Christopher Charles Fisher v Colin Laverock Dinwoodie
| Jurisdiction | England & Wales |
| Judge | Sir Anthony Mann |
| Judgment Date | 26 May 2023 |
| Neutral Citation | [2023] EWHC 1279 (Ch) |
| Court | Chancery Division |
| Docket Number | Case No: CH-2022-000105 |
[2023] EWHC 1279 (Ch)
Sir Anthony Mann
Case No: CH-2022-000105
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL
Andrew Butler KC and Richard Alford (instructed by Fieldfisher LLP) for the Defendant/Appellant
Shane Sibbel (instructed via Direct Access) for the Claimant/Respondent
Hearing dates: 22 nd & 23 rd March 2023
Approved Judgment
This judgment was handed down remotely at 10.00am on Friday 26 th May 2023 by circulation to the parties or their representatives by e-mail and by release to the National Archives.
Introduction
This is an appeal which raises the question of whether a fiduciary relationship arose as between the appellant (Mr Fisher) and the respondent (Mr Dinwoodie) because Mr Dinwoodie, who says that such a relationship existed, uses that as the first basis on which he claims an interest in the shares of various companies in circumstances in which legal title to those shares was and is held by Mr Fisher. It also raises the question of whether a claim can be made to an interest in some of those shares via an express trust or a constructive trust on what are described as Pallant v Morgan principles ( [1953] Ch 43) or other constructive trust principles. The judge below (HHJ Monty KC) held in Mr Dinwoodie's favour on both of those counts. In his order he granted an injunction against Mr Fisher as well, which restrains him from competing with various of the companies concerned. That remedy is challenged in this appeal by Mr Fisher, as are the findings of fiduciary duty and trust which underpin the claims to the shares.
Mr Andrew Butler KC led for Mr Fisher in this appeal; Mr Shane Sibbel appeared for Mr Fisher. Both counsel appeared at the trial below, which doubtless partly explains their impressive mastery of the detail of the documents in this case.
A further outline of the facts of this case will assist further navigation round the issues, and I provide it here. The more detailed facts are set out in a separate section.
Mr Fisher and Mr Dinwoodie had a friendship going back many years before they started a business relationship. Several years before 2009 they started some sort of business with a number of projects. Among those projects was the provision, or intended provision, of consultancy services to third parties. There is a dispute in this case as to whether that amounted to a partnership — the judge below held that it did. In 2009 they agreed that the services would be provided by two companies, namely Business E&M Ltd (“BEM”) and Business M&E Ltd (“BME”). One was registered for VAT and the other was not. The idea apparently was that the former would deal with VAT registered clients, and the latter with clients not registered for VAT. Where it is not necessary to distinguish between these companies I shall call them the BEM companies. The first main dispute in this case is as to whether, in the circumstances, Mr Dinwoodie has acquired a beneficial interest in those shares by virtue of a fiduciary relationship between him and Mr Fisher. The judge below held that he did.
It seems a certain amount of activity took place within those companies. In 2012 Mr Fisher acquired a sole legal shareholding in various other companies originally controlled by Ms Julia Dee. In the compromise of litigation in a Tomlin order it was acknowledged that, as between Mr Fisher and Ms Dee's interests, Mr Fisher acquired sole rights to the shares in two of those companies, namely Alterations Matter Ltd (“AML”) and Queenstown Ventures Ltd (“QVT”) — collectively “the DA companies”. The second main dispute in the case was as to whether Mr Dinwoodie acquired an interest in those shares via a constructive trust and the alleged fiduciary relationship, and/or an express declaration of trust and/or the alleged Pallant v Morgan constructive trust. The judge below held that he did under all heads
The third element of the appeal in this case is the terms of the injunction to which I have referred. In this appeal it is said that that injunction is far too wide.
The basis of the appeal
The complaints made in this appeal, and which I have to consider, are as follows:
(i) The finding of partnership (which was used as a building block, though not an essential one, for the construction of the fiduciary duty case) was not justified on the evidence.
(ii) The finding of fiduciary duty was not justified on the basis of the approach by the judge and on the basis of the evidence. The judge did not adopt the right legal approach to finding fiduciary duties, did not identify sufficient facts to justify a relevant duty, did not articulate it sufficiently clearly and failed to take into account the corporate structure in finding that there was a duty.
