Christopher Bernard Upham and Others v HSBC UK Bank Plc

I: Introduction

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II: The main entities and individuals

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II(i): HSBC

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II(ii): Future Films

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II(iii): Professional advisers to Future Films/Eclipse

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II(iv): The Claimants

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III: The Eclipse structure

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III(i): The essence of the Eclipse scheme

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III(ii): Eclipse Tranches 1 to 5

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III(iii): The roles of Future Films and of the Members

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III(iv): The Eclipse Loans and the Lending Bank

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III(v): The Disney films

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III(vi): The Licensing Agreement

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III(vii): Further Disney agreements: the Distributor and the MSP

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III(viii): The media analysts

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IV: The effect of the Eclipse structure

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IV(i): The overall effect

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IV(ii): The effect in terms of money-flow

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IV(iii): Profit at the level of each LLP

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IV(iv): Loan Interest Relief for each individual Member

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IV(v): The cost to individual Members and the rationale

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V: The Information Memorandum and Addenda

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V(i): Marketing to IFAs and to individual investors

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V(ii): Parties named in the Information Memorandum

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V(iii): The Information Memorandum and trade/trading

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V(iv): The Information Memorandum and legal advice

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V(v): The Information Memorandum and Contingent Receipts

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V(vi): The Addenda

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VI: Consultations with Mr Peacock QC

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VI(i): Summary

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VI(ii): The consultation of 8 September 2005

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VI(iii): The consultation of 20 October 2005

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VI(iv): The consultation of 22 December 2005

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VI(v): Subsequent consultations

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VII: The Consolidated Peacock Note of 18 January 2006

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VII(i): Section 1 – Summary of the instructions to counsel

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VII(ii): Section 2 – Specific questions

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VII(iii): Section 3 – Trade

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VII(iv): Paragraph 3.3 – Questioning the entire transaction

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VII(v): Paragraph 3.3 – Information about Contingent Receipts

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VII(vi): Paragraphs 3.6 to 3.10 – Conclusion on “trade”

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VII(vii): Paragraph 11.4 – Circular money-flow

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VIII: The DLA Summary

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IX: Other information from Future Films for investors/IFAs

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IX(i): The Eclipse Key Features document

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IX(ii): The Eclipse PowerPoint Presentation

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IX(iii): The KPMG Accounting Review

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IX(iv): Individual financial illustrations

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X: Mr Bowman's role in marketing

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X(i): Mr Bowman's Note

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X(ii): Mr Bowman's presentation to E&Y partners

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X(iii): Information to IFAs

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XI: Significant agreements

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XI(i): Negotiation of the agreements

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XI(ii): The Licensing Agreement

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XI(iii): The Marketing Services Agreement

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XI(iv): Waiver Letters

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XI(v): The Distribution Agreement

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XI(vi): The Future-HSBC Agreement

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XII: Review of the Eclipse agreements by advising lawyers

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XII(i): The reference in the Addenda to a review by DLA

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XII(ii): Was there a review by DLA?

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XIII: The implementation of the Eclipse scheme

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XIII(i): The movement of funds for each Eclipse LLP

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XIII(ii): The activities of the MSP

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XIII(iii): The activities of Future Films

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XIV: Restructuring and Ceasing Member arrangements

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XIV(i): Tax deferral and tax avoidance

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XIV(ii): Restructuring and Ceasing Member Arrangements

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XV: The timeline of the HMRC challenge to Eclipse 35

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XV(i): The HMRC decision re Eclipse 35

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XV(ii): The chronology of the HMRC Proceedings

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XV(iii): The relevance of this chronology

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XVI: The consequences of the HMRC Proceedings

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XVI(i): Effect on tax deferral for Eclipse 35

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XVI(ii): HMRC Follower Notices re other Eclipse LLPs

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XVI(iii): Late payment interest

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XVI(iv): Dry Tax

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XVI(v): Ceasing Member Arrangements

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XVII: Action groups

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XVII(i): The Newport action group

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XVII(ii): The ARC action group

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XVIII: Why Eclipse 35 lost in the HMRC Proceedings

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XVIII(i): Summary

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XVIII(ii): The conclusion that Eclipse 35 was not trading

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XVIII(iii) Whether the MSP was the LLP's agent

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XVIII(iv): Whether the MSP/LLP contributed to marketing/distribution

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XVIII(v): Whether the licence/sub-licence involved speculation

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XVIII(vi): Whether Contingent Receipts were too remote

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XIX: Divergence from the basis of Mr Peacock QC's advice

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XIX(i): The MSP was not the LLP's agent

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XIX(ii): No involvement of the MSP/LLP in marketing/distribution

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XIX(iii): No documentary record of the MSP's activities

