Paolo Castelli SPA v (1) Buckingham Securities & Investments LTD (2) Simon Halabi (2020) QBD (TCC) 12 June 2020

19th Jun 2020

Lucie Briggs successfully acted for the second defendant (Mr Halabi) in proceedings against him in relation to a dispute between Buckingham Securities & Investments LTD (“BSI”) and Paolo Castelli SPA(“PC”).

BSI had engaged PC to carry out refurbishment works at four properties pursuant to four JCT building contracts. The parties to the JCT Contracts were BSI (Employer) and PC (Contractor). PC sought damages arising out of the alleged wrongful termination of two of the contracts and BSI counterclaimed for sums said to be due under the contracts and damages for repudiatory breach.

PC brought proceedings against the second defendant, Mr Halabi, on the basis that he was the “disclosed principal” of BSI.

The second defendant applied to strike out the claim against him under CPR r 3.4(2)(a) on the grounds that the statement of case disclosed no reasonable grounds for bringing the claim.

HELD: The allegation that BSI had entered into the JCT contracts as agent for the second defendant as a disclosed principal was un-pleaded (save for the bare allegation). Having invited PC to present a potential amendment to plead out its claim over the lunch adjournment the court had to take into account the prospects of success of any proposed amendment and its timeliness. No proposed amendment was presented. Whilst there was some evidence about the beneficial ownership of BSI and how the second defendant chose to arrange his affairs, none of that was relevant to the claim that BSI had entered into the contracts on behalf of the second defendant as disclosed principal. Even if the second defendant was the beneficial owner of BSI, that would not make him liable under the contracts between PC and BSI. In addition PC had not brought forward an amendment to plead out how its case against the second defendant was put for the court to consider in the year since the pleadings had been filed. Since there was no coherent pleaded case against the second defendant, no amendment had been put forward in a timely fashion and it was not clear that any amendment with a prospect of success could be put forward, it was right to strike out the claim against the second defendant.

Lucie Briggs instructed by Decimus Fearon LLP for the second defendant.

12 June 2020

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