Neutral Citation Number: [2016] EWHC 235 (QB)
Case No: HQ15X03742 IN THE HIGH COURT OF JUSTICE QUEEN'S BENCH DIVISION
Royal Courts of Justice Strand, London, WC2A 2LL
Date: 19/02/2016
Before :
MRS JUSTICE COX ------Between :
(1) DAVID AMES Respondents/ (2) CAROL AMES Claimants - and - CONRAD DAVIES & 22 OTHERS Applicants/ Defendants
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Tony Beswetherick (instructed by Fletcher Day) for the Applicants/Defendants Nicholas Davidson QC (instructed by ELS Legal LLP) for the Respondents/Claimants
Hearing date: 13 January 2016 ------Approved Judgment I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
......
MRS JUSTICE COX DBE MRS JUSTICE COX DBE Ames & Ames v Davies & Ors Approved Judgment
Mrs Justice Cox:
Introduction
1. On 20 October 2014 the Claimants in this matter, David and Carol Ames, entered into a settlement agreement in previous proceedings brought against them by the present Defendants (Case number HQ13X02764). By the terms of that agreement they promised to pay the Defendants the sum of £1.3 million by 2 September 2015. No part of that sum has ever been paid. Instead, the Claimants have now issued these proceedings alleging that they were induced to enter into that agreement as a result of false misrepresentations by the Defendants’ former solicitor, entitling them to rescind the agreement; or alternatively that the Defendants are in repudiatory breach of their obligations under that agreement, entitling the Claimants to terminate it.
2. The Defendants contend that the allegations now being advanced are all entirely without factual and legal merit; and that they amount to a desperate last-ditch attempt to avoid payment of the agreed sum, motivated by the Claimants’ inability or unwillingness to pay. All save the Twelfth Defendant (who is resident outside the jurisdiction and has only recently been served with the proceedings) are applying for the Claim Form and Particulars of Claim to be struck out, or alternatively for summary judgment to be entered in their favour on all the claims made against them. If that primary application fails they apply, in the alternative, for conditions to be imposed upon the pursuit by the Claimants of their claim, or such parts as may remain following delivery of this judgment.
3. The Claimants say that the pleadings raise issues which can only properly be resolved at trial, after hearing oral evidence; and that there is a compelling reason why there should be a trial, namely to “get to the truth” of what led to the settlement agreement being signed. The Defendants’ application to strike out or for summary judgment should be dismissed.
4. To avoid confusion I shall refer to the Defendants as the “Davies Group” and to Mr and Mrs Ames as the Claimants.
The Relevant Facts
5. The main occupation of David Ames, conducted through various companies, is the development of hotels and leisure resorts in the Caribbean. He is the controlling owner of a number of companies registered in the Caribbean and known as the Harlequin Group. He is a director of Harlequin Property (SVG) Ltd, the most important company in this group, and his wife, Carol Ames, is a director and co- shareholder in this company.
6. The members of the Davies Group are all individuals who were encouraged to invest money in these development schemes. They entered into contracts to purchase properties in the proposed developments and they each paid substantial sums by way of deposits.
7. In May 2013 the Davies Group, at that stage comprising only the 1st to 13th Defendants, commenced proceedings against the Claimants alleging that they were induced to enter into those contracts and to hand over substantial sums of money by MRS JUSTICE COX DBE Ames & Ames v Davies & Ors Approved Judgment
fraudulent misrepresentations, for which the Claimants were responsible. They claimed damages for deceit and for breach of trust.
8. On 14 May 2013 Mr Justice Singh granted an ex parte application for a Freezing Order, preventing Mr and Mrs Ames from removing assets up to the value of £1.1 million from the jurisdiction; restricting their ability to deal with or dispose of assets worldwide; and requiring them both to provide detailed information as to their assets. On 3 June 2013 Mr Justice Coulson accepted undertakings from the Claimants in essentially similar terms, such that the Freezing Order was not continued. The Claimants were ordered on that occasion to provide valuations of four specified properties in Essex, together with details of any encumbrances.
9. The remaining members of the Davies Group were then joined to the proceedings and, on 21 October 2013, Mr Justice Globe granted the Group’s application to freeze additional assets to the value of £1.4 million. The Claimants’ applications for specific disclosure were dismissed and they were both ordered to provide further evidence as to their assets, including the valuation of 43 separate companies identified in the schedule attached to the order. A further Freezing Order was made by Mr Justice Tugendhat on 10 March 2014, when he ordered the Claimants to provide additional evidence as to their assets.
10. The trial was fixed to start in January 2015. An attempt in mid-2014 to postpone disclosure and mediate the dispute failed. On 7 August 2014, the Davies Group issued committal proceedings on the basis that Mr and Mrs Ames had failed to comply with the various court orders as to disclosure of their assets. In evidence filed in support it was alleged that the Claimants had failed to disclose numerous foreign property interests, dividends and investment income. No evidence was filed by Mr and Mrs Ames in response to the application for their committal.
11. The committal application was originally listed in an interim hearing window commencing on 13 October 2014. In the weeks leading up to that date further negotiations took place between the parties’ solicitors, with a view to possible settlement of the claim. These negotiations resulted in the Tomlin Order dated 20 October 2014, signed by both parties, with all further proceedings in the action being stayed on the terms agreed in full and final settlement of the Davies Group’s claims, as set out in the Schedule (the “Settlement Agreement”).
12. Before referring to the terms of the Settlement Agreement, it is a relevant factor in this case that the Claimants were (and still are) involved in entirely separate litigation in the TCC relating to the Caribbean developments, in a claim for damages for breach of contract and professional negligence (HT2014-000038) brought by two Harlequin companies against a firm of accountants, Wilkins Kennedy. The same partner in the firm ELS Legal LLP, Richard Spector, has conduct of that litigation and of both sets of proceedings involving the present parties.
13. There is no dispute that the Wilkins Kennedy litigation, and the potential existence and availability of documents that might assist the Claimants in that litigation, formed part of the settlement discussions in September/October 2014 between Mr Spector and Chris Corney, a partner in Carter Lemon Camerons LLP (“Carter Lemon”), the firm then acting for the Davies Group. That TCC litigation is on-going and I am told that it is presently listed for trial commencing in June this year. MRS JUSTICE COX DBE Ames & Ames v Davies & Ors Approved Judgment
14. Under the terms of the Settlement Agreement Mr and Mrs Ames agreed to pay the Davies Group the “Settlement Monies” defined as “The sum of £1,300,000 (inclusive of interest and costs).” Clause 3 provided, so far as relevant, that:
“ The Defendants shall pay to the Claimants the Settlement Monies on or before the earlier of (a) within 3 days after receipt of any monies recovered pursuant to the Wilkins Kennedy Litigation in accordance with the undertaking at Paragraph 27 or (b) the Long Stop Date…”
15. Mr and Mrs Ames undertook, at Clause 27, to notify Carter Lemon of the date of any settlement or final judgment in the Wilkins Kennedy litigation. The “Long Stop Date” was defined as 2 September 2015. Since the Wilkins Kennedy litigation is still live and no payments have been made to the Claimants in part settlement of that claim, 2 September 2015 is the relevant date for the purposes of the Claimants’ obligation to pay under this Settlement Agreement.
16. Other express terms of the Settlement Agreement relevant to the present application are contained in Clauses 29 and 30, as follows:
“29. The parties will continue to discuss mutual cooperation in relation to the Wilkins Kennedy Litigation after the date of this agreement. The Claimants will use their best endeavours to procure documentation to assist the Wilkins Kennedy Claimants. In the event that the Claimants provide further documentation on a voluntary basis the parties may agree that a further sum up to a maximum of £250,000 for all documentation available to the Claimants now or in the future will be payable to the Claimants in addition to the Settlement Monies in the event that the Wilkins Kennedy Litigation recovers a sum in excess of the Settlement Monies.
30. The terms of this Agreement, and the substance of all negotiations in connection with it, are confidential to the parties and their advisers, who shall not disclose them to, or otherwise communicate them to, any third party without written consent of the other party, other than:
a) pursuant to an order of a court of competent jurisdiction, or pursuant to any proper order or demand made by any competent authority or body where they are under a legal or regulatory obligation to make such a disclosure;
b) as far as necessary to implement and enforce any of the terms of this Agreement, … ”
17. Mr and Mrs Ames have failed to pay any part of the Settlement Monies to the Davies Group. Relying principally upon oral and email communications said to have taken MRS JUSTICE COX DBE Ames & Ames v Davies & Ors Approved Judgment
place between Mr Spector and Mr Corney at the time of the negotiations, they advance in the present proceedings, issued on 3 September 2015, a number of allegations of breach of the Settlement Agreement, and of fraudulent misrepresentation by Mr Corney in relation to the “documentation” referred to in Clause 29.
