David Ashdown and Others (Petitioners) v John Patrick Griffin and Others
| Jurisdiction | England & Wales |
| Judge | HHJ Paul Matthews |
| Judgment Date | 19 October 2017 |
| Neutral Citation | [2017] EWHC 2601 (Ch) |
| Date | 19 October 2017 |
| Court | Chancery Division |
| Docket Number | Petition No: 5809 of 2014 |
[2017] EWHC 2601 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice
Rolls Building, Fetter Lane,
London, EC4A 1NL
HHJ Paul Matthews
(sitting as a Judge of the High Court)
Petition No: 5809 of 2014
The petitioners in person
Paul Sinclair (instructed by Joelson JD LLP) for the Respondents
Hearing dates: 16–18 October 2017
Introduction
This is my judgment on the trial as to quantum following a decision on liability in relation to a petition under the Companies Act 2006, section 994, complaining of conduct unfairly prejudicial to the interests of the petitioners, as to their shares in a company known as Addbins Ltd.
The judgment on liability was given by Edward Bartley-Jones QC, sitting as a deputy judge of the High Court, on 3 November 2015. I will refer to this in due course in more detail. In September 2016, Mr Bartley-Jones QC presided at the further trial in relation to quantum. He reserved his judgment. Very sadly, he died on 22 April 2017, without having delivered that judgment. It was therefore necessary, unfortunately, to hold a fresh trial as to quantum. The matter was relisted on 5 June 2017, for 16 to 18 October 2017. A letter dated 6 June 2017 was sent out to the parties by the court.
Concern about additional costs
In the meantime, the petitioners were very unhappy at the costs which they had incurred in relation to the first trial, and at least some of which would now be potentially thrown away. Their solicitors engaged in correspondence with the court, both at an administrative and a judicial level (both the Chancellor of the High Court and the Lord Chief Justice received emails or letters), but were in each case referred to the Ministry of Justice.
Under section 53 of the Administration of Justice Act 1985, the Secretary of State for Justice has the power (but not the obligation) to award payment out of central funds of "additional costs" incurred by a party to civil litigation where the judge presiding over that litigation dies or becomes incapacitated before its conclusion. On 17 August 2017 the Ministry of Justice responded to the enquiries of the petitioners' solicitors by letter stating that the Ministry could not make an assessment of what were the "additional costs" incurred until the conclusion of the retrial, and that, in any event, there was currently a cap of £8,000 for each party.
It is clear that the petitioners and their solicitors were unhappy at this response, and the solicitors continued to write to the Ministry of Justice, though apparently without response. But the point is that no preparations were made by the petitioners for the retrial, including the instructing of counsel for this purpose. Nor was any application made initially to the court for an adjournment of the retrial.
Events leading up to the re-trial
The petitioners told me in person on 16 October 2017 that they were only informed by their solicitors by email on 25 September 2017 that the retrial was to begin on 16 October. It does however appear, from the witness statement made by the petitioners' solicitor, Mr Dean Dunham, on 10 October 2017, in paragraph 15, that the petitioners' solicitors must have been aware of the relisted trial date at least by 22 August 2017. As I understood it at the hearing on 16 October, this is accepted by the petitioners. But, in any event, from the material provided by the respondents, exhibited to a witness statement of Joanne Gregory dated 12 October 2017, it appears that the petitioners' solicitors in fact knew of the date of the retrial as early as 14 June 2017. The solicitors concerned have not had the opportunity to comment, and therefore I cannot make any decision as to whether or not they only informed their clients of the relisted trial on 25 September 2017.
The petitioners told me that, after a conference with their counsel and their solicitor on 28 September 2017, they were left with the impression that they did not have to prepare for a trial on 16 October. Nevertheless, on 10 October 2017 the respondents' solicitors refused to consent to an adjournment of the trial, and the petitioners' solicitors issued a formal application for an adjournment. That application was supported by the witness statement from Mr Dunham, but opposed by the witness statement from Ms Gregory. The application was heard by Mr Justice Marcus Smith on Friday, 13 October 2017, when both sides were represented by counsel (but, in the case of the petitioners, not the counsel who appeared at the first trial).
