Arrow Nominees Inc. and Another v Blackledge and Others

The question which arises today is the extent to which Berg & Co should undertake further enquiries in order to comply with the order we made on 27th July 2000 and who should pay for this jolly little exercise.

In so far as Berg & Co provided the information, it seems to me at least, pursuant to agreement between the solicitors as to what was required at that infant stage, to have been effectively a search of their accounts and a disclosure of what monies were coming in and out of their client account. No provision was made for the costs of that exercise when we dealt with the matter in July 2000. Berg & Co did not attend. They did not take up the liberty to apply. They did the work. They had an argument about costs, but it was agreed that the costs should be "parked". We consider that those costs should lie where they fall; and Berg & Co have already effectively written them off. So there will be no order for the costs of their providing the disclosure that they have.

As for the costs of undertaking a trawl through 25 files, if that matter had been raised before us originally or on an application for liberty to apply, we would undoubtedly have ordered that provision be made for those costs. Berg & Co are not, for these purposes, parties to the litigation and, on Norwich Pharmacal principles, the appellants who seek their help should pay for it. Therefore, Berg & Co will, in accordance with their undertaking, conduct a further search through their files to give further compliance with the order, but at the appellants' expense.

This application comes before us because there was deafening silence after about October 2000, or at least December 2000. The matter was restored without further notice to Berg & Co and without any attempt to deal with the matter sensibly. There was an exchange of correspondence, a letter of 25th February and precious little time to respond. Eversheds have jumped the gun. They have made no decent or proper attempt to get the agreement which stared everybody in the face as the obvious agreement. Therefore, on terms either that we draw an order requiring Berg & Co to do this extra work or that Berg & Co give their undertaking to do it (the form of the order to be settled by counsel), the costs of today's exercise are to be paid to Berg & Co by the appellants.

Order: counsel to settle form of order; costs of today in the sum of £7,000 to be paid to Berg & Co by the appellants.

In February 2000 in this court, Roch and Ward LJJ and myself heard appeals in proceedings brought by Arrow Nominees Inc and Lorraine Blackledge, as she then was, against Graham Blackledge, Margaret Blackledge and GR and MM Blackledge Plc in relation to the affairs of the company Bodycare (Health and Beauty) Limited.

The shares in Bodycare (Health and Beauty) Limited at that time were held as to 52 per cent by GR and MM Blackledge Plc, as to 24 per cent by Lorraine Blackledge and as to the remaining 24 per cent by Arrow Nominees Inc, a British Virgin Islands corporation, who held them as trustee of a settlement of which the principal beneficiary was Mr Nigel Tobias. Mr Tobias and Miss Lorraine Blackledge have since married, so I will refer to her hereafter as Mrs Tobias.

The proceedings were, in substance, a petition under Section 459 of the Companies Act 1985 and a cross-petition; each side alleging unfair conduct and seeking an order for the transfer on the sale of the other side's shares.

On 11th February 2000, this court indicated that it would allow the Blackledge respondents' appeal against the refusal of the judge to strike out the petition of Arrow Nominees Inc and Mrs Tobias. The reasons for that decision appear in the judgments which we handed down on 22nd June 2000. Put very shortly, the facts found by the judge led this court to take the view that the conduct of Mr Tobias in relation to the trial of the proceedings was such as to put at substantial risk a fair outcome of that trial; and that in those circumstances the right course was to bring the proceedings to an end.

Following that decision, the court had to decide what to do about the costs of the proceedings. It made an order for the interim payment of costs on 27th July 2000. Under that order, Arrow Nominees Inc, Mrs Tobias and Mr Tobias, in their own capacities and as trustees of the settlement affecting the 240 shares held by Arrow Nominees, were to pay on account of costs the sum of £750,000 to the Blackledge respondents. That order went on to direct in these...