18. It is alleged at paragraphs 13 – 18 of the Particulars of Claim, in summary, that, in various telephone conversations and emails between 30 September and 3 October 2014, Mr Corney made a total of eight false representations, as a result of seven of which Mr and Mrs Ames were induced to enter into the Settlement Agreement. These, in summary, were alleged representations, (a) as to the existence and availability of documentation, including a document initially said to be in Mr Corney’s possession, which would be helpful to the Claimants in their companies’ claim against Wilkins Kennedy; and (b) as to the intention of the Davies Group to provide the Claimants with documentation considered supportive if a settlement were reached which envisaged such provision.
19. It is pleaded, at paragraph 25 of the Particulars, that the reference to procuring documentation in Clause 29 of the Agreement was particularly to procuring the documentation “…which had been represented by Mr Corney to exist” and to providing it to the Claimants.
20. It is further alleged, at paragraphs 26 and 27, that no documentation has been provided to the Claimants; that the Davies Group have failed to use their best or any endeavours to procure documentation; that they have not provided any co-operation to the Claimants; and that confidential information about the Agreement has been transmitted to third parties by one or more members of the Davies Group. As a result of these matters the Davies Group are said to have shown an intention not to be bound by the Agreement. The Claimants plead as follows, at paragraph 30 of the Particulars:
“ Accordingly, Mr and Mrs Ames are entitled to rescission of the settlement agreement or (as the case may be) to terminate the settlement agreement because of its repudiation by the Davies parties. If they were entitled to terminate the settlement agreement because of repudiation then they did so by issuing these proceedings.”
21. An alternative claim advanced at paragraph 31, in the event that the court concludes that the Agreement remains in force, is that Mr and Mrs Ames are entitled to delivery up of any helpful documentation procured by the Davies Group.
22. The relief claimed is in the following terms:
“(1) Rescission of the settlement agreement; alternatively
(2) A declaration that Davies parties have acted in repudiatory breach of the settlement agreement and that Mr and Mrs Ames have by issuing this claim accepted that repudiation; alternatively MRS JUSTICE COX DBE Ames & Ames v Davies & Ors Approved Judgment
(3) An order that each of the Davies parties and Mr Corney make a statement verified on oath identifying what documentation each has procured to assist the Harlequin Claimants and exhibiting such documentation;
(4) (If necessary) an inquiry as to damages and payment of such damages as are found due, together with interest under section 35A of the Supreme court Act 1981;
(5) Costs.”
The Claimants’ Application for an Interim Injunction
23. A further relevant factor in determining the present application is what took place on 2 September 2015, namely the “Long Stop Date” under the Settlement Agreement and the day before issue of the present Claim Form. On that day Mr and Mrs Ames made an ex parte application to this court for an interim injunction to restrain the Davies Group from presenting a bankruptcy petition against them or taking any enforcement proceedings under the Settlement Agreement. The application was dismissed by Mr Justice Phillips.
24. The submissions made at that hearing and the judgment given at its conclusion are relevant to the issues raised before me and I shall return to them later on. Mr Beswetherick places reliance upon them in advancing his submissions in support of the application to strike out. In particular, he points out that the draft Particulars of Claim, considered by Mr Justice Phillips to raise no arguable case, are exactly the same as those subsequently filed and served in these proceedings. Mr Spector has indicated in correspondence that the Claimants intend to amend those Particulars, but to date no proposed amendments have been provided.
The Relevant Legal Principles
25. The relevant legal principles in relation to applications to strike out or for summary judgment are well established and are not in dispute. Pursuant to CPR 3.4(2) the court may strike out a claim if it appears (a) that the statement of case discloses no reasonable grounds for bringing the claim; (b) that the statement of case amounts to an abuse of the court’s process or is otherwise likely to obstruct the just disposal of proceedings; or (c) that a party has failed to comply with a rule, practice direction or court order.
26. The power to strike out is exercisable where the statement of case contains a set of facts which, even if true, do not disclose any legally recognisable claim against the defendant; or if it raises an unwinnable case where continuance of the proceedings is without any possible benefit and would waste resources on both sides. A case should not be struck out unless the court is certain that the claim is bound to fail, which it cannot be if the case raises a serious live issue of fact which can only be properly determined by hearing oral evidence.
27. A statement of case which discloses no reasonable grounds may also be an abuse of the court’s process, and the opposing party may be entitled to summary judgment under CPR 24 in respect of it. There is therefore no exact dividing line between MRS JUSTICE COX DBE Ames & Ames v Davies & Ors Approved Judgment
grounds (a) and (b) in CPR 3.4(2) and CPR 24. Another form of abuse can arise in circumstances where it can be demonstrated that the benefit attainable by a claimant in the action is of such limited value that “…the game is not worth the candle” and that the litigation costs will be out of all proportion to the benefit to be achieved (Jameel v Dow Jones and Co [2005] EWCA Civ 75, [2005] QB 946).
28. Under CPR 24.2 the court may give summary judgment in favour of a defendant upon the whole of the claim or upon a particular issue, if it considers (a) that the claimant has no real prospect of succeeding on the claim or issue, and (b) that there is no other compelling reason why the case or issue should be disposed of at a trial.
29. The correct approach to be adopted when dealing with a defendant’s application for summary judgment was recently restated by the Court of Appeal in Mellor and Others v Partridge [2013] EWCA Civ 477. Lewison LJ, with whom the other members of the Court agreed, repeated what he said in Easyair Ltd v Opal Telecom Ltd [2009] EWHC 339 Ch, approved by the Court of Appeal in AC Ward & Son v Catlin (Five) Ltd [2009] EWCA Civ 1098 as follows (at paragraph 3):
“The correct approach on applications by defendants is, in my judgment, as follows:
i) The court must consider whether the claimant has a “realistic” as opposed to a “fanciful” prospect of success: Swain v Hillman [2001] 1 All ER 91;
ii) A “realistic” claim is one that carries some degree of conviction. This means a claim that is more than merely arguable: ED & F Man Liquid Products v Patel [2003] EWCA Civ 472 at [8]
iii) In reaching its conclusion the court must not conduct a “mini-trial”: Swain v Hillman
iv) This does not mean that the court must take at face value and without analysis everything that a claimant says in his statements before the court. In some cases it may be clear that there is no real substance in factual assertions made, particularly if contradicted by contemporaneous documents: ED & F Man Liquid Products v Patel at [10]
v) However, in reaching its conclusion the court must take into account not only the evidence actually placed before it on the application for summary judgment, but also the evidence that can reasonably be expected to be available at trial: Royal Brompton Hospital NHS Trust v Hammond (No 5) [2001] EWCA Civ 550;
vi) Although a case may turn out at trial not to be really complicated, it does not follow that it should be decided without the fuller investigation into the facts at trial than is possible or permissible on summary judgment. Thus the court MRS JUSTICE COX DBE Ames & Ames v Davies & Ors Approved Judgment
should hesitate about making a final decision without a trial, even where there is no obvious conflict of fact at the time of the applications, where reasonable grounds exist for believing that a fuller investigation into the facts of the case would add to or alter the evidence available to the trail judge and so affect the outcome of the case: Doncaster Pharmaceuticals Group Ltd v Bolton Pharmaceutical Co 100 Ltd [2007] FSR 63;
vii) On the other hand it is not uncommon for an application under Part 24 to give rise to a short point of law or construction and, if the court is satisfied that it has before it all the evidence necessary for the proper determination of the question and that the parties have had an adequate opportunity to address it in argument, it should grasp the nettle and decide it. The reason is quite simple: if the respondent’s case is bad in law, he will in truth have no real prospect of succeeding on his claim or successfully defending the claim against him, as the case may be. Similarly, if the applicant’s case is bad in law, the sooner that is determined, the better. If it is possible to show by evidence that although material in the form of documents or oral evidence that would put the documents in another light is not currently before the court, such material is likely to exist and can be expected to be available at trial, it would be wrong to give summary judgment because there would be a real, as opposed to a fanciful, prospect of success. However, it is not enough simply to argue that the case should be allowed to go to trial because something may turn up which would have a bearing on the question of construction: ICI Chemicals & Polymers Ltd v TTE Training Ltd [2007] EWCA Civ 725.”
