conducted with [the Claimant].

…

209.12. In any event, the FX trading account with [the Claimant] was set up by MBI. As such, any losses suffered through that trading account was suffered by MBI and not [the Defendant] personally, or the Borrowers. As such, no counterclaim would be available to reduce the liability of the Borrowers under the Facilities, or [the Defendant] under the Personal Guarantees."

32. The account opening form in respect of the account on which these losses are said to have been suffered was disclosed by the Claimant. It is with MBI International.
33. MBI 2 Partners (UK) Ltd, the subject of the pleading at paragraph 25 of Version 4, referred to in paragraph 31(i) above, was simply the "communication address".
34. The only signatory according to the Corporate Signatory Authorisation and Authorisation to Trade Foreign Exchange was not Mr Khoury but the Defendant as "Chairman & CEO".
35. MBI International is certainly not "a private company that has no income", which "could not have possibly funded the Forex trading". I have referred, in paragraph 25 above, to the corporate organogram. Its accounts are exhibited. Its total assets are US$4 billion, and, far from "no income", it has net income of US$301m. This cast real doubt on the credibility of this avalanche of late evidence and draft pleading.
36. Against this background I consider the case made by reference to the implied term. It is noteworthy, as Mr Mill pointed out, that there is no assertion of procurement by the Claimant Bank of breach of any term of the contract between Mr Khoury and his employer, because the employer is, as set out above, MBI International, not a party to the action, and further such a tort would require proof of knowledge on the part of the Claimant or at least recklessness as to the terms of such contract.
37. The pleaded case is of an implied term in the 2008 Facility Agreement/Guarantees, entered into a year after the June 2007 Introducing Agreement, and a good six months after the execution of the Consultancy Agreement between the Defendant and MBI International. The Facility Agreements were in respect of, and resulted in, loans by the Claimant Bank to JJW, which have still not been repaid, and to guarantees of them by the Defendant. It seems to me impossible to argue that, by reference to such contracts, already entered into, there could be such an implied term – said to be so obvious that it "goes without saying" – as is pleaded in paragraph 8A of Versions 3 and 4.
38. In any event, the pleading of breach of that implied term is, in my judgment, impossible. As set out in paragraph 30 above, the plea in paragraph 18 of Versions 3 and 4 is that in June 2007 the Claimant entered into the Introducing Agreement in breach of the implied term of contracts which were not executed until ten months later. Further, the loss and damage is hopelessly speculative. It suggests that, as a result of such breach, the Defendant suffered loss and damage because "the Defendant would have granted the Sukuk Mandate to BNP Paribas and would have thereby obtained financing with which to discharge" the loans and guarantees. There is no evidence to support this at all, not least as referred to in paragraph 21 above, and certainly not in the light of the (unchallenged) difficulties which the Claimant faced by way of due diligence in trying to progress the Sukuk Transaction.

