Former Mayfair agent Charles Price has lost a legal battle with retail investment company Tradegro (UK) over access to almost £650,000 held in the client account of the lawyer of his former company Wigmore Street Investments (in administration) (WSI).
The cause of the dispute goes back to 2003, when Tradegro and WSI, then called Real Estate Property Corporation, entered into a share purchase agreement for the buy-out of Tradegro’s
Under the agreement, Tradegro provided WSI with a tax indemnity and WSI was to pay Tradegro certain “additional consideration”.
WSI successfully sued Tradegro for the tax indemnity and was awarded £647,098.
However, following judgment, Tradegro threatened a freezing injunction in respect of the money because it believed that the additional consideration payable by WSI would exceed that sum and there was a risk that the money would be dissipated by WSI in the meantime.
Tradegro paid the moneys into the client account of Olswang, who was acting for WSI, on the basis of an undertaking given by the firm that it would hold the money until WSI had paid to Tradegro any additional consideration determined to be payable.
WSI subsequently went into administration and, in 2009, the additional consideration was calculated at £2.4m.
Tradegro argued that it should receive the £647,098, while Price argued that it should be paid to WSI.
Ruling in favour of Tradegro, Peter Smith J said that it was “perfectly appropriate” for Olswang to be ordered to pay the money to Tradegro: “It would not have been appropriate, in my view, to order payment to WSI because that would have enabled it to escape from the consequences of the undertaking that Olswang freely gave on its behalf.”
Tradegro (UK) Ltd v Wigmore Street Investments Ltd (in administration) and others Chancery Division (Peter Smith J) 7 July 2010.
John