The Present Application
30. In support of the Davies Group’s application Mr Beswetherick submits, first, that the decision of Mr Justice Phillips ought to be followed upon a straightforward application of the doctrine of stare decisis. Secondly, he submits that it is an abuse of process for the Claimants to seek to attack that decision in these proceedings, which involve the same parties and are based on precisely the same arguments, in the same Particulars of Claim, as those already analysed and rejected by the judge on 2 September. Thirdly, it is submitted that the decision of Mr Justice Phillips was in any event entirely correct, and that I should come to the same conclusion on this application, having regard to the same material.
31. The first question therefore is what did Mr Justice Phillips decide? On 2 September Mr Davidson QC based his application for interim relief on the basis, as alleged in the Particulars of Claim, that the Davies Group (the defendants) had not provided any documentation pursuant to Clause 29 of the Agreement. He advanced two alternative formulations of the claim, summarised at paragraphs 4 and 5 of the judgment of Phillips J:
“4. … MRS JUSTICE COX DBE Ames & Ames v Davies & Ors Approved Judgment
(a) there were no documents known to the defendants prior to the execution of the Tomlin Order, contrary to what are said to have been false and fraudulent representations made on their behalf by their solicitor, Mr Corney of Carter Lemon Camerons, entitling the claimants to rescind the Agreement; or, alternatively
(b) the defendants have failed to exercise reasonable best endeavours which, it is said, constitutes a repudiatory breach of the Agreement, entitling the claimants to terminate the Agreement, including terminating their obligation to pay £1.3 million.
5. Mr Davidson accepts that to date the claimants have not rescinded or terminated the agreement but he states that they will do so by the issue of the claim form in these proceedings.”
32. Philips J considered that neither formulation disclosed any arguable case. In relation to misrepresentation, he held as follows at paragraphs 6 - 8:
“ 6. In my judgment there is considerable difficulty in both alternative formulations of the claim. As for the alleged misrepresentations, I have been taken to the email correspondence in early October 2014 from which, whatever may have been said on the telephone, it was clarified that Mr Corney did not have in his possession any documents which were to be disclosed to assist the claimants in their claim against Wilkins Kennedy, but that the defendants expected to be provided with documents initially in redacted form, by a third-party. The suggestion in an email dated 3 October 2014 was that those documents were expected from the third-party and would be provided to the claimants in redacted form to indicate goodwill and the intention of the defendants to provide further assistance to the claimants with the Wilkins Kennedy litigation. In the event, negotiations ceased at that point and did not resume again until 19 to 20 October. It appears that, at that time, the claimants, through Mr Spector, their solicitor, required the insertion into the proposed agreement of a requirement that the defendants use best endeavours to procure documentation.
7. It is asserted in the draft particulars of claim that Mr Corney made numerous false representations, known by him to be false, as to his knowledge of and/or possession of documents helpful to the claimants. I do not consider that there is a good arguable case based on such representations. Whatever may have been said, and I have not seen any attendance notes from Mr Spector to support the specific representations alleged in the particulars of claim, the email correspondence in my judgment made it plain that Mr Corney had not seen and not received the MRS JUSTICE COX DBE Ames & Ames v Davies & Ors Approved Judgment
relevant documents and it is not suggested that it was certain that he or his clients would do so.
8. I am therefore by no means satisfied that there is an arguable case that there were here misrepresentations let alone misrepresentations that were fraudulent.”
33. Mr Beswetherick submits that, in addition to the Particulars of Claim being in precisely the same form as the draft pleading before the judge, there is no further relevant documentary material before me now than was before the judge on 2 September. In particular there are no attendance notes produced by Mr Spector, and no other contemporaneous documentation has been produced by him which provides any support for the alleged representations.
34. In relation to repudiatory breach, Phillips J held as follows, at paragraph 9:
“ As for the allegation of repudiatory breach, clause 29 is unhappily drafted but, on the face of it, appears to distinguish between the obligation of the then claimants, now the defendants, to use best endeavours to procure documentation, that is to get it into their own possession, with a subsequent expectation that they might voluntarily disclose it to the claimants in exchange for an additional payment. Such a clause amounts to little more than an agreement to agree and, even if there was an arguable case, of which I am by no means convinced, that the defendants have breached their obligation to use best endeavours, I fail to see how that could amount to such a serious breach as to go to the root of the contract and to entitle the claimants to treat the contract as terminated. The primary obligations under this agreement were for the defendants to cease their claims against the claimants, including contempt proceedings, in exchange for which they were to receive £1.3 million. In my judgment an obligation to seek to agree the voluntary provision of documents which the then claimants did not have in their possession, could not amount to a core term, nor one which, if not complied with, would entitle the claimants in these proceedings to avoid their obligation to pay £1.3 million. I am therefore not satisfied that there is a sufficiently good arguable case to found injunctive relief, particularly on the present without notice basis. I should add that some notice has been given to the defendants of this application and they have written a letter of today’s date setting out their position, although they have not attended.”
35. Phillips J went on to hold that, even if there was a good arguable case, it would not be appropriate to grant the relief sought in the circumstances. He then added the following observations at paragraph 12:
“ I should add that the points taken today in relation to the alleged breaches of clause 29 and the alleged misrepresentations have only recently been put forward by the MRS JUSTICE COX DBE Ames & Ames v Davies & Ors Approved Judgment
claimants, on 15 August, notwithstanding that it must have been apparent to them for some considerable period that no disclosure was being provided by the defendants. I am satisfied that those contentions are primarily motivated by the fact that they are unable to pay the £1.3 million and that this application is a last minute attempt to avoid that obligation. But for the reasons I have given, that attempt does not succeed.”
36. There is no dispute that, as the following extract from the transcript shows, Mr Davidson accepted at this hearing that the Claimants could not pay the money owed under the Settlement Agreement:
“MR DAVIDSON: So, I mean, you know the point which [the Davies Group] are taking.
MR JUSTICE PHILLIPS: Yes. Well they say this is all a fairly transparent attempt to avoid paying the £1.3 million.
MR DAVIDSON: Well, clearly the nature of this case is that my clients assert that the legal consequence of what has happened is that they are not obliged to pay the £1.3 million. That is true. In that sense-
JUSTICE PHILLIPS: But if they gave you all the documents, you still could not pay the £1.3 million?
MR DAVIDSON: That is true, …”
Stare Decisis
37. In support of his submission that I should regard myself as bound by the decision of Mr Justice Phillips, on an application of the doctrine of stare decisis, Mr Beswetherick relied on the recent decision of Mann J in Shiner and Sheinman v The Commissioners for HMRC [2015] UKUT 0596 (TCC).
38. This was an appeal to the Upper Tribunal from a First Tier Tribunal’s decision to strike out part of the appellants’ cases. The FTT upheld the HMRC’s submission that the relevant part, which complained that the imposition of tax legislation was an improper restriction on the flow of capital for the purposes of EU legislation, had already been the subject of a decision adverse to the appellants in a previous Court of Appeal decision given in judicial review proceedings involving the same parties. On appeal, one of the points raised was the applicability of the doctrine of stare decisis.
39. Mann J held that, on the particular facts, the doctrine could not be said to apply at the stage he was considering it. But Mr Beswetherick relies upon what Mann J said at paragraphs 40 – 44, so far as is relevant, when he described the doctrine of stare decisis in these terms:
“ 40. … This doctrine treats the earlier case as binding authority which would require the case in the FTT to be decided in the same way. … MRS JUSTICE COX DBE Ames & Ames v Davies & Ors Approved Judgment
41. The application of this doctrine requires one to identify the ratio decidendi of the earlier decision and then determine the extent to which it is applicable to the facts of the present case. At that point one might then have to consider other points relied on … such as whether it was decided per incuriam or whether there are other legally valid reasons why the ratio should not apply.
…”
After agreeing with the FTT’s decision that the Court of Appeal’s decision on the point of European law was binding on them Mann J continued,
“44. That means that as a matter of stare decisis, and unless an exception applied, the same conclusion ought to be reached in another case on the same facts. The present case is (for these purposes) another case, and if the facts are the same then the same result should be reached for the reason given by the Court of Appeal. However, what is important is to determine whether the material facts are, for these purposes, the same.”
40. The argument failed because Mann J concluded that the material facts could not at that stage be said to be the same. In the present case, submits Mr Beswetherick, the material facts are all the same. On the basis of all the material placed before him by the Claimants, Phillips J held that there was no arguable case. This is a case about contractual interpretation. Given that the same parties are before the court today, with Particulars of Claim which are exactly the same as the draft Particulars before Phillips J, together with the same documentary evidence, the doctrine of stare decisis applies and I should follow the decision of Phillips J.
