Prime Sight Ltd v Lavarello (Gibraltar) (Rev.1 )

[2013] UKPC 22
Privy Council Appeal No 0028 of 2013

JUDGMENT

Prime Sight Limited (A company Registered in Gibraltar) (Appellant) v Edgar Charles Lavarello (Official Trustee of Benjamin Marrache a Bankrupt) (Respondent)

From the Court of Appeal of Gibraltar

before

Lord Neuberger
Lord Wilson
Lord Reed
Lord Carnwath
Lord Toulson

JUDGMENT DELIVERED BY

LORD TOULSON

ON

9 JULY 2013

Heard on 10 June 2013

Appellant
Isaac Ellis Jacob
Conn MacEvilly
(Instructed by Charles Gomez & Co., Gibraltar)

Respondent
Nick Cruz
(Instructed by Cruz & Co. Gibraltar)

LORD TOULSON

If a written agreement contains an acknowledgement of a fact which both parties at the time of the agreement know to be untrue, does the law enable one of them to rely on that acknowledgement so as to estop the other from controverting the agreed statement in an action brought on the agreement? This question arises on an appeal by Prime Sight Limited ("the company") against an order for the winding up of the company made on the petition of the Official Trustee of Mr Benjamin Marrache ("the Official Trustee") in the Supreme Court of Gibraltar under the Companies Act 1930.

The company applied for an order striking out the petition on the basis that the debt on which the petition was founded was genuinely disputed on substantial grounds. It was common ground between the parties that this was the appropriate legal test, as under English company law.

The matter came first before Prescott J. At that stage no estoppel argument was advanced by the company. In a short judgment given on 13 February 2013 the judge concluded that the company had failed to show that the debt was disputed on substantial grounds. She therefore dismissed its application to strike out the petition and made a winding up order.

The company appealed. In its grounds of appeal it raised for the first time the argument that the Official Trustee was estopped from asserting that there was a debt owed by the company. The Court of Appeal (Sir Paul Kennedy P, Sir Jonathan Parker JA and Sir William Aldous JA) allowed the point to be raised, but dismissed the appeal for reasons given by Sir Jonathan Parker. Permission to appeal against that decision was given by the Board.

Facts

The alleged debt arose from a deed of assignment dated 14 May 2007 between Mr Marrache and the company. The company had been formed two weeks earlier with an issued share capital of 1000 shares of £1.00. Mrs Marrache was the beneficial owner of 999 shares. The remaining share was held in trust for Mr Marrache, who according to Mrs Marrache held it in trust for herself.

The assignment related to an underlease of an apartment at 20 Ragged Staff Wharf, Queensway Quay, Gibraltar ("the property"). The underlease was for a term of 149 years from 1 October 1991. It was acquired by Mr Marrache for £192,500 by an agreement between himself and the head lessor dated 1 March 1995.

The preamble to the…

JUDGMENT

9 JULY 2013

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