Andrew James Bridgen v Paul Julian Bridgen
| Jurisdiction | England & Wales |
| Judgment Date | 08 September 2023 |
| Neutral Citation | [2023] EWHC 3232 (Ch) |
| Docket Number | Claim No: CR-2019-BHM-001027 |
| Year | 2023 |
| Court | Chancery Division |
[2023] EWHC 3232 (Ch)
Claim No: CR-2019-BHM-001027
IN THE HIGH COURT OF JUSTICE
BIRMINGHAM DISTRICT REGISTRY
BUSINESS AND PROPERTY COURTS IN BIRMINGHAM
INSOLVENCY AND COMPANIES LIST
IN THE MATTER AB PRODUCE TRADING LIMITED
AND IN THE MATTER OF THE COMPANIES ACT 2006
Counsel for the Petitioner – Mr Zaman KC
Counsel for the First Respondent – Mr Auld KC
Hearing 5/9/23 – 8/9/23
Handed down 15 December 2023
INTRODUCTION
On 30 November 2018 Andrew James Bridgen MP (“Andrew”) presented three petitions, in reliance on Section 994 of the Companies Act 2006 (“CA 2006”) asserting that the affairs of: (a) A.B. Produce Trading Limited (“ABPT”); (b) Bridgen Investments Limited (“BIL”); and (c) AB Farms Limited (“ABF”) are being or have been conducted in a manner which is unfairly prejudicial to the interests of Andrew as a member of those companies. The petition for ABPT relates to the manner in which the affairs of its wholly owned subsidiary, AB Produce PLC (“PLC”) have been conducted. The petitions for BIL and ABF related to the way in which their affairs have been conducted.
On 15 November 2019 Insolvency and Companies Judge Jones directed that there would be a trial first to determine whether Andrew's claim that the affairs of ABPT and/or BIL and/or ABF are being or have been conducted in a manner which is unfairly prejudicial to the interests of Andrew, as a member of those companies were well founded. If and to the extent that they were found to be well founded there would then be a further hearing to determine what relief, if any, should be granted to Andrew under Section 996 CA 2006.
The shareholders of ABPT are:
(a) Andrew — 37,000 shares;
(b) Paul Julian Bridgen, Andrew's brother (“Paul”) (First Respondent to the ABPT Petition) — 37,000 shares;
(c) Peter John Ellis (“Mr Ellis”) (Second Respondent to the ABPT Petition) — 500 shares;
(d) Derek Tomkinson (“Mr Tomkinson”) (Third Respondent to the ABPT Petition) — 667 shares; and
(e) the Managing Trustees of AB Produce SSAS Retirement and Death Benefit Scheme (“the SSAS”) — 8,185 shares. The trustees of the SSAS are, or were (in the case of JLT): Andrew, Paul, Alan Bridgen (Andrew and Paul's father) (Fourth Respondent to the ABPT Petition) Ann Bridgen (Andrew and Paul's mother) (Fifth Respondent to the ABPT Petition) and JLT Trustees Limited (“JLT”) (Sixth Respondent to the ABPT Petition).
The shareholders of BIL are:
(a) Andrew — 37,000 shares;
(b) Paul — 37,000 shares;
(c) Mr Ellis — 500 shares;
(d) Mr Tomkinson — 667 shares; and
(e) the SSAS – 8,185 shares.
The First-Sixth Respondents to the BIL Petition are the same as for the ABPT Petition.
The shareholders of ABF are:
(a) Andrew — 49 shares;
(b) Paul – 49 shares;
(c) Mr Ellis – 1 share; and
(d) Mr Tomkinson – 1 share.
Paul, Mr Ellis and Mr Tomkinson are the first three Respondents to the ABF Petition.
The remaining respondents to each of the Petitions were ABPT, BIL and ABF, joined as nominal respondents to the petition presented in respect of the conduct of their respective affairs.
Whilst Alan, Ann and JLT, as trustees of the SSAS were not, unlike ABPT and BIL, nominal respondents to the petitions presented in respect of their affairs, bound to adopt a neutral stance, none of them were alleged by Andrew to be in any way involved in the conduct of which Andrew complained and all have adopted a neutral position.
The trial to determine whether Andrew's allegations of unfair prejudice were well founded took place at the end of 2021 before me (“the Liability Hearing”). In a judgment which I handed down on 29 March 2022 (“the Liability Judgment”) I determined that (a) the petitions presented by Andrew against ABF and BIL were not well founded and should be dismissed; (b) the allegations of unfair prejudice on the part of Mr Ellis and Mr Tomkinson in relation to ABPT were not well founded and should be dismissed; and (c) some of the allegations of unfair prejudice on the part of Paul in relation to ABPT that referred to Paul's conduct in relation to ABPT's wholly owned subsidiary, PLC were well founded.
In this judgment I have to decide what, if any, remedy to grant in respect of the elements of the ABPT Petition which I found to be well founded.