The judge refused the application. I have not seen a transcript or a note of the judgment, but Mr Sinclair of counsel, who was present, tells me that the primary reason given was the delay in making the application, and a secondary reason was the prejudice to the respondents, who had incurred financial loss which they could not easily recover from the petitioners, because of their seeming impecuniosity. After the hearing, it appears that the petitioners' solicitors indicated that they could no longer act, apparently because they had not been put in funds for the trial, due to start the following Monday. I should say that, having checked the court file on the morning of 16 October 2017, there was no trace of any application by the solicitors to come off the record.
On Monday, 16 October 2017, I heard a further application from the two of the three petitioners acting in person (the first petitioner being out of the United Kingdom assisting a relative who was recovering from a fall some months earlier) for an adjournment of the trial. After reading an email from the first petitioner, and hearing from the second and third petitioners and counsel for the respondents, I dismissed that application, for reasons which I gave at the time.
Representation at the re-trial
At the hearing of the trial on Tuesday, 17 October 2017, all three of the petitioners were present in person. The respondents were represented by Mr Sinclair, instructed by solicitors, as before. At various stages in the hearing the petitioners had evidently agreed amongst themselves as to which of them would speak for all three. Most of the speaking was done by the third respondent, although the first respondent also participated. The second respondent did not address me, although he was present throughout. I also had the benefit of seeing copies of the written submissions prepared by the petitioners' then counsel at the first hearing of the quantum trial in September 2016. These included both skeleton argument and summary opening on their behalf and counsel's closing submissions for them. At the end of the hearing before me, I allowed the petitioners to prepare and hand in written closing submissions, to which Mr Sinclair did not seek to respond. I have taken all of these into account.
Background
The background to this matter is as follows. The petitioners and a Mr Matthew Giles proposed a business scheme by which businesses which attracted customers who smoked would agree to a cigarette bin being affixed to their premises and maintained without charge, on the basis that the company promoting the scheme would then be able to sell advertising on the bin. This was discussed at meetings in August and September 2007. An advertisement was placed in the Evening Standard on 19 September 2007, seeking expressions of interest by telephone from businesses who might join the scheme. A meeting was held later that day including the first respondent, at which it was agreed that a company should be formed to take forward the scheme. That company was Addbins Ltd.
In the event, 100 shares were issued, 16 to each of the five respondents, and the other 20 shared between the three petitioners and Mr Giles. The first petitioner had five, the second petitioner had seven and the third petitioner had one. That gave them 13% of the issued share capital. The first four respondents each invested £25,000 by way of loan to the company, and each became a director. But the fifth respondent, the three petitioners and Mr Giles did not put in any money beyond the par value of their shares, and did not become directors.
The first fourth and fifth respondents were all connected with the private hire company known as Addison Lee Limited ("ADL"). The first respondent was chairman of ADL until May 2013, and the fourth respondent was a director of ADL until the same time. The fifth respondent had been a director of ADL since 2002, but has been the chief operating officer of ADL since May 2013. ADL initially paid £5 per week per bin for its advertising on the company's bins. In June 2008 this was reduced to £1 per week, and in August 2008 to 50p per week. From March 2011 the company did not even invoice ADL for the advertising which it had, and ADL did not pay.
After March 2011 the fortunes of the company declined considerably. In March to April 2011 Westminster City Council prosecuted the company in respect of unauthorised advertising. It was successful and the company was fined. On 15 June 2012 the High Court (Edwards-Stuart J) made an order requiring the advertisements to be removed from bins in Westminster. On 20 December 2012 the High Court (Males J) made a further order finding the company, ADL and the first respondent to be in contempt of the earlier order. In May 2013 ADL was sold to the Carlyle Group. Despite refresher campaigns, by December 2014 ADL had concerns over the deteriorating physical condition of the bins and the ageing of the advertisements. On 12 February 2015 ADL required the company to remove its advertisements from the bins within 28 days. The...
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