41. I do not accept that submission. First, although it is correct that the Particulars of Claim are in exactly the same form, there is in fact further evidence before me, in the form of witness statements, or further witness statements, than was before Phillips J on 2 September. There is also some further correspondence exhibited to those statements, though I accept that this does not seem to take matters much further. Secondly, while I accept that the correct construction of the Settlement Agreement is the focus of this claim, the issue that Phillips J was addressing his mind to on 2 September was whether there was a sufficiently good arguable case to found injunctive relief. And although the Davies Group were aware that the application was to be made, it was heard and determined as an ex parte application for discretionary interim relief.
42. In determining at this hearing whether the claim is to be struck out, or whether the Davies Group are entitled to summary judgment on all or part of that claim, the considerations are different. The test in relation to summary judgment requires the judge to assess whether there is any realistic prospect of success for the claim and whether there is any other compelling reason for the claim to be disposed of at trial. In circumstances where, on all the evidence before the court, I have heard full argument from counsel on both sides as to whether this claim should be struck out, or MRS JUSTICE COX DBE Ames & Ames v Davies & Ors Approved Judgment
summary judgment entered, applying the legal principles already referred to, I do not consider that the doctrine of stare decisis can properly be said to apply in respect of the earlier ex parte decision of Phillips J, on an application for interim injunctive relief, so as to render it determinative of the present application.
Abuse of Process
43. Alternatively, Mr Beswetherick submits that it is an abuse for Mr and Mrs Ames to use the court’s processes in these proceedings, and that the claim should be struck out for that reason, without the need for any further analysis of its substantive merits. The Claimants are seeking to attack the decision of Phillips J while relying on precisely the same pleaded case and the same arguments as those which the judge has already analysed and rejected. Moreover, as Phillips J concluded, this claim is a deliberate delaying tactic, which will result in wholly unjustified inconvenience and cost to the Davies Group and is a serious misuse of this court’s resources.
44. Mr Davidson QC submits that it cannot be said to be an abuse of the process to issue the Claim Form and serve Particulars of Claim, when the Claimants had made it clear to Phillips J on 2 September (see pages 4-5 of the transcript) that they would be issuing the proceedings on that or the following day, and when they were offering the usual undertaking to do so as part of any order for interim relief. He contends that the history and background to the Settlement Agreement is important in this case. The witness statement of Mr Spector as a senior solicitor, while obviously open to cross- examination, raises serious issues which can only be resolved by the hearing of oral evidence at trial; and which demonstrate a compelling reason for there to be a trial in this case.
45. The relevant principles in considering abuse of process, in the context of new claims or new points being advanced which could have been put forward earlier, are those set out in Johnson v Gore Wood & Co [2002] 2 AC 1 at page 31 per Lord Bingham, recently referred to by Morgan J in Rawlinson & Hunter Trustees SA v ITG Limited and Bayeuz Trustees Limited [2015] EWHC 1664 (Ch), to which my attention was drawn by Mr Beswetherick in argument.
46. Morgan J observed, at paragraph 76, that “The submission that subsequent proceedings are abusive will be much stronger where the application is a second attempt to re-run an earlier unsuccessful application without anything, or without very much, by way of new material.” Mr Beswetherick points to Morgan J’s decision that the Claimants’ application in that case should be dismissed as an abuse of process, but the case clearly turned on its own, very different facts, which do not seem to me to assist in determining the submission made in the present case. This is not, on correct analysis, a second attempt to re-run an earlier unsuccessful application for the reasons I have already given when considering stare decisis.
47. The underlying principle, I accept, is that there should be finality in litigation and that a party should not be vexed twice in the same matter. Efficiency and economy in the conduct of litigation is paramount and abuse may arise even where there is no additional element present, such as a collateral attack on a previous decision, which is what Mr Beswetherick contends is happening here. MRS JUSTICE COX DBE Ames & Ames v Davies & Ors Approved Judgment
48. However I consider it necessary, and the preferable course to adopt, to carry out an overall assessment of this claim applying the well-established legal principles referred to. I would refuse the application to strike out the claim as an abuse simply on the basis of the existence of the earlier decision, without further consideration of the merits in the context of the present application. I turn therefore to Mr Beswetherick’s third submission. In relation to that the real question, in my view, is not whether Phillips J was right to refuse the application for interim relief, but whether, having considered all the evidence and the parties’ submissions, and applying the relevant legal tests, I reach the same conclusions as to the merits of this claim; and, if so, whether the claim or any part of it should be struck out or whether the Davies Group are entitled to summary judgment in respect of it.
Strike out or Summary Judgment: Discussion and Conclusion
49. In considering the Davies Group’s application and in particular the allegations now being made in the witness statements served by the Claimants, I have focussed on the pleaded case and on the contemporary documentary evidence before the court.
50. Mr Davidson QC was critical of what he suggested was a deliberate attempt on the part of the Davies Group to conceal relevant background circumstances relating to the Settlement Agreement, and he suggested that their evidence in support of the application had been “carefully prepared.”
51. I reject these criticisms. There is no evidence to support any suggestion of concealment by any member of the Davies Group or by those representing them. The focus in this case has rightly been on the pleaded case and the contemporaneous documentary evidence, which is all before the court. In an application to strike out, or for summary judgment, the focus will always be on the Particulars of Claim and on the witness evidence served by the party resisting the application and any contemporaneous documentary evidence supporting or contradicting it. In making his submissions Mr Beswetherick rightly concentrated on the pleaded case and on that evidence, focussing in particular on whether the assertions now being made in the witness statements from Richard Spector and David Ames were supported or undermined by the relevant documentary evidence.
52. Mr Davidson submitted that the Claimants’ two “headline complaints” in this claim were the alleged failure by the Davies Group to use their best endeavours to procure documentation, and the alleged false representations inducing the Claimants to enter into the Agreement. Most of the hearing before me was taken up by consideration of those two claims.
53. I therefore consider first the other two claims, at paragraphs 27 and 31 of the Particulars of Claim, containing allegations of breach of the confidentiality clause and, if the Settlement Agreement remains in force, a claim of entitlement to the results of the best endeavours by the Davies Group to procure helpful documentation (the “delivery up” claim). While not accepting that these were claims which either fell to be struck out, or which entitled the Davies Group to summary judgment, little time was devoted to them in Mr Davidson’s written or oral submissions. Significantly, in my view, they were not dealt with anywhere in the Claimants’ evidence. MRS JUSTICE COX DBE Ames & Ames v Davies & Ors Approved Judgment
The Breach of Confidentiality Claim
54. It is pleaded at paragraph 27 of the Particulars that “…confidential information about the settlement agreement has entered the public domain.” After pleading that no such information has been transmitted to the public domain by or on behalf of the Claimants, that the Claimants have not consented to its transmission, and that they cannot show what exactly has happened before the provision of information and facilities for inspection by the Davies Group, it is nevertheless pleaded that:
“… the inference is that it has been transmitted to one or more third parties by one or more of the Davies parties by someone acting on their behalf (Ms Crozier and CPC Worldwide Ltd being such persons). A series of posts on the Barbados Free Press website demonstrates that someone or more people are aware of at least some of the details of the settlement agreement and were so before Mr and Mrs Ames made application to the Court on 2 September 2015.”
55. I accept Mr Beswetherick’s submission that this allegation is inadequately particularised. No particulars are given as to what the posts contain or what “details” of the Settlement Agreement are said to have been revealed. Mr Davidson submits that breach of the confidentiality obligations in Clause 30 of the Agreement is an important matter, and that the Claimants are not in a position at this stage to provide further particulars of the allegation. There is, however, no evidence at all before me to suggest that this is a viable claim against any member of the Davies Group.
56. In his oral submissions Mr Davidson hinted at “connections” between members of the Davies Group and Ms Crozier, as an associate of “enemies” of Mr Ames, which he suggested was capable of supporting the pleaded case and merited further investigation at trial, but there is simply no evidence before me which could be said to support that assertion.
57. In his email to Mr Corney dated 21 January 2015 Mr Spector, referring to an article posted about him on 17 January, said this, “We...hope that your firm did not have any indirect involvement in the post below that appeared on the Barbados Free Press…” The posting makes no reference, either directly or indirectly, to the Settlement Agreement. In his response on 26 January Mr Corney denied that either his firm or any member of the Davies Group had instigated any postings on the website and stated that the identity of the person who had posted it was unknown. On 28 January Mr Spector stated, “…We appreciate that you have no knowledge of the posting on the Barbados Free Press. We were not suggesting that you did know…Our clients have not leaked this information and we were concerned who did...”