(iii) The judge erred in finding on the evidence that there was an express trust of the DA companies shares.
(iv) The judge erred in finding, on the evidence, that the DA company shares were affected by a constructive trust.
(v) The injunction granted was too wide in principle.
The correct approach to the matters in this appeal
Mr Butler said that there was no challenge to any of the findings of primary fact made by the judge. From time to time Mr Sibbel complained that the matters raised on this appeal were matters which went to what were essentially evaluative judgments made by the judge, with consequential limits on the extent to which an appellate court can interfere with those findings. I shall consider those points when I consider the detail of this appeal. It was common ground that so far as there are evaluative decisions (which is itself in dispute) the relevant authorities lay down the following principles, which appear conveniently in Re Sprintroom Ltd [2019] EWCA Civ 932:
“76. So, on a challenge to an evaluative decision of a first instance judge, the appeal court does not carry out a balancing task afresh but must ask whether the decision of the judge was wrong by reason of some identifiable flaw in the judge's treatment of the question to be decided, “such as a gap in logic, a lack of consistency, or a failure to take account of some material factor, which undermines the cogency of the conclusion”.
77. All this said, when assessing an evaluative decision of the facts found by a trial judge, there can be no doubt that one must also bear in mind the well-known passage in the speech of Lord Hoffmann in Biogen Inc. v Medeva plc [1997] RPC 1, 45 where he said:
“…The need for appellate caution in reversing the judge's evaluation of the facts is based upon much more solid grounds than professional courtesy. It is because specific findings of fact, even by the most meticulous judge, are inherently an incomplete statement of the impression which was made upon him by the primary evidence. His expressed findings are always surrounded by a penumbra of imprecision as to emphasis, relative weight, minor qualification and nuance (as Renan said, la vérité est dans une nuance), of which time and language do not permit exact expression, but which may play an important part in the judge's overall evaluation. It would in my view be wrong to treat Benmax as authorising or requiring an appellate court to undertake a de novo evaluation of the facts in all cases in which no question of the credibility of witnesses is involved. Where the application of a legal standard such as negligence or obviousness involves no question of principle but is simply a matter of degree, an appellate court should be very cautious in differing from the judge's evaluation.”
78. Again, the position is so well summarised by Lewison LJ in his well-known judgment in Fage UK Ltd. & anor. v Chobani UK Ltd. & anor. [2014] EWCA Civ 5, at paragraph 114, as follows:
“114. Appellate courts have been repeatedly warned, by recent cases at the highest level, not to interfere with findings of fact by trial judges, unless compelled to do so. This applies not only to findings of primary fact, but also to the evaluation of those facts and to inferences to be drawn from them. The best known of these cases are: Biogen Inc v Medeva plc [1977] RPC1; Piglowska v Piglowski [1999] 1 WLR 1360; Datec Electronics Holdings Ltd v United Parcels Service Ltd [2007] UKHL 23 [2007] 1 WLR 1325; Re B (A Child) (Care Proceedings: Threshold Criteria) [2013] UKSC 33 [2013] 1 WLR 1911 and most recently and comprehensively McGraddie v McGraddie [2013] UKSC 58 [2013] 1 WLR 2477. These are all decisions either of the House of Lords or of the Supreme Court. The reasons for this approach are many. They include:
i) The expertise of a trial judge is in determining what facts are relevant to the legal issues to be decided, and what those facts are if they are disputed.
ii) The trial is not a dress rehearsal. It is the first and last night of the show.
iii) Duplication of the trial judge's role on appeal is a disproportionate use of the limited resources of an appellate court, and will seldom lead to a different outcome in an individual case.
iv) In making his decisions the trial judge will have regard to the whole of the sea of evidence presented to him, whereas an appellate court will only be island hopping.
v) The atmosphere of the courtroom cannot, in any event, be recreated by reference to documents (including transcripts of evidence).
vi) Thus even if it were possible to duplicate the role of the trial judge, it cannot in practice be done.”
Where relevant I shall apply those principles.
The judge's findings
The judge made most of his findings of primary fact in a section of his judgment devoted to that issue, but he added in a few more when he was considering the issues that he had to...
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