Case No: C30BM120
Neutral Citation Number: [2017] EWHC 504 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
BIRMINGHAM DISTRICT REGISTRY

Rolls Building, Royal Courts of Justice
7 Rolls Buildings, Fetter Lane
London, EC4A 1NL

Date: 15/03/2017

Before :

MR JUSTICE NEWEY

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Between :

	NORTHAMPTON BOROUGH COUNCIL	Claimant	
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	(1)	ANTHONY MICHAEL CARDOZA
(2)	DAVID ANTHONY CARDOZA
(3)	CHRISTINA LORAINE CARDOZA	Defendants	

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Mr James Morgan QC (instructed by Osborne Clarke LLP) for the Claimant
Mr Mohammed Zaman QC (instructed by RadcliffesLeBrasseur) for the First Defendant
Miss Emma Edhem (instructed by Mishcon de Reya LLP) for the Second and Third Defendants

Hearing dates: 7 & 8 February 2017

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Judgment
Mr Justice Newey : 
1.	The first and second defendants, Mr Anthony Cardoza and Mr David Cardoza (to whom, without disrespect, I shall refer as “Anthony” and “David”), are former directors of Northampton Town Football Club Limited (“the Club”). These proceedings are brought by the claimant, Northampton Borough Council (“the Council”), as assignee of the Club. The application with which I am concerned now is for summary judgment. The Council contends that, as to £180,000 of the sums it claims, Anthony and David have no real prospect of successfully defending.
Basic facts
2.	Anthony and David are father and son. Mrs Christina Cardoza, the third defendant, is married to David.
3.	The Cardozas first became involved with the Club in December 2002, when Anthony bought a majority of its shares. Anthony and David both became directors, and David was the Club’s chairman. According to David, he entered into a service agreement with the Club on 16 April 2004 under which he was entitled to an annual salary of £250,000.
4.	The Club’s accounts to 30 June 2002 had shown net liabilities of £2,490,094. The accounts for the next year, to 30 June 2003, put the net liabilities at £3,262,689, following a loss of £950,510. In subsequent years, too, there were losses, with the result that by 30 June 2008 the net liabilities figure had risen to £7,771,674. Five years later, on 30 June 2013, after the Club had swung between profits and losses in the intervening years, it was recorded as having net liabilities of £7,470,745.
5.	The Club’s accounts for the year to 30 June 2014, which were approved by the board on 30 March 2015, showed a loss for the period of £853,407. As a result, the figure for net liabilities had increased to £8,220,153. The “tangible fixed assets” included £2,384,004 for “Assets under construction”.
6.	A note to the Club’s 2014 accounts stated as follows:
“The financial statements have been prepared on a going concern basis. They indicate that £5.2million has been loaned to the company by the Chairman at the balance sheet date, in total £6.9million has been loaned to the company by its directors.
Due to the continuing support of the Chairman and the other directors who are owed money by the company together with the company’s bankers, the directors believe that it is appropriate to prepare the financial statements on the going concern basis, which assumes that the company will continue in operational existence for at least 12 months following the date that these financial statements have been signed.
If the Chairman and other creditors of the company were to withdraw their support, the company would be unable to continue in operational existence for the foreseeable future, adjustments would have to be made to reduce the balance sheet values of assets to their recoverable amounts, and to provide for further liabilities that might arise, and to reclassify fixed assets and long-term liabilities as current assets and liabilities.”
Something along these lines had also been contained in each previous year’s accounts back to those for 2002-2003.
7.	As is apparent from the note quoted in the previous paragraph, the Club received funding from the Cardozas and companies associated with them. I was taken to a schedule giving figures for the Cardozas’ loan accounts. This indicates that they were owed some £1.3 million by the end of 2002-2003 and that the total had climbed to more than £6,858,816 by 30 June 2008. It fluctuated up and down slightly in the next years, and was £6,894,643 on 30 June 2014.
8.	The Club leased its stadium from the Council, which also owned some adjoining land (“the Adjoining Land”). In 2013, the Cardozas agreed to cooperate with a Mr Howard Grossman and a group of companies associated with him called the “County Group” in a project to improve the stadium and develop the Adjoining Land. The Club appointed 1st Land Limited (“1st Land”), a company linked with Mr Grossman, as the main contractor for the work at the stadium, and 1st Land in turn appointed Buckingham Group Contracting Limited (“Buckingham”) as a sub-contractor. A company called County Developments (Northampton) Limited (“CDNL”) was set up to pursue the development of the Adjoining Land. The shares in CDNL were held by Anthony and David (as to about 50% between them) and by Mr Grossman and someone associated with him (as to the balance).
