Rael Hodes & Anor v Jack Frankel & Ors
[2024] EWHC 1311 (Ch)
RAEL HODES v JACK FRANKEL
1 March 2023
[2023] EWHC 442 (Ch)
High Court
Someone lent money with conditions. Those conditions weren't met, but everyone acted like they were. The lender wants their money back, but the borrowers say everyone agreed it was a different deal, so the judge is letting them argue that in court.
Key Facts
- •Rael Hodes (Claimant), a South African high net worth individual, lent £650,000 to Jack Frankel and Jacob Dreyfuss (Defendants), English property developers, under a personal loan agreement (PLA).
- •The loan was to be an interim measure while negotiations proceeded for a larger investment in the Defendants' SPV, Edgewater Hampshire Ltd.
- •The PLA contained a condition precedent: a loan agreement, supplemental waterfall agreement, and shareholders' agreement between the lender and the SPV.
- •The condition precedent was not met, but the Defendants claim the parties proceeded under the assumption that a larger investment was made, with the PLA funds effectively discharged.
- •The Defendants claim that the Claimant received dividends and participated in share dealings as if the larger investment had happened.
- •The Claimant claims the PLA loan is repayable as the condition wasn't met.
Legal Principles
Summary judgment can be granted if the claimant has no real prospect of success or the defendant has no real prospect of successfully defending the claim.
Civil Procedure Rules (CPR) Rule 24.2
The court must consider whether the claimant has a realistic (not fanciful) prospect of success; a realistic claim is more than merely arguable.
Easyair Ltd v Opal Telecom Ltd [2009] EWHC 339 (Ch) and AC Ward & Sons Ltd v Catlin (Five) Ltd [2009] EWCA Civ 1098
Estoppel by convention and/or representation can be a successful defense if the parties proceeded on a common assumption to the detriment of the defendant.
Case law discussed within the judgement
A defense of discharge or release by accord and satisfaction can succeed if there's an agreement and consideration, inferable from conduct.
Case law discussed within the judgement
Outcomes
Summary judgment granted to the Claimant on the limited issues of whether the Company Transactions were 'completed' and on 'election/affirmation'.
The Company Transactions were not completed; thus the defenses based on their completion failed.
Claimant's application for summary judgment dismissed in all other respects.
The Defendants have a real prospect of successfully defending the claim based on estoppel by convention and/or representation and/or release by accord and satisfaction.