(1) Mark Alan Holyoake v (1) Nicholas Anthony Christopher Candy
| Jurisdiction | England & Wales |
| Judge | Mr Justice Nugee |
| Judgment Date | 21 December 2017 |
| Neutral Citation | [2017] EWHC 3397 (Ch) |
| Docket Number | Case No: HC-2015-003369 |
| Court | Chancery Division |
| Date | 21 December 2017 |
[2017] EWHC 3397 (Ch)
Mr Justice Nugee
Case No: HC-2015-003369
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A1NL
Roger Stewart QC, Richard Fowler and John Beresford (instructed by Gunnercooke LLP) for the Claimants
Tim Lord QC, Thomas PlewmanQC, Geoffrey Kuehne and Ben Woolgar (instructed by by Gowling WLG (UK) LLP) for the Defendants
Hearing dates: 7–10, 13–17, 20–24, 27 & 28 February 2017, 1–3, 6–10, 13–17, 20–22 March & 4–7 April 2017
Judgment Approved
| Index | Para |
| Introduction | 1 |
| The Witnesses | 10 |
| Mr Holyoake | 12 |
| Mr David Wells | 31 |
| Mr Willliam Pym | 35 |
| Mr William Lovering | 41 |
| The Candy brothers | 44 |
| The ownership of CPC | 47 |
| The Candy brothers' style of doing business | 69 |
| The Candys as witnesses | 71 |
| Mr Richard Williams | 74 |
| Mr Steven Smith | 78 |
| Mr Timothy Dean | 81 |
| Mr Benjamin David | 82 |
| The Facts | |
| Mr Holyoake contracts to acquire GGH | 83 |
| From contract to 12 October 2011 | 100 |
| The events of 12–13 October 2011 | 113 |
| The alleged fraudulent misrepresentation by Mr Williams | 135 |
| After 13 October – the net asset statement | 144 |
| Set up to fail? | 162 |
| The threat to approach Investec | 170 |
| Did Mr Holyoake request that the loan be kept confidential from Investec? | 182 |
| From 29 November 2011 to 31 January 2012 | 191 |
| Wragges' letter of 2 February 2012 | 202 |
| Meeting in Guernsey on 6 February 2012 | 216 |
| Was the Supplemental Loan Agreement binding on Mr Holyoake? | 232 |
| From the Supplemental Loan Agreement to 19 March 2012 | 246 |
| The £135.m from Mr Chernyshev | 248 |
| CPC approaches Investec | 250 |
| Threats to Mr Pym | 262 |
| Conspiracy to steal the site? | 266 |
| From 19 March to 4 April 2012 | 291 |
| Telephone call of 4 April | 304 |
| From 4 April to 14 June 2012 | 323 |
| Further escrow agreements | 331 |
| Extension and Joint Marketing Agreements | 342 |
| The Claims | 383 |
| Fraudulent misrepresentation by Mr Williams on 12 October 2011 | 385 |
| Fraudulent misrepresentations by Mr Christian Candy on 8 November 2011 | 386 |
| Duress | 396 |
| Actual undue influence | 404 |
| Intimidation | 409 |
| Extortion under colour of due process | 413 |
| Unlawful interference with economic interests | 432 |
| Unlawful means conspiracy | 438 |
| Unlawful processing contrary to the DPA and misuse of private information | 451 |
| Penalties | 466 |
| The CCA | 489 |
| Conclusion | 526 |
Introduction
Grosvenor Gardens House ( “GGH”) is a Grade II listed mansion block designed by the distinguished Victorian architect Thomas Cundy III and completed in around 1868. It is situated in the Grosvenor Gardens Conservation Area in the City of Westminster, on the eastern edge of Belgravia, just around the corner from Victoria station. The major part of the conservation area consists of two triangular open spaces known as Grosvenor Gardens, lined with grandly-scaled mid-Victorian terraces, and GGH defines the north- east side of the lower, southern, triangle.
In the relevant volume of Sir Nikolaus Pevsner's Buildings of England (London 6: Westminster) the authors describe the area as having been developed:
“in large blocks, mostly from corner to corner; the style chosen was a version of the rich c17 French Renaissance which started in London at the Grosvenor Hotel (q.v. Victoria Station, the terminus for Paris)”
and GGH itself as having been built for the Belgrave Mansions Co and containing:
“first-class flats, which, in imitation of ‘the Parisian mode of life’ were let furnished, the earliest in London. A restaurant within saved residents from having to cook.”