9.	On 13 September 2013, the Council entered into a conditional contract for the sale of the Adjoining Land to CDNL. Shortly afterwards, the Council agreed to lend the Club up to £7.5 million by a facility agreement dated 18 September 2013 for work on the stadium. In the following year, by facility agreements dated 14 April 2014 and 23 July 2014, the Council agreed to make a further loan of £1.5 million for the stadium work and to lend up to £4.5 million for the development of hotel accommodation. Between September 2013 and July 2014, the Council made advances totalling £10.25 million pursuant to the facility agreements.
10.	In September 2014, however, Buckingham gave notice of its intention to suspend performance on the basis that it was owed some £1.4 million. It subsequently issued an application for administrators to be appointed in respect of 1st Land, and administrators were in the event appointed on 2 January 2015.
11.	By then, in November 2014, the Club had issued proceedings in the Commercial Court against, among others, Mr Grossman and 1st Land in relation to the development project. The Club alleged that money provided by it had been used for purposes unconnected with the development plans.
12.	The dispute was resolved by a deed of settlement dated 13 January 2015 to which, among others, the Club, the Cardozas, Mr Grossman and CDNL were parties. The settlement involved a parting of the ways between the Cardozas and Mr Grossman and enabled the former to take control of CDNL.
13.	Between January and August of 2015, the Club paid sums totalling £180,000 to David. The £180,000 is made up of payments of £20,000 on 16 January, £35,000 on 2 March, £3,000 on 16 March, £30,000 on 20 April, £40,000 on 26 May, £32,000 on 7 August and £20,000 on 14 August. According to David, the practice was for him to be paid salary by reducing the amount owing to him on his loan account. Each payment thus served both to discharge in part the Club’s indebtedness on the loan account and to represent salary. The effect of this arrangement, David has said, is that he was “effectively foregoing [his] salary, and instead being repaid the monies which [he was] owed by the Club in respect of [his] directors’ loan account i.e payments which [he had] previously made to the Club simply being repaid as opposed to receiving further sums by way of salary”.
14.	The Club also received money from David and a company associated with him. David himself made a payment to the Club of £35,000 on 27 February 2015, and Artefact Property Investments Limited, of which David appears to have been a director and shareholder, paid the Club £35,000 on 3 February and £140,000 on 27 February. Further, Anthony made £25,000 payments to the Club on 3 February and 6 July 2015, and according to David sums of £75,000 (on 7 July 2015) and £265,000 (on 11 August 2015) were paid to the Club at his direction or that of his father by, respectively, Peldon Hall Farms Limited and CDNL.
15.	In October 2015, a winding-up order was made against CDNL. The petition had been presented on 2 June 2015.
16.	On 1 October 2015, HM Revenue and Customs presented a winding-up petition against the Club. On 11 November, the Council applied for an administration order to be made in respect of the Club. The application was eventually withdrawn by consent on 11 December 2015 following the transactions mentioned in the next paragraphs.
17.	On 25 November 2015, the Cardozas sold their shares in the Club to a company called Northampton Town Ventures Limited for just £1 pursuant to a share purchase agreement of that date (“the SPA”) to which the Club was also a party. The Cardozas also agreed to give up all but £195,000 (referred to as the “Cardozas Retained Claim”) of the money they were owed by the Club. In this connection, the SPA provided as follows (in clause 9.1):
“Save for the Cardozas Retained Claim and save for the Potential Guarantee Claims,
9.1.1	the Sellers hereby waive in full and release any claim they or any person Connected to them may have against the Company and any obligation owed to the Sellers or any person Connected to them by the Company as at the date hereof and confirm that as at the date of this agreement following the waiver and release referred to above in this clause 9.1.1:-
9.1.1.1	neither they nor any person Connected with any of them has any claim against the Company on any account whatsoever;
9.1.1.2	there are no agreements or arrangements under which the Company has any actual, contingent or prospective obligation to or in respect of any of the Sellers or any person Connected with any of them.”
