Alpen Partners Ltd (in Creditors' Winding Up) v Samir Al-Amiri

• Jurisdiction: Jersey
• Court: Royal Court
• Judge: Matthew John Thompson
• Judgment Date: 16 November 2022
• Neutral Citation: [2022] JRC 253

Between

Alpen Partners Limited (In Creditors' Winding Up)

Plaintiff

and

Samir Al-Amiri

First Defendant

and

Rohit Walia

Second Defendant

Graeme Ross

Third Defendant

and

Craig Stewart

Fourth Defendant

[2022] JRC 253

Before:

Advocate Matthew John Thompson, Master of the Royal Court.

ROYAL COURT

(Samedi)

Discovery, Costs and other applications

Authorities

Alpen Partners Limited v Al-Amiri and Ors [2020] JRC 132.

Alpen Partners Limited v Al-Amir [2021] JRC 254.

Sheyko v Consolidated Minerals Limited [2021] JRC 267

Sheyko v Consolidated Minerals Limited [2022] JCA 018

Advocate R. O. B. Gardner for the Plaintiff.

Advocate S. A. Hurry for the First Defendant.

Advocate J. J. McCormick for the Second to Fourth Defendants.

CONTENTS

		Paras
1.	Introduction	1–2
2.	Background	3–12
3.	An application to delay specific discovery	13–26
4.	The second to fourth defendant's application for specific discovery.	27–33
5.	Costs.	34–36

THE MASTER:

Introduction

1 This judgment contains my reasons in respect of various applications that came before me on 7 ^th November 2022 concerning requests for information and discovery. This judgment also contains my reasons in respect of the costs of these applications and other applications that had been resolved apart from questions of costs.

2 In summary the applications I had to consider were as follows:-

• (i) Applications by the first defendant and the second to fourth defendants for the third tranche of security for costs to be increased; the amount was agreed by the time of the hearing and so I only had to deal with the time to make payment and the costs of this application;

• (ii) Applications for requests for information made by the first defendant;

• (iii) An application by the first defendant to vary the timetable by which it had to bring an application for specific discovery;

• (iv) An application for specific discovery brought by the second to fourth defendants; and

• (v) Costs.

Background

3 I am familiar with this matter having previously issued judgments on 6 ^th July 2020 Alpen Partners Limited v Al-Amiri and Ors [2020] JRC 132 and on 19 ^th October 2021 Alpen Partners Limited v Al-Amir [2021] JRC 254. In the latter judgment I set out the background to this matter at paragraphs 4 to 10 which I adopt for this judgment.

4 By the time matters came before me for determination, the nature of the plaintiff's claims had changed because all aspects of the claims originally made by the plaintiff in relation to a property known as the Tring Property had been withdrawn completely. This was reflected in agreed amendments made to the order of justice contained in the plaintiff's re-amended order of justice dated 29 ^th July 2022. The claims that remain concern one property only, known as the Gardeners property.

5 The loss and damage claimed is that as a result of alleged breaches of duty by the directors the Gardeners Property was acquired at a price significantly in excess of its true market value. The plaintiff therefore claims as compensation the difference between the true market value of the price of Gardeners Property and the price paid by the Fund or alternatively, the purchase price of £6million (less the sale price achieved by the Fund) on the basis that the Property was not a suitable investment for the Fund. The plaintiff also seeks to recover fees paid to the first defendant plus interest on a compound basis by reference to earnings the plaintiff would have achieved had it not made the investment.

6 Subsequent to the plaintiff filing a re-amended order of justice the first defendant has filed a re-amended answer. The relevant paragraphs for the purposes of issues I had to determine are as follows:-

“22. Unfortunately, the Fund was virtually still born following these two initial purchases as Mr Walia and Mr Karuvelil were not able to bring any further investors to the Fund largely due to the sub-prime collapse in 2008–09. It is averred that although the Plaintiff has now abandoned its claim with regard to the Pitstone Proposal (Tring) in the Re-Amended Order of Justice dated 29 July 2022 that the purchase and disposal of that Property is still relevant to questions of loss and mitigation of loss in the remaining claim in respect of the Gardeners property.