FOREX

39. This is an even later afterthought, emerging only in Version 4. There are said to have been breaches of implied terms of the contract by which the Claimant Bank carried out or supervised the Forex trading, by reference primarily to exceeding of internal limits. The Forex losses resulting are said to have been in a net sum of €55m, and, by dint of a pleading in paragraphs 28 and 29 of Version 4, this is said to lead to the Claimant's claims for more than twice that amount failing for circuity, although Ms Otton-Goulder did appear to concede in the course of argument that in fact it could only amount to a partial offset.
40. Whereas there were plainly Forex losses, and it may be that somebody may be able to bring an action against the Claimant Bank in respect of them, this claim is a really difficult one for Ms Otton-Goulder to attempt to set up by way of defence in these proceedings with any degree of reality. I have already referred, in paragraph 31(i) above, to the fact that the Bank's Forex customer is said to have been "the Defendant and/or MBI 2 Partners (UK) Ltd", when it was plainly not the latter and, if the Account Opening Form is correct, it was not the former. There also seems considerable doubt cast upon the suggestion that it was Mr Khoury who carried out the trades, when the Defendant was the only authorised signatory, although it may be that this case is put forward only in order to justify why it is that the Defendant himself should have so apparently little knowledge of the transactions that (if the Claimant be right) he himself caused to be carried out on MBI's account.
41. In any event, Ms Otton-Goulder sought to make, at the adjourned hearing, an application for an order, by reference to CPR Rule 34.3(2)(b) and/or (c), for a Mr Nic Contomichalos to give evidence. He is an ex-employee of the Claimant Bank and is said to have relevant knowledge to give with regard to the Forex transactions, which he is or feels constrained from giving by obligations of confidentiality owed to the Claimant Bank.
42. This is a power which is obviously primarily relevant to witnesses for trial and not for applications like Part 24, where the evidence is conventionally by witness statements, but in Barratt v Shaw & Ashton [2001] EWCA Civ 137 Mance LJ obiter at paragraph 13 postulated as a classic example of such procedural course a situation in which a party wished to pursue or resist an application for summary judgment under CPR 24, and could not adduce the necessary evidence for that purpose without having the evidence taken on deposition of some witness. It seems to me clear that the position would be the same as the practice followed by Goff J in Grindlays Bank v Henson 17 July 1980 (Commercial Court) when disclosure was ordered against a claimant prior to an Order 14 hearing at the instance of a defendant who asserted that there were or might be documents in the possession of the claimants which would support his asserted defence.
43. But the issue here is to what defence would the evidence of Mr Contomichalos be relevant such as to justify such exceptional, or classic, course. His evidence might be relevant in order to speak to the fact that the Forex trading was (contrary to the assertions of the Claimant Bank, as stated in paragraph 209.11 of Richards I, which are not addressed by the Defendant), such as to render them liable for any losses. But the question here is who the account holder is who suffered those losses, when the only evidence before me from either side (notwithstanding the fact that bank statements must unquestionably have been supplied (and were supplied according to Ms Snaith's email of 24 June 2010, referred to in paragraph 22 above)), is that the Account Opening Form is in the name of MBI International, and the Defendant was signatory as its Chief Executive.
44. It seems to me that, if I came to the conclusion that there is an arguable counterclaim by the Defendant (though it would, as discussed above, only partially offset the claim) then I could give leave to defend without the course of obtaining evidence from Mr Contomichalos. I would only take the unusual course at this interlocutory stage of adducing oral evidence from Mr Contomichalos if I were satisfied that there is a real prospect that he would unlock an arguable defence not otherwise sufficiently available, but of which there was at least a reasonable prospect.
45. I turn then to the way in which the case is put to see whether there could be such an arguable (partial) defence of off-set. In argument the possibility that MBI International was the alter ego of the Defendant was floated by Ms Otton-Goulder. No such case is pleaded, but it seems wholly unarguable in the light of the organogram and, particularly, the accounts referred to in paragraph 35 above.
46. What is pleaded is (in paragraph 28(a) of Version 4) that "the Defendant and/or the [wrong] Company has/have sustained [the net €55m losses]". And then, in the balance of paragraph 28, as follows:

"(b) That net liability was then covered by the Amended First Facility Agreement between JJW and the Bank, and the Defendant's personal guarantee in respect of that facility;

(c) The Bank's claim herein is in respect of the Amended First Facility Agreement between JJW and the Bank, and the Defendant's personal guarantee in respect of that facility, which would not have arisen but for the Bank's breaches of contract set out above.

(d) In the premises, the Defendant's losses include all his liabilities (including all interest and costs in relation thereto)."

With the conclusory paragraph:

"29. In the premises, the Bank's claim in respect of the Amended First Facility Agreement between JJW and the Bank, and the Defendant's personal guarantee in respect thereof fails for circularity."