18.	On 10 December 2015, the Club and the Council entered into a deed of assignment of debts and claims under which, in return for the Council waiving its loans to the Club, the Club assigned to the Council “all its rights, title, interest, and benefit in and to”, among other things, “all and any claim, counterclaim, or cause of action howsoever arising, whether arising in contract, tort, restitution, equity, under the Companies Act 2006 or otherwise which [the Club] has or may have” against a number of people, including Anthony, David and any “connected parties or associates (corporate or individual)”.
19.	The present proceedings were issued on 13 April 2016. In them, the Council, as assignee of the Club, seeks relief in respect of, among other things, sums totalling £2,050,000 which Anthony received from 1st Land or another company associated with Mr Grossman in 2014 and payments amounting to £1,303,500 (including the £180,000 mentioned in paragraph 13 above) which the Club is said to have made to David in 2014-2015.
20.	The current application is focused on the £180,000 that David received from the Club in 2015. The Council contends that David has no real prospect of successfully defending its claim as regards those payments and, hence, that summary judgment should be granted in its favour.
21.	The Council’s case is along the following lines. From January 2015, when 1st Land went into administration and the settlement with Mr Grossman was concluded, the Club was plainly insolvent or, failing that, on the verge of insolvency or of doubtful solvency. The interests of creditors therefore “intruded” (to adopt the word used by Street CJ in Kinsela v Russell Kinsela Pty Ltd (1986) 4 NSWLR 722, at 730) and it was the duty of Anthony and David, as directors of the Club, to have regard to the interests of creditors (see e.g. Vivendi SA v Richards [2013] EWHC 3006 (Ch), [2013] BCC 771, at paragraphs 148-150, and BTI Industries plc v Sequana SA [2016] EWHC 1686 (Ch), [2017] Bus LR 82, at paragraphs 464-484). In such circumstances, a director commits a breach of duty if he “acts to advance the interests of a particular creditor, without believing the action to be in the interests of creditors as a class” (see GHLM Trading Ltd v Maroo [2012] EWHC 61 (Ch), [2012] 2 BCLC 369, at paragraph 168). In general, the focus is on the director’s subjective intentions (see Regentcrest Ltd v Cohen [2001] 2 BCLC 80, at paragraph 120), but, if there is no evidence of actual consideration of the best interests of the company, “the proper test is objective, namely whether an intelligent and honest man in the position of a director of the company concerned could, in the circumstances, have reasonably believed that the transaction was for the benefit of the company” (see Re HLC Environmental Projects Ltd [2013] EWHC 2876 (Ch), [2014] BCC 337, at paragraph 92(b)). Here, said Mr James Morgan QC, who appeared for the Council, David has no real prospect of justifying the relevant payments to him. There is no (or at any rate insufficient) evidence either that he considered the interests of creditors or that an intelligent and honest man in his position could reasonably have believed the payments to be in the interests of creditors (rather than his own interests). If, though, he did address his mind to creditors, he cannot honestly have believed the payments to be in their (as opposed to his) interests. In any event, so Mr Morgan said, the purpose of the payments cannot have been to advance the interests of the Club’s creditors (as opposed to David’s interests). Further, Anthony appears to have been content for the Club to make the payments that it did to David and so (Mr Morgan submitted) he can be in no different position to David.
22.	Mr Mohammed Zaman QC, who appeared for Anthony, and Miss Emma Edhem, who appeared for David, opposed the Council’s application. Both stressed that summary judgment should be granted to a claimant on a claim or issue only where the defendant has no real prospect of successfully defending the claim or issue. Mr Zaman referred me to Three Rivers DC v Bank of England (No 3) [2003] 2 AC 1, where Lord Hobhouse noted (in paragraph 158) that “[t]he criterion which the judge has to apply under Part 24 [of the Civil Procedure Rules] is not one of probability; it is absence of reality”. In another passage to which I was taken, Lord Hope said (at paragraph 95):
“The method by which issues of fact are tried in our courts is well settled. After the normal processes of discovery and interrogatories have been completed, the parties are allowed to lead their evidence so that the trial judge can determine where the truth lies in the light of that evidence. To that rule there are some well-recognised exceptions. For example, it may be clear as a matter of law at the outset that even if a party were to succeed in proving all the facts that he offers to prove he will not be entitled to the remedy that he seeks. In that event a trial of the facts would be a waste of time and money, and it is proper that the action should be taken out of court as soon as possible. In other cases it may be possible to say with confidence before trial that the factual basis for the claim is fanciful because it is entirely without substance. It may be clear beyond question that the statement of facts is contradicted by all the documents or other material on which it is based. The simpler the case the easier it is likely to be to take that view and resort to what is properly called summary judgment. But more complex cases are unlikely to be capable of being resolved in that way without conducting a mini-trial on the documents without discovery and without oral evidence. As Lord Woolf said in Swain v Hillman, at p 95, that is not the object of the rule. It is designed to deal with cases that are not fit for trial at all.”