BACKGROUND
Full details of the background to the presentation of the three petitions by Andrew are contained in paragraphs 12 – 110 of the Liability Judgment and I do not propose to repeat them here (paragraphs 12 – 43 contain a history of “the Group” as that term is defined in the Liability Judgment; paragraphs 44 – 163 set out the allegations of unfair prejudice for all three petitions; and paragraphs 52 – 110 relate to Paul's conduct in relation to the affairs of PLC, ABPT's subsidiary).
In my order dated 30 June 2022 (“the Order”) which I made following the handing down of the Liability Judgment, I declared that certain allegations made in the ABPT Petition against Paul were well-founded. The basis upon which I did so and the relevant paragraphs of the Liability Judgment dealing with those findings, in summary are:
...(a) PLC had a contract with 4R for the removal of lime from a site at Cemex (“the Cemex Subcontract”). PLC sub-contracted the work to both PJ & CL Bridgen (“the Partnership”) and to Gilbert Transport. The Partnership agreed to charge the same as Gilbert Transport and PLC did not agree to bear any of the costs incurred by the Partnership in performing that subcontract. In breach of his duties, as director of PLC, Paul alone decided what the Partnership would charge PLC and failed to disclose to the board of PLC the nature and extent of the Partnership's interest in the Cemex Subcontract (Liability Judgment paragraphs 441 – 470). I found that Paul: failing to disclose to the board of PLC the nature and extent of the contract between the Partnership and PLC and deciding what the Partnership should charge PLC was not however unfair or prejudicial to Andrew, unless the Partnership charged PLC materially more than Gilbert Transport for the same work (paragraphs 658 – 686 of the Liability Judgment);
(b) PLC had two contracts with Biffa, one for the disposal of solid waste (“the Biffa Solids Subcontract”) and one for the disposal of liquid waste (“the Biffa Liquids Subcontract”). PLC subcontracted to the Partnership the removal of the solid waste and the Partnership in turn subcontracted all of the actual disposal work to Gilbert Transport, but agreed, I found, to charge PLC the same price as Gilbert Transport charged it. As for spreading the Biffa liquid waste, PLC employed Prestons, and later Prestons and the Partnership to spread the Biffa liquid waste. The Partnership agreed to charge PLC £7 – £8.50 per tonne of Biffa liquid waste spread by the Partnership, and had the free use of a boom and tanker owned by PLC to carry out that work. Paul breached the duties that he owed to PLC as its director by deciding, on behalf of the Partnership and PLC, what the Partnership would charge PLC for performing each subcontract and by failing to disclose the nature and extent of the Partnership's interest in either subcontract to the board of PLC (paragraphs 472 – 489 of the Liability Judgment). I found that Paul deciding what the Partnership should charge PLC and failing to disclose the nature and extent of the Biffa subcontracts between the Partnership and PLC was not however unfair or prejudicial to Andrew unless: (i) for the disposal of Biffa solid waste, contrary to Paul's evidence, the Partnership charged PLC materially more than Gilbert Transport charged the Partnership for disposing of the Biffa solid waste (paragraph 693 of the Liability Judgment); and (ii) for the spreading of Biffa liquid waste, if the Partnership charged PLC materially more than Prestons charged PLC, for the same amount of work, taking into account the free use of PLC's tanker and boom by the Partnership (paragraph 695 of the Liability Judgment);
(c) The Partnership made use of the following resources of PLC without: (i) Paul disclosing the nature and extent of that use to the board of PLC; (ii) proper records being kept of that use; and (iii) PLC being properly reimbursed for their use (paragraphs 494 – 531 of the Liability Judgment) (I found that the use of these resources was both unfair and prejudicial to Andrew paragraphs 698 – 700 of the Liability Judgment):
(i) PLC employees:
— Mr Whetton 20 days driving lorries and 2 days working at Home Farm;
— Mr Elliott- Dickens 15 days working at Home Farm and 9 months on the Cemex subcontract;
— Mr Miller 6 weeks for 91 hours a week for the 6 years 2016 – 2021 inclusive harvesting potatoes and a further 91 hours in 2017 a week for 6 weeks, planting potatoes;
— Mr Ward 4 weeks;
— Samuel Bridgen 50% of his time 15/3/13 – 28/2/16 and 75% of his time from 1/3/16 – 23/3/19; and
— William Bridgen 80% of his time 1/9/16 – 29/3/19;
(ii) PLC incurred the cost of repairing Partnership trailers but not cabs used on the Cemex Subcontract and from January 2009 some, but not all of the cost of maintaining and repairing Partnership vehicles, machinery and equipment not used on the Cemex subcontract (paragraphs 535 – 536 of the Liability Judgment);
(iii) The Partnership has used PLC fuel (paragraphs 537 – 541 of the Liability Judgment) to fill up:
— Partnership lorries used on the Cemex Subcontract on 72 occasions;
— Partnership tractors spreading liquid digest on the Biffa Liquids Subcontract, from late 2014 to late 2015;
— Partnership tractors engaged in carrying out husbandry services for ABF, from early 2016; and
— Partnership vehicles engaged in the Partnership's own business activities, from early 2016; and
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