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XIX(iv): Burden of proof

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XX: Non-divergence from the basis of Mr Peacock QC's advice

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XX(i): The prospect of Contingent Receipts

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XX(ii): The circular movement of funds

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XXI: The core complaint

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XXI(i): Outline of the core complaint

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XXI(ii): The representation in the Information Memorandum

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XXI(iii): The Addenda

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XXI(iv): Mr Bowman's Note

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XXI(v): The legal significance of this analysis

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XXI(vi): The relevant dates

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XXII: The Claimants' case on the core complaint

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XXII(i): The alleged Advice Representation

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XXII(ii): Falsity

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XXII(iii): Knowledge/dishonesty

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XXII(iv): Joint tortfeasance/conspiracy

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XXII(v): Dishonest assistance

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XXII(vi): Partnership

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XXII(vii): FSMA

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XXIII: HSBC's case on the core complaint

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XXIV: The Claimants' case as to other representations

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XXIV(i): The alleged Trade Representation

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XXIV(ii): The alleged Contribution Representation

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XXIV(iii): The alleged Profit Representation

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XXV: The Claimants' Sample Witnesses

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XXV(i): Limited recollection

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XXV(ii): Eclipse was a tax deferral scheme

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XXV(iii): Reliance on the support of a tax QC

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XXV(iv): Investment in films and Contingent Receipts

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XXV(v): Circular money-flow

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XXV(vi): Awareness of the HMRC challenge to Eclipse 35

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XXV(vii): Restructuring and Ceasing Member Arrangements

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XXV(viii): Concern about Dry Tax

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XXV(ix): Action groups

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XXV(x): Knowledge/ignorance of the role of HSBC

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XXV(xi): Evidence of losses

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XXV(xii): Tax deferral/aggressive tax avoidance

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XXVI: HSBC's factual witnesses

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XXVI(i): Mr Bowman

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XXVI(ii): Mr Surtees

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XXVI(iii): Other HSBC witnesses

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XXVII: Expert evidence

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XXVII(i): Mr Sills and Mr Fier

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XXVII(ii): Relevance

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XXVII(iii): Whether there was a real prospect of Contingent Receipts

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XXVII(iv): Analysis

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XXVII(v): Conclusion

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XXVIII: Representations regarding Mr Peacock QC's advice

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XXVIII(i): The relevant representations

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XXVIII(ii): Representations by Future Films

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XXVIII(iii) Representations by HSBC

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XXIX: Reliance

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XXIX(i): Intention that potential investors should rely

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XXIX(ii): Reliance by the Claimants' Sample Witnesses

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XXX: Falsity

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XXX(i): The Claimants' pleaded case as to falsity

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XXX(ii): Did Future Films/Mr Bowman have the expectation/opinion?

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XXX(iii): Did Future Films have reasonable grounds?

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XXX(iv): Did Mr Bowman have reasonable grounds?

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XXXI: Knowledge/dishonesty of Future Films

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XXXI(i): Knowledge, blind-eye knowledge, recklessness, dishonesty

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XXXI(ii): The Claimant's case in relation to Future Films

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XXXI(iii): Future Films' initial negotiations with Disney

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XXXI(iv): The contractual negotiations in February/March 2006

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XXXI(v): Mr Clarance's emails in May 2006

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XXXI(vi): Conclusion

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XXXII: HSBC's knowledge/dishonesty

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XXXII(i): The Claimants' case in relation to Mr Bowman/HSBC

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XXXII(ii): Blind-eye knowledge

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XXXII(iii): Mr Bowman's Waiver Letters

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XXXII(iv): The 7 Arts emails

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XXXII(v): Mr Bowman's statements to others

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XXXII(vi): Conclusion

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XXXIII: Conclusion on deceit

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XXXIII(i): Burden of proof

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XXXIII(ii): Conclusion

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XXXIV: Direct representations by HSBC

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XXXV: Joint tortfeasance and conspiracy

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XXXV(i): The Claimants' case

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XXXV(ii): Analysis and conclusion

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XXXVI: Dishonest assistance

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XXXVII: Partnership

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XXXVII(i): Legal principles

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XXXVII(ii): Analysis and conclusion

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XXXVIII: FSMA

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XXXVIII(i): FSMA and COB 2.1.3R

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XXXVIII(ii): The applicability of COB 2.1

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XXXVIII(iii) Alleged breaches of COB 2.1.3R

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XXXIX: Causation

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XXXIX(i): Appendix 6

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XXXIX(ii): Personal Contributions, HMRC late payment interest

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XXXIX(iii): Restructuring Arrangement fees

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XXXIX(iv): Ceasing Member Arrangement fees

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XXXIX(v): Fees to Future Films and to other advisers, etc. .

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