23.	Mr Zaman and Miss Edhem argued that their clients have a variety of defences to the claims made in respect of the £180,000 payments. Among other things, it was suggested that it is at least seriously arguable that (a) payment of debts of the Club cannot have amounted to breach of duty (relying in part on Knight v Frost [1999] 1 BCLC 364, at 381-382, and Re Continental Assurance Co of London plc (No 4) [2007] 2 BCLC 287, at paragraphs 418-420, cases which I distinguished in GHLM Trading Ltd v Maroo); (b) the Club was not insolvent or on the verge of insolvency or, at any rate, the particulars of claim have not been framed in such a way as to allow the Council to allege insolvency from the beginning of 2015; (c) the Council would not be entitled to any remedy even if it established a breach of duty; (d) relief would, if necessary, be granted under section 1157 of the Companies Act 2006; (e) the assignment of claims by the Club to the Council was ineffective because it was champertous and/or related to claims of a personal nature; and (f) Anthony would not share any liability that David had.
24.	For present purposes, I can focus, I think, on points (c) and (d).
Point (c): Remedy issues
25.	The remedies available where a director has, in breach of duty, caused or permitted his company to favour a particular creditor have been the subject of comment in several cases.
26.	In the earliest of these, West Mercia Safetywear Ltd v Dodd (1988) 4 BCC 30, a director of West Mercia Safetywear Limited (“West Mercia”) had shortly before it went into liquidation procured the payment by the company of £4,000 into an overdrawn bank account of its parent company, to which it had owed some £30,000. The bank having refused to return the £4,000 and the parent company having no other assets from which repayment could be made, the liquidator applied for relief against the director. In the Court of Appeal, Dillon LJ, with whom the other members of the Court agreed, held that there had been a fraudulent preference of the parent company and that the director had been guilty of breach of duty when, “for his own purposes, he caused the £4,000 to be transferred in disregard of the interests of the general creditors”. Dillon LJ went on (at 33):
“The question then remains: what financial relief ought to be granted against him? Prima facie the relief to be granted where money of the company has been misapplied by a director for his own ends is an order that he repay that money with interest, as in Re Washington Diamond Mining Co. The section in question, however, s 333 of the Companies Act 1948 [i.e. the then equivalent of section 212 of the Insolvency Act 1986], provides that the court may order the delinquent director to repay or restore the money, with interest at such rate as the court thinks fit, or to contribute such sum to the assets of the company by way of compensation in respect of the misapplication as the court thinks fit. The court has a discretion over the matter of relief, and it is permissible for the delinquent director to submit that the wind should be tempered because, for instance, full repayment would produce a windfall to third parties, or, alternatively, because it would involve money going round in a circle or passing through the hands of someone else whose position is equally tainted.”
Dillon LJ concluded (at 35):
“In my judgment the appropriate course of administration in the present case is to order Mr Dodd [i.e. the director] to repay the £4,000 with interest and to direct that in the distribution of the assets of the West Mercia company to unsecured creditors the debt due from the West Mercia company to the Dodd company [i.e. the parent company] is to be taken as notionally increased by £4,000 to what it would have been if there had not been a fraudulent preference, and then any dividend attributable to the extra £4,000 thus added back to the debt of the Dodd company is to be recouped to Mr Dodd rather than being paid to the Dodd company. That, as I see it, is a rough and ready way of achieving justice on both sides.”
27.	In GHLM Trading Ltd v Maroo, the directors of GHLM Trading Limited (“GHLM”), a Mr and Mrs Maroo, had caused GHLM, which had never gone into liquidation, to enter into a contract for the sale of stock to another company of which they were directors and which one of them owned, Brocade International Limited (“Brocade”), on the basis that the purchase price would be set against sums said to be due to Brocade. I decided that the directors had acted in breach of their duties, taking the view (in paragraph 176 of the judgment) that Mr and Mrs Maroo had:
“caused GHLM to enter into the transaction with Brocade with a view to advancing their own interests and those of Brocade rather than: (a) those of GHLM as such, (b) those of Shildon Holdings as GHLM’s owner, or (c) those of GHLM’s creditors as a class.”