47. What the Defendant actually says, in paragraph 14 of his Seventh Affidavit, is "Following these losses, Mr Khoury arranged for the net liability (€55m) to be met by a Standard Bank loan. In particular, he arranged for the JJW loan of €55m (the amended First Facility Agreement) indirectly to be deployed to cover these Forex losses".
48. The word "indirectly" is not there explained, but already raises questions as to what is meant in paragraph 28(b) by "that net liability was then covered by" the JJW loans. The circle is sought to be squared by Ms Otton-Goulder, who, in the course of argument, submitted, as she really had to, that JJW "effectively took an assignment" of any Forex claims: i.e. JJW agreed to pay off the loans, and in return MBI International (or the Defendant) assigned to JJW claims for those losses against the Claimant Bank. But there is no evidence of that at all. It is pure speculation and legal theorising.

Conclusions after the hearing

49. I am entirely satisfied that there is no realistic prospect of success for the asserted defences of estoppel and set-off by way of counterclaim in respect of breaches of implied term.
50. Had I concluded that there was a defence that might be just about arguable or was bordering on the fanciful, I would have ordered payment into Court. The only evidence that was before me in this regard at the hearing was in the Seventh Affidavit of the Defendant, in which he states, at paragraph 21, that "if I was required to make a substantial payment into court I would need to take immediate steps to dispose of a number of assets … I do not realistically think I could raise more than $50m". The principles that apply are well known, deriving from the House of Lords decision in Yorke Motors v Edwards [1982] 1 WLR 444, the principles in which are said to apply post-CPR by the Court of Appeal in the Anglo-Eastern Trust Ltd v Kermanshahchi [2002] EWCA Civ 198, namely that no order by way of conditional leave to defend should be made which might drive the defendant from the judgment seat or stifle his defence.
51. However, Yorke Motors also makes clear that the funds to which the court must look in so deciding are not limited to his own funds, but the ambit of enquiry will necessarily include what resources he might be able to access. In this regard, at paragraph 10 of his Fifth Affidavit, he states, having exhibited the organogram, to which I have referred above, that "the assets of the MBI Group have continued to perform well over the last financial year and the resulting global profit over the past three years would be close to US$300m". This was sworn as recently as 23 September 2011, and I also take into account the information contained in the MBI International accounts, to which I have referred in paragraph 25 above. Of course, a conditional order would not necessarily mean payment into court, and it could be satisfied by provision of a bank guarantee. I would have taken a great deal of persuasion that, if I were to allow the Defendant not simply a day in court, but many days in court, at a trial to pursue a speculative or fanciful counterclaim and/or to raise a speculative or fanciful defence, not to conclude that it should only be done if the full amount of the claim were secured or a very substantial portion of it. As it happens, this decision does not arise because of the conclusion I have reached that the Defendant has no prospect of success.
52. I turn finally to the Miles v Bull question. It seems to me that this only arises if and when I have reached the conclusion that there is no arguable defence. It is at that stage that I must, if so invited, as I am, consider whether there is "no other compelling reason why the case or issue should be disposed of at a trial". I referred above to the words of Megarry J. He thought that the transaction in that case between the defendant and the plaintiff, at the instance of the defendant's husband, said by the plaintiff to have been a sham with the object of depriving her of her right as against the husband to occupy the property, was one which "in the interests of justice ought to be carefully scrutinised". In this case, I am satisfied that the loans are undoubtedly repayable and the guarantees undoubtedly enforceable, and I am satisfied there is no defence of estoppel. If there is matter to investigate in relation to the role of Mr Khoury, it gives rise to neither of the alleged set-offs/counterclaims in this action, which have been painstakingly put together by Ms Otton-Goulder and her team. After careful consideration I am left with no uneasiness such as was Megarry J in his case, and I do not conclude that there is some other reason for trial, compelling or otherwise.

