Commodities Research Unit International (Holdings) Ltd and Others v QSP Residual Recoveries LLP ((in Administration)) (formerly King & Wood Mallesons LLP)
| Jurisdiction | England & Wales |
| Judge | Lord Justice Henderson |
| Judgment Date | 01 August 2017 |
| Neutral Citation | [2017] EWCA Civ 1197 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: A2/2016/1766 and A2/2016/1787 |
| Date | 01 August 2017 |
[2017] EWCA Civ 1197
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Mr Justice Dingemans
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Henderson
Case No: A2/2016/1766 and A2/2016/1787
Mr Nicholas Davidson QC (instructed by Fox and Partners Solicitors LLP) for the Claimants
Mr Michael Pooles QC and Mr Nigel Porter (instructed by Reynolds Porter Chamberlain LLP) for the Defendant
Hearing date: 13 July 2017
Approved Judgment
ON APPLICATIONS FOR PERMISSION TO APPEAL
Introduction
These are cross-applications for permission to appeal from the order dated 8 April 2016 of Dingemans J ("the Order") which he made after handing down his reserved judgment ("the Judgment") on 5 April 2016 in the trial of a professional negligence claim which he had heard over five days in February 2016. The neutral citation reference of the Judgment is [2016] EWHC 727 (QB).
I will refer to the claimants collectively as "CRU", and to the defendant (formerly known as SJ Berwin LLP) as "the Firm". The claim was for damages for allegedly negligent conduct and advice by the Firm when retained by CRU in connection with the termination of the employment of a former Chief Executive Officer ("CEO") of CRU by an agreement dated 15 August 2008 ("the Termination Agreement"). Although no order for anonymity has been sought or made, nothing turns on the identity of the former CEO and he did not give evidence at or participate in the trial. I am therefore content to accede to the parties' joint request that I should not name him, and I will refer to him (as did the judge in the Judgment) as "the former CEO".
There has been no determination on paper of the permission applications, as Patten LJ on 5 August 2016 adjourned them to an oral hearing with a provisional time estimate of one and a half hours. That hearing took place before me on 13 July 2017, when I had the benefit of concise and helpful oral submissions from Nicholas Davidson QC for CRU, and from Michael Pooles QC (leading Nigel Porter) for the Firm. At the end of the hearing, I reserved my decision.
I will not repeat or summarise the background to the case, which is clearly set out in the Judgment and which I will take as read. By the Order, the judge ordered the Firm to pay CRU damages of £118,125 together with interest of £6,092.34, and to pay 40% of CRU's costs on the standard basis, with a payment on account of £125,000 to be made by 29 April 2016. The judge refused each side permission to appeal, for reasons which he gave in the standard form lodged with the civil appeals office.
With this introduction, I will begin by considering CRU's grounds of appeal.
CRU's grounds of appeal
(1) Ground 2: the September 2007 meeting
I find it convenient to take ground 2 first, which challenges the judge's conclusion that at the meeting on 4 September 2007 the Firm did not advise that the former CEO's benefits under the long term incentive programme ("LTIP") would survive the termination of his employment: see the Judgment at [40] to [55]. CRU recognises that this was a finding of fact, which the judge made after hearing evidence from the three persons present at the meeting (Mr Perlman, Ms Kerr and Mr Fisher). CRU nevertheless submits that the judge's finding was wrong, in particular because he erred in his analysis of Ms Kerr's contemporary attendance note and should have found that the word "enforceable", in the part of note referring to the LTIP, was a record of her advice that the former CEO's rights under the LTIP were legally binding and would be enforceable by him on the termination of his employment.
In my view, this ground has no realistic prospect of success. Absent a demonstrable error, an appellate court will not interfere with a finding of fact made by the trial judge unless the conclusion is plainly wrong, in the sense that it is one that no reasonable judge could have reached: see, for example, Henderson v Foxworth Investments Ltd [2014] UKSC 41, [2014] 1 WLR 2600, at [62] and [67] per Lord Reed JSC. The judge gave ample reasons to justify his findings about what had occurred at the meeting, and I cannot detect any error in either his approach or his reasoning. In particular, the judge was fully entitled to accept Ms Kerr's own evidence that the word "enforceable" was not an expression of her own view, because she had only been provided with the documents that morning and had not been given any instructions before the meeting. Consistently with this, the reference to "long term incentive", in square brackets and with a question mark, on the following page of the attendance note naturally suggests that no concluded advice on this subject was given by her. Questions of this sort are quintessentially ones for the trial judge to decide.
As a prelude to consideration of ground 1, it is also important to note the judge's clear finding that Mr Perlman and Mr Fisher formed a commercial view at the meeting not to seek detailed advice about the LTIP, because CRU was making losses and it seemed unlikely that the threshold to trigger benefits under the LTIP would be crossed: see the Judgment at [50] and [54].
(2) Ground 1
Ground 1 challenges the judge's conclusion that the Firm was not in breach of duty in omitting to take steps (other than the specific step of obtaining the General Conditions) to satisfy itself as to the contents of the bargain between CRU and the former CEO. The main thrust of the challenge, as I understand it, is that if the Firm had asked (as it allegedly should have done) for the whole of CRU's file in relation to the former CEO, this would have uncovered the October 2004 emails which apparently showed an acknowledgement by him when he joined the group in 2004 that he would have no entitlement under the LTIP if he left the group before his rights were triggered by a sale of the group for at least £11 million. In support of its case on this issue, CRU places particular reliance upon the unchallenged expert evidence of Julian Roskill, which it complains the judge failed to address in detail.
The question needs to be considered both in the context of the September 2007 meeting, and again in 2008 in the run up to the Termination Agreement. So far as concerns 2007, the contention seems to me barely arguable. The Firm was instructed at very short notice, Ms Kerr only received the papers put together by CRU on the morning of the meeting, and there was no prior indication of any precise topics on which her advice was sought. Since the outcome of the meeting, as I have noted, was that the question of the LTIP was put to one side, there was no reason for Ms Kerr to advise at that stage that further...
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