Foodco UK LLP & Others v Henry Boot Developments Ltd
| Jurisdiction | England & Wales |
| Judge | MR JUSTICE LEWISON |
| Judgment Date | 03 March 2010 |
| Neutral Citation | [2010] EWHC 358 (Ch) |
| Court | Chancery Division |
| Docket Number | Case No: HC08C03188 |
| Date | 03 March 2010 |
[2010] EWHC 358 (Ch)
Before: Mr Justice Lewison
Case No: HC08C03188
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Mr David Matthias QC and Mr Wayne Beglan (instructed by Sherrards Solicitors) for the Claimants
Mr Tim Dutton (instructed by Maples Teasdale Solicitors) for the Defendant
Hearing dates: 2 nd-5 th, 8 th-12 th and 15 th-17 th February 2010
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
The Hon Mr Justice Lewison:
| Introduction | 2 |
| Approach to the evidence | 2 |
| MSAs | 3 |
| The Site | 7 |
| The Marketing Material | 14 |
| The blue signs agreement | 16 |
| The legal pack | 31 |
| The agreement for lease | 31 |
| Mr Richard Mills | 32 |
| Caskade/KFC | 33 |
| Game Grid | 36 |
| Foodco/Muffin Break | 39 |
| EAT | 42 |
| Interchange | 45 |
| Panesar/Burger King | 46 |
| Signage | 49 |
| The Non-reliance Clause | 50 |
| The pleaded misrepresentations | 54 |
| Generic representations | 54 |
| The subjective element | 56 |
| Foretelling the future | 59 |
| Continuing representations and the duty to correct | 63 |
| Passing on information | 66 |
| What representations were made by the brochures and their supply? | 66 |
| MSA | 66 |
| Footfall | 67 |
| Tourist information and travel booking service | 67 |
| Live departure information | 67 |
| Dwell Times | 67 |
| Motorway signage | 67 |
| The supply of the brochures | 68 |
| What representations were made by the Roger Tym report and its supply? | 68 |
| Other generic representations | 69 |
| Coach hub and interchange | 69 |
| CPSE enquiries and replies | 69 |
| Additional representations made to individual tenants | 69 |
| Were any of the representations fraudulently made? | 71 |
| Brochure 1 | 71 |
| Brochure 2 | 72 |
| Brochure 3 | 76 |
| The Roger Tym & Partners report | 77 |
| Oral representations about the coach interchange | 77 |
| CPSE enquiries and replies | 77 |
| KFC | 78 |
| Game Grid | 78 |
| Muffin Break | 79 |
| EAT | 79 |
| Interchange | 80 |
| Burger King | 80 |
| A duty to correct? | 80 |
| Result | 81 |
Introduction
Junction 11 of the M20 is towards its southern end. It lies some two miles from the Channel Tunnel and five miles from the Port of Dover. In January 2008 Henry Boot Developments Ltd opened a new facility called “Stop 24” accessible from a roundabout just off the junction. Its principal components were a petrol filling station; and an amenity building housing both retail and catering units let to a number of different tenants. Henry Boot's marketing material (and a report on which the marketing material was based) had predicted 88,000 visitors a week on opening. The prediction proved wildly optimistic. Actual visitor numbers barely reached a tenth of the predicted number. What had gone wrong? And is Henry Boot liable for what has turned out to be a commercial disaster for many of the tenants? The claimants are all tenants who entered into agreements for lease. Some but not all of them completed their leases. Many of them went into occupation and some have since given up, while others remain trading. They say that they were tricked into entering the agreements for lease on the basis of misrepresentations made by Henry Boot. In essence, the important misrepresentations upon which the claim is based are alleged misrepresentations about the extent of motorway signage that would be provided for the site; misrepresentations about the likely number of visitors to the site, and misrepresentations about the facilities that the site would offer. They say that Henry Boot made the misrepresentations fraudulently; but if that is wrong, they say that the misrepresentations were made without reasonable grounds for believing that they were true. For reasons that I will explain, I have concluded that the only claim that the tenants are entitled to advance is the claim based on fraudulent misrepresentation; and that that claim fails.