58. Ms Vassallo, the solicitor acting for the Davies Group, having reviewed the Barbados Free Press website, states in her second witness statement, (a) that she has identified no postings containing any details of the Settlement Agreement; and (b) that each member of the Davies Group has confirmed to her that they have not breached their confidentiality obligations themselves or through any third party. Mr Spector does not address this issue at all in his witness statement. There is no reference to it in any of the correspondence leading up to the Claimants’ ex parte injunction application on 2 September or in the evidence served in support. Nor is it alleged in any MRS JUSTICE COX DBE Ames & Ames v Davies & Ors Approved Judgment
correspondence leading up to the issue of the Claim Form and service of the Particulars of Claim.
59. Mr Davidson’s assertion that there must have been a leak is therefore wholly unsupported by any evidence that any member of the Davies Group acted in breach of the confidentiality clause. Nor does this allegation seem to me to provide any basis for suggesting that the Settlement Agreement should be treated as having been repudiated.
60. This is therefore a claim which I consider to have no real prospect of success. There being no other compelling reason why the issue should be disposed of at trial, the Davies Group are entitled to summary judgment in respect of it.
The Delivery Up Claim
61. Paragraph 31 of the Particulars reads as follows:
“31. Were the Court to conclude that (contrary to the above) the settlement agreement remains in force, Mr and Mrs Ames would be (and are) entitled to the results of the Davies parties having used their best endeavours to ‘procure documentation to assist the Wilkins Kennedy Claimants.’”
62. As set out above, the relief claimed includes an order that each member of the Davies Group and Mr Corney makes a statement identifying what documentation each of them has procured to assist the Claimants and exhibiting that documentation.
63. Once again, there is no reference to this pleaded allegation in any of the evidence served on behalf of the Claimants. This appears to reflect the Claimants’ acceptance that the Settlement Agreement does not impose any obligation upon the Davies Group to deliver up any documents, as held by Mr Justice Phillips (at paragraph 9 of his judgment). On the contrary, Clause 29 of the Agreement appears to envisage that the parties would negotiate an additional payment for any documents that the Davies Group might voluntarily provide. In any event, the prayer for relief against Mr Corney seems misconceived since he is not a party to the proceedings.
64. Mr Davidson accepted in his oral submissions that he could not assert any contractual obligation on the Davies Group to deliver up any documents procured. Instead he submitted that he could rely upon CPR 31.17 and a ‘Norwich Pharmacal’ order in respect of such documents. This was an ingenious but in my view unarguable proposition, since the court is here concerned with the case as presently pleaded against the Davies Group. The claim as pleaded is, in my judgment, bound to fail. This part of the claim should therefore be struck out under CPR 3.4(2) and the Davies Group are also entitled to summary judgment upon it.
The Failure to Use Best Endeavours Claim
65. Mr Beswetherick submits that the pleaded allegation that the Davies Group are in repudiatory breach of Clause 29 of the Settlement Agreement faces insuperable difficulties, as follows: (i) the pleaded case is inadequate; (ii) the breach of Clause 29 MRS JUSTICE COX DBE Ames & Ames v Davies & Ors Approved Judgment
relied upon is not a repudiatory breach; (iii) even if there had been a repudiatory breach, Mr and Mrs Ames affirmed the contract; and (iv) in any event they did not purport to accept repudiation prior to 2 September 2015, by which time their obligation under the Agreement to make payment was due.
66. Mr Beswetherick’s first submission is that the case as pleaded is confused and internally inconsistent. Paragraph 26 pleads as follows:
“26. Since the making of the settlement agreement Mr Corney and the Davies parties have not:
a. made any document available to Mr and Mrs Ames, Mr Spector and/or to the Harlequin Claimants;
b. used best or any endeavours to procure documentation, whether from the data source allegedly affected by the alleged cable damage or otherwise;
c. provided any cooperation to Mr and Mrs Ames and/or the Harlequin Claimants and/or Mr Spector.”
67. Yet, at paragraph 28, it is pleaded that:
“28. Before the provision by the Davies parties of information (and inspection facilities as above), Mr and Mrs Ames do not know whether the non-provision of documentation before or after the making of the settlement agreement, or cooperation after the settlement agreement, is because:
a. no documentation of the relevant type ever existed, or was ever in the possession of Mr Corney, or was ever in the possession of one or more of the Davies parties; or
b. of a failure to use best or any endeavours to procure it (from where ever it might be, including electronic storage); or
c. of an unwillingness to provide documentation and/or to cooperate with Mr and Mrs Ames.”
68. As Mr Beswetherick points out, the alternative possibilities canvassed at (a) and (c) do not involve any allegation of breach of Clause 29. He invites me to strike out this part of the claim on this basis alone. Despite the deficiencies in the pleaded case being pointed out in correspondence, no proposed amendments have been advanced. The Claimants must recognise, he suggests, that they cannot assert that the Davies Group are in breach of Clause 29 of the Agreement.
69. Mr Davidson submits that, notwithstanding any perceived deficiencies in the Particulars, which he does not accept, the evidence now before the court demonstrates MRS JUSTICE COX DBE Ames & Ames v Davies & Ors Approved Judgment
that best endeavours were not used and the claim should be permitted to proceed to trial.
70. While I consider there is some force in Mr Beswetherick’s criticisms of the Particulars of Claim, I have considered this pleaded allegation on its merits, having regard to all the material before the court. In my judgment, having carefully examined all that material, which was also before this court on 2 September, the analysis of Mr Justice Phillips at paragraph 9 of his judgment was entirely right. I respectfully agree with his reasoning and with his finding that, even if it could be shown that there was a breach of this obligation, of which I too am unpersuaded on the evidence, that breach could not be said to be so serious as to go to the root of the Settlement Agreement and to entitle the Claimants to treat it as terminated.
71. In my view none of the documentation referred to at paragraph 21 of Mr Davidson’s revised skeleton argument discloses any arguable case that there has been any breach of this obligation, let alone a repudiatory breach. Mr Spector’s suggestion, at paragraph 65 of his second witness statement, that an inference can be drawn, from Mr Corney’s “uncooperative attitude” in correspondence, that there has been a deliberate decision to withhold information on the endeavours of the Group is in my view fanciful. His further suggestion, at paragraph 64, that Ms Vassallo’s failure to describe in her statement the best endeavours used by the Group signifies acceptance that there was a deliberate breach of Clause 29, is unarguable.
72. I focus at this hearing on the pleaded case. Paragraphs 26 and 28 of the Particulars do not allege a deliberate and dishonest breach of the Agreement by the Davies Group. I do not accept Mr Davidson’s creative submission, during oral argument, that the obligation in Clause 29 was not a warranty but was, rather, an important and positive obligation on the Davies Group such that the failure to perform it was consistent with an intention not to be bound by the contract, or at least that this is arguably the case. There is in my view no real prospect of success for this claim.
73. That is sufficient to entitle the Davies Group to summary judgment on this aspect of the claim. But, even if I were wrong about that and the Claimants could show a repudiatory breach, I accept Mr Beswetherick’s submission that the Claimants would not be entitled to the relief claimed, namely a declaration that the Settlement Agreement was terminated. That is because, on the evidence, the Claimants clearly affirmed this Agreement.
74. The contemporaneous correspondence shows unequivocally that the Claimants had knowledge of that which they now say they rely upon as a repudiatory breach by January 2015 at the latest. In this respect I refer to the letter from ELS Legal to Carter Lemon of 10 December 2014, suggesting that there were documents in existence which would assist the Claimants in their claim but which they did not have and asking for an explanation; to the further email from Mr Spector of 28 January 2015, seeking further explanation by 2 February and indicating that, if the Davies Group were not willing to assist, the Claimants would “…have to consider their options.” On 30 January Mr Spector suggested that since the answers to his questions were not forthcoming, the Claimants would have to “…consider other options such as an application for a summons for cross examination. As we said in our previous email you will understand that our clients cannot leave this issue alone.” MRS JUSTICE COX DBE Ames & Ames v Davies & Ors Approved Judgment
75. There was then no further request for any documents between January and 12 August 2015. Mr Spector now says in his statement that this was because “…it was clear that [Mr Corney] was not intending to respond to our request.” Mr Ames states (at paragraph 20) that,
“ 20. The documents were not forthcoming and on 10th December 2014 I understand Mr Spector wrote to Mr Corney about the documents. Mr Spector also followed up with a letter on 12th January 2015 in respect of Mr Corney’s relationship with Mr Crozier and others which was a cause of concern in relation to those documents. Mr Corney’s responses in January 2015 were clear that the Davies Claimants had not used best endeavours and that they were not willing to do so.”
76. Possessed in January 2015 with knowledge of their alleged right to treat the Settlement Agreement as repudiated, Mr Spector sent an email to Mr Corney, on 23 February 2015, confirming that monies were being sent following the sale of certain properties in Dubai, in accordance with the terms of that Agreement. I accept Mr Beswetherick’s submission that this email admits of no other interpretation than that the Claimants were still seeking to perform their obligations under the Settlement Agreement and were thereby demonstrating affirmation of that Agreement.
