A firm of solicitors that was ordered to pay more than £1m to pay off a developer client’s mortgage to facilitate the sale of nine affordable housing plots has launched a High Court fight to recover the money.
Willmett Solicitors, which went into administration in December 2009, is suing Howard McPherson. It claims that he was behind Guernsey-based developer Elegant Homes, which went into voluntary liquidation in March.
The firm hopes to recover the £1.35m that Mann J ordered it to pay to enforce a solicitor’s undertaking given by Elegant Homes (
It says that Elegant had a contractual liability to transfer the plots to TVHA free of encumbrances, but that it had refused to meet its liability to pay off its mortgage debt in respect of the site to Bank of Scotland.
TVHA sued Willmett for breach of the undertaking and Elegant for breach of contract, while Willmett counterclaimed against Elegant for an indemnity as well as launching a Part 20 claim against McPherson.
Willmett requires him to contribute under the Civil Liability (Contribution) Act 1978, claiming that he was the directing mind of Elegant and induced or procured it to breach its contract with TVHA.
It claims that McPherson has, directly or indirectly through his associated companies, benefited from Elegant’s failure to repay the money.
He denies the claims arguing that he was never a shareholder and that his interest in the company came about because its share capital belonged beneficially to a company wholly owned by his pension fund.
He says that he has never controlled Elegant or made decisions on its behalf.
The trial, before Lewison J, is scheduled to last four days.