Mr David Matthias QC and Mr Wayne Beglan appeared for the claimants; and Mr Tim Dutton for Henry Boot. At a late stage of the trial it was agreed that I would decide questions of liability only, leaving questions of remedy (rescission or damages) to be dealt with later, if I found that liability was established.
Approach to the evidence
The burden of proof lies on the tenants to establish their case. They must persuade me that it is more probable than not that Henry Boot made fraudulent misrepresentations. Although the standard of proof is the same in every civil case, where fraud is alleged cogent evidence is needed to prove it, because the evidence must overcome the inherent improbability that people act dishonestly rather than carelessly. On the other hand inherent probabilities must be assessed in the light of the actual circumstances of the case: In re B [2009] AC 11.
Although some of the representations on which the tenants rely were made in writing, in all cases they allege that these representations were confirmed, expanded, or supplemented by oral representations. These oral representations were made in conversations and at meetings of which there is scant record. In approaching the evidence I have tended to place weight on contemporaneous documents and documents which came into existence before the problems emerged. In assessing the recollections of witnesses, it is also important to avoid the benefit of hindsight. I must try to assess what people did, said and thought at the time. In that connection I have borne in mind the words of Lord Pearce in his dissenting speech in Onassis v Vergottis [1968] 2 Lloyd's Rep. 403, 431:
“Credibility involves wider problems than mere “demeanour” which is mostly concerned with whether the witness appears to be telling the truth as he now believes it to be. Credibility covers the following problems. First, is the witness a truthful or untruthful person? Secondly, is he, though a truthful person, telling something less than the truth on this issue, or, though an untruthful person, telling the truth on this issue? Thirdly, though he is a truthful person telling the truth as he sees it, did he register the intentions of the conversation correctly and, if so, has his memory correctly retained them? Also, has his recollection been subsequently altered by unconscious bias or wishful thinking or by overmuch discussion of it with others? Witnesses, especially those who are emotional, who think that they are morally in the right, tend very easily and unconsciously to conjure up a legal right that did not exist. It is a truism, often used in accident cases, that with every day that passes the memory becomes fainter and the imagination becomes more active. For that reason a witness, however honest, rarely persuades a Judge that his present recollection is preferable to that which was taken down in writing immediately after the accident occurred. Therefore, contemporary documents are always of the utmost importance. and lastly, although the honest witness believes he heard or saw this or that, is it so improbable that it is on balance more likely that he was mistaken? On this point it is essential that the balance of probability is put correctly into the scales in weighing the credibility of a witness, and motive is one aspect of probability. All these problems compendiously are entailed when a Judge assesses the credibility of a witness; they are all part of one judicial process and in the process contemporary documents and admitted or incontrovertible facts and probabilities must play their proper part.”
None of the witnesses had a good recollection of precisely what was said by them or to them in the course of meetings or telephone conversations. Some were clearly reconstructing what, with hindsight, they thought must have happened. I do not, however, consider that any of the witnesses I heard were deliberately giving untruthful evidence. All were doing their honest best.
MSAs
At the heart of the tenants' complaint is the fact that Henry Boot described the facility as a “Motorway Service Area” or MSA. It is therefore necessary to consider the evidence relating to MSAs in general. Henry Boot's expert on this topic, Mr Peter Dixon, gave an account of the development of MSAs within the national motorway network. The tenants' expert, Mr Paul Mew, did not disagree with Mr Dixon's historical account. When the first stretch of motorway was opened in this country in 1959 the first MSA at Newport Pagnell opened at the same time. In those days the Department of Transport itself identified sites for MSAs and acquired the land, using compulsory powers where necessary. They were then offered to the market by competitive tender on long leases. Thus the government in effect controlled the number, location, and permitted activities at individual MSAs. This conformed to the general policy that the provision of service facilities was one of the few exceptions to the general principle that there should be no direct access to motorways from individual developments. Part of the same policy required that developments with direct access from a motorway should not become destinations in their own right.
The procurement method changed in 1992. The responsibility for identifying and bringing forward sites for MSAs passed to the private sector. The planning process was relied on to select those which ultimately went forward for development. Over the years the Department of Transport had come to recognise that...
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