The building consists of a ground and four upper storeys, faced in red brick with Portland stone dressings, with fifth and attic storeys contained in steeply pitched slate mansard roofs of distinctly French pavilion character. It occupies an entire island site with its principal façade of 23 bays fronting onto Grosvenor Gardens, with short returns on Beeston Place and Buckingham Palace Road, and a noticeably utilitarian and irregular elevation at the rear facing a narrow service-road, Eaton Lane, on the other side of which is the garden of The Goring Hotel.
Much of the original architectural and structural integrity of GGH has survived but by 2011 it had long since ceased to be used for its original purpose. Apart from some retail units on the ground floor, the building was let out as relatively low grade office units to a range of small business tenants. When an opportunity arose to buy the freehold, Mr Mark Holyoake (the First Claimant in this action), who had some experience of developing property in the area, was attracted to the idea of buying it with a view to converting it back into high-class residential use, and on 18 July 2011 caused Hotblack Holdings Ltd (the Second Claimant, “ Hotblack”), a Jersey company ultimately owned by him, to contract to buy the freehold for £42m.
Under the terms of the contract completion was originally due on 16 September 2011, but Mr Holyoake was not in a position to complete on that date, and secured an extension. He was however still short of the funds needed and on 12 October, after other attempts to raise funds had been unsuccessful, he approached Mr Nicholas (or Nick) Candy (the First Defendant) for a loan of £12m at very short notice, offering generous terms of interest at 20% per annum and 20% of the net profits of the development for an unsecured personal loan. Mr Holyoake had met Mr Nicholas Candy at university and they were close friends; by 2011 he and his younger brother Mr Christian (or Chris) Candy (the Second Defendant), universally referred to as “the Candy brothers”, had become famous as highly successful and wealthy property developers, well-known for expensive residential property development, not least at One Hyde Park, whose units were sold at what was then the highest price per square foot ever achieved in the London property market. Mr Nicholas Candy passed Mr Holyoake's request to his brother, and a loan was duly negotiated over the course of the day and completed on 13 October. It took the form of a loan from CPC Group Ltd (the Sixth Defendant, “CPC”) to Mr Holyoake personally, initially unsecured but to be secured if not repaid within 5 months, with interest of 20% per annum, compounded quarterly, and carrying an entitlement to 30% of net profits with a minimum of £10m. CPC is a Guernsey company wholly owned, at least ostensibly, by Mr Christian Candy. The loan enabled Hotblack to complete the purchase of GGH on 13 October.
Mr Holyoake had anticipated not only benefiting from having the funds to complete the purchase but also from the Candy brothers' expertise in high-class residential development, his plan being to obtain planning permission, redevelop GGH and sell it as luxury flats, a project which he thought would be very profitable. He was disconcerted therefore to find that instead of devoting their energies to supporting the project, the Candy brothers seemed more intent on securing CPC's position in relation to its loan. CPC queried the sufficiency and accuracy of a net asset statement Mr Holyoake had provided as part of the terms of the loan; threatened, in Mr Holyoake's view unjustifiably, to disclose the loan to the senior lender into the project; and then on 29 November 2011 formally confirmed that in its opinion Mr Holyoake was in default under the loan for failing to provide an acceptable net asset statement. CPC then attempted to get Mr Holyoake either to repay the loan or provide security for it, and a long series of supplemental agreements between Mr Holyoake and CPC, rescheduling the loan on terms, were negotiated and entered into, some against the background of actual or threatened proceedings.
Mr Holyoake in due course succeeded in obtaining planning permission for the development of GGH which was granted to Hotblack in July 2013. But he did not build out the development, being already bound under one of the agreements with CPC to sell GGH. Hotblack in the event sold it in February 2014 for over £86m. That enabled Mr Holyoake to repay CPC's loan in full, and in all he paid CPC over £37m, made up of the principal of the loan (£12m), interest (some £7.5m), the minimum profit share (£10m) and extension fees (£7.5m). He also paid large sums (some £795,000) in respect of CPC's legal costs. The sale proceeds were also sufficient to enable Hotblack to pay back its senior lender, Capital A Finance plc ( “Capital A”), and a junior or mezzanine lender, Oscarone Investments Ltd ( “Oscarone”), but a large number of other smaller investors had lent into the project, and many of those have not been repaid. Overall the project made a substantial loss.
In this action, Mr Holyoake brings a number of claims, largely in tort. He claims that he was deceived into entering the loan in the first place by a misrepresentation by a director of CPC, Mr Richard Williams (the Third Defendant), said to have been made fraudulently, that his net asset statement was being sought as a formality and would not be used against him. A second group of claims is based on allegations that CPC used threats and intimidation to persuade him to enter into the supplemental agreements, this giving rise to claims that the agreements were entered into as a result of duress, undue influence, intimidation, extortion under colour of due process and unlawful interference with economic interests, and that he and Hotblack were the victims of an unlawful means...
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