77. Even six months later Mr Spector was referring in correspondence to the continuing existence of the Davies Group’s obligations under the Settlement Agreement, asking for those obligations to be performed and referring to the Claimants issuing proceedings if they were not. In his letter to Mr Corney of 24 August, referring to Clause 29, he stated that “…Our clients were and are entitled to the benefit of those best endeavours and it is important to know what has been done and what is going to be done. (We are considering whether to request the taking of any particular steps, but that does not detract from your clients’ obligation to be pro-active.)…..we continue to call upon your clients and you…for the promised co-operation.”
78. Further the pleaded case, at paragraph 30 and in the relief claimed, is that the Claimants accepted the repudiatory breach by “issuing these proceedings.” The Claim was issued on 3 September 2015. The general principle is that following repudiation “…Although both parties are discharged from further performance of the contract, rights are not divested or discharged which have already been unconditionally acquired. Rights and obligations which arise from the partial execution of the contract and causes of action which have accrued from its breach alike continue unaffected...” (See Chitty on Contracts, vol. 1, 38th ed., paragraph 24.053).
79. The relevant date for payment by the Claimants of the £1.3 million was 2 September, so it follows that there was no purported acceptance of the alleged repudiatory breach before that date. Thus, even if the Davies Group had repudiated the contract, the Claimants are still under the obligation to pay that sum. There is no claim for loss and damage and the declaration sought at paragraph (2) of the prayer has no arguable merit.
80. The Claimants now seek to change their position. Mr Spector suggests in his statement that his email sent at 10.07 on 1 September 2015 saying that, in default of a MRS JUSTICE COX DBE Ames & Ames v Davies & Ors Approved Judgment
substantial response to this letter, the Claimants “…will need to issue proceedings and seek an urgent order to prevent enforcement [of the Settlement Agreement]..” constituted notice of repudiation of the Agreement. He states that “…Mr Corney was on notice on 1st September 2015 that should they not respond on that day then [Mr and Mrs Ames] would issue proceedings in respect of the settlement agreement.” Mr Spector does not deal in his statement with the correspondence in January and February.
81. There is in my view no arguable merit in this assertion. First, it is not how the case has been pleaded and no amendments have been proposed. Secondly, it is clear that the Claimants did not themselves believe that they had accepted the alleged repudiatory breach before the date when payment was due. At the hearing on 2 September Phillips J asked Mr Davidson, “…why have you not actually told the other side that you are rescinding or accepting repudiation?” Counsel replied, “Because we wanted to see what they had to say.” The judge referred at paragraph 5 of his judgment to the fact that the Claimants had expressly stated that they would accept repudiation by the issue of the Claim Form in these proceedings.
82. In my judgment, for all these reasons, the pleaded claim that the Davies Group are in repudiatory breach of the Settlement Agreement has no real prospect of success. Nor do I consider that there is any other compelling reason for the issue to be disposed of at a trial. The Davies Group are entitled to summary judgment on this aspect of the claim in addition.
The Misrepresentation Claim
83. Mr Beswetherick submits, on the basis of the pleaded case and the evidence advanced by the Claimants, that Phillips J was right to find there was no arguable case that there were any misrepresentations here, let alone misrepresentations that were fraudulent. Mr Davidson contends that the evidence now before the court reveals an important clash of recollections as to what was said at the relevant times, requiring exploration and determination at trial. In determining the prospects of success for this claim I therefore focus on the pleaded case, the evidence advanced by the Claimants and the relevant documentary evidence.
84. It is pleaded that the Davies Group and Mr Corney were aware of other litigation being pursued by the Claimants, and of the Claimants’ wish to obtain any evidence which would assist them. In that context the pleaded case as to misrepresentation and inducement appears at paragraphs 13 – 22 of the Particulars of Claim. The eight alleged misrepresentations, at paragraphs 13-18 are as follows:
“13. On 30 September 2014 Mr Corney made a telephone call to Mr Spector. In the course of that telephone call he made the following representations:
(representation 1) that he had seen and had in his possession at the time of the call a number of documents that would significantly assist the Harlequin Claimants in claim HT38 (and therefore that it was at that time his professional opinion that such documents would MRS JUSTICE COX DBE Ames & Ames v Davies & Ors Approved Judgment
significantly assist the Harlequin Claimants in that claim);
(representation 2) that he had in his possession a particular document which contained the words (which he purportedly read out) ‘get as much money from Harlequin as quickly as possible’;
(representation 3) that he knew that there were several other e-mails of ilk similar to that which he had (allegedly) read out.
14. On 1 October 2014 there was a telephone call between Mr Corney and Mr Spector at about 3 p.m. In the course of that telephone call Mr Corney said that:
a. (contrary to representation 2) he had not had in his possession on 30 September the document mentioned in representation 2 and that what he had been doing when purportedly reading out text from such document was relaying approximately what had been read aloud to him by some person who he did not identify (representation 4). (It follows that representation 2 was false and was known by Mr Corney to be false at the time that he made it, and also that it was withdrawn in this telephone call. Representations 1 and 3 were not withdrawn.);
b. ‘the documents’ existed and that they would help the Harlequin Claimants in claim HT38 (and implicitly, therefore, that it was at that time his professional opinion that such documents would significantly assist the Harlequin Claimants in that claim) (representation 5). (The reference to ‘the documents’ was to the documents mentioned in representations 1-3 inclusive.);
c. he was still seeking further information as to whether he could disclose any of the documents in order to assist entering into a settlement.
15. The position was known to both Mr Corney and Mr Spector to be that Mr Spector wished to see a sample of the alleged documentation before entry into a settlement. (This was known from their conversations and in due course mentioned in writing, in an e-mail from Mr Spector to Mr Corney timed 22.07 on 5 October 2014.) MRS JUSTICE COX DBE Ames & Ames v Davies & Ors Approved Judgment
16. On 1 October 2014 by e-mail timed 16.39 Mr Corney said that he did ‘not think there will be any objection to providing an early showing of at least some of the available material. I will take instructions on this.’ This was a representation that documents of the type which had been discussed existed (representation 6). It was also a representation that there was a bona fide intention on the part of the Davies parties that if a settlement were reached which envisaged the provision of documents considered supportive of the Harlequin Claimants in claim HT38 then appropriate documentation would be supplied to Mr and Mrs Ames and/or such Claimants (representation 7).
17. On 2 October 2014 there was a telephone call between Mr Corney and Mr Spector. In the course of it Mr Corney stated that:
a. he had been told by his clients that he would have ‘the documents’ in his possession the following morning; and
b. he would be able to provide to Mr Spector a redacted version of one of the documents.
These statements renewed representation 6. The first of them indicated that if Mr Corney had indeed had in his possession at the time of representation 1 any of the documents of the type indicated in that representation he no longer had possession of them; it probably indicated that representation 1 had been false at the time that it was made (there being no apparent reason why Mr Corney should have parted with possession of any such documents in the interim), but in any event from the time of this telephone call Mr Spector did not believe that Mr Corney had in his possession at the time of the telephone call of 2 October any of ‘the documents’.
18. On 3 October 2014 Mr Spector sent Mr Corney an e-mail timed 10.15 asking whether Mr Corney had received the documents which he had said he would be receiving. In reply there was a telephone call between Mr Corney and Mr Spector in the course of which Mr Corney said that there had been a small fire at an office which had damaged cables (representation 8). This was repeated by Mr Corney in an e-mail timed 13.01 in which he added that he had been told that a redacted copy would arrive very shortly but that he had been expecting it for ‘some time now’. It was not suggested at any time that there had been any destruction of or damage to documents in any form: only, that cables had been damaged.” MRS JUSTICE COX DBE Ames & Ames v Davies & Ors Approved Judgment
85. It is then alleged that by 7 October, when the application for the Claimants’ committal was soon to be heard and the Claimants “…wanted urgently to finalise the form of a settlement agreement and achieve a settlement…” no documentation had been provided by Mr Corney. Negotiations broke off but resumed on 19 October and the Tomlin Order and scheduled Settlement Agreement were both signed on 20 October. The Claimants plead at paragraphs 22 -23:
“22. By the time of the settlement agreement no document of the type which Messrs Corney and Spector had been discussing had been provided to Mr Spector or Mr or Mrs Ames whether for inspection or for any other purpose. Apart from representation 2, none of the representations had been or was withdrawn.