65. It is averred that the refusal to accept combined offers of purchase of both the Gardeners and Tring properties and/or restricting the ability of the Plaintiff from accepting offers of less than $25m is still relevant to the Plaintiff's failure to mitigate its loss in respect of the Gardeners Property and is unaffected by the decision of the Plaintiff to abandon its claim in regard of the Tring property in its Re-Amended Order of Justice dated 29 July 2022.

66. It is further averred that the Plaintiff has failed to mitigate its loss by:

a. Falling to sell the Gardeners Property at a price which reflected the true market value and development potential of the site:

b. Failing to market the Gardeners Property sufficiently and/or failing to negotiate a price which reflected the development value of the site whether by obtaining a higher sale price or negotiating an overage clause or otherwise; and

c. Failing to sell the Gardeners Property timeously thereby failing to mitigate the interest payments that it seeks in its Re-Amended Order of Justice dated 29 July 2022.”

7 I will deal with each of the applications in turn.

Requests for Information

8 In relation to the requests for information, the outstanding requests by the time the matter came before me were requests 8, 9(k) and 10 as follows:-

“8. The Claim for loss in respect of the Tring Property has been abandoned in the Re-Amended Order of Justice. If the property has been sold please state:

a. The name of the purchaser

b. The purchase price that was agreed

9. With respect to the Tring property if it has been sold please provide full details of how the Property was sold. In this respect please:

k. indicate any offers that were made for the purchase of the property including the name of the party making the offer and the amount of the offer;

10. On the basis that the Plaintiff and the Limited Partners were aware that the Tring property had been acquired for its potential development value please, indicate if any overage agreement was made/ is being made with the purchaser and, if not, why no overage agreement was sought. If so, please provide a copy of any overage agreement or other agreement made or proposed to be made with the Purchaser to provide a deferred payment or payments in connection with the Tring property.”

9 The first defendant's position was that the sale price of the Tring Property, how the sale price came to be agreed, the terms of the sale, and any overage agreement were all relevant to loss. Advocate Hurry accepted that the particular paragraphs which they related to were paragraphs 22 and 65.

10 I do not agree notwithstanding the re-amended order of justice at paragraph 22 that the terms of the sale of the Tring Property are relevant to loss. The justification for this was set out in the first defendant's skeleton argument where it was suggested the information memorandum issued for the Fund was to achieve high returns and therefore the Fund carried a high degree of risk. Any investments made therefore contemplated that some land acquired by the Fund would enhance in value and therefore realise a profit whereas other land might not.

11 The fault with this argument is that, assuming in the first defendant's favour that the Fund's terms contemplated high returns and was therefore a high risk investment, the fact that an investment is high risk and therefore investors might suffer losses does not prevent investors from alleging that certain investments were made in breach of duty and seeking to recover losses made in breach of duty. The present proceedings are not a claim for mis-selling of unsuitable investments; rather they are claims for breaches of duty. No authority was cited to me for the proposition that because an investment is high risk means that profits that might have been made can be set off against losses suffered due to directors acting in breach of their responsibilities. In this case therefore the fact that the plaintiff has now withdrawn its claim in respect of the Tring Property and assuming in the first defendant's favour that the Tring Property sale ultimately made a profit does not prevent the plaintiff from claiming losses in respect of an investment and related costs that it alleges should never have been made. The sale price for the Tring Property and whether any overage arises in relation to that sale is therefore irrelevant to the matters that remain in dispute between the parties and the claim for losses in respect of the Gardener's Property said to have been acquired on the basis of a breach of duty.

12 The only request I did allow in part was request 9k that the first defendant was entitled to know whether there were any offers made to acquire both the Gardeners and Tring Property together which might be relevant to loss or a duty to mitigate loss. This was an issue expressly raised by paragraph 65 of the re-amended answer. I therefore allowed request 9k on this narrow basis only.

An application to delay specific discovery

13 In an Act of Court dated 6 ^th October 2021 I ordered the parties...