“Not wishing to be left with an unsecured claim against GHLM,” I said, “the Maroos sought to exchange the claim for stock.”
28.	As regards remedies, I had expressed these views a little earlier in my judgment (at paragraph 169):
“It seems to me that a company seeking redress in respect of a ‘preference’ to which s 239 [of the Insolvency Act 1986] does not apply is likely to need to show: (a) that it has suffered loss, (b) that the director has profited (so that the ‘no profit’ rule operates), or (c) that the transaction in question is not binding on the company. In a typical case, the first of these may be impossible: if the ‘preference’ involved the discharge of a debt, the company’s balance sheet position is likely to be unaffected. The second might well also be problematic if the company has not entered an insolvency regime: if, say, the ‘preference’ involved the discharge of a debt owed to a director, it could be hard to say whether or to what extent the director was better off than he would have been had he still been owed the money by the company.”
29.	With respect to the remedies that should be awarded on the facts of the case, I said this:
“[178] What, if any, remedies should be awarded in consequence? In the course of argument, Mr Greenwood [i.e. counsel for GHLM] accepted that the sale to Brocade would not have worsened GHLM’s balance sheet and, hence, that a claim for loss is difficult. He also accepted that it would be hard, if not impossible, to calculate the extent to which the transaction had improved the Maroos’ position. For my part, I do not think that a case has been made out for either compensation or a profit-based award.
[179] On the other hand, the contract for the sale of stock to Brocade was, in my judgment, void. That means, as it seems to me, that (a) Brocade must account for the sums it has received from selling stock on … , but (b) Brocade is entitled to resurrect whatever claim it had earlier had against GHLM. Had I taken the view that the Maroos’ breach of duty rendered the contract with Brocade voidable rather than void, I would in any event have considered that a result along the lines outlined in the previous sentence would achieve ‘practical justice between the parties’ (to quote from Dunn LJ in the O'Sullivan case [i.e. O’Sullivan v Management Agency and Music Ltd [1985] QB 428]).”
30.	The third case I should mention is Re HLC Environmental Projects Ltd. There, Mr John Randall QC, sitting as a Deputy High Court Judge, held that a director of HLC Environmental Projects Limited (“HLC”), which had gone into liquidation, had acted in breach of duty in causing HLC to make payments to, among others, himself and Norddeutsche Landesbank Girozentrale (“NordLB”). When he came to consider the relief to be granted, Mr Randall said this:
“141 … A company is to be treated as in an equivalent position so far as its directors are concerned to that of a trust fund so far as its trustees are concerned (see Re Duckwari Plc [1999] Ch. 253 at 262A–D; [1999] B.C.C. 11 at 17F–H per Nourse L.J.; Sinclair Investments (UK) Ltd v Versailles Trade Finance Ltd [2011] EWCA Civ 347; [2012] Ch. 453 at [34] per Lord Neuberger of Abbotsbury M.R.).
142 The liability of a defaulting fiduciary who has, by his or her default, allowed the trust fund to become denuded is, or includes, a liability to restore the fund to what it should have been. As Lord Browne-Wilkinson put it in Target Holdings Ltd v Redferns [1996] A.C. 421 at 434C–E: 
‘The equitable rules of compensation for breach of trust have been largely developed in relation to such traditional trusts, where the only way in which all the beneficiaries’ rights can be protected is to restore to the trust fund what ought to be there. In such a case the basic rule is that a trustee in breach of trust must restore or pay to the trust estate either the assets which have been lost to the estate by reason of the breach or compensation for such loss. Courts of Equity did not award damages but, acting in personam, ordered the defaulting trustee to restore the trust estate: see Nocton v. Lord Ashburton [1914] A.C. 932, 952, 958, per Viscount Haldane L.C. If specific restitution of the trust property is not possible, then the liability of the trustee is to pay sufficient compensation to the trust estate to put it back to what it would have been had the breach not been committed: Caffrey v. Darby (1801) 6 Ves. 488; Clough v. Bond (1838) 3 M. & C. 490.’