Inducement
23. Mr and Mrs Ames were induced by the representations (other than the withdrawn representation 2; and any belief that Mr Corney was in possession of relevant documents had been removed) whether collectively or individually to enter into the settlement agreement.”
86. There are, in my view a number of difficulties with the Claimants’ pleaded case. The first alleged misrepresentation by Mr Corney (representation 1) includes not only a statement of fact that he had a number of documents in his possession, but also an implied representation that in his professional opinion those documents would significantly assist the Claimants in the Wilkins Kennedy litigation. There is, however, no pleaded allegation that Mr Corney’s opinion was dishonestly held, which there must be if such a claim is to be actionable. If it is to be alleged that Mr Corney expressed a false opinion, knowing it to be false, because he had not in fact seen and did not have any documents, then fraudulent misrepresentation must be pleaded distinctly and properly particularised.
87. There is little doubt that fraudulent misrepresentation is what is being alleged here. In his statement Mr Spector alleges that Mr Corney made these untrue representations in order to induce the Claimants into a deal that he felt was potentially slipping away. On 2 September Mr Justice Phillips pointed out during argument that what was being alleged would be a fraudulent misrepresentation by a solicitor. Mr Davidson submitted that it was “…a remarkable and fraudulent misrepresentation…” and that this was a “…very ugly case…” He repeats in his skeleton argument prepared for this hearing that the pleaded case puts in issue the truth of each of the representations. Yet fraudulent misrepresentation is not specifically pleaded. It is not even pleaded that Mr Corney did not hold the alleged opinion, let alone that it was not honestly held, and no particulars are given of the alleged dishonesty. I accept Mr Beswetherick’s submission that the pleaded case is insufficient. No proposed amendments have been advanced in this respect.
88. As regards the substantive allegations at paragraphs 13-14, having examined the contemporaneous correspondence and notwithstanding what is said now as to telephone conversations which took place between Mr Corney and Mr Spector at the time, I consider there is no prospect of success for the claim in respect of the first MRS JUSTICE COX DBE Ames & Ames v Davies & Ors Approved Judgment
representation. I emphasise that this is clear to me from the correspondence and the Claimants’ own evidence, and is not the result of any mini-trial on the competing contentions of the parties. The focus in oral argument was on this first representation and, for reasons which will become apparent, it follows from my analysis and conclusion in relation to this representation that the claims in relation to each of the other alleged representations also have no prospect of succeeding.
89. First, as Mr Spector confirms, he has no attendance notes relating to the telephone conversation on 30 September 2014 which he now says he remembers clearly. That in itself would not be an insuperable barrier, but the main difficulty is that the pleaded allegation is wholly inconsistent with what Mr Spector himself said in his letter of 10 December 2014. Written just over two months later it is accepted that this is the most contemporaneous document available which relates specifically to what was said during the negotiations on 30 September and 1 October.
90. Although Mr Corney’s second representation, that he had a particular document in his possession, is said at paragraph 14 a. to have been withdrawn on 1 October, it is specifically pleaded that the first representation, that he had seen and had in his possession other helpful documents, was not withdrawn. Yet in this letter Mr Spector said as follows:
“ We write further to recent settlement negotiations in claim number HQ3X02764 during which we acted for the Defendants and you acted for the Claimants. Those discussions took place on a without prejudice basis and the negotiations will remain confidential between the parties. During those discussions Chris Corney of your firm told Mr Spector of our firm that he had seen documents which may significantly assist our clients in claim number HT-2014-000038. Mr Corney read out to Mr Mr Spector the substance of one of the documents that he said that he had seen and said that he understood there to be many others of similar importance. The following day Mr Corney, during a telephone conversation with Mr Spector, apologised and partially retracted what he had said the previous day. Mr Corney said that he had not actually seen the documents but that they had been read out to him on the telephone and that the document he had read to Mr Spector the previous day did not say exactly what he had said. Mr Corney confirmed that he did know who was in possession of the documents and the location of the documents. The following day Mr Spector was informed by Mr Corney that the documents had been lost in a fire but not destroyed.”
91. Quite apart from the fact that Mr Corney’s “understanding” as to the existence of other documents has been elevated in the pleaded case to “knowledge” that this was the case, Mr Spector’s clear recollection at that point was that Mr Corney said he had not seen the documents, and that he did not have any documents in his possession. The pleaded case, that Mr Corney represented and continued to represent that he had seen documents and that they were in his possession, is therefore inconsistent with this letter. Mr Spector does not explain this inconsistency but, on the contrary, suggests in his statement that what he said in the letter of 10 December was correct. MRS JUSTICE COX DBE Ames & Ames v Davies & Ors Approved Judgment
If so, the basis for the claim based upon the alleged first representation seems to me to fall away entirely.
92. Nor does Mr Ames support the pleaded case. He states that within days of the discussions at the end of September Mr Corney was saying that he did not have the documents in his possession and nor had he read them; and that Mr Spector rang to tell him this.
93. Additional emails exchanged between the solicitors at around this time, referred to by Mr Justice Phillips in his judgment, seem to me to support this analysis and to show clearly that Mr Corney did not have any documents and that he was not representing that he did. I have considered all this correspondence, to which I was referred in detail by both counsel, but I refer here only to that which I regard as material to the issues I have to determine.
94. The email from Mr Corney of 1 October at 16.39 states, so far as relevant,
“You have also said today that your client regards production of certain documents which may assist the WK case as an essential element of the deal. Although I have envisaged that these would be provided as part of general cooperation (since it will be in our clients’ interest to assist your clients with the WK claim), I do not think that there will be any objection to providing an early showing of at least some of the available material. I will take instructions on this.”
In his response, Mr Spector asked to meet Mr Corney the following afternoon so that he could “…see the document that you described to me on the telephone and any other relevant documents relating to the professional negligence case.”
95. It appears that no meeting took place. On 3 October at 13.01, Mr Corney wrote,
“ I regret to advise that the redacted document that has been read to me over the phone has not arrived, but I understand that this is solely due to a small fire at an office which has damaged the cables. I am told that a redacted copy will arrive very shortly, but I have been expecting it for some time now.”
Later on at 16.11 his email read as follows:
“ I regret to advise that I am informed that there are further delays in delivering certain documents to us.
For what it is worth, I am convinced that this is a genuine technical problem and not a reluctance of the party holding the document to cooperate. I am immensely frustrated by this and I will update you as and when I get more information.
To reiterate though, I expect to receive a copy of a sample or one or two pages of the material which will be partially redacted to delete the names of the parties and dates. I anticipate that we will agree to release unredacted copies of MRS JUSTICE COX DBE Ames & Ames v Davies & Ors Approved Judgment
the items referred to above as a term of the settlement if we are able to finalise other terms.
The intention in disclosing this material is to demonstrate the goodwill and intention of our clients to provide further assistance to your clients because of the mutual interest that they would have in achieving a successful outcome to the WK Litigation. It is not however an invitation to enter a prolonged discussion as to the extent of the evidence which my clients will be able to deliver. If a settlement is concluded there will be an opportunity for the parties and their representatives to consider this aspect in greater depth.
We had envisaged this as part of a confidence building exercise between our clients as we progressed towards a possible settlement.”
96. The terms of the Settlement Agreement were under active discussion at this time and at 18.53 on 6 October Mr Corney wrote,
“We agreed in our wp telephone conversation this evening that our clients would proceed with a settlement on the basis of a debt of £1.3m, with a note that the parties are to continue discussing the possibility of providing further documents to assist in the WK litigation. If we are in a position to produce documents in question then the parties may agree that a further £250,000 is payable on a successful outcome to the WK litigation, but neither side will commit to that in this settlement agreement. If I receive the relevant documents in the next few hours then we may have time to consider them and adjust the agreement accordingly, but I think that there may not be sufficient time to deal with this prior to the date fixed for the contempt application.”
In my view this email shows unequivocally that Mr Corney did not have any documents. Mr Spector wrote on 8 October at 20.08, thanking Mr Corney for all the hard work he had put into the negotiations and stating that “...once the documents were lost in the fire my clients got twitchy feet as they had potential value for my client and he frankly didn’t believe that a fire was the reason.”
97. Neither Mr Ames nor Mr Spector address this exchange of email correspondence in their statements. It is clear to me, however, that the communications passing between the solicitors at this time, read as a whole, is capable of only one interpretation. At this time the Claimants understood that the Davies Group were unable to produce any documents and that Mr Corney did not have any in his possession; and that they were nevertheless willing to enter into an agreement without payment by them being made conditional upon such documents being provided by the Davies Group.