Postscript

53. At the conclusion of the hearing on 20 October, I left the opportunity to Ms Otton-Goulder to put in expeditiously further evidence on the Yorke Motors v Edwards aspect of whether the Defendant could show that he was in no position to pay the amount of the debt into Court or otherwise secure it. That was all that was envisaged or mentioned, and, although the possibility of conditional leave had been raised at the first hearing (and no dispute raised by Ms Otton-Goulder at that stage to the suggestion that the Defendant would be able to raise the money), I permitted it. To my considerable surprise, instead of an affidavit so limited, there was served, without such permission, on 27 October a ninth affidavit of the Defendant and, extraordinarily, a Version 5 of the Defence. Mr Mill left it to me whether to read this new instalment, while pointing out that it went beyond what was foreshadowed at the hearing. I have considered, having read it, whether it makes any difference to what I have set out above:

i) Estoppel. No new evidence is given relating to the alleged representation (or as to any alleged inequitable conduct by the Claimant). The case to which I refer in paragraphs 19 and 20 above as being unpleaded, despite four versions of the Defence, has now surfaced in Version 5, although still unsupported by any evidence. The pleading of it does not render it any more persuasive, and I remain of the view I set out in paragraph 20 above. I received in tandem with it, without elaboration, a copy of a decision of Mocatta J, The Ion [1982] Lloyd's Law Rep 245. This was a case in which the Claimant charterers would have lost their rights by virtue of a time-bar, but the owners were held to be estopped from relying upon it. This does not assist in an implied extension of the Claimant's alleged implied obligation to refrain from suing after 15 April, certainly where no inequitable conduct is relied upon. The case still fails for the reasons I have given. Although it did not reach me at the time, I was also sent on 27 October, after the hearing, without elaboration, a copy of Birmingham & District Co v L. & N.W. Ry Co [1888] 40 Ch D 268. No conduct by the Claimant is pleaded or suggested, such as there was in that case, to render it inequitable for the Claimant to enforce its rights either before or after 15 April. I refer again to the communications set out in paragraph 15 above. Some extra evidence about the readiness of BNP Paribas to be lead arranger prior to the signing of the exclusivity agreement with the Claimant does not affect my conclusion.

ii) Khoury. A yet more elaborate pleading is produced, but I see no case for any arguable defence of set-off by this Defendant. The pleading of an alleged term is changed, but term, breach, loss and causation of an alleged counterclaim, and one vested in the Defendant, must be, and are not, sufficient to sustain a defence to the claim, once shorn of estoppel.

iii) Forex. MBI 2 Partners (UK) Ltd disappears from the pleading, and MBI International and JJW appear: the fact that it is now said that the Defendant was the source of the monies invested in Forex does not seem to me to be material, particularly in the light of paragraphs 32, 34 and 35 above. But the Forex aspect constitutes the most extraordinary part of the new package of ninth affidavit and Version 5. I referred, in paragraph 48 above, to one of Ms Otton-Goulder's arguments during the hearing as to how there would "effectively have been an assignment" if in some way the abstruse argument, that JJW had somehow "indirectly" covered the losses and had or had had a claim which could be of some benefit to the Defendant, could be pursued in this action. Lo and behold, it is now said that there has been such an assignment on 26 October 2011, notice being given to the Claimant on that day, six days after the hearing, and termination of the argument. If there be such a claim (for less than half of the sum claimed by the Claimant), and such claim was vested in JJW, and has now by this very recent assignment been vested in the Defendant, it can be pursued in another action, but it does not in my judgment begin to found a belated (partial) set-off in this action, not to speak of a defence of circuity.

54. Nothing in the 27 October package causes me to come to any different conclusion from that set out above. This has been followed by further submissions by Ms Otton-Goulder on 1 November, which I have also read. As I have concluded that I am not giving conditional leave to defend, her further submissions on Yorke Motors v Edwards do not arise. A yet further new argument by reference to bad faith and Dubai Islamic Bank PJSC v PSI Energy Holding Co BSC [2011] EWHC 2718 is unpersuasive. I am satisfied that there is no arguable case that the Claimant 'reneged on an oral representation', and the new case is unpleaded.

Conclusion

55. I accordingly give judgment for the Claimant and dismiss the Defendant's application under CPR Rule 34.3. I will ask Counsel to agree an appropriate form of order.