…
144 In cases concerning a depletion of the moneys not of a trust fund but of a limited company, a refinement to this rule ought, however, to be noted. A claim for an order of the type which the applicants here seek will only be of any practical relevance if an insolvency ensues. If the company in question has not become insolvent, and has continued to discharge all its liabilities, then the making of an order for repayment against a director would be pointless and produce circuity of action, because the director would thereby become entitled to a pro tanto credit from the company for having discharged one of its liabilities.”
31.	On the facts, Mr Randall made an order against the director for repayment to HLC of the money that he had himself received, adding, however, that the director “is, of course, free to prove in the liquidation of the company in the normal way in respect of all sums which he claims that it owes him” (paragraph 147 of the judgment). As regards payments to NordLB, which it was accepted discharged genuine liabilities of HLC, Mr Randall made an order against the director for “payment to the company of the £1,557,907 which he wrongfully caused to be paid out of its funds” but said that the order should be “qualified by a suitably adapted version of the West Mercia proviso” (paragraph 148). The proviso in question was “that applied by the Court of Appeal to the orders made in the West Mercia case” (paragraph 135).
32.	These authorities tend to suggest that the remedies that should be granted where a director has acted in breach of duty by causing the company to prefer a particular creditor may be affected by, among other things, whether the company is in liquidation (as was the case in West Mercia and HLC, but not, much more unusually, GHLM), whether the preference consisted of the simple payment of a debt (again, West Mercia and HLC, but not GHLM), whether the creditor whose debt was to be discharged was the director himself (certain of the HLC payments) and, where that is not the case, whether relief is being sought against the relevant creditor (GHLM, where Brocade was a defendant). What matters for present purposes, however, is that nothing in the cases casts any doubt on the common sense proposition that, if money paid by a company in discharge of a debt is recovered from the payee, the company will (once again) be indebted to the payee to that extent. Thus, in HLC, where Mr Randall ordered the director to repay money he had received, he noted that the director would be free to prove in the liquidation. In a similar way, I concluded in GHLM that Brocade had to account for money that it had received from selling on the stock that it had purportedly been sold, but that it was “entitled to resurrect whatever claim it had earlier had against GHLM”.
33.	The implication is that, were the Club somehow to have established before, say, 25 November 2015 (when the SPA was entered into) that David had acted in breach of duty in relation to the £180,000 he had received from it that year, and to have obtained repayment of that amount from David, the Club’s indebtedness to him would have been increased by £180,000. Of course, the Club has since assigned any cause of action against David to the Council, but that cannot of itself bar David from reviving his claim to the £180,000. Other things being equal, David could surely look to one or both of the Council and the Club for the £180,000 if he were required to return the money he was paid and, since the Club continues to trade, questions of pointlessness and circuity of action might arise (compare HLC, at paragraph 144).
34.	Mr Morgan argued that, on the facts of the present case, clause 9.1 of the SPA, which I have set out in paragraph 17 above, means that there can be no question of David reviving his claim to the £180,000. David thereby waived and released any claim he might have against the Club and confirmed that, as at the date of the SPA, he had no claim against the Club “on any account whatsoever” and that there were “no agreements or arrangements” under which the Club had “any actual, contingent or prospective obligation to or in respect of” him.
35.	For his part, Mr Zaman stressed that the SPA was entered into at a time when the balance on David’s loan account appeared to have been reduced by the £180,000. He submitted, moreover, that contractual documents such as the SPA must be construed in the light of, among other things, commercial common sense. There is, Mr Zaman submitted, at least a real prospect of the Court concluding at a trial that clause 9.1 of the SPA does not prevent David from reasserting the £180,000 indebtedness.
36.	I agree. In Arnold v Britton [2015] UKSC 36, [2015] AC 1619, Lord Neuberger (with whom Lords Sumption and Hughes agreed) explained (in paragraph 15):
“When interpreting a written contract, the court is concerned to identify the intention of the parties by reference to ‘what a reasonable person having all the background knowledge which would have been available to the parties would have understood them to be using the language in the contract to mean’, to quote Lord Hoffmann in Chartbrook Ltd v Persimmon Homes Ltd [2009] AC 1101, para 14. And it does so by focussing on the meaning of the relevant words … in their documentary, factual and commercial context. That meaning has to be assessed in the light of (i) the natural and ordinary meaning of the clause, (ii) any other relevant provisions of the lease, (iii) the overall purpose of the clause and the lease, (iv) the facts and circumstances known or assumed by the parties at the time that the document was executed, and (v) commercial common sense, but (vi) disregarding subjective evidence of any party's intentions.”