98. At that point, the settlement negotiations were briefly suspended by the Claimants, Mr Spector stating in his email of 8 October that he had no instructions to settle at that point. However, he then wrote again on 20 October at 14.19 confirming that “…we MRS JUSTICE COX DBE Ames & Ames v Davies & Ors Approved Judgment
have instructions to settle on exactly the same terms as previously agreed.” He made no reference to documents being obtained by the Davies Group or to whether any such documents were available. The Tomlin Order and Settlement Agreement were signed that evening and sealed by the court on the following day. The next letter from Mr Spector was the one dated 10 December to which I have referred.
99. The claim now advanced that the Claimants believed, as at the date the Settlement Agreement was signed, that Mr Corney had seen and received helpful documents is therefore unsustainable. It is also inconsistent with the fact that they entered into an agreement, the terms of which did not entitle them to receive any helpful documents that the Davies Group might procure.
100. For these reasons I find that there is no realistic prospect of success for a claim predicated upon alleged reliance by the Claimants on a representation that Mr Corney had seen and received documents, which both Mr Ames and Mr Spector had been told he had not himself seen or read and did not possess. Since Mr Corney had not himself read them, the pleaded implied representation that in his opinion they were helpful documents is also doomed.
101. Even if I were wrong in that analysis, the Claimants have a further difficulty in their claim as to this first representation. Since they were aware, as at 20 October, that Mr Corney had not seen and did not possess the documents, their pleaded claim that they would not have entered into the Agreement but for that representation is in my view unsustainable.
102. I should add that, on the evidence, I consider that the Claimants’ right to rescind was lost in any event and I accept Mr Beswetherick’s submissions in this respect. By January 2015 the Claimants were aware of the position of which complaint is now made, yet they did not purport to rescind until September 2015. In addition to the fact of delay they had, during that period, affirmed the Agreement by demanding documents said to be due to them pursuant to its terms. Further, on 23 February 2015 Mr Spector sent the email at 08.35 providing confirmation that monies said to be due under the Agreement were being sent to the Davies Group, namely funds generated from the sale of properties in Dubai.
103. In relation to the seven other pleaded representations, the position is as follows. The Claimants allege that the second representation was withdrawn and therefore do not rely upon it. That there are no prospects of success for the third representation is apparent for the reasons already set out above in relation to the first.
104. Representation 4 appears to me to be misconceived. Mr Corney agrees that during their discussion on 1 October he made it clear to Mr Spector that he had not seen any documents and that he had been relaying what was read aloud to him. In other words he states that this representation was true. Even if it were the case that Mr Corney had withdrawn representation 2 as a false representation, Mr Spector does not allege that this fourth representation was false. At paragraph 72 of his statement he states:
“ I do not assert (and have never asserted) that, when Mr Corney told me on 1st October 2014 that what he had done on 30th September 2014 was relay approximately what had been read aloud to him by some person (who he did not identify). He MRS JUSTICE COX DBE Ames & Ames v Davies & Ors Approved Judgment
was lying. I do say firmly that on 30th September 2014 he said that what he was doing was reading from a document, and that that statement was a lie.”
On the Claimants’ own case therefore this was not a misrepresentation, and it cannot sensibly be said to have been a material inducement to them to enter into the Agreement.
105. The fifth alleged representation is a further allegation of dishonesty against Mr Corney, which is subject to the same deficiencies of pleading that apply to the first alleged fraudulent representation. It is in any event without merit. Since it was known to the Claimants and Mr Spector that Mr Corney had not seen or received any documents, the claim that he represented that “the documents” existed, and that in his opinion they were helpful to the Claimants, has no real prospect of success.
106. The sixth alleged representation of fact, at paragraph 16 of the pleaded case, is said to have been made in the email of 1 October timed at 16.39. In my view, however, that email is incapable of bearing such an interpretation. No reasonable person would have understood from the words relied upon, in their context, that Mr Corney was representing as a fact that such documents existed and that he knew that they did. The relevant context obviously includes the fact that this email was sent just over an hour after the 3 pm call on the same day, when Mr Corney made it clear that he had not seen and did not possess any of “the documents”. Nor can it be said that this representation was renewed on 2 October, having regard to the words relied upon in the telephone call of that day.
107. Further, the Claimants do not in any event plead that such documents do not exist. The correspondence suggests that Mr Ames, at least, knew that there might be helpful documents and knew the person who had possession of them. In his letter to Mr Corney of 12 January 2015, Mr Spector stated that Ms Crozier had “…texted Dave Ames to say that she had documents that could help Harlequin in their claim against Wilkins Kennedy the morning after you told me that you had access to such documents.” His letter of 10 December 2014 had also referred to the fact that “…Ms Crozier left a voicemail for Mr Ames telling him that she had documents that could help the Claimants…” After these proceedings were issued Mr Spector stated in his letter of 7 September 2015 that “We understand that documentation did exist around the time that proceedings were settled and our clients intend to make a Third Party Disclosure Application in respect of those documents.” Yet no such application has been made.
108. In relation to the seventh alleged representation, I am unable to discern any such representation from the terms of the 16.39 email of 1 October. In any event the existence of such a representation seems to me to be entirely negated by the express terms of the Agreement signed. There was no obligation upon the Davies Group to supply any documentation that was obtained to the Claimants.
109. The final pleaded representation is that Mr Corney said, and repeated in an email, that there had been a small fire at an office which had damaged cables. However, what Mr Corney actually said in the 13.01 email of 3 October is not in dispute. He relayed to Mr Spector only what had been relayed to him by another and that he understood there to have been a fire. He was not therefore representing that there had in fact been MRS JUSTICE COX DBE Ames & Ames v Davies & Ors Approved Judgment
a fire. And Mr Spector says in his statement that “As it was never suggested that the fire was at Carter Lemon Camerons’ office or on their equipment Mr Corney was dependent on what he was told by others.” The fact that Mr Spector now says he is reluctant to accept that there was such a fire is immaterial to the pleaded claim. There is no pleaded allegation that Mr Corney fabricated the existence of a fire and there is apparent acceptance that he was relying on what others had told him, rendering unsustainable the claim against the Davies Group in misrepresentation. In any event the allegation that this was a material inducement for the Claimants to enter into the Agreement is inconsistent with Mr Spector’s email of 8 October stating that the Claimants did not themselves believe that a fire was the reason why documents had not been provided.
110. In all these circumstances I consider that none of the pleaded misrepresentations relied upon in this claim has any realistic prospect of success. And in respect of each of those alleged misrepresentations, the Claimants face, in my view, the same insuperable obstacles, in the form of the loss of their right to rescind and their affirmation of the Agreement, to which I have already referred. In so finding I respectfully agree with Mr Justice Phillips, who considered the Claimants to have no arguable case in misrepresentation on essentially the same material.
111. It follows that my conclusion is that this is a claim which, in its entirety, has no real prospect of succeeding. I have considered Mr Davidson’s submissions as to the “highly charged” background to this case, the serious dispute between two solicitors of partner status and the serious allegations made, both against the Claimants in the first proceedings and now against Mr Corney. Mr Davidson sought to persuade me that all these factors indicate a compelling reason for there to be a trial in this case. Mr Spector, as a solicitor, is entitled not to be disbelieved without being heard and the same, it is said, applies to Mr Corney. Getting to the truth is important, he submits, and what happened in this matter should be exposed to view in open Court.
112. I find these submissions unpersuasive. Repeated reference was made by Mr Davidson to the efforts of the Davies Group deliberately to keep the background circumstances from my view. He suggested, in somewhat ‘cloak and dagger’ terms that their evidence had been “very carefully prepared”; that there was more to the relationship between Ms Crozier, Mr Corney and the Davies Group than was apparent in the material presently before the court; and that I was entitled to conclude that the Defendants were seeking to conceal what had actually been going on.
113. However, these submissions, albeit skilfully advanced, seem to me to amount to an attempt to detract from the deficiencies in the Claimants’ own pleaded case and from the lack of any evidence to demonstrate that pleaded case to be one which has any realistic prospect of success. I reject them. No reasonable grounds exist for believing that a fuller investigation into the facts of this case would add to or alter the evidence available to a trial judge and so affect the outcome. And no compelling reason why this case should be disposed of at a trial has been shown. In my judgment the Davies Group are entitled to summary judgment on the whole of this claim.
114. It follows that the Davies Group are still entitled to the sum that the Claimants agreed to pay, in the Settlement Agreement entered into as long ago as 20 October 2014. This claim has all the hallmarks of an attempt by the Claimants, made very late in the day, to avoid their obligations under that Agreement. I would add, finally, that I too MRS JUSTICE COX DBE Ames & Ames v Davies & Ors Approved Judgment
arrive at the same conclusion as Mr Justice Phillips as to the primary motive for these proceedings.