In the present case, it is, in my view, by no means a foregone conclusion that “a reasonable person having all the background knowledge which would have been available to the parties” would have understood clause 9.1 to extend to indebtedness to David which the Club had seemingly discharged and which there would be no question of David wishing to revive unless the Club chose to require him to return the money he had been paid. That is especially the case since, so far as I am aware, the Club had not yet referred to the possibility of its having any claim in respect of the £180,000. Were the purported discharge voidable rather than void (as to which, compare Worthington, “Corporate Attribution and Agency: Back to Basics”, (2017) 133 LQR 118, at 131-139), the Club would not have owed David any of the £180,000 at the date of the SPA. Even assuming, however, that the apparent discharge was void, there would, as it seems to me, be scope for serious argument as to whether clause 9.1 precluded the reassertion by David of the indebtedness.
37.	An allied point arises from the fact that restitutio in integrum is generally required if a transaction is to be rescinded. If, therefore, the discharge of the £180,000 indebtedness were to be regarded, not as void, but as voidable, it might be argued that the Club (and the Council as its assignee) could not set the discharge aside without the matching indebtedness being recognised.
38.	These matters, in my opinion, provide a sufficient reason for declining to grant summary judgment.
Point (d): Section 1157 of the Companies Act 2006
39.	Section 1157(1) of the Companies Act 2006 provides as follows:
“If in proceedings for negligence, default, breach of duty or breach of trust against–
(a) an officer of a company, or
(b) a person employed by a company as auditor (whether he is or is not an officer of the company),
it appears to the court hearing the case that the officer or person is or may be liable but that he acted honestly and reasonably, and that having regard to all the circumstances of the case (including those connected with his appointment) he ought fairly to be excused, the court may relieve him, either wholly or in part, from his liability on such terms as it thinks fit.”
40.	Mr Zaman and Miss Edhem argued that their clients would be able to invoke section 1157 of the 2006 Act were they to be found to have incurred any liability to the Club (or the Council as the Club’s assignee). Mr Morgan, on the other hand, submitted that it is fanciful to suppose that David or Anthony could be relieved of liability in the present case. In this connection, he referred to Re Marini Ltd [2003] EWHC 334 (Ch), [2004] BCC 172, where Judge Richard Seymour QC, sitting as a Judge of the High Court, declined to exercise the power conferred by section 727 of the Companies Act 1985, the predecessor of section 1157 of the 2006 Act. He said (at paragraph 57):
“… I have the greatest difficulty in seeing that it is ever likely that ‘in all the circumstances of the case’ it is going to be right that a defaulting director ‘ought fairly to be excused for the negligence, default, breach of duty or breach of trust’, if the consequence of so doing will be to leave the director, at the expense of creditors, in enjoyment of benefits which he would never have received but for the default. However honestly the director acted, however much it may have appeared at the time of the act complained of that the only person who might be harmed by the act would be the director himself, it just is not fair, as it seems to me, that if it all goes wrong the guilty director benefits and the innocent creditors suffer.”
41.	While I can well understand how Judge Seymour came to take that view, it seems to me that, on the particular facts of the present case, the possibility of relief under section 1157 of the 2006 Act cannot be discounted. Anthony, of course, was not the recipient of any of the £180,000 so, as against him, there can be no question of saying that the grant of relief would “leave the director, at the expense of creditors, in enjoyment of benefits which he would never have received but for the default”. On top of that, David and Anthony might seek to make points such as the following: that David was owed the £180,000, that he and others associated with him provided the Club with much more than £180,000 in 2015, that each payment to him reduced the Club’s liabilities by twice its amount, that he received no more than was due to him by way of salary, that the Club was continuing to trade and pay (some) other creditors when the payments to him were made, that he and Anthony waived debts running into millions of pounds when they entered into the SPA, that they would not have been willing to give up all but £195,000 of the indebtedness to them had David not already been paid the £180,000, that they acted honestly and that the Club has not gone into liquidation. Of course, the Council may dispute such points and/or argue that relief under section 1157 should be denied anyway, but the issues are, as it seems to me, appropriately resolved at trial.
42.	In all the circumstances, it seems to me that the possibility of relief being granted under section 1157 of the 2006 Act is a further reason for declining to grant summary judgment. 
Conclusion
43.	I shall dismiss the application for summary judgment.